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EXHIBIT 10.21
MASTER PURCHASE AGREEMENT
CONFIDENTIAL TREATMENT REQUESTED
PRIVILEGED and CONFIDENTIAL
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I3S, INC.
MPA
MASTER PURCHASE AGREEMENT
BETWEEN
I3S, INC.
AND
NORTEL NETWORKS INC.
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I3S, INC.
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TABLE OF CONTENTS
ARTICLES:
Article 1 - Definitions
Article 2 - Scope of Agreement
Article 3 - Placement of Orders
Article 4 - Price and Payment
Article 5 - Shipment, Title and Risk of Loss
Article 6 - Testing, Turnover and Acceptance
Article 7 - Order Cancellation
Article 8 - Warranty
Article 9 - Nortel's Additional Obligations
Article 10 - Software License
Article 11 - Liability for Bodily Injury, Property Damage and Patent
Infringement
Article 12 - Remedies and Limitation of Liability
Article 13 - Term and Termination
Article 14 - Confidentiality
Article 15 - Miscellaneous
EXHIBITS:
Exhibit A - Product Annexes Including Lists of Product and Prices
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MASTER PURCHASE AGREEMENT
This Master Purchase Agreement ("Agreement"), effective as of the 15th day of
July, 1999, is entered into by and between I3S, INC. (hereinafter "Company "),
a Texas corporation with offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ and Nortel Networks Inc. (hereinafter "Nortel"), a Delaware corporation
with offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
WHEREAS, Company is engaged in providing communication services and products,
and providing and maintaining public and private communication networks; and
WHEREAS, Nortel, in conjunction with Nortel 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 Company; and
WHEREAS, Company wishes to be able to purchase and/or license various products
and services for delivery and installation in the United States from Nortel,
which Company intends to use for its own internal use and not for resale or as
stock in trade, and Nortel is willing to sell and/or license such products to
Company, subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth, the parties agree as follows:
ARTICLE 1. DEFINITIONS
The following words shall have the meanings set forth below. Words in the
singular shall be held to include the plural and vice versa, and words of gender
shall be held to include the other gender as the context requires.
1.1 "Acceptance" shall mean that either (i) Company has indicated 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 Company.
1.3 "Bay Products" shall mean the Products listed in Attachment 1 to this
Agreement or as may be subsequently identified as data transmission products
designed, manufactured or sold by the Bay Networks division of Nortel Networks.
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1.4 "Building Block(s)" shall mean those Software files provided by Nortel
with Modifiable Software that are manipulatable or which may be created by
Company with such Modifiable Software and which can be used, created or
manipulated by Company to create Applications.
1.5 "Confidential Information" shall mean all information, including
without limitation, specifications, drawings, documentation, know-how and
pricing information, of every kind or description which may be disclosed by one
party to the other party in connection with this Agreement; provided that, the
disclosing party shall clearly ▇▇▇▇ all such information disclosed in writing as
the confidential or proprietary property of the disclosing party and, in the
case of oral disclosure, the disclosing party shall identify the confidential or
proprietary nature of any such information at the time of such oral disclosure
and shall provide a written summary (labeled as confidential or proprietary) of
the orally disclosed information to the recipient within fifteen (15) business
days following such disclosure.
1.6 "Customer" shall mean entities to whom Company provides communication
services as a result of Company's internal use of the Products.
1.7 "Customer Information" or "CI" shall mean the information provided by
Company to Nortel in order for Nortel to engineer and/or provide the components
of Systems.
1.8 "Documentation" shall mean the documents which Nortel generally makes
available to its customers containing descriptive, operating, installation,
engineering and maintenance information for Products, including Specifications,
as such documents may be amended from time to time.
1.9 "Effective Date" shall mean the date this Agreement becomes effective
which shall be the date first identified above.
1.10 "Extension" shall mean Hardware and/or Software which is engineered by
Nortel and added to an Initial System after the Turnover Date of the Initial
System.
1.11 "Hardware" shall mean, individually and collectively, the Nortel
equipment listed in the Product Annexes of Exhibit A, and shall be deemed to
include any equipment which Nortel adds to its generally available Hardware
price lists or so identifies to Company in a Quotation.
1.12 "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
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seq.), and any other federal, state or local environmental law, ordinance, rule
or regulation or equivalent law or regulation in the location to which the
Product is shipped by Nortel.
1.13 "Initial System" shall mean Hardware and Software, inclusive of a
central processor unit, included in a configuration which Nortel identifies as a
System and which is initially engineered by Nortel and installed at a specific
Installation Site.
1.14 "Installation Site" shall mean the location or facility identified in
an Order at which the applicable Products will be installed.
1.15 "Licensed Software" shall mean the Software which Company has licensed
pursuant to this Agreement.
1.16 "Merchandise" shall mean any Hardware or other parts or components
which are not ordered as part of a System and with respect to which no
engineering, installation or other Services are provided by Nortel as part of
the price of that Merchandise.
1.17 "Modifiable Software" shall mean Software, or a portion of Software
that is identified as such by Nortel in its applicable Documentation, which
Company may have certain rights to modify and potentially create Applications or
Building Blocks in accordance with the applicable Documentation.
1.18 "Non-Licensed Software" shall mean Software for which Company has not
yet obtained a license nor paid applicable right to use fees, but which Software
may be included with Software loads delivered to Company hereunder.
1.19 "Nortel Affiliate" shall mean Nortel's parent corporation, Nortel
Networks Corporation and any corporation controlled directly or indirectly by
Nortel Networks Corporation through the ownership or control of shares or other
securities in such corporation.
1.20 "Nortel Networks Products" shall mean telephony or data transmission
Products manufactured, designed, and sold by Nortel Networks.
1.21 "Order" shall mean a numerically controlled purchase authorization
document issued by Company to Nortel specifying the types and quantities of
Products and Services to be furnished by Nortel.
1.22 "Product(s)" shall mean, individually and collectively, Bay Products
and Nortel Networks Products Hardware, Software, and Documentation.
1.23 "Product Annex" shall mean, with respect to a specific Product,
additional or modified terms and conditions as set forth in Exhibit A, inclusive
of but not limited to
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those that may apply to any Third Party Hardware or Third Party Software, unique
to such Product.
1.24 "Quotation" shall mean a written budgetary or firm price quotation
issued by Nortel to Company for the supply of any Products or Services pursuant
to this Agreement.
1.25 "Service(s)" shall mean, individually and collectively, any of the
services set forth in this Agreement that Company may acquire from Nortel, 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.
1.26 "Services Software" shall mean that Software and related documentation
made available by Nortel which may be used by Company for estimation, planning
or information purposes.
1.27 "Ship Date" shall mean the date as agreed to by the parties, on which
a Product ordered by Company is shipped from Nortel's facility or, in the case
of Software which is downloaded, the date upon which such Software is to be
downloaded to the System; however, Ship Date shall not mean the date on which
Non-Licensed Software is activated.
1.28 "Software" shall mean (i) computer programs in object code form or
firmware which (a) are owned by, or licensed to, Nortel, (b) reside in Product
memories, tapes, disks or other media, and (c) provide basic logic operating
instructions and user-related application instructions; and (ii) documentation
associated with such computer programs, which may be furnished by Nortel to
Company from time to time, including both Licensed Software and Non-Licensed
Software, but in no event shall Software include source code.
1.29 "Software Release" shall mean Software or revisions to Software
containing problem fixes, new features and/or enhancements.
1.30 "Specifications" shall mean with respect to any Product the
specifications and/or practices set forth in Nortel Networks Practices ("NTPs")
or similar documents published by Nortel which Nortel identifies as the standard
performance specifications and practices for such Product.
1.31 "Statement of Work" shall mean a document that describes the scope,
activities, schedule, prices, deliverables (including, but not limited to, any
drawings, specifications, reports, designs, and test results to be prepared or
produced by Nortel Networks) related to, and/or any additional terms and
conditions pertaining to, such Customized Service(s) as may, from time to time,
be mutually agreed to in writing by Company and Nortel Networks pursuant to this
Agreement.
