1
EXHIBIT 10.9
EXECUTION COPY
TECHNICAL SERVICES AGREEMENT
DATED
SEPTEMBER 27, 1999
BETWEEN
VELOCOM INC.
AND
FORMUS COMMUNICATIONS, INC.
2
TABLE OF CONTENTS
1. DEFINITIONS 4
2. SUPPLY OF SERVICES 7
2.1 SUPPLY OF SERVICES AND CONSULTANTS 7
2.2 RFS 7
2.3 FORMUS PROPOSAL 7
2.4 RFS ORDER 7
2.5 SUPPLY OF CONSULTANTS 8
2.6 CANCELLATION OF AN RFS ORDER 8
2.7 QUALIFICATIONS OF CONSULTANTS 8
2.8 INDEPENDENT CONTRACTOR RELATIONSHIP 8
2.9 RECALL 8
2.10 COSTS TO DATE OF RECALL 8
2.11 DELIVERABLES 9
3. COSTS 9
3.1 COSTS 9
3.2 EXAMINATION OF COSTS BY VELOCOM 9
3.3 RETAINER 9
4. TAXES 10
4.1 RESPONSIBILITY 10
5. PAYMENT TERMS 10
5.1 INVOICES 10
5.2 PAYMENT 10
6. DELIVERABLES 10
6.1 OWNERSHIP 10
7. CONFIDENTIAL INFORMATION 10
7.1 CONFIDENTIALITY OBLIGATION 10
7.2 USE OF CONFIDENTIAL INFORMATION 11
7.3 NON-CONFIDENTIAL INFORMATION 11
7.4 COMPELLED DISCLOSURE 11
7.5 RETURN OF INFORMATION 12
8. LIABILITY 12
8.1 DEGREE OF CARE 12
8.2 INDEMNIFICATION 12
8.3 DIRECT DAMAGES 12
9. TRAINING 12
10. FORCE MAJEURE 13
10.1 NO DEFAULT OR LIABILITY 13
10.2 NOTICE 13
2
3
11. TERM AND TERMINATION 14
11.1 TERM 14
11.2 TERMINATION BY FORMUS 14
11.3 TERMINATION BY VELOCOM 15
11.4 COSTS INCURRED PRIOR TO TERMINATION 16
11.5 TERMINATION WITHOUT PREJUDICE TO OTHER RIGHTS 16
11.6 NO RELEASE OF LIABILITY 16
12. ASSIGNMENT 16
13. WAIVER 16
13.1 WAIVER 16
14. NOTICES 17
15. GOVERNING LAW 17
16. DISPUTE RESOLUTION 18
16.1 PROCEDURE 18
16.2 ARBITRATION 18
17. ENTIRE AGREEMENT: AMENDMENTS 20
18. SEVERABILITY 21
19. RELATIONSHIP OF THE PARTIES 21
20. RIGHTS AND REMEDIES 21
21. COUNTERPARTS; FACSIMILE 21
22. FURTHER ASSURANCES 21
23. EXPENSES 21
24. THIRD-PARTY BENEFICIARIES 21
25. NON-SOLICITATION 22
3
4
TECHNICAL SERVICES AGREEMENT dated as of September 27, 1999 between VeloCom
Inc., a Delaware corporation ("VELOCOM") and Formus Communications, Inc., a
Delaware corporation ("FORMUS") (each a "PARTY" and collectively, the
"PARTIES").
RECITALS
WHEREAS, VeloCom is acquiring certain assets of Formus and will be pursuing
additional LMDS (as defined below) and BWA (as defined below) in Latin America;
WHEREAS, Formus possesses certain technical experience, Know-How and knowledge
relating to the acquisition of LMDS and BWA spectrum and the construction,
deployment and operation of LMDS and BWA networks; and
WHEREAS, the Parties wish to enter into this Agreement to enable VeloCom and its
subsidiaries to receive the technical assistance and support of Formus.
NOW, THEREFORE, the Parties hereto agree as follows:
AGREEMENTS
1. DEFINITIONS
In this Agreement, unless the context otherwise requires, the following terms
shall have the meaning set forth below:
"AFFECTED PARTY" has the meaning ascribed thereto in Section
10.2
"AGREEMENT" This Agreement, together with the Annexes and
Schedules attached hereto, as amended from
time to time;
"BUSINESS DAY" Any day on which banks in Denver, Colorado
are authorized or required by law to be open
to transact business;
"BWA" means broadband wireless access;
4
5
"CONFIDENTIAL Any information, material or data of a
INFORMATION" confidential nature furnished orally, in any
written, graphic, electronic, magnetic or
other tangible form including (but not
limited to) technical, financial and business
information and models, names of customers or
partners (whether potential or existing),
proposed business deals, corporate
strategies, reports, plans, market and/or
financial projections and other data, of or
relating to a Party as well as any
information derived from such information,
material and data, other than the information
listed in Section 7.4;
"CONSULTANT(S)" Person provided by Formus to render Services
to VeloCom under this Agreement;
"COSTS" has the meaning ascribed thereto in Section
3.1;
"DELIVERABLES" Any written summary of results or
recommendations or any other data or data
files, information or materials whether in
written, electronic or magnetic form,
provided to VeloCom pursuant to the Services
(as defined below) performed under this
Agreement;.
