MASTER PURCHASE AGREEMENT
This Master Purchase Agreement ("Agreement"), effective as of the 16th day of
July, 1998, is entered into by and between PICKNET, Inc., (hereinafter
"Company") a wholly owned subsidiary of PICK Communications Corporation, with
offices located at ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ and Northern
Telecom Inc. (hereinafter "Nortel"), with offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Nortel is engaged in the design, development, manufacture and sale
of various products and offers services associated with such products, which can
be used in connection with the telecommunication services, products and networks
of Company; and
WHEREAS, Company and its Affiliates wish to be able to purchase and/or
license various Products and Services from Nortel and its Affiliates as set
forth in initial Product Annex Exhibits attached hereto, and incorporated herein
by reference, or added subsequent to the execution of this Agreement via written
bilateral amendment hereto, which Company and its Affiliates will use themselves
and not resell or sublicense to third parties, and Nortel is willing to sell
and/or license such products to Company and its Affiliates, subject to the terms
and conditions of this Agreement; and
WHEREAS, in recognition of Company's commitment to purchase Nortel Products
and Services globally during the term of this Agreement, Nortel shall offer
certain purchase incentives to Company and its Affiliates as detailed in the
applicable Product Annex Exhibits;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth, the parties agree as follows:
ARTICLE 1. DEFINITIONS
The following words shall have the meanings set forth below. Words in the
singular shall be held to include the plural and vice versa and words of gender
shall be held to include the other genders as the context requires.
1.1 "Acceptance" shall mean that Company has indicated that an ordered
Product is operating in accordance with the applicable Specification.
1.2 "Affiliate" shall mean any entity listed in Exhibit A in which
either Nortel or Company directly or indirectly owns and controls, and continues
to own or control, at least fifty percent (50%) of the shares or other ownership
rights entitled to elect the Board of Directors or equivalent of such entity.
Each party agrees that the other party may add to Exhibit A any entity which the
party directly or indirectly owns and controls, and continues to own or control,
at least fifty percent (50%) of the shares or other ownership rights entitled to
elect the Board of Directors or equivalent of such entity. Any other entity
shall only be added upon mutual consent of the parties in writing.
1.3 "Applications" shall mean any program, product, service,
development or invention developed by a party using the Building Blocks,
including any modified or created Building Blocks, created by Company.
1.4 "Building Block(s)" shall mean those Software files provided by
Nortel with Modifiable Software that are manipulatable or which may be created
by Company with such Modifiable Software and which can be used, created or
manipulated by Company to create Applications.
1.5 "Confidential Information" shall mean all information, including,
without limitation, specifications, drawings, documentation, know-how and
pricing information, of every kind or description which may be disclosed by
either party to the other party in connection with this Agreement, provided the
disclosing party shall clearly ▇▇▇▇ all such information disclosed in writing or
other tangible media as the confidential property of the disclosing party and,
in the case of oral disclosure, the disclosing party shall identify the
confidential nature of any such information which it discloses at the time of
such disclosure and shall provide a written summary of the orally disclosed
information to the recipient within fifteen (15) days of such disclosure.
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1.6 "Contract" shall mean an agreement for the supply of Products
and/or Services between Company or a Company Affiliate and Nortel or a Nortel
Affiliate, which comes into effect by the acceptance of an Order pursuant to the
provisions hereof, and which Contract shall be governed solely by the terms and
conditions of this Agreement.
1.7 "Customer Information" or "CI" shall mean the information provided
by Company to Nortel in order for Nortel to engineer and/or provide the
components of Systems.
1.8 "Documentation" shall mean the documents which Nortel generally
makes available to its customers containing descriptive, operating,
installation, engineering and maintenance information for Products, including
Specifications, as such documents may be amended from time to time.
1.9 "Effective Date" shall mean the date this Agreement becomes
effective which shall be the date identified on the first page of this
Agreement.
1.10 "Extension" shall mean Hardware and/or Software which is
engineered by Nortel and which is added to an Initial System after the Turnover
Date of the Initial System.
1.11 "Free Carrier" / "FCA" shall have the meaning ascribed to it in
Incoterms 1990.
1.12 "Hardware" shall mean, individually and collectively, the
equipment listed in Exhibit C, and shall be deemed to include any equipment in
the categories in Exhibit C which Nortel adds to its generally available price
lists or identifies to Company in a Quotation.
1.13 "Hazardous Material" shall mean any pollutants or dangerous, toxic
or hazardous substances (including without limitation, asbestos) as defined in,
or pursuant to the OSHA Hazard Communication Standard (29 CFR Part 1910, Subpart
Z), the Resource Conservation and Recovery Act (15 USC Section 6901, et seq.),
the Toxic Substances Control Act (15 USC Section 2601, et seq.), the
Comprehensive Environmental Response Compensation and Liability Act (42 USC
Section 9601, et seq.), and any other federal, state or local environmental law,
ordinance, rule or regulation or equivalent law or regulation in the country to
which the Product is shipped.
1.14 "Initial System" shall mean Hardware and Software, inclusive of a
central processor unit, included in a configuration which Nortel identifies as a
System and which is initially engineered by Nortel and installed at a specific
Installation Site.
1.15 "Installation Site" shall mean the location or facility identified
in an Order at which the applicable Products will be installed.
1.16 "Licensed Software" shall mean the Software which Company has
licensed pursuant to this Agreement.
1.17 "Merchandise" shall mean any Hardware or other parts or components
which are not ordered as part of a System and with respect to which no
engineering, installation or other Services are provided by Nortel.
1.18 "Modifiable Software" shall mean Software, or a portion of
Software that is identified as such by Nortel in its applicable Documentation,
which Company may have certain rights to modify and potentially create
Applications or Building Blocks in accordance with the applicable Documentation.
1.19 "Non-Licensed Software" shall mean Software for which Company has
not yet obtained a license nor paid applicable right-to-use fees, but which
Software may be included with Software loads delivered to Company hereunder.
1.20 "Order" shall mean a written, numerically controlled purchase
authorization document issued by Company or a Company Affiliate to Nortel or a
Nortel Affiliate, specifying the types and quantities of Products and Services
to be furnished by Nortel.
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1.21 "Products" shall mean, individually and collectively, the
Hardware, Software, and Documentation.
1.22 "Product Annex" shall mean, with respect to a specific Product
category, additional terms and conditions as set forth in Exhibit B, inclusive
of but not limited to those that may apply to any Third Party Hardware or Third
Party Software, unique to such Product.
1.23 "Quotation" shall mean a written budgetary or firm price quotation
issued by Nortel to Company for the supply of any Products or Services pursuant
to this Agreement.
1.24 "Services" shall mean, individually and collectively, any of the
services set forth in this Agreement that Company may acquire from Nortel, such
as but not limited to, maintenance, engineering, installation, training, data
management, program management, project management, commissioning, testing,
technical assistance Services with respect to Products and installation, and
consulting.
1.25 "Services Software" shall mean that Software and related
documentation made available by Nortel which may be used by Company for
estimation, planning or information purposes.
1.26 "Ship Date" shall mean the date on which a Product ordered by
Company is scheduled to be shipped as agreed to by the parties, or in the case
of Software which is downloaded, the date upon which such Software is to be
downloaded to the System.
1.27 "Software" shall mean (i) computer programs in object code form or
firmware which (a) are owned by, or licensed to, Nortel, (b) reside in Hardware
memories, tapes, disks or other media, and (c) provide basic logic operating
instructions and user-related application instructions, and (ii) documentation
associated with such computer programs which may be furnished by Nortel to
Company from time to time, including both Licensed Software and Non-Licensed
Software.
1.28 "Software Release" shall mean Software or revisions to Software
containing problem fixes, new features and/or enhancements.
1.29 "Specifications" shall mean with respect to any Product the
specifications and/or practices set forth in Northern Telecom Practices ("NTPs")
or similar documents published by Nortel which Nortel identifies as the standard
performance specifications and practices for such Product.
1.30 "Standard Interval" shall mean the standard lead time for shipment
of a Product following acceptance of an Order by Nortel as defined in Exhibit E.
1.31 "System" shall mean a configuration of Hardware and Software
providing a specified functionality and includes an Initial System and its
Extensions, if any.
