BILLING AND RELATED SERVICES AGREEMENT
between
ACI COMMUNICATIONS, INC.
and
XX.XXX, INC.
ACI Communications, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
TABLE OF CONTENTS
ARTICLE 1. AGREEMENT AND TERM . . . . . . . . . . . . . . . . . . 1
SECTION 1.01 AGREEMENT. . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. 02 TERM AND RENEWAL. . . . . . . . . . . . . . . . . . 1
ARTICLE 11. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.01 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 111. ACI'S OBLIGATIONS. . . . . . . . . . . . . . . . . . 5
SECTION 3.01 BILLING SERVICES . . . . . . . . . . . . . . . . . . 5
SECTION 3.02 SAFEGUARDING AND RETENTION OF CUSTOMER DATA. . . . . 5
ARTICLE IV. PAYMENTS TO ACI . . . . . . . . . . . . . . . . . . . 5
SECTION 4.01 COMPENSATION To ACI. . . . . . . . . . . . . . . . . 5
SECTION 4.02 OTHER EXPENSES . . . . . . . . . . . . . . . . . . . 6
SECTION 4.03 COST OF LIVING ADJUSTMENT. . . . . . . . . . . . . . 6
SECTION 4.04 REIMBURSEMENT OF EXPENSES. . . . . . . . . . . . . . 6
SECTION 4.05 PASS-THROUGH OF CERTAIN TAXES. . . . . . . . . . . . 6
SECTION 4.06 INVOICE AND TIME OF PAYMENT. . . . . . . . . . . . . 6
ARTICLE V. CUSTOMER OBLIGATIONS . . . . . . . . . . . . . . . . . 7
SECTION 5.01 BILLING OBLIGATIONS. . . . . . . . . . . . . . . . . 7
SECTION 5.02 VALIDATION OBLIGATIONS . . . . . . . . . . . . . . . 7
SECTION 5.03 INSPECTION OF REPORTS AND REMITTANCES. . . . . . . . 7
SECTION 5.04 COMPLIANCE WITH LAW AND B&C PROCESSOR POLICIES . . . 7
SECTION 5.05 DATA TRANSMISSION FEES . . . . . . . . . . . . . . . 8
SECTION 5.06 CUSTOMER REPRESENTATIVE. . . . . . . . . . . . . . . 8
SECTION 5.07 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 8
SECTION 5.08 PRIORITIES AND COOPERATION . . . . . . . . . . . . . 9
ARTICLE VI. PROPRIETARY RIGHTS, SOFTWARE, AND DATA. . . . . . . . 9
SECTION 6.01 ACI SOFTWARE . . . . . . . . . . . . . . . . . . . . 9
SECTION 6.02 MAINTENANCE AND SECURITY OF CUSTOMER DATA. . . . . . 9
SECTION 6.03 CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . 10
i
ARTICLE VII. CLAIM REVIEW AND ARBITRATION . . . . . . . . . . . . 10
SECTION 7.01 CLAIM REVIEW . . . . . . . . . . . . . . . . . . . . 10
SECTION 7.02 ARBITRATION. . . . . . . . . . . . . . . . . . . . . 11
SECTION 7.03 EXCLUSIVE REMEDY . . . . . . . . . . . . . . . . . . 11
SECTION 7.04 TAX DISPUTES . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VIII. TERMINATION 12
SECTION 8.01 TERMINATION FOR CAUSE. . . . . . . . . . . . . . . . 12
SECTION 8.02 SPECIAL TERMINATION RIGHTS . . . . . . . . . . . . . 12
SECTION 8.03 TERMINATION FOR BANKRUPTCY AND RELATED EVENTS. . . . 12
SECTION 8.04 TERMINATION FOR CERTAIN FORCE MAJEURE EVENTS . . . . 13
SECTION 8.05 TERMINATION FOR REGULATORY EVENT AND/OR LEC POLICIES 13
SECTION 8.06 RIGHTS UPON TERMINATION. . . . . . . . . . . . . . . 13
SECTION 8.07 SUSPENSION OF SERVICE. . . . . . . . . . . . . . . . 13
ARTICLE IX. INDEMNITIES AND LIABILITY . . . . . . . . . . . . . . 14
SECTION 9.01 INDEMNITIES. . . . . . . . . . . . . . . . . . . . . 14
SECTION 9.02 INDEMNITY PROCEDURES . . . . . . . . . . . . . . . . 14
SECTION 9.03 LIMITATION OF LIABILITY AND DISCLAIMER OF WARRANTIES 14
SECTION 9.04 ACKNOWLEDGMENT . . . . . . . . . . . . . . . . . . . 15
ARTICLE X. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . 15
SECTION 10.01 FORCE MAJEURE . . . . . . . . . . . . . . . . . . . 15
SECTION 10.02 COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . 15
SECTION 10.03 MEDIA RELEASES. . . . . . . . . . . . . . . . . . . 15
SECTION 10.04 NOTICES . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 10.05 RIGHTS OF ACI TO PROVIDE SERVICES TO OTHERS . . . . 16
SECTION 10.06 RELATIONSHIP OF PARTIES . . . . . . . . . . . . . . 16
SECTION 10.07 AUTHORIZATION . . . . . . . . . . . . . . . . . . . 16
SECTION 10.08 SEVERABILITY. . . . . . . . . . . . . . . . . . . . 17
SECTION 10.09 WAIVERS . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 10. 10 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . 17
SECTION 10. 11 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . 17
SECTION 10. 12 No THIRD PARTY BENEFICIARY . . . . . . . . . . . . 18
SECTION 10. 13 GOVERNING LAWNENUEJURISDICTION . . . . . . . . . . 18
SECTION 10. 14 CONSTRUCTION . . . . . . . . . . . . . . . . . . . 18
SECTION 10. 15 COUNTERPARTS . . . . . . . . . . . . . . . . . . . 18
ii
SCHEDULES:
SCHEDULE 2.01 ACCEPTABLE CALL TYPES . . . . . . . . . . . . . . . 19
SCHEDULE 3.01 BILLING SERVICES. . . . . . . . . . . . . . . . . . 20
SCHEDULE 3.02 BILLING RELATED SERVICES. . . . . . . . . . . . . . 30
SCHEDULE 3.03 ADDITIONAL SERVICES . . . . . . . . . . . . . . . . 32
SCHEDULE 3.04 SAFEGUARDING AND RETENTION OF CUSTOMER DATA . . . . 33
SCHEDULE 4.01 TERM AND COMPENSATION To ACI. . . . . . . . . . . . 34
SCHEDULE5.01 CUSTOMER BILLING OBLIGATIONS . . . . . . . . . . . . 37
SCHEDULE 5.07 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 39
iii
BILLING AND RELATED SERVICES AGREEMENT
This Billing and Related Services Agreement (the "Agreement"), dated as of
September 1, 2001 (the "Effective Date"), is between ACI Communications, Inc., a
Delaware corporation ("Aff'), and XX.Xxx, Inc., a Nevada corporation
("Customer").
RECITALS:
WHEREAS, ACI is a party to various B&C Contracts (as defined below);
WHEREAS, Customer provides various telecommunications services directly or
indirectly to End Users (as defined below) and desires to utilize the B&C
Contracts to xxxx End Users for certain of such services provided by Customer
and such other services as may be offered by ACI; and
WHEREAS, ACI desires to assist Customer, through the use of its B&C
Contracts and other information technology capabilities, in billing End Users
and providing other services, all upon the terms and subject to the conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1. AGREEMENT AND TERM
Section 1.01 Agreement
During the Term (as defined below), ACI will provide to Customer, and Customer
will purchase from ACI, the Services, all upon the terms and subject to the
conditions set forth in this Agreement.
Section 1.02 Term and Renewal
(a) The term of this Agreement shall be for thirty-six (36) calendar months
commencing on the first day a Message is forwarded to ACI by Customer for
Services (the "Services Commencement Date") (the "Terrrf'). On or after the
Effective Date, Customer will subrnit its Messages (as defined below) and
related data to ACI for Services under this Agreement and ACI will, during the
Term, be the provider of such Services to Customer. The last day of the Term as
so determined will be referred to as the expiration date ("Expiration Date").
(b) Notwithstanding the provisions of Section 1.02(a), the Term will
automatically be extended for successive one-year periods after the Expiration
Date unless either of the parties notifies the other party in writing at least
ninety (90) days prior to the Expiration Date, or at least ninety (90) days
prior to the end of any such one-year extension period, as the case may be, that
the Term will not be so extended.
1
ARTICLE 11. DEFINITIONS
Section 2.01 Definitions
As used in this Agreement (including the Schedules attached to this Agreement),
the terms set forth below will have the following respective meanings and will
be equally applicable to both the singular and plural forms of the terms
defined:
"ACI" has the meaning set forth in the preamble of this Agreement.
"ACI Software" means any Software that is owned by ACI (and not proprietary to
any other party), including but not limited to the ProAct software, and operated
by ACI in connection with the providing of Services pursuant to Section 6.01 of
this Agreement.
"Additional Services" has the meaning set forth in Section.3.01.
"Agreement" has the meaning set forth in the preamble hereof.
"Approved Message Format" has the meaning set forth in Section l(c) of Schedule
3.01.
"B&C Contract" means any contract or agreement to which ACI is a party relating
to billing and collection services.
"B&C Processor" means a LEC (as defined below) or other entities with which ACI
has a B&C Contract.
"B&C Processor-Calculated Taxes" has the meaning set forth in Section 3(a) of
Schedule 3.01.
"B&C Processor Fees" means any fee charged by a B&C Processor.
"B&C Processor Policies" means those current and revised policies required by
the B&C Processors on ACI and required of ACI's customers.
"Base Index" has the meaning set forth in Section 4.03.
"Billable Messages" means those Messages that: (i) consist of telephone calls to
be billed to telephone numbers having NPA area code numbers and NXX code prefix
numbers that (a) are listed on ACI's then current On-Net File and (b) have not
been rejected by ACI and (c) are in an acceptable calltype, as identified in
Schedule 2.01 hereto; or (ii) any other service(s) provided to End Users which
are billed to an End User by the B&C Processors and which have been approved for
billing by the applicable B&C Processor and ACI. Notwithstanding the foregoing,
Messages that do not otherwise meet the tenns of this Agreement will not be
accepted by ACI for billing.
"Billing Services" has the meaning set forth in Section 3.01.
"Billing Services Charges" has the meaning set forth in Section 4.01.
"Billing-Related Services" has the meaning set forth in Section 3.01.
"Billing-Related Services Charges" has the meaning set forth in Section 4.01.
2
"Business Day" means any day except a Saturday, Sunday, or other day on which
national banking associations in Los Angeles, California are authorized or
required by law to close.
"Certifications" has the meaning set forth in Section 5.04.
"Complaint Processing Services" has the meaning set forth in Section 2 of
Schedule 3.02.
"Confidential Information" has the meaning set forth in Section 6.03.
"CPI" has the meaning set forth in Section 4.03.
"Current Index" has the meaning set forth in Section 4.03.
"Customer-Calculated Taxes" has the meaning set forth in Section 2(a) of
Schedule 5.01.
"Customer Data" means the data specific to the business, customers, and End
Users of Customer with respect to which Services are to be provided under this
Agreement.
"Customer Representative" has the meaning set forth in Section 5.06.
"Data Files" has the meaning set forth in Section l(e) of Schedule 3.01.
"Deduction" has the meaning set forth in Section 2(f) of Schedule 3.0l
"Disbursements" has the meaning set forth in Section 2(b) of Schedule 3.01.
"Effective Date" has the meaning set forth in the preamble of this agreement.
"End User" means the ultimate customer of the telephone or information services
provided by Customer.
"Equipment" has the meaning set forth in Section 4 of Attachment I to Schedule
3.0 1
"Expiration Date" has the meaning set forth in Section 1.02(a).
"FCC" means the Federal Communications Commission.
"Foreign Intrastate Taxes" means all local and state intrastate levies,
surcharges, taxes, or tax-like charges applicable to each Message that
originates and terminates within the same state and that is billed to an End
User residing in any other state.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, judicial,
regulatory, or administrative functions of or pertaining to government
(including, without limitation, the FCC and any PUC (as defined below)).
