Exhibit 10.42
EQUIPMENT PURCHASE AGREEMENT
This Equipment Purchase Agreement (the "Agreement") is made and entered
into as of December 22, 2000 (the "Closing Date") by and between Network
Access Solutions Corp., a Delaware corporation (the "Seller"), and SBC
Telecom, Inc., a Delaware corporation (the "Buyer").
R E C I T A L S
A. Seller is obligated to purchase from certain equipment vendors
(the "Equipment Vendors") certain equipment as more particularly described
on Schedule A attached hereto (the "Equipment");
B. Seller desires to sell to Buyer and Buyer desires to purchase
from Seller such Equipment on the terms and conditions set forth herein;
NOW THEREFORE, for and in consideration of the mutual promises,
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:
PURCHASE AND SALE OF EQUIPMENT
Section 1.01. Purchase and Sale. Seller hereby sells and transfers
onto Buyer and Buyer hereby purchases all of Seller's right, title and
interest in and to the Equipment, more particularly described in Schedule A
hereto.
Section 1.02. Xxxx of Sale. Seller has executed and delivered a Xxxx
of Sale ("Xxxx of Sale") conveying to Buyer the Equipment in the form
attached hereto as Exhibit A.
Section 1.03. Warranties.
(a) Seller hereby sells and transfers to Buyer Seller's rights under
any and all warranties from the Equipment Vendors with respect to the
Equipment in effect as of the Shipment Date (as hereinafter defined) to the
fullest extent permitted by the terms of such warranties.
(b) Seller expressly warrants that all items of Equipment that are
not under a warranty or warranties transferred to Buyer pursuant to Section
1.03(a) (such Equipment, the "Seller Warranted Equipment"), under normal
operation and use, will be new and will be free in all material respects
from defects in material or workmanship for a period of ten (10) business
days from the date of delivery of the Seller Warranted Equipment to Buyer
(the "Warranty Period"). If notified by Buyer of any such defects within
the Warranty Period, Seller shall, at its own election and expense, replace
any such defective Seller Warranted Equipment or refund the purchase price
for such defective Seller Warranted Equipment to Buyer. Notwithstanding
the foregoing, in no event shall Seller be liable for damage to Seller
Warranted Equipment resulting from improper handling after shipment,
misuse, neglect, improper installation, operation or repair (other than as
authorized by the applicable Equipment Vendor), alteration, accident, use
of the Seller Warranted Equipment other than in accordance with the
specifications for such Equipment provided by the applicable Equipment
Vendor or for any other cause not attributable to defects in materials or
workmanship.
(c) LIMITATIONS. IN NO EVENT SHALL SELLER'S LIABILITY TO BUYER OR TO
ANY OTHER PARTY FOR BREACH OF THE WARRANTIES SET FORTH IN SECTION 1.03(B)
OF THIS AGREEMENT EXCEED THE PURCHASE PRICE PAID BY BUYER TO SELLER FOR THE
SPECIFIC PRODUCT THAT IS THE SUBJECT MATTER OF THE CLAIM. THE EXPRESS
WARRANTIES SET OUT IN SECTION 1.03(B) OF THIS AGREEMENT ARE IN LIEU OF ALL
OTHER WARRANTIES, REPRESENTATIONS OR CONDITIONS, EXPRESSED OR IMPLIED,
INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR THOSE ARISING FROM STATUTE OR USAGE OF TRADE.
