CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 1 of 25
THIS SOFTWARE DEVELOPMENT AND SERVICES AGREEMENT (hereinafter "Agreement") is
made by and between BellSouth Telecommunications, Inc., a Georgia corporation,
(hereafter "Customer") with offices located at 675 West Peachtree Street, N.E.,
Atlanta, Georgia 30375, and Predictive Systems, Inc., a Delaware corporation
(hereinafter "Supplier") having an office at 2400 Century Boulevard, Atlanta, GA
30345.
WITNESSETH
WHEREAS, Supplier has software development expertise directly related to the
type of software to be developed pursuant to this Agreement and Customer desires
to engage Supplier to develop, create, test and deliver certain software and
other deliverables; and
WHEREAS, Customer is desirous of obtaining advice and assistance for consultant
or professional services to be provided by Supplier which has sufficient
expertise and experience in rendering such services to meet the particular needs
of Customer.
NOW, THEREFORE, Supplier and Customer, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS.
1.1. "Acceptance" or "Accept" shall mean Customer has determined
the material or Software delivered or Services rendered
conform with the applicable Specifications.
1.2. "Affiliated Company(ies)" shall mean BellSouth Corporation or
any company that is owned in whole or in which is owned not
less than a [*] interest, now or in the future, by BellSouth
Corporation or by one or more of its direct or indirect
subsidiaries, controlled by BellSouth Corporation.
1.3. "Authorized Third Party(ies)" shall mean any third party
retained by Customer to perform services for Customer that has
undertaken: (i) an obligation of non-disclosure consistent
with this Agreement and (ii) an obligation to use information
provided by Customer, including information proprietary to
Supplier, solely to perform services for Customer.
1.4. "Bypass" or "Work Around" shall mean a temporary procedure by
which a user can avoid a reported problem by changes to the
procedures followed or data supplied by the user when using
the Software or a temporary Fix supplied by the Supplier.
1.5. "Customer" shall mean Bellsouth Telecommunications, Inc. or
any Affiliated Company which places an Order pursuant to the
terms and conditions of this Agreement.
1.6. "Deliverables" shall mean any and all system deliverables set
forth in a fully executed Order as defined in Appendix A.
Deliverables include, but are not limited to, any technical
information, drawings, records, reports, data, designs, plans,
specifications, models, prototypes, performance requirements,
inventions, creative works, concepts, and any Software and/or
documentation, implementation, deployment, and/or system
integration delivered pursuant to this Agreement and must be
regarded as Customer's Information hereunder.
1.7. "Development Timetable" shall mean the dates set forth in a
fully executed Order, whereby: (i) the Supplier shall have
completed the development of the Deliverable associated with
such date and (ii) the Supplier shall deliver the Deliverable
to Customer for Acceptance testing.
1.8. "Documentation" shall mean any materials relating to, arising
out of or resulting from Services or Software provided by
Supplier hereunder including, without limitation, such
materials sufficient for: (i) Customer to determine interface
capabilities with other hardware or software and (ii) Customer
to plan for, install, engineer, operate, repair, train Users
and maintain the Software. Documentation includes, but is not
limited to, specifications, drawings, schematics and/or
instructions provided by Supplier.
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 2 of 25
1.9. "Enhancement" shall mean a new version of the Software that
adds substantially new features and functionality in addition
to the original functional characteristics of the Software as
provided to Customer. Said Enhancement shall be deemed to be a
new item of Software, may be subject to additional fees,
acceptance and warranty.
1.10. "Error(s)" shall mean a failure of the Software to conform to
Supplier's marketing literature, the response time as
warranted, the Documentation and operating manuals furnished
by Supplier and the Specifications governing said Software;
where such failure impacts operational performance, functional
performance or licensability.
1.11. "Fix(es)" shall mean corrections of Error(s) in order for the
Software to continue performing functionally in the manner for
which it was acquired and any and all improvements that relate
to performance but do not provide new features or
functionality for the Software.
1.12. "Object Code" shall mean software assembled or compiled in
magnetic or electronic binary form on software media, which is
readable and usable by computers to control or operate a
computer system and/or perform user defined or predetermined
tasks.
1.13. "Order(s)" shall mean a written order issued by Customer and
accepted by Supplier pursuant to this Agreement for Software
and/or Services as is set forth in Appendix A.
1.14. "Services" shall mean and may include, but not be limited to,
Supplier's consultant, professional, technical and engineering
services, Software Maintenance, installation services,
training and on site support ancillary to the acquisition of
Software as described hereafter or in a properly executed
Order.
1.15. "Software" shall mean the computer program or programs
developed by Supplier under this Agreement for Customer which
consist of a set or sets of logical instructions and tables of
information which guides the functions of a processor
including Object Code, Source Code, Documentation and all
Fixes, Upgrades, Enhancements, Error corrections,
modifications, updates and made thereto and provided
hereunder.
1.16. "Software Maintenance" shall include the services described in
Appendix C or in a properly executed Order which, if purchased
by Customer, shall be performed by the Supplier to provide
Fixes, updates, Upgrades, and Enhancements to the Software and
shall include, but not be limited to, corrections of any and
all Errors, regardless of whether such Error is brought to the
attention of Supplier by Customer, another user of comparable
software, or any third party.
1.17. "Source Code" shall mean the computer program expressed in a
source or human readable language consisting of a full source
language statement of the program comprising the Software and
complete maintenance documentation, procedures, flow charts,
schematic diagrams and annotations which comprise the
precoding detail design specification, and all other material
necessary to allow a reasonably skilled programmer or analyst
to maintain and enhance the Software without the assistance of
the Supplier or reference to other material.
1.18. "Specifications" shall mean, with respect to the Software, the
functions, features and performance requirements of the
Software set forth in a fully executed Order.
1.19. "Underlying Components" shall mean Supplier's pre-existing
programs, systems, data, processes, techniques, methodologies,
procedures, know-how and methods of analysis that it utilizes
to provide Services in the performance of this Agreement. No
title or ownership of intellectual property rights, except as
provided herein, is transferred to Customer for Supplier's
Underlying Components.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 3 of 25
1.20. "Upgrade(s)" shall mean an improvement to or a change in the
Software that alters the original functional characteristics
of the Software or corrects errors but does not add
substantially new features to the Software. Said Upgrade shall
be deemed to be a new item of Software and subject to
warranty.
1.21. "User(s)" shall mean Customer, its Authorized Third Parties,
as well as each of their respective agents, representatives
and customers, if any, who use goods or services relating to,
resulting from, or arising out of Services or Software
provided by Supplier hereunder.
2. PROVISIONS APPLICABLE TO DEVELOPED SOFTWARE.
2.1. DEVELOPMENT UNDERTAKING.
2.1.1. Supplier hereby acknowledges Customer's reliance on
Supplier's strict adherence to the Development
Timetable and therefore Supplier shall commit and
utilize sufficient resources to complete development
of the Deliverables in accordance with the
Development Timetable. Supplier shall notify Customer
of any circumstances, when and as they arise, that
may reasonably be anticipated to lead to a material
deviation from the development.
2.1.2. Customer shall, upon reasonable prior written notice,
have access during normal business hours to those
premises where development work under this Agreement
is performed for the purposes of review,
"walk-throughs," and discussions between Customer's
and Supplier's management and personnel concerning
the status and conduct of the work being performed
and to monitor the progress of such work.
2.1.3. Supplier shall designate a technical coordinator who
shall be assigned by Supplier to supervise the
development of the Deliverables and shall be
responsible for technical and performance matters and
the transmission of technical information between the
parties. Such employee shall devote as much of his or
her business time required to fully supervise such
endeavor (hereinafter "Supplier Technical
Coordinator").
