EXHIBIT 99.1
CONFIDENTIAL PORTION MARKED [***] HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SBC AGREEMENT No. 05040021
Master Services Agreement
among
WilTel Communications, LLC,
WilTel Local Network LLC
SBC Services, Inc.
and
SBC Communications Inc.
(for certain limited purposes as set forth herein)
TABLE OF CONTENTS
Page
RECITALS 1
ARTICLE 1. DEFINITIONS............................................................................................2
ARTICLE 2. WILTEL SERVICES.......................................................................................15
ARTICLE 3. SPECIAL PROVISIONS GOVERNING WILTEL SERVICES..........................................................17
ARTICLE 4. ORDERING AND INSTALLATION OF WILTEL SERVICES..........................................................30
ARTICLE 5. TROUBLE, MAINTENANCE AND REPAIR OF WILTEL SERVICES....................................................30
ARTICLE 6. SBC PLATFORM SERVICES.................................................................................31
ARTICLE 7. TERMINATION OF THIS AGREEMENT.........................................................................32
ARTICLE 8. PRICING AND CHARGES...................................................................................34
ARTICLE 9. SBC RESPONSIBILITIES..................................................................................37
ARTICLE 10. WILTEL RESPONSIBILITIES..............................................................................37
ARTICLE 11. INVOICE, BILLING AND PAYMENT TERMS...................................................................38
ARTICLE 12. DISPUTE RESOLUTION...................................................................................39
ARTICLE 13. DEFAULT..............................................................................................41
ARTICLE 14. WARRANTY AND DISCLAIMER OF WARRANTY..................................................................41
ARTICLE 15. LIMITATION OF LIABILITY..............................................................................43
ARTICLE 16. INDEMNIFICATION......................................................................................44
ARTICLE 17. COMPLIANCE WITH LAW..................................................................................45
ARTICLE 18. FORCE MAJEURE........................................................................................45
ARTICLE 19. CONFIDENTIAL INFORMATION.............................................................................45
ARTICLE 20. PUBLICITY............................................................................................47
ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS.........................................................................47
ARTICLE 22. INSURANCE............................................................................................48
ARTICLE 23. GENERAL TERMS AND CONDITIONS.........................................................................49
I. Appendices
----------
A. SBC Restricted Companies
B. QoS Bonus Performance Metrics
C. Platform Hardware and Software
D. List of Surviving Collocation Arrangements
E. WilTel City List
F. Schedule of OSS Interoperability
G. SBC Traffic Forecast
H. [***] Units Agreement
II. Schedules
---------
A. WilTel Service Supplements
--------------------------
1. 1+ Voice Service
2. Private Line Service
3. ATM Service
4. Frame Relay Service
5. International Voice Service
6. International Private Line Service
7. [Intentionally Deleted]
8. List of On-Net Services and Off-Net Services;
List of Included Services and Excluded Services;
Form of Certification
9. Local Access Service
10. Local Transport Service
11. Collocation Services
12. Ancillary and Maintenance Charges
13. [Intentionally Deleted]
14. Pricing Methodology for Bulk Facilities
B. SBC Service Supplement
----------------------
1. Platform Service
C. Ordering and Installation of WilTel Services
D. WilTel Network Monitoring, Maintenance & Repair
III. Exhibits
--------
A. Executive Orders and Associated Federal Regulations
MASTER SERVICES AGREEMENT
AMONG
WILTEL COMMUNICATIONS, LLC
WILTEL LOCAL NETWORK LLC
SBC SERVICES, INC.
AND
SBC COMMUNICATIONS INC.
(FOR CERTAIN LIMITED PURPOSES SET FORTH HEREIN)
This MASTER SERVICES AGREEMENT, dated as of June 15, 2005 (the "Effective
Date"), is entered into by and among:
WilTel Communications, LLC, a Delaware limited liability company
("WilTel"), and its Affiliate, WilTel Local Network LLC ("WilTel Local
Network");
and
SBC Services, Inc., a Delaware corporation ("SBC"), and, solely for the
purposes of Articles 1 and 23 hereof, SBC Communications Inc. ("Parent").
RECITALS
WHEREAS, WilTel and SBC Communications Inc. entered into a Master Alliance
Agreement dated February 8, 1999, as amended (as so amended, the "MAA"), and
certain other agreements pursuant thereto (the MAA, such other agreements and
all ancillary agreements and related documentation are referred to herein
collectively as the "Alliance Agreements"); and
WHEREAS, contemporaneous with the execution of this Agreement, the Parties have
executed that certain Termination, Mutual Release and Settlement Agreement, of
even date herewith (the "Termination and Release Agreement"), among SBC
Communications Inc., SBC Operations, Inc., SBC Services, Inc., SBC Telecom, Inc.
and SBC Long Distance, LLC (successor to SBC Long Distance, Inc. and
Southwestern ▇▇▇▇ Communications Services, Inc.), on behalf of themselves and
their Affiliates, and WilTel Communications Group, LLC (f/k/a ▇▇▇▇▇▇▇▇
Communications, Inc.) and WilTel Communications, LLC, which terminates the MAA
and all other Alliance Agreements and releases all obligations thereunder,
except to the extent provided otherwise in the Termination and Release
Agreement, by the mutual agreement of the parties thereto; and
WHEREAS, WilTel wishes to enter into this Agreement to continue to make
available existing Services and other Services relating to telecommunications
services; and
WHEREAS, SBC wishes to purchase such Services from WilTel; and
WHEREAS, SBC is authorized to enter into this Agreement to provide certain
Services to WilTel; and
WHEREAS, WilTel wishes to purchase such Services from SBC; and
WHEREAS, SBC wishes to continue to make such Services available to WilTel
pursuant to this Agreement; and
WHEREAS, the Parties do not intend to undertake any joint venture, partnership,
or other arrangement other than as purchasers and sellers of the Services
identified in this Agreement; and
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WHEREAS, the Parties agree that no public utility property belonging to SBC,
including any telephone plant or property, is being sold, assigned, mortgaged,
encumbered or otherwise disposed of in this Agreement;
NOW, THEREFORE, in consideration of the above premises, and of the mutual
agreements contained in this Agreement, the Parties do hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Definitions. All terms in this Agreement shall have the definitions as
commonly used in the telecommunications industry, unless otherwise
defined or used herein. Initially capitalized words, terms and phrases
appearing in this Agreement are set forth and defined in this Section.
The Parties agree that the following definitions shall be applicable
to this Agreement and shall have the meanings set forth below.
1.2 "Acceptance" shall mean SBC's acceptance of the Services ordered by
SBC and provided by WilTel, as specified in Section F of Schedule C.
1.3 "Acknowledgement" shall mean the date that WilTel acknowledges receipt
of a Service Order, as used in Section G.1.2(i) of Schedule C.
1.4 "Act" or "Communications Act" shall mean the Communications Act of
1934, as amended by the Telecommunications Act of 1996, codified at 47
U.S.C. ss. 151, et seq., as it may be amended in the future, including
the rules, regulations and policies of the FCC.
1.5 "ACTL" shall mean "Access Customer Termination Location" - Common
Language Location Identification (CLLI) code that identifies a
specific network location assigned by the provider. The first eight
characters represent the building location. The last three characters
identify the specific equipment. Valid CLLI's are maintained and
updated in the Central Location Online Entry System (CLONES) database.
1.6 "Actual Start Date" shall mean the date by which a Service by WilTel
(a) is demonstrated to be in accordance with the general industry
standards pursuant to WilTel's standard testing procedures; and (b)
meets or exceeds the applicable technical Specifications.
1.7 "Additional Charges" shall have the meaning set forth in Section 11.1.
1.8 "Affiliate" shall mean as to any Person, any other Person (a) that,
directly or indirectly, owns more than fifty percent (50%) of such
Person or (b) of which such Person, directly or indirectly, owns more
than fifty percent (50%).
1.9 "Agreement" shall mean this Master Services Agreement between SBC and
WilTel, as amended, modified, supplemented, renewed or replaced from
time to time and any and all Exhibits, Schedules and Appendices hereto
and Orders issued hereunder.
1.10 "Alliance Agreements" shall have the meaning set forth in the first
Recital.
1.11 "Ancillary Services" shall have the meaning set forth in Section
2.1.E.
1.12 "ANI" shall mean automatic number identification.
1.13 "Approved Affiliate" shall have the meaning set forth in Section 4.1.
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1.14 "AS Ratio" shall mean answer seizure ratio.
1.15 "ASR" shall mean access service request, a form used to send a service
order to a telecommunications carrier.
1.16 "ATIS/OBF" shall mean "Alliance for Telecommunications Industry
Solutions" and "Ordering and Billing Forum." ATIS is an industry
standards body; OBF is the subcommittee of ATIS which works standards
related to ordering and billing of telecommunications services.
1.17 "ATM Service" shall have the meaning set forth in Section 1.1 of
Schedule A3.
1.18 "Available" or "Availability" shall mean: (a) with respect to On-Net
Services, the condition in which, in WilTel's sole but reasonable
discretion, WilTel has the Facilities and Capacity necessary to
provide On-Net Service, and such Facilities or Capacity are not
already committed to other Persons and which are accessible to SBC,
directly from the WilTel Network; and (b) with respect to any Off-Net
Services, the condition in which a Third Party Provider or SBC
Affiliate, including any SBC Local Exchange Carrier Affiliate, makes
available such Off-Net Service.
1.19 "Billing Party" shall have the meaning set forth in Section 11.1.
1.20 "Bulk Facility" shall mean a Dedicated Local Access Facility that is
shared between SBC and WilTel for their respective Customers or
respective internal use.
1.21 "Business Day" shall mean any Day except Saturday, Sunday and any
federal holiday.
1.22 "Business Hours" shall mean the hours of 9:00 a.m. until 5:00 p.m.,
local time, on each Business Day.
1.23 "California Affiliates" shall have the meaning set forth in Section
23.14.B.
1.24 "Calling Card Service" shall mean such service as described in
Schedule B1.
1.25 "CAP" shall mean a competitive access provider.
1.26 "Capacity" shall mean capacity which may be provided On-Net or Off-Net
for telecommunications services in ▇▇-▇, ▇▇-▇ and OC-n.
1.27 "CDR" shall have the meaning set forth in Section 1.5(a) of Schedule
A1.
1.28 "CFA" shall mean the "Circuit Facility Assignment." "CFA" is used to
indicate what physical slot or channel assignment has been assigned to
a ▇▇-▇, ▇▇-▇, or OC-n Facility; specific Entrance Facility or
termination point on the edge of a telecommunications carrier's
network that is provided to identify where to connect Circuits.
1.29 "Change of Control of WilTel" shall mean any transaction or event or
series of related transactions or events pursuant to which (i) all or
substantially all of the assets of WilTel are acquired by an SBC
Restricted Company, or (ii) an SBC Restricted Company owns
beneficially (as such term is used in Rules 13d-3 and 13d-5 of the
Securities Exchange Act of 1934, as amended) 50% or more of the voting
or equity interests in WilTel (including by means of a tender or
exchange offer, reclassification, consolidation, merger, sale or other
disposition of equity interests) or (iii) an SBC Restricted Company
possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of WilTel
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1.30 "Chronic Outage" shall have the meaning set forth in Schedules A1, A2,
A3 and A4.
1.31 "CIC" shall mean a carrier identification code.
1.32 "Circuit" shall mean a dedicated communication path with a specified
bandwidth.
1.33 "CLEC" shall mean a competitive local exchange carrier.
1.34 "CNMC" shall mean "Customer Network Management Center" and is WilTel's
single point of contact for installation, maintenance, repair and
trouble management reporting for WilTel data and transport services.
1.35 "CO" shall mean a Local Exchange Carrier central office.
1.36 "Collocation Service" shall mean the services described in Schedule
A11.
1.37 "Confidential Information" shall have the meaning set forth in Section
19.2.
1.38 "Confirmed Due Date" shall mean the date on the FOC which WilTel
commits to make WilTel Services available for SBC's use.
1.39 "CPNI" shall mean "Customer Proprietary Network Information," as
defined in Section 222(f) of the Act and/or FCC and CPUC decisions.
1.40 "CPUC-certified" shall have the meaning set forth in Section 23.14.B.
1.41 "Customer" shall mean, with respect to a Party, such Party's customer
or End User who buys services from that Party.
1.42 "DAL Circuit" shall mean a Circuit used in the provision of DAL
Service.
1.43 "DAL Service" shall mean a Dedicated Access Line 1+Voice Transport
Service, which is 1+ Voice Service provided to an end user via a
Dedicated Circuit. This Dedicated Circuit connects a Customer location
with a WilTel switch using a Dedicated Local Access Facility and may
also use a Dedicated Facility in the WilTel Network.
1.44 "Day" shall mean calendar days, including Saturdays, Sundays and
federal holidays.
1.45 "Debtor Relief Law" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in
effect and affecting the rights of creditors generally.
1.46 "Dedicated Circuit" shall mean a Circuit used exclusively for a
specific Customer or application.
1.47 "Dedicated Local Access Facility" shall mean a Dedicated Circuit used
to provide Local Access Services.
1.48 "Directory Assistance Service" shall mean such service as described in
Schedule B1.
1.49 "Disclosing Party" shall have the meaning set forth in Section 19.2.
1.50 "Disconnect Order" shall have the meaning set forth in Section 3.6.B.
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1.51 "DLR" shall mean a "Design Layout Record." "DLR" refers to the
physical description of how a telecommunications service is
engineered. For Local Access Services, the DLR is received from the
LEC/ILEC after local access order submission, and will contain the
LEC/ILEC order number, circuit ID, plant test date, due date and
entrance facility CFA assignment.
1.52 "DNA" shall mean Direct Network AccessSM , a WilTel-provided web-based
portal that will provide SBC with a partitioned view into the portion
of the WilTel Network used by SBC through a graphic user interface.
1.53 "Documentation" shall mean all documentation, including user and
system manuals and instructions and training materials in machine
readable or printed form, and WilTel's written specifications.
Documentation shall not include WilTel's internal operating manuals or
procedures.
1.54 "DS-0 Service" shall mean a digital signal service with a data
transmission speed of 56 or 64 kilobits per second ("Kbps").
1.55 "DS-1 Service" shall mean a digital signal service with a data
transmission speed of 1.544 megabits per second ("Mbps").
1.56 "DS-3 Service" shall mean a digital signal service with a data
transmission speed of 44.736 Mbps.
1.57 "Due Date" shall have the meaning set forth in Section 11.1.
1.58 "DVBEs" shall have the meaning set forth in Section 23.14.E.
1.59 "Effective Date" shall have the meaning set forth in the preamble.
1.60 "Emergency Maintenance" shall mean maintenance activity taking place
upon less than the minimum notification period that is required to
prevent or minimize service interruption risks or restore interrupted
service in accordance with Schedule D.
1.61 "End User" shall mean a Person that orders service through SBC.
1.62 "Entrance Facility" or "EF" shall mean the physical Circuit between a
carrier's network and ILEC serving wire center or CLEC equivalent, or
the charge for such Circuit.
1.63 "EVNMC" shall mean Enhanced Voice Network Management Center, WilTel's
single point of contact for installation, maintenance, repair and
trouble management reporting for WilTel voice services.
1.64 "Excluded Services" shall have the meaning set forth in Section 3.1.A.
1.65 "Facilities" shall mean the equipment and physical facilities used by
WilTel or any other telecommunications carrier to provide Services to
SBC.
1.66 "FCC" shall mean the Federal Communications Commission.
1.67 "Feature Group D" shall mean such feature as defined in the tariff of
the National Exchange Carrier Association.
1.68 "Firm Price Quote" or "FPQ" shall mean a response by WilTel to a
request from SBC for WilTel to provide an all inclusive and final
price for WilTel Services to be provided under this Agreement.
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1.69 "First Purchase Period" shall have the meaning set forth in Section
3.1.A.
1.70 "First QoS Period" shall have the meaning set forth in Section 3.2.A.
1.71 "FOC" shall mean "Firm Order Confirmation" as defined by ATIS/OBF and
shown in ATIS/OBF-ASR-041. The FOC confirms an access service request
has been accepted and processed by WilTel and identifies the
commitment date for delivery of service.
1.72 "Force Majeure Event" shall have the meaning set forth in Section
18.1.
1.73 "Frame Relay Service" shall have the meaning set forth in Section 1.1
of Schedule A4.
1.74 "Guaranteed Obligations" shall have the meaning set forth in Section
23.19.
1.75 "ILEC" shall mean incumbent local exchange carrier, as that term is
defined in the Communications Act.
1.76 "Included Services" shall have the meaning set forth in Section 3.1.A.
1.77 "Individual Case Basis" or "ICB" shall mean determinations involving
situations where nonstandard arrangements are required to satisfy
specialized needs and the nature of such Service requirements makes it
difficult or impossible to establish general provisions for such
circumstances. When it becomes possible to determine specific terms
and conditions for such offerings, they shall be offered pursuant to
such written terms and conditions as the Parties may mutually agree.
1.78 "InterLATA Service" shall mean long distance telecommunications
service between local access transport areas.
1.79 "International Call" shall mean a switched voice telecommunications
service, excluding data, originating in any of the fifty (50) states
of the United States or Puerto Rico, and terminating in a region
outside the fifty (50) states or Puerto Rico.
1.80 "International Gateways" shall mean the points of interconnection
between international voice service providers and WilTel.
1.81 "International Private Line Services" shall mean the international
private line services described in Schedule A6.
1.82 "International Service" shall mean the transmission and termination of
International Calls to their ultimate termination point.
1.83 "International Termination Costs" shall mean Off-Net usage-based costs
paid by WilTel to Third Parties which are associated with outbound
International Services beyond the International Gateways for U.S.
originated calls, reduced by mutually agreed upon offsets resulting
from direct operating agreements, traffic swaps, or other arrangements
resulting in net reductions to WilTel's costs allocable to the SBC
traffic. Costs excluded from this definition are U.S. domestic access
and U.S. domestic transport fees. Non-usage based costs may also be
included as a component of International Termination Costs where
approved by SBC.
1.84 "International Voice Services" shall mean the international voice
services described in Schedule A5.
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1.85 "IP Indemnified Party" shall have the meaning set forth in Section
21.1.A.
1.86 "IP Indemnifying Party" shall have the meaning set forth in Section
21.1.A.
1.87 "LAN(s)" shall mean local area network(s).
1.88 "Law" shall mean any applicable federal, state, county and local
statute, law, ordinance, regulation, rule, code, order, requirement or
rule of law (including common law) or stock exchange rule.
1.89 "LCR Table" shall have the meaning set forth in Section 1.4(a) of
Schedule A5.
1.90 "Legal or Regulatory Event" shall mean a situation where (a) either
Party reasonably believes that the provision of a requested Service
would violate any Law or governmental order or (b) any unforeseen
event that is not caused by the Party responsible for provisioning
which results in a delay in provisioning, if the Parties were unable,
after consultation prior to any suspension or cancellation, to avoid
the illegality or other situation which gave rise to the concerned
Party's reasonable belief that the situation would violate any Law or
governmental order.
1.91 "Liability" shall mean all losses, damages, expenses, costs,
penalties, fines, fees, including reasonable attorneys' fees and
consulting fees, arising from or incurred in connection with a claim
or cause of action related to performance or omission of acts under
this Agreement or any Service Order or any other agreement between the
Parties.
