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EXHIBIT 10.63
MASTER PURCHASE AGREEMENT
BETWEEN
WESTERN WIRELESS CORPORATION
AND
NORTEL NETWORKS INC.
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TABLE OF CONTENTS
ARTICLES:
Article 1 - Definitions
Article 2 - Scope of Agreement
Article 3 - Placement of Orders
Article 4 - Price and Payment
Article 5 - Shipment, Title and Risk of Loss
Article 6 - Testing, Turnover and Acceptance
Article 7 - Order Cancellation
Article 8 - Warranty
Article 9 - Nortel's Additional Obligations
Article 10 - Software License
Article 11 - Liability for Bodily Injury, Property Damage and Patent
Infringement
Article 12 - Remedies and Limitation of Liability
Article 13 - Term and Termination
Article 14 - Confidentiality
Article 15 - Cooperative Advertising
Article 16 - Continuing Availability
Article 17 - Installation Guidelines
Article 18 - Insurance
Article 19 - Dispute Resolution
Article 20 - Authority and Compliance With Laws
Article 21 - Compatibility and Interconnection
Article 22 - Additional Terms
EXHIBITS:
Exhibit A - Product Annexes including Lists of Product and Prices
Exhibit B - Software License
Exhibit C - Cooperative Advertising Program
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MASTER PURCHASE AGREEMENT
This Master Purchase Agreement ("Agreement"), effective as of the 15th day of
July, 1999, is entered into by and Western Wireless Corporation (hereinafter
"Company ") with executive offices located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Nortel Networks Inc. (hereinafter "Nortel"), with offices
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Company is engaged in providing communication services and products,
and providing and maintaining public and private communication networks; and
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 communication services, products and networks of
Company; and
WHEREAS, Company and Company Affiliates wish(es) to be able to purchase and/or
license various products and services for delivery and installation in the
United States from Nortel, which Company and Company Affiliates will use for its
their own internal use and not for resale or as stock in trade and Nortel is
willing to sell and/or license such products to Company, subject to the terms
and conditions of this Agreement; and
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 gender as the context requires.
1.1 "Acceptance" shall mean that either (i) Company has indicated to
Nortel in writing that an ordered Product is operating substantially in
accordance with the applicable Specification; or (ii) an ordered Product has
been deemed to be accepted pursuant to criteria set forth in Article 6.
Acceptance with respect to a System shall mean Acceptance of the entire System
and not individual Products.
1.2 "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.
1.3 "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.
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l.4 "Company Affiliate" shall mean any entity mutually agreed to by the
parties and in which Company owns and controls and continues to own or control
more than 35% of the shares entitled to elect the board of directors of such
entity.
1.5 "Confidential Information" shall mean all information, including
technical information, specifications, drawings, documentation, know-how,
business and financial information (including costs, profits, plans for future
development, business plans, training materials, methods of operation and
marketing concepts) and pricing information, and any other proprietary
information relating to a party hereto, of every kind or description which may
be disclosed by one party to the other party in connection with this Agreement,
is obtained by the other party as a result of the working relationship between
the parties hereto, whether obtained prior to or after the date hereof.
l.6 "Contract" shall mean an agreement for the supply of Products and/or
Services between a Company Affiliate and Nortel, 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 and each
reference to "Company" in this Agreement shall for such Contract mean the
ordering Company Affiliate.
1.7 "Customer" shall mean entities to whom Company provides
communication services as a result of Company's internal use of the Products.
1.8 "Customer Information" or "CI" shall mean the information provided
by Company to Nortel (including specifications, interconnection information and
turnkey information) in order for Nortel to engineer and/or provide the
components of Systems.
1.9 "Documentation" shall mean all 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. All
Documentation delivered to Company hereunder shall be delivered in hard copy
and/or CD-ROM or web based format, where available.
1.10 "Effective Date" shall mean the date this Agreement becomes
effective which shall be the date first identified above.
1.11 "Extension" shall mean Hardware and/or Software (and related
Services) which is engineered by Nortel and added to a System after the Turnover
Date of the applicable System.
1.12 "Hardware" shall mean, individually and collectively, the Nortel
equipment listed in the Product Annexes of Exhibit A, and shall be deemed to
include (i) any equipment which Nortel adds to its generally available Hardware
price lists or so identifies to Company in a Quotation, and (ii) any equipment
Nortel or a Nortel Affiliate may hereafter manufacture, or have manufactured,
and make commercially available to its customers and which is added to the
Product Annexes; provided, however, that the prices and discounts for any such
equipment added to the Product Annexes shall be as mutually agreed by the
parties, after giving due
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consideration to the purchase volume commitments under this Agreement. The terms
of this Agreement applicable to "Hardware" shall also be deemed to apply to
Third Party Hardware, unless otherwise expressly excluded.
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 location to
which the Product is shipped by Nortel.
1.14 "Installation" shall mean the complete performance and supervision
by Nortel of all installation and testing of Products pursuant to the criteria
set forth in this Agreement.
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 "Nortel Affiliate" shall mean Nortel's parent corporation, Nortel
Networks Corporation and any corporation controlled by, controlling, or under
common control with, directly or indirectly, Nortel Networks Corporation. As
used in this definition, "control" shall mean possession, directly or
indirectly, of the power to direct or control the direction of management and
policies of a person or entity, whether through ownership of voting securities,
by contract, or otherwise.
1.21 "Order" shall mean a purchase authorization document issued by
Company or a Company Affiliate to Nortel, each of which shall have a unique
numerical identification for tracking and administrative purposes, specifying
the types and quantities of Products and
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Services to be furnished by Nortel or any document that the parties mutually
agree upon in writing as the vehicle for procuring Products and Services
pursuant to this Agreement.
1.22 "Product(s)" shall mean, individually and collectively, the
Hardware, Software, and Documentation.
1.23 "Product Annex" shall mean, with respect to a specific Product,
additional or modified terms and conditions as set forth in Exhibit A, inclusive
of but not limited to those that may apply to any Third Party Hardware or Third
Party Software, unique to such Product.
1.24 "Quotation" shall mean a written budgetary or firm price quotation
issued by Nortel to Company or Company Affiliate for the supply of any Products
or Services pursuant to this Agreement.
1.25 "Service(s)" shall mean, individually and collectively, any of the
services set forth in this Agreement that Company may acquire from Nortel,
including maintenance, engineering, installation, training, data management,
program management, project management, commissioning, testing, technical
assistance Service with respect to Products and installation, and consulting.
1.26 "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.
1.27 "Ship Date" shall mean the date as agreed to by the parties, on
which a Product ordered by Company is scheduled to be shipped from Nortel's
facility or in the case of Software which is downloaded, the date upon which
such Software is to be downloaded to the System; however, Ship Date shall not
mean the date on which Non-Licensed Software is activated.
1.28 "Software" shall mean all computer software necessary for the use,
operation and maintenance of Products or a System, as described in this
Agreement and includes (i) computer programs in object code form or firmware
which (a) are owned by, or licensed to, Nortel, (b) reside in Product 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, but in
no event shall Software include source code.
1.29 "Software Release" shall mean Software or revisions to Software
containing problem fixes, new features and/or enhancements.
1.30 "Specifications" shall mean with respect to any Product the
specifications, performance standards and/or practices set forth in Northern
Telecom Practices ("NTPs") or similar documents published by Nortel that set
forth performance specifications and practices for such Product; provided,
however, that no future specifications or performance standards shall
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reduce, diminish or otherwise adversely impact the specifications or performance
standards applied to previously delivered Products.
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. For definitional purposes, "System" as used herein includes
all configurations of a System as it may evolve throughout the Term.
1.32 "Third Party Hardware" shall mean any hardware not of Nortel's
manufacture which shall be deemed to include any such hardware which Nortel adds
to its generally available Third Party Hardware price lists or so identifies to
Company in a Quotation.
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 "Turnover" shall mean, with respect to any System installed by
Nortel, that Nortel has completed its standard manufacturing, verification
cycle, installation and/or agreed-upon test procedures, as applicable, and that
the System is ready for acceptance testing by Company in accordance with Article
6.
1.35 "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. On the Turnover Date, Nortel shall provide to Company a certificate
setting forth the test results and stating that the applicable Products have
been installed in accordance with this Agreement and performs in accordance with
this Agreement and the Specifications.
1.36 "Volume Commitment" shall mean the amount of Nortel's Products and
Services to be purchased/licensed by the Company during the Term in an amount no
less than two hundred million dollars ($200,000,000) Net Price. "Net Price" as
used herein means the final price paid by the Company after all discounts,
reductions, rebates, volume discounts or adjustments of any kind are applied but
does not include sales tax and freight charges.
1.37 Unless the context otherwise requires, the terms defined in this
Article 1 shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
defined herein. When a reference is made in this Agreement to a Section, such
reference shall be to a Section of this Agreement unless otherwise indicated.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the construction, meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The use of any gender herein shall be deemed to include the neuter,
masculine and feminine genders wherever necessary or appropriate.
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ARTICLE 2. SCOPE OF AGREEMENT
2.1 Company or any Company Affiliate shall have the right to purchase,
and Nortel shall be obligated to sell, as, when and if ordered by Company or any
Company Affiliate during the Term, Products, Installation and other Services,
and the terms and conditions of this Agreement shall apply to such purchases.
Any Order placed by a Company Affiliate, under this Agreement, shall be subject
to the terms and conditions of this Agreement, as if the Company Affiliate had
entered into a separate contract with Nortel solely with respect to the items
ordered, except that a Company Affiliate that orders under this Agreement shall
not have rights to (i), any cooperative advertising funds pursuant to Section 15
(Cooperative Advertising) (ii) any late fees on liquidated damages as set forth
in Exhibit A, Article 4, or elsewhere in this Agreement and/or (iii) incentives
or credits as set forth in Section 2 through 5 of Schedule 1 in Annex A.1.
Nortel has the right to reject any Order as specified in Section 3.2 from any
Company Affiliate which is otherwise engaged with Nortel in an agreement for the
purchase and/or supply of any of the Products or Services provided under this
Agreement. All rights, claims or defenses (including the right to payment for
any System, Products or Services) Nortel has or may acquire hereunder shall be
asserted against the Company Affiliate (and may not be asserted against the
Company) which has received or is ultimately to receive the System, Products or
Services pursuant to such Order and such Company Affiliate shall have and may
enforce against Nortel all of the benefits, rights and obligations contained
herein. Company may use the Products itself, including use to provide services
to others, subject to the terms and conditions of this Agreement. Company
expressly represents that it is not buying Product for resale. All Products
shall be delivered and installed in the United States.
2.2 To the extent any terms and conditions set forth in this Agreement
are not modified by a Product Annex, the applicable terms and conditions and any
additional terms and conditions for such Product shall be set forth in a Product
Annex.
