AGREEMENT FOR
BILLING AND COLLECTION SERVICES
BETWEEN
AXCES, INC.
CIC 5071 -- ACNA AXQ
AND
AMERITECH LONG DISTANCE INDUSTRY SERVICES
A DIVISION OF
AMERITECH SERVICES, INC.
AS AUTHORIZED REPRESENTATIVE FOR
AMERITECH ILLINOIS
AMERITECH INDIANA
AMERITECH MICHIGAN
WISCONSIN ▇▇▇▇, INC., d/b/a AMERITECH WISCONSIN
EFFECTIVE: JUNE 26, 1999
Revised: April 6, 1999
TABLE OF CONTENTS
PRINCIPAL AGREEMENT
SECTION TITLE PAGE
------- ----- ----
1. INTRODUCTION........................................................ 1
2. DEFINITIONS......................................................... 2
3. SCOPE OF SERVICES................................................... 2
4. CONTRACT DOCUMENTS.................................................. 3
5. MODIFICATIONS....................................................... 4
6. APPLICATION OF AGREEMENT............................................ 5
7. TERM................................................................ 5
8. PURCHASE OF ACCOUNTS RECEIVABLE..................................... 6
9. PAYMENT FOR BILLING AND COLLECTION SERVICES......................... 7
10. MONTHLY MINIMUM..................................................... 7
11. TREATMENT AND COLLECTION............................................ 7
12. APPLICATION OF TAXES TO END USERS................................... 7
13. TAXES IMPOSED ON SERVICES PERFORMED BY THE AOC...................... 9
14. TAX INDEMNIFICATION................................................. 9
15. LEGAL AND REGULATORY REQUIREMENTS................................... 11
16. LIMITED WARRANTIES.................................................. 11
17. LIMITATION OF LIABILITY............................................. 11
18. INDEMNIFICATION..................................................... 13
19. CONFIDENTIAL INFORMATION........................................... 14
20. FORCE MAJEURE....................................................... 17
21. TERMINATION RIGHTS.................................................. 18
22. UNAUTHORIZED MESSAGES............................................... 20
23. ADVERTISING AND PUBLICITY; MISREPRESENTATIONS....................... 22
24. LIMITATION PERIOD................................................... 23
25. SOFTWARE............................................................ 23
26. INTELLECTUAL PROPERTY.............................................. 24
27. CERTIFICATION....................................................... 24
28. AMENDMENTS; WAIVERS................................................. 24
29. ASSIGNMENT.......................................................... 24
30. NOTICES AND DEMANDS................................................. 25
31. SUSPENSION OF PERFORMANCE; OFFSET................................... 25
32. THIRD-PARTY BENEFICIARIES........................................... 26
33. GOVERNING LAW; FORUM................................................ 26
34. SEVERABILITY........................................................ 26
35. SURVIVABILITY OF OBLIGATIONS........................................ 27
36. ENTIRE AGREEMENT.................................................... 27
37. HEADINGS............................................................ 27
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LIST OF EXHIBITS
Appendix 1 Glossary
Appendix 2 Addresses for Notices
Exhibit A Price Schedule
Exhibit B Services and Responsible for the Provision of Billing and
Collection Services
Attachment 1 Billing Services Guidelines
Exhibit C Billing and Collection Procedures
Exhibit D-1 End-User Billing From Rated Message Input Specifications
Exhibit D-2 Purchase of Accounts Receivable From Rated Message Input
Specifications
Exhibit D-3 Billing Tape and Data Transmission Specifications
Exhibit D-4 Billing ▇▇▇▇ Format Specifications
Exhibit E Confidential Information
Exhibit F Lists of Interexchange Carriers and Types of Messages for
Which Services are Provided
Exhibit G Ameritech Billing and Collection Services Requirements For
Handling 700 NXXX ▇▇▇▇, ▇▇▇ NXX XXXX, NPA 976 XXXX (or
like services) Messages
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AGREEMENT FOR
BILLING AND COLLECTION SERVICES
PRINCIPAL AGREEMENT
1. INTRODUCTION
1.1 AGREEMENT AND EFFECTIVE DATE
This Agreement for Billing and Collection Services (hereinafter
"Agreement") is entered into effective June 26, 1999 ("Effective
Date") between the parties (hereinafter collectively referred to as
"Parties" and each individually as "Party") identified in Section
1.2.
1.2 PARTIES
The Parties are identified as follows:
A. Axces, Inc. (hereinafter referred to as "Customer"):
CIC 5071 - ACNA AXQ
B. The Ameritech Operating Companies (hereinafter collectively
referred to as "AOCs" and each individually as "AOC"):
Ameritech Illinois,
Ameritech Indiana,
Ameritech Michigan,
Wisconsin ▇▇▇▇, Inc. dba Ameritech Wisconsin
C. Ameritech Long Distance Industry Services, a division of
Ameritech Services, Inc. (hereinafter referred to as "ASI"),
acting as the AOCs' authorized representative.
1.3 BACKGROUND
A. The AOCs perform billing and collection activities for their
own account with respect to end user subscribers ("End Users")
who subscribe to local exchange telecommunications services from
the AOCs in their operating territories;
B. The AOCs have offered to provide billing and collection
services ("Services") to Customer for certain permitted types of
telecommunications related messages with respect to End Users
who are also served by Customer; and
C. Customer wishes to purchase the Services from AOC(s).
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2. DEFINITIONS
The definitions contained in the Glossary attached as Appendix 1 to this
Agreement shall apply to the entire Agreement. Any terms or words used in
this Agreement which are not specifically defined in Appendix 1 or
elsewhere in the Agreement are understood by the Parties to have their
ordinary meaning.
3. SCOPE OF SERVICES
3.1 Commencing on the Effective Date, the AOC shall provide the Services
to Customer for the Carrier Identification Code ("CIC") identified in
Section 1.2 pursuant to the terms and conditions of this Agreement.
3.2 A description of the Services included under this Agreement is set
forth in Exhibit B.
3.3 Messages sent to the AOCs for billing must relate to End Users who
subscribe to local exchange telecommunications services from the AOCs
in their operating territories. Customer shall not resubmit messages
for Rebilling except as permitted in Exhibit C, Section 2.1.1.C.(4.).
3.4 Messages which may be processed for billing under this Agreement
include only the Message types identified as permitted in Exhibit F.
AOC may at any time, in its sole discretion, modify Exhibit F to add
or delete Message types which it is willing to ▇▇▇▇ for Customer
under this Agreement, or may reject any message types for billing
regardless of whether they appear on Exhibit F. Customer shall not
submit any Message types for billing under this Agreement which are
not permitted under Exhibit F or which are of a type that AOC has
otherwise indicated it will not accept for billing.
3.5 Customer may act as a clearinghouse or aggregator of billing for
other interexchange carriers (hereinafter "Client" or "Clients")
which are identified in Exhibit F by name and subCIC. If Customer
acts as an agent or aggregator for any permitted Clients, the
following requirements apply:
A. Customer shall be responsible for ensuring that any Client
Messages forwarded to AOC for billing fully conform with the
terms and conditions of this Agreement. Client Messages shall
be considered as Customer's billing for all purposes under this
Agreement.
B. Customer shall remain solely responsible to Client for all
rights and obligations under this Agreement. AOC shall have no
obligation to deal directly with the Client, nor shall Client be
a Third Party beneficiary of this Agreement or have any claim
directly against the AOC hereunder. Customer shall serve as the
sole point of contact with its Clients.
C. Customer shall impose on its Client the duty to adhere to all
applicable terms and conditions of this Agreement regarding
billing that will be processed by AOC.
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D. Customer may not add any Clients to this Agreement or forward
billing on behalf of, received from or purchased from any Third
Party not identified in Exhibit F without the prior written
approval of AOC.
E. Any request to add a Client or subCIC to Exhibit F shall be
submitted not less than sixty (60) days prior to the expected
effective date of such addition.
F. Upon request, Customer shall furnish any information in its
possession concerning any activities by its Clients which
involve violations of Section 22 - UNAUTHORIZED MESSAGES or
Section 23 - ADVERTISING AND PUBLICITY; MISREPRESENTATIONS,
including, but not limited to, violations involving local
exchange carriers in other areas of the country.
G. AOC reserves the right to reject for any reason or no reason,
in its sole discretion, the addition of any new Clients
requested by Customer for addition to Exhibit F. AOC will not
allow the addition of new Clients with a history of End User
complaints or who have unpaid balances past due on any other
agreement with the AOCs or their Affiliates.
3.6 If no permitted Clients or subCICs are identified in Exhibit F.
Customer will forward only its own billing to AOC for processing
under this Agreement.
