EXHIBIT 10.13
SOFTWARE DEVELOPMENT AND TECHNICAL SERVICES AGREEMENT
THIS SOFTWARE DEVELOPMENT AND TECHNICAL SERVICES AGREEMENT ("Agreement") is
made between GTE Service Corporation, a New York corporation, with offices for
this Agreement at 0000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000, and its Affiliates
("GTE") on the one hand, each only with respect to their respective obligations
hereunder, and Genuity Solutions Inc., a Delaware corporation, with offices for
this Agreement at 0 Xxx xx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
("GENUITY") on the other hand.
WHEREAS, GENUITY pursuant to this Agreement will be allowed to procure
software development and other technical services from GTE, with the services
defined in individual Statements of Work, and the ownership and rights in
intellectual property deliverables to GENUITY pursuant to the Statements of Work
being apportioned between the parties.
Now, therefore, in mutual consideration of the promises and obligations set
forth below, the parties agree as follows:
1. General.
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GTE and GENUITY desire to establish a contractual relationship pursuant to
which GENUITY and its subsidiary companies will obtain from GTE or an Affiliate
of GTE, and GTE or the Affiliate will provide to GENUITY and its subsidiary
companies, software development and other technical services in accordance with
the terms and conditions set forth in this Agreement.
2. Definitions.
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For purposes of this Agreement, and in addition to certain terms defined on
first use herein and in any schedule attached hereto, the following terms shall
have the following meanings.
2.1. "Affiliate" shall mean an entity that controls, is under common control
with, or that is controlled by, the entity with which it is affiliated.
2.2. "Change Order" shall mean a change order signed by both parties as
provided in Section 3.7.
2.3. "Deliverable" shall mean Software, Documentation or other materials and
information delivered or otherwise provided by GTE to GENUITY under the terms of
this Agreement and the applicable Statement of Work.
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2.4. "Documentation" shall mean written documentation provided by GTE to
GENUITY in connection with a Technical Effort, as provided in the Statement of
Work for that Technical Effort.
2.5. "Effective Date" shall mean the date of the closing of the initial
public offering of shares of stock of Genuity Inc.
2.6. "Exclusive Statement of Work" shall mean a Statement of Work under which
GTE agrees to provide Deliverables exclusively to GENUITY.
2.7. "Intellectual Property Rights" shall mean any and all worldwide rights
existing now or in the future under patent law, copyright law, industrial rights
design law, semiconductor chip and mask work protection law, moral rights law,
trade secret law, trademark law, unfair competition law, publicity rights law,
privacy rights law, and any and all similar proprietary rights, however
denominated, and any and all renewals, extensions and restorations thereof, now
or hereafter in force and effect.
2.8. Internal Business Purposes" shall mean the internal operation of a
licensee's business in the provision of goods and services by the licensee to
its customers and end users in the ordinary course of its business.
2.9. "Legacy System" shall mean existing computer software, hardware or
firmware owned or used by GENUITY which was developed, licensed or obtained
outside the scope of any Technical Effort.
2.10. A "Non-exclusive Statement of Work" shall mean a Statement of Work that
is not an Exclusive Statement of Work.
2.11. "Object Code" shall mean the machine-executable version of a computer
software program.
2.12. "Schedule" shall mean the timetable and milestones for completion of a
Technical Effort as set forth in its Statement of Work, as modified by any
Change Orders or otherwise as provided in this Agreement.
2.13. "Services" shall mean those services provided by GTE to GENUITY under
the terms of this Agreement and the applicable Statement of Work.
2.14. "Software" shall mean the computer software provided by GTE to GENUITY
in connection with a Technical Effort as provided in a Statement of Work for the
Technical Effort, provided that the foregoing shall exclude Third Party
Software.
2.15. "Source Code" shall mean the fully commented human-readable version of
a computer software program, including, without limitation, all documentation
necessary or useful to understand such software program.
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2.16. "Specifications" shall mean the functional and other specifications for
Software included in any Deliverables set forth in a Statement of Work.
2.17. "Statement of Work" shall mean a written description of a Technical
Effort signed by both parties and attached to this Agreement, pursuant to
Section 3.1. The Statement of Work for each Technical Effort shall include all
Change Orders that have been agreed upon for that Technical Effort.
2.18. "Technical Effort" shall mean the technical services provided by GTE
pursuant to the terms and conditions of this Agreement and the applicable
Statement of Work.
2.19. "Third Party Software" shall mean any version of any software product,
in Object Code only, that is developed or owned by a third party and is
distributed or otherwise made available to one party to the other pursuant to
this Agreement or required for use of Software provided as a Deliverable under
this Agreement.
3. Technical Effort.
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3.1. Technical Effort for Software Development. The parties may from time
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to time agree upon a Technical Effort which calls for the development or
modification of computer programs. For each such development or modification of
computer programs, the Technical Effort shall be described in a Statement of
Work. Each Statement of Work shall contain a detailed description of the
Software to be developed or modified, including the Deliverables for the
Technical Effort, the Specifications, if any, for any Software or other
Deliverables to be developed, the Schedule, acceptance criteria, the amounts and
timing of payments to be made, any Services to be provided, and such other
information as may be required by this Agreement. Each Statement of Work will
expressly indicate if it is an Exclusive Statement of Work, and if it does not
so indicate it shall be deemed to be a Non-Exclusive Statement of Work. Each
Statement of Work shall be deemed a part of and shall be subject in all respects
to the terms and conditions of this Agreement, unless otherwise set forth in a
Statement of Work with specific reference to the terms or conditions of this
Agreement that are to be altered by such Statement of Work.
