EXHIBIT 10.13
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES,
Z-NODE SERVICES, ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Certain material has been omitted from this exhibit pursuant to a
confidential treatment request. The omitted material is indicated by one or more
***. This material has been filed separately with the Securities and Exchange
Commission.
TABLE OF CONTENTS
PAGE
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I. DEFINITIONS.........................................................................................1
II. SCOPE OF SERVICES..................................................................................12
III. BILLING AND PAYMENT ARRANGEMENTS...................................................................16
IV. CONFIDENTIAL INFORMATION; REPRESENTATIONS AND
WARRANTIES..............................................................................................23
V. LICENSES; INTELLECTUAL PROPERTY RIGHTS;
PROFESSIONAL SERVICES; AND INFRINGEMENT INDEMNITY.......................................................32
VI. EQUITY PROVISION...................................................................................47
VII. GENERAL PROVISIONS.................................................................................47
THIS AGREEMENT, dated as of March 20, 2002 (the "Effective Date"), is
between Z-Tel Communications, Inc. ("Z-Tel"), a Delaware corporation having its
principal place of business at 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxx, Xxxxxxx 00000, and MCI WORLDCOM Communications, Inc. ("MCI"), a Delaware
corporation with offices at 000 Xxxxx 00xx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, 00000
(collectively, the "Parties" or individually, a "Party").
PREAMBLE
Z-Tel and MCI are both competitive local exchange carriers. Z-Tel
provides bundled packages of local and long distance Telecommunications
Services and Information Services, primarily to residences and small
businesses. It provides its local exchange services using the unbundled network
elements of Incumbent Local Exchange Carriers pursuant to Interconnection
Agreements and ILEC tariffs. This Agreement sets forth the terms and conditions
under which Z-Tel will provide to MCI: (i) certain Z-Tel Telephone Exchange
Services for resale to MCI's own end user customers; (ii) certain enhanced
services for resale to MCI's own end user customers; (iii) licenses to certain
computer software and other intellectual property; and (iv) certain ancillary
services and functions for MCI's own use and the use of certain other parties
in providing certain Telephone Exchange Services and certain enhanced services
to MCI's end user customers.
NOW THEREFORE, in reliance upon the foregoing Preamble, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each Party to the other, Z-Tel and MCI agree to the following terms and
conditions.
I. DEFINITIONS
The following terms shall where capitalized have the following
meanings for the purposes of this Agreement:
AFFILIATE - The term "Affiliate" means an entity that (directly or indirectly)
owns or controls, is owned or controlled by, or is under common ownership or
control with, a Party to this Agreement. For purposes of this Agreement, the
term `own' means to own an equity interest (or the equivalent thereof) of more
than *********** of an entity.
ANCILLARY SERVICE - The term "Ancillary Service" means any facility or service
that is not a Telecommunications Service or an Information Service and that is
reasonably necessary or desirable to support delivery by MCI of LW-Based
Services, Z-Line Enhanced Services or Z-Node Services or any other Services
hereunder directly or indirectly to its end user customers, including without
limitation the OSS Services, compliance with subpoenas or other requests of law
enforcement, and any Professional Services.
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ANI - The term "ANI" means Automatic Number Identification, which is the
automatic identification of the calling station used for routing and billing.
AUTHORIZED USER - The term "Authorized User" means MCI and MCI's Affiliates, as
well as any person or entity directly or indirectly authorized by MCI or its
Affiliates, including without limitation their respective agents (including
marketing agents), independent contractors, and end user customers and their
affiliates at any tier provided, however, that the term does not include any
unaffiliated Certificated Carrier.
AUTOMATIC RESTRAINT - The term "Automatic Restraint" means a program, code,
device or similar electronic or physical limitation, the intended purpose of
which is to restrict use of information, or use, functionality or performance
of a Z-Tel Deliverable.
BANKRUPTCY or BANKRUPT - The term "Bankruptcy" or "Bankrupt" means the
happening of any of the following events with respect to a Party to this
Agreement: (i) the filing of an application for, or a consent to, the
appointment of a trustee, receiver or liquidator for all or any substantial
portion of the Party's assets; (ii) the filing of a voluntary petition in
bankruptcy; (iii) the filing of a pleading in any court of record admitting
inability to pay debts as they come due; (iv) the making of an assignment for
the benefit of creditors; (v) the consenting to, or default in the answering
of, a bankruptcy petition filed; (vi) the entry of a judgment or decree in any
bankruptcy or insolvency proceeding adjudicating bankruptcy or insolvency;
(vii) the entry of an order for any relief in any bankruptcy or insolvency
proceeding; (viii) when 120 days after the commencement of any proceeding
seeking reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law or regulation, the
proceeding has not been dismissed; or (ix) when 90 days after the appointment,
without the Party's consent or acquiescence, of a trustee, receiver or
liquidator of the Party or all or any substantial portion of the Party's
assets, the appointment has not been vacated or stayed or when 90 days after
the stay the appointment has not been vacated.
BILLING - "Billing" is the process of maintaining customer usage information,
calculating taxes and fees, preparing and delivering customer invoices,
printing additional invoices for past due accounts, taking actions to terminate
delinquent accounts and engaging in precautionary activities to detect and
prevent fraud (such detection and prevention of fraud to be governed by Section
7.7 hereof). Z-Tel's billing services may be described in greater detail in the
Requirements Statement. Notwithstanding any other provision of this Agreement,
Billing shall not include the establishment of rates charged to end users or
the determination of fees required to be paid to applicable state and federal
regulatory agencies, such rates and such fees to be determined by MCI in its
sole discretion.
BILLING DISPUTE. The term "Billing Dispute" means any claim on any basis that
any dollar amount in any xxxx issued by one Party to the other for services
performed under this Agreement is not rightly due and payable.
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CATEGORY 1 SOFTWARE - The term "Category 1 Software" means ***********.
CATEGORY 2 SOFTWARE - The term "Category 2 Software" means ***********.
CATEGORY 3 SOFTWARE - The term "Category 3 Software" means ***********.
CATEGORY 4 SOFTWARE - The term "Category 4 Software" means ***********
CERTIFICATED CARRIER - The term "Certificated Carrier" means an entity
providing a Telecommunications Service pursuant to an authorization, license,
registration, permit, or tariff issued by or filed with the Federal
Communications Commission or any state public utility commission.
CLLI - The term "CLLI" means Common Language Location Identifier.
COLLECTIONS - Collections is the process of collecting and processing
payments, ******** and other amounts due from end-user customers, ********.
Collections may involve Services provided by Z-Tel, MCI Functions, or a
combination of both. Responsibility for collection services may be described
in greater detail in the Requirements Statement.
COMMUNICATIONS ACT - The term "Communications Act" means the Communications Act
of 1934, as amended, 47 U.S.C. ss. 151 et seq.
CPNI - The term "CPNI" or customer proprietary network information has the
meaning set forth in Section 222 of the Communications Act, 47 U.S.C. ss. 222.
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CONFIDENTIAL INFORMATION - The term "Confidential Information" means
information, including customer information, CPNI, and Z-Tel Technology,
whether disclosed in written or other tangible form (including on magnetic
media) or by oral, visual or other means, that is transmitted or otherwise
provided by or on behalf of either Party (the "Discloser") to the other Party
(the "Recipient"), or as to which a Recipient otherwise gains access, in the
course of or incidental to the performance of this Agreement, and that should
reasonably have been understood by the Recipient because of legends or other
markings, the circumstances of disclosure or the nature of the information
itself, to be proprietary and confidential to the Discloser, an Affiliate of
the Discloser or to third parties.
DATE DATA - The term "Date Data" means date data or date dependent data,
including without limitation data reflecting values for past or future dates
within the range of January 1, 1990 through December 31, 2030.
DIRECT COSTS - The term "Direct Costs" means ********.
DOCUMENTATION - The term "Documentation" means all or any portion of any
materials in written or other tangible form (including on magnetic media)
including without limitation the following: User Documentation, Source Code,
system summaries, system design, flow charts, functional or technical
specifications, logical models, architectures, plans, instructional training
course materials, other supporting or programming materials, and any
deliverables as identified in, or otherwise delivered pursuant to, any
Statements of Work, and the Specifications..
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ELECTRONIC SELF-HELP - The term "Electronic Self-Help" means the use of
electronic means to enforce a remedy for breach of this Agreement, including
but not limited to means that: (i) retrieve or delete copies of Z-Tel
Deliverables; (ii) prevent or restrict use, performance or functionality of
Z-Tel Deliverables; or (iii) discontinue access to Z-Tel Deliverables.
EXISTING MCI LOCAL STATES - The term "Existing MCI Local States" means
********.
ILEC FEES - The term "ILEC Fees" means ********.
INCUMBENT LOCAL EXCHANGE CARRIER (ILEC) - The term "Incumbent Local Exchange
Carrier" or "ILEC" means, with respect to an area, the local exchange carrier
that (A) on the date of enactment of the Telecommunications Act of 1996,
provided telephone exchange service in such area; and (B)(i) on such date of
enactment, was deemed to be a member of the exchange carrier association
pursuant to Section 69.601(b) of the Federal Communication Commission's
regulations (47 C.F.R. ss. 69.601(b)); or (ii) is a person or entity that, on
or after such date of enactment, became a successor or assign of a member
described in clause (i). References in this Agreement to ILECs do not include
affiliates of RBOCs that provide interexchange services pursuant to Sections
271 and 272 of the Communications Act.
INFORMATION SERVICE - The term "Information Service" shall have the meaning set
forth in Section 3(20) of the Communications Act.
INTELLECTUAL PROPERTY RIGHTS - The term "Intellectual Property Rights" means
all rights in inventions, patents (including xxxxx patents), utility models,
trade marks, service marks, trade names, rights in designs, copyrights of any
kind, rights in know-how, moral rights, rights in confidential information,
industrial secrets and trade secrets, rights in databases, compilation rights
and topography rights and all rights or
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forms of protection of a similar nature or having equivalent or similar effect
to any of these which may subsist anywhere in the world (whether or not any of
these is issued or pending, registered or unregistered, and including, without
limitation, application for registration of any such thing and rights to apply
therefore).
INTERCONNECTION AGREEMENT - The term "Interconnection Agreement" means a
contract (as it may be amended from time to time) by and between Z-Tel and an
ILEC pursuant to which the ILEC, among other things, agrees to sell and provide
to Z-Tel interconnection, unbundled access to network elements and other
services and functions for Z-Tel's use in providing its services.
LAW - The term "Law" means any code, law, ordinance, regulation, reporting or
licensing requirement, rule or statute (as such may be amended from time to
time) applicable to an individual, entity or association or to an individual's,
entity's or association's assets, properties, liabilities or business,
including those promulgated, interpreted or enforced by any regulatory
authority, including any judicial or regulatory interpretation of any of the
same and including the common law.
LOA - The term "LOA" or Letter of Authorization means a subscriber carrier
selection authorization and verification that conforms with applicable law.
LOCAL WHOLESALE SERVICES - The term "Local Wholesale Services" means Telephone
Exchange Service provided by Z-Tel to other carriers for resale to end user
customers and other Telecommunications Services provided by Z-Tel to other
carriers ********.
LW-BASED SERVICES - The term "LW-Based Services" means retail
Telecommunications Services provided to end user customers by MCI and other
carriers that are based upon the Local Wholesale Services.
MCI FUNCTION - The term "MCI Function" means any Ancillary Service that (i) MCI
has undertaken to perform, or agreed to undertake to perform, for itself
pursuant to the Requirements Statement attached hereto as Exhibit 1, or (ii)
MCI has undertaken to have a third-party other than Z-Tel perform, or agreed to
have a third-party other than Z-Tel undertake to perform, for MCI pursuant to
the Requirements Statement. For the avoidance of doubt, MCI Function shall not
include end-user Billing services.
MCI INDEMNITEES - The term "MCI Indemnitees" means collectively, MCI and its
Affiliates, and its and their respective directors, officers, employees,
agents, and distributors pursuant to this Agreement.
MCI MARKS - The term "MCI Marks" means any trademark, service xxxx, trade name
or other similar designation that may be used from time to time by MCI to
identify its commercially available products and services.
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MEMBER-TO-MEMBER BILLING - The term "Member-to-Member Billing" means ********.
OBJECT CODE - The term "Object Code" means the instructions for a computer
assembled or compiled in electronic binary form on software media that are
readable and usable by machines but not generally by humans without reverse
assembly, reverse compiling, or reverse engineering.
OSS PLATFORM -- The term "OSS Platform" means, collectively, all of the
Software, hardware, systems, services, Documentation and other facilities,
information and materials used by or on behalf of Z-Tel ******** from
time to time during the term of this Agreement and any transition period,
********, to provide the OSS services hereunder.
OSS SERVICES - The term "OSS Services" means, collectively, the OSS Platform
and all of the so-called operations support system functionalities, ********
reasonably necessary or desirable to directly or indirectly support delivery by
MCI and its Affiliates of LW-Based Services, Z-Line Enhanced Services, Z-Node
Services or any other Services to their respective end-user customers,
********.
PRIMARY Z-TEL TRIGGERING EVENT - the term "Primary Z-Tel Triggering Event" means
the occurrence of any of the following as to or in regard to Z-Tel and/or any of
its Affiliates engaged in the performance of this Agreement except as may be
caused by MCI's failure to ******** or any undisputed amounts due pursuant to
this Agreement: (i) Z-Tel ceases ongoing business operations or (ii) Z-Tel
becomes Bankrupt or insolvent, makes a general assignment for the benefit of
creditors, has a receiver appointed for its assets, or an order is made for its
winding-up.
PROFESSIONAL SERVICES - The term "Professional Services" means all of those
implementation, configuration, software development and modification, and other
similar tasks, performances, and services along with any resulting Work Product
that the Parties may agree will be provided by Z-Tel and any Z-Tel Personnel to
MCI under this Agreement, are designated as such in a Statement of Work, and as
to which MCI, whether directly through payment against Z-Tel invoices,
indirectly through reimbursement for Direct Costs pursuant to Section 3.1.4 of
this Agreement, or in any other fashion, pays or otherwise reimburses Z-Tel for
the cost of such Professional Services. For the avoidance
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of doubt, a service performed by Z-Tel for MCI shall be a Professional Service
only if designated as such in a Statement of Work.
REGIONAL XXXX OPERATING COMPANY - The term "Regional Xxxx Operating Company"
means (A) any of the following companies: Xxxx Telephone Company of Nevada,
Illinois Xxxx Telephone Company, Xxxxxxx Xxxx Telephone Company, Incorporated,
Michigan Xxxx Telephone Company, New England Telephone and Telegraph Company,
New Jersey Xxxx Telephone Company, New York Telephone Company, U S West
Communications Company, South Central Xxxx Telephone Company, Southern Xxxx
Telephone and Telegraph Company, Southwestern Xxxx Telephone Company, The Xxxx
Telephone Company of Pennsylvania, The Chesapeake and Potomac Telephone
Company, The Chesapeake and Potomac Telephone Company of Maryland, The
Chesapeake and Potomac Telephone Company of Virginia, The Chesapeake and
Potomac Telephone Company of West Virginia, The Diamond State Telephone
Company, The Ohio Xxxx Telephone Company, The Pacific Telephone and Telegraph
Company, or Wisconsin Telephone Company; and (B) includes any successor or
assign of any such company that provides wireline telephone exchange service;
but (C) does not include an affiliate of any such company, other than an
affiliate described in subparagraph (A) or (B).
REGULATORY AUTHORITY - The term "Regulatory Authority" means, as to any subject
matter or individual, association or entity, any court, any governmental,
regulatory or administrative agency, any commission, authority or
instrumentality or any other public body, domestic or foreign, having
jurisdiction over such subject matter or person.
SECONDARY Z-TEL TRIGGERING EVENT - the term "Secondary Z-Tel Triggering Event"
means the occurrence of any of the following as to or in regard to Z-Tel and/or
any of its Affiliates engaged in the performance of this Agreement: (i) except
as may be caused by MCI's failure to ******** or any undisputed amounts due
pursuant to this Agreement, there is a material adverse change in Z-Tel's
financial condition, including but not limited to (a) a material failure to meet
debt covenants which failure is being enforced by the relevant lender or (b) a
default in connection with a failure to make preferred dividend payments; (ii)
Z-Tel's uncured failure to meet the material terms of any SLAs jointly
designated as "Triggering Event SLAs," subject to the limitation of Section
7.2.2.1 of this Agreement; (iii) there is a change of control of Z-Tel; (iv)
********; (v) MCI terminates this Agreement with cause; or (vi) either Party
terminates this Agreement without cause pursuant to Section 7.2.1.
SERVICES - The term "Services" means, collectively, the Local Wholesale
Services, Z-Node Services, Z-Line Enhanced Services, Ancillary Services and any
other services provided or otherwise made available by Z-Tel to MCI pursuant to
this Agreement for any purpose.
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SLA - The term "SLA" means service level agreement.
SOFTWARE - The term "Software" means the instructions for a computer, in Source
Code and Object Code forms, together with all related User Documentation, as
well as all corrections, improvements, updates, versions, releases and other
modifications to any of the foregoing, in whatever form or media, including the
tangible media upon which the foregoing are recorded or printed.
SOFTWARE ENHANCEMENTS- The term "Software Enhancements" means any corrections,
improvements, updates, versions, releases and other modifications to Software.
SOURCE CODE - The term "Source Code" means the underlying instructions for a
computer written in programming languages, including all embedded comments, as
well as procedural code such as job control language statements, in a form
readable by human beings when displayed on a monitor or printed on paper, etc.
and that must be translated using software compilers, linkers, assemblers or
other means into a form that is directly executable by a computer by a process
generally known as compiling or assembly, along with any related Documentation,
including without limitation annotations, flow charts, schematics, statements
of principles of operations, software summaries, software design, program
logic, program listings, functional specifications, logical models and
architecture standards, describing the data flows, data structures, and control
logic of the software.
SPECIFICATIONS - The term "Specifications" means the User Documentation,
technical and functional specifications and Z-Tel sales literature for the
Services, and any other documentation that Z-Tel makes generally available or
has otherwise provided to MCI or an MCI Affiliate, or any Requirements
Statement or any other attachment, exhibit or other portion of this Agreement,
specifically describing the features, functions, performance and/or other
attributes of the Services or any part of the Services, including any Z-Tel Off
Premises Software.
STATEMENT OF WORK OR SOW - The term "Statement of Work" or "SOW" means a
written document, generally in a form to be agreed upon by the Parties, which
is executed by the Parties and which sets forth the additional terms and
conditions governing specific Services, together with all modifications and
supplements thereto, and which, upon such execution, shall become a part of
this Agreement.
TECHNOLOGY ESCROW AGENT - The term "Technology Escrow Agent" has the meaning
set forth in Section 5.3.1.
TECHNOLOGY ESCROW AGREEMENT - The term "Technology Escrow Agreement" has the
meaning set forth in Section 5.3.1.
TECHNOLOGY ESCROW MATERIALS - The term "Technology Escrow Materials" means
copies of all of the then-existing Z-Tel Technology, along with any other
documentation or materials as agreed by the Parties.
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TELECOMMUNICATIONS - The term "Telecommunications" has the meaning set forth in
Section 3(43) of the Communications Act.
TELECOMMUNICATIONS SERVICES - The term "Telecommunications Services" has the
meaning set forth in Section 3(46) of the Communications Act.
TELEPHONE EXCHANGE SERVICE - The term "Telephone Exchange Service" has the
meaning set forth in Section 3(47) of the Communications Act.
USER DOCUMENTATION - The term "User Documentation" means as to Software any
user guides, manuals, operator guides, installation guides, technical reference
manuals, data dictionaries and other similar materials which explain the
operation and/or use thereof and are ********.
WORK PRODUCT - The term "Work Product" means Software code written, created,
conceived, made or discovered by Z-Tel or any Z-Tel Personnel specifically for
MCI in the course of performing any Professional Services pursuant to this
Agreement, which (i) with respect to Professional Services resulting in Work
Product rendered on or after the date hereof, is jointly designated by the
Parties as such in advance, the cost of which is borne entirely by MCI; and
(ii) with respect to Professional Services resulting in Work Product written,
created, conceived, made, or discovered before the date hereof, is set forth on
Exhibit 2 hereto.
Z-LINE ENHANCED SERVICES. The term "Z-Line Enhanced Services" means the Z-Line
Platform and all services using the Z-Line Platform for which MCI bills its
customers (other than the first voice mailbox and related Z-Node Services per
each MCI end-user customer regardless of whether such customer is served via
LW-Based Services). The term "Z-Line Enhanced Service" includes ******** but
does not encompass travel-card usage, which is not provided to MCI by Z-Tel
under this Agreement.
Z-LINE PLATFORM - The term "Z-Line Platform" means, collectively, all of the
Software, hardware, systems, services, Documentation and other facilities,
information and materials used by or on behalf of Z-Tel or any third party from
time to time during the term of this Agreement and any transition period, and
whether licensed, leased, rented or otherwise provided to, owned by, or
otherwise under the control of, Z-Tel or any such third party, to provide the
Z-Line Enhanced Services and/or Z-Node Services hereunder.
Z-NODE SERVICES - The term "Z-Node Services" means the Z-Line Platform and any
proprietary Z-Tel Information Service provided as a vertical feature through
the Z-Line Platform. Z-Node Services may include Voice Mail, Find Me, Address
Book, On-Line Account Maintenance, Notify Me, Communities, e-mail and e-fax,
Web Access and
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Personal Digital Assistant Access. The term "Z-Node Services" does not include
********.
Z-NODE SERVICES FEES - The term "Z-Node Services Fees" means those fees
provided under Section 3.1.3 of this Agreement.
Z-TEL OFF-PREMISES SOFTWARE - The term "Z-TEL Off-Premises Software" means any
Z-Tel Proprietary Software or ******** the Parties reasonably agree to be
reasonably necessary or reasonably useful to be deployed by or through MCI or
another Authorized User other than on the premises of Z-Tel in order to
facilitate access to and/or use of the OSS Services, Z-Node Services, Z-Line
Enhanced Services or any other Services, including without limitation such
Software that is specified from time to time on Exhibit 3 ("Z-Tel Off-Premises
Software") attached hereto or that is otherwise provided by Z-Tel to MCI or
others for such purposes from time to time hereunder.
Z-TEL DELIVERABLES - The term "Z-Tel Deliverables" means the Services, Z-Tel
Technology, Work Product, Z-Tel Proprietary Software, Z-Tel Third Party
Software, Z-Tel Off-Premises Software, license rights granted pursuant to this
Agreement and any other materials, services or information provided, licensed
or otherwise made available by Z-Tel to MCI or any other Authorized Users
pursuant to this Agreement or used by Z-Tel each in order to provide the
Services and otherwise fulfill Z-Tel's obligations hereunder.
Z-TEL PERSONNEL - The term "Z-Tel Personnel" means any and all Z-Tel employees,
agents, and independent contractors, at whatever tier, and the employees,
agents and independent contractors of any such independent contractors,
directly or indirectly supplied or otherwise used by Z-Tel to perform Services
for MCI hereunder.
Z-TEL PROPRIETARY SOFTWARE - The term "Z-Tel Proprietary Software" means all
Software owned by Z-Tel or any Z-Tel Affiliate, in both Object Code and Source
Code forms (unless and to the extent expressly provided to the contrary in a
specific provision hereunder), that is used to provide, or used by MCI or other
Authorized Users to access and use, any of the Services hereunder; provided,
however, that the Z-Tel Proprietary Software shall not include, unless
otherwise expressly agreed by the Parties, any proprietary software development
tools of Z-Tel and/or its Affiliates used by or on behalf of Z-Tel to provide
Professional Services to MCI hereunder.
Z-TEL TECHNOLOGY - The term "Z-Tel Technology" means, collectively, (i) all
Category 1 Software (********), and (ii) all configuration, interface, system
integration, and other data, information and materials ("Technical
Information") owned by Z-Tel necessary to enable MCI (through the use of
reasonably trained technicians, and when used in combination with the
third-party hardware, Software, information, materials, products and services
identified in the Technical Information and procured by MCI), to establish
complete,
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operational systems capable of generating and providing products and
services substantially the same as those provided to MCI by Z-Tel pursuant to
this Agreement and in compliance with the Specifications and other applicable
requirements of this Agreement. ********.
Z-TEL THIRD PARTY SOFTWARE - The term "Z-Tel Third Party Software" means
********.
Z-TELTRIGGERING EVENT - the term "Z-Tel Triggering Event" means either a
Primary Z-Tel Triggering Event or a Secondary Z-Tel Triggering Event.
II. SCOPE OF SERVICES
A. LOCAL WHOLESALE SERVICES
2.1 Local Wholesale Services. At the request of MCI, Z-Tel will provide
Local Wholesale Services to MCI for MCI's use solely in providing retail
Telecommunications Services to MCI's end user customers in accordance with the
Requirements Statement, attached as Exhibit 1, which is incorporated herein.
Any dispute or disagreement between the Requirements Statement and this
Agreement shall be resolved in favor of this Agreement. Z-Tel will provide the
Local Wholesale Services to MCI to substantially the same extent and in
substantially the same manner as Z-Tel provides retail Telecommunications
Services, now or in the future, to its own end user customers, but at a minimum
such Services will be provided at a level appropriate for a nationwide common
carrier class service provider, as described by the SLAs attached as Exhibit 4
and incorporated herein. MCI may not resell the Local Wholesale Services to any
unaffiliated Certificated Carrier.
2.2 Access Fees. As the provider of local switched services, Z-Tel will be
entitled to all access fees charged to interexchange carriers in connection
with interexchange calls made or received by MCI LW-Based services customers.
MCI agrees to pay all undisputed access fees (when MCI is the interexchange
carrier using Z-Tel's local switched services) to Z-Tel thirty (30) days from
the date of Z-Tel's invoice.
2.3 Listing Information. MCI authorizes Z-Tel to release MCI listing
information regarding its end user customers to the ILECs and their publishers
for the purposes of
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publishing directories and providing directory assistance. Z-Tel will not be
liable for the content or accuracy of such listing information. MCI represents
and warrants to Z-Tel that it has and will continue to comply with all
applicable laws relating to this listing information, including but not limited
to CPNI and other related rules and regulations. Each of the Parties agrees to
indemnify and hold the other Party harmless of any and all liability, costs,
fees, fines, assessments, forfeitures, or penalties in the event that the
indemnifying party fails to exercise due care with regard to CPNI or subscriber
list information, or fails to comply with applicable Law related to CPNI and
subscriber list information.
2.4 Subpoenas. MCI authorizes Z-Tel to comply with subpoenas and court
ordered requests delivered directly to Z-Tel for detailed call records when the
targeted telephone numbers belong to MCI customers. MCI will cooperate with
Z-Tel in complying with all such subpoenas and court ordered requests. Z-Tel's
compliance with such subpoenas and court ordered requests is an Ancillary
Service as described herein, unless such subpoenas or court ordered requests
result from Z-Tel's negligent acts, errors, or omissions.
2.5 Lawful Purposes. The Local Wholesale Services are furnished subject to
the condition that they are used for lawful purposes. Z-Tel may discontinue any
LW-Based service that is being used in violation of law; however, Z-Tel shall
bear the expense of any fines, penalties, or damages that result from such
discontinuance and notwithstanding any other provision of this Agreement, shall
not xxxx such fines, penalties or damages to MCI.
2.6. Customer Authorization. Neither MCI nor any of its employees, agents,
representatives or contractors will access, view, record, or copy any LW-Based
customer record without express authorization of the customer or where
otherwise permitted by law. MCI will not submit any inquiries, requests or
orders for service to Z-Tel without legally adequate authorization and
verification of the customer to which such inquiries, requests or orders are
connected. MCI will educate and train its employees, agents, representatives
and contractors as to the requirements of this Section. MCI agrees to indemnify
and hold Z-Tel harmless of any and all liability, costs, fees, fines,
assessments, forfeitures, or penalties in the event that MCI fails to exercise
due care or fails to comply with applicable Law with regard to customer records
or its customer authorization processes, including but not limited to federal
or state "slamming" or "cramming" rules or regulations. Z-Tel agrees to
indemnify and hold MCI harmless for any and all liability, costs, fees, fines,
assessments, forfeitures, or penalties in the event that Z-Tel negligently,
recklessly, or willfully fails to comply with applicable Law with regard to
customer records or its customer authorization processes, including but not
limited to federal or state "slamming" or "cramming" rules or regulations.
However, Z-Tel's total annual combined liability for simple negligence pursuant
to the preceding sentence plus Sections 3.1.1.1 and 4.2.1 of this Agreement
shall not exceed ******** in 2002, ******** per calendar year thereafter.
2.7 Letter of Authorization Requirements. Simultaneously with the
execution of this Agreement, MCI shall execute and deliver to Z-Tel a Blanket
Letter of Authorization
13
("LOA") attached hereto as Exhibit 5. In connection with its use of Services
provided by Z-Tel under this Agreement, MCI will obtain and maintain valid LOAs
or other legally approved methods of authorization from its end user customers.
Such LOAs will be in formats that meet ILEC and federal and state regulatory
requirements, as applicable. MCI will retain all written LOAs and retain tapes
and transcripts or other legally permissible records of all verbal LOAs as
prescribed by federal and state law. MCI will deliver copies of any LOAs or a
statement regarding the availability or unavailability of such LOAs to Z-Tel,
any ILEC or any Regulatory Authority upon request, within the shorter of one
calendar week or one day less than the period of time in which the applicable
ILEC or Regulatory Authority requires that Z-Tel deliver such LOAs. MCI shall
bear the expense of any fines, penalties, or damages that result from its
failure to deliver such LOAs. Z-Tel at its option may participate with the
ILEC's switchback process or refer such claims to MCI for resolution.
2.8 Changes to Local Wholesale Services; Grandfathering. Provided that MCI
has and is continuing to comply with any payment obligations to Z-Tel required
by the terms and conditions of this Agreement, Z-Tel will not have the right to
grandfather, discontinue or withdraw any of the Local Wholesale Services
provided to MCI without MCI's consent, unless Z-Tel is required by applicable
Law to grandfather, discontinue or withdraw any of the Local Wholesale
Services, in which case Z-Tel will provide advance written notice to MCI as
soon as practicable. Except for grandfathering, discontinuation, or withdrawal
required by applicable Law for which no consent is required, Z-Tel will provide
MCI with reasonable notice of proposed grandfathering, discontinuation, or
withdrawing of any of the Local Wholesale Services provided to MCI. MCI's
consent to such changes will not be unreasonably withheld, delayed, or
conditioned. To the extent permitted by applicable Law, Z-Tel will provide
grandfathered Local Wholesale Services to MCI under the same conditions by
which Z-Tel grandfathers services to its own end user customers. Among these
conditions are that the service: (i) will only be available to a customer that
already has the service; (ii) may not be moved to another location; and (iii)
will be available only to the extent facilities are available to provide the
service. Notwithstanding anything else in this Section 2.8, Z-Tel has the
absolute right to modify or reconfigure its method of providing, or network
used to provide, the Local Wholesale Services, provided that there is no
material diminishment in the quality or increase in the cost of the Local
Wholesale Services provided to MCI.
2.9 Promotional Programs Excluded. MCI will not be entitled to participate
in any Z-Tel plan, program or promotion under which Z-Tel customers or
prospective Z-Tel customers may obtain products or services in return for
trying, subscribing to or using any Z-Tel Services, including without
limitation any Z-Tel Telecommunications Service.
2.10 PIC Selection. MCI shall be responsible for inputting its customers'
choices of pre-subscribed interexchange carriers.
2.11 Service Level Commitments. Z-Tel will provide the Local Wholesale
Services in accordance with the SLAs set forth in Exhibit 4.
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B. Z-NODE SERVICES
2.12 Z-Node Services. At the request of MCI, Z-Tel will provide to MCI for
MCI's use to serve its LW-Based end-user customers, the Z-Node Services used by
Z-Tel as of the date of execution of this Agreement in connection with
providing telecommunications services to Z-Tel's own end-user customers. As
part of such Z-Node Services, Z-Tel will offer to MCI so that MCI may offer to
each MCI end-user customer receiving LW-Based Services one voice mailbox and
related Z-Node Services (the "LW-Based Customer Voice Mailbox"). The LW-Based
Customer Voice Mailbox ********. In addition, at the request of MCI, Z-Tel will
make one voice mailbox available to MCI for any existing or future non-LW-based
MCI end-user local customers (the "Non-LW-Based MCI End-User Voice Mailbox.").
Each Non-LW-Based MCI End User Voice Mailbox ********. Where Z-Tel provides
such other Z-Node Services that MCI may from time to time request, such other
Z-Node Services, including additional voice mailboxes (aside from the LW-Based
Customer Voice Mailbox or the Non-LW-Based MCI End-User Voice Mailbox),
********. Z-Tel will also provide to MCI, on terms to be agreed upon between
the Parties after negotiations, which both Parties agree to pursue in good
faith, any Z-Node Services not used as of the date hereof by Z-Tel in
connection with providing telecommunications services to its own end-user
customers which Z-Tel may develop in the future.
2.13 Toll-Free Access. In the event that MCI uses toll-free numbers in
connection with providing access to the Z-Node Services to its end user
customers (for example, by providing a toll-free number for Z-Node customers to
access voice mail and other services), MCI shall be responsible for (i)
assigning such toll-free number and (ii) selecting the interexchange carrier
serving such toll-free number.
2.14 Service Level Commitments. Z-Tel will provide the Z-Node Services in
accordance with the SLAs set forth in Exhibit 4.
C. ANCILLARY SERVICES
2.15 Ancillary Services. At the request of MCI, Z-Tel will perform for MCI
all ******** and any Ancillary Service, but only to the extent that (i)
Z-Tel uses such Ancillary Service in the ordinary course of providing
Telecommunications Services to Z-Tel's own end user customers, (ii) MCI
pre-approves the Direct Cost of providing such services, and (iii) such
Ancillary Service is not an MCI Function. For the avoidance of
15
doubt, Z-Tel may, but shall have no obligation to, perform any Ancillary
Service that is an MCI Function.
III. BILLING AND PAYMENT ARRANGEMENTS
3.1 Fees
3.1.1 Fees for Local Wholesale Services. MCI shall pay Z-Tel a fee
for Local Wholesale Services provided under Section 2.1 of this Agreement equal
********.
********.
********.
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********.
********.
3.1.1.4 Least Cost Provisioning. To the extent that Local Wholesale
Services can be provided to MCI consistent with the terms of this Agreement and
all of its terms, including all SLAs, with no distinction in the quality of
LW-Based Services, by means of two or more different provisioning methods,
Z-Tel shall use reasonable efforts to provision using the least cost method.
3.1.2 Software Licensing Fees and Line Fees
3.1.2.1 Software Licensing Fees. As compensation for the Use
License (as defined in Section 5.1), Off-Premises Software License, and
Technology License granted in Section 5 hereof, MCI will pay to Z-Tel fees in
the amount of ********, per month ("Software Licensing Fees"). These
Software Licensing Fees will be paid for all of MCI's end user customer lines,
including residential and small business lines, provisioned to use MCI's
LW-Based Services and active for at least 14 days during a month, or being
provided any service by MCI or its Affiliates that uses the Use License (as
defined in Section 5.1), Off-Premises Software License, or Technology License,
including the Z-Node Services, for at least 14 days during a month.
Notwithstanding the foregoing, the Software License Fees will not apply to
residential end-user customer lines in the Existing MCI Local States. During
the first contract year of this Agreement the Software Licensing Fees payments
will not exceed $24 million. To the extent Software Licensing Fees calculated
as set forth above would exceed $24 million during the first contract year of
this Agreement such excess amounts will be carried forward to the following
year and paid in 12 equal monthly installments. The cumulative Software
Licensing Fees incurred by MCI and paid to Z-Tel by the date this Agreement
terminates shall in no event be greater than $50 million.
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3.1.2.2 Line Fees. In addition to the Software Licensing
Fees, MCI will pay to Z-Tel fees in the amount of ******** per month for
********, ******** per month ********, and ******** per month for any additional
lines ("Line Fees"). These Line Fees will be paid for all of MCI's end user
customer lines, including residential and small business lines, provisioned to
use MCI's LW-Based services and active for at least 14 days during a month, or
being provided any service by MCI or its Affiliates that uses the Use License
(as defined in Section 5.1), Off-Premises Software License, or Technology
License, including the Z-Node Services. Unlike the Software Licensing Fees, the
Line Fees will apply to all such lines regardless of location. For the avoidance
of doubt, this Section does not survive termination of this Agreement other than
during Z-Tel's performance under Section 7.2.3 of this Agreement, and,
notwithstanding any other provision of this Agreement, Z-Tel shall have no
obligation to provide any maintenance or support for any Z-Tel Technology or
other Software provided under this Agreement after termination of this
Agreement, other than as may be required under Section 7.2.3 of this Agreement.
