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EXHIBIT 10.5
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
PURCHASE AND LICENSE AGREEMENT
BETWEEN
NET 2000 COMMUNICATIONS CAPITAL EQUIPMENT, INC.
AND
NORTEL NETWORKS INC.
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PURCHASE AND LICENSE AGREEMENT
This Purchase and License Agreement No. 031201mab ("Purchase and License
Agreement") is between Nortel Networks Inc. ("Nortel Networks") and Net2000
Communications Capital Equipment, Inc., ("Net2000" or "Customer") effective as
of the last date signed (each a "Party" and collectively the "Parties").
Additional terms related to Customer's purchase or license of Products or
Services may be added by written agreements ("Supplements") referring to the
Purchase and License Agreement, collectively referred to as the "Agreement." The
Services Supplement is attached hereto and incorporated by reference.
1. DEFINITIONS
"Acceptance" shall be the meaning ascribed to it in Section 12.
"Affiliate" of a Party means a company or other entity that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control of, or with, such Party or any partnership, corporation
or other entity in which a Party owns more than fifty percent (50%) equity
interest.
"Documentation" means the documentation that Nortel Networks customarily
provides to customers, which may include user, technical and operating manuals,
installation guides, and operating instructions.
"Financing Agreement" shall mean the Third Amended and Restated Credit Agreement
by and among Net2000 Communications Group, Inc., as Borrower, and the lenders
named therein, dated as of March 2001, and related Loan Documents as defined
therein and shall be deemed to be the specified written agreement of financing
set forth in Section 2.1.
"Furnish-only" means Products that Customer installs.
"Hardware" means a Nortel Networks machine or components to include any
equipment which Nortel Networks adds to its generally available Hardware price
lists or so identifies to Customer in a quotation.
"Installation Site" shall mean the location or facility identified in an Order
at which the applicable Products will be installed and is under the control of
Net2000.
"Order" shall be as defined in Section 2.1.
"Products" are any Hardware, Software or Third Party Vendor Items, and
Documentation provided under this Agreement.
"Scheduled Ship Date" shall mean the date as mutually agreed to by the parties,
on which a Product ordered by Customer is scheduled to be shipped from Nortel
Networks' facility or, in the case of Software which is downloaded, the date
upon which such Software is scheduled to be downloaded.
"Services" means the activities to be undertaken by Nortel Networks pursuant to
an Order, including, but not limited to, engineering, maintenance and
installation, implementation, design, consulting, business planning, network
planning and analysis.
"Actual Ship Date" shall mean the date on which a Product ordered by Customer is
shipped from Nortel Networks' facility or, in the case of Software which is
downloaded, the date upon which such Software is downloaded to the System.
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"Software" is owned or licensed, and is provided by Nortel Networks, its parent
or one of its subsidiaries or affiliates, and is copyrighted and licensed, not
sold. Software consists of machine-readable instructions, its components, data,
audio-visual content (such as images, text, recordings or pictures) and related
licensed materials including all whole or partial copies, and including Software
and firmware that is embedded in Hardware.
"Specifications" mean the functional, performance, design, operational, and
physical characteristics of a Product as described in the Northern Telecom
Practices ("NTP") for the Product at the time Nortel Networks accepts the Order
for such Product. The Specifications shall include the dependencies and
interactions required to provide the Products' functionality. Where there is no
Specification for embedded Software or firmware, the Specification for the
corresponding Hardware shall apply.
"Statement of Work" is a document, prepared by Nortel Networks, describing the
scope of work, estimated schedule, prices, deliverables (all engineering,
designs, documentation, analysis, and other work product prepared by Nortel
Networks and all Software delivered to Net2000 pursuant to an Order, but
specifically excluding any diagnostics, documentation, or test equipment used by
Nortel Networks in the performance of Services), and other relevant terms
specific to a Service, which may, from time to time, be mutually agreed to in
writing by Customer and Nortel Networks. A Statement of Work shall be governed
by the terms and conditions of, and constitute a part of, this Agreement.
"System" shall mean Hardware and Software, inclusive of a central processor
unit, included in a configuration which is initially engineered by Nortel
Networks, provides a specified functionality and is installed at a specific
Installation Site.
"Third Party Vendor Item" includes "Third Party Hardware" and "Third Party
Software" and means any non-Nortel Networks hardware and/or software supplied to
Customer under this Agreement and not embedded in Nortel Networks Hardware or
Software. Nortel Networks will use reasonable efforts to identify Third Party
Vendors Items as such in its price quote, however, notwithstanding such, the
failure to do so as a result of an oversight shall not disqualify a Third Party
Vendor Item from being deemed a Third Party Vendor Item.
"Turnover" shall mean, with respect to a Product or System installed by Nortel,
that a) Nortel Networks has completed its standard manufacturing test
procedures, b) the Hardware materially conforms to the Specification, as
applicable, c) that the System is ready for acceptance testing by Net2000, and
d) that the System is ready for service to the extent that Net2000 has timely
completed its responsibilities or as otherwise mutually agreed.
"Turnover Date" shall mean, with respect to any Product installed by Nortel
Networks hereunder, the date on which Nortel Networks provides a written notice
of Turnover to Net2000.
2. ORDERS
2.1 Customer may acquire Products or Services by issuing a written purchase
order signed by an authorized representative or, if Customer is
enrolled in Nortel Networks' Order Online Program, by submitting
electronic orders (collectively, "Orders"). All Orders shall reference
this Agreement and specify the quantity, price, Nortel Networks
quotation number, shipping and billing instructions, requested delivery
dates, requested commencement date for Services and any other special
instructions. All Orders will be governed by and cannot alter the terms
and conditions of this Agreement. Nortel Networks' shipment of Products
or completion of Services will be Nortel Networks' exclusive acceptance
of Customer's Order. Each Order shall contain a representation by
Customer that no material default or event of material default has
occurred under any documents evidencing or securing financing to
purchase any Products
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or Services (the "Loan Documents") which has not been (a) cured by
Net2000 or a direct or indirect parent of Net2000 (if capable of being
cured) within the cure period (if any) set forth in the Loan Documents
or (b) waived in writing by the required lenders under the Loan
Documents.
2.2 Net2000 shall be liable for all engineering charges incurred at the
direction of Net2000, at Nortel Networks' then standard charges, unless
Nortel Networks declines to fulfill the Order for any reason. If an
order is delayed or suspended, but later shipped, Net2000 shall be
liable for such engineering charges.
2.2.1 If Customer cancels a Service after commencement of Service, Customer
shall pay Nortel Networks for those services actually performed through
the date of cancellation; provided that, such amount does not exceed
the total price of the cancelled Service.
2.2.2 Subject to any remedy specified or otherwise available to Nortel
Networks relating to any commitment by Customer for the taking delivery
of Products and Services, the foregoing shall be Nortel Networks' sole
remedy for delay, cancellation or suspension of the delivery of a
Product or Service by Customer. Except as stated herein, Orders for
Products that have been shipped may not be canceled. Furthermore,
Orders for Products that Nortel Networks customizes in accordance with
a specific Net2000 request may not be canceled.
2.3 Nortel Networks will promptly notify Net2000 (i.e., within three
business days or as soon as practical thereafter) after it has
determined that it will not ship Products or deliver Services under an
Order.
3. DOCUMENTATION.
3.1 Nortel Networks shall furnish to Customer four sets of Documentation in
the manner and quantity Nortel Networks customarily provides to
customers.
3.2 All such Documentation marked as Confidential Information shall be
treated as Confidential Information in accordance with the terms of
this Agreement. Updates to Documentation shall be provided at no charge
during the warranty period and any periods of paid maintenance support.
3.3 Net2000 may print paper copies from Nortel Networks Documentation
provided in compact disc or other digital form for its internal
business use. Net2000 hereby agrees not to digitally reproduce such
Documentation, except as expressly provided as follows in the following
sentence. Net2000 is permitted to post such Documentation on a host
server for its secured internal business use by Net2000 employees who
have a need to know and access such Documentation via the internal
network; such access by virtue of displaying the information on
employees client monitors is understood and agreed to be a permitted
copying under the terms of this Agreement.
4. EQUIPMENT CONTINUING AVAILABILITY
4.1 Nortel Networks shall make available to Customer sufficient repair and
spare parts and technical support for each Product, excluding Third
Party Vendor Items, furnished under this Agreement to keep such Product
operative for the period specified in a Supplement hereto. Prices shall
be based on Nortel Networks' then current prices.
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Notwithstanding the foregoing, the obligation with respect to Shasta
Product shall be for Nortel Networks to make replacement parts, or
their functional equivalent, at Nortel Networks' sole discretion,
available for purchase by Net2000. Nortel Networks, at its option and
expense, may replace Products for which repair parts are no longer
available with functionally equivalent Products.
4.2 Nortel Networks shall provide Customer with written notice of the
manufacturing discontinuance for any particular Product or related
functionality, by at least the number of months in advance as specified
in a Supplement No. 1, Schedule 1.D attached hereto, and, subject to
subsection [4.1] above, shall furnish the repair parts to Customer at
the Nortel Networks' then current repair parts price unless furnished
during the Warranty Period in which case it shall be at no charge.
However, such notice shall not be required for component and individual
circuit pack discontinuance or if only components of a Product are
being replaced and such replacement does not affect price, form, fit or
function of the Product.