4. CONTRACT DOCUMENTS
4.1 This Agreement encompasses the following documents:
A. This PRINCIPAL AGREEMENT, effective as of the date set forth
in Section 1.1, which sets forth the terms and conditions for
the basic contractual relationship between the Parties;
B. APPENDIX 1, which sets forth the definitions applicable to the
entire Agreement;
C. APPENDIX 2, which sets forth the addressed for notices that
may be given under this Agreement;
D. EXHIBIT A, dated February, 1999 which sets forth the rates and
charges ("Price Schedule") for Services provided under this
Agreement;
E. EXHIBIT B, dated January 14, 1998, which describes the
Services and sets forth the responsibilities of the Parties
related to the Provision of Billing and Collection Services;
F. ATTACHMENT 1 TO EXHIBIT B, dated May 1998, which sets forth
the Billing Services Guidelines applicable to Messages submitted
for billing under this Agreement;
G. EXHIBIT C, dated February, 1999, which sets forth the Billing
and Collection Services Procedures applicable to the Services;
H. Specifications for Billing and Collection Services, all dated
March, 1997, consisting of the following:
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EXHIBIT D-1: End-User Billing From Rated Message Input
Specifications;
EXHIBIT D-2: Purchase of Accounts Receivable From Rates
Message Input Specifications;
EXHIBIT D-3: Tape and Data Transmission Specifications;
EXHIBIT D-4: ▇▇▇▇ Format Specifications;
I. EXHIBIT E, dated March, 1997, which sets forth a list of those
items which are to be treated as Confidential Information;
J. EXHIBIT F, dated February, 1999 which sets forth the List of
Interexchange Carriers and Types of Messages for which Services
are provided under this Agreement;
K. EXHIBIT G, dated December, 1997, which sets forth the
Ameritech Billing and Collection Services Requirements for
Handling 700 NXX ▇▇▇▇, ▇▇▇ NXX XXXX, NPA 976 XXXX (or like
services) Messages;
4.2 The term "Principal Agreement" as used herein shall refer to this
document consisting of thirty-seven (37) sections. Except where
expressly provided otherwise, the term "Agreement" as used herein
shall include the Principal Agreement and all present Appendices,
Exhibits and Attachments thereto and, upon adoption and incorporation
herein by AOC pursuant to Sections 5.1 or 5.2 or by mutual agreement
of the Parties, all future Amendments, Appendices, Exhibits, and
Attachments.
4.3 The words "shall" and "will" are used interchangeably throughout
the Agreement. The use of one or the other shall not mean a different
degree of right of obligation for either Party.
4.4 Any conflict among the documents making up this Agreement shall be
resolved as follows:
A. The Principal Agreement shall prevail over all other
Appendices, Exhibits, and Attachments;
B. Attachment 1 to Exhibit B (Billing Services Guidelines) shall
prevail over all other Appendices, Exhibits and Attachments; and
C. Any later Addenda or amendments to this Agreement or its
Appendices, Exhibits, and Attachments shall prevail over earlier
provisions.
5. MODIFICATIONS
5.1 Customer acknowledges that, from time to time, AOC may need to
modify Exhibits B through G, including their associated attachments,
or its billing and collection procedures for various reasons,
including, but not limited to, the necessity (i) to respond to End
User complaint levels or service needs, (ii) to avoid undue burdens
or negative impacts on the AOC resulting from End User complaints or
misrepresentations affecting its brand image or reputation, (iii) to
react to changing economic conditions affecting its collections, (iv)
to conform its billing and collection procedures and the exhibits so
that there is
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uniformity in their application to itself and other customers, and
(v) to address any other commercially reasonable needs for such
changes. AOC shall have the right, in its sole discretion, to modify
its billing and collection procedures and Exhibits B through G,
including their associated attachments, upon prior written notice to
Customer.
5.2 If a new law or regulation is adopted or an existing law or
regulation is modified (whether by administrative action or
administrative or judicial interpretation thereof), which
modification or adoption impacts the billing and collection services
provided hereunder, AOC(s) shall have the right, in its sole
discretion, to amend this Agreement, including without limitation the
prices contained in Exhibit A hereto, to reflect such modification or
adoption.
5.3 AOC will endeavor to give Customer at least thirty (30) days notice
of any material modifications to this Agreement or its procedures
made under Sections 5.1 or 5.2. If any modification of this Agreement
or AOC procedures will have a material adverse impact upon Customer,
it may terminate this Agreement as provided in Section 21.3C.
6. APPLICATION OF AGREEMENT
Except where expressly provided otherwise, all references in this
Agreement to "AOC" shall mean each AOC individually, as if this Agreement
constitutes a separate Agreement between Customer and each AOC identified
in Section 1.2B. If only one AOC is identified in Section 1.2B, then all
references to "AOC" shall include only the single identified AOC, and all
plural pronouns shall be deemed to include the singular. Any reference to
a "Party" shall mean Customer or any single AOC and ASI (where
applicable), and any reference to "Parties" shall mean, as the context
requires, Customer and a single AOC and ASI (where applicable), or
Customer and all AOCs and ASI (where applicable). Certain obligations
under this Agreement are or may be undertaken by ASI on behalf of AOC.
Reference herein to AOC may include ASI, whether specified or not. AOC and
ASI shall constitute a single "Party" or "Company" whenever those terms
are used herein applicable to AOC.
7. TERM
7.1 This Agreement shall be effective as to each AOC as of the
Effective Date set forth in Section 1.1 and shall continue for a
period of one (1) year, unless earlier terminated, canceled, or
withdrawn as described in Section 21 - TERMINATION RIGHTS.
7.2 Renewal after the initial term shall be by mutual agreement.
Customer shall notify ASI not less than ninety (90) days prior to the
end of the term of its intent to either discontinue services at the
end of the term or negotiate a renewal of the Agreement.
7.3 If the parties have not negotiated a renewal or new agreement by
the end of the term, then AOC may, at its option, either: (a) upon
written notice given prior to expiration of the term, terminate all
Services at the end of the term or thirty (30) days after the date of
such notice, whichever is later, (b) continue to accept the tender of
PAR from Customer and provide Services under the same terms and
conditions as if this Agreement were extended on a month-to-month
basis, subject to termination on one month's notice, or (c) provide a
written temporary extension of this Agreement pending the completion
of
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negotiations on such renewal, subject to such amended and
additional terms as AOC may deem appropriate. If AOC provides a
temporary extension as provided in subsection (c), Customer's
continued tender of PAR after receipt of a written temporary
extension shall constitute acceptance of any amended or additional
terms specified therein by AOC.
8. PURCHASE OF ACCOUNTS RECEIVABLE
8.1 The terms and conditions applicable to the purchase of accounts
receivable ("PAR") by AOC from Customer are set forth in more detail
in Exhibit C, Section 2.1. Notwithstanding Section 4.4A, in the event
of a conflict between Section 8 - PURCHASE OF ACCOUNTS RECEIVABLE and
Exhibit C, Section 2.1, the terms and conditions of Exhibit C,
Section 2.1 shall control.
8.2 In summary, the AOC will purchase from Customer its accounts
receivable that arise from Message records submitted by Customer for
Billing under this Agreement. The amount to be paid Customer for PAR
shall be based upon revenue to be billed to End Users for Message
records accepted by the AOC, plus such additions and adjustments as
are further set forth in Exhibit C, Section 2.1.
8.3 Notwithstanding anything to the contrary in this Agreement or in
any documentation utilized in connection herewith, with respect to
charges for Customer's services provided to End Users in the State of
Indiana, AOC shall at all times act hereunder as billing agent for
Customer in rendering Services and shall not be deemed to purchase
Customer's accounts receivable that arise from bills rendered by the
AOC to End Users served by Customer. Any references in this Agreement
to PAR with respect to billing for End Users in the State of Indiana
shall be deemed to refer to AOC's role as billing agent rather than
as a purchaser of accounts receivable.
8.4 [THE FOLLOWING OPTIONAL CLAUSE DOES NOT APPLY TO A RENEWAL OR
EXTENSION OF THIS AGREEMENT OR THE REPLACEMENT BY THIS AGREEMENT OF
ANY PREVIOUS BILLING AND COLLECTION SERVICES AGREEMENT BETWEEN THE
PARTIES WHERE THERE IS NO GAP IN THE SERVICES PROVIDED.]
