EXHIBIT 10.18
GLOBAL TELECOMMUNICATIONS OPERATIONS, INC.
CONTRACT No. 3 - 1998
made by and between XXXXXX XXXXXX XXXXXXXXX, of age, domiciled at Santafe de
Bogota, D.E., bearer of Passport No. 00000000, issued in Santafe de Bogota D.C.,
who acts as Attorney-in-fact according to special power of attorney granted by
GLOBAL TELECOMMUNICATIONS OPERATIONS, INC., (hereinafter referred to as the
"COMPANY") -on the one part-, and SIEMENS AKTIENGESELLSCHAFT, a corporation duly
organized and existing under the laws of the Federal Republic of Germany,
domiciled at Berlin and Munich, represented by SIEMENS SOCIEDAD ANONIMA, a
corporation registered in the Chamber of Commerce of Bogota under Registry No.
003.206, herein represented by Xx. XXXXX XXXXXXXXX, of age, bearer of Foreigner
I.D. No. 92.236, who resides in Santafe de Bogota, and Mr. XXXXXXX XXXXXXXXX
XXXXXXXX, of age, domiciled at Santafe de Bogota, bearer of Identification
Document No. 17.023.898, a corporation domiciled at Santafe de Bogota, which may
be verified with the Commercial Agency and Exclusive Representation Certificate,
issued by the Chamber of Commerce of Bogota (hereinafter referred to as
"CONTRACTOR"),
CLAUSE ONE. SUBJECT: The CONTRACTOR agrees to transfer, as a Purchase and Sale
transaction, the equipment to the COMPANY at the following destination: A)
XXXXXXX. EWSD commutation equipment for 10,328 telephone lines and main office
software update to version V.12. B) CALI. EWSD commutation equipment for 15,000
telephone wireless lines, transmission equipment, DECTLINK wireless access
equipment for 15,000 members, radio equipment for interconnection from the main
office to DECTLINK base stations and main office software update to version
V.12. C) JAMUNDI. Main office software update to version V.12. All contents of
this clause are according to the technical annex.
CLAUSE TWO. DOCUMENTS OF THIS CONTRACT. The Technical Annex is an integral part
of this Contract. The following aspects are included in the Technical Annex: A)
General Summary of Prices, B) List of Materials, C) Delivery Schedule, D)
Graphics, E) Readjustment formula for future purchases and parts, F) Technical
specifications and characteristics of property and equipment, and the
CONTRACTOR'S offer.
CLAUSE THREE. VALUE OF THE CONTRACT. The value of importation supplies (CIP),
included in the Technical Annex hereof is TWELVE MILLIONS EIGHT HUNDRED EIGHTY
THOUSAND SEVEN HUNDRED NINETY-EIGHT UNITED STATES AMERICAN DOLLARS AND 47 CENTS
(US$12,880,798.47), distributed as follows: A) TELEPALMIRA: NINE HUNDRED THIRTY-
THREE THOUSAND TWO HUNDRED ELEVEN UNITED STATES AMERICAN DOLLARS AND 22 CENTS
(US$933,211.22). B) UNITEL: ELEVEN MILLIONS EIGHT HUNDRED SIXTY-THREE THOUSAND
SEVENTY-FOUR UNITED STATES AMERICAN DOLLARS AND 25 CENTS (US$11,863,074.25). C)
TELEJAMUNDI: EIGHTY-FOUR THOUSAND FIVE HUNDRED THIRTEEN UNITED STATES AMERICAN
DOLLARS (US$84,513.00).
PARAGRAPH 1: Insurance costs, local transportation, warehousing, customs agency
costs in Colombia for imported property (CIP) shall be on the COMPANY'S account
or on its leasees. The COMPANY or its leasees shall assume and directly pay
customs duties, IVA and all other nationalization costs in Colombia. All direct
and indirect taxes, contributions and interests of any kind in effect as of the
subscribing date of this Contract and imposed thereof shall be on the
CONTRACTOR'S account. Constitution of new taxes or increment of existing rates
shall be on the COMPANY'S account.
PARAGRAPH 2: If, due to delays in the terms agreed for delivering the contracted
equipment (CIP), for reasons attributable to the CONTRACTOR other than force
majeure or unexpected circumstances, any national tax, interest or contribution
is imposed, the CONTRACTOR shall assume such value resulting from this reason.
CLAUSE FOUR. TERMS OF PAYMENT. The COMPANY shall pay to the CONTRACTOR the
amounts provided in the Third Clause hereof according to the provisions of the
financing contract subscribed to that effect within the following thirty (30)
days.