3.2. Technical Effort for Other Technical Services. The parties may from
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time to time agree upon a Technical Effort for technical services which are
other than the development or modification of computer programs. Each such
Technical Effort shall be described in a Statement of Work. Each Statement of
Work shall contain a detailed description of the Technical Effort, including,
without limitation, the Deliverables for the Technical Effort, the requirements
for Deliverables to be provided, if any, the Schedule, acceptance criteria (if
any), the amounts and timing of payments to be made, any Services to be
provided, and such other information as may be required by this Agreement. Each
Statement of Work will expressly indicate if it is an Exclusive Statement of
Work, and if it does not so indicate it shall be deemed to be a Non-Exclusive
Statement of Work. Each Statement of Work shall be deemed a part of and
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shall be subject in all respects to the terms and conditions of this Agreement,
unless otherwise set forth in a Statement of Work with specific reference to the
terms or conditions of this Agreement that are to be altered by such Statement
of Work
3.3. General Conduct of Technical Efforts. The parties acknowledge and agree
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that the successful completion of each Technical Effort shall require the
cooperation of both parties. GTE shall endeavor to complete each Technical
Effort in accordance with the Schedule. GTE may, at its election, perform its
obligations under this Agreement either directly or through one or more
Affiliates, unless otherwise provided in a Statement of Work. GENUITY agrees to
provide such information and access to facilities, personnel and GENUITY Legacy
Systems, if applicable, as may be reasonably required or requested by GTE to
complete the Technical Effort. If GENUITY's acts or failures to act cause any
hindrance or delay in GTE's performance of the Technical Effort, the time for
GTE's performance under the Schedule shall be extended accordingly and GENUITY
shall pay GTE, at GTE's then current rates, for any additional time spent, and
reimburse GTE for any additional expenses incurred, as a result of such
hindrance or delay.
3.4. Technical Effort Coordinators and Technical Effort Teams.
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(a) For each Technical Effort, each party shall specify one Technical
Effort Coordinator who shall be designated to act that party's contact person
relating to the over-all conduct of the Technical Effort.
(b) Each party shall assign to the Technical Effort such personnel (its
"Technical Effort Team") and other resources as may be reasonably necessary to
complete the Technical Effort.
(c) Either party shall be free to change the identity of the Technical
Effort Coordinator and Technical Effort Team members upon reasonable notice to
the other party.
(d) The GENUITY Technical Effort Coordinator and such other personnel as
are necessary shall be available during the term of the Technical Effort to
provide to GTE promptly on request all information regarding the Technical
Effort and the Specifications, if applicable, that is reasonably necessary for
GTE's completion of the Technical Effort.
3.5. Progress Meetings. In the course of each Technical Effort, GTE and
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GENUITY shall meet on a regular basis to review progress to date. The meetings
shall take place on or about the dates indicated in the Schedule, and in no
event less frequently than once each quarter-year. The meetings shall be
attended by each party's Technical Effort Coordinators and such other members of
their Technical Effort Teams as may be required adequately to assess the
progress of the Technical Effort, any technical or other difficulties that may
have been encountered, and to establish schedules and plans for its successful
completion
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3.6. Access to Legacy Systems. Promptly following execution of each Statement
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of Work related to Legacy Systems, GENUITY shall, without charge, provide to GTE
copies of the Object Code and (to the extent required to perform the relevant
Statement of Work) Source Code for all GENUITY Legacy Systems with which the
Software to be developed under the Statement of Work must interact, communicate
with or that is in any other way required for the completion of the Technical
Effort, together with all user manuals and other documentation relating to the
Legacy Systems, unless such Legacy Systems are owned by GTE and are only
licensed to GENUITY pursuant to a separate software license agreement. GENUITY
shall also provide to GTE, free of charge, access to all computer hardware and
networks on which or within which the Legacy Systems operate to the extent
reasonably required to complete each Technical Effort. During the term of this
Agreement, GENUITY shall provide to GTE all updates, new releases and new
versions of the GENUITY Legacy Systems in the same form in which such was
originally provided, unless such updates, new releases and new versions are
provided by GTE. During the term of each Technical Effort, GENUITY shall provide
GTE (or cause to be provided to GTE), without charge, with all maintenance and
support services with respect to the Legacy Systems which subscribers to
maintenance and support services for such products receive generally, unless
such maintenance and support services are provided by GTE. With respect to any
Source Code owned by GENUITY and provided to GTE under this Agreement, GTE shall
use the Source Code for the Legacy Systems solely for the purpose of performing
GTE's obligations under the Statement of Work or Statements of Work for which
such Source Code is necessary, and shall not disclose, without GENUITY's prior
consent, such Source Code to anyone other than GTE and its Affiliates who are
performing services with respect to such Statement of Work.
3.7. Inspection of Facilities. GTE shall advise GENUITY in writing of the
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location of all facilities at which it is utilizing Source Code for the GENUITY
Legacy Systems. GENUITY may, from time to time, as it deems necessary, at its
sole risk and expense, enter such facilities, or any of them, and conduct such
inspection as is reasonably necessary to verify the nature of GTE's use of such
Source Code and GTE's compliance with its obligations with respect to the
confidentiality of such Source Code. GTE shall provide reasonable assistance to
GENUITY for such inspection, GENUITY shall minimize the amount of time that it
is required to spend in GTE's facilities, and GENUITY shall coordinate all such
activities with GTE so as not to unreasonably interfere with GTE's operations.
3.8. Specifications and Change Orders.
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(a) The Specifications for the Software to be developed during each
Technical Effort shall be as set forth in the Statement of Work for that
Technical Effort. No change in the Specifications shall be binding upon either
party unless it has been incorporated into a written Change Order signed by the
Technical Effort Coordinator for both parties.
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(b) If GENUITY wishes to change the Specifications for any Software, it
shall give GTE written notice of such request. GTE shall respond to such request
within thirty (30) days, including in its response any change in the Schedule,
amounts to be paid, Technical Effort Teams or other matters that may be required
by the proposed change. The parties shall thereupon negotiate in good faith for
a Change Order incorporating the changes in the Statement of Work required by
the requested changes. Either party may, however, decline in its discretion to
enter into any proposed Change Order.
(c) In no event shall GENUITY or GTE be bound by any proposed change
unless and until it has signed a Change Order for such change, and the Statement
of Work for the Technical Effort shall remain in full force and effect, without
modification, until such Change Order has been agreed upon and signed.