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1.32 "System" shall mean a configuration of Hardware and Software providing
a specified functionality and includes an Initial System and its Extensions, if
any.
1.33 "Third Party Hardware" shall mean any hardware not of Nortel's
manufacture which shall be deemed to include any such hardware which Nortel adds
to its generally available Third Party Hardware price lists or so identifies to
Company in a Quotation.
1.34 "Third Party Software" shall mean any Software not owned by Nortel
which is included within Licensed Software or Non-Licensed Software.
1.35 "Turnover" shall mean, with respect to any System installed by Nortel,
that Nortel has completed its standard manufacturing test procedures, as
applicable, and that the System is ready for acceptance testing by Company.
1.36 "Turnover Date" shall mean, with respect to any Product installed by
Nortel hereunder, the date on which Nortel provides a notice of Turnover to
Company.
ARTICLE 2. SCOPE OF AGREEMENT
2.1 This Agreement sets forth the terms and conditions under which Company
may order Products and/or Services from Nortel. Company may use the Products
itself, including use to provide services to others, subject to the terms and
conditions of this Agreement. Company expressly represents that it is buying
Products for its own internal use and does not intend to resell the Products.
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 If specified in a Product Annex as a requirement, Company shall,
fifteen (15) days prior to each calendar quarter, submit to Nortel a
consolidated non-binding forecast of Products that Company anticipates
purchasing or licensing over the next four (4) calendar quarters. In addition to
the type, quantity and cumulative dollar amount of Products, the parties may
agree upon additional information to be included in such forecast.
2.4 All references to prices, charges, fees or other amounts herein shall
be in U.S. dollars and all documentation, correspondence and communication shall
be in the English language.
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ARTICLE 3. PLACEMENT OF ORDERS
3.1 To order Products and/or Services, Company shall submit to such person
as Nortel shall designate, an Order which shall at a minimum specify the
following, if applicable:
(i) the types and quantities of Products and Services to be furnished
by Nortel;
(ii) the applicable prices, charges and fees with respect to such
Products and Services;
(iii) the location or facility to which the Products are to be
delivered;
(iv) the incorporation by reference of this Agreement;
(v) the Installation Site, if known;
(vi) the requested Ship Date and Turnover Date of the System; and
(vii) any other information required under this Agreement to be
included in an Order.
3.2 All purchases pursuant to this Agreement shall be made by means
of Orders issued from time to time by Company and accepted by Nortel in writing
within fifteen (15) days after receipt of the Order. In the event that Nortel
fails to provide its acceptance of an Order in writing within such fifteen (15)
day period, such Order shall be deemed to be accepted; subject to Section 3.3.
Nortel shall have the right to reject any Order, or the applicable portion of
such Order, placed hereunder where Company has a separate agreement with Nortel
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 Company pursuant to this Agreement shall refer to
and specifically incorporate this Agreement by reference and the terms and
conditions herein shall govern the transaction resulting from such Order;
provided that such Order is accepted or deemed accepted by Nortel. Additional or
conflicting terms and conditions set forth in or otherwise incorporated into
Orders issued by Company, or in any prior Quotations, acknowledgments or other
related documentation issued by any party, shall be considered null and void and
shall have no force or effect. Any additional or conflicting terms and
conditions set forth in or otherwise incorporated into an Order shall, upon
express acceptance of the same in writing by Nortel, and for such Order only,
supersede the terms and conditions contained in this Agreement, including all
Exhibits attached hereto, which are in conflict, but only to the extent of such
conflict.
3.4 Company may at any time request additions, alterations, deductions or
deviations to an Order, subject to the condition that such changes and any
adjustments resulting from such changes, including, but not limited to,
schedules and prices, shall be
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mutually agreed upon and, if so agreed, subsequently detailed in a written
revision to the applicable Order ("Change Order"). Company acknowledges that a
premium charge may be applied by Nortel should Nortel agree to process a Change
Order outside of its standard Order processing cycle for a Product or in the
event that a Change Order requires an additional amount of work (such as
engineering) to be undertaken to comply with such changes.
3.5 If Company desires to receive a budgetary or firm Quotation from
Nortel for a Product or Service, Company shall submit such request in writing to
Nortel's Director, Commercial Marketing, or such other person as designated by
Nortel. The request for Quotation shall include the information listed in
Section 3.1, as applicable.
3.6 Nortel 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 ninety (90) 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 Company.
(ii) Firm Quotations
(a) the price to be paid by Company for the Products, after
applying the applicable discounts, if any;
(b) fixed charges for Services requested;
(c) complete Hardware and Software lists and project schedules;
and
(d) any other information requested by Company.
3.7 The Ship Date shall be based on Nortel's standard intervals for the
applicable Product; however, the parties shall always mutually agree on the Ship
Date and take into consideration any unique aspect of the applicable project.
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
4.1 Nortel shall charge Company for each Product and/or Service ordered by
Company in accordance with the prices set forth in each accepted Order, which
prices shall be based upon prices identified in one of (i) a Product Annex; (ii)
a Firm Quotation;
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(iii) Nortel's then current prices; or (iv) as specified elsewhere in this
Agreement or as otherwise mutually agreed in writing.
4.2 Upon thirty (30) days prior written notice to Company, Nortel Networks
reserves the right to change its discount practices, discounts, policies,
programs and Services descriptions at any time. However, prices listed in Order
Acknowledgments for Company's corresponding Orders remain firm and would be
unaffected by the proposed change. Notwithstanding the foregoing, where Company
has executed a firm commitment to purchase certain Products at stated discount
levels, the discounts applicable to such Products covered under the commitment
shall remain firm for the Initial Term.
4.3 For all Orders, Nortel shall invoice Company for Products and Services
as follows, unless otherwise agreed to in writing:
(i) for Systems, whether or not installation has been ordered from
Nortel, one hundred percent (100%) of the price for such System(s)
(including Products and Services related thereto which are included in
the price) on the Ship Date;
(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 Services
agreement. To the extent such Services are to be invoiced differently
than set out in this paragraph (iii), such differences shall be set
forth in the applicable Product Annex or separate Services agreement
and such provisions shall take precedence.
4.4 Each invoice shall be paid in full within thirty (30) days after the
date of such invoice. In the event that Company does not pay an invoice in full
within such thirty (30) day period, then Nortel may charge Company interest on
the outstanding portion of such invoice, from day thirty one (31) forward, at
the rate of one and one half percent (1.5%) simple compound interest per month,
or such lesser amount as may be the maximum permissible rate under applicable
law, until such time as the outstanding invoice is paid. In addition, Company
agrees to pay all collection costs and reasonable legal fees incurred by Nortel
as a result of late payment or non-payment by Company.
ARTICLE 5. SHIPMENT, TITLE AND RISK OF LOSS
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5.1 Prior to the Ship Date, Company shall have the right to reschedule any
pending Orders; provided that (i) a minimum period of notice prior to such Ship
Date is given to Nortel by Company in accordance with the applicable Product
Annex; and (ii) the new Ship Date is within ninety (90) days of the original
Ship Date. However, each Order may only be rescheduled once. Company shall
reimburse Nortel 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 Company upon
delivery to the loading dock at the Installation Site or other delivery location
specified by Company in an Order. Company shall keep such Products fully insured
for the total amount then due Nortel for such Products. Company shall pay
transportation charges, including insurance, associated with the shipment of
Products; provided however, that if the parties agree, Nortel shall prepay
transportation charges, and insurance for delivery of Products to the
Installation Site or other delivery location or other designated receiving point
as specified in an Order. The charges therefor shall be invoiced by Nortel and
paid by Company to Nortel in accordance with Article 4 above.
5.3 Good title to Hardware furnished hereunder, free and clear of all
liens and encumbrances, shall vest in Company upon full payment to Nortel of the
total amount payable by Company for such Hardware and any related Licensed
Software or Services ("Total Fee") furnished by Nortel in connection with such
Hardware. Prior to payment of the Total Fee for the Products and Services in an
Order, Company shall not sell or lease the Hardware, or allow any liens or
encumbrances to attach to the Hardware or Software, or remove the Hardware or
Software from the Installation Site without the prior written consent of Nortel,
such consent not to be unreasonably withheld.
