Exhibit 4.14
This Supply Agreement ("Agreement") is between Nortel Networks Limited, a
Canadian corporation, and Nortel Networks de Mexico, S.A. de C.V., a Mexican
corporation (collectively, "Nortel Networks"), and Operadora Unefon, S.A. de
C.V., a Mexican corporation ("Customer" and, together with Nortel Networks, the
"Parties"), and is dated as of June 16, 2003.
RECITALS:
WHEREAS, the Secretaria de Comunicaciones y Transportes of Mexico granted
to Customer a license to install, operate and exploit a public
telecommunications network authorizing Customer to provide, among other
telecommunications services, wireless PCS telephone services, together with
other licenses to use, develop and exploit radio spectrum frequencies to provide
such telephone service by means of a digital wireless PCS telephone network (the
"Network"), serving each of the nine telecommunication regions of Mexico; and
WHEREAS, the Parties desire to provide for Nortel Networks to supply
Products and Services in connection with the Network, all on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Parties, intending to be
legally bound, hereby agree as follows:
1. Definitions
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1.1 "Provisional Acceptance Tests" means Nortel Networks' applicable
standard test and verification procedures for the Products or the
Services (or any portion thereof), as further described in Exhibit
C hereto.
1.2 "Business Day" means any day other than Saturday or Sunday or a
day that is a public holiday in Mexico.
1.3 "Affiliate" means, with respect to any Party, any corporation,
partnership, joint venture or other entity of whatever nature that
controls, is controlled by or is under common control with such
Party, whether through ownership of voting securities or
otherwise.
1.4 "Force Majeure Event" means the occurrence of fire, casualty,
explosion, lightning, accident, strike, lockout, labor unrest,
labor dispute (whether or not, in respect of the foregoing
labor-related matters, the affected Party is in a position to
settle the matter), war (declared or undeclared), armed conflict,
civil disturbance, riot, Act of God, delay of common carrier, the
enactment, issuance, or application of any law, local by-law,
regulation, or executive, administrative, or judicial order, acts
(including delay or failure to act) of any governmental authority,
or any other similar occurrence beyond the reasonable control of
the affected Party.
1.5 "Furnish-only" means Products which Customer is responsible for
installing.
1.6 "Hardware" means a Nortel Networks machine or component.
1.7 "In-Service" means the date on which the earlier of the following
conditions occurs: (i) the Products are providing communications
services to Customer or its customers, (ii) Customer places the
Products into commercial service notwithstanding that there are
service affecting deficiencies, or (iii) all deficiencies, other
than non-service affecting deficiencies, have been cured.
1.8 "Local Nortel Networks Affiliate" means Nortel Networks de Mexico,
S.A. de C.V.
1.9 "Products" means any Hardware, Software or Third Party Vendor
Items provided under this Agreement.
1.10 "Restructuring Agreement" means the Restructuring Agreement, dated
as of June 16, 2003, entered into among the Parties hereto and
Codisco Investments LLC.
1.11 "Services" means the activities to be undertaken by Nortel
Networks pursuant to an Order, including but not limited to,
engineering, maintenance, installation, implementation, design,
consulting, business planning, network planning and analysis.
1.12 "Site" means a location designated by Customer at which the
Products are to be installed and the Services are to be performed.
1.13 "Software" means computer programs in object code form or firmware
which is owned or licensed by Nortel Networks, its parent or one
of its subsidiaries or affiliates, and is copyrighted and
licensed, not sold. Software consists of machine-readable
instructions, its components, data, audio-visual content (such as
images, text, recordings or pictures) and related licensed
materials including all whole or partial copies.
1.14 "Specifications" means, with respect to Products and/or Services,
the technical specifications set forth in Exhibit E which describe
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or explain the standard functional capabilities, performance
parameters and/or requirements for such Products and/or Services.
1.15 "Statement of Work" is a document which describes the
deliverables, estimated timelines, assumptions, responsibility
matrix, and other relevant terms specific to a project and an
Order. A Statement of Work shall be governed by the terms and
conditions of, and constitute a part of, this Agreement. The
guidelines for developing such Statements of Work are attached as
Exhibit D hereto.
1.16 "Taxes" means all federal, state, local, foreign, gross income,
gross receipts, sales, use, value added, stamp, levies, customs
duties, franchise, withholding, excise, real or personal property
taxes, registration charges and all other similar taxes, except
for any taxes computed upon the net income of Nortel Networks.
1.17 "Term" means five (5) years, commencing on the Closing Date (as
defined in the Restructuring Agreement). The Term may be extended
by written agreement between the Parties.
1.18 "Third Party Vendor Items" includes "Third Party Hardware" and
"Third Party Software" and means any non-Nortel Networks hardware
and/or software supplied to Customer under this Agreement.
1.19 "Site Equipment List" means the complete list of Products and
installation materials, if applicable, to be delivered by Nortel
Networks to a Site to perform an Order with respect to that Site.
1.20 "days" means calendar days, unless otherwise specified.
2. Scope of Work; Orders; Change Orders
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2.1 On the terms and subject to the conditions set forth herein, over
the Term of this Agreement, the Operator agrees to purchase from
the Vendor, and the Vendor agrees to sell, supply and deliver to
the Operator, the Products and Services described in this
Agreement. Each Party shall comply with its obligations as set
forth in Exhibit H - Responsibility Matrix. All Services to be
provided in Mexico, including but not limited to the installation
and the supervision of the installation process, shall be the sole
responsibility of the Local Nortel Networks Affiliate.
2.2 Customer may acquire Products or Services by issuing a written
purchase order, signed by an authorized representative ("Orders").
All Orders shall reference this Agreement and specify the quantity
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and price of Products requested, the Nortel Networks quotation or
proposal number, billing instructions, installation location,
requested delivery dates, identification of any Services being
ordered, requested commencement date for Services, any Statement
of Work, and any other special instructions. All Orders will be
governed by and cannot alter the terms and conditions of this
Agreement. In order to be valid, all Orders must be accepted by
Nortel Networks through a written or electronic communication.
Nortel Networks reserves the right to charge a fee for
cancellations of Orders for Products in accordance with the
following table:
Days prior to shipment Cancellation Fee
--------------------- ----------------
51 days or more No cancellation fee
36-50 days 10% of price of the Order
21-35 days 15% of price of the Order
20 days or less 20% of price of the Order
Customer shall not cancel an Order after shipment.
A Statement of Work and any other items which may be necessary for
the performance of Nortel Networks' obligations hereunder shall be
mutually agreed upon between the Parties and included as exhibits
to the Order. Such exhibits shall be deemed incorporated into this
Agreement by this reference.
2.3 Customer hereby irrevocably agrees to a US$100,000,000 (one
hundred million United States dollars) purchase volume commitment
of Nortel Networks' Products and Services during the Term hereof.
Furthermore, during the Term hereof Customer shall have an annual
target volume of US$40,000,000 (forty million United States
dollars) of Nortel Networks' Products and Services with a minimum
of US$20,000,000 (twenty million United States dollars), unless
Customer has already met the purchase volume commitment of
US$100,000,000 (one hundred million United States dollars).
2.4 The prices reflected in each Order shall be determined in
accordance with Exhibit A and are based on the delivery and
performance schedules as outlined in the Statement of Work and
specifications incorporated in such Order. Any changes to this
Agreement or an Order initiated by Customer or Nortel Networks
after the Closing Date resulting in adjustments to process, job
schedule, contract price or other requirements thereof may be
cause for adjustment by Nortel Networks to the prices and to the
relevant delivery and performance schedules set forth therein, as
further provided in Exhibit B hereto. Any such adjustment shall be
detailed in a change order, a form of which is attached to Exhibit
B ("Change Order"). If the Change Order affects any Products for
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which Nortel Networks has commenced manufacturing or has shipped
or any Services for which Nortel Networks has commenced
performance, the adjustment of the price shall include reasonable,
documented charges incurred by Nortel Networks related thereto. No
such changes shall be performed until a Change Order has been
executed by authorized representatives of the Parties. The Parties
shall appoint their authorized representatives to execute such
Change Order.
