<PAGE>
As filed with the Securities and Exchange Commission on November 16, 1999.
Registration No. 333-86937
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 7
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
METASOLV SOFTWARE, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 7371 75-2436509
(Primary Standard (I.R.S. Employer
(State or Other Industrial Identification Number)
Jurisdiction of Classification Code
Incorporation or Number)
Organization)
5560 Tennyson Parkway
Plano, Texas 75024
(972) 403-8300
(Address, including zip code, and telephone number, including area code, of
the registrant's principal executive offices)
----------------
GLENN A. ETHERINGTON
Chief Financial Officer
MetaSolv Software, Inc.
5560 Tennyson Parkway
Plano, Texas 75024
(972) 403-8300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copies to:
BRIAN K. BEARD ALAN DEAN
ANTHONY M. ALLEN Davis Polk & Wardwell
Gunderson Dettmer Stough 450 Lexington Avenue
Villeneuve Franklin & Hachigian, LLP New York, New York 10017
8911 Capital of Texas Highway, Suite (212) 450-4000
4240
Austin, Texas 78759
(512) 342-2300
----------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] ____________
If delivery of this prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to such Section 8(a), may determine.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the sale of common stock being registered. All amounts are estimates
except the SEC registration fee and the NASD filing fees.
<TABLE>
<S> <C>
SEC Registration fee............................................. $ 22,379
NASD fee......................................................... 8,550
Nasdaq National Market initial listing fee....................... 17,500
Printing and engraving........................................... 320,000
Legal fees and expenses of the Company........................... 430,000
Accounting fees and expenses..................................... 325,000
Blue sky fees and expenses....................................... 10,000
Transfer agent fees.............................................. 15,000
Miscellaneous.................................................... 51,571
----------
Total.......................................................... 1,200,000
==========
</TABLE>
Item 14. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's board of directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933
(the "Act"). Article VII of the Registrant's By-Laws provides for mandatory
indemnification of its directors and officers and permissible indemnification
of employees and other agents to the maximum extent permitted by the Delaware
General Corporation Law. The Registrant's amended and restated certificate of
incorporation provides that, pursuant to Delaware law, its directors shall not
be liable for monetary damages for breach of the directors' fiduciary duty as
directors to the Registrant and its stockholders. This provision in the
amended and restated certificate of incorporation does not eliminate the
directors' fiduciary duty, and in appropriate circumstances equitable remedies
such as injunctive or other forms of non-monetary relief will remain available
under Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Registrant for
acts or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for actions leading to improper personal benefit to
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. The Registrant has
entered into Indemnification Agreements with its officers and directors, a
form of which is attached as Exhibit 10.1 hereto and incorporated herein by
reference. The Indemnification Agreements provide the Registrant's officers
and directors with further indemnification to the maximum extent permitted by
the Delaware General Corporation Law. The Registrant maintains liability
insurance for its directors and officers. Reference is also made to Section
of the underwriting agreement contained in Exhibit 1.1 hereto, indemnifying
officers and directors of the Registrant against certain liabilities, and
Section 1.9 of the Investors' Rights Agreement contained in Exhibit 4.1
hereto, indemnifying certain of the Company's stockholders, including
controlling stockholders, against certain liabilities.
Item 15. Recent Sales of Unregistered Securities
(a) From October 1, 1996 through September 30, 1999, the Registrant has
issued and sold the following securities:
1. The Registrant granted stock options to purchase 6,955,800 shares of
Common Stock at exercise prices ranging from $0.34 to $5.00 per share to
employees, consultants and directors pursuant to its 1992 Stock Option
Plan.
II-1
<PAGE>
2. From October 1, 1996 through September 30, 1999, the Registrant issued
and sold an aggregate of 628,360 shares of its Common Stock to
employees, consultants and directors for aggregate consideration of
approximately $313,971 pursuant to exercises of options granted under
its 1992 Stock Option Plan.
3. In June 1998, the Registrant issued and sold 2,857,146 shares of its
Class C Preferred Stock for an aggregate purchase price of approximately
$10,000,011.
The issuances described in Items 15(a)(1) and (2) were deemed exempt from
registration under the Securities Act in reliance on Rule 701 promulgated
under the Securities Act or Section 4(2) of the Securities Act. The issuance
of the securities described in Item 15(a)(3) was deemed exempt from
registration under the Act in reliance on section 4(2) of such Act as
transactions by an issuer not involving any public offering. In addition, the
recipients of securities in each such transaction represented their intentions
to acquire the securities for investment only and not with a view to or for
sale in connection with any distribution thereof and appropriate legends were
affixed to the share certificates issued in such transactions. All recipients
had adequate access, through their relationships with the Registrant, to
information about the Registrant.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
1.1+ Form of Underwriting Agreement.
3.1+ Amended and Restated Certificate of Incorporation of the
Registrant, as amended to date.
3.2+ Form of Amended and Restated Certificate of Incorporation of the
Registrant to be filed after the closing of the offering made
pursuant to this Registration Statement.
3.3+ Amended and Restated Bylaws of the Registrant, dated May 26, 1998.
3.4+ Form of Amended and Restated Bylaws of the Registrant to be
effective upon the closing of the offering made pursuant to their
Registration Statement.
4.1+ Investors' Rights Agreement, dated June 2, 1998, among the
Registrant and the shareholders named therein, as amended.
4.2+ Specimen Certificate of the Registrant's common stock.
5.1+ Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, counsel to the Registrant.
10.1+ Form of Indemnification Agreement entered into between the
Registrant and its directors and executive officers.
10.2+ 1992 Stock Option Plan.
10.3+ Long-Term Incentive Plan.
10.4+ Employee Stock Purchase Plan.
10.5+ Mutual Release between the Registrant and Michael J. Watters,
dated .
10.6+ Commercial Lease Agreement between the Registrant and CrownInvest
I, L.P., dated April 1, 1997, as amended to date.
10.7+ Commercial Lease Agreement between the Registrant and William R.
Cooper and Craig A. Cooper, dated August 21, 1998 , as amended to
date.
10.8 Master Software License and Services Agreement entered into
between Registrant and Qwest Communications Corporation, dated
May 30, 1997.
10.9** Master License, Development and Service Agreement entered into
between Registrant and Time Warner Communications Holdings, Inc.,
dated May 7, 1998.
10.10+ Master Software License and Services Agreement entered into
between Registrant and Allegiance Telecom, Inc., dated December
19, 1997.
16.1+ Consent of Arthur Andersen, former independent accountants.
23.1+ Consent of KPMG LLP, independent accountants.
23.2+ Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, counsel to the Registrant. Reference is made to
Exhibit 5.1.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
24.1+ Power of Attorney.
27.1+ Financial Data Schedule.
</TABLE>
- --------
+ Previously filed.
** Confidential treatment requested as to certain portions of this exhibit and
the omitted portions have been filed with the Securities and Exchange
Commission.
(b) Financial Statement Schedule
Auditors' Report on Schedule
Schedule II--Valuations and Qualifying accounts.
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the
financial statements or notes thereto.
Item 17. Undertakings
The Registrant hereby undertakes to provide to the underwriters at the
closing specified in the underwriting agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the Delaware General Corporation Law, the Amended and Restated
Certificate of Incorporation or the By-Laws of the Registrant, Indemnification
Agreements entered into between the Registrant and its officers and directors,
the underwriting agreement, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered hereunder, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
The purpose of this Amendment No. 7 is solely to file Exhibit 10.8 and
Exhibit 10.9.
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this amendment to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Plano, State of Texas, on this 16th day of November, 1999.
MetaSolv Software, Inc.
/s/ JAMES P. JANICKI
By: _________________________________
James P. Janicki
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ JAMES P. JANICKI President, Chief Executive November 16, 1999
______________________________________ Officer and Director
James P. Janicki (Principal Executive
Officer)
GLENN A. ETHERINGTON* Chief Financial Officer November 16, 1999
______________________________________ (Principal Financial and
Glenn A. Etherington Accounting Officer)
DAVID R. SEMMEL* Director November 16, 1999
______________________________________
David R. Semmel
WILLIAM N. SICK, JR.* Director November 16, 1999
______________________________________
William N. Sick, Jr.
ADAM SOLOMON* Director November 16, 1999
______________________________________
Adam Solomon
JOHN D. THORNTON* Director November 16, 1999
______________________________________
John D. Thornton
BARRY F. EGGERS* Director November 16, 1999
______________________________________
Barry F. Eggers
JOHN W. WHITE* Director November 16, 1999
______________________________________
John W. White
</TABLE>
/s/ JAMES P. JANICKI
*By: ____________________________
II-4
<PAGE>
INDEPENDENT AUDITORS' REPORT ON SCHEDULE
The Board of Directors
MetaSolv Software, Inc.
Under date of February 26, 1999 we reported on the balance sheets of MetaSolv
Software, Inc. as of December 31, 1997 and 1998 and the related statements of
operations, stockholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1998, which are included in the
prospectus. In connection with our audits of the aforementioned financial
statements, we also audited the related financial statement schedule included
in the registration statement. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express
an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
KPMG LLP
Dallas, Texas
February 26, 1999
<PAGE>
METASOLV SOFTWARE, INC.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
<TABLE>
<CAPTION>
Additions Additions
Balance at charged to charged Balance at
beginning costs and to other end of
Description of period expenses accounts Deductions period
- ----------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED
DECEMBER 31, 1998
Allowances Deducted from
Assets:
Accounts receivable... $90 $510 -- -- $600
=== ==== === === ====
FOR THE YEAR ENDED
DECEMBER 31, 1997
Allowances Deducted from
Assets:
Accounts receivable... $35 $186 -- 131 $ 90
=== ==== === === ====
FOR THE YEAR ENDED
DECEMBER 31, 1996
Allowances Deducted from
Assets:
Accounts receivable... $-- $ 35 -- -- $ 35
=== ==== === === ====
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit No. Exhibit Page
----------- ------- ------------
<C> <S> <C>
1.1+ Form of Underwriting Agreement.
3.1+ Amended and Restated Certificate of Incorporation
of the Registrant, as amended to date.
3.2+ Form of Amended and Restated Certificate of
Incorporation of the Registrant to be filed after
the closing of the offering made pursuant to this
Registration Statement.
3.3+ Amended and Restated Bylaws of the Registrant,
dated May 26, 1998.
3.4+ Form of Amended and Restated Bylaws of the
Registrant to be effective upon the closing of the
offering made pursuant to this Registration
Statement.
4.1+ Investors' Rights Agreement, dated June 2, 1998,
among the Registrant and the shareholders named
therein, as amended.
4.2+ Specimen Certificate of the Registrant's common
stock.
5.1+ Opinion of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP, counsel to the
Registrant.
10.1+ Form of Indemnification Agreement entered into
between the Registrant and its directors and
executive officers.
10.2+ 1992 Stock Option Plan.
10.3+ Long-Term Incentive Plan.
10.4 Employee Stock Purchase Plan.
10.5+ Mutual Release between the Registrant and Michael
J. Watters, dated November 20, 1998.
10.6+ Commercial Lease Agreement between the Registrant
and CrownInvest I, L.P., dated April 1, 1997, as
amended to date.
10.7+ Commercial Lease Agreement between the Registrant
and William R. Cooper and Craig A. Cooper, dated
August 21, 1998, as amended to date.
10.8 Master Software License and Service Agreement
entered into between Registrant and Qwest
Communications Corporation, dated May 30, 1997.
10.9** Master License, Development and Service Agreement
entered into between Registrant and Time Warner
Communications Holdings, Inc., dated May 7, 1998.
10.10+ Master Software License and Services Agreement
entered into between Registrant and Allegiance
Telecom, Inc., dated December 19, 1997.
16.1+ Consent of Arthur Andersen, former independent
accountants.
23.1+ Consent of KPMG LLP, independent accountants.
23.2+ Consent of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP, counsel to the
Registrant. Reference is made to Exhibit 5.1.
24.1+ Power of Attorney. Reference is made to page II-4.
27.1+ Financial Data Schedule.
</TABLE>
- --------
+ Previously filed.
** Confidential treatment requested as to certain portions of this exhibit and
the omitted portions have been filed with the Securities and Exchange
Commission.
<PAGE>
EXHIBIT 10.8
[METASOLV LOGO
MetaSolv Agreement No. Qst1003 APPEARS HERE]
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MASTER SOFTWARE LICENSE AND SERVICES AGREEMENT
THIS SOFTWARE LICENSE AND SERVICES AGREEMENT (this "Agreement") is effective as
of this 30th day of May, 1997, ("Effective Date") by and between MetaSolv
Software, Inc. ("MetaSolv"), a Delaware corporation with principal offices at
14900 Landmark, Suite 530, Dallas, Texas 75240 and Qwest Communications
Corporation with principal offices at 555 17th Street, Suite 1000, Denver,
Colorado 80202.
The terms of this Agreement shall apply to each Software license granted and to
all services provided by MetaSolv under this Agreement. When completed and
executed by both parties, an Order, as described below, shall evidence the
Software licenses granted and the services to be provided by MetaSolv under this
Agreement.
For the purposes of this Agreement, the defined terms set forth herein shall
apply to the respective capitalized terms and their respective singular, plural
and verb forms.
1. Definitions
a) The term "Agreement" includes this Master Software License and Services
Agreement, and any Orders accepted by MetaSolv which reference it.
b) The term "Software" shall mean the software and related documentation
owned or distributed by MetaSolv for which Customer is granted a license
under this Agreement, the user guides and manuals for use of the
Software, and updates.
c) The term "Order" shall mean a written order for MetaSolv products or
services signed by Customer, accepted by MetaSolv, and referencing this
Agreement. Customer agrees to include a reference to this Agreement, by
Agreement number, in all of its orders submitted for MetaSolv products
or services.
d) The term "Designated System" shall mean the computer hardware and
operating system designated on the relevant Order.
e) Unless otherwise specified in the Order, "User" shall mean an individual
who is authorized by Customer to use the Software on the Designated
System.
2. Software License
a) Rights Granted. MetaSolv grants to Customer a nonexclusive license to
--------------
use the Software Customer obtains under this Agreement as follows:
i) Customer shall use the Software solely for its own internal data
processing operations on the Designated System or on a backup
system if the Designated System is inoperative, up to any
applicable maximum number of designated Users (if any User
limitations apply), or other limitation specified on the Order.
Customer may not use the Software for third-party training,
commercial timesharing, rental or service bureau use.
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PAGE 1
CONFIDENTIAL
<PAGE>
[METASOLV LOGO
MetaSolv Agreement No. Qst1003 APPEARS HERE]
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ii) Customer may make up to two archival copies of the Software, for backup
or disaster recovery purposes only, which will include MetaSolv's
copyright, trademark and proprietary notices. Customer may use the
archival copy in a backup or disaster recovery situation as if it were
the original, in accordance with the licensing rights and restrictions
of this Agreement.
b) Verification.
------------
i) At MetaSolv's written request, not more frequently than annually,
Customer shall furnish MetaSolv with a signed certification verifying
that the Software is being used pursuant to the provisions of this
Agreement, including any User and other limitations, and listing the
locations, types and serial numbers of the systems on which the Software
is run.
ii) MetaSolv may, at its expense, audit Customer's use of the Software. Any
such audit shall be conducted during regular business hours at
Customer's facilities and shall not unreasonably interfere with
Customer's business activities. If an audit reveals that Customer has
underpaid fees to MetaSolv, Customer shall be invoiced for such
underpaid fees based on the current list price in effect at the time the
audit is completed. If the shortfall exceeds 5% of the license fees that
the Customer should have paid, Customer shall also pay MetaSolv
reasonable costs of conducting the audit. Audits shall be conducted not
more than once annually.
c) Ownership Rights. Title and ownership rights to Software, in its original
----------------
form and any modified version, shall remain with MetaSolv and its applicable
licensors. Where modification of any licensed Software is expressly
permitted by written communication from MetaSolv, title and ownership rights
to non-MetaSolv material that Customer incorporates into a modified or
derivative version of the Software shall remain with Customer or Customer's
third-party licensor. This paragraph does not authorize modification of the
Software.
d) Rights in Data. MetaSolv may use any suggestions and improvements (other
--------------
than those that qualify as "Proprietary Information") that Customer happens
to furnish to it in connection with this Agreement, and Customer grants
MetaSolv an unrestricted, irrevocable and royalty-free license, without
warranty of any kind, to include them in MetaSolv's product or service
offerings. Customer shall retain any ownership of such suggestions and
improvements, with an unrestricted right to use in any manner Customer's
ideas, designs, concepts, inventions, techniques, discoveries or
improvements.
e) Patent and Copyright Indemnification. MetaSolv indemnifies Customer from
------------------------------------
any action brought against Customer to the extent that it is based on a
claim that the Software infringes any duly issued patent or any copyright in
the United States or Canada. MetaSolv's indemnity obligations shall not
extend to (i) infringement arising out of unauthorized use of the Software,
(ii) a non-MetaSolv modification of the Software after delivery by MetaSolv,
(iii) the combination, operation, or use of the Software with non-MetaSolv
programs or data if such infringement would have been avoided by the
combination, operation or use of the Software with other programs or data.
MetaSolv shall pay all damages and costs attributable to an action and
finally awarded against Customer, provided that: MetaSolv is promptly
informed in writing of each such claim, suit or proceeding; Customer shall
- --------------------------------------------------------------------------------
PAGE 2
CONFIDENTIAL
<PAGE>
[METASOLV LOGO
MetaSolv Agreement No. Qst1003 APPEARS HERE]
- --------------------------------------------------------------------------------
permit MetaSolv to control the defense in settlement thereof; and Customer
shall cooperate in the defense and settlement thereof. Customer shall
furnish a copy of each communication, notice or other action relating to the
alleged infringement and shall provide MetaSolv authority, information and
assistance (at MetaSolv's expense) necessary to defend or settle such claim.
If the Software becomes, or, in MetaSolv's opinion is likely to become, the
subject of a claim of infringement subject to this indemnity, then MetaSolv
may, at its option (i) procure for Customer the right to use that Software
free of any liability for infringement, (ii) replace the Software with a
non-infringing substitute complying substantially with all the requirements
of this Agreement, or (iii) refund the license fee previously paid for the
infringing Software, less a charge for the value of Customer's prior use of
the Software based upon a five (5) year depreciation schedule, and accept
return of the infringing Software. THE FOREGOING INDEMNITY OBLIGATIONS
CONSTITUTE METASOLV'S SOLE LIABILITY AND CUSTOMER'S SOLE REMEDY FOR
INFRINGEMENT OF PATENTS AND COPYRIGHTS RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT.
3. Restriction of License
a) Except as otherwise specifically authorized by this Agreement:
i) Customer shall not copy, modify, sublicense, distribute, transfer,
reverse engineer or reverse compile the Software, nor shall
Customer prepare derivative works incorporating the Software.
ii) Neither Customer nor its personnel having had access to the
Software or documentation may use it to design software with
similar or competitive functionality for distribution to third
parties, nor to distribute or deliver educational courses or
materials based on the Software or documentation to persons other
than to Customer or contractors, and then only for the purpose of
providing Software-related services to Customer.
4. License Fees & Payment
a) All fees and payments are to be made in U.S. dollars. License fees and
payment terms are determined on the Order submitted by Customer and
accepted by MetaSolv. Each Order submitted shall be subject to
applicable license fees. A finance charge of 1.5% per month (but in no
event more than the maximum allowed by law) shall be assessed on all
past-due amounts. Customer shall pay taxes arising out of Customer's
purchase and use of Software under this Agreement, which do not include
taxes based on MetaSolv's income.
5. Services
a) MetaSolv shall provide installation support and user training and other
services, only as specified on the Order. All travel expenses incurred
by MetaSolv as a result of such services shall be paid by Customer.
- --------------------------------------------------------------------------------
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CONFIDENTIAL
<PAGE>
[METASOLV LOGO
MetaSolv Agreement No. Qst1003 APPEARS HERE]
- --------------------------------------------------------------------------------
6. Maintenance
a) Initial Maintenance Period. For the Initial Maintenance Period specified
--------------------------
on the Order, MetaSolv shall provide Standard Maintenance Support for
the Software at no additional charge.
b) Standard Maintenance Support. After the Initial Maintenance Period, for
----------------------------
as long as MetaSolv generally offers Standard Maintenance Support for
the Software to end-user licensees, Customer will automatically receive
Standard Maintenance Support in successive 12-month periods based on
MetaSolv's then current Standard Maintenance Support program. Fees for
Standard Maintenance Support are payable at the beginning of each
renewal maintenance period. Standard Maintenance Support includes:
i) One (1) copy of standard maintenance releases as generally issued
to end-user licensees under MetaSolv's Maintenance Support program
for the correction of known errors, plus improvements,
modifications and enhancements that MetaSolv incorporates into the
Software and does not market as a separate product.
ii) MetaSolv's standard telephone customer service "hot-line" support
for reporting Software errors. MetaSolv will make reasonable timely
efforts to correct errors in the Software reported in this way.
Maintenance Support at any time covers only the current release of
the Software, plus the most recent prior release for up to six
months after release of the current Software. Error correction
applies only to Software used as authorized by this Agreement and
applicable documentation, and not to Software modified by Customer.
c) Customer will designate in writing one primary Customer employee, and
two back-up employees, as its single point of contact for MetaSolv's
delivery of Standard Maintenance Support for the Software. Standard
Maintenance Support communications and deliveries between Customer and
MetaSolv shall be through the single point of contact. Customer shall be
responsible for copying, distributing and otherwise disseminating such
Standard Maintenance Support from the single point of contact throughout
Customer. Customer may change its single point of contact upon
reasonable written notice to MetaSolv.
7. Term & Termination of Agreement
a) If not otherwise specified on the Order, each Software license granted
under this Agreement shall remain in effect perpetually unless the
license or this Agreement is terminated in accordance with the
following:
i) For Cause. MetaSolv or Customer may terminate this Agreement and
any license under it at any time if, after thirty (30) days'
written notice, the other fails to correct a material breach of
this Agreement. If such a termination occurs, then in addition to
any other rights and remedies, Customer's rights to the Software
shall end, and within thirty (30) days following termination,
Customer shall either return to MetaSolv all copies of the
Software, or destroy all copies of the Software and provide to
MetaSolv written certification of this destruction.
- --------------------------------------------------------------------------------
PAGE 4
CONFIDENTIAL
<PAGE>
[METASOLV LOGO
MetaSolv Agreement No. Qst1003 APPEARS HERE]
- --------------------------------------------------------------------------------
ii) For Convenience. Customer may terminate any license under this
Agreement for convenience at any time by delivery of written notice
and either the return of all Software copies to MetaSolv, or their
destruction with written certification of destruction delivered to
MetaSolv.
8. Confidentiality
a) While this Agreement and related licenses are in effect, MetaSolv and
Customer may disclose their proprietary and confidential information
("Proprietary Information") to each other. Each party shall clearly mark
such information as "Proprietary", "Confidential", or by similar label.
For example, the Software licensed to Customer includes Proprietary
Information of MetaSolv. Customer and MetaSolv each shall hold the
others' Proprietary Information in confidence, with the same degree of
care that they apply to their own Proprietary Information of like
importance, and never less than reasonable care. Neither party has any
confidentiality obligation to the other under this Agreement for any
information to the extent that it can show that the information: (i) is
previously known by it without obligation of confidence, or without
breach of this Agreement, (ii) is publicly disclosed through no wrongful
act of the disclosure, (iii) is received from a third party without
obligation of confidence and without breach of this Agreement, (iv) is
independently developed by the disclosing party without access to the
other's Proprietary Information, or (v) is approved for release by
written authorization of the owner. The foregoing confidentiality
obligation shall survive the termination of this Agreement.
9. Warranty & Liability
a) MetaSolv warrants that it has the right to grant the licenses provided
by this Agreement.
b) MetaSolv further warrants that during any Maintenance Support period,
the Software shall perform the functions described in the documentation
accompanying it, if properly used in accordance with the documentation's
instructions and specifications.
c) MetaSolv further warrants that services shall be performed in a
professional manner in accordance with standards and practices generally
observed in the industry for similar products and services.
d) During any Maintenance Period, if the warranty is breached, MetaSolv
shall take action to repair or replace defective Software, in accordance
with its Maintenance Support obligations. For services, MetaSolv will
reperform defective services, upon written notice from Customer received
not more than thirty (30) days after the defective service was
performed.
e) METASOLV MAKES NO OTHER WARRANTY FOR ANY PRODUCTS OR SERVICES UNDER THIS
AGREEMENT. THE WARRANTIES ABOVE ARE INSTEAD OF ALL OTHER WARRANTIES,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND
ANY OTHER WARRANTY OBLIGATION ON THE PART OF METASOLV OR ITS LICENSORS.
FURTHERMORE, THE STATED REMEDIES FOR BREACH OF WARRANTY ARE EXCLUSIVE,
AND METASOLV PROVIDES NO OTHERS.
- --------------------------------------------------------------------------------
PAGE 5
CONFIDENTIAL
<PAGE>
[METASOLV LOGO
MetaSolv Agreement No. Qst1003 APPEARS HERE]
- --------------------------------------------------------------------------------
f) Except as otherwise provided for patent and copyright infringement
indemnities above, MetaSolv's maximum liability to Customer, and
Customer's remedy for any cause whatsoever, will be limited to the
recovery of actual damages up to any amounts paid by Customer with
respect to the applicable Order. METASOLV WILL NOT BE LIABLE FOR
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOSS OF DATA,
EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
10. Arbitration of Disputes
a) Any dispute arising under this Agreement, shall be submitted to binding
arbitration, to the American Arbitration Association ("AAA") in Dallas,
Texas according to the rules and procedures of the AAA for commercial
arbitration. Unless the parties agree otherwise, there shall be a single
arbitrator selected by agreement among the parties or, if they cannot
agree, designated by the AAA. It shall be the determination of the
arbitrator as to which of the parties shall be responsible for any
attorneys' fees and costs incurred by each party as a result of the
Arbitration. The award of the arbitrator shall be final and binding upon
the parties and may be confirmed by any court having jurisdiction over
the parties and the controversy.
11. General
a) This Agreement may be assigned by Customer, but only to a controlling
parent corporation, a controlled subsidiary corporation, or affiliate
corporation under common control with Customer, in any event with
written notice by Customer to MetaSolv, and Customer's written guarantee
of the Assignee's performance.
b) Neither party shall be liable for failure to perform any material
obligation under this Agreement, if the failure is due to an event
beyond its reasonable control.
c) Each party shall comply with all applicable export control laws and
regulations concerning the Software, including but not limited to the
securing of export licenses and execution of letters of assurance as
required under such laws or regulations.
d) All notices and other communications required or permitted to be given
under this Agreement shall be in writing, by certified mail or courier
service, to the addresses given on the first page of this Agreement,
unless by such notice a different address shall have been designated,
and shall be considered effective when deposited in the U.S. mail,
postage prepaid, and addressed to the appropriate party at the address
noted above.
e) This Agreement is the entire, exclusive set of terms and conditions for
any transactions entered into under it, and may be modified only by a
written instrument duly signed by authorized representatives of both
parties. This Agreement is governed by the laws of the State of Texas.
f) In the event either party at any time terminates this Agreement as
stipulated in Paragraphs 2(c), 2(d), 3, 8, 9(e), 9(f), 10, and 11, in
their entirety, shall survive the life of this Agreement.
g) Termination of this Agreement or any license shall not relieve
Customer's obligation to pay all fees
- --------------------------------------------------------------------------------
PAGE 6
CONFIDENTIAL
<PAGE>
[METASOLV LOGO
MetaSolv Agreement No. Qst1003 APPEARS HERE]
- --------------------------------------------------------------------------------
that have accrued or are otherwise owed by Customer under any Order or
other similar ordering document under this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective duly authorized representatives as set forth below:
MetaSolv Software, Inc. Qwest Communications Corporation
By: /s/ Michael J. Watters By: /s/ Steven Jacobsen
- ----------------------------- -----------------------------------
(Signature) (Signature)
Michael J. Watters Steven Jacobsen
- ----------------------------- -----------------------------------
Typed or Printed Name Typed or Printed Name
Chief Executive Officer Senior Vice President
- ----------------------------- -----------------------------------
Title Title
June 5, 1997 June 3, 1997
- ----------------------------- -----------------------------------
Date Date
- --------------------------------------------------------------------------------
PAGE 7
CONFIDENTIAL
<PAGE>
Exhibit 10.9
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as [*]. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
MASTER LICENSE, DEVELOPMENT AND SERVICE AGREEMENT
-------------------------------------------------
This Master License, Development and Service Agreement is entered into on May 7,
1998, by and between Time Warner Communications Holdings, Inc., a Delaware
corporation with offices at 5700 S. Quebec Street, Greenwood Village, CO 80111
("TWC"), and MetaSolv Software, Inc., a Delaware corporation, with offices at
5560 Tennyson Parkway, Plano, Texas 75024 ("MetaSolv").
Recital
-------
TWC desires to purchase or license from MetaSolv, and MetaSolv desires to
provide or license to TWC, certain software and services, all in accordance with
this Agreement.
Agreement
---------
In consideration of the mutual promises, covenants and agreements contained
herein, the receipt and sufficiency of which are hereby acknowledged, TWC and
MetaSolv agree as follows:
1. CERTAIN DEFINITIONS: The terms defined in this Article shall have the
meanings set forth below whenever they appear in this Agreement, unless (a)
the context in which they are used clearly requires a different meaning; or
(b) a different definition is described for a particular Article or
provision:
1.1 "Affiliate" shall mean any corporation, partnership, limited liability
company or similar entity that controls, is controlled by or is under
common control with TWC. For purposes of the preceding sentence,
control shall mean (i) a direct or indirect ownership interest of
fifty percent (50%) or more or (ii) management control, including
without limitation the power to elect or appoint the board of
directors of a corporation or the managing general partner of a
partnership or control through a management agreement or similar
contractual arrangement. TWC shall also be entitled to propose, for
approval by MetaSolv (which approval shall not be unreasonably
withheld), other entities in which it has ownership interests or
management levels lower than those in this definition. Where the term
"affiliate" is used without capitalization, an "affiliate" of a party
means an entity that controls, is controlled by or is under common
control with either named party to this Agreement.
1.2 "Agreement" means this Master License, Development and Service
Agreement between TWC and MetaSolv, together with the attached
Schedules, exhibits,
Page 1
<PAGE>
Orders, Statements of Work, addenda, and amendments to this Master
License, Development and Service Agreement issued in accordance with
the Article entitled "Amendments".
1.3 "Change Order" means an Order reached as a result of the change order
process described in Article 20 below.
1.4 "Documentation" means (a) the "Software Requirements", as such term
is defined in the Software License Agreement, (b) the "Developments
Documentation", as such term is defined in the Software Development
Agreement, (c) the "Services Requirements", as such term is defined
in the Software Support and Maintenance Agreement, and (d) any other
criteria or requirements for the Software or Services that are set
forth in a subsequent Statement of Work or otherwise mutually agreed
to by TWC and MetaSolv from time to time, all of which are
incorporated by reference herein.