4.3 In the event certain changes to Products purchased hereunder or
previously purchased by Customer become necessary for safety reasons,
Nortel Networks shall provide immediate written notice to Customer and
shall proceed promptly to make the necessary changes at Nortel
Networks' expense, except as noted in the following sentence. Nortel
Networks shall not charge Net2000 hardware costs and labor charges
where Nortel Networks has determined for its customers that
retrofitting or replacement is hazardous to complete, as relating to
such retrofit or replacement and all peripheral equipment and software.
5. ELECTRONIC COMMERCE PROGRAMS
By enrolling in any Nortel Networks' electronic commerce program,
Customer agrees to comply with the terms of such program. Customer
agrees that all electronic Orders issued are equivalent to a written
Order, are governed by the terms and conditions of this Agreement and
that in the event of any conflict between this Agreement and the
information contained in Customer's or Nortel Networks' electronic
commerce website, this Agreement governs. Customer is responsible for
the use and protection of all electronic commerce passcodes provided by
Nortel Networks and agrees that all Orders submitted using such
passcodes are valid and binding Orders authorized by Customer.
6. LICENSED USE OF SOFTWARE AND DOCUMENTATION
Nortel Networks grants Customer a nonexclusive, perpetual license and
right to use a copy of the Software to the extent of the activation or
authorized usage level. To the extent Software is furnished for use
with designated Products or Customer furnished equipment ("CFE"),
Customer is granted a nonexclusive, perpetual license and right to use
Software only on such Products or CFE, as applicable. Software contains
trade secrets and Customer agrees to treat Software as Confidential
Information; however, the parties acknowledge that certain Software
must be deployed with the Hardware. Customer will ensure that anyone
who uses the Software does so only in compliance with the terms of the
license provisions in this Agreement. Customer shall not (a) use, copy,
modify, transfer or distribute the Software except as expressly
authorized in the Documentation; (b) reverse assemble, reverse compile,
reverse engineer or otherwise translate the Software; (c) create
derivative works or modifications unless expressly authorized; or (d)
sublicense, rent, sublicense, or lease the Software provided however,
Customer shall have the right to sublicense the Software in the event
of an assignment as set forth under this Agreement. Licensors of
intellectual property to Nortel Networks are beneficiaries of this
provision. Nortel Networks shall provide to Net2000 written notice and
reasonable opportunity to cure. In the event that a breach of the
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license is not cured after written notice and a reasonable opportunity
to cure following such notice, or in the case of willful breach of the
license or in the event that a designated Product or CFE is no longer
in use and no further use is planned, Customer will promptly return the
Software to Nortel Networks or certify its destruction. Nortel Networks
may audit by remote polling or other reasonable means to determine
Customer's Software activation or usage levels. All Customer data
acquired by polling shall be deemed to be Confidential Information of
Customer. Third Party Software, furnished by Nortel Networks shall be
licensed subject to the terms of the third party license for such
software.
7. CHARGES AND PAYMENT
7.1 Amounts are due upon receipt of invoice and shall be paid by Customer
within ten (10) days for any invoices which Nortel Networks is
financing under the Financing Agreement as may be amended, and thirty
(30) days for any other invoices; provided the Products have been
shipped by Nortel Networks and/or that the other respective invoice
milestone(s) as applicable as specified in a Supplement, if any, have
been reached. In the event that Nortel Networks is no longer a Lender
(as defined in the Financing Agreement), payment shall be due thirty
(30) days from receipt of invoice. Customer shall pay interest on any
late payments at the rate of ***% per annum (***% per month) until such
time as the outstanding invoice is paid, except for any amounts that
are subject to a good-faith dispute which Net2000 has provided Nortel
Networks in writing of the reasons for such dispute prior to the date
upon such invoice would be due. Net2000's failure to notify Nortel
Networks within such period shall not be construed as a waiver of the
right to dispute an invoice.
7.2 Nortel Networks will inform Customer in advance and in writing whenever
additional charges apply. Additional charges shall apply for shipping
and special handling, if any are applicable, as passed through by
Nortel Networks. Charges for Software may be based on extent of use
authorized as specified in a Supplement or invoice. Customer shall pay
the charges applicable for any activation or usage beyond the
authorized level. If any authority imposes a tax, duty, levy or fee,
excluding those based on Nortel Networks' net income, upon a Product or
Service supplied by Nortel Networks under this Agreement, Customer
agrees to pay that amount as specified in the invoice, or supply
exemption documentation. Customer is responsible for personal property
taxes for each Product from the date of shipment by Nortel Networks.
7.3 Subject to the terms and conditions of the Financing Agreement Net2000
consents without qualification to the sale of receivables, in whole or
in part, including all or any part of any associated rights, remedies,
and obligations, by Nortel Networks without further notice and
authorizes the disclosure of this Purchase and License Agreement and
Supplements as necessary to facilitate such sale.
8. WARRANTY
8.1 Nortel Networks warrants that Hardware (i) is free from defects in
materials and workmanship and (ii) materially conforms to its
Specifications. If Hardware does not function as warranted during the
warranty period, Nortel Networks will either (y) make it do so, or (z)
replace it with equivalent Hardware.
8.2 Nortel Networks warrants that when Software is used in the specified
operating environment it will materially conform to its Specifications.
If Software does not function as warranted during the warranty period,
Nortel Networks will provide a suitable fix or workaround or will
replace the Software; provided Software is within two software release
levels of the then-current software.
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8.3 Services will be performed in a professional and workmanlike manner. If
Services are not performed as warranted and Nortel Networks is notified
in writing by Customer within thirty (30) days, Nortel Networks will
reperform the non-conforming Services. Any warranty period for the
Services shall be as specified in a Supplement hereto or as specified
in a Statement of Work. The warranty period for Installation Services
shall be the same as the warranty for the installed Product. 8.4 The
warranty period for Hardware and Software shall be fourteen (14) months
after Actual Ship Date or as otherwise set forth in a Supplement to
this Purchase and License Agreement. In the event that (i) Nortel
Networks is unable to repair or replace the Hardware or Software within
the period specified in a Supplement to this Purchase and License
Agreement and Net2000 requests a refund, or (ii) Nortel Networks
determines that repair or replacement as set forth in this Section 6 is
commercially impracticable, then Nortel Networks will refund to
Customer the price paid for the Product, less applicable depreciation,
however, if such Product is returned within the first twelve (12)
months after the Actual Ship Date then Nortel Networks will refund to
Net2000 one hundred percent (100%) of the price paid for the Product
plus the shipping that was charged by Nortel Networks.
8.5 No warranty is provided for (i) supply items normally consumed during
Product operation, e.g., fuses, lamps, etc.; (ii) failures caused by
non-Nortel Networks products (iii) failures caused by a Product's
inability to operate in conjunction with other Customer hardware or
software where the Nortel Networks' Products did not contribute to the
failure; or (iv) performance failures to the extent caused by services
not performed by Nortel Networks or Customer's failure to purchase all
necessary Products under this Agreement. Nortel Networks' warranty
obligations shall not apply in cases of misuse, accident, damage or
unauthorized modification, failure to maintain proper physical or
operating environment or improper Customer maintenance not provided by
Nortel Networks. Software is not warranted to operate uninterrupted or
error free.
8.6 THE WARRANTIES AND LIMITATIONS SET FORTH IN THIS AGREEMENT, INCLUDING
ANY ATTACHMENTS,, ARE CUSTOMER'S EXCLUSIVE WARRANTIES AND SOLE
REMEDIES. EXCEPT AS SET FORTH IN ANY SPECIFICATIONS FOR PRODUCTS OR
SERVICES, THE WARRANTIES SET FORTH IN THIS AGREEMENT, INCLUDING ANY
ATTACHMENTS, ARE THE ONLY WARRANTIES PROVIDED BY NORTEL NETWORKS AND
REPLACE ALL OTHER WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES WARRANTY OR
CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
SUBJECT TO SECTION 18.2, IF SUPPLIER FAILS TO PROVIDE THE WARRANTIES
SET IN THIS AGREEMENT, INCLUDING ANY ATTACHMENTS, THIS SECTION 8.6
SHALL NOT BE CONSTRUED AS LIMITING ANY RIGHT OR REMEDY WHICH CUSTOMER
MAY OTHERWISE HAVE UNDER THIS AGREEMENT, AT LAW OR IN EQUITY.
8.7 With respect to Third Party Vendor Items, Nortel Networks shall pass
through or assign to Client the rights (e.g., warranties and
indemnities) Nortel Networks obtains from the manufacturer or vendors
of such products and services, all to the extent that such rights may
be assigned. Nortel Networks shall provide no independent warranty or
indemnities with respect to such Third Party Vendor Items. Except for
the obligations specified in this paragraph, Customer hereby waives any
and all claims against Nortel Networks with regard to the malfunction
or failure of Third Party Vendor Items.
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9. WARRANTY SERVICE
Nortel Networks provides certain types of warranty repair and exchange
service, without charge. Nortel Networks will inform Customer of the
types of warranty services available to Customer consistent with Nortel
Networks standard practices and response times. Nortel Networks
Technical Assistance Services ("TAS") are available for warranty repair
during the warranty period at no charge only for specified Products.
When Customer is required to return Hardware to Nortel Networks for
warranty service, Customer agrees to ship it prepaid and suitably
packaged to a location Nortel Networks designates. Nortel Networks will
return the Hardware to Customer at Nortel Networks' expense. Nortel
Networks is responsible for loss of, or damage to, Customer Hardware
while it is (a) in Nortel Networks' possession or (b) in transit back
to Customer. Any returned Hardware becomes Nortel Networks' property
and, subject to Section 11 (Title and Risk of Loss), its replacement
becomes the Customer's property. The replacement Hardware may not be
new but will be in working order and equivalent to the item exchanged.
