EX-10.15.1



 



EXHIBIT 10.15.1



CONFIDENTIAL TREATMENT REQUESTED



MSA No.: MSAX063015TPS




MASTER SERVICES AGREEMENT




BETWEEN




EMBARQ MANAGEMENT COMPANY




AND




SYNACOR, INC.




			
	 	 	 
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TABLE OF CONTENTS




	 	 	 	 	 
	1.0 DEFINITIONS
	 	 	6	 
	 
	 	 	 	 
	2.0 SERVICES
	 	 	8	 
	 
	 	 	 	 
	2.1 Scope of Services
	 	 	8	 
	 
	 	 	 	 
	2.2 No Volume Commitment
	 	 	8	 
	 
	 	 	 	 
	2.3 Supplier’s Performance
	 	 	8	 
	 
	 	 	 	 
	2.4 Limitations
	 	 	9	 
	 
	 	 	 	 
	2.5 Acceptance of Services and Deliverables
	 	 	9	 
	 
	 	 	 	 
	2.6 Changes to Services
	 	 	9	 
	 
	 	 	 	 
	2.7 Restrictions
	 	 	9	 
	 
	 	 	 	 
	3.0 EMBARQ RESPONSIBILITIES
	 	 	10	 
	 
	 	 	 	 
	3.1 Embarq Support; Supplier Status
	 	 	10	 
	 
	 	 	 	 
	3.2 Materials and Equipment
	 	 	10	 
	 
	 	 	 	 
	4.0 COMPENSATION and INVOICING
	 	 	10	 
	 
	 	 	 	 
	4.1 Compensation
	 	 	10	 
	 
	 	 	 	 
	4.2 Expenses
	 	 	11	 
	 
	 	 	 	 
	4.3 Taxes
	 	 	11	 
	 
	 	 	 	 
	4.4 Invoicing, Itemization and Payment Procedures
	 	 	11	 
	 
	 	 	 	 
	4.5 Offset Right
	 	 	12	 
	 
	 	 	 	 
	4.6 No Payment Upon Material Breach
	 	 	12	 
	 
	 	 	 	 
	4.7 Prompt Invoicing
	 	 	12	 
	 
	 	 	 	 
	4.8 Electronic Ordering
	 	 	12	 
	 
	 	 	 	 
	5.0 AFFILIATE TRANSACTIONS
	 	 	13	 
	 
	 	 	 	 
	5.1 Embarq Affiliates’ Purchase Rights
	 	 	13	 
	 
	 	 	 	 
	5.2 Contractual Liability
	 	 	13	 
	 
	 	 	 	 
	5.3 Acquisitions and Divestitures
	 	 	13	 
	 
	 	 	 	 
	6.0 TERM AND TERMINATION
	 	 	13	 






			
	 	 	 
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	6.1 Term
	 	 	13	 
	 
	 	 	 	 
	6.2 Termination for Cause
	 	 	14	 
	 
	 	 	 	 
	6.3 [*]
	 	 	14	 
	 
	 	 	 	 
	6.4 Termination for Financial Instability
	 	 	15	 
	 
	 	 	 	 
	6.5 Transition Services
	 	 	15	 
	 
	 	 	 	 
	6.6 Effect of Termination
	 	 	15	 
	 
	 	 	 	 
	6.7 No Liability
	 	 	16	 
	 
	 	 	 	 
	7.0 Supplier Warranties
	 	 	16	 
	 
	 	 	 	 
	7.1 General Services and Deliverables Warranty
	 	 	16	 
	 
	 	 	 	 
	7.2 Virus Warranty
	 	 	17	 
	 
	 	 	 	 
	7.3 Malicious Technology
	 	 	17	 
	 
	 	 	 	 
	7.4
Compliance with Laws; Permits
	 	 	17	 
	 
	 	 	 	 
	7.5 Subcontracts
	 	 	18	 
	 
	 	 	 	 
	7.6 Certification of Legal Status
	 	 	18	 
	 
	 	 	 	 
	7.7 Breach of Warranty
	 	 	18	 
	 
	 	 	 	 
	8.0 Embarq Warranties
	 	 	18	 
	 
	 	 	 	 
	9.0 PERSONNEL
	 	 	18	 
	 
	 	 	 	 
	9.1
Required Compliance with Agreement
	 	 	18	 
	 
	 	 	 	 
	9.2 Removal
	 	 	19	 
	 
	 	 	 	 
	9.3 Safety
	 	 	19	 
	 
	 	 	 	 
	9.4 Weapons Prohibition
	 	 	19	 
	 
	 	 	 	 
	9.5 Background Checks
	 	 	19	 
	 
	 	 	 	 
	9.6
Security Adherence and Access Rights
	 	 	20	 
	 
	 	 	 	 
	9.7 Investigations
	 	 	20	 
	 
	 	 	 	 
	10.0 CONFIDENTIAL INFORMATION
	 	 	20	 
	 
	 	 	 	 
	10.1 Confidentiality
	 	 	20	 
	 
	 	 	 	 
	10.2 Information Security
	 	 	21	 






			
	 	 	 
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	*	 	CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.







 









 






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	10.3 No Publicity
	 	 	22	 
	 
	 	 	 	 
	10.4 Exception for Legal Process
	 	 	22	 
	 
	 	 	 	 
	10.5 Injunctive Relief
	 	 	22	 
	 
	 	 	 	 
	11.0 Ownership
	 	 	22	 
	 
	 	 	 	 
	11.1 Embarq Property
	 	 	22	 
	 
	 	 	 	 
	11.2 Developed Property 
	 	 	23	 
	 
	 	 	 	 
	11.3 No Implied License
	 	 	23	 
	 
	 	 	 	 
	12.0 Mutual Representations and Warranties
	 	 	23	 
	 
	 	 	 	 
	12.1 Formation; Authorization; Litigation
	 	 	23	 
	 
	 	 	 	 
	12.2 No Violations; Approvals
	 	 	24	 
	 
	 	 	 	 
	13.0 WARRANTY DISCLAIMERS
	 	 	24	 
	 
	 	 	 	 
	14.0 INDEMNITY
	 	 	24	 
	 
	 	 	 	 
	14.1 Supplier’s General Third Party Indemnity
	 	 	24	 
	 
	 	 	 	 
	14.2 Embarq’s General Third Party Indemnity 
	 	 	25	 
	 
	 	 	 	 
	14.3 Supplier’s Intellectual Property Indemnity
	 	 	25	 
	 
	 	 	 	 
	14.4 Embarq Indemnity
	 	 	25	 
	 
	 	 	 	 
	14.5 Indemnification Procedures
	 	 	26	 
	 
	 	 	 	 
	15.0 LIMITATION OF DAMAGES
	 	 	27	 
	 
	 	 	 	 
	16.0 INSURANCE
	 	 	27	 
	 
	 	 	 	 
	16.1 Required Insurance Coverage
	 	 	27	 
	 
	 	 	 	 
	16.2 Certificates of Insurance
	 	 	27	 
	 
	 	 	 	 
	17.0 AUDIT RIGHTS
	 	 	28	 
	 
	 	 	 	 
	17.1 Records Maintenance
	 	 	28	 
	 
	 	 	 	 
	17.2 Procedures
	 	 	28	 
	 
	 	 	 	 
	18.0 DISPUTE RESOLUTION
	 	 	28	 
	 
	 	 	 	 
	18.1 Option to Negotiate Disputes 
	 	 	28	 






			
	 	 	 
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	18.2 Continuing Performance
	 	 	29	 
	 
	 	 	 	 
	18.3 Jury Waiver; Arbitration
	 	 	29	 
	 
	 	 	 	 
	18.4 Legal Fees
	 	 	29	 
	 
	 	 	 	 
	19.0 SUPPLIER DIVERSITY
	 	 	30	 
	 
	 	 	 	 
	19.1 Embarq’s Supplier Diversity Policy
	 	 	30	 
	 
	 	 	 	 
	19.2 Registration
	 	 	30	 
	 
	 	 	 	 
	19.3 Supplier Diversity Schedule
	 	 	30	 
	 
	 	 	 	 
	20.0 GENERAL
	 	 	30	 
	 
	 	 	 	 
	20.1 Notices
	 	 	30	 
	 
	 	 	 	 
	20.2 Business Conduct Code
	 	 	31	 
	 
	 	 	 	 
	20.3 Assignment
	 	 	31	 
	 
	 	 	 	 
	20.4 Independent Contractor
	 	 	31	 
	 
	 	 	 	 
	20.5 Governing Law
	 	 	31	 
	 
	 	 	 	 
	20.6 Waiver and Severability 
	 	 	32	 
	 
	 	 	 	 
	20.7 Survival
	 	 	32	 
	 
	 	 	 	 
	20.8 Marks
	 	 	32	 
	 
	 	 	 	 
	20.9 Remedies
	 	 	32	 
	 
	 	 	 	 
	20.10 Federal Acquisition Regulations; Executive Order 11246
	 	 	32	 
	 
	 	 	 	 
	20.11 Construction
	 	 	33	 
	 
	 	 	 	 
	20.12 Entire Agreement; Modifications; Inconsistencies
	 	 	33	 






			
	 	 	 
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MSA No.: MSAX063015TPS




MASTER SERVICES AGREEMENT



This Master Services Agreement No. MSAX063015TPS (as may be amended from time to time,
the “Agreement”) dated as of November ___, 2006 (“Effective Date”) is between Embarq
Management Company, a Delaware corporation (“Embarq”), and Synacor, Inc., a Delaware
corporation (“Supplier”).