1.32 "Third Party Hardware" shall mean any equipment not of Nortel`s
manufacture.
1.33 "Third Party Software" shall mean any Software not owned by Nortel
which is included within Licensed Software or Non-Licensed Software.
1.34 "Territory" shall mean a geographic area as specified in Exhibit B
hereto for each Product except to the extent that there is a limitation on the
ability of Company or its Affiliates to acquire Products in a country, such
limitations are set forth in Exhibit F.
1.35 "Turnover" shall mean, with respect to any System installed by
Nortel, that Nortel has completed its standard and/or agreed-upon test
procedures and that the System is ready for acceptance testing by Company.
1.36 "Turnover Date" shall mean, with respect to any Product installed
by Nortel hereunder, the date on which Nortel provides a notice of Turnover to
Company.
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ARTICLE 2. SCOPE OF AGREEMENT
2.1 This Agreement sets forth the terms and conditions under which
Company and its Affiliates may order Products and/or Services from Nortel and
its Affiliates. Any Order placed by a Company Affiliate and accepted by Nortel
or a Nortel Affiliate, as applicable, under this Agreement, shall be subject to
the terms and conditions of this Agreement, as if each such Affiliate was the
party that executed this Agreement with respect to each such Order, and
references in this Agreement to "Company" shall mean the ordering Company
Affiliate, and references to "Nortel" shall mean Nortel or the accepting Nortel
Affiliate, as applicable.
2.2 To the extent any terms and conditions set forth in this Agreement
are inapplicable to a Product, the applicable terms and conditions and any
additional terms and conditions for such Product shall be set forth in a Product
Annex.
2.3 Fifteen (15) days prior to the first day of each calendar quarter,
Company shall submit to Nortel a consolidated non-binding forecast of Products,
by geographic region, that Company anticipates purchasing or licensing over the
next four (4) calendar quarters. In addition to the type, quantity and
cumulative dollar amount of Products, the parties may agree upon additional
information to be included in the forecast.
2.4 All references to prices, charges, fees or other monetary amounts
herein shall be in United States ("U.S.") Dollars, and all documentation,
correspondence and communication shall be in the English language.
ARTICLE 3. PLACEMENT OF ORDERS
3.1 When Company desires to order Products and/or Services, Company
shall submit to Nortel's Director, Commercial Marketing or such other person as
Nortel shall designate, an Order which shall at a minimum specify the following:
(i) the name of Company or the Company Affiliate which shall be
placing the Order;
(ii) the types and quantities of Products and Services to be
furnished by Nortel;
(iii) the name and address, as set forth in Exhibit A, of Nortel's
Affiliate that will be providing the Products and/or Services
being ordered in the country in which the Products and/or Services
are to be placed and/or performed, as appropriate;
(ii) the applicable prices, charges and fees with respect to such
Products and Services;
(iii) the location or facility to which the Products are to be
delivered;
(iv) the incorporation by reference of this Agreement;
(vii) the location at which the Product is to be installed, if
known;
(viii) the requested Ship Date and Turnover Date of the System;
(ix) any other information required under this Agreement to be
included in an Order.
3.2 All purchases pursuant to this Agreement shall be made by means of
Orders issued from time to time by Company or an applicable Company Affiliate
and accepted by Nortel or an applicable Nortel Affiliate in writing within
fifteen (15) days after receipt of Order. An Order issued pursuant to the terms
and conditions of this Agreement, and which Nortel or an applicable Nortel
Affiliate has accepted, shall constitute a Contract between Company or the
applicable Company Affiliate issuing the Order and Nortel or the applicable
Nortel Affiliate accepting the Order. In the absence of acceptance of an Order,
the Order shall be deemed to be void.
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3.3 Each Order for Products or Services by Company or a Company
Affiliate for delivery, installation or performance in the U.S. shall be issued
to Nortel. Each Order for Products and Services by Company or a Company
Affiliate for delivery, installation or performance outside the U.S. shall be
issued to the Nortel Affiliate responsible for the applicable non-U.S.
jurisdiction as indicated in Exhibit A or as specified by Nortel's Director,
Commercial Marketing, or such other person as designated by Nortel, who shall
forward non-U.S. Orders to the applicable Nortel Affiliate for acceptance and
fulfillment.
3.4 The parties agree that all Orders issued by Company or a Company
Affiliate for Products and Services shall be deemed to incorporate the terms of
this Agreement, and the terms and conditions herein shall govern the Contract
resulting from such Order provided that such Order is accepted by Nortel or the
applicable Nortel Affiliate, whether or not such Orders expressly refer to this
Agreement. Preprinted terms and conditions set forth in Orders issued by
Company, or in any prior Quotations, acknowledgments or other related
documentation issued by any party, shall be considered void and shall have no
force or effect; provided, however, that any special terms and conditions
written on the face of an Order or otherwise incorporated into such Order shall,
upon acceptance in writing by Nortel, and for such Order only, supersede the
specific terms and conditions contained herein which may be in conflict
3.5 Company may at any time request additions, alterations, deductions
or deviations to an Order subject to the condition that such changes and any
adjustments resulting from such changes including, but not limited to, schedules
and prices, shall be mutually agreed upon and, if so agreed, subsequently
detailed in a written revision to the applicable Order ("Change Order"). Company
acknowledges that a premium charge may be applied by Nortel should Nortel agree
to process a Change Order outside of its standard Order processing cycle for a
Product or in the event that a Change Order requires an additional amount of
work (such as engineering) to be undertaken to comply with such changes.
3.6 If Company desires to receive a budgetary or firm Quotation from
Nortel for a Product or Service, Company shall submit such request in writing to
Nortel's Director, Commercial Marketing, or such other person as designated by
Nortel. The request for information shall include the information listed in
Section 3.1, as applicable.
3.7 Nortel shall respond in writing to requests for budgetary
Quotations and requests for firm Quotations. Unless otherwise specified in the
Quotation, such Quotation shall be valid for ninety (90) days. All prices will
be quoted in U.S. dollars, unless otherwise agreed. Quotations shall include the
following information:
(i) Budgetary Quotations
(a) preliminary Hardware and Software lists;
(b) the estimated charges for the Products;
(c) the estimated charges for Services requested; and
(d) any other information required by Company's request
(ii) Firm Quotations
(a) the price to be paid by Company for the Products, after
applying the applicable discounts, if any;
(b) fixed charges for Services requested;
(c) complete Hardware and Software lists and project schedules;
and
(d) any other information required by Company's request.
3.8 The Ship Date for an Order shall be based on Nortel's Standard
Intervals for the applicable Product; however, the parties shall always mutually
agree on the Ship Date and take into consideration any unique aspect of the
applicable project Exhibit E provides Nortel's Standard Intervals for Products,
but is intended for reference purposes only and is not binding on Nortel.
3.9 Orders may be issued either electronically, such as through
electronic data interchange, or via traditional manual methods, as mutually
agreed to by the parties. However, Company shall only use such electronic
methods as are utilized by Nortel or the applicable Nortel Affiliate.
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3.10 Unless otherwise agreed to and accepted or otherwise approved by
Nortel or a Nortel Affiliate, as applicable, in writing on an Order-by-Order
basis in accordance with the terms set forth in Section 3.4 of this Agreement,
Company absolutely, irrevocably and unconditionally guarantees the performance
of every Company Affiliate issuing Orders and/or otherwise acting under this
Agreement and any Contract created thereby. Company hereby expressly waives any
other diligence, protest or notice as well as any requirement that Nortel
exhaust any remedy or right against the Company Affiliate.
ARTICLE 4. PRICE AND PAYMENT
4.1 Nortel shall invoice Company for each Product and/or Service
ordered by Company in accordance with the prices set forth in Exhibit C, in a
Firm Quotation or as specified elsewhere in this Agreement.
4.2 All Products shall be priced and delivered in accordance with Free
Carrier/FCA Nortel's applicable manufacturing facility.