2.1.4. Customer shall designate a technical coordinator who
shall be responsible for technical and performance
matters and the transmission of technical information
between the parties (hereinafter "Customer Technical
Coordinator"). Supplier understands and agrees that
the delivery of Deliverables which perform in
accordance with the applicable Specifications on or
before the dates set forth in the Development
Timetable, Order or this Agreement are critical to
Customer's business and that Customer may be
irreparably injured by any delays or failures to
deliver or meet the Specifications. In order to
anticipate and reduce the effect of such delays or
failures, Supplier agrees to notify Customer as soon
as there is any reason to believe that a delivery
will be delayed and/or that the Deliverable scheduled
for delivery will fail to meet its Specifications and
to advise Customer of the projected delay, if any, in
the delivery date and the nature of all anticipated
failures, if any. Supplier understands and agrees
that any such delay in meeting a delivery date or
failure to meet Specifications is a material breach
of this Agreement and will result in a written notice
of such breach. Upon termination following an uncured
material breach by Supplier, Supplier shall promptly
deliver all work in progress to Customer and refund
to Customer all funds paid under this Agreement
except for funds paid for Deliverable(s) already
received and Accepted by Customer and the value of
all work in progress delivered to Customer. Upon such
cancellation, all right, title and interest in such
work in progress shall immediately vest in Customer.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 4 of 25
2.2. DELIVERY.
2.2.1. Immediately upon the completion of each development
milestone as set forth in a fully executed Order,
Supplier shall deliver and install, when necessary,
the Deliverable required by such milestone at the
location specified in the Order and shall deliver
therewith all Documentation and other materials
required to be provided in accordance with such
milestone. Supplier shall notify Customer in writing
of the availability of each portion of the
Deliverable for testing by Customer (the date of such
notification hereinafter being referred to as the
"Acceptance Test Date").
2.3. TESTING AND ACCEPTANCE.
2.3.1. [*]
2.3.2. When a Deliverable successfully passes Acceptance
testing, Customer shall provide Supplier with written
notice of Acceptance for such Deliverable and the
date of such notification shall be the date on which
Supplier shall be entitled to invoice the milestone
payment associated with such Deliverable. A
Deliverable shall be deemed Accepted by Customer if
written notice of Acceptance is not received by
Supplier within the time periods stated in Section
2.3.1.
2.3.3. In the event that Customer determines that a
Deliverable does not conform to and perform in
accordance with the Specifications, Customer shall
notify Supplier in writing of the exact nature of the
non-conformity and Supplier shall modify the
Deliverable within [*] of receipt of such
notification to Supplier, to ensure that it will so
conform and Supplier shall redeliver such Deliverable
to Customer. Customer shall thereafter undertake
further Acceptance testing of equal duration as set
forth in. Failure of any Deliverable to conform with
the Specifications after such second round of
Acceptance testing shall constitute a material breach
by Supplier of this Agreement and any related Orders.
2.4. CHANGE IN THE SCOPE OF WORK.
2.4.1. Customer shall have the right to make changes in the
scope of the work to be performed under this
Agreement as set forth in a fully executed Order or
any other item which would affect the ability of the
Deliverables to meet Customer's needs. All changes
shall be authorized and made in writing by Customer's
Technical Coordinator.
2.4.2. Supplier shall not make any changes in the scope of
the work to be performed under this Agreement which
have not been authorized in writing by the Customer's
Technical Coordinator. Any changes in the scope of
the work made by Supplier that have not been approved
in writing by the Customer's Technical Coordinator
shall not excuse any delay in the Development
Timetable or form the basis for any claim or
rationale to increase Supplier's pricing.
2.4.3. If Supplier receives written instructions, directions
or requests to make any change or changes that will
result in a change or changes in the scope of the
work to be performed under this Agreement from anyone
other than the Customer's Technical Coordinator,
Supplier shall promptly notify the Customer's
Technical Coordinator and provide a description of
the proposed change, or changes, the length of the
delay, if any, that will result from the change or
changes and the increased cost, if any, that will
result from
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 5 of 25
such change or changes. Supplier shall not proceed to
implement any such change without written
authorization from the Customer's Technical
Coordinator.
2.4.4. If Supplier receives instructions, directions or
requests from Customer's Technical Coordinator to
make any change or changes that will result in a
change or changes in the scope of the work to be
performed under this Agreement, Supplier shall
promptly provide Customer's Technical Coordinator
with the length of the delay, if any, that will
result from the change or changes and the increased
cost, if any, that will result from such change or
changes. Supplier shall not proceed to implement any
such change without the written approval of
Customer's Technical Coordinator of the delay, if
any, or increased cost, if any. Any such changes that
are made by Supplier without written approval of
Customer's Technical Coordinator's shall not excuse
any delay in a delivery date or form the basis for
any claim or rationale to increase Supplier's
pricing.
2.4.5. Any delays in the Development Timetable date that are
approved in writing by the Customer's Technical
Coordinator shall be excused and any increase in the
cost approved in writing by the Customer's Technical
Coordinator shall be added to Supplier's price.
2.5. STATUS REPORTS.
2.5.1. Supplier understands and agrees that the time frames
for the project as set forth in the Development
Timetable are critical to Customer's business. In
order to keep Customer appraised of Supplier's
schedule and to allow Customer to effectively manage
Customer's portions of this project, [*]. Supplier
understands and agrees that failure to timely deliver
a status report is a breach by Supplier of this
Agreement. Notwithstanding any cure period set forth
elsewhere in this Agreement and due to the time
sensitivity of these status reports, Supplier hereby
agrees that the cure period for its failure to timely
deliver a status report shall be [*] following
receipt of written notification by Customer that
Supplier has not timely delivered the [*] status
report.
2.6. TRAINING.
2.6.1. [*]
2.6.2. If reasonable on-line training and help modules for
training are not available and where analysis, design
and development of such items are not feasible and
practical, if requested by Customer, Supplier shall
then at prices as mutually agreed upon:
(i). Provide instructors and the necessary
instructional material which meets mutually
agreed upon standards, at mutually agreed
upon locations and times, to train
Customer's personnel in the installation,
operation, use and maintenance of Software
furnished hereunder, and/or
(ii).Provide Customer and/or User's with
training modules or manuals, including any
succeeding changes thereto, and any
necessary assistance covering those areas
outlined above in sufficient detail, format
and quantity to allow Customer and/or User's
to develop and conduct its own training
program. Customer may reproduce such
training modules or manuals only for
internal use hereunder with no restrictions
or charges.
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 6 of 25
3. GENERAL PROVISIONS APPLICABLE TO THE ENTIRE AGREEMENT.
3.1. TERM.
3.1.1. This Agreement shall commence and be effective on the
effective date specified in this Agreement
("Effective Date"), and [*].
3.2. TERMINATION FOR CONVENIENCE.
3.2.1. Customer may upon[*]
3.2.2. Customer may terminate Software Maintenance, for its
own convenience and without cause, by providing
written notice to Supplier at least thirty (30) days
prior to the commencement of any renewal term for
Software Maintenance.
3.2.3. [*] provided there are no outstanding Orders pursuant
to which Services are to be performed.
3.3. TERMINATION FOR CAUSE.
3.3.1. If either party hereto breaches any provision of this
Agreement or any Order(s), and such breach is not
cured within [*] after the breaching party receives
written notice thereof, then in addition to all other
rights and remedies of law or equity or otherwise,
the injured party shall have the right to terminate
this Agreement and/or any such Order(s), as
applicable, without any further obligation or
liability. Failure to terminate this Agreement and/or
any Order(s) following a breach which continues
longer than such [*] period shall not constitute a
waiver of the non-breaching party's rights under this
section provided such breach has not been cured.
