SUPPLY AGREEMENT
BETWEEN
COMPLETEL SAS
AND
MATRA NORTEL COMMUNICATIONS
THIS SUPPLY AGREEMENT (this "AGREEMENT") dated 8 January, 1999 is by and
between CompleTel, a Societe par Actions Simplifiee with an address of 00,
xxx Xxxxxxxxxx, 00000 Xxxxx Cedex 08 (the "CUSTOMER"), and Matra Nortel
Communications, a Societe par Actions Simplifiee with its registered office
at 00, xxx xx Xxxxxxxxx Xxxxxx, 00000 Quimper Xxxxx 0, Xxxxxx (the
"SUPPLIER").
WITNESSETH that in consideration of the mutual promises and covenants
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. SCOPE
1.1 DEFINITIONS. Capitalized terms used but not defined in this Agreement
shall have the meanings ascribed thereto in EXHIBIT A attached hereto.
1.2 SYSTEMS. The parties hereto agree and acknowledge that it is the
intention of the Customer to integrate Equipment and Software, by
utilizing the Supplier's Services, into one or more Systems, as provided
herein.
1.3 PURCHASES AND SALES. The Customer shall have the right to purchase, and
the Supplier shall be obligated to sell the Equipment, Documentation and
Software described in EXHIBIT B and extensions to the product lines
described therein to the extent and as provided in this Agreement. All
Equipment purchased by the Customer hereunder shall be New Equipment.
All such Equipment, Documentation and Services may be purchased, in whole
or in part, on a Turnkey Installation basis. The Supplier shall make
available to the Customer for purchase under this Agreement all
Equipment, Documentation and Services Supplier generally makes available
to Supplier's Customers at the time of an Order or within 6 months
thereafter.
1.4 LICENSES. The Customer shall have the right to acquire a license to, and
the Supplier shall be obligated to license to the Customer, the Software
to the extent and as provided in this Agreement. The Supplier shall make
available to the Customer for license under this Agreement all Software
Supplier generally makes available to Supplier's Customers at the time of
an Order or within 6 months thereafter.
2. TERM
This Agreement shall be effective as of the date first set forth above
and shall remain in effect for five years from such date ("TERM"). The
Parties may extend the Term or any subsequent term by executing a
separate written amendment of extension prior to the expiration of the
Term.
3. FORECASTS
3.1 DELIVERY OF SIX MONTH ROLLING FORECASTS. As soon as practicable
after the date hereof, and thereafter not less than 45
(forty-five) calendar days before the end of each calendar
quarter, the Customer shall deliver to the Supplier a non-binding
forecast of good faith estimated Orders expected to be submitted
by the Customer within the next two calendar quarters, broken down
by quarter (the "FORECAST"), such Forecasts to include
descriptions and quantities of all Equipment, Software and
Services estimated to be ordered within the next two calendar
quarters (specified by quarter). In addition, the forecast shall
specify the anticipated Systems and Subsystems included with such
Equipment, Software and Services.
3.2 REVIEW OF FORECAST. As soon as practicable after the Supplier's
receipt of the Forecast, the Supplier and the Customer shall
review the Forecast to the extent reasonably requested by the
Supplier. The Supplier shall notify the Customer not later than
10 (ten) calendar days after its receipt of the Forecast whether
it is acceptable to it, or if not, what changes would be necessary
to make it acceptable; PROVIDED, HOWEVER, that if the Forecast for
the first quarter covered thereby does not specify a greater
quantity of an item of Equipment or Software or a shorter delivery
time than the prior Forecast covering such quarter, it shall
automatically be deemed accepted by the Supplier as to such items
for the first quarter covered by such Forecast. To the extent of
any other changes to the Forecast for the first quarter and the
Forecast for the second quarter covered thereby, the parties shall
endeavour in good faith to agree upon those portions of the
Forecast as soon as practicable. If the Supplier has not notified
the Customer within 15 (fifteen) calendar days after its receipt
of the Forecast of its non-acceptance thereof, it shall be deemed
accepted.
4. ORDERING
4.1 ORDERS. All purchases of Equipment, Documentation and Services,
and licensing of Software, by the Customer pursuant to this
Agreement shall be made by means of one or more purchase orders
(each an "ORDER" or collectively "ORDERS" as the context may
require) issued from time to time by the Customer in writing.
Each Order shall set forth in reasonable detail:
(a) The Order number and date of issuance;
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(b) The Equipment, Software and Services ordered, including the
applicable price therefor (either by reference to the price
list attached as EXHIBIT D or otherwise) and any applicable
discounts (the "PRICE");
(c) Requested place of delivery (the "DESTINATION") and, if
different than the Destination, the Site for Installation;
(d) Each Subsystem, System and Group of Assets, if different,
included in such Order and the interconnections required;
(e) The Project Schedule, which shall specify the requested
delivery date, the scheduled Site Readiness Date and the
Target Acceptance Date for each Subsystem, System and Group
of Assets covered by such Order; PROVIDED THAT, the
delivery date shall not be less than 45 (forty-five)
calendar days after the date of such Order issuance;
(f) If Equipment is being ordered, whether the Supplier is to
(i) furnish the Equipment without engineering or
Installation Services ("FO ORDERS"), (ii) furnish the
Equipment with engineering Services only ("E&F ORDERS"),
(iii) furnish the Equipment with Installation Services only
("F&I ORDERS") or (iv) furnish the Equipment with
engineering and Installation services ("EF&I ORDERS");
(g) With respect to each E&F Order, F&I Order and EF&I Order,
the specific engineering and Installation Services to be
performed by the Supplier;
(h) All applicable requirements regarding Commissioning testing
and procedures, including, if applicable, any changes or
additions to the tests and procedures set forth in
EXHIBIT E; and
(i) Other appropriate information as may be mutually agreed by
the parties.
4.2 TIMING OF ORDERS. Except as may be agreed to by the Supplier, any
Order must be placed with the Supplier by giving written notice of
such Order (the "Order Notice") at least 45 (forty-five) calendar
days before the quarter in which the ordered Equipment, Software
and Services are to be delivered, at the following address:
Matra Nortel Communications
33, quai Xxxx Xxxxxx
Paris La Defense
92415 Courbevoie Cedex - France
To the Attention of: CompleTel Account Manager
Any notice of communication sent under this Agreement shall be
deemed given upon receipt.
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4.3 ACCEPTANCE OF ORDERS BY THE SUPPLIER.
4.3.1 Each written Order placed by the Customer in compliance
with the provisions of this Agreement (including, without
limitation, the Order Notice provisions of SECTION 4.2)
that is within (i) the Customer's most current Forecast (as
accepted by the Supplier in accordance with SECTIONS 3.2
AND 3.3) shall be deemed an Accepted Order, and shall bind
the Supplier to honour all dates, amounts and other
requirements set forth in the Order upon receipt by the
Supplier unless, subject to SECTION 4.4.2, the Supplier
notifies the Customer of errors or inconsistencies in such
Order within 10 (ten) Working Days of the Supplier's
receipt of such Order and states in such Order Notice that
it has not accepted such Order, in which case the terms of
SECTION 4.3.3 shall apply.
4.3.2 Any Equipment or Software ordered which is in excess of 10%
more than the amount set forth for such item in the most
recent Forecast that has been accepted by the Supplier
under SECTION 3.2, shall be subject to the Supplier's
ability to deliver.
4.3.3 If the Customer submits an Order with lead times that are
shorter than the lead times set forth on the Forecast for
the relevant period, provided that such order is otherwise
accepted pursuant to SECTION 4.3.1, the Supplier shall use
commercially reasonable efforts to accommodate the lead
times set forth in such Order, and shall, within 10 (ten)
Working Days, indicate in writing to the Customer whether
such shortened lead times are acceptable. If such
shortened lead times are unacceptable, the Customer and the
Supplier shall endeavour to agree upon mutually acceptable
lead times.
4.3.4 Other than as provided in SECTION 4.3.2 and subject to
SECTION 4.4.2, if the Customer submits an Order for
Equipment, Software or Services that is not in compliance
with the provisions of this Agreement, then the Customer
and the Supplier shall endeavour in good faith to agree
upon mutually acceptable terms for such Order, and such
Order, if accepted by the Supplier by an Order Notice to
the Customer shall be an Accepted Order, which shall bind
the Supplier to honour all dates, amounts and other
requirements set forth in the Order.
4.4 FORM OF ORDERS.
4.4.1 Notwithstanding that an Order may not refer to this
Agreement, any Order issued by the Customer during the Term
shall be deemed to have been issued pursuant to this
Agreement and shall be governed by the terms and conditions
of this Agreement, unless the parties expressly agree to
the contrary in writing.
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4.4.2 Preprinted terms or conditions on the applicable order
shall be deemed deleted and of no force or effect and shall
not provide the basis for non-acceptance by the Supplier of
any Order.
4.5 CHANGE ORDERS.
4.5.1 Except as set forth below, any change to an Accepted Order,
shall be negotiated by the parties in good faith and shall
be mutually agreed upon and subsequently detailed in a
written change to the Order ("CHANGE ORDER"), referencing
the original Order and signed by authorized representatives
of the Customer and the Supplier. Changes to the
Destination or Installation within France within the same
metropolitan area as the original Destination Site shall
not require an agreement (and shall not result in any
adjustment to price or delivery date).
4.5.2 The Customer may change the Destination or Site by Order
Notice to the Supplier at least 5 Working Days prior to the
scheduled delivery or Installation date, as the case may
be, for Equipment (other than Switching Equipment).
4.5.3 Any resulting adjustment to the Order prices for Equipment
to be delivered outside of France shall be based on prices
set forth in EXHIBIT D. Charges for any Services
associated with a Change Order shall be as mutually agreed
to by the Customer and the Supplier prior to execution of
the Change Order. In the event that the Change Order
affects work already performed, the adjustment of the Order
price shall include reasonable charges incurred by the
Supplier related to such work.
5. PRICES
5.1 GENERAL.
5.1.1 The prices, fees and discount schedules for Equipment,
Software, Documentation and Services are set forth on
EXHIBIT D, PROVIDED THAT, if the price determined pursuant
to SECTION 5.1.3 (as if the Equipment , Software or
Services were not set forth on EXHIBIT D) or SECTION 5.6
would be lower, than that price shall apply. For the
avoidance of doubt, prices for all Installation Services
related to Transmission Equipment are included in the price
of such Transmission Equipment.
5.1.2 All such prices referred to in SECTION 5.1.1 in U.S.
Dollars shall be fixed and guaranteed for the Term of this
Agreement, subject to the provisions of SECTION 5.6.
5.1.3 Prices for Equipment, Software, Documentation and Services
not set forth in EXHIBIT D, if not otherwise set forth in
this Agreement, shall be no greater than the lesser of (a)
the Supplier's list prices in effect on the date
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of ordering by the Customer, subject to any applicable
discounts made available to the Customer with respect to
items within the same category under this Agreement, or (b)
prices generally made available to Supplier's Customers at
the time of ordering by the Customer.
5.2 PRICES INCLUSIVE. The unit prices of Equipment include use of the
applicable Software and one complete set of all manuals and
Documentation required by the Customer for such Equipment and
Software (except as otherwise provided herein, in an Exhibit
hereto or in any Accepted Order). Prices for any additional sets
of Documentation (or portions thereof) shall be those set forth in
EXHIBIT D. The Supplier represents that the Documentation, in
conjunction with appropriate training, is all that is reasonably
necessary to use, maintain and operate the Equipment, Software and
Systems sold or licensed to the Customer pursuant to this
Agreement.
5.3 FREIGHT. All prices for Equipment and Software set forth in
EXHIBIT D are, and all prices for Equipment or Software to be
charged in the future shall be Delivered Duty Paid, VAT unpaid [at
named place of Destination] ("DDP (Destination)").
5.4 INSURANCE. The Supplier will pay for all insurance costs
associated with shipment of the Equipment and Software to the
Destination specified in the applicable Order or a Change Order
made in accordance with SECTION 4.5.
5.5 TAXES. Equipment prices and charges for any Services set forth in
EXHIBIT D do not include Value Added Tax or sales tax, which if
applicable will be identified separately on the invoice and
payable by the Customer as an addition to the Price.
