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CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.8(b), 200.83 AND
230.406 * INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST THAT IS FILED SEPARATELY WITH THE COMMISSION
EXHIBIT 10.2
MASTER AGREEMENT
Between
NORTHERN TELECOM LIMITED
And
APPLIED DIGITAL ACCESS, INC.
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TABLE OF CONTENTS
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Page
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ARTICLE 1 - DEFINITIONS .............................................. 2
ARTICLE 2 - CONTRACT DOCUMENTS ....................................... 4
ARTICLE 3 - SCOPE OF WORK ............................................ 6
ARTICLE 4 - PERIOD OF PERFORMANCE .................................... 7
ARTICLE 5 - CONSIDERATION ............................................ 7
ARTICLE 6 - PAYMENT SCHEDULE ......................................... 8
ARTICLE 7 - INVOICES ................................................. 9
ARTICLE 8 - AUDIT .................................................... 9
ARTICLE 9 - INFORMATION FROM NORTEL .................................. 10
ARTICLE 10 - STATUS REPORTS ........................................... 11
ARTICLE 11 - MEETINGS ................................................. 11
ARTICLE 12 - INDEPENDENT CONTRACTOR ................................... 11
ARTICLE 13 - CHANGE CONTROL PROCEDURES AND ACCEPTANCE ................. 11
ARTICLE 14 - FORECASTS ................................................ 13
ARTICLE 15 - TERMINATION FOR CONVENIENCE .............................. 15
ARTICLE 16 - TERMINATION FOR DEFAULT .................................. 16
ARTICLE 17 - CHANGE IN CONTROL ........................................ 18
ARTICLE 18 - INVENTIONS AND IMPROVEMENTS .............................. 18
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ARTICLE 19 - RIGHTS NOT CONFERRED ..................................... 19
ARTICLE 20 - ASSIGNMENT ............................................... 19
ARTICLE 21 - COMPLIANCE WITH LAW ...................................... 19
ARTICLE 22 - PUBLICITY RELEASE ........................................ 19
ARTICLE 23 - CONFIDENTIAL INFORMATION ................................. 20
ARTICLE 24 - PATENTS AND INFORMATION .................................. 21
ARTICLE 25 - ▇▇▇▇▇▇▇▇ AND LIABILITY ................................... 22
ARTICLE 26 - SPONSORS AND PRIMES ...................................... 23
ARTICLE 27 - NOTICES .................................................. 23
ARTICLE 28 - APPLICABLE LAW ........................................... 24
ARTICLE 29 - CONTINUING OBLIGATIONS ................................... 25
ARTICLE 30 - WAIVERS .................................................. 25
ARTICLE 31 - TERM OF AGREEMENT ........................................ 25
ARTICLE 32 - ENTIRETY OF CONTRACT ..................................... 25
ARTICLE 33 - APPENDICES ............................................... 26
ARTICLE 34 - FORCE MAJEURE ............................................ 26
ARTICLE 35 - ARBITRATION .............................................. 26
ARTICLE 36 - AMENDMENT ................................................ 27
ARTICLE 37 - WITHHOLDING .............................................. 27
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THIS MASTER AGREEMENT is made as of the __ day of July, 1996.
BETWEEN:
NORTHERN TELECOM LIMITED, a company incorporated under the laws of
Canada, having its head office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
[▇▇▇▇▇▇▇▇▇▇▇], ▇▇▇▇▇▇▇ (hereinafter called "Nortel"),
OF THE FIRST PART
AND:
APPLIED DIGITAL ACCESS, INC., a company incorporated under the laws of
the State of California, having its head office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇
(hereinafter called "ADA"),
OF THE SECOND PART
WHEREAS:
A. MPR Teltech Ltd. ("MPR Teltech") had previously entered into a Master
Agreement with Prism Systems, Inc. ("Prism Systems") dated December 11,
1992 (the "Prior Agreement"), pursuant to which MPR Teltech performed
certain research and development activities for Prism Systems from time
to time subject to the terms and conditions of such agreement;
B. ADA has acquired certain assets from MPR Teltech pursuant to that
certain Asset Purchase Agreement dated the date hereof;
C. Nortel has previously acquired all of the assets of Prism Systems and
integrated such assets into Nortel as the Nortel Network Services
Management Division ("NSM"); and
▇. ▇▇▇ and Nortel wish to restructure the terms and conditions of the
Prior Agreement to provide that: (1) ADA has research and development
capabilities and resources which Nortel wishes to draw upon from time
to time; and (2) Nortel desires to have ADA perform research and
development activities for Nortel from time to time subject to the
terms and conditions of this Master Agreement.
NOW THEREFORE in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth and contained, this agreement witnesseth:
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ARTICLE 1 - DEFINITIONS
In this Master Agreement and any Work Schedule, unless there is something in the
subject matter or context inconsistent therewith, the expressions following
shall have the meanings indicated below:
"ADA Prime" has the meaning ascribed thereto in Section 26.1 hereof.
"Acceptance" has the meaning ascribed thereto in Section 13.4 hereof.
"Business Day" means each of Monday, Tuesday, Wednesday, Thursday and Friday,
except when any such day occurs on a statutory holiday in British Columbia;
"Commercial Specifications" means the specifications approved by Nortel for use
in developing Custom Software and Custom Hardware and upon which the technical
proposal is based;
"Contract Amount" means the dollar amount specified in the Work Schedule to be
paid to ADA;
"Custom Hardware" means the hardware which is to be developed by ADA under the
Work Schedule in accordance with the specifications referred to in such Work
Schedule, including all related documentation to the extent of ▇▇▇'s legal right
to do so.
"Custom Software" means the computer programs which are to be developed by ▇▇▇
under the Work Schedule in accordance with the Commercial Specifications
referred to in such Work Schedule, including all source and object code listings
and all related documentation and design data, including but not limited to,
design specifications and descriptions, change control documents, calculation
formulae and algorithms for such software;
"Deliverables" means those items (tangible and/or intangible) which are
identified in the Work Schedule and which are to be provided to Nortel by ADA
pursuant to the applicable Development Agreement, and shall include items such
as, but not be limited to Custom Hardware, Hardware, Custom Software, Software,
Services, details of the development environment documentation, reports,
schedules and specifications as specified in the applicable Development
Agreement;
"Development Agreement" means this Master Agreement and any Work Schedule
attached hereto pursuant to Section 2.6 hereof;
"Full Price" means the full price for Work under a Development Agreement as
determined in accordance with the formula set forth in Appendix A or otherwise
as set forth in the Work Schedule or Development Agreement.