3.4. TERMINATION OF THIS AGREEMENT.
3.4.1. Upon termination of this Agreement, each party shall,
upon the request of the other: (i) return all papers,
materials and properties of the other held by such
party, (ii) will provide reasonable assistance in the
termination of this Agreement, as may be necessary
for the orderly, non-disrupted business continuation
of each party.
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 7 of 25
3.5. PRICE.
3.5.1. Price for Software, Software Maintenance and/or
Services, including any applicable discount
schedules, shall be as shown in a properly executed
Order or a shown in Appendix B, "PRICE SCHEDULE", as
amended, in effect on the date the Order is issued.
3.5.2. With respect to Services and development of Software,
rates concerning overtime and second or third shift
work will be negotiated between Supplier and Customer
and specified in each individual Order when
applicable. All authorization concerning payment by
Customer for travel or living expenses shall be
specified in each individual Order. With respect to
hours worked, Customer shall not be obligated to pay
for Supplier's employees' lost time unless the lost
time is of Customer's causing. If work is performed
on Customer's premises, Supplier's working hours when
working on Customer's premises, in conjunction with
any Order, shall coincide with the Customer's working
hours as they may be established from time to time
unless otherwise defined in the Order. Supplier's
employees' vacations and holidays shall be paid by
Supplier in accordance with Supplier's policies.
Supplier shall schedule vacations for its employees
so as not to interfere with or delay the Services to
be provided for Customer under the Order.
3.5.3. Customer shall specify a limit on Services to be
provided under an Order by designating a monetary
amount and/or time limit. Supplier shall not perform
Services beyond the point where billing would exceed
the specified limit without additional authorization
in writing from Customer. Supplier agrees to notify
the Customer Technical Coordinator when [*] specified
in an Order is reached. Any delay or failure to meet
the Specifications due to a work stoppage pursuant to
this section shall not be considered a breach of this
Agreement.
3.5.4. [*]
3.5.5. [*]
3.6. TERMS OF PAYMENT.
3.6.1. Payment for Software and/or Services under any Order
shall be due thirty (30) days after the later of the
date: (i) the Acceptance of Software or Services
occurs, or Software Maintenance commences, as
applicable or, (ii) the receipt of a written invoice
from Supplier. Renewal fees, if any, for Software
Maintenance shall be due thirty (30) days after the
later of the date: (i) the renewal term for or
Software Maintenance commences, as applicable or,
(ii) the receipt of a written invoice from Supplier..
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 8 of 25
3.6.2. [*] Customer, at its option, may, without penalty,
refuse payment on any invoice therefor, or Customer
may elect to pay any portions of an invoice without
forfeiting its right to exercise nonpayment of other
portions. Supplier shall investigate and issue
corrected invoices, if required, within thirty (30)
days after receiving written notification from
Customer.
3.6.3. In the event a portion of any invoice is paid and
subsequently disputed by Customer, Supplier shall
investigate and resolve such dispute within thirty
(30) days of notification from Customer. Supplier
shall, within forty-five (45) days following
notification from Customer, at Customer's option: (i)
refund any overpayment to Customer or (ii) credit
such overpayment against amounts owed by Customer to
Supplier.
3.6.4. Any credits or refunds due Customer shall, within
thirty (30) days after request from Customer and at
Customer's sole discretion, (i) be applied by
Supplier against Supplier's invoices; or (ii) be paid
by Supplier to Customer in the form of a certified
check in U.S. currency. If Customer has not received
such credits within sixty (60) days of request, then
Customer may deduct such credits from any other
amounts owed Supplier.
3.7. ORDERS.
3.7.1. This Agreement contemplates the future execution by
Customer and Supplier of one or more written Orders.
Each Order shall be executed by both parties and
shall contain, at a minimum, the information
specified in Appendix A. All transactions between
Customer and Supplier during the term of this
Agreement shall be covered by this Agreement and any
applicable Order unless the parties agree otherwise
in writing. Each properly executed Order shall be
deemed, upon its execution, to be incorporated into
this Agreement.
3.7.2. Orders shall be deemed accepted by Supplier unless
written notice to the contrary is received within two
(2) weeks from the date the Order is delivered. This
Agreement shall control over typed, stamped, or
pre-printed portions of Supplier's and Customer's
Orders or acknowledgments, which conflict or
supplement the terms and conditions herein.
3.7.3. In the event, Customer desires to alter the standards
or Specifications with respect to any Order after
such Order has been issued and accepted, Customer
shall notify Supplier in writing of such changes in
standard and/or Specifications and Supplier shall
advise Customer in writing of any adjustment of the
payment rate or time schedule referred to in the
original Order. In the event such adjustment is
acceptable to Customer, Customer shall issue a new or
revised Order.
3.8. AFFILIATED COMPANY ORDER.
3.8.1. Any Affiliated Company may place Orders under this
Agreement for Software and/or to procure Services.
Such Orders are subject to the terms and conditions
of this Agreement and as to such Orders, the
Affiliated Company becomes "Customer" hereunder. Each
Order shall constitute a separate, distinct and
independent contract between Supplier and the
Affiliated Company placing the Order and the
Affiliated Company shall be the sole obligor with
regard to meeting the obligations of such Order.
3.9. TAXES.
3.9.1. Supplier shall add to the invoice an amount equal to
any applicable taxes, local, state or federal,
however designated, that may be validly levied or
based upon this Agreement or
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 9 of 25
upon the Material and/or Services furnished
hereunder. Taxes excluded and not applicable include:
(i) Ad valorem personal property taxes;
(ii) State and local privilege and excise
taxes based on gross revenue;
(iii) Taxes based on or measured by
Supplier's net income; and
(iv) Any taxes or amounts in lieu thereof
paid or payable by Supplier in respect
of the foregoing excluded items.
3.9.2. Supplier shall bill applicable taxes as separate
items on Supplier's invoices and shall not include
them in the purchase price. Customer may have
Supplier contest with the imposing jurisdiction, at
Customer's expense, any such taxes that Customer
reasonably deems are improperly levied.
3.9.3. Supplier must collect all appropriate state and local
sales and use taxes from Customer on all sales of
taxable tangible personal property and taxable
services. The taxing situs for tangible personal
property is the shipped-to address. Therefore,
suppliers that do not have "nexus", the legal
requirement to collect tax in a given state or local
taxing jurisdiction, must, as a result of this
Agreement, voluntarily register with all appropriate
state and local taxing jurisdictions and collect and
remit all applicable taxes.
3.9.4. Customer shall not pay or otherwise be liable or
responsible for any penalty, additional tax, costs or
interest assessed or levied by any taxing authority
resulting from Supplier's failure to file any return,
form, or information statement such taxing authority
requires. Supplier hereby indemnifies, defends and
holds Customer harmless against any such
requirements.
3.10. RECORDS AND AUDITS.
3.10.1. Supplier shall maintain accurate and complete records
of all amounts billable to and payments made by
Customer hereunder following generally recognized
commercial accounting practices. Supplier shall
retain such records for [*] from the date of final
payment for Software and/or Services covered by this
Agreement. Customer, its authorized agents or
representative may inspect and audit Supplier's
records relevant to this Agreement during normal
business hours and upon reasonable prior written
notice. Audits shall not unreasonably disrupt
Supplier's business operations.
3.11. RISK OF LOSS.
3.11.1. Title and risk of loss or damage to Software shall
vest in Customer when Customer receives the
Deliverables. If this Agreement calls for additional
Services, such as installation, or the like that
Supplier performs after delivery, Supplier shall
retain risk of loss or damage to the Deliverables
until the Customer accepts the additional Services.