3. [Intentionally left blank]
4. Licensed Use of Software
------------------------
4.1. Upon delivery of the Software but subject to payment by Customer
of the annual Software subscription fees set forth in Exhibit A
(the "Annual Software Subscription Fees"), Nortel Networks grants
Customer a non-exclusive license to use a copy of the standard
then-current MTX Software base load with all optional features,
NBSS (BSC) Software base load with all optional features
(exclusive of any regulatory features made generally available
after MTX-11), BTS features (including, but not limited to, 1XRTT
voice and data features), any future capacity enhancements to the
CDMA elements (including, but not limited to, SMV, EVDO, and EVDV)
with the Hardware.
Also, in consideration for, and conditional upon, the payment by
Customer of the annual Software fee for the PDSN set forth in
Exhibit A (based upon number of active SSC-II cards and including
home agent and foreign agent), Nortel Networks grants Customer a
non-exclusive license to use a copy of the standard then-current
PDSN Software base load with all optional features (exclusive of
the optional IP services described in Exhibit A).
With respect to all current Nortel Networks Products in Customer's
network as of the Closing Date and Products purchased by Customer
hereunder and included in Exhibit A, excluding CDMA Products
described above and Enterprise Products, the price of the Software
upgrades and features will be no more than US$300,000 per year in
the aggregate. For the avoidance of doubt, the Parties agree that
Section 1.1.1, item 12 of Exhibit F (ESSP) provides for some
Software upgrades at no additional charge.
Prior to the expiration of the Term, the Parties shall mutually
agree as to the applicable Annual Software Subscription Fees
Customer shall pay for its right to use such Software after such
expiration.
To the extent Software is furnished for use with designated
Products or Customer furnished Equipment ("CFE"), Customer is
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granted a non-exclusive license to use Software only on such
Products or CFE, as applicable. Software contains trade secrets
and Customer agrees to treat Software as Information (as defined
in Section 10).
Nortel Networks shall upgrade Customer's existing network to
MTX-10. The project plan for the MTX-10 upgrade will be reasonably
agreed between the Parties within one week of the Closing Date.
4.2 Customer will ensure that anyone who uses the Software does so
only in compliance with the terms of this Agreement. Customer
shall not: (a) use, copy, modify, transfer or distribute the
Software except as expressly authorized; (b) reverse assemble,
reverse compile, reverse engineer or otherwise translate the
Software; (c) create derivative works or modifications unless
expressly authorized; or (d) sublicense, rent or lease the
Software. Licensors of intellectual property to Nortel Networks
are beneficiaries of this provision. Upon termination or breach of
the license by Customer or in the event the designated Product or
CFE is no longer in use in Customer's network, this license
terminates and Customer will promptly return the Software to
Nortel Networks or certify its destruction. Nortel Networks may
audit by remote polling or other reasonable means to determine
Customer's Software activation or usage levels.
4.3 With respect to Third Party Software, Customer agrees to abide by
the terms provided by Nortel Networks with respect to any such
software. Customer further agrees that the terms contained in any
Nortel Networks or third party "shrink wrap" or "click" licenses
shall govern the use of such software. If Nortel Networks and
Customer agree that delivery of Software is to be made
electronically via File Transfer Protocol, then delivery of such
Software by Nortel Networks shall be deemed to have taken place at
such time as the Software is loaded onto a network server, as
designated by Nortel Networks, and Customer has been provided with
appropriate instructions and passwords to enable Customer to begin
use of such Software.
5. Charges, Payment and Taxes
--------------------------
5.1 (a) The contract price for the Products and Services will be
set forth in Exhibit A hereto. For Products and Services
not included in Exhibit A, the Parties will mutually agree
on a customary and reasonable price for such Products and
Services. Unless otherwise agreed by the Parties in an
Order, all prices are in U.S. dollars, DDP (VAT not
included) Site or Customer warehouse (as the case may be
based upon Customer's designation), Incoterms 2000. All
prices are applicable solely in Mexico. In the event there
is a change in the applicable importation taxes, such
change will be reflected as a price adjustment.
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(b) With respect to Orders for Products for which Nortel
Networks is providing installation and commissioning
Services, such Orders shall be invoiced as follows: (i)
fifteen percent (15%) upon acceptance of the Order; (ii)
fifty five percent (55%) upon shipment; (iii) twenty
percent (20%) upon Provisional Acceptance; and (iv) ten
percent (10%) upon Final Acceptance. With respect to the
payment milestones described in (ii), (iii) and (iv) above,
Nortel Networks shall submit pro-forma invoices to Customer
ten (10) days prior to each of the payment milestones
described above. Customer will have three Business Days to
accept or reject the pro-forma invoice. Invoices for
Products shall be paid by Customer within three (3)
Business Days of receiving the definitive invoice. Invoices
may not be issued with respect to more than one Order or
for more than one payment milestone.
(c) With respect to Orders for Furnish-Only Products, such
Orders shall be invoiced one hundred percent (100%) five
(5) days before shipment. Invoices for Products shall be
paid by Customer within thirty (30) days of shipment.
Nortel Networks shall deliver to Customer a copy of the
xxxx of lading or airway xxxx within ten (10) days of
shipment.
(d) Nortel Networks shall invoice Customer thirty percent (30%)
of the price of Services other than the extended warranty
and support Services described in Exhibit F (ESSP) in
advance, and seventy percent (70%) upon completion.
Invoices for Services shall be paid by Customer within
three (3) Business Days of the invoice receipt.
(e) No later than June 30 of every year during the Term,
Customer shall issue an Order for the Annual Software
Subscription Fees and the Extended Services and Support
Services as set forth in Exhibit A, based on the number of
Active Subscribers in the network as of June 20 of that
year. Such Software and Services shall be invoiced by
Nortel Networks in advance as follows: five (5) monthly
installments of US$175,000 starting July 1, 2003, one
monthly installment of US$2,702,000 in December 1, 2003,
and semi-annually thereafter starting June 1, 2004.
Invoices shall be paid by Customer within three (3)
Business Days from date of receipt of invoice. Nortel
Networks shall have the right to audit the number of Active
Subscribers and Customer shall give reasonable cooperation
to Nortel Networks to carry out such audit.
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As used in this Sub-Section (e), "Active Subscribers" means
those subscribers listed in the HLR, minus those that have
zero balance and cannot make outbound calls.
(f) Customer shall pay interest on any late payments at the
rate of twelve percent (12%) per annum (1 % per month) or
the lesser rate permitted by law. Any such interest shall
be invoiced to Customer by the Nortel Networks entity to
which such interest is owed.
(g) Charges for Software not included in the Annual Software
Subscription Fees may be based on extent of use authorized
as specified in this Agreement. Customer agrees to pay the
charges applicable for any activation or usage beyond the
authorized level.
(h) Invoices for Products shall be issued by Nortel Networks
Limited and invoices for Services shall be issued by the
Local Nortel Networks Affiliate. All invoices shall be
denominated in United States dollars. Invoices issued by
the Local Nortel Networks Affiliate may be paid by Customer
in United States dollars or in Mexican pesos, at Customer's
option, at the exchange rate published by the Bank of
Mexico on the date of actual payment.
5.2 Customer shall be the importer of record and shall promptly pay
directly to the applicable government authority the Mexican Value
Added Tax so as to enable Nortel Networks to carry out the
importation of the Products into Mexico on Customer's behalf.
Within two weeks of the Closing Date, the Parties shall mutually
agree on a process for achieving on time customs clearance. Nortel
Networks shall be responsible for obtaining all export licenses
and/or complying with other laws applicable to the exportation
from the country of origin, transshipment if required and
importation into Mexico of all Products. Nortel Networks shall
also be responsible for obtaining any import licenses and/or other
governmental approvals for the importation of the Products into
Mexico.