1.92 "LOA" shall mean a "Letter Of Authorization/Agency" authorizing one
Party to act as an agent for the other for ordering, provisioning, or
maintaining Services.
1.93 "Local Access" shall mean the intraLATA telecommunications facilities
connecting an End User, including an SBC-designated termination point,
to an interexchange carrier's POP within the same LATA, including a
WilTel POP.
1.94 "Local Access Provider" shall mean a Person providing Local Access.
1.95 "Local Access Service" shall mean the provision of service for the
purpose of originating or terminating toll telecommunications service
between the End User and an interexchange carrier's Point of Presence.
1.96 "Local Exchange Carrier" or "LEC" shall mean the local telephone
company that provides exchange telephone services.
1.97 "Local Service(s)" shall mean the local transport services described
in Schedule A10.
1.98 "MAA" shall have the meaning set forth in the first Recital.
1.99 "Major Outage" shall mean a single event of an Outage that generates
at least ten (10) Measured Trouble Tickets, or such Outage that the
Parties mutually agree as a "Major Outage."
1.100 "MAP" shall mean a metropolitan access point that extends the reach of
the WilTel Network beyond a WilTel POP to various points within a
metropolitan area.
1.101 "Material" shall mean any unit of equipment, apparatus, components,
tools, supplies, material, Documentation, hardware, or firmware
thereto, or software purchased or licensed hereunder by SBC or any of
its Affiliates from WilTel and includes any of the foregoing provided
or furnished by WilTel, regardless of how it was obtained.
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1.102 "MBEs/WBEs" shall have the meaning set forth in Section 23.14.B.
1.103 "Mean Time To Restore" or "MTTR" shall have the meaning set forth in
Appendix B, as applicable to a particular Service.
1.104 "Measured Trouble Tickets" shall mean those tickets attributable to a
WilTel Network Outage, as applicable to a particular Service.
1.105 "Migration Appointment" shall mean an appointment scheduled at a
specific time and date for the purpose of migrating Service off of the
WilTel Network and onto the network of another service provider.
1.106 "Migration Bonus" shall have the meaning set forth in Section 3.2.A.3.
1.107 "Migration End of Year Bonus" shall have the meaning set forth in
Section 3.2.A.3.iii.
1.108 "Migration Monthly Bonus" shall have the meaning set forth in Section
3.2.A.3.i.
1.109 "Minimum Migration Standard" shall mean the achievement by WilTel
during the relevant period of [***] Service Migration Metrics as set
forth in Section C of Appendix B.
1.110 "Minimum Quality of Service Standard" shall mean the Minimum Service
Assurance Standard, the Minimum Service Delivery Standard and the
Minimum Migration Standard.
1.111 "Minimum Service Assurance Standard" shall mean the achievement by
WilTel during the relevant period of [***] Service Assurance Metrics
as set forth in Section A of Appendix B.
1.112 "Minimum Service Delivery Standard" shall mean the achievement by
WilTel during the relevant period of [***] Service Delivery Metrics as
set forth in Section B of Appendix B.
1.113 "Minimum Term" shall have the meaning set forth in Section 3.5.A.2.
1.114 "Monthly Recurring Charge" or "MRC" shall mean the monthly recurring
charge for Services as stated in a Service Order submitted by either
Party and accepted by the other.
1.115 "MOU" shall mean minutes of use.
1.116 "Net Amount" shall have the meaning set forth in Section 8.3.J.
1.117 "Network Availability" shall mean a measurement of the percent of
total time that an individual two-way Transport Service is operative
when measured over a calendar month.
1.118 "Network Control Center" or "NCC" shall mean WilTel's single point of
contact for network surveillance and maintenance for WilTel data and
transport services.
1.119 "New Off-Net Services" shall mean any Off-Net Services other than
Off-Net Services that are (i) placed in service prior to the Effective
Date or (ii) the subject of a Firm Price Quote by WilTel that has been
accepted by SBC prior to the Effective Date.
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1.120 "NIU" shall mean the "Network Interface Unit", which is the piece of
equipment that provides the demarcation point between WilTel Service
and the Customer's equipment.
1.121 "Notice" or "Notify" shall mean any notice, authorization or other
communication required or permitted to be provided, issued or given by
a Party. Unless otherwise expressly set forth in this Agreement, or an
applicable Order, all Notices shall be in writing.
1.122 "NRC" shall mean "Non-Recurring Charge(s)" or installation fee(s) and
other one-time charges as stated in a Service Order submitted by one
Party and accepted by the other.
1.123 "OC-n" shall mean a SONET-based point-to-point Circuit for the
bi-directional optical transmission of data, video and voice. Each
OC-n operates at a nominal rate of nx51.84 Mbps, where "n" is 3, 12,
48, etc. The customer interface for an OC-n Circuit is optical.
1.124 "Off-Net" shall mean a Circuit or a switched communication path that
is not On-Net.
1.125 "Off-Net Service(s)" shall mean any Service provided by WilTel
Off-Net, including any Local Access Services or any components of any
Local Access Services.
1.126 "1+ Voice Service" shall mean the Services described in Schedule A1.
1.127 "On-Net" shall mean a Service traversing the WilTel Network both end
points of which originate or terminate (a) in a city with a WilTel
designated WilTel POP or WilTel MAP, or such other location where
WilTel owns and operates terminal equipment, or (b) in a city where,
as of February 9, 2005, there was a WilTel designated WilTel POP or
WilTel MAP, or such other location where, as of February 9, 2005,
WilTel owned and operated terminal equipment.
1.128 "On-Net Service(s)" shall mean any Service provided by WilTel On-Net.
1.129 "On-Net Transport Services" shall mean Transport Services and other
Services provided by WilTel as On-Net Services.
1.130 "Operative" shall mean a Service that is not in an Outage.
1.131 "Operator Services" shall mean such service as described in Schedule
B1.
1.132 "Order(s)" shall mean Service Order(s).
1.133 "OSS" shall mean operations support systems.
1.134 "Outage" shall mean (a) for any 1+ Voice Service, a Customer is unable
to originate or terminate a call or (b) for any other Service using a
Dedicated Circuit (e.g., Private Line, Frame Relay, ATM), a Customer's
Circuit is unable to receive or transmit data for any period of time.
1.135 "Outage Time" shall mean the total time rounded to the nearest minute
that a Customer's Circuit or 1+ Voice Service is in an Outage. Outage
Time shall normally be measured from the time SBC reports the trouble
to WilTel to the time the Circuit or the 1+ Voice Service is restored;
however, for a Major Outage, WilTel shall, upon SBC's request, open a
ticket for each Circuit or 1+ Voice Service and measure the start of
the Outage for all Circuits or the 1+ Voice Services from WilTel's
receipt of the initial trouble indication.
1.136 "Parent" shall have the meaning set forth in the preamble.
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1.137 "Party" shall mean SBC or the WilTel Parties. "Parties" shall mean SBC
and the WilTel Parties collectively.
1.138 "Pass Through Basis" shall mean the reimbursement of the actual,
direct costs, including any taxes, after giving effect to any credits,
rebates, price reductions or other offsets arising from the provision
of Services to SBC, incurred by WilTel in provisioning an Off-Net
Service under this Agreement through a Third Party carrier, which for
these purposes shall include any SBC Affiliate from whom WilTel
purchases telecommunications services, or an allocation of such costs
between SBC and WilTel shall be determined in accordance with the
allocation methodologies in effect on February 9, 2005 and used in the
preparation of Schedule A8, or as otherwise agreed to in writing by
the Parties. The allocation methodologies used in the preparation of
Schedule A8 are designed so as not to provide WilTel with any direct
or indirect profit margin in the aggregate. The actual, direct or
allocated cost of an Off-Net Service is not based exclusively upon
tariff pricing, but rather (a) in cases in which SBC uses the entire
Off-Net Service, the amount invoiced by the Third Party Provider
(including an SBC Affiliate as described above) to WilTel, or (b) in
the case in which SBC uses a part of the Off-Net Service, in
accordance with the pricing methodology set forth in the applicable
Schedules to this Agreement or as otherwise agreed to in writing by
the Parties.
1.139 "Paying Party" shall have the meaning set forth in Section 11.1.
1.140 "Payphone Charges" shall mean any telephone compensation charges or
other assessments attributable to origination of calls from a pay
telephone to the extent SBC or its customers, or direct or indirect
End Users of such customers, originate such calls.
1.141 "Permanent Virtual Circuit" or "PVC" shall mean the pre-established
logical connection between two ports for information transfer for
Frame Relay Service and ATM Service.
1.142 "Person" shall mean an individual, corporation, joint venture,
partnership, limited liability company, business trust, joint stock
company, trust, unincorporated association or any comparable business
entity or any governmental entity.
1.143 "Physical Diversity" shall mean: (a) with respect to two or more
separate, distinct Circuits whether protected or unprotected, that the
physical paths of such Circuits be at least twenty-five (25) feet from
one another, provided that the two paths may get closer than this
limit without violating these requirements of physical diversity if
the section of close proximity is within a POP or building containing
that POP and each Circuit is independently hardened via the use of
rigid conduit outside of the POP walls, and further provided that, if
the two (2) or more Circuits traverse the same POP, each Circuit maps
through fully separate and distinct transmission, switching, and
routing equipment, such that it offers no single point of failure in
the network; and (b) with respect to transmission, switching and
routing equipment, that they are completely independent of one another
with no shared common hardware or software components with the data or
control planes. Termination of the two (2) Circuits on the same LD
voice switch will not violate these physical diversity requirements if
the Circuits are provisioned to separate interface frames or line
shelves.
In addition to the foregoing, Physical Diversity between two (2) or
more separate and distinct Circuits shall require all of the
following: (a) segregated right-of-ways or paths for conduit
containing fiber cabling as described above; (b) segregated POP
entrance facilities for conduit/fiber; (c) segregated fiber cabling as
described above; (d) segregated transmission, switching, or routing
equipment with no commonality of equipment components; and (e) fully
protected power systems within a single POP.
1.144 "PIC" shall mean primary interexchange carrier.
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1.145 "Planned Maintenance" shall mean maintenance tasks consisting of
events for the upkeep and/or upgrade of the network, each of which
contains one or more routines. The term "routine" is synonymous with
procedure, function and subroutine. Planned Maintenance shall be
scheduled and planned to minimize negative impact to the Customer.
1.146 "Platform" or "Platforms" shall mean that combination of physical
hardware equipment and software, except for transport, that
collectively provides Platform Services.
1.147 "Platform Failure" shall have the meaning set forth in Section G.1.5
of Schedule B1.
1.148 "Platform Metrics" shall mean those Platform Service performance
metrics set forth in Section G.1.5(I) of Schedule B1.
1.149 "Platform Outage" shall have the meaning set forth in Section G.1.5(H)
of Schedule B1.
1.150 "Platform Services" shall mean those Services provided hereunder as of
February 9, 2005 by SBC to WilTel as described in Schedule B1.
1.151 "Platform Transition Notice" shall have the meaning set forth in
Section 6.4.
1.152 "Platform Transition Period" shall have the meaning set forth in
Section 6.2.C.
1.153 "Point of Presence" or "POP" shall mean a point of presence as
commonly understood in the telecommunications industry.
1.154 "POP-to-POP Transport Services" shall mean a Transport Service, or
that portion thereof, that is provisioned between two WilTel POPs.
1.155 "Private Line Service" shall have the meaning set forth in Section 1.1
of Schedule A2.
1.156 "Provisioning Configuration" shall mean any of the two types of
connections provided by WilTel described herein (On-Net or Off-Net).
1.157 "Purchase Commitment" shall have the meaning set forth in Section
3.1.A.
1.158 "Purchase Commitment Payment" shall have the meaning set forth in
Section 3.1.C.
1.159 "Purchase Commitment Period" shall have the meaning set forth in
Section 3.1.A.
1.160 "Purchasing Party" shall have the meaning set forth in Section 3.6.B.
1.161 "Quality of Service Period" shall have the meaning set forth in
Section 3.2.A.
1.162 "Quote" refers to WilTel's quotation which provides MRCs and NRCs for
a specified Service, Circuit or Circuits.
1.163 "Receiving Party" shall have the meaning set forth in Section 19.3.
1.164 "Requested Asset" shall have the meaning set forth in Section 3.1.G.
1.165 "Requested Start Date" shall mean the date that SBC requests Services,
as defined in Section G.1.2(i) of Schedule C.
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1.166 [***]
1.167 "SBC" shall have the meaning set forth in the preamble and, to the
extent applicable, in Section 4.1.
1.168 "SBC Facilities" shall have the meaning set forth in Section 9.1.D.
1.169 "SBC ILEC" is an SBC Affiliate that is an ILEC.
1.170 "SBC Restricted Company" shall mean any Person identified on Appendix
A.
1.171 "SCC" shall mean switching control center, and is WilTel's single
point of contact for network surveillance and maintenance for WilTel
voice services.
1.172 "SCP" shall mean signal control point. 166
1.173 "Second Purchase Period" shall have the meaning set forth in Section
3.1.A.
1.174 "Second QoS Period" shall have the meaning set forth in Section 3.2.A.
1.175 "Service" or "Services" shall include any service provided by one
Party to another Party under this Agreement, including Transport
Services, Platform Services, Collocation Services, International
Services, Ancillary Services and services pertaining to Circuits.
1.176 "Service Assurance Bonus" shall have the meaning set forth in Section
3.2.A.1.
1.177 "Service Assurance End of Year Bonus" shall have the meaning set forth
in Section 3.2.A.1.iii.
1.178 "Service Assurance Metrics" shall mean the service assurance metrics
set forth in Section A of Appendix B.
1.179 "Service Assurance Monthly Bonus" shall have the meaning set forth in
Section 3.2.A.1.i.
1.180 "Service Delivery Bonus" shall have the meaning set forth in Section
3.2.A.2.
1.181 "Service Delivery End of Year Bonus" shall have the meaning set forth
in Section 3.2.A.2.iii.
1.182 "Service Delivery Metrics" shall mean the service delivery metrics set
forth in Section B of Appendix B.
1.183 "Service Delivery Monthly Bonus" shall have the meaning set forth in
Section 3.2.A.2.i.
1.184 "Service Intervals" shall mean WilTel's time periods for responding to
SBC's requests for Capacity as defined in Section G.1.3 of Schedule C.
1.185 "Service Metrics" shall mean the Service Assurance Metrics, Service
Delivery Metrics, Service Migration Metrics, SLAs, SLOs and other
service level measurements, as applicable.
1.186 "Service Migration Metrics" shall mean the service migration metrics
set forth in Section C of Appendix B.
1.187 "Service Order(s)" shall mean WilTel-approved forms executed by SBC
and accepted by WilTel, or electronic communications as may be
delivered via an electronic interface that may be provided by WilTel
for the purpose of ordering Material and Services hereunder in
accordance with Schedule C. Service Orders incorporate the applicable
Quote.
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1.188 "Service Volume Threshold" shall mean the applicable threshold as set
forth in Appendix B or Schedule B1.
1.189 "SLA" shall mean, for any Service, Service Level Agreements as
described in the Schedule(s) applicable to such Service.
1.190 "SLO" shall mean, for any Service, Service Level Objectives as
described in the Schedule(s) applicable to such Service.
1.191 "SNMP" shall mean simple network management protocol.
1.192 "SONET" shall mean a synchronous optical network, which is optical
transport technology, based on direct synchronous multiplexing, to
allow flexible and cost effective networking. It provides an interface
to nominal operating speeds from 50 Mbps to 10 Gigabits per second
("Gbps").
1.193 "SOSN" or "Start of Service Notice" shall have the meaning set forth
in Section G.1.5 of Schedule C.
1.194 "Specifications" shall mean (a) WilTel's applicable specifications and
descriptions, including any warranty statements, and (b) SBC's
requirements, specifications, and descriptions specified in, or
attached to, this Agreement or an applicable Service Order, which
shall control over an inconsistency with WilTel's specifications and
descriptions.
1.195 "SPOC" shall mean a "Single Point of Contact" for performance of the
operational duties designated herein, including Order processing and
provisioning, network monitoring, repair and maintenance, and trouble
management and reporting.
1.196 "Supplying Party" shall have the meaning set forth in Section 3.6.B.
1.197 "Tariff" shall mean an applicable tariff, if any, as defined in
Section 2.2.A.
1.198 "Term" shall have the meaning set forth in Section 7.1.
1.199 "Termination and Release Agreement" shall have the meaning set forth
in the second Recital.
1.200 "Term Order" shall have the meaning set forth in Section 3.6.C.
1.201 "Third Party" shall mean a Person other than a Party or an Affiliate
of a Party.
1.202 "Third Party Provider" shall mean any Third Party used by WilTel to
provision any Service or Facility or portion thereof to SBC or any of
its Affiliates.
1.203 "Time To Restore Service" shall mean the same as Outage Time.
1.204 "Toll Free Service" shall mean such service as described in Section
A.1.4 of Schedule B1.
1.205 "Total Circuit Outage Time" shall mean the aggregate Outage Time in a
month associated with all Circuits or 1+ Voice Services in the
measured Service category (Private Line (DS-1/DS-3 or OC-n),
Frame/ATM, 1+ Voice (switched or dedicated)).
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1.206 "Transition Notice" shall have the meaning set forth in Section 3.4.
1.207 "Transport Services" shall have the meaning set forth in Section
2.1.A.
1.208 "Transport Services Schedule" shall mean any of the Schedules referred
to in Section 2.1.A.
1.209 "TSP" shall mean "Telecommunications Service Priority Program" and
shall provide for National Security and Emergency Preparedness (NS/EP)
users priority authorization of telecommunications services that are
vital to coordinating and responding to crises.
1.210 "Unavailable Seconds" shall mean Outage Time expressed in seconds.
1.211 "Universal Service Fund" or "USF" shall mean and include all of the
assessment and funding mechanisms covered by the FCC's
Telecommunications Reporting Worksheet Form 499 (or successor
Worksheet). This term also includes all of the same or similar
assessment and funding mechanisms administered by state and/or local
governments and agencies.
1.212 "USF Recovery Fee" shall have the meaning set forth in Section 8.3.J.
1.213 "WAN" shall mean wide area network.
1.214 "WATS" shall mean wide area terminating service.
1.215 "Wholesale Services Agreement" shall mean that certain Wholesale
Services Agreement, dated effective as of December 19, 2003, as
amended, between WilTel and SBC.
1.216 "WilTel" shall have the meaning set forth in the preamble.
1.217 "WilTel Local Network" shall have the meaning set forth in the
preamble.
1.218 "WilTel Network" shall mean (a) the fiber owned or leased by WilTel
and (b) the fiber optic digital telecommunications transmission
system, switching infrastructure, network management systems,
operational support systems, and customer network management systems
owned and operated by WilTel.
1.219 "WilTel Parties" shall mean WilTel and WilTel Local Network.
1.220 "WilTel POP" shall mean a POP that is part of the WilTel Network.
1.221 "WilTel Services" shall mean those Services provided hereunder by
either of the WilTel Parties to SBC.
1.222 "Work" shall mean all Material and Services, collectively, that WilTel
is supplying pursuant to Service Orders placed under this Agreement.
1.223 "Year End Invoices" shall have the meaning set forth in Section 3.1.E.
