EXHIBIT 10.37
MASTER PURCHASE AND LICENSE AGREEMENT
THIS MASTER PURCHASE AND LICENSE AGREEMENT (the "Agreement") is made as
of the 16th day of July, 2003 by and between Western Wireless Corporation
("Customer") and Nortel Networks Inc. ("Nortel Networks").
In consideration of the premises and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS: CONSTRUCTION
1.1 As used in this Agreement, the following terms shall have the
following meanings:
(a) Acceptance (or Accepted) means, with respect to items
of Equipment and Software (or a portion of a System), the earlier to occur of
(i) the date upon which the applicable items of Equipment and Software (or
portion of a System) have successfully completed and passed all of the
applicable Acceptance Tests in accordance with Article 6, and (ii) the date upon
which the In-Service Date has occurred with respect to the applicable items of
Equipment and Software (or portion of a System), and with respect only to
Furnish Only Equipment and Software, thirty (30) days following the applicable
ship date; provided, however, that with respect to any items of Equipment and
Software set forth in the first accepted Purchase Order for a New Technology,
Acceptance shall occur on the earlier to occur of (A) the date upon which the
applicable items of Equipment and Software have successfully completed and
passed all of the applicable Acceptance Tests in accordance with Article 6, and
(B) the date upon
Confidential Information
which (1) the In-Service Date has occurred with respect to the applicable items
of Equipment and Software, and (2) such items are operating materially in
accordance with the applicable Specifications;
(b) Affiliate means, with respect to any person or
entity, any other person or entity that, either directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with such person or entity. As used in this Agreement, "control" shall
mean possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person or entity, whether through
the ownership of voting securities, by contract or otherwise;
(c) Agreement means this Agreement, all Attachments
hereto and all appendices or attachments to the Attachments, as such may be
amended from time to time;
(d) Business Day means any day on which banks and foreign
exchange markets are open for the transaction of business in New York, New York;
(e) Documentation means all Nortel Networks
documentation, whether in written or electronic form, which sets forth
Specifications or operations and maintenance procedures for a System, Equipment
or Software. All Documentation delivered to Customer shall be delivered in
CD-ROM format and shall also be available to Customer in web-based format;
(f) Effective Date means July 16, 2003; provided,
however, that as set forth in Section 2.1 hereof, the Purchase Orders for the
Initial Order issued by Customer and accepted by Nortel Networks prior to the
date of this Agreement shall be subject to
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all of the terms and conditions of this Agreement to the same extent as if such
Purchase Orders had been issued after the Effective Date.
(g) Equipment means all of the hardware, components and
parts thereof purchased pursuant to this Agreement, including all of the
hardware, components and parts comprising the Initial Order and all Expansions.
During the Term of this Agreement, Nortel Networks shall make available to
Customer all wireless telecommunications hardware, components and parts as
Nortel Networks or its Affiliates may manufacture or have manufactured and which
telecommunications hardware, components and parts are made available by Nortel
Networks or its Affiliates and which Nortel Networks' makes generally available
to its customers in the Territory. For purposes of this Agreement, the term
"Equipment" shall include OEM Equipment and Reseller Equipment unless
specifically stated otherwise;
(h) Expansion means the Equipment, Software, Installation
and other Services purchased under this Agreement for addition to or improvement
of an existing system;
(i) Furnish Only means Equipment and/or Software (as
applicable) for which Customer shall be responsible for installation;
(j) Initial Order means the Equipment, Software and
Services initially ordered by Customer hereunder, as more fully described in
Attachments A (which sets forth the Initial GSM Order) and Attachment B (which
sets forth the New CDMA Initial Order). The Initial Order does not include
Expansions to a System;
(k) In-Service means the provision by a System, portion
thereof or item of Equipment or Software of commercial telecommunications
services to
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Customer's subscribers. The date the System, portion thereof or item of
Equipment or Software is actually placed In-Service shall be referred to as the
"In-Service Date" for such System, portion thereof or item of Equipment or
Software;
(l) Installation (including its usage in the verb form
"Install") means the complete performance and supervision by Nortel Networks of
all installation of Equipment and Software for which Installation is ordered.
Installation, where applicable, shall include interconnection of the Equipment
at the main distribution frame of the System ("MDF") to circuits provided by
Customer to the Public Switched Telephone Network ("PSTN") and the
interconnection (either land-line or microwave) at the MDF between the switch
Equipment and each cell site or base station location;
(m) New Technology means any type of telecommunications
Equipment or Software which Customer has not previously purchased or licensed
from Nortel Networks under this Agreement. For purposes of clarification, GSM
shall not be considered to be a New Technology, but EDGE and EVDO shall each be
deemed to be a New Technology.
(n) OEM Equipment means equipment or software, other than
Reseller Items, which is sold or licensed by an entity other than Nortel
Networks, including Affiliates of Nortel Networks, but for which Nortel Networks
has the right to resell such equipment or transfer the right-to-use such
software and which is sold or licensed to Customer pursuant to this Agreement.
For purposes of this Agreement, the term "Equipment" shall include OEM Equipment
unless specifically stated otherwise;
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(o) Purchase Order means any purchase order issued by
Customer to Nortel Networks pursuant to this Agreement or any document that the
parties mutually agree upon as the vehicle for procuring Equipment, Software and
Services hereunder;
(p) Regulatory Claim means any enforcement or other
action by any state or federal regulatory body or bodies, including the FCC,
solely as such action relates to the failure of such Equipment, Software or
System to perform in accordance with the applicable Specifications and such
failure was due to the acts or omissions of Nortel Networks in violation of the
terms and obligations of this Agreement. "Regulatory Claim" shall not include
any such enforcement or similar action with respect to regulatory or other
governmental requirements that were not in effect on the date the Purchase Order
for the applicable Equipment or Software was accepted by Nortel Networks or
arising from Customer's failure to install or have installed changes, revisions
or updates by Nortel Networks that would have prevented such performance
failure.
(q) Reseller Items means equipment or software which (i)
is labeled with the brand and/or trademark of an entity other than any brand or
trademark owned or licensed by Nortel Networks or any Affiliate of Nortel
Networks, (ii) is not integrated into or with Nortel Networks' Equipment, and
(iii) is sold or licensed by an entity other than Nortel Networks or its
Affiliates, but for which Nortel Networks has the right to resell such equipment
or transfer the right-to-use such software and which is sold or licensed to
Customer pursuant to this Agreement.
(r) Services means those services mutually agreed upon to
be provided by Nortel Networks to Customer hereunder. Services shall include all
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Installation services, training, maintenance, repair and replacement services,
warranty services, Acceptance Testing services, project management services and
any other services provided by Nortel Networks to Customer pursuant to this
Agreement. Nortel Networks shall make available to Customer all Services offered
by Nortel Networks or its Affiliates that Nortel Networks makes generally
available to its customers in the Territory;
(s) Software means all computer software licensed by
Customer pursuant to this Agreement which is necessary for the use, operation
and maintenance of a System or item of Equipment so that such System or
Equipment meets, and operates in accordance with, the Specifications, and
includes computer programs contained on a magnetic tape, in a semiconductor
device, or in another memory device or system memory consisting of hardwired
logic instructions which manipulate data in central processors, control
input-output operations, and error diagnostic and recovery routines, and
instruction sequences in machine-readable code that control call processing,
peripheral equipment, and administration and maintenance functions as well as
associated Documentation used to describe, maintain, and use the programs.
Software includes Software Updates and Software Releases. Nortel Networks shall
make available to Customer all Software offered by Nortel Networks or its
Affiliates that Nortel Networks makes generally available to its customers in
the Territory;
(t) Software Releases means the periodic "left of the
decimal point" updates which contain problem fixes, new features and
functionality and/or enhancements for which Customer is granted a right-to-use
pursuant to this Agreement, but shall not include Software Updates;
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(u) Software Updates means the "right of the decimal
point" corrections, updates or enhancements issued by Nortel Networks to add
additional features or functionality to the System or Equipment or to correct
defects in the Software, which defects affect service to subscribers, data
collection as it relates to billing, administration or maintenance. Software
Updates do not include Software Releases;
(v) Specifications means the specifications and
performance standards of a System, Equipment, Software or any portion or
component thereof as set forth in the Documentation or as set forth in any other
document published by Nortel Networks (other than customer brochures or other
marketing materials) which contains technical specifications or performance
standards for Nortel Networks' Equipment, Software or Systems. Specifications
also include any specifications and performance standards delivered to Customer
by Nortel Networks in the future, whether they relate to a System, Equipment or
Software; provided, however, that no future specifications or performance
standards delivered with respect to Equipment or Software for which Purchase
Orders have been accepted hereunder shall reduce, diminish or otherwise
adversely impact the specifications or performance standards that existed at the
time the applicable Purchase Order was delivered by Customer to Nortel Networks
hereunder;
(w) Statement of Work means a document mutually agreed
upon by the parties in conjunction with a Purchase Order which describes the
Services to be performed with respect to such Purchase Order. A Statement of
Work shall include the date on which such Services are to be completed and such
other relevant terms and conditions as the parties may mutually agree upon;
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(x) System means a configuration of Equipment and
Software comprising the complete wireless telecommunications system purchased by
Customer from Nortel Networks hereunder, including the Initial Order and all
Expansions thereto. The term "System" has a developmental element and thus
refers to all configurations of the System at each particular time in its
development from the Initial Order through its final configuration at the end of
the Term;
(y) Territory means the United States of America and all
U.S. territories;
(z) Volume Commitment means the aggregate amount of
Equipment, Software and Services Customer commits to purchase/license during the
Term. The Volume Commitment for the Term of this Agreement shall be ninety
million dollars ($90,000,000). The aggregate amount of Equipment, Software and
Services purchased/licensed by Customer hereunder shall be determined by using
the price paid by Customer to Nortel Networks for such after all applicable
discounts (including volume discounts), reductions or rebates are applied, but
shall not include sales tax or handling, insurance and freight charges.
(aa) Warranty Period means (i) with respect to an item of
Equipment, a period of two (2) years from the applicable ship date of such item
of Equipment and (ii) with respect to an item of Software, a period of two (2)
years from the applicable ship date (or, if Nortel Networks is downloading the
Software directly onto Customer's System, the date such download occurs) of such
Software; provided, however, that with respect to Software Updates only, such
warranty period shall be ninety (90) days from the applicable ship date or
download date;
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1.2 The following terms are defined elsewhere in this Agreement in
the Sections indicated:
TERM SECTION
---- -------
"Acceptance Tests" 6.1
"Customer CTO" 11.4
"Change Order" 16.1
"Disclosing Party" 18.1
"Force Majeure Events" 10.1
"Information" 18.1
"In-Service Date" 1.1
"MDF" 1.1 "Property Rights" 15.1
"PSTN" 1.1
"Receiving Party" 18.1
"Term" 2.10
"Third Party Engineer" 38.4
1.3 Unless the context otherwise requires, the terms defined in
this Article 1 shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
defined herein. When a reference is made in this Agreement to a Section, such
reference shall be to a Section of this Agreement unless otherwise indicated.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the construction, meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The use of any gender herein shall be deemed to include the neuter,
masculine and feminine genders wherever necessary or appropriate.
ARTICLE 2
SCOPE OF AGREEMENT; ORDERS
2.1 Customer hereby agrees to purchase from Nortel Networks, and
Nortel Networks hereby agrees to furnish, deliver, Install, sell and/or license
(on a right-to-use
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basis) to Customer in accordance with the time schedules set forth in the
applicable Purchase Orders (which Purchase Orders have been accepted by Nortel
Networks pursuant to Section 2.9), the Equipment, Software and Services
comprising the Initial Order described in Attachments A and B. The Purchase
Orders for the Initial Order issued by Customer and accepted by Nortel Networks
prior to the date of this Agreement shall be subject to all of the terms and
conditions of this Agreement to the same extent as if such Purchase Orders had
been issued after the date hereof. In addition to the Initial Order, Customer
has the right to purchase from Nortel Networks hereunder, and Nortel Networks
agrees to furnish, deliver, Install, sell and/or license (on a right-to-use
basis) to Customer, such additional Expansions, Equipment, Software and Services
as, when and if ordered by Customer during the Term of this Agreement, and the
terms and conditions of this Agreement shall apply to such purchases.
2.2 If Customer is enrolled in any Nortel Networks electronic
commerce program, Customer agrees to comply with the terms of such program.
Customer and Nortel Networks agree that all electronic Purchase Orders issued
are equivalent to a written Purchase Order, are governed by the terms and
conditions of this Agreement and that in the event of any conflict between this
Agreement and the information contained in Customer's or Nortel Networks'
electronic commerce website, this Agreement governs. Customer shall be
responsible for the use and protection of all electronic commerce passcodes
provided by Nortel Networks and agrees that all Purchase Orders submitted using
such passcodes are valid and binding Purchase Orders authorized by Customer.
Nortel Networks shall have no liability to Customer due to Customer's failure to
access
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Customer's or Nortel Networks' electronic commerce website or errors or failures
relating to its operation.
2.3 Except pursuant to Nortel Networks' repair and replacement
services or as may be mutually agreed to in writing by the parties, all
Equipment and Software provided to Customer hereunder shall be new, and Nortel
Networks shall not sell or deliver to Customer any used or refurbished
Equipment. Customer represents and warrants that it is buying Equipment,
Software and/or Services for its own internal use and not for resale. However,
Customer may resell Equipment after internal use.
2.4 Nortel Networks hereby agrees to provide, as, when and if
ordered by Customer, the Service and Support Plan and other services set forth
in Attachment C.
