EXHIBIT 10.12
SOFTWARE LICENSE AGREEMENT
THIS SOFTWARE LICENSE AND MAINTENANCE AND SUPPORT 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 its
obligations hereunder, and Genuity 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 granted a limited,
non-exclusive license to use specified GTE-owned software (including any updates
provided to GENUITY pursuant to the IT Transition Services Agreement) for the
internal operations of GENUITY and its Affiliates, with the term of the
Agreement being one year, but renewable at the option of the parties and
terminable by GENUITY on thirty (30) days prior written notice.
In consideration of the mutual terms and conditions of this Agreement,
the parties agree as follows:
1. General.
GTE and GENUITY desire to establish a contractual mechanism pursuant to
which GENUITY and its subsidiary companies will obtain from GTE or an affiliate
company of GTE, and GTE or the affiliate will provide to GENUITY and its
subsidiary companies, licenses under certain GTE software and maintenance and
support services for certain GTE software in accordance with the terms and
conditions set forth in this Agreement.
2. Definitions.
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. "Confidential Information" shall mean: (i) any information in
written, other tangible or electronic form which is labeled by GTE as
"confidential", "proprietary" or with a legend of similar import; and (ii)
Licensed Software in any form (including, without limitation, related
Documentation), whether or not labeled in accordance with the preceding. The
terms and conditions of this Agreement shall be deemed to be Confidential
Information.
2.3. "Designated Systems" shall mean the computer hardware and
operating systems specified in Schedule A, and all computer programs and
routines incorporated therein, including, without limitation, Third Party
Software.
1
2.4. "Documentation" shall mean the user guides, operating manuals and
related technical materials, whether in print or electronic form, for the
Licensed Programs, including, without limitation, for each such guides, manuals
and materials, any and all Updates.
2.5. "GTE Products" shall mean Licensed Software, New Products,
Confidential Information and any other materials or rights provided hereunder by
GTE under this Agreement.
2.6. "Improvements" shall mean all improvements, modifications and
enhancements that pertain to the Licensed Software, including without
limitation, any and all Updates.
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. "Licensed Programs" shall mean the computer programs, in Object
Code only, specified in Schedule A, including, without limitation, for each such
programs any and all Updates.
2.9. "Licensed Software" shall mean Licensed Programs and Documentation
specified in Schedule A, and any Updates thereof.
2.10. "License Term" shall have the meaning provided in Section 11.1.
2.11. "New Products" shall mean computer programs, in Object Code only,
that provide substantially new functions as compared to Licensed Programs, and
any related user guides, operating manuals and related technical materials,
whether in print or electronic form; provided, however, that "New Products"
shall not include Deliverables developed under a Statement of Work to the
Software Development and Technical Services Agreement between the parties or
their Affiliates of even date herewith
2.12. "Object Code" shall mean the machine-executable version of a
computer software program.
2.13. "Third Party Software" shall mean any version of any software
product, in Object Code only, and related documentation that is developed or
owned by a third party and is distributed or otherwise made available to GENUITY
by GTE pursuant to this Agreement or required by GENUITY for the Use of the
Licensed Software.
2.14. "Updates" shall mean: (i) corrections of Licensed Software
errors, and (ii) any other modifications or additions to the Licensed Software
that do not provide substantially new functions to that Licensed Software
provided pursuant to a certain IT Transition Services Agreement between the
parties of even date herewith (the "IT Transition Services Agreement"). Updates
shall not include New Products.
2
2.15. "Use" means to load, execute, employ, use, store or display the
specified subject matter and, in the circumstances described in Section 3.1(c),
shall include maintenance.
3. Intellectual Property.
3.1. License Grant.
(a) On the terms and subject to the conditions set forth herein, GTE
hereby grants to GENUITY, during the License Term only, a nonexclusive,
nontransferable, worldwide license to Use the Licensed Program and the
Documentation only for GENUITY's own internal operations and only on the
Designated Systems. The foregoing license grant shall extend to GENUITY's
Affiliates; provided, however, that GENUITY shall ensure that each of its
Affiliates comply with the terms and conditions of this Agreement and shall be
liable for any breach of them by any of its Affiliate.