2.3 If specified in a Product Annex as a requirement, Company shall,
fifteen (15) days prior to each calendar quarter, 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 such forecast.
2.4 All references to prices, charges, fees or other amounts herein
shall be in U.S. dollars and all documentation, correspondence and communication
shall be in the English language. All Products purchased by Company hereunder
shall be new. For purposes of this Section 2.4, "new" shall mean Products which
have not been used for commercial service or for training or extended testing.
2.5 Company shall order Nortel's Products and Services during the Term
of the Agreement in an amount equal to or exceeding the Volume Commitment. To
achieve such Volume Commitment, Company shall order Products and Services in
such amounts as to meet cumulative volume targets ("Volume Targets") of
thirty-five million dollars ($35,000,000) in orders placed from July 15, 1999
through and including July 14, 2000, one hundred five million
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dollars ($105,000,000) in orders placed from July 15, 1999 through and including
July 14, 2001, and two hundred million dollars ($200,000,000) in orders placed
from July 15, 1999 through and including July 14, 2002. Should Company fail to
meet any of the applicable Volume Targets, then with respect to the one year
period ending on the date of the applicable Volume Target, Nortel shall:
(i) invoice Company for the difference between (A) the amount which
Company would have paid with respect to the Hardware ordered by
Company during the applicable one year period if the discounts
set forth in Chart 2.5 below had been applied to such orders
during such year in lieu of the discounts set forth in
Supplemental Terms Annex A.1, attached hereto, minus (B) the
amount actually paid by Company with respect to the Hardware
ordered by Company during the applicable one year period (which
amounts reflect the discount schedule set forth in Supplemental
Terms Annex A.1).
CHART 2.5 Year 1 ($35M) Year 2 ($105M) Year 3 ($200M)
--------- ------------- -------------- --------------
Switch Hardware (MTX) 54% 55% 56%
TDMA Hardware 54% 55% 56%
AMPS/TDMA Cell Site Hardware 49% 50% 51%
Radio/PA 62% 63% 64%
Cooperative Advertising 0% 1% 1.5%
Any orders cancelled by Buyer pursuant to Section 7.1 herein shall not
accrue towards the Volume Commitment.
2.6 During the Term Nortel shall provide to Company a one half percent
(.5%) executive credit for each incremental fifty million dollars ($50,000,000)
of Nortel Products and Services which Company purchases in excess of the Volume
Commitment. Such executive credit shall be applied to each Order issued after
satisfaction of the Volume Commitment.
ARTICLE 3. PLACEMENT OF ORDERS
3.1 To order Products and/or Services, Company shall submit to such
person as Nortel shall designate, an Order which shall at a minimum specify the
following, if applicable:
(i) the types and quantities of Products and Services to be furnished
by Nortel;
(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;
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(v) the Installation Site, if known;
(vi) the requested Ship Date and Turnover Date of the System; and
(vii) 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 and accepted by Nortel in writing
within fifteen business (15) days after receipt of Order; provided however that
Nortel agrees that all Orders which are within Nortel's standard delivery and
lead time intervals (if such lead times are set forth in the applicable Product
Annex), and which are otherwise in accordance with the terms of this Agreement,
shall be deemed automatically accepted by Nortel. Nortel shall extend the
pricing and discounts schedules as set out in the Product Annexes to any Company
Affiliate subject to the following: (i) a Company Affiliate with a pre-existing
Nortel contract for products similar to those to be purchased hereunder must
satisfy any purchase commitment under such pre-existing contract prior to taking
advantage of pricing and discounts in this Agreement and provided such
pre-existing agreement will be terminated prior to purchasing under this
Agreement, (ii) any Company Affiliate which is owned in whole or in part by an
entity that competes with Nortel in the manufacturing of communications
equipment or the provision of communications services shall be excluded from
purchasing Products or Services under this Agreement and (iii) if the Company
Affiliate is not deemed credit worthy by Nortel after Nortel's reasonable credit
evaluation, Company shall guarantee in writing the performance of the Company
Affiliate prior to Nortel's acceptance of such Affiliate's Order. An Order
submitted by a Company Affiliate pursuant to the terms and conditions of this
Agreement, and which Nortel has accepted, constitutes a Contract between the
Company Affiliate ordering and Nortel. On the face of the purchase Order issued
by a Company Affiliate, an identification must be provided that such entity is a
Company Affiliate. In the event Nortel fails to provide its acceptance of an
Order in writing within such fifteen (15) day period, such Order shall be deemed
to be accepted provided that no additional or special terms and conditions have
been written on the face of or otherwise incorporated into such Order by Company
Affiliate.
3.2.1 Company shall provide to Nortel good faith forecasts of
anticipated delivery levels of Wireless Products by product type, Nortel Product
identifier (including applicable Spare Parts), and maintenance personnel
requirements. Such forecasts shall be subject to acceptance by Nortel, such
acceptance not to be unreasonably withheld and with such acceptance to be only
refused based upon limitations of Nortel's production capacity and material
availability, which Nortel cannot reasonably avoid. In the event that any
forecast is not accepted, Nortel shall promptly inform Company of the quantities
of any relevant Product which Nortel expects to be able to deliver to Company.
Beginning with the first month of the Term, Company will deliver to Nortel on or
before the 20th day of each month a nonbinding forecast for the twelve (12)
month period commencing on the first day of the following month.
3.2.2 Nortel shall be obligated to deliver not less than one hundred
percent (100%) of the quantity stated for the first quarter following each
forecast, if Company has issued an Order for the Product at least ninety (90)
days in advance of the requested ship date for Products. In
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the event Company orders more than one hundred percent (100%) of the forecast
quantity for any quarter, Nortel shall make reasonable efforts to supply the
ordered quantity. If Nortel does not have sufficient quantities to fill
Company's orders in excess of one hundred percent (100%) of the forecast
quantity and orders by Nortel's other customers, Nortel shall allocate available
supplies among its customers on an equitable basis, giving no customer a higher
priority than Company, other than those customers who have a previously executed
contract with Nortel requiring delivery of specific Products. In the event that
Nortel is unable to supply the ordered quantity in the case of Orders for more
that one hundred percent (100%) of the forecast quantity and Company obtains the
quantity which Nortel is unable to supply from a third party, such undelivered
orders shall count toward the Volume Commitment. In the event that Company shall
fail to take delivery of ninety percent (90%) or more of the forecast quantity
for any calendar quarter, Nortel shall be entitled to adjust its obligation to
deliver one hundred percent (100%) of the forecast quantity for the ensuing
quarter to some lesser percentage as the parties may mutually agree upon.
3.2.3 Should Nortel receive a forecasted Order with lead times that are
shorter than Nortel's standard lead times, Nortel shall use commercially
reasonable efforts to accommodate the lead times set forth in such Order, and
shall, within fifteen business (15) days, indicate in writing to Company whether
such shortened lead times are acceptable. If such shortened lead times are
unacceptable, the parties hereto shall endeavor to agree upon lead times that
are mutually accepted. Should Nortel not notify Company of its non-acceptance of
a shortened lead time within twenty business (20) days of its receipt of the
Order containing the shortened lead time, such Order (including the shortened
lead times) shall be deemed accepted without any further confirmatory action by
either party.
3.3 All Orders issued by Company pursuant to this Agreement shall refer
to and specifically incorporate this Agreement by reference and the terms and
conditions herein shall govern the transaction resulting from such Order
provided that such Order is accepted or deemed accepted by Nortel; provided,
however, that notwithstanding that an Order may not refer to this Agreement, any
Order for Products or Services issued during the Term by Company or a Company
Affiliate (provided such Company Affiliate has no other agreements with Nortel)
shall be deemed to have been issued pursuant to this Agreement unless the
parties expressly agree to the contrary in writing (duly signed by authorized
representatives of both parties). 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 null and void and
shall have no force or effect. However, any special terms and conditions written
on the face of or otherwise incorporated into an Order shall, upon acceptance in
writing by Nortel, for such Order only, supersede the specific terms and
conditions contained in this Agreement, including all Exhibits attached hereto,
which are in conflict, but only to the extent of such conflict.
3.4 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 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
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acknowledges that a premium charge, as mutually agreed by the parties, may be
applied by Nortel in the event that a Change Order requires an additional amount
of work (such as engineering) to be undertaken to comply with such changes.
Delivery locations may be changed by written notification to Nortel by Company
up to twenty (20) business days prior to Ship Date.
3.5 If Company desires to receive a budgetary or firm Quotation from
Nortel for a Product or Service, or in the event Company desires the assistance
of Nortel in determining what Products or Services are required for a System or
an Extension, Company shall submit such request in writing to Nortel's Director,
Commercial Marketing, or such other person as designated by Nortel. The request
for Quotation shall include the information listed in Section 3.1, as
applicable, and such additional information as the parties agree is necessary
for the furnishing of a Quotation.
3.6 Nortel shall respond within fourteen business (14) days thereafter
in writing to requests for budgetary Quotations and requests for firm
Quotations. Unless otherwise specified in the firm Quotation, such firm
Quotation shall be valid one hundred twenty (120) business days from the date of
such Quotation. Budgetary Quotations shall be provided for information and
planning purposes only and shall not be considered to be a final or firm
statement binding on either party. Firm Quotations may be accepted by issuance
of an confirming Order to Seller by Company referencing the applicable
quotation. The 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 requested by Company.
(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 requested by Company.
Except in the case of Switch Installation, if Company rejects a proposal for
Services submitted by Nortel under Section 3.6 above, Company may elect (i) to
perform such Services itself, or (ii) to have such Services performed on its
behalf by a sub-contractor of Company.
3.8 The Ship Date shall be based on Nortel's standard intervals for the
applicable Product (which may be set forth in the applicable Product Annex);
however, the parties shall always mutually agree on the Ship Date, provided that
the Ship Date shall not be outside the standard interval unless the parties
mutually agree otherwise.
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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.
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ARTICLE 4. PRICE AND PAYMENT
4.1 Nortel shall charge Company for each Product and/or Service ordered
by Company in accordance with the prices set forth in each accepted Order, which
prices shall be the lowest of the prices set forth in (i) a Product Annex; (ii)
a Firm Quotation; (iii) Nortel's then current prices; or (iv) as specified
elsewhere in this Agreement or as otherwise mutually agreed in writing (subject
in each case to any applicable discounts made available to Company).
4.2 In the event Company orders other Nortel hardware, software and
services not identified in Exhibit A (and therefore the license fees for such
Software is not included in the existing Annual Software License Fee), Nortel
agrees to negotiate in good faith with Company in order that the Software
License Fee may be adjusted to accommodate for such additional software
right-to-use fees.