The warranty period for the Hardware shall be the greater of ninety
(90) days from the date of repair or replacement or the remaining
Hardware warranty period. Customer agrees to ensure that exchanged
Hardware is free of any legal obligations or restrictions that prevent
its exchange and represents that all returned items are genuine and
unaltered. Where applicable, before Nortel Networks provides warranty
services, Customer agrees to (a) follow the problem determination,
problem analysis, and warranty services request procedures that Nortel
Networks provides; (b) secure all programs and data contained in
Hardware; and (c) inform Nortel Networks of changes in the Hardware's
location. Post warranty services may be available at Nortel Networks'
then-current prices.
10. SHIPMENT, TITLE AND RISK OF LOSS
10.1 The Parties shall use reasonable commercial efforts to agree upon a
Scheduled Ship Date. The agreed Scheduled Ship Date shall be included
in the Order if agreed prior to placement of the Order. Otherwise the
agreed Scheduled Ship Date shall be reflected in the project plan for
the Order. Except where provided in Section 2.1 of this Purchase and
License Agreement, Nortel Networks shall ship the relevant Products on
the Scheduled Ship Date.
10.2 Until April 1, 2001 title and risk of loss for ordered Products shall
pass from Nortel Networks to Customer upon shipment, thereafter upon
delivery at the Customer destination, unless otherwise mutually agreed
in writing. Subject to the terms and conditions of the Financing
Agreement, Nortel Networks reserves a purchase money security interest
in a Product until receipt of all amounts due from Customer for the
Product. In the event of a conflict with the terms of the Financing
Agreement, Customer shall use its commercially practicable efforts to
secure a waiver of such conflict prior to shipment for all Products to
be provided hereunder. In the event Customer cannot secure a waiver of
such conflict, Nortel Networks reserves the right to suspend its
performance of this Agreement until a waiver is secured. Customer
agrees to sign appropriate documentation to permit Nortel Networks to
perfect such interest.
11. IMPLEMENTATION AND INSTALLATION SERVICES
11.1 Customer agrees to provide sufficient, free and safe access to
Customer's facilities and a suitable physical environment meeting
Nortel Networks' reasonable specified requirements during mutually
agreed times as necessary to permit the timely installation of Products
and/or and the performance of Services. Nortel Networks personnel shall
comply with Customer's site and security regulations where such
regulations are provided to Nortel Networks in writing in advance
within a reasonable period of time in advance of the required access
and
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where required for security, provide advance notice and identification
of individuals requiring access.
11.2 Nortel Networks will perform implementation and installation Services
in accordance with the Specifications and with the mutually agreed
Statement of Work applicable to the Order, or in the absence of such
then standard Nortel Networks statement of work where applicable.
Nortel Networks will successfully complete its standard installation
and commissioning procedures and provide a notice of Turnover ("ICN")
to Net2000 indicating such completion.
11.2.3 In the event that Net2000 notifies Nortel Networks of non-execution of
an ICN and Nortel Networks personnel travels to the Net2000 facility to
remedy such non-execution and determines that non-execution is due to a
deficiency caused by Net2000, Nortel Networks will invoice Net2000 for
Nortel Networks' investigation of the matter, consisting of the
standard labor rate for Nortel Networks' personnel who travel to the
Net2000 facility and the reasonable travel and living expenses incurred
by such personnel.
11.3 Nortel Networks may make alterations to any Product and Service as
necessary to comply with specifications, changed safety standards or
governmental regulations, to make a Product non-infringing with respect
to any patent, copyright or other proprietary interest, or to otherwise
improve a Product or Service. Customer is responsible for (i) the
results obtained from the use of Products and Services; (ii)
integration and interconnection with Customer's hardware and/or third
party hardware and/or systems, and (iii) installation of the
Furnish-only Products.
12. ACCEPTANCE
12.1 Customer shall have the right to test a Product for a period of ***
days for Switching, Succession and Optical Products and *** days for
other Products, from the Turnover Date, to verify the Product conforms
to the Specifications ("Acceptance Period").
12.2 For Products installed by Nortel Networks, the Acceptance Period shall
begin on the Turnover Date.
12.3 For Products installed by Nortel Networks, Acceptance shall occur when
(i) the Product has been installed and the installation Services have
been completed in accordance Specification for such Product and
Services; (ii) the Product has successfully completed the testing
proscribed in the Specifications (iii) the Product materially conforms
to the Specifications; and (iv) Customer has provided Nortel Networks
with written notice of Acceptance based on the foregoing.
Notwithstanding the foregoing, in the event Net2000 is utilizing any
Product in service, then Acceptance shall be deemed to have occurred
without limitation or restriction, upon the date of placement of such
Product into service with Net2000 customer traffic.
12.4 For Products installed by Customer, Nortel Networks 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 in all material respects in accordance with the applicable
Specifications. Net2000 shall be deemed to have accepted the Products
based upon such tests and Acceptance shall be deemed to have occurred
upon receipt of the Products by Customer.
12.5 For Services, Acceptance shall occur (i) when the Services have been
completed in accordance with the agreed upon Statement of Work, or if
none, Nortel Networks standard processes for such Services, and (ii)
Customer has provided Nortel Networks with written notice of Acceptance
based on the foregoing.
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12.6 Net2000 shall either accept the Product and Services in writing by
execution of a notice of Acceptance, or notify Nortel in writing,
specifying in reasonable detail those particulars in which, in
Net2000's opinion, the Product and Services are not in material
conformance with the Specifications or Statement of Work respectively.
If Acceptance does not occur within the period specified in Section
12.1 above or the Services completion date respectively, and Net2000
has not indicated to Nortel Networks in writing its basis for not
accepting such Product and/or Services, then Acceptance shall be deemed
to have occurred.
12.7 Following Acceptance of Products and Services, Net2000 shall execute
Nortel Networks' Acceptance notice, confirming Acceptance without any
conditions, restrictions, or limitations of any nature whatsoever
except as specified in Section 12.8. Net2000's execution of Nortel
Networks' Acceptance Notice, however, shall not in any way be deemed to
release Nortel Networks of its warranty or other liability obligations.
12.8 Acceptance shall not be withheld or postponed due to deficiencies of
such Products or Services resulting from causes not attributable to
Nortel Networks, 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 Net2000 and tested in conjunction with the applicable
Products, or spurious outputs from adjacent material, or (c) other
conditions external to the Products which are beyond the limits
specified by Nortel Networks in the Specifications for the Products.
12.9 In the event that Net2000 notifies Nortel Networks of non-acceptance of
a Product and Nortel Networks personnel travels to the installation
site to remedy such non-acceptance and determines that non-acceptance
is due to a deficiency of the type described in Section [12.8] above,
Nortel Networks will invoice Net2000 for Nortel Networks' investigation
of the matter, consisting of the standard labor rate for Nortel
Networks' personnel who travel to the installation site and the
reasonable travel and living expenses incurred by such personnel.
13. CONFIDENTIAL INFORMATION
13.1 Confidential information ("Confidential Information") means (i)
Software and Third Party Software; (ii) information particular to
describing Customer's network and/or Customer's customers, and (iii)
all business, technical, marketing and financial information and data
that is clearly marked with a restrictive legend of the disclosing
party ("Discloser").
13.2 The party receiving Confidential Information ("Recipient") will use the
same care and discretion, but not less than reasonable care, to avoid
disclosure, publication or dissemination of Confidential Information as
it uses with its own similar information that it does not wish to
disclose, publish or disseminate. The Recipient may disclose
Confidential Information only to i) its employees and employees of its
parent, subsidiary or affiliated companies who have a need to know for
purposes of carrying out this Agreement; and ii) any other party with
the Discloser's prior written consent. Before disclosure to any of the
above parties, the Recipient will have a written agreement with such
party sufficient to require that party to treat Confidential
Information in accordance with the provisions of this Section 13.
13.3 The Recipient may disclose Confidential Information to the extent
required by law. However, the Recipient must give the Discloser prompt
notice and make a reasonable effort to obtain a protective order.
13.4 No obligation of confidentiality applies to any Confidential
Information that the Recipient (i) already possesses without obligation
of confidentiality; (ii) develops independently; or (iii)
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rightfully receives without obligations of confidentiality from a third
party. No obligation of confidentiality applies to any Confidential
Information that is, or becomes, publicly available without breach of
this Agreement.
13.5 The release of any advertising or other publicity relating to this
Agreement requires the prior approval of both parties.
14. INFRINGEMENT
14.1 If a third party claims that Nortel Networks Hardware, Software or
Services provided to Customer under this Agreement either (i) infringe
that party's patent, trademark or copyright or (ii) constitute an
unauthorized use, disclosure or misappropriation of that party's trade
secrets, Nortel Networks will indemnify, defend and hold Customer
harmless against that claim at Nortel Networks' expense and will pay
all costs and damages awarded against Customer resulting from the claim
or are agreed in settlement, provided that Customer (y) promptly
notifies Nortel Networks in writing of the claim and (z) allows Nortel
Networks to control, and cooperates with Nortel Networks (at Nortel
Networks' request and expense with respect to Net2000's direct
reasonable out of pocket expenses including legal fees) in, the defense
and any related settlement negotiations. Failure by Customer to
promptly notify Nortel Networks of a claim shall not relieve Nortel
Networks of its obligations under this Section except to the extent
that Nortel Network can demonstrate prejudice attributable to
Customer's failure to promptly notify.