5.3 If withholding of any Tax is required in respect of any payment by
Customer to Nortel Networks hereunder, Customer shall (i) withhold
the appropriate amount from such payment, (ii) pay such amount to
the relevant authorities in accordance with applicable law, and
(iii) pay Nortel Networks an additional amount such that the net
amount received by Nortel Networks is the amount Nortel Networks
would have received in the absence of such withholding.
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5.4 Customer consents without qualification to the sale and/or
assignment of account receivables, in whole or in part, including
all or any part of any associated rights, remedies, and
obligations, by Nortel Networks without further notice, and
authorizes the disclosure of this Agreement as necessary to
facilitate such sale.
5.5 Nortel Networks reserves the right to reject an Order at Nortel
Networks' sole discretion, or to withhold shipment of the Products
or performance of the Services, or any portion thereof, if: (i)
Customer is in default of its payment obligations hereunder, (ii)
if Customer is in material breach of its obligations under this
Agreement; or (iii) if Customer falls under any of the situations
described in Sub-Sections 16.1(i) through (iv) hereof, and all
relevant dates for completion shall be adjusted accordingly.
5.6 Customer hereby irrevocably waives, to the fullest extent
permitted by law, the right to dispute any invoice submitted by
Nortel Networks hereunder, if such invoice is not disputed within
thirty (30) days from invoice receipt. Such dispute must be
resolved within ninety (90) days from the invoice date. Payment of
any disputed amounts is due and payable within three (3) Business
Days of the date of resolution. If the Parties discover that
Customer has overpaid Nortel Networks, Nortel Networks shall
return such excess amounts to Customer within three (3) Business
Days. All other amounts remain due as provided herein.
6. Warranty
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6.1 Nortel Networks warrants that the Hardware: (i) is free from
defects in materials and workmanship, and (ii) conforms in all
material respects to its Specifications. If Hardware does not
function as warranted during the warranty period, Nortel Networks
will determine to either: (i) make it do so, or (ii) replace it
with substantially equivalent Hardware which functions and is as
warranted. Nortel Networks warrants further that Nortel Networks
is conveying good title to the Hardware to Customer and such
transfer is rightful and the Hardware is being delivered to
Customer free and clear of any lien, claim, charge, security
interest or other encumbrance.
6.2 (a) Nortel Networks warrants that when Software is used in the
specified operating environment it will substantially conform to
its Specifications. If Software does not function as warranted
during the warranty period, Nortel Networks will provide a
suitable fix or workaround or will replace the Software in order
to permit its continued use and operation, provided the Software
is within two (2) software release levels of the then current
Software for CDMA products, or one (1) software release levels of
the then current Software for other products.
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(b) The Annual Software Subscription Fees referred to in Section
4.1 include any new Software releases that become available during
the Term. In the event that such new Software releases require the
installation of additional or modified Hardware in order to
support such Software, it shall be Customer's responsibility to
acquire and install such additional Hardware, and Nortel Networks
shall offer to sell to Customer such Hardware and related
installation Services at reasonable commercial rates consistent
with this Agreement.
6.3 Nortel Networks warrants that Services will be performed in a
professional and workmanlike manner. If Services are not performed
as warranted and Nortel Networks is notified in writing by
Customer within thirty (30) days of the date of the non-conforming
Services, Nortel Networks will re-perform the non-conforming
Services.
6.4 The warranty period for Hardware and Software that Nortel Networks
is installing shall be two (2) years from the earlier of
Provisional Acceptance or the date such Hardware or Software is
placed In-Service. The warranty period for Furnish-Only Hardware
and Software shall be two (2) years from delivery in accordance
with Section 8.2.
6.5 No warranty is provided for: (i) supply items normally consumed
during Product operation; (ii) failures caused by non-Nortel
Networks products; (iii) failures caused by a Product's inability
to operate in conjunction with other Customer hardware or
software; (iv) performance failures resulting from improperly
performed services not performed by Nortel Networks or one of its
subcontractors or Affiliates, or Customer's use of unauthorized
parts or components; or (v) interference or disruption of service
caused by operation of other radio systems, lightning, motor
ignition or other similar interferences. In the cases above,
Nortel Networks will use reasonable efforts to provide without
delay the recovery service, and then the Parties will agree within
sixty (60) days on the cause of the problem. Customer shall pay
for such Service if it is determined that the failure was not
attributable to Nortel Networks. Warranty will be voided by
misuse, accident, damage, alteration or modification, failure to
maintain proper physical or operating environment, or improper
Customer maintenance.
6.6 Third Party Vendor Items may carry their own warranties and Nortel
Networks shall pass through and assign to Customer any such
warranties to the extent authorized.
6.7 THESE WARRANTIES AND LIMITATIONS ARE CUSTOMER'S EXCLUSIVE
WARRANTIES AND SOLE REMEDIES, AND REPLACE ALL OTHER WARRANTIES OR
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CONDITIONS, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE.
7. Services
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7.1 Warranty Services: During the warranty period, Nortel Networks
------------------
provides certain types of warranty Services without charge for
specified Products to correct Product defects or to bring them up
to conformance with Nortel Networks published Specifications.
Customer will obtain Nortel Networks' concurrence prior to
returning any Product and must reference a return material
authorization number issued by Nortel Networks on documentation
accompanying such returned Product. When Customer is required to
return Hardware to Nortel Networks for warranty service, Customer
agrees to ship it prepaid and suitably packaged to a location
Nortel Networks designates. Nortel Networks will return the
Hardware to Customer at Nortel Networks' expense. Nortel Networks
is responsible for loss of, or damage to, Hardware while it is (i)
in Nortel Networks' possession, or (ii) in transit back to
Customer. Any exchanged Hardware becomes Nortel Networks' property
and, subject to Section 8 - Title and Risk of Loss, its
replacement becomes the Customer's property. The replacement
Hardware may not be new but will be in working order and
equivalent to the item exchanged. The warranty period for the
repaired or exchanged Hardware shall be one (1) year from the date
of repair or replacement. Customer agrees to ensure that exchanged
Hardware is free of any legal obligations or restrictions that
prevent its exchange and represents that all returned items are
genuine and unaltered. Where applicable, before Nortel Networks
provides warranty services, Customer agrees to: (i) follow the
problem determination, problem analysis, and warranty services
request procedures that Nortel Networks provides; (ii) secure all
program and data contained in Hardware; and (iii) inform Nortel
Networks of changes in the Hardware's location.
In addition to the warranty Services described above, Customer may
purchase post-warranty and other Services to supplement the
warranty Services, including advanced shipment of replacement
parts, as further described in Exhibit F - Extended Services and
Support Plan (ESSP) and pursuant to the terms and conditions set
forth therein. The warranty service terms and exclusions in
Section 6 above shall apply to post- and supplemental warranty
Services.
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7.2 Services in General: Customer agrees to cooperate with Nortel
--------------------
Networks in the performance by Nortel Networks of the Services,
including, without limitation, providing Nortel Networks with
sufficient, free and timely access to facilities, data,
information and personnel of Customer, and a suitable physical
environment meeting Nortel Networks' specified requirements to
permit the timely delivery and installation of Products and/or
performance of Services, including the recovery by Nortel Networks
of any tools, diagnostic or test equipment, documentation or other
items used by Nortel Networks in the performance of the Services.
In addition, Customer shall be responsible for the accuracy and
completeness of all data and any other information, including but
not limited to microwave path studies, RF propagation studies and
tower location and loading requirements, that it provides or
causes to be provided to Nortel Networks. Nortel Networks shall
have no liability for performance degradations resulting from or
attributable to Customer-provided designs. In the event that there
are any delays by Customer in fulfilling its responsibilities as
stated above, or there are errors or inaccuracies in the
information provided, Nortel Networks shall be entitled to
appropriate schedule and pricing adjustments, including storage
fees, subject to the limitations in Section 8.2.