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"Hardware" means original equipment manufacture (OEM) equipment which is to be
developed or qualified by ADA in accordance with the specifications referred to
in the Work Schedule, including all mechanical and electrical drawings for
components specified to the extent of ADA's legal right to do so.
"Master Agreement" means this document;
"Milestones" means the intermediate and final achievement dates specified in the
relevant Work Schedule that act as guide-posts for monitoring the progress of
the Work by identifying particularly critical portions of the Work and their
completion deadlines;
"Nortel Customer" means the end user, if any, identified in the Work Schedule to
whom Nortel will be providing the Custom Software under such Work Schedule;
"Nortel Prime" has the meaning ascribed thereto in Section 26.1 hereof.
"Other Arrangements" means other business relationships between Nortel and ADA
(or their respective subsidiaries or affiliates), including individual
development contracts, that may be conducted on terms and conditions other than
the terms and conditions set forth in this Master Agreement, as more fully
described in Section 2.8 hereof.
"RFQ", or "Request for Quotation" has the meaning ascribed thereto in Section
2.1(b) hereof;
"Services" means the services specified in the Work Schedule to be provided by
▇▇▇;
"Software" means the third-party software which is to be qualified by ADA in
accordance with the specifications referred to in the Work Schedule. Where such
software is required to be delivered to Nortel, or to be incorporated in a
Deliverable, this requirement shall be subject to ADA having the legal right to
do so, or to have Nortel's do so;
"Technical Proposal" means a systems requirements document, preliminary project
plan, quality plan, preliminary design review, high level design document,
interface specifications document, trackable schedule and integrated plan based
upon a Commercial Specification or equivalent as described in Section 2.1 hereof
and as set forth in ADA Document Number ▇▇-▇▇▇▇-▇▇▇▇ (Product Development
Overview), for product development phases as follows: project inception phase,
systems requirements phase, preliminary design phase and high level design
phase.
"Work" means the research and development activities, including development of
the Custom Software or Hardware, as applicable, specified in the Work Schedule;
"Work Schedule" means the added specific details of the Work to be done,
attached to or
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referencing this Master Agreement which is mutually agreed to in writing by the
parties, as amended from time to time as set forth in Article 13 below.
ARTICLE 2 - CONTRACT DOCUMENTS
2.1 a) When Nortel identifies an opportunity for which it requires ADA's
services, Nortel shall prepare a Commercial Specification or equivalent
which it will attach to a RFQ with sufficient information to enable ADA
to prepare the quotation described in Section 2.2 below.
b) All RFQ's shall indicate one of the following;
i) If ADA shall only be required to prepare a Technical Proposal, but
not be obliged to perform any further Work upon completion of that
Technical Proposal, as contemplated in Section 2.4 below.
ii) If ADA shall be required to commit to performing the Work
identified in the completed Technical Proposal in accordance with
Section 2.4 below, if requested to do so by Nortel.
iii) If neither i) or ii) above are specified, the parties shall meet,
after the Technical Proposal is completed, to determine what
further action, if any, they will take with respect to that
Technical Proposal.
2.2 Based upon the Commercial Specification and the RFQ, ADA will use its
best efforts (if such request can be accomplished within the current
resource commitment of Nortel) and its reasonable efforts (if such
request must be addressed by resources outside of the current Nortel
Commitment) to prepare a quotation for the preparation of a Technical
Proposal using the resources that are then committed by ADA under
Nortel's Firm Commitment (as defined in Article 14 below).
2.3 If Nortel accepts the quotation within the time frame for acceptance
set out in the quotation, if any, it shall signify such acceptance by
means of a purchase order approving the preparation of the Technical
Proposal by ▇▇▇.
2.4 Upon completion of the Technical Proposal and subject to Section 2.1 b)
above, Nortel may request ADA to perform certain Work based upon the
Technical Proposal, by means of a Work Schedule issued to ADA by
Nortel, along with a purchase order.
2.5 ADA shall, within five (5) Business Days of its receipt of the purchase
order and attached Work Schedule described in Section 2.4, advise
Nortel in writing of ADA's acceptance or rejection of the Work
Schedule. For Technical Proposal prepared pursuant to subsection
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2.1 b) ii), ADA shall acknowledge acceptance of the purchase order and
attached Work Schedules, within five (5) Business Days of receipt.
2.6 Upon ▇▇▇▇▇▇'s receipt of the written acceptance of the purchase order
and attached Work Schedule by ▇▇▇, a contract for the performance of
the Work described in the Work Schedule will, in each case, be formed.
Each such Development Agreement will consist exclusively of the terms
and conditions of this Master Agreement and the Work Schedule related
thereto. In case of conflict between this Master Agreement and the Work
Schedule, this Master Agreement shall govern unless it is specifically
provided in the Work Schedule that the Work Schedule is to govern.
2.7 The Work Schedule shall specify the Work to be done and Deliverables to
be provided and shall include provisions with respect to the following:
- the scope of the Work
- the estimated Contract Amount
- the project organization
- the project schedule including milestones
- the payment schedule
- Deliverables
- delivery dates
- the acceptance plan, conditions and specifications
- Nortel's responsibilities
- the change control procedure
and may include provisions with respect to the following:
- development process
- the decision request procedure
- shipping and transit insurance
- travel and living
- provisions relating to follow-on work
- liquidated damages for late delivery
- additional ADA responsibilities
- assumptions and dependencies
- resource allocations
- risk assessment
- quality and process standards
2.8 The parties acknowledge that from time to time, and notwithstanding
anything else in this Master Agreement, they may enter into Other
Arrangements, on terms different from those set out in this Master
Agreement. To the extent the Other Arrangements are entered
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into by ADA and Nortel solely on behalf of NSM: (i) if the terms of the
Other Arrangements are different from the terms set out in this Master
Agreement, the terms of the Other Arrangements shall apply; and (ii) if
the terms are not defined by the Other Arrangements, the terms of this
Master Agreement shall apply. Other Arrangements entered into on behalf
of a Nortel division, subsidiary or affiliate other than NSM shall not
be subject to the terms of this Master Agreement. The parties also
agree that, due to the requirements of the Nortel Licensing Agreements
with its parent companies, for any Other Arrangements to be valid, the
Other Arrangement must be executed by two officers of Nortel, failing
which the Other Arrangement shall be void and unenforceable by either
party.
2.9 ADA shall have the right to subcontract to ADA Canada, Inc. any
Services or Work, or portion thereof, and will give Nortel notice of
any such subcontract.
ARTICLE 3 - SCOPE OF WORK
3.1 ADA shall furnish all personnel, materials and supervision necessary to
perform the Work as defined in the Development Agreement, in accordance
with the terms of the Work Schedule.
