AGREEMENT
between
PACIFIC BELL COMMUNICATIONS
and
NEVADA BELL
for
GENERAL ADMINISTRATIVE SERVICES
SEPTEMBER, 1996
TABLE OF CONTENTS
SECTION
TITLE
PAGE
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2
3
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6
7
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10
11
Term of Agreement
Scope of Agreement
Compensation
Invoices and Payment
Taxes
Performance Standards
Records and Audits
Independent Contractor
Nonexclusive Market Rights
Information
Termination and Cancellation
a. Agreement
b. Schedule
c. Dispute Resolution and Default
Assignment
General
a. Notices
b. No Third Party Beneficiaries
c. Amendments
d. Orders of Precedence
e. Headings
f. Governing Law
g. Severability
h. Survival
i. Force Majeure
j. Entire Agreement
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Form of Schedule
3 pages
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Exhibits
Exhibit A
AGREEMENT BETWEEN PACIFIC BELL COMMUNICATIONS AND
NEVADA BELL
FOR GENERAL ADMINISTRATIVE SERVICES
THIS AGREEMENT, effective September, 1996, is between Pacific Bell
Communications (“PBC”), a California corporation and Nevada Bell (“NB”), a Nevada
corporation, for the purpose of providing each other with certain designated services
(hereinafter “Services”). The parties, intending to be legally bound, mutually agree
as follows:
1.
TERM AGREEMENT
This agreement shall become effective as of the date above and, unless sooner
terminated or canceled as provided herein, shall remain in full force and effect for an
initial term of one (1) year and shall continue in full force and effect thereafter until
terminated or canceled as provided herein.
2.
SCOPE OF AGREEMENT
a. Subject to the provisions of this Agreement, either party shall provide to the other
party those Services, which shall be described in and ordered by such schedules
as may be executed by the parties from time to time (“Schedules”). Unless
otherwise provided by this Agreement or the applicable Schedule, if either
intends to cease providing any Service to its own organization, it shall so notify
the other party at least four (4) months prior to the intended date of termination of
such Service so that the other party may provide for the orderly continuation of
the terminated Service. Each party reserves the right, upon written notice to the
other, to immediately cease to accept or to provide any or all Services if such
cessation of Services is necessary to comply with rulings by applicable regulatory
agencies. In the event of termination or discontinuance, both parties shall
cooperate to minimize disruption of the businesses of the parties during the
transition period.
b. Each Schedule shall include the following information whenever the information
is applicable to the Services to be provided:
(1) commencement date and duration of Service(s);
(2) description of the Service(s) to be provided;
(3) ordering and performance criteria applicable to the Service;
(4) procedures for terminating a Schedule;
(5) any special terms and conditions.
c. Unless otherwise provided by this Agreement or the applicable Schedule, each
party shall furnish all materials, tools, equipment, and personnel required for its
performances of Services hereunder.
3.
COMPENSATION
The party providing the Services (“Provider of Services”) shall be fully compensated
by the party receiving the Services (“Receiver of Services”) for all costs associated
with the Services rendered. The methodology and procedures for determining costs
that are billed to the Receiver of Services shall be pursuant to the Pacific Telesis
Group Affiliate Transactions Policies, Guidelines and Reporting Requirements as
may be amended from time to time. The Provider of Services shall establish
controls, procedures, and practices required to ensure the accuracy of the costing
process. The Receiver of Services shall have the opportunity to review and
comment on such methodology and procedures. During term of this Agreement,
adjustments to the methodology and procedures shall be in writing.
4.
INVOICES AND PAYMENT
a. Invoices for Services will be processed following the methods and practices
developed pursuant to the applicable Inter-Entity Transfer Pricing Process.
b. The Receiver of Services shall pay the full amount of any invoice, on or before
the first workday of the second month following month in which the bill is
rendered. In the event of a dispute, the Receiver of Services may either (i) pay
the entire amount of the invoice (including the disputed amount) and notify the
Provider of Services that it disputes the invoice; or (ii) return the invoice without
payment before the due date of the invoice. The Receiver of Services may not
make a partial payment of an invoice and withhold the disputed amount. The
parties will use their best efforts to resolve any such dispute. Upon resolution of
such dispute, the invoices will be reissued reflecting the agreed upon amount.