4.3 Nortel's prices set forth in Exhibits C and D may be revised by
Nortel no more than once each calendar year, by providing sixty (60) days prior
written notice to Company. Such notice shall specify the effective date of the
price change and shall apply to all Orders received by Nortel on or after the
effective date of the price change. However, in the event there is a recognized
industry-wide shortage of a component that is incorporated in a Product, Nortel
may increase the price of such Product, following the provision of written
notice to Company fifteen (15) days prior to the effective date of such increase
or such shorter date as is mutually agreed in view of the shortage. The price
increase of such Product due to a component shortage shall be limited to the
increase in cost of such component for that Product, plus an appropriate markup
for the period of time during which such recognized shortage exists. Following
the implementation of a price increase due to a component shortage, the parties
shall jointly review every three (3) months or at such other time as is mutually
agreed, in good faith, whether such component shortage still exists. If the
component shortage has abated, the parties shall jointly determine whether there
still is a need for such price increase. In addition, in the event either (i)
worldwide hyperinflation occurs, or (ii) a change in the laws or regulations of
a country requires a change to be made to a Product in order to be compliant
with such laws or regulations, the parties shall work together in good faith to
determine any applicable increase in prices of affected Products to cover
Nortel's additional costs.
4.4 Nortel shall promptly extend to Company any price reduction made by
Nortel in its generally available, then current list prices for Products and/or
Services. Such price reduction shall apply to all Orders received on or after
the effective date of such price reduction.
4.5 Nortel shall invoice Company for Products and Services ordered as
follows, unless otherwise agreed to in writing:
(i) for Systems, whether or not installation has been ordered from
Nortel, one hundred percent (100%) of the price of the Products on
the Ship Date, one hundred percent (100%) of the price of any
Services upon the date of completion of such Services, except with
respect to installation services, if any, which shall be invoiced
one hundred percent (100%) upon Turnover.
(ii) for Merchandise or Documentation provided on a furnish-only
basis, one hundred percent (100%) of the total price on the Ship
Date; and
(iii) for Orders covering Services only, one hundred percent (100%)
of the price for such Services following completion of performance,
except for recurring support Services which shall be invoiced
quarterly in advance unless otherwise agreed. Some network
management Services may be sold under a separate Service agreement
and may be subject to monthly invoicing and such Service
agreement's provisions shall take precedence.
4.6 Each invoice shall be paid within thirty (30) days after the date
of such invoice.
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4.7 In the event that Company does not pay an invoice within such
thirty (30) day period, then Nortel may charge Company interest on such
outstanding invoice, from day thirty one (31) forward, at the rate of one
percent (1%) simple compound interest per month, or such lesser amount as may be
the maximum permissible rate under applicable law, until such time as the
outstanding invoice is paid. Should any such outstanding invoice be in dispute
in whole or in part, Nortel may charge Company interest on the portion of such
invoice which is not in dispute, based upon the preceding terms; provided,
however, that if such dispute is not resolved and the affected invoice is not
paid within sixty (60) days of the original invoice date, then Nortel may charge
Company interest on the portion of such invoice which is in dispute if Nortel
prevails in such dispute.
ARTICLE 5. SHIPMENT, TITLE AND RISK OF LOSS
5.1 Company shall have the right to reschedule a Ship Date of an Order
on a one time basis provided a minimum period of notice prior to the original
Ship Date is given to Nortel by Company in accordance with the applicable
Product Annex prior to the original Ship Date and provided further that the new
Ship Date is within ninety (90) days of the original Ship Date.
5.2 In the event Company reschedules the Ship Date for a single Order
more than once or reschedules more than ten (10) Orders in any calendar year,
Company shall reimburse Nortel for any storage fees, insurance, and demurrage it
incurs with respect to such Order(s).
5.3 All Products shall be delivered to Company in accordance with Free
Carrier/FCA Nortel's applicable manufacturing facility and risk of loss and
damage to the Products shall pass from Nortel to Company as defined therein.
5.4 Good title to Hardware furnished hereunder, free and clear of all
liens and encumbrances, shall vest in Company upon full payment to Nortel of the
total amount payable by Company for such Hardware and any related Licensed
Software or Services furnished by Nortel in connection with such Hardware. Prior
to payment for such Products, Company shall not lease the Hardware, or allow any
liens or encumbrances to attach to the Hardware or Licensed Software, or remove
the Hardware or Licensed Software from the Installation Site without the prior
written consent of Nortel, such consent not to be unreasonably withheld or
delayed.
5.5 Company grants to Nortel and/or its agents a purchase money
security interest in the Hardware and its proceeds or such other similar
protection as may be available in the applicable jurisdiction in which the
Hardware is delivered. Nortel may perfect such interest (and Company shall
assist Nortel, as reasonably necessary, to do so) and retain such interest until
title to the Hardware passes to Company.
ARTICLE 6. TESTING, TURNOVER AND ACCEPTANCE
6.1 When Nortel installs a Product furnished hereunder, upon completion
of such installation Nortel shall test the Product to verify that such Product
functions in accordance with the applicable Specifications. Nortel shall provide
a written notice of Turnover to Company upon the satisfactory completion of such
tests indicating that the Product is ready for Acceptance. Company shall be
permitted an opportunity to have an appropriately qualified individual in
attendance to observe the performance of such tests. However, the absence of
such Company individual for any reason shall not invalidate the tests nor be a
reason for Company to withhold Acceptance.
6.2 Within ten (10) business days after the Turnover Date, Company
shall either accept the Product in writing, or notify Nortel in writing,
specifying in reasonable detail those particulars in which, in Company's
opinion, the Product is not in material conformance with the Specifications.
6.3 When Nortel does not install a Product furnished hereunder, Nortel
shall, prior to delivery of the Product, perform such factory tests as Nortel
determines to be appropriate in order to confirm that such Product shall be in
accordance with the applicable Specifications. Company shall be deemed to have
accepted the Product based upon such tests and Acceptance shall be deemed to
have occurred upon the Ship Date. In the event Company or any other entity is
performing installation of a Product, (except for installation of a Product for
which permission shall not be allowed and has been so specified in the
applicable Product Annex) Company or such entity may be required to complete
prerequisite training or certification prior to Company or such entity being
allowed to install such Product.
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6.4 In the event Company is utilizing any Product in a
revenue-generating capacity, Acceptance shall be deemed to have occurred without
limitation or restriction, upon the date of placement of such Product into
revenue-generating service.
6.5 For Products, such as Merchandise, which are purchased separately
from a System, Acceptance shall be deemed to have occurred upon the Ship Date to
the location specified in the Order. Services which are purchased separately
from a Product shall be deemed to be accepted upon completion of such Services.
6.6 Company shall not unreasonably withhold Acceptance. Nortel shall
utilize commercial efforts to correct any items causing Company to decline to
accept a Product due to non-conformance with the Specifications. When Nortel has
satisfactorily corrected such deficiencies, Company shall accept the Product in
writing. Company's failure to either accept or provide notice of non-conformance
within the prescribed time from the Turnover Date shall constitute Acceptance of
the Product.
6.7 Following Acceptance of a Product, Company shall execute Nortel's
Acceptance notice, confirming Acceptance without any conditions, restrictions,
or limitations of any nature whatsoever.
6.8 Acceptance shall not be withheld or postponed due to:
(i) Deficiencies of such Products resulting from causes not
attributable to Nortel, such as, but not limited to (a) material
change or inaccuracy of Customer Information, (b) inadequacy or
deficiencies of any materials, facilities or services provided
directly or indirectly by Company and tested in conjunction with
the applicable Products, or spurious outputs from adjacent
material, (c) other conditions external to the Products which are
beyond the limits specified by Nortel in the Specifications for the
Products; or
(ii) Minor deficiencies or shortages with respect to such Products
which are attributable to Nortel, but of a nature that do not
prevent operation of the Products in revenue generating service.
6.9 With respect to any deficiencies of the type described in Section
6.8(i), Nortel shall at Company's request and expense assist Company in the
elimination or minimization of any such deficiencies. With respect to any
deficiencies or shortages as described in Section 6.8(u), Nortel shall, at
Nortel's expense, correct any such deficiencies or shortages within thirty (30)
days of the date of Acceptance or as otherwise agreed by the parties.
6.10 In the event Company notifies Nortel of non-acceptance of a
Product and Nortel personnel travels to the Installation Site to remedy such
non-acceptance and determines that non-acceptance is due to a deficiency of the
type described in Section 6.8(i), Nortel may invoice Company for investigation
of the matter and for the reasonable travel and living expenses incurred by such
personnel.