5.6 MOST FAVOURED CUSTOMER PRICING.
5.6.1 The Supplier warrants that the prices set forth in Section
5 and/or in Exhibit D to this Agreement are substantially
as favourable as prices offered or charged by the Supplier
to other customers, for any comparable system providing
similar functionality after adjusting such other customers
prices for sales volume, financing, payment terms, unusual
warranties, technology related differences and any other
commercial terms.
5.6.2 Each calendar year, and no later than thirty (30) days
after the anniversary date of this Agreement, the parties
shall meet to review and negotiate in good faith prices to
be charged by the Supplier for any Order for Equipment,
Documentation, Services and Software, to be placed by the
Customer during the next twelve (12) months from such
anniversary date of this Agreement to assure that the
prices set forth in Section 5 and/or in Exhibit D to this
Agreement continue to be consistent with the above
provision; PROVIDED, HOWEVER, that unless and until the
parties agree on revised prices, the prices that were in
effect immediately prior to any such negotiations shall
continue in effect.
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5.7 VOLUME DISCOUNT. The purchase price for all Equipment,
Documentation and Services purchased or to be purchased and
Software licensed or to be licensed by the Customer or any
Affiliate Customer hereunder or under any Additional Agreement
from and after the effective date of this Agreement shall include
the applicable Sales Volume Discount. "SALES VOLUME DISCOUNT"
shall mean 2% of the price stated in EXHIBIT D or otherwise agreed
to in a Purchase Order for all purchases from the Supplier under
this Agreement. The Sales Volume Discount shall be deducted from
amounts otherwise payable pursuant to EXHIBIT D or otherwise
agreed to in a Purchase Order. In the event that the purchases
by the Customer and its Affiliates from the Supplier and the
Affiliate Suppliers does not equal or exceed US $35 million in any
calendar year, the Sales Volume Discount for that year shall be
reduced to 1% of such price for all purchases ordered and paid for
during that calendar year, and the Customer shall pay to the
Supplier within 60 days after the end of the calendar year an
amount equal to the difference between (i) the purchase or license
price that would have been payable for all Equipment, Software,
Documentation and Services purchased or licensed during the
relevant calendar year if the Sales Volume Discount had been 1%,
and (ii) the actual purchase or license price paid for all such
Equipment, Software, Documentation and Services during such
calendar year.
6. TAXES [Intentionally Omitted for this Agreement]
7. DELIVERY; RISK OF LOSS; TITLE
7.1 DELIVERY SCHEDULE. Delivery of Equipment, Software, Documentation
and Services shall be made to the Site and in accordance with the
schedule provided in an Accepted Order; subject to any Change
Order made in accordance with SECTION 4.5.
7.2 TITLE. Title to each item of Equipment furnished by the Supplier
to the Customer in accordance with this Agreement shall pass to
the Customer on the date of Acceptance of the Subsystem relating
to such Equipment. The Supplier warrants to the Customer that
such title shall be good and defensible, free and clear of all
liens and encumbrances as of the date title passes. Title to
Software shall not pass to the Customer at any time. The Supplier
warrants that it has the right to grant to the Customer the
licenses granted hereunder.
7.3 RISK OF LOSS. Risk of loss with respect to each item of Equipment
or Software shall pass to the Customer upon delivery of such item
to the Customer at the Customer's Destination; PROVIDED, THAT
nothing contained in this SECTION 7.3 shall relieve the supplier
of liability under SECTION 17.
7.4 SPARES. The Supplier shall maintain in its warehouse, at no
charge to the Customer a one-month's supply of the greater of
(a) the Supplier's recommended level of spares for the Equipment
and the component parts thereof previously ordered by the
Customer, and (b) the one-month average of the quantity of
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Equipment and the component parts thereof ordered by the Customer
in the immediately preceding four months.
7.5 PRIORITY SHIPPING. In the event of a delay in the performance of
the Supplier's obligations hereunder (other than as a result of a
Change Order causing such delay), the Supplier shall use all
reasonable endeavours (including without limitation assigning
additional personnel and reallocating resources) to minimize or
cure the delays at the Supplier's cost. In the event of a delay
in the delivery of Equipment or Software which is the subject of
an Accepted Order beyond the delivery date specified in such Order
therefor, and such delay is not excused under the provisions of
SECTION 14, upon the Customer's request shipment of the delayed
Equipment or Software when ready to ship shall be made specifying
priority transportation at the Supplier's sole cost.
8. PAYMENT
8.1 CURRENCY. All prices and fees shall be stated, all invoices shall
be issued, and all payments shall be made, in US Dollars unless
payment in EURO is required by law (as expressed in a legal
opinion satisfactory to the Customer), in which case payments
shall be in an amount of EURO determined by the US Dollar/EURO
exchange rate in effect at the date the payment is to be made
(such exchange rate to be the published exchange rate of the
European Central Bank). The Customer shall also have the right to
elect at the time of the Order, that the prices and fees shall be
stated, all invoices shall be issued, and all payments shall be
made, in EURO based upon an exchange rate between the US Dollar
and the EURO determined at the time the Order is placed (such rate
to be the published rate of the European Central Bank).
8.2 INVOICES. The Supplier shall invoice the Customer for Equipment,
Software and Documentation for the appropriate amounts and at the
appropriate times in accordance with SECTION 8.3, 8.4 OR 8.5. The
Supplier shall invoice the Customer for Services as set forth in
SECTION 8.6 OR 8.7, as applicable. Each invoice shall specify
whether it is partial or final. No preprinted term or condition
of any invoice shall be binding upon the Customer. Payments shall
be due 30 days from receipt of invoice (assuming invoices were
given in accordance with the applicable provisions of this SECTION
8).
8.3 SWITCHING EQUIPMENT. With respect to the Switching Equipment, the
Supplier shall invoice to the Customer the aggregate price
therefor in accordance with SECTION 8.2, based on the following
schedule:
(i) 10% of the aggregate purchase price of such Switching
Equipment when the Order is accepted or otherwise
acknowledged as provided in SECTION 4.3 ;
(ii) 50% of the aggregate purchase price, upon the delivery of
such Switching Equipment at Destination as provided in
SECTION 7.1;
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(iii) 25% of the aggregate purchase price, on Acceptance by the
Customer of the Subsystem to which such Switching Equipment
relates;
(iv) 10% of the aggregate purchase price, on Acceptance by the
Customer of the System to which such Switching Equipment
relates;
(v) the remaining 5% on the earlier of (A) Final Acceptance of
the Group of Assets to which such Switching Equipment
relates; and (B) 90 (ninety) calendar days after the last
Target Acceptance Date included in the applicable Order for
all Subsystems, Equipment and Services covered thereby;
PROVIDED, HOWEVER, that the final payment shall only be due
with respect to Equipment that has been Accepted and for
which Acceptance has occurred to any Subsystem and System
to which such Switching Equipment relates.
8.4 TRANSMISSION EQUIPMENT AND NETWORK MANAGEMENT SYSTEM. With
respect to Transmission Equipment, Network Management System
Equipment and Software and other Equipment (excluding Switching
Equipment) and Software ("OTHER PRODUCTS"), the Supplier shall
invoice to the Customer the aggregate price therefor in accordance
with SECTION 8.2, based on the following schedule:
(i) 60% of the aggregate purchase price of such Other Products
after delivery to the Customer of such Other Products to
the Customer to the Destination specified in the applicable
Order or a Change Order made in accordance with SECTION
4.5;
(ii) 25% of the aggregate purchase price, on Acceptance by the
Customer of the Subsystem to which such Other Products
relates;
(iii) 10% of the aggregate purchase price, on Acceptance by the
Customer of the System to which such Other Products
relates;
(iv) the remaining 5% on the earlier of (A) Final Acceptance of
the Group of Assets to which such Other Products relates;
and (B) 90 (ninety) calendar days after the last Target
Acceptance Date included in the applicable Order for all
Other Products and Services covered thereby; PROVIDED,
HOWEVER, that the final payment shall only be due with
respect to Other Products that have been Accepted and for
which Acceptance has occurred to any Subsystem and System
to which such Other Products or Services relates.
8.5 SPARES AND DOCUMENTATION. The Supplier shall invoice the Customer
for the full purchase price of all Spares in accordance with the
procedures set forth in EXHIBIT D.
8.6 FIRST LINE MAINTENANCE SERVICES. The Supplier shall invoice the
Customer for First Line Maintenance Services in accordance with
the procedures set forth in EXHIBIT D.
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8.7 TECHNICAL SUPPORT SERVICES AND NETWORK OPERATIONS CENTER SERVICES.
The Supplier shall invoice the Customer for Technical Support
Services and Network Operations Center Services in accordance with
the procedures set forth in EXHIBIT D.
8.8 PAYMENT NOT ACCEPTANCE. Any payments by the Customer in
accordance with this Agreement shall not constitute Acceptance.
8.9 DISPUTES AS TO INVOICES. The Customer is not required to pay
invoiced amounts that the Customer disputes until such dispute is
resolved, PROVIDED the Customer notifies the Supplier in writing
of such dispute prior to 15 (fifteen) Working Days after receiving
such invoice. Once such dispute is resolved, the Customer shall
pay such invoice within 30 (thirty) calendar days following the
resolution of such dispute. The Supplier shall continue to
provide Equipment, Documentation, Software and Services without
interruption in the event of disputes concerning payment or other
provisions of this Agreement. If the dispute has not been
resolved within one hundred calendar days from the Customer's
Notice to the Supplier of such dispute, the Supplier reserves the
right to put the work directly related to such dispute on hold
pending resolution of such dispute.
9. TECHNICAL SPECIFICATIONS
9.1 SPECIFICATIONS. The Supplier's Specifications, including drawings
relating to Equipment and Software ordered, and including the
Specifications in EXHIBIT B, entitled "Product Descriptions" are
hereby made a part of this Agreement for the purposes of each
Order.
9.2 DRAWINGS. The Supplier shall provide, as requested by the
Customer and at no charge, any applicable drawings and updates
thereof. The Supplier shall also provide, at no charge, and on an
ongoing basis, a current index of all drawings, showing latest
issue number, as well as complete descriptive information. If the
Customer requires an additional copy of the Supplier's drawings
and index, such drawings and index shall be made available to the
Customer at no charge. The Supplier shall provide with each
Order, current applicable drawings in the type of media as
specified by the Customer. Such drawings shall be delivered to
the Destination specified in the applicable Order.
9.3 SITE PREPARATION SPECIFICATIONS. The Supplier shall promptly
furnish for each Order, standard site preparation Specifications,
if applicable, in such detail to ensure that Equipment can be
properly installed. The Customer shall prepare the Site at its
own expense. If any alterations or modifications are required in
site preparation which are attributable to either parties
incomplete or erroneous Specifications, such alterations or
modifications shall be made at the cost of the party causing such
alterations or modifications.
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9.4 REPRODUCTION. The Customer shall have the right to reproduce
Specifications, including drawings and updates thereof, for use by
the Customer for engineering, installing, maintaining, repairing
and operating Equipment and Software.
10. SOFTWARE LICENSE
10.1 LICENSE. Software provided under this Agreement is either
licensed or sublicensed by the Supplier to the Customer. The
Customer is hereby granted a perpetual non-exclusive, license to
use the Software and, to the extent necessary to support and
maintain the Software, to de-bug, enhance and otherwise modify the
Software (the "SOFTWARE RIGHT TO USE"). For the period of the
longer of (a) until the end of the Term and (b) one year, the
Supplier shall provide to the Customer all updates (including,
without limitation, fault correcting updates), revisions and new
versions of the Software licenced or sublicensed by the Customer
under this Agreement to the extent, but only to the extent, they
do not add additional functionality for which Supplier generally
charges its other customers; PROVIDED that in determining what
software Customer is entitled to receive without charge, if it is
possible to lock off features that provide additional
functionality without destroying the integrity or functionality of
the Software, then Customer shall be entitled to the upgrades to
the features and functionality it originally paid for without
additional charge.