4. Delivery and Acceptance Procedure.
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4.1. Delivery Period. GTE shall provide each Deliverable to GENUITY in
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accordance with the Schedule for the relevant Technical Effort. All
Deliverables, if any, shall be provided in the form of Object Code, unless
otherwise specified in the Statement of Work, except GTE shall also provide
Source Code and Documentation for Deliverables to be owned by GENUITY under an
Exclusive Statement of Work. GTE shall also deliver Documentation for the
Software as may be required by the Statement of Work.
4.2. Acceptance. The procedure for delivery and acceptance of Deliverables
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by GENUITY, to the extent acceptance is contemplated by the applicable Statement
of Work and a procedure for such delivery and acceptance is not otherwise
provided therein, shall be in accordance with the following.
(a) The Statement of Work shall specify the procedure and criteria, if
any, that GTE must meet in order for the Deliverables described in a Statement
of Work to be accepted by GENUITY. The Statement of Work shall also specify a
test plan, such other information as GTE and GENUITY mutually deem appropriate
and the period of time that GENUITY shall have to provide notice of acceptance
or rejection to GTE. However, failure to accept or reject such Deliverable
within the specified period of time or the commercial use of such item by or for
the benefit of GENUITY shall be deemed to be acceptance.
(b) If GENUITY rejects a Deliverable, it shall specify in reasonable
detail in writing the reasons for rejection and the requirements for revision.
If the notice of rejection is not sufficiently detailed to allow GTE to
determine why such Deliverable is unacceptable, GTE may request in writing that
GENUITY provide sufficient additional information, indicating the type of
additional information required by GTE. If GTE and GENUITY have joint
responsibility for the Deliverable and the Deliverable requires revision, GTE
shall assist GENUITY in making revisions necessary for the Deliverable to meet
the acceptance criteria within a period of time that is reasonable under the
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circumstances. If GTE has sole responsibility for the Deliverable, then it shall
make the necessary revisions within a period of time that is reasonable under
the circumstances.
5. Payment.
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5.1. Payment. GENUITY shall pay the amounts that are charged to GENUITY,
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and GTE shall invoice GENUITY, in accordance with the Statement of Work. Each
invoice shall reference this Agreement and the applicable Statement of Work. The
invoices shall be itemized to show the details as to all billed items. Payments
shall be made within thirty (30) days from the date of each invoice.
5.2. Taxes. In addition to any payments required by a Statement of Work,
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GENUITY shall pay GTE an amount equal to any sales, use, privilege, gross
revenue, excise, or any other tax (except income and franchise taxes), as well
as any assessments or duties with respect to the Deliverables, Services and
other services, materials and rights provided by GTE hereunder lawfully levied
by a duly constituted governmental authority and for which GTE is required or
permitted, by law, to collect from GENUITY. In addition each party shall be
responsible for all real and personal property taxes imposed on software and
equipment owned by the respective parties on January 1 of every year; provided,
however, GENUITY shall be responsible for such real and personal property taxes
imposed upon any Deliverables provided to GENUITY. If GENUITY determines that
any Deliverables, Services and other services, materials and rights provided by
GTE hereunder are exempt from a tax, GENUITY must provide GTE a properly
completed exemption certificate, for each jurisdiction for which GENUITY is
claiming an exemption, before GTE will exclude the respective tax from amounts
charged to GENUITY. GENUITY shall not deduct any tax amount from remittances to
GTE until a properly completed exemption certificate, for all jurisdictions for
which GENUITY is claiming an exemption, has been provided to GTE.
5.3. Expenses. GENUITY shall reimburse GTE for reasonable expenses for
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travel, meals and lodging incurred by them in the performance of its obligations
under this Agreement. Any such charges shall be in compliance with such GTE's
employee expense policies. There shall be no xxxx-up of such expense charges.
GTE shall maintain documentation of expenses incurred, and shall provide copies
of invoices of $100 or more upon GENUITY's request. GTE shall xxxx GENUITY
monthly for expenses as they accrue. The parties shall specify any limitation on
the reimbursement of expenses in the applicable Statement of Work. It is
acknowledged and agreed that if GTE is required to incur expenses beyond such
limitation in order to perform its obligations under the applicable Statement of
Work or under this Agreement, then GTE is excused from performing such
obligations until said expense limitation is removed or changed as mutually
agreed; provided, however, that GTE promptly notifies GENUITY of the need to
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exceed the limitation.
5.4. Records. GTE shall maintain complete and accurate records in a form
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consistent with generally accepted accounting practices, to substantiate any
charges.
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GTE shall retain, and make available upon request, such records for a period of
three (3) years from the date of invoice for them. GENUITY and its authorized
agents, subject to obligations of confidentiality as set forth in this
Agreement, shall have access to such records upon prior written request during
normal business hours during the term of this Agreement and during the
respective periods in which GTE is required to maintain such records pursuant to
this Section 5.4. Access to the records shall be made at the location where such
records are normally maintained.
6. Intellectual Property.
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6.1. Ownership.
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(a) Subject to GENUITY'S payment in full and compliance with all
other terms and conditions of this Agreement, and except as may be otherwise set
forth in a Statement of Work, GTE agrees to (i) transfer to GENUITY all right,
title and interest in and all materials included in Deliverables that are first
created during the course of the performance of an Exclusive Statement of Work
(including, but not limited to, Software and Documentation), and any and all
Intellectual Property Rights therein; and (ii) grant to GENUITY a fully paid up,
royalty free license to use the portion of the Deliverables not covered by
subsection (i) immediately above, to the extent such portion is owned by GTE.
Without limiting the generality of the foregoing, GENUITY shall have the right,
without obligation to account to GTE, to market and distribute such
Deliverables.