In determining amounts owed to Customer for PAR, the AOC applies an
Uncollectible Factor, which is a percentage amount deducted during
the calculation of the Amount Due Customer to compensate for
anticipated revenue losses resulting from the failure of the End User
to pay amounts appearing on their bills. The Uncollectible Factor is
revised quarterly to reflect to actual average level of
Uncollectibles allocable to Customer. Because this Agreement is not a
renewal or continuation of an existing billing and collection
relationship with the AOC, the AOC has established in accordance with
Exhibit C, Section 2.1.1.D.1 an initial Uncollectible Factor of Ten
percent (10%). AOC may increase this initial Uncollectible Factor at
anytime during the first nine (9) months of this Agreement if actual
experience indicates a higher percentage is necessary to more
accurately reflect Uncollectibles experienced with Customer.
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9. PAYMENT FOR BILLING AND COLLECTION SERVICES
9.1 For Services provided each month during the term of this Agreement,
Customer agrees to pay the AOC, pursuant to Exhibit C, Section 2.2,
the charges set forth in Exhibit A, Price Schedule.
9.2 Monthly charges for Services shall be on the basis of usage
multiplied by the appropriate price set forth in Exhibit A, subject
to satisfaction of the Monthly Minimum amount specified in
Section 10.
10. MONTHLY MINIMUM
Customer agrees to submit to each AOC a sufficient volume of messages to
produce charges, which, along with charges for marketing messages, and
billing-related development, will total not less than three thousand
dollars ($3,000) per month per state for which the Services are provided
("Monthly Minimum"). There is no annual volume commitment.
11. TREATMENT AND COLLECTION
11.1 In collecting amounts due for services of Customer and its Clients,
AOC shall use the same treatment, collection, and (where authorized
by the appropriate regulatory authority) denial of services
procedures as AOC uses for its own services. Customer authorizes
AOC to deny service and disconnect End Users for non-payment in
accordance with such procedures.
11.2 This Agreement does not obligate AOC to terminate End User services
for non-payment. Upon completion of AOC collection procedures for
non-payment of any charges appearing on the End User ▇▇▇▇, AOC may
adjust, in its sole discretion, such charges with recourse to
Customer. In addition, the Parties acknowledge that changes in
applicable laws or regulations may prevent AOC from terminating or
threatening to terminate End User service for non-payment of any
Customer charges, and that such actions may require changes in AOC
procedures.
11.3 The Customer certifies, when forwarding billing charges to AOC,
that such charges are true and correct, and accurately reflect
proper charges legally owed by the End User. This Customer
certification of validity shall apply to all billing charges
forwarded to AOC under this Agreement from whatever source. Upon
request, Customer will furnish AOC any information that is
reasonably required to verify Customer's charges, including, where
appropriate, End User's authorization for the billing of such
charges.
12. APPLICATION OF TAXES TO END USERS
12.1 BILLING OF TAXES
A. In performing Services, the AOC will apply and ▇▇▇▇ to End
Users the applicable federal, state and local sales, use,
excise, gross receipts or other taxes or additional charges
imposed on End Users or imposed on Customer and collected from
End
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Users with respect to Customer's services billed hereunder by
the AOC, excluding state and local taxes for jurisdictions
outside of the areas in which the AOCs provide local exchange
services. All such taxes and charges are referred to in the
singular as "Tax" and in the plural as "Taxes." Customer shall
be responsible for applying and providing all tax information
for state and local tax jurisdictions outside of the areas in
which AOCs provide local exchange services.
B. In applying and billing Taxes on behalf of Customer, AOC will
use the same Tax procedures as it applies to its own similar
services. AOC makes no warranties or representations as to
whether its Tax procedures accurately reflect the requirements
of the applicable Tax laws. If Customer elects to have AOC
apply its Tax procedures, Customer shall have the sole
responsibility for verifying the correct application of Tax
laws to Customer's services. Customer may, upon written
request, review the AOC's Tax procedures applicable to the
billing of Customer's services. Customer shall be responsible
for advising AOC in writing of any changes in the Tax laws
affecting the taxability of Customer's services.
C. Customer may request in writing that AOC apply modified Tax
procedures to the billing of Customer's services to:
(1) Reflect changes in the Tax laws applicable to Customer's
services to be billed under this Agreement;
(2) Correct what Customer believes are errors in the AOC Tax
procedures; or
(3) Make any other changes to AOC Tax procedures applicable
to Customer's services which Customer desires to
implement.
Provided reasonable advance notice is given and no undue
burden is imposed upon AOC in implementing such changes, AOC
agrees to use reasonable efforts to implement such modified
Tax procedures on a timely basis based upon the effective
date of service, the statutory effective date of a Tax law
change or as otherwise instructed by Customer. AOC shall
charge Customer for such implementation services at the Time
and Cost ("T&C") rates specified in Exhibit A hereto. Whenever
the AOC estimates that the time required for it to implement a
change in the Tax law would preclude its implementation by the
statutory effective date, the Parties will together apply to
the taxing authority for an appropriate extension of the
effective date of a change.
D. Both Parties acknowledge that AOC is merely acting as
Customer's agent with respect to the calculation, billing and
collection of Taxes under this Agreement. The AOC shall not be
entitled to retain or receive from Customer any statutory fee
or share of Taxes to which the person collecting such Taxes is
entitled under applicable law.
E. All communications with taxing authorities regarding Taxes
applicable to Customer shall be the responsibility of Customer.
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12.2 TAX EXEMPTIONS
A. The AOC, in its performance of Services, will apply the
exemption status it has determined for the End User and
maintain exemption certificate information derived from its
exemption certificates. To the extent permitted by law, and
except as a change may be implemented pursuant to Customer's
request as provided for in Section 12.2(B), the AOC's
exemption certificate information will be used as a basis for
exempting End Users from Taxes on Customer's services billed
hereunder by AOC.
B. If a taxing authority determines that Customer cannot rely
upon the AOC's exemption certificate information, Customer may
request a listing of exempt End Users (including pertinent End
User account, End User contact and Tax status information to
the extent in AOC's possession) and may request estimates of
AOC charges for AOC to secure exemption certificates with
respect to services billed hereunder by the AOC.
12.3 FILING OF TAX RETURNS
Customer shall be solely responsible for filing all returns for
Taxes imposed on or with respect to Customer's services billed
under this Agreement and paying or remitting all such Taxes and
other items and any applicable interest or penalties. Upon
reasonable request, AOC shall furnish to Customer on a timely basis
all information in AOC's possession that is necessary for Customer
to file its Tax returns. Customer shall promptly notify AOC if such
information is not received. Requests for such information are
subject to T&C Charges in accordance with Exhibits A and C if AOC
must make multiple submissions or use customized formats for
Customer.
13. TAXES IMPOSED ON SERVICES PERFORMED BY THE AOC
Customer shall be responsible for payment of all sales, use or other
taxes of a similar nature imposed on AOC's performance of services under
this Agreement, excluding any income tax payable by the AOC on its
revenues from such services. AOC agrees to use reasonable efforts to
invoice Customer for such taxes at the time AOCs invoice Customer for
the underlying services performed; provided, however, that this
obligation shall not be deemed to prohibit AOC from invoicing for such
taxes at a later date to correct errors or omissions from the earlier
invoice. If any federal, state or local jurisdiction notifies AOC that
any additional sales, use or other taxes (including interest, penalties
and surcharges thereon) are due as a result of AOC's performance under
this Agreement, Customer shall promptly reimburse AOC for such tax,
interest, penalty and surcharge upon notice thereof; provided, however,
that Customer shall not be required to reimburse AOC for any interest,
penalties or surcharges which are due solely as a result of a negligent
act or omission of AOC.
14. TAX INDEMNIFICATION
14.1 Customer agrees to defend, indemnify and hold the AOC harmless from
and against any liability or loss, as to services billed hereunder
by the AOC to Customer's End Users,
9
resulting from any Taxes, penalty, interest, additions to Tax.
Surcharges or other charges or expenses payable or incurred by the
AOC as a result of:
A. The provision by the AOC of services covered by this
Agreement, as provided in Section 13 -- TAXES IMPOSED ON
SERVICES PERFORMED BY THE AOC;
B. The delay or failure of Customer (to the extent not
attributable to any negligent act or omission of the AOC) to
pay any Tax or such other item or file any return or other
information as required by law, tariff or this Agreement;
C. The AOC complying with any of its obligations under this
Agreement, or with any determination or direction by or advice
of Customer, or using information provided by Customer in
performing any Tax-related service hereunder; or
D. A determination by the IRS, or any other taxing authority,
whether in response to a ruling request or in the course of an
audit of either Party, that the AOC is responsible for
collecting and remitting federal, state or local taxes and
filing the applicable tax returns.
