EXHIBIT 10.16
Agreement No. FT19901M
MASTER PURCHASE AGREEMENT
This Master Purchase Agreement ("Agreement"), effective as of the 31st day of
December, 1999, is entered into by and between FiberNet Telecom Group, Inc.
(hereinafter "FiberNet") with executive offices located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and Nortel Networks Inc. (hereinafter "Nortel
Networks"), with offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇.
WHEREAS, FiberNet is engaged in providing communication services and products,
and providing and maintaining public and private communication networks; and
WHEREAS, Nortel Networks, in conjunction with Nortel Networks Affiliates, 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 FiberNet; and
WHEREAS, FiberNet wishes to be able to purchase and/or license various products
and services for delivery and installation in the United States from Nortel
Networks, which FiberNet will use for its own internal use and not for resale or
as stock in trade and Nortel Networks is willing to sell and/or license such
products to FiberNet, 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) FiberNet has indicated 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.
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 FiberNet.
1.3 "Building Block(s)" shall mean those Software files provided by Nortel
Networks with Modifiable Software that are manipulatable or which may be
created by FiberNet with such Modifiable Software and which can be used,
created or manipulated by FiberNet to create Applications.
1.4 "Confidential Information" shall mean all information, including without
limitation, specifications, drawings, documentation, know-how and
pricing information, of every kind or description which may be disclosed
by one party to the other party in connection with this Agreement,
provided the disclosing party shall clearly ▇▇▇▇ all such information
disclosed in writing as the confidential property of the disclosing
party and, in the case of oral disclosure, the disclosing party shall
identify the confidential nature of any such information at the time of
such oral disclosure and shall provide a written summary labeled as
confidential of the orally disclosed information to the recipient within
fifteen (15) business days of such disclosure.
1.5 "Customer" shall mean entities to whom FiberNet provides communication
services as a result of FiberNet's use of the Products.
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1.6 "Customer Information" or "CI" shall mean the information provided by
FiberNet to Nortel Networks in order for Nortel Networks to engineer
and/or provide the components of Systems.
1.7 "Documentation" shall mean the documents which Nortel Networks generally
makes available to its customers containing descriptive, operating,
installation, engineering and maintenance information for Products,
including Specifications, as such documents may be amended from time to
time.
1.8 "Effective Date" shall mean the date this Agreement becomes effective
which shall be the date first identified above.
1.9 "Extension" shall mean Hardware and/or Software that is engineered by
Nortel Networks and added to an Initial System after the Turnover Date
of the Initial System.
1.10 "Hardware" shall mean, individually and collectively, the Nortel
Networks equipment listed in the Product Annexes of Exhibit A, and shall
be deemed to include any equipment which Nortel Networks adds to its
generally available Hardware price lists or so identifies to FiberNet in
a Quotation.
1.11 "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 Networks.
1.12 "Initial System" shall mean Hardware and Software, inclusive of a
central processor unit, included in a configuration which Nortel
Networks identifies as a System and which is initially engineered by
Nortel Networks and installed at a specific Installation Site.
1.13 "Installation Site" shall mean the location or facility identified in an
Order at which the applicable Products will be installed.
1.14 "Licensed Software" shall mean the Software that FiberNet has licensed
pursuant to this Agreement.
1.15 "Merchandise" shall mean any Hardware or other parts or components that
are not ordered as part of a System and with respect to which no
engineering, installation or other Services are provided by Nortel
Networks.
1.16 "Modifiable Software" shall mean Software, or a portion of Software that
is identified as such by Nortel Networks in its applicable
Documentation, which FiberNet may have certain rights to modify and
potentially create Applications or Building Blocks in accordance with
the applicable Documentation.
1.17 "Non-Licensed Software" shall mean Software for which FiberNet has not
yet obtained a license nor paid applicable right-to-use fees, but which
Software may be included with Software loads delivered to FiberNet
hereunder.
1.18 "Nortel Networks Affiliate" shall mean Nortel Networks' parent
corporation, Northern Telecom Limited and any corporation controlled
directly or indirectly by Northern Telecom Limited through the ownership
or control of shares or other securities in such corporation.
1.19 "Order" shall mean a numerically controlled purchase authorization
document issued by FiberNet to Nortel Networks specifying the types and
quantities of Products and Services to be furnished by Nortel Networks.
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1.20 "Product(s)" shall mean, individually and collectively, the Hardware,
Software, and Documentation.
1.21 "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.
1.22 "Quotation" shall mean a written budgetary or firm price quotation
issued by Nortel Networks to FiberNet for the supply of any Products or
Services pursuant to this Agreement.
1.23 "Service(s)" shall mean, individually and collectively, any of the
services set forth in this Agreement that FiberNet may acquire from
Nortel Networks, such as but not limited to maintenance, engineering,
installation, training, data management, program management, project
management, commissioning, testing, technical assistance Service with
respect to Products and installation, and consulting.
1.24 "Services Software" shall mean that Software and related documentation
made available by Nortel Networks that may be used by FiberNet for
estimation, planning or information purposes.
1.25 "Ship Date" shall mean the date as agreed to by the parties, on which a
Product ordered by FiberNet 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 to be downloaded to the System;
however, Ship Date shall not mean the date on which Non-Licensed
Software is activated.
1.26 "Software" shall mean (i) computer programs in object code form or
firmware which (a) are owned by, or licensed to, Nortel Networks, (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 Networks to FiberNet from time
to time, including both Licensed Software and Non-Licensed Software, but
in no event shall Nortel Networks have the obligation to license source
code.
1.27 "Software Release" shall mean Software or revisions to Software
containing problem fixes, new features and/or enhancements.
1.28 "Specifications" shall mean with respect to any Product the
specifications and/or practices set forth in Northern Telecom Practices
("NTPs") or similar documents published by Nortel Networks which Nortel
Networks identifies as the standard performance specifications and
practices for such Product.
1.29 "System" shall mean a configuration of Hardware and Software providing a
specified functionality and includes an Initial System and its
Extensions, if any.
1.30 "Third Party Hardware" shall mean any hardware not of Nortel Networks'
manufacture which shall be deemed to include any such hardware which
Nortel Networks adds to its generally available Third Party Hardware
price lists or so identifies to FiberNet in a Quotation. Nortel Networks
shall use commercially reasonable efforts to provide FiberNet with prior
written notice of any Third Party Software required for the use of the
Products.
1.31 "Third Party Software" shall mean any Software not owned by Nortel
Networks which is included within Licensed Software or Non-Licensed
Software. Nortel Networks shall use commercially reasonable efforts to
provide FiberNet with prior written notice of any Third Party Software
required for the use of the Products.
1.32 "Turnover" shall mean, with respect to any System installed by Nortel
Networks, that Nortel Networks has completed its standard manufacturing,
verification cycle, installation
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and/or agreed-upon test procedures, as applicable, and that the System
is ready for acceptance testing by FiberNet.
1.33 "Turnover Date" shall mean, with respect to any Product installed by
Nortel Networks hereunder, the date on which Nortel Networks provides a
notice of Turnover to FiberNet.
ARTICLE 2. SCOPE OF AGREEMENT
2.1 This Agreement sets forth the terms and conditions under which FiberNet
may order Products and/or Services from Nortel Networks. FiberNet may
use the Products itself, including use to provide services to others,
subject to the terms and conditions of this Agreement. FiberNet
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
inapplicable to a Product, the applicable terms and conditions and any
additional terms and conditions for such Product shall be set forth in a
Product Annex.