2.5 This Agreement shall constitute a binding agreement on the
part of Customer to purchase from Nortel Networks the Initial Order described in
Attachments A and B (as such Attachments may be modified from time to time by
Change Orders in accordance with the terms of this Agreement); provided,
however, that the parties acknowledge and agree that the aggregate amount of
base stations and cell sites purchased by Customer pursuant to Purchase Orders
for the Initial Order issued by it to Nortel Networks may vary upwards or
downwards by up to twenty (20%) percent from the amounts set forth in
Attachments A and B. Purchase Orders submitted to Nortel Networks for the
Initial Order and any Expansions shall reference this Agreement and include the
quantity, price, Nortel Networks' quotation number (if any) and billing
instructions, installation location(s), requested delivery dates, requested
commencement dates for Services, the Statement of Work (if any) and any other
special instructions. Where Customer desires the assistance of Nortel Networks
in determining which
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Equipment, Software and/or Services are required for an Expansion to a System,
Customer shall submit to Nortel Networks the information necessary for the
furnishing by Nortel Networks of a proposal. Nortel Networks shall, within
fifteen (15) Business Days thereafter, submit to Customer a proposal including
pricing, lead times and other information as may be requested by Customer. If
such proposal is acceptable to Customer, Customer shall submit to Nortel
Networks a Purchase Order therefor, and Customer and Nortel Networks shall be
responsible for the successful completion of their respective items in
accordance with such proposal. Any such proposal shall contain provisions
relating to the respective responsibilities of Customer and Nortel Networks as
the parties shall mutually agree in writing. If Customer rejects a proposal for
Services submitted by Nortel Networks under this Section 2.5, Customer may elect
to perform such Services itself or to have such Services performed on its behalf
by a subcontractor of Customer and, subject to Section 11.3, the warranties set
forth in this Agreement shall not be affected.
2.6 Unless otherwise mutually agreed to in writing, the prices and
delivery lead times for Equipment, Software and Services ordered pursuant to
Purchase Orders shall be in accordance in all respects with the terms and
conditions of this Agreement (including all Attachments hereto which contain all
discounts, incentives and delivery lead times being offered by Nortel Networks
to Customer).
2.7 The parties may mutually agree upon Statements of Work in
conjunction with Purchase Orders delivered by Customer and accepted by Nortel
Networks in accordance with this Article 2. Each of Nortel Networks and Customer
shall perform their respective responsibilities as set forth in any such
Statements of Work. If any
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Statement of Work fails to set forth any responsibility which is required for a
System or any Equipment or Software to operate in accordance with the
Specifications, the parties undertake to promptly discuss and agree as to which
party shall be responsible for the performance of such responsibilities and the
price, if any, to be paid to Nortel Networks and the time schedules of such
performance. There are no design, engineering, Installation, management or other
fees payable to Nortel Networks for any services to be rendered by Nortel
Networks pursuant to any Statement of Work or this Agreement except for the fees
which are expressly provided for in this Agreement, the applicable Purchase
Order (and Statement of Work, if any) or any applicable Change Orders.
2.8 Delivery locations may be changed by Customer up to thirty
(30) days prior to shipment without additional payment or penalty, unless
otherwise mutually agreed.
2.9 Nortel Networks agrees to confirm receipt of each such
Purchase Order and all Purchase Orders for forecasted Equipment, Software and
Services, as provided in Article 13, that are within Nortel Networks' standard
delivery lead times as set forth in Attachment F, shall automatically be
accepted unless the terms of the Purchase Order do not conform in all material
respects to this Agreement or if the Purchase Order is incomplete in a material
respect; provided, however, that Nortel Networks shall promptly notify Customer
in writing of any non-conforming or incomplete Purchase Order within five (5)
Business Days of receipt thereof. All Purchase Orders shall be sent to Nortel
Networks at the address identified by Nortel Networks. Should Nortel Networks
receive a Purchase Order with lead times that are shorter than Nortel Networks'
standard lead times (and, prior to or contemporaneously with the issuance of
such Purchase Order,
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verbal notification from Customer that such Purchase Order contains such shorter
lead times), Nortel Networks shall promptly indicate in writing (either by
e-mail or fax) to Customer whether such shortened lead times are acceptable. If
Nortel Networks shall deem a shortened lead time unacceptable, the parties
hereto shall endeavor in good faith to agree upon lead times that are mutually
acceptable, but in no case shall such lead times be longer than the standard
lead times existing on the date such Purchase Order was initially received by
Nortel Networks. The agreed upon (or standard) lead times shall be calculated as
commencing upon the date on which Nortel Networks confirms receipt of the
applicable Purchase Order. Should Nortel Networks not notify Customer of its
non-acceptance of a shortened lead time within ten (10) days of its receipt of
the Purchase Order containing the shortened lead time (and so long as Customer
provided Nortel Networks with the proper verbal notification specified in this
Section 2.9), such Purchase Order shall be deemed accepted without amendment and
without any further confirmatory action by either party.
2.10 This Agreement shall be effective as of the Effective Date and
shall terminate on the third anniversary of the Effective Date or on such
earlier date on which this Agreement may be terminated in accordance with its
terms, except as to those provisions which by their express terms survive such
termination. Nortel Networks and Customer shall be bound to fulfill any
obligations in respect of Purchase Orders delivered and accepted hereunder in
accordance with the terms of this Agreement to the extent such obligations have
not been so fulfilled on the termination date of this Agreement. The period from
the Effective Date of this Agreement to the third anniversary thereof or such
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earlier date of termination pursuant to the terms hereof shall be hereinafter
referred to as the "Term."
2.11 With respect to GSM equipment and software purchased for each
of the GSM roamer markets specifically set forth on Attachment H hereto (and not
with respect to any other markets or technology), Customer shall, during the
Term, make Nortel Networks its exclusive supplier for GSM equipment and
software; provided, however, that notwithstanding such exclusivity arrangement,
Customer may purchase from entities other than Nortel Networks any product
(whether equipment or software) having a material functionality or feature which
is not available from Nortel Networks, unless Nortel Networks can provide such
functionality or feature at a comparable price through another reasonable
solution. The exclusivity set forth in this Section 2.11 shall terminate in the
event that Nortel Networks is in breach under any material term of this
Agreement and such breach has not been cured within the time periods set forth
in Section 22.
2.12 With respect to the types of CDMA equipment and software
purchased as part of the Initial Order (and not with respect to any other types
of CDMA equipment and software, including EVDO equipment and software), Customer
shall, during the Term, make Nortel Networks its exclusive supplier for such
equipment and software purchased for each of the new CDMA markets specifically
set forth on Attachment B; provided, however, that notwithstanding such
exclusivity arrangement, Customer may purchase from entities other than Nortel
Networks any product (whether equipment or software) having a material
functionality or feature which is not available from Nortel Networks, unless
Nortel Networks can provide such functionality or feature at a comparable price
through another reasonable solution. The exclusivity set forth in this Section
2.12 shall
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terminate in the event that Nortel Networks is in breach under any material term
of this Agreement and such breach has not been cured within the time periods set
forth in Section 22.
2.13 Customer shall issue Purchase Orders for, and take delivery
of, an aggregate amount of Equipment, Software and Services during the Term
equal to or greater than the Volume Commitment. In the event that at the end of
the Term Customer has failed to issue such Purchase Orders for, and take
delivery of, an aggregate amount of Equipment, Software and Services equal to or
greater than the Volume Commitment, then Customer shall pay liquidated damages
to Nortel Networks in the amount of [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of the portion of the Volume Commitment that remains
unfulfilled at the end of the Term; provided, however, that in no event shall
the amount paid by Customer pursuant to this Section 2.13 exceed [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. Such amount shall
be due and payable within thirty (30) days following the date of Nortel
Networks' invoice therefor, which invoice shall be accompanied by a detailed
list of the Purchase Orders accepted hereunder during the Term and the aggregate
net purchase price associated with each such Purchase Order.
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ARTICLE 3
CONTRACT PRICES
The purchase prices for all Equipment, Software and Services ordered
during the Term shall be (a) the unit prices set forth in Attachments A, B and C
subject to all applicable discounts and incentives set forth therein, or (b) for
Equipment, Software or Services which is not listed in Attachment A, B or C the
price quoted by Nortel Networks; provided, however, that in no case during the
Term shall any prices be greater than the prices made generally made available
by Nortel Networks' to its customers in its then-current price book at the time
of ordering by Customer, less all applicable discounts and incentives set forth
in this Agreement (including Attachments A, B and C) which are applicable to
items in the same category of Equipment, Software or Services.
ARTICLE 4
TERMS OF PAYmENT
4.1 One hundred percent (100%) of the prices for the Equipment and
Software ordered by Customer hereunder shall be due and payable by Customer
within thirty (30) days following invoice therefor, such invoice to be issued by
Nortel Networks to Customer upon shipment of the applicable Equipment and/or
Software; provided, however, that with respect to items of Equipment and
Software which comprise the initial Purchase Order for a New Technology, the
aggregate price of such Equipment and Software shall be paid by Customer as
follows:
(a) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of the aggregate price of all such Equipment and
Software shall be due and payable to Nortel
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Networks within thirty (30) days following invoice therefor, such invoice to be
issued upon shipment of the applicable Equipment and Software; and
(b) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of the aggregate price of all such Equipment and
Software shall be due and payable within thirty (30) days following invoice
therefor, such invoice to be issued upon the Acceptance of such Equipment and
Software.
4.2 The price for the Installation Services ordered by Customer
with respect to items of Equipment and Software being provided as part of the
Initial Order shall be paid by Customer as follows: (a) [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate price for
such Installation shall be due and payable to Nortel Networks within thirty (30)
days following invoice therefor, such invoice to be issued upon shipment of the
applicable Equipment and Software: and (b) [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate price for such Installation
shall be due and payable within thirty (30) days following invoice therefor,
such invoice to be issued upon the Acceptance of the applicable Equipment and
Software.
4.3 Other than as set forth in Section 4.2, [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
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EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the
price of all Services performed by Nortel Networks hereunder shall be due and
payable by Customer within thirty (30) days following invoice therefor, such
invoice to be issued by Nortel Networks to Customer (i) upon completion of the
applicable Services, (ii) monthly with respect to Services that extend beyond a
month, or (iii) in accordance with the mutually agreed upon milestones set forth
in the applicable Statement of Work, if such Statement of Work sets forth such
milestones.
4.4 All transportation charges (including freight and insurance)
from factory to Installation site or other agreed location shall be determined
in accordance with a "Zone Schedule" to be mutually agreed upon by the parties
and attached hereto as Attachment J within thirty (30) days of the Effective
Date. Such "Zone Schedule" shall set forth the transportation charges Customer
shall pay with respect to items of Equipment and Software shipped between one
Zone in the Territory and another Zone in the Territory. Until such time as the
Zone Schedule is agreed upon, Nortel Networks shall charge Customer for
transportation charges at the same rates that Nortel Networks charges its
customers generally. Such transportation charges shall be due and payable by
Customer within thirty (30) days following invoice therefor such invoice to be
issued upon shipment of the applicable Equipment and Software.
4.5 In connection with the payments for Equipment and Software,
Nortel Networks must submit and deliver to Customer original commercial invoices
that include the description of the Equipment and Software and their prices,
duly itemized, which
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prices must correspond to the prices set forth in either Attachment A or B, the
applicable Purchase Order or the applicable price quotation made by Nortel
Networks to Customer.
4.6 All amounts payable under this Agreement which are past due
over thirty (30) days (except to the extent they are being disputed in good
faith) shall bear interest from their due date at the rate of one and one-half
percent (1.5%) per month, or such lesser rate as may be the maximum permissible
rate under applicable law. If Customer notifies Nortel Networks of any disputed
amounts within twenty-one (21) days from the date of the applicable invoice,
such disputed amounts shall not be subject to such interest.
4.7 Customer may pay any invoiced amount, less a discount of
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], if
payment is made by Customer within ten (10) days of its receipt of the
applicable invoice. Such early payment discount shall be applied against the net
invoiced amount (i.e. after all applicable discounts and credits have been
applied).
4.8 In the event that Customer activates Software features for
which additional license fees are applicable, or in the event that Customer
triggers any applicable milestones (such as numbers of subscribers) for which
additional license fees are applicable, then Customer shall have a period of
thirty (30) days from the date of such activation or trigger to make any
applicable payments to Nortel Networks. Nortel Networks shall have the right,
upon at least two (2) Business Days' advance notice to Customer, to conduct a
remote audit of the Software installed on the System in order to determine which
features Customer has activated. Such audit shall be conducted in such
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a manner as to cause no interference with, or degredation of, the performance of
the System and at such time of day as Customer shall designate upon receipt of
the advance notice. Nortel Networks shall have the right to conduct such audit
no more than two (2) times per calendar year.
ARTICLE 5
DELIVERY, TITLE AND RISK OF LOSS
5.1 Subject to (a) any modifications thereto permitted pursuant to
this Article 5, (b) any delays caused solely by Customer by reason of its breach
of its obligations under this Agreement, or (c) any delays excused pursuant to
Article 10, Nortel Networks shall deliver and/or Install all Equipment, Software
and Services in accordance with the terms (including the delivery and/or
Installation dates set forth therein) of the applicable Purchase Order and
Statement of Work (if applicable), or in accordance with the schedule mutually
agreed to between Customer and Nortel Networks with respect to such Equipment,
Software and Services.
5.2 For delivery of Equipment shipped to Customer from outside of
the United States, Nortel Networks shall be responsible for arranging and
prepaying the cost of transportation and insurance pursuant to its delivery
obligations under this Agreement, and Customer shall pay to Nortel Networks the
transportation charges, insurance and freight based on the Zone Schedule
mutually agreed upon by the parties. In the event that Customer desires to
designate its own carrier to perform delivery of Equipment shipped to Customer
from outside of the United States, then Customer shall give at least sixty (60)
days' prior written notice to Nortel Networks of such. From the date designated
in such notice until such time as Customer provides Nortel Networks at least
sixty (60) days' notice that it desires Nortel Networks to resume such
responsibilities (which such
21
resumption of responsibilities shall not occur before the expiration of a six
(6) month period from the date on which Customer's designated carrier began
making deliveries hereunder), Customer shall be responsible for arranging and
paying all transportation charges, insurance and freight and Nortel Networks
shall coordinate with the transportation company designated by Customer for the
pick up of the Equipment. In such case, Customer shall provide its designated
carrier's information to Nortel Networks on each applicable Purchase Order.
5.3 For delivery of Equipment shipped to Customer from within the
United States, Nortel Networks shall be responsible for arranging and paying all
transportation charges, insurance and freight and shall coordinate with its
transportation company for the pick up of the Equipment and delivery to the
installation site or designated warehouse. In the event that Customer desires to
designate its own carrier to perform delivery of Equipment shipped to Customer
from within the United States, then Customer shall give at least sixty (60)
days' prior written notice to Nortel Networks of such. From the date designated
in such notice until such time as Customer provides Nortel Networks at least
sixty (60) days' notice that it desires Nortel Networks to resume such
responsibilities (which such resumption of responsibilities shall not occur
before the expiration of a six (6) month period from the date on which
Customer's designated carrier began making deliveries hereunder), Customer shall
be responsible for arranging and paying all transportation charges, insurance
and freight and Nortel Networks shall coordinate with the transportation company
designated by Customer for the pick up of the Equipment. In such case, Customer
shall provide its designated carrier's information to Nortel Networks on each
applicable Purchase Order.