10.2 SUPPLIER'S/SUPPLIER'S LICENSOR'S EXCLUSIVE PROPERTY. The Customer
agrees that the Software shall, as between the parties hereto and
subject to the license granted hereunder, be treated as the
exclusive property of the Supplier or the Supplier's licensors, as
appropriate, and the Customer shall:
(a) hold the Software (including any methods or concepts
utilized therein) in confidence for the benefit of the
Supplier or the Supplier's licensors as appropriate in
accordance with SECTION 16 unless such Software or the
methods or concepts utilized therein are already in the
public domain (other than through Customer's breach of this
Agreement);
(b) not duplicate, copy, or modify the Software in whole or in
part except solely for backup or archival purposes, or to
the extent provided in the Nortel Letter Agreement, to
maintain and support the Software;
(c) not decompile or attempt to reverse engineer the Software;
(d) destroy or forthwith return to the Supplier any Software
component or Documentation that has been replaced,
modified, or updated.
10.3 ASSIGNMENTS AND SUBLICENSES.
10.3.1 The Customer may transfer or assign any license granted by
the Supplier hereunder to any parent, subsidiary of parent,
subsidiary, Affiliate, owner,
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part owner, successor or related company of the Customer
upon prior Notice to the Supplier.
10.3.2 The Customer and any successor to the Customer's title in
the Equipment shall have the right without prior written
consent of the Supplier (a) to assign any license of the
Software to a third party in addition to those set forth in
SECTION 10.3.1 who acquires legal title to the Equipment,
or (b) to sublicense the rights herein granted to any such
third party who subsequently acquires the right to use the
Equipment, PROVIDED THAT any such third party (either
assignee or sublicensee) agrees to abide by the terms and
conditions of this license, in which case the Customer
shall be relieved of any obligations hereunder with respect
to the Software the license of which is so assigned or
sublicensed; PROVIDED, FURTHER, if the Software and related
Equipment are removed from France and such assignment or
sublicense was made without Supplier's prior written
consent, then Supplier's obligations under SECTION 15
(Infringement) shall not extend to such Software.
10.4 SURVIVAL. The license contained herein and the obligations of the
Customer hereunder shall survive the termination of this
Agreement, regardless of the cause of termination.
11. CUSTOMER'S AND SUPPLIER'S OBLIGATIONS
11.1 CUSTOMER'S OBLIGATIONS. In order to enable the Supplier to
perform the Supplier's obligations pursuant to E&F Orders, F&I
Orders and EF&I Orders, the Customer agrees to fulfill any of its
obligations specified in EXHIBIT F and any others that may be
mutually agreed between the Customer and Supplier in relation to a
specific Order.
11.1.1 The Customer shall provide the Supplier with a Site which
is Site Ready for Installation on or before the date
specified in the Project Schedule included in the
applicable Order; PROVIDED, HOWEVER, if the Site is not
Site Ready on the Scheduled Site Readiness Date then the
Supplier shall have the right to request an extension of
the related Target Acceptance Date on a day-for-day basis
that the Site Readiness Date is delayed beyond its
Scheduled Site Readiness Date. Failure of the Customer to
meet the Site Readiness Date shall result in the rights
described in this SECTION 11.1.1, but shall not constitute
a breach of this Agreement by the Customer or give rise to
any other rights or claims by the Supplier.
11.2 SUPPLIER'S OBLIGATIONS.
11.2.1 The Supplier shall, at no additional charge, package
Equipment and Software in a suitable manner in accordance
with all applicable laws and regulations and provide
protection against damage during shipment
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and handling. All Equipment and Software shall be shipped
DDP (Destination).
11.2.2 To the extent that it does not conflict with any non
disclosure or confidentiality agreements previously entered
into with any third parties, the Supplier agrees, at no
charge to the Customer, (i) to provide the Customer with
reasonably available market data for business case
modelling for each territory in which any Systems are to be
implemented, and (ii) to assist the Customer in acquiring
in each such territory interconnect access with any local
telecommunications providers with which the Supplier has a
relationship and to use commercially reasonably efforts to
cause any of its Affiliates to do the same.
11.2.3 Provided that Sites are ready for Installation and
Commissioning of Equipment, the Supplier shall furnish at
its own cost and expense all labour, supervision,
machinery, tools, equipment, fuel, power, materials,
expendable supplies, transportation, licenses, permits,
bonds, and all other items that may be required or
appropriate in the procurement of Systems, Equipment or
Software, except the Customer's operating licenses and
other items that the Customer specifically agrees to
furnish.
11.2.4 The Supplier will upon the reasonable request of the
Customer provide the Customer with reports containing
information requested by the Customer, which may include
but are not limited to: (i) a list and description of all
Equipment, Software, Documentation and Services Ordered by
the Customer during a particular period; (ii) the prices
therefor and (iii) a statement as to which such Orders have
been performed and which are pending; and a statement as to
the status of all pending Orders.
11.2.5 The Supplier shall supply all future updates, revisions and
corrections of Documentation necessary for the Customer's
use of all Systems, Equipment and Software. The Customer
shall have the right to reproduce and translate the
Documentation for the purpose of engineering, maintaining,
repairing and operating all Systems, Equipment and
Software. Reproductions and translations of Documentation
shall include copyright or similar proprietary notices.
The Customer may request, from time to time, that
Documentation be provided in hard copy, by CDRom or other
reasonably available technology.
12. ACCEPTANCE
12.1 DEFINITION OF ACCEPTANCE. "ACCEPTANCE" shall mean, with respect
to a System, Subsystem, Group of Assets or any item of Equipment
or Software, that such System, Subsystem, Group of Assets or item
of Equipment or Software, as the case may be, (i) meets each of
the Specifications, (ii) has successfully completed Commissioning
in accordance with EXHIBIT E (as it may be modified pursuant to
SECTION 12.2), if the Supplier performs Installation Services,
(iii) meets all
13
requirements of this Agreement and any Accepted Order, and (iv)
has been put In-Service, in each case in accordance with this
SECTION 12, and the parties have signed an Acceptance Certificate
in accordance with SECTION 12.3.
12.2 TESTS AND PROCEDURES. EXHIBIT E is a detailed description of the
tests and procedures to be performed to ensure that all applicable
Equipment, Software, Systems and Subsystems meet each of the
Specifications. The Customer and the Supplier recognize that such
tests and procedures (i) may be modified or supplemented, if
applicable, by the reasonable request of the Customer in the
Project Schedule included in an Order, or otherwise by mutual
agreement of the parties hereto, and (ii) may require updating
from time to time but requests for such updating shall not be made
later than 10 (ten) Working Days before Commissioning tests are
scheduled to commence; and the parties hereto agree to work in
good faith to agree upon any update or modification prior to the
commencement of Commissioning tests after a reasonable request for
an update or modification is made by either party.
12.3 CERTIFICATE OF TEST RESULTS; NON-ACCEPTANCE. The Supplier shall
notify the Customer as soon as it knows, but at least 5 (five)
Working Days before the date on which Commissioning (as agreed
pursuant to SECTION 12.2) will be conducted with respect to any
System, Subsystem, Group of Assets or item of Equipment or
Software. The Supplier and the Customer (or the Customer's
nominee) shall jointly conduct the Commissioning tests. If
neither the Customer nor its nominee attends the Commissioning
tests, the Supplier shall proceed with the tests and immediately
forward the test results (including actual test sequences,
deviations and retests necessary to obtain successful conclusion)
to the Customer.
12.3.1 If any System, Subsystem, Group of Assets or item of
Equipment or Software does not meet each of the applicable
Specifications, fails to pass all Commissioning tests or
otherwise does not fulfill the applicable criteria set
forth in EXHIBIT E (as it may be modified pursuant to
SECTION 12.2), the Supplier shall, at its expense, correct
the defects as soon as practicable. Commissioning and
other testing (or so much of it as necessary) shall be
recommenced immediately after such correction in accordance
with this SECTION 12.
12.3.2 Upon the successful completion of the Commissioning tests
to the Supplier's satisfaction, the Supplier shall submit
to the Customer a certificate certifying the test results
(the "CERTIFICATE OF TEST RESULTS") and stating that the
System, Subsystem, Group of Assets or applicable Equipment
and Software has been Installed in accordance with the
requirements of this Agreement (if the Supplier was to
Install such System or Equipment and Software) and that the
applicable System, Subsystem, Group of Assets, Equipment
and Software has passed all Commissioning tests and
performs in accordance with the requirements of this
Agreement.
14
12.3.3 Upon receipt of the Certificate of Test Results, the
Customer (or its designee) may, at its own expense, retest
the applicable System, Subsystem, Group of Assets,
Equipment or Software for conformity with the
Specifications, satisfaction of the Commissioning tests and
the other requirements set forth in EXHIBIT E (as it may be
modified pursuant to SECTION 12.2). If such tests, retests
or inspections conducted by the Customer (or its designee)
indicate that the System, Subsystem, Group of Assets,
Equipment or Software does not comply with the
Specifications, does not satisfy the Commissioning tests or
otherwise does not fulfill all of the requirements set
forth in EXHIBIT E, (as it may be modified pursuant to
SECTION 12.2), the Customer shall deliver written notice of
such noncompliance to the "CompleTel Project Manager" at
Supplier's offices at the address specified in SECTION 4.2
for Order Notices specifying in detail the tests, retests
or inspections performed and the results obtained, and
Acceptance thereof shall not occur. The Supplier shall at
its own expense, promptly take whatever action is necessary
to correct such deficiencies, including if necessary
replacement of rejected purchases, and shall provide the
Customer's CTO with written notice of correction, which
shall be deemed to be a delivery by the Supplier of a new
Certificate of Test Results for purposes of SECTION 12.3.2;
and the terms of SECTION 12.3.3 AND 12.3.4 shall apply to
such new Certificate.
12.3.4 If the Customer either (i) has not provided written notice
pursuant to SECTION 12.3.3 that it intends to test, retest
or inspect the applicable System, Subsystem, Group of
Assets, Equipment or Software with respect to a Certificate
of Test Results or has not otherwise provided written
notice to the "CompleTel Project Manager" at Supplier's
offices at the address specified in SECTION 4.2 for Order
Notices that any such System, Subsystem, Group of Assets,
Equipment or Software is not acceptable or (ii) has
determined that the Systems, Subsystems, Group of Assets,
Equipment and Software, as applicable, are acceptable, then
the Customer shall promptly sign the applicable Acceptance
Certificate and deliver it to the Supplier evidencing that
Acceptance has occurred with respect to all Systems,
Subsystems, Groups of Assets Equipment and Software that
are the subject of such Acceptance Certificate. At such
time, any items identified as remaining outstanding and
which Customer did not consider at that time as material
enough to prevent Acceptance from occurring with respect to
the applicable System, Subsystem, Equipment or Software
shall be identified ("DEFICIENCY LIST ITEMS") and the list
attached to the applicable Acceptance Certificate. The
Supplier shall, within 5 Working Days after its receipt of
an executed Acceptance Certificate, complete and correct
all deficiency list items at the Supplier's expense. Upon
resolution of deficiency list items by the Supplier, the
Supplier shall submit to the Customer a certificate
verifying that no further deficiency list items remain
unresolved, and the Customer shall execute such certificate
and return it to the Supplier within 5 Working Days if it
concurs. "Final Acceptance" of a Group of Assets shall not
be considered to have occurred until all Systems,
15
Subsystems, Equipment and Software included in the
applicable Order have been Accepted and all deficiency list
items for all items included in such Group of Assets have
been corrected except for pre-agreed minor and/or
non-service affecting deficiencies.
12.4 SPECIFICATIONS. The Supplier acknowledges that the Customer, in
entering into this Agreement, is relying on the Supplier's
assurances that any System ordered by the Customer will perform in
accordance with the Specifications.
12.5 LIQUIDATED DAMAGES. If the Supplier, other than for reasons of
Force Majeure or as a consequence of acts or omissions of the
Customer or third parties' under Customer's control, fails to
achieve Acceptance by the Target Acceptance Date specified in the
applicable Order with respect to any System, then the Supplier
shall pay to the Customer by way of liquidated damages the amount
of liquidated damages calculated as set forth below, being a
genuine pre-estimate of the likely damages that the Customer will
suffer resulting from delay in the period from the Target
Acceptance Date of such System, until actual date of Acceptance
thereof.
