Exhibit 10.15
Master Agreement No. 00017432
Page 1 of 64
Master Agreement No. 00017432
Between
ION Networks, Inc.
and
SBC Services, Inc.
For
Materials and Services
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PROPRIETARY INFORMATION
Not for use or disclosure outside
SBC, ION, their affiliated and subsidiary
companies, and their third party representatives
without prior written permission
Master Agreement No. 00017432
Page 2 of 64
TABLE OF CONTENTS
1.1 Preamble and Effective Date..............................................................................7
1.2 Scope of Agreement.......................................................................................7
1.3 Term of Agreement........................................................................................7
1.4 Cancellation and Termination.............................................................................7
1.5 Cumulative Remedies......................................................................................9
ARTICLE II - Definitions..........................................................................................9
2.1 "Acceptance" means SBC's acceptance of the Materials or Services ordered by SBC and provided by ION as
specified in Section 8.6, "Delivery, Performance, and Acceptance.".......................................9
2.2 "Acceptance Date" means the date on which SBC Accepts Materials or Services..............................9
2.3 "Acceptance Letter" means a document signed by SBC, substantially in the form of Appendix F, indicating
its Acceptance of the Materials and/or Services..........................................................9
2.5 "Affiliate" means (1) a company, whether incorporated or not, which owns, directly or indirectly, a
majority interest in either Party (a "Parent Company"), and/or (2) a company, whether incorporated or
not, in which a 5% or greater interest is owned, either directly or indirectly, by: (i) either Party or
(ii) a Parent Company....................................................................................9
2.6 "Agreement" shall have the meaning specified in the section called "Entire Agreement."..................10
2.7 "Cancellation" means the occurrence by which either Party puts an end to this Agreement or any Work
Order(s) prepared pursuant to the provisions of Section 1.4(B) of this Agreement due to the breach of
this Agreement and/or a Work Order......................................................................10
2.12 "Harmful Code" means computer viruses, worms, trap doors, time bombs, undocumented passwords,
disabling code (which renders Materials unusable until a patch or new password is provided), or any
similar mechanism or device.............................................................................10
2.13 "Information" means all ideas, discoveries, concepts, know-how, trade secrets, techniques, materials,
creative content, tools, inventions, specifications, methodologies, discoveries, works of authorship,
methods of operation, systems, processes, designs, drawings, sketches, models, manuals, samples, tools,
computer programs, technical information, and other confidential business, customer or personnel
information or data, whether provided by a Party orally, in writing, or through electronic or other
means...................................................................................................10
2.21 "Software" means the computer programs that are listed in the applicable Order or provided by ION
under or in connection with this Agreement or an applicable Order. Software also includes all associated
Program Materials.......................................................................................12
2.22 "Specs" or Specifications" mean the specifications for and descriptions of Materials, including any
warranty statements, which are identified in Appendix C hereto. Any request from SBC for changes to
the Specifications, including any additional requirements or specifications, shall be deemed a request
for.....................................................................................................12
2.22 "Customized Specs". All requests for Customized Specs shall be clearly identified as such on the
applicable Order and must be separately approved of by ION. The Customized Specs that have been
accepted by ION shall control over an inconsistency with the Specifications set forth in Appendix C.....12
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2.23 Termination" means the occurrence by which either Party, pursuant to Section 1.4(A), puts an end to
this Agreement and/or Orders placed under this Agreement................................................12
2.24 "Trial Period" or "Acceptance Test Period" means the length of time specified in an Order (or, if
not so specified, a period of no more than sixty (60) days) during which the Acceptance Tests are
performed. The Trial Period commences on the first working day following Delivery and, if necessary,
it shall be tolled for such time as ION requires to correct any problems with the Material and/or
Service being tested. The Trial Period shall recommence on the first working day following ION's
written notice that it has completed all necessary corrective action to cause the Material and/or
Service to pass the Acceptance Tests. The Acceptance Test Period shall not exceed a total ninety
(90) calendar days as a result of ION's failure to correct problems with such delivered product.........12
ARTICLE III - General Clauses....................................................................................12
3.1 Affiliate...............................................................................................12
3.2 Governing Law...........................................................................................13
3.4 Amendments and Waivers..................................................................................14
3.5 Releases Void...........................................................................................14
3.6 Force Majeure...........................................................................................14
3.7 Non-Exclusive Market....................................................................................15
3.8 Assignment..............................................................................................15
3.9 Conflict of Interest....................................................................................15
3.10 Severability.........................................................................................16
3.11 Survival of Obligations..............................................................................16
3.12 Construction and Interpretation......................................................................16
3.13 Third Party Beneficiaries............................................................................17
ARTICLE IV - Compliance Clauses..................................................................................17
4.1 Government Contract Provisions..........................................................................17
Work Orders containing a notation that the Materials is intended for use under government contracts shall
be subject to the then current government provisions referenced in or attached to such Work Orders......17
4.2 Compliance with Laws....................................................................................17
4.3 Changes Required to Meet Codes, Laws, and Regulations...................................................17
ARTICLE V - Liability Clauses....................................................................................18
5.1 Confidentiality.........................................................................................18
5.2 Infringement............................................................................................19
5.3 Indemnity..............................................................................................20
5.4 Liquidated Damages......................................................................................21
5.5 Insurance...............................................................................................21
5.6 Hazardous Materials and Regulated Substances............................................................22
ARTICLE VI - Standards Clauses...................................................................................25
6.1 Engineering Complaints..................................................................................25
6.2 Radio Frequency Energy Standards........................................................................25
6.3 OSMINE..................................................................................................26
ARTICLE VII - Ordering Clauses...................................................................................26
7.1 Orders..................................................................................................26
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Master Agreement No. 00017432
Page 4 of 64
7.2 Product Change Notices..................................................................................27
7.3 Shipping and Packing....................................................................................28
7.4 Title and Risk..........................................................................................29
7.5 Price...................................................................................................29
7.6 Taxes...................................................................................................29
7.7 Invoicing and Payment...................................................................................30
A. Except as otherwise specified in an Order, ION shall render an invoice in duplicate promptly upon the
shipment of Materials or the performance of Services identified in the applicable Work Order. The
invoice shall specify in detail (1) quantities of each ordered item, (2) unit prices of each ordered
item, (3) item and commodity codes, (4) total amounts for each item, (5) the Services provided, (6)
any extra charges associated with changes made pursuant to a Change Order,..............................30
A. (7) applicable sales or use taxes, (8) discounts, (9) shipping charges, (10) total amount due, and (11)
software right-to-use fees as either "application" or "operational". SBC shall pay ION in accordance
with the amounts stated on an invoice within forty-five (45) days of the date of receipt of the invoice.
Payment for shortages, or Materials or Services not conforming to the Specifications, and portions of any
invoice in dispute, may be withheld by SBC until such problem has been resolved, but in
no event shall SBC be entitled to withhold an amount greater than the amount actually in dispute.
If SBC disputes any invoice rendered or amount paid, it shall notify ION of the dispute in writing and
shall provide a detailed explanation of SBC's allegations. The Parties shall use their best efforts to
resolve such dispute expeditiously. Invoices received by SBC more than one (1) year after the provision
of Materials or performance of Services are untimely and SBC shall have no obligation to pay such
invoices................................................................................................31
Invoices for or including freight charges shall be accompanied by legible copies of prepaid freight
bills, express receipts, or bills of lading supporting the invoice amounts. Such invoices shall include
(1) carrier's name, (2) date of shipment, (3) number of pieces, (4) weight, and (5) freight
classification..........................................................................................31
B. If an Order or an Appendix specifies that ION may submit invoices for progress payments prior to Acceptance,
ION is permitted to submit invoices at the end of each month and SBC will make progress payments to ION at
thirty (30) day intervals. Such progress payments shall not exceed ninety percent (90%) of satisfactorily
completed work at the time of billing, as determined by SBC. ION agrees to use such progress payments for
expenses incurred for Services or Materials used in performance of the Work Order for SBC...............31
C. ION agrees to accept standard, commercial methods of payment and evidence of payment obligation including,
but not limited to credit card payments, checks and electronic fund transfers, in connection with payment
for the Materials and the Services.,....................................................................31
7.8 Records and Audits......................................................................................31
ARTICLE VIII - Performance Clauses...............................................................................32
8.1 Project Administration..................................................................................32
8.2 M/WBE...................................................................................................32
SBC has granted to ION a total waiver of any and all M/WBE and DVBE requirements that may be applicable
to ION as a result of its relationship with SBC under the terms of this Agreement.......................32
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Page 5 of 64
8.3 Access..................................................................................................32
A. When appropriate, ION shall have reasonable access to SBC's premises during normal business hours and at
such other times as may be agreed upon by the Parties in order to enable ION to perform its obligations
under this Agreement. Such access may occur through ION's use of remote online access technology used to
conduct remote diagnosis and problem resolution as well as by coordinating visits by ION personnel to SBC's
premises. Remote online access will be coordinated by ION's Technical Assistance Center. ION shall
coordinate access by ION personnel with SBC's designated representative prior to visiting such premises.
ION insures SBC that only persons employed by ION or subcontracted by ION will be allowed to enter SBC's
premises. If SBC requests ION or its Subcontractor to discontinue furnishing any person provided by ION or
its Subcontractor from performing work on SBC's premises, ION shall immediately comply with such request.
Such person shall leave SBC's premises promptly and ION shall not furnish such person again to perform work
on SBC's premises without SBC's written consent........................................................32
B. SBC may require ION or its representatives, including employees and subcontractors, to exhibit
identification credentials, which SBC may issue in order to gain access to SBC's premises for the
performance of Services. If, for any reason, any ION representative is no longer performing such Services,
ION shall immediately inform SBC. Notification shall be followed by the prompt delivery to SBC of the
identification credentials, if issued by SBC, or a written statement of the reasons why said identification
credentials cannot be returned. ION shall insure that its representatives, including employees and
subcontractors, while on or near SBC's premises, will perform work which (i) conforms to the
Specifications, (ii) protects SBC's Materials, buildings, and structures, and (iii) does not interfere with
SBC's business operations. Furthermore, ION shall insure that its representatives, including employees and
subcontractors, while on or near SBC's premises will perform Services with care and due regard for the
safety, convenience, and protection of SBC, its employees, and property and in full conformance with the
policies specified in the SBC Code of Conduct, which prohibits the possession of a weapon or an implement
which can be used as a weapon (a copy of the SBC Code of Conduct is available upon
request)................................................................................................33
8.4 Multi-Supplier Environment..............................................................................33
8.5 Delivery, Performance, and Acceptance...................................................................33
8.6 Subcontractors..........................................................................................34
8.7 Quality Assurance.......................................................................................34
ARTICLE IX - Repair, Maintenance, and Support Clauses............................................................35
9.2 Repair Invoices.........................................................................................37
9.3 Continuing Availability.................................................................................38
9.4 Disaster Recovery.......................................................................................38
ARTICLE X - Software Clauses.....................................................................................39
10.1 Standard Software....................................................................................39
10.2 Standard Software License Fee........................................................................39
10.3 Third Party Software.................................................................................40
10.4 Program Materials....................................................................................40
10.5 Modifications........................................................................................40
10.6 Delivery of Software.................................................................................40
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Master Agreement No. 00017432
Page 6 of 64
ARTICLE XI - Warranty Clauses....................................................................................41
11.1 Warranty.............................................................................................41
11.2 Repairs Not Covered Under Warranty...................................................................42
After the expiration of the Warranty period, all repairs will be made on a time and materials basis. The
applicable price for time and materials repairs will be listed in the then-current issue of ION's price list,
less a 40% discount...........................................................................................42
ARTICLE XII - OTHER Clauses......................................................................................45
12.1 Licenses and Patents.................................................................................45
12.2 Independent Contractor...............................................................................45
12.3 Insignia.............................................................................................45
12.4 Notices..............................................................................................46
12.5 Publicity............................................................................................46
12.6 Entire Agreement.....................................................................................47
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Master Agreement No. 00017432
Page 7 of 64
ARTICLE I
1.1 PREAMBLE AND EFFECTIVE DATE
This Agreement, effective on the date when signed by the last Party
("Effective Date"), is between ION Networks, Inc., a Delaware
corporation, ("ION"), and SBC Services Inc., a Delaware corporation
("SBC"). SBC and ION may be referred to individually as a "Party" or
jointly as the "Parties".