SELLER, ITS EMPLOYEES, AGENTS, OFFICERS AND DIRECTORS SHALL NOT BE
LIABLE IN ANY WAY WHATSOEVER, WHETHER AS A RESULT OF A CLAIM OR ACTION IN
CONTRACT OR TORT OR OTHERWISE FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES, OR FOR ANY LOST PROFITS OR LOST BUSINESS REVENUE, LOST
BUSINESS OR FAILURE TO REALIZE EXPECTED SAVINGS, OR FOR ANY DAMAGES, DIRECT
OR INDIRECT, SPECIAL OR CONSEQUENTIAL, ARISING OUT OF ANY CLAIM AGAINST
BUYER BY ANY PERSON WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE AND WHETHER
OR TON SELLER, ITS EMPLOYEES, AGENTS, OFFICERS AND DIRECTORS HAVE BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
PURCHASE PRICE
Section 2.01. Consideration. In consideration for the sale,
assignment, transfer and delivery of the Equipment, Buyer will pay to
Seller by check or wire transfer within fourteen days of the Closing Date
(the "Payment Date"), the sum of Two Million One Hundred Eighty-One
Thousand Ninety-Six Dollars and Twenty-Four Cents ($2,181,096.24) (the
"Purchase Price"); provided, however that, if the Shipment Date has not
occurred within the fourteen days of the Closing Date, then the Payment
Date shall be the second business day following the Shipment Date.
CERTAIN AGREEMENTS WITH RESPECT TO EQUIPMENT
Section 3.01. Title to Equipment.
(a) Title to the Equipment and all liability for loss or damage to
the Equipment shall pass to Buyer upon Seller's, or its agent's, delivery
of the Equipment to Buyer at the locations indicated in Section 3.02(a)
herein below (such date, the "Shipment Date"). Buyer shall fully defend,
indemnify and hold harmless Seller, its affiliates, officers, directors,
employees, agents and representatives, against and in respect of any and
all claims, actions, suits, proceedings, demands, assessments, judgments,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including, without limitation, interest, penalties and
attorneys' fees, expert witness fees, costs and expenses ("Losses") that
Seller, its affiliates, officers, directors, employees, agents and
representatives shall incur or suffer related to, arising from or caused by
the Equipment, or the use or transportation thereof, on or after the
Shipment Date, including without limitation, environmental liability
claims, employment-related claims, product liability claims, or other
actions, suits, proceedings, demands or assessments.
(b) Buyer acknowledges that Seller has no expertise concerning
statutes, regulations, rules or laws relating to the protection of human
health or the environment ("Environmental Requirements") and that Buyer is
not relying upon any representation, or the lack of same, with respect to
Environmental Requirements as they apply to the condition of the Equipment.
(c) Buyer unconditionally releases Seller from and against any and
all liability to Buyer, both known and unknown, present and future, for any
damages to Buyer arising out of any violation of Environmental Requirements
with respect to the Equipment, whether or not caused by the negligence of
Seller.
Section 3.02. Shipment and Delivery.
(a) Seller shall, in its sole discretion, determine the best way of
shipment, routing and common carrier utilized. Buyer shall inform Seller
of the address to which the Equipment is to be delivered as soon as
practicable following the Closing Date. Seller will use reasonable
commercial efforts to ship the Equipment to the following address within
five (5) business days of notification from Buyer that Buyer is ready to
accept the Equipment. The Equipment is to be delivered to: SBC Telecom,
Inc., 0000 Xxxxxxx Xxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000, Attn: Xxxxxxx
Xxxxx. Shipment will be FOB Seller's facility in 00000 Xxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxx, with respect to the Equipment listed on the first page
of Schedule A and FOB [Verizon's facility?] in [to be supplied by NAS] with
respect to the Equipment listed on the second page of Schedule A.
(b) In no event will Seller be liable for any costs, losses or
damages arising out of or caused by delay in delivery or non-delivery of
the Equipment.
(c) Seller shall send Buyer an invoice for Seller's costs to deliver
the Equipment to Buyer, including, without limitation, all taxes or fees
associated therewith. Buyer shall pay to Seller the amount of such invoice
by check within thirty days of receipt of such invoice.
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of Buyer and Seller.
Buyer and Seller each represent and warrant to the other that each is duly
incorporated and in good standing under the laws of its jurisdiction of
incorporation with complete authority to enter into the subject
transaction. Furthermore, each represents, warrants and agrees that it
will take any and all action necessary to approve, and/or ratify the
subject transaction, including, but not limited to any necessary corporate
resolutions. Each Party represents and warrants that is has the authority
to enter and sign this Agreement.