2.3.1 During the Initial Term as set forth in Section 13.1, FiberNet shall
purchase and take delivery of optical networks Products and Services
listed in Annex A.1 attached hereto ("Optical Products and Services").
FiberNet shall purchase and take delivery of Optical Products and
Services in the net minimum aggregate amounts of (i) Fifteen Million
Dollars ($15,000,000.00) in the first year of the Initial Term; (ii)
Twenty Million Dollars ($20,000,000.00) in the second year of the
Initial Term; and (iii) Twenty-five Million Dollars ($25,000,000.00) in
the third year of the Initial Term ("Optical Commitment"). For purposes
of the Optical Commitment, the first year of the Initial Term shall
begin upon the execution of this Agreement and conclude on December 31,
2000; the second year shall begin on January 1, 2001 and conclude on
December 31, 2001; and the third year shall begin on January 1, 2002 and
conclude on December 31, 2002.
2.3.2 In consideration of FiberNet's Optical Commitment, Nortel Networks shall
provide FiberNet with discounted pricing as set forth in Annex A.1
hereto, in addition to any training and/or services that may be set
forth in a quote in accordance with Section 3.6 of this Agreement.
2.3.3 The Optical Commitment shall be satisfied by the net total prices and
fees paid by FiberNet for such Optical Products and Services. Purchase
Orders that may have been submitted to Nortel Networks prior to the
execution of this Agreement shall count towards the first year of the
Optical Commitment.
2.3.4 In consideration of FiberNet's Optical Commitment, Nortel Networks shall
extend tier 4 pricing to FiberNet as set forth in Annex A.1, Schedule A.
In the event that FiberNet fails to meet its Optical Commitment by the
end of the first, or any subsequent, year of the Initial Term, FiberNet
shall pay to Nortel Networks, as liquidated damages and not as a
penalty, the difference between the total tier 4 prices paid during the
applicable year and the total of the applicable tier prices FiberNet
would have paid based on its actual cumulative purchases for such year
pursuant to the Tier Level Determination Table set forth in Annex A.1,
Schedule D. For example, if FiberNet's cumulative purchases at the end
of year 2 of the Initial Term equal Twenty-Five Million Dollars
($25,000,000), the applicable tier (based on Schedule D) would be tier
3, and FiberNet would be responsible for paying the difference between
total tier 4 prices actually paid and total tier 3 prices applicable for
its aggregate year 2 purchases. Nortel Networks shall invoice FiberNet
immediately upon expiration of each such year of the Initial Term for
such liquidated damages and such invoice shall be due and payable within
thirty (30) days of the date of such invoice. Nortel Networks agrees
that its sole and exclusive remedy under this Section 2.3.4 in the event
the Optical Commitment is not met by FiberNet shall be collection of the
liquidated damages specified herein.
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2.4 If specified in a Product Annex as a requirement, FiberNet shall,
fifteen (15) days prior to each calendar quarter, submit to Nortel
Networks a consolidated non-binding forecast of Products by geographic
region, that FiberNet 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.
2.5 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.
2.6 In the event FiberNet shall not have received financing for the purchase
of Products or Services hereunder on terms and conditions reasonably
acceptable to FiberNet by June 30, 2000 FiberNet shall have the right
until such time, but not the obligation, upon providing Nortel Networks
ten (10) business days prior written notice given prior to June 30, 2000
to terminate this Agreement in its entirety without cost, expense or
penalty to FiberNet (a "Special Termination"); provided that (i)
FiberNet will remain liable for any then outstanding Orders, and (ii)
notwithstanding anything contained in this Agreement to the contrary,
FiberNet will not be responsible for any price increases for purchased
and/or ordered Products due to FiberNet's failure to meet its minimum
purchase commitments set forth in Article 2 hereof due to any such
Special Termination, and (iii) subject to Section 13.3 (Term and
Termination).
ARTICLE 3. PLACEMENT OF ORDERS
3.1 To order Products and/or Services, FiberNet shall submit to such person
as Nortel Networks 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 Networks;
(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;
(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 FiberNet and accepted by Nortel
Networks in writing within fifteen (15) days after receipt of Order. In
the event Nortel Networks 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. Nortel Networks shall have the right to reject any
Order, or the applicable portion of such Order, placed hereunder where
FiberNet has a separate agreement with Nortel Networks for the provision
of the Products or Services requested in such Order or the Order is
otherwise not in accordance with this Agreement.
3.3 All Orders issued by FiberNet 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
Networks. Preprinted terms and conditions set forth in Orders issued by
FiberNet, or in any prior Quotations, acknowledgments or other related
documentation
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Agreement No. FT19901M
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 Networks, 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 FiberNet may at any time request additions, alterations, deductions or
deviations to an Order subject to the condition that such changes and
any adjustments resulting from such changes including, but not limited
to, schedules and prices, shall be mutually agreed upon and, if so
agreed, subsequently detailed in a written revision to the applicable
Order ("Change Order"). FiberNet acknowledges that a premium charge may
be applied by Nortel Networks should Nortel Networks agree to process a
Change Order outside of its standard Order processing cycle for a
Product or in the event that a Change Order requires an amount of
additional work (such as additional engineering) to be undertaken to
comply with such changes.
3.5 If FiberNet desires to receive a budgetary or firm Quotation from Nortel
Networks for a Product or Service, FiberNet shall submit such request in
writing to Nortel Networks' Director, Commercial Marketing, or such
other person as designated by Nortel Networks. The request for Quotation
shall include the information listed in Section 3.1, as applicable.
3.6 Nortel Networks shall respond 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 for one
hundred and twenty (120) 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. 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 FiberNet.
(ii) Firm Quotations
(a) the price to be paid by FiberNet for the Products, after
applying the applicable discounts, if any;
(b) fixed charges for Services requested;
(c) complete Hardware and Software lists and detailed and firm
project schedules; and
(d) any other information requested by FiberNet.
3.7 The Ship Date shall be based on Nortel Networks' standard intervals for
the applicable Product; however, the parties shall always mutually agree
on the Ship Date and take into consideration any unique aspect of the
applicable project.
3.8 Orders may be issued either electronically, such as through electronic
data interchange, or via traditional manual methods, as mutually agreed
to by the parties.
ARTICLE 4. PRICE AND PAYMENT
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Agreement No. FT19901M
4.1 Nortel Networks shall charge FiberNet for each Product and/or Service
ordered by FiberNet in accordance with the prices set forth in each
accepted Order, which prices shall be based upon prices identified in
one of (i) a Product Annex; (ii) a Firm Quotation; (iii) Except with
respect to optical Products listed in Annex A.1, Nortel Networks' then
current prices; or (iv) as specified elsewhere in this Agreement or as
otherwise mutually agreed in writing.
4.2 Nortel Networks' prices, if set forth in Exhibit A, may be revised by
Nortel Networks no more than once each calendar year, by providing sixty
(60) days prior written notice to FiberNet. If such price revisions
exceed an increase of ten percent (10%) in any such calendar year,
FiberNet may terminate the Agreement subject to Section 13.3 (Term and
Termination) subject to the proviso at the end of Section 2.6 (Scope of
Agreement), and such termination shall constitute a Special Termination
pursuant to Section 2.6, and such termination shall be governed by
Section 2.6. Such notice shall specify the effective date of the price
change and shall apply to all Orders received by Nortel Networks on or
after the effective date of the price change.