14.2 Consistent with the indemnity provided in Section 14.1, Customer
shall, at its option and expense (including, if required by a
taxing authority, payment of any such Tax, penalty, interest,
addition to Tax, Surcharge, or other charges, prior to final
resolution of the issue), have the right to seek administrative
relief, a ruling, judicial review (original or appellate level) or
other appropriate review (in a manner deemed appropriate by
Customer), as to the applicability of any Tax, penalty, interest,
addition to Tax, Surcharge, or other charges 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.
14.3 AOC shall promptly notify Customer of any proposed assessment of
any additional Taxes, penalty, addition to Tax, Surcharge or
interest due by AOC in sufficient time to enable Customer the
opportunity to seek administrative relief, a ruling, judicial
review (original or appellate) or other appropriate review as to
the applicability of such other Taxes or additional charges prior
to any assessment of additional Taxes. Customer shall assume, at
its expense, the sole defense of such Claim through counsel
selected by Customer. The AOC shall, when requested by Customer and
at Customer's expense, cooperate or participate with Customer in
any such proceeding, protest or legal challenge. AOC may at its
option and expense be represented by separate counsel. Customer
shall maintain control of such defense, except that if the
settlement of a Claim would have an adverse effect on the AOC's
relevant business, the Customer may settle the Claim as to the AOC
only with its consent, which consent shall not be withheld,
conditioned or delayed unreasonably. Customer shall pay the full
amount of any judgment, award or settlement with respect to the
Claim and all other expenses related to the resolution of the
Claim. If Customer unjustifiably refuses to defend a Claim or fails
to promptly assume the defense after its tender, AOC may retain
counsel of its choosing, and Customer shall reimburse AOC for all
costs of the defense as well as the amounts specified in the
preceding sentence.
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15. LEGAL AND REGULATORY REQUIREMENTS
The Parties shall comply with all applicable legal and regulatory
requirements, including without limitation the provisions of the
Telecommunications Act of 1996. No provisions in this Agreement shall
cause to be construed to cause either Party to violate any legal or
state/federal regulatory requirement.
16. LIMITED WARRANTIES
16.1 AOC warrants that it will provide the Services to Customer at a
performance level substantially similar to and consistent with that
level which AOC uses for or applies to its own billing and
collection operations. AOC reserves the right to determine in its
sole discretion the level of performance that it will apply to
billing and collection activities. Customer acknowledges that the
level of performance may vary over time.
16.2 AOC warrants that the operating systems it uses will be capable of
processing, providing and receiving date data before, during and
after the Year 2000 in a manner that will not adversely affect the
performance of the Services; provided, however, that Customer shall
be responsible for ensuring that all software it uses and
information transmitted to the AOC will exchange accurate date data
in such formats as may be required by the AOC operating systems.
16.3 Customer's exclusive remedy and AOC's sole liability for any
failure by AOC to meet its warranty obligations under Sections 16.1
and 16.2 shall be for AOC, at its option, to either reperform the
Services or refund any charges paid to AOC for the deficient
Services. To receive these exclusive remedies, Customer must give
AOC written notice of any such deficiencies within ninety (90) days
after completion of the affected Services. Customer's notice shall
specify in detail the nature of the deficiencies, the accounts
affected, and the dates when such deficiencies occurred.
16.4 THE REMEDIES SET FORTH IN SECTION 16.3 ARE CUSTOMER'S EXCLUSIVE
REMEDIES FOR THE BREACH OF ANY WARRANTIES GIVEN UNDER THIS
AGREEMENT. THE WARRANTIES SET FORTH IN SECTIONS 16.1 AND 16.2 ARE
IN LIEU OF ALL OTHER WARRANTIES AND AOCs MAKE NO OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES WITH
RESPECT TO TAX PROCEDURES APPLIED TO BILLING AND THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
CUSTOMER SHALL NOT HAVE THE RIGHT TO MAKE OR PASS ON, AND SHALL
TAKE ALL MEASURES NECESSARY TO ENSURE THAT NEITHER IT NOR ANY OF
ITS AGENTS OR EMPLOYEES MAKE OR PASS ON, ANY SUCH WARRANTIES OR
REPRESENTATIONS ON BEHALF OF THE AOCs TO ANY CLIENT, END-USER, OR
OTHER THIRD PARTY.
17. LIMITATION OF LIABILITY
17.1 AOCs AGGREGATE LIABILITY TO CUSTOMER FOR ALL DIRECT DAMAGES,
INCLUDING WITHOUT LIMITATION CONTRACT DAMAGES AND DAMAGES
11
FOR INJURIES TO PERSONS OR PROPERTY, WHETHER ARISING FROM A BREACH
OF THIS AGREEMENT, BREACH OF WARRANTY, NEGLIGENCE, STRICT
LIABILITY, OR ANY OTHER TORT WITH RESPECT TO THE SERVICES, IS
LIMITED TO AN AMOUNT NOT TO EXCEED THE CHARGES FOR THE PARTICULAR
SERVICES GIVING RISE TO THE LIABILITY DURING THE ONE YEAR CONTRACT
TERM OR RENEWAL TERM IN WHICH THE LIABILITY AROSE. CUSTOMER
RELEASES THE AOCs FROM ANY LIABILITY IN EXCESS OF THIS AMOUNT. FOR
THE PURPOSES OF THIS AGREEMENT, CUSTOMER'S "DIRECT DAMAGES" WITH
RESPECT TO ANY MESSAGES SUBMITTED FOR BILLING INCLUDE ONLY ITS OUT
OF POCKET EXPENSES, AND DO NOT INCLUDE ANY LOST PROFITS.
17.2 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY, FOR
ANY INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES, INCLUDING
WITHOUT LIMITATION LOST REVENUES, PROFITS OR SAVINGS, EVEN IF IT
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EACH PARTY
WAIVES ANY CLAIM AGAINST THE OTHER FOR PUNITIVE OR EXEMPLARY
DAMAGES EXCEPT TO THE EXTENT THE SAME SHALL FORM PART OF AN
INDEMNIFIED CLAIM.
17.3 WITH RESPECT TO INDEMNIFIED THIRD PARTY CLAIMS, NEITHER PARTY SHALL
HAVE ANY LIABILITY TO THE OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL,
OR SPECIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST REVENUES,
PROFITS OR SAVINGS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, IF THE PARTY SEEKING INDEMNIFICATION
COULD HAVE AVOIDED INCURRING SUCH DAMAGES BY INCLUDING LIMITATION
LANGUAGE IN THAT PARTY'S CONTRACT WITH SUCH THIRD PARTY.
17.4 WITHOUT IN ANY WAY LIMITING THE APPLICATION OF SECTIONS 17.1, 17.2,
AND 17.3, THE RIGHT TO RECOVER DAMAGES WITHIN THE LIMITATIONS
SPECIFIED IN THIS SECTION 17 -- LIMITATION OF LIABILITY IS
CUSTOMER'S EXCLUSIVE ALTERNATIVE REMEDY IN THE EVENT THAT ANY OTHER
CONTRACTUAL REMEDY FAILS OF ITS ESSENTIAL PURPOSE.
17.5 The limitations on liability set forth in Sections 17.1 and 17.2
shall not apply to:
A. AOC's indemnity obligations regarding personal injury, bodily
injury, death, or loss of or damage to tangible property under
Section 18.1A; or
B. AOC's obligation to pay Customer for the PAR, subject to
Recoursed Adjustments, payment procedures and interest as set
forth in Section 2.1 of Exhibit C or to reimburse Customer for
amounts incorrectly withheld from PAR.
17.6 A breach by any AOC of any obligation under this Agreement shall
not be considered a breach by any other AOC or constitute grounds
for termination of this Agreement with respect to any other AOC,
nor shall any AOC have any liability under this Agreement for the
acts or omissions of any other AOC. Customer may not offset any
amounts due to an AOC under this Agreement against any amount due
to the same AOC under any other
12
agreement or against any amounts due to any other AOCs. AOC shall
have no liability under this Agreement and Customer shall not bring
any claims hereunder for (i) obligations, products or services
covered under tariff or another agreement, or (ii) acts or
omissions which do not directly relate to the performance of
Services specifically provided for under this Agreement.
18. INDEMNIFICATION
18.1 Each Party ("Indemnifying Party") shall defend, indemnify, and hold
harmless the other Party ("Indemnified Party") from and against any
Claims:
A. By third parties, to the extent they relate to or arise from
the negligence or misconduct of Indemnifying Party
B. Related to or arising from a violation by Indemnifying Party
of any law, regulation, rule or order applicable to its
obligations under this Agreement.