1.5 "IP Right" shall have the meaning set forth in Section 23.1.
1.6 "Order" means a written or electronic offer by TWC for Services or
Software, referring to this Agreement and accepted in writing by
MetaSolv, which shall be deemed to incorporate all provisions of this
Agreement applicable to the subject matter of the Order.
1.7 "Original Statement of Work" means the Statement of Work attached to
Schedule 2.
1.9 "Proposal" means MetaSolv's Response to TWC's Request for Proposal
No. 9706 dated August 12, 1997.
1.10 "Services" means the work to be performed by MetaSolv under this
Agreement, as more specifically described in one or more Schedules,
Orders or Statements of Work.
1.11 "Schedule(s)" means the written instruments made part of this
Agreement by this reference describing, among other things, the scope
of the Services to be performed by MetaSolv hereunder and the fees
for the Services, as well as any Software and its purchase price.
Page 2
<PAGE>
1.12 "Software" means the "Software", as such term is defined in the
Software License Agreement, and the "Developments", as such term is
defined in the Software Development Agreement, including all Updates
thereto.
1.13 "Software Development Agreement" means the agreement attached to this
Agreement as Schedule No. 2 and such agreement as it is amended from
--------------
time to time.
1.14 "Software License Agreement" means the agreement attached to this
Agreement as Schedule No. 1, as such agreement is amended from time
--------------
to time.
1.15 "Software Support and Maintenance Agreement" means the agreement
attached to this Agreement as Schedule No. 3, and such agreement as
--------------
it is amended from time to time.
1.16 "Statement of Work" means a written description of Services or
"Developments" (as such term is defined in the Software Development
Agreement) to be provided by MetaSolv that (a) is attached to an
Order or Schedule and (b) shall only become effective upon execution
by an authorized representative of each of MetaSolv and TWC, each as
initially designated on Exhibit A. The term "Statement of Work" shall
---------
be deemed to include the Original Statement of Work.
1.17 "Termination Fee" is the amount referred to as such in Paragraph 5.3
of this Agreement.
1.18 "Updates" means the "Updates" as such term is defined in the Software
Support and Maintenance Agreement.
1.19 "User Manuals and Information" means the "User Manuals and
Information", as such term is defined in the Software License
Agreement, and the "User Manuals and Information", as such term is
defined in the Software Development Agreement.
2. TERM: This Agreement shall commence on the date set forth at the head of
this Agreement, and shall continue in force for so long as any Schedule,
Order or Statement of Work remains in effect, to the extent that its terms
are applicable to such Schedule, Order or Statement of Work.
Page 3
<PAGE>
3. SCOPE OF SERVICES, SOFTWARE: The Services and Software to be provided by
MetaSolv are described in the attached Schedule(s). The Services shall be
performed for, and the Software and User Manuals and Information shall be
provided or licensed to, TWC and its Affiliates upon the terms set forth in
the Schedule(s) and this Agreement.
4. SERVICE AND LICENSE FEE(S); PURCHASE PRICE: Service fees for the Services
and license fees for the Software and User Manuals and Information and
other items shall be as set forth in the Schedules.
5. TERMINATION FOR CONVENIENCE:
5.1 TWC shall, in addition to its rights to terminate this Agreement for
default, have the right to terminate this Agreement in whole or in
part (e.g., a single Schedule, Order or Statement of Work) for its
convenience at any time by giving MetaSolv at least 30 days' written
notice of termination specifying the extent to which the Agreement or
any part hereof is terminated and the date upon which such termination
becomes effective. Where TWC terminates a part of the Agreement that
include any item of Software or Services that is a necessary condition
to perform a remaining part of the Agreement that has not been
terminated, the parties agree either that they will negotiate a change
order for the delivery or performance of the necessary condition, or
that MetaSolv will be excused from delivering or performing the
Software or Services that are dependent upon the necessary condition.
5.2 After receiving notice of termination and except as otherwise directed
by TWC, MetaSolv shall: (a) stop providing Services under this
Agreement or any part hereof on the date and to the extent specified;
(b) accept no further Orders with respect to the portions of the
Agreement that have been terminated; and (c) take such action as may
be necessary or as TWC may direct to protect and preserve the property
related to the Services, the Software and the User Manuals and
Information which are in MetaSolv's possession and in which TWC has or
may acquire an interest.
5.3 At the time of termination and to the extent of the termination
pursuant to this Article, and except as set forth in Section 5.5, the
parties shall be released from any and all obligations under this
Agreement with respect to the portions of the Agreement that have been
terminated; provided that TWC shall pay MetaSolv (a) the balance owing
for any reimbursable expenses accrued to the date of termination, (b)
for Services performed in accordance with the Documentation to
Page 4
<PAGE>
the date of termination, (c) for any Software accepted prior to the
date of termination, less any amounts previously paid and (d) a
Termination Fee with respect to Schedule #2, in an amount equal to the
lesser of [*]. If MetaSolv's fee has been specified on the basis of a
fixed fee for the completion of Services, the fee payable upon
termination (other than the Termination Fee) under (b) above shall be
based upon completed milestones identified in the Statement of Work,
plus the percent of Services completed towards any uncompleted
milestones identified in the Statement of Work, or if such a percent
of Services can not be determined from the Statement of Work, then on
a time and materials basis at rates agreed upon under this Agreement
for such Services. [*] MetaSolv shall not be obligated to return to
TWC any portion of the license fee paid to MetaSolv pursuant to the
Software License Agreement. TWC shall be entitled to retain and use,
in accordance with the license granted in the Software License
Agreement, any Software and any related User Manuals and Information
which are paid for by TWC, either prior to or following the
termination pursuant to this Section. MetaSolv agrees that a
termination under this Article shall not constitute a breach of or
default under this Agreement by TWC and that the payments to MetaSolv
as provided in this Article shall constitute full payment of all
claims by MetaSolv against TWC arising from a termination for
convenience by TWC.
5.4 EXCEPT TO THE EXTENT OF EXPENSES INCURRED AT THE EXPRESS REQUEST OF
TWC, AND PAYMENT FOR SERVICES PROVIDED, AND THE TERMINATION FEE UNDER
PARAGRAPH 5.3 ABOVE, TWC SHALL NOT BE LIABLE TO METASOLV FOR EXPENSES,
DAMAGES OR LOSSES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSS OF ANTICIPATED PROFIT,
UNABSORBED INDIRECT COSTS OR OVERHEADS, OR ANY OTHER LOSSES OR CLAIMS
WHATSOEVER ON ACCOUNT OF OR ARISING OUT OF TERMINATION FOR CONVENIENCE
IN CONNECTION WITH THIS ARTICLE.
5.5 Termination under this Article shall not affect either TWC's or
MetaSolv's pre-termination obligations hereunder and shall be without
prejudice to enforcement of any undischarged obligations existing at
the time of termination.
Page 5
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
5.6 Upon termination of this Agreement pursuant to this Article, MetaSolv
shall cooperate with TWC as reasonably required to effect a return of
TWC's data files in MetaSolv's or its contractors' possession to TWC.
6. TERMINATION OF AGREEMENT FOR DEFAULT:
6.1 Should either party at any time (a) materially fail or refuse to
perform its obligations hereunder, which failure or refusal is not
capable of cure, or if it can be cured, if the defaulting party does
not cure such failure or refusal within 30 days after written notice
thereof from the non-defaulting party; or (b) commit a "Repetitive
Breach" (defined below), provided that the non-defaulting party has
provided written notice and opportunity to cure of at least three of
the breaches constituting that Repetitive Breach (it being the
intention of this clause (b) to allow either party to terminate this
Agreement if the other party commits repetitive breaches of the same
or substantially similar material provisions of this Agreement), then
the non-defaulting party shall have the right, at its election and
without prejudice to any other rights or remedies, to terminate this
Agreement, in whole or in part, with immediate written notice of
termination to the other. A "Repetitive Breach" is a material failure
or refusal to perform the same material obligation or requirement of
this Agreement on not less than three occasions within a one-year
period which breaches cause substantial and continuing damage to the
achievement of the nondefaulting party's essential purpose for
entering into this Agreement, regardless of whether the individual
breaches making up the Repetitive Breach are cured. Where TWC
terminates a part of the Agreement that includes any item of Software
or Services that is a necessary condition to perform a remaining part
of the Agreement that has not been terminated, the parties agree
either that they will negotiate a change order for the delivery or
performance of the necessary condition, or that TWC shall also be
deemed to have terminated that portion of the Agreement calling for
delivery or performance of the Software or Services that are dependent
upon the necessary condition.
6.2 If TWC terminates this Agreement or any part hereof pursuant to this
Article, subject to Section 6.4 and 6.6 below, then (a) MetaSolv shall
return all fees paid by TWC to MetaSolv representing (1) Services not
yet rendered or satisfactorily performed in accordance with the
Documentation, (2) Software not Accepted by TWC in accordance with the
Software License Agreement or (3) Payment milestones not achieved
under the Software Development Agreement, as the case may be, and (b)
to the extent not recovered under subparagraph (a) above, and subject
to any limitations as set forth in this Agreement and any Schedule,
TWC may recover from MetaSolv all losses, damages, and expenses
incurred by TWC
Page 6
<PAGE>
as a direct result of MetaSolv's default or deduct the amount thereof
from any monies due or to become due to MetaSolv, MetaSolv being
obligated for the payment of any deficiency that may remain after such
deduction. Also, for breach of its intellectual property rights,
breach of MetaSolv's confidentiality obligations, and relative to
MetaSolv's indemnification obligations set forth in Articles 22 and 23
hereof, TWC may pursue any other rights and remedies available to TWC
under this Agreement or applicable law, including the right to recover
direct damages for the breach to the extent that such direct damages
are proven by TWC.
6.3 If MetaSolv terminates this Agreement or any part hereof pursuant to
this Article, subject to Section 6.4 below, MetaSolv may recover from
TWC (a) the balance owing for any reimbursable expenses accrued to the
date of termination, (b) for Services satisfactorily performed in
accordance with the Documentation to the date of termination, (c) for
any Software accepted prior to the date of termination, less any
amounts previously paid, and (d) a Termination Fee with respect to
Schedule #2, in an amount equal to the lesser of [*]. Also, for breach
of its intellectual property rights, breach of TWC's confidentiality
obligations, and relative to TWC's indemnification obligations set
forth in Articles 22 and 23 hereof, MetaSolv may pursue any other
rights and remedies available to MetaSolv under this Agreement or
applicable law, including the right to recover direct damages for the
breach to the extent that such direct damages are proven by MetaSolv.
MetaSolv may deduct any such amounts from any monies due or to become
due to TWC, TWC being obligated for the payment of any deficiency that
may remain after such deduction.
6.4 Excepting for liabilities arising from (i) either party's breach of
its confidentiality obligations or the other party's intellectual
property rights; (ii) the indemnification obligations set forth in
Articles 22 and 23 hereof; and (iii) obligations on the part of
MetaSolv to pay liquidated damages under Schedule 2 and/or Schedule 3;
in no event shall:
6.4.1 TWC's liability arising out of this Agreement exceed the
amounts which TWC has committed to pay but has not yet paid
under any Order(s) in existence at the time of TWC's default.
MetaSolv agrees that the payment to MetaSolv as provided in
this Article shall constitute full payment of all claims by
MetaSolv against TWC arising from a termination for TWC's
default.
Page 7
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
6.4.2 MetaSolv's liability arising out of this Agreement exceed the
amounts paid by TWC under the applicable Order(s) terminated by
TWC as a result of MetaSolv's default. TWC agrees that the
payment to TWC as provided in this Article shall constitute
full payment of all claims by TWC against MetaSolv arising from
a termination for MetaSolv's default.
Where liquidated damages are provided with respect to certain breaches
of this Agreement or any Schedule to this Agreement, and provided that
such liquidated damages are specifically referenced as "liquidated
damages" in this Agreement or such Schedule, such liquidated damages
shall be the sole and exclusive damages which may be received by the
non-breaching party with respect to such breach, unless and only to
the extent that an additional damages remedy is specifically
referenced in Section 12.4 of the Software Development Agreement or
Section 10.1 of the Software Support and Maintenance Agreement.
6.5 TWC shall be entitled to retain and use, in accordance with the
license granted in the Software License Agreement, any Software and
any related User Manuals and Information which are paid for by TWC,
either prior to or following a termination pursuant to this Section.
6.6 EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT OR THE SCHEDULES,
INCLUDING, WITHOUT LIMITATION, THE INDEMNIFICATION OBLIGATIONS SET
FORTH IN ARTICLES 22 AND 23 HEREOF, AND EXCEPT FOR A BREACH BY ONE
PARTY OF THE OTHER'S CONFIDENTIALITY OR INTELLECTUAL PROPERTY RIGHTS
AND OBLIGATIONS ON THE PART OF METASOLV TO PAY LIQUIDATED DAMAGES
UNDER SCHEDULE 2 AND/OR SCHEDULE 3, TWC SHALL NOT BE LIABLE TO
METASOLV, AND METASOLV SHALL NOT BE LIABLE TO TWC, FOR ANY AMOUNTS
REPRESENTING THEIR LOSS OF PROFITS, LOSS OF BUSINESS, UNABSORBED
INDIRECT COSTS OR OVERHEADS, OR OTHER INDIRECT, SPECIAL, EXEMPLARY,
CONSEQUENTIAL OR PUNITIVE DAMAGES, ARISING FROM THE PERFORMANCE OR
NONPERFORMANCE OF THIS AGREEMENT, WHETHER THE BASIS OF THE LIABILITY
IS BREACH OF AGREEMENT, TORT (INCLUDING NEGLIGENCE AND STRICT
LIABILITY), STATUTES OR ANY OTHER LEGAL THEORY (EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES).
7. ORDER(S) AND STATEMENTS OF WORK: Any attempted proposal or
acknowledgment of any Order by either party containing terms and
conditions
Page 8
<PAGE>
inconsistent with or in addition to the terms and conditions of this
Agreement are hereby objected to by the other party, and shall not be
binding upon that other party, unless specifically agreed to in
writing by that other party. If a Statement of Work is to be attached
to an Order, the parties shall, in a good faith, commercially
reasonable manner, negotiate and agree to the terms contained in such
Statement of Work. MetaSolv shall accept Orders for Software under
Schedule 1, MetaSolv's standard Software maintenance and support
Services under Schedule 3, and MetaSolv's standard training courses
under Schedule 2, provided that such Orders are properly placed within
the terms of this Agreement; and provided further, that scheduling,
staffing and place for performance of training services shall be
subject to the then current availability of MetaSolv facilities,
people and other resources, as determined in MetaSolv's reasonable
business judgment.
8. INVOICES AND PAYMENTS:
8.1 Except as otherwise set forth in a Schedule, MetaSolv shall issue
monthly invoices following the performance of Services. Any
taxes, transportation costs or other associated costs are to be
stated separately.
8.2 Except as otherwise set forth in a Schedule, invoices for
accepted Services and Software shall be paid by TWC within 30
days following receipt of a correct invoice from MetaSolv. An
invoice shall be deemed to be correct as to form if it
substantially conforms to the form of attached Exhibit B.
---------
MetaSolv agrees to provide reasonable supporting documentation
concerning any disputed amount of an invoice to TWC within 45
days after TWC provides written notification of the dispute to
MetaSolv. All invoiced amounts not in dispute shall be paid as
stated above, including the undisputed portion of any disputed
invoice. Once the dispute is resolved the disputed, unpaid
portion of such invoice shall be paid within 30 days following
such resolution. Payment of an invoice shall not be considered an
acceptance or a waiver of defects or non-conformities in
defective or non-conforming Services or Software. Past due
invoices will bear interest at the lesser of 18% per annum or the
highest rate permitted by applicable law.
8.3 TWC shall have the right, before making payments under this
Agreement, in its reasonable discretion and based upon reasonable
information and belief that a lien exists, to require MetaSolv to
furnish a written statement that all claims, liens and causes of
action that would constitute the basis for a lien including, if
any, those for the payment of wages or salaries or the payment of
charges for materials, tools, machinery or supplies, have been
satisfied, released or settled. In such event, TWC shall specify
to MetaSolv the information upon which its belief that a lien
exists is based. If the written statement required of MetaSolv is
not
Page 9
<PAGE>
furnished, the amount of such claims, liens and causes of action
may be withheld from any monies otherwise payable to MetaSolv
hereunder until such evidence of payment or a bond in a form
reasonably acceptable to TWC to indemnify TWC against any such
claims, liens, and causes of action has been furnished.
8.4 MetaSolv shall send all invoices under this Agreement to:
Time Warner Communications Holdings, Inc.
5700 S. Quebec Street
Greenwood Village, CO 80111
Attn: Accounts Payable
with a copy to the TWC Program Manager for any Statement of Work
then in effect, or to such other person as may be designated in
writing by TWC from time to time.
9. RECORDS:
9.1 MetaSolv shall maintain complete and accurate records of all
amounts billable, billed, payable and paid by TWC to it
hereunder in accordance with generally accepted accounting
principles and practices. TWC shall maintain complete and
accurate records of all Orders and amounts paid by it to
MetaSolv. Each party shall retain such records for a period of
four years from the date of final payment for Services and
Software covered hereby.
9.2 During the term of this Agreement and the respective periods in
which each party is required to maintain such records, the other
party shall have reasonable access, through its third party
certified public accounting firm, to such records for purposes
of audit during the audited party's normal business hours. All
payments hereunder by a party shall be subject to adjustment as
determined by such audits. Each party will be provided with
notice, and the opportunity to object on reasonable grounds,
with respect to the other's certified public accounting firm
chosen for the audit.
10. WARRANTIES:
10.1 All warranties set forth in this Article shall be in addition to
any warranties contained in the Schedules. For purposes of this
Article, the term "Software" shall be deemed to include User
Manuals and Information.
Page 10
<PAGE>
10.2 MetaSolv is the owner and/or the licensee of all IP Rights
relating to the Services and Software to be provided hereunder
and has full right to fulfill its obligations and grant all
licenses and rights granted herein. The Services and Software do
not and will not infringe any third party's IP Rights, and
MetaSolv is not aware of any facts upon which such a claim for
infringement could be based.
10.3 MetaSolv further warrants that during any period in which TWC is
entitled to receive software support and maintenance services
under Schedule 3, the Software then covered under such Schedule
3 shall perform as described in the Documentation and shall be
free from defects in workmanship and material, if properly used
in accordance with the Documentation's instructions and
specifications. During such period, if the warranty is breached,
MetaSolv shall repair or replace defective Software, in
accordance with its obligations under Schedule 3.
10.4 MetaSolv shall (a) provide the Services in a professional manner
in accordance with the standards of the industry, on a prompt,
courteous, and efficient basis and (b) deal with TWC and TWC's
Affiliates in a commercially reasonable manner. MetaSolv's
obligations under this paragraph are material terms of this
Agreement. MetaSolv will reperform defective Services upon
written notice from Customer received not later than the latest
of (x) thirty days after performance of the defective Service,
(y) thirty days after delivery by MetaSolv of a deliverable to
TWC containing the results of such defective Service, or (z) the
end of any warranty period applicable under this Agreement to
such Service.
10.5 Each party warrants that at all times during the term of this
Agreement it shall perform to the highest level of business and
professional ethics. Each party warrants that it has not made or
received, and shall not make or receive any payments, gifts,
favors, entertainment, secret commissions or hidden gratuities
that reasonably could be construed to be given or accepted for
the purpose of securing preferential treatment or action from or
to any party in connection with this Agreement. The parties'
obligations and representations under this paragraph are
material terms of this Agreement.
10.6 At all times during the term of this Agreement, each party shall
provide sufficient resources to satisfactorily complete the
performance of its obligations under this Agreement. At all
times during the term of this Agreement, all personnel assigned
by either party or its subcontractors shall comply with the
terms of this Agreement, including, but not limited to,
provisions relating to confidentiality and conduct.
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10.7 MetaSolv further warrants that all functionality which MetaSolv
referenced in the Proposal as being available in release 3.0 of
MetaSolv's Telecom Business Solution(TM) Software will be
provided to TWC under the terms of the Software License
Agreement and/or the Software Development Agreement through the
Original Statement of Work thereunder. Notwithstanding anything
in this Agreement to the contrary, the warranty set forth in
this Section 10.7 shall remain in effect until six months after
the later of Acceptance of the last Services to be performed or
Software to be delivered under the Original Statement of Work.
The preceding sentence will not affect the definition of
Warranty Period in Section 10.9, and does not affect the
commencement of payment for Maintenance Support at the end of
such Warranty Period under Schedule 3 of this Agreement.
10.8 MetaSolv shall, at no expense to TWC, correct any failure to
fulfill any of the above warranties, provided that it is given
notice of such failure during the applicable warranty period.
TWC shall, at no expense to MetaSolv, correct any failure to
fulfill the warranties stated in 10.5 and 10.6, provided that it
is given notice of such failure.
10.9 Unless a different warranty period is specified with respect to
Software or a particular Service in this Agreement, the
Schedules or a Statement of Work, MetaSolv's warranties in this
Article and in the Schedules and Statements of Work shall
commence upon the Acceptance of the applicable Services or
Software and shall continue in effect for a period of six months
thereafter (the "Warranty Period").
10.10 THE WARRANTIES CONTAINED IN THIS AGREEMENT AND THE SCHEDULES ARE
EXCLUSIVE. THEY ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ARISING BY
STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR USAGE
OF TRADE.
10.11 When a need arises for warranty service for MetaSolv Software or
Services, TWC shall contact:
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Manager, Customer Support
MetaSolv Software, Inc.
5560 Tennyson Parkway
Plano, TX 75024
Phone: 888-884-7686 (Customer Support)
Phone: 972-403-8300 (MetaSolv General Number)
or such other person as may be designated by MetaSolv in writing
from time to time. MetaSolv's warranty service shall be limited to
and provided in accordance with MetaSolv's obligations under
Schedule 3 of this Agreement.
10.12 THE FOLLOWING STATED REMEDIES FOR BREACH OF WARRANTY ARE EXCLUSIVE
AS TO THE WARRANTIES SPECIFIED, AND METASOLV PROVIDES NO OTHERS FOR
SUCH WARRANTIES, UNLESS THEY ARE SPECIFICALLY AND EXPRESSLY STATED
BY THE TERMS OF THIS AGREEMENT: (a) for warranties under Section
10.2, the remedies in Article 23 are exclusive; (b) for warranties
under Section 10.3, the remedies in Sections 10.3, 10.4, 10.8 and
10.11 above are exclusive; (c) for warranties under Section 10.4,
the remedies in Section 10.4, 10.8 and 10.11 are exclusive.
11. COMPLIANCE WITH LAWS:
11.1 Each party shall comply with all federal, state and local laws,
rules, regulations, court orders and governmental or regulatory
agency orders applicable to it in connection with this Agreement.
11.2 Each party shall obtain and maintain at its own expense all permits
and licenses required by law with respect to its performance of its
obligations hereunder, and shall give all notices, pay all fees and
comply with all laws, ordinances, rules and regulations relating to
its performance obligations specified herein.
12. TAXES:
12.1 TWC will reimburse MetaSolv for applicable state or local
privilege, excise, sales and use taxes on personal property
furnished by MetaSolv hereunder (the "Sales Taxes"). Sales Taxes
payable by TWC hereunder will be billed as separate items on all
invoices and shall not be included in the charges for Services or
Software. MetaSolv shall be solely responsible for the payment of
all other taxes applicable to it (including, but not limited to,
payroll taxes and all taxes based on net income).
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12.2 Except for obligations specifically and expressly undertaken by the
other under this Agreement, each party shall pay and hold the other
and its affiliates harmless from and against any penalty, interest,
additional tax or other charge that may be levied or assessed as a
result of the delay or failure of the other, for any reason, to pay
any tax or file any return or information required by law, rule,
regulation, or this Agreement.
12.3 Following a determination by any taxing authority that additional
tax is due for Services provided or Software licensed, MetaSolv
shall provide to TWC full supporting documentation for the Services
or Software for which such taxes are assessed. If TWC is not
responsible for, or has otherwise paid, the assessed taxes, then
TWC will not reimburse MetaSolv for such assessment.
12.4 If TWC is audited or assessed by any taxing authority with respect
to any transactions hereunder, MetaSolv shall, upon request,
promptly furnish to TWC any and all documentation not otherwise
available to TWC regarding such transactions.
13. LABOR RELATIONS: MetaSolv shall be responsible for labor relations with
trade, union, or labor organizations either representing or seeking to
represent its employees. MetaSolv shall negotiate and seek to adjust all
disputes between itself and its employees or the trade, union, or labor
organization representing or seeking to represent its employees. In the
performance of duties contemplated by this Agreement, MetaSolv may enter
into any contract with a trade, union, or labor organization representing
its employees; provided, however, that in the absence of a governmental
determination, MetaSolv shall not enter into a contract that purports to
obligate TWC to a trade, union, or labor organization either as a successor
or assignee of MetaSolv, or in any way, at any time. MetaSolv represents
and warrants that it is not a party to any existing trade, union or labor
organization contract that purports to obligate TWC.
14. PLANT AND WORK RULES:
14.1 MetaSolv and TWC, while on the premises of the other, shall comply
with all plant rules and regulations including, where required by
governmental regulation, submission of satisfactory clearance from
the appropriate governmental authorities. MetaSolv and TWC,
respectively, shall be responsible for ensuring that all persons
furnished by them work harmoniously with all others when on
MetaSolv's, TWC's or others' premises.
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14.2 Each party may require the other's employees to exhibit to it
issued identification credentials in order to gain entry to its
premises. If any of MetaSolv's employees are no longer performing
Services, MetaSolv shall immediately inform TWC. Notification shall
be followed by the prompt delivery to TWC of the identification
credentials involved, or a written statement of the reasons the
identification credentials cannot be returned.
15. DELIVERY: Each party shall act with diligence, reasonableness, and good
faith to meet its obligations under this Agreement. MetaSolv shall deliver
Software and Services in time to meet the delivery date stated in an
accepted Order or Statement of Work. For each party's obligations under
this Agreement, time is of the essence. TWC and MetaSolv may agree in
writing to change any delivery date. Charges, if any, resulting from such
change shall be agreed to at the time of the change.
16. DAMAGE TO PROPERTY: Each party shall immediately notify the other and any
third party owners of real property or tangible, personal property of any
loss of or damage to such property attributable to the legal fault of the
notifying party or its employees and contractors. Each party shall take
reasonable precautions and necessary measures to prevent further damage or
loss. At the property owner's option and direction, the party causing such
damage shall, at its sole cost, restore or replace such damaged property to
its original condition and place such property in operation.
17. INDEPENDENT CONTRACTOR: Each party hereby declares and agrees that it is
engaged in an independent business from the other's, and will perform its
obligations under this Agreement as an independent contractor and not as
the agent or employee of the other. All persons performing Services
hereunder shall be considered solely the employees or agents of MetaSolv.
Each party has and hereby retains the right to exercise full control of and
supervision over the performance of its obligations hereunder and full
control over the employment, direction, compensation and discharge of its
employees assisting in the performance of such obligations. Each party
shall be solely responsible for compliance with all laws and rules and
regulations including, but not limited to, employment of labor, hours of
labor, working conditions, payment of wages and payment of taxes such as
unemployment, social security and other payroll taxes, in addition to any
employment benefits claimed by persons furnished by that party. MetaSolv
will comply with all requirements for withholding and payment of federal,
social security, state, provincial, local or other payroll taxes on amounts
paid under this Agreement or otherwise. Each party will be responsible for
its own acts and those of its agents, employees and subcontractors during
the performance of its obligations under this Agreement. Neither party nor
its employees are entitled to unemployment insurance benefits unless
unemployment compensation coverage is provided by that employer or
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such worker. MetaSolv is responsible for and shall pay all assessable
federal, state, provincial and local income tax on amounts paid to it under
this Agreement.
18. SUBCONTRACTORS: Each party shall be responsible for compliance by it and
its subcontractors with that party's obligations under the terms of this
Agreement. MetaSolv shall obtain TWC's written consent prior to
subcontracting any obligations hereunder, and TWC shall have the right, in
its reasonable discretion, to reject MetaSolv's choice of subcontractor and
require that MetaSolv use another subcontractor reasonably satisfactory to
TWC; provided, however, that this requirement shall not apply to purchases
of incidental, standard commercial supplies or raw materials or to
MetaSolv's use of subcontractors to perform certain specified tasks under
this Agreement provided that MetaSolv's use of subcontractors under this
Agreement is consistent with MetaSolv's past business practices. In the
event that TWC exercises its rejection right under this paragraph, then (a)
MetaSolv shall be excused for its inability to meet schedule and
functionality requirements, but only to the extent that TWC's rejection of
a subcontractor is a material cause of such inability; and (b) MetaSolv may
seek additional compensation through the Change Order process for
reasonable additional costs, downtime or productivity decrease in
MetaSolv's project staff, but only to the extent that TWC's rejection of
the Subcontractor is a material cause of such reasonable additional costs,
downtime or productivity decrease. TWC's rejection of a subcontractor will
not be considered a material cause of MetaSolv's inability to meet schedule
or functionality requirements where MetaSolv has not exercised reasonable
diligence to give ample advance notification of its choice of
subcontractor, nor where MetaSolv chooses a subcontractor that it knows or
should know that such subcontractor is likely to be unacceptable to TWC.
Each of the parties shall cause each of its subcontractors to enter into an
agreement causing such subcontractors and their respective personnel to
comply with the terms of this Agreement, including, but not limited to,
provisions relating to confidentiality and conduct while on the other's
premises. Each party shall have the right to review such agreements upon
its reasonable request to ensure that such agreements comply with the
requirements of this Section.
19. INSURANCE:
19.1 MetaSolv shall at all times during the term of this Agreement, at
its own cost and expense, carry and maintain the insurance coverage
listed below with insurers having a "Best's" rating of B+XIII or
better:
19.1.1 Workers' Compensation with statutory limits of coverage
and, although not required by statute, coverage for any
MetaSolv employee or agent entering onto TWC's premises.
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19.1.2 Employers' Liability or "Stop Gap" insurance with limits of
not less than $100,000 for each accident.
19.1.3 Commercial General Liability insurance covering claims for
bodily injury, death, or property damage occurring or
arising out of the performance of this Agreement, including
coverage for independent contractor's protection (required
if any work will be subcontracted), premises-operations,
products/completed operations and contractual liability
with respect to the liability assumed by MetaSolv
hereunder. The limits of insurance shall not be less than:
Each Occurrence $1,000,000
General Aggregate Limit $2,000,000
Products-Completed Operations
Limit $1,000,000
Personal and Advertising
Injury Limit $1,000,000
Umbrella Policy $4,000,000
19.1.4 Should performance of this Agreement involve any use of
automobiles, comprehensive automobile liability insurance
covering the ownership, operations, and maintenance of all
owned, non-owned and hired motor vehicles with limits of
not less than $1,000,000 per occurrence for bodily injury
and property damage.