5.4 If Company notifies Nortel prior to a Ship Date that Company does not
wish to receive such Products on the Ship Date, or the Installation Site or
other delivery location is not prepared in sufficient time for Nortel to make
delivery in accordance with such date, or Company fails to take delivery of any
portion of the Products in an Order when shipped, Nortel may place the
applicable Products in storage. In that event, Company shall be liable for all
additional costs thereby incurred by Nortel. Delivery by Nortel of any Products
to a storage location as provided above shall be deemed to constitute delivery
of the Products to Company for purposes of this Agreement, including, 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, Company grants to Nortel and/or its
agents a purchase money security interest in the Products in an Order and their
proceeds or such other similar protection as may be available in the applicable
jurisdiction. Company shall cooperate with Nortel in preserving and perfecting
Nortel's security interest in the Products and Company shall promptly (i)
execute and deliver to Nortel such financing statements as Nortel may require;
and (ii) execute and deliver to Nortel such other agreements, documents and
instruments as Nortel may require to perfect and maintain the
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validity, effectiveness and priority of the security interest created or
intended to be created by this Agreement.
5.5.1 Company authorizes Nortel to file one or more financing or
continuation statements and amendments thereto, relating to all or any part of
the Products in an Order without signature of the Company where permitted by
law. A carbon, photographic or other reproduction of any financing statement
covering the Products or any part thereof shall be sufficient as a financing
statement and may be filed as a financing statement.
5.6. Company shall provide Nortel or its subcontractors with access to its
Installation Sites or other Company facilities during the times specified by
Nortel and as are reasonably necessary for Nortel to perform its obligations
hereunder. Nortel shall comply with Company's reasonable site and security
regulations of which Nortel is informed by Company.
5.6.1 All sites at which the Products shall be delivered or installed shall
be prepared by Company in accordance with Nortel's standards, including, without
limitation, environmental requirements. Prior to and during installation,
Company shall ensure the timely and adequate delivery, installation and
functioning of the electrical and communications connections and other
environmental requirements, including but not limited to, HVAC systems specified
in Nortel's instructions, Specifications, Documentation or in a Product Annex.
5.6.2 Company shall provide reasonable working space and facilities,
including heat, light, ventilation, telephones, electrical current, waste
removal and other necessary utilities, for use by Nortel personnel performing
installation or other Services, and adequate secure storage space, if required
by Nortel, for Products and materials. Company shall also provide adequate
security against theft, damage or other loss for the Products while on Company's
Installation Site or other delivery location specified by Company.
5.6.3 Company shall obtain all necessary governmental permits applicable to
Company in connection with the installation, operation, and maintenance of
Products furnished hereunder, excluding any applicable permits required in the
normal course of Nortel's doing business. Any information which Nortel
reasonably requests from Company and which is necessary for Nortel to properly
install or maintain the Products shall be provided by Company to Nortel in a
timely fashion and in a form reasonably specified by Nortel.
ARTICLE 6. TESTING, TURNOVER AND ACCEPTANCE
6.1 If installation Services are ordered by Company, Nortel shall, upon
completion of such installation, test the Products in accordance with Nortel's
Turnover procedures to verify that such Products function substantially in
accordance with the applicable Specifications. Upon completion of such
verification, Nortel shall provide to
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Company a written notice of Turnover. Company shall be permitted an opportunity
to have an appropriately qualified individual in attendance to observe the
performance of such tests, however, the absence of such Company individual for
any reason shall not invalidate the tests nor be a reason for Company to
withhold Acceptance.
6.2 Within ten (10) business days after the Turnover Date, Company shall
either accept the Product in writing by execution of a notice of Acceptance, or
notify Nortel in writing, specifying in reasonable detail those particulars in
which, in Company's opinion, the Product is not in material conformance with the
Specifications. If Acceptance does not occur within such ten (10) days after the
Turnover Date and Company has not indicated to Nortel in writing its basis for
not accepting such Product, then Acceptance shall be deemed to have occurred.
6.3 If Nortel does not install Products furnished hereunder, Nortel shall,
prior to delivery of the Products, perform such factory tests as Nortel
determines to be appropriate in order to confirm that such Products perform
substantially in accordance with the applicable Specifications. Company shall be
deemed to have accepted the Products based upon such tests and Acceptance shall
be deemed to have occurred upon the Ship Date. In the event that Company 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, as specified in the applicable Product Annex or Documentation) Company
or such entity may be required to complete prerequisite training or
certification prior to Company being allowed to install such Products.
6.4 In the event that Company is utilizing any Product in a
revenue-generating capacity, Acceptance shall be deemed to have occurred without
limitation or restriction, upon the date of placement of such Product into
revenue-generating service.
6.5 Products, such as Merchandise, which are purchased separately from a
System, shall be deemed accepted upon the Ship Date. Services which are
purchased separately from a Product shall be deemed to be accepted upon
completion of such Services or upon specific milestones as may be identified in
a Product Annex.
6.6 Company shall not unreasonably withhold Acceptance. Nortel shall
correct any deficiencies identified by Company in the manner described in this
Article whereby such Products do not materially conform to the Specifications.
When Nortel has corrected such deficiencies, Company shall accept the Products
in writing. Company's failure to either accept or provide notice of
non-conformance within the timeframe from the Turnover Date, as prescribed in
Section 6.2, shall constitute Acceptance of the Products.
6.7 Following Acceptance of Products, Company shall execute Nortel's
Acceptance notice, confirming Acceptance without any conditions, restrictions,
or limitations of any nature whatsoever.
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6.8 Acceptance shall not be withheld or postponed due to:
(i) Deficiencies of such Products resulting from causes not
attributable to Nortel, such as, but not limited to (a) material
change or inaccuracy of Customer Information, (b) inadequacy or
deficiencies of any materials, information, facilities or services
provided directly or indirectly by Company and tested in conjunction
with the applicable Products, or spurious outputs from adjacent
material, or (c) other conditions external to the Products which are
beyond the limits specified by Nortel in the Specifications for the
Products; or
(ii) Minor deficiencies or shortages with respect to such Products
which are attributable, in whole or in part, to Nortel, but of a
nature that do not prevent operation of the Products in
revenue-generating service.
6.9 With respect to any deficiencies of the type described in Section
6.8(i), Nortel shall at Company's request and expense assist Company in the
elimination or minimization of any such deficiencies. With respect to any
deficiencies or shortages as described in Section 6.8(ii), Nortel shall, at
Nortel's expense, correct any such deficiencies or shortages within thirty (30)
days of the date of Acceptance or as otherwise agreed by the parties.
6.10 In the event that Company notifies Nortel of non-acceptance of a
Product and Nortel personnel travels to the Installation Site to remedy such
non-acceptance and determines that non-acceptance is due to a deficiency of the
type described in Section 6.8(i), Nortel will invoice Company for Nortel's
investigation of the matter, consisting of the standard labor rate for Nortel's
personnel who travel to the Installation Site and the reasonable travel and
living expenses incurred by such personnel.
ARTICLE 7. ORDER CANCELLATION
7.1 If, prior to the Ship Date, Company cancels all or any part of an
Order, Company shall pay to Nortel a cancellation charge for the Products or
each item of Third Party Hardware or Third Party Software that has been canceled
in accordance with the schedule set forth in the applicable Product Annex.
7.2 Orders for Products that have been shipped may not be canceled.
Furthermore, Orders for Products which Nortel customizes in accordance with a
specific Company request may not be canceled.
ARTICLE 8. WARRANTY
8.1 Nortel warrants that for a period of twelve (12) months from the Ship
Date of a System, the Hardware contained in such System under normal use and
service will be free from defective material and faulty workmanship and shall
comply with the
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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 warrants that any installation Services performed by Nortel
with respect to a System will be free from defects in workmanship for a period
of twelve (12) months from the completion date of such Services.