This Agreement is for the purchase of ION's data communications
Materials and/or Services for deployment in support of SBC's ASI-NET
13-state Data Communications Network (DCN) project.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Parties hereto agree as follows:
1.2 SCOPE OF AGREEMENT
Subject to the terms and conditions of this Agreement, ION shall
provide to SBC the Materials and Services described in Appendix A,
pursuant and in conformance with Orders submitted by SBC. The
applicable prices for the Materials and Services are specified in
Appendix B. ION agrees that the Materials and Services shall conform in
all material respects to the Specifications set forth in Appendix C.
The Parties agree to the roles, responsibilities, and procedures in the
Work Orders, the form of which is attached hereto as Appendix D.
1.3 TERM OF AGREEMENT
This Agreement is effective on the date the last Party signs and,
unless terminated or canceled as provided in this Agreement, shall
remain in effect for 1 year (the "Initial Term").
1.4 CANCELLATION AND TERMINATION
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Master Agreement No. 00017432
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A. Termination
Either ION or SBC may terminate this Agreement upon thirty
(30) days prior written notice to the other setting forth the
effective date of such termination; provided, however, that no
such termination shall be effective prior to the expiration of
the Initial Term of this Agreement. The Termination,
Cancellation or expiration of this Agreement shall not affect
the obligations of either Party to the other Party pursuant to
any Order previously executed hereunder, and the terms and
conditions of this Agreement shall continue to apply to such
Order as if this Agreement had not been terminated or
canceled, or had not expired.
SBC may terminate any Order in whole or in part, at any time,
upon ten (10) days written notice to ION, provided that SBC
agrees not to terminate any Order to the extent that it has
already been shipped by ION. In the event that SBC terminates
an Order upon which ION has commenced work, SBC shall pay ION
for all of the costs ION has incurred in connection with such
performance, less any savings realized through resale or
salvage. If requested, ION agrees to substantiate such costs
with proof satisfactory to SBC. In no event shall SBC's
liability exceed the full price of any Materials or Services
ordered hereunder. SBC shall have no liability for Materials
ordered pursuant to any Order that is terminated at least
thirty (30) days prior to the applicable Delivery Date;
provided, however, that SBC shall have no right to terminate
any Order, or any portion of any Order, for custom or
specially manufactured Materials. After the receipt of SBC's
payment for any Services, ION shall deliver the physical
embodiments, if any, of such Services.
B. Cancellation
If either Party fails to cure a material default under this
Agreement or the applicable Order within thirty (30) days
after receipt of written notice of such a default, then, in
addition to all other rights and remedies, the Party not in
default may cancel this Agreement and/or the Order under which
the default occurred. If, pursuant to its Cancellation of an
Order, SBC elects to return any Materials or reject any
Services, ION shall reimburse SBC for those amounts previously
paid by SBC for such Materials and/or Services, including any
costs incurred in connection with promptly returning such
Materials. Upon ION's receipt of any returned Materials and
SBC's receipt of any such reimbursement and refund, title to
any such Materials, which had previously passed to SBC, shall
revert to ION.
Partial Cancellation and Termination:
Where a provision of this Agreement permits SBC to terminate
or cancel an Order, such Termination or Cancellation may, at
SBC's option, be either complete or partial. In the case of a
partial Termination or Cancellation SBC may, at its
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option, accept a portion of the Materials or Services covered
by an Order and pay ION for such Materials or Services at the
unit prices set forth in such Order.
1.5 CUMULATIVE REMEDIES
Except when specifically identified as a Party's sole remedy, any
rights of Cancellation, Termination, liquidated damages, or other
remedies prescribed in this Agreement are cumulative and are not
exclusive of any other remedies to which the injured Party may be
entitled. Neither Party shall retain the benefit of inconsistent
remedies.
ARTICLE II - DEFINITIONS
For definitions with no "Explanation," please see the explanation
provided under the section of the Agreement discussing such term. For
instance,. for an explanation of the term "Initial Term," see the
section entitled "Term of Agreement".
2.1 "Acceptance" means SBC's acceptance of the Materials or
Services ordered by SBC and provided by ION as specified in
Section 8.6, "Delivery, Performance, and Acceptance."
2.2 "Acceptance Date" means the date on which SBC Accepts
Materials or Services.
2.3 "Acceptance Letter" means a document signed by SBC,
substantially in the form of Appendix F, indicating its
Acceptance of the Materials and/or Services.
2.4 "Acceptance Tests" means the performance and reliability
demonstrations and tests that must be successfully performed
on the Materials during the Acceptance Test Period. These
tests may include: (1) sample performances of SBC's routine
business transactions, (2) tests, demonstrations, or
transactions represented or performed by ION, and (3) any
other tests, demonstrations, or transactions included or
referenced in the applicable Work Order to determine whether
the Materials meet the Specifications.
2.5 "Affiliate" means (1) a company, whether incorporated or not,
which owns, directly or indirectly, a majority interest in
either Party (a "Parent Company"), and/or (2) a company,
whether incorporated or not, in which a 5% or greater
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interest is owned, either directly or indirectly, by: (i)
either Party or (ii) a Parent Company.
2.6 "Agreement" shall have the meaning specified in the section
called "Entire Agreement."
2.7 "Cancellation" means the occurrence by which either Party puts
an end to this Agreement or any Work Order(s) prepared
pursuant to the provisions of Section 1.4(B) of this Agreement
due to the breach of this Agreement and/or a Work Order.
2.8 "Delivery" means ION's delivery to SBC of Materials and/or
ION's performance of Services identified on the applicable
Work Order. ION completes Delivery: (i) upon SBC's possession
of the Materials if ION is not required to provide additional
Services in connection with the Materials, such as
installation, (ii) upon completion of any additional Services,
if ION is required to provide such Services in connection with
providing the Materials, or (iii) upon completing the
provision of the Services described in the Work Order.
Notwithstanding the above, SBC shall have no obligation to
accept any Materials or Services that do not conform in all
material respects with the Specifications, as has been
determined by the successful completion of the Acceptance
Tests.
2.9 "Delivery Date" means the date, identified in the applicable
Order, on which the Parties agree ION is scheduled to complete
its Delivery.
2.10 "Documentation" or "Program Materials" means all materials in
machine readable or printed form that explain for SBC or
assist it with the use of the Materials, including, but not
limited to, user and system instructions and manuals, training
materials and ION's and/or a subcontractor's written
Specifications.
2.11 "Hardware" means all ION provided tangible products and
equipment.
2.12 "Harmful Code" means computer viruses, worms, trap doors, time
bombs, undocumented passwords, disabling code (which renders
Materials unusable until a patch or new password is provided),
or any similar mechanism or device.
2.13 "Information" means all ideas, discoveries, concepts,
know-how, trade secrets, techniques, materials, creative
content, tools, inventions, specifications, methodologies,
discoveries, works of authorship, methods of operation,
systems, processes, designs, drawings, sketches, models,
manuals, samples, tools, computer programs, technical
information, and other confidential business, customer or
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personnel information or data, whether provided by a Party
orally, in writing, or through electronic or other means.
2.14 "Laws" shall have the meaning specified in the section called
"Compliance with Laws."
2.15 "Liability" means all losses, damages, expenses, costs,
penalties, fines, fees, including reasonable attorneys' fees,
whether or not arising from or incurred in connection with a
third Party claim or cause of action related to performance or
omission of acts under this Agreement or any Order.
2.16 "Material(s)" means a unit of equipment, apparatus,
components, tools, supplies, material, Hardware, Software, or
firmware thereto purchased or licensed hereunder by SBC from
ION and includes third party Materials provided or furnished
by ION. Materials shall be deemed to include any replacements
for Materials that ION provides pursuant to Section 8.6
(Delivery, Performance and Acceptance) or Article XI (Warranty
Clauses).
2.17 "Material Compliance" means, with respect to ION's performance
under this Agreement, that ION shall be responsible for
complying fully with the Specifications for all Materials and
Services set forth in this Agreement and any Work Order,
except that ION shall not be liable, nor shall SBC have a
claim against ION under any theory of law, in the event that
ION's noncompliance (a) does not negatively affect SBC's use
and enjoyment of Materials and/or Services or (b) results from
SBC's use of Materials in a manner (i) for which they were not
designed, or (ii) not identified by ION as an appropriate use.
2.18 "Notice of Completion" means a written document provided by
ION and substantially in the form of Appendix E, which is
provided to SBC and states that the Materials ordered by SBC
are ready for testing. ION's provision of the Notice of
Completion is a representation and warranty that the Materials
and Services have been tested to assure compliance and are in
compliance with the Specifications.
2.19 "Order" or "Work Order" means such purchase orders, forms,
memoranda or other written communications whose Delivery Date
shall be agreed to and confirmed by ION via electronic
messaging, as may be delivered to ION for the purpose of
ordering Materials and Services hereunder. Each Work Order
shall be substantially in the form of Appendix D hereto.
2.20 "Service(s)" means any and all labor or service provided in
connection with this Agreement or an applicable Order,
including but not limited to, consultation, engineering,
installation, removal, maintenance, training, technical
support, repair, programming, and Software maintenance.
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2.21 "Software" means the computer programs that are listed in the
applicable Order or provided by ION under or in connection
with this Agreement or an applicable Order. Software also
includes all associated Program Materials.
2.22 "Specs" or Specifications" mean the specifications for and
descriptions of Materials, including any warranty statements,
which are identified in Appendix C hereto. Any request from
SBC for changes to the Specifications, including any
additional requirements or specifications, shall be deemed a
request for "Customized Specs". All requests for Customized
Specs shall be clearly identified as such on the applicable
Order and must be separately approved of by ION. The
Customized Specs that have been accepted by ION shall control
over an inconsistency with the Specifications set forth in
Appendix C.
2.23 Termination" means the occurrence by which either Party,
pursuant to Section 1.4(A), puts an end to this Agreement
and/or Orders placed under this Agreement.
2.24 "Trial Period" or "Acceptance Test Period" means the length of
time specified in an Order (or, if not so specified, a period
of no more than sixty (60) days) during which the Acceptance
Tests are performed. The Trial Period commences on the first
working day following Delivery and, if necessary, it shall be
tolled for such time as ION requires to correct any problems
with the Material and/or Service being tested. The Trial
Period shall recommence on the first working day following
ION's written notice that it has completed all necessary
corrective action to cause the Material and/or Service to pass
the Acceptance Tests. The Acceptance Test Period shall not
exceed a total ninety (90) calendar days as a result of ION's
failure to correct problems with such delivered product.
ARTICLE III - GENERAL CLAUSES
3.1 AFFILIATE
ION agrees that any Affiliate identified on Schedule 3.1 hereto may
place Orders with ION, and the term "SBC" shall be deemed to refer to
an Affiliate when an Affiliate places an Order with ION under this
Agreement. All Orders placed by Affiliates shall, by definition,
incorporate the terms and conditions of this Agreement. Such Orders
shall not be valid unless they have been placed in the Affiliate's own
name and have been executed by an officer of the company authorized to
bind the Affiliate with regard to agreements of this nature. By
executing an Order, an Affiliate shall be deemed to have consented to
be bound by the terms of this Agreement, as if such Affiliate were a
Party hereto and had executed this Agreement in its own name. An
Affiliate will be responsible for its own obligations, including but
not limited to, all charges incurred in connection with such Order. The
Parties agree that nothing in this Agreement will be construed as
requiring SBC to indemnify ION, or to otherwise be responsible for any
acts or omissions of an
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Affiliate, nor shall anything in this Agreement be construed as
requiring an Affiliate to indemnify ION, or to otherwise be responsible
for the acts or omissions of SBC.