4.3 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 by a reasonable amount, following the provision of written notice
to Company not less than thirty (30) days prior to the effective date of such
increase. The price increase of such Product due to a component shortage shall
be limited to a reasonable amount under the then-current circumstances having
regard for industry conditions 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.
4.4 Nortel shall promptly extend to Company any price reductions 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 For all Orders, Nortel shall invoice Company for Products and
Services 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. Except for
installation Services, for Services that have a duration of more
than one (1) month to complete, Nortel may invoice Company
monthly for that portion of such Services which have been
performed as of such invoicing date.
(ii) for Merchandise or Documentation provided on a furnish-only
basis, one hundred percent (100%) of the price on the Ship Date;
and
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(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 billed
quarterly in advance unless otherwise agreed. Some Services may
be subject to monthly invoicing as set out in a Product Annex or
separate Service agreement. To the extent such Services are to be
invoiced differently then set out in this paragraph (iii), such
differences shall be set forth in the applicable Product Annex or
separate Service agreement and such provisions shall take
precedence.
4.6 Each invoice shall be paid in full within thirty (30) days after the
date of such invoice. In the event that Company does not pay an invoice in full
within such thirty (30) day period, then Nortel may charge Company interest on
the outstanding portion of such invoice, from day thirty one (31) forward, at
the rate of one and one half percent (1.5%) 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. In addition, Company
agrees to pay all collection costs and reasonable legal fees incurred by Nortel
as a result of late payment or non-payment by Company.
4.7 The unit prices of Hardware include use of the applicable Software
without additional charge, except as otherwise expressly provided herein or in
an Annex hereto. Nortel will furnish Company, at Nortel's then-current charges
and fees, all other Documentation required by Company for Products and Systems
purchased hereunder. Nortel shall also provide Company with a second set of
Documentation at no additional cost to Company. Prices for any additional sets
of Documentation (or portions thereof) shall be those set forth in Annex A.
Nortel represents that the Documentation, in conjunction with appropriate
training, is all that is reasonably necessary to allow the use, maintenance and
operation of the Products and Systems, as described in this Agreement.
ARTICLE 5. SHIPMENT, TITLE AND RISK OF LOSS
5.1 Prior to the Ship Date, Company shall have the right to reschedule
any pending Orders provided that (i) a minimum period of notice prior to such
Ship Date is given to Nortel by Company in accordance with the applicable
Product Annex; and (ii) the new Ship Date is within ninety (90) days of the
original Ship Date. However, each Order may only be rescheduled once. Nortel
shall notify Company in advance of the need to incur any storage fees, insurance
and demurrage costs and Company shall reimburse Nortel for such costs incurred
(without markup) with respect to such rescheduled Orders.
5.2 Risk of loss and damage to Products shall pass to Company upon
delivery to the loading dock at the Installation Site or other delivery location
specified by Company in an Order. Company shall keep such Products fully insured
for the total amount then due Nortel for such Products. Company shall pay
transportation charges, including insurance, associated with the shipment of
Products; however if the parties agree, Nortel shall prepay transportation
charges, and insurance for delivery of Products to the Installation Site or
other delivery location or other designated receiving point as specified in an
Order. Company shall have the right to discuss
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with Nortel shipping costs, methods, insurance and arrangements with respect to
transportation costs (including insurance) if Company in good faith believes
there is a more economical method to transport the Products (which method shall
not have any impact on delivery schedules) and the effect of which will be to
reduce costs to Company. In the event that such more cost efficient means of
shipping are available with no negative impact on delivery schedules, Nortel
shall endeavor to abide by Company's suggestions and the cost to Company shall
be reduced accordingly. The charges therefore shall be invoiced by Nortel and
paid by Company to Nortel in accordance with Article 4 above.
5.3 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 ("Total Fee") furnished by Nortel in connection with such
Hardware. Prior to payment of the Total Fee for the Products and Services in an
Order, Company shall not sell or lease the Hardware, or allow any liens or
encumbrances to attach to the Hardware or Software, or remove the Hardware or
Software from the Installation Site without the prior written consent of Nortel,
such consent not to be unreasonably withheld.
5.4 Subject to Section 5.1, if Company notifies Nortel prior to a Ship
Date that Company does not wish to receive such Products on the Ship Date, or
the Installation Site or other delivery location is not prepared in sufficient
time for Nortel to make delivery in accordance with such date, or Company fails
to take delivery of any portion of the Products in an Order when shipped, Nortel
may place the applicable Products in storage. In that event, Company shall be
liable for all actual, reasonable out-of-pocket additional costs thereby
incurred by Nortel. Delivery by Nortel of any Products to a storage location as
provided above shall be deemed to constitute delivery of the Products to Company
for purposes of this Agreement, including, provisions for payment, invoicing,
passage of risk of loss, and commencement of the warranty period.
5.5 Until the Total Fee is paid, Company grants to Nortel a purchase
money security interest in the Products in an Order and their proceeds or such
other similar protection as may be available in the applicable jurisdiction.
Company shall cooperate with Nortel in preserving and perfecting Nortel's
security interest in the Products and Company shall promptly (i) execute and
deliver to Nortel such financing statements as Nortel may require; and (ii)
execute and deliver to Nortel such other agreements, documents and instruments
as Nortel may require to perfect and maintain the validity, effectiveness and
priority of the security interest created or intended to be created by this
Agreement. Company authorizes Nortel to file one or more financing or
continuation statements and amendments thereto, relating to all or any part of
the Products in an Order without signature of the Company where permitted by
law. A carbon, photographic or other reproduction of this Agreement or of any
financing statement covering the Products or any part thereof shall be
sufficient as a financing statement and may be filed as a financing statement.
5.6.1 Company shall provide Nortel or its subcontractors with reasonable
access to its Installation Sites or other Company facilities during the times
specified by Nortel and as are
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reasonably necessary for Nortel to perform its obligations hereunder. Nortel
shall comply with Company's reasonable site and security regulations of which
Nortel is informed by Company.
5.6.2 All sites at which the Products shall be delivered or installed
shall be prepared by Company in accordance with Nortel's standards, including
environmental requirements, as set forth in the applicable Product Annex. Prior
to and during installation, Company shall ensure the timely and adequate
delivery, installation and functioning of the electrical and communications
connections and other environmental requirements, including but not limited to,
HVAC systems, specified in Nortel's instructions, Specifications, Documentation
or in a Product Annex.
5.6.3 Company shall provide reasonable working space and facilities,
including heat, light, ventilation, telephones, electrical current, waste
removal and other necessary utilities for use by Nortel personnel performing
installation or other Services, and adequate secure storage space, if required
by Nortel, for Products and materials. Company shall also provide adequate
security against theft, damage or other loss for the Products while on Company's
Installation Site or other delivery location specified by Company.
5.6.4 Company shall obtain all necessary governmental permits applicable
to Company in connection with the installation, operation, and maintenance of
Products furnished hereunder, excluding any applicable permits required in the
normal course of Nortel's doing business. Any information which Nortel
reasonably requests from Company and which is necessary for Nortel to properly
install or maintain the Products shall be provided by Company to Nortel in a
timely fashion and in a form reasonably specified by Nortel.
5.6.5 Nortel represents that a Product furnished hereunder shall comply,
to the extent required, with the requirements of Part 24 of the Federal
Communication Commission's Rules and Regulations pertaining to personal
communication services in effect upon the Effective Date. In addition, Nortel
represents that a Product furnished hereunder shall comply, to the extent
required, with the requirements of Subpart J of Part 15 of the Federal
Communication Commission's Rules and Regulations in effect upon the Effective
Date, including those sections concerning the labeling of such Product and the
suppression of radio frequency and electromagnetic radiation to specified
levels. If , as a result of new or changed requirements by the Federal
Communications Commission after the Effective Date, there is a change required
in such personal communications services or Products, the prices therefore will
be adjusted equitably to reflect the added cost and expense of any such change.
Nortel makes no undertaking with respect to harmful interference caused by (i)
installation, repair, modification or change or Products or Software by other
than Nortel, its employees, subcontractors or agents; (ii) Products being
subjected to misuse, neglect, accident or abuse by other than Nortel, its
employees, subcontractors or agents; or (iii) Products or Software being used in
a manner not in accordance with operating instructions or in a suitable
installation environment or operations of the equipment in the frequency range
reserved for Company within the area of operation of such Products or Software;
or (iv) interference caused by operation of other radio systems, lightning,
motor ignition or other similar interference.
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ARTICLE 6. TESTING, TURNOVER AND ACCEPTANCE
6.1 If installation Services are ordered by Company, Nortel shall, upon
completion of such installation test the Products in accordance with Nortel's
Turnover procedures (as set forth in the applicable Product Annex) to verify
that such Products function substantially in accordance with the applicable
Specifications; provided, however, that Nortel shall notify Company as soon as
it knows, but at least five (5) business days before the date on which such
testing shall be conducted. Upon completion of such verification, Nortel shall
provide to Company a written notice of Turnover. 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. If a Company representative is not present
during the testing, Nortel shall proceed with the tests and promptly forward the
test results (including actual test sequences, deviations, and retests
necessary, if any, to obtain successful conclusion) to Company.
6.1.1 If the tests show that the applicable Products do not meet the
Specifications, then Nortel shall, at its own expense, correct the defects as
soon as practicable. The testing (or so much of it as necessary) shall be
recommenced promptly after such correction, in accordance with this Article 6.
6.1.2 Testing that will affect service to subscribers on a System shall
occur during the hours from 11:00 PM to 5:00 AM local time, or at such other
times as are mutually agreed to by Company and Nortel.
6.2 Within fifteen (15) business days after the Turnover Date, Company
shall either accept the Product in writing by execution of a notice of
Acceptance, 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. If Acceptance does not occur within such
fifteen (15) business days after the Turnover Date and Company has not indicated
to Nortel in writing its basis for not accepting such Product, then Acceptance
shall be deemed to have occurred. Upon Acceptance, punch list items will be
identified and Nortel shall, as promptly as reasonably practicable, complete and
correct all punch list items. Nortel shall use its best efforts to complete all
such punch list items within forty-five (45) days of Acceptance.
6.3 If Nortel does not install Products furnished hereunder, Nortel
shall, prior to delivery of the Products, perform such factory tests as Nortel
determines to be appropriate in order to confirm that such Products perform
substantially in accordance with the applicable Specifications and, to the
extent available, provide a copy of any such test results to Company. Company
shall be deemed to have accepted the Products based upon such tests and
Acceptance shall be deemed to have occurred upon the Ship Date. In the event
Company or any other entity intends to perform installation of Products, (except
for installation of Switches and non-wireless Products which are not permitted
to be installed other than by Nortel, as specified in the applicable Product
Annex or Documentation) Company or such entity may be required to
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complete prerequisite training or certification in accordance with Nortel's
policies and procedures.
