EXHIBIT 10.1
PROCUREMENT AGREEMENT
BETWEEN
INDUSTRIAS DE TELECOMUNICACIONES
AMERICANAS - ATEL S.A.
(A WHOLLY-OWNED SUBSIDIARY OF
CALYPSO WIRELESS, INC.)
CHINA TELECOM CHANGZHOU
TLECOMMUNICATION BUREAU
(CHINA TELECOM)
TABLE OF CONTENTS
-----------------
ARTICLE DESCRIPTION PAGE
------- -------------------------------------------------- ----
1 FIELD TRIAL EQUIPMENT AND SOFTWARE . . . . . . . 1
2 SCOPE; VOLUME DEPLOYMENT; AND MINIMUM
DEPLOYMENT COMMITMENT. . . . . . . . . . . . . . 3
3 ACCEPTANCE . . . . . . . . . . . . . . . . . . . 8
4 TERM . . . . . . . . . . . . . . . . . . . . . . 8
5 DOCUMENTATION AND REPORTS. . . . . . . . . . . . 9
6 DELIVERY AND INSTALLATION. . . . . . . . . . . . 9
7 FORCE MAJEURE. . . . . . . . . . . . . . . . . . 9
8 TRAINING . . . . . . . . . . . . . . . . . . . . 10
9 SOFTWARE LICENSE . . . . . . . . . . . . . . . . 10
10 SOFTWARE MODIFICATIONS . . . . . . . . . . . . . 12
11 EQUIPMENT MODIFICATIONS. . . . . . . . . . . . . 12
12 PROPRIETARY INFORMATION. . . . . . . . . . . . . 14
13 WARRANTIES AND WARRANTY EXCLUSIONS AND
LIMITATIONS. . . . . . . . . . . . . . . . . . . 16
14 REPRESENTATIONS AND OTHER WARRANTIES . . . . . . 18
15 REMEDIES AND LIMITATIONS . . . . . . . . . . . . 19
16 SUPPORT AND OTHER SERVICES . . . . . . . . . . . 20
17 COVERAGE INTERFERENCE AND THIRD PARTY FACILITIES 20
18 INDEMNIFICATION. . . . . . . . . . . . . . . . . 20
19 PATENTS, COPYRIGHT AND TRADE SECRETS . . . . . . 21
20 TERMINATION. . . . . . . . . . . . . . . . . . . 21
21 DISPUTE RESOLUTION . . . . . . . . . . . . . . . 22
22 NOTICE AND REPRESENTATIVES OF THE PARTIES. . . . 22
23 MISCELLANEOUS. . . . . . . . . . . . . . . . . . 23
24 INCORPORATION OF DOCUMENTS . . . . . . . . . . . 25
25 DEFINITIONS. . . . . . . . . . . . . . . . . . . 25
26 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . 27
ATTACHMENTS
-----------
ATTACHMENT DESCRIPTION PAGE
---------- ------------------------------------------------------ ----
1 Field Trial Equipment And Software And Pricing . . . 29
2 Field Trial Test Criteria. . . . . . . . . . . . . . 30
3 Field Trial Equipment And Software Delivery Schedule 31
4 Field Trial Support Services . . . . . . . . . . . . 32
5 Project Schedule . . . . . . . . . . . . . . . . . . 33
6 Prices For Products and Services . . . . . . . . . . 34
7 Product Specifications . . . . . . . . . . . . . . . 37
8 Product Life . . . . . . . . . . . . . . . . . . . . 38
9 Maintenance and Support Services And Other Services. 39
10 Calypso Equipment Training Classes . . . . . . . . . 43
11 Warranty Period. . . . . . . . . . . . . . . . . . . 45
THIS PROCUREMENT AGREEMENT ("Agreement"), made effective as of this 6th day
---------
of April, 2001 ("Effective Date"), by and between Industrias De
---------------
Telecomunicaciones Americanas ATEL, S.A., a Costa Rican entity, which is a
wholly-owned subsidiary of Calypso Wireless, Inc., having its principal place of
business at Metropolitan Free Trade Zone, San Xxxx, Costa Rica ("Calypso"), and
-------
China Telecom Changzhou Telecommunication Bureau (China Telecom) a corporation
of the People's Republic of China, having its principal place of business at Xx.
000 Xx Xxxx Xxxxx Xxxx Xxxxxxxxx, X.X. 000000, the People's Republic of China,
("Customer").
--------
RECITALS
A. Calypso is a development stage company that has developed a
technology for telecommunications systems and devices, and is a manufacturer of
next-generation cellular phones, IP wireless phones and communications
equipment.
B. Customer is a leading telecommunications service provider in The
People's Republic of China ("P.R.C.") offering a broad range of
------
telecommunications services to meet the increasing demand for telecommunications
services in the P.R.C.
C. Customer desires to deploy commercially, and Calypso desires to
supply, Calypso equipment and software in Customer's network contingent upon
such equipment and software performing in accordance with the Field Trial Test
Criteria (as defined below).
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, the
parties agree as follows:
ARTICLE 1
FIELD TRIAL EQUIPMENT AND SOFTWARE
In order to enable Customer to conduct a field trial (the "Field Trial") of
-----------
Calypso's wireless pagers and cellular phones, Customer shall purchase the
Equipment and license the Software from Calypso (the "Field Trial Equipment and
-------------------------
Software") listed, and in the configuration set forth, in Attachment 1 attached
-------- ------------
hereto and at the prices set forth below to enable Customer to conduct the Field
Trial and confirm that the Field Trial Equipment and Software fulfill the test
criteria set forth in Attachment 2 ("Field Trial Test Criteria"). If the
------------- ---------------------------
Equipment and Software meet the Field Trial Test Criteria, the parties shall
proceed expeditiously with the full deployment of the Equipment and Software in
accordance with the terms of this Agreement.
1
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
1.1 Price and Payment.
-------------------
1.1.1 Price. The price (the "Field Trial Equipment and Software
----- ----------------------------------
Price") for the Field Trial Equipment and Software are set forth in Attachment 1
----- ------------
attached hereto, and such prices do not include any kind of taxes whatsoever,
however designated, which may be levied or assessed on the Products or Services
provided hereunder.
1.1.2. Payment. All payments by Customer to Calypso for the Field
-------
Trial Equipment and Software shall be made in US Dollars, via wire transfer of
immediately available funds to a bank account designated by Calypso, within 240
days from the date of issuance of a commercial invoice by Calypso together with
copies of shipping documents for the Field Trial Equipment and Software. Payment
for Field Trial Equipment and Software will be returned (in the form of product
credits) once Customer has bought Calypso products in excess of $50 million in
Calypso Invoices.
1.1.3 Return. Should the Field Trial Equipment and Software not
------
meet the Field Trial Test Criteria (Attachment 2) within 180 days after system
------------
turn-up, either party may elect to terminate the Field Trial upon written notice
to the other party. In the event of such termination, Customer will promptly
return the Field Trial Equipment, Software and Handsets to Calypso at Calypso's
expense. Upon such return, Calypso will repay the payments made by Customer
within 30 days after such termination of the Field Trial.
1.2 Delivery, and Shipment. Calypso shall deliver to Customer the Field
----------------------
Trial Equipment and Software, FOB origin, in accordance with the delivery and
shipment schedule set forth in Attachment 3 attached hereto. Customer shall be
------------
responsible for the payment of freight and insurance charges in connection with
the shipping of the Field Trial Equipment and Software.
1.3 Installation. Calypso shall install the Field Trial Equipment and
------------
Software at the Customer's sites specified by Customer prior to shipment to
enable Customer to conduct the Field Trial.
1.4 Duration of Field Trial. Customer will complete the Field Trial as
------------------------
soon as practicable but, in any event, not later than 60 days after delivery,
installation and turn-up of the Field Trial Equipment and Software. If the Field
Trial Equipment and Software fulfill the Field Trial Test Criteria, Customer
will, within 30 days thereafter, commence deployment of Calypso Equipment and
Software in Customer's network pursuant to Article 2. Customer shall notify
Calypso in writing that the Field Test Equipment and Software meet the Field
Trial Test Criteria within five days after the completion of the Field Trial.