1.224 Terms Generally. The definitions in this Agreement shall apply equally
to both the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes"
and "including" shall be deemed to be followed by the phrase "without
limitation." The words "herein," "hereof" and "hereunder," and words
of similar import, refer to this Agreement (including the Exhibits,
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Schedules and Appendices) in its entirety and not to any part hereof,
unless the context shall otherwise require. All numbers expressed as a
decimal or a percentage shall have its correlative meaning, as
applicable. All references herein to Articles, Sections, Exhibits,
Appendices and Schedules shall be deemed references to Articles and
Sections of, and Exhibits, Appendices and Schedules to this Agreement,
unless the context shall otherwise require and are part of this
Agreement and incorporated herein by reference. Unless the context
shall otherwise require, any references to any other agreement or
other instrument, statute or regulation are references to it as
amended and supplemented from time to time (and, in the case of a
statute or regulation, to any corresponding provisions of successor
statutes or regulations).
ARTICLE 2. WILTEL SERVICES
2.1 Services Provided by WilTel. WilTel will provide the following
Services to SBC on the terms and subject to the conditions, including
prices, set forth in this Agreement, including the applicable
Schedules, and pursuant to the Specifications and service levels
described in the applicable Schedules. Subject to the provisions of
this Agreement, WilTel shall be obligated to provide the WilTel
Services only to the extent Ordered by SBC pursuant to Article 4
hereof.
A. Transport Services. WilTel will provide the following transport
services under Schedules A1 through A6 listed below
(collectively, the "Transport Services").
1. 1+ Voice Service (Schedule A1)
2. Private Line Service (Schedule A2)
3. ATM Service (Schedule A3)
4. Frame Relay Service (Schedule A4)
5. International Voice Service (Schedule A5)
6. International Private Line Service (Schedule A6)
B. Local Services. WilTel will continue to provide the Local
Services that it provides as of the Effective Date on the terms
and conditions, including prices, as set forth in Schedule A10.
WilTel shall have no obligation to provide any additional or new
Local Services to SBC after the Effective Date; however, if
WilTel chooses to provide any such additional or new Local
Services to SBC, the pricing for such additional or new Local
Services shall be mutually agreed by the Parties and otherwise
governed by this Agreement.
C. Off-Net Services. WilTel will continue to provide the Off-Net
Services that it provides to SBC on the Effective Date on the
terms and conditions set forth in this Agreement. During the
First Purchase Period, WilTel, if requested by SBC, will provide
SBC any and all New Off-Net Services as may be requested by SBC
as governed by this Agreement. Except as provided above, and
except pursuant to Section 2.1.A.5, WilTel shall have no
obligation to provide any New Off-Net Services to SBC after the
end of the First Purchase Period; however, if WilTel chooses to
provide any such New Off-Net Services to SBC, such New Off-Net
Services shall be governed by this Agreement. The prices for
Off-Net Services shall be as set forth in Section 8.1.B and
8.1.D. WilTel shall use commercially reasonable efforts to obtain
Services that are consistent with SBC's requirements and to
obtain all Services on the most favorable terms to SBC that are
then available to WilTel.
D. Collocation Services. WilTel will provide Collocation Service on
the terms and conditions and at the locations set forth in
Schedule A11 and Appendix D. SBC shall complete a mutually agreed
upon Collocation Service Order for each Collocation Service.
E. Ancillary and Maintenance Services. WilTel will provide other
services, including maintenance, on the terms and conditions set
forth in Schedule A12 ("Ancillary Services") and subject to
Section 8.1.B.
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2.2 Tariffs.
A. Intrastate Service will be provided pursuant to tariff ("Tariff")
only where required. In such event, an interstate adjustment may
be applied based on intrastate usage, as mutually agreed by the
Parties. The interstate adjustment for a given month shall not
exceed interstate billing for such month.
B. SBC shall pay all applicable Tariff charges including, but not
limited to, fixed charges, feature charges, access facility
charges, and installation and other non-recurring charges.
Additionally, SBC will pay, in accordance with applicable
Tariffs, any taxes, levies, surcharges, or other costs that
WilTel is obligated to pay to any governmental entity or other
Third Party (including SBC ILECs), provided that (i) such
obligation is imposed by Law, and (ii) such obligation arises out
of the use of Services provided under this Agreement.
C. In the event WilTel withdraws its filed Tariffs, the Tariff terms
and conditions in effect on the date of such withdrawal will
continue to apply to this Agreement. After withdrawal of the
applicable Tariffs, the terms of this Agreement will control over
any inconsistent provision in the former Tariffs, except to the
extent otherwise legally required. Tariffs not withdrawn shall
continue to have the same force and effect.
2.3 General Provisions.
------------------
A. Non-Interference. SBC shall not use nor permit others to use any
Services in a manner that could interfere with services provided
by WilTel to others or that could harm the facilities of WilTel
or others.
B. Operations Support Systems. WilTel will provide the OSS provided
in Schedule C and Schedule D to manage, operate, and maintain the
telecommunications facilities and associated services
contemplated by this Agreement.
C. Availability. Except as otherwise expressly set forth in this
Agreement, all Services are subject to Availability.
D. Physical Diversity. WilTel will provide On-Net Physical Diversity
for the On-Net Transport Services where requested by SBC, if
provision of On-Net Physical Diversity is feasible. If SBC
requests On-Net Physical Diversity for a Transport Service,
WilTel will promptly provide SBC a reasonably detailed statement
of the price which WilTel, at its sole discretion, proposes to
charge SBC to provide such On-Net Physical Diversity. If SBC
agrees to the price proposed by WilTel, WilTel shall provide such
On-Net Physical Diversity.
E. Backhaul. With respect to any On-Net Transport Service which
requires equipment not available in a particular WilTel POP,
WilTel will provide backhaul transport from the POP where the
required equipment is not available to the nearest WilTel POP
containing the required equipment [***]. Service beyond the POP
with the required equipment is subject to the regular rates and
charges otherwise set forth herein.
F. Specifications for Transport Services. WilTel's On-Net Transport
Services shall meet the technical Specifications and service
levels set forth in the applicable Schedules. WilTel shall comply
with the current technical publication for the End-User Services
in effect as of the time of issuance of Firm Price Quote or
ASR/Service Order. WilTel will use reasonable efforts to comply
with any amendments to such technical publications issued after
the Firm Price Quote or ASR/Service Order is issued provided
that, if such compliance would increase WilTel's cost to provide
the On-Net Transport Services provided pursuant to this
Agreement, WilTel shall not be required to so comply absent an
agreed upon increase in the charges for such On-Net Transport
Services.
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G. Preferred Provider. WilTel is hereby designated a preferred
provider to SBC for diversity interexchange Services and other
interexchange Services not provided on SBC's network (including,
after its acquisition of AT&T, AT&T's network) during the Term of
this Agreement; provided, however, that notwithstanding the
foregoing, SBC shall have no obligation pursuant to this Section
2.3.G. to purchase any particular Service from WilTel, nor shall
WilTel at any time have any claim of any nature against SBC
pursuant to this Section 2.3.G.
H. Certain Service Interruptions. For the purpose of the Service
Assurance Metrics and the SLAs in Schedules A1 through A6, WilTel
shall not be responsible for Service interruptions that are (a)
caused by the negligence or willful misconduct of SBC, its
Affiliates or SBC's Customer or others authorized to use the
Services by SBC; (b) caused by the failure of Off-Net Services
not provisioned by WilTel as part of a 1+ Voice Service; (c)
caused by Planned Maintenance where SBC was previously notified
of such Planned Maintenance in accordance with Section C of
Schedule D, if and only to the extent that the interruption was
within the prearranged time for the Planned Maintenance; or (d)
the result of a Force Majeure Event or a Legal or Regulatory
Event.
I. Past Practices. With respect to operational detail and data
collection, measurement and reporting, except as otherwise
expressly set forth in this Agreement, the Parties intend to
implement this Agreement consistent with the Parties' past
practices.
J. Service Level Objectives. The Parties agree that the failure to
meet any specific SLO set forth in Schedules A1 through A6 shall
not be deemed in and of itself to be a default under this
Agreement.
ARTICLE 3. SPECIAL PROVISIONS GOVERNING WILTEL SERVICES
3.1 Service Purchase Commitment.
---------------------------
A. Purchase Commitment Provisions.
1. Purchase Commitment. Subject to the credits provided in
Section 3.1.A, Section 3.1.B, Section 3.1.F and Section
3.1.G, SBC and its Affiliates shall purchase from WilTel and
pay in accordance with this Section 3.1 for at least (i)
$600,000,000 of Included Services during the period
beginning January 1, 2005 and ending December 31, 2007 (such
period, the "First Purchase Period") and (ii) $75,000,000 of
Included Services during the period beginning January 1,
2008 and ending December 31, 2009 (such period, the "Second
Purchase Period") (collectively, the "Purchase Commitment").
2. Included Services. "Included Services" shall mean (a) all
Services provided by WilTel to SBC under this Agreement that
are not Excluded Services (as hereinafter defined); (b) all
services provided by WilTel to SBC under the Wholesale
Services Agreement that are not Excluded Services; and (c)
with respect to the portion of the First Purchase Period
that is prior to the Effective Date, all services purchased
by SBC and its Affiliates pursuant to any Alliance Agreement
that (i) with respect to the period from January 1, 2005
through and including April 30, 2005, are set forth on
Schedule A8 as "Included Services" or (ii) with respect to
the period from May 1, 2005 through and including the
Effective Date, are not Excluded Services. In addition,
after the consummation of any business combination involving
WilTel with another carrier, "Included Services" shall
include all Off-Net Services provided to SBC by WilTel
through such other carrier. Notwithstanding the immediately
preceding sentence, in no event shall Included Services
include any services other than Included Services purchased
from WilTel under this Agreement and Included Services shall
exclude any services purchased directly by SBC under any
agreement with another carrier with whom WilTel may combine.
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Schedule A8 sets forth all Included Services and all
Excluded Services purchased by SBC and its Affiliates from
WilTel during the period from January 1, 2005 through and
including April 30, 2005 in accordance with the terms of
this Agreement. The Parties agree that the aggregate amount
of Included Services purchased by SBC and its Affiliates
during the period from January 1, 2005 through and including
April 30, 2005 is $98,819,657, and that $91,572,946 of such
amount has been paid to WilTel on or prior to the Effective
Date and the Purchase Commitment for the First Purchase
Period is hereby reduced by such $91,572,946 previously paid
to WilTel.
3. Excluded Services. "Excluded Services" under this Agreement
and the Wholesale Services Agreement shall mean those
Services provided by WilTel to SBC on a Pass Through Basis
in compliance with this Agreement and such other Services
purchased by SBC from WilTel for which the entire amount
paid to WilTel by SBC was paid by WilTel to a Third Party or
an SBC Affiliate consistent with the allocation methodology
in effect on February 9, 2005 and used in the preparation of
Schedule A8, or as otherwise agreed to in writing by the
Parties. To the extent that a Service provided hereunder
consists of both Included Services and Excluded Services
components (i.e., an Off-Net Service provided on a Pass
Through Basis with a ▇▇▇▇-up or profit margin to WilTel)
consistent with Schedule A8 or as otherwise agreed to in
writing by the Parties, the amount of the Pass Through Basis
component invoiced for such Service shall be deemed an
Excluded Service and the amount of the ▇▇▇▇-up or profit
margin retained by WilTel and invoiced as such for such
Service shall be deemed an Included Service. For the
avoidance of any doubt, no payment in respect of Excluded
Services shall count toward the Purchase Commitment.
4. Certification. Each month during the Term until the Purchase
Commitment is fully utilized, WilTel shall deliver a
certificate signed by its senior finance officer (as of the
Effective Date, WilTel's Senior Vice President of Finance)
certifying that, to such officer's knowledge after diligent
inquiry, the calculation of Included Services and Excluded
Services set forth in the monthly accounting required to be
delivered in accordance with Section 3.1.D (x) is true and
correct, (y) has been done in accordance with the terms of
this Agreement and the methodologies for pricing services in
effect as of February 9, 2005 or as otherwise mutually
agreed by the Parties in writing and (z) that the amount
reflected as Excluded Services consists solely of amounts
charged on a Pass Through Basis or otherwise paid by WilTel
directly to Third Parties or SBC Affiliates in accordance
with the definition of Excluded Services and in compliance
with Section 8.1.D and Schedule A8. Schedule A8 hereto
includes the form of such officer's certificate which shall
be delivered to SBC together with the monthly accounting
deliveries to be made pursuant to Section 3.1.D.
5. Audit. In furtherance of the foregoing, during the First
Purchase Period, SBC shall have the right to conduct
periodic reviews of WilTel's books and records (including
books and records relating to original invoices, bills and
payments to WilTel from Third Parties or SBC Affiliates and
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the allocation of amounts to SBC) to verify to SBC's
reasonable satisfaction that the amounts of such payments by
SBC for Excluded Services do not exceed WilTel's actual or
properly allocated costs to such Third Parties or SBC
Affiliates for such Excluded Services. In such periodic
reviews, SBC may review each of the following categories no
more than once per year: (a) access/egress-variable costs;
(b) access/egress-fixed costs; (c) IXC-Off-Net; and (d)
Local Access - Off-Net; with such reviews to be at the time
and in the manner mutually agreed to between SBC and WilTel.
Any such periodic review shall be (i) at SBC's sole cost and
expense, (ii) performed by SBC personnel, (iii) limited in
scope to determining whether amounts have been properly
identified and calculated as Excluded Services, and for no
other purpose, and (iv) designed specifically to achieve
such purposes using sampling and other time/cost saving
techniques as agreed upon by WilTel with an objective to
limit disruption of WilTel's business. Additionally, during
the First Purchase Period and to the extent SBC does not
gain reasonable satisfaction though these periodic reviews,
SBC shall have the right pursuant to this Section 3.1.A.5
from time to time (but no more frequently than once per
month), as determined by SBC, to audit WilTel's books and
records (including books and records relating to original
invoices, bills and payments to WilTel from Third Parties or
SBC Affiliates and the allocation of amounts to SBC) to
verify to SBC's reasonable satisfaction that the amounts of
such payments by SBC for Excluded Services do not exceed
WilTel's actual or properly allocated costs to such Third
Parties or SBC Affiliates for such Excluded Services. Any
such audit pursuant to this Section 3.1.A.5 shall be (1) at
SBC's sole cost and expense, (2) performed by a Third Party
auditor selected by SBC and reasonably satisfactory to
WilTel, (3) limited in scope to determining whether amounts
have been properly identified and calculated as Excluded
Services, and for no other purpose, and (4) reasonably
designed to achieve such purposes (using sampling and other
time/cost saving techniques where appropriate) with an
objective to limit disruption of WilTel's business. In
furtherance of the foregoing, WilTel shall retain such
records and reasonable billing detail for disputed items
until such dispute has been fully and finally resolved.
WilTel shall have the right to review the results of any
such audit performed on behalf of SBC. Upon satisfaction in
full of the Purchase Commitment and the other provisions of
this Section 3.1, such audit rights pursuant to this Section
3.1.A.5 shall terminate.
B. Credit Against Purchase Commitment. Notwithstanding the
foregoing, during each month in calendar year 2005 beginning with
the Effective Date, SBC shall be entitled to a monthly credit
against any payment that it would otherwise have to make for any
services purchased from WilTel pursuant to this Agreement, the
Wholesale Services Agreement or any Alliance Agreement in
calendar year 2005 in an amount equal to $18,000,000 credited in
five equal monthly installments commencing with the invoice for
Services rendered in the month of August 2005.
C. Payment Upon Expiration of Purchase Commitment Periods. In the
event that SBC fails to fulfill the applicable portion of the
Purchase Commitment during the First Purchase Period or the
Second Purchase Period (each, a "Purchase Commitment Period"),
SBC shall pay WilTel the unfulfilled amount (after accounting for
the payments and credits referenced in Section 3.1.A, Section
3.1.B, Section 3.1.F and Section 3.1.G) of the applicable portion
of the Purchase Commitment for such Purchase Commitment Period
(such amount being a "Purchase Commitment Payment") in accordance
with Section 3.1.E. Any Purchase Commitment Payment shall
constitute a prepayment for Included Services to be provided
during the remaining duration of the Term and, to the extent that
any Purchase Commitment Payment or any portion thereof remains
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unused at the end of the Term, all such remaining amounts shall
constitute a prepayment for Included Services to be provided to
SBC by WilTel thereafter pursuant to the terms of this Agreement.
Amounts owed by SBC in respect of Included Services provided by
WilTel after a Purchase Commitment Payment has been made shall be
credited dollar-for-dollar against such Purchase Commitment
Payment until its balance has been completely offset by amounts
credited in respect of Included Services. After all Purchase
Commitment Payments, if any, have been completely offset in
accordance with this Agreement, SBC shall resume paying for
Included Services provided by WilTel in accordance with this
Agreement. If upon the expiration of this Agreement any Purchase
Commitment Payment (or portion thereof) has not been completely
offset, SBC shall be entitled to receive Included Services from
WilTel that would constitute "Included Services" under the terms
of this Agreement sufficient to offset the remaining balance
thereof, and SBC shall be entitled to apply such remaining
balance in payment for such Included Services without limitation,
irrespective of when such Included Services may be provided.
Following the expiration of the Term, SBC shall attempt in good
faith to purchase Services as promptly as reasonably practicable
to utilize any remaining balance of the Purchase Commitment
Payment. Following the expiration of the Term, WilTel shall have
no obligation to continue to provide any specific Services for
the benefit of SBC. In the event that SBC purchases Included
Services during the First Purchase Period in an amount that
exceeds the applicable portion of the Purchase Commitment for the
First Purchase Period, then the applicable portion of the
Purchase Commitment for the Second Purchase Period shall be
reduced by the amount of such excess.
D. Monthly and Quarterly Accounting. Except pursuant to the credits
provided in Section 3.1.A, Section 3.1.B, Section 3.1.F and
Section 3.1.G, the outstanding balance of the Purchase Commitment
shall not be reduced unless and until SBC remits payment to
WilTel for the Included Services purchased, at which time the
outstanding balance of the Purchase Commitment shall be reduced
by the amount of such payment. Once every three (3) months, the
Parties shall review and agree upon the amount of the outstanding
balance of the Purchase Commitment (or, if applicable, the unused
balance of any Purchase Commitment Payment). To assist in
tracking performance under the Purchase Commitment, on or before
the fifteenth (15th) Day of each month during the Term, until the
Parties agree that the Purchase Commitment is fully satisfied
(or, if applicable, that each Purchase Commitment Payment has
been completely offset as provided in Section 3.1.C), WilTel
shall initially calculate, the amount of Included Services, and
report to SBC such calculation, of the outstanding balance of the
Purchase Commitment (and, if applicable, any Purchase Commitment
Payment) as of the first (1st) Business Day of such month, which
statement shall include the amount by which the Purchase
Commitment would be reduced upon SBC's payment in respect of the
Included Services for the previous month. SBC shall have the
right to review and dispute any such initial calculation for a
period of fifteen (15) Days after SBC's receipt of such initial
calculation.
E. Purchase Commitment Payments. No later than thirty (30) Days
after the termination of a Purchase Commitment Period, WilTel
shall prepare and deliver to SBC a draft of the final accounting
of SBC's purchases during such Purchase Commitment Period of
Included Services, including all invoices for Included Services
provided through the end of such Purchase Commitment Period (the
"Year End Invoices") and, if applicable, an invoice for the
amount of the applicable Purchase Commitment Payment. The Parties
shall jointly review WilTel's calculation of the amount of such
purchases and the remaining balance, if any, of the applicable
portion of the Purchase Commitment as specified on such invoice.