14.2 If such a claim is made or appears likely to be made, Nortel Networks
agrees to secure the right for Customer to continue to use the
Hardware, Software or Services, or to modify it, or to replace it at
Nortel Networks' expense with one that is equivalent. If Nortel
Networks determines that all of these alternatives are commercially
impracticable, Customer agrees to return the Hardware, Software, or
Services to Nortel Networks on Nortel Networks' written request. Nortel
Networks will then give Customer a refund equal to the price paid for
the Hardware, Software, or Service, less applicable depreciation using
a seven year straight-line depreciation schedule, provided Net2000 has
followed generally accepted account principles, however, if such
Hardware, Software, or Services is returned within the first twelve
(12) months after the Actual Ship Date or completion, if applicable,
then Nortel Networks will *** to Net2000 *** of the price paid for the
Hardware, Software or Services plus the shipping that was charged by
Nortel Networks. Any such claims against the Customer or liability for
infringement arising from use of the Hardware or Software or Services
following a request for return by Nortel Networks are the sole
responsibility of Customer.
14.3 Nortel Networks has no obligation regarding any claim to the extent
that such claim is based on any of the following: (a) anything Customer
provides which is incorporated into the Products or Services; (b)
functionality provided by Nortel Networks at the instruction of
Customer; c) Customer's modification of Products or Services except as
provided by Nortel Networks' Documentation or except as performed by
Nortel Networks at the request of Net2000; (d) the combination,
operation, or use of Products or Services with other products not
provided by Nortel Networks where such combination, operation, or use
of Products or Services with any product, data, or apparatus that
Nortel Networks did not provide; or (e) infringement by a Third Party
Vendor Item alone, as opposed to its combination with Products Nortel
Networks provides to Customer as a system.
14.4 This Section 14 represents Nortel Networks' entire obligation to
Customer regarding any claim of infringement.
12
15. INDEMNITY
Each Party will indemnify, defend and hold harmless the other Party,
its directors, officers, agents, and employees from all liability or
expense (including but not limited to reasonable attorney fees and
costs of investigation and defense) resulting from (a) bodily injury to
any person (including injury resulting in death) or damage to real or
personal property arising out of the indemnifying Party's performance
of this Agreement, provided such injury or property damage is due to
the negligence of the indemnifying Party, its employees, agents, or
subcontractors, (b) any action taken by or on behalf of the
indemnifying Party which is not permitted by or pursuant to the terms
of this Agreement, or (c) any act or omission constituting negligence
or willful misconduct or breach of fiduciary duty by any officer,
director, agent or employee of the indemnifying Party in connection
with its performance under this Agreement.
16. DISPUTES
In the event of any dispute or claim arising under or in connection
with this Agreement, including a dispute regarding an alleged breach of
this Agreement, one Party shall notify the other Party in writing of
the dispute (the "Dispute"). The Parties shall work together in good
faith first to informally resolve the Dispute internally by escalating
it as necessary to progressively higher levels of management. If after
sixty days the Parties cannot resolve the Dispute, either Party may
request arbitration under the Commercial Rules of the American
Arbitration Association, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
Unless otherwise expressly agreed in writing by the parties,
arbitration will be held in Washington, D.C. Except to the extent
actually prevented by the Dispute, both Parties shall continue
performing their respective obligations under this Agreement while the
dispute is being resolved unless and until this Agreement expires or is
terminated in accordance herewith. The provisions of this Section will
not be construed to prevent a Party from (i) seeking a temporary
restraining order or injunctive or other equitable relief in connection
with alleged or actual infringement or misappropriation of intellectual
property rights or misuse of proprietary or Confidential Information,
or (ii) instituting litigation or other appropriate proceedings to the
extent necessary to avoid the expiration of any applicable limitations
period or to preserve a superior position with respect to other
creditors.
17. TERMINATION
17.1 Either Party may terminate the Agreement if the other Party shall: (a)
file a voluntary petition under any bankruptcy or insolvency law, or
file a voluntary petition under the reorganization or arrangement
provisions of any law of any jurisdiction, or have proceedings under
any such laws instituted against it which are not terminated within
thirty days of such commencement; (b) become insolvent, bankrupt, or
admit in writing of its inability to pay all debts as they mature or
make a general assignment for the benefit of or enter into any
composition or arrangement with creditors; (c) authorize, apply for, or
consent to the appointment of a receiver, trustee, or liquidator of all
or a substantial part of its assets, or has proceedings seeking such
appointment commenced against it which are not terminated within thirty
days of such commencement.
17.2 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
13
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.
18. LIMITATION OF LIABILITY
18.1 In no event shall Nortel Networks or its agents or suppliers be liable
to Customer for more than the amount of any actual direct damages up to
the greater of (i) *** or (ii) ***, regardless of the cause and whether
arising in contract, tort (including negligence) or otherwise.
18.2 IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES OR DAMAGES FOR LOSS OF PROFITS,
REVENUE, DATA, OR USE, INCURRED BY EITHER PARTY OR ANY THIRD PARTY,
WHETHER IN AN ACTION IN CONTRACT OR TORT, EVEN IF THE OTHER PARTY OR
ANY OTHER PERSON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
18.3 THE LIMITATIONS IN SECTIONS 18.1 AND 18.2 WILL NOT APPLY TO LIABILITY
RESULTING FROM THE INDEMNITIES PROVIDED IN SECTION 7 SOFTWARE USE OF
SOFTWARE AND DOCUMENTATION, SECTION 14 CONFIDENTIAL, SECTION 16
(INFRINGEMENT) AND SECTION 15 subsection a) only (INDEMNITY).
19. GENERAL
19.1 Each Party agrees not to assign, or otherwise transfer this Agreement
or its rights under it, or delegate its obligations, except to an
Affiliate or upon a "Change in Control" (as defined below), without the
other Party's prior written consent, and any attempt to do so is void.
A Change in Control shall be deemed an assignment hereunder and shall
not require the consent. A "Change in Control" shall mean the
acquisition by any individual, entity, or group of fifty (50%) percent
or more of either (a) the then outstanding shares of Customer's stock;
or (b) the combined voting power of the then outstanding voting shares
of the Customer entitled to vote generally in the election of
directors; (ii) the closing of a sale or conveyance of all or
substantially all of the assets of Customer; or (iii) the effective
time of any merger, share exchange, consolidation or other
reorganization or business combination of Customer if immediately after
such transaction such persons who hold a majority or the outstanding
voting securities entitled to vote generally in the election of
directors of the surviving entity are not persons who hold voting
capital stock of the Customer immediately prior to such transaction.
Net2000 may transfer the Hardware, including all license rights to any
Software required to operate such Hardware, and the license rights to
any other Nortel Networks Software provided hereunder, to any Net2000
Affiliate, to the surviving entity in a merger or consolidation of
Net2000, or to purchaser of all or substantially all the assets of
Net2000 provided that purchaser agrees in writing to be bound by the
terms of the terms of Section 6 "Software License" and to protect the
confidentiality of the Software under terms no less stringent than
those set forth in Section 13 "Confidentiality."
14
Net2000's Affiliates shall be entitled to the rights of Net2000
hereunder with respect to Products and Services purchased by such
Affiliates; provided, however, Net2000 shall accept responsibility for,
and satisfy the payment obligations of, its Affiliates, to the extent
necessary to meet such payment obligations and commitments incurred by
its Affiliates hereunder. Nortel Networks may provide Products and
Services to Net2000 and Net2000 Affiliates through certain Nortel
Networks Affiliates.
19.2 Customer represents and warrants that it is buying Products and/or
Services for its own internal use and not for resale. The Parties shall
comply with all applicable federal, state and local laws, regulations
and ordinances as they relate to this more than three years after the
cause of action arose. Neither party is responsible for failure to
fulfill any obligations due to causes beyond its reasonable control. In
the event that any provision of this Agreement or portions thereof are
held to be invalid or unenforceable, the remainder of this Agreement
will remain in full force and effect.
19.3 All notices or other communications required to be given hereunder
shall be in writing and delivered either personally or by mail,
courier, or similar reliable means of dispatch and addressed as
provided in this Agreement or as otherwise requested by the receiving
party. Notices delivered personally shall be effective upon delivery
and notices delivered by any other means shall be effective upon their
receipt by the party to whom they are addressed.
19.4 The terms of Sections 6 (Licensed Use of Software and Documentation), 8
(Warranty), 9 (Warranty Service), 13 (Confidential Information), 14
(Infringement), 15 (Indemnity), 18 (Limitation of Liability) and 19
(General) shall survive termination of this Agreement or completion of
any Order.
19.5 The terms and conditions of this Agreement, including any Supplement(s)
Supplements and/or Attachments, form the complete and exclusive
agreement between Customer and Nortel Networks and replace any prior
oral or written proposals, correspondence or communications regarding
the subject matter hereof. With respect to new purchases made by
Customer as of the effective date of this Agreement or as otherwise
indicated by a Supplement. (All purchases made by Customer to Nortel
Networks (including without limitation purchases for Products or
Services) that were made pursuant to the Master Purchase Agreement
between Net2000 Communications Capital Equipment, Inc, and Northern
Telecom, Inc, dated November 2, 1998, as amended, and all supporting
Exhibits; and the Master Services Agreement dated November 2, 1998, as
amended and all supporting Exhibits ("MPA"). shall continue to be
governed by such MPA.)
19.6 In the event of a conflict between this Purchase and License Agreement
and a Supplement, the terms in any Supplement(s) prevail. Any changes
to this Agreement must be made by the Parties in writing. All
Customer's rights and all of Nortel Networks' obligations are valid
only in the country in which the Products and Services were supplied.