1.5 Permits and Licenses.
----------------------
1.5.1 Customer, at its own cost, shall be responsible for
obtaining all permits, licenses, consents and authorizations (collectively
"Licenses") that may be required to be obtained from any governmental entity in
---------
any applicable jurisdiction in connection with
2
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
the sale, purchase, importation, installation, testing, licensing, use and
operation of the Field Test Equipment and Software, and for any subsequent
Purchase Order of Equipment and Services and license of Software, including,
without limitation, all permits, licenses, consents, and authorizations of any
product or sales or licensing agreement that may be required by the Ministry of
Information Industry ("MII"), the Ministry of Foreign Trade and Economic
---
Cooperation ("MOFTEC"), the State Radio Regulatory Commission ("SRRC"), the
------ ----
General Administration of Customs ("Customs"), or other relevant authority of
-------
the PRC.
1.6 Support Services During, Field Trial. Calypso shall assist Customer
------------------------------------
in the installation, turn-up and Field Trial of the Field Trial Equipment and
Software in accordance with the list of Services set forth in Attachment 4
------------
attached hereto.
ARTICLE 2
SCOPE; VOLUME DEPLOYMENT; AND MINIMUM DEPLOYMENT CONINIITMENT
2.1 Scope. Upon the successful completion of the Field Trial:
-----
2.1.1 Calypso's Obligations. During the Term, in accordance with a
---------------------
Purchase Order for Equipment, and/or Services and the supply of Licensed
Software, which has been accepted by Calypso, and upon its receipt of all
Licenses, Calypso shall:
(a) engineer, deliver, install (or have installed) the
Equipment for use in the Province of Changzhou in the P.R.C. in accordance with
the intervals given in the sample Project Schedule set out in Attachment 5
------------
hereof ("Project Schedule"), or as otherwise agreed to in a specific Project
-----------------
Schedule proposed by Customer and agreed to by Calypso.
(b) grant to Customer a nonexclusive license to use all
Software associated with and integral to, the Equipment purchased by Customer
hereunder, which license shall continue beyond the Term, in accordance with
Article 9 hereof;
(c) carry out the installation of Equipment at the applicable
Installation Site substantially in accordance with the applicable Project
Schedule and in accordance with the relevant Purchase Orders;
(d) sublicense Third Party Software to Customer, including,
subject, to such third party vendor's then current applicable terms, conditions
and specifications; and
(e) provide specific support as purchased by Customer
hereunder.
2.1.2 Customer's Obligations. During the Term, in accordance with
-----------------------
a Purchase Order for Equipment and/or Services, and license of Software, which
has been accepted by Calypso, Customer shall:
3
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
(a) Purchase Equipment and/or Services and license the use of
the Licensed Software in accordance with the terms of this Agreement;
(b) Perform Customer's duties as set forth in this Agreement;
(c) Ensure that only qualified technicians perform any
maintenance and/or repair to the Equipment during the Warranty Period, which
maintenance and/or repair shall be confined to routine tasks performed in
accordance with Calypso provided Documentation;
(d) Procure any necessary License required of the parties in
connection with the performance of the parties' respective obligations
hereunder;
(e) Ensure the operation of each System, the Equipment and
Software is in full compliance with the applicable laws, rules and regulations
of the various governmental bodies which have jurisdiction and, in connection
therewith, Customer hereby represents and warrants that it is fully informed and
knowledgeable about the applicable communications and regulatory laws and all
other applicable laws; and
(f) Not unreasonably withhold Acceptance.
2.2 Minimum Deployment Commitment. Upon the successful completion of
-------------------------------
the Field Trial, Customer shall purchase the Equipment, and license the Licensed
Software, from Calypso and deploy Calypso Equipment and Software in quantities
and in configurations having a price in the aggregate of at least U.S.$500
million (the "Minimum Deployment Commitment"), U.S. $135 million of which (the
-----------------------------
"First Year Deployment Commitment") must be ordered within 12 months after the
----------------------------------
successful completion of the Field Trial, in each case based on the prices set
forth in Attachment 6 attached hereto, as such prices may change from time to
-------------
time in accordance with the terms hereof and of each Purchase Order.
2.3 Forecasts; Project Schedule.
-----------------------------
2.3.1 Quantity Forecast. Notwithstanding the Project Schedule, as
------------------
such may be amended from time to time, by the fifth business day of each month
(the month hereafter being "M"), Customer will provide to Calypso a non-binding
-
ten-month rolling forecast (the "Rolling Forecast") of deliveries for the
-----------------
ten-month period commencing at the beginning of the third-month after the month
in which the forecast is made the Rolling Forecast (M+3 through M+12) will show
the quantity of each Equipment by product code which Customer anticipates it
will need to be delivered during the specified month.
2.3.2 Initial Rolling Forecast; Capacity. Notwithstanding anything
----------------------------------
to the contrary contained herein, the parties shall discuss the initial Project
Schedule and Initial Rolling Forecast issued under this Agreement to better
anticipate Equipment and Software requirements and availability.
2.4 Purchase Orders. During the Term of this Agreement, Customer will
----------------
4
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
issue Purchase Orders specifying the Equipment and Software ordered by Customer,
the delivery site or sites ("Installation Site[s]") for the Equipment and
---------------------
Software and the proposed delivery schedule.
2.4.1 Notwithstanding that a Purchase Order may not refer to this
Agreement, any Purchase Order for Equipment and/or Services issued during the
Term of this Agreement 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 (duly signed by
authorized representatives of both parties). Customer hereby expressly agrees
that except for non-conflicting administrative terms as provided below, any
additional or preprinted terms or conditions on the applicable Purchase Order,
shall be null, void and of no effect. Each such Purchase Order shall specify:
(a) The description of the ordered Equipment and/or Services,
including any identification referenced in the price list herein attached as
Attachment 6;
-------------
(b) Requested place and date of delivery as previously agreed
by Calypso;
(c) Applicable Price for the ordered Equipment and/or
Services as set forth in Attachment 6 or as may be separately quoted by Calypso
------------
from time to time;
(d) Prices for Equipment engineering and installation to be
quoted by Calypso, together with a mutually agreed installation and turn-up
schedule;
(e) Installation Site(s) where applicable;
(f) Other appropriate information as may be required by
Calypso necessary to fill the Purchase Order; and
(g) Location to which the applicable invoice shall be
rendered for payment.
2.5 Price. Subject to:
-----
2.5.1 As set forth in Attachment 6, the price ("Price") for any
------------ -----
Equipment and/or Services (as such Prices may be adjusted by Calypso from time
to time to reflect market conditions) shall consist of (i) the Price of the
Minimum Deployment Commitment Purchase Order or any subsequent Purchase Orders;
(ii) unit list Prices for Equipment and/or Services; (iii) license fees to use
the Software associated with such Equipment; and (iv) for Third Party Software
and Services, the Prices as may be quoted by Calypso from time to time.
2.5.2 Unless otherwise specified, the Prices set forth in Attachment 6
------------
are exclusive of Calypso's charges for any Services associated therewith.
5
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
2.5.3 The Prices for Products and Services set forth in Attachment
----------
6 attached hereto, such prices do not include any kind of taxes whatsoever,
-
however designated, which may be levied or assessed on the Products or Services
which shall be the responsibility of Customer pursuant to Section 2.6.4.
2.5.4 The Prices may be adjusted by Calypso from time to time to
reflect market conditions. Calypso shall notify Customer of any Price adjustment
within 60 days of the effective date of such adjustment. If price of any
Calypso product is increased such that the Customer is unable to sell or market
the Calypso product, Customer is not obligated to purchase such product.
2.6 Payment. With respect to payment for Purchase Orders for Equipment,
-------
Customer shall pay Calypso the Price in accordance with the following schedule:
2.6.1 Customer will remit payment to Calypso for invoiced amounts
within thirty (30) days from the date of issuance of a commercial invoice by
Calypso together with copies of shipping documents, which will be issued upon
shipment of the Product or completion of Services, as applicable.
2.6.2 Any additional monies that become due to Calypso (including,
without limitation, Merchandise order, freight, such items as are described in
Section 2.6.5, Software Release license fees described in Article 9, Equipment
--------------
purchases wherein installation is not provided by Calypso, or Third Party
Equipment or Third Party Software not part of the original System order) shall
be invoiced one hundred percent (100%) upon shipment or, in the case of Software
Release license fees, upon implementation of such Software Release. Incidental
and/or additional Services not included under Section 2.5.1 shall be invoiced
monthly as performed or upon completion, whichever occurs first. In the case of
a phased Installation, or if portions of an Installation are delayed due to no
fault of Calypso, Calypso may invoice on a per Installation Site basis upon
completion of the applicable milestone event.