3.2 GOVERNING LAW
THIS AGREEMENT AND PERFORMANCE HEREUNDER SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF CALIFORNIA EXCLUSIVE OF ITS CHOICE OF LAWS PROVISIONS.
3.3 DISPUTE RESOLUTION
Resolution of all disputes arising out of or in connection with this
Agreement shall be in accordance with the following:
1. In the event of a controversy or claim arising out of or
relating to this Agreement or any Work Order, the Parties
agree that, they shall attempt in good faith to promptly
resolve the matter through negotiations. Participating in the
negotiations shall be (a) ION's applicable Account Management,
as identified in writing by ION, and (b) those members of
SBC's Technology Planning Management with whom ION's Account
Management interfaced in the normal course of business. Each
Party may also involve its Contract Manager when appropriate.
In addition to the participants identified in the preceding
sentences, each Party may name additional persons to
participate in the negotiations, such as ION's Vice-President
Sales and SBC's Executive Director, Strategic Sourcing.
2. If the Parties are unable to resolve the controversy or claim
at issue to their mutual satisfaction within thirty (30) days
after commencing the negotiations described above, and there
is no joint agreement to extend the negotiations period, then
either party (the "Moving Party") may initiate arbitration by
providing the other party written notice of its intent to
arbitrate. If the parties are unable to agree upon an
arbitrator within three (3) business days of the Moving
Party's written notice to arbitrate, the Moving Party may
request the American Arbitration Association ("AAA") to
appoint an arbitrator. The AAA shall select an arbitrator who
can promptly proceed with and strive to conclude the
arbitration as specified herein. If a dispute is submitted to
an arbitrator, it shall be finally resolved through binding
arbitration in Los Angeles, California, according to the
California Arbitration Rules of the AAA, except as modified
herein. The award rendered by the arbitrator shall be final
and binding on the Parties and shall be deemed enforceable in
any court having jurisdiction thereof. The arbitration shall
be heard by a single arbitrator who shall by training,
education, or experience have knowledge of the general subject
matter of this Agreement. The arbitrator shall
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have the power to award damages, injunctive relief and other
remedies to the extent the same would be available in a court
of law having jurisdiction of the matter. The arbitrator shall
promptly commence the arbitration proceeding with the intent
to conclude the proceedings and issue a written decision
stating in reasonable detail the basis for the award, which
must be supported by law and substantial evidence, as promptly
as the circumstances demand and permit, but generally no later
than (10) weeks after the arbitrator's appointment.
3. During dispute resolution proceedings, including arbitration,
the Parties shall continue to perform their obligations under
this Agreement, except for those obligations directly related
to the dispute at issue.
3.4 AMENDMENTS AND WAIVERS
This Agreement and any Work Order may be amended or modified only by a
written document signed by the authorized representatives of both
Parties. ION shall use commercially reasonable efforts to accommodate
any request made by SBC to change the scope of work set forth in an
Order. Any adjustment in the time of performance caused by SBC's
request for a change in the scope of work shall be automatically
reflected in an adjustment of the Delivery Date. Any increase in ION's
cost of performance resulting from SBC's request for a change in the
scope of work shall be passed along to SBC on a time and materials
basis. No course of dealing or failure of either Party to strictly
enforce any term, right or condition of this Agreement shall be
construed as a general waiver or relinquishment of such term, right, or
condition. A waiver by either Party of any default shall not be deemed
a waiver of any other default.
3.5 RELEASES VOID
Neither Party shall require waivers or releases of any personnel or
other representatives of the other in connection with visits to its
premises, and no such releases or waivers shall be pleaded by either
Party in any action or proceeding.
3.6 FORCE MAJEURE
A. Neither Party shall be deemed in default of this Agreement or
any Work Order to the extent that any delay or failure in the
performance of its obligations results from any cause beyond
its reasonable control and without its fault or negligence,
such as acts of God, acts of civil or military authority,
embargoes, epidemics, war, riots, insurrections, fires,
explosions, earthquakes, floods, unusually severe weather
conditions, or strikes (each, a "Force Majeure Condition").
B. If any Force Majeure Condition affects ION's ability to
perform, ION shall give prompt notice to SBC of such
condition. If ION remains unable to perform for a period of
more than fifteen (15) days after giving notice to SBC, SBC
may elect to either: (1) terminate the affected Work Order(s)
or any part thereof for the
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duration of the Force Majeure Condition, or (2) toll ION's
performance under the affected Work Orders(s) and resume
performance thereunder once the Force Majeure Condition
ceases. Should SBC opt to terminate a Work Order pursuant to
option (1), it will have the right to obtain from a third
party the Materials and the Services that would have been
provided by ION under the Work Order or during the affected
period and deduct from any commitment under such Work Order
the quantity of the Materials and Services obtained or for
which commitments have been made elsewhere. In the event that
SBC, pursuant to option (2), decides to toll ION's performance
and have ION resume its performance under the affected Work
Order(s), any affected Delivery Date or performance date shall
be extended up to the length of time the Force Majeure
Condition endured but SBC shall also have the right to obtain
from a third party any Materials and Services that it requires
during the period of the suspension and deduct from any
commitment under such Work Order the quantity of the Materials
and Services obtained or for which commitments have been made
elsewhere but SBC shall also have the right to obtain from a
third party any Materials and Services that it requires during
the period of the suspension and deduct from any commitment
under such Work Order the quantity of the Materials and
Services obtained or for which commitments have been made
elsewhere. Unless SBC gives written notice within ten (10)
days after being notified of the Force Majeure Condition, the
second option shall be deemed selected.
3.7 NON-EXCLUSIVE MARKET
It is expressly understood and agreed that this Agreement does not
grant ION an exclusive privilege to provide to SBC any or all Materials
and Services of the type described in this Agreement nor requires SBC
to purchase or license any Materials or Services. It is, therefore,
understood that SBC may contract with other manufactures and suppliers
for the procurement of comparable Materials and Services and that SBC
may itself perform the Services described herein.
3.8 ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns, but
neither SBC or ION may assign, delegate, subcontract, or otherwise
transfer it's rights or obligations under this Agreement without the
prior written consent of the other Party, which consent will not be
unreasonably withheld; provided, however, SBC will have the right to
assign this Agreement to any Affiliate identified on Schedule 3.1,
without securing the consent of ION. Any unauthorized assignment by
either Party shall be null and void.
3.9 CONFLICT OF INTEREST
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ION represents and warrants that no officer, director, employee, or
agent of SBC has been or will be employed, retained or paid a fee, or
otherwise has received or will receive any personal compensation or
consideration, by or from ION or any of ION's officers, director's
employees, or agents in connection with the obtaining, arranging, or
negotiation of this Agreement or other documents entered into or
executed in connection with this Agreement.
3.10 SEVERABILITY
If any provision or any part of provision of this Agreement shall be
invalid or unenforceable, such invalidity or non-enforceability shall
not invalidate or render unenforceable any other portion of this
Agreement. The entire Agreement will be construed as if it did not
contain the particular invalid or unenforceable provision(s) and the
rights and obligations of ION and SBC will be construed and enforced
accordingly.
3.11 SURVIVAL OF OBLIGATIONS
Obligations and rights in connection with this Agreement which by their
nature would continue beyond the Termination, Cancellation or
expiration of this Agreement, including those in the sections entitled
"Compliance With Laws," "Infringement," "Indemnity," "Publicity,"
"Severability," "Information," "Independent Contractor," and
"Warranty," will survive the Termination, Cancellation, or expiration
of this Agreement.
3.12 CONSTRUCTION AND INTERPRETATION
The language of this Agreement shall in all cases be construed simply,
as a whole and in accordance with its fair meaning and not strictly for
or against any Party. The Parties agree that this Agreement has been
prepared jointly and has been the subject of arm's length and careful
negotiation. Each Party has been given the opportunity to independently
review this Agreement with legal counsel and other consultants, and
each Party has the requisite experience and sophistication to
understand, interpret, and agree to the particular language of the
provisions. Accordingly, in the event of an ambiguity in or dispute
regarding the interpretation of this Agreement, the drafting of the
language of this Agreement shall not be attributed to either Party.
A. Article, section, or paragraph headings contained in this
Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement. The use of
the word "include" shall mean "includes, but is not limited
to." The singular use of words shall include the plural use
and vice versa. Except as otherwise specified, ION's price for
Materials and Services includes the price for all related
Materials or Services necessary for SBC to use the Materials
and/or Services for its intended purpose, as well as all other
ION obligations under this Agreement. All obligations and
rights of the Parties are subject to modification as the
Parties may specifically provide in the applicable Work Order.
Unless the terms of a Work Order expressly override the terms
of this Agreement,
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if there is an inconsistency or conflict between the terms in
this Agreement and those in the applicable Work Order, the
terms in this Agreement shall take precedence.
B. Whenever any Party is entitled to interest under this
Agreement, the amount of interest shall be determined using
12% per annum, or the highest amount allowed by law, whichever
is lower.
3.13 THIRD PARTY BENEFICIARIES
The provisions of this Agreement are for the benefit of the Parties and
not for any other person.
ARTICLE IV - COMPLIANCE CLAUSES
4.1 GOVERNMENT CONTRACT PROVISIONS
Work Orders containing a notation that the Materials is intended for
use under government contracts shall be subject to the then current
government provisions referenced in or attached to such Work Orders.
4.2 COMPLIANCE WITH LAWS
Each Party shall comply with all applicable federal, state, county, and
local rules, including without limitation, all statutes, laws,
ordinances, regulations and codes ("Laws"). The obligation to comply
with all Laws, shall include the procurement of permits, certificates,
approvals, inspections, and licenses, when needed, in the performance
of this Agreement. Each Party further agrees to comply with all
applicable Executive and Federal regulations as set forth in "Executive
Orders and Associated Regulations", a copy of which is attached as
Appendix G and by this reference made a part of this Agreement.
4.3 CHANGES REQUIRED TO MEET CODES, LAWS, AND REGULATIONS
ION shall, at no additional charge, make any changes to the Materials
which are necessary to meet those codes, laws or regulations applicable
to the Materials at no additional charge, provided such codes, laws or
regulations are in effect on the date of shipment of such Materials. If
such changes become effective on or after the date of shipment, ION
shall make, and SBC shall pay for, such changes on a time and materials
basis.
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ARTICLE V - LIABILITY CLAUSES
5.1 CONFIDENTIALITY
All Information furnished by a Party (the "Disclosing Party") to the
other (the "Receiving Party") in connection with this Agreement,
including Information provided under a separate Non-Disclosure
Agreement in connection with discussions and negotiations that occurred
prior to executing this Agreement, shall remain the property of the
Disclosing Party. The Receiving Party shall have no rights in any such
Information. All Information furnished by the Disclosing Party shall
not be considered confidential or proprietary unless it is
conspicuously marked as such prior to disclosure. The Receiving Party
shall hold the Information it has received in strict confidence and it
shall not disclose or use such Information without the express written
consent of the Disclosing Party, except as necessary to enable the
Receiving Party's employees to perform their responsibilities under
this Agreement. The Receiving Party shall use reasonable measures and
make reasonable efforts to provide protection for the Disclosing
Party's Information, which in no event shall be less strict than the
measures the Receiving Party uses to protect its own Information.