3.1.2.3 Minimum and Maximum Software Licensing Fees and Line
Fees. Beginning on the later of March 1, 2002 or the first day of the first
calendar month after the date of this Agreement, the total amount to be paid by
MCI to Z-Tel for Software Licensing Fees plus Line Fees will be not less than
$1.5 million per month. This provision will expire once total Software
Licensing Fees reach the $50 million maximum provided in Section 3.1.2.1. Any
"gross-up" amount added to reach the $1.5 million monthly minimum (that is, the
amount by which the minimum fees exceed the calculated fees) will be treated as
a prepayment against future monthly Software Licensing Fees and will thus count
toward the $50 million maximum Software Licensing Fees. To the extent that the
Software License Fees and Line Fees do not exceed the $1.5 million minimum,
Z-Tel still shall inform MCI of the amount of the $1.5 million attributable to
Software Licensing Fees and Line Fees.
3.1.3 Z-Node Services Fee. MCI shall pay Z-Tel a fee equal to the
number of minutes MCI customers are connected to the Z-Line Platform multiplied
by the Rate per Minute as shown on the following table:
Minutes per Month Rate per Minute
----------------- ---------------
First ******** million ********
Next ******** million ********
Additional minutes ********
********.
3.1.4 Ancillary Services Fee. MCI shall pay to Z-Tel a fee equal to
the ********.
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3.1.5 Revenue Sharing For Z-Line Enhanced Services. In addition to
the other fees provided in this Agreement, MCI will pay to Z-Tel ******** of
the ******** for any Z-Line Enhanced Services, payable forty-five (45) days in
arrears of billing. For this purpose ********. The Parties shall provide each
other with the necessary reports to determine such ********, and MCI will then
provide to Z-Tel either a monthly accounting of such ******** along with the
appropriate payments or a certification that ********. Notwithstanding any
other provision of this Agreement, MCI may not use the Z-Line Platform for
travel-card usage; however, the Parties agree to conduct technical evaluations
and good-faith negotiations on this subject in the future. Notwithstanding any
other provision of this Agreement, revenue MCI obtains from its end-user
customers solely as non-usage-based fees for ******** shall be excluded from
the calculation of gross revenue under this Section 3.1.5, as well as any
******** expenses.
3.2 Billing.
3.2.1 Billing Periods for Z-Tel's Bills to MCI. Excepting ********
and unless otherwise stated herein, Z-Tel will calculate and xxxx all fees
provided under this Agreement on a monthly basis. Each monthly billing period
shall run from the 1st of a calendar month to the last day of that calendar
month.
3.2.2 ********.
3.2.2.1 No Withholding of ******** Fees. MCI shall not
withhold, in whole or in part, payment of any xxxx for ******** Fees for any
reason, and MCI hereby expressly waives any right it may otherwise have to do
so. MCI may raise any challenge
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to any xxxx for MCI ******** Fees as a Billing Dispute. MCI's obligation not to
withhold payment of any xxxx for MCI ******** Fees is a material term of this
contract, the breach of which is likewise material.
3.2.2.2 Suspension of Service if ******** Fees are Withheld.
If MCI fails, for any reason, to pay the full amount of any xxxx for MCI
******** Fees when due, Z-Tel's duty to perform its obligations under this
Agreement shall be suspended until one (1) business day after it receives the
invoiced MCI ******** Fees. Z-Tel's right to suspend service under this Section
3.2.2.2 shall be in addition to and not in lieu of any other remedies available
to it under this Agreement and under applicable Law.
3.2.2.3 Immediate Recourse to Court if ******** Fees are
Withheld. Notwithstanding any other provision of this Agreement, if Z-Tel is
aggrieved by MCI's failure, for any reason, to pay the full amount of any xxxx
for MCI ******** Fees when due, Z-Tel may immediately initiate an action in the
U.S. District Court for the Middle District of Florida or the Circuit Court in
and for Hillsborough County, Florida. In any such action by Z-Tel seeking
temporary or preliminary injunctive relief, MCI waives and agrees not to assert
any defense or position other than a) it has not received the xxxx for MCI
******** Fees at issue or b) it has paid the full amount demanded in every xxxx
for MCI ******** Fees that it has received; provided, however, that such waiver
is without prejudice to MCI's right to raise any valid claim in an action
against Z-Tel for money damages or MCI's right to raise any defenses in an
action by Z-Tel for money damages. Notwithstanding any other provision of this
Agreement, if such Court finds that MCI has withheld in whole or in part,
payment of any xxxx for MCI ******** Fees in violation of subsection 3.2.2.1 of
this Agreement, 1) Z-Tel shall have the right to seek temporary, preliminary,
and/or permanent injunctive relief, and 2) MCI shall pay the entirety of the
court costs and reasonable attorneys' fees incurred by Z-Tel in investigating,
preparing, and carrying out the litigation, regardless of the resolution of the
Billing Dispute or any other issue in dispute. Z-Tel's rights to immediate
recourse to court, equitable relief, litigation expenses, and damages under
this Section 3.2.2.4 shall be in addition to and not in lieu of any other
remedies available to it under this Agreement and under applicable Law.
3.2.2.4 De Minimis Delay Excepted. None of Z-Tel's rights
pursuant to Sections 3.2.2.2 or 3.2.2.3 may be exercised on the basis of a
delay in MCI's full payment of MCI ******** Fees of two business days or less.
3.2.2.5 Monthly Telco Audit and Cost-Containment Efforts.
Z-Tel shall provide to MCI a Monthly Telco Audit report that details (1) the
amount of ********, (2) any new disputes filed (including a description of the
basis of the dispute, the billing accounts and time periods affected and the
amount of dispute), (3) the status of all pending, prior disputes, and (4) all
disputes that were settled during the reporting period (including a description
of the amounts sustained versus denied, the billing affected and the usage
period or invoice dates covered by the claim and settlement); provided,
however, that the expense of such Monthly Telco
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Audit shall be ********. At MCI's request, MCI and Z-Tel will conduct quarterly
cost review meetings to discuss the status of pending disputes, new dispute
opportunities, and comparisons of the amount billed to MCI versus the amount of
actual ******** xxxxxxxx. Z-Tel and MCI will work cooperatively together to
identify, dispute, and obtain credit for any ******** that are in excess of
********.
3.2.2.6 ********.
3.2.3 Billing Other Fees. Z-Tel shall xxxx MCI on a monthly basis
separately for each of the following: ********, Software Licensing Fees, Line
Fees, Z-Node Services Fees, and any other charges pursuant to this Agreement.
All ********, which may be done by blanket or category approvals with the
agreement of the Parties. MCI shall pay all undisputed fees and costs within 30
days of receipt. MCI will make such payments via wire transfer to an account
designated by Z-Tel. Z-Tel will include all necessary supporting documentation
or information with its bills, including but not limited to the items listed in
Exhibit 7. As part of this payment, MCI may set-off or recoup any amounts Z-Tel
or its Affiliates owe to MCI or its Affiliates pursuant to this or any other
agreement with Z-Tel, provided that a) MCI may not for any reason set off,
recoup, or withhold in any manner ********, b) such set off, recouped, or
otherwise withheld amounts are undisputedly due under the terms of such
agreements, c) such set off, recouped, or otherwise withheld amounts are more
than sixty (60) days past due, and d) the total amount set off, recouped, or
otherwise withheld in any manner or for any reason shall not, for any month,
exceed 50% of the other fees billed by Z-Tel to MCI under this Section 3.2.3.
21
3.2.4 Billing Media Copies. If MCI requests multiple billing media
or additional copies of bills, Z-Tel will provide these to MCI at its actual
costs.
3.3 Billing Disputes
3.3.1 Notice. A Party wishing to raise a Billing Dispute shall
notify the other party in writing of such dispute within thirty (30) business
days of discovery of such dispute. Payment of any amount does not constitute a
waiver of any Parties' rights to initiate a Billing Dispute.
3.3.2 Dispute Resolution. The Parties will use reasonable efforts
to resolve Billing Disputes within thirty (30) calendar days of written notice
of the dispute. Billing Disputes shall be resolved in accordance with the
dispute resolution procedures in Section 7.27 of this Agreement.
3.3.3 Other Non-Payment Remedies. Nothing herein alters or modifies
any obligation of any Party to pay an undisputed obligation pursuant to this
Agreement. In the event MCI fails to make any undisputed payment when due,
Z-Tel may, in addition to any other remedies not prohibited by this Agreement,
(i) cease accepting and processing orders for new Telecommunications Services
from MCI customers; (ii) suspend providing Telecommunications Services, Z-Node
Services, Ancillary Services, and any other services to MCI; (iii) cease
delivery of reports to MCI.
3.4 Back Billing. Notwithstanding anything to the contrary contained in
this Agreement, MCI will pay any ******** Fees charged to Z-Tel or other
******** without regard to whether this Agreement has expired or been
terminated, rescinded or cancelled, to the extent Z-Tel is obligated to pay
such fees and such fees are related to services provided to MCI by Z-Tel during
the term of the Agreement. Correspondingly, Z-Tel will ******** without regard
to whether this Agreement has expired or been terminated, rescinded or
cancelled.
3.5 Prepayments. MCI's "prepayments" pursuant to the Letter of Intent
executed on November 20, 2002, totaling $3,782,577, will be deemed to be
Software Licensing Fees for the purposes of Section 3.1.2.1 of this Agreement
and thus subject to the limits set forth herein and shall be included in the
$50 million maximum payment. The $3,782,577 total amount of such prepayments
will be credited to MCI's monthly Software Licensing Fee, in equal monthly
amounts for each monthly invoice issued for 2002, even if such credit has the
effect of reducing the $1.5 million minimum payment.
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IV. CONFIDENTIAL INFORMATION; REPRESENTATIONS AND
WARRANTIES
4.1 Confidential Information
4.1.1 Confidential Information. The Parties agree that the terms
and conditions of this Agreement and the details of its performance constitute
Confidential Information owned jointly by the Parties and neither Party shall
publicize this Confidential Information by way of news releases, public
announcements, advertising, marketing brochures or other similar materials,
speeches or any other information releases, whether or not such disclosures
reference the other Party or its Affiliates by name, by description or
otherwise, without the prior written approval of the other Party. All Work
Product shall be deemed Confidential Information as agreed upon in the
applicable SOW, and Z-Tel shall designate by appropriate markings all Work
Product as Confidential Information of MCI upon its generation, replication or
internal dissemination.
4.1.2 Limitations on Use and Disclosure. Each Party agrees as to
any Confidential Information received hereunder:
(i) to protect such Confidential Information from
disclosure to others using the same degree of care used to protect its own
confidential or proprietary information of like importance, but in any case
using no less than a reasonable degree of care, provided that Recipient may
disclose Confidential Information received to its employees and independent
contractors, and to its Affiliates and their respective employees and
independent contractors, who in each or the foregoing instances have a need to
know for the purpose of this Agreement, and who are further bound to protect
the received Confidential Information from unauthorized use and disclosure
under the terms of a written agreement (including a pre-existing written
agreement). MCI, its Affiliates and its and their agents (including marketing
agents) shall further be entitled to disclose the Confidential Information of
Z-Tel received hereunder, but again subject to a written agreement protecting
such Confidential Information from unauthorized use and disclosure (including a
pre-existing written agreement), to their respective end users of the Services
and other Authorized Users and prospective end users of the services and other
Authorized Users and to the respective employees, independent contractors and
agents of any of the foregoing, who have a need to know in connection with the
use or prospective use of the Services or otherwise in connection with the
purposes of this Agreement. Confidential Information shall not otherwise be
disclosed to any third party without the prior written consent of the
Discloser;
(ii) to use such Confidential Information only for the
purposes of this Agreement or as otherwise expressly permitted by this
Agreement or by the Discloser in writing; and
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(iii) except as otherwise expressly provided herein, to make
only such number of copies of Confidential Information as is reasonably
required in connection with Recipient's permitted use under this Section 4.1
and to reproduce and maintain on any such copies such proprietary legends or
notices (whether of Discloser or a third party) as are contained in or on the
original or as Discloser may otherwise reasonably request.
4.1.3 Exceptions. The restrictions of this Section 4.1 shall not
apply to information that:
(i) was publicly known prior to, or becomes publicly
known through no fault of Recipient subsequent to, Discloser's communication
thereof to Recipient;
(ii) was in Recipient's possession free of any obligation
of confidence at the time of Discloser's communication to Recipient;
(iii) is developed by Recipient independently of and
without use of any of Discloser's Confidential Information or other information
that Discloser disclosed in confidence to any third party; or
(iv) is rightfully obtained by Recipient from third
parties authorized to make such disclosure without restriction.
4.1.4 Disclosure Pursuant to Legal Requirement or for Regulatory
Purpose. Confidential Information may be disclosed to the extent required by
Law, including but not limited to the extent reasonably required to protect
against liability under federal securities laws. Subject to the disclosure
provisions described in this Section 4.1.4, the existence, terms, and
performance of this Agreement may also be disclosed to the Federal
Communications Commission (FCC) or state public utility commissions (PUCs) for
purposes not inconsistent with the terms of this Agreement or as otherwise
agreed upon by the Parties. Except as provided for in Sections 2.4 and 7.23,
the Party so intending to disclose shall a) attempt in good faith to notify the
other Party at least one business day prior to making any such disclosure where
feasible, b) further reasonably cooperate in any efforts of the other Party to
seek a protective order or other appropriate remedy from the proper authority,
c) furnish only that portion of the Confidential Information that is legally
required or reasonably necessary to release to the FCC or a PUC for purposes
not inconsistent with the terms of this Agreement or as otherwise agreed upon
by the Parties, and d) further use all reasonable efforts to assure
confidential treatment of the disclosed Confidential Information.
4.1.5 Return of Confidential Information. Confidential Information
shall be and remain the property of Discloser. All Confidential Information in
electronic form shall be erased or destroyed, and all such information in
tangible form, shall, at the discretion of Recipient, either be destroyed or
returned to the Discloser promptly upon the earlier of: (i) Discloser's written
request, (ii) discontinuation of the particular Service in connection with
which the Confidential Information was disclosed, or (iii) termination or
expiration
24
of this Agreement and any transition period, and in any of such events and to
the applicable extent shall not thereafter be retained in any form by Recipient
unless otherwise expressly permitted hereunder; provided, however, that
notwithstanding the foregoing and for the avoidance of doubt, MCI shall be
entitled to retain and use (and disclose as otherwise permitted by this Section
4.1) any Confidential Information of Z-Tel subsequent to the occurrence of any
of the events described in Subitems (i) through (iii) to the extent and for so
long as the same has been licensed to MCI and its Affiliates, or is in any
event reasonably required to be used in connection with, their respective
exercise of any licenses granted to MCI and its Affiliates pursuant to, and
which survive the expiration or termination of, this Agreement. For the
avoidance of doubt, each Party is also expressly permitted to retain this
Agreement.
4.1.6 Equitable Relief. The Parties acknowledge that their
respective Confidential Information is unique and valuable, and that breach by
either Party of the obligations of this Agreement regarding such Confidential
Information will result in irreparable injury to the affected Party for which
monetary damages alone would not be an adequate remedy. Therefore, the Parties
agree that in the event of a breach or threatened breach of such provisions,
the affected Party shall be entitled to specific performance and injunctive or
other equitable relief as a remedy for any such breach or anticipated breach
without the necessity of posting a bond. Any such relief shall be in addition
to and not in lieu of any appropriate relief in the way of monetary damages.
Nothing in this Section shall be deemed or construed to modify the preclusion
of the availability of emergency or other expedited equitable relief to Z-Tel
set forth in Section 5.3.7.
4.1.7 Survival. The provisions of this Section 4.1 shall survive
the expiration or any earlier termination of this Agreement for a period of
five (5) years.
4.2 Warranties and Representations of Z-Tel.
4.2.1 General Warranties. Z-Tel hereby represents and warrants to
MCI as follows.
A. No Contravention. The execution and delivery of this
Agreement, the performance by Z-Tel of its obligations under this Agreement
(provided, however, that, as appropriate or necessary, the board of directors
of Z-Tel Technologies, Inc. approves the issuance of the Shares required to be
issued pursuant to Section 6.1), and the exercise by Z-Tel of the rights
created by this Agreement do not (i) violate Z-Tel's Articles of Incorporation
or bylaws; (ii) constitute a breach of or a default under any agreement or
instrument to which Z-Tel is a party or by which it or its assets are bound or
result in the creation of a mortgage, security interest or other encumbrance
upon Z-Tel's assets; (iii) violate a judgment, decree or order of any court or
Regulatory Authority which is binding on Z-Tel or its assets; or (iv) violate
any Law.
B. Valid, Binding and Enforceable Agreement. This
Agreement is a valid and binding obligation of Z-Tel enforceable against Z-Tel
under Law.
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C. Interconnection Agreements. Z-Tel's Interconnection
Agreements (and other agreements that Z-Tel may have with ILECs) do not
prohibit Z-Tel from providing to MCI and MCI's end user customers the Local
Wholesale Services and other Services contemplated by this Agreement.
D. Power and Authority. Z-Tel has the full power and
authority to sell, convey, license, deliver and make available the Z-Tel
Deliverables sold, conveyed, licensed, delivered or otherwise made available
pursuant to this Agreement.
E. Financial and Operational Capability. Z-Tel has the
financial and operational capability of providing, and will in fact provide,
the Services contemplated by this Agreement in accordance with the terms of
this Agreement, including the requirements set forth in the SLAs, the
Requirements Statement or any applicable SOW. Z-Tel shall provide MCI with such
information as MCI may reasonably request in order to demonstrate such
capabilities, including access to Z-Tel's creditors and auditors. Z-Tel also
has the ability to provide MCI with the Shares in accordance with Section 6 of
this Agreement, and that the fulfillment of its duties under Section 6 does not
breach or conflict with any existing obligations to third parties.
F. Interconnection and Other Agreements. Subject to the
further representations and warranties set forth in this Agreement, Z-Tel has
provided to MCI reasonable access to, and will continue to provide to MCI
reasonable access to, true and complete copies of all applicable
Interconnection Agreements, and ********.
G. Billing Warranty. Z-Tel warrants that it will abide
by all federal and state regulations and interconnection agreement terms in
********, into bills for MCI customers served via LW-Based Services. Should
Z-Tel negligently, recklessly or willfully fail to meet these obligations, then
to the extent that ********, regulatory body, court or ******** submits a claim
or imposes a fee or penalty or orders MCI or Z-Tel to pay past due amounts
(including interest) associated with failure to comply with such regulations
and terms, Z-Tel shall be solely responsible for any such fees, penalties, or
past-due amounts both retroactively and prospectively. However, Z-Tel's total
annual combined liability for simple negligence pursuant to the preceding
sentence plus Sections 2.6 and 3.1.1.1 of this Agreement shall not exceed
******** in 2002, ******** per calendar year thereafter, and such amounts shall
not be considered ******** or Ancillary Costs.
4.2.2 Functional and Performance Warranties. Z-Tel represents and warrants
to MCI as follows:
A. No Electronic Self-Help or Automatic Restraints. No
portion of any Category 1 Software or Work Product included in any Z-Tel
Deliverable will, and Z-Tel will make commercially reasonable efforts to ensure
that no portion of any Category
26
2 Software, Category 3 Software, or Category 4 Software included in any Z-Tel
Deliverable will:
(i) Facilitate Electronic Self-Help or operate
as an Automatic Restraint;
(ii) Stop, limit, or interfere with the
operation of any Z-Tel Deliverable at some specific time or upon a specific
instruction or event, or the presence or absence of a direct or indirect signal
from Z-Tel or Z-Tel's agents or ********; or
(iii) Damage or materially alter or render
inaccessible any data resident in a Z-Tel Deliverable or in other hardware or
software that interfaces with the Z-Tel Deliverable.
B. Date Data. No portion of any Category 1 Software or
Work Product included in any Z-Tel Deliverable will, and Z-Tel will make
commercially reasonable efforts to ensure that no portion of any Category 2
Software, Category 3 Software, or Category 4 Software included in any Z-Tel
Deliverable will cease to function, malfunction or experience interruption
because of the receipt, storing, processing or transmitting of Date Data,
rather than compute and produce accurate and unambiguous Date Data;
C. No Viruses. No portion of any Category 1 Software or
Work Product included in any Z-Tel Deliverable contains or will contain, and
Z-Tel will make commercially reasonable efforts to ensure that no portion of
any Category 2 Software, Category 3 Software, or Category 4 Software included
in any Z-Tel Deliverable contains or will contain any computer viruses at the
time of delivery, and prior to delivery Z-Tel took or will take reasonable
precautions to ensure that the Z-Tel Deliverables to be delivered to MCI were
or will be free of computer viruses, such precautions including, without
limitation, the use of up-to-date, industry standard virus checking software.
D. Maintenance and Support. The maintenance and support
provided hereunder shall be performed in a professional and workmanlike manner
and in conformity with the professional standards for comparable services in
the industry, and shall comply with the applicable Specifications or other
requirements set forth in this Agreement, including without limitation any
applicable SOW. In the event of a breach of the warranty set forth in this
Section 4.2.2.D, Z-Tel shall immediately correct any error in the Z-Tel
Deliverable and redeliver the same to MCI, where available, all at no
additional cost to MCI.
E. Professional Services. The Professional Services and
associated Work Product provided hereunder shall be performed in a professional
and workmanlike manner and in conformity with the professional standards for
comparable services in the industry, shall be free of defects in design and
materials, and shall comply with the applicable Specifications set forth in
this Agreement, including without limitation those
27
contained in any applicable SOW. MCI must notify Z-Tel as to any breach of the
foregoing warranty as to specific Work Product within ninety (90) from the
later of the delivery of such Work Product to MCI or the period of time for
such notification specified in the SOW.
F. Media. The tapes, diskettes or other media on which
any Category 1 Software, Category 2 Software, or Work Product are delivered to
MCI pursuant to this Agreement will be free from defects in materials and
workmanship for a period of ninety (90) days from delivery.
G. Z-Tel Off-Premises Software. The Z-Tel Off-Premises
Software will comply with the applicable Specifications of this Agreement for a
period of ninety (90) days from the date of delivery by or on behalf of Z-Tel
to MCI and/or other Authorized User hereunder.
4.2.3 Intellectual Property Rights and Licensing-Related
Warranties. Z-Tel represents and warrants to MCI as follows:
********.
********.
C. Z-Tel Technology. The Z-Tel Technology licensed and
provided to MCI pursuant to the Technology License is a full, complete and
accurate copy of such
28
data, information and materials in the possession of Z-Tel and is sufficient to
enable MCI, through the use of reasonably trained technicians, and when used in
combination with the other hardware, Software, information, materials, products
and services further identified in the Z-Tel Technology, to establish complete,
operational systems capable of generating and providing products and services
substantially the same as those provided to MCI by Z-Tel pursuant to this
Agreement and in compliance with the Specifications and other applicable
requirements of this Agreement.
D. No Adverse Claims. As of the Effective Date, to
Z-Tel's knowledge, there exist no adverse claims to or in any Z-Tel
Deliverables being provided, licensed or otherwise made available hereunder, or
any portion thereof.
E. Quiet Enjoyment. Z-Tel shall make reasonable efforts
to ensure that MCI shall have quiet enjoyment of all license rights conveyed
under this Agreement, including without limitation the right to receive
maintenance and support services, notwithstanding any dispute between MCI
and/or its Affiliates and Z-Tel or any dispute between MCI and/or its
Affiliates and any third party related to intellectual property provided under
this Agreement.
4.2.4 Remedies for Breach of Warranties. Z-Tel, at no additional
cost to MCI, shall, within fifteen (15) days after notice from MCI, correct or
replace any Z-Tel Deliverable not in compliance with any of the warranties set
forth in Section 4.2.2 above or otherwise remedy the breach, and as applicable
redeliver the affected Z-Tel Deliverable while still providing the same
functional capabilities and performance characteristics and otherwise complying
with all of such warranties and the other requirements of this Agreement,
including without limitation any applicable SLAs, Specifications and SOWs. In
the event that Z-Tel cannot reasonably make such correction or replacement
within fifteen (15) days after notice from MCI, Z-Tel shall within fifteen (15)
days after such notice (i) present a plan to MCI describing how Z-Tel will
attempt to make such correction or replacement, such plan to be subject to
MCI's approval, and such approval not to be unreasonably withheld, (ii)
indemnify, defend, and hold harmless MCI against any third-party claims
alleging facts and circumstances that would, if true, constitute a breach of
the warranties set forth in Section 4.2.2 above, and (iii) proceed to implement
such plan within the timeframe established in the plan. Should Z-Tel fail to
comply with this Section 4.2.4, MCI shall be entitled to terminate without
liability any affected SOWs or Professional Service orders and to receive,
without offset of any kind, a refund of fees and Direct Costs reasonably
related to the breach paid by MCI to Z-Tel in connection with any such
non-complying Z-Tel Deliverable. The foregoing remedies shall be in addition
to, and not in lieu of, any otherwise available rights or remedies for the
breach of such warranties that MCI may have pursuant to this Agreement or
otherwise at law or in equity. During the applicable Warranty Period, MCI may
return defective media to Z-Tel and it will be replaced without charge within
ten (10) business days of receipt by Z-Tel. 4.3 Representations and Warranties
of MCI. MCI hereby represents and warrants to Z-Tel as follows:
4.3 Representations and Warranties of MCI. MCI hereby represents and
warrants to Z-Tel as follows:
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4.3.1 No Contravention. The execution and delivery of this
Agreement, the performance by MCI of its obligations under this Agreement and
the exercise by MCI of the rights created by this Agreement do not (i) violate
MCI's Articles of Incorporation or bylaws; (ii) constitute a breach of or a
default under any agreement or instrument to which MCI is a party or by which
it or its assets are bound or result in the creation of a mortgage, security
interest or other encumbrance upon MCI's assets; (iii) violate a judgment,
decree or order of any court or Regulatory Authority which is binding on MCI or
its assets; or (iv) violate any Law.
4.3.2 Valid, Binding and Enforceable Agreement. This Agreement is a
valid and binding obligation of MCI enforceable against MCI under Law.
4.3.3 Authorizations. MCI validly holds all authorizations and
permits required to be obtained from any Regulatory Authority in order provide
the LW-Based Services and any other services contemplated under this Agreement
to be provided to MCI's end user customers, and such authorizations and permits
are and will continue to be in full force and effect.
4.3.4 Compliance. MCI will provide the LW-Based Services and Z-Node
Services in compliance with all applicable Law.
4.3.5 Third-Party Vendors.
********.
********.
30
such instructions, requirements, or restrictions. For the avoidance of doubt,
this Section is subject to the limitation on liability provided in Section 7.3
of this Agreement.
4.4 Survival of Warranties and Representations. The warranties and
representations in this Agreement will survive the termination of this
Agreement and continue without limitations.
4.5 Z-Tel Third Party Vendors.
4.5.1. Representation and Warranty as to ********. In
addition to the representations and warranties of Z-Tel set forth in Section
4.2, but without limiting the generality of Section 4.2.1(F), Z-Tel further
represents and warrants that as of the Effective Date (i) it ********; (ii)
all of such agreements and other contractual arrangements are in full force and
effect as of the Effective Date; and (iii) Z-Tel shall make best efforts to
provide to MCI at least thirty (30) days prior written notice in reasonable
detail as to any prospective material change as to any of such agreements and
other contractual arrangements, including without limitation any anticipated
termination or expiration, during the term of this Agreement and any transition
period hereunder.
********.
4.5.3 Special Indemnification.
********
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********. MCI or any MCI Affiliate, as the case may be, will notify Z-Tel
promptly in writing of any Claim for which MCI or any MCI Affiliate alleges
that Z-Tel is responsible under this Section 4.5.3 and tender the defense of
such Claim to Z-Tel. MCI or any MCI Affiliate, as the case may be, also will
cooperate in every reasonable manner with the defense or settlement of such
Claim and give Z-Tel sole control of the defense of the Claim and all
negotiations for the compromise or settlement thereof; provided, however, that
Z-Tel must consult with MCI or any MCI Affiliate, as the case may be, prior to
settling any Claim, and Z-Tel cannot bind MCI or any MCI Affiliate or
materially prejudice MCI or any MCI Affiliate without MCI's or any MCI
Affiliate's prior written consent, such consent not to be unreasonably
withheld. Z-Tel will keep MCI or ant MCI Affiliate, as the case may be,
reasonably and timely apprised of the status of the Claim. MCI or any MCI
Affiliate, as the case may be, will have the right to retain its own counsel,
including in-house counsel, at its expense, and participate in but not direct
the defense. Z-Tel will not be liable under this Section 4.5.3 for settlements
or compromises by MCI or any MCI Affiliate of any Claims unless Z-Tel has
approved the settlement of a Claim that has been tendered to Z-Tel in writing
or Z-Tel has failed to timely undertake the defense.
********.
V. LICENSES; INTELLECTUAL PROPERTY RIGHTS; PROFESSIONAL
SERVICES; AND INFRINGEMENT INDEMNITY
5.1 License to Access and Use OSS Platform, OSS Services, Z-Line Platform,
Z-Node Services, Z-Line Enhanced Services and Any Other Services for the
Purpose of
32
Marketing, Selling and Using Z-Tel Services.
5.1.1 Use License Grant.
********.
5.1.2 License to Use Z-Tel Off-Premises Software.
********.
B. Delivery. Z-Tel shall, within five (5) days after
the Effective Date, deliver the Z-Tel Off-Premises Software specified in
Exhibit 3 attached hereto to MCI (and such other Authorized Users as may be
specified by MCI) at such facilities, in such media and by such means as are
reasonably requested by MCI. Z-Tel and MCI may mutually agree to delivery by
Z-Tel of any additional or new Z-Tel Off-Premises Software to MCI
33
pursuant to such schedule, at such facilities, in such media and by such means,
all as are agreed to by the Parties.
5.1.3 Restrictions on Z-Tel Off-Premises Software.
A. MCI will not and will not permit its officers,
Affiliates, employees, or agents, to translate, update, enhance, modify,
reverse engineer, decompile, recompile, disassemble, or make derivative works
of the Z-Tel Off-Premises Software provided to MCI in Object Code form pursuant
to the Z-Tel Off-Premises Software License.
B. Except as otherwise provided herein or with Z-Tel's
prior consent in writing, which consent shall not be unreasonably withheld,
delayed or conditioned, MCI will not and will not permit its officers,
Affiliates, employees, or agents, to lease, sell, assign, further sublicense or
otherwise transfer the Z-Tel Off-Premises Software License granted to MCI
hereunder.
C. Support for Z-Tel Off-Premises Software. During the
term of this Agreement and any transition period, and in addition to Z-Tel's
obligations pursuant to Section 4.2.2 D, Z-Tel shall provide to MCI, its
Affiliates and other Authorized Users as to any Z-Tel Off-Premises Software
licensed hereunder such maintenance and support services, including providing
Software Enhancements, as are reasonably necessary or useful to enable MCI to
exercise its rights as to the same pursuant to the Z-Tel Off-Premises Software
License; provided, however, that as to any Z-Tel Proprietary Software included
in the Z-Tel Off Premises Software such services shall at a minimum be at least
equal to such maintenance and support that Z-Tel provides to its own users of
such Software; and provided further, that with ********.
D. Effect of Triggering Event. Upon the occurrence of
any Z-Tel Triggering Event, at MCI's option exercisable at such time thereafter
as determined by MCI in its reasonable discretion by written notice to Z-Tel,
all Z-Tel Off-Premises Software then subject to, or otherwise required to be
provided to any Authorized User pursuant to, the Z-Tel Off-Premises Software
License set forth in Section 5.1.2 A, shall, to the extent it is also Z-Tel
Technology, automatically and without further consideration from MCI or any
third party (other than such consideration as is required upon declaration of a
Secondary Z-Tel Triggering Event), immediately become subject to the Technology
License which shall thereafter supersede said license in Section 5.2.1.A as to
all of such Z-Tel Off-Premises Software.
34
********.
F. Pre-Delivery Testing and Configuration of Z-Tel
Off-Premises Software. Any Z-Tel Off-Premises Software, including without
limitation any Software Enhancements for the same provided to MCI pursuant to
Section 5.1.2 C, shall be preconfigured and tested, etc. by Z-Tel prior to any
delivery or other transmission to MCI to meet the specifications and other
requirements communicated to Z-Tel by MCI or otherwise mutually agreed by the
Parties for such purpose, as well as any other applicable requirements of this
Agreement, e.g. screening for viruses pursuant to Section 4.2.2 C etc.;
provided, however, that any such preconfiguration work and testing by Z-Tel
shall not be deemed Professional Services hereunder and shall be performed at
no cost of any kind to MCI or any third party if the preconfiguration work and
testing are substantially the same as that required to be performed by Z-Tel in
connection with the provision of service to Z-Tel's own end-user customers. If
any material custom preconfiguration work and testing is required to be
performed, the cost of such work will be billed to MCI as a Direct Cost Any
such preconfiguration and testing by Z-Tel shall not limit the right of MCI or
any third party using any such Z-Tel Off Premises Software hereunder to further
configure and test such Software after such delivery or other transmission.
5.2 Technology License.
5.2.1 Technology License Grant. Z-Tel hereby grants to MCI and its
Affiliates, effective as of the date either a) a Primary Z-Tel Triggering Event
has occurred and MCI has provided written notice to Z-Tel that MCI is declaring
a Primary Z-Tel Triggering Event, or b) a Secondary Z-Tel Triggering Event has
occurred and MCI has provided written notice to Z-Tel that MCI is declaring a
Secondary Z-Tel Triggering Event accompanied by tender of payment, in
immediately payable funds, of the difference between ******** and any
Software License Fee paid to that date, a worldwide, multi-site, perpetual,
irrevocable, non-cancelable and non-terminable, non-exclusive (except as may
otherwise be provided in Section 5.4.1), non-assignable (except to the extent
specified in Section 5.2.1(B)), non-sublicensable (except to the extent
specified in Section 5.2.1(C)), and royalty-free, right and license as to the
Z-Tel Technology, to exercise all rights in connection therewith (other than
the right to alienate the same or to take any action to put it in the public
domain), including without limitation the rights to display, perform, execute,
modify, develop and otherwise create derivative works thereof, make copies
thereof and distribute the same whether or not modified, and use (including
without limitation in combination with any other information, data, materials
or intellectual property), with the further rights to permit the independent
contractors of MCI and/or its Affiliates at any tier to exercise any or all of
the foregoing rights for the benefit of MCI and any such MCI Affiliates, all to
the extent reasonably necessary or useful to enable MCI and its Affiliates to
deploy, generate, test, develop, use for training, maintain and support,
market, sell and otherwise use and provide services comparable to any or all of
the Services hereunder, including without limitation as such services may be
35
further subsequently modified and/or developed by MCI and/its Affiliates
pursuant to this license, directly or indirectly through their agents,
resellers and other third parties, to their present and future end users. The
foregoing license as to Z-Tel Technology, subject to the other terms and
conditions of this Section 5.2, may hereinafter be referred to as the
"Technology License."
The Parties acknowledge and agree that MCI is under no
obligation to declare a Z-Tel Triggering Event following the occurrence of
facts that would otherwise constitute a Z-Tel Triggering Event, and that no
lapse of time following the occurrence of facts that would otherwise constitute
a Z-Tel Triggering Event shall prejudice MCI's right to notify Z-Tel that it is
declaring such Z-Tel Triggering Event.
********
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********.
B. MCI and its Affiliates shall be entitled to assign
the Technology License, in whole or in part, at any time, only to a successor
in interest or to a purchaser of all or substantially all of MCI's assets or of
the assets of that portion of MCI's business (or any Affiliate's business) as
to which this Technology License pertains.
C. MCI and its Affiliates shall have the right to
sublicense to Authorized Users all or any portion of their rights pursuant to
the Technology License. For the avoidance of doubt, MCI may not sublicense any
rights under the Technology License to any other unaffiliated Certificated
Carrier or other provider of Telecommunications Services or Information
Services.
D. Z-Tel expressly acknowledges and agrees that the
Technology License granted pursuant to Section 5.2.1 shall be perpetual,
irrevocable, noncancellable and nonterminable, and royalty free, and that in
the event of any dispute over the payment of the Software Licensing Fee by MCI
or any other monies that Z-Tel may assert as due and owing by MCI and/or any of
its Affiliates pursuant to this Agreement, or any breach of this Agreement in
regard to the Technology License, Z-Tel's sole and exclusive remedy shall be a
suit for dollar damages and not revocation, termination, cancellation or
limitation of the Technology License. Notwithstanding the foregoing, this
Section 5.2.1(D) in no way limits Z-Tel's rights pursuant to Section 5.3.7
("Disputes Regarding Release of Technology Escrow Materials or Delivery of
Z-Tel Technology").
5.2.2 Delivery of Z-Tel Technology
A. Upon the occurrence of a Secondary Z-Tel Triggering
Event and MCI's written notice of its intent to exercise its rights hereunder,
accompanied by MCI's tender in immediately available funds of the difference,
if any, between $50 million and the amount paid by MCI to Z-Tel as of such date
in Software License Fees, and without limiting any of Z-Tel's obligations
pursuant to Section 5.3 "Z-Tel Technology Escrow" or the Technology Escrow
Agreement, Z-Tel shall immediately deliver to MCI all of the then-existing
Z-Tel Technology, including without limitation all of the Source Code for such
Category 1 Software included in the Z-Tel Technology, notwithstanding any prior
failure of Z-Tel to deliver any required Z-Tel Technology to MCI pursuant to
this Section 5.2.3, and whether or not any such prior failure may have been
waived by MCI, and all of such Z-Tel Technology shall be subject to the
Technology License.