4.3 Nortel Networks shall promptly extend to FiberNet any price reductions
made by Nortel Networks 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.
4.4 For all Orders, Nortel Networks shall invoice FiberNet for Products and
Services as follows, unless otherwise agreed to in writing:
(i) for Systems, whether or not installation has been ordered from Nortel
Networks, ninety percent (90%) of the price of the Products on the
date Products are shipped, ten percent (10%) of the price of the
Products on the date of Acceptance, 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 Networks may invoice FiberNet
monthly for that portion of such Services which have been performed as
of such invoicing date. Except for invoices based on Acceptance
above, in the event of partial shipments against a single Order,
Nortel Networks shall issue no more than two (2) invoices for such
Order; the first upon initial Product shipment, the second upon
shipment of remaining Products.
(ii) for Merchandise or Documentation provided on a furnish-only basis,
one hundred percent (100%) of the price on the Ship Date; and (iii)
for Orders covering Services only, one hundred percent (100%) of the
price for such Services following completion of performance, except
for recurring support Services which shall be 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.
4.5 Each invoice shall be paid in full within thirty (30) days after the
date of such invoice. In the event that FiberNet does not pay an invoice
in full within such thirty (30) day period, then Nortel Networks may
charge FiberNet interest on the outstanding portion of such invoice,
from day thirty one (31) forward, at the rate of one percent (1.0%)
simple 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, FiberNet agrees to pay all
collection costs and reasonable legal fees incurred by Nortel Networks
as a result of late payment or non-payment by FiberNet.
ARTICLE 5. SHIPMENT, TITLE AND RISK OF LOSS
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Agreement No. FT19901M
5.1 Prior to the Ship Date, FiberNet 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 Networks by FiberNet 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 Networks shall be responsible for any storage fees, insurance
and demurrage costs incurred with respect to such rescheduled Orders.
5.2 Risk of loss and damage to Products shall pass to FiberNet upon delivery to
the loading dock at the Installation Site or other delivery location
specified by FiberNet in an Order. FiberNet shall keep such Products fully
insured for the total amount then due Nortel Networks for such Products.
FiberNet shall pay transportation charges, including insurance, associated
with the shipment of Products; however if the parties agree, Nortel
Networks 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. The charges therefore
shall be invoiced by Nortel Networks and paid by FiberNet to Nortel
Networks 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 FiberNet upon full payment to Nortel Networks
of the total amount payable by FiberNet for such Hardware ("Total Fee")
furnished by Nortel Networks in connection with such Hardware. Except as
provided in Section 15.4.3 prior to payment of the Total Fee for the
Products and Services in an Order, FiberNet 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 Networks, such consent not to
be unreasonably withheld.
5.4 Except as set forth in Article 5.1, if FiberNet notifies Nortel Networks
prior to a Ship Date that FiberNet 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 Networks to make delivery in
accordance with such date, or FiberNet fails to take delivery of any
portion of the Products in an Order when shipped, Nortel Networks may place
the applicable Products in storage. In that event, FiberNet shall be liable
for all additional actual costs (including storage costs), which additional
costs Nortel Networks shall use reasonable efforts to mitigate, thereby
incurred by Nortel Networks; however, if such costs are incurred solely due
to the fault or negligence of Nortel Networks, they shall be Nortel
Networks' responsibility. Delivery by Nortel Networks of any Products to a
storage location as provided above shall be deemed to constitute delivery
of the Products to FiberNet for purposes of this Agreement, including,
without limitation, provisions for payment, invoicing, passage of risk of
loss, and commencement of the warranty period.
5.5 Until the Total Fee is paid, FiberNet grants to Nortel Networks 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. FiberNet shall cooperate with Nortel Networks in preserving
and perfecting Nortel Networks' security interest in the Products and
FiberNet shall promptly (i) execute and deliver to Nortel Networks such
financing statements as Nortel Networks may reasonably require; and (ii)
execute and deliver to Nortel Networks such other agreements, documents and
instruments as Nortel Networks may reasonably require to perfect and
maintain the validity, effectiveness and priority of the security interest
created or intended to be created by this Agreement. FiberNet authorizes
Nortel Networks 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 FiberNet 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.
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5.6.1 FiberNet shall use reasonable efforts to provide Nortel Networks or its
subcontractors with access to its Installation Sites or other FiberNet
facilities during the times specified by Nortel Networks and as are
reasonably necessary for Nortel Networks to perform its obligations
hereunder. Nortel Networks shall be under no obligation to provide
Services where access is not granted. Nortel Networks shall comply with
FiberNet's reasonable site and security regulations of which Nortel
Networks is informed by FiberNet.
5.6.2 All sites at which the Products shall be delivered or installed shall be
prepared by FiberNet in accordance with reasonable commercial standards,
including such additional requirements as may be provided in writing by
Nortel Networks in advance, including, without limitation, environmental
requirements. Prior to and during installation, FiberNet shall ensure the
timely and adequate delivery, installation and functioning of the
electrical and communications connections and other reasonable
environmental requirements, including but not limited to, HVAC systems,
specified in Nortel Networks's applicable written instructions,
Specifications, Documentation or in a Product Annex.
5.6.3 FiberNet shall provide reasonable working space and facilities, including
heat, light, ventilation, telephones, electrical current, waste removal
and other necessary utilities for use by Nortel Networks personnel
performing installation or other Services, and adequate secure storage
space, if reasonably required by Nortel Networks, for Products and
materials. FiberNet shall also provide adequate security against theft,
damage or other loss for the Products while on FiberNet's Installation
Site or other delivery location specified by FiberNet.
5.6.4 FiberNet shall obtain all necessary governmental permits applicable to
FiberNet in connection with the installation, operation, and maintenance
of Products furnished hereunder, excluding any applicable permits
required in the normal course of Nortel Networks's doing business. Any
information which Nortel Networks reasonably requests from FiberNet and
which is necessary for Nortel Networks to properly install or maintain
the Products shall be provided by FiberNet to Nortel Networks in a timely
fashion and in a form reasonably specified by Nortel Networks.
5.7 If (i) due to the fault or negligence of Nortel Networks, shipment from
the factory of a Product listed in Annex A.1 ordered hereunder pursuant
to an accepted Order is delayed by more than ten (10) working days after
the scheduled Ship Date for that Order, or (ii) FiberNet has provided
written notice within (10) days of receipt of a Product that such Product
is not functional, and due to the fault or negligence of Nortel Networks
shipment from the factory of a replacement Product has not occurred
within 10 days of receipt of such notice; (in either case, the "Grace
Period"), then at FiberNet's election, Nortel Networks shall pay to
FiberNet, not as a penalty but as liquidated damages, an amount equal to
two percent (2.0%) of the purchase price of affected Product for each
period of seven (7) days (or portion thereof) between the end of the
Grace Period and the date on which such Product is actually shipped from
the factory by Nortel Networks, provided that such liquidated damages
shall not exceed fifteen percent (15%) of the purchase price of such
affected Product. Payment of liquidated damages shall be made in the form
of product credits issued to FiberNet for redemption against future
purchases or then-open Nortel Networks invoices, at FiberNet's sole
discretion, of Products listed in Annex A.1. The parties agree that
damages resulting from delays in delivery of Product would be impossible
to calculate accurately, and that the foregoing measure of liquidated
damages represents a fair accommodation as to resulting damages. FiberNet
agrees that if it elects liquidated damages under this provision, such
liquidated damage payment set forth herein constitutes its sole remedy in
connection with damages to the extent resulting from delays in delivery
of Product.
