SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(Amendment No. 1)
Quarterly Report under Section 13 or
15(d) of the Securities Exchange Act X
of 1934 for the quarterly period
ended June 30, 1998
Or
Transition Report under Section 13
or 15(d) of the Securities Exchange
Act of 1934 for the transition
period from _________ to ___________
Commission File Number 33-32341-D
WORLDPORT COMMUNICATIONS, INC.
(Name of Small Business Registrant as Specified in its Charter)
Delaware 84-1127336
(State or other jurisdiction of (IRS Employer ID Number)
incorporation of organization)
1825 Barrett Lakes Center.,
Suite 100, Kennesaw, Georgia 30144
(Address of principal executive (Zip Code)
offices)
(770) 792-8735
Registrant's telephone number
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past
12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES [ X ] NO [ ]
As of August 7, 1998, the Registrant had 18,096,485 shares of Common Stock
par value $0.0001 outstanding.
Transitional Small Business Disclosure Format
(Check one):
Yes [ ] No [ X ]
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
Exhibit No. Description
10.1* Second Amendment To Employment
Agreement between Phillip S. Magiera
and the Company dated April 1, 1998
10.1(a)* Promissory Note between Phillip S.
Magiera and the Company dated April
1, 1998
10.1(b)* Pledge Agreement made by Phillip S.
Magiera and the Company dated April
1, 1998
10.2* Second Amendment To Employment
Agreement between Paul A. Moore and
the Company dated April 1, 1998
10.2 (a)* Promissory Note between Paul A. Moore
and the Company dated April 1, 1998
10.2(b)* Pledge Agreement made by Paul A.
Moore and the Company dated April 1,
1998
10.3** Master Purchase Agreement Between the
Company and Northern Telecom Inc.,
dated June 3, 1998.
10.4** Master Services Agreement between the
Company and Northern Telecom Inc.
dated June 3, 1998
10.5** Atlantic Crossing/AC-1 Submarine Cable
System Capacity Purchase Agreement
between Global Telesystems Ltd and the
Company dated April 7, 1998
10.6* Credit Agreement the Company and The
Financial Institutions Party Hereto
as Lenders and Bankers Trust Company
as Administrative Agent and
Collateral Agent dated June 23, 1998
27.1* Financial Data Schedule
*Previously filed.
**Filed herewith. Confidential treatment has been requested for portions
of these documents.
Reports on Form 8-K
Form 8-K dated June 25, 1998, filed with the Securities and Exchange Commission
on July 9, 1998, as amended by Form 8-K/A filed with the Securities and Exchange
Commission on August 13, 1998.
Form 8-K filed dated August 3, 1998, with the Securities and Exchange Commission
on August 13, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WORLDPORT COMMUNICATIONS, INC.
Date: September 9, 1998 By: /s/ Phillip S. Magiera
Phillip S. Magiera
Chief Financial Officer and Secretary
CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.
PORTIONS FOR WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE
DENOTED BY [*], [**], OR [***]. MATERIAL OMITTED HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
MASTER PURCHASE AGREEMENT
BETWEEN
WORLDPORT COMMUNICATIONS, INC.
AND
NORTHERN TELECOM INC.
TABLE OF CONTENTS
Articles:
Article 1 - Definitions
Article 2 - Scope of Agreement
Article 3 - Placement of Orders
Article 4 - Price and Payment
Article 5 - Shipment, Title and Risk of Loss
Article 6 - Testing, Turnover and Acceptance
Article 7 - Order Cancellation
Article 8 - Warranty
Article 9 - Nortel's Additional Obligations
Article 10 - Software License
Article 11 - Homologation and Certification
Article 12 - Liability for Bodily Injury, Property Damage and Patent
Infringement
Article 13 - Remedies and Limitation of Liability
Article 14 - Term and Termination
Article 15 - Confidentiality
Article 16 - Miscellaneous
Exhibits:
Exhibit A - Product Annexes including List(s) of Product and Prices
Exhibit B Master Services Agreement
Exhibit C List of Affiliates
Exhibit D - Territorial Limitations
Exhibit E Homologation
Worldport Communications Inc.
MPA
<TABLE>
MASTER PURCHASE AGREEMENT
<CAPTION>
This Master Purchase Agreement ("Agreement"), effective as of the ____ day of ______, 1998, is entered into
by and between WorldPort Communications, Inc. (hereinafter "Company"), a Delaware corporation with its
principal place of business located at 1825 Barrett Lakes Boulevard, Atlanta, Georgia 30144, and Northern
Telecom Inc. (hereinafter "Nortel"), a Delaware corporation with offices located at 2350 Lakeside Boulevard,
Richardson, Texas 75082-4399.
WHEREAS, Company is engaged in providing communication services and products, and providing and
maintaining public and private communication networks; and
WHEREAS, Nortel, in conjunction with Nortel Affiliates, is engaged in the design, development,
manufacture and sale of various products and offers services associated with such products, which can be used
in connection with the communication services, products and networks of Company; and
WHEREAS, Company and Company Affiliates wish to be able to purchase and/or license various products
and services from Nortel and Nortel Affiliates, which Company and Company Affiliates will use for their own
internal use and not for resale or as stock in trade, except that Company may sell, transfer, assign and/or
lease the Products and Services to a Company Affiliate only, and Nortel is willing to sell and/or license
such products to Company, subject to the terms and conditions of this Agreement; and
NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements herein set forth, the
parties agree as follows:
ARTICLE 1. DEFINITIONS
The following words shall have the meanings set forth below. Word in the singular shall be held to include
the plural and vice versa and words of gender shall be held to include the other genders as the context
requires.
1.1"Acceptance" shall mean that either (i) Company has indicated that an ordered Product is operating
substantially in accordance with the applicable Specification; or (ii) an ordered Product has been deemed to
be accepted pursuant to criteria set forth in Article 6.
1.2 "Affiliate" shall mean any entity listed in Exhibit C in which either Nortel or Company
directly or indirectly owns and controls, and continues to own or control, more than fifty percent (50%) of
the shares entitled to elect the board of directors of such entity. Each party agrees that the other party
may add to Exhibit C any entity in which the party directly or indirectly owns and controls, and continues to
own or control, more than fifty percent (50%) of the shares entitled to elect the board of directors of such
entity. Any other entity shall only be added upon mutual consent of the parties in writing. The Affiliates
of Nortel are referred to herein as "Nortel Affiliates", and the Affiliates of Company are referred to herein
as "Company Affiliates".
1.3 "Applications" shall mean any program, product, service, development or invention developed
by a party using the Building Blocks, including any modified or created Building Blocks, created by Company.
1.4 "Building Block(s)" shall mean those Software files provided by Nortel with Modifiable
Software that are manipulatable or which may be created by Company with such Modifiable Software and which
can be used, created or manipulated by Company to create Applications.
1.5 "Confidential Information" shall mean all information, including, without limitation,
specifications, drawings, documentation, know-how and pricing information, of every kind or description which
may be disclosed by one party to the other party in connection with this Agreement; provided that, the
disclosing party shall clearly mark all such information disclosed in writing as the confidential or
proprietary property of the disclosing party and, in the case of oral disclosure, the disclosing party shall
identify the confidential or proprietary nature of any such information at the time of such oral disclosure
and shall provide a written summary (labeled as confidential or proprietary) of the orally disclosed
information to the recipient within fifteen (15) business days following such disclosure.
1.6 "Contract" shall mean an agreement for the supply of Products and/or Services between (i) a
Company Affiliate and (ii) Nortel or a Nortel Affiliate, which comes into effect by the acceptance of an
Order pursuant to the provisions of this Agreement, and which Contract shall be governed by the terms and
conditions of this Agreement; and each reference to "Company" in this Agreement shall for such Contract mean
the ordering Company Affiliate.
1.7 "Customer" shall mean entities to whom Company provides communications services as a result
of Company's internal use of the Products.
1.8 "Customer Information" or "CI" shall mean the information provided by Company to Nortel in
order for Nortel to engineer and/or provide the components of Systems.
1.9 "Documentation" shall mean the documents which Nortel generally makes available to its
customers containing descriptive, operating, installation, engineering and maintenance information for
Products, including Specifications, as such documents may be amended from time to time.
1.10 "Effective Date" shall mean the date this Agreement becomes effective, which shall be the
date first identified above.
1.11 "Ex Works" shall have the meaning ascribed to it in Incoterms 1990.
1.12 "Extension" shall mean Hardware and/or Software which is engineered by Nortel and added to
an Initial System after the Turnover Date of the Initial System.
1.13 "Hardware" shall mean, individually and collectively, the Nortel equipment listed in the
Product Annexes of Exhibit A, and shall be deemed to include any equipment which Nortel adds to its generally
available Hardware price lists or so identifies to Company in a Quotation.
1.14 "Hazardous Material" shall mean any pollutants or dangerous, toxic or hazardous substances
(including without limitation, asbestos) as defined in, or pursuant to the OSHA Hazard Communication Standard
(29 C.F.R. Part 1910, Subpart Z), the Resource Conservation and Recovery Act (15 U.S.C. Section 6901, et
seq.), the Toxic Substances Control Act (15 U.S.C. Global Section 2601, et seq.), the Comprehensive
Environmental Response Compensation and Liability Act (42 U.S.C. Section 9601, et seq.), and any other
federal, state or local environmental law, ordinance, rule or regulation or equivalent law or regulation in
the country to which the Product is shipped by Nortel.
1.15 "Initial System" shall mean Hardware and Software, inclusive of a central processor unit,
included in a configuration which Nortel identifies as a System and which is initially engineered by Nortel
and installed at a specific Installation Site.
1.16 "Installation Site" shall mean the location or facility identified in an Order at which the
applicable Products will be installed.
1.17 "Licensed Software" shall mean the Software which Company has licensed pursuant to this
Agreement.
1.18 "Merchandise" shall mean any Hardware or other parts or components which are not ordered as
part of a System and with respect to which no engineering, installation or other Services are provided by
Nortel.
1.19 "Modifiable Software" shall mean Software, or a portion of Software that is identified as
such by Nortel in its applicable Documentation, which Company may have certain rights to modify and
potentially create Applications or Building Blocks in accordance with the applicable Documentation.
1.20 "Non-licensed Software" shall mean Software for which Company has not yet obtained a license
nor paid applicable right to use fees, but which Software may be included with Software loads delivered to
Company hereunder.
1.21 "Object Code" shall mean Software either written directly, or translated from, Source Code,
which when presented on a suitable medium may be directly executed by and through computer hardware and/or
firmware and which Software may be stored on any storage medium whatsoever.
1.22 "Order" shall mean a numerically controlled purchase authorization document issued by
Company or a Company Affiliate to Nortel or a Nortel Affiliate, specifying the types and quantities of
Products and Services to be furnished by Nortel.
1.23 "Product(s)" shall mean, individually and collectively, the Hardware, Software, and
Documentation.
1.24 "Product Annex" shall mean, with respect to a specific Product, additional or modified terms
and conditions as set forth in Exhibit A, inclusive of but not limited to those that may apply to any Third
Party Hardware or Third Party Software, unique to such Product.
1.25 "Quotation" shall mean a written budgetary or firm price quotation issued by Nortel to
Company or a Company Affiliate for the supply of any Products or Services pursuant to this Agreement.
1.26 "Service(s)" shall mean, individually and collectively, any of the services set forth in
this Agreement that Company may acquire from Nortel, such as but not limited to maintenance, engineering,
installation, training, data management, program management, project management, commissioning, testing,
technical assistance Service with respect to Products and installation, and consulting.
1.27 "Services Software" shall mean that Software and related documentation made available by
Nortel which may be used by Company for estimation, planning or information purposes.
1.28 "Ship Date" shall mean the date as agreed to by the parties on which a Product ordered by
Company is scheduled to be shipped, or in the case of Software which is downloaded, the date upon which such
Software is to be downloaded to the System; however, Ship Date shall not mean the date on which Non-licensed
Software is activated.
1.29 "Software" shall mean (i) computer programs in Object Code form or firmware which (a) are
owned by, or licensed to, Nortel or Nortel Affiliates, (b) reside in Product memories, tapes, disks or other
media, and (c) provide basic logic operating instructions and user-related application instructions, and (ii)
documentation associated with such computer programs which may be furnished by Nortel to Company from time to
time, including both Licensed Software and Non-licensed Software, but in no event shall Software include
Source Code.
1.30 "Software Release" shall mean Software or revisions to Software containing problem fixes,
new features and/or enhancements.
1.31 "Source Code" shall mean Software in assembly language or any higher-level source language
and all available appropriate documentation.
1.32 "Specifications" shall mean with respect to any Product the specifications and/or practices
set forth in Northern Telecom Practices ("NTPs") or similar documents published by Nortel which Nortel
identifies as the standard performance specifications and practices for such Product.
1.33 "System" shall mean a configuration of Hardware and Software providing a specified
functionality and includes an Initial System and its Extensions, if any.
1.34 "Third Party Hardware" shall mean any hardware not of Nortel's manufacture, which shall be
deemed to include any such hardware which Nortel adds to its generally available Third Party Hardware price
lists or so identifies to Company in a Quotation.
1.35 "Third Party Software" shall mean any Software not owned by Nortel and which is included
within Licensed Software or Non-Licensed Software.
1.36 "Territory" shall mean the United States of America, the United Kingdom, the Dominican
Republic, the European Union Member States, Australia and New Zealand, except to the extent that there is a
limitation on Company's ability to acquire Products in a country for Company's own use, as set forth in
Exhibit D.
1.37 "Turnover" shall mean, with respect to any System installed by Nortel, that Nortel has
completed its standard manufacturing test procedures, as applicable, and that the System is ready for
acceptance testing by Company.
1.38 "Turnover Date" shall mean, with respect to any Product installed by Nortel hereunder, the
date on which Nortel provides a notice of Turnover to Company.
ARTICLE 2. SCOPE OF AGREEMENT
2.1 This Agreement sets forth the terms and conditions under which Company or Company Affiliates may order
Products and/or Services from Nortel and Nortel Affiliates. Any Order placed by a Company Affiliate, under
this Agreement, shall be subject to the terms and conditions of this Agreement, as if such Company Affiliate
is the party that executed this Agreement; provided, however, that Nortel has the right to reject any Order
as specified in Section 3.2 and from any Company Affiliate which is otherwise engaged with Nortel or a Nortel
Affiliate in an agreement for the purchase and/or supply of any of the Products or Services provided under
this Agreement. Company or the Company Affiliate, as the case may be, may use the Products itself, including
use to provide services to others, subject to the terms and conditions of this Agreement. Company expressly
represents that it is not buying Products or Services for resale, with the exception that Company may resell,
transfer, assign and/or lease Products or Services to a Company Affiliate only. Each Company Affiliate
expressly represents that it is not (i) buying Products or Services from Nortel or Company for resale or (ii)
executing the transfer, assignment or lease of Products or Services from Company for resale.
2.2 To the extent any terms and conditions set forth in this Agreement are inapplicable to a
Product, the applicable terms and conditions and any additional terms and conditions for such Product shall
be set forth in a Product Annex.
2.3 If specified in a Product Annex as a requirement, Company shall, fifteen (15) days prior to
each calendar quarter, submit to Nortel a consolidated non-binding forecast of Products by geographic region,
that Company anticipates purchasing or licensing over the next four (4) calendar quarters. In addition to
the type, quantity and cumulative dollar amount of Products, the parties may agree upon additional
information to be included in the forecast.
2.4 Unless specifically stated otherwise, all references to prices, charges, fees or other
amounts herein shall be in U.S. dollars and all documentation, correspondence and communication shall be in
the English language. Unless otherwise set forth herein, any reference in this Agreement to Company shall be
deemed to include Company Affiliates, except that any reference to Company's ability to resell, transfer,
assign and/or lease Products and/or Services purchased from Nortel, or any portion thereof, to a Company
Affiliate shall remain the sole right of Company. Any reference to Nortel shall be deemed to include Nortel
Affiliates.
ARTICLE 3. PLACEMENT OF ORDERS
3.1 When Company desires to order Products and/or Services, Company shall submit to Nortel's Director,
Commercial Marketing or such other person as Nortel shall designate, an Order which shall at a minimum
specify the following, if applicable:
(i) the name of the Company Affiliate placing the Order, which shall be a Company Affiliate set forth in
Exhibit C for the country in which the Product is to be placed;
(ii) the types and quantities of Products and Services to be furnished by Nortel;
(iii) the name and address, as set forth in Exhibit C, of the Nortel Affiliate that will
be providing the Products and/or Services being ordered in the country in which the Products
and/or Services are to be placed and/or performed, as appropriate;
(iv) the applicable prices, charges and fees with respect to such Products and Services;
(v) the location or facility to which the Products are to be delivered;
(vi) the incorporation by reference of this Agreement;
(vii) the location at which the Product is to be installed, if known;
(viii) the requested Ship Date and Turnover Date of the System; and
(ix) any other information required under this Agreement to be included in an Order.
3.2 All purchases pursuant to this Agreement shall be made by means of Orders issued from time
to time by Company and accepted by Nortel in writing within fifteen (15) days after receipt of the Order. An
Order submitted by a Company Affiliate pursuant to the terms and conditions of this Agreement, and which
Nortel has accepted, shall constitute a Contract between the Company Affiliate ordering and Nortel or the
applicable Nortel Affiliate. In the event that Nortel fails to provide its acceptance of an Order in writing
within such fifteen (15) day period, such Order shall be deemed to be accepted, provided that no additional
or special terms and conditions have been written on the face of or otherwise incorporated into such Order.
Nortel shall have the right to reject any Order, or the applicable portion of such Order, placed hereunder
from Company or a Company Affiliate, even if such Order is in accordance with the provisions of this Article
3.
3.3 Nortel's Director, Commercial Marketing, or such other person as designated by Nortel, shall
forward the Order to the applicable Nortel Affiliate for fulfillment.
3.4 All Orders issued by Company pursuant to this Agreement shall refer to and specifically
incorporate this Agreement by reference and the terms and conditions herein shall govern the transaction
resulting from such Order; provided that such Order is accepted by Nortel. Preprinted terms and conditions
set forth in Orders issued by Company, or in any prior Quotations, acknowledgments or other related
documentation issued by any party, shall be considered null and void and shall have no force or effect;
provided, however, that any special terms and conditions written on the face of an Order or otherwise
incorporated into such Order shall, upon acceptance in writing by Nortel, and for such Order only, supersede
the specific terms and conditions contained in this Agreement, including all Exhibits attached hereto, which
are in conflict.
3.5 Company may at any time request additions, alterations, deductions or deviations to an
Order, subject to the condition that such changes and any adjustments resulting from such changes, including,
but not limited to, schedules and prices, shall be mutually agreed upon and, if so agreed, subsequently
detailed in a written revision to the applicable Order ("Change Order"). Company acknowledges that a
premium charge may be applied by Nortel should Nortel agree to process a Change Order outside of its standard
Order processing cycle for a Product or in the event that a Change Order requires an additional amount of
work (such as engineering) to be undertaken to comply with such changes.
3.6 If Company desires to receive a budgetary or firm Quotation from Nortel for a Product or
Service, Company shall submit such request in writing to Nortel's Director, Global Accounts, or such other
person as designated by Nortel. The request for Quotation shall include the information listed in Section
3.1, as applicable.
3.7 Nortel shall respond in writing to requests for budgetary Quotations and requests for firm
Quotations. Unless otherwise specified in the firm Quotation, such firm Quotation shall be valid for ninety
(90) days from the date of such Quotation. Budgetary Quotations shall be provided for information and
planning purposes only and shall not be considered to be a final or firm statement binding on either party.