3.2 Nortel shall have the right, at any time while the Work is in progress
and after review of progress reports, to order changes in the Work
pursuant to Article 13. Unless otherwise agreed to in writing the
provisions of this Master Agreement shall apply to all changes in the
Work.
3.3 (a) ADA shall have documented an auditable development process prior to
the commencement of any Work under any Development Agreement.
(b) ADA will be required to maintain its quality program as currently
defined by MPR Teltech's QA-QP-940601 and the referenced procedures, as
eventually merged into ADA's quality program defined by ADA20-0296-0000
Quality Manual which is based upon the relevant sections of ISO9001 and
BellCore TR-NWT-001252, unless deviations are defined in the
Development Agreement.
ARTICLE 4 - PERIOD OF PERFORMANCE
4.1 Both Nortel and ADA agree that time shall be of the essence herein and
ADA shall use its best efforts, within the current resource commitment
of Nortel, to commence and complete the Work in accordance with the
Work Schedule.
ARTICLE 5 - CONSIDERATION
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5.1 ADA shall be paid the Contract Amount for performance of the Work in
accordance with one of the following payment options and the selection
of the appropriate payment option for each Development Agreement will
be described in the Work Schedule:
(A) Time and Material Payment Option, which shall include the
following:
(i) An estimate of the price to Nortel to perform the Work, together
with an estimate of the price to perform that portion of the Work
applicable to each Milestone.
(ii) ADA will invoice Nortel monthly for the Work on the following
basis:
a. The actual hours required to perform the Work, in accordance
with the provisions of the Work Schedule, multiplied by the hourly rate
per employee classification, as agreed to by the parties;
b. All materials, contractors, and other preapproved project
expenses reasonably incurred by ▇▇▇ in connection with the performance
of the Work, at cost plus a markup as set out in Appendix A;
c. All pre-approved travel expenses reasonably incurred by ▇▇▇ in
connection with the performance of the Work, at cost plus a markup as
set out in Appendix A.
(iii) Changes to the rates set forth in Appendix A hereto will be
subject to revision as provided in Appendix A.
(iv) ADA shall notify Nortel forthwith upon ADA becoming aware during
the course of performance of the Work that the actual price of the Work
or any portion of the Work applicable to any Milestone is likely to
exceed the estimated price of the Work or portion of the Work, as the
case may be (hereinafter called the "Budget Overrun").
In addition to such notice, ADA shall forthwith provide Nortel
with a written report setting out ▇▇▇'s explanation or understanding of
the causes of any such Budget Overrun and ▇▇▇'s estimate of the cost to
Nortel to complete the Work or that portion of the Work applicable to
the Milestone.
(v) At such time as the price of performance of the Work equals the
estimated total price of the Work prior to completion of the Work, ADA
shall advise Nortel and no further costs shall be incurred by ADA
without the prior written consent of Nortel. Nortel will provide such
written consent in a timely manner, or will instruct ▇▇▇ as to what
action to take with regard to the unfinished Work.
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(B) Firm Price Option, which will mean ▇▇▇ will perform the Work
for a firm cost agreed upon in advance and set forth in the Work
Schedule. ADA shall be solely responsible for any Budget Overruns.
5.2 The Contract Amount, unless otherwise specifically provided in such
Work Schedule, is exclusive of any goods and services tax, custom and
excise duties, provincial, sales, use, ad valorem, or franchise taxes,
or other similar taxes or duties. Any such amounts billed by ADA to
Nortel will be paid promptly 30 days from the date of receipt of the
invoice to be paid, however, Nortel shall have 10 days to dispute any
invoice, failing which the invoice shall be paid within the
aforementioned 30 days. Payment shall not be due until the dispute is
settled.
5.3 ADA provides no warranty, actual or implied, that the work performed
will qualify as eligible scientific research and experimental
development as defined in the Income Tax Act. ▇▇▇ agrees that it will
take all commercially reasonable steps and provide all reasonable
assistance to establish such eligibility, at Nortel request and
expense.
5.4 The parties acknowledge that certain Work Schedules may contain Work to
be carried out partly under both Payment Options.
ARTICLE 6 - PAYMENT SCHEDULE
6.1 Any Development Agreement entered into between Nortel and ADA pursuant
to the terms of this Master Agreement shall provide for payment to be
made pursuant to the following options:
(a) Time and Material Payment Option:
Under the Time and Material Payment Option, ADA will issue monthly
invoices to Nortel in connection with the Work in accordance with the
provisions of Section 5.1 (A) (ii) hereof. Prior to the issuance of any
invoice, the ADA Prime, shall certify to Nortel in writing that such
amounts were calculated according to the formula set forth in Appendix
A, to be updated quarterly and as updated, attached hereto and
incorporated herein by reference, and were reasonably expended or
incurred by ▇▇▇ in the performance of the Work and attach said writing
to the invoice. ADA will be paid the amount so invoiced, as described
in Article 7 below.
(b) Firm Price Option:
Under the Firm Price Option, unless agreed otherwise in the Work
Schedule, ADA shall only issue an invoice upon delivery of any of the
Deliverables, which invoice shall become due on Acceptance of those
Deliverables for the value of those Deliverables, as
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set out in the Work Schedules.
6.2 An alternative payment arrangement may be negotiated for each project
by mutual written agreement of Nortel and ADA.
ARTICLE 7 - INVOICES
7.1 A maximum of one invoice per month shall be issued for each purchase
order issued by Nortel. Labour will be broken down into total hours and
total dollars per invoice and expenses incurred will be broken down by
category in accordance with ▇▇▇'s normal accounting methods. Terms of
payment shall be thirty (30) days from date of receipt of invoice by
Nortel provided, however, that Nortel shall be entitled to retain
twenty (20%) per cent of the aggregate amount of all such invoices
under Firm Price Option contracts, until the fortieth (40th) day
following Acceptance of the Work. Nortel shall have ten (10) days from
receipt of invoice to dispute the accuracy of the invoice, failing
which the invoice shall be due as aforesaid. Payment shall not be due
until the dispute is settled.
7.2 Nortel shall pay simple interest at the rate of prime plus one percent
on all overdue amounts owing to ADA after thirty (30) days.