BACKGROUND





	 	A.	 	Supplier is in the business of providing Services and Deliverables to its customers.
	 
	 	B.	 	Embarq is in the business of providing telecommunications services to its
customers including voice, data, video and wireless services.
	 
	 	C.	 	Embarq and Supplier may enter into one or more Orders for Supplier to provide
Services and Deliverables to Embarq.
	 
	 	D.	 	Embarq and Supplier desire to specify the standard terms that will apply to
the Orders.





AGREEMENT





	1.0	 	DEFINITIONS
	 
	 	 	“Agreement” means this Agreement and all schedules, orders and other attachments to
this Agreement.
	 
	 	 	“Certified Diverse Supplier” is defined in subsection 19.1 (Embarq’s
Supplier Diversity Policy).
	 
	 	 	“Claim” is defined in subsection 14.5 (Indemnification Procedures).
	 
	 	 	“Confidential Information” means (a) this Agreement and the discussions,
negotiations and proposals related to this Agreement, (b) any information exchanged in
connection with this Agreement concerning the other party’s business, including without
limitation tangible, intangible, visual, electronic, written, or oral information, whether
received directly or indirectly from the other party or, in the case of Embarq, from Embarq
Customers, and (c) Embarq Data. Confidential Information does not include information that
is: (i) rightfully known to the receiving party before negotiations leading up to this
Agreement; (ii) independently developed by the receiving party without relying on the
disclosing party’s Confidential Information; (iii) part of the public domain or is lawfully
obtained by the receiving party from a third party not under an obligation of
confidentiality; or (iv) free of confidentiality restrictions by agreement of the
disclosing party.
	 
	 	 	[*]





			
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	*	CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED  AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.





 









 





MSA No.: MSAX063015TPS





	 	 	“Deliverables” means documents, technology, data, information and materials
deliverable from Supplier to Embarq and specified in an Order.
	 
	 	 	“Documentation” means all user manuals, reference guides, brochures, installation
manuals, specifications, release notes, error message manuals or other written
documentation provided to Embarq by Supplier and pertaining to the installation, use,
features or performance of the Deliverables.
	 
	 	 	“Effective Date” is defined in the Preamble.

	 
	 	 	“Indemnified Party” is defined in subsection 14.5 (Indemnification Procedures).


	 
	 	 	“Indemnifying Party” is defined in subsection 14.5 (Indemnification Procedures).
	 
	 	 	“Order” means an accepted written or electronic order from Embarq for Services or
Deliverables.
	 
	 	 	“Security Standards” means commercially reasonable security features in all
material hardware and software systems and platforms that Supplier uses to access Embarq’s
Confidential Information.
	 
	 	 	“Services” means the services Supplier provides to Embarq as specified in an Order.
	 
	 	 	“Embarq Affiliate” means (i) any entity, directly or indirectly, Controlling,
Controlled by or under common Control with Embarq or (ii) any direct or indirect wholly
owned affiliate of Embarq Corporation that is subsequently divested.
	 
	 	 	[*]
	 
	 	 	“Embarq Customer” means a user of or subscriber to one or more services or products
offered by Embarq or an Embarq Affiliate.
	 
	 	 	“Embarq Data” means all information collected or developed by (i) Embarq or an
Embarq Affiliate regarding its customers or (ii) by Supplier regarding Embarq customers
(but only in their capacity as Embarq customers), including, under each of the clauses (i)
and (ii) of this definition, location-based information, phone or other identification
numbers issued to Embarq customers, electronic serial numbers, Embarq
customers’ personalization





			
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	*	CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED  AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.






 









 





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	 	 	information and automatic number identification information, and information
described in the Federal Communications Commission’s definition of “Customer Proprietary
Network Information” as set forth in 47 USC Section 222(h)(1) (as amended and
interpreted from time to time).
	 
	 	 	“Embarq Indemnitee” is defined in subsection 14.1 (Supplier’s General Third
Party Indemnity).
	 
	 	 	“Embarq-Owned Property” means all tangible and intangible items or information
that Supplier receives from Embarq or from a third party on Embarq’s behalf, or that is
paid for by Embarq, including Embarq Content (as defined in an applicable Order).
	 
	 	 	“Supplier Affiliate” means (i) any entity, directly or indirectly, Controlling,
Controlled by or under common Control with Supplier.
	 
	 	 	“Supplier Indemnitee” is defined in subsection 14.2 (Embarq’s General Third
Party Indemnity).
	 
	 	 	“Supplier Personnel” means Supplier’s employees, subcontractors or agents who
perform Services, act on Supplier’s behalf or are paid by Supplier in connection with
this Agreement.
	 
	 	 	“Transition Period” means a period of up to 6 months from the effective date of
the termination or expiration of an Order or this Agreement, during which Supplier will
provide Services pursuant to this Agreement.
	 
	2.0	 	SERVICES






	 	2.1	 	Scope of Services.
	 
	 	 	 	This Agreement sets forth the applicable terms for any Order Embarq may issue to
Supplier for Services or Deliverables. Each Order specifically incorporates the terms of
this Agreement. Supplier may provide the Services directly to Embarq, or indirectly
using contractors or other third party vendors or service providers, provided that in
any event, Supplier shall remain responsible for the delivery of the Services or
Deliverables to Embarq in accordance with this Agreement.






	 	2.2	 	No Volume Commitment
	 
	 	 	 	This Agreement does not authorize Supplier to provide or commit Embarq to order any
Services or Deliverables. Embarq’s issuance of an Order by an authorized Embarq agent is
Embarq’s agreement to pay for Services or Deliverables and Supplier’s agreement to
provide the Services or Deliverables, in each case in accordance with this Agreement and
the applicable Order.
	 
	 	2.3	 	Supplier’s Performance.





			
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	 	 	 	Supplier will perform the Services and provide Deliverables in accordance with this
Agreement and the applicable Order, including but not limited to all specified time
requirements. Embarq may inspect Supplier’s performance; however, Embarq’s inspection (or
lack of inspection) will not be an acceptance of Services or Deliverables, a waiver of any
right or warranty, or preclude Embarq from rejecting non-conforming Services or
Deliverables in accordance with any acceptance terms and criteria set forth in an
applicable Order.
	 
	 	2.4	 	Limitations.
	 
	 	 	 	Supplier will not be responsible for, nor liable hereunder in connection with, any failure
in the Services or Deliverables due to or resulting from: (a) any Embarq-Owned Property or
other content provided by or for Embarq; (b) Embarq’s negligence, acts or omissions;
(c) telecommunications or equipment failures outside of Supplier’s facilities;
or
(d) unauthorized access, breach of firewalls or other hacking by third parties of
Supplier’s systems if such hacking or unauthorized access is not a result of Supplier’s
negligence or intentional misconduct.
	 
	 	2.5	 	Acceptance of Services and Deliverables.
	 
	 	 	 	The Order will specify the manner in which Embarq will accept Services and Deliverables, if
applicable.
	 
	 	2.6	 	Changes to Services.
	 
	 	 	 	Embarq may propose changes to Services and Deliverables to be provided by Supplier under an
Order by giving Supplier a change notice. If Supplier believes the schedule or compensation
for Services must be modified to accommodate the proposed change, Supplier must provide
Embarq with a detailed written estimate of the anticipated effect on the schedule and
compensation within 7 business days after receipt of Embarq’s written change notice. If
Supplier timely submits a response, the parties will negotiate a mutually acceptable
resolution. Supplier will not unreasonably withhold, delay or condition its consent to any
change. Following the issuance of a change notice and during the pendency of any
negotiation, Supplier will continue to provide Services and Deliverables as specified in
the Order, unless otherwise directed by Embarq in writing. If Supplier fails to respond to
the change notice within 7 business days, Embarq’s proposed change shall be deemed
rejected.
	 
	 	2.7	 	Restrictions.
	 
	 	 	 	Except as specifically permitted in this Agreement, Embarq shall not, directly or
indirectly: (a) use any of Supplier’s Confidential Information to create any software that
is similar to any of the software provided by Supplier under this Agreement or to provide
any service which performs the same functionality as the Service; (b) decompile,
disassemble, reverse engineer or use any similar means to attempt to discover the source
code of the software or the trade secrets therein, or otherwise circumvent any
technological measure that controls





			
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	 	 	 	access to the software, Deliverables or Services; (c) encumber, transfer, rent,
lease, or time-share the software, Deliverables or Services (except with Embarq
Affiliates, subject to Supplier’s prior written consent), or use them in any service
bureau arrangement or otherwise for the benefit of any third party; (d) access, copy,
distribute, manufacture, adapt, create derivative works of or otherwise modify any
software or Deliverables; (e) remove any proprietary notices; or (f) permit any third
party to engage in any of the acts proscribed in clauses (a) through (e) above.