All prices will be quoted in U.S. dollars, unless otherwise agreed. The Quotations shall include the
following information:
(i) Budgetary Quotations
(a) preliminary Hardware and Software lists;
(b) the estimated charges for the Products;
(c) the estimated charges for Services requested; and
(d) any other information requested by Company.
(ii) Firm Quotations
(a) the price to be paid by Company for the Products, after applying the
applicable discounts, if any;
(b) fixed charges for Services requested;
(c) complete Hardware and Software lists and project schedules; and
(d) any other information requested by Company.
3.8 The Ship Date shall be based on Nortel's standard intervals for the applicable Product;
however, the parties shall always mutually agree on the Ship Date and take into consideration any unique
aspect of the applicable project.
3.9 Orders may be issued either electronically, such as through electronic data interchange, or
via traditional manual methods, as mutually agreed to by the parties.
3.10 Company absolutely, irrevocably and unconditionally guarantees the performance of every
Company Affiliate issuing Orders and/or otherwise acting under this Agreement and any Contract created
thereby. Company hereby expressly waives any other diligence, protest or notice as well as any requirement
that Nortel exhaust any remedy or right against such Company Affiliate.
ARTICLE 4. PRICE AND PAYMENT
4.1Nortel shall charge Company for each Product and/or Service ordered by Company in accordance with the
prices set forth in each accepted Order, which prices shall be based upon prices identified in one of (i) a
Product Annex, (ii) a Firm Quotation, (iii) Nortel's then current prices, or (iv) as specified elsewhere in
this Agreement or as otherwise mutually agreed in writing.
4.2 All Products shall be priced and delivered in accordance with Ex Works, Nortel's applicable
facility.
4.3 Nortel's prices, if set forth in Exhibit A, may be revised by Nortel no more than once each
calendar year, by providing sixty (60) days prior written notice to Company. Such notice shall specify the
effective date of the price change and shall apply to all Orders received by Nortel on or after the effective
date of the price change. However, in the event that there is a recognized industry-wide shortage of a
component that is incorporated in a Product, Nortel may increase the price of such Product, following the
provision of written notice to Company fifteen (15) days prior to the effective date of such increase or such
shorter date as is mutually agreed in view of the shortage. The price increase of such Product due to a
component shortage shall be limited to a reasonable amount under the then-current circumstances having regard
for industry conditions for the period of time during which such recognized shortage exists. Following the
implementation of a price increase due to a component shortage, the parties shall jointly review every three
(3) months or at such other time as is mutually agreed, in good faith, whether such component shortage still
exists. If the component shortage has abated, the parties shall jointly determine whether there still is a
need for such price increase. In addition, in the event that worldwide hyperinflation occurs, the parties
shall work together in good faith to determine any applicable increase in prices of affected Products to
cover Nortel's additional costs.
4.4 For all Orders, Nortel shall invoice Company for Products and Services as follows, unless
otherwise agreed to in writing:
(i) for Systems, whether or not installation has been ordered from Nortel, one hundred
percent (100%) of the price of the Products on the Ship Date, one hundred percent (100%) of
the price of any Services upon the date of completion of such Services, except with respect
to installation Services, if any, which shall be invoiced one hundred percent (100%) upon
Turnover;
(ii) for Merchandise or Documentation provided on a furnish-only basis, one hundred
percent (100%) of the price on the Ship Date; and
(iii) for Orders covering Services only, one hundred percent (100%) of the price for such
Services following completion of performance, except for recurring support Services which
shall be billed quarterly in advance unless otherwise agreed. Some Services may be subject
to monthly invoicing as set out in a Product Annex or separate Service agreement. To the
extent such Services are to be invoiced differently than set out in this paragraph (iii),
such differences shall be set forth in the applicable Product Annex or separate Service
agreement and such provisions shall take precedence.
4.5 Each invoice shall be paid in full within thirty (30) days after the date of such invoice.
In the event that Company does not pay an invoice in full within such thirty (30) day period, then Nortel may
charge Company interest on the outstanding portion of such invoice from day thirty one (31) forward, at the
rate of one and one half percent (1.5%) simple compound interest per month, or such lesser amount as may be
the maximum permissible rate under applicable law, until such time as the outstanding invoice is paid. In
addition, Company agrees to pay all collection costs and reasonable legal fees incurred by Nortel as a result
of late payment or non-payment by Company.
ARTICLE 5.SHIPMENT, TITLE AND RISK OF LOSS
5.1 Prior to the Ship Date, Company shall have the right to reschedule any pending Orders;
provided that (i) a minimum period of notice prior to such Ship Date is given to Nortel by Company in
accordance with the applicable Product Annex; and (ii) the new Ship Date is within ninety (90) days of the
original Ship Date. However, each Order may only be rescheduled once. Company shall reimburse Nortel for any
storage fees, insurance and demurrage costs incurred with respect to such rescheduled Orders.
5.2 All Products shall be delivered to Company in accordance with Ex Works and risk of loss and
damage to Products shall be construed as defined therein. Company shall keep such Products fully insured
for the total amount then due Nortel for such Products. Company shall pay transportation charges, including
insurance, associated with the shipment of Products; provided however, that if the parties agree, Nortel
shall prepay transportation charges, and insurance for delivery of Products to the Installation Site or other
delivery location or other designated receiving point as specified in an Order. The charges therefor shall
be invoiced by Nortel and paid by Company to Nortel in accordance with Article 4 above.
5.3 Good title to Hardware furnished hereunder, free and clear of all liens and encumbrances,
shall vest in Company upon full payment to Nortel of the total amount payable by Company for such Hardware and
any related Licensed Software or Services ("Total Fee") furnished by Nortel in connection with such Hardware.
Prior to payment of the Total Fee for the Products and Services in an Order, Company shall not sell or lease
the Hardware, or allow any liens or encumbrances to attach to the Hardware or Software, or remove the
Hardware or Software from the Installation Site without the prior written consent of Nortel, such consent not
to be unreasonably withheld.
5.4 If Company notifies Nortel prior to a Ship Date that Company does not wish to receive such
Products on the Ship Date, or the Installation Site or other delivery location is not prepared in sufficient
time for Nortel to make delivery in accordance with such date, or Company fails to take delivery of any
portion of the Products in an Order when shipped, Nortel may place the applicable Products in storage. In that
event, Company shall be liable for all additional costs thereby incurred by Nortel. Delivery by Nortel of any
Products to a storage location as provided above shall be deemed to constitute delivery of the Products to
Company for purposes of this Agreement, including, without limitation, provisions for payment, invoicing,
passage of risk of loss, and commencement of the warranty period.
5.5 Until the Total Fee is paid, Company grants to Nortel and/or its agents a purchase money
security interest in the Products in an Order and their proceeds or such other similar protection as may be
available in the applicable jurisdiction. Company shall cooperate with Nortel in preserving and perfecting
Nortel's security interest in the Products and Company shall promptly (i) execute and deliver to Nortel such
financing statements as Nortel may require and (ii) execute and deliver to Nortel such other agreements,
documents and instruments as Nortel may require to perfect and maintain the validity, effectiveness and
priority of the security interest created or intended to be created by this Agreement.
Company authorizes Nortel to file one or more financing or continuation statements and amendments
thereto, relating to all or any part of the Products in an Order without signature of the Company where
permitted by law. A carbon, photographic or other reproduction of this Agreement or of any financing statement
covering the Products or any part thereof shall be sufficient as a financing statement and may be filed as a
financing statement.
Company shall not sell, lease or otherwise transfer the Products or any portion thereof, except to
Company Affiliates only, or allow any liens or encumbrances to attach to such Products or any portion thereof
prior to payment in full of the Total Fee. Company Affiliates shall not sell, lease or otherwise transfer the
Products or any portion thereof or allow any liens or encumbrances to attach to such Products or any portion
thereof prior to payment in full of the Total Fee.
5.6.1 Company shall provide Nortel or its subcontractors with access to its Installation Sites or
other Company facilities during the times specified by Nortel and as are reasonably necessary for Nortel to
perform its obligations hereunder. Nortel shall comply with Company's reasonable site and security regulations
of which Nortel is informed by Company.
5.6.2 All sites at which the Products shall be delivered or installed shall be prepared by Company
in accordance with Nortel's standards, including, without limitation, environmental requirements. Prior to
and during installation, Company shall ensure the timely and adequate delivery, installation and functioning
of the electrical and communications connections and other environmental requirements, including but not
limited to, HVAC systems, specified in Nortel's instructions, Specifications, Documentation or in a Product
Annex.
5.6.3 Company shall provide reasonable working space and facilities, including heat, light,
ventilation, telephones, electrical current, waste removal and other necessary utilities, for use by Nortel
personnel performing installation or other Services, and adequate secure storage space, if required by Nortel,
for Products and materials. Company shall also provide adequate security against theft, damage or other loss
for the Products while on Company's Installation Site or other delivery location specified by Company.
5.6.4 Company shall obtain all necessary governmental permits applicable to Company in connection
with the installation, operation, and maintenance of Products furnished hereunder, excluding any applicable
permits required in the normal course of Nortel's doing business. Any information which Nortel reasonably
requests from Company and which is necessary for Nortel to properly install or maintain the Products shall be
provided by Company to Nortel in a timely fashion and in a form reasonably specified by Nortel.
ARTICLE 6. TESTING, TURNOVER AND ACCEPTANCE
6.1If installation Services are ordered by Company, Nortel shall, upon completion of such installation, test
the Product in accordance with Nortel's Turnover procedures to verify that such Products function
substantially in accordance with the applicable Specifications. Upon completion of such verification, Nortel
shall provide to Company a written notice of Turnover. Company shall be permitted an opportunity to have an
appropriately qualified individual in attendance to observe the performance of such tests, however, the
absence of such Company individual for any reason shall not invalidate the tests nor be a reason for Company
to withhold Acceptance.
6.2 Within ten (10) business days after the Turnover Date, Company shall either accept the
Product in writing by execution of a notice of Acceptance, or notify Nortel in writing, specifying in
reasonable detail those particulars in which, in Company's opinion, the Product is not in material
conformance with the Specifications. If Acceptance does not occur within such ten (10) days after the
Turnover Date and Company has not indicated to Nortel in writing its basis for not accepting such Product,
then Acceptance shall be deemed to have occurred.
6.3 If Nortel does not install Products furnished hereunder, Nortel shall, prior to delivery of
the Products, perform such factory tests as Nortel determines to be appropriate in order to confirm that such
Products perform substantially in accordance with the applicable Specifications. Company shall be deemed to
have accepted the Products based upon such tests and Acceptance shall be deemed to have occurred upon the
Ship Date. In the event that Company or any other entity intends to perform installation of Products, (except
for installation of Products which are not permitted to be installed other than by Nortel, as specified in
the applicable Product Annex or Documentation) Company or such entity may be required to complete
prerequisite training or certification prior to Company being allowed to install such Product.
6.4 In the event that Company is utilizing any Product in a revenue-generating capacity,
Acceptance shall be deemed to have occurred without limitation or restriction, upon the date of placement of
such Product into revenue-generating service.
6.5 Products, such as Merchandise, which are purchased separately from a System, shall be deemed
accepted upon the Ship Date. Services which are purchased separately from a Product shall be deemed to be
accepted upon completion of such Services or upon specific milestones as may be identified in a Product
Annex.
6.6 Company shall not unreasonably withhold Acceptance. Nortel shall correct any deficiencies
identified by Company in the manner described in this Article whereby such Products do not materially conform
to the Specifications. When Nortel has corrected such deficiencies, Company shall accept the Products in
writing. Company's failure to either accept or provide notice of non-conformance within the timeframe from
the Turnover Date, as prescribed in Section 6.2, shall constitute Acceptance of the Products.
6.7 Following Acceptance of Products, Company shall execute Nortel's Acceptance notice,
confirming Acceptance without any conditions, restrictions, or limitations of any nature whatsoever.
6.8 Acceptance shall not be withheld or postponed due to:
(i) Deficiencies of such Products resulting from causes not attributable to Nortel, such
as, but not limited to (a) material change or inaccuracy of Customer Information, (b)
inadequacy or deficiencies of any materials, information, facilities or services provided
directly or indirectly by Company and tested in conjunction with the applicable Products, or
spurious outputs from adjacent material, or (c) other conditions external to the Products
which are beyond the limits specified by Nortel in the Specifications for the Products; or
(ii) Minor deficiencies or shortages with respect to such Products which are attributable
to Nortel, but of a nature that do not prevent operation of the Products in revenue
generating service.
6.9 With respect to any deficiencies of the type described in Section 6.8(i), Nortel shall at
Company's request and expense assist Company in the elimination or minimization of any such deficiencies.
With respect to any deficiencies or shortages as described in Section 6.8(ii), Nortel shall, at Nortel's
expense, correct any such deficiencies or shortages within thirty (30) days of the date of Acceptance or as
otherwise agreed by the parties.
6.10 In the event that Company notifies Nortel of non-acceptance of a Product and Nortel
personnel travel to the Installation Site to remedy such non-acceptance and determine that non-acceptance is
due to a deficiency of the type described in Section 6.8(i), Nortel will invoice Company for Nortel's
investigation of the matter, consisting of the standard labor rate for Nortel's personnel who travel to the
Installation Site and the reasonable travel and living expenses incurred by such personnel.
ARTICLE 7. ORDER CANCELLATION
7.1If, prior to the Ship Date, Company cancels all or any part of an Order, Company shall pay to Nortel a
cancellation charge for the Products or each item of Third Party Hardware or Third Party Software that has
been canceled in accordance with the schedule set forth in the applicable Product Annex.
7.2Orders for Products that have been shipped may not be canceled. Furthermore, Orders for Products which
Nortel customizes in accordance with a specific Company request may not be canceled.
ARTICLE 8. WARRANTY
8.1 Nortel warrants that for a period of twelve (12) months from the Ship Date of a System, the Hardware
contained in such System under normal use and service will be free from defective material and faulty
workmanship and shall comply with the applicable Specifications. The warranty period for Merchandise shall be
ninety (90) days from the Ship Date of such Merchandise. The foregoing warranties shall not apply to items
normally consumed during operation of a System such as, but not limited to, lamps and fuses.
8.2 Nortel warrants that any installation Services performed by Nortel with respect to a System will be free
from defects in workmanship for a period of twelve (12) months from the completion date of such Services.
8.3 Nortel warrants that any Licensed Software shall function during the warranty period of the Hardware with
respect to which such Licensed Software is furnished without any material, service-affecting, non-conformance
to the applicable Specifications. Licensed Software that is delivered separately from Hardware is warranted
for a period of twelve (12) months from the applicable Ship Date. If the Licensed Software fails to so
function, Company's exclusive remedy and Nortel's sole obligation under this warranty is for Nortel to
correct such failure through, at Nortel's option, the replacement or modification of the Licensed Software or
such other actions as Nortel reasonably determines to be appropriate, all within a reasonable time having
regard to all of the circumstances and failing which the parties agree to negotiate a commercially reasonable
solution. Any modification to the Software not performed by Nortel, other than with respect to Modifiable
Software, shall void this warranty.
8.4 If Hardware is not free from defects in material or workmanship and fails to comply with the
applicable Specifications during the warranty period, Nortel will repair, replace or modify at its sole
option the defective Hardware so that it substantially complies with the applicable Specifications. The
warranty service shall be performed at the Installation Site or Nortel's facility as determined by Nortel. If
Nortel is unable to repair or modify the defective Hardware within a reasonable period of time so that such
Hardware conforms to the applicable Specifications, Nortel shall replace the defective Hardware with Hardware
that conforms to such Specifications. Replacement Hardware may be new or reconditioned at Nortel's option.
Nortel's sole obligation and Company's exclusive remedy under the warranty provisions of this Article with
respect to Hardware and installation Services shall be limited to repair, modification or replacement of the
defective Hardware or correction of the defective installation Services.
8.5 Notwithstanding the foregoing, the warranty period of Hardware which has been subject to
repair or replacement by Nortel shall commence upon the Ship Date of the repaired or replacement Hardware to
Company and shall expire on the later of ninety (90) days or the last day of the original warranty period
with respect to the Hardware which was repaired or replaced. The warranty period of Licensed Software which
has been corrected, due to a material, service-affecting non-conformance found in such Licensed Software,
shall expire on the later of ninety (90) days from the Ship Date of the corrected Licensed Software to
Company or the last day of the original warranty period with respect to such Licensed Software.
8.6 Nortel warrants that its Products shall comply in all material aspects with all applicable
laws and regulations in force in the country of destination known to Nortel, which are in force on the date
of acceptance of the applicable Order therefor, which laws or regulations directly impose obligations upon
any manufacturer, Nortel or, if applicable, installer of such Products. Upon request therefor, Nortel may
implement such changes as are necessary to comply with any applicable law and/or regulation which becomes
effective after the date of acceptance of the applicable Order; provided that the parties have reached mutual
agreement concerning the cost of such changes and which party will bear them.
8.7 The performance by Nortel of any of its obligations described in this Article 8 shall not
extend the applicable warranty period.
8.8 The warranties set forth in this Article shall not apply to any Products where the defect or
non-conformance is due to (i) accident, fire, explosion, power failure, power surge or other power
irregularity, lightning, alteration, abuse, misuse or repair not performed by Nortel; (ii) improper storage;
(iii) failure to comply with all applicable environmental requirements for the Products as specified by
Nortel or any other applicable supplier, such as but not limited to temperature or humidity ranges; (iv)
improper performance of installation, maintenance, operation or other service in connection with the Product,
provided that such service was not performed by Nortel or on Nortel's behalf; (v) use in conjunction with an
incompatible product or a product not purchased under this Agreement; (vi) any error, act or omission by
anyone other than Nortel; or (vii) where written notice of the defect has not been given to Nortel within the
applicable warranty period. The warranties set forth in this Article shall not apply to Third Party Software
or Third Party Hardware, provided however that Nortel shall assign to Company (to the extent of Nortel's
right to do so) the warranty rights granted to Nortel by the appropriate vendor of such Third Party Software
or Third Party Hardware.
8.9 Unless Nortel elects to repair or replace defective Hardware at Company's facility, all
Hardware to be repaired or replaced, whether in or out of warranty, shall be de-installed and packed by
Company in accordance with Nortel's instructions. Nortel shall use reasonable efforts to ship repaired or
replacement Hardware within thirty (30) days of receipt of the defective Hardware. To facilitate the
processing of the defective Hardware returned hereunder, Nortel may ship replacement Hardware prior to Nortel
receiving the defective Hardware. In the event that Company fails to return defective Hardware and Nortel
has shipped such replacement Hardware, Nortel shall invoice Company at Nortel's applicable then-current
prices for such replacement Hardware, thirty (30) days after the Ship Date of such replacement Hardware. If
mutually agreed, Nortel will make repairs on-site at Nortel's then-current charge for such repairs.
8.10 If the Hardware returned to Nortel pursuant to Section 8.9 is determined by Nortel to be
beyond repair and is outside the warranty period, Nortel shall notify Company and if requested Nortel shall
sell Company replacement Hardware at Nortel's then-current prices for such replacement Hardware.
8.11 Company shall bear risk of loss or damage and shall pay for all transportation charges for
Hardware returned to Nortel and Nortel shall bear risk of loss or damage and pay for transportation charges
for repaired or replacement Hardware shipped to Company. Title to repaired Hardware shall pass to Nortel
upon receipt. Title to replacement Hardware shall pass to Company upon receipt.
8.12 Nortel and Nortel's vendors of Third Party Hardware and Third Party Software, as
appropriate, shall not have any responsibility to Customers for warranties offered by Company to such
Customers and Company hereby indemnifies and holds harmless Nortel and Nortel's vendors, as appropriate, from
any claims, damages or liabilities arising out of, or relating to, any warranties offered by Company to such
Customers.
