-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CRcePzviU8wN9EA3qU7GfYUQrB0ABmz9RIhSpVu36mU59XJEec6hNs10G/EqOtnS o362/1suMsy7JD3FgMhXyA== 0000950124-00-002828.txt : 20000509 0000950124-00-002828.hdr.sgml : 20000509 ACCESSION NUMBER: 0000950124-00-002828 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 19 FILED AS OF DATE: 20000508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELCOBUY COM INC CENTRAL INDEX KEY: 0001109361 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 431881103 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-32738 FILM NUMBER: 621990 BUSINESS ADDRESS: STREET 1: 127 WELDON PKWY CITY: ST. LOUIS STATE: MI ZIP: 63043 BUSINESS PHONE: 31491914000 MAIL ADDRESS: STREET 1: 127 WELDON PKWY CITY: ST. LOUIS STATE: MO ZIP: 63043 S-1/A 1 AMENDMENT NO. 1 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 2000 REGISTRATION NO. 333-32738 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 1 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ TELCOBUY.COM, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 5065 43-1881103 (STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
60 WELDON PARKWAY ST. LOUIS, MISSOURI 63043-3101 (314) 301-2700 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ JAMES P. KAVANAUGH TELCOBUY.COM, INC. 60 WELDON PARKWAY ST. LOUIS, MISSOURI 63043-3101 (314) 301-2700 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ COPIES OF ALL CORRESPONDENCE TO: JAMES A. KEARNS LELAND E. HUTCHINSON MICHAEL I. OBERLANDER WINSTON & STRAWN BRYAN CAVE LLP 35 WEST WACKER DRIVE ONE METROPOLITAN SQUARE CHICAGO, ILLINOIS 60601-9703 211 NORTH BROADWAY, SUITE 3600 (312) 558-5600 ST. LOUIS, MISSOURI 63102-2750 (312) 558-5700 (FAX) (314) 259-2000 (314) 259-2020 (FAX)
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as practicable after this registration statement becomes effective. If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [ ] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of earlier effective registration statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the expenses (other than underwriting discounts and commissions), which other than the SEC registration fee, NASD filing fee and Nasdaq National Market listing fee are estimates, payable by the Registrant in connection with the sale and distribution of the shares registered hereby: SEC registration fee........................................ $ 26,400 NASD filing fee............................................. 10,500 -------- Nasdaq National Market listing fee.......................... 95,000 -------- Printing and engraving expenses............................. 100,000* -------- Accounting fees and expenses................................ 200,000* -------- Legal fees and expenses..................................... * -------- Blue Sky fees and expenses (including legal fees)........... * -------- Transfer Agent and Registrar fees and expenses.............. * -------- Miscellaneous expenses...................................... * -------- Total.................................................. $ * ========
- ------------ * Estimated ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation's board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities including reimbursement for expenses incurred arising under the Securities Act of 1933, as amended. As permitted by the Delaware General Corporation Law, the Registrant's Certificate of Incorporation includes a provision that eliminates the personal liability of its directors for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under section 174 of the Delaware General Corporation Law regarding unlawful dividends and stock purchases or (iv) for any transaction from which the director derived an improper personal benefit. As permitted by the Delaware General Corporation Law, the Bylaws of the Registrant provide that (i) the Registrant is required to indemnify its directors and officers to the fullest extent permitted by the Delaware General Corporation Law, (ii) the Registrant may indemnify its other employees and agents as set forth in the Delaware General Corporation Law, (iii) the Registrant is required to advance expenses, as incurred, to its directors and executive officers in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, and (iv) the rights conferred in the Bylaws are not exclusive. The Registrant intends to enter into Indemnification Agreements with each of its directors and executive officers to give such directors and officers additional contractual assurances regarding the scope of the indemnification set forth in the Registrant's Certificate of Incorporation and to provide additional procedural protections. Except as described in the prospectus contained in this Registration Statement, at present there is no pending litigation or proceeding involving a director, officer or employee of the Registrant regarding which indemnification is sought, nor is the Registrant aware of any threatened litigation that may result in claims for indemnification. The indemnification provision in the Registrant's Certificate of Incorporation and Bylaws and the Indemnification Agreements entered into between the Registrant and each of its directors and executive officers may be sufficiently broad to permit indemnification of the Registrant's directors and executive officers for liabilities arising under the Securities Act of 1933, as amended. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the II-1 3 Registrant pursuant to such provisions, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in such Act and is therefore unenforceable. The Registrant, with approval by the Registrant's Board of Directors, expects to obtain directors' and officers' liability insurance. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES. Prior to the closing of this offering, telcobuy.com LLC will be merged into telcobuy.com, Inc. and Class A membership units will convert into shares of Series A preferred stock at the rate of one share per membership unit, Class B membership units will be converted into Class C membership units at the rate of 64.9148 Class C membership units per Class B membership unit, and Class C membership will be converted into common stock of the Registrant at the rate of one share per Class C membership unit. Since inception, we have issued and sold the following securities: 1. On September 29, 1999, we were formed as a limited liability company and issued to World Wide Technology, David L. Steward and James P. Kavanaugh percentage interests, in exchange for initial capital contributions valued at $81.5 million, $0 and $0, respectively. 2. On January 21, 2000, we recapitalized the limited liability company and between January 21, 2000 and March 2, 2000, we issued and sold an aggregate of 110,000 Class A membership units and 7,425,000 Class C membership units to entities affiliated with Highland Capital Partners, entities affiliated with Summit Partners and Donaldson, Lufkin & Jenrette Securities Corporation, for an aggregate consideration of $27,500,000. Also, as of January 21, 2000, we issued to World Wide Technology 100,000 Class B membership units and 17,358,525 Class C membership units, to David L. Steward 2,700,000 Class C membership units, and to James P. Kavanaugh 6,525,000 Class C membership units, in exchange for the percentage interests in the limited liability company that each owned prior to the recapitalization. Donaldson, Lufkin & Jenrette Securities Corporation acted as a placement agent in connection with the issuance and sale of securities to the entities affiliated with Highland Capital Partners and Summit Partners. 3. On March 2, 2000, we issued to LeadingEdge Investors 2000, L.L.C., an investment fund comprised of partners of Bryan Cave LLP, including Robert T. Ebert, Jr., 30,737 Class C membership units for an aggregate consideration of $75,000. 4. On February 16, 2000, we approved the Unit Option Plan effective as of January 27, 2000, and shortly thereafter granted options to purchase an aggregate of 1,790,750 Class C membership units at an exercise price of $4.05 per Class C membership unit to a total of approximately 375 employees, consultants, directors and advisory directors of telcobuy.com and World Wide Technology. None of such options have been exercised. The issuances of the above securities were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act, or Regulation D promulgated thereunder, or with respect to issuances to employees, directors and consultants, Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving a public offering or transactions pursuant to compensatory benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of securities in each such transaction represented their intentions to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the share certificates and warrants issued in such transactions. These issuances were made without general solicitation or advertising. All recipients either received adequate information about us or had adequate access, through their relationships with us, to information about us. ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. See Exhibit Index. II-2 4 ITEM 17. UNDERTAKINGS. The undersigned Registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned Registrant hereby undertakes that: (1) For purposes of determining liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Louis, State of Missouri, on May 5, 2000. TELCOBUY.COM, INC. By: /s/ JAMES P. KAVANAUGH ------------------------------------ James P. Kavanaugh Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ JAMES P. KAVANAUGH Director and Chief Executive May 5, 2000 - --------------------------------------------------- Officer (Principal Executive James P. Kavanaugh Officer) /s/ THOMAS W. STRUNK Director and Chief Financial May 5, 2000 - --------------------------------------------------- Officer (Principal Financial Thomas W. Strunk Officer and Principal Accounting Officer) * Chairman of the Board May 5, 2000 - --------------------------------------------------- David L. Steward * Director May 5, 2000 - --------------------------------------------------- Scott C. Collins * Director May 5, 2000 - --------------------------------------------------- Sean M. Dalton * Director May 5, 2000 - --------------------------------------------------- Robert T. Ebert, Jr. *By: /s/ JAMES P. KAVANAUGH - --------------------------------------------------- James P. Kavanaugh Attorney-In-Fact
II-4 6 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 1.1* Underwriting Agreement 2.1* Form of Merger Agreement to be entered into by telcobuy.com LLC and the Registrant 3.1+ Certificate of Incorporation of the Registrant 3.2+ Bylaws of the Registrant 4.1* Specimen certificate representing the Registrant's Common Stock 4.2* Certificate of Designation for Series A Preferred Stock 5.1* Opinion of Bryan Cave LLP regarding the validity of the Common Stock 10.1 General Services Agreement between Registrant (as successor) and World Wide Technology, Inc. dated January 21, 2000 and made effective as of October 1, 1999 10.2++ Licensing Agreement between Registrant (as successor) and World Wide Technology, Inc. dated January 21, 2000 and made effective as of October 1, 1999 10.3 Employment Agreement between Registrant (as successor) and James P. Kavanaugh dated January 21, 2000 10.4 Employment Agreement between Registrant (as successor) and Thomas M. Strunk effective as of January 21, 2000 10.5 Employment Agreement between Registrant (as successor) and Mark J. Catalano effective as of January 21, 2000 10.6 Employment Agreement between Registrant (as successor) and Robert M. Olwig effective as of January 21, 2000 10.7 Unit Option Plan 10.8 2000 Stock Option Plan 10.9* Stockholders Agreement by and among the Registrant, David L. Steward, James P. Kavanaugh, World Wide Technology, Inc., Summit V Advisors Fund, L.P., Summit V Advisors (QP), L.P., Summit Investors III, L.P. Summit Ventures V, L.P., Highland Capital Partners V Limited Partnership, Highland Subfund V-TCB Limited Partnership, Highland Entrepreneurs' Fund V Limited Partnership, Donaldson, Lufkin & Jenrette Securities Corporation, DLJ Capital Partners II, LLC, and LeadingEdge Investors 2000, L.L.C. dated , 2000 10.10* Form of Indemnification Agreement between the Registrant and each of James P. Kavanaugh, Thomas W. Strunk, David L. Steward, Scott C. Collins, Sean M. Dalton, and Robert T. Ebert, Jr. 10.11++ Agreement for the Purchase of Goods by and between Telesector Resources Group, Inc. and Registrant (as assignee) effective as of January 28, 1999 10.12++ Product Purchase Agreement by and between GTE Communication Systems Corporation, acting through its GTE Supply Division, and Registrant (as assignee) effective as of November 1, 1997 10.13++ Contract No. 99006326 between SBC Operations and Registrant (as assignee) effective as of September 9, 1999 10.14++ Agreement No. 99006728 between SBC Operations, Inc. and Registrant (as assignee) effective as of May 1, 1999 10.15++ Product Resale Amendment No. WWTI-I between Lucent Technologies Inc. and Registrant (as assignee) effective as of April 5, 1999 10.16++ Reseller Contract between Registrant (as assignee) and Lucent Technologies Inc. effective as of April 15, 1997 10.17++ Product Resale Agreement between Lucent Technologies Inc. and Registrant (as assignee) effective as of December 18, 1998
7
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 10.18++ Total Solution Provider Agreement between Fujitsu Network Communications, Inc. and Registrant (as assignee) effective as of September 15, 1997 10.19++ General Agreement between Southwestern Bell Telephone Company and Registrant (as assignee) effective as of October 26, 1990 10.20++ General Agreement No. 98005906 between SBC Operations, Inc. and Registrant (as assignee) effective as of March 15, 1999 10.21* Loan Agreement dated March 13, 2000 by and between telcobuy.com LLC and Mercantile Business Credit Inc. 23.1+ Consent of KPMG LLP 23.2 Consent of Bryan Cave LLP (included in Exhibit 5.1) 24.1 Power of Attorney (included on signature page of Registration Statement) 27.1+ Financial Data Schedule
- ------------ * To be filed by amendment. + Previously Filed. ++ Confidential Treatment will be requested with respect to certain portions of this exhibit. EX-10.1 2 GENERAL SERVICE AGREEMENT 1 EX.10.1 GENERAL SERVICES AGREEMENT This GENERAL SERVICES AGREEMENT is dated January 21, 2000 and made effective as of October 1, 1999, between World Wide Technology, Inc., a Missouri corporation ("WWT"), and telcobuy.com LLC, a Delaware limited liability company ("TCB", each of WWT and TCB being a "PARTY" and together the "PARTIES"). RECITALS A. TCB is a majority-owned subsidiary of WWT and formerly a division of WWT, and WWT has provided certain services to TCB and its predecessors. B. Because WWT's ownership of TCB will be reduced, the Parties wish to state formally the terms on which certain essential services will continue to be provided by WWT to TCB concerning information technology and Web-hosting services and administration, as well as certain other back-office and consulting services needed by TCB. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties agree as follows: ARTICLE 1. DEFINITIONS AND INTERPRETATION Various terms used in this Agreement are defined in the Definitional Appendix; the defined terms used in this Agreement begin with a capital letter. Various interpretative matters for this Agreement are also set forth in the Definitional Appendix. The Definitional Appendix is an integral part of this Agreement. ARTICLE 2. TERM 2.1. STATED TERM. This Agreement commences on the Effective Date and will continue in effect until, but excluding, the first anniversary thereof, unless terminated earlier by one or both of the Parties in accordance with Article 13, or extended as provided below. 2.2. RENEWAL. The term of this Agreement will be automatically extended for two successive one-year periods unless, at the option of TCB, it gives Notice to WWT, at least 90 days prior to the then current term, of TCB's election to not renew this Agreement. Upon Expiration, WWT shall provide transition assistance as set forth in Section 2.3 below. 2.3. TRANSITION ASSISTANCE. For up to 180 days after Expiration, WWT shall comply with TCB's reasonable requests for assistance in engaging or training another Person or Persons to provide, and for records and other information relating to, the Services rendered by WWT preceding that Expiration. TCB shall reimburse and pay WWT's Transition Expenses in accordance with invoices submitted to TCB by WWT. Article 1, Articles 8 through 12 and Articles 14 through 25 shall apply in this situation as though 2 this Agreement had not Expired. WWT may cease providing transition assistance, immediately upon Notice to TCB, if TCB has not paid the amount described in a Nonpayment Notice by the tenth Business Day after the Nonpayment Notice was given. If the records or other information provided by WWT are Confidential Information, Article 10 shall also apply as though this Agreement had not Expired. ARTICLE 3. SERVICES 3.1. SCHEDULES. During the first year of the term of this Agreement, WWT shall provide, and TCB shall pay for, such Services as TCB may request during the effectiveness of this Agreement. The Services are described on Schedules 1 and 2 to this Agreement, which are an integral part of this Agreement. After the first year of the term of this Agreement, WWT shall no longer be required to provide the requested Services, unless TCB shall have extended the term of this Agreement as provided in Section 2.2. At no time shall TCB be required to use WWT for any Services. 3.2. STANDARD OF CARE. WWT shall use the same care in rendering the Services to TCB as it uses in rendering services on behalf of WWT itself and the WWT Business Units and divisions. Further, WWT's care in rendering the Services shall be at least equal to the care that it has used in providing each Service to TCB during the period in which TCB was a division of WWT. 3.3. MANNER AND PLACE OF PERFORMANCE. WWT shall render each Service requested by TCB in accordance with any terms (including any time period) described on the corresponding Schedule or any applicable SLA, though WWT has full discretion about how to render each Service as that Service is so described. WWT is not obligated to render any Service or Task in the same manner (such as using the same personnel or other assets of WWT) as it previously rendered that Service or Task, whether before or after the Effective Date. Each Service will be performed at WWT's offices or the other place or places it was rendered most recently before the Effective Date, except as described in the corresponding Schedule or except as Subcontracted in accordance with this Agreement. TCB shall afford access to its premises as necessary or reasonably appropriate to permit a Service or Task to be rendered. 3.4. RECIPIENTS OF SERVICES. The Services shall be rendered solely to, or for the direct benefit of, TCB. TCB may not assign, license, or otherwise transfer or provide, whether for or without consideration, any right to any Service, in whole or in part, to any Person. TCB may, however, provide any other Person (whether for or without consideration) any product or information of TCB resulting or derived from any Service or Task, to the extent not prohibited by Article 10. 3.5. SUBCONTRACTING SERVICES. WWT has Subcontracted certain of the Services, in whole or in part, before the Effective Date; the Schedules indicate those Services that are Subcontracted and the corresponding Subcontractors as of the Effective Date. TCB consents to that Subcontracting and those Effective Date Service Subcontracts and 2 3 Subcontractors. WWT's subcontracting after the Effective Date, however, is subject to these terms: (a) WWT may, without any consent or approval of TCB, (i) Subcontract any Service, in whole or in part, to any Person, including any Affiliate of WWT, (ii) amend any Service Subcontract, or (iii) cease to Subcontract any Service, in whole or in part. However, WWT's election to Subcontract Services shall not relieve WWT of any of its obligations hereunder as though WWT were performing the work. (b) Other than an Effective Date Service Subcontract, TCB shall have no indemnification obligation under Section 14.4(b) regarding any Service Subcontract entered into by WWT without TCB's Reasonable Consent. Also, if WWT, without TCB's Reasonable Consent, enters into any amendment to (i) an Effective Date Service Subcontract, or (ii) any other Service Subcontract to which TCB had given its Reasonable Consent, TCB shall be liable under Section 14.4(b) only for any Damages of WWT or any of its Indemnified Agents that would have resulted without that amendment; that is, TCB shall not be liable under Section 14.4(b) for any increase in Damages that results from an amendment of that kind. WWT shall remain responsible for providing to TCB any Service that is Subcontracted, in whole or in part. Also, except as described in Section 14.4(b), WWT shall be solely responsible for its obligations to the Subcontractor (including any applicable Subcontract Termination Penalty) under each Service Subcontract. 3.6. INFORMATION REGARDING SERVICES. Each Party shall make available to the other Party any information required or reasonably requested by that other Party regarding the performance of any Service and shall be responsible for timely providing that information and for the accuracy and completeness of that information. But a Party shall not be liable for not providing any information that is subject to a confidentiality obligation owed by it to a Person other than an Affiliate of it or the other Party. A Party shall not be liable for any impairment of any Service caused by its not receiving information, either timely or at all, or by its receiving inaccurate or incomplete information from the other Party that is required or reasonably requested regarding that Service. 3.7. WARRANTY DISCLAIMER. WWT warrants that the services will be provided in a professional and workmanlike manner consistent with the manner with which WWT performs services for itself and its best customers. Subject thereto, WWT MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING ANY SERVICE OR TASK OTHER THAN AS STATED IN THIS AGREEMENT. WWT SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, REGARDING THE SERVICES. 3 4 ARTICLE 4. SERVICE LEVEL 4.1. CONTINUATION OF LEVEL OF SERVICE. WWT shall provide substantially the same Level of each Service, and each Task, as it provided to TCB during the period in which TCB was a division of WWT, except as otherwise agreed in accordance with this Agreement. 4.2. CHANGES IN LEVEL OF SERVICE. The Level of any Service may be changed by the Parties' agreement, so long as that agreement is in writing and includes a mutually acceptable corresponding Price for the changed Level of Service. A change in the Level of a Service shall be effective pursuant to such subsequent agreement. ARTICLE 5. [RESERVED] ARTICLE 6. SERVICES OBTAINED FROM OTHERS TCB may perform itself or obtain from any Person other than WWT or any Subcontractor any service or services to supplement or substitute for all or any portion of a Service. ARTICLE 7. PRICES 7.1. BACK OFFICE SERVICES. The Prices paid by TCB to WWT for Back Office Services shall equal the sum of: (a) the actual direct costs incurred by WWT for hourly personnel providing such Services, including the time of such personnel determined according to their respective hourly rates, plus (b) an allocation to TCB of WWT's indirect costs incurred in providing such Services, determined on a consistent basis with WWT's cost allocations to the WWT Business Units and divisions, plus (c) up to 20% of the sum of the amounts in subparagraphs (a) and (b). 7.2. QUARTERLY REVIEW. Not later than the 10th day of each quarter, the WWT Representative and the TCB Representative shall meet to discuss the Prices for the Back Office Services, based on: (a) the current and expected Levels of such Back Office Services, and (b) WWT's staffing and cost structure in providing the Back Office Services. The Parties shall negotiate in good faith to reach agreement on the Price for that Service by the 30th day of each quarter. 7.3. DISAGREEMENT ON BACK OFFICE SERVICE PRICING. If the Parties do not agree by the 30th day of each quarter on the Price at which any Back Office Service shall be provided, the 4 5 Dispute shall be resolved by the Dispute Resolution Procedure. Pending resolution of that Dispute, the Price for that Service shall continue to be the Price in effect during the preceding quarter. The Price determined by resolution of that Dispute shall be deemed effective as though the Parties had agreed to it as of the preceding quarter. Accordingly: (a) Any excess amount paid by TCB shall be credited (without interest) to the next invoice or invoices for any Service or Services payable by TCB after the date of resolution, or to the extent full credit cannot be given to invoiced amounts payable within 30 days after the date of resolution, paid (without interest) by WWT by wire transfer of immediately available funds to an account or accounts designated by TCB; or (b) any amount due to WWT shall be paid (without interest) within 30 days after the date of resolution by wire transfer of immediately available funds to an account or accounts designated by WWT. 7.4. CONSULTING SERVICES. The Prices paid by TCB to WWT for Consulting Services shall be determined on a case-by-case basis according to separate proposals made by WWT and accepted by TCB from time to time for the specific provision of such Consulting Services. WWT agrees that the Prices quoted to TCB for Consulting Services will not exceed the prevailing market rates for such Services at such time. ARTICLE 8. PAYMENT 8.1. INVOICES. WWT shall submit to TCB monthly one or more invoices for the Services. Each invoice shall indicate for each TCB Business Unit: (a) the amount charged for each Service covered by that invoice; (b) if the Service is a Use-based Service, the calculation of the invoiced amount or the basis on which that amount was determined, and (c) if that invoice includes any credit or offset for TCB, the amount and purpose of that credit or offset. Each invoice should also indicate the sales, use, or similar taxes being collected on each Service, or part of a Service, that WWT is taxable. An invoice may cover more than one Service. 8.2. PAYMENT. TCB shall pay the undisputed amount of each invoice within 30 days after the date of that invoice. 8.3. METHOD OF PAYMENT. TCB shall pay WWT by check or wire transfer of immediately available funds to an account or accounts designated by WWT. All payments shall be made in United States currency. 5 6 8.4. INTEREST. WWT may charge interest on any past due invoiced amount at the annual rate of 14% (or, if lower, the highest lawful rate) from the due date until paid in full with accrued interest. Any payment of interest only is not a cure or WWT's sole remedy for nonpayment of any invoiced amount that is due. 8.5. NONPAYMENT NOTICE. If WWT does not receive the full payment of any invoice (and has not agreed to accept a different amount), it may give TCB a Nonpayment Notice. TCB shall pay the amount described in the Nonpayment Notice by the tenth Business Day after that Nonpayment Notice is given. 8.6. DISPUTE OF INVOICE. Except as described in the last sentence of this Section 8.6, TCB may dispute the amount of any invoice for up to 90 days after the date of that invoice; if no Notice of that Dispute is given within those 90 days, the invoiced amount shall be deemed agreed to by TCB. The Notice of a Dispute of any invoice shall describe the basis for that Dispute and specify the Service and the TCB Business Unit to which that Dispute relates. A Dispute of any invoice (except as described in the last sentence of this Section 8.6) shall be resolved by the Dispute Resolution Procedure. If it is determined by resolution of that Dispute that TCB has paid any excess amount in response to the invoice, that amount shall be credited (without interest) to the next invoice or invoices payable by TCB after the date of resolution, or to the extent full credit cannot be given to invoiced amounts payable within 30 days after the date of resolution, paid (without interest) by WWT by check or wire transfer of immediately available funds to an account or accounts designated by TCB. Under this Section 8.6, TCB may dispute only the invoiced amount and the particular calculation thereof, and not the previously established basis for the established Price for any invoiced Service. Any Dispute regarding the application to any Service (in whole or in part) of any invoiced sales, use, or similar taxes is subject to Section 17.2(b) instead of this Section 8.6. ARTICLE 9. RECORDS 9.1. RECORD KEEPING. WWT shall create and maintain accurate records regarding the Services rendered and the amounts charged and paid or received under this Agreement. WWT's records shall include information regarding the determination of amounts charged or invoiced to TCB for Use-based Services and information regarding the determination of the cost or the cost allocation for each Service rendered. WWT's records regarding: (a) the Services rendered, and at the Level rendered, as of the Effective Date shall be of substantially the same kinds as WWT has created and maintained regarding those Services before the Effective Date, and (b) the Services, or the Level of Services, as changed after the Effective Date in accordance with this Agreement shall be of the kinds that are reasonable, and consistent with the other business records created and maintained by WWT, regarding services like those Services at those Levels. 6 7 WWT shall create and maintain those records with the same degree of completeness and care as it maintains its other similar business records. WWT shall maintain those records for the time or times required by applicable law or regulation, except that WWT shall, upon request of the TCB, maintain any of those records for a longer time if TCB pays the additional expenses incurred in complying with that request. 9.2. EXAMINATION. Each Party shall be entitled to examine, through its authorized representatives or agents and at its own expense, the records that the other Party is required to maintain under this Agreement. This examination right may be exercised only by at least three Business Days' prior Notice to the other Party, and the examination may be made only during the other Party's normal business hours or at any other reasonable time or times to which the other Party may consent. An examination shall be performed in a manner that does not unreasonably disrupt the other Party's normal business operations. This examination right will continue: (a) for two years after Expiration or the termination of this Agreement; and (b) thereafter, as long as necessary to enable a Party to respond to any Third-Party Claim or to a request or order issued by a court or another Governmental Authority. The Party conducting an examination may make and take away copies of any or all of the other Party's records being examined. ARTICLE 10. CONFIDENTIAL INFORMATION 10.1. CONFIDENTIAL INFORMATION. Each Party shall keep confidential the following information which is "Confidential Information" whether acquired by it under or in connection with this Agreement or obtained in connection with the relationship of WWT and TCB or its predecessors regarding services rendered before the Effective Date: (a) information relating to the other Party's business, financial condition or performance, or operations that the other Party treats as confidential or proprietary; (b) copies of records and other information obtained from a Party's examination of the other Party's records under Section 9.2; (c) the terms and performance of, any breach under, or any Dispute regarding this Agreement; (d) the Parties' conduct, decisions, documents, and negotiations as part of, and the status of, any Dispute resolution proceedings under the Dispute Resolution Procedure; 7 8 (e) any information, business plan, concept, idea, know-how, process, technique, program, design, formula, algorithm or work-in-process, any engineering, manufacturing, marketing, technical, financial, data, or sales information, or any information regarding suppliers, customers, employees, investors, or business operations, and any other information or materials, whether in written, or graphic, or any other form or that is disclosed orally, or electronically, or otherwise which is learned or disclosed in the course of discussions, studies, or other work undertaken between the parties; and (g) any other information, whether in a tangible medium or oral and whether proprietary to the other Party or not, that is marked or clearly identified by the other Party as confidential or proprietary. (f) Without limiting the generality of the foregoing, Confidential Information shall include all information and materials disclosed orally or in any other form, regarding WWT's software products or software product development, including, but not limited to, the configuration techniques, data classification techniques, user interface, applications programming interfaces, data modeling and management techniques, data structures, and other information of or relating to WWT's software products or derived from testing or other use thereof. Neither Party may use any of the other Party's Confidential Information other than as required to perform its obligations or exercise its rights and remedies, including as part of the resolution of any Dispute, under this Agreement. 10.2. EXCLUDED INFORMATION. A Party has no obligation under this Article 10 regarding any information, including information that would otherwise by Confidential Information, to the extent that the information: (a) is or becomes publicly available or available in the industry other than as a result of any breach of this Agreement or any other duty of that Party; (b) is or becomes available to that Party from a source that, to that Party's knowledge, is lawfully in possession of that information and is not subject to a duty of confidentiality, whether to the other Party or another Person, violated by that disclosure; or (c) is independently developed by employees of the receiving Party who did not have access to the disclosing Party's Confidential Information. 10.3. STANDARD OF CARE. Each Party shall use the same degree of care in maintaining the confidentiality and restricting the use of the other Party's Confidential Information as that Party uses with respect to its own proprietary or confidential information, and in no event less than reasonable care. 8 9 10.4. PERMITTED DISCLOSURES. A Party may disclose Confidential Information to its officers, directors, agents, or employees as necessary to give effect to this Agreement. Each Party shall inform each of these Persons to whom any Confidential Information is communicated of the obligations regarding that information under this Article 10 and impose on that Person the obligation to comply with this Article 10 regarding the Confidential Information. Each Party shall be responsible for any breach of that Party's obligations under this Article 10 by its officers, directors, agents, or employees. 10.5. REQUIRED DISCLOSURES. Each Party may disclose Confidential Information in response to a request for disclosure by a court or another Governmental Authority, including a subpoena, court order, or audit-related request by a taxing authority, if that Party: (a) promptly notifies the other Party of the terms and the circumstances of that request; (b) consults with the other Party, and cooperates with the other Party's reasonable requests, to resist or narrow that request; (c) furnishes only information that, according to written advice (which need not be a legal opinion) of its legal counsel, that Party is legally compelled to disclose; and (d) uses its Reasonable Efforts to obtain an order or other reliable assurance that confidential treatment will be accorded the information disclosed. A Party need not comply with these conditions to disclosure, however, to the extent that the request or order of the Governmental Authority in effect prohibits that compliance. A Party may also disclose Confidential Information without complying with these conditions to the extent that the Party is otherwise legally obligated to do so (for example, to comply with applicable securities laws), as confirmed by advice of competent and knowledgeable counsel. Further, a Party may also disclose Confidential Information, without complying with these conditions, in connection with a tax audit if the disclosure is to representatives of a taxing authority, or in connection with a tax contest if that Party uses its Reasonable Efforts to assure that confidential treatment will be accorded the information disclosed. 10.6. TITLE TO INFORMATION. The Confidential Information of a Party disclosed by it to the other Party under this Agreement shall remain the property of the disclosing Party; nothing in this Agreement grants or conveys to the other Party any ownership or other proprietary rights in any of that Confidential Information. 10.7. SURVIVAL; RETURN. The obligations under this Article 10 shall continue on and after Expiration or the termination of this Agreement. Upon request of the disclosing Party upon or after Expiration or the termination of this Agreement, the other Party shall return or, if requested by the disclosing Party, destroy the Confidential Information of the 9 10 disclosing Party that it holds. The requested return or destruction shall include removal or deletion of Confidential Information from all data bases and magnetic media of the other Party. ARTICLE 11. PARTIES' RELATIONSHIP 11.1. INDEPENDENT. The Parties are independent; each has sole authority and control of the manner of, and is responsible for, its performance of this Agreement. This Agreement does not create or evidence a partnership or joint venture between the Parties. Neither Party may create or incur any liability or obligation for or on behalf of the other Party, except as described in this Agreement. This Agreement does not restrict WWT from providing or rendering any services, including services like the Services, to any other Person; nothing in this Agreement, however, gives WWT the right to provide or render any services in violation of any other agreement entered into by the Parties. 11.2. EMPLOYEES. Except as described in Section 14.4(b) or Section 14.4(c) or, for the purposes of this Agreement: (a) each Party is solely responsible for its own employees or agents, including the actions or omissions and the compensation of those employees and agents, and (b) neither Party has any authority with respect to any of the other Party's employees or agents. 11.3. AUTHORITY AND ENFORCEABILITY. Each Party warrants to the other Party that: (a) it has the requisite corporate authority to enter into and perform this Agreement; (b) its execution, delivery, and performance of this Agreement have been duly authorized by all requisite corporate action on its behalf; (c) this Agreement is enforceable against it; and (d) it has obtained all consents or approvals of Governmental Authorities and other Persons that are conditions to its entering this Agreement. 11.4. THIRD-PARTY CONSENTS. Each Party shall be responsible for obtaining and maintaining any licenses, permits, consents, or approvals of Governmental Authorities and other Persons necessary or appropriate for it to perform its obligations under this Agreement. 11.5. THIRD-PARTY-RELATED ARRANGEMENTS. The Parties also have certain arrangements and agreements relating to certain of the Services provided by an Effective Date Service Subcontract or provided directly by WWT but involving an agreement with a third party. The Parties currently expect that the matters or issues addressed by those arrangements or agreements will need to continue to be addressed whether in the same or in a different manner upon Expiration or the termination of this Agreement. Hence, before and upon 10 11 any of those events, each Party shall use its Reasonable Efforts to change, renegotiate, replace, sever, or assign, as the Parties mutually agree, those arrangements or agreements as necessary to so address those matters or issues and to equitably allocate to the respective Parties in accordance with their respective assets and businesses the benefits and the obligations of those arrangements or agreements upon and after the occurrence of any of those events. 11.6. FURTHER ASSURANCES. Each Party shall take such actions, upon request of the other Party and in addition to the actions specified in this Agreement, as may be necessary or reasonably appropriate to implement or give effect to this Agreement. ARTICLE 12. PARTIES' REPRESENTATIVES 12.1. REPRESENTATIVES' AUTHORITY. Each Party has authorized its Representative to conduct discussions and negotiations, make and communicate decisions, frame and pose questions or issues, and resolve Disputes on behalf of that Party relating to this Agreement. Though one Party's employees or agents other than its Representative may also take actions of the kinds described in the preceding sentence with the other Party's employees or agents other than its Representative, matters that require more formal discussions or negotiations between Parties shall be addressed through and by the Representatives. Each Party and its Representative are entitled to rely on the actions and decisions of the other Party's Representative relating to this Agreement. 12.2. DESIGNATION. WWT designates its Vice President and General Manager as WWT's Representative, and TCB designates its Chief Technology Officer as TCB's Representative, upon and after the Effective Date until changed by the designating Party. A Party may change its Representative by Notice to the other Party. A Party may rely on and deal with the Person who is designated as the other Party's Representative until any Notice of change is given by the other Party. ARTICLE 13. TERMINATION 13.1. TERMINATION EVENTS. This Agreement may be terminated, without liability to the Party terminating: (a) by either Party upon 90 days' Notice to the other, at any time upon or after the Parties cease to be Affiliates; (b) by a Party, immediately upon Notice to the other Party, if: (i) that other Party makes a general assignment of all or substantially all of its assets for the benefit of its creditors; (ii) that other Party applies for, consents to, or acquiesces in the appointment of a receiver, trustee, custodian, or liquidator for its business or all or substantially all of its assets; 11 12 (iii) that other Party files, or consents to or acquiesces in, a petition seeking relief or reorganization under any bankruptcy or insolvency laws; or (iv) a petition seeking relief or reorganization under any bankruptcy or insolvency laws is filed against that other Party and is not dismissed within 90 days after it was filed; (c) by a Party, immediately upon Notice to the other Party, if that other Party's material breach of this Agreement continues uncured or uncorrected for 30 days after both the nature of that breach and the necessary cure or correction has been agreed upon by the Parties or otherwise determined by the Dispute Resolution Procedure; but if: (i) the Parties agree or it is determined by the Dispute Resolution Procedure that the material breach is not capable of being cured or corrected, the termination shall be effective immediately upon Notice, without any cure period; or (ii) the breaching Party (A) reasonably requires longer than 30 days to cure or correct, such as when the applicable Service Subcontract permits the Subcontractor longer than 30 days to cure or correct, and (B) Notifies the non-breaching Party of the circumstances, then the cure period shall be extended for the reasonable time so required, so long as during that time the breaching Party diligently acts to effect that cure or correction. Unless otherwise agreed in writing by the Parties, no cure period extension shall exceed 90 days. A non-breaching Party's exercise of the remedy described in this Section 13.1(c) shall be conditioned upon its giving a Breach Notice to the other Party. (d) by WWT, immediately upon Notice to TCB, if TCB has not paid the amount described in a Nonpayment Notice by the tenth Business Day after that Nonpayment Notice was given. A Party may not terminate this Agreement if the event or circumstance described above in this Section 13.1, upon which that Party would rely in so terminating, was caused by that Party's breach of this Agreement. 13.2. NONEXCLUSIVE. The termination rights under Section 13.1(c) and 13.1(d) are not exclusive of any other right or remedy of a non-breaching Party granted in this Agreement. 12 13 13.3. CONSEQUENCES OF TERMINATION. Upon termination of this Agreement: (a) under Section 13.1(a) or by TCB under Section 13.1(c): (i) During the Transition Period WWT shall continue to render, and TCB shall pay for, each Service reasonably requested by TCB until terminated by either Party in accordance with Sections 13.3(a)(ii) and 13.3(a)(iii). Except as stated in Section 13.3(a)(ii), the terms of this Agreement shall continue to apply during the Transition Period as though no termination of this Agreement had occurred. (ii) The Level of each Service provided, and the Price for each Service, during the Transition Period shall be the same as in effect immediately preceding the Termination Date. During the Transition Period, any Service may be terminated by (A) TCB, for any reason, by 60 days' Notice to WWT, or (B) WWT, if TCB has not paid the amount described in a Nonpayment Notice by the tenth Business Day after the Nonpayment Notice was given. Any Service that is the subject of a Notice of termination shall continue to be provided by WWT until the effective date of that termination, and TCB shall pay for that Service rendered through that date. Neither Party may unilaterally rescind a Notice of termination. (iii) If either Party reasonably determines that the termination of any Service during the Transition Period would make it functionally impossible to continue any other Service during the Transition Period, that Party shall promptly Notify the other Party of that determination; any Service that so becomes functionally impossible to render shall be deemed terminated effective upon the date of termination of the Service that caused that impossibility. Neither Party may unilaterally reinstate any Service that has been terminated as of the Termination Date or during the Transition Period. (b) under Section 13.1(b), then during the Transition Period, WWT shall comply with TCB's reasonable requests for assistance in TCB's engaging or training another Person or Persons to provide, and for records and other information relating to, each Service in effect immediately preceding the Termination Date. If WWT terminates this Agreement, TCB shall reimburse and pay WWT's Transition Expenses in accordance with invoices submitted to TCB by WWT. Article 1, Articles 8 through 12 and Articles 14 through 25 shall apply in this situation as though this Agreement had not been terminated. When TCB is obligated to reimburse and pay WWT's Transition Expenses, WWT may cease providing transition assistance, immediately upon Notice to TCB, if TCB has not paid the amount described in a Nonpayment Notice by the tenth Business Day after the Nonpayment Notice was given. If the records or other information provided by 13 14 WWT are Confidential Information, Article 10 shall also apply as though this Agreement had not been terminated. (c) under Section 13.1(d) or by WWT under Section 13.1(c), then WWT shall have no obligation to provide any continued Services or transition assistance as described above in this Section 13.3, unless TCB first pays all past due amounts, cures any material breach, pays in advance for any further Services and pays in advance 50% of the estimated Transition Expenses. 13.4. SURVIVAL OF RIGHTS AND OBLIGATIONS. No rights or obligations of either Party that expressly or by implication are to remain in effect in order to give effect to this Agreement shall be impaired by Expiration or the termination of this Agreement, and those rights and obligations shall remain in effect. ARTICLE 14. LIABILITY AND REMEDIES 14.1. WARRANTIES. Each Party's warranties in this Agreement are made solely to and for the benefit of the other Party and, to the extent described in this Agreement, TCB. No Person other than a Party may make a claim based on the other Party's warranties under this Agreement; any claim by TCB shall be made by TCB. 14.2. NONCONFORMING SERVICES. TCB shall promptly Notify WWT of any Deficiency in any Service or Task, whether rendered by WWT or a subcontractor. To the extent WWT agrees, or it is otherwise determined by the Dispute Resolution procedure, that a Service or Task was or is a Nonconforming Service, WWT shall use its Reasonable Efforts promptly to cure or correct, or cause its Subcontractor to cure or correct, the Deficiency to the extent it may then be cured or corrected. (a) If the Deficiency was related to a Consulting Service, then WWT shall be responsible or liable for TCB's resulting Damages as provided in the separate proposal or contract pursuant to which WWT was to provide such Consulting Service to TCB. The Parties agree that such proposals or contracts may limit WWT's liability to TCB to the total amount paid by TCB to WWT under such proposal or contract. (b) If the Deficiency was related to a Back Office Service and was, or was the result of, WWT's or a Subcontractor's negligence or TCB's negligence, WWT shall not be responsible or liable for any resulting Damages of TCB. (c) If the Deficiency was related to a Back Office Service and was, or was the result of, WWT's or a Subcontractor's gross negligence (including recklessness) or willful misconduct, WWT shall be responsible or liable for TCB's resulting Damages in an amount up to: 14 15 (i) if WWT's liability is determined (by the Parties' agreement or the Dispute Resolution Procedure) after the calendar year in which the Deficiency occurred, the aggregate amount received by WWT for the Nonconforming Service for the calendar year in which the Deficiency occurred; (ii) if WWT's liability is determined during the calendar year in which the Deficiency occurred and the Nonconforming Service is a Fixed-price Service, the annual Price for the Nonconforming Service for that calendar year; or (iii) if WWT's liability is determined during the calendar year in which the Deficiency occurred and the Nonconforming Service is a Use-based Service, the greater of (A) the estimated annual amount for that Service for that calendar year and (B) the aggregate amount received by WWT to the date the liability is determined, annualized for that calendar year. The annual limit on WWT's liability described above in this Section 14.2(c) is not cumulative from year to year. If there is more than one Deficiency in a single Service for which WWT is responsible or liable for Damages and WWT's liability for those Deficiencies is determined in the same calendar year, WWT's responsibility or liability for Damages resulting from all of those Deficiencies shall be subject to the applicable annual limit on liability described above in this Section 14.2(c). 14.3. ACTUAL DAMAGES. Neither Party shall be liable under or relating in any manner to this Agreement for any losses or damages other than Damages, even if a Party has been advised of the possibility of losses or damages of that kind and regardless of the form of the Proceedings or the theory of liability, whether based on contract, warranty, tort (including negligence and strict liability), infringement, or misappropriation. 14.4. INDEMNITIES FOR CERTAIN BREACHES AND OTHER MATTERS. The following shall apply to any breach of, and certain other Damages relating to, this Agreement, other than a Deficiency for which WWT has no liability for Damages under Section 14.2(b) or a nonpayment by TCB of any amount relating to an invoice: (a) Subject to the limits on liability described in Section 14.2(c), if that Section is applicable, each Party shall indemnify the other Party against all Damages of the Indemnified Party, or any of its Indemnified Agents, resulting from or relating to: (i) any breach of this Agreement, including breach of any warranty in this Agreement, by the Indemnifying Party; (ii) any Proceedings relating to a breach of this Agreement by the Indemnifying Party; and 15 16 (iii) the actions or omissions of the Indemnifying Party's employees or agents under or in connection with this Agreement. (b) TCB shall also indemnify WWT against all Damages of WWT or any of its Indemnified Agents, including any Subcontract Termination Penalty, under or relating to any Service Subcontract, other than as described in Section 3.5(b), resulting from: (i) any violation by TCB of any obligation imposed on it under that Service Subcontract; or (ii) the actions or omissions of TCB's employees or agents under or in connection with that Service Subcontract. (c) TCB shall also indemnify WWT against all Damages of WWT or any of its Indemnified Agents resulting from or relating to any sales, use, or similar taxes (however described) applicable to any of the Services, in whole or in part, that are assessed or levied against or paid by WWT. (d) The indemnification obligations in Sections 14.4(a), 14.4(b) and 14.4(c) shall be extinguished to the extent that the Damages of the other Party, or any of its Indemnified Agents for whom or which the other Party is seeking indemnification, were caused by the gross negligence (including recklessness) or willful misconduct of the Person for whom or which indemnification is sought. THE ORDINARY NEGLIGENCE OF A PERSON OR THE JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF PERSONS SHALL NOT PRECLUDE THAT PERSON OR ANY OF THOSE PERSONS FROM RECEIVING THE BENEFITS OF INDEMNIFICATION UNDER THIS AGREEMENT. (e) If an Indemnification Claim is not based on a Third-Party Claim, the Indemnified Party shall give an Indemnification Claim Notice promptly after the event constituting the basis for the Indemnification Claim; its failure to do so, however, shall relieve the Indemnifying Party of its indemnification obligations only to the extent the Indemnifying Party is actually prejudiced by that failure. If the Indemnified Party gives an Indemnification Claim Notice regarding an Indemnification Claim not based on a Third-Party Claim, the Indemnifying Party shall Notify the Indemnified Party within the Indemnification Response Period whether the Indemnifying Party disputes all or any portion of the Indemnification Claim. If the Indemnifying Party does not give that dispute Notice or agrees to accept liability for all or a portion of the Indemnification Claim, the Indemnification Claim, or the agreed portion of that Indemnification Claim, shall be the Indemnifying Party's liability. Otherwise, the Indemnification Claim shall be deemed a Dispute to be resolved by the Dispute Resolution Procedure. 16 17 (f) If an Indemnification Claim is based on a Third-party Claim: (i) The Indemnified Party shall give an Indemnification Claim Notice promptly after it receives the Third-Party Claim. (ii) The Indemnifying Party shall be entitled to defend the Third-Party Claim, with its chosen counsel and at its own expense, if (A) the Third-Party Claim seeks only monetary relief against the Indemnified Party, and (B) the Indemnifying Party elects to assume, and diligently conducts, that defense. The Indemnifying Party's election to defend shall be given by Notice to the Indemnified Party within the Indemnification Response Period. If the Indemnifying Party conducts the defense, the Indemnified Party may participate in that defense with its own counsel and at its own expense. (iii) If the Indemnifying Party does not elect to defend the Third-Party Claim by Notice within the Indemnification Response Period, or if the Indemnifying Party does not diligently conduct the defense, the Indemnified Party shall be entitled, upon further Notice to the Indemnifying Party, to defend the Third-Party Claim on behalf of, and for the account and risk of, the Indemnifying Party (if it is determined that the Indemnifying Party has an indemnification obligation regarding that Indemnification Claim). In this circumstance, the Indemnifying Party may participate in the defense with its own counsel and at its own expense. (iv) If there is a conflict of interest that makes it inappropriate for the same counsel to represent the Indemnifying Party and the Indemnified Party in defending the Third-Party Claim, the Indemnifying Party shall pay for separate counsel for the Indemnified Party. (v) The Indemnifying Party defending a Third-Party Claim may compromise, settle, or resolve that Third-Party Claim without the Indemnified Party's consent if the compromise, settlement, or resolution involves only the payment of money by the Indemnifying Party (whether on its own behalf or behalf of the Indemnified Party) and the third-party claimant provides the Indemnified Party a release from all liability regarding the Third-Party Claim. Otherwise, the Indemnifying Party may not compromise, settle, or resolve the Third-Party Claim without the Indemnified Party's Reasonable Consent. (vi) The Indemnifying Party and the Indemnified Party shall cooperate with all reasonable requests of the other in defending any Third-Party Claim. 14.5. TIME FOR CLAIMS. TCB may make a claim against WWT for the cure or correction of any Deficiency only within two years after the Deficiency occurred; any Deficiency shall 17 18 be deemed to have occurred when the particular Nonconforming Service was rendered. A Party may make an Indemnification Claim: (a) not based on a Third-Party Claim, only within two years after the breach o other event constituting the basis for that Indemnification Claim occurred, even if not discovered until after that second anniversary, or (b) based on a Third-Party Claim, at any time. 14.6. OFFSET. A Party entitled to any payment due from the other Party under this Agreement may offset all or any portion of the amount of that payment against any payment that is due from it to the other Party under this Agreement. 14.7. EQUITABLE RELIEF. To the extent that monetary relief is not a sufficient remedy for any breach of this Agreement, or upon any breach or impending breach of Article 10, the non-breaching Party shall be entitled to injunctive relief as a remedy for that breach or impending breach by the other Party, in addition to any other remedies granted to the non-breaching Party in this Agreement. That injunctive relief shall be sought through arbitration in accordance with the Dispute Resolution Procedure, except as permitted by Section B.4(b) of the Dispute Resolution Appendix. 14.8. EXCLUSIVE REMEDIES. Except for the termination right stated in Article 13 and the relief described in Sections 15.4 and 17.2(b) and in the Dispute Resolution Procedure, the remedies described in this Article 14 are the exclusive rights and remedies of a Party regarding any breach of this Agreement or any other matter that may be the subject of an Indemnification Claim. 14.9. WAIVER OF REMEDIES. No forbearance, delay, or indulgence by either Party in enforcing this Agreement, within the applicable time limits stated in this Agreement, shall prejudice the rights or remedies of that Party. No waiver of a Party's rights or remedies regarding a particular breach of this Agreement constitutes a waiver of those rights or remedies, or any other rights or remedies, regarding any other or any subsequent breach of this Agreement. 14.10. CUMULATIVE REMEDIES. A Party's election to pursue a right or remedy granted in this Agreement upon the other Party's breach of this Agreement shall not preclude the non-breaching Party from pursuing other rights or remedies granted to that Party in this Agreement that are applicable to that breach under this Agreement. 14.11. SURVIVAL. The rights, remedies, and obligations under this Article 14 shall continue on and after Expiration or the termination of this Agreement. ARTICLE 15. FORCE MAJEURE 15.1. NO BREACH OR LIABILITY. No delay or failure of a Party to perform any of its obligations, other than payment obligations, under this Agreement due to causes beyond its 18 19 reasonable control shall constitute a breach of this Agreement or render that Party liable for that delay or failure. Causes beyond a Party's reasonable control include: (a) events or circumstances that the Party, using its Reasonable Efforts, is unable to prevent or overcome; (b) as to WWT, causes also beyond the reasonable control of the Person to whom or which WWT has Subcontracted the affected Service or Task in accordance with this Agreement; and (c) labor disputes, strikes, or other similar disturbances; acts of God; utilities or communications failures; acts of the public enemy; and riots, insurrections, sabotage, or vandalism. 15.2. NOTICE OF EXCUSABLE DELAY OR FAILURE. If a Party anticipates any excusable delay or failure under Section 15.1, it shall promptly Notify the other Party of the anticipated delay or failure, the anticipated effect of that delay or failure, and any actions that are being or are to be taken to alleviate or overcome the cause of the delay or failure. 15.3. EFFORTS TO OVERCOME. If a Party is claiming an excusable delay or failure under Section 15.1, it shall use its Reasonable Efforts to alleviate or overcome the cause of the delay or failure as soon as practicable. 15.4. EXTENDED DELAY OR FAILURE. If an excusable delay or failure continues for more than 10 consecutive days, the Party entitled to the benefit of the affected obligation may perform itself or obtain from any other Person the obligation to which that Party is entitled (and that Party shall Notify the other Party of this election). In the event WWT is the party unable to perform hereunder, TCB's Notification to WWT may, if clearly provided therein, serve as termination notice for the Service which WWT has been unable to perform. Such termination shall relieve WWT from all further duties to perform such terminated Service and shall relieve TCB from the obligation to pay for any such Services performed after such Notice of termination. ARTICLE 16. DISPUTE RESOLUTION MATTERS 16.1. GENERAL PROCEDURES. Except as otherwise stated in this Agreement, the Parties shall resolve all Disputes in accordance with the Dispute Resolution Procedure. Nevertheless, if any Person other than the Parties: (a) has initiated a lawsuit or other Proceedings against or involving either or both of the Parties in which a Dispute will be resolved, or (b) is a necessary participant in any Proceedings to resolve a Dispute and cannot be joined by either or both of the Parties in an arbitration of that Dispute under Section B.3 of the Dispute Resolution Appendix, 19 20 so that (in either case) the Dispute Resolution Procedure is or will be ineffective, then the Parties need not use or follow the Dispute Resolution Procedure to resolve that Dispute, though the submission to jurisdiction in Section B.5 of the Dispute Resolution Appendix shall apply if necessary. 16.2. CONTINUED PERFORMANCE. The Parties shall continue performing their respective obligations under this Agreement while a Dispute is being resolved. 16.3. PARTIES' AGREEMENT. Nothing in this Article 16 or the Dispute Resolution Procedure prevents the Parties from resolving any Dispute by mutual agreement at any time. ARTICLE 17. EXPENSES AND TAXES 17.1. EXPENSES. Each Party shall be solely responsible for its costs and expenses incurred in performing its obligations and exercising its rights and remedies under this Agreement, except as otherwise provided in this Agreement. 17.2. TAXES. The Parties shall be responsible for tax payments or liabilities relating to this Agreement as follows: (a) Each Party shall be responsible for its income and franchise taxes and for all other taxes (however described) based on its own income or earnings. (b) TCB shall be responsible for all sales, use, and similar taxes (however described) applicable to the Services, in whole or in part. This obligation includes TCB's paying the sales taxes identified in WWT's invoices submitted to TCB for the Services. (i) If TCB claims an exemption or exclusion from taxes of this kind, it shall deliver to WWT a certificate or letter stating TCB's good-faith belief that a Service is not, in whole or in part, subject to those taxes. Whether or nor TCB delivers that certificate or letter, however, it shall indemnify WWT, in accordance with Section 14.4(c)(iv), against any taxes of this kind assessed or levied against, or paid by, WWT and any other related Damages of WWT. (ii) If WWT receives an assessment from a taxing authority covering taxes for which TCB is responsible under this Section 17.2(b), WWT shall Notify TCB of the assessment and, at TCB's request, timely contest the assessment. If payment to the taxing authority is required by law as a condition to protest, TCB shall timely furnish WWT the required amount for that payment. (iii) If TCB believes it has overpaid taxes to WWT for any of the Services (in whole or in part), TCB may require WWT to file a claim for a refund at 20 21 TCB's expense. If permitted by law, WWT may assign any right to a refund directly to TCB instead of filing a refund claim. Any refund of taxes (including any interest) received by WWT under this Section 17.2(b)(iii) shall be promptly forwarded to TCB. (iv) Before WWT is required to pursue any action requested by TCB under this Section 17.2(b), WWT may at any time require TCB to deliver a letter of advice from outside counsel (selected by TCB) stating that TCB's tax position is reasonable. (v) Except as stated in the next sentence, any Dispute between the Parties regarding the application of any taxes of this kind to any Service (in whole or in part) shall be resolved by the Dispute Resolution Procedure. Any Dispute as to the amount of tax (if any) owed to a taxing authority, including a Dispute between a Party and the taxing authority, need not be resolved by the Dispute Resolution Procedure, but may be resolved by any appropriate administrative or legal procedure available to a Party or the Parties under this Agreement apart from the Dispute Resolution Procedure. (c) Each Party shall be responsible for all real property, personal property, and other taxes (however described) based on its owned or leased property, whether real or personal. (d) Each Party shall be responsible for all employment-related taxes (however described) regarding its own employees. Each Party shall cooperate with any reasonable request of the other Party to restructure any Service, in whole or in part, or to take any other reasonable action to avoid or minimize any duplicate taxes that might be imposed; the requesting Party shall bear in the expenses of the other Party's compliance. ARTICLE 18. COMMUNICATIONS 18.1. FORM. Each notice (including a Nonpayment Notice, an Indemnification Claim Notice, and a Breach Notice), request, response, demand, claim, and other communication required or permitted under this Agreement shall be in writing and shall be transmitted, delivered, or sent by: (a) personal delivery, (b) courier or messenger service, whether overnight or same-day, (c) prepaid telecopy or facsimile, or 21 22 (d) certified United States mail, with postage prepaid and return receipt requested, in any case addressed to the other Party at the address or number for that Party set forth in Section 18.2, or at such other address or number as the recipient has designated by Notice to the other Party in accordance with this Article 18. 18.2. ADDRESSES. The Parties shall transmit, deliver, or send communications as follows. (a) If to WWT: World Wide Technology, Inc. 127 Weldon Parkway St. Louis, Missouri 63043 Attention: Joe Koenig (b If to TCB: telcobuy.com LLC 127 Weldon Parkway St. Louis, Missouri 63043 Attention: Bob Olwig, Tom Strunk and Jim Kavanaugh 18.3. EFFECTIVENESS. Each communication transmitted, delivered, or sent: in person, by courier or messenger service, or by certified United States mail, postage prepaid and return receipt requested, shall be deemed given, received, and effective on the date delivered to or refused by the intended recipient (with the return receipt or the equivalent record of the courier or messenger being deemed conclusive evidence of delivery or refusal) ARTICLE 19. ASSIGNMENT Neither Party may assign any of its rights or delegate any of its duties or obligations under this Agreement without the other Party's Consent; this prohibition of assignment and delegation shall include any assignment and delegation by operation of law (such as merger or consolidation). Any attempted assignment or delegation without the other Party's Consent shall be void and without effect. The two preceding sentences do not, however, preclude WWT from Subcontracting. ARTICLE 20. AMENDMENT AND WAIVER This Agreement may be amended or modified, and any provision of this Agreement may be discharged or waived, only by a document signed by the Party against which the amendment, modification, discharge, or waiver is sought to be enforced. ARTICLE 21. INTEGRATION This Agreement constitutes the Parties' entire agreement on this subject; it replaces and supersedes any prior agreement or understanding of the Parties, whether written or oral, on this subject not expressed or referred to in this Agreement. 22 23 ARTICLE 22. SEVERABILITY If any part of this Agreement is for any reason found to be unenforceable, all other parts of this Agreement nevertheless remain enforceable. ARTICLE 23. SUCCESSORS This Agreement binds and inures to the benefit of the Parties and their respective legal representatives, permitted successors, and permitted assigns. ARTICLE 24. GOVERNING LAW This Agreement shall be interpreted or construed under Missouri law. Likewise, the validity and performance of this Agreement shall be enforced, and all issues relating to this Agreement shall be resolved, under Missouri law. Each Party consents to the exclusive personal jurisdiction and venue of the courts, state and federal, located in St. Louis County, Missouri. ARTICLE 25. COUNTERPARTS This Agreement may be signed in any number of counterparts, with the same effect as if all signatories had signed the same document. All counterparts shall be construed together to constitute one, and the same, document. IN WITNESS WHEREOF, the Parties hereto have executed this General Services Agreement effective as of the date first above written. WORLD WIDE TECHNOLOGY, INC. By /s/ David L. Steward ------------------------------ Name: David L. Steward --------------------------- Title: Chief Executive Officer -------------------------- TELCOBUY.COM LLC By /s/ James P. Kavanaugh ------------------------------ Name: James P. Kavanaugh --------------------------- Title: Chief Executive Officer -------------------------- 23 24 DEFINITIONAL APPENDIX TO GENERAL SERVICES AGREEMENT A. DEFINED TERMS. In the Agreement, the following terms have the corresponding meanings: "AFFILIATE": A Person that directly or indirectly through one or more intermediaries' Controls, is Controlled by, or is under common Control with another Person. For purposes of section 13.1(a), the parties will no longer be Affiliates when WWT's ownership interest in TCB falls below 30% of the total issued and outstanding equity of TCB. "AGREEMENT": The General Services Agreement between WWT and TCB (including the Definitional Appendix, the Dispute Resolution Appendix, and the Schedules), as may be amended or supplemented from time to time in accordance with its terms. "ARBITRATION RULES": The Rules for Commercial Arbitration of the American Arbitration Association in effect at the time of an arbitration in accordance with the Dispute Resolution Procedure. "BACK OFFICE SERVICES": The Services described on Schedule 1 to this Agreement. "BREACH NOTICE": A Party's Notice to the other Party alleging a breach of the Agreement (other than TCB's nonpayment of any amount related to an invoice) by the other Party, which describes the alleged breach, to the extent known by the notifying Party, and any particular cure or correction requested by the notifying Party. "BUSINESS DAY": Any Monday through Friday, excluding the holidays observed by WWT. "CONFIDENTIAL INFORMATION": Information subject to a duty of confidence and a restriction on use imposed on one or both Parties under Article 10. "CONSENT": The prior written consent of a Party (in any capacity) in its sole discretion. "CONSULTING SERVICES": The Services described on Schedule 2 to this Agreement. "CONTROL": The right to exercise, directly or indirectly, more than 50% of the voting power attributable to the equity interests in an entity. ("CONTROLLING" and "CONTROLLED" have correlative meanings.) "DAMAGES": Losses, claims, obligations, demands, assessments, fines and penalties (whether civil or criminal), liabilities, expenses and costs (including reasonable fees and disbursements of legal counsel and accountants), bodily and other personal injuries, damage to tangible property, and other damages, of any kind or nature, actually suffered or incurred by a Person. "Damages": 1. consists only of actual damages; 24 25 2. excludes any lost profits, lost income, or lost savings and any punitive, exemplary, consequential, indirect, special, or incidental damages (however described), even if the possibility of those losses or damages was known; and 3. includes (except as may be reduced in accordance with the next sentence) all fines, penalties, and interest paid or payable to any Governmental Authority. If TCB has Damages, for which WWT is liable, consisting of fines, penalties, and interest paid or payable to a Governmental Authority corresponding to any tax not timely paid, then those "Damages" shall be reduced by an amount equal to interest, at the annual rate of 5%, accrued on that tax from the due date until that tax is paid; for the avoidance of doubt, in this situation "Damages" shall not include any tax for which TCB would otherwise be liable to the Governmental Authority. Also for the avoidance of doubt, the "Damages" of a Person shall include any lost profits, lost income, or lost savings and any punitive, exemplary, consequential, indirect, special, or incidental damages (however described) awarded against that Person in favor or another Person asserting a Third- Party Claim against that Person. "DEFICIENCY": WWT's failure in rendering a Service or Task to satisfy the applicable standard of care stated in the Agreement or to render it at the applicable Level established under the Agreement. ("DEFICIENT" has the correlative meaning). "DEFINITIONAL APPENDIX": This Definitional Appendix to GENERAL SERVICES AGREEMENT, containing definitions and interpretive matters for, as an integral part of, the Agreement. "DISPUTE": Any dispute, disagreement, claim, or controversy arising in connection with or relating to the Agreement, or the validity, interpretation, performance, breach, or termination of the Agreement, including any claim of breach of representation or warranty or of nonperformance and any claim regarding bodily or other personal injury damage to tangible property. "DISPUTE RESOLUTION APPENDIX": The Dispute Resolution Appendix to General Services Agreement, containing the Dispute Resolution Procedure for, as an integral party of, the Agreement. "DISPUTE RESOLUTION PROCEDURE": The procedure or process by which a Dispute shall be resolved in the Dispute Resolution Appendix. "EFFECTIVE DATE": October 1, 1999, the date on which the Agreement becomes effective. "EFFECTIVE DATE SERVICE SUBCONTRACT": A Service Subcontract in effect on the Effective Date. "EXPIRATION": The expiration of the term of the Agreement as stated in, and as may be renewed under, Article 2, without regard to any period of transition assistance. For the avoidance of doubt, "Expiration" does not include a termination of the Agreement under Section 13.1. ("EXPIRE" and "EXPIRED" have correlative meanings.) 25 26 "FIXED-PRICE SERVICE": A Service the Price for which is a fixed or nonvariable amount, other than a fixed rate. "GOVERNMENTAL AUTHORITY": Any federal, state, local, or foreign government or governmental, quasi-governmental, administrative, or regulatory authority, agency, body, or entity, including any court of other tribunal. "INDEMNIFICATION CLAIM": A claim or demand of a Party, on its behalf or on behalf of one or more of its Indemnified Agents, for Indemnification under Section 14.4. "INDEMNIFICATION CLAIM NOTICE": A Notice from the Indemnified Party describing an Indemnification Claim and the amount or the estimated amount of that Indemnification Claim to the extent then feasible (though that estimate shall not be determinative of the final amount of that Indemnification Claim). "INDEMNIFICATION RESPONSE PERIOD": The 30 days after an Indemnification Claim Notice is given during which the Indemnifying Party may investigate and determine its responsibility or liability for an Indemnification Claim and, if relating to a Third-Party Claim, Notify the Indemnified Party of the Indemnifying party's election to defend that Third-Party Claim. "INDEMNIFIED AGENTS": Collectively, the officers, directors, employees, and agents of a Party. "INDEMNIFIED PARTY": A Party entitled to or seeking indemnification, on its own behalf or on behalf of one or more of its Indemnified Agents, under Section 14.4. "INDEMNIFYING PARTY": A Party that has or is alleged to have an obligation to indemnify the other Party in response to an Indemnification Claim. "LEVEL": The scope, timelines, or quantity of a Service of Task or the location, intensity, or frequency at or with which a Service or Task is or is to be rendered. "NONCONFORMING SERVICE:" A Service or Task that, as agreed by the Parties or otherwise determined by the Dispute Resolution Procedure, was or is Deficient. "NONPAYMENT NOTICE": A Notice from WWT to TCB that describes an amount related to an invoice to TCB that WWT has not received when due, which shall: 1. constitute a demand for payment of the described amount; and 2. state that either termination of the Agreement or cessation of transition assistance, whichever is applicable, by WWT may result of the described amount is not paid by the tenth Business Day after that Notice is given. 26 27 "NOTICE": A written communication complying with Article 18. ("NOTIFY" has the correlative meaning.) "PARTIES": Collectively, WWT and TCB. ("PARTY" means either WWT or TCB.) "PERSON": An individual; a corporation, partnership, limited liability company, trust, association, or entity of any kind or nature; or a Governmental Authority. "PRICE": The amount or rate, in either case whether fixed or variable and however measured, charged to TCB for a Service, as agreed by the Parties. "PROCEEDINGS": Any action, suit, claim, investigation, demand, audit, or other proceedings by or before any Governmental Authority or any arbitration proceedings. "REASONABLE CONSENT": The prior written consent of a Party (in any capacity), which may not be unreasonably withheld or delayed. "REASONABLE EFFORTS": The efforts of a Party that are commercially reasonable under the circumstances, which do not require a Party to institute or prosecute any Proceedings or to pay any Person other than that Party's representatives or agents, including (only as to WWT) Subcontractors. "REPRESENTATIVES": Collectively, WWT's Representative and TCB's Representative. "SCHEDULE": A Schedule to the Agreement that describes a Service, the basis of the Price for that Service, any Subcontractor performing all or a portion of that Service, and the location or locations at which that Service is to be rendered if not at WWT's offices or Subcontracted. "SERVICE": An individual service, to be rendered by WWT under the Agreement, that is described as a "Service" in a Schedule. A Service may also be described in a Schedule by all or a portion of its constituent Tasks. "SERVICE SUBCONTRACT": An agreement or arrangement, oral or written, under which a Subcontractor is to render or perform any Service or Task on WWT's behalf or in WWT's stead. "SLA": A written agreement or understanding between WWT and TCB describing, or otherwise stating terms regarding, the Level at which a Service, in whole or in party, will be rendered. An SLA regarding a Service, in whole or in part, may be entered into by or directly with one or more of WWT's departments rendering that Service or that part of the Service. An SLA entered into on or after the Effective Date: 1. may be a separate document or part of another document, 2. may be a Schedule or part of a Schedule, and 27 28 3. shall be signed by WWT and TCB. "SUBCONTRACT": WWT's entering into a Service Subcontract. ("SUBCONTRACTED" and "SUBCONTRACTING" have correlative meanings). "SUBCONTRACT TERMINATION PENALTY": An obligation described in, as part of the terms of, a Service Subcontract to pay the Subcontractor a charge, fine, penalty, or other amount upon the termination or partial termination of that Service Subcontract, including any return to the Subcontractor of any equipment or goods held under that Service Subcontract. "SUBCONTRACTOR": A Person, other than an employee of WWT, who or which enters into a Service Subcontract with WWT. "TASK": Any one of the group of processes, procedures, or services that is described in a Schedule as constituting, or included in, a Service. "TCB": telcobuy.com LLC, a Delaware limited liability company. "TCB BUSINESS UNIT": A segment or part of TCB's business that TCB treats, for purposes of its business and not solely for the Agreement, as a separate unit. "TCB'S REPRESENTATIVE": The individual agent or representative designated by TCB to be TCB's formal liaison with or representative to WWT for matters relating to the Agreement, having the (non-exclusive) authority and responsibility described in the Agreement. "TERMINATION DATE": The date on which the Agreement is terminated in accordance with Section 13.1, without regard to any Transition Period. "THIRD-PARTY CLAIM": A claim of liability asserted against either Party by a Person other than the other Party or either Party's Indemnified Agents. "TRANSITION EXPENSES": The sum of the following, incurred in or resulting from WWT's compliance with requests for transition assistance for up to 180 days after Expiration or during the Transition period (as the case may be): 1. all of WWT's reasonable out-of-pocket expenses, and 2. the time or activities of WWT's personnel as follows: (a) if the activities of those personnel were part of a Use-based Service before Expiration or the termination of the Agreement, at the Price most recently paid for that Use-based Service before Expiration or termination, or (b) if the activities of those personnel were part of a Fixed-price Service before Expiration or the termination of the Agreement, an amount equal to that portion of the Price most recently paid for that Fixed-price Service before Expiration or termination corresponding to the 28 29 transition activities' portion of all activities that constituted that Fixed-price Service, for the time covered by that Price, before Expiration or termination. "TRANSITION PERIOD": The maximum 180-day period after the Termination Date or Expiration Date during which WWT shall, as TCB reasonably requests, render one or more Services in accordance with Section 13.3(a) or provide transition assistance in accordance with Sections 2.3 or 13.3(b). "USE-BASED SERVICE": A Service the Price for which is variable; or a Service the Price for which is a fixed rate, but the amount due for that Service is determined by or based upon, at least in part, the extent of the actual use of WWT's personnel or other assets. "WWT": World Wide Technology, Inc., a Missouri corporation. "WWT BUSINESS UNIT": A segment or part of WWT's business that WWT treats, for purposes of its business and not solely for the Agreement, as a separate unit. "WWT'S REPRESENTATIVE": The individual agent or representative designated by WWT to be WWT's formal liaison with or representative to TCB for matters relating to the Agreement, having the (non-exclusive) authority and responsibility described in the Agreement. B. INTERPRETATIVE MATTERS. The Agreement is the result of the Parties' negotiations, and no provision of the Agreement shall be construed for or against either Party because of the authorship of that provision. In the interpretation of the Agreement, except where the context otherwise requires: 1. "including" or "include" does not denote or apply any limitation; 2. "or" has the inclusive meaning "and/or"; 3. "$" refers to United States dollars; 4. the singular includes the plural, and vice versa, and each gender includes each of the others; 5. captions or headings are only for reference and are not to be considered in interpreting the Agreement; 6. "Article" and "Section" refer to an Article and Section, respectively, or the Agreement, unless otherwise stated in the Agreement; and 7. each reference to a time of day in the Agreement is to local time in St. Louis, Missouri, and "midnight" begins a day. 29 30 DISPUTE RESOLUTION APPENDIX TO GENERAL SERVICES AGREEMENT A. DEFINED TERMS. Various terms used in this Dispute Resolution Appendix, which begin with a capital letter, are defined in the Definitional Appendix to General Services Agreement. In addition, the following terms used only in this Dispute Resolution Appendix have the corresponding meanings: "COMPLEX DISPUTE LIST": The "Complex Dispute List," or if that list is not then maintained by the American Arbitration Association, another list of individuals having similar qualifications maintained by the American Arbitration Association. "INITIAL EXECUTIVE REVIEW COMMITTEE": A committee consisting of the Vice President and General Manager of WWT and the Chief Technology Officer of TCB. "SECOND EXECUTIVE REVIEW COMMITTEE": A committee consisting of the Chief Executive Officer of WWT and the Chief Financial Officer of TCB. "QUALIFICATIONS": Inclusion in the Complex Dispute List of having extensive knowledge or experience, or both, regarding services similar to the Service or Services that are the subject of the Dispute. The interpretative matters set forth in the Definitional Appendix also apply to this Dispute Resolution Appendix. B. DISPUTE RESOLUTION PROCEDURE. 1. GENERAL PROCEDURE. Except as otherwise stated in the Agreement, the Parties shall resolve all Disputes in accordance with this procedure: (a) Each Party shall instruct its Representative to promptly negotiate in good faith with the other Party's Representative to resolve the Dispute. (b) If the Representatives do not resolve the Dispute within ten Business Days (or such longer period as the Representatives may agree) after the date of referral of the Dispute to them, the Dispute shall be referred (by either or both of the Representatives) to the Initial Executive Review Committee for resolution. (c) If the Initial Executive Review Committee does not resolve the Dispute within ten Business Days (or such longer period as that Committee may agree) from the date of referral to it, the Dispute shall be referred (by that Committee or any of its members) to the Second Executive Review Committee for resolution. (d) If the Second Executive Review Committee does not resolve the Dispute within ten Business Days (or such longer period as that Committee may agree) after the 30 31 date of referral to it, either Party may submit the Dispute for resolution by the Parties' Presidents, who may submit the Dispute to non-binding mediation in accordance with Section B.2 of this Dispute Resolution Appendix. (e) If the Dispute is not resolved by the parties' Presidents (if submitted to them) and is not submitted to or resolved by mediation, then either Party may submit the Dispute to binding arbitration in accordance with Section B.3 of this Dispute Resolution Appendix. A referral under any of Sections B.1(a), B.1(b), and B.1(c) of this Dispute Resolution Appendix shall be made by written notice to the Persons designated in the applicable Section or Sections. That notice shall be in a form described in the Agreement or an electronic mail message and addressed to each Person at his office address or electronic mail address; each notice shall be given and effective as described in the Agreement or, in the case of electronic mail, upon actual receipt. The date of referral is the last date that notice is given to all of the Persons to whom the Dispute must have been referred. 2. MEDIATION. The mediation of an unresolved Dispute shall be conducted in this manner: (a) Either Party may submit the Dispute to mediation by giving notice of mediation to the other Party. The Parties shall attempt to agree upon and appoint a sole mediator who has the Qualifications promptly after that notice is given. (b) If the Parties are unable to agree upon a mediator within ten days after the date the Dispute is submitted to mediation, either Party may request the St. Louis office of the American Arbitration Association to appoint a mediator who has the Qualifications. The mediator so appointed shall be deemed to have the Qualifications and to be accepted by the Parties. (c) The mediation shall be conducted in the St. Louis metropolitan area at a place and a time agreed by the Parties with the mediator, or if the Parties cannot agree, as designated by the mediator. The mediation shall be held within 20 days after the mediator is appointed. (d) If either Party has substantial need for information from the other Party in order to prepare for the mediation, the Parties shall attempt to agree on procedures for the formal exchange of information; if the Parties cannot agree, the mediator's determination shall be effective. (e) Each Party shall be represented in the mediation by at least its Representative or another natural Person with authority to settle the Dispute on behalf of that Party and, if desired by that Party, by counsel for that Party. The parties' representatives in the mediation shall continue with the mediation as long as the mediator requests. 31 32 (f) Unless otherwise agreed by the parties, each Party shall pay one-half of the mediator's fees and expenses and shall bear all of its own expenses in connection with the mediation. Neither Party may employ or use the mediator as a witness, consultant, expert, or counsel regarding the Dispute or any related matters. 3. ARBITRATION. The arbitration of an unresolved Dispute shall be conducted in this manner: (a) Either Party may begin arbitration by filing a demand for arbitration in accordance with the Arbitration Rules. The Parties shall attempt to agree upon and appoint a panel of three arbitrators promptly after that demand is filed. Each of those arbitrators must have the Qualifications, and at least one of those arbitrators must be included in the Complex Dispute List (unless no list of that kind is then maintained). (b) If the parties are unable to agree upon any or all of the arbitrators within ten days after the demand for arbitration was filed (and do not agree to an extension of that ten-day period), either Party may request the St. Louis office of the American Arbitration Association to appoint the arbitrator or arbitrators, who have the Qualifications (and at least one of whom must be included in the Complex Dispute List, unless no list of that kind is then maintained), necessary to complete the panel in accordance with the Arbitration Rules. Each arbitrator so appointed shall be deemed to have the Qualifications and to be accepted by the Parties as part of the panel. (c) The arbitration shall be conducted in the St. Louis metropolitan area at a place and a time agreed by the Parties with the panel, or if the Parties cannot agree, as designated by the panel. The panel may, however, call and conduct hearings and meetings at such other places as the Parties may agree or as the panel may, on the motion of one Party, determine to be necessary to obtain significant testimony or evidence. (d) The Parties shall attempt to agree upon the scope and nature of any discovery for the arbitration. If the Parties do not agree, the panel may authorize any and all forms of discovery, including depositions, interrogatories, and document production, upon a showing of particularized need that the requested discovery is likely to lead to material evidence needed to resolve the Dispute and is not excessive in scope, timing, or cost. (e) The arbitration shall be subject to the Federal Arbitration Act and conducted in accordance with the Arbitration Rules to the extent they do not conflict with this Section B.3 of this Dispute Resolution Appendix. The Parties and the panel may, however, agree to vary the provisions of this Section B.3 of this Dispute Resolution Appendix or the matters otherwise governed by the Arbitration Rules. 32 33 (f) The panel has no power to: (i) rule upon or grant any extension, renewal, or continuance of the Agreement; (ii) award remedies or relief either expressly prohibited by the Agreement or under circumstances not permitted by the Agreement; or (iii) grant provisional or temporary injunctive relief before rendering the final decision or award. (g) Unless the Parties otherwise agree, all Disputes regarding or related to the same topic or event that are subject to arbitration at one time shall be consolidated in a single arbitration proceeding. (h) A Party or other Person involved in an arbitration under this Section B.3 may join in that arbitration any Person other than a Party if: (i) the Person to be joined agrees to resolve the particular dispute or controversy in accordance with this Section B.3 and the other provisions of this Dispute Resolution Appendix applicable to arbitration; and (ii) the panel determines, upon application of the Person seeking joinder, that the joinder of that other person will promote the efficiency, expedition, and consistency of the result of the arbitration and will not unfairly prejudice any other party to the arbitration. (i) The arbitration hearing shall be held within 30 days after the appointment of the panel. Upon request of either Party, the panel shall arrange for a transcribed record of the arbitration hearing, to be made available to both Parties. (j) The panel's final decision or award shall be made within 30 days after the hearing. That final decision or award shall be made by unanimous or majority vote or consent of the arbitrators constituting the panel, and shall be deemed issued at the place of arbitration. The panel shall issue a reasoned written final decision or award based on the Agreement and Missouri law; the panel may not act according to equity and conscience or as an amicable compounder or apply the law merchant. (k) The panel's final decision or award may include: (i) recovery of Damages to the extent permitted by the Agreement; or 33 34 (ii) injunctive relief in response to any actual or threatened breach of the Agreement or any other actual or threatened action or omission of a Party under or in connection with the Agreement. (l) The panel's final decision or award shall be final and binding upon the Parties, and judgment upon that decision or award may be entered in any court having jurisdiction over either or both of the Parties or their respective assets. The Parties specifically waive any right they may have to apply or appeal to any court for relief from the preceding sentence or from any decision of the panel made, or any question of law arising, before the final decision or award. If any decision by the panel is vacated for any reason, the Parties shall submit that Dispute to a new arbitration in accordance with this Section B.3. (m) Each Party shall pay one-half of the arbitrators' fees and expenses, and shall bear all of its own expenses in connection with the arbitration. The panel has the authority, however, to award recovery of all costs and fees (including attorneys' fees, administrative fees and the panel's fees and expenses) to the prevailing Party in the arbitration. 4. RECOURSE TO COURTS. Nothing in the Dispute Resolution Procedure limits the right of either Party to apply to a court or other tribunal having jurisdiction to: (a) enforce the Dispute Resolution Procedure, including the agreement to arbitrate in this Dispute Resolution Appendix; (b) seek provisional or temporary injunctive relief, in response to an actual or impending breach of Article 10 of the Agreement or otherwise so as to avoid irreparable damage or maintain the status quo, until a final arbitration decision or award is rendered or the Dispute is otherwise resolved; or (c) challenge or vacate any final arbitration decision or award that does not comport with Section B.3 of this Dispute Resolution Appendix. 5. SUBMISSION TO JURISDICTION. Each Party irrevocably submits to the jurisdiction of the federal courts of the United States and the state courts of Missouri located in St. Louis County, Missouri. Each Party waives any defense or challenge to that jurisdiction based on lack of personal jurisdiction, improper venue, or inconvenience of forum. 6. CONFIDENTIALITY. The proceedings of all negotiations, mediations, and arbitrations as part of the Dispute Resolution Procedure shall be privately conducted. The Parties shall keep confidential all conduct, negotiations, documents, decisions, and awards in connection with those proceedings under the Dispute Resolution Procedure. 34 35 SCHEDULE 1 IT, WEB HOSTING AND ADMINISTRATIVE BACK OFFICE SERVICES The Services contained in this schedule involve the following areas: 1. Information Technology and Web Hosting 2. Basic financial operations 3. Basic business operations 4. Basic facilities support 1. INFORMATION TECHNOLOGY AND WEB HOSTING. Information Technology and Web Hosting is defined as the basic support of TCB's technical and electronic infrastructure. TCB will independently maintain executive management and its own personnel who will be ultimately responsible for the functions. Where TCB deems it to be efficient and cost effective, TCB may outsource some of the basic functions consistent with the services provided to TCB by WWT, during the period in which TCB was a division of WWT. Information Technology and Web Hosting provides operational support and on-going maintenance of all information technology and telecommunications systems including: (i) Office automation (ii) PC desktops (iii) Telephones and switch (iv) Electronic mail (v) Internet and Web-based applications (vi) Business applications support This support is accomplished through a centralized help desk. End-users, or clients, may request support via telephone, email or web-based form entry. Requests are tracked and actively monitored via a web based action request system. The Services described included in this Section 1 are intended to include only the basic services, and not the Consulting Services described in Schedule 2. Where WWT determines that Consulting Services are required, such Services shall be provided in accordance with the Agreement's terms and conditions for Consulting Services, including without limitation Article 3 and Section 7.4 of the Agreement. 2. BASIC FINANCIAL OPERATIONS. Basic Financial Operations is defined as all of the functions necessary to generate materially accurate financial statements on a timely basis. TCB will independently maintain executive management and its own personnel who will be ultimately responsible for the functions. Where TCB deems it to be efficient and cost effective, TCB may outsource some of the basic functions consistent with the services provided to TCB by WWT during the period in which TCB was a division of WWT. The performance of these functions by WWT does not relieve the management of TCB from its responsibilities with respect to reports 35 36 and filings required under the applicable securities laws. The Tasks may include but are not limited to the following: (a) Financial Statement Generation (i) Monthly, Quarterly and annually (ii) Budgets vs. Actuals (iii) Various other financial analysis (b) Accounts Receivable (i) Generating invoices (ii) Processing credit applications and making credit decisions (iii) Collections (iv) Cash Receipts (v) Other related A/R functions (c) Accounts Payable (i) Entering and processing vendor invoices (ii) Expense report processing and coordination with A/P (iii) Check Processing (iv) Operational invoice processing (v) Accrued Liabilities (vi) Other related A/P functions (d) Payroll (i) Coordination of outsource to ADP for normal payroll processing (ii) Timekeeping, vacation tracking, etc. (iii) Year end processing of W-2's (iv) Sales representative commission reporting (v) Payroll tax coordination (vi) Other related payroll functions (e) Treasury Function/Cash Management (i) Coordination and support of bank financing (ii) Cash management services (iii) Cash flow reporting (iv) Bank reporting (v) Forecasting (f) Inventory (i) Cost analysis (ii) Cycle counting (iii) Inventory control and segregation (iv) Variance reporting and resolution (g) Project Accounting 36 37 (i) Project revenue/costing reports and analysis (ii) Time tracking to task and sub task level (iii) Project set up and accounting (h) Tax Administration (i) Federal, State and local tax compliance (ii) Reporting and coordination of the outsource on above (iii) Income tax account analysis (iv) Sales and Use tax analysis and compliance (v) Tax payment processing (vi) Property and other general corporate taxation issues (vii) Other related tax functions as necessary (i) General Corporate Accounting/Issues (i) Insurance planning and coordination (ii) Fixed asset accounting (iii) Other corporate accounting issues 3. BASIC BUSINESS OPERATIONS. Basic Business Operations is defined as the post-sale related functions necessary to deliver products to WWT's customers, assuring both customer satisfaction and maximum profitability for TCB. TCB will independently maintain executive management and its own personnel who will be ultimately responsible for the functions. Where TCB deems it to be efficient and cost effective, TCB may outsource some of the basic functions consistent with the services provided to TCB by WWT, during the period in which TCB was a division of WWT. The Tasks may include but are not limited to the following: (a) Vendor Management (i) Volume agreements--managing contractual renewal dates, maintaining and managing volume discount levels (ii) Reporting - understanding contractual reporting requirements (iii) Process development - EDI, Internet, Expediting process, etc. (iv) Quality/ ISO Nonconformance Corrective Action Requests (b) Contract Administration (i) Managing a long term contract, with responsibility for customer satisfaction and vendor relationship throughout life of contract (ii) Coordinating customer requirements, with shipping needs, delivery schedules, vendor requirements and product availability (iii) Negotiating and analyzing profitability, reporting needs (iv) Initiating shipping and invoicing (v) Generating quotes and configurations (c) Procurement (i) Vendor selection criteria and ISO approved supplier list 37 38 (ii) Negotiation - daily purchases as well as long term contractual commitments Delivery (iii) Scheduling - assuring the ability to meet customer required delivery (iv) Process Analysis-- Integration of vendor's information systems/processes into WWT ERP where efficiencies can be achieved (d) Customer Service (i) Returns/credits (ii) Proof of delivery (iii) Invoicing information (iv) General WWT information (v) Order status - Internet and telephone response (v) Telemarketing (v9) Communication and coordination with sales team and customer base (e) Ship Requests (i) Coordination of availability and product integration (ii) Coordination of carriers (iii) Pick/pack slip requirements (iv) Coordination with customers on acceptance of incoming shipments (f) Inventory Management (i) Vendor relations (ii) Forecasting - supply, demand, lead time (iii) Stock rotation (iv) Sales analysis (v) Facility analysis - accommodation of inventory, racking, etc. 4. BASIC FACILITIES SUPPORT. Basic Facilities Support is defined as the basic support and all of the associated functions necessary to provide a technically advanced business environment for TCB. TCB will independently maintain executive management and its own personnel who will be ultimately responsible for the functions. Where TCB deems it to be efficient and cost effective, TCB may outsource some of the basic functions consistent with the services provided to TCB by WWT, during the period in which TCB was a division of WWT. The Tasks may include but are not limited to the following: (a) Strategic Site Planning (i) Current condition assessment (ii) Facilities requirements outlook (iii) Buy/build /lease alternatives (iv) Capital and financial budget (b) Site Plan Implementation (i) Property negotiations (buy/lease) (ii) Space programming 38 39 (iii) Infrastructure requirements (voice/data) (iv) Project management (c) Site Completion (i) Final design (ii) Request for proposals (iii) Project management (iv) Facilities operational procedures (inventory management, shipping, receiving, inspection etc.) (v) Operational contracts (maintenance, landscape, environmental etc.) (vi) Maintain/renegotiate lease agreements (d) Warehousing (i) Shipping (ii) Receiving (iii) Pick/pack activity (iv) Inventory management via ERP interactive bar coding system (v) Negotiate/maintain carrier contracts (v) Procure/maintain related equipment (forklifts, cable spoolers, banding equip, rder pickers, shrink-rap equip. associated vehicles, etc.) (e) Quality Systems (i) Oversee all quality control initiatives (ii) Assist in the development and improvement of all quality related processes and procedures (iii) Maintain ISO 9002 certification (iv) Attain TL9000 certification 39 40 SCHEDULE 2 CONSULTING SERVICES Consulting Services consist of: 1. Business Application Consulting, 2. System Network Services, and 3. Internet Business Solutions and Software Development. 1. BUSINESS APPLICATION CONSULTING. WWT's Business Applications Consulting ("BAC") Group provides the following services to clients in the telecommunications, distribution and manufacturing industries. It is expected that the BAC team will provide these services for TCB for the initial implementation of the company's application set, as well as for ongoing enhancements and backup support: (a) ENTERPRISE PROJECT MANAGEMENT AND METHODOLOGY: WWT's propriety Ventana methodology was developed specifically for the efficient, comprehensive implementation of packaged applications solutions across the enterprise. This methodology has proven to be successful for a variety of clients, including WWT's inaugural implementation of Oracle Applications in March 1998. BAC offers this approach together with the experience of WWT's individual Project Managers to lead complex projects to completion. (b) BUSINESS PROCESS ANALYSIS & DESIGN: BAC consultants serve as the "bridge" between the core needs of the business and the corresponding optimal process design and software configuration. This service includes facilitation of requirements gathering and design sessions. (c) APPLICATION SOFTWARE CONFIGURATION: The experience of the BAC team with a variety of enterprise software applications, including Oracle applications, is critical to rapidly transform business requirements and process designs into functional software. WWT's strategy of business and technology "alignment" results in effective solutions, deployed rapidly. (d) TECHNICAL DEVELOPMENT: Packaged software, by its nature, cannot meet the needs of every client. In virtually every client situation, BAC meets WWT's clients' needs to develop interfaces to outside systems, data conversion routines, and custom extensions to the base package. (e) SYSTEM ADMINISTRATION: The BAC team provides system administration services for "light duty" technical needs including software installation and troubleshooting. For "heavy duty" needs, the BAC team calls upon WWT's Internet Core Technology and Systems and Network Services practices. (f) SOFTWARE ANALYSIS AND SELECTION: Members of the BAC team research and implement new business software applications in order to analyze a client's situation and recommend the most appropriate strategy and solution to meet its needs. 40 41 2. SYSTEM NETWORK SERVICES: WWT's Systems and Network Services ("SNS") focuses on providing customers with services relating the "Digital Foundation", that is, all computer-related communications. This Digital Foundation consists of LAN's, WAN's, Internet connectivity, remote access/dial-up connectivity and all of the components that make this connectivity work properly. SNS is made up of team of professionals who deliver consulting services to WWT's customers. These professionals have the experience, training and certifications to provide value to WWT's customers. Some of the most key vendor solutions that our team works with include Cisco Systems, Sun, Microsoft, Novell, Network Associates and many others. The professional services address each area of the Digital Foundation from a company's entire Digital Foundation to specific solutions for a particular area. SNS provides proven methods and experienced people to provide the right solution for each customer. SNS comprehensive service offerings include: o Total Cost of Network Ownership Study; o Digital Foundation Review and Assessment; o LAN / WAN design, implementation and support services; o Network Operating Systems (NT, NetWare, Sun Solaris); o design, implementation and support services; o Messaging Solutions (Microsoft Exchange, Lotus Notes, Sun SIMS, etc.); o Remote Dial-in / out solutions (a.k.a. remote access); o Network Security Solutions; and o Capacity Planning Recommendations. 3. INTERNET BUSINESS SOLUTIONS AND SOFTWARE DEVELOPMENT: Software Development group provides software consulting services to design, develop and implement software applications and complete turn-key systems. Application development projects include: o Creating Interfaces to existing applications; o Customizing and extending off-the-shelf applications to meet enhanced user requirements; and o Developing custom applications based on component modules that may have already been developed or provided by 3rd party ISVs or software manufacturers. The Software Development group specializes in key technology areas that, while complex and rapidly changing, are the key areas for a business's current operations and future business growth. These key technology areas are; E-Business Solutions, Oracle Core Technology, and Information Technology Professional Services. The specific products and services provided in these key technology areas include E-Business Solutions, Web Applications, Livelink, Custom WWT Java Servelets, and Web Development. 41 EX-10.2 3 LICENSING AGREEMENT 1 EX.10.2 LICENSING AGREEMENT This LICENSING AGREEMENT is dated January 21, 2000 and made effective as of October 1, 1999, between World Wide Technology, Inc., a Missouri corporation ("WWT"), and telcobuy.com LLC, a Delaware limited liability company ("TCB", each of WWT and TCB being a "PARTY" and together the "PARTIES"). RECITALS A. TCB has been a division of WWT and is now a separate, majority-owned subsidiary of WWT. TCB provides an Internet source of material and information to telecommunications companies through the use of software and related technology licensed to or developed by WWT, and combined by WWT into the Global Portal Platform. B. Because WWT's ownership of TCB may be reduced, the Parties wish to state formally the terms on which the Global Portal Platform will continue to be provided to TCB. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties agree as follows: ARTICLE 1. DEFINITIONS AND INTERPRETATION Various terms used in this Agreement are defined in the Definitional Appendix; the defined terms used in this Agreement begin with a capital letter. Various interpretative matters for this Agreement are also set forth in the Definitional Appendix. The Definitional Appendix is an integral part of this Agreement. ARTICLE 2. TERM This Agreement commences on the Effective Date and will continue in effect unless terminated by the agreement of the Parties or in accordance with Article 13. ARTICLE 3. GRANT OF LICENSE 3.1. GRANT OF LICENSE. Subject to the terms and limitations of this Agreement and the payment of the License Fee, WWT hereby grants to TCB, and TCB hereby accepts from WWT, a non-exclusive, world-wide, perpetual license to use, modify, develop applications for, market, distribute and sublicense the Global Portal Platform and the WWT Background Technology. 3.2. REPRESENTATION AND WARRANTY. WWT represents and warrants that the license granted to TCB under Section 3.1 includes the rights to all software and other technology that are required for TCB to use the Global Portal Platform in the same manner and to the same extent as used by WWT and TCB prior to the Effective Date, including without limitation *Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 the WWT Background Technology and, subject to Section 6.5, all third-party software products incorporated or integrated with or used in connection with the Global Portal Platform or provided by WWT as part of the Global Portal Platform. ARTICLE 4. LICENSE FEE In consideration of the license granted herein, TCB agrees to pay WWT the License Fee not later than the first to occur of (i) September 30, 2001, or (ii) 10 days after the closing of any public offering of equity interests in TCB or its successors, or (iii) 10 days after the closing of the sale or other transfer of the beneficial ownership of any equity interests in TCB or its successor if immediately after such sale or transfer persons who held the beneficial ownership of 100% of the combined voting power all of the equity interests in TCB immediately prior to such sale or transfer do not, immediately thereafter, own more than 50% of the combined voting power of all equity interests in TCB. ARTICLE 5. ENHANCEMENTS 5.1. INCORPORATION OF ENHANCEMENTS. So long as the Global Portal Platform used by TCB is resident on the hardware maintained at the facilities of WWT, WWT shall have the right to incorporate any and all Enhancements to the Global Portal Platform made by WWT as part of the Global Portal Platform, without the payment of additional amounts to or by TCB, whether or not such Enhancements were made as the result of Consulting Services provided by WWT to TCB under the Management Services Agreement. Such Enhancements shall be subject to the provisions of this Agreement, including without limitation the confidentiality provisions and the provisions regarding the sole and exclusive ownership thereof by WWT. 5.2. WWT RIGHT TO LICENSE ENHANCEMENTS. In the event that TCB requests that WWT make Enhancements to the Global Portal Platform, WWT and TCB shall mutually agree upon the terms upon which WWT shall perform such services, and TCB shall have the right to incorporate such Enhancements in the Global Portal Platform and to license or sub-license such Enhancements to third parties, consistent with the terms of this Agreement. ARTICLE 6. TRANSFER TO TCB FACILITIES 6.1. INSTALLATION AT TCB FACILITIES. The Global Portal Platform shall initially be resident and operated on hardware installed and maintained at the facilities of WWT. On not less than 90 days advance written Notice to WWT, TCB may elect to install a copy of the Global Portal Platform to hardware installed and maintained at the facilities of TCB. 6.2. DELIVERY OF SOURCE CODE. At the time of such installation of the Global Portal Platform at the facilities of TCB, WWT shall provide TCB with a copy of the source code for the portions of the Global Portal Platform for which WWT has the legal right to do so (the "WWT SOURCE CODE"). The use of the WWT Source Code by TCB shall be subject to the limitations set forth in Article 7 of this Agreement. WWT and TCB shall jointly 2 3 select an escrow agent (the "ESCROW AGENT") and shall enter into a source code escrow agreement with such Escrow Agent on terms mutually agreeable to the parties thereto (the "ESCROW AGREEMENT"). WWT shall place one copy of the WWT Source Code in escrow with the Escrow Agent, to be held by such Escrow Agent pursuant to the terms of the Escrow Agreement. The Escrow Agreement shall provide, among other things, for release of the WWT Source Code to TCB upon the written Notice from TCB that WWT has failed to provide TCB with a copy of the WWT Source Code as required under this Agreement, or upon the occurrence of any of the Events of Default by WWT described in paragraphs (a), (b), (c) or (d) of Section 13 of this Agreement. WWT shall update the WWT Source Code held by the Escrow Agent from time to time as required to keep a current copy of the WWT Source Code on deposit with the Escrow Agent. The costs and expenses of establishing and maintaining the WWT Source Code escrow and of updating the WWT Source Code deposit shall be shared equally by WWT and TCB. 6.3. PROPRIETARY NOTICES. TCB shall not remove or alter any trademark, copyright, or other proprietary notice contained on or in the Global Portal Platform. WWT's copyright notice and other proprietary legends and labels affixed on the Global Portal Platform as delivered by WWT must also be affixed on and in all copies. The inclusion of a copyright notice on any software product or documentation shall not cause, or be construed to cause, it to be a published work. 6.4. TRAINING AND MAINTENANCE. Upon WWT's receipt of written Notice from TCB under Section 6.1, WWT agrees to negotiate with TCB in good faith to reach agreement on the terms and conditions under which WWT will provide: (a) such training as may be reasonably required for TCB to operate and maintain the Global Portal Platform at its own facilities, and (b) future maintenance and support of the Global Portal Platform resident at the facilities of TCB. 6.5. THIRD-PARTY LICENSES. TCB acknowledges and agrees that at the time of such installation of the Global Portal Platform at the facilities of TCB, TCB may be required to obtain its own licenses to third-party software products incorporated or integrated with or used in connection with the Global Portal Platform or provided by WWT as part of the Global Portal Platform, and that the procurement of such licenses shall be the sole responsibility and expense of TCB. ARTICLE 7. INTELLECTUAL PROPERTY RIGHTS 7.1. OWNERSHIP BY WWT. All of the Global Portal Platform and the media on which it may be delivered to TCB remain the sole and exclusive property and trade secret of WWT, except to the extent that the Global Portal Platform may contain or be derived from portions of materials provided by third party suppliers under license to WWT. Notwithstanding anything in this Agreement to the contrary, the parties acknowledge and agree that, except for such rights as are expressly granted to TCB hereunder and such rights of third parties described above, WWT has and shall have all right, title and interest, including all copyrights and property rights, in and to the Global Portal Platform, and all 3 4 Enhancements thereto, whether developed by or on behalf of WWT or TCB, and all Intellectual Property Rights related thereto and all economic benefits resulting therefrom. Nothing in this Agreement, nor any other act or omission of WWT, shall be construed as a grant, transfer, conveyance, assignment or concession by WWT, or the consent by WWT to any such grant, transfer, conveyance, assignment or concession, to TCB of any copyright, property right, ownership or other proprietary right in the Global Portal Platform, any Enhancements thereto developed by or on behalf of WWT or TCB, the Intellectual Property Rights related thereto, or the economic benefits resulting therefrom. 