19.7 The laws of the State of New York govern this Agreement, exclusive of
its conflict of laws provisions; and nothing in this Agreement affects
any statutory rights of consumers that cannot be waived or limited by
contract.
19.8 Excepting replacement Hardware as specified in Section 9 all Hardware
provided hereunder shall be new Hardware.
15
19.9 Prior to ordering Services, eBusiness Products, and/or Enterprise
Products, the parties shall mutually agree on the supplemental terms
that shall apply to such Orders. The parties agree to negotiate in good
faith such terms with the goal of reaching such mutual agreement on the
terms that shall apply to Orders of Enterprise Products within thirty
(30) days of the date hereof.
* * *
FOR NORTEL NETWORKS INC. FOR NET2000 COMMUNICATIONS CAPITAL
EQUIPMENT, INC.
BY: /s/ XXXXX X. XXXXXXXXXX BY: /s/ XXXXXX X. XXXXXX
--------------------------- -------------------------------
PRINTED PRINTED
NAME: Xxxxx X. Xxxxxxxxxx NAME: Xxxxxx X. Xxxxxx
--------------------------- -------------------------------
TITLE: Vice President, Sales TITLE: Chief Financial Officer
--------------------------- -------------------------------
DATE: 3/27/01 DATE: 3/27/01
--------------------------- -------------------------------
16
[NORTEL NETWORKS LOGO] NET2000
Agreement No. 031201mab
Supplement No. 1, Schedule 1-E
PAGE 16
SUPPLEMENT NO 1 TO THE PURCHASE AND LICENSE AGREEMENT
The terms and conditions provided in this Supplement ("Supplement No. 1") are in
addition to those contained in the Purchase and License Agreement No. 031201mab,
by and between Net2000 Communications Capitol Equipment, Inc. and Nortel
Networks Inc. effective March 27, 2001 ("Agreement") and describe the manner in
which Products shall be provided and priced during the Term as defined below.
1. TERM
This Supplement No. 1 shall commence on January 1, 2001 and terminate on either
December 31, 2003 (as may be amended by the parties or otherwise extended as
specified herein), or on the date the Net2000 satisfies the Commitment, as
defined below, whichever comes first ("Term").
2. DEFINITIONS
For the purposes of this Supplement No. 1, the capitalized terms shall be
defined as set forth below. Any capitalized terms not defined herein shall have
the meaning given them in the Agreement.
"COMMITMENT" means the commitment that Net2000 makes herein to order
Products and Services as established in Article 3 below.
"MASTER PURCHASE AGREEMENT" means the agreement between Net2000
Communications Capitol Equipment, Inc and Nortel Networks Inc.,
formerly Northern Telecom Inc., effective November 2, 1998, as amended,
inclusive of Exhibit A - Product Annexes including Lists of Product and
Prices, the Exhibit B - Master Services Agreement all attachments or
schedules thereto.
"TERM" shall have the meaning as specified in Section 1 of this
Supplement.
"SANCTIONED OEM SOLUTION" means a Third Party Vendor Item which Net2000
requests quotations from Nortel Networks and a) that are available to
Nortel Networks from Nortel Networks' suppliers, excluding Affiliates,
under Nortel Networks then-current subcontracts, and that Nortel
Networks makes generally available in its standard proposal offering to
its customers or b) as mutually agreed in writing. Sanctioned OEM
Solutions does not include any non-Nortel hardware and/or software
supplied to Customer under the Agreement and embedded in Nortel
Networks Hardware or Software. Nortel Networks shall use reasonable
efforts to identify Sanctioned OEM Solutions as such in its price
quote; however, notwithstanding such, the failure to do so as a result
of an oversight shall not disqualify a Sanctioned OEM Solution from
being a Sanctioned OEM Solution.
3. SCOPE / COMMITMENT / RESPONSIBILITIES OF THE PARTIES
3.1 With respect to Agreement, Article 2 ("Orders"), the following
additional terms shall apply:
"2.1 VOLUME COMMITMENT: Net2000 hereby agrees to order during the Term
and take delivery of a) the Products, and/or Services selected
from Schedule 1.A, b) others as may be requested by Net2000 and
mutually agreed, such request not to be unreasonably denied by
Nortel Networks, and/or as set forth in this Supplement, and c)
Sanctioned OEM as set forth in Section 3.8 below, having a
combined total price of at least one hundred sixty five million
dollars ($165,000,000).
2.1.1 Orders issued by Net2000 on or after January 1, 2001 for the
Products and Services specified in Schedule A-1 shall be deemed to
be issued in satisfaction of this Commitment, notwithstanding that
they were issued before the date that the Agreement was executed.
Orders issued by Net2000 on or before December 31, 2003 for
delivery according to mutually agreed Scheduled Ship Dates shall
be deemed to be made in satisfaction of the Commitment,
notwithstanding that such Orders, if any, may be delivered to
Net2000 after the end of the Term. At the end of the Term Nortel
Networks shall invoice Net2000 for *** and Nortel Networks shall
have no further obligations with respect to any part of the
Commitment not ordered
17
2.1.2 Notwithstanding the foregoing, in the event that Nortel
Networks terminates Net2000 financing under the Financing
Agreement and an economically reasonable alternate source of
financing is not available, then on or after such date of
termination notice Net2000 shall be released from issuing Orders
to satisfy the Commitment specified in this Section.
2.1.3 Notwithstanding the foregoing, in the event that Nortel
Networks suspends Net2000 financing under the Financing Agreement
for a period(s) greater than ninety (90) consecutive days and an
economically reasonable alternate source of financing is not
available, then the Term to satisfy the Commitment shall be
extended by that number of days that the financing was suspended,
not to exceed *** months for all suspensions that may occur, if
any.
2.1.4 Notwithstanding the foregoing, in the event that Net2000
issues an Order for Products specified in Schedule 1.A and Nortel
Networks notifies Net2000 that it is not able to make such
Products available for delivery to Net2000 *** and provided that
such Product had been at one time generally available to customers
for ordering, then Net2000 shall be ***.
"2.2 PREFERRED SUPPLIER COMMITMENT: In the third year of the Term, Net2000
hereby agrees to grant Nortel Networks the right to proffer, not later
than the date it provides alternate vendors with an opportunity to
proffer, a competitive bid on any or all telecommunications and data
equipment or services that are comparable to the Nortel Networks
generally available Hardware or Software identified on Schedule 1.A or
the further progression thereof of which Net2000 is considering
procurement, provided that Nortel Networks responds to Net2000's
written request within *** days after the date of the request. In the
event that Net2000 reasonably concludes that Nortel Networks' bid does
not meet the technical or financial requirements of Net2000's business,
Net2000 may elect to solicit bids from other Net2000 suppliers. In the
event that Net2000 tentatively decides to order a solution set forth in
bid from an alternate Net2000 supplier and before ordering, Net2000
shall provide Nortel Networks ***days after providing Nortel Networks
the relevant details to offer the same or comparable technical solution
and value as the other Net2000 third party supplier, and Net2000 and
Nortel Networks shall negotiate in good faith before Net2000 selects
the offer from such third party supplier or from Nortel Networks.
In the event that Nortel Networks declines to respond to the written
request for proposal as indicated above or is incapable of providing
such Hardware or Software, or the alternate supplier solution is a
significantly superior technical solution or value than the solution
Nortel Networks offers, then the Term to satisfy the portion of the
Commitment equal to the amount of the order issued to such alternate
supplier for such superior solution up to a maximum of *** shall be
extended, for a period for all such orders under this Section 2.2 until
***, provided by such date that the Orders issued are for delivery
pursuant to mutually agreed Scheduled Ship Dates necessary to satisfy
the Commitment.
3.2 Nortel Networks shall make available to Net2000 the following:
3.2.1 Commitment Discounts and Prices as specified in Section 4;
3.2.2 Training Credits as specified in Section 3.4;
3.2.3 Cooperative Advertising and Marketing Credits as specified
in Section 3.5;
3.2.4 Intentionally Left Blank;
3.2.5 Nortel Networks' Commitment To Deliver Succession Call
Server Functionality as specified in Section 3.7;
3.2.6 Sanctioned OEM Solutions as specified in Section 3.8;
3.2.7 Rebate Credits as specified in Section 3.9;
3.2.8 ***.
18
a. Credits specified above shall be accrued either as a lump sum as
defined herein or as a percent of the Schedule 1-A prices paid by
Net2000 to Nortel Networks hereunder for Products and Services ordered
in satisfaction of the Commitment, as specified herein.
b. Training Credits and Cooperative Advertising and Marketing Credits
(both defined below) may be applied by Net2000 to pay for the eligible
charges incurred for eligible specified training or marketing services
ordered by Net2000 pursuant to this Supplement No. 1, however, their
use shall not be applied towards the satisfaction of the Commitment.
c. For Orders for which Net2000 intends to use Rebate Credits ***,
Net2000 shall indicate on the relevant Order a) the gross Order price
net of pricing discounts but before the credit is applied and b) the
net Order price after the credit is applied. *** For the Rebate Credits
*** to apply Net2000 shall designate its intent to apply such credits
on the Order when issuing the relevant Order.
d. Any credits not used by Net2000 before the expiration of the Term
shall be forfeited except as provided herein, and in no case shall cash
refunds of any type whatsoever be paid by Nortel Networks to Net2000
for any unused credits.3.6.2.1.