(b) The foregoing license grant shall include the right of GENUITY to
transfer a Licensed Program temporarily to a backup system if a Designated
System is inoperative, and to make a reasonable number of copies of the Licensed
Programs for testing, disaster recovery, nonproductive backup or archival
purposes; provided, however, that all titles, trademarks, copyright, patent and
other proprietary rights notices relating to Intellectual Property Rights shall
be reproduced in such copies and such copies are stored in a safe and secure
place. All such copies, in whole or in part, of any Licensed Program shall be
governed by the terms and conditions of this Agreement. The foregoing license
grant also shall include the right of GENUITY to make a reasonable number of
copies of the Documentation for use with the Licensed Programs; provided,
however, that all titles, trademarks, copyright, patent and other proprietary
rights notices relating to Intellectual Property Rights shall be reproduced in
such copies and such copies are stored in a safe and secure place. All such
copies, in whole or in part, of any Documentation shall be governed by the terms
and conditions of this Agreement.
(c) GTE and GENUITY shall enter into a Software Escrow Agreement,
substantially in the form attached hereto as Exhibit D, for the Licensed
Programs identified in Schedule A as requiring the escrow of source code, which
shall set forth the terms and conditions pursuant to which source code for the
identified Licensed Programs will be made available to GENUITY. In the event
that such source code is released to GENUITY pursuant to the Software Escrow
Agreement, GTE shall grant to GENUITY a limited, personal, nontransferable and
nonexclusive license to use such released source code solely for the purpose of
maintaining the Licensed Programs during the License Term. Said license shall
not be transferable or sublicensable, and shall not include the right to create
any new versions, enhancements or other modifications of the Licensed Programs.
The said license shall include the right to have the Licensed Software
maintained by a third party, upon GTE's prior written approval, which approval
shall not be unreasonably withheld.
3
(d) The license provided by this Section 3.1 shall not be sublicensable
or transferable, in whole or in part, to any third party and 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.
3.2. Certain License Limitations.
(a) The license right granted in Section 3.1 shall not include any
right to: (i) copy or reproduce, modify, market, sublicense, transfer or
distribute the Licensed Software, or any portion thereof, in any manner
whatsoever (except as otherwise expressly provided in Section 3.1(b)), (ii) make
the Licensed Software, or any portion thereof, available to any other person or
entity, whether on a time-sharing basis or otherwise, (iii) Use or otherwise
exploit the Licensed Software for the benefit of any other person or entity, or
(iv) modify or create works derivative of the Licensed Software or any portion
thereof. Except and to the extent expressly set forth in Schedule A, such
license grant does not include any license, right, title or interest in or to
any Third Party Software or other technology of any third party, or any
Intellectual Property Rights therein, required for GENUITY to exercise its
rights hereunder. To the extent any Third Party Software is provided by GTE to
GENUITY pursuant to this Agreement, the Use 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 GTE shall use its best efforts to advise GENUITY of that fact, and such
Third Party Software license agreement shall govern the Use of such Third Party
Software.
(b) The license right granted in Section 3.1 is for Object Code only
and does not include a license or any other rights to the source code or other
mnemonic or high-level statement version of the Licensed Programs or any
documentation therefor. Without limiting the foregoing, GENUITY shall not
decompile, disassemble, reverse analyze or reverse engineer any Licensed
Software, or otherwise attempt to discover, generate, use or modify the
structural framework or source code of any Licensed Software, or permit or
authorize any person or entity to do so.
(c) Nothing herein shall be construed as granting GENUITY, by
implication, estoppel or otherwise, any license or other right under any
Intellectual Property Right of GTE, including without limitation, any such
license or right in or to the Licensed Software, except for the license
expressly granted in Section 3.1.