"Inquiry Services" has the meaning set forth in Section I of Schedule 3.02.
3
"Late Payment Rate" means an annual rate of interest equal to the lesser of (a)
4% per annum more than the prime rate established from time to time by Citibank,
N.A., New York, New York, or (b) the maximum rate of interest allowed by
applicable law.
"Laws" has the meaning set forth in Section 5.04.
"LEC" means any Xxxx Operating Company, independent local exchange company, or
provider of local telephone services that is a party to a B&C Contract through
which ACI is able to provide Billing Services.
"License" means the license granted during the Term by ACI to Customer pursuant
to Section I of Attachment 2 to Schedule 3.01.
"Licensed Program" means the ProAct program licensed to Customer by ACI.
"Message" means a call record for direct dialed calls, operator-assisted third
party calls, collect calls, telephone calling card calls, person-to-person
calls, and such other legally permitted telephone calls and services as the
parties may mutually agree, each of which was originated by an End User through
Customer.
"Minimum Message Requirement" means the obligation of Customer to submit to ACI
for billing at least the number of Billable Messages each month during the Term
specified in Section l(b) of Schedule 4.01.
"On-Net File" means the listing from time to time of (a) NPA area code numbers
and NXX prefix numbers and (b) Special Calling Card Numbers applicable to the
LECs.
"Person" means any individual, corporation, partnership, joint venture,
association, trust, or any other entity or organization of any kind or
character, including a Governmental Authority.
"PUC" means the public utility commission, public service commission, or similar
commission or agency of any state exercising authority over telecommunications
services.
"Refund" has the meaning set forth in Section 2(f) of Schedule 3.01.
"Rejected Messages" has the meaning set forth in Section l(d) of Schedule 3.01.
"Remittances" has the meaning set forth in Section 2(a) of Schedule 3.01.
"Reserve" means the reserve for bad debts established by ACI upon expiration or
termination of this Agreement pursuant to Section 2(c) of Schedule 3.01.
"Reserve Event" has the meaning set forth in Section 2(c) of Schedule 3.01.
"Returned Messages" has the meaning set forth in Section l(f) of Schedule 3.01.
"Services" means the services to be provided by ACI pursuant to this Agreement,
consisting of the Billing Services, the Billing-Related Services, and the
Additional Services.
4
"Services Commencement Date" has the meaning set forth in Section 1.02(a).
"Software" means: (a) computer programs, including without limitation software,
application programs, operating systems, files, and utilities; (b) supporting
documentation for such computer programs, including without limitation input and
output formats, program listings, narrative descriptions, and operating
instructions; and (c) the tangible media upon which such programs and
documentation are recorded, including without limitation hard copy, tapes, and
disks.
5
"Special Calling Card Numbers" means non-line number-based calling card numbers
applicable to the LECs from time to time.
"Special Service Message" has the meaning set forth in Section 1(h) of Schedule
3.01.
"Sub-CIC" has the meaning set forth in Section l(g) of Schedule 3.01.
"System" has the meaning set forth in Section 4(a) of Schedule 3.01.
"Taxes" means any taxes, however designed or levied, based upon amounts payable
to ACI pursuant to this Agreement, including state, local and federal taxes, and
any taxes or amounts in lieu thereof paid or payable by ACI in respect of the
foregoing, exclusive, however, of franchise taxes, taxes based on the net income
of ACI and taxes on any property owned or leased by ACL
"Tax Returns" means returns, declarations, reports, claims for refund, and
informational returns or statements relating to Taxes, including any schedules
or attachments thereto.
"Terin' 'has the meaning set forth in Section 1.02(a).
"True-Up Reconciliation" has the meaning set forth in Section 2(f) of Schedule
3.01.
"True-Up Reserve" has the meaning set forth in Section 2(c) of Schedule 3.01.
ARTICLE 111. ACI'S OBLIGATIONS
Section 3.01 Billing Services
With respect to the Billable Messages Customer delivers to ACI, ACI, as a
limited agent for Customer, agrees to provide the billing and collection
services described in Schedule 3.01 (the "Billing Services") to Customer
pursuant to this Agreement. ACI may provide the billing inquiry and complaint
processing services described in Schedule 3.02 (the "Billing-Related Services")
and any other services mutually agreed upon in writing becoming a part of
Schedule 3.03 ("Additional Services"). Customer acknowledges and agrees that ACI
is not deemed a fiduciary, trustee, employee, or joint venturer in its
performance of this Agreement.
Section 3.02 Safe2uarding and Retention of Customer Data
ACI will maintain safeguards against the destruction, loss, or alteration of the
Customer Data in the possession of ACL
6
ARTICLE IV. PAYMENTS TO ACI
Section 4.01 Compensation to ACT
In consideration for the Services, Customer shall pay to ACI the Billing
Services Charges described in Section I of Schedule 4.01 (the "Billing Services
Charges"), charges for any Billing-Related Services provided to Customer as
described in Sections 2 and 3 of Schedule 4.01 (the "Billing-Related Services
Charges") and any charges for Additional Services as set forth in any Schedule
3.03, as may be amended by ACI from time to time, (the "Additional Services
Charges"). Customer acknowledges and agrees that ACI may deduct Billing Services
Charges, Billing-Related Services Charges and Additional Services Charges from
the Remittances it receives from the B&C Processors prior to forwarding the
Disbursements to Customer. Any amounts owing to ACI pursuant to this Agreement
that are not paid when due and payable will thereafter bear interest until paid
at the Late Payment Rate.
Section 4.02 Other Expenses
Customer will pay all fees and expenses of ACI for reruns or otherwise
necessitated: (a) by incorrect, incomplete, or omitted data or erroneous
instructions supplied to ACI by or through Customer; (b) for the correction of
programming, operator, and other processing errors caused by Customer, or its
respective employees or agents; and/or (c) by incorrect reports that were not
rejected by Customer within the applicable time periods set forth in Section
5.03.
Section 4.03 Cost of Living Adeustment
If the Consumer Price Index for All Urban Consumers, All Cities Average,
1982-84=100, as published by the Bureau of Labor Statistics of the Department of
Labor (the "CPI"), is on January I of any year during the Term (the "Current
Index") higher than the highest CPI on January 1 of any prior year during the
Term (the "Base Index"), then, effective as of such January 1, all amounts
payable to ACI pursuant to this Agreement, as previously adjusted pursuant to
this Section 4.03, may be increased thereafter by the percentage that the
Current Index will have increased from the Base I~dex, and such amounts as
increased pursuant to this Section 4.03 will be deemed incorporated herein. If
the Bureau of Labor Statistics stops publishing the CPI or substantially changes
the content or format thereof, the parties will substitute therefor another
comparable measure published by a mutually agreeable source; provided, however,
that if such change is merely to redefine the base year for the CPI from 1982-84
to some other year(s), the parties will continue to use the CPI but will, if
necessary, convert either the Base Index or the Current Index to the same basis
as the other by multiplying such Index by the appropriate conversion factor.
Section 4.04 Reimbursement of Expenses
Any addition to any other payments specified in this Agreement, Customer will
pay, or reimburse ACI for, all actual out-of-pocket costs and expenses,
including without limitation travel and travel-related expenses, incurred by ACI
in connection with the performance of its obligations under this Agreement
provided such expenses are approved in advance by Customer which approval cannot
be unreasonably withheld or delayed.
7
Section 4.05 Pass-Throu2h of Certain Taxes
There will be added to any amounts due under this Agreement, and Customer will
pay directly (or if ACI has for any reason made payment, promptly reimburse ACI)
for any Taxes, however designated or levied by any Governmental Authority solely
by reason of the performance, sales, license or use of any Service (or Software)
or any other items pursuant to this Agreement. To the extent ACI receives or
becomes entitled to any refund, rebate or abatement with respect to Taxes paid
directly (or reimbursed) by Customer, ACI shall promptly pay to Customer the
entire refund, rebate or abatement.
Section 4.06 Invoice and Time of Payment.
Any amount due ACI pursuant to this Agreement for which a time for payment is
not otherwise specified will be due and payable thirty (30) days after receipt
by Customer of the invoice from ACI therefore, all invoiced amounts due ACI
pursuant to, and not paid in accordance with, this Agreement may be deducted by
ACI from the Remittances it receives from the B&C Processors prior to forwarding
the Disbursements to Customer. Any amount owing to ACI pursuant to this
Agreement that is not paid when due and payable will thereafter bear interest
until paid at the Late Payment Rate.
ARTICLE V. CUSTOMER OBLIGATIONS
Section 5.01 Billing Obli2ations
In connection with the Services to be provided by ACI and in addition to any of
Customer's obligations described in Schedule 3.01, Customer will timely perform
those obligations described in Schedule 5.01 and Schedule 5.07.
Section 5.02 Validation Obli2ations
During the Term, Customer will at all times perform, or cause to be performed
where appropriate, call validation and Customer will only submit Messages to ACI
that have received a positive validation as provided below:
During the Term, Customer will validate, or cause to be validated, using an
ACI-approved method, or will cause to be validated by an ACI-approved vendor,
the following: (a) All telephone calls for which validation is mandated by a
Governmental Authority; (b) All telephone calls for which validation is
specifically required by a B&C Processor pursuant to a B&C Contract; (c) All
operator assisted third party calls (whether automated or assisted by telephone
operator), collect calls, telephone calling card calls, person-to-person calls;
and (d) All telephone calls, the collection for which is deemed to be below
industry standards or not in accordance with industry practice.
8
Section 5.03 Inspection of Reports and Remittances
Customer will inspect and review all reports and Remittance information
submitted by ACI to Customer for review, which includes, but is not limited to,
reports generated through the Licensed Program, and will notify ACI of its
rejection of any incorrect reports and Remittance information within thirty (30)
days after receipt thereof provided that any such incorrect information is
identifiable within the report and/or Remittance information. Failure to so
reject any such report or information will constitute acceptance thereof.
Section 5.04 Compliance with Law and B&C Processor Policies
Customer will: (a) obtain and maintain all licenses, franchises, privileges,
permits, consents, exemptions, certificates (including without limitation
certificates of public convenience and necessity), registrations, orders,
approvals, authorizations and similar documents and instruments (collectively,
the "Certifications") that are required by any Governmental Authority having
jurisdiction over the business and operations of Customer; (b) comply with all
laws and all applicable rules, regulations and other requirements of any
Governmental Authority (collectively "Laws"); and (c) B&C Processor Policies.
Customer will, upon the execution of this Agreement, provide ACI with a copy of
each such Certification or other written evidence of compliance with such
requirements by Customer. Customer will promptly notify ACI in writing of any
expiration, amendment, or renewal of any such Certification. In connection with
the provision of services to End Users, Customer will comply in all respects
with the Certifications and Laws related thereto. ACI may terminate this
Agreement pursuant to Section 8.01 upon the failure of
XX.Xxx, Inc. 7 xxx-
YP. Net B&C 092001 initials
Draft Date: 10/1/2001
Initials
Customer to obtain or maintain in full force and effect, or to comply with, any
such Certification and/or Laws.
Customer understands and agrees that any program, service, and/or product that
it desires to xxxx via any B&C Processor must be first approved by ACI and the
applicable B&C Processor. Customer agrees to submit any and all information
relating to any and all such programs, services, and/or products of Customer
requested by ACI. Customer understands and agrees that ACI may provide all the
information set forth in the previous section to any B&C Processor, which such
provision is not a breach of Section 6.03 of this Agreement.
Section 5.05 Data Transmission Fees
Customer is responsible for all charges attributed to the transmission of data
between ACI and the Customer and ACI and the B&C Processor. In addition,
Customer is responsible for the acquisition and provision of any equipment
including, without limitation, terminals, printers and modems (but excluding any
data telecommunication lines or equipment at or between any ACI data centers),
that are necessary or appropriate for Customer to access Customer data at any
ACI data center. Customer is solely responsible for entering into arrangements
with data telecominunication network carriers for the provision of access to
such networks and pay any usage costs or charges relating thereto, as may be
necessary or appropriate for Customer to access Customer data at any ACI data
center.