8.3 Nortel warrants that any Licensed Software shall function during the
warranty period of the Hardware with respect to which such Licensed Software is
furnished without any material, service-affecting, non-conformance to the
applicable Specifications. Licensed Software that is delivered separately from
Hardware is warranted for a period of twelve (12) months from the applicable
Ship Date. If the Licensed Software fails to so function, Company's exclusive
remedy and Nortel's sole obligation under this warranty is for Nortel to correct
such failure through, at Nortel's option, the replacement or modification of the
Licensed Software or such other actions as Nortel reasonably determines to be
appropriate, all within a reasonable time having regard to all of the
circumstances and failing which the parties agree to negotiate a commercially
reasonable solution. Any modification to the Software not performed by Nortel,
other than with respect to Modifiable Software, shall void this warranty.
8.4 If Hardware is not free from defects in material or workmanship and
fails to comply with the applicable Specifications during the warranty period,
Nortel will repair, replace or modify at its sole option the defective Hardware
so that it substantially complies with the applicable Specifications. The
warranty service shall be performed at the Installation Site or Nortel's
facility as determined by Nortel. If Nortel is unable to repair or modify the
defective Hardware within a reasonable period of time so that such Hardware
conforms to the applicable Specification, Nortel shall replace the defective
Hardware with Hardware that conforms to such Specifications. Replacement
Hardware may be new or reconditioned at Nortel's option. Nortel's sole
obligation and Company's exclusive remedy under the warranty provisions of this
Article with respect to Hardware and installation Services shall be limited to
repair, modification or replacement of the defective Hardware or correction of
the defective installation Services.
8.5 Notwithstanding the foregoing, the warranty period of Hardware which
has been subject to repair or replacement by Nortel shall commence upon the Ship
Date of the repaired or replacement Hardware to Company and shall expire on the
later of 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
Company or the last day of the original warranty period with respect to such
Licensed Software.
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8.6 Nortel warrants that its Products shall comply in all material aspects
with all applicable laws and regulations known to Nortel, which are in force on
the date of acceptance of the applicable Order 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 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 or repair not performed by Nortel; (ii) improper
storage; (iii) failure to comply with all applicable environmental requirements
for the Products as specified by Nortel 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 that such service was not performed by Nortel or on Nortel's
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; or (vii) where written notice of the defect has not been given to
Nortel within the applicable warranty period. The warranties set forth in this
Article shall not apply to (i) Non-Licensed Software for which the applicable
right to use fees have not been paid; or (ii) Third Party Software or Third
Party Hardware, provided however that Nortel shall assign to Company (to the
extent of Nortel's right to do so) the warranty rights granted to Nortel by the
appropriate vendor of such Third Party Software or Third Party Hardware.
8.9 Unless Nortel elects to repair or replace defective Hardware at
Company's facility, all Hardware to be repaired or replaced, whether in or out
of warranty, shall be de-installed and packed by Company in accordance with
Nortel's instructions. Nortel shall 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 may ship replacement Hardware prior to Nortel receiving the
defective Hardware. In the event that Company fails to return defective Hardware
and Nortel has shipped such replacement Hardware, Nortel shall invoice Company
at Nortel's applicable then-current prices for such replacement Hardware, thirty
(30) days after the Ship Date of such replacement Hardware. If mutually agreed,
Nortel will make repairs on-site at Nortel's then-current charge for such
repairs.
8.10 If the Hardware returned to Nortel pursuant to Section 8.9 is
determined by Nortel to be beyond repair and is outside the warranty period,
Nortel shall notify Company and if requested Nortel shall sell Company
replacement Hardware at Nortel's then-current prices for such replacement
Hardware.
8.11 Company shall bear risk of loss or damage and shall pay for all
transportation charges for Hardware returned to Nortel, and Nortel shall bear
risk of loss or damage and pay for transportation charges for repaired or
replacement Hardware
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shipped to Company. Title to returned Hardware shall pass to Nortel upon
receipt. Title to replacement Hardware shall pass to Company upon receipt.
8.12 Nortel and Nortel's vendors of Third Party Hardware and Third Party
Software, as appropriate, shall not have any responsibility to Customers for
warranties offered by Company to such Customers and Company hereby indemnifies
and holds harmless Nortel and Nortel's vendors, as appropriate, from any claims,
damages or liabilities arising out of, or relating to, any warranties offered by
Company to such Customers.
8.13 THE WARRANTIES, CONDITIONS AND REMEDIES SET FORTH HEREIN CONSTITUTE
THE ONLY WARRANTIES, OBLIGATIONS OR CONDITIONS OF NORTEL WITH RESPECT TO THE
PRODUCTS AND SERVICES AND ARE COMPANY'S SOLE AND EXCLUSIVE REMEDIES IN THE EVENT
THAT 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. NORTEL SHALL NOT BE LIABLE FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT
LIMITATION LOST REVENUES OR PROFITS OR OTHER ECONOMIC LOSS, OF ANY NATURE
WHATSOEVER ARISING OUT OF NORTEL'S BREACH OF WARRANTY OR CONDITION.
ARTICLE 9. NORTEL'S ADDITIONAL OBLIGATIONS
9.1 Nortel shall make training available to representatives of Company
with respect to the operation, configuration, installation, service, maintenance
and support of the Products at Nortel's then current prices and at Nortel's
facilities, subject to course and class availability.
9.2 Upon request, Nortel shall provide Company with copies of its then
current training catalogue. Upon the request of Company, Nortel shall provide to
Company such training as Company requests, at a time and place mutually agreed
upon and at the prices to be quoted for such training. The cancellation fees set
forth in the training catalogues shall apply.
9.3 Nortel shall include its standard Documentation package, if any, with
each shipment of Products. Nortel shall make the Documentation available on its
choice of media, which may include CD-ROM or other electronic media. Nortel
shall provide Company with any other Documentation that is ordered at its
then-current prices therefor. Documentation provided via Nortel's CD-ROM media
may be printed and copied and Documentation provided in paper format may be
copied, to the extent such Documentation so provides, and only to the extent
such printing or copying is necessary
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for the operation and maintenance of the Products to which the Documentation
pertains. However, Company may not press or burn any copies of CD-ROM discs.
9.4 During the Term of this Agreement, Company may acquire various support
Services from Nortel in connection with the Products that Company acquires from
Nortel under this Agreement. These Services may include, but are not limited to
the following: technical assistance Services, installation Services, Hardware
maintenance Services, Software maintenance Services and parts repair and
replacement Services.
ARTICLE 10. SOFTWARE LICENSE
Nortel Networks Products' Software
10.1 Company acknowledges that the Software may contain programs which have
been supplied by, and are proprietary to, Third Party Software vendors. In
addition to the terms and conditions herein, Company shall abide by any
additional terms and conditions specified in a Product Annex with respect to any
Software provided by any Third Party Software vendor.
10.2 Upon Company's payment to Nortel of the applicable fees with respect
to any Software furnished to Company pursuant to this Agreement, Nortel hereby
grants to Company, 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 Company, but only in conjunction with Company's use of the
Hardware or the Documentation with respect to which such Licensed Software was
furnished. The duration of such right to use shall last (i) with respect to
Licensed Software furnished in connection with Hardware, for the life of that
Hardware as it may be repaired or modified, and (ii) with respect to Licensed
Software furnished in connection with Documentation, for the duration of
Company's right to use the Documentation. Company shall be granted no title or
ownership rights to the Software, which rights shall remain in Nortel or its
suppliers.
10.3 As a condition precedent to this license and to the supply of Software
by Nortel pursuant to this Agreement, Nortel requires Company to give proper
assurances to Nortel for the protection of the Software. Accordingly, all
Software supplied by Nortel under or in implementation of this Agreement shall
be treated by Company as the exclusive property, and as proprietary and a trade
secret, of Nortel and/or its suppliers, as appropriate, and Company shall: (i)
hold the Software, including, without limitation, any methods or concepts
utilized therein in confidence for the benefit of Nortel and/or its suppliers,
as appropriate; (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; (iv) not attempt to
decompile, reverse engineer, disassemble, reverse translate, or in any other
manner decode the Software; (v) issue adequate instructions to all persons, and
take all actions reasonably necessary to satisfy Company's
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obligations under this license; and (vi) forthwith return to Nortel, or with
Nortel's 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 regarding such Software, including, but not
limited to all printed material furnished by Nortel to Company.