"FORCE MAJEURE" has the meaning ascribed thereto in Section
10.1;
"FORMUS" has the meaning ascribed thereto in the
introductory paragraph;
"INDEMNIFIED PERSON" has the meaning ascribed thereto in Section
8.2;
"KNOW-HOW" means all technical knowledge, information
and expertise of Formus in respect of LMDS
and BWA planning, design, site
identification, operation and maintenance of
LMDS and BWA operations, networks and
services, including but not limited to,
processes, techniques, methods, products,
data and compositions;
"LOSSES" has the meaning ascribed thereto in Section
8.2;
"LMDS" means local multipoint distribution systems
"PARTY(IES)" has the meaning ascribed thereto in the
introductory paragraph;
5
6
"PERSON(S)" includes, without limitation, any individual,
firm, company, association, partnership,
joint venture, trust, investment company,
pension fund or investment fund, or other
entity, or any government or any ministry,
department or agency thereof;
"PURCHASE AGREEMENT" means the Purchase Agreement between Formus,
Formus International, Inc. and VeloCom dated
as of August 20, 1999;
"RECEIVING PARTY" has the meaning ascribed thereto in Section
7.1;
"RFS" HAS THE meaning ascribed thereto in Section 2.2;
"RFS ORDER" has the meaning ascribed thereto in Section
2.4;
"RULES" has the meaning ascribed thereto in Section
16.1(b);
"SERVICES" means such services to be provided by Formus
to VeloCom and its subsidiaries through the
Consultants including but not limited to
those set forth on Annex I and (i) network
planning and design: (ii) strategic and
business planning; (iii) review of spectrum
requirements; (iv) consulting assistance in
procurement and selection of system hardware;
(v) site identification; (vi) regulatory
matters; and (vii) technology review;
"TERM" has the meaning ascribed thereto in Section
11.1; and
"VELOCOM" has the meaning ascribed thereto in the
introductory paragraph.
The singular includes the plural and vice versa. Reference to one gender
includes reference to the other gender.
References herein to Sections and Schedules shall be taken as referring to
Sections and Schedules to this Agreement. Headings to Sections are for ease of
reference only and shall not affect the construction or interpretation of this
Agreement.
6
7
2. SUPPLY OF SERVICES
2.1 SUPPLY OF SERVICES AND CONSULTANTS
Subject to the terms and conditions of this Agreement, Formus shall
provide from time to time Services and Consultants as shall be
reasonably requested by VeloCom in accordance with Section 2.2.
2.2 RFS
To request Services and Consultants under this Agreement, VeloCom shall
submit a request for services (an "RFS") substantially in the form of
Schedule A, specifying the Services required, estimating the number of
Consultants needed to perform such Services and including such other
information as set out in Schedule A, such request to be submitted by
VeloCom fifteen (15) days in advance of the date that such Services
will be required from Formus. Formus agrees to use reasonable efforts
to meet any reasonable RFS submitted by VeloCom; provided, however,
Formus shall not be required to hire additional employees to perform
the Services.
2.3 FORMUS PROPOSAL
As soon as reasonably possible from the receipt by Formus of the RFS
but in no event later than ten (10) days from such receipt, Formus
shall provide VeloCom with a proposal to supply the Consultants
required to perform the requested Services, along with an estimate of:
(i) the costs of supplying such Consultants; and (ii) the timeline for
providing such Consultants.
2.4 RFS Order
The Parties shall jointly determine and agree upon: (i) the name of
each Consultant to be provided by Formus to VeloCom which, unless
otherwise agreed by VeloCom shall be limited to the following
individuals, so long as they remain employees of Formus: (i) Xxxxxx
Xxxxx, (ii) Xxxx Globushutz, (iii) Xxxx Xxxxxx, (iv) Xxx Xxxxxxxxx and
(v) Xxxxx X'Xxxx; (ii) the costs associated with each Consultant in
accordance with Schedule B; (iii) the date of commencement of Services
by each Consultant; (iv) the duration of the Services to be provided by
such Consultant; (v) the location(s) in which the Services are to be
performed by such Consultant; and (vi) any other terms and conditions
relating to the Services and Consultants as agreed to by the Parties.
The above agreement shall be evidenced in an RFS order ("RFS ORDER")
substantially in the form of Schedule C. In the event that individuals
set forth above are no longer employed by Formus, Formus shall use its
reasonable efforts to make comparable Formus personnel available to
VeloCom in connection with the provision of the Services.
7
8
2.5 SUPPLY OF CONSULTANTS
Formus shall supply each Consultant in accordance with the relevant RFS
Order. In the event a Consultant is unable to commence providing
Services to VeloCom substantially in accordance with the time schedule
set out in the relevant RFS Order, VeloCom shall have the option to
cancel, at no cost, such RFS Order and Formus shall pay to VeloCom any
direct costs incurred by VeloCom as a direct result of Formus' failure
to provide the Consultant pursuant to the material terms and conditions
of the RFS Order.