9
Section 5.06 Customer Representative
Upon the Effective Date, Customer will designate and furnish to ACI the name of,
and will at all times during the Term maintain, a representative of Customer
(the "Customer Representative") who will be an officer or employee of Customer
and who will be authorized to act as the primary point of contact for ACI in
dealing with Customer with respect to the Services. Customer will notify ACI in
writing of any change in the person acting as the Customer Representative at
least ten (10) days prior to the effectiveness of such change. The Customer
Representative will be responsible for directing, insofar as ACI is concerned,
all activities of Customer affecting the provision by ACI of the Services. ACI
will be entitled to rely upon any instructions or information provided to ACI by
the Customer Representative or other representative of Customer, and ACI will
incur no liability in so relying. Customer hereby agrees and confirms that
Customer is fully responsible financially and otherwise for all instructions,
data, and/or information provided to ACI, whether or not such instructions,
data, and/or information is accurate, complete, truthful, or genuine.
Section 5.07 Representations and Warranties
Customer hereby represents and warrants to ACI as follows:
(a) Organization; Authority. Customer is duly organized, validly existing,
and in good standing under the laws of its state of organization and has the
power and authority to enter into this Agreement and to perform its obligations
hereunder.
(b) Binding Obligation. This Agreement constitutes the legal, valid, and
binding agreement of Customer, enforceable against Customer in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws now or hereafter in effect relating
to creditors' rights and general principles of equity.
(c) No Conflicts. Neither the execution and delivery of this Agreement
by Customer nor the performance by Customer of its obligations hereunder will
(i) conflict with or result in a breach of any
provision of the organizational or other governing documents of Customer, (ii)
result in a violation of or default under any of the terms, conditions, or
provisions of any material license, agreement, lease, or other obligation to
which Customer is a party or by which it is bound or (iii) violate any material
order, writ, injunction, decree, statute, rule, or regulation applicable to
Customer or its properties or assets.
(d) Governmental Consents. Customer has filed all tariffs and has obtained
all governmental and regulatory authorizations, approvals, and other consents,
all of which are in full force and effect, that are required by law or any
Governmental Authority for the provision by Customer of telecommunications
services to End Users.
(e) Additional Representations Warranties, Covenants and Agreements of
Customer. Customer represents, warrants, and covenants as to those items in
Schedule 5.07.
10
(f) Continuing Warranty. Each submission by Customer of a Message to
ACI for processing is a reaffirmation of each representation and warranty of
Customer as of the date of each such submission.
Section 5.08 Priorities and Cooperation.
Customer will cooperate with ACI: (a) to establish the Services to be
provided to Customer; and (b) act in good faith in the performance of Customer's
activities contemplated by this Agreement, Customer, among other things, will
make available, as reasonably requested by ACI, such information, facilities,
management decisions, approvals, authorizations and acceptances in order that
ACI's provision of Services under this Agreement may be accomplished in a
proper, timely and efficient manner.
ARTICLE VI. PROPRIETARY RIGHTS, SOFTWARE, AND DATA
Section 6.01 ACI Software
The ACI Software, any developments, improvements, modifications, additions, or
enhancements made by or for ACI to any ACI Software and any new Software
developed or created by or for ACI pursuant to this Agreement will be and will
remain solely ACI's property, as appropriate. Customer will have no ownership
rights or other rights to any of such items, except as expressly set forth in
Attachment 2 of Schedule 3.01 with respect to the License.
Section 6.02 Maintenance and Security of Customer Data
Customer will establish one year's backup of the Customer Data subn-fitted to
ACI for billing and will keep backup data and data files in its possession;
provided, however, that ACI will have such access to any such backup data and
data files as is reasonably required by ACI in connection with the performance
of the Services. ACI will require users of the Software operated by ACI to enter
a valid password in order to gain access to certain applications, functions and
databases that contain the Customer Data. ACI will secure the Customer Data
using Software that restricts access to the Customer Data and assists in the
administration of the security of the Customer Data. ACI will have the right to
retain copies of any Customer Data that ACI deems necessary or appropriate for
the purpose of performing any services under this Agreement including, without
limitation, with respect to remittance processing services performed in
accordance with Section 2 of Schedule 3.01 hereto.
Section 6.03 Confidentiality
Except as otherwise provided in this Agreement, each of the parties agree that
all information communicated to it by the other party, whether before or after
the Effective Date, will be designated confidential information ("Confidential
Information"), and will be deemed to have been, received in strict confidence
and will be used only for the purposes of carrying out the obligations of, or as
otherwise contemplated by, this Agreement. Without obtaining the prior written
consent of the other party, neither party will disclose any such Confidential
Information received from the other party; provided, however, that this Section
6.03 will not prevent a party from disclosing any such information that: (a) was
already in the possession of such party without being subject to other
confidentiality obligations; (b) is or becomes generally available to the public
other than as a result, directly or indirectly, of a disclosure of such
Confidential Information by such party or by other persons to whom such party
disclosed such information; (c) is or becomes available to such party on a
nonconfidential basis from a source other than the other party or its
representatives, provided that such source is not bound by a confidentiality
agreement with the other party; (d) is independently developed by such party
without the use of the other party's Confidential Information; (e) is required
to be disclosed pursuant to an arbitration proceeding conducted in accordance
with Article VII, provided that such disclosure is made in accordance with the
approval and at the direction of the Arbitrator; (f) is required to be disclosed
pursuant to a requirement of any Governmental Authority or any statute, rule, or
regulation, provided that such party gives the other party prompt notice of such
requirement prior to any such disclosure; or (g) is reasonably necessary to be
disclosed in connection with a billing inquiry by an End User.
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ARTICLE VII. CLAIM REVIEW AND ARBITRATION
Section 7.01 Claim Review
In the event of any dispute, controversy, or claim between the parties of any
kind or nature, including but not limited to disputes arising under or in
connection with this Agreement (including disputes as to the creation, validity,
interpretation, breach, or termination of this Agreement) (the "Claim"), then,
upon the written request of either party, each of the parties will appoint a
senior manager designated to meet for the purpose of endeavoring to resolve such
Claim. The designated representatives will meet as often as the parties
reasonably deem necessary to gather and furnish to the other all information
with respect to the matter in issue that the parties believe to be appropriate
and germane in connection with its resolution. Such representatives will discuss
the Claim and negotiate in good faith in an effort to resolve the Claim. During
the course of such negotiation, all reasonable requests made by one party to the
other party for information will be honored in order that each of the parties
may be fully advised as to the facts and circumstances surrounding the Claim.
However, the parties acknowledge and agree that it is costly and time consuming
to retrieve certain historical data. Therefore, the parties acknowledge and
agree that only data routinely provided from one party to another during a
designated Claim period shall be required. The specific format for such
discussions will be left to the discretion of the designated representatives but
may include the preparation of agreed upon statements of fact or written
statements of position furnished to the other party. No formal proceedings for
the resolution of such Claim may be commenced until the earlier to occur of: (a)
the designated representatives conclude in good faith that an amicable
resolution through continued negotiation of the matter in issue does not appear
likely; or (b) the sixtieth (60'b) day after the initial request to negotiate
such dispute, controversy, or claim. The Parties agree that no Claim(s) older
than one (1) year from inception or discovery of such Claim(s) shall be pursued
in any manner.
Section 7.02 Arbitration
(a) If the parties are unable to resolve any Claim in accordance with Section
7.01, the parties agree to submit such Claim 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.
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(b) Discovery shall be controlled by the arbitrator and shall be governed by the
Federal Rules of Civil Procedure. If decided by the Arbitrator, the party
seeking discovery shall reimburse the responding party for the cost of the
production of documents, including search time and reproduction costs. The
arbitration shall be held in Los Angeles County, California. 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 Claim by
issuing a written opinion within thirty (30) calendar days after the close of
the hearings. The time frames specified in this Section 7.02 may be extended
upon mutual agreement of the parties or by the arbitrator upon a showing of good
cause.
(c) Except as provided in (b) above, each party shall bear its own fees, costs
and expenses of arbitration, including its own legal and expert witness fees.
The parties shall equally split the fees of the arbitration and the arbitrator.
The arbitrator may award reimbursement of costs and/or fees to the prevailing
party.
(d) Any award rendered by the arbitrator will be final, conclusive, and binding
upon the parties, and any judgment thereon may be entered and enforced in any
court of competent jurisdiction.
Section 7.03 Exclusive Remedy
Other than those matters involving injunctive relief as a remedy or any action
necessary to enforce the award of the Arbitrator, the parties agree that the
provisions of this Article VII are a complete defense to any suit, action, or
other proceeding instituted in any court or before any administrative tribunal
with respect to any dispute, controversy, or claim arising under or in
connection with this Agreement or the provision of Services by ACI. Nothing in
this Article VII will prevent the parties from exercising their rights to
tertninate this Agreement in accordance with Article VIII.
Section 7.04 Tax Disputes
Notwithstanding the provisions of this Article VII, if Customer disputes ACI's
determination that any Taxes are payable by ACI on ACI's behalf or on behalf of
Customer, disagrees with an assessment of any additional Taxes due by ACI or by
Customer as a result of ACI's performance of any obligation under this Agreement
or disagrees with a determination that any Taxes are applicable to ACI's billing
to Customer for Services under this Agreement, Customer will, at Customer's
option and expense (including without limitation payment for any Taxes prior to
final resolution of the issues), have the right to seek administrative relief, a
ruling, judicial review (original and appellate level), or other appropriate
review as to the applicability of any such Tax or to protest any such Tax, but
Customer will be liable for any Tax ultimately determined to be due. ACI will,
when requested by Customer and at Customer's expense, cooperate or participate
with Customer in any such proceeding, protest or legal challenge and may
participate, at ACI's expense, in any such proceeding, protest or legal
challenge if Customer does not so request.
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ARTICLE VIII. TERMINATION
Section 8.01 Termination for Cause
Subject to Section 10.01, if either party materially or repeatedly defaults in
the performance of any of its duties or obligations under this Agreement, which
default is not substantially cured within twenty (20) business days after
written notice is given to the defaulting party specifying the default, then the
nondefaulting party may, by giving written notice thereof to the defaulting
party, terminate this Agreement as of the date of receipt by the defaulting
party of such notice or as of a future date specified in such notice of
termination.
Section 8.02 Special Termination Riehts
Without notice, ACI may stop processing all or some of the Messages of Customer,
or terrifinate the Agreement (subject to Section 8.07 of the Agreement), if ACI
determines in its sole discretion that the processing of Messages on behalf of
Customer, or the continuation of the processing of Messages, in whole or in
part, has or shall:
(a) Negatively effect the goodwill, reputation, profitability, or business of
ACI.
(b)Threaten the termination of or negatively impact any B&C Contract of ACI.
(c) Negatively impact ACI's relationship with any B&C Processor.
(d) Result in or has already resulted in the scrutiny (informal or formal
investigation, or otherwise) of Customer, ACI, or any Person, by any
Governmental Authority (including but not limited to, the FCC, FTC, PUCs and
attorney generals).
(e) Has resulted in or may result in the violation of any rule, ordinance, Law,
order, decision, judgment, or policy of any Government Authority, any B&C
Processor and/or ACI.
(f) Has resulted in or may result in a legal proceeding, including but not
limited to litigation, arbitration or administrative proceeding involving ACI
either as a party or as a non-party (including, but not limited to, ACI having
to provide documents and/or deponents).
Section 8.03 Termination for Bankruptcy and Related Events
If either party is declared bankrupt, is the subject of any proceedings relating
to its liquidation, insolvency, or for the appointment of a receiver or similar
officer for such party, makes an assignment for the benefit of all or
substantially all of its creditors, or enters into an agreement for the
composition, extension, or readjustment of all or substantially all of its
obligations, the liquidator, trustee, receiver, conservator, new owner, manager,
or other agent or representative of such party, subject to applicable law, will
have sixty (60) days from the date of any initial declaration, commencement of
proceedings, or such assignment or agreement to notify the other party, subject
to applicable law, that it is terminating this Agreement as of a date within
such sixty (60) day period. If the other party is not so notified, this
Agreement will not be terminated but will continue in full force and effect on
all of the terms and conditions stated in this Agreement.