2.6.3 Customer shall pay all amounts invoiced by Calypso pursuant
to this Section 2.6 within thirty (30) days from the date of Calypso's invoice
therefor. All past due amounts (collectively, "Past Due Amounts") shall bear
----------------
interest at the rate of one and one percent (1%) per month (or such lesser rate
as may be the maximum permissible rate under applicable law), beginning with the
date on which the applicable Past Due Amount was due and payable.
2.6.4 Customer shall promptly reimburse and/or pay Calypso, upon
demand, or shall pay directly, if so requested by Calypso, all taxes, levies,
import and export duties or imposts and charges (collectively, "Duties and
----------
Taxes") including, without limitation, penalty and interest, imposed by any
-----
governmental or taxing authority, relating to the purchase, license, ownership,
possession, use, operation or relocation of Equipment, Software or Services
provided by Calypso under this Agreement, excluding, however, all taxes computed
upon the net income of Calypso. To the extent Calypso is required by law to
collect such taxes, one hundred percent (100%) thereof shall be added to
invoices as separately stated
6
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
charges and paid in full by Customer, unless Customer is exempt from such taxes
and furnishes Calypso with a certificate of exemption in a form reasonably
acceptable to Calypso prior to issuance of such invoice. Customer shall hold
Calypso harmless from any and all claims levied by a proper taxing authority for
such taxes, including any interest, penalties or late charges due to Customer's
failure to perform hereunder. Customer's obligations pursuant to this Section
2.6.4 shall survive expiration or a termination of this Agreement.
2.6.5 Prior to payment in full of the Price and all additional
monies due to Calypso without written permission of Calypso, Customer shall not
sell or lease Equipment purchased by it, or assign any license to use the
Licensed Software, or allow any liens or encumbrances to attach to any such
Equipment, or remove such Equipment or Licensed Software from the Installation
Site (if applicable).
2.6.6 Calypso reserves the right to require reasonable assurances
of payment by Customer as a condition to accepting certain Purchase Orders.
Calypso may, from time to time, evaluate Customer's credit standing, and on that
basis, establish a credit limit to accommodate Customer's issuance of Purchase
Orders as herein provided. Customer shall provide any reasonable assistance
requested by Calypso necessary for Calypso to make such evaluation.
2.7 Delivery, Risk of Loss; Title.
---------------------------------
2.7.1 Equipment shall be priced and shipped F.O.B place of shipment.
Calypso may from time to time, pre-pay freight charges from the place of
shipment and invoice such charges back to Customer. Equipment shall be shipped
to the Installation Site(s). Software shall be shipped to Customer's designated
delivery location (i.e., a staging center of warehouse).
Customer shall be responsible for the coordination of all delivery
arrangements required to comply with Project Schedule and/or Rolling Forecast
dates and for freight and handling charges from Customer's designated delivery
location to the Installation Sites.
2.7.2 Title and risk of loss or damage to any Equipment furnished by
Calypso to Customer in accordance with this Agreement shall pass to Customer at
the point and on the date of shipment. Calypso warrants to Customer that such
title shall be good and clear title, free and clear of all liens and
encumbrances. The foregoing notwithstanding, title to Software shall not pass to
Customer at any time.
2.7.3 Not later than thirty (30) days prior to the earliest shipment
date relating to any of the items covered by the applicable Purchase Order,
Customer may notify Calypso that Customer (i) does not wish to receive shipment
of any Equipment on the date set forth in such Purchase Order, or (ii) that
Customer's facilities are not prepared in sufficient time for Calypso to make
delivery pursuant to the date set forth in the applicable Purchase Order. In
such case Calypso shall have the right to place such Equipment in storage and
Customer shall be liable for all additional transportation, demurrage, loading,
storage, and associated costs thereby incurred by Calypso. The shipment of
Equipment to a storage location as provided in
7
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
this Section 2.6.2 shall be deemed to constitute shipment of the Equipment for
purposes of invoicing, passage of title and risk of loss, and commencement of
the Warranty Period.
2.8 Spare Kits. Customer will purchase on-site installation spares
-----------
parts and components of the Equipment ("Spares Kits" or "Kits") reasonably
----------- ----
designated by Calypso and agreed upon by Calypso and Customer from time to dine
as the quantity necessary to enable Calypso to provide the warranty and support
services required by this Agreement. The quantity and locations of the Kits may
change with installation requirements and changes in the topology of Customer's
network.
ARTICLE 3
ACCEPTANCE
3.1 Customer will have 10 days after receipt of the Equipment to
perform Acceptance Tests to Accept the Equipment and confirm that the Equipment
complies with its applicable technical requirements set forth in Attachment 7
------------
attached hereto ("Product Specifications"). Customer shall accept the Equipment
----------------------
pursuant to written communication to Calypso within such 10 day period, and
Customer shall not unreasonably withhold Acceptance. Unless Customer notifies
Calypso within such 10 day period of any defects in such Equipment, Customer
will be deemed to have accepted the Equipment.
3.2 Calypso will notify Customer promptly upon learning of any material
defects in any of the Equipment.
3.3 Maintenance and Support.
-------------------------
3.3.1 Calypso will provide support for all Equipment and Software
and for its expected useful life, as set forth in Attachment 8 ("Product Life")
------------ ------------
in accordance with the terms and conditions set forth in Attachment 9.
------------
3.3.2 If Calypso discontinues manufacture and/or support of any of
its Equipment, Calypso will, at Customer's request, deliver to Customer all of
the technical information owned and possessed by Calypso relating to the service
and/or support of the Equipment, in the form being used in Calypso's service and
support centers in its day-to-day operations of service. Customer may use such
technical information only to service and support its existing Equipment then in
use and used by its subscribers. Title to Calypso's technical information and
intellectual property rights will remain with Calypso.
ARTICLE 4
TERM
Subject to the terms and conditions of this Agreement, the initial term of
this Agreement shall be three (3) years from the successful completion of the
Field Trial ("Initial Term"). This Agreement will be automatically renewed for
------------
successive one-year terms
8
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
(without any Minimum Deployment Commitment pursuant to Section 2.2 unless
otherwise agreed by the parties) unless either party gives notice of non-renewal
at least 90 days before the expiration of the Initial Term or any renewal term.
The Initial Term in combination with any extensions is also referred to in this
Agreement as the "Term".
----
ARTICLE 5
DOCUMENTATION AND REPORTS
5.1 Calypso will provide to Customer, one electronic copy of the
Documentation necessary to operate and maintain the Equipment and Software
provided hereunder for each Installation Site at which such Equipment is
installed. Calypso will provide Customer with:
(a) updates to the Documentation, as such updates are made generally
available; and
(b) new and/or revised data incorporating any to the Equipment or
Software which affect form, fit, or function, in each case at no additional
charge to Customer. Such Documentation may be reproduced by Customer for its
internal use, provided that any copyright notice of such Documentation is copied
as well. Soft copies of such Documentation will be available upon Customer's
request. Such Documentation will be used solely for Customer's internal use only
on a need-to-know and need-to-use basis.
ARTICLE 6
DELIVERY AND INSTALLATION
6.1 Calypso will xxxx each shipment to Customer with Calypso name, the
Purchase Order number, and the identity and quantity of Equipment. Final
destination, interim staging area or any special shipping instructions and any
applicable charge will be specified on each Purchase Order.
6.2 Calypso will perform installation services for the Products at
Calypso then standard rates for such services and on terms and conditions agreed
by the parties.
ARTICLE 7
FORCE MAJEURE
In the performance of this Agreement, or of any obligation hereunder, is
prevented, restricted or interfered with by reason of fires, breakdown of plant,
labor disputes, embargoes, government ordinances or requirements, civil or
military authorities, acts of God or of the public enemy, acts or omissions of
carriers, inability to obtain necessary materials or services from suppliers, or
other causes beyond the reasonable control of the party whose performance is
affected, then the party affected upon giving prompt notice to the other party,
as set forth in Article 22 shall be excused from such performance on a
day-for-day basis to the extent of such prevention, restriction, or interference
(and the other party shall likewise be excused from performance of its
obligations on a day-for-day basis to
9
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
the extent such party's obligations relate to the performance so prevented,
restricted or interfered with); provided that the party so affected shall use
reasonable efforts to avoid or remove such causes of nonperformance and both
parties shall proceed to perform their obligations with dispatch whenever such
causes are removed or cease.
ARTICLE 8
TRAINING
8.1 Initial Training. Calypso shall provide, at Calypso's cost and
-----------------
expense, one initial training course and training material for 10 individuals
who are employees of Customer (the "Initial Training"). The Initial Training
----------------
course shall take place at a site to be selected by Customer. The Initial
Training course shall cover the subjects that are necessary to enable Customer's
personnel to install, operate and maintain the Equipment and Software asset
forth in Attachment 10.