2.6 CANCELLATION OF AN RFS ORDER
VeloCom shall have the right, upon seven (7) days' written notice to
Formus, to cancel any RFS Order (whether or not the Consultant has
actually commenced providing Services) in which case, VeloCom shall pay
for: (i) the Costs, if any, associated with the Services actually
performed by Formus up to the date of cancellation; and (ii) any other
direct costs incurred by Formus as a direct result of the cancellation
of the RFS Order by VeloCom including any demobilization costs.
2.7 QUALIFICATIONS OF CONSULTANTS
All Consultants supplied by Formus shall be qualified and shall have
substantial experience performing the tasks (or substantially similar
tasks) for which such Consultants would be engaged by Formus for
VeloCom.
2.8 INDEPENDENT CONTRACTOR RELATIONSHIP
In the performance of its duties and responsibilities under this
Agreement, Formus and the Consultants shall be and shall act solely as
independent contractors, and nothing contained in this Agreement or in
the relationship of Formus and VeloCom shall constitute or be construed
to be or to create a partnership or joint venture between Formus and
VeloCom.
2.9 RECALL
VeloCom may, upon 7 days notice to Formus, require Formus to recall any
Consultant if the Consultant does not adequately perform his or her
duties or if VeloCom, in its reasonable discretion, believes that such
Consultant has conducted himself or herself in a manner which is
contrary to or otherwise consistent with the duties of Formus to
VeloCom and its subsidiaries under this Agreement.
2.10 COSTS TO DATE OF RECALL
Costs accrued to the date of recall shall be payable in accordance with
Section 3.1 and Costs accrued after such date shall be paid for by
Formus except for any agreed
8
9
upon portion of the Consultant's reasonable de-mobilization costs
assumed by VeloCom.
2.11 DELIVERABLES
The Deliverables developed by the Consultants for VeloCom shall be
memorialized in written, graphic, electronic, magnetic or other
tangible form to allow VeloCom to use the Deliverables after the
departure of the Consultants, such use to be subject to the rights of
any Party other than Formus in any Deliverable or software which
supports any Deliverable with respect to which VeloCom may need to
acquire a license and Formus undertakes to cooperate with VeloCom with
respect to such acquisition (including the acquisition of software
pursuant to the foregoing paragraph). Costs spent preparing and
memorializing Deliverables shall be paid as set forth in Section 3.
3. COSTS
3.1 COSTS
VeloCom shall pay to Formus such amount as is equivalent to the
reasonable and documented costs ("Invoiced Costs") agreed to in each
RFS Order of providing the Services and Consultants to VeloCom (as
detailed on Schedule B hereto) plus overhead recovery costs of fifteen
per cent (15%) of such Invoiced Costs (collectively, the "COSTS"). The
parties acknowledge that no overhead recovery costs shall be applied to
any travel and entertainment expenditures but only to direct salary
costs and related employee benefits.
3.2 EXAMINATION OF COSTS BY VELOCOM
VeloCom shall have the right at reasonable times on reasonable notice
during usual business hours, and at its sole cost and expense (except
that if discrepancies are found in any such audit that exceed 10% of
the total amount of Costs reimbursed during the period subject to such
audit, all costs and expenses of such audit shall be borne by Formus),
to audit, examine and make copies and extracts from the books and
records of Formus relating to all Costs for which reimbursement is
sought under this Agreement. Such right may be exercised by VeloCom
though any agent, employee or independent auditor designated by
VeloCom. Such information shall be treated as confidential in
accordance with the provisions of Section 7.
3.3 RETAINER
In consideration for the execution and performance by Formus of this
Agreement and the provision of Services hereunder, VeloCom shall pay to
Formus a monthly retainer of $20,000 (the "Retainer") by check or wire
to a bank account designated in writing by Formus. The daily rate of
any Consultants, but not expenses incurred by such Consultants, due
Formus under this Agreement may be applied against the Retainer. In the
event of a termination of this Agreement by Formus pursuant to
9
10
Section 11.2 of this Agreement, or by VeloCom pursuant to Section
11.3(f) of this Agreement, Formus may, after crediting amounts due and
payable as provided in this Section 3.3, retain the balance of the
Retainer.
4. TAXES
4.1 RESPONSIBILITY
Formus shall be solely responsible for all present or future taxes,
levies, imposts, deductions, charges or withholdings, arising out of,
or in connection with payments received by it pursuant to this
Agreement.
5. PAYMENT TERMS
5.1 INVOICES
Formus shall submit to VeloCom on a monthly basis invoices for the
Costs in U.S. dollars. Such invoices shall describe the Services
provided and Costs incurred with supporting documentation as reasonably
requested by VeloCom to comply with accounting procedures and other
requirements of VeloCom as well as the place and manner of payment.
5.2 PAYMENT
Unless disputed by VeloCom in good faith, all Costs payable under this
Agreement, shall be paid within thirty (30) days of the date of receipt
of the invoice. Payment shall be made to Formus by check or by wire
transfer to a bank account in the United States as directed in writing
by Formus.