Section 8.04 Termination for Certain Force Maieure Events
If either party is excused from performance under this Agreement pursuant to
Section 10.01 for any period exceeding thirty (30) consecutive days, the other
party may, by giving written notice thereof to the party whose performance will
have been excused within ten (10) days after the expiration of such thirty (30)
consecutive day period, terminate this Agreement as of the date of receipt of
such notice or as of a future date specified in such notice of termination. The
parties expressly acknowledge and agree that any such nonperformance will not be
considered a default under this Agreement or impose any liability whatsoever
upon either of the parties.
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Section 8.05 Termination for Regulatory Event and/or LEC Policies
ACI may terminate this Agreement if any statute, rule, regulation,
interpretation, Law, LEC Policy violation, judgment, order, or injunction is
enacted, enforced, promulgated, amended, issued, or deemed applicable: (a) to
ACI or any of its affiliates; or (b) to this Agreement, the transactions
contemplated by this Agreement, or the provision of the Services by ACI, by any
Governmental Authority that (i) renders illegal the consummation of the
transactions contemplated by this Agreement, (ii) renders illegal or materially
inhibits the provision of the Services by ACI, or (iii) would, in ACI's sole
discretion, have a material adverse effect on the business, operations,
reputation, affairs, condition (financial or otherwise), results of operations,
properties, assets, liabilities, or prospects of ACI. To terminate this
Agreement pursuant to this Section 8.05 ' ACI will give Customer written notice
thereof at least thirty (30) days prior to the date on which ACI desires to
terminate this Agreement, unless statutes, regulations or B&C Processor Policies
require immediate termination.
Section 8.06 Rh!hts Upon Termination
Billable Messages received by ACI on or before the Expiration Date or the
effective date of termination of this Agreement will be processed by ACI and
included on the next Outclearing Tapes prepared in accordance with Section l(e)
of Schedule 3.01, and the Disbursements relating to the Remittances collected
from the B&C Processors will be disbursed to Customer, less amounts representing
the Reserve. Upon expiration or termination of this Agreement for any reason,
Customer will (a) promptly return the Licensed Program (including the related
documentation) to ACI and destroy all copies, whether authorized or
unauthorized, in Customer's possession, and (b) pay ACI for all Services
provided and expenses incurred through the effective date of such expiration or
termination, as well as for all Services provided and expenses incurred
thereafter in connection with the processing of Billable Messages received on or
before the effective date of such expiration or termination. The provisions of
this Section 8.06, Section 6.03, Articles VII and IX, Schedule 3.01 and Schedule
3.02 will survive the expiration or termination of this Agreement for any
reason.
Section 8.07 Suspension of Service
Notwithstanding anything to the contrary in this Agreement, in lieu of
tennination of this Agreement by ACI, ACI in its sole discretion may suspend its
Services, in whole or in part, without prejudice to its right to subsequently
terminate this Agreement for the same reason or different reason that gave rise
to the suspension.
ARTICLE IX. INDEMNITIES AND LIABILITY
Section 9.01 Indemnities
Customer will indemnify, and defend ACI and will hold ACI harmless from and
against any and all claims, actions, acts of third parties, liabilities,
litigations, losses, expenses (including but not limited to attorney's fees
whether in-house or outside), all damages (including but not limited to
consequential and/or punitive, and/or damages for loss of profits and/or for
loss of revenue), costs and expenses (including without limitation reasonable
attorney fees), and liability for any equitable remedies (including but not
limited to injunctive relief and/or specific performance), due to, relating to,
or arising out of: (i) the Messages processed on behalf of Customer, and/or (ii)
any acts or omissions of Customer, and/or (iii) the occurrence of any of the
items set forth in Section 8.02 of this Agreement, and/or (iv) any violation of
any representation, covenant or warranty of Customer set forth in this
Agreement, or any other Agreement between Customer and ACI, and/or (v) any
breach by Customer of any provision of this Agreement or any other agreement
between ACI and Customer, and/or (vi) the incorrectness or incompleteness of any
data or information supplied to ACI by Customer under this Agreement, and/or
(vii) ACI's use, in accordance with this Agreement, of, and reliance upon,
information provided by Customer.
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Section 9.02 Indemnity Procedures
Any party entitled to indemnification under this Article Ix will give the party
from which it is seeking indemnification prompt written notice of any matters in
respect of which the indemnity may apply and of which the party claiming
indemnification has knowledge; provided, however, that if a party claiming
indemnification fails to give the other party prompt written notice, such other
party will only be relieved of its obligations under this Article IX if and to
the extent that such party is prejudiced thereby. if ACI is named by a third
party in a legal proceeding resulting from Customer's Billed Messages, acts or
omissions pursuant to this Agreement, ACI shall, due to ACI's expertise in the
billing industry, solely control its own defense and Customer shall be liable
for all costs and expenses including attorneys' fees. ACI shall provide Customer
with invoices of actual costs and expenses incurred on a monthly basis, prior to
deducting such costs and expenses. Should deductions be insufficient, ACI shall
invoice Customer for sums due and such invoice shall be due and payable upon
receipt.
Section 9.03 Limitation of Liability and Disclaimer of Warranties
If ACI is at any time liable to Customer as a result of any breach, dispute,
controversy, or claim of any kind or nature arising under or in connection with
this Agreement, the amount of damages recoverable against ACI for any and all
events, acts, or omissions will not exceed, in the aggregate, an amount equal to
the total Billing Services Charges paid to ACI during the three-month period
immediately preceding the initial occurrence of the first such event, act, or
omission to occur. NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT TO THE
CONTRARY, AND REGARDLESS OF THE FORM OF CLAIM, WHETHER IN CONTRACT OR IN TORT OR
WHETHER FROM BREACH OF THIS AGREEMENT, IRRESPECTIVE OF WHETHER ACI HAS BEEN
ADVISED OR SHOULD BE AWARE OF THE POSSIBILITY OF SUCH DAMAGES, IN NO EVENT WILL
THE MEASURE OF DAMAGES RECOVERABLE BY CUSTOMER AGAINST ACI INCLUDE ANY AMOUNTS
FOR INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES OF ANY PERSON OR FOR LOSS OF
ANTICIPATED PROFITS OR OTHER ECONOMIC LOSS OF ANY PERSON OR FOR DAMAGES THAT
COULD HAVE BEEN AVOIDED, USING REASONABLE DILIGENCE, BY CUSTOMER. In addition,
Customer may not assert any cause of action against ACI that accrued more than
one year prior to the filing of a suit alleging such cause of action. The
limitation set forth in this Section 9.03 will not apply to the duty of ACI to
deliver, in accordance with this Agreement, to Customer any Disbursements due
Customer that are being held by AC1.
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EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, ACI MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, TO CUSTOMER OR TO ANY OTHER
PERSON, INCLUDING WITHOUT LIMITIATION ANY WARRANTIES REGARDING TITLE TO OR THE
MERCHANTABILITY, SUITABILITY, ORIGINALITY, FITNESS FOR A PARTICULAR PURPOSE, OR
OTHERWISE (IRRESPECTIVE OF ANY PREVIOUS COURSE OF DEALING BETWEEN THE PARTIES OR
CUSTOM OR USAGE OF TRADE) OF ANY SOFTWARE, SERVICES, OR MATERIALS PROVIDED UNDER
THIS AGREEMENT.
Section 9.04 Acknowledgment
Customer and ACI expressly acknowledge that the limitations contained in Section
9.03 represent the express agreement of the parties with respect to the
allocation of risks between the parties, including the level of risk to be
associated with the provision of the Services as related to the payments to be
made to ACI for such Services, and each party irrevocably accepts such
limitations.
ARTICLE X. MISCELLANEOUS
Section 10.01 Force Maieure
Each party will be excused from performance under this Agreement for any period,
and the time of any performance will be extended, to the extent reasonably
necessary under the circumstances, any act of God or any Governmental Authority
or any outbreak or escalation of hostilities, war, civil disturbance, court
order, labor dispute, third party nonperformance (including without limitation
the acts or ornissions of common carriers, interexchange carriers or B&C
Processors, but excluding any employees of the party seeking to be excused from
performance hereunder) or any other cause beyond its reasonable control,
including without limitation failures or fluctuations in electrical power, heat,
light, air conditioning or telecommunications equipment or lines or other
equipment. Such nonperformance on the part of either party will not be
considered a default under this Agreement or, except as otherwise provided in
Section 8.04, a ground for termination of this Agreement, provided that the
party whose performance has been excused performs such obligation as soon as is
reasonably practicable after the termination or cessation of such event or
circumstance.
Section 10.02 Compliance with Laws
In performing its obligations under this Agreement, ACI will not be required to
undertake any activity that would conflict with LEC Policies, the requirements
of any applicable statute, rule, regulation, interpretation, judgment, order or
injunction of any Governmental Authority or Law.
Section 10.03 Media Releases
All press and media releases, public announcements and public disclosures by
either of the parties relating to this Agreement or its subject matter,
including without limitation promotional or marketing material (but not
including any announcement intended solely for internal distribution by a party
to its directors, officers and employees or any disclosures required by legal,
accounting, regulatory or stock exchange requirements beyond the reasonable
control of such party) will be coordinated with and approved by both parties
prior to the release thereof.
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Section 10.04 Notices
Except as otherwise expressly provided in this Agreement, all notices, requests,
claims, demands, designations, approvals, consents, acceptances and other
communications under this Agreement will be in writing and will be deemed to
have been duly given if delivered personally, telecopied or mailed by certified
or registered mail, return-receipt requested, postage prepaid, or overnight mail
to the parties at the addresses specified below and will be deemed given on the
third Business Day after the day it is deposited in a regular depository of the
United States mail. If delivered personally, it will be deemed given upon
delivery, if delivered by telecopy with a copy subsequently mailed, it will be
deemed given when the mailed copy is postmarked and if delivered by mail, in the
manner described above. All notices and other communications under this
Agreement are addressed as provided below.
If to ACI, address to: With copies to:
ACI Communications, Inc. ACI Communications, Inc.
0000 Xxxxxx Xxxxxx 0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: President Attention: General Counsel
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
If to Customer, address to:
XX.Xxx, Inc.
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx, XX 00000
Attention: Xxxxxx Xxxxx, CEO
Telecopy: (000) 000-0000
Section 10.05 Rights of ACI to Provide Services to Others.
Customer acknowledges and agrees that ACI may provide billing and collection
services and other information technology services to other Persons.
Section 10.06 Relationship of Parties.
In furnishing the Services to, or on behalf of, Customer, ACI is acting only as
an independent contractor. ACI does not undertake by this Agreement or otherwise
to perform any obligation of Customer, whether regulatory or contractual, or to
assume any responsibility for Customer's business or operations. ACI will not be
considered or be deemed to be an agent, employee, joint venturer or partner of
Customer, and no other relationship is intended or created by and between ACI
and Customer. ACI has the sole right to supervise, manage, contract, direct,
procure and provide, or cause to be provided, all Services to be provided
pursuant to this Agreement.
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Section 10.07 Authorization.
Customer hereby authorizes ACI to include Customer's name, address, phone
number, and any other information required by any B&C Processor or Government
Authority, and billing information in each Outclearing Tape or xxxx; to collect
and hold for Customer the Disbursements, if any, payable to Customer; to
disburse to Customer the Disbursements, if any, as provided in this Agreement;
and to take
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all other actions that ACI deems reasonably necessary to discharge its duties
and responsibilities under this Agreement, as fully as Customer could do if
personally present, and Customer hereby ratifies and confirms all that ACI
lawfully does or causes to be done by virtue of the rights contained in this
Section 10.07. The authority granted to ACI under this Section 10.07 is coupled
with an interest and is irrevocable except by expiration or termination of this
Agreement and subject to Section 8.07.
Section 10.08 Severability
(a) Subject to the provisions of Section 10.08(b), if any provision of this
Agreement, or the application of any such provision is declared judicially to be
invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Agreement, it being the intent and
agreement of the parties that this Agreement will be deemed amended by modifying
such provision to the extent necessary to render it valid, legal and enforceable
while preserving its intent or, if such modification is not possible, by
substituting; therefore, another provision that is legal and enforceable and
that achieves the same objective. In addition, if such invalid, unenforceable or
void provision does not materially affect the payments to be made to ACI under
this Agreement, and if the remainder of this Agreement will not be affected by
such declaration and is capable of substantial performance, then each provision
not so affected will be enforced to the maximum extent permitted by law.