10.4 The obligations of Company hereunder shall not extend to any
information or data relating to the Software which is now available to the
general public or becomes available by reason of acts or failures to act not
attributable to Company.
10.5 Nortel may issue updates to the Software from time to time, and upon
Company's payment of applicable right to use fees, if any, shall license such
updates to Company. The right to use fees for such updates do not include the
price of any associated Hardware that may be required to use such updates.
10.6 Neither Company nor any successor to Company's title in the applicable
Hardware shall have the right to (i) assign this license as to the applicable
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 and Company. Such consent shall not be
unreasonably withheld, delayed or conditioned and is subject to the provisions
of Section 15.4.1 hereafter.
10.7 Company shall indemnify and hold Nortel and its suppliers, as
appropriate, harmless from any loss or damage resulting from a breach of this
Article 10. The obligations of Company under this Article 10 shall survive the
termination of the Agreement and shall continue if the Software is removed from
service.
Non-Licensed Software
10.8 Certain Software delivered by Nortel may include Non-Licensed
Software. Non-Licensed Software includes (i) any Software for which the
applicable right to use fees have not been paid; and (ii) Software for which a
periodic right to use fee has expired and the applicable additional periodic
right to use fees have not been paid. Company shall submit to Nortel an Order
for any Non-Licensed Software that Company desires to license or renew.
10.9 When Non-Licensed Software is placed into service, the applicable
right to use fees shall be payable. Company shall also have the option to pay
the applicable right to use fees for any Non-Licensed Software upon installation
of a Software load containing such Non-Licensed Software.
10.10 To ensure Company's proper activation and/or usage of only the
appropriate Software, Company shall complete the appropriate form designated by
Nortel
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prior to the activation and/or usage by Company of any Non-Licensed Software.
Company shall identify all Software desired to be activated and/or used
(including the number of lines or other units activated, if applicable) in each
System and shall transmit such form to Nortel.
10.11 Nortel shall promptly review any form submitted pursuant to Section
10.10 and respond in writing, identifying whether (i) any applicable
prerequisite Hardware or Software is required by Company prior to activation
and/or usage of the applicable Software; or (ii) whether the use of such
Software requires Nortel to determine whether the current System configuration
will require additional elements, such as Hardware, other hardware and/or System
memory, prior to activation and/or usage; or (iii) whether Company can use such
Software without the addition of any additional Hardware or Software.
10.12 Nortel reserves the right to access by remote polling any site in
which Software has been installed to determine which Software has been
activated. Such polling shall be done so as not to unreasonably interfere with
Company's use of the Products.
10.13 Nortel shall issue invoices to Company, in addition to those amounts
previously invoiced, for amounts found to be payable as a result of Company's
activation and/or usage of any Software which Nortel determines as a result of
the remote polling of a site and for which Company has not previously paid the
appropriate right to use fees.
10.14 The warranty period for Software activated later than the original
Ship Date of the Software load shall be for the same period as such original
Software load and shall not be extended to provide for an additional period of
warranty based upon the date individual features or units are activated and/or
utilized by Company or the date Company pays any applicable right to use fees.
Modifiable Software
10.15.1 Notwithstanding anything to the contrary above, and subject to the
provisions of Section 15.4.1 hereafter, upon payment to Nortel of the applicable
fees, Nortel hereby grants to Company, subject to the applicable terms and
conditions of this Article 10, a personal, non-transferable, non-assignable and
non-exclusive right and license to modify Licensed Software which Nortel
identifies as Modifiable Software. Upon the modification or creation of any
Applications, or the modification or creation of any Building Blocks, Nortel
shall have no obligations with regard to warranty under Article 8 or indemnity
under Article 11 for such Applications or Building Blocks.
10.15.2 Nothing contained in Sections 10.16.1 through 10.16.5 shall
transfer, or be deemed to transfer, or contemplate the transfer of, any rights
in or to the Software other than those rights specifically granted herein, and
in particular but without restricting the generality of the foregoing, Nortel
does not in any way transfer any right,
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title or interest in or to the Software or any element constituting a portion
thereof to Company, other than the right of Company to modify or create Building
Blocks and Applications.
10.15.3 For any Building Blocks and Applications created solely by Company,
and for all Company-modified portions of the Nortel-provided Building Blocks
with respect to such modified portion only, Company shall own all forms of
intellectual property rights (including but not limited to patent, trade secret,
copyright and mask rights) pertaining to such Applications, Building Blocks or
portions thereof and shall have the right to file for or otherwise secure and
protect such rights. For all such Company created Applications or Building
Blocks or modified portions of Building Blocks, the parties shall, on a case by
case basis, negotiate in good faith to determine whether Company may desire to
license any such Applications or Building Blocks to Nortel.
10.15.4 For any Applications created solely by Nortel, and for the
Nortel-provided Building Blocks, Nortel shall own all forms of intellectual
property rights (including but not limited to patent, trade secret, copyright
and mask rights) pertaining to such Applications or Building Blocks and shall
have the right to file for or otherwise secure and protect such rights. For all
such Nortel Applications or Building Blocks, Company may license any such
additional Nortel Products upon Nortel making such software generally available
to its customers.
10.15.5 In the event that Company and Nortel intend to jointly create
Applications or Building Blocks, the parties shall mutually agree as to
applicable terms and conditions.
Services Software
10.16.1 With respect to Services Software, Company shall: (i) utilize such
Services Software and the results thereof solely for the purposes described in
Section 1.24; and (ii) comply with additional terms, if any, applicable to such
Services Software as specified in a Product Annex. Nortel may, at any time and
without liability or obligation to Company, modify the Services Software, any
computer equipment of Nortel or suppliers used in connection with such Services
Software, and identification codes, manuals or other information or
Documentation used in connection with the Services Software.
10.16.2 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 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
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SOFTWARE TO ACHIEVE COMPANY'S INTENDED RESULTS, AND FOR THE INSTALLATION, USE,
AND RESULTS OBTAINED FROM THE SERVICES SOFTWARE. IN NO EVENT SHALL NORTEL BE
LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES,
INCLUDING WITHOUT LIMITATION, LOST REVENUES OR PROFITS OR OTHER ECONOMIC LOSS,
OF ANY NATURE WHATSOEVER ARISING OUT OF COMPANY'S USE OF SERVICES SOFTWARE.
Bay Products Software
10.17 Notwithstanding the foregoing, with respect to Bay Products Software,
Company may purchase for its internal use, Software licenses and accompanying
documentation to Bay Products Software by placing Orders under this Agreement.
Company's right to use the Bay Products Software is subject to the "shrink-wrap"
license agreement with the Software and in its accompanying documentation
shipped by Nortel Networks to Company ("License Agreement").
10.18 In addition to the terms in Sections 10.3, 10.6 and 10.7, which shall
be applicable to Bay Products Software, Company may not, translate, decompile,
disassemble, use for any competitive analysis, or reverse engineer the Bay
Products Software or its documentation, in any way. Company agrees to not
translate any portion of the Software or associated documentation into any other
format or foreign language without the prior written consent of Nortel Networks.
In no event will Company grant the U.S. Government rights in any Bay Products
Software greater than those set out in subparagraphs (a) through (d) of the
Commercial Computer Software - Restricted Rights clause at FAR 52.227-19 and the
limitations for civilian agencies set out the License Agreement; and
subparagraph (c)(1)(ii) of the Rights in Technical Data and Computer Software
clause at DFARS 252.227-7013 for agencies of the Department of Defense.
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 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 damages awarded
or resulting from any such suit, claim or proceeding.
11.2 Nortel shall defend Company against any suit, claim or proceeding
brought against Company alleging that the sale to, or use by Company of, any
Products, excluding Third Party Hardware or Third Party Software, furnished
hereunder infringes any patent, trademark or copyright ("Infringement Claim").
Nortel shall pay, subject to
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Section 11.3 below, all litigation costs, reasonable attorney's fees, settlement
payments and damages awarded or resulting from any such suit, claim or
proceeding. With respect to Third Party Hardware or Third Party Software, Nortel
shall assign any rights with respect to infringement of patents granted to
Nortel by the supplier of such items to the extent of Nortel's right to do so.