ARTICLE 8 - AUDIT
8.1 ▇▇▇ agrees to keep and maintain complete and accurate records of costs
incurred in connection with the performance of the Work, and maintain
books and accounts in accordance with generally accepted accounting
procedures, principles and practices, and in accordance with such other
procedures, principles and practices as may be specified in the
applicable Work Schedule respecting all matters pertinent to this
Master Agreement and any Development Agreements formed hereunder. Upon
notice in writing, and at its expense, Nortel through its independent
auditors shall have access to and the right to audit all accounts and
records maintained for the Work during normal business hours. Provided,
however, that Nortel independent auditors shall not, unless otherwise
provided in the applicable Work Schedule, have such access or right to
audit such accounts and records for Work performed under the Firm Price
Option, save and except where the Development Agreement for the Work
has been terminated by Nortel in accordance with Article 16. Any claims
or discrepancies disclosed by such audit shall be made in writing to
ADA within a reasonable period of time after completion of such audit
for resolution between the Nortel Prime and the ADA Prime or by
reference to more senior management.
ARTICLE 9 - INFORMATION FROM NORTEL
9.1 ADA shall use its commercially reasonable efforts to identify in the
Work Schedule all
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information or documentation required for it to perform the Work and
deliver the Deliverables in the Work Schedule. However, if in execution
of the Work, ADA shall require additional information or documents from
Nortel, Nortel shall provide same, if possible, promptly upon written
request and reasonable notice from ADA. If Nortel fails to respond to
any request for information or documents as herein provided and the
failure to provide such information or documents results in ADA not
being able to meet its Milestones as set forth in the Work Schedule,
the Milestones shall be extended by the length of the period of delay
so caused.
9.2 In the event any Milestones are extended due to the unavailability of
information and documents from Nortel, ▇▇▇ agrees to use reasonable
efforts to allocate its manpower to other Work and to advise Nortel in
the event such manpower cannot, after the exercise of reasonable
efforts, be allocated to other Work.
9.3 As an alternative to extension of any Milestone, Nortel may direct ADA
to make assumptions regarding the information or documents required by
ADA from Nortel. Nortel will approve any reasonable assumptions made by
ADA and if such assumptions are subsequently shown to be invalid,
Nortel will provide ADA written approval to proceed with any necessary
re-Work and will treat such re-Work as a change in the Work pursuant to
Section 13.2.
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ARTICLE 10 - STATUS REPORTS
10.1 Status reports shall be detailed periodically or as set forth in the
Work Schedule and shall summarize progress, problems, financial
expenditure (including ▇▇▇'s estimate of the price to complete the
Work), and highlights in the execution of the Work. ▇▇▇ shall respond
promptly, verbally or in writing, if requested by Nortel to any
comments or queries of Nortel resulting from the review of status
reports. ADA shall notify Nortel immediately upon the satisfaction or
achievement of any Milestone or upon any Deliverable becoming available
for evaluation by Nortel or delivery to Nortel.
ARTICLE 11 - MEETINGS
11.1 At the request of either party and as specified in the Work Schedule,
Nortel and ADA shall meet to discuss matters related to the Work
including progress, review of results, analysis of problems, financial
expenditures, adequacy of information to be provided by Nortel pursuant
to Article 9 of the Development Agreement and changes in the Work.
11.2 Any costs incurred by ▇▇▇ in participating in such meeting will:
(i) in the case of the Time and Material Payment Option, be billed to
Nortel as part of the Work,
(ii) in the case of Work performed under the Firm Price Payment
Option, be included in the Firm Price as an anticipated and reasonable
expense in performing the Work.
ARTICLE 12 - INDEPENDENT CONTRACTOR
12.1 In the execution of the Work provided for herein, ADA shall operate as
an independent contractor, and nothing in this Master Agreement or any
Development Agreement formed hereunder shall be construed to constitute
ADA or any of its employees as an agent, representative or employee of
Nortel.
ARTICLE 13 - CHANGE CONTROL PROCEDURES AND ACCEPTANCE
13.1 The Work Schedule shall have a corresponding change control section to
accommodate requests by Nortel for changes to the scope of the Work.
Such requests for change are subject to the procedures set out in this
Article 13.
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13.2 Nortel-Originated Changes
Nortel may request changes to the Work in accordance with the following
procedure:
(a) Nortel shall advise ADA, in writing, of a desired change specifying
the desired change with sufficient details to enable ADA to evaluate
the change.
(b) Following receipt of a change request ADA will within five (5)
Business Days provide Nortel with an estimate (the "Preliminary
Estimate") of the estimated time to assess the change and the estimated
price of preparing such assessment. If ADA determines that it cannot
prepare the Preliminary Estimate within such period, ADA will advise
Nortel of the date by which the Preliminary Estimate will be available
and ADA will deliver the Preliminary Estimate by such date.
(c) Following receipt of the Preliminary Estimate, Nortel will, within
five Business Days (the "Response Period"), advise ADA in writing
whether or not to proceed with the assessment of the requested change.
If Nortel advises ADA not to proceed, the change request shall be
deemed withdrawn and ADA shall take no further action in respect of it.
If ▇▇▇ has not received written notice to proceed within the Response
Period, Nortel shall be deemed to have advised ADA not to proceed.
(d) If Nortel instructs ADA to proceed, ADA will prepare an assessment
(the "Assessment") of the impact, if any, of the desired change on the
Contract Amount, the Milestones, the time frame for completion, the
performance of the Deliverables and any other areas which in the
opinion of ADA are likely to be affected by the requested change.
(e) The Assessment shall constitute an offer from ADA to carry out
changes as requested subject to the provisions of the Assessment. The
offer shall be irrevocable for five (5) Business Days following the
receipt thereof by Nortel.
(f) If Nortel accepts ▇▇▇'s offer, the Work Schedule shall be deemed to
incorporate the change on the terms stated in the Assessment.
(g) ADA shall be entitled to recover outside any limit of maximum
expenditure specified in the Work Schedule, the price of preparation of
the Preliminary Estimate and the Assessment regardless of whether the
Assessment or change is proceeded with.
(h) Any change which either increases or decreases costs or modifies
Milestones or Deliverables, shall be implemented only with the prior
written consent of the Nortel Prime and the ADA Prime.
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13.3 ADA-Originated Changes
In the event ADA wishes to request a change it shall notify Nortel in
writing of the suggested change and provide Nortel with a Preliminary
Estimate and the provisions of 13.2 (c), (d), (e), (f) and (g) shall
apply except that ADA shall not be entitled to recover the cost of
preparing the Preliminary Estimate.
13.4 Acceptance of Work Performed Under Firm Price Option
Acceptance of Work performed under the Firm Price Option ("Firm Price
Work") shall only occur after delivery of the Deliverable to Nortel and
only in the event that there are no priority 1 and 2 problems, as
defined by the MPR classification system dated August 10, 1992,
identified during the verification testing stage, which testing is
performed by Nortel. The test plan shall be approved by ADA for Firm
Price Work where such procedure is not feasible, the alternate
acceptance procedure shall be set out in the Work Schedule.