7.2. DERIVATIVE WORKS. Following the delivery of the source code to TCB pursuant to Section 6.2 hereof, TCB may create derivative works of the Global Portal Platform and will own all right, title and interest in and to such derivative works and the intellectual property rights thereto, and may use such derivative works to the same extent that TCB is entitled to use the Global Portal Platform. ARTICLE 8. RESTRICTIVE COVENANTS 8.1. COVENANT BY WWT. For so long as TCB has the right to use the Global Portal Platform under this Agreement, WWT agrees that it shall not, directly or indirectly, use, or authorize or allow others to use, the Global Portal Platform to provide products or services by any vendor or to any customer if such vendor or customer either (a) derives more than 25% of its revenue from the provision of telecommunications products or services, or (b) generates annual gross revenue from the provision of telecommunications products or services in excess of $100,000,000 for the immediately preceeding calendar year. 8.2. THIRD-PARTY OPPORTUNITIES. (a) TCB shall have the right, at any time and from time to time, to pursue opportunities to license the Global Portal Platform to any third party in any field of use (a "THIRD-PARTY OPPORTUNITY"). In the event that TCB is unable to conclude a definitive agreement within a reasonable time with respect to the Third-Party Opportunity, then TCB shall Notify WWT in writing, describing in reasonable detail such Third-Party Opportunity. Thereafter, WWT shall have the right to seek to obtain a definitive agreement with respect to the Third-Party Opportunity. (b) In the event that WWT becomes aware of any Third-Party Opportunity, WWT shall Notify TCB in writing of such Third-Party Opportunity, describing in reasonable detail such Third-Party Opportunity. WWT shall not pursue such Third-Party Opportunity unless TCB does not conclude a definitive agreement with respect to such Third-Party Opportunity within a reasonable time after having received Notice thereof from WWT. 4 5 ARTICLE 9. WARRANTY 9.1. WARRANTY OF PERFORMANCE. Provided that TCB supplies the hardware and ancillary software required and approved by WWT and obtains from WWT maintenance and support of the Global Portal Platform resident at the facilities of TCB, WWT warrants that, for the Warranty Period, the Global Portal Platform will be free from material reproducible programming errors and defects in workmanship and materials, and will substantially conform to WWT's user documentation, when maintained and operated in accordance with WWT's instructions. If material reproducible programming errors are discovered during the Warranty Period, WWT shall promptly remedy them at no additional expense to TCB. This warranty to TCB shall be null and void if TCB is in default under this Agreement or if the nonconformance is due to: (a) hardware failures due to defects, power problems, environmental problems or any cause other than the Global Portal Platform itself; (b) modification of the Global Portal Platform by any party other than WWT; or (c) misuse, errors or negligence of TCB, its employees or agents in operating the Global Portal Platform. 9.2. REIMBURSEMENT OF WWT EXPENSES. If WWT reasonably determines that the Global Portal Platform for which TCB's requested warranty service is not eligible for warranty service, TCB shall pay or reimburse WWT for all reasonable costs of investigating and responding to such request at WWT's then prevailing time and materials rates. 9.3. LIMITATIONS. THE WARRANTIES OF WWT CONTAINED IN THIS AGREEMENT ARE EXCLUSIVE. THEY ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT, OR ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR USAGE OF TRADE. WWT'S SOLE OBLIGATION AND TCB'S EXCLUSIVE REMEDY FOR ANY WARRANTY FAILURE IS THE CORRECTION OR REPLACEMENT, AT WWT'S OPTION, OF THE NONCONFORMING PORTION OF THE GLOBAL PORTAL PLATFORM. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, AND IRRESPECTIVE OF ANY FAULT OR NEGLIGENCE, WWT SHALL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES (INCLUDING WITHOUT LIMITATION DAMAGES FOR HARM TO BUSINESS, LOST REVENUES, LOST SALES, LOST SAVINGS, LOST PROFITS (ANTICIPATED OR ACTUAL), LOSS OF USE, DOWNTIME AND CLAIMS OF THIRD PARTIES), REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, WARRANTY, STRICT LIABILITY OR TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE OF ANY KIND, WHETHER ACTIVE OR PASSIVE), OR ANY OTHER LEGAL OR EQUITABLE THEORY, ALL WHETHER OR NOT WWT HAS BEEN APPRISED OR NOTIFIED THAT ANY SUCH DAMAGES OR LOSSES ARE POSSIBLE OR LIKELY, AND WHETHER OR NOT ANY PERMITTED REMEDY HAS FAILED ITS ESSENTIAL PURPOSE. 5 6 ARTICLE 10. CONFIDENTIAL INFORMATION 10.1. CONFIDENTIAL INFORMATION. Each Party shall keep confidential the following information which is "Confidential Information" whether acquired by it under or in connection with this Agreement or obtained in connection with the relationship of WWT and TCB or its predecessors regarding the Global Portal Platform before the Effective Date: (a) information relating to the other Party's business, financial condition or performance, or operations that the other Party treats as confidential or proprietary; (b) the terms and performance of, any breach under, or any Dispute regarding this Agreement; (c) the Parties' conduct, decisions, documents, and negotiations as part of, and the status of, any Dispute resolution proceedings under the Dispute Resolution Procedure; (d) any information, business plan, concept, idea, know-how, process, technique, program, design, formula, algorithm or work-in-process, any engineering, manufacturing, marketing, technical, financial, data, or sales information, or any information regarding suppliers, customers, employees, investors, or business operations, and any other information or materials, whether in written, or graphic, or any other form or that is disclosed orally, or electronically, or otherwise which is learned or disclosed in the course of discussions, studies, or other work undertaken between the parties; and (e) any other information, whether in a tangible medium or oral and whether proprietary to the other Party or not, that is marked or clearly identified by the other Party as confidential or proprietary. (f) Without limiting the generality of the foregoing, Confidential Information shall include all information and materials disclosed orally or in any other form, regarding WWT's software products or software product development, including, but not limited to, the configuration techniques, data classification techniques, user interface, applications programming interfaces, data modeling and management techniques, data structures, and other information of or relating to WWT's software products or derived from testing or other use thereof. Neither Party may use any of the other Party's Confidential Information other than as required to perform its obligations or exercise its rights and remedies, including as part of the resolution of any Dispute, under this Agreement. 6 7 10.2. EXCLUDED INFORMATION. A Party has no obligation under this Article 10 regarding any information, including information that would otherwise by Confidential Information, to the extent that the information: (a) is or becomes publicly available or available in the industry other than as a result of any breach of this Agreement or any other duty of that Party; (b) is or becomes available to that Party from a source that, to that Party's knowledge, is lawfully in possession of that information and is not subject to a duty of confidentiality, whether to the other Party or another Person, violated by that disclosure; or (c) is independently developed by employees of the receiving Party who did not have access to the disclosing Party's Confidential Information. 10.3. STANDARD OF CARE. Each Party shall use the same degree of care in maintaining the confidentiality and restricting the use of the other Party's Confidential Information as that Party uses with respect to its own proprietary or confidential information, and in no event less than reasonable care. 10.4. PERMITTED DISCLOSURES. A Party may disclose Confidential Information to its officers, directors, agents, or employees as necessary to give effect to this Agreement. Each Party shall inform each of these Persons to whom any Confidential Information is communicated of the obligations regarding that information under this Article 10 and impose on that Person the obligation to comply with this Article 10 regarding the Confidential Information. Each Party shall be responsible for any breach of that Party's obligations under this Article 10 by its officers, directors, agents, or employees. 10.5. REQUIRED DISCLOSURES. Each Party may disclose Confidential Information in response to a request for disclosure by a court or another Governmental Authority, including a subpoena, court order, or audit-related request by a taxing authority, if that Party: (a) promptly Notifies the other Party of the terms and the circumstances of that request; (b) consults with the other Party, and cooperates with the other Party's reasonable requests, to resist or narrow that request; (c) furnishes only information that, according to written advice (which need not be a legal opinion) of its legal counsel, that Party is legally compelled to disclose; and (d) uses its Reasonable Efforts to obtain an order or other reliable assurance that confidential treatment will be accorded the information disclosed. 7 8 A Party need not comply with these conditions to disclosure, however, to the extent that the request or order of the Governmental Authority in effect prohibits that compliance. A Party may also disclose Confidential Information without complying with these conditions to the extent that the Party is otherwise legally obligated to do so (for example, to comply with applicable securities laws), as confirmed by advice of competent and knowledgeable counsel. Further, a Party may also disclose Confidential Information, without complying with these conditions, in connection with a tax audit if the disclosure is to representatives of a taxing authority, or in connection with a tax contest if that Party uses its Reasonable Efforts to assure that confidential treatment will be accorded the information disclosed. 10.6. TITLE TO INFORMATION. The Confidential Information of a Party disclosed by it to the other Party under this Agreement shall remain the property of the disclosing Party; nothing in this Agreement grants or conveys to the other Party any ownership or other proprietary rights in any of that Confidential Information. 10.7. SURVIVAL; RETURN. The obligations under this Article 10 shall continue on and after Expiration or the termination of this Agreement. Upon request of the disclosing Party upon or after Expiration or the termination of this Agreement, the other Party shall return or, if requested by the disclosing Party, destroy the Confidential Information of the disclosing Party that it holds. The requested return or destruction shall include removal or deletion of Confidential Information from all data bases and magnetic media of the other Party. ARTICLE 11. PARTIES' RELATIONSHIP 11.1. INDEPENDENT. The Parties are independent; each has sole authority and control of the manner of, and is responsible for, its performance of this Agreement. This Agreement does not create or evidence a partnership or joint venture between the Parties. Neither Party may create or incur any liability or obligation for or on behalf of the other Party, except as described in this Agreement. This Agreement does not restrict WWT from providing or rendering any services or products, including services or products like the Global Portal Platform, to any other Person; nothing in this Agreement, however, gives WWT the right to provide or render any services or product in violation of any other agreement entered into by the Parties. 11.2. EMPLOYEES. Except as described in Section 14.4(b) or Section 14.4(c) or, for the purposes of this Agreement: (a) each Party is solely responsible for its own employees or agents, including the actions or omissions and the compensation of those employees and agents, and (b) neither Party has any authority with respect to any of the other Party's employees or agents. 8 9 11.3. AUTHORITY AND ENFORCEABILITY. Each Party warrants to the other Party that: (a) it has the requisite corporate authority to enter into and perform this Agreement; (b) its execution, delivery, and performance of this Agreement have been duly authorized by all requisite corporate action on its behalf; (c) this Agreement is enforceable against it; and (d) it has obtained all consents or approvals of Governmental Authorities and other Persons that are conditions to its entering this Agreement. 11.4. THIRD-PARTY LICENSES AND CONSENTS. Each Party shall be responsible for obtaining and maintaining any licenses, permits, consents, or approvals of Governmental Authorities and other Persons necessary or appropriate for it to perform its obligations under this Agreement. 11.5. FURTHER ASSURANCES. Each Party shall take such actions, upon request of the other Party and in addition to the actions specified in this Agreement, as may be necessary or reasonably appropriate to implement or give effect to this Agreement. ARTICLE 12. PARTIES' REPRESENTATIVES 12.1. REPRESENTATIVES' AUTHORITY. Each Party has authorized its Representative to conduct discussions and negotiations, make and communicate decisions, frame and pose questions or issues, and resolve Disputes on behalf of that Party relating to this Agreement. Though one Party's employees or agents other than its Representative may also take actions of the kinds described in the preceding sentence with the other Party's employees or agents other than its Representative, matters that require more formal discussions or negotiations between Parties shall be addressed through and by the Representatives. Each Party and its Representative are entitled to rely on the actions and decisions of the other Party's Representative relating to this Agreement. 12.2. DESIGNATION. WWT designates its Vice President and General Manager as WWT's Representative, and TCB designates its Chief Technology Officer as TCB's Representative, upon and after the Effective Date until changed by the designating Party. A Party may change its Representative by Notice to the other Party. A Party may rely on and deal with the Person who is designated as the other Party's Representative until any Notice of change is given by the other Party. ARTICLE 13. EVENTS OF DEFAULT 13.1. EVENTS OF DEFAULT. The following shall constitute "EVENTS OF DEFAULT" by a Party under this Agreement: 9 10 (a) such Party makes a general assignment of all or substantially all of its assets for the benefit of its creditors; (b) such Party applies for, consents to, or acquiesces in the appointment of a receiver, trustee, custodian, or liquidator for its business or all or substantially all of its assets; (c) such Party files, or consents to or acquiesces in, a petition seeking relief or reorganization under any bankruptcy or insolvency laws; or (d) a petition seeking relief or reorganization under any bankruptcy or insolvency laws is filed against such Party and is not dismissed within 90 days after it was filed; (e) such Party's material breach of this Agreement which continues uncured or uncorrected for 30 days after such Party's receives Notice of such breach from the other Party, but if the breaching Party (A) reasonably requires longer than 30 days to cure or correct, and (B) Notifies the non-breaching Party of the circumstances, then the cure period shall be extended for the reasonable time so required, so long as during that time the breaching Party diligently acts to effect that cure or correction. Unless otherwise agreed in writing by the Parties, no cure period extension shall exceed 90 days; and (f) failure by TCB to pay any amount due to WWT under this Agreement by the tenth Business Day after Notice of such nonpayment has been given to TCB by WWT. 13.2. CONSEQUENCES OF AN EVENT OF DEFAULT. (a) Notwithstanding the occurrence of an Event of Default hereunder or other breach by TCB of any legal duty or obligation imposed by any contract (including this Agreement), by the law of torts (including simple or gross negligence, strict liability or willful misconduct), or by federal or state laws, rules, regulations, orders, standards or ordinances, WWT shall have no right to revoke or terminate, through injunctive relief or otherwise, the license granted to TCB under Article 3, it being understood and agreed that each such breach shall be compensable, if at all, by a remedy at law. (b) Upon the occurrence of an Event of Default by WWT, TCB may elect to terminate this Agreement, upon Notice to WWT specifying the Termination Date. 13.3. CONSEQUENCES OF TERMINATION BY TCB. Upon termination of this Agreement by TCB under Section 13.2(b), then during the Transition Period WWT shall comply, at WWT's expense, with TCB's reasonable requests for assistance in TCB's obtaining another solution having functionality substantially equivalent to the functionality of the Global 10 11 Portal Platform in effect immediately preceding the Termination Date. Articles 8 and 17 shall apply in this situation as though this Agreement had not been terminated. If the records or other information provided by WWT are Confidential Information, Article 10 shall also apply as though this Agreement had not been terminated. 13.4. SURVIVAL OF RIGHTS AND OBLIGATIONS. No rights or obligations of either Party that expressly or by implication are to remain in effect in order to give effect to this Agreement shall be impaired by the termination of this Agreement, and those rights and obligations shall remain in effect. ARTICLE 14. LIABILITY AND REMEDIES 14.1. WARRANTIES. Each Party's warranties in this Agreement are made solely to and for the benefit of the other Party. No Person other than a Party may make a claim based on the other Party's warranties under this Agreement. 14.2. DEFICIENCIES. TCB shall promptly Notify WWT of any Deficiency in the Global Portal Platform. To the extent WWT agrees, or it is otherwise determined by the Dispute Resolution procedure, that any material portion of the Global Portal Platform was or is Nonconforming, WWT shall use its Reasonable Efforts promptly to cure or correct the Deficiency to the extent it may then be cured or corrected. 14.3. ACTUAL DAMAGES. Neither Party shall be liable under or relating in any manner to this Agreement for any losses or damages other than Damages, even if a Party has been advised of the possibility of losses or damages of that kind and regardless of the form of the Proceedings or the theory of liability, whether based on contract, warranty, tort (including negligence and strict liability), infringement, or misappropriation. 14.4. INDEMNITIES FOR CERTAIN BREACHES AND OTHER MATTERS. The following shall apply to any breach of, and certain other Damages relating to, this Agreement, other than a nonpayment by TCB of any amount relating to an invoice: (a) each Party shall indemnify the other Party against all Damages of the Indemnified Party, or any of its Indemnified Agents, resulting from or relating to: (i) any breach of this Agreement, including breach of any warranty in this Agreement, by the Indemnifying Party; (ii) any Proceedings relating to a breach of this Agreement by the Indemnifying Party; and (iii) the actions or omissions of the Indemnifying Party's employees or agents under or in connection with this Agreement. (b) TCB shall also indemnify WWT against all Damages of WWT or any of its Indemnified Agents resulting from or relating to any sales, use, or similar taxes 11 12 (however described) applicable to TCB's use of the Global Portal Platform, in whole or in part, that are assessed or levied against or paid by WWT. (d) The indemnification obligations in Sections 14.4(a) and 14.4(b) shall be extinguished to the extent that the Damages of the other Party, or any of its Indemnified Agents for whom or which the other Party is seeking indemnification, were caused by the gross negligence (including recklessness) or willful misconduct of the Person for whom or which indemnification is sought. THE ORDINARY NEGLIGENCE OF A PERSON OR THE JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF PERSONS SHALL NOT PRECLUDE THAT PERSON OR ANY OF THOSE PERSONS FROM RECEIVING THE BENEFITS OF INDEMNIFICATION UNDER THIS AGREEMENT. (e) If an Indemnification Claim is not based on a Third-Party Claim, the Indemnified Party shall give an Indemnification Claim Notice promptly after the event constituting the basis for the Indemnification Claim; its failure to do so, however, shall relieve the Indemnifying Party of its indemnification obligations only to the extent the Indemnifying Party is actually prejudiced by that failure. If the Indemnified Party gives an Indemnification Claim Notice regarding an Indemnification Claim not based on a Third-Party Claim, the Indemnifying Party shall Notify the Indemnified Party within the Indemnification Response Period whether the Indemnifying Party disputes all or any portion of the Indemnification Claim. If the Indemnifying Party does not give that dispute Notice or agrees to accept liability for all or a portion of the Indemnification Claim, the Indemnification Claim, or the agreed portion of that Indemnification Claim, shall be the Indemnifying Party's liability. Otherwise, the Indemnification Claim shall be deemed a Dispute to be resolved by the Dispute Resolution Procedure. (f) If an Indemnification Claim is based on a Third-party Claim: (i) The Indemnified Party shall give an Indemnification Claim Notice promptly after it receives the Third-Party Claim. (ii) The Indemnifying Party shall be entitled to defend the Third-Party Claim, with its chosen counsel and at its own expense, if (A) the Third-Party Claim seeks only monetary relief against the Indemnified Party, and (B) the Indemnifying Party elects to assume, and diligently conducts, that defense. The Indemnifying Party's election to defend shall be given by Notice to the Indemnified Party within the Indemnification Response Period. If the Indemnifying Party conducts the defense, the Indemnified Party may participate in that defense with its own counsel and at its own expense. 12 13 (iii) If the Indemnifying Party does not elect to defend the Third-Party Claim by Notice within the Indemnification Response Period, or if the Indemnifying Party does not diligently conduct the defense, the Indemnified Party shall be entitled, upon further Notice to the Indemnifying Party, to defend the Third-Party Claim on behalf of, and for the account and risk of, the Indemnifying Party (if it is determined that the Indemnifying Party has an indemnification obligation regarding that Indemnification Claim). In this circumstance, the Indemnifying Party may participate in the defense with its own counsel and at its own expense. (iv) If there is a conflict of interest that makes it inappropriate for the same counsel to represent the Indemnifying Party and the Indemnified Party in defending the Third-Party Claim, the Indemnifying Party shall pay for separate counsel for the Indemnified Party. (v) The Indemnifying Party defending a Third-Party Claim may compromise, settle, or resolve that Third-Party Claim without the Indemnified Party's consent if the compromise, settlement, or resolution involves only the payment of money by the Indemnifying Party (whether on its own behalf or behalf of the Indemnified Party) and the third-party claimant provides the Indemnified Party a release from all liability regarding the Third-Party Claim. Otherwise, the Indemnifying Party may not compromise, settle, or resolve the Third-Party Claim without the Indemnified Party's Reasonable Consent. (vi) The Indemnifying Party and the Indemnified Party shall cooperate with all reasonable requests of the other in defending any Third-Party Claim. 14.5. TIME FOR CLAIMS. A Party may make an Indemnification Claim: (a) not based on a Third-Party Claim, only within two years after the breach or other event constituting the basis for that Indemnification Claim occurred, even if not discovered until after that second anniversary, or (b) based on a Third-Party Claim, at any time. 14.6. OFFSET. A Party entitled to any payment due from the other Party under this Agreement may offset all or any portion of the amount of that payment against any payment that is due from it to the other Party under this Agreement. 14.7. EXCLUSIVE REMEDIES. Except for the warranty provisions of Article 9, the termination right stated in Article 13 and the relief described in Sections 15.4 and 17.2(b) and in the Dispute Resolution Procedure, the remedies described in this Article 14 are the exclusive rights and remedies of a Party regarding any breach of this Agreement or any other matter that may be the subject of an Indemnification Claim. 13 14 14.8. EQUITABLE RELIEF. Subject to the limitation set forth in Section 13.2(a), to the extent that monetary relief is not a sufficient remedy for any breach of this Agreement, or upon any breach or impending breach of Article 10, the non-breaching Party shall be entitled to injunctive relief as a remedy for that breach or impending breach by the other Party, in addition to any other remedies granted to the non-breaching Party in this Agreement. That injunctive relief shall be sought through arbitration in accordance with the Dispute Resolution Procedure, except as permitted by Section B.4(b) of the Dispute Resolution Appendix. 14.9. WAIVER OF REMEDIES. No forbearance, delay, or indulgence by either Party in enforcing this Agreement, within the applicable time limits stated in this Agreement, shall prejudice the rights or remedies of that Party. No waiver of a Party's rights or remedies regarding a particular breach of this Agreement constitutes a waiver of those rights or remedies, or any other rights or remedies, regarding any other or any subsequent breach of this Agreement. 14.10. SURVIVAL. The rights, remedies, and obligations under this Article 14 shall continue on and after Expiration or the termination of this Agreement. ARTICLE 15. FORCE MAJEURE 15.1. NO BREACH OR LIABILITY. No delay or failure of a Party to perform any of its obligations, other than payment obligations, under this Agreement due to causes beyond its reasonable control shall constitute a breach of this Agreement or render that Party liable for that delay or failure. Causes beyond a Party's reasonable control include: (a) events or circumstances that the Party, using its Reasonable Efforts, is unable to prevent or overcome; and (b) labor disputes, strikes, or other similar disturbances; acts of God; utilities or communications failures; acts of the public enemy; and riots, insurrections, sabotage, or vandalism. 15.2. NOTICE OF EXCUSABLE DELAY OR FAILURE. If a Party anticipates any excusable delay or failure under Section 15.1, it shall promptly Notify the other Party of the anticipated delay or failure, the anticipated effect of that delay or failure, and any actions that are being or are to be taken to alleviate or overcome the cause of the delay or failure. 15.3. EFFORTS TO OVERCOME. If a Party is claiming an excusable delay or failure under Section 15.1, it shall use its Reasonable Efforts to alleviate or overcome the cause of the delay or failure as soon as practicable. 15.4. EXTENDED DELAY OR FAILURE. If an excusable delay or failure continues for more than 10 consecutive days, the Party entitled to the benefit of the affected obligation may, at its own expense, perform itself or obtain from any other Person the obligation to which that Party is entitled (and that Party shall Notify the other Party of this election). 14 15 ARTICLE 16. DISPUTE RESOLUTION MATTERS 16.1. GENERAL PROCEDURES. Except as otherwise stated in this Agreement, the Parties shall resolve all Disputes in accordance with the Dispute Resolution Procedure. Nevertheless, if any Person other than the Parties: (a) has initiated a lawsuit or other Proceedings against or involving either or both of the Parties in which a Dispute will be resolved, or (b) is a necessary participant in any Proceedings to resolve a Dispute and cannot be joined by either or both of the Parties in an arbitration of that Dispute under Section B.3 of the Dispute Resolution Appendix, so that (in either case) the Dispute Resolution Procedure is or will be ineffective, then the Parties need not use or follow the Dispute Resolution Procedure to resolve that Dispute, though the submission to jurisdiction in Section B.5 of the Dispute Resolution Appendix shall apply if necessary. 16.2. CONTINUED PERFORMANCE. The Parties shall continue performing their respective obligations under this Agreement while a Dispute is being resolved. 16.3. PARTIES' AGREEMENT. Nothing in this Article 16 or the Dispute Resolution Procedure prevents the Parties from resolving any Dispute by mutual agreement at any time. ARTICLE 17. EXPENSES AND TAXES 17.1. EXPENSES. Each Party shall be solely responsible for its costs and expenses incurred in performing its obligations and exercising its rights and remedies under this Agreement, except as otherwise provided in this Agreement. 17.2. TAXES. The Parties shall be responsible for tax payments or liabilities relating to this Agreement as follows: (a) Each Party shall be responsible for its income and franchise taxes and for all other taxes (however described) based on its own income or earnings. (b) TCB shall be responsible for all sales, use, and similar taxes (however described) applicable to the use by TCB of the Global Portal Platform, in whole or in part. This obligation includes TCB's paying the sales taxes identified in WWT's invoices submitted to TCB. (i) If TCB claims an exemption or exclusion from taxes of this kind, it shall deliver to WWT a certificate or letter stating TCB's good-faith belief that its use of the Global Portal Platform is not, in whole or in part, subject to those taxes. Whether or nor TCB delivers that certificate or letter, however, it shall indemnify WWT, in accordance with Section 14.4(c)(iv), 15 16 against any taxes of this kind assessed or levied against, or paid by, WWT and any other related Damages of WWT. (ii) If WWT receives an assessment from a taxing authority covering taxes for which TCB is responsible under this Section 17.2(b), WWT shall Notify TCB of the assessment and, at TCB's request, timely contest the assessment. If payment to the taxing authority is required by law as a condition to protest, TCB shall timely furnish WWT the required amount for that payment. (iii) If TCB believes it has overpaid taxes to WWT for any of its use of the Global Portal Platform(in whole or in part), TCB may require WWT to file a claim for a refund at TCB's expense. If permitted by law, WWT may assign any right to a refund directly to TCB instead of filing a refund claim. Any refund of taxes (including any interest) received by WWT under this Section 17.2(b)(iii) shall be promptly forwarded to TCB. (iv) Before WWT is required to pursue any action requested by TCB under this Section 17.2(b), WWT may at any time require TCB to deliver a letter of advice from outside counsel (selected by TCB) stating that TCB's tax position is reasonable. (v) Except as stated in the next sentence, any Dispute between the Parties regarding the application of any taxes of this kind to any use of the Global Portal Platform by TCB (in whole or in part) shall be resolved by the Dispute Resolution Procedure. Any Dispute as to the amount of tax (if any) owed to a taxing authority, including a Dispute between a Party and the taxing authority, need not be resolved by the Dispute Resolution Procedure, but may be resolved by any appropriate administrative or legal procedure available to a Party or the Parties under this Agreement apart from the Dispute Resolution Procedure. (c) Each Party shall be responsible for all real property, personal property, and other taxes (however described) based on its owned or leased property, whether real or personal. (d) Each Party shall be responsible for all employment-related taxes (however described) regarding its own employees. Each Party shall cooperate with any reasonable request of the other Party to take any reasonable action to avoid or minimize any duplicate taxes that might be imposed; the requesting Party shall bear in the expenses of the other Party's compliance. 16 17 ARTICLE 18. COMMUNICATIONS 18.1. FORM. Each Notice (including an Indemnification Claim Notice), request, response, demand, claim, and other communication required or permitted under this Agreement shall be in writing and shall be transmitted, delivered, or sent by: (a) personal delivery, (b) courier or messenger service, whether overnight or same-day, or (c) certified United States mail, with postage prepaid and return receipt requested, in each case addressed to the other Party at the address or number for that Party set forth in Section 18.2, or at such other address or number as the recipient has designated by Notice to the other Party in accordance with this Article 18. 18.2. ADDRESSES. The Parties shall transmit, deliver, or send communications as follows. (a) If to WWT: World Wide Technology, Inc. 127 Weldon Parkway St. Louis, Missouri 63043 Attention: Joe Koenig (b) If to TCB: telcobuy.com LLC 127 Weldon Parkway St. Louis, Missouri 63043 Attention: Bob Olwig, Tom Strunk and Jim Kavanaugh 18.3. EFFECTIVENESS. Each communication transmitted, delivered, or sent: in person, by courier or messenger service, or by certified United States mail, postage prepaid and return receipt requested, shall be deemed given, received, and effective on the date delivered to or refused by the intended recipient (with the return receipt or the equivalent record of the courier or messenger being deemed conclusive evidence of delivery or refusal) ARTICLE 19. ASSIGNMENT Neither Party may assign any of its rights or delegate any of its duties or obligations under this Agreement without the other Party's Consent; this prohibition of assignment and delegation shall include any assignment and delegation by operation of law (such as merger or consolidation). Any attempted assignment or delegation without the other Party's Consent shall be void and without effect. Notwithstanding the foregoing, a Party shall have the right, without the consent of the other Party, to assign this Agreement to a transferee of all or substantially all of the business of such Party to which this Agreement relates. ARTICLE 20. AMENDMENT AND WAIVER This Agreement may be amended or modified, and any provision of this Agreement may be discharged or waived, only by a document signed by the Party against which the amendment, modification, discharge, or waiver is sought to be enforced. 17 18 ARTICLE 21. INTEGRATION This Agreement constitutes the Parties' entire agreement on this subject; it replaces and supersedes any prior agreement or understanding of the Parties, whether written o oral, on this subject not expressed or referred to in this Agreement. ARTICLE 22. SEVERABILITY If any part of this Agreement is for any reason found to be unenforceable, all other parts of this Agreement nevertheless remain enforceable. ARTICLE 23. SUCCESSORS This Agreement binds and inures to the benefit of the Parties and their respective legal representatives, permitted successors, and permitted assigns. ARTICLE 24. GOVERNING LAW This Agreement shall be interpreted or construed under Missouri law. Likewise, the validity and performance of this Agreement shall be enforced, and all issues relating to this Agreement shall be resolved, under Missouri law. Each Party consents to the exclusive personal jurisdiction and venue of the courts, state and federal, located in St. Louis County, Missouri. ARTICLE 25. COUNTERPARTS This Agreement may be signed in any number of counterparts, with the same effect as if all signatories had signed the same document. All counterparts shall be construed together to constitute one, and the same, document. IN WITNESS WHEREOF, the Parties hereto have executed this Licensing Agreement effective as of the date first above written. WORLD WIDE TECHNOLOGY, INC. By /s/ David L. Steward ------------------------------------------ Name: David L. Steward ---------------------------------------- Title: Chief Executive Officer --------------------------------------- TELCOBUY.COM LLC By /s/ James P. Kavanaugh ------------------------------------------ Name: James P. Kavanaugh ---------------------------------------- Title: Chief Executive Officer --------------------------------------- 18 19 DEFINITIONAL APPENDIX TO LICENSING AGREEMENT A. DEFINED TERMS. In the Agreement, the following terms have the corresponding meanings: "AGREEMENT": This Licensing Agreement between WWT and TCB (including the Definitional Appendix, the Dispute Resolution Appendix, and the Schedules), as amended or supplemented from time to time in accordance with its terms. "ARBITRATION RULES": The Rules for Commercial Arbitration of the American Arbitration Association in effect at the time of an arbitration in accordance with the Dispute Resolution Procedure. "BUSINESS DAY": Any Monday through Friday, excluding the holidays observed by WWT. "CONFIDENTIAL INFORMATION": Information subject to a duty of confidence and a restriction on use imposed on one or both Parties under Article 10. "CONSENT": The prior written consent of a Party (in any capacity) in its sole discretion. "CONSULTING SERVICES": As defined in the Management Services Agreement. "DAMAGES": Losses, claims, obligations, demands, assessments, fines and penalties (whether civil or criminal), liabilities, expenses and costs (including reasonable fees and disbursements of legal counsel and accountants), bodily and other personal injuries, damage to tangible property, and other damages, of any kind or nature, actually suffered or incurred by a Person. "Damages": 1. consists only of actual damages; 2. excludes any lost profits, lost income, or lost savings and any punitive, exemplary, consequential, indirect, special, or incidental damages (however described), even if the possibility of those losses or damages was known; and 3. includes (except as may be reduced in accordance with the next sentence) all fines, penalties, and interest paid or payable to any Governmental Authority. If TCB has Damages, for which WWT is liable, consisting of fines, penalties, and interest paid or payable to a Governmental Authority corresponding to any tax not timely paid, then those "Damages" shall be reduced by an amount equal to interest, at the annual rate of 5%, accrued on that tax from the due date until that tax is paid; for the avoidance of doubt, in this situation "Damages" shall not include any tax for which TCB would otherwise be liable to the Governmental Authority. Also for the avoidance of doubt, the "Damages" of a Person shall not include any lost profits, lost income, or lost savings and any punitive, exemplary, consequential, indirect, special, or incidental damages (however described) awarded against that Person in favor or another Person asserting a Third- Party Claim against that Person. 19 20 "DEFICIENCY": The failure of the Global Portal Platform to satisfy the applicable warranty of performance stated in Article 9 of the Agreement. ("DEFICIENT" has the correlative meaning). "DEFINITIONAL APPENDIX": This Definitional Appendix to LICENSING AGREEMENT, containing definitions and interpretive matters for, as an integral part of, the Agreement. "DISPUTE": Any dispute, disagreement, claim, or controversy arising in connection with or relating to the Agreement, or the validity, interpretation, performance, breach, or termination of the Agreement, including any claim of breach of representation or warranty or of nonperformance and any claim regarding bodily or other personal injury damage to tangible property. "DISPUTE RESOLUTION APPENDIX": The Dispute Resolution Appendix to Licensing Agreement, containing the Dispute Resolution Procedure for, as an integral party of, the Agreement. "DISPUTE RESOLUTION PROCEDURE": The procedure or process by which a Dispute shall be resolved in the Dispute Resolution Appendix. "EFFECTIVE DATE": October 1, 1999, the date on which the Agreement becomes effective. "ESCROW AGENT": As defined in Section 6.2 of this Agreement. "ESCROW AGREEMENT": As defined in Section 6.2 of this Agreement. "EVENTS OF DEFAULT": As defined in Section 13.1 of this Agreement. "ENHANCEMENTS": Updates, upgrades, bug fixes, problem corrections, releases, modifications, enhancements and improvements to the Global Portal Platform made by WWT. "GLOBAL PORTAL PLATFORM": the software and related technology [*Confidential treatment will be requested], together with such Enhancements as are incorporated therein in accordance with the terms of this Agreement. "GOVERNMENTAL AUTHORITY": Any federal, state, local, or foreign government or governmental, quasi-governmental, administrative, or regulatory authority, agency, body, or entity, including any court of other tribunal. "INDEMNIFICATION CLAIM": A claim or demand of a Party, on its behalf or on behalf of one or more of its Indemnified Agents, for Indemnification under Section 14.4. "INDEMNIFICATION CLAIM NOTICE": A Notice from the Indemnified Party describing an Indemnification Claim and the amount or the estimated amount of that Indemnification Claim to the extent then feasible (though that estimate shall not be determinative of the final amount of that Indemnification Claim). 20 21 "INDEMNIFICATION RESPONSE PERIOD": The 30 days after an Indemnification Claim Notice is given during which the Indemnifying Party may investigate and determine its responsibility or liability for an Indemnification Claim and, if relating to a Third-Party Claim, Notify the Indemnified Party of the Indemnifying party's election to defend that Third-Party Claim. "INDEMNIFIED AGENTS": Collectively, the officers, directors, employees, and agents of a Party. "INDEMNIFIED PARTY": A Party entitled to or seeking indemnification, on its own behalf or on behalf of one or more of its Indemnified Agents, under Section 14.4. "INDEMNIFYING PARTY": A Party that has or is alleged to have an obligation to indemnify the other Party in response to an Indemnification Claim. "INTELLECTUAL PROPERTY RIGHTS": Any and all statutory, common law, treaty, convention and other non-statutory rights that protect, or are available to protect, the Global Portal Platform and all intellectual property embodied therein against unauthorized use or copying in the United State or other countries, including all rights to recover for damages and profits for past, present and future infringements thereof, and all rights under licenses, sub-licenses, assignments, agreements or similar arrangements to use any intellectual property of third parties. "LICENSE FEE": The amount of seventy-five thousand dollars ($75,000.00). "MANAGEMENT SERVICES AGREEMENT": The Management Services Agreement between WWT and TCB dated as of the Effective Date (including the Definitional Appendix, the Dispute Resolution Appendix, and the Schedules thereto), as amended or supplemented from time to time in accordance with its terms. "NONCONFORMING:" As agreed by the Parties or otherwise determined by the Dispute Resolution Procedure, that the Global Portal Platform was or is Deficient. "NOTICE": A written communication complying with Article 18. ("NOTIFY" has the correlative meaning.) "PARTIES": Collectively, WWT and TCB. ("PARTY" means either WWT or TCB.) "PERSON": An individual; a corporation, partnership, limited liability company, trust, association, or entity of any kind or nature; or a Governmental Authority. "PROCEEDINGS": Any action, suit, claim, investigation, demand, audit, or other proceedings by or before any Governmental Authority or any arbitration proceedings. "REASONABLE CONSENT": The prior written consent of a Party (in any capacity), which may not be unreasonably withheld or delayed. 21 22 "REASONABLE EFFORTS": The efforts of a Party that are commercially reasonable under the circumstances, which do not require a Party to institute or prosecute any Proceedings or to pay any Person other than that Party's representatives or agents. "REPRESENTATIVES": Collectively, WWT's Representative and TCB's Representative. [*Confidential treatment will be requested]. "TCB": telcobuy.com LLC, a Delaware limited liability company. "TCB'S REPRESENTATIVE": The individual agent or representative designated by TCB to be TCB's formal liaison with or representative to WWT for matters relating to the Agreement, having the (non-exclusive) authority and responsibility described in the Agreement. "TERMINATION DATE": The date on which the Agreement is terminated in accordance with the terms hereof, without regard to any Transition Period. "THIRD-PARTY CLAIM": A claim of liability asserted against either Party by a Person other than the other Party or either Party's Indemnified Agents. "TRANSITION PERIOD": The maximum 180-day period after the Termination Date during which WWT shall, as TCB reasonably requests, provide transition assistance in accordance with Section 13.3. "WARRANTY PERIOD": A period of 60 days following the completion of the installation of the Global Portal Platform at the facilities of TCB pursuant to Article 6. "WWT": World Wide Technology, Inc., a Missouri corporation. "WWT BACKGROUND TECHNOLOGY": means any and all business and technical information and know-how used by WWT in designing, developing, installing and operating the Global Portal Platform, including, without limitation, pre-existing development tools, routines, subroutines and other programs, data and materials included by WWT in the Global Portal Platform, all user manuals and technical information relating to the Global Portal Platform, including codes (object and source), program notes, drawings and reproducible copies of each of the foregoing, magnetic tapes and machine readable codes or other media reasonably necessary to generate the foregoing; as well as all requirements stored in any requirements database, test plans, test suites, any existing documentation detailing software configuration management processes and tools, existing documentation on customer support procedures and existing documentation on consulting procedures. "WWT'S REPRESENTATIVE": The individual agent or representative designated by WWT to be WWT's formal liaison with or representative to TCB for matters relating to the Agreement, having the (non-exclusive) authority and responsibility described in the Agreement. 22 23 "WWT SOURCE CODE": As defined in Section 6.2 of this Agreement. B. INTERPRETATIVE MATTERS. The Agreement is the result of the Parties' negotiations, and no provision of the Agreement shall be construed for or against either Party because of the authorship of that provision. In the interpretation of the Agreement, except where the context otherwise requires: 1. "including" or "include" does not denote or apply any limitation; 2. "or" has the inclusive meaning "and/or"; 3. "$" refers to United States dollars; 4. the singular includes the plural, and vice versa, and each gender includes each of the others; 5. captions or headings are only for reference and are not to be considered in interpreting the Agreement; 6. "Article" and "Section" refer to an Article and Section, respectively, or the Agreement, unless otherwise stated in the Agreement; and 7. each reference to a time of day in the Agreement is to local time in St. Louis, Missouri, and "midnight" begins a day. 23 24 DISPUTE RESOLUTION APPENDIX TO LICENSING AGREEMENT A. DEFINED TERMS. Various terms used in this Dispute Resolution Appendix, which begin with a capital letter, are defined in the Definitional Appendix to Licensing Agreement. In addition, the following terms used only in this Dispute Resolution Appendix have the corresponding meanings: "COMPLEX DISPUTE LIST": The "Complex Dispute List," or if that list is not then maintained by the American Arbitration Association, another list of individuals having similar qualifications maintained by the American Arbitration Association. "INITIAL EXECUTIVE REVIEW COMMITTEE": A committee consisting of the Vice President and General Manager of WWT and the Chief Technology Officer of TCB. "SECOND EXECUTIVE REVIEW COMMITTEE": A committee consisting of the Chief Executive Officer of WWT and the Chief Financial Officer of TCB. "QUALIFICATIONS": Inclusion in the Complex Dispute List of having extensive knowledge or experience, or both, regarding technology similar to the Global Portal Platform. The interpretative matters set forth in the Definitional Appendix also apply to this Dispute Resolution Appendix. B. DISPUTE RESOLUTION PROCEDURE. 1. GENERAL PROCEDURE. Except as otherwise stated in the Agreement, the Parties shall resolve all Disputes in accordance with this procedure: (a) Each Party shall instruct its Representative to promptly negotiate in good faith with the other Party's Representative to resolve the Dispute. (b) If the Representatives do not resolve the Dispute within ten Business Days (or such longer period as the Representatives may agree) after the date of referral of the Dispute to them, the Dispute shall be referred (by either or both of the Representatives) to the Initial Executive Review Committee for resolution. (c) If the Initial Executive Review Committee does not resolve the Dispute within ten Business Days (or such longer period as that Committee may agree) from the date of referral to it, the Dispute shall be referred (by that Committee or any of its members) to the Second Executive Review Committee for resolution. (d) If the Second Executive Review Committee does not resolve the Dispute within ten Business Days (or such longer period as that Committee may agree) after the date of referral to it, either Party may submit the Dispute for resolution by the 24 25 Parties' Presidents, who may submit the Dispute to non-binding mediation in accordance with Section B.2 of this Dispute Resolution Appendix. (e) If the Dispute is not resolved by the parties' Presidents (if submitted to them) and is not submitted to or resolved by mediation, then either Party may submit the Dispute to binding arbitration in accordance with Section B.3 of this Dispute Resolution Appendix. A referral under any of Sections B.1(a), B.1(b), and B.1(c) of this Dispute Resolution Appendix shall be made by written Notice to the Persons designated in the applicable Section or Sections. That Notice shall be in a form described in the Agreement or an electronic mail message and addressed to each Person at his office address or electronic mail address; each Notice shall be given and effective as described in the Agreement or, in the case of electronic mail, upon actual receipt. The date of referral is the last date that Notice is given to all of the Persons to whom the Dispute must have been referred. 2. MEDIATION. The mediation of an unresolved Dispute shall be conducted in this manner: (a) Either Party may submit the Dispute to mediation by giving Notice of mediation to the other Party. The Parties shall attempt to agree upon and appoint a sole mediator who has the Qualifications promptly after that Notice is given. (b) If the Parties are unable to agree upon a mediator within ten days after the date the Dispute is submitted to mediation, either Party may request the St. Louis office of the American Arbitration Association to appoint a mediator who has the Qualifications. The mediator so appointed shall be deemed to have the Qualifications and to be accepted by the Parties. (c) The mediation shall be conducted in the St. Louis metropolitan area at a place and a time agreed by the Parties with the mediator, or if the Parties cannot agree, as designated by the mediator. The mediation shall be held within 20 days after the mediator is appointed. (d) If either Party has substantial need for information from the other Party in order to prepare for the mediation, the Parties shall attempt to agree on procedures for the formal exchange of information; if the Parties cannot agree, the mediator's determination shall be effective. (e) Each Party shall be represented in the mediation by at least its Representative or another natural Person with authority to settle the Dispute on behalf of that Party and, if desired by that Party, by counsel for that Party. The parties' representatives in the mediation shall continue with the mediation as long as the mediator requests. 25 26 (f) Unless otherwise agreed by the parties, each Party shall pay one-half of the mediator's fees and expenses and shall bear all of its own expenses in connection with the mediation. Neither Party may employ or use the mediator as a witness, consultant, expert, or counsel regarding the Dispute or any related matters. 3. ARBITRATION. The arbitration of an unresolved Dispute shall be conducted in this manner: (a) Either Party may begin arbitration by filing a demand for arbitration in accordance with the Arbitration Rules. The Parties shall attempt to agree upon and appoint a panel of three arbitrators promptly after that demand is filed. Each of those arbitrators must have the Qualifications, and at least one of those arbitrators must be included in the Complex Dispute List (unless no list of that kind is then maintained). (b) If the parties are unable to agree upon any or all of the arbitrators within ten days after the demand for arbitration was filed (and do not agree to an extension of that ten-day period), either Party may request the St. Louis office of the American Arbitration Association to appoint the arbitrator or arbitrators, who have the Qualifications (and at least one of whom must be included in the Complex Dispute List, unless no list of that kind is then maintained), necessary to complete the panel in accordance with the Arbitration Rules. Each arbitrator so appointed shall be deemed to have the Qualifications and to be accepted by the Parties as part of the panel. (c) The arbitration shall be conducted in the St. Louis metropolitan area at a place and a time agreed by the Parties with the panel, or if the Parties cannot agree, as designated by the panel. The panel may, however, call and conduct hearings and meetings at such other places as the Parties may agree or as the panel may, on the motion of one Party, determine to be necessary to obtain significant testimony or evidence. (d) The Parties shall attempt to agree upon the scope and nature of any discovery for the arbitration. If the Parties do not agree, the panel may authorize any and all forms of discovery, including depositions, interrogatories, and document production, upon a showing of particularized need that the requested discovery is likely to lead to material evidence needed to resolve the Dispute and is not excessive in scope, timing, or cost. (e) The arbitration shall be subject to the Federal Arbitration Act and conducted in accordance with the Arbitration Rules to the extent they do not conflict with this Section B.3 of this Dispute Resolution Appendix. The Parties and the panel may, however, agree to vary the provisions of this Section B.3 of this Dispute Resolution Appendix or the matters otherwise governed by the Arbitration Rules. 26 27 (f) The panel has no power to: (i) rule upon or grant any extension, renewal, or continuance of the Agreement; (ii) award remedies or relief either expressly prohibited by the Agreement or under circumstances not permitted by the Agreement; or (iii) grant provisional or temporary injunctive relief before rendering the final decision or award. (g) Unless the Parties otherwise agree, all Disputes regarding or related to the same topic or event that are subject to arbitration at one time shall be consolidated in a single arbitration proceeding. (h) A Party or other Person involved in an arbitration under this Section B.3 may join in that arbitration any Person other than a Party if: (i) the Person to be joined agrees to resolve the particular dispute or controversy in accordance with this Section B.3 and the other provisions of this Dispute Resolution Appendix applicable to arbitration; and (ii) the panel determines, upon application of the Person seeking joinder, that the joinder of that other person will promote the efficiency, expedition, and consistency of the result of the arbitration and will not unfairly prejudice any other party to the arbitration. (i) The arbitration hearing shall be held within 30 days after the appointment of the panel. Upon request of either Party, the panel shall arrange for a transcribed record of the arbitration hearing, to be made available to both Parties. (j) The panel's final decision or award shall be made within 30 days after the hearing. That final decision or award shall be made by unanimous or majority vote or consent of the arbitrators constituting the panel, and shall be deemed issued at the place of arbitration. The panel shall issue a reasoned written final decision or award based on the Agreement and Missouri law; the panel may not act according to equity and conscience or as an amicable compounder or apply the law merchant. (k) The panel's final decision or award may include: (i) recovery of Damages to the extent permitted by the Agreement; or 27 28 (ii) injunctive relief in response to any actual or threatened breach of the Agreement or any other actual or threatened action or omission of a Party under or in connection with the Agreement. (l) The panel's final decision or award shall be final and binding upon the Parties, and judgment upon that decision or award may be entered in any court having jurisdiction over either or both of the Parties or their respective assets. The Parties specifically waive any right they may have to apply or appeal to any court for relief from the preceding sentence or from any decision of the panel made, or any question of law arising, before the final decision or award. If any decision by the panel is vacated for any reason, the Parties shall submit that Dispute to a new arbitration in accordance with this Section B.3. (m) Each Party shall pay one-half of the arbitrators' fees and expenses, and shall bear all of its own expenses in connection with the arbitration. The panel has the authority, however, to award recovery of all costs and fees (including attorneys' fees, administrative fees and the panel's fees and expenses) to the prevailing Party in the arbitration. 4. RECOURSE TO COURTS. Nothing in the Dispute Resolution Procedure limits the right of either Party to apply to a court or other tribunal having jurisdiction to: (a) enforce the Dispute Resolution Procedure, including the agreement to arbitrate in this Dispute Resolution Appendix; (b) seek provisional or temporary injunctive relief, in response to an actual or impending breach of Article 10 of the Agreement or otherwise so as to avoid irreparable damage or maintain the status quo, until a final arbitration decision or award is rendered or the Dispute is otherwise resolved; or (c) challenge or vacate any final arbitration decision or award that does not comport with Section B.3 of this Dispute Resolution Appendix. 5. SUBMISSION TO JURISDICTION. Each Party irrevocably submits to the jurisdiction of the federal courts of the United States and the state courts of Missouri located in St. Louis County, Missouri. Each Party waives any defense or challenge to that jurisdiction based on lack of personal jurisdiction, improper venue, or inconvenience of forum. 6. CONFIDENTIALITY. The proceedings of all negotiations, mediations, and arbitrations as part of the Dispute Resolution Procedure shall be privately conducted. The Parties shall keep confidential all conduct, negotiations, documents, decisions, and awards in connection with those proceedings under the Dispute Resolution Procedure. 28 29 *Confidential treatment requested 29 30 *Confidential treatment requested 30 31 *Confidential treatment requested 31 32 *Confidential treatment requested 32 33 *Confidential treatment requested 33 34 *Confidential treatment requested 34 35 *Confidential treatment requested 35 36 *Confidential treatment requested 36 37 *Confidential treatment requested 37 38 *Confidential treatment requested 38 EX-10.3 4 EMPLOYMENT AGREEMENT 1 EX. 10.3 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of the 21st day of January, 2000 by and between TELCOBUY.COM LLC (the "Company") having its principal office in St. Louis, Missouri, and JAMES KAVANAUGH, an individual ("Employee"). WHEREAS, Employee desires to be employed by the Company, and the Company desires to employ Employee, upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the compensation and other benefits of Employee's employment by the Company and the recitals, mutual covenants and agreements hereinafter set forth, Employee and the Company agree as follows: 1. Employment Services. (a) Employee is hereby employed by the Company, and Employee hereby accepts such employment, upon the terms and conditions hereinafter set forth. During the Employment Period (as defined below), Employee shall serve as Chief Executive Officer ("CEO") of the Company. (b) Employee agrees that, throughout the Employment Period, Employee shall have such authorities, duties and responsibilities as are customarily assigned to the CEO of an enterprise like the Company. Such duties, responsibilities, and authorities shall include, without limitation, but subject to the authority and directions of the Board of Managers of the Company, responsibility for the management, operation, strategic direction and overall conduct of the business of the Company. The Employee shall be assigned no duties or responsibilities that are materially inconsistent with, or that materially impair his ability to discharge, the foregoing duties and responsibilities. All other employees of the Company shall report directly or indirectly to the Employee and not directly to the Board of Managers or any member. The Employee may (i) with the consent of the Board of Managers (which shall not be unreasonably withheld), serve as a director or trustee of other for profit corporations or businesses which are not in substantial competition with the Company, (ii) continue to serve as an unpaid consultant and/or advisory director of World Wide Technology, Inc., (iii) serve on civic or charitable boards or committees, and (iv) manage personal investments; provided, however, that the Employee may not engage in any of the activities described in this Section 1(b) to the extent such activities materially interfere with the performance of Employee's duties and responsibilities to the Company. 2. Term of Employment. The term of this Employment Agreement (the "Employment Period") shall commence on January 21, 2000 (the "Effective Date"), shall end on December 31, 2002 (the "Initial Period"), and shall thereafter continue from year to year (each an "Annual Extension"), unless sooner terminated as provided in the second sentence of this Section 2 or in Section 4 hereof. Unless sooner terminated as provided in Section 4 hereof, the Employment Period may be terminated by either the Company or Employee, at the end of the Initial Period or an 2 Annual Extension, if a written notice of nonrenewal is delivered to the other party at least six (6) months prior to the end of such Initial Period or Annual Extension, as the case may be. 3. Compensation and Benefits. (a) Annual Base Salary. During the Employment Period, the Company shall pay Employee as compensation for his services an initial annual base salary of $160,000.00 per year. Employee's annual base salary rate shall be reviewed at least annually for increase (but in no event decrease) in the discretion of the Compensation Committee and approved by the Board of Managers, including at least one Investor Manager. The annual base salary shall be paid to Employee on the regular pay periods established by the Company. (b) Bonus. In addition to Employee's base compensation, Employee shall be eligible to earn a bonus upon achievement of such objectives as may be established from time to time by the Compensation Committee and approved by the Board of Managers, including at least one Investor Manager. It is the expectation that the Employee will be eligible to earn a bonus equal to his base salary upon achievement of such objectives, with greater bonus payments available if such objectives are exceeded. (c) Additional Equity Participation. In addition, Employee shall be entitled to participate in such equity incentive plan as may be approved from time to time by the Board of Managers, including at least one Investor Manager. (d) Diminished Opportunity Payment. In the event that, during the Employment Period, (A) the members or stockholders of the Company approve the liquidation, dissolution or winding up of the Company or any sale of all or substantially all of the assets of the Company (other than in connection with the conversion of the Company into a corporation), or (B) (i) a Change in Control as described in Article 11 of the Amended and Restated Operating Agreement (as in effect on the date hereof) shall occur or (ii) any "person," as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than any member of the Company on the date hereof, the Company, any subsidiary of the Company, or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company's then outstanding securities, and, in the case of either clause (A) or clause (B), the Employee shall be entitled to additional payments if and to the extent set forth in Section 4. (e) Life Insurance and other Benefits. The Company, at its sole cost and expense, shall during the term of this Agreement annually pay all of the premiums on Employee's $250,000 face value whole life insurance policy with Connecticut Mutual (Policy Number 6061155). Employee shall pay taxes on the portion of these premiums which are reported on Employee's Form W-2. Employee shall be the owner of said life insurance policy. Employee shall not reimburse the Company for any of said premiums which the Company has prepaid prior to the termination of Employee's employment hereunder. Employee, within his sole discretion, may designate the beneficiary or beneficiaries for said policy. The Company shall also be responsible to 2 3 make life insurance premium payments as required to maintain the current life insurance policy in full force and effect, which payments are currently $2410.00 per year, on behalf of Employee, pursuant to the terms of the existing split dollar agreement between Employee and World Wide Technology, Inc. Should additional insurance be requested by Employee, the payment of additional premiums by the Company must be approved by the Board of Managers. For so long as he is employed by the Company, the Company will pay for Employee's personal vehicle, which Employee can replace every three (3) years. The payments on the current vehicle are $566.01 per month (expiring in March of 2000). Employee shall also receive all other standard employee benefits made available to senior executives of the company. (f) Benefits. Employee shall be eligible for all of the Company's benefits, including participation in any pension or option plan(s), so long as Employee qualifies under the terms of the plan documents. Subsequent to termination of Employee's employment, Employee shall have the option to continue in the Company's benefit plans at his sole cost so long as Employee qualifies under the terms of the plan documents. (g) Expenses. The Company agrees to reimburse Employee for those reasonable expenses incurred by Employee as a result of Employee promoting the business of the Company, including expenses for entertainment, travel and similar items upon the presentation by Employee of any itemized account of such expenses in such detail as to meet IRS requirements for the deduction of such expenses and said expenses must be ordinary an necessary expenses of the Company paid or incurred in carrying on the Company's trade or business. 4. Termination of Employment. Prior to the expiration of the Employment Period, this Agreement and Employee's employment may be terminated as follows: (a) By the Company, if Employee engages in conduct which gives the Company cause to discharge him. "Cause" shall be defined as fraud, misrepresentation, theft, embezzlement, or intentional violation of law or the Company's policies or willful refusal to follow lawful directives of the Board of Managers, which violation or willful refusal is not remedied within ten (10) days after receipt of notice thereof from the Company. (b) Automatically, upon Employee's death or legal incapacity. (c) By the Company, upon the Employee's incapacity or inability to perform the services contemplated by this Agreement for a period of at least one hundred-eighty (180) days in any three hundred-sixty (360) day period because his physical or mental health shall have become so impaired as to make it impossible or impractical to perform the duties and responsibilities contemplated hereunder. (d) By the Company, if any of the events described in Section 3(d) hereof occur. (e) By Employee, if any of the events described in Section 3(d) hereof shall occur. 3 4 (f) By the Company, upon a majority vote of the Board of Managers. (g) By the Employee for "Good Reason." "Good Reason" shall be defined as only one or more of the following: (i) a material diminution of the Employee's responsibilities or authority which is not cured within ten (10) days after notice thereof from the Employee to the Company, (ii) a reduction in the compensation which the Employee is entitled to earn, or (iii) relocation of the Employee without his consent outside of the St. Louis, Missouri metropolitan area. 5. Effect of Termination of Employment. Upon termination of Employee's employment and this Agreement, the rights and obligations of the parties pursuant to Sections 7 through 14 and Sections 16, 17 and 18 shall be unaffected, but all other rights and obligations of the parties hereunder shall cease, except: (a) If the Agreement is terminated pursuant to Section 4(a), all of the Employee's rights to receive compensation and benefits under this Agreement shall terminate as of the date of such termination, except as otherwise mandated by law, and the Employer shall not be entitled to any bonus with respect to the year in which termination occurs. (b) If this agreement is terminated pursuant to Section 4(f) or 4(g), the Company shall continue to pay Employee (or his estate), his Annual Base Salary at the time of termination described in Section 3(a) of this Agreement for two (2) years, a prorata bonus under Section 3(b) for the period through the date of termination, and a bonus under Section 3(b) for the twelve month period following the termination (collectively, "Severance Pay"). The Severance Pay shall be paid to Employee (or his estate) on the regular pay periods established by the Company, but at least on a monthly basis, and shall be subject to withholding and other applicable taxes. Notwithstanding the terms of any option plan or any equity awards granted to Employee thereunder, all such options and equity awards outstanding immediately prior to such termination shall immediately become exercisable. If Employee has been found to have in any manner breached Section 7 of this Agreement, then the Company's duty to pay any Severance Pay to Employee under this Section 5(b) of this Agreement shall terminate from the date on which it is determined that said breach occurred and Employee shall immediately reimburse the Company for any Severance Pay payments made by the Company to Employee after the first date on which said breach occurred. (c) If this Agreement is terminated pursuant to Section 4(b) or 4(c), Employee (or his estate) shall receive his annual base salary for the remainder of the calendar year in which such termination occurs (according to the same payroll practices in effect at the time of termination) and benefits (as applicable) for the remainder of the year and six months of the following year. Notwithstanding the terms of any option plan or any equity awards granted to Employee thereunder, all such options and equity awards outstanding immediately prior to such termination shall immediately become exercisable. (d) If this Agreement is terminated pursuant to Section 4(d), Employee shall receive Severance Pay as provided in Section 5(a). Notwithstanding the terms of any option plan or equity award granted to Employee thereunder, all such options and equity awards outstanding immediately prior to such termination shall immediately become exercisable. 4 5 (e) If this Agreement is terminated pursuant to Section 4(e), all of the Employee's rights to receive compensation and benefits under this Agreement shall terminate as of the date of such termination, except that the Employee shall be entitled to receive a pro rata bonus through the date of termination and shall be entitled to receive benefits otherwise mandated by law; provided, however, that if the Employee continues to provide services under this Agreement for a period of at least six (6) months following the closing date of an event described in Section 3(d), and within six(6) months thereafter decides to terminate his employment, the Employee shall be entitled to receive Severance Pay. 6. Withholding. All compensation paid to Employee shall be subject to customary withholding taxes and other employment taxes as required with respect thereto. 7. Non-Competition and Non-Solicitation Agreement. Employee agrees that during his employment by the Company and for the period beginning on the date hereof and ending twenty-four (24) months following expiration or termination of employment for any reason, Employee will not, as an individual or as a partner, employee, agent, advisor, consultant or in any other capacity of, or, directly or indirectly, (i) carry on any business, or own greater than a 10% interest in any, Internet intensive business that uses the Global Portal Platform or a company that derives over 50% of its gross revenues or over one hundred million dollars ($100,000,000.00) from the sale of telecommunications infrastructure equipment over or through the use of the internet or the world wide web, anywhere in the United States (the "Territory"), or (ii) solicit or hire, or engage as a consultant or in any other capacity, any person who was an employee or officer of the Company at the time of termination of the Employee's employment, or at any time within six (6) months prior to such termination. Employee recognizes the broad territorial scope of the covenant above, but acknowledges and agrees that the restriction is reasonable and enforceable in view of, among other things, (1) the narrow range of activities prohibited, (2) the national market in which the Company and its affiliates operate, and (3) Employee's background, which is such that the restraint will not impose an undue hardship on Employee. Employee expressly agrees that the covenant set forth in this Section 7 is reasonable in light of the scope of the business heretofore conducted by the Company. If any court or tribunal of competent jurisdiction shall refuse to enforce the foregoing covenant because the time limit applicable thereto is deemed unreasonable, it is expressly understood and agreed that such covenant shall not be void, but that for the purpose of such proceedings and in such jurisdiction, such time limitation shall be deemed reduced to the extent necessary to permit enforcement of the covenant. If any court or tribunal of competent jurisdiction shall refuse to enforce the foregoing covenant because it is more extensive (whether as to geographic area, scope of business or otherwise) than is deemed reasonable, it is expressly understood and agreed between the parties hereto that such covenant shall not be void, but that for the purpose of such proceedings and in such jurisdiction, the restrictions contained herein (whether as to geographic area, scope of business or otherwise) shall be deemed reduced to the extent necessary to permit enforcement of the covenant. 5 6 Employee further acknowledges and agrees that the damages resulting from any breach of the foregoing covenant may be intangible in whole or in part and that the Company is entitled to seek specific enforcement, injunctive relief and other equitable remedies in addition to monetary damages, and Employee hereby stipulates to the entering of such injunctive relief prohibiting Employee from competing with the Company in breach of such covenant. 8. Non-Waiver of Rights. The failure of either party to enforce at any time any of the provisions of this Agreement or to require at any time performance by the other party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement, or any part hereof, or the right of either party thereafter to enforce each and every provision in accordance with the terms of this Agreement. 9. Severability and Interpretation. Whenever possible, each provision of this Agreement and any portion hereof shall be interpreted in such a manner as to be effective and valid under applicable law, rules and regulations. If any covenant or other provision of this Agreement (or portion thereof) shall be held to be invalid, illegal, or incapable of being enforced, by reason of any rule of law, rule, regulation, administrative order, judicial decision or public policy, all other conditions and provisions of this Agreement shall, nevertheless, remain in full force and effect, and no covenant or provision shall be deemed dependent upon any other covenant or provision (or portion) unless so expressed herein. The parties hereto desire and consent that the court or other body making such determination shall, to the extent necessary to avoid any unenforceability, so reform such covenant or other provision or portions of this Agreement to the minimum extent necessary so as to render the same enforceable in accordance with the intent herein expressed. 10. Entire Agreement. This Agreement represents the entire and integrated Employment Agreement between Employee and the Company and supersedes all prior negotiations, representations and agreements, either written or oral, with respect thereto. 11. Notice. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party, by registered or certified mail, return receipt requested, postage prepaid, or by overnight courier, addressed to such address as may have been furnished to the other party in writing. Notices and communications shall be effective at the time they are given in the foregoing manner (provided that notice by mail shall be deemed given three business days after posting). 12. Amendments and Waivers. No modification, amendment or waiver of any of the provisions of this Agreement shall be effective unless in writing specifically referring hereto, and signed by the parties hereto. 13. Assignments. This Agreement shall be binding upon, and shall inure to the benefit of the Parties heirs, administrators, executors, successors and assigns. 14. Arbitration. Except for disputes for which equitable relief is permitted under this Agreement, any controversy or claim arising out of or relating to this Agreement, the employment relationship or any breach thereof between the Company and Employee and any of their agents, employees and affiliated companies shall be settled by arbitration in accordance with 6 7 the rules of the America Arbitration Association and judgment upon the award may be entered in any court having jurisdiction. 15. Headings. Section headings are provided in this Agreement for convenience only and shall not be deemed to substantively alter the content of such sections. 16. Indemnification. To the fullest extent permitted by the indemnification provisions of the operating agreement of the Company in effect as of the date of this Agreement (collectively, the "Indemnification Provision"), and in each case subject to the conditions thereof, the Company shall (i) indemnify the Employee, as an officer or director of the Company if the Employee shall be serving in such capacity at the Company's written request, against all liabilities and reasonable expenses that may be incurred by the Employee in any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, because the Employee is or was an officer or director of the Company and (ii) pay for or reimburse the reasonable expenses incurred by the Employee in the defense of any proceeding to which the Employee is a party because the Employee is or was an officer or director of the Company. The rights of the Employee under the Indemnification Provision shall survive the termination of the employment of the Employee by the Company. 17. Non-Disclosure Agreement. Employee shall execute the non-disclosure agreement attached as Exhibit B. 18. Termination and Release. The Employee acknowledges that the Employment Agreement dated June 12, 1996, between the Employee and World Wide Technology, Inc. is terminated as of the date hereof, and that the Employee has no further rights thereunder. THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. /s/ James P. Kavanaugh ----------------------------------- JAMES P. KAVANAUGH TELCOBUY.COM LLC By: /s/ David L. Steward -------------------------------- Name: David L. Steward Title: Member of telcobuy.com LLC and Chief Executive Officer of World Wide Technology Inc., Majority Member of telcobuy.com LLC. 7 EX-10.4 5 EMPLOYMENT AGREEMENT 1 EX. 10.4 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of the 21st day of January, 2000 by and between TELCOBUY.COM LLC (the "Company") having its principal office in St. Louis, Missouri, and TOM STRUNK, an individual ("Employee"). WHEREAS, Employee desires to be employed by the Company, and the Company desires to employ Employee, upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the compensation and other benefits of Employee's employment by the Company and the recitals, mutual covenants and agreements hereinafter set forth, Employee and the Company agree as follows: 1. Employment Services. (a) Employee is hereby employed by the Company, and Employee hereby accepts such employment, upon the terms and conditions hereinafter set forth. During the Employment Period (as defined below), Employee shall serve as requested and in the discretion of the CEO. 2. Term of Employment. The term of this Employment Agreement (the "Employment Period") shall commence on January 21, 2000 (the "Effective Date"), shall end on January 21, 2001 (the "Initial Period"), and shall thereafter continue from year to year (each an "Annual Extension"), unless sooner terminated as provided in the second sentence of this Section 2 or in Section 4 hereof. Unless sooner terminated as provided in Section 4 hereof, the Employment Period may be terminated by either the Company or Employee, at the end of the Initial Period or an Annual Extension, if a written notice of nonrenewal is delivered to the other party at least six (6) months prior to the end of such Initial Period or Annual Extension, as the case may be. 3. Compensation and Benefits. (a) Annual Base Salary. During the Employment Period, the Company shall pay Employee as compensation for his services an initial annual base salary of $ $100,000 per year. Employee's annual base salary rate shall be reviewed at least annually for increase (but in no event decrease) in the discretion of the CEO. The annual base salary shall be paid to Employee on the regular pay periods established by the Company. (b) Bonus. In addition to Employee's base compensation, Employee shall be eligible to earn a bonus upon achievement of such objectives as may be established from time to time by the CEO. It is the expectation that the Employee will be eligible to earn a bonus equal to his base salary upon achievement of such objectives, with greater bonus payments available if such objectives are exceeded. 2 (c) Additional Equity Participation. In addition, Employee shall be entitled to participate in such equity incentive plan as may be approved from time to time by the Board of Managers. (d) Benefits. For so long as he is employed by the Company, the Company will pay for Employee's personal vehicle, which Employee can replace every three (3) years. The payments on the current vehicle are $565.00 per month. Employee shall also receive all other standard employee benefits made available to senior executives of the company. Employee shall be eligible for all of the Company's benefits, including participation in any pension or option plan(s), so long as Employee qualifies under the terms of the plan documents. Subsequent to termination of Employee's employment, Employee shall have the option to continue in the Company's benefit plans at his sole cost so long as Employee qualifies under the terms of the plan documents. (e) Expenses. The Company agrees to reimburse Employee for those reasonable expenses incurred by Employee as a result of Employee promoting the business of the Company, including expenses for entertainment, travel and similar items upon the presentation by Employee of any itemized account of such expenses in such detail as to meet IRS requirements for the deduction of such expenses and said expenses must be ordinary and necessary expenses of the Company paid or incurred in carrying on the Company's trade or business. 4. Termination of Employment. Prior to the expiration of the Employment Period, this Agreement and Employee's employment may be terminated as follows: (a) By the Company, if Employee engages in conduct which gives the Company cause to discharge him. "Cause" shall be defined as fraud, misrepresentation, theft, embezzlement, or intentional violation of law or the Company's policies or willful refusal to follow lawful directives of the CEO or the Board of Managers, which violation or willful refusal is not remedied within ten (10) days after receipt of notice thereof from the Company. (b) Automatically, upon Employee's death or legal incapacity. (c) By the Company, upon the Employee's incapacity or inability to perform the services contemplated by this Agreement for a period of at least one hundred-eighty (180) days in any three hundred-sixty (360) day period because his physical or mental health shall have become so impaired as to make it impossible or impractical to perform the duties and responsibilities contemplated hereunder. (d) By the Company, at the discretion of the CEO or upon a majority vote of the Board of Managers. 5. Effect of Termination of Employment. Upon termination of Employee's employment and this Agreement, the rights and obligations of the parties pursuant to Sections 7 through 14 and Sections 16 and 17 shall be unaffected, but all other rights and obligations of the parties hereunder shall cease, except: 2 3 (a) If the Agreement is terminated pursuant to Section 4(a), all of the Employee's rights to receive compensation and benefits under this Agreement shall terminate as of the date of such termination, except as otherwise mandated by law, and the Employee shall not be entitled to any bonus with respect to the year in which termination occurs. (b) If this agreement is terminated pursuant to Section 4(d), the Company shall continue to pay Employee (or his estate), his Annual Base Salary at the time of termination described in Section 3(a) of this Agreement for one (1) year, a pro rata bonus under Section 3(b) for the period through the date of termination, and a bonus under Section 3(b) for the twelve month period following the termination (collectively, "Severance Pay"). The Severance Pay shall be paid to Employee (or his estate) on the regular pay periods established by the Company, but at least on a monthly basis, and shall be subject to withholding and other applicable taxes. Notwithstanding the terms of any option plan or any equity awards granted to Employee thereunder, all such options and equity awards outstanding immediately prior to such termination shall immediately become exercisable. If Employee has been found to have in any manner breached Section 7 of this Agreement, then the Company's duty to pay any Severance Pay to Employee under this Section 5(b) of this Agreement shall terminate from the date on which it is determined that said breach occurred and Employee shall immediately reimburse the Company for any Severance Pay payments made by the Company to Employee after the first date on which said breach occurred. (c) If this Agreement is terminated pursuant to Section 4(b) or 4(c), Employee (or his estate) shall receive his annual base salary for the remainder of the calendar year in which such termination occurs (according to the same payroll practices in effect at the time of termination) and benefits (as applicable) for the remainder of the year and six months of the following year. Notwithstanding the terms of any option plan or any equity awards granted to Employee thereunder, all such options and equity awards outstanding immediately prior to such termination shall immediately become exercisable. 6. Withholding. All compensation paid to Employee shall be subject to customary withholding taxes and other employment taxes as required with respect thereto. 7. Non-Competition and Non-Solicitation Agreement. Employee agrees that during his employment by the Company and for the period beginning on the date hereof and ending twelve (12) months following expiration or termination of employment for any reason, Employee will not, as an individual or as a partner, employee, agent, advisor, consultant or in any other capacity of, or, directly or indirectly, (i) carry on any business, or own greater than a 10% interest in any, Internet intensive business that uses the Global Portal Platform or a company that derives over 50% of its gross revenues or over one hundred million dollars ($100,000,000.00) from the sale of telecommunications infrastructure equipment over or through the use of the internet or the world wide web, anywhere in the United States (the "Territory"), or (ii) solicit or hire, or engage as a consultant or in any other capacity, any person who was an employee or officer of the Company at the time of termination of the Employee's employment, or at any time within six (6) months prior to such termination. 3 4 Employee recognizes the broad territorial scope of the covenant above, but acknowledges and agrees that the restriction is reasonable and enforceable in view of, among other things, (1) the narrow range of activities prohibited, (2) the national market in which the Company and its affiliates operate, and (3) Employee's background, which is such that the restraint will not impose an undue hardship on Employee. Employee expressly agrees that the covenant set forth in this Section 7 is reasonable in light of the scope of the business heretofore conducted by the Company. If any court or tribunal of competent jurisdiction shall refuse to enforce the foregoing covenant because the time limit applicable thereto is deemed unreasonable, it is expressly understood and agreed that such covenant shall not be void, but that for the purpose of such proceedings and in such jurisdiction, such time limitation shall be deemed reduced to the extent necessary to permit enforcement of the covenant. If any court or tribunal of competent jurisdiction shall refuse to enforce the foregoing covenant because it is more extensive (whether as to geographic area, scope of business or otherwise) than is deemed reasonable, it is expressly understood and agreed between the parties hereto that such covenant shall not be void, but that for the purpose of such proceedings and in such jurisdiction, the restrictions contained herein (whether as to geographic area, scope of business or otherwise) shall be deemed reduced to the extent necessary to permit enforcement of the covenant. Employee further acknowledges and agrees that the damages resulting from any breach of the foregoing covenant may be intangible in whole or in part and that the Company is entitled to seek specific enforcement, injunctive relief and other equitable remedies in addition to monetary damages, and Employee hereby stipulates to the entering of such injunctive relief prohibiting Employee from competing with the Company in breach of such covenant. 8. Non-Waiver of Rights. The failure of either party to enforce at any time any of the provisions of this Agreement or to require at any time performance by the other party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement, or any part hereof, or the right of either party thereafter to enforce each and every provision in accordance with the terms of this Agreement. 9. Severability and Interpretation. Whenever possible, each provision of this Agreement and any portion hereof shall be interpreted in such a manner as to be effective and valid under applicable law, rules and regulations. If any covenant or other provision of this Agreement (or portion thereof) shall be held to be invalid, illegal, or incapable of being enforced, by reason of any rule of law, rule, regulation, administrative order, judicial decision or public policy, all other conditions and provisions of this Agreement shall, nevertheless, remain in full force and effect, and no covenant or provision shall be deemed dependent upon any other covenant or provision (or portion) unless so expressed herein. The parties hereto desire and consent that the court or other body making such determination shall, to the extent necessary to avoid any unenforceability, so reform such covenant or other provision or portions of this Agreement to the minimum extent necessary so as to render the same enforceable in accordance with the intent herein expressed. 4 5 10. Entire Agreement. This Agreement represents the entire and integrated Employment Agreement between Employee and the Company and supersedes all prior negotiations, representations and agreements, either written or oral, with respect thereto. 11. Notice. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party, by registered or certified mail, return receipt requested, postage prepaid, or by overnight courier, addressed to such address as may have been furnished to the other party in writing. Notices and communications shall be effective at the time they are given in the foregoing manner (provided that notice by mail shall be deemed given three business days after posting). 12. Amendments and Waivers. No modification, amendment or waiver of any of the provisions of this Agreement shall be effective unless in writing specifically referring hereto, and signed by the parties hereto. 13. Assignments. This Agreement shall be binding upon, and shall inure to the benefit of the Parties heirs, administrators, executors, successors and assigns. 14. Arbitration. Except for disputes for which equitable relief is permitted under this Agreement, any controversy or claim arising out of or relating to this Agreement, the employment relationship or any breach thereof between the Company and Employee and any of their agents, employees and affiliated companies shall be settled by arbitration in accordance with the rules of the America Arbitration Association and judgment upon the award may be entered in any court having jurisdiction. 15. Headings. Section headings are provided in this Agreement for convenience only and shall not be deemed to substantively alter the content of such sections. 16. Indemnification. To the fullest extent permitted by the indemnification provisions of the operating agreement of the Company in effect as of the date of this Agreement (collectively, the "Indemnification Provision"), and in each case subject to the conditions thereof, the Company shall (i) indemnify the Employee, as an officer or director of the Company if the Employee shall be serving in such capacity at the Company's written request, against all liabilities and reasonable expenses that may be incurred by the Employee in any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, because the Employee is or was an officer or director of the Company and (ii) pay for or reimburse the reasonable expenses incurred by the Employee in the defense of any proceeding to which the Employee is a party because the Employee is or was an officer or director of the Company. The rights of the Employee under the Indemnification Provision shall survive the termination of the employment of the Employee by the Company. 17. Non-Disclosure Agreement. Employee shall execute the non-disclosure agreement attached as Exhibit A. 5 6 THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. /s/ Tom Strunk ----------------------------------- TOM STRUNK TELCOBUY.COM LLC By: /s/ James P. Kavanaugh -------------------------------- Name: James P. Kavanaugh Title: Chief Executive Officer 6 EX-10.5 6 EMPLOYMENT AGREEMENT 1 EX. 10.5 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of the 21st day of January, 2000 by and between TELCOBUY.COM LLC (the "Company") having its principal office in St. Louis, Missouri, and MARK J. CATALANO, an individual ("Employee"). WHEREAS, Employee desires to be employed by the Company, and the Company desires to employ Employee, upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the compensation and other benefits of Employee's employment by the Company and the recitals, mutual covenants and agreements hereinafter set forth, Employee and the Company agree as follows: 1. Employment Services. (a) Employee is hereby employed by the Company, and Employee hereby accepts such employment, upon the terms and conditions hereinafter set forth. During the Employment Period (as defined below), Employee shall serve as requested and in the discretion of the CEO. 2. Term of Employment. The term of this Employment Agreement (the "Employment Period") shall commence on January 21, 2000 (the "Effective Date"), shall end on January 21, 2001 (the "Initial Period"), and shall thereafter continue from year to year (each an "Annual Extension"), unless sooner terminated as provided in the second sentence of this Section 2 or in Section 4 hereof. Unless sooner terminated as provided in Section 4 hereof, the Employment Period may be terminated by either the Company or Employee, at the end of the Initial Period or an Annual Extension, if a written notice of nonrenewal is delivered to the other party at least six (6) months prior to the end of such Initial Period or Annual Extension, as the case may be. 3. Compensation and Benefits. (a) Annual Base Salary. During the Employment Period, the Company shall pay Employee as compensation for his services an initial annual base salary of $140,000 per year. Employee's annual base salary rate shall be reviewed at least annually for increase (but in no event decrease) in the discretion of the CEO. The annual base salary shall be paid to Employee on the regular pay periods established by the Company. (b) Bonus. In addition to Employee's base compensation, Employee shall be eligible to earn a bonus upon achievement of such objectives as may be established from time to time by the CEO. It is the expectation that the Employee will be eligible to earn a bonus equal to his base salary upon achievement of such objectives, with greater bonus payments available if such objectives are exceeded. 2 (c) Additional Equity Participation. In addition, Employee shall be entitled to participate in such equity incentive plan as may be approved from time to time by the Board of Managers. (d) Benefits. For so long as he is employed by the Company, the Company will pay for Employee's personal vehicle, which Employee can replace every three (3) years. The payments on the current vehicle are $537.00 per month. Employee shall also receive all other standard employee benefits made available to senior executives of the company. Employee shall be eligible for all of the Company's benefits, including participation in any pension or option plan(s), so long as Employee qualifies under the terms of the plan documents. Subsequent to termination of Employee's employment, Employee shall have the option to continue in the Company's benefit plans at his sole cost so long as Employee qualifies under the terms of the plan documents. (e) Expenses. The Company agrees to reimburse Employee for those reasonable expenses incurred by Employee as a result of Employee promoting the business of the Company, including expenses for entertainment, travel and similar items upon the presentation by Employee of any itemized account of such expenses in such detail as to meet IRS requirements for the deduction of such expenses and said expenses must be ordinary and necessary expenses of the Company paid or incurred in carrying on the Company's trade or business. 4. Termination of Employment. Prior to the expiration of the Employment Period, this Agreement and Employee's employment may be terminated as follows: (a) By the Company, if Employee engages in conduct which gives the Company cause to discharge him. "Cause" shall be defined as fraud, misrepresentation, theft, embezzlement, or intentional violation of law or the Company's policies or willful refusal to follow lawful directives of the CEO or the Board of Managers, which violation or willful refusal is not remedied within ten (10) days after receipt of notice thereof from the Company. (b) Automatically, upon Employee's death or legal incapacity. (c) By the Company, upon the Employee's incapacity or inability to perform the services contemplated by this Agreement for a period of at least one hundred-eighty (180) days in any three hundred-sixty (360) day period because his physical or mental health shall have become so impaired as to make it impossible or impractical to perform the duties and responsibilities contemplated hereunder. (d) By the Company, at the discretion of the CEO or upon a majority vote of the Board of Managers. 5. Effect of Termination of Employment. Upon termination of Employee's employment and this Agreement, the rights and obligations of the parties pursuant to Sections 7 through 14 and Sections 16 and 17 shall be unaffected, but all other rights and obligations of the parties hereunder shall cease, except: 2 3 (a) If the Agreement is terminated pursuant to Section 4(a), all of the Employee's rights to receive compensation and benefits under this Agreement shall terminate as of the date of such termination, except as otherwise mandated by law, and the Employee shall not be entitled to any bonus with respect to the year in which termination occurs. (b) If this agreement is terminated pursuant to Section 4(d), the Company shall continue to pay Employee (or his estate), his Annual Base Salary at the time of termination described in Section 3(a) of this Agreement for one (1) year, a pro rata bonus under Section 3(b) for the period through the date of termination, and a bonus under Section 3(b) for the twelve month period following the termination (collectively, "Severance Pay"). The Severance Pay shall be paid to Employee (or his estate) on the regular pay periods established by the Company, but at least on a monthly basis, and shall be subject to withholding and other applicable taxes. Notwithstanding the terms of any option plan or any equity awards granted to Employee thereunder, all such options and equity awards outstanding immediately prior to such termination shall immediately become exercisable. If Employee has been found to have in any manner breached Section 7 of this Agreement, then the Company's duty to pay any Severance Pay to Employee under this Section 5(b) of this Agreement shall terminate from the date on which it is determined that said breach occurred and Employee shall immediately reimburse the Company for any Severance Pay payments made by the Company to Employee after the first date on which said breach occurred. (c) If this Agreement is terminated pursuant to Section 4(b) or 4(c), Employee (or his estate) shall receive his annual base salary for the remainder of the calendar year in which such termination occurs (according to the same payroll practices in effect at the time of termination) and benefits (as applicable) for the remainder of the year and six months of the following year. Notwithstanding the terms of any option plan or any equity awards granted to Employee thereunder, all such options and equity awards outstanding immediately prior to such termination shall immediately become exercisable. 6. Withholding. All compensation paid to Employee shall be subject to customary withholding taxes and other employment taxes as required with respect thereto. 7. Non-Competition and Non-Solicitation Agreement. Employee agrees that during his employment by the Company and for the period beginning on the date hereof and ending twelve (12) months following expiration or termination of employment for any reason, Employee will not, as an individual or as a partner, employee, agent, advisor, consultant or in any other capacity of, or, directly or indirectly, (i) carry on any business, or own greater than a 10% interest in any, Internet intensive business that uses the Global Portal Platform or a company that derives over 50% of its gross revenues or over one hundred million dollars ($100,000,000.00) from the sale of telecommunications infrastructure equipment over or through the use of the internet or the world wide web, anywhere in the United States (the "Territory"), or (ii) solicit or hire, or engage as a consultant or in any other capacity, any person who was an employee or officer of the Company at the time of termination of the Employee's employment, or at any time within six (6) months prior to such termination. 3 4 Employee recognizes the broad territorial scope of the covenant above, but acknowledges and agrees that the restriction is reasonable and enforceable in view of, among other things, (1) the narrow range of activities prohibited, (2) the national market in which the Company and its affiliates operate, and (3) Employee's background, which is such that the restraint will not impose an undue hardship on Employee. Employee expressly agrees that the covenant set forth in this Section 7 is reasonable in light of the scope of the business heretofore conducted by the Company. If any court or tribunal of competent jurisdiction shall refuse to enforce the foregoing covenant because the time limit applicable thereto is deemed unreasonable, it is expressly understood and agreed that such covenant shall not be void, but that for the purpose of such proceedings and in such jurisdiction, such time limitation shall be deemed reduced to the extent necessary to permit enforcement of the covenant. If any court or tribunal of competent jurisdiction shall refuse to enforce the foregoing covenant because it is more extensive (whether as to geographic area, scope of business or otherwise) than is deemed reasonable, it is expressly understood and agreed between the parties hereto that such covenant shall not be void, but that for the purpose of such proceedings and in such jurisdiction, the restrictions contained herein (whether as to geographic area, scope of business or otherwise) shall be deemed reduced to the extent necessary to permit enforcement of the covenant. Employee further acknowledges and agrees that the damages resulting from any breach of the foregoing covenant may be intangible in whole or in part and that the Company is entitled to seek specific enforcement, injunctive relief and other equitable remedies in addition to monetary damages, and Employee hereby stipulates to the entering of such injunctive relief prohibiting Employee from competing with the Company in breach of such covenant. 8. Non-Waiver of Rights. The failure of either party to enforce at any time any of the provisions of this Agreement or to require at any time performance by the other party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement, or any part hereof, or the right of either party thereafter to enforce each and every provision in accordance with the terms of this Agreement. 9. Severability and Interpretation. Whenever possible, each provision of this Agreement and any portion hereof shall be interpreted in such a manner as to be effective and valid under applicable law, rules and regulations. If any covenant or other provision of this Agreement (or portion thereof) shall be held to be invalid, illegal, or incapable of being enforced, by reason of any rule of law, rule, regulation, administrative order, judicial decision or public policy, all other conditions and provisions of this Agreement shall, nevertheless, remain in full force and effect, and no covenant or provision shall be deemed dependent upon any other covenant or provision (or portion) unless so expressed herein. The parties hereto desire and consent that the court or other body making such determination shall, to the extent necessary to avoid any unenforceability, so reform such covenant or other provision or portions of this Agreement to the minimum extent necessary so as to render the same enforceable in accordance with the intent herein expressed. 4 5 10. Entire Agreement. This Agreement represents the entire and integrated Employment Agreement between Employee and the Company and supersedes all prior negotiations, representations and agreements, either written or oral, with respect thereto. 11. Notice. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party, by registered or certified mail, return receipt requested, postage prepaid, or by overnight courier, addressed to such address as may have been furnished to the other party in writing. Notices and communications shall be effective at the time they are given in the foregoing manner (provided that notice by mail shall be deemed given three business days after posting). 12. Amendments and Waivers. No modification, amendment or waiver of any of the provisions of this Agreement shall be effective unless in writing specifically referring hereto, and signed by the parties hereto. 13. Assignments. This Agreement shall be binding upon, and shall inure to the benefit of the Parties heirs, administrators, executors, successors and assigns. 14. Arbitration. Except for disputes for which equitable relief is permitted under this Agreement, any controversy or claim arising out of or relating to this Agreement, the employment relationship or any breach thereof between the Company and Employee and any of their agents, employees and affiliated companies shall be settled by arbitration in accordance with the rules of the America Arbitration Association and judgment upon the award may be entered in any court having jurisdiction. 15. Headings. Section headings are provided in this Agreement for convenience only and shall not be deemed to substantively alter the content of such sections. 16. Indemnification. To the fullest extent permitted by the indemnification provisions of the operating agreement of the Company in effect as of the date of this Agreement (collectively, the "Indemnification Provision"), and in each case subject to the conditions thereof, the Company shall (i) indemnify the Employee, as an officer or director of the Company if the Employee shall be serving in such capacity at the Company's written request, against all liabilities and reasonable expenses that may be incurred by the Employee in any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, because the Employee is or was an officer or director of the Company and (ii) pay for or reimburse the reasonable expenses incurred by the Employee in the defense of any proceeding to which the Employee is a party because the Employee is or was an officer or director of the Company. The rights of the Employee under the Indemnification Provision shall survive the termination of the employment of the Employee by the Company. 17. Non-Disclosure Agreement. Employee shall execute the non-disclosure agreement attached as Exhibit A. 5 6 THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. /s/ Mark J. Catalano ----------------------------------- Mark J. Catalano TELCOBUY.COM LLC By: /s/ James P. Kavanaugh -------------------------------- Name: James P. Kavanaugh Title: Chief Executive Officer 6 EX-10.6 7 EMPLOYMENT AGREEMENT 1 EX. 10.6 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of the 21st day of January, 2000 by and between TELCOBUY.COM LLC (the "Company") having its principal office in St. Louis, Missouri, and ROBERT M. OLWIG, an individual ("Employee"). WHEREAS, Employee desires to be employed by the Company, and the Company desires to employ Employee, upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the compensation and other benefits of Employee's employment by the Company and the recitals, mutual covenants and agreements hereinafter set forth, Employee and the Company agree as follows: 1. Employment Services. (a) Employee is hereby employed by the Company, and Employee hereby accepts such employment, upon the terms and conditions hereinafter set forth. During the Employment Period (as defined below), Employee shall serve as requested and in the discretion of the CEO. 2. Term of Employment. The term of this Employment Agreement (the "Employment Period") shall commence on January 21, 2000 (the "Effective Date"), shall end on January 21, 2001 (the "Initial Period"), and shall thereafter continue from year to year (each an "Annual Extension"), unless sooner terminated as provided in the second sentence of this Section 2 or in Section 4 hereof. Unless sooner terminated as provided in Section 4 hereof, the Employment Period may be terminated by either the Company or Employee, at the end of the Initial Period or an Annual Extension, if a written notice of nonrenewal is delivered to the other party at least six (6) months prior to the end of such Initial Period or Annual Extension, as the case may be. 3. Compensation and Benefits. (a) Annual Base Salary. During the Employment Period, the Company shall pay Employee as compensation for his services an initial annual base salary of $90,000 per year. Employee's annual base salary rate shall be reviewed at least annually for increase (but in no event decrease) in the discretion of the CEO. The annual base salary shall be paid to Employee on the regular pay periods established by the Company. (b) Bonus. In addition to Employee's base compensation, Employee shall be eligible to earn a bonus upon achievement of such objectives as may be established from time to time by the CEO. It is the expectation that the Employee will be eligible to earn a bonus equal to his base salary upon achievement of such objectives, with greater bonus payments available if such objectives are exceeded. 2 (c) Additional Equity Participation. In addition, Employee shall be entitled to participate in such equity incentive plan as may be approved from time to time by the Board of Managers. (d) Benefits. For so long as he is employed by the Company, the Company will pay for Employee's personal vehicle, which Employee can replace every three (3) years. The payments on the current vehicle are $______ per month. Employee shall also receive all other standard employee benefits made available to senior executives of the company. Employee shall be eligible for all of the Company's benefits, including participation in any pension or option plan(s), so long as Employee qualifies under the terms of the plan documents. Subsequent to termination of Employee's employment, Employee shall have the option to continue in the Company's benefit plans at his sole cost so long as Employee qualifies under the terms of the plan documents. (e) Expenses. The Company agrees to reimburse Employee for those reasonable expenses incurred by Employee as a result of Employee promoting the business of the Company, including expenses for entertainment, travel and similar items upon the presentation by Employee of any itemized account of such expenses in such detail as to meet IRS requirements for the deduction of such expenses and said expenses must be ordinary and necessary expenses of the Company paid or incurred in carrying on the Company's trade or business. 4. Termination of Employment. Prior to the expiration of the Employment Period, this Agreement and Employee's employment may be terminated as follows: (a) By the Company, if Employee engages in conduct which gives the Company cause to discharge him. "Cause" shall be defined as fraud, misrepresentation, theft, embezzlement, or intentional violation of law or the Company's policies or willful refusal to follow lawful directives of the CEO or the Board of Managers, which violation or willful refusal is not remedied within ten (10) days after receipt of notice thereof from the Company. (b) Automatically, upon Employee's death or legal incapacity. (c) By the Company, upon the Employee's incapacity or inability to perform the services contemplated by this Agreement for a period of at least one hundred-eighty (180) days in any three hundred-sixty (360) day period because his physical or mental health shall have become so impaired as to make it impossible or impractical to perform the duties and responsibilities contemplated hereunder. (d) By the Company, at the discretion of the CEO or upon a majority vote of the Board of Managers. 5. Effect of Termination of Employment. Upon termination of Employee's employment and this Agreement, the rights and obligations of the parties pursuant to Sections 7 through 14 and Sections 16 and 17 shall be unaffected, but all other rights and obligations of the parties hereunder shall cease, except: 2 3 (a) If the Agreement is terminated pursuant to Section 4(a), all of the Employee's rights to receive compensation and benefits under this Agreement shall terminate as of the date of such termination, except as otherwise mandated by law, and the Employee shall not be entitled to any bonus with respect to the year in which termination occurs. (b) If this agreement is terminated pursuant to Section 4(d), the Company shall continue to pay Employee (or his estate), his Annual Base Salary at the time of termination described in Section 3(a) of this Agreement for one (1) year, a pro rata bonus under Section 3(b) for the period through the date of termination, and a bonus under Section 3(b) for the twelve month period following the termination (collectively, "Severance Pay"). The Severance Pay shall be paid to Employee (or his estate) on the regular pay periods established by the Company, but at least on a monthly basis, and shall be subject to withholding and other applicable taxes. Notwithstanding the terms of any option plan or any equity awards granted to Employee thereunder, all such options and equity awards outstanding immediately prior to such termination shall immediately become exercisable. If Employee has been found to have in any manner breached Section 7 of this Agreement, then the Company's duty to pay any Severance Pay to Employee under this Section 5(b) of this Agreement shall terminate from the date on which it is determined that said breach occurred and Employee shall immediately reimburse the Company for any Severance Pay payments made by the Company to Employee after the first date on which said breach occurred. (c) If this Agreement is terminated pursuant to Section 4(b) or 4(c), Employee (or his estate) shall receive his annual base salary for the remainder of the calendar year in which such termination occurs (according to the same payroll practices in effect at the time of termination) and benefits (as applicable) for the remainder of the year and six months of the following year. Notwithstanding the terms of any option plan or any equity awards granted to Employee thereunder, all such options and equity awards outstanding immediately prior to such termination shall immediately become exercisable. 