B. Upon the occurrence of any Primary Z-Tel Triggering
Event and MCI's written notice of its intent to exercise its rights hereunder,
and without limiting any of Z-Tel's obligations pursuant to Section 5.3 "Z-Tel
Technology Escrow" or the Technology Escrow Agreement, Z-Tel shall immediately
deliver to MCI all of the then-existing Z-Tel Technology, including without
limitation all of the Source Code for the
37
Category 1 Software included in the Z-Tel Technology, notwithstanding any prior
failure of Z-Tel to deliver any required Z-Tel Proprietary Software to MCI
pursuant to this Section 5.2.3, and whether or not any such prior failure may
have been waived by MCI, and all of such Z-Tel Technology shall be subject to
the Technology License.
5.2.3 Ownership of Modifications. MCI and/or its Affiliates shall
own all right, title and or interest in and to all changes, improvements,
enhancements, derivative works or other modifications, along with the
Intellectual Property Rights in any of the foregoing, made without
participation of Z-Tel or use of Z-Tel services or facilities by or on behalf
of MCI or its Affiliates or any of their sublicensees, to the Z-Tel Technology
pursuant to the Technology License. If Z-Tel does participate in making such
changes, improvements, enhancements, derivative works or other modifications,
the Parties will negotiate in good faith prior to the commencement of any such
Z-Tel participation a Statement of Work setting forth, among other things, the
Parties' respective ownership, licenses, or other rights with respect to any
such resulting modifications.
5.2.4 Maintenance and Support. During the term and any transition
period, Z-Tel shall provide to MCI and its Affiliates as to any Z-Tel
Proprietary Software ******** such maintenance and support services as are
reasonably necessary or useful to enable MCI to exercise its rights as to the
same pursuant to the Technology License, provided, however, ********.
5.2.5 Dedicated MCI Environment. The Parties shall continue to
discuss a potential arrangement pursuant to which Z-Tel and MCI would create a
dedicated MCI environment capable of enabling either Z-Tel or MCI themselves
and/or through one or more third parties to deploy, generate, maintain,
support, modify and provide services equivalent to the Services made available
to or through MCI pursuant to this Agreement using facilities substantially
identical to those used to provide the Services under this Agreement. The
Parties shall negotiate in good faith to reach a separate agreement or an
amendment to this Agreement embodying such arrangement and including such terms
and conditions as would be customary or reasonably necessary for such an
arrangement and as otherwise agreed to by the Parties, all within six months of
the Effective Date or such longer period as the Parties may agree.
5.3 Z-Tel Technology Escrow.
5.3.1 Establishment of Technology Escrow Agreement.
Contemporaneously with the execution of this Agreement, the Parties shall enter
into a Technology Escrow Agreement (the "Technology Escrow Agreement") with DSI
Technology Escrow Services, Inc. (the "Technology Escrow Agent") to secure
MCI's rights under the
38
Technology License and to be effective as of the Effective Date, such
Technology Escrow Agreement to be substantially in the form of Exhibit 9 "Form
of Technology Escrow Agreement" attached hereto. The Technology Escrow
Agreement shall be separate from, but supplemental to, this Agreement. Such
Technology Escrow Agreement shall be established and maintained at the expense
of MCI for the sole benefit of MCI. Should such Technology Escrow Agreement
with the Technology Escrow Agent terminate or otherwise expire for any reason
during the term of this Agreement or any transition period, Z-Tel agrees that
it shall immediately enter into a new escrow arrangement with the Technology
Escrow Agent (or another independent escrow agent specified by MCI to serve as
Technology Escrow Agent) substantially in the form of Exhibit 9 and in
accordance with the provisions of this Section 5.3. Notwithstanding the
foregoing, Z-Tel shall not enter into such new escrow arrangement if MCI has
exercised its rights to an escrow release due to a Triggering Event, and that
release has not been reversed by a court of competent jurisdiction pursuant to
Section 5.3.7 of this Agreement.
5.3.2 Deposit of Technology Escrow Materials. Within five (5) days
after the Effective Date, Z-Tel shall place the Technology Escrow Materials
into escrow as provided for under the Technology Escrow Agreement. Not less
frequently than on a monthly basis during the term and any transition period,
Z-Tel shall either a) deposit copies of the then-current Z-Tel Technology with
the Technology Escrow Agent, subject to the terms and conditions of the
Technology Escrow Agreement, or b) provide a written statement that there has
been no change in the Z-Tel Technology, so that the Technology Escrow
Materials, as of the date of each such deposit or statement, shall be current
so as to accurately reflect the Z-Tel Technology as of such date, and the same
shall be part of the Technology Escrow Materials.
5.3.3 Audit of Technology Escrow Materials. The Parties shall
designate a mutually acceptable neutral third party who, at the expense and
request of MCI made from time to time, shall audit the materials deposited with
the Technology Escrow Agent for purposes of determining whether Z-Tel has
fulfilled its deposit obligations. Such auditor shall agree to be bound by
reasonable confidentiality restrictions which prohibit it from directly or
indirectly conveying the Source Code and Object Code pertaining to any Z-Tel
Proprietary Software to MCI or to any party other than Z-Tel. Z-Tel will
promptly correct any deficiency disclosed by the audit.
5.3.4 Release of Technology Escrow Materials. Release of the
Technology Escrow Materials to MCI shall be on terms and conditions (including
notice, redeposit and other provisions) as set forth in the Technology Escrow
Agreement, but such release shall in any event be granted to MCI whenever MCI
provides written notice to the Technology Escrow Agent, with copy to Z-Tel, a)
stating that a Primary Z-Tel Triggering Event has occurred and describing that
event, or b) stating that a Secondary Z-Tel Triggering Event has occurred,
describing that event, and certifying that MCI has tendered to Z-Tel in
immediately available funds the difference, if any, between ******** and the
amount previously paid by MCI to Z-Tel in Software License Fees, and
39
c) demanding release of the Technology Escrow Materials to MCI, all in the form
of attached Exhibit 10 ("Release Instruction Upon Triggering Event"). Z-Tel's
sole recourse in the event of any dispute or disagreement as to the occurrence
of a Z-Tel Triggering Event or related to the release of the Technology Escrow
Materials shall be as provided in Section 5.3.7.
5.3.5 License to Use Technology Escrow Materials. With respect to
any Technology Escrow Materials, MCI is hereby granted an irrevocable,
non-cancelable, non-terminable, perpetual license to use the Technology Escrow
Materials upon their release to MCI, only pursuant to the terms and conditions
of the Technology License, provided, however, that the license provided under
this Section 5.3.5 shall be rescinded if the Z-Tel Technology Escrow Materials
are ordered to be returned pursuant to Section 5.3.7 ("Disputes Regarding
Release of Technology Escrow Materials or Delivery of Z-Tel Technology"). For
the avoidance of doubt, the release to MCI of the Technology Escrow Materials
shall not enlarge MCI's rights pursuant to the Technology License except as may
be expressly set forth herein. For the avoidance of doubt, the operation of
this clause shall in no event prejudice any subsequent declaration of a Z-Tel
Triggering Event.
5.3.6 Bankruptcy. The obligations of Z-Tel under this Section 5.3
shall extend to any trustee in bankruptcy, receiver, administrator or
liquidator appointed for Z-Tel, to Z-Tel as debtor-in-possession ("Trustee"),
and to any other successor in interest to Z-Tel. Without limiting the
generality of the foregoing, upon written request of MCI, Z-Tel shall not
interfere with the rights of MCI as provided in this Agreement or the
Technology Escrow Agreement to obtain the Technology Escrow Materials from the
Trustee, the escrowee or any other person or entity having possession thereof,
and shall, if requested under the conditions specified in this Agreement or the
Technology Escrow Agreement for release of the Technology Escrow Materials,
cause a copy of such Technology Escrow Materials to be made available to MCI.
5.3.7 Disputes Regarding Release of Technology Escrow Materials or
Delivery of Z-Tel Technology. Notwithstanding any other provision of this
Agreement, in the event that Z-Tel disputes or disagrees as to the occurrence
of a Z-Tel Triggering Event or any other conditions to the release of the
Technology Escrow Materials or with any delivery of Z-Tel Technology pursuant
to Section 5.2.2 or any release of the Technology Escrow Materials by the
Technology Escrow Agent to MCI, Z-Tel agrees that it shall not be entitled to
seek any emergency or other expedited equitable relief to prevent such release
or delivery, whether by way of a preliminary injunction, temporary restraining
order, or otherwise, and that the Technology Escrow Materials shall immediately
be released and the Z-Tel Technology immediately delivered to MCI
notwithstanding the pendency of any such dispute or disagreement. If a court
ultimately determines under the terms of this Agreement that any delivery of
Z-Tel Technology pursuant to Section 5.2.2 or any release of the Technology
Escrow Materials should not have occurred and the court issues an order against
MCI to such effect, a) MCI shall return the Technology Escrow Materials and all
copies and records thereof to Z-Tel in compliance with such
40
order, b) MCI shall return to Z-Tel any Z-Tel Technology and all copies and
records thereof received pursuant to Section 5.2.2, c) Z-Tel shall be entitled
to any fees to which it would otherwise have been entitled had the Triggering
Event not been declared by MCI, interest on such fees at the lesser of one and
one half percent per month or the maximum amount allowed by Law accruing from
the date of the release of Technology Escrow Materials, and its reasonable
attorneys' fees and litigation costs, and d) MCI shall be entitled to a refund
of any payment made to Z-Tel pursuant to Section 5.2.1 of this Agreement (i.e.,
the difference between ******** and any Software License Fee paid to that
date).
5.3.8 Rights Under Bankruptcy Code. Notwithstanding anything in
this Agreement to the contrary, MCI reserves all rights available to it under
Section 365(n) of the Federal Bankruptcy Code, 11 U.S.C.ss.365(n), or any
equivalent successor provision thereto.
5.4 Professional Services; Rights to Work Product
5.4.1 Professional Services. From time to time during the term and
any transition period, MCI may request that Z-Tel agree to provide specific
Professional Services in connection with any of the other Z-Tel Deliverables
hereunder and Z-Tel shall not unreasonably withhold, delay or condition its
agreement to perform such Professional Services. Upon Z-Tel's agreement to
provide such Professional Services, the Parties will negotiate in good faith
prior to the commencement of any such services a Statement of Work setting
forth necessary and appropriate supplemental terms and conditions, which may
include without limitation provisions describing the nature and scope of the
Professional Services to be performed, a description of, and specifications
for, any required Z-Tel deliverables, the schedule for delivery and/or
implementation of any Z-Tel deliverables, applicable acceptance provisions, the
consideration, if any, to be provided by MCI for the Professional Services, and
the Parties' respective ownership, licenses, and exclusivity rights with
respect to the Work Product of such Professional Services.
5.4.2 Disclosure of Work Product. Only to the extent provided in
the applicable SOW, Z-Tel shall promptly disclose to MCI all parts of the Work
Product, including without limitation any inventions, improvements or
discoveries, whether or not copyrightable or patentable, as well as any
features or concepts considered to be new or different, contained in such Work
Product.
5.4.3 License to Pre-existing Z-Tel Intellectual Property. The
Parties acknowledge and agree that Work Product may incorporate pre-existing
Z-Tel intellectual property. Except as otherwise provided in the applicable
SOW, Z-Tel hereby grants to MCI a non-exclusive, worldwide, irrevocable,
noncancellable, non-terminable and perpetual license to use any of such
pre-existing Z-Tel intellectual property (to the extent incorporated in the
Work Product described in this Section 5.4) solely as necessary or appropriate
to MCI's enjoyment of its rights of ownership of or license to, as the case may
be, the Work Product, including but not limited to the rights to display,
perform,
41
copy (solely for MCI's internal use or the use of Authorized Users for the
benefit of MCI), execute, and distribute (solely for MCI's internal use or the
use of Authorized Users for the benefit of MCI) such pre-existing Z-Tel
intellectual property, with the further right to sublicense the foregoing
rights to Authorized Users to exercise solely for the benefit of MCI, provided
that except as otherwise provided in the applicable SOW, Z-Tel shall retain all
ownership rights and title to the pre-existing Z-Tel intellectual property.
Nothing in this section shall affect Z-Tel's right to receive, or MCI's
obligation to pay, Software Licensing Fees pursuant to Section 3.1.2 of this
Agreement.
5.4.4 Further Assurances. MCI shall have the right, at its own
expense, to obtain and to hold in its own name copyrights, registrations,
patents, and any extensions or renewals thereof, or such other protection as
may be appropriate to any ownership in Work Product agreed to be conveyed in an
SOW. From time to time, at the request of MCI, but without further
consideration from MCI, Z-Tel will provide MCI and any person designated by MCI
all such additional information and shall do, execute and deliver, or cause to
be done, executed and delivered, all such further acts, things and instruments
as may be reasonably requested or required by MCI to more effectively evidence,
give effect to, and/or perfect the conveyance, assignment, registration and
vesting of rights in the Work Product in MCI as required pursuant to this
Section 5.4.4 and, as applicable, to perfect MCI's rights under the license
granted pursuant to Section 5.4.3 ("License to Pre-existing Z-Tel Intellectual
Property").
5.5 Z-Tel Limited License to Use MCI Marks
5.5.1 License to Use MCI Marks. MCI grants to Z-Tel a royalty-free,
non-exclusive, non-transferable and non-sublicenseable license to use the MCI
Marks as identified in Exhibit 11 ("MCI Marks") attached hereto or as may
otherwise be identified in writing to Z-Tel by an authorized representative of
MCI from time to time during the Term and any transition period only in the
United States ********, provided that prior to use of any MCI Xxxx, Z-Tel shall
submit the specific proposed use of the MCI Xxxx to MCI for prior written
approval.
5.5.2 Restrictions on Use of MCI Marks. Z-Tel covenants and agrees
that it: (i) will use the MCI Marks only in the form herein permitted and will
not vary, augment or abbreviate the MCI Marks in any manner, nor use the MCI
Marks as a component of any composite xxxx or combination; (ii) will restrict
its use of the MCI Marks to the provision of Services; (iii) will not use the
MCI Marks as a trade name, descriptively and/or generically, or in any way
other than as a service xxxx or trademark in accordance with the terms set
forth herein; (iv) will not use, register or otherwise assert any ownership
interest in any xxxx that in MCI's reasonable judgment is similar to the MCI
Marks or any portion thereof; (v) will not use the MCI Marks in any manner
whatsoever which may, in MCI's reasonable judgment, jeopardize MCI's ownership
or the significance, distinctiveness, validity or value of the MCI Marks; and
(vi) will not contest the validity of any of the MCI Marks.
42
5.5.3 Z-Tel further agrees that any and all rights, interests and
goodwill that might be acquired by its use of the MCI Marks shall inure to the
sole benefit of MCI. Z-Tel acknowledges and agrees that as between itself and
MCI, Z-Tel neither has nor will it assert any ownership rights or other
interests in the MCI Marks other than the limited rights of use expressly
provided herein.
5.5.4 Z-Tel agrees to comply with rules set forth from time to time
by MCI with respect to the appearance and manner of use of the MCI Marks.
5.5.5 Z-Tel shall comply with all Laws and regulations pertaining
to the proper use and designation of marks and shall in advertising and printed
materials identify the licensed MCI Marks as follows: "[Specify the MCI
Xxxx(s)] is(are) owned by WorldCom, Inc." or such other notice as may be
specified by MCI in writing to Z-Tel.
5.5.6 Unless otherwise expressly agreed by MCI in writing, upon the
effective date of expiration or any termination of this Agreement pursuant to
any Section of this Agreement, all licenses and rights granted pursuant to this
Section 5.5 to Z-Tel shall cease and terminate forthwith and immediately revert
to MCI, and Z-Tel shall discontinue all use of the MCI Marks and shall destroy
or return all materials bearing the MCI Marks.
5.6 Limited Right of Z-Tel to Use CPNI, Customer Data and MCI Materials.
Z-Tel acknowledges and agrees that without limiting the provisions of Section
4.1 "Confidential Information", that Z-Tel shall use any CPNI, Customer Data,
information, data or other MCI materials only as expressly authorized by MCI in
writing but in any event only for the purposes of this Agreement or as
otherwise expressly permitted by this Agreement.
5.7 No Other Rights, Licenses, etc. Except to the extent otherwise
expressly set forth in this Agreement or otherwise mutually agreed by the
Parties in writing, nothing contained in this Agreement shall or will be
construed or deemed to grant to either Party any right, title, license,
sub-license, proprietary right or other claim against or other interest in, to
or under (whether by estoppel, by implication or otherwise) the Intellectual
Property Rights and tangible embodiments thereof or other facilities or
materials owned by or licensed or otherwise provided to the other Party prior
to the Effective Date of this Agreement or independently developed by or on
behalf of the other Party or licensed or otherwise provided to the other Party
by a third party during the term of this Agreement and any transition period.
5.8 Z-Tel Infringement Indemnity.
5.8.1 Indemnity.
A. Category 1 Software. Z-Tel shall at its own expense
defend, indemnify and hold the MCI Indemnitees harmless from and against all
damages, costs and expenses and other amounts (including without limitation
reasonable attorneys' fees)
43
finally awarded against any MCI Indemnitee in, or agreed to by Z-Tel in
compromise or settlement of, any third party claim, action, allegation, suit or
other proceeding (individually an "Action" and collectively the "Actions")
asserted or brought against any MCI Indemnitee to the extent such Action
alleges that any of the Category 1 Software used by Z-Tel for the provision of
Services to, or provided, licensed or otherwise made available by Z-Tel to any
of the MCI Indemnitees hereunder, or the use of the Category 1 Software by an
MCI Indemnitee in accordance with the terms and conditions of this Agreement,
infringes any Intellectual Property Rights of a third party.
********.
********.
********.
C. Services. Z-Tel shall, at its own expense, defend,
indemnify and hold the MCI Indemnitees harmless from and against all damages,
costs and expenses and other amounts (including without limitation reasonable
attorneys' fees) finally awarded against any MCI Indemnitee in, or agreed to by
Z-Tel in compromise or settlement of, any Action asserted or brought against
any MCI Indemnitee to the extent such Action alleges that the Services
provided, licensed or otherwise made available by Z-Tel to any
44
of the MCI Indemnitees hereunder, or the use of the Services by an MCI
Indemnitee in accordance with the terms and conditions of this Agreement,
infringes any Intellectual Property Rights of a third party; provided, however,
that, to the extent any such Action is based upon or arises in connection with
the use by Z-Tel of any Category 2 Software, Category 3 Software, or Category 4
Software in providing, licensing, or otherwise making available such Services,
or the use of such Services by an MCI Indemnitee, subparagraph (B) of this
Section shall control, and Z-Tel shall have no indemnification obligation with
respect to such Action, or such portion thereof as is based upon or arises in
connection with such use of any Category 2 Software, Category 3 Software, or
Category 4 Software, except as provided in subparagraph (B) of this section.
D. Software Combination. Z-Tel shall at its own expense
defend, indemnify and hold the MCI Indemnitees harmless from and against all
damages, costs and expenses and other amounts (including without limitation
reasonable attorneys' fees) finally awarded against any MCI Indemnitee in, or
agreed to by Z-Tel in compromise or settlement of, any Action asserted or
brought against any MCI Indemnitee to the extent such Action alleges that the
combination by Z-Tel of Category 1 Software, Category 2 Software, Category 3
Software, and/or Category 4 Software and/or any other Z-Tel Deliverables, or
the use in accordance with this Agreement by an MCI Indemnitee of any such
combination, infringes any Intellectual Property Rights of a third party.
Each of the foregoing claims of infringement of any Intellectual Property Right
shall be known as an "MCI Infringement Claim." For the avoidance of doubt, the
indemnity contained in this Section 5.81 does not apply to any services
provided by MCI using the Technology License.
5.8.2 Additional Z-Tel Obligations. Without limiting the rights of
any MCI Indemnitee or the obligations of Z-Tel pursuant to Section 5.8.1, Z-Tel
agrees that:
A. if any of the Category 1 Software provided, licensed
or otherwise made available by Z-Tel to any of the MCI Indemnitees hereunder,
or the use of the Category 1 Software by an MCI Indemnitee in accordance with
the terms and conditions of this Agreement, or
B. if any Category 2 Software, Category 3 Software, or
Category 4 Software provided, licensed or otherwise made available to any of
the MCI Indemnitees hereunder, or the use of the such Software by an MCI
Indemnitee in accordance with the terms and conditions of this Agreement, or
C. if the Services provided, licensed or otherwise made
available by Z-Tel to any of the MCI Indemnitees hereunder, or the use of the
Services by an MCI Indemnitee in accordance with the terms and conditions of
this Agreement, or
D. if the combination by Z-Tel of Category 1 Software,
Category 2 Software, Category 3 Software, and/or Category 4 Software and/or any
other Z-Tel
45
Deliverables, or the use in accordance with this Agreement by an MCI Indemnitee
of any such combination becomes or in the affected MCI Indemnitee's reasonable
opinion is likely to become, the subject of any claim of infringement of any
Intellectual Property Right or the subject of an Action under Section 5.8.1
above, or is enjoined or prohibited in connection with any such claim of
infringement or Action, Z-Tel shall, at its sole expense, take the following
actions listed in the order of requirement:
(i) obtain for the applicable MCI Indemnitee a license
permitting the continued exercise of its rights
respecting the affected Z-Tel Deliverable, and/or
services or products arising out of or relating to
the affected Z-Tel Deliverable, conferred by or
pursuant to this Agreement or otherwise; or
(ii) replace or modify the affected Z-Tel Deliverable so
that it still complies with the applicable
Specifications and functionality and other
requirements of this Agreement, while permitting the
continued exercise by the affected MCI Indemnitee of
its rights with respect to such Z-Tel Deliverable
conferred by or pursuant to this Agreement;
provided, however, that with respect to any Category 2 Software, Category 3
Software, or Category 4 Software, Z-Tel shall have no obligation to any MCI
Indemnitee pursuant to this Section 5.8.2 other than to provide to the MCI
Indemnitee such replacement or modification to such Software ********.
5.8.3 Indemnification Procedures. MCI or other affected MCI
Indemnitee shall: (i) notify Z-Tel of any MCI Infringement Claim promptly after
MCI or the other affected MCI Indemnitee becomes aware of the same, (ii) give
Z-Tel such information and assistance as is reasonably required in connection
therewith but at the reasonable expense of Z-Tel, and (iii) give Z-Tel sole
control of the defense of the MCI Infringement Claim and all negotiations for
the compromise or settlement thereof; provided, however, that Z-Tel must
consult with the affected MCI Indemnitee prior to settling any Action, and
Z-Tel cannot bind the MCI Indemnitee or materially prejudice the MCI Indemnitee
without the MCI Indemnitee's prior written consent, such consent not to be
unreasonably withheld; and provided further, however, that the failure of MCI
or other affected MCI Indemnitee, as applicable, to undertake any of the
actions required by Subitems (i) through (iii) of this Section shall not
relieve Z-Tel of any obligations it may have under Section __, except to the
extent that Z-Tel's ability to fulfill such obligation has been materially
prejudiced thereby. Notwithstanding Subitem (ii) in the preceding sentence, MCI
and any affected MCI Indemnitee shall have the right to participate in the
investigation and defense of, and any negotiations regarding, any MCI
Infringement Claim with separate counsel chosen and paid for by MCI or such
affected MCI Indemnitee.
46
5.8.4 Not Subject to Limitations of Liability. The obligations of
Z-Tel set forth in this Section 5.8 shall not be subject to any limitations or
exclusions of liability or remedy set forth in this Agreement, including
without limitation the provisions of Section 7.3 "Limitation of Liability".
VI. EQUITY PROVISION
6.1 Z-Tel Equity. Simultaneously with the execution and delivery of this
Agreement, the Parties will deliver to each other a fully executed
Subscription, Preemptive Rights, and Registration Rights Agreement in the form
attached to this Agreement as Exhibit 12.
VII. GENERAL PROVISIONS
7.1 Term. This Agreement will have an initial term of four years. This
Agreement will automatically renew for successive one-year terms unless either
Party delivers written notice of non-renewal not fewer than six months before
expiration of the initial term or any renewal term.
7.2 Termination.
7.2.1 Termination Without Cause. Except the right to terminate for
cause as described below or as may be provided by operation of Section 7.22 of
this Agreement, neither Party will have the right to terminate (or deliver a
notice of intent to terminate) this Agreement during the first eighteen months
of the initial term. Thereafter, either Party may terminate this Agreement for
any reason whatsoever by delivery of not fewer than six months written notice
of termination.
7.2.2 Termination With Cause. Either Party may terminate this
Agreement for cause by delivery of not fewer than 30 days written notice of
termination if (i) the other Party is in material breach of this Agreement (or
any contract or agreement executed pursuant to this Agreement), including SLAs
designated as "Triggering Event SLAs" by the Parties, and the breach is not
cured within 30 days after receipt of written notice describing such breach in
reasonable detail, provided that in the case of Z-Tel's failure to meet a
Triggering Event SLA, MCI may terminate this Agreement with cause immediately
if Z-Tel does not cure such failure within thirty-two (32) days, or (ii) the
other Party becomes Bankrupt, as defined herein. In addition, MCI may terminate
this Agreement with cause by delivery of not fewer than 30 days written notice
of termination if (A) there is a material, adverse change in Z-Tel's financial
condition, except as may be caused by MCI's failure to pay any MCI ********
Fees or any undisputed amounts due pursuant to this Agreement, which may
include (i) a material failure to meet debt covenants which failure is being
enforced by the relevant lender or (ii) a default in connection with a failure
to make preferred dividend payments, and (B) such change in financial condition
raises reasonable and significant concerns, in MCI's reasonable discretion, as
to Z-Tel's ability to perform its obligations under this Agreement, and (C)
such change in financial condition is not cured so as to remove reasonable and
substantial concerns within 30 days after Z-Tel receives written notice from
MCI detailing its
47
concerns. MCI also may terminate this Agreement with cause by delivery of not
fewer than 60 days written notice in the event of a Z-Tel Primary Z-Tel
Triggering Event. MCI may terminate this Agreement with cause with thirty (30)
day notice if Z-Tel ceases ongoing business operations.
7.2.2.1 Impact Upon Triggering Event SLAs of Disagreement
Regarding Direct Cost. Notwithstanding any other provision of this Agreement,
Z-Tel's failure to meet a Triggering Event SLA requirement shall not be deemed
a Secondary Z-Tel Triggering Event under this Agreement, and shall not give MCI
the right to terminate the Definitive Agreement for cause as described in
Section 7.2.2, if Z-Tel's failure is directly caused by the decision not to use
any product, service, or procedure, because MCI has refused to ********, until
the dispute over the ********. In order to invoke this section 7.2.2.1, Z-Tel
must provide timely notice, in writing, that such refusal by MCI to ********
presents a substantial risk of causing Z-Tel to fail to meet the critical terms
of such Triggering Event SLA. Within 30 days of receiving such a notice, MCI
may propose a reasonable alternative to the ******** action for which Z-Tel had
requested ********. If Z-Tel disagrees with the reasonableness of MCI's
proposal, Z-Tel may invoke the escalation and negotiation procedures under
Sections 7.27.1 and 7.27.2 of this Agreement, and if those do not result in the
agreement of the Parties within fifteen (15) days thereafter, Z-Tel may submit
the dispute to expedited arbitration under the JAMS/Endispute procedures, with
a final decision to be rendered within 30 days, which decision shall be binding
on both Parties. Until the Parties reach agreement, or there is a final
decision of the arbitrator, MCI shall not declare a Secondary Z-Tel Triggering
Event or seek to terminate this Agreement for cause because of Z-Tel's failure
to meet the Triggering Event SLA Term in question. Absent an order from the
arbitrator, in no event will MCI's right to declare a Secondary Z-Tel
Triggering Event be suspended for a total of more than ninety (90) days if MCI
had proposed a reasonable alternative as described above.
7.2.3 Post-Termination Transition Assistance. If either Party
terminates this Agreement for any reason, Z-Tel will, except as otherwise
provided in Section 7.2.4 below, undertake all actions reasonably necessary to
ensure a seamless transition by migrating MCI's LW-Based service customers to
an MCI platform or to an alternate vendor selected by MCI; provided, however,
that MCI makes all payments required in this Section 7.2.3, including
reimbursement for Z-Tel's Direct Costs incurred in connection with such a
transition, subject to MCI's pre-approval. Such actions will include ensuring
that MCI has sufficient capabilities to maintain existing customers (with
grandfathered Z-Node Services) and to continue providing MCI customers with
Z-Node Services, including providing MCI with access to and the ability to use
Z-Tel facilities, equipment, Software, personnel, licenses and other tangible
and intangible property (whether real or personal), including without
limitation continued access to and use of the OSS Platforms and Z-Line
Platforms pursuant to Section ___, all for a period not to exceed six months
following the termination date (the "Transition Period"). Z-Tel agrees
48
that MCI will be permitted to approve the measures that Z-Tel undertakes to
ensure that MCI has these capabilities, and MCI agrees that such approval shall
not be unreasonably withheld or delayed. During the transition period, all of
the terms and conditions of this Agreement shall remain in effect. Unless
specifically stated elsewhere in this Agreement, at the end of the transition
period, MCI shall have no further payment obligations to Z-Tel under this
Agreement. Any failure by MCI to make any payments in a timely manner during
such a transition period will give rise to a right for Z-Tel to cease providing
such services to MCI upon 14 days written notice.
7.2.4 Post-Termination Protection of Z-Tel Operational Knowledge
and Intellectual Property. Notwithstanding any other provision of this
Agreement, MCI shall not, after terminating this Agreement, use any Z-Tel
Technology (except with regard to transition assistance as outlined below and
in Section 7.2.3) unless MCI has paid a total Software License Fee of $50
million or there has been a Primary Z-Tel Triggering Event; and, Z-Tel shall
provide no transition assistance in migrating MCI's LW-Based Service customers
to any non-Z-Tel platform or vendor using any Z-Tel Technology unless MCI has
paid a total Software License Fee of ******** or there has been a Primary
Z-Tel Triggering Event.
7.3 Limitation of Liability. Except as otherwise specifically provided in
this Agreement, in no event will either Party have any liability whatsoever to
the other Party for any indirect, special, consequential, incidental or
punitive damages, including, but not limited to loss of anticipated profits or
revenue or other economic loss in connection with or arising from anything
said, omitted or done hereunder, even if the other Party has been advised of
the possibility of such damages unless such damages are due to the reckless or
willful misconduct of the other Party. Notwithstanding anything to the contrary
herein, the Parties agree and intend that MCI and not Z-Tel shall bear the risk
of MCI's lost revenue or profit from MCI end-user customers in connection with
the actions or inactions of Z-Tel under this Agreement without regard to the
foreseeability of such loss; Z-Tel's liability in such cases, if any, shall be
limited to any allowances or credits provided under the relevant SLAs. Nothing
in this Section limits a) either Party's indemnification obligations with
respect to third party claims, or b) liability for damages to the extent
covered by a Party's general liability insurance policy.
********
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********.
7.5 Good Faith Performance. The Parties to this Agreement will act in good
faith in the performance of their obligations under this Agreement consistent
with the purposes of this Agreement. Neither Party will unreasonably delay,
withhold or condition any notice, approval or similar action required or
permitted by this Agreement, including the obligation to negotiate or resolve
new or open issues that arise hereunder.
7.6 Reports. The Parties will provide each other with regular operational
and financial reports as specified in the attached Exhibit 13.
7.7 Fraud. Z-Tel and MCI will work cooperatively and reasonably with each
other to develop systems for detecting, preventing and limiting fraud. Each
Party shall make available to the other fraud prevention features, including
prevention, detection, or control functionality, that may be embedded within
any of the Network Elements in accordance with applicable Tariffs or as
otherwise mutually agreed. MCI assumes responsibility for fraud associated with
its customers and accounts, other than that caused by the failure of Z-Tel or
Z-Tel employees to act upon reasonable requests by MCI to undertake specific
actions to prevent such fraud. Uncollectible or unbillable revenues from fraud
and resulting from, but not confined to provisioning, maintenance, or signal
network routing errors shall be the responsibility of the Party causing such
error. Z-Tel will not be responsible for payments not received from MCI's
customers. MCI shall ensure that any long-distance carrier selected by MCI to
perform services in connection with those Services provided under this contract
works cooperatively with Z-Tel in preventing fraud, but it shall have no such
obligation with regard to any long-distance carrier selected by end-user
customers that is not MCI or an MCI Affiliate. Notwithstanding the above, MCI's
responsibility for working cooperatively with alternative long-distance
carriers individually selected by its end users will not extend beyond that
normally associated with providing basic Telecommunications Services.
7.8 MCI Telecommunications Services. Z-Tel will work reasonably and
cooperatively with MCI to establish the residential and small business
telecommunications and enhanced services to be offered by MCI using the Local
Wholesale Services, Z-Node Services and the Ancillary Services described in
this Agreement. MCI shall use its judgment to design products using some or all
of these telecommunications services and enhanced services, and will use
commercially reasonable efforts to market and sell such products to the public.
7.9 Branding. Upon request by MCI, and pursuant to the terms of the
license from MCI set forth in Section 5.5, Z-Tel will work cooperatively with
MCI to provide Local Wholesale Services, the Z-Node Services, and the Ancillary
Services described in this
50
Agreement so that they are identified as MCI by tradename, trademark or service
xxxx, whenever technically and commercially feasible, or so that they are not
identified to anyone by tradename, trademark or servicemark, as requested by
MCI. In those instances where in connection with the services to be rendered
under this Agreement, Z-Tel personnel must interact with MCI customers, Z-Tel
personnel will identify themselves as representing MCI or such brand as MCI may
direct. MCI consents to Z-Tel's use of such MCI tradename, trademarks and
servicemarks for this purpose, subject to MCI's prior written approval and the
provisions of Section 5.5. Notwithstanding the foregoing, Z-Tel will take any
steps as directed by MCI to ensure that MCI can comply with all Laws requiring
appropriate branding, including but not limited to any laws regarding the
proper form for customer bills.
7.10 Non-Discriminatory Basis. Z-Tel will use reasonable efforts to provide
the Local Wholesale Services on a competitively neutral, non-discriminatory
basis. Z-Tel will use its best efforts to provide services to MCI hereunder
that are equal in quality, subject to the same conditions (excluding price and
marketing and special promotional programs), and provided within the same time
intervals as Z-Tel provides such services to itself or its end user customers,
consistent with Z-Tel's obligations under the SLAs in Exhibit 4 and the
Requirements Statement in Exhibit 1.
7.11 CARE Transactions. The Parties acknowledge and agree that Z-Tel will
not forward Customer Account Record Exchange ("CARE") transactions for Z-Tel's
end-user customers to MCI, and MCI will not use its LCIS system to handle CARE
transactions for Z-Tel's end-user customers.
7.12 Taxes and Surcharges.
7.12.1 Taxes Imposed on the Services.
A. All charges for the Services provided by Z-Tel to MCI pursuant to
this Agreement are exclusive of federal, state, and local sales, use, excise,
or similar taxes or fees, hereinafter referred to as "Taxes" or "Tax." MCI
shall pay all applicable Taxes, except any tax or surcharge measured or
determined by or on Z-Tel's income, net worth, franchise, or property (which
shall be borne solely by Z-Tel), provided such Taxes are due by law from MCI as
a purchaser of the Services and properly invoiced at the time the charges for
the Services are invoiced. If MCI provides Z-Tel with a resale or other
exemption certificate, upon Z-Tel's good faith acceptance of the certificate,
Z-Tel shall exempt MCI in accordance with the certificate. Notwithstanding any
provision of this agreement, MCI and not Z-Tel shall pay the New York Gross
Receipts tax and the New York MTA tax, billed by Z-Tel for wholesale services
offered in applicable service areas.
B. If Z-Tel becomes aware that any Tax was incorrectly or erroneously
collected from MCI, Z-Tel shall refund to MCI the incorrectly or erroneously
collected Tax to the extent that the same is recoverable after Z-Tel becomes
aware of the error.
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C. At MCI's request, Z-Tel shall take such reasonable steps to
minimize Taxes and cooperate with MCI in challenging the validity of any Tax.
52
7.12.2 Taxes and Surcharges on Services Provided to MCI's End User
Customers.
A. Z-Tel, in conjunction with billing the Services provided to MCI's
end user customers and using its best efforts, shall accurately compute, apply,
xxxx, record, and report all applicable federal, state, and local sales, use,
excise, and other taxes, tax like charges, and surcharges (hereinafter referred
to as "Taxes and Surcharges") on or with respect to the Services. The Parties
agree that Z-Tel shall use BillSoft's software (or such other software approved
by the MCI Tax Department in writing, such approval not to be unreasonably
withheld) in computing, applying, billing, recording, and reporting such Taxes
and Surcharges. Z-Tel shall employ those taxing and surcharging procedures and
applications specified in the Requirements Statement. With respect to billing
Taxes and Surcharges, Z-Tel is merely acting as MCI's agent and shall not be
entitled to retain or receive any statutory fee or share of Taxes and
Surcharges to which the entity collecting such Taxes and Surcharges is entitled
by Law.
B. MCI shall be responsible for filing all appropriate Taxes and
Surcharges returns with the applicable authorities and paying or remitting
Taxes and Surcharges as required by Law. All inquiries and communications with
authorities regarding Taxes and Surcharges applied to MCI's end user customers
shall be the responsibility of MCI.