Where the Receiver of Services has withheld payment, the Float will be
computed as follows: (I) For services provided by PBC which are billed using
market based pricing, no Float will be charged if the invoice is paid by the due
date of the reissuance of the invoice, including any subsequent payment period.
c. A late payment charge (finance charge) bill will be issued and due immediately
upon receipt to compensate the Provider of Services for the time value of money
for the period between the time an outstanding bill is due to be paid and the
actual receipt date of that payment. The finance charge will be based on the
same formula that is used to calculate Float:
Float = Billable X Lag X Annualized 90-day Commercial Paper Rate Costs Period
Where
(i)
(ii)
“Billable Costs” means the sum of all primary, overhead, and
investment related costs includable in the bill;
“Lag Period” means for N/365 where N represents the number
of days the bill is past due, not to exceed 31.
The finance charge will be computed monthly and added to the total billable amount
on which the next month’s finance charge will be calculated. There will be no late
charge applied to a returned invoice during the period the dispute is being resolved.
5.
TAXES
The Provider of Services shall bear the cost of all taxes, import and export duties,
and other governmental fees of whatever nature except California sales and use
taxes, if applicable, which shall be stated as separate items on each invoice.
6.
PERFORMANCE STANDARDS
Services provided hereunder shall be performed by qualified personnel promptly and
with diligence, in a professional manner and accordance with the standards
customarily used by the Provider of Services in providing comparable services to its
own organization. The Receiver of Services shall promptly notify the Provider of
Services of any instance where Services are considered to be unsatisfactorily
performed. Upon receipt of any such notice, the Provider of Services shall promptly
investigate the claim of the Receiver of Services and if the Provider of Services finds
such claim to be accurate, it shall act to correct such unsatisfactory Services. If
unsatisfactory Services have not been corrected within a reasonable time, the
Receiver of Services shall refer such dispute to arbitration pursuant to Section 11 (c)
(Dispute Resolution and Default).
7.
RECORDS AND AUDITS
Each party shall maintain accurate records of all matters which relate to its
obligations hereunder in accordance with it current practices and pursuant to
generally accepted principles and practices, uniformly and consistently applied in a
format that will permit audit. Each party shall retain such records for 10 (ten) years
from the date of issuance of invoices to which such records relate. To the extent that
such records may be relevant in determining if the Provider of Services is complying
with its obligations under the applicable Schedule, the Receiver of Services and its
authorized representatives shall have access to only such relevant records for
inspection and audit during normal business hours.
8.
INDEPENDENT CONTRACTOR
Each party hereby declares and represents that it is engaged in an independent
business and will perform its obligations under this Agreement as an independent
contractor and not as the agent or employee of the other party; that the persons
performing Services hereunder are not agents or employees of the other party; that
each party has and hereby retains the right to exercise full control of the supervision
over the performance of its obligations hereunder and full control over the
employment, direction, compensation and discharge of all employees assisting in the
performance of such obligations; that each party will be solely responsible for all
matters relating to payment of such employees, including compliance with workers
compensation, unemployment, disability insurance, social security, withholding and
all other federal, state and local laws, rules and regulations governing such matters;
and that each party will be responsible for its own acts and those of its agents,
employees and contractors during the performance of its obligations under this
Agreement.
9.
NON-EXCLUSIVE MARKET RIGHTS
Unless otherwise provided in this Agreement or any Schedule hereunder, this
Agreement does not grant either party an exclusive privilege to furnish to the other
party any or all of the type of Services, which are subject of this Agreement which
either party may require. Each party expressly reserves the right to contract with
others for the performance of services comparable or identical to the Services which
are the subject of this Agreement.
10.
INFORMATION
Each party will use its best efforts to secure and protect from unauthorized
disclosure information received by the other.
11.