(b) GTE shall have sole and exclusive ownership of all right, title
and interest in and to all Deliverables (including, but not limited to, Software
and Documentation) (i) not included in Section 6.1(a)(i) above or (ii) described
in all Non-Exclusive Statements of Work, any and all Intellectual Property
Rights in the foregoing, and all other services, materials, information and
Intellectual Property Rights first created in the course of, pursuant to or as a
result of the performance of any Statement of Work. Without limiting the
generality of the foregoing, GTE shall have the sole and exclusive right,
without obligation to account to GENUITY, to such Deliverables and other
services, materials and Intellectual Property Rights, including, but not limited
to, the sole and exclusive right to market and distribute the Deliverables,
Intellectual Property Rights and other services, materials and information,
subject only to the licenses granted herein to GENUITY pursuant to Section 6.2.
6.2. Grant of Licenses by GTE for GTE-Owned Deliverables. Subject to
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GENUITY's payment in full of all amounts owing pursuant to a Non-Exclusive
Statement of Work, GTE hereby grants to GENUITY a nonexclusive, fully paid up,
royalty free, non-sublicensable, nontransferrable license to use the GTE-owned
Deliverables described in all Non-Exclusive Statements of Work solely for
GENUITY's Internal Business Purposes. Except and to the extent expressly set
forth in the applicable Statement of Work to this Agreement, no maintenance and
support services will be provided pursuant to the Software License Agreement for
Software delivered and licensed pursuant to this Agreement. To the extent any
Third Party Software is provided by GTE to GENUITY
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pursuant to this Agreement, the use and possession of such Third Party Software
shall be pursuant to the terms and conditions of this Agreement, unless a Third
Party Software license agreement is included with such Third Party Software, in
which instance such Third Party Software license agreement shall govern the use
and possession of such Third Party Software. The said license shall include the
right to prepare derivative works and shall also include the right, to the
extent that GTE cannot perform such services on a commercially reasonable basis,
and subject to GTE's prior written approval, which shall not be unreasonably
withheld, to engage third parties for the purpose of enhancing or supporting the
Deliverables. The license granted pursuant to this Section 6.2 shall extend to
GENUITY's Affiliates, provided that such Affiliates agree to be bound by the
terms and conditions of this Agreement, but shall not otherwise include any
right to sublicense. The license provided by this Section 6.2 is in addition to,
and shall not be construed as limiting or expanding in any way, any other
licenses that GTE has granted or will grant to GENUITY under GTE Intellectual
Property Rights.
6.3. Grant of Licenses by GENUITY.
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(a) Grant of Licenses by GENUITY for Deliverables under Exclusive
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Statements of Work. Except as otherwise set forth in any Statement of Work,
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GENUITY hereby grants to GTE a fully paid up, perpetual, royalty-free, worldwide
license, with no right to grant sublicenses, to use the Deliverables described
in all Exclusive Statements of Work, to the extent GENUITY owns such
Deliverables, for the Internal Business Purposes of GTE. The license granted
pursuant to this Section 6.3(a) shall extend to GTE's Affiliates, provided that
such Affiliates agree to be bound by the terms and conditions of this Agreement,
but shall not otherwise include any right to sublicense. The said license shall
include the right to prepare derivative works and shall also include the right
to engage third parties for the purpose of enhancing or supporting the
Deliverables.
(b) GENUITY hereby grants to GTE a fully paid up, royalty-free license
under any Intellectual Property Right of GENUITY solely to the extent that such
license is necessary to perform one or more Statements of Work under this
Agreement. This license shall terminate upon acceptance of each Deliverable as
to which this license is granted.
6.4. No Implied Licenses. Except and to the extent set forth in Sections 6.2
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and 6.3, nothing contained herein shall be construed as granting any right or
license is to any party, by implication, estoppel or otherwise, under any
Intellectual Property Rights of any other party.
6.5. Notice of Infringement Claims. Each party shall use its best efforts to
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give the other party prompt written notice following receipt of any claim that
any Deliverable infringes the Intellectual Property right of any third party.
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6.6. Marking. Each party shall include the other's patent, copyright and
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proprietary rights notices on any copies such party makes of the Software,
Documentation or related materials which belong to the other party.
7. Confidentiality.
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7.1. Confidentiality. In the course of requesting and performing any
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Statement of Work and other obligations hereunder, each party may receive or
acquire from the other information or data pertaining to specifications,
drawings, sketches, models, samples, computer programs, methods, concepts, know-
how, techniques, processes, and other technical or business information that the
other party desires to protect against unauthorized use or further disclosure.
Unless otherwise expressly set forth in a Statement of Work, for purposes of
this Agreement, "Confidential Information" shall mean: (i) any information in
written, other tangible or electronic form which is labeled by the disclosing
party as "confidential", "proprietary" or with a legend of similar import; (ii)
software in any form (including related documentation), whether or not labeled
in accordance with the preceding; (iii)Deliverables provided pursuant to this
Agreement, with the ownership of, proprietary interest therein and Intellectual
Property Rights therein being retained by the party owning such Deliverables
under the terms and conditions of this Agreement.. Each party shall remain the
exclusive owner of its Confidential Information.
7.2. Use of Confidential Information. The Confidential Information of the
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disclosing party may be used by the receiving party only for the performance or
use of Deliverables and Services under this Agreement and may only be disclosed
to those employees, subcontractors or agents of the receiving party who have a
need to know in order to perform or use the Deliverables and Services under this
Agreement; provided, however, that neither party shall disclose any Confidential
Information of the other party to a person who is not an Affiliate of the
disclosing party without the prior approval of the other party, which approval
shall not be unreasonably withheld. Except and to the extent set forth in
Section 7.3, the receiving party may not disclose Confidential Information of
the other party to any other person, entity, or the public without the prior
written consent of the disclosing party; provided, however, that such
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Confidential Information may be disclosed by the receiving party without the
necessity of prior written consent, to the receiving party's subcontractors,
employees or consultants who require access to such Confidential Information to
perform or use the Deliverables and Services under this Agreement, provided such
persons have entered into written agreements which contain obligations of
nondisclosure and nonuse no less restrictive than set forth in this Section 7.2.
It is agreed that such written agreements shall be enforceable by the disclosing
party.