	3.0	 	EMBARQ RESPONSIBILITIES






	 	3.1	 	Embarq Support; Supplier Status.
	 
	 	 	 	Embarq acknowledges that the continuing performance of certain Services or Deliverables
may depend on its provision of cooperation, assistance, information and access to
Supplier, as specified in an applicable Order. If Embarq fails to timely provide any of
the foregoing as specified in an applicable Order, then Supplier will not be liable for
any corresponding delay in its performance. The parties’ contacts (designated in Section
20.1) are responsible for facilitating communication between Supplier and Embarq
regarding all technical and business matters.
	 
	 	3.2	 	Materials and Equipment.
	 
	 	 	 	Embarq may provide (on its own behalf, or on behalf of its sponsors or advertisers)
certain Embarq-Owned Property, including materials, domain names, Embarq Content and
other information to Supplier as reasonably needed to perform the Services. Embarq
represents and warrants that it has the right to provide all Embarq-Owned Property, and
that use of such Embarq-Owned Property hereunder will not violate Embarq’s obligations
under any other agreement, any laws or regulations. Embarq shall obtain, operate and
maintain in good working order all equipment and ancillary services needed to connect to,
access or otherwise use the Services via the Internet, including without limitation,
modems, servers, hardware, software, network and communication services
(“Equipment”). Embarq and Supplier shall jointly ensure that all Equipment is
compatible with the Services (and, to the extent applicable, any software interface) and
complies with all configurations and specifications set forth in Supplier’s published
documentation. Embarq shall maintain the integrity and security of its Equipment
(physical, electronic and otherwise), account passwords, and Embarq-Owned Materials.






	4.0	 	COMPENSATION AND INVOICING






	 	4.1	 	Compensation.
	 
	 	 	 	Supplier’s rates or prices are in Schedule A or as specified in an Order. For hourly
rate billing, Supplier will submit both itemized and summarized time records with each
invoice. Time records must be broken down in 15-minute increments by individual, task
and billing rate.





			
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	 	4.2	 	Expenses.
	 
	 	 	 	Embarq will reimburse Supplier for travel, living, and other out-of-pocket expenses if the
expenses (i) are authorized in the Order, (ii) are reasonably incurred and documented,
(iii) approved in advance by Embarq if in excess of five hundred dollars ($500), and (iv)
otherwise conform to Embarq’s travel and reimbursement policy set forth below:






	 	(a.)	 	Supplier must submit an expense report to Embarq within 60 days after an
expense is incurred. Supplier must submit, as applicable, the following in its
expense report: (i) passenger flight coupon and travel itinerary, (ii) the original
receipt for meals and parking and toll fees, in excess of $15 (tear tab receipts are
not accepted), and (iii) the original receipt for hotel accommodations, vehicle
rental costs, and fuel costs for rental vehicle usage (regardless of the amount).
	 
	 	(b.)	 	Supplier must use Embarq’s online travel reservation system to book air,
hotel and rental car reservations. If Supplier cannot gain access to Embarq’s online
travel reservation system, or for more complicated trips, Supplier must contact the
Embarq Business Travel Center by calling (800) 347-2639 during regular business
hours. All air travel must be coach or economy.
	 
	 	(c.)	 	Embarq will reimburse Supplier for use of a personal vehicle for business
purposes related to the Services, this Agreement and the Orders at the rate set forth
in the IRS regulations in effect at the time the expense is incurred. Embarq will not
reimburse Supplier for personal expenses, including, without limitation, phone calls
and meals.






	 	4.3	 	Taxes.
	 
	 	 	 	Embarq is responsible for any sales or use taxes and all other taxes duties and fees (other
than taxes assessed on Supplier’s income) assessed on its payment for Services and
Deliverables. Supplier will itemize sales or use taxes separately on Supplier’s invoices. If
Embarq is exempt from taxation for the Services or Deliverables, it will submit an exemption
certificate to Supplier.






	 	4.4	 	Invoicing, Itemization and Payment Procedures.






	 	(a.)	 	Unless otherwise provided in the Order, Supplier will invoice Embarq once per
month. Each invoice will include: (i) Supplier’s name and remit address, (ii) invoice
number, (iii) invoice date, (iv) the name of Supplier’s Embarq contact, (v) the
contract number that Embarq assigned to this Agreement, and (vi) the Embarq business
unit and cost center or the Embarq Order number. The Order may specify additional
invoicing requirements, such as the invoice format and documentation required to
support the fees and expenses.
	 
	 	(b.)	 	If Supplier is unable to submit invoices and receive payments electronically
on the Effective Date, Supplier must enroll for automated invoicing and payment no
later than 30 days after the Effective Date and, in the interim, Supplier must send
invoices to the following address:





			
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Embarq Accounts Payable

P.O. Box 7936

Shawnee Mission, Kansas 66207-0936





	 	If Supplier fails to enroll for automated invoicing and payment within 30 days after the
Effective Date, Embarq may delay payment until Supplier completes enrollment.
	 
	 	(c.)	 	Embarq will pay undisputed amounts within 45 days after receiving Supplier’s
invoice. Embarq will pay disputed amounts, if owed, within 30 days after the dispute
is resolved, provided that for all disputed amounts, Embarq will notify Supplier in
writing within 30 days after Embarq’s receipt of an invoice of any objections, if
any, it has thereon (including a description of the basis for such objection) and
Embarq will work with Supplier in good faith to reconcile amounts for which written
objection has been made.
	 
	 	(d.)	 	Supplier may only invoice Embarq for charges, amounts or fees set forth in
this Agreement or an Order.
	 
	 	(e.)	 	Embarq’s failure to pay undisputed amounts within the period set forth in
Section 4.4(c) above shall be deemed a material breach and Supplier shall have the
right to terminate the Agreement if such breach is not cured within ten (10) business
days of Embarq’s receipt of written notice.






	 	4.5	 	Offset Right.
	 
	 	 	 	In the event a party (“Owing Party”) fails to timely pay any amount owed to the other party
(“Owed Party”) under this Agreement or any Order, Owed Party may offset any such
amount against any amount owed by Owed Party or any Affiliate of Owed Party under this
Agreement or Order to Owing Party.
	 
	 	4.6	 	No Payment Upon Material Breach.
	 
	 	 	 	Embarq is not obligated to make any payment under this Agreement or an Order if Supplier
materially breaches this Agreement or an Order until Supplier has cured or Embarq has
waived the breach in accordance with this Agreement.
	 
	 	4.7	 	Prompt Invoicing.
	 
	 	 	 	Supplier must not (a) invoice Embarq more than 90 days after Supplier is permitted to issue
an invoice under this Agreement (“Late Invoices”) or (b) initially raise a claim
for payment of a previously issued invoice more than 365 days after the invoice date
(“Late Claims”). Embarq is not obligated to pay Late Invoices or Late Claims and
Supplier waives all rights and remedies related to Late Invoices and Late Claims.
	 
	 	4.8	 	Electronic Ordering.





			
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	 	 	 	Embarq and Supplier may agree to facilitate electronic ordering, through either the use
of an electronic data interchange or an Internet-based e-commerce solution.






	5.0	 	AFFILIATE TRANSACTIONS






	 	5.1	 	Embarq Affiliates’ Purchase Rights.
	 
	 	 	 	Supplier will provide Services and Deliverables under this Agreement and any existing
Orders to any Embarq Affiliate, who has agreed to be bound by the terms and conditions of
this Agreement, upon request. Supplier will negotiate with Embarq Affiliates in good
faith for Orders covering Services and Deliverables not governed by an existing Order,
consistent with this Agreement.
	 
	 	5.2	 	Contractual Liability.
	 
	 	 	 	All references to Embarq in this Agreement refer equally to Embarq or the Embarq
Affiliate executing a particular Order. Embarq shall be responsible and liable for all
Orders submitted by Embarq Affiliates.
	 
	 	5.3	 	Acquisitions and Divestitures






	 	(a.)	 	If Embarq Corporation divests a Embarq Affiliate or other portion of
its business (“Divested Business”), such Divested Business will be
entitled to continue purchasing under this Agreement for the remaining then
current Term of this Agreement (exclusive of any Renewal Term) if the Divested
Business agrees, in writing, to be bound by the terms and conditions of this
Agreement. The Divested Business will be solely responsible and liable for any
Services and Deliverables purchased by the Divested Business after the
divestiture.
	 
	 	(b.)	 	If Embarq Corporation acquires an entity or creates a new subsidiary
after the Effective Date, such entity will immediately be deemed an Embarq
Affiliate and will have the same rights and obligations (subject to Section 5.1)
as the Embarq Affiliates that are in existence on the Effective Date.






	6.0	 	TERM AND TERMINATION






	 	6.1	 	Term.
	 
	 	 	 	The initial term of this Agreement begins on the Effective Date and will continue for
three (3) years from May 1, 2007 (“Initial Term”). The term of this Agreement
will automatically renew on an annual basis for up to two additional one-year terms
(“Renewal Term”, collectively with the Initial Term, “Term”), unless
Embarq gives notice of its intent not to renew at least 90 days before the expiration of
the Term. After the first two Renewal Terms, the Term will automatically renew on an
annual basis for successive one-year terms, unless either Party gives notice of its
intent not to renew at least 90 days before the expiration of the Term. For any
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	 	 	 	continue in effect until the Order is fulfilled or terminated. This subsection is subject
to the early termination rights stated elsewhere in this Agreement.
	 