C. All inquiries or communications from MCI's end user customers
relating to Taxes and Surcharges shall be handled by MCI, unless otherwise
mutually agreed to by the Parties. MCI shall determine the tax-exempt status of
any MCI end user customer.
D. Z-Tel shall be responsible for providing MCI one or more electronic
reports of all Taxes and Surcharges billed on behalf of MCI in a format and at
frequencies mutually agreed to by the Parties.
E. MCI shall indemnify and hold Z-Tel harmless from and against any
liability resulting from any Taxes and Surcharges, penalty, or interest
relating to or arising out of MCI's failure to pay any billed Tax or Surcharge
or file any return as required under this Agreement. MCI shall, at its option
and expense, have the right to seek administrative relief, a ruling, judicial
review or other appropriate review (in a manner deemed appropriate by MCI), as
to the applicability of any Tax and Surcharge, penalty, or interest, or to
protest any assessment and direct any legal challenge to such assessment, but
shall be liable hereunder for any such amount ultimately determined to be due.
Notwithstanding the foregoing, such indemnity is conditioned upon Z-Tel
providing MCI timely notification of any proposed assessment of Taxes and
Surcharges, penalty, or interest due by Z-Tel, where possible within sufficient
time to afford MCI the reasonable opportunity to contest the proposed
assessment. Z-Tel, when requested by MCI and at MCI's expense, shall cooperate
or participate with MCI in any such contest.
F. Z-Tel shall indemnify and hold MCI harmless from and against any
liability resulting from any Taxes and Surcharges, penalty or interest relating
to or arising out of
53
Z-Tel's failure to perform its obligations under this Section, including, but
not limited to, using its best efforts to accurately compute, apply, xxxx,
record, and report all applicable Taxes and Surcharges. Notwithstanding the
foregoing, such indemnity is conditioned upon MCI providing Z-Tel timely
notification of any proposed assessment of Taxes and Surcharges, penalty, or
interest due by MCI within sufficient time, where possible to afford Z-Tel the
reasonable opportunity to contest the proposed assessment. MCI, when requested
by Z-Tel and at Z-Tel's expense, shall cooperate or participate with Z-Tel in
any such contest.
7.13 Implementation. As soon as reasonably possible after execution of this
Agreement, the Parties will adopt a schedule for the implementation of this
Agreement. Z-Tel and MCI will cooperate to formulate procedures for the
implementation and performance of this Agreement, including the procedures for
requesting the delivery of Local Wholesale Services and the other services
described herein.
7.14 Noninterference. The Parties will have the right to serve directly or
indirectly any end user. The Parties may continue to market, sell and deliver
their own Telecommunications Services and enhanced communications services and
may establish independent relationships with any end user. Neither Party will
interfere with the right of any individual, entity or association to obtain
service directly from the other Party. Neither Party, however, will
intentionally directly target the customers of the other Party when marketing
communications services. Neither Party will disparage the other Party or the
other Party's services or make comparisons relative to the other Party's
services in any marketing, advertising or sales materials designed for public
dissemination. During the term of this Agreement, and for the period of six (6)
months thereafter, the Parties shall not directly recruit or solicit for
employment, any technical or professional employees employed by the other Party
in connection with the performance of this Agreement without the prior written
approval of the Party whose employee is being considered for employment. The
foregoing sentence shall not prohibit: (i) solicitation of any person who
contacts a Party on his or her own initiative without any solicitation by or
encouragement from the other Party; (ii) generalized solicitation by
advertising and the like which are not directed to specific individuals or
employees of a Party; or (iii) solicitations of former employees of the other
Party made at least 180 days after the date of termination
7.15 Exclusivity. ********
7.16 Points of Contact. MCI will be Z-Tel's single point of contact for all
services purchased under this Agreement. Except as otherwise provided herein,
Z-Tel will not be required to have any contact with MCI's customers and MCI or
MCI's agents will act as
54
the single point of contact for MCI's customers' service needs, including
sales, service, design, order taking, provisioning, change orders, training,
maintenance, trouble reports, repair, post-sale servicing, and inquiry MCI will
inform its customers using LW-Based services that they are customers of MCI.
MCI customers who inadvertently contact Z-Tel with questions regarding their
MCI service will be referred to MCI. Likewise, Z-Tel customers who
inadvertently contact MCI with questions regarding their Z-Tel service will be
referred to Z-Tel. Nothing in this Agreement will prohibit either Party from
discussing its products or services with customers of the other Party who
solicit such information.
7.17 Forecasts. MCI shall provide to Z-Tel on the first of each month, good
faith forecasts, as specified in the Requirements Statement, regarding the
types, volumes and locations of the Services expected to be purchased by MCI
from Z-Tel under this Agreement. Each forecast shall be by month and shall
extend for a period of six months commencing 30 days after delivery of the
forecast.
7.17.1 Review. Z-Tel shall review each such forecast and shall
provide feedback to MCI as to whether it anticipates that it can perform
Services consistent with the forecast and in compliance with its obligations
under this agreement, including compliance with relevant SLAs. If Z-Tel does
not believe that it can provide service at acceptable levels in regard to
meeting MCI's forecasted demand, the Parties shall negotiate in good faith to
adjust the forecast in such a manner that both parties are satisfied that the
forecast represents reasonable expectations of anticipated demand and that
Z-Tel can perform the Services consistently with the forecast and in compliance
with its obligations under this Agreement, including compliance with relevant
SLAs. If the Parties cannot reach agreement regarding a forecast submitted by
MCI, they may utilize the escalation process outlined in Section 7.27.1 in an
effort to gain the concurrence of both Parties to forecast levels. If
resolution between Parties cannot be reached within 30 days of submission, the
MCI submitted forecast shall be deemed accepted. Z-Tel shall always endeavor in
good faith to fully perform the Services to the maximum extent practicable,
without regard to forecast levels.
7.17.2 Reliance. Z-Tel shall be entitled to rely on these forecasts
in providing the Services hereunder.
7.17.2.1 During First Six Months. During the first
six months of forecasts from the date of general availability of the first MCI
LW-Based product, any MCI forecast that understates its actual demand for Z-Tel
Services in the aggregate (i.e., all states combined for residential and small
business service) by more than ******** during the second month covered by the
forecast shall relieve Z-Tel of its duty to fully perform at associated Service
Level Agreement objectives for that month, provided that Z-Tel has made
reasonable efforts to respond to the updated forecast, taking into
consideration the time that the forecast was updated. Also during this initial
six month period, any MCI
55
forecast that overstates its actual demands for Z-Tel Services in the aggregate
(i.e., all states combined for residential and small business service) by more
than ******** during the third month covered by the forecast shall entitle
Z-Tel to reimbursement from MCI of all costs reasonably expended to prepare for
estimated service needs but not otherwise recouped by Z-Tel under this
Agreement, provided that Z-Tel has made reasonable efforts to respond to any
updated forecast, taking into consideration the time that the forecast was
updated.
7.17.2.2 During Subsequent Period. After the initial
six monthly forecasts from the date of general availability of the first MCI
LW-Based product, any MCI forecast that understates its actual demand for Z-Tel
services in the aggregate (i.e., all states combined for residential and small
business service) by more than ******** during the second month covered by the
forecast shall relieve Z-Tel of its duty to fully perform at associated Service
Level Agreement objectives in for that month, provided that Z-Tel has made
reasonable efforts to respond to the updated forecast, taking into
consideration the time that the forecast was updated. During this subsequent
period, any MCI forecast that overstates its actual demands for Z-Tel services
in the aggregate (i.e., all states combined for residential and small business
service) by more than ******** during the third month covered by the forecast
shall entitle Z-Tel to reimbursement from MCI of all costs reasonably expended
to prepare for estimated service needs but not otherwise recouped by Z-Tel
under this Agreement, provided that Z-Tel has made reasonable efforts to
respond to any updated forecast, taking into consideration the time that the
forecast was updated.
7.18 Audits. As used herein "Audit" means a reasonable review of services
performed and amounts paid under this Agreement.
7.18.1 Audit Rights. Each of the Parties shall keep complete and
accurate records in sufficient detail for the other Party's determination of
compliance with this Agreement. Such records shall be retained until five years
after termination of this Agreement. Subject to each Party's reasonable
security requirements and except as may be otherwise specifically provided in
this Agreement, the Parties may reasonably audit each other's books, records,
documents, and processes, among other things, to ensure the accuracy of the
Parties' billing and invoicing and to evaluate compliance with the terms and
conditions of this Agreement and the Parties' performance related thereto. On
reasonable written notice to the other Party, either Party (either on its own
or through third-party auditors) may inspect and audit the other Party's
records. Such audits will take place at a time and place agreed by the Parties
no later than 30 days after notice thereof. No Party may audit the other if it
has audited the other Party within the previous six months, unless an error in
excess of ******** of the invoice in question is revealed in its previous audit
of the other Party, in which case the auditing Party may audit the other Party
once every thirty days until no new error in excess of ******** is revealed.
The Parties will co-operate reasonably in any such audit, providing reasonable
access to any and all appropriate employees, facilities (e.g., conference
rooms,
56
telephones, copying machines), books, records and other documents reasonably
necessary to assess the accuracy of bills, invoices, and compliance with this
Agreement.
7.18.2 Audit Results. Any underpayment by MCI revealed by an audit
shall be paid in the invoice for the first monthly billing cycle after the
Parties have agreed upon the accuracy of the audit results. Z-Tel will refund
any overpayment by MCI in the form of a credit on the invoice for the first
full billing cycle after the Parties have agreed upon the accuracy of the audit
results. In the event that the credit equals or exceeds ******** of the invoice
for the period when it is to be applied, the overage will be carried over to
appear as a credit on the following month's invoice. The Party undertaking such
audit shall be responsible for the auditor's costs unless an error in excess of
******** of the invoice in question is revealed in which event the Party being
audited shall reimburse the Party seeking the audit for the full cost of the
audit. If a Party being audited pursuant to this Section 7.18 is contesting in
good faith a third party charge, such amounts shall not be considered by an
auditing Party in determining whether any underpayment or overpayment has
occurred. All information obtained in the audit shall be treated as
Confidential Information under this Agreement.
********.
********.
7.19 Insurance. Z-Tel shall maintain during the term of this Agreement all
insurance and/or bonds required by law and as set forth herein, including but
not limited to: (i) Workmen's Compensation Insurance as prescribed by the laws
of the states in which the Services are performed; (ii) Employer's Liability
Insurance with limits of at least ******** for each occurrence; (iii) Commercial
General Liability Insurance, which includes coverage for personal injury and
advertising injury, and, if the
57
use of automobiles is required, commercial automobile liability insurance for
owned, hired and non-owned automobiles, with limits of at least ******** per
occurrence for bodily injury, death, and property damage and ********
aggregate; (iv) Professional Liability and Errors and Omissions Insurance
covering Z-Tel and MCI against damages caused by Z-Tel of at least ******** per
occurrence; and (v) Fidelity bond or crime/fidelity coverage, covering acts of
employee dishonesty of at least ******** per incident; and (vi) "Umbrella" and
"excess" policy coverage of at least ******** to cover the actions of Z-Tel its
employees and agents. MCI is to be named additional insured for the purposes of
this Agreement. Insurance Coverage provided by Z-Tel is primary and
non-contributing with regard to its operations. Z-Tel agrees to waive all
rights of subrogation against MCI. Z-Tel will furnish certificates or adequate
proof of the foregoing insurance. Further, Z-Tel will ensure that each such
certificate shall state that the insurance will not be canceled or modified
unless MCI is given thirty (30) days prior notice of such modification or
cancellation.
7.20 Survival. The Parties' obligations under the following provisions will
survive termination of this Agreement: 3.4, 4.1, 5.2.1, 5.2.3, 5.3.5, 5.3.7,
5.4.3, 5.4.4 (but only for one year after termination), 7.2.3, 7.2.4, 7.3,
7.14, 7.25 (but only for claims arising prior to termination) 7.27.3, 7.36,
7.37, 7.43, and 7.44; and, any other provisions of this Agreement which, by
their terms or by their nature are contemplated to survive (or to be performed
after) termination of this Agreement will, in each case, survive cancellation
or termination hereof.
7.21 Compliance with Laws. Z-Tel will be responsible for obtaining and
keeping in effect all Federal Communications Commission, state regulatory
commission, franchise authority and other regulatory approvals necessary in
connection with the performance of its obligations hereunder. MCI will be
responsible for obtaining and keeping in effect all Federal Communications
Commission, state regulatory commission, franchise authority and other
regulatory approvals necessary in connection with its use of the Local
Wholesale Services or offering of Telecommunications Services as contemplated
herein. Each Party will reasonably cooperate with the other Party in obtaining
and keeping in effect the regulatory approvals for which the other Party is
responsible. Notwithstanding any other provision of the Agreement, Z-Tel will
have no obligation to perform under this Agreement in any state or jurisdiction
where MCI has not obtained authorization as required by Law or Regulatory
Authority for providing services contemplated by this Agreement or for the
conduct of business within such state or jurisdiction. MCI will not place
orders for any services under this Agreement without required authorization.
MCI will provide proof of such authorization upon request by Z-Tel.
7.22 Actions by Regulatory Authorities or ILECs. Neither Party will be
liable for any delay or failure that results from the requirements of Law or
the acts, delays or failures to act of any Regulatory Authority or any ILEC. A
Party will notify the other Party in writing within 48 hours if any Regulatory
Authority or ILEC limits, suspends, cancels,
58
withdraws, or otherwise materially affects, the notifying Party's ability to
perform its obligations under this Agreement. Should notice be issued with
respect to an action that materially affects Z-Tel's or MCI's ability to
provide the Services to a portion of MCI's customers, or renders the Services
unavailable on commercially reasonable terms to these customers, MCI or Z-Tel
may terminate without cause following the procedures set forth in Section 7.2.1
of this Agreement but only with respect to the affected class or classes of
customers. Should such notice be issued with respect to an action that
materially affects Z-Tel's ability to serve all of MCI's customers, or renders
the Services unavailable on commercially reasonable terms, MCI or Z-Tel may
terminate this Agreement with cause pursuant to Section 7.2.2 of this
Agreement.
7.23 Law Enforcement Cooperation. Each Party will cooperate with law
enforcement authorities and national security authorities to the full extent
required or permitted by applicable Law in matters related to services provided
by it under this Agreement, including the production of records, the
establishment of new lines or the installation of new services on an existing
line in order to support law enforcement or national security operations, and
the installation of wiretaps, trap-and-trace facilities and equipment, and
dialed number recording facilities and equipment. A Party will not have the
obligation to inform the other Party or the other Party's end users of actions
taken in cooperating with law enforcement or national security authorities,
except to the extent required by applicable Law.
7.24 Emergency Interfaces. Z-Tel and MCI will use commercially reasonable
efforts to facilitate the prompt, robust, reliable and efficient
interconnection of Z-Tel systems to relevant 911/E-911 emergency platforms and
systems. Z-Tel and MCI will comply with all applicable rules and regulations
(including 911 taxes and surcharges as defined by local requirements)
pertaining to the provision of 911-E911 services. Each Party will be
responsible for securing any necessary certification from local public safety
access points or county or municipal coordinators required prior to that Party
initiating service within a new geographic area.
7.25 General Indemnity.
A. Notwithstanding any limitations in remedies contained in this
Agreement, each Party (the "Indemnifying Party") will indemnify and hold
harmless the other Party ("Indemnified Party") from and against any loss, cost,
claim, damage or expense (including, but not limited to, reasonable attorney's
fees), or other liability to third parties, relating to or arising out of the
Indemnifying Party's breach of its obligations under this Agreement, or the
negligence or other wrongful conduct of the Indemnifying Party, its employees,
directors, agents, vendors or contractors in the performance of this Agreement
(a "Claim); provided, however, that this subparagraph (A) shall not apply to
any claim to which a specific indemnity provided in Sections 2.3, 2.6, 4.2,
4.5, 5.8, 7.12, or 7.27 of this Agreement applies.
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B. Whenever a Claim shall arise for indemnification under this
Section 7.2.5, or shall arise pursuant to any other terms of this Agreement
setting forth an obligation to indemnify a Party or its Affiliates which terms
do not specify procedures in respect of such indemnification, this subparagraph
shall govern. The Indemnified Party shall promptly notify the Indemnifying
Party and request the Indemnifying Party to defend the Claim. The Indemnifying
Party shall have the right to defend against such liability or assertion in
which event the Indemnifying Party shall give written notice to the Indemnified
Party of acceptance of the defense of such Claim and the identity of counsel
selected by the Indemnifying Party. The Indemnifying Party shall have exclusive
right to control and conduct the defense and settlement of any such Claims
subject to consultation with the Indemnified Party. The Indemnifying Party
shall not be liable for any settlement by the Indemnified Party unless such
Indemnifying Party has approved such settlement in advance and agrees to be
bound by the agreement incorporating such settlement. The Indemnified Party
shall not be bound or materially prejudiced without its prior written consent
but such consent shall not be unreasonably withheld. With respect to any
Indemnifying Party, the Indemnified Party shall be entitled to participate with
the Indemnifying Party in such defense if the Claim requests equitable relief
or other relief that could affect the rights of the Indemnified Party and also
shall be entitled to employ separate counsel for such defense at such
Indemnified Party's expense. Each Party agrees to cooperate and to cause its
employees and agents to cooperate with the other Party in the defense of any
such Claim and the relevant records of each Party shall be available to the
other Party with respect to any such defense.
7.26 Publicity. Except as otherwise expressly provided in this Agreement,
neither Party may use the other's name in any communication, release, offering
document or otherwise without the prior written consent of the other Party,
provided, however, that the Parties will issue a mutually agreeable joint news
release announcing their business relationship within fifteen days after the
execution of this Agreement.
7.27 Dispute Resolution.
7.27.1 Escalation Procedures. The Parties will work in good faith to
resolve informally any disputes internally by escalating them as necessary to
progressively higher levels of management. The Parties will exchange escalation
lists setting forth responsible officers, including names, departments, titles
and telephone numbers.
7.27.2 Negotiations. The Parties will attempt in good faith to
resolve any claim, controversy, or dispute between them, their agents,
employees, officers, directors or Affiliates through negotiation. This
provision will not be construed as a waiver of a Party's rights to seek legal
or regulatory intervention and remedies as provided by Law. Nothing in this
Section 7.27 is intended to alter modify or abrogate any termination rights the
Parties may have under Section 7.2 of this Agreement.
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7.27.3 Disputes Involving Software Licensing Fee, Technology
License, and Technology Escrow. Z-Tel expressly acknowledges and agrees that in
the event of any dispute over the payment of the Software Licensing Fee by MCI
or any breach of the Technology License or Technology Escrow Agreement, Z-Tel's
sole and exclusive remedy shall be a suit for dollar damages and not
revocation, termination or limitation of the Technology License or modification
or limitation of any of Z-Tel's obligations in regard to the Technology Escrow
pursuant to Section 5.3.
********.
7.28 Independent Contractors. MCI and Z-Tel are independent contractors.
Nothing contained in this Agreement will be construed to constitute or create a
partnership, joint venture, or employment relationship of any kind. Further,
nothing contained in this Agreement will be construed to constitute an agency
relationship of any kind with two limited exceptions: (i) MCI shall have
authority to act as ZTEL's agent for the limited purpose of contacting LEC
personnel regarding pre-order, order and repair issues; and (ii) ZTEL shall
have authority to act as MCI's agent for the limited purpose of transmitting
MCI customer account data to credit reporting agencies specified by MCI.
Neither Party will have the authority to enter into binding agreements or to
otherwise act on behalf of the other Party. Neither Party will be responsible
for any obligations incurred as an agent of the other Party.
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7.29 Force Majeure. Neither Party will be responsible for any delay or
failure in performance by it that results from causes beyond its reasonable
control ("Force Majeure Events"), whether or not foreseeable by such Party.
Such Force Majeure Events include adverse weather conditions, flood, fire,
explosion, earthquake, volcanic action, power failure, embargo, boycott, war,
revolution, civil commotion, acts of terrorism, acts of public enemies, labor
unrest (including strikes, work stoppages, slowdowns, picketing or boycotts),
and acts of God. If a Force Majeure Event occurs, the non-performing Party will
give prompt notification of its inability to perform to the other Party. During
the period that the non-performing Party is unable to perform, the other Party
will also be excused from performance of its obligations to the extent such
obligations are reciprocal to, or depend upon, the performance of the
non-performing Party which has been prevented by the Force Majeure Event. The
non-performing Party will use commercially reasonable efforts to avoid or
remove the causes of its non-performance and both Parties will proceed to
perform once the causes are removed or cease. Nothing in this Agreement will
require the non-performing Party to settle any labor dispute except as the
non-performing Party, in its sole discretion, determines appropriate. If a
Force Majeure Event continues for more than forty-five (45) days, then the
Party able to perform may terminate this Agreement with Cause.
7.30 No Third Party Beneficiaries. This Agreement is solely by and between
Z-Tel and MCI. Except to the extent specifically set forth in this Agreement,
no third party has nor will have any direct, indirect or beneficial rights in
connection with this Agreement.
7.31 Assignability. This Agreement is not assignable in whole or in part by
either Party without the written consent of the other Party, which consent
shall not be unreasonably withheld. Without the prior written consent of MCI,
not to be unreasonably withheld, (i) Z-Tel shall not assign, transfer, convey,
or pledge this Agreement or any interest therein, whether by operation of law
or otherwise; and (ii) no interest in this Agreement shall be sold, assigned,
transferred, mortgaged, pledged, conveyed or encumbered, whether voluntarily,
involuntarily or by operation of law or otherwise (including, without
limitation, by merger, consolidation, dissolution, or voluntary or involuntary
sale). It is expressly agreed that MCI may withhold or condition such consent
based upon such matters as MCI may in its reasonable discretion determine,
including, without limitation, the experience, expertise and creditworthiness
of any potential assignee, the assumption by any assignee of all of Z-Tel's
obligations hereunder by undertakings enforceable by MCI, and receipt of such
representations and warranties from any assignee as MCI may reasonably request,
including such matters as its organization, existence, good standing and
finances and other matters. At the time of any assignment of this Agreement
that is approved by MCI, the assignee shall assume all of the obligations of
Z-Tel under this Agreement pursuant to an assignment and assumption agreement
reasonably satisfactory to MCI. Any assignment, transfer, conveyance, pledge or
mortgage in violation of this Section shall be voidable at the sole option of
MCI. MCI may assign its rights and obligations under this Agreement to an
Affiliate with the approval of Z-Tel, so long as MCI remains ultimately
responsible for the performance of the assignee.
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7.32 Cumulative and Severable Nature of Rights. The Parties acknowledge and
agree that various rights and remedies associated with this Agreement are
cumulative, severable and nonexclusive of one another and of any other
provision of this Agreement. Except as expressly set forth in this Agreement,
nothing in this Agreement will limit any right or remedy the Parties may have
under this Agreement or pursuant to Law or equity for any breach of this
Agreement by the other Party.
7.33 Severability. Every provision of this Agreement is intended to be
severable. If any provision or portion of a provision is deemed by a court or
regulatory authority of competent jurisdiction to be illegal or invalid, then
the remainder of this Agreement will not be affected and the Parties will
negotiate replacement language in good faith. Moreover, any provision of this
Agreement that is determined to be unreasonable, arbitrary or against public
policy will be modified by the Parties in good faith negotiations so that it is
not unreasonable, arbitrary or against public policy.
7.34 Notices.
Any notices or deliveries permitted or required by this Agreement will
be deemed delivered (i) upon delivery by messenger, if a receipt is obtained
for delivery, (ii) one day after timely deposit for overnight delivery with
Federal Express, United Parcel Service, Airborne Express or similar nationally
recognized overnight delivery service, if such service obtains a confirmation
of delivery, (or iii) five days after mailing, if mailed via certified or
registered U.S. mail, return receipt requested; provided the notice is
delivered, deposited for delivery, mailed or sent to the Party's address as set
forth below:
Z-Tel:
Z-Tel Communications, Inc.
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000.
MCI:
Xxxxx X. Xxxxxx
Chief Operating Officer
Xxxxxxxx X. Xxxxxx
Chief Financial Officer
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, XX 00000
If the notice is to Z-Tel, a copy, which will not constitute notice,
is delivered, deposited for delivery, mailed or sent in the same manner to:
Legal Counsel
63
Z-Tel Communications, Inc.
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000.
and, if the notice is to MCI, a copy, which will not constitute notice, is
delivered, deposited for delivery, mailed or sent in the same manner to:
Xxxxxx X. X'Xxxx III
Senior Vice President and General Counsel
MCI
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, XX 00000
In cases where this Agreement calls for receipt of notice, then such
notices will be deemed made upon actual receipt by the Party to which notice is
delivered. Any Party may change the address to which notices are to be
delivered by giving notice of the change of address in the manner set forth
above; except, however, that notwithstanding the foregoing provision, notice of
a change of address will be deemed made upon actual receipt of the notice by
the other Party. The foregoing shall in no way limit the manner and method by
which either Party may give notice of disclosure of Confidential Information
pursuant to Section 4.1.4 provided such Party acts in good faith.
7.35 Waiver. No failure or delay on the part of either Party to this
Agreement in the exercise of any right, power or remedy the Party may have will
operate as a waiver, nor will any single or partial exercise of any right,
power or remedy by either Party preclude any other or further exercise of that
right, power or remedy or the exercise of any other right, power or remedy. No
express waiver or assent by any Party to any breach of or default in any term
or condition of this Agreement will constitute a waiver of or assent to any
succeeding breach of or default in the same or any other term or conditions of
this Agreement.
7.36 Construction. This Agreement was negotiated at arms' length and will
not be construed more strongly against any Party regardless of which Party was
responsible for its preparation. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural will include
the singular and the plural, and pronouns stated in the masculine, feminine or
neuter gender will include the other genders. The words "Agreement," "hereof,"
"herein" and "hereunder" and words of similar import referring to this
Agreement refer to this Agreement as a whole, including Exhibits, and not to
any particular provision of this Agreement. Whenever the word "include,"
"includes" or "including" is used in this Agreement, it will be deemed to be
followed by the words "without limitation." The various headings contained in
this Agreement are inserted only as a matter of convenience and in no way
define, limit or extend the scope or intent of any of the provisions of this
Agreement.
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7.37 Exhibits. All exhibits, schedules and other attachments to this
Agreement are hereby incorporated by this reference as integral parts of this
Agreement.
7.38 Execution and Counterparts. This Agreement may be executed in two or
more counterparts, each of which will be deemed an original, and all of which
will constitute one and the same instrument.
7.39 Binding Effect. This Agreement will be binding upon and inure to the
benefit of the respective successors and permitted assigns of the Parties to
this Agreement.
7.40 Fax Signatures. Signed facsimile copies of this Agreement, addenda,
attachments and exhibits will legally bind the Parties to the same extent as
original documents.
7.41 Saturday, Sunday or Legal Holiday. When the last day of a period
during which an act may be performed or when notices are deemed delivered under
this Agreement falls on a Saturday, Sunday, or legal holiday that period will
be deemed to end on the next succeeding day, which is not a Saturday, Sunday or
legal holiday.
7.42 Entire Agreement. With respect to its subject matter, this Agreement,
together with any attachments, addenda (including subsequent addenda),
schedules or exhibits, contains all the understandings and agreements of the
Parties and supersedes all previous and all contemporaneous agreements,
understandings, discussions and negotiations between the Parties, whether
written or oral. The Parties agree that no letter of intent between them, no
previous draft of this Agreement used by them and no similar version of this
Agreement used by either Party in dealings with others will be admissible as
evidence (whether in any arbitration or court of law) in any proceeding that
involves the interpretation of any provisions of this Agreement. Except as
otherwise expressly provided herein, this Agreement will not be modified or
amended except by an instrument in writing signed by both MCI and Z-Tel.
7.43 Governing Law. Provisions of this Agreement subject to the
jurisdiction of the Federal Communications Commission will be governed and
interpreted in accordance with applicable Federal Laws. Provisions of this
Agreement subject to the jurisdiction of a State Regulatory Authority will be
governed and interpreted in accordance with applicable Federal and State Laws.
In all other cases, this Agreement will be governed and interpreted under
federal law and the laws of the State of Florida, without reference to its
principles of conflict of law.
7.44 Venue. The Circuit Court in and for Hillsborough County, Florida and
the United States District Court in and for the Western District of Florida
shall be the sole venues for any litigation arising directly or indirectly from
the relationship created or the transactions contemplated by this Agreement.
Each of the Parties consents to the venue of any such court and waives any
argument that any such court does not have jurisdiction over such party or that
venue in any such forum is not convenient.
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7.45 Technology Upgrades. Notwithstanding any other provision of this
Agreement, Z-Tel will have the right to deploy, upgrade, migrate and maintain
its network and operational support systems at its discretion, consistent with
the applicable Specifications and SLAs, and consistent with Z-Tel's obligations
pursuant to Section ___ with respect to providing, under license to MCI, all
Software and other materials and Intellectual Property Rights conveyed by
licenses ******** issued to MCI and relevant to such modifications. Nothing in
this Agreement will limit Z-Tel's ability to modify its network and operational
support systems to the extent permitted hereunder by applicable Law through the
incorporation of new equipment or software or otherwise.
7.46 Disaster Recovery and Data Backup. Z-Tel and MCI agree that they will
work together to develop, not later than 30 days after the Effective Date of
this Agreement, a disaster recovery plan and off-site data backup and retrieval
system based upon the data backup plan in attached Exhibit 14. Z-Tel agrees
that it will implement, as soon as practicable, such a jointly developed
disaster recovery plan and off-site data backup and retrieval system; provided,
however, that any costs incurred by Z-Tel associated with the implementation of
such a data backup and retrieval system are reimbursed by MCI as Direct Costs,
subject to MCI's pre-approval.
7.47 Payphone Services Prohibited. Notwithstanding any other provision of
this Agreement, under no circumstances may MCI use any facility or service
provided by Z-Tel under this Agreement in connection with the provision of
public pay telephone facilities or services.
7.48. Signing Bonus. Upon the execution and delivery of this Agreement by
the Parties, Z-Tel will pay MCI a signing bonus of $2,330,000. Payment of this
signing bonus is contingent and conditioned upon the execution and delivery of
the Subscription, Preemptive Rights, and Registration Rights Agreement
described at Section 6 of this Agreement.
66
7.49 This Agreement has been executed as of the date first set forth above.
Z-TEL COMMUNICATIONS, INC. MCI WORLDCOM Communications, Inc.
By: By:
-------------------------- ---------------------------------
-------------------------- ---------------------------------
Print Name Print Name
-------------------------- ---------------------------------
Title Title
67
EXHIBIT 1
REQUIREMENTS STATEMENT
Z-TEL WHOLESALE SERVICES
REQUIREMENTS STATEMENT
For
MCI
Exhibit 1, p. 1 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Z-TEL WHOLESALE SERVICES
REQUIREMENTS STATEMENT
FOR
MCI
TABLE OF CONTENTS
Overview
1.0 Customer Acquisition
1.1 Product Development and Set-Up
1.2 Product Requirements
1.3 Product Management and Marketing
1.4 Ordering
1.5 Provisioning
1.6 Fulfillment
2.0 Customer Care
2.1 Call & Ticket Management
2.2 Account Maintenance
2.3 End User Correspondence
3.0 Wholesale Order Processing, Billing & Collections
3.1 Order Processing
3.2 CDR Processing
3.3 Billing
3.4 Payment Processing
3.5 Collections
3.6 Fraud
4.0 Access Billing & Revenue Assurance
4.1 Access Billing
4.2 LEC Reconciliation
4.3 Revenue Assurance
5.0 Business Support
5.1 Financial Reporting
5.2 PSC Complaints
5.3 LEC Relations & Regulatory
Exhibit 1, p. 2 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
TABLE OF CONTENTS
6.0 Non-LW Based Services
7.0 Software
7.1 Category 1 Software
7.2 Category 2 Software
6.1 Category 3 Software
7.4 Category 4 Software
8.0 Separate Ancillary Services
8.1 Preapproval from MCI Not Required
8.2 Preapproval from MCI Required
8.3 Development of New Products, Processes or Software
8.4 Other Unforeseen Costs for Ancillary Services
9.0 Wholesale Operations Support Team
9.1 Implementation Support
9.2 On-Going Support
10.0 Governance
10.1 Overview
10.2 Governing Body
10.3 User Steering Committee
10.4 Service Management Committee
10.5 Governance Roles and Responsibilities
11.0 Change Control Process and Service Modifications
11.1 Control Process
11.2 Service Modifications
11.3 Pending Development
12.0 Reporting
12.1 Overview
12.2 List of Wholesale Reports for MCI
12.3 List of Data Feeds for MCI
Exhibit 1, p. 3 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
OVERVIEW
This Z-Tel Requirements Statement ("RS") describes and defines, at a high level,
the Services and Software that Z-Tel will provide to MCI so that MCI can provide
its Local Wholesale (LW) Based Services and non-LW Based Services to MCI
customers. This document is organized by the major processes required to sell,
deliver and maintain the services and support provided pursuant to the AGREEMENT
FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES, ANCILLARY SERVICES
AND TECHNOLOGY LICENSE between MCI and Z-Tel.
There are twelve (12) major components to the Z-Tel / MCI relationship.
1. Customer Acquisition
2. Customer Care
3. Wholesale Billing & Collections
4. Access Billing and Revenue Assurance
5. Business Support
6. Non-LW Based Services
7. Software
8. Ancillary Services
9. Operations Support
10. Governance
11. Change Control & Scope of Work Modifications
12. Reporting
The structure of the RS is intended to:
- Document and describe, in sections 1 to 5 listed
above, the Z-Tel Services and MCI responsibilities
required to meet the business objectives within each
activity/process for LW Based customers.
- Document and describe, in section 6 listed above, the
Z-Tel Services and MCI responsibilities required to
meet the business objectives within each
activity/process for non-LW Based customers.
- Document and describe, in section 7 listed above, the
Software required to provide Services to MCI
customers.
- Document and describe, in section 8 listed above, the
mechanisms by which direct cost estimates for
Ancillary Service work will be submitted and approved
and bills for Ancillary Service work will be paid.
- Document and describe, in sections 9 to 12 listed
above, the structure and work activities required to
meet Z-Tel and MCI business objectives.
Exhibit 1, p. 4 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.0 CUSTOMER ACQUISITION
1.1 PRODUCT DEFINITION AND PRODUCT SET-UP
This process supports customer product definition, product
approval and product set-up. Z-Tel and MCI have some joint
responsibility within this process and must cooperatively work
together to ensure that all activities are completed.
Z-TEL SERVICES
- Consumer Market Entry Schedule(1)
- Z-Tel will support the following states for provisioning
********
********
- Small Business Market Entry Schedule
- Z-Tel will support the following states for provisioning via
********
- Implement Product
- Implement Local Calling Area
- Implement Service Area
- A table of NPA/NXXs that MCI provides will define Service
availability. The MCI Service availability list cannot be
greater than that of Z-Tel and should never contain an NPA/NXX
combination that
MCI RESPONSIBILITIES
- Forecasts -- Monthly Forecasts
- MCI will provide a six month rolling forecast every month
- The forecast will separate consumer and small business
- The monthly forecast will include:
- a) Total sales,
- b) Net adds,
- c) Average number of lines per account,
- d) Number of 800#,
- e) Average number of Voicemailboxes per account,
- f) Number of concurrent MCI users on the OSS, and
- g) Total number of MCI users on the OSS.
- Forecasts -- Quarterly Forecasts
- MCI will provide a quarterly forecast by state
- The forecast will separate consumer and small business
- The quarterly forecast will include:
- a) Total sales,
- b) Net adds,
- c) Average number of lines per account,
- d) Number of 800#, and
- e) Average number of Voicemailboxes per account.
********
Exhibit 1, p. 5 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Z-TEL SERVICES
is not found in the Z-Tel service
availability list.
- Z-Tel will restrict any product with a local component from
being offered in NPA/NXX combinations that do not appear on
MCI's Service availability list.
- Define Product
- MCI Service Representative should only see the product
availability and selection that are applicable/available to a
given customer.
- Z-Tel will support MCI defined products ******** that have the
following components
- Integrated local and long distance
- Ability to add additional lines to an account
- Voice Mail
- via Z-Node rather than RBOC platforms
- Load Billing Data
- Review Product Billing Request Form
- Update Portfolio Manager
- Update Pre-processors with Calling Areas -
- MCI will use Z-Tel's established Local Calling Areas
- Update ******** - only if substantial changes to xxxx format
are required, i.e. any system change requiring an invoice
change, implementation must be negotiated
- System/Network Updated
- Update BAN/PIC Table
- Update Ring Information (RTS)
- Develop Web Content (Joint Responsibility)
- Update Z-Tel Controlled Web Site -
- Receive Web Content Proposal from MCI
- Review Content and Determine Work Effort Required
- Determine Release the Content will be in
- Set Up NDM (Network Data Mover)
MCI RESPONSIBILITIES
- Legal/Regulatory
- File Retail Tariffs as Required
********
- Define Product
- Outline Product Offering & Definition
- Fill out Z-Tel Product Billing Request (PBR) Form
********
of Z-Tel's serviceable area)
- Maintain Service Availability list by NPA/NXX
********
- Mapping the app/cam or DNIS (Dialed Number Information
Services) to sales groups to pass information to ****
for product availability and selection.