If WilTel delivers an invoice to SBC for such Purchase Commitment
Payment, then no later than thirty (30) Days after SBC's receipt
of such invoice (together with such final accounting and such
Year End Invoices), SBC shall pay WilTel the portion of such
Purchase Commitment Payment that exceeds the amount of all unpaid
20 of 53
Year End Invoices for such Purchase Commitment Period and that is
undisputed, provided that any dispute with respect to the
calculation of such Purchase Commitment Payment shall be limited
to whether Services included in the calculation of such Purchase
Commitment Payment constitute Included Services as opposed to
Excluded Services. Upon resolution of any such dispute, SBC shall
promptly pay WilTel any agreed upon amount within thirty (30)
Days after the resolution of such dispute. The amount of any
unpaid Year End Invoices shall be paid by SBC as provided in
Article 11 hereunder, to the extent deducted from a Purchase
Commitment Payment, and appropriate adjustments shall be made to
the extent the resolution of any disputes result in a reduction
of the invoiced amounts.
F. Additional Credits.
1. Unavailability or Termination of Included Services. During
the Term, in the event that WilTel, for any reason
whatsoever, ceases to provide or terminates any Included
Service that WilTel is provisioning to SBC of the type that
was being provided to SBC by WilTel as of February 9, 2005,
the Purchase Commitment shall be reduced as set forth below.
The amount by which the Purchase Commitment shall be reduced
shall be equal to the product of (i) the aggregate amount
spent by SBC for such Included Service as accurately
reflected on the monthly invoice representing full month of
usage delivered to SBC immediately preceding WilTel's Notice
to SBC pursuant to this Section 3.1.F.1 that it will not
provide such Included Service or that it has terminated such
Included Service, as the case may be (which Notice WilTel
shall provide SBC promptly, and in any event within ten (10)
Days after any such termination or cessation of any Included
Service), and (ii) the number of calendar months remaining
until the end of the Term. For the avoidance of any doubt,
(a) if SBC terminates a Service as a result of a Chronic
Outage, the applicable credit shall be determined pursuant
to Section 3.1.F.2 and not this Section 3.1.F.1 and (b) if
SBC's traffic for 1+ Voice Service exceeds the applicable
maximum traffic volume set forth on Appendix G for such 1+
Voice Service, no credit pursuant to this Section 3.1.F.1
shall be available if WilTel is unable to provide 1+ Voice
Service above the applicable maximum traffic volume set
forth on Appendix G. During the First Purchase Period, if
SBC elects to receive a credit pursuant to this Section
3.1.F.1 for such a termination or cessation of an Included
Service, such termination or cessation shall not constitute
a default pursuant to Section 13.1.
2. Services Terminated by SBC. SBC shall receive a credit
against the Purchase Commitment for all Services SBC
terminates as a result of a Chronic Outage in respect of
such Service. If SBC so terminates any Service other than a
1+ Voice Service (and the ability to terminate is not
disputed by WilTel or SBC prevails in any such dispute), the
amount of the associated credit against the Purchase
Commitment shall be equal to the amount that would have been
payable for all such terminated Circuits: (i) during the
First Purchase Period, for a one (1) year period after the
date of such termination or (ii) during the Second Purchase
Period, for a six (6) month period after the date of such
termination. If SBC so terminates a 1+ Voice Service as a
result of a Chronic Outage for 1+ Voice Services (and the
ability to terminate is not disputed by WilTel or SBC
prevails in any such dispute), the amount of the associated
credit against the Purchase Commitment shall be equal to the
amount that would have been charged for actual MOUs of 1+
Voice Services, to the extent such amount would have been
included as an Included Service, for the relevant month(s);
provided, however, that in no event shall the aggregate
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credit to be applied pursuant to this sentence in respect of
Chronic Outages for 1+ Voice Services exceed $20,000,000.
Nothing in this Section 3.1.F.2 is intended to limit any
other rights or remedies that may be available to SBC under
this Agreement, including the right to terminate this
Agreement under Section 7.2 hereof. The Parties agree to
work together in good faith in an effort not to exceed the
applicable maximum traffic volume per Circuit set forth on
Appendix G.
3. Credits and Offsets. If SBC receives any credits or offsets
against any amounts otherwise payable by SBC pursuant to
this Agreement for Included Services (including any credits
or offsets pursuant to any SLAs or remedies set forth in any
Schedule), the amount of all such credits and offsets shall
be deemed to have been paid by SBC for purposes of
calculating the outstanding balance of the Purchase
Commitment (and, if any Purchase Commitment Payment has been
made, such amount shall increase the remaining balance of
the Purchase Commitment Payment).
4. New or Additional 1+ Voice Services. If, at any time during
the First Purchase Period, (a) SBC requests any new or
additional On-Net 1+ Voice Service, (b) such requested
Service would not cause traffic to exceed the applicable
maximum traffic volume set forth in Appendix G, (c) WilTel
fails to offer and provide such Service, and (d) SBC obtains
or provisions substitute services (which, at SBC's
discretion, may be obtained from any provider including SBC,
an Affiliate of SBC or any Third Party), then the Purchase
Commitment shall be reduced each month until the earlier of
the end of the First Purchase Period or term of the
requested Service by the aggregate amount equal to the
product of (x) the number of MOUs so requested by SBC and
for which SBC obtained substitute service (up to the
applicable maximum traffic volume set forth in Appendix G)
and (y) the price per MOU that would have been payable for
such Service if it had been provided by WilTel pursuant to
this Agreement. For each month for which SBC claims a credit
hereunder, SBC shall deliver a certificate signed by the
Vice President - Corporate Finance of SBC certifying to such
officer's knowledge (1) the number of MOUs which SBC was
required to obtain from a provider other than WilTel as a
result of WilTel's failure to offer and provide new or
additional On-Net 1+ Voice Services under this provision and
(2) that the provision of such MOUs by WilTel would not have
caused SBC traffic to have exceeded the applicable maximum
traffic volume for such month as set forth in Appendix G.
For the avoidance of doubt, a failure to provide Services
(A) as a result of normal outages, (B) in a manner
consistent with the timeliness of past provisioning
performance or (C) as a result of the failure, despite
WilTel's commercially reasonable efforts, of a Third Party
(including an SBC ILEC) to perform, shall, in each case, not
constitute a failure to offer and provide Services
hereunder.
5. New or Additional DS-1/DS-3 Services. If, at any time during
the First Purchase Period, SBC requests any new or
additional On-Net DS-1 Service or On-Net DS-3 Service,
irrespective of whether it is provisioned as part of an ATM
Service, Frame Relay Service or Private Line Service, in
accordance with the terms of this Agreement and WilTel fails
to offer and provide such Service, and SBC obtains or
provisions substitute services (which, at SBC's discretion,
may be obtained from any provider including SBC, an
Affiliate of SBC or any Third Party), then the Purchase
Commitment shall be reduced by the amount equal to the price
that would be payable for such Services pursuant to this
Agreement for the term of the Circuit requested (in the
event that the term of the Circuit extends beyond December
31, 2009, such credit shall only apply until December 31,
2009). For each period for which SBC claims a credit
hereunder, SBC shall deliver a certificate signed by the
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Vice President - Corporate Finance of SBC certifying that
SBC actually obtained Services that WilTel failed to offer
and provide hereunder. For the avoidance of doubt, a failure
to provide Services as a result of the failure, despite
WilTel's commercially reasonable efforts, of a Third Party
(including an SBC ILEC) to perform, shall not constitute a
failure to offer and provide Services hereunder.
6. New or Additional OC-n Services. All On-Net OC-n Services
requested under this Section 3.1.F.6 shall be subject to a
term of at least one (1) year. If SBC requests a Service
that requires an On-Net OC-n Circuit in accordance with the
terms of this Agreement (including provisioning intervals
sufficient to enable WilTel to perform hereunder), WilTel
shall use commercially reasonable efforts consistent with
past practice to reconfigure its capacity to accommodate the
requested Service, provided that WilTel shall not be
required to expend any new capital in connection with such
requested Service or to take any action which is reasonably
likely to disrupt the WilTel Network. If SBC shall request
an On-Net OC-n Service, WilTel shall promptly respond to any
such Service request with a price quote on an Individual
Case Basis. This price quote shall reasonably reflect past
practices for such types of price quotes and include any
additional capital requirements WilTel may have in
provisioning such requested Service. If SBC elects, at SBC's
sole discretion, not to accept such price quote, then WilTel
shall have no obligation to provision such requested
Service. If SBC elects to accept such price quote, WilTel
shall provide such requested Service in accordance with such
request, provided that reasonably sufficient time has been
given to allow WilTel to install such requested Service. If
WilTel has available capacity that can be reconfigured and
WilTel fails to take commercially reasonable efforts to
reconfigure as described above, SBC shall be entitled to a
reduction in the Purchase Commitment calculated in the same
manner as set forth in the first sentence of Section
3.1.F.5. For each period for which SBC claims a credit
hereunder, SBC shall deliver a certificate signed by the
Vice President - Corporate Finance of SBC certifying that
SBC actually obtained Services that WilTel failed to offer
and provide hereunder. For the avoidance of doubt, a failure
to provide Services as a result of the failure, despite
WilTel's commercially reasonable efforts, of a Third Party
(including an SBC ILEC) to perform, shall not constitute a
failure to offer and provide Services hereunder.
G. Purchase or Lease of Assets. At any time after the Effective Date
and during the Term, SBC may submit a written request to purchase
or lease specific WilTel assets (including IRUs, fiber routes,
interests in real property, switches, switch infrastructure,
network management systems, operational support systems, customer
network management systems and network facilities) (each a
"Requested Asset"). WilTel will consider the sale or lease of any
Requested Asset in good faith and within thirty (30) Days of
receipt of any such request, and if WilTel is willing to sell or
lease such Requested Asset, WilTel will present a written offer
to SBC containing a price for each Requested Asset. If SBC agrees
to such price, the Parties will work diligently and in good faith
to negotiate terms for WilTel to sell or lease each Requested
Asset to SBC and WilTel will reasonably provide due diligence
information as requested by SBC relating to the Requested Assets.
If the Parties reach agreement and close a transaction
transferring Requested Assets to SBC (or one of its Affiliates),
the aggregate consideration paid (including the mutually agreed
fair market value of any non-cash consideration paid) shall be
credited, dollar for dollar, against the Purchase Commitment.
Notwithstanding anything to the contrary contained herein, WilTel
shall not be obligated to sell or lease any assets requested by
SBC to be sold hereunder unless WilTel agrees, in its sole
discretion, to sell or lease such assets to SBC.
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3.2 Quality of Service.
------------------
A. For each of the following periods (each a "Quality of Service
Period"): (i) the period beginning on January 1, 2006 and ending
on December 31, 2006 (the "First QoS Period") and (ii) the period
beginning on January 1, 2007 and ending on December 31, 2007 (the
"Second QoS Period"), subject to any credit pursuant to Section
3.2.F:
1. Service Assurance. If WilTel achieves the Minimum Service
Assurance Standard for the requisite period, SBC shall pay
to WilTel up to $12,500,008 with respect to the First QoS
Period and up to $12,500,008 with respect to the Second QoS
Period (each such payment a "Service Assurance Bonus"), as
follows:
i. In each calendar month in the First QoS Period or the
Second QoS Period, if WilTel achieves the Minimum
Service Assurance Standard for such month, SBC shall
pay to WilTel the applicable Service Assurance Monthly
Bonus. For purposes hereof, "Service Assurance Monthly
Bonus" shall mean, for any month during the First QoS
Period or the Second QoS Period, [***].
ii. In each calendar month in the applicable Quality of
Service Period, if WilTel fails to achieve the Minimum
Service Assurance Standard, SBC shall not be required
to pay the Service Assurance Monthly Bonus for such
month.
iii. At the end of each Quality of Service Period, if WilTel
has achieved the Minimum Service Assurance Standard in
[***] in such Quality of Service Period, SBC shall pay
to WilTel the Service Assurance End of Year Bonus. For
purposes hereof, "Service Assurance End of Year Bonus"
shall mean (x) in the First QoS Period, the aggregate
amount of (i) [***] and (ii) any Service Assurance
Monthly Bonus amounts not paid by SBC during the First
QoS Period and (y) in the Second QoS Period, the
aggregate amount of (i) [***] and (ii) any Service
Assurance Monthly Bonus amounts not paid by SBC during
the Second QoS Period. Notwithstanding anything to the
contrary herein, the Service Assurance End of Year
Bonus for the Second QoS Period shall not include any
Service Assurance Monthly Bonus amounts not paid by SBC
due to WilTel's failure to meet the Minimum Service
Assurance Standard in [***] of the Second QoS Period.
2. Service Delivery. If WilTel achieves the Minimum Service
Delivery Standard for the requisite period, SBC shall pay to
WilTel up to $3,750,000 with respect to the First QoS Period
(such payment a "Service Delivery Bonus") as follows:
i. In each calendar month in the First QoS Period, if
WilTel achieves the Minimum Service Delivery Standard
for such month, SBC shall pay to WilTel the Service
Delivery Monthly Bonus. For purposes hereof, "Service
Delivery Monthly Bonus" shall mean [***].
ii. In each calendar month in the First QoS Period, if
WilTel fails to achieve the Minimum Service Delivery
Standard, SBC shall not be required to pay the Service
Delivery Monthly Bonus for such month.
iii. At the end of the First QoS Period, if WilTel has
achieved the Minimum Service Delivery Standard in [***]
in the First QoS Period, SBC shall pay to WilTel the
Service Delivery End of Year Bonus. For purposes
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hereof, "Service Delivery End of Year Bonus" shall mean
the aggregate amount of (i) [***] and (ii) any Service
Delivery Monthly Bonus amount not paid by SBC during
the First QoS Period.
3. Migration. If WilTel achieves the Minimum Migration Standard
for the requisite period, SBC shall pay to WilTel up to
$8,749,996 with respect to the First QoS Period and up to
$12,500,008 with respect to the Second QoS Period (each such
payment a "Migration Bonus") as follows:
i. In each calendar month in the First QoS Period or the
Second QoS Period, if WilTel achieves the Minimum
Migration Standard for such month, SBC shall pay to
WilTel the applicable Migration Monthly Bonus. For
purposes hereof, "Migration Monthly Bonus" shall mean
(x) for any month during the First QoS Period, [***],
and (y) for any month during the Second QoS Period,
[***].
ii. In each calendar month in the applicable Quality of
Service Period, if WilTel fails to achieve the Minimum
Migration Standard, SBC shall not be required to pay
the Migration Monthly Bonus for such month.
iii. At the end of each Quality of Service Period, if WilTel
has achieved the Minimum Migration Standard in [***] in
such Quality of Service Period, SBC shall pay to WilTel
the Migration End of Year Bonus. For purposes hereof,
"Migration End of Year Bonus" shall mean (x) in the
First QoS Period, the aggregate amount of (i) [***] and
(ii) any Migration Monthly Bonus amounts not paid by
SBC during the First QoS Period and (y) in the Second
QoS Period, the aggregate amount of (i) [***] and (ii)
any Migration Monthly Bonus amounts not paid by SBC
during the Second QoS Period. Notwithstanding anything
to the contrary herein, the Migration End of Year Bonus
for the Second QoS Period shall not include any
Migration Monthly Bonus amounts not paid by SBC due to
WilTel's failure to meet the Minimum Migration Standard
in [***] of the Second QoS Period.
B. Certification. For each month in each Quality of Service Period,
WilTel shall submit to SBC, no later than fifteen (15) Days after
the end of such month, a certificate (together with reasonably
sufficient information, consistent with current practices between
the Parties as of the Effective Date) indicating whether WilTel
has or has not achieved the Minimum Service Assurance Standard,
Minimum Service Delivery Standard and the Minimum Migration
Standard, as applicable, for such month. SBC shall have fifteen
(15) Days from the receipt of such certificate and information to
dispute the accuracy of the certificate or to pay the Service
Assurance Monthly Bonus, Service Delivery Monthly Bonus and the
Migration Monthly Bonus, as applicable, to the extent required
pursuant to Section 3.2.A. In the event that SBC does not dispute
the accuracy of such certificate (unless such certificate
indicates that WilTel has not achieved the Minimum Service
Assurance Standard, Minimum Service Delivery Standard or the
Minimum Migration Standard, as applicable) within such fifteen
(15) Day period from the receipt of such certificate, WilTel
shall be deemed to have achieved the Minimum Service Assurance
Standard, Minimum Service Delivery Standard and the Minimum
Migration Standard, as applicable, for such month. SBC shall
promptly pay any Service Assurance Monthly Bonus, Service
Delivery Monthly Bonus and Migration Monthly Bonus payments, as
applicable, together with any End of Year Bonus, if applicable,
in each case that is due and payable upon the resolution of any
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disputes under this Section 3.2.B in WilTel's favor. For the
avoidance of doubt, if for any period a particular Service Metric
is no longer applicable for any reason set forth in this
Agreement, including (i) due to the decrease in MOU below the
applicable thresholds as set forth in Appendix B, (ii) because
SBC traffic exceeds the applicable maximum traffic volume set
forth in Appendix G or (iii) because SBC fails to fund capital
expenditures required to be funded pursuant to Section 3.3, such
Service Metric shall be deemed to have been fulfilled with
respect to such period for the applicable purposes to the extent
specified hereunder in accordance with Appendix B or the relevant
provisions of this Agreement.
C. No Waiver. For the avoidance of doubt, the determination that a
Service Assurance Bonus, Service Delivery Bonus or Migration
Bonus is due and payable shall not constitute a waiver of any
claim for breach or default related to WilTel's failure to meet
any particular Specification, service level or standard set forth
or referenced in this Agreement.
D. Known Changes. SBC shall use reasonable efforts to advise WilTel
of major projects or other known changes in SBC's business that
would significantly change SBC's demand for Services.
E. Consultation. In the event that WilTel fails to satisfy any
Minimum Quality of Service Standard in any calendar month, the
Parties shall promptly consult regarding the reasons for the
failure to satisfy such Minimum Quality of Service Standard, and
jointly discuss how WilTel will improve its performance to
satisfy such Minimum Quality of Service Standard in the future.
F. Additional Personnel Resources. Notwithstanding the foregoing, in
the event that WilTel fails to fully satisfy the Minimum Service
Assurance Standard or Minimum Service Delivery Standard [***], in
addition to any and all remedies available to SBC in or in
connection with this Agreement, the Parties shall promptly
consult with each other in order to determine whether additional
personnel resources could help WilTel improve its ability to
satisfy the applicable Minimum Quality of Service Standard(s). If
the Parties, acting in their reasonable discretion, agree that
additional personnel could help improve WilTel's performance,
then SBC shall have the right to use its own resources to remedy
any and all such deficiencies unless and until WilTel has hired
sufficient additional personnel to satisfy the applicable Minimum
Quality of Service Standard(s) and has satisfied the applicable
Minimum Quality of Service Standard(s) for at least one (1)
month. Subject to WilTel's applicable legal and other contractual
confidentiality obligations (which, to the extent any such
obligations require WilTel to restrict SBC's access, shall be
disclosed in reasonable detail to SBC), for a reasonable period
of time, WilTel will grant SBC reasonable access to WilTel's
facilities, systems, equipment, records and network assets, as
necessary to allow SBC personnel to assist in remedying such
deficiencies, and shall cooperate with SBC to remedy the
deficiencies. SBC's exercise of these rights shall not diminish,
alter or waive in any respect WilTel's obligation to satisfy the
Minimum Quality of Service Standards. Notwithstanding the
previous sentence, if WilTel satisfies a Minimum Quality of
Service Standard with respect to which SBC has exercised its
right to provide resources to WilTel under this Section, and as a
result SBC is obligated to pay any portion of a Service Delivery
Bonus or Service Assurance Bonus as provided in Section 3.2.A,
then SBC's expense (including the fully loaded labor cost for any
employees) associated with providing such resources shall be
credited against any such bonus and reduce the amount to be paid
by SBC to WilTel in respect of such bonus. SBC shall provide
WilTel sufficient information to substantiate its calculations of
any such credit. Furthermore, if for [***] WilTel satisfies each
applicable Minimum Quality of Service Standard with respect to
which SBC has exercised its right to provide resources to WilTel
under this Section, then WilTel may request in writing that SBC
cease providing such resources on a date not less than three (3)
Days after the delivery of such written request and SBC shall
withdraw such resources.