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 Products, such as Merchandise, which are purchased separately from a
System, shall be deemed accepted upon the Ship Date. Services which are
purchased separately from a Product shall be deemed to be accepted upon
completion of such Services or upon specific milestones as may be identified in
a Product Annex.
6.6 Company shall not unreasonably withhold Acceptance. Nortel shall
correct any deficiencies identified by Company in the manner described in this
Article whereby such Products do not materially conform to the Specifications.
When Nortel has corrected such deficiencies, Company shall accept the Products
in writing. Company's failure to either accept or provide notice of
non-conformance within the timeframe from the Turnover Date, as prescribed in
Section 6.2, shall constitute Acceptance of the Products.
6.7 Following Acceptance of Products, 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, information, facilities or
services provided directly or indirectly by Company and tested in
conjunction with the applicable Products, or anomalies directly
resulting from electromagnetic or other interference generated by
adjacent material not provided by Nortel, or (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
adversely affect System performance, service to subscribers, data
collection with respect to billing, networking, administration or
maintenance.
6.9 With respect to any deficiencies of the type described in Section
6.8(i), Nortel shall at Company's request and expense (at Nortel's standard
rates) assist Company in the elimination or minimization of any such
deficiencies. With respect to any deficiencies or shortages as described in
Section 6.8(ii), 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.
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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 such non-acceptance is due to a deficiency of the type
described in Section 6.8(i), Nortel will invoice Company for Nortel's
investigation of the matter consisting of the standard labor rate for Nortel's
personnel who travel to the Installation Site and the reasonable travel and
living expenses incurred by such personnel.
ARTICLE 7. ORDER CANCELLATION
7.1 If, prior to the Ship Date, Company cancels all or any part of an
Order, Company shall pay to Nortel a cancellation charge for the Products or
each item of Third Party Hardware or Third Party Software that has been canceled
in accordance with the schedule set forth in the applicable Product Annex.
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 be canceled only if Company agrees to pay Nortel's
reasonable, out-of-pocket expenses for such customization.
ARTICLE 8. WARRANTY
8.1 Nortel warrants that for a period of eighteen (18) months from the
Ship Date of a System or an Extension the Hardware contained in such System or
Extension under reasonable use and service will be free from defective material
and faulty workmanship and shall comply with the applicable Specifications. The
warranty period for Merchandise shall be twelve (12) months from the Ship Date
of such Merchandise. The foregoing warranties shall not apply to items normally
consumed during operation of a System such as, but not limited to, lamps and
fuses.
8.2 Nortel warrants that any installation Services 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 Services.
8.3 Nortel warrants that any Licensed Software, including any Licensed
Software that is delivered separately from Hardware, shall function for twelve
(12) months from the applicable Ship Date without any adverse, , non-conformance
to the applicable Specifications with respect to System performance, service to
subscribers, data collection with respect to billing, network administration or
maintenance. If the Licensed Software fails to so function, Company's exclusive
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 Software not performed by Nortel or
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without Nortel's approval, other than with respect to Modifiable Software, shall
void this warranty.
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 at its sole option and expense the
defective Hardware so that it substantially complies in all material respects
with the applicable Specifications. The warranty service shall be performed at
the Installation Site or Nortel's facility as determined by Nortel. If Nortel is
unable to repair or modify the defective Hardware within a reasonable period of
time so that such Hardware conforms to the applicable Specifications, Nortel
shall replace the defective Hardware with Hardware that conforms to such
Specifications. Replacement Hardware may be new or reconditioned at Nortel's
option. 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 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 one hundred and twenty (120) 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, service-affecting non-conformance found in such Licensed Software,
shall expire on the later of one hundred and twenty (120) 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 known to Nortel, which are in
force on the date of acceptance of the applicable Order therefore, which laws or
regulations directly impose obligations upon any manufacturer, seller or, if
applicable, installer of such Products.
8.7 The performance by Nortel of any of its obligations described in
this Article 8 shall not extend the applicable warranty period.
8.8 The warranties set forth in this Article shall not apply to any
Products where the defect or non-conformance is directly due to (i) accident,
fire, explosion, power failure, power surge or other severe power irregularity,
lightning, alteration, abuse, misuse or improperly performed repair not
performed by Nortel; (ii) improper storage; (iii) failure to comply with all
applicable environmental requirements for the Products as specified by Nortel in
the applicable Product Annex or any other applicable supplier, such as but not
limited to temperature or humidity ranges; (iv) improper performance of
installation, maintenance, operation or other service in connection with the
Products, provided such service was not performed or authorized by Nortel or on
Nortel's behalf; (v) improper use in conjunction with an incompatible product or
a product not purchased under this Agreement; (vi) any negligence by anyone
other than Nortel, its agents or subcontractors; or (vii) where written notice
of the defect has not been given to
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Nortel within the applicable warranty period. The warranties set forth in this
Article shall not apply to Third Party Software or Third Party 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
of such Third Party Software or Third Party Hardware. For purposes of subsection
(iv), the term "installation" shall not mean the routine plug-in of the
components done in accordance with Nortel's guidelines.
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8.9 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 de-installed and packed by Company in accordance with
Nortel's instructions. Nortel shall 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. In the
event Company fails to return defective Hardware and Nortel has shipped such
replacement Hardware, Nortel shall invoice Company at Nortel's applicable
then-current prices for such replacement Hardware, thirty (30) days after the
Ship Date of such replacement Hardware. In the event that Nortel wishes to
replace defective Hardware and Company requests on-site repair, then, if
mutually agreed, Nortel will make repairs on-site at Nortel's then-current
charge for such repairs.
8.10 If the Hardware returned to Nortel pursuant to the immediately
preceding section 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 Nortel's then-current prices for such
replacement Hardware.
8.11 Company shall bear risk of loss or damage and shall pay for all
transportation charges for Hardware returned to Nortel, and Nortel shall bear
risk of loss or damage and pay for transportation charges for repaired or
replacement Hardware shipped to Company. Title to repaired Hardware shall pass
to Nortel upon receipt. Title to replacement Hardware shall pass to Company upon
receipt.
8.12 During the applicable warranty period, electronic circuit board
components, subassemblies and other Hardware (which other Hardware may be
deinstalled and reinstalled by Company in the ordinary course of business) will
be repaired on a repair or replace basis, with Company responsible for fault
isolation (except to the extent that Company could not have reasonably been
expected to isolate such fault without the assistance of Nortel), removal of
such defective boards, subassemblies or other Hardware, replacement from spare
stock (except to the extent that such removal and replacement requires the
specialized expertise of Nortel), and packing and shipping to Nortel's closest
repair facility. Company will maintain a reasonable stock of spare board
components, subassemblies or other Hardware as reasonably recommended by Nortel
for this purpose.
8.13 In the event that, during the applicable warranty period, Company
experiences failure of electronic circuit board components, subassemblies or
other Hardware (which other Hardware may be deinstalled and reinstalled by
Company in the ordinary course of business) which Company reasonably believes is
excessive, Company shall notify Nortel thereof, providing the details of such
failures in sufficient detail to allow investigation thereof by Nortel. Nortel
shall analyze the nature and extent of such failures in light of the Nortel
specifications for such items and provide a written response to Company
proposing a course of action to remedy such failures and (1) Nortel shall give
highest priority to the remedy of the cause of such failures, and (2) Nortel
shall, without charge to Company, supply to Company a reasonable quantity of
additional spare boards, subassemblies or such other Hardware of each type so
depleted, as reasonably necessary to maintain an adequate emergency replacement
stock, until
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implementation of a permanent remedy. In the event that the Company believes
such failure is excessive, but Nortel disagrees, such dispute shall be resolved
pursuant to Article 19.1 hereof. Upon implementation of a permanent remedy, (1)
all excess boards, subassemblies or other Hardware supplied under this Section
8.13 shall be returned to Nortel, and (2) all in-service and spare stock boards,
subassemblies and other Hardware which are the subject of the corrections
contemplated by this Section 8.13 shall be updated, at no charge to Company, to
the revision level incorporating the permanent remedy.
8.14 In the event that, during the applicable warranty period, Company
experiences failures of Hardware (other than electronic circuit board
components, subassemblies or other Hardware which may be deinstalled and
reinstalled by Company in the ordinary course of business), which the Company
believes is excessive, Company shall notify Nortel thereof, providing the
details of such failures in sufficient detail to allow investigation thereof by
Nortel. Nortel shall analyze the nature and extent of such failures in light of
the Nortel specifications for such items and provide a written response to
Company proposing a course of action to remedy such failures if it is determined
they are excessive and Nortel shall give highest priority to the remedy of the
cause of the failures. In the event that the Company believes such failure is
excessive, but Nortel disagrees, such dispute shall be resolved pursuant to
Article 19 hereof. If during the period prior to the implementation of a
permanent remedy, the supplying to Company by Nortel of additional items of such
Hardware is inappropriate, Nortel agrees during such period to negotiate in good
faith for reasonable adjustments commensurate with the effect upon Company
caused by such failures and to make such adjustments as are mutually agreed to
by Company and Nortel.
8.15 Company may, at any time reasonably following an event described in
Sections 8.13 or 8.14 above, request that Nortel make special adjustments in
warranties and freight payments relating to such event, and Nortel agrees to
negotiate in good faith for reasonable adjustments commensurate with the effect
upon Company caused by such event and to make such adjustments as are mutually
agreed to by Company and Nortel.
8.16 Nortel agrees to commence work on all Hardware, Software or
Installation defects not materially affecting System performance, service to
subscribers, billing, networking, administration or maintenance within twenty
(20) days of notification thereof and will use all reasonable efforts to cure
the same as promptly as practicable.
8.17 Notwithstanding anything to the contrary contained in any provision
of this Article 8 or any other provision of this Agreement, if as a result of
any invocation of the warranties contained herein, System performance, service
to subscribers, billing, networking, administration or maintenance are
materially and adversely affected, Nortel shall, at its sole cost and expense,
commence work to correct such defect or replace such defective Hardware or
Software as soon as practicable, but in no event shall such commencement be
later than four (4) hours after Company's notification of Nortel's technical
assistance service ("TAS") of such defect, and shall ship any required
replacement Hardware (or components thereof) or replacement Software (it being
understood and agreed that if Software modifications are required, Nortel shall,
as promptly as practicable, make such modifications) to Company as soon
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thereafter as practicable but in no event later than twenty-four (24) hours
after notice of such defect. Where the services of Nortel's service personnel at
Company's sites are required hereunder, then Nortel shall use all reasonable
efforts to, at its sole cost and expense, dispatch such service personnel as are
required to correct such defects as soon after receipt of notice as practicable
but in no event shall any shipment of emergency replacement Hardware be later
than twenty-four (24) hours after notice of such defect.