ARTICLE 7. ORDER CANCELLATION
7.1 In the event Company cancels all or any part of an Order, Company
shall pay to Nortel a cancellation charge for each Product that has been
canceled in accordance with the schedule set forth in the applicable Product
Annex. In addition, in the event that any Third Party Hardware or Third Party
Software has been specifically ordered by Nortel for the Order which has been
canceled, Company shall reimburse Nortel the cost incurred by Nortel for such
Third Party Hardware or Third Party Software.
7.2 Orders for Products that have been shipped may not be canceled.
Furthermore, Orders for Products which Nortel customizes in accordance with a
specific Company request may not be canceled.
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ARTICLE 8. WARRANTY
8.1 Nortel warrants that for a period of twelve (12) months from the
Ship Date of a System. the Hardware contained in such System under normal use
and service will be free from defective material and faulty workmanship and
shall comply with the applicable Specifications. The foregoing warranty shall
not apply to items normally consumed during operation of a System such as, but
not limited to, lamps and fuses. Any installation Service performed by Nortel
with respect to a System will be free from defects in workmanship for a period
of twelve (12) months from the completion date of such Service.
8.2 Nortel warrants that any Licensed Software shall function during
the warranty period of the Hardware with respect to which such Licensed Software
is furnished without any material, service-affecting, nonconformance to the
applicable Specifications. Licensed Software that is delivered separately from
Hardware is warranted for a period of twelve (12) months from the applicable
Ship Date. If the Licensed Software fails to so function, Company's sole remedy
and Nortel's sole obligation under this warranty is for Nortel to correct such
failure through, at Nortel's option, the replacement or modification of the
Licensed Software or such other actions as Nortel 'reasonably determines to be
appropriate, all within a reasonable time having regard to all of the
circumstances and failing which the parties agree to negotiate a commercially
reasonable solution. Any modification to the Licensed Software not performed by
Nortel or an authorized service provider shall void this warranty.
8.3 The warranty period for Merchandise shall be for a period of ninety
(90) days from the Ship Date of such Merchandise.
8.4 If Hardware is not free from defects in material or workmanship and
fails to comply with the applicable Specifications during the warranty period,
Nortel will repair, replace or modify the Hardware so that it does comply with
the applicable Specifications. The warranty period service shall be performed at
the Installation Site or Nortel's facility at the sole discretion of Nortel. If
Nortel is unable to repair or modify the Hardware within a reasonable period of
time so that the Hardware conforms to the applicable Specifications, Nortel
shall replace the Hardware with other Hardware or hardware that conforms to such
Specifications. Nortel's sole obligation and Company's exclusive remedy under
the warranty provisions of this Article with respect to Hardware and
installation Services shall be limited to repair, modification or replacement of
the defective Hardware or correction of the defective installation Services.
8.5 Replacement Hardware may be new or reconditioned at Nortel's
option. Notwithstanding the foregoing, the warranty period of Hardware which has
been subject to repair or replacement by Nortel shall commence upon the Ship
Date of the repaired or replacement Hardware to Company and shall expire on the
later of ninety (90) days or the last day of the original warranty period with
respect to the Hardware which was repaired or replaced. The warranty period of
Licensed Software which has been corrected, due to a material non-conformance
found in such Licensed Software, shall expire on the later of ninety (90) days
from the Ship Date of the corrected Licensed Software to Company or the last day
of the original warranty period with respect to such Licensed Software.
8.6 Nortel warrants that its Products shall comply in all material
aspects with all applicable laws and regulations in force in the country of
destination known to Nortel, which are in force on the date of a Contract, which
laws or regulations directly impose obligations upon any manufacturer, seller or
installer of such Products. Upon request therefor, Nortel may implement such
changes as are necessary to comply with any applicable law and/or regulation
which becomes effective after the date of the applicable Contract. The parties
shall have good faith discussions concerning the cost of such changes and which
party will bear them.
8.7 The warranties set forth in this Article shall not apply to any
Products where the defect or nonconformance is due to (i) accident, alteration,
abuse, misuse or repair not performed by Nortel; (ii) improper storage; (iii)
failure to comply with all applicable environmental requirements for the
Products as specified by Nortel, such as but not limited to temperature or
humidity ranges; (iv) improper performance of installation, maintenance,
operation or other service in connection with the Product, provided such service
was not performed by Nortel or on Nortel's behalf; (v) use in conjunction with
an incompatible product; (vi) any error, act or omission by anyone other than
Nortel; or (vii) where written notice of the defect has not been given to Nortel
within the applicable warranty period or within a reasonable time period
thereafter having regard to when the defect was discovered. The warranties set
forth in this Article shall not apply to Third Parry Software or Third Parry
Hardware, provided however that Nortel shall assign to Company (to the extent of
Nortel's right to do so) the warranty rights granted to Nortel by the
appropriate vendor.
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8.8 Unless Nortel elects to repair or replace defective Hardware at
Company's facility, all Hardware to be repaired or replaced, whether in or out
of warranty, shall be packed by Company in accordance with Nortel's
instructions. Nortel shall use reasonable commercial efforts to ship repaired or
replacement Hardware within thirty (30) days of receipt of the defective
Hardware. To facilitate the processing of the defective Hardware returned
hereunder, Nortel may ship replacement Hardware prior to Nortel receiving the
defective Hardware. If mutually agreed, Nortel will make repairs at the
Installation Site at charges set forth in the then-current agreement between the
parties for Installation Site repairs, or if no such agreement exists, at
Nortel's then-current charge for such repairs.
8.9 If the Hardware returned to Nortel pursuant to Section 8.8 above
is determined by Nortel to be beyond repair and is outside the warranty period,
Nortel shall notify Company and if requested Nortel shall sell Company
replacement Hardware at the then-current contract price between the parties for
such Hardware or if no such contract exists, at Nortel's then-current price for
such Hardware.
8.10 Company shall bear risk of loss and shall pay for all
transportation charges for Hardware returned to Nortel for repair and/or
replacement hereunder, and Nortel shall bear risk of loss and shall pay all
transportation charges for repaired and/or replacement Hardware returned to
Company.
8.11 The performance by Nortel of any of its obligations described
herein shall not extend the applicable warranty period.
8.12 THE WARRANTIES AND REMEDIES SET FORTH HEREIN CONSTITUTE THE ONLY
WARRANTIES OF NORTEL WITH RESPECT TO THE PRODUCTS AND SERVICES AND ARE COMPANY'S
SOLE AND EXCLUSIVE REMEDIES IN THE EVENT SUCH WARRANTIES ARE BREACHED. THEY ARE
IN LIEU OF ALL OTHER WARRANTIES; OR CONDITIONS, WRITTTEN OR ORAL, STATUTORY,
EXPRESS OR IMPLIED. INCLUDING, BUT NOT LIMITED TO. ANY WARRANTY OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NORTEL SHALL NOT BE LIABLE
FOR ANY SPECIAL. INDIRECT. INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE
WHATSOEVER ARISING OUT OF NORTEL'S BREACH OF WARRANTY
ARTICLE 9. NORTEL'S ADDITIONAL OBLIGATIONS
9.1 Nortel shall train representatives of Company with respect to the
operation, configuration, installation, service, maintenance and support of the
Products at Nortel's then current prices and at Nortel's facilities, subject to
course and class availability. The training provided under this Section may be
provided within the U.S. or at an offshore location as mutually agreed. In
addition to the preceding, and as may be further specified in a Product Annex,
if applicable, Nortel shall provide Company with training credits ("Training
Credits") to be used by Company in any of Nortel's training courses related to
the Products Company has purchased. The Training Credits shall be granted based
upon prices paid by Company for each Product as set forth in the applicable
Product Annex. Furthermore, the Training Credits for each Product may only be
used in connection with such Product and must be used within one (1) year from
the date such Training Credits were earned, after which such Training Credits
will be forfeited by Company.
9.2 Nortel shall provide Company with copies of its then current
training catalogue and schedule of courses upon request.
9.3 To the extent of Nortel's right to do so, and subject to any
Product specific restrictions detailed in the applicable Product Annex, Nortel
grants to Company the right to copy for its own internal use, the materials
provided to it by Nortel during any training session, provided that Company
reproduces any copyright notice or other proprietary notice contained in the
original document in the copies it makes.