8.13 THE WARRANTIES, CONDITIONS AND REMEDIES SET FORTH HEREIN CONSTITUTE THE ONLY WARRANTIES,
OBLIGATIONS OR CONDITIONS OF NORTEL WITH RESPECT TO THE PRODUCTS AND SERVICES AND ARE COMPANY'S SOLE AND
EXCLUSIVE REMEDIES IN THE EVENT THAT SUCH WARRANTIES OR CONDITIONS ARE BREACHED. THEY ARE IN LIEU OF ALL
OTHER WARRANTIES OR CONDITIONS, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NORTEL SHALL NOT BE LIABLE
FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST
REVENUES OR PROFITS OR OTHER ECONOMIC LOSS, OF ANY NATURE WHATSOEVER ARISING OUT OF NORTEL'S BREACH OF
WARRANTY OR CONDITION.
ARTICLE 9. NORTEL'S ADDITIONAL OBLIGATIONS
9.1 Nortel shall make training available to representatives of Company with respect to the operation,
configuration, installation, service, maintenance and support of the Products at Nortel's then current prices
and at Nortel's facilities, subject to course and class availability. The training provided under this
Section 9.1 may be provided within the U.S. or at an offshore location, at Nortel's discretion. Nortel shall
provide Company with a certain number of student training days ("Training Credits"), as set forth in the
Product Annexes, to be used by Company in any of Nortel's training courses related to the Products that
Company has purchased. The Training Credits for each Product may only be used in connection with such
Product and must be used within one (1) year from the date such Training Credits were earned, after which
such Training Credits will be forfeited by Company.
9.2 Upon request, Nortel shall provide Company with copies of its then current training
catalogue. Company shall provide Nortel with a reasonable number of names and addresses of people to whom
this catalogue should be sent. Upon the request of Company, Nortel shall provide to Company such additional
training as Company requests, at a time and place mutually agreed upon and at the prices to be quoted for
such training. The cancellation fees set forth in the training catalogues shall apply.
9.3 Nortel shall include its standard Documentation package, if any, with each shipment of
Products. Nortel shall make the Documentation available on its choice of media, which may include CD-ROM or
other electronic media. Nortel shall provide Company with any other Documentation that is ordered at its
then-current prices therefor. Documentation provided via Nortel's CD-ROM media may be printed and copied and
Documentation provided in paper format may be copied, to the extent such Documentation so provides, and only
to the extent such printing or copying is necessary for the operation and maintenance of the Products to
which the Documentation pertains. However, Company may not press any copies of CD-ROM discs.
9.4 During the term of this Agreement, Company may acquire various support Services from Nortel
in connection with the Products that Company acquires from Nortel under this Agreement. These Services
include, but are not limited to the following: technical assistance Services, installation Services, Hardware
maintenance Services, software maintenance Services and parts repair and replacement Services. Certain
support Services that Company may are described in Exhibit B, the Master Services Agreement, which is attached
hereto and incorporated herein. The fees for such support Services, if ascertained upon execution of this
Agreement are set forth in Exhibit B. Fees for any support Services not described in Exhibit B shall be
provided on an as-quoted basis pursuant to Nortel's applicable terms and conditions.
ARTICLE 10. SOFTWARE LICENSE
10.1 Company acknowledges that the Software may contain programs which have been supplied by, and are
proprietary to, Third Party Software vendors. In addition to the terms and conditions herein, Company shall
abide by any additional terms and conditions specified in a Product Annex with respect to any Software
provided by any Third Party Software vendor.
10.2 Upon Company's payment to Nortel of the applicable fees with respect to any Software
furnished to Company pursuant to this Agreement, Nortel hereby grants to Company, subject to the applicable
terms and conditions of this Article 10, a personal, non-exclusive, right and license to use the Object Code
version of the Software furnished to Company only in conjunction with Company's use of the Hardware with
respect to which such Software was furnished for the life of that Hardware as it may be repaired or modified.
Company shall be granted no title or ownership rights to the Software, which rights shall remain in Nortel or
its suppliers.
10.3 As a condition precedent to this license and to the supply of Software by Nortel pursuant to
this Agreement, Nortel requires Company to give proper assurances to Nortel for the protection of the
Software. Accordingly, all Software supplied by Nortel under or in implementation of this Agreement shall be
treated by Company as the exclusive property, and as proprietary and a trade secret, of Nortel and/or its
suppliers, as appropriate, and Company shall: a) hold the Software, including, without limitation, any
methods or concepts utilized therein in confidence for the benefit of Nortel and/or its suppliers, as
appropriate; b) not provide or make the Software available to any person except to its employees on a 'need
to know' basis; c) not reproduce, copy, or modify the Software in whole or in part except as authorized by
Nortel; d) not attempt to decompile, reverse engineer, disassemble, reverse translate, or in any other manner
decode the Software; e) issue adequate instructions to all persons, and take all actions reasonably necessary
to satisfy Company's obligations under this license; and f) forthwith return to Nortel, or with Nortel's
consent destroy i) upon termination of the license for any reason or ii) upon receipt of replacement,
modified, or updated Software, any magnetic tape, disc, semiconductor device or other memory device or system
memory and/or Documentation or other material, including, but not limited to all printed material furnished
by Nortel to Company.
10.4 The obligations of Company hereunder shall not extend to any information or data relating to
the Software which is now available to the general public or becomes available by reason of acts or failures
to act not attributable to Company.
10.5 Nortel may issue updates to the Software from time to time, and, upon Company's payment of
applicable right to use fees, if any, shall license such updates to Company. Nortel shall classify such
updates as either: (i) incremental Software upgrades ("ISUs"), designed to correct any nonconformance to the
applicable Software specifications; or (ii) enhancements which will provide additional features or
functionality ("Enhancements").
Updates classified as ISUs by Nortel will be provided at no cost to Company during the warranty
period for such Licensed Software. The right to use fees for ISUs and Enhancements do not include the price
of any associated hardware that may be required to use such ISUs and Enhancements. Updates classified as
Enhancements by Nortel will be made available to Company at Nortel's applicable right to use fees. In the
event that Nortel determines that an update includes both ISUs and Enhancements, such update shall be made
available to Company. If Company elects to receive the update, Nortel shall invoice Company only for the
right to use fees applicable to the Enhancements contained in such update.
10.6 Neither Company nor any successor to Company's title in the applicable Hardware shall have
the right to (i) assign this license as to the applicable Software to any other person who acquires legal
title to such Hardware, or (ii) sublicense the rights herein granted as to such Software to any other person
who subsequently acquires the right to use such Hardware, unless agreed to in writing by both Nortel and
Company. Such consent shall not be unreasonably withheld.
10.7 Company shall indemnify and hold Nortel and its suppliers, as appropriate, harmless from any
loss or damage resulting from a breach of this Article 10. The obligations of Company under this Article 10
shall survive the termination of the Agreement and shall continue if the Software is removed from service.
Non-Licensed Software
10.8 Certain Software delivered by Nortel may include Non-Licensed Software. Non-Licensed
Software includes (i) any Software for which the applicable right-to-use fees have not been paid, and (ii)
Software for which a periodic right to use fee has expired and the applicable additional periodic right to
use fees have not been paid. Company shall submit to Nortel an Order for any Non-Licensed Software that
Company desires to license or renew.
10.9 When Non-Licensed Software is placed into service, the applicable right to use fees shall be
payable. Company shall also have the option to pay the applicable right to use fees for any Non-Licensed
Software upon installation of a Software load containing such Non-Licensed Software.
10.10 To ensure Company's proper activation and/or usage of only the appropriate Software, Company
shall complete the appropriate form designated by Nortel, prior to the activation and/or usage by Company of
any Non-Licensed Software. Company shall identify all Software desired to be activated and/or used
(including the number of lines or other units activated, if applicable) in each System and shall transmit
such form to Nortel.
10.11 Nortel shall promptly review any form submitted pursuant to Section 10.10 and respond in
writing, identifying whether (i) any applicable prerequisite Hardware or Software is required by Company
prior to activation and/or usage of the applicable Software, or (ii) whether the use of such Software
requires Nortel to determine whether the current system configuration will require additional elements, such
as Hardware, other hardware and/or System memory, prior to activation and/or usage; or (iii) whether Company
can use such Software without the addition of any additional Hardware or Software.
10.12 Nortel reserves the right to access by remote polling any site in which Software was
installed to determine which Software has been activated. Such polling shall be done so as not to
unreasonably interfere with Company's use of the Products.
10.13 Nortel shall issue invoices to Company, in addition to those amounts previously invoiced,
for amounts found to be payable as a result of Company's activation and/or usage of any Software which Nortel
determines as a result of the remote polling of a site and for which Company has not previously paid the
appropriate right to use fee.
10.14 The warranty period for Software activated later than the original Ship Date of the Software
load shall be for the same period as such original Software load and shall not be extended to provide for an
additional period of warranty based upon the date individual features or units are activated and/or utilized
by Company or the date Company pays any applicable right to use fees.
10.15 Nortel shall provide the Software support Services specified in Article 9 or in a Services
agreement, provided that Company maintains the Software at Nortel's current Software release level or within
at least two previous Software release levels, or as otherwise specified in the Services agreement.
Modifiable Software
10.16.1 Notwithstanding anything to the contrary above, upon payment to Nortel of the applicable
fees, Nortel hereby grants to Company, subject to the applicable terms and conditions of this Article 10, a
personal, non-transferable, non-assignable and non-exclusive right and license to modify Licensed Software
which Nortel identifies as modifiable in its Documentation solely for the purpose of modifying and creating
Building Blocks and Applications. Upon the modification or creation of any Applications, or the modification
or creation of any Building Blocks, Nortel shall have no obligations with regard to warranty under Article 8
or indemnity under Article 12 for such Applications or Building Blocks.
10.16.2 Nothing contained in Sections 10.16.1 through 10.16.5 shall transfer, or be deemed to
transfer, or contemplate the transfer of, any rights in or to the Software other than those rights
specifically granted herein, and in particular but without restricting the generality of the foregoing,
Nortel does not in any way transfer any right, title or interest in or to the Software or any element
constituting a portion thereof to Company, other than the right of Company to modify or create Building
Blocks and Applications.
10.16.3 For any Building Blocks and Applications created solely by Company, and for all Company-
modified portions of the Nortel-provided Building Blocks with respect to such modified portion only, Company
shall own all forms of intellectual property rights (including but not limited to patent, trade secret,
copyright and mask rights) pertaining to such Applications, Building Blocks or portions thereof and shall
have the right to file for or otherwise secure and protect such rights. For all such Company created
Applications or Building Blocks, or modified portions of Building Blocks, the parties shall, on a case by
case basis, negotiate in good faith to determine whether Company may desire to license any such Applications
or Building Blocks to Nortel.
10.16.4 For any Application created solely by Nortel and for the Nortel- provided Building Blocks,
Nortel shall own all forms of intellectual property rights (including but not limited to patent, trade
secret, copyright and mask rights) pertaining to such Applications or Building Blocks and shall have the
right to file for or otherwise secure and protect such rights. For all such Nortel Applications or Building
Blocks, Company may license any such additional Nortel Products upon Nortel making such software generally
available to its customers.
10.16.5 In the event that Company and Nortel intend to jointly create Applications or Building
Blocks, the parties shall mutually agree as to applicable terms and conditions.
Services Software
10.17.1 With respect to Services Software, Company shall: i) utilize such Services Software and the
results thereof solely for the purposes described in Section 1.27; and ii) comply with additional terms, if
any, applicable to such Services Software as specified in a Product Annex. Nortel may, at any time and
without liability or obligation to Company, modify the Services Software, any computer equipment of Nortel or
its suppliers used in connection with such Services Software, and identification codes, manuals or other
information or Documentation used in connection with the Services Software.
10.17.2 SERVICES SOFTWARE IS PROVIDED AS IS AND WITHOUT WARRANTY OR CONDITION OF ANY KIND, EITHER
EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE. NORTEL DOES NOT AND CANNOT WARRANT THE PERFORMANCE OR RESULTS THAT MAY BE OBTAINED
BY USING SERVICES SOFTWARE. COMPANY ASSUMES SOLE RESPONSIBILITY FOR THE SELECTION OF THE SERVICES SOFTWARE
TO ACHIEVE COMPANY'S INTENDED RESULTS, AND FOR THE INSTALLATION, USE, AND RESULTS OBTAINED FROM THE SERVICES
SOFTWARE. IN NO EVENT SHALL NORTEL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, OR
CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOST REVENUES OR PROFITS OR OTHER ECONOMIC LOSS OF ANY
NATURE WHATSOEVER ARISING OUT OF COMPANY'S USE OF SERVICES SOFTWARE.
ARTICLE 11. HOMOLOGATION AND
CERTIFICATION
11.1 Nortel hereby warrants that it will comply with the homologation requirements for a Product, unless
otherwise specified in a Product Annex, in each of the countries set forth on Exhibit E.
11.2 In the event that Nortel or a Nortel Affiliate has complied or complies in the future with the
homologation requirements for a Product in any country not set forth on Exhibit E, Nortel shall, to the
extent of its legal right to do so, grant Company the right to use the results of such homologation. Any
costs arising from such grant shall be subject to agreement by the parties prior to such grant being made.
ARTICLE 12. LIABILITY FOR BODILY INJURY, PROPERTY DAMAGE
AND PATENT INFRINGEMENT
12.1 A party hereto shall defend the other party against any suit, claim, or proceeding brought against the
other party for direct damages due to bodily injuries (including death) or damage to tangible property which
allegedly result from the negligence or willful misconduct of the defending party in the performance of this
Agreement. The defending party shall pay all litigation costs, reasonable attorney's fees, settlement
payments and such direct damages awarded or resulting from any such suit, claim or proceeding.
12.2 Nortel shall defend Company against any suit, claim or proceeding brought against Company
alleging that the sale to, or use by Company of, any Products, excluding Third Party Hardware or Third Party
Software, furnished hereunder infringes any patent ("Infringement Claim"). Nortel shall pay all litigation
costs, reasonable attorney's fees, settlement payments and damages awarded or resulting from any such suit,
claim or proceeding. With respect to Third Party Hardware or Third Party Software, Nortel shall assign any
rights with respect to infringement of patents granted to Nortel by the supplier of such items to the extent
of Nortel's right to do so.
12.3 Nortel's cumulative liability, pursuant to this Article 12 and including its costs and
expenses incurred in satisfying its obligations set forth below, shall not exceed one hundred percent (100%)
of the purchase price of the Product giving rise to the Infringement Claim.
12.4 Nortel shall not be liable and Company shall indemnify Nortel for any costs incurred by
Nortel or liabilities of Nortel arising under this Article in excess of the amounts so stated above.
12.5 Nortel shall have no liability, in respect of any Infringement Claim based on the use of a
Product in the event that such Product: (a) is manufactured, designed or supplied by Nortel in accordance
with any design or any special instruction furnished by Company, (b) is used by Company in a manner or for a
purpose not contemplated by this Agreement, (c) is used by Company in combination with other products not
provided by Nortel, including, without limitation, any software developed solely by Company through the
permitted use of Products furnished hereunder, provided that the Infringement Claim arises from such
combination or the use thereof, (d) is modified by Company where such modification is not authorized by
Nortel, or (e) is used or located by Company in a location other than the location in which and for which it
was supplied by Nortel. In the excepted cases stated above, Company shall indemnify and hold Nortel harmless
against any loss, cost, expense, damage, settlement or other liability, including, but not limited to,
attorneys' fees, which may be incurred by Nortel with respect to any suit, claim, or proceeding described in
this Section 12.5.
12.6 Nortel shall not be liable for, and Company shall indemnify Nortel in respect of, any
damages awarded based on Company's willful, knowing or deliberate infringement of a patent, copyright, trade
secret, trademark or other proprietary right where such infringement results in a pecuniary damage award.
12.7 Nortel may provide Company with notice of an actual or potential Infringement Claim. Nortel
shall consult with Company regarding the Infringement Claim and the course of action to be pursued as a
result thereof. In the event that the parties fail to agree on a satisfactory course of action for dealing
with the matter, Company may either:
return to Nortel the affected portion of the Product(s) in return for a refund of the
depreciated value (as carried on the books of Company) of the Product(s) so
returned; or
(ii) continue to use the Product(s) at Company's own risk.
12.8 Nortel shall not be liable for, and Company shall indemnify Nortel in respect of any
Infringement Claim(s) where Nortel has provided notice to Company of the Infringement Claim(s) and Company
elects to continue its use of the Product(s) covered by the Infringement Claim.
12.9 If as a result of an Infringement Claim, other than those contemplated above, an injunction
is obtained against Company's use of any Product, Nortel shall, at Nortel's option:
(i) procure for Company the right to continue using the alleged infringing
Product(s);
(ii) replace or modify the same with equivalent or better Product(s) so that
Company's use is non-infringing; or
(iii) accept return of the affected portion of the Product(s) and refund to
Company the depreciated value (as carried on the books of Company) of the Product(s)
so returned.
12.10 The defense of any claim which is predominantly covered by the provisions of this Agreement
shall be controlled by the party upon whom the majority of the ultimate liability is likely to be imposed.
Such controlling party shall give the other party a reasonable opportunity to participate in negotiation or
defense of the claim so that such other Party may reasonably protect its own interests. Neither Party shall
be liable for any settlement obligation incurred without its written consent.
12.11 Company shall waive any and all claims that Company may have against Nortel that Company may
have due to any use by Company of Modifiable Software and any modification Company may have made to a Product
as a result of such use. Further, Company shall be responsible for any additional hardware, software or
services required as a result of such use.
12.12 THE REMEDIES SET FORTH IN THIS ARTICLE 12 ESTABLISH THE ENTIRE OBLIGATION OF THE PARTIES IN
REGARD TO CLAIMS RELATING TO INTELLECTUAL PROPERTY RIGHTS INCLUDING CLAIMS DIRECTED TO THE INFRINGEMENT OF
PATENTS, COPYRIGHT, TRADE SECRETS AND OTHER PROPRIETARY RIGHTS. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR FOR LOST REVENUES, PROFITS OR OTHER
ECONOMIC LOSSES, ARISING FROM SUCH INFRINGEMENTS AND/OR OTHER MATTERS, OTHER THAN AS SPECIFICALLY SET FORTH
HEREIN.
ARTICLE 13.REMEDIES AND LIMITATION OF LIABILITY
13.1 Nortel shall have the right to suspend its performance, upon written notice to Company, and forthwith
remove and take possession of all Products that shall have been delivered to Company, if, prior to payment to
Nortel of any amounts due pursuant to this Agreement with respect to such Products, Company shall (a) become
insolvent or bankrupt or cease, be unable, or admit in writing its inability, to pay all debts as they
mature, or make a general assignment for the benefit of, or enter into any arrangement with, creditors, (b)
authorize, apply for, or consent to the appointment of, a receiver, trustee, or liquidator of all or a
substantial part of its assets or have proceedings seeking such appointment commenced against it which are
not terminated within sixty (60) days of such commencement, or (c) file a voluntary petition under any
bankruptcy or insolvency law or under the reorganization or arrangement provisions of the United States
Bankruptcy Code or any similar law of any jurisdiction or have proceedings under any such law instituted
against it which are not terminated within sixty (60) days of such commencement.
13.2 In the event of any material breach of this Agreement which shall continue for thirty (30)
or more days after written notice of such breach (including a reasonably detailed statement of the nature of
such breach) shall have been given to the breaching party by the aggrieved party, the aggrieved party shall
be entitled at its option to avail itself of any and all remedies available at law or equity, except as
otherwise limited in this Agreement.