ARTICLE 6. TESTING, TURNOVER AND ACCEPTANCE
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Agreement No. FT19901M
6.1 If installation Services are ordered by FiberNet, Nortel Networks shall,
upon completion of such installation test the Products in accordance with
Nortel Networks' Turnover procedures and a mutually agreed test plan to
verify that such Products function substantially in accordance with the
applicable Specifications. Upon completion of such verification, Nortel
Networks shall provide to FiberNet a written notice of Turnover. FiberNet
shall be permitted an opportunity to have an appropriately qualified
individual in attendance to observe the performance of such tests and
Nortel Networks shall use reasonable efforts to give FiberNet seventy-two
(72) hours prior notice (which may be provided orally to FiberNet's Senior
Vice President of Network Engineering and Operations, or his/her designee)
of such tests, however, the absence of such FiberNet individual for any
reason shall not invalidate the tests nor be a reason for FiberNet to
withhold Acceptance.
6.2 Within thirty (30) calendar days after the Turnover Date, FiberNet shall
either accept the Product in writing by execution of a notice of
Acceptance, or notify Nortel Networks in writing, specifying in reasonable
detail those particulars in which, in FiberNet's opinion, the Product is
not in material conformance with the Specifications. If Acceptance does not
occur within such thirty (30) days after the Turnover Date and FiberNet has
not indicated to Nortel Networks in writing its basis for not accepting
such Product, then Acceptance shall be deemed to have occurred. The term
"material" as used in this Section 6.2, and Sections 6.3 and 6.6, shall
mean a service-affecting defect.
6.3 If Nortel Networks does not install Products furnished hereunder, Nortel
Networks shall, prior to delivery of the Products, perform such factory
tests as Nortel Networks determines to be appropriate in order to confirm
that such Products perform in material conformance with the applicable
Specifications. Upon FiberNet's request, Nortel Networks shall provide
written certification of such testing and compliance. In such case
Acceptance shall be deemed to have occurred upon the earlier of 1)
FiberNet's installation and commissioning of such Products, or 2) thirty
(30) days after the Ship Date. In the event FiberNet or any other entity
intends to perform installation of Products, (except for installation of
Products which are not permitted to be installed other than by Nortel
Networks, as specified in the applicable Product Annex or Documentation)
FiberNet or such entity may be required to complete prerequisite training
or certification prior to FiberNet being allowed to install such Products.
6.4 In the event FiberNet 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 that 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 FiberNet shall not unreasonably withhold Acceptance. Nortel Networks shall
correct any deficiencies identified by FiberNet in the manner described in
this Article whereby such Products do not materially conform to the
Specifications. When Nortel Networks has corrected all such deficiencies,
FiberNet shall accept the Products in writing. FiberNet'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, FiberNet shall execute Nortel Networks'
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:
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Agreement No. FT19901M
(i) Deficiencies of such Products resulting from causes not attributable
to Nortel Networks, Nortel Networks employees, agents or
subcontractors, such as, but not limited to (a) material change or
inaccuracy of Customer Information, (b) relevant inadequacy or
deficiencies of any relevant materials, information, facilities or
services provided directly or indirectly by FiberNet 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; or
(ii) Minor deficiencies or shortages with respect to such Products which
are attributable to Nortel Networks, but of a nature that do not
prevent operation of the Products in revenue-generating service.
6.9 With respect to any deficiencies of the type described in Section 6.8(i),
Nortel Networks shall at FiberNet's request and expense assist FiberNet in
the elimination or minimization of any such deficiencies. With respect to
any deficiencies or shortages as described in Section 6.8(ii), Nortel
Networks shall, at Nortel Networks' expense, correct any such deficiencies
or shortages within thirty (30) days of the date of Acceptance or as
otherwise agreed by the parties.
6.10 In the event FiberNet 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 6.8(i), Nortel Networks will
invoice FiberNet 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 actual travel and living
expenses incurred by such personnel. However Nortel Networks shall not
charge expenses for 1st class air travel, 1st class hotel or for
entertainment. Upon request Nortel Networks shall provide reasonable
detail to FiberNet for its travel and living expenses.
ARTICLE 7. ORDER CANCELLATION
7.1 If, prior to the Ship Date, FiberNet cancels all or any part of an Order,
FiberNet shall pay to Nortel Networks 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 that Nortel Networks substantially
customizes in accordance with a specific FiberNet request may not be
canceled.
ARTICLE 8. WARRANTY
8.1 Nortel Networks warrants that for a period of twenty-four (24) months from
the earlier of 1) Acceptance if installation Services are ordered from
Nortel Networks, or the date of installation and commissioning if
installation is not done by Nortel Networks, or 2) 90 days after Ship Date,
Hardware listed in Annex A.1 when used in accordance with the applicable
Specifications will be free from defective material and faulty workmanship
and shall comply with the applicable Specifications. The warranty period
for Merchandise shall be ninety (90) days 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 Networks warrants that any installation Services performed by Nortel
Networks will be free from defects in workmanship for a period of twelve
(12) months from the completion date of such Services.
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Agreement No. FT19901M
8.3 Nortel Networks warrants that any Licensed Software shall function during
the warranty period of the Hardware with respect to which such Licensed
Software is furnished without any service-affecting, non-conformance to the
applicable Specifications, and that generally available Licensed Software
shall be backward compatible with the immediately prior release of such
Licensed Software. Licensed Software that is delivered separately from
Hardware is warranted for a period of twelve (12) months from the
applicable Ship Date. If the Licensed Software fails to so function,
FiberNet's exclusive remedy and Nortel Networks' sole obligation under this
warranty is for Nortel Networks to correct such failure through, at Nortel
Networks' option, the replacement or modification of the Licensed Software
or such other actions as Nortel Networks reasonably determines to be
appropriate, all within a reasonable time. Any modification to the Software
not performed by Nortel Networks, or Nortel Networks' employees, agents or
subcontractors, 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 Networks will, within a reasonable period of time, repair, replace
or modify at its sole option the defective Hardware so that it
substantially complies with the applicable Specifications. The warranty
service shall be performed at the Installation Site or Nortel Networks'
facility as determined by Nortel Networks. If Nortel Networks is unable to
repair or modify the defective Hardware within a reasonable period of time
so that such Hardware conforms to the applicable Specification, Nortel
Networks shall replace the defective Hardware with Hardware that conforms
to such Specifications. Replacement Hardware may be new or reconditioned at
Nortel Networks' option; however, during the first ninety (90) days of the
warranty period, consistent with Nortel Networks' then-current practices,
new replacement Hardware listed in Annex A.1 will be provided. Nortel
Networks' sole obligation and FiberNet'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 Networks shall commence
upon the Ship Date of the repaired or replacement Hardware to FiberNet and
shall expire on the later of ninety (90) days or the last day of the
original warranty period with respect to the Hardware which was repaired or
replaced. The warranty period of Licensed Software which has been
corrected, due to a material, service-affecting non-conformance found in
such Licensed Software, shall expire on the later of ninety (90) days from
the Ship Date of the corrected Licensed Software to FiberNet or the last
day of the original warranty period with respect to such Licensed Software.