Information shall not be deemed confidential if such
Information
1. was already known to the Receiving Party free of any
obligation to keep it confidential at the time of its
disclosure by the Disclosing Party as evidenced by
the Receiving Party's written records prepared prior
to such disclosure; or
2. is or becomes publicly known through no wrongful act
of the Receiving Party; or
3. is rightfully received from a third person having no
direct or indirect secrecy or confidentiality
obligation to the Disclosing Party with respect to
such Information; or
4. is independently developed by an employee, contractor
or agent of the Receiving Party or a third Party not
associated with the Project and who did not have any
direct or indirect access to the Information; or
5. is approved for release by written authorization by
the Disclosing Party.
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B. All confidential Information shall be used only in connection
with the Receiving Party's performance under this Agreement,
and may not be used for other purposes except as may be agreed
upon between ION and SBC in writing. All copies of such
Information, in written, graphic or other tangible form, shall
be returned to the Disclosing Party upon the earlier of (i)
the disclosing Party's request or (ii) the Termination,
Cancellation, or expiration of this Agreement. ION, however,
may continue to use any Information that it has received in
order to complete its performance under a Work Order that has
not been terminated.
5.2 INFRINGEMENT
A. ION represents and warrants that it has made reasonable
independent investigation to determine the legality of its
right to sell or license the Materials or provide Services as
specified in this Agreement.
B. In addition to ION's other obligations set forth in this
Section, if an injunction or order is obtained against SBC's
use of any Materials or Service, or, if in ION's opinion, any
Material or Service is likely to become the subject of a claim
of infringement, ION will, at its expense:
1. Procure for SBC the right to continue using the
Materials or Service; or
2. After consultation with SBC, replace or modify the
Materials or Service to make it a substantially
similar, functionally equivalent, non-infringing
Materials or Service.
C. If the Materials or Service is purchased or licensed, and
neither (B)(1) nor (B)(2) above is possible, in addition to
SBC's other rights, SBC may cancel the applicable Order and
require ION to remove, or cause the removal and return of,
such Materials or Service from SBC's location and refund any
charges paid by SBC for the Materials adversely affected by
the infringement, less a sum calculated as if the amount paid
were depreciated on a straight line basis over a five (5) year
period.
D. In no event will SBC be liable to ION for any charges after
the date that SBC no longer uses any Materials or Service
because of actual or claimed infringement.
E. Notwithstanding the foregoing, ION shall have no liability for
any claim of infringement to the extent it results from: (i)
SBC's use of a superseded or altered release of some or all of
the Materials if infringement would have been avoided by the
use of a subsequent unaltered release of the Materials that
have been provided to SBC; (ii) SBC's use of any software or
other materials not furnished, recommended, suggested or
authorized by ION or contemplated by the applicable Work
Order; (iii) SBC's use of the Materials in combination with
any equipment or software not contemplated by the applicable
Work Order and not
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recommended, suggested or authorized by ION; (iv) ION's
compliance with the detailed written instructions of SBC
requiring changes to any Materials furnished by ION, when such
instructions result in actual infringement; provided, however,
that ION shall indemnify SBC when, despite SBC's instructions,
the infringement or claim of infringement is based upon: (1)
products, software or documentation that are available on the
open market; or (2) products, software or documentation of
ION's origin, design or selection. Further, ION shall
indemnify SBC when ION indemnifies other customers of ION
against infringement or claims of infringement based upon the
products, software or documentation, as modified by ION in
accordance with SBC's instructions; or (vi) modification of
the Materials where such modification is not authorized,
suggested or made by ION and is not contemplated in the
applicable Work Order.
5.3 INDEMNITY
A. To the fullest extent permitted by law, ION shall defend,
indemnify, and hold harmless SBC and its Affiliates,
(including their employees, officers, directors, agents, and
contractors) against any Liability arising from: (1) PERSONAL
injurY, including death and (2) PROPERTY damage, including
theft, that occur as a result of a defect in any material or
in any service provided by ion to sbc . sbc may seek
indemnification from ion under this section 5.3 only to the
extent that the acts or omissions of ion have been proved to
have contributed to the alleged harm or wrongdoing. further,
ion shall in no way be liable for the acts or omissions of SBC
and its Affiliates (including their employees, officers,
directors, agents, and contractors) TO THE EXTENT THEY give
rise to a claim, or have contributed to the alleged harm or
wrongdoing, for which indemnification is sought under this
section.
B. SBC shall promptly notify ION of any claim, demand, notice or
legal proceedings ("Claim") for which ION may be responsible
under this indemnity obligation. A delay in notice shall not
relieve ION of its indemnity obligation except to the extent
ION can show it was prejudiced or otherwise harmed by the
delay.
C. ION shall assume, at its expense, the sole defense of a Claim
through counsel selected by ION and shall keep SBC fully
informed as to the progress of such defense. Upon reasonable
request of ION and at ION's expense, SBC shall cooperate with
ION in the defense of the Claim. At its option and expense,
SBC may retain or use separate counsel to represent it,
including in-house counsel. ION shall maintain control of the
defense, including the decision to settle a Claim.
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If SBC determines that the Claim in question should not for
whatever reason be settled, SBC, at its own expense, shall
have the right to take over the defense of such Claim. ION
shall pay the full amount of any judgment, award or settlement
with respect to a Claim and all other expenses related to the
resolution of such Claim, including costs, interest, and
reasonable attorneys' fees; provided that ION shall have no
obligation to refund to SBC the portion of any judgment, award
or settlement, including all other expenses related to the
resolution of a Claim, however categorized, that were incurred
as the result of SBC's decision to exert control or to direct
the defense of the Claim in any manner.
5.4 LIQUIDATED DAMAGES
ION recognizes the importance of meeting Delivery Dates mutually agreed
upon by SBC and ION and agrees to the following liquidated damage
provisions and procedures:
Upon discovery of information indicating a reasonable certainty that
Materials and/or Services will not be completed before the scheduled
Delivery Date, ION shall notify SBC and provide information relating to
the estimated length of delay. The Parties shall work jointly toward
resolution of a plan to resolve the delayed Delivery. If the Parties
reach agreement on an extended Delivery Date and ION fails to meet the
extended Delivery Date, SBC may (a) cancel such Order, or (b) exercise
its right to recover liquidated damages specified hereunder and further
extend the Delivery Date. No payments, progress or otherwise, made by
SBC to ION after any scheduled Delivery Date shall constitute a waiver
of liquidated damages.
In the event of ION's failure to meet an extended Delivery Date, SBC
shall be entitled to one-thousand dollars ($1,000) for each day after
the extended Delivery Date until the day of actual Delivery. Liquidated
damages under this section shall in no event exceed 100% of the total
price specified for the Materials and/or Services delayed.
5.5 INSURANCE
A. With respect to performance hereunder, and in addition to
ION's other obligations hereunder, ION agrees to maintain, at
all times during the term of this Agreement, the following
minimum insurance coverages and limits and any additional
insurance and/or bonds required by law:
1. Workers' Compensation insurance with benefits
afforded under the laws of the state in which the
Services are to be performed and Employers Liability
insurance with minimum limits of $100,000 for Bodily
Injury-each accident, $500,000 for Bodily Injury by
disease-policy limits and $100,000 for Bodily Injury
by disease-each employee.
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2. Commercial General Liability insurance with minimum
limits of: $2,000,000 General Aggregate limit;
$1,000,000 each occurrence sub-limit for all bodily
injury or property damage incurred in any one
occurrence; $1,000,000 each occurrence sub-limit for
Personal Injury and Advertising; $2,000,000
Products/Completed Operations Aggregate limit, with a
$1,000,000 each occurrence sub-limit for
Products/Completed Operations. Fire Legal Liability
sub-limits of $300,000 are required for lease
agreements.
SBC and its Affiliated companies will be listed as an
Additional Insured on the Commercial General
Liability policy.
3. If use of a motor vehicle is required, Automobile
Liability insurance with minimum limits of $1,000,000
combined single limits per occurrence for bodily
injury and property damage, which coverage shall
extend to all owned, hired and non-owned vehicles.
SBC requires that companies affording insurance coverage have
a rating of B+ or better and a Financial Size Category rating
of VII or better rating, as rated in the A.M. Best Key Rating
Guide for Property and Casualty Insurance Companies.
B. A certificate of insurance stating the types of insurance and
policy limits provided ION must be received prior to
commencement of any work. If a certificate is not received,
ION hereby authorizes SBC, and SBC may, but is not required
to, obtain insurance on behalf of ION as specified herein. SBC
will either invoice ION for the costs incurred to so acquire
insurance or will reduce by an applicable amount any amount
owed to ION.
C. The cancellation clause on the certificate of insurance will
be amended to read as follows:
"THE ISSUING COMPANY WILL MAIL 30 DAYS WRITTEN NOTICE
TO THE CERTIFICATE HOLDER PRIOR TO CANCELLATION OR A
MATERIAL CHANGE TO POLICY DESCRIBED ABOVE."
D. ION shall also require all subcontractors performing work on
the project or who may enter upon the work site to maintain
the same insurance requirements listed above.
5.6 HAZARDOUS MATERIALS AND REGULATED SUBSTANCES
A. A "Regulated Substance" as referred to in this clause is a
generic term used to describe all Materials that are regulated
by applicable federal or any state or local government during
transportation, handling and/or disposal. These include, but
are not limited to, Materials
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that are regulated as (a) "hazardous material" under the
Hazardous Material Act and the Control of Radioactive
Contamination of Environmental Law, Title 8 of the California
Environment Administrative Code, Section 5194 and the
Hazardous Substances Information and Training Act, (b)
"chemical hazards" under the Occupational Safety and Health
Administration (OSHA) standards, (c) "chemical substances and
mixtures" under the Toxic Substances Control Act and
"chemicals" on the Governor's List known to the State of
California to cause cancer, birth defects, and/or other
reproductive harm, as that term is defined in the California
Safe Drinking Water and Toxic Enforcement Act of 1986
("Proposition 65"), (d) "pesticides" under the Federal
Insecticide, Fungicide and Rodenticide Act, and (e) "hazardous
waste" as defined or listed under the Resource Conservation
and Recovery Act and the Hazardous Waste Control Law.
B. ION shall comply with all applicable Laws and Regulations,
including any notice requirements, regarding any Materials
ordered hereunder which contains or consists of a Regulated
Substance or any Service ordered hereunder which involves the
use, handling, storage, recycling, or transportation of
Regulated Substances. ION shall notify SBC and provide SBC
with all necessary information (including but not limited OSHA
Material Safety Data Sheets [MSDS]) at least thirty (30) days
before shipping Materials containing or consisting of
Regulated Substances to SBC or commencing the performance of
Services for SBC involving the handling or use of Regulated
Substances. Each MSDS must include an attachment indicating
the specific worker protection equipment requirement for use
with the Regulated Substance covered thereby. If the Regulated
Substance is in Materials or materials which are shipped to
California facilities and is a chemical defined by Proposition
65, the MSDS for said chemical should indicate that the
chemical is one which is known to the state of California to
cause cancer, birth defects or other reproductive harm. ION
shall maintain and distribute such information upon request to
SBC and/or any other contractor at the same location.
C. Notwithstanding any other provision of this Agreement, SBC
shall have the right, but not the duty, to terminate without
liability any Order for Materials consisting of or containing
a Regulated Substance or Service involving the use and
handling of Regulated Substances thirty (30) days after such
notification from SBC. Otherwise, SBC and ION shall cooperate
concerning the acceptance by SBC of such Materials and
Services. ION shall xxxx all Materials provided hereunder as
Regulated Substances which are required by all applicable Laws
and Regulations to be so marked, and shall provide assistance
to SBC of an advisory nature in the handling and use of
Regulated Substances provided hereunder and the disposal of
"hazardous waste", as defined by applicable Laws and
Regulations ("Hazardous Wastes"), resulting therefrom.