3.12. OWNERSHIP OF DELIVERABLES.
3.12.1. [*]
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 10 of 25
3.12.2. [*]
3.12.3. [*]
3.12.4. [*]
3.12.5. [*]
3.12.6. [*]
3.13. SUPPLIER'S INFORMATION.
3.13.1. Scope of Supplier's Information. Customer
acknowledges that Supplier may need to provide
Customer with certain information and material that
is the Supplier's confidential, proprietary or trade
secret information. As used herein, "Supplier's
Information" may include information and documents
disclosed by the Supplier in the course of this
Agreement such as by way of example, drawings,
sketches, schematics, models, samples, tools,
algorithms, technical or business information.
Supplier shall provide a detailed description of
Supplier's Information in the applicable Order. All
Supplier's Information shall be in writing or other
tangible form and clearly marked with a confidential,
private or proprietary legend. Supplier's Information
conveyed orally
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 11 of 25
shall be designated as proprietary at the time of
disclosure and shall be reduced to writing within ten
(10) business days.
3.13.2. Use of Supplier's Information. Customer agrees to
take all steps reasonably necessary to hold in trust
and confidence Supplier's Information. Customer
hereby agrees to hold such Supplier's Information in
strict confidence, not to disclose it to third
parties or to use it, in any way, commercially or
otherwise, other than as permitted under this
Agreement. Customer will limit the disclosure of
Supplier's Information to employees, consultants,
agents, contractors, Affiliated Companies and
representatives with a need to know who will not be
considered as "third parties" and who: (i) have been
advised of the proprietary nature thereof; and (ii)
have acknowledged the express obligation to maintain
such confidentiality. Customer's obligations set
forth herein shall remain in effect for two (2) years
from the receipt of Supplier's Information considered
or deemed to be confidential information, but such
obligation of confidentiality will not expire for
Supplier's Information considered or deemed to be a
trade secret under applicable law.
3.13.3. Exceptions. Notwithstanding the other provisions of
this Agreement, nothing received by Customer from
Supplier will be considered to be Supplier's
Information if: (i) it has been published or is
otherwise available to the public other than by a
breach of this Agreement; (ii) it has been rightfully
and lawfully received by Customer from a third party
without confidential limitations; (iii) it has been
independently developed by Customer by personnel
having no access to such Supplier's Information; (iv)
it was known by Customer prior to its first receipt
from Supplier; (v) it is hereafter disclosed by
Supplier without restriction on further disclosure;
or (vi) it is disclosed to any governmental agency or
court of competent jurisdiction by written order,
subpoena or decree, or by operation of law, provided
Customer has given prior notice to Supplier in order
that Supplier may attempt to obtain a protective
order limiting disclosure and use of the information
disclosed.
3.14. CUSTOMER'S INFORMATION.
3.14.1. Supplier acknowledges that Supplier may acquire
information and material that is the Customer's
confidential, proprietary or trade secret
information. As used herein, "Customer's Information"
includes, but is not limited to, all information and
documents disclosed by the Customer, whether written
or oral, in the course of this Agreement or in
contemplation hereof including, without limitation,
all Specifications, drawings, sketches, schematics,
models, samples, tools, algorithms, technical or
business information, research and development,
production and engineering processes, costs, profit
and margin information, Customer lists, marketing,
production and future business plans and any
information or materials of Customer's agents,
subcontractors or other suppliers received from
Customer.
3.14.2. Supplier agrees to take all steps reasonably
necessary to hold in trust and confidence the
Customer's Information. Supplier hereby agrees to
hold Customer's Information in strict confidence, not
to disclose it to third parties or to use it, in any
way, commercially or otherwise, other than as
permitted under this Agreement. Supplier will limit
the disclosure of the Customer's Information to
employees with a need to know who: (i) have been
advised of the proprietary nature thereof; and (ii)
have been contractually obligated to maintain such
confidentiality. Supplier's obligations set forth
herein shall remain in effect for two (2) years from
the receipt of Customer's Information considered or
deemed to be
Agreement No. R12450A
Effective Date: January 15, 2001
Page 12 of 25
confidential information, but such obligation of
confidentiality will not expire for Customer's
Information considered or deemed to be a trade secret
under applicable law.
3.14.3. Notwithstanding the other provisions of this
Agreement, nothing received by Supplier from Customer
will be considered to be Customer's Information if:
(i) it has been published or is otherwise available
to the public other than by a breach of this
Agreement; (ii) it has been rightfully and lawfully
received by Supplier from a third party without
limitations or restrictions on its use or disclosure;
(iii) it has been independently developed by Supplier
by personnel having no access to Customer's
Information; (iv) it was known by Supplier prior to
its first receipt from Customer and such knowledge
can be substantiated by reasonable documentation; (v)
it is hereafter disclosed by Customer without
restriction on further disclosure; or (vi) it is
required to be disclosed to any governmental agency
or a court of competent jurisdiction pursuant to a
written order, subpoena or by operation of law,
provided Supplier has given Customer prior advance
written notice in order that Customer may attempt to
obtain a protective order limiting disclosure and use
of the information disclosed.
3.14.4. Supplier hereby agrees that every individual person
including but not limited to employees,
subcontractors, agents, representatives and other
third parties who perform under this Agreement shall
execute the appropriate documents to undertake
obligations of confidentiality consistent with the
terms set forth herein. Supplier hereby agrees to
provide evidence of such duly executed documents
and/or copies to Customer upon request.
3.15. PATENT AND OTHER PROPRIETARY RIGHTS INDEMNIFICATION.
3.15.1. Supplier shall indemnify, defend and hold
Customer harmless, at Supplier's expense,
against any claim, suit or proceeding
resulting from, relating to or arising out
of a claim that any use of the Deliverables,
Software and/or Services constitutes an
infringement or contributory infringement of
a patent, copyright, trademark or other
proprietary right or a misappropriation of a
trade secret of a third party.
3.15.2. Supplier will not be liable to Customer: (i)
for any infringement arising out of the
combination of the Deliverable with hardware
or software where such combination is not
known or anticipated by Supplier provided
said infringement would not have occurred
but for such combination; or (ii) for any
claim of infringement arising out of any
modification or enhancement to the
Deliverable neither made nor authorized by
Supplier provided the claim would have been
avoided by the absence of such
modification. Supplier's obligation to
indemnify shall include, without limitation,
an obligation to pay any reasonable costs
including, but not limited to, reasonable
attorneys' fees, expert witness fees,
expenses, damages awarded to third parties
and costs incurred by Customer. Supplier may
settle, at Supplier's sole expense, any
claim, suit or other action for which
Supplier is responsible under this section
provided that such settlement shall not
limit, unduly interfere or otherwise
adversely affect the rights granted herein
or Supplier's obligations under this
Agreement or impose any additional liability
on Customer. Customer reserves the right to
employ counsel at its own expense and
participate in the defense and/or settlement
of any claim.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 13 of 25
3.15.3. Customer shall notify Supplier in writing of
any claim of infringement it becomes aware
of and for which it believes Supplier is
responsible for under this section. Customer
shall provide Supplier with reasonable
assistance in the defense of any such claim.
Within thirty (30) days from receipt of
notice from Customer of an alleged
infringement claim, Supplier shall
acknowledge receipt of such notice to
Customer in writing and provide Customer its
position with respect to the allegations.