6. Withholding. All compensation paid to Employee shall be subject to customary withholding taxes and other employment taxes as required with respect thereto. 7. Non-Competition and Non-Solicitation Agreement. Employee agrees that during his employment by the Company and for the period beginning on the date hereof and ending twelve (12) months following expiration or termination of employment for any reason, Employee will not, as an individual or as a partner, employee, agent, advisor, consultant or in any other capacity of, or, directly or indirectly, (i) carry on any business, or own greater than a 10% interest in any, Internet intensive business that uses the Global Portal Platform or a company that derives over 50% of its gross revenues or over one hundred million dollars ($100,000,000.00) from the sale of telecommunications infrastructure equipment over or through the use of the internet or the world wide web, anywhere in the United States (the "Territory"), or (ii) solicit or hire, or engage as a consultant or in any other capacity, any person who was an employee or officer of the Company at the time of termination of the Employee's employment, or at any time within six (6) months prior to such termination. 3 4 Employee recognizes the broad territorial scope of the covenant above, but acknowledges and agrees that the restriction is reasonable and enforceable in view of, among other things, (1) the narrow range of activities prohibited, (2) the national market in which the Company and its affiliates operate, and (3) Employee's background, which is such that the restraint will not impose an undue hardship on Employee. Employee expressly agrees that the covenant set forth in this Section 7 is reasonable in light of the scope of the business heretofore conducted by the Company. If any court or tribunal of competent jurisdiction shall refuse to enforce the foregoing covenant because the time limit applicable thereto is deemed unreasonable, it is expressly understood and agreed that such covenant shall not be void, but that for the purpose of such proceedings and in such jurisdiction, such time limitation shall be deemed reduced to the extent necessary to permit enforcement of the covenant. If any court or tribunal of competent jurisdiction shall refuse to enforce the foregoing covenant because it is more extensive (whether as to geographic area, scope of business or otherwise) than is deemed reasonable, it is expressly understood and agreed between the parties hereto that such covenant shall not be void, but that for the purpose of such proceedings and in such jurisdiction, the restrictions contained herein (whether as to geographic area, scope of business or otherwise) shall be deemed reduced to the extent necessary to permit enforcement of the covenant. Employee further acknowledges and agrees that the damages resulting from any breach of the foregoing covenant may be intangible in whole or in part and that the Company is entitled to seek specific enforcement, injunctive relief and other equitable remedies in addition to monetary damages, and Employee hereby stipulates to the entering of such injunctive relief prohibiting Employee from competing with the Company in breach of such covenant. 8. Non-Waiver of Rights. The failure of either party to enforce at any time any of the provisions of this Agreement or to require at any time performance by the other party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement, or any part hereof, or the right of either party thereafter to enforce each and every provision in accordance with the terms of this Agreement. 9. Severability and Interpretation. Whenever possible, each provision of this Agreement and any portion hereof shall be interpreted in such a manner as to be effective and valid under applicable law, rules and regulations. If any covenant or other provision of this Agreement (or portion thereof) shall be held to be invalid, illegal, or incapable of being enforced, by reason of any rule of law, rule, regulation, administrative order, judicial decision or public policy, all other conditions and provisions of this Agreement shall, nevertheless, remain in full force and effect, and no covenant or provision shall be deemed dependent upon any other covenant or provision (or portion) unless so expressed herein. The parties hereto desire and consent that the court or other body making such determination shall, to the extent necessary to avoid any unenforceability, so reform such covenant or other provision or portions of this Agreement to the minimum extent necessary so as to render the same enforceable in accordance with the intent herein expressed. 4 5 10. Entire Agreement. This Agreement represents the entire and integrated Employment Agreement between Employee and the Company and supersedes all prior negotiations, representations and agreements, either written or oral, with respect thereto. 11. Notice. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party, by registered or certified mail, return receipt requested, postage prepaid, or by overnight courier, addressed to such address as may have been furnished to the other party in writing. Notices and communications shall be effective at the time they are given in the foregoing manner (provided that notice by mail shall be deemed given three business days after posting). 12. Amendments and Waivers. No modification, amendment or waiver of any of the provisions of this Agreement shall be effective unless in writing specifically referring hereto, and signed by the parties hereto. 13. Assignments. This Agreement shall be binding upon, and shall inure to the benefit of the Parties heirs, administrators, executors, successors and assigns. 14. Arbitration. Except for disputes for which equitable relief is permitted under this Agreement, any controversy or claim arising out of or relating to this Agreement, the employment relationship or any breach thereof between the Company and Employee and any of their agents, employees and affiliated companies shall be settled by arbitration in accordance with the rules of the America Arbitration Association and judgment upon the award may be entered in any court having jurisdiction. 15. Headings. Section headings are provided in this Agreement for convenience only and shall not be deemed to substantively alter the content of such sections. 16. Indemnification. To the fullest extent permitted by the indemnification provisions of the operating agreement of the Company in effect as of the date of this Agreement (collectively, the "Indemnification Provision"), and in each case subject to the conditions thereof, the Company shall (i) indemnify the Employee, as an officer or director of the Company if the Employee shall be serving in such capacity at the Company's written request, against all liabilities and reasonable expenses that may be incurred by the Employee in any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, because the Employee is or was an officer or director of the Company and (ii) pay for or reimburse the reasonable expenses incurred by the Employee in the defense of any proceeding to which the Employee is a party because the Employee is or was an officer or director of the Company. The rights of the Employee under the Indemnification Provision shall survive the termination of the employment of the Employee by the Company. 17. Non-Disclosure Agreement. Employee shall execute the non-disclosure agreement attached as Exhibit A. 5 6 THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. /s/ Robert M. Olwig ----------------------------------- Robert M. Olwig TELCOBUY.COM LLC By: /s/ James P. Kavanaugh -------------------------------- Name: James P. Kavanaugh Title: Chief Executive Officer 6 EX-10.7 8 UNIT OPTION PLAN 1 EX. 10.7 TELCOBUY.COM, LLC UNIT OPTION PLAN SECTION 1. PURPOSE OF THE PLAN. The Telcobuy.com, LLC Unit Option Plan (the "Plan") is intended as an incentive to employees, directors, consultants, advisors, strategic partners and other key individuals associated with either Telcobuy.com, LLC or World Wide Technology, Inc. to contribute to the growth and success of the Company. SECTION 2. DEFINITIONS. 2.1. "Board" shall mean the board of managers or board of directors (whichever is applicable) of the Company. 2.2. "Code" shall mean the Internal Revenue Code of 1986, as amended. 2.3. "Company" shall mean Telcobuy.com, LLC 2.4. "Conversion" shall mean a change in the business form in which the Company is organized from a limited liability company to a corporation described in subchapter C of Chapter 1 of Subtitle A of the Code. 2.5. "Disabled" or "Disability" shall mean permanently and totally disabled within the meaning of Section 422(c)(6) of the Code, which, as of the date hereof, shall mean that an optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. A person shall be considered disabled only if he or she furnishes such proof of disability as the Committee may require. 2.6. "Investor Managers" shall mean Scott Collins and Sean Dalton, or such other representative or representatives of Summit Partners and Highland Capital Partners as may be subsequently appointed to the Board. 2.7. "Units" shall mean equity interests in the Company, as further defined in Section 3.1. 2.8. "Outside Director" shall mean a director of the Company who (1) is not an employee of the Company, Parent or a Subsidiary while he or she is a member of the Committee; (2) is not a former employee of the Company, Parent or a Subsidiary who receives compensation for prior services (other than benefits under a tax-qualified retirement plan) during the taxable year; (3) has not been an Officer of the Company, Parent or a Subsidiary; and (4) shall not receive Remuneration from the Company, Parent or a Subsidiary either directly or indirectly in any capacity other than as a director. "Remuneration" and "Officer" as used herein 2 shall be determined in accordance with Treas. Reg. Section 1.162-27(e)(3) or any successor thereto. 2.9. "Parent" shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of the granting of the option, each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, or such other meaning as may be hereafter ascribed to it in Section 424 of the Code. 2.10. "Subsidiary" shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, or such other meaning as may be hereafter ascribed to it in Section 424 of the Code. 2.11. "WWT" shall mean World Wide Technology, Inc. SECTION 3. UNITS SUBJECT TO THE PLAN. 3.1 Units Available For Grants of Options. Each Unit shall represent a fractional equity interest in the Company. 10% of the total Class C Units shall be available for award pursuant to the Plan, subject to adjustment under Section 15. The value of the equity of the Company shall be determined from time to time in the sole discretion of the Committee. 3.2 Unpurchased Units. If any option under this Plan shall expire or terminate for any reason without having been exercised in full, the unpurchased Units subject thereto shall again be available for the purposes of the Plan. SECTION 4. ADMINISTRATION. The Plan shall be administered by the Committee referred to in Section 5. Subject to the express provisions of the Plan, the Committee, in consultation with the Investor Managers, shall have plenary authority, in its discretion, to determine the individuals to whom, and the time or times at which, options shall be granted and the number of Units to be subject to each option. In making such determinations the Committee may take into account the nature of the services rendered by the respective individuals, their present and potential contributions to the Company's success and such other factors as the Committee, in its sole discretion, shall deem relevant. Subject to the express provisions of the Plan, the Committee shall also have plenary authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the terms and provisions of the respective option agreements (which need not be identical) and to make all other determinations necessary or advisable for the administration of the Plan. The Committee's determinations on the matters referred to in this Section 4 shall be conclusive. SECTION 5. THE COMMITTEE. 2 3 5.1 Composition. Prior to the date on which the "reliance period" defined in Treas. Reg. Section 1.162-27(f)(2) or any successor thereto ends, the Plan shall be administered by the Chief Executive Officer of the Company ("CEO") (unless and until the CEO requests that the Board appoint the Committee and the members thereof to administer the Plan), in which case the term "Committee" when used herein with respect to the administration of the Plan shall be deemed to mean the CEO. After the date on which the "reliance period" defined in Treas. Reg. Section 1.162-27(f)(2) or any successor thereto ends, such Committee shall consist of two or more Outside Directors and the CEO; provided that, the CEO may not vote with respect to the grant of an option to an individual who is a "covered employee" as defined in Section 163(m)(3) of the Code. The Committee shall be appointed by the Board in accordance the terms of the Operating Agreement effective at the time (which currently requires one Investor Manager to be a member of the Committee), which may from time to time appoint members of the Committee in substitution for members previously appointed and may fill vacancies, however caused, in the Committee. The Board shall select one of the Committee members as its Chairman. The Committee (including the CEO) may appoint such agents as it deems necessary for the effective exercise of its duties, and may, to the extent not inconsistent with the terms of the Plan, delegate to such agents any ministerial duties as the Committee may deem expedient or appropriate. 5.2 Meetings. The Committee shall hold its meetings at such times and places as it may determine. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members present at any meeting at which there is a quorum. Any decision or determination reduced to writing and signed by all of the members shall be fully as effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary, shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable SECTION 6. ELIGIBILITY. Unit options may be granted to any individual pursuant to the sole discretion of the Committee in accordance with Section 4. SECTION 7. OPTION PRICES. The purchase price of the Units under each option shall be determined from time to time by the Committee, which need not be uniform for all optionees. SECTION 8. PAYMENT OF OPTION PRICES. The purchase price for an option is to be paid in full upon the exercise of the option, either (i) in cash, (ii) in the discretion of the Committee, by the tender to the Company (either actual or by attestation) of Units (or common stock or other equity securities substituted for Units pursuant to Section 15.2, provided that the optionee has owned such common stock or other equity securities for a period of at least six (6) months as of the date of such tender), owned by the optionee and registered in his or her name, having a fair market value equal to the cash 3 4 exercise price of the option being exercised, with the fair market value of such Units to be determined in such appropriate manner as may be provided for by the Committee or as may be required in order to comply with, or to conform to the requirements of, any applicable laws or regulations, or (iii) in the discretion of the Committee, by any combination of the payment methods specified in clauses (i) and (ii) hereof. Other restrictions on the exercise of an option shall be those set forth in the option agreements which shall be approved by the Committee. The proceeds of sale of Units (or common stock or other equity securities substituted for Units pursuant to Section 15.2) subject to option are to be added to the general funds of the Company or to the Units held in its Treasury, and used for its corporate purposes as the Board shall determine. SECTION 9. EXERCISE OF OPTIONS. 9.1 Terms and Conditions. The term of each option shall be not more than ten (10) years from the date of granting thereof or such shorter period as is prescribed in Section 10. Within such limit, options will be exercisable at such time or times, and subject to such restrictions and conditions, as the Committee shall, in each instance, approve, which need not be uniform for all optionees. 9.2 Rights of Optionee. The holder of an option shall have none of the rights of a unit holder with respect to the Units subject to the option until such Units shall be issued to him or her upon the exercise of his or her option. 9.3 Withholding. Upon exercise of an option the Committee shall withhold a sufficient number of Units to satisfy the Company's withholding obligations for any taxes incurred as a result of such exercise, and the Committee may, at the request of the optionee, withhold a sufficient number of Units to satisfy the optionee's tax liability incurred as a result of such exercise up to the maximum marginal federal, state and local tax rates; provided that, in lieu of all or part of such withholding, the optionee may pay an equivalent amount of cash to the Company. SECTION 10. TERMINATION OF ASSOCIATION WITH THE COMPANY OR WWT. 10.1 In General. The holder of any option issued hereunder must exercise the option prior to his or her termination of association with the Company or WWT, except that if the association of an optionee terminates with the consent and approval of the Company, the Committee may, in its absolute discretion, permit the optionee to exercise his or her option, to the extent that he or she was entitled to exercise it at the date of such termination of association, at any time within one (1) year after such termination, but not after ten (10) years from the date of the granting thereof. The Committee shall determine in its sole discretion whether an individual's association with either the Company or WWT has terminated. 10.2 Disability. If the optionee terminates his or her association with the Company or WWT on account of Disability, such option shall become fully vested (if not already fully vested) and the optionee may exercise such option at any time within one (1) year of the termination of his or her association but not after ten (10) years from the date of the 4 5 granting thereof. The Committee shall determine in its sole discretion whether an individual's association with either the Company or WWT has terminated on account of Disability. 10.3 Transfers and Leaves of Absence. With respect to an optionee who is an employee of the Company or WWT, or a Parent or a Subsidiary of either, options granted under the Plan shall not be affected by any change of employment so long as the holder continues to be an employee of the Company, WWT, Parent or a Subsidiary of either. The option agreements may contain such provisions as the Committee shall approve with reference to the effect of approved leaves of absence. 10.4 No Right to Continued Employment. With respect to an optionee who is an employee of the Company, Parent or a Subsidiary, nothing in the Plan or in any option granted pursuant to the Plan shall confer on any individual any right to continue in the employ of the Company, Parent or a Subsidiary or interfere in any way with the right of the Company, Parent or a Subsidiary thereof to terminate his or her employment at any time. SECTION 11. DEATH OF HOLDER OF OPTION. In the event of the death of an individual to whom an option has been granted under the Plan, while he or she is associated with the Company or WWT (or Parent or a Subsidiary or either) or within a period permitted by the Committee after the termination of his or her association (or one year in the case of the termination of association of an option holder who is disabled as provided above in Section 10), the option theretofore granted to him or her shall become fully vested (if not already fully vested) and may be exercised by a legatee or legatees of the option holder under his or her last will, or by his or her personal representatives or distributees, at any time within a period of one year after his or her death, but not after ten (10) years from the date of granting thereof. SECTION 12. TRANSFERABILITY OF OPTIONS. The Committee may provide in option agreements that options are transferable. Transferability may be subject to such conditions and limitations as the Committee deems appropriate. Except to the extent otherwise expressly set forth in the option agreement, options shall not be transferable other than by will or the laws of descent and distribution, and (if exercise is required) shall be exercisable during the optionee's lifetime only by the optionee or his or her guardian or legal representative. SECTION 13. SUCCESSIVE OPTION GRANTS. Successive option grants may be made to any holder of options under the Plan. SECTION 14. INVESTMENT PURPOSE. Each option under the Plan shall be granted only on the condition that all purchases of Units thereunder shall be for investment purposes, and not with a view to resale or distribution, except that the Committee may make such provision with respect to options granted 5 6 under this Plan as it deems necessary or advisable for the release of such condition upon the registration with the Securities and Exchange Commission of interests subject to the option, or upon the happening of any other contingency warranting the release of such condition. The Committee shall also have the authority to include such provisions in the option agreements as it deems appropriate in its sole discretion regarding restrictions on the transfer of Units acquired by an individual pursuant to the exercise of an option granted under the Plan. SECTION 15. ADJUSTMENTS. 15.1 Changes in Capitalization or Corporate Acquisitions. Notwithstanding any other provisions of the Plan, the option agreements may contain such provisions as the Committee shall determine to be appropriate for the adjustment of the number of Units subject to each outstanding option and the option prices in the event of changes in the outstanding Units by reason of a recapitalization, merger, consolidation, split-up, combination or exchange of Units and the like, and, in the event of any such change in the outstanding Units, the aggregate number of Units available under the Plan may be appropriately adjusted by the Committee, whose determination shall be conclusive. The provisions in the option agreements governing the adjustments described in this Section 15.1 need not be uniform as to each optionee, and the adjustments may be made either to increase or decrease (i) the number of Units subject to each outstanding option and/or (ii) the option prices. 15.2 Conversion. Notwithstanding any other provisions of the Plan, the option agreements may contain such provisions as the Committee shall determine to be appropriate for (i) substituting common stock or other equity securities of a C corporation created in a Conversion for Units, and/or (ii) adjusting of the number of Units, common stock or other equity securities subject to each outstanding option as a result of a Conversion, both or either as determined by the Company in its sole discretion. SECTION 16. AMENDMENT AND TERMINATION. Either the Board or the Committee may at any time terminate the Plan, or make such modifications to the Plan as either shall deem advisable. No termination or amendment of the Plan may, without the consent of the optionee to whom any option shall theretofore have been granted, adversely affect the rights of such optionee under such option. SECTION 17. EFFECTIVENESS OF THE PLAN. The Plan shall become effective upon adoption by the Board. SECTION 18. TIME OF GRANTING OF OPTIONS. An option grant under the Plan shall be deemed to be made on the date on which the Committee, by formal action of its members duly recorded in the records thereof, makes an award of an option to an eligible person (but in no event prior to the adoption of the Plan by the Board); provided that, such option is evidenced by a written option agreement duly executed on 6 7 behalf of the Company and on behalf of the optionee within a reasonable time after the date of the Committee action. SECTION 19. TERM OF PLAN. This Plan shall terminate ten (10) years after the date on which it is approved and adopted by the Board, and no option shall be granted hereunder after the expiration of such ten-year period. Options outstanding at the termination of the Plan shall continue in accordance with their terms and shall not be affected by such termination. * * * The foregoing Plan was approved and adopted by the Board of Managers on February 15, 2000. 7 EX-10.8 9 2000 STOCK OPTION PLAN 1 Ex 10.8 TELECOBUY.COM, INC. 2000 STOCK OPTION PLAN 1. Purpose of the Plan. The Telecobuy.com, Inc. 2000 Stock Option Plan (the "Plan") is intended as an incentive to, and to encourage ownership of the stock of Telecobuy.com, Inc. ("Company") by, certain employees of the Company, a parent or a subsidiary as well as certain other individuals who meet the definition of "consultant" in Rule 701 of the Securities Act of 1933, as amended. It is intended that certain options granted hereunder will qualify as incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") (hereinafter referred to as an "Incentive Stock Option") and that other options granted hereunder will not qualify as Incentive Stock Options. 2. Stock Subject to the Plan. The number of shares of the authorized but unissued common stock, par value of $0.01 per share, of the Company ("Common Stock") allocated to the Plan and reserved for issue upon the exercise of options granted under the Plan shall be the sum of (i) 2,500,000 shares of Common Stock plus (ii) an amount determined annually on the anniversary of the date of adoption of the Plan by the Board of Directors of the Company equal to the least of (a) 2,500,000 shares of Common Stock, (b) the number of shares of Common Stock subject to options granted under the Plan in the one-year period ending on such date or (c) an amount determined by the Board of Directors of the Company; provided that, the aggregate number of shares of Common Stock allocated to the Plan may not exceed twenty percent (20%) of the then outstanding shares of Common Stock, as adjusted in accordance with the events described in Section 15. The Company may, in its discretion, use shares held in the treasury in lieu of authorized but unissued shares. If any such option shall expire or terminate for any reason without having been exercised in full, the unpurchased shares subject thereto shall again be available for the purposes of the Plan. Any shares of Common Stock which are used by an optionee as full or partial payment to the Company of the purchase price of shares of Common Stock upon exercise of a stock option shall again be available for the purposes of the Plan. The number of shares with respect to which options and stock appreciation rights ("SAR's") may be granted to any individual during any calendar year may not exceed 1,000,000 shares. 3. Administration. The Plan shall be administered by the Committee referred to in Section 4 (the "Committee"). Subject to the express provisions of the Plan, the Committee shall have plenary authority, in its discretion, to determine the individuals to whom, and the time or times at which, options and SAR's shall be granted and the number of shares to be subject to each option or SAR. In making such determinations the Committee may take into account the nature of the services rendered by the respective individuals, their present and potential contributions to the Company's success and such other factors as the Committee, in its discretion, shall deem relevant. Subject to the express provisions of the Plan, the Committee shall also have plenary authority to interpret 2 the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the terms and provisions of the respective stock option and SAR agreements (which need not be identical) and to make all other determinations necessary or advisable for the administration of the Plan. The Committee's determinations on the matters referred to in this Section 3 shall be conclusive. 4. The Committee. The Committee shall be comprised of the Board of Directors of the Company (''Board of Directors'') or a committee of the Board of Directors and shall at all times be constituted to comply with Rule 16b-3 under the Securities Exchange Act of 1934, or any successor to such Rule. For calendar years beginning after the ''reliance period'' defined in Treas. Section 1.162-27(f)(2) or any successor thereto with respect to the Company, such Committee shall consist solely of two or more Outside Directors. For this purpose, an Outside Director shall mean a director of the Company who: (1) is not an employee of the Company, a parent or a subsidiary while he or she is a member of the Committee; (2) is not a former employee of the Company, a parent or a subsidiary who receives compensation for prior services (other than benefits under a tax-qualified retirement plan) during the taxable year; (3) has not been an Officer of the Company, a parent or a subsidiary; and (4) shall not receive Remuneration from the Company, a parent or a subsidiary either directly or indirectly in any capacity other than as a director. ''Remuneration'' and ''Officer'' as used herein shall be determined in accordance with Treas. Reg. Section 1.162-27(e)(3) or any successor thereto. The Committee shall be appointed by the Board of Directors, which may from time to time appoint members of the Committee in substitution for members previously appointed and may fill vacancies, however caused, in the Committee. The Board of Directors shall select one of the Committee members as its Chairman, and shall hold its meetings at such times and places as it may determine. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members present at any meeting at which there is a quorum. Any decision or determination reduced to writing and signed by all of the members shall be fully as effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary, shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable. 2 3 5. Eligibility. Incentive Stock Options may be granted to any individual classified by the Committee as an employee of the Company, a parent or a subsidiary. The term "parent" shall mean any corporation (other than Company) in an unbroken chain of corporation ending with the Company if, at the time of the granting of the option or SAR, each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, or such other meaning as may be hereafter ascribed to it in Section 424 of the Code. The term "subsidiary" shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the option or SAR, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, or such other meaning as may be hereafter ascribed to it in Section 424 of the Code. Options which are not Incentive Stock Options and SAR's may be granted to any individual selected by the Committee. 6. Option Prices. (a) Incentive Stock Options. The purchase price of the Common Stock under each Incentive Stock Option shall not be less than 100% of the fair market value of the stock at the time of the granting of the option; provided that, in the case of an optionee who owns more than 10% of the total combined voting power of all classes of stock of the Company, a parent or a subsidiary, the purchase price of the Common Stock under each Incentive Stock Option shall not be less than 110% of the fair market value of the stock on the date such option is granted. If the Common Stock is publicly traded, such fair market value shall generally be considered to be the mean between the high and low prices of the Common Stock as traded on the applicable exchange on the day the option is granted; provided, however, that the Committee may adopt any other criterion for the determination of such fair market value as it may determine to be appropriate. (b) Options Other Than Incentive Stock Options. The purchase price of the Common Stock under each option other than an Incentive Stock Option shall be determined from time to time by the Committee, which need not be uniform for all optionees. (c) Exercise - Elections and Restrictions. The purchase price for an option is to be paid in full upon the exercise of the option, either (i) in cash, (ii) in the discretion of the Committee, by the tender to the Company (either actual or by attestation) of shares of the Common Stock, owned by the optionee and registered in his or her name, having a fair market value equal to the cash exercise price of the option being exercised, with the fair market value of such stock to be determined in such appropriate manner as may be provided for by the Committee or as may be required in order to comply with, or to conform to the requirements of, any applicable laws or regulations, or (iii) in the discretion of the Committee, by any combination of the payment methods specified in clauses (i) and (ii) hereof; provided that, no shares of Common Stock may be tendered in exercise of an Incentive Stock Option if such shares 3 4 were acquired by the optionee through the exercise of an Incentive Stock Option unless (a) such shares have been held by the optionee for at least one year and (b) at least two years have elapsed since such prior Incentive Stock Option was granted. With respect to options that are not Incentive Stock Options, the restrictions on exercise shall be those set forth in the stock option agreements which shall be approved by the Committee. The proceeds of sale of stock subject to option are to be added to the general funds of the Company or to the shares of the Common Stock held in its Treasury, and used for its corporate purposes as the Board of Directors shall determine. 7. Incentive Stock Option Amounts Limit. The maximum aggregate fair market value (determined at the time an option is granted in the same manner as provided for in Section 6 hereof) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any optionee during any calendar year (under all plans of the Company, a parent and a subsidiary) shall not exceed $100,000. 8. Exercise of Options. The term of each option shall be not more than ten (10) years from the date of granting thereof or such shorter period as in prescribed in Section 9; provided that, in the case of an option holder who owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of its parent or subsidiary, the term of any Incentive Stock Option shall not be more than five (5) years from the date of granting thereof or such shorter period as prescribed in Section 9 below. Within such limit, options will be exercisable at such time or times, and subject to such restrictions and conditions, as the Committee shall, in each instance, approve, which need not be uniform for all optionees; provided, however, that except as provided in Sections 9 and 10, no Incentive Stock Option may be exercised at any time unless the optionee is then an employee of the Company, a parent or a subsidiary and has been so employed continuously since the granting of the option. The holder of an option shall have none of the rights of a shareholder with respect to the shares subject to option until such shares shall be issued to him or her upon the exercise of his or her option. Upon exercise of an option the Committee shall withhold a sufficient number of shares to satisfy the Company's withholding obligations for any taxes incurred as a result of such exercise, and the Committee may, at the request of the optionee, withhold a sufficient number of shares to satisfy the optionee's tax liability incurred as a result of such exercise up to the maximum marginal federal, state and local tax rates; provided that, in lieu of all or part of such withholding, the optionee may pay an equivalent amount of cash to the Company. 9. Termination of Employment. 9.1 In General. The holder of any option issued hereunder must exercise the option prior to his 4 5 or her termination of employment, except that if the employment of an optionee terminates with the consent and approval of his or her employer, the Committee may, in its absolute discretion, permit the optionee to exercise his or her option, to the extent that he or she was entitled to exercise it at the date of such termination of employment, at any time within three (3) months after such termination, but not after ten (10) years from the date of the granting thereof. 9.2 Disability. If the Optionee terminates employment on account of disability, his or her option shall become fully vested (if not already fully vested) and the Optionee may exercise such option at any time within one year of the termination of his or her employment but not after ten (10) years (or five (5) years, if applicable) from the date of the granting thereof. For this purpose, a person shall be deemed to be disabled if he or she is permanently and totally disabled within the meaning of Section 422(c)(6) of the Code, which, as of the date hereof, shall mean that he or she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. A person shall be considered disabled only if he or she furnishes such proof of disability as the Committee may require. 9.3 Transfers and Leaves of Absence. Options granted under the Plan shall not be affected by any change of employment so long as the holder continues to be an employee of the Company, a parent or a subsidiary thereof. The option agreements may contain such provisions as the Committee shall approve with reference to the effect of approved leaves of absence. 9.4 No Right to Continued Employment. Nothing in the Plan or in any option granted pursuant to the Plan shall confer on any individual any right to continue in the employ of the Company, a parent or a subsidiary or interfere in any way with the right of the Company, a parent or a subsidiary thereof to terminate his or he employment at any time. 10. Death of Holder of Option. In the event of the death of an individual to whom an option has been granted under the Plan, while he or she is employed by the Company, a parent or a subsidiary or within three (3) months after the termination of his or her employment (or one year in the case of the termination of employment of an option holder who is disabled as provided above in Section 9), the option theretofore granted to him or her shall become fully vested (if not already fully vested) and may be exercised by a legatee or legatees of the option holder under his or her last will, or by his or her personal representatives or distributees, at any time within a period of one year after his or her death, but not after ten (10) years (or five (5) years, if applicable) from the date of granting thereof and only if and to the extent that he or she was entitled to exercise the option at the date of his or her death. 5 6 11. Transferability of Options. The Committee may provide in option agreements that options, other than Incentive Stock Options, are transferable. Transferability may be subject to such conditions and limitations as the Committee deems appropriate. Except to the extent otherwise expressly set forth in the option agreement, each option granted under the Plan shall, by its terms, be non-transferable otherwise than by will or the laws of descent and distribution and an option may be exercised, during the lifetime of the holder thereof, only by the optionee or his or her guardian or legal representative. 12. Successive Option Grants. Successive option grants may be made to any holder of options under the Plan. 13. Investment Purpose. Each option under the Plan shall be granted only on the condition that all purchases of stock thereunder shall be for investment purposes, and not with a view to resale or distribution, except that the Committee may make such provision with respect to options granted under this Plan as it deems necessary or advisable for the release of such condition upon the registration with the Securities and Exchange Commission of stock subject to the option, or upon the happening of any other contingency warranting the release of such condition. 14. Stock Appreciation Rights. (a) Grant. At the time of grant of an option, the Committee, in its discretion, may grant to the optionee under the Plan an alternative SAR for all or any part of the number of shares covered by his or her option. The SAR agreement shall specify the options in respect of which the alternative SAR is granted. Any subsequent exercise of an option by the holder thereof who also holds an alternative SAR shall reduce his or her alternative SAR by the same number of shares as to which his or her option is exercised. Any exercise of his or her alternative SAR shall reduce his or her option by the same number of shares as to which his or her SAR is exercised. An alternative SAR granted to an option holder shall specify a time period for exercise of such SFAR, which time period may not extend beyond, but may be less than, the time period during which the corresponding option may be exercised. The failure of the holder of the alternative SAR to exercise such SAR within the time period specified shall not reduce his or her option rights. If an alternative SAR is granted for a number of shares less than the total number of shares covered by the corresponding option, the Committee may later grant to the option holder an additional alternative SAR covering additional shares; provided, however, that the aggregate amount of all alternative SAR's held by an option holder shall at no time exceed the total number of shares covered by his or her unexercised options. In addition, the Committee may grant SAR's which are not alternative SAR's. (b) Exercise. The holder of any SAR may elect to exercise his or her SAR; subject, however, to the limitations on time of exercise hereinafter set forth. Such SAR shall be exercised 6 7 by the delivery to the Company of a written notice which shall state that the optionee elects to exercise his or her SAR as to the number of shares specified in the notice and which shall further state what portion, if any, of the SAR exercise amount (hereinafter defined) the holder thereof requests be paid to him or her in cash and what portion, if any, he or she request be paid to him or her in Common Stock. The Committee promptly shall cause to be paid to such holder the SAR exercise amount either in cash, in Common Stock, or any combination of cash and stock as it may determine. Such determination may be either in accordance with the request made by the holder of the SAR or otherwise, in the sole discretion of the Committee. The SAR exercise amount is the excess of the fair market value of one share of the Common Stock on the date of exercise over the per option price for the option in respect of which the SAR was granted multiplied by the number of shares as to which the SAR is exercised. For the purposes hereof, fair market value of one share of the Common Stock on the date of exercise shall be the mean between the high and low prices of the Common Stock on the applicable exchange on such date; provided that, the Committee may adopt any other criterion for the determination of such fair market value as it may determine to be appropriate. (c) Other Provisions of Plan Applicable. All provisions of this Plan applicable to options granted hereunder shall apply with equal effect to SAR's. 15. Adjustments Upon Changes in Capitalization or Corporate Acquisitions. Notwithstanding any other provisions of the Plan, the option and SAR agreements may contain such provisions as the Committee shall determine to be appropriate for the adjustment of the number and class of shares subject to each outstanding option or SAR and the option prices and SAR exercise amounts in the event of changes in the outstanding Common Stock by reason of stock dividends, recapitalization, mergers, consolidations, split-ups, combinations or exchanges of shares and the like, and, in the event of any such change in the outstanding Common Stock, the aggregate number and class of shares available under the Plan and the maximum number of shares as to which options and SAR's may be granted to any individual shall be appropriately adjusted by the Committee, whose determination shall be conclusive. In the event the Company, a parent or a subsidiary enters into a transaction described in Section 424(a) of the Code with any other corporation, the Committee may grant options or SAR's to employees or former employees of such corporation in substitution of options or SAR's previously granted to them upon such terms and conditions as shall be necessary to qualify such grant as a substitution described in Section 424(a) of the Code. 16. Amendment and Termination. The Board of Directors may at any time terminate the Plan, or make such modifications to the Plan as it shall deem advisable; provided, however, that the Board of Directors may not, without further approval by the holders of Common Stock, increase the maximum numbers of shares as to which options or SAR's may be granted the Plan (except under the anti-dilution provisions in Section 15), or change the class of employees to whom options or SAR's may be granted, or withdraw the authority to administer the Plan from a committee whose members satisfy the requirements of Section 4. No termination or amendment of the Plan may, 7 8 without the consent of the optionee to whom any option or SAR shall theretofore have been granted, adversely affect the rights of such optionee under such option or SAR. 17. Effectiveness of the Plan. The Plan shall become effective upon adoption by the Board of Directors subject however, to its further approval by the shareholders of the Company given within twelve (12) months of the date the Plan is adopted by the Board of Directors at a regular meeting of the shareholders or at a special meeting duly called and held for such purpose. Grants of options or SAR's may be made prior to such shareholder approval but all option and SAR grants made prior to shareholder approval shall be subject to the obtaining of such approval and if such approval is not obtained, such options and SAR's shall not be effective for any purpose. 18. Time of Granting of Options or SAR's. An option or SAR grant under the Plan shall be deemed to be made on the date on which the Committee, by formal action of its members duly recorded in the records thereof, makes an award of an option or SAR to an eligible employee of the Company, a parent or a subsidiary (but in no event prior to the adoption of the Plan by the Board of Directors); provided that, such option or SAR is evidenced by a written option or SAR agreement duly executed on behalf of the Company and on behalf of the optionee within a reasonable time after the date of the Committee action. 19. Term of Plan. This Plan shall terminate ten (10) years after the date on which it is approved and adopted by the Board of Directors and no option or SAR shall be granted hereunder after the expiration of such ten-year period. Options or SAR's outstanding at the termination of the Plan shall continue in accordance with their terms and shall not be affected by such termination. * * * The foregoing Plan was approved and adopted by the Board of Directors on March 16, 2000. 8 EX-10.11 10 AGREEMENT FOR THE PURCHASE OF GOODS 1 EX. 10.11 Agreement No. BA17136 Page 1 of 18 AGREEMENT FOR THE PURCHASE OF GOODS THIS AGREEMENT by and between World Wide Technology, Inc., a corporation organized under the laws of Missouri with an office at 127 Weldon Parkway, St. Louis, Missouri 63043 (hereinafter called "Supplier"), and TELESECTOR RESOURCES GROUP, INC., a Delaware corporation with an office at 240 East 38th Street, New York, New York 10016 (hereinafter called "Bell Atlantic"). 1.0 SCOPE OF AGREEMENT 1.1 Scope. This Agreement sets forth the terms and conditions that will govern Supplier's sale to Bell Atlantic of the Products, inclusive of the appropriate software, firmware, and documentation [* Confidential treatment will be requested] ("the Products"). Bell Atlantic is not promising to purchase any quantity of Products from Supplier. Any estimates that Bell Atlantic may have provided to Supplier are not firm or binding unless otherwise specifically stated in this Agreement. This is not an exclusive dealings arrangement. 1.2 Bell Atlantic Affiliates. References in this Agreement to "Bell Atlantic Affiliates" shall include the following companies: Bell Atlantic Corporation, its subsidiaries and affiliates. Bell Atlantic may direct that Products be provided directly to a Bell Atlantic Affiliate. A Bell Atlantic Affiliate that obtains a Product directly under this Agreement, whether right to use or title passes directly to that entity or not, shall be entitled to all of the rights and benefits afforded to Bell Atlantic under this Agreement and may enforce this Agreement in its own name. When Products are shipped directly to an affiliate, Bell Atlantic shall be acting as an agent for that affiliate and title shall pass directly to that affiliate. 2.0 TERM OF THE AGREEMENT 2.1 Term. This Agreement shall be effective on January 28, 1999 and shall end January 31, 2002, provided that Bell Atlantic may extend the term of this Agreement for a period of up to 12 months, by giving Supplier written notice at least thirty (30) days prior to the expiration date. 2.2 Termination by Bell Atlantic. Notwithstanding any other provisions of this Agreement, Bell Atlantic may terminate this Agreement for convenience upon thirty 30 days notice to Supplier. 2.3 Termination by Supplier. Supplier may not terminate this Agreement, or cancel an Order(s) except for non-payment of the purchase price and then only if after thirty (30) days of receipt of written notice of non-payment, Bell Atlantic fails to pay such purchase price and thereupon Supplier issues its written notice of default and Bell Atlantic fails to pay such purchase price within ten (10) business days of receipt of such notice of default. In no way shall such termination act to impair Bell Atlantic's right, title and interest to the PRODUCT purchased hereunder, or its rights to Software which have been purchased hereunder. Not for use outside of Bell Atlantic or its affiliates without prior written permission *Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 Agreement No. BA17136 Page 1 of 18 2.3 Existing Orders Continue. The termination or expiration of this Agreement shall not affect the obligations of either party to the other under existing Orders issued pursuant to this Agreement (except to the extent orders are terminated or modified in accordance with the Section "ORDERS"), but such Orders shall continue in effects as if this Agreement had not been ended. 3.0 ORDERS 3.1 Orders Contents. Bell Atlantic shall purchase Products by issuing an Order that references this Agreement and sets forth the quantity of each Product being ordered; the time and place of delivery; the Order number; the date of the Order; the billing and delivery addresses; the required delivery date(s); the name and telephone number of the person to contact regarding shipping instructions; and any special terms and conditions relevant to the particular Order. (Special terms are those that are not preprinted. See the section below titled "ENTIRE AGREEMENT".) Supplier agrees that it will accept or reject any Order issued by Bell Atlantic under this Agreement within ten (10) days of receipt by Supplier. Supplier further agrees that if Bell Atlantic does not receive a rejection from Supplier of an Order within this ten (10) day period, Bell Atlantic may consider such failure as an acceptance of the Order. 3.2 Right to Cancel. Bell Atlantic may, by giving Supplier written notice, cancel all or part of an Order at any time prior to delivery of the Products. Bell Atlantic's liability to Supplier for the entire transaction shall be limited to reasonable non-recoverable out-of-pocket expenses that Supplier incurred as a result of Supplier's receipt of the Order and its full or partial cancellation. 3.3 Change Order. Bell Atlantic may, by issuing a written document labeled as a "Change Order," make changes to an Order. If any change required by a Change Order alters the value of the Products ordered, Supplier shall promptly notify Bell Atlantic and Supplier shall adjust the price accordingly. If the amount of the price adjustment is not specified in this Agreement, then the amount of any change in price caused by the adjustment may be no greater than Supplier's reasonable documentable increased costs and expenses. Supplier shall notify Bell Atlantic within three (3) business days of Supplier's receipt of a Change Order if the Change Order will cause an increase in price. Bell Atlantic may, at its discretion, agree to the changed price or withdraw the underlying Change Order. 4.0 DELIVERY 4.1 Timely Delivery. Unless otherwise indicated on an Order, Supplier must ship an entire order to the location indicated on an Order by the date specified. Supplier may not ship the Products more than one week in advance of the date specified without the prior written approval of Bell Atlantic. Bell Atlantic may require delivery within seven (7) calendar days of the date of an Order. If Bell Atlantic requests a faster delivery time, Supplier may: (1) fill the Order in that faster time period at the same price; (2) notify Bell Atlantic of any required premium prior to acceptance of the Order and receive approval or rejection of that price, provided that if the premium is rejected the Order shall be deemed canceled unless Bell Atlantic agrees to extend the delivery date; or (3) promptly notify Bell Atlantic that Supplier cannot supply the Product within the period requested, in which instance Bell Atlantic may cancel the Order and purchase the Not for use outside of Bell Atlantic or its affiliates without prior written permission 3 Agreement No. BA17136 Page 2 of 18 Product elsewhere or extend the required delivery date. Unless Supplier provides Bell Atlantic with written notice within three (3) days of Bell Atlantic's request for a faster delivery time that it cannot meet Bell Atlantic's faster date, Supplier must meet the faster date. 4.2 Late Delivery. If Supplier fails to meet the delivery schedule Supplier shall be in breach of this Agreement, and Bell Atlantic, without limiting any of its other rights or remedies, may direct that Supplier, at Supplier own expense, expedite routing or Bell Atlantic may seek to purchase Products from another supplier with Supplier being responsible for any increased costs. Bell Atlantic may, but shall not be obligated to, accept any untimely, excessive or incomplete shipments. Bell Atlantic may, at Supplier's risk and expense, return to Supplier or hold for disposition all or part of any such shipment. 4.3 Packing Memo; Shipping Papers. Supplier shall enclose a packing memorandum with each shipment. If Supplier ships more than one package, Supplier shall clearly mark the package containing the memorandum. Supplier shall prominently label each packing memorandum, shipment paper and package with the applicable Order number. When Supplier makes more than one shipment against an Order, Supplier must indicate the last shipment on the invoice and shipping papers accompanying the last shipment. 4.4 Routing. Product shall be shipped by Supplier, F.O.B., Destination Billed (DB), from Supplier's nearest facility capable of meeting Bell Atlantic's requirements using the most cost effective common carrier (rail, truck air or freight forwarder) with transportation charges prepaid by Supplier and added as a separate item to the invoice to be paid by Bell Atlantic. For shipments less than 150 pounds, Supplier shall use its approved small package transportation company. Deviations from these instructions must be authorized by Bell Atlantic's Transportation Organization. Excess transportation charges resulting from Supplier's failure to comply with these instructions will be billed back to Supplier. In no event will Bell Atlantic be liable for premium shipping modes unless previously authorized. Shipping and routing instructions may be altered, orally or in writing, as mutually agreed upon by Supplier and Bell Atlantic. If requested by Bell Atlantic, Supplier agrees to substantiate such charges by providing Bell Atlantic with the original freight bill or a copy thereof. When Bell Atlantic instructs Supplier to ship origin collect (OC), Supplier will ship Product via the carrier designated by Bell Atlantic. Supplier shall call Bell Atlantic's Transportation Organization on 703-974-6491 to obtain information regarding carrier designations. 4.5 Title; Risk of Loss. Title and risk of loss or damage to Product purchased by Bell Atlantic under this Agreement, or an Order issued pursuant to this Agreement, shall vest in Bell Atlantic when the delivery of the Product has been completed to the location specified in the Order. Delivery is not complete and Supplier shall retain risk of loss or damage for all Product until Bell Atlantic shall have inspected the shipping container(s) and verified that the Product received complies with the Order with respect to quantity and condition of the shipping container in which the Product is received. In the event that the shipment does not comply, title and risk of loss shall not pass to Bell Atlantic. In such circumstance, Bell Atlantic shall note any shortage and/or visible transportation damages on the shipping document and notify Supplier of same Not for use outside of Bell Atlantic or its affiliates without prior written permission 4 Agreement No. BA17136 Page 3 of 18 within seven (7) days of receipt of Product. Bell Atlantic shall cooperate with Supplier in the prosecution of loss or damage and resulting claim. 5.0 PRODUCT AND QUALITY SPECIFICATIONS 5.1 Specifications. The Products (including all pallets and packaging) shall meet all government and industry standards and specifications, as well as any standards and specifications that Supplier has published (unless previously rejected by Bell Atlantic) [* Confidential treatment will be requested]. 5.2 Defects. If Supplier receives information from one or more of Supplier's other customers which indicates that any Product may contain a defect including a defect in design or manufacture, that use of a Product may infringe upon the intellectual property rights of a third party, or that any Product may have a problem which could interfere with its intended use, Supplier will promptly notify Bell Atlantic of those defects or problems. 5.3 Defect Obligations. If any of Supplier's Products are discovered by Supplier or Bell Atlantic to be defectively designed or to contain a defect which could pose a threat to the health or safety of any Product user, the environment, or to the Bell Atlantic network, Supplier shall, in addition to any other remedy required by this Agreement or by law, recall all applicable Products and repair or replace them or provide a field fix which eliminates the danger posed by the defect. 5.4 Year 2000 - Representation and Warranty. In addition to and without limitation of any other right or remedy of Bell Atlantic, Supplier represents and warrants that all Products delivered hereunder will record, store, process, and present calendar dates falling on or after January 1, 2000, in the same manner, and with the same functionality, as such Products record, store, process and present calendar dates falling on or before December 31, 1999. Supplier further represents and warrants that in all other respects such Products shall not in any way lose functionality or degrade in performance as a consequence of such Products operating at a date later than December 31, 1999. Without limitation of the foregoing, Supplier's representative will consult with Bell Atlantic's designated representative for century date change requirements, to ensure that such Products will lose no functionality with respect to the introduction of records containing dates falling on or after January 1, 2000, and to ensure that such Products will be interoperable with other equipment used by Bell Atlantic which may deliver records to such Products, receive records from such Products from such Products, or interact with such Products in the course of processing data. * Confidential treatment will be requested Not for use outside of Bell Atlantic or its affiliates without prior written permission 5 Agreement No. BA17136 Page 4 of 18 * Confidential treatment will be requested 8.0 INVOICES AND NOTICES 8.1 Invoicing; Right to Set Off. Supplier shall send invoices to the person and address set forth on the front of the Order. Bell Atlantic shall pay the invoices within thirty (30) days from receipt date of the invoice or the delivery of the Product has been completed (as described in section 4.5 titled "Title; Risk of Loss") to the location specified in the Order, whichever occurs second. If Bell Atlantic disputes all or any portion of an invoice, it shall be required to pay only the amount not in dispute. [*Confidential treatment requested]. Bell Atlantic shall be entitled to set off any amount Supplier owes it against amounts payable under this or any other Agreement. Payment by Bell Atlantic shall not result in a waiver any of its rights under this Agreement. Bell Atlantic shall not be obligated to pay Supplier for Services that are not fully and properly invoiced. 8.2 Invoice Contents. Supplier shall provide in or with Supplier's invoice a detailed list of all charges which shall include: (1) the type, description, quantity and, where applicable, the serial numbers of the Products; (2) the basic charge for the Products, including a description of all applicable discounts; (3) a separate statement specifically listing all applicable taxes as well as transportation and other associated costs; (4) the dates Products were shipped; (5) the applicable Order number; and (6) any other information specified in the Order. Not for use outside of Bell Atlantic or its affiliates without prior written permission 6 Agreement No. BA17136 Page 1 of 18 9.0 AUDITS 9.1 Records. Supplier shall maintain, in accordance with standard recognized accounting practices, accurate and complete records that enable Supplier to demonstrate full compliance with this Agreement. Supplier shall maintain these records for a period ending four (4) years after the termination of this Agreement. 9.2 Audit. Supplier shall allow Bell Atlantic and its authorized agents and representatives to audit these records, during normal business hours, at any time during the term of this Agreement and the four (4) year period following the termination or expiration of this Agreement. Bell Atlantic shall be entitled to a refund for all amounts that the audit report finds Bell Atlantic overpaid to Supplier. Bell Atlantic shall bear the cost of these audits unless it is determined that Supplier overcharged Bell Atlantic for Products during the period of time for which the records were audited. 10.0 INSPECTIONS, TESTS AND ACCEPTANCE 10.1 Inspection. All Products are subject to final inspection and acceptance by Bell Atlantic or its agent at any time up to seven (7) days after delivery. Bell Atlantic's inspections and payments prior to delivery do not constitute final acceptance. If goods delivered do not conform with the requirements of this Agreement and the applicable Order, Bell Atlantic has the right to reject such Products. Bell Atlantic, at its option may, at Supplier's risk and expense, return to Supplier or hold for Supplier's deposition Products that Bell Atlantic has rejected in whole or in part. This remedy is in addition to any other available remedy. Supplier may not require any employee or representative to sign a release as a condition for conducting an inspection under this paragraph. 10.2 The Products to be furnished or delivered pursuant to Order(s) issued under this Agreement shall be subject to acceptance as follows: Bell Atlantic and/or its Affiliates will be granted up to a thirty (30) day period (Acceptance period) to test conformance with Specifications utilizing Supplier's standard acceptance test procedures and Bell Atlantic's and/or its Affiliates' own independent testing procedures as agreed upon. Upon successful completion of such tests, Bell Atlantic and/or its Affiliate(s) shall issue a Notice of Acceptance. In the event a Notice of Defects has been issued by Bell Atlantic and/or its Affiliate(s) Supplier shall ship a replacement Product(s) within twenty-four (24) hours of such notice. Upon delivery of such replacement Product(s) by Supplier, Bell Atlantic and/or its Affiliates(s) shall have the opportunity to retest the replacement Products. Time required for Bell Atlantic and/or its affiliates to retest the new Product(s) shall not apply the thirty (30) day period of Acceptance. 10.3 No Waiver. Neither the right of Bell Atlantic to inspect Products nor its failure to test Products prior to acceptance shall affect any rights of Bell Atlantic or a Bell Atlantic Affiliate under any provision of this Agreement. Not for use outside of Bell Atlantic or its affiliates without prior written permission 7 Agreement No. BA17136 Page 6 of 18 11.0 BELL ATLANTIC'S PROPERTY AND TOOLING 11.1 Bell Atlantic Ownership. Title to and the right to immediate possession of any property, including patterns, tools, molds, jigs, dies, information provided in tangible form or made for Supplier's performance under this Agreement, and any other equipment or material, furnished to Supplier or paid for by Bell Atlantic shall vest in Bell Atlantic. Supplier may not furnish any articles made therefrom to any other party without the prior written consent of Bell Atlantic. Supplier shall keep adequate records of such property and Supplier will safely store, protect, preserve, repair and maintain such property at Supplier's expense. 11.2 BELL ATLANTIC DISCLAIMER OF WARRANTIES. If Bell Atlantic allows Supplier to use any of Bell Atlantic's tools or equipment, such tools and equipment are supplied to Supplier "AS-IS" with no warranties whatsoever. BELL ATLANTIC EXPRESSLY DISCLAIMS ALL WARRANTIES, INCLUDING ANY WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. It is Supplier's responsibility to inspect the tools and equipment to assure that they are safe and fit for their intended purposes. Supplier shall indemnify and hold Bell Atlantic, as well as any Bell Atlantic Affiliate, harmless against any claims, demands and liabilities that result from Supplier's use of such tools and equipment, including, but not limited to, any claims, demands and liabilities resulting from defects or other failures of the tools and equipment, the inadequacy of a tool or equipment for a particular task or the failure to properly use any tool or equipment. * Confidential treatment will be requested 13.0 HAZARDOUS PRODUCTS OR COMPONENTS 13.1 Supplier Responsible. Supplier agrees to notify Bell Atlantic in writing and to supply an appropriate Material Safety Data Sheet (MSDS) to the Telesector Resources Group Integrated Technical Services Division, 221 E. 37th Street, 4th Floor, NY, NY 10016 as well as to the ship-to point, if any Product or component thereof is toxic or hazardous under any Federal, state or local law or if the Product is capable of constituting a hazard. Supplier shall be responsible to ensure that Products display all reasonable notices and warnings of foreseeable hazards. If any Products or containers would be or could be classified as hazardous or otherwise regulated waste Not for use outside of Bell Atlantic or its affiliates without prior written permission 8 Agreement No. BA17136 Page 7 of 18 at the end of its useful life, Supplier will advise Bell Atlantic in writing and provide Bell Atlantic with proper disposal instructions. 14.0 INDEMNIFICATION 14.1 Indemnification. Supplier agrees to indemnify, defend and hold Bell Atlantic and Bell Atlantic Affiliates harmless against any losses, damages, liabilities, claims or demands (including all costs, expenses and reasonable attorneys' fees on account thereof or in connection with any investigation or preparation related thereto or the enforcement of the indemnification provisions of this Agreement) (collectively, the "Indemnified Amounts") that may be made as a result of Supplier's actual or alleged acts or omissions including, but not limited to, claims made: (i) by anyone for infringement of any trademark, copyright, patent, trade secret or other intellectual property right relating to use or reproduction of Products or materials or services provided, developed, authored or originated by Supplier; (ii) by anyone for injuries (including death) to persons or damage to property (including theft) or other cause of action resulting from Supplier's acts or omissions or those of persons furnished by Supplier while performing work for Bell Atlantic pursuant to this Agreement or in connection with materials furnished by Supplier pursuant to this Agreement; (iii) by persons furnished by Supplier or any subcontractors based on employment contract, or federal, state or local laws prohibiting discrimination in employment, or (iv) by persons furnished by Supplier or any subcontractors under worker's compensation or similar acts; (v) in connection with the Products and services contemplated by this Agreement, including the manufacture, use, importation, offer for sale or sale of any Products, or resulting directly or indirectly from the Products or the performance of the services under this Agreement whether caused by the negligence of Supplier or anyone acting on behalf of Supplier; or (vi) under any federal securities laws, or under any other statute, at common law or otherwise, arising out of or in connection with the Products or services contemplated by this Agreement or any information obtained in connection with the performance hereunder. Bell Atlantic agrees to notify Supplier of any written claims or demands against Bell Atlantic for which Supplier is responsible hereunder and Bell Atlantic shall be entitled, at its option if Bell Atlantic is dissatisfied with Supplier's handling thereof, to assume the defense or settlement of any such claim. Supplier shall promptly reimburse Bell Atlantic for Indemnified Amounts as they are incurred. 15.0 IMPLEADER 15.1 No Impleader. Supplier agrees not to implead or bring any action against Bell Atlantic (including Bell Atlantic Affiliates), its successors, assigns, employees or officers based on any claim (i) by any Bell Atlantic (including any Bell Atlantic Affiliate) employee for personal injury or death that occurs in the course or scope of employment of such person or (ii) by any person furnished by Supplier under this Agreement based on employment contract, or federal, state or local laws prohibiting discrimination in employment. Not for use outside of Bell Atlantic or its affiliates without prior written permission 9 Agreement No. BA17136 Page 8 of 18 16.0 INSURANCE 16.1 Requirements. Supplier shall secure and maintain at its expense during the term of this Agreement (i) statutory workers' compensation and employers liability with limits of not less than $500,000; (ii) Commercial General Liability insurance, including but not limited to, products liability and completed operations, contractual liability, independent contractor, for a combined single limit of at least $1,000,000 per occurrence for bodily injury and property damage with a minimum policy aggregate of $2,000,000; and (iii) Comprehensive Automobile Liability insurance for a minimum combined single limit of $1,000,000 per occurrence. The insurer must be licensed to do business in the state in which the work is performed and must have Bests Rating "AX" or better. In addition to containing an endorsement naming Bell Atlantic Corporation and Telesector Resources Group, Inc as Additional Insured, the policies listed above shall contain a provision eliminating and removing any exclusion of liability for i) injury, including bodily injury and death, to an employee of the insured or of Bell Atlantic or ii) any obligation of the insured to indemnify, hold harmless, defend or otherwise make contribution to Bell Atlantic because the damage arising out of injury, including bodily injury and death, to an employee of Bell Atlantic. Furthermore, Bell Atlantic must receive at least thirty (30) days' notice of cancellation or modification of the above insurance. Certificates of insurance must be provided prior to any work being performed and must be kept in force during the term of this Agreement. It is also agreed that Supplier's policy is primary. 16.2 No Limitation. Supplier is responsible for determining whether the above minimum insurance coverages are adequate to protect its interests. The above minimum coverages do not constitute limitations upon Supplier's liability. 17.0 FORCE MAJEURE 17.1 Not Liable. Neither party shall be liable for defaults or delays due to any causes (such as strikes, wars, acts of sabotage or natural disasters, but not for acts which Supplier could have anticipated such as raw material price increases, shortages of raw materials, or an increase in demand for Products by third parties) that are beyond its control and that are not due to its acts or omissions (Force Majeures). 17.2 Notice and Options for Other Party. Each party shall promptly notify the other in case of a Force Majeure occurrence within five days after the beginning thereof, and the party receiving notice may, by providing notice to the other party at any time during the period covered by the Force Majeure, extend the time for performance, or cancel all or any unperformed part, of this Agreement. 18.0 TERMINATION 18.1 Bell Atlantic Right to Terminate. Bell Atlantic may terminate this Agreement as follows: (i) immediately upon notice in response to regulatory or legal concerns or any concerns that activities under this Agreement may endanger the health or safety of a person, the environment or the Bell Atlantic network; (ii) at any time upon ten (10) days' notice; or (iii) immediately upon Not for use outside of Bell Atlantic or its affiliates without prior written permission 10 Agreement No. BA17136 Page 9 of 18 notice for cause as follows: (a) for failure to perform, if Bell Atlantic first gave Supplier notice of breach and an opportunity to cure in seven days, or (b) based on Bell Atlantic's belief that Supplier has engaged in illegal, criminal or fraudulent conduct in connection with services performed or to be performed under this Agreement, or (c) the failure to pay its subcontractors or employees providing services under this Agreement, or (d) a change in control, or liquidation or insolvency of Supplier. Upon termination for cause, Supplier shall not be entitled to further payments under this Agreement, and for a material breach, Supplier shall immediately refund all amounts it received for the applicable Products. 18.2 Existing Orders. Any termination of this Agreement will not terminate the parties' obligations to each other under existing Orders unless Bell Atlantic terminates such in accordance with Section 3 titled ORDERS above. 19.0 RELATIONSHIP OF THE PARTIES 19.1 Independent Contractor. Supplier's relationship to Bell Atlantic and Bell Atlantic Affiliates shall be that of an independent contractor. Supplier shall be responsible for Supplier's own employees and labor relations. This Agreement does not make Supplier an agent, partner or joint venturer of Bell Atlantic or Bell Atlantic Affiliates. Accordingly, Supplier may not bind, or attempt to bind, Bell Atlantic or any Bell Atlantic Affiliate, to any third parties including, but not limited to, any labor organizations. Supplier shall be entirely responsible for its own actions. 19.2 Persons Furnished by Supplier. Supplier shall be responsible for the performance and actions of Supplier's employees, Supplier's subcontractors and others acting at Supplier direction or on Supplier behalf. Supplier will be deemed to have performed any act or omission of such persons under this Agreement and Bell Atlantic shall be entitled to all remedies available under this Agreement or at law. Nothing in this section shall be construed to prohibit Bell Atlantic or Bell Atlantic Affiliates from also seeking remedial action against the agent or employee for its act or omission. 20.0 GOVERNMENT CONTRACTS 20.1 Additional Requirements. If Supplier is informed that Products are being purchased, directly or indirectly, to satisfy a contract of the United States Government or any State or other governmental authority, then all terms and conditions required by law, regulation or by Government Contract with respect to the Products are incorporated herein by reference. In particular, Supplier agrees to comply with all Equal Employment Opportunity Requirements. 21.0 ADVERTISEMENTS AND USE OF TRADEMARKS 21.1 Prohibitions and Restrictions. Supplier shall not advertise or publish the fact that Supplier has furnished, or has contracted to furnish, to Bell Atlantic the goods or services covered by this Agreement without the prior written consent of Bell Atlantic. Supplier shall not use any trademark, trade name, trade dress or any name, picture or logo which is commonly Not for use outside of Bell Atlantic or its affiliates without prior written permission 11 Agreement No. BA17136 Page 10 of 18 identified with Bell Atlantic or any Bell Atlantic Affiliates without the express written permission of Bell Atlantic. 21.2 Product Markings. If Bell Atlantic requires or allows Supplier to place any marking or name on Products, Supplier shall ensure that the name or marking is only placed on Products covered by this Agreement. Supplier shall completely remove the marking or name from any Products upon which the name or marking was placed but which are not sold to or accepted by Bell Atlantic. 22.0 INTELLECTUAL PROPERTY AND INFORMATION 22.1 Intellectual Property. 22.1.1 Software License. Supplier grants to Bell Atlantic a perpetual, non-exclusive and irrevocable license for the use of firmware contained within the Product ordered hereunder and software ("Software"). Under such license, Bell Atlantic is authorized to use, execute and operate the Software, in whole or in part, on any computer system or processor on which the Software will function, and on any number of computer systems or processors, provided the use, execution or operation is in the normal course of business; notwithstanding anything to the contrary in the Agreement, use by or for Bell Atlantic's direct or lower tier customers, as incident to, arising out of, or as reasonably necessary to comply with, the Telecommunications Act of 1996 or any FCC orders implementing same, or any similar unbundling or interconnection requirements imposed by any state or local public service authority shall be deemed to be use, execution or operation in the normal course of business and shall be included, without additional charge, within the scope of the license granted under this Agreement. Supplier also grants to Bell Atlantic the right to transfer such license to its Affiliates. No such transfer shall release Bell Atlantic from its obligations hereunder. There is no additional fee beyond the Product purchase price for the licenses granted hereunder. Supplier warrants that it has all rights required to grant the licenses ordered hereunder. 22.1.1.1 Irrevocable Software License. In the event Bell Atlantic fails to meet its uncontested payment obligations in connection with Products provided by Supplier, Supplier may cancel only the license for Software contained within the Product for which payment has not been made. In no way shall such cancellation act to terminate, cancel or otherwise impair Bell Atlantic's rights under this agreement for Software which has been purchased and paid for. In the event Bell Atlantic otherwise breaches the license, Supplier may be entitled to seek damages which result from such breach and to injunctive relief intended to end the breach; provided however that no such injunction, nor the payment of damages, shall enjoin or have the effect of enjoining the use of the Software in accordance with the terms and conditions of the license nor act to otherwise impair Bell Atlantic's rights to Software which have been purchased hereunder. 22.1.2 Infringement. Supplier acknowledges that Bell Atlantic is a provider of telecommunications services and does not manufacture any of the component parts of its Not for use outside of Bell Atlantic or its affiliates without prior written permission 12 Agreement No. BA17136 Page 11 of 18 network. Supplier further acknowledges that Bell Atlantic intends to use Supplier's Products in combination with Suppliers' other products and the products of others. As a consequence, Bell Atlantic's decision to deploy Supplier's Products within its network is made in reliance on Supplier's assurance that such use of Products does not infringe the intellectual property rights of others. Furthermore, Bell Atlantic requires that Supplier will indemnify, hold harmless and defend Bell Atlantic from and against any loss, cost, damage, claim, expense or liability that may arise out of, or result by reason of such infringement or claim of infringement, whether arising out of Bell Atlantic's use of such Products or the acts of Supplier. However, if it is determined that the Products were made infringing as a result of modification(s) made by Bell Atlantic, without Supplier's written consent, or by modification(s) made at Bell Atlantic's direction by Supplier, then the foregoing indemnity shall not apply. In the event Supplier's Products is found to be infringing, Bell Atlantic requires Supplier to make every effort to license, modify or replace the infringing Products to avoid removal of such Products from Bell Atlantic's network. In the event Supplier is unable to license, modify or replace the infringing Products and Bell Atlantic must remove the infringing Products from its network, Supplier shall provide a full refund of the purchase price of such Products. 22.2 Information. 22.2.1 Information Defined. The term "Information" includes: programs and related documentation; specifications, drawings, models, technical and business data and plans; works of authorship and other creative works; and ideas, knowledge and know-how. Information may be transmitted in writing (or other tangible form) or orally. 22.2.2 No Supplier Confidential Information. No Information Supplier provides to Bell Atlantic (even if labeled or otherwise designated as proprietary or confidential) shall be considered by Bell Atlantic to be confidential or proprietary. 22.2.3 Bell Atlantic Information. Information that Bell Atlantic furnishes to Supplier or that Supplier otherwise comes into contact with under this Agreement will remain Bell Atlantic property. Supplier will return such Information to Bell Atlantic upon termination of the Agreement or at Bell Atlantic's earlier request. Unless such Information was previously known to Supplier free of any obligation to keep it confidential or is made public by Bell Atlantic or a third party without breach of any agreement, Supplier will keep the Information confidential and use it only in performing this Agreement. 22.2. Work Product. The entire right, title and interest in all edits, original inventions and works of authorship created by Supplier, or on Supplier's behalf, for Bell Atlantic or furnished to Bell Atlantic hereunder or in relation to the Products shall be transferred to and vested in Bell Atlantic. All such works shall be considered to be made for hire. Supplier agrees to provide documentation and to sign all documents prepared or supplied by Bell Atlantic which Bell Atlantic believes are necessary to ensure the conveyance of all such right, title and interest, including patent, trademark and copyright, to Bell Atlantic. Not for use outside of Bell Atlantic or its affiliates without prior written permission 13 Agreement No. BA17136 Page 12 of 18 22.2.5 No Supplier Licenses. Bell Atlantic does not grant Supplier any license, express or implied, under any patent, copyright, trademark, trade secret or otherwise, except for the sole purposes of Supplier's performance of this Agreement. 23.0 COMPLIANCE WITH LAWS 23.1 Supplier Obligations. Supplier agrees, in connection with the performance of this Agreement, to comply with all applicable federal, state or local laws and regulations, including, but not limited to, all applicable requirements of the Fair Labor Standards Act, as amended, and of regulations and orders of the United States Department of Labor issued thereunder and the Foreign Corrupt Practices Act of 1977, as amended. Supplier agrees that it will not discriminate against any employee or applicant for employment on account of race, color, religion, sex, disability or national origin and will comply with the terms of the Non-Discrimination Compliance Undertaking attached as Exhibit B hereto and made a part of this Agreement. Supplier has, and shall maintain during the term of this Agreement, all known permits or other appropriate records that may be required by law. Notwithstanding any other provisions of this Agreement, Supplier shall not export, directly or indirectly (including to foreign nationals present in the United States), any United States source technical data to any country outside the United States which export may be in violation of the United States Export Control Laws and Regulations. 24.0 PLANT RULES 24.1 Bell Atlantic Rules; No Hazardous Materials. Supplier is responsible for ensuring that all of Supplier's employees, agents, subcontractors or other persons furnished by Supplier: (1) comply with all plant rules, regulations and security procedures; and (2) work in harmony with all others working on the property of Bell Atlantic and Bell Atlantic Affiliates. If Supplier installs any Products on the premises of Bell Atlantic or a Bell Atlantic Affiliates, Supplier shall be responsible for promptly removing all packing materials and debris. Supplier may not bring any toxic or hazardous materials onto any premises of Bell Atlantic or a Bell Atlantic Affiliate without the permission of Bell Atlantic, and Supplier shall be responsible for removing any such toxic or hazardous materials in accordance with all relevant laws and any additional requirements of Bell Atlantic. 25.0 ASSIGNMENT 25.1 No Supplier Assignment. Supplier may not assign any right or interest under this Agreement or an Order issued pursuant to this Agreement or delegate any work or other obligation owed by Supplier under this Agreement without first obtaining the written permission of Bell Atlantic, which Bell Atlantic may refuse in its sole discretion. Any attempted assignment or delegation in contravention of this section shall be void and ineffective. 25.2 Bell Atlantic Assignment. Bell Atlantic may freely assign all or part of this Agreement. Not for use outside of Bell Atlantic or its affiliates without prior written permission 14 Agreement No. BA17136 Page 13 of 18 26.0 GOVERNING LAW 26.1 State Law and Forum. The validity, interpretation and performance of this Agreement shall be governed by the procedural and substantive laws of the state of New York without regard to conflict of laws. All actions under this Agreement shall be brought in a court of competent subject matter jurisdiction in the County of New York in the State of New York and both parties agree to accept the personal jurisdiction of such court. 27.0 NON-WAIVER 27.1 No Waiver. No course of dealing or failure of either party to strictly enforce the terms and conditions of this Agreement shall be construed as a waiver of the future performance of that term or condition. 28.0 SEVERABILITY 28.1 Unenforceable Terms Severed. In the event that one or more provisions contained in this Agreement are for any reason held to be unenforceable in any respect, such unenforceability shall not affect any other term or condition of this Agreement and this Agreement shall be construed as if the unenforceable provision was not contained in this Agreement. 29.0 NOTICES 29.1 Method. All notices and other communications made under this Agreement shall be effective when received by the other party at the address specified in an Order, or if not specified in a n Order, at the address set forth below. Notices must be sent by certified or registered mail (return receipt requested) or to the telecopier number set forth below. The parties may, by providing seven days' written notice, modify the addresses set forth below. Notices to Bell Atlantic shall be sent to: Bell Atlantic 1320 N. Court House Road, 4th floor Arlington, VA 22201 Attn: Director, Corporate Sourcing, Switching Telecopier No. (703) 974-1118 with a copy to: Bell Atlantic Legal Department 1095 Avenue of the Americas New York, NY 10036 Telecopier No. (212) 840-1110 Not for use outside of Bell Atlantic or its affiliates without prior written permission 15 Agreement No. BA17136 Page 14 of 18 Notices to Supplier shall be sent to: World Wide Technology, Inc. 127 Weldon Parkway St. Louis, MO 63043 Attn: Director, Network and Communications Telecopier No. (314) 919-1630 30.0 STATE TAXES 30.1 Exemptions. Bell Atlantic may certify in an Order that a Product covered by that Order is (i) (NT-1) for resale; (ii) (NT-2) for resale as a physical or component part of tangible personal property or taxable services; (iii) (NT-3) for direct use in research and development; (iv) (NT-4) for temporary storage for subsequent use solely outside the state; (v) (NT-5) specifically exempt under tax law. In those cases, Bell Atlantic will be responsible for any applicable sales or use tax under the license or registration numbers of the taxing jurisdictions listed: Connecticut-6219745-000; Maine-F300981; Massachusetts-133-180-910; New York-13-3180910; Rhode Island X4624; and Vermont-13-3180910. Bell Atlantic WILL FURNISH TAX EXEMPT CERTIFICATES UPON REQUEST. 31.0 CAPTIONS AND INTERPRETATIONS 31.1 Convenience Only. The captions of sections in this Agreement are for convenience only and may not accurately or fully describe all of the requirements of a section. The captions do not limit or modify the terms of this Agreement or any section of this Agreement. 31.2 Reasonable Consent. Whenever the provisions of this Agreement require one party to obtain the permission or consent of the other party, unless specified otherwise, the party from whom the consent or permission is needed must act reasonably in granting or withholding such consent. 32.0 GIFTS AND GRATUITIES AND CONFLICTS OF INTEREST 32.1 Certification. Supplier certifies that, to the best of Supplier's knowledge and belief, no economic, beneficial, employment or managerial relationship exists between Supplier and any employee of Bell Atlantic or Bell Atlantic Affiliates, or between Supplier and any relative of an employee of Bell Atlantic or any Bell Atlantic Affiliates, which would tend in any way to influence such employee in the performance of his or her duties on behalf of Bell Atlantic or Bell Atlantic Affiliates in connection with the awarding, making, amending or making determinations concerning the performance of this or any other agreement. 32.2 No Gratuities. The exchange or offering of any money, gift item, personal service, entertainment or unusual hospitality by Supplier to Bell Atlantic and Bell Atlantic Affiliates is expressly prohibited. This prohibition is equally applicable to both party's officers, employees, agents or immediate family members. Any violation of this provision constitutes a material breach of this Agreement. Not for use outside of Bell Atlantic or its affiliates without prior written permission 16 Agreement No. BA17136 Page 15 of 18 32.3 Bell Atlantic Right To Terminate. Bell Atlantic may, by written notice to Supplier, terminate Supplier's right to proceed under this Agreement without any liability whatsoever on the part of Bell Atlantic if Bell Atlantic finds: (a)that Supplier has violated the certification contained in this section regarding any conflict of interest; or (b)that gratuities (as discussed in this section) were offered or given by Supplier, or any of Supplier's agents or representatives, to any officer or employee of Bell Atlantic or Bell Atlantic Affiliates awarding, making, amending an agreement or securing favorable treatment with respect to the performance of such agreement. 32.4 Remedies. In the event this Agreement is terminated as provided in this section, Bell Atlantic shall be entitled to pursue the same remedies against Supplier as it could pursue in the event of a breach of the Agreement by Supplier. 32.5 Cumulative Remedies. The rights and remedies of Bell Atlantic in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this Agreement. 33.0 SURVIVAL OF OBLIGATIONS 33.1 Continue Beyond Agreement. Supplier's obligations under this Agreement, which by their nature would continue beyond the termination, cancellation or expiration of this Agreement, shall survive termination, cancellation or expiration of this Agreement. 34.0 INFORMAL MANAGEMENT ESCALATION 34.1 Informal Management Escalation. Should any disagreement, dispute, disputed claim of breach, nonperformance, or repudiation arising from, related to or connected with this Agreement or any of the terms and conditions hereof, or any transactions hereunder ("Dispute") arise between Bell Atlantic and Supplier either during this Agreement or after termination of this Agreement, either party may give to the other notice of the Dispute, specifically referencing this provision and request resolution of the Dispute. At the expiration of ten (10) business days, unless it shall have been settled, such Dispute may be referred by either party to the Bell Atlantic Sourcing Director and Supplier Supplier's Contact for resolution. The parties agree to exchange relevant information and cooperate in good faith to resolve the Dispute under this provision. If within an additional ten (10) business days, such dispute shall not have been settled the parties shall have the right to pursue such remedies as may be available at law or in equity. The parties will not be prohibited from seeking injunctive relief to preserve the status quo pending resolution under this provision. 34.2 Settlement Purposes. ALL DISCUSSIONS AND DOCUMENTS PREPARED PURSUANT TO ANY ATTEMPT TO RESOLVE A DISPUTE UNDER THIS PROVISION ARE CONFIDENTIAL AND FOR SETTLEMENT PURPOSES ONLY AND SHALL NOT BE ADMITTED IN ANY COURT OR OTHER FORUM AS AN ADMISSION OR OTHERWISE Not for use outside of Bell Atlantic or its affiliates without prior written permission 17 Agreement No. BA17136 Page 16 of 18 AGAINST A PARTY FOR ANY PURPOSE INCLUDING THE APPLICABILITY OF FEDERAL AND STATE COURT RULES. 35.0 PERIODIC REPORTS Supplier agrees to render on or before the tenth day of the succeeding month, at no charge to Bell Atlantic and in formats acceptable to Bell Atlantic, a report of Bell Atlantic's purchasing activity hereunder. The format of this report shall be mutually agreed upon by both parties. This report will identify at a minimum: (i) the ship to location, (ii) Bell Atlantic's Order number, (iii) company placing order, (iv) order date, (v) agreed to ship date, (vi) actual ship date, for completed orders, (vii) quantity and configuration of Product(s) ordered and shipped, (viii) dollar value for each order, and (ix) total dollar value for the report month. Supplier's report shall be mailed to: Bell Atlantic Network Services, Inc. ATTN: Mr. Lin Kerns 1320 N. Courthouse Rd., 4E1 Arlington, VA 22201 36.0 ACTIVITIES DONE BY OTHERS If any part of the obligations of Supplier under this Agreement are dependent upon activities done by others, Supplier shall promptly report to Bell Atlantic any occurrence in these activities that may jeopardize Supplier's proper performance hereunder. Supplier's silence shall constitute approval of activities done by others as fit, proper, and suitable for Supplier's performance under this Agreement. 37.0 ENTIRE AGREEMENT 37.1 Entirety. This Agreement constitutes the entire agreement between the parties and shall not be modified or rescinded, except as is specifically set out in the Agreement or by a writing signed by Supplier and Bell Atlantic. The printed provisions on the reverse of a Bell Atlantic Order and all provisions on Supplier's forms shall be deemed rejected by Bell Atlantic, and shall be void and of no effect. The provisions of this Agreement supersede any and all prior oral and written quotations, agreements, and understandings of the parties with respect to the subject matter of this Agreement. Not for use outside of Bell Atlantic or its affiliates without prior written permission 18 Agreement No. BA17136 Page 17 of 18 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written. WORLD WIDE TECHNOLOGY, INC. BELL ATLANTIC NETWORK SERVICES, INC. /s/ Mark J. Catlano /s/ Paul M. Tassinari - ---------------------------------- ----------------------------------- Signature Signature Mark J. Catlano Paul M. Tassinari - ---------------------------------- ------------------------------- Typed Name Typed Name Director - Telco Business Unit for Vice President, Corporate Secretary - ---------------------------------- ----------------------------------------- Title Title January 28, 1999 January 28, 1999 - ---------------------------------- ------------------------------ Date Date Not for use outside of Bell Atlantic or its affiliates without prior written permission 19 Agreement No. BA17136 Page 1 of 1 *Confidential treatment will be requested 20 Agreement No. BA17136 Exhibit B Page 1 of 4 EXHIBIT B NON-DISCRIMINATION COMPLIANCE UNDERTAKING - ------------------------------------------------------------------------------ To the extent that this contract is subject to them, Supplier shall comply with the applicable provisions of the following: Exec. Order No. 11246, Exec. Order No. 11625, Exec. Order No. 12138, Exec. Order No. 11701, Exec. Order No. 11758, Section 503 of the Rehabilitation Act of 1973 as amended by PL93-516, Vietnam Era Veteran's Readjustment Assistance Act of 1974 and the rules, regulations and relevant Orders of the Secretary of Labor pertaining to the Executive Orders and Statutes listed above. Monetary amounts or contractual or purchasing relationships, together with the number of the Supplier's employees, determine which Executive Order provisions are applicable. For contracts and orders valued at less than $2,500, none of the clauses shall be considered a part of the contract. However, for contracts or orders of/or which aggregate to $2,500 or more annually, the following table describes the clauses which are included in the contract or order: 1. Inclusion of the "Equal Employment Opportunity" clause in all contracts and orders. 2. Certification of non-segregated facilities. 3. Certification that an Affirmative Action program has been developed and is being followed. 4. Certification that an annual Employers Information Report (EEO-1 Standard form 100) is being filed. 5. Inclusion of the "Utilization of Minority and Women's Business Enterprises" clause in all contracts and orders. 6. Inclusion of the "Minority and Women's Business Subcontracting Program" clause in all contracts and orders. 7. Inclusion of the "listing of Employment Openings" clause in all contracts and orders. 8. Inclusion of the "Employment of the Handicapped" clause in all contracts and orders. $2,500 TO $5,000 $5,000 TO $10,000 $10,000 TO $50,000 $50,000 TO $500,000 8 8 1, 2, 5, 6, 7, 8 1, 2, 3*, 4*, 5, 6, 7, 8 $500,000 OR MORE 1, 2, 3*, 4*, 5, 6, 7, 8
* Applies only for business with 50 or more employees Not for use outside of Bell Atlantic or its affiliates without prior written permission 21 Agreement No. BA17136 Exhibit B Page 2 of 4 1. EQUAL EMPLOYMENT OPPORTUNITY PROVISIONS In accordance with Executive Order 11246, dated September 24, 1965 and part 60-1 of Title 41 of the Code of Federal Regulations (Public Contracts and Property Management, Office of Federal Contract Compliance, Obligations of Suppliers and Subcontractors), as may be amended from time to time, the parties incorporate herein by this reference the regulations and contract clauses required by those provisions to be made a part of Government contracts and subcontracts. 2. CERTIFICATION OF NON-SEGREGATED FACILITIES The Supplier certifies that it does not and will not maintain any facilities it provides for its employees in a segregated manner, or permit its employees to perform their services at any location under its control, where segregated facilities are maintained; and that it will obtain a similar certification, prior to the award of any non-exempt subcontract. 3. CERTIFICATION OF AFFIRMATIVE ACTION PROGRAM The Supplier affirms that it has developed and is maintaining an Affirmative Action Plan as required by Part 60-2 of Title 41 of the Code of Federal Regulations. 4. CERTIFICATION OF FILING OF EMPLOYERS INFORMATION REPORTS The Supplier agrees to file annually on or before the 31st day of March complete and accurate reports on Standard Form 100 (EEO-1) or such forms as may be promulgated in its place. 5. UTILIZATION OF MINORITY AND WOMEN'S BUSINESS ENTERPRISES A. It is the policy of the Government that minority and women's business enterprises shall have the maximum practicable opportunity to participate in the performance of the contract. B. The Supplier agrees to use its best efforts to carry out this policy in the award of its subcontracts to the fullest extent consistent with the efficient performance of this contract. As used in the contract the term "minority or women's business enterprise" means a business, at least 50 percent of which is owned, controlled and operated by minority group members or women, or in the case of publicly owned businesses, at least 51 percent of its stock is owned by minorities or women. For the purposes of this definition, minority group members are American: Blacks, Hispanics, Asians, Pacific Islanders, American Indians and Alaskan Natives. Supplier may rely on written representation by subcontractors regarding their status as minority or women's business enterprises in lieu of an independent investigation. 6. MINORITY AND WOMEN'S BUSINESS ENTERPRISES SUBCONTRACTING PROGRAM Not for use outside of Bell Atlantic or its affiliates without prior written permission 22 Agreement No. BA17136 Exhibit B Page 3 of 4 A. The Supplier agrees to establish and conduct a program which will enable minority and women's business enterprises (as defined in Paragraph 5) to be considered fairly as subcontractors and suppliers under the contract. In this connection, the Supplier shall: 1. Designate a liaison officer who will administer the Supplier's minority and women's business enterprises in all "make or buy" decisions. 2. Provide adequate and timely consideration of the potentialities of known minority and women's business enterprises in all "make and buy" decisions. 3. Assure that known minority and women's business enterprises will have an equitable opportunity to compete for contracts, particularly by arranging solicitations, time for preparation of bids, quantities, specifications, and delivery schedules so as to facilitate the participation of minority and women's business enterprises. 4. Maintain record showing (i) procedures which have been adopted to comply with the policies set forth in this clause, including the establishment of a source list of minority and women's business enterprises, (ii) awards to minority and women's business enterprises on the source list, and (iii) specific efforts to identify and award contracts to minority and women's business enterprises. 5. Include the Utilization of Minority and Women's Business Enterprises clause in subcontracts which offer substantial minority and business women's business enterprises subcontracting opportunities. 6. Cooperate with the Government's Contracting Officer in any studies and surveys of the Supplier's minority and business enterprises procedures and practices that the Contract Officer may from time to time conduct. 7. Submit periodic reports of subcontracting to known minority and women's business enterprises with respect to the records referred to in subparagraph 4 above, in such a form and manner and at such time (not more than quarterly) as the Contracting Officer may prescribe. B. The Supplier further agrees to insert, in any subcontract hereunder which may exceed $500,000 (or in the case of M/WBE, $1,000,000 in the case of contracts for construction of any Public facility and which offer substantial subcontracting possibilities) provisions which shall conform substantially to the language of this agreement, including this paragraph (B). 7. LIST OF EMPLOYMENT OPENINGS FOR VETERANS In accordance with Exec. Order 11701, dated January 24, 1973 and Part 60-250 of Title 41 of the Code of Federal Regulations, as may be amended from time to time, the parties incorporated herein by this reference the regulations and contract clauses required by those provisions to be made part of Government contracts and subcontracts. Not for use outside of Bell Atlantic or its affiliates without prior written permission 23 Agreement No. BA17136 Exhibit B Page 4 of 4 8. EMPLOYMENT OF THE HANDICAPPED In accordance with Exec. Order 11758, dated January 15, 1974, and Part 60-741 of Title 41 of the Code of Federal Regulations as may be amended from time to time, the parties incorporated herein by this reference the regulations and contract clauses required by those provisions to be made a part of Government contracts and subcontracts. Not for use outside of Bell Atlantic or its affiliates without prior written permission EX-10.12 11 PRODUCT PURCHASE AGREEMENT 1 EX. 10.12 AGREEMENT NO. C971312BC002 PRODUCT PURCHASE AGREEMENT BETWEEN GTE COMMUNICATION SYSTEMS CORPORATION AND WORLD WIDE TECHNOLOGY, INC. CONTRACT MANAGER: KATHY DEFORD, C.P.M. CONFIDENTIAL *Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 TABLE OF CONTENTS
PAGE 1. PARTIES......................................................................................................1 2. TERM.........................................................................................................1 3. PURCHASE AND DISTRIBUTION OF PRODUCT.........................................................................1 4. SOFTWARE LICENSE.............................................................................................2 5. CENTURY COMPLIANCE...........................................................................................3 *Confidential treatment will be requested 7. PURCHASE ORDERS; CANCELLATION OF PURCHASE ORDERS; REVOCATION OF ACKNOWLEDGEMENT...................................................................................................4 8. BILLING AND PAYMENT TERMS....................................................................................5 *Confidential treatment will be requested *Confidential treatment will be requested 11. RECORDS AND REPORTS..........................................................................................6 12. BAR CODING...................................................................................................6 13. ELECTRONIC DATA INTERCHANGE..................................................................................6 14. PRECEDENCE OF DOCUMENTS......................................................................................6 15. DELIVERY.....................................................................................................7 16. PACKAGING....................................................................................................8 17. BILL OF SALE.................................................................................................8 18. INSPECTION AND ACCEPTANCE....................................................................................9 19. PRODUCT STANDARDIZATION......................................................................................9 *Confidential treatment will be requested 21. TRADEMARK LICENSE............................................................................................9 22. INFRINGEMENT................................................................................................10 23. CONFIDENTIAL INFORMATION....................................................................................10
i CONFIDENTIAL 3 24. PUBLICITY AND DISCLOSURE....................................................................................12 25. COMPLIANCE WITH LAWS........................................................................................13 26. FORCE MAJEURE...............................................................................................14 27. ASSIGNMENT..................................................................................................14 28. TAXES.......................................................................................................15 29. PLANT AND WORK RULES AND RIGHT OF ACCESS....................................................................15 30. INDEMNIFICATION AND INSURANCE...............................................................................16 31. RELATIONSHIP OF PARTIES.....................................................................................17 32. TOXIC SUBSTANCES AND HAZARDOUS PRODUCT......................................................................17 33. TERMINATION.................................................................................................17 34. DISPUTE RESOLUTION..........................................................................................18 35. NOTICES.....................................................................................................19 36. LABOR SERVICES..............................................................................................20 37. NONWAIVER...................................................................................................21 38. SEVERABILITY................................................................................................21 39. SECTION HEADINGS............................................................................................21 40. SURVIVAL OF OBLIGATIONS.....................................................................................21 41. CHOICE OF LAW AND JURISDICTION..............................................................................21 42. ENTIRE AGREEMENT............................................................................................21