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9.4 Nortel shall include its standard Documentation package, if any,
with each shipment of an Order. Nortel shall make the Documentation available on
its choice of media, which may include CD-ROM. Nortel shall provide Company with
any other documentation that is ordered at its then-current prices therefor.
Documentation provided via CD-ROM media may be printed and copied to the extent
necessary for the operation and maintenance of the Products to which the
Documentation pertains, however, Company may not press any copies of CD-ROM
discs.
9.5 During the term of this Agreement Company may acquire various
support Services from Nortel in connection with the Products Company acquires
from Nortel. These Services include, but are not limited to, the following:
technical assistance Services, installation Services, Hardware maintenance
Services, Software maintenance Services and parts repair and replacement
Services. The various support Services that Company may acquire, associated
prices and the manner in which they will be provided are set forth in Exhibit D,
which is attached hereto and incorporated herein. Fees for all other Services
not specified in Exhibit D shall be provided on an as-quoted basis.
9.6 Each party shall designate a global management team to coordinate
issues arising under this Agreement. The teams shall include technical
representatives in locations as mutually agreed to complement Company's
purchasing and operations plans associated with the Products.
ARTICLE 10. LICENSED SOFTWARE
10.1 Company acknowledges that the Software may contain programs
which have been supplied by, and are proprietary to, Third Party Software
vendors. In addition to the terms and conditions herein, Company shall abide by
any additional terms and conditions specified in a Product Annex with respect to
any Software provided by any Third Parry Software vendor.
10.2 Upon Company's payment to Nortel of the applicable fees with
respect to any Software furnished to Company pursuant to this Agreement, Company
shall be granted a personal, non-exclusive, license to use the Object Code
version of the Software furnished to Company only in conjunction with Company's
use of the Hardware with respect to which such Software was furnished for the
life of that Hardware as it may be repaired or modified. Company shall be
granted no title or ownership rights to the Software, which rights shall remain
in Nortel or its suppliers.
10.3 As a condition precedent to this license and to the supply of
Software by Nortel pursuant to this Agreement, Nortel requires Company to give
proper assurances to Nortel for the protection of the Software. Accordingly, all
Software supplied by Nortel under or in implementation of this Agreement shall
be treated by Company as the exclusive property, and as proprietary and a trade
secret, of Nortel and/or its suppliers, as appropriate, and Company shall: a)
hold the Software, including, without limitation, any methods or concepts
utilized therein in confidence for the benefit of Nortel and/or its suppliers,
as appropriate; b) not provide or make the Software available to any person
except to its employees on a 'need to know' basis; c) not reproduce, copy, or
modify the Software in whole or in part except as authorized by Nortel; d) not
attempt to decompile, reverse engineer, disassemble, reverse translate, or in
any other manner decode the Software; e) issue adequate instructions to all
persons, and take all actions reasonably necessary to satisfy Company's
obligations under this license; and f) forthwith return to Nortel, or with
Nortel's consent destroy i) upon termination of the license for any reason or
ii) upon receipt of replacement, modified, or updated Software, any magnetic
tape, disc, semiconductor device or other memory device or system and/or
Documentation or other material, including, but not limited to all printed
material furnished by Nortel to Company.
10.4 If Nortel modifies and/or changes the Software to permit
additional features and/or services, such Software shall be made available to
Company at Nortel's then current fees for those features and/or services.
10.5 The obligations of Company hereunder shall not extend to any
information or data relating to the Software which is now available to the
general public or becomes available by reason of acts or failures to act not
attributable to Company.
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10.6 Neither Company nor any successor to Company's title in the
applicable Hardware shall have the right to (i) assign this license as to the
applicable Software to any other party or person who acquires legal title to
such Hardware, or (ii) sublicense the rights herein granted as to such Software
to any other party or person who subsequently acquires the right to use such
Hardware, unless agreed to in writing by both Nortel and Company. Such consent
shall not be unreasonably withheld.
10.7 Company shall indemnify and hold Nortel and its suppliers, as
appropriate, harmless from any loss or damage resulting from a breach of this
Article. The obligations of Company under this Article shall survive the
termination of the Agreement and shall continue if the Software is removed from
service.
10.8 Certain Software delivered by Nortel may include Non-Licensed
Software. Non-Licensed Software includes (i) any Software for which the
applicable right-to-use ("RTU") fees have not been paid, and (ii) Software for
which the periodic RTU fees have expired and the applicable additional RTU fees
have not been paid. Company shall submit to Nortel an Order for any Non-Licensed
Software that Company desires to license.
10.9 When Non-Licensed Software is placed into service, the
applicable RTU fees shall be payable. Company shall also have the option to pay
the applicable RTU fees for any Non-Licensed Software upon installation of a
Software load containing such Non-Licensed Software.
10.10 To ensure proper activation and/or usage of only the
appropriate Software for which applicable license fees have been paid, Company
shall accurately complete the appropriate form designated by Nortel, prior to
the activation and/or usage by Company of any Non-Licensed Software. Company
shall identify all Software desired to be activated and/or used (including the
number of lines or other units activated, if applicable) in each System and
shall transmit such form to Nortel.
10.11 Nortel shall promptly review any form submitted pursuant to
Section 10.10 and respond in writing, identifying whether (i) any applicable
prerequisite Hardware or Software is required to be purchased by Company prior
to activation and/or usage of the applicable Software, or (ii) whether the use
of such Software requires Nortel to determine whether the current System
configuration will require additional elements, such as Hardware, other hardware
and/or System memory, prior to activation and/or usage; or (iii) whether Company
can use such Software without the addition of any additional Hardware or
Software.
10.12 Nortel reserves the right to access by remote polling any
System in which Software was installed to determine which Software has been
activated. Such polling shall be done so as not to interfere with Company's use
of the Product.
10.13 Nortel shall issue invoices to Company in accordance with the
prices set forth in Exhibit C, in addition to those amounts previously invoiced,
for amounts found to be payable as a result of Company's activation and/or usage
of any Software which is identified as a result of the remote polling of a
System and for which Company has not previously paid the appropriate RTU fee.
10.14 The warranty period for Software activated later than the
original Ship Date of the Software load, shall be for the same period as such
original Software load and shall not be extended to provide for an additional
period of warranty based upon the date individual features or units are
activated and/or utilized by Company or the date Company pays any applicable
right-to-use fees.
10.15 Nortel shall provide the Software support Services specified in
Article 9 or in a separate Services agreement between the parties provided that
Company sustains the Software at Nortel's current Software release level or
within at least two previous Software release levels or as otherwise specified
in the separate Services agreement.
10.16 Modifiable Software
10.16.1 Notwithstanding anything to the contrary above, upon payment
to Nortel of the applicable RTU fees, Nortel hereby grants to Company, subject
to the applicable terms and conditions of this Article 10, a personal,
non-transferable, non-assignable and non-exclusive right to modify Licensed
Software which Nortel identifies as modifiable in its Documentation solely for
the purpose of modifying and creating Building Blocks and Applications. Upon the
modification or creation of any Applications by Company, or the modification or
creation of any Building Blocks by Company, Nortel shall have no obligation with
regard to warranty under Article 8 or indemnity under Article 12 for such
Applications or Building Blocks.
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10.16.2 Nothing contained in this Article shall transfer, or be
deemed to transfer, or contemplate the transfer of, any rights in or to the
Software other than those rights specifically granted herein, and in particular
but without restricting the generality of the foregoing, Nortel does not in any
way transfer any right, title or interest in or to the Software or any element
constituting a portion thereof to Company, other than the right of Company to
modify Licensed Software identified as modifiable in Nortel's Documentation
solely for the purpose of modifying or creating Building Blocks and
Applications.
10.16.3 For any Building Blocks and Applications created solely by
Company, and for all Company-modified portions of the Nortel-provided Building
Blocks with respect to such modified portion only, Company shall own all forms
of intellectual property rights (including but not limited to patent, trade
secret, copyright and mask rights) pertaining to such Applications, Building
Blocks or Company-modified portions of Building Blocks and shall have the right
to file for or otherwise secure and protect such rights. For all such Company
created Applications or Building Blocks or modified portions of Building Blocks,
the parties shall, on a case by case basis, negotiate in good faith to determine
whether Company may desire to license any such Applications or Building Blocks
to Nortel.