TERMINATION AND CANCELLATION
a. Agreement – Either party may terminate this Agreement upon 30 days written
notice to the other setting forth the effective date of such termination. The
termination and cancellation of this Agreement shall not affect the obligations of
either party to the other party pursuant to any Schedule previously executed
hereunder, and the terms and conditions of this Agreement shall continue to
apply to such Schedule as if this Agreement had not been terminated or
canceled.
b. Schedule – Except as otherwise provided in Section 2(a) (Scope of Agreement),
either party may terminate any Schedule for Services in accordance with
procedures contained in the applicable Schedule. The Receiver of Services shall
pay the Provider of Services the actual costs, if any, of such Services provided by
the Provider of Services up to the date of said termination.
c. Dispute Resolution and Default – In the event of any dispute between the parties
concerning their rights or obligations under this Agreement, and the parties can’t
resolve the dispute through appropriate escalation within the parties’
organization, the parties shall submit their claims to and abide by the joint
resolution of the dispute suggested or endorsed by an arbitrator appointed by
PBC and an arbitrator appointed by NV. Such arbitration shall be final and
binding. A party that does not comply with such determination shall be deemed
to be in material default of its obligations hereunder. If either party is in material
default of any of its obligations under this Agreement and such default continues
for fifteen (15) days after written notice thereof is given by the other party, such
other party may cancel any Schedule which may be affected by such default.
12.
Assignment
a. Neither party shall delegate its duties or assign its rights under this Agreement or
any Schedule hereunder without the prior written consent of the other party. Any
attempted assignment or delegation in contravention of this paragraph a. shall be
void.
b. Subject to the provisions of paragraph a. above, this Agreement shall inure to the
benefit of and be binding upon the respective successors and assignees, if any,
of the parties hereto.
13.
GENERAL
a. Notices – Except as otherwise specified in a Schedule, all notices or other
communications hereunder shall be deemed to have been duly given when made
in writing and actually delivered to the person addressed or to his or her office.
Initially, the persons authorized to receive notice are as follows:
For:
Pacific Bell Communications
Affiliate Transactions
5850 West Las Positas Blvd.
Pleasanton, CA 94588
Attn: Raouf Ibrahim
For:
Nevada Bell
645 E. Plumb Lane, Room C146
Reno, NV 89520
Attn: Transfer Pricing Coordinator
The persons and addresses to which notices or communications may be given to
either party may be changed by written notice given by such party to the other party
pursuant to this Section.
b. No Third Party Beneficiaries – Except as otherwise provided in this Agreement,
the provisions of this Agreement are for the benefit of the parties hereto and not
for any other person. This Agreement shall not provide third parties with any
remedy, claim, liability, reimbursement, claim of action or any other right in
excess of those existing without reference to this Agreement.
c. Amendments – No provisions of this Agreement or any Schedule shall be
deemed waived, amended, supplemented or modified by either party, unless
such waiver, amendment, supplement or modification is in writing and signed by
the authorized representative of the party against whom enforcement is sought.
d. Order of Precedence – In the event of any conflict or inconsistency between the
provisions of this Agreement and the provisions of a Schedule, the provisions of
the Schedule shall control, but only for the purposes of such Schedule and,
except for such Schedule, the terms and conditions of this Agreement shall not
be deemed to be waived, amended or modified.
e. Headings – The article, section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
f. Governing Law – This Agreement and each Schedule shall be construed in
accordance with the laws of the State of California and the rules of the California
Public Utilities Commission and the Nevada Public Service Commission
regarding affiliate transactions.
g. Severability – If any of the provisions of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate or render
unenforceable the entire Agreement, but rather the entire Agreement shall be
construed as if not containing the particular invalid or unenforceable provision or
provisions, and the rights and obligations of parties shall be construed and
enforced accordingly.
h. Survival – The provisions contained in this Agreement that by their sense and
context are intended to survive the performance of the Agreement or any
Schedule thereunder by either or both parties hereunder shall so survive the
completion of performance, cancellation or termination of this Agreement or any
Schedule hereunder.
i. Force Majeure – Neither party shall be deemed in default of this Agreement or
any Schedule hereunder to the extent that any delay or failure in the performance
of its obligations results from any cause beyond its reasonable control and
without its fault or negligence, such as acts of God, acts of civil or military
authority, embargoes, epidemics, war, riots, insurrections, fires, explosions,
earthquakes, floods, unusually severe weather conditions or strikes. In the event
of any such excused delay, the time for performance shall be extended for a
period equal to the time lost by reason of the delay.
j. Entire Agreement – This Agreement including the Schedule and any attachments
hereto, constitutes the entire agreement between the parties with respect to the
subject matter contained herein. All prior agreements, oral or written
representations, statements, negotiations, understandings, proposals and
undertakings are superseded and replaced by the provisions of this Agreement.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be
executed by their respective authorized representatives.