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3.3 Voice Network Augmentation.
--------------------------
A. Augmentation. On and promptly after the Effective Date, WilTel
shall use [***] to fund an augmentation of the WilTel Network as
set forth in Appendix G. Appendix G sets forth the maximum
traffic volume levels by MOU by switch for 1+ Voice Service that
can be transported on the WilTel Network on a monthly basis
through the end of the Term. As specified on Appendix G, after
completion of the augmentation of the WilTel Network contemplated
by the first sentence of this Section 3.3.A, the WilTel Network
shall transport an aggregate maximum traffic volume for 1+ Voice
Service of [***] MOUs per month through the end of the Term. In
the event that SBC's traffic exceeds the applicable maximum
traffic volume set forth in Appendix G, then (i) WilTel will use
commercially reasonable efforts to transport all SBC traffic
[***], (ii) WilTel shall be deemed to have met the Service
Assurance Metrics under Section 3.2 for (1) 1+ Voice Service -
Switched switchport availability, (2) 1+ Voice Service - Switched
MTTR, (3) DAL Service monthly network availability (-aggregate)
and (4) DAL Service MTTR, and all SLAs related to 1+ Voice
Service, in each case for each month during which SBC's traffic
exceeds the applicable maximum traffic volume set forth in
Appendix G; and (iii) SBC shall pay for all traffic terminated on
other providers via WATS from WilTel on a Pass Through Basis as
an Excluded Service; provided, however, WilTel's request for
reimbursement for WATS MOUs shall be limited to the number of
MOUs by which SBC's traffic for that month exceeded the
applicable maximum traffic volume set forth in Appendix G. In
addition, in the event that SBC requests that WilTel provide
Services for traffic volumes in excess of the applicable maximum
traffic volume set forth in Appendix G, WilTel agrees to
reasonably cooperate in responding to such request for additional
traffic volumes, provided that WilTel shall not be obligated to
make any additional capital investment, whether or not funded by
SBC.
B. Reimbursement Obligations. SBC shall also reimburse WilTel for
(i) all non-recurring charges charged by an SBC ILEC, where such
non-recurring charges are reasonably incurred by WilTel to carry
additional SBC traffic and (ii) all non-recurring charges,
termination Liabilities and reconfiguration charges charged by
and paid to an SBC LEC from the Effective Date until the end of
the Term, up to an aggregate amount for this clause (ii) not to
exceed [***].
3.4 Transition. The Parties acknowledge and agree that during the Term,
SBC may transition a substantial proportion of the Services that it
currently purchases from WilTel to another provider. The Parties agree
to cooperate in developing and implementing an orderly and efficient
transition. Upon Notice from SBC ("Transition Notice"), the Parties
shall work together in good faith to implement such transition.
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3.5 Other Terms.
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A. Changes in Transport Services Parameters.
1. Disconnection of Services. SBC may disconnect any 1+ Voice
Service with an SOSN prior to the Effective Date on one (1)
Business Day's Notice without any Liability to WilTel,
except as provided under this Section 3.5. SBC may
disconnect any existing non-voice On-Net Transport Service
with an SOSN prior to the Effective Date before the
expiration of the Minimum Term or any renewal term, if
applicable, by giving Notice to WilTel at least thirty (30)
Days in advance of the effective date of disconnect. [***]
All On-Net Services with SOSNs on or subsequent to the
Effective Date shall have a termination Liability equivalent
to the sum of the Monthly Recurring Charges for all months
remaining in the service term, and SBC shall also reimburse
WilTel for any termination liability and/or disconnection
fees incurred with any Off-Net Service. These Off-Net
Services shall be charged on a Pass Through Basis.
i. Notification. WilTel will use commercially reasonable
efforts to notify SBC on a monthly basis of any
Transport Service with a Minimum Term or renewal term
which will expire within the ensuing ninety (90) Days.
If SBC does not give WilTel Notice of its intent to
disconnect or renew such Circuits within such ninety
(90) Day period, WilTel will continue to provide such
Transport Service on a month to month basis at the then
existing rate applicable to such Circuit; provided that
SBC shall bear any increase in the cost of Off-Net
Services associated with such Transport Service.
2. Dedicated Circuit Term. The term associated with each
Dedicated Circuit will be as set forth on the Service Order
(the "Minimum Term"). SBC may order Dedicated Circuits that
have a one (1) year or a three (3) year Minimum Term. If no
term is specified on the Service Order, the Minimum Term
shall be one (1) year.
B. Changes in Service Parameters for Local Services.
1. Disconnection of Local Services. With respect to Local
Services:
i. [***]
ii. SBC may disconnect any Local Service after the
expiration of the Minimum Term on thirty (30) Days'
Notice to WilTel. In such event, SBC's Liability to
WilTel shall be limited to any amounts charged by a
Third Party or SBC Affiliate, which amounts SBC shall
reimburse to WilTel.
C. Application of Certain Payments. Any amounts paid in respect of
termination Liabilities for On-Net Services under Section 3.5.A.1
shall constitute payments for Included Services and shall be
credited against the Purchase Commitment or the Purchase
Commitment Payment. Any amounts paid in respect of termination
Liabilities and/or disconnection fees for Off-Net Services that
arise under Section 3.5.A.1 or any amounts paid in respect of
Liabilities under Section 3.5.B.1 shall not constitute payments
for Included Services and shall in no event be credited against
the Purchase Commitment or the Purchase Commitment Payment.
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3.6 Term of New Services.
--------------------
A. Order Survival. Orders that do not have a specified term shall be
treated as orders subject to a one (1) year minimum term. Except
for non-payment or other material breach by SBC, unless otherwise
agreed to in writing, any Orders placed, but not installed, prior
to the Effective Date shall be invoiced at the monthly prices set
forth in the response to the RFQ or ASR/Service Order and shall
be subject to a one (1) year minimum term when they are placed in
service.
B. Service Survival. Except as expressly provided in this Agreement,
or otherwise agreed to by the Parties in writing, and except for
nonpayment or other material breach by the Party purchasing a
service ("Purchasing Party"), the Party supplying a Service
("Supplying Party"), subject to Section 7.3, if applicable, shall
not disconnect that Service, unless or until the Supplying Party
receives a disconnect order ("Disconnect Order") from the
Purchasing Party.
C. Term Order Survival. Orders which have a specified term are
referred to herein as "Term Orders." Each Term Order shall
commence on the billing commencement date and shall expire at the
end of the term set forth in each Order, unless otherwise agreed
to in writing. For On-Net Services, if the Term Order ends before
the termination of this Agreement, unless otherwise agreed to by
the Parties in writing, or unless WilTel receives a new Term
Order or a Disconnect Order from SBC for such Service, the
Services associated with such Term Order shall convert to a
monthly order at the same monthly prices charged during the term.
For Off-Net Services, WilTel will use commercially reasonable
efforts to notify SBC on a monthly basis of any disconnection or
renewal of any Circuits with a Minimum Term or renewal term which
will expire within ninety (90) Days. If SBC does not give WilTel
Notice of its intent to disconnect or renew such Circuits within
such ninety (90) Day period, WilTel will continue, on a month to
month basis, if Available, or, if not Available, the shortest
term then Available, to provide such Off-Net Services on a Pass
Through Basis. Unless otherwise agreed to by the Parties in
writing, the Services associated with a Term Order that expires
after the termination of this Agreement shall convert on the date
of expiration of such Term Order to a monthly order at the same
prices charged during the term. In such event, SBC's Liability to
WilTel shall be limited to any amounts charged by Third Party
Providers or SBC Affiliates, which amounts SBC shall reimburse to
WilTel.
3.7 Continuation of Existing Services.
---------------------------------
A. Existing Contractual Arrangements for Collocation Service. The
existing contractual arrangements between the Parties or their
respective Affiliates relating to Collocation Service, the
locations and certain terms of which are set forth in Appendix D,
shall continue in full force and effect after the Effective Date
in accordance with the provisions of Schedule A11, subject solely
to the terms and conditions of this Agreement. In the event of
any conflict between the terms of any Collocation Service Order
specified in Appendix D and this Agreement (including Schedule
A11), the Collocation Service Agreement specified in Appendix D
shall prevail.
B. DNA Agreement. SBC shall receive Direct Network Access service
from WilTel in accordance with the service supplement for Direct
Network Access in Annex 1 to Appendix F. In the event of any
conflict between the terms of the DNA Agreement and this
Agreement, the DNA Agreement shall prevail.
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C. Services Generally. [***] On or after January 1, 2008, WilTel may
terminate any Service that is being provided to SBC at such time
so long as WilTel gives SBC [***] prior Notice of such
termination.
3.8 Reconfiguration of Local Access Services Purchased by WilTel. The
Parties anticipate that SBC may substantially decrease its purchase of
Transport Services from WilTel during the Term of this Agreement. If
such a reduction in Transport Services purchased by SBC occurs, WilTel
may choose to reconfigure and reduce its Local Access and Off-Net
purchases. SBC agrees to comply with all reasonable requests made by
WilTel, including by timely providing authorizations, consents and
other documentation, to assist WilTel in moving Local Access and
Off-Net Services to more cost-effective configurations and, if not
detrimental either to SBC or any of its Customers, rearranging SBC's
traffic in support of WilTel's grooming of Local Access and Off-Net
Facilities; provided, however, that to the extent SBC determines that
WilTel's proposed reconfiguration would adversely affect SBC or any of
its Customers, SBC's obligations hereunder shall be limited to using
commercially reasonable efforts to work with WilTel and the affected
Customer(s) to attempt to minimize or eliminate such adverse effect in
a manner consistent with the Parties' past practices. This assistance
may include grooming end-user loops and interoffice transport to new
facilities or channels, support in converting WilTel-purchased
facilities to LEC-owned facilities where SBC and its Affiliates
purchase access directly from the serving Local Exchange Carrier, and
other support that WilTel may reasonably deem necessary to optimize
its purchase of local access services. For the avoidance of doubt, the
provisions of this Section 3.8 shall not allow WilTel to terminate a
Service other than in accordance with Section 3.7.C.
ARTICLE 4. ORDERING AND INSTALLATION OF WILTEL SERVICES
4.1 Affiliate Orders for Services Provided by WilTel. SBC and its
Affiliate SBC Long Distance, LLC, and any other Affiliates of SBC as
mutually agreed by the Parties, together with each of their respective
successors (collectively, the "Approved Affiliates"), may order
Services and/or place Service Orders under this Agreement. WilTel
agrees that any Approved Affiliate (including such Approved
Affiliate's successors) may place Orders with WilTel that incorporate
the terms and conditions of this Agreement, and that the term "SBC"
shall be deemed to refer to an Approved Affiliate when an Approved
Affiliate places an Order with WilTel under this Agreement. SBC shall
remain ultimately responsible for all obligations of such Approved
Affiliate.
4.2 Ordering Process. SBC and any Approved Affiliate may order Services
and/or place Service Orders under this Agreement in accordance with
Schedule C. In addition to any other information required to be
contained therein, each Firm Price Quote shall specify whether the
requested Service will be provisioned On-Net or Off-Net and to the
extent that any Services are being provided Off-Net, the amount of the
applicable ▇▇▇▇-up being charged by WilTel, to the extent permitted
pursuant to Section 8.1.B.
ARTICLE 5. TROUBLE, MAINTENANCE AND REPAIR OF WILTEL SERVICES
5.1 Network Monitoring. WilTel shall provide network monitoring in
accordance with Schedule D.
5.2 Trouble, Maintenance and Repairs. Planned Maintenance, trouble
management and reporting and repairs of the WilTel Network shall be
provided in accordance with Schedule D.
ARTICLE 6. SBC PLATFORM SERVICES
6.1 Platform Services. Subject to Section 6.2, SBC will provide Platform
Services to WilTel on the terms and subject to the conditions,
including prices, set forth in, and pursuant to the Specifications and
as otherwise described in, Schedule B1.
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6.2 Transfer of Platforms to WilTel.
-------------------------------
A. Termination for Non-Use. If WilTel discontinues the use of any
Platform Services or features provided by SBC hereunder for a
period of at least ninety (90) Days, SBC may, upon thirty (30)
Days prior Notice to WilTel, discontinue providing any such
Platform Services or features to WilTel.
B. Additional Platform Services and Features. To the extent that (i)
SBC continues to offer the Platform Services or features which it
has discontinued providing to WilTel pursuant to Section 6.2.A,
upon WilTel's request, SBC will offer to sell such Platform
Services and features to WilTel on the prices and terms set forth
herein, or (ii) SBC has the existing capability to offer
additional Platform Services or features, upon WilTel's request,
SBC will offer to sell such Platform Services and features to
WilTel upon prices and terms as agreed to by the Parties;
PROVIDED THAT ANY SUCH PLATFORM SERVICES OR FEATURES SHALL BE
OFFERED AND TRANSFERRED WITHOUT ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR ANY
SERVICE LEVEL REQUIREMENTS OR ASSURANCES.
C. Transfers of Platform to WilTel Pursuant to Offer by SBC. From
and after [***], SBC may offer to transfer to WilTel, at no
charge, all of its right, title and interest in and to its [***]
as set forth below, which Platforms are comprised of the hardware
and software licenses listed on Appendix C. WilTel shall have
sixty (60) Days from the date of SBC's offer to accept or reject
such offer and to the extent that WilTel has not accepted such
offer within such sixty (60) Day period, such offer shall be
deemed to have been rejected by WilTel. If WilTel elects to
accept any such offer within such sixty (60) Day period, SBC
shall transfer the applicable Platform(s) to WilTel in accordance
with this Section 6.2.C. The transfer of the applicable
Platform(s) shall occur on such date as WilTel shall specify in
its election to accept such transfer, which date shall not be
later than sixty (60) Days after the date that WilTel accepts
SBC's offer to transfer the applicable Platform (such period, the
"Platform Transition Period"). During the Platform Transition
Period, SBC shall provide WilTel with equipment and software
licenses sufficient for WilTel to create a functional Platform
management environment for each such Platform to be transferred
to WilTel. WilTel shall use such equipment and software to create
a working Platform management environment at WilTel's sole
expense, including any and all expenses for installation, which
the Parties shall jointly test. Following the successful
conclusion of such testing, SBC shall transfer its right, title
and interest to all such equipment and license all such software
listed in Appendix C that is applicable to such transferred
Platform(s) to WilTel. SBC shall bear the cost of any hardware or
software license transfer fees related to such transfer, as well
as any cost to physically move hardware from SBC premises to
WilTel premises, and shall use commercially reasonable efforts to
effect the transfer within the Platform Transition Period. From
and after the first to occur of (i) the date that WilTel rejects
SBC's offer to purchase the applicable Platform, (ii) sixty (60)
Days after the date of SBC's offer to transfer the applicable
Platform, to the extent that SBC has not prior thereto received
WilTel's acceptance of such offer, and (iii) expiration of the
Platform Transition Period, SBC shall have no other further
obligations to WilTel in respect of the Platform Services
provided on each such Platform that it has offered to transfer or
has transferred to WilTel; provided, however, that if for any
reason SBC is unable to transfer any Platform, or hardware or
software that is listed in Appendix C, to WilTel, SBC shall
continue to provide such Platform Services until it has received
the necessary consents and has transferred the applicable
Platform(s).
6.3 Transition. The Parties agree to cooperate and work together to assist
WilTel in moving its traffic off of the SBC Platforms to other
platforms.
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6.4 Transition of Platform at Request of WilTel. SBC acknowledges and
agrees that (a) during the Term, WilTel intends to transition to its
own platforms or to other providers a substantial portion if not all
of the Platform Services that it currently purchases from SBC and (b)
in conjunction therewith, [***] Upon receipt of written Notice from
WilTel (the "Platform Transition Notice") requesting transition of
specified Platform Services off of the Platforms, SBC shall implement
such transition in accordance with the reasonable terms of such
Platform Transition Notice.
1. Except as otherwise provided in this Agreement and in
Schedule B1, the terms and conditions for termination of
Platform Services, including those with respect to Platforms
located in WilTel facilities, shall be consistent with those
set forth in this Agreement. If SBC provides Platform
Services that WilTel uses to fulfill any obligations to SBC,
SBC shall continue to provide those Platform Services to
WilTel in accordance with the terms of Schedule B1 until
those obligations of WilTel to SBC lapse.
2. SBC may not for any reason discontinue providing any
Platform Services to WilTel during the Term (or thereafter
pursuant to a Platform Transition Notice) except with
WilTel's prior written consent or as provided in this
Agreement, including Section 6.2, Section 6.3, Article 7 or
Section 13.1.
6.5 Construction of Platform Services Obligations. SBC's obligations to
provide Platform Services and features pursuant to this Agreement
shall be limited to the terms and conditions specified in Schedule B1
and shall in no event exceed its obligations to provide Platform
Services and features that were provided by SBC to WilTel as of
February 9, 2005. In the event of any ambiguity in the terms and
conditions set forth in Schedule B1, SBC's obligations to provide
Platform Services and features pursuant to this Agreement shall be
limited to the Platform Services and services that were provided by
SBC to WilTel as of February 9, 2005.
ARTICLE 7. TERMINATION OF THIS AGREEMENT
7.1 Term of Agreement. This Agreement shall commence on the Effective Date
and shall expire on December 31, 2009 (the "Term"), unless terminated
earlier pursuant to this Article 7.
7.2 Early Termination.
A. Mutual Consent. This Agreement may be terminated at any time by
mutual written consent of the Parties.
B. Cessation of Operations or Insolvency. Either Party may terminate
this Agreement immediately upon Notice to the other Party if (a)
the other Party institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment
for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or
any material part of its property or assets; (b) any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent
of the other Party and the appointment continues undischarged or
unstayed for forty-five (45) Days; or (c) any proceeding under
any Debtor Relief Law relating to the other Party or to all or
any material part of its property or assets is instituted without
the consent of such Party and continues undismissed or unstayed
for forty-five (45) Days, or an order for relief is entered in
any such proceeding.
C. Change of Control. During the First Purchase Period, SBC may, but
shall not be obligated to, terminate this Agreement if, without
the prior consent of SBC, there is a Change of Control of WilTel.