13.3 Nothing contained in Section 13.2 or elsewhere in this Agreement shall make Nortel liable
for any indirect, incidental, punitive, special or consequential damages of any nature whatsoever for any
breach of this Agreement whether the claims for such damages arise in tort (including negligence regardless
of degree of fault), contract, or otherwise.
13.4 Nortel shall not be liable for any additional costs, expenses, losses or damages resulting
from errors, acts or omissions of Company, including, but not limited to, inaccuracy, incompleteness or
untimeliness in the provision of information by Company to Nortel or fulfillment by Company of any of its
obligations under this Agreement. Company shall pay Nortel the amount of any such costs, expenses, losses or
damage incurred by Nortel.
13.5 Any action for breach of this Agreement or to enforce any right hereunder shall be commenced
within two (2) years after the cause of action accrues or it shall be deemed waived and barred, except any
action for nonpayment by Company of any prices, charges, fees or other amounts payable hereunder may be
brought by Nortel at any time permitted by applicable law, and Nortel may suspend performance of any of its
obligations hereunder until all such payments are made.
ARTICLE 14. TERM AND TERMINATION
14.1 This Agreement will be in effect from the Effective Date for a period of eighteen (18) months (the
"Original Term"). Thereafter, this Agreement shall automatically renew for one (1) year terms (each, a
"Renewal Period" and collectively and together with the Initial Term, the "Term"), unless either party
provides the other party with written notice of its intent not to renew at least sixty (60) days prior to the
end of the Original Term or any Renewal Period.
14.2 Either party may delay performance under this Agreement or terminate this Agreement, in
whole or in part, in the event of a default by the other, provided that the non-defaulting party so advises
the defaulting party in writing of the event of alleged default and the defaulting party does not remedy the
alleged default within thirty (30) days after written notice thereof. If the alleged default is not capable
of being remedied within thirty (30) days, the defaulting party must commence to remedy the alleged default
within such thirty (30) day period and provide to the non-defaulting party a plan for timely remedying the
alleged default in order to avoid termination. A default shall include:
(i) a party's insolvency or initiation of bankruptcy or receivership proceedings
by or against a party or the execution of an assignment for the benefit of
creditors; or
either party's material breach of any of the terms or conditions hereof including the
failure to make any payment when due.
14.3 The expiration or termination of this Agreement for any cause shall not release either party
from:
any obligations and duties remaining under any Order entered into prior to such expiration
or termination;
any liability which at the time of termination has already accrued to the other party, or,
which thereafter may accrue in respect to any event prior to termination; or
any liability from any obligation specified in Section 16.18 below to survive expiration or
termination.
ARTICLE 15. CONFIDENTIALITY
15.1 Each party which receives the other party's Confidential Information shall use reasonable
care to hold such Confidential Information in confidence and not disclose such Confidential Information to
anyone other than to its employees and employees of a Company Affiliate or a Nortel Affiliate, as applicable,
with a need to know. A party that receives the other party's Confidential Information shall not reproduce
such Confidential Information, except to the extent reasonably required for the performance of its
obligations pursuant to this Agreement and in connection with any permitted use of such Confidential
Information.
15.2 Company shall take reasonable care to use Nortel's Confidential Information only for study,
operating, or maintenance purposes in connection with Company's use of Products furnished by Nortel pursuant
to this Agreement.
15.3 Notwithstanding the foregoing, either party shall be free to use that portion of the
Confidential Information which may be retained in intangible form by those employees who have had access to
the Confidential Information, for any purpose, including use in the development, manufacture, marketing and
maintenance of its products and service. The marketing of any product or service, including the dissemination
of supporting documentation, which inherently discloses the disclosing party's Confidential Information shall
not be deemed a breach by the recipient of such obligations; provided however, that ownership of the
Confidential Information and all intellectual property rights to such Confidential Information remain with
the disclosing party.
15.4 The obligations of either party pursuant to this Article 15 shall not extend to any
Confidential Information which recipient can demonstrate through written documentation was already known to
the recipient prior to its disclosure to the recipient and without confidential obligations was known or
generally available to the public at the time of disclosure to the recipient, becomes known or generally
available to the public (other than by act of the recipient) subsequent to its disclosure to the recipient,
is disclosed or made available in writing to the recipient by a third party having a bona fide right to do so
and without similar confidentiality obligations, is independently developed by recipient, or is required to
be disclosed by process of law, provided that the recipient shall notify the disclosing party promptly of any
such subpoena or other process of law requiring disclosure.
ARTICLE 16. MISCELLANEOUS
16.1 Publicity - A party shall not release any advertising or other publicity relating to this Agreement or
the contents hereof wherein such other party may reasonably be identified without the prior written approval
of the other party. In addition, each party shall take reasonable precautions to keep the existence and the
contents of this Agreement confidential so long as this Agreement remains in effect and for a period of five
(5) years thereafter, except as may be otherwise expressly provided in this Agreement or as may be reasonably
required to enforce this Agreement by law.
16.2 Applicable Law - The validity, construction and performance of this Agreement shall be
governed by and interpreted in accordance with the laws of the State of New York, without giving effect to
the principles of conflict of laws thereof except to the extent that any mandatory provisions of local laws
in any country take precedence over the provisions of this Agreement and New York law. The United Nations
convention on Contracts for the International Sale of Goods shall not apply to this Agreement.
16.3 Effects of Headings - All headings used herein are for index and reference purposes only,
and shall not be given any substantive effect. This Agreement has been created jointly by the parties and no
rule of construction requiring interpretation against the drafter of this Agreement shall apply in its
interpretation.
16.4.1 Assignment - Other than as explicitly stated below, neither party may assign or transfer
this Agreement or any of its rights hereunder without the prior written consent of the other party, such
consent not to be unreasonably withheld. A change in control of Company shall be deemed an assignment
hereunder. A change in control shall occur if ownership or control of more than fifty percent (50%) of the
shares of the Company entitled to elect the board of directors changes during the term of this Agreement.
Company's consent shall not be required for any assignment or transfer by Nortel (a) to any Nortel Affiliate
of all or any part of this Agreement or of Nortel's rights hereunder, or (b) to any third party of Nortel's
right to receive any monies ("Receivables") which may become due to Nortel pursuant to this Agreement.
16.4.2 Company hereby consents to the sale of Receivables by Nortel without the necessity for any
further notice and without any qualification on such consent. Company grants permission for Nortel to
disclose the provisions of this Agreement to Companies and prospective Companies 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.
16.5 Subcontracting - Nortel may subcontract any of its obligations under this Agreement, but no
such subcontract shall relieve Nortel of primary responsibility for performance of its obligations.
16.6 Non-Waiver - The failure by either party hereto at any time to require performance by the
other party or to claim a breach of any provision of this Agreement shall not be construed as affecting any
subsequent breach or the right to require the performance with respect thereto or to claim a breach with
respect thereto.
16.7 Relationship of the Parties - The provisions of this Agreement shall not be construed to
establish any form of partnership, agency or other joint venture of any kind between Nortel and Company, nor
to constitute either party as the agent, employee or legal representative of the other. All persons
furnished by either party to accomplish the intent of this Agreement shall be considered solely as the
furnishing party's employees or agents and the furnishing party shall be solely responsible for compliance
with respect to its employees with all laws, rules and regulations involving, but not limited to, employment
of labor, hours of labor, working conditions, workers' compensation, payment of wages, and withholding and
payment of applicable taxes, including, but not limited to income taxes, unemployment taxes, and social
security taxes.
16.8 Force Majeure - If the performance by a party of any of its obligations under this Agreement
shall be interfered with by reason of any circumstances beyond the reasonable control of that party,
including without limitation, fire, explosion, acts of God, war, revolution, civil commotion, unavailability
of supplies or sources of energy, power failure, breakdown of machinery, delays regarding zoning, easements
or deed restrictions, any legal proceedings between parties unrelated to the parties hereto or labor
difficulties, including without limitation, strikes, slowdowns, picketing or boycotts, then that party shall
be excused from such performance for a period equal to the delay resulting from the applicable circumstances
and such additional period as may be reasonably necessary to allow that party to resume its performance.
With respect to labor difficulties as described above, a party shall not be obligated to accede to any
demands being made by employees or other personnel.
16.9 Taxes - Company shall at Nortel's direction promptly reimburse Nortel or pay directly to the
applicable government or taxing authority all taxes and charges arising hereunder, including, without
limitation, penalties and interest, except for taxes computed upon the net income of Nortel. If Company
provides Nortel with a certificate of exemption for the applicable taxes, then Nortel shall not invoice
Company for such taxes.
16.10.1 Hazardous Materials - Prior to issuing any Order for Services to be performed at Company's
facilities, Company shall identify and notify Nortel in writing of the existence of all Hazardous Materials
which Nortel may encounter during the performance of such Services, including without limitation, any
Hazardous Materials contained within any equipment to be removed by Nortel.
16.10.2 If Company breaches its obligations pursuant to Section 16.10.1, (a) Nortel may discontinue
the performance of the applicable Services until all the Hazardous Materials have been removed or abated to
Nortel's satisfaction by Company at Company's sole expense, and (b) Company shall defend, indemnify and hold
Nortel harmless from any and all damages, claims, losses, liabilities and expenses, including without
limitation, attorney's fees, which arise out of Company's breach of such obligations.
16.11 Notice - All notices required or permitted to be given hereunder shall be in writing and
shall be deemed given when delivered (i) by hand, or (ii) by facsimile, transmission (confirming the same by
mail) or (iii) by certified or next-day mail addressed as follows:
If to Company:
WorldPort Communications, Inc.
1825 Barrett Boulevard
Atlanta, Georgia 30144
USA
Attention: Chief Executive Officer
Facsimile: (770) 792-0676
If to Nortel:
Northern Telecom Inc.
2350 Lakeside Boulevard
Richardson, Texas 75082-4399
USA
Attention: Vice President and General Manager
Facsimile: 972-685-3284
Either party hereto may change its address by a notice given to the other party hereto in the manner set
forth above.
16.12 Information and Documentation - Company shall provide any information and/or documentation
that Nortel reasonably requests from Company and that is necessary for Nortel to properly perform any of its
obligations hereunder. Such information shall be provided in a form reasonably specified by Nortel by the
dates specified by Nortel.
16.13.1 Export - Company shall not export any Products or technical data received from Nortel
pursuant to this Agreement, or release any such Products or technical data with the knowledge or intent that
such Products or technical data will be exported or transmitted to any country or to foreign nationals of any
country, except in accordance with applicable laws or regulations concerning the exporting of such items
arising in the U.S., Canada or other such jurisdiction affecting the Products, and with written consent of
Nortel. Company shall obtain all authorizations from the appropriate government in accordance with
applicable law prior to exporting or transmitting any such Products or technical data. Nortel will provide
such assistance as Company reasonably requests to obtain such authorizations.
16.13.2 Nortel acknowledges that the transfer of Systems or components thereof, and associated
documentation outside of Canada or the United States may be subject to the specific approval of the
applicable Software suppliers and other suppliers. All such approvals, if applicable, shall be conditions
precedent to any of the obligations of Nortel hereunder respecting such Systems or component thereof and
associated documentation. To the extent any such conditions exist, they shall be listed in the applicable
Product Annex.
16.14 Severability - If any provision of this Agreement is declared or determined to be invalid or
unenforceable under applicable law, the remaining provisions shall continue in full force and effect and the
parties shall substitute for the invalid provision a valid provision which most closely approximates the
economic effect and intent of the invalid provision.
16.15 Modification of Agreement - No addition to or modification of this Agreement shall be
effective or binding on either of the parties hereto unless reduced to writing and executed by the respective
duly authorized representatives of each of the parties hereto.
16.16 Regulatory Compliance - In the event of any change in the Specifications or Nortel's
manufacturing or delivery processes for any Products as a result of the imposition of requirements by any
government, Nortel may upon notice to Company, increase its prices, charges and fees to cover the added costs
and expenses directly and indirectly incurred by Nortel as a result of such change.
16.17 Entire Agreement - This Agreement, including the Exhibits and Annexes which are attached
hereto and incorporated herein, comprises all the terms, conditions and agreements of the parties hereto with
respect to the subject matter hereof and supersedes all previous negotiations, proposals, commitments,
writings, publications and understandings of any nature whatsoever. No Exhibits or Annexes modified or
created subsequent to the execution of this Agreement shall be deemed to be incorporated into this Agreement
unless mutually agreed in a writing and executed by a duly authorized representative of each party. Company
hereby acknowledges and agrees that it has not relied on any representations or warranties other than those
expressly set forth in this Agreement.
16.18 Survivorship - Any terms of this Agreement which by their nature are intended to survive
including, but not limited to, Articles 8, 10, 12, 13, 15 and 16 and Sections 4.5, 9.3, 10.15, and 14.3 shall
survive the termination or expiration of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement.
NORTHERN TELECOM INC. WORLDPORT COMMUNICATIONS, INC.
By: ______________________________ By: _____________________________
Name: ______________________________ Name:___________________________
Title: ______________________________ Title:____________________________
Date: ______________________________ Date:___________________________
EXHIBIT A
PRODUCT ANNEXES
EXHIBIT A
PRODUCT ANNEX A.1
CARRIER NETWORKS PRODUCTS
The supplemental terms and conditions provided below take precedence over any conflicting terms and
conditions specified, in the Sections noted below or elsewhere, in the Agreement as such terms and conditions
apply to the Carrier Networks Products.
Article 2, Scope of Agreement
With regard to the subject of Scope of Agreement, the following shall apply:
1. During the Term, Company commits to purchase no less than (i) [*] DMS-GSP Initial Switching
Systems, as described in Attachment 1, Part I, Section I 1.0, Attachment 2, Part I, Section I 1.0 and
Attachment 3, Part I, Section I 1.0 (each, a "DMS-GSP"), and (ii) [*] of Product described in
Attachments 1, 2 and 3 and other Nortel products as added to this Agreement by subsequent amendments, for
delivery and installation in Company's facilities to be designated by Company in its Order (the
"Commitment"). Company shall pay the prices, charges and fees for such DMS-GSPs in accordance with
Article 4 of the Agreement.
2. In the event that Company does not satisfy the Commitment set forth in Section 1 of this Product Annex A.1,
upon the expiration of the Term, Nortel shall invoice Company for, and Company shall pay to Nortel, an
amount equal to the price difference obtained by subtracting: (i) the total prices paid by Company for
all Products purchased by Company during the Term, excluding any and all Orders cancelled pursuant to
Article 7 of the Agreement during the Term, from (ii) [*] . Company shall pay to
Nortel the entire invoiced amount within thirty (30) days after the date of invoice.
3. From time to time during the Term, Company may license any of the DMS-GSP Optional Software listed in
Attachment 1, Part IV ("Optional Software"). In the event that Company includes an Order for Optional
Software with Company's Order for a DMS-GSP, Company shall receive a [*] discount off the
licensing fees for such Optional Software as set forth in Attachment 1, Part IV. For all other Optional
Software Orders issued by Company during the Term, Company shall receive a [*] discount off the
licensing fees set forth in Attachment 1, Part IV.
4. From time to time during the Term, Company may issue an Order for no more than [*]
generic Software upgrades per each DMS-GSP purchased by Company under this Product Annex A.1 (the
"Software Upgrade"). Each Software Upgrade shall be within two (2) previous Software releases of
Nortel's then current Software load for each DMS-GSP. Company shall be responsible for payment of the
purchase price for any gating Hardware required for Software feature functionality of the Software
Upgrade. Nortel shall issue an invoice to Company for the price of any gating Hardware that is required
for Software feature functionality of the Software Upgrade, and Company shall pay to Nortel the entire
invoiced amount within thirty (30) days after the date of invoice. Company may elect to issue an Order
for each Software Upgrade upon the Acceptance date of Company's initial DMS-GSP purchased under this
Product Annex A.1. In the event that Company has not issued an Order for delivery and installation of a
Software Upgrade prior to the expiration of the Term, Company shall forfeit any and all remaining
Software Upgrades.
5.0 From time to time during the Term, Company may purchase any DMS-GSP Extension Ports, as described in
Attachment 1, Part II, Section II 1.0 ("Extension Ports"), for delivery and installation in Company's
facilities to be designated by Company in its Order. Company shall pay the prices, charges and fees
for such Extension Ports in accordance with Article 4 of the Agreement.
6.0 Exclusive Purchases - In consideration of Nortel's pricing of its Products and Services as set forth
and described in this Product Annex, and in order to ensure that Nortel's warranty and other support
obligations pursuant to the Agreement apply to all telecommunications switching Products installed in
the Company's network, Company shall purchase, during the Term, any and all of its requirements for
telecommunications switching Products and Services that will be used by Company for the same or
similar purposes as the telecommunications switching Products and Services currently produced by or
to be produced by Nortel, including, but not limited to the telecommunications switching Products and
Services set forth in this Product Annex. In the event that Nortel, as a result of a substantial
difference in the purchase price of the telecommunications switching Products and Services, is unable
to provide such telecommunications switching Products and Services to Company, and both parties have
made a good faith effort to negotiate a resolution, Nortel will consent to Company's purchase of
substitute products from other vendors.
7.0 In the event that Company purchases telecommunications switching Products and/or Services from
another vendor in violation of this section, Nortel may change the purchase price(s) and/or warranty
terms of its telecommunications switching Products and Services, which are set forth in this Product
Annex, for any purchases that occur after Company violates the exclusivity provision of this section.
Article 2, Section 2.3
With regard to the subject of forecasts, the following shall apply:
Company shall submit a non-binding forecast to Nortel, in accordance with Section 2.3 of the
Agreement.
Article 4, Section 4.4
With regard to the subject of invoicing for Products and Services, the following modified terms shall apply:
For all Orders, Nortel shall invoice Company for Products and Services as follows, unless otherwise
agreed to in writing:
(i) for Systems, whether or not installation has been ordered from Nortel, eighty
percent (80%) of the price of the Products on the Ship Date and twenty percent (20%) of the
price of the Products on the Acceptance date, and one hundred percent (100%) of the price of
any Services upon the date of completion of such Services, except with respect to
installation Services, if any, which shall be invoiced one hundred percent (100%) upon
Turnover;
Article 4, Section 4.6
With regard to the subject of price changes, the following shall apply:
The parties agree that the price and configuration for a DMS-GSP as set forth in Part I, Section I
1.2 of Attachment 1 to Exhibit A, Product Annex A.1 may vary depending upon the in-country
specifications required by the governmental authorities of such country (the "In-County Specifics").
Such variations may include, but are not limited to, the signaling specifications and Software
features required by a governmental authority; additional hardware and Software prices, fees and
charges; and travel, living and labor expenses and charges. Nortel shall indicate upon each affected
invoice to Company any such price change(s) as are necessitated by and charged to Company as a result
of In-Country Specifics.
Article 4, Section 4.7
With regard to the subject of prices, the following shall apply:
The parties agree that the prices, charges and fees provided in Attachments 1, 2 and 3 are the
prices, charges and fees for Products to be delivered and installed in the respective countries
specified therein. In the event that Company desires prices, charges and fees for Products to be
delivered and installed in a country not provided for in Attachments 1, 2 or 3, Company shall submit
a written request to Nortel for a budgetary or firm Quotation pursuant to the procedures set forth in
Article 3.6.
Article 5, Section 5.1
With regard to the subject of rescheduling of an Order, the following shall apply:
Sixty (60) days notice must be provided to Nortel prior to the scheduled Ship Date.
Article 6, Section 6.3
With regard to the subject of Company performing installation of any of the Carrier Networks Products, the
following shall apply:
Company shall not have the right to perform installation Services.