8.6 Nortel Networks warrants that its Products shall comply in all material
aspects with all applicable laws and regulations known to Nortel Networks,
which are in force on the date of acceptance of the applicable Order
therefor, which laws or regulations directly impose obligations upon any
manufacturer, seller or, if applicable, installer of such Products.
8.7 The performance by Nortel Networks 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 due to (i) accident, fire,
explosion, power failure, power surge or other power irregularity,
lightning, alteration, abuse, misuse where such event exceeded the
specified tolerances of the Products, or repair not performed by Nortel
Networks, or Nortel Networks' employees, agents or subcontractors; (ii)
improper storage; (iii) failure to comply with all applicable environmental
requirements for the Products as specified by Nortel Networks 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 by
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Agreement No. FT19901M
Nortel Networks or on Nortel Networks' behalf; (v) use in conjunction with
an incompatible product or a product not purchased under this Agreement;
(vi) any error, act or omission by anyone other than Nortel Networks; or
(vii) where written notice of the defect has not been given to Nortel
Networks 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 Networks shall assign to FiberNet
(to the extent of Nortel Networks' right to do so) the warranty rights
granted to Nortel Networks by the appropriate vendor of such Third Party
Software or Third Party Hardware.
8.9 Unless Nortel Networks elects to repair or replace defective Hardware at
FiberNet's facility, all Hardware to be repaired or replaced, whether in or
out of warranty, shall be de-installed and packed by FiberNet in accordance
with Nortel Networks' instructions. Nortel Networks shall use reasonable
efforts to ship repaired or replacement Hardware within thirty (30) days of
receipt of the defective Hardware. To facilitate the processing of the
defective Hardware returned hereunder, Nortel Networks will ship
replacement Hardware prior to Nortel Networks receiving the defective
Hardware in accordance with prevailing Nortel policies (including without
limitation those relating to problem severity and significance if any), but
in any event Nortel Networks shall us commercially reasonable efforts to
ship such replacement Hardware within twenty-four (24) hours after Nortel
Networks receives notice of a service-affecting Hardware outage, which
policies shall be provided to FiberNet upon request. In the event FiberNet
fails to return defective Hardware and Nortel Networks has shipped such
replacement Hardware, Nortel Networks shall invoice FiberNet at Nortel
Networks' applicable prices as set forth herein for such replacement
Hardware, thirty (30) days after the Ship Date of such replacement
Hardware. If mutually agreed, Nortel Networks will make repairs on-site at
Nortel Networks' then-current charge for such repairs.
8.10 If the Hardware returned to Nortel Networks pursuant to the immediately
preceding section is reasonably determined by Nortel Networks to be beyond
repair and is outside the warranty period, Nortel Networks shall notify
FiberNet and if requested Nortel Networks shall sell FiberNet replacement
Hardware at prices as set forth herein for such replacement Hardware.
8.11 FiberNet shall bear risk of loss or damage and shall pay for all
transportation charges for Hardware returned to Nortel Networks, and Nortel
Networks shall bear risk of loss or damage and pay for transportation
charges for repaired or replacement Hardware shipped to FiberNet. Title to
repaired Hardware shall pass to Nortel Networks upon receipt. Title to
replacement Hardware shall pass to FiberNet upon receipt.
8.12 Nortel Networks and Nortel Networks' vendors of Third Party Hardware and
Third Party Software, as appropriate, shall not have any responsibility to
Customers for warranties offered by FiberNet to such Customers and FiberNet
hereby indemnifies and holds harmless Nortel Networks and Nortel Networks'
vendors, as appropriate, from any claims, damages or liabilities to the
extent specifically arising out of any warranties offered by FiberNet to
such Customers.
8.13 THE WARRANTIES, CONDITIONS AND REMEDIES SET FORTH HEREIN CONSTITUTE THE
ONLY WARRANTIES, OBLIGATIONS OR CONDITIONS OF NORTEL NETWORKS WITH RESPECT
TO THE PRODUCTS AND SERVICES AND ARE FIBERNET'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 BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
8.14 Nortel Networks represents and warrants that both before and after January
1, 2000, any Software licensed by Nortel Networks to FiberNet under this
Agreement shall function,
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Agreement No. FT19901M
during the warranty period of the Nortel Product with which such Software
is provided, without any service-affecting nonconformance to the applicable
specifications. If the Software fails to so function, FiberNet's sole
remedy and Nortel Networks' sole obligation under this warranty is for
Nortel Networks to correct such failure through, at Nortel Networks'
option, the replacement or modification of the software or such other
actions as Nortel Networks reasonably determines to be appropriate.
Without limiting the generality of the immediately preceding paragraph,
Products may continue to use two digit year representations where such
representations do not constitute a service-affecting nonconformance to the
applicable Specifications. Nortel Networks shall not be responsible for
the failure of any Product to comply with the applicable specifications if
such failure was the result of (i) the combination of Nortel Products with
non-Nortel Networks Products; or, (ii) modification of a Product by
FiberNet or any other third party.
8.15 Nortel Networks warrants that its Products, and its performance of the
Agreement, shall comply in all material aspects with all applicable laws
and regulations known to Nortel Networks, which are in force on the date of
acceptance of the applicable Order therefor, which laws or regulations
directly impose obligations upon any manufacturer, seller or, if
applicable, installer of such Products.
ARTICLE 9. NORTEL NETWORKS' ADDITIONAL OBLIGATIONS
9.1 Nortel Networks shall make training available to representatives of
FiberNet with respect to the operation, configuration, installation,
service, maintenance and support of the Products at Nortel Networks' then
current prices and at Nortel Networks' facilities, subject to course and
class availability.
9.2 Upon request, Nortel Networks shall provide FiberNet with copies of its
then current training catalogue. Upon the request of FiberNet, Nortel
Networks shall provide to FiberNet such training as FiberNet 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 Networks shall include its standard Documentation package, if any,
with each shipment of Products. Nortel Networks shall make the
Documentation available on its choice of media, which may include CD-ROM or
other electronic media. Nortel Networks shall provide FiberNet with any
other Documentation that is ordered at its then-current prices therefor.
Documentation provided via Nortel Networks' 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, FiberNet may not press or
burn any copies of CD-ROM discs.
9.4 During the term of this Agreement, FiberNet may acquire various support
Services from Nortel Networks in connection with the Products FiberNet
acquires from Nortel Networks 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.
ARTICLE 10. SOFTWARE LICENSE
10.1 FiberNet acknowledges that the Software may contain programs that have
been supplied by, and are proprietary to, Third Party Software vendors. In
addition to the terms and conditions herein, FiberNet 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.
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Agreement No. FT19901M
10.2 Upon FiberNet's payment to Nortel Networks of the applicable fees as set
forth herein with respect to any Software furnished to FiberNet pursuant to
this Agreement, Nortel Networks hereby grants to FiberNet, subject to the
applicable terms and conditions of this Article 10, a personal, non-
exclusive, right and license to use the Licensed Software furnished to
FiberNet only in conjunction with FiberNet's use of the Hardware with
respect to which such Licensed Software was furnished for the life of that
Hardware as it may be repaired, replaced or modified. FiberNet shall be
granted no title or ownership rights to the Software, which rights shall
remain in Nortel Networks or its suppliers.