D. ION shall provide SBC with the same information pertaining to
Regulated Substances in or used in the Materials and Services
it provides to SBC or
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Hazardous Waste as ION provides to ION's employees or agents
involved in the disposition or treatment of such Regulated
Substances.
E. ION is hereby informed that hazardous chemicals may be used
and located at various facilities owned by SBC. ION or any
person supplied by ION may see the MSDS for a particular
substance in the facility in which they are working by
contacting SBC's Building Operations office and filling out
the request form. ION agrees to assume responsibility for
advising its employees, agents and subcontractors who will be
working at SBC's facilities of the existence of chemical
hazards on SBC's facilities and the availability of said
Material.
F. When performing Services at SBC's California facilities, ION
shall and shall require its subcontractors to issue warnings
in accordance with Proposition 65 for exposure to chemicals
covered by Proposition 65 introduced by ION or its
subcontractor to personnel at SBC's facilities, the public and
SBC from the time ION and/or its subcontractor enter SBC's
facilities and/or commence performing Services through the
completion of such performance. ION shall, and shall require
its subcontractors, to warn SBC of any exposure to chemicals
covered by Proposition 65 which may continue after ION and/or
its subcontractors have completed the performance of Services.
Such warning may take the form of, but not be limited to, a
MSDS for each such chemical.
G. ION IS HEREBY WARNED IN ACCORDANCE WITH PROPOSITION 65 THAT
EXPOSURE TO CHEMICALS MAY OCCUR AT SBC'S FACILITIES. If
requested, SBC shall make available to ION, its
subcontractors, and any of their employees, a MSDS for the
chemicals covered by Proposition 65, if any, at SBC's
facilities where ION is providing Services. ION shall issue
appropriate warnings to inform and educate its employees,
agents, subcontractors, other invitees, and employees of any
of them, entering SBC's facilities of the above information in
accordance with applicable Laws and Regulations. ION and SBC
shall cooperate on such warning.
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ARTICLE VI - STANDARDS CLAUSES
6.1 ENGINEERING COMPLAINTS
A. SBC reserves the right to notify ION in cases where SBC has
identified current or potential problems or service areas
concerning the operation, maintenance, Engineering,
Installation or design of Materials furnished hereunder. ION
agrees to accept and acknowledge such a notice (an
"Engineering Complaint"), if a problem does exist, and to work
with SBC on a reasonable resolution thereof. Acknowledgment of
the receipt for such Engineering Complaint and identification
of ION's proposed organization which will be responsible for
resolving it will be provided to SBC within fifteen (15)
working days of ION's receipt of the Engineering Complaint.
Complaint resolution dates shall not exceed ninety (90)
calendar days from the date of SBC's notice, unless a later
date is mutually agreed upon by the Parties. If unable to
resolve the Engineering Complaint within ninety (90) calendar
days, ION shall issue an interim report providing current
status and an estimate of schedule for resolution.
B. Monthly reporting of the status of such open Engineering
Complaints shall be furnished to SBC by ION, together with the
proposed schedule for their resolution. ION shall provide this
information via written or electronic means, (i.e., E-Mail),
in accordance with mutually agreed procedures for electronic
transmission of such information. It is ION's responsibility
to provide SBC with prompt written notice upon resolving an
Engineering Complaint.
C. SBC shall notify ION in writing as to where correspondence
regarding Engineering Complaints shall be directed and ION
shall observe and follow such notification.
6.2 RADIO FREQUENCY ENERGY STANDARDS
A. Should Materials furnished in connection with this Agreement
generate harmful interference to radio communications, ION
shall promptly provide to SBC information relating to methods
of suppressing such interference. In the event such
interference in SBC's judgment cannot reasonably be
suppressed, then SBC may return the Materials and obtain a
full refund of the price paid for such Materials.
B. Nothing in this section shall be deemed to diminish or
otherwise limit ION's obligations or SBC's rights, including
those specified in the "Warranty" section of this Agreement.
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6.3 OSMINE
All Materials must pass SBC's Approval for Use testing requirements
which will include documentation evidencing NEBS compliance. SBC has
granted to ION a total waiver of OSMINE for all Materials provided by
ION under this Agreement. Instead, ION is required to secure CLEI and
TIRKS Function Codes as set forth in Telcordia GR-2977, for all
applicable new, changed, modified Hardware and/or potential plug-in
substitutions where it supports the function code chaining work.
ARTICLE VII - ORDERING CLAUSES
7.1 ORDERS
A. SBC may order Materials and Services by submitting Orders in
connection with this Agreement. Orders shall specify:
1. a description of the Services and/or Materials,
including any numerical/alphabetical identification
referenced in the applicable price list;
2. the requested Delivery Date, which shall be confirmed
by ION as evidenced by writing or by electronic
messaging;
3. the location to which Materials are to be shipped, or
the site where Services will be rendered;
4. the location to which invoices are to be rendered for
payment.
5. SBC's Order number; and
6. any Custom Specs requested by SBC, which are subject
to ION's approval.
B. The terms in this Agreement shall apply to Orders submitted in
connection with this Agreement, and preprinted terms on the
back of any Order shall not apply.
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7.2 PRODUCT CHANGE NOTICES
A. ION may at any time make changes in the Materials or Software,
or modify the drawings and Specifications relating thereto, or
substitute Materials or Software of later design to fill an
Order, provided the changes, modifications and substitutions
under normal and proper use do not negatively impact upon the
Materials' or Software's form, fit, or function.
B. ION agrees to make every reasonable effort to notify SBC, in
writing in advance, of any change to be made in the Materials
or Software furnished in accordance with the Specifications,
Software related documentation and/or documentation that would
impact upon the form, fit or function of the Materials or
Software.
C. ION shall furnish Product Change Notices for any change to be
made in the Materials provided under this Agreement to SBC.
ION shall furnish such notices to an individual to be
designated by SBC.
D. SBC shall notify ION in writing as to where correspondence
regarding Product Change Notices and Product changes shall be
directed and ION shall observe and follow such notification.
E. In order for SBC to review Materials or Software changes, ION
shall make every reasonable effort to provide thirty (30) days
advance notice, of any change to the Materials or Software .
The final classification of any Materials or Software change
proposed by ION will be determined by ION. If SBC disagrees
with ION's classification of a change, SBC shall notify ION.
If requested, ION shall provide documentation to substantiate
the classification of such change. ION agrees to make
available to SBC information relating to the application of
such changes to SBC's Materials.
F. In any of the instances above, if ION ascertains that
Materials or Software subject to such change are readily
returnable, SBC, at its expense, shall remove and return such
Materials or Software to ION's facility. ION, at its expense,
shall implement such change at its facility and return such
changed Materials or Software to SBC's designated location
within the contiguous United States. If the change represents
an product, feature or component enhancement SBC shall bear
the expense. Reinstallation shall be performed by SBC at its
expense. If SBC disagrees that the Materials or Software are
readily returnable, SBC will notify ION. If requested, ION
shall provide documentation to substantiate the returnability
of the Materials or Software.
G. ION agrees to make available to SBC, or SBC's representatives,
if SBC's representative has a signed nondisclosure agreement
with ION, information relating to the application of such
changes to SBC's Materials. SBC reserves the
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right to notify and request ION to modify, change, or develop
Materials to meet a specific need. Such requests, if accepted
by ION, will be made at SBC's expense.
H. ION shall furnish to SBC a quarterly summary report listing
all change notifications released to SBC during the previous
twelve (12) months. Notification of Materials or Software
changes will be provided to SBC at no charge.
7.3 SHIPPING AND PACKING
A. Unless instructed otherwise by SBC, or the Parties otherwise
agree, all Materials shipped shall be packed and marked by ION
at SBC's expense and in accordance with all Laws,
transportation industry standards and the applicable Order.
B. ION shall (a) use carriers approved and listed in SBC's
"Shipment Routing Guide", provided herein; (b) ship Orders
complete, provided ION may ship Materials in partial shipments
with prior approval of SBC; (c) ship to the destination in the
Order; (d) comply with SBC's shipping instructions; (e)
enclose a packing memorandum with each shipment and, when more
than one package is shipped, identify the package containing
such packing memorandum; (f) xxxx SBC's Order number and
product identification number ("PID") on all packages,
shipping papers and subordinate documents; (g) list basic unit
and part number or Common Language Equipment Identified
("CLEI") code numbers and Continuing Property Record ("CPR")
when required by SBC; and (h) include barcodes containg the
aforementioned information on all equipment, shipping
containers and packages; and (i) ION may consolidate multiple
Orders as one shipment to SBC and shall provide and state on
the xxxx of lading the number of pieces, weight, freight
classification, and carrier's tariff reference number for each
individual Order.
C. If SBC incurs additional costs as a result of ION's failure to
comply with the provisions of this section called Shipping and
Packing, ION shall reimburse SBC for such reasonable costs,
which SBC shall document and provide to ION in writing.
D. Materials purchased, repaired or replaced hereunder will be
packed by ION in containers adequate to prevent damage during
shipping, handling and storage and in accordance with all
Laws, transportation industry standards, and the applicable
Order. Any Materials received by ION from any manufacturer
with damaged shipping containers will be repackaged by ION in
containers adequate to prevent damage during subsequent
shipping, handling and storage.
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7.4 TITLE AND RISK
Title to Materials purchased, but not to Materials licensed, will vest
in SBC once the Materials have been delivered to the designated
carrier, F.O.B. carrier's place of acceptance. If this Agreement calls
for additional Services such as unloading or installation, to be
performed after Materials have been Delivered, ION will retain title
and risk of loss to the Materials until the additional Services have
been Delivered as well.
7.5 PRICE
Materials and Services shall be furnished by ION in accordance with the
prices set forth in Appendix B, attached hereto and made a part hereof,
or pursuant to firm prices which are quoted by ION for such Materials
and Services, whichever price is lower. The prices for all Materials
and Services in Appendix B are subject to change only in accordance
with this Agreement, which changes must be in writing and signed by
both Parties. If ION at any time makes a general price decrease, ION
shall promptly notify SBC in writing and extend such decrease to SBC
effective on the date of such general price decrease.
7.6 TAXES
A. ION may invoice SBC the amount of any federal excise taxes or
state or local sales taxes imposed upon the sale of Materials
or provision of Services as separate items, if applicable,
listing the taxing jurisdiction imposing the tax. Installation
or labor charges must be separately stated. SBC agrees to pay
all applicable taxes to ION which are stated on and at the
time the Materials or Service invoice is submitted by ION. ION
agrees to remit taxes to the appropriate taxing authorities.
B. ION agrees to pay, and to hold SBC harmless from and against,
any penalty, interest, additional tax, or other charge that
may be levied or assessed as a result of the delay or failure
of ION, for any reason, to pay any tax or file any return or
information required by law, rule or regulation or by this
Agreement to be paid or filed by ION. ION agrees to pay and to
hold SBC harmless from and against any penalty or sanction
assessed as a result of ION doing business with any country
subject to U.S. trade restrictions.
C. Upon SBC's request, the Parties shall consult with respect to
the basis and rates upon which ION shall pay any taxes for
which SBC is obligated to reimburse ION under this Agreement.
If SBC determines that in its opinion any such taxes are not
payable or should be paid on a basis less than the full price
or at rates less than the full tax rate, ION shall make
payment in accordance with such determinations and SBC shall
be responsible for such determinations. If collection is
sought by the taxing authority for a greater amount of taxes
than that so determined by SBC, ION shall promptly notify SBC.