22
5.4 Intentionally Omitted.
5.5 Title to, and risk of loss for, each item of Equipment shall
pass to Customer upon shipment of such item of Equipment. If there is loss or
damage to the Equipment or Software after risk of loss passes to Customer,
Nortel Networks shall, if ordered by Customer, deliver replacement Equipment or
Software as promptly as practicable and Customer shall pay for the same in
accordance with the terms and conditions of this Agreement, including prices.
Except as provided in Section 5.7, Nortel Networks shall convey good and clear
title to the Equipment, free and clear of all liens, suits, charges, claims,
liabilities, restrictions and encumbrances of any nature or kind whatsoever,
other than any lien or encumbrance which arises solely out of the actions of
Customer, its employees, agents or subcontractors. Nothing in this Article 5
shall, during the period a party has the risk of loss with respect to an item,
relieve the other party of responsibility for loss or damage to such item which
results from the acts or omissions of such other party or such other party's
employees or agents.
5.6 Nortel Networks hereby represents and warrants to Customer
that it has all necessary approvals, authorizations and licenses required for it
to perform all of its duties and obligations hereunder.
5.7 Until receipt of the applicable amounts due from Customer to
Nortel Networks with respect to an item of Equipment or Software sold to
Customer hereunder, Customer grants to Nortel Networks a continuing purchase
money security interest in such item of Equipment sold and/or Software licensed
under this Agreement. Customer shall reasonably cooperate with Nortel Networks
in preserving and protecting such purchase money security interest. Customer
authorizes Nortel Networks to file financing
23
or continuation statements, including amendments thereto, relating to each item
of Equipment and Software without the signature of Customer where permitted by
law.
ARTICLE 6
TESTING AND ACCEPTANCE
6.1 Nortel Networks shall Install (where contracted to do so) all
Equipment and Software to be ready for Acceptance Tests no later than the
scheduled In-Service Date in accordance with the applicable Purchase Order. Upon
completion of Installation of the Equipment and Software or portions thereof,
Nortel Networks shall test the Equipment and Software in accordance with the
Acceptance Test Plan ("Acceptance Tests") attached as part of the applicable
Statement of Work.
6.2 Acceptance Tests will be conducted on the Equipment and
Software to demonstrate that each item of Equipment and Software comprising a
part of the System, as Installed, will operate in accordance with the
Specifications.
6.3 Nortel Networks shall notify Customer at least five (5) days
before the date on which the Acceptance Tests shall be conducted. If Customer or
its representative does not attend the Acceptance Tests, Nortel Networks shall
proceed with the tests and immediately forward the test results (including
actual test sequences, deviations, and retests necessary to obtain successful
conclusion) to Customer. If Customer or its representative (which representative
shall be bound by all confidentiality requirements applicable to Customer)
attends the Acceptance Tests, Nortel Networks and Customer or its representative
shall jointly conduct the Acceptance Tests and shall each sign the form provided
as part of the test procedure. If the Equipment or Software does not fulfill all
of the requirements of the applicable Acceptance Tests and such failure is a
result of any breach of any provision or obligation of Nortel Networks under
this Agreement or is
24
caused by any item of Equipment or Software, or any Service, provided by Nortel
Networks, Nortel Networks shall, at its sole expense, correct the defects as
soon as practicable. The Acceptance Tests (or so much of them as necessary)
shall be recommenced immediately after such correction in accordance with this
Section 6.3. Upon successful completion of the applicable Acceptance Tests,
Nortel Networks shall submit to Customer written notice thereof along with
Acceptance forms certifying all of the test results and stating that all of the
applicable Equipment and/or Software has been Accepted in accordance with all of
the requirements of this Agreement and that the same performs in accordance with
the Specifications. Customer shall sign or reject such Acceptance forms within
five (5) Business Days of receipt thereof to signify that the Equipment and/or
Software is Accepted or is not Accepted. In the absence of a notice of rejection
given in good faith within such five (5) Business Day period, such Equipment
and/or Software shall be deemed Accepted. Any notice of rejection shall be given
in writing to Nortel Networks' project manager. If there is a dispute as to
whether the Equipment and/or Software has passed the applicable Acceptance
Tests, the parties shall use reasonable best efforts (which shall include
escalation of such dispute to a senior management level) to resolve the dispute
as soon as practicable or it shall be submitted to the Third Party Engineer
pursuant to Article 38.
6.4 Customer shall not unreasonably withhold Acceptance. Minor
deficiencies recorded in the test results or minor shortages which would not
affect service to subscribers, data collection regarding billing,
administration, maintenance or the commercial operation of the Equipment,
Software or the System or create a safety hazard for personnel shall not
postpone the issuance of Acceptance forms pursuant to this Article
25
6, but Nortel Networks shall remain obligated to perform in the manner described
in this Agreement.
ARTICLE 7
DELAY AND PENALTIES
7.1 If due to the fault or negligence (regardless of the severity
level of negligence) of Nortel Networks, (a) Acceptance (with respect to items
of Equipment and Software for which Nortel Networks is performing Installation)
or delivery (with respect to Furnish Only items of Equipment and Software for
which Nortel Networks is responsible for transportation) does not occur with
respect to any of the items comprising the September 30, 2003 portion of the
Initial Order (designated as the Phase I items in Attachment D) or the December
31, 2003 portion of the Initial Order (designated as the Phase II items in
Attachment D)(collectively, "Critical Items") on the scheduled date for
Acceptance or delivery (as applicable) thereof as set forth in Attachment D (as
such date may be amended by Change Orders pursuant to the terms of this
Agreement), then Customer shall be entitled to, and Nortel Networks shall pay to
Customer, liquidated damages in accordance with Section 7.2; provided, however
that such liquidated damages shall only accrue during such delay of Acceptance
or delivery, and shall not be payable to Customer unless, due to the fault or
negligence (regardless of the severity level of negligence) of Nortel Networks
the Critical Items have not been Accepted and placed In-Service on or before
September 30, 2003 or December 31, 2003, as applicable, at which time all of the
accrued but unpaid liquidated damages payable by Seller to Customer under this
Article 7 shall be immediately due and payable.
7.2 (a) The parties agree that damages for delay are
difficult to calculate accurately and therefore agree to fix, as liquidated
damages (and not as a penalty), an
26
amount equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] per week of delay up to a cumulative maximum amount of [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate
net purchase price (calculated in accordance with Attachment A or the applicable
Purchase Order, and including Installation costs, if applicable, but not
including the Executive Discount described in Attachment A) of those items of
Equipment and/or software which were delayed. In the event that the delay of
Acceptance or delivery (as applicable) of a Critical Item, prevents or
materially affects the operation of other items of Equipment or Software which
are part of the Initial Order, then Customer's right to receive liquidated
damages shall apply to such other Equipment and Software as well.
(b) Liquidated damages will be provided to Customer as
credits towards the future purchase of GSM, TDMA and CDMA Equipment and Software
("Product Credits") which may be applied to up to twenty-five percent (25%) of
any future Purchase Orders for Equipment or Software until such Product Credits
have been used in full. Any such Product Credits must be utilized during the
Term.
(c) Customer will inform Nortel Networks of the
imposition of the liquidated damages in writing. Within thirty (30) calendar
days following the date on which Nortel Networks is so informed, Nortel Networks
shall be obligated to issue to Customer Product Credits in the amount of such
liquidated damages except to the extent
27
they have been contested in good faith by Nortel Networks within such thirty
(30) day period.
7.3 It is expressly agreed that the liquidated damages provided in
this Article 7 and their payment do not extinguish or relieve the performance of
any of the obligations Nortel Networks is required to perform hereunder, which
obligations shall continue in full force and effect until fully performed in
accordance with the terms hereof. Liquidated damages under this Article 7 shall
be Customer's exclusive remedy for delay by Nortel Networks in delivery or
Acceptance, as applicable, of the Critical Items.
7.4 In the event that there are any delays in the performance by
Nortel Networks under this Agreement (whether or not such delays will result in
liquidated damages under this Article 7) then, upon notification by Customer of
such delays, Nortel Networks shall use commercially reasonable efforts to assign
additional personnel, reallocate resources, expedite deliveries and take such
other actions as may be required to eliminate such delay.
ARTICLE 8
TRAINING
Nortel Networks will provide training to Customer's personnel
within the Territory in the operation and maintenance of the Equipment as set
forth in Attachment E.
ARTICLE 9
DOCUMENTATION
Nortel Networks will furnish Customer, at no additional cost to
Customer, one CD-ROM copy of all Documentation required by Customer for the
Equipment, Software and Services purchased hereunder. In addition, such
Documentation shall be available to Customer in web based format. Nortel
Networks represents that the Documentation, in
28
conjunction with any applicable training, is all that is reasonably necessary
for Customer to use, maintain and operate the Equipment, Software and System
purchased by Customer pursuant to this Agreement.
ARTICLE 10
FORCE MAJEURE
10.1 Unless preventable by the timely and proper performance of
their respective obligations under this Agreement, neither Nortel Networks nor
Customer will be liable for non-performance or defective or late performance of
any of their obligations hereunder to the extent and for such periods of time as
such non-performance, defective performance or late performance is attributable
to acts of God, war (declared or undeclared), unforeseeable acts (including
failure to act) of any governmental authority (de jure or de facto), riots,
revolutions, fire, floods, explosions, sabotage, nuclear incidents, earthquakes,
hurricanes, sinkholes, epidemics, strikes, delays of suppliers or subcontractors
for the same causes if no equivalent sources for such supplies or services are
readily available, or other similar causes beyond the reasonable control of a
party (collectively, "Force Majeure Events").
10.2 In the event that either of the parties wishes to claim
excusable delay by reason of a Force Majeure Event, it shall state it in writing
to the other party within five (5) Business Days (or such longer period as may
be reasonable as a result of the Force Majeure Event) following the date on
which its occurrence was known, accompanied by reasonable evidence of the Force
Majeure Event and a statement of the impact such Force Majeure Event has had or
is expected to have upon such party and its ability to perform its obligations
hereunder.
29
10.3 If the Force Majeure Event continues for more than thirty (30)
consecutive days, or it is proven that it will continue for more than such
thirty (30) day period, the parties shall upon written request of either party
meet to try to determine an appropriate action, remedy or solution to the
problems caused by such delay.
ARTICLE 11
WARRANTIES, REMEDIES: LIMITATIONS: DISCLAIMERS
11.1 (a) Nortel Networks warrants that during the applicable
Warranty Period the Equipment, excluding Reseller Items, furnished under this
Agreement shall be free from defects in materials and workmanship, and shall
meet all of the functional and performance criteria (including the interworking
of all Nortel Networks supplied Equipment and Software) set out in and otherwise
conform to all of the applicable portions of the Specifications, and that all of
the Services furnished by Nortel Networks under this Agreement shall be
performed with due care and skill in a professional and workmanlike manner. Any
and all claims for breach of this warranty are conclusively deemed waived unless
made in writing (or orally with prompt confirmation in writing) during the
appropriate Warranty Period. Where Equipment or any part thereof is repaired or
replaced under the warranties contained herein, the repaired or replaced item
shall be warranted for the balance of the original Warranty Period or a period
of ninety (90) days from the date of repair or replacement whichever is longer.
Except as provided in the preceding sentence, performance of Nortel Networks'
warranty obligations shall not extend the Warranty Period.
(b) If defects in materials or workmanship or
nonconformity with the performance Specifications appear within the Warranty
Period, Nortel Networks' sole obligation and Customer's exclusive remedy under
this warranty are limited to the
30
prompt replacement or repair, at Nortel Networks' option and own expense, of the
defective components of the Equipment, or the correction of the faulty Services
furnished by Nortel Networks hereunder. Such repair or replacement includes
materials, labor and services. In the event Nortel Networks is unable to correct
faulty Services, the sole remedy of Customer shall be to recover the applicable
portion of the compensation paid to Nortel Networks for such Services. Customer
shall bear the risk of loss and damage and all transportation costs for
defective Equipment shipped to Nortel Networks and Nortel Networks shall bear
the risk of loss and damage and all transportation costs for replacement
Equipment shipped to Customer. Good title to defective or replacement Equipment
shall pass to Nortel Networks or Customer, as appropriate, upon receipt thereof.
11.2 Nortel Networks warrants that, provided the Software is not
altered by Customer, and provided the Software is used in conjunction with
Equipment purchased under this Agreement and such Equipment has been maintained
and utilized in accordance with Nortel Networks' recommended maintenance
procedures (as set forth in the Documentation) and the Software license set
forth in Attachment G hereof, the Software, excluding Reseller Items, shall
function during the Warranty Period in all material respects in accordance with
all of Nortel Networks' Specifications for the Software. In the event the
Software fails to so perform or conform, Customer's exclusive remedy under this
warranty shall be to require Nortel Networks to promptly correct such failure
and such remedy is conditioned upon Nortel Networks' receiving written notice
within the Warranty Period (or oral notice promptly confirmed in writing) of
such failure. The correction of any Software failures shall not extend the
Software Warranty Period.
31
11.3 Nortel Networks' obligations under this Article 11 shall not
apply to (i) Equipment or components thereof such as fuses and bulbs that are
normally consumed in operation, or have a normal life inherently shorter than
the Warranty Period; (ii) defects that are solely attributable to improper
storage, installation, use, maintenance or repair by Customer (including
operation of the Equipment outside the environmental parameters defined in the
Specifications); (iii) improper operation of Equipment with hardware not
authorized by Nortel Networks (or reasonably contemplated by Nortel Networks) to
be used with such Equipment, or use of the Equipment with any improperly
operating hardware or equipment, if such defect is caused by such hardware or
such improperly operating hardware or equipment; (iv) Equipment or components
thereof that, due to no fault of Nortel Networks, 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 has otherwise been damaged for any
reason not attributable to Nortel Networks, or (v) any defects attributable
solely to the improper alteration, repair, installation or relocation by any
party other than Nortel Networks or Nortel Networks' agents. For purposes of
clause (v) above Equipment shall not be deemed to have been "installed" by
another party if all that has been done to such Equipment is the routine plug-in
of the components in accordance with the Northern Telecom Practices and
Procedures guidelines.