8.18 If any Hardware or Software is rendered inoperative as a result of
a natural or other disaster, Nortel will make all reasonable efforts to supply
or help locate backup or replacement Hardware or Software for Company by using
its reasonable best efforts to obtain the waiver of any delivery schedule
priorities and by making replacement Hardware or Software available from the
facility then producing such products, or from inventory.
8.19 It is the intention of the parties that any problem, defect or
failure in a System, Hardware or Software described in these warranty provisions
shall be corrected as promptly as practicable regardless of fault, and in this
regard, Nortel agrees to use all reasonable efforts to work and cooperate with
Company and any other manufacturer, contractor or vendor to correct any such
problem, defect or failure to the extent that Nortel has the capability to do
so. Nortel shall, at Company's request, provide reasonable assistance to Company
in determining the cause of such problem, defect or failure and recommend the
appropriate action. Nortel shall, upon its receipt of a request for assistance
hereunder from Company, use all reasonable efforts to correct any problem,
defect or failure in a System, Hardware or Software or any other hardware or
software (whether or not such problem, defect or failure is the responsibility
of Nortel) as promptly as practicable and ▇▇▇▇ Company for such. If Company and
Nortel disagree as to the cause of the problem, defect or failure or the action
to be taken, then, at Company's written request, Nortel shall nevertheless
correct any problem, defect or failure in the System (whether or not such
problem, defect or failure is the responsibility of Nortel) as promptly as
practicable and ▇▇▇▇ Company for such; provided, however, that Nortel shall not
be required to repair or modify any hardware purchased by Company from any third
party unless Nortel has the ability to do so. The parties shall thereafter
negotiate in good faith to determine the responsibility for such problem, defect
or failure. If the parties are unable to agree to which party bears
responsibility for such problem, defect or failure, such dispute shall be
submitted to a Third Party Engineer pursuant to Section 19.1 hereof.
8.20 Nortel represents and warrants that Nortel Software supplied to
Company under this Agreement, shall function, both on and after January 1, 2000
and February 29, 2000 and during the applicable Warranty Period of the
applicable Software under this Agreement, with respect to any date dependent
operations, without any material, service-affecting or operational
non-conformance to its applicable specifications, provided that both any
Hardware and/or any specific Software load or release designated as necessary by
Seller has been installed with respect to such Software at Company's expense. If
Nortel's Software fails to so function, Company's sole remedy and Nortel's sole
obligation under this warranty is for Nortel at the earliest practicable time,
to correct such failure through, at Nortel's option, the replacement or the
repair or modification of the applicable Nortel Software or such other actions
as Nortel reasonably determines to be appropriate.
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The foregoing does not constitute a commitment by Nortel (a) to support
the Software beyond its contractually committed Warranty Period, or (b) that the
date format used by the Nortel Software complies with any particular standard.
Some Nortel Software may continue to use year representations which do not use
four digits where such representations can be interpreted without ambiguity as
to century.
8.21 Services furnished by Nortel hereunder shall be performed with due
care and skill in a professional and workmanlike manner.
8.22 Company may at any time acquire hardware and software from a source
other that Nortel, and such hardware and software may be installed in a System
without the acquisition of such hardware and software affecting the warranties
contained in the Agreement; provided, however, that the warranties set forth in
this Article shall not apply to any defects or non-conformances in Products due
to, or caused by, the installation or use of any such hardware or software
acquired from a source other than Nortel. Company agrees that Nortel does not
warrant any hardware or software or services not provided by Nortel.
8.23 Nortel and Nortel's vendors of Third Party Hardware and Third Party
Software, as appropriate, shall not have any responsibility to Customers for
warranties offered by Company to such Customers and Company hereby indemnifies
and holds harmless Nortel and Nortel's vendors, as appropriate, from any claims,
damages or liabilities arising out of, or relating to, any warranties offered by
Company to such Customers.
8.24 THE WARRANTIES, CONDITIONS AND REMEDIES SET FORTH HEREIN CONSTITUTE
THE ONLY WARRANTIES, OBLIGATIONS OR CONDITIONS OF NORTEL WITH RESPECT TO THE
PRODUCTS AND SERVICES AND ARE COMPANY'S SOLE AND EXCLUSIVE REMEDIES IN THE EVENT
SUCH WARRANTIES OR CONDITIONS ARE BREACHED. THEY ARE IN LIEU OF ALL OTHER
WARRANTIES OR CONDITIONS, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. NORTEL SHALL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL,
PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING LOST REVENUES OR PROFITS OR OTHER
ECONOMIC LOSS OF ANY NATURE WHATSOEVER ARISING OUT OF NORTEL'S BREACH OF
WARRANTY OR CONDITION.
ARTICLE 9. NORTEL'S ADDITIONAL OBLIGATIONS
9.1 Nortel shall make training available to 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.
9.2 Upon request, Nortel shall provide Company with copies of its then
current training catalogue. Upon the request of Company, Nortel shall provide to
Company such training
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as Company requests, at a time and place mutually agreed upon and at the prices
to be quoted for such training. The cancellation fees set forth in the training
catalogues shall apply.
9.3 Nortel shall include its standard Documentation package, if any,
with each shipment of Products. Nortel shall make the Documentation available on
its choice of media, which shall include, where available, CD-ROM or other
electronic media. Nortel shall provide Company with any other Documentation that
is ordered at its then-current prices therefore. Documentation provided via
Nortel's CD-ROM media may be printed and copied and Documentation provided in
paper format may be copied, to the extent such Documentation so provides, and
only to the extent such printing or copying is necessary for the operation and
maintenance of the Products to which the Documentation pertains. However,
Company may not press or burn any copies of CD-ROM discs.
9.4 During the term of this Agreement, Company may acquire various
support Services from Nortel in connection with the Products Company acquires
from Nortel under this Agreement. These Services may 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.
9.5 During the Term, of this Agreement, Nortel shall make available
post-warranty Technical Assistance Services ("TAS") at no charge to Company, as
set forth in Supplemental Terms Annex A.3 to this Agreement.
ARTICLE 10. SOFTWARE LICENSE
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 Party Software vendor.
10.2 During the Term upon Company's payment to Nortel of the applicable
fees with respect to any Software furnished to Company pursuant to this
Agreement, Nortel hereby grants to Company, subject to the applicable terms and
conditions of this Article 10, a personal, non-exclusive, perpetual,
royalty-free right and license to use the Licensed Software furnished to Company
only in conjunction with Company's use of the Hardware with respect to which
such Licensed Software was furnished for the life of that Hardware (or any
replacement Hardware provided by Nortel) 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. The right to use Software or any
individual feature thereof may be restricted by a measure of usage and/or
applications based upon the number of devices, subscribers, or some similar
measure. Expansion beyond a specific usage level may require payment of an
additional fee.
10.3 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: i) hold the Software, including, ,
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any methods or concepts utilized therein in confidence for the benefit of Nortel
and/or its suppliers, as appropriate; ii) not provide or make the Software
available to any person except to its employees on a `need to know' basis; iii)
not reproduce, copy, or modify the Software in whole or in part except as
authorized by Nortel; iv) not attempt to decompile, reverse engineer,
disassemble, reverse translate, or in any other manner decode the Software; v)
issue adequate instructions to all persons, and take all actions reasonably
necessary to satisfy Company's obligations under this license; and vi) forthwith
return to Nortel, or with Nortel's consent destroy a) upon termination of the
license as set forth herein, or b) upon receipt of replacement, modified, or
updated Software, any magnetic tape, disc, semiconductor device or other memory
device or system memory and/or Documentation or other material, including, all
printed material furnished by Nortel to Company.
10.4 Company shall not export or re-export the Licensed Software and/or
associated documentation from the fifty states of the United States and the
District of Columbia.
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 or is required to be disclosed through government
regulation or court order.
10.6 Nortel may issue updates to the Software from time to time, and
upon Company's continued payment of applicable right to use fees, if any, shall
license such updates to Company. The right to use fees for updates do not
include the price of any associated Hardware that may be required.
10.7 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 Licensed Software to any person who does not acquire legal title to
such Hardware; or (ii) sublicense the rights herein granted as to such Licensed
Software to any other 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 or delayed.
10.8 Company shall indemnify and hold Nortel and its suppliers, as
appropriate, harmless from any loss or damage resulting from whose breach of
this Article 10. The obligations of Company under this Article 10 shall survive
the termination of the Agreement and shall continue if the Software is removed
from service but still within the possession of Company.
10.9 If the Software or any part thereof is lost or damaged (other than
due to the fault of Company) before Turnover, Nortel will promptly replace it at
no additional cost to Company. Any such Software lost or damaged after Turnover
or due to the fault of company shall be replaced by Nortel at a charge to
Company equal to Nortel's actual cost for delivery and implementing such
replacement Software.
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10.10 Nortel agrees to make available new Software Releases as they
become commercially available in order to facilitate the continued growth of the
Systems. Nortel further agrees, wherever possible and commercially practicable,
to exercise its reasonable efforts to develop Software Releases in a manner that
will maximize Company's ability to continue utilizing previously purchased
Software and Hardware, whenever possible.
10.11 Upon the request of Company, Nortel shall provide to Company the
most recent Documentation in the case of any Software Releases delivered to
Company. It is understood that such possession shall not constitute a transfer
of ownership or ownership rights in such Documentation. Upon a reasonable
showing by Company that additional Software documentation is required by Company
for its full understanding of the operation of the System(s) purchased
hereunder, Nortel shall use its reasonable efforts to provide such additional
documentation at no cost to Company.
10.12 If Company elects to remain on a prior Software Release, Nortel's
sole obligation hereunder shall be to make available maintenance for the
Software for the previous two consecutive releases from the then-current,
Nortel-numbered release (i.e. number Software Release).
Non-Licensed Software
10.13 Certain Software delivered by Nortel may include Non-Licensed
Software. Non-Licensed Software includes (i) any Software for which the
applicable right to use fees have not been paid; and (ii) Software for which a
periodic right to use fee has expired and the applicable additional periodic
right to use fees have not been paid. Company shall submit to Nortel an Order
for any Non-Licensed Software that Company desires to license or renew.
10.14 When Non-Licensed Software is placed into service, the applicable
right to use fees shall be payable. Company shall also have the option to pay
the applicable right to use fees for any Non-Licensed Software upon installation
of a Software load containing such Non-Licensed Software.
10.15 To ensure Company's proper activation and/or usage of only the
appropriate Software, Company shall 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.
10.16 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 by Company prior to activation
and/or usage of the applicable Software; (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.
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10.17 Nortel reserves the right to access by remote polling any site in
which Software has been installed to determine which Software has been
activated. Such polling shall be done so as not to unreasonably interfere with
Company's use of the Products.
10.18 Nortel shall issue invoices to Company, 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 Nortel determines as a
result of the remote polling of a site and for which Company has not previously
paid the appropriate right to use fee.