7.3. Exceptions. The obligations in Section 7.2 shall not apply to that
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portion of any information received from the disclosing party which is:
lawfully in the receiving party's possession, with no restriction on use or
disclosure, prior to its acquisition from the
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disclosing party; received in good faith by the receiving party, with no
restrictions on use or disclosure, from a third party not subject to any
confidential obligation to the disclosing party; now or later becomes publicly
known through no breach of confidential obligation by the receiving party;
released by the disclosing party to any other person, firm or entity (including
governmental agencies or bureaus) without restriction on use or disclosure; or
independently developed by or for the receiving party without any reliance on or
use of Confidential Information of the disclosing party. The foregoing
exceptions shall not apply to Software in any form.
7.4. Disclosure and Notification. If a receiving party receives a request
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to disclose any Confidential Information of the disclosing party (whether
pursuant to a valid and effective subpoena, an order issued by a court or other
governmental authority of competent jurisdiction or otherwise) on advice of
legal counsel that disclosure is required under applicable law, the receiving
party agrees that, prior to disclosing any Confidential Information of the
disclosing party, it shall (i) notify the disclosing party of the existence and
terms of such request or advice, (ii) cooperate with the disclosing party in
taking legally available steps to resist or narrow any such request or to
otherwise eliminate the need for such disclosure at the disclosing party's sole
expense, if requested to do so by the disclosing party, and (iii) if disclosure
is required, it shall be the obligation of the disclosing party to use its best
efforts to obtain a protective order or other reliable assurance that
confidential treatment shall be afforded to such portion of the Confidential
Information of the disclosing party as is required to be disclosed.
7.5. Continuing Obligation. The obligation of non-disclosure and non-use
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with respect to Confidential Information of the disclosing party shall survive
termination of this Agreement and shall continue for a period of five (5) years
thereafter; provided, however, that the obligations of non-disclosure and non-
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use shall continue in perpetuity for Software in any form.
8. Warranties and Warranty Disclaimer.
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8.1. Express Representations and Warranties. GTE represents, warrants, and
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covenants to GENUITY that:
(a) In performing the Services set forth in any Statement of Work, GTE
shall comply with all applicable laws, codes, ordinances, orders, rules and
regulations of local, state, and federal governments and agencies and
instrumentalities, including, but not limited to, applicable wage and hour,
safety and environmental laws, and all standards and regulations of appropriate
regulatory commissions and similar agencies.
(b) All Services furnished by GTE in accordance with a Statement of
Work shall be performed by qualified personnel at a level of professional
performance standard within the industry in which the Services are provided.
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8.2. Disclaimer. THE WARRANTIES IN THIS SECTION 8 AND ANY WARRANTY IN A
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STATEMENT OF WORK, BUT ONLY IF SPECIFICALLY IDENTIFIED AS AN EXPRESS WARRANTY IN
SUCH STATEMENT OF WORK, ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
OR WHETHER ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE
TRADE OR PROFESSION OR OTHERWISE, INCLUDING BUT NOT LIMITED TO, IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR WARRANTIES
AGAINST INFRINGEMENT. GTE MAKES NO WARRANTIES REGARDING THE DELIVERABLES,
INCLUDING, WITHOUT LIMITATION, SOFTWARE, OR SERVICES TO BE PROVIDED HEREUNDER,
EXPRESS, IMPLIED OR ARISING BY CUSTOM OR TRADE USAGE, AND SPECIFICALLY DISCLAIMS
THE IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE. Except for the warranties expressly set forth in this
Section 8 and any Statement of Work, GENUITY acknowledges and agrees that it has
relied on no other representations or warranties and that no other
representations or warranties have formed the basis of its bargain hereunder
8.3. Survival. All representations, warranties and covenants of GTE
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contained in this Section 8 shall continue for the term of this Agreement and
shall survive its termination.
9. Indemnification.
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9.1. Indemnity for Infringement of Third Party Intellectual Property.
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(a) Indemnity regarding Deliverables provided under Exclusive
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Statements of Work. If a Deliverable under an Exclusive Statement of Work become
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the subject of an infringement claim, or in GTE's opinion is likely to become
the subject of such a claim, then, in addition to defending the claim and paying
any damages and attorneys' fees finally awarded by a court of final
jurisdiction, GTE may, at its option and in its sole discretion, and at its own
cost and expense: (i) replace or modify such Deliverable to make it
noninfringing or cure any claimed misuse of any third party trade secret; (ii)
procure for GENUITY the right to continue using such Deliverable pursuant to
this Agreement; or (iii) require GENUITY to cease using and return such
Deliverable upon a Xxxxxxx determination that the patent claims on which an
action has been brought are afforded a construction which outside counsel for
GTE reasonably believes reads on the Deliverable or a decision of infringement,
whichever is earlier, in which case GTE shall refund to GENUITY a pro-rata
portion of the amount actually paid to GTE by GENUITY for such Deliverable.
Notwithstanding the foregoing, if GTE exercises its right to require the return
of such Deliverable, to the extent permitted by applicable law, GENUITY may
retain and continue to use such Deliverable to the extent GENUITY agrees in
writing to defend and indemnify GTE for any and all expenses, costs and
liabilities associated with such continued possession and use of such
Deliverable.
12
(b) Indemnity regarding Deliverable provided under Non-Exclusive
------------------------------------------------------------
Statements of Work. If a Deliverable under a Non-Exclusive Statement of Work
------------------
become the subject of an infringement claim, or in GTE's opinion is likely to
become the subject of such a claim, then, in addition to defending the claim and
paying any damages and attorneys' fees finally awarded by a court of final
jurisdiction, GTE may, at its option and in its sole discretion, and at its own
cost and expense: (i) replace or modify such Deliverable to make it
noninfringing or cure any claimed misuse of any third party trade secret; (ii)
procure for GENUITY the right to continue using such Deliverable pursuant to
this Agreement; or (iii) require the return of such Deliverable and terminate
GENUITY's right to use the same and refund to GENUITY a pro-rata portion of the
amount actually paid to GTE by GENUITY for such Deliverable. Notwithstanding the
foregoing, if GTE exercises its right to require the return of such Deliverable
and terminates GENUITY's right to use the same, to the extent permitted by
applicable law, GENUITY may retain and continue to use such Deliverable to the
extent GENUITY agrees in writing to defend and indemnify GTE for any and all
expenses, costs and liabilities associated with such continued possession and
use of such Deliverable.