Section 4.02. Representations and Warranties of Seller. Seller
represents and warrants to Buyer that it has sound and marketable title to
the Equipment, subject to a purchase money security interest, and that
Buyer will have good and marketable title to all of the Equipment upon
delivery of the Equipment to Buyer, subject to a purchase money security
interest, and the Equipment is free and clear of restrictions on or
conditions to transfer or assignment, and free and clear of mortgages,
liens, pledges, encumbrances or claims, subject to a purchase money
security interest. Seller covenants that it will satisfy all purchase
money indebtedness secured by the Equipment promptly upon receipt of the
Purchase Price. Seller shall defend, indemnify and hold Buyer harmless
from and against any damage, liability, loss or claim related to or arising
from a breach of this representation and warranty described in this
Section 4.02.
DISPUTE RESOLUTION
Section 5.01. Negotiation.
(a) Disputes. The parties shall attempt to promptly resolve any
disputes between them arising out of or in connection with the execution,
interpretation and performance of this Agreement (a "Dispute") by
negotiation between the employees of each party responsible for
implementing this Agreement. Any party may provide another party with a
Dispute Notice, which will set forth the nature of the dispute and the
identity of representatives of the complaining party who will attend
settlement meetings. After the receipt of a Dispute Notice, the
representatives of the affected parties shall meet as soon as practicable
at mutually acceptable times and places.
(b) Referral to Dispute Resolution Officers. If a Dispute has not
been resolved within thirty (30) days of the receipt of written notice, the
Dispute shall be referred to the senior executive officer of the parties,
or their designees, for resolution. If they do not resolve the Dispute
within forty-five (45) days, either Party may refer the Dispute to
arbitration pursuant to Section 5.02.
(c) Confidentiality of Negotiations. All negotiations pursuant to
this Section 5.01 shall be confidential and shall be treated as compromise
and settlement negotiations. Nothing said or disclosed, nor any document
produced, in the course of such negotiations which is not otherwise
independently discoverable, shall be offered or received as evidence or
used for impeachment or for any other purpose in any current or future
arbitration or litigation.
Section 5.02 Arbitration.
(a) If either party refers the Dispute to arbitration, the Dispute
shall be finally settled by binding arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association
("AAA") then in effect. However, in all events, the arbitration provisions
in this Section shall govern over any conflicting rules that may now or
hereafter be contained in the AAA rules. The arbitration shall be held in
New York, New York, unless the Parties mutually agree to have the
arbitration held elsewhere, and judgment upon any award made therein may be
entered by any court having jurisdiction over the award, over the
applicable Parties, or their respective assets; provided, however, that
nothing contained in this Section shall be construed to limit or preclude a
party from bringing any action in any court of competent jurisdiction for
injunctive or other provisional relief. The arbitrators shall have the
authority to grant any equitable and legal remedies that would be available
in any judicial proceeding instituted to resolve any Dispute hereunder.
(b) Arbitrators. Any arbitration will be conducted before three (3)
arbitrators, one of whom shall be chosen by the complaining party, one of
whom shall be chosen by the other party, and the third of whom shall be
chosen by the other two arbitrators. The Parties may obtain lists of
potential arbitrators from their choice of the AAA, JAMS, or both, who
shall be a neutral and impartial party who has had training and experience
as an arbitrator. The decision of a majority of the arbitrators will be the
decision of the arbitrators. The arbitrators shall permit such discovery
of information related to the Dispute in arbitration as they shall
determine is appropriate in the circumstances, taking into account the
needs of the parties and the desirability of making discovery expeditious
and cost-effective.
(c) Costs and Fees. All fees and expenses of the arbitrators,
expenses for hearing facilities and other expenses of the arbitration shall
be borne equally by the parties to the Dispute unless the arbitrators in
the award assess such fees and expenses in some other manner. Each party
shall bear the fees and expenses of its own attorneys and witnesses except
to the extent otherwise provided in this Agreement or by law; provided,
that if the arbitrators determine that the claim or defense of any party
was frivolous or lacked a reasonable basis in fact or law, the arbitrators
may assess against such party all or part of the fees and expenses of
attorneys and witnesses for any other party.