	 	6.2	 	Termination for Cause.
	 
	 	 	 	If a party materially breaches this Agreement or an Order or both, the other party may give
the breaching party a breach notice identifying the action or inaction that is the basis of
the breach. The party giving the breach notice may terminate this Agreement or the affected
Order if the other party does not cure the breach within 30 days after receiving the breach
notice. Unless otherwise provided in the breach notice or unless the breach has been cured,
the termination is effective 31 days after the breach notice is received. In addition to
any other rights or remedies that Embarq may have, if Embarq terminates under this
subsection, Supplier must reimburse Embarq for the increased costs (i.e., the costs in
excess of that which Embarq would have paid to Supplier under this Agreement) incurred by
Embarq for replacement services and deliverables, but solely to the extent such costs are
incurred during the remainder of the then current Term (exclusive of any Renewal Term).
	 
	 	6.3	 	[*]







			
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	*	 	CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.







 









 





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	 	6.4	 	Termination for Financial Instability.
	 
	 	 	 	If Supplier becomes Insolvent, Embarq may terminate this Agreement without liability with
at least 30 days’ notice to Supplier. “Insolvent” means: a.) Supplier does not meet
its undisputed obligations, including judgments, to third parties as those obligations
become due, (b.) Supplier’s stock is removed or delisted from a trading exchange, (c.)
Supplier’s long term debt goes on a watch or warning list, or (d.) Supplier’s long term
debt rating is downgraded more than 2 levels from its debt rating as of the Effective Date.
Supplier may terminate this Agreement effective immediately upon written notice, in the
event any assignment is made by Embarq for the benefit of creditors, or if a receiver is
appointed to take charge of Embarq’s property.
	 
	 	6.5	 	Transition Services.
	 
	 	 	 	Upon termination or expiration of an Order or this Agreement, Embarq may at its discretion
require Supplier to provide a Transition Period for Services. The required Transition
Period will not exceed 6 months, unless mutually agreed by both parties. If Embarq
initially designates a Transition Period of less than 6 months, it may subsequently extend
the Transition Period up to the maximum period of 6 months with 5 days’ notice to Supplier.
Embarq may, in its discretion, terminate the Transition Period with notice to Supplier.
During the Transition Period, the parties will continue to be bound by and perform in
accordance with this Agreement and any Orders. The terms and conditions of Effect of
Termination will apply upon termination or expiration of the Transition Period.
	 
	 	6.6	 	Effect of Termination.
	 
	 	 	 	Termination of this Agreement is without prejudice to any other right or remedy of the
parties. Termination of this Agreement for any reason does not release either party from





			
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	 	 	 	any liability which, at the time of termination, has already accrued to the other
party, or which may accrue in respect of any act or omission before termination or from
any obligation which is expressly stated to survive the termination. All obligations that
accrued prior to the effective date of termination (including without limitation, all
payment obligations) shall survive termination.
	 
	 	 	 	Upon termination or expiration of an Order or this Agreement or both, the parties will
perform the following obligations:






	 	(a.)	 	Within 15 days after the effective date of termination or expiration,
Supplier will return Embarq-Owned Property to locations designated by Embarq;
	 
	 	(b.)	 	Within 30 days after the effective date of termination or expiration,
Supplier will invoice Embarq for any final amounts due under the terminated Orders;
and
	 
	 	(c.)	 	Both parties will immediately discontinue making any statements or
taking any actions that might cause third parties to infer that a business
relationship continues to exist between the parties under the Orders or Agreement,
and where necessary or advisable, the parties will inform third parties that the
parties no longer have a business relationship.






	 	6.7	 	No Liability.
	 
	 	 	 	Each party understands that the rights of termination hereunder are absolute and that it
has no right to a continued relationship with the other after termination, except as
expressly stated herein. Neither party shall incur any liability whatsoever for any
damages, loss, or expense of any kind suffered or incurred by the other (or for any
compensation to the other) arising from or incident to any termination of this Agreement
which complies with the terms of this Agreement, whether or not such party is aware of
any such damage, loss or expense.






	7.0	 	SUPPLIER WARRANTIES






	 	7.1	 	General Services and Deliverables Warranty.






	 	(a.)	 	Supplier warrants that (i) Services will be provided in a workmanlike
manner, (ii) Supplier Personnel will have the requisite experience, skills,
knowledge, training and education to perform Services in a professional manner and
in accordance with this Agreement and Orders, (iii) all information provided by
Supplier to Embarq regarding Supplier Personnel will be truthful and accurate and
(iv) that it has all rights necessary to enter into and perform its obligations
under this Agreement and to grant the limited rights and licenses hereunder.
Notwithstanding anything to the contrary herein, Embarq acknowledges and agrees
that Services and Deliverables may be temporarily unavailable for scheduled
maintenance or for unscheduled emergency repairs, by Supplier or by third-party
providers.





			
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	 	(b.)	 	Supplier also warrants that, for a period of 1 year after Embarq’s acceptance of
Services or Deliverables, (i) Deliverables will be free from defects in design,
materials and workmanship that degrade the Services such that they are unable to
operate in accordance with any service level agreements associated with this Agreement
or with any Order, and (ii) Services and Deliverables will conform to the Order
specifications.






	 	7.2	 	Virus Warranty.
	 
	 	 	 	Supplier warrants that the Deliverables as delivered and unmodified will be free from any
viruses, worms, disabling programming codes, instructions or other such items known at the
time of delivery that may threaten, infect, damage, disable or otherwise interfere with the
permitted use of the Deliverables (“Virus”). Supplier will test each element of the
Deliverables, including any upgrades, before delivery to Embarq to ensure that it is free
of any Virus. If Embarq notifies Supplier that it has been informed or has reason to
believe that a Virus has infected a Deliverable, Supplier will promptly assist and work
continuously with Embarq, at Embarq’s direction and at no charge, until, in Embarq’s
determination, the Virus has been eliminated.
	 
	 	7.3	 	Malicious Technology.
	 
	 	 	 	Supplier warrants that the Deliverables as delivered and unmodified form will not: (i)
contain any Malicious Technology, (ii) contain any files or features that will disable or
destroy any functionality of the Deliverables, (iii) replicate, transmit or activate
itself without control of a person operating the computing equipment on which it resides;
or (iv) alter, damage or erase any data or computer programs without control of a person
operating the computing equipment on which it resides. If the Supplier is in breach of
this subsection, no “right to cure” period will apply. Embarq reserves the right to pursue
any available civil or criminal action against Supplier for violation of this provision.
Supplier will not install, use or execute any software on any Embarq CPUs without Embarq’s
written approval. “Malicious Technology” means any software, electronic,
mechanical or other means, device or function, e.g. (key, node, lock, time-out, “back
door,” trapdoor,” “booby trap,” “drop dead device,” “data
scrambling device,” “Trojan
Horse,”) that would allow Supplier or a third party to: (i) monitor or gain unauthorized
access to any Embarq system, (ii) use any electronic self-help mechanism in connection
with an Embarq system or (iii) restrict, disable, limit or impair the performance of a
Embarq system.
	 
	 	7.4	 	Compliance with Laws; Permits.
	 
	 	 	 	Supplier warrants that it will comply with all laws, orders, codes and regulations in the
performance of this Agreement and any Order. To the extent Supplier provides Supplier
Personnel to perform Services on Embarq’s premises, Supplier will screen Supplier
Personnel in conformance with all local, state and federal regulations, comply with laws,
regulations and orders relating to equal employment, workers’ compensation, unemployment
compensation, FICA, and immigration and employment verification, and furnish Embarq with
its EEO policies and verification of its FICA, workers’ compensation and unemployment
compensation if requested. Supplier will obtain and keep current at its





			
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	 	 	 	expense all governmental permits, certificates and licenses (including
professional licenses, if applicable) necessary for Supplier to perform the Services or
provide the Deliverables.
	 
	 	7.5	 	Subcontracts.
	 
	 	 	 	Supplier will remain fully liable for the work performed and for the acts or omissions
of any Supplier subcontractor. Supplier will require any subcontractor to comply with
the applicable terms of this Agreement and Orders.
	 
	 	7.6	 	Certification of Legal Status.
	 
	 	 	 	Supplier warrants it confirms the legal status of Supplier Personnel to work in the
United States. Supplier warrants that Supplier Personnel performing Services pursuant
to this Agreement are authorized to work in the United States (“Compliance with
Legal Status”). At Embarq’s request, Supplier will audit its Compliance with Legal
Status and deliver to Embarq a written certification, within 15 business days after
Embarq’s request, that Supplier Personnel working in the United States are legally
authorized to do so.
	 
	 	7.7	 	Breach of Warranty.
	 
	 	 	 	If Supplier breaches any warranty, Supplier will promptly replace nonconforming
Services or Deliverables at Supplier’s sole cost. If Supplier fails to promptly replace
nonconforming Services, Embarq may, in addition to exercising any other available
remedies, replace nonconforming Services at Supplier’s sole cost.






	8.0	 	EMBARQ WARRANTIES
	 
	 	 	Embarq represents and warrants to Supplier that it has all rights necessary to enter into
and perform this Agreement and to grant the limited rights and licenses above including,
without limitation, all necessary rights in the Embarq Data and Embarq-Owned Property
including but not limited to the Embarq Content and all rights of publicity with respect
to any artists, artwork, text material, images, sound or video, if any, associated with
the Embarq-Owned Property. Embarq further represents and warrants that to its knowledge
the Embarq Data and Embarq-Owned Property are not defamatory, obscene, or otherwise
unlawful and do not infringe or interfere with any intellectual property, contract, right
of publicity, or any other proprietary right of any individual or entity.
	 