7.3 Service Personnel: Nortel Networks and Customer are each
-------------------
responsible for the supervision, direction, compensation and
control of their own employees and subcontractors. Nortel Networks
may subcontract any portion or all of the Services to
subcontractors selected by Nortel Networks. Neither Party shall
knowingly solicit to hire employees of the other Party with whom
it had contact as a result of the performance of the Services for
a period ending six (6) months after completion of the Services.
Neither Party shall be precluded from conducting generalized
searches for employees (and hiring those employees who respond to
generalized searches) either through the use of search firms or
advertisements in the media, provided that searches are not
specifically targeted to employees providing Services.
7.4 Intellectual Property Rights: Nortel Networks, on behalf of itself
----------------------------
and its subcontractors, reserves all proprietary rights in and to:
(i) all methodologies, designs, engineering details, and other
data pertaining to the Services and designs, documentation and
other work product prepared by Nortel Networks and delivered to
Customer, (ii) all original works, computer programs and updates
developed in the course of providing the Services (except
Customer's developed programs), (iii) discoveries, inventions,
patents, know-how and techniques arising out of the Services, and
(iv) any and all products (including software and equipment)
developed as a result of the Services. The performance by Nortel
Networks of Services shall not be deemed work for hire. Nortel
Networks grants to Customer a perpetual, non-exclusive,
world-wide, paid up license to use, copy and
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modify the designs, documentation and other work product prepared
by Nortel Networks and delivered to Customer in the performance of
Services solely for Customer's internal business purposes. It is
understood between the Parties that Nortel Networks will employ
its know-how, techniques, concepts, experience and expertise, as
well as all other intellectual property, including that to which
it reserves its rights hereunder, to perform services for others
which are the same as or similar to the Services.
8. Title and Risk of Loss; Delivery
--------------------------------
8.1 Title to Hardware shall pass from Nortel Networks to Customer
immediately upon arrival to customs broker in Mexico. Risk of loss
for ordered Hardware shall pass from Nortel Networks to Customer
upon delivery as described in Section 8.2.
8.2 (a) Nortel Networks shall deliver the Products to Site in
accordance with DDP, Incoterms 2000; provided, however, that if
Customer is not ready to receive such Products, Nortel Networks
shall keep the Products in its warehouse in Mexico for a maximum
of three (3) months from the date that the Products are received
in such warehouse. After such three-month period, Customer shall
either: (i) accept delivery of such Products on Site; (ii) pay
Nortel Networks for the warehousing costs of such Products at a
rate of US$12 per square meter per month; or (iii) accept delivery
of such Products to Customer's warehouse. In the case of (i) and
(iii) above, Customer shall have a representative at the Site to
accept delivery and inventory the Products. If Customer fails to
do so, Customer shall pay Nortel Networks for the costs associated
with the subsequent delivery.
(b) Customer shall accept partial deliveries, except in the cases
where Customer is performing the installation and commissioning.
In such case, and notwithstanding the provisions of paragraph (a)
above, if Nortel Networks does not deliver the Products in full in
accordance with the Site Inventory List (except for
installation-related materials), Nortel Networks shall bear the
costs associated with the subsequent delivery. In the cases where
special delivery services are required (e.g., cranes, special
maneuvers, etc.), these will be identified prior to delivery and
the associated costs shall be borne by Customer.
9. Installation and Commissioning
------------------------------
9.1 Nortel Networks shall provide Customer a written general
chronological schedule of the Provisional Acceptance Tests to be
carried out with respect to the Products and the Services. Nortel
Networks will notify Customer at least fifteen (15) days in
advance of the date on which each portion of the
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Products and the Services will be ready for the commencement of
the Provisional Acceptance Tests to be performed with respect
thereto. Customer and its representatives shall have the option to
witness and have unrestricted access to the Provisional Acceptance
Tests. In the case that Customer chooses not to witness the
Provisional Acceptance Tests, Nortel Networks will perform said
tests in Customer's absence. Customer's failure to appear at the
appointed time and place of performance of the Provisional
Acceptance Tests pursuant to this Section 9.1 shall not preclude
Nortel Networks from performing such Provisional Acceptance Tests
and issuing the applicable Provisional Acceptance Certificate (as
defined below), upon successful completion thereof. Customer may
request additional tests, or a repetition of the tests, at its
sole cost and expense. Customer is responsible for: (i)
integration and interconnection with and configuration of
Customer's hardware and/or third party hardware and/or systems;
and (ii) installation of Furnish-only Products.
9.2 For purposes of this Agreement, a "Punch List" shall mean each
list signed by the Parties prepared in conjunction with the
Provisional Acceptance Tests for the Products and included in the
related acceptance certificate ("Provisional Acceptance
Certificate"), which sets forth one or more non service-affecting
items which have not been fully completed or performed by Nortel
Networks as of the date of completion of the related Provisional
Acceptance Test or, subject to Customer's reasonable approval in
each case, service-affecting items that may require detailed
analysis as to the appropriate remedy.
9.3 Upon successful completion of the Provisional Acceptance Tests,
Nortel Networks shall submit to Customer an acceptance report
("Acceptance Report") comprising:
(i) a certification by Nortel Networks that such Provisional
Acceptance Tests have been successfully completed, (ii) a Punch
List with respect to such Provisional Acceptance Test, and (iii)
copies of all Provisional Acceptance Test results as recorded
during the execution of such Provisional Acceptance Test.
Customer will acknowledge such certification by delivering to
Nortel Networks the Provisional Acceptance Certificate with
respect to such Products and/or Services within ten (10) business
days after receipt of the respective Acceptance Report.
9.4 Provisional Acceptance by Customer shall occur upon the earlier
of: (i) the date on which the Customer issues the Provisional
Acceptance Certificate; (ii) if Customer does not issue the
Provisional Acceptance Certificate, on
14
the eleventh (11th) day after Customer's receipt of the respective
Acceptance Report; or (iii) one hundred and twenty (120) days from
shipment of the Products. Notwithstanding (iii) above, Nortel
Networks shall be obligated to carry out the Provisional
Acceptance tests.
9.5 Final Acceptance by Customer shall occur upon the earlier of
either: (i) the completion of the Punch List; or (ii) one hundred
and eighty (180) days from shipment of the Products.
Notwithstanding (ii) above, Nortel Networks shall be obligated to
correct the Punch List Items.
9.6 Customer shall not unreasonably withhold provisional acceptance of
any Product or Service and acceptance shall not be withheld or
postponed due to: (i) deficiencies or nonconformities of a Product
or Service resulting from causes not attributable to Nortel
Networks such as, but not limited to, a material change or
inaccuracy of information provided by Customer, inadequacy or
deficiencies of any materials, facilities, or services provided
directly or indirectly by Customer, or other conditions external
to the Products or Services that are beyond the limits specified
in the Specifications; or (ii) deficiencies or shortages with
respect to the Products or Services that are attributable to
Nortel Networks but are of a nature that do not prevent operation
of the Products in a live, commercial environment ("Punch List
Items"); provided that Nortel Networks, at its expense, agrees to
correct such Punch List Items within thirty (30) days (or other
mutually agreed upon time period) after Customer has provisionally
accepted such Products or Services. Once Nortel Networks has
corrected the Punch List Items Customer shall not unreasonably
withhold final acceptance of such Product or Service.
10. Confidential Information
------------------------
10.1 Confidential information ("Information") means: (i) Software and
Third Party Software; and (ii) all business, technical, marketing
and financial information and data that is clearly marked with a
restrictive legend of the disclosing Party ("Discloser").
10.2 The Party receiving Information ("Recipient") will use the same
care and discretion to avoid disclosure, publication or
dissemination of Information as it uses with its own similar
information that it does not wish to disclose, publish or
disseminate. The Recipient may disclose Information only to: (i)
its employees, attorneys, accountants and agents, and employees,
attorneys, accountants and agents of its parent, subsidiary and
affiliated companies or subcontractors who have a need to know for
purposes of carrying out this Agreement; and (ii) any other party
with the Discloser's prior written consent. Before disclosure to
any of the above parties, the Recipient will
15
have a written agreement with such party sufficient to require
that party to treat Information in accordance with this Agreement.