- MCI will determine the product availability and
selection that are applicable/available to a given
customer.
- Load Billing Data
- Define and provide rates
- Update and Verify Tariff Valid
- System/Network Updated
- Develop Web Content (Joint Responsibility)
- Develop WEB Content Proposals
- Implementation
- Testing
- Training
- Beta Testing in Production
Exhibit 1, p. 6 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.2 PRODUCT REQUIREMENTS
Products provided in conjunction with this Requirements Statement will
comply with the following provisions and limitations:
1.2.1 MARKET ENTRY
- Consumer Market Entry Schedule - see section 1.1
- Small Business Market Entry Schedule - see section
1.1
- Z-Tel will perform certain functions based on the MCI
defined Service Availability
- One NPA/NXX table (MCI provided) will define
Service availability for Consumer and Small
Business.
- Z-Tel will restrict any service with a local
component from being offered in NPA/NXX
combinations that do not appear on MCI's
Service Availability List
- MCI can define products and pricing plans by
NPA/NXX level.
********
1.2.2 MCI PRODUCTS ON Z-TEL PLATFORM
1.2.2.1 Z-Tel will support MCI defined products via UNE-P that have
the following components:
- Integrated local and long distance
- Ability to add additional lines to account
- The following product features will be supported
where available:
********
NOTE: Feature functionality and availability are ILEC
and switch dependent.
- Z-Tel will support Operator Service and Directory
assistance via the ILEC platform
********
- Consumer:
********
1.2.2.2 The following Z-Node features will be supported via the Z-Node
********
- Voicemail
- Find Me
- Notify Me (via E-Mail)
Exhibit 1, p. 7 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.2.2.3 Each defined product should be able to:
********
1.2.2.4 Relative to MCI end-user access to the Z-Node
- Z-Tel will support dial-up access to the Z-node platform via:
- Dialing "00" from LW Based ANI
- Dialing LW Based ANI
- (Dialing via this method may require end
user to manually enter Z-Line number and
PIN)
********
1.2.2.5 Relative to movement among MCI product offerings:
********
Exhibit 1, p. 8 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.2.2.6 Relative to specialized Consumer product offerings:
********
- Z-Tel will support MCI defined Link-up credit for all eligible
MCI Residential LW-based customers
********
- Z-Tel will support the ability for a customer to select Inside
Wire repair as a product feature.
1.2.2.7 Relative to specialized Small Business product offerings:
********
1.2.2.8 The following types of Directory Listings will be supported
- Main Listing (Business and Residential)
- Additional Main
- Business & Residential Additional
- Non-Listed (is not listed in the directory but is listed in
the 411 database)
- Non-Published (not listed in the directory or 411 database)
- Primary Caption (not residential)
- Primary Straight Line Under (SLU) (not residential)
Exhibit 1, p. 9 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.2.3 PROMOTIONS
- Z-Tel will support MCI promotion selection via the desktop or
as part of the bundled product. The ability to review every
promotion and determine if system changes are required is
necessary before committing to a promotion installation
timeline. A process for communicating promotional information
will be established similar to that of the PBR.
- Promotions can be:
- Awarded via fulfillment stream
- Awarded via billing credit
1.2.4 BRANDING
- Z-Tel will brand or silent brand Operator Services and
Directory Assistance for MCI customers on Z-Tel platform, as
such branding becomes available specific to MCI end users.
- Z-Tel will brand web sales, account maintenance, and voicemail
sites within reason, as requested by MCI.
- Z-Tel will brand invoices and remittance envelopes as
requested by MCI.
- Z-Tel will change voice prompts as reasonably requested to
brand the Z-Node prompts for MCI Customers.
1.2.5 CHANNEL
- Z-Tel will support the provisioning of all LW based orders
sent from MCI representatives through MCI's access to Z-Tel's
suite of applications.
- Z-Tel will support distinguishing sales made through the
inbound and outbound channels through the ********
- determine product and pricing plan
availability and also whether MCI will require the customer to
go through a back-end deposit collection process before
processing an order.
********
1.2.6 SUPPORT FOR MCI PARTNER MARKETING
- Z-Tel will support the following aspects of MCI's partner
marketing as requested by MCI, including:
********
Exhibit 1, p. 10 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.2.7 WEB SALES AND SERVICE
- Sales flow will be branded MCI with a single MCI brand and or
co-branded with partner graphics if applicable. Any other
brands (ex. MCI Small Business) will be dealt with separately
as defined in section 10.2 (service modifications).
- Z-Tel will support online account maintenance and My Z-Line
functions for LW based customers.
- MCI Residential Customers will be able to order service
on-line, manage their account, and access Z-Node features from
the web.
- MCI Small Business Customers will be able to manage their
account and access Z-Node features from the web.
- The Account Management portal will link to online Z-Line
features.
1.2.8 CUSTOMER INVOICING
********
- MCI must define the universe to which the message applies:
- Consumer/ Small Business
- State
- Product
- MCI must define what section to place in:
- Front page
- Product Level
- General Information
- Duration
********
1.2.9 FULFILLMENT
- Z-Tel will support all of the following Fulfillment
transactions:
- New Service
- Migrations
- Maintenance Orders
- Jeopardy Post Cards - note this data can be retrieved
from the database but Z-Tel will not send a file
- NPA Split
- Refulfillment - this will be handled via Service
Request and manually processed by MCI Reps
- Z-Tel will transmit fulfillment activity and transactions
******** using the protocol specified and in the format
specified by MCI.
- Z-Tel will transmit fulfillment files to Fulfillment House of
MCI's choice once all components of the order are provisioned.
- Z-Tel will provide pre-advice with each fulfillment file being
sent to fulfillment vendor.
********
Exhibit 1, p. 11 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
- Z-Tel will notify MCI Fulfillment team of any changes to the
interface between Z-Tel and the Fulfillment House at least 30
days prior to the change. Z-Tel and the MCI Fulfillment team
will work together to develop an appropriate ICD (Interface
Control Document) to reflect the change.
1.2.10 DESKTOP DATA ROUTING
- ADP
- Z-Tel will give MCI ADP application source code.
- Z-Tel will support application for problem resolution
for first 90 days of production.
- MCI will assume support responsibility after first 90
days of production.
- MCI will be responsible for ********
infrastructure related issues.
- CCI
- Z-Tel will support CCI application and provide
enhancements based on Z-Tel's own CCI design/upkeep.
- IVR
- Z-Tel will support IVR for problem resolution
1.2.11 MCI CALLING CARD
The MCI calling card will be used, in lieu of the Z-Tel travel card,
for all domestic, international outbound/inbound and country-to-country
calling card calls. ********
The following rules will apply to each company:
- Z-Tel will support MCI Calling Card Services in the following
manner
********
Exhibit 1, p. 12 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
- Z-Tel will support an option for lower rated domestic
calling card calls for a monthly fee.
- Z-Tel will also:
********
- MCI will:
********
Exhibit 1, p. 13 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
********
Exhibit 1, p. 14 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.3 PRODUCT MANAGEMENT AND MARKETING
This process supports Inbound, Outbound, Agent, LOAs and ELOAs as sales
channels. MCI will develop and manage all Sales leads including TPV and
commissioning.
Z-TEL SERVICES
- Define/Develop Marketing Strategy and Materials
- Update ******** with Required Data (SSN)
- Implement New State
- Define Rollout Strategy (Joint Responsibility) -
- Z-Tel Has Regulatory Presence & Relationship w/ ILEC
- Rollout Schedule for Each Company Must Align with OSS
Readiness in Market
- Operations Readiness (Joint Responsibility)
- Systems & Processes Must Be Ready to Go
- Beta Testing (Joint Responsibility) -
- Both Companies:
- Will Establish Parameters for Timeline
- Will Establish Number of Orders for Testing
MCI RESPONSIBILITIES
- Define Customer Profile and Products
- Develop High Level Customer Profile of Desired Customer Base
- Modify Profile to Account for Unique Market Characteristics
- Define Serviceable Areas
- Define Marketable Areas
- Define Product Offering
- Develop Rates
- Develop Campaign
- Define/Develop Marketing Strategy and Materials
- Develop Marketing Materials
- Develop Sales Tools and Scripts
- Communicate Marketing and Sales Strategy to Sales Personnel
- Maintain Product Information
- Conduct Customer Promotion
- Develop Promotional Strategy
- Develop Materials for Promotion
- Develop List of Prospective Customers for the Promotion
- Send Promotional Material to Customer
- Obtain Customer Details for Contact
- Track Promotion Success
- Manage Sales Leads
- Generate Cross-Sales Opportunities
- Obtain Leads from Third Parties
- Screen Leads Against Do Not Call List
- Screen Leads
- Commissioning System
- Implement New State
- Define Rollout Strategy (Joint Responsibility)
- Z-Tel Has Regulatory Presence & Relationship w/ ILEC
- Rollout Schedule for Each Company Must Align with OSS
Readiness in Market
- Define Sales Estimates
Exhibit 1, p. 15 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Z-TEL SERVICES
MCI RESPONSIBILITIES
- Filings with State PUC, Tariffs
- Operations Readiness (Joint Responsibility)
- Systems & Processes Must Be Ready to Go
- Beta Testing (Joint Responsibility) -
- Both Companies:
- Will Establish Parameters for Timeline
- Will Establish Number of Orders for Testing
Exhibit 1, p. 16 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.4 ORDERING
This process supports all of the functions associated with the sale of
the product to an MCI customer
Z-TEL SERVICES
- Quality Assurance
- Z-Tel will support process questions that are system related
- Z-Tel will assist ******** in training the MCI Trainer
MCI RESPONSIBILITIES
- Initiate Sales Contact
- Receive Inbound Call
- Initiate Outbound Call
- Receive Online Order
- Receive e-LOA
- Solicit Customers Through Agents
- Product Inquiries
- Gather Customer Information
- Obtain Customer's Name and Address
- Determine Payment Option and Validate
- Customer Screening
- Service Area Screening
- Credit Score
- Perform LEC Validation
- Account Set-Up
- Select Products Requested
- Select Sales Serial Number (Commissioning)
- Set Due Date
- Account Created
- Partner Information Loaded
- Validate Order and Submit
- Third Party Verification (TPV)
- TPV Fallout
- Quality Assurance
- TPV Audits
- Do Not Call Lists
- Provide Training - MCI Will Train the Reps
- Call Monitoring
- Order Quality Check
- ******** Will Create Desktop/Tech Top System User Manuals that
will be used by MCI Trainers
- Process Online Orders
- Perform LEC Validation
- Select Products Requested
Exhibit 1, p. 17 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.5 PROVISIONING
This process supports the provisioning for local service, long distance
service and Z-Node services.
Z-TEL SERVICES
********
MCI RESPONSIBILITIES
********
Exhibit 1, p. 18 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Z-TEL SERVICES
********
MCI RESPONSIBILITIES
Exhibit 1, p. 19 of 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.6 FULFILLMENT
This process supports pre-defined customer notification during the
Provisioning and Customer care processes. Welcome packages and
instructions are mailed during Provisioning by MCI.
Z-TEL SERVICES
- Support Ordering & Provisioning
- Z-Tel Receives Completion Notice that Triggers Fulfillment
- Z-Tel Sends Daily Fulfillment File to MCI Vendor
- Customer Initiated Notification
- Z-Tel Receives Completion Notice that Triggers Fulfillment
- Z-Tel Sends Daily Fulfillment File to MCI Special Notifications
- Special Notification
- Collection
- Usage Blocks
- Fraud Notices
MCI RESPONSIBILITIES
- Support Fulfillment for Ordering & Provisioning
- New Order
- Order Confirm & Product Guide
- Travel Card Package
- Welcome Package with Product Information
- New State Beta Testing Packages
- Service Activation Problems
- Customer Initiated Notification
- Billing & Local Call Detail Inquiries
- Change Order Requests (Joint Responsibility)
- Re-Fulfillment Requests
- Invoice Re-Prints
- PSC Complaint Response
- Correspondence Response
- Special Product Request (Joint Responsibility)
- Suppress email communications
- Special Notification
- Billing Error & Credit Notices
- Usage Blocks
- NPA Splits
- Fraud Notices
- Marketing Notifications
- New Products
- Rate Change Information
- Xxxx Inserts and Messages
- E-Mail Messages
- Xxxx Inserts and Message
- Incentive Fulfillment
- Quality Assurance
- Returned Fulfillment
- End to End Reconciliation
- Edit request
- Quality Print Review
EXHIBIT 1, P. 20 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
2.0 CUSTOMER CARE
2.1 CALL & TICKET MANAGEMENT
This process supports inquiries from customers about provisioning,
repair and billing issues, concerns and problems.
Z-TEL SERVICES
- Call Flow Management
- Provide and deliver IVR software
- Z-Tel will email work requests and rejects to MCI's ********
MCI RESPONSIBILITIES
- Call Flow Management
- Create IVR Scripting & Define Functionality
- Update IVR for Script Changes & Functionality
- Workforce
- Staffing Forecasts
- Agent reports
- Quality Assurance
- Planning & Analysis
- Quality Monitoring
- Send Customer Info When Wronged by ILEC
2.2 ACCOUNT MAINTENANCE
This process involves maintaining updated customer information,
resolving billing inquiries, processing service cancellation requests,
providing service usage instructions, handling change order requests
and addressing repair issues.
Z-TEL SERVICES
- 3rd Level Escalation Support
MCI RESPONSIBILITIES
********
EXHIBIT 1, P. 21 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Z-TEL SERVICES
MCI RESPONSIBILITIES
********
EXHIBIT 1, P. 22 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
2.3 END USER CORRESPONDENCE
This process supports responses to customers through the mail or web.
PSC correspondence is handled separately in section 5.2
Z-TEL SERVICES
- 3rd Level Escalation Support
MCI RESPONSIBILITIES
- Returned Mail
- Invoices
- Collection Letters
- Mail Inquiries
- Complaint
- Disconnect Request
- Payment
- Suggestions
- Web Inquiries
- General Inquiries and Escalations
- Suggestions
3.0 WHOLESALE ORDER PROCESSING, BILLING & COLLECTIONS
3.1 CDR PROCESSING
********
EXHIBIT 1, P. 23 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Z-TEL SERVICES
********
MCI RESPONSIBILITIES
- Send CDRs for Long Distance to Z-Tel ********
- MCI will send all CDRs for card calls and will be re-rated for
international and domestic, except inbound international
- Develop and maintain and provide "classic" CDR format documentation.
EXHIBIT 1, P. 24 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
3.2 BILLING
This process supports the customer invoicing and taxing activities.
Products and rates are loaded into the Z-Tel system along with
specific xxxx messages. Several cycles are run each month. Xxxx
Verification is completed to ensure the accuracy of each customer's
statement. Invoices are printed and mailed along with a remittance
slip for payment. Taxes are calculated on each invoice and then a file
is produced each month for reporting and tax filing.
Z-TEL SERVICES
- Maintain Customer Billing Information
- Maintain Rate Plan Information
- Maintain Retail Tax Rate Information
- Maintain Xxxx Messages
- Maintain Xxxx Cycle Schedules
- NPA Splits
- Run Xxxx Cycle
- Verify Set-Up
- Process Pre-Scripts
- Run Xxxx Cycle
- Certify Xxxx Cycle
- Verify Xxxx Run
- Approve Cycle
- Invoicing
- Create Invoice File
- Verify File
- Send Files for Processing
- Support monthly messaging requirements (see requirements in
Customer Invoicing - section 1)
- Z-Tel will deliver a sample of hard copy invoices to the MCI
Audit and Invoice Strategy teams following each invoice cycle for
review.
- Compute Taxes
- Z-Tel will employ taxing and surcharging procedures and
applications as approved by MCI.
********
MCI RESPONSIBILITIES
- Process Refunds
- ******** (MCI Legacy Customers)
- Provide Data Feed of MCI Legacy Non-LD Customers to Z-Tel
- Invoicing
- Deliver monthly message targeting & verbiage to Z-Tel within
agreed upon timelines.
- Compute Taxes
- MCI will load this modified output file ******** into its tax
reporting system to generate reports and provide the MCI tax
department information needed for MCI to file and pay taxes.
EXHIBIT 1, P. 25 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Z-TEL SERVICES
- Z-Tel through ******** will place these taxes on the xxxx,
aggregating like taxes into a single entry on the invoice. Once
the xxxx cycle is completed, an output file (modified to support
MCI requirements) will be generated that provides the tax detail
associated with that xxxx cycle.
- Finalize Xxxx Cycle
- Process Tax File
- Create Credit Card Files
- Generate Financial Reports as agreed to in Reporting Section
MCI RESPONSIBILITIES
3.3 PAYMENT PROCESSING
This process supports Credit Card (CC) and Lockbox processing. Customers
can select to have their monthly xxxx applied to their credit card. In lieu
of automatic payments, customers can send in a check that will be posted to
their account. Any payments accounts set-up (Lockbox, Credit Card, Western
Union) will be set up as an MCI account. However, Z-Tel will receive a
daily copy of the file containing payment information in order to update
customer accounts.
Z-TEL SERVICES
- Daily Payments
- Lockbox and Walk-Up - Z-Tel Pulls Files
- Credit Card Payments
- Non Sufficient Fund Checks will be Debited Back to Account and
NSF Fee Applied to Account
- Z-Tel will Debit Back to Account and NSF Fee Applied to Account
via lockbox feeds
- Response must be triggered at Z-Tel from CC Rejects File for
customer notification, AR system payment reversal, and account
change to direct remit.
- Cycle Processing
- Credit Card
- Quality Assurance
MCI RESPONSIBILITIES
- Daily payments
- Credit Card Rejects File
- Non Sufficient Fund Collections
- Notification of Non Sufficient Fund Checks will be sent to Z-Tel
via Lockbox feed.
- Quality Assurance
- Suspended Research
EXHIBIT 1, P. 26 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
3.4 COLLECTIONS
This process supports the ability to manage customers' account balance
related to timely invoice payments. MCI is responsible for all
customer bad debts
Z-TEL SERVICES
********
MCI RESPONSIBILITIES
- Past Due
- Inbound and Outbound Calling - Accept/Initiate Calls to Customer
- Customer Payment
- SNIPs
- Inbound and Outbound Calling
- SNIP Rejects
- Research and Resolve MCI and ILEC caused rejects
- Research pending and overdue orders (Operational Issues)
- Restoral
- Restoral Rejects
Research and Resolve MCI and ILEC caused rejects
Research pending and overdue orders (Operational Issues)
- Update Accounts
- Disconnect
- Disconnect Rejects
Research and Resolve MCI and ILEC caused rejects
Research pending and overdue orders (Operational Issues)
- Collectors
- Internal
- OCAs
- Credit Counseling Agencies
- OCA Eligibility
Provide Z-Tel with eligibility rules
- Quality Assurance
- Analysis
- Workforce Management
- Rep Monitoring
- Deliver Training
EXHIBIT 1, P. 27 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Z-TEL SERVICES
Define eligibility based on MCI business rules
- Quality Assurance
- Process Definition and Create ******** Training Materials
for MCI
MCI RESPONSIBILITIES
3.5 FRAUD
This process supports activities related to identifying and
eliminating fraudulent usage. Usage monitoring is performed along with
fraud alerts related to multiple or long duration calls to high fraud
countries. Long Distance blocks may be used to help stop suspected
usage fraud and increased bad debt. In addition, identify and payment
fraud is monitored and reported to the appropriate Federal or state
agencies.
Z-TEL SERVICES
- Outside Agency Cases
- Z-Tel Will handle General Requests from Law Enforcement for Call
Records, Traps, etc. (non-Z-Tel/MCI initiated)
MCI RESPONSIBILITIES
- Usage Alerts
- XX Xxxxxxx
- Create Unbilled Usage Alerts
- Work Usage Alerts
- Process Definition & Create Training for MCI Trainers
- Escalations 3rd level
- Fraud
- Identity
- Payments
- Network
- Familiar Fraud
- Usage Fraud
- Outside Agency Cases
- XX Xxxxxxx
- Law Enforcement Agencies for Fraud Cases
- Subpoenas for Fraud Cases
- Quality Assurance
- Case Tracking
- Workforce Management
- Training
- Rep Monitoring
- Internal Controls
EXHIBIT 1, P. 28 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
4.0 ACCESS BILLING & REVENUE ASSURANCE - THIS IS DONE MONTHLY
4.1 ACCESS BILLING
This process supports the process of billing and collecting the access
revenue due Z-Tel from IXC providers.
Z-TEL SERVICES
- Usage Records Processing and Transfer
- Receive Records
- Log Records Received
- Identify Wholesale Owner and Populate for Billing
- ********
- Verify File Received Records
- Research & Correct Errored Records
- Billing
- Test & Verify Rates
- Post Ad-hoc Charges (OC&C, PIC Changes)
- Calculate Bills
- Verify Xxxx Information
- Mail Invoices
- Collections
- A/R Reporting
- Post Payments
- Past Due Payments
- Dispute Management & Reporting
- Calculation of Access Credit for Wholesale Customer
- Data Warehouse & Archive
- Quality Assurance
- Access Revenue Reports
- Access Usage Trending Reports
MCI RESPONSIBILITIES
EXHIBIT 1, P. 29 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
4.2 ********
Z-TEL SERVICES
- File Maintenance
- Receive Billing Data (BDT or Other Format)
- Log ******** Xxxx Data Receipt
- Transfer BDT File & Convert to Readable Format
- Estimating Process for Paper Format
- Contract Reconciliation & ILEC Xxxx Audit
- Perform 200 Plus Automated Audits on BDT
- Identify & Report Valid Charges
- Identify & Report Subscriber Activity
- Identify & Report Discrepancies
- Dispute Management
- Calculate Amounts Over/Incorrectly Billed
- File Disputed Amounts & Provide Detail in ******** Format
- Verify ******** Receipt of Dispute
- Enter Data for Dispute Tracking
- Track & Escalate Through Resolution
MCI RESPONSIBILITIES
EXHIBIT 1, P. 30 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
4.3 COST & REVENUE ASSURANCE
This process supports the analysis and resolution of differences
between ********. These discrepancies could mean gaps in revenue
recognition or cost exposure. Any differences are thoroughly
researched and then corrected. If applicable, disputes are processed
against the ********.
Z-TEL SERVICES
- Reconciliation Support
- Compare ********
- Identify Cost Discrepancies for Disputes
- Provide Detail for ********
- Reporting
- Quality Assurance
- Customers With No Usage
- Closed Accounts With Usage
- Manual Closures - Notify IXC - Depending on TIPCO
- Line Loss
- ********
- Update Accounts
- Notify Vendors
- Work Fallout per Service Level Agreements
- Work Escalation Related to Fallout
MCI RESPONSIBILITIES
EXHIBIT 1, P. 31 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
5.0 BUSINESS SUPPORT
5.1 REPORTING
This process supports the operational, regulatory and executive
oversight required to manage the project
Z-TEL SERVICES
- Reporting
- Provide: Executive Portal Access
- Send Ordering/Provisioning Feed
- Costing & Billing Invoice
- Data Warehouse & Archive
- Provide reports as described in Exhibit 13 to the Definitive
Agreement
MCI RESPONSIBILITIES
- End of Month
- Product Detail
- Credit Detail
- Trial balances
- A/R Aging
- Accounts Receivable
- Aging Report
- Cash Reconciliation
- Regulatory
- FCC Reporting
- State PSC Reporting
- State Reporting
- Tax Filing
- Reporting
- Create Reports Out of Executive Portal
- Pull Data From Repository
EXHIBIT 1, P. 32 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
5.2 PSC COMPLAINTS
This process will support research and resolution of PSC inquiries and
complaints.
Z-TEL SERVICES
- Quality Assurance
- Support 3rd level Escalations
- ILEC Slamming Complaints - assuming it was erroneously sent to Z-Tel, Z-Tel
will forward the complaint to MCI for resolution
- Receive Complaint
- Send Complaints to MCI For Resolution
- Receive MCI Response
- Forward MCI Response as necessary
- Resolve Z-Tel Complaints
MCI RESPONSIBILITIES
- Receive Complaint
- Receive
- Open Case
- Scan Complaint
- Assign to Rep
- Update Account
- Research
- Billing
- Slamming
- Service
- Resolve
- Customer Contact
- Response to PSC
- Account Updated
- Case Closed
- Quality Assurance
- Case Tracking
- Rep Monitoring
- Daily Reporting
- ILEC Slamming Complaints
- MCI Send Response to Z-Tel
5.3 LEC RELATIONS & REGULATORY
This process supports the contacts and relationships with the ILECs
and state tariff support.
Z-TEL SERVICES
- Tariff Support
- Receive ILEC Product Information
- Z-Tel Tariff Filings
- FCC/PSC Guideline Research
- ILEC Relations
- Industry Policy
- Single Point of Contact to ILECs
- ILEC "Bad Acts" Reporting
- LEC Control
- Gather Customer Issues
- Compile Monthly Support Documentation
- Work With NAG on ILEC Disputes and Billing Back to ILEC
- Monthly Tracking
MCI RESPONSIBILITIES
- MCI Tariff Filings
- FCC/PSC compliance
EXHIBIT 1, P. 33 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
6.0 NON-LW BASED SERVICES
STAND ALONE VOICEMAIL OFFERING
6.1 Product Definition
- ********
- Platform interfaces will be branded as specified by MCI.
- No out-dial functions will be enabled.
6.2 The Z-Tel Wholesale Voicemail product will have the following
features:
- Voicemails can be accessed and the voicemail box configured
on the phone and from the web.
- Callers can leave voicemails.
- Voicemails may be listened to, saved, deleted by the
customer.
- PIN protected access to each voicemail box will be provided.
- Customer can be notified of new voicemails by email, email
enabled wireless device, and ICQ IM.
- Personally recorded names and greetings
6.3 Interfaces - The following Interfaces are included:
Provisioning
- ********.
Maintenance
- ********.
Billing
- End User billing will not be supported by Z-Tel
Reports - The following reports will be provided:
- System Performance
- Audit report: lists all SVM accounts with status and
partner ID so that MCI can compare to their own
systems/records.
EXHIBIT 1, P. 34 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
6.4 MCI Responsibilities for the Z-Tel Wholesale Voicemail product:
- MCI will be responsible for all customer contacts, sales,
fulfillment, billing, provisioning of orders, and
provisioning of a CFBNA number and terminating a voice
circuit to Z-Tel.
- MCI will be responsible for providing NPA/NXX splits to
their account Telephone numbers and Login Ids.
- MCI is responsible for developing any systems required to
utilize the Z-Tel XML SVM provisioning gateway.
- MCI is responsible for deploying an appropriate web browser
to access the maintenance tools and for providing data
access to the servicing web server.
- MCI will provide Z-Tel with a monthly and quarterly forecast
in the same format as for the LW services described in
section 1.1
EXHIBIT 1, P. 35 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
7.0 SOFTWARE
7.1 CATEGORY 1 SOFTWARE
The term "Category 1 Software" means Software ********.
******** APPLICATION FUNCTION USE IN PROVIDING SERVICES TO MCI WHERE DOES
THE SOFTWARE
RESIDE
******** Z-Node Services ******** Z-Line(TM) Voicemail takes messages that can be accessed ********
anytime, anywhere from either the phone or the Web. Use
Z-Line Features to listen to, save or delete Voicemail
messages from any personal computer. Messages are listed
by caller phone number.
******** When activated enables a subscriber to provide up to ********
three phone numbers which will be called in sequence
until the subscriber answers. If no answer, caller is
dropped into voicemail. Numbers can be changed by the
subscriber as often as desired from any phone or on the
Web. This feature can also be turned off to send callers
straight to voicemail.
******** Notify Me is a Z-Line feature that automatically ********
notifies the subscriber by e-mail, pager text messaging,
or ICQ online chat each time a Voicemail message is
received. Notify Me can be turned on or off by phone or
from the Web
******** All of the above features can be accessed and maintained ********
by the user via the web (e.g., voice mail can be turned
on/off, find-me numbers can be added/changed/deleted)
******** All software required to provision and maintain Z-Line ********
accounts as well as the OA&M software for operating the
system at scale.
******** OSS Support ******** Parameters that customize the "out of the box" ******** ********
Applications application so the application executes Z-Tel business
rules
******** OSS Support ******** Web-based application that allows visitors to our web ********
Applications site to determine whether or not a specific phone number
they wish to dial would be rated as local to their
account telephone number Requires Internet Browser on
MCI Desktop
******** Allows customer care reps to examine and/or print a list ********
of local calls for the period in question if a user calls
up with questions about exceeding their "cap" (varies by
state and product). The LLC Viewer has been benchmarked
at 100 requests per day
EXHIBIT 1, P. 36 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
VENDOR APPLICATION FUNCTION USE IN PROVIDING SERVICES TO MCI WHERE DOES
THE SOFTWARE
RESIDE
******** Rating engine that processes all incoming CDRs and ********
categorizes/classifies/routes activity to the proper
destination/process. Includes member-to-member rating
******** Scripts executed prior to and following a ******** xxxx run ********
which ensure the integrity of the run and support
validation prior to forwarding the invoices to ********
CCI (Customer ******** Desktop service tool used on the desktop to help manage ********
Care Interface) calls
Sales Support ******** Web-based front end to a reporting menu that allows a ********
Applications user to navigate the reporting hierarchy and request
reports.
System ******** Provides system interface to ******** application ********
Integration
EXHIBIT 1, P. 37 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
7.2 CATEGORY 2 SOFTWARE
The term "Category 2 Software" means ********
******** APPLICATION FUNCTION USE IN PROVIDING SERVICES TO MCI WHERE DOES
THE SOFTWARE
RESIDE
******** ********(6 modules) ******** The Operational Support System (OSS) used to order ********
and provision local, long distance and Z-Tel ********
proprietary services
******** The Operational Support System (OSS) used to answer ********
questions and make changes to local, long distance ********
and Z-Tel proprietary services
******** The Operational Support System (OSS) used to process ********
CDRs received from ILEC & IXC - sort according to
billable events, apply billing rate to events per ********
customers' price plan
******** The Operational Support System (OSS) used to correct ********
and resubmit rejected orders and change orders
Executive Portal ******** Reporting on any information that resides within ********
********
******** CACS ******** Support collection efforts. Formats and sends legally ********
******** sufficient collection notices to delinquent customers ********
******** in various jurisdictions. Tracks history of contact ********
between collection agents and delinquent customers.
******** ******** ******** Provision end user customers with the ILEC. Provides
for transmission of orders for/from ILECs, including ********
translation, mapping functionality, etc. Interacts
with ******** Includes a web-based tool that allows
inquiry re: order status (no client software)
******** Provides for transmission of changes for/from ILECs ********
******** ******** ******** Taxation ********
********
EXHIBIT 1, P. 38 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
7.3 CATEGORY 3 SOFTWARE
The term "Category 3 Software" means
APPLICATION FUNCTION USE IN PROVIDING SERVICES TO MCI WHERE DOES
THE SOFTWARE
RESIDE
Billing Rating center data files for usage rating/industry
reference data for billing
Ordering and Provisioning Credit Card payment processing for the desktop
Ordering and Provisioning NPA/NNX verification of local areas
EXHIBIT 1, P. 39 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
7.4 CATEGORY 4 SOFTWARE
The term "Category 4 Software" means
WHERE DOES
APPLICATION FUNCTION USE IN PROVIDING SERVICES TO MCI THE SOFTWARE RESIDE
Customer Utilization of Call driver database;
Z-Tel Proprietary Services provides historical data
for contacts to Z or MCI
from MCI call centers
(call purpose)
Ordering and Provisioning Database supporting
Ordering and Provisioning Connectivity between ILEC
Customer Service and
Ordering and Provisioning Address verification
software and input to
(where utilized to
generate the appropriate
tax for a jurisdiction.)
Billing Printing of customer
invoices
Web based Ordering and Web server software
Provisioning (no application function)
Web based Ordering and Application Server
Provisioning
Customer Utilization of Operating system
Z-Tel Proprietary Services supporting the web servers
and application servers
for customer services and
sales websites
Customer Utilization of
Z-Tel Proprietary Services
Customer Utilization of Software for IVR cards
Z-Tel Proprietary Services
Customer Utilization of Switch software
Z-Tel Proprietary Services
Customer Utilization of Translates text to speech
Z-Tel Proprietary Services
EXHIBIT 1, P. 41 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
WHERE DOES
APPLICATION FUNCTION USE IN PROVIDING SERVICES TO MCI THE SOFTWARE RESIDE
Directory Server Customer Utilization of Naming Services
Z-Tel Proprietary Services
Customer Utilization of Application Server
Z-Tel Proprietary Services
Collect and rate Usage & Calculate amounts billable to
Billing IXCs for access calling events
Telco Audit Tool utilized by Z-Tel in
providing Revenue
Assurance function and
reconciling ILEC bills
8.0 ANCILLARY SERVICES
8.1 Separate Ancillary Services are those services provided to MCI
that have a
8.2 There are two categories of; (1) those that do not require
and (2) those that do require
8.2.1 Pre-approval from MCI Not Required
EXHIBIT 1, P. 42 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
8.2.2 Preapproval from MCI is Required
8.2.2.1
EXHIBIT 1, P. 43 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
8.1.2.1.7.1 ********
8.1.2.1.7.2 ********
8.2.2.1.8 ********
8.1.2.1.8.1 ********
8.2.2.1.9 ********
8.2.2.1.10 ********
8.2.2.1.11 ********
8.2.3 Development of New Products, Processes or Software
8.2.3.1 Any out of scope or new work that requires
development by Z-Tel will be submitted in
writing by MCI.
8.2.3.2 Z-Tel will review the proposal and provide
MCI with a detailed level of effort that
includes the fixed price cost and the
delivery date.
8.2.3.2.1 Any changes in the original
request will be evaluated by
Z-Tel and the cost will be
provided to MCI
8.2.3.3 MCI can accept, reject or request to
negotiate Z-Tel's response.
8.2.3.3.1 This includes any changes to the
original request
8.2.3.4 No work will begin until both Parties agree
to the terms and cost of the new work
effort, and those terms shall be
memorialized in a Statement of Work.
8.2.3.5 MCI will pay ******** of the cost before
any work begins, ******** when half of the
work effort is completed and the remaining
******** within 30 days after the project
is completed or the product is delivered.
8.2.3.5.1 The cost of all changes will be
paid according to this same
schedule.
8.2.3.6 All disputes will be referred to the
Governing Body.
8.2.4 ********
8.2.4.2 ********
8.2.4.2.1 ********
EXHIBIT 1, P. 44 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
9.0 WHOLESALE OPERATIONS SUPPORT TEAM
The Z-Tel Wholesale Services Support Team's (WSST) primary function is to
facilitate the implementation of the wholesale relationship with MCI and
to provide on-going support and leadership throughout the relationship.
9.1 IMPLEMENTATION SUPPORT
Implementation Support is responsible for the planning, communication
and rollout of each phase of the project as defined in this
Requirements Statement.
Implementation
Support - Project Team assigned to each area of service
- Single point of contact for escalations
- Executive Committee support for unresolved issues
- Logs & Tracks issues and resolution
- Tracks project plan for major milestones and escalates
as necessary
- Handles day to day tasks involved in the administration
of the project
9.2 ON-GOING SUPPORT
Day to day support is provided by four organizational structures;
ACCOUNT MANAGEMENT is the point of contact and responsible for single
point of contact, managing service, resource allocations within Z-Tel
and the ongoing planning with MCI;
SERVICE DELIVERY is responsible for defining day-to-day operational
processes and procedures and delivering quality service to MCI;
RELEASE CONTROL is the focal point for delivering change requests
related to system functionality; and
SYSTEM MANAGEMENT is responsible for day-to-day operation of the Z-Tel
systems and networks including availability, capacity and performance.
Specific work activities and functions of these four groups are:
Account
Management - Establishes and monitors resource allocation
- Provides input to MCI business and IT planning
- Establishes, monitors and reports on service level and
performance metrics
- Single Point of Contact
Service Delivery - Manages service quality levels
- Defines day to day operational procedures
- Research and redefine business rules as needed based on
performance or service levels
Release Control - Coordinates and plans all change requests
- Logs and tracks all requests, reports on status
- Prioritize change requests and approves implementation
schedule
- Monitors testing and user approval
System Management - Defines processes and procedures necessary for
monitoring and responding to systems
- Plans, communicates, schedules and implements changes
to production systems including ILEC Change Control
- Define and implement back-up and recovery procedures
EXHIBIT 1, P. 45 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
- Define and implement security procedures
- Monitors system availability and capacity
9.3 GUIDANCE
The Wholesale Operations Support Team will utilize as guidance in
resolving operational problems the prioritization guidelines published
in Appendix A: Priority Criteria Definitions.