10.3 As a condition precedent to this license and to the supply of Software by
Nortel Networks pursuant to this Agreement, Nortel Networks requires
FiberNet to give proper assurances to Nortel Networks for the protection of
the Software. Accordingly, all Software supplied by Nortel Networks under
or in implementation of this Agreement shall be treated by FiberNet as the
exclusive property, and as proprietary and a trade secret, of Nortel
Networks and/or its suppliers, as appropriate, and FiberNet shall: (i) hold
the Software, including, without limitation, any methods or concepts
utilized therein in confidence for the benefit of Nortel Networks 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
and then only under confidentiality obligations; (iii) not reproduce, copy,
or modify the Software in whole or in part except as authorized by Nortel
Networks; (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 FiberNet's obligations under this license; and (vi)
forthwith return to Nortel Networks, or with Nortel Networks' consent
destroy (a) upon termination of the license for any reason, 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, but not limited to all printed
material furnished by Nortel Networks to FiberNet.
10.4 The obligations of FiberNet 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 FiberNet.
10.5 Nortel Networks may issue updates to the Software from time to time, and
upon FiberNet's payment of applicable right to use fees, if any, shall
license such updates to FiberNet. The right to use fees for updates do not
include the price of any associated Hardware that may be required.
10.6 Neither FiberNet nor any successor to FiberNet's title in the applicable
Hardware shall have the right to (i) assign this license as to the
applicable Licensed Software to any other person who acquires 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 Networks
and FiberNet. Such consent shall not be unreasonably withheld or delayed.
10.7 FiberNet shall indemnify and hold Nortel Networks and its suppliers, as
appropriate, harmless from any loss or damage resulting from a breach of
this Article 10. The obligations of FiberNet under this Article 10 shall
survive the termination of the Agreement and shall continue if the Software
is removed from service.
Non-Licensed Software
---------------------
10.8 Certain Software delivered by Nortel Networks 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. FiberNet shall
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Agreement No. FT19901M
submit to Nortel Networks an Order for any Non-Licensed Software that
FiberNet desires to license or renew .
10.9 When Non-Licensed Software is placed into service, the applicable right to
use fees shall be payable. FiberNet 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.
10.10 Nortel Networks may from time to time request FiberNet to provide a
certification that actual use of the Products is in compliance with the
terms of this Agreement. With fifteen (15) business days advance notice
FiberNet will allow Nortel Networks reasonable access to its facilities
during regular business hours in connection with performing a mutually
agreed upon audit provided the scope of such audit shall be sufficient to
enable Nortel Networks to verify FiberNet's use of the Products is in
compliance with the Agreement, but in no event will such audit, or Nortel
Networks' performance thereof, interfere with FiberNet's business
operations or its systems.
10.11 Nortel Networks shall issue invoices to FiberNet, in addition to those
amounts previously invoiced, for amounts found to be payable as a result
of FiberNet's activation and/or usage of any Software which Nortel
Networks determines as a result of the audit of a site and for which
FiberNet has not previously paid the appropriate right to use fee.
10.12 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 FiberNet or the date FiberNet pays any
applicable right to use fees.
Modifiable Software
-------------------
10.15.1 Notwithstanding anything to the contrary above, upon payment to Nortel
Networks of the fees as set forth herein, Nortel Networks hereby grants
to FiberNet, subject to the applicable terms and conditions of this
Article 10, a personal, non-transferable, non-assignable and non-
exclusive right and license to modify Licensed Software which Nortel
Networks identifies as Modifiable Software. Upon the modification or
creation of any Applications, or the modification or creation of any
Building Blocks, Nortel Networks shall have no obligations with regard
to warranty under Article 8 or indemnity under Article 11 for such
Applications or Building Blocks with respect to any such created or
modified Applications or Building Blocks.
10.15.2 Nothing contained in Sections 10.15.1 - 10.15.5 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 Networks does not in any way transfer any right, title or
interest in or to the Software or any element constituting a portion
thereof to FiberNet, other than the right of FiberNet to modify or
create Building Blocks and Applications.
10.15.3 For any Building Blocks and Applications created solely by FiberNet, and
for all FiberNet-modified portions of the Nortel Networks-provided
Building Blocks with respect to such modified portion only, FiberNet
shall own all forms of intellectual property rights (including but not
limited to patent, trade secret, copyright and mask rights) pertaining
to such Applications, Building Blocks or portions thereof and shall have
the right to file for or otherwise secure and protect such rights. For
all such FiberNet 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 FiberNet may desire to
license any such Applications or Building Blocks to Nortel Networks.
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Agreement No. FT19901M
10.15.4 For any Applications created solely by Nortel Networks, and for the
Nortel Networks-provided Building Blocks, Nortel Networks shall own all
forms of intellectual property rights (including but not limited to
patent, trade secret, copyright and mask rights) pertaining to such
Applications or Building Blocks and shall have the right to file for or
otherwise secure and protect such rights. For all such Nortel Networks
Applications or Building Blocks, FiberNet may license any such
additional Nortel Networks Products upon Nortel Networks making such
software generally available to its customers.
10.15.5 In the event FiberNet and Nortel Networks intend to jointly create
Applications or Building Blocks, the parties shall mutually agree as to
applicable terms and conditions.
Services Software
-----------------
10.16.1 With respect to Services Software, FiberNet shall: (i) utilize such
Services Software and the results thereof solely for estimation,
planning or information purposes; and (ii) comply with additional terms,
if any, applicable to such Services Software as specified in a Product
Annex. Nortel Networks may, at any time and without liability or
obligation to FiberNet, modify the Services Software, any computer
equipment of Nortel Networks 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.
10.16.2 SERVICES SOFTWARE IS PROVIDED AS IS AND WITHOUT WARRANTY OR CONDITION OF
ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. NORTEL NETWORKS 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.
ARTICLE 11. LIABILITY FOR BODILY INJURY, PROPERTY DAMAGE AND PATENT
INFRINGEMENT
11.1 A party hereto shall defend the other party against any suit, claim, or
proceeding brought against the other party for direct damages due to
bodily injuries (including death) or damage to tangible property which
allegedly result from Hardware product liability or the negligence or
willful misconduct of the defending party in the performance of this
Agreement. The defending party shall pay all litigation costs,
reasonable attorney's fees, settlement payments and such direct damages
awarded or resulting from any such suit, claim or proceeding.
11.2 Nortel Networks shall defend FiberNet against any suit, claim or
proceeding brought against FiberNet alleging that the sale to, or use by
FiberNet of, any Products, excluding Third Party Hardware or Third Party
Software, furnished hereunder infringes any patent ("Infringement
Claim"). Upon the request of FiberNet Nortel Networks shall immediately
assume the defense of any such Infringement Claim in which case Nortel
Networks shall 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 Networks shall assign any
rights with respect to infringement of patents granted to Nortel
Networks by the supplier of such items to the extent of Nortel Networks'
right to do so.
11.3 Nortel's cumulative liability, pursuant to this Article 11 and including
its costs and expenses incurred in satisfying its obligations set forth
below, shall not exceed one hundred percent (100%) of the purchase price
of the Products giving rise to the claim. Notwithstanding the preceding
sentence, and solely with respect to Nortel Networks' cumulative
liability pursuant to Section 11.2, and including its costs and expenses
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Agreement No. FT19901M
incurred in satisfying its obligations pursuant to Section 11.2, shall not
exceed two hundred and fifty million dollars ($250,000,000).