19.2 MetaSolv shall forward to TWC certificates of such insurance upon
execution of this Agreement and upon TWC's written request the
current renewal of such insurance during the term of this
Agreement. The certificate(s) shall provide that (a) TWC (and its
Affiliates receiving Services and/or Software) shall be named as an
additional insured(s) on all such policies (except workers'
compensation), as their interest may appear with respect to this
Agreement; (b) 30 days' prior written notice of cancellation of, or
material change or exclusions in, the policy to which
certificate(s) relate shall be given to TWC; and (c) coverage is
primary and not in excess of, or contributory with, any other valid
and collectible insurance purchased or maintained by TWC. MetaSolv
shall not commence any work hereunder until the obligations of
MetaSolv with respect to insurance have been fulfilled. The
fulfillment of such obligations, however, shall not otherwise
relieve MetaSolv of any liability assumed hereunder or in any way
modify MetaSolv's obligations to indemnify TWC.
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19.3 TWC shall be authorized by MetaSolv to confer directly with the
agent or agents of the insuring carrier or carriers concerning the
extent and limits of MetaSolv's insurance coverage in order to
assure MetaSolv's compliance with this Article 19.3.
19.4 MetaSolv shall require its subcontractors (and their respective
subcontractors and independent contractors) who may enter upon
TWC's premises to maintain insurance as described above, and
MetaSolv shall cause each such subcontractor (and their respective
subcontractors and independent contractors) to provide evidence of
such insurance coverage reasonably satisfactory to TWC.
Alternatively, at MetaSolv's option, MetaSolv shall assure that
MetaSolv's own insurance maintained under this Article 19 is
applicable to such independent contractors.
19.5 MetaSolv shall not at any time after the expiration or termination
of this Agreement take any affirmative act to alter, impair or
cancel any insurance coverage which applies to acts or occurrences
which occurred during the period in which this Agreement was in
effect. This paragraph does not require MetaSolv to take
affirmative action after the expiration or termination of this
Agreement to renew or maintain any insurance coverage.
20. CHANGE ORDER PROCESS:
20.1 Either party may request a change by submitting to the other a
written, formal Change Request reasonably detailing the scope of
such change. Each party may accept or reject a change requested by
the other in its sole, reasonable discretion. MetaSolv shall
promptly evaluate each change requested by TWC and shall promptly
provide TWC with a written impact assessment which shall address
relevant factors, including, without limitation, the necessity for
any proposed change in price or delivery schedules or any other
terms and conditions of this Agreement or any Schedule. Such
evaluation and assessment by MetaSolv shall be made without charge
to TWC; provided, however, that MetaSolv shall be entitled to
charge TWC on a time and materials basis in each of the following
two cases: (i) to the extent that TWC has submitted more than 30
Change Requests in a calendar year, and (ii) where MetaSolv
reasonably believes that the evaluation and assessment will require
more than a person-day of effort due to the size and scope of the
change. TWC must agree in writing before a fee for such an
evaluation and assessment may be charged, and prior to conducting
such an evaluation and assessment, MetaSolv shall provide to TWC a
written estimate of the cost thereof,
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based upon the cost to MetaSolv of time and materials in connection
therewith. TWC shall respond promptly in writing. Upon receiving
written approval from TWC's authorized parties, as designated by
TWC from time to time, MetaSolv shall conduct the evaluation and
assessment. TWC's Project Manager, and such other persons who are
designated under any Statement of Work, shall be considered an
authorized representative for providing such written approval. If
TWC agrees in writing to make such changes in the Agreement or such
Schedule as proposed in a writing signed by MetaSolv, this writing
shall become a Change Order, and MetaSolv shall effect the changes.
TWC's Program Manager, and other representative authorized under a
Statement of Work, may authorize MetaSolv by written notice
(including but not limited to e-mail or fax) to commence work on a
Change Request before a Change Order has been processed and signed,
in which event MetaSolv may commence the work so authorized, and if
the Change Order is not signed may invoice and shall be paid for
authorized work done on such Change Request, on a time and
materials basis at the rates specified in Schedule 2. All
correspondence regarding changes shall be in writing. All approved
Change Orders shall be in writing and shall be considered as
amendments to this Agreement or the applicable Schedule.
Notwithstanding anything herein to the contrary, the parties
acknowledge and agree that the implementation of certain of the
work described under an Order or Statement of Work will require
further discussion and agreement between the parties to the extent
that the Order or Statement of Work does not specify to the
necessary level of detail the specific method by which such
implementation will be accomplished. In such discussions, the
parties will consider both general commercial requirements of
MetaSolv's existing and potential customer base and the
requirements of TWC and its business. Such discussions, and the
resulting implementation which is agreed to between the parties,
will not be considered to be Change Requests or Change Orders
pursuant to this Section 20.1 so long as the resulting
implementation is within the scope of the work required under the
Order or the Statement of Work.
20.2 In the event that a request is made by TWC for MetaSolv to commence
work that in MetaSolv's reasonable, good faith, belief is outside
of the scope of its required effort under the Statement of Work,
and which therefore requires a Change Order, then MetaSolv may,
promptly and in writing, propose such Change Order. TWC will
promptly respond in writing. In that case, provided that either (1)
such failure to commence work does not delay the delivery of any
Development, Service or other Deliverable as required under the
Statement or Work, or (2) such work requested by TWC is in fact
outside the scope of MetaSolv's required effort under the Statement
of Work, then MetaSolv's failure to commence the requested work
until it has received TWC's written response to the proposed Change
Order will
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not be a breach of MetaSolv's responsibility under the Statement of
Work. Furthermore, where, after TWC's written response, there
remains a reasonable dispute between the parties as to whether such
work requires a Change Order or not, the issue will be promptly
escalated for resolution under the dispute resolution process
described in Article 24 below.
21. CONFIDENTIAL INFORMATION:
21.1 As used herein, "Confidential Information" shall mean any and all
technical or business information, in whatever form or medium,
furnished or disclosed by one party to the other in connection with
this Agreement (including, but not limited to, product/service
specifications, prototypes, computer programs, models, drawings,
marketing plans, customer lists, financial data, personnel
statistics or third party information), which (a) the recipient
should reasonably know to be the confidential information of the
disclosing party; or (b) is marked as confidential or proprietary;
or (c) for information which is orally disclosed, the disclosing
party indicates to the other at the time of disclosure the
confidential or proprietary nature of the information and provides
a summary and notice of the confidentiality of the orally disclosed
information in writing to the receiving party within 20 days after
the disclosure. Any third party information furnished or disclosed
and marked as or stated to be confidential or proprietary shall be
deemed Confidential Information and shall be subject to the terms
and conditions herein.
21.2 Each party shall treat such Confidential Information as
confidential for a period of three years from the date of
disclosure and shall use such Confidential Information solely for
the purposes of performing its obligations under this Agreement,
unless otherwise authorized in writing by the disclosing party.
Notwithstanding the foregoing, the nondisclosure obligations and
restrictions on use with respect to any Confidential Information
that constitutes a trade secret shall continue in effect for so
long as the Confidential Information remains a trade secret. Each
party agrees: (a) not to copy such Confidential Information of the
other unless specifically authorized in writing; (b) not to
disclose of any such Confidential Information to anyone (including
subcontractors) except employees and independent contractors of
such party to whom disclosure is necessary for its performance of
this Agreement; (c) to appropriately notify such employees and
independent contractors that the disclosure is made in confidence
and shall be kept in confidence in accordance with this Agreement;
and (d) to make requests for Confidential Information of the other
only if necessary to perform its obligations under this Agreement.
The obligations set forth herein shall be satisfied by each party
through the exercise of at least the same degree of care
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used to restrict disclosure and use of its own information of like
importance. Notwithstanding any other provisions of this Article,
Confidential Information may be disclosed as may be required by
law, regulation or court or agency order or demand, after prompt
prior notification to the other party of such required disclosure.
21.3 Each party agrees that in the event permission is granted by the
other to copy Confidential Information, or that copying is
permitted hereunder, each such copy shall contain and state the
same confidential or proprietary notices or legends, if any, which
appear on the original. Nothing in this Section shall be construed
as granting to either party any right or license under any
copyrights, inventions, or patents now or hereafter owned or
controlled by the other party. Upon termination, cancellation or
expiration of this Agreement for any reason or upon the reasonable
request of the disclosing party, and except to the extent that the
recipient retains a license to use such Confidential Information,
all Confidential Information, together with any copies that may be
authorized herein, shall be returned to the disclosing party or, if
requested by the disclosing party, certified destroyed by the
receiving party .
21.4 The obligations imposed in this Article shall not apply to any
information that is: (a) proven to be already in the possession of
or known to the recipient at the time of disclosure; (b) publicly
available through no fault of the recipient; (c) obtained by the
recipient from a third party not in breach of any obligation of
confidentiality; or (d) independently developed by personnel or
agents of one party without access to the Confidential Information
of the other.
21.5 Notwithstanding the confidentiality obligations imposed by this
Article 21, each party may use the Residuals of the other's
intellectual property (defined below) disclosed to it in the course
of the performance of this Agreement, but without identifying the
other party as the source of such intellectual property. The term
"Residuals" refers to ideas, concepts, know-how, methods,
techniques, processes, skills and other information that, after the
disclosure of Confidential Information, is known to and remembered
by the recipient or its personnel, but without the continuing use
of or reliance on materials or tangible objects provided by the
disclosing party as Confidential Information. Notwithstanding
anything herein to the contrary, the term "Residuals" does not
include any information that is specific to TWC's or MetaSolv's
business such as information regarding business plans and
projections, markets, customers or financial results. Nothing in
this paragraph grants or waives any rights in a trademark,
copyright or patent of either party or any other person. The rights
to use Residuals as described in this
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paragraph are perpetual, are without obligation of royalty or other
compensation of any kind, and survive the termination of this
Agreement. THE RIGHTS TO USE RESIDUALS AS DESCRIBED IN THIS
PARAGRAPH ARE GRANTED WITHOUT WARRANTY, AND THE GRANTING PARTY
EXPRESSLY DISCLAIMS WARRANTY FOR SUCH RESIDUALS, INCLUDING BUT NOT
LIMITED TO ANY WARRANTY OF MERCHANTIBILITY OR WARRANTY OF FITNESS
FOR A PARTICULAR PURPOSE.
21.6 In furtherance of its obligations under this Article, each party
shall (a) enter into agreements with its employees and contractors
who have access to Confidential Information of the other party,
causing such employees and contractors to comply with the terms of
this Article and (b) cause such employees and contractors to comply
with the terms thereof. Either party shall have the right to review
any such agreement of the other, upon its reasonable request to
ensure that such agreements comply with the requirements of this
Section.
22. INDEMNIFICATION:
22.1 MetaSolv or TWC, as the case may be ("Indemnitor"), shall
indemnify and hold the other and its owners, parents, partners,
affiliates, subsidiaries, agents, subcontractors, officers,
directors and employees ("Indemnitee") harmless from any actions,
claims, demands, judgments, orders, awards, losses, damages, costs,
expenses (including, but not limited to, court costs and attorneys'
fees) and all other liabilities in respect of bodily injury to
and/or death of any person or damage to any tangible property
(collectively, "Liabilities") arising out of, resulting from, or in
connection with:
22.1.1 Indemnitor's or its affiliate's intentional, grossly
negligent or negligent acts or omissions in connection with
this Agreement.
22.1.2 Indemnitor's breach of any of the representations,
warranties, covenants, terms or conditions of this
Agreement (including, but not limited to, the Schedules).
22.1.3 With respect to MetaSolv as Indemnitor and TWC as
Indemnitee, the defective or unreasonably dangerous
condition of any Services or Software or materials used in
or arising from provision of Services or Software.
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At Indemnitee's request, Indemnitor shall defend Indemnitee against
any such Liabilities.
22.2 Indemnitee shall give Indemnitor prompt, reasonable notice of any
existing or potential Liabilities known to Indemnitee. Failure by
Indemnitee to provide prompt, reasonable notice of any such
Liabilities shall not relieve Indemnitor of its obligations under
this Article, except to the extent that Indemnitor is materially
prejudiced by such failure. Indemnitee may have its own counsel
participate in the defense of any such matter, provided that the
cost of such counsel shall be borne exclusively by Indemnitee. If
Indemnitor fails to assume its defense obligations hereunder
promptly upon notice, Indemnitee shall be entitled to select
counsel and to defend itself at Indemnitor's expense.
23. IP RIGHTS INDEMNIFICATION:
23.1 MetaSolv shall indemnify and hold harmless TWC and its owners,
parents, affiliates, subsidiaries, agents, subcontractors,
officers, directors and employees ("Related Parties") from and
against all actions, claims, demands, judgments, orders, awards,
losses, damages, costs, expenses (including, but not limited to,
court costs and attorneys' fees) and all other liabilities that may
result by reason of any infringement or claim of infringement of
any patent, trademark, copyright, trade secret or other proprietary
right (an "IP Right") relating to the Services or Software and/or
the use thereof. MetaSolv will defend and/or settle at its own
expense any action brought against TWC or its Related Parties to
the extent that it is based on a claim that Services, Software
and/or the use thereof, infringe any third party's IP Rights.
Notwithstanding the foregoing, MetaSolv shall have no obligation to
defend and indemnify TWC if the claim or liability is based upon
modifications made by TWC or another third party, unless either
MetaSolv or an authorized agent of MetaSolv specifically
recommended or approved such modifications.
23.2 TWC shall give MetaSolv prompt, reasonable notice of any such
infringement or claim of infringement known to TWC. Failure by TWC
to provide prompt, reasonable notice of any such infringement or
claim of infringement shall not relieve MetaSolv of its obligations
under this Article, except to the extent that MetaSolv is
materially prejudiced by such failure. If available, TWC shall
provide a copy of each communication, notice or other action
relating to the alleged infringement, shall cooperate in the
defense and settlement thereof, and shall provide MetaSolv with the
authority, information and assistance (with reasonable out of
pocket costs at MetaSolv's expense, other than salaries or other
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employment compensation of TWC employees or contractors involved in
such defense and settlement) necessary to defend or settle any such
claim. TWC may have its own counsel participate in the defense of
any such matter, provided that the cost of such counsel shall be
borne exclusively by TWC and, except with respect to any matter as
to which a conflict of interest exists between TWC and MetaSolv,
MetaSolv shall retain control of the defense and settlement of the
action. If MetaSolv fails to assume its defense obligations
hereunder promptly upon notice, TWC shall be entitled to select
counsel and to defend itself at MetaSolv's expense.
23.3 If (a) a preliminary or final judgment shall be obtained against
TWC's use of any Services or Software or any part thereof by reason
of alleged infringement, (b) a third party claim causes TWC's quiet
enjoyment and use of the Services or Software to be materially
endangered or disrupted, or (c) if in MetaSolv's reasonable
opinion, such Services or Software and/or the use thereof are
likely to become subject to a claim for infringement, MetaSolv
shall, subject to the next following sentence, at its expense and
option and without any effect or waiver of any right TWC may
possess at either law or equity, either: (1) procure for TWC the
right to continue using such Services or Software; or (2) replace
or modify the Services or Software so that they become non-
infringing, but only if the modification or replacement does not
materially, adversely affect TWC's rights or ability to use such
Services or Software or the compliance of such Services or Software
with the Documentation. If neither of the above options is
commercially reasonable, then MetaSolv shall return to TWC amounts
paid as Software license fees or development Services fees pursuant
to this Agreement, less a reasonable charge, based on a seven-year
prorated schedule, for the use of such Services or Software prior
to TWC's ceasing its use, and in such event TWC's license to use
Software and Developments licensed hereunder shall then cease.
23.4 For purposes of this Article, the term "Software" shall be deemed
to include User Manuals and Information.
23.5 TWC shall indemnify and hold harmless MetaSolv and its owners,
parents, affiliates, subsidiaries, agents, subcontractors,
officers, directors and employees from and against all actions,
claims, demands, judgments, orders, awards, losses, damages, costs,
expenses, including but not limited to court costs and attorney's
fees, and all other liabilities that may result by reason of any
infringement or claim of infringement of any IP Right which relates
to a modification to the Software which is made by or on behalf of
TWC (other than by or with the recommendation or approval of
MetaSolv or its affiliates or authorized agents) following TWC's
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<PAGE>
exercise of its right to acquire a source code license to the
Software. Such indemnification shall be made in accordance with the
same procedures and subject to the same limitations as set forth in
Sections 23.1 and 23.2.
24. DISPUTE RESOLUTION:
24.1 Exhibit A contains a complete list of the names, titles, and
---------
telephone numbers of personnel of each of TWC and MetaSolv that the
other shall contact if a Dispute (as defined below) occurs under this
Agreement.
24.2 Any claim, controversy or dispute of any kind or nature whatsoever
that arises between the parties with respect to the subject matter of
this Agreement ("Dispute"), shall be resolved in the following
manner: Either party may provide the other with notice of a Dispute.
Such Dispute shall first be considered by the project managers of the
parties, as designated on Exhibit A. If such Dispute has not been
---------
settled to the mutual satisfaction of the parties within ten days (or
such longer period as may be mutually agreed) from the date that
either party provided notice of the Dispute, the matter shall be
escalated to and considered by a team from each party consisting of
the project manager for such party and a Vice President or higher
officer of such party who has the authority to settle the Dispute but
who has not been involved in the day-to-day management of the
project. If such Dispute has not been settled to the mutual
satisfaction of the parties within 20 days (or such longer period as
may be mutually agreed) from the date that either party provided
notice of the Dispute, the Dispute shall be finally resolved by
binding arbitration as provided in this Article. Notwithstanding the
foregoing, either party may terminate this Agreement in accordance
with its terms and conditions, if applicable, without being required
to follow the procedures set forth in this Article. Furthermore,
either party may seek immediate, judicial injunctive relief as to a
violation of any confidentiality or intellectual property rights by
the other under this Agreement, without being required to follow the
procedures set forth in this Article; in such event the parties agree
that either may then seek appointment of an arbitrator under the next
paragraph, and such arbitrator may determine, after a hearing in
accordance with AAA rules and in addition to any other matters that
the arbitrator is authorized to consider, whether such temporary
judicial injunctive relief shall be continued by the parties during
pendency of the arbitration.
24.3 A single arbitrator engaged in the practice of law, who is
knowledgeable about the subject matter of this Agreement and the
matter in Dispute, shall conduct the arbitration under the then
current rules of the American Arbitration Association
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("AAA"). The arbitrator shall be selected in accordance with AAA
procedures from a list of qualified people maintained by the AAA. The
arbitration shall be conducted in Chicago, Illinois or at such other
location as the parties may mutually agree, and all expedited
procedures prescribed by the AAA rules shall apply. The laws of the
State of Colorado shall govern the construction and interpretation of
this Agreement without regard to the conflicts of law rules of such
State. The arbitrator shall apportion the costs of arbitration. The
arbitrator's decision and award shall be final and binding, and
judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof.
24.4 Either party may request from the arbitrator injunctive relief
consistent with the provisions of this Agreement or applicable law.
The arbitrator shall not have authority to award punitive damages.
24.5 Except for an application for injunctive relief permitted above with
respect to violation of confidentiality or intellectual property
rights, if any party files a judicial or administrative action
asserting claims subject to arbitration, as prescribed herein, and
another party successfully stays such action and/or compels
arbitration of said claims, the party filing such action shall pay
the other party's costs and expenses incurred in seeking such stay
and/or compelling arbitration, including reasonable attorneys' fees.
25. SETOFF AND WORK STOPPAGE: All claims for money due from one party to the
other shall be subject to deduction or setoff by reason of any counterclaim
arising out of this or any other transaction with the other. In the event
of a failure of TWC to pay MetaSolv undisputed amounts due to MetaSolv
during the term of this Agreement, and if TWC has failed to cure such a
breach within fifteen days written notice from MetaSolv, then in addition
to any other remedies available to MetaSolv, MetaSolv may stop work under
the Agreement until the undisputed amount has been paid.
26. REMEDIES CUMULATIVE: The remedies provided herein shall be cumulative and
in addition to any other remedies provided by law or equity.
27. ATTORNEYS' FEES: If either party shall commence a proceeding against the
other that arises out of the provisions hereof, or to recover damages as
the result of the alleged breach of any of the provisions hereof, the
prevailing party therein shall be entitled to recover all reasonable costs
incurred in connection therewith, including reasonable attorneys' fees.
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<PAGE>
28. REIMBURSEMENT FOR EXPENSES: To the extent provided in any Schedule, TWC
shall reimburse MetaSolv for reasonable travel and other expenses incurred
by MetaSolv during the term of this Agreement, provided that such expenses
are preapproved and authorized in writing by an authorized representative
of TWC, or are within written guidelines agreed to between TWC and
MetaSolv. TWC and MetaSolv shall exercise good faith efforts to reach
prompt agreement on such written guidelines.
29. ADVERTISING; PUBLICITY: Each party shall submit to the other all
advertising, sales promotion, press releases and other publicity matters
relating to this Agreement where the other's name is mentioned or language
is used from which the connection of the other's name therein is more
likely than not to be inferred. Neither party shall publish, issue or use
such advertising, sales promotion, press release, or publicity matter, or
use the other's name as a reference, without prior written approval of the
other. Each party shall take reasonable steps to cause any subcontractor it
hires in the performance of this Agreement to comply with this provision or
an equally restrictive provision.
30. COMPARATIVE PRICING: [*]
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* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
[*]
31. FORCE MAJEURE: Neither party shall be liable for failure to perform any
provisions of this Agreement, except for provisions relating to payments to
be made, when such failure is caused by unforeseeable force majeure
circumstances. If such circumstances occur, the party injured by the
other's inability to perform may elect to suspend this Agreement or any
portion hereof for the duration of the force majeure circumstances, and
then resume performance under this Agreement. If it appears that a time
for delivery or performance scheduled pursuant to this Agreement will be
extended for more than 60 days, the party receiving notice of the force
majeure circumstances shall have the right to terminate, by written notice
to the other party, this Agreement or any Order or any portion thereof, and
the obligations and liabilities of the parties with respect to such portion
of the Agreement or Order shall thereupon lapse and terminate, except to
the extent such obligations or rights are intended to survive pursuant to
this Agreement. The party experiencing the force majeure circumstances
shall give notice immediately to the other party, and the parties shall
cooperate with one another reasonably to minimize the impact of such
circumstances on one another. In the event that MetaSolv notifies TWC of a
force majeure circumstance, MetaSolv agrees to assist TWC by providing
information that will aid TWC in locating and arranging for substitute
provision of Services or Software.
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* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
32. NOTICES: Unless otherwise permitted, all notices, demands, or other
communications required to be given under this Agreement shall be made in
writing and shall be deemed to have been duly given if (a) mailed,
registered or certified mail, return receipt requested, postage prepaid,
(b) delivered by hand, (c) sent by facsimile transmission, or (d) delivered
by courier, to the addresses listed at the head of this Agreement. Notices
delivered personally or by courier shall be effective upon delivery to the
intended recipient. Notices transmitted by facsimile transmission shall be
effective when confirmation of transmission is received. Notices delivered
by registered or certified mail shall be effective on the delivery date set
forth on the receipt of registered or certified mail, or three days after
deposit in the mail, whichever is earlier. Addresses may be changed by
written notice to the parties.
33. NONEXCLUSIVE AGREEMENT: It is expressly understood and agreed that this
Agreement does not grant to either party any exclusive privileges or rights
and either party may contract with other suppliers or customers, as
applicable, for the procurement and provision of comparable Services or
Software. Neither party makes any guarantee or commitment for any minimum
or maximum amount of Services or Software to be purchased hereunder, other
than as is evidenced by Orders signed by both parties.
34. ASSIGNMENT:
34.1 Any assignment or delegation of the rights or obligations hereunder,
in whole or in part, or any other interest hereunder, without the
other party's written consent, shall be void; except that an
assignment
34.2 confined solely to money due to the assigning party or to become due
shall be void only to the extent that it attempts to impose upon the
other party obligations to the assignee additional to the payment of
such monies, or to preclude either party from dealing solely and
directly with the other party in all matters pertaining hereto,
including the negotiation of amendments or settlements of amounts
due.
34.2 Notwithstanding anything in this Article to the contrary, each party
reserves the right to assign this Agreement incidental to a transfer
(by operation of law or otherwise) of all or a substantial portion of
its business (which shall include, without limitation, a transfer of
assets) or, in addition in the case of TWC, incidental to a transfer
of all or substantially all of the business being conducted as of the
effective date of this Agreement by Time Warner Communications, a
Delaware partnership; provided, however, that the rights and
obligations of the parties under this Agreement following such an
assignment shall apply only with respect to the operations of the
assigning party which have been acquired by the assignee. The
assigning party shall be relieved from and have no further liability
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<PAGE>
for the obligations of the assignee following an assignment if (a)
the other party to this Agreement determines in good faith that the
assignee is capable, financially and otherwise, of performing the
assigning party's obligations hereunder and (b) the assignee has
accepted the assignment in writing.
35. SEVERABILITY: If a court or a governmental or regulatory agency with
proper jurisdiction determines that any provision of this Agreement is
illegal, unenforceable or void, then the parties shall negotiate in good
faith to agree upon a substitute provision that is legal and enforceable
and is as nearly as possible consistent with the intentions underlying the
original provision. If the remainder of this Agreement is not materially
affected by such declaration or finding and is capable of substantial
performance, then the remainder shall be enforced to the extent permitted
by law.
36. WAIVER: Either party's failure to insist on performance of any of the
terms or conditions herein or to exercise any right or privilege, or either
party's waiver of any breach hereunder shall not be construed to be a
waiver, or waive any other terms, conditions, or privileges, whether of the
same or similar type.
37. AMENDMENTS: No change or modification of any terms or conditions herein
shall be valid or binding on either party unless made in writing and signed
by an authorized representative of MetaSolv and TWC.
38. GOVERNING LAW: The laws of the State of Colorado shall govern the
construction and interpretation of this Agreement without regard to the
conflicts of law rules of such State.
39. HEADINGS: The headings of Articles, Sections and paragraphs in this
Agreement are for convenience only and shall not be construed to define or
limit any of the terms or affect the meaning or interpretation of this
Agreement.
40. ENGLISH LANGUAGE: All documentation, notices, records, reports and
correspondence under this Agreement shall be submitted and maintained in
the English language.
41. SURVIVAL: Sections 8.2, and 8.3, and Articles 5, 6, 9 through 13, 16
through 19, 21 through 27, 29, 32 through 42, and 44 through 45 shall
survive the completion, expiration, termination or cancellation of this
Agreement or any part hereof.
42. ORDER OF PRECEDENCE DOCUMENTS: Unless a term or provision is specifically
superseded by a document that later becomes a part of this Agreement, if
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there is an inconsistency or conflict in the terms or provisions contained
in this Agreement, then the terms and provisions of the following documents
shall control in the following order of precedence: a subsequent Statement
of Work, the Original Statement of Work, the Documentation (as such term is
defined in the Software License Agreement), a Schedule, this Agreement, and
an Order. For purposes of applying this Article, a conflict shall be
deemed to exist between documents only if more than one of the documents
specified herein reference an express, specific requirement or include a
specific term and the references or terms are mutually inconsistent.
Omission of a requirement or term from a higher level document shall not be
deemed to create a conflict with a lower level document unless the omission
is specifically noted in the higher level document (e.g., by the inclusion
of a statement in the higher level document that a certain feature or
function referenced in a lower level document will not be provided).
43. REFERENCE ACCOUNT. TWC agrees, during the term of this Agreement, to act
as a reference account for MetaSolv. This may include, to a reasonable
extent, hosting of visits from and meetings with prospective MetaSolv
Software licensees, telephone conferences, demonstration of Customer's
MetaSolv Software installation, and cooperation in other marketing
activities relating to MetaSolv Software. Such activities shall be only at
reasonable times and on reasonable notice to TWC, and always with
reasonable cooperation and coordination between the parties. TWC shall be
entitled to require any party referenced by MetaSolv to execute a
confidentiality agreement in a usual and customary form, and TWC shall not
be required to divulge any information which provides a competitive
advantage to TWC.
44. ENTIRE AGREEMENT: This Agreement, together with all Schedules, Order(s),
Statements of Work, exhibits and attachments hereto shall constitute the
entire agreement between the parties with respect to the subject matter of
this Agreement. This Agreement supersedes all prior oral and written
communications, agreements and understandings of the parties with respect
to the subject of this Agreement, including, without limitation, Letter of
Intent #MET9701 between the parties dated November 26, 1997.
45. TIME IS OF ESSENCE: Time of performance is of the essence in this
Agreement and a substantial and material term hereof.
46. SCHEDULES: The following is a list of Schedules attached to this
Agreement:
Schedule No. 1 - Software License Agreement
Schedule No. 2 - Software Development Agreement
Schedule No. 3 - Software Support and Maintenance Agreement
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47. EXHIBITS: The following is a list of Exhibits attached to this Agreement:
Exhibit A - Designated Representatives
Exhibit B - Invoice Format
The parties intending to be legally bound have caused this Agreement to be
executed by their duly authorized representatives.
Time Warner Communications MetaSolv Software, Inc.
Holdings, Inc.
/s/ Stephen A. McPhie /s/ Michael J. Watters
- ----------------------------------- -----------------------------------
(Authorized Signature) (Authorized Signature)
Stephen A. McPhie Michael J. Watters
- ----------------------------------- -----------------------------------
(Print or Type Name of Signatory) (Print or Type Name of Signatory)
President Chief Executive Officer
- ----------------------------------- -----------------------------------
(Title) (Title)
May 7, 1998 May 15, 1998
- ----------------------------------- -----------------------------------
(Execution Date) (Execution Date)
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<PAGE>
EXHIBIT A
TO
MASTER LICENSE, DEVELOPMENT AND SERVICE AGREEMENT
-------------------------------------------------
Designated Representatives
--------------------------
TWC (303-566-1000 - general number)
- ---
Bob Gaskins - Vice President & Project Manager
Ray Whinery - Senior Vice President
Graham Powers - Senior Vice President
MetaSolv (972-403-8300 - general number)
- --------
Jon Hustis - General Counsel
Mike Watters - CEO
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<PAGE>
EXHIBIT B
TO
MASTER LICENSE, DEVELOPMENT AND SERVICE AGREEMENT
-------------------------------------------------
Invoice Format
--------------
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<PAGE>
SCHEDULE NO. 1
TO MASTER LICENSE, DEVELOPMENT AND SERVICE AGREEMENT
This Schedule No. 1 is attached to and made a part of that certain Master
License, Development and Service Agreement dated May 7, 1998 ("Master
Agreement"), by and between Time Warner Communications Holdings, Inc. and
MetaSolv Software, Inc.