12.5.1 If the System in delay is included in the Initial Purchase
Order attached hereto as EXHIBIT I, then the liquidated
damages payable with respect to such System shall be an
amount equal to the percentage set out below of the price
of the System in delay:
0.4286% thereof per day for the first 7 calendar days of
delay;
0.1426% thereof per day for the next 7 calendar days of
delay;
0.1426% thereof per day for the next 7 calendar days of
delay;
0.2857% thereof per day for the next 7 calendar days of
delay;
0.4286% thereof per day for the next 7 calendar days of
delay,
0.1426% thereof per day for the next 35 calendar days of
delay,
up to a maximum of 15% (fifteen per cent) of the price of the
System in delay as set out on the applicable Order, but in no
event shall the liquidated damages payable for all Systems
included in the Initial Purchase Order exceed 10% of the Order
Price of the Group of Assets subject to such Order.
12.5.2 If the System in delay is not included in the Initial
Purchase Order attached hereto as EXHIBIT I, then the
liquidated damages payable with respect to such System
shall be an amount equal to the percentage set out below of
the price of the System in delay:
0.4286% thereof per day for the first 7 calendar days of
delay;
16
0.1426% thereof per day for the next 7 calendar days of
delay;
0.1426% thereof per day for the next 7 calendar days of
delay;
0.2857% thereof per day for the next 7 calendar days of
delay;
0.4286% thereof per day for the next 7 calendar days of
delay,
0.1426% thereof per day for the next 14 calendar days of
delay,
up to a maximum of 12% (twelve per cent) of the price of the
System in delay as set out on the applicable Order, but in no
event shall the liquidated damages payable for all Systems
included in any one Order exceed 10% of the Order Price of the
Group of Assets subject to such Order.
12.5.3 The sum determined as set out in SECTION 12.5.1 OR 12.5.2,
as applicable, shall be in full and final satisfaction of
the Supplier's liability for delay for such period. Once
the liquidated damages under this SECTION 12.5 reach the
maximum amount specified above with respect to any System
in delay, the Customer shall have only the additional
rights and remedies set forth in SECTIONS 12.6, 13, 17 AND
19 with respect to such System.
12.6 REMEDIES FOR NONACCEPTANCE OR DELAY.
12.6.1 NON-ACCEPTANCE. If the Supplier has not provided the
Customer a Certificate of Test results showing successful
completion of the Commissioning tests by the applicable
Target Acceptance Date, or if the Customer has otherwise
notified the Supplier that any System or any item of
Equipment or Software is not acceptable and the Supplier
has failed to make all such necessary corrections or
replacements to the Customer's satisfaction, then at the
Customer's request, (i) the Customer shall have no
obligation to pay for such rejected items, and (ii) the
Supplier shall refund to the Customer all amounts
previously paid by the Customer for such rejected Systems,
Equipment or Software (including without limitation all
amounts paid pursuant to SECTION 8) and will be liable for
any additional costs, expenses or damages resulting
therefrom in accordance with SECTIONS 13 AND 19, as
applicable. The Supplier shall remove the non-accepted
purchases and reimburse the Customer for all costs of
removing and returning such purchases to the Supplier.
12.6.2 DELAY. Should any dispute or matter of difference arise
between the Supplier and the Customer as to the existence
of any delay in the performance by the Supplier of its
obligations under the Agreement, the length of the delay,
the reasons for such delay, any excuse for delay or the
interpretation or enforcement of this SECTION 12, such
dispute or matter of difference shall be resolved by
dispute resolution in accordance with SECTION 20.
17
13. WARRANTIES
13.1 EQUIPMENT WARRANTY. The Supplier warrants that Equipment supplied
hereunder, excluding Software, will be free from defective
material and faulty workmanship, will be free from defects in
design (except any portion of such Equipment manufactured or
developed in accordance with a detailed design furnished by the
Customer and for which the Supplier has notified the Customer in
writing in advance that the Supplier is not warranting the design)
and will conform to the applicable Specifications, Documentation,
statements of work and other requirements set forth in this
Agreement, including any applicable Orders, for a period of 24
months from the last day of the calendar quarter in which
Acceptance as set forth in SECTION 12 occurs with respect to the
Subsystem in which such Equipment is included (the "EQUIPMENT
WARRANTY PERIOD"). Any repair or replacement of defective
Equipment shall be warranted for a period equal to 12 months from
the date of such repair or replacement.
13.2 SERVICES WARRANTY. The Supplier shall perform Services with
promptness and diligence which Services shall be performed in
accordance with the highest standards in the industry, to the
reasonable satisfaction of the Customer. In addition, the
Supplier warrants that any Services performed by the Supplier will
be free from defects in workmanship and will conform to all
statements of work and other requirements set forth in this
Agreement, including any applicable Orders, for the duration of
the Equipment Warranty Period with respect to the Equipment
related to such Services.
13.3 SOFTWARE WARRANTY. With respect to all Software embedded or
otherwise included in, or licensed for use with, Equipment
purchased under this Agreement, the Supplier warrants to the
Customer that any such Software shall function during the
Equipment Warranty Period of such Equipment without material
service-affecting deficiencies which result from a defect in the
Software and shall perform in accordance with all Specifications,
Documentation, statements of work and all other requirements set
forth in this Agreement, including any applicable Orders. With
respect to all other Software licensed under this Agreement, the
Supplier warrants to the Customer that any such Software shall
function without material service-affecting deficiencies which
result from a defect in the Software and shall perform in
accordance with all Specifications, Documentation, statements of
work and all other requirements set forth in this Agreement,
including any applicable Orders.
13.4 REMEDIES FOR BREACH OF WARRANTY.
13.4.1 In addition to any other obligations the Supplier may have
under EXHIBIT C to respond to a fault, and not as a
limitation on such obligations, the Supplier agrees to
commence work on all Equipment, Software or Installation
defects not materially affecting System performance,
service to subscribers, data collection as it relates to
billing, networking,
18
administration or maintenance within two Working Days of
notification thereof and will cure the same as promptly
as practicable.
13.4.2 In addition to any other obligations the Supplier may have
under EXHIBIT C to respond to a fault, and not as a
limitation on such obligations, if as a result of any
invocation of the System Warranty or any warranty related
to Equipment, Software or Installation, System performance,
service to subscribers, data collection as it relates to
billing, networking, administration or maintenance are
materially and adversely affected, the Supplier shall, at
its sole cost and expense, commence work to correct such
defect or replace such defective Equipment or Software as
soon as practicable, but in no event later than four hours
after the Customer's notification of the Supplier of such
defect, and shall ship any required replacement Equipment
(or components thereof) or replacement Software (it being
understood and agreed that if Software modifications are
required, the Supplier shall, as promptly as practicable,
make such modifications) to the Customer as soon thereafter
as practicable but in no event later than 24 hours after
Notice of such defect. Where the services of the
Supplier's service personnel at the Customer's Sites are
required hereunder, then the Supplier shall, at its sole
cost and expense, dispatch such service personnel as are
required to correct such defects as soon after receipt of
Notice as practicable but in no event later than 24 hours
after Notice of such defect.
13.5 EXCESSIVE FAILURE.
13.5.1 In the event that, during the Equipment Warranty Period,
the Customer experiences failure of electronic circuit
board components, subassemblies or other Equipment that can
be installed and reinstalled by the Customer in the
ordinary course of business, and in the reasonable judgment
of the chief technical officer of the Customer ("tHE
CUSTOMER CTO") such failures are excessive (which in any
event would include a failure rate which exceeds on an
annualized basis one and one-half per cent (1-1/2%)), the
Customer shall give the Supplier Notice of such excessive
failures and (i) the Supplier shall give highest priority
to the remedy of the cause of such failures, and (ii) the
Supplier shall, without charge to the Customer, supply to
the Customer additional spare boards, subassemblies or such
other Equipment of each type so depleted, as necessary to
maintain an adequate emergency replacement stock, until
implementation of a permanent remedy. Upon implementation
of a permanent remedy, (1) all excess boards, subassemblies
or other Equipment supplied under this SECTION 13.5.1 shall
be returned to the Supplier at the Supplier's cost, and (2)
all in-service and spare stock boards, subassemblies and
other equipment that are the subject of the corrections
contemplated by this SECTION 13.5.1 shall be updated, at no
charge to the Customer, to the revision level incorporating
the permanent remedy. The Supplier shall
19
provide the Customer with a proposed plan to remedy such
failure in accordance with SECTION 13.5.3.
13.5.2 In the event that, during the Equipment Warranty Period,
the Customer experiences failure of Equipment (other than
electronic circuit board components, subassemblies or other
Equipment that can be installed and reinstalled by the
Customer in the ordinary course of business), and in the
reasonable judgment of the Customer CTO such failures are
excessive (which in any event would include a failure rate
which exceeds on an annualized basis one and one-half per
cent (1-1/2%)) the Customer shall give the Supplier Notice
of such excessive failures and, (i) the Supplier shall give
highest priority to the remedy of the cause of such
failures, and (2) the Supplier shall, without charge to the
Customer, maintain an adequate emergency replacement stock
of such Equipment so as to be able to respond as if it were
a Category 1 Fault under EXHIBIT C, whether or not it would
otherwise qualify as a Category 1 Fault. The Supplier
shall provide the Customer with a proposed plan to remedy
such failure in accordance with SECTION 13.5.3.
13.5.3 The Supplier shall provide the Customer with a proposed
plan to remedy the cause of such failure as soon as
practicable, but in no event later than twenty (20) Working
Days after receiving Notice from the Customer of excessive
failures under SECTIONS 13.5.1 AND 13.5.2. After review
by, and discussions with, the Customer of such proposed
plan, the Supplier shall provide the Customer with a final
plan to remedy the cause of such failure within thirty (30)
Working Days after receiving such Notice from the Customer.
If the Customer does not believe such plan is adequate, the
parties shall, in good faith, attempt to agree on a
prescribed plan of action to determine the cause of such
failures and to implement a permanent remedy therefor. If
the parties cannot agree on a prescribed plan of action,
either party may implement the dispute resolution process
contained in SECTION 20 with respect to such disagreement.
13.6 SYSTEM WARRANTY. In order to maintain total System performance
and quality of service, the Supplier warrants that a System, when
operated as a complete System, shall, for a period of 24 months
from Acceptance thereof (which shall be the last date of
Acceptance of all Subsystems included within such System), conform
in all respects to the requirements of, and perform the functions
set forth in, this Agreement, any Accepted Order and all
Specifications and shall be free from defects materially and
adversely affecting System performance, service to subscribers,
data collection as it relates to billing, networking,
administration or maintenance as set forth in this Agreement, any
Accepted Order and all Specifications (the "SYSTEM WARRANTY").
The Supplier's obligations under this SECTION 13.5 are limited to
correction of any such defect or the cause of any such failure to
perform. The System Warranty shall not be construed so as to
extend the Equipment Warranty Period or Warranty on any Software.
20
13.7 FAILURE DESPITE MEETING SPECIFICATIONS. If, in the Customer's
reasonable judgment, any System, fails to adequately address the
Customer's "real world" operational needs despite meeting all
applicable Specifications and other warranties under this
Agreement, and the source of such failure was an omission from the
Specifications then the Supplier shall use reasonable efforts, as
promptly as practicable, to correct such failure, and (i) if such
failure can be corrected by a modification to the Equipment or
Software, the Customer and the Supplier shall share equally in the
costs of such modification or (ii) if such failure can only be
corrected by replacement of the Equipment or Software, the
Customer shall be entitled to a credit of fifty percent of the
cost of the replaced Equipment or Software against the purchase
price of the replacement Equipment or Software.