SIGNATURES EXHIBIT A: GTE AFFILIATED ENTITIES EXHIBIT B: ii CONFIDENTIAL 4 EXHIBIT C: BAR CODING EXHIBIT D: EDI PURCHASE ORDERS EXHIBIT E: SHIPPING AND CARRIER ROUTING INSTRUCTION EXHIBIT F: PRODUCT DELIVERY INTERVAL EXHIBIT G: STANDARDIZATION POLICIES, PROCEDURES AND TERMS EXHIBIT H: [*Confidential treatment requested]. EXHIBIT I: CENTURY COMPLIANCE iii CONFIDENTIAL 5 PRODUCT PURCHASE AGREEMENT 1. PARTIES (a) This Product Purchase Agreement (Agreement) is made between World Wide Technology, Inc., a Missouri corporation, with offices at 127 Weldon Parkway, St. Louis, Missouri 63043-3101 (SELLER) and GTE Communication Systems Corporation, a Delaware corporation, acting through its GTE Supply Division, with offices at 700 Hidden Ridge, Irving, Texas 75038, for the benefit of itself and the GTE affiliated entities (AFFILIATES) listed in Exhibit A (CUSTOMER), which may be changed by CUSTOMER upon written notice to SELLER. (b) CUSTOMER or AFFILIATES may purchase SELLER's products (PRODUCT), [*Confidential treatment requested], on a nonexclusive basis from SELLER on the same terms and conditions as CUSTOMER and an AFFILIATE shall also be a CUSTOMER under this Agreement. 2. TERM This Agreement shall be effective on November 1, 1997, and shall continue for a period of five (5) years unless earlier terminated or modified. This Agreement shall be automatically terminated unless renewed by CUSTOMER with at least thirty (30) days' written notice to SELLER before the expiration of the term. 3. PURCHASE AND DISTRIBUTION OF PRODUCT (a) This Agreement does not by itself order any PRODUCT. CUSTOMER shall order PRODUCT by submitting a purchase order to SELLER in accordance with Section 7, PURCHASE ORDERS; CANCELLATION OF PURCHASE ORDERS; REVOCATION OF ACKNOWLEDGEMENT and Section 13, ELECTRONIC DATA INTERCHANGE. If a purchase order submitted by CUSTOMER to SELLER (i) conforms to the requirements of Section 7, PURCHASE ORDERS; CANCELLATION OF PURCHASE ORDERS; REVOCATION OF ACKNOWLEDGEMENT and Section 13, ELECTRONIC DATA INTERCHANGE, (ii) CONTAINS A PRODUCT or within the guidelines for PRODUCT quantities and for the price or prices specified in [*Confidential treatment requested] and (iii) does not purport to make a material change to any of the terms of this Agreement applicable to such PRODUCT purchase order (including a material change in the items enumerated in Section 14.(a)(i-x)), SELLER shall be obligated to acknowledge the purchase order within ten (10) days of receipt, without conditioning such acknowledgement on the acceptance by CUSTOMER of any terms inconsistent with or in addition to those set forth in this Agreement. Upon acknowledgement, a purchase order and the related acknowledgement shall constitute a binding contract for the purchase and sale of the applicable PRODUCT governed by the provisions of this Agreement, as such provisions may be modified as provided herein. Under special circumstances, PRODUCT may be purchased pursuant to the terms of this Agreement at prices quoted by SELLER in response to a specific request from CUSTOMER. CONFIDENTIAL 6 (b) CUSTOMER may purchase the PRODUCT for its own use or for resale. (c) This Agreement is nonexclusive and shall not be construed to (i) require CUSTOMER to purchase any specific amount of PRODUCT, or (ii) require CUSTOMER to sell any, all or a portion of PRODUCT it orders, or (iii) unless otherwise specified in this Agreement, restrict the purchase, resale and/or distribution of PRODUCT to any geographic area. 4. SOFTWARE LICENSE If the PRODUCT includes software, SELLER grants to CUSTOMER a license under the following terms: (a) Definitions (1) The term "Software" means any Software programs, in source, object, or other form, including firmware and documentation [*Confidential treatment requested], or identified in a purchase order. (2) The term "Use" shall mean: (i) the reading by any authorized users into or out of computer hardware memory of the Software and the execution of the Software whether in whole or in part by any individual having authorized access to any computer on which the Software is operated and shall include employees of CUSTOMER, its agents, or contractors and/or in the case of CUSTOMER providing services to third parties, the third parties' employees, agents, or contractors; (ii) to transfer into, and store in, equipment selected by the CUSTOMER all or any portion of the Software; (iii) to compile and decompile, assemble or disassemble, or otherwise transform the Software form source, object or other form into source, object or other form; (iv) and to process and execute instructions, statements and data included in, or input to, the Software. (3) The Term "Specifications" shall mean specifications for the Software as set forth in a purchase order, as well as SELLER's then current published specifications and user documentation for the Software. (b) The term PRODUCT includes any Software (operating program in machine readable form and feature descriptions or firmware) furnished with or embedded in PRODUCT. Title to such Software shall remain with manufacturer. SELLER warrants that manufacturer has granted to SELLER a nonexclusive, nontransferable license to grant a nonexclusive, nontransferable sublicense to CUSTOMER of SELLER and to any subsequent purchaser, assignee or lessee from such CUSTOMER of the PRODUCT in which or with which such Software is furnished. For the life or purchased PRODUCT, or during the term PRODUCT is leased, as applicable, SELLER grants to CUSTOMER and any subsequent purchaser, assignee, or lessee of said PRODUCT a nonexclusive license to use said Software in connection with PRODUCT with which it is delivered. CUSTOMER and any subsequent purchaser, assignee, or lessee may copy the Software for use on such PRODUCT with which it was originally delivered for archival purposes or on an 2 CONFIDENTIAL 7 alternate PRODUCT for disaster recovery purposes, as applicable, but shall not otherwise knowingly reproduce the original Software or make copies of the Software for distribution to others. CUSTOMER and any subsequent purchaser, assignee or lessee may add to, delete from or modify the Software, in any manner, but no changes, however extensive, shall alter manufacturer's title to such original Software. Title to any such modification or addition to the Software shall remain in the entity which creates the modification or addition. (c) The price set forth in a purchase order under this Agreement or in an Exhibit attached includes the fee for the Software furnished and the license granted. (d) Additional SOFTWARE LICENSE responsibilities and obligations of the manufacturer(s) of PRODUCT(s) are contained in EXHIBIT H. 5. CENTURY COMPLIANCE SELLER agrees to comply with the provisions set forth in Exhibit I, CENTURY COMPLIANCE. *Confidential treatment will be requested 3 CONFIDENTIAL 8 [*Confidential treatment requested]. 7. PURCHASE ORDERS; CANCELLATION OF PURCHASE ORDERS; REVOCATION OF ACKNOWLEDGEMENT (a) A purchase order means an order, form, memorandum, written communication and/or electronic transmission that CUSTOMER may deliver to SELLER for the purchase of PRODUCT. The following information shall be contained in the purchase order: (1) Description of PRODUCT, including any numerical alphabetical identification, including SELLER's part number, referenced in the price list herein; (2) Requested delivery date; (3) Applicable price; (4) Location to which the PRODUCT is to be shipped; (5) Location to which invoices shall be rendered for payment; (6) CUSTOMER's purchase order number; (7) Configurations (if applicable); (8) Delivery requirements; and (9) A reference to any applicable quotation given by SELLER to CUSTOMER. SELLER shall acknowledge purchase orders within ten (10) days of receipt of the purchase orders. (b) Purchase orders may be mailed, sent by facsimile transmission or electronic data interchange in accordance with Section 13, ELECTRONIC DATA INTERCHANGE. (c) SELLER may enforce each purchase order only against the AFFILIATE that has submitted the purchase order. (d) If an AFFILIATE shall be in material breach or default of this Agreement, including, but not limited to, timely payment for PRODUCT purchased and such breach shall continue for a period of thirty (30) days after CUSTOMER's receipt of SELLER's written notice, then, in addition to all other rights and remedies of law or equity or otherwise, SELLER shall have the right to suspend delivery of PRODUCT on outstanding purchase orders or revoke existing acknowledgements only with 4 CONFIDENTIAL 9 respect to the AFFILIATE. Default by an AFFILIATE shall not affect any other AFFILIATE party to this Agreement. (e) If SELLER shall be in material breach or default of this Agreement, and such breach shall continue for a period of thirty (30) days after SELLER's receipt of CUSTOMER's written notice thereof, then, in addition to all other rights and remedies of law or equality or otherwise, CUSTOMER shall have the right to immediately cancel all applicable purchase orders without any obligation or liability to SELLER for said cancellation. However, if SELLER fails to tender delivery of PRODUCT on or before the ship date stated on SELLER's acknowledgment, then CUSTOMER shall have the right to immediately cancel all applicable purchase orders without further obligation or liability to SELLER for said cancellation or any obligation to provide SELLER a time period to cure said breach. 8. BILLING AND PAYMENT TERMS (a) SELLER shall invoice CUSTOMER for each shipment made or service rendered (unless another address is specified in writing by CUSTOMER), at the address listed on CUSTOMER's purchase order. Invoices shall include, but not be limited to: (i) purchase order number; (ii) purchase order line number; (iii) PRODUCT identification number; (iv) ship to address; (v) quantity shipped and billed; (vi) net invoice amount; (vii) net unit cost; and (viii) any special instructions requested by CUSTOMER. (b) Payment shall be due thirty (30) days from the date of receipt of goods or receipt of SELLER's invoice, whichever occurs later, or if the performance of service is required, the completion and acceptance of such services by CUSTOMER. *Confidential treatment will be requested 5 CONFIDENTIAL 10 11. RECORDS AND REPORTS (a) SELLER shall maintain complete and accurate records of all invoices, all amounts billable to and payments made by CUSTOMER, in accordance with generally accepted accounting practices. SELLER shall retain and make available upon request such records for a period of three (3) years from the date of final shipment of PRODUCT or rendering of services covered by this Agreement. (b) When requested by CUSTOMER, SELLER shall, for purchase orders placed directly with SELLER by an AFFILIATE (other than GTE Supply), provide CUSTOMER a quarterly purchase report by ordering location, listing PRODUCT purchased under this Agreement, description, part number, quantities shipped, associated net prices and certification of Women and Minority Owned Business Enterprise (WMBE) or Minority Owned Business Enterprise (MBE), if requested. CUSTOMER shall specify the address for this report. (c) When requested by SELLER, CUSTOMER shall, for resale purchase orders shipped from GTE Supply's inventory, provide SELLER, at the address referenced in Section 35, NOTICES, a monthly report (point-of-sale) by customer, listing PRODUCT shipped, part number, description, quantities shipped and associated net prices. 12. BAR CODING SELLER agrees to participate with CUSTOMER in the development of a bar coding program in accordance with GTE standard set forth in Exhibit C. 13. ELECTRONIC DATA INTERCHANGE SELLER agrees to participate with CUSTOMER in the development of an Electronic Data Interchange (EDI) for the communication of purchase orders, acknowledgements, subsequent invoicing or other data that may be communicated between CUSTOMER and SELLER. SELLER further agrees to the terms and conditions as set forth in Exhibit D for the transmission of such electronically communicated data. 14. PRECEDENCE OF DOCUMENTS (a) All quotations, purchase orders, acknowledgements, and invoices issued pursuant to this Agreement shall be subject to the provisions contained in this Agreement. The terms and conditions of this Agreement will control over any conflicting or inconsistent terms contained in any quotation, purchase order, acknowledgement or invoice. Unless SELLER's rejection is forwarded to CUSTOMER with ten (10) 6 CONFIDENTIAL 11 days of receipt of the purchase order, the following provisions, as they relate to the PRODUCT ordered pursuant to a particular purchase order, can be changed by language contained in that purchase order; (i) the quantity, (ii) special quoted price, (iii) payment terms, (iv) warranty period, (v) packaging instructions, (vi) shipping instructions, (vii) title and risk of loss, (viii) additional documentation requirements, (ix) delivery date, or (x) description of the PRODUCT. (b) Except for the changes enumerated in Section 14.(a)(i-x) above, no modification to this Agreement or additional terms contained in any quotation, purchase order, acknowledgment, or invoice shall be valid without the prior written approval of the officer who executed this Agreement on behalf of CUSTOMER. 15. DELIVERY (a) Unless otherwise specified in the applicable purchase order, title to a PRODUCT sold pursuant to this Agreement shall pass at the time of shipment by SELLER as described in Section 15.(b). Any loss or damage to a PRODUCT prior to the passing of title shall be for the account and risk of SELLER. Any loss or damage to a PRODUCT after the passing of title shall be for the account and risk of CUSTOMER. Nothing contained in this Section 15.(a) shall be construed to reduce or otherwise affect the obligations of SELLER to obtain insurance covering any PRODUCT shipped by it to CUSTOMER. (b) Shipments of PRODUCT shall be made FOB Origin, freight collect or as otherwise specified on individual purchase orders. When CUSTOMER requests SELLER to arrange the transportation of the PRODUCT, SELLER shall ship PRODUCT freight collect in accordance with [*Confidential treatment requested], unless otherwise specified on CUSTOMER's purchase order. If SELLER is instructed by CUSTOMER to ship prepaid and added to the invoice, SELLER shall select a carrier based on the best rate as negotiated by SELLER, and CUSTOMER shall only pay SELLER's net transportation costs, that include, but are not limited to, all applicable discounts, allowances and refunds. (c) Failure of SELLER to ship PRODUCT in accordance with CUSTOMER's freight routing instructions shall result in charge-backs to SELLER for excess freight charges. (d) Unless instructed otherwise by CUSTOMER, SELLER shall, for purchase orders placed, (i) see that all subordinate documents bear CUSTOMER's purchase order number; (ii) enclose a packing list with each shipment and when more than one package is shipped, identify the one containing the packing list; (iii) mark CUSTOMER's purchase order number on all packages and shipping papers; (iv) render invoices showing CUSTOMER's purchase order number; (v) render separate invoices for each shipment or purchase order; (vi) forward shipping notices with invoices; (vii) invoice CUSTOMER by mailing or otherwise transmitting invoices, bills, and notices to the billing address on the purchase order; and (viii) make available a bill of lading upon request. 7 CONFIDENTIAL 12 (e) Standard delivery intervals for PRODUCT shall be specified in Exhibit F and may be amended only by a written document signed by both parties. Standard delivery intervals begin from the date of SELLER's receipt of CUSTOMER's purchase order. (f) SELLER shall ship PRODUCT to CUSTOMER within (i) the delivery intervals specified in Exhibit F (which do not include in-transit interval), or (ii) as otherwise provided by SELLER to CUSTOMER in a firm price quotation, purchase order acknowledgment or other written means (provided that such time period is not longer than the time period specified in Exhibit F without CUSTOMER's written request or agreement) with a minimum ninety-six percent (96%) on time shipping performance service level. On time shipping performance service level shall be calculated as total line items shipped complete, as compared to the total number of line items ordered that have been purchase for delivery within SELLER's stated delivery interval. SELLER shall provide CUSTOMER, on a quarterly basis, at the addresses as referenced in Section 35, NOTICES, shipping reports delineating the following information: (1) CUSTOMER's purchase order number; (2) Date CUSTOMER's purchase order received by SELLER. (3) Date purchase order shipped complete from SELLER; (4) Total number of line items scheduled for shipment in the period; (5) Total number of line items shipped complete and on time in the period; and (6) Percent (%) of line items shipped complete and on time in the period. 16. PACKAGING PRODUCT shall be packaged for shipment, at no additional charge, in suitable containers that provide protection against damage during the domestic shipment, handling and storage in reasonably dry, unheated quarters. [*Confidential treatment will be requested.] Corrugated shipping containers shall comply with the requirements of Item 222 of the National Motor Freight Code, Series NMFC 100-S, which may be amended from time to time. Containers of any type that are too heavy or too large to be palletized shall be skidded to facilitate fork truck or mechanized handling. 17. BILL OF SALE SELLER shall, upon request and after payment by CUSTOMER, execute and deliver to CUSTOMER a bill of sale or similar document evidencing conveyance of PRODUCT, free and clear of all liens, security interests and encumbrances. 8 CONFIDENTIAL 13 18. INSPECTION AND ACCEPTANCE (a) All PRODUCT ordered pursuant to this Agreement shall be subject to inspection by CUSTOMER after delivery to determine conformity with CUSTOMER's purchase order and SELLER's advertised or published specifications. If the PRODUCT delivered does not so conform, CUSTOMER shall have the right to reject such PRODUCT. PRODUCT that has been delivered and rejected, in whole or in part, shall be returned to SELLER at SELLER's risk and expense. CUSTOMER shall have a period of one hundred twenty (120) days following arrival of standard PRODUCT and ninety (90) days following arrival of custom PRODUCT at the delivery destination specified by CUSTOMER within which to inspect the PRODUCT for conformity with CUSTOMER's purchase order and SELLER's advertised and published specifications and to provide SELLER with written notice of any discrepancy or rejection. CUSTOMER shall notify SELLER and arrange for the return of PRODUCT as required. (b) Inspection or failure to inspect on any occasion shall not affect CUSTOMER's rights under the "WARRANTY" provisions of Exhibit H or any other rights or remedies available to CUSTOMER, whether at law or in equity. 19. PRODUCT STANDARDIZATION During the term of this Agreement, SELLER shall comply with CUSTOMER's standardization policies, procedures and terms as set forth in Exhibit G. *Confidential treatment will be requested. , 21. TRADEMARK LICENSE SELLER grants to CUSTOMER the nonexclusive right to use SELLER's trade names and trademarks in marketing SELLER's PRODUCT. CUSTOMER agrees to designate the PRODUCT properly and depict marks accurately. 9 CONFIDENTIAL 14 22. INFRINGEMENT (a) SELLER agrees to indemnify, defend and hold harmless CUSTOMER and its Affiliates, shareholders, directors, officers, employees, contractors, agents and other representatives from all demands, claims, actions, causes of action, proceedings, assessments, losses, damages, liabilities, settlements, judgments, fines, penalties, interest, cost and expenses (including fees and disbursements of counsel) arising from or relating to any actual or alleged infringement or misappropriation of any patent, trademark, copyright, trade secret or any actual or alleged violation of any other intellectual property rights arising from or in connection with the PRODUCT provided or the services performed under this Agreement regardless of whether such PRODUCT or services form the entire basis or only a portion of the basis for such claims of infringement, misappropriation or violation. Notwithstanding anything to the contrary contained in this Agreement (including, but not limited to, Section 30, INDEMNIFICATION AND INSURANCE), the provisions of this Section 22.(a) shall govern the rights of CUSTOMER and its Affiliates, shareholders, directors, officers, employees, contractors, agents and other representatives to indemnification for claims of infringement, misappropriation or violation of intellectual property rights. (b) Except for the negligence provisions, the procedures set forth in Section 30, INDEMNIFICATION AND INSURANCE, shall apply in the case of any claims of infringement, misappropriation or violation of intellectual property rights for which indemnification will be sought. (c) Additional INFRINGEMENT responsibilities and obligations for the manufacturer(s) of the PRODUCT(s) are contained in EXHIBIT H. 23. CONFIDENTIAL INFORMATION (a) In order for the parties to perform their respective obligations under this Agreement, it may be necessary for either party to disclose to the other technical, customer, personnel and/or business information in written, graphic, oral or other tangible or intangible forms including, but not limited to, specifications, records, data, computer programs, drawings, schematics, know-how, notes, models, reports and samples. Such information may contain proprietary or confidential material, or material subject to applicable laws regarding secrecy of communications or trade secrets (Confidential Information). (b) Each party acknowledges and agrees: (1) That all Confidential Information acquired by either party from the other shall be and shall remain the exclusive property of the disclosing party; (2) To identify in writing as confidential or proprietary, or mark as confidential or proprietary, any information that either party deems to be Confidential Information; 10 CONFIDENTIAL 15 (3) That information that is disclosed orally shall not be considered Confidential Information unless it is reduced to writing or to a written summary that identifies the orally-disclosed topics to be considered as Confidential Information and such writing is provided to the recipient at the time of disclosure or within thirty (30) days thereafter. (4) To receive in confidence any Confidential Information; to limit access to such Confidential Information to authorized employees who have a need to know the Confidential Information in order for the party to perform its obligations under this Agreement and who have been informed of the confidential and proprietary nature; not to disclose, reveal or divulge any Confidential Information or authorize any other person to do so except (i) as specifically approved in writing by the disclosing party or (ii) as required in connection with the due and proper performance by the receiving party of its obligations under this Agreement (which shall not be deemed to include disclosure to consultants, advisors or other third parties which are not full-time, regular employees of the receiving party); (5) To use such Confidential Information only for the purposes of performing their obligations under this Agreement and for such other purposes as may be agreed upon between the parties in writing; (6) If a receiving party receives a request to disclose any Confidential Information (whether pursuant to a valid and effective subpoena, an order issued by a court or other governmental authority of competent jurisdiction or otherwise) on advice of legal counsel that disclosure is required under applicable law, such party agrees that, prior to disclosing any Confidential Information, it shall (i) notify the disclosing party of the existence and terms of such request or advice, (ii) cooperate with the disclosing party in taking legally available steps to resist or narrow any such request or to otherwise eliminate the need for such disclosure, if requested to do so by the disclosing party, and (iii) if disclosure is required, use its best efforts to obtain a protective order or other reliable assurance that confidential treatment will be afforded to such portion of the Confidential Information as is required to be disclosed; (7) Upon request of the disclosing party, to return all Confidential Information to such party, or to destroy any documents, computer media or records, in written, graphic, or other tangible form, that contain any Confidential Information; (8) That the obligations with respect to Confidential Information shall extend for a period of five (5) years following the date of initial disclosure of that Confidential Information, and such obligations shall extend beyond completion of the term of this Agreement; and (9) That nothing contained in this Section 23 shall be construed as a license or permission to make, use, or sell the Confidential Information or products derived therefrom. 11 CONFIDENTIAL 16 (c) The obligations contained in this Section 23 do not apply to Confidential Information that: (1) As shown by reasonably documented proof, was in the receiving party's possession prior to receipt thereof from the disclosing party; (2) As shown by reasonably documented proof, was received by one party in good faith from a third party not subject to a confidential obligation to the other party; (3) Now is or later becomes publicly known through no breach of confidential obligation by the receiving party; (4) Is disclosed pursuant to a requirement imposed by a governmental agency or is otherwise required to be disclosed by operation of law, provided that the party receiving the request for the information has fully complied with its obligations under Section 23.(b)(6); (5) Was developed by the receiving party without the developing persons having access to any of the Confidential Information received from the other party; (6) Is authorized in writing by the disclosing party to be released or is designated in writing by the source as no longer being confidential or proprietary. (d) It is agreed that a violation of any of the provisions of this Section 23 will cause irreparable harm and injury to the disclosing party and that party shall be entitled, in addition to any other rights and remedies it may have at law or in equity, to seek an injunction enjoining and restraining the receiving party from doing or continuing to do any such act and any other violations or threatened violations of this Section 23. 24. PUBLICITY AND DISCLOSURE Each party agrees not to provide copies of this Agreement, or otherwise disclose the terms of this Agreement, to any third party without the prior written consent of the other party; provided, however, that CUSTOMER may, without obtaining SELLER's consent, provide copies or make disclosures to prospective purchasers of the business of CUSTOMER or of any AFFILIATE; or for the purpose of obtaining third party financing; and any regulatory or judicial body requesting such information. The parties further agree to submit to one another, for written approval, all advertising, sales promotion, press releases and other publicity matters relating to the PRODUCT furnished or the services performed pursuant to this Agreement, when its respective name or mark is mentioned or language from which the connection of said name or mark may be inferred or implied. The parties further agree not to publish or use such advertising, sales promotions, press releases, or publicity matters without such prior written approval. Any approval required under this Section shall not be unreasonably withheld or delayed by either party. 12 CONFIDENTIAL 17 25. COMPLIANCE WITH LAWS (a) SELLER shall comply with the provisions of all applicable federal, state, county and local laws, ordinances, regulations and codes (including procurement of required permits or certificates) in manufacturing, assembling, selling and providing PRODUCT and in performing its other obligations under this Agreement, including, but not limited to, the standards promulgated under the Occupational Safety and Health Act, Executive Order 11246, as amended, Section 503 of the Vocational Rehabilitation Act of 1973, as amended, the Vietnam Era Veterans Readjustment Assistance Act of 1974, the Immigration Reform and Control Act of 1986, the Civil Rights Acts of 1964 and 1991, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and all rules and regulations relative to these Acts and other applicable equal employment opportunity laws, rules and regulations, which are expressly incorporated herein by reference. Irrespective of whether a specification is furnished, if PRODUCT or containers furnished are required to be constructed, packaged, labeled, or registered in a prescribed manner, SELLER shall comply with applicable federal, state or local laws. SELLER shall indemnify CUSTOMER against all claims, loss or damage sustained because of its noncompliance. (b) If any persons furnished under the Agreement by SELLER have a disability as defined in the Americans with Disabilities Act, 42 U.S.C.A. 12101 et seq. (the ADA), SELLER shall, where required by Title I of the ADA and at its sole expense, provide "reasonable accommodations" that may be required under Title I of the ADA including, but not limited to, "auxiliary aids and services" to make aural, visual materials or interpreters available to individuals furnished by SELLER with impairments so that such individuals are able to perform the essential functions of the job they are contracted to perform. SELLER further agrees to indemnify and defend CUSTOMER for any losses, fines, reasonable attorney fees, or other penalties that may be incurred or assessed upon CUSTOMER due to SELLER's failure to comply with the provisions of the Title I of the ADA with respect to the persons furnished by SELLER. (c) PRODUCT furnished shall comply, to the extent applicable, with the requirements of the Federal Communications Commission's Rules and Regulations, as may be amended, including those sections concerning the labeling of such PRODUCT and the suppression of radiation to specified levels. If the PRODUCT generates interference harmful to radio communications, and such PRODUCT was installed in accordance with such Rules and Regulations, then SELLER shall provide to CUSTOMER methods for suppressing the interference. If the interference cannot be reasonably suppressed, SELLER shall accept return of the PRODUCT, refund to CUSTOMER the price paid for the PRODUCT and bear all expenses for removal and shipment of such PRODUCT. Nothing herein shall be deemed to diminish or otherwise limit SELLER's obligations under the "WARRANTY" PROVISIONS of Exhibit H herein or any other rights or remedies available to CUSTOMER, whether at law or in equity. 13 CONFIDENTIAL 18 26. FORCE MAJEURE (a) Neither party shall be responsible for any delay or failure in performance of any part of this Agreement to the extent that such delay or failure is caused by fire, flood, explosion, war, embargo, government requirement, civil or military authority, acts of God, strikes, slowdowns, picketing, boycotts, or any other circumstances beyond its reasonable control and not involving any fault or negligence of the party affected (Condition). If any such Condition occurs, the party delayed or unable to perform shall promptly give written notice to the other party and, if such Condition remains at the end of thirty (30) days, the party affected by the other's delay or inability to perform may elect to (i) terminate such purchase order or part thereof, or (ii) suspend such purchase order for the duration of the Condition, and if CUSTOMER is the suspending party, buy elsewhere comparable material to be sold under such purchase order, and apply to any commitment the purchase price of such purchase, and resume performance of such purchase order once the Condition ceases, with an option in the affected party to extend the period of this Agreement up to the length of time the Condition endured. (b) Unless written notice is given within thirty (30) days after the affected party is notified of the Condition, (a)(ii) above shall be deemed selected. 27. ASSIGNMENT (a) The rights and obligations of the parties shall neither be assigned nor delegated without the prior written consent of the other party. However, any party may assign or delegate its respective rights and obligations, in whole or in part, to any parent, subsidiary or affiliate of that party that was such a parent, subsidiary or affiliate at the time of execution of this Agreement; provided that the assigning party gives the other thirty (30) days' prior written notice and the assignee agrees to be bound by the terms of this Agreement. (b) The limitation on assignment does not apply to an assignment confined solely to monies due or to become due under this Agreement, provided the party is given thirty (30) days' prior written notice of such assignment. An assignment of monies shall be void to the extent that it attempts to impose upon the party obligations to the assignee in addition to the payment of such monies, or to preclude the party from dealing solely and directly with the other in all matters, including negotiation of amendments or settlement of amounts due, or it gives rise to any additional rights or defenses available to the assignee that were not available to the other party. (c) If CUSTOMER sells, exchanges or otherwise disposes of all or a portion of the assets of, or CUSTOMER's interest in, any business unit in which PRODUCT are used, then CUSTOMER shall have the right, upon written notice to SELLER, to assign to such third party all licenses and rights granted under this Agreement with respect to such PRODUCT; provided that the third party agrees to be bound by all obligations of CUSTOMER to SELLER that pertain to the PRODUCT. 14 CONFIDENTIAL 19 (d) CUSTOMER may assign to a leasing company CUSTOMER's right to purchase PRODUCT under the terms and conditions of this Agreement for CUSTOMER's internal use. 28. TAXES CUSTOMER shall be liable for and shall reimburse SELLER for payments of Federal Manufacturers' and Retailers' Excise Taxes and state and local sales and use taxes, as applicable, with respect to transactions under this Agreement. Taxes payable by CUSTOMER shall be separately stated in SELLER's invoices and shall not be included in SELLER's prices. CUSTOMER shall not be liable for any tax for which a valid exemption certificate acceptable to the applicable state or local taxing authorities is furnished by CUSTOMER to SELLER. CUSTOMER's purchase order may provide SELLER additional tax instruction as allowed by law including, but not limited to, CUSTOMER's accrual and payment of taxes and/or special jurisdictional exemptions. 29. PLANT AND WORK RULES AND RIGHT OF ACCESS (a) The respective agents and employees of the parties, while on the premises of the other, shall comply with all plant rules, regulations and reasonable company standards for security, including (when required by U. S. government regulations) submission of satisfactory clearance from U. S. Department of Defense and other federal authorities concerned. (b) Each party shall permit reasonable access during normal working hours to its facilities in connection with the work. No charge shall be made for such visits. Reasonable prior notice shall be given when access is required. (c) If SELLER is given access, whether on-site or through remote facilities, to any CUSTOMER computer or electronic data storage system in order for SELLER to accomplish the work called for in this Agreement, SELLER shall limit such access and use solely to perform work within the scope of this Agreement and shall not access or attempt to access any computer system, electronic file, Software or other electronic services other than those specifically required to accomplish the work required under this Agreement. SELLER shall limit such access to those of its employees whom CUSTOMER has authorized in writing to have such access in connection with this Agreement, and shall strictly follow all CUSTOMER's security rules and procedures for use of CUSTOMER's electronic resources. All user identification numbers and passwords disclosed to SELLER and any information obtained by SELLER as a result of SELLER's access to and use of CUSTOMER's computer and electronic data storage systems shall be deemed to be, and shall be treated as, CUSTOMER Confidential Information under applicable provisions of this Agreement. SELLER agrees to cooperate with CUSTOMER in the investigation of any apparent unauthorized access by SELLER to CUSTOMER's computer or electronic data storage systems or unauthorized release of Confidential Information by SELLER. 15 CONFIDENTIAL 20 30. INDEMNIFICATION AND INSURANCE (a) SELLER shall indemnify, defend, and hold harmless CUSTOMER and its affiliates, officers, agents, and employees, from all claims, suits, actions, demands, damages, liabilities, expenses (including fees and disbursements of counsel), judgments, settlements and penalties of every kind based on (i) personal injury, death, or property damage to the extent any of the foregoing is proximately caused by either any defective PRODUCT provided by SELLER, its officers, employees, subcontractors or agents, or by the negligent or willful acts or omissions of SELLER, its officers, employees, subcontractors or agents, or (ii) strict liability in tort or products liability of any other kind in connection with any PRODUCT provided by SELLER, its officers, employees, subcontractors or agents or the use, resale or distribution of any such PRODUCT by CUSTOMER. The foregoing indemnity, to the extent permitted by law, shall apply in the case of all claims that arise from the negligence, misconduct or other fault of CUSTOMER, provided, however, that if a claim is the result of the joint negligence, joint misconduct, or joint fault of SELLER and CUSTOMER, the amount of the claim for which CUSTOMER is entitled to indemnification shall be limited to that portion of such claim that is attributable to the negligence, misconduct or other fault of SELLER. The obligations of this provision are in addition to SELLER obligation to provide insurance and shall not be limited by any limitation on the amount or type of damages, compensation or benefits payable by SELLER under the Worker's Compensation Acts, Longshoremen and Harborworker's Act, Disability Benefits Act or any other employee benefit act. (b) CUSTOMER shall promptly notify SELLER in writing of any suits, claims or demands covered by this indemnity. Promptly after receipt of such notice, SELLER shall assume the defense of such claim with counsel reasonably satisfactory to CUSTOMER. If SELLER fails, within a reasonable time after receipt of such notice, to assume the defense with counsel reasonably satisfactory to CUSTOMER, or if, in the reasonable judgment of CUSTOMER, a direct or indirect conflict of interest exists between the parties with respect to the claim, or if in the sole judgment of CUSTOMER the assumption and conduct of the defense by SELLER would materially and adversely affect CUSTOMER in any manner or prejudice its ability to conduct a successful defense, then CUSTOMER shall have the right to undertake the defense, compromise and settlement of such claim for the account and at the expense of SELLER. Notwithstanding the above, if CUSTOMER in its sole discretion so elects, CUSTOMER may also participate in the defense of such actions by employing counsel at its expense, without waiving SELLER's obligations to indemnify or defend. SELLER shall not settle or compromise any claim or consent to the entry of any judgment without the prior written consent of CUSTOMER and without an unconditional release of all liability by each claimant or plaintiff to CUSTOMER. (c) SELLER agrees to maintain during the term all insurance or bonds required by law or this Agreement, including, but not limited to (i) Worker's Compensation and related insurance as prescribed by the law of the state in which SELLER's services are performed or PRODUCT are delivered; (ii) employer's liability insurance with limits of at least one million dollars ($1,000,000) for each occurrence, and (iii) comprehensive general liability insurance including products liability, and, if the use 16 CONFIDENTIAL 21 of motor vehicles is required, comprehensive motor vehicle liability insurance, each with limits of at least two million dollars ($2,000,000) for combined single limit for bodily injury, including death, and/or property damage. SELLER shall cause CUSTOMER to be included as an additional insured under said policies (as "GTE Corporation and its affiliates and subsidiaries") and CUSTOMER's coverage under such policies shall be primary. SELLER shall waive its rights of subrogation against CUSTOMER for Workers' Compensation claims. SELLER shall, prior to rendering such services, furnish certificates or evidence of the foregoing insurance indicating the amount and nature of such coverage, the expiration date of each policy, and stating that no material change or cancellation of any such policy shall be effective unless thirty (30) days' prior written notice is given to CUSTOMER. (d) Additional INDEMNIFICATION AND INSURANCE responsibilities and obligations for the manufacturer(s) of the PRODUCT(s) are contained in EXHIBIT H. 31. RELATIONSHIP OF PARTIES In providing any services under this Agreement, SELLER is acting solely as an independent contractor and not as an agent of any other party. Persons furnished by the respective parties shall be solely the employees or agents of such parties, respectively, and shall be under the sole and exclusive direction and control of such parties. They shall not be considered employees of the other party for any purpose. Each party shall be responsible for compliance with all laws, rules and regulations involving its respective employees or agents, including (but not limited to) employment of labor, hours of labor, health and safety, working conditions and payment of wages. Each party shall also be responsible, respectively, for payment of taxes, including federal, state, and municipal taxes, chargeable or assessed with respect to its employees or agents, such as social security, unemployment, worker's compensation, disability insurance and federal and state income tax withholding. Neither party undertakes by this Agreement or otherwise to perform or discharge any liability or obligation of the other party, whether regulatory or contractual, or to assume any responsibility whatsoever for the conduct of the business or operations of the other party. Nothing contained in this Agreement is intended to give rise to a partnership or joint venture between the parties or to impose upon the parties any of the duties or responsibilities of partners or joint venturers. 32. TOXIC SUBSTANCES AND HAZARDOUS PRODUCT SELLER represents that each PRODUCT furnished by SELLER is safe for normal use, is nontoxic, presents no abnormal hazards to persons or the environment, and may be disposed of as normal refuse. 33. TERMINATION (a) CUSTOMER may terminate this Agreement without cause, effective immediately, upon written notice to SELLER. Termination shall not affect any purchase order placed, any subordinate agreement executed prior to the date of termination, or any fully paid up license granted to CUSTOMER. Upon termination of this Agreement without cause, CUSTOMER shall not be liable to SELLER, either for compensation or for damages of any kind or character whatsoever, whether on account of the loss 17 CONFIDENTIAL 22 by SELLER of present or prospective profits on sales or anticipated sales, or expenditures, investments or commitments made in connection with the establishment, development or maintenance of SELLER's business, or on account of any other cause or thing whatsoever. The termination shall not prejudice the rights or liabilities of the parties with respect to PRODUCT sold, or any indebtedness then owing by either party to the other. (b) Either party may terminate this Agreement, effective immediately, without liability for said termination, upon written notice to the other party, if any of the following events occur. (1) The other files a voluntary petition in bankruptcy; (2) The other is adjudged bankrupt; (3) A court assumes jurisdiction of the assets of the other under a federal reorganization act; (4) A trustee or receiver is appointed by a court for all or a substantial portion of the assets of the other; (5) The other becomes insolvent or suspends its business; (6) The other makes an assignment of its assets for the benefit of its creditors, except as required in the ordinary course of business; or (7) The identity of the other's business is materially changed by sale of its business, transfer of control of its outstanding stock, merger or otherwise. (c) Either party may terminate this Agreement for a material breach or default of any of the terms, conditions or covenants of this Agreement by the other, provided that such termination may be made only following the expiration of a thirty (30) day period during which the other party has failed to cure such breach after having been given written notice of such breach. This subsection shall not apply to CUSTOMER's cancellations or SELLER's revocations under Section 7, PURCHASE ORDERS; CANCELLATION OF PURCHASE ORDERS; REVOCATION OF ACKNOWLEDGEMENT. 34. DISPUTE RESOLUTION (a) The parties desire to resolve certain dispute, controversies and claims arising out of this Agreement without litigation. Accordingly, except in the case of (i) a dispute, controversy or claim relating to a breach or alleged breach on the part of either party of the provisions of Section 23, CONFIDENTIAL INFORMATION, (ii) a suit, action or proceeding to compel SELLER to comply with its obligations to indemnify CUSTOMER pursuant to this Agreement or (iii) a suit, action or proceeding to compel either party to comply with the dispute resolution procedures set forth in this Section 34, the parties agree to use the following alternative procedure as their sole remedy with respect to any dispute, controversy or claim arising out of or relating 18 CONFIDENTIAL 23 to this Agreement or its breach. The term "Arbitrable Dispute" means any dispute, controversy or claim to be resolved in accordance with the dispute resolution procedure specified in this Section 34. (b) At the written request of a party, each party shall appoint a knowledgeable, responsible representative to meet and negotiate in good faith to resolve any Arbitrable Dispute arising under this Agreement. The parties intend that these negotiations be conducted by nonlawyer, business representatives. The discussions shall be left to the discretion of the representatives. Upon agreement, the representatives may utilize other alternative dispute resolution procedures such as mediation to assist in the negotiations. Discussions and correspondence among the representatives for purposes of these negotiations shall be treated as confidential information developed for purposes of settlement, shall be exempt from discovery and production, and shall not be admissible in the arbitration described below or in any lawsuit without the concurrence of all parties. Documents identified in or provided with such communications, which are not prepared for purposes of the negotiations, are not so exempted and may, if otherwise admissible, be admitted in evidence in the arbitration or lawsuit. (c) If the negotiations do not resolve the Arbitrable Dispute within sixty (60) days of the initial written request, the Arbitrable Dispute shall be submitted to binding arbitration by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. A party may demand such arbitration in accordance with the procedures set out in those rules. Discovery shall be controlled by the arbitrator and shall be permitted to the extent set out in this Section. Each party may submit in writing to a party, and that party shall so respond, to a maximum of any combination of thirty-five (35) (none of which may have subparts) of the following: interrogatories, demands to produce documents and requests for admission. Each party is also entitled to take the oral deposition of one (1) individual or another party. Additional discovery may be permitted upon mutual agreement of the parties. The arbitration hearing shall be commenced within sixty (60) days of the demand for arbitration and the arbitration shall be held in Dallas, Texas. The arbitrator shall control the scheduling so as to process the matter expeditiously. The parties may submit written briefs. The arbitrator shall rule on the Arbitrable Dispute by issuing a written opinion within thirty (30) days after the close of hearings. The times specified in this Section may be extended upon mutual agreement of the parties or by the arbitrator upon a showing of good cause. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. (d) Each party shall bear its own cost of these procedures. A party seeking discovery shall reimburse the responding party the cost of production of documents (to include search time and reproduction time costs). The parties shall equally share the fees of the arbitration and the arbitrator. 35. NOTICES Except as otherwise provided herein, any notice or demand given under the terms of this Agreement or pursuant to statute shall be in writing and shall be given or made by telegram, facsimile transmission, certified or registered mail, express mail or other overnight 19 CONFIDENTIAL 24 delivery service or hand delivery, proper postage or other charges paid and addressed or directed to the respective parties as follows: To CUSTOMER: GTE Supply 700 Hidden Ridge Irving, Texas 75038 Attention: Senior Contract Manager-Contract Management (HQW03N73) GTE Supply 700 Hidden Ridge Irving, Texas 75038 Attention: Assistant Vice President-Contract Management (HQW03L61) and GTE Service Corporation 500 E. John Carpenter FWY Irving, Texas 75062 Attention: Director-Standardization Testing and Technology (HQB08A50) and GTE Supply 5615 High Point Drive PO Box 169001 Irving, Texas 75016-9001 Attention: Department Manager-Vendor Administration (HQA07B04) To SELLER: World Wide Technology, Inc. 127 East Weldon Parkway St. Louis, Missouri 63043-3101 Attention: Tom Van Horn-Manager The address for notice set out above may be changed at any time by giving thirty (30) days' prior written notice. 36. LABOR SERVICES Should SELLER wish to be employed by CUSTOMER and CUSTOMER wish to employ SELLER to perform certain work in connection with the functions of engineering, construction, installation, or maintenance of equipment and/or facilities, SELLER shall enter into a General Agreement for Engineering, Construction, Installation, or Maintenance to Telephone Plant (the "General Agreement") with the telephone company affiliates of CUSTOMER to set forth the mutual rights and obligations of the parties and the manner in 20 CONFIDENTIAL 25 which such work shall be performed. A copy of CUSTOMER's then current version of the General Agreement shall be provided to SELLER upon request. 37. NONWAIVER Either party's failure to enforce any of the provisions of this Agreement or any purchase order, or to exercise any option, shall not be construed as a waiver of such provisions, rights, or options, or affect the validity of this Agreement or any purchase order. 38. SEVERABILITY In any of the provisions of this Agreement shall be invalid or unenforceable, then such invalidity or unenforceability shall not invalidate or render unenforceable the entire Agreement. The entire Agreement shall be construed as if not containing the particular invalid or unenforceable provision or provisions, and the rights and obligations of SELLER and CUSTOMER shall be construed and enforced accordingly. 39. SECTION HEADINGS The headings of the sections are inserted for convenience only and are not intended to affect the meaning or interpretation of this Agreement. 40. SURVIVAL OF OBLIGATIONS The respective obligations of the parties under this Agreement that by their nature would continue beyond the termination, cancellation or expiration, shall survive any termination, cancellation or expiration, including, but not limited to, obligations to indemnify, insure and maintain confidentiality, and continued availability of PRODUCT support. 41. CHOICE OF LAW AND JURISDICTION The construction, interpretation and performance of this Agreement shall be governed by and construed in accordance with the laws of the state of Texas without regard to any conflicts of law principles that would require the application of the laws of any other jurisdiction and subject to the exclusive jurisdiction of its federal or state courts in Dallas County, Texas. The application of the U. N. Convention on Contracts for the International Sale of Goods is specifically excluded from this Agreement. 42. ENTIRE AGREEMENT This Agreement together with its exhibits constitutes the entire agreement between the parties and cancels all contemporaneous or prior agreements, whether written or oral, with respect to the subject matter of this Agreement. Except as provided in Sections 14, PRECEDENCE OF DOCUMENTS, and Section 7, PURCHASE ORDERS; CANCELLATION OF PURCHASE ORDERS; REVOCATION OF ACKNOWLEDGEMENT, no modifications shall be made to this Agreement unless in writing and signed by appropriate representatives of the parties. 21 CONFIDENTIAL 26 Each party represents that it has executed this Agreement through its authorized corporate representative: WORLD WIDE TECHNOLOGY, INC. GTE COMMUNICATION SYSTEMS CORPORATION By: /s/ David L. Steward By: /s/ M. R. Redmond -------------------------------- ------------------------------------ Name: David L. Steward Name: M. R. Redmond ---------------------------- Title: President Title: Assistant Vice President-Contract ---------------------------- Management Date: 11-26-97 Date: 11/25/97 ---------------------------- ----------------------------------- APPROVED AS TO FORM AND LEGALITY /s/ J. R. Seastrom --------------------------------------- Attorney, GTE Telephone Operations Date: 11-25-97 ---------------------------------- 22 CONFIDENTIAL 27 EXHIBIT A GTE AFFILIATED ENTITIES CONFIDENTIAL 28 EXHIBIT A GTE AFFILIATED ENTITIES GTE Alaska Incorporated GTE Arkansas Incorporated GTE California Incorporated Contel Advanced Systems, Inc. GTE Florida Incorporated GTE Communications Corporation GTE Funding Incorporated GTE Hawaiian Telephone Company Incorporated GTE Hawaiian Tel Insurance Company Incorporated GTE Hawaiian Tel International Incorporated The Micronesian Telecommunications Corporation GTE Pacifica Incorporated GTE Midwest Incorporated GTE North Incorporated GTW Telephone Systems Incorporated GTE Northwest Incorporated GTE West Coast Incorporated GTE South Incorporated GTE Southwest Incorporated Contel of Minnesota, Inc. d/b/a GTE Minnesota Contel of the South, Inc. d/b/a GTE Systems of the South Contel Service Corporation Continental Telephone Business Systems, Inc. GTE Anglo Holding Company Incorporated La Compagnie de Telephone Anglo-Canadienne/Anglo-Canadian Telephone Company BC TELECOM Inc. Quebec-Telephone GTE London Limited (England) GTE Holdings (Canada) Limited Compania Dominicana de Telefonos, C. por A. (Codetel) GTE International Telephone Incorporated Codetel Computer Graphics Holdings B.V. (Netherlands) Informatica y Telecommunicaciones, C. por A. (Dominican Republic) GTE International Telecommunications Incorporated GTE do Brasil Limitada GTE PCS International Incorporated GTE Venezuela Incorporated VenWorld Telecom, C.A. (Venezuela) GTE Investments Incorporated CONFIDENTIAL 29 EXHIBIT A GTE AFFILIATED ENTITIES GTE Customer Networks, Inc. GTE Data Services Incorporated GTE Data Services Holdings Mexico, S. de R.L. de C.V. GTE Data Services-Mexico, S.A. de C.V. GTEDS Data Services-Mexico, S.A. de C.V. GTE Data Services International Incorporated GTE Intelligent Network Services Incorporated GTE Main Street Incorporated GTE Media Ventures Incorporated T. L. Robak, Inc. Apollo Cablevision, Inc. Contel Vision, Inc. GTE Professional Services Incorporated GTE Vantage Incorporated CONFIDENTIAL 30 EXHIBIT A GTE AFFILIATED ENTITIES GTE Mobile Communications Incorporated GTE Mobile Communications Service Corporation GTE Mobile Communications International Incorporated GTE Macro Communications Corporation GTE Mobilnet of Asheville Incorporated GTE Mobilnet of Danville Incorporated GTE Mobilnet of Eastern North Carolina Incorporated GTE Mobilnet of Fayetteville Incorporated GTE Mobilnet of Florence, South Carolina Incorporated GTE Mobilnet of North Carolina Incorporated GTE Mobilnet of Raleigh Incorporated GTE Mobilnet of South Carolina Incorporated GTE Mobilnet of the Southeast Incorporated Tuscaloosa/Florence Holdings, Inc. GTE Airfone Incorporated GTE Mobilnet Incorporated GTE Cellular Communications Corporation GTE Mobilnet of Cleveland Incorporated GTE Mobilnet of Indianapolis Incorporated GTE Wireless of the Pacific Incorporated GTE Mobilnet of Tampa Incorporated GTE Mobilnet Sales Corp. GTE Mobilnet Service Corp. CONFIDENTIAL 31 EXHIBIT A GTE AFFILIATED ENTITIES Contel Cellular Inc. Contel Cellular International, Inc. GTE Mobilnet Holding Incorporated GTE Mobilnet of Alabama Incorporated GTE Mobilnet of Birmingham Incorporated GTE Mobilnet of Chattanooga Incorporated GTE Mobilnet of Chattanooga II Incorporated GTE Mobilnet of Clarksville Incorporated GTE Mobilnet of Gadsden Incorporated GTE Mobilnet of Kentucky Incorporated GTE Mobilnet of Knoxville Incorporated GTE Mobilnet of Memphis Incorporated GTE Mobilnet of Memphis II Incorporated GTE Mobilnet of Nashville Incorporated GTE Mobilnet of Tennessee Incorporated GTE Mobilnet of Central California Incorporated GTE Mobilnet of Davenport Incorporated GTE Mobilnet of Huntsville Incorporated GTE Mobilnet of Illinois Funding Incorporated GTE Mobilnet of Illinois Incorporated GTE Mobilnet of Indiana Incorporated GTE Mobilnet of Richmond Incorporated GTE Mobilnet of San Diego Incorporated GTE Mobilnet of the South Incorporated GTE Mobilnet of the Southwest Incorporated CONFIDENTIAL 32 EXHIBIT A GTE AFFILIATED ENTITIES GTE Information Services Incorporated General Telephone Directory Company C. por A. GTE Card Services Incorporated GTE Directories (Belgium) Limited GTE Directories (B) SDN.BHD (Brunei) GTE Directories Corporation GTEDS GmbH GTE Directories (HK) Limited (Hong Kong) GTE Government Information Services Incorporated GTE Information Services (UK) Limited (England) GTE New Media Services Incorporated GTE Telecommunications Services Incorporated GTE Yellow Pages Publishing Hungary Kft Contel Federal Systems, Inc. GTE Government Systems Corporation GTE Telecom Incorporated GTE Telecom International Incorporated GTE Telecom International Systems Corporation GTE China Incorporated GTE Communications Services Incorporated GTE Leasing Corporation GTE Leasing Acceptance Corporation Kalama Grain Terminal, Inc. GTE Products of Connecticut Corporation GTE Communication Systems Corporation (GTE Supply) GTE Laboratories Incorporated GTE Operations Support Incorporated Televac, Inc. CONFIDENTIAL 33 EXHIBIT A GTE AFFILIATED ENTITIES GTE Transfer Corporation GTE Service Corporation GTE Finance Corporation GTE Investment Management Corporation GTE Massachusetts Incorporated GTE Realty Corporation GTE Realty Corporation of Connecticut GTER Incorporated GTE-TCCA, Inc. GTE Reinsurance Company Limited (Vermont) GTE Life Insurance Company Limited (Bermuda) GTE Reinsurance Management Limited (Bermuda) GTE Shareholder Services Incorporated GTE Visnet Incorporated CONFIDENTIAL 34 *Confidential treatment will be requested. CONFIDENTIAL 35 *Confidential treatment will be requested. CONFIDENTIAL 36 *Confidential treatment will be requested. World Wide Technology, Inc. Confidential FLM- Page 2 37 Agreement No. C971312BC002 *Confidential treatment will be requested. World Wide Technology, Inc. Confidential Page 3 38 Agreement No. 7132BC002 09/30/97 *Confidential treatment will be requested. World Wide Technology, Inc. Confidential Page 4 39 Agreement No. 7132BC002 09/30/97 *Confidential treatment will be requested. World Wide Technology, Inc. Confidential Page 5 40 Agreement No. 7132BC002 09/30/97 *Confidential treatment will be requested. World Wide Technology, Inc. Confidential Page 6 41 Page 1 *Confidential treatment will be requested. Agreement No. C971312BC002 9/30/97 World Wide Technology, Inc. Confidential Page 1 42 Agreement No. C971312BC002 Page 2 9/30/97 * Confidential treatment will be requested World Wide Technology, Inc. Confidential Page 2 43 Page 3 Agreement No. C971312BC002 9/30/97 * Confidential treatment will be requested Page 3 44 Agreement No. C971312BC002 9/30/97 * Confidential treatment will be requested 45 Agreement No. C971312BC002 9/30/97 * Confidential treatment will be requested 46 Agreement No. C971312BC002 9/30/97 * Confidential treatment will be requested 47 Agreement No. C971312BC002 Page 7 9/30/97 * Confidential treatment will be requested WORLD WIDE TECHNOLOGY, INC. CONFIDENTIAL Page 7 48 Agreement No. C9 C002 09/30/97 * Confidential treatment will be requested World Wide Technology, Inc. Confidential Page 1 49 * Confidential treatment will be requested 50 * Confidential treatment will be requested World Wide Technology, Inc. Confidential Page 1 51 Agreement No. C971312BC002 Page 7 9/30/97 * Confidential treatment will be requested WORLD WIDE TECHNOLOGY, INC. CONFIDENTIAL Page 7 52 Agreement No. C971312BC002 Page 8 9/30/97 * Confidential treatment will be requested WORLD WIDE TECHNOLOGY, INC. CONFIDENTIAL Page 8 53 Agreement No. C971312BC002 Page 9 9/30/97 *Confidential treatment will be requested WORLD WIDE TECHNOLOGY, INC. CONFIDENTIAL Page 9 54 EXHIBIT D EDI PURCHASE ORDERS CONFIDENTIAL 55 EXHIBIT D EDI PURCHASE ORDERS 1. At CUSTOMER's option, the parties agree to develop an Electronic Data Interchange (EDI) for the electronic communication of purchase orders, acknowledgments, subsequent invoicing or other data (DOCUMENTS). All exchanged DOCUMENTS shall be channeled through one or more Third Party Networks (TPNs) by one party to the other. Each party will arrange and pay its own expenses for the transmission of electronic DOCUMENTS. Either party may change its TPNs with thirty (30) days' prior written notice to the other. Each party agrees to provide the other access codes necessary to establish connections. Each party shall adopt reasonable security procedures to ensure that (i) DOCUMENTS transmitted electronically are authorized; (ii) its business records and data are protected from improper use; and (iii) the security of access codes and electronic identification codes is maintained. Prior to the performance of any new transmission of DOCUMENTS under this Agreement, SELLER agrees to review and then perform, to the best of its capabilities, in accordance with the instructions provided in CUSTOMER's Implementation Guidelines. As determined by CUSTOMER and SELLER, there may be a period during which the parties test and resolve any operations issues. 2. At the option of the sending party and if the sending party has the capacity to receive acknowledgements electronically, then, upon receipt of a DOCUMENT, the receiving party shall promptly issue an acknowledgement to the sending party solely for the purpose of acknowledgeing receipt of the DOCUMENT. Otherwise, the receiving party shall provide written acknowledgements to the sending party. If any transmitted DOCUMENT is received in an unintelligible or garbled form, the receiving party shall promptly notify the sending party (if identifiable from the received DOCUMENT) in a reasonable manner. In the absence of such notice, the sending party's records of contents of such DOCUMENT shall control. 3. For Electronic Funds Transfer (EFT), CUSTOMER agrees to electronically transfer funds, as appropriate, to the financial institution and bank account, number shown in Attachment A to this Exhibit D, as the same may be modified from time to time by SELLER upon notice to CUSTOMER within fourteen (14) days of the effective date of such modification. CUSTOMER will make payments in accordance with the National Automated Clearing House Associations (NACHA) Corporation Trading Rules. CUSTOMER's process is governed by and in accordance with Article 4A of the Uniform Commercial Code. CUSTOMER will not be responsible for any loss that may arise by reason of error, mistake or fraud regarding SELLER's information provided in Attachment A. Further, CUSTOMER will be responsible for loss of data only when it is due to the sole negligence of CUSTOMER or its originating bank. 4. The parties agree that a DOCUMENT properly transmitted electronically, including a party's identification, shall be the same as a signed writing, created in the ordinary course of the sending party's business, at or near the time of the events recorded, and transmitted by a person with knowledge of the events. When the DOCUMENT is printed from the electronic records, the DOCUMENT shall be considered an original document. Neither party shall contest the validity of the DOCUMENT on the grounds that it fails to meet the common law D-1 CONFIDENTIAL 56 5. statute of frauds or the statute of frauds found in Section 2-201 of the Uniform Commercial Code, that it fails to meet the business records exception to the hearsay rule or that it fails the best evidence rule because it is not an original document. 6. For matters pertaining to the technical administration of EDI transactions, the parties shall contact the individuals listed below: CUSTOMER: SELLER: Kent Ashton Ribindar Subbian MC: HQA03P03 127 E Weldon Parkway P.O. Box 169001 St. Louis, Missouri 63043-3101 Irving, Texas 75016-9001 314/919-1475 972/751-4342 D-2 CONFIDENTIAL 57 ATTACHMENT A EFT INFORMATION CONFIDENTIAL 58 59 EFT INFORMATION SELLER'S COMPANY NAME: World Wide Technology, Inc. ADDRESS: 127 Weldon Parkway St. Louis, MO 63043 EFT CONTACT NAME: Angie Densmore EFT CONTACT TELEPHONE NO: 314/919-1469 EFT PAYMENTS EXTENDED BY: Five (5) days (EFT payment days will be added to existing payment due dates to neutralize check float.) REMITTANCE METHOD (Please check one of the following): EDI ANSI 820 sent to SELLER's bank with payment --- XX EDI ANSI 820 sent to SELLER's company's EDI mailbox --- Fax remittance to ( )- - --- --- ---- ----- Paper remittance sent to existing remittance address --- SELLER'S FINANCIAL INSTITUTION BANK NAME: [*Confidential treatment will be requested] ADDRESS: [*Confidential treatment will be requested] BANK CALLING OFFICE: BANK CONTACT TELEPHONE NO: BANK TRANSIT ROUTING NO: [*Confidential treatment will be requested] CONFIDENTIAL 60 EFT INFORMATION SELLER'S EFT BANK ACCOUNT NO TO RECEIVE PAYMENTS: [* Confidential treatment will be requested] BANK ACCOUNT NAME: [* Confidential treatment will be requested] ACH FORMAT SELLER'S BANK ACCEPTS (CTX OR CCD+): [* Confidential treatment will be requested] COMBINE EFT REMITTANCE WITH ACH: NO (Yes/No) SELLER's Financial Institution should be consulted since EFT transmission formats are influenced by SELLER's bank capability to receive electronic payments. The above EFT payment instructions are authorized, and the terms and condition stated in this Agreement Number C971312BC002 are accepted by: - -------------------- -------------------- Signature Date - -------------------- -------------------- Printed Name Company Title CONFIDENTIAL 61 Confidential treatment will be requested 62 Confidential treatment will be requested 63 Confidential treatment will be requested 64 Confidential treatment will be requested 65 Confidential treatment will be requested 66 Confidential treatment will be requested 67 Confidential treatment will be requested 68 Confidential treatment will be requested 69 Confidential treatment will be requested 70 Confidential treatment will be requested 71 Confidential treatment will be requested 72 Confidential treatment will be requested 73 Confidential treatment will be requested 74 Confidential treatment will be requested 75 Confidential treatment will be requested 76 EXHIBIT F PRODUCT DELIVERY INTERVAL E-14 CONFIDENTIAL 77 EXHIBIT F PRODUCT DELIVERY INTERVAL SELLER shall ship according to the following time frames. Time shall start after receipt of order. Days shall be working days excluding Saturday, Sunday and Holidays (New Years Day, Martin Luther King Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Friday after Thanksgiving, Christmas Eve and Christmas Day). Standard Fujitsu Plug-in Kits 5 (five) days Standard Fujitsu Rack Systems 7 (seven) days Custom Fujitsu Rack Configurations 14 (fourteen) days* Standard Fujitsu Cabinet Configurations 7 (seven) days Custom Fujitsu Cabinet Configurations 14 (fourteen) days* * Custom rack and cabinet configurations will have been approved by CUSTOMER's Standardization organization and SELLER will have completed the required product engineering before purchase order is issued. F-1 CONFIDENTIAL 78 EXHIBIT G STANDARDIZATION POLICIES, PROCEDURES AND TERMS E-1 CONFIDENTIAL 79 EXHIBIT G STANDARDIZATION POLICIES, PROCEDURES AND TERMS TABLE OF CONTENTS PAGE ---- 1. STANDARDIZATION POLICY.......................................1 2. PRODUCT EVALUATION FUNDING...................................1 3. TECHNOLOGICAL OR SPECIFICATION CHANGE/ PRODUCT DELETION/SUBSTITUTION................................2 4. UNSATISFACTORY CONDITION SITUATIONS..........................2 5. PRODUCT CHANGES..............................................2 6. QUALITY ASSURANCE REPORTING..................................4 E-2 CONFIDENTIAL 80 EXHIBIT G STANDARDIZATION POLICIES, PROCEDURES AND TERMS 1. STANDARDIZATION POLICY The GTE standardization process exists to evaluate and manage the introduction of new or enhanced product and the life-cycle management of embedded PRODUCT. SELLER is encouraged to direct presentation efforts for new or enhanced product offerings to CUSTOMER's standardization and/or testing organization(s) to ensure timely evaluation and consideration of GTE standard product designation for system wide application. The GTE standardization process complements normal SELLER/CUSTOMER interaction required to support existing and future applications of the SELLER's PRODUCT and technology. 2. PRODUCT EVALUATION FUNDING (a) If the parties agree to pursue GTE standardization of new or enhanced product in accordance with CUSTOMER's standardization and/or testing policies and procedures, SELLER agrees to bear all costs associated with required Independent Laboratory Evaluations (ILEs) of the new or enhanced product. Such ILEs shall be used by CUSTOMER's standardization and/or testing organization(s) to assess the quality, reliability and safety of such new or enhanced product prior to possible approval, purchase, and deployment within GTE. ILEs conducted at SELLER's expense do not guarantee product acceptance by CUSTOMER and, if SELLER's product is not standardized by CUSTOMER's standardization and/or testing organization(s) for any reason, CUSTOMER shall not be liable for any cost incurred by SELLER for any such ILEs for any reason. (b) CUSTOMER may determine, from time to time, a need to reevaluate SELLER's PRODUCT, or an Unsatisfactory Condition Report (UCR) for SELLER's PRODUCT, substantiated by CUSTOMER's standardization and/or testing organization(s), may also warrant reevaluation. In such cases, SELLER shall bear any costs associated with ILEs, in accordance with CUSTOMER's standardization and/or testing policies and procedures, to ensure continued quality of PRODUCT purchased and deployed by CUSTOMER. ILEs conducted at SELLER's expense do not guarantee continued PRODUCT acceptance by CUSTOMER and, if SELLER's PRODUCT does not pass reevaluation for any reason, CUSTOMER shall not be liable for any costs incurred by SELLER to such ILEs for any reason. G-1 CONFIDENTIAL 81 3. TECHNOLOGICAL OR SPECIFICATION CHANGE/PRODUCT DELETION/SUBSTITUTION (a) SELLER is required to give CUSTOMER written notice one hundred twenty (120) days in advance of any technological or specification change, Software/firmware revision, PRODUCT deletion or manufacturer discontinuance that would significantly impact PRODUCT operation, interchangeability with existing PRODUCT appearance, warranty, life cycle or GTE engineering/quality approvals of any PRODUCT. SELLER shall, at the time of notification, provide CUSTOMER with (i) a PRODUCT change number; (ii) a description of such change; (iii) the reason for change; (iv) a description of the impact of such change upon reliability, PRODUCT specifications, or form, fit or function; (v) proposed price impact (if any); and (vi) proposed effective date for such change and recommended implementation schedule. (b) SELLER shall conform to the interchangeability rules as outlined in the Telecommunications Industry Forum (TCIF) "TCIF97-001 Interchangeability Guideline" when assigning new part numbers. (c) If the parties fail to reach agreement on any such change in PRODUCT to be made by SELLER, then, in addition to all other rights and remedies at law or in equity or otherwise, CUSTOMER shall, at no cost or liability, have the right to terminate this Agreement and any and all ending purchase orders for PRODUCT affected by such change. (d) SELLER agrees that if the required one hundred twenty (120) days' prior written notice is not provided, SELLER shall accept, at CUSTOMER's option, a PRODUCT exchange or return for all unsold PRODUCT in CUSTOMER's inventory on the effective date of the change. Any PRODUCT returned must be unused, undamaged and in the original carton and may be returned, at Customer's option, for one hundred percent (100%) credit of the price paid or an equal dollar value exchange for any other PRODUCT offered under this Agreement. 4. UNSATISFACTORY CONDITION SITUATIONS If at any time during normal operation CUSTOMER encounters an unsatisfactory condition in the PRODUCT, SELLER agrees to meet the following time frames for resolving the condition: (a) Conditions that affect public or employee safety or the ability to track and collect revenue, that cause major degradation of service, or that impairs the basic functionality of telecommunication service or its support system by degrading the day-to-day services to customers, SELLER shall acknowledge within fifteen (15) days of notification and must provide a permanent resolution within thirty (30) days of notification. (b) Conditions that affect service, but have a temporary solution to reduce the impact, or that have potential for major service degradation, SELLER shall acknowledge G-2 CONFIDENTIAL 82 within fifteen (15) days of notification and must provide a permanent resolution within ninety (90) days of notification. (c) Conditions that are not service or safety affecting but that have potential to adversely affect normal maintenance and/or administration of service, SELLER shall acknowledge within fifteen (15) days and provide a permanent resolution within one hundred eighty (180) days of notification. The parties may agree to action dates to correct unsatisfactory conditions other than those stated above due to upgrades, technological changes, etc. If an exception to the above corrective action time frames occurs, the SELLER is bound by the newly agreed upon date. The term "permanent resolution" shall mean a correction to an unsatisfactory condition in the form of a new or revised hardware or Software module, hardware modification kit, Software patch and/or revised operating or maintenance procedures that are acceptable to CUSTOMER. Corrections that are temporary in nature, such as hardware modification or Software patches, shall be included in the next formal version/release of PRODUCT. 5. PRODUCT CHANGES (a) If, after PRODUCT has been shipped to CUSTOMER, SELLER issues changes affecting such PRODUCT and a change is identified as necessary for the PRODUCT to continue to meet SELLER's published specifications or design criteria, or is an identified correction of a deficiency as a result of a UCR (refer to Section 4, UNSATISFACTORY CONDITION SITUATIONS, above), SELLER shall provide prompt notification of required changes to CUSTOMER's standardization and/or testing organization(s) at the address provided to SELLER for such purpose. SELLER shall, at SELLER's expense, be responsible for all costs for parts, replacement and installation for such change whether implemented by SELLER or CUSTOMER for ten (10) years beyond the PRODUCT warranty period. (b) If CUSTOMER and SELLER ascertain that PRODUCT, or a part thereof, subject to such a change is readily returnable, CUSTOMER or CUSTOMER's agent or contractor shall remove, at SELLER's expense, and return such PRODUCT or part to SELLER's designated repair or manufacturing facility and SELLER, at SELLER's expense, shall implement such changes and return such changed PRODUCT or part to CUSTOMER's designated location. If removal of PRODUCT to be returned to SELLER for modification would create an out-of-service condition, SELLER shall make suitable arrangements to provide replacement PRODUCT to prevent an out-of-service condition from occurring. (c) Any PRODUCT maintained in CUSTOMER's inventory subject to such a change shall be returned to SELLER's designated repair or manufacturing facility to implement changes and shall be returned to CUSTOMER's stocking location at SELLER's expense. If such changes create an adverse impact on the PRODUCT warranty or CUSTOMER's ability to sell the PRODUCT as new, then SELLER shall accept at CUSTOMER's option, a PRODUCT exchange or return for all unchanged PRODUCT in CUSTOMER's inventory. G-3 CONFIDENTIAL 83 (d) All change notifications provided by SELLER to CUSTOMER shall contain the following information: (1) Description of change; (2) Reason for change; (3) Impact on customer service (i.e., outages, system downtime); (4) Price impact, if known; (5) Effective date of changes; and (6) Implementation schedule of change. (e) CUSTOMER may request SELLER to make changes to SELLER's PRODUCT. Upon receipt of a written document describing in detail the changes requested by CUSTOMER, SELLER shall respond in writing to CUSTOMER within thirty (30) days. If SELLER agrees to undertake such modifications for CUSTOMER, the response shall quote a proposed implementation schedule and a cost for such changes to PRODUCT. 6. QUALITY ASSURANCE REPORTING (a) CUSTOMER has the right to rate SELLER's performance in accordance with CUSTOMER's internal rating algorithm. Upon request, CUSTOMER agrees to provide rating information to SELLER without charge. (b) If requested by CUSTOMER, SELLER agrees to have a field reliability and delivery performance tracking system in place as mutually agreed between CUSTOMER and SELLER, and during the term of this Agreement, shall continue the tracking system for as long as CUSTOMER requests. The tracking system shall provide timely internal data collection enabling SELLER to arrive at solutions to delivery, quality and reliability problems related to assembly, subassembly or other repairable module deficiencies as measured against CUSTOMER's requirements. G-4 CONFIDENTIAL 84 EXHIBIT H SELLER'S PRODUCT WARRANTIES, SERVICES AND SUPPORT AND PRODUCT MANUFACTURERS RESPONSIBILITIES AND OBLIGATIONS CONFIDENTIAL 85 EXHIBIT H SELLER'S PRODUCT WARRANTIES, SERVICES AND SUPPORT 1. SCOPE...............................................................1 [*Confidential treatment requested]. 3. PRODUCT REPAIR RETURN ..............................................2 4. REPAIRS BY CUSTOMER ................................................3 5. EMERGENCY REPLACEMENT SERVICE ......................................4 6. CONTINUING AVAILABILITY OF PRODUCT SUPPORT .........................4 7. TECHNICAL SUPPORT FOR PRODUCT.......................................5 8. ON-SITE ASSISTANCE..................................................7 9. PRODUCT MAINTENANCE.................................................7 10. TRAINING............................................................7 11. PRODUCT DOCUMENTATION...............................................7 12. PRODUCT LITERATURE..................................................8 13. COOPERATIVE ADVERTISING.............................................9 14. SUBCONTRACTING .....................................................9 [*Confidential treatment requested]. [*Confidential treatment requested]. [*Confidential treatment requested]. ATTACHMENT D: SELLER's WORKING HOUR SCHEDULE AND CONTACT INFORMATION [*Confidential treatment requested]. ATTACHMENT F: HARDWARE MAINTENANCE CONFIDENTIAL 86 ATTACHMENT G: SOFTWARE MAINTENANCE ATTACHMENT H: TRAINING TERMS AND STANDARDS [Confidential treatment requested] H-ii CONFIDENTIAL 87 EXHIBIT H SELLER'S PRODUCT WARRANTIES, SERVICES AND SUPPORT 1. SCOPE (a) This Exhibit H governs the SELLER's PRODUCT Warranties, Services and Support except as to PRODUCT of a particular manufacturer for which an Exhibit H - is attached. (b) SELLER's Product Warranties, Services and Support and Product Manufacturer's Responsibilities and Obligations shall, in respect to Fujitsu Product, be governed by Exhibit H-2 and, in the case of other manufacturers for which an Exhibit H - is attached, by such an exhibit. * Confidential treatment will be requested H-1-1 CONFIDENTIAL 88 * Confidential treatment will be requested 3. PRODUCT REPAIR RETURN (a) CUSTOMER may provide to SELLER an Equipment Repair Order (ERO) number and/or a purchase order pack list number when returning PRODUCT to SELLER for repair. (b) CUSTOMER shall furnish the following information with PRODUCT returned to SELLER for repairs: (1) CUSTOMER's name and complete address; (2) Name(s) and telephone number(s) of CUSTOMER's employee(s) to contact if there are questions about the PRODUCT to be repaired; (3) "Ship to" address for return of repaired PRODUCT, if different from (1); (4) A complete list of PRODUCT returned; (5) The nature of the defect or failure, if known; and H-1-2 CONFIDENTIAL 89 (6) The PRODUCT warranty status. (c) All PRODUCT shipped to SELLER for repair shall have repair tags attached that are supplied by SELLER free of charge or by CUSTOMER, which shall contain the above stated information. (d) PRODUCT repaired by SELLER shall have the repair completion date stenciled or otherwise identified in a permanent manner in a readily visible location on the PRODUCT and the repaired PRODUCT shall be returned with a tag or other papers describing the repairs that have been made. If SELLER maintains statistical records for repaired PRODUCT, the information shall be made available to CUSTOMER upon request. (e) CUSTOMER and SELLER may mutually agree to such return process as appropriate for PRODUCT(S). 4. REPAIRS BY CUSTOMER (a) CUSTOMER may elect to repair PRODUCT purchased under this Agreement. For that PRODUCT, SELLER agrees to furnish initial and supplemental documentation necessary for the repair of PRODUCT purchased. Transfer of such documentation shall be at no cost to CUSTOMER, for the sole use of CUSTOMER in repairing the PRODUCT, and shall not include the right to sublicense or transfer such documentation to a third party. * Confidential treatment will be requested (c) Repair documentation to be provided to CUSTOMER shall include, but not limited to, the following: (1) Circuit drawings and explanations; (2) Assembly drawings; (3) Material lists; (4) Art work drawings; (5) Component specifications; (6) Supplier cross references; H-1-3 CONFIDENTIAL 90 (7) Repair procedure specifications; and (8) Engineering change orders. (d) Except as provided in Section 1 of this Exhibit, no repair effected by CUSTOMER under this Agreement shall affect any warranty afforded to CUSTOMER. 5. EMERGENCY REPLACEMENT SERVICE (a) If a failure causes a customer service impairment, which failure is caused by PRODUCT furnished under this Agreement, SELLER agrees to ship replacement PRODUCT, by the most expedient means available, within twenty-four (24) hours of verbal notification by CUSTOMER. (1) If the defective or nonconforming PRODUCT is in warranty or is covered under a maintenance agreement, SELLER shall ship new replacement PRODUCT at no charge. If the defective or nonconforming PRODUCT is not returned to SELLER within sixty (60) days from the date of shipment of the new replacement PRODUCT, SELLER may invoice CUSTOMER for such new replacement PRODUCT [*Confidential treatment requested]. (2) If the defective or nonconforming PRODUCT is out of warranty and is not covered under a maintenance agreement, SELLER shall ship new replacement PRODUCT and may invoice CUSTOMER. (b) In order to schedule shipment of replacement PRODUCT, CUSTOMER may telephone SELLER. This service shall be available from SELLER seven (7) days a week, twenty-four (24) hours a day. As specified in Attachment D, CUSTOMER may contact SELLER at the telephone numbers listed during normal working hours and after normal working hours. 6. CONTINUING AVAILABILITY OF PRODUCT SUPPORT (a) SELLER agrees to offer for sale to CUSTOMER, for the respective periods during which the PRODUCT is manufactured by SELLER, and for a period of five (5) years after the PRODUCT has been manufacturer discontinued, functionally equivalent replacement and repair parts. (b) If SELLER is unable or unwilling to supply such parts or SELLER is unable or unwilling to obtain another source of supply for CUSTOMER, then such inability shall be considered noncompliance with this Section and SELLER shall, with neither obligation nor charge to CUSTOMER, provide CUSTOMER with drawings or other documents required to either manufacture or buy such parts and the technical information or any other rights necessary for CUSTOMER to manufacture or obtain such parts from other sources, together with a nonexclusive license to manufacture or purchase such parts for the purpose of supporting CUSTOMER's customer base. H-1-4 CONFIDENTIAL 91 (c) The technical information shall include, by example and not by way of limitation: (1) Manufacturing drawings and specifications of materials and parts comprising the replacement and repair parts and components; (2) Manufacturing drawings and specifications covering special tooling and operation; (3) A detailed list of all commercially available parts and components purchased by SELLER on the open market, disclosing the part number, name and location of the supplier and price lists for the purchase; and (4) One complete copy of the source code used in the preparation of any Software licensed or otherwise acquired by CUSTOMER from SELLER, provided however, that such source code shall remain the property of SELLER and shall be separately licensed to CUSTOMER for CUSTOMER's possession and use exclusively for maintenance of CUSTOMER's and CUSTOMER's customers' PRODUCT. (d) Notwithstanding the above, SELLER shall not be under any obligation to provide source codes for any licensed program for which SELLER either (i) does not own the source code or (ii) does not have rights to disclose such source code. In either event, SELLER shall disclose its licensor or owner of said source code. 7. TECHNICAL SUPPORT FOR PRODUCT (a) SELLER shall make available to CUSTOMER telephone technical support twenty-four (24) hours a day, seven (7) days a week. There shall be no charge for such technical support. Technical support and services shall include, but not be limited to, the provision of the following services: (1) Distribution of a master SELLER's escalation matrix and ongoing updates. This matrix must include names, titles and telephone numbers of individuals within SELLER's technical support organization for problem response escalation. (2) Distribution to GTE's National Operations Center (NOC) personnel of a monthly activity summary report listing the number of times CUSTOMER's personnel contacted SELLER's technical support throughout the month, with the date and time of contact, disposition of the call and the source of any identified problems. (3) Assistance in the diagnosis and resolution of hardware and Software problems and in the analysis of maintenance indices. Also assistance in expediting priority replacement parts or systems required on an emergency basis. (4) On-line remote monitoring of sites, as mutually agreed, to provide assistance in problem identification and resolution. H-1-5 CONFIDENTIAL 92 (5) Assistance in the support of the initial implementation of newly developed PRODUCT and during installation of significant PRODUCT updates and/or changes. (6) Support in the preparation and analysis of failure and discrepancy reports, as required. (7) Cooperation in providing guidelines and documentation to ensure the necessary tracking and resolution of engineering, installation and service complaints. (b) When CUSTOMER contacts SELLER for technical support, SELLER must provide caller with a control number if resolution cannot be completed over the telephone. SELLER shall provide the caller a verbal status, disposition or resolution of the reported problem within two (2) hours of notification. At the discretion of CUSTOMER, the problem may be escalated in accordance with SELLER's escalation matrix. (c) SELLER's technical support shall meet the following emergency resolution intervals: (1) Total Outage -- 2 Hours The PRODUCT has stopped performing the function for which it was purchased (providing no service). (2) Safety Hazard -- 2 Hours The PRODUCT has a defect that may pose a safety hazard to employees or customers. (3) Partial Outage -- 4 Hours The PRODUCT is providing limited service for which it was purchased. (4) Loss of Redundancy -- 24 Hours Any redundant part of the PRODUCT is operating in a simplex mode. (5) Customer-Affecting Trouble -- 72 Hours The PRODUCT is providing the service for which it was purchased; however, at times that service deteriorates. H-1-6 CONFIDENTIAL 93 8. ON-SITE ASSISTANCE (a) Prior to any on-site assistance, the solution to specific problems shall be discussed and resolved, whenever possible, by telephone, as outlined in Section 7, TECHNICAL SUPPORT FOR PRODUCT, of this Exhibit. If requested by CUSTOMER, SELLER agrees to furnish on-site assistance in a time frame as mutually agreed by the parties and in accordance with SELLER's prevailing rates, [*Confidential treatment requested]. Current rates, [*Confidential treatment requested], shall not be changed by SELLER without written notice to CUSTOMER sixty (60) days in advance of such change, which must be mutually agreed upon by both parties. (b) In cases of out-of service emergencies, customer-affecting failures and/or when other critical factors apply, SELLER agrees to provide on-site assistance within eight (8) hours of CUSTOMER request, within the limits of available transportation. (c) When requested, SELLER shall provide a qualified individual familiar with the PRODUCT, at no expense to CUSTOMER, for a period to be mutually agreed to at the first installation of newly developed PRODUCT or PRODUCT enhancement, updates or changes in each designated CUSTOMER area. 9. PRODUCT MAINTENANCE This Agreement in itself does not purchase any services or maintenance. Any request for services or maintenance shall only be provided for in CUSTOMER's purchase order, or through the request procedure set out in this Agreement. (a) Pursuant to CUSTOMER's issuance of a purchase order(s) to SELLER for hardware maintenance, such hardware maintenance shall be provided in accordance with the terms and conditions as set forth in Attachment F. (b) Pursuant to CUSTOMER's issuance of a purchase order(s) to SELLER for Software maintenance, such Software maintenance shall be in accordance with the terms and conditions as set forth in Attachment G. 10. TRAINING During the term of the Agreement, SELLER shall provide training in accordance with the terms and standards set forth in Attachment H. 11. PRODUCT DOCUMENTATION (a) During the term of this Agreement, SELLER shall support PRODUCT by maintaining and providing, at no charge, documentation, preferably in a mechanized format, on the following: (1) Administration; (2) Features and technical specifications; H-1-7 CONFIDENTIAL 94 (3) Detailed engineering and circuit design; (4) Installation and testing; (5) Operations, provisioning and translations; (6) Test and acceptance; (7) Maintenance and diagnostics; and (8) Other documentation deemed necessary by CUSTOMER to support the maintenance and operation of the PRODUCT. (b) SELLER shall maintain a, record of PRODUCT documentation provided to CUSTOMER and shall provide updates, at no charge, in accordance with that record. (c) All initial documentation and any updates shall be submitted by SELLER to CUSTOMER for review and preparation of CUSTOMER's cover sheets and addenda, as required, prior to any distribution or shipment with PRODUCT purchased by CUSTOMER. SELLER shall review and reply to any suggested change provided by CUSTOMER as a result of the review. (d) Any GTE Practice (GTEP) written by SELLER in support of the PRODUCT shall be written in accordance with the guidelines provided by CUSTOMER. (e) SELLER shall provide, upon CUSTOMER's request, one master (camera ready) photographic replication of PRODUCT suitable for use in CUSTOMER's product catalog publications. (f) SELLER grants to CUSTOMER a fully paid license, at no additional charge, for the term of this Agreement, to copy or otherwise reproduce all or portions of SELLER's PRODUCT documentation. Such reproduction shall be for CUSTOMER's own internal use. 12. PRODUCT LITERATURE (a) SELLER agrees to provide CUSTOMER with reasonable amounts of PRODUCT literature, at no additional charge, to properly support SELLER's PRODUCT. (b) SELLER grants to CUSTOMER a fully paid license, at no additional charge, for the term of this Agreement, to copy or otherwise reproduce all or portions of SELLER's PRODUCT brochures, or to incorporate portions of SELLER copyrighted material in PRODUCT brochures or advertising material composed by CUSTOMER, provided that CUSTOMER shall submit such material composed by CUSTOMER that incorporates such SELLER copyrighted material for SELLER's prior approval, which approval shall not be unreasonably withheld. Such reproduction shall not H-1-8 CONFIDENTIAL 95 apply to proprietary and/or confidential information and shall be subject to all applicable copyright laws. 13. COOPERATIVE ADVERTISING During the term of this Agreement, SELLER shall work in good faith with CUSTOMER to develop a mutually agreed upon program of cooperative advertising and/or joint promotion. 14. SUBCONTRACTING CUSTOMER reserves the right to enlist other contractors for engineering, installation or maintenance services with respect to SELLER's PRODUCT. H-1-9 CONFIDENTIAL 96 CONFIDENTIAL * Confidential treatment will be requested 97 CONFIDENTIAL * Confidential treatment will be requested 98 CONFIDENTIAL * Confidential treatment will be requested 99 ATTACHMENT D SELLER'S WORKING HOUR SCHEDULE AND CONTACT INFORMATION CONFIDENTIAL 100 ATTACHMENT E CONFIDENTIAL * Confidential treatment will be requested 101 ATTACHMENT F HARDWARE MAINTENANCE CONFIDENTIAL 102 ATTACHMENT G SOFTWARE MAINTENANCE CONFIDENTIAL 103 ATTACHMENT H TRAINING TERMS AND STANDARDS CONFIDENTIAL 104 ATTACHMENT H TRAINING TERMS AND STANDARDS 1. SELLER shall provide qualified instructors and the necessary instruction material, as mutually agreed upon, to train CUSTOMER's personnel in the marketing, installation, database preparation and administration, operation, and maintenance of PRODUCT furnished in a cost effective manner. 2. SELLER shall also establish and/or maintain curricula to include, but not limited to, the following: (a) PRODUCT overview and introduction (e.g., features, functions, benefits, nomenclature, architecture); (b) Engineering, installation and maintenance; (c) Basic operation and administration; (d) Sizing, configuration and PRODUCT ordering; (e) Planning and budgetary guidelines; and (f) Other subjects deemed necessary by CUSTOMER to support the PRODUCT. 3. SELLER shall change, modify, update and/or add training programs as new PRODUCT features/releases are made available. 4. SELLER shall maintain a technical training facility and provide CUSTOMER a course listing of all training courses available to CUSTOMER, notify CUSTOMER of any curriculum changes and identify those courses that are critical in the support of the PRODUCT. Training shall be offered on a regular basis and SELLER shall attempt to meet any reasonable request for additional or unscheduled training required by CUSTOMER. Additional courses may be scheduled with sixty (60) days prior written notice. 5. SELLER shall offer to CUSTOMER training classes at no additional cost, for every $ purchased/licensed by CUSTOMER from SELLER during each year of this Agreement. CUSTOMER shall bear the cost of transportation, meals, lodging or any other incidental expenses of CUSTOMER personnel to, from and during training. All charges for training, over and above that offered at no charge, shall be as shown in Attachment 1. Prices shall not be changed by SELLER without written notice to CUSTOMER ( ) days in advance of such change, and must be mutually agreed upon by both parties. 6. SELLER agrees to extend an additional % discount on SELLER's PRODUCT purchased by CUSTOMER for the sole purpose of training CUSTOMER employees on the use of the PRODUCT. 7. SELLER shall, at no charge to CUSTOMER, provide copies of all training materials to the CUSTOMER's training department for review of quality and applicability to CUSTOMER's H - 1, H - 1 CONFIDENTIAL 105 training requirements. SELLER shall provide a plan for the correction of deficiencies identified in such review. 8. If requested by CUSTOMER, SELLER shall, at a mutually agreeable cost, conduct "Train the Trainer" classes on sales, installation, maintenance, and engineering of SELLER's PRODUCT for CUSTOMER instructors, at a mutually agreed upon location. 9. SELLER shall provide, upon CUSTOMER request, one master (camera ready) copy of any sales, installation, maintenance, and engineering courseware required for CUSTOMER's instructors to train on SELLER's PRODUCT. The courseware shall contain an instructor guide, student materials and any additional aides required to present the course. These master copy materials shall be provided at no cost. SELLER shall provide CUSTOMER with reproduction rights for these materials. These materials shall not be distributed to any nonCUSTOMER organization. 10. CUSTOMER may audit SELLER conducted training to ascertain if the materials are presented in a quality manner. The costs of such audits shall be at no charge. Any recommendations offered by CUSTOMER shall be incorporated for future training classes in a timely manner. 11. SELLER certified CUSTOMER instructors shall be afforded the same consideration as SELLER's instructors in regard to course modifications and updates. SELLER shall assure that CUSTOMER's instructors have the same updated material as SELLER's instructors. 12. SELLER shall provide CUSTOMER's instructors, at no cost, technical/operational support in the form of reasonable telephone consulting assistance relating to the content of courseware. 13. SELLER shall provide, at the actual cost of reproduction, copies of all training materials required to support CUSTOMER's embedded base of PRODUCT that SELLER may have declared as discontinued or obsolete. H - 1, H - 2 CONFIDENTIAL 106 CONFIDENTIAL * Confidential treatment will be requested 107 EXHIBIT H-2 SELLER'S PRODUCT WARRANTIES, SERVICES AND SUPPORT AND PRODUCT. MANUFACTURER'S RESPONSIBILITIES AND OBLIGATIONS FUJITSU TABLE OF CONTENTS 1. PARTIES...............................................................................................1 * Confidential treatment will be requested * Confidential treatment will be requested * Confidential treatment will be requested 5. REPAIRS BY CUSTOMER...................................................................................5 6. EMERGENCY REPLACEMENT SERVICE.........................................................................5 7. CONTINUING AVAILABILITY OF PRODUCT SUPPORT............................................................5 8. TECHNICAL SUPPORT FOR PRODUCT.........................................................................6 9. ON-SITE ASSISTANCE....................................................................................8 10. PRODUCT MAINTENANCE...................................................................................8 11. TRAINING..............................................................................................8 12. PRODUCT DOCUMENTATION.................................................................................9 13. PRODUCT LITERATURE...................................................................................10 14. COOPERATIVE ADVERTISING..............................................................................10 15. SUBCONTRACTING.......................................................................................10 16. LABOR SERVICES.......................................................................................10 17. SOFTWARE LICENSE.....................................................................................10 18. INFRINGEMENT.........................................................................................10
H - 2 - 1 CONFIDENTIAL 108 19. INDEMNIFICATION AND INSURANCE........................................................................10 SIGNATURES...........................................................................................11 * Confidential treatment will be requested * Confidential treatment will be requested * Confidential treatment will be requested * Confidential treatment will be requested ATTACHMENT F: HARDWARE MAINTENANCE ATTACHMENT G: SOFTWARE MAINTENANCE ATTACHMENT H: TRAINING TERMS AND STANDARDS * Confidential treatment will be requested ATTACHMENT J: ADDITIONAL MANUFACTURER'S RESPONSIBILITIES AND OBLIGATIONS
H - 2 - 2 CONFIDENTIAL 109 EXHIBIT H-2 SELLER'S PRODUCT WARRANTIES, SERVICES AND SUPPORT AND PRODUCT MANUFACTURER'S RESPONSIBILITIES AND OBLIGATIONS FUJITSU 1. PARTIES (a) This EXHIBIT H-2, is made between World Wide Technology, 1nc. (SELLER), Fujitsu Network Communications, Inc. (Manufacturer) and GTE Communication Systems Corporation (CUSTOMER) acting through its GTE Supply Division. (b) This EXHIBIT H-2, is attached to and made a part of that certain Product Purchase Agreement No. C971312BC002, dated effective November 1, 1997 (the "Agreement") between World Wide Technology, Inc. (SELLER) and GTE Communication Systems Corporation (CUSTOMER) acting through its GTE Supply Division. (c) This EXHIBIT H-2, applies to Manufacturer's PRODUCT(S) which are furnished to CUSTOMER through SELLER. (d) The PARTIES agree that if there is a conflict between this EXHIBIT H-2, and the main part of the Agreement, the main part of the Agreement shall control. This shall not be construed to release Manufacturer of any of its obligations under the Product Purchase Agreement No. C951312P0001, dated effective January 1, 1996 with CUSTOMER. (e) The PARTIES further agree that Manufacturer's obligations as to PRODUCT (and services) are only in respect to PRODUCT supplied directly, or indirectly (through SELLER) by Manufacturer and services related thereto. (f) The PARTIES further agree that CUSTOMER may not resell PRODUCT to any third party that is a current direct account of Manufacturer. CUSTOMER shall inquire with SELLER and/or Manufacturer as to which third parties are direct accounts of Manufacturer. (g) The PARTIES further agree that this Exhibit H-2 shall be amended following execution of the new Product Purchase Agreement (PPA) currently being negotiated between CUSTOMER and Manufacturer. Such amendment(s) shall modify Manufacturer's additional responsibilities and obligations hereunder consistent with the parallel provisions of such new PPA or as it may be amended from time to time. H - 2 - 1 CONFIDENTIAL 110 * Confidential treatment will be requested H - 2 - 2 CONFIDENTIAL 111 H - 2 - 3 CONFIDENTIAL * Confidential treatment will be requested 112 [*Confidential treatment requested]. 4. PRODUCT REPAIR RETURN (a) CUSTOMER may provide to Manufacturer an Equipment Repair Order (ERO) number and/or a purchase order pack list number when returning PRODUCT to Manufacturer for repair. (b) CUSTOMER shall furnish the following information with PRODUCT returned to Manufacturer for repairs: (1) CUSTOMER's name and complete address; (2) Name(s) and telephone number(s) of CUSTOMER's employee(s) to contact if there are questions about the PRODUCT to be repaired; (3) "Ship to" address for return of repaired PRODUCT, if different from (1); (4) A complete list of PRODUCT returned; (5) The nature of the defect or failure, if known; and (6) The PRODUCT warranty status and the date of manufacture. (c) All PRODUCT shipped to Manufacturer for repair shall have repair tags attached that are supplied by Manufacturer free of charge or by CUSTOMER, which shall contain the above stated information. (d) PRODUCT repaired by Manufacturer shall have the repair completion date stenciled or otherwise identified in a permanent manner in a readily visible location on the PRODUCT and the repaired PRODUCT shall be returned with a tag or other papers describing the repairs that have been made. If Manufacturer maintains statistical H - 2 - 4 CONFIDENTIAL 113 records for repaired PRODUCT, the information shall be made available to CUSTOMER upon request. 5. REPAIRS BY CUSTOMER (a) CUSTOMER may elect to repair Manufacturer's PRODUCT purchased under this Agreement. For that PRODUCT, Manufacturer agrees to work with CUSTOMER to develop a repair program and furnish initial and supplemental documentation necessary for the repair of PRODUCT purchased. Transfer of such documentation shall be at no cost to, CUSTOMER, for the sole use of CUSTOMER in repairing the PRODUCT, and shall not include the right to sublicense or transfer such documentation to a third party. (b) Manufacturer agrees to sell to CUSTOMER the necessary components for said repairs at the prices to be mutually agreed upon. (c) Repair documentation to be provided to CUSTOMER shall be mutually agreed upon by the parties. 6. EMERGENCY REPLACEMENT SERVICE (a) If a failure causes a customer service impairment, which failure is caused by PRODUCT furnished under this Agreement, Manufacturer agrees to work with SELLER to ship replacement PRODUCT, by the most expedient means available, within twenty-four (24) hours of verbal notification by CUSTOMER. (1) If the defective or nonconforming PRODUCT is in warranty or is covered under a maintenance agreement, Manufacturer shall work with SELLER to ship new replacement PRODUCT at no charge. If the defective or nonconforming PRODUCT is not returned to Manufacturer within sixty (60) days from the date of shipment of the new replacement PRODUCT, SELLER may invoice CUSTOMER for such new replacement PRODUCT [* Confidential treatment will be requested] (2) If the defective or nonconforming PRODUCT is out of warranty and is not covered under a maintenance agreement, Manufacturer shall work with SELLER to ship new replacement PRODUCT and SELLER may invoice CUSTOMER [* Confidential treatment will be requested] (b) In order to schedule shipment of replacement PRODUCT, CUSTOMER may telephone Manufacturer. This service shall be available from Manufacturer seven (7) days a week, twenty-four (24) hours a day. As specified in Attachment D, CUSTOMER may contact Manufacturer at the telephone numbers listed during normal working hours and after normal working hours. 7. CONTINUING AVAILABILITY OF PRODUCT SUPPORT (a) Manufacturer agrees to offer for sale to CUSTOMER, for the respective periods during which the PRODUCT is manufactured by Manufacturer, and for a period of ten (10) years after the PRODUCT has been manufacturer discontinued, functionally equivalent replacement and repair parts. H - 2 - 5 CONFIDENTIAL 114 (b) If Manufacturer is unable or unwilling to supply such parts or Manufacturer is unable or unwilling to obtain another source of supply for CUSTOMER, then such inability shall be considered noncompliance with this Section and Manufacturer shall to the extent that Manufacturer is able to do so with neither obligation nor charge to CUSTOMER, provide CUSTOMER with drawings or other documents required to either manufacture or buy such parts and the technical information or any other rights necessary for CUSTOMER to manufacture or obtain such parts from other sources. (c) The technical information shall include, by example and not by way of limitation: (1) Manufacturing drawings and specifications of materials and parts comprising the replacement and repair parts and components; (2) Manufacturing drawings and specifications covering special tooling and operation; (3) A detailed list of all commercially available parts and components purchased by Manufacturer on the open market, disclosing the part number, name and location of the supplier; and (4) One complete copy of the source code used in the preparation of any Software licensed or otherwise acquired by CUSTOMER from Manufacturer, provided however, that such source code shall remain the property of Manufacturer and shall be separately licensed to CUSTOMER for CUSTOMER's possession and use exclusively for maintenance of CUSTOMER's and CUSTOMER's customers' PRODUCT. (d) Notwithstanding the above, Manufacturer shall not be under any obligation to provide source codes for any license program for which Manufacturer either (i) does not own the source code or (ii) does not have rights to disclose such source code. In either event, Manufacturer shall disclose its licensor or owner of said source code. 8. TECHNICAL SUPPORT FOR PRODUCT (a) Manufacturer shall make available to CUSTOMER telephone technical support at (1-800/873-3822), twenty-four (24) hours a day, seven (7) days a week. There shall be no charge for such technical support. Technical support and services shall include, but not be limited to, the provision of the following services: (1) Distribution of a master Manufacturer's escalation matrix and ongoing updates. This matrix must include names, titles and telephone numbers of individuals within Manufacturers technical support organization for problem response escalation. (2) Distribution to GTE's National Operations Center (NOC) personnel of a monthly activity summary report listing the number of times CUSTOMER's personnel contacted Manufacturer's technical support throughout the month, with the date and time of contact, disposition of the call and the source of any identified problems. H - 2 - 6 CONFIDENTIAL 115 (3) Assistance in the diagnosis and resolution of hardware and Software problems and in the analysis of maintenance indices. Also assistance in expediting priority replacement parts or systems required on an emergency basis. (4) On-line remote monitoring of sites, as mutually agreed, to provide assistance in problem identification and resolution. (5) Assistance in the support of the initial implementation of newly developed PRODUCT and during installation of significant PRODUCT updates and/or changes. (6) Support in the preparation and analysis of failure and discrepancy reports, as required. (7) Cooperation in providing guidelines and documentation to ensure the necessary tracking and resolution of engineering, installation and service complaints. (b) When CUSTOMER contacts Manufacturer for technical support, Manufacturer must provide caller with a control number if resolution cannot be completed over the telephone. Manufacturer shall provide the caller a verbal status, disposition or resolution of the reported problem within two (2) hours of notification. At the discretion of CUSTOMER, the problem may be escalated in accordance with Manufacturer's escalation matrix. (c) Manufacturer's technical support shall meet the following emergency resolution intervals during which period Manufacturer shall identify a course of action for implementing a remedy: (1) Total Outage - .................................2 Hours The PRODUCT has stopped performing the function for which it was purchased (providing no service). (2) Safety Hazard - ................................2 Hours The PRODUCT has a defect that may pose a safety hazard to employees or customers. (3) Partial Outage - ...............................4 Hours The PRODUCT is providing limited service for which it was purchased. (4) Loss of Redundancy -...........................24 Hours Any redundant part of the PRODUCT is operating in a simplex mode. H - 2 -7 CONFIDENTIAL 116 (5) Customer-Affecting Trouble - ..................72 Hours The PRODUCT is providing the service for which it was purchased; however, at times that service deteriorates. 9. ON-SITE ASSISTANCE (a) Prior to any on-site assistance, the solution to specific problems shall be discussed and resolved, whenever possible, by telephone, as outlined in Section 8, TECHNICAL SUPPORT FOR PRODUCT, of this Exhibit H-2. If requested by CUSTOMER, Manufacturer agrees to furnish on-site assistance in a time frame as mutually agreed by the parties and in accordance with Manufacturer's prevailing rates, [* Confidential treatment will be requested] shall not be changed by Manufacturer without written notice to CUSTOMER and SELLER ninety (90) days in advance of such change, which must be mutually agreed upon by both parties. (b) In cases of out-of service emergencies, customer-affecting failures and/or when other critical factors apply, Manufacturer agrees to provide on-site assistance within eight (8) hours of CUSTOMER request, within the limits of available transportation and Manufacturer's personnel resources. (c) When requested, Manufacturer shall provide a qualified individual familiar with the PRODUCT, at no expense to CUSTOMER, for a period of three (3) days at the first installation of newly developed PRODUCT or PRODUCT enhancement, updates or changes in each designated CUSTOMER area. 10. PRODUCT MAINTENANCE (a) This Agreement in itself does not purchase any services or maintenance. Any request for services or maintenance shall only be provided for in CUSTOMER's purchase order, or through the request procedure set out in this Agreement. (b) Pursuant to CUSTOMER's issuance of a purchase order(s) to Manufacturer for hardware maintenance, such hardware maintenance shall be provided in accordance with the terms and conditions as set forth in Attachment F. (c) Pursuant to CUSTOMER's issuance of a purchase order(s) to Manufacturer for Software maintenance, such Software maintenance shall be in accordance with the terms and conditions as set forth in Attachment G. 11. TRAINING During the term of the Agreement, Manufacturer shall provide training in accordance with the terms and standards set forth in Attachment H [* Confidential treatment will be requested] H - 2 - 8 CONFIDENTIAL 117 12. PRODUCT DOCUMENTATION (a) During the term of this Agreement, Manufacturer shall support PRODUCT by maintaining and providing documentation, preferably in a mechanized format, on the following: (1) Administration; (2) Features and technical specifications; (3) Detailed engineering and circuit design; (4) Installation and testing; (5) Operations, provisioning and translations; (6) Test and acceptance; (7) Maintenance and diagnostics; and (8) Other documentation deemed necessary by CUSTOMER to support the maintenance and operation of the PRODUCT. (b) Three (3) sets of site specific documentation including one (1) set of PRODUCT documentation will be provided at no additional charge with each order. Otherwise, additional sets of documentation will be supplied to CUSTOMER at no charge only upon specific written request therefor. (c) Manufacturer shall maintain a record of PRODUCT documentation except Software products provided to CUSTOMER and shall provide updates, at no charge, in accordance with that record. (d) All initial documentation and any updates shall be submitted by Manufacturer to CUSTOMER for review and preparation of CUSTOMER's cover sheets and addenda, if requested by CUSTOMER prior to any distribution or shipment with PRODUCT purchased by CUSTOMER. Manufacturer shall review and reply to any suggested change provided by CUSTOMER as a result of the review. (e) Any GTE Practice (GTEP) written by Manufacturer in support of the PRODUCT shall be written in accordance with the guidelines provided by CUSTOMER. (f) Manufacturer shall provide, upon CUSTOMER's request, one master (camera ready) photographic replication of PRODUCT suitable for use in CUSTOMER's product catalog publications. (g) Manufacturer grants to CUSTOMER a fully paid license, at no additional charge, for the term of this Agreement, to copy or otherwise reproduce all or portions of Manufacturer's PRODUCT documentation. Such reproduction shall be for CUSTOMER's own internal use. H - 2 - 9 CONFIDENTIAL 118 13. PRODUCT LITERATURE (a) Manufacturer agrees to provide CUSTOMER with reasonable amounts of PRODUCT literature, at no additional charge, to properly support Manufacturer's PRODUCT. (b) Manufacturer grants to CUSTOMER a fully paid license, at no additional charge, for the term of this Agreement, to copy or otherwise reproduce all or portions of Manufacturer's PRODUCT brochures, or to incorporate portions of Manufacturer copyrighted material in PRODUCT brochures or advertising material composed by CUSTOMER, provided that CUSTOMER shall submit such material composed by CUSTOMER that incorporates such Manufacturer copyrighted material for Manufacturer's prior approval, which approval shall not be unreasonably withheld. Such reproduction shall not apply to proprietary and/or confidential information and shall be subject to all applicable copyright laws. All reproductions incorporating copyrighted material shall include Manufacturer's copyright as proprietary notice on all copies. 14. COOPERATIVE ADVERTISING During the term of this Agreement, Manufacturer shall work in good faith with CUSTOMER to develop a mutually agreed upon program of cooperative advertising and/or joint promotion. 15. SUBCONTRACTING CUSTOMER reserves the right to enlist other contractors for engineering, installation or maintenance services with respect to Manufacturer's PRODUCT. 16. LABOR SERVICES Should Manufacturer wish to be employed by CUSTOMER and CUSTOMER wish to employ Manufacturer to perform certain work in connection with the functions of engineering, construction, installation, or maintenance of equipment and/or facilities, Manufacturer shall enter into a General Agreement for Engineering, Construction, Installation, or Maintenance of Telephone Plant (the "General Agreement") with the telephone company affiliates of CUSTOMER to set forth the mutual rights and obligations of the parties and the manner in which such work shall be performed. 17. SOFTWARE LICENSE Manufacturer shall provide Software license as set forth in Attachment J. 18. INFRINGEMENT Manufacturer shall provide infringement indemnity as set forth in Attachment J. 19. INDEMNIFICATION AND INSURANCE Manufacturer shall provide indemnification and insurance as set forth in Attachment J. H - 2 - 10 CONFIDENTIAL 119 Each party represents that it has executed this Agreement through its authorized corporate representative: WORLD WIDE TECHNOLOGY, INC. GTE COMMUNICATION SYSTEMS CORPORATION By: /s/ David L. Steward By: /s/ M. R. Redmond ------------------------------------- ----------------------------------- Name: DAVID L. STEWARD Name: M. R. Redmond Title: CHAIRMAN & CEO Title: Assistant Vice President- Contract Management Date: 1/13/98 Date: 1-9-98 FUJITSU NETWORKING COMMUNICATIONS, INC. By: /s/ George Chase APPROVED AS TO FORM AND LEGALITY ------------------------------------ Name: George Chase /s/ J. R. Seastrom ------------------------------------- Title: Executive Vice President - FNC Attorney, GTE Telephone Operations Date: 1-9-98 Date: 1/9/98 H - 2 - 11 CONFIDENTIAL 120 [*Confidential treatment requested]. CONFIDENTIAL 121 * Confidential treatment will be requested H-2, A-1 CONFIDENTIAL 122 CONFIDENTIAL * Confidential treatment will be requested 123 *Confidential treatment will be requested. H-2, B-1 CONFIDENTIAL 124 CONFIDENTIAL *Confidential treatment will be requested. 125 EXHIBIT H-2 ATTACHMENT D MANUFACTURER'S WORKING HOUR SCHEDULE AND CONTACT INFORMATION CONFIDENTIAL 126 EXHIBIT H-2 ATTACHMENT D MANUFACTURER'S WORKING HOUR SCHEDULE AND CONTACT INFORMATION TELEPHONE CONSULTATION To facilitate the repair, servicing and support of PRODUCT hereunder, CUSTOMER may contact Manufacturer at 1-800/873-3822 with any questions that may arise concerning repair, servicing and support of the PRODUCT, and, if required, to specify any special packing of PRODUCT that might be necessary adequate in-transit protection from transportation damage. CUSTOMER may call this number twenty four (24) hours a day, seven (7) days a week. H-2, D-1 CONFIDENTIAL 127 CONFIDENTIAL *Confidential treatment will be requested. 128 *Confidential treatment will be requested. H-2, E-1 CONFIDENTIAL 129 EXHIBIT H-2 ATTACHMENT F HARDWARE MAINTENANCE (To be negotiated at a later date) CONFIDENTIAL 130 EXHIBIT H-2 ATTACHMENT G SOFTWARE MAINTENANCE CONFIDENTIAL 131 EXHIBIT H-2 ATTACHMENT G SOFTWARE MAINTENANCE SELLER has granted to CUSTOMER a license (License), effective November 1, 1997, for CUSTOMER's right to use Manufacturers FLEXR(R)-Plus Software; and CUSTOMER desires for Manufacturer to provide maintenance services as described below for the Software (SERVICES) and Manufacturer agrees to provide the SERVICES in accordance with the terms and conditions of this Attachment. 1. STANDARD MAINTENANCE SERVICES (a) Scope of Services - During the term of this Agreement, Manufacturer will provide to CUSTOMER the following SERVICES for the Software: (1) Corrections of substantial defects in the Software that impact its ability to provide service as advertised: (2) Periodic Baseline Software Updates (BSU) that shall contain FLEXR-Plus Software enhancements to support all new features in the Fujitsu lightwave Multiplexers (FLM) and FACTR-PRODUCT. BSUs ensure that FLEXR Plus Software will always support the latest features in all Manufacturer's network elements; (3) Unlimited telephone support during normal business hours (8 a.m. to 5 p.m. Central Time, Monday through Friday, excluding holidays), including dial-up support via modem to assist CUSTOMER in setup, usage and troubleshooting Software. CUSTOMER may obtain assistance by calling Manufacturer's Technical Assistance Center (TAC) at 1-800/873-3822; (4) Emergency assistance outside of normal business hours for critical problems. Critical problems are considered to be those that cause a system failure that results in the loss of all transaction processing capability and/or the inability to restart the Software; (5) Monthly call reports outlining trouble calls and solutions placed through the Manufacturer TAC. The tracking of these calls enables report generation capabilities; (6) Technical Information Bulletins to provide special instructions and information; FLEXR(R) is a registered trademark of Fujitsu Network Communications, Inc. H-2, G-1 CONFIDENTIAL 132 (7) FLEXR Plus Software documentation updates and revisions. These updates will be in addition to the normal BSU documentation; (8) Up to two (2) free on-site visits by Manufacturer's personnel per year. Each on-site visit is limited to sixteen (16) working hours. Additional on-site visits will be billed to CUSTOMER [*Confidential treatment will be requested.]. Should Manufacturer perform the initial Software installation, said installation shall count as one (1) free on-site visit. Unused on-site visits shall- not accumulate upon the yearly automatic renewal of this Agreement; and (9) Off-site tape backup storage to ensure backup of the initial installation in the event the database becomes corrupted or the hardware fails. Tape backups will be made at the time of FLEXR-Plus Software installation and during the free site visit. In addition, CUSTOMER shall have the tight to perform its own tape backup at any time and mail the tape to Manufacturer for storage. Any tape backup made in the manner should be sent to Manufacturer at the following address: Fujitsu Network Transmission Systems, Inc. 2801 Telecom Parkway Richardson, Texas 75082 Attn: Manager-Product Support (b) Services Not Included. SERVICES do not include: (1) Charged-for-enhancements that are offered, at Manufacturer's sole discretion, to CUSTOMERS upon payment of a license fee; (2) Custom programming services; (3) On-site support other than as set forth in subparagraph 1 (a)(9) above; (4) Training; and (5) Hardware and related supplies 2. CHARGED-FOR-ENHANCEMENTS From time to time, at Manufacturer's sole discretion, Manufacturer will make available to CUSTOMER charged-for-enhancements to the Software that CUSTOMER may license from Manufacturer upon payment of the license fee established by Manufacturer. 3. CUSTOM PROGRAMMING SERVICES Manufacturer will provide custom programming services to CUSTOMER, as agreed to in a written addendum to this Agreement, signed by both parties, that specifies the custom programming services to be provided by Manufacturer and the fee for the services. Custom programming services shall include, but are not limited to, development of custom computer programs and installation, training and maintenance with respect to such computer programs. H-2, G-2 CONFIDENTIAL 133 4. ON-SITE SUPPORT Manufacturer, upon receipt of a written request from CUSTOMER, will provide to CUSTOMER on-site support at a mutually agreed upon time. For on-site visits not covered by paragraph (1)(a)(8), above, CUSTOMER agrees to pay Manufacturer all costs associate with the provision of on-site support, including charges for Manufacturer's personnel, expenses fortra- -1, and miscellaneous charges, and taxes pursuant to paragraph 6(c) below. 5. TRAINING Upon receipt of a written request from CUSTOMER, Manufacturer will provide training at a mutually agreed upon time at the office of Manufacturer in Richardson, Texas, unless Manufacturer agrees to conduct the training elsewhere. CUSTOMER agrees to pay Manufacturer all costs associated with this training, including (i) charges for Manufacturer's instructors to train CUSTOMER's personnel, which shall include a surcharge for training conducted at CUSTOMER's location, (ii) charges for travel, lodging and miscellaneous expenses, and (iii) taxes pursuant to Section 7 below. *Confidential treatment will be requested. H-2, G-3 CONFIDENTIAL 134 7. PAYMENT TERMS Manufacturer shall invoice CUSTOMER for maintenance fees due pursuant to Section 6 herein. Payment shall be thirty (30) days from the date of receipt of Manufacturers invoice. CUSTOMER agrees to pay all other amounts due Manufacturer for SERVICES under this Agreement in accordance with the payment schedule set forth on Manufacturer's invoice for the SERVICES. 