Notwithstanding the foregoing, Nortel will accept or reject the Firm
Price Work within sixty (60) days after delivery by ADA; failure to
give notice of acceptance or rejection within that period by Nortel
will constitute acceptance.
ARTICLE 14 - FORECASTS
14.1 Nortel shall provide ADA with non-binding written twelve (12) month
rolling forecasts ("Non-Binding Forecasts") by month of ADA-resource
requirements and associated Development Agreements or Development
Agreements Nortel expects to place together with expected funding from
Nortel for such Development Agreements. The initial Non-Binding
Forecast shall be attached to this Agreement as Appendix B and shall be
updated monthly by Nortel by the last business day of the first month
included in the twelve (12)-month period covered by the latest
Non-Binding Forecast and shall be delivered to ADA no later than the
last business day of the month prior to the initial month included in
such updated Non-Binding Forecast. The non-binding funding commitment
and resource requirement (the "Non-Binding Commitments") shall be set
out in the format of the chart used in Appendix B of this Agreement.
Such Non-Binding Forecasts shall be solely for the purpose of allowing
ADA to allocate and plan for resource requirements in such 12-month
period and shall not be considered binding obligations of Nortel.
14.2 Nortel shall also provide ADA with binding written nine (9) month
rolling forecasts ("Firm Forecasts") by month of ADA-resource
requirements and associated Development Agreements or Development
Agreements Nortel expects to place together with expected funding from
Nortel for such Development Agreements. The initial Firm Forecast shall
be attached to this Agreement as Appendix C, shall provide for a
minimum of ** people for each of the nine (9) months and shall be
updated monthly by Nortel by the last business day of the first month
included in the nine (9)-month period covered by the
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latest Firm Forecast and shall be delivered to ADA no later than the
last business day of the month prior to the initial month included in
such updated Firm Forecast. The Firm Forecast funding commitment and
resource requirement (the "Firm Commitments") shall be set out in the
format of the chart used in Appendix C of this Agreement. Subject to
Sections 14.4, 14.5 and 14.6 below, such Firm Forecasts shall be
binding obligations upon Nortel to issue Development Agreements
sufficient to meet such Firm Forecasts or to accept ▇▇▇▇▇▇▇▇ by ▇▇▇ for
the Firm Commitments set forth for such month in the most recent Firm
Forecast.
14.3 For Development Agreements issued in accordance with this Article 14,
ADA shall confirm its acceptance thereof, which acceptance shall
include a commitment to staffing levels as set out in the Firm
Forecast. Changes to any aspect of the Firm Forecast may be made at any
time upon mutual agreement.
14.4 The initial Firm Forecast shall provide for Firm Commitments on a
monthly basis for nine (9) months. The Firm Commitments for the last
calendar quarter, or months seven, eight and nine, of such initial Firm
Forecast and any subsequent Firm Forecast shall be referred to as the
"Base Funding Levels." Subject to Sections 14.5 and 14.6 below, the
average Firm Commitments (as measured by funding levels) for the last
calendar quarter (or months seven, eight and nine) of any three
sequential Firm Forecasts may not vary by more or less than ** from
the Base Funding Levels of the immediately preceding Firm Forecast.
14.5 In the event that the aggregate Firm Commitments (as measured by
funding levels) for the last calendar quarter of any three sequential
Firm Forecasts as described in Section 14.4 above increases by more
than ** from the Base Funding Levels of the immediately preceding Firm
Forecast, ADA may: (a) accept the new Firm Forecast within ten (10)
days of receipt thereof; or (b) accept a portion of the additional
funding greater than ** of the Base Funding Levels of the immediately
preceding Firm Forecast, and instruct Nortel to acquire additional
development resources to meet the shortfall.
14.6 In the event that the aggregate Firm Commitments (as measured by
funding levels) for the last calendar quarter of any three sequential
Firm Forecasts as described in Section 14.4 above decreases by more
than **, ADA may: (a) accept the new Firm Forecast within ten (10)
days of receipt thereof; or (b) accept a portion of the decreased
funding greater than ** of the Base Funding Levels of the immediately
preceding Firm Forecast, and instruct Nortel that ADA cannot accept a
greater decrease without reimbursement by Nortel to ADA for all actual,
directly auditable costs actually incurred as a result of the decreased
funding, including without limitation third-party cancellation costs
for subcontractors directly involved in the cancelled Work,
out-of-pocket expenditures and severance payments to employees that are
terminated by ADA as a
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result of Nortel's decreased funding.
14.7 ▇▇▇ agrees to reduce ▇▇▇▇▇▇'s commitment from the then current
commitment under this Section 14 to the extent that Nortel transfers
commercial relationships to ADA, and ▇▇▇ accepts such transfer, as
contemplated in the Memorandum of Understanding between Nortel and ADA
(or its subsidiary) of the same date.
ARTICLE 15 - TERMINATION FOR CONVENIENCE
15.1 Subject to the terms and conditions of this Master Agreement, Nortel
may, from time to time by giving written notice to ADA, terminate any
Development Agreement with respect to all or any portion of the Work.
Upon such termination notice being given, ADA shall cease performance
of the Work in accordance with and to the extent specified in such
notice. Nortel may, at any time, give one or more additional
termination notices with respect to all or any portions of the Work not
terminated by any previous termination notice.
15.2 Subject to the terms and conditions of this Master Agreement, ADA may,
from time to time by giving written notice to Nortel, terminate any
Development Agreement with respect to all or a portion of the Work.
15.3 Upon termination by Nortel pursuant to Section 15.1:
(a) Nortel's Commitments shall be those contained in the most recently
accepted Firm Forecast for the nine month period covered by such forecast; and
(b) After the end of the most recently accepted Firm Forecast, Nortel
shall pay to ADA each following month an amount equal to (at Nortel's option)
(i) the amount per month contained in such most recently accepted Firm Forecast
reduced by ** per quarter or (ii) ADA's actual directly auditable cancellation
costs actually incurred, which are limited to (A) third-party cancellation costs
for subcontractors directly involved in the cancelled Work and (B) out-of-pocket
expenditures to employees and severance payments to employees that are
terminated by ▇▇▇ as a result of Nortel's termination hereunder.
15.4 Upon termination by ADA pursuant to Section 15.2, Nortel's Commitments
will be those set forth in the most recently accepted Firm Forecast,
and ▇▇▇ will work to such Firm Forecast for the nine month term of the
forecast. After the end of such Firm Forecast, ▇▇▇ agrees that it will
not without the consent of Nortel, reduce its commitments from that
contained for the last quarter of the most recently accepted Firm
Forecast any faster than ** per quarter, subject to Nortel's agreement
to fund such activities.