Article 7, Section 7.1
With regard to the subject of Company's cancellation of an Order, the following shall apply:
In the event that Company cancels all or part of an Order, Company shall pay to Nortel a cancellation
charge for each Product or each item of Third Party Hardware or Third Party Software that has been canceled in
accordance with the following schedule:
- 90 days or more prior to Ship Date 100% of Engineering Charges
- 60-89 days prior to Ship Date 15% of Order amount
- 30-59 days prior to Ship Date 25% of Order amount
- 0-29 days prior to Ship Date 35% of Order amount
Article 8, Section 8.1
With regard to the subject of System Hardware and Merchandise warranty, the following modified terms shall
apply:
Nortel warrants that for a period of thirty six (36) months from the Ship Date of a System, the
Hardware contained in such System under normal use and service will be free from defective material
and faulty workmanship and shall comply with the applicable Specifications. The warranty period for
Merchandise shall be ninety (90) days from the Ship Date of such Merchandise. The foregoing
warranties shall not apply to items normally consumed during operation of a System such as, but not
limited to, lamps and fuses.
Article 8, Section 8.3
With regard to the subject of Software warranty, the following modified terms shall apply:
Nortel warrants that any Licensed Software shall function during the warranty period of the Hardware
with respect to which such Licensed Software is furnished without any material, service-affecting,
non-conformance to the applicable Specifications. Licensed Software that is delivered separately
from Hardware is warranted for a period of thirty six (36) months from the applicable Ship Date. If
the Licensed Software fails to so function, Company's exclusive remedy and Nortel's sole obligation
under this warranty is for Nortel to correct such failure through, at Nortel's option, the
replacement or modification of the Licensed Software or such other actions as Nortel reasonably
determines to be appropriate, all within a reasonable time having regard to all of the circumstances
and failing which the parties agree to negotiate a commercially reasonable solution. Any
modification to the Software not performed by Nortel, other than with respect to Modifiable Software,
shall void this warranty.
Article 9, Section 9.1
With regard to the subject of Training Credits, the following shall apply:
With each DMS-GSP purchased hereunder, Nortel shall provide to Company a total of one hundred (100)
student training days.
Article 10, Section 10.1
With regard to the subject of Third Party Software, the following shall apply:
With regard to the Helmsman documentation, Company shall abide by the terms and conditions specified
in Attachment 4 to this Product Annex A.1, in addition to the terms and conditions of the Agreement.
At the present time, there are no additional terms with regard to Third Party Hardware that must be
observed by Company.
Attachment 1 to Exhibit A, Product Annex A.1
Part I. DMS-GSP Intial System
(DMS-GSP Switching System for U.S.A. only)
Nortel shall engineer the DMS-GSP Initial System provided hereunder in
accordance with Nortel's standard engineering practices and procedures.
After Nortel has engineered each DMS-GSP Initial System ordered by Buyer
hereunder, Nortel shall provide Company with a detailed list of the DMS-GSP
Initial System components.
I1.0 DMS-GSP Initial System (12,480 DS-0 T1/E1 Port Model)
I1.1 DMS-GSP Initial System Includes:
A DMS-GSP Initial System (12,480 DS-0 Port Model) shall consist of the following configuration of
major Equipment and Software:
a) SuperNode front end, 128K Dual Bay Enhanced Network, Link Peripheral Processor and other
common Equipment as follows:
One (1) SuperNode equipped with BRISC-70EM processor with 512 Meg on board memory per
plane and two (2)
SLM III.
One (1) 128K Dual Bay Enhanced Network to support an Initial System wired and equipped for
28,320 ports (30-NT9X40BB, 2-NT9X45BA).
One (1) Link Peripheral Processor (LPP) individually wired and equipped with twenty (20)
Link Interface Units (LIU7s) and two (2) Ethernet Interface Unit (EIUs). (Note: The
LPP has a maximum capacity of thirty-six (36) Application Specific Units (ASUs).
Additional ASUs may be purchased at an additional price
Two (2) ISME frames equipped with service and test circuits as well as two
(2) Enhanced Digital Recorded Announcement Machine
circuit packs each providing a
maximum of four (4) minutes of recordable announcement time.
Two (2) Input Output Equipment (IOE) frames equipped with:
-> One (1) Mag Tape Device
-> Four (4) SCSI Disk Drive Units
-> Three (3) IOC Shelves
-> Four (4) I/O Controllers providing sixteen (16)
switch interface ports
-> Four (4) X.25 Automatic File Transfer circuit packs
Two (2) MIS frames equipped with required inverts and terminal block
assemblies.
One (1) Meridian Cabinet Spare Storage (MCSS) cabinet to house
switch spares.
One (1) Power Distribution Center (PDC) frames equipped with "A" and "B"
feed fuse panels & fuses as required.
Miscellaneous Switch Room Equipment as follows:
-> One (1) Maintenance Administration Positions & no MAP Furniture
-> Two (2) UDS 2440 Modems
-> Two (2) RTIF Terminals
-> One (1) MAP Printers
-> One (1) Helmsman Workstation and CD-ROM documentation disk
-> One (1) Hardcopy of Northern Telecom Practices documentation
b) SuperNode Trunk configurable equipment as follows:
Seven (7) DTEI frames wired for 6,240 DS-0 (T1s) ports equipped with the
following:
-> Five thousand two hundred eighty (5,280) DS-0 SS7 ports
-> Nine hundred sixty (960) DS-0 PRI ports.
-> Two (2) NT6X62AB STR for reorigination per DTC7 peripheral.
-> Two (2) NT6X70AA Continuity Tone Detector for SS7 per DTC7
peripheral.
-> Two (2) NTBX01BA Enhanced ISDN signaling for ISDN functionality
per DTCI peripheral.
Note: None of the T1 ports are equipped NTAX78AA for Dialable Wideband
Service and NT6X50EC for echo cancellation (not compatible with DMS-GSP).
Seven (7) DTEO frames wired for 6,240 DS-0 (E1s) ports equipped with the
following:
-> Six thousand two hundred forty (6,240) DS-0
CCS7 ports
-> Two (2) NT6X70AA Continuity Tone Detector for CCS7 per DTCO7
peripheral.
-> Two (2) NT6X28AC/NTCX50AB circuit packs for echo cancellation
control per DTCO7 peripheral.
Note: None of the E1 ports are equipped with NTBX01BA for ISDN
functionality.
c) DMS-GSP Standard Software Features as set forth in Part III of this Attachment.
d) Nortel's standard compliment of switch spares.
I1.2 DMS-GSP
Initial System (12,480 T1/E1 Port Model) Pricing
The price for each DMS-GSP (12,480 DS-0 Port Model) is [*].
II1.0 Fully Wired and Fully Equipped DTEI Port Extension
II1.1 DTEI Port Extension Fully Wired and Fully Equipped
All prices for DTEI Port Extensions are sold in minimum increments of nine hundred sixty (960)
DS-0 ports, are configured for SS7/PTS or ISDN signaling at Company's request and include the
following:
a) DTEI hardware and XPM+;
b) Either UTR, STR, CTD for DTCs configured for SS7 or PTS capability, or UTR and ISDN
pre-processor circuit packs configured for ISDN PRI capability;
c) Any required
128K Dual Bay ENET expansion, MS, or processor memory expansions for
the BRISC70EM processor;
d) Any required Service/Test Circuits;
e) Any ENET software license fee;
f) Any required Power Distribution Center (PDC) Equipment;
g) Spare circuit packs, if required, based on Nortel's standard engineering sparing
guidelines;
h) Engineering, installation, commissioning, program management and freight; and
i) Optional DTEI Equipment as outlined in Section II 1.2 below at defined pricing
levels.
II1.2 DTEI Port Extension Prices
Trunk Type Extension Price
SS7 Trunking Port (DTC7) [*] port
PRI Trunk Port/Long Distance (DTCI) [*] port
II2.0 Fully Wired and Fully Equipped DTCO Port Extension
II2.1 DTEO Port Extension Fully Wired and Fully Equipped
All prices for DTEO Port Extensions are sold in minimum increments of nine hundred sixty (960)
DS-0 ports, are configured for SS7/PTS or ISDN signaling at Company's request and include the
following:
a) DTEO hardware and XPM+;
b) Either UTR, STR, or CTD for DTCOs configured for SS7 or PTS capability, or UTR and
ISDN pre-processor circuit packs configured for ISDN PRI capability;
c) Any required
128K Dual Bay ENET expansion, MS, or processor memory expansions for
the BRISC70EM processor;
d) Any required Service and/or Test Circuits;
e) Any ENET software license fee;
f) Any required Power Distribution Center (PDC) Equipment;
g) Spare circuit packs, if required, based on Nortel's standard engineering sparing
guidelines;
h) Engineering, installation, commissioning, program management and freight; and
i) Optional DTEO Equipment as outlined in Section II 2.2 below at defined pricing
levels.
II2.2 DTEO Port Extension Prices
Trunk Type Extension Price
CSS7 Trunking Port (DTCO) [*] port
PRI Trunk Port/Long Distance (DTCOI) [*] port
III1.0 DMS-GSP Standard Software
Features
III1.1 DMS-GSP Base and Optional Software Features included in the Initial System
Price
The following represents the DMS-GSP GCS00003 Base Software Features that are included in the price
of the
DMS-GSP Initial System (
12,480 Port Model) set forth in Part I, Section I 1.2 or Section I
2.2, above. The following is a list of Software only and does not include any and/or all required
Equipment for feature functionality.
Feature/ Package Description
BASE0001 Base
BASE0009
Supernode Series 70 EM Processor
BASE0011 CO Data Chg. Capture
TEL00001 TEL Telecom Layer
TEL00002 C7 Channelized Access
TEL00003 Gateway Screening
TEL00004 256 C7 Route Sets
TEL00005 Multi-Point MTP Code
TEL00006 C7 Link Prot. Testor
TEL00007 C7 Link Fault Locator
TEL00008 TEL CCS7 Base
TEL00009 C7 Network Integrity Items
TEL00010 Multiple CCS7 Network Address
ISDN0001 ISDN Platform Supt DMS-250
ISP700001 ISP7 Base ISUP
ISP70002 Hop Counter
GCSB0001 DMS-GCS Base Functional Group
License to the following Optional Software Features will be provided as part of the DMS-GSP Initial
System price set forth in Part I, Section I 1.2 or Section I 2.2, above:
GCSB0002 CLI Screening
GCSB0003 AUTH Screening
GCSB0005 Switch based VPN
GCSB0007 Freephone
GCSB0015 Calling Card
GCSB0016 Account Code Expansion
GCSB0018 EIU for OAM&P
GCSB0019 CLI Screening on Freephone #s
GCSB0020 ISDN CLIP/CLIR
GWAY001 Gateway Functions
GWAY002 Echo Control
GTON003 Per country downloadable tones
GSS70006 Per country ISUP/TUP
GSS70002 ANSI ISUP+
GSS70003 ETSI ISUP v1
GPRI0004 Per country PRI
GPRI0002 ANSI PRI
GCAS0003 GCAS per country CAS
TBD
Feature Group D (currently not available
but will be provided upon general availability
V1.0 DMS-GSP Optional Software Features
IV1.1The following represents GCS00003 Optional Software Features that are NOT included in the price
of the
DMS-GSP Initial System (
12,480 Port Model) set forth in Part I, Section I 1.2 or Section I
2.2, above. The following Software represents those feature packages that may be ordered by Company
at an additional price for a DMS-GSP Initial System and does not include any and/or all required
Equipment to provide feature functionality.
GCAS0009 GCAS AC15 [*]
GCAS0011 GCAS CR11 HK CAS
GCAS0012 GCAS CR12 HK CAS
GCAS0010 GCAS DC5
GCIN0001 GCIN GCS Base CS1 SSP
GCIN0003 GCIN EDP 4
GCIN0004 GCIN EDP 5
GCIN0005 GCIN EDP 6
GCIN0006 GCIN EDP 7
GCIN0007 GCIN FCI Billing
GCIN0008 GCIN Internal IP
GCIN0002 GCIN TDP 3
GCSB0001 GCSB GCS Base
GCSB0003 GCSB AUTH Screening
GCSB0002 GCSB CLI Screening
GCSB0015 GCSB Calling Card
GCSB0007 GCSB GCSB Freephone
GCSB0014 GCSB GSM Roaming
GCSB0005 GCSB Switch based VPN
GPRI0004 GPRI per country PRI
GPRI0008 GPRI DASS2
GPRI0007 GPRI DPNSS
GPRI0005 GPRI Dutch PRI
GPRI0006 GPRI HK PRI CR13
GSS70006 GSS7 per country Num7
GSS70005 GSS7 BTUP
GSS70007 GSS7 HK ISUP CR14
GTON0003 GTON per country TONE
GTON0015 GTON Austrian tones
GTON0013 GTON Belgian tones
GTON0011 GTON Brazilian tones [*]
GTON0014 GTON German tones
GTON0005 GTON Hong Kong Tones
GTON0009 GTON Irish tones
GTON0008 GTON Italian tones
GTON0004 GTON Netherlands Tones
GTON0010 GTON Spanish tones
GTON0012 GTON Swiss tones
GTON0006 GTON UK Tones
GWAY0001 GWAY Gateway Functions
TEL00001 TEL Telecom Layer
TEL00002 TEL C7 Chan-lized Access
TEL00007 TEL C7 Link Flt. Locator
TEL00006 TEL C7 Link Prot. Tester
TEL00009 TEL C7 Network Integrity
TEL00004 TEL C7 Routset Increment
TEL00008 TEL CCS7 Base
TEL00003 TEL Gateway Screening
TEL00005 TEL Multi-Point MTP Code
TEL00010 TEL Multiple CCS7 rk
ISDN0001 ISDN Platform Supt
ISP70001 ISP7 Base ISUP
ISP70003 ISP7 Aut Cngst Cntrls
ISP70002 ISP7 Hop Counter
ISP70004 ISP7 TFP/TFC Rtng Opts
IV1.2 The labor price for activating the optional Software features set forth in Part IV, Section
IV 1.1, outside of a Generic Software upgrade is [*] for the first feature and
[*] for each additional feature requested in the same Order. There is no labor charge for
activating the above optional Software features when activated in conjunction with a Generic Software
upgrade.
Nortel shall engineer the DMS-GSP Initial System provided hereunder in
accordance with Nortel's standard engineering practices and procedures.
After Nortel has engineered each DMS-GSP Initial System ordered by Buyer
hereunder, Nortel shall provide Company with a detailed list of the DMS-GSP
Initial System components.
I1.0 DMS-GSP Initial System (12,480 DS-0 E1 Port Model)
I1.1 DMS-GSP
Initial System Includes:
A DMS-GSP Initial System (12,480 DS-0 Port Model) shall consist of the following configuration of
major Equipment and Software:
a) SuperNode front end, 128K Dual Bay Enhanced Network, Link Peripheral Processor
and
other common Equipment as follows:
One (1) SuperNode equipped with BRISC-70EM processor with 512 Meg on board
memory per plane and two (2) SLM III.
One (1) 128K Dual Bay Enhanced Network to support an Initial System wired and equipped for
28,320 ports (30-NT9X40BB, 2-NT9X45BA).
One (1) Link Peripheral Processor (LPP) individually wired and equipped with twenty (20)
Link Interface Units (LIU7s) and two (2) Ethernet Interface Unit (EIUs). (Note: The
LPP has a maximum capacity of thirty-six (36) Application Specific Units (ASUs).
Additional ASUs may be purchased at an additional price.
Two (2) Integrated Service Module cabinets (CISM) equipped with service
and test circuits as well as two (2) Enhanced Digital Recorded Announcement Machine
circuit packs each providing a maximum of four minutes of recordable announcement
time.
Two (2) Input Output Equipment cabinets (CIOE) equipped with:
-> One (1) Mag Tape Device
-> Four (4) SCSI Disk Drive Units
-> Three (3) IOC Shelves
-> Four (4) I/O Controllers providing sixteen (16) interface ports
-> Two (2) X.25 Automatic File Transfer circuit packs
Two (2) Misc Equipment cabinets (CMIS) equipped with required inverters and
terminal block assemblies.
One (1) Miscellaneous Spare Storage cabinet (CMSS) to house switch
spares.
One (1) Power Distribution Center (CPDC) cabinet equipped with "A" and
"B" feed fuse panels & fuses as required.
Miscellaneous Switch Room Equipment as follows:
-> One (1) Maintenance Administration Positions & MAP Furniture
-> Two (2) UDS 2440 Modems
-> Four (4) RTIF Terminals
-> Two (2) MAP Printers
-> One (1) Helmsman CD-ROM documentation disk
b) SuperNode Trunk configurable equipment as follows:
Thirteen (13) CDTO cabinet wired for twelve thousand four hundred eighty
DS-0
(E1s) ports and equipped with the following.
-> Twelve thousand four hundred eighty DS-0 (E1s) ports .
-> Two (2) NT6X70AA Continuity Tone Detector for CCS7 per CDTO
peripheral.
-> Two (2) NT6X28AC/NTCX50AB circuit packs for echo cancellation
control per CDTO peripheral.
Note: None of the E1 ports are equipped with NTBX01BA for ISDN
functionality.
c) DMS-GSP Standard Software Features as set forth in Part III of this Attachment.
d) Nortel's standard compliment of switch spares.
I1.2 DMS-GSP
Initial System (12,480 E1 Port Model) Pricing
The price for each DMS-GSP (12,480 DS-0 Port Model) is [*] .
II1.0 Fully Wired and Fully Equipped CDTO Port Extension
II1.1 CDTO Port Extension Fully Wired and Fully Equipped
All prices for CDTO Port Extensions are sold in minimum increments of nine hundred sixty (960)
DS-0 ports, are configured for SS7/PTS or ISDN signaling at Company's request and include the
following:
a) CDTO hardware and XPM+;
b) Either UTR, STR, or CTD for DTCOs configured for SS7 or PTS capability, or UTR and
ISDN pre-processor circuit packs configured for ISDN PRI capability;
c) Any required
128K Dual Bay ENET expansion, MS, or processor memory expansions for
the BRISC70EM processor;
d) Any required Service and/or Test Circuits;
e) Any ENET software license fee;
f) Any required Power Distribution Center (CPDC) Equipment;
g) Spare circuit packs, if required, based on Nortel's standard engineering sparing
guidelines;
h) Engineering, installation, commissioning, program management and freight; and
i) Optional CDTO Equipment as outlined in Section II 1.2 below at defined pricing
levels.
II1.2 CDTO Port Extension Prices
Trunk Type Extension Price
CCS7 Trunking Port (CDTO) [*] port
PRI Trunk Port/Long Distance (CDTO) [*] port
III1.0 DMS-GSP Standard Software
Features
III1.1 DMS-GSP Base and Optional Software Features included in the Initial System
Price
The following represents the DMS-GSP GCS00003 Base Software Features that are included in the price
of the
DMS-GSP Initial System (
12,480 Port Model) set forth in Part I, Section I 1.2 above. The
following is a list of Software only and does not include any and/or all required Equipment for
feature functionality.