ION shall cooperate with SBC in contesting such determination,
but SBC shall be responsible and shall reimburse ION for any
tax,
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interest, or penalty in excess of its determination. If SBC
desires to contest such collection, SBC shall promptly notify
ION. If SBC determines that in its opinion it has reimbursed
ION for sales or use taxes in excess of the amount which SBC
is obligated to reimburse ION, SBC and ION shall consult to
determine the appropriate method of recovery of such excess
reimbursements. ION shall credit any excess reimbursements
against tax reimbursements or other payments due from SBC if
and to the extent ION can make corresponding adjustments to
its payments to the relevant tax authority. At SBC's request,
ION shall timely file any claims for refund and any other
documents required to recover any other excess reimbursements,
and shall promptly remit to SBC all such refunds (and
interest) received.
D. If any taxing authority advises ION that it intends to audit
ION with respect to any taxes for which SBC is obligated to
reimburse ION under this agreement, ION shall (1) promptly so
notify SBC, (2) afford SBC an opportunity to participate on an
equal basis with ION in such audit with respect to such taxes
and (3) keep SBC fully informed as to the progress of such
audit. Each Party shall bear its own expenses with respect to
any such audit, and the responsibility for any additional tax,
penalty or interest resulting from such audit shall be
determined in accordance with the applicable provisions of
this Section. ION's failure to comply with the notification
requirements of this section shall relieve SBC of its
responsibility to reimburse ION for taxes only if ION's
failure materially prejudiced SBC's ability to contest
imposition or assessment of those taxes.
E. In addition to its rights under subparagraph (d) above with
respect to any tax or tax controversy covered by this Tax
Section, SBC will be entitled to contest, pursuant to
applicable law and tariffs, and at its own expense, any tax
previously billed that it is ultimately obligated to pay. SBC
will be entitled to the benefit of any refund or recovery of
amounts that it had previously paid resulting from such a
contest. ION will cooperate in any such contest, provided that
all costs and expenses incurred in obtaining a refund or
credit for SBC shall be paid by SBC.
F. If either Party is audited by a taxing authority or other
governmental entity, the other Party agrees to reasonably
cooperate with the Party being audited in order to respond to
any audit inquiries in an appropriate and timely manner, so
that the audit and any resulting controversy may be resolved
expeditiously.
7.7 INVOICING AND PAYMENT
A. Except as otherwise specified in an Order, ION shall render an
invoice in duplicate promptly upon the shipment of Materials
or the performance of Services identified in the applicable
Work Order. The invoice shall specify in detail (1) quantities
of each ordered item, (2) unit prices of each ordered item,
(3) item and commodity codes, (4) total amounts for each item,
(5) the Services provided, (6) any extra charges associated
with changes made pursuant to a Change Order,
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(7) applicable sales or use taxes, (8) discounts, (9) shipping
charges, (10) total amount due, and (11) software right-to-use
fees as either "application" or "operational". SBC shall pay
ION in accordance with the amounts stated on an invoice within
forty-five (45) days of the date of receipt of the invoice.
Payment for shortages, or Materials or Services not conforming
to the Specifications, and portions of any invoice in dispute,
may be withheld by SBC until such problem has been resolved,
but in no event shall SBC be entitled to withhold an amount
greater than the amount actually in dispute. If SBC disputes
any invoice rendered or amount paid, it shall notify ION of
the dispute in writing and shall provide a detailed
explanation of SBC's allegations. The Parties shall use their
best efforts to resolve such dispute expeditiously. Invoices
received by SBC more than one (1) year after the provision of
Materials or performance of Services are untimely and SBC
shall have no obligation to pay such invoices.
Invoices for or including freight charges shall be accompanied
by legible copies of prepaid freight bills, express receipts,
or bills of lading supporting the invoice amounts. Such
invoices shall include (1) carrier's name, (2) date of
shipment, (3) number of pieces, (4) weight, and (5) freight
classification.
B. If an Order or an Appendix specifies that ION may submit
invoices for progress payments prior to Acceptance, ION is
permitted to submit invoices at the end of each month and SBC
will make progress payments to ION at thirty (30) day
intervals. Such progress payments shall not exceed ninety
percent (90%) of satisfactorily completed work at the time of
billing, as determined by SBC. ION agrees to use such progress
payments for expenses incurred for Services or Materials used
in performance of the Work Order for SBC.
C. ION agrees to accept standard, commercial methods of payment
and evidence of payment obligation including, but not limited
to credit card payments, checks and electronic fund transfers,
in connection with payment for the Materials and the Services.
7.8 RECORDS AND AUDITS
ION agrees that it will:
A. Maintain complete and accurate records related to the
Materials and Services provided by ION to SBC, including
records of all amounts billable to and payments made by SBC in
accordance with generally accepted accounting principles and
practices, uniformly and consistently applied in a format that
will permit audit;
B. Retain such records and reasonable billing detail for a period
of at least three (3) years from the date of final payment for
Materials and Services;
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C. Provide reasonable supporting documentation to SBC concerning
any disputed invoice amount within thirty (30) calendar days
after receipt of written notification of such dispute; and
D. Permit SBC and its authorized representatives to inspect and
audit during normal business hours the charges invoiced to
SBC. Should SBC request an audit, ION will make available any
pertinent records and files to SBC during normal business
hours at no additional charge.
ARTICLE VIII - PERFORMANCE CLAUSES
8.1 PROJECT ADMINISTRATION
Within seven (7) days of execution of this Agreement, each Party shall
appoint a project manager to coordinate activities related to the
administration and implementation of this Agreement, oversee its
operation, and to be the overall point of contact and representative of
that Party. The processes and responsibilities of the respective
project managers shall include scheduling, risk management, pricing
issues, and change control. If ION utilizes a subcontractor to carry
out any of ION's obligations under this Agreement, ION will ensure a
project manager is designated by such subcontractor.
8.2 M/WBE
SBC has granted to ION a total waiver of any and all M/WBE and DVBE
requirements that may be applicable to ION as a result of its
relationship with SBC under the terms of this Agreement.
8.3 ACCESS
A. When appropriate, ION shall have reasonable access to SBC's
premises during normal business hours and at such other times
as may be agreed upon by the Parties in order to enable ION to
perform its obligations under this Agreement. Such access may
occur through ION's use of remote online access technology
used to conduct remote diagnosis and problem resolution as
well as by coordinating visits by ION personnel to SBC's
premises. Remote online access will be coordinated by ION's
Technical Assistance Center. ION shall coordinate access by
ION personnel with SBC's designated representative prior to
visiting such premises. ION insures SBC that only persons
employed by ION or subcontracted by ION will be allowed to
enter SBC's premises. If SBC requests ION or its Subcontractor
to discontinue furnishing any person provided by ION or its
Subcontractor from performing work on SBC's premises, ION
shall immediately comply with such request. Such person shall
leave SBC's premises promptly and ION shall not furnish such
person again to perform work on SBC's premises without SBC's
written consent.
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B. SBC may require ION or its representatives, including
employees and subcontractors, to exhibit identification
credentials, which SBC may issue in order to gain access to
SBC's premises for the performance of Services. If, for any
reason, any ION representative is no longer performing such
Services, ION shall immediately inform SBC. Notification shall
be followed by the prompt delivery to SBC of the
identification credentials, if issued by SBC, or a written
statement of the reasons why said identification credentials
cannot be returned. ION shall insure that its representatives,
including employees and subcontractors, while on or near SBC's
premises, will perform work which (i) conforms to the
Specifications, (ii) protects SBC's Materials, buildings, and
structures, and (iii) does not interfere with SBC's business
operations. Furthermore, ION shall insure that its
representatives, including employees and subcontractors, while
on or near SBC's premises will perform Services with care and
due regard for the safety, convenience, and protection of SBC,
its employees, and property and in full conformance with the
policies specified in the SBC Code of Conduct, which prohibits
the possession of a weapon or an implement which can be used
as a weapon (a copy of the SBC Code of Conduct is available
upon request).
8.4 MULTI-SUPPLIER ENVIRONMENT
ION shall work cooperatively with SBC and certain SBC suppliers, as
mutually agreed, to discuss interoperability requirements of such
supplier's products with the Materials, provided that any proprietary
or confidential information ION may communicate to such suppliers
during such meeting shall be disclosed only subject to a nondisclosure
agreement mutually agreed to by ION and the applicable supplier.
8.5 DELIVERY, PERFORMANCE, AND ACCEPTANCE
A. ION acknowledges the competitive telecommunications
marketplace in which SBC operates and understands that SBC's
business requires prompt delivery of Material and provision of
Services by the specified delivery dates.
B. For orders that involve Services only, or ION's delivery of
Materials with the provision of Services, e.g., installation,
ION shall provide SBC a Notice of Completion after Delivery.
SBC's Acceptance Test Period shall commence upon (i) SBC's
receipt of ION's Notice of Completion, or (ii) upon the
Delivery of Material to SBC where ION provides no Services
other than shipping. SBC's acceptance shall occur no earlier
than ION's Delivery of Materials and/or Services. If Materials
or Services are not in Material Compliance with the
Specifications, SBC shall notify ION and provide ION an
opportunity to cause such Materials or Service to comply in
all material respects with the Specifications. After any
corrective action, ION shall provide a Notice of Completion,
and the Acceptance Test Period shall recommence. Tolling for
corrective actions shall not cause the Acceptance Test Period
to exceed ninety (90) calendar days. If the Materials or
Services successfully complete the
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Acceptance Tests during the Acceptance Test Period, SBC shall
indicate its acceptance by signing the Acceptance Letter and
delivering a copy thereof to ION.
8.6 SUBCONTRACTORS
A. Each Party has the right to utilize subcontractors in the
performance of this Agreement. However, no subcontracting
arrangement shall release either Party from its
responsibilities and obligations under this Agreement. Each
Party shall be fully responsible for the work and activities
of each of its subcontractors, including compliance with the
terms of this Agreement. Additionally, each Party shall be
responsible for all payments to its subcontractors.
B. As of the Effective Date, SBC has approved ION's use of any of
the subcontractors identified on Schedule 8.6 hereto. Prior to
ION's use of any subcontractor not identified on Schedule 8.6,
ION shall provide SBC with the name and qualifications of the
proposed subcontractor and shall inform SBC's Contact Person
of what Materials are to be produced and/or Services to be
performed by such subcontractor. Except for those
subcontractors identified on Schedule 8.6, ION agrees not to
utilize any subcontractors that are excluded at the time the
work is to be performed, for any lawful reason, from
performing Services for SBC. Subcontractors must abide by the
terms of this Agreement and the applicable Work Order(s).
8.7 QUALITY ASSURANCE
ION hereby agrees that Materials furnished hereunder by ION have
undergone or have been subject to quality control activities and
procedures, including performance measurements, testing, quality
process reviews or inspections to implement such procedures.
ION also agrees to maintain and make available to SBC or SBC's agent
the data including all information and reports about ION's quality and
process control procedures that demonstrate that the Materials
Delivered meets the specified quality and reliability requirements.
ION agrees that:
A. ION shall provide to SBC a TL 9000 quality plan. Elements to
be detailed in the Quality Plan include (at minimum):
1. Documentation of ION's quality assurance process,
including a representation that ION's Subcontractor
is ISO 9000 certified.
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2. Identification of the TL 9000 or ISO 9000
certification status and schedule for becoming
registered of the Subcontractors identified on
Schedule 8.6.
3. Designation of ION's quality representative and of
the senior executive with quality responsibility.
B. ION further agrees that it will, at SBC's request:
1. Notify SBC or SBC's Agent when Materials are ready
for source inspection activities and give SBC or
SBC's Agent reasonable opportunity for inspection of
such Materials.