18.2 Notwithstanding Section 18.1, Customer shall defend, indemnify, and
hold harmless AOC from and against any Claims, that relate to or
arise from:
A. The use of the Services by Customer or its Clients;
B. Unauthorized Messages submitted for billing under this
Agreement by Customer or its Clients;
C. Unauthorized advertising or publicity by Customer in violation
of Section 23.1 or misrepresentations by Customer in violation
of Section 23.2;
D. Any action taken by AOC on behalf of Customer or any Client in
the collection of amounts billed to End Users for services
provided by Customer or its Clients, including, but not
limited to, disconnection of End User services, or defamation,
libel or injury to credit;
E. The provision or receipt of services provided by Customer or
its Clients which are billed to End Users under this
Agreement; or
F. Assertions by Clients or other third parties of third party
beneficiary status or other rights or obligations under this
Agreement.
The Parties acknowledge that the obligation to defend and indemnify
against Claims under this Section 18.2 is intended to apply to the
fullest extent permitted by law, including where AOC is negligent
in whole or in part.
18.3 Amounts recoverable for a Claim under this Section 18 --
INDEMNIFICATION include costs, interest, and reasonable attorneys'
fees, including the cost of in-house counsel at market rates for
attorneys of similar experience in Chicago, Illinois. Where they
are the Indemnified Party, "AOC," "ASI" and "Customer" include
their officers, directors, partners, agents, Affiliates, employees,
and subcontractors, but do not include End Users billed for
services provided by or through Customer or Clients of Customer.
Where "AOC," "ASI" or "Customer" are the Indemnifying Party, such
Party's duty to
13
indemnify extends to the acts or omissions of its officers,
directors, partners, agents, Affiliates, employees, and
subcontractors.
18.4 Customer shall include similar indemnity provisions in its
agreements with Clients requiring them to indemnify the AOCs and
ASI for the Claims identified in Sections 18.1 and 18.2. The AOCs
and ASI shall be made a third party beneficiary of such indemnity
obligations, and shall have the right to enforce their
indemnification rights against such Clients.
18.5 Indemnified Party shall promptly notify Indemnifying Part of any
Claim. Indemnifying Party shall assume, at its expense, the sole
defense of such Claim through counsel selected by Indemnifying
Party. The Indemnified Party shall, when requested by the
Indemnifying Party and at Indemnifying Party's expense, cooperate
or participate with the Indemnifying Party in the defense of the
Claim. Indemnified Party may, at its option and expense, retain its
own separate counsel. Indemnifying Party shall maintain control of
such defense, except that if the settlement of a Claim would have
an adverse effect on the Indemnified Party's relevant business, the
Indemnifying Party may settle the Claim as to the Indemnified Party
only with its consent, which consent shall not be withheld,
conditioned or delayed unreasonably. Indemnifying Party shall pay
the full amount of any judgment, award or settlement with respect
to the Claim and all other expenses related to the resolution of
the Claim, except that for Claims arising under Section 18.1A, a
Party shall only be liable, as between the Parties to the extent
of its negligence.
18.6 If Indemnifying Party unjustifiably refuses to defend a Claim or
fails to promptly assume the defense after its tender, Indemnified
Party may retain counsel of its choosing (including in-house
counsel) and shall be entitled to recover from Indemnifying Party
reasonable attorneys' fees and costs (including the cost of
in-house counsel at market rates for attorneys of similar
experience in Chicago, Illinois) related to the defense of the
Claim and the enforcement of its rights under this Section 18 --
INDEMNIFICATION, as well as the amounts specified in Section 18.4
19. CONFIDENTIAL INFORMATION
19.1 INDEMNIFICATION OF INFORMATION
A. In connection with the negotiation of this Agreement and the
provision of Services hereunder, AOC and Customer will have in
their possession and control information in the form of data,
records, reports, computer programs End User customer lists,
and other documentation which is confidential or proprietary
to AOC or to Customer (hereinafter "Confidential
Information"). The Confidential Information of each Party
intended to be covered by and protected under this Section 19
-- CONFIDENTIAL INFORMATION is specifically designated in
Exhibit E.
B. "Confidential Information" also includes any information or
data that (a) if in tangible form or other media that can be
converted to readable form is clearly marked as confidential,
proprietary or private when disclosed or (b) if oral or
visual, is identified as confidential, proprietary or private
when disclosed and is
14
summarized in a writing so marked and delivered within ten
days following such disclosure.
19.2 PARTIES DISCLOSING OR RECEIVING INFORMATION
As used in this Section 19 -- CONFIDENTIAL INFORMATION, "Disclosing
Party" means the Party disclosing or having an interest in the
Confidential Information or which Party is otherwise identified as
having a right to protect such information against disclosure in
Exhibit E. "Receiving Party" means the party receiving or
possessing Confidential Information or which Party is otherwise
obligated to protect such information against disclosure in Exhibit
E. The terms "Disclosing Party" and "Receiving Party" include each
Party's Affiliates that disclose or receive Confidential
Information. The rights and obligations of the Parties hereto shall
therefore also inure to such Affiliates and may be directly
enforced by or against such Affiliates.
19.3 HANDLING OF CONFIDENTIAL INFORMATION
Receiving Party shall:
A. use the Confidential Information only for the purposes of the
Agreement;
B. treat the Confidential Information with the same degree of
care as it would treat its own Confidential Information;
C. restrict disclosure of the Confidential Information to
employees, agents, and contractors of the Recipient and its
affiliates with a "need to know" and not disclose it to any
other person or entity without the prior written consent of
the Disclosing Party;
D. advise those employees, agents, and contractors who have
access to the Confidential Information of their obligations
with respect thereto; and
E. copy the Confidential Information only as necessary for those
employees, agents, and contractors who are entitled to receive
it, and ensure that all confidentiality notices are reproduced
in full on such copies.
19.4 EMPLOYEES AND CONTRACTORS
A. A "need to know" means that the employees, agents or
contractors require the Confidential Information to perform
their responsibilities in connection with this Agreement.
B. The Receiving Party shall put in place and strictly enforce
procedures to ensure that its employees, contractors and
agents are aware of and fulfill the obligations under this
Section 19 -- CONFIDENTIAL INFORMATION. Confidential
Information shall only be shared with contractors or agents of
the Receiving Party who have entered into nondisclosure
agreements to protect such information upon terms no less
restrictive than those contained in this Section.
C. For the purposes of this Agreement, "employees" includes third
parties retained by the parties for temporary administrative,
clerical or programming support. A
15
"need to know" means that the employee requires the
Confidential Information to perform his or her
responsibilities in connection with this Agreement.
19.5 COMMINGLED INFORMATION
Each Party acknowledges that its Confidential Information may be
commingled with Confidential Information of the other and that each
must have access to and use of its own Confidential Information in
order to conduct its business. Accordingly, each Party shall to the
extent practicable use good faith efforts to ensure that its
Confidential Information shall be masked or rendered mechanically
inaccessible to the other Party. In the event that masking is not
accomplished despite such efforts, access shall be provided
hereunder to the commingled unmasked Confidential Information and
the Receiving Party (a) shall use its best efforts to destroy or
otherwise render unusable such information, (b) will be bound by
this Section 19 -- CONFIDENTIAL INFORMATION as to such information
and (c) will not use such information for any purpose, except as
required to fulfill its obligations under this Agreement.
19.6 INFORMATION NOT SUBJECT TO RESTRICTIONS
The obligations of this section shall not apply to Confidential
Information that the Receiving Party can demonstrate:
A. is or becomes available to the public through no breach of
this Agreement;
B. was previously known by the Receiving Party without any
obligation to hold it in confidence;
C. is received from a Third Party free to disclose such
information without restriction;
D. is furnished to a Third Party without similar restriction on
the Third Party's rights;
E. is independently developed by the Receiving Party without the
use of Confidential Information of the Disclosing Party;
F. is approved for release by written authorization of the
Disclosing Party, but only to the extent of such authorization;
G. is required by law or regulation to be disclosed, but only to
the extent and for the purposes of such required disclosure; or
H. is disclosed in response to a valid order of a court or other
governmental body of the United States or any political
subdivisions thereof, but only to the extent of and for the
purposes of such order, and only if the Recipient first
notifies the Disclosing Party of the order and permits the
Disclosing Party to seek an appropriate protective order.
19.7 PERMITTED USE
Anything to the contrary notwithstanding, nothing contained herein
shall prevent:
16
A. either Party from disclosing to any of its End Users, at their
request, any billing information in such Party's possession
regarding such End User; or
B. AOC from using information of the Customer, proprietary or
otherwise, to provide End User inquiry services and to estimate
facilities usage for jurisdictional separations, and for
engineering and network planning purposes.