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D. Termination for Breach. Either Party may, in addition to its
rights available to it at Law or in equity, terminate this
Agreement in its entirety and all Orders issued pursuant hereto,
if the other Party has substantially failed to perform its
obligations under this Agreement, and such failure materially and
adversely affects the expected benefits of this Agreement to the
non-breaching Party, and the breaching Party fails to cure such
failure within thirty (30) Days from the later of (a) the date on
which Notice of such failure is given and (b) if applicable, the
date on which any dispute about such failure is resolved in favor
of the non-breaching Party in accordance with the terms of
Article 12. For the avoidance of any doubt, such non-breaching
Party shall not have the right pursuant to this Section 7.2.D to
terminate this Agreement or any such Orders if a dispute about
such breach is raised and is resolved in favor of the other Party
in accordance with the terms of Article 12. In the event of
termination for breach under this Section 7.2.D, the
non-breaching Party may elect to continue to receive any Services
then being provided to such Party (but no new or additional
Services may be ordered) from the other Party for a period not to
exceed one hundred eighty (180) Days and otherwise on the terms
and conditions set forth in this Agreement. For the avoidance of
any doubt, (i) a Party's failure to meet Specifications, SLOs or
SLAs with respect to a specific Service provided by such Party
hereunder, (ii) any failure by SBC to perform its obligations
under Article 6 of this Agreement and (iii) any failure by a
Party to perform its obligations under this Agreement that are
being disputed in accordance with the dispute resolution
procedures set forth in Article 12 shall not in and of itself be
deemed to be a "substantial failure" of its obligations under
this Section 7.2.
7.3 Survival. Notwithstanding anything in this Agreement to the contrary,
Articles 1, 5, 7, 8, 10, 11, 12, 14, 15, 16, 17, 18, 19, 20, 21, 22
and 23, Section 2.3 (other than Section 2.3.G), Section 3.6.B and all
Schedules and Appendices to the extent applicable shall survive any
expiration or termination of this Agreement (but no new or additional
Services may be ordered) until such time as there are no remaining
Services provided hereunder, or for such other period expressly set
forth in the applicable provisions of this Agreement; provided,
however, that if this Agreement is terminated pursuant to Section 7.2
prior to the end of the Term, the foregoing provisions and Section 3.4
shall also survive the termination of this Agreement for one hundred
eighty (180) Days in respect of Services then being provided (but no
new or additional Services may be ordered), or for such other period
expressly set forth in the applicable provisions of this Agreement.
Notwithstanding anything in this Agreement to the contrary, in
addition to the Articles, Sections, Schedules and Appendices specified
in the immediately preceding sentence, in the event that this
Agreement expires at the expiration of the Term and a Purchase
Commitment Payment has been made, and such Purchase Commitment Payment
or any portion thereof remains unused, SBC's rights to use any such
remaining balance pursuant to Section 3.1.C, and Section 3.1.F.3 shall
also survive until none of such Purchase Commitment Payment remains
unused.
7.4 Effect of Termination. In the event that WilTel terminates this
Agreement, SBC shall promptly pay to WilTel any undisputed outstanding
invoiced amounts. Upon termination of this Agreement, subject to the
terms and limitations set forth in this Agreement, nothing herein
shall relieve any Party of any Liability for any breach of this
Agreement prior to such termination.
ARTICLE 8. PRICING AND CHARGES
8.1 Pricing of WilTel Services.
A. On-Net Services. The rates for On-Net Transport Services and
On-Net Ancillary Services are as stated in the relevant portion
of the applicable Transport Services Schedule and Schedule A12,
respectively.
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B. Off-Net Services. [***] During the First Purchase Period, WilTel
will provide SBC New Off-Net Services in accordance with Section
2.1.C and all such New Off-Net Services will be billed as
specified on Schedule A8 or as otherwise agreed in writing by the
Parties; provided that no ▇▇▇▇-up permitted under Schedule A8
shall exceed [***]
C. Additional Pass Through Basis Charges. WilTel will also charge
SBC on a Pass Through Basis any interstate or intrastate charges
assessed on WilTel as a result of Transport Service taken under
this Agreement by SBC related to [***]
D. Costs Billed on a Pass Through Basis. Costs billed on a Pass
Through Basis shall be billed to SBC at their actual or allocated
invoice costs in accordance with the allocation methodologies in
effect on February 9, 2005 and used in the preparation of
Schedule A8, or as otherwise agreed to in writing by the Parties.
In addition, SBC shall be entitled to the appropriate portion of
all discounts, rebates and the like that may be available to
WilTel in respect of Services provided to SBC, and WilTel shall
apply a credit to SBC in the amount of such discounts and
rebates. WilTel shall use commercially reasonable efforts
consistent with past practice to obtain all Services billed on a
Pass Through Basis on the prices most favorable to SBC that are
then available to WilTel.
E. International Voice Services. International Voice Services shall
be priced as set forth in Section 1.3 of Schedule A5.
8.2 SBC Platform Services Pricing. The rates for Platform Services are set
forth in Schedule B1.
8.3 Taxes and Fees.
A. Except as otherwise provided herein, each Party shall be fully
responsible for the payment of all taxes required by Law to be
paid by that Party.
B. Either Party may invoice the amount of any federal excise taxes
or state or local sales taxes imposed on the other Party in
connection with the provision of Services under this Agreement;
provided that (i) such obligation is imposed by legislation or
regulation and (ii) such obligation arises out of the use of
Services provided under this Agreement. All such taxes shall be
stated as separate items on a timely invoice and shall list the
taxing jurisdiction imposing the tax. Installation, labor and
other non-taxable charges must be separately stated. The
invoicing Party agrees to remit taxes to the appropriate taxing
authorities, as appropriate. Each Party agrees to honor properly
prepared tax exemption certificates, which one Party may submit
to the other Party, pursuant to the relevant tax provisions of
the taxing jurisdictions. Neither Party shall be obligated to pay
any amount otherwise collectible under this Section 8.3 that is
invoiced after the later of (i) one hundred eighty (180) Days
after the date that such Services are rendered and (ii) ninety
(90) Days after the other Party's receipt of any statement or
invoice for such amount; provided, however, that the invoice for
any amount otherwise collectible under this Section must be
received by billed Party within twenty-four (24) months after the
date of the transaction giving rise to such tax.
C. The invoicing Party agrees to pay, and to hold the other Party
harmless from and against, any penalty, interest, additional tax,
or other charge that may be levied or assessed as a result of the
delay or failure of the invoicing Party, for any reason, to pay
any tax or file any return or information required by Law or by
this Agreement to be paid or filed by the invoicing Party. The
invoicing Party agrees to pay and to hold the other Party
harmless from and against any penalty or sanction assessed as a
result of the invoicing Party doing business with any country
subject to U.S. trade restrictions.
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D. Upon SBC's request, the Parties shall consult with each other
with respect to the basis and rates upon which WilTel shall pay
any taxes or fees for which SBC is obligated to reimburse WilTel
under this Agreement. If SBC determines that in its opinion any
such taxes or fees are not payable, or should be paid on a basis
less than the full price or at rates less than the full tax rate,
WilTel shall make payment in accordance with such determinations
and SBC shall be responsible for such determinations. If
collection is sought by the taxing authority for a greater amount
of taxes than that so determined by SBC, WilTel shall promptly
notify SBC. WilTel shall cooperate with SBC in contesting such
determination, but SBC shall be responsible and shall reimburse
WilTel for any tax, interest, or penalty in excess of its
determination. If SBC desires to contest such collection, SBC
shall promptly notify WilTel. If SBC determines that in its
opinion it has reimbursed WilTel for sales or use taxes in excess
of the amount which SBC is obligated to reimburse WilTel, SBC and
WilTel shall consult with each other to determine the appropriate
method of recovery of such excess reimbursements. WilTel shall
credit any excess reimbursements against tax reimbursements or
other payments due from SBC if and to the extent WilTel can make
corresponding adjustments to its payments to the relevant tax
authority. At SBC's request, WilTel shall timely file any claims
for refund and any other documents required to recover any other
excess reimbursements, and shall promptly remit to SBC all such
refunds and interest received.
E. If any taxing authority advises either Party that it intends to
audit that Party with respect to any taxes for which the other
Party is obligated to reimburse the Party being audited under
this Agreement, the Party being audited shall (i) promptly so
notify the other Party, (ii) afford the other Party an
opportunity to participate on an equal basis with the audited
Party in such audit with respect to such taxes and (iii) keep the
other Party fully informed as to the progress of such audit. Each
Party shall bear its own expenses with respect to any such audit,
and the responsibility for any additional tax, penalty or
interest resulting from such audit shall be determined in
accordance with the applicable provisions of this Section.
F. The invoicing Party's failure to comply with the notification
requirements of this Section 8.3 shall relieve the other Party of
its responsibility to reimburse the invoicing Party for taxes
only if the invoicing Party's failure materially prejudiced the
other Party's ability to contest imposition or assessment of
those taxes.
G. In addition to its rights under Section 8.3.C with respect to any
tax or tax controversy covered by this Section 8.3, either Party
may contest, pursuant to applicable Law and Tariffs, and, at its
own expense, any tax previously billed that it is ultimately
obligated to pay. The contesting Party will be entitled to the
benefit of any refund or recovery of amounts that it had
previously paid resulting from such a contest. The other Party
will cooperate in any such contest, provided that all costs and
expenses incurred in obtaining a refund or credit for the
contesting Party shall be paid by the contesting Party.
H. The invoicing Party shall reimburse the other Party for any tax
benefits (for instance, refunds, including interest if paid by
the applicable taxing authority) associated with taxes previously
paid by the other Party.
I. The Parties agree to reasonably cooperate with each other with
respect to any audit, tax controversy, tax refund matter, claim,
action, or similar proceeding by a taxing authority or other
governmental agency. The degree of cooperation contemplated by
this Section 8.3 is to enable any resulting inquiry or
controversy to be resolved expeditiously and includes, but is not
limited to, assisting with responses to audit inquiries and
producing documents and information.
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J. WilTel will from time to time invoice SBC, and SBC agrees to pay
for the "Net Amount," as defined in this Section 8.3.J of any USF
payment obligations that WilTel is required or permitted by
ordinance, statute, regulation or administrative pronouncement to
collect from SBC as a result of the sale of Services to SBC
(hereinafter, such amount referred to as the "USF Recovery Fee").
Such invoice shall list each applicable state or federal USF
Recovery Fee as separate items, listing the jurisdiction imposing
the USF payment obligations on WilTel. WilTel agrees to pay all
Universal Service Fund payment obligations as required by Law.
SBC's obligation to pay the USF Recovery Fee applies only to the
extent that the SBC payments for Services, upon which the USF
Recovery Fee is imposed, are included in the Net Amount that
WilTel actually uses in determining its payment of its USF
payment obligations. As used in this Section 8.3.J, the term "Net
Amount" means the portion of the USF payment obligation that
WilTel would not have otherwise incurred, but for the sale of
Services pursuant to this Agreement, less any refunds or credits,
if any, that WilTel could not have otherwise obtained, but for
the sale of Services pursuant to this Agreement. Accordingly, SBC
shall not be obligated to pay USF Recovery Fees to the extent
they are not included in, or are deductible, or excludable from
the amounts upon which WilTel is obligated to pay as its state or
federal USF payment obligations. WilTel shall, within thirty (30)
Days of a request by SBC, provide to SBC a statement by an
officer of WilTel, stating the method used to compute SBC's USF
Recovery Fee for the preceding twelve (12) month period during
which the USF Recovery Fee was invoiced pursuant to this Section
8.3.J, as well as a computation of SBC's USF Recovery Fees
invoiced during such period based on WilTel's USF payment
obligations. SBC shall not be obligated to pay any such amount
otherwise collectable under this Section 8.3.J, nor shall SBC be
entitled to any refund otherwise payable under this Section
8.3.J, that is determined more than three (3) years after the
date of the transaction giving rise to such obligation. Sections
8.3.E, 8.3.F and the first two sentences of Section 8.3.G shall
not apply to this Section 8.3.J. The remaining subsections and
portions of Section 8.3 shall continue to apply, and the terms
"taxes" and/or "fees" as used herein shall include the USF
Recovery Fees and USF payment obligations of this Section 8.3.J.
The Parties shall have the right to audit, upon reasonable Notice
and at a reasonable time and place, each other's computations of
all amounts that are payable under this Section. Neither Party
may exercise this right more frequently than once during any
calendar year.
ARTICLE 9. SBC RESPONSIBILITIES
9.1 SBC Responsibilities.
A. SBC will not be relieved of any duty, obligation or
responsibility hereunder due to the fact that Service is
ultimately provided to End Users.
B. SBC will be solely responsible for End User solicitation, service
requests, creditworthiness, SBC service, billing and collection,
unless otherwise specifically set forth in this Agreement. SBC
remains responsible for its compliance with all terms and
conditions of this Agreement, including payment responsibilities,
without regard to SBC's ability to charge for Services used by
End Users or to collect payment from End Users.
C. Except as set forth in Section 15.3, SBC will be financially
responsible for usage generated by each End User ANI activated by
WilTel pursuant to a request by SBC until such ANI is
presubscribed to another interexchange carrier or SBC requests
that service be terminated. SBC may request WilTel to block an
ANI upon the End User's failure to pay SBC, subject to SBC's
prior certification to WilTel that it has given the End User any
notice required by any applicable statute, rule or regulation.
SBC will reimburse WilTel for reasonable expenses incurred to
block an ANI.
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D. SBC has sole responsibility for installation, testing and
operation of its facilities, services and equipment ("SBC
Facilities") other than those specifically provided by WilTel as
part of the Service as described in a Service Order or as
otherwise provided in this Agreement.
ARTICLE 10. WILTEL RESPONSIBILITIES
10.1 Network Upgrade. WilTel hereby covenants and agrees that it shall keep
the WilTel Network upgraded in the ordinary course of business,
consistent with WilTel's past practices, with the most recent generic
releases of system operating software that are generally available,
unless operational issues, in WilTel's reasonable business judgment,
require use of a different release.
10.2 Maintenance Capital. WilTel hereby further covenants and agrees that
it shall expend maintenance capital in the ordinary course of business
consistent with past business practices necessary to sustain its
network operations and services.
10.3 [***]
10.4 End to End Services Ordered under WilTel's ACNA. Unless and to the
extent SBC from time to time specifically instructs WilTel otherwise,
SBC desires WilTel to manage all relationships with any Third Party
Provider or Local Access Provider to the extent necessary to provide
end-to-end service. SBC acknowledges that WilTel is unable to
guarantee the level of service provided by any such Local Access
Provider or Third Party Provider, although WilTel agrees that it will
use its reasonable best efforts to manage these relationships in such
a manner so as to ensure that the Transport Services meet the
performance guarantees, if any, provided by such Local Access Provider
or alternate interexchange service provider.
10.5 [***]
10.6 [***] Units Agreement. WilTel agrees to provide SBC installation and
other services in connection with [***] units pursuant to the
provisions set forth in Appendix H.
ARTICLE 11. INVOICE, BILLING AND PAYMENT TERMS
11.1 Due Date and Invoice. Subject to the provisions of Section 11.5, all
amounts stated on each monthly invoice are due and payable thirty (30)
Days from the date on which a Party ("Paying Party") receives an
invoice ("Due Date") from the other Party ("Billing Party"); provided,
however, that the Paying Party may deduct from any amount due, any
credit or remedy amount authorized under this Agreement. The Paying
Party shall itemize the credit or remedies which are deducted from the
payment. The Paying Party shall remit payment to the Billing Party at
the remittance address. In the event that the Paying Party fails to
make full payment the undisputed amounts to the proper address by the
Due Date, the Paying Party shall also pay a late fee in the amount of
the lesser of one and one-half percent (1 1/2%) of the unpaid balance
per month or the maximum lawful rate under applicable state law which
shall accrue from the Due Date. The Paying Party acknowledges and
understands that all charges are computed exclusive of any applicable
federal, state or local use, excise, valued added, gross receipts,
sales and privilege taxes, tax or charge levied to support the
Universal Fund contemplated by the Communications Act, taxes on
Payphone Charges, duties, fees or similar liabilities (other than
general income or property taxes imposed on the Billing Party),
whether charged to or against the Billing Party ("Additional
Charges"). Such Additional Charges are not classified as Service
charges and shall be paid by the Paying Party in addition to all other
charges provided for herein. Any late fees payable pursuant to this
Section 11.1 shall not be counted towards the satisfaction of the
Purchase Commitment.
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11.2 Billing Periods. The Billing Party will ▇▇▇▇ the Paying Party monthly
for Services provided hereunder. Charges for usage and all prorated
MRCs (charges for monthly Service provided for less than a calendar
month), installation and other NRCs shall be billed following the
receipt of any such Services. Charges for all non-usage based MRCs for
full months during which Service are to be provided shall be billed in
advance.
11.3 Timeliness. The Billing Party will render invoices for Services not
later than the [***] after the monthly billing cycle in which any
usage is recorded. WilTel shall account, and ▇▇▇▇ SBC for, not less
than (1) [***] of all On-Net Service usage no later than the first
available monthly billing cycle after the usage is recorded, (2) [***]
of all On-Net Service usage no later than the second available monthly
billing cycle after the usage is recorded and (3) [***] of all On-Net
Service usage no later than the third available monthly billing cycle
after the usage is recorded. [***]
11.4 Accuracy. Unless the Parties agree otherwise in writing, with respect
to any monthly billing cycle, the accuracy of the raw billing
information that WilTel supplies to SBC with respect to On-Net Service
shall not be less than [***] where WilTel cannot document that such
raw billing inaccuracy was caused by SBC or any of its Affiliates.
11.5 Disputes. If the Paying Party in good faith disputes any portion of an
invoice it must pay the undisputed amount of the invoice on or before
its Due Date and provide Notice to the Billing Party of the billing
dispute within [***] thereafter. Such Notice must include
documentation substantiating the dispute. The Paying Party's failure
to notify the Billing Party of a dispute shall be deemed to be the
Paying Party's acceptance of such charges. The Parties will make a
good faith effort to resolve billing disputes expeditiously. If the
Paying Party has already made payment of a disputed charge and a
dispute is resolved in favor of the Paying Party, the Paying Party
shall receive a credit on its next invoice for the amount determined
to be due, including interest in the disputed amount of [***] per
month from the date the Paying Party paid the disputed amount. If the
dispute is resolved in favor of the Billing Party, the Paying Party
shall immediately pay the resolved amount, to the extent not already
paid, plus interest on such amount at the rate of [***] per month from
the Due Date. Any interest payments payable pursuant to this Section
11.5 shall not be counted towards the satisfaction of the Purchase
Commitment.
11.6 Adjustments. WilTel may make billing adjustments as follows:
A. WilTel Services. For On-Net Services or other WilTel Services,
for a period of [***] after the date that such Service is
rendered; and
B. Off-Net. For Off-Net Services or any other Services provided by a
Third Party (including an SBC ILEC), until the later of (i) [***]
after the date that such Off-Net Services or other Third Party
services are rendered and (ii) [***] after WilTel's receipt of
any invoice for Services rendered and billed by such Third Party
or SBC Affiliate; provided, however, that the invoice for
Services rendered must be received by SBC within [***] of the
date such Services were rendered.
11.7 Invoice address. The Billing Party shall send invoices to the following
locations as specified:
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Affiliate Ordering Service: WilTel Communications, LLC
SBC Long Distance, LLC
SBC Services, Inc. ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇: Telco Cost
▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ARTICLE 12. DISPUTE RESOLUTION
12.1 Disputes Resolution Procedures. From time to time, issues and disputes
under this Agreement will arise that cannot be resolved at the
operational level of management within the SBC and WilTel teams.