6. DELIVERABLES
6.1 OWNERSHIP
VeloCom shall own all right, title and interest in and to any
Deliverable prepared by any Consultant and furnished to VeloCom in
connection with the provision of Services; provided, however, that
VeloCom shall not use such Deliverables in Europe for a period of three
(3) years from the date of termination of this Agreement.
7. CONFIDENTIAL INFORMATION
7.1 CONFIDENTIALITY OBLIGATION
Each Party (the "RECEIVING PARTY") shall for two (2) years from the
date of receipt of Confidential Information from the disclosing Party,
retain in confidence all such Confidential Information disclosed
pursuant to activities carried on in providing the Services under this
Agreement and shall treat such Confidential Information with
10
11
the same degree of care as it employs for the protection of its own
Confidential Information (and in any event, with reasonable care) and
shall not use such Confidential Information in Europe.
7.2 USE OF CONFIDENTIAL INFORMATION
The Receiving Party shall not, nor shall it permit any of its
employees, representatives or agents to, without the written consent of
the other Party, use any Confidential Information of the other Party
for any purpose other than the provision or receipt of Services
hereunder, or disclose any Confidential Information of the other Party
to any third party, except to its employees, representatives or agents
with a need to know for purposes of this Agreement or for the conduct
of each Party's business, and after such employees, representatives or
agents have been directed by the Receiving Party to treat such
Confidential Information in accordance with the terms of this Section 7
and provided further that no Party shall use any such Confidential
Information to the detriment of the other Party.
7.3 NON-CONFIDENTIAL INFORMATION
Confidential Information shall not include any information that:
a) is or comes into the public domain other than as a result
of a disclosure directly or indirectly by the Receiving
Party in breach of this Agreement;
b) the Receiving Party can demonstrate was known to it prior
to the disclosure thereof by the disclosing Party;
c) is or becomes generally available to such Receiving Party
on a non-confidential basis from a source other than the
disclosing Party, provided that such source is not known by
such Receiving Party to be bound by any confidentiality
obligation with respect to such information;
7.4 COMPELLED DISCLOSURE
This Section 7 shall not restrict the disclosure of any Confidential
Information by either Party as required by law, the rules or orders of
any recognized securities exchange, any court of competent
jurisdiction, any governmental or regulatory authority, including any
taxation authority or broadcasting or telecommunications or securities
regulatory authority, but only after written notice of such disclosure
requirement has been given, to the extent practicable, by such Party to
the disclosing Party, (it being understood and agreed that only one
such notice shall be required in respect of continuous disclosure
requirements).
11
12
7.5 RETURN OF INFORMATION
Upon termination of this Agreement, each Party shall return all such
Confidential Information to the other Party. Notwithstanding
termination of this Agreement, the confidentiality obligations of the
Parties pursuant to this Section 7 shall continue for two (2) years
after the disclosure of Confidential Information.
8. LIABILITY
8.1 DEGREE OF CARE
Formus shall provide, and shall cause the Consultants to provide, all
Services with reasonable care and skill and such Services shall be of a
standard comparable to providers of similar types of services in the
telecommunications industry.
8.2 INDEMNIFICATION
Each Party shall indemnify and hold harmless the other Party and its
respective directors, officers, shareholders, employees and agents
(each an "INDEMNIFIED PERSON") against any claims, actions,
proceedings, costs, charges, losses, damages, demands, liabilities and
reasonable expenses (collectively "LOSSES") which may be brought by
third parties against, suffered or incurred by any of such Indemnified
Persons arising from or related to the performance of this Agreement or
the Consultant's obligations or duties under or pursuant to the terms
of this Agreement (including, without limitation, all reasonable legal
and professional fees and other expenses incurred by such Indemnified
Person in the defense of any claim, action or proceeding) except claims
arising from gross negligence, bad faith, fraud, intentional misconduct
or willful default in the performance or non-performance by Formus or
VeloCom of its obligations or duties under or pursuant to the terms of
this Agreement.
8.3 DIRECT DAMAGES
Each Party shall be liable hereunder only for direct Losses (caused by
gross negligence or willful misconduct only) incurred by the other and
in no event shall either Party be liable for any consequential or
indirect Losses for any breach of this Agreement.
9. TRAINING
Formus agrees that, upon the reasonable request of VeloCom, it shall
make available to VeloCom training manuals and educational seminars
with respect to the matters that are the subject of this Agreement and
such other matters relating to LMDS and BWA technology deployments
requested by VeloCom. VeloCom shall be responsible for the Costs of
such training and seminars. The Parties shall agree
12
13
on the timing and budget for any such training to be made available by
Formus to VeloCom. Costs for such training shall be paid as set forth
in Section 3.