PACIFC BELL COMMUNICATIONS
By:
_______________________
Print Name: Betsy J. Bernard
Title:
President & C.O.O.
Date Signed: 3/31/97
NEVADA BELL
By:
_______________________
Print Name: Michael P. Coffey
Title:
C.F.O. & Strategic Planning VP
Date Signed: 2/27/97
Form Approved – Legal Department
By:__________________________
A. J. Rodewald, General Counsel
Date: 2/20/97
FORM OF SCHEDULE
Schedule No. [Enter # assigned by Service Provider]
General Administrative Services Agreement between
Pacific Bell Communications and Nevada Bell
Page 1 of [n]
Statement of [Name of Service] Services
[Name or Organization i.e., Division, or Department plus name of organization, if
service is provided on a lower level]
I.
COMMENCEMENT DATE OF SERVICES: (Date)
II.
DURATION OF SCHEDULE:
Unless sooner terminated as provided in the General Administrative Services
Agreement (“Agreement”) or this Schedule, this Schedule shall be for an
initial term of [state length of time e.g., four months, one year] and shall
continue thereafter until terminated as provided herein.
III.
DESCRIPTION OF SERVICES:
[List the services and describe them. The description should be sufficiently
specific so both the provider and receiver understand what is being offered.
The length and details of the description will vary according to the service.]
[If an S.I. is referenced, attach the section or portion of the Standard
Instruction, which provides the information necessary to comply with the
intent of the Schedule.]
IV.
PRICES:
Prices for Services shall be determined according to the Pacific Telesis Group
Affiliate Transactions Policies, Guidelines and Reporting Requirements as
may be amended from time to time. Nevada Bell Transfer Pricing
Administrator will prepare the pricing documentation for the Services.
Schedule No. [Enter # assigned by Service Provider]
General Administrative Services Agreement between
Pacific Bell Communications and Nevada Bell
Page 2 of [n]
Identification of primary expenses.
In addition the following expenses are 100% billable. These direct expenses shall
include, but be limited to the following:
[List 100% billable expenses, i.e., travel expense, meals, overnight lodging, and
vendor costs]
V.
ORDERING/PERFORMANCE CRITERIA:
Ordering – The following procedure(s) is to be followed in ordering the
Service(s) covered by this Schedule:
(1)
(2)
(3)
The Service is provided on a continuous basis. (monthly, from
commencement date until termination)
The Service is provided upon request. (as required by the contracting
party)
The Service is provided on an as needed basis. (required by the
Holding Company or parent company)
[State requirement as to how far in advance the Services must be ordered
and any other requirements for ordering, such as form letter, phone call or
other type of arrangement.]
[State the period of prior notice necessary to cancel an order.]
Performance Criteria – [State specific performance criteria necessary on the
part of both parties to enable the Service to be rendered.]
Schedule No. [Enter # assigned by Service Provider]
General Administrative Services Agreement between
Pacific Bell Communications and Nevada Bell
Page 3 of [n]
For example:
PBC must submit written project selections to Financial Operations 30 days
prior to participating.
[Note: Delete all reference to performance criteria if not used. Retitle the
heading “Ordering Criteria”.]
VI.
TERMINATION
Except as otherwise provided in the Agreement, either party may terminate
this Schedule upon [state period of time necessary to allow Receiver of
Services to make arrangements to obtain the Services and to provide an
orderly transition, e.g., “thirty days”, “ninety days”] prior written notice to the
other party.
[If the Schedule includes more than one type of Service, it may be appropriate
to have differing termination provisions. For example, an on-call Service may
require no advance notice to terminate, while a continuous Service may
require several months notice. If the period for the termination notice will be
the same, regardless of the number or type of Service offerings, then list only
one period, e.g., thirty days notice.]
This Service [“does” or “does not”] involve maintaining the client’s materials.
[If the Service involves maintaining the client’s materials (e.g., archives,
supplies) describe the disposition of the materials when the Service is
terminated.
For example:
“Disposition of Services/Products relating to the Schedule shall be arranged
between the parties prior to the termination date. Both parties agree to
cooperate with each other to prevent Service interruption or other interference
with the orderly conduct of their business.”