Issues that cannot be resolved will be escalated as follows:
A. Notification. Either Party may decide that escalation is
desirable when resolution of an issue appears unachievable at the
current management level. The Party desiring escalation will
provide Notice of its intention to the members of the other Party
currently involved in the dispute.
B. Documentation. Both Parties will jointly develop a short briefing
document for escalation that describes the issue, relevant impact
and positions of both Parties.
C. Request for Assistance. A meeting will be scheduled with
appropriate individuals. The brief will be sent in advance to the
participants.
D. Escalation. Issues will be escalated for review and resolution to
the next level of management as follows:
1. The SBC Group President & CEO-Enterprise Business Services
(or equivalent title) and WilTel's Chief Executive. If the
issue cannot be resolved within ten (10) Business Days, the
issue will be escalated to:
2. SBC's Senior Executive Vice President - Corporate
Development and WilTel's Chairman. In the event that the
issue cannot be resolved within ten (10) Business Days, then
either Party may seek relief from a court of competent
jurisdiction under Section 23.4.
E. Communication. At each step, the designated corporate executives
will confer as often as they deem reasonably necessary in order
to gather and furnish to the other all information with respect
to the matter in issue which the Parties believe to be
appropriate and germane in connection with its resolution. The
designated corporate executives shall discuss the problem and
negotiate in good faith in an effort to resolve the dispute
without the necessity of any formal proceeding. The specific
format for the discussions will be left to the discretion of the
designated senior corporate executives, but may include the
preparation of agreed-upon statements of fact or statements of
position.
F. Information Requests. During the course of negotiations under
this Article 12, all reasonable requests made by one Party to
another for non-privileged information, reasonably related to the
dispute, will be honored in order that each of the Parties may be
fully advised of the other's position. All negotiation shall be
strictly confidential and used solely for the purposes of
settlement. Any materials prepared by one Party for these
proceedings shall not be used as evidence by the other Party in
any subsequent litigation; provided, however, the underlying
facts supporting such materials may be subject to discovery.
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G. Termination of Services. Notwithstanding the existence of a
dispute, but subject to the provisions of this Agreement,
including Articles 7 and 13, neither Party shall interrupt,
suspend, or terminate its provision of Services unless authority
to do so is granted by the other Party or conferred by a court of
competent jurisdiction.
H. Equitable Relief. Either Party may seek an injunction or other
equitable relief from a court of competent jurisdiction, or file
any action, suit or proceeding to preserve its rights under Law,
without complying with the foregoing dispute resolution
procedures.
ARTICLE 13. DEFAULT
13.1 Default.
A. If a Party commits a material breach of one or more of its
material obligations under this Agreement relating to a
particular Service or Order, and the breaching Party fails to
cure such breach within thirty (30) Days from the later of (i)
the date on which Notice of such breach is given and (ii) if
applicable, the date on which any dispute about such breach is
resolved in favor of the non-breaching Party in accordance with
the terms of Article 12, then the non-breaching Party may, in
addition to its rights available to it at Law or in equity,
suspend or terminate the specific Service to which such breach or
default relates. For the avoidance of any doubt, such
non-breaching Party shall not have the right pursuant to this
Section 13.1.A to suspend or terminate such specific Service if a
dispute about such breach is raised and is resolved in favor of
the other Party in accordance with the terms of Article 12.
B. If either Party believes there has been a material breach or
default under this Agreement, such Party will Notify the other
Party setting forth the nature of such claimed breach or default.
The Notified Party shall promptly investigate such claimed breach
or default and, no later than thirty (30) Days after delivery of
such Notice, shall either (i) provide Information satisfactory to
the notifying Party that no breach or default in fact occurred or
(ii) promptly use its reasonable best efforts to take such action
as may be required to cure such breach or default and, in the
event that the Notified Party cures such breach or default within
such period, it shall be deemed to have been cured. In the event
of any breach or default that is capable of being cured under
this Agreement, each Party shall cooperate as reasonably
requested by the other Party to cure such breach or default.
C. During the First Purchase Period, if SBC elects to receive a
credit pursuant to Section 3.1.F.1 for an applicable termination
or cessation of an Included Service, such termination or
cessation shall not constitute a default pursuant to this Section
13.1.
13.2 Remedies. In the event of a breach or a default by either Party, in
addition to the remedies set forth in this Agreement, subject to the
limitations on remedies set forth in Section 15.1.C and Section 15.2,
the non-defaulting Party shall be entitled to all remedies available
at Law or in equity.
ARTICLE 14. WARRANTY AND DISCLAIMER OF WARRANTY
14.1 WilTel Warranty. WilTel warrants that On-Net Services shall be
provided to SBC in accordance with the applicable technical
Specifications. WilTel shall use all commercially reasonable efforts
under the circumstances to remedy any delays, interruptions,
omissions, mistakes, accidents or errors in the Services and restore
such Services to comply with the terms hereof. THE FOREGOING WARRANTY,
THE CREDITS, DELAY REMEDIES AND OTHER PROVISIONS OF THIS AGREEMENT FOR
THE FAILURE TO COMPLY WITH THIS WARRANTY ARE THE EXCLUSIVE WARRANTY
AND REMEDY PROVIDED TO SBC FOR BREACH OF THIS WARRANTY AND ARE IN LIEU
OF ALL OTHER WARRANTIES OR REMEDIES, WHETHER EXPRESS, IMPLIED OR
STATUTORY, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE.
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14.2 Representations and Warranties.
A. WilTel Parties. Each WilTel Party represents, warrants and agrees
that:
1. As of the Effective Date, there are no actions, suits, or
proceedings, pending or threatened against WilTel or any of
its Affiliates, which will have a material adverse effect on
WilTel's ability to provide the Services set forth in
Article 2 of this Agreement or otherwise to fulfill its
obligations under this Agreement; and
2. WilTel will promptly notify SBC if, during the Term, WilTel
becomes aware of any action, suit or proceeding pending
against WilTel or any of its Affiliates, which may have a
material adverse effect on WilTel's ability to fulfill its
obligations under this Agreement or any Order.
B. Parties. Each Party represents and warrants to the other Party as
follows:
1. Organization, Standing and Authority. Such Party is a
corporation or limited liability company, as applicable,
duly organized, validly existing and in good standing under
the laws of the State of Delaware. Such Party has all
requisite power and authority to enter into this Agreement
and to consummate the transactions contemplated thereby. All
corporate or similar acts and other proceedings required to
be taken by such Party to authorize the execution, delivery
and performance of this Agreement and the consummation of
the transactions contemplated thereby have been duly and
properly taken. The Agreement has been duly executed and
delivered by such Party and constitutes the legal, valid and
binding obligation of it, enforceable against it in
accordance with its terms.
2. No Violation. The execution and delivery by such Party of
this Agreement do not, and the consummation of the
transactions contemplated thereby and compliance with the
thereof will not (i) conflict with or result in any
violation of any provision of the certificate of
incorporation or by-laws or similar governing instruments of
such Party, (ii) conflict with, result in a violation or
breach of, or constitute a default, or give rise to any
right of termination, revocation, cancellation, or
acceleration, under, any material contract, except for any
such conflict, violation, breach, default or right which is
not reasonably likely to have a material adverse effect on
the ability of such Party to consummate the material
transactions contemplated by this Agreement or (iii)
conflict with or result in a violation of any judgment,
order, decree, writ, injunction or Law applicable to such
Party or to the property or assets of such Party, except for
any such conflict or violation which is not reasonably
likely to have such a material adverse effect on such Party.
3. Consents and Approvals. Except as set forth in this
Agreement, no consent, approval, license, permit, order or
authorization of, registration, declaration or filing with,
or notice to, any domestic or foreign court, administrative
or regulatory agency or commission or other governmental
authority or instrumentality is required to be obtained or
made by or with respect to such Party in connection with the
execution and delivery of this Agreement or the consummation
of the transactions contemplated thereby.
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C. Survival. All representations and warranties in Section 14.2 of
this Agreement will survive for two (2) years after the Effective
Date. All covenants in Section 14.2 of this Agreement will
survive until the termination or expiration of this Agreement in
accordance with Section 7.3.
14.3 SBC Warranty. Except as otherwise set forth in this Agreement, SBC
warrants that the Platform Services shall be provided to WilTel in
accordance with the Specifications set forth in Schedule B1. SBC shall
use its commercially reasonable efforts under the circumstances to
remedy any delays, interruptions, omissions, mistakes, accidents or
errors in the Platform Services and restore such Platform Services to
comply with the terms hereof. THE FOREGOING WARRANTY, CREDITS, DELAY
REMEDIES AND OTHER PROVISIONS OF THIS AGREEMENT FOR THE FAILURE TO
COMPLY WITH THIS WARRANTY ARE THE EXCLUSIVE WARRANTY AND REMEDY
PROVIDED TO WILTEL AND ARE IN LIEU OF ALL OTHER WARRANTIES OR
REMEDIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
14.4 Third Party Warranties. Each Party shall enforce any rights,
warranties, licenses, terms and conditions and other benefits accruing
to it under each of its agreements with Third Parties participating in
or providing equipment, software or other services used in connection
with the provision of Services under this Agreement wherever and
whenever such Party's failure to enforce any such rights, warranties,
licenses, terms, conditions and other benefits could materially impair
its ability to provide such services in accordance with the terms and
conditions of this Agreement.
ARTICLE 15. LIMITATION OF LIABILITY
15.1 Liability.
A. Delay in Delivery. The terms governing delay in delivery of
Transport Services are set forth in the applicable Transport
Services Schedule.
B. Interruptions in the Service. The terms governing interruptions
in the Service are set forth in the applicable Schedule A.
C. Limitation of Liability Regarding Platform Services.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, SBC SHALL NOT BE LIABLE FOR ANY BREACH OF ITS
OBLIGATIONS WITH RESPECT TO PLATFORM SERVICES (INCLUDING PURSUANT
TO ARTICLES 6, 16 OR 21 AND SCHEDULE B1) EXCEPT TO THE EXTENT
THAT A PLATFORM FAILURE, A PLATFORM OUTAGE OR ANY COMBINATION
THEREOF HAS OCCURRED AND IN SUCH EVENT, SBC SHALL NOT BE LIABLE
IN RESPECT OF DAMAGES FOR ANY AND ALL PLATFORM FAILURES, PLATFORM
OUTAGES AND/OR ANY COMBINATIONS THEREOF IN EXCESS OF [***] IN THE
AGGREGATE. WilTel shall promptly Notify SBC of any failure to
provide Platform Services in accordance with this Agreement and
of any event or series of events that could result in or
constitute such a Platform Failure, Platform Outage or any
combination thereof.
15.2 LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS AGREEMENT, OTHER THAN SECTION 16.1.A RELATING TO
INDEMNITY FOR THIRD PARTY CLAIMS AND THE CONFIDENTIALITY OBLIGATIONS
SET FORTH HEREIN, NEITHER PARTY SHALL OTHERWISE BE LIABLE TO THE OTHER
OR TO ANY THIRD PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES RELATING TO OR ARISING OUT OF A
PARTY'S PERFORMANCE OR NON-PERFORMANCE OF ITS OBLIGATIONS AND
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RESPONSIBILITIES PURSUANT TO THIS AGREEMENT, INCLUDING THOSE BASED ON
LOSS OF REVENUES, PROFITS, OR BUSINESS OPPORTUNITIES, WHETHER OR NOT
SUCH PARTY HAD OR SHOULD HAVE HAD ANY KNOWLEDGE, ACTUAL OR
CONSTRUCTIVE, THAT SUCH DAMAGES MIGHT BE INCURRED, REGARDLESS OF
WHETHER SUCH LIABILITY ARISES FROM BREACH OF CONTRACT, TORT OR ANY
OTHER THEORY OF LIABILITY.
15.3 Fraudulent Calls. WilTel shall not be liable for fraudulent calls
provided to SBC, even if such fraudulent calls originated on WilTel's
switched network facilities, if (a) WilTel has no actual or
constructive knowledge of the fraud and (b) WilTel blocks the ANIs as
requested by SBC as soon as reasonably possible, [***]. In the event
that WilTel fails to block as required above, however, WilTel shall be
liable for all fraudulent calls that occur after SBC's Notice.
ARTICLE 16. INDEMNIFICATION
16.1 Indemnity.
A. Except for intellectual property indemnity claims which are
exclusively subject to Article 21, each Party shall defend,
indemnify and hold harmless the other Party, including any of its
Affiliates, officers, directors, shareholders, employees and
agents, from and against any and all claims, damages, losses and
Liability whatsoever, including reasonable legal fees and any
damages arising out of, caused by, related to, based upon or
incidental to any claim by a Third Party related to, based upon
or incidental to the indemnifying Party's obligations under this
Agreement, including any such claim (i) for physical property
damage, including theft, personal injury or wrongful death,
whether sounding in tort or contract, claim of defamation,
invasion of privacy or similar claim based on any act or omission
of the indemnifying Party, its employees, agents or Third Party
contractors in connection with this Agreement and (ii) that the
claimant was "slammed" or "crammed," as those terms are
understood in the industry.
B. IF ANY SERVICES PERFORMED IN OHIO OR ANY OTHER STATE WHICH
PROVIDES EMPLOYER IMMUNITY FROM EMPLOYEE CLAIMS UNDER WORKERS
COMPENSATION STATUTES OR SIMILAR LAWS, STATUTES OR CONSTITUTIONAL
PROVISIONS, IT IS EXPRESSLY AGREED THAT EACH PARTY HEREBY WAIVES
ANY IMMUNITY FROM ITS OBLIGATIONS TO DEFEND, INDEMNIFY AND HOLD
HARMLESS THE OTHER PARTY AND ITS AFFILIATES AGAINST ANY CLAIMS BY
EMPLOYEES OF SUCH PARTY, WHICH IMMUNITY WOULD OTHERWISE ARISE BY
OPERATION OF SUCH LAW, STATUTE OR CONSTITUTIONAL PROVISION (In
Ohio, Ohio Revised code 4123.74 and 4123.741 and Section 35,
Article, II, Ohio Constitution).
C. With respect to indemnification pursuant to Section 16.1.A:
1. The indemnified Party shall promptly notify the indemnifying
Party in writing of any claim which the indemnified Party
reasonably considers subject to the indemnity, giving a
description in reasonable detail of the relevant facts on
which the claim is based. The indemnified Party shall to
provide the indemnifying Party with all reasonable
assistance in investigating, defending and pursuing such
claim at the indemnifying Party's expense. The indemnifying
Party shall not be required to indemnify the indemnified
Party for any settlement entered into without its consent
except to the extent set forth in Section 16.1.D.
2. The indemnifying Party shall assume the defense of any such
claim or any litigation resulting from such claim and shall
have absolute control over the litigation, including, but
not limited to, the selection of counsel, the legal strategy
with respect to the claim, and the settlement of such claim,
either before or after litigation has commenced.
Notwithstanding the preceding sentence, (a) if there is a
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reasonable probability that a claim may materially and
adversely affect the indemnified Party other than as a
result of money damages or other money payments, the
indemnified Party shall have the right, at its own expense,
to defend or co-defend such claim, except that the
indemnifying Party shall continue to control the defense,
and (b) to the extent any defense applicable to the
indemnified Party shall involve a conflict of interest with
the indemnifying Party, the indemnified Party shall have the
right to control such defense at the expense of the
indemnifying Party.
D. If, within a reasonable period of time after notice of any claim,
the indemnifying Party fails to defend such claim, the
indemnified Party shall have the right to undertake the defense,
or settlement of such claim on behalf of and for the account and
at the risk of the indemnifying Party, subject to the right of
the indemnifying Party to assume the defense of such claim at any
time prior to settlement, compromise or final determination of
the claim, except to the extent set forth in the last sentence of
Section 16.1.C.2.
ARTICLE 17. COMPLIANCE WITH LAW
17.1 Compliance with Laws. Each Party, and all Services provided such
Party, shall comply with all applicable Laws. Such Party's obligation
to comply with all Laws includes the procurement of permits,
certificates, approvals, inspections and licenses, when needed, in
such Party's performance of this Agreement. Each Party further agrees
to comply with all applicable Executive and Federal regulations, as
set forth in "Executive Orders and Federal Regulations," including
those set forth in Exhibit A.
ARTICLE 18. FORCE MAJEURE
18.1 Force Majeure. In no event shall either Party have any claim or right
against the other Party for any failure of performance by such other
Party, if such failure of performance is caused by or the result of
causes beyond the reasonable control of such other Party due to any
occurrence commonly known as force majeure event (a "Force Majeure
Event"), including acts of God, fire, flood, earthquake or other
natural catastrophe, acts of any governmental body (de facto or de
jure), refusal of building owners to grant building entry rights,
national emergency, insurrection, riot or war.
18.2 Notice. The Party first learning of the Force Majeure Event shall
Notify the other Party. Upon giving such Notice, the Parties may
cancel or delay their performance hereunder for so long as their
performance is delayed by the Force Majeure Event, and, in such event,
the Parties shall have no liability to each other. If the Force
Majeure Event shall continue for a period of ninety (90) Days, upon
Notice, either Party may terminate any Service provided pursuant to
this Agreement that is affected by such Force Majeure Event without
liability to the other Party.
ARTICLE 19. CONFIDENTIAL INFORMATION
19.1 Confidential Agreement. Each Party agrees not to disclose the prices,
terms and conditions of this Agreement to any Third Party, other than
its agents, advisors and consultants, without the prior written
approval of the other Party, except as required by Law. SBC
acknowledges that Leucadia National Corporation will file the contents
of this Agreement (excluding all Exhibits, Appendices and Schedules
hereto) with the Securities and Exchange Commission, as required by
securities Laws.
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19.2 Confidential Information. "Confidential Information" of a Party (the
"Disclosing Party") shall mean the Disclosing Party's proprietary
technical information, experience or data, plans, programs, products,
services, software programs, strategies, methods, trade secrets,
customer lists, financial condition, earnings, CPNI, and other
information designated as confidential or generally treated by the
Disclosing Party as confidential.
19.3 Duty of Confidentiality. Each Party (the "Receiving Party") receiving
the Confidential Information of the Disclosing Party shall not
disclose, disseminate or release such Confidential information to any
Third Party, except as expressly provided herein or as otherwise
specifically authorized in writing by the other Party.
19.4 Disclosure to Employees. Confidential Information may be disclosed to
the Receiving Party's employees (including Affiliates, agents,
advisors and consultants legally bound to protect Confidential
Information in a manner consistent with this Agreement) with a need to
know. Each Party and each Person having access to such Confidential
Information shall protect all such Confidential Information received
from the Disclosing Party with the same degree of care accorded its
own proprietary and confidential information of a similar kind and
nature.
19.5 Material Breach. In the event the Receiving Party discloses,
disseminates or releases any Confidential Information received from
the Disclosing Party, except as provided above, such disclosure,
dissemination or release will be deemed a material breach of this
Agreement, and the Disclosing Party may demand prompt return of all
Confidential Information previously provided to the Receiving Party.
The provisions of this Section are in addition to any other legal or
equitable rights or remedies the Disclosing Party may have under Law.