10.19 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.
Modifiable Software
10.20.1 Notwithstanding anything to the contrary above, upon payment to
Nortel of the applicable fees, Nortel hereby grants to Company, subject to the
applicable terms and conditions of this Article 10, a personal, perpetual
(reserve), royalty-free, non-transferable, non-assignable and non-exclusive
right and license to modify Licensed Software which Nortel identifies as
Modifiable Software. Upon the modification or creation of any Applications, or
the modification or creation of any Building Blocks, Nortel shall have no
obligations with regard to warranty under Article 8 or indemnity under Article
11 for such Applications or Building Blocks.
10.20.2 Nothing contained in Sections 10.16.1 - 10.16.5 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 or create Building Blocks and Applications.
10.20.3 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 patent, trade secret, copyright and
mask rights) pertaining to such Applications, Building Blocks or portions
thereof 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.
10.20.4 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
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limited to patent, trade secret, copyright and mask rights) pertaining to such
Applications or Building Blocks and shall have the right to file for or
otherwise secure and protect such rights. For all such Nortel Applications or
Building Blocks, Company may license any such additional Nortel Products upon
Nortel making such software generally available to its customers.
10.20.5 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.
Services Software
10.21.1 With respect to Services Software, Company shall: i) utilize
such Services Software and the results thereof solely for the purposes described
Section 1.24; and ii) comply with additional terms, if any, applicable to such
Services Software as specified in the applicable Product Annex. Nortel may, at
any time and without liability or obligation to Company, modify the Services
Software, any computer equipment of Nortel or suppliers used in connection with
such Services Software, and identification codes, manuals or other information
or Documentation used in connection with the Services Software.
10.21.2 SERVICES SOFTWARE IS PROVIDED AS IS AND WITHOUT WARRANTY OR
CONDITION OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, , 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 , LOST REVENUES OR PROFITS OR OTHER ECONOMIC
LOSS OF ANY NATURE WHATSOEVER ARISING OUT OF COMPANY'S USE OF SERVICES SOFTWARE.
ARTICLE 11. LIABILITY FOR BODILY INJURY, PROPERTY DAMAGE AND PATENT INFRINGEMENT
11.1 A party hereto (the "Indemnifying Party") shall defend, indemnify
and hold harmless the other party (the "Indemnified Party") against any suit,
claim, cause of action, demand or proceeding brought against the Indemnified
Party due to bodily injuries (including death) or loss or damage to tangible
property which results from the negligence, intentional acts or willful
misconduct or omissions of the Indemnifying 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. If the parties jointly cause
such losses, claims, demands, damages, or causes of action, the parties shall
share the liability in proportion to their respective degrees of causal
responsibility.
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11.2 Nortel shall defend and indemnify Company against any suit, claim
or proceeding brought against Company alleging that the sale to, or use by
Company of, any Products (or any component thereof), excluding Third Party
Hardware or Third Party Software, furnished hereunder infringes or violates any
patent, trademark, copyright or trade secret or other tangible or intangible
intellectual property rights of any kind or nature whatsoever ("Infringement
Claim"). Nortel shall defend, at its expense, Company against any such claims
and pay, subject to Section 11.3 below, 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.
11.3 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; provided that Nortel notifies
Company that the indemnification set forth in Section 11.2 will not be
applicable to such design or instruction and, notwithstanding such forfeiture of
indemnification, Company still decides to go forward with manufacture, design or
supply in accordance with such design or instruction (ii) is used by Company in
a manner or for a purpose not contemplated by this Agreement; (iii) is used by
Company in combination with other products not provided by Nortel, including, ,
any software developed solely by Company through the permitted use of Products
furnished hereunder, provided the Infringement Claim arises from such
combination or the use thereof; or (iv) is modified by Company where such
modification is not authorized 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, attorneys' fees,
which may be incurred by Nortel with respect to any suit, claim, or proceeding
described in this Section 11.3.
11.4 Nortel shall not be liable for, and Company shall indemnify Nortel
in respect of, any damages awarded based on Company's willful, knowing or
deliberate infringement of a patent, copyright, trade secret, trademark or other
proprietary right where such infringement results in a pecuniary damage award.
11.5 If as a result of an Infringement Claim, , an injunction is
obtained against Company's use of any Product or component thereof, Nortel
shall, at Nortel's option and sole expense:
(i) procure for Company the right to continue using the alleged
infringing Product(s);
(ii) replace or modify the same (without interruption of use during
Company's peak hours) with equivalent or better Product(s) so
that Company's use is non-infringing; provided, however, that
such replacement or modification shall not adversely impair the
system or the Products from performing within the Specifications;
or
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11.6 In the event that Nortel cannot perform under Section 11.5, Company
shall have the right to return such Products or components thereof to Nortel at
Nortel's cost, upon written notice to Nortel and in the event of such return,
neither party shall have any further liabilities or obligations under this
Agreement, except that Nortel shall refund the full price of any such Products
or portion thereof, if such event occurs during the Term and, commencing upon
the first day after expiration of the Term, Nortel shall refund the Price of the
Products, or portion thereof, less depreciation of twenty percent (20%) of the
Price, or applicable portion thereof, for each year of use thereof after
expiration of the Term by Company at the time of such return. To the extent any
infringing portion of the System or Products affects the operation of other
Products, Company's right to receive a refund shall apply to such other Products
as well.
11.7 The defense of any claim which is predominantly covered by the
provisions of the Agreement 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.
11.8 Company shall waive any and all claims that Company may have
against Nortel that Company may have due to any use by Company of Modifiable
Software and any modification Company may have made to a Product as a result of
such use. Further, Company shall be responsible for the purchase of any
additional hardware, software or services required as a result of such use.
11.9 THE REMEDIES SET FORTH IN THIS ARTICLE 11 ESTABLISH THE ENTIRE
OBLIGATION OF THE PARTIES IN REGARD TO INFRINGEMENT CLAIMS. IN NO EVENT SHALL
EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES, INCLUDING, LOST REVENUES OR PROFITS OR OTHER ECONOMIC
LOSS OF ANY NATURE WHATSOEVER, ARISING FROM SUCH INFRINGEMENT CLAIMS AND/OR
RELATED MATTERS, OTHER THAN AS SPECIFICALLY SET FORTH HEREIN.
ARTICLE 12. REMEDIES AND LIMITATION OF LIABILITY
12.1 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
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proceedings under any such law instituted against it which are not terminated
within sixty (60) days of such commencement.
12.2 Company shall have the right to suspend its performance, upon
written notice to Nortel, if, prior to delivery of any ordered Products during
the Term, Nortel 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.
12.3 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 avail itself of any and all remedies
available at law or equity, except as otherwise limited in this Agreement.
12.4 Nothing contained in Section 12.3 or elsewhere in this Agreement
shall make either party liable for any indirect, incidental, punitive, special,
or consequential damages of any nature whatsoever (including any claims arising
out of or in anyway related to the Programs or any lost profits of the other
party, whether or not such damages are foreseeable or whether a party has been
advised of the possibility of such damages) for any breach of this Agreement
(except for breaches of the provisions of Articles 10, 11 or 14) whether the
claims for such damages arise in tort (including negligence regardless of degree
of fault), contract, or otherwise.
12.5 Nortel shall not be liable for any additional costs, expenses,
losses or damages resulting from errors, acts or omissions of Company,
including, , 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.
12.6 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, and
Nortel may suspend performance of any of its obligations hereunder until all
such payments are made.
12.7 Company, without prejudice to any of Company's rights accrued prior
to the date of termination, may, at its option and upon written notice to
Nortel, signed by a person duly authorized by Company, terminate this Agreement
in whole or with respect to any System, Hardware or Software purchased by it,
without penalty to Company, if Nortel, during the Term,
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violates the provisions of Article 11 by failing or refusing to take the actions
required thereunder and either (A) has not remedied, or commenced actions to
remedy, such violation within thirty (30) days of written notice to do so, or
(B) such violation results in a judicial imposition of permanent injunctive
relief upon Company preventing Company from operating a System. In the event of
a termination as permitted under this Section 12.7, Company may, at its
election, upon written notice return to Nortel at Nortel's cost, any affected
Systems, Hardware or Software purchased by it from Nortel, and in the event of
such return, neither party shall have any further liabilities or obligations
under this Agreement, except that, if such an event occurs during the Term,
Nortel shall refund the full price of any such System, Hardware or Software, or
portion thereof.
ARTICLE 13. TERM AND TERMINATION
13.1 This Agreement will be in effect from the Effective Date for a
period of three (3) years ("Term"). Thereafter, this Agreement shall
automatically renew for one (l) 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.
13.2 Either party may delay performance under this Agreement or
terminate this Agreement, in whole or in part, in the event of a default by the
other, 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 capable 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 party a plan for timely
remedying the alleged default in order to avoid termination. A default shall
include:
(i) a party's insolvency or initiation of bankruptcy or receivership
proceedings by or against a party or the execution of an
assignment for the benefit of creditors; or
(ii) either party's material breach of any of the terms or conditions
hereof including the failure to make any payment when due.
13.3 The expiration or termination of this Agreement for any cause shall
not release either party from:
(i) any obligations and duties remaining under any Order 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, which thereafter may
accrue in respect to any event prior to expiration or
termination; or
(iii) any liability from any obligation specified in Section l5.l8
below to survive expiration or termination.
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13.4 In the event of a termination of this Agreement by Company due to
Nortel's material breach, Company shall be released from any unfulfilled Volume
Commitment or unmet Volume Targets from and after the date of such termination;
13.5 In the event of termination of this Agreement by Nortel due to
Company's material breach, Company shall pay Nortel any amounts due pursuant to
Section 2.5 of this Agreement as of the date of such termination.
ARTICLE 14. CONFIDENTIALITY
l4.1 Each party which receives the other party's Confidential
Information shall maintain, or cause to be maintained, the confidentiality of
Confidential Information of the other party and hold such Confidential
Information in confidence and not disclose, or permit to be disclosed, or use,
or permit to be used (except in accordance with this Agreement) such
Confidential Information to anyone other than to its employees and employees of
a Company Affiliate or Nortel Affiliate, as applicable, with a need to know such
Confidential Information in the performance of their work (including the use,
operation or maintenance of a System or Products), it being understood that such
employees of a Nortel Affiliate or Company Affiliate shall be informed of the
confidential nature of the Confidential Information and shall be directed to
treat such Confidential Information confidentially and not use such Confidential
Information other than for the purpose described above. 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 and shall take precautions necessary or
appropriate to guard the confidentiality of such Confidential Information.
14.2 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.
Notwithstanding anything to the contrary contained herein, Company shall have
the right to disclose Confidential Information to lenders, investors, and
potential lenders and investors, subject to appropriate nondisclosure
agreements.