SOFTWARE LICENSE AGREEMENT
--------------------------
This Software License Agreement ("Agreement") is entered into on May 7, 1998, by
and between Time Warner Communications Holdings, Inc. ("TWC") and MetaSolv
Software, Inc. ("MetaSolv").
In consideration of the mutual promises, covenants and agreements contained
herein, the receipt and sufficiency of which are hereby acknowledged, TWC and
MetaSolv agree as follows:
1. CERTAIN DEFINITIONS: The terms defined in this Article shall have the
meanings set forth below whenever they appear in this Schedule, unless (a)
the context in which they are used clearly requires a different meaning; or
(b) a different definition is described for a particular Article or
provision. Capitalized terms used, but not defined, in this Schedule shall
have the meanings assigned to them in the Master Agreement.
1.1. "Acceptance" (or "Accept" or "Accepted") means any one of the
following: (1) TWC's written certification that the Licensed
Materials or a specific portion of them conform in all material
respects to the requirements of this Schedule (including the
Software Requirements), which certification further states that TWC
has accepted such Licensed Materials for purposes of this Schedule;
(2) TWC's failure to provide a written rejection of the Licensed
Materials or a specific portion of them during the Acceptance Period
in accordance with Article 3 of this Schedule; or (3) TWC's
production use of the Licensed Materials or a specific portion of
them beyond the Acceptance Period and more than ten days after
receipt of a written notice from MetaSolv that states that such
continuing production use will be deemed to constitute "Acceptance"
for purposes of this Schedule.
1.2. "Acceptance Criteria" means that (a) there remain open no Critical
or High severity level Incidents reported during the Acceptance
Period, and (b) that Medium or Low severity level Incidents
remaining open, if any, from such Acceptance Period, are not so
numerous that the Software is not practically usable for production
purposes. Such severity level Incidents are defined in the Software
Support and Maintenance Agreement.
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1.3. "Acceptance Date" means the date that TWC Accepts the Licensed
Materials or a specific portion of them.
1.4. "Acceptance Period" means that period described in Section 3.1 of
this Schedule.
1.5. "Designated Operating Environment" means the hardware, third party
software, peripherals and other equipment which have been approved by
MetaSolv for use with the Software. The initial Designated Operating
Environment shall be as described in the Original Statement of Work.
TWC may, from time to time, propose additions, deletions or
modifications to the Designated Operating Environment. MetaSolv shall
consider such proposals in good faith and shall not unreasonably
withhold its consent to any such proposal.
1.6. "Escrow" means a secured environment which is provided by an escrow
agent pursuant to an Escrow Agreement substantially in the form
attached hereto as Exhibit C.
---------
1.7. "Implementation Plan" means that portion of the Original Statement of
Work setting forth the schedule of activities, implementation
schedule, and other requirements relating to the Services, as such
Original Statement of Work may be amended from time to time in
accordance with the Master Agreement.
1.8. "Incident" means a reproducible failure of the Software to conform to
the Software Requirements. Incidents can occur as a result of errors
or failures in the Software or the User Manuals and Information.
1.9. "Licensed Materials" means the Software and the User Manuals and
Information.
1.10. "Named User" means an individual who is authorized by TWC or its
Affiliates to use the Licensed Materials under this Schedule. TWC or
its Affiliates may replace a Named User with another from time to
time, without thereby increasing the then current base of Named Users
using the Licensed Materials, for example in the event of (a) the
termination or resignation of such Named User, or (b) the transfer of
the Named User to another department or geographic location, or (c)
some other modification in such Named User's employment
circumstances; provided, though, that this stated permission to
replace individual Named Users from time to time does not create a
"concurrent license" structure or its equivalent.
1.11. [*]
1.12. "Software" means (a) the software program(s) described in Exhibit A
or any Order to this Schedule, (b) any software program(s) developed
by MetaSolv, after
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* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
they have been finally Accepted by TWC, under the Software
Development Agreement, and (c) any software programs provided as
Updates pursuant to the Software Support and Maintenance Agreement.
1.13. "Software Development Agreement" means an agreement, the terms and
conditions under which MetaSolv shall develop custom software for
TWC, substantially in the form attached to the Master Agreement as
Schedule No. 2, as such agreement is amended from time to time.
1.14. "Software Requirements" means the MetaSolv Telecom Business Solution
(TBS) Software documentation describing the functional, performance,
compatibility, operational and technical criteria or other
requirements for the Software, including those described in Exhibit A
hereto. MetaSolv agrees that it will not use its ability to make
changes in the Software Requirements so as to materially,
detrimentally affect the functionality of the Software for TWC.
1.15. "Software Support and Maintenance Agreement" means an agreement, the
terms and conditions under which MetaSolv provides TWC support and
maintenance services, substantially in the form attached to the
Master Agreement as Schedule No. 3, as such agreement is amended from
time to time.
1.16. "Source Code" means (i) a human-readable copy of the source code from
which the Software is compiled or otherwise derived; (ii) a machine-
readable copy of the source code in the appropriate computer language
and storage media; and (iii) a copy of any and all other human-
readable documentation or machine-readable code that is necessary to
enable a data processing professional having ordinary skills and
experience in computer programming to understand, maintain and modify
the Software and compile or otherwise derive the Software from the
source materials.
1.17. "User Manuals and Information" means the specifications, user and
operating manuals, guides, training materials and other documentation
generally provided by MetaSolv to its customers with the Software
licensed under this Schedule. User Manuals and Information may be
presented as on-line manuals and documentation or hard copy paper
manuals and documentation. An initial version of the User Manuals and
Information for TBS Software Version 3.0 have been provided to TWC by
MetaSolv prior to the signing of this Schedule in the form of a CD-
ROM version of documentation for TBS Software Version 3.0.
2. LICENSED MATERIALS LICENSE:
2.1. Grant of License, and Restrictions. MetaSolv hereby grants to TWC
and its Affiliates a nonexclusive, perpetual and fully-paid license
to use Licensed Materials in the United States and Canada, solely for
their own internal data processing operations in connection with
their respective businesses, up to any
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applicable maximum number of Named Users, or other limitation
specified on the Order, plus a reasonable number of copies to support
TWC's normal archival, disaster recovery and data recovery
procedures. Except as otherwise provided in the Master Agreement, TWC
and its Affiliates shall have no right to assign, sublicense or
transfer the Licensed Materials. TWC and its Affiliates may not use
the Software for third-party training, commercial timesharing, rental
or service bureau use. Except as otherwise specifically authorized by
this Schedule: TWC and its Affiliates shall not copy, modify,
sublicense, distribute, transfer, reverse engineer or reverse compile
the Software, nor shall TWC or its Affiliates prepare derivative
works incorporating the Software. Neither TWC, its Affiliates nor
their personnel having had access to the Software or documentation
may use it to design software with similar or competitive
functionality for distribution to third parties, nor to distribute or
deliver educational courses or materials based on the Software or
documentation to persons other than to TWC, its Affiliates, or their
contractors, and then only for the purpose of providing Software-
related services to TWC and its Affiliates. Title and ownership
rights to Licensed Materials, in their original form and any modified
version, shall remain with MetaSolv and its applicable licensors,
provided that where modification of any Licensed Materials is
expressly permitted by this Schedule or by written communication from
MetaSolv, title and ownership rights to non-MetaSolv material that
TWC or its Affiliates incorporate into a modified or derivative
version of the Licensed Materials shall remain with TWC and its
Affiliates, or their third-party licensor. This paragraph does not
authorize modification of the Licensed Materials. TWC shall have the
right to reproduce the Licensed Materials for internal use, subject
to the restrictions on use and disclosure set forth in this Schedule
and in the Master Agreement.
2.2. Software Installation. MetaSolv shall install the Software on the
Designated Operating Environment in accordance with the
Implementation Plan or the applicable Order, if installation is
required by their terms. Upon such installation, MetaSolv warrants
that the Software will function in the Designated Operating
Environment in accordance with the Software Requirements.
2.3. User Manuals and Information. Immediately upon the execution of this
Schedule and an applicable Order for Software, MetaSolv shall supply
to TWC a copy of the User Manuals and Information sufficient to allow
a user qualified in the subject matter of the application to use the
Software. MetaSolv hereby grants to TWC a license to copy the User
Manuals and Information for TWC's internal use, subject to the Named
User restrictions for the applicable Software. Such copies shall
retain MetaSolv's copyright notices and markings indicating their
proprietary nature. TWC may modify, correct or enhance the User
Manuals and Information in any manner, and all proprietary rights
including copyrights to non-MetaSolv material that TWC or its
Affiliates incorporate into such a modified or derivative version of
the Licensed Materials shall remain exclusively with TWC and its
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<PAGE>
Affiliates, or their third-party licensor to the extent that the
modifications do not embody any material proprietary to MetaSolv.
MetaSolv shall not in any way be responsible to TWC for any losses,
damages, claims or liabilities of TWC or its Affiliates arising in
connection with such modifications, corrections or enhancements.
2.4. Training. MetaSolv shall provide training, including, without
limitation, train the trainer programs, with respect to use of the
Software, on the terms set forth in any Statement of Work or
applicable Order.
2.5. Support and Maintenance. During any applicable Warranty Period and
at any time thereafter, for so long as (a) TWC's license for the
Software remains in effect, (b) TWC has kept current its purchases of
maintenance support for the Software, and (c) MetaSolv
provides maintenance support services for the Software to its end-
users generally, TWC may purchase maintenance support services under
the Software Support and Maintenance Agreement. MetaSolv shall
provide TWC with written notice if at any time MetaSolv wishes to
generally discontinue providing standard maintenance support services
for the Software to its customers. Upon written request from TWC,
which request must be made within 90 days following the receipt of
MetaSolv's notice of proposed discontinuance, MetaSolv will continue
to provide standard maintenance support to TWC for the period
specified by TWC in its request, not to exceed two years from the end
of the maintenance support term then in effect. A general
discontinuance of standard maintenance support does not include
MetaSolv's cessation of support for a particular release or version
of the Software, if MetaSolv continues to provide standard
maintenance support for a subsequent release or version of the
Software running on a then generally accepted version or release of
substantially the same hardware, operating system and database
platform components.
2.6. Bankruptcy. If a Trustee or MetaSolv as a debtor-in-possession in an
action under the United States Bankruptcy Code rejects or attempts to
reject this Schedule or any license granted hereunder, TWC may elect
to retain its rights under this Schedule, in accordance with the
Bankruptcy Code, and, in such event, TWC shall be entitled to retain
and use one or more copies of the Licensed Materials to the extent
permitted under this Schedule, including, without limitation,
computer software and utilities in both source and object code form,
documentation and associated peripheral information. Failure by TWC
to assert its rights or to retain its benefits to the Licensed
Materials pursuant to the Bankruptcy Code under an executory contract
rejected by a Trustee or MetaSolv as a debtor-in-possession shall not
be construed as a termination of this Schedule by TWC under the
Bankruptcy Code.
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2.7. Source Code License. MetaSolv shall offer TWC the option, for all
MetaSolv Software products licensed under this Schedule, provided
that TWC has then continued to purchase and pay for maintenance
support under the Software Support and Maintenance Agreement, at any
time to convert the object code licenses granted in Section 2.1 to a
Source Code license upon payment by TWC of an amount equal to [*] of
the license and development fees paid by TWC under this Schedule and
the Software Development Agreement for all of the Licensed Materials.
If TWC has previously exercised the Source Code option under this
Section 2.7 and MetaSolv thereafter delivered additional Licensed
Materials pursuant to the Software Development Agreement for which
TWC wishes to acquire a Source Code license, the purchase price shall
be [*] of the license and development fees paid by TWC under the
Software Development Agreement for such additional Software. TWC
shall be entitled to exercise such option upon written notice to
MetaSolv at any time during which MetaSolv is required to maintain a
Source Code escrow arrangement under this Schedule. Upon exercise of
this option, TWC shall be entitled to use the Source Code to use,
display, perform, copy, modify, have modified, improve, prepare
derivative works of, maintain and support the Software, in the United
States and Canada, solely for the internal data processing operations
of TWC and its Affiliates, in connection with their respective
businesses. Except as stated in the preceding sentence, the license
to use Source Code shall be subject to the limitations and
restrictions applicable to the object code under this Schedule and
the Order. Nothwithstanding anything to the contrary, this Section
2.7 shall not apply to any Software which MetaSolv has identified in
writing as being owned by or licensed from a third party which is not
an affiliate of MetaSolv. MetaSolv shall notify TWC in writing of any
Software subject to the exclusion in the preceding sentence, either
prior to or within 30 days after delivery of the object code subject
to such exclusion.
2.8. Termination by MetaSolv. Notwithstanding anything in the Master
Agreement or any Schedule thereto to the contrary, MetaSolv shall
only be entitled to terminate the license granted in this Article
following (a) a material breach by TWC of a restriction upon use of
the Licensed Materials as set forth in Section 2.1, (b) a material
breach by TWC under Article 21 of the Master Agreement relating to
the Licensed Materials, or (c) a failure by TWC to make a payment
when due under Article 4 of this Schedule, provided that any such
breach as described in clauses (a), (b) and (c) herein is not cured
within 30 days after written notice thereof from MetaSolv, which
notice shall describe the breach in reasonable detail and shall
specifically state that MetaSolv may terminate the license pursuant
to this Section, and provided further that a termination pursuant to
clause (c) herein shall only apply with respect to that portion of
the license for which payment has not been made, or (d) a cessation
of the license under Section 6.2 or 23.3 of the Master Agreement.
Page 6
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
2.9. Disposition of Software Upon Termination. Upon termination of the
license granted under this Article TWC and its Affiliates shall
destroy all copies of the Licensed Materials for which the license
has been terminated, and TWC shall certify such destruction by
written notice to MetaSolv within fifteen days of such termination.
3. ACCEPTANCE:
3.1. Acceptance Period; Access for Testing. Except as otherwise provided
herein, the Acceptance Period for Software provided pursuant to this
Schedule shall begin on the date that MetaSolv notifies TWC in
writing that the Software has been installed and is ready for use by
TWC and shall end 30 days later or upon earlier Acceptance by TWC.
Notwithstanding the foregoing, there shall be no Acceptance Period
for additional Named User licenses which have been ordered after TWC
has Accepted the underlying Software to which such additional Named
User licenses relate, and such additional Named User licenses shall
be deemed to be Accepted once the Software has been modified, if
necessary, to permit its use by the additional Named Users. The
Acceptance Period and Acceptance processes described in this Schedule
shall not apply to Developments that become Software by Acceptance
under the Software Development Agreement; instead, for such
Developments, the Acceptance processes described in the Software
Development Agreement shall apply. The Acceptance Period and
Acceptance processes described in this Schedule shall not apply to
Updates that become Software under the Software Support and
Maintenance Agreement; instead, for such Updates, the processes
described in the Software Support and Maintenance Agreement shall
apply.
3.2. Non-Acceptance; Retesting. If TWC reasonably determines during the
Acceptance Period that the Software (or its installation) or the User
Manuals and Information do not conform in all material respects to
the Acceptance Criteria, then TWC shall promptly notify MetaSolv in
writing of its rejection of the Software (or, in the sole discretion
of TWC, the nonconforming portion thereof), and shall specify in
reasonable detail such nonconformity. MetaSolv shall have a period of
30 days from the date of the notice (the Correction Period) in which
to correct the identified nonconformities, or to establish that the
Software does conform to the Acceptance Criteria. TWC will have an
additional acceptance period of 30 days (the Extended Acceptance
Period) to determine whether the Software (or its installation) or
the User Manuals and Information, as corrected by MetaSolv, conforms
to the Acceptance Criteria. The Extended Acceptance Period shall
begin on the date that MetaSolv delivers to TWC written notice that
the nonconformities have been corrected or that there were no
noncomformities, and, if necessary, that the corrected Software has
been delivered (or if installation is included in the Order, then
reinstalled) and is ready for use and shall end 30 days later or upon
earlier Acceptance by TWC. If the Software (or its reinstallation) or
Page 7
<PAGE>
the User Manuals and Information still do not conform in all material
respects to the Acceptance Criteria, TWC may, at its option, either
(a) again reject the Software (or, in the sole discretion of TWC, the
nonconforming portion thereof) and terminate the applicable Order
and/or license, (b) reject the Software (or, in the sole discretion
of TWC, the nonconforming portion thereof) and provide MetaSolv a
further written notice of the nonconformities and an additional
opportunity to correct such nonconformities in the manner provided
above, or (c) Accept the Software despite the nonconformities, and
provide MetaSolv with further written notice of such nonconformities,
requiring MetaSolv's correction of such nonconformities in accordance
with the warranty and support requirements of this Schedule and the
Software Maintenance and Support Agreement. Termination of an Order
or license or portion thereof under this Section shall be effected by
TWC giving written notice to MetaSolv of such termination. If TWC
Accepts some portion of the Software and rejects another portion of
the Software in accordance with this Section, TWC shall be entitled
to retain and use that portion of the Software which TWC has
Accepted, together with any related User Manuals and Information, in
accordance with the rights and obligations granted in this Schedule.
TWC may not in any event reject the Software after it has Accepted
the Software.
3.3. TWC's Rights Upon Termination After Non-Acceptance. Upon TWC's
termination of an Order or applicable license or portion thereof
pursuant to this Article, MetaSolv shall return to TWC all license
fee payments made to MetaSolv with respect to the applicable Order or
license under this Schedule within twenty days following TWC's
termination notice.
4. LICENSED MATERIALS LICENSE FEE:
4.1. License Fees. In consideration of the Licensed Materials license
granted herein, TWC shall pay to MetaSolv licensee fees as stated in
Exhibit A of this Schedule, and in any subsequent Order for Software
licenses.
4.2. Increases in TWC users. TWC and its Affiliates may add additional
Named Users to use the Software, in excess of any Named User
limitations applicable under the applicable Order and this Schedule,
by the execution of an Order for the additional Named Users, and
payment of the additional license fees set forth in Exhibit A, or if
none are stated Exhibit A, then such license fees as it may negotiate
with MetaSolv, but not more than MetaSolv's then current list price
license fees applicable to such incremental purchase of Named User
licenses. [*] Metasolv shall be entitled to increase such license
fees only one time during any calendar year by providing 60 days'
prior written notice to TWC of such increase.
Page 8
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
4.3. Payment. Payment of the license fees shall be as set forth in
Exhibit A of this Schedule, or as stated in the applicable Order.
4.4. Verification. At MetaSolv's written request, not more frequently
than annually, TWC shall furnish MetaSolv with a signed certification
within 10 days, verifying that the Software is being used pursuant to
the provisions of this Schedule, including any Named User and other
limitations, and listing the Named Users authorized to use the
Software during the preceding year, and the locations, generic types
of the systems on which the Software has been run during that period.
MetaSolv may, at its expense, through its third party certified
public accounting firm, audit TWC's and its Affiliates' use of the
Software. Any such audit shall be conducted during regular business
hours at TWC's and its Affiliate's facilities and shall not
unreasonably interfere with their business activities. If an audit
reveals that TWC has underpaid fees to MetaSolv, TWC shall be
invoiced for such underpaid fees based on the current list price in
effect at the time the audit is completed. Audits shall be conducted
not more than once annually.
5. ESCROW: MetaSolv has placed a copy of the entire Source Code for the
Software, together with all related listings and documentation in Escrow
pursuant to the Escrow Agreement. Immediately upon execution of this
Schedule, MetaSolv shall notify the Escrow Agent that the TWC is entitled
to contract with the Escrow agent for the rights of a licensee under the
Escrow Agreement. MetaSolv and TWC each agree to pay one-half of all costs,
fees and expenses required to be paid by a licensee under the Escrow
Agreement as provided therein. MetaSolv shall place a copy of the entire
Source Code for any updates to or new versions of the Software in Escrow in
accordance with the Escrow Agreement and this Article as such updates or
new versions become available.
6. WARRANTIES:
6.1. Licensed Materials. MetaSolv warrants that during the Warranty
Period and any period in which TWC is entitled to receive software
support and maintenance services under the Software Support and
Maintenance Agreement, the Licensed Materials then covered under the
Software Support and Maintenance Agreement shall perform the
functions described in the Software Requirements, and shall be free
from defects in workmanship or material, if properly used in
accordance with the Software Requirements instructions and
specifications. During such period, if the warranty is breached,
MetaSolv shall take action to repair or replace defective Licensed
Materials, in accordance with its obligations under the Software
Support and Maintenance Agreement. For any breach of a warranty
stated in this Section, TWC shall promptly notify MetaSolv in writing
of the defect during the Warranty Period, and provide documentation
and examples to enable MetaSolv to reproduce the alleged defect. This
warranty shall not be voided by TWC's modification of the Software or
combination of the Software with other software
Page 9
<PAGE>
or equipment outside of the Designated Operating Environment so long
as MetaSolv can reasonably discharge its warranty obligations either
(a) without a material increase in time or cost caused by such
modifications or, (b) following their removal by TWC. This warranty
shall not apply with respect to modifications made to the Software by
TWC, including but not limited to those following TWC's exercise of
its right to acquire a Source Code license to the Software, except as
specifically agreed by MetaSolv in writing.
6.2. Software Traps. MetaSolv warrants that to the best of its knowledge,
at the time of delivery, no portion of the Software as delivered
shall contain any software "Virus", as defined herein. For the
purposes of this Schedule, "Virus" shall mean a set of computer
instructions which are self-replicating or self-propagating and are
designed to contaminate the Software, to consume computer resources
without regard to the performance of an intended function or modify,
destroy, record or transmit data or programming without the intent or
permission of the user. MetaSolv further warrants that prior to the
delivery of any Software to TWC or its Affiliates, MetaSolv will use
reasonable efforts to detect and screen out any Virus through the use
of the current version of one or more virus detection programs.
MetaSolv further warrants that, at the time of delivery, no portion
of the Software as delivered shall contain any "Disabling Device", as
defined herein. For the purposes of this Schedule, "Disabling Device"
shall mean any software routines or hardware components designed by
MetaSolv or a third party Software vendor to permit unauthorized
access, to disable or erase software, hardware or data, or to perform
any other such actions which will have the effect of materially
impeding the normal and expected operation of the Software.
6.3. Year 2000 Compliant. MetaSolv warrants that the Software shall
include calendar year 2000 date conversion and compatibility
capabilities, including date data century recognition, same century
and multiple century formula and date value calculations and user
interface date data values that reflect the century. Specifically,
the Software will (a) manage and manipulate data involving dates,
including single century and multiple century dates and such
operations will not cause an abort or result in the generation of
incorrect values or invalid output due to the involvement of such
dates, and (b) include the indication of the correct century in all
date related user interface functionalities. MetaSolv further
represents and warrants that the Software will correctly recognize
and process the date of February 29, and any related data, during
leap years. Notwithstanding anything in the Master Agreement or any
Schedule thereto to the contrary, the warranty made in this Section
shall extend until December 31, 2001.
6.4. Ownership; Authority. MetaSolv warrants that it has full power and
authority to grant the licenses and the rights granted under this
Schedule to TWC with respect to the Licensed Materials without the
consent of any other person or entity. Neither the license to and use
by the TWC of the Licensed Materials (including
Page 10
<PAGE>
the copying thereof) nor the performance of any Services by MetaSolv
will in any way constitute an infringement or other violation of any
IP Rights or other rights of any third party.
6.5. MetaSolv shall, at no expense to TWC, correct any failure to fulfill
any of the above warranties, provided that it is given notice of such
failure within the applicable warranty period. For any warranty claim
under this Article, TWC's remedies shall be those set forth herein
and in the Master Agreement and the Software Support and Maintenance
Agreement and shall be subject to the applicable limitations set
forth therein. In addition, during the term of the Software Support
and Maintenance Agreement, MetaSolv shall provide TWC the services
set forth therein.
7. SURVIVAL: Sections 3.3 and 4.4 shall survive the completion, expiration,
termination or cancellation of this Schedule.
8. ENTIRE AGREEMENT: This Schedule, together with the Master Agreement and
all Orders, Statements of Work, exhibits and attachments hereto shall
constitute the entire agreement between the parties with respect to the
subject matter of this Schedule.
9. EXHIBITS: The following is a list of Exhibits and Statements of Work
attached to this Schedule:
Exhibit A - Initial Software Order and Terms
Exhibit B - Form of Escrow Agreement
Page 11
<PAGE>
The parties intending to be legally bound have caused this Agreement to be
executed by their duly authorized representatives.
Time Warner Communications MetaSolv Software, Inc.
Holdings, Inc.
/s/ Stephen A. McPhie /s/ Michael J. Watters
- --------------------------------- --------------------------------------
(Authorized Signature) (Authorized Signature)
Stephen A. McPhie Michael J. Watters
- --------------------------------- -------------------------------------
(Print or Type Name of Signatory) (Print or Type Name of Signatory)
President Chief Executive Officer
- --------------------------------- -------------------------------------
(Title) (Title)
May 7, 1998 May 15, 1998
- --------------------------------- -------------------------------------
(Execution Date) (Execution Date)
Page 12
<PAGE>
EXHIBIT A
TO
SOFTWARE LICENSE AGREEMENT
--------------------------
Initial Software Order and Terms
1. Order. TWC hereby orders, pursuant to the terms of the Schedule to which
this Exhibit A is attached, the MetaSolv TBS Software Version 3.0 Licensed
Materials and associated Named User licenses described in this Exhibit A.
An initial version of the User Manuals and Information for TBS Software
Version 3.0 have been provided to TWC by MetaSolv prior to the signing of
this Schedule in the form of a CD-ROM version of documentation for TBS
Software Version 3.0.
2. Requested Delivery Date. TWC requests immediate delivery upon execution of
this Schedule.
3. License Price. The license price for TBS Software v.3.0 Licensed Materials
and Named User licenses described in this Exhibit A is [*]
4. Payment Terms. Payment terms for the total price of [*] for Licensed
Materials and Named User licenses described in this Exhibit A are as
follows:
[*]
Notwithstanding that the license payments under this Exhibit A are for
Version 3.0 of TBS Software and Named User licenses to be delivered under
this Exhibit A, and not for the Deliverables described in the Software
Development Agreement, the payments due at the time of Acceptance of the
Final Report shall be subject to the terms provided for "Holdback Amounts"
under the Software Development Agreement.
5. Standard Maintenance Support. MetaSolv shall provide software maintenance
and support for the Licensed Materials described in this Exhibit A during
the Warranty Period as described in Section 10.9 of the Master Agreement,
and thereafter in accordance with the terms, conditions and fees described
in the Software Maintenance and Support Agreement. Notwithstanding anything
to the contrary in the Master Agreement or this Exhibit, the initial period
of standard maintenance support (i.e., the Warranty Period) for the TBS
v.3.0 Licensed Materials delivered under this Exhibit shall end upon [*]
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
6. Named Users. The Licensed Materials are licensed under this Exhibit A to
[ * ] Named Users. Named User licenses are also applicable to the use of
Developments under the Software Development Agreement, when those
Developments are included as Licensed Materials under this Schedule, in
accordance with the terms of the Software Development Agreement.
7. Pricing for Additional Named User Licenses. MetaSolv agrees that TWC may
purchase additional Named User licenses for the Licensed Materials at the
following prices:
Number of Named Users Price Per Named User
[ * ] [ * ]
Pricing shall remain in effect through [ * ] Thereafter, MetaSolv may
increase such license fees each calendar year [ * ]
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
8. Included Product Components. MetaSolv TBS Product v.3.0 components included
under this Exhibit A are as follows:
- ------------------------------------------------------
MetaSolv Software Inc.
TBS(TM) v.3.0 Product Line
Product
Order Management Subsystem
Internal Service Request Module
Service Provisioning Subsystem
Network Design Subsystem
Equipment Administration Module
Basic Network Design Module
Work Management Subsystem
Data Management Subsystem
Trouble Management Subsystem
ASR Module
USO Module
PSR Module
Customer Management Module
Product Catalog Module
Plant Administration Module
Telephone Number Administration
Module
SONET Network Design Module
ASR/ISI Gateway
OSI/NetExpert Transport Gateway
OSI/NetExpert Switch Gateway
Location and Routing Gateway
Network Inventory Tool
Background Processor
- ------------------------------------------------------
<PAGE>
EXHIBIT B
TO
SOFTWARE LICENSE AGREEMENT
--------------------------
Form of Escrow Agreement
------------------------
The software escrow agreement executed by MetaSolv with Data Securities
International shall serve as the Escrow Agreement applicable to this Master
Agreement, and TWC may contract directly with Data Securities International to
participate as an escrow beneficiary under the terms of such Escrow Agreement.
<PAGE>
MASTER PREFERRED ESCROW AGREEMENT
Master Number 1305125-00001
-------------
This Agreement is effective February 4, 1997 among Data Securities
International, Inc. ("DSI"), MetaSolv Software, Inc. ("Depositor") and any party
signing the Acceptance Form attached to this Agreement ("Preferred
Beneficiary"), who collectively may be referred to in this Agreement as "the
parties."
A. Depositor and Preferred Beneficiary have entered or will enter into a
license agreement, development agreement, and/or other agreement regarding
certain proprietary technology of Depositor (referred to in this Agreement as
"the license agreement").
B. Depositor desires to avoid disclosure of its proprietary technology except
under certain limited circumstances.
C. Preferred Beneficiary has determined that it needs access to the
proprietary technology under certain limited circumstances.
D. Depositor and Preferred Beneficiary desire to establish an escrow with DSI
to provide for the retention, administration and controlled access of certain
proprietary technology materials of Depositor.
E. The parties desire this Agreement to be supplementary to the license
agreement pursuant to 11 United States [Bankruptcy] Code, Section 365(n).
ARTICLE 1 -- DEPOSITS
1.1 Obligation to Make Deposit. Upon the signing of this Agreement by the
--------------------------
parties, including the signing of the Acceptance Form, Depositor shall deliver
to DSI the proprietary information and other materials ("deposit materials")
identified on Exhibit A. Exhibit A is to be prepared and signed by Depositor and
Preferred Beneficiary. DSI shall have no obligation with respect to the
preparation, signing or delivery of Exhibit A.
1.2 Identification of Tangible Media. Prior to the delivery of the deposit
--------------------------------
materials to DSI, Depositor shall conspicuously label for identification each
document, magnetic tape, disk, or other tangible media upon which the deposit
materials are written or stored. Additionally, Depositor shall complete Exhibit
B to this Agreement by listing each such tangible media by the item label
description, the type of media and the quantity. The Exhibit B must be signed by
Depositor and delivered to DSI with the deposit materials. Unless and until
Depositor makes the initial deposit with DSI, DSI shall have no obligation with
respect to this Agreement, except the obligation to notify the parties regarding
the status of the deposit account as required in Section 2.2 below.