	9.0	 	PERSONNEL






	 	9.1	 	Required Compliance with Agreement.
	 
	 	 	 	Supplier will require Supplier Personnel to comply with the applicable terms of this
Agreement and Orders.





			
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	 	9.2	 	Removal.
	 
	 	 	 	Embarq may reject or require Supplier to remove Supplier Personnel from providing
Services to Embarq for any lawful reason. Supplier must remove Supplier Personnel
promptly upon Embarq’s good faith written request. Embarq is not obligated to pay for
Services provided by the removed Supplier Personnel following Embarq’s request for
removal. Embarq is not obligated to pay for any costs associated with replacing Supplier
Personnel.
	 
	 	9.3	 	Safety.
	 
	 	 	 	Supplier must immediately notify Embarq by telephone (followed by written confirmation
within 24 hours) of any Deliverable which fails to comply with applicable safety rules or
standards of any government agency or which contains a defect which could present a
substantial risk to the health of the public or the environment.
	 
	 	9.4	 	Weapons Prohibition.
	 
	 	 	 	Supplier Personnel must not carry weapons or ammunition onto Embarq’s premises or use or
carry weapons while performing on-site Services or attending Embarq-sponsored activities.
Supplier must comply with all postings or notices located at Embarq’s premises regarding
safety, security or weapons.
	 
	 	9.5	 	Background Checks.
	 
	 	 	 	To the extent Services are performed by Supplier Personnel on Embarq’s premises, at
Embarq’s written request, and to the extent permitted by law:






	 	(a.)	 	Supplier will perform reasonable background checks on all Supplier Personnel
that perform Services on Embarq’s premises. Background checks will include: (i) criminal history, (ii) education (if degree indicated), (iii) employment history (last
3 positions or last 5 years if with same employer), (iv) references (if any of items
(i) through (iii) cannot be completed), and (v) if there is a Reasonable Suspicion (as
defined below) of drug use by a Supplier employee who provide services to Embarq,
Supplier agrees to perform drug testing at Embarq’s expense. For the purposes of this
Agreement, “Reasonable Suspicion” means a reasonable belief based on observed,
specific, objective facts where the rational inference to be drawn under the
circumstances is that the person is under the influence of drugs. As an example, and
not as a limitation, an unexplained workplace accident may be considered to provide
reasonable suspicion.
	 
	 	(b.)	 	Supplier Personnel that perform Services on Embarq’s premises will not include
anyone with a positive drug test (if such test is required under Section 9.5(a)) or
any felony conviction; and





			
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	 	(c.)	 	Supplier must immediately remove any Supplier Personnel that perform Services
on Embarq’s premises with a felony conviction or positive drug test (if such test
is required under Section 9.5(a)) from providing Services.
	 
	 	(d.)	 	At Embarq’s written request, Supplier will audit its compliance with the
requirements of this subsection, and will, within 15 business days of Embarq’s
request, deliver a written certification to Embarq confirming that Supplier has
been and is in compliance with the requirements of this subsection.






	 	9.6	 	Security Adherence and Access Rights.






	 	(a.)	 	Supplier will adhere to all Embarq physical and data security
requirements as provided to Supplier in writing.
	 
	 	(b.)	 	Physical security access rights to Embarq premises will be designated by
Embarq in accordance with Embarq security guidelines. During performance of
Services on Embarq’s premises, Supplier will abide by all procedures and policies
applicable to Embarq premises access rights, as provided to Supplier in writing.
All Supplier Personnel must receive a security badge from Embarq before performing
any portion of Services on Embarq’s premises and will wear the badge at all times
while on Embarq’s premises.
	 
	 	(c.)	 	Upon breach of this subsection, Embarq may immediately terminate this
Agreement or Order at its sole discretion in accordance with Section 6.3.






	 	9.7	 	Investigations.
	 
	 	 	 	Supplier will refer any security breach that it knows to involve Embarq Data, Embarq
Confidential Information or Embarq Property to Embarq’s Corporate Security immediately
upon becoming aware of the incident. Supplier must make Supplier Personnel available to
Embarq Corporate Security promptly for purposes of investigating and provide
information relevant to the investigation as reasonably requested.






	10.0	 	CONFIDENTIAL INFORMATION






	 	10.1	 	Confidentiality.
	 
	 	 	 	Each party acknowledges that while performing its obligations under this Agreement it
may have access to the other party’s Confidential Information. With respect to all
Confidential Information, the parties agree as follows:






	 	(a.)	 	The receiving party may use the Confidential Information only to perform
its obligations under this Agreement. The receiving party must use the same care to
protect the disclosing party’s Confidential Information as it uses to protect its
own Confidential Information. In no event will the receiving party fail to use
reasonable care to avoid unauthorized use, including disclosure, loss, or
alteration of the disclosing party’s Confidential Information.





			
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	 	(b.)	 	Embarq may disclose Supplier’s Confidential Information to Embarq
Affiliates, agents, contractors and legal representatives, if they have a need to
know and an obligation to protect the Confidential Information that is at least as
restrictive as this Agreement. Supplier may disclose Embarq’s Confidential
Information to Supplier Personnel if they have a need to know and obligation to
protect the Confidential Information that is at least as restrictive as this
Agreement.
	 
	 	(c.)	 	Neither party will disclose to the other party any confidential information
of a third party without such third party’s consent.
	 
	 	(d.)	 	Upon cessation of work or written request, the receiving party will return or
destroy, at its option, all Confidential Information of the disclosing party. Upon
request of the disclosing party, the receiving party will furnish an officer’s
certificate certifying that the disclosing party’s Confidential Information has been
returned or destroyed.






	 	10.2	 	Information Security.






	 	(a.)	 	To protect Embarq’s Confidential Information and Data from unauthorized use,
including disclosure, loss or alteration, Supplier will: (i) meet the Security
Standards; (ii) inventory and test Security Standards before accepting Embarq’s
Confidential Information and Data; and (iii) strictly adhere to industry standard
best practices and hardening guidelines;
	 
	 	(b.)	 	Suppliers who need to access, process, use, store, or transmit sensitive
information will be subjected to review of their demonstrated capability to protect
such information. Upon Embarq’s reasonable request, Supplier will provide
information to Embarq to enable Embarq to determine compliance with subsection
10.2(a) above. As part of Embarq’s assessment of Supplier’s internal control
structure, Embarq may require Supplier to, without limitation, answer security
questionnaires or conduct scans of servers, databases and other network hardware;
	 
	 	(c.)	 	Supplier will promptly inform Embarq of any known or suspected compromises
of Embarq’s Confidential Information and Data as a result of Supplier’s failure to
comply with the Security Standards.
	 
	 	(d.)	 	On a periodic basis, but in no event more than twice in any 12-month period,
Embarq may, upon 10 days’ notice, perform a security assessment to determine
Supplier’s compliance with the Security Standards. If Embarq has a reasonable basis
to believe that Supplier has breached or is likely to breach the Security Standards,
Embarq may, upon 5 days’ notice, perform a security assessment, which assessment will
be in addition to any assessment in the ordinary course.
	 
	 	(e.)	 	At Embarq’s reasonable request, Supplier will promptly cooperate with Embarq
to develop a plan to protect Embarq’s Confidential Information and Data from failures
or attacks on the Security Standards, which plan will include prioritization of





			
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	 	 	 	recovery efforts, identification of and implementation plans for alternative
data centers or other storage sites and backup capabilities.
	 
	 	(f.)	 	If Supplier fails to meet the obligations in this Section, Embarq will
notify Supplier of this failure as provided in this Agreement. Supplier will have
30 days from receiving that notice to correct the cause for the failure. If
Supplier fails to remedy any material failure within the 30-day period, Embarq has
the right to terminate this Agreement for cause.
	 
	 	(g.)	 	Supplier warrants that the Deliverables will not contain any
Unmitigated Vulnerability. “Unmitigated Vulnerability” means any
technology or configuration that, from a security perspective induces unacceptable
operational risks and, is (i) inconsistent with industry-accepted practices, (ii)
susceptible to being hacked, broken into or compromised, or (iii) referenced by
the Carnegie Mellon CERT®
Coordination Center at www.cert.org.
	 
	 	(h.)	 	Upon Embarq’s reasonable request, Supplier will provide information to
Embarq to enable Embarq to determine compliance with this Section.






	 	10.3	 	No Publicity.






Except as it relates to Embarq’s marketing of the Deliverables, Services and related matters to
its users, neither party will, without the other party’s written consent, issue any news
release, announcement, denial or confirmation of this Agreement, its value, or its terms and
conditions, or in any other manner advertise or publish this Agreement, its value, or its terms
and conditions. Nothing in this Agreement is intended to imply that Embarq will agree to any
publicity whatsoever. Each party may, in its sole discretion, withhold consent to any publicity.
Notwithstanding the foregoing, either party may provide a copy of this Agreement or otherwise
disclose its terms in connection with any financing transaction, due diligence inquiry or legal
or regulatory requirement.