--------------
8.2 On-Going Training. Calypso will provide, upon Customer's reasonable
-----------------
request and at the time or times reasonably required by Customer during the Term
of this Agreement, training classes and training materials for Customer
personnel at Customer's sole cost and expense. Training will take place at the
Installation Sites. The training programs necessary for full installation,
operation and maintenance of the Calypso Equipment and Software are summarized
in Attachment 10 ("Calypso Training") which shall be subject to change by
-------------- -----------------
Calypso from time to time to reflect updates to the training methodology and
courses. Such training will be kept current to encompass the latest Software
Releases and Equipment, or any other Software revision level and/or Equipment
revision level directed by Customer. Subject to the foregoing, course content
and material will be designed and agreed to by mutual consent. Customer will
have the right to copy Calypso's training materials for its internal use only
provided that any copyright notice included in such material is copied as well.
Courses will be limited to a maximum often (10) attendees in each course
session.
8.3 Certification. Calypso will certify attendees upon their successful
-------------
completion of the course. Such course content and materials may be tailored or
customized by Customer for its internal use only.
ARTICLE 9
SOFTWARE LICENSE
9.1 Subject to payment of any and all Purchase Orders for Equipment and
Services purchased by Customer hereunder, Calypso grants to Customer a perpetual
(subject to termination pursuant to the terms of this Agreement), personal,
nontransferable (except as provided in this Agreement), and nonexclusive license
(or, with respect to the Third Party Software, a sublicense) to use the Licensed
Software and its related Documentation provided by Calypso pursuant to the terms
of this Agreement. Use of the Licensed Software is
10
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
restricted to all the Network Elements or the designated equipment, as
applicable ("Designated Equipment") set forth on Customer's Purchase Order(s).
---------------------
The license grants Customer only a right to use and Customer will not sublicense
such Licensed Software, or modify, decompile, or disassemble Licensed Software
furnished object code to generate corresponding Source Code. Customer and its
customers will be entitled to modify only the user-controlled features of the
Licensed Software as provided for in the relaxed Documentation. With respect to
any Third Party Software, in addition to the terms and conditions herein,
Customer will abide by the applicable terms and conditions of such Third Party
Software.
9.2 All Licensed Software (whether or not part of firmware) and its
related documentation furnished by Calypso, and all copies thereof made by
Customer, including translations, compilations, and partial copies, are and will
remain the exclusive property of Calypso and its licensors. Customer will hold
such Licensed Software and related documentation in strict confidence, and will
not, without Calypso's prior written consent, disclose, provide, provide access
to, or otherwise make available, in whole or in part, any Licensed Software or
related documentation including any description of the Calypso Management
Information Data Base (CMIDB) sections of the Software to anyone, except to its
employees, and those agents and subcontractors that are not competitors of
Calypso having a need-to-know for purposes of operating or maintaining the
related Equipment and Software, and except to its customers to the extent
necessary to permit them to utilize customer-controlled features in accordance
with the applicable Documentation. Such availability shall be limited to only
those portions of the Software and its related documentation for which there is
a need-to-know for purposes of operating or maintaining the related Equipment
and Software. All persons to whom the Software and relative documentation is
made available shall have agreed in writing to obligations of confidentiality at
least as protective as those set forth herein. Customer shall maintain an
accurate and complete list of all persons having access to the Licensed Software
and its related documentation and shall maintain a log of persons accessing the
Licensed Software and its related documentation and the nature of the access,
e.g., edit, view, copy, etc. Customer shall provide Calypso with prompt written
notice of any unauthorized use of the Licensed Software and its related
documentation and fully cooperate with Calypso in enforcing Calypso's
proprietary rights in the Software and its related documentation. Customer shall
not, and shall not permit any other person to copy, duplicate, modify, alter,
enhance, revise, summarize, or prepare derivative works from any portion of the
CMIDB sections of the Software. Customer will not copy Software embodied in
firmware, Customer will not make any copies of any other Software or related
documentation except as necessary for maintaining archival copies in accordance
with Customer's customary practices. Such archival copies shall be stored in a
locked and, secured container. Customer will reproduce and include any Calypso
copyright and proprietary notice on all such necessary copies of the Software
and its related documentation. Customer will take appropriate action, by
instruction, agreement, or otherwise, with the persons permitted access to the
Software and related documentation to enable Customer to satisfy its obligation
under this Agreement.
9.3 When the Software and related documentation are no longer needed by
Customer, or if Customer's license is canceled or terminated, Customer will
return sill copies
11
of such Software and related documentation to Calypso or follow written
disposition instructions provided by Calypso.
9.4 Subject to Calypso's approval, Customer may transfer its right-to-use
Software furnished under this Agreement without the payment of an additional
right-to-use fee by third party transferee, except for additional fees which
would have applicable to Customer with respect to usage sensitive factors (e.g.,
feature pricing based on activation level). Such transfer can be made to end
user for their own internal use, but not to any competitor of Calypso and only
under the following conditions:
(a) Such Software will be used only within The Peoples Republic of
China or any other countries for which such Software may be licensed from time
to time under the terms of this Agreement.
(b) The right to use such Software may be transferred only
together with the Designated Equipment with which Customer has a right to use
such Software, as long as such transfer of the Designated Equipment is permitted
pursuant to Section 14.3, and such right to use the Software will continue to be
limited to use with such Designated Equipment;
(c) Before any such Software will be transferred, Customer will
notify Calypso in writing of such intended transfer and the transferee will have
agreed in writing (a copy of which will be provided to Calypso before such
transfer) to the terms of this Agreement and any amendments thereto.
9.5 Subject to Section 11.2, upon advance written notice to Calypso,
Customer may physically transfer Software or optional feature packages, for
which Customer has the right to use, from one Customer-owned workstation
computer and relocate them to another Customer-owned workstation computer,
provided that (a) the Equipment from which the Software has been transferred
will cease to be Designated Equipment for such transferred Software and the
workstation to which the Software has been transferred will thereafter be deemed
to be the Designated Equipment, and (b) the Software delivered by Calypso
pursuant to a Purchase Order will not be resident at any time on more than the
total number of items of Designated Equipment for such Software set forth on the
applicable Purchase Order. Customer will not be required to pay additional
right-to-use fees as a result of such relocation.
12
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
ARTICLE 10
SOFTWARE MODIFICATIONS
10.1 Calypso will furnish to Customer preliminary planning information and
documentation for new releases of the Software (each, a "Software Release").
----------------
Such information will be provided at no charge to Customer. New generally
available releases of the Software may be licensed by Customer at no charge and
to the extent such releases are included in the Maintenance and Support Services
then in effect pursuant to the terms of this Agreement.
ARTICLE 11
EQUIPMENT MODIFICATIONS
11.1 Prior to shipment, Calypso may at any time make changes in
Equipment or modify the drawings and specifications relating thereto or
substitute Equipment of later design, provided the changes, modifications or
substitutions under normal and proper use do not impact upon form, fit or
function of the ordered Equipment or materially adversely affect the use,
function, or performance of the ordered Software. With respect to changes,
modifications, and substitutions which affect the form, fit, function, use or
performance of an ordered Equipment. Calypso will notify Customer in writing 90
days prior to their effective dates. In the event any such change is not desired
by Customer, Customer will notify Calypso within 30 days from the date of notice
and Calypso will not furnish any such changed Equipment to Customer on any
orders in process at the time Calypso is so notified.
Calypso may discontinue any Equipment or Software Release if Calypso gives
Customer at least one year's notice thereof. In such event, Calypso will provide
Customer with a suggested replacement at the same time for the remainder of the
term of this Agreement. Customer will have the right to substitute the
replacement product for the Equipment under this Agreement, at a price to be
negotiated by the parties. If Customer elects not to use the suggested
replacement product, Calypso will offer Customer a one-year period beginning the
day of the notice of discontinuance within which Customer can place orders for
the discontinued Equipment. Customer may give a last order ("One Time Buy
------------
Order") immediately prior to the end of the six-month period. The One Time Buy
Order is non-cancelable. non-reschedulable and non-returnable; except as
otherwise provided in this Agreement. Products ordered with the One Time Buy
Order will be delivered to Customer as requested by Customer but no later than
one year alter the notice of discontinuance.