Feature/ Package Description
BASE0001 Base
BASE0009 Supernode Series 70 EM Processor
BASE0011 CO Data Chg. Capture
TEL00001 TEL Telecom Layer
TEL00002 C7 Channelized Access
TEL00003 Gateway Screening
TEL00004 256 C7 Route Sets
TEL00005 Multi-Point MTP Code
TEL00006 C7 Link Prot. Testor
TEL00007 C7 Link Fault Locator
TEL00008 TEL CCS7 Base
TEL00009 C7 Network Integrity Items
TEL00010 Multiple CCS7 Network Address
ISDN0001 ISDN Platform Supt DMS-250
ISP700001 ISP7 Base ISUP
ISP70002 Hop Counter
GCSB0001 DMS-GCS Base Functional Group
License to the following Optional Software Features will be provided as part of the DMS-GSP Initial
System price set forth in Part I, Section I 1.2 above:
GCSB0002 CLI Screening
GCSB0003 AUTH Screening
GCSB0005 Switch based VPN
GCSB0007 Freephone
GCSB0015 Calling Card
GCSB0016 Account Code Expansion
GCSB0018 EIU for OAM&P
GCSB0019 CLI Screening on Freephone #s
GCSB0020 ISDN CLIP/CLIR
GWAY001 Gateway Functions
GWAY002 Echo Control
GTON003 Per country downloadable tones
GSS70006 Per country ISUP/TUP
GSS70002 ANSI ISUP+
GSS70003 ETSI ISUP v1
GPRI0004 Per country PRI
GPRI0002 ANSI PRI
GCAS0003 GCAS per country CAS
IV1.0 DMS-GSP Optional Software Features
IV1.1 The following represents GCS00003 Optional Software Features that are NOT included in the
price of the DMS-GSP
Initial System ( 12,480 Port Model) set forth in Part I, Section I 1.2 above.
The following Software represents those feature packages that may be ordered by Company at an
additional price for a
DMS-GSP Initial System and does not include any/all required Equipment to
provide feature functionality.
GCAS0009 GCAS AC15 [*]
GCAS0011 GCAS CR11 HK CAS
GCAS0012 GCAS CR12 HK CAS
GCAS0010 GCAS DC5
GCIN0001 GCIN GCS Base CS1 SSP
GCIN0003 GCIN EDP 4
GCIN0004 GCIN EDP 5
GCIN0005 GCIN EDP 6
GCIN0006 GCIN EDP 7
GCIN0007 GCIN FCI Billing
GCIN0008 GCIN Internal IP
GCIN0002 GCIN TDP 3
GCSB0001 GCSB GCS Base
GCSB0003 GCSB AUTH Screening
GCSB0002 GCSB CLI Screening
GCSB0015 GCSB Calling Card
GCSB0007 GCSB GCSB Freephone
GCSB0014 GCSB GSM Roaming
GCSB0005 GCSB Switch based VPN
GPRI0004 GPRI per country PRI
GPRI0008 GPRI DASS2
GPRI0007 GPRI DPNSS
GPRI0005 GPRI Dutch PRI
GPRI0006 GPRI HK PRI CR13
GSS70006 GSS7 per country Num7
GSS70005 GSS7 BTUP
GSS70007 GSS7 HK ISUP CR14
GTON0003 GTON per country TONE
GTON0015 GTON Austrian tones
GTON0013 GTON Belgian tones
GTON0011 GTON Brazilian tones
GTON0014 GTON German tones
GTON0005 GTON Hong Kong Tones
GTON0009 GTON Irish tones
GTON0008 GTON Italian tones [*]
GTON0004 GTON Netherlands Tones
GTON0010 GTON Spanish tones
GTON0012 GTON Swiss tones
GTON0006 GTON UK Tones
GWAY0001 GWAY Gateway Functions
TEL00001 TEL Telecom Layer
TEL00002 TEL C7 Chan-lized Access
TEL00007 TEL C7 Link Flt. Locator
TEL00006 TEL C7 Link Prot. Tester
TEL00009 TEL C7 Network Integrity
TEL00004 TEL C7 Routset Increment
TEL00008 TEL CCS7 Base
TEL00003 TEL Gateway Screening
TEL00005 TEL Multi-Point MTP Code
TEL00010 TEL Multiple CCS7 rk
ISDN0001 ISDN Platform Supt
ISP70001 ISP7 Base ISUP
ISP70003 ISP7 Aut Cngst Cntrls
ISP70002 ISP7 Hop Counter
ISP70004 ISP7 TFP/TFC Rtng Opts
IV1.2 The labor price for activating the optional Software features set forth in Part IV, Section
IV 1.1, outside of a Generic Software upgrade is [*] for the first feature and [*]
for each additional feature requested in the same Order. There is no labor charge for activating the
above optional Software features when activated in conjunction with a Generic Software upgrade.
Nortel shall engineer the DMS-GSP Initial System provided hereunder in
accordance with Nortel's standard engineering practices and procedures.
After Nortel has engineered each DMS-GSP Initial System ordered by Buyer
hereunder, Nortel shall provide Company with a detailed list of the DMS-GSP
Initial System components.
I1.0 DMS-GSP Initial System (12,480 DS-0 E1 Port Model)
I1.1 DMS-GSP
Initial System Includes:
A DMS-GSP Initial System (12,480 DS-0 Port Model) shall consist of the following configuration of
major Equipment and Software:
a) SuperNode front end, 128K Dual Bay Enhanced Network, Link Peripheral Processor
and
other common Equipment as follows:
One (1) SuperNode equipped with BRISC-70EM processor with 512 Meg on board
memory per plane and two (2) SLM III.
One (1) 128K Dual Bay Enhanced Network to support an Initial System wired and equipped for
28,320 ports (30-NT9X40BB, 2-NT9X45BA).
One (1) Link Peripheral Processor (LPP) individually wired and equipped with twenty (20)
Link Interface Units (LIU7s) and two (2) Ethernet Interface Unit (EIUs). (Note: The
LPP has a maximum capacity of thirty-six (36) Application Specific Units (ASUs).
Additional ASUs may be purchased at an additional price.
Two (2) Integrated Service Module cabinets (CISM) equipped with service and test
circuits as well as
two (2) Enhanced Digital Recorded Announcement Machine circuit
packs each providing a maximum of four minutes of recordable announcement time.
Two (2) Input Output Equipment cabinets (CIOE) equipped with:
-> One (1) Mag Tape Device
-> Four (4) SCSI Disk Drive Units
-> Three (3) IOC Shelves
-> Four (4) I/O Controllers providing sixteen (16) interface ports
-> Two (2) X.25 Automatic File Transfer circuit packs
Two (2) Misc Equipment cabinets (CMIS) equipped with required inverters and
terminal block assemblies.
One (1) Miscellaneous Spare Storage cabinet (CMSS) to house switch spares.
One (1) Power Distribution Center (CPDC) cabinet equipped with "A" and "B" feed
fuse panels & fuses as required.
Miscellaneous Switch Room Equipment as follows:
-> One (1) Maintenance Administration Positions & MAP Furniture
-> Two (2) UDS 2440 Modems
-> Four (4) RTIF Terminals
-> Two (2) MAP Printers
-> One (1) Helmsman CD-ROM documentation disk
b) SuperNode Trunk configurable equipment as follows:
Thirteen (13) CDTO cabinet wired for
twelve thousand four hundred eighty DS-0
(E1s) ports and equipped with the following.
-> Twelve thousand four hundred eighty DS-0 (E1s) ports .
-> Two (2) NT6X70AA Continuity Tone Detector for CCS7 per CDTO
peripheral.
-> Two (2) NT6X28AC/NTCX50AB circuit packs for echo cancellation control
per CDTO peripheral.
Note: None of the E1 ports are equipped with NTBX01BA for ISDN functionality.
c) DMS-GSP Standard Software Features as set forth in Part III of this Attachment.
d) Nortel's standard compliment of switch spares.
I1.2 DMS-GSP Initial System (12,480 E1 Port Model) Pricing
The price for each DMS-GSP (12,480 DS-0 Port Model) is .
II1.0 Fully Wired and Fully Equipped CDTO Port Extension
II1.1 CDTO Port Extension Fully Wired and Fully Equipped
All prices for CDTO Port Extensions are sold in minimum increments of nine hundred sixty (960)
DS-0 ports, are configured for SS7/PTS or ISDN signaling at Company's request and include the
following:
a) CDTO hardware and XPM+;
b) Either UTR, STR, or CTD for DTCOs configured for SS7 or PTS capability, or UTR and ISDN
pre-processor circuit packs configured for ISDN PRI capability;
c) Any required 128K Dual Bay ENET expansion, MS, or processor memory expansions for the
BRISC70EM processor;
d) Any required Service and/or Test Circuits;
e) Any ENET software license fee;
f) Any required Power Distribution Center (CPDC) Equipment;
g) Spare circuit packs, if required, based on Nortel's standard engineering sparing
guidelines;
h) Engineering, installation, commissioning, program management and freight; and
i) Optional CDTO Equipment as outlined in Section II 1.2 below at defined pricing levels.
II1.2 CDTO Port Extension Prices
Trunk Type Extension Price
CCS7 Trunking Port (CDTO) port
PRI Trunk Port/Long Distance (CDTO)port
III1.0 DMS-GSP Standard Software
Features
III1.1 DMS-GSP Base and Optional Software Features included in the Initial System
Price
The following represents the DMS-GSP GCS00003 Base Software Features that are included in the price
of the
DMS-GSP Initial System (
12,480 Port Model) set forth in Part I, Section I 1.2 above. The
following is a list of Software only and does not include any and/or all required Equipment for
feature functionality.
Feature/ Package Description
BASE0001 Base
BASE0009 Supernode Series 70 EM Processor
BASE0011 CO Data Chg. Capture
TEL00001 TEL Telecom Layer
TEL00002 C7 Channelized Access
TEL00003 Gateway Screening
TEL00004 256 C7 Route Sets
TEL00005 Multi-Point MTP Code
TEL00006 C7 Link Prot. Testor
TEL00007 C7 Link Fault Locator
TEL00008 TEL CCS7 Base
TEL00009 C7 Network Integrity Items
TEL00010 Multiple CCS7 Network Address
ISDN0001 ISDN Platform Supt DMS-250
ISP700001 ISP7 Base ISUP
ISP70002 Hop Counter
GCSB0001 DMS-GCS Base Functional Group
License to the following Optional Software Features will be provided as part of the DMS-GSP Initial
System price set forth in Part I, Section I 1.2 above:
GCSB0002 CLI Screening
GCSB0003 AUTH Screening
GCSB0005 Switch based VPN
GCSB0007 Freephone
GCSB0015 Calling Card
GCSB0016 Account Code Expansion
GCSB0018 EIU for OAM&P
GCSB0019 CLI Screening on Freephone #s
GCSB0020 ISDN CLIP/CLIR
GWAY001 Gateway Functions
GWAY002 Echo Control
GTON003 Per country downloadable tones
GSS70006 Per country ISUP/TUP
GSS70002 ANSI ISUP+
GSS70003 ETSI ISUP v1
GPRI0004 Per country PRI
GPRI0002 ANSI PRI
GCAS0003 GCAS per country CAS
MPA/Global /Ex E
IV1.0 DMS-GSP Optional Software Features
IV1.1 The following represents GCS00003 Optional Software Features
that are NOT included in the price of the DMS-GSP Initial System (12,480 Port
Model) set forth in Part I, Section I 1.2 above. The following Software
represents those feature packages that may be ordered by Company at an
additional price for a DMS-GSP Initial System and does not include
any/all required Equipment to provide feature functionality.
GCAS0009 GCAS AC15
GCAS0011 GCAS CR11 HK CAS
GCAS0012 GCAS CR12 HK CAS
GCAS0010 GCAS DC5
GCIN0001 GCIN GCS Base CS1 SSP
GCIN0003 GCIN EDP 4
GCIN0004 GCIN EDP 5
GCIN0005 GCIN EDP 6
GCIN0006 GCIN EDP 7
GCIN0007 GCIN FCI Billing
GCIN0008 GCIN Internal IP
GCIN0002 GCIN TDP 3
GCSB0001 GCSB GCS Base
GCSB0003 GCSB AUTH Screening
GCSB0002 GCSB CLI Screening
GCSB0015 GCSB Calling Card
GCSB0007 GCSB GCSB Freephone
GCSB0014 GCSB GSM Roaming
GCSB0005 GCSB Switch based VPN
GPRI0004 GPRI per country PRI
GPRI0008 GPRI DASS2
GPRI0007 GPRI DPNSS
GPRI0005 GPRI Dutch PRI
GPRI0006 GPRI HK PRI CR13
GSS70006 GSS7 per country Num7
GSS70005 GSS7 BTUP
GSS70007 GSS7 HK ISUP CR14
GTON0003 GTON per country TONE
GTON0015 GTON Austrian tones
GTON0013 GTON Belgian tones
GTON0011 GTON Brazilian tones
GTON0014 GTON German tones
GTON0005 GTON Hong Kong Tones
GTON0009 GTON Irish tones
GTON0008 GTON Italian tones
GTON0004 GTON Netherlands Tones
GTON0010 GTON Spanish tones
GTON0012 GTON Swiss tones
GTON0006 GTON UK Tones
GWAY0001 GWAY Gateway Functions
TEL00001 TEL Telecom Layer
TEL00002 TEL C7 Chan-lized Access
TEL00007 TEL C7 Link Flt. Locator
TEL00006 TEL C7 Link Prot. Tester
TEL00009 TEL C7 Network Integrity
TEL00004 TEL C7 Routset Increment
TEL00008 TEL CCS7 Base
TEL00003 TEL Gateway Screening
TEL00005 TEL Multi-Point MTP Code
TEL00010 TEL Multiple CCS7 rk
ISDN0001 ISDN Platform Supt
ISP70001 ISP7 Base ISUP
ISP70003 ISP7 Aut Cngst Cntrls
ISP70002 ISP7 Hop Counter
ISP70004 ISP7 TFP/TFC Rtng Opts
IV1.2 The labor price for activating the optional Software features set forth in Part IV, Section IV 1.1, outside of a
Generic Software upgrade is for the first feature and for each additional
feature requested in the same Order. There is no labor charge for activating the above optional Software features
when activated in conjunction with a Generic Software upgrade.
Attachment 4 to Exhibit A, Product Annex A.1
HELMSMAN TERMS and CONDITIONS
Certain documentation with respect to the Products may be
made available to Company on CD-ROM pursuant to the terms and conditions set
forth below.
1. DEFINITIONS
1.1 "CD-ROM" shall mean a compact disk with read-only memory.
1.2 "CD-ROM Software" shall mean the computer programs which provide
basic logic, operating instructions or user-related application instructions
with respect to the retrieval of CD-ROM Documentation, along with the
documentation used to describe, maintain and use such computer programs.
1.3 "CD-ROM Documentation" shall mean the documentation that Nortel
makes available to its customers on CD-ROM with respect to DMS-250, DMS-300,
and/or DMS-500 Systems.
2. SCOPE
2.1 With the delivery of each Initial System ordered by Company,
Nortel shall deliver a CD-ROM on which the appropriate CD-ROM Documentation is
contained and a user manual which shall set forth the procedures by which
Company may use the CD-ROM Software to access the CD-ROM Documentation.
2.2 Company shall be solely responsible for obtaining, at its cost and
expense, any computer or other equipment and software required to use the CD-
ROM, CD-ROM Software and/or CD-ROM Documentation.
2.3 Company may order additional CD-ROMs from Nortel at Nortel's then
current fees therefor, and any such additional CD-ROMs shall be subject to
these terms and conditions.
3. LICENSE
3.1 Upon delivery of the CD-ROM, Nortel shall grant to Company a non-
exclusive, non-transferable and non-assignable license, subject to these terms
and conditions:
(a) to use the CD-ROM Software solely to access the CD-ROM Documentation; and
(b) to use the CD-ROM Documentation solely to operate and maintain the Initial System with which
it was delivered.
Company acknowledges that, as between Nortel and Company, Nortel retains title to and all
other rights and interest in the CD-ROM Software and CD-ROM Documentation. Company shall
not modify, translate or copy the CD-ROM Software or CD-ROM Documentation without Nortel's
prior written consent. Company shall hold secret and not disclose to any person, except
Company's employees with a need to know, any of the CD-ROM Software or CD-ROM
Documentation.
3.2 Company shall not sell, license, reproduce or otherwise convey or directly or
indirectly allow access to the CD-ROM Software or CD-ROM Documentation to any other
person, firm, corporation or other entity.
3.3 Except to the extent expressly set forth in this Attachment, Nortel shall have
no obligations of any nature whatsoever with respect to the CD-ROM Software or the CD-ROM
Documentation.
4. DISCLAIMER OF WARRANTY AND LIABILITY
NORTEL MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY NATURE WHATSOEVER WITH RESPECT TO THE
CD-ROM, CD-ROM SOFTWARE, CD-ROM DOCUMENTATION OR ANY INFORMATION CONTAINED ON ANY OF THE
FOREGOING OR ANY RESULTS OR CONCLUSIONS REACHED BY BUYER AS A RESULT OF ACCESS TO OR USE
THEREOF, OR WITH RESPECT TO ANY OTHER MATTER OR SERVICE PROVIDED BY NORTEL, WHETHER
STATUTORY, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR AGAINST INFRINGEMENT. NORTEL SHALL
NOT BE LIABLE FOR ANY DIRECT, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF
ANY NATURE WHATSOEVER INCLUDING ANY SUCH DAMAGES WHICH MAY ARISE OUT OF THE USE OF OR
INABILITY TO USE OR ACCESS THE CD-ROM, THE CD-ROM SOFTWARE, THE CD-ROM DOCUMENTATION, AND
FURTHER INCLUDING LOSS OF USE, REVENUE, PROFITS OR ANTICIPATED SAVINGS REGARDLESS OF HOW
SUCH DAMAGES MAY HAVE BEEN CAUSED.
5. GENERAL
5.1 Nothing contained in this Attachment shall limit, in any
manner, Nortel's right to change the CD-ROM Software or CD-ROM
Documentation or the design or characteristics of Nortel's Products
at any time without notice and without liability.
EXHIBIT B
MASTER SERVICES AGREEMENT
EXHIBIT C
AFFILIATES
1.0 Company Affiliates
1.1 For purposes of this Agreement, the Company Affiliates shall include:
Present Company NamePlace of Incorporation
2.0 Nortel Affiliates
2.1 For purposes of this Agreement, the Nortel Affiliates shall include:
NORTHERN TELECOM AND ASSOCIATED COMPANIES
NORTHERN TELECOM LIMITED-NORTHERN TELECOM LIMITEE
ADVANCED SEMICONDUCTOR MANUFACTURING CORPORATION OF SHANGHAI
BELL-NORTHERN RESEARCH LTD.-RECHERCHES BELL-NORTHERN LTEE
BROCK TELECOM LIMITED-BROCK TELECOM LIMITEE
COOK ELECTRIC TELECOMUNICACOES S/A
GUANGDONG - NORTEL TELECOMMUNICATIONS SWITCHING EQUIPMENT LIMITED
NEW NORTH MEDIA
NORTEL CHILE S.A.
NORTEL (CHINA) LIMITED
NORTEL COMMUNICATIONS INC.
NORTEL COMMUNICATIONS (ISRAEL) LIMITED
NORTEL EUROPE S.A. (formerly Nortel France S.A. and NT Meridian S.A.)
NORTEL MATRA CELLULAR SCA
NORTHERN TELECOM INVESTISSEMENT E.U.R.L.
NORTHERN TELECOM PARTICIPATIONS E.U.R.L.
STRATEGIC TELECOM COMPONENTS S.A.
NORTELplc (formerly Nortel Limited; Northern Telecom Europe Limited))
BNR EUROPE LIMITED
NORTEL (MANAGEMENT) LIMITED
ICL PLC
INTEGRATED NETWORKS LIMITED
NORTEL AUSTRALIA PTY. LIMITED
NORTEL AUSTRALIA COMMUNICATION SYSTEMS PTY. LIMITED
NORTEL SUPERANNUATION FUND PTY LTD.
NORTEL PROPERTIES LTD.