1.3 Deposit Inspection. When DSI receives the deposit materials and the Exhibit
------------------
B, DSI will conduct a deposit inspection by visually matching the labeling of
the tangible media containing the deposit materials to the item descriptions and
quantity listed on the Exhibit B. In addition to
<PAGE>
the deposit inspection, Preferred Beneficiary may elect to cause a verification
of the deposit materials in accordance with Section 1.6 below.
1.4 Acceptance of Deposit. At completion of the deposit inspection, if DSI
---------------------
determines that the labeling of the tangible media matches the item descriptions
and quantity on Exhibit B, DSI will date and sign the Exhibit B and mail a copy
thereof to Depositor and Preferred Beneficiary. If DSI determines that the
labeling does not match the item descriptions or quantity on the Exhibit B, DSI
will (a) note the discrepancies in writing on the Exhibit B; (b) date and sign
the Exhibit B with the exceptions noted; and (c) provide a copy of the Exhibit B
to Depositor and Preferred Beneficiary. DSI's acceptance of the deposit occurs
upon the signing of the Exhibit B by DSI. Delivery of the signed Exhibit B to
Preferred Beneficiary is Preferred Beneficiary's notice that the deposit
materials have been received and accepted by DSI.
1.5 Depositor's Representations. Depositor represents as follows:
---------------------------
a. Depositor lawfully possesses all of the deposit materials deposited
with DSI;
b. With respect to all of the deposit materials, Depositor has the right
and authority to grant to DSI and Preferred Beneficiary the rights as
provided in this Agreement;
c. The deposit materials are not subject to any lien or other encumbrance
that would interfere with the performance of this Agreement; and
d. The deposit materials consist of the proprietary information and other
materials identified in Exhibit A.
1.6 Verification. Preferred Beneficiary shall have the right, at Preferred
------------
Beneficiary's expense, to cause a verification of any deposit materials. A
verification determines, in different levels of detail, the accuracy,
completeness, sufficiency and quality of the deposit materials. If a
verification is elected after the deposit materials have been delivered to DSI,
then only DSI, or at DSI or Preferred Beneficiary's election an independent
person or company selected by the party so electing and supervised by DSI, may
perform the verification.
1.7 Deposit Updates. Unless otherwise provided by the license agreement,
---------------
Depositor shall update the deposit materials within 60 days of each release of a
new version of the product which is subject to the license agreement. Such
updates will be added to the existing deposit. All deposit updates shall be
listed on a new Exhibit B and the new Exhibit B shall be signed by Depositor.
Each Exhibit B will be held and maintained separately within the escrow account.
An independent record will be created which will document the activity for each
Exhibit B. The processing of all deposit updates shall be in accordance with
Sections 1.2 through 1.6 above. All references in this Agreement to the deposit
materials shall include the initial deposit materials and any updates.
1.8 Removal of Deposit Materials. The deposit materials may be removed and/or
----------------------------
exchanged only on written instructions signed by Depositor and Preferred
Beneficiary, or as otherwise provided in this Agreement.
2
<PAGE>
ARTICLE 2 -- CONFIDENTIALITY AND RECORD KEEPING
2.1 Confidentiality. DSI shall maintain the deposit materials in a secure,
---------------
environmentally safe, locked receptacle which is accessible only to authorized
employees of DSI. DSI shall have the obligation to reasonably protect the
confidentiality of the deposit materials. Except as provided in this Agreement,
DSI shall not disclose, transfer, make available, or use the deposit materials.
DSI shall not disclose the content of this Agreement to any third party. If DSI
receives a subpoena or other order of a court or other judicial tribunal
pertaining to the disclosure or release of the deposit materials, DSI will
immediately notify the parties to this Agreement and will endeavor in good faith
not to release or disclose such deposit materials until the parties have had an
opportunity to challenge the subpoena or order. It shall be the responsibility
of Depositor and/or Preferred Beneficiary to challenge any such order; provided,
however, that DSI does not waive its rights to present its position with respect
to any such order. DSI will not be required to disobey any court or other
judicial tribunal order. (See Section 7.5 below for notices of requested
orders.)
2.2 Status Reports. DSI will issue to Depositor and Preferred Beneficiary a
--------------
report profiling the account history at least semi-annually. DSI may provide
copies of the account history pertaining to this Agreement upon the request of
any party to this Agreement.
2.3 Audit Rights. During the term of this Agreement, Depositor and Preferred
------------
Beneficiary shall each have the right to inspect the written records of DSI
pertaining to this Agreement. Any inspection shall be held during normal
business hours and following reasonable prior notice.
ARTICLE 3 -- GRANT OF RIGHTS TO DSI
3.1 Title to Media. Depositor hereby transfers to DSI the title to the media
--------------
upon which the proprietary information and materials are written or stored.
However, this transfer does not include the ownership of the proprietary
information and materials contained on the media such as any copyright, trade
secret, patent or other intellectual property rights, nor any rights to use,
distribute, copy, display, or make derivative works from such proprietary
information and materials, except as otherwise expressly stated in the terms of
this Agreement.
3.2 Right to Make Copies. DSI shall have the right to make copies of the
--------------------
deposit materials as reasonably necessary to perform this Agreement. DSI shall
copy all copyright, nondisclosure, and other proprietary notices and titles
contained on the deposit materials onto any copies made by DSI. With all deposit
materials submitted to DSI, Depositor shall provide any and all instructions as
may be necessary to duplicate the deposit materials including but not limited to
the hardware and/or software needed.
3.3 Right to Sublicense Upon Release. As of the effective date of this
--------------------------------
Agreement, Depositor hereby grants to DSI a non-exclusive, irrevocable,
perpetual and royalty-free license to sublicense the deposit materials to
Preferred Beneficiary upon the release, if any, of the deposit materials in
accordance with Section 4.5 below. Except upon such a release, DSI shall not
sublicense or otherwise transfer the deposit materials.
3
<PAGE>
ARTICLE 4 -- RELEASE OF DEPOSIT
4.1 Release Conditions. As used in this Agreement, "Release Conditions" shall
------------------
mean any one or more of the following.
a. Depositor fails or neglects to make reasonable, good faith and timely
efforts to perform any material obligation relating to maintenance or
support under the Software Support and Maintenance Agreement dated
May 7, 1998 between Depositor and Preferred Beneficiary (the
"Support Agreement"), including without limitation warranty
obligations under the Software License Agreement dated May 7,
1998 between Depositor and Preferred Beneficiary (the "License
Agreement"), and such failure, if capable of cure, is not cured by
Depositor within a period of 30 days after Preferred Beneficiary has
provided Depositor written notice of such failure.
b. Depositor discontinues providing maintenance and support services to
Preferred Beneficiary under the terms and conditions set forth in the
Support Agreement following a decision by Depositor that it will
generally discontinue providing standard maintenance and support
services for its TBS product to its customers. A general
discontinuance of standard maintenance and support does not include
(i) Depositor's cessation of support for a particular release of
version of the TBS product, if Depositor continues to provide standard
maintenance and support for a subsequent release or version of the TBS
product running on a then generally accepted version or release of
substantially the same hardware, operating system and database
platform components; or (ii) an assignment by Depositor of the Support
Agreement in its entirety, which assignment is made in compliance with
the Master License, Development and Service Agreement dated
May 7, 1998 between Depositor and Preferred Beneficiary; or
(iii) an assignment by Depositor of the Support Agreement in its
entirety, which assignment is made after the "Fixed Price Support
Period," as such term is defined in the Support Agreement, to an
entity which has acquired the TBS product from Depositor, provided
that (a) Preferred Beneficiary determines in good faith that the
assignee is capable, financially and otherwise, of performing
Depositor's obligations under the Support Agreement and (b) the
assignee has accepted the assignment in writing.
c. Depositor fails to provide a reasonably effective "Bypass" or "Fix" to
one or more "Critical" or "High" severity level "Incidents" within [*]
after receiving notice from Preferred Beneficiary of such "Incident"
together with all information reasonably required by the "Customer
Support Program." Terms used in the preceding sentence and enclosed in
parenthesis shall have the meanings set forth in the Support
Agreement.
4.2 Filing For Release. If Preferred Beneficiary believes in good faith that a
------------------
Release Condition has occurred, Preferred Beneficiary may provide to DSI written
notice of the occurrence of the Release Condition and a request for the release
of the deposit materials. Upon
4
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
receipt of such notice, DSI shall provide a copy of the notice to Depositor, by
certified mail, return receipt requested, or by commercial express mail.
4.3 Contrary Instructions. From the date Depositor receives the notice
---------------------
requesting release of the deposit materials, Depositor shall have fifteen days
to deliver to DSI Contrary Instructions. "Contrary Instructions" shall mean the
written representation by Depositor that a Release Condition has not occurred or
has been cured, or that Preferred Beneficiary is otherwise not legally entitled
to such release. Upon receipt of Contrary Instructions, DSI shall send a copy to
Preferred Beneficially by certified mail, return receipt requested, or by
commercial express mail. Additionally, DSI shall notify both Depositor and
Preferred Beneficially that there is a dispute to be resolved pursuant to the
Dispute Resolution section of this Agreement (Section 7.3). Subject to Section
5.2, DSI will continue to store the deposit materials without release pending
(a) joint instructions from Depositor and Preferred Beneficiary, (b) resolution
pursuant to the Dispute Resolution provisions, or (c) order of a court.
4.4 Release of Deposit. If DSI does not receive Contrary Instructions from the
------------------
Depositor, DSI is authorized to release the deposit materials to the Preferred
Beneficiary or, if more than one beneficiary is registered to the deposit, to
release a copy of the deposit materials to the Preferred Beneficiary. However,
DSI is entitled to receive any fees due DSI before making the release. This
Agreement will terminate upon the release of the deposit materials held by DSI,
other than a release pursuant to Paragraph 4.1(c), following which this
Agreement shall remain in full force and effect until terminated in accordance
with Paragraph 5.1(a).
4.5 Use License Following Release. Unless otherwise provided in the license
-----------------------------
agreement, upon release of the deposit materials in accordance with this Article
4, Preferred Beneficiary shall have a non-exclusive, non-transferable,
irrevocable right to use or have used the deposit materials for the sole purpose
of continuing the Standard Maintenance Support benefits afforded to Preferred
Beneficiary by the license agreement. Preferred Beneficiary shall be obligated
to maintain the confidentiality of the released deposit materials.
ARTICLE 5 -- TERM AND TERMINATION
5.1 Term of Agreement. The initial term of this Agreement is for a period of
-----------------
one year. Thereafter, this Agreement shall automatically renew from year-to-year
unless (a) Depositor and Preferred Beneficiary jointly instruct DSI in writing
that the Agreement is terminated; or (b) the Agreement is terminated by DSI for
nonpayment in accordance with Section 5.2. If the Acceptance Form has been
signed at a date later than this Agreement, the initial term of the Acceptance
Form will be for one year with subsequent terms to be adjusted to match the
anniversary date of this Agreement. If the deposit materials are subject to
another escrow agreement with DSI, DSI reserves the right, after the initial one
year term, to adjust the anniversary date of this Agreement to match the then
prevailing anniversary date of such other escrow agreements.
5.2 Termination for Nonpayment. In the event of the nonpayment of fees owed to
--------------------------
DSI, DSI shall provide written notice of delinquency to all parties to this
Agreement. Any party to this Agreement shall have the right to make the payment
to DSI to cure the default. If the past due payment is not received in full by
DSI within one month of the date of such notice, then DSI
5
<PAGE>
shall have the right to terminate this Agreement at any time thereafter by
sending written notice of termination to all parties. DSI shall have no
obligation to take any action under this Agreement so long as any payment due to
DSI remains unpaid.
5.3 Disposition of Deposit Materials Upon Termination. Upon termination of this
-------------------------------------------------
Agreement by joint instruction of Depositor and Preferred Beneficiary, or upon
removal under Paragraph 1.8 above, followed by appropriate written instructions
from Depositor, DSI shall destroy, return, or otherwise deliver the deposit
materials in accordance with such instructions. Upon termination for nonpayment,
DSI may, at its sole discretion, destroy the deposit materials or return them to
Depositor. DSI shall have no obligation to return or destroy the deposit
materials if the deposit materials are subject to another escrow agreement with
DSI.
5.4 Survival of Terms Following Termination. Upon termination of this
---------------------------------------
Agreement, the following provisions of this Agreement shall survive:
a. Depositor's Representations (Section 1.5).
b. The obligations of confidentiality with respect to the deposit
materials.
c. The licenses granted in the sections entitled to Right of Sublicense
Upon Release (Section 3.3) and Use License Following Release (Section
4.5), if a release of the deposit materials has occurred prior to
termination.
d. The obligation to pay DSI any fees and expenses due.
e. The provisions of Article 7.
f. Any provisions in this Agreement which specifically state they survive
the termination or expiration of this Agreement.
ARTICLE 6 -- DSI'S FEES
6.1 Fee Schedule. DSI is entitled to be paid by Depositor and Preferred
------------
Beneficiary in equal shares its standard fees and expenses applicable to the
services provided. DSI shall notify both Depositor and Preferred Beneficiary at
least 90 days prior to any increase in fees. For any service not listed on DSI's
standard fee schedule, DSI will provide a quote prior to rendering the service,
if requested.
6.2 Payment Terms. DSI shall not be required to perform any service unless the
-------------
payment for such service and any outstanding balances owed to DSI are paid in
full. All other fees are due upon receipt of invoice. If invoiced fees are not
paid, DSI may terminate this Agreement in accordance with Section 5.2. Late fees
on past due amounts shall accrue at the rate of one and one-half percent per
month (18% per annum) from the date of the invoice.
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ARTICLE 7 -- LIABILITY AND DISPUTES
7.1 Right to Rely on Instructions. DSI may act in reliance upon any
-----------------------------
instruction, instrument, or signature as provided for under this Agreement and
reasonably believed by DSI to be genuine. DSI may assume that any employee of
Preferred Beneficiary who gives any written notice, request, or instruction for
Preferred Beneficiary has the authority to do so; DSI may assume that any
employee of Depositor who represents him or herself as the President or Chief
Executive Officer of Depositor who gives any written notice, request or
instruction for Depositor has the authority to do so. DSI shall not be
responsible for failure to act as a result of causes beyond the reasonable
control of DSI.
7.2 Indemnification. DSI shall be responsible to perform its obligations under
---------------
this Agreement and to act in a reasonable and prudent manner with regard to this
escrow arrangement. Provided DSI has acted in the manner stated in the preceding
sentence. Depositor and Preferred Beneficiary each agree to indemnify, defend
and hold harmless DSI from any and all claims, actions, damages, arbitration
fees and expenses, costs, attorney's fees and other liabilities incurred by DSI
relating to any dispute relating to or arising from this Agreement.
7.3 Dispute Resolution. Any dispute relating to or arising from this Agreement
------------------
shall be resolved by arbitration under the Commercial Rules of the American
Arbitration Association (the "AAA Rules"). Any dispute relating to or arising
from Section 4 will proceed under the expedited procedures of the AAA Rules and
will be concluded within thirty days of the commencement thereof. Unless
otherwise agreed by Depositor and Preferred Beneficiary, arbitration will take
place in Chicago, Illinois U.S.A. Any court having jurisdiction over the matter
may enter judgment on the award of the arbitrator(s). Service of a petition to
confirm the arbitration award may be made by First Class mail or by commercial
express mail, to the attorney for the party or, if unrepresented, to the party
at the last known business address.
7.4 Controlling Law. This Agreement is to be governed and construed in
---------------
accordance with the laws of the State of California, without regard to its
conflict of law provisions.
7.5 Notice of Requested Order. If any party intends to obtain an order from
-------------------------
the arbitrator or any court of competent jurisdiction which may direct DSI to
take, or refrain from taking any action, that party shall:
a. Give DSI at least two business days' prior notice of the hearing;
b. Include in any such order that, as a precondition to DSI's obligation,
DSI be paid in full for any past due fees and be paid for the
reasonable value of the services to be rendered pursuant to such
order; and
c. Ensure that DSI not be required to deliver the original (as opposed to
a copy) of the deposit materials if DSI may need to retain the
original in its possession to fulfill any of its other escrow duties.
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ARTICLE 8 -- GENERAL PROVISIONS
8.1 Entire Agreement. This Agreement, which includes the Acceptance Form and
----------------
the Exhibits described herein, embodies the entire understanding between all of
the parties with respect to its subject matter and supersedes all previous
communications, representations or understandings, either oral or written. No
amendment or modification of this Agreement shall be valid or binding unless
signed by all the parties hereto, except Exhibit A need not be signed by DSI and
Exhibit B need not be signed by Preferred Beneficiary.
8.2 Notices. All notices, invoices, payments, deposits and other documents and
-------
communications shall be given to the parties at the addresses specified in the
attached Exhibit C and Acceptance Form. It shall be the responsibility of the
parties to notify each other as provided in this Section in the event of a
change of address. The parties shall have the right to rely on the last known
address of the other parties. Unless otherwise provided in this Agreement, all
documents and communications may be delivered by First Class mail and all
notices and other communications shall be effective upon receipt.
8.3 Severability. In the event any provision of this Agreement is found to be
------------
invalid, voidable or unenforceable, the parties agree that unless it materially
affects the entire intent and purpose of this Agreement, such invalidity,
voidability or unenforceability shall affect neither the validity of this
Agreement nor the remaining provisions herein, and the provision in question
shall be deemed to be replaced with a valid and enforceable provision most
closely reflecting the intent and purpose of the original provision.
8.4 Successors. This Agreement shall be binding upon and shall inure to the
----------
benefit of the successors and assigns of the parties. However, DSI shall have no
obligation in performing this Agreement to recognize any successor or assign of
Depositor or Preferred Beneficiary unless DSI receives clear, authoritative and
conclusive written evidence of the change of parties.
Metasolv Software, Inc. Data Securities International, Inc.
Depositor DSI
/s/ Michael J. Watters /s/ Lisa G. Reis
By: _____________________________ By: _____________________________
Michael J. Watters Lisa G. Reis
Name: ___________________________ Name: ___________________________
Chief Executive Officer Regional Escrow Manager
Title: __________________________ Title: __________________________
February 4, 1997 February 4, 1997
Date: ___________________________ Date: ___________________________
8
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ACCEPTANCE FORM
Account Number 1305125-00001
-------------
Time Warner Communications Holdings, Inc. hereby (i) acknowledges that it is the
Preferred Beneficiary referred to in the Master Preferred Escrow Agreement
effective February 4, 1997 with Data Securities International, Inc. as the
escrow agent and Metasolv Software as the Depositor and (ii) agrees to be bound
by all provisions of such Agreement.
Time Warner Communications Holdings, Inc.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Date: ___________________________________
Notices and communications
should be addressed to: Invoices should be addressed to:
Company Name: ___________________ _________________________________________
Address: ________________________ _________________________________________
________________________ _________________________________________
________________________ _________________________________________
Designated Contact: _____________ Contact: ________________________________
Telephone: ______________________ _________________________________________
Facsimile: ______________________ _________________________________________
Depositor hereby enrolls Preferred Beneficiary to the following account(s):
Account Name Account Number
- ------------ --------------
1305125-00001
_________________________________ -----------------------------------------
_________________________________ _________________________________________
_________________________________ _________________________________________
Metasolv Software, Inc. Data Securities International, Inc.
- ----------------------- -----------------------------------
Depositor DSI
By: _____________________________ By: _____________________________________
Name:____________________________ Name: ___________________________________
Title: __________________________ Title: __________________________________
Date: ___________________________ Date: ___________________________________
9
<PAGE>
EXHIBIT C
DESIGNATED CONTACT
Master Number 1305125-00001
-------------
Notices, invoices and communications
should be addressed to:
Company Name: Metasolv Software, Inc.
Address: 5560 Tennyson Parkway
Plano, TX 75024
Designated Contact: Jonathan K. Hustis
Telephone: 972-403-8509
Facsimile: 972-403-8599
Requests to change the designated contact should be given in writing by the
designated contact or an authorized employee.
Contracts, deposit materials and Invoice inquiries and fax remittances
notices to DSI should be addressed to: to DSI should be addressed to:
DSI DSI
Contract Administration Accounts Receivable
Suite 200 Suite 1450
9555 Chesapeake Drive 425 California Street
San Diego, CA 92123 San Francisco, CA 94104
Telephone: (619) 694-1900 (415) 398-7900
Facsimile: (619) 694-1919 (415) 398-7914
Date: ___________________________
10
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SCHEDULE NO. 2
TO MASTER LICENSE, DEVELOPMENT AND SERVICE AGREEMENT
This Schedule No. 2 is attached to and made a part of that certain Master
License, Development and Service Agreement dated May 7, 1998 ("Master
Agreement"), by and between Time Warner Communications Holdings, Inc. and
MetaSolv Software, Inc.
SOFTWARE DEVELOPMENT AND SERVICES AGREEMENT
-------------------------------------------
This Software Development Agreement ("Agreement") is entered into on May 7,
1998, by and between Time Warner Communications Holdings, Inc. ("TWC") and
MetaSolv Software, Inc., ("MetaSolv").
In consideration of the mutual promises, covenants and agreements contained
herein, the receipt and sufficiency of which are hereby acknowledged, TWC and
MetaSolv agree as follows:
1. CERTAIN DEFINITIONS: The terms defined in this Article shall have the
meanings set forth below whenever they appear in this Schedule, unless (a)
the context in which they are used clearly requires a different meaning; or
(b) a different definition is described for a particular Article or
provision. Capitalized terms used, but not defined, in this Schedule shall
have the meanings assigned to them in the Master Agreement.
1.1 "Acceptance" (or "Accept" or "Accepted") means any one of the
following: (1) TWC's written certification that the Developments and
Services or a specific portion of them conform in all material
respects to the requirements of this Schedule (including the
Developments Documentation), which certification further states that
TWC has accepted such Developments and Services for purposes of this
Schedule; (2) TWC's failure to provide a written rejection of the
Developments and Services or a specific portion of them during the
Acceptance Period in accordance with Article 3 of this Schedule; (3)
TWC's production use of any Developments or a specific portion of them
beyond the Acceptance Period (other than production use which is made
(i) in connection with the Pilot, (ii) after TWC has rejected such
Developments or such portion in accordance with Article 3 of this
Schedule, and (iii) prior to the termination of this Schedule as set
forth in Section 3.2) and more than ten days after receipt of a
written notice from MetaSolv that states that such continuing
production use will be deemed to constitute "Acceptance" for purposes
of this Schedule; or (4) any other event of Acceptance specifically
and expressly defined as such in the Statement of Work. The term
Acceptance can be used to apply to interim acceptance events involving
phased development milestones and related payments. When the term
Final Acceptance (or "Finally Accept" or "Finally Accepted") is used,
it refers to the Acceptance of the Deliverables other than the Version
3.4 Enhancements after commencement of Pilot for such Deliverables or
to the final Acceptance of the Version 3.4 Enhancements, as the
context may require. Acceptance does not
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imply a waiver of TWC's warranty or maintenance support rights under
this Schedule 2, nor under the Software License Agreement or the
Software Maintenance and Support Agreement.
1.2 "Acceptance Criteria" means that (a) there remain open no Critical or
High severity level Incidents reported during the Acceptance Period,
and (b) that Medium or Low severity level Incidents remaining open, if
any, from such Acceptance Period, are not so numerous that the
Deliverable is not practically usable for development or production
purposes. Such severity level Incidents are as defined pursuant to the
Software Maintenance and Support Agreement.
1.3 "Acceptance Period" means that period designated as such in the
Statement of Work, during which TWC determines whether the
Developments and Services, or an applicable portion of them, conform
in all material respects to the Acceptance Criteria.
1.4 "Dependencies" means the items or activities specifically identified
in the Statement of Work which are to be delivered, provided or
performed by TWC (or a third party supplier of TWC) during the course
of the development, delivery or Acceptance of the Developments and/or
Services and upon which the timely development, delivery or Acceptance
of the Developments and Services is dependent.
1.5 "Deliverables" includes all work product, including both Developments
and Services, to be delivered by MetaSolv under the Statement of Work.
1.6 "Developments" means the software programs, User Manuals and
Information and other items to be developed and delivered by MetaSolv
as described in the Original Statement of Work or a subsequent
Statement of Work. "Developments" also includes the Version 3.4
Enhancements. All Developments under the Original Statement of Work
are intended for incorporation into MetaSolv's standard commercially
available products and services, and the parties shall consider both
general commercial requirements of MetaSolv's existing and potential
customer base and the requirements of TWC and its business during
product design phases under the Statement of Work.
1.7 "Developments Documentation" means (a) a written description of the
functional, performance, compatibility, operational and technical
criteria or other requirements for the Developments set forth in the
Original Statement of Work and Exhibit C and (b) any other criteria or
----------
requirements for the Developments that are set forth in a subsequent
Statement of Work or otherwise mutually agreed to and expressly
incorporated into this Schedule in writing by TWC and MetaSolv from
time to time, all of which are incorporated by reference herein.
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1.8 "Final Delivery Date" means the date set forth in the Statement of
Work by which MetaSolv shall provide all Developments and Services to
TWC for Final Acceptance testing.
1.9 "Holdback Amount" means the amount described as such in Section 5.2 of
this Schedule.
1.10 "Incident" means a reproducible failure of the Developments to conform
to the Developments Documentation. Incidents can occur as a result of
errors or failures in the Developments or the User Manuals and
Information.
1.11 "Pilot" means the Pilot Test process described in the Statement of
Work.
1.12 "Services" means the work to be performed by MetaSolv under this
Schedule, including any and all labor and support necessary to perform
the work specified in this Schedule.
1.13 "Services Requirements" means (a) the description of the functional,
performance, compatibility, operational and technical criteria or
other requirements for the Services set forth in (1) the
Implementation Plan and (2) the Statement of Work relating to the
Services (for the period during which such Statement of Work is in
effect) and (b) any other criteria or requirements for the Services
that are set forth in a subsequent Statement of Work or otherwise
mutually agreed to by TWC and MetaSolv from time to time, all of which
are incorporated by reference herein.
1.14 "Software" shall mean the licensed "Software", as such term is defined
in the Software License Agreement.
1.15 "Software License Agreement" means the agreement attached to the
Master Agreement as Schedule No. 1, as such agreement is amended from
time to time.
1.16 "Software Support and Maintenance Agreement" means the agreement
attached to the Master Agreement as Schedule No. 3, as such agreement
is amended from time to time.
1.17 "Source Code" shall have the meaning set forth in the Software License
Agreement.
1.18 "System" shall have the meaning set forth in Section 3.6.
1.19 "User Manuals and Information" means the specifications, user and
operating manuals, guides, training materials and other documentation
for the Developments. User manuals and Information may be presented as
on-line manuals and documentation or hard copy paper manuals and
documentation.
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1.20 "Version 3.4 Enhancements" means the software programs, User Manuals
and Information and other items to be developed and delivered by
MetaSolv as described in Exhibit C.
---------
2. DEVELOPMENT PROGRAM MANAGEMENT:
2.1 Program Managers. MetaSolv and TWC each shall appoint a program
manager (each, a "Program Manager") and shall notify the other of such
appointment. The initial Program Managers for each of the parties
shall be as specified in the Statement of Work. Except to the extent
otherwise notified in writing, each Program Manager shall be
authorized to act, on one hand on behalf of MetaSolv, and on the other
hand on behalf of TWC, in all matters pertaining to this Schedule.
MetaSolv and TWC shall be entitled to name replacement Program
Managers by notice to the other. Each party recognizes the importance
of management continuity to the success of this Schedule, and neither
party will change its Program Manager without prior notice and
opportunity for consultation with the other party, unless such change
is necessitated by the termination of the Program Manager's employment
with that party. Subject to the preceding requirement for prior notice
and opportunity for consultation, either party shall have the sole
discretion as to whether to change its Program Manager.
2.2 Statement of Work. MetaSolv shall complete the development activities
and provide the Developments and Services to TWC in accordance with
the implementation schedule set forth in the Statement of Work and
Exhibit C, and without regard to any adjustment made pursuant to
---------
Section 5.1 of this Schedule. Failure to complete the activities
necessary to provide the Developments and Services to TWC in
accordance with the implementation schedule set forth in the Statement
of Work and Exhibit C shall be a material breach of this Schedule
---------
which shall entitle TWC to terminate this Schedule, either as to a
particular Deliverable (or nonconforming portion thereof) or in its
entirety, in accordance with Article 6 of the Master Agreement.
2.4 TWC Support. TWC shall commit on a timely basis the number and quality
of resources which are reasonably required in order to meet TWC's
responsibilities as set forth in the Statement of Work and Exhibit C.
---------
2.5 Status Review Meetings. During the term of this Schedule, the
parties' Program Managers shall participate in weekly status meetings
with one another to review the status of the development activities
and the acceptance of all Developments and Services. The Program
Managers also shall discuss the development activities to be performed
in the following week and coordinate acceptance testing, installation
and training schedules. Additional technical personnel from both
MetaSolv and TWC shall participate in such meetings as reasonably
required. Additional meetings shall be held upon the reasonable
request of either party. MetaSolv shall also provide to TWC a weekly
written status report setting
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forth in reasonable detail the status of Developments, Services and
any nonconformities or other issues relating to the development or
acceptance of Developments and Services. Such report shall provide a
severity rating, aging metrics, schedule to fix, expenditures to date
vs. budget and other pertinent information as required by the
Statement of Work to permit MetaSolv and TWC to better prioritize and
manage the completion of the Developments and Services.
2.6 Communications. In order to facilitate communications between the
parties, the parties shall establish an E-Mail linkage which shall be
available for communications with key members of MetaSolv's project
team. Each party shall install software at its locations to facilitate
such E-mail linkage, including, but not limited, a mutually acceptable
encryption method to ensure that such E-Mail linkage is secure. In
addition, TWC will provide and maintain a telecommunications line into
TWC systems to permit MetaSolv access from remote locations to TWC
systems to the extent agreed by the parties to be beneficial or
necessary to support activities under this Schedule.
3. ACCEPTANCE OF DEVELOPMENTS:
3.1 Testing. TWC shall test all Developments and any Services not related
to production of a Development in accordance with the Acceptance Test
Procedures set forth in the Statement of Work and Exhibit C. The
---------
Acceptance Period for each Deliverable shall commence upon receipt of
notice from MetaSolv confirming MetaSolv's delivery of the Deliverable
and requesting that TWC commence acceptance testing and shall end at
the earlier of (a) the expiration of the Acceptance Period for such
Deliverable as stated in the Statement of Work or Exhibit C and (b)
---------
the Acceptance of the Deliverable by TWC.