10. FORCE MAJEURE
10.1 NO DEFAULT OR LIABILITY
Neither Party shall be in default or liable for any Loss resulting from
delays in performance or from failure to perform or comply with terms
of this Agreement due to any event, which event is beyond its
reasonable control, was not caused by it and, which despite such
Party's reasonable efforts, will result in a delay in the performance
or compliance with any material term of this Agreement ("FORCE
MAJEURE"), including but not limited to:
a) unusually severe weather, including lightning, storms,
earthquakes, landslides, floods, washouts, volcanic
eruptions and other acts of God;
b) fires, explosion and destruction, whether accidentally or
intentionally caused and whether partial or complete, lack
or failure of transportation facilities, epidemic,
quarantine, labor disputes;
c) war, declared or undeclared, revolution, civil commotion,
acts of public enemies, blockades, embargo, acts of civil
disobedience, acts of civil or military authorities, acts
stemming from governmental bodies, including courts and
regulatory bodies; and
d) acts of government, including the imposition or exchange
controls or currency restrictions;
provided that the Party affected by such event has exercised reasonable
measures, if feasible, to mitigate such delays or Losses.
10.2 NOTICE
The Party affected by such event (the "AFFECTED PARTY") shall within
five (5) Business Days of the onset of Force Majeure notify the other
Party setting out in reasonable details the nature of such event of
Force Majeure and its effect upon the obligations of the Affected
Party, a detailed description, if applicable, of work-around plans,
alternative sources or any other means such Party will or proposes to
utilize to make up for any such period of delay and to prevent any
further delay. Thereupon, the obligations of the Affected Party shall
be suspended during, but no longer than the continuance of the event of
Force Majeure, and the time for performance of any obligation hereunder
shall be extended by the actual time of delay caused by such event;
provided, however, that unless an Affected Party shall notify the other
Party within the period (except if such period cannot be met because of
the event of Force Majeure) and in the manner stated in this Section
10.2, such Party shall not be entitled to and shall not claim an
extension of time for
13
14
that event of Force Majeure, and shall not by reason of any delay
arising from such event of Force Majeure, be relieved in any way, or to
any extent, from its obligations to proceed with, execute and complete
its performance of, and compliance with, the terms of this Agreement.
11. TERM AND TERMINATION
11.1 TERM
This Agreement shall have a term (the "TERM") of three (3) years from
the date hereof, unless otherwise mutually agreed, and may thereafter
be extended by mutual agreement of the Parties.
11.2 TERMINATION BY FORMUS
Formus may, at its option, terminate this Agreement by giving written
notice to VeloCom in any of the following events:
a) a material breach by VeloCom of any material obligations
contained in this Agreement which has not been cured within
thirty (30) Business Days after written notice thereof to
VeloCom specifying the breach and requiring such remedy;
b) the insolvency or bankruptcy of VeloCom or the making of an
assignment for the benefit of creditors, or the appointment
of a trustee or receiver and manager or liquidator for
VeloCom or for all or a substantial part of its property,
or the commencement of a bankruptcy, reorganization,
arrangement, insolvency or similar proceedings by or
against VeloCom under the laws of any jurisdiction;
c) VeloCom has made or will make any payments, loans or gifts
of any money or anything of value, or has authorized,
offered or promised to do any of the foregoing, directly or
indirectly to or for the use or benefit of: (i) any
official or employee of a foreign government or any
department agency or instrumentality thereof; (ii) any
political party or official or candidate thereof; or (iii)
to any other Person either for an advance or reimbursement
knowing or having reason to believe that any part of such
payment, loan or gift will be directly or indirectly given
or paid by such other Person to an individual mentioned in
(i) or (ii); or
d) VeloCom has not used Services having a monthly Cost equal
to the Retainer for four (4) consecutive months.
14
15
11.3 TERMINATION BY VELOCOM
VeloCom may at its option, terminate this Agreement, by giving written
notice to Formus in any of the following events, namely:
a) a material breach by Formus of any material obligations
contained in this Agreement which has not been cured within
thirty (30) Business Days after written notice thereof by
Formus specifying the breach and requiring such remedy;
b) the insolvency or bankruptcy of Formus or the making of an
assignment for the benefit of creditors, or the appointment
of a trustee or receiver and manager or liquidator for
Formus or for all or a substantial part of its property, or
the commencement of a bankruptcy, reorganization,
arrangement, insolvency or similar proceedings by or
against Formus under the laws of any jurisdiction;
c) Formus violates the noncompetition clause contained in the
Purchase Agreement or competes with VeloCom in Latin
America in the manner prohibited by such noncompetition
clause at any time after the expiration of the
noncompetition period contained in the Purchase Agreement;
d) Formus has made or will make any payments, loans or gifts
of any money or anything of value, or has authorized,
offered or promised to do any of the foregoing, directly or
indirectly to or for the use or benefit of: (i) any
official or employee of any foreign government or any
department agency or instrumentality thereof; (ii) any
political party or official or candidate thereof; or (iii)
to any other Person either for an advance or reimbursement
knowing or having reason to believe that any part of such
payment, loan or gift will be directly or indirectly given
or paid by such other Person to an individual mentioned in
(i) or (ii);
e) Formus' consistent failure to provide Consultants to
VeloCom in accordance with the terms and conditions of duly
executed RFS Orders due to circumstances and/or events that
are within Formus' control;
f) after the sixth month anniversary of the date of this
Agreement, by providing at least one hundred and eighty
(180) days' prior written notice to Formus that it no
longer requires the Services hereunder; or
g) by providing at least thirty (30) days written notice if
two (2) or more of the named individuals listed in Section
2.4 are no longer employees of Formus.