CLAUSE FIVE. DELIVERY TERM. The CONTRACTOR agrees to deliver all importation
equipment and elements according to schedules indicated in the Technical Annex
for each locality, provided payments according to the financing contract (above
clause) have been received.
CLAUSE SIX. EXTENSION OF THE DELIVERY TERM. Terms and other obligations
mentioned in this Contract shall be extended if a Force Majeure event occurs
(according to the definition included in the Civil Code of the Republic of
Colombia). The party claiming that a state of force majeure exists shall prove
to the other party such impossibility to perform its obligations. In these cases
the new terms and obligations shall be mutually agreed on. However, the party so
affected by the force majeure shall send to the other party notification of its
commencement in writing within three (3) days following the date in which it may
be possible. The extension of time herein anticipated shall be for as long as
the affected party is prevented from performing its obligations but no longer.
In the event a term is due during the occurrence of this force majeure, such
extension of time shall not be longer than the time from the date of its
commencement to the date its obligations should be performed.
CLAUSE SEVEN. MARKS AND PATENTS. The CONTRACTOR guarantees to the COMPANY the
usage of the marks or tradenames and patents for the equipment, materials and
elements it is obliged to supply. The CONTRACTOR shall defend at its own expense
any suit against the COMPANY by reason of the misuse of the marks or tradenames
and patents, and shall pay all fines and expenses derived thereto. If, as a
result of these actions, the COMPANY is legally or administratively compelled to
stop using one or more of the property herein mentioned, the CONTRACTOR must:
(a) guarantee, as possible, payment for the damages to the third party claiming
infringement, in such way that the COMPANY may keep using the property on a
continuous basis. (b) if the above is not legally possible, the CONTRACTOR
should provide, within five (5) days following the order to stop using the
property/property, substitute property of similar characteristics or make
corrections to the property within the same period of five (5) days excluding
the infringement but with the same technical and performing characteristics. In
both cases the COMPANY shall be allowed to guarantee continuity in rendering the
Telecommunications public domiciliary service.
CLAUSE EIGHT. EXTENT OF THE TECHNICAL QUALITY WARRANTY. The equipment supplied
by the CONTRACTOR to the COMPANY shall be new and of the best quality and shall
be manufactured in a way that it may be resistant to the climate and
meteorological conditions of the places where it will be installed. In case of
failure, including branches, the CONTRACTOR shall exclusively respond as
follows: -all parts, discovered to be useless due to defective construction, or
materials deficiency, or defective manufacture within a period of eighteen (18)
months from the subscription date of each Act of Initial Receipt and initiation
of operations in each locality, will be supplied again or repaired, as the case
may be, free of charge, provided the maintenance done during the warranty period
is properly performed-. Presence of such defects shall be officially notified to
the CONTRACTOR within fifteen (15) days from the date that the leasees have
acknowledged these defects. Parts that are replaced under this provision shall
remain as the CONTRACTOR'S property. The warranty is not applicable to aging,
natural wear due to mechanic causes, or imperfection due to improper or
negligent use of the service elements, as well as defective works in buildings,
chemical and electrochemical influences resulting from natural causes for which
the CONTRACTOR is not responsible. Warranty of the equipment implies that it may
be repaired or replaced as many times as needed for its normal performance.
However, this obligation expires automatically after the period of eighteen
months from the subscription date of each Act of Initial Receipt and initiation
of operations in each locality. This quality warranty does not apply to existing
equipment that is not the subject of this Contract.
CLAUSE NINE. WARRANTIES. CONTRACTOR shall constitute warranties in favor of the
COMPANY and its leasees. These warranties shall be issued by a Bank or an
Insurance Company legally authorized to operate in Colombia and will be based on
the value of the contract estimating the performance of obligations thereof, as
follows: (a) Compliance of this Contract including fines for 10% the value of
the Contract which shall be in effect during its term and three (3) months
thereafter. (b) 10% the value of the imported property hereby included for
quality and correct performance of the supplied property which will be in effect
for eighteen (18) months from the subscribing date of each act of initial
receipt and initiation of operations in each locality. The warranty referred to
in item a) shall be constituted and presented to the COMPANY and its leasees by
the CONTRACTOR together with a certificate of payment of the premium within five
(5) days following the subscribing date of this Contract. The warranty referred
to in item b) shall be constituted and presented to the COMPANY and the
corresponding leasee by the CONTRACTOR together with a certificate of payment of
the premium within five (5) days following the subscribing date of each act of
initial receipt and initiation of operations.