10.3 The Recipient may disclose Information to the extent required by
law. However, the Recipient must give the Discloser prompt notice
and, to the extent reasonably practical, make a reasonable effort
to obtain a protective order.
10.4 No obligation of confidentiality applies to any Information that
the Recipient: (i) already possesses without obligation of
confidentiality; (ii) develops independently; or (iii) rightfully
receives without obligations of confidentiality from a third
party. No obligation of confidentiality applies to any Information
that is, or becomes, publicly available without breach of this
Agreement.
10.5 Each Party's obligations hereunder shall survive for a period of
five (5) years after receipt of Information from the Discloser,
except as otherwise mutually agreed upon by the Parties.
10.6 The Discloser makes no representations or warranties of any nature
whatsoever with respect to any Information furnished to the
recipient, including, without limitation, any warranties of
merchantability or fitness for a particular purpose or against
infringement.
10.7 The release of any advertising or other publicity relating to this
Agreement requires the prior approval of both Parties.
10.8 Without prejudice to any rights of either Party, upon expiration
or termination hereof, each Party shall, upon request by the other
Party, return to the other Party all Information of the other
Party, including all copies thereof, under its possession or
control or under the possession or control of its affiliates, or
destroy or purge its own, and cause the purging of its affiliates'
systems and files of any such Information and deliver to the other
Party a written confirmation that such destruction and purging
have been carried out.
10.9 The obligations imposed by this Section 10 shall remain in full
force and effect notwithstanding any expiration or termination of
this Agreement.
10.10 Each Party acknowledges that in the event of any breach of this
Section 10 by a Party, the non-breaching Party (the "Affected
Party") will suffer irreparable injury not compensable by money
damages and for which such
16
Affected Party will not have an adequate remedy available at law.
The Affected Party shall be entitled to obtain, without the
posting of any bond or security, such injunctive or other
equitable relief to prevent or curtail any such breach, threatened
or actual. The foregoing shall be in addition to and without
prejudice to such other rights as the Affected Party may have
hereunder or under applicable law.
10.11 Each Party shall promptly notify the other Party if it becomes
aware of any breach by any person to whom it divulges any
Information of the other Party and shall give the other Party all
reasonable assistance in connection with any proceedings which
such Party may institute against any such person for breach of
confidentiality.
11. Patents and Copyrights; Infringement
------------------------------------
11.1 If a third party claims that Nortel Networks Hardware or Software
provided to Customer under this Agreement infringes such third
party's patent or copyright, Nortel Networks will defend Customer
against that claim at Nortel Networks' expense and pay all costs
and damages that a court finally awards or are agreed in
settlement, provided that Customer: (a) promptly notifies Nortel
Networks in writing of the claim, and (b) allows Nortel Networks
to control, and cooperates with Nortel Networks in, the defense
and any related settlement negotiations.
11.2 If such a claim is made or appears likely to be made, Nortel
Networks agrees to secure the right for Customer to continue to
use the Hardware or Software, or to modify it, or to replace it
with equivalent Hardware or Software. If Nortel Networks
determines that none of these options is reasonably available,
Customer agrees to return the Hardware or Software to Nortel
Networks at Nortel Networks' written request. Nortel Networks will
then give Customer a credit equal to the net purchase price paid
by Customer. Any such claims against the Customer or liability for
infringement arising from use of the Hardware or Software
following a request for return by Nortel Networks are the sole
responsibility of Customer. This represents Customer's sole and
exclusive remedy regarding any claim of infringement.
11.3 Nortel Networks has no obligation regarding any claim based on any
of the following: (a) anything Customer provides which is
incorporated into the Hardware or Software; (b) compliance by
Nortel Networks with the Customer's specifications, designs or
instructions; (c) the amount of revenues or profits earned or
other value obtained by the use of a Product by Customer; (d)
Customer's modification of the Hardware or Software; (e) the
combination, operation, or use of the Hardware or Software with
other
17
products not provided by Nortel Networks as a system, or the
combination, operation, or use of the Hardware or Software with
any product, data, or apparatus that Nortel Networks did not
provide; (f) the Customer's failure to install or have installed
changes, revisions or updates as instructed by Nortel Networks; or
(g) infringement by a Third Party Vendor Item alone, as opposed to
its combination with Products Nortel Networks provides to Customer
as a system.
12. Limitation of Liability
-----------------------
12.1 In no event shall Nortel Networks or its agents or suppliers be
liable to Customer for more than the amount of any actual direct
damages up to the sum of all amounts paid by Customer hereunder,
regardless of the cause and whether arising in contract, tort or
otherwise. This limitation will not apply to claims for damages
for bodily injury (including death) and damages to real property
and tangible personal property and fraud for which Nortel Networks
is legally liable, and payments as set forth in Section 11 -
Patents and Copyrights.
12.2 IN NO EVENT SHALL NORTEL NETWORKS OR ITS AGENTS OR SUPPLIERS BE
LIABLE FOR ANY OF THE FOLLOWING: A) DAMAGES BASED ON ANY THIRD
PARTY CLAIM, EXCEPT AS EXPRESSLY PROVIDED FOR HEREIN; B) LOSS OF,
OR DAMAGE TO, CUSTOMER'S RECORDS, FILES OR DATA; OR C) INDIRECT,
SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES (INCLUDING
LOST PROFITS OR LOST SAVINGS), EVEN IF NORTEL NETWORKS IS INFORMED
OF THEIR POSSIBILITY.
13. [Intentionally left blank]
14. Changes or Substitution of Products; Discontinuance of Products
14.1 At any time, Nortel Networks may implement changes to the
Products, modify the Products' designs and Specifications or
substitute the Products with ones of similar or more recent
design. The Parties shall mutually agree on the price of such
changed or substituted Products. Such a change to or substitution
of the Products provided under this Agreement shall be subject to
the following requirements: (i) it shall not adversely affect the
physical or functional interchangeability or the performance
Specifications of the Products, except as otherwise agreed in
writing by Customer; (ii) the price for equivalent performance or
capacity shall not be higher than the price agreed hereunder,
except as otherwise agreed in writing by Customer; (iii) any
change or substitution of the Products shall be functionally
equivalent and compatible with the changed or substituted Product,
without the need
18
for any other adaptations; and (iv) it shall under no
circumstances either reduce or decrease Nortel Networks' warranty
obligations set forth in this Agreement.
14.2 Nortel Networks shall give Customer nine (9) months prior written
notice in the event that Nortel Networks discontinues the
manufacturing of any Products sold hereunder. For such
discontinued Products, Nortel Networks undertakes to continue
providing spare parts and technical support, including repair of
any Products (or part thereof) which is sent to Nortel Networks
for that purpose, for a period of three (3) years after such
discontinuance. The Parties acknowledge that TN-16X has been
manufactured discontinued and the last time buy opportunity is
October 31, 2003.
15. Delayed Shipment of the Products or the Performance of the Services
-------------------------------------------------------------------
15.1 Except as provided in Section 8.2, if Customer notifies Nortel
Networks less than thirty (30) days prior to the scheduled
delivery date of the Products (or if the Products have been
manufactured per the agreed upon schedule) that Customer does not
wish to take delivery thereof at the scheduled time or that a Site
is not available to receive such Products, or if Customer fails to
take delivery of such Products upon their arrival at the
applicable Site, Nortel Networks shall have the right to place the
Products in storage and Customer shall bear all costs of
demurrage, restocking, warehousing, reloading, transporting,
off-loading, and other associated costs incurred by Nortel
Networks. All such costs shall be paid in full within thirty (30)
days of Customer's receipt of Nortel Networks' commercial invoice
therefor.