3.2 Rejection of a Deliverable.
(a) If TWC reasonably determines during the Acceptance Period that
the Deliverable does not conform in all material respects to the
Acceptance Criteria, then TWC shall promptly notify MetaSolv in
writing of its rejection of the Deliverable (or, in the sole
discretion of TWC, the nonconforming portion thereof), and shall
specify in reasonable detail such nonconformity. MetaSolv shall have
the greater of 30 days or such other period as may be stated in the
Statement of Work or Exhibit C from the date of the notice (the
---------
"Correction Period") in which to correct the identified
nonconformities or to establish that the Deliverable does conform to
the Acceptance Criteria. TWC will have an additional acceptance
period (the "Extended Acceptance Period") to determine whether the
Deliverables, as corrected by MetaSolv, conform to the Acceptance
Criteria. Any rejection by TWC of a Deliverable shall be in writing,
and shall specify in reasonable detail in what respects the
Deliverable does not conform to the Acceptance Criteria. Such
rejection shall also state TWC's prioritization of such defect within
the severity categories required by the Statement of Work.
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During any Correction Period, TWC shall act reasonably and in good
faith to provide prompt and complete responses to reasonable MetaSolv
requests for information and testing. The length of the Extended
Acceptance Period shall be determined by TWC with prompt written
notification to MetaSolv, but shall not exceed the original Acceptance
Period provided for such Deliverable under the Statement of Work or
Exhibit C.
---------
(b) If, after resubmission of the Deliverable by MetaSolv, the
Deliverable still does not conform in all material respects to the
Acceptance Criteria, then TWC may at its option and in writing either
(i) again reject the Deliverable (or, in the sole discretion of TWC,
the nonconforming portion thereof) and terminate this Schedule, either
in its entirety or as to that Deliverable (or the nonconforming
portion thereof), or (ii) again reject the Deliverable (or, in the
sole discretion of TWC, the nonconforming portion thereof) and provide
MetaSolv a further written notice of the nonconformities and an
additional opportunity to correct such nonconformities in the manner
provided above, or (iii) again reject the Deliverable (or, in the sole
discretion of TWC, the nonconforming portion thereof) and provide
MetaSolv a further written notice of the nonconformities and an
additional opportunity to correct such nonconformities in the manner
provided above, and at the same time instruct MetaSolv to proceed with
the next stage of the development, as such development stages are
generally described in Sections III.A or VI.A of the Statement of Work
or Sections 1 through 6 of Appendix C of the Statement of Work (each a
"Development Stage"), or (iv) Accept the Deliverable despite the
nonconformities, and provide MetaSolv with further written notice of
such nonconformities, requiring MetaSolv's correction of such
nonconformities in accordance with the warranty and support
requirements of this Schedule and the Software Maintenance and Support
Agreement.
(c) Termination under Section 3.2(b)(i) as to a particular
Deliverable (or nonconforming portion thereof) shall be effected by
TWC giving written notice to MetaSolv of such termination, and after
the Extended Acceptance Period TWC will not be required to provide
MetaSolv with a further opportunity to cure as to that Deliverable.
Furthermore, if TWC will seek termination of this entire Schedule or
the Master Agreement based upon MetaSolv's failure to correct
nonconformities in a Deliverable under this Section, then
notwithstanding Section 6.1 of the Master Agreement, TWC shall give
notice of its intent to do so, and the applicable cure period under
Section 6.1 of the Master Agreement will begin with the end of the
Correction Period then in effect or as of the date of such notice if
no Correction Period is then in effect, and will extend for the longer
of 30 days or the maximum Extended Acceptance Period permissible
(regardless of the actual Extended Acceptance Period) for that
Deliverable under this Section.
(d) In the event that TWC chooses in accordance with Section
3.2(b)(iii) to again reject the Deliverable (such rejected Deliverable
at such Development Stage being hereinafter referred to as the
"Rejected Deliverable") and at the same time
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instructs MetaSolv to proceed with the next Development Stage, then
(A) TWC shall be deemed to have waived its right to then terminate
this Schedule in accordance with Section 3.2(b)(i), either in its
entirety or as to the Rejected Deliverable (or the nonconforming
portion thereof), provided that MetaSolv shall be required to deliver
the Rejected Deliverable at the end of the next Development Stage, and
the failure to make such delivery shall be deemed to be a failure to
deliver the Deliverable which is associated with such Development
Stage, which shall entitle TWC to reject such Deliverable and, if TWC
so chooses, to then make such termination; (B) TWC shall continue to
make payments under Section 5.1 as if TWC had Accepted the Rejected
Deliverable on the date TWC provides notice to proceed with the next
Development Stage; and (C) if the Rejected Deliverable relates to
Functionality Acceptance of TBS Software v.3.2 or 3.3, TWC shall be
deemed to have made such Functionality Acceptance, but solely for
purposes of avoiding the accrual of liquidated damages as set forth in
Section 12.2. Rejection of the Rejected Deliverable and instructing
MetaSolv to proceed with the next Development Stage shall not under
any circumstances be deemed to be an Acceptance of the Rejected
Deliverable for purposes of determining payments to be returned under
Section 3.3. Upon a further rejection of the Rejected Deliverable at a
subsequent Development Stage, where the nonconformities in the
Rejected Deliverable have not been cured, and where TWC terminates for
cause under Article 3 of this Schedule as to that Deliverable (or
nonconforming portion thereof), or terminates for cause this entire
Schedule, whether pursuant to this Article or otherwise, TWC shall be
entitled to a refund of the payments made to MetaSolv under this
Schedule with respect to the Rejected Deliverable, as a Deliverable
not yet Accepted under Section 3.3 below, as well as any subsequent
Deliverables not yet Accepted by TWC.
(e) In the event that TWC chooses in accordance with Section
3.2(b)(iv) to Accept the Deliverable in spite of nonconformities,
MetaSolv will, upon delivery of the conforming Software under the
warranty and support requirements, provide TWC with adequate
opportunity and cooperation to support TWC's testing or retesting of
such delivery to substantially the same degree as such Software would
have been tested had it been conforming at the time of its initial
delivery.
3.3 TWC's Rights Upon Termination For Cause. Upon TWC's termination for
cause under Article 3 of this Schedule as to a particular Deliverable
(or nonconforming portion thereof), or such termination for cause of
this entire Schedule, whether pursuant to this Article or otherwise,
MetaSolv shall return to TWC within five days following TWC's
termination, (i) all payments made to MetaSolv under this Schedule
with respect to that Deliverable (or the nonconforming portion
thereof), in the case of the termination of this Schedule as to a
particular Deliverable (or the nonconforming portion thereof), or (ii)
all payments made to MetaSolv under this Schedule with respect to all
Deliverables not yet Accepted by TWC, in the case of a termination of
this Schedule. TWC shall be entitled to retain and use any
Deliverables previously Accepted by TWC in accordance with this
Schedule, and
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paid for either prior to or following a termination pursuant to this
Section. Further, TWC may be entitled to retain all or some portion of
the Holdback Amount in accordance with Section 12.1. Upon any such
termination, TWC shall have the option to purchase the Source Code for
the Software as set forth in Section 2.7 of the Software License
Agreement, and may use credits against the purchase price to the
extent provided for elsewhere in the Master Agreement or any Schedule
thereto, in which case the Source Code to be provided (and the amount
to be paid by TWC in connection with such exercise) shall include only
the Source Code for the Licensed Materials provided pursuant to the
Software License Agreement and the Source Code for any Developments
that have been Accepted by TWC as of the date of such exercise.
Regardless of whether TWC chooses to purchase the Source Code for the
remainder of the Software, upon request from TWC, MetaSolv shall
provide to TWC, without charge, the Source Code for any Developments
(or the nonconforming portion thereof) which were rejected by TWC in
accordance with Section 3.2; provided that MetaSolv shall provide such
Source Code in the state in which it exists as of the date of
termination and shall not be required to perform any additional
development work with respect to such Source Code. TWC shall be
entitled to use such Source Code to use, display, perform, copy,
modify, have modified, improve, prepare derivative works of, maintain
and support the Software, solely in connection with the business
operations of TWC and its Affiliates, to the exact same extent and
subject to the restrictions, ownership rights, and other terms and
conditions provided for Software Source Code under the Software
License Agreement. Notwithstanding anything in the Master Agreement to
the contrary, and provided that MetaSolv exercised diligent, good
faith and reasonable efforts to complete the development activities
and provide the Developments and Services to TWC in accordance with
the implementation schedule set forth in the Statement of Work and
Exhibit C, TWC shall not be entitled to recover any further losses,
---------
damages or expenses incurred by TWC as a result of a default by
MetaSolv in failing to timely deliver a Deliverable pursuant to this
Schedule, including without limitation recovery of any payments made
to MetaSolv with respect to Deliverables previously Accepted pursuant
to this Schedule. Such limitation shall apply regardless of whether
TWC chooses to exercise its right to terminate this Schedule, either
as to a particular Deliverable (or nonconforming portion thereof) or
in its entirety. Such limitation shall not apply if MetaSolv has
failed to exercise diligent, good faith and reasonable efforts to
complete the development activities and provide the Developments and
Services to TWC in accordance with the implementation schedule set
forth in the Statement of Work and Exhibit C.
---------
3.4 Inability to Test. MetaSolv shall not be deemed to have delivered a
Deliverable if TWC is unable to perform all or any part of the
Acceptance Test Procedures set forth in the Statement of Work with
respect to such Deliverable because MetaSolv has not on a timely basis
delivered one or more other Deliverables (including without limitation
release notes) which are required by the Acceptance Test Procedures to
be used in combination with the Deliverables to be tested.
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3.5 Dependencies. MetaSolv shall not be responsible for any delays in the
development, delivery or Acceptance of a Deliverable directly
attributable to the failure of TWC to on a timely basis deliver or
provide one or more Dependencies which are to be used in combination
with the Deliverable, or directly attributable to TWC's failure to
perform its other obligations stated in this Schedule. In such event,
the schedules for delivery, Acceptance and correction of the
Deliverable shall be adjusted by a period equal to the period of such
delay unless such delay can otherwise be mitigated; the testing period
for the delayed Development and Services shall commence at the end of
the extended period; and each party shall negotiate in good faith upon
request by the other to use the change order process to make
reasonable, agreed, written adjustments to payment schedules and
amounts that otherwise may be delayed or made disadvantageous as a
result of TWC's failure.
3.6 Comprehensive System Solution. Both parties acknowledge that it is
the intention of the parties that MetaSolv provide to TWC a
comprehensive system solution that contains all of the functions and
characteristics specified in the Software Requirements (as such term
is defined in the Software License Agreement), the Developments
Documentation and Exhibit C (the "System").
---------
3.7 Developments Treated as Licensed Materials upon Acceptance. Upon Final
Acceptance of any Development under this Schedule, such Development
will be treated as an item of Licensed Material under the terms of the
Software License Agreement and the Software Support and Maintenance
Agreement, rather than as a Development under this Schedule. Without
limitation of other rights and obligations stated for Software under
the Software License Agreement, the following terms specified in this
Section will apply. Payment of the applicable Development fees under
this Schedule, plus any fees specified for that item in the Software
License Agreement, will be deemed payment of any license fees for such
Development as required under the Software License Agreement. The
maximum number of Named Users applicable to any item of Development
described in the Original Statement of Work will be the same as the
maximum number of Named Users applicable to the TBS Software product
configuration licensed and shown on the initial Exhibit A of the
---------
Software License Agreement. The "Software Requirements" for any such
Developments, as such term is used in the Software License Agreement,
shall be the Development Documentation. MetaSolv obligations as to
software support and maintenance will be determined under the terms of
the Software Support and Maintenance Agreement. MetaSolv obligations
as to Source Code licenses and Source Code escrow for Software stated
in the Software License Agreement will apply. Terms related to
Acceptance for Developments under this Schedule will apply exclusively
as to any Development treated as Licensed Materials, rather than the
terms related to Acceptance of Software under the Software License
Agreement.
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3.8 User Manuals and Documentation. MetaSolv shall supply to TWC User
Manuals and Information which meet the requirements for Documentation
as set forth in Section III.F of the Original Statement of Work and
which are sufficient to allow a user qualified in the subject matter
of the application to use the software included within the
Developments.
4. OWNERSHIP:
4.1 Ownership of Pre-Existing Proprietary Information. Each of the
parties shall retain all intellectual property rights, including
without limitation all rights in patents, copyrights, trademarks and
trade secrets, with respect to all pre-existing proprietary
information or other intellectual property which is embodied in the
Statement of Work, Exhibit C, any Deliverable, any Development or any
---------
other materials provided to the other hereunder, regardless of whether
such proprietary information or other intellectual property was
developed or acquired by such party before or after the effective date
of this Schedule. Subject to any rights or licenses granted pursuant
to this Schedule, all of such proprietary information and other
intellectual property shall be received, held and used in accordance
with the provisions of Article 21 of the Master Agreement.
4.2 Ownership of Deliverables. Except for TWC's or its Affiliates' pre-
existing proprietary information or other intellectual property, the
Deliverables and Developments and any portion thereof, whether or not
jointly developed, will be exclusively the property of MetaSolv. TWC
hereby assigns to MetaSolv exclusive ownership of all intellectual
property rights in materials which have been jointly developed by TWC
and MetaSolv during the term of this Schedule, without the necessity
of any further consideration. TWC shall do any and all acts, and
execute any and all instruments, which MetaSolv may reasonably request
to secure to itself any rights relating to such intellectual property
rights in the United States and in any foreign country. MetaSolv
hereby grants to TWC and its Affiliates a perpetual, nonexclusive,
royalty-free and fully transferable license right to use, copy, make
derivative works from, distribute and otherwise transfer any of such
jointly developed materials, solely for their own internal data
processing operations in connection with their respective businesses,
to the same extent as permitted by, and subject to the license rights
and restrictions applicable to the Licensed Materials under Section
2.1 of the Software License Agreement.
4.3 Preexisting Works and Other Intellectual Property Provided by TWC or
its Affiliates. In consideration of the mutual promises set forth
herein, TWC grants to MetaSolv a perpetual, nonexclusive, royalty-free
and fully transferable license right to use, copy, make derivative
works from, distribute and otherwise transfer any of TWC's or its
Affiliates' pre-existing proprietary information or other intellectual
property which is disclosed by TWC to MetaSolv and is included as part
of the Deliverables in accordance with the Statement or Work or
Exhibit C,
---------
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including but not limited to information about TWC's or its
Affiliates' information systems, business systems, and business
processes; provided, however, that MetaSolv shall not attribute such
information in any way to TWC. The license set forth in the preceding
sentence shall not apply with respect to any pre-existing proprietary
information or other intellectual property which (i) consists of
information regarding TWC's business, such as information regarding
business plans and projections, markets, customers or financial
results, or (ii) is identified in writing prior to or within 30 days
after disclosure as proprietary information or other intellectual
property to which TWC does not wish to have this Section apply, or
(iii) consists of software code protected under copyright law. The
parties shall determine by mutual written consent the terms and
conditions under which such intellectual property for which a license
is not granted under this Section may be used.
4.4 License to Residuals. Each of the parties grants to the other a
perpetual, nonexclusive, royalty-free and fully transferable license
right to use, copy, make derivative works from, distribute and
otherwise transfer any Residuals of the other's intellectual property
(defined below) disclosed to it in the course of the performance of
this Schedule, but without identifying the other party as the source
of such intellectual property. The term "Residuals" refers to ideas,
concepts, know-how, methods, techniques, processes, skills and other
information that, after the disclosure of proprietary information or
other intellectual property, is known to and remembered by the
recipient or its personnel, but without the continuing use of or
reliance on materials or tangible objects provided by the disclosing
party as proprietary information or other intellectual property.
Notwithstanding anything herein to the contrary, the term "Residuals"
does not include any information that is specific to TWC's or
MetaSolv's business such as information regarding business plans and
projections, markets, customers or financial results. Nothing in this
Section 4.4 grants or waives any rights in a trademark, copyright or
patent of either party or any other person.
4.5 THE LICENSES AND OTHER TRANSFERS DESCRIBED IN THIS SECTION ARE GRANTED
AND MADE WITHOUT WARRANTY, AND THE GRANTING PARTY EXPRESSLY DISCLAIMS
ANY AND ALL WARRANTIES FOR SUCH LICENSES AND TRANSFERS, INCLUDING BUT
NOT LIMITED TO ANY WARRANTY OF MERCHANTIBILITY OR WARRANTY OF FITNESS
FOR A PARTICULAR PURPOSE.
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4.6 Provision of Developments Source Code. If TWC exercises its right to
convert the object code license granted in the Software License
Agreement to a Source Code license in accordance with Section 2.7
thereof, then MetaSolv shall, at no additional cost to TWC, provide
TWC with the Source Code for all Developments. TWC shall be entitled
to use such Source Code to use, display, perform, copy, modify, have
modified, improve, prepare derivative works of, maintain and support
the Software, solely in connection with the business operations of
TWC and its Affiliates, to the exact same extent and subject to the
restrictions, ownership rights, and other terms and conditions
provided for Software Source Code under the Software License
Agreement.
5. FEES:
5.1 Fees; Time and Materials Caps. In consideration of the Services and
the development and delivery of the Developments under the Statement
of Work and Exhibit C, TWC shall pay to MetaSolv fees and expenses
---------
(collectively, the "Fees") in the manner and times specified herein.
TWC shall pay the Fees under this Schedule on a biweekly basis in
advance in accordance with a pro forma payment schedule (the "Payment
Schedule") to be developed by mutual agreement of the parties and
attached to Exhibit B of this Schedule. The Payment Schedule for
---------
[ * ] of the total Fees shall be determined by amortizing such Fees
evenly over the period from the date of execution of this Schedule to
the anticipated date of Final Acceptance of the Deliverables other
than the Version 3.4 Enhancements. The Payment Schedule for the
remaining [ * ] of the total Fees shall be determined based upon a
good faith, reasonable resource allocation plan for the Deliverables
(other than Version 3.4 Enhancements) to be prepared by MetaSolv and
submitted to TWC for its approval, which shall not be unreasonably
withheld. The Payment Schedule shall set forth delivery dates for
certain key Deliverable milestones, using such delivery intervals as
are mutually agreed upon by the parties but which are anticipated to
be approximately monthly. TWC shall make payments against the Payment
Schedule up to the aggregate Fee cap which is associated with each
Deliverable milestone identified on the Payment Schedule. Except as
set forth in Section 3.2(d), if MetaSolv fails to meet a Deliverable
milestone identified on the Payment Schedule, payments from TWC
relating to future Deliverable milestones shall be suspended. Such
payments shall resume once the missed Deliverable milestone has been
met or where such Deliverable milestone has been Accepted by TWC (or
where MetaSolv has been instructed to proceed under Sections
3.2(b)(iii) and 3.2(d)) notwithstanding a nonconformity in its
delivery, and the dates in the Payment Schedule shall be set back by
the number of days during which the payment was suspended such that
the date on which the missed Deliverable milestone is met or so
Accepted shall be deemed to be the first day of the next payment
period. If a Deliverable milestone is achieved ahead of schedule as
adjusted under this Section, and all prior Deliverable milestones
have also been met or so Accepted, TWC shall pay the difference
between the aggregate Fees paid to date and the aggregate Fee amount
associated
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with that last Deliverable milestone so achieved [*]. MetaSolv shall
provide TWC with a weekly statement reporting the actual fees and
expenses incurred in the prior week, based upon the rates specified
in Exhibit B. Either party may request an adjustment to that portion
---------
of the Payment Schedule which is based upon the resource allocation
plan based upon the actual fees and expenses incurred as compared
with the fees and expenses associated with such Deliverable milestone
as set forth in the Payment Schedule. The Fees shall constitute full
payment for development of the Developments and all Services to be
performed by MetaSolv under this Schedule including, but not limited
to, acceptance testing, installation, training, data conversion, and
other technical support rendered under this Schedule, and related
expenses, unless otherwise expressly set forth elsewhere in this
Schedule or a further written agreement signed by the parties. Except
as otherwise set forth in the Statement of Work, personnel and
materials necessary for development of the Developments shall be
arranged for by MetaSolv at its own expense.
As an example of the application of the preceding paragraph, assume
that Deliverable milestone #3 is scheduled to be met on July 31, 1998
and Deliverable milestone #4 is scheduled to be met on August 28,
1998. Further assume that the aggregate fee cap associated with
Deliverable milestone #3 is $1,000,000 and that the aggregate fee cap
associated with Deliverable milestone #4 is $1,400,000. Finally,
assume that Deliverable milestone #3 is not met until August 15,
1998. In that event, TWC will continue to make payments through July
31, 1998 and until the aggregate payments made by TWC equal
$1,000,000. Payments by TWC will be suspended commencing on August 1,
1998 and will resume on August 15, 1998. Commencing August 1, 1998,
dates in the Payment Schedule will be set back by the period of the
suspension. Assuming that the payments towards Deliverable milestone
#4 were to have been made in two equal amounts, TWC will pay $200,000
on August 15, 1998 and $200,000 on August 29, 1998. Dates in the
Payment Schedule will only be adjusted forward to the extent MetaSolv
achieves a subsequent Deliverable milestone ahead of schedule. All
payment amounts referenced in this example are prior to adjustment
for the Holdback Amount as set forth in Section 5.2.
5.2 Holdback Amount. Notwithstanding anything to the contrary contained
in this Schedule or the Master Agreement, TWC shall be entitled to
withhold [*] of the total license fees applicable to the initial
Software to be delivered under the
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<PAGE>
Software License Agreement (see Schedule 1, Exhibit B) plus [*] of
---------
any Fees otherwise due under this Schedule. The amounts so withheld
are referred to hereinafter as the "Holdback Amount". TWC shall pay
to MetaSolv the entire unpaid portion of the Holdback Amount upon the
earlier of (i) its receipt of an invoice from MetaSolv correctly
stating that such remaining payment is due following Acceptance of
Final Report for Pilot (Key Deliverable #8), as described in the
Original Statement of Work, and (ii) termination of this Schedule for
convenience pursuant to Section 5.1 of the Master Agreement;
provided, however, that in lieu of paying the unpaid portion of the
Holdback Amount following a termination by TWC for convenience, TWC
may return the Licensed Materials (as such term is defined in the
Software License Agreement) and any Deliverables previously Accepted
by TWC in accordance with this Schedule to MetaSolv, and in such case
TWC shall be entitled to retain the unpaid portion of the Holdback
Amount. TWC shall also be entitled to retain the unpaid portion of
the Holdback Amount under the circumstances described in Section
12.1. TWC shall pay to MetaSolv [*] of the Holdback Amount under the
circumstance in which MetaSolv has presented a Final Report for Pilot
(Key Deliverable #8), as described in the Original Statement of Work,
and TWC has rejected such Final Report for Pilot pursuant to Section
3.2 of this Schedule, but has not terminated this Schedule, either
with respect to such Deliverable or in its entirety, yet TWC
continues to use the Developments in production more than 90 days
after the date which TWC delivers such rejection.
5.3 Funding from Other Customers. It is understood that MetaSolv may
obtain funding for TBS Software releases, including Developments,
from other customers, in addition to funding provided by TWC, and
without any accounting or reimbursement to TWC other than as
specified in this Section. If MetaSolv receives such funding from
other customers that is both a) directly attributable to Development
functionality committed by MetaSolv under this Schedule, and b) in
excess of the total MetaSolv-funded portion of the TWC project with
respect to such Development functionality, then MetaSolv will refund
the difference to TWC. MetaSolv may, at its discretion and with such
other funding customers' written consent, shift such excess funding
to cover funding shortfalls in other development projects with the
same customer, which projects were contracted for at or about the
same time. In the event that TWC has probable cause to believe that
MetaSolv has failed to comply with this Section, TWC may notify
MetaSolv in writing of this belief and the specific facts underlying
it, and MetaSolv shall respond in writing within 10 days of receipt
of such written notice. If the matter is then not resolved by mutual
agreement within 30 days of TWC's original notice of probable cause,
TWC shall have reasonable access, through its third party certified
public accounting firm, to relevant MetaSolv records, subject to
confidentiality provisions of the Master Agreement, for purposes of
audit during MetaSolv's normal business hours.
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6. SERVICES RELATING TO EQUIPMENT: MetaSolv shall advise, assist and
cooperate with TWC with respect to the configuration, purchase and
installation of the Designated Operating Environment (as such term is
defined in the Software License Agreement). The Designated Operating
Environment that MetaSolv recommends for purchase and installation by TWC
shall meet MetaSolv's requirements for the Software. Where TWC's use of
the Software is in accordance with the Software Requirements and User
Manuals and Information, and where MetaSolv's advice would be reasonably
related to the prevention of potential Incidents under Schedule 3, MetaSolv
shall advise TWC regarding scalability attributes and related equipment
requirements of the Software (such as requirements for the addition of
memory or storage capacity) to accommodate TWC's growth in its use of the
Software. Other scalability advice relating to TWC's other data processing
needs, if related to its use of the Software, may be rendered on a time and
materials basis in accordance with change order requirements of this
Agreement, or under Article 7 of this Agreement.
7. ADDITIONAL SERVICES: In addition to providing the workers to perform
the Services, upon request from time to time by TWC during the term of this
Schedule and for a period of three years thereafter, MetaSolv shall in good
faith consider any request by TWC to provide qualified personnel to perform
additional services at the direction of TWC relating to the Services, the
Software or the Developments at the rates set forth in Exhibit B.
---------
Personnel that MetaSolv furnishes pursuant to this Section shall be
qualified to perform the tasks and functions for which they are assigned in
a skillful manner, in accordance with the terms of this Schedule. The
scheduling, qualifications, and availability of such personnel will be
subject to MetaSolv's reasonable business judgment and discretion. This
Article 7 is not a "requirements" obligation, and does not require MetaSolv
to hire or maintain the employment of any particular person, class of
employees, or level of staffing.
8. MAINTENANCE, INSTALLATION, TRAINING AND OTHER TECHNICAL SUPPORT: MetaSolv
shall provide maintenance, installation, training, and other technical
support with respect to the Developments as specified in any Statement of
Work and under the Software Support and Maintenance Agreement, if
applicable.
9. TRAINING: In addition to the training, support and assistance described in
the Statement of Work, MetaSolv shall provide TWC with standard training,
support and assistance including, but not limited to, the training programs
and train the trainer programs, and related documentation, as described in
and in accordance with the pricing listed in Exhibit A.
---------
10. WARRANTY:
10.1 Developments. MetaSolv warrants that upon their submission to TWC by
MetaSolv for Final Acceptance, and notwithstanding the Acceptance
Criteria applicable to TWC's right to reject any Development, the
Developments shall be free from defects in workmanship or material,
and shall conform in all material
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respects to the Developments Documentation. This warranty shall not
be voided by TWC's combination of the Developments (a) with the
Software, and (b) with third party software or equipment that
MetaSolv generally advises its customer base to be used or compatible
with the Software, so long as TWC and its Affiliates do not modify
the Developments in a manner not specifically prescribed by MetaSolv.
For any breach of a warranty stated in this Section, TWC shall
promptly notify MetaSolv in writing of the defect with the
specificity required for a rejection under Article 3. For any such
defect under this Section up to and including the time of Final
Acceptance of a particular Development, TWC's exclusive remedies
shall be those set forth in Article 3 of this Schedule. Neither
Acceptance nor Final Acceptance of a Development under this Schedule
waives TWC's warranty rights under this Schedule. After Final
Acceptance of a Development, then such Development will be treated as
Licensed Materials under the Software License Agreement and the
Software Support and Maintenance Agreement, so that MetaSolv's
warranties and TWC's remedies for breach of those warranties shall be
determined as for Software under those two Schedules.
10.2 Software Traps. MetaSolv warrants that no portion of software
contained in the Developments (the "Software Developments") as
delivered shall contain any software "Virus", as defined herein. For
the purposes of this Schedule, "Virus" shall mean a set of computer
instructions which are self-replicating or self-propagating and are
designed to contaminate the Software Developments, to consume
computer resources without regard to performance of an intended
function, or modify, destroy, record or transmit data or programming
without the intent or permission of the user. MetaSolv further
warrants that prior to the delivery of any Software Developments to
TWC or its Affiliates, MetaSolv will use reasonable efforts to detect
and screen out any Virus through the use of the current version of
one or more virus detection programs. MetaSolv further warrants that,
at the time of delivery, no portion of the Software Developments as
delivered shall contain any "Disabling Device", as defined herein.
For the purposes of this Schedule, "Disabling Device" shall mean any
software routines or hardware components designed by MetaSolv or the
third party software vendor to permit unauthorized access, to disable
or erase software, hardware or data, or to perform any other such
actions which will have the effect of materially impeding the normal
and expected operation of the Software Developments.
10.3 Professional Manner. Each party shall perform its obligations under
this Schedule in a professional manner in accordance with the
prevailing standards in the industry or higher, and in accordance
with this Schedule and the Master Agreement. The Services shall
conform in all material respects to the Services Requirements.
10.4 Services. MetaSolv shall perform the Services, and TWC and its
Affiliates shall perform their obligations, in accordance with this
Schedule and the Master
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Agreement, regardless of the rate of incremental growth in the number
of customers served by TWC and its Affiliates.
10.5 Workers Qualified. Workers that either party furnishes to provide
Services or otherwise support the activities required under the
Statement of Work and Exhibit C shall be qualified to perform the
---------
tasks and functions for which they are assigned in a skillful manner.
10.6 Reassignment of Workers. If a worker of either party is unavailable
or unable to perform the party's obligations or Services assigned to
that worker, the other party may request, and the parties shall
consult with one another in good faith, as to the provision of a
replacement worker to ensure immediate continuation of the Services
at a competent performance level. Unless otherwise agreed in a
signed, written document, each party shall bear all associated costs
to train, qualify or update any replacement worker(s) that it assigns
to perform its obligations under this Schedule. Where one party
requests that the other remove any worker from performing obligations
under this Schedule, or refuses assignment of the other party's
worker to the performance of obligations under this Schedule, for any
reason whatsoever, the parties shall consult in good faith with one
another and seek to reach a mutually agreeable solution.
10.7 Year 2000 Compliant. MetaSolv warrants that the Developments, as
applicable, shall include calendar year 2000 date conversion and
compatibility capabilities, including date data century recognition,
same century and multiple century formula and date value calculations
and user interface date data values that reflect the century.
Specifically, the Developments will (a) manage and manipulate data
involving dates, including single century and multiple century dates
and such operations will not cause an abort or result in the
generation of incorrect values or invalid output due to the
involvement of such dates, and (b) include the indication of the
correct century in all date related user interface functionalities.
MetaSolv further represents and warrants that the Developments will
correctly recognize and process the date of February 29, and any
related data, during leap years. Notwithstanding anything in the
Master Agreement or any Schedule thereto to the contrary, the
warranty made in this Section shall extend until December 31, 2001.
10.8 Ownership; Authority. MetaSolv warrants that it has full power and
authority to grant the rights granted under this Schedule to TWC with
respect to the Developments without the consent of any other person
or entity. Neither the grant of rights to the Development nor the use
thereof by TWC will in any way constitute an infringement or other
violation of any IP Rights or other rights of any third party.