10.16.4 For any Applications created solely by Nortel, and for the
Nortel-provided Building Blocks, Nortel shall own all forms of intellectual
property rights (including but not limited to patent, trade secret, copyright
and mask rights) pertaining to such Applications or Building Blocks arid shall
have the right to file for or otherwise secure and protect such rights. Company
may license under this Agreement any such Nortel created Applications or
building Blocks as Nortel Products upon Nortel making such Software generally
available to its customers.
10.16.5 In the event Company and Nortel intend to jointly create
Applications or Building Blocks, the parties shall mutually agree as to
applicable terms and conditions governing such undertaking, including ownership
rights in the deliverables.
10.17 Services Software
10.17.1 With respect to Services Software, Company shall: i) utilize
Services Software and the results thereof solely for the purposes described
Section 1.25; and ii) comply with additional terms, if any, applicable to
Services Software as specified in a Product Annex. Nortel may, at any time and
without liability or obligation to Company, modify Services Software, any
computer equipment of Nortel or its suppliers used in connection with Services
Software, and identification codes, manuals or other information or
Documentation used in connection 'with Services Software.
10.17.2 SERVICES SOFTWARE IS PROVIDED AS IS, WITHOUT WARRANTY OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NORTEL DOES
NOT AND CANNOT WARRANT THE PERFORMANCE OR RESULTS THAT MAY BE OBTAINED BY USING
SERVICES SOFTWARE. COMPANY ASSUMES SOLE RESPONSIBILITY FOR THE SELECTION OF THE
SERVICES SOFTWARE TO ACHIEVE COMPANY'S INTENDED RESULTS, AND FOR THE
INSTALLATION, USE, AND RESULTS OBTAINED FROM THE SERVICES SOFTWARE. IN NO EVENT
SHALL NORTEL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOST REVENUES OR PROFITS OR
OTHER ECONOMIC LOSS, OF ANY NATURE WHATSOEVER ARISING OUT OF COMPANY'S USE OF
SERVICES SOFTWARE.
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ARTICLE 11. HOMOLOGATION AND CERTIFICATION
11.1 Nortel will comply with the homologation requirements for
Products, unless otherwise specified in a Product Annex, in each of the
countries set forth in Exhibit G, attached hereto and incorporated herein.
11.2 In the event Nortel or a Nortel Affiliate has complied or
complies in the future with the homologation requirements for a Product in any
country not set forth in Exhibit G, Nortel shall, to the extent of its legal
right to do so, grant Company the right to use the results of such homologation.
Any costs arising from such grant shall be subject to agreement by the parties
prior to such grant being made.
11.3 In the event that Company desires to purchase a Product in a
country not set forth in Exhibit G and the homologation requirements for such
Product have not yet been complied with, Company shall notify Nortel in writing.
Nortel shall within a reasonable amount of time respond in writing to Company,
indicating its intended action plan with regard to such Product being
homologated in such country and whether or not Company shall be required to pay
Nortel any applicable charges.
ARTICLE 12. LIABILITY FOR BODILY INJURY, PROPERTY DAMAGE AND PATENT INFRINGEMENT
12.1 A party hereto shall defend the other party against any suit,
claim, or proceeding brought against the other party for direct damages due to
bodily injuries (including death) or damage to tangible property which allegedly
result from the negligence or willful misconduct of the defending party in the
performance of this Agreement The defending party shall pay all litigation
costs, reasonable attorney's fees, settlement payments and such direct damages
awarded or resulting from any such suit, claim or proceeding.
12.2 Nortel shall defend Company against any suit, claim or
proceeding brought against Company alleging that any Products, excluding Third
Party Hardware or Third Party Software, furnished hereunder infringe any patent
and shall pay all litigation costs, reasonable attorney's fees, settlement
payments and damages awarded or resulting from any such suit, claim or
proceeding. With respect to Third Party Hardware or Third Party Software, Nortel
shall assign any rights with respect to infringement of patents granted to
Nortel by the supplier of such items to the extent of Nortel's right to do so.
12.3 Nortel shall have no liability, in respect of any infringement
claim based on the use of a Product in the event such Product: (i) is
manufactured, designed or supplied by Nortel in accordance with any design or
any special instruction furnished by Company, (ii) is used by Company in a
manner or for a purpose not contemplated by this Agreement and such use gives
rise to such infringement, (iii) is used by Company in combination with other
products, including, without limitation, any software developed solely by
Company through the permitted use of Products furnished hereunder, provided the
infringement arises from such combination or the use thereof; (iv) is modified
by Company where such modification is not authorized by Nortel and such
modification gives rise to such infringement, or (v) is used or located by
Company in a country other than the country in which and for which it was
supplied by Nortel. In the excepted cases stated above, Company shall indemnify
and hold Nortel harmless against any loss, cost, expense, damage, settlement or
other liability, including, but not limited to, attorneys' fees, which may be
incurred by Nortel with respect to any suit, claim, or proceeding described in
this Section 12.3.
12.4 Nortel shall not be liable for, and Company shall indemnify and
hold Nortel harmless in respect of; any damages awarded based on Company's
willful, knowing or deliberate infringement of a patent, copyright, trade
secret, trade ▇▇▇▇ or other proprietary right where such infringement results in
a pecuniary damage award.
12.5 Nortel may provide Company with notice of an actual or potential
infringement claim. Nortel shall consult with Company regarding the infringement
claim and the course of action to be pursued as a result thereof. In the event
the parties fail to agree on a satisfactory course of action for dealing with
the matter, Company may either:
(i) return to Nortel the affected portion of the Product(s) in
return for a refund to Company of the purchase price or fee
paid less a reasonable amount for use, damage, obsolescence
and depreciation; or
(ii) continue to use the affected portion of the Product(s) at
Company's own risk.
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12.6 Nortel shall not be liable for, and Company shall indemnify
Nortel in respect of any infringement claim(s) where Nortel has provided notice
to Company of the infringement claim(s) and Company elects, in accordance with
Section 12.5(ii) above, to continue its use of the Product(s) covered by the
infringement claim.
12.7 If as a result of an infringement claim, other than those
contemplated in Sections 12.3 and 12.4 above, an injunction is obtained against
Company's use of any Product(s), Nortel shall, at Nortel's option:
(i) procure for Company the right to continue using the alleged
infringing Product(s);
(ii) replace or modify the same with equivalent or better Product(s)
so that Company's use is non-infringing; or
(iii) accept return of the affected portion of the Product(s) and
refund to Company the purchase price or fee paid less a
reasonable amount for use, damage, obsolescence and
depreciation.
12.8 The defense of any claim which is predominantly covered by the
provisions of this Article 12, shall be controlled by the party upon whom the
majority of the ultimate liability is likely to be imposed. Such controlling
party shall give the other party a reasonable opportunity to participate in
negotiation or defense of the claim so that such other party may reasonably
protect its own interests. Neither party shall be liable for any settlement
obligation incurred without its written consent.
12.9 THE REMEDIES SET FORTH IN THIS AGREEMENT ESTABLISH THE ENTIRE
OBLIGATION OF THE PARTIES IN REGARD TO CLAIMS RELATING TO INTELLECTUAL PROPERTY
RIGHTS INCLUDING CLAIMS DIRECTED TO THE INFRINGEMENT OF PATENTS, COPYRIGHT,
TRADE SECRETS AND OTHER PROPRIETARY RIGHTS. IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES,
INCLUDING WITHOUT LIMITATION, LOST REVENUES, PROFITS OR OTHER ECONOMIC LOSSES
ARISING FROM SUCH INFRINGEMENTS AND OTHER MATTERS OTHER THAN AS SPECIFICALLY SET
FORTH HEREIN.
ARTICLE 13. REMEDIES AND LIMITATION OF LIABILITY
13.1 Nortel shall have the right to suspend its performance, upon
written notice to Company, and forthwith remove and take possession of all
Products that shall have been delivered to Company, if; prior to payment to
Nortel of any amounts due pursuant to this Agreement with respect to such
Products, Company shall (i) become insolvent or bankrupt or cease, be unable, or
admit in writing its inability, to pay all debts as they mature, or make a
general assignment for the benefit of; or enter into any arrangement with,
creditors, (ii) authorize, apply for, or consent to the appointment of; a
receiver, trustee, or liquidator of all or a substantial part of its assets or
have proceedings seeking such appointment commenced against it which are not
terminated within sixty (60) days of such commencement, or (iii) file a
voluntary petition under any bankruptcy or insolvency law or under the
reorganization or arrangement provisions of the United States Bankruptcy Code or
any similar law of any jurisdiction or have proceedings under any such law
instituted against it which are not terminated within sixty (60) days of such
commencement.