15.2 If Customer notifies Nortel Networks less than twenty one (21)
days prior to the scheduled performance date of the Services that
Customer does not wish Nortel Networks to perform such Services at
the scheduled time or that the Site is not available for the
performance of such Services, Nortel Networks shall have the right
to delay the performance of the Services and Customer shall bear
all associated out of pocket travel and other costs incurred by
Nortel Networks. All such costs shall be paid in full within
thirty (30) days of Customer's receipt of Nortel Networks'
commercial invoice therefor.
15.3 Site facilities and physical specifications of equipment
(including shelters, fiber cabling, power, etc.) provided by
Customer for use with the Products sold hereunder must meet Nortel
Networks' installation and environmental Specifications. Any
required upgrades will be at Customer's expense.
19
16. Term; Termination; Survival
---------------------------
16.1 This Agreement is effective from the Closing Date and shall
continue in effect thereafter during the Term, unless otherwise
terminated in accordance herewith.
16.2 Without prejudice to any rights and remedies provided for
hereunder, either Party hereto may terminate this Agreement,
effective immediately, upon written notice to any other Party,
upon the occurrence of any of the following events or conditions:
(i) the other Party applies for or consents to the appointment of,
or the taking of possession by a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its
property, (ii) the other Party makes a general assignment for the
benefit of its creditors, (iii) the other Party commences a
voluntary proceeding under the bankruptcy, insolvency or similar
laws relating to relief from creditors generally, (iv) the other
Party fails to contest in a timely or appropriate manner, or
acquiesces in writing to, any petition filed against it in an
involuntary proceeding under the bankruptcy, insolvency or similar
laws relating to relief from creditors generally, or any
application for the appointment of a receiver, custodian, trustee,
or liquidator of itself or of all or a substantial part of its
property or its liquidation, reorganization, dissolution or
winding-up, or (v) the other Party is in material breach of this
Agreement. In addition, and without prejudice to any rights and
remedies provided for hereunder, Nortel Networks may terminate
this Agreement, effective immediately, upon written notice to
Customer, if Customer fails to make payment in accordance with the
terms and conditions hereof, which failure continues for a period
of ninety (90) days after written notice to Customer.
16.3 The respective obligations of each Party pursuant to this
Agreement that by their nature would continue beyond the
termination, cancellation, or expiration hereof shall survive
termination, cancellation, or expiration hereof. The warranty
obligations in Section 6 shall survive with respect to Products
which Customer has paid in full. Furthermore, the provisions of
Exhibit F hereto (ESSP) shall survive as long as Customer is
paying all applicable Annual Software Subscription Fees referred
to in Section 4.1 hereof.
20
17. Manuals and Documentation
-------------------------
17.1 "Manuals and Documentation" consist of documents which describe in
detail the engineering, installation, maintenance, repair and
operation of Products. Manuals and Documentation shall be provided
in the English language. Nortel Networks shall ship electronic
documentation containing the applicable Manuals and Documentation
to Customer with the initial delivery of a system of Products to
Customer. Customer may order additional copies of available
Documentation at Nortel Networks' then applicable prices.
17.2 Customer may use and reproduce the Manuals and Documentation in
paper format for purposes of engineering, installing, maintaining,
repairing and operating the Products, subject to the limitations
regarding Information set forth in Section 10. Reproduction shall
include the copyright or similar proprietary notices. Customer is
responsible for ensuring proper versions of documentation are
printed and distributed. During the Term, Nortel Networks shall,
at no additional charge to Customer, make available to Customer
upon request, electronic files with updates, revisions and
corrections of such Manuals and Documentation.
18. Assignment
----------
18.1 Each Party agrees not to assign or otherwise transfer this
Agreement or its rights under it, or delegate its obligations,
without the other Party's prior written consent, and any attempt
to do so is void. Notwithstanding the foregoing, each Party may
assign or otherwise transfer this Agreement or its rights under
it, or delegate its obligations, in whole or in part, to any of
its Affiliates by providing written notice to the other Party, it
being understood that such assigning Party shall remain fully
liable hereunder notwithstanding such assignment.
19. Export; Compliance with Laws
----------------------------
19.1 Customer agrees that it will not export Products procured
hereunder from Mexico without Nortel Networks' prior written
consent. Customer represents and warrants that it is buying
Products and/or Services for its own internal use and not for
resale. Customer agrees to comply with all applicable laws
relating to this Agreement, including all applicable export and
import laws and regulations.
20. Severability
------------
20.1 In the event that any provision of this Agreement or portions
thereof are held to be invalid or unenforceable, the remainder of
this Agreement will remain in full force and effect.
21
21. Complete Agreement; Statement of Work
-------------------------------------
21.1 The terms and conditions of this Agreement form the complete and
exclusive agreement between Customer and Nortel Networks and
replaces any prior oral or written proposals, Statements of Work
or communications regarding the subject matter thereof. In the
event of a conflict between this Agreement and a Statement of
Work, the terms of the Agreement shall prevail. Any changes to
this Agreement must be made by mutual agreement in writing. All of
Customer's rights and all of Nortel Networks' obligations are
valid only in Mexico.
22. Governing Law
-------------
22.1 The laws of the State of New York, including its provisions of the
Uniform Commercial Code, govern this Agreement, exclusive of their
conflict of laws provisions, and this Agreement shall be construed
in accordance with such laws of the State of New York; and nothing
in this Agreement affects any statutory rights of consumers that
cannot be waived or limited by contract. The United Nations
Convention on the International Sale of Goods shall not apply to
or govern this Agreement.
23. Informal Dispute Resolution
---------------------------
23.1 Prior to the initiation of any arbitration proceeding pursuant to
Section 24, but without prejudice to the immediate application of
the provisions of Section 16.1, in the event any controversy,
claim, dispute, difference or misunderstanding arises out of or
relates to this Agreement, any term or condition hereof, any of
the work to be performed hereunder or in connection herewith, the
Customer's Project Manager and the Nortel Networks Project Manager
shall meet and negotiate in good faith in an attempt to amicably
resolve such controversy, claim, dispute, difference or
misunderstanding in writing.
23.2 The Project Managers shall meet for this purpose within ten (10)
Business Days, or such other time period mutually agreed to by the
Parties, after such controversy, claim, dispute, difference or
misunderstanding arises. If the Parties are unable to resolve the
controversy, claim, dispute, difference or misunderstanding
through good faith negotiations within such ten (10) Business Day
period (or such other agreed-to time period), each Party shall,
within five (5) Business Days after the expiration of such period,
prepare a written position statement which summarizes the
unresolved issues and such Party's proposed resolution. Such
position statement shall be delivered by Nortel Networks to the
Customer's Chief Technical Officer
22
and by the Customer to the Nortel Networks' corresponding officer
or representative for resolution within (5) Business Days, or such
other time period mutually agreed to by the Parties.
24. Agreement to Resolve Disputes by Arbitration
--------------------------------------------
24.1 Any dispute, controversy or claim arising out of or relating to
this Agreement, or breach, termination or invalidity thereof,
shall be settled by arbitration, to be initiated by either Party
by notifying the other Party in writing, and conducted in the
English language (provided, however, that documents originally
prepared in the Spanish language may be admitted in evidence
without the need for translation) and in accordance with the
International Arbitration Rules of the American Arbitration
Association (the "AAA"). At the request of either Party, a
stenographic transcript of the testimony and proceedings will be
taken and the arbitrators will base their decision upon the record
and briefs (including, at the option of the Parties, post-hearing
briefs) of the Parties.