15
16
11.4 COSTS INCURRED PRIOR TO TERMINATION
Notwithstanding any termination of this Agreement, VeloCom's obligation
to pay the Costs incurred to the date of termination shall survive the
termination of this Agreement with respect to VeloCom's obligations and
responsibilities hereunder incurred prior to the date of termination.
11.5 TERMINATION WITHOUT PREJUDICE TO OTHER RIGHTS
The termination of this Agreement regardless of its cause or its nature
shall be without prejudice to any other rights or remedies of either
Party without liability to the other Party (except as provided in this
Agreement) for any Loss occasioned thereby, and each Party shall remain
responsible for its obligations existing immediately prior to the
termination.
11.6 NO RELEASE OF LIABILITY
The termination of this Agreement for any cause shall not release
either Party hereto from any liability which at the time of termination
has already accrued to the other Party hereto or which thereafter may
accrue in respect of any act or omission prior to termination or from
any obligation which is expressly stated herein to survive termination.
12. ASSIGNMENT
No Party may assign its rights and obligations under this Agreement, in
whole or in part, except with the prior written consent of the other
Party.
13. WAIVER
13.1 WAIVER
a) Except as otherwise expressly provided in this Agreement,
no failure or delay by any Party in exercising any right,
power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise by
such Party of any right, power or privilege preclude any
further exercise thereof or the exercise of any other
right, power or privilege.
b) Except as otherwise expressly provided in this Agreement,
no waiver of any right hereunder or of any breach or
failure to perform shall be effective unless executed in
writing.
c) The waiver of any right hereunder or of any failure to
perform or breach hereof shall not constitute or be deemed
as a waiver of any other right hereunder or of any other
failure to perform or other breach hereof, whether of a
similar or dissimilar nature thereto.
16
17
14. NOTICES
Any notice or communication which shall be given under this Agreement
shall be made in writing in the English language, and given by
telecopier, with an original sent by courier, addressed to a Party at
its telecopier number and address set forth below, or such other
telecopier number and/or address for such Party as shall have been
communicated by it to the other Party in accordance with this Section
14. Any notice or other communication shall be deemed to have been
received on the date of transmission but only if a confirmation of the
receipt by the recipient of the telecopier appears correctly at the end
of the sender's telecopy.
If to FORMUS:
Formus Communications, Inc.
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 000 Xxxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
with copies to:
Holme Xxxxxxx & Xxxx LLP
1700 Lincoln, Suite 4200
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: W. Xxxx Xxxxxx, Esq.
If to VELOCOM:
VeloCom Inc.
0000 Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Vice President, Strategic and Legal Affairs
15. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the State of Colorado without giving effect to its rules regarding conflict of
law.
17
18
16. DISPUTE RESOLUTION
16.1 PROCEDURE
In the event of a dispute between VeloCom and Formus arising under or
in connection with this Agreement, including a dispute over whether
there has been a material breach to this Agreement, the following shall
apply:
a) They shall use their good faith efforts to settle such
dispute. To this end, each Party may notify the other Party
in writing of its desire to initiate the procedure
contemplated by this Section 16, whereupon the Parties
shall forthwith convene to attempt to resolve such disputes
through amicable and good faith discussions. Disputes which
the Parties are unable to resolve through such discussions
within thirty (30) days following receipt of the notice
referred to in this Section 16.1(a), shall upon the request
of either Party, be submitted to a panel consisting of
designees from the chief executive officers of VeloCom and
Formus. The designees shall consult and negotiate with each
other in good faith in an effort to reach a just and
equitable solution.
b) If the designees do not reach a solution within a period of
thirty (30) days following the beginning of their
consultations and negotiations, any Party may treat the
same as an arbitrable dispute by giving notice to the other
Party, in which case the dispute shall be submitted to a
final and binding arbitration under the Rules of
Conciliation and Arbitration of the International Chamber
of Commerce excluding any such rules relating to the
posting of security for costs (the "RULES").
16.2 ARBITRATION
a) Nature of the Dispute. Any dispute between the parties to
this Agreement arising out of or relating to this
Agreement, including, without limitation, the
interpretation of any provision of this Agreement or the
breach, termination or invalidity of this Agreement (a
"Dispute") shall be settled exclusively and finally by
arbitration. It is specifically understood and agreed that
any Dispute may be submitted to arbitration irrespective of
the magnitude thereof, the amount in controversy or whether
such Dispute would otherwise be considered justifiable or
ripe for resolution by a court.
b) Rules of Arbitration. The arbitration shall be conducted in
accordance with the Rules of Arbitration of the
International Chamber of Commerce ("ICC") as in effect on
the date of this Agreement (the "ICC Rules"), except to the
extent that the ICC Rules conflict with the provisions of
this Section 16.2, in which event the provisions of this
Section 16.2 shall control.