15.5 Neither party shall be held liable for indirect or consequential
damages or loss of
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anticipated profits of the other party on account of termination of
this Agreement other than as set forth in this Article 15 or in
Article 14.
ARTICLE 16 - TERMINATION FOR DEFAULT
16.1 Nortel may, at any time and from time to time, by notice of default to
ADA, terminate the whole or any part or parts of any Development
Agreement if ADA:
(i) fails to perform any of the other provisions of the Development
Agreement including performing the Work within the time or times
specified in the Work Schedule, or so fails to make progress so as to
endanger performance of the Development Agreement in accordance with
the Work Schedule, and, in either of these circumstances, does not cure
or take steps to promptly and diligently cure such failure within a
period of thirty (30) days after receipt of written notice from Nortel
or such longer period as Nortel may authorize; or
(ii)(a) applies for or consents to the appointment of a receiver,
trustee or liquidator of itself or of its property; or
(b) makes a general assignment for the benefit of creditors; or
(c) is adjudicated bankrupt or insolvent; or
(d) files a voluntary petition in bankruptcy or a petition or
answer seeking re-organization or an arrangement with creditors, or
takes advantage of any insolvency law, or admits to the material
allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding, or initiates a corporate
action for the purpose of effecting any of the foregoing.
16.2 ADA may, at any time and from time to time, by notice of default to
Nortel, terminate the whole or any part or parts of any Development
Agreement if Nortel:
(i) fails to perform any of the other provisions of the Development
Agreement including payment to ADA of amounts due thereunder, and does
not cure or take steps to promptly and diligently cure such failure
within a period of thirty (30) days after receipt of written notice
from ADA or such longer period as ADA may authorize; or
(ii)(a) applies for or consents to the appointment of a receiver,
trustee or liquidator of itself or of its property; or
(b) makes a general assignment for the benefit of creditors; or
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(c) is adjudicated bankrupt or insolvent; or
(d) files a voluntary petition in bankruptcy or a petition or
answer seeking re-organization or an arrangement with creditors, or
takes advantage of any insolvency law, or admits to the material
allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding, or initiates a corporate
action for the purpose of effecting any of the foregoing.
16.3 If Nortel terminates any Development Agreement as provided in Section
16.1, ADA shall have no claims for any payment save as hereinafter
provided in this Article 16.
16.4 Upon a partial termination pursuant to this Article 16, ADA and Nortel
shall continue the performance of the Development Agreement to the
extent it is not terminated or otherwise affected by such partial
termination and shall not stop, suspend or impair any other aspect or
portion of the performance of the Development Agreement.
16.5 Upon a termination of any Development Agreement pursuant to Section
16.1, and subject to Article 18 below, Nortel, in addition to any other
rights of Nortel in this Article 16, may require ADA to transfer title
and deliver to Nortel, in the manner and to the extent directed by
Nortel, any Work which has not been delivered and accepted prior to
such termination.
16.6 If, after notice of termination of the Development Agreement under the
provisions of this Article 16, it is determined by a court of competent
jurisdiction that the party allegedly in default was not in default,
such notice of termination shall be deemed to have been issued pursuant
to Article 15, TERMINATION FOR CONVENIENCE, and the rights and
obligations of ADA and Nortel shall be governed by the provisions of
that Article.
ARTICLE 17 - CHANGE IN CONTROL
17.1 In the event that ADA becomes majority owned or controlled by an entity
which is a direct competitor of Nortel, ADA shall forthwith provide
written notification to Nortel of such change in majority ownership or
control. Within thirty (30) days of receipt of such notice, Nortel may,
in its sole discretion, elect to terminate without cost or penalty
whatsoever this Master Agreement provided the acquiring entity is
reasonably determined to be a direct competitor of Nortel.
ARTICLE 18 - INVENTIONS AND IMPROVEMENTS
18.1 ▇▇▇ agrees to disclose and cause its employees to disclose promptly to
Nortel any inventions, designs or improvements capable of patent,
copyright or similar protection, made or conceived by such employees
either alone or jointly with others in the course of
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21
or as a result of the Work done hereunder, or as a result of
information supplied hereunder, directly or indirectly, by ▇▇▇▇▇▇. ▇▇▇
further agrees that all such inventions, designs or improvements shall
without further payment become and remain the sole property of Nortel.
The parties acknowledge and agree that they intend to enter into a
license agreement whereby certain rights shall be granted to ADA with
respect to the inventions, designs or improvements owned by Nortel
hereunder (the "License Agreement"). Subject to the provisions of
Article 24, it is understood that any technology, inventions, designs
or improvements owned by ▇▇▇ before starting the Work remain the
property of ADA, but shall be disclosed by notice in writing to Nortel
prior to starting the Work.
18.2 ADA agrees that it shall, at the discretion and expense of Nortel take
all steps and will cause its employees to take all steps necessary to
apply for and to obtain patents, registered design or similar
protection in respect of any inventions, designs or improvements which,
by the provisions hereof, belong to Nortel in any part of the world as
Nortel may require and shall vest all such patents, registered designs
or similar protection in Nortel or as Nortel may direct; provided ADA
shall only be required to pursue such protection when the costs
associated with such pursuit are covered by the Firm Commitment
hereunder or otherwise paid by ▇▇▇▇▇▇.
18.3 ADA will, at the direction and expense of Nortel, render all assistance
and cause its employees to render all assistance within their power to
obtain and maintain any such patent, registered design or similar
protection and any extension thereof.
18.4 Each party warrants that it has and will maintain in effect during the
term of this Master Agreement, appropriate agreements with its
employees to carry out the obligations as to confidentiality and
inventions and improvements.
18.5 ADA shall own any Inventions that may be retained in non-tangible form
by ADA employees who had access to the Work.
ARTICLE 19 - RIGHTS NOT CONFERRED
19.1 ▇▇▇ agrees that this Master Agreement does not confer any right to do
all or any given proportion of Nortel's work.
ARTICLE 20 - ASSIGNMENT
20.1 Neither party may assign all or any portion of this Master Agreement,
any Development Agreement formed hereunder or the Work without the
other party's prior written consent, such consent not to be
unreasonably withheld. Notwithstanding the foregoing, a party may
assign and transfer this Master Agreement and its rights and
obligations hereunder to
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22
its parents, affiliates or subsidiaries. Furthermore, ADA may
subcontract to ADA Canada, Inc. any Services or Work, or any portion
thereof without obtaining Nortel's consent. In no event shall either
party create any contractual relation between any third party and the
other.