13.8 POST WARRANTY PERIOD REPAIRS. Upon expiration of the applicable
warranty period for Equipment or Software furnished hereunder,
repair and replacement service for such Equipment or Software
shall be available to the Customer from the Supplier in accordance
with the Supplier's procedures and charges then in effect;
PROVIDED, that any such charges shall be no less favourable than
the rates charged to any of the Supplier's Customers. New
Equipment or parts or Equipment or parts of equivalent age,
quality (prior to the failure thereof) and functionality must be
used in effecting all repairs or replacements. Parts that have
been removed from Equipment shall become the Supplier's property
and parts that are installed in Equipment shall become the
Customer's property. Such repair and replacement service shall be
available for a minimum period of ten years from the date of
Acceptance of such Equipment, subject to the condition that should
the Supplier discontinue manufacture or repair of the Equipment,
Software or portions thereof prior to the expiration of such ten
year period (such right of discontinuance being expressly reserved
by the Supplier), the Supplier will give the Customer a twelve
(12) month prior Notice of any discontinuance so as to enable the
Customer to place an order for its requirements or to enter into
any other mutually satisfactory agreement with the Supplier prior
to such discontinuance. This provision shall survive the
expiration of this Agreement.
13.9 WARRANTY OF POST WARRANTY PERIOD REPAIRS. Repairs or replacements
made after expiration of the Equipment Warranty Period are
warranted by the Supplier, as provided in SECTIONS 13.1, 13.2 OR
13.3 hereof, for a period of one (1) year from the date of
shipment of such repair or replacement.
13.10 SHIPPING; RISK OF LOSS. All Equipment or Software to be repaired
or replaced both within and out of warranty shall be packed by the
Customer in accordance with the Supplier's instructions and
(except for out of warranty repairs or replacements) shall be
shipped at the Supplier's expense and risk of loss or damage to a
location designated by the Supplier prior to such shipment.
Repaired or replaced Equipment or Software shall be returned to
the Customer at the Supplier's expense and risk of loss. All
customs duties, levies, taxes and other costs relating to the
export or import of any defective, replaced or repaired Equipment
of Software covered by any warranty shall be the sole
responsibility of the Supplier.
21
13.11 YEAR 2000 WARRANTIES. Supplier represents and warrants that any
hardware, software (including, without limitation, third party
software and embedded software) and systems provided under this
Agreement are and will continue to be year 2000 compliant; that
is, that neither the performance nor the functionality of such
hardware, software and systems is or will be effected by dates
prior to, during and after the year 2000, including, without
limitation, (i) no value for a date will cause any interruption in
operation, (ii) date-based functionality will behave consistently
for dates prior to, during and after the year 2000, (iii) in all
interfaces and data storage, the century in any date will be
specified either explicitly or by unambiguous algorithms or
inferencing rules, PROVIDED HOWEVER, that the century in any date
need not be specified so long as those functions will continue to
operate consistently, predictability and accurately, without
interruption or manual intervention as a result of such date data
or the lack thereof, and (iv) all leap years will be recognized as
leap years, including, without limitation, the year 2000. The
representation and warranty contained in this Section shall
survive the termination of this Agreement.
13.12 ABUSED, MISUSED EQUIPMENT AND/OR SOFTWARE. The Supplier shall
have no obligation to repair or replace Equipment and/or Software
which has been abused, used in unauthorised applications,
improperly stored or improperly installed by the Customer,
altered, or used in conjunction with third party material which is
defective or of poor quality, or which has been operated and
maintained by the Customer with a material lack of compliance with
the Supplier's operating and maintenance instructions. The
Supplier shall be entitled to charge the Customer for any work
performed in investigating and/or rectifying problems covered by
the provisions of this SECTION 13.12.
13.13 SURVIVAL OF WARRANTIES. All warranties provided by the Supplier
shall survive the inspection, Acceptance and payment, and
termination of this Agreement and shall be for the benefit of the
Customer and its successors in interest and permitted assigns.
13.14 EXPRESS WARRANTIES ONLY. THE WARRANTIES AND REMEDIES SET FORTH IN
THIS AGREEMENT CONSTITUTE THE ONLY WARRANTIES WITH RESPECT TO
EQUIPMENT AND INSTALLATION THEREOF AND SOFTWARE AND THE CUSTOMER'S
EXCLUSIVE REMEDIES IN THE EVENT SUCH WARRANTIES ARE BREACHED.
SUCH WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES.
14. FORCE MAJEURE
14.1 GENERAL. If the performance of any duty or obligation under this
Agreement or an Order, other than the obligations to indemnify or
the obligations under a warranty, is interfered with by reason of
an event of force majeure (as hereinafter defined), the party that
is unable to perform as a result of such event shall give prompt
Notice of such event with reasonably full particulars concerning
such event. Thereupon, the obligations of the party that is
unable to perform, so far as they are
22
affected by such event, shall be suspended during, but no longer
than, the continuance of such event, provided such party uses its
reasonable efforts to remove the force majeure event as quickly
as practicable (and the other party shall likewise be excused from
the performance of its obligations to the extent such party's
obligations relate to the performance so interfered with). Both
parties shall proceed to perform their respective obligations with
dispatch whenever such causes are removed or cease to exist. The
term "force majeure" shall mean an act of God, act of the public
enemy, war, blockade, public riot, explosion, lightening, fire,
storm, flood or other act of nature. Neither financial difficulty
nor the failure of hardware, software and systems to be year 2000
compliant, shall be considered an event of force majeure.
14.2 ACCEPTED SYSTEMS. Systems that have been Accepted in accordance
with this Agreement shall not be subject to the provisions of this
SECTION 14.
14.3 TERMINATION. In the event either party shall be prevented by
force majeure from material performance of its obligations
hereunder for a continuous period of more than 60 days the other
party shall have the right to terminate this Agreement or any
Order by Notice whereupon the provisions set forth below shall
apply.
14.3.1 Fifty percent of the costs incurred by Supplier for
preparatory Site work performed prior to the occurrence of
the event of force majeure which is rendered useless or of
limited value to the Customer, as determined in good faith
by the parties hereto, shall be paid by the Customer to the
Supplier.
14.3.2 For Equipment in the process of being manufactured, fifty
percent of the amount necessary to reimburse Supplier for
the reasonable, direct costs (as reflected on a schedule to
be provided by Supplier and agreed to by the Customer
specifying in reasonable detail the changes and the costs
associated therewith) to remove and adjust Customer
specific configurations integrated into any such components
into a standard configuration for the potential sale of
such components (or integration into standard configuration
Equipment) to another customer.
14.3.3 With respect to any Subsystem (whether or not the Subsystem
has been Accepted) that is part of a System that has not
been Accepted, (A) the Equipment and Software components
that are useable in the reasonable opinion of the Customer
following the Termination shall be retained by the Customer
and the Customer shall pay for them at the Order Price
therefor; and (B) the Equipment and Software components of
such Subsystem that are not useable in the reasonable
opinion of the Customer following the Termination shall be
decommissioned, de-installed and/or extracted, as the case
may be. The parties hereto shall divide the costs so
incurred to decommission, de-install and/or extract equally
between the parties.
23
14.3.4 In the event the parties are not able to come to an
agreement regarding the amount described in SECTION 14.3,
then either party may invoke the dispute resolution
procedures of SECTION 20.
14.4 INSURANCE. If either party to this Agreement makes any payment
pursuant to SECTION 14.3, ("the Payment") and the other party
receives any benefit from any policy of insurance which would not
have been received but for the circumstances giving rise to the
Payment, the insurance proceeds will first be applied to the costs
and expenses described in SECTION 14.3 and the parties hereto
shall share any remaining costs and expenses in accordance with
SECTION 14.3.
15. INFRINGEMENT
15.1 INDEMNIFICATION. The Supplier shall defend, indemnify and hold
harmless the Customer against all actions, suits, proceedings or
claims for infringement or violation of any patent, trademark,
copyright, registered design, or other intellectual or industrial
property rights of any kind or nature whatsoever, arising by
reason of the Customer's purchase, possession or use of the
System, the Software, or the Equipment within the country in which
the System, the Software or the Equipment was delivered to or
installed in by the Supplier. Supplier agrees to defend, at
Supplier's expense, the Customer against any such claims and to
pay all litigation costs, reasonable attorneys' fees, settlement
payments and any damages awarded in such suit, claim or
proceeding, provided that the Customer follows the procedures set
forth in SECTION 17.3.
15.2 SUPPLIER'S OPTIONS. If the Supplier gives the Customer Notice of
an actual or potential infringement claim (or in the case of an
injunction being granted against the Customer's continued use of
the System) the Supplier shall at its sole option either:
(i) modify the System or part thereof so that it does not
infringe; or
(ii) replace the System or part thereof with non-infringing
products; or
(iii) procure for the Customer the right for the Customer to
continue its use of the System;
PROVIDED THAT the such replacement or modification shall not
adversely impair the System from performing in accordance with the
Specifications. If the Supplier is unable to procure any of the
above, the Supplier shall have the right to require the return of
the infringing Equipment and/or Software to the Supplier and the
Supplier shall refund to the Customer the value of non-infringing
Equipment of comparable specifications and functionality and
associated Software licence charges less any outstanding monies
due to the Supplier under the Contract. Satisfaction of the
provisions of this SECTION 15.2 shall not relieve Supplier of its
obligations to indemnify, defend and hold the Customer harmless
under SECTION 15.1.
24
15.3 LIMITATIONS. The indemnity given in SECTION 15.1 shall not extend
to infringement resulting from:
(a) the use or adoption by the Supplier of the Customer's
parts, designs or changes to the Specifications, where the
infringement arises from such use or adoption, or
(b) the use of the System, the Equipment or the Software in a
manner or for a purpose not stated in the Specifications or
otherwise in contradiction of the intended use of such
Equipment or Software, where the infringement arises from
such use, or
(c) modification of the System, the Equipment and/or the
Software by the Customer where such modification is not
authorised by the Supplier, where the infringement arises
from such modification, or
(d) the use or location of the System, the Equipment and/or the
Software in a country other than the country in which and
for which it was supplied by the Supplier, where such
infringement arises from such use or location, or
(e) the use of the System, the Equipment and/or the Software in
combination with other products not provided by the
Supplier, where the infringement is a direct result of such
combination, or
(f) an admission by the Customer contrary to the provisions of
SECTION 17.3 (d) which is or may be prejudicial to the
Supplier's case.
In the excepted cases stated above, the Customer shall indemnify
the Supplier against any claim of patent infringement arising from
the Customer's purchase; possession or use of the System. The
Customer shall pay all litigation costs, reasonable attorneys'
fees, settlement payments and any damages awarded in any such
infringement claim.
15.4 REMEDIES. The remedies set forth in this Agreement establish the
entire obligation of the parties in regard to claims relating to
intellectual property rights including claims directed to the
infringement of patents, trademark, copyright, registered design
or other intellectual or industrial property rights.
16. CONFIDENTIAL INFORMATION
All technical information, specifications, drawings, documentation and
"know-how" of every kind and description whatsoever disclosed by either
party (the "disclosing party") to the other under this Agreement
("INFORMATION"), is the exclusive property of the disclosing party, and
the other party (the "recipient"), except as specifically authorized in
writing by the disclosing party or as permitted hereunder, shall treat
and protect such Information as confidential, shall not reproduce the
Information except to the extent reasonably required for the performance
of this Agreement, shall not divulge such Information in whole or in part
to
25
any third party, and shall use such Information only for purposes
necessary for the performance of this Agreement or as may be required for
the use of Equipment, Software or Systems. Each party shall disclose the
Information only to those of its employees and agents who shall have a
"need-to-know" the Information for the purposes described herein after
first making such employees or agents aware of the confidentiality
obligations set forth above. Notwithstanding any other provisions of
this SECTION 16, Information may be disclosed as may be required by law,
regulation or court or agency order or demand, after prompt prior
notification to the disclosing party of such required disclosure. Such
obligations of confidentiality shall not apply to Information that (i) is
in the recipient's possession prior to disclosure to the recipient,
(ii) is in the public domain prior to disclosure to recipient,
(iii) comes into the recipient's possession from a source other than the
disclosing party with no obligation to maintain the confidentiality
thereof, or (iv) enters the public domain through no violation of the
obligations to maintain the confidentiality thereof contained herein.
The terms of this SECTION 16 shall survive the termination of this
Agreement.