19.8 RETURN OR DESTRUCTION
Confidential Information, including permitted copies, shall be deemed
the property of the Disclosing Party. Except where required to be
retained to comply with applicable law or regulatory requirements,
Receiving Party shall, within twenty (20) days of a written request
by the Disclosing Party, return all Confidential Information (or any
designated portion thereof), including all copies thereof, to the
Disclosing Party or, if so directed by the Disclosing Party, destroy
such Confidential Information. The Receiving Party shall also, within
ten (10) days of a written request by the Disclosing Party, certify
in writing that it has satisfied its obligations under this Section.
19.9 INJUNCTIVE RELIEF
The parties agree that an impending or existing violation of these
confidentiality provisions would cause the Disclosing Party
irreparable injury for which it would have no adequate remedy at
law, and agree that the Disclosing Party shall be entitled to obtain
immediate injunctive relief prohibiting such violation, in addition
to any other rights and remedies available to it.
19.10 APPLICABILITY OF STATUTES, DECISIONS AND RULES
Notwithstanding any other provision in this Agreement, a Party's
ability to disclose information or use disclosed information is
subject to all applicable statutes, decisions, and regulatory rules
concerning the disclosure and use of such information which, by
their express terms, mandate or permit a different handling of such
information, including, but not limited to Section 222 of the 1996
Telecommunications Act and any regulations promulgated pursuant
thereto. However, Customer expressly waives any Claims against AOC
for use of Confidential Information so long as such use is authorized
by the End User, to the extent authorization is required by the
Telecommunications Act and any regulations promulgated thereunder.
Such waiver by the Customer is made notwithstanding any state or
federal statutory provision or regulation.
20. FORCE MAJEURE
Neither Party shall be liable or deemed to be in default under this
Agreement for any delay or failure to perform resulting from (i)
accidents, fire, labor disputes, epidemics, war, terrorist acts, riots,
insurrections, power blackouts, acts of nature or other causes beyond its
reasonable control and without its fault or negligence, (ii) acts or
omissions of the other Party or of a third party (other than the
non-performing Party's own agents or contractors), or (iii) compliance
with any law, regulation, ruling, order or requirement of any federal,
state or municipal government or department or agency or court of
competent jurisdiction (a "Force Majeure Condition"). Any delay resulting
therefrom shall extend performance accordingly or excuse performance, in
whole
17
or in part, as may be reasonable. In the event of such delay, the AOC
shall perform Services for Customer in the same manner as it performs
similar services for itself.
21. TERMINATION RIGHTS
21.1 Either Party shall have the right to terminate this Agreement at
any time for its convenience, with or without cause, upon sixty (60)
days prior written notice.
21.2 AOC shall have the right to terminate this Agreement:
A. Upon ten (10) days prior written notice in the event of a
default by Customer in any payment obligation, if such default
is not cured within such ten (10) day period;
B. Immediately, upon repeated failure by Customer or any of its
Clients to comply with the requirements of Section 22 -
UNAUTHORIZED MESSAGES or Section 23 - ADVERTISING AND PUBLICITY;
MISREPRESENTATIONS;
C. Upon thirty (30) days prior written notice to Customer in the
event of any other default under or breach of any material term
or condition of this Agreement by Customer or any of its
Clients, if such default or breach is not cured by Customer
within such thirty (30)-day period;
D. Upon thirty (30) days prior written notice to Customer in the
event of any default under or breach of any material term or
condition of any other Agreement between the Parties, if such
default or breach is not cured by Customer within such thirty
(30)-day period;
E. Upon thirty (30) days prior written notice to Customer in the
event of a misrepresentation under Section 23 - ADVERTISING AND
PUBLICITY; MISREPRESENTATIONS, if Customer fails to refute the
results of AOCs investigation into such misrepresentation with
proofs satisfactory to AOC within such thirty (30)-day period;
F. Immediately upon written notice to Customer in the event any
representation, report, certificate, authorization, financial
statement or other statement furnished under this Agreement
proves to be false or misleading in any material respect as of
the date on which the same was made; or
G. Immediately upon written notice to Customer if Customer
becomes or is declared insolvent or bankrupt, is the subject of
any proceedings related to its liquidation, insolvency or for
the appointment of a receiver or similar officer, makes an
assignment for the benefit of all or substantially all of its
creditors, admits its inability to pay its debts as they come
due, or enters into an agreement for the composition, extension,
or readjustment of all or substantially all of its obligations,
but only if and to the extent such termination is not prohibited
by law.
21.3 Customer shall have the right to terminate this Agreement:
18
A. In the event of a default under or breach of any material term
or condition of this Agreement by AOC, upon thirty (30) days
prior written notice to AOC if the default or breach is not
cured by AOC within such thirty (30)-day period;
B. If a Force Majeure Condition occurs and results in a delay or
failure in performance of a material obligation of an AOC under
this Agreement for more than sixty (60) days, or
C. In the event of a modification of this Agreement or AOC
procedures under Section 5 - MODIFICATIONS which has a material
adverse impact upon Customer's current operations, provided that
notice of termination is given and made effective at anytime
within thirty (30) days after Customer's receipt of notice of
such modification.
21.4 A default or breach by one AOC of this Agreement shall not, by
itself, constitute a default or breach with respect to any other AOC.
If the default or breach affects only one AOC, then only the
relationship with the affected AOC may be terminated.
21.5 Wherever AOC has the right to terminate under this Agreement, it
may, in lieu of termination of this entire Agreement, elect to: (i)
terminate only a portion of this Agreement; (ii) terminate only with
respect to a particular AOC, (iii) suspend Services in whole or in
part, (iv) refuse to provide new or additional Services under this
Agreement, (v) refuse to accept certain types of Messages, (vi)
refuse to accept messages from a particular CIC or subCIC, (vii)
refuse to allow the addition of any new CIC or subCIC to this
Agreement, or (viii) take any other similar action less than
termination of the entire Agreement. Such election shall be subject
to notice and opportunity to cure, if applicable, within the same
periods as specified in Section 21.2. Any such election shall be
without prejudice to AOC's right to initiate termination of the
entire Agreement for the same breach or default, provided it gives
first gives Customer notice of its intent to terminate the entire
Agreement and affords Customer any applicable cure period before such
termination becomes effective.
21.6 Upon termination of this Agreement, Customer shall pay to the
affected AOCs the balance of the total Monthly Minimums which remain
owing through the balance of the Term at the time of termination if
(i) Customer terminates for convenience under Section 21.1 or (ii)
AOC terminates because of a breach or default by Customer under
Section 21.2.
21.7 Upon termination of this Agreement by either Party under Section
21.1, both Parties shall be responsible for paying any and all
outstanding amounts due to the other Party. With respect to Customer,
these amounts may include, but are not limited to, Customer and
Client's unbillables, post-billing adjustments, uncollectibles
moneys, and charges for Services that occur for a period of twelve
(12) months after the termination of this Agreement as provided in
Exhibit C, Section 2.1.2. With respect to AOC, these amounts may
include, but are not limited to, all outstanding net amounts due
for PAR.
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22. UNAUTHORIZED MESSAGES
22.1 Customer warrants and represents that:
A. Customer will submit only true and correct ▇▇▇▇▇▇▇▇ for
charges properly authorized by End Users;
B. Customer will establish and maintain (i) adequate procedures
for handling End User complaints consistent with industry norms
and (ii) a toll-free number which End User's may contact to
register complaints concerning the services of Customer and its
Clients, and
C. Customer and its Clients, and their employees, sales agents or
representatives do not and will not engage in any deceptive or
fraudulent practice in marketing the services for which Customer
is submitting billing to AOC.
22.2 Customer and its Clients shall be responsible for providing End
Users with understandable and appropriate information concerning the
rates, terms, and responsibilities associated with the services for
which Customer is submitting billing under this Agreement. Customer
or its Clients shall obtain End User authorization for such services
in a manner that is reasonably subject to verification and shall
retain all verification documentation or media for a period of not
less than three (3) years from the date of such End User
authorization. All Message types submitted by Customer and its
Clients and all collection and billing activities engaged in by
Customer in connection with this Agreement shall be in strict
compliance with applicable law and regulations and shall not be
fraudulent or deceptive. In addition, all Message types shall conform
with the terms and conditions of this Agreement, including the
provisions of the following Section 22.3.
22.3 For the purpose of this Agreement, "Unauthorized Messages" are
those Messages which:
A. Are not of a type listed as permitted under Exhibit F;
B. Result from "slamming," i.e., improperly switching the End
User from another carrier without proper authorization from the
End User;
C. Result from "cramming," i.e., the submission of unauthorized,
deceptive or ambiguous charges for inclusion on the End User
▇▇▇▇;
D. Involve deceptive or fraudulent billing activities;
E. Do not comply with the Billing Services Guidelines set forth
in Attachment 1 of Exhibit B, as periodically updated;
F. Are not directly related to intraLATA toll, interLATA or
international telecommunications services; or
G. Do not substantially involve the transmission of information
or data using telecommunications services.