	 	10.4	 	Exception for Legal Process.






The receiving party may disclose Confidential Information to the extent required by law; but the
receiving party must give the disclosing party prompt written notice of the required disclosure
and make a reasonable effort to obtain a protective order.




	 	10.5	 	Injunctive Relief.






Each party agrees that the wrongful disclosure of Confidential Information may cause irreparable
injury that is inadequately compensable in monetary damages. Accordingly, either party may seek
injunctive relief in any court of competent jurisdiction for the breach or threatened breach of
this Section in addition to any other remedies in law or equity.




	11.0	 	OWNERSHIP






	 	11.1	 	Embarq Property.





			
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	 	(a.)	 	Supplier must return all Embarq-Owned Property to Embarq upon the
termination or expiration of this Agreement and at any time upon Embarq’s request.
Supplier is responsible and must account for all Embarq-Owned Property in Supplier’s
possession, if any, and bears the risk of loss while the property is in Supplier’s
possession. Embarq-Owned Property may only be used in connection with Supplier’s
performance of its obligations under this Agreement. If Supplier acquires, purchases
or obtains any items in connection with this Agreement that are deemed Embarq-Owned
Property, Embarq may inspect any related agreements and associated records,
including, without limitation, invoices by which Supplier acquires such Embarq-Owned
Property.
	 
	 	(b.)	 	When a Supplier Personnel assignment ends for any reason, voluntary or
involuntary, Supplier will ensure all Embarq-Owned Property in Supplier Personnel
possession is returned to Embarq within 48 hours of the assignment termination,
unless such Embarq-Owned Property is promptly assigned to another Supplier
Personnel. If Embarq-Owned Property, including without limitation security badge
and keys, is not returned within 48 hours, Supplier will reimburse Embarq for the
Embarq-Owned Property at its current market value.






	 	11.2	 	Developed Property.






If Embarq requests that Supplier undertake product modifications or development of new service
functionalities, Supplier and Embarq will negotiate in good faith an applicable statement of
work concerning the terms and conditions (including costs, timeframes, Deliverables and
ownership) on which Supplier will develop and make available to Embarq and Embarq’s End Users,
the product modifications or service functionalities. If the Parties do not agree on these terms
and conditions, nothing in the preceding sentence obligates the Supplier to undertake the
product modifications or the development of new service functionalities.




	 	11.3	 	No Implied License.






Supplier acknowledges that it has no implied license to use the Embarq-Owned Property other than
for Embarq’s benefit as contemplated under this Agreement.




	12.0	 	MUTUAL REPRESENTATIONS AND WARRANTIES






	 	12.1	 	Formation; Authorization; Litigation.






Each party represents and warrants that:




	 	(a.)	 	it is validly existing and in good standing, and is qualified to do
business, in each jurisdiction where it will conduct business under this Agreement,
unless the failure to do so will not have a material adverse effect on its ability
to perform under this Agreement;





			
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	 	(b.)	 	the signing, delivery and performance of this Agreement by the party has been
properly authorized; and
	 
	 	(c.)	 	as of the Effective Date, no claims, actions or proceedings are pending
or, to the knowledge of the party, threatened against or affecting the party that
may, if adversely determined, reasonably be expected to have a material adverse
effect on the party’s ability to perform its obligations under this Agreement.






	 	12.2	 	No Violations; Approvals.






Each party represents and warrants to the other party that the execution, delivery or performance
of this Agreement:




	 	(a.)	 	will not violate any existing law, regulation, order, determination or
award of any governmental authority or arbitrator, applicable to the party;
	 
	 	(b.)	 	will not violate or cause a breach of the terms of the party’s governing
documents or of any material agreement that binds the party; and
	 
	 	(c.)	 	will not require approval or filing with any governmental authority.






	13.0	 	WARRANTY DISCLAIMERS






	 	13.1	 	EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT TO THE CONTRARY, SERVICES AND
DELIVERABLES ARE PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR
IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. SUPPLIER DOES NOT WARRANT THAT THE SERVICES
WILL MEET THE REQUIREMENTS OF EMBARQ OR THOSE OF ANY THIRD PARTY AND, IN PARTICULAR,
SUPPLIER DOES NOT WARRANT THAT THE SYSTEM WILL BE ERROR FREE OR WILL OPERATE WITHOUT
INTERRUPTION. SUPPLIER DOES NOT WARRANT OR MAKE ANY REPRESENTATION REGARDING THE ACCURACY,
ADEQUACY OR COMPLETENESS OF THE CONTENTS OF ANY CONTENT OR THE RESULTS TO BE OBTAINED FROM
THEIR USE.






	14.0	 	INDEMNITY






	 	14.1	 	Supplier’s General Third Party Indemnity.






Except for claims covered by Supplier’s Intellectual Property Indemnity, Supplier will indemnify
and defend Embarq, the Embarq Affiliates, and their respective directors, officers, agents,
employees and customers (each, a “Embarq Indemnitee”) from and against all third party
claims, damages, losses, liabilities, costs, expenses and reasonable legal fees arising out of a
claim by a third party against a Embarq Indemnitee resulting from any act or omission of Supplier
under this Agreement.



			
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	 	14.2	 	Embarq’s General Third Party Indemnity.






Embarq will indemnify and defend Supplier, its affiliates, and their respective directors,
officers, affiliates, suppliers agents and employees (each, a “Supplier Indemnitee”) from
and against all third party claims, damages losses, liabilities, costs, expenses and reasonable
legal fees arising out of a claim by a third party against a Supplier Indemnitee resulting from any
act or omission of Embarq under this Agreement.




	 	14.3	 	Supplier’s Intellectual Property Indemnity.






Supplier will indemnify and defend the Embarq Indemnitees from and against all third party claims,
damages, losses, liabilities, costs, expenses and reasonable legal fees arising out of any third
party claim that the Services or Deliverables and any resulting use or sale of any Services or
Deliverables constitutes an infringement of any third party patent, trademark, or copyright, or the
misappropriation of any trade secret. In addition, if Embarq’s right to sell or use the Services or
Deliverables is enjoined, Supplier will, at Supplier’s expense, in the following order as is
commercially reasonable:




	 	(a.)	 	procure for Embarq and its customers the right to use the Services and
Deliverables;
	 
	 	(b.)	 	replace the Services and Deliverables with equivalent non-infringing Services
and Deliverables;
	 
	 	(c.)	 	modify the Services and Deliverables so they become non-infringing; or
	 
	 	(d.)	 	remove the Services and Deliverables and refund the price paid by Embarq for
the Services and Deliverables, including incidental charges, such as transportation,
installation and removal.






Supplier shall have no liability or obligation to Embarq hereunder with respect to any claim based
upon (i) any use of the Deliverables not materially in accordance with this Agreement to the
extent that compliance with this Agreement would have prevented the claim, (ii) use of any
Deliverables in an application or environment or on a platform or with devices for which it was
not designed or contemplated, (iii) alterations, combinations or enhancements of the Deliverables
not created or approved by Supplier, (iv) that portion of any Deliverables which implements
requirements specified in writing by Embarq, or (v) Embarq’s continuing allegedly infringing
activity after being notified thereof or its continuing use of any version of the Deliverables
after being provided modifications that would have avoided the alleged infringement.




This Section 14.3 sets forth Supplier’s sole obligation and Embarq’s sole remedy against Supplier
for any intellectual property infringement action.




	 	14.4	 	Embarq Indemnity






Embarq will defend Supplier against any third party claim that (a) the specifications provided by
Embarq to Supplier or any Embarq-Owned Property or Embarq Data violate such third party’s patent,
trademark, or copyright, or misappropriate of any trade secret; (b) is excluded from



			
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Supplier’s indemnity under Section 14.3; or (c) arises out of any claims or representations
regarding the Services or Deliverables that exceed the warranties and claims approved in writing by
Supplier. Except as otherwise provided herein, Embarq expressly disclaims all other
representations, liabilities and warranties (express or implied) related to any materials provided
by Embarq to Supplier. If, at any time during the process of software development, either party
learns that compliance with Embarq-provided specifications may result in a claim of infringement by
a third party, the party with that knowledge will promptly inform the other party. If the parties
determine that compliance with the specifications poses a substantial risk of a third party
infringement claim, Supplier will discontinue developing the software according to those
specifications and the parties will mutually agree on new non-infringing specifications. This
Section sets forth Embarq’s sole obligation and Supplier’s sole remedy against Embarq for any
intellectual property infringement action.




	 	14.5	 	Indemnification Procedures.






	 	(a.)	 	Promptly upon becoming aware of any matter which is subject to the provisions
of 14.1 (Supplier’s General Third Party Indemnity), 14.2 (Embarq’s General Third Party
Indemnity), 14.3 (Supplier’s Intellectual Property Indemnity), or 14.4 (Embarq
Indemnity) (a “Claim”), the party seeking indemnification (the “Indemnified
Party”) must give notice of the Claim to the other party (the “Indemnifying
Party”), accompanied by a copy of any written documentation regarding the Claim
received by the Indemnified Party.
	 