17. INDEMNITY
17.1 GENERAL. Each party hereto (the "INDEMNITOR") hereby covenants
and agrees to indemnify, defend and hold harmless, the other party
and, its former, current and future officers, directors, employees
and agents, servants, shareholders, subsidiaries, successors and
assigns (herein the "INDEMNIFIED PARTIES") from and against any
liability of the Indemnified Parties for any injury to persons
(including death) or loss or damage, to tangible property or,
other than any incidental or consequential loss or damage, other
losses, fees, penalties, damages, costs, proceedings, actions,
expenses, liabilities, claims, judgments, orders, awards or
demands (and all expenses directly associated therewith, asserted
against, suffered or incurred by the Indemnified Parties,
including costs, expenses, reasonable attorneys' fees, court
costs, legal expenses and consultants' and experts' fees and
expenses directly related thereto) resulting from the negligent,
wilful or intentional acts or omissions of the Indemnitor, its
subcontractors and its or their officers, directors, employees or
agents in the performance, of or in connection with, its
obligations under this Agreement.
17.2 PROCEDURAL MATTERS. In the event of a claim being made by a third
party against an Indemnified Party with respect to which the
Indemnitor has covenanted to indemnify the Indemnified Party (the
"INDEMNITY CLAIM"), the following provisions will apply:
(a) The Indemnified Party shall promptly give Notice to the Indemnitor
of such Indemnity Claim upon becoming aware of the same;
PROVIDED, that the failure of any Indemnified Party to give such
Notice shall not relieve the Indemnitor of any liability under
this Agreement unless and to the extent the Indemnitor was
materially adversely prejudiced by such failure to give prompt
Notice.
(b) The Indemnified Party shall have a right to participate in the
negotiation, settlement and defence of such Indemnity Claim and
shall have the right to disagree on reasonable grounds with the
selection and retention of counsel, in which case counsel
reasonably satisfactory to the Indemnified Party shall be retained
by the
26
Indemnitor. If, in the reasonable judgment of the Indemnified
Party's counsel, there is the reasonable likelihood of a conflict
of interest such that representation of the Indemnitor and the
Indemnified Party by the same counsel would violate the
applicable Rules of Professional Conduct or like governing rules,
then in such event the reasonable fees and expenses of appropriate
separate counsel for an Indemnified Party shall be borne by the
Indemnitor. Such separate counsel shall be selected by the
Indemnified Party and reasonably approved by the Indemnitor. In
no event shall the Indemnitor be liable for the fees and expenses
of more than one law firm for an Indemnified Party.
(c) If the Indemnitor fails to defend or settle any Indemnity Claim
within a reasonable time, the Indemnified Party shall be entitled
to assume control of the Indemnity Claim at the expense of the
Indemnitor, and the Indemnitor shall be bound by the results
obtained by the Indemnified Party with respect to any such
Indemnity Claim including any settlement thereof.
(d) Unless the Indemnitor fails to assume control of the negotiation,
settlement and defence of any Indemnity Claim, the Indemnified
Party shall not admit liability or otherwise negotiate, settle,
compromise or pay any Indemnity Claim except with the prior
written consent of the Indemnitor, which shall not be unreasonably
withheld.
(e) Notwithstanding anything else in this SECTION 17, the Indemnitor
shall not settle any Indemnity Claim without the prior written
approval of the Indemnified Party, which shall not be unreasonably
withheld. In addition, the Indemnitor shall not conduct any
related legal or administrative proceeding in a manner which
would, in the opinion of the Indemnified Party, acting reasonably,
have a material adverse impact on the business, operations,
assets, condition (financial or otherwise) or prospects of the
Indemnified Party.
(f) The Indemnified Party and the Indemnitor shall cooperate in good
faith in connection with defending or settling any such Indemnity
Claim, and each party shall have reasonable access to the books,
records and personnel in the possession or control of the other
party which are pertinent to the defence.
(g) The Indemnified Party and the Indemnitor agree that the
Indemnified Party may join the Indemnitor in any action, claim or
proceeding brought by a third party, as to which any right of
indemnity created by this Agreement would or might apply, for the
purpose of enforcing any right of the indemnity granted to such
Indemnified Party pursuant to this Agreement.
18. TECHNICAL SUPPORT
18.1 TECHNICAL SUPPORT. The Supplier shall, for a period of (10) ten
years after the date hereof, make available at the Customer's
request on-site technical support to assist the Customer in the
engineering, installation, operation and maintenance of Equipment,
Software and Systems. Technical Support which can be offered with
27
this Agreement is set forth in EXHIBIT C, entitled "Technical
Support" attached hereto and incorporated herein by this
reference.
18.2 RATES. Such technical support shall be available at the rates set
forth in EXHIBIT C.
19. DEFAULT
19.1 TERMINATION OF THIS AGREEMENT OR AN ORDER BY THE CUSTOMER.
19.1.1 If during the course of this Agreement the Supplier shall
be in material breach of this Agreement in whole or in
part, including any Order, the Customer shall so inform the
Supplier by Notice and should the breach continue for more
than 30 (thirty) calendar days after such Notice, then,
without prejudice to any of the Customer's rights accrued
prior to the date of termination, the Customer may
terminate this Agreement or any Order or part thereof for
which the corresponding Group of Assets have not been
finally Accepted, by Notice to the Supplier.
19.2 TERMINATION OF THIS AGREEMENT OR AN ORDER BY THE SUPPLIER.
19.2.1 If during the course of this Agreement the Customer shall
be in material breach of this Agreement or an Order, the
Supplier shall so inform the Customer by Notice and should
the breach continue for more than 30 (thirty) calendar days
after such Notice, then the Supplier may terminate this
Agreement or any Order or part thereof for which the
corresponding Group of Assets have not been finally
Accepted by Notice to the Customer.
19.2.2 In the event the Supplier terminates this Agreement or one
or more Orders in accordance with SECTION 19.2.1 due to the
Customer's failure to pay amounts when due under this
Agreement, the Supplier shall be entitled to amounts owing
to it under this Agreement plus reasonable costs and
expenses (including reasonable attorneys' fees) incurred in
connection with collecting amounts owing by the Customer.
19.2.3 In the event the Supplier terminates the Agreement or one
or more Orders in accordance with SECTION 19.2.1 due to a
material breach by the Customer (other than the Customer's
failure to pay amounts when due hereunder), the Supplier
shall be (x) excused from its obligation to deliver any
Equipment not yet delivered by it to Customer under any
terminated Orders and (y) entitled to (i) be reimbursed for
the value of work performed on Site for the benefit of the
Customer, (ii) be paid the Order Price for any Equipment
and Software delivered to and Accepted by the Customer and
(iii) with respect to Equipment or Software in the process
of being manufactured or otherwise not yet delivered and
Accepted by Customer, the reasonable, direct costs (as
reflected on a schedule to be provided by the Supplier
specifying in reasonable detail the charges and costs
associated therewith) to remove and adjust the Customer's
specific configurations integrated into the Equipment
28
or Software required to bring it into a standard
configuration for the potential sale of such Equipment or
Software to another customer.
19.2.4 The Supplier shall take all reasonable actions to mitigate
its damages in the event of a material breach of the
Agreement or an Order by the Customer.
19.3 TERMINATION BASED ON INSOLVENCY OR LIQUIDATION. Either party may
at any time by Notice summarily terminate the Agreement, any
Order or any part of an Order or suspend their performance without
penalty, if under the laws of any jurisdiction to which the other
party is subject, (i) such other party shall pass a resolution
for the winding up, dissolution or entering into of bankruptcy
proceedings, (ii) any Court shall make an order that such other
party shall be wound up other than for purposes of solvent
amalgamation or reconstruction, (iii) an administrator or
liquidator shall be appointed with respect to such other party,
(iv) an administrative receiver or manager on behalf of a creditor
shall be appointed with respect to such other party, or (v) if
circumstances shall arise which would entitle a court to make a
winding up order; provided always that any such termination shall
be without prejudice to any claim, action or remedy which shall
have accrued or which shall accrue thereafter to either party.
19.4 ACTIONS UPON TERMINATION BY THE CUSTOMER.
19.4.1 Upon termination of this Agreement or an Order or part of
an Order as provided in SECTIONS 19.1.1 OR 19.3, the
Supplier shall forthwith cease work and remove its work
force from the Site. The Supplier shall not within 30
(thirty) calendar days of such termination remove from the
Site any Equipment, Software, installation tools or
materials unless given permission to do so in writing by
the Customer. Within 30 (thirty) calendar days of
termination of the Agreement, the Customer may elect to
complete the purchase of any Equipment or Software that is
the subject of an outstanding Order and use the Supplier's
installation tools or materials. In such event, the
Customer will pay the Supplier the unpaid price of such
Equipment or Software and a fair price for use of such
installation tools and/or materials.
19.4.2 Upon termination of this Agreement or an Order or part of
an Order as provided for in SECTIONS 19.1.1 OR 19.3, the
Customer may, at its option, continue work either by itself
or by sub-contracting to a third party. If the System is
completed by the Customer or a third party and the total
cost incurred by the Customer in so completing the System
is greater than that which would have been incurred had
this Agreement or all or part of any Orders not been
terminated pursuant to SECTIONS 19.1.1 OR 19.3, then the
Supplier shall pay to the Customer such excess amount;
PROVIDED, HOWEVER, the Supplier's total liability for
claims ARISING OUT BREACH OF THIS AGREEMENT or any Order,
including claims based on Article 1641 and followings of
the CODE CIVIL, shall not exceed the lesser of 50% of the
total value of the Order under which a claim is made (or
the equivalent amount in EURO and/or local currency) and
US$3,000,000. Except as otherwise provided in this
29
Agreement, including without limitation SECTION 12.5, the
payment of such excess amount shall be in full and final
settlement of the Supplier's liability for breach of
contract relating to the Orders so terminated under
SECTIONS 19.1.1 OR 19.3 to the extent the Customer elects
to complete one or more Systems not yet Accepted PROVIDED,
HOWEVER nothing in this SECTION 19.1.3 shall impair (i) the
ability of the Customer to collect liquidated damages from
the Supplier otherwise payable pursuant to SECTION 12.6;
(ii) Supplier's warranties under SECTION 13; (iii) the
Indemnities in SECTION 17; or (iv) the other remedies
provided for in this SECTION 19.
19.4.3 If the Customer has already paid the Supplier for work not
completed and subject to such termination pursuant to
SECTIONS 19.1.1 OR 19.3, then the Supplier shall promptly
repay such sum(s) to the Customer.
19.4.4 The Supplier shall, if so required by the Customer, within
14 (fourteen) calendar days of the date of termination of
this Agreement or an Order, assign to the Customer, without
payment, the benefit of any agreement, to the extent
allowable by such agreement, for supply of materials or
goods and/or execution of any work entered into for the
purposes of this Agreement or such Order(s).
19.4.5 In the event Customer terminates any Order in accordance
with SECTION 19.1.1 OR 19.3, Customer may, at its option:
(i) return to Supplier, freight collect, all Equipment and
Software delivered to Customer under the applicable Order,
in which event Supplier shall promptly refund to Customer
all amounts paid to Supplier (whether for Equipment,
Software or Services) with respect to such Order; or (ii)
retain so much of the Equipment or Software delivered under
such Order as it elects and return to Supplier, freight
collect, all other Equipment and Software delivered under
such Order, in which event Supplier shall promptly refund
to Customer all amounts (whether for Equipment, Software or
Services) paid to Supplier in respect of the Equipment,
Software and the installation thereof returned by Customer.
With respect to Equipment and Software which has not yet
been Accepted by Customer as described in SECTION 12, in
the event Customer exercises this right to return such
Equipment and Software and obtain a refund, such right is
in addition to Customer's right to obtain any liquidated
damages awardable under SECTION 12.5.
19.4.6 With respect to Systems not yet Accepted, the Customer
shall have the right to require the Supplier to (or to
charge the Supplier the cost of having a third-party, at
the Customer's option) de-commission, de-install and/or
extract, as the case may be, any items of Equipment,
Software or Subsystems (whether or not previously
Accepted), of such Systems.