2. When initiatives, actions, or activities are required
due to quality problems or contract non-performance,
both Parties will agree on a designated third Party
agent to perform quality control or quality assurance
related activities. ION will pay the cost of the
third party agent.
3. Nothing contained herein will diminish ION's
obligation to deliver materially compliant Materials,
ION's warranty obligations, or any other provision of
this Agreement. The purchase or license of any
Materials hereunder is subject to SBC's inspection
and Acceptance after Delivery thereof.
ARTICLE IX - REPAIR, MAINTENANCE, AND SUPPORT CLAUSES
9.1 MAINTENANCE AND SUPPORT SERVICES
During the first year after SBC's Acceptance of Material (i.e., the
warranty period), SBC will have access to ION's remote dial-in
diagnostics Technical Assistance Center ("TAC") on a 24x7 basis, at a
charge to SBC of one hundred dollars ($100) per hour, at a two (2) hour
minimum per call. Under this service, SBC receives 24X7 technical
telephone support and consultation. SBC will also receive 8x5 next day
cross shipment of a replacement unit from SBC's previously purchased
spare unit inventory in the event of equipment failure or for
functional repairs, at a charge to SBC of one hundred fifty dollars
($150) per unit shipped. ION shall be required to provide a cross
shipment of replacement units only to the extent that SBC has purchased
a quantity of spare units sufficient to permit such cross shipment.
In-Warranty Repairs of returned units will be made at ION's Piscataway
NJ location at no charge. Coverage after the end of the warranty period
will be at the repair prices listed in the then-current issue of ION's
price list, less a 40% discount.
A. SBC may contact the TAC concerning any questions that may
arise concerning repair. ION shall specify any special packing
of Hardware that might be necessary to provide adequate
in-transit protection from transportation damage.
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B. SBC must obtain a Return Material Authorization ("RMA") from
the TAC and that RMA number must be displayed on the outside
packaging of all returned Material and also included inside
the packaging with the returned Material. Any material
arriving at ION's repair location without proper RMA
identification will be returned to SBC at SBC's expense.
C. In addition to providing ION with a repair order, SBC shall
furnish the following information with Hardware returned to
ION for repair or replacement: (a) SBC's name and complete
address; (b) name(s) and telephone number(s) of SBC's
employee(s) to contact in case of questions about the Hardware
to be repaired; (c) ship-to address for return of repaired
Hardware if different than (a); (d) invoice address, if
different than (a); (e) a complete list of Hardware returned;
(f) the nature of the defect or failure, if known; (g) whether
or not returned Hardware is In-Warranty; and (h) the RMA
number issued by ION.
D. In the special situation where Material is determined to be
defective immediately upon removal from its original shipping
carton and initial installation or testing within sixty (60)
days of receipt by SBC, referred to as an Out Of Box Failure,
ION will cross ship a new replacement unit within seven (7)
days, at ION's expense. SBC must contact ION Technical
Assistance Center to obtain a Return Material Authorization
Cross Shipment ("RMAX") authorization.
E. Defective Hardware which is covered under the warranty
provisions defined in this Agreement will be returned to ION
for either repair or replacement with new or functionally
equivalent Hardware with risk of in-transit loss and damage
borne by ION and transportation charges paid by ION. Unless
otherwise agreed upon by ION and SBC, ION shall complete
repairs and ship the repaired Hardware within fifteen (15)
days after receipt of said defective Hardware by ION,
whichever is earlier. If Hardware is to be replaced, ION
agrees to ship the said replacement Hardware within fifteen
(15) days of receipt of said defective Hardware by ION. For
Hardware under Warranty, ION shall bear the risk of in-transit
loss and damage and shall prepay and bear the cost of
transportation charges for shipments to SBC of repaired or
replaced Hardware.
F. If In-Warranty Hardware returned to ION is determined to be
beyond repair, ION shall promptly notify SBC and, unless
otherwise agreed to by the Parties, ship replacement Hardware
without charge within fifteen (15) days of such notification.
G. The provisions in this clause also apply to Hardware that is
Out-of-Warranty, except that SBC is responsible for
transportation charges to and from ION's repair facilities, if
applicable, along with the associated risk of in-transit loss.
Charges for repairs and/or replacement for Hardware which is
Out-of-Warranty will be at
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the repair prices listed in the then-current issue of ION's price list,
less a 40% discount.
9.2 REPAIR INVOICES
Repair Invoices originated by ION for repair/replacement services must
be clearly identified as such (for example, by indicating at the top of
the invoice that it is a "Repair Invoice") and must contain a reference
to SBC's order number for the repair/replacement Services, if
applicable. ION's Repair Invoices must contain the following
information:
Item number, quantity, complete description of the Materials (complete
part number and Services provided), unit price and total charge by item
number, with a grand total at the end.
The following also applies to such Repair Invoices:
A. If, on a line item basis, there is no charge on a Repair
Invoice, the repair or replacement service described on the
line item shall be deemed to have been provided with respect
to defective Hardware which was covered by the warranty
provisions defined in this Agreement and shall be considered
an "In-Warranty" repair. If on a line item basis, there is a
charge on the Repair Invoice, the repair or replacement
service described on the line item shall be deemed to have
been provided with respect to defective Hardware which was not
covered in the warranty provisions defined in an applicable
Order and shall be considered an "Out-of Warranty" repair,
unless otherwise identified. Any other charges will be noted
with appropriate descriptions in order for SBC to easily
determine the nature of the charge.
B. If the Hardware becomes defective during the Warranty Period
and SBC is required to return the defective Hardware within a
specific time after receiving the replacement Hardware, and
SBC does not return the defective Hardware within thirty (30)
days, or another mutually agreed timeframe, ION will issue an
invoice for the price of the replacement Hardware. If the
Hardware becomes defective outside of the Warranty Period, and
SBC does not return the defective Hardware within thirty (30)
days, or another mutually agreed timeframe, ION will issue an
invoice for the repair charge plus the price of the
replacement Hardware. Such charges are set forth in the
applicable Order. The invoice will also contain a reference to
SBC's original Order number, if applicable, and contain a
description indicating that the charge is for "Non-Returned
Hardware".
A Repair Invoice will be issued for every "In-Warranty and
Out-of-Warranty Repair. Invoices for In-Warranty repair will
show a unit charge, and grand total of zero (0) dollars. ION
shall have no responsibility to repair or replace any
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Hardware that is not accompanied by a Repair Order that
includes an RMA or RMAX number.
9.3 CONTINUING AVAILABILITY
A. ION agrees to offer to sell to SBC for a period of two (2)
years after the Termination, Cancellation or expiration date
of this Agreement, or the discontinuance of any Materials
provided hereunder, functionally equivalent replacement parts
and technical support services ("Spare Parts").
B. ION shall provide SBC with advance written notice no later
that ninety (90) days prior to the discontinuance of the
manufacture or the provision of any Material(s) or Service(s).
SBC shall then have the right to purchase as much of ION's
remaining inventory of the discontinued Material(s) as SBC so
chooses.
9.4 DISASTER RECOVERY
If any natural disaster or other emergency occurs whereby Materials and
Services provided in connection with this Agreement are damaged and
such condition materially affects SBC's ability to provide Services to
its subscribers, ION agrees, at SBC's request, to assist SBC as
follows:
A. ION will use commercially reasonable efforts to locate backup
or replacement Materials and to provide any necessary Service.
B. If Materials are available from ION's stock, ION will take
commercially reasonable efforts to attempt to ship replacement
Materials in a manner specified by SBC within twenty-four (24)
hours of receipt of SBC's request therefor.
C. When Materials required by SBC are not available from stock
for immediate shipment, ION agrees to pursue the following
alternative courses of action:
1. Assist SBC in locating functionally equivalent
substitute Materials.
2. Assist SBC by providing field technical personnel to
make temporary modifications and arrangements to
mitigate the effects of out-of-service conditions. If
requested by SBC, ION will document such efforts and
associated charges.
Charges for replacement Materials shall be determined
based on the prices set forth on Appendix B. Services
shall be provided on a time and materials basis.
Additional charges, if any, for overtime and use of
premium transportation as authorized by SBC as
necessary to alleviate the
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out-of-service conditions shall be included as a
separate item on the invoice.
ION will make available the individual whose title,
phone number and location are listed below to provide
assistance and information on a twenty-four (24) hour
basis for all of its support service described above:
Xxx X'Xxxxx, Vice President of Operations
ION Networks, Inc.
0000 Xx. Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Pager: 000-000-0000
Cell: 000-000-0000
Home: 000-000-0000
Hot Line: 000-000-0000
D. This Section shall not be construed to require ION to maintain
any inventories whatsoever, maintain any position of readiness
to perform in the future, or breach any of ION's contractual
obligations to third Parties.
ARTICLE X - SOFTWARE CLAUSES
10.1 STANDARD SOFTWARE
Subject to the provisions in this Agreement and in the applicable Work
Order:
A. ION hereby grants to SBC a nonexclusive, royalty-free, fully
paid-up, irrevocable, perpetual Enterprise-wide license to use
the Standard Software described in the applicable Order;
B. Any Software modification made by ION at the request and
expense of SBC shall be governed by the provisions of a
separate Work Order and by the Custom Software provisions of
this Agreement; and
C. ION does not transfer to SBC title to Standard Software.
10.2 STANDARD SOFTWARE LICENSE FEE
The Standard Software license fee shall be specified in Appendix B, and
shall not be less than ION's list price less the current applicable
discount rate extended to SBC.
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10.3 THIRD PARTY SOFTWARE
With and prior to execution of each Order, ION shall provide a written
list all third-party Software that is part of the Software ordered by
SBC or provided by ION.
10.4 PROGRAM MATERIALS
A. At no additional cost, ION shall provide SBC with two (2)
copies of the Program Materials (other than any source code,
unless the applicable Order includes source code) reasonably
necessary to enable SBC to adequately use such Software. ION
shall provide such Program Materials no later than the
originally scheduled Delivery Date.
B. SBC shall have the right to reproduce all Program Materials
and all machine-readable forms of the Software, provided that
such reproduction is made solely for SBC's use hereunder. Any
such reproductions shall include any copyright or similar
proprietary notices contained in the items being reproduced.
10.5 MODIFICATIONS
SBC may not, in any way, alter, modify, add, or make other changes to
Software provided hereunder, except with the express permission of ION.
Any modification of the Software permitted by ION shall be made at
SBC's own risk and expense. SBC may not employ a third party to perform
alterations to Software unless such third party has entered into a
nondisclosure agreement with ION. The conditions and charges, if any,
for ION support of such modifications shall be subject to separate
agreement between SBC and ION. The modified portion of the Software and
any unmodified portion of the Software that is affected by the
modifications shall not be considered "Standard Software", and ION
shall have no responsibility to maintain or support such modified
portion. Only those portions of Standard Software that have not been
affected by the modifications shall be subject to the same terms,
conditions, and limitations as if such Software were not modified.
Title to any such addition or modification shall remain with ION.
10.6 DELIVERY OF SOFTWARE
Software deliveries shall be made in the form mutually agreed to by the
Parties, and may include electronic data exchange, U.S. Mail or a
private carrier. Unless otherwise agreed to, ION shall deliver a disk
containing a copy of the Software (and any subsequent releases or
upgrades of the software).
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ARTICLE XI - WARRANTY CLAUSES
11.1 WARRANTY
A. For the units of Materials and Services purchased hereunder,
ION will provide its standard warranty having a one-year term
from the date when the Materials and Services have been
Delivered. The standard warranty is attached hereto as
Appendix H.
B. ION also warrants to SBC that any Services provided hereunder
will be performed in a first-class, professional manner, in
Material Compliance with the Specifications, and with the
care, skill, and diligence, and in accordance with the
applicable standards, currently recognized in ION's profession
or industry. If ION fails to meet applicable professional
standards, ION will, without additional compensation, promptly
correct or revise any errors or deficiencies in the Services
furnished hereunder.