10.0 GOVERNANCE
10.1 OVERVIEW
The purpose of this section is to describe the mechanism for the
parties to work together regarding operational and planning
activities connected with the Agreement. This section is not
intended to constitute the process for dispute resolution. This
section describes:
Each party's designees to govern this Agreement The
communication interfaces between MCI and Z-Tel The specific
roles and responsibilities of each designee
10.2 GOVERNING BODY
Each party will designate its own Account Executive and Account
Manager who together will constitute the Governing Body. The
Governing Body members are listed below:
Z-Tel Representatives MCI Representatives
--------------------------------------------------------------------------------
Account Executive
Account Manager
This Governing Body will meet quarterly alternating between a designated
MCI and Z-Tel site. MCI will have the first meeting. The meeting agenda
will be established to set direction and resolve issues, in accordance with
the following:
- Communicating MCI's business direction, goals, objectives and planning
assumptions to Z-Tel as they relate to the provision of operations
Services
- Discussing site visits to other Z-Tel and MCI facilities for
educational purposes
- Promote leadership and best practices
- Reviewing strategies for the upcoming contract year
10.3 USER STEERING COMMITTEE
The User Steering Committee will be comprised of the following
representatives of each party:
Z-Tel Representatives MCI Representatives
--------------------------------------------------------------------------------
Account Manager
Service Delivery Manager
Release Manager
Directors from Functional
Areas as Required
EXHIBIT 1, P. 46 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
The purpose of this committee is to meet on an ad-hoc basis to discuss the
following:
- Issues with respect to service provision and performance metrics, and
identification of actions required to resolve issues
- Proposed modifications to Scope of operations Services
- MCI's business direction, goals, objectives and planning assumptions
as they pertain to the Operations Services
- Other planned activities or topics of interest
10.4 SERVICE MANAGEMENT COMMITTEE
The Service Management Committee will be comprised of the following
representatives of each party:
Z-Tel Representatives MCI Representatives
Account Manager
Service Delivery Manager
Release Manager
Business Owners as Required
The purpose of this committee is to meet monthly to discuss the following:
- Reporting performance against the Service Level Agreement
- Summarizing key activities and issues for the period
- Highlighting significant planned events
10.5 GOVERNANCE ROLES AND RESPONSIBILITIES
The roles and responsibilities for the following designees are:
MCI & Z-TEL
DESIGNEE RESPONSIBILITY
Account Executive Has overall responsibility for MCI performance under the
Agreement Monitors Z-Tel compliance with the terms of
the Agreement
Raises issues to Z-Tel in a timely and appropriate manner
Account Manager Has Single Point of Contact responsibility for MCI Provides
Z-Tel access to appropriate IT planning and budgeting
information, sales forecasts, service strategy and quality
management information
Facilitates monthly Service Management Review meetings
Escalates issues to the MCI Account Executive as appropriate
EXHIBIT 1, P. 47 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
VP/ Directors, Functional Provides feedback on IT and Operations Services
Areas Provides insight in regard to MCI business direction
Business Owner
OSS Support Manager Has "specific area" responsibility for MCI
performance under the Agreement
Raises issues to the MCI Account Manager as
appropriate
Participates in monthly Service Management meetings
Communicates issues in a timely manner to Z-Tel
Account Manager and team leads
11.0 CHANGE CONTROL PROCESS AND SERVICE MODIFICATIONS
11.1 CHANGE CONTROL
Either Z-Tel or MCI may submit a service modification request
suggesting a change in implementation scope, service operations scope
or service level commitments. Such requests shall be documented in
writing. If MCI submits the request, Z-Tel will make reasonable
efforts to respond with impact analysis within 30 days. If Z-Tel
submits the request it shall include the Z-Tel impact analysis in
writing. The change request and impact analysis will be reviewed by
the Service Management Committee. This committee will be responsible
for approving such requests, approving impacts to schedule, service
levels or pricing, if any and prioritizing implementation timeframes
for service modification requests. Upon approval, Z-Tel will implement
the service modification in the approved timeframes subject to MCI's
approval of any direct cost.
11.2 SERVICE MODIFICATIONS
Potential Service Modifications to Operations Services can be
initiated by either Z-Tel or MCI. Examples of Service Modification
requests are provided below:
Change to the scope of Operations Services.
- Either party requests the other party to add an out-of-scope
application to the Operations Services
- Either party requests the other party to perform out-of-scope
services
- Either party requests the other party to add out-of-scope
developments or functionality
- ILEC Change requires changes in either party's systems
The parties will negotiate any modifications, and no
modifications will be implemented without the approval in writing
of an MCI officer at the Vice President level or above.
11.3 IMPLEMENTATION
EXHIBIT 1, P. 48 OF 48
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
11.3.1 Implementation Procedures and notifications associated with
software deployment are addressed the Change Control Annex
Document Attached to this Document as Appendix B
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12.0 REPORTING AND DATA FEEDS
12.1 OVERVIEW
12.2 LIST OF WHOLESALE REPORTS FOR MCI
Refer to Exhibit 13 of the Definitive Agreement, the Operational and
Financial Report document, for Report details.
12.3 LIST OF DATA FEEDS FOR MCI
EXHIBIT 1, P. 50 OF 48
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EXHIBIT 1
APPENDIX A
PRIORITY CRITERIA DEFINITIONS
PROBLEM SEVERITY LEVELS: Z-Tel/MCI have defined the Service Level
Agreement (SLA) response and resolution times, as well as escalation
procedures for fault calls, based on the following severity levels:
- Priority 1 Severity, Total System Failure
- Priority 2, Major System Failure
- Priority 3, Minor System Failure
PRIORITY 1 - TOTAL SYSTEM FAILURE
A Total System Failure is defined as a situation in which access to any
server or from any work area is denied or extremely limited as further
defined below.
A PRIORITY 1 is defined as:
- An issue impacting ******** of a segment or production floor with
no consistent or proven work-around in place.
- Issue that has already affected > ********K revenue impact.
- System response time is higher than reasonably expected for the
segment, relating to systems or data.
- Issues impacting the installation of a Pilot Release, or Release to
all sites.
- Issue affecting data flow necessary to support National, Regional,
Executive level reporting.
- Any reporting issue affecting pay out, contests, and month end
reports.
- Any issue causing potential regulatory or other legal penalties.
- Any issue affecting training within ******** hours of a particular
class joining the production floor where such classes in aggregate
represent less than ******** of production time.
- Any issue preventing data flow necessary to support national call
management viewing of current call data.
PRIORITY 2 - MAJOR SYSTEM FAILURE
A Major System Failure is defined as a situation which meets any of the
following criteria.
A PRIORITY 2 is defined as:
- Center and/or application or system is still operational with
work-around available and ******** to ******** of users are
impacted.
- Slow time lasting more than ******** minutes for at least ********%
of users. (Slow time is response time double the minimum expected
response time for systems.)
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- Reporting problems that are affecting a center's ability to do
center specific reporting.
- Issues with Training Regions or systems that prevent reps from
signing onto, or performing training exercises.
PRIORITY 3 - MINOR SYSTEM FAILURE
A Minor System Failure is a situation in which a limited number of user
positions or servers are experiencing intermittent problems. Sufficient
alternatives exist to work around the issue, but system is not functioning
at optimal levels.
A PRIORITY 3 is defined as:
- An issue impacting ******** to ******** of the users.
- Application or function not working correctly and work-around is
available.
- Users have increased call-handling time or operations or support
groups having to do manual fixes to correct problem as a
work-around.
- Reporting issues cause extra work for reporting teams or support
groups, but numbers are available via some other means or report.
EXHIBIT 1 (APPENDIX A), P. 2 OF 2
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EXHIBIT 1
APPENDIX B
Change Control Annex
CHANGE EVENT SCHEDULING
OVERVIEW
Z-Tel's Enterprise Integration and Planning (EIP) section within the Enterprise
Management Center (EMC) will be responsible for all scheduling and coordination
of change events for deployments to the Enterprise System. Any event relating to
a change or modification that is implemented into any MCI Environment without
being scheduled through the EIP section and then coordinated with MCI will be
considered unauthorized deployments. Change events impacting any MCI environment
must be submitted and scheduled ******** prior to deployment to the
Enterprise System; this allows the event to be reviewed by both Z-Tel and the
MCI Operations Release Management Group to ensure the proper coordination,
impact analysis and business owner notification has been completed before
deployment. MCI will be responsible for their internal business owner
notification. Any scheduling conflict that arises will be discussed before
implementation with the EMC and MCI Operations Release Management (ORM) Group.
The Z-Tel EIP will be the responsible department for notifying MCI of all change
events impacting any MCI environment. The ORM Group will also be notified via
the ZTTS/Remedy ticketing integration system. MCI deployed changes or
maintenance requests to the MCI data network or Client/Desktops that could
impact MCI environments must also meet the above criteria. Change events
originating within MCI, that are applicable to the Z-Tel Definitive Agreement,
will also need to meet all the requirements outlined in this document and are
required to be scheduled and coordinated with the Z-Tel EIP department within
the EMC as well.
CHANGE EVENT SCHEDULING METHODS
Z-TEL'S PRODUCTION CHANGE CALENDAR
Within Z-Tel the Enterprise Production Change Calendar will be used to identify
and schedule any MCI additions or modifications of software, hardware, routing
or circuits. Any event that is scheduled on the Production Change Calendar will
have passed the Z-Tel Quality Assurance QA) certification. This calendar will
also be used to schedule one-time maintenance events. These event summaries will
be emailed to the MCI ORM Group. The Production Change Template that outlines
all the change details will also be completed and attached to the change control
ticket that is sent across the Ticketing Integration System to Remedy.
MCI PRODUCTION CHANGE CALENDAR/TRACKER
MCI needs to insert here a brief description of the calendar here.
XXXX://XXX.XXXX.XXX
Z-TEL'S PRODUCTION SYSTEMS MAINTENANCE CALENDAR
Within Z-Tel the Production Systems Maintenance Calendar will be used to
identify and schedule the execution of MCI regular processes, and routine
maintenance, (i.e. System
EXHIBIT 1 (APPENDIX B), P. 1 OF 8
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back-up, or Regular Billing Cycle Runs). The MCI ORM Group must be notified two
business days in advance to schedule and coordinate any routine maintenance
within their organization. These notifications will be sent with a detailed
explanation of the maintenance and any possible impact. All maintenance will
take place in the already agreed upon Preferred Maintenance Windows based on the
impacted system.
Z-TEL PRODUCTION SYSTEMS MAINTENANCE CALENDAR REQUIREMENTS
If MCI or Z-Tel has identified a maintenance item that is becoming a routine
maintenance item the below criteria must be met to before scheduling on the
Maintenance Calendar.
1. Minimum of ******** weeks on Production Change Calendar
2. Procedure Validations- no errors or problems with the event
3. ECC Training Documentation
4. Monitoring requirements, procedures and corrective actions
5. Notification and Escalation Lists
SCHEDULING REQUIREMENTS
Z-Tel's EIP section is notified via the use the Z-Ticket System and provided
formal instructions as to what is going to take place in the production change
event. The formal instructions are provided in the Production Change Information
Template and the form is attached to the Z-Ticket. After the EIP has received
and reviewed the event and has ensured that all scheduling requirements have
been met, the Problem type will be changed to Technical Change Control and will
be sent across the Ticketing Integration System to MCI.
The below spreadsheet acts as a checklist for the Change Control Scheduling
Requirements, all listed requirements must be met before the EIP section will
schedule and coordinate any event.
Z-TEL EIP PRODUCTION CHANGE CHECKLIST
REQUIREMENT DESCRIPTION DONE
----------- ----------- ----
Z-Ticket# ********
Table deleted pursuant to confidentiality request
EXHIBIT 1 (APPENDIX B), P. 2 OF 8
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********
Table deleted pursuant to confidentiality treatment request
EXHIBIT 1 (APPENDIX B), P. 3 OF 8
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SCHEDULING LIFECYCLE
Day 1
********
Day 2
********
********
********
Day 3
********
********
Day 4
********
EXHIBIT 1 (APPENDIX B), P. 4 OF 8
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If MCI decides to not continue with the scheduled event, the change request will
be denied and sent back to the person or group requesting the change. The change
will either be deferred for later scheduling or cancelled all together. If the
change event was accepted and is on target for the outlined schedule MCI will
provide Z-Tel notification that the event has been reviewed and that the proper
notification was provided to all the impacted users.
Z-TEL CONTACT & ESCALATION INFORMATION
The Enterprise Integration and Plans Department is staffed ********
from ********
ESCALATION LEVEL CONTACT INFORMATION
---------------- -------------------
Xxxxx 0 ********
Initial
Xxxxx 0 ********
Delayed Response/
Escalation
Xxxxx 0 ********
Escalation
Level 4 ********
Highest Level
Escalation
MCI CONTACT & ESCALATION INFORMATION
ESCALATION LEVEL TITLE, CONTACT, TELEPHONE NUMBER
---------------- --------------------------------
Xxxxx 0 ********
Xxxxx 0 ********
Xxxxx 0 ********
XXXXXXX 0 (XXXXXXXX X), X. 5 OF 8
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ZORRO DEPARTMENT CONTACT INFORMATION
COMPANY DEPARTMENT CONTACT INFORMATION
------- ------------------------------
Z-TEL ********
Communication
MCI ********
Communication
CRITICAL CHANGE CONTROL
Critical change control events or events with less than two days notice will
only be implemented pending the approval of the Director of the EMC and CS
CMR/ORM Manager outlined in the below escalation levels. All notifications and
scheduling requirements must still be met prior to deployment.
Z-TEL SEVERITY (PRIORITY) 1 PRODUCTION CHANGE APPROVAL ESCALATION
ESCALATION LEVEL CONTACT INFORMATION
---------------- -------------------
Xxxxx 0 ********
Level 2 ********
MCI SEVERITY (PRIORITY) 1 PRODUCTION CHANGE APPROVAL ESCALATION
ESCALATION LEVEL CONTACT INFORMATION
---------------- -------------------
Xxxxx 0 ********
Xxxxx 0 ********
Xxxxx 0 ********
XXXXXXX 0 (XXXXXXXX X), X. 6 OF 8
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Z-TEL SUPPORTED PREFERRED MAINTENANCE WINDOWS
SYSTEM/APPLICATION MON TUES WEND THURS FRI SAT SUN
------------------ --- ---- ---- ----- --- --- ---
******** 1:00am- 1:00am- 1:00am- 1:00am- 1:00am- 1:00am- 1:00am-
6:00am 6:00am 6:00am 6:00am 6:00am 6:00am 6:00am
******** 4:00am-
******** 6:00am
******** 1:00am- 1:00am- 1:00am- 1:00am- 1:00am- 1:00am- 1:00am-
6:00am 6:00am 6:00am 6:00am 6:00am 6:00am 6:00am
******** 1:00am- 1:00am- 1:00am- 1:00am- 1:00am- 1:00am- 1:00am-
6:00am 6:00am 6:00am 6:00am 6:00am 6:00am 6:00am
SYSTEM/APPLICATION MON TUES WEND THURS FRI SAT SUN
------------------ --- ---- ---- ----- --- --- ---
******** 1:00am - 1:00am - 1:00am - 1:00am - 1:00am - 1:00am - 1:00am -
6:00am 6:00am 6:00am 6:00am 6:00am 6:00am 6:00am
MCI SUPPORTED PREFERRED MAINTENANCE WINDOWS
CHANGE EVENT DEPLOYMENTS
After the EIP section has completed all the steps above and the change event is
approved and scheduled the Enterprise Control Center (ECC) is responsible for
monitoring the deployment of the change to any MCI environment until it has
either been successfully implemented or rolled back.
PRE-DEPLOYMENT REQUIREMENTS
Any group or person(s) implementing the change must contact the ECC ********
prior to the implementation to ensure there are no operational emergencies that
would cause problems for the deployment. If there is an operational emergency
that could affect the success of the implementation the ECC reserves the right
to cancel the scheduled event for a later time when no operational emergency
exists.
********
DURING & POST DEPLOYMENT REQUIREMENTS
EXHIBIT 1 (APPENDIX B), P. 7 OF 8
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The person(s) or group implementing the change are also required to notify the
ECC is the event has reached the rollback stage and the implementation is not
successful. If a rollback is necessary the ECC will notify MCI. If for any
reason the implementation is going to pass the agreed upon duration the MCI will
be notified by the ECC by joining MCI's main bridge as well, especially if the
implementation is reaching the one hour xxxx before starting business hours. If
the deployment or implementation was successful an email will be sent to the
appropriate MCI distribution list.
DEPLOYMENT PERFORMANCE MEASUREMENTS
MCI and Z-Tel shall manage and report on the success of any production release
on ******** basis using the following criteria:
Releases/Changes installed = Total Releases
Failed (Requiring Rollbacks or not meeting the release objective) = Failed
Release
Success (Met business objective and did not cause any issues = Successful
Release
Success Rate = Success/Total
Due to operational or emergency requirements, Z-Tel may cancel an authorized or
scheduled event or release at any time prior to the start of the event without
penalty. Should it be necessary to terminate an authorized event prior to its
scheduled completion, every effort will be made to facilitate the restoral of
service.
EXHIBIT 1 (APPENDIX B), P. 8 OF 8
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EXHIBIT 2
WORK PRODUCT PERFORMED IN WHOLE OR IN PART FOR MCI PRIOR
TO EFFECTIVE DATE OF AGREEMENT
WORK ITEM ******** MCI RIGHTS Z-TEL RIGHTS
--------- ------------- ---------- ------------
******** ******** ******** ********
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EXHIBIT 3
Z-TEL OFF-PREMISES SOFTWARE
********
********
********
********
********
********
********
********
********
********
********
********
********
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EXHIBIT 4
Z-TEL WHOLESALE SERVICES
SERVICE LEVEL AGREEMENTS
(SLAs)
With
MCI
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PREAMBLE
1.1 Service Level Agreements (SLAs) will be put into place to ensure that both
Z-Tel and MCI jointly provide quality service at the lowest cost while
maximizing revenue opportunities and complying with regulatory
requirements.
1.2 SLAs will be defined where the service level is objectively measurable and
one Party has the clear ability to control it.
1.3 These service level agreements will be tied to the greatest extent
possible to one or more of the following key objectives identified in the
Requirements Statement between the Parties: quality, cost and revenue.
1.4 Both Parties will use their best efforts to provide services hereunder
that are at least equal in quality and provided within the same time
intervals as each Party provides to itself or to its own end user
customers, but at a minimum at a level appropriate for a national common
carrier class service provider.
DEFINITIONS
ACTION PLAN
An Action Plan is a plan to correct a deviation from expected performance. Each
Action Plan will include a defined implementation schedule.
APPENDIX A
Appendix A to this Exhibit 4 is a matrix listing all Stabilization, Operational
and Administrative SLAs.
APPENDIX B
Appendix B to this Exhibit 4 are SLA Definition sheets identifying for each SLA
details regarding calculation of each specific metric.
XXXX CREDITS
Xxxx Credits are credits that are given to MCI on a Z-Tel xxxx. Xxxx Credits may
also be applied to an ILEC xxxx.
********
********
********
********
CURE PERIOD
Cure Period is the period of time to correct a condition where performance does
not meet expectations.
DATA FEEDS
Data Feeds are the electronic delivery of predefined information.
DEFINITIVE AGREEMENT
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Definitive Agreement means the AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE
SERVICES, Z-NODE SERVICES, ANCILLARY SERVICES AND TECHNOLOGY LICENSE between MCI
and Z-Tel..
DISCONNECT
Disconnect is the submission of a Local Service Order (LSR) to an ILEC to
terminate local telephone service.
ILEC
ILEC means Incumbent Local Exchange Carrier.
LOCKBOX
Lockbox is the process used to process payments.
LSR
LSR means Local Service Order.
LSR SUBMISSION
LSR Submission is the process used to submit a Local Service Order to an ILEC.
PROVISIONING
Provisioning is the process used to provide or set up service to a customer.
REJECT
A Reject is an LSR sent back from the ILEC without having been executed.
REPORTS
Reports are compilations of data prepared for management purposes.
RESPONSE TIME
Response Time is the time required for a system to reply to an inquiry or
complete a function.
ROOT CAUSE ANALYSIS
Root Cause Analysis is the analysis performed to determine the actual cause of
an event, condition or status.
SALES
Sales means the process used to enable customers to purchase a product.
SLA
SLA means Service Level Agreement.
SERVICE MANAGEMENT COMMITTEE
EXHIBIT 4, P. 3 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
The Service Management Committee shall consist of three representatives from
each Party as designated by the individual Party. Designees shall be at a level
that can generally make commitments for the Party relative to this SLA document,
SLA Metrics, SLA Remedies, and SLA Adjustments/Exclusions. The Service
Management Committee will meet monthly or as required to perform the functions
designated in this document.
SNIP
SNIP is the process of suspending a customer's telephone service
STABILIZATION PERIOD
The Stabilization Period is the first ******** following the first day of
general availability for MCI's first product rollout under the Definitive
Agreement.
Stabilization Period SLAs
The Stabilization Period SLAs are the SLA measurements computed during the first
******** following the first day of general availability for MCI's first product
rollout under the Definitive Agreement.
REQUIREMENTS STATEMENT
The Requirements Statement is the document that describes and defines, at a high
level, the Services and Software that Z-Tel will provide to MCI so that MCI can
provide its Local Wholesale (LW) Based Services to MCI customers.
TRIGGERING EVENT SLAS
Triggering Event SLAs define situations where there is a severe and immediate
impact on MCI's ability to meet minimal customer service or operational
requirements, such that Z-Tel's failure to meet such SLAs would permit MCI to
terminate the Definitive Agreement with cause upon providing to Z-Tel the
appropriate notice and opportunity to cure.
Z-NODE
The Z-Node is the combination of Z-Tel hardware and software that is used to
provide some of the enhanced telephone services to be provided by Z-Tel under
the Definitive Agreement.
2.0 SLA GENERIC TYPES
There will be four (4) generic types of SLAs:
2.1 ********
2.1.1 ********
2.1.2 ********
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2.1.3 ********
2.1.4 ********
2.1.5 ********
2.1.6 ********
2.1.7 ********
2.1.8 ********
2.2 OPERATIONAL SLAS
2.2.1. ********
********
********
********
********
2.2.2. ********
********
********
********
********
********
********
EXHIBIT 4, P. 5 OF 14
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2.2.2.2 ********
********
********
********
2.2.3. Operational SLA Remedies
2.2.3.1 ********
2.2.3.2 ********
********
********
********
2.2.3.3 ********
2.2.3.4 ********
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2.2.3.5 Any Significant Miss will require an Action
Plan to be jointly developed by the Parties
to address and, wherever possible, correct
material deviations from the expected
result.
2.2.3.5.1 The implementation period for
any Action Plan will be
negotiated between the Parties
based upon the circumstances
involved.
2.2.3.5.2 If Z-Tel fails to attain the
Minimum Service Level because
the same problem occurs during
********, the Parties will work
together to develop a detailed
root cause analysis, which shall
form the basis of the Action
Plan.
2.2.3.6 ********
2.2.3.6.1 ********
2.2.3.6.2 Penalties may not be utilized to
********
2.2.3.6.3 ********
2.1 TRIGGERING EVENT SLAS
2.3.1 Triggering Event SLAs will define situations where
there is a severe impact on MCI's ability to meet
minimal customer service or operational requirements.
2.3.2 These Triggering Event SLAs will not be in effect for
the ******** following the first day of general
availability for MCI's first product rollout under
the Definitive Agreement.
2.3.3 Z-Tel's uncured failure to meet any Triggering Event
SLA requirements, as stated in Section 2.3.5.1.1
below, may be deemed and designated as a "Secondary
Z-Tel Triggering Event" under the terms of the
Definitive Agreement.
2.3.4 In the event of Z-Tel's failure to meet a Triggering
Event SLA requirement, MCI has the right, after a
******** for Z-Tel to cure the Triggering Event SLA
miss, to terminate the Definitive Agreement
immediately with cause pursuant to Section 7.2.2 of
the Definitive Agreement. In addition, MCI has the
right to specify steps to effect an immediate cure,
including:
2.3.4.1 Making hardware and software upgrade
requests. Through the Service Management
Committee, the Parties will jointly evaluate
whether MCI-suggested upgrades would be
likely to bring Z-Tel's performance up to
acceptable levels. If the Service Management
Committee agrees to pursue such upgrades,
and Z-Tel is financially unable to acquire
or perform the upgrades, MCI may, at its
sole option, either purchase or perform such
upgrades and lend or license them to Z-Tel,
or lend Z-Tel the money to purchase or
perform such upgrades, with such loan to be
secured by the acquired assets.
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2.3.4.2 Requesting assignment of a joint task force
group to assess and recommend the
implementation of changes necessary to cure
the missed Triggering Event SLA.
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2.3.5 Triggering Event SLAs
2.3.5.1 Triggering Event SLAs shall be a subset of
Operational SLAs as defined in Section 2.2.2
and the attached Appendix A.
2.3.5.1.1 Triggering Event SLAs and their
associated Triggering Event
Failure Levels are as follows:
SLA
OPERATIONAL METRIC
CATEGORY ID OPERATIONAL SLA ELEMENT DESCRIPTION TRIGGER EVENT FAILURE LEVEL
-------- -- --------------- ------------------- ---------------------------
******** ******** ******** ******** ********
Table deleted in its entirety pursuant to a confidentiality request
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2.3.5.2 Triggering Event SLA changes may be
initiated from time to time through the
Service Management Committee. However,
changes to the list of Triggering Event SLAs
and/or the associated Triggering Event
Failure Levels shall require an amendment to
this document, signed by both Parties.
2.3.5.3 As stated in Section 7.2.2.1 of the
Definitive Agreement ("Impact Upon
Triggering Event SLAs of Disagreement
Regarding ********.") Notwithstanding any
other provision of this Agreement, Z-Tel's
failure to meet a Triggering Event SLA
requirement shall not be deemed a Secondary
Z-Tel Triggering Event under this Agreement,
and shall not give MCI the right to
terminate the Definitive Agreement for cause
as described in Section 7.2.2, if Z-Tel's
failure is directly caused by the decision
not to use any product, service, or
procedure, because MCI ******** of such
product, service, or procedure, until the
dispute over the ******** in question is
resolved. In order to invoke this section
7.2.2.1, Z-Tel must provide timely notice,
in writing, that such refusal by MCI to
approve a ******** presents a substantial
risk of causing Z-Tel to fail to meet the
critical terms of such Triggering Event SLA.
Within ******** of receiving such a notice,
MCI may propose a reasonable alternative to
the ******** action for which Z-Tel had
requested pre-approval. If Z-Tel disagrees
with the reasonableness of MCI's proposal,
Z-Tel may invoke the escalation and
negotiation procedures under Sections 7.27.1
and 7.27.2 of this Agreement, and if those
do not result in the agreement of the
Parties within ******** thereafter, Z-Tel
may submit the dispute to expedited
arbitration under the JAMS/Endispute
procedures, with a final decision to be
rendered within ********, which decision
shall be binding on both Parties. Until the
Parties reach agreement, or there is a final
decision of the arbitrator, MCI shall not
declare a Secondary Z-Tel Triggering Event
or seek to terminate this Agreement for
cause because of Z-Tel's failure to meet the
Triggering Event SLA Term in question.
Absent an order from the arbitrator, in no
event will MCI's right to declare a
Secondary Z-Tel Triggering Event be
suspended for a total of more than ninety
(90) days if MCI had proposed a reasonable
alternative as described above.
2.4 ADMINISTRATIVE SLAS
2.4.1. Administrative SLAs will be utilized to measure
effectiveness of methods, procedures, hardware,
configurations and resource alignment and identify
areas for performance improvement.
2.4.1.1 Administrative SLAs will be developed and
reported at the corporate level.
2.4.1.2 Administrative SLAs will be computed and
applied only after the ******** following
the first day of general availability for
MCI's first product rollout under the
Definitive Agreement.
2.4.1.3 Administrative SLAs are intended to provide
insight on all key areas of performance.
2.4.1.4 All of the Administrative SLAs will be
reviewed at a monthly meeting of the Service
Management Committee.
2.4.2. Administrative SLAs subject to this Agreement are as
identified in Appendix A to this Agreement, which may
be updated from time to time pursuant to the process
outlined in Section 7.0 of this Agreement.
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2.4.2.1 For each Administrative SLA, the
documentation in the SLA Definition Pages
(Appendix B) shall identify (as
appropriate):
a. a definition
b. exclusions and/or exceptions
c. performance standard(s)
d. methodology and data source
e. calculation including
numerator, denominator and
applicable periods of time
2.4.2.2 For each Administrative SLA the
documentation shall establish performance
standards.
2.4.2.2.1 Service level goals incorporated
into SLAs shall be oriented to
supporting a standard that would
sustain general commercial
operations at the level of
performance which Z-Tel provides
to its own retail customers, but
at a minimum at a level
appropriate for a nationwide
common carrier class service
provider.
2.4.2.2.2 SLA documentation shall
establish an Expected Service
Level for each Administrative
SLA, which is the level that
should be met by Z-Tel.
2.4.2.2.3 SLA documentation shall
establish a Minimum Service
Level for each Administrative
SLA, which is the minimum level
that should be met by Z-Tel.
2.4.3 ********
2.4.4 Any Significant Miss of an Administrative SLA will
require an Action Plan to be jointly developed by the
parties to address and, wherever possible, correct
material deviations from the expected result.
2.4.4.1 The implementation period for any
Administrative SLA Action Plan will be
negotiated between the Parties based upon
the circumstances involved.
3. ROLES AND RESPONSIBILITIES
Roles and responsibilities in regard to SLAs are as stated below:
3.1 Z-Tel Shall:
3.1.1 On schedules mutually agreed upon by Z-Tel and MCI,
measure and report to MCI on Z-Tel's performance as
it relates to those SLA performance categories
identified in this Exhibit 4.
3.1.2 Use best efforts to promptly resolve all system and
service delivery matters as they pertain to the SLAs
identified in this Exhibit 4 and applicable to the
services supported and managed by Z-Tel.
EXHIBIT 4, P. 11 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
3.2 MCI Shall:
3.2.1 Use Z-Tel Technology and equipment in accordance with
the feature and functionality descriptions.
3.2.1 Provide workstation and system security.
3.2.2 Provide any underlying data in a timely fashion.
3.2.3 Not create any queries and/or executables that will
perform any functions targeted at blocking access to
or interfering with components provided to them by
Z-Tel.
3.2.4 Not create mechanisms to generate fictitious customer
service records (e.g., orders, trouble tickets,
SNIPS, billing errors, outages, etc.) as a method of
sampling Z-Tel compliance with SLAs except as agreed
to between the Parties.
3.3 Z-Tel and MCI will conduct SLA Review Meetings on a monthly or
other mutually agreed upon basis, to review performance data
and to develop performance improvement plans where needed.
4.0 REPORTING.
Unless otherwise specifically provided herein:
4.1 During the Stabilization Period the Parties will further
define the details of how, when and the manner in which each
specific SLA will be measured, reported and tracked.
4.2 After completion of the Stabilization Period, as soon as
reasonably practical after each calendar month-end, but not to
exceed ******** after the end of a calendar month, each Party
shall report to the other Party the actual service levels for
the previous calendar month for all SLAs specified in this
Exhibit 4.
4.3 Reporting formats and media shall be proposed by each Party
and agreed upon by the other Party within ******** after the
Service Commencement Date.
5.0 EXCLUSIONS
5.1 Notwithstanding exclusions contained in the normal calculation
of individual SLAs as described in Section 2.2.2.1 above,
Z-Tel may exclude from the determination of its actual
performance of any applicable Service Level the period of time
for which any of the conditions set forth below ("Exclusions")
adversely affect Z-Tel's ability to meet such Service Levels.
5.1.1. Outages for maintenance or the installation, upgrade
or replacement of equipment or software that are
scheduled and executed within the maintenance windows
agreed to by Z-Tel and MCI, and other times agreed
upon in advance by MCI. Z-Tel will schedule with MCI,
at least two ******** in advance where possible, any
additional scheduled maintenance requiring system
downtime for system software upgrades.
EXHIBIT 4, P. 12 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
5.1.2. Outages for maintenance or installation, upgrade or
replacement of equipment or software that are
scheduled and executed by ILECs.
5.1.3. Any transactions excluded by mutual written agreement
of Z-Tel and MCI and as documented in this document
or the SLA Details sheet (Appendix B).
5.1.4. If an event described in Section 7.29 of the
Definitive Agreement (Force Majeure) or a special
request by MCI causes a particular service or
application to become unavailable for use, the
relevant period for the event shall be subtracted
from the applicable SLA measurements. Nonetheless,
Z-Tel shall notify MCI in advance if Z-Tel knows of a
situation where an event or special request will
cause the unavailability of the application.
5.1.5. Problems adversely affecting the delivery of Services
and resulting from components (hardware, software,
systems, network, switch failures, switch tape
failures and other related failures), for which MCI
(or any third party engaged by or acting on behalf of
MCI) is operationally and administratively
responsible, will not be considered in calculating
the applicable SLA measurements. Nonetheless, Z-Tel
shall notify MCI in advance if Z-Tel knows of a
situation where problems with components for which
MCI is responsible will cause a stoppage or delays of
Z-Tel Services.
5.1.6. Problems adversely affecting the delivery of Services
and resulting from components (hardware, software,
systems, network, switch failures, switch tape
failures and other related failures), which are
outside the control of Z-Tel or its affiliates and
********, will not be considered in calculation of
the applicable SLA measurements. Nonetheless, Z-Tel
shall notify MCI in advance if Z-Tel knows of a
situation where problems with components provided by
third parties, other than its affiliates ********,
will cause a stoppage or delay of Z-Tel Services.
5.1.7. Problems related to a prioritization or
reprioritization of tasks or incidents by MCI where
Z-Tel has notified MCI in advance that such
prioritization (or lack of prioritization in the case
of incidents) or reprioritization may affect SLAs.
5.1.8. Delays due to non-receipt or late receipt of MCI
input, where the non-receipt or late receipt was
beyond the control of Z-Tel.
5.1.9. Temporary exclusions from Service Level Agreement
performance measurements requested by Z-Tel, and
approved in writing by MCI, to implement major
changes in applications, environments, conversions,
or systems software.
5.2 Within ******** of providing Reports under Section 4.0 of this
SLA Agreement, Z-Tel will provide written notice along with a
reasonable explanation of any Exclusions pertaining to
******** as described in Section 5.1 which have been
incorporated into that month's reports.
5.2.1 Both parties will work in good faith to resolve any
differences of opinion as they relate to the
appropriateness and accuracy of Exclusions as
described in Section 5.1 above.
EXHIBIT 4, P. 13 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
6.0 SUSPENSION OF SLA REMEDIES
6.1 Z-Tel will be entitled to rely on monthly forecasts in
providing the Services hereunder.
6.1.1 During the first six months of operations under this
Agreement, any MCI forecast that understates its
actual demands for Z-Tel services in the aggregate
(i.e., all states combined for residential and small
business service) by more than ******** during the
second month of the forecast period shall relieve
Z-Tel of its duty to fully perform in accordance with
the applicable Triggering Event or Operational SLAs
for that month, provided that Z-Tel has made
reasonable efforts to respond to any updated
forecast, taking into consideration the time that the
forecast was updated.
6.1.2 After the first six months of operations under this
Agreement, any MCI forecast that understates its
actual demands for Z-Tel services in the aggregate
(i.e., all states combined for residential and small
business service) by more than ******** during the
second month of the forecast period shall relieve
Z-Tel of its duty to fully perform in accordance with
the applicable Triggering Event or Operational SLAs
for that month provided that Z-Tel has made
reasonable efforts to respond to any updated
forecast, taking into consideration the time that the
forecast was updated.
7.0 SERVICE LEVEL AGREEMENT CHANGE PROCESS
7.1 New SLAs may be added or substituted or existing SLAs may be
modified or deleted, through the process set forth in this
Section.
7.1.1 It is the intent of the Parties to maintain a fair,
reasonable, attainable, accurate, meaningful, and
consistent measurement of Z-Tel's performance of
Services.
7.1.2 Relative to the above standard, all SLAs will be
reviewed at least annually.
7.1.3 Impelling Events. Events or changes that materially
affect delivery of services by either Party could
initiate the need to delete or modify existing SLAs
or add new SLAs. Such events and changes may include:
the Parties' planning processes, changes in MCI's
business (e.g., business requirements, changes in
volumes), regulatory requirements, changes in ILEC
methods and procedures, vendor changes in methods and
procedures, and audit requirements.
7.2 SLA Change Process. Changes to SLAs will only be effected
through the following SLA Change Process.
7.2.1 Service Level Agreement Change Assessment. Upon
identifying the need to add, delete or modify any
SLA, Z-Tel or MCI shall prepare a written analysis
that supports the SLA change (a "Service Level
Agreement Change Proposal") and submit it to the
other Party.
7.2.2 The Parties shall then review the Service Level
Agreement Change Proposal and the receiving Party
shall have ******** to respond with an assessment of
the ramifications of the request (e.g., cost impacts,
impact on business, etc.).
7.2.3 All Service Level Agreement Change Proposals must be
mutually agreed upon through the Service Management
Committee before any SLAs are added, deleted or
modified. If the Service Management Committee is
unable to reach consensus on any proposed Service
Level Agreement change, the Parties will attempt to
resolve the matter pursuant to the escalation
procedures in Section 7.27 of the Definitive
Agreement.
EXHIBIT 4, P. 14 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
7.2.4 Any new SLAs will not be enforced until three full
months of regular production has been achieved.
7.2.5 Additionally, by mutual agreement, major change
initiatives as determined by the Service Management
Committee may cause the suspension of one or more
SLAs for a period of one to three months after
implementation of the major change. During this
suspension period the involved service level(s) will
be pursued on a best efforts basis.