19.4.7 The Customer may in addition to its other rights hereunder
terminate any Order or any part of an Order at its option
upon Notice to the Supplier if
30
Supplier reaches the maximum allowable liquidated damages
under SECTION 12.6 with respect to such Order
19.5 TERMINATION OF THE AGREEMENT FOR CONVENIENCE.
19.5.1 The Customer shall, in addition to its rights to terminate
this Agreement for default pursuant to SECTIONS 19.2.1 OR
19.3 have the right to terminate this Agreement in whole or
in part for its convenience at any time by giving the
Supplier at least 90 (ninety) calendar days Notice of
termination specifying the extent to which the Agreement is
terminated and the date upon which such termination becomes
effective.
19.5.2 After receiving Notice of termination pursuant to SECTION
19.5.1, and except as otherwise directed by the Customer,
the Supplier shall: (1) stop work under the Agreement on
the date and to the extent specified; (2) place no further
orders with third parties except as may be necessary for
completing such portions of the Agreement as have not been
terminated; (3) terminate all contracts with third parties
entered into in connection with the Agreement to the
extent that they may relate to portions of the Agreement
terminated; and (4) take such action as may be necessary
or as the Customer may direct to protect and preserve the
Equipment, Software and Documentation which are in the
Supplier's possession and in which the Customer has or may
acquire an interest.
19.5.3 As a condition of termination of this Agreement, or part
thereof, pursuant to SECTION 19.5.1 for the Customer's
convenience, the Customer shall pay the Supplier for all
Equipment previously delivered to the Customer pursuant to
this Agreement, including the repayment of any Sales Volume
Discount if the volume, as a result of termination, falls
below the total quantities specified in such definition and
all other reasonable, out-of-pocket costs and expenses
directly related to complying with the Customer's
termination instructions. The Customer will reimburse the
Supplier for the reasonable, direct costs (as reflected on
a schedule to be provided by the Supplier and agreed to by
the Customer specifying in reasonable detail the charges
and the costs associated therewith) to remove and adjust
the Customer's specific configurations integrated into the
Equipment or Software required to bring it into a standard
configuration for the potential sale of such Equipment or
Software to another customer. The Supplier agrees that a
termination under SECTION 19.5.1 shall not constitute a
breach of or default under this Agreement by the Customer
and that the payments to the Supplier as provided in this
SECTION 19.5.3 shall constitute full payment of all claims
by Supplier against the Customer arising from a termination
pursuant to SECTION 19.5.1.
19.6 CONTINUING OBLIGATIONS. Except as provided in SECTION 19.1.2, if
the Customer terminates this Agreement or any part of an Order,
Supplier's obligations hereunder with respect to Equipment and
Software already delivered, Installed and not
31
returned, and Customer's obligations with respect to payments for
Equipment not returned, shall continue in full force and effect.
19.7 LICENSES. In the event that the Supplier does not fulfill its
obligations under this Agreement, and such non-performance results
in (a) the Customer being compelled to pay any amounts to the
governmental entity that granted the Customer a license
(a "LICENSING AUTHORITY"), then the Supplier shall indemnify and
hold harmless the Customer for such amounts paid or payable by the
Customer, or (b) the Customer's loss of a license issued by any
Licensing Authority, notwithstanding any other provision of this
Agreement then the Supplier shall indemnify and hold harmless the
Customer for all out of pocket expenses (including any fees or
other amounts paid to the Licensing Authority for such license)
incurred in connection with the obtaining of such license and the
performance of the Customer's obligations under this Agreement
with regard to the System that is the subject of such License;
PROVIDED, HOWEVER, that the Supplier's Liability under this
SECTION 19.7 shall not exceed US $2 million.
19.8 CONSEQUENTIAL DAMAGES. Except as otherwise provided in SECTION
17 OR 19.7, in no event shall either party to this Agreement be
liable under this Agreement, or arising out of its termination,
whether as a result of breach of contract, warranty, or under tort
(other than if caused by an intentional tort), for any incidental
or consequential loss or damages of any nature whatsoever,
including, but not limited to, lost profits before or after
Acceptance, or for any damages arising from or attributable to
failure to realise expected savings, loss of data, capital
downtime costs, loss of use, loss of goodwill or loss of
anticipated or actual revenue or profit even if the Indemnitor has
been advised of the possibility of any such damages.
20. DISPUTE RESOLUTION
20.1 DISPUTE ESCALATION.
20.1.1 This Condition 20.1 shall only apply where both Parties
agree to its use in respect of any particular instance.
20.1.2 If in the opinion of either Party the other Party has
failed to comply with the requirements of this agreement or
Order, or to perform its obligations in a satisfactory
manner, then the dispute resolution procedure set forth in
this Condition 20.1 shall be invoked by said Party.
20.1.3 In order to expedite the prompt resolution of any disputes
which may arise hereunder the Parties agree that the
dispute resolution procedure set forth herein will be
employed by both Parties prior to either Party availing
itself of any other remedies against the other Party.
20.1.4 In the event that a dispute arises between the Parties then
the aggrieved Party shall provide the other Party with a
dispute Notice, and said problem will
32
initially be referred to the "First Level" parties
identified in Condition 20.1.8 below.
20.1.5 In the event a given problem has not been resolved at the
First Level, or a corrective action plan of action has not
been mutually agreed upon, within 15 (fifteen) calendar
days of the giving of the dispute Notice, then either Party
shall have the option of escalating the dispute to the
"Second Level" representatives identified in Condition
20.1.8 below, by means of a Notice of escalation to the
other Party.
20.1.6 The Second Level representatives agree to use all
commercially reasonable efforts to meet within 15 (fifteen)
calendar days, at a mutually agreeable time and place, in
order to effect a resolution to the dispute.
20.1.7 If the dispute has not been resolved, or a corrective
action plan of action has not been mutually agreed upon
within 15 (fifteen) calendar days of said meeting or within
30 (thirty) calendar days of the date of the Notice of
escalation to said Second Level, then either Party may
pursue any other remedy or claim.
20.1.8 The designated representatives for each Party shall be as
set forth below:
FIRST LEVEL:
For Supplier: VP Public Carrier Accounts
For Customer: Vice President Engineering
SECOND LEVEL:
For Supplier: Vice President and Legal
Counsel of Nortel Plc
For Customer: Chief Technical Officer
of CompleTel Europe
20.2 GENERAL DISPUTES; ARBITRATION. All disputes arising out of or in
connection with this Agreement shall be finally settled under the
commercial arbitration rules of the International Chamber of
Commerce ("ICC") Rules of Arbitration and as set forth herein.
(1) Each party may select one arbitrator. Selection shall be
completed within 10 (ten) Working Days of the receipt of a
demand for arbitration. If either party fails to select an
arbitrator within such 10 (ten) Working Day period, the one
selected shall act as sole arbitrator. If no arbitrators
have been selected, one arbitrator shall be selected in
accordance with the ICC rules and shall act as
33
sole arbitrator. If two arbitrators have been selected, the
two arbitrators selected shall select a third within 15
(fifteen) Working Days after their selection. If they fail
to do so, the third arbitrator shall be selected in
accordance with the ICC rules. The arbitrators shall set a
date of hearing no later than 60 (sixty) calendar days from
the date all arbitrators have been selected.
(2) All proceedings shall be conducted in the English language.
(3) The arbitration shall take place at a location to be agreed
upon by the parties. If the parties are unable to agree,
the arbitrators shall select a location in Paris, France
for the arbitration.
(4) The award of any arbitration shall be final, conclusive and
binding on the parties hereto.
(5) The arbitrators may award any legal or equitable remedy.
The arbitration award may include an award of attorney's
fees, in the amount of such fees, to the prevailing party,
if such an award is deemed by the arbitrators to be
reasonable and appropriate. Judgment upon any arbitration
award may be entered and enforced in any court of competent
jurisdiction.
21. INSURANCE
21.1 INSURANCE COVERAGES. The Supplier shall at all times during the
term of this Agreement, at its own cost and expense, carry and
maintain the insurance coverage, with limits not less than, as
described below:
(a) All risk insurance, in form and substance and with insurers
reasonably satisfactory to the Customer, covering all Equipment to be
delivered to the Customer the risk of loss to which has not passed to the
Customer (LIMITS: not less than 110% of the value of the Equipment
and/or Software being delivered).
(b) Comprehensive General Liabilities and Product Liability
Insurance covering claims for bodily injury, death, personal injury
sustained by any person, loss, injury or expense to any tangible property
occurring during or arising out of the performance of this Agreement,
including coverage for independent contractor's protection (required if
any work will be subcontracted), premises-operations, products/completed
operations, negligence and any other claim with respect to the public
and/or contractual liability assumed by the Supplier hereunder (LIMITS:
see attached EXHIBIT J.
21.2 PROOF OF INSURANCE. The Supplier shall furnish the Customer upon
reasonable request with proof, in the form of a certificate, that
all such insurance has been obtained and is in force. The
fulfilment of Supplier's obligations under this ARTICLE 21,
however, shall not otherwise relieve the Supplier of any liability
assumed hereunder or in any way modify the Supplier's obligations
to indemnify the Customer as set out in this Agreement.
34
21.3 SUBCONTRACTOR INSURANCE. The Supplier shall require its
subcontractors who may enter upon the Customer's premises to
maintain insurance as described above or to otherwise be covered
by the Supplier's insurance.
21.4 BANKRUPTCY OF INSURANCE PROVIDER; FAILURE TO PAY CLAIMS.
Notwithstanding the requirements as to insurance to be carried,
the insolvency, bankruptcy or failure of any insurance company
carrying any of the above insurance, or failure of any such
insurance company to pay claims accruing, shall not be held to
waive any of the provisions of this Agreement or relieve the
Supplier from any of its obligations under this Agreement.
22. SUBCONTRACTORS
22.1 NOTICE OF PROPOSED SUBCONTRACTORS. The Supplier shall notify the
Customer of any proposed subcontractors that the Supplier intends
to use in the performance of the Supplier's obligations hereunder.
The Customer shall have 7 Working Days to notify the Supplier if
it objects to the use of any one or more proposed subcontractors,
in which case, the Supplier shall propose alternative
subcontractors to perform the work of such rejected subcontractor.
The Customer shall again have 5 Working Days to notify the
Supplier if it objects to any one or more of such proposed
substitute subcontractors. If the Customer objects to two
proposed subcontractors for the same task, then Suppler and the
Customer shall endeavour in good faith to agree on one alternative
subcontractor for such task. If the parties fail to agree within
5 (five) Working Days, either party may invoke the provisions of
SECTION 20 to attempt to agree on a third subcontractor for such
task. The requirements of this SECTION 22.1 shall not apply to
purchases of incidental or standard commercial supplies or raw
materials.
22.2 DELAYS IN SELECTING SUBCONTRACTOR. If the Customer shall reject
any Subcontractor as provided in SECTION 22.1, and the Supplier
reasonably believes it shall cause a delay in the ability of the
Supplier to meet the Target Acceptance Date, then Supplier shall
Notify Customer of the number of days it reasonably believes the
Target Acceptance Date should be extended as a result of the
delays in selecting a Subcontractor caused by operation of SECTION
22.1, but such number of days shall not exceed the number of
elapsed days between the date Customer first rejected a proposed
subcontractor and the date when a subcontractor for the relevant
task was selected. If the Customer disagrees with the Supplier's
numbers, the parties shall attempt in good faith to resolve the
dispute or either party may invoke the provisions of SECTION 20 to
resolve the disagreement.
22.3 CLAIMS BY SUBCONTRACTORS. In the event any subcontractor claims
the Supplier owes it money in connection with this Agreement or
the Supplier's performance of its obligations hereunder, (the
"Subcontractor Due Amount"), the Customer is entitled to withhold
payments of other amounts due to the Supplier equal in amount to
the Subcontractor Due Amount, unless the Customer obtains in its
judgement adequate assurances that the Customer will not be liable
for the Subcontractor Due Amount. Notwithstanding any other
provision in this Agreement to the contrary, such
35
withholding by the Customer shall not result in a breach of the
Customers's obligations under SECTION 8 hereof or otherwise.
23. TRAINING
23.1 GENERAL. All Training Services and instructional aids,
documentation and other training-related materials shall, at no
additional charge, be provided in the English language.