3.3. Ownership.
GENUITY acknowledges and agrees that (i) GTE is and shall remain the
sole and exclusive owner of GTE Products, and any and all Intellectual Property
Rights therein and (ii) the third party is and shall remain the sole and
exclusive owner of Third Party Software, and any and all Intellectual Property
Rights therein, and that GENUITY acquires no rights in or to any of the
foregoing, other than the license rights expressly granted herein (or in the
instance of Third Party Software, the rights granted by the third party).
GENUITY agrees neither to do nor to permit any act which may in any way
jeopardize or be detrimental to the validity of GTE's Intellectual Property
Rights in GTE Products of the third party's Intellectual Property Rights in the
Third Party Software.
4
4. Payments
4.1. Payments. In consideration for the rights and licenses granted
herein by GTE for the Use of each Licensed Software and for the Maintenance and
Support Services for such Licensed Software provided by GTE hereunder, GENUITY
shall pay GTE the annual license fee specified for each Licensed Software set
forth in Schedule A hereto; said annual license fee specified in Schedule A
shall be applicable only to the first year of the License Term, with the annual
license fee thereafter being GTE's then applicable annual license fee (which
includes Maintenance and Support Services) charged to third parties who are not
Affiliates of GTE (or if there is no annual license fee (which includes
Maintenance and Support Services) for third party licensees of the Licensed
Software, the amount set forth on the applicable invoice to GENUITY). GTE shall
invoice GENUITY for such annual license fee on the Effective Date and on each
anniversary thereafter during the License Term, and payment shall be due from
GENUITY on or before the thirtieth (30th) day following receipt by GENUITY of
such invoice. All payments shall be made in United States currency, shall be
nonrefundable and paid fully net, without set-off, deduction or counterclaim
unless expressly provided otherwise hereunder, and shall be made by wire
transfer to such bank account(s) as GTE may specify in writing.
4.2. Late Payments. GENUITY shall pay interest on any late payments at
a rate equal to the lesser of (i) 18% per annum and (ii) the maximum rate of
interest allowable under applicable law.
4.3. Taxes. In addition to the charges payable for services and rights
and licenses provided hereunder by GTE, 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 lawfully levied by a
duly constituted governmental authority and for which GTE is required or
permitted, by law, to collect from GENUITY with respect to the services,
materials and rights provided under this Agreement. In addition, GENUITY shall
be responsible for all real and personal property taxes imposed on Licensed
Software in GENUITY'S possession on January 1 of every year. If GENUITY
determines that any services, materials or rights obtained from GTE are exempt
from a tax, GENUITY must provide GTE a properly completed exemption certificate,
for all jurisdictions 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
5. Delivery.
5.1. Delivery of Licensed Software. Unless otherwise already in the
possession of GENUITY, as soon as practicable after the Effective Date of this
Agreement, but in any event within thirty (30) days thereafter, GTE shall
deliver to GENUITY a number of copies of each item comprising the Documentation
and the Licensed Programs; provided, however, the number of copies of Licensed
Programs shall in no event not exceed the number of Designated Systems.
5.2. Updates. Any Updates to the Licensed Software shall be provided
pursuant to the IT Transition Services Agreement. Any Use or other exploitation
in any manner of any Updates shall be subject to all terms and conditions of
this Agreement.
5.3. New Products. Any New Products developed or made available by GTE,
during the License Term, for Use with or as a replacement for Licensed Software
shall be offered to GENUITY at GTE's then-current published license fees, terms
and conditions.
5.4. Maintenance and Support Services. Except as otherwise required for
GTE to satisfy its obligations contained in Section 8.3 hereof, GTE's sole
obligation to provide any maintenance and support services hereunder shall be
set forth in the IT Transition Services Agreement.