NORTHERN TELECOM FINANCIAL SERVICES
NORTEL (NORTHERN IRELAND) LIMITED
NT FACTORS LIMITED
NORTEL MAURITIUS LIMITED
NORTEL INDIA PRIVATE LIMITED
NORTEL NEW ZEALAND LIMITED
NORTEL PACIFIC PTY. LIMITED
NORTEL PERU S.A.
NORTEL POST AND TELECOMMUNICATIONS TECHNICAL INC.
NORTEL (THAILAND) LIMITED
NORTHERN TELECOM (ASIA) LIMITED
NORTHERN TELECOM CANADA LIMITED-NORTHERN TELECOM
CANADA LIMITEE
NORTHERN TELECOM DE ARGENTINA, S.A.
NORTHERN TELECOM DE COLOMBIA S.A.
NORTHERN TELECOM DE MEXICO, S.A. DE C.V.
NORTHERN TELECOM DE VENEZUELA C.A.
NORTHERN TELECOM DO BRASIL INDUSTRIA E COMERCIO LTDA.
NORTHERN TELECOM LIMITED-NORTHERN TELECOM LIMITEE
NORTHERN TELECOM ELECTRONICS LIMITED-NORTHERN TELECOM
ELECTRONIQUE LIMITEE
NORTHERN TELECOM GLOBAL CORPORATION
NORTHERN TELECOM INC.
ARRIS INTERACTIVE L.L.C.
ENTRUST TECHNOLOGIES INC.
MICOM COMMUNICATIONS CORP.
NETSPEED, INC.
JETSTREAM COMMUNICATIONS, INC.
NORTEL COMMUNICATIONS SYSTEMS INC.
BELL ATLANTIC MERIDIAN SYSTEMS
NORTEL COMMUNICATIONS PERSONNEL SERVICES INC.
NORTEL CALA INC. (formerly Northern Telecom (CALA) Corporation)
NORTHERN TELECOM (PUERTO RICO) INC.
NORTEL GOVERNMENT SERVICES INC.
NORTHERN TELECOM CAPITAL CORPORATION
NORTHERN TELECOM FRANCE S.A.
MATRA COMMUNICATION S.A.S.
NORTHERN TELECOM INTERNATIONAL INC.
NORTHERN TELECOM JAPAN INC.
SANKO TELECOM CO., LTD.
NORTHERN TELECOM TRADING CORPORATION
SUMISHO ELECTRONICS CO. LTD.
WILTEL COMMUNICATIONS, L.L.C.
NORTHERN TELECOM INDUSTRIES Sdn. Bhd.
NORTHERN TELECOM COMPONENTS SDN. BHD.
NORTHERN TELECOM (KEDAH) SDN. BHD.
NORTHERN TELECOM (MALAYSIA) SENDIRIAN BERHAD
NORTHERN TELECOM (PENANG) Sdn. Bhd.
NORTHERN TELECOM INTERNATIONAL LIMITED-NORTHERN TELECOM
INTERNATIONAL LIMITEE
NORTEL COMUNICACIONES DE COLOMBIA S.A.
NORTEL DE COLOMBIA S.A.
NORTEL TELECOMUNICACIONES S.A.
NORTHERN TELECOM COMUNICACIONES DE COLOMBIA S.A.
NORTHERN TELECOM KOREA LIMITED
NORTHERN TELECOM (LUXEMBOURG) S.A.
NORTHERN TELECOM LIMITED-NORTHERN TELECOM LIMITEE
NORTHERN TELECOM INTERNATIONAL FINANCE B.V.
LANKA BELL (PRIVATE) LIMITED
NETAS - NORTHERN ELECTRIC TELEKOMUNIKASYON A.S.
RON - TELECOM
ULTEL
VERINET UYDU HABERLESME SANAYI VE TICARET A.S.
VESNET
NORTEL COMMUNICATIONS HOLDINGS (1997) LIMITED
TELRAD TELECOMMUNICATION & ELECTRONIC
INDUSTRIES LTD.
NORTEL (IRELAND) LIMITED
NORTEL (DUBLIN) LIMITED
NORTEL KAPSCH GmbH
NORTEL N.V.
NORTEL SLOVENSKO, s.r.o.
NORTEL UKRAINE LTD.
NORTHERN TELECOM AG
NORTHERN TELECOM BULGARIA EOOD
NORTHERN TELECOM B.V.
NORTHERN TELECOM ELWRO Sp. z.o.o.
NORTHERN TELECOM GmbH
NORTEL/DASA NETWORK SYSTEMS GMBH & CO. KG
NORTEL/DASA NETWORK SYSTEM VERWALTUNGS GmbH
NORTHERN TELECOM ITALIA S.p.A.
NORTHERN TELECOM POLSKA SPOLKA z.o.o.
NORTHERN TELECOM (PORTUGAL) S.A.
NORTHERN TELECOM SCANDINAVIA AS
NORTHERN TELECOM SINGAPORE PTE LIMITED
NORTHERN TELECOM SOCIEDAD ANONIMA (formerly Sociedad Espanola de
Distribucion de Equipos de Telecomunicaciones Northern Telecom, S.A.)
NT COMMUNICATIONS AG
SIXTEL S.P.A.
NORTHERN TELECOM MAROC SA
NORTHERN TELECOM SERVICOS E PARTICIPACO
ES LTDA.
SHANGHAI NORTEL SEMICONDUCTOR CORP.
SHENYANG NORTEL TELECOMMUNICATIONS CO., LTD.
SHUNDE ZHENHUA KEATON NORTHERN PROPERTY COMPANY LIMITED
TONG GUANG - NORTEL LIMITED LIABILITY COMPANY
TTS MERIDIAN SYSTEMS INC.
EXHIBIT D
TERRITORIAL LIMITATIONS
COUNTRY EXCLUSIVE PRODUCT
USE
<S> <C>
Austria DMS
People's
Republic of China DMS
Israel DMS
Turkey DMS
Ukraine DMS
EXHIBIT E, PART I
HOMOLOGATION
<S> <C> <C> <C>
Asia/South Pacific North America Carribean
Canada
Australia USA Antigua
Belau Bahamas
Guam Latin America Barbados
Hong Kong Belize
Japan Argentina El Salvador Bermuda
Malaysia Bolivia Guyana British Virgin Islands
Marshall Islands Brazil Honduras Dominica
Micronesia Chile Mexico Dominican Republic
New Zealand Colombia Paraguay Grenada
Phillipines Costa Rica Peru Haiti
South Korea Jamaica
Vietnam Europe Montserrat
Puerto Rico
Africa/Middle-East Austria Ireland St. Martin
Bulgaria Netherlands St. Kitts
Bahrain C.I.S. Poland Trinidad
Burkina Faso UK Spain Turks Caicos
Morocco Germany Italy US Virgin Islands
Saudi Arabia Hungary France
Tunisia
Turkey
Exhibit E, Part I, discloses the countries where the DMS Family of Products maintains an established installation.
Notwithstanding any provision to the contrary, the parties hereto understand that Homologation and/or PSTN
certification, if any, are required on a periodic basis as effectuated by but not limited to revisions, upgrades or
new equipment and/or software releases. This Exhibit E, Part I and II constitutes no warranty as to Homologation
and/or PSTN certification continuance.
Homologation is defined as meeting the requirements for safety and EMC in a specific country, and may include formal
certification on a case by case basis.
PSTN is defined as meeting the requirements for interface in a specific country for the Public Switch Telephony
Network, and may include formal certification on a case by case basis.
EXHIBIT E, PART II
DMS FAMILY HOMOLOGATION STATUS
COUNTRY HOMOLOGATION EMC PSTN APPROVAL
& NOTES SAFETY AUTHORITY & NOTES AUTHORITY
<S> <C> <C> <C>
US Compliance Achieved Compliance Achieved Approval Achieved UL1459, FCC BellCore
TR-NWT-00063
UK Compliance Achieved Compliance Achieved Note A BABT
GERMANY Compliance Achieved Compliance Achieved Note A BZT
FRANCE Compliance Achieved Compliance Achieved Note B DRG
CANADA Compliance Achieved Compliance Achieved Approval Achieved CSA 22.2.225
Cabnetized Only Cabnetized Only
SWITZERLAND Compliance Achieved Compliance Achieved Pending BAKOM
NETHERLANDS Compliance Achieved Compliance Achieved Note C HDTD
ITALY Compliance Achieved Compliance Achieved Note B IGT
HONG KONG Compliance Achieved Compliance Achieved Note A
JAPAN Compliance Achieved Compliance Achieved Note B
BELGIUM Compliance Achieved Compliance Achieved Note B BIPT
SWEDEN Compliance Achieved Compliance Achieved Pending NTA
SPAIN Compliance Achieved Compliance Achieved DGT
AUSTRIA Compliance Achieved Compliance Achieved ATRA
NORWAY Compliance Achieved Compliance Achieved Pending
MEXICO Compliance Achieved Compliance Achieved Approval Achieved
AUSTRALIA Compliance Achieved Compliance Achieved Note B AUSTEL
DENMARK Compliance Achieved Compliance Achieved Pending NTA
LUXEMBORG Compliance Achieved Compliance Achieved
IRELAND Compliance Achieved Compliance Achieved Note B
FINLAND Compliance Achieved Compliance Achieved Pending
CHINA Compliance Achieved Compliance Achieved Note D
KOREA Pending Pending Pending
JAMAICA Compliance Achieved Compliance Achieved Approval Achieved
DOMINICAN
REPUBLIC Compliance Achieved Compliance Achieved Approval Achieved
PUERTO RICO Compliance Achieved Compliance Achieved Approval Achieved
Note A: PSTN via DMS-100 & DMS-GSP.
Note B: PSTN via DMS-100; Further PSTN initiation planned in 1998.
Note C: PSTN via DMS-GSP.
Note D: PSTN via DMS-10 & DMS-100.
</TABLE>
CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT. PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED BY [*], [**], OR [***].
MATERIAL OMITTED HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
MASTER SERVICES AGREEMENT
BETWEEN
WORLDPORT COMMUNICATIONS, INC.
AND
NORTHERN TELECOM INC.
TABLE OF CONTENTS
ARTICLES:
Article 1 - Definitions
Article 2 - Scope of Agreement
Article 3 - Placement of Orders
Article 4 - Price and Payment
Article 5 Commencement of Services
Article 6 - Acceptance
Article 7 - Order Cancellation
Article 8 Intellectual Property Rights
Article 9 - Warranty
Article 10 - Liability for Bodily Injury, Property Damage and Patent
Infringement
Article 11 - Remedies and Limitation of Liability
Article 12 - Term and Termination
Article 13 - Confidentiality
Article 14 - Miscellaneous
EXHIBITS:
Exhibit A - Service Annexes
MASTER SERVICES AGREEMENT
This Master Services Agreement ("Agreement"), effective as of the ____ day of
______, 1998, is entered into by and between WorldPort Communications, Inc.
(hereinafter "Company"), a Delaware corporation with executive offices located
at 1825 Barrett Boulevard, Atlanta, Georgia 30144, and Northern Telecom Inc.
(hereinafter "Nortel"), a Delaware corporation with offices located at 2350
Lakeside Boulevard, Richardson, Texas 75082-4399.
WHEREAS, Company is engaged in providing communication services and products,
and providing and maintaining public and private communication networks; and
WHEREAS, Nortel, in conjunction with Nortel Affiliates, is engaged in the
design, development, manufacture and sale of various products and offers various
services, which can be used in connection with the communication services,
products and networks of Company; and
WHEREAS, Company wishes to be able to purchase various services from Nortel, and
Nortel is willing to sell such services to Company, subject to the terms and
conditions of this Agreement; and
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth, the parties agree as follows:
ARTICLE 1. DEFINITIONS
The following words shall have the meanings set forth below. Words in the
singular shall be held to include the plural and vice versa, and words of gender
shall be held to include the other gender as the context requires.
1.1 "Background IPR" shall mean any Intellectual Property Rights that are
conceived, created, or developed by a party or its affiliates prior to, or
independently of, any Services performed pursuant to this Agreement.
1.2 "Commencement Date" shall mean the date, as agreed to by the parties,
on which Nortel is to commence performance of Services ordered by Company
pursuant to this Agreement.
1.3 "Confidential Information" shall mean all information, including
without limitation, specifications, drawings, documentation, designs, test
results, programs, know-how, pricing information and market information, of
every kind or description which may be disclosed by one party to the other party
in connection with this
Agreement; provided that, the disclosing party shall clearly mark all such
information disclosed in writing as the confidential or proprietary property of
the disclosing party and, in the case of oral disclosure, the disclosing party
shall identify the confidential or proprietary nature of any such information at
the time of such oral disclosure and shall provide a written summary (labeled as
confidential or proprietary) of the orally disclosed information to the
recipient within fifteen (15) business days following such disclosure.
1.4 "Customized Service(s)" shall mean, individually and collectively, any
Services other than Standard Services, including, without limitation, those
Services described in Service Annex No. 2 of Exhibit A, if any.
1.5 "Documentation" shall mean the documents which Nortel generally makes
available to its customers containing descriptive, operating, installation,
engineering and maintenance information for Products, as such documents may be
amended from time to time.
1.6 "Effective Date" shall mean the date this Agreement becomes effective
which shall be the date first identified above.
1.7 "Foreground IPR" shall mean any Intellectual Property Rights that are
conceived, created, or developed by a party or its affiliates in the course of
performing Services pursuant to this Agreement.
1.8 "Hardware" shall mean, individually and collectively, the Nortel
equipment, which may be purchased by Company from Nortel from time to time.
1.9 "Hazardous Material" shall mean any pollutants or dangerous, toxic or
hazardous substances (including without limitation, asbestos) as defined in, or
pursuant to the OSHA Hazard Communication Standard (29 CFR Part 1910, Subpart
Z), the Resource Conservation and Recovery Act (15 USC Section 6901, et seq.),
the Toxic Substances Control Act (15 USC Section 2601, et seq.), the
Comprehensive Environmental Response Compensation and Liability Act (42 USC
Section 9601, et seq.), and any other federal, state or local environmental law,
ordinance, rule or regulation.
1.10 "Intellectual Property Rights" shall mean any and all rights in any
invention, discovery, improvement, utility model, copyright, industrial design
or mask work right, and any and all rights of whatever nature in computer
software and data, Confidential Information, trade secrets or know-how, and any
and all intangible rights and privileges of a nature similar to any of the
foregoing, in every case in any part of the world and whether or not registered,
and shall include all rights in any applications and granted applications for
any of the foregoing.
1.11 "Nortel Affiliate" shall mean Nortel's parent corporation, Northern
Telecom Limited and any corporation controlled directly or indirectly by
Northern Telecom Limited through the ownership or control of shares or other
securities in such corporation.
1.12 "Order" shall mean a numerically controlled purchase authorization
document issued by Company to Nortel specifying Services to be furnished by
Nortel pursuant to this Agreement.
1.13 "Product(s)" shall mean, individually and collectively, the Hardware,
Software, and Documentation.
1.14 "Service(s)" shall mean, individually and collectively, any of the
Standard Services and/or the Customized Services that Company may acquire from
Nortel pursuant to this Agreement.
1.15 "Service Annex" shall mean, with respect to a specific type of
Service, additional or modified terms and conditions as set forth in Exhibit A
that are unique to such type of Service.
1.16 "Service Site" shall mean the location or facility, as identified
within an Order, at which the applicable Services will be performed.
1.17 "Software" shall mean (i) computer programs in object code form or
firmware which (a) are owned by, or licensed to, Nortel, (b) reside in Product
memories, tapes, disks or other media, and (c) provide basic logic operating
instructions and user-related application instructions, and (ii) documentation
associated with such computer programs which may be furnished by Nortel to
Company from time to time, but in no event shall Software include source code.
1.18 "Standard Service(s)" shall mean, individually and collectively, any
of the services described in Service Annex No. 1 of Exhibit A, and shall be
deemed to include any similar services which Nortel adds to its generally
available service offerings or so identifies to Company in writing.
1.19 "Statement of Work" shall mean a document that describes the scope,
activities, schedule, prices, deliverables (including, but not limited to, any
drawings, specifications, reports, designs, and test results to be prepared or
produced by Nortel), and/or any additional terms and conditions pertaining to
such Customized Service(s) as Company may from time to time request pursuant to
this Agreement.
ARTICLE 2. SCOPE OF AGREEMENT
2.1 This Agreement sets forth the terms and conditions under which Company
may purchase Services from Nortel. All Services shall be performed in the United
States.
2.2 To the extent any terms and conditions set forth in this Agreement are
inapplicable to a type of Service, the applicable terms and conditions and any
additional terms and conditions for such type of Service shall be set forth in a
Service Annex.
2.3 All references to prices, charges, fees or other amounts herein shall
be in U.S. dollars and all documentation, correspondence and communication shall
be in the English language.
ARTICLE 3. PLACEMENT OF ORDERS
3.1 When Company desires to order Services, Company shall submit to such
person as Nortel shall designate, an Order which shall at a minimum specify the
following, if applicable:
(i) the types and quantities of Services to be furnished by Nortel;
(ii) the applicable prices, charges and fees with respect to such
Services;
(iii) the Service Site(s) at which the Services are to be
performed;
(iv) the incorporation by reference of this Agreement;
(v) the requested Commencement Date of the Services; and
(vi) any other information required under this Agreement to be
included in an Order.
3.2 All purchases of Services pursuant to this Agreement shall be made by
means of Orders issued from time to time by Company and accepted by Nortel in
writing within fifteen (15) business days after receipt of the Order. In the
event that Nortel fails to provide its acceptance of an Order in writing within
such fifteen (15) business day period, such Order shall be deemed to be
accepted, provided that no additional or special terms and conditions have been
written on the face of or otherwise incorporated into such Order. Nortel shall
have the right to reject any Order, or the applicable portion of such Order,
placed hereunder where Company has a separate agreement with Nortel for the
provision of the Services requested in such Order.
3.3 All Orders issued by Company pursuant to this Agreement shall refer to
and specifically incorporate this Agreement by reference and the terms and
conditions herein shall govern the transaction resulting from such Order,
provided that Nortel accepts such Order. Preprinted terms and conditions set
forth in Orders issued by Company, or in any prior Statements of Work,
quotations, acknowledgments or other related documentation issued by any party,
shall be considered null and void and shall have no force or effect; provided,
however, that any special terms and conditions written on the face of an Order
or otherwise incorporated into such Order shall, upon acceptance in writing by
Nortel, and for such Order only, supersede the specific terms and conditions
contained in this Agreement, including all Exhibits attached hereto, which are
in conflict.
3.4 Company may at any time request additions, alterations, deductions or
deviations to an Order, subject to the condition that such changes and any
adjustments resulting from such changes, including, but not limited to,
schedules and prices, shall be mutually agreed upon and, if so agreed,
subsequently detailed in a written revision to the applicable Order ("Change
Order"). Company acknowledges that a premium charge may be applied by Nortel
should Nortel agree to process a Change Order outside of its standard Order
processing cycle or in the event that a Change Order requires an additional
amount of work to be undertaken to comply with such changes.
3.5 If Company desires to receive a Statement of Work from Nortel for
Consulting Services, Company shall submit such request in writing to such person
as Nortel may designate. The request for a Statement of Work shall include the
information listed in Section 3.1, as applicable. Nortel shall prepare a
Statement of Work in response to Customer's request. Any changes to the
proposed Statement of Work shall be negotiated and agreed to in writing by the
parties. Company's Order(s) for the Customized Services described within a
Statement of Work shall be based upon the contents of the Statement of Work as
mutually agreed to by the parties and attached to such Order(s).