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22.4 As used in this 22 - UNAUTHORIZED MESSAGES, the term "Unauthorized"
means the Messages were either not authorized by the End User or are
not authorized by AOCs' for billing under this Agreement. For the
purposes of Section 22.3, Messages or sales programs which generate
higher numbers of End User complaints that would otherwise be
anticipated by AOCs in their sole discretion shall be deemed to be
inherently deceptive, and thus constitute Unauthorized Messages upon
AOCs giving notice thereof to Customer.
22.5 Customer shall not forward to AOC for billing any Messages or
Invoice Ready Billing statements containing Unauthorized Messages.
If AOC determines it has received Unauthorized Messages from Customer
(or from any party on whose behalf Customer submits messages to AOC
for billing) or if AOC experiences a significant increase in End User
complaints about Unauthorized Messages appearing in Customer's
portion of the End User ▇▇▇▇, AOC will notify Customer in writing of
the claims concerning Unauthorized Messages, giving sufficient detail
for Customer to investigate such claims. Customer shall provide a
written response to such notice within ten (10) Business Days with
either sufficient detail to refute the claims of Unauthorized
Messages or a description of a plan of action Customer will
immediately take to prevent any additional similar incidents of
Unauthorized Messages. Upon request of AOC, Customer shall furnish
copies of any documentation or media which verifies the End User's
authorization of the services received from Customer or its Clients.
22.6 Upon request of an End User, Customer shall agree to block the End
User's account from receiving services or charges from Customer. If
the End User request involves the services of a Client, Customer
shall ensure that the affected Client takes action to block the End
User's account. Upon receipt of any valid End User claim regarding
Unauthorized Messages, Customer shall promptly issue a credit to the
End User account.
22.7 In the event of any End User claim regarding Unauthorized Messages
in Customer's portion of the End User ▇▇▇▇, AOC may immediately
adjust such charges from the End User ▇▇▇▇ and recourse them to
Customer. If Customer fails to respond to the notice of Unauthorized
Messages under Section 22.4 or fails to immediately implement its
plan of action to prevent additional occurrences, then such failure
shall constitute a breach of this Agreement for which AOC may resort
to its termination rights under Section 21.2, including its right to
suspend performance in whole or in part or take such other action
less than complete termination as permitted under Section 21.5.
22.8 Notwithstanding anything to the contrary elsewhere in this
Agreement, AOC may disclose to federal, state, and local public and
law enforcement agencies and to other local exchange carriers any
information it may have concerning Unauthorized Messages involving
Customer or its Clients. To the fullest extent permitted by law,
Customer authorizes AOC to release such information. AOC shall have
no obligation to give Customer notice of such disclosures. Where
practical, AOC shall endeavor to give Customer prior notice of such
disclosure.
22.9 AOC reserves the right to amend this Principal Agreement or any of
its Exhibits or Attachments to implement additional measures to
prevent the occurrence of Unauthorized Messages in response to
industry or regulatory initiatives or on its own initiative.
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23. ADVERTISING AND PUBLICITY; MISREPRESENTATIONS
23.1 Neither Customer nor its Clients shall publish or use the name,
service ▇▇▇▇ or trademark of the AOCs or any AOC Affiliates in any
advertising, telemarketing, direct mail or other promotions or any
other publicity material relating to the Services provided under this
Agreement or any products or services of Customer or its Clients
billed under this Agreement without the prior written authorization
of ASI.
23.2 Neither Customer nor its Clients, nor their employees, contractors
or agents, shall make any misrepresentations concerning their
affiliation with the AOCs or any AOC Affiliates, or imply that
products or services of Customer or its Clients are associated with
or endorsed by the AOCs or AOC Affiliates.
23.3 In the event of any violation of Sections 23.1 or 23.2, Customer
shall reimburse AOC for any out of pocket expenses incurred by AOC in
investigating such violation, as well as for any lost profits or
costs associated with the loss or restoral of End User accounts.
Customer also acknowledges and agrees that any violations of Section
23.1 or 23.2 would cause damages to the reputation and business good
will of the AOCs and their Affiliates which are difficult, if not
impossible, to estimate. Accordingly, Customer agrees to pay, as
liquidated damages and not as a penalty, the following amounts as
damages for loss of reputation and business good will for each such
violation:
Type of Violation Liquidated Damage Amount
----------------- ------------------------
Residential customer sales $500 per customer solicited
Small business sales (10 lines or less) $1,000 per customer solicited
Large business sales (11 lines or more) $50,000 per customer solicited
Advertising or mass market promotion, $1,000,000 per advertisement
including those using electronic media or mailing
23.4 Upon investigation and determination that a violation has occurred,
AOC shall notify Customer of the results of its investigation and may
also give notice of termination of this Agreement under Section
21.2E. Within thirty (30) days after the giving of such notice,
Customer shall either refute the results of the AOCs' investigation
with proofs satisfactory to the AOCs or pay the amount of liquidated
damages claimed. If Customer fails to either refute such results or
pay the damages owed within such period, then the amounts claimed by
AOCs shall be deemed conclusive as to such damages, and the AOCs may
take appropriate action to collect such damages, including, but not
limited to, offsetting them against any amounts owed to Customer or
its Clients under this Agreement.
23.5 Where liquidated and other damages recoverable under Section 23.3
relate solely to actions of a Client, the AOCs will restrict any
claims or offsets against PAR Amounts owed to Customer to amounts
relating to the involved Client if Customer (i) has inserted clauses
in its agreements with such Client substantially similar to those set
forth in this Section 23 - ADVERTISING AND PUBLICITY;
MISREPRESENTATIONS and (ii) cooperates with the AOCs in identifying
PAR Amounts allocable to such Client. Such
22
restriction on claims shall apply only against Customer, and shall
not be deemed to restrict AOCs rights or remedies with respect to the
involved Client.
23.6 AOCs' acceptance of liquidated damages as provided in Section 23.3
shall not constitute authorization for Customer or its Clients to use
the name, service ▇▇▇▇ or trademark of the AOCs or any of their
Affiliates, nor shall it constitute a waiver of any other remedies
that the AOCs or their Affiliates may have at law or in equity,
including, but not limited to, the right to seek injunctive relief
for continuing violations of Sections 23.1 or 23.2. Customer agrees
that a continued violation of Sections 23.1 or 23.2 would cause the
AOCs or their Affiliates irreparable injury for which they would have
no adequate remedy at law, and that the AOCs or their Affiliates
shall be entitled to seek immediate injunctive relief prohibiting
such violation, in addition to any other rights and remedies
available to them. Customer waives any right to require that the AOCs
or their affiliates post a bond.
23.7 Customer shall include, and AOCs and their Affiliates shall be made
third party beneficiaries of, similar rights and obligations to those
set forth in this Section 23 - ADVERTISING AND PUBLICITY;
MISREPRESENTATIONS in Customer's agreements with its Clients.
24. LIMITATION PERIOD
24.1 No Claim under this Agreement may be made or brought by any Party
more than one (1) year after the date of the event that gave rise to
the Claim; provided, however, that:
A. If a Party was not aware of the event giving rise to a Claim,
then the period for bringing a Claim under this Section shall be
extended to either one (1) year from the date such Party
discovered or reasonably should have discovered such event or
two (2) years from the occurrence of such event, whichever
period is shorter;
B. A Claim for indemnification under this Agreement may be made
or brought by a Party for two years after the accrual of the
cause of action for indemnity as described in Section 18 -
INDEMNIFICATION; and
C. Any Claim in the nature of fraud may be brought within two
years of discovery of the existence of such fraud or concealment.
24.2 Any Claim for fraud shall be in writing and shall set forth in
reasonable detail the basis therefor.
25. SOFTWARE
AOC or its contractors or agents may develop specifications, drawings,
documentation, concepts, methods, techniques, processes, adaptations, and
ideas including, but not limited to, software (hereinafter "Software") for
the purpose of rendering Services to Customer under this Agreement. Unless
otherwise agreed in writing by authorized representatives of the Parties,
in advance of the creation of the Software, AOC shall own all right,
title, and interest, including copyright, in and to the Software.
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26. INTELLECTUAL PROPERTY
Except as otherwise expressly provided herein, nothing contained in this
Agreement shall be construed as conferring by implication, estoppel, or
otherwise any license or right under any patent, trademark, trade name,
copyright, or other intellectual property right of either Party.