11.4 (a) (i) If, during the Warranty Period set forth in
Section 11.1, Customer experiences failures of electronic circuit board
components, RBS subassemblies or other Equipment (which other Equipment may be
deinstalled and reinstalled by Customer in the ordinary course of business)
which the Chief Technical Officer of Customer (hereinafter the "Customer CTO")
reasonably believes to be
32
excessive, (1) the Customer CTO shall bring such failures to the attention of
Nortel Networks by giving written notice to Nortel Networks under Section 35.1
hereof, (2) both Customer and Nortel Networks shall, without undue delay,
investigate the cause of such failures, and (3) where, within a reasonable
period not to exceed one (1) week, it cannot be clearly determined that the
cause of such failure is properly attributable to Customer, Nortel Networks
shall, without charge to Customer, supply to Customer additional spare boards,
subassemblies or such other Equipment of each type so depleted, as necessary to
maintain an adequate emergency replacement stock, until implementation of a
permanent remedy.
(ii) Upon implementation of a permanent remedy,
all excess boards, subassemblies or other Equipment supplied by Nortel Networks
to Customer under Section 11.4(a)(i) shall be returned to Nortel Networks, and
all in-service and spare stock boards, subassemblies and other equipment which
are the subject of the corrections contemplated by this Section 11.4(a)(ii)
shall be either, at the option of Nortel Networks, promptly repaired or replaced
at no charge to Customer, in accordance with an agreed schedule.
(b) If, during the Warranty Period set forth in Section
11.1, Customer experiences failures of Equipment (other than electronic circuit
board components, RBS subassemblies or other Equipment which may be deinstalled
and reinstalled by Customer in the ordinary course of business), which Customer
CTO reasonably believes to be excessive, Nortel Networks shall give priority to
the remedy of the cause of the failures (and in accordance with the response,
workaround and cure times set forth in Attachment C). During the period prior to
the implementation of a permanent remedy, Nortel
33
Networks agrees to negotiate in good faith for adjustments in warranties and
freight payments commensurate with the effect upon Customer caused by such
failures and to make adjustments as are mutually agreed upon by Customer and
Nortel Networks.
11.5 In no event shall Nortel Networks be required to provide
support for any version of Software that is (a) with respect to Software
supporting GSM, CDMA or TDMA technology, more than two (2) versions behind the
then current version of Software that Nortel Networks is generally offering to
its customers and (b) with respect to Software supporting any other technology,
more than one (1) version behind the then current version of Software that
Nortel Networks is generally offering to its customers.
11.6 If any Equipment or Software is rendered inoperative as a
result of a natural or other disaster, Nortel Networks will make all reasonable
efforts to promptly supply or help locate backup or replacement Equipment or
Software for Customer, by using reasonable efforts to waive any delivery
schedule priorities and to make replacement Equipment or Software available from
the facility then producing such products, or from inventory.
11.7 Nortel Networks response times, workaround times and cure
periods for all warranty related repairs for the System, Equipment and Software
are set forth in Attachment C hereto. Such times are based upon the severity
level of the applicable defect, as set forth therein.
11.8 It is the intention of the parties that any defects in
materials or workmanship or nonconformity with the performance Specifications in
the System, Equipment or Software shall be corrected as promptly as practicable
regardless of fault, and in this regard, Nortel Networks agrees to use
commercially reasonable efforts to
34
work with and cooperate with Customer and any other manufacturer, vendor or
contractor to correct any such defect or nonconformity to the extent that Nortel
Networks has the capacity to do so. Nortel Networks shall, at Customer's
request, provide reasonable assistance to Customer in determining the cause of
such defect or nonconformity and recommend the appropriate action. Nortel
Networks shall, upon its receipt of a request for assistance hereunder from
Customer, use commercially reasonable efforts to correct any such defect or
nonconformity in a System, item of Equipment or Software or any other equipment
or software (whether or not such defect or nonconformity is the responsibility
of Nortel Networks) as promptly as practicable and xxxx Customer for such. If
Customer and Nortel Networks disagree as to the cause of the defect or
nonconformity or the action to be taken, then, at Customer's written request,
Nortel Networks shall nevertheless correct such defect or nonconformity (whether
or not such defect or nonconformity is the responsibility of Nortel Networks) as
promptly as practicable and generate a xxxx to Customer for such. The parties
shall thereafter negotiate in good faith to determine the party responsible for
such defect or nonconformity, and if they are unable to resolve such dispute,
such dispute shall be submitted to a Third Party Engineer in accordance with
Article 38. Nothing contained in this Section 11.8 shall require Nortel Networks
to repair or modify any equipment purchased by Customer from any third party
unless Nortel Networks has the ability to do so.
11.9 Subject to Section 11.3, Customer may at any time acquire
equipment and software from a source other than Nortel Networks, and such
equipment and software
35
may be interconnected with the Equipment and Software without affecting the
warranties contained in this Article 11.
11.10 With respect to Reseller Items, in lieu of the warranties set
forth herein Reseller Items shall have the warranties given to Nortel Networks
by the third parties supplying such Reseller Items to Nortel Networks and such
warranties shall inure, to the extent applicable or permitted, to the benefit of
Customer, and Customer shall have the right to enforce such warranties directly
with the third party providing the applicable Reseller Item to Nortel Networks
or, if Customer is not permitted to enforce such warranty directly through
Nortel Networks.
11.11 THE WARRANTIES AND REMEDIES SET FORTH IN THIS ARTICLE 11
CONSTITUTE THE ONLY WARRANTIES (OTHER THAN THE WARRANTIES AS TO TITLE CONTAINED
IN SECTION 5.5) WITH RESPECT TO THE EQUIPMENT, SOFTWARE AND SERVICES PROVIDED BY
NORTEL NETWORKS PURSUANT TO THIS AGREEMENT, AND CUSTOMER'S EXCLUSIVE REMEDIES IN
THE EVENT SUCH WARRANTIES ARE BREACHED. THEY ARE IN LIEU OF ALL OTHER WARRANTIES
WRITTEN OR ORAL, STATUTORY, EXPRESSED OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
THE WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.
ARTICLE 12
INDEMNIFICATION; LIMITATION OF LIABILITY
12.1 Subject to Section 12.5, Nortel Networks shall be responsible
for and agrees to indemnify and hold harmless Customer and its Affiliates,
officers, employees and subcontractors (each, a "Customer Indemnified Party" and
collectively the
36
"Customer Indemnified Parties") from, and shall defend the Customer Indemnified
Parties against, all third party losses, claims, demands, damages and causes of
action (including reasonable legal fees and expenses) relating to bodily injury
to persons, including death, or loss or damage to tangible property which was
caused by any negligence or willful misconduct of Nortel Networks or its
Affiliates, officers, agents, representatives, employees, suppliers or
subcontractors in the course of the performance of Nortel Networks' obligations
pursuant to this Agreement. Nortel Networks will defend, at its own expense,
including reasonable attorneys' fees, any Regulatory Claim brought against
Customer (other than those resulting or arising out of the use of Reseller Items
supplied hereunder) and shall pay all fines or penalties that may be assessed or
levied by the applicable governmental authority for noncompliance with respect
to such Regulatory Claim or as are agreed to by Nortel Networks in settlement of
such Regulatory Claim. All such losses, claims, demands, and damages, or fines
or penalties shall be paid directly by Nortel Networks. Notwithstanding anything
to the contrary contained in this Agreement, the Customer Indemnified Parties
shall have the right, in their sole discretion, to implead, interplead or
otherwise cause Nortel Networks to be added as a party to any action or
proceeding brought against a Customer Indemnified Party relating to any matter
or thing for which such Customer Indemnified Party is entitled to
indemnification pursuant to this Section 12.1 and, if in any such proceeding
Nortel Networks is found to be liable, Nortel Networks shall be responsible for
all liabilities and damages assessed against it in any such proceeding or
action.
12.2 Subject to Section 12.5, Customer shall be responsible for and
agrees to indemnify and hold harmless Nortel Networks and its Affiliates,
officers, employees and
37
subcontractors (each, a "Nortel Indemnified Party" and collectively, the
"Nortel Indemnified Parties) from, and shall defend the Nortel Indemnified
Parties against, all third party losses, claims, demands, damages and causes of
action (including reasonable legal fees and expenses) relating to bodily injury
to persons, including death, or loss or damage to tangible property which was
caused by any negligence or willful misconduct of Customer or its Affiliates,
officers, agents, employees, representatives or its subcontractors in the course
of the performance of Customer's obligations pursuant to this Agreement. All
such losses, claims, demands, and damages shall be paid directly by Customer.
Notwithstanding anything to the contrary contained in this Agreement, the Nortel
Indemnified Parties shall have the right, in their sole discretion, to implead,
interplead or otherwise cause Customer to be added as a party to any action or
proceeding brought against a Nortel Indemnified Party relating to any matter or
thing for which such Nortel Indemnified Party is entitled to indemnification
pursuant to this Section 12.2 and, if in any such proceeding Customer is found
to be liable, Customer shall be responsible for all liabilities and damages
assessed against it in any such proceeding or action.
12.3 With respect to the indemnification provided by either
Customer or Nortel Networks in accordance with Sections 12.1 and 12.2 above, the
Customer Indemnified Party and the Nortel Indemnified Party, as applicable,
shall (a) give Customer or Nortel Networks, as applicable, prompt written notice
of any such loss, claim, demand, damage or cause of action or Regulatory Claim;
provided, however, that a failure to give such prompt notice shall not affect
the indemnification to be provided hereunder except to the extent that Customer
or Nortel Networks, as applicable, shall have been actually prejudiced as a
result of such failure, (b) allow Customer or Nortel, as applicable, to
38
control the defense and all related settlement negotiations; provided, however,
that Customer shall be entitled to control of the defense or settlement of any
Regulatory Claim with respect to matters that do not involve monetary damages
(with reasonable participation by Nortel Networks, at its own cost and expense),
and shall have the right to settle or compromise any Regulatory Claim to the
extent that it involves anything other than money damages without the prior
consent of Nortel Networks, and (c) reasonably cooperate with Customer or Nortel
Networks, as applicable, in such defense and any related settlement
negotiations; provided however, that the applicable Customer Indemnified Party
or Nortel Indemnified Party shall be reimbursed by Customer or Nortel Networks,
as applicable, for its actual, reasonable, out-of-pocket costs for such
reasonable cooperation.
12.4 Except as provided in, or for liabilities arising under,
Articles 7, 15 and 19 and Section 12.1 with respect to bodily injury and damage
to tangible property, or for claims regarding title to Equipment or Software,
the total liability of Nortel Networks under this Agreement, including its
Affiliates, officers, employees, agents, representatives, shareholders,
subcontractors or suppliers, for claims of any kind for any loss or damage,
whether in contract, warranty, indemnification, tort (including negligence),
strict liability or otherwise, arising out of or connected with, or resulting
from the performance or non-performance of this Agreement shall not (i) in
respect of any loss or damage to Customer's tangible property exceed
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] per event
or series of related events, and (ii) in
39
respect of all other losses or damage exceed in the aggregate [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
12.5 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, BUT SUBJECT TO LIQUIDATED DAMAGES EXPRESSLY PROVIDED FOR IN ARTICLE
7, IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, INDEMNIFICATION,
WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, SHALL
NORTEL NETWORKS OR CUSTOMER BE LIABLE TO THE OTHER FOR (A) DAMAGES BASED ON ANY
THIRD PARTY CLAIM, EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 12.1 AND 12.2 AND
ARTICLE 15 OR THIRD PARTY CLAIMS WHICH ARE STRICT LIABILITY BY OPERATION OF LAW,
(B) LOSS OF, OR DAMAGE TO, THE OTHER PARTY'S RECORDS, FILES OR DATA, OR (C) ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES OF ANY NATURE
WHATSOEVER OR LOSS OF PROFITS OR REVENUES OF SUCH OTHER PARTY BEFORE OR AFTER
ACCEPTANCE. THE LIMITATIONS SET FORTH IN THIS SECTION 12.5 SHALL NOT BE
APPLICABLE TO A BREACH BY EITHER PARTY OF ITS OBLIGATIONS UNDER ARTICLE 18 OR
CUSTOMER'S BREACH OF THE SOFTWARE RIGHT-TO-USE SET FORTH IN ATTACHMENT G. THE
LIMITATIONS SET FORTH IN THIS SECTION 12.5 SHALL ALSO NOT BE APPLICABLE IN THE
EVENT NORTEL NETWORKS BREACHES ARTICLE 15 TO THE EXTENT THAT, IF A
40
COURT OF COMPETENT JURISDICTION ENJOINS CUSTOMER FROM USING EQUIPMENT AND/OR
SOFTWARE THAT IS THE SUBJECT OF A CLAIM UNDER ARTICLE 15, NORTEL NETWORKS SHALL
BE LIABLE TO CUSTOMER FOR THE LOST PROFITS ASSOCIATED WITH THE REVENUE (OR, IF
CUSTOMER IS NOT PROFITABLE, [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] OF SUCH REVENUE) THAT CUSTOMER WOULD HAVE RECEIVED FROM
THE PROVISION OF ITS TELECOMMUNICATIONS SERVICES TO ITS CUSTOMERS IF SUCH
INJUNCTION HAD NOT OCCURRED, WITH NORTEL NETWORKS' TOTAL LIABILITY UNDER THIS
AGREEMENT FOR LOST PROFITS (OR REVENUE, AS APPLICABLE) AS PROVIDED FOR IN THIS
SENTENCE NOT TO EXCEED IN THE AGGREGATE [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]. SUCH [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] CAP SHALL NOT BE APPLICABLE IN ANY WAY TO NORTEL
NETWORKS' INDEMNIFICATION REQUIREMENTS UNDER ARTICLE 15 HEREOF, INCLUDING ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES OF ANY NATURE
WHATSOEVER OR LOSS OF PROFITS OR REVENUES (WHICH ARE AWARDED BY FINAL COURT
41
JUDGMENT OR DECREE, OR AGREED UPON BY NORTEL NETWORKS IN SETTLEMENT OF ANY
APPLICABLE PROPERTY RIGHTS SUIT OR CLAIM) OF ANY THIRD PARTY MAKING A PROPERTY
RIGHTS CLAIM THEREUNDER.