3.15.4. Upon receipt of notice of an alleged
infringement and if, in Supplier's opinion,
such a claim is likely, or alternatively, if
Customer's rights hereunder are restricted
by Supplier or a valid court order, then
Supplier shall at its option and sole
expense: (i) procure the right to continue
using the alleged infringing material; (ii)
replace the material with non-infringing
material which is equivalent in features,
functionality and quality; (iii) modify the
material to make it non-infringing while
retaining all features, functionality and
quality, or (iv) if Supplier, after using
all commercially reasonable efforts is
unable to accomplish the foregoing remedies
and such failure occurs (a) during the
initial two (2) year period following
delivery of the affected Deliverables and/or
Services, then Supplier shall promptly issue
to Customer a refund of all amounts paid by
Customer for the affected Deliverables
and/or Services; or (b) during the period
after the initial two (2) year period
following delivery of the affected
Deliverables and/or Services, then Supplier
shall promptly issue to Customer a pro-rata
refund of all amounts paid by Customer for
the affected Deliverables and/or Services,
based on five (5) year straight-line
depreciation from the date of delivery of
the affected Deliverables and/or Services.
3.16. INDEMNITY.
3.16.1. Supplier and Customer mutually agree to indemnify,
defend, and hold each other harmless from any and all
liabilities, causes of action, lawsuits, penalties,
claims or demands (including the costs, expenses and
reasonable attorneys' fees on account thereof) that
may be made by:
(i) Anyone for injuries of any kind, including, but
not limited to, personal injury, death, property
damage and theft, arising out of or resulting
from the other party 's negligent or willful
acts or omissions or those of persons furnished
thereby , its agents or subcontractors or
resulting from use of the Work Product,
Deliverables and/or Services furnished hereunder
or resulting from a failure to perform their
obligations hereunder; or
(ii) Any of either Supplier's or Customer's, their
agent's or subcontractor's employees or former
employees for which the Supplier's or
Customer's, their agents' or subcontractors'
liability to such employee or former employee
under the state Workers' Compensation laws or an
Employer's Liability policy, premises liability
principles or any other law or form of legal
duty or obligation; and
(iii) Either Supplier's or Customer's, their agent's
or subcontractor's employees or former
employees, including applicants at Customer's
job site, for any and all claims arising out of
the employment relationship with respect to
performing under this Agreement. This includes,
but is not limited to, employment discrimination
charges and actions arising under Title VII of
The Civil Rights Act of 1964, as amended; The
Equal Pay Act; The Age Discrimination In
Employment Act, as amended; The
Agreement No. R12450A
Effective Date: January 15, 2001
Page 14 of 25
Rehabilitation Act; The Americans with
Disabilities Act; The Fair Labor Standards Act;
The National Labor Relations Act; and any other
applicable law.
3.16.2. Supplier or Customer, at their own expense, agrees to
defend the other, at their request, against any such
liability, cause of action, lawsuit, penalty, claim,
or demand, administrative proceeding or lawsuit,
including any in which the other is named as an
"employer" or "joint employer" with Supplier or
Customer, as applicable. The parties hereto shall
notify the other promptly of any written claims or
demands against them for which the other is
responsible hereunder.
3.16.3. The foregoing indemnity shall be in addition to any
other indemnity obligations of Supplier and Customer
set forth in this Agreement.
3.17. WARRANTY.
3.17.1. [*]
3.17.2. Warranty of Software Integrity. Supplier warrants
computer code and/or Software created or modified
for, or otherwise supplied to Customer
(i) Contains only what is stated in the
Documentation provided,
(ii) Is free of any master access key (ID,
password, trap door, Trojan horse, back
door, etc.) to the system,
(iii) Has been checked for a computer virus or
other destructive code using a regularly
updated software package designed for such
purpose and has been inspected by Supplier's
authorized personnel, and
(iv) Is not known by Supplier, its employees,
contractors or subcontractors to:
(a) Contain a computer virus, worm,
other destructive code, expiration
date or master access key,
(b) Degrade security by interfering with
or modifying the normal functions of
the operating system on which the
application will reside, and/or
(c) Degrade security of any application
code or other software.
3.17.3. Warranty of Title and Non-infringement of Software.
Supplier warrants and represents that it has full
power and authority to grant any rights and licenses
granted hereunder with respect to the Software,
Deliverables and Documentation, and neither such
license or use as permitted hereunder will in any way
constitute an infringement or other violation of any
trademark, copyright, patent, trade secret or other
intellectual property right of any third party.
Supplier further warrants and represents that the
Software, Deliverables and Documentation provided
hereunder shall be free and clear of all claims,
security interests, liens and encumbrances of any
kind.
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 15 of 25
3.17.4. Warranty for Year 2000. Supplier warrants and
represents that all Software delivered hereunder (i)
will accurately record, store, process and display
calendar dates falling on or after January 1, 2000,
in the same manner, and with the same functionality
as such Software records, stores, processes and
displays calendar dates falling on or before December
31, 1999; and (ii) shall include without limitation
date data century recognition, calculations that
accommodate same century and multi-century formulas
and date values, and date data interface values that
reflect the century.
3.17.5. Warranty for Services. Supplier warrants and
represents to Customer that its Services will be
performed in a good and professional manner
conforming to industry standards and practices and in
conformance with any Specifications or standards set
forth for such Services in the applicable Order.
Customer's Technical Coordinator shall in his/her
reasonable discretion determine the quality and
acceptability of the Services performed pursuant to
this Agreement. If Supplier is unable to perform the
Services as warranted, Customer shall, in its sole
discretion, be entitled to re-performance of such
Services free of cost to Customer or a refund of any
monies paid for such Services.
3.18. LIMITATION OF LIABILITY.
3.18.1. For purposes of indemnification by Customer,
"Supplier" shall mean Supplier, Supplier's parent and
any affiliated and subsidiary companies, and the
employees, officers, agents, and subcontractors of
all of them.
3.18.2. [*]
3.18.3. [*] in no event shall either party be liable for
indirect, incidental, consequential, reliance or
special damages, including, without limitation,
damages for harm to business, lost profits, lost
savings or lost revenues, whether or not Supplier has
been advised of such damages.
3.19. ASSIGNMENT BY CUSTOMER.
3.19.1. Customer shall have the right to assign this
Agreement or any Order(s) and to assign its rights
and delegate its duties under this Agreement or any
Order(s) either in whole or in part, at any time and
without Supplier's consent, to any present or future
Affiliated Company or successor company of Customer
or to a third party supplier of technology services
in connection with the outsourcing of any or all of
Customer's information technology services to that
third party. Customer shall give Supplier prior
written notice of such assignment or delegation. The
assignment shall neither affect or diminish any
rights or duties that Supplier may then or thereafter
have as to Order(s) executed by Customer and Supplier
prior to the effective date of the assignment.
3.20. ASSIGNMENT BY SUPPLIER.
3.20.1. Supplier may sell Supplier's corporation to any
individual, company or corporation without
restriction including a sale of substantially all of
its assets; however, Supplier shall obtain Customer's
prior written consent before Supplier assigns,
subcontracts or
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 16 of 25
otherwise delegates the performance of any Services,
in whole or in part, or assigns any of its rights,
interests or obligations hereunder. Such consent from
Customer shall not be unreasonably denied or
withheld. Supplier shall notify Customer in writing
with notice of Supplier's intent to assign, at least
thirty (30) days before assignment. Any assignment to
which Customer has not consented shall be null and
void, except where Supplier assigns its rights to
receive monies pursuant to this Agreement. In such
case, Supplier only needs to notify Customer in
writing of such assignment. However, Supplier cannot
assign monies due if Supplier tries to transfer to
the assignee any of Supplier's other rights or
obligations hereunder. Supplier shall not make an
assignment that prevents Customer from dealing solely
and directly with Supplier on all matters pertaining
to this Agreement. Such matters include amending this
Agreement and/or settling amounts due either party by
the other hereunder. Supplier shall not subcontract
work or Services to be performed without Customer's
prior written permission, such permission of which
shall not be unreasonably withheld.