ARTICLE 21 - COMPLIANCE WITH LAW
21.1 ADA shall observe and comply with all applicable laws, ordinances,
codes and regulations of governmental agencies, including federal,
provincial, municipal and local governing bodies having jurisdiction
over the Work or any part thereof. All work performed by ▇▇▇ must be in
accordance with such laws, ordinances, codes and regulations.
ARTICLE 22 - PUBLICITY RELEASE
22.1 The parties understand and agree that they may not use each other's
name in any advertising or promotional material or publicity release
relating to the Work to be performed by the other hereunder without the
prior written consent of the other and that no publicity release of the
Work shall be made except with the prior written consent of both
parties, such consent not to be unreasonably withheld or delayed.
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23
ARTICLE 23 - CONFIDENTIAL INFORMATION
23.1 All technical and commercial information, documentation and know-how of
every kind and description ("Information") supplied whether before or
after execution of this Master Agreement, other information related
thereto acquired or developed by either party in connection with this
Master Agreement or any Development Agreement, subject to what is
hereinafter provided, shall be confidential and the exclusive property
of the disclosing party, and the receiving party shall treat and
protect such Information as proprietary and confidential information,
shall not reproduce or divulge said Information in whole or in part to
third parties except as may be required for the performance of its
obligations under this Agreement, provided such third parties agree in
writing prior to such disclosure to keep such Information confidential
upon the same terms as herein contained. The parties shall return each
others Information and all copies thereof forthwith upon its request.
This confidentiality obligation shall survive termination or expiry of
the Development Agreement.
23.2 Notwithstanding the foregoing, ADA shall not be liable for disclosure
of the Information if:
(a) the Information enters the public domain other than through a
breach of the Development Agreement;
(b) the Information is lawfully obtained by ▇▇▇ from a third party
without breach of the Development Agreement by ▇▇▇;
(c) Nortel has provided its prior express written approval for such
disclosure by ▇▇▇;
(d) the Information was known to ADA prior to the commencement of the
Development Agreement and so documented;
(e) was independently developed by employees or consultants of the
receiving party without access to such Information; or
(f) is required to be disclosed to governmental agencies in order to
complete Work, or disclosure is otherwise required by law, regulation
or governmental or court order.
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24
ARTICLE 24 - PATENTS AND INFORMATION
24.1 ▇▇▇ agrees that it will not knowingly incorporate anything in the Work
which involves the use of a trade secret or proprietary information of
any third party without the prior written approval of Nortel, such
approval not to be unreasonably withheld.
24.2 ADA shall, at its expense, timely defend any suit instituted against
Nortel and indemnify Nortel against any award of damages and costs made
against Nortel in any suit insofar as such is based on a claim that the
use of the Work or Deliverables, or the manufacture, lease, sale or
sublicensing of same infringes any patent, copyright, or other
industrial or intellectual property right, in the United States,
Canada, any member country of the European Economic Community, or
Japan, except to the extent the claim is based on (i) ADA's compliance
with or use of designs, requirement specifications, or alterations
supplied, developed or requested by Nortel, and the infringement is
necessitated by such compliance or (ii) infringement is caused by the
use of with another product in combination with the Deliverables or
Work whose use with the Deliverables or Work was not otherwise intended
or reasonably foreseen by the ADA based on the information available to
it or (iii) the Work or Deliverables are altered and the infringement
results from that alteration. Provided Nortel gives ADA timely notice
in writing of the institution of suit and permits ADA to defend same
and provides, at ▇▇▇'s request and expense, all available information,
assistance and authority to so defend such suit and any appeals. ADA
shall have sole control of the defense of any such claim or suit
including appeals and of all the negotiations for settlement, including
the right to effect the settlement or compromise thereof. If any
element of the Work or Deliverables is in any suit held to constitute
an infringement and its use is enjoined, ADA may at its option and
expense:
(a) procure for Nortel and any Nortel Customer the right to continue
using such infringing element; or
(b) replace or modify the same so that it becomes non-infringing,
provided, however, the essential attributes of the element remain the
same.
(c) Where after exercising all reasonable efforts to obtain the rights
set out in a) or b) above, neither alternative is possible, ADA shall
refund all of the monies paid by Nortel pursuant to the Development
Agreement which has given rise to the infringement.
24.3 The indemnity set out in Section 24.2 shall only be extended to
countries other than those set forth therein upon mutual agreement of
the parties with respect to any specific Work or Deliverable.
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25
ARTICLE 25 - WARRANTY AND LIABILITY
25.1 ADA warrants that, upon Acceptance by Nortel, each Deliverable will be
of good quality and workmanship and will meet the specifications set
out in the Work Schedule for a period of twelve (12) months or such
greater period as may be specified in the Work Schedule and that the
"design life" of each Hardware Deliverable will meet or exceed the
design life specified for that Deliverable, if any, in the Work
Schedule. If any Deliverable does not conform with such warranty, ADA
will remedy the deficiencies so that the Deliverable conforms to the
specifications set out in the Work Schedule.
25.2 Under Firm Price contracts, the cost of the warranty coverage referred
to in this Article will be borne by ▇▇▇; under Time & Materials
contracts, such costs shall be charged to Nortel on a Time & Materials
basis. In the event that neither of these methods of payment applies,
the parties will address the cost of warranty coverage in the
individual Technical Proposals.
25.3 ADA warrants that the personnel performing the Work will be qualified
and capable of performing the Work.
25.4 (a) The foregoing warranty for Deliverables will not apply to, and ADA
will have no obligation or liability whatsoever in respect of, defects
or damage caused by unauthorized use, misuse, accident, external cause,
installation error (except where installed by or on behalf of ADA) or
normal wear and tear. All of the foregoing warranties and remedies are
in lieu of all other warranties and remedies.
(b) Unless specifically defined otherwise ADA does not give and will
not be liable for any warranties, representations, or guarantees of any
kind, either express or implied by law or custom, regarding any
products derived from or based on the Deliverables (hereinafter called
the "Products") or the performance of the Products or their usefulness,
including those regarding fitness for purpose, merchantability,
condition, design, title, infringement of third party rights, or
conformance with sample.
(c) In no event will ADA be liable to Nortel or to any other party for
damages, including but not restricted to, damages for lost profits,
lost savings, or punitive, exemplary, incidental, consequential or
special damages in respect of the Products, even if ▇▇▇ has advance
knowledge of the possibility of such potential loss or damage and even
if caused by ▇▇▇'s negligence. If, despite the foregoing limitations,
for any reason ▇▇▇ becomes liable to Nortel for damages incurred by
Nortel in connection with any of the Products, then, the liability of
ADA will be limited to an amount equal to the price paid by Nortel to
ADA for the Development Agreement that gives rise to the claim for
damages.