11.3 Nortel's cumulative liability, pursuant to this Article 11, other than
Section 11.1, 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 Infringement Claim.
11.4 Nortel shall have no liability, in respect of any Infringement Claim
based on the use of a Product in the event that such Product: (i) is
manufactured, designed or supplied by Nortel in accordance with any design or
any special instruction furnished by Company; (ii) is used by Company in a
manner or for a purpose not contemplated or authorized by this Agreement; (iii)
is used by Company in combination with other products not provided by Nortel,
including, without limitation, any software developed solely by Company through
the permitted use of Products furnished hereunder, provided that the
Infringement Claim arises from such combination or the use thereof; or (iv) is
modified by Company where such modification is not authorized by Nortel. In the
excepted cases stated above, Company shall indemnify and hold Nortel harmless
against any loss, cost, expense, damage, settlement or other liability,
including, but not limited to, reasonable attorneys' fees, which may be incurred
by Nortel with respect to any suit, claim, or proceeding described in this
Section 11.5.
11.5 A party shall not be liable for any damages awarded based on the other
party's willful, knowing, or deliberate infringement of a patent, copyright,
trade secret, trademark, or other proprietary right where such infringement
results in a pecuniary damage award; and the infringing party shall indemnify
the non-infringing party with respect to such claim.
11.6 Nortel may provide Company with notice of an actual or potential
Infringement Claim. Nortel shall consult with Company regarding the Infringement
Claim and the course of action to be pursued as a result thereof. In the event
that the parties fail to agree on a satisfactory course of action for dealing
with the matter, Company may either:
(i) return to Nortel the affected portion of the Product(s) in return
for a refund of the depreciated value (as carried on the books of
Company) of the Product(s) so returned; or
(ii) continue to use the Product(s) at Company's own risk.
11.7 Nortel shall not be liable for, and Company shall indemnify Nortel in
respect of any Infringement Claim(s) where Nortel has provided notice to Company
of
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the Infringement Claim(s) and Company elects to continue its use of the
Product(s) covered by the Infringement Claim.
11.8 If as a result of an Infringement Claim, other than those contemplated
in Section 11.6(i) and 11.6(ii) above, an injunction is obtained against
Company's use of any Product, Nortel shall, at Nortel's option:
(i) procure for Company the right to continue using the alleged
infringing Product(s);
(ii) replace or modify the same with equivalent or better Product(s)
so that Company's use is non-infringing; or
(iii) accept return of the affected portion of the Product(s) and
refund to Company the depreciated value (as carried on the books of
Company) of the Product(s) so returned.
11.9 The defense of any claim which is predominantly covered by the
provisions of this Agreement shall be controlled by the party upon whom the
majority of the ultimate liability is likely to be imposed. Such controlling
party shall give the other party a reasonable opportunity to participate in
negotiation or defense of the claim so that such other Party may reasonably
protect its own interests. Neither Party shall be liable for any settlement
obligation incurred without its written consent.
11.10 Company shall waive any and all claims that Company may have against
Nortel that Company may have due to any use by Company of Modifiable Software
and any modification Company may have made to a Product as a result of such use.
Further, Company shall be responsible for any additional hardware, software or
services required as a result of such use.
11.11 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. IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES,
INCLUDING WITHOUT LIMITATION, LOST REVENUES OR PROFITS OR OTHER ECONOMIC LOSS OF
ANY NATURE WHATSOEVER, ARISING FROM SUCH INFRINGEMENT CLAIMS AND/OR RELATED
MATTERS, OTHER THAN AS SPECIFICALLY SET FORTH HEREIN.
ARTICLE 12. REMEDIES AND LIMITATION OF LIABILITY
12.1 Nortel shall have the right to suspend its performance, upon written
notice to Company, and forthwith remove and take possession of all Products that
shall have
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been delivered to Company, if, prior to payment to Nortel of any amounts due
pursuant to this Agreement with respect to such Products, Company shall (i)
become insolvent or bankrupt or cease, be unable, or admit in writing its
inability, to pay all debts as they mature, or make a general assignment for the
benefit of, or enter into any arrangement with, creditors; (ii) authorize, apply
for, or consent to the appointment of, a receiver, trustee, or liquidator of all
or a substantial part of its assets or have proceedings seeking such appointment
commenced against it which are not terminated within sixty (60) days of such
commencement; or (iii) file a voluntary petition under any bankruptcy or
insolvency law or under the reorganization or arrangement provisions of the
United States Bankruptcy Code or any similar law of any jurisdiction or have
proceedings under any such law instituted against it which are not terminated
within sixty (60) days of such commencement.
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;
provided, however, that nothing contained in this Section 12.2 or elsewhere in
this Agreement shall make either party liable for any indirect, incidental,
punitive, special, or consequential damages of any nature whatsoever for any
breach of this Agreement whether the claims for such damages arise in tort
(including negligence regardless of degree of fault), contract, or otherwise.
12.3 Nortel shall not be liable for any additional costs, expenses, losses
or damages resulting from errors, acts or omissions of Company, including, but
not limited to, inaccuracy, incompleteness or untimeliness in the provision of
information by Company to Nortel or fulfillment by Company of any of its
obligations under this Agreement. Company shall pay Nortel the amount of any
such costs, expenses, losses or damage incurred by Nortel.
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 Company of any prices, charges, fees or other amounts payable
hereunder may be brought by Nortel at any time permitted by applicable law, and
Nortel may suspend performance of any of its obligations hereunder until all
such payments are made.
ARTICLE 13. TERM AND TERMINATION
13.1 This Agreement will be in effect from the Effective Date for a period
of five (5) years (the "Original Term"). Thereafter, this Agreement shall
automatically renew for one (1) year terms (each, a "Renewal Period" and
collectively and together with the Original Term, the "Term"), unless either
party provides the other party with written
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notice of its intent not to renew at least sixty (60) days prior to the end of
the Original Term or any Renewal Period.
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 defaulting within such
thirty (30) day period and provide to the non-defaulting party a plan for timely
remedying the alleged default in order to avoid termination. A default shall
include:
(i) a party's insolvency or initiation of bankruptcy or receivership
proceedings by or against a party or the execution of an assignment
for the benefit of creditors; or
(ii) either party's material breach of any of the terms or conditions
hereof including the failure to make any payment when due.
13.3 The expiration or termination of this Agreement for any cause shall
not release either party from:
(i) any obligations and duties remaining under any Order accepted by
Nortel prior to such expiration or termination;
(ii) any liability which at the time of expiration or termination has
already accrued to the other party, or, which thereafter may accrue in
respect to any event prior to expiration or termination; or
(iii) any liability from any obligation specified in Section 15.18
below to survive expiration or termination.
ARTICLE 14. CONFIDENTIALITY
14.1 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 Affiliate, 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.
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14.2 Company shall take reasonable care to use Nortel's Confidential
Information only for study, operating, or maintenance purposes in connection
with Company's use of Products furnished by Nortel pursuant to this Agreement.
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 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.
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 and the contents 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.
15.1.1 In the event that the Company completes an initial public
offering of its common stock, this Agreement will be considered to be a material
contract which may be required to be disclosed. Nortel Networks understands that
this Agreement may have to be filed with the Securities & Exchange Commission as
part of any filing for an initial public offering. Company will notify Nortel
Networks prior to any such filing and Company shall use their best efforts, to
the extent permissible by the SEC, to protect Nortel Networks confidential
information contained in this Agreement.
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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 Texas, 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.
15.4.1 Assignment - Other than as explicitly stated below, neither party
may assign or transfer this Agreement or any of its rights hereunder without the
prior written consent of the other party, such consent not to be unreasonably
withheld, delayed or conditioned. A change in control of Company occurs when
ownership or control of more than fifty percent (50%) of the shares of the
Company entitled to elect the board of directors changes during the Term of this
Agreement, and this shall be deemed an assignment hereunder. In such instance,
Nortel shall withhold consent only if control vests in a competitor of Nortel's
as determined by Nortel in its sole discretion. Company's consent shall not be
required for any assignment or transfer by Nortel (i) to any Nortel Affiliate of
all or any part of this Agreement or of Nortel's rights hereunder; or (ii) to
any third party of Nortel's right to receive any monies ("Receivables") which
may become due to Nortel pursuant to this Agreement.