3.21. INDEPENDENT CONTRACTOR.
3.21.1. Supplier shall perform all work in connection with
the Software and/or Services described in this
Agreement as an independent contractor and not as the
agent or employee of Customer. All persons furnished
by Supplier shall be for all purposes solely the
Supplier's employees or agents and shall not be
deemed to be employees of Customer for any purpose
whatsoever. Supplier shall furnish, employ, and have
exclusive control of all persons to be engaged in
performing Services under this Agreement and shall
prescribe and control the means and methods of
performing such Services by providing adequate and
proper supervision. Supplier shall be solely
responsible for compliance with all rules, laws, and
regulations relating to employment of labor, hours of
labor, working conditions, unless working on
Customer's premises, payment of wages, and payment of
taxes, such as employment, social security, and other
payroll taxes, including applicable contributions
from such person when required by law.
3.21.2. [*]
3.22. PUBLICITY/LICENSES.
3.22.1. Supplier agrees to submit to Customer all
advertising, sales promotion, press releases, and
other publicity matters relating to this Agreement
mentioning or implying the trade names, logos,
trademarks or service marks (collectively called
"BellSouth Marks") of BellSouth Corporation and/or
any of its Affiliated Companies or language from
which the connection of said BellSouth Marks
therewith may be inferred or implied, or mentioning
or implying the names of any personnel of BellSouth
Corporation and/or any of its Affiliated Companies.
Supplier further agrees not to publish or use such
advertising, sales promotions, press releases, or
publicity matters without Customer's prior written
consent.
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 17 of 25
3.22.2. Customer agrees to submit to Supplier all
advertising, sales promotion, press releases, and
other publicity matters relating to this Agreement
mentioning or implying the trade names, logos,
trademarks or service marks (collectively called
"Predictive Marks") of Predictive Systems, Inc.
and/or any of its affiliated companies or language
from which the connection of said Predictive Marks
therewith may be inferred or implied, or mentioning
or implying the names of any personnel of Predictive
Systems, Inc. and/or any of its affiliated companies.
Customer further agrees not to publish or use such
advertising, sales promotions, press releases, or
publicity matters without Supplier's prior written
consent.
3.22.3. No license, express or implied, is granted to
Supplier for any trademark, patent, copyright, trade
secret or any other intellectual property or
applications therefor which is now or may hereafter
be owned by BellSouth Corporation or any BellSouth
company.
3.23. NONDISCRIMINATION COMPLIANCE.
3.23.1. Supplier agrees to comply with the applicable
provisions of the "NONDISCRIMINATION COMPLIANCE
AGREEMENT" set forth in Appendix D.
3.23.2. Supplier shall use good faith efforts, in accordance
with items 5 and 6 of the Nondiscrimination
Compliance Agreement. [*] Appendix G.
3.23.3. In the event Supplier is unable to attain the
subcontractor expenditure goals specified herein,
documentation of efforts shall be provided to
Customer's Supplier Diversity Group, within its
Supply Chain Management organization. The Supplier
Diversity Group will provide support, as needed, in
Supplier's efforts to identify qualified
subcontractors during the term of this Agreement.
3.24. COMPLIANCE WITH LAWS.
3.24.1. Supplier shall comply with all applicable federal,
state, county and local laws, orders, rules,
ordinances, regulations, and codes in connection with
this Agreement including, but not limited to,
Supplier's obligations as an employer regarding the
health, safety and payment of its employees.
Supplier's compliance shall also include identifying
and procuring the required permits, certificates,
approvals, and inspections in Supplier's performance
under this Agreement. Notwithstanding whether a
Specification is furnished, under this Agreement,
Supplier shall comply with all applicable laws
regarding the construction, packaging, labeling and
registration of Software and/or Services or
containers. Supplier shall indemnify, defend and hold
Customer harmless against, any claim, loss,
liability, cost or damage sustained because of
Supplier's noncompliance.
3.25. SECURITY, ACCESS AND SAFETY REQUIREMENTS
3.25.1. Customer reserves the right to reasonably conduct,
for security reasons, a background investigation on
the Supplier and its principal parties or personnel,
and Supplier agrees to cooperate with the Customer in
this endeavor and to provide any necessary
information. Supplier acknowledges that Customer is
under no obligation to provide a copy of the
background investigation to Supplier but such
information shall be considered by Customer to be
Supplier's Information.
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 18 of 25
3.25.2. [*]
3.25.3. [*]
3.25.4. Supplier shall not assign to Customer's premises,
without advising Customer of the nature and gravity
of the offense, any personnel convicted of a
misdemeanor relating to computer security or any
personnel with a record of felony conviction of any
kind.
3.25.5. Supplier shall comply with Customer's security,
access and safety requirements and shall require its
employees, agents and subcontractors, while on
Customer's premises, to comply with the same.
3.25.6. [*]
3.26. RELEASES VOID.
3.26.1. Neither party shall require waivers or releases of
any personal rights from representatives of the other
when visiting Supplier's and Customer's respective
premises. Neither party shall require any
representative of the other party to sign a personal
nondisclosure agreement. Supplier, Customer, or any
third party shall not plead any such releases or
waivers in any action or proceeding.
3.27. CHOICE OF LAW/VENUE.
3.27.1. The laws of the State of [*] shall govern the
validity, construction, interpretation and
performance of this Agreement. The jurisdictional
venue for any proceedings involving this Agreement
shall be held in [*].
3.27.2. The parties will attempt in good faith to resolve any
controversy or claim arising out of or relating to
this Agreement by mediation. Such mediation shall
comply with the Center for Public Resources most
current Model ADR Procedures for Mediation of
Business Disputes. If such mediation procedures fail
to resolve the matter within sixty (60) days of
mediation procedure commencement (which either party
may extend by agreement with the other), or if either
party will not participate in mediation, then
arbitration shall settle the controversy. Such
arbitration shall comply with the Center for Public
Resources Rules for Non-Administered Arbitration of
Business Disputes. The parties shall select a sole
arbitrator acceptable to both parties sufficiently
knowledgeable in the areas of law necessary to
arbitrate the controversy. Such sole arbitrator shall
arbitrate the controversy. The United States
Arbitration Act, 9 U.S.C. shall govern the
arbitration, and judgment upon the award rendered by
the arbitrator may be entered by any court having
jurisdiction
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 19 of 25
thereof. The arbitrator is not empowered to award
damages in excess of actual damages, including
punitive damages. The arbitrator shall determine
issues for resolution but may not limit, expand or
otherwise modify the terms of the Agreement. The
arbitrator is not empowered to act or make any award
other than an award based solely on the rights and
obligations of the parties prior to any termination.
3.27.3. Each party shall bear its own costs and expenses,
except that the parties will share equally the
compensation and expenses of the mediator and/or
arbitrator. This requirement for mediation and
arbitration does not constitute a waiver of any right
of termination under this Agreement. A request to a
court for interim measures shall not waive the
obligation to mediate and/or arbitrate. The parties,
their representatives, other participants and the
mediator and arbitrator shall hold in confidence the
existence, content and result of mediation and/or
arbitration.
3.28. NON-WAIVER.
3.28.1. No waiver or failure to exercise any option, right or
privilege under the terms of this Agreement on any
occasion or occasions shall be construed to be a
waiver of the same or any other option, right or
privilege on any other occasion.