11.2 Class Changes.
--------------
(a) After Calypso Equipment has been shipped to Customer, if
Calypso issues a Class A Change or Class B Change, or where modification to
correct an error in Documentation is to be introduced, Calypso will promptly
notify Customer of such change through Calypso's designated notification
procedure ("Change Notification"). Calypso will
--------------------
13
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
promptly provide, or cause the respective manufacturer to provide, to Customer
any changes comparable to Class A and Class B Changes to the extent they are
made available by manufacturers with respect to Vendor Items sold to Customer by
Calypso; it being understood that the respective manufacturers of the Vendor
Items may not provide such changes for the same period of time for which Calypso
is obligated to provide Class A and Class B changes.
(b) Calypso will, at its expense, furnish the parts and
documentation necessary for Customer to implement such Class A Change if it is
issued within the Product Life for the applicable Product.
(c) In any of the instances above, if Calypso determines that the
Equipment or part thereof subject to such change is readily returnable (e.g.
plug-in items), Customer, at its expense, will remove and will return such
Equipment or part to Calypso's facility and Calypso, at its expense, will
implement such change at its facility and return such changed Equipment or part
to Customer's designated location. Reinstallation will be performed by Customer
at its expense.
(d) Calypso's undertaking under this Article 11 with respect to
Vendor Items is limited to the extent changes comparable to Class A Changes are
provided by the respective manufacturers of Vendor Items.
(e) If Customer does not make or permit Calypso to make a Class A
Change Notification within one (1) year alter the date of the related Change
Notification, or a Class B Change within two (2) years alter the date of the
related Change Notification, subsequent changes, repairs, or replacements
affected by the failure to make such change may, at Calypso's option, be billed
to Customer whether or not such subsequent change, repair, or replacement is
covered under warranty.
(f) If Calypso or any applicable manufacturer of a Vendor Item
issues a Class B Change (or comparable change in the case of such manufacturer)
after Equipment has been shipped to Customer, Calypso will promptly notify
Customer if such change if it is being generally offered to Calypso's customers.
When a Class B Change is requested by Customer, billing will be at Calypso's
applicable prices or the respective manufacturer's then current prices to
Calypso as the case may be. Notwithstanding the above, there will be no charge
for any Class B Change (or, in the case of a Vendor Item, a comparable change)
if such change is included in the Maintenance or Support Services then in effect
pursuant to the terms of this Agreement.
11.3 Calypso reserves the right to discontinue any Equipment under this
Agreement if Customer has not ordered any of that Equipment for two consecutive
years. Calypso will provide a minimum of 90 days' prior notice for Equipment
being discontinued.
11.4 Calypso reserves the right to develop, manufacture and market
Equipment incorporating new features, functionality, or performance
characteristics identified as a result
14
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
of its relationship with Customer. Customer acknowledges that such Equipment
will be the sole and exclusive property of Calypso.
ARTICLE 12
PROPRIETARY INFORMATION
12.1 Each party acknowledges the other party's ownership of trade
secrets, proprietary or confidential information, including but not limited to
products, planned products services or planned services, the identity of or
information concerning customers or prospective customers, data, financial
information, computer software, processes, methods, knowledge, inventions,
ideas, marketing promotions, discoveries, inventions, patents, copyrights,
marks, current or planned activities, research development or other information
relating to the other party's business activities or operations and those of its
customers or subcontractors, as well as the pricing and other terms and
conditions of this Agreement (collectively referred to hereinafter as the
"Proprietary Information").
------------------------
12.2 (a) This Agreement creates a confidential relationship between
Customer and Calypso and, in the course of, negotiating performing this
Agreement, including providing Equipment and licensing software pursuant to this
Agreement, the disclosing party may disclose Proprietary information to the
receiving party. The receiving party will keep Proprietary information
confidential and, except as directed or authorized in writing, will use
Proprietary Information only to provide, the Equipment, Software and services
pursuant to this Agreement and will not disclose to any person or entity,
directly or indirectly, in whole or in part, any Proprietary Information,
information prepared from Proprietary Information, or information that comes
into possession by reason of services hereunder. Dissemination of Proprietary
Information will be limited to the personnel within the receiving party's
organization with a need to know and solely for the purpose of the performance
of duties hereunder. Upon cessation of work hereunder, the receiving party will
return or destroy and certify to the disclosing party such destruction of all
documents, papers and other materials in its control that contain or relate to
Proprietary Information. To the extent practicable all proprietary information
disclosed to the receiving party will be promptly identified as such by the
disclosing party in writing.
(b) The receiving party will protect the Proprietary Information
from unauthorized use or disclosure by exercising the same degree of care that
it uses with respect to Information of its own of a similar nature, but in no
event less than reasonable care.
12.3 Customer acknowledges and agrees that the Equipment and Software
constitute and embody the valuable trade secrets and intellectual property of
Calypso developed at great expense to Calypso. Customer may not sell, assign or
otherwise transfer any of the Equipment and Software to a third party other than
a telecommunications carrier for its own internal use in providing
telecommunication services, without the prior written consent of Calypso.
Customer agrees that it would be reasonable for Calypso to withhold its consent
to any such sale, assignment or transfer of any Equipment or Software to a
company involved in
15
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
the development, marketing, distribution or sale of any products that are
competitive with the Equipment and Software.
12.4 Notwithstanding anything to the contrary contained herein, no
information will be deemed Proprietary Information if the party receiving such
information hereunder or any of its Affiliates ("Receiving Party") can
----------------
demonstrate that such information: (a) is generally known to the public on the
date of disclosure of same or becomes generally known to the public after such
date through no breach of this Agreement or any other obligation of
confidentiality; (b) is independently developed by the Receiving Party alter the
date of disclosure by employees without access to Proprietary Information of the
Disclosing Party; (c) is approved for release by written authorization of the
Disclosing Party, but only to the extent of and subject to such conditions as
may be imposed in such written authorization; (d) is required by law, rule or
regulation, including requirements of the applicable securities exchanges, to be
disclosed, but only to the extent and for the purposes of such required
disclosure and subject to Section 14.5; or (e) is disclosed in response to a
valid order of a court or other governmental body, but only to the extent of and
for the purposes of such order and subject to Section 12.5.
12.5 If a Receiving Party is or may be required by law or court order
to disclose any Proprietary Information of a Disclosing Party, such Receiving
Party: (a) will provide to such Disclosing Party immediate notice of such
possible disclosure; and (b) will permit such Disclosing Party, at its expense,
to take all reasonable actions to eliminate such requirement of such disclosure,
to limit the scope of same and to obtain protective orders to protect the
confidentiality of such Proprietary Information, including, without limitation,
filing motions and otherwise making appearances before the court.
12.6 The provisions of this Article 12 will survive any termination or
expiration of this Agreement.
ARTICLE 13
WARRANTIES AND WARRANTY EXCLUSIONS AND LIMITATIONS
13.1 Warranty.
---------
13.1.1 Calypso warrants that during the Warranty Period (as set forth
in Attachment 11 attached hereto), the Equipment furnished under this Agreement
-------------
shall be free from defects in material and workmanship, and shall conform to the
applicable portions of the Product Specifications. Any and all claims for breach
of this warranty are conclusively deemed waived unless made during the Warranty
Period. Performance of Calypso's obligations hereunder shall not extend the
Warranty Period, except that any Equipment repaired, replaced or corrected
during the warranty Period shall continue to be warranted for the balance of the
Warranty Period.
13.1.2 Services furnished by Calypso hereunder shall be performed in a
professional and workmanlike manner.
16
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
13.1.3 Calypso's sole obligation and Customer's exclusive remedy under
this warranty are limited to the replacement or repair, at Calypso's option, of
the defective Equipment component, or the correction of the faulty Services.
Such replacement Equipment may be new or reconditioned to perform as new, at
Calypso's option. Customer shall be responsible for de-installation of any such
defective Equipment and reinstallation of any replacement Equipment, as well as
risk of loss and damage and all transportation costs for defective Equipment
shipped to Calypso. Calypso shall bear the risk of loss and damage and all
transportation costs for replacement Equipment shipped to Customer. Title to
defective or replacement Equipment shall pass to Calypso or Customer, as
appropriate, upon receipt thereof.
13.2 Software Warranty. Calypso warrants that, provided the Software
-------------------
is not altered by Customer, and provided the Software is used in conjunction
with the Equipment purchased under this Agreement and such Equipment has been
maintained in accordance with Calypso's recommended maintenance procedures, the
Software shall function during the Warranty Period without defects which
materially affect Customer's use of the software in accordance with Calypso's
specifications for the Software. In the event the Software fails to so perform
and Customer's use of the Equipment is materially affected by such failure,
Customer's exclusive remedy under this warranty is to require Calypso to correct
such failure and such remedy is conditioned upon Calypso's receiving written
notice within the Warranty Period (or oral notice promptly confirmed in writing)
of such failure. The correction of any Software failure shall not extend the
Software Warranty Period.