(c) Limitations. GTE shall not be liable to GENUITY for any claims of
-----------
inducement to infringe or contributory infringement or claims of infringement
resulting from the combination of the Deliverable with the products or services
of third parties. Further, GTE shall have no liability to GENUITY hereunder if
(i) the claim of infringement is based upon the use or other exploitation of
Deliverable provided by GTE hereunder in connection or in combination with
equipment, devices, data or software not supplied by GTE, and such infringement
would not have occurred but for such use; (ii) such Deliverable is used outside
of the scope of the rights and licenses granted to GENUITY or in a manner for
which the Deliverable was not designed; (iii) the Deliverable or any portion
thereof is modified by or for GENUITY (even by GTE at GENUITY's direction or
instructions), and such infringement would not have occurred but for such
modification; (iv) GENUITY uses the Deliverable as part of a patented process
and there would be no infringement in the use of the Deliverable alone; or (v)
the infringement is the necessary result of GTE's compliance with specifications
or written instructions provided by GENUITY to GTE, misuse of a third party's
Confidential Information provided by GENUITY to GTE or use of Legacy Systems
provided by GENUITY to GTE . For all of the foregoing exclusions, GENUITY shall
defend and indemnify GTE for any infringement claims to the extent set forth in
Section 9.1(a).
(d) The foregoing sets forth GTE's sole and exclusive obligations, and
GENUITY's sole remedies, for infringement of any Intellectual Property Rights by
any Deliverables under any Statement of Work.
9.2. General. GTE and GENUITY, to the fullest extent permitted by law, each
-------
shall defend, indemnify and hold harmless the other and its Affiliates,
officers, agents and employees from any and all amounts payable under any
judgment, verdict, court order or settlement (and associated fees and
disbursements of counsel) arising from or
13
related to any third-party claims for injury, sickness, disease or death of any
person or damage to any real or tangible personal property or assets to the
extent arising from the indemnitor's (either directly or through its officers,
agents, subcontractors or representatives) negligence or willful misconduct in
the performance of this Agreement; provided, however, that if a claim is the
-------- -------
result of the joint negligence or joint willful misconduct of GTE and GENUITY,
the amount of the claim for which each party is entitled to indemnification
shall be limited to that portion of such claim that is attributable to the
negligence or willful misconduct of the indemnifying party. The parties agree
that the payments required by any Statement of Work provided under this
Agreement includes consideration for the obligation to indemnify as set out in
this Section 9.
9.3. Losses. GENUITY and GTE each shall be responsible for any and all
------
claims, actions, damages, liabilities, costs and expenses, including reasonable
attorneys' fees and expenses (collectively, "Losses"), to their respective
tangible personal or real property (whether owned or leased), and each party
agrees to look only to its own insuring arrangements (if any) with respect to
such Losses. Subject to the procedures set forth below, each party shall
indemnify, defend and hold the other party harmless from any and all Losses
arising out of, under or in connection with claims for which the indemnitor is
responsible under the preceding sentence.
9.4. Waivers. GENUITY and GTE waive all rights to recover against each
-------
other for any Loss to their respective tangible personal property (whether owned
or leased) from any cause covered by insurance maintained by each of them,
including their respective deductibles or self-insured retentions. GENUITY and
GTE shall cause their respective insurers to issue appropriate waivers of
subrogation rights endorsements to all property insurance policies maintained by
each party. Each party shall give the other written notice if a waiver of
subrogation is unobtainable or obtainable only at additional expense. If the
party receiving such notice agrees to reimburse the other party for such
additional expense, the other party shall obtain such waiver of subrogation. If
a waiver is unobtainable or if a party elects not to pay the additional expense
of a waiver, then neither party nor their insurers shall waive such subrogation
rights.
9.5. Conditions. The indemnification obligations set forth in this section
----------
shall not apply unless the party claiming indemnification: (i) uses its best
efforts to notify the other promptly in writing, of any matters in respect of
which the indemnity may apply and of which the notifying party has knowledge, in
order to allow the indemnitor the opportunity to investigate and defend the
matter; provided, however, that the failure to so notify shall only relieve the
-------- -------
indemnitor of its obligations under this Section 9 if and to the extent that the
indemnitor is prejudiced thereby; and (ii) gives the other party full control of
the response thereto and the defense thereof, including any agreement relating
to the settlement thereof; provided, however, that the indemnitee shall have the
right to participate, on a non-interfering basis, in any legal proceeding to
contest and defend a claim for indemnification involving a third party and to be
represented by legal counsel of its choosing, all at the indemnitee's sole cost
and expense. However, if the
14
indemnitor fails to promptly assume the defense of the claim, the party entitled
to indemnification may assume the defense at the indemnitor's cost and expense.
The indemnitor shall not be responsible for any settlement or compromise made
without its prior written consent, unless the indemnitee has tendered notice and
the indemnitor has then refused to assume and defend the claim and it is later
determined that the indemnitor was obligated to assume and defend the claim. The
indemnitee agrees to cooperate in good faith with the indemnitor at the request
and expense of the indemnitor.
10. Limitations on Liability.
------------------------
10.1. General. A party's and its Affiliates' liability arising out of or
-------
relating to a Statement of Work and this Agreement, including without limitation
on account of performance or nonperformance of obligations hereunder, regardless
of the form of the cause of action, whether in contract, tort (including without
limitation negligence), statute or otherwise, shall in no event exceed the
lesser of (i) the price to be paid to GTE for the completed Statement of Work as
set forth thereon; or (ii) the amount actually paid by GENUITY to GTE for the
particular Statement of Work from which the claim arises. The limitation in the
immediately preceding sentence does not apply to a party's obligations under the
section entitled Indemnification and Confidential Information or other breaches
related to Intellectual Property Rights.