8. OBLIGATIONS OF CUSTOMER (a) Customer Contact. Manufacturer requests that. CUSTOMER identify its CUSTOMER contact designee. To the maximum extent practicable, CUSTOMER's communications with Manufacturer will be through the CUSTOMER contact. (b) Facility and Personnel Access. CUSTOMER agrees to grant Manufacturer access to CUSTOMER's facilities and personnel concerned with the operation of the Software to enable Manufacturer to provide SERVICES. (c) No Modification of Software. CUSTOMER agrees not to modify or otherwise alter the Software, unless specifically authorized by the prior written consent of Manufacturer. (d) Error Documentation. Upon detection of any error in the Software, CUSTOMER, as requested by Manufacturer, agrees to provide Manufacturer with a listing of output and any other data, including databases and backup systems, that Manufacturer reasonably may request in order to reproduce operating conditions to those present when the error occurred. H-2, G-4 CONFIDENTIAL 135 EXHIBIT H-2 ATTACHMENT H TRAINING TERMS AND STANDARDS CONFIDENTIAL 136 EXHIBIT H-2 ATTACHMENT H TRAINING TERMS AND STANDARDS 1. Manufacturer shall provide qualified instructors and the necessary instruction material, as mutually agreed upon, to train CUSTOMER's personnel in the marketing, installation, database preparation and administration, operation, and maintenance of PRODUCT furnished in a cost effective manner. 2. Manufacturer shall also establish and/or maintain curricula to include, but not limited to, the following: (a) PRODUCT overview and introduction (e.g., features, functions, benefits, nomenclature, architecture); (b) Engineering, installation and maintenance; (c) Basic operation and administration; (d) Sizing, configuration and PRODUCT ordering; (e) Planning and budgetary guidelines; and (f) Other subjects deemed necessary by CUSTOMER to support the PRODUCT. 3. Manufacturer shall change, modify, update and/or add training programs as new PRODUCT features/releases are made available. 4. Manufacturer shall maintain a technical training facility and provide CUSTOMER a course listing of all training courses available to CUSTOMER, notify CUSTOMER of any curriculum changes. and identify those courses that are critical in the support of the PRODUCT. Training shall be offered on a regular basis and Manufacturer shall attempt to meet any reasonable request for additional or unscheduled training required by CUSTOMER. Additional courses may be scheduled with sixty (60) days prior written notice. *Confidential treatment will be requested. H-2, H-1 CONFIDENTIAL 137 *Confidential treatment will be requested. 7. Manufacturer shall, at no charge to CUSTOMER, provide copies of all training materials to the CUSTOMER's training department for review of quality and applicability to CUSTOMER's training requirements. Manufacturer shall provide a plan for the correction of deficiencies identified in such review. 8. If requested by CUSTOMER, Manufacturer shall, at a mutually agreeable cost, conduct "Train the Trainer" classes on sales, installation, maintenance, and engineering of Manufacturers PRODUCT for CUSTOMER instructors, at a mutually agreed upon location. 9. Manufacturer shall provide, upon CUSTOMER request, one master (camera ready) copy of any sales, installation, maintenance, and engineering courseware required for CUSTOMER's instructors to train on Manufacturer's PRODUCT. The courseware shall contain an instructor guide, student materials and any additional aides required to present the course. These master copy materials shall be provided at no cost. Manufacturer shall provide CUSTOMER with reproduction rights for these materials. These materials shall not be distributed to any nonCUSTOMER organization. 10. CUSTOMER may audit Manufacturer conducted training to ascertain if the materials are presented in a quality manner. The costs of such audits shall be at no charge. Any recommendations offered by CUSTOMER shall be incorporated for future training classes in a timely manner. 11. Manufacturer certified CUSTOMER instructors shall be afforded the same consideration as Manufacturer's instructors in regard to course modifications and updates. Manufacturer shall assure that CUSTOMER's instructors have the same updated material as Manufacturer's instructors. 12. Manufacturer shall provide CUSTOMER's instructors, at no cost, technical/operational support in the form of reasonable telephone consulting assistance relating to the content of courseware. 13. Manufacturer shall provide, at the actual cost of reproduction, copies of all training materials required to support CUSTOMER's embedded base of PRODUCT that Manufacturer may have declared as discontinued or obsolete. 14. Manufacturer agrees to provide on-site training to CUSTOMER. Courses may be scheduled with sixty (60) days prior written notice. [*Confidential treatment will be requested.] Instructor's travel and living expenses shall be the responsibility of Manufacturer. Manufacturer shall provide normal classroom non-traffic bearing equipment. H-2, H-2 CONFIDENTIAL 138 *Confidential treatment will be requested. CONFIDENTIAL 139 EXHIBIT H-2 ATTACHMENT J ADDITIONAL MANUFACTURER'S RESPONSIBILITIES AND OBLIGATIONS CONFIDENTIAL 140 EXHIBIT H-2 ATTACHMENT J ADDITIONAL MANUFACTURER'S RESPONSIBILITIES AND OBLIGATIONS 1. SOFTWARE LICENSE (a) Manufacturer has granted to CUSTOMER through SELLER a license for CUSTOMER's right to use software owned by Manufacturer. (b) If Manufacturer discontinues support of the Software, to the extent that Manufacturer has such rights, Manufacturer agrees to furnish to CUSTOMER all source code (in machine readable format), technical documentation and other information required for the maintenance, modification or correction of the most recent version of the Software provided to CUSTOMER. (c) Purchasers of the Software and related documentation from CUSTOMER shall be required to execute and shall be subject to the Software Sublicense Agreement, attached hereto and incorporated herein as Addendum to this Attachment J, which requires such customer(s) to abide by the requirements therein, to use the Software and related documentation solely for the purpose of provisioning, maintaining, and monitoring such CUSTOMER's and/or customers network elements, and to consent to the enforcement of the provisions thereof directly by Manufacturer. Use of the Software by customer(s) of CUSTOMER shall be solely in conjunction with the PRODUCT furnished by Manufacturer to CUSTOMER hereunder and shall be restricted to provisioning, maintaining, and monitoring such CUSTOMER's and/or customer's internal network elements. (d) CUSTOMER shall promptly notify Manufacturer that CUSTOMER has furnished its customer with Software and documentation licensed hereunder and shall provide to Manufacturer a copy of the signed Software Sublicense Agreement. (e) Upon removal of CUSTOMER's PRODUCT utilizing the Software licensed hereunder from its customer's premises, CUSTOMER shall use commercially reasonable efforts to obtain from its customer a signed form certifying that the Software and documentation have been returned in their entirety to CUSTOMER. (f) No right or license shall be implied by estoppel or otherwise, other than the rights and license expressly granted in this Agreement. All ownership rights, title, and interest in the Software are and shall remain with Manufacturer subject, however, only to the license specifically granted herein. (g) Any and all trademarks and trade names that Manufacturer uses in connection with the license granted hereunder are and remain the exclusive property of Manufacturer. This Agreement gives CUSTOMER no right therein except a limited license to reproduce trademarks and trade names as necessary for and for the sole purpose of allowing CUSTOMER to fully promote and market the Software pursuant to the terms of this Agreement. H-2, J-1 CONFIDENTIAL 141 (h) For any Software acquired directly or indirectly on behalf of a unit or agency of the United States Government, this provision applies. (1) For civilian agencies: Software (i) Was developed at private expense, is existing computer Software and the part of the Software was developed with government funds; (ii) Is a trade secret of Manufacturer for all purposes of the Freedom of Information act; (iii) Is "restricted computer Software" submitted with restricted rights in accordance with the subparagraphs (a) through (d) of the Commercial Licensed Materials-Restricted Rights clause at 52.227-19 of the Federal Acquisition Regulations (FAR) and its successors and as expressly stated in Manufacturer's standard commercial agreement incorporated into the contract or purchase order between Manufacturer and the government entity, except that the government agency shall not have the right to disclose the Software to support service contractors or their subcontractors without Manufacturer's prior written consent. (iv) In all respects, is proprietary data of Manufacturer; and (v) Is unpublished and all rights are reserved under the copyright laws of the United States. (2) For units of the Department of Defense (DOD): The Software is licensed only with "Restricted Rights" as that term is defined in the DOD Supplement to the FAR, clause 52.227-7013(c)(1)(ii), Rights in Technical Data and Computer Software and its successors, and use, duplication or disclosure is subject to the restrictions set forth therein, with the exception that the government agency shall not have the right to disclose the Software to subcontractors or agents of the government without Manufacturer's prior written consent. 2. MANUFACTURER'S INFRINGEMENT (a) Manufacturer agrees to indemnify, defend and hold harmless CUSTOMER and its AFFILIATES, shareholders, directors, officers, employees, contractors, agents and other representatives from all demands, claims, actions, causes of action, proceedings, assessments, losses, damages, liabilities, settlements, judgments fines, penalties, interest, cost and expenses (including fees and disbursements of counsel) arising from or relating to any actual or alleged infringement or misappropriation of any patent, trademark, copyright, trade secret or any actual or alleged violation of any other intellectual property rights arising from or in connection with the PRODUCT provided or the SERVICES performed under this Agreement regardless of whether such PRODUCT or SERVICES form the entire basis or only a portion of the basis for such claims of infringement, misappropriation or violation; and if the use or resale shall be enjoined, Manufacturer shall, at its option, replace H-2, J-2 CONFIDENTIAL 142 the enjoined PRODUCT(S) with suitable substitute free of the infringement or misappropriation, or shall procure for CUSTOMER's benefit a license or other right to use or resell the same, or shall remove the enjoined PRODUCT(S) and refund to CUSTOMER the amount paid to SELLER therefor, plus, under any option, Manufacturer shall indemnify CUSTOMER's direct (i.e., punitive damages and license fees, royalties or other right to use fees paid to a third party) damages for such infringing or misappropriated PRODUCT(S). Notwithstanding anything to the contrary contained in this Agreement (including, but not limited to, Section 3, INDEMNIFICATION AND INSURANCE), the provisions of this Section 2, MANUFACTURER'S INFRINGEMENT, shall, as to Manufacturer, govern the rights of CUSTOMER and its AFFILIATES, shareholders, directors, officers, employees, contractors, agents and other representatives to indemnification for claims of infringement, misappropriation or violation of intellectual -property rights. Manufacturer shall have total control over the defense, negotiation and settlement of each such case, provided, however, that CUSTOMER shall be permitted to participate in such defense negotiation, or settlement by counsel of its own choosing and expense. (b) Except for the negligence provisions, the procedures set forth in Section 3, INDEMNIFICATION AND INSURANCE, shall apply in the case of any claims of infringement, misappropriation or violation of intellectual property rights for which indemnification will be sought. CUSTOMER shall give Manufacturer prompt written notice of any such claims of infringement or misappropriation and of all such suits and, except as otherwise indicated herein, when Manufacturer is obligated to indemnify CUSTOMER hereunder, full opportunity and authority to assume the defense thereof, including appeals, and to settle such suits, and shall furnish upon Manufacturer's request and at Manufacturer's expense all disclosed information and reasonable assistance available to CUSTOMER. (c) THE FOREGOING STATES THE ENTIRE LIABILITY OF MANUFACTURER WITH RESPECT TO INFRINGEMENT OF PATENTS, TRADEMARKS OR COPYRIGHTS BY ANY PRODUCT DELIVERED UNDER THIS AGREEMENT. 3. INDEMNIFICATION AND INSURANCE (a) Manufacturer shall indemnify, defend, and hold harmless CUSTOMER and its affiliates, officers, agents, and employees, from all claims, suits, actions, demands, damages, liabilities, expenses (including fees and disbursements of counsel), judgments, settlements and penalties of every kind based on (i) personal injury, death, or property damage to the extent any of the foregoing is proximately caused by either any defective PRODUCT provided by Manufacturer, its officers, employees, subcontractors or agents, or by the negligent or willful acts or omissions of Manufacturer, its officers, employees subcontractors or agents, or (ii) strict liability in tort or products liability of any other kind in connection with and PRODUCT provided by Manufacturer, its officers, employees, subcontractors or agents or the use, resale or distribution of any such PRODUCT by CUSTOMER; or (iii) for indemnification for claims of third parties, arising under Section 2, MANUFACTURER'S INFRINGEMENT. The foregoing indemnity, to the extent permitted by law, shall apply in the case of all claims that arise form the negligence, misconduct or other fault of CUSTOMER, provided, however, that if a claim is the result of the sole negligence, misconduct or fault of CUSTOMER or its H-2, J-3 CONFIDENTIAL 143 AFFILIATES(s) Manufacturer shall have no obligations of indemnification hereunder. If a claim is the result of the joint negligence, joint misconduct or joint fault of Manufacturer and CUSTOMER, the amount of such claim for which CUSTOMER is entitled to indemnification shall be limited to that portion of such claim that is attributable to the negligence, misconduct or other fault of Manufacturer. The obligations of this provision are in addition to Manufacturer's obligation to provide insurance and shall not be limited by any limitation on the amount or type of damages, compensation or benefits payable by Manufacturer under Worker's Compensation Acts, Longshoremen and Harborworker's Act, Disability Benefits Act or any other employee benefit act. (b) LIMITATION OF LIABILITY. Notwithstanding any other provision of this Agreement, Manufacturer's entire liability for monetary damages under this Agreement shall be as follows: (1) For real or tangible property damage or personal injury or death proximately caused by defective PRODUCT provided by Manufacturer or the negligent or willful acts of omissions of Manufacturer, the amount of the direct damages up to an unlimited amount; and (2) For any payments made by CUSTOMER to CUSTOMER's customer pursuant to an agreement between CUSTOMER and CUSTOMER's customer whereby CUSTOMER agrees to indemnify its customer for such customer's claims for lost revenues which payments are owed as a result of Manufacturer's defective PRODUCT or the negligent or willful acts or omissions of Manufacturer or its employees or agents; and (3) For all other loss or damage incurred by CUSTOMER because of loss of revenue claims of third parties awarded by a court of competent jurisdiction or resulting from a settlement of such a claim filed in a court of competent jurisdiction or resulting from a settlement of such a claim asserted outside of court (with all such settlements subject to the prior approval of Manufacturer and CUSTOMER) and asserted against CUSTOMER by any third party for CUSTOMER's failure to provide services to such party as a result of Manufacturer's defective PRODUCT or the negligent or willful acts or omissions of Manufacturer or its employees or agents; (4) The total liability of Manufacturer to CUSTOMER pursuant to Sections (b)(2) and (b)(3) shall be limited to a maxim per occurrence of three percent (3%) of actual revenues earned by Manufacturer for PRODUCT purchased by CUSTOMER during the recent twelve (12) month period or one million two hundred fifty dollars ($1,250,000), which ever amount is greater. (5) The total liability of Manufacturer to CUSTOMER for indemnification for claims of third parties' lost revenues arising under Section 2, MANUFACTURER'S INFRINGEMENT, shall be limited to a maxim per occurrence of five percent (5%) of actual revenues earned by Manufacturer for PRODUCT purchased by CUSTOMER during the recent twelve (12) month period or two million five hundred thousand dollars ($2,500,000), which ever amount is greater. Manufacturer's liability for CUSTOMER's H-2, J-4 CONFIDENTIAL 144 direct damages, as defined in Section 2, MANUFACTURER'S INFRINGEMENT, shall be unlimited. EXCEPT AS SET FORTH ABOVE, NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES OF ANY. KIND OR NATURE. (6) CUSTOMER shall promptly notify Manufacturer in writing of any suits, claims or demands covered by this indemnity. Promptly after receipt of such notice, Manufacturer shall assume the defense of such claim with counsel reasonably satisfactory to CUSTOMER. If Manufacturer fails, within reasonable time after receipt of such notice, to assume the defense with counsel reasonably satisfactory to CUSTOMER. CUSTOMER shall have the right to undertake the defense, compromise and settlement of such claim for the account and at the expense of Manufacturer. Notwithstanding the above, if CUSTOMER in its sole discretion so elects, CUSTOMER may also participate in the defense of such actions by employing separate counsel at its expense, without waiving Manufacturer's obligation to indemnify or defend; provided that such participation shall not adversely affect Manufacturer's ability to defend or settle the claim. Manufacturer shall not settle or compromise any claim or consent to the entry of any judgment without the prior written consent of CUSTOMER, if such claim or judgment is based upon the joint fault, negligence or misconduct of Manufacturer and CUSTOMER, and without an unconditional release of all liability by each claimant or plaintiff to CUSTOMER with respect to claims for which Manufacturer is obligated to indemnify CUSTOMER. (7) Manufacturer agrees to maintain during the term of this Agreement all insurance or bonds required by law or this Agreement, including, but not limited to (i) Worker's Compensation and related insurance as prescribed by the law of the state in which Manufacturer's services are performed or PRODUCT are delivered; (ii) employer's liability insurance with limits of at least one million dollars ($1,000,000) for each occurrence, and (iii) comprehensive general liability insurance including products liability, and if the use of motor vehicles is required, comprehensive motor vehicle liability insurance, each with limits of at least two million dollars ($2,000,000) for combined single limit for bodily injury, including death, and/or property damage. Manufacturer shall cause CUSTOMER to be included as an additional insured under said policies (as "GTE Corporation and its affiliates and subsidiaries") and CUSTOMER's coverage under such policies shall be primary. Manufacturer shall waive its rights of subrogation against CUSTOMER for Workers' Compensation claims. Manufacturer shall, prior to rendering such services, furnish certificates or evidence of the foregoing insurance indicating the amount and nature of such coverage, the expiration date of each policy, and stating that no material change or cancellation of any such policy shall be effective unless thirty (30) days' prior written notice is given to CUSTOMER. H-2, J-5 CONFIDENTIAL 145 EXHIBIT H-2 ATTACHMENT J SCHEDULE 1 SOFTWARE SUBLICENSE AGREEMENT CONFIDENTIAL 146 EXHIBIT H-2 ATTACHMENT J SCHEDULE 1 SOFTWARE SUBLICENSE AGREEMENT SOFTWARE SUBLICENSE AGREEMENT This Software Sublicense Agreement (the "Agreement") is made this day of , 1996, by and between ("Licensee") and ("Sublicensee"), a corporation, with offices at . The software defined below is sublicensed in accordance with this Agreement and in accordance with the terms of Agreement No. , as amended thereto, by and between Licensee and Fujitsu Network Communications, Inc. ("Licensor"). 1. GRANT OF LICENSE. The Software PRODUCT is the specified version of Licensor's FLEXR(R) and/or FLEXR(R) PLUS (the "Software"). The Software is sublicensed subject to the terms and conditions of this Agreement. The Software includes all copies of the software program and its related supporting materials. Licensee grants Sublicensee a personal, nontransferable and non-exclusive sublicense to use the Software on a single computer accessing the basic number of Network Elements of either Licensee or Sublicensee. Sublicensee may not: (i) distribute, sublicense or copy any portion of the Software; (ii) modify or prepare derivative works from the Software; (iii) publicly display visual output of the Software; (iv) transmit the Software electronically by any means (v) use the Software in a multiple computer or multiple user arrangement other than the single-processing or multiprocessing microcomputing unit accessing the basic number of Network Elements of either Licensee or Sublicensee. Sublicensee may copy the Software into any machine-readable form for backup or archival purposes in support of Sublicensee's use on a single machine. Any portion of the Software merged into another program will continue to be subject to the terms and conditions of this Agreement. Sublicensee agrees that the Software belongs to Licensor, and Sublicensee agrees to keep confidential and use Sublicensee's best efforts to prevent and protect the contents of the Software from unauthorized disclosure. FLEXR(R) is a registered trademark of Fujitsu Network Communications, Inc. H-2, J-1 CONFIDENTIAL 147 2. TERMINATION The license terminates if Sublicensee fails to comply with any term or condition of this Agreement; Sublicensee agrees upon such termination to return the Software together with all copies, modifications, and merged portions in any form to Licensee. 3. CONFIDENTIALITY Sublicensee shall maintain the Software in strict confidence and shall keep on all copies the same copyright notice as contained on the original. All copies of the Software or any part thereof shall be the property of Licensor. Sublicensee agrees that neither Sublicensee, its agents nor its employees shall in any manner use, make available, make known, divulge or communicate any information with respect to the Software which might enable copying all or any portion of the Software or the development of similar computer program or system. Sublicensee agrees to take all appropriate action to protect the confidential and proprietary information included in the Software, including appropriate instruction and agreement with its employees. 4. OTHER RESTRICTIONS. Sublicensee may not revise, reverse engineer, decompile or disassemble the Software in whole or in part or permit any third party to do or attempt the same. *Confidential treatment will be requested. 6. REMEDY. Licensor and/or Licensee's entire liability and Sublicensee's exclusive remedy shall be, at Licensee's option, either (a) return of the price paid, or (b) repair or replacement of the Software that does not meet [*Confidential treatment will be requested.] and that is returned to Licensee. This [*Confidential treatment requested] is void if failure of the Software has resulted from accident, abuse or misapplication. H-2, J-2 CONFIDENTIAL 148 7. [*Confidential treatment requested]. 8. NO LIABILITY FOR CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL LICENSOR AND/OR LICENSEE BE LIABLE FOR ANY DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY KIND OR NATURE, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR LOSS OF DATA OR ANY OTHER LOSS ARISING OUT OF THE USE OR INABILITY TO USE THIS SOFTWARE PRODUCT, EVEN IF LICENSEE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 9. ENTIRE AGREEMENT Each party acknowledges that it has read and understood this Agreement and agrees to be bound by its terms, and that the Agreement, the contracts and its amendments is the complete and exclusive agreement of the parties and supersedes all other communications, oral or written, between the parties relating to the Agreement's subject matter. Any change to this Agreement shall not be valid unless it is in writing signed by both parties. AGREED TO: LICENSEE SUBLICENSEE By: By: Printed Name: Printed Name: Title: Title: Date: Date: H-2, J-3 CONFIDENTIAL EXHIBIT I CENTURY COMPLIANCE H-2, J-4 CONFIDENTIAL 149 EXHIBIT I CENTURY COMPLIANCE 1. CENTURY COMPLIANCE (a) When used in this Exhibit with initial capital letters, the following terms have the respective meanings given below. (1) "Procured System" means the computer software, computer firmware, computer hardware (whether general or special purpose), documentation, data, and other similar or related items of the automated, computerized, and/or software system(s) that are provided by or through SELLER pursuant to this Agreement, or any component part thereof, and any services provided by or through SELLER in connection therewith. (2) "Calendar-Related" refers to date values based on the Gregorian calendar, as defined in Encyclopedia Britannica, 15th edition, 1982, page 602, and to all uses in any manner of those date values, including without limitation manipulations, calculations, conversions, comparisons, and presentations. (3) "Date Data" means any Calendar-Related data in the inclusive range January 1, 1900, through December 31, 2050, which the Procured System uses in any manner. (4) "System Date" means any Calendar-Related data value in the inclusive range January 1, 1985, through December 31, 2035 (including the natural transition between such values), which the Procured System shall be able to use as its current date while operating. (5) "Century Compliant" means that the Procured System satisfies the requirements set forth in Sections 1.(b), 1.(c), and 1.(d) below. (6) "Century Noncompliance" means any failure of the Procured System to be Century. Compliant. (b) SELLER represents that, in connection with Calendar-Related data and Calendar-Related processing of Date Data or of any System Date, the Procured System will not malfunction, will not cease to function, will not generate incorrect data, and will not produce incorrect results. (c) SELLER further represents that, in connection with providing Calendar-Related data to and accepting Calendar-Related data from other automated, computerized, and/or software systems and users via user interfaces, electronic interfaces, and data storage, the Procured System represents dates without ambiguity as to century. I-1 CONFIDENTIAL 150 (d) SELLER further represents that SELLER has verified through testing that the Procured System is Century Compliant and that testing included, without limitation, each of the following specific dates and the transition to and from each such date: December 31, 1998; January 1, 1999; September 9, 1999; September 10, 1999; December 31, 1999; January 1, 2000; February 28, 2000; February 29, 2000; March 1, 2000; December 31, 2000; January 1, 2001; December 31, 2004; and January 1, 2005. (e) These representations survive the expiration or earlier termination of this Agreement. 2. INTERFACING If the Procured System is a Commercial-Off-The-Shelf (COTS) product, it shall have the present capability, which can be readily utilized by CUSTOMER, of providing Calendar-Related data to and accepting Calendar-Related data from other automated, computerized, and/or software systems and users in a four-digit CCYY format, where CC are the two digits expressing the century and YY are the two digits expressing the year with that century (e.g., 1996, 2003 and 2027). 3. CENTURY NONCOMPLIANCE REMEDY In the event the Procured System is Century Noncompliant in any respect, SELLER shall, at no cost to CUSTOMER, promptly correct the Century Noncompliance and provide the corrected Century Compliant Procured System to CUSTOMER within ninety (90) days after receipt of a written request from CUSTOMER, unless otherwise agreed by CUSTOMER in writing. 4. NONCOMPLIANCE NOTICE In the event SELLER becomes aware of (i) a possible or an actual Century Noncompliance in the Procured System or (ii) any international, governmental, industrial, or other standard (proposed or adopted) regarding Calendar-Related data and/or processing, or it begins any significant effort to conform the Procured System to any such standard, SELLER shall promptly inform CUSTOMER of all relevant information (and timely provide CUSTOMER updates to such information) with respect to SELLER's knowledge. SELLER shall respond promptly and fully to inquiries by GTE (and timely provide updates to any responses provided to GTE) with respect to (i) any possible Century Noncompliance in the Procured System or to (ii) any international, governmental, industrial, or other standards. In the foregoing, the use of "timely" means promptly after the relevant information becomes known to or is developed by or for SELLER. I-2 CONFIDENTIAL EX-10.13 12 CONTRACT BETWEEN SBC OPERATIONS AND REGISTRANT 1 EX. 10.13 CONTRACT # 99006326 SBC OPERATIONS, INC. (BUYER) & WORLD WIDE TECHNOLOGY, INC. (SELLER) INDEX PAGE ---- 1. ACCESS 2 2. CHANGES TO MATERIAL-PLUG-INS 2 3. FREIGHT CLASSIFICATION 2 4. INVOICING AND PAYMENTS FOR PLUG-INS 2 5. MARKING-PLUG-INS 4 6. MONTHLY ORDER AND SHIPMENT REPORTS 4 7. NOTICES 5 8. OPTION TO EXTEND 5 9. * 5 10. REPAIRS NOT COVERED UNDER WARRANTY 5 11. SCOPE OF AGREEMENT 7 12. SHIPPING AND PACKING-PLUG-INS 7 13. TERMS OF AGREEMENT 8 14. * [*Confidential treatment requested] *Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 Contract # 99006326 TERMS AND CONDITIONS SBC OPERATIONS, INC. (BUYER) 175 E. Houston San Antonio, Texas 78205 And WORLD WIDE TECHNOLOGY, INC. (SELLER) 127 Weldon Parkway St. Louis, Missouri 63043-3101 PREAMBLE This Contract is effective upon the date of execution by the last party, is between SBC Operations, Inc. (Buyer) a Delaware corporation, for itself and its affiliated companies (hereinafter Buyer) and World Wide Technology, Inc. (Seller) a Missouri corporation. This Contract # 99006326 incorporates all the terms and conditions in our General Agreement # 98005906 between the parties unless specifically otherwise provided herein. In the event that the terms and conditions differ, this Contract # 99006326 shall prevail. Buyer and Seller agree that the term Buyer includes any of Buyer's affiliates, and the term Seller shall mean either World Wide Technology, Inc. (WWT) or Fujitsu, its Original Equipment Manufacturer (OEM) supplier, as applicable. Buyer and Seller agree that World Wide Technology, Inc. (Seller) will be the single point of contact in resolving all contractual issues between Buyer and Seller and/or Fujitsu, its OEM supplier, so long as it is technically and legally feasible. 1 Proprietary Information The information contained herein is not for use or disclosure outside of SBC Operations, Inc., Southwestern Bell Telephone Company, Pacific Bell or their affiliated and subsidiary companies except under written agreement by the contracting company. 3 TERMS AND CONDITIONS ACCESS Each party shall, at no charge, permit the other reasonable access to its premises in connection with the performance of this Contract. Each party shall coordinate with the other party prior to visiting such premises. CHANGES TO MATERIAL-PLUG-INS In addition to other obligations under this Contract, Seller agrees to notify Buyer, at least thirty (30) days in advance, except for those cases where an extremely unsatisfactory condition requires immediate action, of any change to be made in the MATERIAL subject to the provisions of this Contract that would impact either reliability or the form, fit or function of the MATERIAL. Seller shall furnish a Product Change Notice (PCN) for all changes to MATERIAL provided hereunder in accordance with Generic Requirements GR-209-CORE, incorporated herein by this reference, and as may be amended at any time and from time to time, and any successor documents. The final classification of any PCN proposed by Seller will be as mutually agreed between Buyer and Seller. Such PCNs shall be e-mailed to: PCN Administrator 2200 N. Greenville Ave., Rm. 3E Richardson, Texas 75082-4412 Tel # (972) 454-6313 e-mail: pcn@sbe.com For PCNs classified as "A" or "AC", Seller agrees to promptly modify or replace, at no charge to Buyer or Buyer's Independent Contract (WWT), all MATERIAL affected by the changes specified in the PCN, and all relevant documentation in accordance with GR-209-CORE. Buyer's Independent Contract or (WWT) shall include the latest Human Equipment Catalog Item (HECI) plug-ins in the kits specified in [*Confidential treatment requested] for all class A and AC changes. In an effort to achieve resolution of widespread or multiple defects, Seller may have to visit numerous field locations to modify or replace defective units of MATERIAL. Buyer will escort and may assist the Seller in resolving quality defects, as well as, to correct a variety of associated inventory records. Buyer may at its option, submit an invoice or take a credit against amounts owed to recover all expenses incurred by Buyer in correcting Seller's quality defects. Seller will be liable for all costs associated with resolving Seller's quality defects. For changes classified as "B" or "D", Seller agrees to notify Buyer of the exact nature thereof and discuss with Buyer, details regarding the proposed implementation procedure as outlined in GR-209-CORE for affected MATERIAL which is being or will be manufactured. Buyer will determine at it's option, if MATERIAL previously shipped will be modified or replaced. Should such modification or replacement be deemed necessary, Seller will arrange therefore at prices and schedules to be mutually agreed upon between Buyer and Seller prior to implementation. Relevant documentation for such affected MATERIAL will be provided by Seller at no charge. Any revisions, amendments, or successors to GR-209-CORE will become effective and thereafter applicable under this Contract thirty (30) days after such revision is released by the Buyer except for those particular revisions to which Seller specifically objects within twenty-one (21) days of receipt, providing therewith an explanation of each such objection. Upon each such objection, Buyer and Seller will attempt to negotiate a resolution to any such objections. Notwithstanding the foregoing, any revision made to address situations potentially harmful to the SBC network, the Premises, to address Premise security issues, to comply with statutory and/or regulatory requirements, or to the SBC Emergency Operating Procedures will become effective and applicable immediately notwithstanding any objection by Seller. In the event that Buyer and Seller fail to reach agreement on any PCN proposed by Seller, in addition to all other rights under this Contract, Buyer will have the right without penalty to terminate this Contract and any or all Orders for MATERIAL affected by such PCN(s) that may have been issued by Buyer. FREIGHT CLASSIFICATION Material purchased under this Contract shall be classified as National Motor Freight Classification (NMFC) item 63240 Class 85. INVOICING & PAYMENT FOR PLUG-INS Seller agrees to invoice Buyer within five (5) business days from date of shipment to Buyer. Taxes, if applicable, should be in accordance with the local, city, and state jurisdictions. 2 4 PURCHASE ORDERS a) Seller shall provide invoices to SOUTHWESTERN BELL, electronically via Electronic Data Interchange (EDI) on a weekly basis, or as requested by Buyer's billing contacts listed below. Seller agrees to preclude taxes from shipments to the Material Distribution Center (MDC) located in Lancaster, Texas. Seller shall include invoices to Southwestern Bell details for: 1) invoice #; 2) invoice date; 3) Ship date; 4) Purchase Order (PO) #; 5) seven (7) digit HECI code; 6) quantity; 7) unit price; 8) total amount owed; 9) taxes, if applicable, based on destination other than MDC in Lancaster, TX; 10) transportation charges; 11) applicable discounts. REPAIR SERVICE ORDERS a) Seller shall provide invoices to SOUTHWESTERN BELL, electronically via EDI on a weekly basis, or as requested by Buyer's billing contacts listed below. Seller shall include in invoices to Southwestern Bell details for: 1) invoice #; 2) invoice date; 3) Ship date; 4) Repair Service Order (RSO) #; 5) seven (7) digit HECI code; 6) quantity; 7) unit price; 8) detailed breakdown of charges, repair, modification, test, no trouble found (NTF) etc.; 9) total amount owed; 10) transportation charges; 11) taxes, if applicable; 12) applicable discounts. PURCHASE/REPAIR ORDERS b) Seller shall provide invoices to PACIFIC BELL via monthly summary invoicing, in the format requested by Pacific Bell. Seller shall include in all monthly summary invoices to Pacific Bell details for: 1) order date; 2) ship date; 3) shipping notice #; 4) seven (7) digit HECI code; 5) quantity; 6) description of services; 7) unit price; 8) unit serial #; 9) warranty information; 10) tax information, if applicable; 11) transportation charges; 12) total amount owed; 13) applicable discounts. c) Seller shall provide invoices to Buyer's Independent Contractor or Contractors in the format requested by said Contractor, and shall at a minimum include all the information requested by Buyer as listed above by region (Southwestern Bell or Pacific Bell). Buyer agrees to pay for Material/Services net thirty (30) days from Seller's invoice date or Buyer's receipt of Material/Services, whichever is later. Seller shall include transportation method on invoices. Seller shall acknowledge receipt of Buyer's or Buyer's Independent Contractors Order within forty-eight (48) hours of receipt and will advise Buyer and or Buyer's Independent Contractor as to whether or not Seller will meet the delivery interval specified on the order, delineating any shortages by HECI, quantity, shortage reason, and expected ship date for the specified shortages. Buyer may order plug-ins with a notation of "Do Not Sub"...and Seller agrees to ship the plug-ins as listed on the Orders. However, if Buyer does not include "Do Not Sub" on the Orders ...then Seller may use substitutions of a higher series plug only and not a lower series plug. Seller to obtain new Common Language Equipment Identifier (CLEI) codes from Telcordia (formerly Bellcore) and the ordering of function code chaining in the Trunks Integrated Record Keeping System (TIRKS) through Telcordia as stipulated in GR-2977-CORE, prior to requesting Buyer's authorization for the shipment of any changed, modified, and or potential plug-in substitutions. Seller shall ship and invoice using the most current HECI codes on all Class A and AC changes. Seller agrees to notify Buyer or Buyer's Independent Contractor of any such substitutions prior to shipment to Buyer or Buyer's Independent Contractor. All other invoices shall be handled as stated on the Orders. Southwestern Bell Pacific Bell Manager-Inventory Management/PICS LPO Engineer Support Services/Pace One Bell Plaza, floor 20 2829 Watt Ave., Rm. 250B Dallas, Texas 75202 Sacramento, California 95851 (214) 464-5298 (916) 972-4512 d) Buyer shall pay Seller within thirty (30) days of the date of Material installation/acceptance of Material, or Seller's invoice date, whichever is later. However, payment for shortages, non-conforming Material or Services, and portions of any invoice in dispute, may be withheld by Buyer until such problem has been resolved. INVOICES RECEIVED BY BUYER MORE THAN ONE (1) YEAR AFTER THE DELIVERY OF PRODUCTS OR PERFORMANCE OF SERVICES ARE UNTIMELY AND BUYER SHALL HAVE NO OBLIGATION TO PAY SUCH INVOICES. 3 5 e) Invoices for or including freight charges shall be accompanied by legible copies of prepaid freight bills, express receipts or bills of lading supporting the invoice amounts. Such invoices shall include (1) carrier's name, (2) date of shipment, (3) number of pieces, (4) weight and (5) freight classification. f) If Buyer disputes any invoice rendered or amount paid, Buyer shall so notify Seller and the parties shall use their best efforts to resolve such dispute expeditiously. All claims for moneys due or to become due from Buyer will be subject to deduction by Buyer for any setoff or counterclaim for moneys due or become due from Seller, whether under this Contract or otherwise. Any amount due Buyer that is not so applied against Seller's invoices for any reason shall be paid to Buyer by Seller within thirty (30) days after demand by Buyer. MARKING-PLUG-INS a) Unless otherwise agreed by the parties, all Material shall be marked for identification purposes in a conspicuous or readily accessible location at no additional charge including, but not limited to, the following: (1) Seller's model/serial number/issue number; (2) Month and year of manufacturing; (3) Warranty expiration date; (4) Bar-coding in accordance with the Telecommunications Industry Forum (TCIF) standards, which includes the Equipment Category Item (ECI) number, and (5) for plug-in equipment; also in accordance with the current requirements outlined in the GR documents listed below. b) Containers of Material shall be marked for identification with: (1) Product Identification Number ("PID"); (2) CLEI; (3) Continuing Property Record (CPR) Numbers; (4) Buyer's Order Number; (5) Product Description; (6) Order Item Number, if applicable; and (7) Bar-coding in accordance with the TCIF standards. Bar-coding will include the equipment Category Item (ECI) number. c) All packing slips shall identify the PID number, Product Description, Order Number, Order quantity. Seller agrees to add any other identification requested by Buyer at charges to be agreed upon by Buyer and Seller. Seller shall mark all hazardous Material as such in a permanent and visible manner by stating "HAZARDOUS MATERIAL CONTAINED WITHIN" and identifying the specific hazardous material. d) For central office plug-ins, hardwired equipment, tools and test sets, obtain at Seller's expense applicable ECI, CPR, CLEI information/requirements from Telcordia in accordance with GR-209; GR-383, GR-485; and GR-2977 and provide such information and or requirements to Buyer on the Order Acknowledgment and or as stipulated in the GR documents. Any revisions, amendments, or successors to the GR documents listed above will become effective and thereafter applicable under this Contract thirty (30) days after such revision is released by the Buyer to Seller. Buyer and Seller will attempt to negotiate a resolution to any objections of said revisions by Seller. e) For Network Channel Terminating Equipment (NCTE) obtain at Seller's expense applicable ECI, CPR, CLEI information/ requirements from Telcordia in accordance with GR-209; GR-383, GR-485; and GR-2977 and provide such information and or requirements to Buyer on the Order Acknowledgment and or as stipulated in the GR-documents listed above. Any revisions, amendments, or successors to the GR documents listed above will become effective and thereafter applicable under this Contract thirty (30) days after such revision is released by the Buyer to Seller. In addition, Seller shall place on the container as well as on the plug-in unit a permanent and visible "NCTE" label identifying the unit as such. MONTHLY ORDER AND SHIPMENT REPORTS-PLUG-INS During the term hereof, Seller agrees to render monthly Order and shipment reports. The report shall be in a form that indicates the total dollars paid to Seller by Buyer for the applicable month, listed by seven-(7) digit CLEI, sorted by purchases and repairs. In addition. Seller shall prepare a separate report listing the "No Trouble Found" (NTF) data sorted by seven (7) digit CLEI. And, any additional information so required by Buyer. These reports shall be provided on or before the fifteenth (15th) working day of the succeeding month, and shall be mailed to Buyer at the address specified in the clause entitled "Notices" in our General Agreement #98005906. 4 6 NOTICES Except as otherwise provided in this Agreement, or applicable Order, all notices or other communications hereunder shall be deemed to have been duly given when made in writing and either 1) delivered in person, 2) delivered to an agent, such as an overnight or similar delivery service, or 3) deposited in the United States Mail, postage prepaid, or 4) facsimile transmission, and addressed as follows: To: (World Wide Technology, Inc.) (127 Weldon Parkway) (St. Louis, Missouri 63043-3101) (Attn.: Mark Catalano To: (SBC Operations, Inc.) (530 McCulllough rm. 2-M-02) (San Antonio, Texas 78215) (Attn.: Contract Manager-Plug-ins To: (AFFILIATE NAME) (AFFILIATE STREET ADDRESS) (AFFILIATE CITY, STATE, ZIP) ATTN.: ______________ The address to which notices or communications may be given by either party may be changed by written notice given by such party to the other pursuant to this paragraph entitled "Notices". OPTION TO EXTEND Buyer will have the right to extend the period specified in the clause herein entitled "Terms of Agreement" for two (2) years by giving Seller at least thirty (30) days' prior written notice. Within ten (10) days of the date of Buyer's notice to extend the period, Seller will notify Buyer in writing whether Seller proposes to revise its prices under this Agreement. If it does and the parties fail to agree on the revised prices within twenty (20) days after the date of Seller's notice to Buyer, then Buyer's notice to extend will be considered withdrawn and prices for outstanding Orders will not be revised. *Confidential treatment will be requested REPAIRS NOT COVERED UNDER WARRANTY [*Confidential treatment will be requested] Seller shall make available to Buyer a repair and return option and an exchange option which shall apply to any Material with respect to which the applicable warranty period has expired. The availability of the options described in this section shall not be construed as altering or affecting responsibility for risk of loss of or damage to the Material, as provided elsewhere in this Contract. 5 7 a. Under these options, if Buyer elects to have any Material repaired or exchanged, Buyer may return such Material to Seller at a location designated by Seller. If Buyer elects the repair and return option, Seller shall repair such Material and place it in good operating condition for Seller's then current price for such repair service plus freight charges and any applicable taxes. If Buyer elects the exchange option, Seller shall promptly replace such Material with a comparable, factory-tested, refurbished Material, if available, which shall meet current Material Specifications. Such replacement shall be at Seller's standard charges for the replacement Material, plus freight charges and any applicable taxes. b. If any Material returned to Seller for repair and return as provided in this paragraph a. is determined to be beyond repair, or if repair costs are expected to exceed the cost of replacement, Seller shall so notify Buyer. If requested by Buyer, Seller shall replace said Material pursuant to the exchange option and, if so requested by Buyer, shall return such unit to Buyer and designate as "beyond economic repair". All plug-in equipment repaired, modified, and or exchanged by Seller will meet or exceed mutually agreed upon non-billable PCN's, Customer Change Notices (CCN's), and General Engineering Complaints (GEC's) and any other mutually agreed upon technical standards applicable to repaired, exchanged, or modified plug-in equipment. Any reportable changes to hardware, software, and or firmware in accordance with GR-209-CORE will require Seller to obtain new CLEI codes from Telcordia and the ordering of the function code chaining in TIRKS through Telcordia as stipulated in GR-2977-CORE, prior to requesting Buyer's authorization for the shipment of any changed, modified, and or potential plug-in substitutions. 2. Repair and Refurbished Material a. Repair of Material hereunder shall include, but shall not be limited to, remedial maintenance necessary to return defective Material to an operational condition that is suitable for reuse by Buyer and is in accordance with the Specifications for such Material. In addition, repair may include retrofitting and engineering changes and updates, provided such changes and/or updates have been approved by Buyer. b. Refurbished Material hereunder shall include, but shall not be limited to, used Material that is in "like-new" operational and appearance condition so that it is suitable for reuse by Buyer. 3. Performance of Work a. Except as otherwise provided in this Contract, the schedule for performance of services, applicable to each Order under this section shall be agreed upon by Seller and Buyer and shall be set forth in each such Order; however, in no event shall the Service interval exceed seven (7) days after such receipt. 1) In the event that Seller exceeds the maximum repair interval, Buyer shall have the right, without liability, to (i) cancel such Order or (ii) extend such scheduled service date specified in the Order, subject, however, to the right to cancel if Service is not made or performance is not completed by such extended date. 2) If an Order is canceled pursuant to the preceding sentence, Seller shall return the Material(s) received from Buyer under such Order. Seller shall reimburse Buyer the costs of shipping the Material(s) to Seller and the amounts, if any, previously paid by Buyer for Service not received or performed. b. Seller shall furnish all labor, services, tools, Material, parts, accessories, instruments and equipment required to perform services under this section. c. Seller shall provide a written notice to Buyer with the name(s) and telephone number(s) of the individual(s) to be contacted concerning any questions that may arise regarding services under this section. If required, Seller shall specify any special packing of Material which might be necessary to provide adequate in-transit protection from transportation damage. d. Material repaired by Seller shall have the service completion date stenciled or otherwise identified in a permanent manner at a readily visible location on the Material. 1) In addition, Seller agrees to add any other identification which might be requested by Buyer. Charges, if any, for such additional identification marking shall be agreed upon by Seller and Buyer. 6 8 e. Unless otherwise provided in this Contract, there shall be no additional charge for replacement parts. Only new standard parts or parts of quality equal to the original parts shall be used in refurbished Material or in effecting repairs. Parts, which have been replaced, shall become Seller's property. If a part has been replaced, by definition it has been removed; provided, however, that replaced parts shall, upon request by Buyer be available for inspection by Buyer. Parts, which are installed in Material as a part of the repair process, shall become the property of Buyer. f. If a Material returned to Seller for repair is determined to be beyond repair, Seller shall return such material to Buyer and designate as "beyond economic repair". 4. Risk of Loss Except as otherwise provided in this Contract, after receipt of Material from Buyer, Seller shall assume the risk of loss of or damage to such Material until the Material is returned to and accepted by Buyer. Buyer shall notify Seller promptly of any claim and shall cooperate with Seller in every reasonable way to facilitate the settlement of any such claim. *Confidential treatment will be requested SCOPE OF AGREEMENT-PLUG-INS Subject to the terms and condition of this Contract, Seller shall provide to Buyer such Material and Services [*Confidential treatment will be requested] as ordered by Buyer, and such other Material and Services as the parties may agree to include hereunder, during the term of this Contract. Seller agrees that Buyer or Buyer's Independent Contractor, may place orders for Material and or Services directly with Seller and Seller agrees to extend Buyer's pricing and warranties to Buyer's Independent Contractor with respect to Services or Material provided on behalf of or for Buyer. Seller further agrees that in no event will Buyer be responsible or liable for any promise, act, or omission of Buyer's Independent Contractor. SHIPPING AND PACKING PLUG-INS 1. Seller shall ship Material Free on Board (F.O.B.) origin; freight prepaid and added as a separate item on the invoice. (a) Unless otherwise instructed by Buyer, Seller shall ship Material to Buyer based on the lowest published price by reliable common carrier (rail, truck or freight forwarder), in order to meet Buyer's specified delivery date. Buyer has the right to designate in the Order the common carrier Seller shall use. If more cost effective transportation can be arranged, Seller shall notify Buyer and, if Buyer agrees, Seller shall ship at the agreed upon price by that agreed upon carrier. If that carrier's price exceeds the agreed upon price, or if Seller chooses not to use Buyer's designated common carrier, Buyer shall have the right to: (1) Deduct from Seller's invoice, or (2) Invoice Seller for freight charges, if any, in excess of those which would have been charged by the common carrier specified by Buyer. Further, Buyer has the right to designate routing, whether or not Buyer designates a common carrier. (3) Seller will incur a ten (10)% penalty for late deliveries exceeding twenty (20) business days of the promise date but less than forty (40) days; and a twenty (20)% penalty for late deliveries exceeding forty (40) business days. 7 9 2. Seller's bill of lading shall include Buyer's Purchase Order Number and Buyer's billing address designated for use by the common carrier; and Seller shall require the common carrier to include Buyer's Purchase Order number and Buyer's designated billing address on the common carrier's freight bill. 3. Seller shall coordinate pick up and or deliveries to Buyer's locations as follows: Hayward, CA 7:30 a.m. to 3:00 p.m. (weekdays only) Lancaster, TX 8:00 a.m. to 12:30 p.m. (weekdays only) Other locations...as mutually agreed between Buyer or Buyer's Independent Contractor at such locations and Seller. 4. Seller shall ship and package all purchased, repaired, exchanged, or modified plug-ins in accordance with GR-1421 incorporated herein by this reference. Seller shall wrap or bag individual plug-ins in anti-static material, place in "ship ready" electro static discharge (ESD) container that meet or exceed Telcordia's requirements outlined in the GR document listed herein. Any revisions, amendments, or successors to GR-1421 will become effective and thereafter applicable under this Contract, thirty (30) days after such revision is released by the Buyer to Seller. Buyer and Seller will attempt to negotiate a resolution to any objections of said revisions by Seller. For shipments to Buyer's MDC in Lancaster, Texas, Seller agrees to ship Material on pallets 42" by 42". Seller further agrees to stack Material on such pallets no higher than 48". Seller agrees to secure Packing Slip on top of pallet (one per pallet); listing 7 (seven) digit HECI, quantity ordered, quantity shipped, Purchase Order # and bar-coded in accordance with GR-383 and GR-485. In addition, Seller agrees to layer such pallets with "like HECI's" in an effort to minimize claims and reduce receiving errors. Seller further agrees to limit containers to "like HECI's" only. TERMS OF AGREEMENT This Contract is effective as of the signature date, and, unless terminated or canceled as provided in our General Agreement #98005906, shall remain in effect through March 31, 2001. Either Seller or Buyer may terminate this Contract upon thirty (30) days prior written notice to the other setting forth the effective date of such Termination. The Termination, Cancellation or expiration of this Contract shall not affect the obligations of either party to the other party pursuant to any Order previously executed hereunder, and the terms and conditions of this Contract shall continue to apply to such Order as if this Contract had not been terminated or canceled. *Confidential treatment will be requested 8 10 IN WITNESS WHEREOF, Seller and Buyer have executed the Amendment in duplicate counterparts, each of which will be deemed to be an original document as of the signature dates below. WORLD WIDE TECHNOLOGY, INC. SOUTHWESTERN BELL OPERATIONS INC. (SELLER) (BUYER) By: /s/ Mark Catalano By: /s/ Steve Welch -------------------------------------- ------------------------------ Name: Mark J. Catalano Name: Steve Welch ------------------------------------ ---------------------------- Title: Director Title: President ----------------------------------- --------------------------- Date: 9-9-1999 Date: 8/27/99 ------------------------------------ ---------------------------- 9 11 *Confidential treatment will be requested. Proprietary Information As of 1/11/99 Please discard previous edition 12 *Confidential treatment will be requested. 13 *Confidential treatment will be requested. 14 *Confidential treatment will be requested. 15 *Confidential treatment will be requested. 16 *Confidential treatment will be requested. 17 *Confidential treatment will be requested. 18 *Confidential treatment will be requested. 19 *Confidential treatment will be requested EX-10.14 13 AGREEMENT BETWEEN SBC OPERATIONS, INC & REGISTRANT 1 Ex.10.14 Agreement No. 99006728 between SBC Operations, Inc. and World Wide Technology, Inc. for EQUIPMENT, MINOR MATERIALS AND SERVICES RELATED TO THE INSTALLATION AND SALE OF TELLABS TITAN PRODUCTS *Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 TABLE OF CONTENTS 1.0 PREAMBLE...............................................................................................1 2.0 DEFINITIONS............................................................................................1 3.0 GENERAL TERMS AND CONDITIONS...........................................................................4 3.1 Agreement..............................................................................................4 3.2 Term of Agreement......................................................................................4 3.3 Termination And Cancellation...........................................................................4 3.4 Choice of Law..........................................................................................5 3.5 Cumulative Remedies....................................................................................6 3.6 Dispute Resolution.....................................................................................6 [* Confidential treatment requested] 3.8 Liens Prohibited.......................................................................................7 3.9 Title and Risk Of Loss.................................................................................7 3.10 Order of Precedence...................................................................................7 4.0 COMPLIANCE.............................................................................................7 4.1 Changes Required to Meet Codes, Laws & Regulations.....................................................7 4.2 No Third Party Beneficiaries...........................................................................8 4.3 Recyclable Material....................................................................................8 4.4 Reliability............................................................................................8 5.0 LIABILITY..............................................................................................8 5.1 Guaranty...............................................................................................8 6.0 STANDARDS..............................................................................................8 6.1 Product Change Notices.................................................................................8 6.12 Use of Published Specifications.......................................................................9 6.3 Buyer's Technical Information..........................................................................9 6.4 Marking...............................................................................................10 7.0 ORDERING..............................................................................................10 7.1 Order Procedure.......................................................................................10 7.2 Order Acknowledgment..................................................................................11 [*Confidential treatment requested] [*Confidential treatment requested] 8.2 Cables and Related Items..............................................................................12 8.3 Invoicing And Payment.................................................................................12 8.4 Changes and Suspensions...............................................................................13 9.0 DELIVERY..............................................................................................13 9.1 Delivery and Performance..............................................................................13 9.2 Shipping and Packing..................................................................................13 10.0 PERFORMANCE..........................................................................................14 10.1 Records And Audits...................................................................................14 10.2 Monthly Order And Shipment Reports...................................................................15 10.3 Action Register......................................................................................15 10.4 Work Hereunder.......................................................................................15 10.5 Work Stoppage........................................................................................16 10.6 Tools and Equipment..................................................................................16
Proprietary Information This information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement. Page i 3 Agreement No. 99006728 10.7 Use of Buyer's Systems...............................................................................16 10.8 Damages to Property and Live Equipment...............................................................17 10.9 Inspection...........................................................................................17 10.10 Installation Services...............................................................................17 10.11 Installation Performance............................................................................18 10.12 Installation/Cutover Assistance.....................................................................19 10.13 Acceptance..........................................................................................19 10.15 Relocation..........................................................................................20 11.0 REPAIR AND MAINTENANCE...............................................................................20 11.1 Notice of Delays & Liquidated Damages................................................................20 11.2 Limitation of Liability..............................................................................21 * Confidential treatment requested 13.0 OTHER................................................................................................22 13.1 Patents..............................................................................................22 13.2 Copyrights...........................................................................................22 13.3 Headings.............................................................................................22
EXHIBITS * Confidential treatment requested Exhibit B: Action Register Page ii 4 Agreement No. 99006728 1.0 PREAMBLE This Agreement No. 99006728 ("Agreement") is between World Wide Technology, Inc., a Missouri corporation ("Seller") and SBC Operations Inc., a Delaware corporation ("Buyer"). This Agreement incorporates all the terms and conditions from General Agreement No. 98005906, dated March 15 1999, between the Seller and Buyer unless specifically provided otherwise herein. To the extent that the terms and conditions of the General Agreement differ from the Agreement, the Agreement shall prevail. All orders placed relating specifically to the purchase of Tellabs Titan equipment and services ordered through World Wide Technology, Inc. shall be governed by this Agreement. To the extent that the terms and conditions of the Agreement differ from that of the Master Agreement No.T0005476, dated July 17, 1997, between Pacific Telesis Group and Tellabs Operations, Inc., the Master Agreement No. T0005476 shall prevail. Buyer and Seller agree that the term Buyer includes any of Buyer's Affiliates and the term Seller shall mean either World Wide Technology, Inc. or its Original Equipment Manufacturer (OEM) supplier, as applicable. The parties, intending to be legally bound, agree as follows: 2.0 DEFINITIONS For the purposes of this Agreement, all terms defined herein will have the meanings so defined, unless the context clearly indicates otherwise. A term defined in the singular will include the plural and vice versa when the context so indicates. "ACCEPTANCE DATE" - means the date on which a Product successfully completes the Acceptance Tests (or the end of the Acceptance Period, if the Product has not been rejected as of that date), and for Services means the later of (i) the date in which Buyer inspects and accepts Seller's Services or (ii) thirty days after Seller provides an invoice for such Services if Buyer has not rejected or accepted such Services prior thereto. "ACCEPTANCE PERIOD" means a period of thirty (30) consecutive calendar days (or the period specified in the Order) during which the Acceptance Test(s) for a Product is/are performed. "ACCEPTANCE TEST" means the performance and reliability demonstrations and tests that must be successfully completed by a Product during the Acceptance Period which may include but not be limited to: (1) Buyer's routine business transactions, (2) tests, demonstrations or transactions performed during any Seller benchmarking, and (3) any other tests, demonstrations or transactions included or referenced in the applicable Order or which are appropriate to determine whether the Product conforms to the requirements of the Order. "APPROVAL FOR USE" means that a given Seller technology (i.e., Product), which is being deployed in Buyer's network, has successfully completed all Technology Tests by Buyer, is fully approved for deployment in Buyer's network and that Buyer has approved the price for such Product, which are fundamental conditions precedent for a Product to achieve Approval For Use status. "CANCELLATION" means the occurrence by which either party puts an end to this Agreement or Orders placed under this Agreement for breach by the other and its effect is the same as that of "Termination" and, except as otherwise provided for herein, the canceling party also retains any remedy for breach of the whole Agreement or any unperformed balance. Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 1 5 Agreement No. 99006728 "CENTRALLY DEVELOPED SYSTEM" means a computer-based information system whose development project was managed and/or is being supported by Buyer. "DELIVERY DATE" means the date by which all items and parts of the Product as ordered are delivered to the destination specified in the applicable Order. "DOCUMENTATION" means including, but not be limited to, user and system manuals, and training materials in machine readable or printed form. "DOWNTIME" means that period of time during which a Product is not operating in accordance with the requirements of an Order through no fault or negligence of Buyer. Downtime for each malfunction will start one (1) hour after Buyer attempts to contact Seller's designated representative at a prearranged contact point and will end when the Product is operating in accordance with the requirements of the Order. "EQUIPMENT" means a unit of hardware, including spare parts, acquired or maintained hereunder, and includes any third party provided Equipment. "EXTENDED MAINTENANCE PERIOD" means any period of maintenance Service outside of the Principal Period of Maintenance which may be selected by Buyer. "FIELD ENGINEER" means a person in Seller's employ qualified to repair Products in a timely and professional manner. "INFORMATION" means all ideas, discoveries, concepts, know-how, trade secrets, techniques, designs, specifications, drawings, sketches, models, manuals, samples, tools, computer programs, technical information, and other confidential business, customer or personnel information or data, whether written, oral or otherwise. "INSIGNIA" means Buyer's trademarks, trade names, symbols, decorative designs of evidence of Buyer's inspection. "INSTALLATION" - means equipment mounting, placing, modification, assembly, cabling, wiring, and testing to be performed by Seller in accordance with the Specifications and/or instructions issued by, and reasonably acceptable to, Buyer. "INSTALLATION DATE" means the date by which all components of a Product or System are installed and prepared for Acceptance Tests at the location specified in the applicable Order. The Installation Date for Software and Equipment includes delivery of Program Material, manuals and supporting Documentation. "INSTALLATION SITE" means the location, established by Buyer, at which the Product will reside. "LICENSED SOFTWARE" means software licensed to Buyer. Licensed Software also includes all associated Program Material and Documentation. "ORDERS" means such purchase orders, forms, memoranda or other written communications as may be delivered to Seller for the purpose of ordering Products and Services hereunder. "PREVENTIVE MAINTENANCE" means maintenance performed or required to be performed by Seller on a scheduled basis to keep a Product in good operating condition in accordance with the requirements of the applicable Order. Preventive Maintenance will include (1) calibration, testing, adjustments, cleaning, lubrication, replacement of worn, defective or questionable parts, and minor circuit updating and modifications; (2) maintenance and engineering services necessary to retrofit or otherwise install engineering changes, modifications and improvements (including the latest engineering revision and all reliability improvements) made to any Product by Seller at any time during the maintenance term for that Product; and (3) automatic update services for all manuals and Documentation furnished with any Product. "Principal Period of Maintenance" means a consecutive ten (10) hour period daily, Monday through Friday, excluding New Year's Day, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Unless otherwise specified in the Order, such ten (10) hour period will be from 7:00 a.m. to 5:00 p.m. Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 2 6 Agreement No. 99006728 "PRODUCTS" means a unit of equipment, apparatus, components, tools, supplies, material, Software, or firmware thereto purchased or licensed hereunder by Buyer from Seller and includes third party Products provided or furnished by Seller. Products shall be deemed to include any replacement parts or products. "PROGRAM MATERIAL" means all material associated with Software provided by Seller to Buyer hereunder including, but not limited to, test data, flow charts, Documentation, source code, source code listings, data file listings, input and output formats and use instructions. "REMEDIAL MAINTENANCE" maintenance performed by Seller which is necessary to return an inoperative or malfunctioning Product to good operating condition. "SERVICE(S)" - means any and all labor, support, facilities, material, Equipment, tools, accessories, instruments and supplies necessary to perform any and all services described in the applicable Order and provided by Seller hereunder, including but not limited to, consultation, engineering, Installation, removal, maintenance, training, self-maintenance support, repair, general services, remote computer services, unloading, programming, Software maintenance, technical consultation, Documentation preparation, or any other services specified in this Agreement or in an Order. "SOFTWARE" means all programs in machine-readable (object code) form and feature descriptions which are ordered by Buyer pursuant hereto. Software includes Custom Software and Licensed Software, including any associated program, programming aid, routine, subroutine translation, compiler, diagnostic routine, control software and firmware and third party Software included in or finished by Seller. "SPECIFICATIONS" means (1) Seller's proposals, (2) Seller's published literature, descriptions, drawings and other specifications, including physical, operating, timing and maintenance characteristics, site, space, power and memory requirements, run times, compatibility, and modularity, (3) the Product manufacturer's or developer's specifications (if Seller is not the Product manufacturer or developer) and (4) any other specifications or Technical Requirements for the Products or Services which are attached to or referenced in and made a part of the applicable Order. "SYSTEM" means the collection or aggregation of Products designed to function or operate, or represented by Seller as being capable of functioning, as an entity. A System may be offered by Seller or any other source and may include products offered by other vendors. "SYSTEM CHANGE REQUEST" means a Buyer document requesting modifications to Software licensed hereunder. "TECHNICAL REQUIREMENTS" means those feature, function, operational, administrative, maintenance and support requirements as defined herein for a given technology which are provided by Buyer to Seller in accordance with this Agreement. "TECHNOLOGY TEST" means hands-on, laboratory oriented technical review and analysis by Buyer (usually performed prior to first application in Buyer's network) of Seller's Product based on specific performance, operational, protocol, and environmental criteria for potential certification as an Approved for Use technology for deployment into Buyer's network. Such Technology Test is a major component of Buyer's Approval for Use process as defined above. "TELCORDIA TECHNOLOGIES (TELCORDIA)" - In 1999 Bellcore renamed the organization, Telcordia Technologies (Telcordia). For the purposes of this Agreement all currently called Bellcore terms will be referenced by the new name "Telcordia". "TERMINATION" means the occurrence by which either party, pursuant to the provisions or powers of this Agreement or laws and regulations, puts an end to this Agreement and/or Orders placed under this Agreement other than for breach. On "Termination" all obligations which are still executory on both sides are discharged but any right based on prior breach of performance survives except as otherwise provided herein. Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 3 7 Agreement No. 99006728 "WARRANTY PERIOD" means the period during which a product or Service is covered by Seller's/OEM's warranties [*Confidential treatment will be requested]. 3.0 GENERAL TERMS AND CONDITIONS 3.1 Agreement This Agreement sets forth the terms and conditions under which Seller's Products and Services will be purchased by Buyer. This Agreement shall govern all Orders, acknowledgments, invoices and other information electronically and non-electronically transmitted during the term of this Agreement. In the event of any conflict between the Provisions of this Agreement and any Orders, the provisions of this Agreement shall prevail. The parties may modify this Agreement when an authorized representative of each party signs such modifications. Exhibits [*Confidential treatment will be requested] B, which are attached hereby, are incorporated by this reference. 3.2 Term of Agreement This Agreement shall become retroactively effective. The effective date is May 1, 1999 until December 31, 2001, unless sooner Terminated or Canceled as provided herein. Thereafter, the Agreement will be automatically renewed for successive one (1) year terms, unless either party has provided the other party with notice of termination, in accordance with Section 3.3(a). The amendment, expiration, Termination or Cancellation of this Agreement shall not affect the obligations of the parties under any Order previously issued under this Agreement, and the terms and conditions of this Agreement shall continue to apply to such Order as if this Agreement had not been amended, expired, Terminated or Canceled. 3.3 Termination And Cancellation A. Termination and Cancellation of Agreement Buyer may Terminate this Agreement in whole or in part at any time by giving Seller at least thirty (30) days' prior written notice. Upon Termination, Buyer agrees to pay Seller all amounts due for Products or Services provided by Seller under this Agreement up to and including the effective date of Termination, which payment will constitute a full and complete discharge of Buyer's obligations to Seller hereunder. In accordance with applicable laws and regulations, Buyer may Cancel this Agreement by notice, in writing, in the event that Seller (i) admits insolvency, (ii) makes an assignment for the benefit of creditors, (iii) is unable to pay debts as they mature, or (iv) has a trustee or receiver appointed over all or any substantial part of its assets. Seller shall provide Buyer with status reports on the financial viability of Seller. Providing a copy of an Annual Income Statement and Balance Sheet shall suffice to fulfill this requirement. B. Cancellation and Termination of Orders 1. Cancellation If Buyer cancels any Orders or rejects any Products pursuant to any provision of this Agreement or applicable Laws and Regulations, Seller shall, at Buyer's request, but at Seller's expense, promptly remove the affected Products from Buyer's site, restore Buyer's site to its original condition, refund to Buyer any amounts previously paid by Buyer for such Products and reimburse Buyer for any costs Buyer occurred to remove and return such Products. Upon reimbursement and refund, title to any such Products which had previously passed to Buyer shall revert to Seller. 2. Termination Page 4 8 Agreement No. 99006728 Products/Services: Buyer may at any time Terminate any Order in whole or in part upon written notice to Seller. In such event, Seller shall be entitled to reasonable Termination charges consisting of its actual and direct costs incurred to provide the Products and Services ordered by Buyer but no more than a percentage of the work performed or Products delivered prior to Termination, minus salvage or resale value of the Terminated Order. If requested, Seller agrees to substantiate such costs with proof satisfactory to Buyer. In no event shall the Termination charges on any Order hereunder exceed the Order price. No Termination charges shall apply to Products not specially manufactured for Buyer pursuant to any Order which is Terminated at least thirty (30) days prior to the required delivery date. Buyer shall not be responsible for any work performed nor for any costs incurred by Seller, Seller's sellers, or Seller's subcontractors after Buyer has provided notice of Termination. After the receipt of Buyer's payment for such Terminated Services, Seller shall deliver the physical embodiments, if any, of the items charged to and paid by Buyer. The foregoing Termination charges state the entire liability of Buyer for Termination for convenience by Buyer of any Order hereunder. C. Partial Cancellation and Termination Where a provision of this Agreement or applicable Laws and Regulations permits Buyer to Terminate or Cancel an Order, such Termination or Cancellation may, at Buyer's option, be either complete or partial. In the case of a partial Termination or Cancellation Buyer may, at its option, accept a portion of the Products or Services covered by an Order and pay Seller for such Products or Services at the unit prices set forth in such Order. The right to Cancel an Order shall also include the right to Cancel any other related Order. D. Cancellation for Default If Seller is in material default of any of its obligations under this Agreement or applicable Orders and such default continues for ten (10) days after written notice thereof is given by Buyer, then in addition to all other rights and remedies, at law or in equity, Buyer may Cancel this Agreement and/or any Order which may be affected by such default without any obligation or liability on the part of Buyer whatsoever. Notwithstanding this paragraph D, additional provisions for Cancellation of Orders hereunder are set forth in this Agreement. Buyer shall have the right to retain or return any Product already received and accepted; provided, however, if Buyer elects to return any Product, Seller shall reimburse Buyer the cost of shipping any returned Product and amounts, if any, previously paid by Buyer for such Product. Seller shall bear all expenses for removal and return of such Product. 3.4 Choice of Law The following supersedes the General Agreement No. 98005906, section entitled "Governing Law", page 7: With respect to PACIFIC, this Agreement and performance hereunder shall be governed by the laws of the state of California. With respect to SWBT, this Agreement and performance hereunder shall be governed by the laws of the state of Missouri. With respect to an Affiliate, other than PACIFIC or SWBT, this Agreement and performance hereunder shall be governed by the laws of the state in which such affiliate has its principal place of business. Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 5 9 Agreement No. 99006728 This Agreement shall be considered completed, entered into, and executed in California on behalf of PACIFIC, in Missouri on behalf of SWBT, and with respect to an Affiliate other than PACIFIC or SWBT, in the state in which the Affiliate has its principal place of business." 3.5 Cumulative Remedies Any rights of cancellation, termination, liquidated damages or other remedies prescribed in this Agreement are cumulative and are not exclusive of any other remedies to which the injured party may be entitled, including but not limited to, the remedies of specific performance and cover; however, neither party shall retain the benefit of inconsistent remedies. 3.6 Dispute Resolution Resolution of all disputes arising out of or in connection with this Agreement shall be in accordance with the following: A. The parties will attempt in good faith to promptly resolve any controversy or claim arising out of or relating to this Agreement through negotiations between executives of the parties, before resorting to other remedies available to them. B. If a controversy to claim should arise, the first level of escalation shall be Seller's designated Account Manager and Buyer's Contract Manager with escalation to intermediate and executive level management as appropriate and mutually agreed. Either Seller or Buyer may request the other to meet within fourteen (14) days at Buyer's location. C. If the matter has not been resolved within twenty-one (21) days of their first meeting, the designated representatives shall refer the matter to senior executives, who shall have full authority to settle the dispute. Thereupon, the representatives shall promptly prepare and exchange memoranda stating the issues in dispute and their positions, summarizing the negotiations which have taken place, and attaching relevant Documents. The senior executives will meet for negotiations within fourteen (14) days of the end of the twenty-one (21) day period referred to above, at a mutually agreed time. D. The first meeting shall be held at the offices of the party receiving the request to meet. If more than one meeting is held, the meetings shall be held in rotation at the offices of Seller and Buyer. All meetings will be held at a location mutually agreed upon by the parties. E. If the matter has not been resolved pursuant to the aforesaid procedures within sixty (60) days of the commencement of such procedure (which period may be extended by mutual Agreement), the controversy shall be submitted to and settled by arbitration with a panel of three (3) arbitrators, of whom each party shall appoint one (1) with the third arbitrator selected by the two (2) so chosen. The controversy shall be settled in accordance with the rules and regulations of the Center of Public Resources Guide For Resolving Disputes. Both parties agree that the arbitration award may be enforced by a court of competent jurisdiction and that the costs of such arbitration shall be divided equally. The arbitration shall be held in San Francisco, California (or as mutually agreed) and shall be conducted on a confidential basis. The arbitrator's award shall be supported by law and substantial evidence. *Confidential treatment requested Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 6 10 Agreement No. 99006728 3.8 Liens Prohibited All Services furnished to Buyer by Seller hereunder shall be free from any claims, third party liens or encumbrances. Should Seller as a general contractor of Services subcontract such Service delivery to subcontractors that have mechanics lien rights under applicable law, Buyer may require satisfactory proof that all parties furnishing labor and/or materials for the Services have been paid before making payment to Seller. 3.9 Title and Risk Of Loss The following supersedes the General Agreement No. 98005906, section entitled "Title and Risk of Loss", page 19. A. TITLE Title to Equipment purchased hereunder will vest in Buyer when the Equipment has been delivered and accepted at the destination specified in the applicable Order. If this Agreement calls for additional Services such as unloading, installation or the like to be performed after delivery, Seller will retain risk of loss to the Equipment until the additional Services have been performed to Buyer's satisfaction. Title to Software will remain in Seller. Buyer will have the right to make a reasonable number of copies of the Software for use as authorized by OEM. B. RISK OF LOSS Seller shall bear the risk of loss of or damages to any Product until delivery of the Product at the destination specified in the applicable Order and acceptance by Buyer. In the event that additional Services such as installation, unloading or the like, are to be performed by Seller, the risk of loss shall pass to Buyer after such additional Services have been performed and the Product has been accepted by Buyer. With respect to any loss or damage which occurs while Seller has the risk of loss, Buyer shall notify Seller promptly of any claim and shall cooperate with Seller to facilitate making and settling any such claim. After such delivery and acceptance, Buyer shall bear the risk of loss of or damage to such Product, except to the extent that any loss or damage arises out of or results from the negligence or willful misconduct of Seller or its agents or contractors. 3.10 Order of Precedence In the event of any conflict or inconsistency between any provisions of this Agreement and the provisions of any Order, the provisions of such Order will control but only for the purpose of such Order, and, except for such Order, the terms and conditions of this Agreement will not be deemed to be waived, amended or modified. 4.0 COMPLIANCE 4.1 Changes Required to Meet Codes, Laws & Regulations Seller shall, at no additional charge, make any changes to the Products, which are necessary to meet codes, laws or regulations which are in effect on the date of acceptance of such Products. If such changes are proposed on such date and subsequently become effective, Seller shall make such changes at a charge not to exceed the cost of labor and materials. Seller's obligations under this clause shall expire ten (10) years after acceptance of the Products in question. Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 7 11 Agreement No. 99006728 4.2 No Third Party Beneficiaries Except as otherwise provided in this Agreement, this Agreement is for the benefit of Buyer and Seller and not for any other person or entity. 4.3 Recyclable Material If requested by Buyer, Seller will identify recyclable Products by labeling or watermarking such Products in a mutually agreed upon manner. 4.4 Reliability Seller hereby agrees that OEM's Products furnished hereunder by Seller will, at the time of shipment: a. Have sufficient burn-in operating time at the component, circuit pack and/or system level to assure an Infant Mortality Factor ("IMF") of not more than 2.5. The IMF is the ratio of the failures experienced in the first year of operation (8760 hours) to the failures experienced in a year of operation at Steady State Reliability ("SSR") assuming a Weibull Infant Mortality Model with a slope of 0.75 and 10,000 hours to reach SSR. b. Meet the Quality and Reliability requirements specified in Quality Program Specification (QPS) 82.040 Issue 4 and 92.031 Issue 2. Seller further agrees that it will, at no charge, provide Buyer or its representative ("Buyer's Agent"), the accessibility and assistance necessary for Buyer or Buyer's Agent to verify that Product purchased hereunder satisfies the requirements specified in the clause entitled "QUALITY ASSURANCE." Nothing contained herein will affect Buyer's rights hereunder, under any warranty, or under any other provisions of this Agreement. 5.0 LIABILITY 5.1 Guaranty Seller shall use commercially reasonable efforts to ensure to Buyer (1) the full and faithful performance by each subcontractor of each and every covenant, duty and obligation assumed by the subcontractor with respect to the Services and (2) the payment of each and every sum due or to become due to the subcontractor in connection with the Services. The above guaranty is applicable to all changes, modifications and extensions respecting this Agreement as the parties may agree. 6.0 STANDARDS 6.1 Product Change Notices Seller agrees to notify Buyer, in advance, of any known change(s) to be made in the OEM's Products furnished in accordance with the Specifications, Software Related Documentation and/or Documentation that would impact upon either reliability, safety, or the form, fit or function of the Product. It will be OEM's responsibility to furnish Product Change Notices ("PCN") for all Products provided hereunder in accordance with TP 76305, January 1, 1997, SWB Requirements for Product Change Notices for SWBT or GR-209-CORE, Issue 1, August 1994, "Product Change Notices" for PACIFIC, as may be amended at any time, and any successor document. Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 8 12 Agreement No. 99006728 In order for Buyer to review Product changes, a minimum of thirty (30) days advance notice will be required except for those cases where an extremely unsatisfactory condition requires immediate action. The final classification of any Product change proposed by the OEM will be by mutual agreement between OEM and Buyer. For changes classified as "A" or "AC", Seller and OEM agree to promptly modify or replace, at no charge, all affected Products provided hereunder and the Documentation relevant thereto. Buyer will have the right to invoice Seller for any labor expenses incurred by Buyer attributable to the replacement of such Products. For changes classified as "B" or "D", Seller and OEM agree to notify Buyer of the exact nature thereof and discuss with Buyer details regarding the proposed implementation procedure for affected Products which is being or will be manufactured. Buyer will determine, at its option, if Products previously shipped will be modified or replaced. Should such modification or replacement be deemed necessary, Seller and OEM will arrange therefor at prices and schedules to be mutually agreed upon with Buyer prior to implementation. Relevant Documentation for such affected Products will also have provided by Seller and OEM at no charge. Any revisions to TP 76305, will become effective and thereafter applicable under this Agreement thirty (30) days after such revision is released by Buyer except for those particular revisions to which the Seller and OEM specifically objects within twenty-one (21) days of receipt, providing therewith an explanation for each such objection. Upon each such objection, Buyer, Seller and OEM will attempt to negotiate a resolution to any such objections. Notwithstanding the foregoing, any revision made to address situations potentially harmful to Buyer's network, the Premises, to address Premises security issues, to comply with statutory and/or regulatory requirements, or to Buyer's Emergency Operating Procedures will become effective and applicable immediately notwithstanding any objection by the Seller and OEM. In the event that Buyer, Seller and OEM fail to reach agreement on any change in Products proposed by OEM, Buyer will have the right without penalty to terminate this Agreement and any or all Orders for Products affected by such change(s) that may have been issued by Buyer. 6.2 Use of Published Specifications Seller shall, at no charge, provide Buyer with copies of Sellers/OEMs published Specifications, user instructions, manuals and other training materials pertaining to the Products. Buyer shall have the right to reproduce any or all of such materials as necessary for Buyer's use of such Products. 6.3 Buyer's Technical Information Seller agrees to comply, where applicable with the following technical requirements documents of Buyer: o GR-137-CORE, Issue 1, June 1, 1994. "Generic Requirements for Central Office Cable" o GR-833 CORE, Issue 5, December 1992, Revision 1, April 1993, Revision 2, June 1994. "Operations Application Messages - Network Maintenance: Network Elements and Transport Surveillance Messages". o GR-1089-CORE, Issue 1, November 1994. "Electromagnetic Compatibility and Electrical Safety - Generic Criteria for Network Telecommunications Equipment" o GR-1421-CORE, Issue 1, 7-1-94. "Generic Requirements for ESD-Protective Circuit Pack Containers" o GR-1502-CORE, Issue 1, June 1994. "Central Office Environment Detail Engineering Generic Requirements" o SR-3158 NEBS 2000 Physical Protection Guidelines for Operations Systems Hardware Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 9 13 Agreement No. 99006728 PB/SWBT Alarm Philosophy, Effective date 4-5-94 o PB/SWBT Alarm Policy Statement Effective Date June 15, 1994. o PB/SWBT Practice 790-101-322SW, March 1, 1990. Detail Engineering Guide Telephone Company Engineered (TCE) Orders Preparation Instructions o TP 76300, December 1, 1994. Installation Guidelines o TP 76310, April 1, 1992. Earthquake Engineering Guidelines o TR-EOP-000066, Issue 1, February 1987. "Space Planning Documentation Requirements" o TR-NWT-000063, Issue 5, September 1993. "Network Equipment Building Systems General Equipment Requirements (NEBS)" o TR-NWT-000078, Issue 3, December 1991. "Generic Physical Design Requirements for Telecommunications Products and Equipment" o TR-NWT-000409, Issue 3, July 1993. "Generic Requirements for Intrabuilding Optical Fiber Cable o TR-NWT-000840, Issue 1, December 1991. "Supplier Support Generic Requirements (SSGR)" o TR-NWT-000513 Generic Requirements for Power Systems o TR-NWT-000928 Generic Requirements for Fuse Panels used in Central Offices 6.4 Marking The following section supersedes the General Agreement No. 98005906, section entitled "Bar-Coding", page 3: Seller agrees to mark all Product furnished hereunder for identification purposes with (I) Seller's or OEM's model/serial/issue number, (ii) the month and year of manufacture, (iii) warranty expiration date, and (iv) for plug-in equipment, also in accordance with the current requirements outlined in Technical Publication GR-185-CORE, Issue 1, Common Language (R) Equipment Coding Processes and Guidelines, TR-795-25540-8402 (Pub. 5002), Issue 1, 1/1/74 Common Language (R) Identification of Manufacturers of Telecommunications Products, and TR-STS-000383, Issue 5, 1/1/91 Generic Requirements for Common Language (R) Barcode Labels. Seller further agrees that it will: (a) For central office plug-ins, hardwired equipment, tools and test sets, obtain at Seller's expense applicable Equipment Catalog Item ("ECI"), Continuing Property Record ("CPR") and Common Language (R) Equipment Identifier ("CLEI") information from Bell Communications Research, Inc. ("Telcordia") and provide such information to Buyer on the Order Acknowledgment. (b) Mark all hazardous Products as such in a permanent and reasonably visible manner by stating, "HAZARDOUS MATERIAL CONTAINED WITHIN," and identifying the specific hazardous material. (c) Add any other identification, which might be requested by Buyer. Charges, if any, for such additional identification marking will be as agreed upon by Seller and Buyer. 7.0 ORDERING 7.1 Order Procedure The following section supersedes the General Agreement No. 98005906, section entitled "Purchase Orders", page 15: Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 10 14 Agreement No. 99006728 Orders submitted by Buyer against this Agreement will be placed on Purchase Order Form SW-6531 for SWBT and Purchase Order Form P-2 for PACIFIC. The typed or written provisions on Buyer's Orders will be incorporated into this Agreement, but printed provisions on the reverse side thereof will be deemed deleted. Each Order shall be numbered, shall indicate the ordering party, and may include at least the following items whenever such item is applicable to the Products and Services covered by such Order: (1) The date of the Order. (2) The incorporation of this Contract and Agreement by reference (3) A complete list of the Products and Services covered by the Order, specifying, attaching or referencing the quantity, model number, program name or product identification number, description and Specifications for each. (4) The price of each Product and Service, including discounts (if any), and any additional charges. (5) The address to which Seller's invoice shall be sent. (6) Shipping instructions. (7) The destination to which the Products will be delivered and the date and time for scheduled delivery. (8) Any special terms and conditions. Order(s) placed hereunder shall be deemed accepted by Seller unless written notice to the contrary is received by Buyer within ten (10) days from Seller's receipt of such Order. Such notice will be given to Buyer in care of the address indicated on the acknowledgment copy of the Order. Any additional or different terms in any Seller quotation, acknowledgment, invoice or other communication to Buyer, whether or not such terms materially alter an Order, shall be deemed objected to by Buyer without need of further notice of objection and shall be of no effect and not in any circumstance binding upon Buyer unless expressly accepted by Buyer in writing. 7.2 Order Acknowledgment The following section is in addition to the General Agreement No. 98005906, section entitled "Order Acknowledgment", page 15. Seller agrees to provide to Buyer an Order Acknowledgment ("OA") with respect to each Order. In addition, Seller agrees to include Software Right to Use Fees, if any, on the OA. * Confidential treatment will be requested Page 11 15 Agreement No. 99006728 [*Confidential treatment requested]. Page 12 16 Agreement No. 99006728 8.4 Changes and Suspensions Buyer may, by notice to Seller at any time before complete delivery is made under any Order, make changes within the general scope of such Order, including changes to quantities, drawings, designs or specifications. In addition, Buyer may, by notice to Seller, suspend, in whole or in part, the delivery of Products and the performance of Services. If Buyer directs any such change or suspension, the parties shall agree upon any necessary adjustments in prices or dates and Buyer shall issue a revised Order reflecting such adjustments. Seller may not, without Buyer's prior written consent, make any changes whatsoever with respect to the Products or Services specified in any Order. 9.0 DELIVERY 9.1 Delivery and Performance All dates for delivery of Products and performance of Services are firm and time is of the essence. Seller's delivery interval is two to seven (2-7) weeks from receipt of Buyer's Order to Delivery Date. Upon receipt of each Order, Seller shall deliver the Products to Buyer's designated location and perform all of the Services on or before the date(s) specified, failing which Buyer may, in addition to all other remedies provided by law or equity or this Agreement (1) Cancel such Order, or (2) extend such delivery date(s) to a later date(s), subject however, to Cancellation if delivery is not made by such extended date(s). If an Order is Canceled pursuant to the paragraph above, Buyer shall have the right to retain or return any or all Products received under such Order. Seller shall reimburse Buyer the costs of shipping the returned Products and amounts, if any, previously paid by Buyer. Buyer shall pay for any Products retained at the prices set forth herein, and quantity discounts, if any, shall be applied on the basis of the quantity specified in the Order. 9.2 Shipping and Packing Seller agrees to: (a) Ship Orders complete unless instructed otherwise by Buyer. (b) Ship to the destination designated in the applicable Order in accordance with any specified routing instructions. (c) Package, mark and label Products in accordance with Buyer's Specification No. 76295. Adequate protective packaging will be furnished by Seller at no additional charge. (d) Enclose a packing slip with each shipment and, when more than one (1) package is shipped, clearly identify the one containing the packing slip. (e) Mark Buyer's Order number, item sequence numbers, and item identification numbers and descriptions on all packages, subordinate documents and shipping papers. (f) Render invoices in duplicate or as otherwise specified by the applicable Order, showing Buyer's Order number, item sequence numbers, item identification numbers and descriptions, through routing and weight. (g) Render separate invoices for each shipment or Order. (h) Mail Bills of Lading, if applicable, shipping notices and copies of transportation bills with Seller's invoices to Buyer's address indicated on the applicable Order. (i) List basic unit and part number or Common Language Equipment Identifier ("CLEI") code numbers and Continuing Property Record ("CPR") numbers for each central office product included on an invoice. (j) Limit billing on repair orders to one (1) invoice per repair order. (k) Identify software right-to-use fees on the invoice as either "application" or "operational". Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 13 17 Agreement No. 99006728 For shipments made to Seller's Material Distribution Center ("MDC") in Lancaster, Texas, Seller further agrees to ship Products on pallets with dimension of 42" by 42" and stack Equipment thereon no higher than 48". Adequate protective packaging will be furnished by Seller at no additional charge. If prepayment of transportation charges is authorized, Seller will include the transportation charges for the Products from the F.O.B. point to the designated destination as a separate charge on Seller's invoice therefor. Shipping and routing instructions may be altered by mutual agreement of the parties without written notice. C.O.D. shipments will not be accepted. Unless expressly stated to the contrary, Seller's charges for transportation Services including, but not limited to, routing, transporting, hauling, hoisting, storage and detention, are not included in any prices furnished for Products. Seller's prices include its standard packing for domestic shipments. All Products purchased, repaired or replaced and/or disposed of hereunder shall be packed and marked by Seller, at no additional charge to Buyer, to comply with or exceed (1) the standards of the National Motor Freight Traffic Associations Incorporated as published in the National Motor Freight Classification #100 ("Standards"), as may subsequently be amended, or (2) the Specifications set forth in the appendix, if any, entitled "Packaging, Packing and Container Marking Requirements". If the Products purchased, repaired, replaced, or disposed of consist of or contain hazardous materials or hazardous wastes, Seller shall package, label, mark, and transport same in accordance with applicable laws and regulations in addition to the Standards. In the event of any conflict or inconsistency between the Standards and such laws and regulations, such laws and regulations shall prevail. If Buyer requests special packaging charges, if any, shall be agreed upon by the parties. 10.0 PERFORMANCE 10.1 Records And Audits This following section supersedes the General Agreement No. 98005906, section entitled "Records and Audits", page 17: In order to enable Buyer to comply with the requirements of Parts 32 and 64 of the Rules of the Federal Communications Commission pertaining to Affiliate transactions and any similar state or federal requirements, Seller agrees, to: (a) Maintain and provide to Buyer upon request complete and accurate records related to all amounts billable to and payments made by Buyer hereunder in accordance with generally accepted accounting principles. (b) Notify Buyer prior to destroying or otherwise permanently disposing of such records and, at Buyer's option, transfer such records to Buyer. (c) Provide reasonable supporting documentation to Buyer within thirty (30) calendar days after receipt of written notification from Buyer of a dispute as to the amount of any invoice. Seller further agrees that Buyer will have the right through its accredited representatives to inspect, copy, and audit, during normal business hours, the charges invoiced to Buyer under this clause. Should Buyer request an inspection or audit, Seller will make available the pertinent records and files. This right to inspect, copy, and audit will not be limited to validating the Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 14 18 Agreement No. 99006728 accuracy of resources utilized by Seller and associated charges invoiced to Buyer but includes, without limitation, the right to inspect and audit: (i) The method for determining cost data provided to Buyer. (ii) Any cost or pricing data, records or other information pertaining to similar sales to other, Non-Affiliated buyers. (iii) Seller's accounting policies or practices. Seller will include any of the aforementioned information on its invoices and other billing documents as Buyer may reasonably require. Unless otherwise provided in this Agreement, Seller shall retain such records for a period of three (3) years from the date of final payment under the Order to which such records relate. To the extent that such records may be relevant in determining if Seller is complying with its obligations under the applicable Order, Buyer and its authorized representatives shall have access to such records for inspection, copying, and audit during normal business hours. 10.2 Monthly Order And Shipment Reports During the term hereof, Seller agrees to render monthly shipment reports on or before the fifth (5) working day of the succeeding month. The report shall in a form that indicates the total dollars paid to Seller by Buyer for each applicable Product for each month and any additional information required by Buyer. Completed forms will be sent to Buyer's address as set forth in the clause herein entitled "NOTICES." In addition, Seller agrees to render quarterly sales reports on or before the last working day of April, July, October and January. The report shall indicate the total year to date sales orders, by quarters, paid to Seller by Buyer. Specifics shall include Vendor Name(s), Product Description(s), Vendor Part Number(s), Product Price, Quantities, Purchasing Affiliate (PB, SWBT, SNET, etc.). 10.3 Action Register Buyer and Seller acknowledge that the success of Buyer's development of Seller's Products is contingent upon timely and successful resolution of issues identified in the Action Registers. Buyer reserves the right to assign items to Action Registers, which are living documents, with the understanding that Action Registers contain issues pertaining to conformance of Products with Seller's Specifications and Buyer's requirements. Seller agrees to provide timely service and resolution, including all necessary steps to address critical and high Action Register Items, to Buyer on those items identified in the Action Registers (or such successor entity or issues forum as may be maintained by Buyer). Seller further agrees to take. In pursuing the resolution of problems or issues identified in the Action Register, and in the selling of any Products to Buyer, Seller agrees to perform testing consistent with the conditions typically found in Buyer's Production environment. The current version of the Action Register is attached as Exhibit B. 10.4 Work Hereunder It is understood that visits by representatives of Seller or its suppliers for inspection, adjustment or other similar purposes in connection with Products purchased hereunder will for all purposes Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 15 19 Agreement No. 99006728 be deemed "work hereunder" and will be at no charge to Buyer unless otherwise agreed in writing with Buyer. 10.5 Work Stoppage Each party hereto agrees to notify the other party hereto at least sixty (60) days prior to the expiration of any labor agreement. For any actual work stoppage, notification will be made within the first twelve (12) hours after such stoppage has occurred. For an emergency request by Buyer during any work stoppage, Seller will provide on-site technical support of Products and/or Services provided hereunder, including but not limited to: installation, repair, calibration, removal and hauling and hoisting. Cost will not exceed current Agreement prices or, where no pricing exists, Seller's/OEM's current published prices. Should Seller not be able to provide on-site emergency service during a work stoppage, Seller will release sufficient information to a third party through a Non-Disclosure Agreement approved by Buyer to allow the requested Products and/or Services to be provided in the same manner as though Seller has provided same. Seller will receive Buyer's written approval prior to the release of any such information. 10.6 Tools and Equipment Unless otherwise specifically provided herein, Seller agrees to furnish all labor, tools and equipment (the "Tools") required for the performance of this Agreement. Upon completion of the Services, Seller agrees to promptly remove all tools, equipment, materials and debris from Buyer's premises. Should Seller use any Tools owned or rented by Buyer, Seller further agrees: (a) To defend, indemnify and hold Buyer harmless from and against any and all loss, liability, damage, expense, claim, demand or suit (including attorney's fees and court costs) of any kind and nature whatsoever (including but not limited to claims resulting from injuries or death to persons or damage to property) in any way arising out of or resulting from Seller's maintenance, possession, operation, use, storage or movement of the Tools or any accident occurring in connection therewith. (b) To accept the Tools "as is, where is" and that Buyer will have no responsibility for the condition or state of repair thereof. (c) Not to remove the Tools from Buyer's premises and to return them to Buyer upon completion of use, or at such earlier time as Buyer may request, in the same condition as when received by Seller, reasonable wear and tear excepted. All use of Tools by Seller will be subject to the provisions of the Section entitled LIABILITY, and Seller agrees to maintain at all times adequate insurance acceptable to Buyer to cover its indemnification obligations hereunder and provide Buyer, upon request, with evidence thereof. 10.7 Use of Buyer's Systems Buyer reserves the right to determine how Seller's personnel provided to perform Services hereunder will access Buyer's network remotely and locally. Seller agrees and promises to use the applicable Buyer computer systems on which the Services are provided in a professional and effective manner, and only for the purposes of the performance of this Agreement. Any other intentional use or misuse of such computer systems will constitute a breach of this Agreement. Seller acknowledges that any person Seller selects to work under this Agreement will be expected to fully comply with the known requirements, conditions, or restrictions applicable to the use of Buyer's computers or telephone network or applicable to access to Buyer's database, network or information systems. Seller will indemnify and hold Buyer harmless for any failure (whether Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 16 20 Agreement No. 99006728 negligent or intentional) to meet these known requirements, conditions, or restrictions by any of these persons. Seller further agrees to cooperate fully in any Buyer inquiry into alleged violations by Seller's personnel with respect to Buyer's computers, property or information. 10.8 Damages to Property and Live Equipment A. Buyer shall notify Seller, of any damage to or theft of tangible property, real or personal, caused directly or indirectly by Seller and of circumstances, which it believes, could give rise to such damage. Seller shall take precautions and reasonable and necessary measures to prevent further damage. Seller shall indemnify Buyer for such damage or loss in accordance with the Section entitled INDEMNIFICATION. Seller shall replace or temporarily repair such property. At Buyer's or a third party owner's option and direction, Seller shall restore or replace Buyer's or other's property to its original condition, place such property in operational condition or bear the cost of such restoration or replacement. B. The continuity of Buyer's service is of paramount importance and Seller shall at all times exercise the greatest care to prevent damage to Buyer's property and shall not use any materials, equipment or methods which, in the judgment of Buyer, might endanger or interfere with Buyer's service to its customers. C. In the event of damage to "live" equipment caused by, or as a result of Seller's negligent or reckless acts or omissions, except to the extent that the specific act or omission producing damage was expressly directed by Buyer, Seller shall be liable in accordance with the provisions of the Section entitled INDEMNIFICATION. 10.9 Inspection When requested by Buyer, Seller agrees to (a) notify Buyer or Buyer's agent when Equipment is ready for inspection, (b) give Buyer such reasonable opportunity to inspect such Equipment at any time prior to the scheduled shipment date, and (c) provide without charge any production testing facilities and personnel required to inspect the Equipment under the inspection instructions specified. Purchase of any Equipment under this Agreement is subject to Buyer's inspection and acceptance after delivery. It is mutually agreed that Buyer or Buyer's agent may develop inspection instructions which will be made a part of this Agreement at a later date by written agreement of the parties. Inspection or failure to inspect on any occasion will not affect Buyer's rights under warranty or other provisions of this Agreement. 10.10 Installation Services Seller agrees to install, at no additional charge to Buyer, all Products ordered hereunder, including all necessary cabling, connection with Buyer-supplied power, utility and communications services, and in all other respects make the Equipment ready for operational use. The Equipment will be deemed installed and ready for operational use at the conclusion of a successful Acceptance Test performed at the Installation Site, which demonstrates that the Equipment meets minimum design capabilities. Seller will provide Buyer with written documentation of the successful Acceptance Test and certify, by the Installation Date, that the Equipment is ready for operational use in accordance with Buyer's Order. Installation of the Software by Buyer or Seller will consist of a version that will perform in accordance with the corresponding published performance Specifications and will include a demonstration of the Software's features and functions using Seller's standard demonstration procedure of the installed Software on Buyer's computer system. Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 17 21 Agreement No. 99006728 The purpose of the installation demonstration will be to confirm that all Software ordered has been entered into Buyer's program library and that such Software functions in accordance with Seller's published performance Specifications associated therewith. The demonstration will be considered successfully completed when the Software output results match the standard set of results provided by Seller. If Seller installs the Software, Seller will certify in writing to Buyer, at the successful completion of the installation demonstration, that the Software has been properly installed and performs in accordance with Seller's published performance Specifications applicable thereto. If Buyer installs same, Seller agrees to provide complete installation instructions with the Software and telephone consultation during Seller's business hours, on the proper installation thereof at no additional charge to Buyer. 10.11 Installation Performance Buyer retains the right to determine the installation vendor for Products. If Installation of Products purchased hereunder is to be performed by Seller, the applicable Order(s) shall so indicate. If Seller or Seller's subcontractors are chosen to install the Products, Installation shall be performed in accordance with TP76300 "Southwestern Bell Telephone Installation Guide", dated September 1996 for SWBT or with "PACIFIC BELL/NEVADA BELL CENTRAL OFFICE EQUIPMENT INSTALLATION AND JOB ACCEPTANCE HANDBOOK" dated November 1994 for PACIFIC ("Installation Handbook"), or Telcordia Publication TR-NWT-001275" CO Environment Installation/Removal Generic Requirements" for Affiliate installations and as subsequently amended from time to time, which are incorporated herein by this reference. In addition, Seller agrees to adhere to Seller's own installation standards to the extent such standards do not reduce or detract from Buyer's installation requirements or impair or impact the design or operation of the Products. In order to install Products in SWBT's market areas, Seller must obtain prior approval from SWBT's local Vendor Certification Committees. In order to install Products in PACIFIC's market areas, Seller must be certified by PACIFIC'S Installation Vendor (IVEN) process as a qualified installation vendor before starting any Installation activity. Seller's intended use of any subcontractor or agent to install Products will likewise be subject to prior approval, which approval will not be unreasonably withheld. Seller agrees to pay certain liquidated damages for failure to (1) meet scheduled completion dates, and (2) perform central office equipment installation functions as requested by Buyer on the Order and in accordance with Buyer's specification. The amount of such damages shall be in accordance with the following schedule: 1. Installation Requirements o Seller shall perform Central Office Equipment Installation functions as requested by Buyer on the Order and in accordance with Buyer's specification. Should Seller's performance or lack thereof result in an out of service condition, the following charges will apply: Out of Service Condition - Seller will forfeit twenty percent (20%) of installation fee. o An out of service condition will require a positive reporting of the incident to the SWBT Area Manager - Maintenance Engineering, PACIFIC Maintenance Engineer, the local Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 18 22 Agreement No. 99006728 Network Operations supervisor for SWBT and PACIFIC and Buyer's representative (as described in Buyer's Installation Handbooks). 