3.3 During the Term Nortel Networks may internally arrange for the
Technical Resources as specified in Section 4.0 to facilitate the
receipt and implementation of Orders.
3.4. TRAINING
3.4.1 Pursuant to Section 3.2 of this Supplement No. 1, upon execution of the
Agreement including this Supplement No. 1 Nortel Networks shall make
training available to representatives of Net2000 with respect to the
operation, configuration, installation, service, maintenance and support
of the Products at Nortel Network's then current prices. Nortel Networks
shall provide Net2000 *** training credits for every *** of the Products
and Services specified in Schedule A-1 for which invoices have been
satisfied ("Training Credits"), valued at $150.00 per credit.
3.4.2 Eligible courses shall be those courses that are a) generally available
to Nortel Networks customers, b) associated with any Nortel Networks
Products, and c) are provided directly by Nortel Networks employees, or
by Nortel Networks training vendors/partners that accept Training
Credits. Net2000 may review available general details (not necessarily
specific to the Commitment No. 2) of Nortel Networks' training services
on the Internet at xxx.xxxxxxxxxxxxxx.xxx/xx.
3.4.3 Net2000 shall bear the cost of transportation, meals, lodging or any
other incidental expenses of Net2000 personnel to, from and during
training, and the same for Nortel training personnel (unless such travel
costs are expressly included in the training fees) to, from and during
on-site training delivered at a mutually agreed Net2000 location.
3.4.4 Notwithstanding the provisions of Section 3.2 of this Supplement No. 1,
Training Credits must be used within one (1) year after the end of the
Term. Nortel Networks shall issue a report detailing number of Training
Credits earned, used, scheduled (unavailable) and available for use at
least once a year.
3.5. COOPERATIVE ADVERTISING AND MARKETING
3.5.1 Pursuant to Section 3.2 of this Supplement No. 1, during the Term Nortel
Networks shall accrue on a quarterly basis, credits up to a maximum of
*** of the Schedule 1-A prices paid by Net2000 to Nortel Networks
hereunder for Product and/or Service purchased and/or licensed in
satisfaction of Commitment ("Cooperative Advertising and Marketing
Credits"). Cooperative Advertising and Marketing Credits may be applied
by Net2000 to pay for eligible charges incurred for certain cooperative
advertising and/ or marketing programs, provided that Net2000 provides
"matching funds", as defined and in the amount specified below, to the
credits that Nortel Networks accrues, as further specified in Schedule
1.C entitled "Cooperative Marketing and Advertising Marketing Credits"
attached hereto.
19
3.5.2 "Matching Funds" shall mean that Net2000 may apply Cooperative
Advertising and Marketing Credits in an amount up to *** of the eligible
charges on an invoice for agreed cooperative marketing and/or advertising
programs, and Net2000 shall be liable for the remainder of the eligible
charges on such invoice.
3.5.3 Any Statement of Work agreed and duly executed during the Term that sets
forth agreements between the parties utilizing the Cooperative
Advertising and Marketing Credits shall be deemed to be a Statement of
Work pursuant to that certain Professional Services Supplement which is
part of the Agreement.
3.5.4 The provisions relating to "Documentation" as set in the Agreement shall
not apply to documents prepared or delivered pursuant to Schedule 1.C
attached hereto.
3.6. INTENTIONALLY LEFT BLANK
3.7. COMMITMENT TO DELIVER SUCCESSION CALL SERVER FUNCTIONALITY
3.7.1 PHASE 0 AND PHASE 1
Nortel Networks hereby agrees to make the *** available as follows:
a) ***
Nortel Networks agrees to make *** available for ordering and
delivery *** not later than ***identified as Phase 0 in Schedule
1.B.
b) ***
Nortel Networks agrees to make *** available for ordering and
delivery *** not later than *** identified as Phase 1 in Schedule
1.E.
3.7.2 PHASE 0
If an order is issued pursuant to the terms of the Agreement for delivery of a
*** as stated in Section 3.7.1.a above, the following terms shall apply to such
***
a. Both parties agree to make good faith best efforts to mutually to (i)
develop a Statement of Work governing engineering, installation and
evaluation of *** and of ***, to (ii) add details to the Specifications set
forth in Schedule 1.B, for *** and to iii) develop a test and acceptance
plan ("Test and Acceptance Plan"), all consistent with Schedule 1.B without
expansion of the existing functionality set forth in such Schedule. Nortel
Networks shall provide proposed versions of the above documents by *** for
functionality in Schedule 1.B, and the parties shall make good faith best
efforts to mutually agree by *** on such documents governing ***. If the
parties fail to agree on such documents by *** then Net2000 shall be
entitled to the remedies as set forth in Section 3.7.3.
b. Nortel Networks and Net2000 will jointly perform testing of *** in
accordance with the agreed Statement of Work and Test and Acceptance Plan
to evaluate the functionality specified in Schedule 1-B and the detailed
Specifications thereof, to the extent feasible ***. Nortel Networks will
complete such testing and provide a notice to Net2000 indicating such
completion, which will specifically identify the successes and failures of
*** if any, relative to the Schedule 1-B and the detailed Specifications
thereof, to complete the tests. Net2000 will then complete it's testing of
***. Net2000 will complete its responsibilities as identified in the
Statement of Work. Nortel Networks and Net2000 will then retest *** to
complete the tests that previously failed, if any. Upon Net2000's and
Nortel Network's mutual agreement that *** completed its testing according
to this Section 3.7.2.b and is ready for *** as set forth in the following
Section 3.7.2.c, Net2000 and Nortel Networks shall execute the completion
notice indicating Acceptance and thereafter *** shall be supported by
Nortel Networks technical support organizations.
c. Nortel Networks and Net2000 will perform testing of *** in accordance
with the agreed Statement of Work and the Test and Acceptance Plan relative
to the functionality specified in Schedule 1-B and the detailed
Specifications thereof for those tests that can be performed ***. Nortel
Networks will complete such testing and provide a notice to Net2000
indicating such completion, which will specifically identify the successes
and failures of *** if any, relative to conformance to the Schedule 1.B the
detailed Specifications thereof, and remedy such failures. Net2000 will
complete its responsibilities identified in the
20
Statement of Work. Nortel Networks trial team will provide technical
engineering support for *** as specified in the Statement of Work. Nortel
Networks and Net2000 will then retest *** to complete the tests in this
Section that previously failed, if any. Upon Net2000's and Nortel Networks
mutual agreement that *** successfully completed its testing according to
this Section 3.7.2.c and is ready for the traffic and testing specified in
the following Section 3.7.2.d, Net2000 shall execute the completion notice
indicating acceptance of ***.
d. Nortel Networks will perform testing of *** in accordance with the
agreed Statement of Work and the Test and Acceptance Plan relative to the
functionality specified in Schedule 1-B and the detailed Specifications
thereof for those tests that can be performed ***. Nortel Networks will
complete such testing and provide a notice to Net2000 indicating such
completion, which will specifically identify the successes and failures of
*** if any, to complete the tests relative to the Statement of Work, and
remedy such failures. Net2000 will complete its responsibilities identified
in the Statement of Work. Nortel Networks trial team will provide technical
engineering support for *** Nortel Networks and Net2000 will retest *** to
complete the tests in this Section that previously failed. Upon Net2000's
and Nortel Networks mutual agreement that *** testing has been successfully
completed its testing according to this Section 3.7.2.d and that the
Statement of Work responsibilities have been completed (unless otherwise
mutually agreed and indicated in the notice), Net2000 shall execute the
completion notice indicating acceptance of ***.
e. Except as otherwise provided in the Test and Acceptance Plan, the
parties agree that the provisions of Sections 12.6, 12.7, 12.8 and 12.9 of
the Agreement shall apply to the Sections 3.7.2.b, 3.7.2.c and 3.7.2.d
above. In the event that Net2000 does not accept *** as set forth in
Sections 3.7.2.c and 3.7.2.d above then *** shall be suspended or stopped
unless otherwise mutually agreed in writing. If Acceptance does not occur
within *** business days after Nortel Networks provides Net2000 the
relevant completion notice, and Net2000 has not indicated to Nortel
Networks in writing its basis for not accepting such Product and/or
Services, then Acceptance shall be deemed to have occurred.
f. The detailed Specifications for *** shall be as agreed by the parties
according to Section 3.7.2.a above for the functionality specified in
Schedule 1-B. The Statement of Work may include scheduled down time (i.e.
out-of-service) to upgrade from the functionality specified in 3.7.1.a
above to the functionality specified in 3.7.1.b.
3.7.3 If an Order is placed pursuant to the terms of the Agreement for
delivery of *** as stated in Section 3.7.1 above, and Nortel Networks fails
or decides not to deliver such ordered version by the date set forth in
Section 3.7.1, due solely to its own failure, and Net2000 was ready to
receive *** by completing its implementation and installation
responsibilities consistent with Section 11 of the Agreement, then
a) Nortel Networks and Net2000 agree to jointly evaluate related issues
and possible solutions and in good faith attempt to mutually agree on
an action plan to continue or commence the testing of ***; and if such
agreement is not reached; then
b) if a Nortel Networks' alternative solution of Software and/or Hardware
will provide the Product functionality and features specified in
Schedule 1.B, inclusive of consideration of costs, such alternative
solution shall be delivered instead of *** following mutual agreement
on the ***. Such alternative solution shall a)***, b)***, and c) ***
upon the date of the mutual agreement set forth in the prior sentence.