27. CERTIFICATION
Customer warrants and represents that it has obtained and will keep
current all necessary jurisdictional certification required to conduct
the business for which it will submit charges for billing under this
Agreement. Customer certifies that all Clients forwarding charges for
billing through Customer have also obtained similar certification. Upon
request, Customer will provide satisfactory evidence of all such
certifications. AOC shall have no obligation to process any Customer
billing that is forwarded on behalf of a Client which has not obtained
proper certification or whose certification is revoked or suspended.
Failure to obtain or retain proper certification or to furnish
satisfactory proof thereof shall constitute a material default under
this Agreement for which AOC may resort to termination remedies under
Section 21.2C.
28. AMENDMENTS; WAIVERS
This Agreement (or any part thereof, including Exhibits or documents
referred to herein) may be modified or additional provisions may be
added by written agreement signed by or on behalf of Customer, and each
affected AOC or ASI, unless otherwise provided herein. No amendment or
waiver of any provision of this Agreement and no consent to any default
under this Agreement shall be effective unless the same shall be in
writing and signed by the Party against whom such amendment, waiver or
consent is claimed. In addition, no course of dealing or failure of any
Party to strictly enforce any term, right or condition of this Agreement
shall be construed as a waiver of such term, right or condition.
29. ASSIGNMENT
29.1 Neither Party shall assign any right or obligation under this
Agreement without the other Party's prior written consent. Any
attempted assignment shall be void.
29.2 Notwithstanding Section 29.1, Customer may assign money due or to
become due to it from AOC for the purchase of PAR, provided (i)
Customer gives AOC at least thirty (30) days prior written notice
of such assignment, (ii) such assignment shall not impose upon AOC
obligations to the assignee other than the payment of such moneys
and (iii) such assignment shall not result in the filing or claim
of a security interest in any PAR offered to AOC for purchase under
this Agreement.
29.3 Notwithstanding Section 29.1, either Party may assign this
Agreement, in whole or in part, to:
A. A parent corporation;
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B. Any company into which a Party may merge or consolidate or
which acquires substantially all of its assets or stock; or
C. A wholly owned Affiliate of the parent corporation which is of
a financial standing equal to or greater than that of the
assignor.
Any assignment under this Section 29.3 shall not require the
consent of the other Party, but the assigning Party shall provide
written notice to the other Party within thirty (30) days of such
assignment. An assignment under this Section shall not increase the
scope of the Services which AOC is obligated to provide by more
than ten percent (10%). If the company into which Customer merges
or consolidates or which merges and consolidates with Customer also
has a billing and collection agreement with AOC, then the more
recent of the billing and collection agreements between the Parties
will survive such merger or consolidation and govern the billing
and collection services provided thereafter by AOC to the surviving
company.
29.4 Without limiting the generality of the foregoing, this Agreement
shall be binding upon and shall inure to the benefit of the
Parties' respective successors and assigns.
30. NOTICES AND DEMANDS
30.1 Except as otherwise provided under this Agreement, all notices,
demands, or requests which may be given by any Party to the other
Party shall be in writing and shall be deemed to have been duly
given on the date delivered in person or via overnight express
deliveries service, or on the third Business Day following the date
deposited, postage prepaid, in the United States mail, to the
respective Parties and addressed as set forth in Appendix 2 --
Addresses For Notices to this Agreement.
30.2 If personal delivery is selected as the method of giving notice
under this Section, a receipt of such delivery shall be obtained.
The address to which such notices, demands, requests, elections or
other communications is to be given by any Party may be changed by
written notice given by such Party to the other Party pursuant to
this Agreement.
31. SUSPENSION OF PERFORMANCE; OFFSET
31.1 Upon notice of Customer, AOC may suspend performance of this
Agreement immediately if Customer is in breach of any other
agreement between the parties.
31.2 If Customer fails to pay when due any monthly charges for Services,
any recourse adjustments or any interest or other amounts due to AOC
under this Agreement, then in addition to any other rights AOC may
have under this Agreement, AOC may refuse to provide any further
Billing and Collection Services, directly or indirectly, to
Customer, including billing and collection services on Customer
Accounts received through an aggregator, affiliate or other agent
of Customer. If AOC does not accept any Customer accounts for
Services while Customer is past due on any amounts owing to AOC,
then AOC may deduct the amounts owed from any PAR owed to Customer
or its agent on Customer's behalf.
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31.3 Notwithstanding anything to the contrary in this Agreement, if
Customer's financial condition becomes impaired or if Customer
fails to pay its obligations to the AOCs as they become due,
Customer agrees that AOC may offset any amounts owed by Customer to
AOC against any amounts AOC may owe Customer under this Agreement,
under any other agreement between the parties, or for services
provided under any applicable tariff.
31.4 Where Customer acts as an agent or aggregator of a Client or any
other Third Party and such Client or Third Party has an outstanding
balance due to the AOC, the AOC may net any amounts due to the AOC
against payments due the Customer, not to exceed the Message
revenues associated with such Client or Third Party; provided,
however, that such netting will be subject to (i) any changes,
offsets, or other claims of Customer against Client, and (ii) any
valid claims of third parties having a priority over AOC's claim
against the Client, such as an assignment of the Client's
receivables of which Customer has received prior notice. Customer
shall cooperate with AOC in determining the revenues owing to
Client which are subject to netting under this Section. If AOC nets
such amounts owed by Client against amounts due to Customer under
this Agreement, AOC will assign its claim to such revenues to
Customer upon request. AOC will indemnify and hold Customer
harmless against any claims against Customer arising from netting
under this Section.
32. THIRD-PARTY BENEFICIARIES
Except as provided in Section 18.3 -- INDEMNIFICATION, this Agreement
shall not provide any person not a party to this Agreement with any
remedy, claim, liability, reimbursement, claim of action or other right
in excess of those existing without reference to this Agreement.
33. GOVERNING LAW; FORUM
The construction and interpretation of this Agreement and any Claim
arising hereunder or related hereto, whether in contract or tort, shall
be governed by the domestic laws of the State of Illinois. Any lawsuit
instituted by either party in connection with this Agreement shall only
be brought in the Circuit Court of ▇▇▇▇ County, Illinois or Federal
Court for the Northern District of Illinois, and both parties hereby
consent to the personal jurisdiction of such courts.
34. SEVERABILITY
If any provisions of this Agreement shall be held invalid or
unenforceable for any reason, such invalidity will affect only the
portion of the Agreement that is invalid. In all other respects this
Agreement will stand as if such invalid or unenforceable provision had
not been a part thereof, and the remainder of the Agreement shall remain
in full force and effect. Additionally, the parties shall endeavor to
replace the provision with a valid and enforceable provision acceptable
to both Parties which so far as possible achieves the same economic and
other benefits for the Parties as the severed provision was intended to
achieve.
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35. SURVIVABILITY OF OBLIGATIONS
Notwithstanding expiration or termination of this Agreement, the
provisions of this Agreement and each Party's obligations hereunder,
which by their nature or context are required or intended to survive,
shall survive and remain in full force and effect after such expiration
or termination.
36. ENTIRE AGREEMENT
This Agreement (including all Appendices, Exhibits, and/or Attachments
hereto) constitutes the entire agreement between the Parties and
supersedes all prior agreements, oral or written representations,
statements, negotiations, proposals and undertakings with respect to the
subject matter hereof. Except as otherwise provided in this Agreement,
no modification, amendment, supplement to or waiver of this Agreement or
any of its provisions shall be binding upon the Parties unless made in
writing and duly signed by authorized representatives of both Parties.
37. HEADINGS
The headings in this Agreement are for convenience and shall not be
construed to define or limit any of the terms herein or affect the
meanings or interpretation of this Agreement.
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AXCES, INC.
CIC 5071 -- ACNA AXQ
/s/ ▇▇▇▇▇▇▇ ▇. Till
By: ____________________________________________________________
▇▇▇▇▇▇▇ ▇. Till
Printed Name: __________________________________________________
President
Title: _________________________________________________________
6-7-99
Date: __________________________________________________________
AMERITECH LONG DISTANCE INDUSTRY SERVICES
a division of Ameritech Services, Inc.
For itself and as authorized representative for:
AMERITECH ILLINOIS,
AMERITECH INDIANA,
AMERITECH MICHIGAN,
WISCONSIN ▇▇▇▇, INC., d/b/a AMERITECH WISCONSIN
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: ____________________________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
General Manager -- Billing and Customer Information Systems
6/21/99
Date: __________________________________________________________
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AMERITECH CONFIDENTIAL
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