13.2 Notwithstanding the dispute escalation procedures set forth in
Section 17.12, in the event of any material breach of this Agreement which shall
continue for thirty (30) or more days after written notice of such breach
(including a reasonably detailed statement of the nature of such breach) shall
have been given to the breaching party by the aggrieved party, the aggrieved
party shall be entitled at its option to either submit its case to the American
Arbitration Association for resolution, and the breaching party shall cooperate
in good faith with such arbitration process, or avail itself of any and all
remedies available at law or equity, except as otherwise limited in this
Agreement If the aggrieved party elects to arbitrate a breach, such arbitration
shall be conducted before a three (3) member panel with one (1) arbitrator
selected by either party and the third arbitrator selected by the two (2)
arbitrators selected by the parties. Any such arbitration shall be conducted in
either New York, New York, U.S. or Dallas, Texas, U.S., as selected by the
aggrieved party and the decision of the arbitrators shall be final and binding
unless found to be arbitrary or capricious or contrary to law. Material breach
of a specific Contract shall relate only to that Contract, and shall not affect
other Contracts or this Agreement generally.
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13.3 NOTHING CONTAINED IN SECTION 13.2 OR ELSEWHERE IN THIS AGREEMENT
SHALL MAKE NORTEL LIABLE FOR ANY INCIDENTAL, INDIRECT, CONSEOUENTIAL OR SPECIAL
DAMAGES OF ANY NATURE WHATSOEVER FOR ANY BREACH OF THIS AGREEMENT WHETHER THE
CLAIMS FOR SUCH DAMAGES ARISE IN TORT, CONTRACT, OR OTHERWISE, OR SHALL INCREASE
THE LIABILITY OF NORTEL UNDER ARTICLE 8 OR 12 BEYOND THAT PRESCRIBED THEREIN.
13.4 Nortel shall not be liable for any additional costs, expenses,
losses or damages resulting from errors, acts or omissions of Company,
including, but not limited to, inaccuracy, incompleteness or untimeliness in the
provision of information by Company to Nortel or fulfillment by Company of any
of its obligations under this Agreement. Company shall pay Nortel the amount of
any such costs, expenses, losses or damage incurred by Nortel.
13.5 Any action for breach of this Agreement or to enforce any right
hereunder shall be commenced within two (2) years after the cause of action
accrues or it shall be deemed waived and barred, except any action for
nonpayment by Company of any prices, charges, fees or other amounts payable
hereunder may be brought by Nortel at any time permitted by applicable law.
ARTICLE 14. CONTINUING AVAILABILITY
14.1 In the event Nortel becomes aware of any problem with Hardware
that is of a serious performance, safety or regulatory compliance nature, and in
the event that Nortel determines it is necessary to change the design or
Documentation related to such Hardware, Nortel shall implement such change in
accordance with its standard Engineering Change Notice ("ECN") policies.
14.2 If generally available to Nortel's customers, Nortel shall
provide Company with real time read only access to Nortel's performance
database, if any, for the Products. Company acknowledges that the information
contained in such database is confidential and undertakes that the information
shall be treated in accordance with Article 16.
14.3 For a period of five (5) years following the Ship Date of a
Product, Nortel shall make spare parts, or their functional equivalent, and
repair/replacement and support Services, available for purchase by Company. In
the event Nortel intends to (i) manufacture discontinue and/or (ii) discontinue
the repair/replacement and support Service for, a major module of a Product
(notice may not be provided for component and individual circuit pack
discontinuance), Nortel shall provide Company one hundred eighty (180) days
prior written notice (certified mail return receipt requested, or other
receipted delivery) of such event and the applicable Product and/or support
Service shall be considered manufacture discontinued or discontinued,
respectively, after such six (6) month period. Such notices will also identify
the replacement Product(s) for the manufacture-discontinued items. Nortel shall
have no obligation to provide notice of manufacture discontinuance if only
components and/or individual circuit packs of a Product are being replaced and
such replacement does not affect form, fit or function of the Product.
ARTICLE 15. TERM AND TERMINATION
15.1 This Agreement will be in effect from the Effective Date for an
initial term of three (3) years. Thereafter, this Agreement shall automatically
renew for one (1) year terms, unless either party provides the other party with
written notice of its intent not to renew at least sixty (60) days prior to the
end of the original term or any renewal term.
15.2 Either party may terminate this Agreement as to future Orders,
in the event of a default by the other party, provided that the non-defaulting
party so advises the defaulting party in writing of the event of alleged default
and the defaulting party does not remedy the alleged default within thirty (30)
days after written notice thereof. If the alleged default is not susceptible of
being remedied within thirty (30) days, the defaulting party must commence to
remedy the alleged default within such thirty (30) day period and provide to the
non-defaulting parry a plan for timely remedying the alleged default in order to
avoid termination. Default is defined to include:
(i) either party's insolvency or initiation of bankruptcy or
receivership proceedings by or against a party;
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(ii) either party's material breach of any of the other terms
or conditions hereof including the failure to make any
payment when due, if the amount of the payment due is not in
dispute; or
(iii) the execution by either party of an assignment for the
benefit of creditors or any other transfer or assignment of a
similar nature.
15.3 The expiration or termination of this Agreement shall not
release either party from (i) any obligations and duties under any Order or
Contract entered into prior to such expiration or termination, (ii) any
liability which at the time of expiration or termination has already accrued to
the other party or (iii) any liability which thereafter may accrue in respect to
any breach prior to expiration or termination or from any obligations or duties
under any Order or Contract entered into prior to such expiration or termination
or under the provisions specified in Section 17.16, to survive termination.
ARTICLE 16. CONFIDENTIALITY
16.1 A party which receives the other party's Confidential
Information shall use reasonable care to hold such Confidential Information in
confidence and not disclose such Confidential Information to anyone other than
to its employees and employees of its Affiliates with a need to know. A party
that receives the other party's Confidential Information shall not reproduce
such Confidential Information, except to the extent reasonably required for the
performance of its obligations pursuant to this Agreement and in connection with
any permitted use of such Confidential Information.
16.2 Company shall take reasonable care to use Nortel's Confidential
Information only for study, operating, or maintenance purposes in connection
with Company's use of Products furnished by Nortel pursuant to this Agreement.
16.3 The obligations of either party pursuant to this Article shall
not extend to any Confidential Information which (i) recipient can demonstrate
through written documentation was already known to the recipient prior to its
disclosure to the recipient and without similar restrictions, (ii) was known or
generally available to the public at the time of disclosure to the recipient,
(iii) becomes known or generally available to the public (other than by act of
the recipient) subsequent to its disclosure to the recipient, (iv) is disclosed
or made available in writing to the recipient by a third party having a bona
fide right to do so and without similar restrictions, or (v) is required to be
disclosed by process of law, provided that the recipient shall notify the
disclosing party promptly upon any request or demand for such disclosure.
ARTICLE 17. MISCELLANEOUS
17.1 Publicity Advertising and Announcements - A party shall not
release, without the prior written approval of the other party, any advertising
or other publicity relating to this Agreement wherein such other party may
reasonably be identified. In addition, each party shall take reasonable
precautions to keep the existence and the contents of this Agreement
confidential so long as this Agreement remains in effect and for a period of
three (3) years thereafter, except as may be otherwise expressly provided in
this Agreement or as may be reasonably required to enforce this Agreement by
law.
17.2 Applicable Law - The validity, construction and performance of
this Agreement shall be governed by and interpreted in accordance with the laws
of the State of Texas, without giving effect to the principles of conflict of
laws thereof except to the extent that any mandatory provisions of local laws
relating to the delivery and installation of Products or the providing of
Services in any country in which Products or Services are to be delivered and
provided shall apply to the applicable Contracts for such Products or Services.
The United Nations convention on Contracts for the International Sale of Goods
shall not apply to this Agreement.