However, if there is no such alternative solution;
then Net2000 shall have the right to either:
c) Net2000's sole and exclusive remedy shall be that Net2000 shall be
permitted ***; or
d) Net2000's sole and exclusive remedy upon the failure of the remedy set
forth in Section 3.7.3.b shall be that Net2000 may ***.
3.7.4 XXXXX 0
3.7.4.1 Nortel Networks shall demonstrate its progress towards the
commitment set forth in Section
3.7.1.b by confirming to Net2000 not later than *** that its Phase 1
functionality will conform to Schedule
21
1.E. In the event that Nortel Networks fails or decides not to confirm such
date, then Net2000 shall be entitled to the remedies as set forth in
Section 3.7.3.
3.7.4.2 If an order is issued pursuant to the terms of the Agreement for
delivery of a ***as stated in Section 3.7.1.b above, the following terms
shall apply to ***
Both parties agree to make good faith best efforts to mutually agree to
(i) develop a Statement of Work governing engineering, installation and
evaluation of *** and of *** to (ii) add details to the Specifications
set forth in Schedule 1.E , for *** and to iii) develop a test and
acceptance plan ("Phase I Test and Acceptance Plan"), all consistent
with Schedule 1.E without expansion of the existing functionality set
forth in such Schedule, following a process comparable to that process
agreed in Section 3.7.2 ***. If by a mutually agreed date to be
established by the parties after *** but in no event later than *** the
parties fail to agree on the foregoing Statement of Work, detailed
Specifications applicable to *** or the Phase I Test and Acceptance
Plan, then Net2000 shall be entitled to the remedies as set forth in
Section 3.7.3.
3.7.4.3 In the event that Nortel Networks fails or decides not to deliver
*** as set forth in Section
3.7.1.b above, and Net2000 was ready to receive *** by completing its
implementation and installation responsibilities consistent with Section 11
of the Agreement and the Statement of Work set forth in Section
3.7.4.1 above, then Net2000 shall be entitled to the remedies as set forth
in Section 3.7.3.
3.7.4.4. Nortel Networks shall make available to Net2000 *** as set forth
in Section 3.7.1.b above, that materially conforms to the detailed
Specifications and has passed the criteria in the Phase 1 Test and
Acceptance Plan, on or before *** subject to the issuance of an Order
pursuant to the terms of the Agreement. In the event that Nortel Networks
fails or decides not to deliver a ***, and Net2000 was ready to receive ***
by completing its implementation and installation responsibilities
consistent with Section 11 of the Agreement and the Statement of Work set
forth in Section 3.7.4.1 above, then Net2000 shall be entitled to the
remedies as set forth in Section 3.7.3.
3.8 SANCTIONED OEM SOLUTIONS
3.8.1 Nortel Networks agrees to offer to sell or sublicense to Net2000
Sanctioned OEM Solutions.
3.8.2 Prices for such Sanctioned OEM shall be based on Nortel quotations to
Net2000 inclusive of a xxxx-up of *** over Nortel Networks' actual cost, or
as otherwise mutually agreed in writing. The parties agree that the
Schedule 1.A will not include or be amended to include Sanctioned OEM, with
the exception of any Sanctioned OEM, if any, that may result from Section
3.7.3.b, however, Sanctioned OEM shall count towards satisfaction of the
Commitment as set forth in this Section 3.8.2 and Section 3.1 above.
3.8.3 In the event that Net2000 Orders and receives installation of such
Sanctioned OEM, notwithstanding Section 2.1 of this Supplement No. 1 such
Orders shall be deemed to be placed in satisfaction of the Commitment, up
to a maximum value of *** percent (***%) of the total Commitment set forth
in Section 2.1 of this Supplement, however, if Nortel Networks provides a
OEM solution pursuant to Section 3.7.3.b above such solution shall not be
counted as part of such *** percent (***%) maximum.
3.8.4 Notwithstanding Section 2.2.2 of the Agreement, Net2000 may cancel an
Order(s) for Sanctioned OEM according to the provisions of Section 3.9
below, and Net2000 shall pay restocking charges only to the extent that
Nortel Networks a) will be charged such charges by its supplier, and b) has
identified such charges to Net2000 in advance.
3.9 REBATE CREDITS
3.9.1 ***
3.9.2 The Rebate Credits granted pursuant to Section 3.2.7 may be applied to
reduce the price up to *** of the price under Orders issued subsequent to
the Effective Date of the Agreement for Products on Schedule 1-A, provided
that Net2000 designates its intent to apply such Credits on the Order when
issuing the relevant Order. For Orders for which Net2000 intends to use
Rebate Credit, Net2000 shall indicate on the relevant Order the gross Order
price before the credit is applied and the net Order price after the credit
is applied. The Rebate Credits shall not apply towards satisfaction of the
Commitment. Rebate Credits must
22
be used within one (1) year after the end of the Term; any credits not used
by Net2000 before the end of one year after the end of the Term shall be
forfeited and in no case shall cash refunds of any type whatsoever be paid
by Nortel Networks to Net2000 for any unused credits.
4.0. TECHNICAL RESOURCES SUPPORT
4.1 Nortel Networks agrees to assign, at its own expense, one Project Manager
effective upon the Effective Date, and may assign at its option upon
reviewing the type and volume of Orders during the Term one additional
Project Manager. Project Manager responsibilities shall include supporting
the planning, ordering, and implementation of Products ordered pursuant to
the Commitment. Specific work assignments, travel, and level of expertise
shall be at the discretion of Nortel Networks. Nortel Networks shall direct
the activity of such personnel who shall perform during normal business
hours while based at existing Nortel Networks locations.
4.2 The provisions set forth in Section 4.1 above may be applicable from the
start of the Term and continuing until Net2000 has fully satisfied the
Commitment or, notwithstanding the provisions of Section 4.1 above, until
it is determined in the sole discretion of Nortel Networks that such
special technical resources support are no longer as useful as originally
envisioned. Nortel Networks shall provide Net2000 at least thirty (30) days
advance notice before removing a Project Manager from assignment.
5. PRICING AND PAYMENT
With respect to Article 7 ("Charges and Payment") of the Agreement, the
following additional terms shall apply:
"7.4 The discounts and prices for the Products and Services are set forth in
Schedule 1.A COMMITMENT PRODUCTS, SERVICES, DISCOUNTS, AND PRICES attached
hereto, and/or for Products and Services set forth in subsection 2.1 b) of
Section 3.1 above the prices shall be as mutually agreed upon by the
parties. The prices for the Products for which discounts are specified in
Schedule 1-A shall be the Nortel Networks' standard list price then in
effect at the time the Order is issued less the discounts specified in such
Schedule 1.A.
7.5 The amounts payable for Products and/or Services included in the Commitment
shall be invoiced by Nortel Networks to Net2000 in accordance with the
following schedules:
7.5.1 For Products, Nortel Networks shall invoice one hundred percent
(100%) of the Product price upon delivery to the carrier at Nortel
Networks for delivery to Net2000 ***
a) ***
b) ***
7.5.2. For Services, unless otherwise mutually agreed in a statement of work,
Nortel Networks shall invoice one hundred percent (100%) of the Services
price upon completion, except that (a) recurring Services will be paid for
quarterly, in advance, and (b) engineering, furnish, and installation
services may be invoiced and payable upon the *** installation (wholly or
conditionally pursuant to Section 12.8 of the Agreement)."
6.0 WARRANTY
6.1 Notwithstanding Section 8.4 of the Agreement the warranty period that
applies to Switching, Succession, and Optical Hardware and Software ordered
pursuant to this Supplement No. 1 shall be *** from the Ship Date.
6.2 Notwithstanding Section 8.3 of the Agreement, installation Services ordered
pursuant to this Agreement shall be warranted for the same warranty period
as the Hardware and Software to which they apply. All other Services shall
have a warranty period of ninety (90) days from the date such Services are
complete, unless otherwise specified in a mutually agreed Statement of
Work.
6.3 In Section 8.4.i of the Agreement the period that Nortel Networks shall
have to repair or replace the Hardware or Software shall be *** after a
trouble ticket is opened.
23
7.0 GENERAL
7.1 SECTION 4.0 OF THE AGREEMENT EQUIPMENT CONTINUING AVAILABILITY
In Section [4] of the Agreement the continuing availability period and
advance notice of manufacture discontinue that applies to the Hardware and
Software ordered pursuant to this Supplement No. 1 shall be for Products as
set forth in Schedule 1.D attached hereto, except for Third Party Vendor
Item. Nortel Networks shall pass through or assign to Net2000 the rights
that Nortel Networks obtains from the manufacturer or vendors of such
products and services, all to the extent that such rights may be assigned.
Nortel Networks shall provide no independent representation or obligation
with respect to such Third Party Vendor Items. Except for the obligations
specified in this paragraph, Net2000 hereby waives any and all claims
against Nortel Networks with regard to the satisfaction by the Third Party
Vendor to the obligations of this provision. The above-mentioned period in
this Section 7.0 commencing on the date of the last Order placed by Net2000
for the relevant Product.
7.2 SCHEDULES AND DAMAGES
7.2.1 If Nortel Networks fails to achieve mutually agreed Scheduled Ship Date
within *** after such date for Hardware or Software which counts towards
the Commitment, with such delay being excused due to force majeure factors,
and the delay is due primarily to the fault or negligence of Nortel
Networks, Nortel Networks shall pay to Net2000 as stipulated damages and
not as a penalty, in the form of ***.
7.2.2 If the delay referenced in Section 7.2.1 above is solely attributable to
Net2000, and is not due to any force majeure factors, Net2000 shall pay
Nortel Networks, per day, as stipulated damages and not as a penalty, ***.