10.2. Limitation. EXCEPT FOR BREACHES RELATED TO CONFIDENTIAL INFORMATION
----------
OR INTELLECTUAL PROPERTY RIGHTS, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
ANY INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY, SPECIAL OR CONSEQUENTIAL DAMAGE
OR LOST PROFITS OF ANY KIND WHATSOEVER EVEN IF A PARTY OR ITS AFFILIATES HAVE
BEEN APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING.
11. Term.
----
11.1. Term. This Agreement is effective as of the date of closing of the
----
initial public offering of Genuity shares of stock ("Effective Date") and shall
expire the earlier of: (a) one (1) year after the Effective Date or (b)
expiration or termination of all of the Statements of Work under this Agreement
unless earlier terminated under Section 11.1, 11.2, 11.3 or 11.4 of this
Agreement. This Agreement may not be renewed.
11.2. Termination Events. Either party may terminate or cancel this
------------------
Agreement or any Statement of Work, effective immediately, upon written notice
to the other party, if any of the following events occur:
(a) The other files a voluntary petition in bankruptcy (other than as
creditor).
(b) The other is adjudged bankrupt.
15
(c) A court assumes jurisdiction of the assets of the other under a
federal reorganization act.
(d) A trustee or receiver is appointed by a court for all or a
substantial portion of the assets of the other.
(e) The other becomes insolvent or suspends its business.
(f) The other makes an assignment of its assets for the benefit of its
creditors except as required in the ordinary course of business.
11.3. Termination for Breach. Either party may terminate or cancel this
----------------------
Agreement or a Statement of Work, for a material breach or default of any of the
terms, conditions or covenants of this Agreement by the other, provided that
such termination or cancellation may be made only following the expiration of a
thirty (30) day period during which the other party has failed to cure such
breach after having been given written notice of such breach.
11.4. Termination for Convenience. GENUITY may terminate any Statement of
---------------------------
Work, or this Agreement in its entirety, at any time upon written notice to GTE.
In such event, GENUITY shall pay GTE for all work performed up to the date of
termination, and for all supplies and other resources, including third party
licenses, that GTE has obtained or committed to the completion of the relevant
Statement of Work and that cannot reasonably be re-assigned or otherwise
utilized by GTE on other matters.
11.5. Termination by Mutual Consent. The parties may at any time terminate
-----------------------------
any Statement of Work, or this Agreement in its entirety, by mutual consent. In
such event, GENUITY shall pay GTE for all work performed up to the date of
termination, and for all supplies and other resources, including third party
licenses, that GTE has obtained or committed to the completion of the relevant
Statement of Work and that cannot reasonably be re-assigned or otherwise
utilized by GTE on other matters.
11.6. Effect of Termination.
---------------------
(a) No expiration, termination or cancellation of this Agreement, in
whole or in part, shall relieve GENUITY of any obligation to pay amounts due nor
affect any other rights or liabilities of the parties which may have accrued
prior to the date of expiration, termination or cancellation.
(b) In no event shall any license granted to GENUITY hereunder (or any
license grant made by reference to the Software License Agreement) survive
expiration, termination or cancellation unless and until Internetworking has
paid in full for the Deliverables to which such license relates.
16
(c) Notwithstanding anything herein to the contrary, and in addition to
any provisions of Statement of Work that expressly survive expiration,
termination or cancellation of this Agreement, upon any expiration or
termination of this Agreement, the provisions of Sections 5, 6, 7, 8.2, 8.3, 9,
10, 11.6 and 12 of this Agreement shall survive such expiration, termination or
cancellation and shall continue in full force and effect.
(d) GTE shall use its best efforts to provide all items, services and
personnel necessary to effectuate and ensure a smooth and timely transition for
Genuity from dependence on Services under each Statement of Work to standalone
ability to perform such Services itself or in conjunction with third parties.
Both parties shall make appropriate resources available in connection with such
transition, and any such steps taken by GTE shall be accomplished prior to the
expiration of the term of this Agreement.
12. Dispute Resolution.
------------------
12.1. General. Any controversy or claim arising out of or relating to this
-------
Agreement, or the breach thereof, shall be settled first, by good faith efforts
of the parties to reach mutual agreement, and second, if mutual agreement is not
reached to resolve the dispute, by final, binding arbitration as set out in
Section 12.3 below.
12.2. Initial Resolution. A party that wishes to initiate the dispute
------------------
resolution process shall send written notice to the other party with a summary
of the controversy and a request to initiate these dispute resolution
procedures. Each party shall appoint a knowledgeable, responsible representative
from the company who has the authority to settle the dispute, to meet and
negotiate in good faith to resolve the dispute. The discussions shall be left to
the discretion of the representatives, who may utilize other alternative dispute
resolution procedures such as mediation to assist in the negotiations.
Discussions and correspondence among the representatives for purposes of these
negotiations shall be treated as Confidential Information developed for purposes
of settlement, shall be exempt from discovery and production, and shall not be
admissible in the arbitration described above or in any lawsuit pursuant to Rule
408 of the Federal Rules of Evidence. Documents identified in or provided with
such communications, which are not prepared for purposes of the negotiations,
are not so exempted and may, if otherwise admissible, be admitted in evidence in
the arbitration or lawsuit. The parties agree to pursue resolution under this
subsection for a minimum of 60 days before requesting arbitration.