2. Completion Dates o Installation Services shall be completed in accordance with Buyer's schedule(s) and/or mutually negotiated completion schedule(s). Seller will forfeit ten percent (10%) of installation fee for failure to meet scheduled or mutually agreed advance service and/or job completion dates. Seller shall not be liable or responsible for liquidated damages for any delay caused by (1) Buyer changes, revisions or modifications, or special requirements of Buyer not communicated to Seller, (2) Buyer changes in scheduled dates, (3) failure of Buyer to provide any item to be furnished by Buyer, (4) failure of Buyer to furnish required order/engineering information prior to Seller's standard engineering interval, or (5) other reasons attributable to Buyer. Any liquidated damages for which Seller is liable pursuant to this clause shall be credited against the invoice for the affected Order, provided, however, that if the relevant invoice has been paid in full, the applicable amount for liquidated damages shall be remitted to Buyer by check. 10.12 Installation/Cutover Assistance If requested by Buyer, Seller agrees to make available at the installation site, without charge, a field engineer to render installation and cutover assistance as required by Buyer for the initial installation/cutover in each of Buyer's operating areas. 10.13 Acceptance Buyer reserves the right to accept or reject Products and Services after the delivery (including installation or other work, if required) of Products at the location designated in the applicable Order and after the performance of Services if such Products or Services fail to meet the applicable Specifications. If, prior to acceptance by Buyer, any of the Products or Services are found to be not in strict conformance to this Agreement, including the applicable Order, Buyer shall have the right (a) to reject the same and cancel any affected Order(s) or, (b) at its option, (1) in the case of Products, require that such Products be repaired or replaced promptly at Seller's risk and expense (including freight charges) and (2) in the case of Services, require the performance or reperformance of such Services. Buyer's use of Products for revenue generating purposes shall not thereby constitute acceptance. Installation of replacement Equipment will be within the time period mutually agreed upon by the parties in writing. Buyer may terminate the applicable Order and request the removal of the Equipment with no charges or penalties. Acceptance of Products by Buyer shall be without prejudice to Buyer's right to revoke acceptance pursuant to the Uniform Commercial Code. Buyer reserves the right to conduct an Acceptance Test of the Products and Services during the Acceptance Period starting the day after Seller certifies in writing that the Equipment is ready for Acceptance Testing, if Seller installs the Equipment, or the day following completion of installation by Buyer; provided, however, Acceptance Testing will not begin until Buyer personnel have been trained by OEM to operate the Equipment. In such excepted case, Acceptance Testing will begin the business day following completion of the required training. Testing will be performed to determine whether: Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 19 23 Agreement No. 99006728 associated necessary training required ensuring that technicians perform quality installations. Seller therefore, agrees, to provide training on the installation of all Equipment purchased hereunder to Buyer or any other party reasonably designated by Buyer. Such installation training shall include, but not be limited to: 1. Any unique requirements for transporting or handling of the Equipment. 2. The proper order in which the different elements that comprise the system must be installed and the location of each element. 3. The methods for routing cable and fiber within the system and up to the cable rack provided by Buyer. 4. The methods for terminating connectors that are unique to the system. 5. Proper routing and terminating of power cable and connectors. 6. Proper routing and termination of ground cable and connectors. 7. Any unique features in the design of the system that if not properly installed may adversely affect the operation of the intelligent network element. 8. The order and proper methods for applying power to the system when it is initially powered up so it does not interfere with the operation of any network element already in service. Other installation requirements are specified in Buyer's "Installation Handbook". 10.15 Relocation Upon thirty (30) days' prior written notice from Buyer, Seller agrees to prepare for relocation and reinstall Equipment purchased hereunder at any other site at Buyer's expense. The charge will be at no more than Seller's maintenance rates set forth herein. 11.0 REPAIR AND MAINTENANCE 11.1 Notice of Delays & Liquidated Damages A. Whenever any actual or potential cause delays or threatens to delay Seller's performance with respect to delivery, including the availability of promised features or functionality, in addition to all other Seller obligations and Buyer remedies, Seller shall immediately and regularly thereafter, but no less often than twice-a-month, so notify Buyer in writing. Such notice shall include all relevant information concerning the actual or potential cause of the delay and its background. During the period such actual or potential cause exists, Seller shall keep Buyer advised of its effect on Seller's performance and of the measures being taken to remove it. For purposes of this section, promised feature or functions shall include Seller's Product Specifications for a promised feature or function and Seller's written commitments to Buyer for delivery of a promised feature or function. B. Seller shall be given twenty (20) business days from the occurrence of such failure to cure its breach and/or work with Buyer to develop a plan, which will minimize Buyer's liability. Although Buyer shall have the final authority to approve any such plan, Buyer shall not unreasonably delay or withhold approval of any technically viable plan that provides a reasonable remedy for Seller's failure to meet the agreed upon delivery or completion date as specified above. Seller shall pay to Buyer in total satisfaction of this provision as liquidated damages and not as a penalty the lesser of either (i) an amount equal to one percent (1%) of the price of the Products per day for such delayed Products, or (ii) one thousand dollars ($1,000), for each day of delay occurring after the end of the twenty day cure period set forth in the preceding paragraph until the actual Delivery Date. Liquidated damages under this section shall in no event exceed 100% of the dollar volume of the portion of the Order and regularly thereafter, but no less than twice-a-month, so notify Buyer in writing. Such notice shall include all relevant information concerning the actual or potential cause of the delay and its background. During the period such actual or potential cause Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 20 24 Agreement No. 99006728 exists, Seller shall keep Buyer advised of its effect on Seller's performance and of the measures being taken to remove it. For purposes of this section, promised feature or functions shall include Seller's Product Specifications for a promised feature or function and Seller's written commitments to Buyer for delivery of a promised feature or function. B. Seller shall be given twenty (20) business days from the occurrence of such failure to cure its breach and/or work with Buyer to develop a plan, which will minimize Buyer's liability. Although Buyer shall have the final authority to approve any such plan, Buyer shall not unreasonably delay or withhold approval of any technically viable plan that provides a reasonable remedy for Seller's failure to meet the agreed upon delivery or completion date as specified above. Seller shall pay to Buyer in total satisfaction of this provision as liquidated damages and not as a penalty the lesser of either (i) an amount equal to one percent (1%) of the price of the Products per day for such delayed Products, or (ii) one thousand dollars ($1,000), for each day of delay occurring after the end of the twenty day cure period set forth in the preceding paragraph until the actual Delivery Date. Liquidated damages under this section shall in no event exceed 100% of the dollar volume of the portion of the Order which is delayed, or which cannot be deployed because of the delayed delivery of other parts of the Order. Such amount shall be paid, at Buyer's election, in the form of either cash (net 30 days after notice), credit, or a Product credit on a going-forward basis. This liquidated damage amount shall not apply where the lateness was caused by failure of a vendor to fulfill a contractual obligation to Seller where such failure was beyond the vendor's reasonable control, such as by Force Majeure, as defined in this Agreement. Buyer shall give Seller the flexibility to ship partial order quantities if deployment is reasonably feasible consistent with Buyer's deployment plans and personnel availability, in order to minimize liquidated damages. In addition to the foregoing, Seller shall diligently use proactive efforts to remedy the shortfall. Such efforts include, at no additional charge to Buyer, the following: a) an automatic and immediate allocation of resources to meet the failed commitment (or anticipated shortfall); b) the provision of hotlot or expedite status for material which is in short supply; c) expedited shipment; and, d) the waiving of lead-time requirements for further orders as necessary to meet the commitment. In the event that Seller does not deliver Products including delivery of promised features, to Buyer or complete performance of Services on or before such extended Delivery Date (which shall, unless the parties agree to a shorter period, be at least thirty (30) business days after the originally scheduled Delivery Date), Buyer may (1) cancel such Order or (2) extend the Delivery Date and hereby reserves its rights as stated above. No payments, progress or otherwise, made by Buyer to Seller after the scheduled Delivery Date shall constitute a waiver of liquidated damages, and receipt of liquidated damages shall be in lieu of consequential and incidental damages resulting from Seller's breach. 11.2 Limitation of Liability The following section supersedes the General Agreement No. 98005906, section entitled "Limitation of Liability", page 12: Except for either party's obligation under section entitled INFRINGEMENT INDEMNITY and INDEMNIFICATION, and except as Seller may be liable for liquidated damages under the Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 21 25 Agreement No. 99006728 section entitled NOTICE OF DELAYS AND LIQUIDATED DAMAGES, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES (INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS OR OF DATA), EVEN IF THE PARTIES WERE FULLY APPRISED OF THE FORSEEABILITY OF SUCH DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, UNDER OR ARISING OUT OF THIS AGREEMENT. *Confidential treatment will be requested. 13.0 OTHER 13.1 Patents No licenses, express or implied, under any patents are granted by Buyer to Seller under this Agreement. 13.2 Copyrights Seller agrees that all rights, title and interest in and to all original works of authorship which Seller produces or composes in connection with the Services shall be considered works made for hire and shall belong to the Buyer, including all copyrights thereon, and the rights to obtain registrations of copyrights thereon throughout the world. In the event that such works contemplated hereunder as works made for hire shall not be considered works made for hire, Seller hereby assigns such Works and all rights, title and interest in them to Buyer. 13.3 Headings The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 22 26 Agreement No. 99006728 IN WITNESS WHEREOF, the foregoing Agreement has been executed by authorized representatives of the parties hereto, in duplicate, as of the dates set forth below. Seller Accepted: World Wide Technology, Inc. ("Seller") By: ----------------------------------------- Typed Name: --------------------------------- Title: -------------------------------------- Date: --------------------------------------- Buyer Accepted: SBC Operations, Inc. ("Buyer") By: /s/ Steve Welch ----------------------------------------- Typed Name: Steve Welch Title: President, SBC Corporate and Administrative Services Date: 6/29/99 --------------------------------------- Proprietary Information The information contained herein is not for use of disclosure outside SBC Operation, Inc. their affiliates and World Wide Technology, Inc. except under written agreement Page 23 27 Agreement No. 99006728 *Confidential treatment will be requested. Page 1 28 Agreement No. 99006728 *Confidential treatment will be requested. Page 2 29 Agreement No. 99006728 *Confidential treatment will be requested. Page 3 30 Agreement No. 99006728 *Confidential treatment will be requested. Page 4 31 Agreement No. 99006728 *Confidential treatment will be requested. Page 5 32 Agreement No. 99006728 *Confidential treatment will be requested. Page 6 33 Agreement No. 99006728 *Confidential treatment will be requested. Page 7 34 Agreement No. 99006728 *Confidential treatment will be requested. Page 8 35 Agreement No. 99006728 *Confidential treatment will be requested. Page 9 36 Agreement No. 99006728 *Confidential treatment will be requested. Page 10 37 Agreement No. 99006728 *Confidential treatment will be requested. Page 11 38 Agreement No. 99006728 *Confidential treatment will be requested. 1 39 Agreement No. 99006728 *Confidential treatment will be requested. 2 40 Agreement No. 99006728 *Confidential treatment will be requested. 3 41 Agreement No. 99006728 *Confidential treatment will be requested. 4 42 Agreement No. 99006728 *Confidential treatment will be requested. 5 43 Agreement No. 99006728 *Confidential treatment will be requested. 6 44 Agreement No. 99006728 *Confidential treatment will be requested. 7 45 Agreement No. 99006728 *Confidential treatment will be requested. 8 46 Agreement No. 99006728 *Confidential treatment will be requested. 9 47 Agreement No. 99006728 *Confidential treatment will be requested. 10 EX-10.15 14 PRODUCT RESALE AMENDMENT 1 Ex.10.15 PRODUCT RESALE AGREEMENT No. WWTI-I BETWEEN LUCENT TECHNOLOGIES INC. AND WORLD WIDE TECHNOLOGY, INC. * Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 No. WWTI-1 Page 2 of 23 This Product Resale Agreement ("Agreement") is made by and between World Wide Technology, Inc., a Missouri corporation, with offices at 127 Weldon Parkway, St Louis Missouri 63043 ("Vendor") and Lucent Technologies Inc., a Delaware corporation, with its principal place of business at 600 Mountain Avenue, Murray Hill, New Jersey 07974 ("Lucent"). WHEREAS, Lucent desires to sell certain 5ESS(R) electronic switch system apparatus [*Confidential treatment will be requested.] ("Product(s)") and is desirous of having another company stock and furnish equipment to Ameritech Services, Inc. ("ASI"); and WHEREAS, Vendor represents that it is a reseller of telecommunications equipment and has in place the facilities and organization to stock and furnish such equipment to ASI; and WHEREAS, Lucent believes that ASI desires to make purchases of Product(s) from a certified Minority Business Enterprise ("MBE"); and WHEREAS, Vendor represents and warrants that it is a certified MBE and desires to purchase Product(s) for the sole purpose of reselling such Product(s) to ASI. NOW THEREFORE the parties agree as follows: 1. SCOPE OF AGREEMENT (a) The terms and conditions of this Agreement shall apply to transactions in which Lucent furnishes Product(s) to Vendor so that Vendor may furnish such Product solely to and for ASI. (b) In consideration of the covenants by Vendor contained herein, Vendor is granted the right to obtain the Products [*Confidential treatment will be requested.], plus such additional items as Lucent may from time to time in writing agree to furnish to Vendor, solely for the purpose of selling, or otherwise furnishing Product to ASI. Vendor shall only sell or otherwise furnish Product to ASI against ASI orders placed with Vendor. Products purchased by Vendor from Lucent pursuant to this Agreement shall not be resold, assigned or delivered to any other person or entity other than ASI and are sold solely on the representation that such purchases are related to the sale and delivery of Product to ASI. Any Products Vendor desires to purchase for work competitively awarded by ASI shall be purchased through other distribution channels or as may be mutually agreed by the parties. (c) Vendor is also a participant in Lucent's Value Added Reseller ("VAR") program and acknowledges and agrees that in performing for and on behalf of ASI, Vendor is not participating in the VAR program and that any purchases for or on behalf of ASI hereunder shall not be counted towards any awards, discounts, credits or minimum purchase commitments as may exist under the VAR program. Vendor agrees that it shall not make any claim for any such benefits for the VAR program for any sales, deliveries or efforts hereunder. LUCENT PROPRIETARY 3 No. WWTI-1 Page 3 of 23 (d) VENDOR AGREES THAT THE TERMS AND CONDITIONS OF PARAGRAPHS 1(a) THROUGH 1(c) ARE MATERIAL TO THE AGREEMENT AND ANY BREACH THEREOF BY VENDOR SHALL BE A MATERIAL BREACH AND CAUSE FOR TERMINATION AS PROVIDED HEREIN. (e) No payment of any fee is required as a condition of such grant. Lucent may, without the consent of Vendor, delete or add any Product available to Vendor. Lucent agrees to provide notice to Vendor in the event such additions and deletions to the Products available hereunder. (f) Vendor acknowledges that this Agreement does not confer upon it an exclusive right to market Product or any other items and Lucent expressly reserves the right to contract with others to market Product or any other items to ASI, and to itself engage in such marketing, in competition with Vendor. 2. DEFINITIONS For the purposes of this Agreement, the following terms and their definitions shall apply. a) "Documentation" shall mean materials useful in connection with the Product. b) "Product" shall mean those Lucent Products defined above and sold or delivered to Vendor [*Confidential treatment will be requested.]. c) "ASI" shall mean Ameritech Services, Inc. as it exists on the day of this Agreement and its current Affiliate(s) in the five (5) state Ameritech region which are formally authorized by ASI to purchase Products from Lucent. d) "Licensed Material" shall mean Software in object code form for which Lucent has the right to grant licenses or sublicenses for use by ASI. Licensed Material also includes all Documentation associated with the Software which is reasonably necessary to enable ASI to operate, administer and maintain the system for which such Software is licensed. No license to Source Code is granted hereunder. e) "Software" shall mean a stored program in object code form consisting of a set or sets of logical instructions and tables of information which guide the functioning of a processor, but the term "Software" does not mean or include Firmware. f) "Firmware" shall mean hardware or other medium containing a pattern of bits representing a Software program. g) "Source Code" shall mean any version of Software incorporating, high-level or assembly language that generally is not directly executable by a processor. LUCENT PROPRIETARY 4 No. WWTI-1 Page 4 of 23 3. CONFIDENTIALITY Vendor and Lucent shall keep this Agreement and any order issued hereunder confidential, except as reasonably necessary for performance thereunder and except to the extent disclosure may be required by applicable laws or regulations, in which latter case the party making such disclosure shall promptly inform the other, prior to making such disclosure. 4. RELATIONSHIP OF THE PARTIES The relationship of the parties under this Agreement shall be and at all times remain one of independent contractors and shall not create the relationship of franchisor and franchisee, joint venturers or principal and agent. This Agreement does not establish a franchise or agency. Vendor is not paying Lucent any franchise fee pursuant to this Agreement. Vendor shall not have authority to assume or create obligations on Lucent's behalf with respect to the Products furnished by Lucent hereunder or otherwise, and Vendor shall not take any action which has the effect of creating the appearance of having such authority. All persons employed by Vendor shall be considered solely Vendor's employees or agents, and Vendor shall be responsible for payment of all unemployment, Social Security, and other payroll taxes including contributions from them when required by law. 5. TERM This Agreement is effective upon signature of the last party, and except as otherwise provided herein, shall continue in effect for a period of one (1) year. The term of this Agreement may be extended for one (1) year periods by mutual agreement of the parties. The modification, termination or expiration of this Agreement shall not affect the rights or obligations of either party under any order accepted by Lucent before the effective date of the modification, termination or expiration. 6. OBLIGATIONS ASSUMED BY LUCENT Lucent shall: (a) make available to Vendor Products as may be changed from time to time; (b) provide or arrange for reasonable amounts of technical assistance. Lucent will make training available in accordance with its standard terms and conditions. Tuition and fees for such training shall be as advertised and available from Lucent. Training will be provided at Lucent's location(s) which normally provide(s) such training unless otherwise mutually agreed in writing. In addition to tuition fees, Vendor will bear all related lodging and transportation expenses for its employees taking the training. If Vendor requests additional technical assistance or training, Lucent will provide or arrange for it upon such terms, conditions, and prices as the parties shall mutually agree upon. LUCENT PROPRIETARY 5 No. WWTI-1 Page 5 of 23 7. OBLIGATIONS ASSUMED BY VENDOR Vendor shall: (a) obtain and maintain all government licenses, permits and approvals which are necessary and advisable for the implementation of this Agreement and comply with all applicable laws and regulations; (b) refrain from taking any action which would cause Lucent to be in violation of any law of any jurisdiction; (c) promptly inform Lucent of any facts or opinions likely to be relevant in relation to marketing of Products including, without limitation, all suspected product defect safety problems or ASI complaints; (d) provide Lucent with semi-annual summaries of sales of each Product including number of units and dollars of sales to ASI by ASI order number with monthly breakdowns. Lucent agrees to maintain the confidentiality of such information between the two companies. (e) on each anniversary of this Agreement, or as may be requested from time to time, provide Lucent with a written certification by the Vendor or other evidence as may be requested, that purchases of Product under this Agreement are solely for the purpose of sale of Product to ASI. *Confidential treatment will be requested. (g) on each anniversary of this Agreement, or as may be requested from time to time, provide Lucent with a written certification by the Vendor or other evidence as may be requested, that end or remains a certified MBE, as certified by an independent entity satisfactory to Lucent; (h) provide requested data in reasonable detail on the overall market potentials and other information related to the Product furnished hereunder as an aid in measuring Lucent's market potential and planning its efforts; and (i) give Lucent, upon at least seventy-two (72) hours notice, access during normal business hours to the premises of Vendor in order that Lucent may inspect and verify compliance by Vendor with its obligations under this Agreement. LUCENT PROPRIETARY 6 No. WWTI-1 Page 6 of 23 8. RECORDS AND AUDITS Vendor shall maintain accurate records which relate to Products furnished hereunder, including but not limited to quality control records, in accordance with generally accepted accounting and quality control principles and practices uniformly and consistently applied in a format that will permit audit. Unless otherwise provided in this Agreement, Vendor shall retain such records for a period of three (3) years from the date of final payment under the order to which such records relate. To the extent that such records may be relevant in determining if Vendor is complying with its obligations under the applicable order, Lucent and its authorized representatives shall have access to such records for inspection and audit during normal business hours upon at least seventy-two (72) hours notice. 9. FORECASTS AND ORDERS (a) Upon the execution of this Agreement, Vendor agrees to provide to Lucent a rolling monthly forecast of the projected purchases of Products by Product type. Vendor will use reasonable efforts to insure these forecasts are as accurate as possible. However, these purchasing forecasts are only projections or forecasts and are not to be construed as commitments to purchase any forecasted amount. (b) An order submitted by Vendor shall contain the information necessary for the furnishing of the Products including, without limitation, Lucent's contract number, the date of the order, the shipping destination and reference to any applicable Lucent specifications and information. Schedules and dates, including shipment dates, for the furnishing of the Products, must be agreed to by Lucent prior to its acceptance of the order. All orders submitted by Vendor shall be deemed to incorporate and be subject to the terms and conditions of this Agreement as well as any supplemental terms and conditions agreed to by authorized representatives of the parties in writing. Lucent reserves the right to reject any order for good reason. (c) Vendor acknowledges that any estimates or forecasts of potential levels of business between the parties made by Lucent during the negotiations of this Agreement were good faith estimates only and agrees that Lucent shall have no liability if such levels of business are not reached. 10. PRODUCT CHANGES Lucent may at any time without advising Vendor make changes in the Products or modify the drawings and specifications relating thereto, or substitute Products of later design to fill an order, provided the changes, modifications or substitutions under normal and proper use do not impact upon form, fit, or function or are recommended to enhance safety. Lucent may use either new, reconditioned, refurbished or remanufactured Products or parts in the furnishing of Products, spares, replacement parts or repairs under this Agreement. LUCENT PROPRIETARY 7 No. WWTI-1 Page 7 of 23 11. PRODUCT NAME CHANGE Vendor acknowledges that Lucent will be changing during the term of this Agreement the identity of some of the Products to be furnished hereunder to remove references to "AT&T" or abbreviations, contractions, or simulations thereof. At such time as Lucent elects to institute a new trade name, logo, trademark, trade device, service mark, symbol, code and/or specification in connection with all or any Products or Licensed Materials, Lucent shall notify Vendor in writing ("Name Change Notice"). Said Name Change Notice shall include, without limitation: (a) the new trade name, logo, trademark, trade device, service mark, symbol, code, and/or specification selected by Lucent (in its sole and absolute discretion); and (b) instructions, guidelines, and/or other terms and conditions governing the use by Vendor of such new trade name, logo, trademark, trade device, service mark, symbol, code and/or specification in connection with this Agreement. Effective as of that date, which shall be thirty (30) days after the date of any Name Change Notice, any and all rights of Vendor under this Agreement (including, without limitation, Clause 20, TRADEMARKS) to use any mark (as defined in Clause 20) which contains any reference to "AT&T" or any abbreviation, contraction or simulation thereof shall be terminated and null and void and thereupon all rights of Vendor under this Agreement to use any mark shall apply to and be in accordance with the Name Change Notice. * Confidential treatment will be requested 13. INVOICING AND TERMS OF PAYMENT (a) Invoices for Products will be sent upon shipment, or as soon thereafter as practical. Lucent may make partial shipments of Vendor's orders. Such partial shipments shall be separately invoiced. (b) [* Confidential treatment will be requested] (c) [* Confidential treatment requested] LUCENT PROPRIETARY 8 No. WWTI-1 Page 8 of 23 (d) Delinquent payments are subject to a late payment charge of one and one-half percent (1-1/2%) per month, or portion thereof, of the amount due (but not to exceed the maximum lawful rate). Vendor shall notify Lucent of any disputed invoices within six (6) months from the date of invoice. (e) Vendor shall be liable for and shall reimburse Lucent for all taxes and related charges (including any interest and penalties), however designated (excluding taxes on Lucent's net income) imposed upon or arising from the provision of or the transfer, sale, license, or use of Products, or other items provided by Lucent. Taxes reimbursable under this clause shall be separately listed on the invoice. (f) Lucent shall not collect the otherwise applicable tax if Vendor's purchase is exempt from Lucent's collection of such tax and a valid tax exemption certificate is furnished by Vendor to Lucent. (g) In no event shall Vendor's payment, as set forth in this Clause 13, INVOICING AND TERMS OF PAYMENT, be contingent on Vendor's resale of Product(s) or product(s) to ASI. 14. DELIVERY, TITLE AND RISK OF LOSS Shipments of Product shall be made FOB destination and title and risk of loss to such Products shall pass to Vendor upon delivery to the Vendor. Shipments of Licensed Materials shall be made FOB destination and risk of loss to such Licensed Materials shall pass to Vendor upon delivery to the Vendor. Title to Licensed Materials shall remain in Lucent. Vendor shall notify Lucent promptly of any claim with respect to loss which occurred while Lucent bears the risk of loss, of which Vendor has knowledge, and shall cooperate in every reasonable way to facilitate the settlement of any claim. For the purposes of this Section, "delivery" shall mean the point at which Lucent or Lucent's supplier or agent turns over possession of the Products and/or Licensed Material ordered pursuant to this Agreement to Vendor, Vendor's warehouse, Vendor's carrier (as may be designated in the order), or Vendor's agent and not necessarily the final destination shown on the order, prepaid and added to the invoice as may be specified on individual orders. When Vendor requests Lucent to arrange the transportation of the Product, Lucent shall ship all Products freight collect. If Lucent is instructed to ship Product prepaid and add, Lucent shall select a carrier based on the best rate, as negotiated by Lucent, and Vendor shall pay Lucent's transportation costs in accordance with the standard factors then in effect. 15. INSURANCE (a) Any and all insurance and/or bonds that may be required under the laws, ordinances and regulations of any governmental authority including Worker's Compensation and LUCENT PROPRIETARY 9 No. WWTI-1 Page 9 of 23 Employer's Liability (individually and collectively "Workers Compensation") is and shall be the sole responsibility of Vendor. Without in any way limiting Vendor's obligations as set forth in Clause [* Confidential treatment will be requested] below, Vendor shall maintain at least the following insurance: (1) Comprehensive General Liability (Bodily Injury and Property Damage) Insurance including the following supplementary coverage: (i) Contractual Liability Insurance to cover liability assumed under this Agreement; (ii) Product and Completed Operations Liability Insurance; and (iii) Broad Form Property Damage Liability Insurance. (2) In addition, if automobiles will be used by Vendor, Vendor shall maintain Automobile Bodily Injury and Property Damage Liability Insurance. Such insurance shall extend to owned, non-owned and hired automobiles used in the performance of any order and shall comply with all applicable laws, rules, and regulations. (3) The limit of the liability for such insurance as described in subparagraphs (a) (1) and (a) (2) above shall not be less than: (i) one million dollars ($1,000,000) combined single limit per occurrence, or (ii) two hundred fifty thousand dollars ($250,000) for bodily injury or death per occurrence and one hundred thousand dollars ($100,000) for property damage per occurrence. (b) The insurance specified in paragraph (a) above shall: (1) Provide that said insurance is primary coverage with respect to all insureds. (2) Contain a Standard Cross Liability Endorsement which provides that the insurance applies separately to each insured, and that the policies cover claims or suits by one insured against the other. (3) Not be terminated, canceled or substantially changed without thirty (30) days prior written notice to Lucent. (4) Identify in writing any deductible amount and type of deductible. (c) Vendor shall provide Lucent with certification, when requested by Lucent, by a properly qualified representative of the insurer, of the names of the insured, the type and amount LUCENT PROPRIETARY 10 No. WWTI-1 Page 10 of 23 of insurance, the location and operations to which the insurance applies, the expiration date and the insurer's agreement to provide written notice to Lucent at least thirty (30) days prior to the effective date of any termination, cancellation, lapse or material change in the policy. (d) Vendor's obligations to maintain the insurance and to provide policy endorsements as required herein shall survive the termination of this Agreement, and Vendor agrees to maintain such insurance and endorsements for a period of one (1) year beyond the written notice of termination by either party. (e) Vendor agrees to indemnify and save harmless Lucent from and against any losses, damages, claims and liability that arise out of or result from injuries or death to persons or damage to property caused by Vendor's acts or omissions in any way arising out of Vendor's performance under this Agreement, including claims from Lucent's customers for warranty service, representations made by Vendor and incidental and consequential damage. At Lucent's request, Vendor agrees to defend Lucent against such claims, demands, or suits at Vendor's expense. Lucent agrees to notify Vendor within a reasonable time of any written claims or demands against Lucent for which Vendor is responsible under this paragraph. 16. USE OF INFORMATION All Information which bears a proprietary legend or notice restricting its use, copying, or dissemination shall remain the property of the furnishing party ("Information"). The furnishing party grants the receiving party the right to use such Information only as follows: such Information (1) shall not be reproduced or copied, in whole or in part, except for use as authorized in this Agreement; and (2) shall, together with any full or partial copies thereof; be returned or destroyed when no longer needed. When Lucent is the receiving party, Lucent shall use such information only for the purpose of performing under this Agreement. When Vendor is the receiving party, Vendor shall use such Information only (1) to evaluate or order Lucent's Products or (2) to install, operate and maintain the particular Products for which it was originally furnished. Unless the furnishing party consents in writing, such Information shall be held in confidence by the receiving party, except for that part, if any, which is known to the receiving party free of any confidential obligation, or which becomes generally known to the public through acts not attributable to the receiving party. The receiving party may disclose such Information to other persons, upon the furnishing party's prior written authorization, but solely to perform acts which this clause expressly authorizes the receiving party to perform itself and further provided such other person agrees in writing (a copy of which writing will be provided to the furnishing party at its request) to the same conditions respecting use of Information contained in this clause and to any other reasonable conditions requested by the furnishing party. LUCENT PROPRIETARY 11 No. WWTI-1 Page 11 of 23 17. INFRINGEMENT In the event of any claim, action, proceeding or suit by a third party against Vendor alleging an infringement of any United States patent, United States copyright, or United States trademark, or a violation in the United States of any trade secret or proprietary rights by reason of the use, in accordance with Lucent's or other applicable specifications, of any Product, Licensed Material (software or related documentation), if any, or other item furnished by Lucent to Vendor under this Agreement, Lucent, at its expense, will defend Vendor, subject to the conditions and exceptions stated below. Lucent will reimburse Vendor for any cost, expense or attorney's fee, incurred at Lucent's written request or authorization, and will indemnify Vendor against any liability assessed against Vendor by final judgment on account of such infringement or violation arising out of such use. If Vendor's or ASI's use shall be enjoined or in Lucent's opinion is likely to be enjoined, Lucent will, at its expense and at its option, either (a) replace the affected Product, Licensed Material or other item furnished pursuant to this Agreement with a suitable substitute free of any infringement or violation, (b) modify it so that it will be free of the infringement or violation, or (c) procure for Vendor or ASI a license or other right to use it. If none of the foregoing options is practical, Lucent will accept the return of the enjoined Product, Licensed Material or other item and refund to Vendor any amounts paid to Lucent less a reasonable charge for any actual period of use by Vendor. Vendor shall give Lucent prompt written notice of all such claims, actions, proceedings or suits alleging infringement or violation and Lucent shall have full and complete authority to assume the sole defense thereof; including appeals, and to settle same. Vendor shall, upon Lucent's request and at Lucent's expense, furnish all information and assistance available to Vendor and cooperate in every reasonable way to facilitate the defense and/or settlement of any such claim, action, proceeding or suit. No undertaking of Lucent under this section shall extend to any such alleged infringement or violation to the extent that it: (a) arises from adherence to design modifications, specifications, drawings, or written instructions which Lucent is directed by Vendor or ASI to follow, but only if such alleged infringement or violation does not reside in corresponding commercial Product or Licensed Material of Lucent's design or selection; or (b) arises from adherence to instructions to apply Vendor's or ASI's trademark, trade name, or other company identification; or (c) resides in a Product or Licensed Material which is not of Lucent's origin and which is furnished by Vendor or ASI to Lucent for use under this Agreement; or (d) relates to use of Products, Licensed Materials or other items provided by Lucent in combinations with other Products, Licensed Materials or other items, furnished either by Lucent or others, which combination was not installed, recommended or otherwise approved by Lucent. In the foregoing cases (a) through (d), Vendor will defend and save Lucent harmless, subject to the same terms and conditions and exceptions stated above with respect to Lucent's rights and obligations under this clause. LUCENT PROPRIETARY 12 No. WWTI-1 Page 12 of 23 * Confidential treatment will be requested LUCENT PROPRIETARY 13 No. WWTI-1 Page 13 of 23 * Confidential treatment will be requested LUCENT PROPRIETARY 14 No. WWTI-1 Page 14 of 23 * Confidential treatment will be requested 20. TRADEMARKS Vendor will not, without Lucent's express written permission, use in marketing, advertising, publicity, or otherwise any trade name, trademark, trade device, service mark, symbol, code, or specification or any abbreviation, contraction, or simulation thereof ("mark") of the Lucent companies nor shall Vendor claim any ownership therein. Vendor shall not remove, deface, alter or otherwise obscure any mark of the Lucent companies which is on a Product sold under this Agreement nor shall Vendor place any mark of any other company on any such Product. Any such usage shall inure to the benefit of the Lucent company mark owner. As used in this Clause the term "Lucent" means Lucent Technologies Inc., Bell Labs and its Affiliated companies. 21. LEGISLATION AND GOVERNMENTAL REGULATIONS Vendor shall at all times comply with all applicable requirements of federal, state and local laws, ordinances, administrative rules and regulations. Vendor shall contractually require its subcontractors, distributors and agents to comply with all such legal requirements as well, and Vendor shall indemnify, defend and hold harmless Lucent for any damages, losses, costs, or penalties incurred by Lucent by virtue of such noncompliance by Vendor or its subcontractors, distributors, or agents. If requested by Lucent, Vendor shall advise Lucent in writing of the identity and addresses of its subcontractors, distributors and agents in connection with the Products. 22. TERMINATION OF ORDERS Vendor may, upon notice to Lucent, and upon terms that will compensate Lucent from all loss, terminate any order or portion thereof, issue a "hold" on an order, or suspend performance under the Agreement in whole or in part, except with respect to Products which have already been shipped or services which have already been performed. Vendor's liability to Lucent for any LUCENT PROPRIETARY 15 No. WWTI-1 Page 15 of 23 such termination, "hold" or suspension shall include, but not be limited to, the price of all services performed and of Products delivered or held for disposition, loss of profits, incurred costs (including charges made by Lucent suppliers), work in progress, and an allocation of general and administrative expenses. 23. TERMINATION OF AGREEMENT (a) Either party may terminate this Agreement without cause or reason whatsoever upon sixty (60) days prior written notice to the other setting forth the effective date of such termination. The termination of this Agreement shall not affect the obligations of the parties with respect to any orders previously entered into hereunder, and the terms and conditions of this Agreement shall continue to apply to such orders as if this Agreement had not been terminated. Upon termination of this Agreement without cause pursuant to this paragraph neither party shall be liable to the other, either for compensation or for damages of any kind or character whatsoever, whether on account of the loss by Lucent or Vendor of present or prospective profits on sales or anticipated sales, or expenditures, investments, or commitments made in connection therewith or in connection with the establishment, development or maintenance or Vendor's business, or on account of any other cause or thing whatsoever, provided that termination shall not prejudice or otherwise affect the rights or liability of the parties with respect to Products theretofore sold hereunder, or any indebtedness then owing by either party to the other. (b) Either party may terminate this Agreement, immediately, upon twenty-four (24) hours written notice: (i) if the other party files a petition in bankruptcy, or is adjudicated bankrupt, or makes a general assignment for the benefit of creditors, or becomes insolvent, or is otherwise unable to meet its business obligations for a period of six (6) months. Such party shall promptly and fully inform the other party of the imminence or occurrence of any event described in this subparagraph; or (ii) in the event of change in the controlling ownership of Vendor or in the event of a sale or assumption of all or substantially all of the assets of Vendor on or after the effective date of this Agreement, if such change, sale or assumption is unacceptable by Lucent. (iii) in the event the agreement between Vendor and ASI terminates in which event Vendor shall notify Lucent of said termination immediately and in writing. (c) Either party may terminate this Agreement if the other party breaches any of the material terms and conditions of this Agreement and the other party fails to cure such breach within thirty (30) days after written notice thereof from the non-breaching party. LUCENT PROPRIETARY 16 No. WWTI-1 Page 16 of 23 (d) Notwithstanding any other terms and provisions of this Agreement or other arrangements agreed to by the parties, termination of this Agreement shall automatically accelerate the due date of all invoices for Products such that they shall become immediately due and payable on the effective date of termination. (e) Upon notice of termination, Lucent shall be entitled to reject all or a part of any orders received from Vendor after notice but prior to the effective date of termination. Notwithstanding any credit terms made available to Vendor prior to that time, any Product shipped after notice of termination and prior to effective date of termination shall be paid for by certified or cashier's check prior to shipment. Upon termination or non-renewal of this Agreement, Vendor shall immediately: (1) Discontinue any and all use of marks (as defined in the Clause TRADEMARKS) except to identify the Products, including but not limited to such use in advertising or business material of Vendor; (2) Remove and return to Lucent or destroy at Lucent's request, any and all promotional material supplied without charge by Lucent; (3) Return, upon request, all Lucent Information as described in the paragraph Use of Information except that which Lucent agrees is necessary to operate and maintain previously furnished Products; (4) Cease holding itself out, in any other manner, as a Vendor capable of purchasing or obtaining Products for or on behalf of ASI directly from Lucent; and (5) Notify ASI and others who may, at the initiation of Vendor, identify, list or publish Vendor's name as a Vendor capable of purchasing or obtaining Products for or on behalf of ASI (including but not limited to publishers of other business directories) to discontinue such listings. 24. SURVIVAL OF OBLIGATIONS The respective obligations of Vendor and Lucent under this Agreement which by their nature would continue beyond the termination, cancellation or expiration hereof shall survive such termination, cancellation or expiration. 25. FORCE MAJEURE Except with respect to Vendor's obligation to make timely payments, neither party shall be liable to the other party for any loss, damage, delay or failure of performance resulting directly or indirectly from any cause which is beyond its reasonable control, including, but not limited to the elements; extraordinary traffic conditions, riots; civil disturbances, wars; states of belligerency or acts of the public enemy; labor disputes; strikes, work stoppages, inability to secure raw LUCENT PROPRIETARY 17 No. WWTI-1 Page 17 of 23 materials, product or transportation facilities; or the laws, regulations, acts or failure to act of any governmental authority, including but not limited to denial of a U.S. Export License, hereinafter referred to as "Force Majeure". A Party shall promptly notify the other party of the occurrence of a Force Majeure event and the notifying party shall be excused from any further performance of these obligations affected by the Force Majeure event for as long as such Force Majeure event continues and such party uses and continues to use its best efforts to recommence performance. Failure of either party to perform under this Agreement because of the endurance of a Force Majeure event for more than three (3) months will represent grounds by either party for its termination of the portion of this Agreement affected by the Force Majeure event. 26. ASSIGNMENT Except as provided in this clause, neither party shall assign this Agreement or any right or interest under this Agreement, nor delegate any work or obligation to be performed under this Agreement, (an "Assignment") without the other party's prior written consent. Nothing shall preclude a party from employing a subcontractor in carrying out its obligations under this Agreement, but a party's use of such subcontractor shall not release the party from its obligations under this Agreement. An attempted assignment or delegation in contravention of this clause shall be void and ineffective. Lucent has the sole right to assign this Agreement and to assign its rights and delegate its duties under this Agreement, in whole or in part, at any time and without Vendor's consent, to any corporate parent or to any present Affiliate or to any combination of the foregoing, provided that Lucent give prompt written notice of such assignment to Vendor. 27. SEVERABILITY If any provision in this Agreement, or any portion thereof is subsequently held to be invalid or unenforceable under any applicable statute or rule of law, then that provision or portion notwithstanding, this Agreement shall remain in full force and effect and such provision or portion shall be deemed omitted and this Agreement shall be construed as if such invalid or unenforceable provision or portion had not been contained herein. 28. RELEASE VOID Neither party shall require release or waivers of any personal rights from representatives of the other in connection with visits to its premises and both parties agree that no such releases or waivers shall be pleaded by them in any action or proceeding. 29. NON-WAIVER No waiver of the terms and conditions of this Agreement, or the failure of either party to strictly enforce any term or condition of this Agreement on one or more occasions shall be construed as a waiver of the same or of any other term or condition of this Agreement on any other occasion. LUCENT PROPRIETARY 18 No. WWTI-1 Page 18 of 23 30. CHOICE OF LAW The construction, interpretation and performance of this Agreement shall be governed by the laws of the State of New York, except for its conflicts of law provisions. 31. TECHNOLOGY OWNERSHIP Lucent retains sole ownership of the design, assembly, testing rights and information, regardless of Vendor's contribution to the value of those rights, design and information. Lucent's sale of the Products to Vendor; Lucent's grant to Vendor of the right to assemble, package, and sell the Product, conveys no ownership rights whatsoever in any Product or the Product. 32. NOTICES All notices, requests, approvals and other communications ("Notices") required or allowed under this Agreement shall be in writing and addressed as set forth below or to such other person and/or address as either party may designate by written Notice pursuant hereto. Such Notices shall be deemed to have been given when received. Notices may be delivered by hand or sent by prepaid certified or registered airmail, confirmed facsimile or electronic mail, provided a copy is also forwarded by prepaid registered airmail. Lucent Technologies Inc. 1750 E. Golf Road, Suite 500 Schaumburg, IL 60173 Attn: F. R. Bobka VENDOR: World Wide Technologies Director-Business Operations Julene Tojd 127 Weldon Parkway St. Louis, MO 63043 33. PURCHASE MONEY SECURITY INTEREST (a) Subject to Lucent's prior written notice hereunder to Vendor of Lucent's intent to file purchase money security documents as set forth in the following and Vendor's failure to resolve any default(s) leading to such action within ten (10) days of Lucent's notice, Lucent reserves and Vendor agrees that Lucent shall have a purchase money security interest in all Products heretofore sold or hereafter sold to Vendor by Lucent under this Agreement, until any and all payments and charges due Lucent under this Agreement including, without limitation, shipping and installation charges, are paid in full. Lucent shall have the right, at any time during the Term and without notice to Vendor, to file in any state or local jurisdiction such financing statements (e.g., UCC1 financing statements) as Lucent deems necessary to perfect its purchase money security interest LUCENT PROPRIETARY 19 No. WWTI-1 Page 19 of 23 hereunder. Vendor agrees to execute and deliver to Lucent all such financing statements and other documents as Lucent deems necessary to perfect its purchase money security interest hereunder. Notwithstanding the foregoing obligation, Vendor hereby irrevocably appoints Lucent as its attorney-in-fact for purposes of executing and filing such financing statements and such other documents prepared by Lucent or its designated agent for purposes of perfecting Lucent's security interest hereunder. Vendor also agrees that this Agreement may be filed by Lucent in any state or local jurisdiction as a financing statement (or as other evidence of the Lucent's purchase money security interest). (b) In addition to any other remedy available to Lucent as provided herein, by common law and by statute, Lucent may exercise its right to reclaim all Products sold to Vendor pursuant to U.C.C. Section 2-702 or such other applicable provision as it may exist from state to state, upon discovery of Vendor's insolvency, provided Lucent demands in writing reclamation of such Products before ten (10) days after receipt of such Products by Vendor, or if such 10 day period expires after the commencement of a bankruptcy case, before twenty (20) days after receipt of such Products by the Vendor. 34. SETTLEMENT OF DISPUTES The following procedures shall apply after the Effective Date to any dispute or disagreement between the parties arising out of this Agreement, provided, however, that this Clause shall not apply to indemnification claims arising under this Agreement nor to actions for injunctive relief by one party against the other. (a) Either party may give written notification of such dispute or disagreement to the other party, if the other party is Vendor, to the President and CEO of Vendor, or if the other party is Lucent, to the Vice President Sales, ASI Region ("RVP") (together being the Senior Executive Officers or "SEOs") and (b) The SEOs shall communicate with each other promptly with a view to resolving such dispute or disagreement within sixty (60) days of commencing their negotiations (or such extended period as the SEOs agree is appropriate in any case). (c) The giving of any notice regarding any dispute or disagreement hereunder shall toll the running of all applicable statutes of limitation until the later of (a) ninety (90) days following the giving of such notice or (b) thirty (30) days following the termination of discussions between the SEOs. 35. GRANT OF LICENSE (a) The license for Licensed Materials with "Tear-Me" or "Tear-Open" licenses shall be as provided in those licenses and shall be provided by Vendor in their unopened original package to the end-user. LUCENT PROPRIETARY 20 No. WWTI-1 Page 20 of 23 (b) For all other Licensed Materials which are provided to Vendor for its own use, Lucent retains title to the Licensed Materials and grants Vendor a personal, non-transferable (except as provided in paragraph (c) below) and non-exclusive license to use Licensed Materials in the territory on a single designated processor for its own business operations. The Licensed Materials shall not be copied in whole or in part except as necessary for authorized use and each copy shall bear the same copyright and proprietary marks as the original. Vendor shall not reverse engineer, decompile or disassemble any Software to obtain corresponding Source Code. (c) Lucent grants to Vendor the right to sublicense Licensed Materials to ASI only, provided Vendor obtains a written license agreement from its sublicensee which provides that it accepts the license under the terms provided in the GPA between ASI and Lucent. 36. CLAUSE HEADINGS The clauses headings contained in this Agreement are for the convenience only and are not intended to affect the meaning or interpretation of this Agreement. * Confidential treatment will be requested 38. AGREEMENT (a) The terms and conditions contained in this Agreement supersede all prior oral or written understandings between the parties and shall constitute the entire Agreement between them concerning the subject matter of this Agreement and shall not be contradicted, explained or supplemented by any course of dealing between Lucent or any of its Affiliates and Vendor or any of its Affiliates. Lucent's employees, statements and its advertisements or descriptions other than its published specifications do not constitute warranties or other contractual obligations and shall not be relied upon by Vendor as such. There are no understandings or representations, express or implied, not expressly set forth in this Agreement. No terms or conditions contained in any order or other form originated by Vendor shall apply except for quantity, description, and delivery schedule terms. Notwithstanding anything herein to the contrary, the parties intend that any agreement between the parties not otherwise identified herein not related to the Vendor status shall continue unaffected by this Agreement. (b) This Agreement shall not be modified or amended except by a writing signed by the parties to be charged, and no changes or additions to this Agreement shall be binding upon Lucent unless signed by an authorized representative of Lucent. (c) Both parties acknowledge they are sophisticated business entities with access to legal and financial counsel of their choosing and that each has had the opportunity to comment LUCENT PROPRIETARY 21 No. WWTI-1 Page 21 of 23 upon and seek modifications to this Agreement. Therefore, the rule of law of construction of ambiguities against the drafter shall not apply. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY, INC. By: /s/ William S. Atkins By: /s/ Mark Catalano ----------------------------- --------------------------------- Name: W. S. Atkins Name: Mark J. Catalano --------------------------- ------------------------------- Title: Sales Director Title: Director - Telco Unit -------------------------- ------------------------------ Date: 4-1-99 Date: 4-5-99 --------------------------- ------------------------------ LUCENT PROPRIETARY 22 No. WWTI-1 Page 22 of 23 * Confidential treatment will be requested DRAFT - FOR REVIEW ONLY LUCENT PROPRIETARY 23 No. WWTI-1 Page 23 of 23 * Confidential treatment will be requested DRAFT - FOR REVIEW ONLY LUCENT PROPRIETARY EX-10.16 15 RESELLER CONTRACT 1 Exhibit 10.16 CONTRACT NO. LSW97CWORLDWT 1 RESELLER CONTRACT BETWEEN WORLD WIDE TECHNOLOGY, INC. AND LUCENT TECHNOLOGIES, INC. * Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 CONTRACT NO. LSW97CWORLDWT 2 RESELLER CONTRACT INDEX
GENERAL PROVISIONS PAGE 1. RESELLER REPRESENTATION 5 2. SCOPE OF CONTRACT 5 3. DEFINITIONS 6 4. CONFIDENTIALITY 7 5. RELATIONSHIP OF THE PARTIES 7 6. PERIOD OF AGREEMENT 7 7. OBLIGATIONS ASSUMED BY LUCENT 7 8. OBLIGATIONS ASSUMED BY RESELLER 8 9. FORECASTS AND ORDERS 10 10. PRODUCT CHANGES 10 [* Confidential treatment will be requested] [* Confidential treatment will be requested] 13. BILLING AND PAYMENT 12 14. TITLE AND RISK OF LOSS 13 15. LIMITATION OF LIABILITY 13 16. INSURANCE 14 17. RESELLER 15
3 CONTRACT NO. LSW97CWORLDWT 3 18. USE OF INFORMATION 15 19. INFRINGEMENT OF PATENTS, TRADEMARKS AND COPYRIGHTS 16 20. DOCUMENTATION 17 [* Confidential treatment will be requested] 22. INDEMNITY BY LUCENT 19 23. TRADEMARKS 19 24. LEGISLATION AND GOVERNMENT REGULATIONS 19 25. TERMINATION OF ORDERS 20 26. TERMINATION OF CONTRACT 20 27. FORCE MAJEURE 21 28. ASSIGNMENT 21 29. SEVERABILITY 22 30. RELEASES VOID 22 31. LIENS 22 32. TAXES 22 33. NONWAIVER 23 34. CHOICE OF LAW 23 35. NOTICES 23 36. DISPUTE RESOLUTION 23 37. OPTION TO EXTEND 24 38. ATTORNEY'S FEES 24
4 CONTRACT NO. LSW97CWORLDWT 4 39. PARAGRAPH HEADINGS 24 40. ENTIRE CONTRACT 24 [* Confidential treatment will be requested]
5 CONTRACT NO. LSW97CWORLDWT 5 This contract is made as of the 15th day of April, 1997, and is between Lucent Technologies, Inc., ("LUCENT") a Delaware corporation having an office at 1111 Woods Mill Rd., Town & Country, Missouri 63017, and World Wide Technology, Inc., ("Reseller") a Missouri corporation having an office at 127 Weldon Parkway, Maryland Heights, Missouri 63043. WHEREAS, it is the objective of Southwestern Bell Telephone Company that Minority Business Enterprises ("MBE") be utilized to provide DSX Panels, Central Office Wire and Cable, Distributing Frame Wire, and Loop Electronic Cabinet equipment and systems to Southwestern Bell Telephone Company, its affiliates and subsidiaries (hereinafter collectively referred to as "SWBT"); and WHEREAS, to that end Request for Quotation identifying such objective was issued by Lucent to Solicit MBE participation, and a contract between Lucent and SWBT covering the purchase and sale of such products (the "Lucent/SWBT Contract") would be assigned to selected MBEs; and WHEREAS, based on Reseller's response to the Request for Quotation, including Reseller's price quote, Project Management Plan and Project Financial Plan, Reseller was one of three MBE's selected in this unique transaction to sell solely to SWBT within the United States as a means for achieving the above objective, and the Lucent/SWBT Contract was assigned in part to Reseller for that purpose. NOW THEREFORE the parties agree as follows: 1. RESELLER REPRESENTATION RESELLER REPRESENTS THAT IT IS A RESELLER OF COMMUNICATIONS EQUIPMENT AND SYSTEMS AND HAS IN PLACE FACILITIES AND AN ORGANIZATION TO PROMOTE AND MARKET SUCH EQUIPMENT AND SYSTEMS TO SWBT. RESELLER FURTHER REPRESENTS THAT IT HAS CONSULTED WITH ITS OWN LEGAL COUNSEL IN CONNECTION WITH THIS TRANSACTION, THAT IT IS FULLY AWARE THAT THE TERMS OF THIS CONTRACT ARE BASED ON ITS RESPONSE TO THE REQUEST FOR QUOTATION, THAT IT IS AWARE OF THE TERMS AND CONDITIONS OF THE LUCENT/SWBT CONTRACT, THAT IS HAS CONDUCTED ITS OWN INDEPENDENT REVIEW AND ANALYSIS OF THIS BUSINESS OPPORTUNITY, AND THAT IT IS AWARE OF THE BUSINESS RISKS INVOLVED IN THIS ALLIANCE, INCLUDING THE RISK THAT THE NUMBER OF SWBT ORDERS PURSUANT TO THE LUCENT/SWBT CONTRACT MAY DIFFER FROM THE NUMBER OF SUCH ORDERS ANTICIPATED BY RESELLER. 2. SCOPE OF CONTRACT The terms and conditions of this Contract shall apply to transactions in which LUCENT furnishes those items, [* Confidential treatment will be requested] 6 CONTRACT NO. LSW97CWORLDWT 6 2. SCOPE OF CONTRACT (CONTINUED) to Reseller for the sole purpose of selling, leasing or otherwise furnishing such items to Southwestern Bell Telephone Company, its affiliates and subsidiaries (hereinafter collectively referred to "SWBT"). Reseller is granted the right to obtain the Products identified in Appendix A, plus such additional items as LUCENT may from time to time in writing agree to furnish to Reseller, solely for purposes of selling, leasing or otherwise furnishing to SWBT. No payment of any fee is required as a condition of such grant. LUCENT may delete any Products [* Confidential treatment will be requested] upon thirty (30) days written notice to Reseller. Reseller agrees that it has no exclusive right to market such items and LUCENT expressly reserves the right to contract with others to market such items in the Territory, and to itself engage in such marketing, in competition with Reseller. 3. DEFINITIONS For the purpose of this Contract, the following terms and their definitions shall apply: * Confidential treatment will be requested (b) "Products": means the hardware [* Confidential treatment will be requested] (c) "Territory" means Southwestern Bell Telephone Company, including its Affiliates and Subsidiaries. (d) "Drop Shipment" - Products which are ordered from Reseller by SWBT, which Reseller in turn orders the Product from LUCENT for shipment directly to SWBT. (e) "Slow Moving Product": - for any electronic enclosure item or for Any non electronic enclosure product family that does not turn six (6) times per twelve (12) month period. (f) "Non Moving Product": - Any item that shows no activity for at least six (6) months. (g) "Obsolete Product": - Any item that will not be ordered due to engineering changes, market activity or changes in customer requirements. 7 CONTRACT NO. LSW97CWORLDWT 7 4. CONFIDENTIALITY Reseller and LUCENT shall keep this Contract and any order issued hereunder confidential, except as reasonably necessary for performance thereunder and except to the extent disclosure may be required by applicable laws or regulations, in which latter case the party making such disclosure shall promptly inform the other. 5. RELATIONSHIP OF THE PARTIES This Contract does not establish a franchise or agency. Reseller shall have no authority to assume or create obligations on LUCENT's behalf with respect to the Product or otherwise, and Reseller shall not take any action which has the effect of creating the appearance of its having such authority. The relationship of the parties under this Contract shall be and at all times remain one of independent contractors. All persons furnished by Reseller shall be considered solely Reseller's employees or agents, and Reseller shall be responsible for payment of all unemployment, Social Security and other payroll taxes including contributions from them when required by law. 6. PERIOD OF AGREEMENT This Contract is for an initial period of three (3) years effective upon being signed by both parties ("Initial Period"), and shall continue until terminated by either party upon at least sixty (60) days prior written notice to the other. The modification or termination of this Contract shall not affect the rights or obligations of either party under any order accepted by LUCENT before the effective date of the modification or termination. 7. OBLIGATIONS ASSUMED BY LUCENT LUCENT shall: (a) use its best efforts to promote, market and expand the selling or furnishing of Products to SWBT; (b) provide or arrange for reasonable amounts of technical assistance and training with regard to sales and installation of Products; (c) provide or arrange for in-warranty and out-of-warranty repair services in accordance with its standard procedures; and (d) provide additional support services in accordance with LUCENT's standard offerings. 8 CONTRACT NO. LSW97CWORLDWT 8 7. OBLIGATIONS ASSUMED BY LUCENT (CONTINUED) (e) as the parties mutually agree, LUCENT shall make arrangements to remove obsolete inventory items. LUCENT and Reseller will meet on a monthly basis to review stocking levels, slow moving items, and non-moving items for a period of twelve (12) months from contract award, or until such time that it is determined meetings are no longer required. Inventory adjustments will be mutually agreed upon at these meetings. (f) make arrangements to repurchase and remove inventory held by Reseller within thirty (30) days upon termination of this Agreement. (g) provide the necessary training to support Reseller's obligation to offer technical support to SWBT in the effective use of the Products. 8. OBLIGATIONS ASSUMED BY RESELLER Reseller shall: (a) use its best efforts to promote, market and expand selling or furnishing of Products to SWBT; (b) develop and maintain a sales organization that is capable of demonstrating to SWBT the use and capabilities of the Products and their applications and that actively and effectively obtains orders from SWBT; (c) obtain and maintain all government licenses, permits and approvals which are necessary or advisable for the servicing of this Contract and comply with all applicable laws and regulations; (d) refrain from taking any action which would cause LUCENT to be in violation of any law of any jurisdiction; (e) promptly inform LUCENT of any facts or opinions likely to be relevant in relation to marketing of Products including, without limitation, all suspected Product defects or safety problems and customer complaints; (f) provide LUCENT with monthly Point of Sale Reports by Product including number of units, dollars of sales by SWBT's location, and subsequent reports each month thereafter before the 15th of the month. Reseller shall provide such other reports as requested by LUCENT and mutually agreed to by the parties. LUCENT shall maintain the confidentiality of all such information between the two companies; 9 CONTRACT NO. LSW97CWORLDWT 9 8. OBLIGATIONS ASSUMED BY RESELLER (CONTINUED) (g) offer technical support to SWBT in the effective use of the Products, including providing instructional material furnished by LUCENT, and with respect to Loop Electronic Cabinets, shall serve as first point of contact with SWBT for purposes of addressing questions or problems relating thereto; (h) resell DSX, DFW, and Bulk Cable exclusively in this Product family after Reseller's existing stock is depleted, providing [* Confidential treatment will be requested] and performance meets mutually agreed upon standards; (i) participate in reasonable applicable training programs which LUCENT recommends to support LUCENT Product [Confidential treatment requested]; * Confidential treatment will be requested (k) provide, at no charge applicable technical information, data, technical support or service required by LUCENT for which LUCENT has provided Reseller the necessary training to fulfill any of its obligations under an order or this Contract; (l) maintain adequate inventory levels to satisfactorily meet SWBT's on job delivery performance requirements; (m) stock 80-, 90-, and 51-type Electronic Enclosures and configure them to SWBT's specifications, installing LUCENT and other Original Equipment Manufactures equipment, test the configured cabinets, pack and ship Product to requested job site; (n) stock DSX Panels and subcomponents, assemble components into finished Product according to SWBT's specifications, test, pack and ship Product to requested job site; (o) stock Distributing Frame Wire, pack and ship Product to requested job site; and (p) stock Bulk Cable products, cut and reel cable to SWBT's specifications, pack and ship to requested job site. 10 CONTRACT NO. LSW97CWORLDWT 10 9. FORECASTS AND ORDERS Upon the execution of this Contract, Reseller agrees to cooperate with LUCENT to forecast purchases of Product for the period of this Contract by types of Product. [*Confidential treatment will be requested.] As mutually agreed, per the definitions in Section 2, for up to six (6) months after receipt of items purchased [* Confidential treatment will be requested] any slow, non-moving, or obsolete items may be returned to LUCENT for full credit. An order submitted by Reseller shall contain the information necessary for the furnishing of the Products, including, without limitation, the (1) date of the order, (2) the shipping destination and (3) reference to any applicable LUCENT specifications and information specified [* Confidential treatment will be requested]. Schedules and dates, including shipment dates, for the furnishing of the Products, must be agreed to by LUCENT prior to its acceptance of the order. All orders submitted by Reseller shall be deemed to incorporate and be subject to the terms and conditions of this Contract as well as any supplemental terms and conditions agreed to by authorized representatives of the parties in writing. LUCENT RESERVES THE RIGHT TO PLACE ANY ORDER ON HOLD, DELAY SHIPMENT, AND/OR REJECT ANY ORDER DUE TO BUT NOT LIMITED TO, INSUFFICIENT CREDIT LIMITS. LUCENT MAY REJECT AN ORDER FOR ANY REASON IT DEEMS JUSTIFIABLE. 10. PRODUCT CHANGES LUCENT may, at any time without advising Reseller, make changes in Product, or modify the drawings and specifications relating thereto, or substitute Product of later design to fill an order, provided the changes, modifications, or substitutions under normal and proper use do not impact upon form, fit or function or are recommended to enhance safety. LUCENT may use either new, reconditioned, refurbished or remanufactured Products or parts in the furnishing of Product spares, replacement parts or repairs under this Contract. Any difference in the price applicable to, or the time required for performance of, a purchase order resulting from changes, modification or substitutions specified in such notice to Reseller shall be equitably adjusted and the purchase order shall be modified in writing accordingly. The Reseller shall notify LUCENT in writing of any increase in the price within thirty (30) days after receipt by Reseller of such notice to make changes. LUCENT shall purchase from Reseller the obsolete and discontinued items which are the result of the Product Change. * Confidential treatment requested. 11 CONTRACT NO. LSW97CWORLDWT 11 * Confidential treatment will be requested 12 CONTRACT NO. LSW97CWORLDWT 12 * Confidential treatment will be requested 13. BILLING AND PAYMENT (a) Invoices for Products will be sent upon shipment, or as soon thereafter as practicable. LUCENT may make partial shipments of Reseller's orders. Such partial shipments shall be separately invoiced. (b) Invoices for services will be sent as services are performed or as soon thereafter as practicable. 13 CONTRACT NO. LSW97CWORLDWT 13 13. BILLING AND PAYMENT (CONTINUED) (c) Reseller shall pay the invoiced amount within thirty (30) days from the date of invoice for replenishment order and ninety (90) days for the initial stocking order. Delinquent payments shall be subject to a late payment charge at the rate of one and one-half per cent (1 1/2%) per month or the maximum legal rate, whichever is lower. Any disputed items which LUCENT determines are not valid are due for payment based upon the original invoice date and will also be subject to a retroactive late payment charge based upon such original invoice date. The amount of credit or terms of payment may be changed or credit withdrawn by LUCENT at any time. Each shipment shall constitute an independent transaction, and Reseller shall pay for same in accordance with the specified payment terms. Reseller shall notify LUCENT of any claim on an invoice within two (2) months from the date of the invoice. (d) In the event that Reseller becomes delinquent in payment, LUCENT shall have the right to immediately terminate this Contract and to enter upon and remove from the premises of Reseller all unsold Products for which LUCENT has not received payment. 14. TITLE AND RISK OF LOSS Title (except as provided in the paragraph USE OF INFORMATION), and risk of loss of or damage to Products shall pass to Reseller upon delivery to the Reseller. Reseller shall notify LUCENT promptly of any claim with respect to loss or damage which occurs while LUCENT has the risk of loss and shall cooperate in every reasonable way to facilitate the settlement of any claim. For the purpose of this clause, "delivery" shall mean the point in which LUCENT or LUCENT's supplier or agent turns over possession of the Products to Reseller, Reseller's employees, Reseller's designated carrier, Reseller's warehouse, or mutually agreed upon facility. 15. LIMITATION OF LIABILITY EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, LUCENT AND ITS SUPPLIERS SHALL IN NO EVENT BE LIABLE TO RESELLER, ITS CUSTOMERS, OR TO ANY OTHER PERSON OR COMPANY USING ANY PRODUCT, OR SERVICE SUPPLIED UNDER THIS CONTRACT, OR TO ANY PERSON OR 14 CONTRACT NO. LSW97CWORLDWT 14 15. LIMITATION OF LIABILITY (CONTINUED) COMPANY TO WHOM RESELLER FURNISHES A PRODUCT OR SERVICE, FOR LOSS OF TIME, INCONVENIENCE, LOSS OF USE OF ANY PRODUCTS, OR PROPERTY DAMAGE CAUSED BY ANY PRODUCTS OR SERVICES OR THEIR FAILURE TO WORK, OR FOR ANY OTHER INDIRECT, SPECIAL, RELIANCE, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE ARISING OUT OF THIS CONTRACT OR AN OBLIGATION RESULTING THEREFROM, OR THE USE OR PERFORMANCE OF ANY PRODUCTS WHETHER IN AN ACTION FOR OR ARISING OUT OF BREACH OF LIABILITY OR OTHERWISE. EXCEPT FOR PERSONAL INJURY AND PROPERTY DAMAGE CLAIMS AS PROVIDED IN THE CLAUSE "INDEMNITY BY LUCENT," LUCENT's OR ITS SUPPLIER'S ENTIRE LIABILITY FOR ANY CLAIM OR LOSS, DAMAGE OR EXPENSE FROM ANY CAUSE WHATSOEVER SHALL IN NO EVENT EXCEED, AT LUCENT's OPTION, THE REPAIR OR REPLACEMENT COST, LICENSE FEE OR PURCHASE PRICE OF THE SERVICE OR ITEM WHICH DIRECTLY GIVES RISE TO THE CLAIM. NO ACTION OR PROCEEDING AGAINST LUCENT OR ITS SUPPLIER MAY BE COMMENCED MORE THAN THIRTY (30) MONTHS AFTER THE PRODUCTS ARE INITIALLY SHIPPED. THIS PARAGRAPH SHALL SURVIVE FAILURE OF ANY EXCLUSIVE REMEDY. 16. INSURANCE Reseller shall maintain and cause its agents to maintain during the term of the Contract: (a) Worker's Compensation insurance prescribed by the law of the state in which Reseller's obligations under this Contract are performed, (b) employer's liability insurance with limits of at least $100,000 each occurrence, and (c) comprehensive general liability insurance, and comprehensive automobile liability insurance if the use of motor vehicles is required, each with limits of at least $250,000 for bodily injury, including death, to any one person and $1,000,000 for any one occurrence, and $100,000 for each occurrence of property damage. Reseller agrees that Reseller, Reseller's insurers and anyone claiming by, through, under or in Reseller's behalf shall have no claim, right of action or right of subrogation against Seller based on any loss or liability insured against under the foregoing insurance. Upon request of LUCENT, Reseller and Reseller's agents shall furnish prior to the commencement of this Contract or any time thereafter, certification or adequate proof of the foregoing insurance. Certificates furnished by Reseller and Reseller's agents shall contain a clause stating that Seller is to be notified in writing at least ten (10) days prior to cancellation of or any material change in this policy. Reseller agrees to indemnify 15 CONTRACT NO. LSW97CWORLDWT 15 16. INSURANCE (CONTINUED) and save harmless Seller from and against any losses, damages, claims, demands, suits and liabilities (including reasonable attorney's fees) that arise out of or result from injuries or death to persons or damage to property caused by Reseller's acts or omissions, or those of persons furnished by Reseller or in any way arising out of the Reseller's performance of this Contract; or assertions made by persons furnished by Reseller under Worker's Compensation or similar acts; or claims, demands, suits, liabilities or costs arising out of or in any way relating to the Reseller's performance or failure of performance under this Contract. Reseller agrees to defend LUCENT at LUCENT's request against any such claims, demands or suits. In no event shall Reseller's liability exceed one million dollars ($1 million) for any one occurrence. 17. RESELLER LUCENT agrees to notify Reseller within a reasonable time of any written claims or demands against LUCENT for which Reseller is responsible under this paragraph. 18. USE OF INFORMATION (a) The term "Information" means all documentation (other than promotional materials), technical information, confidential business information, in whatever form recorded, which bears a legend restricting its use or dissemination or which either party otherwise indicates by written designation is confidential, and furnishes to the other, and all copies thereof including translations, compilations and partial copies. All Information which one party furnishes to the other under or in contemplation of this Contract, and all related documentation, shall remain the property of the furnishing party. (b) Unless the party furnishing Information consents in writing, the receiving party shall (i) hold the Information in confidence, except for any part of such Information which is known to it free of any obligation to keep in confidence or which is now generally known to the public or which later becomes generally known to the public through acts not attributable to such receiving party, or (ii) not reproduce or copy such Information, in whole or in part, except as necessary for use as authorized in this paragraph 16, (iii) if reproduction is permitted include any copyright and proprietary notices on all such copies and mark all media containing such copies with a warning that the Information is subject to restrictions contained in a Contract with the furnishing party and that such Information is the property of the furnishing party, and (iv) return or destroy such Information when no longer needed or, if such Information is recorded on an erasable storage medium, erase it. 16 CONTRACT NO. LSW97CWORLDWT 16 18. USE OF INFORMATION (CONTINUED) (c) Reseller may use such Information only to evaluate, order, market, or provide Service on Product. 19. INFRINGEMENT OF PATENTS, TRADEMARKS AND COPYRIGHTS In the event of any claim, action, proceeding or suit by a third party against Reseller alleging an infringement of any United States patent, United States copyright, or United States trademark, or a violation in the United States of any trade secret or proprietary rights by reason of the use or sale, in accordance with LUCENT's specifications, of any Product furnished by LUCENT to Reseller under this Contract, LUCENT at its expense, will defend Reseller subject to the conditions and exceptions stated below. LUCENT will reimburse Reseller for any cost, expense or attorney's fee, incurred by LUCENT's written request or authorization, and will indemnify Reseller against any liability assessed against Reseller by final judgment on account of such infringement or violation arising out of such use. If Reseller's use or sale shall be enjoined or in LUCENT's opinion is likely to be enjoined, LUCENT will, at its expense and at its option, either (1) replace the enjoined Product furnished pursuant to this Contract with a suitable substitute free of any infringement, (2) modify it so that it will be free of the infringement, or (3) procure for Reseller or Reseller's customer a license or other right to use it, (4) procure for Reseller a right to sell it. If none of the foregoing options is practical, LUCENT will remove the enjoined Product and refund to Reseller any amounts paid to LUCENT less a reasonable charge for any actual period of use. Reseller shall give LUCENT prompt written notice of all such claims, actions, proceeding or suits alleging infringement or violation and LUCENT shall have full and complete authority to assume the sole defense thereof, including appeals, and to settle same. Reseller shall, upon LUCENT's request and at LUCENT's expense, furnish all information and assistance available to Reseller and cooperate in every reasonable way to facilitate the defense and/or settlement of any such claim, action, proceeding or suit. No undertaking of LUCENT under this clause shall extend to any such alleged infringement or violation to the extent that it: (1) arises from adherence to design modifications, specifications, drawings, or written instructions which LUCENT is directed by Reseller to follow, but only if such alleged infringement or violation does not reside in corresponding commercial Product of LUCENT's design or selection; or (2) arises from adherence to instructions to apply Reseller's trademark, trade name, or other company identification; or (3) resides in a Product which is not LUCENT's origin and which is furnished by Reseller to LUCENT for use under this Contract; or (4) relates to uses of Product provided by LUCENT in combinations with other Product, furnished either by LUCENT or others, which combination was not installed, recommended or otherwise approved by LUCENT. In the foregoing cases number (1) through (4), Reseller 17 CONTRACT NO. LSW97CWORLDWT 17 19. INFRINGEMENT OF PATENTS, TRADEMARKS AND COPYRIGHTS (CONTINUED) will defend and save LUCENT harmless, subject to the same terms and conditions and exceptions stated above with respect to LUCENT's rights and obligations under this clause. Provided that with respect to (4) above, Reseller will not be obligated to indemnify LUCENT when the combination was not installed, recommended, or otherwise approved by Reseller. The liability of LUCENT and Reseller with respect to any and all claims, actions, proceedings, or suits by third parties alleging infringement of patents, trademarks, or copyrights or violation of trade secrets or proprietary rights because of, or in connection with, any items furnished pursuant to this Contract shall be limited to the specific undertakings contained in this clause. 20. DOCUMENTATION LUCENT will make available to Reseller, at no additional charge, documentation relating to Product which, at the time of sale, is customarily provided by LUCENT to its customer. * Confidential treatment will be requested 18 CONTRACT NO. LSW97CWORLDWT 18 * Confidential treatment will be requested 19 CONTRACT NO. LSW97CWORLDWT 19 22. INDEMNITY BY LUCENT LUCENT will indemnify and save harmless Reseller from any loss or damages (including reasonable attorney's fees) incurred by Reseller because of claims, suits, or demands of third parties for personal injury or tangible property damage to the extent such loss or damage is caused by or results from defective Products manufactured by LUCENT provided: 1.) Reseller promptly notifies LUCENT in writing of any suits, claims or demands against Reseller for which LUCENT is responsible under this indemnity, 2.) Reseller gives LUCENT full opportunity and authority to assume the sole defense of and settle such suits, 3.) Reseller furnishes to LUCENT upon request all information and assistance available to Reseller for defense against any such suit, claim or demand and 4.) Reseller will not be obligated to indemnify LUCENT when the combination is not installed, recommended, or otherwise approved by Reseller. LUCENT's liability under this indemnity shall in no event exceed two million dollars ($2,000,000) for any one occurrence. This indemnity is in lieu of all obligations of LUCENT, express or implied, in law or in equity, to indemnify Reseller (except pursuant to the clause INFRINGEMENT OF PATENTS, TRADEMARKS, AND COPYRIGHTS, AND THE CLAUSE LEGISLATION AND GOVERNMENT REGULATIONS). 23. TRADEMARKS Reseller will not, without LUCENT's express written permission, use in marketing, advertising, publicity, or otherwise any trade name, trademark, trade device, service mark, symbol, code or specification or any abbreviation, contraction, or simulation thereof ("Mark") of the LUCENT Companies nor shall Reseller claim any ownership therein. Reseller shall not remove, deface, alter or otherwise obscure any Mark of the LUCENT Companies which is on Product sold under this Contract nor shall Reseller place any Mark of any company on any such Product; provided however that Reseller, consistent with the provisions of this Clause, may place Reseller's Mark on the Product as provided to SWBT. Any such usage shall inure to the benefit of the LUCENT Company Mark owner. As used in this paragraph, the term "LUCENT Company" means LUCENT and its associated companies. 24. LEGISLATION AND GOVERNMENT REGULATIONS Reseller shall at all times comply with all applicable requirements of federal, state and local laws, ordinances, administrative rules and regulations. Reseller shall contractually require its subcontractors, distributors and agents to comply with all such legal requirements as well, and Reseller shall indemnify, defend and hold harmless LUCENT for any damages, losses, costs, or penalties incurred by LUCENT by virtue of such non-compliance by Reseller or its subcontractors, distributors or agents. If requested by LUCENT, Reseller shall advise LUCENT in writing of the identity and addresses of its subcontractors, distributors and agents in connection with the Product. 20 CONTRACT NO. LSW97CWORLDWT 20 24. LEGISLATION AND GOVERNMENT REGULATION (CONTINUED) Likewise, LUCENT shall at all times comply with requirements of federal, state and local laws, ordinances, administrative rules and regulations as are applicable to LUCENT. LUCENT shall indemnify, defend and hold harmless Reseller for any damages, losses, costs or penalties incurred by Reseller by virtue of such non-compliance by LUCENT or its subcontractors, distributors, agent or employees. 25. TERMINATION OF ORDERS Reseller at any time may issue a "Hold" Order or cancel, terminate, or suspend performance with respect to any Order placed hereunder, in whole or in part, without LUCENT's prior written consent. Reseller shall be obligated to indemnify LUCENT against the loss associated with any such action by paying termination charges calculated in accordance with the following principles: (1) as to Product delivered or services performed, Reseller shall be liable for the full price; (2) as to Product ready for delivery, Reseller shall be liable for an amount not to exceed the price for the Product; (3) as to work in process, Reseller shall be liable for an amount not to exceed the sum of LUCENT's sunk costs, a reasonable allocation of LUCENT's general and administrative expenses and an appropriate profit factor. LUCENT shall make a reasonable attempt to minimize the loss associated with Reseller's "Hold" Order or cancellation or termination and, if requested, LUCENT shall substantiate the termination charges which Reseller is obligated to pay and LUCENT's efforts to mitigate those charges with reasonable proof. 26. TERMINATION OF CONTRACT Either party may terminate this Contract without cause upon sixty (60) days written notice to the other party given at any time. Upon termination of this Contract without cause pursuant to this paragraph neither party shall be liable to the other, either for compensation of for damages of any kind or character whatsoever, whether on account of the loss by LUCENT or Reseller of present or prospective profits on sales or anticipated sales, or expenditures, investments or commitments made in connection therewith or in connection with the establishment, development or maintenance of Reseller's business, or on account of any other cause or thing whatsoever, provided that termination shall not prejudice or otherwise affect the rights or liabilities of the parties with respect to Products theretofore sold hereunder, or any indebtedness then owing by either party to the other. Notwithstanding any other terms or provisions of this Contract or other arrangements agreed to by the parties, termination of this Contract shall automatically accelerate the due date of all invoices for Product such that they shall become immediately due and payable on the effective date of termination. Upon notice of termination, LUCENT shall be entitled to reject all or a part of any orders received from Reseller after notice but prior to the effective date of termination. Notwithstanding any credit terms made available to 21 CONTRACT NO. LSW97CWORLDWT 21 26. TERMINATION OF CONTRACT (CONTINUED) Reseller prior to that time, any Product shipped after notice of termination and prior to effective date of termination shall be paid for by certified or cashier's check prior to shipment. Upon termination or non-renewal of this Contract, Reseller shall immediately: (a) Discontinue any and all use of Marks as defined in the paragraph TRADEMARKS) except to identify the Product, including but not limited to such use in advertising or business Product of Reseller; (b) Remove and return to LUCENT or destroy at LUCENT's request, any and all promotional material supplied without charge by LUCENT; (c) Return, upon request, all LUCENT confidential information except that which LUCENT agrees is necessary to operate and maintain previously furnished Product; (d) Cease holding itself out, in any other manner, as a Reseller of the Products; and (e) Notify and arrange for all publishers and others who may identify, list or publish Reseller's name as a Reseller of the Products (including but not limited to publishers of telephone directories, yellow pages and other business directories) to discontinue such listings. The respective obligations of Reseller and LUCENT under this contract which by their nature would continue beyond the termination, cancellation or expiration hereof, shall survive termination, cancellation or expiration hereof. 27. FORCE MAJEURE Except with respect to Reseller's obligation to make timely payments, neither party shall be held responsible for any delay or failure in performance to the extent that such delay or failure is caused by fires, strikes, embargoes, explosions, earthquakes, floods, wars, water, the elements, labor disputes, government requirements, civil or military authorities, acts of God or by the public enemy, inability to secure raw materials or transportation facilities, acts or omissions of carriers or suppliers or other causes beyond its control whether or not similar to the foregoing. 28. ASSIGNMENT Reseller shall not assign any right or interest under this Contract or delegate any work or other obligation to be performed or owned by Reseller under this Contract without the 22 CONTRACT NO. LSW97CWORLDWT 22 28. ASSIGNMENT (CONTINUED) prior to written consent of LUCENT. Any attempted assignment or delegation in contravention of the above provision shall be void and ineffective. LUCENT has the right to assign this Contract and to assign its rights and delegate its duties under this Contract, in whole or in part, at any time and without Reseller's consent, to any corporate parent, to any present or future affiliate or subsidiary of LUCENT, or to any combination of the foregoing. LUCENT shall give Reseller prompt written notice of the assignment. The assignment of any rights and the delegation of any duties shall be subject to the provisions, terms and conditions of this Contract. 29. SEVERABILITY If any of the provisions of this Contract shall be invalid or unenforceable such invalidity or unenforceability shall not invalidate or render unenforceable the entire Contract, but rather the entire Contract shall be construed as if not containing the particular invalid or unenforceable provision or provisions, and the rights and obligations of each party shall be construed and enforced accordingly. However, in the event such provision is considered an essential element of this Contract, the parties shall promptly negotiate a replacement thereof. 30. RELEASES VOID Neither party shall require release or waivers of any personal rights form representatives of the other in connection with visits to its premises and both parties agree that no such releases or waivers shall be pleaded by them in any action or proceeding. 31. LIENS All Products provided by LUCENT to Reseller shall be free of all liens and encumbrances. 32. TAXES The prices set forth in Appendix A do not include applicable taxes and such prices shall not be subject to change as a result of any change in Reseller's or LUCENT's tax liabilities. To the extent sales taxes and or any other tax are applicable to sales made by Reseller to SWBT, the collection or other processing of such tax shall be the responsibility of Reseller. 23 CONTRACT NO. LSW97CWORLDWT 23 33. NONWAIVER No course of dealing, course of performance or failure of either party strictly to enforce any term, right or condition of this Contract shall be construed as a waiver of any term, right or condition. 34. CHOICE OF LAW The construction, interpretation and performance of this Contract shall be governed by the laws of the State of Missouri. 35. NOTICES All notices under this Contract shall be in writing and shall be given by telegram or similar communication, or by certified or registered mail, addressed to the addresses set forth at the beginning of this Contract or to such other address as either party may designate by notice pursuant hereto. Such notices shall be deemed to have been given when received. 36. DISPUTE RESOLUTION A. Any controversy or claim, whether based on contract, tort, strict liability, fraud, misrepresentation, or any other legal theory, related directly or indirectly to this Contract ("Dispute") shall be resolved solely in accordance with the terms of this Section 36. B. If the Dispute cannot be settled by good faith negotiation between the parties, Lucent and you will submit the Dispute to non-binding mediation. If complete agreement cannot be reached within thirty (30) days of submission to mediation, any remaining issues will be resolved by binding arbitration in accordance with Sections 36C and 36D, except that Lucent reserves the right to obtain an injunction in court to prevent you use of the Products in violation of this Contract. The Federal Arbitration Act, 9 U.S.C. Sections 1 to 15, not state law, will govern the arbitrability of all Disputes. C. A single arbitrator who is knowledgeable in the telecommunications field or in commercial matters will conduct the arbitration. The arbitrator's decision and award will be final and binding and may be entered in any court with jurisdiction. The arbitrator will not have authority to modify or expand any of the provisions of this Agreement (e.g., Section 14 The Limitation of Liability provision of this Agreement). D. Any mediation or arbitration commenced pursuant to this Agreement will be conducted under the then current rules of the alternate dispute resolution (ADR) firm selected by the parties. If the parties are unable to agree on an ADR firm, the parties will 24 CONTRACT NO. LSW97CWORLDWT 24 36. DISPUTE RESOLUTION (CONTINUED) conduct the mediation and, if necessary, the arbitration under the then current rules and supervision of the American Arbitration Association (AAA). Lucent and you will each bear its own attorneys' fees associated with the mediation and, if necessary, the arbitration. Lucent and you will pay all other costs and expenses of the mediation/arbitration as the rules of the selected ADR firm provide. 37. OPTION TO EXTEND Subject to the conditions stated herein, Reseller will have the right to extend the period specified in the clause herein entitled Period of Agreement for twenty four (24) months by giving LUCENT written notice at least thirty (30) days' prior to the end of this Contract's Initial Period. Within ten (10) days of the date of Buyer's notice to extend the Initial Period, LUCENT will notify Reseller in writing whether LUCENT proposes to increase its prices under this Contract. If it does and the parties fail to agree on the increased prices within twenty (20) days after the date of LUCENT's notice to Reseller, then Reseller's notice to extend will be considered withdrawn and the Contract shall come to a conclusion in accordance with its terms and prices for outstanding Orders will not be revised. 38. ATTORNEY'S FEES If legal action is commenced to enforce the performance of any part of this Contract, the prevailing party shall be paid by the other party reasonable attorney's fees and expenses. 39. PARAGRAPH HEADINGS The paragraph headings contained in this Contract are for convenience only and are not intended to affect the meaning or interpretation of this Contract. 40. ENTIRE CONTRACT The terms and conditions contained in this Contract supersede all prior oral or written understandings between the parties and shall constitute the entire Contract between them concerning the subject matter of this Contract and shall not be contradicted, explained or supplemented by any course of dealing between LUCENT or any of its affiliates and 25 CONTRACT NO. LSW97CWORLDWT 25 40. ENTIRE CONTRACT (CONTINUED) Reseller or any of its affiliates, LUCENT's employees' statement and its advertisements or descriptions, other than its Published specifications, do not constitute warranties or other contractual obligations and shall not be relied upon by Reseller as such. There are no understandings or representations, express or implied, not expressly set forth in this Contract. No terms or conditions contained in any order or other form originated by Reseller shall apply except for quantity, description, and delivery schedule terms. This contract shall not be modified or amended except by a writing signed by the party to be charged, and no changes or additions to this Contract shall be binding upon LUCENT unless signed by an authorized representative of LUCENT. Lucent Technologies, Inc. World Wide Technology, Inc. By: /s/ Beverly J. Harris By: /s/ David Steward --------------------------------- --------------------------------- Typed Name: Beverly J. Harris Typed Name: David Steward Title: Business Management Director Title: President-CEO Date: April 15, 1997 Date: 4/15/97 ------------------------------- ------------------------------- 26 LUCENT TECHNOLOGIES PROPRIETARY 1 * Confidential treatment will be requested 27 LUCENT TECHNOLOGIES PROPRIETARY 2 * Confidential treatment will be requested 28 LUCENT TECHNOLOGIES PROPRIETARY 3 * Confidential treatment will be requested 29 LUCENT TECHNOLOGIES PROPRIETARY * Confidential treatment will be requested 4 30 LUCENT TECHNOLOGIES PROPRIETARY * Confidential treatment will be requested 5 31 Contract LSW97CWORLDT * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 32 Contract LSW97CWORLDT * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 33 Contract LSW97CWORLDT * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 34 Contract LSW97CWORLDT * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 35 Contract LSW97CWORLDT * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 36 Contract LSW97CWORLDT * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 37 Contract LSW97CWORLDT * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 38 Contract LSW97CWORLDT * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 39 Contract LSW97CWORLDT * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 40 Contract LSW97CWORLDT *Confidential treatment will be requested. RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 41 Contract LSW97CWORLDT *Confidential treatment will be requested. RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 42 Contract LSW97CWORLDT *Confidential treatment will be requested. RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. EX-10.17 16 PRODUCT RESALE AGREEMENT 1 Ex. 10.17 PRODUCT RESALE AGREEMENT BETWEEN LUCENT TECHNOLOGIES INC. AND WORLD WIDE TECHNOLOGIES INC. *Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 Page 2 TABLE OF CONTENTS 1. SCOPE OF AGREEMENT....................................................4 2. DEFINITIONS...........................................................5 3. CONFIDENTIALITY.......................................................5 4. RELATIONSHIP OF THE PARTIES...........................................6 5. TERM..................................................................6 6. OBLIGATIONS ASSUMED BY LUCENT TECHNOLOGIES............................6 7. OBLIGATIONS ASSUMED BY VENDOR.........................................6 8. RECORDS AND AUDITS....................................................7 9. FORECASTS AND ORDERS..................................................8 10. PRODUCT CHANGES.......................................................8 11. PRODUCT NAME CHANGE...................................................8 [* Confidential treatment will be requested] 13. INVOICING.............................................................9 14. DELIVERY, TITLE AND RISK OF LOSS.....................................10 15. INSURANCE............................................................10 16. USE OF INFORMATION...................................................12 17. INFRINGEMENT.........................................................12 [* Confidential treatment will be requested] 20. TRADEMARKS...........................................................15
Lucent and Six R Proprietary 3 Page 3 21. LEGISLATION AND GOVERNMENTAL REGULATIONS.............................15 22. TERMINATION OF ORDERS................................................15 23. TERMINATION OF AGREEMENT.............................................16 24. SURVIVAL OF OBLIGATIONS..............................................17 25. FORCE MAJEURE........................................................17 26. ASSIGNMENT...........................................................19 27. SEVERABILITY.........................................................19 28. RELEASE VOID.........................................................19 29. NON-WAIVER...........................................................19 30. CHOICE OF LAW........................................................19 31. TECHNOLOGY OWNERSHIP.................................................19 32. NOTICES..............................................................20 33. PURCHASE MONEY SECURITY INTEREST.....................................20 34. SETTLEMENT OF DISPUTES...............................................21 35. GRANT OF LICENSE.....................................................21 36. PARAGRAPH HEADINGS...................................................22 [Confidential treatment requested] 38. ENTIRE AGREEMENT.....................................................22 [Confidential treatment requested]