13.3 Response Services/Time.
-----------------------
13.3.1 During the Warranty Period, Calypso's technical assistance
service ("TAS") department shall provide reasonable assistance in the
---
investigation and resolution of service-affecting warranty defects. If such
assistance is requested by Customer, Customer agrees to follow Calypso's
standard policies and procedures related to such TAS services. The Equipment
Warranty Period shall include TAS only to the extent that any TAS services
provided under the warranty also apply to Equipment operating in conjunction
with the applicable System. For routine warranty service situations, Calypso
shall ship replacement or repaired Equipment (or components thereof within
thirty (30) days of receipt of the defective Equipment (or components thereof)
from Customer.
13.3.2 For emergency warranty service situations, Calypso shall,
during the Warranty Period, use all reasonable efforts to ship replacement
Equipment (or components thereof) within twenty-four (24) hours of notification
of the warranty defect by Customer. Customer shall pay to Calypso the surcharges
for such expedited shipment of replacement Equipment. Customer shall ship the
any defective Equipment to Calypso within thirty (30) days of receipt of the
replacement Equipment. In the event Calypso fails to receive such defective
Equipment within such thirty (30) day period, Calypso shall invoice Customer for
the replacement Equipment at the then-current price in effect therefore.
13.4 Third Party Equipment.
-----------------------
17
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
13.4.1 Miscellaneous Third Party Equipment furnished in conjunction
with the Equipment, shall be warranted in accordance with the Equipment
warranties set forth in Section 13.1 and handled through Calypso's Repair and
Return department. With respect to all other Third Party Equipment ordered by
Customer, Third Party Equipment shall be warranted directly by such Third Party
vendors in accordance with their standard terms and conditions, including by way
of example and not by limitation, such vendor's standard response time(s) and
procedure(s) for repair and return. Customer's sole and exclusive remedy against
Calypso with respect to Third Party Equipment provided under this Agreement.
13.5 THE WARRANTIES AND REMEDIES SET FORTH ABOVE CONSTITUTE THE ONLY
------------------------------------------------------------------
WARRANTIES WITH RESPECT TO THE EQUIPMENT, SOFTWARE AND SERVICES PROVIDED AND
--------------------------------------------------------------------------------
CUSTOMER'S EXCLUSIVE REMEDIES IN THE EVENT SUCH WARRANTIES ARE BREACHED. THEY
--------------------------------------------------------------------------------
ARE IN LIEU OF ALL OTHER WARRANTIES WRITTEN OR ORAL, STATUTORY. EXPRESS OR
--------------------------------------------------------------------------------
IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTY OR MERCHANTABILITY AND THE
--------------------------------------------------------------------------------
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. CALYPSO SHALL NOT BE LIABLE FOR
--------------------------------------------------------------------------------
ANY INCIDENTAL. CONSEQUENTIAL, OR SPECIAL DAMAGES OF ANY NATURE WHATSOEVER.
--------------------------------------------------------------------------------
FURTHERMORE. BECAUSE EACH EQUIPMENT AND SYSTEM IS UNIQUE CALYPSO DISCLAIMS
--------------------------------------------------------------------------------
LIABILITY FOR RANGE. COVERAGE. SUBSCRIBER CAPACITY. SERVICE LEVEL OR OPERATION
--------------------------------------------------------------------------------
OF THE SYSTEM AS A WHOLE EXCEPT AS SPECIFICALLY SET FORTH IN THE WARRANTIES
--------------------------------------------------------------------------------
CONTAINED IN THIS AGREEMENT.
------------------------------
13.5.1 Calypso's obligations under this Article 13 shall not apply to
(i) Equipment or components thereof that are normally consumed in operation, or
have a normal life inherently shorter than the Warranty Period; (ii) defects
that are the result of improper storage, installation, use, maintenance or
repair by the Customer (including without limitation, operation of the Equipment
outside the environmental parameters defined in the specifications); (iii)
improper operation of Equipment with other hardware used by Customer, including
the operation of Equipment with hardware not authorized by Calypso for use with
the Equipment, or use of the Equipment with any improperly operating equipment
not supplied by Calypso under this Agreement; (iv) Equipment or components
thereof that due to no fault of Calypso have been subjected to any other kind of
misuse or detrimental exposure or have been involved in an accident, fire,
explosion, Act of God, or any other cause not attributable to Calypso, or (v)
Equipment or Installation Services altered, repaired, improperly installed or
relocated by any party other than Calypso or Calypso's agents. For purposes of
this subsection (v), "Install" shall mean only routine plug-in.
-------
18
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
ARTICLE 14
REPRESENTATIONS AND.OTHER WARRANTIES
14.1 Each party represents and warrants that it is duly organized,
existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation and in good
standing in all jurisdictions in which the failure to so qualify would have a
materially adverse impact upon its business and assets.
14.2 Each party represents and warrants that it has the corporate power and
requisite authority to execute, deliver and perform this Agreement, and all
Purchase Orders to be executed pursuant to or in connection with this Agreement,
and that it is duly authorized to, and has taken all corporate action necessary
to authorize, the execution, delivery and performance of this Agreement and such
other agreements and documents.
14.3 Each party represents and warrants that this Agreement and the
agreements or documents stated in Section 14.2 above executed by it pursuant to
or in connection with this Agreement will constitute when executed in full the
legal, valid and binding obligations of said party, enforceable in accordance
wit their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws affecting the
enforcement of creditors rights generally and to general principles of equity.
14.4 Customer represents and warrants that it has and/or shall obtain,
prior to the shipment of the Field Trial Equipment and Software and any Purchase
Order, all Licenses required in connection with the performance of the
obligations of the parties hereunder.
14.5 Each party agrees to comply with all applicable export and import
laws and regulations of the United States of America, Costa Rica and the
People's Republic of China, including all US federal laws and regulations
relating to export or re-export of products or technology; and to indemnify each
other for any loss, liability or expense incurred as a result of breach of this
subsection 14.5. Thus, if at the time or times of Calypso's performance
hereunder, a validated export license is required for Calypso to lawfully export
or re-export the Equipment, Licensed Software, Services, or any underlying
Source Code, or technical data from the United States of America on behalf of
Calypso, then the issuance of such license to Customer shall constitute a
condition precedent to Calypso's obligations hereunder. Customer agrees that it
will not resell or re-export Calypso Equipment, Licensed Software or any
underlying Source Code or technical data in any form without obtaining
appropriate export or re-export licenses from the United States government.
19
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
ARTICLE 15
REMEDIES AND LIMITATIONS
15.1 Calypso shall have the right to suspend its performance under this
Agreement by written notice to the Customer and forthwith remove and take
possession of any portion of the Equipment that has been delivered if the
Customer, prior to payment to Calypso of the Price, shall either party become
insolvent or bankrupt, make a general assignment for the benefit of, or enter
into any arrangement with creditors, file a voluntary petition under any
bankruptcy, insolvency, or similar law, or have proceedings under any such laws
or proceedings seeking appointment of a receiver, trustee or liquidator
instituted against it which are not terminated within thirty (30) days of such
commencement.
15.2 In the event of any material breach of this Agreement by either
party which shall continue for thirty (30) or more days after written notice of
such breach (including a reasonably detailed statement of the nature of such
breach) shall have been given to the breaching party by the aggrieved party, the
aggrieved party shall be entitled at its option:
15.2.1 if the aggrieved party is the Customer, to suspend its
performance under Article 4 for so long as the breach continues uncorrected or;
15.2.2 if the aggrieved party is Calypso, to suspend performance of
all of its obligations under this Agreement for so long as the breach continues
uncorrected or;
15.2.3 to avail itself of any and all remedies available at law or
equity whether or not it elects to suspend its performance under Section 17.2.1
or 17.2.2 as applicable.
15.3 NOTWITHSTANDING THE PROVISIONS OF SECTION 11.2 OR ANY OTHER
------------------------------------------------------------------
PROVISION OF THIS AGREEMENT, CALYPSO SHALL NOT BE LIABLE FOR INCIDENTIAL,
--------------------------------------------------------------------------------
INDIRECT, CONSEQUENTIAL, OR SPECIAL DAMAGES OF ANY NATURE WHATSOEVER FOR ANY
--------------------------------------------------------------------------------
ACTION ARISING UNDER THIS AGREEMENT.