The Supplier shall provide, as required by any Order(s), personnel
to conduct training and instructional aids appropriate for each
course, including books, pamphlets and diagrams.
The Customer may, without liability, terminate any Training
Services by giving the Supplier Notice 10 (ten) Working Days prior
to the Commencement Date.
If the Customer terminates any Training Services within 10 (ten)
Working Days of or after the Commencement Date, the parties will
agree to a reasonable fee for the Supplier's time thus far.
The Customer shall have the right to reproduce all Training
material for internal use subject to the SECTION entitled
"Confidential Information".
23.2 EXHIBIT G. Training shall be as provided in EXHIBIT G hereto.
24. COMPLIANCE WITH LAWS
24.1 CUSTOMER COMPLIANCE. In performance of this Agreement, Customer
shall comply in all material respects will all the material laws
of France applicable to it.
24.2 RESTRICTIONS ON EXPORT; CERTAIN COMMODITIES; TECHNICAL DATA. The
European Union and its Member States, as well as other countries
such as the United States, restrict the export of certain
commodities and technical data originating in the European Union
or those countries. Accordingly, the Customer's ability to
provide technical assistance or technical data hereunder,
including the provision of technology and know-how and
Information, and the Supplier's performance hereunder, are subject
to compliance with these restrictions. The parties hereto
acknowledge the existence of the laws and regulations such as
Council Regulation (EU) No. 3381/94 setting up a Community Regimen
for the Control of Export of Dual-Use Goods and the United States
Export and Control Laws and Regulations, and similar laws and
regulations of the EU Member States and other countries which may
be involved. The Supplier will have full responsibility for
compliance with all applicable import and export laws, rules,
regulations, orders and other requirements.
24.3 CUSTOMS LAWS; LICENSES; APPROVALS. The Supplier will have full
responsibility (i) for compliance with all applicable customs and
commercial policy laws, regulations, orders and other requirements
of the European Union and its Member
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States, and all other applicable countries, and in particular
Council Regulation (EEC) No. 2913/92 establishing a Community's
Customs Code, Commission Regulation No. 2454/93 establishing
Provisions for the Implementation of Council Regulation No.
2913/92, Council Regulation No. 384/96 on Protection against Dumped
Imports from Countries not members of the European Community and
Council Regulation No. 3284/94 on Protection against Subsidized
Imports from Countries not members of the European Community; and
(ii) for obtaining all necessary licenses and permits and for paying
for all fees and duties which may be required under the laws,
regulations, orders and other requirements mentioned in clause (i)
above.
24.4 SUPPLIER COMPLIANCE. In performance of this Agreement, the
Supplier shall comply in all material respects with all of the
material laws of France applicable to it. In performance of any
order submitted, the Supplier shall comply in all material
respects with all of the laws of each territory for which such
Order has been submitted, and applicable local laws, rules, codes
and regulations in all respects applicable to safety matters or
otherwise relating to the manufacture, delivery and Installation
of the Equipment and Software and shall, in a timely fashion such
that the schedule set forth in the applicable Accepted Order shall
not be delayed, obtain all necessary approvals and homologation
from the appropriate governmental authorities as are required for
the Equipment and Software. At the Customer's request, the
Supplier shall promptly furnish the Customer with evidence that
all such approvals and homologation have been obtained and are in
full force and effect.
24.5 SERVICES. All Services to be performed by the Supplier hereunder
shall be performed in accordance with all applicable national,
regional, provincial, or local laws, regulations, decrees,
ordinances or rules of any governmental entity. The Supplier
further agrees that the Equipment, Software and Systems will
conform to all applicable standards mandated by the governmental
authorities having jurisdiction for a System.
24.6 IMPORT/EXPORT CONTROLS. In support of SECTION 24.2 and not in
limitation thereof, the Supplier shall be responsible, at its cost
and expense, for obtaining all non-governmental third party and
governmental approvals, including but not limited to licenses and
permits, which may be required to export any System or components
thereof (including, without limitation, the Equipment and
Software) from its country of manufacture and, for Equipment and
Software which is being shipped DDP (Destination), to import any
System or such components thereof into such jurisdiction. The
Supplier shall also be responsible, at its sole cost and expense,
for obtaining all importation licenses and re-exportation licenses
for the tools, equipment and other supplies required by the
Supplier to perform its obligations under this Agreement.
24.7 FOREIGN CORRUPT PRACTICES ACT. The Supplier shall comply, at its
own expense, with the provisions of the United States Foreign
Corrupt Practices Act and all United States anti-boycott laws and
regulations, and with all similar laws, codes, requirements and
regulations applicable in all countries in which any Systems,
Equipment or Software are or are to be sold, Installed, delivered
or performed.
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25. SUPPLIER'S PERSONNEL
25.1 SUPPLIER'S PROJECT MANAGER. With respect to each System purchased
hereunder, the Supplier shall designate an employee to act as
"Project Manager" who is authorized to act on behalf of the
Supplier in all matters pertaining to this Agreement. The Project
Manager will act in such capacity and will reside, at the
Supplier's sole cost and expense, in the applicable territory in
which such System is or is to be located for a period of one (1)
year beyond the date on which the System is In-Service.
Responsibilities of the Project Manager will include coordination
of all contract responsibilities in such territory, integration of
contract efforts with others and technical liaison. The Project
Manager will be engaged to render full time services to the
applicable System for a period commencing no later than the date
hereof through at least one year after the date on which such
System is put In-Service. The Project Manager will be available
for consultation with the Customer during normal working hours
throughout the term of his engagement. Prior to the designation
of any Project Manager, or the appointment of a replacement
Project Manager, the Supplier shall introduce said person to the
Customer and the Customer shall have the right to approve said
person which approval shall not be unreasonably withheld. If the
Customer disapproves of any such person, whether initially or
after such person has commenced work under this Agreement, the
Supplier shall, upon the Customer's request, appoint another
person to act as Project Manager, such person to be reasonably
acceptable to the Customer.
25.2 INDEPENDENT CONTRACTOR. The Supplier hereby declares and agrees
that it is engaged in an independent business and will perform its
obligations under this Agreement as an Independent contractor and
not as the agent or employee of the Customer; that the persons
performing Services hereunder are not agents or employees of the
Customer; that the Supplier has and hereby retains the right to
exercise full control of and supervision over the performance of
the Supplier's obligations hereunder and full control over the
employment, direction, compensation and discharge of all employees
assisting in the performance of such obligations; that the
Supplier will be solely responsible for all matters relating to
payment of such employees, and all applicable national, state and
local laws, rules and regulations governing such matters;
including but not limited to social security payments, and that
the Supplier will be responsible for the Supplier's own acts and
those of the Supplier's agents, employees and subcontractors
during the performance of the Supplier's obligations under this
Agreement. Each Party's employees shall remain at all time under
the authority and the control of such Party. Each Party and its
employees are not entitled to unemployment insurance benefits from
the other Party as a result of performing under this Agreement.
Each Party is responsible for and shall pay all of its own
assessable income tax on amounts paid under this Agreement, and
make the necessary social security payments.
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26. RIGHT TO INSPECT
Subject to prior and reasonable Notice the Customer may inspect the
Supplier's manufacturing facilities and finished Equipment or Software
during regular business hours. Such inspections shall not relieve the
Supplier of any obligations under this Agreement, nor shall it be deemed
to be Acceptance. Upon request of the Customer the Supplier will provide
the Customer or its agent with access to the Supplier's quality control
activity results, data, reports, charts, procedures, manuals,
requirements, practices and methods for all Equipment and Software.
27. PUBLICITY
Prior to the publication or use by a party hereto of any advertising,
sales promotions, press releases or other publicity matters relating to
the Systems or the Equipment or Software or this Agreement in which the
names or logo of the other party is mentioned or can be reasonably
inferred, the party shall obtain the written consent of the other party.
Such consent shall not be unreasonably withheld.
28. SEVERABILITY
If any of the provisions of this Agreement shall be adjudged invalid or
unenforceable, such invalidity or unenforceability shall not invalidate
or render this Agreement unenforceable, but rather this Agreement shall
be construed as if not containing the particular invalid or unenforceable
provision or provisions, and the rights and obligations of the parties
shall be construed and enforced accordingly.
29. NOTICES
Notices and other communications to be given by one of the parties to the
other shall be transmitted in writing and shall be considered as properly
given if (a) delivered in person, (b) sent registered mail, return
receipt requested, or (c) by guaranteed overnight courier delivery,
addressed to the parties as follows:
To Supplier: Matra Nortel Communications
33, quai Xxxx Xxxxxx
Paris La Defense
92415 Courbevoie Cedex - France
Attention: CompleTel Project Manager
with a copy to:
Matra Nortel Communications
33, quai Xxxx Xxxxxx
Xxxxx Xx Xxxxxxx
00000 Xxxxxxxxxx Xxxxx - Xxxxxx
Attention: Legal Department
39
To Customer: CompleTel SAS
00, xxx Xxxxxxxxxx
00000 Xxxxx Cedex 08
Attention: Xxxx Xxxxxxxxx, CTO
Any notice of communication sent under this Agreement shall be deemed
given upon receipt.
30. GOVERNING LAW
The construction, interpretation and performance of the Agreement shall
be governed by the laws of France.
31. ASSIGNMENT
Except as set forth below, neither party may assign or transfer this
Agreement or any rights or obligations hereunder without the prior
written consent of the other party (such consent not to be unreasonably
withheld or delayed).
31.1 ASSIGNMENT TO AFFILIATE. Notwithstanding anything to the contrary
in this Agreement, the Customer may sell or assign all or any
portion of its interests in this Agreement and in the Software and
its license thereof, or in any portion thereof, to one or more of
its Affiliates, without obtaining the prior consent of the
Supplier. Upon a sale or assignment made in conformity with this
SECTION 31.1, the Customer shall be relieved of its obligations
under this Agreement with respect to the interests assigned to
such Affiliate.
31.2 COLLATERAL ASSIGNMENT TO LENDER. Notwithstanding anything to the
contrary in this Agreement, the Customer may collaterally assign
its rights under this Agreement and in the Software and its
licence thereof, or in any portion thereof, to one or more lenders
as security, provided that the Customer shall remain liable for
its obligations to the Supplier hereunder.
31.3 ASSIGNMENT TO UNRELATED THIRD PARTIES. The Customer may sell or
assign all or any portion of its interests in this Agreement,
(including, without limitation, its rights in and under the
Software and the license thereof) in connection with the sale or
other transfer of all or substantially all of its assets, or the
sale or other transfer of its assets relating to the Systems
acquired hereunder, PROVIDED THAT the Customer obtains the prior
written approval of the Supplier, which approval may be withheld
only on the basis of the assignee's character or financial
capability or if the assignee is a direct competitor of the
Supplier, in each case as determined in the reasonable discretion
of the Supplier. Upon a sale or assignment made in conformity
with this SECTION 31.3, the Customer shall be relieved of its
obligations under this Agreement with respect to the interests
assigned to such third party.
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32. WAIVER
Except as specifically provided for in a waiver signed by duly authorized
representatives by the Customer and the Supplier, failure by either party
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 performance with
respect thereto or to claim a breach with respect thereto.
33. SECTION HEADINGS
SECTION headings are inserted herein for convenience only and shall not
affect the meaning or interpretation of this Agreement or any provision
hereof.
34. ENTIRE AGREEMENT
This Agreement, including all Exhibits attached hereto, (which are an
integral part of this Agreement and which are incorporated herein by
reference) comprises all the terms, conditions and agreements of the
parties hereto with respect to the subject matter herein, and save as
expressly provided herein, may not be altered or amended except in
writing signed by authorized representatives of each party hereto.
35. COUNTERPARTS
This Agreement may be executed in counterparts (including those
transmitted by facsimile), each of which shall be deemed an original and
all of which taken together shall constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year last written below.
COMPLETEL SAS MATRA NORTEL COMMUNICATIONS SAS
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Directeur Generale
--------------------------- ---------------------------
Name: Xxxxxxx Xxxxxxx Name:
------------------------- -------------------------
Title: President Title: Directeur Generale
------------------------ ------------------------
Date: Date:
------------------------- -------------------------
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