(b) If any provision referred to in Section 10.08(a) is declared judicially to
be invalid, unenforceable or void, and the fact thereof, or any amendment or
modification thereto as set forth in Section 10.08(a), materially affects the
payments to be made to ACI under this Agreement, then ACI may, at its sole
discretion, terminate this Agreement in its entirety.
Section 10.09 Waivers
The observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively) by the party
entitled to enforce such term, but such waiver will be effective only if it is
in a writing signed by the party against which such waiver is to be asserted.
Unless otherwise expressly provided in this Agreement, no delay or omission on
the part of any party in exercising any right or privilege under this Agreement
will operate as a waiver thereof, nor will any waiver on the part of any party
of any right or privilege under this Agreement operate as a waiver of any other
right or privilege under this Agreement nor will any single or partial exercise
of any right or privilege preclude any other or further exercise thereof or the
exercise of any other right or privilege under this Agreement.
Section 10.10 Entire Amement
This Agreement (including the Schedules attached hereto) constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings, whether
written or oral, between the parties with respect to the subject matter of this
Agreement, and there are no representations, understandings or agreements
relating to this Agreement that are not fully expressed herein. This Agreement
may not be modified or amended except by a written instrument executed by or on
behalf of each of the parties to this Agreement. All Schedules attached to this
Agreement are expressly made a part of, and incorporated by reference into, this
Agreement.
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Section 10.11 Asshmment
No party may assign this Agreement without obtaining the prior written consent
of the other party; provided, however, that such consent will not be
unreasonably withheld or delayed; and provided
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further, that a party will notify the other party regarding whether such consent
will be withheld or delayed within thirty (30) days after the other party has
requested such consent. Notwithstanding the foregoing, ACI may assign this
Agreement, and its rights and obligations hereunder, to any of its affiliates.
Section 10.12 No Third Party Beneficiary
This Agreement will be binding upon and inure to the benefit of the parties to
this Agreement and their respective successors and assigns. This Agreement is
not intended, nor will it be construed, to create or convey any right in or upon
any person or entity not a party to this Agreement. ACI will not be responsible,
financially or otherwise, for the Services provided hereunder to any party other
than Customer.
Section 10.13 Governing LawNentiedurisdiction
This Agreement will be construed in accordance with, and the rights of the
parties will be governed by, the substantive laws of the State of California,
without giving effect to any choice-of-law rules that may require the
application of the laws of another jurisdiction. Any permitted action brought in
connection with this Agreement shall be brought in Los Angeles County,
California, and the parties hereby waive any objection to venue.
Section 10.14 Construction
The Article and Section headings and the table of contents used in this
Agreement are for convenience of reference only and in no way define, limit,
extend or describe the scope or intent of any provisions of this Agreement. In
addition, as used in this Agreement, unless otherwise expressly stated to the
contrary; (a) all references to days, months or years are references to calendar
days, months or years; and (b) any reference to a "Section Article" or
"Schedule" is a reference to a Section or Article of this Agreement or a
Schedule attached to this Agreement. The provisions of this Agreement are
qualified in their entirety by reference to the information and the terms set
forth in the Schedules. To the extent that the provisions of this Agreement and
the Schedules to this Agreement are inconsistent, the provisions of the
Schedules to this Agreement will govern and control.
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Section 10.15 Counterparts
This Agreement may be executed in multiple counterparts, each of which will be
deemed an original and all of which taken together will constitute one
instrument.
IN WITNESS WBEREOF, the parties have duly executed and delivered this
Agreement as of the date first set forth above.
ACI COMMUNICATION INC. YP NET
By By
Name: Name:
Title: Title
Date: Date
SCHEDULE2.01
of
Billing and Related Services Agreement
ACCEPTABLE CALL TYPES
Schedule 2.01 Acceptable Call Types
The following EMI billing formats are acceptable for immediate processing
according to the terms and conditions of this Agreement:
Record ID Description
01-01-01 North American Originated, Terminated and Billable Message
Telephone Service Charge
01-01-32 North American Originated, Terminated and Billable Directory
Assistance Charge
01-02-01 North American Originated and Billable, Overseas Terminated Message
Telephone Service Charge
01-05-01 Overseas Originated and North American Terminated and Billable
Message Telephone Service
01-07-01 Overseas Originated and Terminated, North American Billable Message
Telephone Service
The following EMI billing formats are available for billing, but are
subject to the approval of ACI prior to processing. There also may be additional
ACI and/or LEC charges associated with the processing of the following record
types:
01-01-18 North American Originated, Terminated and Billable Specialized
Service/Service Provider Charge
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41-50-01 Customer Credit Line Summary Non Detail Credit
42-50-01 Miscellaneous Charge Record Line Summary Non-Detail Charge
XXXXXXXX0.01
of
Billing and Related Services Agreement
BILLING SERVICES
Schedule 3.01 Billina Services
1. Billin2 Services
(a) B&C Contracts. ACI will provide Billing Services relating to the B&C
Processors. Customer hereby acknowledges that ACI has provided it with a listing
of the current B&C Processors. ACI may amend or supplement from time to time
such listing and will provide Customer with a copy of the amended or
supplemented listing as soon as reasonably practicable.
(b) On-Net File. Customer hereby acknowledges that ACI will provide
Customer with a copy of the On-Net File. ACI may revise the On-Net File from
time to time and will provide Customer with a copy of the revised On-Net File as
soon as reasonably practicable.
(c) Approved Message Format. Upon receipt of a Message tape from Customer,
ACI will determine whether the Message data contained thereon is in the standard
exchange message interface format or another format that has been chosen by ACI
(the "Approved Message Format"). Customer hereby acknowledges that ACI has
provided it with the current Approved Message Format. ACI may from time to time
revise the Approved Message Format based on reasonable business needs (as
determined in good faith by ACI), the requirements of any B&C Contract, or the
requirements of any Governmental Authority and will provide Customer with a copy
of the revised Approved Message Format. Customer will comply with such new
format within ninety (90) days after receipt of a copy of the updated or revised
Approved Message Fon-nat; provided, however, that Customer will comply with such
new format within thirty (30) days after receipt of a copy of the updated or
revised Approved Message Format if ACI notifies Customer that such new format
was revised to comply with industrystandard formats.
(d) Editin2, Balancing, and Formatting. If Customer's Messages are in the
Approved Message Format, ACI will edit, balance, and format such Messages in
accordance with the requirements of the appropriate B&C Processors. If any of
Customer's Messages are not in the Approved Message Format or if such Messages
are rejected by ACI or ACI discovers other errors as the result of editing,
balancing, or reviewing the format (such Messages are referred to as "Rejected
Messages"), ACI will send such Rejected Messages (in standard machine readable
form) to the Customer Representative within seven (7) Business Days after the
receipt of the Messages from Customer. Customer shall use its best efforts to
reformat and resubmit such Rejected Messages to ACI following Customer's receipt
of the Messages from ACI.
24
(e) Data Files. After editing, balancing, and formatting, the Billable
Messages shall be forwarded to the appropriate B&C Processor within five (5)
business days of receipt (the "Data Files") for billing to, and collection from,
End Users in accordance with the applicable B&C Contract.
(f) Returned Messages. If any of Customer's Billable Messages are returned
as unbillable by a B&C Processor that is providing ACI with automated return
item processing in the appropriate format such Messages will be deemed to be
"Returned Messages". In the event ACI is unable to provide for the billing of
any Returned Messages (after Customer has made changes to the Messages if such
changes are possible) ACI will return such Message data to Customer and Customer
may direct xxxx such Returned Messages.
(g) Sub-Carrier Identification Codes. A sub-carrier identification code
("Sub-CIC") for the purpose of identifying the Customer's name on the B&C
Processors' bills and tracking Billable Messages arising from End Users shall be
assigned to Customer. At Customer's request, additional Sub-CICs may be assigned
for Customer for reasonable business needs and shall herein constitute
Additional Services hereunder.
(h) Special Service Message Processing, ACI will provide Special Service
Message ("SSM") processing in LEC jurisdictions that allow for such messages.
For purposes hereof, SSM means charges for telecommunications related services,
other than telephone calls, which are to be billed to an End-User by the B&C
Processor and which have been approved for such billing by the applicable B&C
Processor and ACI. The implementation of any SSM processing is subject to the
written approval of ACI and the respective LEC. Customer agrees to subrifit all
information required by ACI and the respective LEC prior to initiation of the
approval and implementation process. Such information will include, but not be
limited to, the intended use of the SSM service, copies of all marketing
materials with respect to such service, and any other information required by
either ACI or the LEC in order initiate the approval implementation process.
Charges for SSM processing ("SSM Fees") will appear on the B&C
Processor's End User xxxx.
In connection with the Services to be provided by ACI hereunder,
Customer agrees to fulfill the obligation set forth below:
Oblijization To Provide Code Assi2nment. The Approved Message Format
used for most common types of calls (i.e., collect, billed to third party, and
most line number format calling card calls) is referred to as the "01-01-01
format". This record will also be used as the base record for billing SSMs.
Customer will receive a five-digit code (3NNNN) for each approved phrase. This
code will be placed in positions 123 - 134 and 135 - 146 of the EMI record. ACI
will translate to the proposed Special Service Message code phrase and reformat
the record for output to the appropriate B&C Processor.
Customer Testing. Customer testing is required for the first set-up on SSMs.
2. Remittance Processing
25
(a) Remittance by B&C Processor. The B&C Processors shall remit to ACI
pursuant to the B&C Contracts less fees, charges, adjustments and those amounts
held as bad debt reserves. The actual net amount so remitted to ACI by each B&C
Processor is referred to as the "Remittances."
(b) Disbursement by ACI.
Calculation of Disbursement. Upon the receipt by ACI of the
Remittances from the B&C Processors, ACI: (i) will deduct from the Remittances
the Billing Services Charges, the Billing-Related Services Charges, Additional
Services Charges and any other charges specified in or as necessitated by this
Agreement, including without limitation any amounts due ACI from time to time
pursuant to Sections 4.04 and 4.05 and Article IX; (ii) will add to or deduct
from the Remittances any adjustment resulting from the reconciliation of the bad
debt withholdings effected by B&C Processors (as described in Section 2(f) of
this Schedule 3.01); (iii) will deduct from the Remittances any adjustments
effected by ACI in connection with the Inquiry Services; (iv) will deduct ACI's
charges or for processing call records on behalf of Customer; (v) will deduct
any amount ACI, in its sole discretion, withholds as an allowance for bad debts;
(vi) will deduct the B&C Processor-Calculated Taxes collected by the B&C
Processors that will be paid to the appropriate taxing authorities from the
Remittances; (vii) will deduct the B&C Processor's fees and other charges, as
well as any adjustments that may be effected by a B&C processor or ACI, from the
amounts collected from End Users for Billable Messages; and (viii) will, upon
completion of the deductions or additions described in (i) through (vii) above,
disburse the remainder of the Remittances to Customer (such disbursements to
Customer, are referred to herein as the "Disbursements"). If requested in
writing by Customer, ACI will make Disbursements to Customer by wire or
electronic funds transfer to the bank or other depository designated in writing
by Customer. Customer shall be responsible for all wire and related charges.
(c) Reserve.
W Pursuant to notice, if ACI reasonably determines that the aggregate
amount of Remittances due from B&C Processors in respect of Customer's Billable
Messages at any time during the Term is less than the aggregate amount of
Deductions effected by, or anticipated by ACI to be effected by, such B&C
Processors, or effected by adjustments or credits to be provided to End Users
(each of the events referred to as a "Reserve Event"), then ACI will have the
right to withhold amounts from any Disbursements that would otherwise be payable
to Customer on and after the occurrence for the purpose of reimbursing ACI for
the anticipated amounts to be charged and withheld by any B&C Processor, or for
adjustments or credits (the "Reserve"). An example of such a Reserve Event would
be Billable Messages by Customer dropping by seventy-five percent (75%), or the
termination or anticipated termination of this Agreement. In the event any
invoice, as provided for in this Agreement, is not timely paid by Customer and
the entire amount of such invoice cannot be paid out of Disbursements, then such
amount shall be added to the Reserve as set forth herein.