14.3 Notwithstanding the foregoing, either party shall be free to use
that portion of the residuals of Confidential Information which may be retained
in intangible form by those employees who have had access to the Confidential
Information, for any purpose, including use in the development, manufacture,
marketing and maintenance of its products and services. The term "residuals"
shall mean that portion of information which is mentally retained by an employee
of the receiving party who has had access to such Confidential Information, as
part of his or her ordinary stock of skill and knowledge, without need to
further reference to any material which is written, stored in magnetic,
electronic, or physical form, or otherwise fixed, provided that in no event
shall the term "residuals" include information or expression protected by
copyright, patent, or the Semiconductor Chip Protection Act of 1984 (U.S.A.).
The commitment to memory by any employee of any specific Confidential
Information shall not be considered to constitute such information as
"residuals" hereunder, and no use of any such
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portion of Confidential Information shall be allowed hereunder. The marketing of
any product or service, including the dissemination of supporting documentation,
which inherently discloses the disclosing party's Confidential Information shall
not be deemed a breach by the recipient of such obligations provided however
that ownership of the Confidential Information and all intellectual property
rights to such Confidential Information remain with the disclosing party.
14.4 The obligations of either party pursuant to this Article 14 shall
not extend to any Confidential Information which (i) was already known to the
recipient prior to its disclosure to the recipient and without confidential
obligations was known or generally available to the public at the time of
disclosure to the recipient,(ii) becomes known or generally available to the
public (other than by act of the recipient) (iii) subsequent to its disclosure
to the recipient, 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
confidentiality obligations(iv), is independently developed by recipient without
any direct or indirect use of Confidential Information,, or (v) is required to
be disclosed by subpoena or other process of law. The recipient shall have the
burden of proving by a preponderance of the evidence the applicability of any of
the foregoing exceptions.
14.5 In the event that any party hereto (the "Receiving Party") becomes
obligated to disclose Confidential Information obtained by the Receiving Party
from the other party (the "Disclosing Party") pursuant to an order, rule or
regulation of any governmental or other authority or court, the Receiving Party
shall promptly notify the Disclosing Party, so that the Disclosing Party may
have an opportunity to seek a protective order or other appropriate remedy that
will permit the Receiving Party to avoid such disclosure. In the event that such
protective order or other remedy is not obtained, the Receiving Party will
disclose only that portion of the Confidential Information as it is obligated to
disclose pursuant to such order, and will use all reasonable efforts to obtain
assurances that confidential treatment will be accorded to any Confidential
Information so disclosed.
ARTICLE 15. COOPERATIVE ADVERTISING
15.1 Subject to the provision of Section 2.5 of the Agreement, in
consideration of Company's Volume Commitment, Nortel shall, commencing with the
Effective Date of the Agreement and for the remainder of the Term, provide
Company an amount equal to two and one half percent (2.5%) of the net amount of
Company's purchases under the Agreement, to be used for payment of Company
advertising which contains specific reference to Nortel's Products or for
"Programs" as set forth in Exhibit C of this Agreement, which advertising and/or
Programs have been approved by Nortel (which approval shall not be unreasonably
withheld or delayed) for the purposes of payment of such cooperative advertising
fees ("Cooperative Advertising Funds"); provided, however, that such amount
shall (i) be paid to Company on a quarterly basis and (ii) shall be
substantiated by invoices reasonably detailing advertising or other Program
costs paid by Buyer. As used in this Article 15, "purchases" shall be defined as
payment in full of Orders by Company pursuant to Article 4.
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15.2 Nortel shall provide an additional one-half percent (.5%) of the
net amount of Company's purchases under the Agreement which exceeds the Volume
Commitment, to be used as set forth in Section 15.1 above.
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15.3 Should Company fail to meet the Volume Targets for any applicable
year as set forth in Section 2.5 of this Agreement, Nortel shall invoice Company
for the Cooperative Advertising Funds paid to Company as described in Section
15.1 in excess of the amount of Cooperative Advertising Funds which would have
been paid if calculated based upon the percentages set forth in Section 2.5 of
this Agreement applicable to the actual purchases by Company.
15.4 Nortel shall provide to Company at the end of each quarter a
written summary describing the prior quarter's purchasing activity by Company.
Such summary shall reflect Cooperative Advertising Funds accrued and used by
Company for eligible Programs as approved by Nortel.
ARTICLE 16. CONTINUING AVAILABILITY
16.1 For the period following the Effective Date of this Agreement as
specified in the applicable Product Annex and excluding Third Party Hardware and
Third Party Software, Nortel shall make replacement parts, or their functional
equivalent, available for purchase by Company. Nortel shall also make available
to Company such information as is reasonably required in order to allow
functionally equivalent spare parts to perform with Products previously
delivered to Company. The prices charged for the spare parts shall be Nortel's
then current published list price or its then current policy.
16.2 In the event Nortel intends to discontinue the availability of, or
support Service for, a major module of a Product, Nortel shall provide Company
with at least ninety (90) days prior written notice of such event and the
applicable Product or support Service shall be considered manufacture
discontinued or discontinued, respectively, after such ninety (90) day period.
Nortel shall have no obligation to provide notice of manufacture discontinue if
only components and individual circuit packs of a Product are being discontinued
or replaced.
16.3 With respect to any major module of a Product as to which Nortel
has notified Company of cessation of manufacture or purchase pursuant to Section
16.2 above, Nortel shall, upon Company's written request, deliver to Company
such drawings, specifications, and information which are available to Nortel and
as may be necessary to manufacture or cause to be manufactured or procured such
major module of a Product together with a nonexclusive, royalty-free license to
make, use or have made for Company's intended use, any such major module of a
Product to the extent Nortel is legally able to grant such a license; provided,
however that such license and parts may be used only in conjunction with the use
of a System and Software, or any item of Hardware, and shall apply to the
production of the discontinued major module of a Product only (i.e., no license,
express or implied, is granted to produce derivative technology). Company shall
have the right to duplicate any such drawings, specifications or information,
subject to any confidentiality requirements, and shall return the originals
furnished by Nortel within sixty (60) days thereafter.
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ARTICLE 17. INSTALLATION GUIDELINES
17.1 Nortel shall Install all Hardware and Software at the sites to be
selected by Company in accordance with the time schedule set forth in the
applicable Order.
17.2 Nortel shall Install the System so as to cause no unreasonable
interference with or obstruction to lands and thoroughfares or rights of way on
or near which the Installation or other Services may be performed. Nortel shall
exercise every reasonable safeguard to avoid damage to existing facilities, and
if repairs or new construction are required in order to replace facilities
damaged by Nortel, such repairs or new construction shall be at Nortel's own
expense. Nortel agrees to notify Company of any material interference that might
occur with other communications Hardware, existing at the time of Installation,
as a result of Nortel's Installation of the System.
17.3 Nortel shall use all reasonable efforts to perform Installation,
activation of Software and any other Services ordered hereunder, with regard to
a System, so as to cause no unreasonable interference with System performance,
service to subscribers, billing, networking, administration or maintenance.
Nortel shall (i) advise Company whenever such Installation, activation of
Software or other Services will or are likely to cause such interference to a
System, and (ii) use its best efforts to work with Company to prevent or
minimize such interference.
17.4 Nortel shall provide Company with reasonable prior written notice
of its need to have access to any portion of the System, which notice shall
specify the requirements for access and the scope of the work to be performed at
such site or location. Company agrees that it will promptly review such notice
and shall not unreasonably withhold its consent to such access; provided,
however, that once a portion of a System is placed In-Service, such notice must
be given at least twenty-four (24) hours prior to the need for access to
portions of the System which have been placed In-Service.
ARTICLE 18. INSURANCE
18.1 Nortel shall maintain and keep in force all risk property insurance
in form and substance in accordance with acceptable industry standards covering
all Hardware delivered to Company the risk of loss to which has not passed to
Company, and shall furnish Company as reasonably requested, with proof in the
form of Certificates of Insurance that such insurance has been obtained and is
in force.
18.2 Upon risk of loss passing to Company, Company shall maintain and
keep in force all risk property insurance, in form and substance and with
insurers reasonably satisfactory to Nortel, covering all Hardware delivered to
Company the title to which has not passed to Company, and shall furnish Nortel
as reasonably requested, with proof in the form of certificates of insurance
that such insurance has been obtained and is in force.
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18.3 Nortel shall at all times while performing services on Company's
premises carry insurance with limits not less than the limits described as
follows:
Employer's General Liability - Limits $1,000,000 per occurrence.
Comprehensive General and Product Liability: $2,000,000 single limit
bodily injury and property damage combined per occurrence with a $5,000,000
annual aggregate; such coverage shall include broad form liability, completed
operations coverage and contractual liability.
An umbrella policy with $1,000,000 single limit bodily injury and
property damage combined.
Workers' Compensation (Statutory limits in the applicable state).
18.4 Each party shall, upon request of the other party, provide the
other with certificates of insurance (i) evidencing the insurance to be carried
under this Article 18, naming the other party as an additional insured with
respect to Comprehensive General and Product Liability insurance and as a loss
payee as their interests may appear with respect to all risk property insurance
and (ii) including provisions that such insurance policy(ies) shall not be
subject to cancellation, expiration or reduction without thirty (30) days prior
written notice to the other party.
18.5 Notwithstanding the requirements as to insurance to be carried, the
insolvency, bankruptcy or failure of any insurance company carrying insurance
for either party, or failure of any such insurance company to pay claims
accruing, shall not be held to waive any of the provisions of this Agreement or
relieve either party from any obligations under this Agreement.
ARTICLE 19. DISPUTE RESOLUTION
19.1 If there is a disagreement relating to Installation and Acceptance
of Hardware and Software, or which, under the terms of this Agreement shall be
resolved in accordance with this Section 19.1, the parties will attempt to
negotiate a solution within fourteen (14) days after receiving notice of such
disagreement. If no solution can be reached, the parties shall select a third
party engineer ("Third Party Engineer") (whose fees and expenses will be shared
equally by Company and Nortel), expert in the field in which the dispute has
arisen, who will, after conducting such examination or testing as he/she deems
necessary and within fourteen (14) days, render a decision in the matter. If the
parties are unable to agree on the selection of the Third Party Engineer, the
Third Party Engineer will be selected by the then President of the United States
Institute of Electrical & Electronics Engineers. The Third Party Engineer's
decision shall be final and binding and neither party shall appeal or otherwise
contest it; provided, however, that the Third Party Engineer shall have no
authority to determine disagreements relating to ownership of Software. Once a
Third Party Engineer is selected for resolving a dispute, he/she shall be
selected for the resolution of any further disputes hereunder relating to
Installation and Acceptance, or which, under the terms of this Agreement shall
be resolved in accordance with
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this Section 19.1, unless otherwise agreed to by both parties or unless the
Third Party Engineer refuses to continue to serve in that function.