17.3 Effects of Headings - All headings used herein are for index and
reference purposes only, and shall not be given any substantive effect. This
Agreement has been created jointly by the parties and no rule of construction
requiring interpretation against the drafter of this Agreement shall apply in
its interpretation.
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17.4 Assignment - Other than as explicitly stated in this Section
17.4, neither party may assign or transfer this Agreement or any of its rights
hereunder without the prior written consent of the other party, such consent not
to be unreasonably withheld or delayed. Company's consent shall not be required
for any assignment or transfer by Nortel (i) to any Nortel Affiliate of all or
any part of this Agreement or of any of Nortel's rights, duties and obligations
hereunder, or (ii) to any third party of Nortel's right to receive any monies
("Receivables") which may become due to Nortel pursuant to this Agreement.
Company consents hereby to the sale of Receivables by Nortel without the
necessity for any further notice and without any qualification on such consent.
Company grants permission for Nortel to disclose the provisions of this
Agreement to purchasers and prospective purchasers of Receivables, or their
affiliates and others with a present or prospective financial interest in such
Receivables, and their respective agents, attorneys, auditors, rating agencies
and other advisors.
17.5 Subcontracting - Nortel may subcontract any of its duties and
obligations under this Agreement, but no such subcontract shall relieve Nortel
of primary responsibility for performance of its duties and obligations.
17.6 Non-Waiver - The failure by either party hereto at any time to
require performance by the other party or to claim a breach of any provision of
this Agreement shall not be construed as affecting any subsequent breach or the
right to require the performance with respect thereto or to claim a breach with
respect thereto.
17.7 Relationship of the Parties - The provisions of this Agreement
shall not be construed to establish any form of partnership or other joint
venture of any kind between Nortel and Company, nor to constitute either party
as the agent, employee or legal representative of the other. All persons
furnished by either party to accomplish the intent of this Agreement shall be
considered solely as the furnishing party's employees or agents and the
furnishing party shall be solely responsible for compliance with respect to its
employees with all laws, rules and regulations involving, but not limited to,
employment of labor, hours of labor, working conditions, workers' compensation,
payment of wages, and withholding and payment of applicable taxes, including,
but not limited to income taxes, unemployment taxes, and social security taxes.
17.8 Force Majeure - If the performance by a party of any of its
obligations under this Agreement shall be interfered with by reason of any
circumstances beyond the reasonable control of that party, including without
limitation, fire, explosion, acts of God, war, revolution, civil commotion,
unavailability of supplies or sources of energy, power failure, breakdown of
machinery, or labor difficulties, including without limitation, strikes,
slowdowns, picketing or boycotts, then that party shall be excused from such
performance for a period equal to the delay resulting from the applicable
circumstances and such additional period as may be reasonably necessary to allow
that party to resume its performance. With respect to labor difficulties as
described above, a party shall not be obligated to accede to any demands being
made by employees or other personnel.
17.9 Taxes - Company shall at Nortel's direction promptly reimburse
Nortel or pay directly to the applicable government or taxing authority all
taxes and charges arising hereunder, including, without limitation, penalties
and interest, except for taxes computed upon the net income of Nortel.
17.10. Hazardous Materials - Prior to issuing any Order for Services
to be performed at Company's facilities or an Installation Site, Company shall
identify and notify Nortel in writing of the existence of all Hazardous
Materials which Nortel may encounter during the performance of such Services,
including without limitation, any Hazardous Materials contained within any
equipment to be removed by Nortel. If Company breaches its obligations pursuant
to the immediately preceding sentence, (i) Nortel may discontinue the
performance of the applicable Services until all the Hazardous Materials have
been removed or abated to Nortel's satisfaction by Company at Company's sole
expense, and (ii) Company shall defend, indemnify and hold Nortel harmless from
any and all damages, claims, losses, liabilities and expenses, including without
limitation, attorney's fees, which arise out of Company's breach of such
obligations.
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17.11 Notice - All notices required or permitted to be given
hereunder shall be in writing and shall be deemed given when delivered (i) by
hand, or (ii) by facsimile, transmission (confirming the same by mail), or (iii)
by receipted electronic mail, or receipted express delivery service, or (iv)
U.S. mail. Notices shall be addressed as follows:
If to Nortel: If to Company:
Northern Telecom Inc. PICKNET, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., M/S: 991/12/B60 ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Director, Contracts and Licensing Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
W/copy to: (applicable line of business)
Such notices, if delivered by (i) hand, facsimile, electronic mail or express
delivery service shall be deemed to have arrived on the next business day, or
(ii) U.S. mail, shall be deemed to have arrived five (5) calendar days after the
date of mailing. Either party hereto may change its address by a notice given to
the other party hereto in the manner set forth above.
17.12 Dispute Escalation Procedures - In the event a dispute arises
between the parties concerning this Agreement, the respective project primes who
are designated in accordance with Section 9.7 of this Agreement shall endeavor
to resolve the dispute promptly in good faith. In the event the project primes
are unable to resolve a dispute, the parties will initiate the following
escalation timetable. "Cumulative Business Days" is defined as the consecutive
business days from the point at which the dispute is first escalated by notice
from one party to the other.
Management Position Cumulative Business Days to Resolve a Dispute
(or similar responsibility level) Before Escalation to the Next Management Level
--------------------------------- ----------------------------------------------
0 days
Project Prime 5 days
Sr. Account Executive 8 days
Director, Operations 12 days
VP, Sales and Marketing 15 days
Line of Business President
Should there be no final resolution to a dispute within five (5) days after
escalation to the highest management level, then either party may pursue its
remedies as provided in Section 13.2 or elsewhere in this Agreement.
17.13 Severability - If any of the provisions of this Agreement shall
be invalid or unenforceable under applicable law and a party deems such
provisions to be material, that party may terminate this Agreement upon written
notice to the other party. Otherwise such invalidity or unenforceability shall
not invalidate or render this Agreement unenforceable, but this Agreement shall
be construed as if not containing the particular invalid or unenforceable
provision and the rights and obligations of the parties shall be construed and
enforced accordingly.
17.14 Export - Company shall not export any Products or technical
data received from Nortel pursuant to this Agreement, or release any such
Products or technical data with the knowledge or intent that such Products or
technical data will be exported or transmitted to any country or to foreign
nationals of any country, except m accordance with applicable U.S. or Canadian
laws or regulations, as the case may be, concerning the exporting of such items.
Company shall obtain all authorizations from the U.S. and/or Canadian
government, as the case may be, in accordance with applicable law prior to
exporting or transmitting any such Products or technical data as described
above. Nortel will provide such assistance as Company reasonably requests to
obtain such authorizations. Company further acknowledges that the transfer of
Systems or components thereof; and associated Documentation outside of the U.S.
or Canada may be subject to the specific approval of the applicable Software
suppliers and other suppliers. All such approvals, if applicable, shall be
conditions precedent to any of the obligations of Nortel hereunder respecting
such Products or components thereof and associated Documentation.
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17.15 Modification of Agreement - No addition to or modification of
this Agreement shall be effective or binding on either of the parties hereto
unless reduced to writing and executed by the respective duly authorized
representatives of each of the parties hereto.
17.16 Exhibits - The following Exhibits attached hereto form an
integral part of this Agreement and are incorporated by reference herein:
Exhibit A - Affiliates
Exhibit B - Product Annexes
Exhibit C- List of Products and Prices
Exhibit D - Master Support Services
Exhibit E - Standard Intervals
Exhibit F - Territorial Limitations
Exhibit G - Homologation
Exhibit H - Network Partners
17.17 Survivorship - Articles 8, 10, 12, 13, 16, 17 and Sections,
4.5, 4.6, 4.7, 9.3, 14.3, and 15.3 shall survive the termination or expiration
of this Agreement.
17.18 Entire Agreement - This Agreement, including the Exhibits,
Schedules and Annexes which are attached hereto and incorporated herein,
comprises all the terms, conditions and agreements of the parties hereto with
respect to the subject matter hereof and supersedes all previous negotiations,
proposals, commitments, writings, publications and understandings of any nature
whatsoever.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day last
written below
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NORTHERN TELECOM, INC. PICKNET, INC.
BY: By:
Name: Name:
Title Title:
Date: Date:
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