15.4.2 Company hereby consents to the sale of Receivables by Nortel without
the necessity for any further notice and without any qualification on such
consent. Company grants permission for Nortel to disclose the provisions of this
Agreement to purchasers and prospective purchasers of Receivables, or their
affiliates and others with a present or prospective financial interest in such
Receivables, and their respective agents, attorneys, auditors, rating agencies
and other advisors.
15.5 Subcontracting - Nortel may subcontract any of its obligations under
this Agreement, but no such subcontract shall relieve Nortel of primary
responsibility for performance of its obligations.
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 and Company, nor to constitute either party as the
agent, employee or legal representative of the other. All persons furnished by
either party to accomplish the intent of this Agreement shall be considered
solely as the furnishing party's employees or agents and the furnishing party
shall be solely responsible for compliance with respect to
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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. 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.
15.9 Taxes - Company shall at Nortel's direction promptly reimburse Nortel
or pay directly to the applicable government or taxing authority all taxes and
charges arising hereunder, including, without limitation, penalties and
interest, except for taxes computed upon the net income of Nortel. If Company
provides Nortel with a certificate of exemption for the applicable taxes, in a
timely manner, then Nortel shall not invoice Company for such taxes.
15.10.1 Hazardous Materials - Prior to issuing any Order for Services to be
performed at Company's facilities, Company shall identify and notify Nortel in
writing of the existence of all Hazardous Materials which Nortel may encounter
during the performance of such Services, including without limitation, any
Hazardous Materials contained within any equipment to be removed by Nortel.
15.10.2 If Company breaches its obligations pursuant to Section 15.10.1,
(i) Nortel may discontinue the performance of the applicable Services until all
the Hazardous Materials have been removed or abated to Nortel's satisfaction by
Company at Company's sole expense; and (ii) Company shall defend, indemnify and
hold Nortel harmless from any and all damages, claims, losses, liabilities and
expenses, including without limitation, attorney's fees, which arise out of
Company's breach of such obligations.
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:
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If to Company:
I3S, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇, CHAIRMAN & CEO
Facsimile: 972/650-7972
If to Nortel:
Nortel Networks Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Senior Manager, Contracts Mgmt & Negotiations
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Either party hereto may change its address by a notice given to the other party
hereto in the manner set forth above.
15.12 Information and Documentation - Company shall provide any information
and/or documentation that Nortel reasonably requests from Company and that is
necessary for Nortel to properly perform any of its obligations hereunder. Such
information shall be provided in a form reasonably specified by Nortel by the
dates specified by Nortel.
15.13 Export - Company shall not export any Products or technical data
received from Nortel pursuant to this Agreement, or release any such Products or
technical data with the knowledge or intent that such Products or technical data
will be exported or transmitted to any country or to foreign nationals of any
country, except in accordance with applicable U.S. laws and regulations
concerning exporting and with written consent of Nortel. Company shall obtain
all government authorizations, in accordance with applicable law prior to
exporting or transmitting any such Products or technical data.
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 - In the event of any change in the
Specifications or Nortel's manufacturing or delivery processes for any Products
as a result of the imposition of requirements by any government, Nortel may upon
notice to Company,
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increase its prices, charges and fees to cover the added costs and expenses
directly and indirectly incurred by Nortel as a result of such change.
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.
Company 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
15 and Sections 4.4, 9.3 and 13.3, shall survive the termination or expiration
of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement.
NORTEL NETWORKS INC. I3S, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------ ----------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------- --------------------
Title: VP - Counsel Title: President
--------------------- -------------------
Date: 9-24-99 Date: 7-15-99
---------------------- --------------------
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PRODUCT ANNEX A.1
ATTACHMENT 1
EXHIBIT A
PRODUCT ANNEX A.1
BAY PRODUCTS
The supplemental terms and conditions provided below shall apply to Products
provided by the Bay Networks division of Nortel Networks and shall take
precedence over any conflicting terms and conditions specified, in the Sections
noted below or elsewhere, in the Agreement.
ARTICLE 1, SECTION 1.5
With respect to the definition of "Confidential Information" the following shall
apply:
"Diagnostics, Software and Software Documentation" shall be added to and
included within the definition of "Confidential Information".
ARTICLE 1, SECTION 1.16
With regard to the definition of "Merchandise", the following shall apply:
"For purposes of this Agreement, Bay Products shall be considered to be
'Merchandise'."
ARTICLE 1, SECTION 1.30
With regard to the definition of "Specifications" the following shall apply:
"Company may provide Nortel Networks with written design specifications for
new products to be developed for Company ("Company Specifications") by
Nortel Networks. If Nortel Networks agrees to undertake the design project,
it will accept or modify Company Specifications in writing, and in doing
so, will undertake to design and manufacture those products in conformity
with the Company Specifications or as revised in writing and mutually
agreed to by the parties."
Article 2, Scope of the Agreement
With regard to the scope of the Agreement the following shall apply:
2.1.1 During the Original Term, Company commits to purchase and/or license,
as applicable, and take delivery of the Products and Services including,
without limitation, those described in Attachment 1, Bay Products, or as
otherwise described by Nortel Networks in a firm Quotation in the minimum
dollar amount
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PRODUCT ANNEX A.1
ATTACHMENT 1
of **** ** (the "Commitment Amount")
as more specifically described hereafter.
By Year End: Dollar Volume of Nortel Orders:
------------ ------------------------------
June 30, 2000 *
June 30, 2001 *
June 30, 2002 *
June 30, 2003 *
June 30, 2004 *
Total: *
Commitment Amount purchases shall include a) direct Orders by Company
for Products and Services; and, b) indirect Orders for Products and
Services listed in Attachment 1 or by Firm Quotation that 1) are from
third parties, including Company's customers, who submit an Order
("Third Party Order"); and, 2) are from third parties who do not have a
written contractual agreement with Nortel to purchase the Products
listed on Attachment 1 as amended from time to time; and, 3) that
Company has certified to the third party that they purchase the
Products. In addition, the Commitment Amount purchases may also include
orders from third parties for Products and Services which do not meet
all of the above three criteria but where, in the sole discretion of
Nortel Networks (which discretion shall be reasonably exercised),
Nortel Networks determines that the Company was instrumental in
securing a particular order on behalf of Nortel Networks. The prices,
charges and fees for the Products shall be paid in accordance with
Article 4 of the Agreement.
2.1.2 In the event that Company does not satisfy each year's Commitment
Amount set forth in Section 2.1.1. of this Product Annex A.1, upon the
expiration of each year, Nortel shall invoice Company for, and Company
shall pay to Nortel Networks, an amount equal to the price difference
obtained by: (i) subtracting the total prices paid by Company for all
Products purchased by Company during the respective year, excluding any
and all Orders cancelled during the year pursuant to Article 7 of the
Agreement, from that year's Commitment Amount to arrive at an annual
shortfall amount ("Shortfall Amount"); and (ii) multiplying the annual
Shortfall Amount by **** ** to arrive at the amount to be invoiced to
Company ("Shortfall invoice"). Upon Nortel Networks sale of at least
**** ** of its equity position in Company, the Shortfall Amount, if
any, occurring thereafter shall be multiplied by **** ** to arrive at
the amount to be included in the Shortfall Invoice. Company shall pay
to Nortel Networks the entire invoiced amount within thirty (30) days
after the date of the Shortfall Invoice.
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PRODUCT ANNEX A.1
ATTACHMENT 1
2.1.2.(a) In the event that Company has paid a Shortfall Invoice
from a prior year, and in a subsequent year orders sufficient
Products to satisfy both the current year's annual Commitment
Amount and the prior year's Shortfall Amount, then Company shall
earn a product credit equal to the amount of the Shortfall
Invoice paid by Company. The product credit shall be applied to
reduce the prices to be paid by Company for invoices applicable
to Products purchased after the product credit is earned.