19.2 Any controversy or claim arising out of or relating to this
Agreement for the breach hereof which cannot be settled by the parties except
for (i) disputes to be settled by a Third Party Engineer under Section 19.1,
which shall be resolved as provided therein, or (ii) disputes relating to any
patent or other claims involving the scope or validity of property rights as set
forth in Article 11, which shall be resolved by a court of competent
jurisdiction, shall be settled by arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association as set forth herein.
19.3 Each party may select one arbitrator. Selection shall be completed
within ten (10) days of the receipt of a demand for arbitration. If either party
fails to select an arbitrator within such ten (10) day period, the one selected
shall act as sole arbitrator. If two arbitrators have been selected, the two
arbitrators selected shall select a third within fifteen (15) days after their
selection. If they fail to do so, the third arbitrator shall be selected by the
American Arbitration Association. The arbitrators shall set a date of hearing no
later than sixty (60) days from the date all arbitrators have been selected.
19.3.1 All proceedings shall be conducted in the English language.
19.3.2 The arbitration shall take place at a location to be agreed upon
by the parties. If the parties are unable to agree, the arbitrators shall select
a location in New York, New York for the arbitration.
19.3.3 In any such arbitration proceeding the arbitrators shall adopt
and apply the provisions of the Federal Rules of Civil Procedure relating to
discovery so that each party shall allow and may obtain discovery of any matter
not privileged which is relevant to the subject matter involved in the
arbitration to the same extent as if such arbitration were a civil action
pending in a United States District Court; provided, however, that each party
shall be entitled to no more than four (4) depositions upon oral examination of
no more than one (1) day in length each.
19.3.4 The award of any arbitration shall be final, conclusive and
binding on the parties hereto.
19.3.5 The arbitrators may award any legal or equitable remedy, except
that the arbitrators shall have not authority to determine or resolve any
controversy or claim relating to ownership of Software and shall have no
authority to award punitive damages or consequential damages. The arbitration
award may include an award of attorney's fees, in the amount of such fees, to
the prevailing party, if such an award is deemed by the arbitrators to be
reasonable and appropriate. Judgment upon any arbitration award may be entered
and enforced in any court of competent jurisdiction.
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19.3.6 Either party to an arbitration hereunder may bring an action for
injunctive relief against the other party if such action is necessary to
preserve jurisdiction of the arbitrators or to maintain status quo pending the
arbitrators decision. Any such action commenced pursuant to this Section 19.3.6
shall be discontinued upon assumption of jurisdiction by the arbitrators and
their opportunity to consider the request for equitable relief pending final
decision in the arbitration.
ARTICLE 20. AUTHORITY AND COMPLIANCE WITH LAWS
20.1 Company represents and warrants that (a) all necessary approvals
and authority to enter into this Agreement and bind Company have been obtained,
(b) the person executing this Agreement on behalf of Company has express
authority to do so and, in so doing, to bind Company hereto, and (c) the
execution of this Agreement by Company does not violate any provision of any
by-law, charter, regulation or any other governing document of Company.
20.2 Nortel represents and warrants that (a) all necessary approvals and
authority to enter into this Agreement and bind it have been obtained, (b) the
persons executing this Agreement on behalf of it have express authority to do so
and, in so doing, to bind it hereto, (c) the execution of this Agreement by it
and the consummation of the transactions contemplated hereby do not violate any
provisions of any by-law, charter, regulation, or any of its other governing
documents, (d) it has all necessary licenses, agreements, personal property
rights and other authorizations necessary to enter into this Agreement and
consummate the transactions contemplated hereby and to sell and Install a System
and Hardware and license Software to Company hereunder and (e) that each item of
Hardware shall, upon delivery to Company and upon Acceptance, be free and clear
of all liens, charges or encumbrances of any nature whatsoever (other than the
purchase money security interest described in Section 5.5), and upon passage of
title to Company shall provide good and marketable title to Company or its
permitted assignees.
ARTICLE 21. COMPATIBILITY AND INTERCONNECT
21.1 Compatibility Information is the technical information, including
Software interfaces (but excluding source code and internal system interfaces),
required to permit the design of hardware and/or software that is functionally
interconnectable with the Hardware and Software supplied by Nortel hereunder.
Nortel shall reasonably cooperate with such third parties as Company may
request, subject to any appropriate confidentiality or other agreements, in
order to facilitate inter-connection.
21.2 During the Term of this Agreement and for a period of two (2) years
after expiration of the Term, Nortel shall provide to Company that Compatibility
Information, if currently available and subject to such confidentiality and
other restrictions as Nortel may deem appropriate, which gives Company the
necessary technical information and inter-connection information to interface
with a System as specified in Section 21.1 above. Company shall have the right
to disclose such inter-connect information under appropriate non-disclosure
agreements as approved by Nortel, which approval will not be unreasonably
withheld or delayed, to third
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parties whose hardware and/or software will be inter-connected with the System,
Hardware or Software or who will be developing interfaces in order to accomplish
inter-connectability as specified in Section 21.1 above. Nortel agrees, at the
request of Company, to reasonably cooperate with Company or any third parties in
order to permit such inter-connection. Nortel agrees to provide Company, as
promptly as reasonably practicable, advance notice of any new, or changes in
existing interface specifications and upon completion of such new, or changed,
specification to provide this to Company, subject to the provisions hereof.
ARTICLE 22. ADDITIONAL TERMS
22.1 Publicity - Except where required by law, a party shall not release
any advertising or other publicity relating to this Agreement or the contents
hereof wherein such other party may reasonably be identified without the prior
written approval of the other party. In addition, each party shall take
reasonable precautions to keep the existence of this Agreement confidential so
long as this Agreement remains in effect and for a period of five (5) years
thereafter, except as may be otherwise expressly provided in this Agreement or
as may be reasonably required to enforce this Agreement by law.
22.2 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, except for its rules with regard to the conflict of laws.
22.3 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.
22.4.1 Assignment - Other than as explicitly stated below, 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. A change in control of Company shall be deemed an assignment
hereunder. 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 Nortel's rights 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. Nortel's consent shall not be required for
any assignment by Company to any Company Affiliate in which Company owns and
controls more than fifty percent (50%) of the shares entitled to elect the board
of directors of such entity. Company agrees to provide written notice to Nortel
of such assignment.
22.4.2 Company hereby consents 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.
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22.5 Subcontracting - Nortel may subcontract any of its obligations
under this Agreement, but no such subcontract shall relieve Nortel of primary
responsibility for performance of its obligations.
22.6 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.
22.7 Relationship of the Parties - The provisions of this Agreement
shall not be construed to establish any form of partnership, agency or 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.
22.8 Force Majeure - If the performance by a party of any of its
obligations under this Agreement shall be prevented, restricted or interfered
with by reason of any circumstances beyond the reasonable control of that party,
including, fire, explosion, acts of God, war, revolution, civil commotion,
unavailability of supplies or sources of energy, power failure, breakdown of
machinery, delays regarding zoning, easements or deed restrictions, or labor
difficulties, including, strikes, slowdowns, picketing or boycotts, then that
party shall upon giving prompt notice to the other party 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 provided that the party so affected shall
use all reasonable efforts to avoid or remove such causes of nonperformance and
both parties shall proceed to perform their obligations with dispatch whenever
such causes are removed or cease. 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; provided, however, that in the event
Nortel experiences labor difficulties, strikes, slowdowns, picketing or boycotts
with respect to a particular Nortel facility, Nortel shall use commercially
reasonable efforts to have the Products affected by such labor difficulties,
strikes, slowdowns, picketing or boycotts obtained from another Nortel facility
in the United States or Canada.
22.9 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, penalties and interest, except
for taxes computed upon the net income of Nortel. If Company provides Nortel
with a certificate of exemption for the applicable taxes, in a timely manner,
then Nortel shall not invoice Company for such taxes.
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22.10.1 Hazardous Materials - Prior to issuing any Order for Services to
be performed at Company's facilities, Company shall identify and notify Nortel
in writing of the existence of all Hazardous Materials of which it is aware
which Nortel may encounter during the performance of such Services, including,
any Hazardous Materials contained within any equipment to be removed by Nortel.
22.10.2 If Company breaches its obligations pursuant to the immediately
preceding paragraph, (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 , attorney's fees,
which arise out of Company's breach of such obligations.
22.11 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
certified or next-day mail or overnight courier addressed as follows:
If to Company:
Western Wireless Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
cc: Legal Department
If to Nortel:
Nortel Networks Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Contracts Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Either party hereto may change its address by a notice given to the other party
hereto in the manner set forth above.
22.12 Information and Documentation - Company shall provide any
information and/or documentation that Nortel reasonably requests from Company
and that is necessary for Nortel to properly perform any of its obligations
hereunder. Such information shall be provided in a form reasonably specified by
Nortel by the dates specified by Nortel.
22.13 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 will be exported or
transmitted to any country or to foreign nationals of any country, except in
accordance with applicable U.S. laws and regulations concerning exporting and
with written consent of Nortel. Company shall obtain all government
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authorizations, in accordance with applicable law prior to exporting or
transmitting any such Products or technical data.
22.14 Severability - If any provision of this Agreement is declared or
determined to be invalid or unenforceable under applicable law, the remaining
provisions shall continue in full force and effect and the parties shall
substitute for the invalid provision a valid provision which most closely
approximates the economic effect and intent of the invalid provision.
22.15 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.
22.16 Regulatory Compliance - In the event of any change in the
Specifications or Nortel's manufacturing or delivery processes for any Products
as a result of the imposition of requirements by any government, Nortel may upon
notice to Company, increase its prices, charges and fees to cover the added
costs and expenses directly and indirectly incurred by Nortel as a result of
such change.
22.17 Entire Agreement - This Agreement, including the Exhibits 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.
No Exhibits or Annexes modified or created subsequent to the execution of this
Agreement shall be deemed to be incorporated into this Agreement unless mutually
agreed in a writing and executed by a duly authorized representative of each
party. Company hereby acknowledges and agrees that it has not relied on any
representations or warranties other than those expressly set forth in this
Agreement.
22.18 Survivorship - Any terms of this Agreement, which by their nature
are intended to survive including but not limited to Articles 8, 10, 11, 12, 14
and Sections 4.5, 4.6, 9.3, and 13.3 shall survive the termination or expiration
of this Agreement.
22.19 Counterparts - This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement.
NORTEL NETWORKS INC. WESTERN WIRELESS
CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------- -------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ ------------------------------
(Type/Print) (Type/Print)
Title: Vice President Title: President
---------------------------- ----------------------------
Date: 3-10-00 Date: 3-10-00
------------------------------ ------------------------------
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