Agreed to by the Parties, as signified below:
MCI WORLDCOM Communications, Inc. Z-Tel Communications, Inc.
By ________________________________ By __________________________________
___________________________________ _____________________________________
Print Name Print Name
___________________________________ _____________________________________
Title Title
___________________________________ _____________________________________
Date Date
EXHIBIT 4, P. 15 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 4-A
ID OPERATIONAL SLA ELEMENT DESCRIPTION EXPECTED MINIMUM MEASUREMENT SOURCE SEV LVL
-------------------------------------------------------------------------------------------------------------------------------
******** ******** ******** ******** ******** ********
-------------------------------------------------------------------------------------------------------------------------------
EXHIBIT 4-A, P. 1 OF 5
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
ID OPERATIONAL SLA ELEMENT DESCRIPTION EXPECTED MINIMUM MEASUREMENT SOURCE SEV LVL
-------------------------------------------------------------------------------------------------------------------------------
******** ******** ******** ******* ******* *******
-------------------------------------------------------------------------------------------------------------------------------
Information on this page and the following 3 pages has been omitted pursuant to
a confidentiality treatment request
EXHIBIT 4-A, P. 2 OF 5
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
ID OPERATIONAL SLA ELEMENT DESCRIPTION EXPECTED MINIMUM MEASUREMENT SOURCE SEV LVL
-------------------------------------------------------------------------------------------------------------------------------
******** ******** ******** ******** ******** ********
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EXHIBIT 4-A, P. 3 OF 5
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
ID OPERATIONAL SLA ELEMENT DESCRIPTION EXPECTED MINIMUM MEASUREMENT SOURCE SEV LVL
-------------------------------------------------------------------------------------------------------------------------------
******** ******** ******** ******** ******** ********
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EXHIBIT 4-A, P. 4 OF 5
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
ID OPERATIONAL SLA ELEMENT DESCRIPTION EXPECTED MINIMUM MEASUREMENT SOURCE SEV LVL
-------------------------------------------------------------------------------------------------------------------------------
******** ******** ******** ******** ******** ********
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EXHIBIT 4-A, P. 5 OF 5
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
"This page and the following 28 pages have been omitted in their entirety
pursuant to a confidentiality treatment request."
EXHIBIT 4-B, P. 1 OF 28
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
********
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EXHIBIT 5
Z-TEL BLANKET AGENCY AGREEMENT LETTER
For LOCAL SERVICE PROVIDERS
I am an official of MCI Communications Inc. ("MCI") and am authorized to commit
my company to the conditions stated herein:
1. MCI will not submit any inquiries, requests or orders for service to Z-Tel
without legally adequate authorization and verification of the customer to
which such inquiries, requests or orders are connected.
2. The agreement between MCI and the End User provides that the MCI is solely
responsible for representing the end user in all requests relating to
local service. The agreement between MCI and the End User holds the End
User responsible to MCI for all charges incurred on the End User's behalf
for local service. However, MCI is responsible to Z-Tel for all charges
that may be incurred in connection with service requests for End Users
regardless of whether the End User meets payment responsibilities to MCI.
3. Unless agreed to in writing by both parties, the End User will deal
directly with MCI on all inquiries concerning their Local Service. This
may include, but is not limited to, billing, repair, directory listings,
and number portability.
4. Z-Tel is authorized to release all information regarding the End User's
local service to MCI.
5. This Agreement shall continue in effect unless canceled by prior written
notice by Z-Tel or MCI thirty (30) days prior to the effective date of
cancellation. Cancellation shall not release or limit any matters
occurring prior to the cancellation of this Blanket Agency Agreement.
---------------------------------------------
Signature of Officer
---------------------------------------------
Title of Officer
---------------------------------------------
Company Name
--------------------------------------------------------------------------------
EXHIBIT 5, P. 1 OF 1
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 6
******** ESCROW AGREEMENT
This ******** Escrow Agreement (this "Agreement"), dated as of the __ day
of March, 2002 (the "Execution Date"), by and among MCI WORLDCOM Communications,
Inc., a Delaware corporation with offices at 000 Xxxxx 00xx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000 ("MCI"), Z-Tel Communications, Inc., a Delaware corporation
having its principal place of business at 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxx, Xxxxxxx 00000 ("Z-Tel"), and [BANK NAME], as escrow agent
("Escrow Agent") (collectively the "Parties" or individually, a "Party").
RECITALS
WHEREAS, the term "Incumbent Local Exchange Carrier" or "ILEC" means, with
respect to an area, the local exchange carrier that (A) on the date of enactment
of the Telecommunications Act of 1996, provided telephone exchange service in
such area; and (B)(i) on such date of enactment, was deemed to be a member of
the exchange carrier association pursuant to Section 69.601(b) of the Federal
Communication Commission's regulations (47 C.F.R. sec 69.601(b)); or (ii) is a
person or entity that, on or after such date of enactment, became a successor or
assign of a member described in clause (i);
WHEREAS, Z-Tel and MCI have entered into a certain Agreement for Wholesale
Telephone Exchange Services, Z-Node Services, Ancillary Services and Technology
License by and between MCI and Z-Tel dated March__, 2002 (the "Definitive
Agreement");
********
WHEREAS, the Escrow Agent has agreed to act as escrow agent under this
Agreement.
NOW THEREFORE, the Parties, intending to be legally bound hereby, agree as
follows:
1. ESCROW FUND.
(a) On the Execution Date, Escrow Agent shall create an account to
be known as the "Z-Tel Account" into which MCI and/or Z-Tel shall from time to
time deposit certain funds as set forth in the Definitive Agreement (said funds
and additions thereto, as increased by any earnings thereon and as reduced by
any disbursements, amounts withdrawn under Section 3(i), or losses on
investments, the "Escrow Fund").
********
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EXHIBIT 6, P. 1 OF 6
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
********
(d) Each month, Escrow Agent shall promptly remit to MCI any
interest or other earnings in the Escrow Fund in excess of $50,000. For the
avoidance of doubt, amounts in any segregated account or accounts for ********
established pursuant to Section 1(b) of this Agreement shall not be included in
this calculation or remitted to MCI.
(e) Escrow Agent hereby agrees to act as escrow agent and to hold
and safeguard the Escrow Fund in an interest-bearing account and to make
disbursements from the Escrow Fund solely pursuant to the express terms and
conditions hereof.
(f) Any and all amounts deposited by MCI into the Escrow Fund shall
********
2. TERMINATION OF ESCROW. This Agreement shall terminate on the last day
of the seventh month following the termination of the Definitive Agreement. The
Escrow Agent shall on such date pay and distribute the amounts remaining in the
Escrow Fund, if any, to MCI. For the avoidance of doubt, amounts in any
segregated account or accounts for ******** established pursuant to Section 1(c)
of this Agreement shall not be distributed to MCI.
3. DUTIES OF ESCROW AGENT.
(a) Escrow Agent shall not be under any duty to give the Escrow Fund
held by it hereunder any greater degree of care than it gives its own similar
property and shall not be required to invest any funds held hereunder except as
directed in this Agreement. Uninvested funds held hereunder shall not earn or
accrue interest.
(b) Escrow Agent shall not be liable for damages, except for its own
gross negligence or willful misconduct and, except with respect to claims based
upon such gross negligence or willful misconduct that are successfully asserted
against Escrow Agent. Without limiting the foregoing, Escrow Agent shall in no
event be liable in connection with its investment or reinvestment of any cash
held by it hereunder in good faith, in accordance with the terms hereof,
including, without limitation, any liability for any delays (not resulting from
its gross negligence or willful misconduct) in the investment or reinvestment of
the Escrow Fund, or any loss of interest incident to any such delays.
(c) Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that the person purporting
to give receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so. Escrow
Agent may conclusively presume that the
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EXHIBIT 6, P. 2 OF 6
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
undersigned representative of any Party that is an entity other than a natural
person has full power and authority to instruct Escrow Agent on behalf of that
Party unless written notice to the contrary is delivered to Escrow Agent.
(d) Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Agreement and shall not be liable for any
action taken or omitted by it in good faith in accordance with such advice.
(e) Escrow Agent does not have any interest in the Escrow Fund
deposited hereunder but is serving as escrow holder only and has only possession
thereof. Any payments of income from this Escrow Fund shall be subject to
withholding regulations then in force with respect to United States taxes. The
Parties will provide Escrow Agent with appropriate Internal Revenue Service
Forms W-9 for tax identification number certification, or non-resident alien
certifications. This Section 3(e) and Section 3(b) shall survive notwithstanding
any termination of this Agreement or the resignation of Escrow Agent.
(f) Escrow Agent makes no representation as to the validity, value,
genuineness or the collectibility of any security or other document or
instrument held by or delivered to it.
(g) Escrow Agent shall not be called upon to advise any Party as to
the wisdom in selling or retaining or taking or refraining from taking any
action with respect to any securities or other property deposited hereunder.
(h) Escrow Agent (and any successor Escrow Agent) may at any time
resign as such by delivering the Escrow Fund to any successor Escrow Agent
jointly designated by the other Parties in writing, or to any court of competent
jurisdiction, whereupon Escrow Agent shall be discharged of and from any and all
further obligations arising in connection with this Agreement. The resignation
of Escrow Agent will take effect on the earlier of (i) the appointment of a
successor (including a court of competent jurisdiction) or (ii) the day that is
30 days after the date of delivery of its written notice of resignation to the
other Parties. If at that time Escrow Agent has not received a designation of a
successor Escrow Agent, Escrow Agent's sole responsibility after that time shall
be to retain and safeguard the Escrow Fund until receipt of a designation of
successor Escrow Agent or MCI's written disposition instruction or a final
non-appealable order of a court of competent jurisdiction.
(i) MCI shall pay Escrow Agent compensation (as payment in full) for
the services to be rendered by Escrow Agent hereunder in the amount of $_______
at the time of execution of this Agreement and agree to reimburse Escrow Agent
for all reasonable expenses, disbursements and advances incurred or made by
Escrow Agent in performance of its duties hereunder. Any such compensation and
reimbursement to which Escrow Agent is entitled shall be borne solely by MCI.
MCI shall be entitled to all interest, earnings, or other additions to the Z-Tel
Account other than amounts in any segregated account or accounts for non-MCI
ILEC Fees established pursuant to Section 1(c) of this Agreement. Escrow Agent
shall not have a right of setoff against the Escrow Fund, it being understood by
the Parties that Escrow Agent shall have no obligation to disburse funds from
the Escrow Fund unless and until it has been paid in full.
(j) No printed or other matter in any language (including, without
limitation, prospectuses, notices, reports and promotional material) that
mentions Escrow Agent's name or the rights, powers, or duties of Escrow Agent
shall be issued by the other Parties or on such Parties' behalf unless Escrow
Agent shall first have given its specific written consent thereto.
4. LIMITED RESPONSIBILITY. This Agreement expressly sets forth all the
duties of Escrow Agent with respect to any and all matters pertinent hereto. No
implied duties or
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EXHIBIT 6, P. 3 OF 6
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
obligations shall be read into this Agreement against Escrow Agent. Escrow Agent
shall not be bound by the provisions of any agreement among the other Parties
except this Agreement.
5. NOTICES. All notices, consents, waivers and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt) provided that a copy is mailed
by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
Party may designate by notice to the other Parties):
6. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original and all of which,
when taken together, will be deemed to constitute one and the same.
7. SECTION HEADINGS. The headings of sections in this Agreement are
provided for convenience only and will not affect its construction or
interpretation.
8. WAIVER. The rights and remedies of the Parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any Party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one Party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other Party; (b) no waiver that may be
given by a Party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
9. EXCLUSIVE AGREEMENT AND MODIFICATION. This Agreement and the Definitive
Agreement supersede all prior agreements among the Parties with respect to its
subject matter and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement
between the Parties with respect to its subject matter. This Agreement may not
be amended except by a written agreement executed by MCI, Z-Tel and Escrow
Agent.
10. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Delaware, without regard to conflicts of law principles.
[Remainder of page intentionally blank]
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EXHIBIT 6, P. 4 OF 6
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
IN WITNESS WHEREOF, the Parties have executed and delivered this
Agreement as of the date first written above.
MCI
By:
---------------------------
Title:
------------------------
[Z-TEL]
By:
---------------------------
Title:
------------------------
[BANK]
By:
---------------------------
Title:
------------------------
--------------------------------------------------------------------------------
EXHIBIT 6, P. 5 OF 6
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 7
INVOICE DOCUMENTATION
Charge Type Required Invoice Information
----------- ----------------------------
All Invoices Contract Reference
Purchase Order Number (where applicable to be provided
by MCI)
Time Period
Software License Fee Number of Residential Lines (by State)
Number of Commercial Lines (by State)
Software License Fees at ******** per Line
2002 Software License Fee Total
Cumulative Software License Fee Total
ANI detail to support line counts including State, ILEC,
install, and disconnect dates
Line Fees Number of Residential Lines (by State)
Number of Commercial Lines (by State)
Number of Lines billed at $.********
Number of Lines billed at $.********
Number of Lines billed at $.********
ANI detail to support line counts including State, ILEC,
install, and disconnect dates
$1.5M Monthly Minimum Software License Fee
Line Fee
Plus/Minus Carry-forward / Gross-up
Minus Amortization of Prepayment
Z-Node Service Fee Number of LW Based Voice Mailboxes
(first) and associated minutes
Number of LW Based Voice Mailboxes
(incremental) and associated minutes
Minutes billed at $.********
Minutes billed at $.********
Minutes billed at $.********
ANI detail
ZNode Headcount Name
Job Code/Project Code
Position
Function
Salary
********
********
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EXHIBIT 7, P. 1 OF 2
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Charge Type Required Invoice Information
----------- ----------------------------
******** Migration Orders Submitted
New Orders Submitted
Change Orders Submitted
Trouble Tickets Submitted
Escalation Tickets Submitted
******** Cost per Order/Ticket
******** Laser Printing (First Images)
Laser Printing (Second Images)
Inserts (#)
Manual Processing (#)
Technical Support (Hours)
Rate per Invoice (First & Second Images
Rate per Insert
Rate for Manual Processing (per xxxx)
Rate per Hour for Techical Support
Access Fees (billed to
MCI)* Minutes by State
Rates by State
* Access Charges may be billed on separate invoices.
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EXHIBIT 7, P. 2 OF 2
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 8
SOFTWARE RESTRICTIONS FLOW-DOWNS
********
page omitted in its entirety pursuant to a confidentiality treatment request
--------------------------------------------------------------------------------
EXHIBIT 8, P. 1 OF 1
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 9
PREFERRED ESCROW AGREEMENT
Account Number ______________________
This agreement ("Agreement") is effective March ____, 2002 among DSI Technology
Escrow Services, Inc. ("DSI"), Z-Tel Communications, Inc. ("Depositor") and MCI
WORLDCOM Communications, Inc. ("Preferred Beneficiary"), who collectively may be
referred to in this Agreement as the parties ("Parties").
A. Depositor and Preferred Beneficiary have entered into an Agreement for
Wholesale Telephone Exchange, Z-Node Services, Ancillary Services and Technology
License, effective March____, 2002, regarding, in part, certain proprietary
technology of Depositor ******** (referred to in this Agreement as "the License
Agreement").
B. Depositor desires to avoid disclosure of such technology except under certain
limited circumstances.
C. The availability of such technology is critical to Preferred Beneficiary in
the conduct of its business and, therefore, Preferred Beneficiary needs access
to such technology under certain limited circumstances.
D. Depositor and Preferred Beneficiary desire to establish an escrow with DSI to
provide for the retention, administration and controlled access to certain of
such technology materials of Depositor ********.
E. The Parties desire this Agreement to be supplementary to the License
Agreement pursuant to the United States Bankruptcy Code, specifically 11 USC
Section 365(n).
ARTICLE 1 -- DEPOSITS
1.1 Obligation to Make Deposit. Upon the signing of this Agreement by the
Parties, Depositor shall deliver to DSI the proprietary technology, ******** and
other materials ("Deposit Materials") required to be deposited by the License
Agreement or, if the License Agreement does not identify the materials to be
deposited with DSI, then such materials will be identified on Exhibit A. If
Exhibit A is applicable, it is to be prepared and signed by Depositor and
Preferred Beneficiary. DSI shall have no obligation with respect to the
preparation, signing or delivery of Exhibit A.
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EXHIBIT 9, P. 1 OF 9
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.2 Identification of Tangible Media. Prior to the delivery of the Deposit
Materials to DSI, Depositor shall conspicuously label for identification each
document, magnetic tape, disk, or other tangible media upon which the Deposit
Materials are written or stored. Additionally, Depositor shall complete Exhibit
B to this Agreement by listing each such tangible media by the item label
description, the type of media and the quantity. Exhibit B shall be signed by
Depositor and delivered to DSI with the Deposit Materials. Unless and until
Depositor makes the initial deposit with DSI, DSI shall have no obligation with
respect to this Agreement, except the obligation to notify the Parties regarding
the status of the account as required in Section 2.2 below.
1.3 Deposit Inspection. When DSI receives the Deposit Materials and Exhibit B,
DSI will conduct a deposit inspection by visually matching the labeling of the
tangible media containing the Deposit Materials to the item descriptions and
quantity listed on Exhibit B. In addition to the deposit inspection, Preferred
Beneficiary may elect to cause a verification of the Deposit Materials in
accordance with Section 1.6 below.
1.4 Acceptance of Deposit. At completion of the deposit inspection, if DSI
determines that the labeling of the tangible media matches the item descriptions
and quantity on Exhibit B, DSI will date and sign Exhibit B and mail a copy
thereof to Depositor and Preferred Beneficiary. If DSI determines that the
labeling does not match the item descriptions or quantity on Exhibit B, DSI will
(a) note the discrepancies in writing on Exhibit B; (b) date and sign Exhibit B
with the exceptions noted; and (c) mail a copy of Exhibit B to Depositor and
Preferred Beneficiary. DSI's acceptance of the deposit occurs upon the signing
of Exhibit B by DSI. Delivery of the signed Exhibit B to Preferred Beneficiary
is Preferred Beneficiary's notice that the Deposit Materials have been received
and accepted by DSI.
1.5 Depositor's Representations. Depositor represents as follows:
a. Depositor lawfully possesses all of the Deposit Materials deposited
with DSI;
b. With respect to all of the Deposit Materials, ********, Depositor
has the right and authority to grant to DSI and Preferred
Beneficiary the rights as provided in this Agreement, including but
not limited to the right of DSI or Preferred Beneficiary to conduct
a verification of Deposit Materials as provided in Section 1.6;
c. The Deposit Materials are not subject to any lien or other
encumbrance;
d. The Deposit Materials consist of the proprietary technology,
******** and other materials identified either in the License
Agreement or Exhibit A, as the case may be; and
e. The Deposit Materials are readable and useable in their current form
or, if any portion of the Deposit Materials is encrypted, the
decryption tools and decryption keys have also been deposited.
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EXHIBIT 9, P. 2 OF 9
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
1.6 Verification. Preferred Beneficiary shall have the right, at Preferred
Beneficiary's expense, to cause a verification of any Deposit Materials.
Preferred Beneficiary shall notify Depositor and DSI of Preferred Beneficiary's
request for verification. Depositor shall have the right to be present at the
verification. A verification determines, in different levels of detail, the
accuracy, completeness, sufficiency and quality of the Deposit Materials. If a
verification is elected after the Deposit Materials have been delivered to DSI,
then only DSI, or at DSI's election an independent person or company selected
and supervised by DSI, may perform the verification.
1.7 Deposit Updates. Unless otherwise provided by the License Agreement,
Depositor shall update the Deposit Materials not less frequently than on a
monthly basis during the term of the License Agreement and any related
transition period. Such updates will be added to the existing deposit. All
deposit updates shall be listed on a new Exhibit B and Depositor shall sign the
new Exhibit B. Each Exhibit B will be held and maintained separately within the
escrow account. An independent record will be created which will document the
activity for each Exhibit B. The processing of all deposit updates shall be in
accordance with Sections 1.2 through 1.6 above. All references in this Agreement
to the Deposit Materials shall include the initial Deposit Materials and any
updates.
1.8 Removal of Deposit Materials. The Deposit Materials may be removed and/or
exchanged only on written instructions signed by Depositor and Preferred
Beneficiary, or as otherwise provided in this Agreement.
ARTICLE 2 -- CONFIDENTIALITY AND RECORD KEEPING
2.1 Confidentiality. DSI shall maintain the Deposit Materials in a secure,
environmentally safe, locked facility that is accessible only to authorized
representatives of DSI. DSI shall have the obligation to reasonably protect the
confidentiality of the Deposit Materials. Except as provided in this Agreement,
DSI shall not disclose, transfer, make available, or use the Deposit Materials.
DSI shall not disclose the content of this Agreement to any third party. If DSI
receives a subpoena or any other order from a court or other judicial tribunal
pertaining to the disclosure or release of the Deposit Materials, DSI will
immediately notify the Parties to this Agreement unless prohibited by law. It
shall be the responsibility of Depositor and/or Preferred Beneficiary to
challenge any such order; provided, however, that DSI does not waive its rights
to present its position with respect to any such order. DSI will not be required
to disobey any order from a court or other judicial tribunal. (See Section 7.5
below for notices of requested orders.)
2.2 Status Reports. DSI will issue to Depositor and Preferred Beneficiary a
report profiling the account history at least semi-annually. DSI may provide
copies of the account history pertaining to this Agreement upon the request of
any party to this Agreement.
2.3 Audit Rights. During the term of this Agreement, Depositor and Preferred
Beneficiary shall each have the right to inspect the written records of DSI
pertaining to this Agreement. Any inspection shall be held during normal
business hours and following reasonable prior notice.
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EXHIBIT 9, P. 3 OF 9
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
ARTICLE 3 -- GRANT OF RIGHTS TO DSI
3.1 Title to Media. Depositor hereby transfers to DSI the title to the media
upon which the Deposit Materials are written or stored. However, this transfer
does not include the ownership of the proprietary and ******** and materials
contained on the media such as any copyright, trade secret, patent or other
intellectual property rights.
3.2 Right to Make Copies. DSI shall have the right to make copies of the Deposit
Materials as reasonably necessary to perform this Agreement. DSI shall copy all
copyright, nondisclosure, and other proprietary notices and titles contained on
the Deposit Materials onto any copies made by DSI. With all Deposit Materials
submitted to DSI, Depositor shall provide any and all instructions as may be
necessary to duplicate the Deposit Materials including but not limited to the
hardware and/or software needed.
3.3 Right to Transfer Upon Release. Depositor hereby grants to DSI the right to
transfer the Deposit Materials to Preferred Beneficiary upon any release of the
Deposit Materials for use by Preferred Beneficiary in accordance with Section
4.5. Except upon such a release or as otherwise provided in this Agreement, DSI
shall not transfer the Deposit Materials.
ARTICLE 4 -- RELEASE OF DEPOSIT
4.1 Release Conditions. As used in this Agreement, "Release Condition" shall
mean the occurrence of a "Triggering Event" as described in the License
Agreement.
4.2 Filing For Release. If Preferred Beneficiary determines, in its sole
discretion, that a Release Condition has occurred, Preferred Beneficiary may
provide to DSI written notice of the occurrence of the Release Condition and
demand delivery of the Deposit Materials (the "Release Instruction") in the form
of Exhibit D hereto. DSI shall provide a copy of the Release Instruction to
Depositor via certified mail, return receipt requested, or by commercial express
mail.
4.3 Release of Deposit. Upon receipt of the Release Instruction from Preferred
Beneficiary, DSI shall have no obligation to determine independently whether a
Release Condition has occurred. DSI shall further have no right to refuse to
release the Deposit Materials to Preferred Beneficiary. If Depositor disputes
DSI's release of the Deposit Materials, Depositor and Preferred Beneficiary
shall resolve the dispute as provided in the License Agreement. Regardless
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EXHIBIT 9, P. 4 OF 9
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
of whether Depositor disputes DSI's release of the Deposit Materials, DSI is
authorized and directed by Depositor and Preferred Beneficiary to release the
Deposit Materials to the Preferred Beneficiary upon receipt of the Release
Instruction. However, DSI is entitled to receive any fees due DSI before making
the release. This Agreement will terminate upon the release of the Deposit
Materials held by DSI.
4.4 Return of Deposit. During the term of this Agreement, upon dispute
resolution pursuant to the License Agreement requiring the Deposit Materials to
be returned to Depositor, Preferred Beneficiary shall deliver the Deposit
Materials, and all copies thereof, in accordance with the order issued as a
result of dispute resolution, and shall certify in writing to Depositor that
Preferred Beneficiary has no copies of the Deposit Materials in Preferred
Beneficiary's possession.
4.5 Right to Use Following Release. Unless otherwise provided in the License
Agreement, upon release of the Deposit Materials in accordance with this Article
4, Preferred Beneficiary shall have the right to use the Deposit Materials as
expressly provided in the License Agreement. Preferred Beneficiary shall be
obligated to maintain the confidentiality of the released Deposit Materials as
provided by the License Agreement.
ARTICLE 5 -- TERM AND TERMINATION
5.1 Term of Agreement. The initial term of this Agreement is for a period of one
year. Thereafter, this Agreement shall automatically renew from year-to-year
unless (a) Depositor and Preferred Beneficiary jointly instruct DSI in writing
that the Agreement is terminated; or (b) DSI instructs Depositor and Preferred
Beneficiary in writing that the Agreement is terminated for nonpayment in
accordance with Section 5.2 or by resignation in accordance with Section 5.3. If
the Deposit Materials are subject to another escrow agreement with DSI, DSI
reserves the right, after the initial one year term, to adjust the anniversary
date of this Agreement to match the then prevailing anniversary date of such
other escrow arrangements.
5.2 Termination for Nonpayment. In the event of the nonpayment of fees owed to
DSI, DSI shall provide written notice of delinquency to all Parties to this
Agreement. Any party to this Agreement shall have the right to make the payment
to DSI to cure the default. If the past due payment is not received in full by
DSI within one month of the date of such notice, then DSI shall have the right
to terminate this Agreement at any time thereafter by sending written notice of
termination to all Parties. DSI shall have no obligation to take any action
under this Agreement so long as any payment due to DSI remains unpaid.
5.3 Termination by Resignation. DSI reserves the right to terminate this
Agreement, for any reason, by providing Depositor and Preferred Beneficiary with
60-days' written notice of its intent to terminate this Agreement. Within the
60-day period, the Depositor and Preferred Beneficiary may provide DSI with
joint written instructions authorizing DSI to forward the
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EXHIBIT 9, P. 5 OF 9
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Deposit Materials to another escrow company and/or agent or other designated
recipient. If DSI does not receive said joint written instructions within 60
days of the date of DSI's written termination notice, then DSI shall destroy,
return or otherwise deliver the Deposit Materials in accordance with Section
5.4.
5.4 Disposition of Deposit Materials Upon Termination. Subject to the foregoing
termination provisions, and upon termination of this Agreement, DSI shall
destroy, return, or otherwise deliver the Deposit Materials in accordance with
Depositor's instructions. If there are no instructions, DSI may, at its sole
discretion, destroy the Deposit Materials or return them to Depositor. DSI shall
have no obligation to destroy or return the Deposit Materials if the Deposit
Materials are subject to another escrow agreement with DSI or have been released
to the Preferred Beneficiary in accordance with Section 4.4.
5.5 Survival of Terms Following Termination. Upon termination of this Agreement,
the following provisions of this Agreement shall survive:
a. Depositor's Representations (Section 1.5);
b. The obligations of confidentiality with respect to the Deposit
Materials;
c. The rights granted in the sections entitled Right to Transfer Upon
Release (Section 3.3) and Right to Use Following Release (Section
4.5), if a release of the Deposit Materials has occurred prior to
termination;
d. The obligation to pay DSI any fees and expenses due;
e. The provisions of Article 7; and
f. Any provisions in this Agreement which specifically state they
survive the termination of this Agreement.
ARTICLE 6 -- DSI'S FEES
6.1 Fee Schedule. DSI is entitled to be paid its standard fees and expenses
applicable to the services provided. The Preferred Beneficiary and not the
Depositor shall pay such fees. DSI shall notify the party responsible for
payment of DSI's fees at least 60 days prior to any increase in fees. For any
service not listed on DSI's standard fee schedule, DSI will provide a quote
prior to rendering the service, if requested.
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EXHIBIT 9, P. 6 OF 9
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
6.2 Payment Terms. DSI shall not be required to perform any service unless the
payment for such service and any outstanding balances owed to DSI are paid in
full. Fees are due upon receipt of a signed contract or receipt of the Deposit
Materials whichever is earliest. If invoiced fees are not paid, DSI may
terminate this Agreement in accordance with Section 5.2.
ARTICLE 7 -- LIABILITY AND DISPUTES
7.1 Right to Rely on Instructions. DSI may act in reliance upon any instruction,
instrument, or signature reasonably believed by DSI to be genuine. DSI may
assume that any employee of a party to this Agreement who gives any written
notice, request, or instruction has the authority to do so. DSI will not be
required to inquire into the truth or evaluate the merit of any statement or
representation contained in any notice or document. DSI shall not be responsible
for failure to act as a result of causes beyond the reasonable control of DSI.
7.2 Indemnification. Depositor and Preferred Beneficiary each agree to
indemnify, defend and hold harmless DSI from any and all claims, actions,
damages, arbitration fees and expenses, costs, attorney's fees and other
liabilities ("Liabilities") incurred by DSI relating in any way to this escrow
arrangement unless such Liabilities were caused solely by the negligence or
willful misconduct of DSI.
7.3 Dispute Resolution. In the event of a dispute between Depositor and
Preferred Beneficiary pursuant to a release under Article 4, Depositor and
Preferred Beneficiary shall resolve such dispute pursuant to the License
Agreement. In the event of any other dispute relating to or arising from this
Agreement, DSI may submit the matter to any court of competent jurisdiction in
an interpleader or similar action. Any and all costs incurred by DSI in
connection therewith, including reasonable attorneys' fees and costs, shall be
borne 50% by each of Depositor and Preferred Beneficiary. DSI shall perform any
acts ordered by any court of competent jurisdiction, without any liability or
obligation to any party hereunder by reason of such act.
7.4 Controlling Law. This Agreement is to be governed and construed in
accordance with the laws of the State of New York, without regard to its
conflict of law provisions.
7.5 Notice of Requested Order. If any party intends to obtain an order from any
court of competent jurisdiction that may direct DSI to take, or refrain from
taking any action, that party shall:
a. Give DSI at least two business days' prior notice of the hearing;
b. Provide in any such order that, as a precondition to DSI's
obligation, DSI must be paid in full for any past due fees and be
paid for the reasonable value of the services to be rendered
pursuant to such order; and
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EXHIBIT 9, P. 7 OF 9
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
c. Ensure that DSI not be required to deliver the original (as opposed
to a copy) of the Deposit Materials if DSI may need to retain the
original in its possession to fulfill any of its other duties.
ARTICLE 8 -- GENERAL PROVISIONS
8.1 Entire Agreement. This Agreement, which includes Exhibits described herein,
embodies the entire understanding among the Parties with respect to its subject
matter and supersedes all previous communications, representations or
understandings, either oral or written, provided that as between Depositor and
Preferred Beneficiary, this Agreement is not intended nor shall be construed to
supercede the License Agreement, except for those obligations of Depositor
and/or Preferred Beneficiary to DSI. DSI is not a party to the License Agreement
between Depositor and Preferred Beneficiary and has no knowledge of any of the
terms or provisions of any such License Agreement. DSI's only obligations to
Depositor or Preferred Beneficiary are as set forth in this Agreement. No
amendment or modification of this Agreement shall be valid or binding unless
signed by all the Parties hereto, except that Exhibit A need not be signed by
DSI, Exhibit B need not be signed by Preferred Beneficiary and Exhibit C need
not be signed.
8.2 Notices. All notices, invoices, payments, deposits and other documents and
communications shall be given to the Parties at the addresses specified in the
attached Exhibit C. It shall be the responsibility of the Parties to notify each
other as provided in this Section in the event of a change of address. The
Parties shall have the right to rely on the last known address of the other
Parties. Unless otherwise provided in this Agreement, all documents and
communications may be delivered by First Class mail.
8.3 Severability. In the event any provision of this Agreement is found to be
invalid, voidable or unenforceable, the Parties agree that unless it materially
affects the entire intent and purpose of this Agreement, such invalidity,
voidability or unenforceability shall affect neither the validity of this
Agreement nor the remaining provisions herein, and the provision in question
shall be deemed to be replaced with a valid and enforceable provision most
closely reflecting the intent and purpose of the original provision.
8.4 Successors. This Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the Parties. However, DSI shall have no
obligation in performing this Agreement to recognize any successor or assign of
Depositor or Preferred Beneficiary unless DSI receives clear, authoritative and
conclusive written evidence of the change of parties.
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EXHIBIT 9, P. 8 OF 9
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
8.5 Regulations. Depositor and Preferred Beneficiary are responsible for and
warrant compliance with all applicable laws, rules and regulations, including
but not limited to customs laws, import, export, and re-export laws and
government regulations of any country from or to which the Deposit Materials may
be delivered in accordance with the provisions of this Agreement.
____________________________________ _____________________________________
Depositor Preferred Beneficiary
By: ________________________________ By: _________________________________
Name:_______________________________ Name:________________________________
Title:______________________________ Title:_______________________________
Date:_______________________________ Date:________________________________
DSI Technology Escrow Services, Inc.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Date:_____________________________________
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EXHIBIT 9, P. 9 OF 9
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 9-A
MATERIALS TO BE DEPOSITED
Account Number ______________________
Depositor represents to Preferred Beneficiary that Deposit Materials delivered
to DSI shall consist of the following:
_____________________________________ ____________________________________
Depositor Preferred Beneficiary
By: _________________________________ By: ________________________________
Name:________________________________ Name:_______________________________
Title:_______________________________ Title:______________________________
Date:________________________________ Date:_______________________________
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EXHIBIT 9-A, P. 1 OF 1
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 9-B
DESCRIPTION OF DEPOSIT MATERIALS
Depositor Company Name _______________________________________________________
Account Number _______________________________________________________________
Deposit Materials:____________________________________Version_________________
(Product Name will appear as the Exhibit B Name on Account History report)
DEPOSIT MATERIAL DESCRIPTION:
Quantity Media Type & Size Label Description of Each Separate Item
______ Disk 3.5" or ____
______ DAT tape ____mm
______ CD-ROM
______ Data cartridge tape ____
______ TK 70 or ____ tape
______ Magnetic tape ____
______ Documentation
______ Other ______________________
TECHNOLOGY DESCRIPTION:
Environment___________________________________________________________________
DEPOSIT MATERIAL INFORMATION:
Is the media or are any of the files encrypted? Yes/No If yes, please include
any passwords and the decryption tools.
Encryption tool name ___________________________________ Version _____________
Hardware required ____________________________________________________________
Software required ____________________________________________________________
Other required information ___________________________________________________
I certify for DEPOSITOR that the DSI has inspected and accepted the
above described Deposit Materials above materials (any exceptions
have been transmitted to DSI: are noted above):
Signature _______________________ Signature __________________________
Print Name ______________________ Print Name _________________________
Date ____________________________ Date Accepted ______________________
Exhibit B# _________________________
Send materials to: DSI, 0000 Xxx Xxxx Xx., Xxxxx 000, Xxx Xxxxx, XX 00000
(000) 000-0000
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EXHIBIT 9-B, P. 1 OF 1
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 9-C
DESIGNATED CONTACT
Account Number ______________________
Notices, deposit material returns and
communications to Depositor Invoices to Depositor should be
should be addressed to: addressed to:
Company Name:_________________________ ___________________________________
Address:______________________________ ___________________________________
______________________________ ___________________________________
______________________________ ___________________________________
Designated Contact:___________________ Contact:___________________________
Telephone:____________________________ ___________________________________
Facsimile:____________________________ P.O.#, IF REQUIRED:________________
E-mail: _____________________________ E-mail:____________________________
Verification Contact:_________________
Notices and communications to Invoices to Preferred Beneficiary
Preferred Beneficiary should be should be addressed to:
addressed to:
Company Name:_________________________ ___________________________________
Address:______________________________ ___________________________________
______________________________ ___________________________________
______________________________ ___________________________________
Designated Contact:___________________ Contact:___________________________
Telephone:____________________________ ___________________________________
Facsimile:____________________________ P.O.#, IF REQUIRED:________________
E-mail: _____________________________ E-mail:____________________________
Verification Contact:_________________
Requests from Depositor or Preferred Beneficiary to change the designated
contact should be given in writing by the designated contact or an authorized
employee of Depositor or Preferred Beneficiary.
Contracts, Deposit Materials and Invoice inquiries and fee remittances
notices to DSI should be addressed to: to DSI should be addressed to:
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EXHIBIT 9-C, P. 1 OF 2
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
DSI Technology Escrow Services, Inc. DSI Technology Escrow Services, Inc.
Contract Administration PO Box 45156
0000 Xxx Xxxx Xxxxx, Xxxxx 000 Xxx Xxxxxxxxx, XX 00000-0000
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000 (000) 000-0000
Facsimile: (000) 000-0000 (000) 000-0000
E-mail: xx@xxxxxxxxx.xxx
Date:_________________________________
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EXHIBIT 9-C, P. 2 OF 2
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 9-D
TECHNOLOGY ESCROW RELEASE INSTRUCTION
To: DSI Technology Escrow Services, Inc.