ARTICLE 13
FORECAST
Customer shall, at least fifteen (15) days prior to the start of each
calendar quarter, submit to Nortel Networks a good faith, consolidated,
non-binding forecast of the applicable items that Customer anticipates
purchasing or licensing over the next six (6) months. In addition to the type,
quantity and cumulative dollar amounts, the parties shall mutually agree upon
additional information to be included in such forecast.
ARTICLE 14
SERVICE AND SUPPORT PLAN
Nortel Networks shall make available to Customer, as, when and if
ordered by Customer, for a period of three (3) years after expiration of the
Term, a Service and Support Plan. The terms of the Service and Support Plan
during the Term are attached hereto as Attachment C. The terms of the Service
and Support Plan for the three (3) year period after the expiration of the Term
shall be no less favorable to Customer than the terms of the Service and Support
Plans made generally available to Nortel Networks' customers at such time. The
prices for the Service and Support Plan during the Term are set forth in
Attachment C and are no less favorable to Customer than Nortel Networks' current
standard rates.
ARTICLE 15
PATENT INDEMNITY
15.1 Nortel Networks will defend, at its own expense, all suits and
claims made or brought by a third party against Customer and/or its Affiliates,
wherever such suit or
42
claim is commenced or asserted, for infringement or violation of any patent,
trademark, copyright, trade secret, or other tangible or intangible property
rights of any kind whatsoever (collectively, "Property Rights") of such third
party, covering, or alleged to cover, the Equipment, Software, or the System or
any component thereof, excluding Reseller Items, or the use thereof in the
Territory, in the form furnished or as subsequently modified by Nortel Networks
(and not modified by Customer or any other person without the written consent of
Nortel Networks), and Nortel Networks will pay all sums, including attorneys'
fees and expenses and other costs which, by final judgment or decree, or in
settlement of any such suit or claim, may be assessed against Customer or its
Affiliates on account of such infringement or violation, provided (a) Nortel
Networks shall be given prompt written notice of all claims of any such
infringement or violation and of any suits or claims brought or threatened
against Customer or its Affiliates of which Customer or such Affiliate has
express knowledge; provided that a failure to give such prompt notice shall not
affect the indemnification to be provided hereunder except to the extent that
Nortel Networks shall have been actually prejudiced as a result of such failure;
(b) Nortel Networks shall be given full authority to assume the sole defense
thereof through its own counsel at its own cost and expense and to compromise or
settle any suits or claims so far as this may be done without prejudice to the
right of Customer to continue the use, as contemplated, of the Equipment,
Software or the System or any component thereof so furnished, subject to Section
15.2; (c) Customer shall cooperate fully with Nortel Networks in the defense of
such suit or claims and provide Nortel Networks such assistance as Nortel
Networks may reasonably require in connection therewith; provided, however, that
Customer shall be reimbursed by Nortel Networks for
43
its actual, reasonable, out-of-pocket costs for such reasonable cooperation; and
(d) use of such Equipment, Software, System or component was at all times within
the Territory.
15.2 If in any such suit so defended all or any part of the
Equipment, Software, or the System or any component thereof is held to
constitute an infringement or violation of any third party's Property Rights, or
if in respect of any claim of infringement or violation Nortel Networks deems it
advisable to do so, Nortel Networks shall, at its sole option and expense, use
its commercially reasonable best efforts to take one or more of the following
actions: (a) procure the right for Customer to continue the use of the same
without interruption, (b) replace the same with non-infringing Equipment or
Software or components (which Equipment, Software or components shall be
equivalent as to form, fit and function) with as minimal interruption of use as
is practicable (and any such interruption shall not be during Customer's peak
hours) provided that such replacement shall not adversely impair the System,
Equipment or Software from performing in accordance with all material
performance Specifications, or (c) modify such Equipment or Software or
component so as to be non-infringing Equipment or Software or components with as
minimal interruption of use as is practicable (and any such interruption shall
not be during Customer's peak hours) provided that the modified non-infringing
Equipment or Software or components shall not adversely impair the System,
Equipment or Software from performing in accordance with all material
performance Specifications. In the event that, despite Nortel Networks'
commercially reasonable best efforts, none of subsections (a), (b) or (c) can be
performed by it, then Nortel Networks shall have the right to take back the
infringing item(s) and give Customer a credit equal to Customer's net aggregate
purchase price for such item(s), if such return occurs during the
44
Term and, commencing upon the first day after the expiration of the Term, less
depreciation of twenty (20%) percent of such purchase price for each year of use
thereof after expiration of the Term. To the extent that the return of any such
infringing item in accordance with the previous sentence prevents or adversely
impairs Customer's use or operation of other items of Equipment or Software,
Customer's right to receive a credit shall apply to the net aggregate purchase
price of such other items, less depreciation, if applicable, as well.
15.3 The indemnity provided in this Article 15 shall not extend to
infringement of Property Rights to the extent that such infringement arises from
(a) modifications made to Equipment or Software by Nortel Networks in order to
adhere to special Equipment or Software design requests, specifications or
instructions of Customer but only if such alleged infringement would not have
resulted from Nortel Networks' design prior to Customer's requested
modification, (b) use of the Equipment, Software or System or any component
thereof in a manner or for a purpose not stated in the Specifications or in a
manner or for a purpose not reasonably contemplated by Nortel, (c) use of the
Equipment, Software or System in combination with any other equipment or
software not supplied by Nortel Networks hereunder, (d) the incorporation of
components not manufactured or provided by Nortel Networks into the Equipment or
Software, (e) Customer originated modifications to the Equipment or Software
(unless expressly permitted by Nortel Networks in writing), or (f) Customer's
failure to install or have installed changes, revisions or updates required to
be installed by Nortel Networks in order to prevent such infringement.
45
15.4 Nortel Networks' Property Rights indemnification
responsibilities under this Article 15 shall not be applicable to Reseller Items
provided to Customer pursuant to this Agreement. With respect to Reseller Items,
any Property Rights indemnification provided to Nortel Networks by the third
party vendor supplying the applicable Reseller Item shall inure, to the extent
applicable or permitted, to the benefit of Customer, and Customer shall have the
right to enforce such indemnification directly with the third party providing
the applicable Reseller Item to Nortel Networks (or, if Customer is not
permitted to enforce such indemnification directly, Nortel Networks shall
enforce such indemnification on behalf of Customer).
15.5 The preceding represents Customer's sole and exclusive remedy
regarding any claim of infringement or violation of Property Rights.
ARTICLE 16
CHANGE ORDERS; ORDER CANCELLATION
16.1 The terms and conditions of any Purchase Order, including the
provisions of the applicable Statement of Work, may be amended by mutually
agreed Change Orders ("Change Orders"). Each Change Order must be in writing,
must identify the changes to be made and must be signed by the duly authorized
representatives of each of Nortel Networks and Customer.
16.2 Unless otherwise expressly agreed in a written document signed
by both parties hereto, any Purchase Order, acknowledgment form or other form
issued by Customer or Nortel Networks containing terms and conditions of sale
shall not have the effect of modifying the terms and conditions of this
Agreement, notwithstanding any act of Customer and payment therefor, and all
deliveries and Installation of goods and
46
performance of services by Nortel Networks shall be deemed to be only upon the
terms and conditions of this Agreement.
16.3 Customer, upon at least twenty-one (21) days prior notice to
Nortel Networks, may issue "holds" on Purchase Orders or suspend performance
under this Agreement, in whole or in part, at no additional cost to Customer
except as otherwise provided in this Section 16.3. If Customer issues a hold or
suspends performance for a period longer than ten (10) Business Days, Customer
will compensate Nortel Networks for any actual, reasonable, out-of-pocket costs
incurred by Nortel Networks due to such hold or suspension after such ten (10)
Business Day period. If any Purchase Order is placed on hold or is suspended for
a period of ninety (90) days or greater, it shall be deemed automatically
cancelled and shall be subject to the payment of any cancellation fees as set
forth below. In the event that Customer suspends performance, Customer and
Nortel Networks will mutually agree on a date to reconvene such performance or
if Customer does not elect to reconvene such performance, Nortel Networks shall
invoice Customer for Services actually performed and Customer shall pay such
invoice in accordance with Article 4.
16.4 Customer may cancel any Purchase Order or portion thereof
prior to the shipment of the items comprising such Purchase Order or portion
thereof. No cancellation fee shall be payable by Customer with respect to
Purchase Orders for CDMA, TDMA, AMPS and GSM Software. With respect to the
cancellation of Purchase Orders for Equipment that has been engineered or
customized by Nortel Networks specifically for Customer's use or operation,
Customer shall pay Nortel Networks a cancellation fee based upon the number of
days prior to the scheduled shipping date that
47
Nortel Networks receives the cancellation notice from Customer. Such
cancellation fee shall be in accordance with the following table:
==============================================================================================
Percentage of Aggregate Price to be Paid as
Date of Cancellation Notice Cancellation Fee
----------------------------------------------------------------------------------------------
29 days to 1 day prior to shipment [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
59 days to 30 days prior to shipment [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
90 days to 60 days prior to shipment [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
----------------------------------------------------------------------------------------------
91 days or greater prior to shipment [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
==============================================================================================
48
----------------------------------------------------------------------------------------------
WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
==============================================================================================
Purchase Orders for Equipment which is not engineered or customized by
Nortel Networks specifically for Customer's use or operation (including
non-engineered BTS' and cell sites) may be cancelled at no cost to Customer.
Notwithstanding anything to the contrary contained in this Article 16,
Purchase Orders issued with respect to the Initial Order shall be firm and
non-cancelable under this Article 16. Any cancellation fees due to Nortel
Networks pursuant to this Section 16.4 shall be invoiced by Nortel Networks to
Customer upon receipt by Nortel Networks of the applicable cancellation notice.
The payment by Customer of such cancellation fees as described in this Section
16.4 shall be Nortel Networks' sole remedy and Customer's sole obligation for
the cancellation of Purchase Orders by Customer.
ARTICLE 17
SOFTWARE RIGHT-TO-USE
17.1 The rights and obligations of Customer and Nortel Networks
with respect to the Software Right-to-Use are contained in this Agreement and in
the Software Right-To-Use Agreement attached hereto as Attachment G. Nortel
Networks represents that the Software licensed by Customer hereunder is all of
the Software which Customer shall require to provide the features and
functionality set forth in the Specifications for such Software, and that
Customer shall not be required to license additional Software in order to
realize the benefit of such features and functionality, with the exception of
Software prerequisites identified in the Documentation or unless otherwise
indicated in a written
49
proposal or quotation provided to Customer prior to the issuance of the
applicable Purchase Order for the applicable Software.
17.2 In addition to the rights and obligations described in Section
17.1, Nortel Networks agrees to the following:
(a) If TDMA, CDMA, GSM or AMPS Software or any part
thereof is lost or damaged (other than due to the fault of Customer) before
being Accepted or put In-Service, Nortel Networks will promptly replace it at no
additional cost to Customer. Any such Software lost or damaged after Acceptance
or due to the fault of Customer shall be replaced by Nortel Networks at a charge
to Customer equal to Nortel Networks' actual cost for gathering such Software.
Any Software which is not TDMA, CDMA, GSM or AMPS Software, or which is a
Reseller Item, that is lost or damaged for any reason shall be replaced by
Nortel Networks at a charge to Customer equal to Nortel Networks' actual cost
for gathering such Software.
(b) If Nortel Networks modifies and/or changes the
Software to permit additional features and such features are made generally
available to its customers in the Territory, such Software will promptly be made
available to Customer at Nortel Networks' then current price for such features,
less applicable discounts and incentives as provided in Attachments A and B.
ARTICLE 18
NON-DISCLOSURE OF TECHNICAL
INFORMATION AND PROPRIETARY RIGHTS
18.1 Either party (hereafter the "Disclosing Party") may disclose
to the other party (hereafter the "Receiving Party") information which the
Disclosing Party considers proprietary and confidential. Accordingly, with
respect to any confidential or proprietary specifications, drawings, sketches,
models, samples, tools, technical information,
50
confidential business information or data which is furnished by the Disclosing
Party to the Receiving Party in contemplation of or under this Agreement
(hereinafter "Information"), the Receiving Party shall treat such Information as
confidential information with the same degree of care as the Receiving Party
affords to confidential information of its own of a similar nature.
18.2 The provisions of this Article 18 shall not apply to any
Information which (a) is or shall become publicly available without fault on the
part of the Receiving Party; (b) is already known by the Receiving Party prior
to receipt from the Disclosing Party (so long as such Information was rightfully
obtained and is not subject to any other confidentiality agreement); (c) is
rightfully obtained by the Receiving Party from third parties without
restrictions; (d) the Receiving Party is required by law or by a governmental
authority or agency to disclose such Information, or (e) is independently
developed by a Receiving Party without any direct or indirect use of such
Information.
18.3 In the event that the Receiving Party becomes obligated to
disclose Information pursuant to an order of any governmental or other
authority, the Receiving Party shall advise the Disclosing Party and, if
requested by the Disclosing Party and at the Disclosing Party's sole cost and
expense, seek a protective order or other appropriate remedy that will permit
the Receiving Party to avoid such disclosure. In the event that such protective
order or other remedy is not obtained, the Receiving Party will disclose only
that portion of the Information as it is obligated to disclose pursuant to such
order, and will use all reasonable efforts, at the Disclosing Party's sole cost
and expense, to obtain assurances that confidential treatment will be accorded
to any Information so disclosed.
51
18.4 The provisions of this Article 18 shall survive the expiration
or termination of this Agreement.
ARTICLE 19
TAXES
Customer shall be responsible for the payment of all sales taxes and
Software license fee taxes payable in the Territory arising pursuant to this
Agreement. Nortel Networks shall be responsible for all other taxes payable to
or imposed by the government of the Territory (or any state, locality or
subdivision thereof), including, without limitation, any tax on its income,
revenue or gross receipts in respect of payments made by Customer to Nortel
Networks under this Agreement and any tax relating to franchise, license,
occupation, other real or personal property, payroll, unemployment and social
security taxes and fees. Any party making payments of taxes on behalf of the
other party shall provide the other party with suitable tax receipts confirming
that tax payments have been made on such other party's behalf. Notwithstanding
anything to the contrary contained herein, neither Customer nor Nortel Networks
shall be responsible for the payment of taxes which are the responsibility of
the other party under this Article 19.