6. Indemnity for Infringement of Third Party Intellectual Property.
6.1. Indemnity. If Licensed Software becomes 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 Licensed Software 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 Licensed Software pursuant to this Agreement; or
(iii) require the return of such Licensed Software and terminate GENUITY's right
to Use the same and refund to GENUITY a pro-rata portion of the current annual
license fee actually paid to GTE by GENUITY for the Use of such Licensed
Software. Notwithstanding the foregoing, if GTE exercises its right to require
the return of such Licensed Software and terminates GENUITY's right to Use the
same, to the extent permitted by applicable law, GENUITY may retain and continue
to Use such Licensed Software 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 Licensed Software.
6.2. Limitations. GTE shall not be liable to GENUITY for any claims of
inducement of infringement or contributory infringement or claims of
infringement resulting from the combination of the Licensed Software 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 Licensed Software 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
Licensed Software is Used outside of the scope of the rights and licenses
granted to GENUITY or in a manner for which the Licensed Software was not
designed; (iii) the Licensed Software 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; or (iv) GENUITY
Uses the Licensed Software as part of a patented process and there would be no
infringement in the Use of the Licensed Software alone. For all of the foregoing
exclusions, GENUITY shall defend and indemnify GTE for any infringement claims
to the extent set forth in Section 6.1.
6
6.3. Procedure. The indemnification obligations set forth in this
Section 6 shall not apply unless GENUITY: (i) uses its best efforts to notify
GTE promptly in writing of any claims, charges of infringement or litigation in
order to allow GTE the opportunity to investigate and defend the matter;
provided, however, that the failure to so notify shall only relieve GTE of its
obligations under this Section 6 if and to the extent that GTE is prejudiced
thereby; and (ii) gives GTE full control of the response thereto and the defense
thereof, including, without limitation, any agreement relating to the settlement
thereof; provided, however, that GENUITY shall have the right to participate, on
a non-interfering basis, in any legal proceeding to contest and defend a claim
for infringement and to be represented by legal counsel of its choosing, all at
GENUITY's sole cost and expense. However, if GTE fails to promptly assume the
defense of the claim, GENUITY may assume the defense at GTE's cost and expense.
GTE shall not be responsible for any settlement or compromise made without its
prior written consent, unless GENUITY has tendered notice and GTE has then
refused to assume and defend the claim and it is later determined that GTE was
obligated to assume and defend the claim. GENUITY agrees to cooperate in good
faith with the GTE at the request and expense of GTE.
6.4. The foregoing sets forth GTE's sole and exclusive obligations, and
GENUITY's sole remedies, for infringement of any Intellectual Property Rights by
any GTE Products.
7. Other Obligations of GENUITY and GTE.
7.1. Third Party Software. GENUITY acknowledges that, in order to
exercise any rights granted by the license set forth in Section 3.1, including,
without limitation, Using the Licensed Software as expressly provided thereby,
GENUITY may need to license or otherwise obtain permission to Use Third Party
Software. Such licenses or other permissions shall be at GENUITY's sole cost and
expense and GENUITY shall be solely responsible for observing and complying with
the terms and conditions under which Third Party Software is licensed. GTE shall
use its best efforts to inform GENUITY of any Third Party Software that, to
GTE's knowledge, is required to Use the Licensed Software.
7
7.2. Inspection of Facilities. GENUITY shall advise GTE in writing of
the location of all facilities at which it is carrying out activities subject to
license under this Agreement, including, without limitation, the location of any
Designated Systems. GTE 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 GENUITY's
activities and GENUITY's compliance with this Agreement. GENUITY shall provide
reasonable assistance to GTE for such inspection, GTE shall minimize the amount
of time that it is required to spend in GENUITY's facilities, and GTE shall
coordinate all such activities with GENUITY so as not to unreasonably interfere
with GENUITY's operations.