24.2 The arbitration shall be conducted by a panel composed of three
(3) arbitrators. One arbitrator shall be appointed by Nortel
Networks, and one arbitrator shall be appointed by the Customer,
in each case within thirty (30) Business Days after the date of
delivery of the notice requesting arbitration by the Party
initiating the arbitration to the other Party. The third
arbitrator shall be appointed by the first two arbitrators within
fifteen (15) Business Days after the later of the dates of
appointment of the first two arbitrators. If any Party fails to
appoint an arbitrator within the thirty Business Day period, or if
the first two arbitrators fail to agree on the appointment of a
third arbitrator within the fifteen Business Day period, then the
arbitrator to be appointed shall be appointed by the AAA. The
third arbitrator shall not be a citizen or resident of Mexico or
Canada but may be a citizen or resident of the United States of
America. Each arbitrator shall be fluent in English.
24.3 The arbitration proceeding, including the making of the award,
shall take place in the Borough of Xxxxxxxxx, Xxxx xxx Xxxxx xx
Xxx Xxxx, Xxxxxx Xxxxxx of America, and the award or the
arbitrator shall be final and binding upon the parties and may be
entered in any court of competent jurisdiction.
24.4 All aspects relating to the Parties' agreement to resolve disputes
by arbitration set forth in this Section 24, including without
limitation the validity and enforceability of such agreement to
arbitrate, the conduct of the arbitration proceeding and the
recognition and enforcement of any arbitral award in the United
States of America, shall be governed by the United States Federal
Arbitration Act, Title 9, United States Code xx.xx. 1 et seq., as
23
amended from time to time, to the exclusion of any state or
municipal laws. The Parties shall consent to the jurisdiction of
the United States District Court for the Southern District of New
York for purposes of the foregoing sentence; provided, however,
that if for any reason said court shall lack subject matter
jurisdiction, the Parties shall consent to the jurisdiction of the
Supreme Court of the State of New York, County of New York, for
such purposes. The Federal Rules of Evidence shall be used as
non-binding guidelines for the admission of evidence, and
reasonable discovery, including depositions, shall be permitted,
only in the event that the International Arbitration Rules of the
American Arbitration Association are insufficient in this respect.
Discovery and evidentiary issues shall be decided by the
arbitrators.
24.5 Each Party shall pay for the services and expenses of the
arbitrator appointed by it, its witnesses and attorneys. All other
fees and expenses incurred in connection with the arbitration
(including the fees and expenses of the AAA and the cost of the
services and expenses of the arbitrator appointed by the two
arbitrators appointed by the Parties or by the AAA) shall be paid
in equal part by the Parties, unless the award shall specify a
different division of said fees and expenses.
25. Waiver of Jury Trial
--------------------
25.1 EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF, OR RELATING TO, THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING ANY
ORDER ISSUED AND ACCEPTED HEREUNDER.
26. Exhibits; Order of Precedence
-----------------------------
26.1 The following Exhibits are part of this Agreement:
Exhibit A - Prices
Exhibit B - Change Order Procedures and Form of Change Order
Exhibit C - Acceptance Testing Exhibit D - Guidelines for
Statement of Work Exhibit E - Specifications Exhibit F - Extended
Services and Support Plan (ESSP) Exhibit G - Other Deliverables
Exhibit H - Responsibility Matrix Exhibit I - IS-41P Description
Exhibit J - Authorized Third Party Vendors
24
26.2 In the event of a conflict between the body of this Agreement and
one of its Exhibits, the former shall prevail.
27. Force Majeure
-------------
27.1 Notwithstanding anything in this Agreement to the contrary, if the
supply of the Products or the performance of the Services by
Nortel Networks, or any portion thereof, or the performance of any
other obligation hereunder by any Party is prevented, delayed,
interfered with, or interrupted by reason of a Force Majeure
Event, such prevention, delay, interference, or interruption shall
be deemed not to be a default pursuant to this Agreement and the
time or times for such performance or supply hereunder shall be
extended by the period or periods same is so prevented, delayed,
interfered with, or interrupted. The foregoing shall apply even
though any such cause exists or is foreseeable as of the date
hereof. Neither Party shall be required to change its usual
business practices or methods or to assume or incur other than its
usual costs or expenses in order to mitigate, avoid, or eliminate
any Force Majeure Event or to reduce the period of any resulting
delay. Each Party shall notify the other Parties of any delay or
failure excused by this Section 26 and shall specify the revised
performance date as soon as practicable. Nothing contained in this
Section 26 shall affect any obligation of Customer to make any
payment when due in accordance with this Agreement.
28. Notices
-------
28.1 All notices pursuant to this Agreement will be in writing and
deemed given when delivered in person, by certified mail or
courier service, or by facsimile. Notices to Customer shall be
sent to:
Operadora Unefon, S.A. de C.V.
Periferico Sur 4119
Col. Xxxxxxx xxx Xxxxxxxx
00000 Xxxxxx, D.F.
Attention: Chief Operations Officer
Fax: (+5255) 0000-0000
With a copy to:
Operadora Unefon, S.A. de C.V.
Periferico Sur 4119
Col. Xxxxxxx xxx Xxxxxxxx
00000 Xxxxxx, D.F.
Attention: Chief Executive Officer
Fax: (+5255) 0000-0000
25
Notices to Nortel Networks shall be sent to:
Nortel Networks (CALA) Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Senior Counsel
Fax: (x0-000) 000-0000
With a copy to:
Nortel Networks de Mexico, S.A. de C.V.
Xxxxxxxxxxx Xxx 0000, Xxxx 00
Xxx. San Xxxx Xxxxxxxxxxx
00000 Xxxxxx, X.X.
Attention: President
Fax: (+5255) 0000-0000
29. Backwards Compatibility
29.1 "Backwards Compatibility" or "Backwards Compatible" means that any
referenced prior Software revision level or levels of the
applicable Software or any referenced prior Hardware revision
level or levels of the applicable Hardware, as the case may be,
remains fully functional in accordance with and up to the
performance and capacity levels to which it was performing
immediately prior to any such enhancement and/or revision after
the integration with the succeeding Software revision level or
Hardware revision level, as the case may be, and that after such
integration such prior Software revision level or Hardware
revision level loses no functionality and such succeeding Software
revision level or Hardware revision level fully works and operates
with all such functionalities of such prior Software revision
level or Hardware revision level.
29.2 In addition to the warranties contained in Section 6 of this
Agreement, Nortel Networks represents and warrants that each
Software revision level during the Term of this Agreement will be
Backwards Compatible with all existing in-service Products and
with the last two (2) Software revision levels made available to
the Customer by Nortel Networks. So long as the Customer has opted
to deploy any one of the last two (2) consecutive Software
revision levels prior to the current Software revision level, the
Customer will not be required to purchase more than one Software
revision level of the Software to achieve and have its then
in-service Hardware and Software perform all of the functionality
and features of the most current
26
Software revision level of the Software and to maintain Backwards
Compatibility; provided that the Customer shall deploy each major
Software release. In the event that Software supplied by Nortel
Networks at any time does not provide Backwards Compatibility as
required by this Section 29.2, then Nortel Networks shall provide,
without charge to Customer, the Software upgrades of the Software
and otherwise take such steps as may be necessary to achieve
Backwards Compatibility.
30. Expenses
--------
30.1 Each Party shall bear its own expenses incurred in connection with
the preparation and negotiation of this Agreement and any other
documents required to effect the transactions contemplated hereby.
31. Relationship of the Parties
---------------------------
31.1 All performance by either Party under this Agreement shall be
performed as an independent contractor or client (as the case may
be) and not as an agent of the other Party, and neither Party
shall be, nor represent itself to be, the employee, agent,
representative, partner or joint venturer of the other. Neither
Party shall have the right or authority to incur or assume an
obligation on behalf of or in the name of the other Party or to
otherwise act on behalf of the other. The performing Party shall
be responsible for its employees' compliance with all applicable
laws while performing under this Agreement. This Agreement shall
not be construed to create any relationship, contractual or
otherwise, between Customer and any of Nortel Networks'
subcontractors.
31.2 The liability of Nortel Networks Limited and of Nortel Networks de
Mexico, S.A. de C.V. hereunder shall be joint and several.