	 	(b.)	 	The Indemnifying Party will, at its option, settle or defend, at its own
expense and with its own counsel, the Claim. The Indemnified Party will have the
right, at its option, to participate in the settlement or defense of the Claim, with
its own counsel and at its own expense; but the Indemnifying Party will have the right
to control the settlement or defense. The Indemnifying Party will not enter into any
settlement that imposes any liability or obligation on the Indemnified Party without
the Indemnified Party’s prior written consent, not to be unreasonably withheld or
delayed. The parties will cooperate in the settlement or defense and give each other
full access to all relevant information.
	 
	 	(c.)	 	If the Indemnifying Party fails to (i) notify the Indemnified Party of the
Indemnifying Party’s intent to take any action within 30 days after receipt of a
notice of a Claim or (ii) proceed in good faith with the prompt resolution of the
Claim, the Indemnified Party, with prior written notice to the Indemnifying Party and
without waiving any rights to indemnification, including reimbursement of reasonable
legal fees and legal costs, may defend or settle the Claim without the prior written
consent of the Indemnifying Party. The Indemnifying Party will reimburse the
Indemnified Party on demand for all Damages incurred by the Indemnified Party in
defending or settling the Claim.
	 
	 	(d.)	 	Neither party is obligated to indemnify and defend the other with respect to a
Claim (or portions of a Claim) if the Indemnified Party fails to promptly notify the
Indemnifying Party of the Claim and fails to provide reasonable cooperation and





			
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	 	 	 	information to defend or settle the Claim; and if, and only to the extent
that, the failure materially prejudices the Indemnifying Party’s ability to
satisfactorily defend or settle the Claim.






	15.0	 	LIMITATION OF DAMAGES
	 
	 	 	Neither party will be liable to the other for consequential, indirect, reliance, exemplary,
special, incidental or punitive damages for any cause of action, whether in contract, tort or
otherwise, except:






	 	(a.)	 	Damages for which a party has an obligation of indemnity under
this Agreement;
	 
	 	(b.)	 	any grossly negligent, willful or fraudulent act or omission; or
	 
	 	(c.)	 	any breach of provisions related to confidential information or the Embarq
Marks.






	 	 	Consequential damages include, but are not limited to, lost profits, lost revenues and lost
business opportunities, whether the other party was or should have been aware of the possibility
of these damages.
	 
	 	 	The Parties agree that for any damages claim, except those covered by the Parties’
indemnification obligations under Section 14 and its subsections above, each party’s
total liability will be limited to [*].






	16.0	 	INSURANCE






	 	16.1	 	Required Insurance Coverage.






Supplier will obtain and maintain during the Term the following minimum insurance coverage:




	 	(a)	 	Commercial general liability, including bodily injury, property damage,
personal and advertising injury liability, and contractual liability covering
operations, independent contractor and products/completed operations hazards, with
limits of not less than [*] combined single limit per occurrence and
[*] annual aggregate, naming Embarq as an additional insured;
	 
	 	(b)	 	Workers’ compensation as provided for under any workers’ compensation or
similar law in the jurisdiction where work is performed with an employer’s
liability limit of not less than [*] for bodily injury by accident and [*]
for bodily injury by disease;
	 
	 	(c)	 	Umbrella/excess liability with limits of not less than [*]
combined single limit per occurrence and annual aggregate in excess of the
commercial general liability, business auto liability and employer’s liability,
naming Embarq as an additional insured.






	 	16.2	 	Certificates of Insurance.





			
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Supplier will obtain and maintain the required coverage with financially reputable insurers
licensed to do business in all jurisdictions where work is performed under this Agreement. Upon
Embarq’s request, Supplier will provide Embarq a certificate of insurance evidencing that all the
required coverages are in force and have been endorsed to provide that no policy will be canceled
without first giving Embarq 30 days’ prior written notice. All policies will be primary to any
insurance or self insurance Embarq may maintain for acts or omissions of Supplier or anyone for
whom Supplier is responsible. Upon request, Supplier will include copies of relevant endorsements
or policy provisions with the required certificate of insurance.




	17.0	 	AUDIT RIGHTS






	 	17.1	 	Records Maintenance.






Each party will maintain complete auditable records of all financial and non-financial
transactions relating to this Agreement for a period of at least 3 years after the termination or
expiration of this Agreement. Each party (the “Audited Party”), will provide access to
the other party (the “Auditing Party”), its internal and external auditors, inspectors
and regulators, not more than once per calendar year during regular business hours, to sites
where either Audited Party or any of its subcontractors are providing Services, to personnel, and
to data, books, accounts and records relating to this Agreement for any reasonable business
purpose, including audits, examinations and inspections relating to (a.) the accuracy of charges
and invoices, (b.) Audited Party’s compliance with applicable laws or regulations, (c.) Audited
Party’s compliance with the terms of this Agreement, (d.) Audited Party’s compliance with safety
and security procedures with respect to its facilities, if any, and Embarq Data, and (e.) the
conduct of Audited Party’s operations and procedures. Such audit shall not unreasonably disrupt
business operations of the Audited Party.




	 	17.2	 	Procedures.






Each party will provide Audited Party with at least 30 days’ notice of an audit. Audited Party
will make the information reasonably required to conduct the audit available on a timely basis
and assist Auditing Party and its internal or external auditors as reasonably necessary. Audited
Party will not be responsible for Auditing Party’s expenses incurred for an audit unless the
audit discloses an over-billing (with respect to Supplier) or an under-payment (with respect to
Embarq) in excess of 5% during the period covered by the audit, in which case Audited Party will
pay for the entire cost of the audit, except in the circumstances of an Supplier audit of Embarq
and any underpayment is the result of Supplier’s invoicing error, in which case the Supplier will
pay for the audit. To the extent such examination discloses an over-billing or underpayment,
Audited Party will reimburse the Auditing Party for such discrepancy. Such amount shall be
reconciled with the next invoice.




	18.0	 	DISPUTE RESOLUTION






	 	18.1	 	Option to Negotiate Disputes.






The parties may, but are not obligated to, resolve any issue, dispute, or controversy arising out
of or relating to this Agreement using the procedures in this Section. Any party may give the
other party



			
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notice of any dispute not resolved in the normal course of business. Within 10 days after delivery
of the notice, representatives of both parties may meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to exchange relevant information and to
attempt to resolve the dispute by the respective representatives of both parties within the time
frames and escalation process set forth below:



	 	 	 	 	 	 	 	 	 
	 	 	Embarq (Name/Title)	 	 	Supplier (Name/Title)	 
	Within 10 days
	 	 	 	 	 	 	 	 
	Within 20 days
	 	 	 	 	 	 	 	 
	Within 30 days
	 	 	 	 	 	 	 	 







If either party intends to have an attorney attend a meeting, it will notify the other party at
least 2 business days before to the meeting to enable the other party to also be accompanied by
an attorney. All negotiations pursuant to this Section are confidential and will be treated as
compromise and settlement negotiations for purposes of evidentiary rules.




	 	18.2	 	Continuing Performance.






Supplier will continue performance during the pendency of any dispute, unless either party
terminates this Agreement for cause.




	 	18.3	 	Jury Waiver; Arbitration.






EACH PARTY WAIVES ITS RIGHT TO A JURY TRIAL IN ANY COURT ACTION ARISING AMONG THE PARTIES UNDER
THIS AGREEMENT OR OTHERWISE RELATED TO THIS AGREEMENT, WHETHER MADE BY CLAIM, COUNTERCLAIM, THIRD
PARTY CLAIM OR OTHERWISE.




If the jury waiver is held to be unenforceable, the parties agree to binding arbitration for any
dispute arising out of this Agreement or any claim arising under any federal, state or local
statutes, laws, or regulations. The arbitration will be conducted by and in accordance with the
arbitration rules promulgated under the Judicial Arbitration and Medication Services
(“JAMS”). To the extent that the provisions of this Agreement and the prevailing rules of
JAMS conflict, the provisions of this Agreement will govern. The arbitration decision will be final
and binding on the parties, and the decision may be enforced by either party in any court of
competent jurisdiction.




The agreement of each party to waive its right to a jury trial will be binding on its successors,
assignees and Divested Affiliates.




	 	18.4	 	Legal Fees.





			
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The prevailing party in any arbitration or lawsuit will be entitled to reasonable legal
fees and costs, including reasonable expert fees and costs.




	19.0	 	SUPPLIER DIVERSITY






	 	19.1	 	Embarq’s Supplier Diversity Policy.






Embarq’s supplier diversity policy requires that Certified Diverse Suppliers will have the
maximum practicable opportunity to participate in providing Deliverables and Services to the
fullest extent consistent with efficient performance of this Agreement. “Certified Diverse
Supplier” means a supplier that has been certified by a qualified independent third party
agency as a “service-disabled veteran-owned small business concern,” a “HUBZone small business
concern,” a “small disadvantaged business concern,” a “women-owned small business concern” or a
small business concern that is controlled by one or more “socially and economically
disadvantaged individuals,” as those terms are used in 48 C.F.R. 2.101 or 13 C.F.R. 124.1003.




	 	19.2	 	Registration.






Before the Effective Date, Supplier must register at the following Embarq website:
www.Embarq.com\supplierregistration. A list of agencies that Embarq deems to be
qualified independent third party agencies for certification purposes can be found at this
website.