7.3. Interoperability. If the provisions of the Council of European
Communities Directive of May 14, 1991 on the Legal Protection of Computer
Programs (the "Software Directive") apply to GENUITY's Use of the Licensed
Programs, and GENUITY wishes to obtain the information necessary to achieve
interoperability of an independently created computer program with the Licensed
Programs as permitted under Article 6 of the Software Directive
("Interoperability Information"), then GENUITY shall notify GTE in writing,
specifying the nature of the Interoperability Information it needs and the
purpose for which it will be used. If GTE reasonably determines that GENUITY is
entitled to such Interoperability Information under said Article 6, GTE shall,
at its option, either (i) provide such Interoperability Information to GENUITY
or (ii) authorize GENUITY to reverse engineer the Licensed Programs, within the
time limits prescribed by said Article 6, solely to the extent indispensable to
obtain such Interoperability Information. If GTE elects clause (i), GENUITY
shall provide all information and assistance reasonably requested by GTE to
enable GTE to perform clause (i), and GTE may charge GENUITY a reasonable fee,
determined in GTE's discretion, for making available the requested
Interoperability Information, unless such a fee is prohibited under
said Article 6.
8. Warranties.
8.1. Allocation of Risk. An essential purpose of the exclusion of
warranties and limitation of liability provided in this Agreement is allocation
of risks between GTE and GENUITY, which allocation of risks is reflected in the
arrangements between GTE and GENUITY contained in this Agreement.
8.2. No Conflicts. GTE warrants that, to the best of its knowledge, it
owns, or otherwise has, the necessary Intellectual Property Rights to grant the
licenses, rights and permissions contained herein.
8
8.3. Conformance Warranty. GTE warrants to GENUITY that (i) with normal
service and use, each of the Licensed Programs, including, without limitation,
Updates, shall, at the time of first delivery to GENUITY of the Licensed
Programs and for a period of thirty (30) days thereafter, conform substantially
on the Designated Systems to either the Documentation or the specifications
included in Schedule B, as applicable; provided, however, that such Licensed
Program has not been modified or altered by GENUITY or any other person or
entity, has not been abused or misapplied, has not been Used outside of the
scope of the rights and licenses granted pursuant to this Agreement, and has not
been Used in combination with hardware or software other than the Designated
Systems. The warranty set forth in this Section 8.3 shall be void if GENUITY
fails to submit timely a completed report to GTE describing the condition that
GENUITY believes constitutes a breach of said warranty, together with removable
machine-readable media on which GENUITY has made a copy of that portion of the
Licensed Program that GENUITY believes to contain such condition, within twenty
(20) days after GENUITY discovers such condition. GENUITY's sole and exclusive
remedy, and GTE's entire liability, for breach of the warranty set forth in this
Section 8.3 shall be, at GTE's option and sole expense: to attempt to correct
any nonconforming Licensed Programs; to replace any nonconforming Licensed
Programs with a corrected copy upon return to GTE of all of GENUITY's copies of
such nonconforming Licensed Program; or if GTE is unable to make any Licensed
Programs operate as warranted hereunder, to refund any payments on a pro-rata
basis actually made by GENUITY to GTE hereunder for such nonconforming Licensed
Program during the last year of the License Term.
8.4. Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 8 GTE
MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED, OR
ARISING BY CUSTOM OR TRADE USAGE, WITH RESPECT TO THE GTE PRODUCTS OR OTHERWISE
IN CONNECTION WITH THIS AGREEMENT. WITHOUT LIMITING THE FOREGOING, GTE EXPRESSLY
DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION (i) THAT ANY GTE
PRODUCTS OR ANY OF THEIR USE OR ANY ACTIVITIES OF GENUITY CONTEMPLATED BY THIS
AGREEMENT, SHALL BE FREE FROM INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS
OF ANY THIRD PARTY, (ii) AS TO THE QUALITY OR PERFORMANCE OF ANY GTE PRODUCTS OR
SERVICES, AND (iii) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE EVEN
IF GTE HAS BEEN ADVISED OR SHOULD HAVE KNOWN OF SUCH PURPOSE. GENUITY SHALL BE
SOLELY RESPONSIBLE FOR ADEQUATE PROTECTION AND BACKUP OF GENUITY'S DATA AND
SOFTWARE USED IN CONNECTION WITH ITS USE OF GTE
9
9. Limitation of Liabilities.
9.1. UNDER NO CIRCUMSTANCES SHALL GENUITY BE ENTITLED TO RECOVER FROM
GTE ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES
(INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS, LOSS OF PROFITS OR
LOSS OF USE), WHETHER BASED ON CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION,
NEGLIGENCE), OR ANY OTHER CAUSE OF ACTION RELATING TO GTE PRODUCTS, OR OTHERWISE
RELATING TO THIS AGREEMENT, EVEN IF GTE HAS BEEN INFORMED OR SHOULD HAVE KNOW OF
THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL THE LIABILITY OF GTE (WHETHER
BASED ON CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE) OR ANY OTHER
CAUSE OF ACTION) EXCEED THE AGGREGATE AMOUNT OF PAYMENTS ACTUALLY RECEIVED BY
GTE DURING THE LAST YEAR OF THE LICENSE TERM PURSUANT TO SECTION 4.1.
9.2. Third Party Claims. Without limiting the foregoing Section 9.1,
and except and to the extent expressly provided for in Section 6, GTE shall
under no circumstances be liable for any claim or demand by any third party
based on or related to GENUITY's Use of the Licensed Software, errors or alleged
errors in GENUITY's Use of the Licensed Software or any other GTE Products or
Services. GENUITY shall indemnify and hold GTE harmless from and against any
loss, cost or damages, including, without limitation, reasonable attorneys' and
professionals' fees, arising in connection or as a result of such claim or
demand.
10. Confidential Information.
10.1. Restrictions. GENUITY shall: (i) use Confidential Information
only in connection with fulfilling its obligations and exercising its rights
hereunder; (ii) hold Confidential Information in strict confidence and exercise
due care with respect to its handling and protection, consistent with GENUITY's
own policies concerning the protection of its own confidential information of
similar importance, but in no instance less than reasonable care; (iii) not
disclose, divulge or publish Confidential Information or any portion thereof,
except to such of its responsible employees who have a bona fide need-to-know to
the extent necessary to exercise GENUITY's rights and licenses under this
Agreement and are who are bound in writing to maintain the confidentiality of
such Confidential Information; (iv) instruct all such employees not to disclose
Confidential Information to third parties; (v) not remove any titles,
trademarks, copyright, patent and other proprietary rights notices set forth on
or contained within the Confidential Information or any portion thereof; or (vi)
not copy or otherwise duplicate any Confidential Information, in whole or in
part, including, without limitation, derivations, except and to the extent
expressly permitted hereunder and necessary to exercise its rights and licenses
hereunder.
10.2. Compliance with Governmental, Judicial Requirements.
Notwithstanding anything herein to the contrary, if GENUITY receives a request
to disclose any Confidential Information (whether pursuant to a valid and
effective subpoena, an order issued by a court or other governmental authority
of competent jurisdiction or otherwise) on advice of legal counsel that
disclosure is required under applicable law, GENUITY agrees that, prior to
disclosing any Confidential Information, it shall (i) notify GTE of the
existence and terms of such request or advice, (ii) cooperate with GTE in taking
legally available steps to resist or narrow any such request or to otherwise
eliminate the need for such disclosure at GTE's sole expense, if requested to do
so by GTE, and (iii) if disclosure is required, it shall be the obligation of
GTE 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 GTE as is required to be disclosed.
10
10.3. Marking. Any copy of the Confidential Information authorized by
GTE to be made by GENUITY pursuant to this Agreement shall conspicuously display
markings or statements of GTE appearing on the originals of such Confidential
Information.
10.4. Survival. The obligations set forth in this Section 10 shall
survive any termination, cancellation or expiration of this Agreement or of any
licenses granted pursuant to this Agreement.