---------------------------------------
15.4 Any action for breach of this Agreement or to enforce any right
hereunder shall be commenced within two (2) years after the cause of action
accrues or it shall be deemed waived and barred (except that any action for
nonpayment may be brought at any time permitted by applicable law).
ARTICLE 16
SUPPORT AND OTHER SERVICES
16.1 Customer will purchase for Network Equipment and Software the
Basic Calypso Support Repair and Return maintenance service as identified in
Attachment 9. Customer may purchase additional maintenance and support services
------------
as defined in Attachment 9.
-------------
20
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
ARTICLE 17
COVERAGE INTERFERENCE AND THIRD PARTY FACILITIES
17.1 Calypso shall have no liability as a result of non-performance,
failure or poor performance of the Equipment, Software or System caused by,
resulting from or attributable to Customer-provided designs, specifications or
equipment configuration requirements. Calypso may rely upon and utilize any
Customer-provided designs, studies, specifications or requirements without
liability therefore.
17.2 Calypso shall not be responsible for any failures or inadequacies of
performance resulting from equipment not supplied and installed by Calypso or
Calypso's agents or subcontractors pursuant to this Agreement. Calypso shall not
be responsible for interference or disruption of service caused by operation of
other radio systems, lighting, motor ignition or other similar interference. In
the event Customer utilizes facilities or services supplied by other such as
common carrier circuits, antennas or towers, Customer shall have the total
responsibility for the availability or adequacy of such services or facilities.
ARTICLE 18
INDEMNIFICATION
18.1 Calypso will be responsible for and agree to Indemnify and hold
harmless Customer from and against all losses, liabilities, demands, claims,
actions, proceedings. suits and damages (including reasonable legal fees) for
injury to persons or damage to tangible property to the extent it results
directly from the intentional or negligent acts or omissions, or strict
liability, of Calypso, its officers, agents, employees, or contractors.
18.2 Customer will be responsible for and agrees to indemnify and bold
harmless Calypso from and against all losses, liabilities, demands, claims,
actions, proceedings, suits and damages (including reasonable legal fees) for
injury, including death, to persons or damage to tangible property to the extent
it results directly from the intentional or negligent acts or omissions, or
strict liability, of Customer, its officers, agents, employees or contractors.
18.3 With respect to each of Sections 18.1 and 18.2 above, the
indemnified party will give the indemnifying party prompt written notice of all
such claims, actions, proceedings or suits and the indemnifying party will have
the sole defense thereof; including appeals, and the sole right to settle the
same; provided, however, that the indemnifying party will not agree to any
settlement which imposes liability or obligation on the indemnified for which
the indemnified party is not fully indemnified without first obtaining the
indemnified party's consent. The indemnified party will, upon the indemnifying
party's request and at the indemnifying party's expense, furnish all relevant
information available to the indemnifying party and cooperate and assist the
indemnifying party in every reasonable way to facilitate the defense and/or
settlement of any such claim. action, proceeding or suit.
21
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
ARTICLE 19
PATENTS, COPYRIGHT AND TRADE SECRETS
19.1 Each party acknowledges the other party's ownership of trade
secrets, proprietary or confidential information including, but not limited to,
products. planned products, services or planned services, the identity of or
information concerning customers or prospective customers, data, financial
information, computer software, processes, methods, knowledge, inventions,
ideas, marketing promotions, discoveries, patents, copyrights marks and other
intellectual property rights current or planned activities, research development
or other information relating to the other party's business activities or
operations and those of its customers or subcontractors, as well as the pricing
and other terms and conditions of this Agreement (collectively, the "Proprietary
-----------
Information").
-----------
ARTICLE 20
TERMINATION
20.1 Either party may terminate this Agreement and any outstanding
Purchase Order, in whole or in part, in the event of a default by the other,
provided that the nondefaulting party so advises the defaulting party in writing
of the event of alleged default and affords the defaulting party thirty (30)
days within which to cure the default. Default is defined to include:
(a) Either party becomes insolvent, makes a general assignment for
the benefit of creditors, files a voluntary petition in bankruptcy or an
involuntary petition in bankruptcy is filed against such party which is not
dismissed within sixty (60) days after the date such petition is flied, or
suffers or permits the appointment of a receiver for its business, or its assets
become subject to any proceeding under a bankruptcy or insolvency law, domestic
or foreign. or has liquidated its business: (b) Either party's material breach
of any of the terms or conditions hereof; (c) The execution by either party of
an Assignment for the benefit of creditors or any other transfer or assignment
of similar nature; or (d) Termination by either party of the Field Trial
Equipment and Software pursuant to Section 1.1.3.
20.2 Neither the expiration of this Agreement according to its terms
nor its termination under the provisions of Section 20.1 will prejudice any clam
for any outstanding amount owed Calypso and Customer to each other, damages or
any other rights or remedies that any party may have under this Agreement or at
law or in equity or relieve any party from the duty to bold in confidence
proprietary information and otherwise comply with, and exercise the rights set
forth in the applicable Articles and Sections of this Agreement each of which
will survive such termination.
22
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
ARTICLE 21
DISPUTE RESOLUTION
21.1 In the event a dispute arises in connection with this Agreement,
the parties shall attempt in the first instance to resolve such dispute through
friendly consultation. If the dispute is not resolved through consultations
within thirty (30) days after a requesting party has served a written notice on
the other party requesting the commencement of consultations, then any party may
refer the dispute to arbitration in Stockholm, Sweden by the Arbitration
Institute of the Stockholm Chamber of Commerce in accordance with the rules of
the Arbitration Institute at the time being in force.
21.2 There shall be three (3) arbitrators, with each party appointing one
(1) arbitrator each as hereto. The third arbitrator shall be appointed by the
Arbitration Institute and shall serve as chairman of the tribunal.
21.3 The arbitration proceedings shall be conducted in English.
21.4 The arbitration award shall be final and binding on the parties.
21.5 When any dispute occurs and when any dispute is under arbitration,
except for the matters under dispute, the parties shall continue to exercise
their other respective rights and fulfill their other respective obligations
under this Agreement.
21.6 In any arbitration proceeding, any legal proceeding to enforce any
arbitration award and any other legal proceedings between the parties relating
to this Agreement, each party expressly waives the defense of sovereign immunity
and any other defense based on the fact or allegation that it is an agency or
instrumentality of a sovereign state.
21.7 Notwithstanding the foregoing, Calypso may bring a claim for
injunctive relief as provided in any court of competent jurisdiction without
first submitting the claim to arbitration in the event of Customer's breach, or
threatened breach of the provisions contained in Article 9, Article 12 or
Article 19 hereof.
ARTICLE 22
NOTICE AND REPRESENTATIVES OF THE PARTIES
Any notice ("Notice") required or permitted under this Agreement must be
------
given in writing to the address or facsimile number provided for a party below
(or such other address or number as any party may provide to the other in
writing in the manner contemplated hereby) and will be deemed effective as
follows:
(a) if delivered in person or by courier, on the date it is
delivered;
23
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
(b) if sent by facsimile transmission, on the date that the
transmission is received by the recipient party in legible form;
(c) if sent by certified or registered mail or the equivalent
(return receipt requested), on the date that mail is delivered or its delivery
is attempted but acceptance is refused; unless the date and time of any delivery
or receipt, as applicable, is not during normal working hours on a local
business day, in which case Notice will be deemed given and effective on the
first following day that is a local business day. For purposes hereof, a "local
business day" is a business day in the city specified in the address for notice
provided by the recipient. The Notices provided for by this Article 22 will be
given to the following:
If to Customer:
China Telecom Changzhou Telecommunication Bureau
(China Telecom)
No. 168 Xx Xxxx South Road Changzhou,
P.C: 213003, P.R. of China
ATTN:
Vice Director
If to Calypso:
Industrias de Telecomunicaciones Americanas, ATEL S.A.
Care of
Calypso Wireless, Inc.
0000 X. X. 000 Xx., Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx, XXX 00000
ATTN:
President
24
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
ARTICLE 23
MISCELLANEOUS
23.1 Assignment. Neither party to this Agreement may assign, transfer,
----------
pledge, encumber or hypothecate its interest in this Agreement or any of its
rights hereunder or delegate its obligations hereunder without the prior written
consent of the other party to this Agreement, which consent will not be
unreasonably withheld, and any attempted assignment which does not comply fully
with this Article 23.1 will be null anti void. Notwithstanding the foregoing,
Calypso, may, upon prompt written notice, assign its rights and obligations
pursuant to this Agreement to any Affiliate or to its successors by
consolidation or merger, or the transferee of substantially all of the assets of
Calypso.