Lucent and Six R Proprietary 4 Page 4 This Product Resale Agreement is made by and between World Wide Technologies Inc., a Missouri corporation with offices at 127 Weldon Parkway, St. Louis, Missouri ("Vendor") and Lucent Technologies Inc., a Delaware corporation with its principal place of business at 600 Mountain Avenue, Murray Hill, New Jersey ("Lucent"). WHEREAS, Lucent desires to sell certain 5ESS (R) electronic switch system apparatus [* Confidential treatment will be requested] ("Product(s)") and is desirous of having another company stock and furnish equipment to Bell Atlantic Corporation ("Bell Atlantic"); and WHEREAS, Vendor represents that it is a reseller of telecommunications equipment and has in place the facilities and organization to stock and furnish such equipment to Bell Atlantic; and WHEREAS, Lucent believes that Bell Atlantic desires to make purchases of Product(s) from a certified Minority Owned Business ("BE"); and WHEREAS, Vendor represents and warrants that it is a certified MBE and desires to purchase Product(s) for the sole purpose of reselling such Product(s) to Bell Atlantic; NOW THEREFORE the parties agree as follows: 1. SCOPE OF AGREEMENT (a) The terms and conditions of this Agreement shall apply to transactions in which Lucent furnishes Product(s) to Vendor so that Vendor may furnish such Product solely to and for Bell Atlantic. (b) In consideration of the covenants by Vendor contained herein, Vendor is granted the right to obtain the Products [* Confidential treatment will be requested] plus such additional items as Lucent may from time to time in writing agree to furnish to Vendor, solely for the purpose of selling, or otherwise furnishing Product to Bell Atlantic. Vendor shall only sell or otherwise furnish Product to Bell Atlantic against Bell Atlantic orders placed with Vendor. Products purchased by Vendor from Lucent pursuant to this Agreement shall not be resold, assigned or delivered to any other person or entity other than Bell Atlantic and are sold solely on the representation that such purchases are related to the sale and delivery of Product to Bell Atlantic. Any Products Vendor desires to purchase for work competitively awarded by Bell Atlantic shall be purchased through other distribution channels or as may be mutually agreed by the parties. (c) Vendor is also a participant in Lucent's Value Added Reseller ("VAR") program and acknowledges and agrees that in performing for and on behalf of Bell Atlantic, Vendor is not participating in the VAR program and that any purchases for or on behalf of Bell Atlantic hereunder shall not be counted towards any awards, discounts, credits or minimum purchase commitments as may exist under the VAR program. Vendor agrees that it shall not make any claim for any such benefits for the VAR program for any sales, deliveries or efforts hereunder. Lucent and Six R Proprietary 5 Page 5 (d) VENDOR AGREES THAT THE TERMS AND CONDITIONS OF PARAGRAPHS 1(a) THROUGH 1(c) ARE MATERIAL TO THE AGREEMENT AND ANY BREACH THEREOF BY VENDOR SHALL BE A MATERIAL BREACH AND CAUSE FOR TERMINATION AS PROVIDED HEREIN. (e) No payment of any fee is required as a condition of such grant. Lucent may, without the consent of Vendor, delete or add any Product available to Vendor. Lucent agrees to provide notice to Vendor in the event such additions and deletions to the Products available hereunder. (f) Vendor acknowledges that this Agreement does not confer upon it an exclusive right to market Product or any other items and Lucent expressly reserves the right to contract with others to market Product or any other items to Bell Atlantic, and to itself engage in such marketing, in competition with Vendor. 2. DEFINITIONS For the purposes of this Agreement, the following terms and their definitions shall apply. a) "Documentation" shall mean materials useful in connection with the Product. b) "Product" shall mean those Lucent Products defined above and sold or delivered to Vendor [* Confidential treatment will be requested] c) "Bell Atlantic" shall mean Bell Atlantic Corporation as it exists on the day of this Agreement and its Affiliate(s) in the domestic United States which are formally authorized by Bell Atlantic to purchase Products from Lucent. d) "Licensed Material" shall mean Software in object code form for which Lucent has the right to grant licenses or sublicenses for use by Bell Atlantic. Licensed Material also includes all documentation associated with the Software which is reasonably necessary to enable Bell Atlantic to operate, administer and maintain the system for which such Software is licensed. No license to Source Code is granted hereunder. e) "Software" shall mean a stored program in object code form consisting of a set or sets of logical instructions and tables of information which guide the functioning of a processor, but the term "Software" does not mean or include Firmware. f) "Firmware" shall mean hardware or other medium containing a pattern of bits representing a Software program. g) "Source Code" shall mean any version of SOFTWARE incorporating, high-level or assembly language that generally is not directly executable by a processor. 3. CONFIDENTIALITY Lucent and Six R Proprietary 6 Page 6 Vendor and Lucent shall keep this Agreement and any order issued hereunder confidential, except as reasonably necessary for performance thereunder and except to the extent disclosure may be required by applicable laws or regulations, in which latter case the party making such disclosure shall promptly inform the other, prior to making such disclosure. 4. RELATIONSHIP OF THE PARTIES The relationship of the parties under this Agreement shall be and at all times remain one of independent contractors and shall not create the relationship of franchisor and franchisee, joint venturers or principal and agent. This Agreement does not establish a franchise or agency. Vendor is not paying Lucent any franchise fee pursuant to this Agreement. Vendor shall not have authority to assume or create obligations on Lucent's behalf to the Products furnished by Lucent hereunder or otherwise, and Vendor shall not take any action which has the effect of creating the appearance of having such authority. All persons employed by Vendor shall be considered solely Vendor's employees or agents, and Vendor shall be responsible for payment of all unemployment, Social Security, and other payroll taxes including contributions from them when required by law. 5. TERM This Agreement is effective upon signature of the last party, and except as otherwise provided herein, shall continue in effect for a period of one (1) year. The term of this Agreement may be extended for one (1) year periods by mutual Agreement of the parties. The modification, termination or expiration of this Agreement shall not affect the rights or obligations of either party under any order accepted by Lucent before the effective date of the modification, termination or expiration. 6. OBLIGATIONS ASSUMED BY LUCENT TECHNOLOGIES Lucent Technologies shall: (a) make available to Vendor Products as may be changed from time to time; (b) provide or arrange for reasonable amounts of technical assistance. Lucent will make training available in accordance with its standard terms and conditions. Tuition and fees for such training shall be as advertised and available from Lucent. Training will be provided at Lucent's location(s) which normally provide(s) such training unless otherwise mutually agreed in writing. In addition to tuition fees, Vendor will bear all related lodging and transportation expenses for its employees taking the training. If Vendor requests additional technical assistance or training, Lucent will provide or arrange for it upon such terms, conditions, and prices as the parties shall mutually agree upon. 7. OBLIGATIONS ASSUMED BY VENDOR Vendor shall: (a) obtain and maintain all government licenses, permits and approvals which are necessary and advisable for the implementation of this Agreement and comply with all applicable laws and regulations; Lucent and Six R Proprietary 7 Page 7 (b) refrain from taking any action which would cause Lucent to be in violation of any law of any jurisdiction; (c) promptly inform Lucent of any facts or opinions likely to be relevant in relation to marketing of Products including, without limitation, all suspected product defect safety problem or Bell Atlantic complaints; (d) provide Lucent with semi-annual summaries of sales of each Product including number of units and dollars of sales to Bell Atlantic by Bell Atlantic order number with monthly breakdowns. Lucent agrees to maintain the confidentiality of such information between the two companies. (e) on each anniversary of this Agreement, or as may be requested from time to time, provide Lucent with a written certification by the Vendor or other evidence as may be requested, that purchases of Product under this Agreement are solely for the purpose of sale of Product to Bell Atlantic. [* Confidential treatment will be requested] (g) on each anniversary of this Agreement, or as may be requested from time to time, provide Lucent with a written certification by the Vendor or other evidence as may be requested, that end or remains a certified MBE, as certified by an independent entity satisfactory to Lucent; (h) provide requested data in reasonable detail on the overall market potentials and other information related to the Product furnished hereunder as an aid in measuring Lucent's market potential and planning its efforts; (i) give Lucent, upon at least seventy two (72) hours notice, access during usual business hours to the premises of Vendor in order that Lucent may inspect and verify compliance by Vendor with its obligations under this Agreement; and 8. RECORDS AND AUDITS Vendor shall maintain accurate records which relate to Products furnished hereunder, including but not limited to quality control records, in accordance with generally accepted accounting and quality control principles and practices uniformly and consistently applied in a format that will permit audit. Unless otherwise provided in this Agreement, Vendor shall retain such records for a period of three (3) years from the date of final payment under the order to which such records relate. To the extent that such records may be relevant in determining if Vendor is complying with its obligations under the applicable Lucent and Six R Proprietary 8 Page 8 order, Lucent and its authorized representatives shall have access to such records for inspection and audit during normal business hours upon at least seventy two (72) hours notice. 9. FORECASTS AND ORDERS (a) Upon the execution of this Agreement, Vendor agrees to provide to Lucent a rolling monthly forecast of the projected purchases of Products by product type. Vendor will use reasonable efforts to insure these forecasts are as accurate as possible. However, these purchasing forecasts are only projections or forecasts and are not to be construed as commitments to purchase any forecasted amount. (b) An order submitted by Vendor shall contain the information necessary for the furnishing of the Products and services including, without limitation, Lucent's Contract Number, the date of the order, the shipping destination and reference to any applicable Lucent specifications and information. Schedules and dates, including shipment dates, for the furnishing of the Products, must be agreed to by Lucent prior to its acceptance of the order. All orders submitted by Vendor shall be deemed to incorporate and be subject to the terms and conditions of this Agreement as well as any supplemental terms and conditions agreed to by authorized representatives of the parties in writing. Lucent reserves the right to reject any order for good reasons. (c) Vendor acknowledges that any estimates or forecasts of potential levels of business between the parties made by Lucent during the negotiations of this Agreement were good faith estimates only and agrees that Lucent shall have no liability if such levels of business are not reached. 10. PRODUCT CHANGES Lucent may at any time without advising Vendor make changes in the Products or modify the drawings and specifications relating thereto, or substitute Products of later design to fill an order, provided the changes, modifications or substitutions under normal and proper use do not impact upon form, fit, or function or are recommended to enhance safety. Lucent may use either new, reconditioned, refurbished or remanufactured Products or parts in the furnishing of Products, spares, replacement parts or repairs under this Agreement consistent with its agreement with Bell Atlantic. 11. PRODUCT NAME CHANGE Vendor acknowledges that Lucent will be changing during the term of this Agreement the identity of some of the Products to be furnished hereunder to remove references to "AT&T" or abbreviations, contractions, or simulations thereof. At such time as Lucent elects to institute a new trade name , logo, trademark, trade device, service mark, symbol, code and/or specification in connection with all or any Products or Licensed Materials, Lucent shall notify Vendor in writing ("Name Change Notice"). Said Name Change Notice shall include, without limitation: (a) the new trade name, logo, trademark, trade device, service mark, symbol, code and/or specification Lucent and Six R Proprietary 9 Page 9 selected by Lucent (in its sole and absolute discretion); and (b) instructions, guidelines, and/or other terms and conditions governing the use by Vendor of such new trade name, logo, trademark, trade device, service mark, symbol, code and/or specification in connection with this Agreement. Effective as of that date which shall be thirty (30) days after the date of any Name Change Notice, any all rights of Vendor under this Agreement (including, without limitation, Section 20 TRADEMARKS) to use any mark (as defined in Section 20) which contains any references to "AT&T" or any abbreviation, contraction or simulation thereof shall be terminated and null and void and thereupon all rights of Vendor under this Agreement to use any mark shall apply to and be in accordance with the Name Change Notice. [* Confidential treatment will be requested] 13. INVOICING [* ] (a) Invoices for Products will be sent upon shipment, or as soon thereafter as practical. Lucent may make partial shipments of Vendor's orders. Such partial shipments shall be separately invoiced. [* Confidential treatment will be requested] Lucent and Six R Proprietary 10 Page 10 (c) Vendor shall be liable for and shall reimburse Lucent for all taxes and related charges (including any interest and penalties), however designated (excluding taxes on Lucent's net income) imposed upon or arising from the provisions of or the transfer, sale, license, or use of Products, or other items provided by Lucent. Taxes reimbursable under this clause shall be separately listed on the invoice. (d) Lucent shall not collect the otherwise applicable tax if Vendor's purchase is exempt from Lucent's collection of such tax and a valid tax exemption certificate is furnished by Vendor to Lucent. 14. DELIVERY, TITLE AND RISK OF LOSS Shipments of Product shall be made FOB destination and title and risk of loss to such Products shall pass to Vendor upon delivery to the Vendor. Shipments of Licensed Materials shall be made FOB destination and risk of loss to such Licensed Materials shall pass to Vendor upon delivery to the Vendor. Title to Licensed Materials shall remain in Lucent. Vendor shall notify Lucent promptly of any claim with respect to loss which occurred while Lucent bears the risk of loss, of which Vendor has knowledge, and shall cooperate in every reasonable way to facilitate the settlement of any claim. For the purposes of this Section, "delivery" shall mean the point at which Lucent or Lucent's supplier or agent turns over possession of the Products and/or Licensed Material ordered pursuant to this Agreement to Vendor, Vendor's warehouse, Vendor's carrier (as may be designated in the order), or Vendor's agent and not necessarily the final destination shown on the order prepaid and added to the invoice as may be specified on individual Purchase Orders. When Vendor requests Lucent to arrange the transportation of the Product, Lucent shall ship all Products freight collect. If Lucent is instructed to ship Product prepaid and add, Lucent shall select a carrier based on the best rate, as negotiated by Lucent, and Vendor shall pay Lucent's transportation costs in accordance with the standard factors then in effect. 15. INSURANCE (a) Any and all insurance and/or bonds that may be required under the laws, ordinances and regulations of any governmental authority including Workers' Compensation and Employer's Liability (individually and collectively "Workers Compensation") is and shall be the sole responsibility of Vendor. Without in any way limiting Vendor's obligations as set forth in Article 19 VENDOR'S REMEDIES below, Vendor shall maintain at least the following insurance: (1) Comprehensive General Liability (Bodily Injury and Property Damage) Insurance including the following supplementary coverage: (i) Contractual Liability Insurance to cover liability assumed under this Agreement (ii) Product and Completed Operations Liability Insurance; and (iii) Broad Form Property Damage Liability Insurance (2) In addition, if automobiles will be used in the performance of the Services, Vendor shall maintain Automobile Bodily Injury and Property Damage Liability Insurance. Such insurance shall extend to owned, non-owned and hired automobiles used in The performance of any order and shall comply with all applicable laws, rules and regulations. Lucent and Six R Proprietary 11 Page 11 (3) The limit of the liability for such insurance as described in subparagraphs (a) (1) and (a) (2) above and shall not be less than: (i) one million ($1,000,000) dollars combined single limit per occurrence or (ii) two hundred fifty thousand ($250,000) for bodily injury or death per occurrence and one hundred thousand ($100,000) for property damage per occurrence. (b) The insurance specified in paragraph (a) above shall: (1) Provide that said insurance is primary coverage with respect to all insureds. (2) Contain a Standard Cross Liability Endorsement which provides that the insurance applies separately to each insured, and that the policies cover claims or suits by one insured against the other. (3) Not be terminated, canceled or substantially changed without thirty (30) days prior written notice to Lucent. (4) Identify in writing any deductible amount and type of deductible. (c) Vendor shall provide Lucent with certification, when requested by Lucent, by a properly qualified representative of the insurer, of the names of the insured, the type and amount of insurance, the location and operation to which the insurance applies, the expiration date and the insurer's agreement to provide written notice to Lucent at least thirty (30) days prior to the effective date of any termination, cancellation, lapse or material change in the policy. (d) Vendor's obligations to maintain the insurance and to provide policy endorsements as required herein shall survive the termination of this Agreement, and Vendor agrees to maintain such insurance and endorsements for a period of one (1) year beyond the written notice of termination by either party. (e) Vendor agrees to indemnify and save harmless Lucent from and against any losses, damages, claims and liability that arises out of or result from injuries or death to persons or damage to property caused by Vendor's acts or omissions in any way arising out of Vendor's performance under this Agreement, including claims from Lucent's customers for warranty service, representations made by Vendor and incidental and consequential damage. At Lucent's request, Vendor agrees to defend Lucent against such claims, demands, or suits at Vendor's expense. Lucent agrees to notify Vendor within a reasonable time of any written claims or demands against Lucent for which Vendor is responsible under this paragraph. Lucent and Six R Proprietary 12 Page 12 16. USE OF INFORMATION All Information which bears a proprietary legend or notice restricting its use, copying, or dissemination shall remain the property of the furnishing party ("Information"). The furnishing party grants the receiving party the right to use such Information only as follows: such information (1) shall not be reproduced or copied, in whole or in part, except for use as authorized in this Agreement; and (2) shall, together with any full or partial copies thereof; be returned or destroyed when no longer needed. When Lucent is the receiving party, Lucent shall use such information only for the purpose of performing under this Agreement. When Vendor is the receiving party, Vendor shall use such Information only (1) to evaluate or order Lucent's Products or (2) to install, operate and maintain the particular Products for which it was originally furnished. Unless the furnishing party consents in writing, such Information shall be held in confidence by the receiving party, except for that part, if any, which is known to the receiving party free of any confidential obligation, or which becomes generally known to the public through acts not attributable to the receiving party. The receiving party may disclose such Information to other persons, upon the furnishing party's prior written authorization, but solely to perform acts which this clause expressly authorizes the receiving party to perform itself and further provided such other person agrees in writing (a copy of which writing will be provided to the furnishing party at its request) to the same conditions respecting use of Information contained in this clause and to any other reasonable conditions requested by the furnishing party. 17. INFRINGEMENT In the event of any claim, action, proceeding or suit by a third party against Vendor alleging an infringement of any United States patent, United States copyright, or United States trademark, or a violation in the United States of any trade secret or proprietary rights be reason of the use, in accordance with Lucent's or other applicable specifications, of any Product, Licensed Material (software or related documentation), if any, or other item furnished by Lucent to Vendor under this Agreement, Lucent, at its expense, will defend Vendor, subject to the conditions and exceptions stated below. Lucent will reimburse Vendor for any cost, expense or attorney's fees, incurred by Lucent's written request for authorization, and will indemnify Vendor against any liability assessed against Vendor by final judgment on account of such infringement or violation arising out of such use. If Vendor's or Bell Atlantic's use shall be enjoined or in Lucent's opinion is likely to be enjoined, Lucent will, at its expense and at its option, either (a) replace the affected Product, Licensed Material or other item furnished pursuant to this Agreement with a suitable suBell Atlanticitute free of any infringement or violation, (b) modify it so that it will be free of the infringement or violation, or (c) procure for Vendor or Bell Atlantic a license or other right to use it. If none of the foregoing options is practical, Lucent will accept the return of the enjoined Product, Licensed Material or other item and refund to Vendor any amounts paid to Lucent less a reasonable charge for any actual period of use by Vendor. Vendor shall give Lucent prompt written notice of all such claims, actions, proceedings or suits alleging infringement or violation and Lucent shall have full and complete authority to assume the sole defense thereof; including appeals, and to settle same. Vendor shall, upon Lucent's request and at Lucent's expense, furnish all information and assistance available to Vendor and cooperate in every reasonable way to facilitate the defense and/or settlement of any such claim, action, proceeding or suit. Lucent and Six R Proprietary 13 Page 13 No undertaking of Lucent under this section shall extend to any such alleged infringement or violation to the extent that it: (a) arises from adherence to design modifications, specifications, drawings, or written instructions which Lucent is directed by Vendor or Bell Atlantic to follow, but only if such alleged infringement or violation does not reside in corresponding commercial Product or Licensed Material of Lucent's design or selection; or (b) arises from adherence to instructions to apply Vendor's or Bell Atlantic's trademark, trade name, or other company identification; or (c) resides in a Product or Licensed Material which is not of Lucent's origin and which is furnished by Vendor or Bell Atlantic to Lucent for use under this Agreement; or (d) relates to use of Products, Licensed Materials or other items provided by Lucent in combinations with other Products, Licensed Materials or other items, furnished either by Lucent or others, which combination was not installed, recommended or otherwise approved by Lucent. In the foregoing cases (a) through (d), Vendor will defend and save Lucent harmless, subject to the same terms and conditions and exceptions stated above with respect to Lucent's rights and obligations under this clause. [* Confidential treatment will be requested] Lucent and Six R Proprietary 14 Page 14 * Confidential treatment will be requested Lucent and Six R Proprietary 15 Page 15 * Confidential treatment requested 20. TRADEMARKS Vendor will not, without Lucent's express written permission, use in marketing, advertising, publicity, or otherwise any trade name, trademark, trade device, service mark, symbol, code, or specification or any abbreviation, contraction, or simulation thereof ("mark") of the Lucent companies nor shall Vendor claim any ownership therein. Vendor shall not remove, deface, alter or otherwise obscure any mark of the Lucent companies which is on a Product sold under this Agreement nor shall Vendor place any mark of any other company on any such Product. Any such usage shall inure to the benefit of the Lucent company mark owner. As used in this paragraph the term "Lucent" means Lucent Technologies, Bell Labs and its Affiliated companies. 21. LEGISLATION AND GOVERNMENTAL REGULATIONS Vendor shall at all times comply with all applicable requirements of federal, state and local laws, ordinances, administrative rules and regulations. Vendor shall contractually require its subcontractors, distributors and agents to comply with all such legal requirements as well, and Vendor shall indemnify, defend and hold harmless Lucent for any damages, losses, costs, or penalties incurred by Lucent by virtue of such noncompliance by Vendor or its subcontractors, distributors, or agents. If requested by Lucent, Vendor shall advise Lucent in writing of the identity and addresses of its subcontractors, distributors and agents in connection with the Products. 22. TERMINATION OF ORDERS Vendor may, upon notice to Lucent, and upon terms that will compensate Lucent from all loss, terminate any order or portion thereof, issue a "hold" on an order, or suspend performance under the Agreement in whole or in part, except with respect to Products which have already been shipped or services which have already been performed. Vendor's liability to Lucent for any such termination, "hold" or suspension Lucent and Six R Proprietary 16 Page 16 shall include, but not be limited to, the price of all services performed and of Products delivered or held for disposition, loss of profits, incurred costs (including charges made by Lucent suppliers), work in progress, and an allocation of general and administrative expenses. 23. TERMINATION OF AGREEMENT (a) Either party may terminate this Agreement without cause or reason whatsoever upon sixty (60) days prior written notice to the other setting forth the effective date of such termination. The termination of this Agreement shall not affect the obligations of the parties with respect to any orders previously entered into hereunder, and the terms and conditions of this Agreement shall continue to apply to such orders as if this Agreement had not been terminated. Upon termination of this Agreement without cause pursuant to this paragraph neither party shall be liable to the other, either for compensation or for damages of any kind or character whatsoever, whether on account of the loss by Lucent or Vendor of present or prospective profits on sales or anticipated sales, or expenditures, investments, or commitments made in connection therewith or in connection with the establishment, development or maintenance or Vendor's business, or on account of any other cause or thing whatsoever, provided that termination shall not prejudice or otherwise affect the rights or liability of the parties with respect to Products theretofore sold hereunder, or any indebtedness then owing by either party to the other. (b) Either party may terminate this Agreement, immediately, upon twenty-four (24) hours written notice; (i) if the other party files a petition in bankruptcy, or is adjudicated bankrupt, or makes a general assignment for the benefit of creditors, or becomes insolvent, or is otherwise unable to meet its business obligations for a period of six (6) months. Such party shall promptly and fully inform the other party of the imminence or occurrence of any event described in this subparagraph; or (ii) in the event of change in the controlling ownership of Vendor or in the event of a sale or assumption of all or substantially all of the assets of Vendor on or after the effective date of this Agreement, if such change, sale or assumption is unacceptable by Lucent. (iii)in the event the agreement between Vendor and Bell Atlantic terminates in which event Vendor shall notify Lucent of said termination immediately and in writing. (c) Either party may terminate this Agreement if the other party breaches any of the material terms and conditions of this Agreement and the other party fails to cure such breach within thirty (30) days after written notice thereof from the non-breaching party. (d) Notwithstanding any other terms and provisions of this Agreement or other arrangements agreed to by the parties, termination of this Agreement shall automatically accelerate the due date of all invoices for Products such that they shall become immediately due and payable on the effective date of termination. Lucent and Six R Proprietary 17 Page 17 (e) Upon notice of termination, Lucent shall be entitled to reject all or a part of any orders received from Vendor after notice but prior to the effective date of termination. Notwithstanding any credit terms made available to Vendor prior to that time, any Product shipped after notice of termination and prior to effective date of termination shall be paid for by certified or cashier's check prior to shipment. Upon termination or non-renewal of this Agreement, Vendor shall immediately: (1) Discontinue any and all use of marks (as defined in the Paragraph TRADEMARKS) except to identify the Products, including but not limited to such use in advertising or business material of Vendor; (2) Remove and return to Lucent or destroy at Lucent's request, any and all promotional material supplied without charge by Lucent; (3) Return, upon request, all Lucent Information as described in the paragraph Use of Information or provided under the Nondisclosure Agreement between the parties dated July 9, 1996, except that which Lucent agrees is necessary to operate and maintain previously furnished Products; (4) Cease holding itself out, in any other manner, as a Vendor capable of purchasing or obtaining Products for or on behalf of Bell Atlantic directly from Lucent; and (5) Notify Bell Atlantic and others who may, at the initiation of Vendor, identify, list or publish Vendor's name as a Vendor capable of purchasing or obtaining Products for or on behalf of Bell Atlantic (including but not limited to publishers of other businesses directories) to discontinue such listings. 24. SURVIVAL OF OBLIGATIONS The respective obligations of Vendor and Lucent under this Agreement which by their nature would continue beyond the termination, cancellation or expiration hereof shall survive such termination, cancellation or expiration. 25. FORCE MAJEURE Except with respect to Vendor's obligation to make timely payments, neither party shall be liable to the other party for any loss, damage, delay or failure of performance resulting directly or indirectly from any cause which is beyond its reasonable control, including, but not limited to the elements; extraordinary traffic conditions, riots; civil disturbances, wars; states of belligerency or acts of the public enemy; labor disputes; strikes, work stoppages, inability to secure raw materials, product or transportation facilities; or the laws, regulations, acts or failure to act of any governmental authority, including but not limited to denial of a U.S. Export License, hereinafter referred to as "Force Majeure". A Party shall promptly notify the other party of the occurrence of a Force Majeure event and the notifying party shall be excused from any further performance of these obligations affected by the Force Majeure Event for as long as such Force Majeure Event continues and such party uses and continues to use its best efforts to recommence performance. Failure of either party to perform under this Agreement because of the endurance of a Force Majeure event for more than three (3) months will represent grounds by either party for its Lucent and Six R Proprietary 18 Page 18 termination of the portion of this Agreement affected by the Force Majeure Event. 19 Page 19 26. ASSIGNMENT Except as provided in this clause, neither party shall assign this Agreement or any right or interest under this Agreement, nor delegate any work or obligation to be performed under this Agreement, (an "Assignment") without the other party's prior written consent. Nothing shall preclude a party from employing a subcontractor in carrying out its obligations under this Agreement, but a party's use of such subcontractor shall not release the party from its obligations under this Agreement. An attempted assignment or delegation in contravention of this clause shall be void and ineffective. Lucent has the sole right to assign this Agreement and to assign its rights and delegate its duties under this Agreement, in whole or in part, at anytime and without Vendor's consent, to any corporate parent or to any present Affiliate or to any combination of the foregoing, provided that Lucent give prompt written notice of such assignment to Vendor. 27. SEVERABILITY If any provision in this Agreement, or any portion thereof is subsequently held to be invalid or unenforceable under any applicable statute or rule of law, then that provision or portion notwithstanding, this Agreement shall remain in full force and effect and such provision or portion shall be deemed omitted and this Agreement shall be construed as if such invalid or unenforceable provision or portion had not been contained herein. 28. RELEASE VOID Neither party shall require release or waivers of any personal rights from representatives of the other in connection with visits to its premises and both parties agree that no such releases or waivers shall be pleaded by them in any action or proceeding. 29. NON-WAIVER No waiver of the terms and conditions of this Agreement, or the failure of either party to strictly enforce any term or condition of this Agreement on one or more occasions shall be construed as a waiver of the same of any other term or condition of this Agreement on any other occasion. 30. CHOICE OF LAW The construction, interpretation and performance of this Agreement shall be governed by the laws of the State of New York, except for its conflicts of law provisions. 31. TECHNOLOGY OWNERSHIP Lucent retains sole ownership of the design, assembly, testing rights and information, regardless of Vendor's contribution to the value of those rights, design and information. Lucent's sale of the Products to Vendor; Lucent's grant to Vendor of the right to assemble, package, and sell the Product, conveys no ownership rights whatsoever in any Product or the Product. Lucent and Six R Proprietary 20 Page 20 32. NOTICES All notices, requests, approvals and other communications ("Notices") required or allowed under this Agreement shall be in writing and addressed as set forth below or to such other person and/or address as either party may designate by written Notice pursuant thereto. Such Notices shall be deemed to have been given when received. Notices may be delivered by hand or sent by prepaid certified or registered airmail, confirmed facsimile or electronic mail, provided a copy is also forwarded by prepaid registered airmail. Lucent Technologies, Inc. World Wide Technology Contract Management Director Director - Business Operations 5 Penn Plaza, 10th Floor Julene Tojd New York, NY 10001-1803 127 Weldon Parkway St. Louis, MO 63043 VENDOR: 33. PURCHASE MONEY SECURITY INTEREST (a) Subject to Lucent's prior written notice hereunder to Vendor of Lucent's intent to file purchase money security documents as set forth in the following and Vendor's failure to resolve any default(s) leading to such action within ten (10) days of Lucent's notice, Lucent reserves and Vendor agrees that Lucent shall have a purchase money security interest in all Products heretofore sold or hereafter sold to Vendor by Lucent under this Agreement, until any and all payments and charges due Lucent under this Agreement including, without limitation, shipping and installation charges, are paid in full. Lucent shall have the right, at any time during the Term and without notice to Vendor, to file in any state or local jurisdiction such financing statements (e.g., UCC1 financing statements) as Lucent deems necessary to perfect its purchase money security interest hereunder. Vendor agrees to execute and deliver to Lucent all such financing statements and other documents as Lucent deems necessary to perfect its purchase money security interest hereunder. Notwithstanding the foregoing obligation, Vendor hereby irrevocably appoints Lucent as its attorney-in-fact for purposes of executing and filing such financing statements and such other documents prepared by Lucent or its designated agent for purposes of perfecting Lucent's security interest hereunder. Vendor also agrees that this Agreement may be filed by Lucent in any state or local jurisdiction as a financing statement (or as other evidence of the Lucent's purchase money security interest). (b) In addition to any other remedy available to Lucent as provided herein, by common law and by statute, Lucent may exercise its right to reclaim all Products sold to Vendor pursuant to U.C.C. Section 2-702 or such other applicable provision as if may exist from state to state, upon discovery of Vendor's insolvency, provided Lucent demands in writing reclamation of such goods before ten (10) days after receipt of such goods by Vendor, or if such 10 day period expires after the Lucent and Six R Proprietary 21 Page 21 commencement of a bankruptcy case, before twenty (20) days after receipt of such goods by the Vendor. 34. SETTLEMENT OF DISPUTES (a) The following procedures shall apply after the Effective Date to any dispute or disagreement between the Parties arising out of this Agreement, provided, however, that this Section shall not apply to indemnification claims arising under this Agreement nor to actions for injunctive relief by one party against the other. (b) First: (1) either Party may give written notification of such dispute or disagreement to the other party, if the other Party is Vendor, to the President and CEO of Vendor, or if the other Party is Lucent, to the Vice-President Sales, Bell Atlantic Region ("RVP") (together being the Senior Executive Officers or "SEOs") and (2) the SEOs shall communicate with each other promptly with a view to resolving such dispute or disagreement within sixty (60) days of commencing their negotiations (or such extended period as the SEOs agree is appropriate in any case). (c) The giving of any notice regarding any dispute or disagreement hereunder shall toll the running of all applicable statutes of limitation until the later of (a) ninety (90) days following the giving of such notice or (b) thirty (30) days following the termination of discussions between the SEOs. (d) Second, if at the end of the sixty (60) day period contemplated hereunder (or if later the termination of discussions between the SEOs), such dispute or disagreement remains unresolved, either Party may request that such dispute or disagreement be the subject of non-binding mediation. Following such request, the SEOs shall endeavor in good faith promptly to identify a single person (who shall be a person with experience and good reputation) who shall assist the SEOs in discussing such dispute or disagreement and in attempting to reach a mutually acceptable business resolution. Such mediation process shall continue for at least sixty (60) days following the request therefor (or such extended or shorter period as the SEOs agree is appropriate). All applicable statutes of limitation shall be tolled during the period of mediation. (e) Third, if at the end of the sixty (60) day period contemplated by hereunder (3.) (or the termination of non-binding mediation), such dispute or disagreement remains unresolved, either Party (the "complainant") may commence an action in court of competent jurisdiction within the United States of America. 35. GRANT OF LICENSE (a) The license for Licensed Materials with "Tear-Me" or "Tear-Open" licenses shall be as provided in those licenses and shall be provided by Vendor in their unopened original package to the end-user. Lucent and Six R Proprietary 22 Page 22 (b) For all other Licensed Materials which are provided to Vendor for its own use, Lucent retains title to the Licensed Materials and grants Vendor a personal, non-transferable (except as provided in this clause LICENSE FOR LICENSED MATERIALS (c) below) and non-exclusive license to use Licensed Materials in the Territory on a single Designated Processor for its own business operations. The Licensed Materials shall not be copied in whole or in part except as necessary for authorized use and each copy shall bear the same copyright and proprietary marks as the original. Vendor shall not reverse engineer, decompile or disassemble any Software. (c) Lucent grants to Vendor the right to sublicense Licensed Materials to Bell Atlantic only, provided Vendor obtains a written license agreement from its sublicensee which provides that it accepts the license under the terms provided in Bell Atlantic contract number BCO3344 between Bell Atlantic and Lucent or contract number x-105-D, also between Bell Atlantic and Lucent. 36. PARAGRAPH HEADINGS The paragraph headings contained in this agreement are for the convenience only and are not intended to affect the meaning or interpretation of this Agreement. * Confidential treatment will be requested 38. ENTIRE AGREEMENT (a) The terms and conditions contained in this Agreement supersede all prior oral or written understandings between the parties and shall constitute the entire Agreement between them concerning the subject matter of this Agreement and shall not be contradicted, explained or supplemented by any course of dealing between Lucent or any of its Affiliates and Vendor or any of its Affiliates. Lucent's employees, statements and its advertisements or descriptions other than its published specifications do not constitute warranties or other contractual obligations and shall not be relied upon by Vendor as such. There are no understandings or representations, express or implied, not expressly set forth in this Agreement. No terms or conditions contained in any order or other form originated by Vendor shall apply except for quantity, description, and delivery schedule terms. Notwithstanding anything herein to the contrary, the parties intend that the Nondisclosure Agreement entered into by the parties dated July 9, 1996 shall remain in full force and effect; that the Value Added Reseller Agreement between the parties dated June 1, 1997 shall also remain in full force and effect; and that any agreement between the parties not otherwise identified herein not related to the Vendor status shall continue unaffected by this Agreement. (b) This Agreement shall not be modified or amended except by a writing signed by the parties to be charged, and no changes or additions to this Agreement shall be binding upon Lucent unless signed by an authorized representative of Lucent. (c) Both parties acknowledge they are sophisticated business entities with access to legal and financial Lucent and Six R Proprietary 23 Page 23 counsel of their choosing and that each has had the opportunity to comment upon and seek modifications to this Agreement. Therefore the rule of law of construction of ambiguities against the drafter shall not apply. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives. LUCENT TECHNOLOGIES, INC. By: /s/ Sarah Davis Brazier By: /s/ Mark J. Catalano --------------------------- ------------------------------------ Name: Sarah Davis Brazier Name: Mark J. Catalano --------------------------- ------------------------------------ Title: Associate Vice President Title: Director - Telco Business Unit -------------------------- ----------------------------------- Date: 12/18/98 Date: 12/18/98 -------------------------- ----------------------------------- Lucent and Six R Proprietary 24 Page 24 * Confidential treatment requested 25 * Confidential treatment will be requested 26 * Confidential treatment will be requested 27 Amendment No. 1 AMENDMENT NO. 1 TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGIES, INC. AND LUCENT TECHNOLOGIES, INC. Lucent Technologies, Inc. and World Wide Technologies Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 as follows: * Confidential treatment will be requested All other terms and conditions are reaffirmed and remain unchanged. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGIES INC. By: /s/ A. W. Villano By: /s/ Mark Catalano ---------------------------- ------------------------------------ Typed Name: A. W. Villano Typed Name: Mark J. Catalano ------------------ -------------------------- Title: Regional Contract Title: Director Business Operations ---------------------- ------------------------------- Management Director ---------------------- Date: March 17, 1999 Date: 4/1/99 ---------------------- ------------------------------ 28 3/18/99 * Confidential treatment will be requested 29 AMENDMENT NO. 2 TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGY INC. AND LUCENT TECHNOLOGIES INC. Lucent Technologies Inc. and World Wide Technology Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 and as amended: [* Confidential treatment will be requested] 2. To correct a numbering reference error, Paragraph 13 is deleted in its entirety and replaced by the following: 13. INVOICING [* Confidential treatment will be requested] (a) Invoices for Products will be sent upon shipment, or as soon thereafter as practical. Lucent may make partial shipments of Vendor's orders. Such partial shipments shall be separately invoiced. * Confidential treatment will be requested 30 (d) Vendor shall be liable for and shall reimburse Lucent for all taxes and related charges (including any interest and penalties), however designated (excluding taxes on Lucent's net income) imposed upon or arising from the provision of or the transfer, sale, license, or use of Products, or other items provided by Lucent. Taxes reimbursable under this clause shall be separately listed on the invoice. (e) Lucent shall not collect the otherwise applicable tax if Vendor's purchase is exempt from Lucent's collection of such tax and a valid tax exemption certificate is furnished by Vendor to Lucent. * Confidential treatment will be requested All other terms and conditions are reaffirmed and remain unchanged. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY INC. /s/ A. W. Villano /s/ Mark J. Catalano - -------------------------------------- ------------------------------------ Signature Signature A. W. Villano Mark J. Catalano - -------------------------------------- ------------------------------------ Typed Name Typed Name Regional Contract Management Director Director - -------------------------------------- ------------------------------------ Title Title 3/26/99 4-1-99 - -------------------------------------- ------------------------------------ Date Date 31 Page 1 of 1 * Confidential treatment will be requested 32 AMENDMENT NO. 3 TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGY INC. AND LUCENT TECHNOLOGIES INC. Lucent Technologies Inc. and World Wide Technology Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 and as amended: *Confidential treatment will be requested. *Confidential treatment will be requested. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY INC. /s/ A. W. Villano /s/ Mark J. Catalano - ------------------------------------ ------------------------------------ Signature Signature A. W. Villano Mark J. Catalano - ------------------------------------ ------------------------------------ Typed Name Typed Name Regional Contract Management Director Director - ------------------------------------ ------------------------------------ Title Title 3/26/99 4-1-99 - ------------------------------------ ------------------------------------ Date Date 33 * Confidential treatment will be requested Page 1 of 1 34 AMENDMENT NO. 4 TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGY INC. AND LUCENT TECHNOLOGIES INC. Lucent Technologies Inc. and World Wide Technologies Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 and as amended: * Confidential treatment will be requested All other terms and conditions are reaffirmed and remain unchanged. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY INC. /s/ A. W. Villano /s/ Mark J. Catalano - ------------------------------------ ------------------------------------ Signature Signature A. W. Villano Mark J. Catalano - ------------------------------------ ------------------------------------ Typed Name Typed Name Regional Contract Management Director Director - ------------------------------------ ------------------------------------ Title Title 3/26/99 4-1-99 - ------------------------------------ ------------------------------------ Date Date 35 * Confidential treatment will be requested 36 AMENDMENT NO. 5 TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGY INC. AND LUCENT TECHNOLOGIES INC. Lucent Technologies Inc. and World Wide Technologies Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 and as amended: * Confidential treatment will be requested All other terms and conditions are reaffirmed and remain unchanged. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY INC. /s/ A. W. Villano /s/ Mark J. Catalano - ------------------------------------ ------------------------------------ Signature Signature A. W. Villano Mark J. Catalano - ------------------------------------ ------------------------------------ Typed Name Typed Name Regional Contract Management Director Director - ------------------------------------ ------------------------------------ Title Title 3/26/99 4-1-99 - ------------------------------------ ------------------------------------ Date Date 37 * Confidential treatment will be requested Page 1 of 1 38 Amendment No. 6 AMENDMENT NO. 6 TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGY INC. AND LUCENT TECHNOLOGIES INC. Lucent Technologies Inc. and World Wide Technologies Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 and as amended: * Confidential treatment will be requested All other terms and conditions are reaffirmed and remain unchanged. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY INC. /s/ A. W. Villano /s/ Mark J. Catalano - ------------------------------------ ------------------------------------ Signature Signature A. W. Villano Mark J. Catalano - ------------------------------------ ------------------------------------ Typed Name Typed Name Regional Contract Management Director Director - ------------------------------------ ------------------------------------ Title Title 6/28/99 7-6-99 - ------------------------------------ ------------------------------------ Date Date 39 * Confidential treatment will be requested 40 Amendment No. 7 AMENDMENT NO. 7 TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGY INC. AND LUCENT TECHNOLOGIES INC. Lucent Technologies Inc. and World Wide Technologies Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 and as amended: * Confidential treatment will be requested All other terms and conditions are reaffirmed and remain unchanged. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY INC. /s/ A. W. Villano /s/ Mark J. Catalano - ------------------------------------ ------------------------------------ Signature Signature A. W. Villano Mark J. Catalano - ------------------------------------ ------------------------------------ Typed Name Typed Name Regional Contract Management Director Director - ------------------------------------ ------------------------------------ Title Title 7/13/99 7/14/99 - ------------------------------------ ------------------------------------ Date Date 41 * Confidential treatment will be requested 42 Amendment No. 8 AMENDMENT NO. 8 TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGY INC. AND LUCENT TECHNOLOGIES INC. Lucent Technologies Inc. and World Wide Technologies Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 and as amended: * Confidential treatment will be requested All other terms and conditions are reaffirmed and remain unchanged. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY INC. /s/ A. W. Villano /s/ Mark J. Catalano - ------------------------------------ ------------------------------------ Signature Signature A. W. Villano Mark J. Catalano - ------------------------------------ ------------------------------------ Typed Name Typed Name Regional Contract Management Director Director - ------------------------------------ ------------------------------------ Title Title 6/28/99 7-6-99 - ------------------------------------ ------------------------------------ Date Date 43 * Confidential treatment will be requested 44 Amendment No. 9 AMENDMENT NO. 9 TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGY INC. AND LUCENT TECHNOLOGIES INC. Lucent Technologies Inc. and World Wide Technologies Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 and as amended: * Confidential treatment will be requested All other terms and conditions are reaffirmed and remain unchanged. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY INC. /s/ A. W. Villano /s/ Mark J. Catalano - ------------------------------------ ------------------------------------ Signature Signature A. W. Villano Mark J. Catalano - ------------------------------------ ------------------------------------ Typed Name Typed Name Regional Contract Management Director Director - ------------------------------------ ------------------------------------ Title Title Sept.1, 1999 - ------------------------------------ ------------------------------------ Date Date 45 *Confidential treatment will be requested. 46 Amendment No. 9A AMENDMENT NO. 9A TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGY INC. AND LUCENT TECHNOLOGIES INC. Lucent Technologies Inc. and World Wide Technologies Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 and as amended: *Confidential treatment will be requested. All other terms and conditions are reaffirmed and remain unchanged. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY INC. /s/ A. W. Villano - ------------------------------------ ------------------------------------ Signature Signature A. W. Villano - ------------------------------------ ------------------------------------ Typed Name Typed Name Regional Contract Management Director Director - ------------------------------------ ------------------------------------ Title Title 9/22/99 - ------------------------------------ ------------------------------------ Date Date 47 * Confidential treatment will be requested 48 Amendment No. 10 AMENDMENT NO. 10 TO THE RESELLER AGREEMENT BETWEEN WORLD WIDE TECHNOLOGY INC. AND LUCENT TECHNOLOGIES INC. Lucent Technologies Inc. and World Wide Technologies Inc. hereby agree to amend the Product Resale Agreement dated December 18, 1998 and as amended: 5. TERM The term of this Agreement will be extended for one (1) year through December 18, 2000. All other terms and conditions are reaffirmed and remain unchanged. In WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the date indicated. LUCENT TECHNOLOGIES INC. WORLD WIDE TECHNOLOGY INC. /s/ J. Picataggio /s/ Mark J. Catalano - ------------------------------------ ------------------------------------ Signature Signature J. Picataggio Mark J. Catalano - ------------------------------------ ------------------------------------ Typed Name Typed Name Contract Manager - ------------------------------------ ------------------------------------ Title Title 12/15/99 12/22/99 - ------------------------------------ ------------------------------------ EX-10.18 17 TOTAL SOLUTION PROVIDER AGREEMENT 1 Ex.10.18 FUJITSU NETWORK COMMUNICATIONS, INC. TOTAL SOLUTION PROVIDER AGREEMENT THIS TOTAL SOLUTION PROVIDER AGREEMENT (this "Agreement") is made as of the 15 day of September, 1997 (the "Effective Date"), between Fujitsu Network Communications, Inc., a California corporation with its principal place of business at 2801 Telecom Parkway, Richardson, Texas 75082 ("FNC"), and WorldWide Technologies, Inc., a Missouri corporation with its principal place of business at 127 E. Weldon Parkway, St. Louis, Missouri 63043-3101 ("WWT"). RECITALS A. WHEREAS, FNC and its affiliates and related entities are engaged in the business of manufacturing, selling and installing certain electronic and telecommunications software ("Software") and hardware ("Hardware") [* Confidential treatment will be requested] (collectively, the "FNC Products"). This Agreement pertains only to "FNC Products" [* Confidential treatment will be requested] and not to any other products manufactured, sold or installed by Company. B. WHEREAS, WWT is an established system integration and value-added reseller of telecommunications equipment. C. WHEREAS, FNC and WWT desire that FNC appoint WWT as an authorized value-added reseller and total solution provider for the FNC Products, with respect to the territory described in Exhibit B attached hereto (the "Territory"), under the terms and conditions set forth in this Agreement. NOW, THEREFORE, FNC and WWT agree as follows: 1. Appointment. (a) Non-Exclusive Appointment. Subject to the terms and conditions of this Agreement, FNC hereby appoints WWT, and WWT hereby accepts such appointment from FNC, as a non-exclusive value-added reseller and total solution provider for the FNC Products with marketing and service responsibility for end-user customers located in the Territory. WWT may not, directly or indirectly, market, distribute, sell or otherwise provide any FNC Product to any third party located outside the Territory. (b) Limitation of Appointment. The parties hereby acknowledge that it may be desirable for FNC to maintain direct business relationship with certain customers. Accordingly, the parties agree that notwithstanding WWT's non-exclusive appointment, FNC may from time to time, by written notice to WWT, designate any of FNC's existing or prospective customers as a direct account ("Direct Account"), and each such Direct Account shall be deemed outside of the Territory. Accordingly, WWT agrees that it will not, directly or indirectly, solicit orders of FNC Products from any Direct Accounts. (c) FNC's Reserved Rights. FNC reserves the rights from time to time, in its sole discretion, with or without notice to WWT and without liability to WWT, to (i) change the number of FNC distributors, value-added resellers, and total solution providers; (ii) alter, modify or improve the FNC Products; (iii) change, or to add to or delete from the list of, FNC Products; (iv) change or terminate the level or type of service or support that FNC makes available; (v) distribute FNC Products using FNC's own personnel or independent sales representatives, distributors, dealers, resellers or original equipment manufacturers; and (vi) add to or delete from the Territory. *Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 2. Obligations of WWT. (a) Marketing Efforts and Restrictions. During the term of this Agreement, WWT will use its best efforts to sell, advertise and promote the sale and use of FNC Products throughout the Territory, in accordance with the terms and policies of FNC as announced from time to time. WWT will sell FNC Products with all packaging, warranties, disclaimers and license agreements intact as shipped from FNC and will instruct customers as to the terms of such documentation as applicable to FNC. WWT will make no representations about FNC Products, except to the extent such representations either appear in literature approved or prepared by FNC, or are provided directly by FNC. (b) Unauthorized Use of FNC Products. WWT is authorized to sell FNC Products only to end user customers. WWT will not distribute FNC Products to any person or entity that WWT knows or suspects will resell such FNC Products to others. WWT will distribute FNC Products in a manner that insures that WWT maintains direct, in-person contact with its customers so that adequate technical assistance, training and support can be provided. WWT will not alter, reverse-engineer, decompile or disassemble any FNC Products. Further, WWT will not make any modifications to the design specifications of any FNC Products nor remove or alter or translate any writings or etchings contained on FNC Products or the documentation delivered to WWT as part of FNC Products without the prior written consent of FNC. Any such modification or translations will remain the exclusive property of FNC; provided that in the event a court of competent jurisdiction should deem such modifications or translations to be the property of WWT, WWT will grant and hereby does grant to FNC a royalty-free, paid-up, worldwide, perpetual and non-exclusive license to make, sell and/or use all such modifications or translations. (c) WWT Personnel. WWT will train, employ and maintain a sufficient number of experienced, competent and capable technical and sales personnel having the knowledge and training necessary to (i) inform customers properly concerning the features and capabilities of FNC Products and, if necessary, competitive products; (ii) service and support FNC Products in accordance with WWT's obligations under this Agreement; and (iii) otherwise carry out the obligations and responsibilities of WWT under this Agreement. (d) Value to be Added/Additional Obligations. In addition, during the term of this Agreement, WWT will, at its own expense, provide the following added value: (i) Inventory. WWT will provide forecasting for and material flow management of FNC Products and will order and maintain stocks of FNC Products and spare and replacement parts necessary to meet the reasonable needs of customers in accordance with such forecasting and stocking guidelines as may be provided by FNC from time to time. (ii) Warehousing Services. WWT will provide warehousing facilities sufficient to serve adequately the needs of its customers on a timely basis. (iii) Staging and Kitting. WWT will provide all staging and kitting necessary for FNC Products sold to customers of WWT. Staging and kitting for purposes of this Agreement means warehousing, staging, packaging FNC Products as a complete kit as ordered by customers, and shipping the kits to customers. (iv) System Assembly. WWT will provide all system assembly services necessary for FNC Products sold to customers of WWT. System and assembly services for purposes of this Agreement include assembly of component parts into a functioning system. (v) Engineer, Furnish and Install. WWT will provide complete engineer, furnish and installation assistance for end users with regard to the FNC Products, including but 2 3 not limited to site surveys, detail engineering, bills of materials, installation and specifications, quality audits, and electronic records updates. (vi) FNC Product Improvement Programs. WWT will perform FNC Product improvement programs, including any recall of FNC Products by FNC, announced by FNC within the time limit reasonably specified in such programs. FNC will be responsible for the implementation and expenses related to any major field retrofit program resulting from a manufacturing defect or no cost upgrade negotiated by FNC with the end user customer. (vii) Quality and Workmanship Requirements. WWT will comply with all FNC specifications and requirements for quality and workmanship, including but not limited to storage and handling, packaging, shipping, and quality. (viii) FNC Product Warranty Services. WWT will be responsible for all product warranty services required (including reimbursing FNC or any other distributor of FNC which may perform the warranty service on behalf of WWT) during the applicable warranty period on FNC Products sold by WWT, all in accordance with the warranty policy of FNC for such FNC Products. (ix) Information. WWT will inform itself about the performance of FNC Products used in the Territory and will, regardless of expiration date of any applicable warranty, promptly report to FNC all accidents and/or incidents involving FNC Products in the Territory which result in personal injury or property damage. (e) WWT Financial Condition. WWT will maintain and employ in connection with WWT's business under this Agreement such working capital and net worth as may be required in FNC's reasonable opinion to enable WWT to carry out and perform all of WWT's obligations and responsibilities under this Agreement. From time to time, on reasonable notice by FNC, WWT will furnish such financial reports and other financial data as FNC may reasonably request as necessary to determine WWT's financial condition. (f) WWT Covenants. WWT will: (i) conduct business in a manner that reflects favorably at all times on FNC Products and the good name, good will and reputation of FNC; (ii) avoid deceptive, misleading or unethical practices that are or might be detrimental to FNC, FNC Products or the public; (iii) make no false or misleading representations with regard to FNC or FNC Products; (iv) not publish or employ, or cooperate in the publication or employment of, any misleading or deceptive advertising material with regard to FNC or FNC Products; (v) make no representations, warranties or guarantees to customers or to the trade with respect to the specifications, features or capabilities of FNC Products that are inconsistent with the literature distributed by FNC; and (vi) not enter into any contract or engage in any practice detrimental to the interests of FNC in FNC Products. (g) Compliance with Law. WWT will comply with all applicable international, national, state, regional and local laws and regulations in performing its duties hereunder and in any of its dealings with respect to FNC Products. Without limiting the foregoing, WWT will be solely responsible for securing any and all necessary permits, licenses and other governmental approvals for WWT's promotion, marketing, sales and exportation of FNC Products. (h) Costs and Expenses. Except as expressly provided herein or agreed to in writing by FNC and WWT, WWT will pay all costs and expenses incurred in the performance of WWT's obligations under this Agreement. 3. Obligations of FNC. (a) Sale of FNC Products. FNC will use reasonable efforts to sell and ship the FNC Products ordered by WWT in the quantities and at the times requested by WWT in accordance 3 4 with the terms and conditions of this Agreement. FNC will make available to WWT at reasonable prices, all packaging and crating materials required for the shipment of FNC Products by WWT. [* Confidential treatment will be requested] Packaging provided by FNC will not include FNC proprietary labels. (b) Marketing Materials. FNC will provide promotional, sales and marketing materials relating to FNC Products purchased by WWT hereunder which FNC provides to other resellers or distributors and which WWT may reasonably require to assist in marketing the FNC Products. (c) Spare and Replacement Parts. FNC will use reasonable efforts to make available for purchase by WWT such spare and replacement parts as WWT may require to adequately repair, maintain or otherwise service the FNC Products. (d) Support and Training. FNC will provide reasonable advisory services, quality assurance services, and training to WWT to assist WWT in the proper operation of the FNC Products, including technical advice on the makeup and inspection of the FNC Products and information concerning the functioning and operation of the FNC Products. FNC may from time to time, at its discretion, require WWT to pay reasonable charges to FNC for support and training. FNC will provide additional technical and field support when requested in writing in accordance with FNC standard offerings. (e) Repurchase of Inventory. FNC will make arrangements to repurchase any inventory items from WWT that become obsolete as a result of new product announcements by FNC. FNC and WWT will meet on a monthly basis to review stocking levels, slow moving inventory items, and non-moving inventory items during the first twelve months of the initial term of the Agreement. Inventory adjustments, including potential repurchase of stock, will be mutually agreed upon at these meetings. All of the foregoing notwithstanding however, excluding obsolete inventory items, repurchase will be limited to not more than 20% of the previous six (6) months' actual purchases by WWT. In an effort to eliminate the inventory of obsolete items, FNC will notify WWT at least thirty (30) days prior to the official announcement of new products that would render part of WWT's inventory obsolete. In that thirty (30) day period, WWT will use its best efforts to sell the affected inventory. At the expiration of the thirty (30) day period, FNC will purchase from WWT such obsolete FNC Products then in WWT's inventory at the same prices paid by WWT to FNC therefor. 4. Inspections, Records and Reporting. (a) Reports. Within ten (10) days of the end of each month, WWT will provide to FNC a written or electronic report showing, for the time periods FNC reasonably requests, (i) WWT's shipments of FNC Products by customer and dollar volume and quantity, both in the aggregate and for such categories as FNC may designate from time to time, and (ii) WWT's current inventory levels of FNC Products, in the aggregate and by FNC Product. (b) Notification. WWT will notify FNC in writing of: (i) any claim or proceeding involving FNC Products within ten (10) days after WWT learns of such claim or proceeding; and (ii) all claimed or suspected product defects immediately. (c) Records. WWT will maintain, for at least two years after termination of this Agreement, its records, contracts and accounts relating to distribution of FNC Products and will permit examination thereof by authorized representatives of FNC at all reasonable times. 5. Orders and Order Procedures. (a) Purchase Orders. WWT shall purchase FNC Products through the issuance of purchase orders. Purchase orders to FNC may be issued by mail, fax, electronic data 4 5 interchange or other mutually agreeable method. All purchase orders submitted by WWT shall state the following information, as applicable: (i) description and model number of FNC Products, (ii) quantity or lots and assortments ordered, (iii) unit price and total price of FNC Products ordered, (iv) requested delivery dates and quantities or lots to be shipped on each such date, (v) locations to or at which FNC Products are to be delivered or installed, and (vi) reference to this Agreement and a statement that such orders are being placed pursuant to and are subject to the terms and conditions of this Agreement. (b) FNC Acceptance. All purchase orders for FNC Products by WWT shall be subject to acceptance in writing by FNC at its principal place of business and shall not be binding until the earlier of such acceptance or shipment, and, in the case of acceptance by shipment, only as to the portion of the order actually shipped. (c) Controlling Terms. The terms and conditions of this Agreement and of the applicable FNC invoice or confirmation will apply to each order accepted or shipped by FNC hereunder. The provisions of WWT's form of purchase order or other business forms will not apply to any order notwithstanding FNC's acknowledgment or acceptance of such order. (d) Cancellation. FNC reserves the right to cancel any orders placed by WWT and accepted by FNC as set forth above, or to refuse or delay shipment thereof, if WWT (i) fails to make any payment as provided in this Agreement or under the terms of payment set forth in any invoice or otherwise agreed to by FNC and WWT, (ii) fails to meet reasonable credit or financial requirements established by FNC, including any limitations on allowable credit, or (iii) otherwise fails to comply with the terms and conditions of this Agreement. FNC also reserves the right to discontinue the manufacture or distribution of any or all FNC Products at any time, and to cancel any orders for such discontinued FNC Products without liability of any kind to WWT or to any other person. No such cancellation, refusal or delay will be deemed a termination (unless FNC so advises WWT) or breach of this Agreement by FNC. [* Confidential treatment will be requested] 5 6 * Confidential treatment will be requested (f) Security Interest. WWT agrees that if and when FNC establishes a line of credit for WWT or permits WWT to obtain FNC Products on open account, WWT concurrently grants FNC a continuing security interest in the Collateral (as defined below) in order to secure payment of the Indebtedness (as defined below). "Collateral" means any FNC Products now or hereafter acquired by WWT, and "Indebtedness" means any and all debts, obligations or liabilities of WWT to FNC, now or hereafter existing, including without limitation, any late payment charges due from WWT hereunder and any expenses incurred by FNC in enforcing its rights hereunder (including without limitation attorneys' fees, court costs and the costs of retaking and holding the Collateral, preparing it for resale or other disposition, or selling or otherwise disposing of it). WWT acknowledges that this Section 6(f) constitutes a security agreement and hereby authorizes FNC to file any financing statement or other documents necessary to perfect FNC's security interest in the Collateral in any public office in any jurisdiction deemed necessary by FNC. WWT hereby grants FNC a limited power of attorney for the sole purpose of executing, in WWT's name, any financing statements and related documents deemed necessary by FNC to perfect the security interest granted herein. Upon any failure by WWT to pay all or any part of the Indebtedness when due, FNC, in addition to and not in lieu of any and all other rights and remedies available to it as a creditor of WWT, shall be entitled to all rights, powers and remedies available to a secured party under the Uniform Commercial Code with respect to the Collateral. In addition to the foregoing, WWT will pay FNC's attorneys fees incurred in enforcing this security interest. (h) No Setoff. WWT will not setoff or offset against FNC's invoices amounts that WWT claims are due to it. WWT will bring any claims or causes of action it may have in a separate action and waives any right it may have to offset, setoff or withhold payment for FNC Products delivered by FNC. 7. Shipment, Risk of Loss and Delivery. (a) Shipment. All FNC Products will be shipped by FNC F.O.B., FNC's point of shipment. Shipments will be made to WWT's identified warehouse facilities or freight forwarder, subject to approval in writing by FNC in advance of shipment. Unless specified in WWT's order, FNC will select the mode of shipment and the carrier. WWT will be responsible for and pay all packing, shipping, freight and insurance charges. 6 7 (b) Title and Risk of Loss. Title to the Hardware will pass to WWT upon FNC's receipt of the full purchase price from WWT for the FNC Product of which the Hardware is a component, and all risk of loss of or damage to FNC Products will pass to WWT upon delivery by FNC to the carrier, freight forwarder or WWT, whichever first occurs. (c) Partial Delivery. Unless WWT clearly advises FNC to the contrary in writing, FNC may make partial shipments on account of WWT's orders, to be separately invoiced and paid for when due. Delay in delivery of any installment shall not relieve WWT of its obligation to accept the remaining deliveries. (d) Delivery Schedule; Delays. FNC will use reasonable efforts to meet WWT's requested delivery schedules for FNC Products, but FNC reserves the right to refuse, cancel or delay shipment to WWT when WWT's credit is impaired, when WWT is delinquent in payments or fails to meet other credit or financial requirements established by FNC, or when WWT has failed to perform its obligations under this Agreement. 8. WWT Determines Its Own Price. Although FNC may publish suggested wholesale or retail prices, these are suggestions only and WWT will be entirely free to determine the actual prices at which FNC Products will be sold by WWT to its customers. 9. Trademarks, Trade Names, Logos, Designations and Copyrights. (a) Use During Agreement. During the term of this Agreement, WWT is authorized by FNC to use the trademarks, trade names, logos and designations FNC uses for FNC Products in connection with WWT's advertisement, promotion and distribution of FNC Products. WWT's use of such trademarks, trade names, logos and designations will be in strict accordance with FNC's policies in effect from time to time, including but not limited to trademark usage and cooperative advertising policies. WWT agrees not to attach any additional trademarks, trade names, logos or designations to any FNC Product. WWT further agrees not to use any FNC trademark, trade name, logo or designation in connection with any non-FNC Product. (b) Copyright and Trademark Notices. WWT will include on each FNC Product that it distributes, and on all containers and storage media therefor, all trademark, copyright and other notices of proprietary rights included by FNC on such FNC Product. WWT agrees not to alter, erase, deface or overprint any such notice on anything provided by FNC. WWT also will include the appropriate trademark notices when referring to any FNC Product in advertising and promotional materials. (c) WWT Does Not Acquire Proprietary Rights. WWT has paid no consideration for the use of FNC's trademarks, trade names, logos, designations or copyrights, and nothing contained in this Agreement will give WWT any right, title or interest in any of them. WWT acknowledges that FNC owns and retains all trademarks, trade names, logos, designations, copyrights and other proprietary rights in or associated with FNC Products, and agrees that it will not at any time during or after this Agreement assert or claim any interest in or do anything that may adversely affect the validity of any trademark, trade name, logo, designation or copyright belonging to or licensed to FNC (including, without limitation any act or assistance to any act, which may infringe or lead to the infringement of any of FNC's proprietary rights). (d) No Continuing Rights. Upon expiration or termination of this Agreement, WWT will immediately cease all display, advertising and use of all FNC trademarks, trade names, logos and designations and will not thereafter use, advertise or display any trademark, trade name, logo or 7 8 designation which is, or any part of which is, similar to or confusing with any trademark, trade name, logo or designation associated with any FNC Product. (e) Obligation to Protect. WWT agrees to use reasonable efforts to protect FNC's proprietary rights and to cooperate at WWT's expense in FNC's efforts to protect its proprietary rights. WWT agrees to promptly notify FNC of any known or suspected breach of FNC's proprietary rights that comes to WWT's attention. 10. Assignment. FNC has entered into this Agreement with WWT because of WWT's commitments in this Agreement, and further because of FNC's confidence in WWT, which confidence is personal in nature. This Agreement will not be assignable by either party, and WWT may not delegate its duties hereunder without the prior written consent of FNC; provided, however, that FNC may assign this Agreement to a subsidiary or entity controlling, controlled by or under common control with FNC. The provisions hereof shall be binding upon and inure to the benefit of the parties, their successors and permitted assigns. 11. Duration and Termination of Agreement. (a) Term. This Agreement shall become effective on the Effective Date and shall continue for a period of three (3) years, unless earlier terminated or further extended in accordance with the provisions herein. This Agreement will automatically be extended for successive one-year terms unless either party provides to the other party a written notice of termination at least three (3) months prior to the end of the then-existing term. (b) FNC Termination For Cause. FNC may terminate this Agreement at any time prior to the expiration of its stated term in the event that: (i) WWT defaults in any payment due to FNC and such default continues unremedied for a period of thirty (30) days following written notice of such default; (ii) WWT falls to perform any other obligation, warranty, duty or responsibility or is in default with respect to any term or condition undertaken by WWT under this Agreement and such failure or default continues unremedied for a period of twenty (20) days following written notice of such failure or default; or (iii) WWT is merged, consolidated, sells all or substantially all of its assets, or implements or suffers any substantial change in management or control. (c) Termination At Will. Notwithstanding any other provision hereof to the contrary, either party may terminate this Agreement at any time by written notice given to the other party not less than sixty (60) days prior to the effective date of such termination. (d) Automatic Termination. This Agreement terminates automatically, with no further act or action of either party, if a receiver is appointed for WWT or its property, WWT makes an assignment for the benefit of its creditors, any proceedings are commenced by, for or against WWT under any bankruptcy, insolvency or debtor's relief law, or WWT is liquidated or dissolved. (e) Orders After Termination Notice. In the event that any notice of termination of this Agreement is given, FNC will be entitled to reject all or part of any orders received from WWT after notice but prior to the effective date of termination if availability of FNC Products is insufficient at that time to meet the needs of FNC and its customers fully. Notwithstanding any credit terms made 8 9 available to WWT prior to such notice, any FNC Products shipped thereafter shall be paid for by certified or cashier's check prior to shipment. (f) Effect of Termination or Expiration. Upon termination or expiration of this Agreement for any reason: (i) FNC will make arrangements to reacquire, and WWT will sell to FNC, any or all FNC Products and repair or replacement parts therefor then in WWT's possession at prices not greater than the prices paid by WWT for such FNC Products (or, if the FNC Products are not in unopened factory sealed boxes, fifty percent (50%) of such prices). Upon receipt of any FNC Products so reacquired from WWT, FNC shall issue an appropriate credit to WWT's account. (ii) The due dates of all outstanding invoices to WWT for FNC Products automatically will be accelerated so they become due and payable on the effective date of termination, even if longer terms had been provided previously. All orders or portions thereof remaining unshipped as of the effective date of termination shall automatically be canceled. (iii) For a period of two (2) years after the date of termination or expiration, WWT shall make available to FNC for inspection and copying all books and records of WWT that pertain to WWT's performance of and compliance with its obligations, warranties and representations under this Agreement. (iv) WWT shall (1) cease using any FNC trademark, trade name, logo or designation, (2) immediately remove FNC name and trademarks put up by WWT from all buildings or other property, (3) insure such cessation of use and removal by all persons claiming to have received the right to such use from WWT, and (4) cease representing itself, either expressly or impliedly, as an authorized distributor of FNC Products. (v) The acceptance of any order from, or the sale of any FNC Products to WWT, will not be construed as a renewal or extension of this Agreement nor as a waiver of termination. All such transactions will be on an order by order basis and will be governed by provisions identical with the applicable provisions of this Agreement. (g) No Damages For Termination or Expiration. FNC WILL NOT BE LIABLE BY REASON OF TERMINATION OF THIS AGREEMENT TO WWT FOR COMPENSATION, REIMBURSEMENT OR DAMAGES ON ACCOUNT OF THE LOSS OF PROSPECTIVE PROFITS ON ANTICIPATED SALES OR ON ACCOUNT OF EXPENDITURES, INVESTMENTS, LEASES OR COMMITMENTS IN CONNECTION WITH THE BUSINESS OR GOODWILL OF WWT OR OTHERWISE. WWT HEREBY WAIVES ANY TERMINATION INDEMNITIES OR BENEFITS FOR WHICH WWT MIGHT OTHERWISE HAVE A CLAIM AGAINST FNC OR ITS AFFILIATES UNDER THE LAWS OF ANY JURISDICTION. THE PARTIES ACKNOWLEDGE THAT THIS SECTION HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR COMPANY TO ENTER INTO THIS AGREEMENT AND THAT COMPANY WOULD NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE LIMITATIONS OF LIABILITY AS SET FORTH HEREIN. (h) Survival. Expiration or termination of this Agreement for any reason will not release either party from any liabilities or obligations set forth in this Agreement which (i) the parties have expressly agreed survive any such expiration or termination, or (ii) remain to be performed or by their nature would be intended to be applicable following any such expiration or termination. 12. Relationship of the Parties. WWT's relationship with FNC during the term of this Agreement will be that of an independent contractor. WWT will not have, and will not represent that it has, any power, right or authority 9 10 to bind FNC, or to assume or create any liability, obligation or responsibility, express or implied, on behalf of FNC or in FNC's name. 13. Indemnification. (a) WWT agrees to defend, indemnify FNC (including paying all reasonable attorneys' fees and costs of litigation) against and hold FNC harmless from, any and all claims by any other party resulting from WWT's acts or omissions in connection with WWT's performance or non-performance of its duties and obligations hereunder. (b) Subject to Section 15, hereof, Limited Liability, FNC will indemnify and hold harmless WWT from any loss or damage (including reasonable attorney's fees) incurred by WWT because of claims, suits, or demands of third parties for personal injury or tangible property damage to the extent such loss or damage is caused solely by or results solely from defective FNC Products manufactured by FNC provided: 1) WWT notifies FNC in writing of any suits, claims or demands against WWT for which FNC is responsible within five (5) business days after WWT is aware of any such suit, claim, or demand; and 2) WWT gives FNC full opportunity and authority to assume sole defense of such suits and provides full support to FNC in defense of same. * Confidential treatment will be requested 15. Limited Liability. (a) IN THE EVENT THAT FNC SHOULD BE LIABLE TO WWT FOR ANY MATTER RELATING TO OR ARISING IN CONNECTION WITH THIS AGREEMENT, WHETHER BASED ON ACTION OR CLAIM IN CONTRACT, BREACH OF WARRANTY, STRICT LIABILITY, EQUITY, INDEMNITY, NEGLIGENCE, INTENDED CONDUCT, TORT OR OTHERWISE, THE AMOUNT OF DAMAGES RECOVERABLE AGAINST FNC OR ANY OF ITS AFFILIATES FOR ALL EVENTS, ACTS OR OMISSIONS WILL NOT EXCEED, IN THE AGGREGATE, THE AMOUNT PAID TO FNC BY WWT FOR THE SPECIFIC ITEM OF FNC PRODUCT GIVING RISE TO SUCH DAMAGES (EXCLUDING PAYMENTS FOR TAXES OR COSTS AND EXPENSES). IN NO EVENT WILL FNC OR ANY OF ITS AFFILIATES BE LIABLE FOR ANY PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES, INCLUDING ANY LOSS OF INCOME, PROFITS, COST-SAVINGS, GOODWILL OR BUSINESS, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, BREACH OF WARRANTY, STRICT LIABILITY, EQUITY, INDEMNITY, NEGLIGENCE, INTENDED CONDUCT, TORT OR OTHERWISE, EVEN IF FNC HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WILL FNC BE LIABLE TO WWT'S CUSTOMERS. THE PROVISIONS OF THIS SECTION 15 WILL SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT FOR ANY REASON. 10 11 (b) WWT agrees that the limitations of liability and disclaimers of warranty set forth in this Agreement will apply regardless of whether FNC has tendered delivery of FNC Products or WWT has accepted any FNC Product. WWT acknowledges that FNC has set its prices and entered into this Agreement in reliance on the disclaimers of liability, the disclaimers of warranty and the limitations of liability set forth in this Agreement and that the same form an essential basis of the bargain between the parties. 16. Software License and Confidentiality. (a) Software License. Certain FNC Products to be purchased by WWT from FNC for resale hereunder are comprised of both hardware and software components. Accordingly, FNC hereby grants to WWT, and WWT hereby accepts from FNC, a non-exclusive, non-transferable license to grant a non-exclusive, non-transferable sublicense to any customer of WWT located in the Territory to use the object code of the Software solely as an integral part of the FNC Product purchased by such customer from WWT; provided that WWT will cause each such customer (and will be liable to FNC for any such customer's failure) to be in strict compliance with the following use provisions: (i) The Software, including any upgrades, updates, enhancements and modifications thereto, and documentation therefor, is and will remain the exclusive property of FNC or the third parties from which FNC has obtained the Software and the customer will have no rights or interest therein except for the non-exclusive, non-transferable right to use the Software as an integral part of the FNC Product purchased by the customer. (ii) The Software may only be accessed by employees of the customer and may used solely for the customer's internal business purposes. (iii) The customer will keep the Software and related documentation confidential and will not disclose, sell, assign, license or otherwise dispose of or commercially exploit any portion thereof. (iv) The customer will not decompile, dissemble, translate or reverse engineering the Software or any portion thereof. (v) The customer will not create any software which emulates or performs substantially the same function as the Software. (vi) The customer may make one copy of the Software solely for backup purpose; provided that the customer reproduces and includes FNC's copyright notices on any such backup copy. (b) Confidentiality. WWT will maintain in strict confidence and safeguard all confidential and proprietary information of FNC, including, but not limited to, the terms and conditions of this Agreement, customer lists, cost information, marketing plans and any other business and technical information which becomes available to WWT in connection with this Agreement. The provisions of this Section 16 will survive the expiration or termination of this Agreement for any reason. 17. General. (a) Waiver. The failure of either party to enforce at any time or for any period of time the provisions hereof in accordance with their terms will not be construed to be a waiver of such provisions or of the right of such party thereafter to enforce each and every provision. The waiver by either party of any default by the other shall not waive subsequent defaults of the same or different kind. 11 12 (b) Notices. All notices and demands hereunder will be in writing and will be served by personal service, mail, confirmed facsimile transmission or nationally-recognized express courier at the address of the receiving party set forth in this Agreement (or at such different address as may be designated by such party by written notice to the other party). All notices or demands by mail shall be by certified or registered airmail, return receipt requested, and shall be deemed complete upon receipt. (c) Attorneys' Fees. In the event that it becomes necessary to enforce this Agreement through the use of legal action or proceedings, the prevailing party shall be entitled to recover from the other party all the costs, attorneys' fees and other expenses incurred by such prevailing party in such legal action or proceedings. (d) Governing Law: Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, other than the choice of law rules. Any suit hereunder will be brought in the federal or state courts located in Dallas County or Collin County, Texas, and each party hereby consents unequivocally to the exclusive jurisdiction of such courts. (e) Severability. In the event that any of the provisions of this Agreement shall be held by a court or other tribunal of competent jurisdiction to be unenforceable, such provision will be enforced to the maximum extent permissible and the remaining portions of this Agreement shall remain in full force and effect. (f) Force Majeure. FNC shall not be responsible for any failure to perform due to unforeseen circumstances or to causes beyond FNC's reasonable control, including but not limited to acts of God, war, riot, embargoes, acts of civil or military authorities, fire, floods, accidents, strikes, failure to obtain export licenses or shortages of transportation, facilities, fuel, energy, labor or materials. In the event of any such delay, FNC may defer the delivery date of orders for FNC Products for a period equal to the time of such delay. (g) Equitable Relief. WWT acknowledges that any breach of its obligations under this Agreement with respect to the proprietary rights or confidential information of FNC will cause FNC irreparable injury for which there are inadequate remedies at law, and therefore FNC will be entitled to equitable relief in addition to all other remedies provided by this Agreement or available at law. (h) Entire Agreement. This Agreement constitutes the complete and exclusive agreement between the parties pertaining to the subject matter hereof, and supersedes in their entirety any and all written or oral agreements previously existing between the parties with respect to such subject matter. WWT acknowledges that it is not entering into this Agreement on the basis of any representations not expressly contained herein. Any modifications of this Agreement must be in writing and signed by both parties hereto. Any such modification shall be binding upon FNC only if and when signed by one of its duly authorized officers. (i) Release of Claims. Any and all claims against FNC arising under prior agreements, whether oral or in writing, between FNC and WWT are waived and released by WWT by acceptance of this Agreement. (j) Due Execution. The party executing this Agreement on behalf of WWT represents and warrants that he or she has been duly authorized under WWT's charter documents and applicable law to execute this Agreement on behalf of WWT. IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the Effective Date. FUJITSU NETWORK COMMUNICATIONS, INC. WORLDWIDE TECHNOLOGIES, INC. 12 13 Signature: /s/ Rodney J. Boehm Signature: /s/ David L. Steward ------------------------ ----------------------- Printed Name: Rodney J. Boehm Printed Name: ---------------------- Title: Vice President - Business Title: Management ----------------------------- * Confidential treatment will be requested Exhibit B: Territory 13 14 * Confidential treatment will be requested 15 * Confidential treatment will be requested 2 16 Approvals: Revision: Orig. ----- Fujitsu Network Communications, Inc. Worldwide Technology, Inc. By: /s/ Rodney J. Boehm By: /s/ David L. Steward ---------------------------------- -------------------- Date: 9-15-97 3 EX-10.19 18 GENERAL AGREEMENT B/W SOUTHWESTERN BELL & REGIS. 1 Ex. 10.19 Southwestern Bell Telephone Contract No. C2703F0 Page 1 of 23 GENERAL AGREEMENT PREAMBLE This a Contract between Southwestern Bell Telephone Company (Buyer), a Missouri corporation, having an office at One Bell Center, St. Louis, Missouri 63101; and World Wide Technology, Inc. (Seller), a ---------------------------------------- corporation, having an office at 127E Weldon Parkway, St. Louis, Missouri 63043-3101. SCOPE Buyer and Seller agree that ENGINEERING SERVICES (hereinafter ENGINEERING) and INSTALLATION SERVICES (hereinafter INSTALLATION), collectively hereinafter referred to as SERVICES, and MATERIAL are hereby offered for sale by Seller. Services may be ordered in situations which may include but are not limited to, material additions, material removals, and reconfiguration of Buyer's existing material. ENGINEERING and INSTALLATION may be ordered in combination, separately or in conjunction with a purchase order (hereinafter "Order") which calls for Seller to furnish MATERIAL. TERM OF AGREEMENT Buyer and Seller agree that the Contract term will be from April 1, 1995, through March 31, 1997. BILLING For work against an Order placed pursuant to this Contract, and unless otherwise specifically agreed, Seller will (1) VERIFY that all Seller's support documents and Seller's packages/shipping containers bear Buyer's Order number; (2) render invoices showing appropriate details for each Order or, when appropriate, each shipment; (3) forward bills of lading, shipping notices, and transportation bills, if applicable, to Buyer prior to final billing: (4) forward the invoices, bills, and notices to the billing address on the Order unless specifically directed otherwise by Buyer. If prepayment of transpiration charges is authorized, Seller will include the transportation charges as a separate item on the invoice. Seller agrees to accept and acknowledge Buyer's notices of disputed billing and to provide Buyer notice of the disposition and solution of such disputed billing as soon as reasonably practicable. Seller will make its best effort to resolve such dispute within thirty (30) days after the receipt of Buyer's notice. RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. *Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 Southwestern Bell Telephone Contract No. C2703F0 Page 2 of 23 Seller will render all billing invoices associated with an Order by the end of the initial ninety (90) day period after acceptance in accordance with Clause ____, INSPECTION AND ACCEPTANCE OF INSTALLATION. COMPLAINTS Buyer reserves the right to notify Seller in cases where Buyer has identified current or potential problem areas concerning Seller's SERVICES and/or MATERIAL furnished hereunder. Whenever Buyer exercises such right, Seller agrees to: (a) Accept such notice (hereinafter referred to as an "Engineering Complaint") and handle it in accordance with Bell Communications Research, Inc. ("Bellcore") Technical Publication GR-230-CORE Issue 1. 9-1-94 "Generic Requirements for Engineering Complaints." (b) Acknowledge receipt of such Engineering Complaint and advise Buyer of Seller's proposed organization responsible for resolving it within ten (10) working days of Seller's receipt thereof. (c) Resolve such Engineering Complaint within ninety (90) calendar days of the date of Buyer's notice, unless a later date is mutually agreed upon by the parties. If unable to resolve an Engineering Complaint within said ninety (90) day period, Seller will issue an "interim report" as defined in GR-230-CORE. DOCUMENTATION Information prepared by Seller and relating to the SERVICES and/or MATERIAL provided hereunder will be in accordance with the requirements of Buyer. All documentation including but without limitation, office drawings, wiring drawings, fuse records, operational manual, and final test records summary required by Buyer will be turned over to Buyer upon ENGINEERING completion and/or INSTALLATION completion and will reflect final changes, modifications and will be correct prior to turning over to Buyer. Such documentation relating to specific applications will become the property of Buyer. Schematic drawings and circuit descriptions will be provided by Seller as applicable for the MATERIAL provided. With each application of ENGINEERING and/or INSTALLATION by Seller to Buyer, Seller will provide documentation covering such ENGINEERING and/or INSTALLATION. This documentation and any subsequent changes or updates will reference Seller's serialized numbers, issue numbers, and date of issue. Seller RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 3 Southwestern Bell Telephone Contract No. C2703F0 Page 3 of 23 agrees to maintain a mailing list of recipients of such documentation and provide adequate copies of such manuals and subsequent changes or updates and distribute such documentation in accordance with mailing list as provided by Buyer. ENGINEERING ENGINEERING SERVICES include, but are not limited to, the planning, application, configuration, and technical advice which may be associated with Buyer's existing material or MATERIAL as ordered. Provisions as SPECIFIED in [* confidential treatment requested] B of this Contract will APPLY when ENGINEERING is requested from Seller. INSPECTION AND ACCEPTANCE OF INSTALLATION At reasonable times during the course of INSTALLATION, Buyer, at Buyer's discretion or upon Seller's request, BUYER MAY INSPECT portions of each INSTALLATION. Seller shall provide sufficient notice to Buyer of Seller's testing schedule, and upon Buyer's request, Buyer may observe Seller's testing to determine compliance with Buyer's acceptance standards or acceptance procedures. Upon completion of INSTALLATION, Seller will submit to Buyer a notice of completion or, if Buyer has elected advance turnover of sub-systems, a notice of completion of advance turnover. The INSTALLATION will be considered complete and ready for acceptance by Buyer when all wiring adjusting, and testing or any other INSTALLATION require is completed in accordance with the provisions herein, including CLAUSE ____, INSTALLATION STANDARDS; and CLAUSE ____, QUALITY ASSURANCE, of this Contract. Buyer will promptly make inspections as Buyer deems necessary for final acceptance. Changes in Buyer's workmanship standards will not be retroactive for SERVICES completed or in process by Seller unless mutually agreed to by the parties. Seller will notify Buyer in detail and in writing of the completion of Seller's INSTALLATION, including the performance of all applicable equipment tests. A. After receipt of Seller's completion notice, Buyer may conduct appropriate Acceptance Tests AS SPECIFIED IN THE REQUEST FOR FIRM PRICE QUOTE OR ORDER FOR ENGINEERING, OR ORDER FOR INSTALLATION SERVICES WHICH APPLIES TO THE INSTALLATION. B. If any requirements of the Acceptance Tests are not successfully met, Buyer will so notify Seller in writing. Seller will, at no additional charge, take such action as may be required to correct such deficiency and notify Buyer after completion of RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 4 Southwestern Bell Telephone Contract No. C2703F0 Page 4 of 23 such corrective actions within forty-five (45) days of the date of Buyer's notification. Upon receipt of Seller's notification of completion of such corrective action, Buyer will have the right to repeat the appropriate Acceptance Tests. C. When the requirements of the Acceptance Tests are successfully met, Buyer will indicate such acceptance by signing a certificate of acceptance. If Seller does not receive notice from Buyer of unsatisfactory results of Acceptance Tests or the certificate of acceptance within sixty (60) days from Buyer's receipt of Seller's notice of completion, such INSTALLATION will be deemed accepted by Buyer. INSTALLATION INSTALLATION SERVICES include, but are not limited to the assembly, wiring, and testing of Buyer's MATERIAL, as ordered, or additions to Buyer's existing material. Provisions specified (* Confidential treatment requested) and B of this Contract, and CLAUSE ____, INSTALLATION STANDARDS, herein will be used when INSTALLATION is requested from Seller. INSTALLATION STANDARDS Buyer's central office installation provisions, relating to the SERVICES described herein, are contained in Buyer's Technical Publication TP76300, Revision 2, May 199, "Installation Guide", and Technical Reference TR-EOP-000295, Issue 2, November 1987, "Isolated Ground Planes: Definition and Application to Telephone Central Offices:, both of which are incorporated herein by this reference. Unless otherwise mutually agreed to in writing, Seller will install MATERIAL in accordance with such standards to the extent Seller's installation standards supplement but do not reduce or detract therefrom. ORDERS Unless otherwise specified in writing, any Order for ENGINEERING, and/or INSTALLATION, and/or MATERIAL will apply against this Contract. Seller agrees to receive Buyer's Orders for SERVICES and/or MATERIAL on a direct Order basis AND/OR Firm Price Quote basis. Seller agrees to provide Firm Price Quotes for each Order and/or Buyer's Request For Quote, unless prices for said SERVICES and/or MATERIAL is specified in this Contract. Seller also agrees to receive Buyer's Orders and provide (* Confidential treatment requested) for SERVICES as listed in Appendix B of this Contract. RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 5 Southwestern Bell Telephone Contract No. C2703F0 Page 5 of 23 1. Direct Ordering Buyer may obtain SERVICES from Seller typically in the following circumstances: A. ENGINEERING and/or INSTALLATION are requested from Seller on a Order where such Order includes Seller furnishing MATERIAL; or B. ENGINEERING and/or INSTALLATION only are requested from Seller Seller's detailed pricing will include separate items for MATERIAL, if any, ENGINEERING, INSTALLATION, drafting services (including the price to provide and ship two (2) complete sets of ENGINEERING drawings for each job), and any other services requested, which may include, but are not limited to, transportation, temporary storage, hoisting, and the like. Prices will be deemed firm unless otherwise delineated in a change Order referencing the original Order. Such change Order could affect the originally scheduled date(s) as mutually agreed upon prior to such change. * Confidential treatment will be requested RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 6 Southwestern Bell Telephone Contract No. C2703F0 Page 6 of 23 PERFORMANCE Consistent with the provisions of CLAUSE ____, FORCE MAJEURE, Seller, having confirmed and agreed to a schedule or specific date(s) in the performance of an Order(s), will be expected to meet the schedule or date(s) contained in such Order(s). In the event Seller anticipates an inability to perform as previously agreed on an Order, Seller will promptly notify Buyer. When notice is provided as indicated above or when such previously agreed upon schedule(s) or dates(s) is not met and such affected Order is for ENGINEERING and/or INSTALLATION only, Seller will make every reasonable effort to mitigate such delays in performance, at no cost to Buyer, including, but not limited to overtime work, out of sequence installation effort, and premium transportation. If requested by Buyer, Seller will document such efforts with reasonable proof. However, Buyer will have the option to cancel such Order without any obligation to Seller whatsoever except as to the payment for SERVICES already performed by Seller on such Order. If requested by Buyer, Seller will document the extent of such completed SERVICES with reasonable proof. When notice is provided as indicated above or when such previously agreed upon schedule(s) or dates(s) is not met and such affected Order is for MATERIAL, Buyer may at any time terminate any or all Orders placed by it hereunder. Unless otherwise specified herein, Buyer's liability to Seller with respect to any such terminated Order will be limited to the actual costs incurred by Seller in procuring MATERIAL (not usable in RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 7 Southwestern Bell Telephone Contract No. C2703F0 Page 7 of 23 Seller's other operations or salable to Seller's other customers) in process as of the date of Buyer's notice of termination, less any salvage value thereof. If requested, Seller agrees to substantiate such costs with proof satisfactory to Buyer. * Confidential treatment will be requested QUALITY ASSURANCE Seller agrees that SERVICES furnished hereunder by Seller will be subject to: (i) Seller's quality control activities and procedures, including any performance measurements, testing, quality process reviews or inspections to implement such procedures. (ii) The requirements contained in the current issues of the following Bellcore documents: TR-TSY-000785, Issue 1, December 1988, "Systems Equipment Engineering (SEE) Associated Services - Quality program Analysis" RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 8 Southwestern Bell Telephone Contract No. C2703F0 Page 8 of 23 TR-TSY-000870, Issue 1, February 1991, "Electronic Discharge Control in the Manufacture of Telecommunications Equipment" (Exceptions listed in Appendix E of this Contract) TR-NWT-001251, Issue 1, December 1992, "Quality System Generic Requirements for Hardware" (Seller's objective is to be in full compliance with the provisions of this document by December 31, 1993.) Requirements listed in the applicable material contract MARKING Clause, as specified in QPS No. 94.890, Issue 4, "Common Language Equipment Identification (CLEI)/Bar Code Labels." (iii) Quality Assurance Examination and/or Process Surveillance of Seller's SERVICES, by Buyer or its representative ("Agent"), will be conducted in accordance with the provisions of the Method of Procedure ("MOP") associated with the job in progress as set forth in Buyer's Installation Guide (TP76300), which may be amended from time to time with Seller's written approval. Seller further agrees that it will: (a) Notify Buyer or Buyer's Agent when SERVICE is ready for examination and give Buyer or Buyer's Agent reasonable opportunity to examine SERVICE at any time prior to the schedule completion date. Such examination may be performed prior to completion of the job in accordance with the above-referenced MOP. (b) Provide Buyer or Buyer's Agent with copies of Seller's Quality Manual, current inspection procedures and product specifications for the SERVICE furnished hereunder. (c) Maintain and make available to Buyer or Buyer's Agent the data obtained through Seller's quality control procedures which demonstrate that the SERVICE meets the specified quality and reliability requirements. (d) Provide Buyer or Buyer's Agent, at no charge, with reasonable access to Seller's test equipment, facilities, data and specifications, reasonable assistance from Seller's personnel and reasonably sufficient working space to enable Buyer or Buyer's Agent to perform said Quality Assurance Examination and/or Process Surveillance and/or a review of Seller's total quality program at Seller's facilities. RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 9 Southwestern Bell Telephone Contract No. C2703F0 Page 9 of 23 Upon the demonstrated ability and consistency of the quality program, Process Surveillance procedures may be initiated by Buyer or Buyer's Agent. Nothing contained herein will affect Buyer's or Seller's rights hereunder, under any warranty, or under other provisions of this Contract. RESOLUTION OF DISPUTES Disputes arising from failure of the parties to resolve problems or disagreements under this Contract through normal business interfaces will be referred in writing, along with the supporting details, to the respective Contract Administrator for resolution. Resolution will consist of a negotiated settlement based upon their respective Contract Administrators' interpretation of the responsibilities and intents reflected by the language of this Contract. The Contract Administrators are: Buyer: Area Manager - Procurement Contracting Seller: _____________________________________ Either party may change its Contract Administrator at any time by giving notice to the other party. NOTHING CONTAINED HEREIN WILL AFFECT ANY OTHER RIGHTS OR REMEDIES THE PARTIES MAY HAVE IN ANY COURT OF LAW OR EQUITY. TERMS OF PAYMENT In the event Seller is not required to provide MATERIAL, Seller's invoice for ENGINEERING will be rendered upon the completion of such ENGINEERING, or as soon thereafter as practicable. Seller's invoice for ENGINEERING on Orders where Seller furnishes MATERIAL will be rendered upon receipt of MATERIAL by Buyer, or as soon thereafter as practicable. Seller's invoice(s) for INSTALLATION will be based on the actual amount of INSTALLATION completed. * Confidential treatment will be requested RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 10 Southwestern Bell Telephone Contract No. C2703F0 Page 10 of 23 * Confidential treatment will be requested WORK DONE BY OTHERS Buyer will have the right to approve any subcontractor(s) to be used by Seller in the provision of SERVICES AND MATERIAL hereunder on Buyer's or Buyer's customer's premises. Such approval will not be unreasonably withheld. Prior to the RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 11 Southwestern Bell Telephone Contract No. C2703F0 Page 11 of 23 commencement of SERVICES OR PROVISION OF MATERIAL Seller will notify Buyer of Seller's intended subcontractor(s). If Buyer expresses to Seller objection to Seller's subcontractor within ten (10) working days from Seller's notification to Buyer, Buyer and Seller will reach a mutually agreeable resolution before work commences. ASSIGNMENT Neither party may assign, subcontract or otherwise transfer its rights or obligations under this Contract except with the prior written consent of the other party which consent will not be unreasonably withheld; provided, however, Buyer will have the right to assign this Contract to any present or future affiliate, subsidiary or parent corporation, without securing the consent of Seller, and may grant to any such assignee the same rights and privileges Buyer enjoys hereunder. Any attempted assignment not assented to in the manner prescribed herein, except an assignment confined solely to monies due or to become due, will be void. It is expressly agreed that any assignment of monies will be void if (a) Seller fails to give Buyer at least thirty (30) days' prior written notice thereof, or (b) such assignment attempts to impose upon Buyer obligations to the assignee additional to the payment of such monies or preclude Buyer from dealing solely and directly with Seller in all matters pertaining to this Contract, including the negotiation of amendments or settlements of charges due. BREACH OF CONTRACT In the event Seller is in breach of any term or condition of this Contract, and said breach continues for a period of ten (10) days after the giving of written notice thereof, then, in addition to all other rights and remedies available at law or in equity, Buyer will have the right to cancel this Contract. CHOICE OF LAW This Contract will be governed by Missouri law. CLEAN UP Upon completion of the SERVICES, Seller agrees to promptly remove all tools, equipment, materials and debris from Buyer's premises. COMPLIANCE WITH LAWS Seller agrees to comply with the provisions of the Fair Labor Standards Act, the Occupational Safety and Health Act, and all other applicable federal, state, county and local laws, ordinances, regulations and codes (including the identification and RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 12 Southwestern Bell Telephone Contract No. C2703F0 Page 12 of 23 procurement of required permits, certificates, approvals and inspections) in Seller's performance under this Contract. Seller further agrees to comply with all applicable Executive Orders and Federal regulations as set forth in form SW9368, a copy of which is attached as APPENDIX C and incorporated herein. Seller will defend, indemnify and hold Buyer harmless from any loss, liability, damage or expense (including attorneys' fees and court costs) sustained by Buyer because of Seller's noncompliance. RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 13 Southwestern Bell Telephone Contract No. C2703F0 Page 13 of 23 CONFLICT OF INTEREST Seller represents and warrants that no officer, director, employee or agent of Buyer has been or will be employed, retained or paid a fee, or otherwise has received or will receive any personal compensation or consideration, by or from Seller or any of Seller's officers, directors, employees or agents in connection with the arranging or negotiation of this Contract or other associated documents or agreements. COPYRIGHTS Seller agrees that all rights, title and interest in and to all original works of authorship which Seller produces or composes in connection with the Services shall be considered works made for hire and shall belong to the Buyer, including all copyrights thereon, and the rights to obtain registrations of copyrights thereon throughout the world. In the event that such works contemplated hereunder as works made for hire shall not be considered works made for hire, Seller hereby assigns such Works and all rights, title and interest in them to Buyer. CURE Buyer will not be deemed to be in default hereunder and Seller may not attempt to enforce any remedy for any claimed default, unless Buyer fails to cure or correct same within ten (10) days following receipt of written notice thereof from Seller. ENTIRE AGREEMENT It is agreed that estimates furnished by Buyer do not constitute commitments. The terms contained in this Contract constitute the entire agreement between Seller and Buyer which may not be modified except by a written instrument signed by both parties. Any terms contained in Seller's proposal or acceptance of Buyer's offer in Seller's invoice or in any other communication, which add to, vary from or conflict with the terms herein will be void. The provisions of this Contract supersede all prior oral and written quotations, communications, agreements and understandings of the parties with respect to the subject matter hereof. The parties further agree that no rights arising from this Contract will inure to the benefit of any third party other than a permitted assignee. FORCE MAJEURE Neither party will be held responsible for any delay or failure in performance of any part of this Contract to the extent that such delay or failure is caused by fire, flood, RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 14 Southwestern Bell Telephone Contract No. C2703F0 Page 14 of 23 explosion, war, strike, embargo, government requirement, civil or military authorities, Act of God, public enemy, acts or omissions of carriers, or other causes beyond the control of Seller or Buyer. If any force majeure condition occurs, ("Condition") the party delayed or unable to perform will give immediate notice to the other party and the notified party may elect to: (a) Terminate this Contract or any Order or part of either as to Services not already performed. (b) Suspend this Contract for the duration of the Condition, buy or sell elsewhere Services to be bought or sold hereunder, and deduct from any commitment the quantity bought or sold or for which such commitments have been made elsewhere. (c) Resume performance once the Condition ceases with an option in the notified party to extend the term of this Contract up to the length of time the Condition endured. Unless written notice to the contrary is given within thirty (30) days after such notified party is notified of the Condition, option (b) above will be deemed selected HAZARDOUS MATERIALS/REGULATED SUBSTANCE A "Regulated Substance," as use herein is a generic term used to describe all materials that are regulated by any federal, state or local government during transportation, handling and/or disposal. This includes, but is not limited to, materials that are regulated as (a) "hazardous materials" under the Hazardous Materials Transportation Act, (b) "chemical hazards" under Occupational Safety and Health Administration standards, (c) "chemical substances or mixtures" under the Toxic Substances Control Act, (d) "pesticides" under the Federal Insecticide, Fungicide and Rodenticide Act, and (e) "hazardous wastes" as defined or listed under the Resource Conservation and Recovery Act. If any material furnished under this Contract contains a Regulated Substance, Seller agrees to notify Buyer immediately and provide to Buyer all necessary notification and other information (including but not limited to OSHA Material Safety Data Sheets) regarding said Regulated Substance as may be required by law. Seller further agrees to defend, indemnify and hold Buyer harmless from any liability, penalty, damage or expense (including attorneys' fees and court costs) sustained by Buyer because of Seller's noncompliance herewith. RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 15 Southwestern Bell Telephone Contract No. C2703F0 Page 15 of 23 IDENTIFICATION CREDENTIALS Buyer may, at its discretion, require Seller's employees to display identification credentials, which Buyer may issue, in order to gain access to Buyer's premises for the performance of the SERVICES. If, for any reason, any employee of Seller to whom credentials have been issued ceases to perform the SERVICES, Seller will immediately inform Buyer's representative in the speediest manner possible and thereafter promptly return to Buyer's representative that employee's identification credentials or provide a written statement of the reason why such credentials cannot be returned. INDEPENDENT CONTRACTOR Seller will perform this Contract as an independent contractor and not as an agent, employee or partner of Buyer. INFRINGEMENT Infringement means any claim of infringement, of any patent, trademark, copyright, trade secret or other proprietary interest of any third party based on the manufacture, installation, normal use, lease or sale of any program, documentation, process or material furnished to Buyer in connection with the Services. Seller agrees to indemnify and hold Buyer harmless from any loss, liability, damage or expense (including increased damages for willful infringement, punitive damages, attorneys' fees and court costs) resulting from such Infringement except where such infringement arises solely from Seller's adherence to Buyer's written detailed instructions or directions. Such exception will not, however, include: (a) Services or merchandise available on the open market or the same as such services or merchandise, nor (b) Services or items of Seller's origin, design or selection. SELLER WARRANTS THAT IT HAS MADE REASONABLE INDEPENDENT INVESTIGATION (INCLUDING OBTAINING LEGAL OPINIONS) TO DETERMINE THE LEGALITY OF ITS RIGHT TO PRODUCT AND SELL THE MATERIAL/EQUIPMENT/SERVICES PROVIDED HEREIN. EACH PARTY WILL DEFEND OR SETTLE, AT ITS OWN EXPENSE, ANY ACTION OR SUIT AGAINST THE OTHER PARTY FOR WHICH IT IS RESPONSIBLE UNDER THIS CLAUSE. FURTHER, EACH PARTY WILL RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 16 Southwestern Bell Telephone Contract No. C2703F0 Page 16 of 23 PROMPTLY NOTIFY THE OTHER PARTY OF ANY CLAIM OF INFRINGEMENT FOR WHICH THE OTHER PARTY IS RESPONSIBLE HEREUNDER AND COOPERATE WITH THE OTHER PARTY IN EVERY REASONABLE WAY TO FACILITATE THE DEFENSE THEREOF. IN THE EVENT THAT SELLER, AFTER NOTIFICATION OF ANY CLAIMS OF WHICH SELLER IS RESPONSIBLE, DOES NOT ASSUME THE DEFENSE OF SUCH ACTION, SELLER WILL REIMBURSE BUYER FOR ALL OF ITS COSTS INCURRED IN THE DEFENSE OF THE CLAIM, INCLUDING, BUT NOT LIMITED TO ATTORNEYS' FEES AND INTEREST ON SUCH BUYER'S PAYMENT OF SAID AMOUNTS FROM THE DATE OF BUYER'S PAYMENT OF SAID AMOUNTS. RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 17 Southwestern Bell Telephone Contract No. C2703F0 Page 17 of 23 INSURANCE With respect to performance hereunder, Seller agrees to maintain, at all times during the term of this Contract, the following insurance coverage and any additional insurance and/or bonds required by law: (a) Workers' Compensation insurance with benefits afforded under the laws of the state in which the Services is to be performed. (b) Employer's Liability insurance with minimum limits of $100,000 for bodily injury by accident, $100,000 for bodily injury by disease per employee and $500,000 for bodily injury by disease policy aggregate. (c) General Liability insurance with the minimum limits of $1,000,000 per occurrence for bodily injury and property damage arising out of Premises/Operations, $1,000,000 per occurrence Personal Injury and $1,000,000 General Policy Aggregate (applicable to Commercial General Liability Policies), and $1,000,000 per occurrence/aggregate for Products/Completed Operations. Coverage must include Blanket Contractual, Independent Contractor's Liability and Broad Form Property Damage. Buyer is to be named as an "Additional Insured" as respects General Liability. (d) If use of motor vehicles is required, Automobile Liability insurance with minimum limits of $1,000,000 per occurrence for bodily injury and property damage, which coverage will extend to all owned, hired and non-owned autos. Insurance companies affording coverage hereunder must have a Best's Rating of B+VII or better. Upon Buyer's request, Seller agrees to furnish certificates or other acceptable proof of the foregoing insurance which will provide for Buyer to be notified in writing at least thirty (30) days prior to cancellation of or any material change in any of the insurance evidenced thereby. INVOICING Seller will render its invoice upon completion of the Services to Buyer's satisfaction and Buyer agrees to pay same within thirty (30) days of receipt. Buyer reserves the right, before making any payment, to require proof that all parties furnishing labor and/or materials in connection with the Services have been paid. Buyer may also RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 18 Southwestern Bell Telephone Contract No. C2703F0 Page 18 of 23 withhold in order to satisfy any claim which Buyer may have against Seller (whether or not arising under this Contract). LIABILITY Seller agrees to indemnify and save Buyer harmless (including its officers, directors, agents and employees) from any and all liability, loss, damage or expense (including attorneys' fees and court costs), incurred by Buyer in connection with any claim or suit resulting from Services or the acts of omissions of Seller (including any of its servants, agents or subcontractors but excepting the negligent acts or omissions solely of Buyer) in performing the Services. Seller further agrees to defend Buyer, at Buyer's request, against any such claim or suit, and Buyer agrees to promptly notify Seller of any claim for which Seller may be responsible under this clause. Seller's foregoing agreement to indemnify and save Buyer harmless and defend includes, but is not limited to, any claim, suit or action of infringement of any patent, trademark, copyright, trade secret or any other intellectual property of any third party. Seller agrees not to implead or bring any action against Buyer or Buyer's employees based on any claim by any person for personal injury or death that occurs in the course or scope of employment of such person by Seller and that arises out of the Services. LICENSES No licenses, express or implied, under any patents are granted by Buyer to Seller under this Contract. NON-EXCLUSIVE DEALING It is agreed that this Contract does not grant Seller an exclusive right to perform the Services and that Buyer may itself perform, or contract with other suppliers to perform, the Services. NON-WAIVER No course of dealing or failure of either party to strictly enforce any term of this Contract will be construed as a waiver of such term. The waiver by Buyer in one instance of any default of Seller will not be deemed a waiver of any other default of Seller. The express provision herein for certain rights and remedies of Buyer are in RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 19 Southwestern Bell Telephone Contract No. C2703F0 Page 19 of 23 addition to any other legal and equitable rights and remedies to which it would otherwise be entitled. NOTICES Any notice or demand which under the terms of this Contract or otherwise must or may be given or made by Seller or Buyer will be in writing and given or made by facsimile or similar communication or by certified or registered mail, return receipt requested, addressed to the respective parties as shown: (a) To Buyer: Southwestern Bell Telephone Company 1010 Pine Street 9-E-95 St. Louis, Missouri 63101 Attn: Karan Wolff (b) To Seller: --------------------------- --------------------------- --------------------------- Attn: --------------------- Such notice or demand will be deemed to have been given or made when sent, if sent by facsimile or similar communication, or when deposited, postage prepaid, in the U.S. mail. The above addresses may be changed at any time by giving thirty (30) days' prior written notice as above provided PATENTS As a part of this Contract and without additional compensation, Seller agrees to and does hereby sell, assign, and transfer to the Buyer, its successors and assignees, the entire right, title and interest in and to any and all inventions, discoveries, or improvements which are conceived or first reduced to practice in the performance of this Contract, and to all applications for and Letters Patent covering same, as well as any reissues, divisions, and extensions of said applications or Letters Patent. Seller further agrees to furnish Buyer with complete information on each such invention, discovery, or improvement and to make, execute and deliver to the Buyer any and all patents or patent applications, as well as all papers, documents, affidavits, statements, or other instruments, in such form, terms and contents as required by the Buyer in or incident to the prosecution of any and all applications for patent filed by Seller or the Buyer with respect to such inventions, discoveries, or improvements or in RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 20 Southwestern Bell Telephone Contract No. C2703F0 Page 20 of 23 the adjustment or any other actions or proceedings in which such applications may become involved. Before final payment is made under this Contract, Seller shall furnish to Buyer complete information in respect of inventions, discoveries, or improvements conceived or reduced to practice in connection with the Services or a statement that no inventions, discoveries, or improvements emanated from such Services. PLANT AND WORK RULES Each party's employees and agents will, while on the premises of the other, comply with all plant rules and regulations and, where required by government regulations, submit satisfactory clearance from the U.S. Department of Defense and/or other federal authorities concerned. PUBLICITY Seller agrees not to advertise, or otherwise make known to others, any information regarding this Contract. Seller further agrees not to use in any advertising, sales promotion, press releases or other publicity matters any endorsements, direct or indirect quotes, or pictures implying endorsement by Buyer or any of its employees without Buyer's prior written approval. Seller will submit to Buyer for written approval, prior to publication, all publicity matters that mention or display Buyer's name and/or marks or contain language from which a connection to said name and/or marks may be inferred. RECORDS AND AUDIT Seller agrees that it will: (a) Maintain complete and accurate records of all amounts billable to and payments made by Buyer hereunder in accordance with standard recognized accounting practices. (b) Retain such records and reasonable billing detail for a period of three (3) years from the date of final payment for Services. (c) Provide reasonable supporting documentation to Buyer concerning any disputed invoice amount within thirty (30) calendar days after receipt of written notification of such dispute. RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 21 Southwestern Bell Telephone Contract No. C2703F0 Page 21 of 23 (d) Permit Buyer, through its accredited representatives, to inspect and audit during normal business hours the charges invoiced to Buyer. Should Buyer request an audit, Seller will make available any pertinent records and files. RELEASES VOID Neither party will require waivers or releases of any personal rights from representatives of the other in connection with visits to each other's respective premises, and no such releases or waivers will be pleaded by Seller or Buyer in any action or proceeding. SELLER'S INFORMATION No specifications, drawings, models, samples, tools, apparatus, computer programs, technical information or data, written, oral or otherwise, furnished by Seller to Buyer under this Contract or in contemplation hereof will be considered by Seller to be confidential or proprietary. SEVERABILITY If any provision of this Contract is determined to be invalid, such invalidity will not invalidate the entire Contract, but rather the entire Contract will be construed as if it did not contain the particular invalid provision(s), and the rights and obligations of Seller and Buyer will be construed and enforced accordingly. SURVIVAL OF OBLIGATIONS Seller's obligations under this Contract which by their nature would continue beyond the Services termination or expiration hereof, including, by way of illustration only and not limitation, those in the clauses entitled COMPLIANCE WITH LAWS, INFRINGEMENT, LIABILITY, PUBLICITY, RELEASES VOID, SEVERABILITY, USE OF INFORMATION and [* Confidential treatment will be requested], will survive the termination or expiration of this Contract. TAXES In the event Buyer is liable for excise taxes or sales taxes collected by Seller on the Services, Seller agrees to bill such taxes as separate items, listing each tax jurisdiction involved. Buyer will have the right to require Seller to contest with the imposing jurisdiction, at Buyer's expense, any taxes or assessments which Buyer may deem to be improperly levied. Seller further agrees, on request of Buyer, to furnish statements evidencing that taxes and assessments for which Buyer is responsible RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 22 Southwestern Bell Telephone Contract No. C2703F0 Page 22 of 23 hereunder have been paid. However, Seller will not bill for taxes in any situation where Buyer has provided Seller with either a Direct Payment Exemption Certificate or a Sales Tax Exemption Certificate. TERMINATION Buyer may terminate this Contract in whole or in part at any time by giving Seller at least thirty (30) days' prior written notice. Upon termination, Buyer agrees to pay Seller all amounts due for Services accepted by Buyer up to the effective date of termination, which payment will constitute a full and complete discharge of Buyer's obligations to Seller hereunder. TIMELY PERFORMANCE If Seller learns of anything that might prevent the timely performance of the Services. Seller will immediately notify Buyer of all relevant information concerning the potential delay. USE OF INFORMATION Any specifications, drawings, models, samples, tools, apparatus, computer programs, technical or business information or data, written, oral or otherwise ("Information"), furnished to Seller under this Contract or in contemplation hereof will remain Buyer's property, and all copies thereof, in written, graphic or other tangible form, will be returned to Buyer upon request. Seller agrees to keep Information confidential in performing under this Contract and not use same for any other purpose except upon such terms as may be agreed by Seller and Buyer in writing. RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 23 Southwestern Bell Telephone Contract No. C2703F0 Page 23 of 23 WORK DONE BY OTHERS If any part of the Services is dependent upon work done by others, Seller agrees to inspect such work and promptly report to Buyer any defect that renders same unsuitable for Seller's proper performance hereunder. Seller's silence will constitute approval of such other work as being fit, proper and suitable for Seller's performance of the Services. Seller will be completely responsible for all persons furnished by Seller working in harmony with all others when working on Buyer's premises. WITNESS/SIGNATURE BLOCK IN WITNESS WHEREOF, the foregoing Contract has been executed by authorized representatives of the parties hereto, in duplicate, as of the dates set forth below. Seller Accepted: Buyer Accepted: Southwestern Bell Telephone Company By: By: ----------------------------------------- Title: Title: -------------------------------------- Date: Date: --------------------------------------- RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 24 AMENDMENT NO. 4 TO CONTRACT NO. C2703F0 This AMENDMENT NO. 3 TO CONTRACT NO. C2703F0 is made and entered into as of the 1st day of July, 1994 by and between World Wide Technology, Incorporated, a Missouri corporation ("Seller"), and Southwestern Bell Telephone Company, a Missouri corporation ("Buyer"). WITNESSETH: WHEREAS, Seller and Buyer entered into Contract No. C2703F0, on October 26, 1990 (the "Contract"); and WHEREAS, said Contract has heretofore been amended by Amendment Nos. 1-2, dated November 4, 1991 and April 22, 1993 respectively, and WHEREAS, Seller and Buyer desire to further amend the Contract as hereinafter contained, the parties hereto agree as follows: Now, THEREFORE, in consideration of the premises and the covenants hereinafter contained, the parties hereto agree as follows: 1. Contract Term. The term of the Contract set forth in Clause 1, MATERIAL, is hereby extended through June 30, 1997. 