18
19
c) Arbitration Procedure. The arbitral tribunal shall consist
of three (3) arbitrators, each of whom shall be bilingual
in English and Spanish but each of whom shall have English
as their first language. The parties to this Agreement
agree that the choice of arbitrators shall be as follows:
i) If there are only two parties to a Dispute, one (1)
arbitrator shall be appointed by each party and the
third shall be selected by the two party-appointed
arbitrators or, failing agreement, by the ICC, in
accordance with the ICC Rules.
ii) If there are more than two parties to a Dispute, then
the three (3) arbitrators shall be appointed by the
parties to the Dispute in accordance with the ICC Rules
established for the appointment of a sole arbitrator.
If the parties are not able to agree on all three
arbitrators then the ICC shall appoint the remaining
one, two or three arbitrators.
d) Location; Language. The arbitration shall be conducted in
Denver, Colorado and shall be conducted in English.
e) Consolidation. In order to facilitate the comprehensive
resolution of related disputes, and upon request by any
party to the arbitration proceeding, the arbitration panel
may at any time before the first oral hearing of evidence
consolidate the arbitration proceeding with any other
arbitration proceeding between any of the parties to this
Agreement. The arbitrators shall not determine to
consolidate such arbitration unless they determine that (i)
there are issues of fact or law common to the two
proceedings so that a consolidated proceeding would be more
efficient than separate proceedings and (ii) no party to
this Agreement would be prejudiced as a result of such
consolidation through undue delay or otherwise. In the case
of a consolidated proceeding involving more than two
parties to this Agreement, the arbitrators shall be
selected in accordance with Section 16.2(c)(ii).
f) Binding Decision and Award. Any decision or award of the
arbitral tribunal shall be final and binding upon the
parties to the arbitration proceeding. The parties to this
Agreement hereby waive to the extent permitted by law any
rights to appeal or to review of such award by any court or
tribunal. The parties to this Agreement agree that any
party to this Agreement may need to obtain interim
injunctive relief from a court. Therefore, a request for
interim injunctive relief by a party to a court, whether
before, during or after the arbitration proceedings have
been initiated in accordance with the ICC Rules,
19
20
shall not be deemed incompatible with, or a waiver of, any
provisions of this section. In addition to the authority
conferred on the arbitration tribunal by the ICC Rules, the
arbitration tribunal shall have the authority to make such
orders for interim relief, including injunctive relief, as
it may be deem just and equitable. The parties to this
Agreement agree that the arbitral award may be enforced
against the parties to the arbitration proceeding or their
assets wherever they may be found and that a judgment upon
the arbitral award may be entered in any court having
jurisdiction thereof.
g) Miscellaneous. At any oral hearing of evidence in
connection with the arbitration, each party thereto or its
legal counsel shall have the right to examine its witnesses
and to cross-examine the witnesses of an opposing party. No
evidence of any witness shall be presented in written form
unless the opposing party or parties shall have the
opportunity to cross-examine such witness, except as the
parties to the Dispute otherwise agree in writing or except
under extraordinary circumstances where the arbitrators
determine that the interests of justice require a different
procedure. Without in any way limiting the foregoing and
notwithstanding anything herein to the contrary, the
parties to this Agreement may, upon the prior written
consent of all parties to a Dispute, submit any Dispute to
an expert acceptable to all such parties for consideration
and advice. Each party to this Agreement agrees, in the
event such submission is made, to reasonably consider the
advice of such expert in connection with such Dispute.
h) Costs. The fees and expenses of the arbitrators and the
arbitration proceeding shall be split by the parties to the
arbitration. Each party shall bear its own costs and
expenses in connection with any arbitration proceeding,
with the exception of fees and costs associated with the
use of a translator, to the extent necessary, which shall
be borne equally amongst the parties.
17. ENTIRE AGREEMENT: AMENDMENTS
This Agreement (together with the Annexes and the Schedules hereto) contain the
entire agreement between the Parties with respect to the subject matter hereof
and supersedes any prior understandings, agreements or representations by or
between the Parties, whether written or oral. No amendment hereto shall be
effective or binding on any of the Parties unless reduced to writing with
specific reference to this Agreement, and executed by the respective duly
authorized representatives of each of such Parties.
20
21
18. SEVERABILITY
The invalidity or unenforceability of any provision, in whole or in part, of
this Agreement shall not in any way affect the validity or enforceability of any
other parts or provisions thereof, provided, however, that the Parties hereto
shall use their reasonable efforts to achieve the purpose of the invalid or
unenforceable provision or part thereof by a new valid and enforceable
stipulation.
19. RELATIONSHIP OF THE PARTIES
No Party has the power or authority to legally bind the other Party. Nothing
herein shall be construed as authorizing any Party to act as an agent or
representative of the other Parties and nothing herein shall be taken to
constitute or create a partnership, an agency or a joint venture among any of
the Parties.
20. RIGHTS AND REMEDIES
All rights and remedies provided for in this Agreement are in addition to, and
not exclusive of, any other rights or remedies otherwise available at law or in
equity.
21. COUNTERPARTS; FACSIMILE
This Agreement may be executed in one or more counterparts, each of which when
so executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same complete and executed agreement. This
Agreement may be executed and delivered by facsimile.