11. Term, Termination.
11.1. License Term. This Agreement shall be effective as of the
Effective Date and, unless otherwise terminated or cancelled as provided herein,
remain in effect for a period of one (1) year from the Effective Date (the
"License Term"). The License Term for each Licensed Software shall be
automatically renewed for successive one (1) year periods upon the payment of
the then current annual license fee for such Licensed Software.
11.2. Termination/Cancellation. Each party shall have the right to
terminate/cancel this Agreement, 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;
(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; or
(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. Material Breach. Either party may terminate or cancel this
Agreement or any license for Licensed Software, for a material breach or default
of any of the terms, conditions or covenants of this Agreement by the other;
provided, however, 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
thereof.
11.4. Other Termination. GENUITY may terminate or cancel any license
for any Licensed Software upon thirty (30) days prior written notice to GTE and
the rights and licenses for such terminated or cancelled Licensed Software shall
immediately terminate at the end of such thirty (30) day period or such earlier
period as specified in the notice. Notwithstanding termination or cancellation
of any license for any Licensed Software, no refund or credits shall be due or
owing to GENUITY.
11
11.5. Effect of Termination or Expiration.
(a) Upon any expiration, termination or cancellation of this Agreement,
either in its entirety or with respect to any licensed for Licensed Software,
all rights and licenses granted to GENUITY hereunder or related to such Licensed
Software, respectively, shall terminate.
(b) Within a reasonable time after expiration, termination or
cancellation of this Agreement or of any license for any Licensed Software, but
in no event later than thirty (30) days thereafter, GENUITY shall immediately
cease using the Licensed Software and Confidential Information (or in the
instance of termination, cancellation or expiration of specific Licensed
Software, then only such Licensed Software and related Confidential Information)
and shall return to GTE, or shall destroy in a manner satisfactory to GTE, all
forms in whatever medium of such Licensed Software and Confidential Information,
including, without limitation, any and all copies thereof. An officer of GENUITY
shall certify in writing to GTE that GENUITY has complied with the obligations
of this Section 11.5(b).
(c) 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. Notwithstanding
anything herein to the contrary, upon any expiration or termination of this
Agreement, the provisions of Sections 2, 3.2, 3.3, 4, 6, 7.1, 8.4, 9, 10, 11, 12
and 13 shall survive such expiration, termination or cancellation and shall
continue in full force and effect.
(d) With respect to Third Party Software in which GTE acquires rights
after the Effective Date and includes in Updates to the Licensed Software, which
Third Party Software has been approved by GENUITY as provided in the IT
Transition Services Agreement, the parties acknowledge and agree that if GTE
amortizes costs associated with such Third Party Software, GENUITY shall pay the
balance of any unamortized costs in the event of any termination, cancellation
or non-renewal of the license for the Licensed Software prior to full
amortization of such costs, and upon such payment GENUITY will be entitled to
continue use of such Third Party Software pursuant to the applicable terms and
conditions.
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 paragraph 6(c) below.
12
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, 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 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
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 obligations under this Agreement. GTE
Products are subject to U.S. export and foreign transactions control
regulations. GENUITY undertakes that it shall neither export, nor cause nor
permit to be exported, without GTE's prior written consent and without
compliance with applicable law and regulation, GTE Products or Services out of
the United States of America, nor shall GTE 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. GENUITY 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. Neither this Agreement nor any rights
or obligations hereunder shall be assignable by either of the parties hereto;
provided, however, that GTE may assign this Agreement to any Affiliate.
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 unenforceable 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.
14
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.
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 (the "Effective Date") through their authorized
representatives.
GTE SERVICE CORPORATION GENUITY INC.
By: By:
------------------------------ ------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
------------------------------ ------------------------------
Date: Date:
------------------------------ ------------------------------
15
SCHEDULE A
[Schedule: Documentation, Licensed Programs, Designated Systems]
16
SCHEDULE B
SPECIFICATIONS FOR LICENSED PROGRAMS
[If necessary]
17