2. [* Confidential treatment will be requested] RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 25 Contract No. C2703F0 Amendment No. 3 Page 2 of 2 3. The following CLAUSE 40 is hereby added as follows: CLAUSE 40. SYNOPTICS EQUIPMENT-STATEMENT OF WORK As provided in seller's response to Request for Quotation 94-058-CV Seller agrees to provide services for Buyer's Synoptics Material. A detailed description of specific services is included in Appendix B, attached hereto and by this reference made a part hereof. 4. No Other Changes. In all other respects, the Contract, as heretofore amended, will remain unchanged and the parties hereby reaffirm the terms and provisions thereof. IN WITNESS HEREOF, Seller and Buyer have caused this Amendment No. 3 to Contract C2703F0 to be executed in duplicate counterparts, each of which will be deemed to be an original instrument, as of the date first above written. WORLD WIDE TECHNOLOGY, SOUTHWESTERN BELL INCORPORATED TELEPHONE COMPANY ("Seller") ("Buyer") By: /s/ David L. Steward By: /s/ Chris Vilcinshas ----------------------------------------- --------------------- Title: President Title: Contract Manager -------------------------------------- -------------------- Date: 7-22-94 Date: 7-18-94 ------------------------------- ----------- RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 26 Contract No. C2703F0 Amendment No. 4 Appendix A Page 1 of 3 * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 27 Contract No. C2703F0 Amendment No. 4 Appendix A Page 2 of 3 * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 28 Contract No. C2703F0 Amendment No. 4 Appendix A Page 3 of 3 RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 29 Contract No. C2703F0 Amendment No. 3 Appendix B Page 1 of 4 STATEMENT OF WORK SYNOPTICS EQUIPMENT EQUIPMENT ACQUISITION Seller will furnish to Buyer Synoptics equipment for new orders in no longer than 5 (five) working days from receipt of Buyer's Purchase Order. In cases of emergency Seller will attempt to meet Buyer's requested date. * Confidential treatment requested RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 30 Contract No. C2703F0 Amendment No. 3 Appendix B Page 2 of 4 * Confidential treatment requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 31 Contract No. C2703F0 Amendment No. 3 Appendix B Page 3 of 4 * Confidential treatment requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 32 Contract No. C2703F0 Amendment No. 3 Appendix B Page 4 of 4 * Confidential treatment will be requested RESTRICTED - PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 33 Contract No. C2703F0 Amendment No. 4 Page 1 of 2 AMENDMENT NO 4 TO CONTRACT NO. C2703F0 This AMENDMENT NO. 4 TO CONTRACT NO. C2703F0 is made and entered into as of the 29th day of May, 1996 by and between World Wide Technology, Incorporated, a Missouri corporation ("Seller"), and Southwestern Bell Telephone Company, a Missouri corporation ("Buyer"). WITNESSETH: WHEREAS, Seller and Buyer entered into Contract No. C2703F0, on October 26, 1990 (the "Contract"), and WHEREAS, said Contract has heretofore been amended by Amendment Nos. 1-3, dated November 4, 1991, April 22, 1993 and July 22, 1994 respectively, and WHEREAS, Seller and Buyer to desire to further amend the Contract as hereinafter contained, the parties hereto agree as follows: Now, THEREFORE, in consideration of the premises and the covenants hereinafter contained, the parties hereto agree as follows: 1. Insert the following clause to Contract No. C2703F0: "RESALE OF MATERIAL Seller hereby agrees that the rights of Buyer hereunder, including but not limited to Buyer's rights under the clauses herein entitled "INFRINGEMENT", "LIABILITY", and (* Confidential treatment requested) and Seller's representations and warranties will inure to the benefit of Buyer's customers of the MATERIAL. Seller further agrees to assume sole responsibility, as between Buyer and Seller, for resolving any claim brought by any such customer against Buyer which is attributable to Seller's failure to promptly deliver MATERIAL; breach of warranty; design defect; negligence; products liability; patent, trademark, copyright or other infringement, or any other claim, whether similar or not, RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 34 Contract No. C2703F0 Amendment No. 4 Page 2 of 2 attributable to the MATERIAL or the acts or omissions of Seller in furnishing MATERIAL hereunder (collectively, the "Claims"). Seller will defend, indemnify and hold Buyer harmless from and against any loss, liability, damage or expense (including attorneys' fees and court costs) arising out of or resulting from any Claim. Buyer agrees to promptly notify Seller of any Claim and cooperate with Seller, upon request and at Seller's expense, in every reasonable way to facilitate the defense thereof. Buyer, at its sole discretion, will determine the extent to which it will market, advertise, promote or otherwise offer the MATERIAL to its customers. 2. No Other Changes. In all other respects, the Contract, as heretofore amended, will remain unchanged and the parties hereby reaffirm the terms and provisions thereof. IN WITNESS HEREOF, Seller and Buyer have caused this Amendment No. 4 to Contract No. C2703F0 to be executed in duplicate counterparts, each of which will be deemed to be an original instrument, as of the date first above written. WORLD WIDE TECHNOLOGY, SOUTHWESTERN BELL INCORPORATED TELEPHONE COMPANY ("Seller") ("Buyer") By: /s/ By: ------------------------------------------ ------------------------------- Title: President Title: Contract Manager --------------------------------------- ------------------------------- Date: June 4, 1996 Date: May 30, 1996 ---------------------------------------- ------------------------------- RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 35 Contract No. C2703F0 Amendment No. 5 Page 1 of 1 AMENDMENT NO. 5 TO CONTRACT NO. C2703F0 This AMENDMENT NO. 5 TO CONTRACT NO. C2703F0 is made and entered into as of the thirtieth day of June 1997 by and between World Wide Technology, Inc., a Missouri Corporation ("Seller"), and Southwestern Bell Telephone Company, a Missouri corporation ("Buyer"). WITNESSETH: ----------- WHEREAS, Seller and Buyer entered into Contract No. C2703F0, on October 26, 1990 (the "Contract"); and WHEREAS, said Contract has heretofore been amended by Amendment Nos. 1 thru 4, dated November 4, 1991, April 22, 1993, July 22, 1994 and April 4, 1996 respectively; and WHEREAS, Seller and Buyer desire to amend the Contract as hereinafter set forth; Now, THEREFORE, in consideration of the premises and the covenants hereinafter contained, the parties hereto agree as follows: 1. Contract Term. The term of the Contract set forth in Clause 1, MATERIAL, is hereby extended through June 30, 2000. 2. No Other Changes. In all other respects, the Contract will remain unchanged and the parties hereby reaffirm the terms and provisions thereof. IN WITNESS WHEREOF, Seller and Buyer have caused this Amendment No. 5 to Contract No. C2703F0 to be executed in duplicate counterparts, each of which will be deemed to be an original instrument, as of the date first above written. WORLD WIDE TECHNOLOGY, SOUTHWESTERN BELL TELEPHONE INC. COMPANY /s/ Christine Beggs - ------------------------------------ --------------------------- ("Seller") ("Buyer") By: /s/ David Steward By: --------------------------------- Name: David Steward Name: Christine Beggs C.P.M. ------------------------------- ----------------------------- Title: President Title: Contract Manager ------------------------------- ----------------------------- Date: 6/30/97 Date: 6-26-97 ------------------------------- ---------------- RESTRICTED PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 36 Contract No. C2703F0 Amendment No. 6 Page 1 of 7 AMENDMENT NO. 6 TO CONTRACT NO. C2703F0 This AMENDMENT NO. 6 TO CONTRACT No. C2703F0, effective upon signature of both parties, is between World Wide Technology Inc., a Missouri Corporation ("Seller"), and Southwestern Bell Telephone Company, a Missouri Corporation ("Buyer"). WITNESSETH WHEREAS, Seller and Buyer entered into Contract No. C2703F0, on October 26, 1990 (the "Contract"), and WHEREAS, said contract has heretofore been amended by Amendment Nos. 1 through 5 dated November 4, 1991, April 22, 1993, July 22, 1994, April 4, 1996 and Jun 30, 1997 respectively, and WHEREAS, in consideration of the premises and covenants hereinafter contained, the parties hereto agree as follows: I. ADD DEFINITIONS "Cancel" or "Cancellation" means the ending of this Agreement or an Order by a non-defaulting party, where the other party is in default of an obligation under this Agreement or any Order. Upon Cancellation, except as otherwise provided in this Agreement, the non-defaulting party may exercise such remedies against the defaulting party as are available under this Agreement, at law, or in equity. "Delivery Date" means the date on which all items are delivered to the locations specified in the applicable Order. The initially scheduled Delivery Date for a Product is stated in the applicable Order and is subject to change as provided in this Agreement. "Information" means ideas, concepts, trade secrets, techniques, specifications, drawings, sketches, models, samples, tools, computer programs, technical information, and other confidential business, customer or personnel information or data, whether written, oral, or otherwise. "Laws and Regulations" means all applicable federal, state and local laws, ordinances, regulations, codes, rules, orders and requirements of all duly RESTRICTED-PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 37 Contract No. C2703F0 Amendment No. 6 Page 2 of 7 constituted governmental authorities, including the procurement of permits and licenses when needed and environmental laws such as California Proposition 65. "Order" means each Order executed hereunder ordering Products and/or Services. Orders shall be deemed to incorporate (1) the provisions of this Agreement as it may be from time to time amended, (2) the Specs applicable to such Order, and (3) any subordinate documents attached to or referenced in this Agreement or the Order. Each such Order shall be deemed to be a separate and independent agreement between the parties with respect to the subject matter thereof and shall be substantially in the form set forth in the applicable Exhibit attached hereto and made a part hereof. "Performance Date" means the Delivery Date for Delivery Software or the Installation Date for Installation Software as specified in the applicable Order. "Personnel" means Supplier's employees, subcontractors, or agents performing Services under this Agreement. "Products" means Equipment, Software and any other products provided by Seller hereunder to SBC. "Services" means all services described under the applicable Order and provided by Seller hereunder to SBC, including but not limited to training, installation of the Products, maintenance services and preparation of documentation. "Software" means the Standard Software which is provided hereunder by Seller to SBC. "Specs" means (1) the Software publisher's published specifications, (2) Seller's published specifications, and (any other specifications for the Products and Services which are attached hereto or referenced in and made a part of the applicable Order. "Standard Software" means the computer programs which are listed as Standard Software in the applicable Order and licensed hereunder by SBC from Seller. "Seller's Standard Charges" means Seller's prevailing rates and charges for Products as determined from price lists, less any discounts applicable thereto, in effect at the time when the work was performed. "Terminate" or "Termination" means the ending of this Agreement or any Order by a party, for any reason, with or without cause, and without liability to the other party. RESTRICTED-PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 38 Contract No. C2703F0 Amendment No. 6 Page 3 of 7 [* Confidential treatment will be requested] II. REPLACE CLAUSES 1. MATERIAL The contract pertains to the purchases of such quantities of printers, modems, terminals, and Software of Seller's offering ("Material") as may by ordered by Buyer for shipment during the period between November 15, 1998 through December 31, 2000. 2. NOTICES Except as otherwise provided in this Contract, or applicable Order, all notices or other communications hereunder shall be deemed to have been duly given when made in writing, and either 1) delivered in person, 2) delivered to an agent, such as an overnight or similar delivery service, or 3) deposited in the United States Mail, postage prepaid, or 4) facsimile transmission, and addressed as follows: To: World Wide Technology Contract Manager/ Telco Business Unit Mark Catalano - Director 127 E. Welden Parkway St. Louis, Missouri 63043 To: Southwestern Bell Telephone Company Mark Michnoik Contract Manager 1010 Pine Street, Rm. 9-E-67 St. Louis, Missouri 63101 The address to which notices or communications may be given by either party may be changed by written notice given by such party to the other pursuant to this paragraph entitled "Notices". 4. AFFILIATED COMPANIES Seller agrees that an Affiliate may place Orders with Seller which incorporate the terms and conditions of this Agreement, and that the term "Buyer" shall be deemed to refer to an Affiliate when an Affiliate places an Order with Seller incorporating the terms and conditions of this Agreement. An Affiliate will be responsible for its own obligations, RESTRICTED-PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 39 Contract No. C2703F0 Amendment No. 6 Page 4 of 7 including, but not limited to, all charges incurred in connection with such Order. The parties agree that nothing in this Agreement will be construed as requiring Buyer to indemnify Seller, or to otherwise be responsible, for any acts or omissions of an Affiliate, nor shall anything in this Agreement be construed as requiring an Affiliate to indemnify Seller, or to otherwise be responsible, for the acts or omissions of Buyer. The parties agree that the term "Affiliate" includes (1) a company, whether incorporated or not, which owns, directly or indirectly, a majority interest in either party (a "parent company"), and (2) a company, whether incorporated or not, in which a 5% or greater interest is owned, either directly or indirectly, by: (i) a party to this Agreement, or (ii) a parent of a party to this Agreement. III. ADD NEW CLAUSES * Confidential treatment will be requested 40. ACCEPTANCE OR REJECTION Buyer reserves the right to accept or reject Materials after delivery at the location designated in the applicable Order. If, prior to acceptance by Buyer, any of the Materials are found to not be in strict conformance to this Contract and the applicable Order, Buyer shall have the right: (a) to reject the Materials and cancel this Contract and any applicable Order or (b) at its option in the case of Materials, require that such Materials be repaired or replaced promptly at Seller's risk and expense (including freight charges). Acceptance of Materials by Buyer shall be without prejudice to Buyer's right to revoke acceptance pursuant to the Uniform Commercial Code. 41. TITLE Software is furnished to Buyer under a nonexclusive license, and title to such Software is not thereby transferred to Buyer. 42 RISK OF LOSS a. If Software is lost or damaged prior to the Performance Date, or if it is lost or damaged at any time due to the negligence or willful misconduct of Seller or its contractors or agents, Seller shall promptly replace it at no additional charge to Buyer. b. Except as otherwise provided in Section a. above, if the Software is lost or damaged at any time after the Performance Date, Seller shall promptly replace it and Buyer shall pay only the cost of reproduction and shipment or delivery. RESTRICTED-PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 40 Contract No. C2703F0 Amendment No. 6 Page 5 of 7 43. MODIFICATION a. Buyer may add to, delete from or modify the Software to meet Buyer's particular requirements. Title to any such addition or modification shall remain in Buyer. b. Buyer may merge the Software with other computer programs to generate a shared program library. After Cancellation or Termination of the license for the Software, such Software shall be removed from such shared program library and shall be destroyed. c. Any Software modification made by Seller at the request and expense of Buyer shall be governed by the provisions of a separate custom software development agreement between the parties. 44. PROGRAM PROTECTION AND SECURITY a. Buyer shall not provide or otherwise make available the Software in any form to any third party, except as specified in this Agreement. b. Buyer shall take appropriate action by instruction, agreement or otherwise with the persons permitted access to the Software to satisfy the obligations under this Contract with respect to use, protection and security of the Software. c. Buyer's rights of disclosure under this Agreement shall include the right to provide the Software or other Information of Seller to Buyer's agents and contractors who have a need for it in connection with the performance of services for Buyer. 45. YEAR 2000 WARRANTY 1. Seller warrants that all Software and Firmware, including any third party Software, which is licensed to Buyer hereunder prior to, during, or after the calendar year 2000, includes at no additional cost to Buyer, year 2000 capability. For the purpose of this license, year 2000 capability means that the Software and Firmware will: (1) Read, compute, store, process, display and print data involving dates, including single century and multi-century formulas, and will not cause computational, display, storage or other errors resulting from the inability to accurately or correctly handle dates, including Year 2000 and February 29, 2000; (2) Include the indication of century in all date-related user interface functionality, data fields, and generated code; and (3) Be interoperable with other software used by Buyer which may deliver records to such Software and Firmware, receive records from such Software and Firmware or interact with such Software and Firmware in the course of processing dates. RESTRICTED-PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 41 Contract No. C2703F0 Amendment No. 6 Page 6 of 7 2. Buyer acknowledges that Software and Firmware Products licensed by Seller hereunder may require modification in order to correctly process dates for Year 2000 and beyond. In addition, such modifications may be required in order for Seller's Software and Firmware Products to function correctly with Buyer's data and in accordance with the applicable Specifications therefor. Seller agrees to develop and implement such required changes in its Software and Firmware Products licensed hereunder by Buyer in accordance with a schedule to be mutually agreed to between Seller and Buyer, but which, at a minimum, shall provide Buyer with sufficient time to adequately test such modified Software and Firmware prior to mandatory implementation of such modified Software and Firmware Products. Seller agrees that there shall be no additional charges to Buyer for such modifications or the modified Software and Firmware Products. 46. QUIET ENJOYMENT Buyer shall be entitled during the applicable lease or license term to possess or use any leased or licensed Products without disturbance by Seller or anyone claiming by or through Seller, provided only that Buyer is not in material default of its obligations under the applicable Order. Seller represents that the applicable Order is not the subject or subordinate to any right of Seller's creditors, or if such subordination exists, that the agreement or instrument creating the same provides for nondisturbance of Buyer, provided only that Buyer is not in default of its obligations under the applicable Order. IV. NO OTHER CHANGES In all other respects, the Contract will remain unchanged and the parties hereby reaffirm the terms and provisions thereof. IN WITNESS WHEREOF, Seller and Buyer have caused this Amendment to Contract No. C2703F0 to be executed in duplicate counterpart, each of which will be deemed to be an original instrument, as of the date of execution. (Signature Page Follows) RESTRICTED-PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 42 Contract No. C2703F0 Amendment No. 6 Page 7 of 7 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized representatives. WORLD WIDE TECHNOLOGY, "SELLER" By: /s/ David L. Steward --------------------- Print Name: David L. Steward --------------------- Title: CEO ---- Date Signed: 12-14-98 ---------- SOUTHWESTERN BELL TELEPHONE COMPANY "BUYER" By: /s/ Norma Stephenson ------------------------------ Print Name: Norma Stephenson ------------------------------ Title: Supervising Contract Manager ------------------------------ Date Signed: 11-20-98 ---------- RESTRICTED-PROPRIETARY INFORMATION The information contained herein is for use by authorized employees of the parties hereto only and is not for general distribution within or outside their respective companies. 43 Contract No. C2703F0 Amendment No. 6 Attachment A Page 1 of 2 * Confidential treatment will be requested 44 Contract No. C2703F0 Amendment No. 6 Attachment A Page 2 of 2 * Confidential treatment will be requested EX-10.20 19 GENERAL AGREEMENT B/W SBC OPERATIONS, INC & REGIS. 1 Ex. 10.20 GENERAL AGREEMENT # 98005906 SBC OPERATIONS, INC. (BUYER) & WORLD WIDE TECHNOLOGY, INC. (SELLER) INDEX
PAGE PAGE ---- ---- 32. Acceptance-Entire Agreement 2 63. Limitation of Liability 18 33. Access 2 64. Material Reliability 18 34. Affiliates 3 65. Modification 18 35. Amendments and Waivers 3 66. MBE/WBE-DVBE Participation Plans and 36. Assignment 4 Reports 19 37. Bar-coding 4 67. MME/WBE/DVBE CANCELLATION CLAUSE 19 38. Breach of Agreement 4 68. Non-Exclusive Market Rights 20 39. Cancellation and Termination 4 69. Non-Waiver 21 40. Changes and Suspensions 6 70. Notices 21 41. Complaints 6 71. Order Acknowledgment 21 42. Compliance With Laws 7 72. Plant and Work Rules 22 43. Conflict of Interest 7 73. Publicity 22 44. Continuing Availability 7 74. Purchase Orders 22 45. Cure 8 75. Quality Assurance 23 46. Disaster Availability 8 76. Records and Audits 25 47. Electronic Data Interchange (EDI) 8 77. Registration 26 48. Entire Agreement 9 78. Releases Void 26 49. Force Majeure 9 79. Severability 26 50. Governing Law 10 80. Software Risk of Loss 26 51. Government Contract Provisions 10 81. Survival of Obligations 26 52. Hazardous Materials and Regulated 82. Taxes 27 Substances 10 83. Technical Support 28 53. Independent Contractor 12 84. Termination 28 54. Information 13 85. Terms of Agreement 28 55. Infringement 14 [* Confidential treatment requested] 56. Insignia 15 87. Title and Risk of Loss 28 57. Installation/Cutover Assistance 16 88. Universal Design 29 58. Insurance 16 [* Confidential treatment requested] 59. Liability 17 90. Work Done By Others 30 60. Licenses 17 91. Year 2000 Warranty 30 61. License Fee 18 62. License Term 18
Exhibit A Executive Orders and Associated Regulations Exhibit A1 Seller's M/WBE-DVBE Plan Exhibits B Buyer's Purchase Order Exhibit B1 Results Reports Exhibits C OEM Insurance Exhibit D QPS Document if Applicable *Certain material has been omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS GENERAL AGREEMENT SBC OPERATIONS, INC. (BUYER) 175 E. Houston San Antonio, Texas 78205 And WORLD WIDE TECHNOLOGY, INC. (WWT-SELLER) 127 Weldon Parkway St. Louis, Missouri 63043-3101 PREAMBLE This Agreement effective upon the date of execution by the last party, is between SBC Operations, Inc. (BUYER) a Delaware corporation, for itself and its affiliated companies (hereinafter Buyer) and World Wide Technology, Inc. (Seller), a Missouri corporation. This Agreement outlines the general terms and conditions for the provision of Material/ Services by Seller to Buyer. Specific contracts for the purchase of Material/Services will be as negotiated between Buyer and Seller. Such subordinate contracts to this General Agreement (98005906) shall incorporate all the terms and conditions of this General Agreement unless specifically addressed otherwise in such subordinate contracts. Buyer and Seller agree that the term "Buyer" includes any of Buyer's affiliates, and the term "Seller" shall mean either World Wide Technology, Inc. or its Original Equipment Manufacturer (OEM) supplier, as applicable. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 1 3 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS ACCEPTANCE--ENTIRE AGREEMENT Acceptance of this offer to purchase by acknowledgment, shipment or other performance will be unqualified, unconditional and subject and expressly limited to the terms and conditions of this Agreement. All previous offers by Seller are hereby rejected and Buyer will not be bound by terms additional to or different from those contained herein that may appear in Seller's quotation, acknowledgment, invoice or in any other communication from Seller, unless such terms are expressly agreed to in a written instrument signed by Buyer. Acceptance of MATERIAL or services, payment or any inaction by Buyer will not constitute Buyer's consent to or acceptance of any such additional or different terms, nor will estimates furnished by Buyer constitute commitments. Upon acceptance, the terms contained in this Agreement will constitute the entire agreement between Seller and Buyer with regard to the subject matter hereof and supersede all prior oral and written communications, agreements and understandings of the parties, if any, with respect thereto. THIS AGREEMENT MAY NOT BE MODIFIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED ON BEHALF OF BOTH PARTIES BY THE REPRESENTATIVES WHO SIGN THIS AGREEMENT OR THEIR SUCCESSORS IN TITLE AND AUTHORITY. If either representative is no longer employed by Buyer/Seller or has been demoted, or if the approval level no longer exists, a manager at a level equal to or exceeding the original level must execute revisions to this Agreement. This Agreement may be executed in one (1) or more counterparts, all of which will constitute one and the same instrument. ACCESS Buyer's Premises: 1. Seller shall when appropriate have reasonable access to Buyer's premises during normal business hours and at such other times as may be agreed upon by the parties in order to enable Seller to perform its obligations under this Agreement. Seller shall coordinate such access with Buyer's designated representative prior to visiting such premises. Seller assures Buyer that only persons employed by Seller or subcontractor by Seller will be allowed to enter Buyer's premises. If Buyer requests Seller or its Subcontractor to discontinue furnishing any person provided by Seller or its Subcontractor from performing work on Buyer's premises, Seller shall immediately comply with such request. Such person shall leave Buyer's premises promptly and Seller shall not furnish such person again to perform work on Buyer's premises without Buyer's written consent. 2. Buyer may require Seller or its subcontractor employees to exhibit identification credentials, which Buyer may issue in order to gain access to Buyer's premises for the PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 2 4 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS performance of Services hereunder. If, for any reason, any Seller's or Seller's subcontractor employees are no longer performing such Services, Seller shall immediately inform Buyer. Notification shall be followed by the prompt delivery to Buyer of the identification credentials, if issued by Buyer, or a written statement of the reasons why said identification credentials cannot be returned. 3. Seller shall ensure that its personnel and subcontractor perform work which conforms to Buyer's practices and handbooks to protect Material, buildings or structures and to Perform Services with care and due regard for the safety, convenience and protection of Buyer, its employees and property, and members of the public. 4. In the event of theft or loss of property attributable to Seller, Seller shall replace the property and/or reimburse Buyer for replacement value of the item. 5. Seller shall be responsible for ensuring that all persons furnished by Seller work harmoniously with all others when on Buyer's premises. AFFILIATES Seller agrees that an Affiliate may place Orders with Seller which incorporate the terms and conditions of this Agreement, and that the term "Buyer" shall be deemed to refer to an Affiliate when an Affiliate places an Order with Seller incorporating the terms and conditions of this Agreement. An Affiliate will be responsible for its own obligations, including but not limited to, all charges incurred in connection with such Order. The parties agree that nothing in this Agreement will be construed as requiring Buyer to indemnify Seller, or to otherwise be responsible, for any acts or omissions of an Affiliate, nor shall anything in this Agreement be construed as requiring an Affiliate to indemnify Seller, or to otherwise be responsible, for the acts or omissions of Buyer. The parties agree that the term "Affiliate" includes (1) a company, whether incorporated or not, which owns, directly or indirectly, a majority interest in either party (a "parent company"), and (2) a company, whether incorporated or not, in which a 5% or greater interest is owned, either directly or indirectly, by: (i) a party to this Agreement, or (ii) a parent of a party to this Agreement." AMENDMENTS AND WAIVERS This Agreement may be amended or modified only by a written document signed by the authorized representative of the party against whom enforcement is sought. No course of dealing or failure of either party to strictly enforce any term, right or condition of this Agreement shall be construed as a general waiver or relinquishment of such term, right or condition. Waiver by either party of any default shall not be deemed a waiver of any other default. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 3 5 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS ASSIGNMENT Neither party hereto may assign, subcontract or otherwise transfer it's rights or obligations under this Agreement except with the prior written consent of the other party hereto, which consent will not be unreasonably withheld; provided, however, Buyer will have the right to assign this Agreement to any present or future AFFILIATE, SUBSIDIARY OR PARENT CORPORATION of the Buyer, without securing the consent of Seller and may grant to any such assignee the same rights and privileges Buyer enjoys hereunder. Any attempted assignment not assented to in the manner prescribed herein, except an assignment confined solely to money due or to become due, will be void. It is expressly agreed that any assignment of money will be void if (a) Seller fails to give Buyer at least thirty (30) days prior written notice thereof, or (b) such assignment imposes or attempts to impose upon Buyer additional costs or obligations in addition to the payment of such money or (c) denies, alters or attempts to alter any of Buyer's rights. BAR-CODING Seller and/or its OEM supplier is committed to work with Buyer to incorporate barcoding of equipment and shipping containers and packages, as a standard requirement for doing business with Buyer. Seller and/or its OEM supplier shall adhere to the guidelines and specifications set forth by the Telecommunications Industry Forum (TCIF), tailored by Buyer, as industry standards are established through the TCIF for the expanded application of bar-coding. BREACH OF AGREEMENT In the event Seller is in breach or default of any term, condition or covenant of this Agreement, and said breach or default continues for a period of ten (10) days after the giving of written notice thereof, then, in addition to all other rights and remedies available at law or in equity, Buyer will have the right to cancel this Agreement. CANCELLATION AND TERMINATION 1. Cancellation for Default: a. If Seller is in material default of any of its obligations under this Agreement or applicable Orders and such default continues for ten (10) days after written notice thereof is given by Buyer, then in addition to all other rights and remedies, at law or in equity, Buyer may cancel this Agreement and/or any Orders which may be affected by such default without any obligation or liability on the part of Buyer whatsoever. b. Notwithstanding this paragraph "1", additional provisions for Cancellation of Orders hereunder are set forth in this Agreement. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 4 6 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS c. Buyer shall have the right to retain or return any Material already received and accepted; provided, however, if Buyer elects to return any Material, Seller shall reimburse Buyer the cost of shipping any returned Material and amounts, if any, previously paid by Buyer for such Material. Seller shall bear all expenses for removal and return of such Materials. 2. Cancellation and Termination of Orders: a. Cancellation: If Buyer cancels any Order or rejects any Materials pursuant to any provision of this Agreement or applicable Laws and Regulations, Seller shall, at Buyer's request, but at its expense, promptly remove the affected Materials from Buyer's site, restore Buyer's site to its original condition, refund to Buyer any amounts previously paid by Buyer for such Materials and reimburse Buyer for any costs Buyer occurred to remove and return such Materials. Upon removal and restoration of the Material and Buyer's receipt of any such reimbursement and refund, title to any such Materials which had previously passed to Buyer shall revert to Seller. b. Termination: Materials/Services: Buyer may at any time terminate any Order in whole or in part upon written notice to Seller. In such event, Seller shall be entitled to reasonable Termination charges consisting of its actual and direct costs incurred to provide the Materials and Services ordered by Buyer but no more than a percentage of the work performed or Materials delivered prior to Termination, minus salvage or resale value of the work terminated. If requested, Seller agrees to substantiate such costs with proof satisfactory to Buyer. In no event shall the Termination charges on any Order hereunder exceed the Order price. No Termination charges shall apply to Materials not specially manufactured for Buyer pursuant to any Order which is terminated at least thirty (30) days prior to the required delivery date. Buyer shall not be responsible for any work performed nor for any costs incurred by Seller, Seller's Sellers, or Seller's subcontractors after Seller has received the notice of Termination. After the receipt of Buyer's payment for any such terminated Services, Seller shall deliver the physical embodiments, if any, of such Services which have been completed up to the date of Buyer's Termination. The foregoing Termination charges state the entire liability of Buyer for Termination for convenience by Buyer of any Order hereunder. 3. Partial Cancellation and Termination: PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 5 7 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS Where a provision of this Agreement or the applicable Laws and Regulations permit Buyer to Terminate or Cancel an Order, such termination or cancellation may, at Buyer's option, be either complete or partial. In the case of a partial Termination or Cancellation Buyer may, at its option, accept a portion of the Materials or Services covered by an Order and pay Seller for such Materials or Services at the unit prices set forth in such Order. The right to cancel an Order shall also include the right to cancel any other related Order. CHANGES AND SUSPENSIONS a) Buyer may give notice to Seller at any time before complete delivery is made under any Order, or make changes within the general scope of such Order, including changes to quantities, drawings, designs or specifications. In addition, Buyer may, by notice to Seller, suspend, in whole or in part, the delivery of Materials and the performance of Services. If Buyer directs any such b) change or suspension, the parties shall agree upon any necessary adjustments in prices or dates and Buyer shall issue a revised Order reflecting such adjustments. c) Seller and/or its OEM supplier may not, without Buyer's prior written consent, make any changes whatsoever with respect to the Materials or Services specified in any Order. COMPLAINTS Buyer reserves the right to notify Seller in cases where Buyer has identified current or potential problems or service area concerning the operation, maintenance, engineering, installation or design of Material furnished hereunder. Whenever Buyer exercises such right, Seller and/or its OEM supplier agrees to: (a) Accept such notice (hereinafter referred to as an "Engineering Complaint") and handle it in accordance with Bell Communications Research, Inc. ("Bellcore") Generic Requirements GR-230-CORE entitled "Generic Requirements for Engineering Complaints". (b) Acknowledge receipt of such Engineering Complaint and advise Buyer of Seller's proposed organization responsible for resolving it within ten (10) working days of Seller's receipt thereof. (c) Resolve such Engineering Complaints within ninety (90) days calendar days of the date of Buyer's notice, unless the parties mutually agree upon a later date. If unable to resolve an Engineering Complaint within said ninety (90)-day period, Seller will issue an "interim report" as defined in GR-230-CORE. Any revisions, amendments, and or successors to GR-230-CORE will become effective and thereafter applicable under this PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 6 8 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS Agreement thirty (30) days after such revision is released by Buyer to Seller. Buyer and Seller will attempt to negotiate a resolution to any objections of said revisions by Seller. (d) Furnish to Buyer a monthly report of the status of open Engineering Complaints, in a mutually agreed upon medium, together with a proposed schedule for their resolution. (e) Notify Buyer in writing when an Engineering Complaint has been resolved. COMPLIANCE WITH LAWS Seller and/or its OEM supplier shall comply with the provisions of the Fair Labor Standards Act, the Occupational Safety and Health Act and all other applicable federal, state, county and local laws, ordinances, regulations and codes, including, but not limited to, the procurement of permits, certificates, approvals, inspections and licenses when needed, in the performance of this Agreement. Seller and/or its OEM supplier further agrees, during the term hereof, to comply with all applicable Executive and Federal regulations as set forth in "Executive Orders and Associated Regulations", a copy of which is attached hereto as Exhibit A, and by this reference made a part hereof. Seller and/or its OEM supplier shall defend, indemnify and hold Buyer harmless from and against any loss, damage, liability or expenses (including attorneys' fees and court costs) that may be sustained by reason of Seller's failure to comply herewith. CONFLICT OF INTEREST Seller represents and warrants that no officer, director, employee or agent of Buyer has been or will be employed, retained or paid a fee, or otherwise has received or will receive any personal compensation or consideration, by or from Seller or any of Seller's officers, directors, employees or agents in connection with the obtaining, arranging or negotiation of this Agreement or other documents or agreements entered into or executed in connection herewith. CONTINUING AVAILABILITY a) Seller and/or its OEM supplier agrees to offer to sell to Buyer for a period of ten (10) years after the Termination, Cancellation or expiration date of this Agreement, functionally equivalent additions/modifications, maintenance, replacement, and technical support services. b) If Seller fails or is unable to supply such parts or obtain another source of supply for Buyer, then such inability shall be considered noncompliance with this Section and, in addition to whatever other rights and remedies Buyer may have at law or in equity, Seller shall be obligated to provide Buyer, without obligation or charge, the "technical information" or any other rights required so that Buyer can have manufactured or can obtain such parts from other sources. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 7 9 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS c) The "technical information" includes, by example and not by way of limitation: 1) manufacturing drawings and Specifications of raw materials and components comprising such parts; 2) manufacturing drawings and Specifications covering special tooling and the operation thereof, 3) a detailed list of all commercially available parts and components purchased by Seller, disclosing the part number, name and location of the supplier and price lists for the purchase thereof. d) Seller shall provide support for System Software or System Software Features provided under this Agreement. In the event Seller refuses to provide support then Seller shall grant to Buyer a non-exclusive license, without charge, to use such System Software programs, System Software documentation and/or System Software tools and other technical information as may be required for the purpose of so maintaining the System Software and to provide for network compatibility. e) Seller shall provide Buyer advance written notification no later than two (2) years prior to the discontinuance of the manufacture or the provision of any Material hereunder. CURE Buyer will not be deemed to be in default under any of the terms of this Agreement, and Seller may not seek or attempt to enforce any remedy for any claimed default, unless Buyer fails to cure or correct same within ten (10) days following receipt of written notice thereof from Seller. DISASTER AVAILABILITY If any Material are rendered inoperative as a result of a Force Majeure emergency, Seller shall make all reasonable efforts to supply or help locate backup or replacement Material for Buyer's use. To the extent reasonable, Seller agrees to waive any delivery lead time requirements and to the extent permitted by law make replacement Material available from the facility currently producing such Material or from inventory. The price for any replacement Material will be at the current price and cost of expedited shipment. Buyer shall retain the right to accept or reject any offer by Seller to supply any replacement Material. ELECTRONIC DATA INTERCHANGE (EDI) Each party hereto may electronically transmit to or receive Orders, acknowledgments, invoicing documents or other documents mutually agreed to by Buyer and Seller, pursuant an EDI Agreement. The parties agree that Data mechanically stored by either party in the course of PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 8 10 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS business shall constitute acceptable documentation of the contents of the Data electronically transmitted by originating party. ENTIRE AGREEMENT 1. Acceptance of this Agreement with respect to the subject matter to purchase by acknowledgment, shipment or other performance will be unqualified, unconditional and subject and expressly limited to the terms and conditions of this Agreement. All previous offers by Seller are hereby rejected and Buyer will not be bound by terms additional to or different from those contained herein that may appear in Seller's quotation, acknowledgment, invoice or in any other communication from Seller, unless such terms are expressly agreed to in a written instrument signed by Buyer. Acceptance of MATERIAL or Services, payment or any inaction by Buyer will not constitute Buyer's consent to or acceptance of any such additional or different terms, not will estimates furnished by Buyer constitute commitments. The provisions of this Agreement supersede all prior oral and written quotations, communications, agreements and understandings of the parties, if any, with respect to the subject matter hereof. 2. The terms contained in this Agreement, and any Orders, including all exhibits and subordinate documents attached to or referenced in the Agreement or any Orders, will constitute the entire agreement between Seller and Buyer with regard to the subject matter hereof and supersede all prior oral and written communications, agreements and understandings of the parties, if any, with respect hereto. This Agreement may not be modified except by a written instrument signed on behalf of both parties by the representatives who sign this Agreement or their successors in title and authority. If either representative is no longer employed by Buyer/Seller or has been demoted, or if the approval level no longer exists, a manager at a level equal to or exceeding the original level must execute revisions to this Agreement. FORCE MAJEURE Neither party hereto will be held responsible for any delay or failure in performance of any part of this Agreement to the extent that such delay or failure is caused by fire, flood, explosion, war, strike, embargo, government requirement, civil or military authorities, Act of God or by the public enemy, acts or omissions of carriers, or any other cause beyond the control of Seller or Buyer. If any force majeure condition occurs, the party delayed or unable to perform will give immediate notice thereof to the other party and the party affected by the other's inability to perform may elect to: (a) Terminate this Agreement or any Order or part of either as to MATERIAL not already shipped or services not already performed. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 9 11 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS (b) Suspend this Agreement for the duration of the force majeure condition, buy or sell elsewhere MATERIAL to be bought or sold hereunder, and deduct from any commitment the quantity bought or sold or for which such commitments have been made elsewhere. (c) Resume performance hereunder once the force majeure condition ceases with an option in the affected party to extend the term of this Agreement up to the length of time the force majeure condition endured. Unless written notice to the contrary is given within thirty (30) days after such affected party is notified of the force majeure condition, option (b) above will be deemed selected. GOVERNING LAW a. IF A DISPUTE INVOLVES SOLELY PACIFIC BELL OR AFFILIATES WITH THEIR PRINCIPAL PLACE OF BUSINESS IN CALIFORNIA, THE DISPUTE SHALL BE GOVERNED BY THE LAWS OF CALIFORNIA EXCLUSIVE OF ITS CHOICE OF LAWS PROVISIONS. IN ALL OTHER CASES, THE LAWS OF THE STATE OF MISSOURI SHALL APPLY EXCLUSIVE OF ITS CHOICE OF LAWS PROVISIONS. b. THIS AGREEMENT SHALL BE CONSIDERED COMPLETED, ENTERED INTO, AND EXECUTED IN CALIFORNIA ON BEHALF OF PACIFIC, IN MISSOURI, ON BEHALF OF SWBT, AND WITH RESPECT TO AN AFFILIATE OTHER THAN PACIFIC OR SWBT, IN THE STATE IN WHICH THE AFFILIATE HAS ITS PRINCIPAL PLACE OF BUSINESS, WITHOUT REGARD TO ITS RULES REGARDING CONFLICTS OF LAW. GOVERNMENT CONTRACT PROVISIONS Orders containing a notation that the material is intended for use under government Agreements shall be subject to the then current government provisions referenced in or attached to such Orders. HAZARDOUS MATERIALS AND REGULATED SUBSTANCES A "Regulated Substance" as referenced in this clause is a generic term used to describe all materials that are regulated by the federal or any state or local government during transportation, handling and/or disposal. This includes, but is not limited to, materials that are regulated as (a) "hazardous materials" under the Hazardous Materials Act and the Control of Radioactive Contamination of the Environment Law, Title 8 of the California Administrative Code, Section 5194, pursuant to the PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 10 12 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS Hazardous Substances Information and Training Act, (b) "chemical hazards" under Occupational Safety and Health Administration (OSHA) standards, (c) "chemical substances or mixtures" under the Toxic Substances Control Act, (d) "pesticides" under the Federal Insecticide, Fungicide and Rodenticide Act, and (e) "hazardous wastes" as defined or listed under the Resource Conservation and Recovery Act and the Hazardous Waste Control Law. a. Seller and/or its OEM supplier shall comply with all applicable federal, state and local laws, ordinances, codes, regulations and orders, including any notice requirements (individually and collectively "Laws and Regulations"), regarding any Material and Service ordered hereunder which involves the handling or use of Materials or materials which consist of or contain "hazardous materials" or "chemical hazards" or "chemical substances or mixtures" or "pesticides" or "hazardous wastes". Seller shall notify Buyer and provide to Buyer all necessary notification and other information (including but not limited to OSHA Material Safety Data Sheets) at least thirty (30) days before shipping such Regulated Substances to Buyer or commencing the performance of Services for Buyer involving the handling or use of Regulated Substances. b. Notwithstanding any other provisions of this Agreement, Buyer shall have the right, but not the duty, to terminate without liability any Order for Materials or Services which involves the handling or use of Regulated Substances within thirty (30) days after such notification from Seller. Otherwise, Buyer and Seller shall cooperate concerning the acceptance by Buyer of such Regulated Substances. Seller shall mark all Materials and/or materials provided hereunder as Regulated Substances which are required by all applicable Laws and Regulations to be so marked, and shall provide assistance to Buyer of an advisory nature in the handling or use of Regulated Substances provided hereunder and the disposal of "hazardous wastes", as defined by applicable Laws and Regulations ("Hazardous Wastes"), resulting therefrom. c. Regulated Substances and/or Hazardous Wastes provided or removed hereunder shall be transported by Seller in accordance with the requirements of the applicable Laws and Regulations, including, but not limited to, those of the Department of Transportation and California Highway Patrol, governing transportation of such Regulated Substances and/or Hazardous Wastes. d. Seller and/or its OEM supplier shall provide Buyer with the same information pertaining to Materials and Services which involve the handling or use of Regulated Substances or Hazardous Wastes as Seller provides to Seller's employees or agents involved in the disposition or treatment of such Regulated Substances or Hazardous Wastes. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 11 13 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS e. Seller and/or its OEM supplier further agrees to defend indemnify and hold Buyer harmless from and against any damage, or expense (including attorneys' fees and court costs) sustained by Buyer because of Seller's noncompliance herewith. INDEPENDENT CONTRACTOR Seller hereby represents and warrants to Buyer that: a. Seller is engaged in an independent business and will perform all obligations under this Agreement as an independent contractor and not as the agent or employee of Buyer; b. Seller's personnel performing Services shall be considered solely the employee personnel of Seller and not employees or agents of Buyer, c. Seller has and retains the right to exercise full control of and supervision over the performance of the Services and full control over the employment, direction, assignment, compensation, and discharge of all personnel performing the Services; d. Seller is solely responsible for all matters relating to the payment of compensation, including payment of premium pay for overtime, of all Seller's personnel who perform Services. Seller will pay all employee compensation and related taxes and benefits from its own accounts, without regard to any dispute concerning Buyer's liability for payment to Seller under any invoice related to any Service performed by Seller; e. Seller is solely responsible for all matters relating to compliance with all employer obligations to withhold employee taxes, pay employee and employer taxes, and file payroll tax returns and information returns under local, state, and federal income tax laws, unemployment compensation insurance and state disability insurance tax laws, and social security and Medicare tax laws, and all other payroll tax laws or similar laws (all collectively hereinafter referred to as "payroll tax obligations") with respect to all Seller personnel providing Services. f. If any federal, state, or local authority including but not limited to taxing authority may claim that Buyer or any subsidiary of Buyer is or may be liable an account of any payroll, payroll tax, or benefit plan obligations, including the payment of interest or penalties, with respect to any such Seller personnel, then Seller shall: (1) cooperate fully in Buyer's defense of such claim; and (2) discloses its income tax returns, payroll tax returns, information returns and transmittals, and associated payment deposits records, canceled checks and instruments, and other such documents reasonably necessary to enable Buyer to perfect its defense of such claims; and PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 12 14 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS (2) Executes and deliver such powers of attorney or other consents as may be necessary to enable Buyer to obtain copies of such returns and other documents from the taxing and other authorities that are appropriate or helpful in order to prove compliance with tax and other legal requirements. (3) indemnifies and holds Buyer harmless from any cost, loss damage or expense, including taxes as well as any interest or penalties; g. Seller is and will respond as the employer of all Seller personnel, exclusive of Buyer, for purposes of any federal, state, or local taxes, benefits and unemployment insurance law. Seller will indemnify and hold Buyer harmless from any claim that Buyer's reserve account should be taxed to provide unemployment compensation to any Seller personnel or former Seller personnel based upon Services provided to Buyer under this Agreement; h. If any Seller personnel makes a claim for employee benefits under any Buyer employee benefit plan or for workers' compensation against Buyer, then Seller will indemnify and hold harmless Buyer from any such claim, including any and all costs an expenses, including interest and penalties; i. Seller's employee benefit, plans and self-employed benefit plans will credit Seller's personnel with all for time worked on Buyer assignments and all compensation earned on Buyer assignments for plan participation purposes, vesting purposes, and benefit accrual purposes, on the same basis as they credit time worked on other assignments; and j. Seller will be responsible to its own acts and those of Seller's personnel during the performance of Seller's obligations under this Agreement. INFORMATION INFORMATION - BUYER'S Any specifications, drawings, sketches, models, samples, tools, computer or other apparatus programs, technical or business information or data, field trials results and/or reports, written, oral or otherwise (all hereinafter designated in this clause as "information") furnished to Seller under this Agreement or in contemplation of this Agreement, shall remain Buyer's property. All copies of such information, in written, graphic or other tangible form, shall be returned to Buyer at Buyer's request. Unless such information was previously know to Seller free of any obligation to keep it confidential, or has been or is subsequently made public by Buyer or a third party, it shall be kept confidential by Seller, shall be used only in performing under this Agreement, and may not be used for other purposes except such terms as may be agreed upon between Seller and Buyer in writing. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 13 15 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS INFORMATION - SELLER'S Any specifications, drawings, sketches, models, samples, tools, computer or other apparatus programs, technical or business information or data, field trials results and/or reports, written, oral or otherwise (all hereinafter designated in this clause as "information") furnished to Buyer under this Agreement or in contemplation of this Agreement, shall remain Seller's property. No information furnished by Seller to Buyer hereunder or in contemplation hereof shall be considered to be confidential or proprietary unless it is conspicuously marked as such. If Seller provides Buyer with any proprietary or confidential information which is conspicuously marked as such, Buyer shall use the same degree of care to prevent its disclosure to others as Buyer uses with respect to its own proprietary or confidential information. Notwithstanding the preceding sentences, no installation, operations, repair or maintenance information of Seller which pertains to the Material and Services which are the subject of this Agreement shall be considered to be proprietary or confidential, and Buyer may disclose such information to others for the purpose of installing, operating, repairing, and maintaining the Material for which it was initially furnished. INFRINGEMENT 1. Seller and/or its OEM supplier agrees to indemnify and hold Buyer harmless from and against any loss, liability, damage or expense (including increased damages for willful infringement, punitive damages, attorneys' fees and court costs) that may result by reason of any infringement, or claim of infringement, of any trade secret, patent, trademark, copyright or other proprietary interest of any third party based on the normal use or installation of any Material, Software, Documentation, program or Services furnished to Buyer hereunder, except to the extent that such claim arises from Seller's compliance with Buyer's detailed instructions. Such exception will not, however, include: (a) Merchandise available on the open market or the same as such merchandise. (b) Items of Seller's origin, design or selection. 2. Seller warrants that it has made reasonable independent investigation (including obtaining legal opinions) to determine the legality of its right to product and sell the Material/Equipment/Services provided herein. 3. If an injunction or order is obtained against Buyer's use of any Material, Software, Documentation, program or Service, or if in Seller's opinion any Material, Software, Documentation, program or Service is likely to become the subject of a claim of infringement, Seller will, at its expense: PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 14 16 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS (a) Procure for Buyer the right to continue using the Material, Software, Documentation, Program or Service; or (b) After consultation with Buyer, replace or modify the Material, Software, Documentation, program or Service to make it a substantially similar, functionally equivalent, non-infringing Material, Software, Documentation, program or Service. 3. If the Material, Software, Documentation, program or Service is purchased or licensed and neither (1) or (2) above is possible, Buyer may cancel the applicable Order and require Seller to remove such Material, Software, Documentation, program or Service from buyer's location and refund any charges paid therefor by Buyer. 4. In no event will Buyer be liable to Seller for any charges after the date that Buyer no longer uses and Material, Software, Documentation, program or Service because of actual or claimed infringement. 6. Each party hereto agrees to defend or settle, at its own expense, any action or suit against the other party hereto for which it is responsible under this clause. Each party further agrees to notify the other party promptly of any claim of infringement for which the other party is responsible hereunder and cooperate in every reasonable way to facilitate the defense thereof. 7. In the event the Seller, after notification of any claim for which Seller is responsible, does not assume the defense of such action, Seller will reimburse buyer for all of its costs incurred in the defense of the claim, including, but not limited to attorneys' fees and interest on such Buyer's payment of said amounts from he date of Buyer's payments of said amounts. INSIGNIA Upon Buyer's written request, Seller will affix certain of Buyer's trademarks, trade names, insignia, symbols, decorative designs or evidences of Buyer's inspection (hereafter collectively called "Insignia") to the MATERIAL furnished hereunder. Such Insignia will not be affixed, used or otherwise displayed on or in connection with the MATERIAL without Buyer's prior written approval. The manner in which such Insignia will be affixed must be approved in writing by Buyer. Seller agrees to remove all Insignia from MATERIAL rejected or not purchased by Buyer prior to any sale, use or disposition thereof by Seller. Seller further agrees to defend, indemnify and hold Buyer harmless from and against any claim, loss, damage or expense (including attorneys' fees and court costs) arising out of Seller's failure to do so. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 15 17 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS This clause will in no way alter or modify Seller's obligations under the clause entitled "USE OF INFORMATION". INSTALLATION/CUTOVER ASSISTANCE If requested by Buyer, Seller and/or its OEM supplier agrees to make available at the installation site, without charge, a field engineer to render installation and cutover assistance as required by Buyer for the initial installation/cutover in each of Buyer's operating areas. INSURANCE 1. With respect to performance hereunder, and in addition to Seller's and/or its OEM supplier's obligation to indemnify, Seller agrees to maintain, at all times during the term of this Agreement, the following minimum insurance coverages and limits and any additional insurance and/or bonds required by law: a. Workers' Compensation insurance with benefits afforded under the laws of the state in which the Services are to be performed and Employers Liability insurance with minimum limits of $100,000 for Bodily Injury-each accident, $500,000 for Bodily Injury by disease-policy limits and $100,000 for Bodily Injury by disease-each employee. b. Commercial General Liability insurance with minimum limits of: $2,000,000 General Aggregate limit; $1,000,000 each occurrence sub-limit for all bodily injury or property damage incurred in any one occurrence; $1,000,000 each occurrence sub-limit for Personal Injury and Advertising; $2,000,000 Products/Completed Operations Aggregate limit, with a $1,000,000 each occurrence sub-limit for Products/Completed Operations. Fire Legal Liability sub-limits of $300,000 are required for lease agreements. SBC will be named as an Additional Insured on the Commercial General Liability policy. c. If use of a motor vehicle is required, Automobile Liability insurance with minimum limits of $1,000,000 combined single limits per occurrence for bodily injury and property damage, which coverage shall extend to all owned, hired and non-owed vehicles. SBC requires that companies affording insurance coverage have a B+ VII or better rating, as rated in the A.M. Best Key rating Guide for Property and Casualty Insurance Companies. 2. A certificate of insurance stating the types of insurance and policy limits provided the Seller must be received prior to commencement of any work. If a certificate is not received, Seller hereby authorizes Buyer, and Buyer may, but is not required to, obtain insurance on behalf PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 16 18 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS of Seller as specified herein. Buyer will either invoice Seller for the costs incurred to so acquire insurance or will reduce by an applicable amount any amount owed to Seller. 3. The cancellation clause on the certificate of insurance will be amended to read as follows: "SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELED OR MATERIALLY CHANGED, THE ISSUING COMPANY WILL MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER." The Seller shall also require all subcontractors who may enter upon the work site to maintain the same insurance requirements listed above. Additional insurance responsibilities and obligations of OEM's are contained in Exhibit C attached hereto and incorporated herein by this reference. LIABILITY 1. Seller and/or its OEM supplier shall indemnify, defend and hold harmless Buyer (including its agents, employees, officers, and directors) from and against any and all liability, loss, damage, court cost, attorneys' fees or other expense of any kind which arises out of any claim, demand, suit for damages, injunction or other relief, on account of (a) injury to or death of any person, (b) damage to any property, including theft , (c) public charges and penalties, or (d) any lien, caused by, resulting from or attributable to the Materials or Services or the acts or omissions of the Seller (including any of its employees, agents, or subcontractors but excepting the active negligence or willful misconduct solely of Buyer or its employees) in furnishing the Materials or Services hereunder. This indemnity shall survive the delivery, inspection and acceptance of the Materials or Services hereunder. 2. Seller agrees to defend Buyer, at no cost or expense to Buyer, against any such liability, claim, demand, suit or legal proceeding. Buyer agrees to notify Seller within a reasonable time of any written claims or demands against Buyer for which Seller is responsible under this clause. 3. Seller agrees not to implead or bring any action against Buyer or Buyer's employees based on any claim by any person for personal injury or death that occurs in the course or scope of employment of such person by Seller and that arises out of the Material or Services furnished under this Agreement. LICENSES No licenses, express or implied, under any patents are granted by Buyer to Seller under this Agreement. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 17 19 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS LICENSE FEE Except as otherwise specified in the applicable Order, the license fee for Standard Software is included in the purchase price of the Material. LICENSE TERM The perpetual license or license term shall commence on the date when Buyer accepts the Software. Unless the Order is sooner Canceled or Terminated as provided herein, a license shall continue for the initial license term specified in the applicable Order and thereafter as renewed until the Order is Canceled or Terminated as provided herein. LIMITATION OF LIABILITY SBC will not be liable for consequential, incidental, special, or punitive damages, or for loss of revenue or profit in connection with the performance or failure to perform this Agreement regardless whether such liability arises from breach of contract, tort, or any other theory of liability. MATERIAL RELIABILITY Seller and/or its OEM supplier commits to test all Material, including Original Equipment Manufacture (OEM) Material prior to release to Buyer. Such testing shall include complete regression and interaction testing of all Software and patches. Seller commits to release Material without any critical or major issues/faults. Material reliability is demonstrated through zero quality alerts and requests for material disposition. MODIFICATION a) Buyer shall have the absolute right to make any alterations, variations, modifications, additions or improvements to the source code for Software licensed hereunder at its own risk and expense or Agreement with third parties for such modifications and such modifications by third parties shall be subject to the nondisclosure provisions of this Agreement. The conditions and charges, if any, for Seller support of such modifications shall be subject to agreement between Buyer and Seller. Any unmodified portion of such modified Software shall be subject to the same conditions and limitations to have been designated herein for original Software and Documentation. Title to any such addition or modifications shall remain with Buyer. b) Buyer may merge the Software with other computer programs to generate a shared program library. After Cancellation or Termination of the license for the Software, such Software shall be removed from such shared program library and shall be destroyed. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 18 20 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS c) Any Software modification made by Seller at the request and expense of Buyer shall be governed by the provisions of a separate custom software development agreement between the parties. MBE/WBE-DVBE PARTICIPATION PLANS AND REPORTS Seller commits to goals for the participation of M/WBE and DVBE firms (as defined in the Section entitled "MBE/WBE/DVBE Cancellation Clause) as follows: 15% annual MBE participation; 5% annual WBE participation; and 1.5% annual DVBE participation. These goals apply to all annual expenditures by any entity pursuant to this Agreement with Seller. Attached hereto and incorporated herein as Exhibit A1 is Seller's completed Participation Plan outlining its M/WBE-DVBE goals and specific and detailed plans to achieve those goals. Seller will submit an updated Participation Plan annually by the first week in January. Seller will submit M/WBE-DVBE Results Reports quarterly by the end of the first week following the close of each quarter, using the form attached hereto and incorporated herein as Exhibit B1. Participation Plans and Results Reports will be submitted to the Prime Supplier Results Manager. MBE/WBE/DVBE CANCELLATION CLAUSE a. Seller agrees that falsification or misrepresentation of, or failure to report a disqualifying change in, the MBE/WBE/DVBE status of Seller or any subcontractor utilized by Seller; or Seller's failure to comply in good faith with any MBE/WBE/DVBE utilization goals established by Seller; or Seller's failure to cooperate in any investigation conducted by SBC, or by SBC's agent, to determine Seller's compliance with this section, will constitute a material breach of this Agreement. In the event of any such breach, SBC may, at its option, cancel ("Cancel") this Agreement upon 20 days notice. Seller acknowledges and agrees that SBC's right to Cancel is absolute and unconditional, and SBC shall not be subject to liability, nor shall Seller have any right to suit for damages as a result of such cancellation. b. For purchases under this Agreement by Pacific Bell, Pacific Bell Directory, Pacific Bell Mobile Services, Pacific Bell Information Services, Pacific Bell Communications, and any other entity operating principally in California (collectively "California Affiliates"), Minority and Women Business Enterprises (MBEs/WBEs) are defined as businesses which satisfy the requirements of paragraph c. below and are certified as MBEs/WBEs by the California Public Utilities Commission Clearinghouse ("CPUC-certified"). For purchases under this Agreement by any entity that is not a California Affiliate, MBEs/WBEs are defined as businesses which satisfy the requirements of paragraph c. below and are either CPUC-certified or are certified as MBEs/VBEs by a certifying agency recognized by SBC. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 19 21 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS c. MBEs/WBEs must be at least 51% owned by a minority individual or group or by one or more women (for publicly-held businesses, at least 51% of the stock must be owned by one or more of those individuals), and the MBEs/WBEs' management and daily business operations must be controlled by one or more of those individuals, and these individuals must be either U.S. citizens or legal aliens with permanent residence status. For the purpose of this definition, minority group members include male or female Asian Americans, Black Americans, Filipino Americans, Hispanic Americans, Native Americans (i.e., American Indians, Eskimos, Aleuts and Native Hawaiians), Polynesian Americans, and multi-ethnic (i.e., any combination of MBEs and WBEs where no one specific group has a 51% ownership and control of the business, but when aggregated, the ownership and control combination meets or exceeds the 51% rule). "Control" in this context means exercising the power to make policy decisions. "Operate" in this context means actively involved in the day-to-day management of the business and not merely acting as officers or directors. d. For purchases under this Agreement by California Affiliates, Disabled Veteran Business Enterprises (DVBEs) are defined as business concerns that satisfy the requirements of paragraph e. below and are certified as DVBEs by the California State Office of Small and Minority Business (OSMB). The DVBE must be a resident of the State of California, and must satisfy the requirements of paragraph e. below. For purchases under this Agreement by any entity that is not a California Affiliate, DVBEs are defined as any business concern that satisfies the requirements of paragraph e. below and is either a defined DVBE for purchases by California Affiliates, or is certified as a DVBE by a certifying agency recognized by SBC. e. The DVBE must be (1) a sole proprietorship at least 51% owned by one or more disabled veterans; or (2) a publicly-owned business in which at least 51% of the stock is owned by one or more disabled veterans; or (3) a subsidiary which is wholly owned by a parent corporation, but only if at least 51% of the voting stock of the parent corporation is owned by one or more disabled veterans; or (4) a joint venture in which at least 51% of the joint venture's management and control and earnings are held by one or more disabled veterans. In each case, the management and control of the daily business operations must be by one or more disabled veterans. A disabled veteran is a veteran of the military, naval or air service of the United States with a service-connected disability. "Management and control" in this context means exercising the power to make policy decisions and actively involved in the day-to-day management of the business and not merely acting as officers or directors. NON-EXCLUSIVE MARKET RIGHTS It is expressly understood and agreed that this Agreement does not grant Seller an exclusive privilege to provide to Buyer any or all Material and Services of the type described in this Agreement nor requires the purchase of any products or services from Seller by Buyer. It is, PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 20 22 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS therefore, understood that Buyer may Contract with other manufactures and suppliers for the procurement or trial of comparable products and services and that Buyer may itself perform the Services described herein. NON-WAIVER No course of dealing or failure of either party to strictly enforce any term, right or condition of this Agreement will be construed as a waiver of such term, right or condition. The waiver by Buyer in one instance of any default of Seller hereunder will not be deemed a waiver of any other default of Seller. The express provision herein for certain rights and remedies of Buyer are in addition to any other legal and equitable rights and remedies to which Buyer would otherwise be entitled. NOTICES Except as otherwise provided in this Agreement, or applicable Order, all notices or other communications hereunder shall be deemed to have been duly given when made in writing and either 1) delivered in person, 2) delivered to an agent, such as an overnight or similar delivery service, or 3) deposited in the United States Mail, postage prepaid, or 4) facsimile transmission, and addressed as follows: To: (World Wide Technology, Inc.) To: (Affiliate Name) (127 Weldon Parkway) (Affiliate street address) (St. Louis, Missouri 63043-3101) (Affiliate city, state, Zip) Attn.: Mark Catalano (314) 919-1501 (Attn:____________________ To: (Southwestern Bell Telephone Company) (530 McCullough rm. 2-MO2) (San Antonio, Texas 78215) Attn.: Tony Riojas (210) 886-3370 The address to which notices or communications may be given by either party may be changed by written notice given by such party to the other pursuant to this paragraph entitled "Notices". ORDER ACKNOWLEDGMENT a. Seller agrees to send to Buyer's Local Purchasing Organization ("LPO") identified on the Order two (2) copies of an Acknowledgment for all Material to be furnished hereunder at least thirty (30) days prior to the scheduled shipment date thereof. Such Acknowledgment will identify: PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 21 23 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS 1) All Material to be provided with the appropriate Continuing Property Record ("CPR") number thereof. 2) All non-hardwired Material (plug-ins) listed thereon with the Common Language Equipment Identifier ("CLEI") coding, item number, unit description, unit quantity and price. b. All hardwired equipment, plug-ins, tools and test sets contained in kits or assemblies must be listed separately with appropriate CPR numbers and/or CLEI codes, unit quantities and unit prices. The only items in kits and assemblies that do not need to be listed separately are miscellaneous minor items not coded by Bellcore. The unit description, CPR number and CLEI code must exit in Bellcore's National Property Record Catalog ("NPRC') and Equipment Catalog System ("ECS") data bases, and the item numbers and descriptions on Seller's invoices must match the item numbers and description on the acknowledgment. PLANT AND WORK RULES Each party's employees and agents will, while on the premises of the other or at any other location while performing SERVICES under this agreement for SWBT, comply with all plant rules and regulations, including, but not limited to, the section of SBC Communications' "Code of Business Conduct," a copy of which is available upon request, which prohibits the possession of any weapon or implement which might be used as a weapon on SWBT properties. In addition, the parties agree that, where required by government regulations, it will submit satisfactory clearance from the U.S. Department of Defense and/or other federal authorities concerned. PUBLICITY Seller agrees not to advertise, or otherwise make known to others, any information regarding this Agreement. Seller further agrees not to use in any advertising or sales promotion, press releases or other publicity matters any endorsements, direct or indirect quotes, or pictures implying endorsement by Buyer or any of its employees without Buyer's prior written approval. Seller will submit to Buyer for written approval, prior to publication, all publicity matters that mention or display Buyer's name and/or marks or contain language from which a connection to said name and/or marks may be inferred or implied. PURCHASE ORDERS a. Purchase Orders submitted by Buyer against this Agreement will be placed on Buyer's Purchase Order form, a copy of which is attached thereto as Exhibit B, and by this reference made a part hereof. The typed or written provisions on Buyer's Orders will be incorporated into PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 22 24 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS this Agreement, but printed provisions on the reverse side thereof will be deemed deleted. Such Orders will specify: 1) A description of the Material, including any numerical/alphabetical identification referenced in the price list attached hereto (Exhibit B). 2) The requested delivery date. 3) The applicable price(s). 4) The location to which the Material is to be shipped. 5) The location to which invoices are to be rendered for payment. 6) Buyer's Order number. b. Orders will be deemed accepted by Seller unless written notice to the contrary is received by Buyer within thirty (30) days from Seller's receipt thereof. Such notice will be given to Buyer in care of the address indicated on the acknowledgment copy of the Order. c. Inquiries relating to Orders, information requests, etc. should be directed as indicted in the subordinate contracts. QUALITY ASSURANCE 1. Seller and/or its OEM supplier represents and warrants that it is registered to ANSI/ASQC Q9001 or Q9002 (1994). 2. Seller and/or its OEM supplier hereby agrees that HARDWARE and/or SOFTWARE furnished hereunder by Seller has undergone or has been subject to: a.) Seller's quality control activities and procedures, including any performance measurements, testing, quality process reviews or inspections to implement such procedures; and b.) Will meet the following requirements of the Bellcore documents and subsequent issues thereof listed below: o TR-NWT-000179 - "Quality System Generic Requirements for Software" o GR-282-CORE - "Software Reliability and Quality Acceptance Criteria (SRQAC)" o GR-929-CORE - "Reliability and Quality Measurements for Telecommunications Systems (RQMS)" o GR- 1252-CORE - "Quality System Generic Requirements for Hardware" o GR-1315-CORE - "In-Process Quality Metrics Generic Requirements (IPQM)" o TR-NWT-001359 - "Supplier Data Basic Generic Requirements" PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 23 25 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS Note: Bellcore documents may be obtained by contacting Bellcore at: Bellcore, 8 Corporate Place, Room 3A 184, Piscataway, NJ 08854, or by calling: (800) 521-2673 or (908) 699-5800. c. Quality Assurance Examination and/or Process Surveillance by Buyer or its representative ("Buyer's Agent"). Such Quality Assurance Examination and/or Process Surveillance may be conducted in accordance with the most current issue of Quality Program Specification ("QPS") No. 88.010, Surveillance Program for Software-General, a copy of which is attached hereto as Exhibit D, and by this reference made a part hereof. 3. Seller further agrees that it will at no additional charge: a. Notify Buyer or Buyer's Agent when HARDWARE and/or SOFTWARE is ready for examination and give Buyer or Buyer's Agent reasonable opportunity to examine same at any time prior to the scheduled shipment date thereof. b. Provide Buyer or Buyer's Agent with copies of Seller's Quality Manual, current inspection procedures and product specifications for the HARDWARE and/or SOFTWARE furnished hereunder. c. Maintain and make available to Buyer or Buyer's Agent the data including all information and reports about Seller's quality control procedures which demonstrate that the HARDWARE and/or SOFTWARE meets the specified quality and reliability requirements. d. Provide Buyer or Buyer's Agent, at no charge, with access to Seller's test equipment, facilities, data and specifications, assistance from Seller's personnel and sufficient working space to enable Buyer or Buyer's Agent to perform said Quality Assurance Examination and/or Process Surveillance and/or a review of Seller's total quality program at Seller's facilities. e. As reasonably requested by Buyer, Supplier shall support SBC Communications, Inc. on-going Supplier Quality Programs at a minimum of but not limited to the following: (1) Quality Partner Program (QPP) QPP is an ongoing Assessment, Feedback, and Recognition Program. The Supplier submits a completed copy of the QPP Application and Self-Assessment to their Agreement Manager for initial evaluation and rating, and then supplies an annual update and progress report to Buyer, by a date to be agree upon by Buyer and Seller. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 24 26 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS (2) Supplier Performance Feedback Process (Report Cards) This process provides for the periodic measurement of the Supplier's performance in relation to HARDWARE/SOFTWARE and/or Service Quality, Cost Effectiveness, On-Time Delivery, and Support Satisfaction. (3) Joint Quality Initiatives (JQI) The purpose of the JQI program is to establish partnering arrangements with Buyer's Suppliers in order to identify quality improvement opportunities that result in documented savings. The details of the JQI, amount of savings, and the time required to achieve the proposed savings is a matter to be determined between Buyer and the Supplier. Specifically the proposed JQI shall identify the particular process targeted for savings, the expected savings resulting from the JQI, the time required to achieve the desired savings, and a detailed implementation plan. Additionally, key contacts should be identified for each JQI and detailed status reports should be provided to the designated Agreement Manager at the Buyer on no less than a monthly basis. If requested, the supplier shall provide in writing at least one JQI to their Agreement Manager. The proposed JQI shall include the particular elements outlined in the paragraph immediately above. 4. Nothing contained herein will diminish Seller's obligation to deliver defect-free material which meets Specifications nor affect Buyer's rights hereunder, under any warranty, or under other provisions of this Agreement. The purchase of any HARDWARE/SOFTWARE hereunder is subject to Buyer's inspection and acceptance after delivery thereof. RECORDS AND AUDITS Seller agrees that it will: a) Maintain complete and accurate records of all amounts billable to and payments made by Buyer hereunder in accordance with generally accepted accounting principles and practices, uniformly and consistently applied in a format that will permit audit; b) Retain such records and reasonable billing detail for a period of three (3) years from the date of final payment for Materials and Services; c) Provide reasonable supporting documentation to Buyer concerning any disputed invoice amount within thirty (30) calendar days after receipt of written notification of such dispute; and d) Permit Buyer and its authorized representatives to inspect and audit during normal business hours the charges invoiced to Buyer. Should Buyer request an audit, Seller will make available any pertinent records and files to Buyer during normal business hours. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 25 27 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS REGISTRATION When Material furnished under this Agreement is subject to Part 68 of the Federal Communications Commission's Rules and Regulations ("FCC Rules and Regulations") as may from time to time be amended, Seller and/or its OEM supplier warrants that such Material is registered under and complies with Part 68 of such FCC Rules and Regulations including, but not limited to, all labeling and customer instruction requirements. Seller agrees to indemnify and hold Buyer harmless from and against any liability, claims or demands (including costs of defense and attorneys' fees) that may be made because of Seller's noncompliance with Part 68 of the FCC Rules and Regulations. Seller agrees, at its expense, to defend Buyer, at Buyer's request, against such liability, claim or demand, provided, however, that Seller shall (1) keep Buyer fully informed as to the progress of such defense, and (2) afford Buyer, at its own expense, an opportunity to participate on an equal basis with Seller in such defense. RELEASES VOID Neither party will require waivers or releases of any personal rights from representatives of the other in connection with visits to each other's respective premises, and no such releases or waivers will be pleaded by Seller, Buyer or third persons in any action or proceeding. SEVERABILITY If any provision or any part of provision of this Agreement shall be invalid or unenforceable, such invalidity or non-enforceability shall not invalidate or render unenforceable any other portion of this Agreement. The entire Agreement will be construed as if it did not contain the particular invalid or unenforceable provision(s) and the rights and obligations of the Seller and Buyer will be construed and enforced accordingly. SOFTWARE RISK OF LOSS a) If Software is lost, damaged or made invalid during shipment prior to Acceptance, or if it is lost or damaged at any time due to the negligence or willful misconduct of Seller or its Contractors or agents, Seller shall promptly replace it at no additional charge to Buyer. b) Except as otherwise provided in Section a), above, if the Software is lost or damaged at any time while in possession of Buyer after acceptance, Seller shall promptly replace it and Buyer shall pay only the cost of reproduction and shipment or delivery. SURVIVAL OF OBLIGATIONS Seller's and/or its OEM supplier's obligations under this Agreement which by their nature would continue beyond the termination, cancellation or expiration hereof, including, by way of illustration only and not limitation, those in the clauses entitled "COMPLIANCE WITH PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 26 28 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS LAWS", "INFRINGEMENT", "LIABILITY", "PUBLICITY", "RELEASES VOID", "SEVERABILITY", "USE OF INFORMATION" and "WARRANTY", will survive the termination, cancellation or expiration of this Agreement. TAXES 1. Seller will invoice Buyer the amount of any federal excise taxes or state or local sales taxes imposed upon the sale of Material as separate items, if applicable, listing the taxing jurisdiction imposing the tax. Installation or labor charges must be separately stated. Buyer agrees to pay all applicable taxes to Seller which are stated on and at the time the Material invoice is submitted by Seller. Seller agrees to remit taxes to the appropriate taxing authorities. 2. Seller agrees to pay, and to hold Buyer harmless from and against, any penalty, interest, additional tax or other charge that may be levied or assessed as a result of the delay or failure of Seller, for any reason, to pay any tax or file any return or information required by law, rule or regulation or by this Agreement to be paid or filed by Seller. Seller agrees to pay and to hold Buyer harmless from and against any penalty or sanction assessed as a result of Seller doing business with any country subject to U.S. trade restrictions. 3. Upon Buyer's request, the parties shall consult with respect to the basis and rates upon which Seller shall pay any taxes for which Buyer is obligated to reimburse Seller under this Agreement. If Buyer determines that in its opinion any such taxes are not payable or should be paid on a basis less than the full price or at rates less than the full tax rate, Seller shall make payment in accordance with such determinations. If collection is sought by the taxing authority for a greater amount of taxes than that so determined by Buyer, Seller shall promptly notify Buyer. If Buyer desires to contest such collection, Buyer shall promptly notify Seller. If Buyer determines that in its opinion it has reimbursed Seller for sales or use taxes in excess of the amount which Buyer is obligated to reimburse Seller, Buyer and Seller shall consult to determine the appropriate method of recovery of such excess reimbursements. Seller shall credit any excess reimbursements against tax reimbursements or other payments due from Buyer if and to the extent Seller can make corresponding adjustments to its payments to the relevant tax authority. At Buyer's request, Seller shall timely file any claims for refund and any other documents required to recover any other excess reimbursements, and shall promptly remit to Buyer all such refunds (and interest) received. 4. If any taxing authority advises Seller that it intends to audit Seller with respect to any taxes for which Buyer is obligated to reimburse Seller under this agreement, Seller shall (1) promptly so notify Buyer, (2) afford Buyer an opportunity to participate on an equal basis with Seller in such audit with respect to such taxes and (3) keep Buyer fully informed as to the progress of such audit. Each party shall bear its own expenses with respect to any such audit, and the responsibility for any additional tax, penalty or interest resulting from such audit shall be determined in accordance with the applicable provisions of this Section. Seller's failure to PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 27 29 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS comply with the notification requirements of this section shall relieve Buyer of its responsibility to reimburse Seller for taxes only if Seller's failure materially prejudiced Buyer's ability to contest imposition or assessment of those taxes. TECHNICAL SUPPORT Seller and/or its OEM supplier will provide, at no additional cost, fall and complete technical assistance to Buyer for the Products and Services covered by this Agreement. Buyer will be entitled to ongoing technical support including field service and assistance from Seller at no additional charge; provided however, that the availability or performance of this technical support Service will not be construed as altering or affecting Seller's obligations as set forth in the clause entitled [* Confidential treatment will be requested] or provided elsewhere in this Agreement. Field Service and technical support Services, including emergency (service affecting) will be provided on site twenty-four (24) hours a day. Seller will deliver to Buyer and keep current an escalation document that includes names, titles and telephone numbers, including after-hours telephone numbers, of Seller personnel responsible for providing technical support Services to Buyer. Seller will maintain a streamlined escalation process to speed resolution of reported problems. TERMINATION Buyer may terminate this Agreement or any Order in whole or in part at any time by giving Seller at least thirty (30) days' prior written notice. Upon termination, Buyer agrees to pay Seller all amounts due for MATERIAL provided by Seller under this Agreement up to and including the effective date of termination, which payment will constitute a full and complete discharge of Buyer's obligations to Seller hereunder. TERMS OF AGREEMENT This Agreement is effective as of the signature date, and, unless terminated or canceled as provided in this Agreement, shall remain in effect so long as both parties find the Agreement mutually benefiting. [* Confidential treatment will be requested] TITLE AND RISK OF LOSS Title to MATERIAL purchased hereunder will vest in Buyer when the MATERIAL has been delivered and accepted at the F.O.B. point designated by Buyer. If this Agreement calls for additional services such as unloading, installation or the like to be performed after delivery, PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 28 30 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS Seller will retain risk of loss to the MATERIAL until the additional services have been performed to Buyer's satisfaction. UNIVERSAL DESIGN Seller and/or its OEM supplier advocates and supports and encourages its suppliers to advocate and support the manufacturing and provision of products which embrace the concept of "universal design". Seller shall use its reasonable efforts to manufacture and provide products, including future versions of Products, to make its products accessible to the widest range of consumers including those with disabilities. Seller agrees to reasonably cooperate with Buyer in addressing disability access issues, including hearing aid interference, that may arise in connection with Buyer's customer's use of Seller's Products furnished hereunder. Specifically Seller agrees: 1. to ensure that its equipment is designed, developed and fabricated to be accessible to and usable by people with disabilities, and 2. to ensure that the service is accessible to and usable to people with disabilities, or 3. to ensure that the equipment or service is compatible with existing peripheral devices or specialized customer premises equipment commonly used by individuals with disabilities to achieve access, if the requirements of subsection 1 and 2 are not readily achievable. * Confidential treatment will be requested PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 29 31 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS emergency replacement Service shall continue for a period of ten (10) years after the expiration of this Agreement. For Materials not covered under warranty, charges for replacement Material shall be at the current selling price; freight charges shall be borne by Buyer. WORK DONE BY OTHERS If any part of the Work is dependent upon work done by others, Seller shall inspect and promptly report to Buyer any defect that renders such other work unsuitable for Seller's proper performance. Seller's silence shall constitute approval of such other work as it is fit, proper and suitable for Seller's performance of the Work. Seller shall be entirely responsible for all persons furnished by Seller working in harmony with all others when working on Buyer's premises. YEAR 2000 WARRANTY 1. Seller and/or its OEM supplier warrants that all Software and Firmware, including any third party Software, which is licensed to Buyer hereunder prior to, during, or after the calendar year 2000, includes or will include, by___________, 199_, and at no additional cost to Buyer, year 2000 capability. For the purpose of this license, year 2000 capability means that the Software and Firmware will: a. Read, compute, store, process, display and print data involving dates, including single century and multi-century formulas, and will not cause computational, display, storage or other errors resulting from the inability to accurately or correctly handle dates, including Year 2000 and February 29, 2000; b. Include the indication of century in all date-related user interface functionality, data fields, and generated code; and c. Be interoperable with other software used by Buyer which may deliver records to such Software and Firmware, receive records from such Software and Firmware or interact with such Software and Firmware in the course of processing dates. 2. Acknowledges that Software and Firmware Products licensed by Seller hereunder may require modification in order to correctly process dates for Year 2000 and beyond. In addition, such modifications may be required in order for Seller's Software and Firmware Products to function correctly with Buyer's data and in accordance with the applicable Specifications therefor. Seller agrees to develop and implement such required changes in its Software and Firmware Products licensed hereunder by Buyer in accordance with a schedule to be mutually agreed to between Seller and Buyer, but which, at a minimum, shall provide Buyer with sufficient time to adequately test such modified Software and Firmware prior to mandatory implementation of such modified Software and Firmware PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 30 32 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS Products. Seller agrees that there shall be no additional charges to Buyer for such modifications or the modified Software and Firmware Products. PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 31 33 [SOUTHWESTERN BELL TELEPHONE LETTERHEAD] AGREEMENT #98005906 TERMS AND CONDITIONS IN WITNESS WHEREOF, Seller and Buyer have executed the Agreement in duplicate counterparts, each of which will be deemed to be an original document as of the signature dates below. WORLD WIDE TECHNOLOGY, INC. SOUTHWESTERN BELL OPERATIONS INC. (SELLER) (BUYER) By: /s/ Mark J. Catalano By: /s/ Sheila Anderson-Tritthart Name: Mark J. Catalano Name: Sheila Anderson-Tritthart Title: Director - Telco Bus. Unit Title: Director-Sonet & Transp Data Tech Date: 3/15/99 Date: 3/9/99 PROPRIETARY INFORMATION THE INFORMATION CONTAINED HEREIN IS NOT FOR USE OR DISCLOSURE OUTSIDE SOUTHWESTERN BELL TELEPHONE COMPANY, PACIFIC BELL OR THEIR AFFILIATED AND SUBSIDIARY COMPANIES EXCEPT UNDER WRITTEN AGREEMENT BY THE CONTRACTING COMPANY. 32 34 EXHIBIT A -- EXECUTIVE ORDERS AND ASSOCIATED REGULATIONS Work under this contract may be subject to the provisions of certain Executive Orders, federal laws, state laws, and associated regulations governing performance of this contract including, but not limited to: Executive Order 11246, Executive Order 11625, Executive Order 11701, and Executive Order 12138, Section 503 of the Rehabilitation Act of 1973 as amended and the Vietnam Era Veteran's Readjustment Assistance Act of 1974. To the extent that such Executive Orders, federal laws, state laws, and associated regulations apply to the work under this contract, and only to that extent, Contractor agrees to comply with the provisions of all such Executive Orders, federal laws, state laws and associated regulations, as now in force or as may be amended in the future, including, but not limited to the following: 1. EQUAL EMPLOYMENT OPPORTUNITY DUTIES AND PROVISIONS OF GOVERNMENT CONTRACTORS In accordance with 41 C.F.R. Section 60-1.4(a), the parties incorporate herein by this reference the regulations and contract clauses required by that section, including but not limited to, Contractor's agreement that it will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The Contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. 2. AGREEMENT OF NON SEGREGATED FACILITIES In accordance with 41 C.F.R. Section 60-1.8, Contractor agrees that it does not and will not maintain or provide for its employees any facilities segregated on the basis of race, color, religion, sex, or national origin at any of its establishments, and that it does not and will not permit its employees to perform their services at any location, under its control, where such segregated facilities are maintained. The term "facilities" as used herein means waiting rooms, work areas, restaurants and other eating areas, time clocks, restrooms, washrooms, locker rooms and other storage or dressing areas, parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing facilities provided for employees; provided, that separate or single-user restroom and necessary dressing or sleeping areas shall be provided to assure privacy between the sexes. 3. AGREEMENT OF AFFIRMATIVE ACTION PROGRAM Contractor agrees that it has developed and is maintaining an Affirmative Action Plan as required by 41 C.F.R. Section 60-1.4(b). 4. AGREEMENT OF FILING Contractor agrees that it will file, per current instructions, complete and accurate reports on standard Form 100 (EEO-1), or such other forms as may be required under 41 C.F.R. Section 60-1.7(a). 5. AFFIRMATIVE ACTION FOR HANDICAPPED PERSONS AND DISABLED VETERANS, VETERANS OF THE VIETNAM ERA. In accordance with 41 C.F.R. Section 60-250.20, and 41 C.F.R. Section 60-741.20, the parties incorporate herein by this reference the regulations and contract clauses required by those provisions to be made a part of government contracts and subcontracts. 6. UTILIZATION OF SMALL, SMALL DISADVANTAGED AND WOMEN-OWNED SMALL BUSINESS CONCERNS As prescribed in 48 C.F.R., Ch. 1, 19.708(a): (a) It is the policy of the United States that small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals and small business concerns owned and controlled by women shall have the maximum practicable opportunity to participate in performing contracts let by any Federal agency, including contracts and sub-contracts for systems, assemblies, components, and related services for major systems. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment amounts due pursuant 34 35 EXHIBIT A, Page 2 of 2 to the terms of the subcontracts with small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals and small business concerns owned and controlled by women. (b) The Contractor hereby agrees to carry out this policy in the awarding of subcontracts to the fullest extent consistent with efficient contract performance. The Contractor further agrees to cooperate in any studies or surveys as may be conducted by the United States Small Business Administration or the awarding agency of the United States as may be necessary to determine the extent of the Contractor's compliance with this clause. (c) As used in this contract, the term small business concern shall mean a small business as defined pursuant to section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto. The term small business concern and owned and controlled by socially and economically disadvantaged individuals shall mean a small business concern which is at least 51 percent unconditionally owned by one or more socially and economically disadvantaged individuals; or, in the case of any publicly owned business, at least 51 percent of the stock of which is unconditionally owned by one or more socially and economically disadvantaged individuals; and (2) whose management and daily business operations are controlled by one or more such individuals. This term also means small business concern that is at least 51 percent unconditionally owned by an economically disadvantaged Indian tribe or Native Hawaiian Organization, or a publicly owned business having at least 51 percent of its stock unconditionally owned by one of these entities which has its management and daily business controlled by members of an economically disadvantaged Indian tribe or Native Hawaiian Organization, and which meets the requirements of 13 CRF part 124. The Contractor shall presume that socially and economically disadvantaged individual include Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, and other minorities, or any other individual found to be disadvantaged by the Administration pursuant to section 8(a) of the Small business Act. The Contractor shall presume that socially and economically disadvantaged entities also include Indian Tribes and Native Hawaiian Organizations. (d) The term "small business concern owned and controlled by women" shall mean a small business concern (i) which is at least 51 percent owned by one or more women, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women, and (ii) whose management and daily business operations are controlled by one or more women; and (e) Contractors acting in good faith may rely on written representations by their sub-contractors regarding their status as a small business concern, a small business concern owned and controlled by socially and economically disadvantaged individuals or a small business concern owned and controlled by women. 7. SMALL, SMALL DISADVANTAGED AND WOMEN-OWNED SMALL BUSINESS SUB-CONTRACTING PLAN. The sub-contractor will adopt a plan similar to the plan required by 48 CFR Ch. 1 at 52.219-9. 36 PRIME SUPPLIER MBE/WBE/DVBE PARTICIPATION PLAN PRIME SUPPLIER NAME:____________________________________________________________ ADDRESS:________________________________________________________________________ TELEPHONE NUMBER:_______________________________________________________________ DESCRIBE GOODS OR SERVICES BEING PROVIDED UNDER THIS AGREEMENT: ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ DESCRIBE YOUR M/WBE - DVBE OR SUPPLIER DIVERSITY PROGRAM AND THE PERSONNEL DEDICATED TO THAT PROGRAM. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ THE FOLLOWING, TOGETHER WITH ANY ATTACHMENTS IS SUBMITTED AS AN MBE/WBE/DVBE PARTICIPATION PLAN. 1. GOALS A. WHAT ARE YOUR MBE/WBE/DVBE PARTICIPATION GOALS? o MINORITY BUSINESS ENTERPRISES (MBEs) ____________% o WOMEN BUSINESS ENTERPRISES (WBEs) ____________% o DISABLED VETERANS BUSINESS ____________% ENTERPRISES (DVBEs) B. WHAT IS THE ESTIMATED ANNUAL VALUE OF THIS CONTRACT WITH PACIFIC BELL? _______________ 37 General Agreement # 98005906 Exhibit A1 SOUTHWESTERN BELL TELEPHONE COMPANY ("SWBT")?___________ OTHER SBC AFFILIATE? _______________ Note: Indicate Dollar Award(s) as it applies to this contract (i.e., Pacific Bell, SWBT and/or affiliate). C. WHAT ARE THE DOLLAR AMOUNTS OF YOUR PROJECTED MBE/WBE/DVBE PURCHASES? o MINORITY BUSINESS ENTERPRISES (MBEs) _______________ o WOMEN BUSINESS ENTERPRISES (WBEs) _______________ o DISABLED VETERANS BUSINESS _______________ ENTERPRISES (DVBEs) *SEE MBE/WBE/DVBE CANCELLATION CLAUSE IN AGREEMENT FOR DEFINITIONS OF MBE, WBE, AND DVBE* 2. LIST THE PRINCIPAL GOODS AND/OR SERVICES TO BE SUBCONTRACTED TO MBE/WBE/DVBEs OR DELIVERED THROUGH MBE/WBE/DVBE VALUE ADDED RESELLERS. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ DETAILED PLAN FOR USE OF M/WBEs-DVBEs AS SUBCONTRACTORS, DISTRIBUTORS, VALUE ADDED RESELLERS For every product and service you intend to use, provide the following information: (Attach additional sheets if necessary)
- ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- COMPANY NAME CLASSIFICATION PRODUCTS/SERVICES TO $ VALUE DATE TO BEGIN (MBE/WBE/DVBE) BE PROVIDED - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2 38 General Agreement #98005906 Exhibit A1 - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ---------------------- - ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
3. SELLER AGREES THAT IT WILL MAINTAIN ALL NECESSARY DOCUMENTS AND RECORDS TO SUPPORT ITS EFFORTS TO ACHIEVE ITS MBE/WBE/DVBE PARTICIPATION GOAL(S). SELLER ALSO ACKNOWLEDGES THE FACT THAT IT IS RESPONSIBLE FOR IDENTIFYING, SOLICITING AND QUALIFYING MBE/WBE/DVBE SUBCONTRACTORS, DISTRIBUTORS AND VALUE ADDED RESELLERS. 4. THE FOLLOWING INDIVIDUAL, ACTING IN THE CAPACITY OF MBE/WBE/DVBE COORDINATOR FOR SELLER, WILL: o ADMINISTER THE MBE/WBE/DVBE PARTICIPATION PLAN, o SUBMIT SUMMARY REPORTS, AND o COOPERATE IN ANY STUDIES OR SURVEYS AS MAY BE REQUIRED IN ORDER TO DETERMINE THE EXTENT OF COMPLIANCE BY THE SELLER WITH THE PARTICIPATION PLAN. NAME: (PRINTED)____________________________________________________________ TITLE:_____________________________________________________________________ TELEPHONE NUMBER:__________________________________________________________ AUTHORIZED SIGNATURE:______________________________________________________ DATE:______________________________________________________________________ 3 39 SBC - PACIFIC BELL M/WBE-DVBE QUARTERLY RESULTS REPORT NOTE: Subcontracting & Value Added Reseller Results should reflect ONLY M/WBE-DVBE dollars directly traceable to PACIFIC BELL purchases DURING THE REPORT QUARTER. If reporting results for Southwestern Bell Telephone Company, complete a separate Exhibit B1. - ------------------------------------------------------------------------------------------------------------------------------------ 1. REPORTING COMPANY: 2. CONTRACT/ 3. REPORT QUARTER: WORK ORDER NUMBER: This report reflects the Name:__________________________________________ utilization of Minority Business Address:_______________________________________ Enterprise/Woman Business City, State, Zip:______________________________ ___________________ Enterprise/Disabled Veterans Telephone:_____________________________________ (If available) Enterprise participation for period ________________________ through _______________________________ (Please indicate dates) - ------------------------------------------------------------------------------------------------------------------------------------
PARTICIPATION GOAL PARTICIPATION ACHIEVEMENT 5. ACTUAL FOR QUARTER 4. MBE WBE DVBE Subcontracting Dollars $ $ $ ---------- ---------- -------- ANNUAL GOAL Value Added Reseller Percent of Total MBE WBE DVBE Dollars $ $ $ ---------- ----------- -------- Pacific Bell Purchases % % % ---------- ---------- ---------- Total Purchase Dollars $ ------------- ----------- ----- Percent of Total Purchases % % % ---------- ---------- -------- - ------------------------------------------------------------------------------------------------------------------------------------
VALUE ADDED RESELLER* RESULTS *Supplier who purchases products/services from an original equipment manufacturer or other prime supplier for resale and provides enhancements or added value to the basic product. (Attach additional sheets if necessary)
Ethnic/Gender: Total Dollars: ------------- ------------- 6. Name:____________________________________________________________________ __________________________________ ____________________ Address:____________________________________________________________________________________________________________________________ City, State, Zip:___________________________________________________________________________________________________________________ Telephone:__________________________________________________________________________________________________________________________ Goods or Services:__________________________________________________________________________________________________________________
Ethnic/Gender: Total Dollars: ------------- ------------- Name:____________________________________________________________________ _________________________________ ____________________ Address:____________________________________________________________________________________________________________________________ City, State, Zip:___________________________________________________________________________________________________________________ Telephone:__________________________________________________________________________________________________________________________ Goods or Services:__________________________________________________________________________________________________________________
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