C. ION represents and warrants that: there are no actions, suits,
or proceedings, pending or threatened, which will have a
material adverse effect on ION's ability to fulfill its
obligations under this Agreement; it will immediately notify
SBC if, during the term of this Agreement, ION becomes aware
of any action, suit, or proceeding, pending or threatened,
which may have a material adverse effect on ION's ability to
fulfill the obligations under this Agreement or any Order; it
has all necessary skills, rights, financial resources, and
authority to enter into this Agreement and related Orders and
to provide or license the Materials or Services, including
that the Materials and Services will not infringe any patent,
copyright, or other intellectual property; no consent,
approval, or withholding of objection is required from any
entity, including any governmental authority with respect to
the entering into or the performance of this Agreement or any
Order; the Materials and Services will be provided free of any
lien or encumbrance of any kind; it will be fully responsible
and liable for all acts, omissions, and work performed by any
of its representatives, including any subcontractor; that all
representatives, including subcontractors, will strictly
comply with the provisions specified in this Agreement; and it
will comply with the terms of this Agreement or Work Order,
including those specified in any Exhibits or Appendices
thereto.
D. If the Parties have identified a system on which Software will
operate, ION warrants that Software will perform on and be
compatible with such system and operate satisfactorily in the
system environment specified in the applicable Work Order.
System includes the Hardware, operating and application
Software, interfaces, and databases that interact with such
Software.
E. ION warrants that all Materials provided to SBC hereunder
shall be tested prior to Delivery to insure they are in
Material Compliance with the Specifications and that Materials
will not contain Harmful Code at any time. Testing will
include
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complete regression and interaction testing and load, unit,
and integration testing when applicable.
F. ION warrants that all Software and Firmware, including
embedded third party Software, which is licensed to SBC
hereunder prior to, during, or after the calendar year 2000,
includes or will include, by the date ION ships or installs
Materials, year 2000 capability. For the purpose of this
license, year 2000 capability means that the Software or
Firmware will:
1. Read, compute, store, process, display and print data
involving dates, including single century and
multi-century formulas, and will not cause
computational, display, storage or other errors
resulting from the liability to accurately or
correctly handle dates, including year 2000 and
February 29, 2000;
2. Include the indication of century in all date-related
user interface functionality, data fields, and
generated code; and
3. Be interoperable with other Software used by SBC that
may deliver records to such Software and Firmware,
receive records from such Software and Firmware or
interact with such Software and Firmware in the
course of processing dates.
G. If at any time during the Warranty period for Materials or
Services SBC believes there is a breach of any warranty, SBC
will notify ION setting forth the nature of such claimed
breach. ION shall promptly investigate such claimed breach and
shall either 1) provide information satisfactory to SBC that
no breach of Warranty in fact occurred or 2) at no additional
charge to SBC, promptly to take such action as may be required
to correct such breach.
11.2 REPAIRS NOT COVERED UNDER WARRANTY
After the expiration of the Warranty period, all repairs will be made
on a time and materials basis. The applicable price for time and
materials repairs will be listed in the then-current issue of ION's
price list, less a 40% discount.
A. Performance of Work
1. Except as otherwise provided in this Agreement, the
schedule for performance of Services, applicable to
each Order under this section shall be agreed upon by
ION and SBC and shall be set forth in each such
Order; however, in no event shall the Service
interval exceed fifteen (15) business days after such
receipt.
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(a) In the event that ION exceeds the maximum
repair interval, SBC shall have the right,
without liability, to (i) Cancel such Order
or (ii) extend such scheduled service date
specified in the Order, subject, however, to
the right to Cancel if Service is not made
or performance is not completed by such
extended date.
(b) If an Order is Canceled pursuant to the
preceding sentence, ION shall return the
Material(s) received from SBC under such
Order. ION shall reimburse SBC the costs of
shipping the Material(s) to ION and the
amounts, if any, previously paid by SBC for
Service not received or performed.
2. ION shall furnish all labor, Services, tools,
Materials, parts, accessories, instruments and
equipment required to perform Services under this
section.
3. ION shall provide a written notice to SBC with the
name(s) and telephone number(s) of the individual(s)
to be contacted concerning any questions that may
arise regarding Services under this section. If
required, ION shall specify any special packing of
Materials that might be necessary to provide adequate
in-transit protection from transportation damage.
4. Materials repaired by ION shall have the service
completion date stenciled or otherwise identified in
a permanent manner at a readily visible location on
the Materials. In addition, ION agrees to add any
other identification that might be requested by SBC.
Charges, if any, for such additional identification
marking shall be agreed upon by ION and SBC.
5. Only new standard parts or parts of quality equal to
the original parts shall be used in refurbished
Materials or in effecting repairs. Parts that have
been replaced shall become ION's property. If a part
has been replaced, by definition it has been removed;
provided, however, that replaced parts shall, upon
request by SBC be available for inspection by SBC.
Parts that are installed in Materials as a part of
the repair process shall become the property of SBC.
6. If Materials returned to ION for repair are
determined to be beyond repair, ION shall contact SBC
regarding disposition of such Materials. If requested
by SBC, ION shall take the necessary steps to dispose
of the unrepairable Materials and pay to SBC the
salvage value, if any. If requested by SBC, ION shall
return the Materials in "as-received" condition,
invoicing SBC only for freight charges associated
with the return of the Materials.
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B. Transportation
Unless SBC, provides written special shipping instructions,
upon completion of Services provided pursuant to this clause,
ION shall ship Materials using the lowest published common
carrier price (rail, truck or freight forwarder). ION agrees
to follow shipping instructions according to the "Shipping and
Packing" clause herein. ION agrees to place all prepaid
freight charges as a separate item on the invoice to be paid
by SBC. If requested by SBC, ION agrees to substantiate such
charges by providing SBC with the original freight xxxx or a
copy.
C. Risk of Loss
Except as otherwise provided in this Agreement, after receipt
of returned Material from the carrier selected by SBC to ship
the malfunctioning Material, ION shall assume the risk of loss
of or damage to such Material until the Material is delivered
to the carrier for shipment to SBC. SBC shall notify ION
promptly of any claim and shall cooperate with ION in every
reasonable way to facilitate the settlement of any such claim.
D. Invoices
1. All invoices originated by ION for Services provided
pursuant to this clause must be clearly identified as
such, and must contain: (1) a reference to the Master
Agreement number of this Agreement (i.e. No.
00017432), (2) a reference to SBC's Order number for
these Services, (3) a reference to ION's RMA or RMAX
number, (4) a detailed description of Services
performed by ION, and the need therefor, and (5) an
itemized listing of parts and labor charges, if any.
2. Shipping and routing instructions may be altered as
agreed by ION and SBC without written notice.
E. Warranty
1. ION warrants to SBC that the repair Services shall be
performed in a fully workmanlike manner to the
satisfaction of SBC and in accordance with the
Specifications. ION further warrants that the
repaired or refurbished Materials shall be free from
defects in material and workmanship for a period of
ninety (90) days from the date the repaired or
refurbished Materials is Accepted by SBC. This
warranty shall survive inspection, acceptance and
payment.
2. In the event that Materials repaired or refurbished
by ION is defective when returned to SBC, SBC shall
have the option of (1) returning the
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Materials to ION for Service, with risk of in-transit
loss or damage and freight charges to be borne by
ION, or (2) obtaining a full refund or credit for any
payment made therefor, plus freight charges paid for
its return.
ARTICLE XII - OTHER CLAUSES
12.1 LICENSES AND PATENTS
Except as otherwise stated herein, no licenses, express or implied,
under any patents, copyrights, trademarks, or other intellectual
property rights are granted by either Party to the other under this
Agreement.
12.2 INDEPENDENT CONTRACTOR
ION hereby represents and warrants to SBC that:
A. ION is engaged in an independent business and will perform all
obligations under this Agreement as an independent contractor
and not as the agent or employee of SBC;
B. ION's personnel performing Services shall be considered solely
the employees of ION and not employees or agents of SBC;
C. ION has and retains the right to exercise full control of and
supervision over the performance of the Services and full
control over the employment, direction, assignment,
compensation, and discharge of all personnel performing the
Services;
D. ION is solely responsible for all matters relating to
compensation and benefits of all ION's personnel who perform
Services. This responsibility includes, but is not limited to,
(a) timely payment of compensation and benefits, including,
but not limited to, overtime, medical, dental, and any other
benefit, and (b) all matters relating to compliance with all
employer obligations to withhold employee taxes, pay employee
and employer taxes, and file payroll tax returns and
information returns under local, state, and federal income tax
laws, unemployment compensation insurance and state disability
insurance tax laws, and social security and Medicare tax laws,
and all other payroll tax laws or similar laws (all
collectively hereinafter referred to as "payroll tax
obligations") with respect to all ION personnel providing
Services.
12.3 INSIGNIA
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Upon SBC's written request, certain of SBC's trademarks, trade names,
insignia, symbols, decorative designs, or other similar items
(hereinafter "Insignia"), shall be properly affixed by ION to the
Materials furnished at no additional cost to SBC. Such Insignia shall
not be affixed, used, or otherwise displayed on the Materials without
SBC's written approval. The manner in which such Insignia will be
affixed must be approved in writing by SBC.
12.4 NOTICES
Except as otherwise provided in this Agreement, or an applicable Order,
all notices or other communications hereunder shall be deemed duly
given when they are made in writing (1) on the day of delivery, when
delivered in person during business hours, (2) on the following
business day, if delivered by an overnight courier or similar delivery
service, or (3) three business days after mailing, if deposited in the
United States Mail, postage prepaid, return receipt requested. All
notices and communications shall be addressed as follows:
If to ION: ION Networks, Inc.
0000 Xxxxx Xxxxxxxxxx Xxx.
Xxxxxxxxxx, XX 00000
Attn.: Xxxx Xxxxxxx
If to SBC: SBC Services, Inc.
0000 Xxxxxx Xxxxx, Xx. 0X000X
San Ramon, Calif. 94583
Attn.: Xxxx Xxxxxxx Xxxxxx, Senior Contract Manager
The address to which notices or communications shall be delivered to
either Party may be changed by written notice given by such Party to
the other pursuant to this Section, entitled "Notices".
12.5 PUBLICITY
ION shall not use SBC's name or any language, pictures, or symbols
which could, in SBC's judgment, imply SBC's identity or endorsement by
SBC or any of its employees in any (a) written, electronic, or oral
advertising or presentation or (b) brochure, newsletter, book,
electronic database, news release or other written material of whatever
nature, without SBC's prior written consent (hereafter the terms in
this section (a) and (b) shall be collectively referred to as
"publicity matters"). ION will submit to SBC for written approval,
prior to publication, all publicity matters that mention or display
SBC's name and/or marks or contain language from which a connection to
said name and/or marks may be inferred or implied.
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12.6 ENTIRE AGREEMENT
The terms contained in this Agreement, and any Orders, including all
exhibits and subordinate documents attached to or referenced in the
Agreement or any Orders, will constitute the entire integrated
Agreement between ION and SBC with regard to the subject matter. The
Agreement will supersede all prior oral and written communications,
agreements, and understandings of the Parties, if any, with respect
hereto.
Signature Page Follows
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IN WITNESS WHEREOF, the foregoing Agreement has been executed by authorized
representatives of the Parties hereto, in duplicate, as of the dates set forth
below.
ION NETWORKS, INC. SBC SERVICES, INC.
By: /s/ By:/s/
--------------------------------- -----------------------------------
Name: Name:
------------------------------- ---------------------------------
Title: Title:
------------------------------ --------------------------------
Date: Date:
------------------------------- ---------------------------------
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