(d) Burden of Proof. For any Dispute submitted to arbitration, the
burden of proof will be the same as if the claim were litigated in a
judicial proceeding.
(e) Award. Upon the conclusion of any arbitration proceedings
hereunder, the arbitrators will render findings of fact and conclusions of
law and a written opinion setting forth the basis and reasons for any
decision reached and will deliver such documents to each party to this
Agreement along with a signed copy of the award.
(f) Agreement Controls. The arbitrators chosen in accordance with
these provisions will not have the power to alter, amend or otherwise
affect the terms of these arbitration provisions or the provisions of this
Agreement.
GENERAL PROVISIONS
Section 6.01. Further Assurance. Seller and Buyer each agree, at any
time and from time to time after the Closing Date, to execute and deliver
to the other, such further instruments or documents and other written
assignments as may reasonably be requested in order to further evidence and
give effect to the transactions herein contemplated.
Section 6.02. Amendment; Waiver. This Agreement may be amended only
by a written instrument signed by the parties hereto. No failure to
exercise and no delay in exercising, on the part of any party, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
The failure of any party to insist upon a strict performance of any of the
terms or provisions of this Agreement, or to exercise any option, right or
remedy herein contained, shall not be construed as a waiver or as a
relinquishment for the future of such term, provision, option, right or
remedy, but the same shall continue and remain in full force and effect.
No waiver by any party of any term or provision of this Agreement shall be
deemed to have been made unless expressed in writing and signed by such
party.
Section 6.03. Survival of Representations and Warranties. All
representations, warranties and agreements made by the parties hereto shall
survive the Closing and be enforceable against the parties hereto, their
heirs, successors and assigns.
Section 6.04. Expenses. Buyer and Seller shall each bear all of
their own costs and expenses in connection with this transaction.
Section 6.05. Taxes. Buyer shall pay all transfer taxes, sales taxes
or other taxes, if any, required to be paid in connection with the sale,
assignment and transfer of the Equipment. If Buyer is exempt from any tax
required to paid in connection with the sale, assignment and transfer of
the Equipment, Buyer shall inform Seller of such exemption and provide
Seller with evidence thereof satisfactory to Seller as soon as practicable
following the Closing Date.
Section 6.06. Non-Assignment. This Agreement shall not be assignable
by either party without the written consent of the other, which consent may
be withheld for any reason whatsoever.
Section 6.07. Brokers. Each party to this Agreement agrees that it
will indemnify and hold harmless the other party against any claim for
brokerage, finders' fees, agents' or investment bankers' or commissions in
connection with the negotiation or consummation of the transactions
contemplated by this Agreement.
Section 6.08. Notices. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally to the recipient, one day after being sent to the
recipient by reputable express courier service (charges prepaid),
transmitted by electronic mail or facsimile, or five days after being
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other
communications shall be sent to the parties at the address indicated below:
(a) To Buyer addressed to:
SBC Telecom, Inc.
Vice President - Network Operations
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Room 1-C-50
Xxx Xxxxxxx, Xxxxx 00000
with a copy to: General Counsel
SBC Telecom, Inc.
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Room 1-C-40
Xxx Xxxxxxx, Xxxxx 00000
(b) To Seller addressed to:
Network Access Solutions
Three Dulles Tech Center
00000 Xxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Vice President, Legal
Facsimile: 000-000-0000
Email: 000-000-0000
Section 6.09. Counterparts. This Agreement may be executed in any
number of counterparts with the same effect as if the signatures to each
such counterpart were upon the same instrument.
Section 6.10. Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements,
arrangements and communications, whether oral or written, of Buyer and
Seller. Captions appearing in this Agreement are for convenience only and
shall not be deemed to explain, limit or amplify the provisions hereof.
This Agreement shall be binding upon the parties hereto and their
successors, representatives, heirs and assigns.
Section 6.11. Construction. The parties hereto agree that this
agreement shall be fairly applied and construed to express the intentions
of the parties hereto and shall not be construed in favor of one party or
the other. For purposes of construction of this agreement, both parties
have participated in the negotiation and drafting of this agreement.