10.9 Remedies. MetaSolv shall correct any failure to fulfill any of the
above warranties, provided that it is given notice of such failure
within the applicable warranty period. For any warranty claim under
this Article, TWC's remedies shall
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be those set forth in Article 3 and Section 10.1 of this Schedule,
in the Master Agreement and in the Software Support and Maintenance
Agreement and shall be subject to the applicable limitations set
forth therein.
10.10 THE WARRANTIES CONTAINED IN THIS SCHEDULE, THE MASTER AGREEMENT, AND
ALL OF THE SCHEDULES THERETO, ARE EXCLUSIVE. THEY ARE IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, OR ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A COURSE
OF DEALING OR USAGE OF TRADE.
11. MODIFICATIONS: Either party may from time to time request changes relating
to this Schedule in accordance with the change order process set forth in
the Master Agreement. The parties shall determine through the change order
process the ownership of modifications made pursuant to this Section, and
in the event that the written change order does not specifically and
expressly address the ownership of such modifications, then the applicable
provisions of the Master Agreement, its Schedules, and this Schedule shall
control.
12. LIQUIDATED DAMAGES:
12.1 Holdback Amounts. [*]
12.2 Functionality Acceptance Deadlines. The following schedule of
liquidated damages applies to assure MetaSolv's timely performance
of development activities from Prototype Acceptance through
Functionality Acceptance of TBS Software v.3.2 and v.3.3. For this
purpose, "Prototype" Acceptance and "Functionality" Acceptance shall
be as defined in the Statement of Work. The parties agree that
"Functionality" testing as described in the Statement of Work shall
not include testing with converted TWC data, stress testing, load
testing,
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integration testing, interface testing, environmental testing and
testing of configuration files. MetaSolv will be measured on its
achievement of development deadlines for the two periods beginning,
respectively, with TWC's Prototype Acceptance of v.3.2 and v.3.3,
and ending, respectively, with MetaSolv's delivery of v.3.2 and
v.3.3 Software meeting Functionality Acceptance (or where MetaSolv
has been instructed to proceed after Functional UAT under Sections
3.2(b)(iii) and 3.2(d)). To support MetaSolv's activities in
parallel to TWC's Functionality Acceptance testing activities, TWC
will provide all test data to MetaSolv in advance of the start of
each Functionality Acceptance test. For each of v.3.2 and v.3.3,
MetaSolv must meet Functionality Acceptance Criteria within [*]
after the end of the applicable Functionality Acceptance Period (the
"Functionality Deadline"), for all Incidents properly documented and
reported by TWC during that Functionality Acceptance Period. For
each [*] by which MetaSolv exceeds the Functionality Deadline, up to
[*] per Functionality Acceptance test, liquidated damages will
be paid in the form of credits toward the purchase of any MetaSolv
services (excluding maintenance support), software licenses, Named
User licenses, or enhancements to commercial software, with the
credits to be applicable at TWC's discretion any time during the [*]
period following the date of accrual, but outside of the scope of
the [*] project payments under the Original Statement of
Work, including Holdback Amounts. The total amount of liquidated
damages creditable under this Section 12.2 for both Functionality
Acceptance tests combined will not exceed [*].
[*]
12.3. Version 3.4 Enhancement Deadlines. The following liquidated damages
apply to assure MetaSolv's timely performance of development
activities resulting in Final Acceptance of the Version 3.4
Enhancements. The Version 3.4 Enhancements are to be delivered and
Finally Accepted by TWC on or before March 31, 2000. Notwithstanding
anything in the Software Support and Maintenance Agreement to the
contrary, if TWC has not been required to Finally Accept the Version
3.4 Enhancements on or before December 31, 1999, TWC shall be
entitled to defer the payment to be made for support and maintenance
services under the Software Support and Maintenance Agreement for
the annual period which commences in year 2000 until it is required
to make such Final Acceptance, and TWC shall receive a day for day
credit against the fees chargeable under the Software Support and
Maintenance Agreement for each day after March 31, 2000 until it is
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required to make such Final Acceptance; provided, however, that TWC
shall receive no more than one year's credit pursuant to this
Section. Such credit shall be applicable at any time and in any year
in the sole discretion of TWC. Notwithstanding anything in the
Master Agreement or the Software Support and Maintenance Agreement
to the contrary, failure by TWC to pay fees in accordance with this
Section 12.3 shall not be considered to be a breach of either such
Agreement, and MetaSolv shall continue to provide support and
maintenance notwithstanding such non-payment, provided that TWC is
not in breach of any other provision of either such Agreement which
would permit MetaSolv to suspend or cease providing such service. It
is further agreed that such liquidated damages are conditional upon
TWC providing for the Version 3.4 Enhancements design, development,
and testing cooperation, input and support generally consistent with
that required for Developments under this Schedule 2, in a way that
will permit due consideration of TWC requirements and MetaSolv
product plans for its customer base generally, and of the
activities, functionality and scheduling required to meet the March
31, 2000 deadline. For purposes of clarity, the parties agree that
consideration of MetaSolv's product plans for its customer base
generally shall not supersede the requirement to provide to TWC the
software programs, User Manuals and Information and other items as
described in Exhibit C. To that end, MetaSolv and TWC shall jointly
---------
create a Statement of Work applicable to such Version 3.4
Enhancements, including but not limited to processes and tasks such
as a Developments List, Project Schedule, Project Plan,
Dependencies, Solutions Proposal, Prototyping, and Acceptance
testing. Notwithstanding the characterization of the software
programs, User Manuals and Information and other items described in
Exhibit C as the "Version 3.4 Enhancements", it is understood and
---------
agreed that such term is used solely for purposes of convenience and
that such software programs, User Manuals and Information and other
items may ultimately be delivered in one or more versions of the TBS
Product and not merely in version 3.4.
12.4 Liquidated Damages. MetaSolv acknowledges that all amounts retained
by or paid to TWC as "liquidated damages" under this Article 12 are
(a) liquidated damages, and not a penalty, and (b) reasonable and
not disproportionate to the presumed damages to TWC in lost revenues
and profits from a failure by MetaSolv to comply with the referenced
portions of the Statement of Work. TWC's retention or receipt of
liquidated damages under this Article shall in no way affect TWC's
right to terminate this Schedule or the Master Agreement, or any
portion hereof or thereof, or to pursue any other rights and
remedies available to TWC under this Schedule, the Master Agreement
or applicable law, including the right to recover direct damages for
the breach to the extent that MetaSolv has failed to exercise
diligent, good faith and reasonable efforts to complete the
development activities and provide the Developments and Services to
TWC in accordance with the implementation schedule set forth in the
Statement of Work and Exhibit C, and such direct damages are proven
---------
by TWC, subject in any case to the limitations set forth in the
Master Agreement or this Schedule.
Page 20
<PAGE>
13. SURVIVAL: Sections 3.3 and 3.7 and Articles 4, 5, 7, 8, 9, 10, 12 and 14
shall survive the completion, expiration, termination or cancellation of
this Schedule.
14. ENTIRE AGREEMENT: This Schedule, together with the Master Agreement and
all Orders, Statements of Work, exhibits and attachments hereto shall
constitute the entire agreement between the parties with respect to the
subject matter of this Schedule.
15. EXHIBITS: The following is a list of Exhibits attached to this Schedule:
Exhibit A - Training
Exhibit B - Fees and Rates
Exhibit C - Version 3.4 Enhancements
Page 21
<PAGE>
The parties intending to be legally bound have caused this Schedule to be
executed by their duly authorized representatives.
Time Warner Communications MetaSolv Software, Inc.
Holdings, Inc.
/s/ Stephen A. McPhie /s/ Michael J. Watters
- ---------------------------------- ---------------------------------
(Authorized Signature) (Authorized Signature)
Stephen A. McPhie Michael J. Watters
- ---------------------------------- ---------------------------------
(Print or Type Name of Signatory) (Print or Type Name of Signatory)
President Chief Executive Officer
- ---------------------------------- ---------------------------------
(Title) (Title)
May 7, 1998 May 15, 1998
- ---------------------------------- ---------------------------------
(Execution Date) (Execution Date)
Page 22
<PAGE>
EXHIBIT A
TO
SOFTWARE DEVELOPMENT AGREEMENT
------------------------------
TRAINING
--------
This Exhibit provides a list of MetaSolv's standard training courses and applies
except where superseded by an SOW or other written agreement.
Training:
Training may be conducted at the TWC's location (onsite) or at MetaSolv's
training center in Denver, CO or Plano, Texas. A [*] students are allowed per
class.
Onsite Training: On-site instruction is priced at a flat [*] per day plus the
instructor's travel expenses. In addition, a database set-up service may be
required for certain courses. MetaSolv's Professional Services group will
assist TWC in determining when database set-up is required and the number of
days.
MetaSolv's Training Center: All courses are taught at MetaSolv's training
center. Courses are priced on a per student basis.
Training Price List:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Service Code Training at MetaSolv Training Center Price per student
- ------------------------------------------------------------------------------------------
<S> <C> <C>
TR1010 Bootcamp (10 days) [*]
- ------------------------------------------------------------------------------------------
TR1020 Industry Basics (3 days) [*]
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Software Series:
- ------------------------------------------------------------------------------------------
TR2010 Introduction to MetaSolv's Telecom Business Solution [*]
software
- ------------------------------------------------------------------------------------------
TR2020 Regulated Ordering (1.5 days) [*]
- ------------------------------------------------------------------------------------------
TR2030 Product Service Request Ordering (3 days) [*]
- ------------------------------------------------------------------------------------------
TR2040 Network Engineering (1.5 days) [*]
- ------------------------------------------------------------------------------------------
TR2050 Service Provisioning (1 day) [*]
- ------------------------------------------------------------------------------------------
TR2060 Data and Work Management (1 day) [*]
- ------------------------------------------------------------------------------------------
</TABLE>
Onsite Training. Prices for on-site courses are listed in the table below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Service Code Onsite Training/1/ Number of Days Total Price
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OT2010 Introduction to MetaSolv's Telecom
Business Solution software 1 [*]
- -------------------------------------------------------------------------------------------
OT2020 Regulated Ordering 1.5 [*]
- -------------------------------------------------------------------------------------------
OT2030 Product Service Request Ordering 3 [*]
- -------------------------------------------------------------------------------------------
</TABLE>
Page 23
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
OT2040 Network Engineering 1.5 [*]
- -------------------------------------------------------------------------------------------
OT2050 Service Provisioning 1 [*]
- -------------------------------------------------------------------------------------------
OT2060 Data and Work Management 1 [*]
- -------------------------------------------------------------------------------------------
</TABLE>
Page 24
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
EXHIBIT B
TO
SOFTWARE DEVELOPMENT AGREEMENT
------------------------------
FEES AND RATES
--------------
1. Pro Forma Payment Schedule and Deliverables Milestones: See Attachment A
to this Exhibit B.
---------
TOTAL FEES FOR ORIGINAL STATEMENT OF WORK: $ [ * ]
2. Rates. MetaSolv will prepare biweekly statements against work performed
under the Statement of Work at the rates stated in the MetaSolv rate table
below. In accordance with Section 5.1 of this Schedule, such statements
shall be solely for the information purposes of the parties.
Developer [ * ]
Consulting [ * ]
Program Mgr [ * ]
Architect [ * ]
3. Time and Material Services Cap. The time and materials Services cap for the
Original Statement of Work is the total Fee amount stated in Paragraph 1 of
this Exhibit B on amounts billable under this Exhibit B for Services and
related expenses (including without limitation travel expenses for
MetaSolv's employees and contractors) under the Original Statement of Work.
MetaSolv will not invoice TWC for Services and related expenses (including
without limitation travel expenses for MetaSolv's employees and
contractors) under the Original Statement of Work for amounts in excess of
the total estimated amount above, unless there has been a Change Order with
respect to such additional amounts, or it is otherwise specifically
provided for under this Schedule.
4. Future or Additional Services. For Services in addition to those described
in the Original Statement of Work, MetaSolv agrees to the following rates
through [ * ]
Developer [ * ]
Consulting [ * ]
Program Mgr [ * ]
Architect [ * ]
After [ * ] MetaSolv may increase such rates each calendar year by
not more than the increase in the [ * ] (as defined herein) over
the preceding calendar year. [ * ]
Page 25
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
EXHIBIT C
TO
SOFTWARE DEVELOPMENT AGREEMENT
------------------------------
VERSION 3.4 ENHANCEMENTS
------------------------
Page 26
<PAGE>
SCHEDULE NO. 3
TO MASTER LICENSE, DEVELOPMENT AND SERVICE AGREEMENT
This Schedule No. 3 is attached to and made a part of that certain Master
License, Development and Service Agreement dated May 7 1998 ("Master
Agreement"), by and between Time Warner Communications Holdings, Inc. and
MetaSolv Software, Inc.
SOFTWARE SUPPORT AND MAINTENANCE AGREEMENT
------------------------------------------
This Software Support and Maintenance Agreement ("Agreement") is entered into on
May 7 1998, by and between Time Warner Communications Holdings, Inc. ("TWC") and
MetaSolv Software, Inc. ("MetaSolv").
In consideration of the mutual promises, covenants and agreements contained
herein, the receipt and sufficiency of which are hereby acknowledged, TWC and
MetaSolv agree as follows:
1. CERTAIN DEFINITIONS: The terms defined in this Article shall have the
meanings set forth below whenever they appear in this Schedule, unless (a)
the context in which they are used clearly requires a different meaning; or
(b) a different definition is described for a particular Article or
provision. Capitalized terms used, but not defined, in this Schedule shall
have the meanings assigned to them in the Master Agreement, or in Exhibit A
(Customer Support Program) to this Schedule 3.
1.1 "Bypass" means a procedure (i) which can be used by TWC either to avoid
a reported Incident or to reduce its Severity Level to either Medium or Low,
as defined in the Customer Support Program, by changes to the procedures
followed or data supplied by TWC when using the Software and (ii) which does
not impose any material additional burden upon TWC, either in time or
resources required to cause the Software to perform the desired function.
1.2 "Customer Support Program" means MetaSolv's Customer Support Program
generally available to its customers, as modified by MetaSolv from time to
time, subject, however, to Section 2.2 of this Schedule. A copy of
MetaSolv's current Customer Support Program is attached to this Schedule as
Exhibit A.
---------
1.3 "Defective Incident" means a Critical or High severity level Incident
which has been reported by TWC and which is later shown to be a Non-
Programming Error.
1.4 "Description of Services" means the description of the Services set
forth in any Statement of Work.
Page 1
<PAGE>
1.5 "Designated Operating Environment" shall have the meaning set forth in
the Software License Agreement.
1.6 "Documentation" means (a) the "Software Requirements", as such term is
defined in the Software License Agreement, and/or the "Developments
Documentation", as such term is defined in the Software Development
Agreement, as the case may be and as the context requires, (b) the
description of the functional, performance, compatibility, operational and
technical criteria or other requirements for the Software or the Services
set forth in the Original Statement of Work, and (c) any other criteria or
requirements for the Software or Services set forth in a subsequent
Statement of Work or otherwise mutually agreed to in writing by TWC and
MetaSolv from time to time, all of which are incorporated by reference
herein.
1.7 "Fixed Price Support Period" means the first three annual support
periods following the expiration of the Warranty Period.
1.8 "Incident" means a reproducible failure of the Software to conform to
the Documentation. Incidents can occur as a result of errors or failures in
the Software or the User Manuals and Information.
1.9 "Fix" means the replacement or modification of code comprising the
Software, or addition or replacements to the User Manuals and Information,
to remedy an Incident reported to MetaSolv.
1.10 "Non-Programming Error" means an Incident which occurs as a result of
(i) failure of any item of hardware, third party software, peripherals or
other equipment in the Designated Operating Environment to conform to the
specifications therefor; (ii) combination of the Software with any item of
hardware, third party software, peripherals or other equipment not listed in
the description of the Designated Operating Environment; (iii) any
modification to the Software which is neither provided nor recommended in
writing by MetaSolv or its authorized agents; or (iv) a failure by any user
of the Software to comply with any operating procedures set forth in the
Documentation.
1.11 [*]
1.12 "Services" means the work and services to be performed by MetaSolv
under this Schedule, including, but not limited to, supplying any
deliverables, including, but not limited to, Updates.
1.13 "Software" means the "Software," as such term is defined in the
Software License Agreement, including all Updates thereto.
Page 2
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
1.14 "Software Development Agreement" means the agreement attached to the
Master Agreement as Schedule No. 2, as such agreement is amended from time
to time.
1.15 "Software License Agreement" means the agreement attached to the Master
Agreement as Schedule No. 1, as such agreement is amended from time to time.
1.16 "Source Code" shall have the meaning set forth in the Software License
Agreement.
1.17 "Tier 1 and Tier 2 Support" means (i) providing help desk level support
to end users of the Software, including fielding requests for assistance and
initial Incident reports, (ii) making reasonable, good faith efforts to
diagnose, investigate and resolve potential Incidents on an initial basis
prior to reporting unresolved Incidents to MetaSolv, (iii) assigning an
initial criticality level to each Incident reported to MetaSolv (which
assignment shall not be determinative for purposes of this Schedule), and
(iv) providing to MetaSolv such information regarding the Incident as is
reasonably required pursuant to the Customer Support Program.
1.18 "Tier 3 Support" means providing the Services in accordance with this
Schedule.
1.19 "Update" means any of the following items as provided by MetaSolv
either pursuant to this Schedule or the Customer Support Program: (a) a
release of the Software, subsequent to the initial delivery of the Software,
in which MetaSolv has incorporated any Fixes which make the Software conform
to the then current Documentation, (b) any improvements or Enhancements of
the Software, (c) any new functions which were not formerly functions of the
Software, and (d) any changes to the Software to properly operate with
modifications made to other components of the Designated Operating
Environment. In the case of Developments under the Software Development
Agreement, the "initial delivery" of the Development as Software shall be
its Final Acceptance by TWC. Updates do not include software released by
MetaSolv as a separate product, or as a custom solution (other than the
Software Developments once they are included in the Software), rather than
as an Enhancement under the Customer Support Program.
1.20 "User Manuals and Information" means the specifications, user and
operating manuals, guides, training materials and other documentation to be
provided to TWC by MetaSolv under (a) the Software License Agreement, (b)
the Software Development Agreement, and (c) this Schedule.
1.21 "Warranty Period" means the Warranty Period (as defined pursuant to
Section 10.9 of the Master Agreement and Section 5 of Exhibit A to the
Software License Agreement) for the Licensed Materials (as defined in the
Software License Agreement).
Page 3
<PAGE>
2. SCOPE OF SERVICES:
2.1 Services. Subject to Section 3.3, MetaSolv shall perform the following
services for TWC, making reasonable, good faith, and timely efforts to:
(a) Maintain the Software in conformity in all material respects with the
Documentation in accordance with the procedures set forth in this
Schedule and the Customer Support Program.
(b) Fix all Incidents reported by TWC or discovered by MetaSolv in
accordance with the procedures set forth in this Schedule and the
Customer Support Program, other than Incidents which result from Non-
Programming Errors.
(c) Provide support, assistance and consultation to TWC in its use of the
Software and Updates, as may be required by TWC from time to time, and
consistent with this Schedule and the Customer Support Program.
(d) Provide the Updates required hereunder.
2.2 Coordination with Customer Support Program. It is understood that
although the Customer Support Program may be modified by MetaSolv from time to
time in MetaSolv's sole discretion upon not less than 60 days' prior written
notice to TWC, no such modification of MetaSolv's Customer Support Program may
materially, detrimentally affect the maintenance support to be provided to TWC
under this Schedule. It is further understood that (i) descriptions of the
severity level of Incidents as set forth in the Customer Support Program shall
not be modified without the written approval of TWC, and (ii) MetaSolv's
response times for various Incidents shall be as set forth in Section 2.3.
2.3 Reporting and Resolution of Incidents. If TWC believes that there is an
Incident, and TWC is unable to resolve such Incident following Tier 1 and Tier
2 Support, TWC will report such Incident to MetaSolv. Such report shall be
made in accordance with the procedures prescribed under the Customer Support
Program, which shall include a telephonic report to a contact number
designated by MetaSolv, which number shall include a voice mail facility for
leaving a report by voice mail. For purposes of this Schedule, including
without limitation this Section 2.3 and Section 10.1, notification of an
Incident shall be effective when the telephonic report referred to in the
preceding sentence has been made, either to a support person or by voice mail.
MetaSolv shall respond to such Incident in accordance with the procedures set
forth in this Schedule and the Customer Support Program. Notwithstanding
anything in the Customer Support Program to the contrary, MetaSolv will use
reasonable, good faith efforts to (i) deliver a Bypass to a Critical level
Incident within [*] of notification to MetaSolv, (ii) deliver a Bypass to a
High level Incident within [*] of notification to MetaSolv, (iii) deliver a
Fix to a Critical level Incident within [*] of notification to MetaSolv,
Page 4
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
(iv) deliver a Fix to a High level Incident within [*] of notification to
MetaSolv, (v) deliver a Fix to a Medium level Incident with [*] and (vi)
deliver a Fix to Low level Incident with [*]. Notwithstanding anything in the
Customer Support Program to the contrary, MetaSolv shall [*] following
notification to MetaSolv of a Critical or High level Incident until MetaSolv
has delivered either a Bypass or a Fix for such Incident. TWC shall provide
support for MetaSolv's efforts by providing the name and number of one or more
contact persons who shall be available [*] to provide information and other
reasonable assistance to MetaSolv in resolving a Critical and High level
Incidents. MetaSolv shall perform a system test prior to delivering a Fix to
TWC, and where MetaSolv cannot reproduce an Incident in its own test
environment, MetaSolv shall test the Fix in TWC's environment prior to
delivering the Fix to TWC.
2.4 Support Line. MetaSolv shall provide TWC with remote access to
MetaSolv's personnel to assist TWC with respect to use of the Software and to
report Incidents in the form of (a) a telephone service line, (b) electronic
mail service and (c) pagers for its support staff. Where TWC purchases and
pays for 7x24 Support under this Schedule, MetaSolv shall make qualified
personnel available 24 hours per day, seven days per week during the term of
this Schedule to fulfill its obligations under this Section.
2.5 Personnel. MetaSolv shall appoint a support manager who shall oversee
MetaSolv's compliance with the terms and conditions of this Schedule and shall
notify TWC of such appointment. Workers that MetaSolv furnishes for the
Services shall be qualified to perform the tasks and functions for which they
are assigned in a skillful manner.
2.6 Telecommunications Link. For Software or equipment located on TWC's
premises, MetaSolv shall, with TWC's authorization, access TWC's system and
the Software directly, via telecommunications link, to isolate and Fix
Incidents in the Software or to assist TWC with its use of the Software. TWC
shall furnish MetaSolv any telecommunications link agreed to as part of the
Original Statement of Work, and access to TWC computer facilities for the time
reasonably required by MetaSolv to furnish the Services hereunder.
2.7 On-Site Support. For Software located on TWC's premises, MetaSolv may,
where TWC and MetaSolv mutually agree, deploy a MetaSolv software support
representative to TWC's site to isolate and Fix any Incidents or assist TWC
with its use of the Software which can not be resolved timely through a
telecommunications link.
Page 5
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
2.8 Support for Designated Operating Environment. MetaSolv shall make
reasonable, good faith, and timely efforts to maintain compatibility between
the Software and current, supported releases of all third party software and
any required engineering changes to any hardware, peripherals or other
equipment in the Designated Operating Environment. In no event shall TWC be
required, in order to maintain compatibility with the Software, to use a
release of any third party software or a version of any hardware, peripherals
or other equipment in the Designated Operating Environment which is no longer
supported by a reasonably available commercial support vendor, where such
unsupported use would be unreasonable or imprudent.
2.9 Updates. MetaSolv shall provide Updates to TWC as generally provided to
MetaSolv's end-user customers of the TBS Software under the Customer Support
Program and as otherwise required pursuant to this Schedule. During the term
of this Schedule, MetaSolv shall notify TWC of all Updates which include
Fixes, and where the information is available shall take reasonable efforts to
do so as soon as possible, preferably at least [*] prior to release. Such
notice shall describe the Incidents known to be corrected and the criticality
of each. During the term of this Schedule, and in consideration of the fees
and charges to be paid by TWC under this Schedule, all Updates which include
Fixes shall be made available to TWC at no additional charge. In addition,
during the term of this Schedule, and when the information is available to
MetaSolv, MetaSolv shall take reasonable efforts to notify TWC as soon as
possible, and preferably at least [*] prior to release, of all Updates which
provide additional features or functionality not described in or otherwise
required pursuant to the Documentation. Such notice shall include a
description of such additional features or functionality. During the term of
this Schedule, and in consideration of the fees and charges to be paid by TWC
under this Schedule, all such Updates providing additional features or
functionality shall be made available to TWC at no additional charge. MetaSolv
shall support each new Update for a minimum of six months from the release
date of the next subsequent Update. MetaSolv shall use its commercially
reasonable efforts to set forth and continually update a schedule listing all
Updates to be released by MetaSolv during the term of this Schedule along with
the estimated dates of such releases. Where MetaSolv releases Updates without
giving the requisite notice pursuant to this Section, and where TWC is thereby
made unable, or materially disadvantaged, in its efforts to implement such
Update, then MetaSolv shall continue to support the previously existing
release of the Software for an additional time as reasonably necessary to
permit TWC in its implementation efforts to overcome MetaSolv's failure to
give requisite notice. All Updates shall be deemed to be included within the
Software to which they relate and shall thus be deemed to have been provided
to TWC pursuant to the Software License Agreement, and there shall be no
increase in the license fee or development fee payable with respect thereto.
As soon as practicable, TWC shall install each Update in accordance with the
instructions provided by MetaSolv, and with onsite or telephone support from
MetaSolv as is
Page 6
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
mutually agreed. MetaSolv represents and warrants that it shall take
reasonable, good faith efforts to assist TWC in minimizing any interference
that such installation may cause to TWC's operations. Notwithstanding the
foregoing, TWC shall not be required to install any Update which TWC
reasonably believes will have a material adverse effect on the Software and
TWC's failure to install such Update will not affect MetaSolv's obligations to
maintain the Software in conformity in all material respects with the
Documentation.
2.10 Recurring Incidents. If TWC notifies MetaSolv that an Incident is
recurring, then MetaSolv promptly shall perform a root cause analysis to
determine the cause of such recurring Incident. Within [*] of such notice,
MetaSolv shall provide TWC with a written copy of its analysis, which shall
include an action plan containing a reasonably detailed description of
corrective action to be taken by MetaSolv and the dates by which such
corrective action shall be completed, all subject to the reasonable approval
of TWC. MetaSolv shall make reasonable, good faith and timely efforts to Fix
such recurring Incident in accordance with its action plan. MetaSolv's
obligation to Fix recurring Incidents is in addition to its obligation to Fix
nonrecurring Incidents in accordance with this Article, and nothing contained
in this Section shall relieve MetaSolv of such obligations. Where MetaSolv
correctly concludes and informs in writing TWC that a recurring Incident
reported by TWC under this Section is attributable to a Non-Programming Error,
or is otherwise not attributable to an error or failure in the Software or
User Manuals and Information, and where TWC nevertheless requires the root
cause analysis to be performed, then MetaSolv may require a Services Order to
be signed on a time and materials basis under the Customer Support Program, at
the rates specified in the Software Development Agreement, before proceeding.
If such root cause analysis correctly confirms that the recurring Incident is
attributable to a Non-Programming Error, or is otherwise not attributable to
an error or failure in the Software or User Manuals and Information, then TWC
shall pay the time and materials fees as specified in the Services Order.
2.11 Additional User Manuals and Information. MetaSolv shall provide with
each Update such User Manuals and Information as are necessary for the
installation of the Update and the effective operation and use of the Software
following the installation of the Update.
2.12 Status Review Meetings. During the term of this Schedule, MetaSolv
shall inform TWC on a monthly basis, or on a more frequent basis if reasonably
requested by TWC, of the status of the Services being provided hereunder, the
resolution of any Incidents reported by TWC, and such other matters as TWC may
reasonably require from time to time.
2.13 Disaster Recovery Plan and Business Continuity Procedures. TWC and
MetaSolv have identified by mutual agreement, and MetaSolv shall implement and
Page 7
* Certain confidential information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
<PAGE>
keep in effect, a disaster recovery plan covering MetaSolv's operations
under this Schedule. MetaSolv represents and warrants that the Software and
related User Manuals and Information will sufficiently describe the Software
and its attributes to support the design and implementation of a disaster
recovery plan and business continuity procedures by persons reasonably
experienced in disaster recovery and business continuity planning for
information technology systems, considering the following criteria:
documented disaster recovery/contingency plans, backup power for critical
systems, established backup cycles for critical records, safe and secure
storage for confidential information and/or records, off-site storage for
backups to ensure restoration capability, detailed callout and escalation
lists for support and management personnel, adequate protection from
environmental problems, documented procedures to respond to and recover from
common local environmental problems, redundancies in equipment and
procedures for the transfer of data and use of equipment at an alternative
facility, and such other areas as deemed necessary by TWC. MetaSolv does not
represent itself to be expert in such disaster recovery or business
continuity planning. Any consulting services provided by MetaSolv concerning
the attributes of the Software in relation to such a project, other than in
response to Incidents as defined in this Schedule, would be considered
"Additional Services" under Section 2.14 below.
2.14 Additional Services. Any services provided in addition to the Services
("Additional Services") will be billed to TWC at the rates for such services
as set forth in the Software Development Agreement. Additional Services will
not be provided unless agreed to in writing by both parties.
2.15 Non-Application to Developments. This Schedule applies to the Software,
as such term is defined in the Software License Agreement; and not to
Developments, as such term is defined in the Software Development Agreement,
prior to the Final Acceptance of such Developments in accordance with the
terms of the Software Development Agreement. The cost, if any, of what would
otherwise be Updates relating to Developments prior to Final Acceptance, and
the installation thereof, shall be as set forth in a Statement of Work in
the Software Development Agreement.
3. SUPPORT LEVELS:
3.1 Responsibilities. TWC shall be responsible for providing Tier 1 and Tier
2 Support with respect to the Software. MetaSolv shall be responsible for
providing Tier 3 Support. MetaSolv's Tier 3 Support shall be provided to a
single point of contact (or one or more designated alternatives) as
specified from time to time in writing by TWC.
3.2 Failure to Provide Tier 1 and Tier 2 Support.
Page 8
<PAGE>
(a) It is the intention of the parties that by proper performance of Tier 1
and Tier 2 Support, TWC will limit the number of Non-Programming Errors
reported by TWC to MetaSolv as Incidents pursuant to this Schedule. MetaSolv
shall monitor and provide monthly reports to TWC setting forth the total
number of Incidents reported to MetaSolv during each calendar month, broken
down between Critical and High severity level Incidents and Medium and Low
severity level Incidents, the number of such Incidents which were Non-
Programming Errors and whether the month was a Deficient Month (as defined
herein). Such report shall be provided for each calendar month no later than
five days after the last day of such month.