From: MCI WORLDCOM Communications, Inc.
Re: Z-Tel/MCI Technology Escrow
The undersigned certifies, on behalf of MCI WORLDCOM Communications, Inc., that
a Primary Z-Tel Triggering Event has occurred within the meaning of the
Agreement For Wholesale Telephone Exchange Services, Z-Node Services, Ancillary
Services And Technology License dated _____________ between Z-Tel
Communications, Inc. and MCI WORLDCOM Communications, Inc. That event is
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
OR
The undersigned certifies, on behalf of MCI WORLDCOM Communications, Inc., that
a Secondary Z-Tel Triggering Event has occurred within the meaning of the
Agreement For Wholesale Telephone Exchange Services, Z-Node Services, Ancillary
Services And Technology License dated _____________ between Z-Tel
Communications, Inc. and MCI WORLDCOM Communications, Inc. That event is
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The undersigned also certifies, on behalf of MCI WORLDCOM Communications, Inc.,
that MCI has tendered to Z-Tel in immediately available funds the amount of
$_________, representing the difference between $50 million and the amount
previously paid by MCI to Z-Tel in Software License Fees.
The undersigned demands, on behalf of MCI WORLDCOM Communications, Inc., the
immediate release of the Technology Escrow Materials to MCI.
MCI WORLDCOM Communications, Inc.
By:_______________________________
Title:____________________________
Date:_____________________________
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EXHIBIT 9-D, P. 1 OF 1
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 10
TECHNOLOGY ESCROW RELEASE INSTRUCTION
To: DSI Technology Escrow Services, Inc.
From: MCI WORLDCOM Communications, Inc.
Re: Z-Tel/MCI Technology Escrow
The undersigned certifies, on behalf of MCI WORLDCOM Communications, Inc., that
a Primary Z-Tel Triggering Event has occurred within the meaning of the
Agreement For Wholesale Telephone Exchange Services, Z-Node Services, Ancillary
Services And Technology License dated _____________ between Z-Tel
Communications, Inc. and MCI WORLDCOM Communications, Inc. That event is
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
OR
The undersigned certifies, on behalf of MCI WORLDCOM Communications, Inc., that
a Secondary Z-Tel Triggering Event has occurred within the meaning of the
Agreement For Wholesale Telephone Exchange Services, Z-Node Services, Ancillary
Services And Technology License dated _____________ between Z-Tel
Communications, Inc. and MCI WORLDCOM Communications, Inc. That event is
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The undersigned also certifies, on behalf of MCI WORLDCOM Communications, Inc.,
that MCI has tendered to Z-Tel in immediately available funds the amount of
$_________, representing the difference between ******** and the amount
previously paid by MCI to Z-Tel in Software License Fees.
The undersigned demands, on behalf of MCI WORLDCOM Communications, Inc., the
immediate release of the Technology Escrow Materials to MCI.
MCI WORLDCOM Communications, Inc.
By:_________________________________
Title:______________________________
Date:_______________________________
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EXHIBIT 10, P. 1 OF 1
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 11
MCI MARKS
Logos:
MCI
********
Word Marks:
MCI
********
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EXHIBIT 11, P. 1 OF 1
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 12
SUBSCRIPTION, PREEMPTIVE RIGHTS, AND REGISTRATION RIGHTS
AGREEMENT
THIS SUBSCRIPTION, PREEMPTIVE RIGHTS, AND REGISTRATION RIGHTS AGREEMENT
(this "Agreement") is made and entered into this ____ day of __________, 2002,
by and between Z-Tel Technologies, Inc. (the "Company"), a Delaware corporation,
and MCI WORLDCOM Communications, Inc., a Delaware corporation ("MCI")
(collectively the "Parties").
WITNESSETH:
WHEREAS, the Company desires to issue shares of the Company's common
stock, which trade on Nasdaq under the symbol (ZTEL) (the "Common Stock") to MCI
and MCI desires to subscribe to shares of Common Stock from the Company in
accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
ARTICLE I
SUBSCRIPTION
1. SUBSCRIPTION AND ACCEPTANCE
On the terms and subject to the conditions set forth in this Agreement,
MCI hereby subscribes for and agrees to purchase, and the Company hereby agrees
to issue and sell to MCI, 1,000,000 shares of the Common Stock at a price per
share equal to $ 2.33 (the "Subscription Shares"). Upon execution of this
Agreement by the Company and MCI, MCI will pay an amount equal to $2,330,000.00,
and the Company will promptly issue the Subscription Shares to MCI and cause the
delivery to MCI of one or more certificates representing the Subscription
Shares.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY Z-TEL
The Company does hereby represent, warrant, acknowledge and agree that:
2.1 Due Incorporation and Authority. The Company is a company
duly organized, validly existing and in good standing under the laws of
Delaware and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now
being heretofore conducted or as contemplated by the various agreements
between the Parties.
EXHIBIT 12, P. 1 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
2.2 Qualification. The Company and each of its subsidiaries is
duly qualified or otherwise authorized to transact business and is in
good standing in each jurisdiction in which such qualification is
required by law or in which the failure so to qualify or be authorized
could have material adverse effect on the properties, business,
prospects, results of operations or financial condition of the Company
and the subsidiaries.
2.3. SEC Filings. The Company's filings with the Securities
Exchange Commission when filed were accurate in all material respects
and fairly presented the Company's outstanding capital stock, including
the options and other securities exercisable for, convertible into or
exchangeable for capital stock of the Company.
2.4 Authority to Execute and Perform Agreement. The Company
has the full power and authority to enter into, execute and deliver
this Agreement, and to issue and deliver the Subscription Shares and to
incur and perform fully its obligations provided for herein, all of
which have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by the Company and
(assuming the due authorization, execution and delivery hereof by MCI)
is the valid and binding obligation of the Company enforceable in
accordance with its terms.
2.5 No Breach. The execution, delivery and performance of this
Agreement and each other agreement and instrument contemplated hereby
by the Company and the consummation of the transactions contemplated
hereby will not (i) violate any provision of the certificate of
incorporation of the Company; (ii) require the Company to obtain any
consent, approval, authorization or action of, or make any filing with
or give any notice to, any governmental body or any other person; (iii)
violate, conflict with or result in the breach of any of the terms and
conditions of, result in a material modification of the effect of,
otherwise cause the termination of or give any other contracting party
the right to terminate, or constitute (or with notice or lapse of time
or both constitute) a default under, any contract, agreement,
indenture, note, bond, loan, instrument, lease, conditional sale
contract, mortgage, license, franchise, commitment or other binding
arrangement (each, a "Contract") to which the Company is a party or by
or to which the Company or any of its properties is or may be bound or
subject, or result in the creation of any Lien upon any of the
properties of the Company pursuant to the terms of any such Contract;
(iv) violate any applicable order, judgment, injunction, award, decree
or writ naming the Company, or binding upon the Company or upon its
securities, properties or businesses; (v) violate any law applicable to
the Company; or (vi) result in the creation of any lien on the
Subscription Shares.
2.6 Valid Issuance. The Subscription Shares, when issued and
delivered pursuant to this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable.
2.7 Exempt Offering. The offer and sale of the Subscription
Shares in the manner contemplated by this Agreement will be exempt from
the registration requirements
EXHIBIT 12, P. 2 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
of the Securities Act of 1933, as amended; and it is not necessary to
qualify an indenture in respect of the Subscription Shares under the
Trust Indenture Act of 1939, as amended.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY MCI
MCI does hereby represent, warrant, acknowledge and agree that:
3.1 Information About the Company. MCI has received and
reviewed all of the information concerning the Company that MCI
considers to be material in making an investment decision regarding the
Common Stock and the Company. MCI has had access to the books and
records of the Company and to its officers, directors, and other
representatives for the purpose of obtaining and verifying such
information. MCI has had a full and fair opportunity to meet with
officers, directors and other representatives of the Company and to ask
questions and receive answers regarding the business of the Company and
its financial condition and results of operations, status and
prospects, risk factors, contingencies and uncertainties and any other
matters of concern to MCI about the Company as MCI believes necessary
or appropriate to assist in an evaluation of the merits and risks of
investing in the Common Stock. All material documents and information
pertaining to the Company and an investment therein as may have been
requested were made available to MCI.
3.2 Restricted Securities. The Subscription Shares have not
been registered under the Securities Act of 1933, as amended
("Securities Act"), or under any state securities law and, accordingly,
the Subscription Shares constitute "restricted securities" under
federal and state securities laws and may not be offered for sale,
sold, pledged or otherwise distributed or encumbered unless (1) a
registration statement with respect to the Subscription Shares is
effective, or (2) a transactional exemption from registration applies
to the disposition. The Company has no present or foreseeable intention
of registering the Subscription Shares and has a duty to effect such a
registration only as set forth in this Agreement.
3.3 Purchase for Investment. The Subscription Shares are being
acquired solely for MCI's own account, for investment, and not with a
view to, or in connection with, any resale or distribution in violation
of the securities registration requirements of applicable federal or
state securities laws. MCI has no contract, understanding or
arrangement with any person to sell, transfer or pledge to such person,
or anyone else, any of the Subscription Shares, and has no present plan
or intention to enter into any such contract, understanding or
arrangement.
3.4 Legend. A legend in substantially the following form will
be placed on the certificates evidencing the Subscription Shares, in
addition to any legends required by any of the securities laws of any
state:
The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended, or
under the securities act of any state. The securities may not
be sold or offered for sale in the absence of an effective
registration statement for the securities under the Securities
Act of 1933, as
EXHIBIT 12, P. 3 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
amended, and such state laws as may be applicable, or an
opinion of counsel satisfactory to the company that such
registration is not required.
ARTICLE II
PREEMPTIVE RIGHTS
If, any time during the three year period commencing on the date of this
Agreement, the Company shall issue any Common Stock or any debt or equity
securities convertible into or exchangeable for Common Stock ("Additional
Securities"), then, subject to the last sentence of this paragraph, the Company
shall offer to MCI an opportunity to purchase from the Company, at the same
price, for the same consideration, and on the same terms and subject to the same
conditions as are applicable to purchases by others, such number of Additional
Securities as are necessary for MCI to maintain its then-current "percentage
equity ownership interest" in the Company. MCI shall have the right, but not the
obligation, to accept any such offer in whole or in part. Upon commencement of
such issuance, the Company shall present to MCI in writing the terms and
conditions of such issuance, along with a calculation showing the number of
Additional Securities to which MCI is entitled to subscribe. Upon receipt of
such offer, MCI will have fifteen (15) calendar days in which to exercise its
rights under this Article II, by written notice to the Company. If MCI does not
exercise its rights with respect to such issuance within such fifteen (15) days,
then those rights will expire with respect to that issuance of Additional
Securities. This Article II shall not apply to (i) any issuance pursuant to the
Company's equity participation plans, or (ii) the exercise of one or more
warrants, options, conversion rights, exchange rights, or similar rights (A)
existing as of the date of this Agreement, (B) issued pursuant to the Company's
equity participation plans, (C) issued pursuant to agreements or rights existing
as of the date of this Agreement or (D) associated with any Additional
Securities. For the purposes of this Agreement the phrase "percentage equity
ownership interest" means the percentage of the outstanding Common Stock
represented by the Subscription Shares and any securities purchased pursuant to
this Article, assuming the full conversion, exchange and exercise of all
outstanding securities of the Company that are directly or indirectly
convertible into, exchangeable for or exercisable for Common Stock.
ARTICLE III
REGISTRATION RIGHTS
1. DEFINITIONS
1.1 For the purposes of this Article III:
"Affiliate" means affiliate, as that term is defined under
Rule 144.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Preemptive Shares" means shares of Common Stock acquired
pursuant to the rights set forth in Article II hereof or pursuant to any
exercise or conversion of securities acquired pursuant to the rights set forth
in article II hereof.
EXHIBIT 12, P. 4 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
"Registrable Securities" means the Subscription Shares and the
Preemptive Shares, and any shares of Common Stock issued upon any stock split,
stock dividend, recapitalization, distribution, conversion or exchange of or
with respect to such shares until, in the case of any share, (i) it no longer is
held by MCI, or (ii) it is saleable by MCI pursuant to Rule 144(k) without any
volume limitation applicable thereto.
"Registration Expenses" means all fees and expenses relating
to a Registration Statement incident to the performance of or compliance with
this Agreement by the Company, including without limitation (i) all registration
and filing fees (including without limitation fees and expenses (x) with respect
to filings required to be made with the National Association of Securities
Dealers, Inc. and (y) in compliance with securities or "blue sky" laws
(including without limitation reasonable fees and disbursements of counsel for
the underwriters or MCI in connection with "blue sky" qualifications of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as the managing
underwriters, if any, may designate)), (ii) printing expenses (including
printing of prospectuses if required), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company, (v) fees and
disbursements of independent certified public accountants of the Company
(including the reasonable expenses of any special audit and "comfort" letters
required by or incident to such performance), (vi) fees and expenses of any
"qualified independent underwriter" or other independent appraiser participating
in an offering pursuant to Section 3 of Schedule E to the By-laws of the
National Association of Securities Dealers, Inc., if any, (vii) Securities Act
liability insurance if the Company so desires such insurance, (viii) the fees
and expenses incurred in connection with the listing of the securities to be
registered on any securities exchange on which similar securities by the Company
are then listed, and (ix) fees and expenses of all other persons retained by the
Company; provided, however, that Registration Expenses will not include
underwriting discounts and commissions relating to the offer and sale of
Registrable Securities, all of which shall be borne by MCI.
"Registration Statement" means any registration statement
under the Securities Act that covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including without limitation the related
Prospectus, all amendments and supplements to such registration statement
(including post-effective amendments), all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
"Rule 144" means Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of equity securities of the Company
outstanding from time to time.
EXHIBIT 12, P. 5 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
"Underwritten Offering" means a distribution, registered
pursuant to the Securities Act, in which securities of the Company are sold to
an underwriter for reoffering to the public.
1.2 Whenever a number or percentage of Registrable Securities is to be
determined hereunder, each then-outstanding Share that is exercisable to
purchase, convertible into or exchangeable for shares of capital stock of the
Company will be deemed to be equal to the number of shares of Common Stock for
which such Share (or the security into which such Share is then convertible) is
then so purchasable, convertible or exercisable.
2. PIGGYBACK REGISTRATION
2.1 If at any time the Company proposes to file a registration
statement under the Securities Act with respect to an offering of any class of
Shares (other than a registration statement (i) on Form X-0, X-0 or any
successor form thereto or (ii) filed solely in connection with an offering made
solely to employees of the Company, whether or not for its own account), then
the Company will give written notice of such proposed filing to MCI promptly,
but in any event at least 15 calendar days before the anticipated filing date.
2.2 (a) Such notice will offer MCI the opportunity to register
such amount of Registrable Securities for sale, in the same manner as the manner
in which the shares to be registered in such Registration Statement are to be
offered, as MCI may request (a "Piggyback Registration"). Subject to Section 2.3
of this Article, the Company will include in each such Piggyback Registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein.
(b) MCI will be permitted to withdraw all or part of the
Registrable Securities from a Piggyback Registration at any time prior to the
effective date of such Piggyback Registration.
(c) The Company will be responsible for all Registration
Expenses related to such Piggyback Registration.
2.3 Priority on Piggyback Registration.
(a) The Company will cause the managing underwriter or
underwriters of a proposed Underwritten Offering to include Registrable
Securities on the same terms and conditions as other shares of Common Stock, if
any, included therein.
(b) Notwithstanding the foregoing, if the managing underwriter
or underwriters of such offering deliver a statement in writing to the Company
to the effect that the total amount of securities proposed to be included in
such offering is such as to adversely affect the success of such offering, the
number of Registrable Securities included in such offering shall be reduced, to
the extent necessary to reduce the total amount of securities to be included in
such offering to the amount recommended by such managing underwriter or
underwriters, and any securities to be excluded shall come (i) first, pro rata,
on the basis of the number of shares proposed to be
EXHIBIT 12, P. 6 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
registered, from the Registrable Securities proposed to be registered and from
securities proposed by other participating selling shareholders, if any, who are
to offer shares on a "piggyback" basis in such offering, and (ii) after all such
securities are excluded, from the shares to be offered by the Company and any
shareholder or shareholders on whose behalf the secondary registration was
initiated, in accordance with the agreement of such parties.
3. OTHER AGREEMENTS
3.1 Restrictions on Sale of Registrable Securities. MCI agrees, and
will confirm such agreement in writing if so requested (pursuant to a timely
written notice) by the managing underwriter or underwriters in an Underwritten
Offering, not to effect any public sale or distribution of any of the Company's
Shares (except as part of such Underwritten Offering), including a sale pursuant
to Rule 144, during the 90-calendar day period (or such shorter period
applicable to any officer, director or 5% or greater shareholder in connection
with any underwritten public offering, without regard to any exception to such
agreement granted by the managing underwriter or underwriters; provided that any
such exceptions shall not exceed 500,000 shares in the aggregate) beginning on
the effective date of the Registration Statement in connection with an
Underwritten Offering.
3.2 Registration Procedures. In connection with the Company's
registration obligations pursuant to this Agreement, the Company will:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form available under the Securities
Act for the sale of the Registrable Securities by MCI in accordance with the
intended method or methods of distribution thereof, and cause each such
Registration Statement to become effective; provided, however, that before
filing a Registration Statement or Prospectus or any amendments or supplements
thereto, the Company will furnish to MCI copies of all such documents proposed
to be filed, and will provide MCI a reasonable period of time to review and
comment on such documents (or have counsel do the same);
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the required period,
if any; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by the sellers thereof
set forth in such Registration Statement as so amended or to such Prospectus as
so supplemented;
(c) Notify MCI promptly (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC or any other federal
or state governmental authority for amendments or supplements to a Registration
EXHIBIT 12, P. 7 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Statement or related Prospectus or for additional information, (iii) of the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the occurrence of any event which makes any statement made in
such Registration Statement or related Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect
or which requires the making of any changes in a Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and, in the case of the Prospectus, it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated or that is necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
(vi) of any Company determination that a post-effective amendment to a
Registration Statement would be appropriate; provided that MCI shall cease using
such Prospectus or amendment or supplement thereto immediately upon receipt of
written notice from the Company as to the matters in (ii), (iii), (iv), (v) and
(vi) above;
(d) Use every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement, or the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any jurisdiction, at the
earliest reasonably possible moment;
(e) Furnish to MCI, without charge, at least one conformed
copy of the Registration Statement and any post-effective amendment thereto,
including financial statements (but excluding schedules, all documents
incorporated or deemed incorporated therein by reference and all exhibits,
unless requested);
(f) Deliver to MCI, without charge, as many copies of the
Prospectus or Prospectuses relating to such Registrable Securities (including
each preliminary prospectus) and any amendment or supplement thereto as such
persons may reasonably request; and the Company hereby consents to the use of
such Prospectus or each amendment or supplement thereto by MCI in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto.
(g) Register or qualify or cooperate with MCI in connection
with the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions within the United States as
any seller reasonably requests in writing; keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdiction of the Registrable Securities covered by the applicable
Registration Statement; provided, however, that the Company will not be required
to (i) qualify generally to do business or pay taxes in any jurisdiction in
which it is not then so qualified or so required or (ii) take any action
EXHIBIT 12, P. 8 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
that would subject it to general service of process in any such jurisdiction in
which it is not then so subject;
(h) Cooperate with MCI to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold,
which certificates will not bear any restrictive legends; and enable such
Registrable Securities to be in such denominations and registered in such names
as are reasonably requested by MCI;
(i) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States except as may be
required solely as a consequence of the nature of MCI's business, in which case
the Company will cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals as may be necessary to
enable the seller or sellers thereof or the underwriters, if any, to consummate
the disposition of such Registrable Securities;
(j) Upon the occurrence of any event contemplated by Section
3.2(c)(v) or 3.3(c)(vi) of this Article, prepare a supplement or post-effective
amendment to each Registration Statement or a supplement to the related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered, such Prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(k) Use its commercially reasonable efforts to cause all
Registrable Securities covered by such Registration Statement to be listed on
each securities exchange, if any, on which similar securities issued by the
Company are then listed;
(l) Make available for inspection by a representative of MCI,
and any attorney or accountant retained by MCI, all financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors and employees of the Company and
its subsidiaries to supply all information reasonably requested by any such
representative, attorney or accountant in connection with such Registration
Statement; provided, however, that any records, information or documents that
are designated by the Company in writing as confidential at the time of delivery
of such records, information or documents will be kept confidential by such
persons unless (i) such records, information or documents are in the public
domain or otherwise publicly available, (ii) disclosure of such records,
information or documents is required by court or administrative order or is
necessary to respond to inquires of regulatory authorities, or (iii) disclosure
of such records, information or documents, in the opinion of counsel to such
person, is otherwise required by law (including without limitation pursuant to
the requirements of the Securities Act); and
(m) Comply with applicable rules and regulations of the SEC
and make generally available to its security holders earning statements
satisfying the provisions of Section 1l(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act)
EXHIBIT 12, P. 9 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
no later than 45 calendar days after the end of any 12-month period (or 90
calendar days after the end of any 12-month period if such period is a fiscal
year) commencing on the first day of the first fiscal quarter of the Company,
after the effective date of a Registration Statement, which statements shall
cover said 12-month period.
3.3 Information. The Company may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
Company such information regarding the distribution of such Registrable
Securities as the Company may, from time to time, reasonably request in writing
and the Company may exclude from such registration the Registrable Securities of
any seller who unreasonably fails to furnish such information within a
reasonable time after receiving such request.
3.4 Discontinuation of Sales. Upon receipt of any notice from the
Company of the occurrence of any event of the kind described in Section
3.2(c)(ii), (iii), (v) or (vi) of this Article III, MCI will forthwith
discontinue disposition of such Registrable Securities covered by such
Registration Statement or Prospectus until MCI's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3.2(j) hereof, or
until it is advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any additional
or supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus.
3.5 Rules 144 and 144A. The Company will file the reports required to
be filed by it under the Securities Act and the Exchange Act in a timely manner,
and will cooperate with MCI (including without limitation by making such
representations as MCI may reasonably request), all to the extent required from
time to time to enable MCI to sell Registrable Securities without registration
under the Securities Act within the limitations of the exemptions provided by
Rules 144 and 144A (including without limitation the requirements of Rule
144A(d)(4)). Upon the request of MCI, the Company will deliver to MCI a written
statement as to whether it has complied with such filing requirements.
3.6 Underwritten Registrations. If any Piggyback Registration is an
Underwritten Offering, the Company will have the right to select the investment
banker or investment bankers and managers to administer the offering.
4. INDEMNIFICATION
4.1 Indemnification by the Company. The Company will, without limitation as to
time, indemnify and hold harmless, to the fullest extent permitted by law, MCI,
the officers, directors and agents and employees of MCI, and each person who
controls MCI (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) from and against all losses, claims, damages,
liabilities, costs (including without limitation the costs of investigation and
attorneys' fees) and expenses (collectively, "Losses"), as incurred, but only
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus or form of
Prospectus or in any amendment or supplement thereto or in any Preliminary
prospectus, or
EXHIBIT 12, P. 10 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are based solely upon
information furnished in writing to the Company by MCI expressly for use
therein; provided, however, that the Company will not be liable to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus if either (A) (i) MCI failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of the sale of
a Registrable Security to the person asserting the claim from which such Losses
arise and (ii) the Prospectus would have completely corrected such untrue
statement or alleged untrue statement or such omission or alleged omission; or
(B) such untrue statement or alleged untrue statement or such omission or
alleged omission is completely corrected in an amendment or supplement to the
Prospectus previously furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, and MCI thereafter fails to
deliver such Prospectus as so amended or supplemented prior to or concurrently
with the sale of a Registrable Security to the person asserting the claim from
which such Losses arise.
The rights of MCI hereunder will not be exclusive of its rights under
any other agreement or instrument. Nothing in such other agreement or instrument
will be interpreted as limiting or otherwise adversely affecting MCI hereunder
and nothing in this Agreement will be interpreted as limiting or otherwise
adversely affecting MCI's rights under any such other agreement or instrument,
provided, however, that no indemnified Party will be entitled hereunder to
recover more than its indemnified Losses.
4.2 Indemnification by MCI. In connection with any Registration
Statement in which MCI is participating, MCI will furnish to the Company in
writing such information as the Company reasonably requests for use in
connection with any Registration Statement or Prospectus and will severally
indemnify, to the fullest extent permitted by law, the Company, its directors
and officers, agents and employees, each person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), from and against all Losses arising out of or based upon any untrue
statement of a material fact contained in any Registration Statement, Prospectus
or preliminary prospectus or arising out of or based upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, to the extent, but only to the extent, that such untrue
statement or omission is finally judicially determined to have been contained in
any information so furnished in writing by MCI to the Company expressly for use
in such Registration Statement or Prospectus and relied upon by the Company in
the preparation of such Registration Statement, Prospectus or preliminary
prospectus. In no event will the liability of MCI hereunder be greater in amount
than the dollar amount of the proceeds (net of payment of all expenses and
underwriter's discounts and commissions) received by MCI upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
4.3 Conduct of Indemnification Proceedings. If any person shall become
entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party
shall give prompt notice to the Party from which such indemnity is sought (the
"Indemnifying Party") of any claim or of the commencement of any action or
proceeding with respect to which such Indemnified Party seeks indemnification or
contribution pursuant hereto; provided, however, that the failure to so notify
the
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ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Indemnifying Party will not relieve the Indemnifying Party from any obligation
or liability except to the extent that the Indemnifying Party has been
prejudiced materially by such failure. All fees and expenses (including any fees
and expenses incurred in connection with investigating or preparing to defend
such action or proceeding) will be paid to the Indemnified Party, as incurred,
within five calendar days of written notice thereof to the Indemnifying Party
(regardless of whether it is ultimately determined that an Indemnified Party is
not entitled to indemnification hereunder). The Indemnifying Party will not
consent to entry of any judgment or enter into any settlement or otherwise seek
to terminate any action or proceeding in which any Indemnified Party is or could
be a party and as to which indemnification or contribution could be sought by
such Indemnified Party under this Article IV, unless such judgment, settlement
or other termination includes as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release, in form and
substance satisfactory to the Indemnified Party, from all liability in respect
of such claim or litigation for which such Indemnified Party would be entitled
to indemnification hereunder.
4.4 Contribution. If the indemnification provided for herein is
unavailable to an Indemnified Party under Section 4.1 or 4.2 of this Article in
respect of any Losses or is insufficient to hold such Indemnified Party
harmless, then each applicable Indemnifying Party, in lieu of indemnifying such
Indemnified Party, will, jointly and severally, contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party or
Indemnifying Parties, on the one hand, and such Indemnified Party, on the other
hand, in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party or Indemnifying Parties, on the one hand, and
such Indemnified Party, on the other hand, will be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or related to information supplied by,
such Indemnifying Party or Indemnified Party, and the Parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a Party as a result
of any Losses will be deemed to include any legal or other fees or expenses
incurred by such Party in connection with any action or proceeding.
The Parties agree that it would not be just and equitable if
contribution pursuant to this Section 4.4 were determined by pro rata allocation
or by any other method of allocation that does not take into account the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provision of this Section, MCI will not be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities sold by MCI and distributed to the public exceeds the
amount of any damages which MCI has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
1l(f) of the Securities Act) will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
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ANCILLARY SERVICES AND TECHNOLOGY LICENSE
The provisions of this Article IV will survive so long as Registrable
Securities remain outstanding, notwithstanding any transfer of the Registrable
Securities by MCI or any termination of this Agreement.
ARTICLE IV
MISCELLANEOUS PROVISIONS
1.1 Principles of Interpretation.
(a) As used in this Agreement, the term "person" means any
natural person, corporation, partnership, firm, joint venture, association,
joint stock company, trust, unincorporated association, Governmental Body or
other entity.
(b) The words "herein"," "hereof" and "hereunder," and words
of like import, shall refer to this Agreement as a whole and not to any
particular provision hereof.
(c) All pronouns and any provisions thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
All terms defined in this Agreement in their singular or plural forms have
correlative meanings when used herein in their plural or singular forms,
respectively. Unless otherwise expressly provided, the words "includes" and
"including" do not limit the preceding words or terms and shall be deemed to be
followed by the words "without limitation."
(d) The headings in and titles of this Agreement are intended
solely for convenience of reference and shall be given no effect in the
interpretation of this Agreement.
(e) The Parties knowledge and agree that: (i) each Party and
its counsel reviewed and negotiated the terms and provisions of this Agreement
and have contributed to its revision; (ii) the rule of construction to the
effect that any ambiguities are resolved against the drafting Party shall not be
employed in the interpretation of this Agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to all Parties hereto,
regardless of which Party was generally responsible for the preparation of this
Agreement.
1.2 Notices. Any notice or other communication required or permitted
hereunder shall be sent pursuant to the procedures set forth in the Agreement
for Wholesale Telephone Exchange Services, Z-Node Services, Ancillary Services
and Technology License dated March __, 2002 between the Parties.
1.3 Waivers and Amendments: Non-Contractual Remedies: Preservation of Remedies.
This Agreement may be amended, superseded, canceled, renewed or extended, and
the terms hereof may be waived, only by a written instrument signed by both of
the Parties hereto or, in the case of a waiver, by the Party waiving compliance.
No delay on the part of any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any Party of such right, power or privilege, nor any single or partial exercise
of any such right, power or privilege, preclude any further exercise thereof of
the exercise of any other such right
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ANCILLARY SERVICES AND TECHNOLOGY LICENSE
power or privilege. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any Party may otherwise have at
law or in equity. The rights and remedies of any Party based upon, arising out
of or otherwise in respect of any inaccuracy in or breach of any representation,
warranty, covenant or agreement contained in this Agreement or any documents
delivered pursuant to this Agreement shall in no way be limited by the fact that
the act, omission, occurrence or other state of facts upon which any claim of
any such inaccuracy or breach is based may also be the subject matter of any
other representation, warranty, covenant or agreement contained in this
Agreement or any documents delivered pursuant to this Agreement (or in any other
agreement between the Parties) as to which there is no inaccuracy or breach.
1.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without reference to its
conflicts of laws principles.
1.5 Counterparts This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this SUBSCRIPTION, PREEMPTIVE
RIGHTS, AND REGISTRATION RIGHTS Agreement as of the day and year first written
above.
Dated: ____________________________ , 2002
MCI WORLDCOM Communications, Inc., a Delaware corporation
By:__________________________________
Name:________________________________
Its:_________________________________
Z-TEL TECHNOLOGIES, INC., a Delaware corporation
By:__________________________________
Name:________________________________
Its:_________________________________
EXHIBIT 12, P. 14 OF 14
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Exhibit 13
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This exhibit consisting of 10 pages is omitted in its entirety pursuant
to a confidential treatment request.
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ANCILLARY SERVICES AND TECHNOLOGY LICENSE
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ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 14
DISASTER RECOVERY/DATA BACKUP PLAN
BACK UP MANAGEMENT PLAN
DAILY
- Use Jukebox Systems Output to determine tape status.
- Always leave one full tape in Jukebox
- Remove for archive second full tape (normally slot 1)
- Rotate tapes so oldest tape is in slot 1 and the rest are in sequence
- Record status changes in hard copy log
WEEKLY
- Hold tapes minimum 48 hours before moving off site
- Maintain five tapes in scratch status for each drive
- Move tapes off site to maintain above criteria
The current labeling scheme uses pool/host name and tape serial number
TAPE MANAGEMENT AND ROTATION PLAN
- The week runs Saturday - Friday
- Each library is subdivided into 5 weekly sections
- On Friday, all tapes of the previous week would be removed
- The new week's tapes would be inserted and initialized
- Service picks up that week's tapes on Friday afternoon
- Leaves the tapes for 2 weeks later
- Two week's of tape are always on site
- Current week and the following week
- Daily procedure: ensure at least one empty tape in each drive
- Courier transports the 63 tape set and that set will stay intact
TAPE LIBRARY WEEKLY SECTION SIZE
- Section size will be expanded as necessary (monitored weekly)
- Current number of tapes per week
EXHIBIT 14, P. 1 OF 1
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
EXHIBIT 14
APPENDIX
BACKUP AND RECOVERY STRATEGY PLAN
A. Operational Support System - Primary Database Server
OVERVIEW:
Z-Tel's Operational Support System (OSS) primary database server backup
strategy is designed to recover the database up to the point-in-time of a
failure. Examples of recoverable failures include software failure, media
failure, user errors, and permanent loss of hardware. In the case of a software
failure, is able to fully recover itself. will easily "roll-forward" uncommitted
transactions to bring a database up to the point in time just prior to failure.
Media failures are defined as physical storage failures, which potentially can
destroy the database's data files. User errors are errors where incorrect is
executed and large amounts of data are modified incorrectly. The final type of
failure is a permanent hardware failure or more commonly referred to as a
catastrophic system failure.
BACKUP STRATEGY:
The OSS database backup strategy is implemented using full and
transactional database backup schemes. The first step in the process is to
execute the full database backup on a daily basis. This backup method contains a
snapshot of the entire database at the time the backup completes and is our
baseline for a system restore in the event of a failure. The second type of
backup that occurs on this system is the transaction log backup. This type of
backup migrates into a file all the database changes that have occurred since
the most recent backup. It then clears the completed
EXHIBIT 14 (APPENDIX), P. 1 OF 5
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
transactions from the database's online transaction log files. The frequency of
the transaction log backup is once every two hours. Figure 1 is the backup
timeline.
[DAILY BACKUP TIMELINE CHART]
PHYSICAL IMPLEMENTATION:
The physical infrastructure for the database backup is designed for high
speed, large amounts of data, and backup system scalability. The database backup
runs over a dedicated gigabit Ethernet network to a backup server with parallel
RAID disk arrays. The system throughput average is 34MB per second. These backup
files on the backup server are then migrated from disk to a four-drive parallel
DLT tape array. During scheduled maintenance periods, the DLT tapes are removed,
labeled, cataloged, and shipped offsite by the tape librarian. Figure 2 is the
physical layout of the backup network.
EXHIBIT 14 (APPENDIX), P. 2 OF 5
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
[OSS PRODUCTION BACKUP SYSTEM FLOW CHART]
RESTORE TECHNIQUES:
Depending on the nature of a specific failure, there are multiple different
restore techniques. For a storage failure example, we follow a four-step restore
process. First of all, we backup the current transaction log. Second, we correct
the specific storage failure by regenerating the failed array with replacement
spare disks. Third, if necessary, we run the full database restore from the full
database backup and apply transaction logs until all transaction log backups
have been applied. The second type of failure, user error, is addressed with a
slightly different technique. The exact solution will depend upon the
EXHIBIT 14 (APPENDIX), P. 3 OF 5
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ANCILLARY SERVICES AND TECHNOLOGY LICENSE
severity of the data corruption. If a severe degree of data has been corrupted,
the same process as the storage failure will be followed. If a small percentage
of data has been corrupted, up to the point-in-time prior to data corruption we
restore to a second server the entire database. This restore process is
accomplished by following three steps. First, we restore the database from the
prior full database backup. Second, we restore transaction logs up to the
point-in-time just prior to the data corruption incident. Lastly, we export the
non-corrupted data and import it into the production database. The third type of
failure is catastrophic hardware failure. In this scenario we repair or replace
the specific failed component. This may require building out a completely new
server. Once the repaired server is brought online, the Server database will
automatically "roll-forward" up to the point-in-time of the failure.
EXHIBIT 14 (APPENDIX), P. 4 OF 5
AGREEMENT FOR WHOLESALE TELEPHONE EXCHANGE SERVICES, Z-NODE SERVICES,
ANCILLARY SERVICES AND TECHNOLOGY LICENSE
RESTORE TIMES:
The restore times for each restore scenario are influenced by many
variables. Variables that directly impact the time to restore include: number of
transaction logs to restore, the total size of the transaction logs, and the
specific hardware being used. This table displays the average amount of time for
the two basic types of database restores.
RESTORE TYPE TIME TO RESTORE
Average 160 GB 1 hr 35 min
Full Database
Average 1.5 GB 12 - 15 min
Transaction Log
FUTURE KEY STRATEGIES:
Moving forward, we are aggressively committed to improving backup and
restore performance and reliability. We have several key technologies in varying
research and development stages in order to bring backup and restore performance
to the 100MB/s level. Technologies such as jumbo gigabit Ethernet, iSCSI, jumbo
10 gigabit Ethernet, and the latest solid state disk technology are all expected
in the near future. Additionally, we are moving forward in replacing our single
backup system with multiple, higher-capacity, higher-performance parallel backup
systems. This includes larger caches, faster processors, and newer tape
technologies.
EXHIBIT 14 (APPENDIX), P. 5 OF 5
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ANCILLARY SERVICES AND TECHNOLOGY LICENSE
Exhibit 1
Appendix C-1
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This exhibit consisting of 5 pages has been omitted in its entirety pursuant to
a confidentiality treatment request.
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Exhibit 1
Appendix C-2
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This exhibit consisting of 4 pages has been omitted pursuant to a
confidentiality treatment request.
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