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ARTICLE 26 - SPONSORS AND PRIMES
26.1 Nortel will appoint a Prime (hereinafter called the "Nortel Prime") and
ADA will appoint a prime (hereinafter called the "ADA Prime") for each
Development Agreement (collectively the "Primes"). The address of the
applicable Primes will be identified in the Work Schedule of the
applicable Development Agreement.
ARTICLE 27 - NOTICES
27.1 All communications in writing between Nortel and ADA related to a
specific Development Agreement shall be deemed to have been received by
the addressee if delivered to the appropriate Primes or if sent by
courier or facsimile transmission addressed to the appropriate Prime at
the address provided in the Work Schedule or such other address for the
Prime as have been designed in writing by either party to the other.
27.2 All communications in writing between the parties hereto of a general
nature and not related solely to a single Development Agreement for
Work shall be deemed to have been received by the addressee if sent by
courier or facsimile transmission addressed as follows:
If to Nortel:
Northern Telecom Limited
NSM Division
150-▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Manager
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With a copy to:
Northern Telecom Limited
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Deputy Vice President and General Counsel
If to ADA:
Applied Digital Access, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
With a copy to:
ADA Canada, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
27.3 Invoices shall be sent to the address indicated for Nortel above, for
the attention of Accounts Payable.
27.4 All notices given hereunder shall be given in writing and delivered or
faxed. Such notice shall be deemed to have been received upon delivery.
ARTICLE 28 - APPLICABLE LAW
28.1 This Master Agreement and all Development Agreements formed hereunder
shall be governed and construed in accordance with the laws of the
Province of British Columbia.
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ARTICLE 29 - CONTINUING OBLIGATIONS
29.1 The provisions of Articles 18 - Inventions and Improvements, 21 -
Compliance with Law, 22 - Publicity Release, 23 - Confidential
Information, 24 - Patents and Information and 25 - Warranty and
Liability shall survive the termination of this Master Agreement and
any Development Agreement formed hereunder.
ARTICLE 30 - WAIVERS
30.1 The waiver by either party hereto of any breach of any term of this
Master Agreement or any Development Agreement formed hereunder shall
not prevent the subsequent enforcement of that term and shall not be
deemed a waiver of any subsequent breach.
ARTICLE 31 - TERM OF AGREEMENT
31.1 This Master Agreement shall commence upon execution by both parties
hereto, and shall continue until terminated by either party upon ninety
(90) days' advance notice in writing. Termination of this Master
Agreement will not affect the status of any Development Agreement
formed hereunder or work performed in pursuance thereof.
ARTICLE 32 - ENTIRETY OF CONTRACT
32.1 The preceding articles of this Master Agreement and the Work Schedule
issued and acknowledged pursuant to Article 2 hereof contain the entire
Development Agreement between the parties with respect to the Work
described in the Work Schedule. All previous proposals and
communications relative to such Work, oral or written, will be
superseded by this Master Agreement and the Work Schedule except to the
extent that they have been expressly incorporated in the Development
Agreement. Notwithstanding the fact that the Prior Agreement has been
formally assigned to ADA (or its subsidiary), the parties agree that in
the event of any inconsistency between (a) the Prior Agreement (or any
business agreement or other document assigned contemporaneously to ADA
or any subsidiary) and (b) this Agreement or the License Agreement
between Nortel and ADA (the "New License Agreement"), the terms of this
Agreement and the New License Agreement shall control.
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ARTICLE 33 - APPENDICES
33.1 The following appendices are attached to this Master Agreement and are
deemed to form a part hereof:
A - ADA Rates;
B - Non-Binding Forecast; and
C - Firm Forecast.
ARTICLE 34 - FORCE MAJEURE
34.1 Neither party to this Agreement shall be liable for its failure to
perform any of its obligations hereunder during any period in which
such performance is prevented by any cause beyond its reasonable
control. In the event of any such delay the date of delivery or
performance hereunder shall be extended by a period equal to the time
lost by reason of such delay.
ARTICLE 35 - ARBITRATION
35.1 All disputes arising out of or in connection with this Master Agreement
shall be referred to and finally resolved by arbitration under the
rules of the British Columbia International Commercial Arbitration
Centre, in respect of which:
(a) the appointing authority shall be the British Columbia
International Commercial Arbitration Centre;
(b) the arbitration shall be conducted by a single arbitrator unless
the parties agree otherwise;
(c) the case shall be administered by the British Columbia
International Commercial Arbitration Centre in accordance with its
"Procedures for Cases under the BCICAC Rules"; and
(d) the place of arbitration shall be Vancouver, British Columbia,
Canada.
The prevailing party in any arbitration or legal action arising out of
or related to this Master Agreement shall be entitled, in addition to
any other rights and remedies it may have, to reimbursement for its
expenses incurred in such arbitration or action, including court costs
and reasonable legal fees.
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ARTICLE 36 - AMENDMENT
36.1 No amendment, modification, supplement or other purported alteration of
this Master Agreement shall be binding upon the parties unless it is in
writing and is signed on behalf of both parties by their duly
authorized representatives.
ARTICLE 37 - WITHHOLDING
37.1 ▇▇▇ believes that neither this Agreement (or any term hereof) nor the
performance of or exercise of rights under this Agreement requires tax
withholding under any law or regulations promulgated by any
organization, province, group of provinces, or political or
governmental entity located within Canada. Nortel agrees not to
withhold any amounts payable to ADA, without the written consent of
ADA, unless Revenue Canada has made a specific determination or
assessment that such amounts must be withheld. ▇▇▇ agrees to indemnify
and hold harmless Nortel in respect of any amounts, including without
limitation, withholding taxes, penalties and interest, that Revenue
Canada may determine Nortel failed to properly withhold pursuant to
this Agreement.
IN WITNESS WHEREOF the parties have executed this Master Agreement as
of the day and year first above written
NORTHERN TELECOM LIMITED
Per:_____________________________________
Per:_____________________________________
APPLIED DIGITAL ACCESS, INC.
Per:_____________________________________
Per:_____________________________________
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APPENDIX A TO MASTER AGREEMENT
ADA RATES
The price of ADA engineering services for the purposes of this Agreement will be
computed as follows:
***
***
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APPENDIX B TO MASTER AGREEMENT
NON-BINDING FORECAST
APPENDIX B - PAGE 1
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APPENDIX C TO MASTER AGREEMENT
FIRM FORECAST
APPENDIX C - PAGE 1
****
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