PARAGRAPH. The CONTRACTOR agrees to keep the policies in force during the term
of the obligations warranted by such policies and to extend the policies in the
event they are due until the agreed term. The COMPANY may demand, at any time,
in force certification of the policies.
CLAUSE TEN. WARRANTY REPLACEMENT. The CONTRACTOR accepts to replace the amount
of the warranty every time that, due to fines imposed to it, it may be decreased
or exhausted.
CLAUSE ELEVEN. FINES. The CONTRACTOR shall be bound to pay to the COMPANY, as a
fine or sanction for arrears, an amount equivalent to two per one thousand
(2 degrees/oo) the value of the supplies or property not delivered within the
agreed terms for each day in arrears. However, the amount of the imposed fines
shall not exceed ten percent (10%) of the total value of the Contract. In any
case, the CONTRACTOR
shall not assume any ceasing profit, indirect and consequential damages, or
invoicing losses. Fines shall be imposed by written notification, duly supported
by the COMPANY or its leasees. The CONTRACTOR may answer within a period of five
(5) working days following the date this notification is received. The COMPANY
or its leasees shall answer to this within a period of five (5) working days. In
the event such fine is confirmed, and, if CONTRACTOR insists on its claims, the
Compromising Clause included in Clause Sixteen shall apply within a period of
five (5) days following such confirmation.
PARAGRAPH. Once the fine is confirmed, the COMPANY is authorized to withhold
its amount from the amount owed by the COMPANY to the CONTRACTOR, as well as
interests, for which the same rate included in the financing contract shall be
used, from the date the fine is imposed by the COMPANY.
CLAUSE TWELVE. TECHNOLOGICAL MODIFICATIONS. The parties hereto agree on a period
not greater than thirty (30) days following subscription of this Contract to
perform the annexes and adjustments that, due to technical reasons, are deemed
necessary in order to assure that the obligations hereby provided are
successfully performed.
CLAUSE THIRTEEN. DOMICILE AND APPLICABLE LAW. New York City is set to be the
contractual domicile for all legal effects. This contract shall be in all
respects governed by the laws of New York State and any claim shall be subject
to judges in such jurisdiction.
CLAUSE FOURTEEN. CONFIDENTIALITY. This agreement and all information supplied by
the COMPANY or its leasees to the CONTRACTOR with respect to the project, during
the term of negotiations, as well as information supplied during its execution
shall be held in trust and confidence, in the same way that it keeps its
commercial secrets and privileged information secret and confidential. Upon
termination of this Contract, the CONTRACTOR accepts to return to the COMPANY or
its leasees
or destroy all information received and present a certificate signed by a
financial inspector stating that it indeed was destroyed.
CLAUSE FIFTEEN. SETTLEMENT OF DIFFERENCES. All differences which may arise
between the parties hereto out of or in relation to the subscription, execution,
interpretation or termination of this Contract shall be subject to the following
procedure: a) Once the difference is made known and within a period of ten (10)
days following this acknowledgement any of the parties hereto may request in
writing to the other party, within a period not greater than five (5) days from
the date of notification, a meeting with the legal representatives of the
parties hereto with the purpose to settle the differences. b) If the legal
representatives do not settle the difference within a period of twenty days (20)
thereafter, or their meeting is not set within the period of five (5) days
hereby mentioned, the difference shall be finally settled by arbitration in New
York State, pursuant to the Arbitration Rules of New York State, by which each
party shall be bound.
CLAUSE SIXTEEN. FUTURE PURCHASES AND PARTS. The CONTRACTOR guarantees to the
COMPANY the proper supply of accessory parts and materials required for
operation and maintenance of the property supplied for a period of ten (10)
years from the CIP date. The CONTRACTOR agrees to process future purchase orders
for equipment and software placed by the COMPANY or its leasees at the lowest
price between a) unit prices referred to in the Technical Annex hereof adjusted
according to the adjustment formula included in the Technical Annex, and b) the
list price in force as of the date of the purchase order. In witness whereof it
is signed in Panama, on June 11th, 1998.
GLOBAL TELECOMMUNICATIONS OPERATIONS, INC.
_______________________________
Xxxxxx Xxxxxx Xxxxxxxxx
ATTORNEY-IN-FACT
SIEMENS AKTIENGESELLSCHAFT
REPRESENTED BY
SIEMENS SOCIEDAD ANONIMA
___________________________________ ______________________________
XXXXX XXXXXXXXX XXXXXXX XXXXXXXXX
Telecommunications Vice-president Attorney-in-fact