3.29. FORCE MAJEURE.
3.29.1. Neither party shall be responsible for any delay or
failure in performing any part of this Agreement when
it is caused by fire, flood, explosion, war, strike,
embargo, government requirement, civil or military
authority, act of God, act or omission of carriers or
other similar causes beyond its control (hereinafter
collectively called "Condition"). If any such
Condition occurs, the party delayed or unable to
perform shall give immediate notice to the other
party, and the party affected by the other's delay or
inability to perform may elect to terminate the
affected Order, or delay performance of such Order
until the Condition ceases. Nothing set forth herein
shall be construed to limit or restrict Customer's or
Supplier's right to terminate the Agreement and
Order(s) in accordance with the provisions of Article
3. The parties agree that any delay or failure to
perform due to Section 3.17 shall not be considered a
Condition.
3.30. INSURANCE.
3.30.1. During the term of this Agreement, Supplier shall
maintain all insurance and/or bonds required by law
or this Agreement, including but not limited to the
following:
(i). Adequate Worker's Compensation and related
insurance required by Customer and
prescribed by the law of any state in which
the work is to be performed;
(ii). Employer's liability insurance with limits
of at least $[*] for each occurrence;
(iii). Commercial general liability insurance,
including contractual liability, products
liability and completed operations coverage,
and if applicable, comprehensive motor
vehicle liability insurance. Each shall have
limits of at least $[*] for bodily injury,
including death, to any one person, $[*] as
a result of any one occurrence, and $[*] for
each occurrence of property damage; and
(iv). Professional liability insurance covering
the acts, errors and omissions of Supplier,
its employees, agents and subcontractors, in
an amount not less than $[*] per claim/$[*]
aggregate. Said policy shall name the
Customer as an additional insured with
respect to work performed under this
Agreement.
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 20 of 25
3.30.2. Supplier shall require its agents or subcontractors,
if any, who may enter upon Customer's premises to
maintain the same insurance coverage required herein.
3.30.3. All required insurance policies shall contain a
provision stating Customer's name and address and
shall require insurer to notify Customer in writing
at least thirty (30) days prior to cancellation of,
or any material change in, the policy. Before
starting work and upon renewing each coverage
required herein, Supplier, its agents and/or
subcontractors shall furnish Customer with all
certificates and/or adequate proof of the foregoing
insurance.
3.30.4. Supplier shall maintain all policies required herein
with insurers acceptable to the Customer. Customer
may disallow coverage from any insurer that does not
maintain a rating from A.M. Best Company of B+ X or
higher.
3.31. CONFLICT OF INTEREST.
3.31.1. Supplier acknowledges it has received Customer's
"Position Statement," as contained in either of forms
RF-5140 or RF-5770. Supplier further stipulates that
it has not employed, retained, induced, or directed
any of Customer's officers or employees to solicit or
secure this Agreement by means of an agreement,
offer, understanding, or implication involving any
form of remuneration. Supplier agrees that if
Customer alleges that a violation exists hereof,
Supplier will cooperate in every reasonable manner
with Customer in establishing whether the allegation
is true. If such a violation has occurred and is
material, Customer may immediately cancel this
Agreement. Notwithstanding the foregoing, Customer
acknowledges that William L. Smith, Executive Vice
President of Customer, and a member of the Board of
Directors of Supplier has not been, in any way,
employed, retained, induced, or directed, nor has he
employed, retained, induced, or directed any of
Customer's officers or employees, to solicit or
secure this Agreement by means of an agreement,
offer, understanding, or implication involving any
form of remuneration.
3.32. SECTION HEADINGS.
3.32.1. The section headings used in this Agreement are for
convenience only and do not affect the meaning or
interpretation of this Agreement.
3.33. SUPPLIER OVERDEPENDENCE.
3.33.1. Customer has no knowledge of Supplier's dependence on
revenues from sales to Customer in proportion to
Supplier's revenues from other customers. Supplier
agrees to release and hold Customer harmless from any
and all claims relating to Supplier's financial
condition which arise out of, relate to or result
from Customer's termination of this Agreement or any
Order.
3.34. REPRESENTATIVES.
3.34.1. Software furnished and/or Services performed under
this Agreement are subject to contract administration
activities by Customer's Representative(s). Such
activities include, but are not limited to,
monitoring supplier performance, Agreement
interpretation and amendment, maintenance of
Agreement information in Customer's database,
inspecting and accepting work performed and
validating charges rendered on Supplier's invoices.
Customer's Representative shall be the Supply Chain
Manager - Contract Services or the Customer contact
listed in each Order.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 21 of 25
3.35. REQUIRED NETWORK INTERFACE DISCLOSURES.
3.35.1. Supplier acknowledges that the Federal Communications
Commission ("FCC") promulgated certain rules which
require Customer's timely disclosure to the public of
appropriate technical and marketing information,
which may include proprietary and/or confidential
information of Supplier, for any new or modified
network services to be offered by BellSouth
Telecommunications, Inc. which affect either enhanced
service providers or customer premises equipment
interconnection. Supplier agrees to provide promptly
to Customer, at Customer's request, all such required
Supplier's information to enable Customer to timely
make such required disclosures to the public. In such
event, Supplier expressly releases Customer from
Customer's obligations under any nondisclosure
agreement with Supplier (whether contained within the
provisions of this Agreement or in a separate
writing) relating to such information of Supplier at
the time such disclosures are required to be made by
Customer in accordance with the FCC's rules.
3.36. FACILITY RULES AND GOVERNMENT CLEARANCE.
3.36.1. Both parties' employees and representatives shall
comply with all internal rules and regulations while
on each other's premises. If required by Government
regulations, such compliance shall include submission
of a satisfactory clearance from the U.S. Department
of Defense and other concerned federal authorities.
3.37. COMPUTER ASSET PROTECTION REQUIREMENTS.
3.37.1. With respect to Software, Supplier agrees to comply
with the current issue of Customer's Corporate
Security Standards Technical Reference ("CSSTR")
400-200-TR, entitled "Security Requirements for
Contractual Agreements" as set forth in Appendix E.
This reference fully incorporates Appendix E herein.
Supplier agrees to cooperate fully with Customer in
ensuring that Software and/or computer systems
Supplier develops, designs, or supports under this
Agreement comply with the CSSTR. The word "Supplier"
used in Appendix E shall mean Supplier, while the
name "BellSouth" shall mean Customer. Supplier agrees
to fully indemnify, defend at its own expense, and
hold the Customer harmless against any breach of the
terms set forth in Appendix E caused by the gross
negligence or willful misconduct of Supplier.
3.37.2. With respect to Software or Services (other than
Software Maintenance), Supplier agrees to comply with
the current issue of Customer's Corporate Security
Standards Technical Reference ("CSSTR") 400-400-TR,
entitled "Security Requirements for System or Network
Access by Vendor, Contractor and Supplier Personnel"
as set forth in Appendix F which is attached hereto
and fully incorporated herein by this reference. The
word "Supplier" used in Appendix F shall mean
Supplier while the name "BellSouth" shall mean
Customer. Supplier agrees that all of its personnel
having access to Customer's systems will be covered
on the contents of the CSSTR and will sign the
certification provided to that effect. Failure of any
personnel to sign the certification may be grounds
for Customer refusing to allow that individual system
access. Supplier agrees to fully indemnify, defend at
its own expense, and hold Customer harmless against
any breach of the terms set forth in the CSSTR caused
by the gross negligence or willful misconduct of
Supplier.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 22 of 25
3.38. NOTICES AND DEMANDS.
3.38.1. Except as otherwise provided herein, any notices or
demands, required by law or under the terms of this
Agreement shall be in writing. Customer or Supplier
shall deliver such notices or demands by hand,
facsimile, telegram or similar communications, or by
certified or registered mail, and addressed as set
forth below. In the case of facsimiles, telegrams or
similar communications, the receiving party shall
consider such notices given when sent, and in the
case of certified or registered mail, three (3) days
after it is deposited in the United States mail with
postage prepaid. The parties may change their above
address at any time by giving thirty (30) days prior
written notice to the other.