(ii) In addition, ACI shall establish a reserve for reconciliation of
bad debt charges effected by such B&C Processors pertaining to Customer's
Billable Messages (the "Frue-Up Reserve"). The initial True-Up Reserve, as soon
as LEC Billing Services are commenced, shall be five percent (5%). ACI may at
any time increase or decrease the True-Up Reserve based on actual bad debt
withheld by the B&C Processors and/or based upon Customer's actual or
anticipated bad debt related to its Billable Messages to offset any shortfalls
that may be incurred by ACI.
26
(iii) If at any time the Reserves and/or True-Up Reserve are
insufficient, ACI will invoice Customer for the amount of the shortfall, and
Customer shall remit full payment to ACI within ten (10) business days of the
date of the invoice. Any excess of Reserves and/or True-Up Reserves shall be
remitted to Customer by ACI upon ACI's reasonable determination that there is no
longer a need for a Reserve and/or True-Up Reserve.
(d) Reports. ACI will provide reports to Customer that reflect the amounts
due from the B&C Processors, the results of Rejected Messages, Returned Messages
and other adjustments, the amounts remitted by the B&C Processors, the amounts
withheld by the B&C Processors for bad debts, and the actual bad debts incurred.
ACI will transmit Call Acceptance Transmittal (CAT) reports within seven (7)
Business Days after the receipt of Message data from Customer, will transmit
Remittance reports at the time that ACI makes the Disbursements to Customer, and
will transmit bad debt true-up reports to Customer in the month following
receipt of LEC bad debt true-up data by ACI.
(e) Adjustments and Unbillables. Customer acknowledges that deductions from
amounts remitted to ACI from B&C Processors in respect of Returned Messages and
adjustments will be charged to Customer through an allocation: (i) to Customer
to the extent that such deduction can be solely attributed to Customer based on
data provided to ACI by the applicable B&C Processor; or (ii) pro rata among
Customer and other customers of ACI if such deduction cannot be attributed to
specific customers. Pro rata allocations of any such deduction in accordance
with the foregoing will be calculated based on the amount of Customer's
deductions solely attributed to Customer (as defined above) as a percentage of
all deductions solely attributed to all ACI Customers during the period to which
such deduction relates or such other method as ACI determines in its sole
discretion is appropriate based on empirical data available to ACI.
(f) Bad Debt Reconciliation and Allocation.
(i) Reconciliation. ACI will, as provided in the B&C Contracts,
periodically reconcile the amount withheld by each B&C Processor for bad debts
with the actual amount of bad debts incurred by such B&C Processor (a "True-Up
Reconciliation"). The determination of whether a xxxx has become a bad debt will
be made by each B&C Processor. ACI will advise Customer of the results of such
Reconciliation.
(ii) Pro Rata Allocations. If any Reconciliation results in a refund
to ACI of amounts previously deducted by such B&C Processor (a "Refund"), and,
based on data provided to ACI by the applicable B&C Processor, ACI is unable to
detennine the amount of such Reconciliation directly attributable to specific
customers, then the Refund will be remitted pro rata among Customer and other
customers of ACI. Customer's share of any such Refund will be applied in the
following order: (i) as an offset against any amounts owed by Customer to ACI
pursuant to this Agreement; and (ii) as a cash payment to Customer within thirty
(30) days after the receipt of the Refund by ACI.
Likewise, if any Reconciliation results in a deduction in the
Remittance paid to ACI in addition to amounts previously deducted by such B&C
Processor (a "Deduction"), and, based on data provided to ACI by the applicable
B&C Processor, ACI is unable to determine the amount of such Reconciliation
directly attributable to specific customers, the amount of any such Deduction
will be charged to Customer through a pro rata allocation among Customer and
other customers of ACI.
27
Pro rata allocations of any Refund or Deduction in accordance with the
foregoing will be calculated based on either: (x) the amount of revenue
represented by the call records submitted by ACI on behalf of Customer to the
applicable B&C Processor during the period to which such Refund or Deduction
relates compared to the total revenue represented by all call records submitted
by ACI on behalf of all of its customers to such B&C Processor during such
period; or (y) such other method as ACI determines in its sole discretion is
appropriate based on empirical data available to ACI.
Customer-Specific Allocations. Notwithstanding the foregoing, if,
based on data provided to ACI by the applicable B&C Processor, ACI is able to
directly attribute the amount of any such Reconciliation to its customers on a
customer-by-customer basis, then ACI will charge to Customer, or refund to
Customer, the applicable amount attributable to Customer as a result of such
Reconciliation. The amount of any such refund will be applied in the following
order: (i) as an offset against any amounts owed by Customer to ACI pursuant to
this Agreement and (ii) as a cash payment to Customer within thirty (30) days
after the receipt of such refund by ACI.
3. Taxes
(a) Federal, State, and Local Taxes. ACI will use reasonable efforts to
cause the B&C Processors, to the extent that the following services with respect
to the calculation of certain taxes are available from such B&C Processors, (i)
to calculate all taxes applicable to each Message (the "B&C Processor-Calculated
Taxes"), (ii) to furnish the information relating to such B&C
Processor-Calculated Taxes to ACI, and (iii) to xxxx the End Users for all B&C
Processor-Calculated Taxes and to the extent that such services with respect to
the calculation of Foreign Intrastate Taxes are available from such B&C
Processor, Foreign Intrastate Taxes. ACI will calculate Foreign Intrastate Taxes
for those B&C Processors that are capable of receiving Foreign Intrastate Tax
calculations from ACI. Customer acknowledges and agrees that ACI is acting only
as Customer's agent with respect to arranging for the billing and collection of
taxes. To the extent that any B&C Processor: (A) does not provide services, or
that ACI does not provide such services, with respect to the calculation of the
B&C Processor-Calculated Taxes; or (B) is not capable of receiving Foreign
Intrastate Tax calculations from ACI, Customer will be responsible for the
calculation of such taxes hereunder.
(b) B&C Processor Responsibilities. ACI will have the authority, on behalf
of Customer, to authorize the B&C Processors: (i) to calculate the B&C
Processor-Calculated Taxes in the same manner as the B&C Processors calculate
taxes for their end users; (ii) to xxxx and collect Foreign Intrastate Taxes as
calculated and processed by ACI; and (iii) to establish the tax exempt status of
End Users in the same manner as the B&C Processors establish such status for
their end users.
28
(c) Payment of Taxes. Based solely upon the information received from the
B&C Processors with respect to the B&C Processor-Calculated Taxes billed and
collected by the B&C Processors, ACI will, on behalf of Customer and other
subscribers of ACI, prepare and file in a timely manner with the applicable
taxing authorities all returns covering the B&C Processor-Calculated Taxes and
ACIcalculated Foreign Intrastate Taxes and will, on behalf of Customer and other
subscribers of ACI, pay promptly and in full all of the B&C Processor-Calculated
Taxes and ACI-calculated Foreign Intrastate Taxes collected by the B&C
Processors from End Users to the appropriate taxing authorities.
(d) Liability. Customer acknowledges and agrees that ACI will have no
liability whatsoever to Customer if. (i) the B&C Processors fail to calculate,
or incorrectly calculate, the B&C Processor-Calculated Taxes; (ii) the B&C
Processors fail to furnish the information relating to the B&C
Processor-Calculated Taxes to ACI; (iii) the B&C Processors fail to xxxx, or
incorrectly xxxx, the End Users, (iv) the B&C Processors fail to establish the
tax exempt status of End Users in the same manner as the B&C Processors
calculate taxes or establish the tax exempt status for their End Users; or (v)
ACI miscalculates any End User's Taxes whether resulting from the use by ACI of
inaccurate or incomplete tax or End User information supplied to ACI by or
through Customer, or a third party or otherwise, including, but not limited to,
the tax status of an End User or the applicable tax rates. Customer will
indemnify and defend ACI and will hold ACI harmless from and against any and all
claims, actions, damages, liabilities, costs and expenses, including without
limitation reasonable attorneys' fees and expenses, that are asserted against or
incurred by ACI as a result of or in connection with any of the matters referred
to above.
4. Bulletin Board
(a) Bulletin Board Syste . In connection with the provision of services by
ACI pursuant to this Agreement, ACI shall provide Customer with access to ACI's
proprietary Bulletin Board System (the "Systern") for the purpose of
electronically transmitting certain data to ACI and otherwise communicating
electronically with ACI, and Customer is required to use such System. ACI will
provide Customer with access to the System, and Customer will comply with the
terms and conditions relating to such access, as described in Attachment 1 to
this Schedule 3.01 and in accordance with the other terms and provisions of this
Agreement.
(b) Confidential Information. Customer agrees and acknowledges that, as
between Customer and ACI, information available through use of the System, other
than Customer Data, constitutes confidential and proprietary information of ACI
subject to the restrictions on disclosure thereof set forth in Section 6.03 of
this Agreement. In addition to such obligations, Customer agrees to hold any
user identification codes and/or passwords provided to Customer for the purpose
of utilizing the System in strict confidence and Customer will not disclose such
codes and/or passwords to any other Person except employees of Customer who have
a need to know such codes and/or passwords. Customer hereby agrees to indemnify
and hold harmless ACI, its employees, agents, representatives, directors, and
officers from any and all losses, liabilities, costs, and expenses (including,
without limitation, reasonable attorneys' fees and expenses) arising from, or
relating to, Customer's failure to comply with the provisions of this Section
4(b) of Schedule 3.01.
29
ATTACHMENT 1 to SCHEDULE 3.01
of
Billing and Related Services Agreement
BULLETIN BOARD SYSTEM: TERMS AND CONDITIONS
Attachment 1 to Schedule 3.01 Bulletin Board System: Terms and Conditions
1. General. In general, the System will permit Customer to either: (a)
electronically transmit data to or from ACI; or (b) electronically transmit
E-Mail messages to or from ACI or other designated customers of ACI by dialing
into the ACI network from remote stations.
2. Customer Use of System; Data. Customer will be solely responsible for being
proficient in the use of the System and following such procedures as may be
required by ACI from time to time for use of the System. Customer will be
responsible for its data and material while such data and material are in
transit to or from ACL ACI may refuse to process, and may return to Customer,
any materials or data that in Affs opinion: (a) are not of a quality or
condition suitable for processing; (b) do not comply with Affs applicable
standards and procedures; or (c) are otherwise not in machine-readable form.
Customer will be responsible for correcting rejected data and submitting the
same for reentry.
3. Dial-Up Lines; User Identification and Password. ACI will establish and
maintain telephone number(s) to be utilized by Customer in connection with use
of the System. ACI will also provide to Customer a unique user identification
code and password to be used by Customer when accessing the System.
4. Equipment. Customer will be solely responsible for the acquisition and
maintenance of any hardware, software, or other materials (collectively,
"Equipment") required by Customer for the purpose of utilizing the System. Set
forth below is a list of hardware and software recommended by ACI for use with
the System:
- IBM or EBM Compatible 000 XXx Xxxxxxxx (minimum)
- 32MB of RAM or higher
- Hard disk drive with a minimum of I GB of spare storage space
- VGA or Super VGA color monitor
- Mouse
- Modem with at least 28.8Kb speed (33.6 recommended)
- LaserJeta Printer or equivalent
- DOS Version 5.0 or above
- Microsoft Windowse Version 3.1 or above, Windows 950 or Windows NTO
- ProComin Pluse (Windows version recommended)
- Infornakere, Version 6.5 (Required for optional custom reports)
30
Customer represents and warrants to ACI that any Equipment used by Customer
in connection with the System will not impair the System or interfere with the
performance thereof. Upon notice from ACI that any Equipment is causing or is
likely to cause such interference, Customer will promptly remove or replace such
Equipment so that such interference will not occur. ACI reserves the right to
require that all Equipment be approved in writing by ACI prior to use with the
System.
5. Availability of System. The System may be accessed by Customer during such
time periods as ACI may designate from time to time. Customer acknowledges that
the System may not be available for access on occasion due to performance of
maintenance on the System.