	 	19.3	 	Supplier Diversity Schedule.






If Supplier expects to receive [*] or more from Embarq under this Agreement, Supplier agrees
to make commercially reasonable efforts to comply with the terms and conditions of Schedule B.
Embarq may issue a notice of material breach to Supplier if Supplier intentionally and knowingly
fails to make a commercially reasonable good faith effort to meet its diversity requirement set
forth in this Section 19.3 or Schedule B.




	20.0	 	GENERAL






	 	20.1	 	Notices.






Notices provided under this Agreement must be in writing and delivered by (i) certified mail,
return receipt requested, (ii) hand delivered, (iii) facsimile with receipt of a “Transmission
OK” acknowledgment, (iv) e-mail, or (v) delivery by a reputable overnight carrier service (in the
case of delivery by facsimile or e-mail the notice must be followed by a copy of the notice being
delivered by a means provided in (i), (ii) or (v)). The notice will be deemed given on the day
the notice is received. In the case of notice by facsimile or e-mail, the notice is deemed
received at the local time of the receiving machine, and if not received, then the date the
follow-up copy is received. Notices must be delivered to the following addresses or at such other
addresses as may be later designated by notice:



			
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	Embarq:	 	Supplier:
	Embarq ________________________________


	 	Synacor, Inc.
	 ______________________________________

	 	Attn: Frank Codella
	Fax: ___________________________________

	 	40 La Riviere Drive, Suite 300
	 


	 	Buffalo, NY 14202
	 

	 	Fax: 716-332-0081
	 
	 	 
	With a copy to:

	 	With a copy to:
	Embarq Law Department

	 	Synacor, Inc.
	Director, Procurement Law Group

	 	Attn: Chief Financial Officer
	5454 W. 110th St.

	 	40 La Riviere Drive, Suite 300
	Overland Park, KS 66251

	 	Buffalo, NY 14202
	 

	 	Fax: 716-332-0081







	 	20.2	 	Business Conduct Code.






Supplier agrees to conduct business with Embarq in an ethical manner that is consistent with The
Embarq Principles of Business Conduct for Consultants, Contractors, and Suppliers, which Supplier
acknowledges has been provided to Supplier as a reference.




	 	20.3	 	Assignment.






Neither party may assign its rights or delegate its obligations under this Agreement in whole or in
part without the other party’s prior written consent, except that either party (without consent)
may assign its rights and obligations hereunder to any of its affiliates or to any successor to all
or substantially all of its business that concerns the subject matter of this Agreement (whether by
sale of equity or assets, merger, consolidation or otherwise). This Agreement is binding on and
enforceable by each party’s permitted successors and assignees. Any assignment in violation of this
Section is null and void.




	 	20.4	 	Independent Contractor.






Supplier and Supplier Personnel are independent contractors for all purposes and at all times.
Supplier has the responsibility for, and control over, the methods and details of performing
Services. Supplier will be responsible for the compensation, discipline and termination of Supplier
Personnel. Supplier is responsible for the payment of all Supplier Personnel Compensation. Neither
Supplier nor Supplier Personnel have any authority to act on behalf of, or to bind Embarq to any
obligation. “Supplier Personnel Compensation” means wages, salaries, fringe benefits and
other compensation, including contributions to any employee benefit, medical or savings plan and
all payroll taxes and unemployment compensation benefits, including withholding obligations.




	 	20.5	 	Governing Law.






THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES ARE GOVERNED BY THE LAWS OF THE STATE
OF DELAWARE, WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES. EVEN IF DELAWARE ADOPTS THE UNIFORM
COMPUTER INFORMATION TRANSACTION ACT (UCITA), UCITA WILL NOT GOVERN OR BE USED TO INTERPRET
AGREEMENT PROVISIONS. FURTHER, THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE



			
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INTERNATIONAL SALE OF GOODS (UNCISCG) DOES NOT APPLY TO THIS AGREEMENT.




	 	20.6	 	Waiver and Severability.






The waiver of a breach of any term or condition of this Agreement will not constitute the waiver of
any other breach of the same or any other term. To be enforceable, a waiver must be in writing
signed by a duly authorized representative of the waiving party. If any provision of this Agreement
is held to be unenforceable, the remaining provisions will remain in effect and the parties will
negotiate in good faith a substantively comparable enforceable provision to replace the
unenforceable provision.




	 	20.7	 	Survival.






The following sections will survive expiration or termination of this Agreement for any reason:
Compensation, Invoicing, Contractual Liability, Effect of Termination, Warranty Disclaimer, Service
and Deliverable Warranties (only for the period stated therein), Confidential Information,
Ownership, Indemnity, Limitation of Damages, Audit Rights, Dispute Resolution, Governing Law, and
Marks.




	 	20.8	 	Marks.






Except as otherwise provided in an Order, nothing in this Agreement grants either party the right
to use any trademarks, trade names or logos proprietary to the other party. If either party is
granted a right to use such marks, such party will do so only in strict compliance with such Order.




	 	20.9	 	Remedies.






All rights and remedies of the parties, under this Agreement, in law or at equity, are cumulative
and may be exercised concurrently or separately. The exercise of one remedy will not be an
election of that remedy to the exclusion of other remedies.




	 	20.10	 	Federal Acquisition Regulations; Executive Order 11246.






	 	(a.)	 	If Embarq or the Federal government determines that an Order supports
specific requirements included in a contract or subcontract between Embarq and the
federal government, Supplier will be subject to certain federal acquisition
regulations, such as requirements related to equal opportunity and affirmative action
for Vietnam era veterans, and Executive Order 11246. Supplier will comply with the
applicable laws as soon as it receives notice from Embarq or otherwise learns of its
obligations under the applicable laws. Supplier will be subject only to those laws
that must be included in all subcontracts as a matter of law.
	 
	 	(b.)	 	In accordance with the Department of Justice (DOJ) Information Technology (IT)
security policies set forth in DOJ Order 2640.2D dated July 12, 2001, Supplier will
ensure that no foreign nationals perform any Services under this Agreement or a
related Order that involve direct or indirect access to, or development, operation,





			
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management
or maintenance of DOJ IT systems. DOJ IT systems include, without
limitation, information technology systems, hardware, software and media that
store, process or transmit classified and unclassified information as well as
operating systems of Federal agencies that interface with the DOJ IT systems. A
foreign national is anyone who is not a U.S. citizen and includes lawful permanent
resident aliens. Embarq will notify Supplier in writing of Supplier’s obligations
and the Order to which the law applies.




	 	20.11	 	Construction.






This Agreement will not be construed against either party due to authorship. Except for the
indemnification rights and obligations in this Agreement, nothing in this Agreement gives anyone,
other than the parties and any permitted assignees, any rights or remedies under this Agreement.




	 	20.12	 	Entire Agreement; Modifications; Inconsistencies.






This Agreement and any attachments constitute the entire agreement of the parties as to the subject
matter of this Agreement and the Orders, and supersede all prior or contemporaneous agreements,
proposals, discussions or correspondence, whether written or oral. This Agreement and any
attachment or Order may not be amended or modified except in writing signed by an authorized
representative of each party. Any terms on Supplier’s web site, product schedule or other ordering
document, or contained in any “shrinkwrap” or “clickwrap” agreement, will not have force or effect
if the provision conflicts with the terms of this Agreement, the attachments or Orders. If an
inconsistency exists between the terms of this Agreement, and the terms of any attachment or Order,
the terms of the attachment or Order will control, except preprinted terms and conditions appearing
in any purchase order will have no force and effect. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument. Execution of a facsimile copy shall have the same force and
effect as execution of an original, and a facsimile signature shall be deemed an original and valid
signature.



(Remainder of page is blank. Signature on following page.)




			
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	SIGNED:
	 	 	 	 	 	 	 	 
	 
	EMBARQ MANAGEMENT COMPANY	 	 	 	SYNACOR, INC.
	 
	/s/ David Platt	 	 	 	/s/ Frank J. Codella 
	(signature)	 	 	 	(signature)
	Print name:
	 	David Platt
	 	 	 	Print name:
	 	Frank J. Codella
	Title:

	 	VP — Procurement
	 	 	 	Title:
	 	Vice President of Sales
	Date:

	 	12/4/06
	 	 	 	Date:
	 	11/27/06






			
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SCHEDULE A



During the Initial Term, services performed by Supplier for Embarq that are not specified in an
Order shall be billed at a rate not to exceed [*] (“Billable Rate”). Supplier may
increase the Billable Rate for any Renewal Term by no more than [*] upon mutual agreement of the
Parties.




			
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SCHEDULE B

SUPPLIER DIVERSITY



Supplier will use commercially reasonable good faith efforts to meet a Utilization Requirement of
3%, either annually, or if this Agreement is for a specific term, over the term of this Agreement.
The “Utilization Requirement” will consist of socially and economically disadvantaged small
business concerns, women small business concerns, and service-disabled veteran-owned small business
concerns. Embarq reserves the right to review this requirement and monitor the supplier’s progress
annually. Embarq may assist Supplier in tracking and preparing reports with respect to the
Utilization Requirement.



For the sake of clarity, commercially reasonable good faith efforts does not include any
requirement that Supplier hire any consultant or employee to supervise and/or manage the foregoing
efforts, produce any reporting without specific request from Embarq, or require more than a
commercially reasonable amount of time for report preparation when specifically requested by Embarq
no more than twice per calendar year during the term.




			
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[*]




			
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RESPECT TO THE OMITTED PORTIONS.