32 Headings
--------
32.1 The headings given to the Sections and Exhibits herein are
inserted only for convenience and are in no way to be construed as
part of this Agreement or as a limitation of the scope of the
particular Section or Exhibit to which the title refers.
33. Waiver
------
33.1 Unless otherwise specifically provided by the terms of this
Agreement, no delay or failure to exercise a right resulting from
any breach of this Agreement shall impair such right or shall be
construed to be a waiver thereof, but such right may be exercised
from time to time as may be
27
deemed expedient. If any representation, warranty or covenant
contained in this Agreement is breached by either Party and
thereafter waived by the other Party, such waiver shall be limited
to the particular breach so waived and not be deemed to waive any
other breach under this Agreement.
34. [Intentionally left blank]
35. Counterparts
------------
35.1 This Agreement may be executed by the Parties on any number of separate
counterparts, and all such counterparts taken together shall be deemed to
constitute one and the same instrument. Execution of this Agreement may
be made by facsimile signature which, for all purposes, shall be deemed
to be an original signature.
36. Project Managers
----------------
36.1 The Customer shall appoint a project manager (the "Customer's
Project Manager") with overall authority and responsibility for
representing the Customer in overseeing the Nortel Networks'
Products and Services hereunder. With respect to all matters
related to the Products, the Customer's Project Manager shall be
authorized to act as the primary point of contact for Nortel
Networks in dealing with the Customer on all aspects of the
Products and Services and to issue all consents or approvals and
make all requests related thereto on behalf of the Customer. The
Customer's Project Manager shall be responsible for managing the
performance of the activities for which the Customer is
responsible, and of reporting the status thereof and the problems
relating thereto (together with recommended solutions thereto, if
any) to the Vendor Project Manager, in order for the Vendor
Project Manager to track the status of such activities with
respect to the Statement of Work.
36.2 The Vendor shall appoint a project manager (the "Vendor Project
Manager") to coordinate Nortel Networks' overall delivery of the
Products and Services and liaise with the Customer's Project
Manager. With respect to all matters related to the Products and
Services, the Vendor Project Manager shall be authorized to act as
the primary point of contact for the Customer in dealing with
Nortel Networks on all aspects of the Products and Services and to
issue all consents or approvals and make all requests on behalf of
Nortel Networks.
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37. Insurance
---------
37.1 During the Term of this Agreement each Party shall maintain
all-risk insurance policies covering its own acts against the
personal liability to, and property damage or loss sustained by,
any third parties. Such insurance shall be maintained with
reputable insurance companies.
37.2 Each Party shall obtain and maintain, or require each of its
Subcontractors to obtain and maintain, during the time any such
Subcontractors are engaged in providing Products and Services
hereunder, adequate insurance coverage consistent with the
requirements of Section 37.1 (provided that the maintenance of any
such Subcontractor insurance will not relieve the Party of its
other obligations pursuant to Section 37.1).
38. Use of Subcontractors
---------------------
38.1 Unless the parties agree otherwise, in the event any portion of
the Services are subcontracted or assigned, Nortel Networks shall
be solely and personally responsible, as between Customer and
Nortel Networks, for the due performance by, and the liabilities
to Customer of, such authorized subcontractors of all the
applicable terms and conditions of this Agreement. Regardless of
whether or not Nortel Networks obtains approval from Customer of a
subcontractor or whether Nortel Networks uses a subcontractor
recommended by Customer, such approval, use or recommendation will
in no way increase Nortel Networks' rights or diminish Nortel
Networks' liabilities to Customer with respect to this Agreement,
and shall not, under any circumstances: (i) give rise to any claim
by such subcontractor against Customer; (ii) create any
contractual obligation by Customer to the subcontractor; (iii)
give rise to a waiver by Customer of its rights to reject any
Service; or (iv) in any way release Nortel Networks from being
responsible to Customer for the due performance by Nortel
Networks, whether directly or through such subcontractor, of all
the applicable terms and conditions of this Agreement.
38.2 In selecting subcontractors as permitted hereunder, Nortel
Networks shall ensure that all Services provided by any such
subcontractors meet the specifications and standards agreed to in
this Agreement.
38.3 The terms of this Agreement shall in all events be binding upon
Nortel Networks regardless of and without regard to the existence
of any inconsistent terms in any agreement between Nortel Networks
and any subcontractor, and without regard to the fact that
Customer may have had notice, directly or indirectly, of any such
inconsistent term.
38.4 Customer shall have the right to reasonably object to the use of a
certain subcontractor by Nortel Networks, in which case Nortel
Networks shall
29
refrain from using such subcontractor and the project
implementation schedule shall be adjusted day for day.
39. IS-41P
------
39.1 Nortel Networks hereby grants to Customer (and shall grant to
Authorized Third Party Vendors) a non-exclusive and fully-paid
license to use the IS-41P Software (the "Software License") for as
long as this Agreement (or any replacement agreement, extension or
renewal thereof) is in full force and effect and in Customer's
Network only; provided, however, that in the case of any such
Authorized Third Party Vendor, such license shall be subject to
terms and conditions to be agreed upon between the Vendor and such
Authorized Third Party Vendor. The Software License includes the
full present and future IS-41P feature set, triggers and messages,
not limited to pre-paid, deployed within Nortel Networks'
portfolio (MTX and MSC), e.g., multiple SMS functionality, as more
fully described in Exhibit I hereto. If in the future any of such
features, triggers or messages is no longer part of IS-41P, the
Software License shall nevertheless continue to be in effect with
respect to such feature, trigger or message. The Software License
shall otherwise be governed by the provisions of Section 4 hereof,
except that it shall not be limited by number of devices and/or
subscribers. Customer shall pay for any enhancement or
modification of the IS-41P Software which may be requested by
Customer such amounts as may be mutually agreed.
39.2 As used in this Section, "Authorized Third Party Vendors" means,
without limitation, vendors of telecommunications equipment which
do not design, develop or supply access network elements that
enable cellular telephony service based on IS-41 or ANSI 41
protocols, such as cellular switches, BTSs and BSCs. A list of
agreed upon Authorized Third Party Vendors is attached as Exhibit
J hereto. Any Authorized Third Party Vendors which are not listed
in Exhibit J hereto must be agreed between the Parties in
accordance with the criteria contained in this definition. Nortel
Networks shall have the right to withdraw its approval of any
Authorized Third Party Vendor, whether or not included in Exhibit
J hereto, if such Authorized Third Party Vendor is acquired by a
vendor of telecommunications equipment which designs, develops or
supplies access network elements that enable cellular telephony
service based on IS-41 or ANSI 41 protocols, such as cellular
switches, BTSs and BSCs; provided, however, that Nortel Networks'
exercise of such right shall not affect any hardware or software
which has already been purchased by Customer from any third party
vendor or which has been integrated into the Network.
30
40. Other Deliverables
------------------
40.1 Nortel Networks shall perform the activities described in Exhibit
G hereto at no cost to Customer.
41. Extended Services and Support Plan (ESSP)
-----------------------------------------
41.1 With respect to the Nortel Networks' Products purchased from
Nortel Networks by Customer and whose warranty has expired or
terminated, regardless of whether purchased under this Agreement
or another agreement with Nortel Networks or an Affiliate thereof,
Nortel Networks shall provide technical assistance support
services as further described in Exhibit F.
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31
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
OPERADORA UNEFON, S.A. DE C.V.
By: /s/ Xxxxxx Xxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxx
-----------------------
Title: Chief Operating Officer
-----------------------
NORTEL NETWORKS LIMITED
By: /s/ Xxxxx Xxxxxx
-----------------------
Name: Xxxxx Xxxxxx
Title: Attorney-in-Fact
NORTEL NETWORKS DE MEXICO, S.A. DE C.V.
By: /s/ Xxxxxxx Xxxxx
-----------------------
Name: Xxxxxxx Xxxxx
-----------------------
Title: Attorney-in-Fact
32