6. Functionality of System. Customer acknowledges that the performance of the
System is subject to the functionality of the System from time to time and that,
while ACI may in its sole discretion determine to upgrade or enhance the System,
ACI is under no obligation to do so.
ATTACHMENT 2 to SCHEDULE 3.01
of
Billing and Related Services Agreement
LICENSED PROGRAM: CONDITIONS AND RESTRICTIONS
Attachment 2 to Schedule 3.01 Licensed Pro2ram: Conditions and Restrictions
1. Grant of License to ProAct
(a) Licensed Projzra . During the Term, ACI hereby grants to Customer and
Customer hereby accepts from ACI, a non-exclusive, non-transferable license to
use one copy, in object code form, of the management reporting system software
known as ProAct and related user documentation (the "Licensed Program").
Customer agrees to comply with the obligations and restrictions relating to the
Licensed Program as described herein, and in accordance with the other terms and
conditions of this Agreement.
(b) Ownership of Licensed Progra . The Licensed Program consists of
valuable trade secrets of ACI and is and will remain ACI's exclusive property.
Customer agrees to notify ACI promptly of any unauthorized disclosure,
possession or use of the Licensed Program. If the Licensed Program, in whole or
in part, comes into the possession of any unauthorized third party as a result
of a breach by Customer of any provision of this Agreement, Customer will be
responsible for retrieving the Licensed Program at Customer's own expense and
will reimburse ACI for whatever reasonable expenses ACI incurs if ACI assists
Customer in such efforts.
2. Restrictions.
A license to the Licensed Program is granted to Customer only in accordance
with the terms and conditions contained in this Agreement and subject to the
following restrictions:
(a) Customer will be permitted to copy the Licensed Program for its use
in accordance with this Agreement and for backup purposes.
31
(b) Customer acknowledges and agrees that the Licensed Program constitutes
confidential and proprietary information of ACI, and Customer will maintain the
Licensed Program in strictest confidence and will provide access to the Licensed
Program solely to its employees requiring such access. Customer will instruct
those employees that the Licensed Program, and all components thereof, are
proprietary to, and the trade secrets of, ACI and are subject to Section 6.03 of
this Agreement.
(c) Customer will not, and will not permit its employees or agents to sell,
assign, lease, license, sublicense, or otherwise transfer or provide the
Licensed Program, or any component thereof, rights therein, or access thereto,
to any other party for any purpose.
(d) Customer will not remove, alter, or deface any copyright notice or
proprietary marking contained on or in the Licensed Program or any copy.
(e) Customer will not modify the Licensed Program or combine it or merge it
into any other program. All modifications and derivative versions of the
Licensed Program, even though unauthorized, will be the exclusive property of
ACI.
(f) Customer will not de-compile, disassemble or reverse engineer the
Licensed Program or create, recreate or attempt to create or recreate the source
code or other aspects of the Licensed Program.
3. Customer's Responsibilities Related to the Licensed Program.
Customer will be solely responsible for the acquisition and maintenance of
all hardware, software or other materials required to utilize the Licensed
Program. Customer accepts responsibility for: (i) the selection of the Licensed
Program; (ii) the installation of the Licensed Program; (iii) the use of the
Licensed Program; and (iv) the results obtained from the Licensed Program. ACI
does not warrant that the operation of the Licensed Program will be
uninterrupted or effor-free. Customer acknowledges and agrees that the Licensed
Program is provided by ACI hereunder "as is" and without warranty.
4. Licensed Program Support.
During the Term, ACI will provide the following support in connection with
the Licensed Program:
(a) Telephone Sgpport. ACI will provide telephone support to Customer for
requesting operational assistance as it relates specifically to installation and
operation of the Licensed Program application (excluding any hardware or system
environment problems or operation problems related to Customer's business
processes) during regular business hours (8:00 a.m. to 5:00 p.m. Pacific Time),
Monday through Friday (excluding Affs holidays).
(b) Routine Maintenance. ACI will provide to Customer maintenance support
which will consist of the repair or replacement of the Licensed Program so as to
correct any replicable defect or error in its functioning which causes the
Licensed Program to fail to conform in all material respects to the Licensed
Program documentation. Any other modifications to the Licensed Program will be
provided by ACI as an Additional Service pursuant to Section 3.03. As a
condition to ACI's maintenance obligation, Customer must notify ACI of the
defect or error in sufficient detail to permit the identification, replication
and correction thereof.
32
From time to time, ACI may, in its sole discretion, make updates,
improvements or changes to the Licensed Program which may be made available to
Customer in separate releases to the Licensed Programs; provided however, ACI
has no obligation to make any such updates, improvements or changes.
SCHEDULE 3.02
of
Billing and Related Services Agreement
BILLING RELATED SERVICES
Schedule 3.02 Billing Related Services
1. Inquiry Services.
(a) During the Term, ACI may determine, in its sole discretion and in lieu
of inquiry services provided by one or more B&C Processor, to (a) establish
toll-free telephone numbers to be used by End Users for the purpose of making
inquiries regarding charges for Billable Messages reflected on bills issued by
such B&C Processors and (b) provide operators to assist End Users in connection
with such inquiries (collectively, the "Primary Inquiry Services"). Customer
acknowledges that ACI's election to provide Primary Inquiry Services will be
made on a B&C Processor-by-B&C Processor basis and will include all Billable
Messages sent to that B&C Processor by or through Customer and other customers
of ACI. To the extent that ACI determines to provide such Primary Inquiry
Services, ACI will make available such quantity of toll-free telephone numbers
as ACI deems necessary for use by End Users in connection with inquiries
regarding charges for services that were rendered by Customer and transmitted by
ACI to a B&C Processor and will instruct each B&C Processor to refer all
inquiries from End Users to such toll-free telephone numbers.
In connection with any Primary Inquiry Services that ACI may provide,
ACI will establish and maintain written guidelines that describe the manner in
which ACI will respond to End User inquiries, including without limitation the
manner in which credits or other appropriate adjustments are to be made, with
such supplements and amendments as may be necessary from time to time. ACI will
provide Customer with a copy of such written guidelines and any supplements or
amendments thereto upon Customer's request. ACI will be responsible for
responding to all End User questions and problems related to Billable Messages
and will provide appropriate credits and adjustments, all in accordance with the
procedures that it establishes. ACI will promptly notify Customer of all credits
and adjustments issued by ACI on behalf of Customer. Customer will designate a
service representative who will cooperate with ACI to the fullest extent
possible in resolving any questions or problems.
(b) Upon the written request of Customer in connection with any Primary
Inquiry Services that ACI provides, ACI, in its sole discretion, may
automatically transfer End User inquiries to Customer's call center for handling
by Customer, provided Customer complies with the following with respect to the
handling of all such End User inquiries:
33
G) Customer must maintain a toll-free customer service telephone
number to handle all End User inquiries which are automatically transferred to
Customer's call center;
(ii) All End User inquiries must be handled only by live operators and
not by message machine or other devices, at a service level that meets or
exceeds parameters set from time to time by ACI;
(iii) ACI has the right at any time and from time to time to monitor
calls to verify that End User inquiries are being handled appropriately by
Customer's call center;
(iv) ACI will handle all End User credits or other adjustments and
Customer will, within three Business Days of the End User inquiry, provide to
ACI all information necessary for ACI to provide such End User credits or
adjustments in accordance with its established procedures. All such credit and
adjustment information will be provided to ACI in a format approved by ACI.
Customer agrees that it will not issue End User credits or adjustments of any
type in a manner other than stated above in this Schedule 3.02, Section(b)(iv);
(v) Customer will be responsible for providing to ACI updated
subscriber account information (name, address, service type, etc.) in a format
approved by ACI, on a regular basis as determined by ACI; but in no event less
than monthly; and
(vi) Customer acknowledges that the determination of ACI to transfer
End User inquiries to customer will be made on a customer identification
number-by-custorner identification number basis and will include all inquiries
related to any such customer identification number.
Notwithstanding anything above in this section to the contrary, ACI may, in
its sole discretion and at any time, discontinue the transferring of End User
inquiries to Customer's call center if Customer fails to satisfactorily handle
any End User inquiry. The transfer of End User inquiries to Customer does not
abridge Affs right to issue End User adjustments or credits in accordance with
its established procedures.
2. Complaint Processing Services.
ACI will process regulatory and legislative complaints relating to Customer
(the "Complaint Processing Services") as described in this Section 2 of Schedule
3.02. The Complaint Processing Services consist of the following:
(a) Logging and tracking complaints by type for the purpose of
identifying and alerting customers regarding existing or potential problems;
(b) Retrieving call details and adjustment histories for carrier
identification;
(c) Generating letters to consumers or inquiring federal or state
agencies acknowledging receipt of complaints and identifying carriers, with
copies to all relevant parties; and
(d) Providing carriers with all of the foregoing information for resolution.
(e) Upon complaint resolution by carriers, generating letters acknowledging
responses from carriers to consumers and/or inquiring agencies, commissions or
legislative bodies, with copies to all relevant parties.
34
SCHEDULE 3.03
of
Billing and Related Services Agreement
ADDITIONAL SERVICES
Schedule 3.03 Additional Services
Service Charge
LOCATION LOOKUP FEATURE No Charge
ACCOUNT LOOKUP FEATURE No Charge
SUB-CARRIER IDENTIFICATION CODE (Sub-CIC) $3,500 Each
Set
UP
CUSTOMER IDENTIFICATION NUMBER $ 100 Each Set Up
ON-SITE CUSTOMER TRAINING Actual travel and
actual out-of-pocket expenses.
PROFESSIONAL SERVICES [I Hour Minimum] $ 1501Ho
SCHEDULE 3.04
of
Billing and Related Services Agreement
SAFEGUARDING AND RETENTION OF CUSTOMER DATA
Schedule 3.04 Safe2uarding and Retention of Customer Data
1. Retention Schedule.
ACI will store any Customer Data that is sent off-site for disaster
recovery purposes in a protected vault for up to one year.
2. Off-Site Data Storage.
The off-site storage facility will employ security and environmental
protection systems that guard against theft and fire and that control humidity
and temperature.
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3. Facility Security.
ACI will perform the Billing Services at locations that employ controlled
access systems and alarm systems that guard against theft, fire, heat and water.
4. Contin2ency Plan.
ACI will maintain an up-to-date contingency plan to facilitate continued
processing of Billable Messages in the event of a catastrophe or other event of
natural force majeure or in the event of single processor failure within an ACI
data center or the failure of the entire ACI data center.
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SCHEDULE 4.01
of
Billing and Related Services Agreement
TERM AND COMPENSATION TO ACI
Schedule 4.01 Term and Compensation to ACI
1. Billine Services Charges.
(a) Svecial Service Message Fee. The Special Service Message (SSM) fee
will apply to all billable SSMs. This fee will be calculated based on the
average revenue per transaction of all
SSMs processed within a calendar month.
Average End-User Charge Per Message Per Message Fee
$00.01 - 10.00 1.5%
$10.01 - 20.00 1.7%
$20.01 - 30.00 2.0%
$30.01 - 40.00 2.4%
$40.01 - 50.00 2.8%
$50.01- Fee to be established by ACI on an
individual case basis
Special Service Message Approval Process and $1,000
Irnplementation. (First Charge Phrase).
Implementation fee for each charge phrase $500
By way of example, and for informational purposes only, if the average amount of
',,rocess "and
each charge to the End-User is $10.00, the charge as calculated in accordance
with the above table would be as follows:
SSM Processing Fee/message: $00.15
Billing and Collection Fee: IQQM
Total Billing Services Charge/message: $00.15
(b) Minimum Message Reguirement. Notwithstanding Section l(a) of this
Schedule 4.0 1, Customer will submit to ACI for processing hereunder not less
than the amount reflected in the table below for the applicable period of the
Term (the "Minimum Requirement"):
XX.Xxx, Inc. 34
Period Following Services Commencement Date Minimum Requirement
Months I - 36 $1,000 Per Month
Each Month Thereafter $1,000 Per Month
(c) Excess Rejected Messages. The service charges reflected above are
applicable only to Billable Messages; if, however, more than two percent of the
Messages submitted by Customer and its Clients to ACI during any particular
month are Rejected Messages, and such Rejected Messages are deemed as such due
to errors or ornissions of Customer and/or its Clients, Customer will pay to ACI
for each such Rejected Message an amount equal to the charge for a Billable
Message set forth in Section 1 (a) of this Schedule 4.0 1.