(b) The parties shall track each High or Critical level Incident reported by
TWC in each calendar month to determine the number of Defective Incidents
reported in such month. MetaSolv shall promptly notify TWC whenever MetaSolv
has formed a reasonable belief that a reported Incident is a Defective
Incident. MetaSolv shall be entitled to charge TWC on a time and materials
basis at the rates set forth in the Software Development Agreement for time
spent by MetaSolv in connection with the investigation and repair of [*]
Defective Incidents in any calendar month. Such charges shall apply only with
respect to Defective Incidents which are reported by TWC after TWC has
received notice of what proves to be the [*] Defective Incident reported by
TWC in the calendar month. Notwithstanding the foregoing, MetaSolv shall not
charge TWC for the first man-hour spent by MetaSolv in the investigation and
repair of any Defective Incident. In addition, charges shall not commence
with respect to a Defective Incident until such time as MetaSolv has notified
TWC that it has formed a reasonable belief that the reported Incident is a
Defective Incident. Charges shall continue to accrue with respect to any such
Incident unless and until such time as TWC notifies MetaSolv to cease working
on such Incident. In no event will TWC be charged with respect to an Incident
which is not a Defective Incident.
(c) If there are [*] Deficient Months in any period of [*], MetaSolv may
declare, by written notice to TWC, a Tier 1/Tier 2 Support Failure. Following
the declaration of a Tier 1/Tier 2 Support Failure, MetaSolv shall be
entitled to charge TWC on a time and materials basis at the rates set forth
in the Software Development Agreement for all time spent in connection with
the investigation and repair of all Defective Incidents. If MetaSolv declares
a Tier 1/Tier 2 Support Failure and a second Tier 1/Tier 2 Support Failure
occurs within [*] thereafter (provided that none of the Deficient Months
which were considered in determining the first Tier 1/Tier 2 Support Failure
shall be considered in determining the second Tier 1/Tier 2 Support Failure )
then MetaSolv may declare, by written notice to TWC, a Second Tier 1/Tier 2
Support Failure. Following the declaration of a Second Tier 1/Tier 2 Support
Failure, MetaSolv shall be entitled to charge TWC on a time and materials
basis at two times the rates set forth in the Software Development Agreement
for all time spent in connection with the investigation and repair of all
Defective Incidents. Following the declaration of
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a Tier 1/Tier 2 Support Failure, MetaSolv may continue to invoice TWC for
Incidents at the rates specified herein until such time as there have been
[*], after which MetaSolv shall no longer be entitled to charge for such
services pursuant to this Section 3.2(c) unless and until another Tier 1/Tier
2 Support Failure is declared.
(d) For purposes of this Agreement, a calendar month shall be a "Deficient
Month" if TWC reports more than [*] Defective Incidents in such month and the
number of Defective Incidents reported to MetaSolv during the month exceeds
the Triggering Number (as defined herein). For purposes of this Section, the
"Triggering Number" for any calendar month shall be a percentage of the
Incidents reported as Critical or High severity level Incidents during such
month, determined as follows: (i) if any day of the calendar month is within
[*] after the Acceptance of Final Report for Pilot (Key Deliverable #8) as
described in the Original Statement of Work, or is within [*] after the
implementation of a major release of the Software (that being a release
designated by a change either to the left of the decimal point, such as from
3.4 to 4.0, or by a change in the number immediately to the right of the
decimal point, such as from 3.2 to 3.3), then the Triggering Number shall be
[*] of the Incidents reported to MetaSolv as Critical or High severity level
Incidents during the month; (ii) if subparagraph (i) does not apply, but any
day of the calendar month is within [*] after the Acceptance of Final Report
for Pilot (Key Deliverable #8) as described in the Original Statement of
Work, then the Triggering Number shall be [*] of the Incidents reported to
MetaSolv as Critical or High severity level Incidents during the month; and
(iii) if neither subparagraph (i) nor subparagraph (ii) apply, then the
Triggering Number shall be [*] of the Incidents reported to MetaSolv as
Critical or High severity level Incidents during the month.
(e) Section 3.2(b) shall not apply during any period in which a Tier 1/Tier 2
Support Failure is in effect, and any charge to TWC in connection with a
Defective Incident reported during any such period shall be determined
pursuant to Section 3.2(c). This Section 3.2 sets forth the exclusive
remedies available to MetaSolv with respect to a failure by TWC to properly
perform Tier 1 and Tier 2 Support.
3.3 Exclusion for Non-Programming Errors. MetaSolv shall not be responsible
for correcting Incidents that MetaSolv can demonstrate result from Non-
Programming Errors. Upon request, MetaSolv shall assist TWC in correcting
Incidents which result from Non-Programming Errors on a time and materials
basis at the rates set forth in the Software Development Agreement.
4. TERM:
4.1 Term and Availability of Services. The term of this Schedule shall
commence upon the execution of the Master Agreement and shall continue in
effect so long as
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TWC continues to pay the Annual Support Fee (as such term is defined in
Section 5.1), subject to earlier termination as set forth in Articles 5, 6 or
31 of the Master Agreement. MetaSolv shall make the Services available to
TWC, at TWC's option, prior to and during the Fixed Price Support Period in
accordance with the terms and conditions of this Schedule. After the Fixed
Price Support Period, MetaSolv shall make the Services available to TWC, at
TWC's option, in accordance with the terms and conditions of this Schedule so
long as (a) TWC's license for the Software (as such term is defined in the
Software License Agreement) remains in effect and (b) MetaSolv offers
maintenance and support services (such as software installation, maintenance,
training, evaluation or consultation) generally to its TBS product end-user
customers, and provided that this Schedule has not been previously terminated
by MetaSolv pursuant to Articles 6 or 31 of the Master Agreement.
4.2 Reinstatement of Services. If TWC elects to terminate this Schedule and
subsequently requests that MetaSolv again provide the Services at a time when
MetaSolv still offers maintenance and support services generally to its TBS
product end-user customers, then MetaSolv shall commence providing the
Services upon TWC's payment to MetaSolv of (y) the then current Annual
Support Fee, plus a reinstatement fee equal to the amount that TWC would have
paid for maintenance support fees under this Schedule during the period of
time in which TWC was not receiving such Services. Upon reinstatement of the
Services, MetaSolv shall provide all Updates to TWC that were released during
the period in which the Services were not being provided to TWC by MetaSolv.
If additional Services outside of MetaSolv's then standard Maintenance
Support program are required to effect the implementation of then current
Updates, TWC shall pay MetaSolv for such additional Services on a time and
materials basis at the rates set forth in the Software Development Agreement.
5. FEES AND CHARGES:
5.1 Fees. The Services described herein shall be provided at no additional
charge during the Warranty Period. Upon expiration of the Warranty Period, in
consideration of the Services, TWC shall pay to MetaSolv an "Annual Support
Fee" as follows:
(a) During the Fixed Price Support Period, the Annual Support Fee shall be
[*], subject, however, to adjustment in accordance with Section 5.1(b). [*]
(b) Software component licenses purchased by TWC in addition to (i) the
initial order described in Schedule 1 of the Software License Agreement, and
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(ii) Developments as described in the Software Development Agreement, shall
be eligible for maintenance and support pursuant to this Schedule. MetaSolv
shall provide support for such additional software at no additional charge
during the Warranty Period for such software. Thereafter, the Annual Support
Fee under this Schedule with respect to such additional software, commencing
upon the expiration of the warranty period for such additional software,
shall be [*] of the license fees for such additional software, reduced
proportionately to reflect a partial year of coverage. The Annual Support
Fees for such additional software shall not increase to greater than [*] of
the license fees for such additional software during the Fixed Price Support
Period. The term "Software component licenses" as used in this Section 5.1(b)
does not include additional Named User licenses.
(c) MetaSolv may increase the total aggregate Annual Support Fees payable
under this Agreement for each annual support period beginning after the Fixed
Price Support Period by the greater of (i) [*] of the license fees paid with
respect to additional Named User licenses purchased by TWC during the prior
annual support period (provided, however, that for the first annual support
period beginning after the Fixed Price Support Period, the maximum increase
under this item (c)(i) may be up to [*] of the license fees paid with respect
to additional Named User licenses purchased by TWC during the entire Fixed
Price Support Period) and (ii) the percentage increase in the [*] over the
immediately preceding annual support period.
5.2 Invoicing. Subject to Section 12.3 of the Software Development Agreement,
MetaSolv shall invoice TWC annually on a calendar year basis, in advance not
more than 30 days prior to the initial three annual support periods, and
within 30 days after the commencement of each annual support period
thereafter, and TWC shall timely pay such invoices in accordance with the
Master Agreement. Invoices for periods of less than one year of Services
caused by normalizing the applicable annual support period to a calendar year
billing schedule shall reflect the pro-rata amount of such Annual Support
Fee.
5.3 [*]
6. TERMS AND CONDITIONS OF SERVICE: MetaSolv's obligations to provide the
Services shall not be voided by TWC's modification of the Software or
combination of the Software with other software or equipment outside of the
Designated Operating Environment so long as MetaSolv can reasonably discharge
its obligations either
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(a) without a material increase in time or cost notwithstanding such
modifications or combinations or, (b) following their removal by TWC. This
Schedule shall not apply with respect to modifications made to the Software by
TWC, including but not limited to those following TWC's exercise of its right to
acquire a source code license to the Software, except as specifically agreed by
MetaSolv in writing.
7. API INFORMATION: Promptly upon TWC's request, which may be made at any time
and from time to time during the term of this Schedule, MetaSolv shall provide
TWC or one or more third parties designated by TWC with such information (the
"API Information") regarding interface specifications and protocols for the
Software as is necessary or desirable for TWC or such third party to design,
develop and implement applications programming interfaces between the Software
and other software applications. It is the intention of the parties that
MetaSolv shall provide such information as is necessary to develop such
applications programming interfaces between the Software and third party
software applications, but not to modify the functionality of the Software
itself. MetaSolv hereby grants to TWC a non-exclusive, irrevocable, perpetual,
fully-transferable, royalty-free license, to use, copy, disclose and modify such
API Information for the limited purpose of designing, developing, implementing
and maintaining applications programming interfaces between the Software and
other software applications, solely for TWC's and its Affiliates' internal use,
and otherwise under the license restrictions for Software under the Software
License Agreement. During the term of this Schedule, upon request from TWC,
MetaSolv shall provide technical support and consultation to assist TWC and
third parties in understanding and applying the API Information. Such technical
support and consultation shall be provided at the rates specified in the
Software Development Agreement. Upon request, MetaSolv shall negotiate in good
faith with TWC as to whether and in what manner MetaSolv itself would develop
applications programming interfaces as identified by TWC at such rates. Such
development by MetaSolv would be conducted pursuant to such terms and conditions
as mutually agreed upon by TWC and MetaSolv, which terms and conditions would be
substantially similar to those set forth in the Software Development Agreement.
Such negotiations would include whether MetaSolv would support the applications
programming interfaces developed by it in future releases of the Software.
8. WARRANTIES:
8.1 Services Warranties. MetaSolv warrants that the Services shall consist of
reasonable, timely efforts to cause the Software to conform in all material
respects to the warranties and requirements set forth in the Master
Agreement, including all Schedules thereto, and the Documentation. MetaSolv
warrants that the Services shall be performed in a professional manner in
accordance with generally prevailing or higher standards in the industry, and
in accordance with this Schedule and the Master Agreement. The Services shall
conform in all material respects to the requirements of this Schedule.
MetaSolv shall use a sufficient number of qualified
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<PAGE>
and skilled personnel to perform the Services in accordance with this
Schedule and the Master Agreement.
8.2 THE WARRANTIES CONTAINED IN THIS SCHEDULE, THE MASTER AGREEMENT, AND ALL
OF THE SCHEDULES THERETO, ARE EXCLUSIVE. THEY ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ARISING BY
STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR USAGE OF TRADE.
9. CRITICAL AND HIGH INCIDENT MANAGEMENT PROCESS; RELATION TO ACCEPTANCE: Where
definitions of Acceptance Criteria under Schedules 1 and 2 of the Master
Agreement require that no Critical or High level Incidents remain open, MetaSolv
shall be required to meet such Acceptance Criteria as stated, and not merely by
assigning resources and following management processes in conformity with this
Schedule and the Customer Support Program.
10. LIQUIDATED DAMAGES:
10.1 Deadlines for Bypass or Fix. If MetaSolv fails to provide a reasonably
effective Bypass or Fix to one or more Critical or High severity level
Incidents within [*], in the case of a Critical severity level Incident, or
[*], in the case of a High severity level Incident, after receiving notice
from TWC of such Incident in accordance with Section 2.3, together with all
support required pursuant to Section 2.3 and all information reasonably
required by the Customer Support Program, then MetaSolv shall provide
credits to TWC as liquidated damages in accordance with the following
schedule for each day or portion thereof after such [*] period, as the case
may be, until MetaSolv provides a reasonably effective Bypass or Fix to such
Critical or High severity level Incident:
[*]
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Notwithstanding the preceding table, the maximum amount of credits which TWC
may accrue in any support period shall not exceed [*] of the Annual Support
Fee charged for such period. For purposes of the preceding sentence the
Warranty Period shall be included within the first annual support period. In
addition, notwithstanding anything in this Schedule to the contrary, no
liquidated damages shall accrue under this Section 10.1 with respect to any
day which is in a Deficient Month as determined under Section 3(d) above.
MetaSolv acknowledges that the credits available to TWC hereunder are (a)
liquidated damages, and not a penalty, and (b) reasonable and not
disproportionate to the presumed damages to TWC in lost revenues and profits
from a failure by MetaSolv to correct a Critical or High severity level
Incident within [*]. TWC may offset the liquidated damage against unpaid
Annual Support Fees as they become payable hereunder. The amount of any
credits which have not been used prior to the termination of this Schedule
may be applied by TWC against the purchase price of a Source Code license in
accordance with Schedule 1 no later than [*] after such termination.
Provided that MetaSolv has exercised diligent, good faith, reasonable and
timely efforts to provide the Services in accordance with this Schedule and
the Customer Support Program, TWC shall not be entitled to recover any
further losses, damages or expenses incurred by TWC as a result of a failure
by MetaSolv to timely provide a reasonably effective Bypass or Fix to one or
more Critical or High severity level Incidents. TWC's right to receive
liquidated damages under this Schedule shall in no way affect TWC's right to
terminate this Schedule or the Master Agreement, or any portion hereof or
thereof, and to receive a refund of the pro-rata unearned portion for that
year of any pre-paid Annual Support Fee. Upon termination of this Schedule
by TWC, MetaSolv shall be relieved of its obligation to pay liquidated
damages which might have accrued following the date of termination.
10.2 Access to Source Code. If MetaSolv fails to provide a reasonably
effective Bypass or Fix to one or more Critical or High severity level
Incidents within [*] after receiving notice from TWC of such Incident
together with all information reasonably required by the Customer Support
Program, then, in addition to the liquidated damages remedy set forth in
Section 10.1, TWC shall be entitled to access the Source Code for the
Software, without charge, in accordance with the Source Code Escrow
Agreement established pursuant to the Software License Agreement. Such
access shall be for the limited purpose of developing a Fix to any such
Critical or High severity level Incident, and once such a Fix has been
developed, tested and implemented, either by TWC or by MetaSolv, TWC shall
return the Source Code and all copies thereof and materials relating thereto
to the escrow agent. In accordance with Article 6, this Schedule shall not
apply with respect to future support and maintenance of any Fix provided by
TWC after accessing the Source Code in accordance with this Section;
provided, however, that unless MetaSolv agrees to provide support and
maintenance for such Fix in accordance with this Schedule, MetaSolv shall
remain responsible for providing its own Fix for such Incident, which Fix
shall be supported in accordance with this Schedule.
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11. ORDER OF PRECEDENCE: If there is an inconsistency or conflict in the terms
or provisions contained in this Schedule and the Customer Support Program, then
the terms and provisions of this Schedule shall control.
12. SURVIVAL: The first sentence of Section 2.13, Sections 4.2 and 10.1 (with
respect to liquidated damages accrued prior to a termination) and Articles 8, 9,
11 and 13 shall survive the completion, expiration, termination or cancellation
of this Schedule.
13. ENTIRE AGREEMENT: This Schedule, together with the Master Agreement and all
Orders, Statements of Work, exhibits and attachments hereto shall constitute the
entire agreement between the parties with respect to the subject matter of this
Schedule.
14. EXHIBITS: The following is a list of Exhibits attached to this Schedule:
Exhibit A - Customer Support Program
The parties intending to be legally bound have caused this Schedule to be
executed by their duly authorized representatives.
Time Warner Communications MetaSolv Software, Inc.
Holdings, Inc.
/s/ Stephen A. McPhie /s/ Michael J. Watters
__________________________________ __________________________________
(Authorized Signature) (Authorized Signature)
Stephen A. McPhie Michael J. Watters
__________________________________ __________________________________
(Print or Type Name of Signatory) (Print or Type Name of Signatory)
President Chief Executive Officer
__________________________________ __________________________________
(Title) (Title)
May 7, 1998 May 15, 1998
__________________________________ __________________________________
(Execution Date) (Execution Date)
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<PAGE>
EXHIBIT A
TO
SOFTWARE SUPPORT AND MAINTENANCE AGREEMENT
------------------------------------------
MetaSolv Customer Support Program
Page 17
<PAGE>
[LOGO OF METASOLV APPEARS HERE]
MetaSolv(R)
Software
MetaSolv Software, Inc.
Customer Support Program
________________________________________________________________________________
MetaSolv Software Confidential 05/06/98
(C)1998 MetaSolv Software, Inc.
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Section 1: Customer Support Overview.................................... 3
Customer Service Support Center.............................. 3
Definitions.................................................. 5
Issue Categorization......................................... 7
Section 2: Issue Management Process..................................... 8
Issue Reporting Procedures................................... 8
Determine Priority........................................... 9
Section 3: Critical and High Incident Management........................ 11
Section 4: Incident Resolution Management............................... 12
Section 5: Enhancement Management Process............................... 13
Appendix A: Warranty and Contract Disclaimer............................. 14
</TABLE>
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Section 1: Customer Support Overview
Introduction
At MetaSolv, our goal is to deliver telecommunications software which meets or
exceeds established standards of performance, quality and protocol required to
achieve our customer's business objectives. In order to meet customer
satisfaction objectives, MetaSolv has designed and implemented a Customer
Support Program.
The purpose of this document is to clarify MetaSolv's support services and
processes; and each organization's responsibilities for managing to these
processes. (See also the Warranty and Contract Disclaimer at the end of this
brochure.)
Customer Service Support Center
A Customer Service Support Center has been established at MetaSolv to facilitate
the reporting, tracking and resolution of Issues which relate to MetaSolv's
software products. A (1-888) hotline has been installed for the customer's
convenience and is staffed Monday through Friday, 7:00 a.m. to 6:00 p.m.
(Central Standard Time).
After-hours, weekend and holiday support services are available on a time and
materials basis and must be scheduled through the Customer Support Service
Center.
MetaSolv's objective is to insure that, during normal working hours, dedicated
LEVEL 1 support specialists will be available to answer customer calls.
Customers should expect that, on average, no more than 2% of all incoming calls
reach voice mail in lieu of a support specialist. In the event a call reaches
voice mail during regular working hours, the customer should normally expect a
return call in 15 minutes or less.
MetaSolv Contact Numbers
MetaSolv Customer Service Hotline (888) 884-7686
MetaSolv Software Fax (972) 403-8333
MetaSolv Customer Service EMail Address [email protected]
All Issues pertaining to software should be reported through any of these
methods.
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Customer Contact Personnel
- --------------------------
Under MetaSolv's Customer Support Program, the customer designates, in writing,
a single point of contact within the Customer organization. Any changes to the
point of contact, and also a backup point of contact, should also be in writing
to MetaSolv. We recommend that the customers single maintenance contact become
expert in the MetaSolv applications and their business uses, and MetaSolv offers
training in its products to support that goal.
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Definitions
Application Support - Process of answering questions for the customer which
relate to the use of the software from a business
perspective. Application Support under this Program is
not designed to take the place of customer training and
experience, whether in the use of software or in the
business practices that are the subject matter of the
software.
Bug - Same as "Incident", below.
Critical - Priority assigned to an Incident that indicates the
customer cannot perform normal business functions - "I
can't do my job!" (See also the discussion of this
priority under the topic Determine Priority, within.)
Enhancement - Request for MetaSolv to add new functionality to specific
software. Request may come from a customer or from a
MetaSolv product manager.
High - a) Priority assigned to an Incident which has a material
impact on the customer's ability to effectively perform
daily business activities, but, does not prevent the
performance of these duties.
b) A priority assigned to Enhancements which are of major
importance to a customer due to an industry standard or
regulatory change. (See also the discussion of this
priority under the topic Determine Priority, within.)
Incident - Reproducible situation where application software does
not operate as defined in the system documentation or
does not meet the requirements defined within the
functional specification. (Same as "Bug")
Issue - For the purposes of MetaSolv Customer Support, an Issue
is either an Incident, an Enhancement or a request for
non-bug related Application Support.
Low - Priority assigned to an Incident or Enhancement which the
customers and/or MetaSolv would like to correct or add to
the software but do not have a serious impact on the
overall effectiveness of the application - either
positive or negative. (See
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also the discussion of this priority under the topic
Determine Priority, within.)
Medium - Priority assigned to an Incident which has a work-around
or which is a major cosmetic error, and that does not
materially impact the customer's normal business
operations. (See also the discussion of this priority
under the topic Determine Priority, within.)
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Issue Categorization
Issues will be categorized as either Application Support (how-to), an Incident
(bug), or an Enhancement. In addition to category, an Incident or an Enhancement
will be assigned a priority level based on it's category, and based on the
impact to the customer's ability to perform normal business functions. These
priorities are Critical (for Incidents), High (for Incidents and Enhancements),
Medium (for Incidents) and Low (for Incidents and Enhancements).
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Section 2: Issue Management Process
Issue Reporting Procedures
When an Issue is identified, the following procedure will be followed:
1. The customer should report the Issue by either calling the MetaSolv Customer
Service Hotline at (888) 884-7686; sending a fax or an EMail.
2. When reporting the Issue, provide as much of the following information as
possible:
Detailed description of the problem. Include screen prints, data entered and
windows involved.
. Category of Issue - Incident, Enhancement, Application Support.
. Version of software affected by the Issue (i.e. Release 2.55, 3.00.....)
. What area of your business function is affected by the problem? Are
additional areas of the application affected by this Issue?
. What is the impact to daily business - Critical, High, Medium or Low. (See
also the topic Determine Priority, and related Note, below.)
. If the Issue appears to be an INCIDENT, provide all of the above and copies
of error messages, indications, user ID's, window names, expected results and
actual results, etc.
. If the Issue is a request for APPLICATION SUPPORT, a detailed description of
the type of support requested is required and an executed service order.
. If the Issue is an ENHANCEMENT, provide a detailed description of the
requested change, including window names, expected results and sample
information.
1. Issues reported to the MetaSolv Customer Service Support Center will be
logged into the MetaSolv Customer Tracking system. The Issue number will be
given to the customer for future reference.
2. Confirmation Process. MetaSolv's Customer Service Support Center will seek to
confirm any Incident by reproducing it within MetaSolv's own test
environment, and may require the customer's support to reproduce the Incident
within the customer's own environment. Customers will assist in this process
by responding to MetaSolv's reasonable requests for information and for
related technical support required to reproduce the Incident and isolate it
causes. If MetaSolv correctly concludes, and informs the customer, that the
reported Incident is not attributable to an error or defect in the software,
then MetaSolv may require the customer's agreement to be billed on a time and
materials basis before proceeding to further analysis and support on the
reported Issue.
3. Changes in the situation should be reported to the MetaSolv Customer Service
Support Center. Examples would be the problem's symptoms change or the impact
has changed.
4. Based on the category and priority of the Issue, the customer can expect
regular status reports, as defined in this document, during the resolution
process.
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Determine Priority
Priorities are assigned by MetaSolv for all Issues which are Incidents. These
priorities are based on how the Incident affects the customer's ability to
continue to perform normal business activities managed or supported by the
software. Each Incident will fall into one of four classifications:
1. Critical - Requires immediate or same day action. These Incidents are
assigned to MetaSolv personnel for research and resolution as soon as they
have been reported. Incidents placed in this classification meet at least one
of the following conditions:
. The Incident prevents the application from functioning, or
. The Incident prevents user access to a system, or
. The Incident prevents the user from doing specific job functions, or
. The Incident prevents the timely creation of output or creates output with
significant errors.
1. High - Requires short term resolution. Resolution schedules for these
Incidents will be developed and reported to the customer. The Incidents
placed in this classification meet at least one of the following conditions:
. It is serious in nature and there is no work-around within the application,
or
. The work-around is cumbersome, or
. The Incident affects all MetaSolv customers, or
. The Incident or a requested Enhancement is the result of a change in industry
standard or a regulatory change (i.e. OBF).
AND:
. The Incident does not prevent the application from functioning.
. The Incident does not prevent the user from access to the system.
. The user is not prevented from continuing normal, business activities.
1. Medium - Medium Incidents are reviewed monthly and ranked for inclusion in
future releases. Medium Incidents not scheduled may be corrected if they can
be included in a planned release or an interim production fix. Incidents
placed in this category do not meet Critical or High criteria, but meet one
or more of the following:
. It is a bug, however, a work-around exists which does not seriously impact
the customer's performance.
. The Incident has been reported by the majority of the customers
. It is a serious cosmetic error but does not jeopardize the integrity of the
application nor impact the customer's ability to use the software as
required.
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1. Low - Low Incidents are reviewed quarterly and ranked for inclusion in future
releases. Low Incidents not scheduled may be corrected if they can be
included in a planned release. Incidents placed in this classification do not
meet Critical, High or Medium criteria, but meet one or more of the
following:
. The Incident has been reported by the majority of the customers.
. Minor cosmetic errors -may be considered for a future release.
NOTE: The prioritization of all Incidents and development schedules is set by
MetaSolv. At the customer's request, an Incident's priority can be reviewed for
accelerated resolution or escalation, if the customer's business environment has
changed.
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Section 3: Critical and High Incident Management Process
After the initial information processing common to all Incidents has been
completed, the following process will be used to resolve Incidents.
Critical
If an Incident is considered Critical, resources will be immediately assigned to
the Incident and not removed until the customer can resume normal business
activities, either through a software fix, work-around or advanced Application
Support.
If the short-term resolution is a work-around, a schedule for the software fix
will be developed and reported to the customer.
For all Critical Incidents, the customer will receive, at a minimum, a daily
report on the status of the resolution until the customer has resumed normal
business activities. More frequent status reviews may be scheduled if required
by the situation.
High
If the Incident is considered High, resources will immediately be assigned to
the Incident for review. If it is determined the only resolution is a software
fix, it will be added to the development schedule for the specific release.
Whenever practical, an interim release will be sent to the customer which will
include the software fix.
If a work-around exists, or the software fix is highly complex, new software may
not be delivered to the customer until the next general software release.
For all High Incidents, the customer will receive, at a minimum, a weekly report
on the status of the resolution. If a work-around exists and the resolution is
to be deferred to the next general release of the software, this will be
reported to the customer and no further status reporting on this item will occur
unless there are changes to the release schedule.
Section 4: Incident Resolution Management
Resolution
MetaSolv Customer Service, working with the client, will establish the criteria
that determines whether an Incident can be considered "resolved" or "closed".
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Perform the required software changes necessary to implement the solution.
Update system documentation as required.
Create installation instructions for the customer, if required.
MetaSolv perform Quality Assurance Test on all deliverables.
Deliver software to customer.
Testing
Customer testing is required to determine if the solution has resolved the
Incident as defined.
Discrepancies or new "bugs" discovered should be reported to MetaSolv as a
problem associated with the original Incident number.
Document
MetaSolv Customer Service will ensure that the resolution and actions taken are
completely documented in the Incident management system for future "searches"
and statistical reporting.
Appropriate software documentation will be revised as required to document
software changes.
Reporting
An electronic report will be produced monthly which will list all the customer's
new and unresolved open Incidents and any status changes since the last report.
The report will also list all Issues which have been resolved since the last
report.
Critical and High Issues in process will be reported on daily and/or weekly.
Depending upon the nature of the Issue, this report may be a conference call,
electronic memo or on-site meeting, as mutually agreed upon by MetaSolv and the
customer.
Onsite Support
. Onsite support is rarely necessary under the Customer Support program, nut is
provided by MetaSolv if necessary to correct a defect or error in the
software. If MetaSolv correctly concludes, and informs the customer, that a
reported Incident is not attributable to an error or defect in the software,
then MetaSolv may require a Services Order to be signed on a time and
materials basis before proceeding to any onsite support activities or other
further analysis and support concerning the reported Issue.
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Section 5: Enhancement Management Process
If the customer requests an Enhancement to the software, the following steps
will be performed:
Define Enhancement
MetaSolv Customer Service will work with the client to clearly define the
proposed Enhancement. A detailed functional specification is required to enable
MetaSolv to accurately prepare the development plan and cost estimate. MetaSolv
may require a signed Service Order to support time and materials billing for
Enhancement definition work.
If an Enhancement has been requested by other customers, it will be reported to
the User Group and MetaSolv Product Managers as having multiple sponsors.
Priority
Each Enhancement will receive a priority of High or Low, as designated by the
customer. Enhancement requests not scheduled by MetaSolv for inclusion in the
next release will be presented to the User Group for ranking. Every effort will
be made by MetaSolv to include the five highest ranked in the next scheduled
software release.
1. High - Requester requires this Enhancement due to changes in industry
standards or regulatory requirements. The Enhancements in this category
which are approved, either as items required by all customers or a custom
Enhancement for an individual organization, will be included in the next
scheduled software release.
With MetaSolv management approval, some custom Enhancements may generate an
interim release based on industry or customer business requirements.
2. Low - User Group Ranking will determine whether it will be included in the
next scheduled release or deferred. Minor Enhancements may also be
considered for inclusion in a future release.
What You Can Expect
MetaSolv may find that certain efficiencies can be gained by combining multiple
Enhancements, regardless of priority. Also, Low Enhancements may be included
even if not selected by the user group if they apply to an application scheduled
for revision.
A monthly New and Open Enhancement Requests Report will be produced. The report
will indicate whether the Enhancement has been approved or declined. If
declined, the request will be archived, and no longer appear on future reports.
If an Enhancement request is declined, the customer can request a custom
solution, to be paid for by the customer on a time and materials basis. However,
MetaSolv is under no obligation to develop custom solutions which do not meet
current product or industry standards.
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