2.1.2(b) In the event that Company exceeds its annual commitment
amount in a given year ("Carryover Amount"), the succeeding
year(s) commitment amount shall include any Carryover Amount plus
additional purchases made during the year in determining if
Company met its annual Commitment Amount for that year.
2.1.3 During the Original Term, Company may purchase any of the Bay
Products listed on Attachment 1 to this Product Annex A.1 or any
other Products including Third Party Hardware or Third Party Software,
listed in a Firm Quotation. Company shall pay the prices, charges and
fees for each such Product listed in Attachment 1, or in a Firm
Quotation or a then-current price list, subject to the application of
the Product Group Discount for the respective Products listed in
Attachment 1. Nortel Networks shall invoice Company the prices,
charges and fees for each such Order after first deducting the
applicable Product Group Discount from the List Price. If a Firm
Quotation issued by Nortel Networks includes Products not listed in
Attachment 1, Nortel Networks shall, as part of the Firm Quotation,
identify the Product Group Discount or other discount to be applied to
any Order submitted by Company.
ARTICLE 2, SECTION 2.3
With regard to the subject of forecasts, the following shall apply:
Company shall submit a non-binding forecast to Nortel Networks, in
accordance with Section 2.3 of the Agreement.
ARTICLE 2, SECTION 2.5
With regard to the subject of exclusivity, the following paragraphs
shall be added to the Agreement:
2.5 In consideration of Nortel Networks pricing of its Products and
Services as set forth and described in Attachment 1 or as otherwise
provided in a Firm Quotation, Company shall use commercially
reasonable efforts to utilize Nortel Networks as its Preferred
Provider of any telecommunications or data equipment manufactured or
offered for sale by Nortel Networks, and for network management and
other professional services offered by Nortel Networks. For
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PRODUCT ANNEX A.1
ATTACHMENT 1
purposes of this Agreement, Preferred Provider shall mean that the
Company will strive to utilize Nortel Networks equipment that 1) has
the performance capability and other specifications required by
Company in building its network and providing services to its
customers; and 2) has performance and other specifications that are
comparable to other companies that are manufacturing similar
equipment; and, 3) is comparably priced to the products offered by
other vendors.
ARTICLE 2, SECTION 2.6
2.6 A Product or Design Project shall materially conform, or be in
substantial compliance with Nortel Networks Specifications or Company
Specifications when: a) the delivered Product meets ninety-five
percent (95%) of Nortel Networks Specifications or Company's
Specifications, as applicable; and, 2) where the deficiencies, if any,
are minor deficiencies as described in Section 6.8.(ii) of the
Agreement.
ARTICLE 3, Section 3.7
With regard to the subject of standard intervals for Bay Products the following
shall apply:
"The standard interval between Order acceptance and Ship Date for
forecasted Bay Products is four (4) weeks. The Ship Date with respect
to non-forecasted Bay Products shall be based upon standard intervals
for the applicable Product, and shall be established and confirmed in
the Order acknowledgement issued to Company."
ARTICLE 4, SECTION 4.2
With regard to the subject of pricing and discounts, Section 4.2 of the
Agreement shall be deleted in its entirety and restated as follows:
"Nortel Networks' prices for Bay Products and Services are those set
out in Nortel Networks' then-current standard price list ("Price
List"), less the applicable discount specified in Attachment 1 to this
Product Annex A.1 or in a firm Quotation."
ARTICLE 4, SECTION 4.4, PARAGRAPH (i)
With respect to the subject of invoicing for annual fees for maintenance
Services for Bay Products, the following shall apply:
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PRODUCT ANNEX AA
ATTACHMENT 1
"Annual maintenance Services provided by Nortel Networks with respect
to Bay Products are subject to invoice and payment at the beginning of
the annual maintenance term."
ARTICLE 5, SECTION 5.1
With respect to the subject of Order cancellation and the rescheduling of Ship
Date(s) for Orders of Bay Products, the following shall apply:
"Company may cancel or reschedule any order, without charge, by
delivering written notice to Nortel Networks at least thirty (30) days
prior to the Ship Date. Orders canceled by Company by delivery of
written notice within thirty (30) days of a Ship Dates may be subject
to a fifteen percent (15%) restocking charge by Nortel Networks.
Company may not cancel or reschedule any Order, in whole or in part,
less than fifteen (15) days prior to the corresponding Ship Date
unless mutually agreed to by the parties."
ARTICLE 8, SECTION 8.1.1
With regard to the subject of Bay Products warranty, the following shall apply:
"Third Party Software or Third Party Hardware shall be covered under
the warranty for Bay Products, provided that the Products are included
in the Price List. Products specified on the Price List as being sold
"AS IS" shall have no warranty. Nortel Networks does not warrant that
any item of Bay Products Software is error-free or that its use will
be uninterrupted. Nortel Networks is not obligated to repair or remedy
any Bay Products Software defect if such defect was remedied in a
subsequent software release otherwise available to Company. In that
event, Company may purchase the software release upgrade as the remedy
for such defect.
ARTICLE 8, SECTION 8.3
Section 8.3 of the Agreement shall be deleted in its entirety and restated as
follows:
"8.3 Nortel Networks warrants that each item of Bay Products
Software, as delivered or updated by Nortel Networks and properly
installed and operated on the Hardware or other equipment it is
originally licensed for, will function substantially as described in
its then-current user documentation during its respective warranty
period which begins on the Ship Date. If any item of Bay Products
Software fails to so perform during its warranty period, as the sole
remedy, Nortel Networks will at its discretion provide a suitable
fix, patch or workaround for the problem, to be provided within three
(3) months from the date of the first notice of defect. For specific
Third Party Software included on the Price List which is distributed
by Nortel Networks as a licensee of third parties,
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PRODUCT ANNEX A.1
ATTACHMENT 1
any such additional warranty terms offered by such third parties to
end-users may apply and any such warranty may be assigned to Company
pursuant to Section 8.8 of the Agreement."
8.3.1 If requested by Company, Nortel Networks may design and
develop a Product for Company's use based upon written Company
Specifications or a Statement of Work outlining the various
functions and scalability requirements of the equipment or
software ("Design Project"). If Nortel Networks accepts the
Design Project, it will undertake to design and manufacture the
Product in conformity with such specifications and, upon delivery
of the Product, Nortel Networks warranty set forth in Section 8.3
shall apply to such Product.
8.3.2 If the Product delivered does not meet Company
Specifications and Company so notifies Nortel, then within five
(5) days of receipt of notice of defect, Nortel will advise
Company whether Nortel Networks will accept a return of the
defective Product at Nortel Networks' sole expense, or will
attempt to repair or correct the defect, or will provide
replacement Nortel Products. If the Product substantially
complies with, or materially conforms to Company Specifications
but otherwise fails to function as anticipated by Company, Nortel
Networks reserves the right to invoice Company for its
engineering and design costs incurred in manufacturing the
Product to Company Specifications.
ARTICLE 10, SECTION 10.12
With regard to the subject of remote polling, the following applies:
The right to remote poll shall not apply to Bay Networks Products
or Third Party Equipment.
ARTICLE 14, SECTION 14.3
Section 14.3 of the Agreement shall be inapplicable with respect to Bay Networks
Products.
ARTICLE 15, SECTION 15.17
With regard to the subject of prior agreements, the following shall apply:
"Company and Nortel recognize the existence of a Master Lease
Agreement ("Lease Agreement") dated October 7, 1998 between Company
and Bay Networks USA Inc. n/k/a Nortel Networks Inc. The Lease
Agreement shall not
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PRODUCT ANNEX A.1
ATTACHMENT 1
be rescinded by the execution of this Agreement, but the Lease
Agreement shall continue in full force and effect according to its
terms. Except to the extent the terms of the Lease Agreement are
inconsistent with this Agreement, the obligations of the parties shall
be governed by this Agreement. The Commitment Amount described in
Section 2.1.1 of this Product Annex A.1 is in addition to any Bay
Products purchased and received by the Company prior to the date of
this Agreement."
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