If no costs are incurred by Nortel Networks, Net2000 shall not be liable
for any payment.
7.3 Relative to the Master Purchase Agreement the parties hereby agree as
follows:
7.3.1 Any Orders that Net2000 issues on or after Term commences shall be deemed
to be issued pursuant to the Agreement, notwithstanding any reference to
the Master Purchase Agreement which may be indicated on such Order;
7.3.2 Orders issued before the commencement of the Term shall continue in effect
under the terms of the Master Purchase Agreement.
The terms and conditions of this Supplement No. 1, including the Agreement and
Schedules referenced herein, form the complete and exclusive agreement between
Net2000 and Nortel Networks and supercedes any prior oral or written proposals,
correspondence or communications regarding the subject matter hereof. In the
event of a conflict between this Supplement No. 1 and the Agreement, the terms
in this Supplement No. 1 shall prevail. Any changes to this Supplement No. 1
must be made by mutual agreement and duly executed in writing.
24
SERVICES SUPPLEMENT TO THE PURCHASE AND LICENSE AGREEMENT
The various Services that Customer may obtain from Nortel Networks, associated
pricing, and the manner in which they will be provided are governed by this
Services Supplement ("Supplement"). The terms and conditions provided in this
Supplement will apply solely to the provision of Services.
1. DEFINITIONS
(a) "Deliverables" means all Materials and Software delivered to Customer
pursuant to an Order, but specifically excluding Tools.
(b) "Materials" means any and all engineering, designs, documentation and
other work product prepared by Nortel Networks and delivered to Customer
pursuant to an Order (and specifically excluding Software).
(c) "Statement of Work" is a document, prepared by Nortel Networks,
describing the scope of work, estimated schedule, prices, Deliverables, and
other relevant terms specific to a Service, which may, from time to time, be
mutually agreed to in writing by Customer and Nortel Networks. A Statement of
Work shall be governed by the terms and conditions of, and constitute a part of,
this Supplement.
(d) "Services Descriptions" means Nortel Networks published specifications
for certain Services in effect at the time Nortel Networks accepts an Order.
(e) "Tools" mean any diagnostics, documentation, test equipment or other
items used by Nortel Networks in the performance of the Services.
2. CHARGES AND PAYMENT
Fees for Services may be based on a fixed price, time and materials, time and
materials with deliverables or other commercial arrangement, as specified in an
Order. Unless otherwise included as part of a fixed price and to the extent
authorized in the relevant Statement of Work, Customer will reimburse Nortel
Networks for all reasonable out-of-pocket expenses incurred by Nortel Networks
in performing the Services (including, without limitation, all reasonable
travel, meal, lodging and mileage expenses) Unless provided otherwise in a
Statement of Work, Nortel Networks shall invoice Customer one hundred percent of
the price of the Services upon completion unless the Service continues beyond
thirty days, in which case Nortel Networks shall invoice Customer at the end of
each month for the Services performed in that month. Certain ongoing Services
(for example maintenance and managed services) ordered by Customer may be
invoiced in advance of the performance of such Services by Nortel Networks.
3. CHANGES TO ORDERS AND CANCELLATIONS
The parties may, by mutual agreement, make changes to the scope of work,
schedule, prices, deliverables or other substantive aspects of the Services
("Change"). The party asking for a Change shall describe in writing the details
of the requested Change ("Change Order Request"). Nortel Networks shall provide
in writing to Customer a summary of any and all adjustments to the charges and
other changes resulting from the Change Order Request. In no event shall any
Change be effective or acted upon in any way until such time as (i) an
authorized representative of both parties has agreed to the terms of the Change
Order Request in writing and (ii) Nortel Networks receives an Order from
Customer for any additional amounts resulting from the Change Order Request.
After acceptance of an Order by Nortel Networks, Customer may in its sole
discretion by written notice to Nortel Networks prior to commencement of
services, cancel or suspend performance of Services of such Product or any
related Service ordered under this Agreement. Net2000 shall be
25
liable for all preparation charges incurred at the direction of Net2000, at
Nortel Networks' then standard charges, unless Nortel Networks declines to
fulfill the Order for any reason. If an order is delayed or suspended, but later
shipped, Net2000 shall be liable for such preparation charges. If Customer
cancels a Service after commencement of Service, Customer shall pay Nortel
Networks for those Materials delivered and services actually performed
specifically for Net2000 and or costs incurred in preparation to perform such
Services through the date of cancellation and reasonable actual costs to Nortel
Networks in connection with the terminating such Service; provided that, such
amount does not exceed the total price of the cancelled Service. The foregoing
shall be Nortel Network's sole remedy for delay, cancellation or suspension of
the delivery of a Product or Service by Customer.
In the event that there has been an event of default under the Financing
Agreement, Nortel Networks has the right to terminate an Order for Services or
suspend performance under an Order for Services, and Net2000 shall pay the
charges and costs specified above, notwithstanding that the Order may or may not
have been accepted under Section 2.1 of the Agreement.
4. NORTEL NETWORK RESPONSIBILITIES
Nortel Networks Personnel shall comply with reasonable site and security
regulations specified by Customer, in writing in advance where practicable, of
the performance of Services. Nortel Networks shall take reasonable precautions
to protect Products, buildings or structures and to perform Services with care
and due regard for the safety, convenience and protection of Customer and
members of the public in accordance with Specifications or Customer's practices
or handbooks provided to and agreed to by Nortel Networks in advance of signing
the applicable Statement of Work.
5. CUSTOMER RESPONSIBILITIES
Customer agrees to cooperate with Nortel Networks in the performance by Nortel
Networks of the Services, including, without limitation, providing Nortel
Networks with sufficient, free and timely access to facilities, data,
information and personnel of Customer; including the recovery by Nortel Networks
of any Tools. In addition, Customer shall be responsible for the accuracy and
completeness of all data and information that it provides or causes to be
provided to Nortel Networks. In the event that there are any delays by Customer
in fulfilling its responsibilities as stated above, or there are errors or
inaccuracies in the information provided, Nortel Networks shall be entitled to
appropriate, mutually agreed schedule and pricing adjustments.
6. PERSONNEL
Nortel Networks and Customer are each responsible for the supervision,
direction, compensation and control of their own employees and subcontractors.
Nortel Networks may subcontract any portion or all of the Services to
subcontractors selected by Nortel Networks.
Neither party shall knowingly solicit to hire employees of the other party who
are involved with the performance of the Services under this Agreement for a
period ending six months after such performance. Neither party shall be
precluded from conducting generalized searches for employees either through the
use of search firms or advertisements in the media, provided that searches are
not specifically targeted to employees providing Services.
All Nortel Network personnel shall be appropriately qualified and suitably
trained, experienced and skilled to provide the Nortel Network Services.
Nortel Network shall remove personnel from Customer sites in the event such
personnel violate the obligations of this section promptly upon receipt of
written notice of such violation. Nortel Network shall consider removing
personnel from Net2000 sites in the event for other reasonable
26
cause, promptly upon receipt of written notice of such violation, such request
for removal shall not be unreasonably denied.
Net2000 reserves the right to pre-approve all personnel assigned by Nortel
Networks to perform Nortel Networks' Services under the Purchase and License
Agreement. The schedule for the performance of any Services where Net2000
exercises its right to pre-approval of personnel will be adjusted commensurate
with the pre-approval and reasonable replacement process.
7. INFRINGEMENT
The provisions of Section 14 "Infringement" of the Purchase and License
Agreement shall apply to all Materials and work under this Services Supplement.
8. INTELLECTUAL PROPERTY RIGHTS
(a) Nortel Networks, on behalf of itself and its subcontractors, reserves
all proprietary rights in and to (i) all methodologies, designs, engineering
details, and other data pertaining to the Services and the Materials delivered,
(ii) all original works, computer programs, updates developed in the course of
providing the Service (except Customer's developed programs), (iii) discoveries,
inventions, patents, know-how and techniques arising out of the Services and
(iv) any and all products (including software and equipment) developed as a
result of the Services. The performance by Nortel Networks of Services shall not
be deemed work for hire.
(b) Nortel Networks grants to Customer a perpetual, non-exclusive,
world-wide, paid up license to use, copy and modify the Materials produced by
Nortel Networks and delivered to Customer in the performance of Services solely
for Customer's internal business purposes.
(c) It is understood between the parties that Nortel Networks will employ
its know-how, techniques, concepts, experience and expertise, as well as all
other intellectual property, including that to which it reserves its rights
hereunder, to perform services the same as or similar to the Services for
others; provided that Nortel Networks complies with the confidentiality
obligations in Section 13 the Purchase and License Agreement.
9. MAINTENANCE SERVICES
Nortel Networks provides Product maintenance Services either at Customer's
location or at a service center to keep Products in, or restore them to,
conformance with published specifications.
(a) To be eligible for maintenance Services, the Products must be in good
operating condition and at revision levels supported by Nortel Networks.
(b) Relocation of Products under maintenance Services may result in
adjustments to the price and response times.
The warranty service terms in Section 9 Warranty Service and exclusions in
Section 8.5 of the Purchase and License Agreement shall also apply to post
warranty Product maintenance Services.
10. GENERAL
In the event of a conflict between this Supplement and any other documents
attached hereto or referenced herein, the terms in this Supplement prevail.
11. PRICING AND AVAILABLE SERVICES
The Services to be provided and/or the applicable pricing shall be as set forth
in (i) an accepted Nortel Network's proposal, (ii) a Statement of Work or (iii)
the Services Descriptions.