ARTICLE 20
INTENTIONALLY OMITTED
ARTICLE 21
INSURANCE
21.1 Except where Customer designates its own carrier to perform
delivery, Nortel Networks shall maintain and keep in force, on behalf of
Customer and until delivery of the applicable items, risk insurance, in form and
substance in accordance with industry standards, covering the System and all
Equipment delivered to Customer, and
52
shall, upon request, furnish Customer with proof (in the form of Certificates of
Insurance) that such insurance has been obtained and is in force.
21.2 Nortel Networks shall at all times during the Term carry
insurance with limits not less than the limits described as follows:
(a) Employer's General Liability - Limits $1,000,000 per
occurrence.
(b) Comprehensive General Public Liability: $2,000,000
single limit bodily injury and property damage combined; such coverage shall
include a broad form liability rider, completed operations coverage rider and
contractual liability rider.
(c) An umbrella policy with $4,000,000 single limit
bodily injury and property damage combined.
(d) Worker's Compensation (Statutory limits in the
Territory or subdivision thereof in which this Agreement is to be performed).
21.3 Customer shall be named as an additional insured with respect
only to the operations of Nortel Networks under the insurance required in
Sections 21.2(b) and (c), and as loss payee, as its interests may appear, under
the insurance required by Section 21.1. Nortel Networks shall provide to
Customer within fifteen (15) days of the date hereof a certificate of insurance
consistent with this Article 21. Such policies shall be carried and maintained
during the Term and if Nortel Networks fails to renew, cancels or terminates any
of such policies during the Term of this Agreement, Nortel Networks will provide
written notice thereof to Customer as promptly as practicable.
21.4 Notwithstanding the requirements as to insurance to be
carried, the insolvency, bankruptcy, or failure of any insurance company
carrying insurance for Nortel Networks, or failure of any such insurance company
to pay claims accruing, or the
53
failure of Nortel Networks to obtain any such insurance, shall not be held to
waive any of the provisions of this Agreement or relieve Nortel Networks from
any obligations under this Agreement.
ARTICLE 22
TERMINATION AND DEFAULT
22.1 Prior to the shipment of the applicable items of Equipment or
Software, or the performance of the applicable Service(s), Customer may, without
prejudice to any of Customer's rights accrued prior to the date of termination,
at its option and upon written notice to Nortel Networks, signed by a person
duly authorized by Customer, terminate any Purchase Order or portion thereof,
without penalty, in the event that Nortel Networks is in default under any
material term of such Purchase Order (or the applicable Statement of Work, if
any) or this Agreement (as such material term pertains to the applicable
Purchase Order) and an action to correct such default is not commenced by Nortel
Networks within thirty (30) days after its receipt of written notice thereof
from Customer and such default is not thereafter cured within forty-five (45)
days after commencement of correction by Nortel Networks, unless Nortel Networks
cannot complete such cure within such period for reasons beyond its control and
Nortel Networks is continuing to diligently pursue the cure, in which case such
default must be cured no later than ninety (90) days after Nortel Networks'
original receipt of written notice from Customer under this Section 22.1.
22.2 Customer, without prejudice to any of Customer's rights
accrued prior to the date of termination, may, at its option and upon written
notice to Nortel Networks, signed by a person duly authorized by Customer,
terminate this Agreement, without penalty, in the event that Nortel Networks is
in default under any material term of this
54
Agreement and an action to correct such default is not commenced by Nortel
Networks within thirty (30) days after its receipt of written notice thereof
from Customer and such default is not thereafter cured within forty-five (45)
days after commencement of correction by Nortel Networks, unless Nortel Networks
cannot complete such cure within such period for reasons beyond its control and
Nortel Networks is continuing to diligently pursue the cure, in which case such
default must be cured no later than ninety (90) days after Nortel Networks'
original receipt of written notice from Customer under this Section 22.2.
Customer, without prejudice to any of Customer's rights accrued prior to the
date of termination, may, upon written notice to Nortel Networks signed by a
person duly authorized by Customer, also terminate this Agreement at its option,
without penalty to Customer (i) if Nortel Networks (a) applies for or consents
to the appointment of, or the taking of possession by a receiver, custodian,
trustee, or liquidator of itself or of all or a substantial part of its
property, (b) makes a general assignment for the benefit of its creditors, (c)
commences a voluntary proceeding under any bankruptcy code or under any other
law relating to the relief from creditors generally, or (d) fails to contest in
a timely or appropriate manner, or acquiesces in writing to, any petition filed
against it in an involuntary proceeding under any bankruptcy code or under any
other law relating to the relief from creditors generally or any application for
the appointment of a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property, or its liquidation, reorganization,
dissolution, or winding-up.
22.3 In the event of non-payment by Customer within twenty (20)
days after Customer's receipt of written notice from Nortel Networks of overdue
amounts owed by Customer to Nortel Networks hereunder, Nortel Networks, without
prejudice to any of
55
Nortel Networks' rights accrued prior to such action, may, at its option and
upon written notice to Customer, signed by a person duly authorized by Nortel
Networks, suspend its performance (including shipment and performance of
applicable Services) with respect to such Purchase Order and all pending
Purchase Orders or terminate the applicable Purchase Order and Nortel Networks
shall additionally have the right either to refuse or accept additional Purchase
Orders after the date of such notice or to require payment terms other than
those set forth in this Agreement prior to the acceptance of additional Purchase
Orders. Amounts which have not been paid by Customer because they are the
subject of a good faith dispute shall not be considered to be an instance of
non-payment and shall not be subject to the provisions of this Section 22.3.
22.4 Nortel Networks, without prejudice to any of Nortel Networks'
rights accrued prior to the date of termination, may, at its option and upon
written notice to Customer, signed by a person duly authorized by Nortel
Networks, terminate this Agreement without any obligation to deliver any
Equipment, Software or Services not yet delivered by it to Customer, in the
event that Customer is in default under any material term of this Agreement
(other than with respect to overdue amounts, which shall be governed by Section
22.3) and an action to correct such default is not commenced by Customer within
thirty (30) days after receipt of written notice thereof from Nortel Networks
and such default is not thereafter cured within forty-five (45) days after
commencement of correction by Customer, unless Customer cannot complete such
cure within such period for reasons beyond its control and Customer is
continuing to diligently pursue the cure, in which case such default must be
cured no later than ninety (90) days after Customer's original receipt of
written notice from Nortel Networks under this
56
Section 22.3. Nortel Networks, without prejudice to any of Nortel Networks'
rights accrued prior to the date of termination, may, upon written notice to
Customer signed by a person duly authorized by Nortel Networks, also terminate
this Agreement without any obligation to deliver Equipment, Software or Services
not yet delivered in the event that Customer: (a) applies for or consents to the
appointment of, or the taking of possession by a receiver, custodian, trustee,
or liquidator of itself or of all or a substantial part of its property, (b)
makes a general assignment for the benefit of its creditors, (c) commences a
voluntary proceeding under any bankruptcy code or under any other law relating
to relief from creditors generally or (d) fails to contest in a timely or
appropriate manner, or acquiesces in writing to, any petition filed against it
in an involuntary proceeding under any bankruptcy code or under any other law
relating to relief from creditors generally, or any application for the
appointment of a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property, or its liquidation, reorganization,
dissolution, or winding-up.
22.5 If Customer or Nortel Networks terminates this Agreement,
Nortel Networks' obligations hereunder with respect to Equipment and Software
already delivered, installed and not returned (including the provision of
related Services), and Customer's obligations with respect to Equipment and
Software not returned (and Services properly performed), shall continue in full
force and effect.
ARTICLE 23
INTENTIONALLY OMITTED
ARTICLE 24
CONTINUITY FOR SUPPLY OR REPLACEMENT
24.1 For a period of (i) at least [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
57
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] years following the
purchase of any item of CDMA or GSM Equipment, and (ii) [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] years following the purchase
of any item of Equipment other than CDMA or GSM Equipment, Nortel Networks shall
make available for sale to Customer at its then current prices (and, during the
Term of this Agreement, subject to applicable discounts as set forth in
Attachments A and B), replacement and expansion parts for such Equipment or
their "form, fit and function" equivalent, which shall include spare parts and
modules for regular maintenance and repair and to allow for channel expansion
and cell splitting (up to the design limits of the Equipment) which is
compatible with the System sold hereunder.
24.2 Nortel Networks may at any time cease production or purchase,
as the case may be, of any item of Equipment or Software (or component thereof)
so long as Nortel Networks maintains a sufficient inventory of such Equipment,
Software or component thereof to meet its obligations pursuant to Section 24.1
above. In the event that such discontinuance of production or purchase is in
anticipation of migration to new generation Equipment which is not compatible
with that purchased by Customer hereunder, Nortel Networks shall notify Customer
of its intent to discontinue production or purchase, as the case may be,
sufficiently in advance of final production run or purchase to allow Customer to
purchase such additional items of such Equipment, Software or components thereof
as it may desire for inclusion in such final production
58
run. With respect to Reseller Items, Nortel Networks shall use commercially
reasonable efforts to meet the terms and conditions of this Section 24.2.
24.3 Nortel Networks warrants that it will use commercially
reasonable efforts to ensure that all new CDMA or GSM Equipment or Software
designed to serve the same or substantially the same purpose in the System as
the existing Equipment and Software ("Alternative Product") shall interconnect
to and operate as part of the CDMA or GSM System, as applicable, without
requiring a change-out or replacement of such System or the Equipment that
comprises such System. This warranty shall (a) apply for three years after
generally availability of any version of the applicable Equipment or the
applicable Software Release within the Territory, (b) not apply to Reseller
Items, and (c) not apply if Nortel Networks offers another existing or new
product providing the same or substantially the same functionality as the
Alternative Product such that Customer is not forced to upgrade its existing
CDMA or GSM Equipment.
ARTICLE 25
SHIPPING
25.1 Nortel Networks shall also take the following actions in
connection with the Equipment, Software and Services provided by it hereunder:
(a) At no additional charge, package Equipment and
Software in a suitable manner in accordance with Nortel Networks' usual
standards and methods and provide protection against damage during shipment,
handling and storage in dry, unheated quarters. Should any law or regulation
applicable in the Territory require packaging of Equipment or Software in a
manner that is not in accordance with Nortel Networks' standard packaging
methods, Nortel Networks shall comply with all such applicable laws and
regulations and Customer shall pay to Nortel Networks any
59
additional costs and expenses reasonably incurred by Nortel Networks in
complying with such laws or regulations.
(b) Inform Customer of the dates of shipping of the goods
to the Installation site or other mutually agreed upon delivery location. Nortel
Networks shall send to Customer concurrently with shipment, the original copies
of (i) commercial invoices; and (ii) the packing slip setting forth the contents
of the boxes shipped.
ARTICLE 26
WORK RULES AND SUBCONTRACTORS
26.1 The employees, agents, representatives or subcontractors of
Nortel Networks shall, while on any Installation site, comply with all
applicable laws and regulations, as well as Customer's or any landlord's
reasonable plant regulations, which apply to the Installation. Any employee,
agent, representative or subcontractor of Nortel Networks failing to comply
shall be refused admittance to that Installation site, and must be replaced by
Nortel Networks within one (1) week from date of non-admittance.
26.2 If Customer has any reasonable objection to any subcontractor
of Nortel Networks, Customer shall promptly advise Nortel Networks of such
objection and Nortel Networks shall in good faith consider such objection and
Nortel Networks shall promptly meet with Customer to discuss such objection,
will consider in good faith such objection and, in its reasonable discretion
after such consultation, will take any steps or actions (including replacing any
of its subcontractors with another subcontractor acceptable to Customer) as may
be necessary in order to eliminate any such objection Customer may have.
26.3 Nortel Networks expressly certifies that its employees,
workers, agents, representatives and subcontractors and their workers and other
personnel employed in the
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performance of this Agreement by Nortel Networks are the employees, workers,
agents, representatives and subcontractors and the personnel of Nortel Networks,
and not of Customer.
26.4 Nortel Networks shall not permit such employees, agents,
representatives or subcontractors to interfere with the normal functioning and
security of the work and other facilities of Customer or of other persons at the
Installation locations. Customer may request Nortel Networks to cause its
employees, agents, representatives or subcontractors to wear visible
identification in any of the Installation locations. In general, Nortel
Networks, its agents, employees, representatives or subcontractors are obliged
to comply with all reasonable rules, regulations and procedures of security
adopted by Customer. Upon completion of Installation, Nortel Networks shall
promptly remove all of its tools, excess equipment and the like and deliver the
sites clean and in good condition suitable for normal utilization provided that
Customer shall grant Nortel Networks reasonable access to such sites for such
removal and clean-up.
26.5 Nortel Networks shall be responsible for the supervision and
direction of all work performed by its subcontractors hereunder using Nortel
Networks' professional skill and attention. Nortel Networks shall be responsible
for all construction means, methods, techniques, sequences, and procedures, and
safety precautions and programs in connection with such work, and shall be
responsible for coordinating all portions of all work performed by its
subcontractors. No assignment by Nortel Networks to its subcontractors of its
rights, duties, obligations or liabilities hereunder shall relieve Nortel
Networks of any of the duties, liabilities or obligations owed by Nortel
Networks hereunder to the Customer. Nortel Networks is solely responsible for
any payments or
61
reimbursement of expenses owed to any subcontractor for any services performed
by such subcontractor in accordance with the terms of this Agreement and shall
make all such payments on a timely basis. Nortel Networks hereby acknowledges
and agrees that Customer has no responsibility, obligation or liability to any
of Nortel Networks' subcontractors hereunder and that no subcontractor has any
right to impose a lien or security interest with respect to any Equipment
furnished to Customer hereunder or any Installation Services provided to
Customer hereunder. The duties, obligations, liabilities and responsibilities of
Nortel Networks under this Agreement shall continue in full force and effect and
shall not be limited, modified, affected or reduced in the event of the
termination, cancellation or suspension of any agreement between Nortel Networks
and any of its subcontractors or as a result of any default, breach or violation
on the part of Nortel Networks or any of its subcontractors under any agreement
or arrangement between Nortel Networks and any such subcontractor.