Section 6.12. Severability. In the event that any term or provision
of this Agreement is deemed to be illegal or otherwise unenforceable under
the laws of the State of New York by any court of competent jurisdiction,
the remainder of the terms and provisions contained herein shall be deemed
to continue in full force and effect, provided that such remaining
provisions can continue to be enforced without substantially impairing the
rights and benefits of the parties hereto as evidenced by their respective
intentions embodied herein.
Section 6.13. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware
without giving effect to any choice or conflict of law provision or rule
(either of the State of Delaware or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State
of Delaware.
[Signatures appear on following page]
IN WITNESS WHEREOF, this Agreement has been executed by the parties
effective the date first set forth above.
Network Access Solutions Corp. SBC Telecom, Inc.
("Seller") ("Buyer")
By: /s/ Xxxxxxxx X. Xxxx By: /s/ Lea Xxx Xxxxxxxx
Title: CEO Title: President and CEO
SCHEDULE A
CISCO
(All equipment located at the NAS
warehouse)
Units
in
Vendor
Part No.
Descripti
on
W/H
Unit Cost
Total Ext
Cisco
CISCO 2610-DC
ROUTER
400
$
2,517.00
$1,006,800.00
Cisco
WS-C 1924-EN-
DC
HUB
417
$
1,347.00
$561,699.00 $1,568,499.00
SCHEDULE A (Cont'd.)
VERIZON (formerly GE Supply) (Equipment held in both NAS and Verizon
warehouse, as noted below)
VendorPart NO Descriptionin the NAS warehouseVendor Holding at their
warehouse Unit CostTotal Ext
GE Supply UFSOD134007Seismic Racks (note 1) 31300$ 291.52$ 379,850.56
GE Supply CABLE RACK ASSY40 146$ 677.54$ 126,022.44
GE Supply GROUND KIT67 58$ 145.00$ 18,125.00
GE Supply Scope Attachment 0 204$ 434.31$ 88,599.24
____________
$ 612,597.24
____________
11
EXHIBIT A
XXXX OF SALE FOR EQUIPMENT
XXXX OF SALE, dated December __, 2000, from Network Access Solutions
Corp., a Delaware corporation ("Seller"), to SBC Communications, Inc., a
Delaware corporation ("Buyer").
WHEREAS, Seller and Buyer are parties to that certain Equipment
Purchase Agreement dated of even date herewith (the "Equipment Purchase
Agreement") providing for the transfer and sale to Buyer of the equipment
of Seller set forth on the Equipment Schedule attached hereto as Exhibit A
(the "Equipment"), as more fully described in the Agreement, for
consideration in the amount and on the terms and conditions described in
the Agreement;
NOW, THEREFORE, pursuant to and in accordance with the terms of the
Equipment Purchase Agreement and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged:
1. Without recourse, representation or warranty, except for such
representations, warranties and covenants as are set forth in the Equipment
Purchase Agreement, Seller does hereby sell, convey, transfer, assign and
deliver to Buyer, subject to the limitations set forth in the Equipment
Purchase Agreement, all of Seller's right, title and interest in and to the
Equipment.
2. This Xxxx of Sale shall bind and inure to the benefit of the
respective parties and their assigns, transferees and successors. This
Xxxx of Sale shall be construed in accordance with and governed by the
domestic laws of the State of New York without giving effect to any choice
or conflict of law provision or rule (either of the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
3. This Xxxx of Sale is intended to implement the provisions of the
Equipment Purchase Agreement and shall not be construed to enhance, extend
or limit the rights or obligations of Buyer or Seller thereunder. To the
extent any provision of this Xxxx of Sale is inconsistent with the
Equipment Purchase Agreement, the provisions of this Equipment Purchase
Agreement shall control.
IN WITNESS WHEREOF, Seller has executed and delivered this Xxxx of
Sale effective as of the ___ day of December .
Network Access Solutions Corp.
__
By: _
Title: _