2. Inouiry Services Charges.
Customer will pay ACI $4.25 (plus any applicable charge of the B&C
Processor) for each inquiry handled by ACI in respect of Special Service
Messages. Such charges are subject to adjustment from time to time by ACI upon
60 days'prior notice to Customer.
With respect to each End User inquiry that ACI automatically transfers to
Customer's call center for handling by Customer pursuant to Section I (b) of
Schedule 3.02, Customer will pay ACI a fee of $50. With respect to each End User
Inquiry that ACI manually transfers to Customer's call center for handling by
Customer, Customer will pay ACI a fee of $1.50. With respect to each End User
inquiry that ACI refers (by giving the End-User Customer's toll-free telephone
number) to Customer's call center for handling by Customer, Customer will pay
ACI a fee of $ 1.00. In addition, Customer will pay ACI a fee of $0.35 for each
credit or adjustment request submitted to ACI by Customer in ACI's prescribed
electronic format. A one-time set-up fee of $200 will be charged upon initiation
of service and again anytime a change or addition is requested.
37
3. Complaint Processina Charges.
With respect to each legislative or regulatory complaint for which ACI
provides Complaint Processing Services, Customer will pay ACI the amount of
fifty dollars ($50.00) plus any out-ofpocket expenses incurred by ACI in
connection with providing the Complaint Processing Services. Charges due ACI for
Complaint Processing Services are subject to adjustment from time to time by ACI
upon sixty (60) days' prior notice to Customer.
4. Calculation of B&C Processor Fees.
Special Service Messaaes. During the Term of the Agreement, provided that
the number of Customer's Billable SSMs per month is equal to or more than 1.5
per LEC per End User telephone xxxx, each B&C Processor's charges for processing
Billable SSMs will be calculated to reflect the Customer's actual number of
Billable SSMs per xxxx per B&C Processor.
By way of example, if the Ameritech number of Billable Messages per xxxx is
1.4, then the B&C Processor charge will be calculated as follows:
@ 1.4 Billable Messages per xxxx = $0.400 Render fee
1.4 Messages x . 10 Processing Fee = $0.140 Message Processing Fee
= $0.540 Total Fee therefore;
B&C Processor Fee = $0.3857 per Message
Data Transmission Fee = $0.0045 ver Messaae
= $0.3902 Total Fee per Message
If the actual number of Billable SSMs per xxxx is less than 1.5, or if the
B&C Processor does not provide a discount calculated in the foregoing manner,
each B&C Processor's charges passed through to Customer will be equal to the
average charge for all similar customers processing 0+ Billable Messages.
Notwithstanding anything in this Section 4 to the contrary, in no event
will the B&C Processor's charges passed through to Customer be less than the fee
paid by ACI to such B&C Processors.
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SCHEDULE5.01
of
Billing and Related Services Agreement
CUSTOMER BILLING OBLIGATIONS
Schedule 5.01 Customer Billing Obligations
1. Billing Obligations.
(a) Preliminary Processing and Delivery of Messages. Customer will acquire
Message data and will perform all of the preliminary processing of the Messages,
which will include ensuring that the charge for each Message has been computed,
arranging Message data in the Approved Message Format and providing the
applicable batch control totals, including the total number of Messages and the
total dollar amount of the charges per submission. After such preliminary
processing has been completed, Customer will, at Customer's expense, deliver to
ACI the Message data in a form or manner that is determined by ACI Software.
Customer acknowledges that ACI will have no obligation to accept for processing
any Message data that does not conform to the Approved Message Format.
(b) Singular Billing. With respect to the Message data submitted by
Customer, ACI will be the sole, exclusive billing service provider for such
Message data, and no Message data submitte will be for-wa+ded to, billed by,
Qistempr- Ar- any other billing agent or clearinghouse.
(c) Tariff Information and Rate Tables. Upon request, Customer will provide
ACI with copies: (i) of all effective tariffs filed by Customer with
Governmental Authorities; and (ii) of its current rate tables, in each case with
such supplements and amendments as may be necessary from time to time.
(d) Charges and Assessments. Customer will be responsible for, and will be
obligated to pay: (i) any charges or assessments by any B&C Processor as a
result of uncollectible charges for Messages billed, including any amounts owed
if the amount of uncollectible charges exceeds the amount of the bad debt
withholding; (ii) any charges or assessments by any taxing authority or
Governmental Authority as a result of the nonpayment of Taxes by Customer; (iii)
all costs and expenses related to each item that is to be provided by or through
Customer pursuant to this Agreement and for which the financial responsibility
has not been expressly assigned to ACI; and (iv) any other charges or
assessments owing by ACI for which Customer has agreed to indemnify ACI pursuant
to this Agreement.
2. Taxes.
(a) Customer Calculated Taxes. Customer will be solely responsible for
calculating, and advising ACI with respect to any Taxes that are not calculated
by ACI as described herein ("CustomerCalculated Taxes").
(b) Tax Returns. Customer will be solely responsible for preparing and
filing in a timely manner with the applicable taxing authorities and
Governmental Authorities all returns covering Customer-Calculated Taxes and for
promptly paying in full and remitting to such taxing authorities and
Governmental Authorities all Customer-Calculated Taxes owed. At the request of
ACI from time to time, Customer will provide ACI with copies of any and all tax
returns that Customer has prepared and filed and other applicable information
relating to the payment of the Customer-Calculated Taxes; provided,
39
XX.Xxx B&C 092001 1 ,
lals
Draft Date: 10/1/2001
Initials
however, that Customer will not be required to provide ACI with any information
regarding Customer's federal, state or local income taxes. Notwithstanding the
foregoing, Customer will not be deemed to be in breach of this Section 2(b) if
it is contesting in good faith the imposition of any unpaid CustomerCalculated
Taxes in appropriate administrative or judicial proceedings.
SCHEDULE 5.07
of
Billing and Related Services Agreement
REPRESENTATIONS AND WARRANTIES
Schedule 5.07 Representations and Warranties
Customer represents warrants, covenants and agrees:
1. Customer does not and will not engage in unfair and/or deceptive trade
practices.
2. Customer does not and will not make false or misleading
representations about its products and/or services.
3. Customer will submit to ACI for billing only those products or services
that directly pertain to a properly consenting End User's own telephone line or
number. Without limiting the foregoing, Customer will not submit to ACI for
billing any services or products relating to each of the following, or
combination thereof:
a) Box, sweepstakes or contest-type entry forms.
b) Negative option sales offers, including negative option "free trial"
periods.
C) 800 number pay per call.
d) Collect call back.
e) Phantom billing - or billing for calls or services never provided.
f) Club or membership fees (including, but not limited to psychic,
sports, prescription and/or travel card clubs).
4. For each new End User after the Effective date, prior to submitting for
billing any records in compliance with the above, each order or request for a
program, product or service so billed will be authorized by the End User, and
confirmed, by one of the following methods, subject to applicable law:
40
a) hidependent Third Party Verification provided by an entity completely
separate and not affiliated with Customer or any of its owners, officers, or
employees; compensation to the independent entity will not be based on the
number of positive authorizations or sales.
b) Letter of Authorization or sales order.
C) Voice recording of telephone sales authorization.
5. Any authorization and confirmation noted in Section 4 above will, at a
minimum, contain
the following:
a) The date.
b) The name, address and telephone number of the End User.
C) Assurance that the End User is qualified to authorize billing.
d) A description of the product or service.
e) A description of the applicable charges.
f) An explicit End User acknowledgement that the charges for the
product or services will appear on their next telephone xxxx.
g) The acceptance by the End User of the offer.
6. In addition, authorization verified by an independent third party must
include:
a) An initial statement that the purpose of the verifications is to
confirm the consumer's intention to accept the sales offer.
b) A statement that the service provider is not affiliated with a LEC,
where there is no affiliation.
C) A unique consumer identifier.
d) A review by third party personnel of the entire verification where the
verification
is automated.
e) An independent third party verifier must meet the following criteria:
(i) It must be completely independent of the service provider and the
telemarketer.
(ii) It must not be owned, managed, controlled or directed by the service
provider or the telemarketer.
41
(iii) It must not have any financial incentive in the completion of the
sale.
(iv) It must operate in a location physically separate from the service
provider and the telemarketer.
7. If requested, Customer shall supply to ACI:
a) Names of officers and principals of Customer.
b) Proof of corporate or partnership status of Customer.
C) Copies of certifications as required.
d) Foreign corporation filings as required.
e) Any information regarding whether Customer or its affiliates and/or
its officers or principals have been subject to prior conviction for fraud or
have had billing services terminated.
f) That any tariffs of Customer be made available on request.
g) The names, addresses, officers and principals of any telemarketing
companies to be used by the service provider.
h) The names, addresses, officers and principals of any third party
verification companies to be used by the service provider.
8. If requested Customer shall provide to ACI for each of its products,
and/or services or programs for which services are billed:
a) Marketing materials.
b) Advertisements (print or other media).
C) Applicable fulfillment package (which must include cancellation
information if not included elsewhere and a toll free customer service telephone
number).
d) Scripts for both sales and verification.
e) Honest, clear, and understandable text phrase for telephone xxxx.
f) Prior notification of any material change in the above information.
9. Messages submitted to ACI for billing:
42
a) Strictly meet and/or adhere to the requirements of all federal, state,
and local laws, rules regulations, ordinances, orders, and/or judgments,
including but not limited to those of the Federal Communications Commission, the
Federal Trade Commission, and any state Public Service[Utility Commission or
attorney general;
b) Strictly meet and adhere to the requirements of any policy of ACI,
B&C Processor or Laws;
C) Is the valid, legally enforceable and unconditional obligation of
the Person who is indicated by Customer to be obligated on such a Message for
products and/or services previously rendered;
d) Is genuine and in all respects what it purports to be, and is not
evidenced by a judgment;
e) Arises out of the completed delivery of telecommunications services
in the ordinary course of Customer's business and in accordance with the terms
and conditions of any contracts or other documents related thereto;
f) Is for a specific amount due and owing so reflected and is not
evidenced by a chattel paper, promissory note or other instrument;
g) Is not subject to any offset, deduction, or agreement for offset or
deduction, or any defense, dispute, counterclaim, or any other claim, defense or
adverse condition, and is absolutely owing to Customer, and is not contingent in
any respect or for any reason except for matters for which discounts, credits or
allowances are granted by Customer in the ordinary course of business consistent
with past practices which have been reflected on the information submitted to
ACI for processing;
h) There are no facts, events or occurrences that in any way impair
the validity or enforceability thereof, or tend to reduce the amount payable
reflected in a Message;
i) Without limiting any other provisions of the Agreement, the End
User: (i) had the capacity to enter into at the time any contract or other
document relating to such Message; and (ii) such End User is solvent;
j) There is no fact or circumstance which would impair the validity or
collectability of, or the charges on, the Message, by Customer and/or its
permitted assignee or designee, and there are no proceedings or actions which
are threatened or pending against or on behalf of the End User which might
result in any material adverse change in the collectability of the charges on a
Message;
k) All supporting documents and other evidence of Messages delivered
to ACI are complete and correct and valid and enforceable in accordance with
their terms, and all signatures and endorsements that appear thereon are
genuine;
1) Customer has the full and unqualified right to submit Messages to
ACI for processing;
in) Each message: (i) has not been previously billed or submitted to
any Person other than ACI for billing and collection; (ii) is not subject to any
Liens or factoring arrangements, except exclusively through ACI; and (iii) does
not relate to services performed more than ninety (90) days prior to the date
said message was received by ACI for processing; and
43
n) Such message does not arise out of services performed for: (i)
Customer; (ii) any subsidiary or Affiliate of Customer; (iii) any End User
located outside the United States of America; or (iv) any Governmental
Authority, domestic or foreign.
10. Customer nor its affiliates, parents, subsidiaries, officers,
directors, members, owners, partners, shareholders (excluding non-controlling
shareholders for public companies), employees, agents, representatives, joint
venturers, successors and permitted assigns have been convicted of fraud, or
have had billing services terminated.
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