11.4 Nortel Networks shall not be liable and FiberNet shall indemnify Nortel
Networks for any costs incurred by Nortel Networks or liabilities of Nortel
Networks arising under this Article in excess of the amounts so stated
above.
11.5 Nortel Networks 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 Networks in accordance with
any written design or any special written instruction furnished by
FiberNet; (ii) is used by FiberNet in a manner or for a purpose not
contemplated by this Agreement; (iii) is used by FiberNet in combination
with other products not contemplated by this Agreement, any applicable
Product Annex or any applicable Specifications, including, without
limitation, any software developed solely by FiberNet through the permitted
use of Products furnished hereunder, to the extent the Infringement Claim
arises from such combination or the use thereof; or (iv) is modified by
FiberNet where such modification is not authorized by Nortel Networks. In
the excepted cases stated above, FiberNet shall indemnify and hold Nortel
Networks harmless against any loss, cost, expense, damage, settlement or
other liability, including, but not limited to, attorneys' fees, which may
be incurred by Nortel Networks with respect to any suit, claim, or
proceeding described in this Section 11.5.
11.6 Nortel Networks shall not be liable for, and FiberNet shall indemnify
Nortel Networks in respect of, any damages awarded based on FiberNet's
willful infringement of a patent, copyright, trade secret, trademark or
other proprietary right where such infringement results in a pecuniary
damage award.
11.7 Nortel Networks may provide FiberNet with notice of an actual or potential
Infringement Claim. Nortel Networks shall consult with FiberNet regarding
the Infringement Claim and the course of action to be pursued as a result
thereof. In the event the parties fail to agree on a satisfactory course of
action for dealing with the matter, FiberNet may either:
(i) return to Nortel Networks the affected portion of the Product(s) in
return for a refund of the depreciated value (as carried on the books
of FiberNet) of the Product(s) so returned; or
(ii) continue to use the Product(s) at FiberNet's own risk.
11.8 Nortel Networks shall not be liable for, and FiberNet shall indemnify
Nortel Networks in respect of any Infringement Claim(s) where Nortel
Networks has provided notice to FiberNet of the Infringement Claim(s) and
FiberNet elects to continue its use of the Product(s) covered by the
Infringement Claim to the extent damages arise out of such continued use.
11.9 If as a result of an Infringement Claim, other than those contemplated
above, an injunction is obtained against FiberNet's use of any Product,
Nortel Networks shall, at Nortel Networks' option:
(i) procure for FiberNet the right to continue using the alleged
infringing Product(s);
(ii) replace or modify the same with equivalent or better Product(s) so
that FiberNet's use is non-infringing; or
(iii) accept return of the affected portion of the Product(s) and refund
to FiberNet the depreciated value (as carried on the books of
FiberNet) of the Product(s) so returned.
11.10 The defense of any claim that 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
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Agreement No. FT19901M
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.
11.11 FiberNet shall waive any and all claims that FiberNet may have against
Nortel Networks that FiberNet may have to the extent arising from any
modification FiberNet may have made to a Product, or Modifiable Software.
Further, FiberNet shall be responsible for any additional hardware,
software or services required as a result of such modifications.
11.12 THE REMEDIES SET FORTH IN THIS ARTICLE 11 ESTABLISH THE ENTIRE OBLIGATION
OF THE PARTIES IN REGARD TO CLAIMS RELATING TO INTELLECTUAL PROPERTY
RIGHTS INCLUDING CLAIMS DIRECTED TO THE INFRINGEMENT OF PATENTS,
COPYRIGHT, TRADE SECRETS AND OTHER PROPRIETARY RIGHTS.
ARTICLE 12. REMEDIES AND LIMITATION OF LIABILITY
12.1 Nortel Networks shall have the right to suspend its performance, upon
written notice to FiberNet, and forthwith remove and take possession of
all Products that shall have been delivered to FiberNet, if, prior to
payment to Nortel Networks of any amounts due pursuant to this Agreement
with respect to such Products, FiberNet shall (i) become 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.
12.2 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.
12.3 NOTWITHSTANDING ANYTHING TO THE CONTRARY, EXCEPT FOR FIBERNET'S BREACH OF
ARTICLE 10 (SOFTWARE LICENSE) OR EITHER PARTY'S BREACH OF ARTICLE 14
(CONFIDENTIALITY), AND EXCEPT FOR DAMAGES AWARDED TO A THIRD PARTY
PURSUANT TO ARTICLE 11 (LIABILITY FOR BODILY INJURY, PROPERTY DAMAGE AND
PATENT INFRINGEMENT), NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT
LIMITATION.
12.4 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 FiberNet of any prices, charges, fees or other amounts actually due and
payable hereunder may be brought by Nortel Networks at any time permitted
by applicable law, and Nortel Networks may suspend performance of any of
its obligations hereunder until all such payments are made.
ARTICLE 13. TERM AND TERMINATION
13.1 This Agreement will be in effect from the Effective Date until December
31, 2002 (the "Initial Term"). Thereafter, this Agreement shall
automatically renew for one (l) year terms (each, a "Subsequent Term"),
unless either party provides the other party with written
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Agreement No. FT19901M
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 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, excluding the Optical Commitment, 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.
ARTICLE 14. CONFIDENTIALITY
l4.1 Each party which receives the other party's Confidential Information shall
use reasonable care to hold such Confidential Information in confidence and
not disclose such Confidential Information to anyone other than to its
employees and employees of a Nortel Networks Affiliate, FiberNet's
affiliates agents or consultants under obligation of confidentiality, as
applicable, with a need to know. A party that receives the other party's
Confidential Information shall not reproduce such Confidential Information,
except to the extent reasonably required for the performance of its
obligations pursuant to this Agreement and in connection with any permitted
use of such Confidential Information.
14.2 FiberNet shall take reasonable care to use Nortel Networks' Confidential
Information only for study, operating, or maintenance purposes in
connection with FiberNet's use of Products furnished by Nortel Networks
pursuant to this Agreement.
14.3 Notwithstanding the foregoing, either party shall be free to use that
portion of the 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
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 a recipient can demonstrate
through written documentation was already known to the recipient prior to
its disclosure to the recipient
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Agreement No. FT19901M
and without confidential obligations was known or generally available to
the public at the time of disclosure to the recipient, becomes known or
generally available to the public (other than by act of the recipient)
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, is
independently developed by recipient, or is required to be disclosed by
subpoena or other process of law, provided that the recipient shall notify
the disclosing party promptly of any such subpoena or other process of law
requiring disclosure.
14.5 This Agreement shall be considered Confidential Information between the
parties.
ARTICLE 15. MISCELLANEOUS
15.1 Publicity. 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. Notwithstanding anything contained in this Agreement to the
contrary, FiberNet will have the right to disclose this Agreement, or any part
hereof, to any party(s) providing and/or proposing to provide financing (equity
or debt) to FiberNet or its subsidiaries. However, if FiberNet discloses the
Agreement in connection with a financing, such disclosure must be subject to an
obligation of confidentiality. Furthermore, FiberNet will have the right to
disclose this Agreement in accordance with applicable securities laws provided
that it will use reasonable efforts (in coordination with the other party) to
seek confidential treatment of any pricing or other sensitive and confidential
terms set forth in this Agreement in the event of any such disclosure required
by applicable securities laws.