23.2 Governing Law. This Agreement will be construed in accordance with
-------------
and governed by the law of the State of Florida without regard to the conflict
of law provisions of such state or any other jurisdiction.
23.3 Laws and Regulations. The parties hereby agree to comply with all
---------------------
local, municipal, provincial, central, foreign, governmental and regulatory
laws, orders, codes, rules and regulations that are applicable to their
respective performance of this Agreement including, without limitation, those
issued by government agencies of the People's Republic of China with authority
over the subject-matter of this Agreement.
23.4 Amendment. Any provision of this Agreement, or any attachment,
---------
exhibit or rider hereto, way be amended only if such amendment is in writing and
signed by all the parties hereto. Additions to the Calypso Equipment and
modifications to Prices may be made by Calypso, from time to time, in additional
Attachment 6 containing the following information: Calypso Equipment, Equipment
-------------
Description, and Price.
23.5 Waiver. Any waiver or delay in the exercise by either party of any
------
of its rights under this Agreement will not be deemed to prejudice such party's
right of termination or enforcement for any further, continuing or other breach
by the other party.
23.6 Successors and Assigns. The provisions of this Agreement will be
-----------------------
binding upon and inure to the benefit of the parties hereto and their respective
permitted successors end permitted assigns.
23.7 Public Disclosures. Neither party will issue or release for
-------------------
publication any materials relating to the existence of this agreement, the
products or any services to be performed pursuant to this agreement without the
prior written consent of the other party, which consent will not be
unreasonably-withheld provide such publications are for internal use or use by a
financial institution in connection with funding required under this agreement.
25
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
23.8 Severability. Whenever possible, each provision of this Agreement,
------------
as well as any attachment, exhibit or rider attached hereto, will be interpreted
in such mariner as to be effective and valid under applicable law, order, code,
rule or regulation but if any provision of this Agreement, as well as any
attachment, exhibit or rider hereto, is held to be invalid, illegal or
unenforceable in any respect under any applicable law, order, code, rule or
regulation, such Invalidity, illegality or unenforceability will not affect any
other provision, attachment, exhibit or rider of this Agreement, but this
Agreement, attachment, exhibit or rider will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision,
attachment, exhibit or rider had never been contained herein or attached hereto.
23.9 Descriptive Headings. The descriptive headings of this Agreement
---------------------
are inserted for convenience only and do not constitute a part of this
Agreement.
23.10 Counterparts. This Agreement may be executed in separate
------------
counterparts each of which will be an original and all of which taken together
will constitute one and the same Agreement.
23.11 Relationship of Parties. Neither Calypso, its subcontractors,
-------------------------
employees or agents will be deemed to be employees or agents of Customer, it
being understood that Calypso, its subcontractors, employees or agents are
independent contractors with respect to Customer for all purposes and at all
tunes.
23.12 Trademark. Nothing contained in this Agreement shall be construed
---------
as conferring any right to use in advertising, publicity or marketing activities
any name, trademark or other designation of a party hereto, including any
contraction, abbreviation or simulation of any of the foregoing.
ARTICLE 24
INCORPORATION OF DOCUMENTS
This Agreement hereby incorporates by reference the Attachments referred to
herein. In the event of an inconsistency or conflict between or among the
provisions of this Agreement, the inconsistency will be resolved by giving
precedence in the following order:
(1) Agreement;
(2) Attachments; and
(3) Purchase Orders (excluding any preprinted terms and conditions).
26
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
ARTICLE 25
DEFINITIONS
"Acceptance Test" means the tests performed by Customer for the System to
----------------
confirm that the Equipment and Software perform in accordance with the Product
Specifications (as defined below).
"Affiliate" means, with respect to any person, any other person which
---------
controls, is controlled by, or under common control with, such entity; and
"control" means the ownership of a majority of the voting equity of a person or
the power to direct the management or policies of such person whether through
ownership of securities, by contract or otherwise.
"Change Notification" is defined in Section 11.2.
--------------------
"Class A Change" means a modification of existing Calypso manufactured
----------------
Equipment to remedy a non-conformance to Technical Requirements required to
correct design defects of a type that results in electrical or mechanical
inoperative conditions or unsatisfactory operating conditions, or which is
recommended to enhance safety.
"Class B Change" means an optional change, available to Customer at an
----------------
additional cost, that provides Equipment enhancements resulting in new features
or improved service capabilities to Calypso Equipment.
"Designated Equipment" is defined in Article 11.
---------------------
"Documentation" with respect to any Equipment or Software means Calypso's
-------------
technical documentation end operating manuals for such Product.
"Effective Date" is defined in the Preamble.
---------------
"Equipment" or "Calypso Equipment" means the equipment and wireless pagers
--------- -----------------
and handsets that may be purchased from Calypso pursuant to this Agreement.
"Initial Term" is defined in Article 3.
-------------
"Installation Site" means any customer locations where Calypso Network
------------------
Equipment or Software is to be installed.
"Licensed Software" means the Calypso software and third party software (as
-----------------
defined below), each of which in machine-readable form, and subsequent Software
upgrades, necessary to install, operate, and maintain the Equipment purchased or
licensed by Customer pursuant to this Agreement.
"Maintenance and Support Services" is defined in Article 18.
-----------------------------------
27
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
"Network Element" means a material component of Calypso's
----------------
telecommunications soft-switch system including, but not limited to, base
station controllers, DSLAM's, Routers, Gateways, transmitters, local
transceivers and handsets.
"Product Life" for each Equipment is as set forth in Attachment 8.
------------- ------------
"Proprietary Information" is defined in Section 12.1.
------------------------
"Purchase Order" means the purchasing document issued by Customer, subject
---------------
to the terms and conditions of this Agreement, and which describes the specific
Equipment and Software and specifies the scope of work, quantities and dates for
delivery, prices, billing instructions, arid any other necessary information.
"Rolling Forecast" is defined in Section 2.3.
-----------------
"Services" means the services provided by Calypso to Customer as specified
--------
in a Purchase Order to the extent such Services are not included in the supply
of other Equipment and Software.
"Software" refers to all the Calypso object-code computer programs,
--------
computer languages, and operations licensed to Customer by Calypso pursuant to
the terms of this Agreement and used solely in conjunction with the System and
the Equipment to perform a useful function or used to enable human access to the
Equipment for the purposes of installing, operating, or maintaining such
Equipment.
"Source Code" means all intellectual information including but not limited
------------
to Documentation, Software in human-readable form, flow charts, schematics and
annotations which comprise the pre-coding detailed design specifications for
Licensed Software (excluding Third Party Software).
"System" means a configuration of Equipment with connection to a broadband
------
internet networks and mobile networks, including gateways, routers,
soft-switches and multiplexers with at least two (2) end terminals, any
intermediate line amplifiers connected by fiber to the end terminals, all
associated Software, which has the ability to communicate to an element
management system such that traffic can be transmitted from end terminal to end
terminal and operation can be monitored by the element management system
"Technical Requirements" means the specifications set forth in appropriate
-----------------------
industry standard telecommunications technical requirements where applicable or
as such specifications may be most currently modified or amended pursuant to
mutual agreement of the parties.
"Third Party Software" means Software which is independently developed by a
--------------------
third party sub-licensed to Customer under this Agreement or otherwise provided
with the Equipment hereunder.
28
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
"Field Trial" is defined in Article 1.
------------
"Field Trial Test Criteria" is defined in Article 1.
----------------------------
"Warrant, Period" means the period set forth in Attachment 11 attached
---------------- -------------
hereto.
ARTICLE 26
ENTIRE AGREEMENT
This Agreement together with all Exhibits and Attachments constitutes the
entire Agreement between Customer and Calypso with respect to the subject matter
hereof and supersedes all prior agreements and understandings, both written and
oral, between the parties with respect to such subject matter, and is not
intended to confer upon any person other than the parties hereto any tights or
remedies hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
Industrias de Telecomunicaciones China Telecom Changzhou
Americanas, ATEL, SA. Telecommunication Bureau
(Sub of Calypso Wireless, Inc.) (China Telecom)
By:
------------------------------- -----------------------------
Name: Name:
Title: Chief Operations Officer Title: Vice Director
29
/s/ J.S.A. /s/ J.Z.M.
------ ------
Atel S.A.