22. FURTHER ASSURANCES
Each of the Parties hereto shall cooperate with the other and execute and
deliver to the other such instruments and documents and take such other actions
as may reasonably be requested from time to time in order to carry out, evidence
and confirm their respective rights and the intended purpose of this Agreement.
23. EXPENSES
Each Party shall bear its own costs and expenses incurred in connection with the
negotiation, preparation and execution of this Agreement.
24. THIRD-PARTY BENEFICIARIES
This Agreement is intended to be solely for the benefit of the Parties hereto
and is not intended to confer any benefits upon, or create any rights in favor
of, any Person other than the Parties hereto and Persons referred to in Section
8.2.
21
22
25. NON-SOLICITATION
For a period of six (6) months following the termination of this Agreement,
VeloCom shall not directly induce or attempt to induce any person who is a then
current employee of Formus or any of its affiliates to (i) terminate such
employment or (ii) interfere with the business of Formus or its affiliates.
IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement on
the day and year set forth above.
FORMUS COMMUNICATIONS, INC. VELOCOM INC.
BY: BY:
---------------------------------- -----------------------------
NAME: NAME:
TITLE: TITLE:
22
23
SCHEDULE "A"
--------------------------------------------------------------------------------
REQUEST FOR SERVICES
================================================================================
1. DESCRIPTION OF EXPERTISE REQUIRED AND APPROXIMATE NUMBER OF CONSULTANTS
REQUESTED
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2. EXPECTED DURATION
--------------------------------------------------------------------------------
3. DATE OF COMMENCEMENT
--------------------------------------------------------------------------------
4. LOCATION
--------------------------------------------------------------------------------
5. CONTACT PERSON AT VELOCOM INC.
Name:
------------------------------------
Address:
------------------------------------
------------------------------------
Telephone:
------------------------------------
Fax:
------------------------------------
----------------------------------------------------
AUTHORIZED VELOCOM INC. SIGNATORY
DATE:
-----------------------------------
--------------------------------------------------------------------------------
23
24
SCHEDULE "B"
The documented Costs to be agreed to in an RFS Order shall be:
- Agreed upon Daily Rate which is based on Consultant's actual salary
and actual benefits (which shall not include any overhead costs);
- Lodging expenses in accordance with VeloCom's travel and expense
policy; and
- Travel expenses in accordance with VeloCom's travel and expense
policy.
24
25
SCHEDULE "C"
--------------------------------------------------------------------------------
RFS ORDER
================================================================================
1. NAME OF CONSULTANT
-------------------------------------------------------------
2. DAILY RATE AND EXPENSE REIMBURSEMENT POLICY
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
3. DATE OF COMMENCEMENT OF SERVICES
-------------------------------------------------------------
4. DURATION OF SERVICES
-------------------------------------------------------------
5. LOCATION(S)
-------------------------------------------------------------
6. OTHER TERMS AND CONDITIONS OF RFS ORDER
-------------------------------------------------------------
-----------------------------------------
AUTHORIZED VELOCOM INC. SIGNATORY
DATE:
--------------------------------------------------------
----------------------------------------
DATE:
--------------------------------------------------------
--------------------------------------------------------------------------------
25
26
ANNEX I
SERVICES
NETWORK PLAN
1. Network Planning and Design:
o Identification of network evolution plans (multimedia, broadband services,
etc.);
o Review of long-term network architecture;
o Review of on-going requirements for switch, access, transport;
o Analysis of evolution of operations support systems;
o Assistance with request for quotations for new network requirements
(multimedia, broadband services, etc.)
o Analysis of supplier responses;
o Input in negotiation of supplier contracts;
o Review of network design;
o Release of equipment orders;
o Analysis of overall network and systems survivability; and
o Review of emergency procedures (network & systems).
2. Radio Frequency Plan:
o Review and recommendation of spectrum requirements;
o Spectrum management; and
o Review of potential cellsite locations.
3. Switch Sites:
o Finalization of specific switch site leases;
o Negotiation of lease arrangements;
o Development of site modification plans;
o Solicitation of bids for modifications; and
o Monitoring of site modifications.
4. Transport:
o Identification of multimedia and broadband service needs;
o Identification of transport route plans for cable/fiber/microwave
facilities; and
o Review of right-of-way alternative.
5. Network Acceptance Process:
o Review of acceptance process; and
o Assistance with implementation of acceptance procedures.
6. Project Management:
o Assistance with coordination of training program.
26
27
7. Data:
o Assistance in ISP strategies and content development;
o Assistance with IP LAN/WAN connectivity; and
o Assistance in development and launch of VPNs.
8. Operations:
o Assistance in reviewing and designing maintenance procedures and programs;
o Consultation of installation processes and procedures; and
o Transfer and consultation with business rules and processes.
INFORMATION TECHNOLOGY
o Evaluation of long term requirements to incorporate multimedia and
broadband service;
o Evaluation of corporate management information systems plan;
o Evaluation of business support systems;
o Evaluation of billing application;
o Evaluation of customer care application;
o Evaluation of network management systems;
o Evaluation of request for quotations; and
o Review of installation & acceptance.
27