12.3. Arbitration. If the dispute is not resolved under the preceding
-----------
subsection within 60 days of the initial written notice, and the dispute does
not relate to Intellectual Property Rights, either party may demand arbitration
by sending written notice to the other party. The parties shall promptly submit
the dispute to the American Arbitration Association for resolution by a single
neutral arbitrator acceptable to both parties, as selected under the rules of
the American Arbitration Association. The dispute shall then
17
be administered according to the American Arbitration Association's Commercial
Arbitration Rules, with the following modifications: (i) the arbitration shall
be held in a location mutually acceptable to the parties, and if the parties do
not agree, the location shall be New York City; (ii) the arbitrator shall be
licensed to practice law; (iii) the arbitrator shall conduct the arbitration as
if it were a bench trial and shall use, apply and enforce the Federal Rules of
Evidence and Federal Rules of Civil Procedure; (iv) except for breaches related
to Confidential Information or intellectual property, the arbitrator shall have
no power or authority to make any award that provides for consequential,
punitive or exemplary damages; (v) the arbitrator shall control the scheduling
so that the hearing is completed no later than 60 days after the date of the
demand for arbitration; and (vi) the arbitrator's decision shall be given within
5 days thereafter in summary form that states the award, without written
decision, which shall follow the plain meaning of this Agreement, the relevant
documents, and the intent of the parties. Judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction over the parties.
Each party to the dispute shall bear its own expenses arising out of the
arbitration, except that the expenses of the facilities to conduct the
arbitration and the fees of the arbitrator shall be shared equally by the
parties.
12.4. Injunctive Relief. The foregoing notwithstanding, each party shall
-----------------
have the right to seek injunctive relief in an applicable court of law or equity
pending resolution of the dispute in accordance with the foregoing.
13. General.
-------
13.1. Notice. Any written notice either party may give the other
------
concerning the subject matter of this Agreement shall be in writing and given or
made by means that obtain a written acknowledgment of receipt. Notices shall be
sent to the parties at the following addresses, which may be changed by written
notice:
To GTE: ___________________________
___________________________
___________________________
___________________________
To GENUITY: ___________________________
___________________________
___________________________
___________________________
Notice shall be deemed to have been given or made when actually received,
as evidenced by written acknowledgment of receipt.
13.2. Compliance. GTE and GENUITY shall each comply with the provisions of
----------
all applicable federal, state, and local laws, ordinances, regulations and codes
(including, without limitation, procurement of required permits or certificates)
in fulfillment of their
18
obligations under this Agreement. GTE Products and Services are subject to U.S.
export and foreign transactions control regulations. Each party undertakes that
it shall neither export, nor cause nor permit to be exported, without the other
party's prior written consent and without compliance with applicable law and
regulation, the other party's products or services out of the United States of
America, nor shall such products or services be made available, directly or
indirectly, for use in any project associated with the design, development,
production, testing, stockpiling or use of: (i) nuclear weapons or facilities to
produce nuclear explosives, (ii) missiles, or (iii) chemical or biological
warfare agents. Each party agrees to comply with all applicable laws and
regulations relating to the exportation of technical information, as they
currently exist and as they may be amended from time to time.
13.3. Assignment, Subcontracting.
--------------------------
(a) Neither this Agreement nor any rights or obligations hereunder shall
be assignable by either of the parties hereto; provided, however, that GTE may
-------- -------
delegate all or any portion of its obligations under this Agreement to one or
more of its Affiliates or may assign this Agreement to any Affiliate.
(b) GTE may use subcontractors to perform its obligations under this
Agreement. GTE shall be responsible for the fulfillment of its obligations
hereunder, notwithstanding the performance of such obligations by its
subcontractors.
13.4. Waiver of Terms and Conditions. Failure to enforce any of the terms
------------------------------
or conditions of this Agreement shall not constitute a waiver of any such terms
or conditions, or of any other terms or conditions.
13.5. Severability. Where any provision of this Agreement is declared
------------
invalid, illegal, void or unenforceable, or any changes or modifications are
required by regulatory or judicial action, and any such invalid, illegal, void
or unenforecable provision, or such change or modification, substantially
affects any material obligation of a party hereto, the remaining provisions of
this Agreement shall remain in effect and the parties shall mutually agree upon
a course of action with respect to such invalid provision or such change or
modification to the end that the purposes of this Agreement are carried out.
13.6. Governing Law. This Agreement, and the rights and obligations
-------------
contained in it, shall be governed by and construed in accordance with the laws
of the State of New York, without regard to any conflicts of law principles that
would require the application of the laws of any other jurisdiction.
13.7. No Unreasonable Delay or Withholding. Where agreement, approval,
------------------------------------
acceptance, consent or similar action by GENUITY or GTE is required, such action
shall not be unreasonably delayed or withheld.
19
13.8. Force Majeure. If performance of any obligations by either party
-------------
under this Agreement (other than any obligation of either party to pay money
hereunder) is prevented, restricted or interfered with by reason of acts of God,
wars, revolution, civil commotion, acts of public enemy, embargo, acts of
government in its sovereign capacity, labor difficulties, including, without
limitation, strikes, slowdowns, picketing or boycotts, communication line
failures, power failures, or any other circumstances beyond the reasonable
control and not involving any fault or negligence of the party affected, the
party affected, upon giving prompt notice to the other party, shall be excused
from such performance on a day-to-day basis during the continuance of such
prevention, restriction or interference (and the other party shall likewise be
excused, on a day-to-day basis during the same period, from performance of its
obligations which are dependent upon or affected by such nonperformance);
provided, however, that the party so affected shall use its best reasonable
-------- -------
efforts to avoid or remove such causes of nonperformance and both parties shall
proceed immediately with the performance of their obligations under this
Agreement whenever such causes are removed or cease.
13.9. Entire Agreement. This Agreement represents the entire understanding
----------------
between the parties with the respect to its provisions and cancels and
supercedes all prior agreements or understandings, whether written or oral, with
respect to the subject matter. This Agreement may only be modified or amended by
an instrument in writing signed by duly authorized representatives of the
parties. This Agreement shall be deemed to include all Schedules issued
hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
___ day of ___________, 2000 through their authorized representatives.
GTE SERVICE CORPORATION GENUITY SOLUTIONS INC.
By:_________________________ By:_________________________
Name:_______________________ Name:_______________________
Title:______________________ Title:______________________
Date:_______________________ Date:_______________________
20