Notices to Supplier: Notices to Customer:
Predictive Systems, Inc. BellSouth Telecommunications, Inc.
2400 Century Boulevard Supply Chain Manager - Contract Services
Atlanta, GA 30345 BellSouth Center, Room 39S40
675 West Peachtree Street, N.E.
Atlanta, Georgia 30375
3.38.2. In addition to the foregoing, any notices of a legal nature shall be
copied to:
Supplier: Customer:
Predictive Systems, Inc. BellSouth Telecommunications, Inc.
417 Fifth Avenue - 11th floor 4300 BellSouth Center
New York, NY 10016 675 West Peachtree Street, N.E.
Attention: Legal Department Atlanta, Georgia 30375
Attention: General Attorney - Contracting
3.39. SURVIVAL OF OBLIGATIONS.
3.39.1. Customer's and Supplier's respective obligations
hereunder which by their nature would continue beyond
the termination, cancellation or expiration of this
Agreement or any Order, shall survive. This includes,
by way of example but not limited to, the obligations
provided in the sections "SUPPLIER'S INFORMATION,"
"CUSTOMER'S INFORMATION," "PATENT AND OTHER
PROPRIETARY RIGHTS INDEMNIFICATION," "INDEMNITY,"
"PUBLICITY/LICENSES," "OWNERSHIP OF WORK PRODUCT,"
and "WARRANTY".
3.40. BINDING EFFECT.
3.40.1. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective
successors and permitted assigns.
3.41. NON-EXCLUSIVE RIGHTS.
3.41.1. This Agreement does not grant Supplier an exclusive
privilege to provide to Customer any and all
Deliverables/or Services that Customer may require.
Customer at its option may buy comparable products
and services from other manufacturers or suppliers.
In
Agreement No. R12450A
Effective Date: January 15, 2001
Page 23 of 25
addition, Customer, at its sole discretion, shall
determine the extent of Customer's efforts to market,
advertise, promote, or support the Deliverables
and/or Services.
3.42. SEVERABILITY.
3.42.1. If any of the provision(s) of this Agreement are held
to be invalid or unenforceable by a court of
competent jurisdiction, the remaining portions of the
Agreement shall be construed as if not containing
such provision(s), and all other rights and
obligations of the parties shall be construed and
enforced accordingly.
3.43. INCORPORATION BY REFERENCE.
3.43.1. The terms and conditions contained in Appendices A
through G referred to in this Agreement and attached
hereto, are integral parts of this Agreement and are
fully incorporated herein by this reference. The
parties acknowledge the existence of the various
Technical References, Technical Advisories, Quality
Program Specifications, Technical Specifications and
other publications and documentation specifically
referenced in this Agreement. The applicable terms of
said documents are also fully incorporated herein by
this reference.
3.44. FAX SIGNATURES.
3.44.1. The parties hereby agree that signatures transmitted
and received via facsimile or other electronic means
shall be treated for all purposes of this Agreement
as original signatures and shall be deemed valid,
binding and enforceable by and against both parties.
3.45. PERFORMANCE OF WORK.
3.45.1. All work performed by Supplier under any Order may be
monitored through the use of status reports. Contents
of such status reports, frequency and the Supplier's
employees required to submit such status reports
shall be specified in the Order.
3.45.2. Supplier reserves the right to make staffing changes
upon reasonable notice to the Customer Technical
Coordinator at logical breakpoints of the work. In
the event of any staffing change, Customer shall not
be charged for the time required to train the
replacement. The amount of non-compensatory training
time, if any, shall be mutually determined and agreed
to by the Supplier Technical Coordinator and the
Customer Technical Coordinator.
3.45.3. When in the Supplier's opinion it has completed the
Services described in a Order, Supplier shall provide
written notification of such fact to Customer.
Customer shall have an acceptance period of [*],
unless otherwise specified in the Order, from the
date of Supplier's notice in which to perform reviews
to determine if the Services have been completed in
accordance with specifications. On or prior to the
expiration of such acceptance period Customer shall
have the right to give written notice of
unsatisfactory performance and rejection of same. If
notice of Acceptance is not received by Supplier on
or prior to the expiration of such acceptance period
such Services shall be deemed accepted by Customer.
3.45.4. Supplier shall supply the appropriate personnel to
investigate any reported deficiencies found by
Customer during the acceptance period. Deficiencies
found to be of Supplier's causing shall be corrected
by Supplier at its expense. Such correcting
activities shall commence immediately and be
completed as quickly as is reasonably possible.
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 24 of 25
3.45.5. If the deficiencies are found to be not of Supplier's
causing, Customer shall reimburse Supplier for the
time and material charges of (1) its investigation,
and (2) such correcting activities Supplier performs,
if requested by Customer. The period from the time
Supplier is notified to make investigation and
corrections until Supplier completes those activities
shall not be counted as part of the acceptance
period. If corrections are required, upon receipt of
Supplier's notice that the deficiencies have been
remedied, the acceptance period shall continue
subject to the acceptance requirements as specified
above. However, in no event shall the continuation of
an acceptance period of Supplier caused deficiencies
be [*].
3.46. [*]
3.47. ENTIRE AGREEMENT.
3.47.1. This Agreement, and any Orders placed hereunder shall
constitute the entire agreement between Customer and
Supplier relating to the subject matters thereunder.
Any amendment or modification to this Agreement or
any duly executed Order placed hereunder shall not be
valid, enforceable or binding on the parties unless
(i) such amendment or modification shall be in a
written instrument duly executed by the authorized
representatives of both parties; (ii) such amendment
or modification references this Agreement and any
Order, if applicable and identify the specific
sections contained therein which are amended or
modified; and (iii) such amendment or modification
shall not adversely affect vested rights or causes of
action which have accrued prior to the effective date
of such amendment or modification. No conflicting
pre-printed provisions on Supplier's and Customer's
forms shall be binding on the parties. An Order that
Customer places hereunder shall incorporate the
typed, stamped, or written provisions or data found
thereon and in subordinated documents (such as
shipping releases) so long as the typed, stamped, or
written provisions or data merely supplement but do
not vary the provisions of this Agreement. Whenever
typed, stamped, or written provisions of an accepted
Order conflict with this Agreement, this Agreement
shall control.
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Page 25 of 25
IN WITNESS WHEREOF, the parties have manually or by electronic signature
executed this Agreement by their duly authorized representatives in one or more
counterparts, each of which shall be deemed an original, as of the effective
date set forth herein.
Supplier: Customer:
Predictive Systems, Inc. BellSouth Telecommunications, Inc.
By: By:
--------------------------------------------- --------------------------------------------------
(Authorized Signature) (Authorized Signature)
Name: Name:
--------------------------------------------- --------------------------------------------------
(Print or Type) (Print or Type)
Title: Title:
--------------------------------------------- --------------------------------------------------
Agreement No. R12450A
Effective Date: January 15, 2001
Appendix A
Appendix A
[*]
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: January 15, 2001
Appendix B
Appendix B
[*]
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: December 01, 2000
Appendix C
[*]
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: December 01, 2000
Appendix D
[*]
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: December 01, 2000
BellSouth Corporate Security Standards 400-200-TR
Appendix E
[*]
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: December 01, 2000
BellSouth Corporate Security Standards 400-400-TR
Appendix F
[*]
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.
Agreement No. R12450A
Effective Date: December 01, 2000
Appendix G
[*]
* Represents material which has been redacted pursuant to a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933,
as amended.