ARTICLE 27
ADDITIONAL OBLIGATIONS
27.1 Each of the parties shall perform all of its obligations under
this Agreement in a timely fashion in accordance with the schedule set forth in
the applicable Purchase Order (as accepted by Nortel Networks in accordance with
Article 2) or Statement of Work, or as otherwise agreed to in writing.
27.2 (a) Customer shall provide Nortel Networks with all
information reasonably requested from Customer which Customer has in its
possession, which is necessary for Nortel Networks to perform, or cause to be
performed, its obligations under this Agreement. Such information shall be
provided upon reasonable notice in a form reasonably specified by Nortel
Networks.
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(b) Nortel Networks shall provide Customer with all
information reasonably requested from Nortel Networks which Nortel Networks has
in its possession, which is necessary for Customer to perform, or cause to be
performed, its obligations under this Agreement. Such information shall be
provided upon reasonable notice in a form reasonably specified by Customer.
27.3 Customer shall provide, at its own cost, commercially
reasonable security measures required for safeguarding the storage areas for
Equipment delivered and the sites where Installation activities are to be
performed. This security shall be provided from the start of Installation at
each site until Acceptance.
27.4 All tools required for Installation shall be shipped to the
Installation sites at the sole cost and expense of Nortel Networks.
27.5 In order to facilitate Installation, Customer shall:
(a) Allow all Nortel Networks personnel employed in the
Installation to have access to the Installation sites at all reasonable hours to
the same extent Customer would have access (Customer shall use reasonable
efforts, but shall be under no obligation, to obtain 24 hour access), and permit
the use by such personnel of all routes, roadways, ramps, keys, lock
combinations and e-cards under the control of Customer when such use is
reasonably necessary for the proper carrying out of the Installation;
(b) Use reasonable efforts to ensure, to the reasonable
satisfaction of Nortel Networks, that personnel carrying out activities at the
Installation sites who are not employed by Nortel Networks or its subcontractors
do not interfere with the progress of the Installation,
63
(c) Ensure that air-conditioning equipment is operating
satisfactorily within the ranges set forth in Nortel Networks' Specifications,
(d) Ensure that all transmission and remote end
facilities (other than interconnections) that are the responsibility of Customer
and are necessary for the testing of the System, are operational and ready for
the aforesaid tests when required for each portion of the work;
(e) Ensure that the switch and cell site or base station
locations are ready and available when required for the commencement of
Installation;
(f) Provide electric current facilities for the
Equipment, including suitable electrical outlets for soldering irons, hand-lamps
and power tools, in the rooms in which the work is to be performed;
(g) Provide suitable floor space to allow Equipment to be
uprighted and placed in position and all necessary openings and ducts for cable
and conductors in floors, walls and partitions at the sites;
(h) Provide suitable and easily accessible floor space
during the progress of the work for secure storage of major items of Equipment
closely adjacent to where they will be used, for administrative purposes and for
storage of tools and other property of Nortel Networks; and
(i) Perform all of its obligations as set forth in any
applicable Purchase Order, Statement of Work or as otherwise agreed to by the
parties in writing.
ARTICLE 28
GOVERNMENTAL COMPLIANCE; INDUSTRY
STANDARDS; INTERCONNECT
28.1 In the performance of this Agreement, Nortel Networks shall
comply with the provisions of all of the laws of the Territory and applicable
local laws, rules,
64
regulations and codes in all respects applicable to safety matters or otherwise
relating to the manufacture, delivery and Installation of the Equipment and
Software and shall obtain the necessary type approvals required in the Territory
for the Equipment and Software. At Customer's request, Nortel Networks shall
promptly furnish Customer with evidence that such type approvals have been
obtained and are in force.
28.2 Any licenses or permits required by any governing authority of
the Territory relating to the use of the Equipment and Software in a specific
locality shall be the sole responsibility of Customer. At the request of Nortel
Networks, Customer shall provide Nortel Networks with any such licenses or
permits, or furnish Nortel Networks with evidence that such licenses or permits
have been obtained and are in force.
28.3 Nortel Networks shall perform Installation work ordered
hereunder so as to cause no unreasonable interference with or obstruction to
lands and thoroughfares or rights of way on or near which the Installation work
may be performed. If repairs (or, if repairs are not feasible, new construction)
are required in order to repair or replace facilities damaged by Nortel Networks
due to its negligence, the actual, reasonable costs of such repairs or new
construction shall be at Nortel Networks' cost and expense, to the extent that
Nortel Networks' negligence caused such damage. Customer shall be responsible
for site acquisition and for obtaining all necessary easements, rights of way
and access to, and building permits for, each cell site, base station and switch
location and microwave location.
28.4 Compatibility Information is the technical information,
including Software interfaces (but excluding source code and internal system
interfaces), required to permit the design of hardware and/or software that is
functionally interconnectable with the
65
Equipment and Software supplied by Nortel Networks hereunder. Nortel Networks
shall reasonably cooperate with third parties as Customer may request, subject
to any appropriate confidentiality or other agreements, in order to facilitate
such interconnection.
28.5 During the Term and for a period of [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] years after expiration of the
Term, Nortel Networks shall provide to Customer that Compatibility Information,
if currently available and subject to the confidentiality provisions of this
Agreement and such other restrictions as Nortel Networks may reasonably request,
which gives Customer the necessary technical information and interconnection
information to interface with the System as specified in Section 28.4 above.
Customer shall have the right to disclose such Compatibility Information to
third parties (subject to appropriate non-disclosure agreements approved by
Nortel Networks, which approval shall not be unreasonably withheld or delayed),
whose equipment and/or software will be interconnected with the System,
Equipment or Software or who will be developing interfaces in order to
accomplish interconnectability as described in Section 28.4 above. Nortel
Networks agrees, at the request of Customer, to reasonably cooperate with
Customer or any third party to permit and accomplish such interconnection.
Nortel Networks agrees to provide Customer, as promptly as reasonably
practicable, advance notice of any new, or changes in the existing, interface
specifications and upon completion of such new, or changed, specifications to
provide such to Customer, subject to Sections 28.4 and this 28.5.
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ARTICLE 29
COOPERATIVE ADVERTISING
29.1 Nortel Networks shall, commencing with the Effective Date and
during the Term, reimburse Customer for [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of Customer's actual, reasonable, out-of-pocket costs
incurred by Customer with respect to its cooperative marketing programs which
contain specific references to Nortel Networks and which are in accordance with
Attachment I. The amount reimbursed by Nortel Networks to Customer during the
Term and in accordance with this Article 29 shall be capped at an amount equal
to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] the
aggregate net purchase price paid for the Equipment, Software and Services
purchased by Customer hereunder (but excluding all GSM Equipment, Software and
Services). Such amount shall be paid to Customer following accrual thereof and
in accordance with Attachment I within thirty (30) days of the end of each
calendar quarter, and Nortel Networks shall provide to Customer access to an
online statement setting forth Nortel Networks' calculations of Customer's
accrued cooperative advertising funds as well as the amounts already utilized by
Customer for cooperative advertising programs under this Article 29. Customer
shall provide Nortel Networks with copies of invoices reasonably detailing its
expenditures with respect to such programs.
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29.2 The parties agree that under the Master Purchase Agreement,
dated July 15, 1999, between Customer and Nortel Networks, as amended, Customer
had remaining at the end of the Term a balance of accrued but unused cooperative
advertising funds. The parties further agree that such unused funds shall
continue to be available to Customer under this Agreement in accordance with
Attachment I; provided, however, that Customer may only utilize such remaining
funds to be reimbursed for fifty percent [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] of its actual, reasonable, out-of-pocket
costs incurred by Customer with respect to cooperative marketing programs for
which Customer receives invoices dated on or prior to December 31, 2003.
ARTICLE 30
ASSIGNMENT
30.1 Customer may assign this Agreement to any third party without
the prior written consent of Nortel Networks, to (a) any entity resulting from a
merger, consolidation or other reorganization to which Customer is a party, or
(b) any entity to which Customer transfers all or substantially all of the
assets of Customer existing at such time. Customer shall not be entitled to
assign this Agreement without the consent of Nortel Networks (i) to an entity
which intends to use the Equipment or Software outside of the Territory, (ii) to
any competitor of Nortel Networks directly or indirectly engaged in the
manufacture and/or sale of wireless telecommunications infrastructure equipment,
or (iii) if Customer is in material breach under the Agreement. Customer agrees
to provide Nortel Networks with prompt written notice after any such assignment.
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30.2 Customer shall have the right, without the prior written
consent of Nortel Networks, to transfer Nortel Networks' Software Right-to-Use
(as set forth in Attachment G), it being understood and agreed that no
additional Software fees shall be due unless such Software would have been
subject to continuing fees if it had been retained by Customer) to any
purchaser, transferee or assignee of the FCC license and associated system in a
market for which Customer has purchased or licensed Equipment and Software, so
long as such purchaser, transferee or assignee (a) agrees in writing to be bound
by the terms and conditions of such Right-to-Use, (b) does not intend to use
such Equipment and Software outside of the Territory, (c) is not a competitor of
Nortel Networks directly or indirectly engaged in the manufacture and/or sale of
wireless telecommunications infrastructure equipment, and (d) is not in material
breach of any agreement with Nortel Networks. Customer shall provide Nortel
Networks prior written notice of such assignment. In the event of any such sale,
transfer or assignment, Nortel Networks agrees to negotiate in good faith with
any assignee with respect to the balance of any warranty covering the assigned
Equipment or Software.
30.3 Customer shall have the right to assign this Agreement, or all
or any part of its rights or obligations hereunder, to its parent and to any
Affiliate of Customer without recourse to Customer, provided that Nortel
Networks approves the financial status of such Affiliate, such approval by
Nortel Networks not to be unreasonably withheld or delayed. Customer shall not
be entitled to assign this Agreement without the consent of Nortel Networks, or
all or any part of its rights or obligations hereunder, (i) to an Affiliate
which intends to use the Equipment or Software outside of the Territory, (ii) to
any competitor of Nortel Networks directly or indirectly engaged in the
manufacture
69
and sale of wireless telecommunications infrastructure equipment, (iii) if such
Affiliate is in material breach under the Agreement, and (iv) unless Customer
has given Nortel Networks prior written notice of such assignment.
30.4 Nortel Networks shall not assign this Agreement or any
interest in any funds that may be due to Nortel Networks hereunder without the
prior written consent of Customer, except to Nortel Networks Limited, any wholly
owned subsidiary of Nortel Networks or Nortel Networks Limited, or to the
successor corporation in connection with a merger of Nortel Networks or Nortel
Networks Limited or a sale of all or substantially all of the assets of Nortel
Networks or Nortel Networks Limited to any other entity; provided, however, that
any such assignment to a wholly owned subsidiary of Nortel Networks or Nortel
Networks Limited shall not relieve Nortel Networks of its obligations under this
Agreement.
30.5 Customer hereby consents to the sale by Nortel Networks of
Nortel Networks' right to receive any monies ("Receivables") so long as Nortel
Networks advises Customer of such sale, including the name of the entity to
which the Receivables were sold, as promptly as reasonably practicable, but in
no event longer than 20 days after such sale. Customer grants permission for
Nortel Networks to disclose the provisions of this Agreement (subject to
appropriate non-disclosure agreements) to purchasers and prospective purchasers
of Receivables, or their Affiliates and others with a present or prospective
financial interest in such Receivables, and their respective agents, attorneys,
auditors, rating agencies and other advisors.
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ARTICLE 31
AUTHORITY
31.1 Customer represents and warrants that (a) all necessary
approvals and authority for Customer to enter into this Agreement and bind
Customer have been obtained, (b) the person executing this Agreement on behalf
of Customer has express authority to do so and, in so doing, to bind Customer
hereto, (c) the execution of this Agreement by Customer and the consummation of
the transactions contemplated hereby do not violate any provision any by-law,
charter, regulation or any other instrument governing the authority of Customer
and (d) the execution, delivery and performance of this Agreement by Customer,
and the purchase of the System and the Equipment and Right-to-Use Software by
Customer and the use thereof by Customer will not violate any agreement,
document, instrument, order, judgment or law binding upon Customer or any of its
property. Customer shall furnish Nortel Networks with such documents as Nortel
Networks may reasonably request showing proof of authority in accordance with
this Article 31.
31.2 Nortel Networks represents and warrants that (a) all necessary
approvals and authority for Nortel Networks to enter into this Agreement and
bind Nortel Networks have been obtained, (b) the person executing this Agreement
on behalf of Nortel Networks has express authority to do so and, in so doing, to
bind Nortel Networks hereto, (c) the execution of this Agreement by Nortel
Networks and the consummation of the transactions contemplated hereby do not
violate any provision of any by-law, charter, regulation, or any other
instrument governing the authority of Nortel Networks, (d) Nortel Networks has
all necessary licenses, agreements, personal property rights and other
authorizations and consents necessary to enter into this Agreement and
consummate
71
the transactions contemplated hereby and to sell and Install (other than such
licenses and authorizations required to be obtained by Customer pursuant to the
express provisions of this Agreement) the System and the Equipment, license the
Software and provide all of the Services to Customer, (e) the execution,
delivery and performance of this Agreement by Nortel Networks, and the purchase
of the System, and the Equipment and Right-to-Use Software from Nortel Networks
by Customer, and the use thereof by Customer will not violate any agreement,
document, instrument, order, judgment or law binding upon Nortel Networks or any
of its property, (f) the execution of this Agreement by Nortel Networks and the
consummation of the transactions contemplated hereby by Nortel Networks does
not, nor will the use of the System, Equipment or Software by Customer in the
Territory, violate any patent, trademark, copyright or other property rights of
others; provided, however, that Customer's sole remedies for any breach of this
clause 31.2(f) shall be those set forth in Article 15; and (g) the execution of
this Agreement by Nortel Networks and the consummation of the transactions
contemplated hereby by Nortel Networks does not, nor will the use of the System,
Equipment or Software by Customer in the Territory, violate any document,
agreement or instrument binding upon Nortel Networks or its property. Nortel
Networks shall furnish Customer with such documents as Customer may reasonably
require showing proof of authority in accordance with this Article 31.