15.2 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 New York, except for its rules with regard to the conflict
of laws.
15.3 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.
15.4 Assignment.
-----------
15.4.1 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 FiberNet shall not be
deemed an assignment hereunder. FiberNet's consent shall not be
required for any assignment or transfer by Nortel Networks (i) to
any Nortel Networks Affiliate of all or any part of this Agreement
or of Nortel Networks' rights hereunder; or (ii) to any third party
of Nortel Networks' right to receive any monies ("Receivables")
which may become due to Nortel Networks pursuant to this Agreement.
15.4.2 FiberNet hereby consents to the sale of Receivables by Nortel
Networks without the necessity for any further notice and without
any qualification on such consent. FiberNet grants permission for
Nortel Networks 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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Agreement No. FT19901M
15.4.3 Notwithstanding anything contained in this Agreement to the
contrary, FiberNet will have the right to assign (by way of
collateral assignment or otherwise) this Agreement and/or its rights
hereunder to any financing party of FiberNet or any of its
subsidiaries (a "Financing Party"). This right shall include, but
will not be limited to, the right to collaterally assign this
Agreement, affect a sale - leaseback transaction with respect to
this Agreement and/or the Products hereunder and/or any other
financing arrangement intended to finance the purchase of Products
and/or Services hereunder. Upon receiving written notice from
FiberNet, Nortel Networks will take any and all reasonable actions,
including without limitation execution of appropriate documentation,
in furtherance of the terms of this provision. Furthermore, to the
extent any Financing Party requests a reasonable modification or
supplement to this Agreement or the terms hereof in order to
consummate any such financing, Nortel Networks will cooperate with
FiberNet and any such Financing Party to make such modification or
supplement to the extent such modification or supplement is
reasonable and does not adversely affect Nortel Network's rights
hereunder; provided that a Financing Party request to have the right
to cure FiberNet breaches or defaults hereunder shall be deemed
reasonable and shall in no event be deemed to adversely affect
Nortel Networks' rights hereunder. FiberNet agrees that any such
assignment shall not relieve FiberNet of any obligations hereunder
and that it shall remain responsible for the due performance
thereof.
15.5 Subcontracting. Nortel Networks may subcontract any of its obligations
---------------
under this Agreement, but no such subcontract shall relieve Nortel Networks
of responsibility for performance of its obligations.
15.6 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.
15.7 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 Networks and FiberNet, 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.
15.8 Force Majeure. If the performance by a party of any of its obligations
--------------
under this Agreement shall be interfered with by reason of any
circumstances beyond the reasonable control of that party, including
without limitation, fire, explosion, acts of God, war, revolution, civil
commotion, unavailability of supplies or sources of energy, power failure,
breakdown of machinery, delays regarding zoning, easements or deed
restrictions, any legal proceedings between parties unrelated to the
parties hereto or labor difficulties, including without limitation,
strikes, slowdowns, picketing or boycotts, then that party shall be excused
from such performance for a period equal to the delay resulting from the
applicable circumstances and such additional period as may be reasonably
necessary to allow that party to resume its performance. In the event such
a force majeure condition continues for more than one hundred and twenty
(120) days, either party may terminate the Agreement with respect to future
Orders subject to Section 13.3 (Term and Termination). 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.
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Agreement No. FT19901M
15.9 Taxes. FiberNet shall at Nortel Networks' direction promptly reimburse
------
Nortel Networks or pay directly to the applicable government or taxing
authority all taxes and charges arising hereunder, including, without
limitation, penalties and interest, except for taxes computed upon the net
income of Nortel Networks. If FiberNet provides Nortel Networks with a
certificate of exemption for the applicable taxes, in a timely manner, then
Nortel Networks shall not invoice FiberNet for such taxes.
15.10 Hazardous Materials.
--------------------
15.10.1 Prior to issuing any Order for Services to be performed at
FiberNet's facilities, FiberNet shall identify and notify Nortel
Networks in writing of the existence of all Hazardous Materials
which Nortel Networks may encounter during the performance of such
Services, including without limitation, any Hazardous Materials
contained within any equipment to be removed by Nortel Networks.
15.10.2 If FiberNet breaches its obligations pursuant to the immediately
preceding paragraph, (i) Nortel Networks may discontinue the
performance of the applicable Services until all the Hazardous
Materials have been removed or abated to Nortel Networks'
satisfaction by FiberNet at FiberNet's sole expense; and (ii)
FiberNet shall defend, indemnify and hold Nortel Networks harmless
from any and all damages, claims, losses, liabilities and
expenses, including without limitation, attorney's fees, which
arise out of FiberNet's breach of such obligations subject to
Nortel Networks providing notice of any such claims, reasonable
assistance in connection with the defense of such claims, and
permitting FiberNet to control the defense of any such claims.
15.11 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 addressed as follows:
If to FiberNet: FiberNet Telecom Group, Inc.
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▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, COO; phone: ▇▇▇-▇▇▇-▇▇▇▇
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Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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With copy to FiberNet counsel:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Mintz, Levin, Cohn, Ferris, Clovsky and Popeo, PC
If to Nortel Networks: Nortel Networks
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▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇
-----------------------------------------------
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Attention: VP, Optical Products
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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Either party hereto may change its address by a notice given to the other
party hereto in the manner set forth above.
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Agreement No. FT19901M
15.12 Information and Documentation. FiberNet shall provide any information
------------------------------
and/or documentation that Nortel Networks reasonably requests from
FiberNet and that is necessary for Nortel Networks to properly perform
any of its obligations hereunder.
15.13 Export. FiberNet shall not export any Products or technical data received
-------
from Nortel Networks 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 Networks.
FiberNet shall obtain all government authorizations, in accordance with
applicable law prior to exporting or transmitting any such Products or
technical data. Subject to Section 15.9 (Taxes) with respect to Federal,
State or local sales or use taxes, Nortel Networks is solely responsible
for all export/import obligations, taxes, fees or duties with respect to
the use or sale of the Products within the United States.
15.14 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.
15.15 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.
15.16 Regulatory Compliance. Except with respect to Orders received by Nortel
----------------------
Networks, in the event of any change in the Specifications or Nortel
Networks' manufacturing or delivery processes for any Products as a
result of the imposition of requirements by any government, Nortel
Networks may upon notice to FiberNet, increase its prices, charges and
fees to cover the added costs and expenses directly and indirectly
incurred by Nortel Networks as a result of such change. This provision
15.16 shall not apply with respect to Orders already received by Nortel
Networks.
15.17 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. FiberNet hereby
acknowledges and agrees that it has not relied on any representations or
warranties other than those expressly set forth in this Agreement.
15.18 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
(remainder of page intentionally left blank)
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Agreement No. FT19901M
shall survive the termination or expiration of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement.
NORTEL NETWORKS INC. FIBERNET TELECOM GROUP, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------- -----------------------------------------
(Signature) (Signature)
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------- ---------------------------------------
(Print) (Print)
Title: VP of Optical Networks Title: SVP-Engineering and Network
---------------------------------------- ---------------------------------------
Date: 12/31/99 Date: 12/31/99
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25