19.6 Non-Confidential Information. The obligations this Article 19 shall
not apply to any information to the extent that it:
A. is already rightfully known to or in the possession of the
Receiving Party prior to the date it was disclosed to the
Receiving Party by the Disclosing Party;
B. is disclosed to the public without breach by the recipient of its
obligations hereunder;
C. is disclosed to the Receiving Party on an unrestricted basis by a
Third Party who, at the time of such disclosure, was not known to
be under a duty to the Disclosing Party to keep such information
confidential;
D. is independently developed by the Receiving Party without
reference to or based upon the Confidential Information of the
Disclosing Party;
E. was disclosed pursuant to applicable Laws, including securities
laws and laws governing telecommunications; or
F. was disclosed pursuant to a legally valid order of a court or
federal, state, or local government entity having jurisdiction
over the Receiving Party, provided however, that to the extent
legally permissible, the Receiving Party shall provide prompt and
timely Notice of such order to the Disclosing Party in order to
enable the Disclosing Party to seek an injunction or protective
order against such disclosure (and the Receiving Party shall use
reasonable efforts to cooperate with the Disclosing Party, at the
Disclosing Party's expense, in obtaining such injunction or
protective order).
19.7 Property of the Disclosing Party. Each Party agrees that each of its
employees receiving Confidential Information will be informed that
such Confidential Information is subject to these non-disclosure terms
and conditions; that Confidential Information will remain the property
of the Disclosing Party; that all copies of Confidential Information
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will be returned or destroyed at the Disclosing Party's option; that
the Receiving Party will treat the Confidential Information with the
same degree of care as it affords its own Confidential Information of
similar kind and nature; and that the Receiving Party will not
reproduce Confidential Information, except as necessary to perform its
duties under this Agreement, or as expressly provided under this
Agreement, or as otherwise specifically authorized in writing by the
other Party.
19.8 No Use of Confidential Information for Competitive Purposes. Each
Party agrees that (a) any Confidential Information received from the
other Party or obtained through or learned as a result of the
relationship between the Parties under this Agreement or with any
Customers of such other Party will be used only within and by such
Party's employees involved in performance under this Agreement, and
(b) such Confidential Information will only be used for the purposes
of this Agreement and will not be used for any other purposes,
including any selling or marketing activity of any Services or
Facility to any Customer, either on its own or in participation with
other entities, without the other Party's prior written approval.
19.9 Unauthorized Disclosure. The Receiving Party acknowledges and confirms
that the Confidential Information of the Disclosing Party constitutes
proprietary information and trade secrets valuable to the Disclosing
Party, and that the unauthorized use, loss or outside disclosure of
such Confidential Information shall cause irreparable injury to the
Disclosing Party. The Receiving Party shall notify the Disclosing
Party immediately upon discovery of any unauthorized use or disclosure
of such Confidential Information resulting from a breach of these
provisions by the Receiving Party, and will cooperate with the
Disclosing Party in every reasonable way to help regain possession of
such Confidential Information and to prevent its further unauthorized
use. The Receiving Party acknowledges and agrees that monetary damages
may not be a sufficient remedy for unauthorized disclosure of
Confidential Information of the Disclosing Party and that the
Disclosing Party shall be entitled, without waiving other rights or
remedies, to such injunctive or equitable relief as may be deemed
proper by a court of competent jurisdiction.
19.10 Survival. The provisions of this Article 19 shall survive two (2)
years after the expiration or termination of this Agreement.
ARTICLE 20. PUBLICITY
20.1 Publicity. No Party shall use the other Party's or its Affiliates'
names or any language, pictures, trademarks, service marks or symbols
which could, in such other Party's reasonable judgment, imply such
other Party's or its Affiliates' identity or endorsement by such other
Party, its Affiliates or any of its employees in any (i) written,
electronic or oral advertising or presentation or (ii) brochure,
newsletter, book, electronic database or other written material of
whatever nature, without such other Party's prior written consent.
Each Party will submit to the other Party for approval, prior to the
initial publication, each publication that mention or display such
other Party's or its Affiliates' names, trademarks or service marks,
or that contain any symbols, pictures or language, in each case from
which an endorsement or affiliation may be inferred or implied. Except
to the extent required pursuant to applicable Law, neither Party shall
publish any description of this Agreement, or any of the terms or
conditions hereof, without prior consultation with and consent of the
other Party.
ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS
21.1 Infringement of Third Party Intellectual Property Rights.
A. Each Party (the "IP Indemnifying Party") agrees to defend,
indemnify and hold the other Party (the "IP Indemnified Party")
harmless from and against any damages, including damages for
willful infringement, liability, costs and expenses, including
reasonable attorneys' fees, arising out of or relating any claim
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that the use of the On-Net Transport Services by SBC as the IP
Indemnified Party, or the Platform Services by WilTel as the IP
Indemnified Party, as the case may be, infringes any United
States trade secret, patent, copyright or other proprietary right
of any Third Party. The indemnification obligations hereunder
shall not apply any claim arising out of or relating to: (i)
infringement of any claim in a patent, which is comprised of a
number of elements which include both the elements of the IP
Indemnifying Party's Services and other elements not provided by
the IP Indemnifying Party, where such elements not provided by
the IP Indemnifying Party produce the infringement by providing
the element(s) of novelty in such patent claim, or (ii) any
allegedly infringing activity by the IP Indemnified Party based
on the use of the On-Net Transport Services or the Platform
Services, as the case may be, after the IP Indemnifying Party has
notified the IP Indemnified Party of such allegations thereof and
the IP Indemnifying Party has requested that the IP Indemnified
Party use an identified non-infringing substitute.
B. In the event that an injunction is obtained against the use of
the applicable On-Net Transport Service or the Platform Service,
as applicable, or, if in the IP Indemnifying Party's opinion, the
On-Net Transport Service or the Platform Service, as applicable,
is likely to become the subject of a claim of infringement, in
each case that would be subject to the indemnity under Section
21.1.A above, the IP Indemnifying Party shall use commercially
reasonable efforts to:
1. procure for the IP Indemnified Party the right to continue
using the infringing Service or the Platform Service, as the
case may be; or
2. procure, after consultation with the IP Indemnified Party, a
non-infringing substitute that provide substantially similar
functionality, or to modify the On-Net Transport Service or
the Platform Service, as the case may be, to make it
non-infringing in a manner that provides substantially
similar functionality.
C. In the event that the IP Indemnifying Party cannot procure the
rights under Section 21.1.B.1 or substitutes under Section
21.1.B.2, either Party may terminate the affected On-Net
Transport Services or Platform Services, as the case may be.
D. The Parties agree that the provisions of Sections 15.1.C, 15.2,
16.1.C and 16.1.D shall apply to the indemnity under this Section
21.1.
21.2 Intellectual Property Rights. Unless otherwise specifically agreed in
writing by the Parties, each Party shall retain all right, title and
interest in any intellectual property associated with the provision of
Services under this Agreement. If it should be necessary for a Party
to use any patent, copyright, trade secret or other non-trademark
intellectual property of the other Party to avail itself of the
Services to be provided hereunder, the Parties shall negotiate in good
faith a license with respect to such intellectual property. Each Party
acknowledges that the other Party's name is proprietary to the other
Party. This Agreement does not transfer, and confers no right to use,
the name, trademarks (including service marks), patents, copyrights,
trade secrets, other intellectual property, CIC or Confidential
Information of either Party, except as expressly provided herein.
Neither Party shall take any action inconsistent with the intellectual
property rights of the other Party.
ARTICLE 22. INSURANCE
22.1 At all times during the Term of this Agreement, each Party shall carry
and maintain workers' compensation and employer's liability insurance
adequate to insure fully against losses or damages to SBC's or
WilTel's personnel, customers, property or other contractor's
personnel or property caused by their respective activities. If
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requested, each Party will furnish to the other certificates of
insurance or other appropriate documentation (including evidence of
renewal of insurance) evidencing all coverage referenced above and
naming the Company as an additional insured. Each Party will furnish
the other notice of the expiration of cancellation of any insurance
policy required pursuant hereto.
ARTICLE 23. GENERAL TERMS AND CONDITIONS
23.1 Amendment. Neither Party may amend or change the terms of this
Agreement without the prior written consent of the other Party.
23.2 Assignment. Neither Party may assign nor delegate any of its rights or
obligations under this Agreement without the consent of the other
Party, which shall not be unreasonably withheld; provided that SBC may
assign or delegate this Agreement or any portion thereof to any
Affiliate, so long as SBC guarantees the Affiliate's performance;
provided further, that WilTel may assign this Agreement without the
consent of SBC to any Person, other than an SBC Restricted Company, in
connection with a sale of all or substantially all of its assets. This
Agreement shall inure to the benefit of and be binding upon the
Parties and their respective successors and permitted assigns and
permitted transferees (including any such transferee of all or a
substantial portion of the assets of such Party).
23.3 Costs and Expenses. Each Party shall be responsible for its costs and
expenses in connection with the preparation, execution and performance
of this Agreement unless this Agreement expressly provides that any
cost or expense shall be paid by a specific Party.
23.4 Governing Law; Forum. This Agreement shall be interpreted in
accordance with the domestic laws of the State of New York without
reference to its principles of conflicts of Laws. If any provision of
this Agreement is not valid, it will not affect other provisions of
such Agreement. All actions and proceedings arising out of or relating
to this Agreement shall be heard and determined exclusively in a state
court or any federal court sitting in New York County, the State of
New York. The Parties hereto hereby (a) submit to the exclusive
jurisdiction of any such state or federal court sitting in New York
County, the State of New York for the purpose of any action or
proceeding arising out of or relating to this Agreement brought by any
Party hereto and (b) irrevocably waive, and agree not to assert by way
of motion, defense, or otherwise, in any such action or proceeding,
any claim that it is not subject personally to the jurisdiction of the
above-named courts, that its property is exempt or immune from
attachment or execution, that such action or proceeding is brought in
an inconvenient forum, that the venue of such action or proceeding is
improper, or that this Agreement or the transactions contemplated
hereby may not be enforced in or by any of the above-named courts.
23.5 Headings. The captions and headings in this Agreement are strictly for
convenience and shall not be considered in interpreting it or as
amplifying or limiting any of its content. Section titles are for
descriptive purposes only and shall not control or alter the meaning
of this Agreement as set forth in the text.
23.6 No Solicitation. During the term of this Agreement and for a period of
one (1) year thereafter, neither Party nor such Party's Affiliates
shall, directly or indirectly, for itself or on behalf of any other
person, induce or attempt to induce any employee of the other Party's
Affiliates engaged in the activities under this Agreement to leave his
or her employment. However, general employment advertisements in media
of general or industry specific circulation shall be permissible.
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23.7 Relationship of the Parties. The Parties are independent contractors,
and this Agreement does not create a partnership, joint venture, or
other legal entity or relationship between the Parties.
23.8 Rules of Construction. No rule of construction requiring
interpretation against the draftsman hereof shall apply in the
interpretation of this Agreement.
23.9 Severability. If any provision of this Agreement is held invalid or
unenforceable, such invalidity or non-enforceability shall not
invalidate or render unenforceable any other portion of this
Agreement. The entire Agreement will be construed as if it did not
contain the particular invalid or unenforceable provision(s), and the
rights and obligations of WilTel and SBC will be construed and
enforced accordingly.
23.10 No Third Party Beneficiaries. The provisions of this Agreement are
only for the benefit of the Parties hereto, and no other Person may
seek to enforce or benefit from these provisions.
23.11 No Waiver. No waiver by a Party of any breach of or default under this
Agreement shall be deemed to be a waiver of any other breach or
default of any kind or nature, and no acceptance of payment or
performance by a Party after any such breach or default shall be
deemed to be a waiver of any breach or default of this Agreement. No
failure or delay on the part of a Party to exercise any right it may
have shall operate as a waiver of any default.
23.12 Entire Agreement. This Agreement, including the Exhibits, Appendices
and Schedules that are attached hereto and are hereby incorporated as
an integral part of this Agreement, and including any Tariff(s), which
are not inconsistent with this Agreement and thus are an integral part
of this Agreement, and the Termination and Release Agreement and the
other agreements, documents and instruments contemplated hereby or
thereby or otherwise required to be executed and delivered as of the
Effective Date, constitute the entire Agreement between the Parties
with respect to the subject matter hereof and supersede any and all
prior or contemporaneous agreements, whether written or oral. This
Agreement cannot be modified except in writing signed by both Parties.
Without in any way diminishing the nature of this Agreement, including
the Exhibits, Appendices and Schedules, as one integrated,
non-severable agreement, in the event of any inconsistency between or
among any Exhibit, Appendix, Schedule or this Agreement or any
agreement attached to or referenced in any of the foregoing, the text
of this Agreement (excluding the Exhibits, Appendices, Schedules and
any such agreement attached to or referenced in any of the foregoing)
shall control; provided, however, that in the event of any conflict
between any provision contained in this Agreement (excluding the
Exhibits, Appendices, Schedules and any such agreement attached to or
referenced in any of the foregoing) and any provision of the
agreements referenced in Appendix D or the DNA agreement attached to
Annex 1 to Appendix F, the latter provisions shall govern and control.
23.13 MBEs/WBEs. WilTel commits to consider adopting goals for the
participation of MBE/WBE and DVBE firms, which goals would apply to
all annual expenditures by any entity pursuant to this Agreement with
WilTel.
23.14 MBE/WBE/DVBE Cancellation Clause
A. If WilTel develops a participation plan, WilTel agrees that the
knowing and willful misrepresentation of MBE/WBE/DVBE utilization
goals by WilTel to SBC may result in the escalation of such
misrepresentation in accordance with Article 13, but in no event
shall be considered a material breach or default under this
Agreement.
B. For purchases under this Agreement by any SBC Affiliate and any
other entity operating principally in California (collectively
"California Affiliates"), Minority and Women Business Enterprises
("MBEs/WBEs") are defined as businesses which satisfy the
requirements of Section 23.14.D and are certified as MBEs/WBEs by
the California Public Utilities Commission Clearinghouse
("CPUC-certified").
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C. For purchases under this Agreement by any entity that is not a
California Affiliate, MBEs/WBEs are defined as businesses which
satisfy the requirements of Section 23.14.D and are either
CPUC-certified or are certified as MBEs/WBEs by a certifying
agency recognized by SBC.
D. MBEs/WBEs must be at least fifty-one percent (51%) owned by a
minority individual or group or by one or more women (for
publicly held businesses, at least fifty-one percent (51%) of the
stock must be owned by one or more of those individuals), and the
MBEs/WBEs' management and daily business operations must be
controlled by one or more of those individuals, and these
individuals must be either U.S. citizens or legal aliens with
permanent residence status. For the purpose of this definition,
minority group members include male or female Asian Americans,
Black Americans, Filipino Americans, Hispanic Americans, Native
Americans (i.e., American Indians, Eskimos, Aleuts and Native
Hawaiians), Polynesian Americans, and multi-ethnic (i.e., any
combination of MBEs and WBEs where no one specific group has a
fifty-one percent (51%) ownership and control of the business,
but when aggregated, the ownership and control combination meets
or exceeds the fifty-one percent (51%) rule). Solely for purposes
of this Section 23.14, "control" means exercising the power to
make policy decisions. Solely for purposes of this Section 23.14,
"operate" means actively involved in the day-to-day management of
the business and not merely acting as officers or directors.
E. For purchases under this Agreement by California Affiliates,
Disabled Veteran Business Enterprises ("DVBEs") are defined as
business concerns that satisfy the requirements of Section
23.14.G and are certified as DVBEs by the California State Office
of Small and Minority Business (OSMB). The DVBE must be a
resident of the State of California, and must satisfy the
requirements of Section 23.14.G.
F. For purchases under this Agreement by any entity that is not a
California Affiliate, DVBEs are defined as any business concern
that satisfies the requirements of Section 23.14.G below and is
either a defined DVBE for purchases by California Affiliates, or
is certified as a DVBE by a certifying agency recognized by SBC.
G. The DVBE must be (i) a sole proprietorship at least fifty-one
percent (51%) owned by one or more disabled veterans; or (ii) a
publicly-owned business in which at least fifty-one percent (51%)
of the stock is owned by one or more disabled veterans; or (iii)
a subsidiary which is wholly owned by a parent corporation, but
only if at least fifty-one percent (51%) of the voting stock of
the parent corporation is owned by one or more disabled veterans;
or (iv) a joint venture in which at least fifty-one percent (51%)
of the joint venture's management and control and earnings are
held by one or more disabled veterans. In each case, the
management and control of the daily business operations must be
by one or more disabled veterans. A disabled veteran is a veteran
of the military, naval or air service of the United States with a
service-connected disability. Solely for purposes of this Section
23.14, "management and control" means exercising the power to
make policy decisions and actively involved in the day-to-day
management of the business and not merely acting as officers or
directors.
23.15 Rights and Remedies Cumulative. The rights and remedies provided by
this Agreement are cumulative, and the use of any one right or remedy
by any Party shall not preclude or waive the right to use any or all
other remedies. Such rights and remedies are given in addition to any
other rights any Party may have by Law or otherwise.
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23.16 Notices. All Notices hereunder, other than Orders and other
operational communications in connection with the provisioning or
receipt of Services pursuant to the Schedules or Appendices to this
Agreement, shall be deemed to have been duly given when either (i)
delivered in person, or (ii) when received, if provided via electronic
communications, including electronic mail and facsimile
communications, or (iii) when received, if provided by an overnight or
similar delivery service, or (iv) when received, if deposited in the
United States Mail, postage prepaid, return receipt requested, and
addressed as follows:
To WilTel:
----------
Contract Management
WilTel Communications, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
Legal Department
WilTel Communications, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To SBC or Parent:
-----------------
SBC Services, Inc. and SBC Long Distance, LLC
530 ▇▇▇▇▇▇▇▇▇▇, Room 1415 ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: President, SBCLD
Attention: President - Procurement
SBC Services, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Executive Vice President and
Assistant General Counsel
The addresses and facsimile telephone numbers to which Notices may be
given by either Party may be changed by Notice given by such Party to
the other pursuant to this Section. Except as otherwise provided in
this Agreement, if any Notice is to be taken or given on or by a
particular Day, and such Day is not a Business Day, then such Notice
shall be deferred until, or may be taken or given on, the next
Business Day.
23.17 Legal Review. Each Party declares that this Agreement was reviewed by
its legal counsel prior to execution.
23.18 Execution and Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be considered an original. This
Agreement may be executed by facsimile signature, provided that the
Parties shall promptly thereafter, and, in any event within five (5)
Business Days of the Effective Date, deliver to each other copies
hereof bearing their original signatures.
23.19 Payment Guarantee. Parent hereby guarantees to WilTel the payment of
SBC's obligations hereunder, including, without limitation, prompt
payment in full of all undisputed amounts from time to time due and
owing by SBC to WilTel under the terms of this Agreement, in each
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case, in accordance with the terms and subject to the conditions of
this Agreement (such obligations being collectively called the
"Guaranteed Obligations"). Parent hereby expressly waives diligence,
presentment, demand, protest and all notices whatsoever with regard to
any of the Guaranteed Obligations and any requirement that WilTel
exhaust any right, power or remedy or proceed against SBC under this
Agreement. To the maximum extent permitted by applicable law, the
Guaranteed Obligations shall not be affected by any amendment,
modification, waiver of or any consent to departure by SBC from this
Agreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed by their duly authorized representatives.
WILTEL COMMUNICATIONS, LLC SBC SERVICES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------- -----------------------------
Name: Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Title: President Procurement
Date: Date: 6-15-05
SBC Communications Inc. executes this Agreement
solely to evidence its agreement to be bound by
Articles 1 and 23 of this Agreement:
WILTEL LOCAL NETWORK LLC SBC COMMUNICATIONS INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------- -----------------------------
Name: Name:
Title: Title:
Date: Date:
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