ARTICLE 32
ADVERTISING RESTRICTIONS
32.1 Neither party shall publicly advertise or, except as required
by law, publish information concerning the entry into, execution, or delivery of
this Agreement,
72
its nature, or the terms and conditions hereof, without the other party's prior
written consent, which consent shall not be unreasonably withheld or delayed.
32.2 Neither party shall use either orally or in writing the other
party's name, or that of its shareholders, the parent corporations of the
shareholders, or any subsidiary or any Affiliate of the shareholders or their
parents, in connection with any public advertising, promotion, publicity or
representation without the other party's prior written consent, which consent
shall not be unreasonably withheld or delayed.
32.3 Notwithstanding the foregoing, Customer and Nortel Networks
agree to jointly prepare a press release announcing certain aspects of this
Agreement, including that the purchases during the Term could total
approximately ninety million dollars ($90,000,000) and the types of Equipment
and Software being purchased by Customer hereunder. Such press release shall be
completed for release by Nortel Networks no later than July 31, 2003.
ARTICLE 33
ENTIRETY OF AGREEMENT: NO ORAL CHANGE
This Agreement and the Attachments referenced herein constitute the
entire Agreement between the parties with respect to the subject matter hereof.
It supersedes all proposals, oral or written, all previous negotiations, and all
other communications and agreements (including the Memorandum of Agreement,
dated March 21, 2003) between the parties with respect to the subject matter
hereof. No modifications, alterations, or waivers of any provisions herein
contained shall be binding on the parties hereto unless evidenced in writing by
an amendment signed by duly authorized representatives of Nortel Networks and
Customer. Notwithstanding this Article 33, Sections B.1, B.2 and C.2 of the
Memorandum of Agreement, dated June 27, 2002, between Customer and
73
Nortel Networks shall remain in full force and effect, including the product
credits available to Customer as set forth therein.
ARTICLE 34
NO WAIVER
The failure of either party to insist, in any one or more
instances, upon performance of any of the terms, covenants or conditions of this
Agreement, or to exercise any right hereunder, shall not be construed as a
waiver or relinquishment of the future performance of any such terms, covenants,
or conditions or the future exercise of such right, and the obligation of the
other party with respect to such future performance shall continue in full force
and effect.
ARTICLE 35
NOTICES
35.1 Any legal notice required to be given by one of the parties to
the other hereunder shall be given when forwarded by prepaid registered or
certified first class airmail, postage and fees prepaid, or by telegram,
telecopy or hand delivery to the other party at the following addresses and
telecopier numbers: If to Nortel Networks:
Nortel Networks
Mailstop D17/03/0F2
0000 X. Xxxxxx Xxxx Xxxxxx Xxxxxxx
Xxxxxxxx Xxxxxxxx Xxxx, XX 00000
Telephone : 000-000-0000
Telecopier: 000-000-0000
Attention: Xxx Xxxxx
If to Customer:
Western Wireless Corporation
0000 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attn: Chief Operating Officer
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with a copy to:
Western Wireless Corporation
0000 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attn: Legal Department
and to:
Xxxxxxxx Xxxxxx Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone : (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
and such notices shall be deemed to have been received ten (10) Business Days
after mailing if forwarded by mail, and upon receipt if forwarded by telegram,
telecopy or hand.
35.2 Other notices required to be given by one of the parties to
the other hereunder shall be given when forwarded by prepaid registered or
certified first class airmail, postage and fees prepaid, or by telegram,
electronically, telecopy or hand delivery to the persons designated by the other
party at the addresses and telecopier numbers provided by such other party.
35.3 The aforementioned addresses or telecopy numbers of either
party may be changed at any time by giving fifteen (15) days prior written
notice to the other party in accordance with the foregoing.
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ARTICLE 36
ATTACHMENTS AND INCORPORATIONS
36.1 Attachments A through J hereto are hereby incorporated by
reference herein, and made a part of this Agreement with the same force and
effect as though set forth in their entirety.
36.2 In the event of any conflict or inconsistency among the
provisions of this Agreement and the documents attached and incorporated herein,
such shall be resolved, by giving precedence to this Agreement and thereafter to
the Attachments.
ARTICLE 37
HEADINGS
The headings given to the Articles herein are inserted only
for convenience and are in no way to be construed as part of this Agreement or
as a limitation of the scope of the particular Article to which the title
refers.
ARTICLE 38
GOVERNING LAW - ARBITRATION
38.1 THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA
APPLICABLE TO CONTRACTS MADE AND TO BE ENTIRELY PERFORMED THEREIN.
38.2 Subject to Section 38.3(b), and any provisions regarding
equitable relief contained herein, any dispute regarding any right, obligation,
duty or liability which may arise between the parties under this Agreement which
cannot be settled between them, shall be settled in accordance with this Article
38. Any such dispute shall be formally commenced upon the sending of written
notice from one party to the other specifying the
76
nature of such dispute and requesting the escalation of such dispute in
accordance with this Article 38. After the giving of such notice (and the
receipt thereof by the other party), each of the parties shall appoint a
representative from its senior management team and such appointed
representatives shall meet and negotiate in good faith in order to resolve such
dispute. The location, form, frequency, duration and conclusion of any such
negotiations shall be left to the discretion of the appointed representatives;
provided, however, that each of the parties shall have the right to submit such
dispute to arbitration in accordance with Section 38.3 below if such
negotiations are still ongoing after the expiration of sixty (60) days from the
date the initial notice was given (unless the parties mutually agree to extend
such time period). The representatives may, by mutual agreement, elect to
utilize alternative dispute resolution procedures (including mediation) in order
to assist in the negotiations. Such negotiations (and all correspondence
relating thereto) between the representatives shall not be admissible in any
arbitration proceeding commenced in accordance with this Article 38 unless
otherwise expressly agreed upon in writing by each of Customer and Nortel
Networks; provided, however, that documents identified in, referred to in or
provided in conjunction with any such correspondence between the representatives
(other than documents prepared solely for purposes of the negotiations) shall
not be subject to the preceding restriction on admissibility and may be admitted
into evidence in any such arbitration proceeding.
38.3 (a) In the event that a dispute is submitted to
arbitration in accordance with this Article 38, such dispute shall then be
settled by arbitration in accordance with the Rules of Arbitration of the
American Arbitration Association (AAA) in New York, New York, by three (3)
arbitrators, one (1) to be appointed by each party and the third to
77
be selected by the arbitrators appointed by the parties (provided that, if the
two (2) arbitrators appointed by the parties hereto cannot agree on the third
arbitrator, the third arbitrator shall be selected by the President of the AAA)
and shall be conducted in accordance with such Rules. Any fees charged by the
arbitrators or the AAA for arbitration services shall be shared equally by
Nortel Networks and Customer.
(b) This Article 38 shall not be applicable to any
matters relating to either party's intellectual property rights (including
Article 15 hereof), misuse of Information (as set forth in Article 18) or
enforcement of the Software Right-to-Use set forth in Attachment G and neither
party shall be obligated to arbitrate such matters.
(c) The award of any arbitration shall be final,
nonappealable, conclusive and binding on the parties hereto.
(d) The arbitrators may award any legal or equitable
remedy, but if specific remedies or limitations on remedies are provided for in
this Agreement, they shall enforce such remedies or limitations on remedies. The
arbitration award may, at the discretion of the arbitrators, include an award of
attorneys' fees, and the amount of such fees, to the prevailing party. Judgment
upon any arbitration award may be entered and enforced in any court of competent
jurisdiction.
(e) Either party to an arbitration hereunder may bring an
action for injunctive relief against the other party if such action is necessary
to preserve jurisdiction of the arbitrators or to maintain status quo pending
the arbitrators' decision. Any such action commenced pursuant to this Section
38.3 shall be discontinued upon assumption of jurisdiction by the arbitrators
and their opportunity to consider the request for equitable relief pending final
decision in the arbitration.
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38.4 If there is a disagreement under Section 6.3 or 11.8 of this
Agreement which, in accordance with the terms of such Section 6.3 or 11.8,
requires a Third Party Engineer, the parties will attempt to negotiate a
solution as soon as possible, and such negotiations shall commence no later than
three (3) days after written notification by either party of such disagreement.
If no solution can be reached, the parties shall select a third party engineer
("Third Party Engineer") (whose fees and expenses will be shared equally by the
parties) who will, after conducting such investigation as he/she deems
necessary, within five (5) days, render a decision in the matter. If the parties
are unable to agree on the selection of the Third Party Engineer, the Third
Party Engineer will be selected by the then President of the Institute of
Electrical & Electronics Engineers of the United States. The Third Party
Engineer's decision shall be final, conclusive and binding and neither party
shall appeal or otherwise contest it.
38.5 Subject to Sections 38.3 and 38.4, each party hereby expressly
submits to the exclusive jurisdiction of all courts sitting in New York, New
York, in connection with any claim or dispute arising under this Agreement, and
agrees that any process or notice of motion or other application to any of such
courts or a judge thereof may be served upon each party within or without such
court's jurisdiction by registered mail or by personal service, at the address
of such party specified herein (or at such other address as such party shall
specify by a prior notice in writing to the other), provided a reasonable time
for appearance is allowed. Each party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court
sitting in New York, New York, and hereby further irrevocably waives any claim
that any such
79
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
ARTICLE 39
SEVERABILITY
Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law
but, if any provision of this Agreement shall be held to be prohibited or
invalid in any jurisdiction, the remaining provisions of this Agreement shall
remain in full force and effect and such prohibited or invalid provision shall
remain in effect in any jurisdiction in which it is not prohibited or invalid.
ARTICLE 40
PARTIES ARE NOT PARTNERS
Nothing in this Agreement shall be deemed to create, nor shall
either of the parties hereto hold itself out to be, the agent, representative,
joint venturer, employee or partner of the other party or to have any powers to
bind the other party.
ARTICLE 41
DAYS
Any reference in this Agreement to days shall be deemed to refer to
consecutive calendar days and not Business Days (unless otherwise expressly
stated) and is not exclusive of holidays.
ARTICLE 42
counterparts
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.
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IN WITNESS WHEREOF the parties hereto have executed this
Master Purchase and License Agreement as of the date first above written.
81
NORTEL NETWORKS INC.
By:______________________________________
Name:
Title
WESTERN WIRELESS CORPORATION
Federal Tax ID #00-0000000
By:______________________________________
Name:
Title:
82
MASTER PURCHASE AND LICENSE AGREEMENT
BETWEEN
WESTERN WIRELESS CORPORATION
AND
NORTEL NETWORKS INC.
Contract No. 21876
Confidential Information
Attachment A GSM Equipment and Software
Attachment B CDMA Equipment and Software
Attachment C Extended Service and Support Plan
Attachment D Schedule for Critical Items
Attachment E Training
Attachment F Standard Lead Times
Attachment G Software Right-To-Use Agreement
Attachment H GSM Roamer Markets
Attachment I Cooperative Marketing
Attachment J Zone Schedule of Shipping Prices (to be added within 30
days)
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
Confidential Information
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS, CONSTRUCTION ................................................ 1
ARTICLE 2 - SCOPE OF AGREEMENT; ORDERS ............................................... 10
ARTICLE 3 - CONTRACT PRICES .......................................................... 16
ARTICLE 4 - TERMS OF PAYMENT ......................................................... 17
ARTICLE 5 - DELIVERY, TITLE AND RISK OF LOSS ......................................... 20
ARTICLE 6 - TESTING AND ACCEPTANCE ................................................... 23
ARTICLE 7 - DELAY AND PENALTIES ...................................................... 25
ARTICLE 8 - TRAINING ................................................................. 27
ARTICLE 9 - DOCUMENTATION ............................................................ 27
ARTICLE 10 - FORCE MAJEURE ........................................................... 28
ARTICLE 11 - WARRANTIES, REMEDIES: LIMITATIONS: DISCLAIMERS .......................... 29
ARTICLE 12 - INDEMNIFICATION; LIMITATION OF LIABILITY ................................ 35
ARTICLE 13 - FORECAST ................................................................ 40
ARTICLE 14 - SERVICE AND SUPPORT PLAN ................................................ 40
ARTICLE 15 - PATENT INDEMNITY ........................................................ 41
ARTICLE 16 - CHANGE ORDERS; ORDER CANCELLATION ....................................... 44
ARTICLE 17 - SOFTWARE RIGHT-TO-USE ................................................... 47
ARTICLE 18 - NON-DISCLOSURE OF TECHNICAL INFORMATION AND PROPRIETARY RIGHTS .......... 48
ARTICLE 19 - TAXES ................................................................... 49
ARTICLE 20 - INTENTIONALLY OMITTED ................................................... 50
ARTICLE 21 - INSURANCE ............................................................... 50
ARTICLE 22 - TERMINATION AND DEFAULT ................................................. 51
ARTICLE 23 - INTENTIONALLY OMITTED ................................................... 55
ARTICLE 24 - CONTINUITY FOR SUPPLY OR REPLACEMENT .................................... 55
ARTICLE 25 - SHIPPING ................................................................ 56
ARTICLE 26 - WORK RULES AND SUBCONTRACTORS ........................................... 57
ARTICLE 27 - ADDITIONAL OBLIGATIONS .................................................. 59
ARTICLE 28 - GOVERNMENTAL COMPLIANCE; INDUSTRY STANDARDS; INTERCONNECT ............... 62
ARTICLE 29 - COOPERATIVE ADVERTISING ................................................. 64
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ARTICLE 30 - ASSIGNMENT ................................................... 65
ARTICLE 31 - AUTHORITY .................................................... 67
ARTICLE 32 - ADVERTISING RESTRICTIONS ..................................... 69
ARTICLE 33 - ENTIRETY OF AGREEMENT: NO ORAL CHANGE ........................ 70
ARTICLE 34 - NO WAIVER .................................................... 70
ARTICLE 35 - NOTICES ...................................................... 71
ARTICLE 36 - ATTACHMENTS AND INCORPORATIONS ............................... 72
ARTICLE 37 - HEADINGS ..................................................... 73
ARTICLE 38 - GOVERNING LAW; ARBITRATION ................................... 73
ARTICLE 39 - SEVERABILITY ................................................. 76
ARTICLE 40 - PARTIES ARE NOT PARTNERS ..................................... 77
ARTICLE 41 - DAYS ......................................................... 77
ARTICLE 42 - COUNTERPARTS ................................................. 77
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