3.6 The Commencement Date for ordered Services shall be based on Nortel's
standard intervals for the applicable Service; however, the parties shall always
mutually agree on the Commencement Date and take into consideration any unique
aspect of the applicable project.
3.7 Orders may be issued either electronically, such as through electronic
data interchange, or via traditional manual methods, as mutually agreed to by
the parties.
ARTICLE 4. PRICE AND PAYMENT
4.1 Nortel shall charge Company for the Services ordered by Company in
accordance with the prices set forth in each accepted Order, which prices shall
be based upon prices identified in one of (i) a Service Annex, (ii) a Statement
of Work, (iii) Nortel's then current prices, or (iv) as specified elsewhere in
this Agreement or as otherwise mutually agreed in writing.
4.2 Nortel's prices, if set forth in a Service Annex, may be revised by
Nortel no more than once each calendar year, by providing sixty (60) days prior
written notice to Company. Such notice shall specify the effective date of the
price change and shall apply to all Orders received by Nortel on or after the
effective date of the price change.
4.3 Unless otherwise set forth in a Service Annex or a Statement of Work,
Nortel shall invoice Company for one hundred percent (100%) of the price of
ordered Services upon the date of completion of such Services.
4.4 Each invoice shall be paid in full within thirty (30) days after the
date of such invoice. In the event that Company does not pay an invoice in full
within such thirty (30) day period, then Nortel may charge Company interest on
the outstanding portion of such invoice, from day thirty one (31) forward, at
the rate of one and one half percent (1.5%) simple compound interest per month,
or such lesser amount as may be the maximum permissible rate under applicable
law, until such time as the outstanding invoice is paid. In addition, Company
agrees to pay all collection costs and reasonable legal fees incurred by Nortel
as a result of late payment or non-payment by Company.
ARTICLE 5. COMMENCEMENT OF SERVICES
5.1 If Company notifies Nortel, prior to the Commencement Date for ordered
Services, that Company wishes to postpone the commencement of such Services or
that the Service Site or other location is not prepared in sufficient time for
Nortel to commence such Services in accordance with such date, Company shall be
liable for all additional costs related to the postponed Services, including,
without limitation, (i) standard rates (including any overtime premium) for
Nortel's personnel and/or contractors who travel to the Service Site or other
location, and the actual travel and living expenses (plus a fifteen percent
(15%) administrative fee) and/or relocation expenses incurred by such personnel
and/or contractors, and (ii) any costs, charges or expenses incurred by Nortel
under its arrangements with third party vendors, licensors, lessors, and/or
contractors. In addition, if Company provides less than thirty (30) days'
notice of the postponement, Company shall pay to Nortel a postponement charge
equal to ten percent (10%) of the Order amount for the postponed Services.
5.2.1 Company shall provide Nortel or its contractors with access to
its sites during the times specified by Nortel and as reasonably necessary for
Nortel to perform its obligations hereunder. Nortel shall comply with Company's
reasonable site and security regulations of which Nortel is informed by Company.
5.2.2 All sites at which the Services are to be performed shall be
prepared by Company in accordance with Nortel's standards, including, without
limitation, environmental requirements. Prior to and during the performance of
the Services at such site(s), Company shall ensure the timely and adequate
delivery, installation and functioning of the electrical and communications
connections and other environmental requirements, including but not limited to,
HVAC systems, as specified in Nortel's instructions, specifications,
Documentation, a Service Annex or a Statement of Work.
5.2.3 Company shall provide reasonable working space and facilities,
including heat, light, ventilation, telephones, electrical current, waste
removal and other necessary utilities, for use by Nortel personnel performing
Services, and adequate secure storage space, if required by Nortel, for Products
and materials. Company shall also provide adequate security against theft,
damage or other loss for Products and materials while on Company's site.
5.2.4 Company shall obtain all necessary governmental permits
applicable to Company in connection with the performance of the Services
provided hereunder, excluding any applicable permits required in the normal
course of Nortel's doing business. Any information which Nortel reasonably
requests from Company and which is necessary for Nortel to properly perform the
Services shall be provided by Company to Nortel in a timely fashion and in a
form reasonably specified by Nortel.
ARTICLE 6. ACCEPTANCE
6.1 Ordered Services, which are performed under this Agreement, shall be
deemed to be accepted upon completion of such Services or upon specific
milestones as may be identified in a Service Annex or a Statement of Work.
ARTICLE 7. ORDER CANCELLATION
7.1 Unless otherwise set forth in a Service Annex or Statement of Work, in
the event that Company cancels all or any part of an Order for Services, Company
shall pay to Nortel a cancellation charge for the Services that have been
canceled in accordance with the following schedule:
- 60 or more days prior to Commencement Date No cancellation
charge
- 45-59 days prior to Commencement Date 5% of Order
amount
- 30-44 days prior to Commencement Date 10% of Order
amount
- 0-29 days prior to Commencement Date 20% of Order
amount
In addition, Company shall be liable for all additional costs related to the
cancelled Services, including, without limitation, (i) standard rates (including
any overtime premium) for Nortel's personnel and/or contractors who travel to
the Service Site or other location, and the actual travel and living expenses
(plus a fifteen percent (15%) administrative fee) and/or relocation expenses
incurred by such personnel and/or contractors, and (ii) any costs, charges or
expenses incurred by Nortel under its arrangements with third party vendors,
licensors, lessors and/or contractors.
ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS
8.1 The Services performed by Nortel and its affiliates pursuant to this
Agreement (and any deliverables provided to Company in connection therewith) are
not "works for hire".
8.2 All Background IPR of a party or its affiliate shall remain the
exclusive property of such party or its affiliate, and the information contained
therein shall be deemed to be Confidential Information of such party or its
affiliate.
8.3 With respect to any Background IPR of Company disclosed to Nortel, its
affiliates, and/or its contractors in connection with this Agreement, Company
hereby grants to Nortel, Nortel's affiliates, and Nortel's contractors a non-
exclusive, royalty-free, worldwide right to make, use, and reproduce such
Background IPR, but only to the extent that such right is necessary for the
performance of Nortel's obligations under this Agreement and the Services
contemplated hereunder.
8.4 With respect to any Foreground IPR of Nortel and its affiliates which
is incorporated or contained within, or which is required for the implementation
of, any recommendation(s) or conclusion(s) advanced by Nortel in the course of
performing Services under this Agreement, Nortel hereby grants to Company a
non-exclusive, royalty-free, worldwide right to use and disclose such Foreground
IPR, but only to the extent necessary for Company to implement such
recommendation(s) or conclusion(s) in the implementation, operation and
maintenance of Company's communications network or in Customer's provision of
communications services.
8.5 With respect to any Background IPR of Nortel and its affiliates which
is incorporated or contained within, or which is required for the implementation
of, any recommendation(s) or conclusion(s) advanced by Nortel in the course of
performing Services under this Agreement, Nortel will grant to Company, upon
reasonable commercial terms, a non-exclusive, worldwide right to use and
disclose such Background IPR, but only to the extent necessary for Company to
implement such recommendation(s) or conclusion(s) in the implementation,
operation and maintenance of Company's communications network or in Customer's
provision of communications services. Notwithstanding the foregoing, the grant
to Company of rights in the Background IPR of Nortel and its affiliates shall
not include product design information of Nortel and its affiliates, but shall
be limited to that Background IPR within the scope of the technical information
to be included within the deliverables.
8.6 Prior to disclosing to any third party any Foreground IPR or
Background IPR of Nortel and its affiliates pursuant to Sections 8.4 or 8.5,
Company shall (I) advise such third party in writing of the confidential and
proprietary nature and the limitations on use of the information to be
disclosed, as set forth in Sections 8.4 and 8.5, and shall (ii) obtain from such
third party a written undertaking to respect such obligations.
8.7 Nothing contained in this Agreement shall transfer, or be deemed to
transfer or contemplate the transfer of, any Intellectual Property Right other
than those rights specifically granted herein, and in particular but without
restricting the generality of the foregoing, Nortel does not in any way grant
any license in, to, or under any of its Intellectual Property Rights.
8.8 Nothing contained in this Agreement shall prevent, or be deemed to
prevent, Nortel or its affiliates from providing to any third party the same or
similar Services (including the same or similar recommendations or conclusions)
as may be provided to Company pursuant to this Agreement.
ARTICLE 9. WARRANTY
9.1 Nortel warrants that Nortel shall perform the Services in a good and
workmanlike manner and to standards not less than those generally accepted in
the industry.
9.2 Nortel shall promptly correct any failure of the Services to conform
to the above warranties; provided that, Nortel is notified (in writing) of such
non-conformance within fifteen (15) days following the completion of that
portion of the Services that are non-conforming.
9.3 The warranties set forth in this Article shall not apply to any
Services where the non-conformance is due to (i) accident, fire, explosion,
power failure, power surge or other power irregularity, lightning, alteration,
abuse, misuse or repair not performed by Nortel; (ii) improper storage; (iii)
failure to comply with all applicable environmental requirements for Products as
specified by Nortel or any other applicable supplier, such as but not limited to
temperature or humidity ranges; (iv) improper performance of installation,
maintenance, operation or other service in connection with Products, provided
that such service was not performed by Nortel or on Nortel's behalf; (v) use of
a Nortel Product in conjunction with an incompatible product; (vi) any error,
act or omission by anyone other than Nortel; or (vii) where written notice of
the non-conformance has not been given to Nortel within the applicable notice
period.
9.4 Nortel and Nortel's suppliers, as appropriate, shall not have any
responsibility to Company's customers for warranties offered by Company to such
customers and Company hereby indemnifies and holds harmless Nortel, Nortel's
affiliates, and Nortel's suppliers, as appropriate, from (i) any claims, damages
or liabilities arising out of, or relating to, any warranties offered by Company
to such customers or (ii) any claims by a third party in respect of any
malfunction, defect or error in any product or service that is ultimately
derived from any Services provided or contemplated under this Agreement.
9.5 THE WARRANTIES, CONDITIONS AND REMEDIES SET FORTH HEREIN CONSTITUTE
THE ONLY WARRANTIES, OBLIGATIONS OR CONDITIONS OF NORTEL WITH RESPECT TO THE
SERVICES AND ARE COMPANY'S SOLE AND EXCLUSIVE REMEDIES IN THE EVENT THAT SUCH
WARRANTIES OR CONDITIONS ARE BREACHED. THEY ARE IN LIEU OF ALL OTHER WARRANTIES
OR CONDITIONS, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTY OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. NORTEL SHALL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST
REVENUES OR PROFITS OR OTHER ECONOMIC LOSS OF ANY NATURE WHATSOEVER, ARISING OUT
OF NORTEL'S BREACH OF WARRANTY OR CONDITION.
ARTICLE 10. LIABILITY FOR BODILY INJURY, PROPERTY DAMAGE AND PATENT
INFRINGEMENT
10.1 A party hereto shall defend the other party against any suit, claim,
or proceeding brought against the other party for direct damages due to bodily
injuries (including death) or damage to tangible property which allegedly result
from the negligence or willful misconduct of the defending party in the
performance of this Agreement. The defending party shall pay all litigation
costs, reasonable attorney's fees, settlement payments and such direct damages
awarded or resulting from any such suit, claim or proceeding.
10.2 Nortel shall defend Company against any suit, claim or proceeding
brought against Company alleging that any Service or deliverable provided by
Nortel hereunder infringes any third party Intellectual Property Rights
("Infringement Claim"); provided that, such Infringement Claim results from
Nortel's gross negligence, willful misconduct, or knowing incorporation of such
third party Intellectual Property Rights in a service or deliverable (unless
Company, after notification by Nortel, consented to such inclusion). Nortel
shall pay all litigation costs, reasonable attorney's fees, settlement payments
and damages awarded or resulting from any such suit, claim or proceeding.
10.3 Nortel's cumulative liability, pursuant to this Article 10 and
including its costs and expenses incurred in satisfying its obligations set
forth below, shall not exceed one hundred percent (100%) of the amount paid by
Company to Nortel for the Services giving rise to the Infringement Claim.
10.4 Nortel shall not be liable and Company shall indemnify Nortel for any
costs incurred by Nortel or liabilities of Nortel arising under this Article 10
in excess of the amounts so stated above.
10.5 Nortel shall have no liability in respect of any Infringement Claim
that arises from: (a) compliance by Nortel with Company's information,
specifications or design, or with any special instructions furnished by Company,
(b) use of a deliverable in a manner or for a purpose not contemplated or
approved by Nortel, (c) use of a deliverable in combination with other products
or deliverables not authorized, supplied, or approved by Nortel, or (d)
modification by Company of a deliverable. In the excepted cases stated above,
Company shall indemnify and hold Nortel harmless against any loss, cost,
expense, damage, settlement or other liability, including, but not limited to,
attorneys' fees, which may be incurred by Nortel with respect to any suit,
claim, or proceeding described in this Section 10.5.
10.6 Nortel shall not be liable for, and Company shall indemnify Nortel in
respect of, any damages awarded based on Company's willful, knowing or
deliberate infringement of a patent, copyright, trade secret, trademark or other
proprietary right where such infringement results in a pecuniary damage award.
10.7 Nortel may provide Company with notice of an actual or potential
Infringement Claim. Nortel shall consult with Company regarding the Infringement
Claim and the course of action to be pursued as a result thereof. In the event
that the parties fail to agree on a satisfactory course of action for dealing
with the matter, Nortel may, at Nortel's option:
(i) procure for Company the right to continue using the alleged
infringing Service or deliverable;
(ii) replace or modify the same with an equivalent or better Service
or deliverable so that Company's use is non-infringing; or
(iii) accept return of the affected portion of the Service or
deliverable and refund to Company the depreciated value (as carried on
the books of Company) of such Service or deliverable.
10.8 Nortel shall not be liable for, and Company shall indemnify Nortel in
respect of any Infringement Claim(s) where Nortel has provided notice to Company
of the Infringement Claim(s) and Company elects to continue its use of a Service
or deliverable related to the Infringement Claim.
10.9 If as a result of an Infringement Claim, other than those contemplated
above, an injunction is obtained against Company's use of any Product, Nortel
shall, at Nortel's option:
(i) procure for Company the right to continue using the alleged
infringing Service or deliverable;
(ii) replace or modify the same with an equivalent or better Service
or deliverable so that Company's use is non-infringing; or
(iii) accept return of the affected portion of the Service or
deliverable and refund to Company the depreciated value (as carried on
the books of Company) of such Service or deliverable.
10.10 THE REMEDIES SET FORTH IN THIS ARTICLE 10 ESTABLISH THE ENTIRE
OBLIGATION OF THE PARTIES IN REGARD TO CLAIMS RELATING TO INTELLECTUAL PROPERTY
RIGHTS INCLUDING CLAIMS DIRECTED TO THE INFRINGEMENT OF PATENTS, COPYRIGHT,
TRADE SECRETS AND OTHER PROPRIETARY RIGHTS. IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES,
OR FOR LOST REVENUES, PROFITS OR OTHER ECONOMIC LOSSES, ARISING FROM SUCH
INFRINGEMENTS AND/OR OTHER MATTERS, OTHER THAN AS SPECIFICALLY SET FORTH HEREIN.
ARTICLE 11. REMEDIES AND LIMITATION OF LIABILITY
11.1 Nortel shall have the right to suspend its performance, upon written
notice to Company, and forthwith remove and take possession of all deliverables
that shall have been delivered to Company in connection with the performance of
certain Services, if, prior to payment to Nortel of any amounts due pursuant to
this Agreement with respect to such Services, Company shall (a) become insolvent
or bankrupt or cease, be unable, or admit in writing its inability, to pay all
debts as they mature, or make a general assignment for the benefit of, or enter
into any arrangement with, creditors, (b) authorize, apply for, or consent to
the appointment of, a receiver, trustee, or liquidator of all or a substantial
part of its assets or have proceedings seeking such appointment commenced
against it which are not terminated within sixty (60) days of such commencement,
or (c) file a voluntary petition under any bankruptcy or insolvency law or under
the reorganization or arrangement provisions of the United States Bankruptcy
Code or any similar law of any jurisdiction or have proceedings under any such
law instituted against it which are not terminated within sixty (60) days of
such commencement.
11.2 In the event of any material breach of this Agreement which shall
continue for sixty (60) or more days after written notice of such breach
(including a reasonably detailed statement of the nature of such breach) shall
have been given to the breaching party by the aggrieved party, the aggrieved
party shall be entitled at its option to avail itself of any and all remedies
available at law or equity, except as otherwise limited in this Agreement.
11.3 NOTHING CONTAINED IN SECTION 11.2 OR ELSEWHERE IN THIS AGREEMENT SHALL
MAKE NORTEL LIABLE FOR ANY INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL, OR
CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER FOR ANY BREACH OF THIS AGREEMENT
WHETHER THE CLAIMS FOR SUCH DAMAGES ARISE IN TORT (INCLUDING NEGLIGENCE
REGARDLESS OF DEGREE OF FAULT), CONTRACT OR OTHERWISE.
11.4 Nortel shall not be liable for any additional costs, expenses, losses
or damages resulting from errors, acts or omissions of Company, including, but
not limited to, inaccuracy, incompleteness or untimeliness in the provision of
information by Company to Nortel or fulfillment by Company of any of its
obligations under this Agreement. Company shall pay Nortel the amount of any
such costs, expenses, losses or damage incurred by Nortel.
11.5 Except for claims for bodily injury, the total liability of Nortel for
any claim of any kind for any costs, expenses, losses or damage, whether arising
in contract, warranty, tort (including negligence), strict liability or
otherwise, or for claims for indemnification arising out of, connected with, or
resulting from the performance or non-performance of this Agreement shall not,
in any event, exceed the total amount paid by Company to Nortel in respect of
the Order giving rise to the claim. In no event shall Nortel's total liability
under this Agreement exceed the total amount paid by Company to Nortel for
Services provided under this Agreement.
11.6 Any action for breach of this Agreement or to enforce any right
hereunder shall be commenced within two (2) years after the cause of action
accrues or it shall be deemed waived and barred, except any action for
nonpayment by Company of any prices, charges, fees or other amounts payable
hereunder may be brought by Nortel at any time permitted by applicable law, and
Nortel may suspend performance of any of its obligations hereunder until all
such payments are made.
ARTICLE 12. TERM AND TERMINATION
12.1 This Agreement will be in effect from the Effective Date for a period
of three (3) years. Thereafter, this Agreement shall automatically renew for one
(l) year terms, unless either party provides the other party with written notice
of its intent not to renew at least sixty (60) days prior to the end of the
original term or any renewal term.
12.2 Either party may delay performance under this Agreement or terminate
this Agreement, in whole or in part, in the event of a default by the other,
provided that the non-defaulting party so advises the defaulting party in
writing of the event of alleged default and the defaulting party does not remedy
the alleged default within sixty (60) days after written notice thereof. If the
alleged default is not capable of being remedied within sixty (60) days, the
defaulting party must commence to remedy the alleged default within such sixty
(60) day period and provide to the non-defaulting party a plan for timely
remedying the alleged default in order to avoid termination. Default shall
include, without limitation:
(i) a party's insolvency or initiation of bankruptcy or receivership
proceedings by or against a party or the execution of an assignment
for the benefit of creditors; or
(ii) either party's material breach of any of the terms or conditions
hereof including the failure to make any payment when due, if the
amount of the payment due is not in dispute.
12.3 The expiration or termination of this Agreement for any cause shall
not release either party from (i) any liability which at the time of termination
has already accrued to the other party or which thereafter may accrue in respect
to any event prior to termination, or (ii) any liability from any obligation
specified in Section l4.l7 below to survive expiration or termination.
12.4 Notwithstanding the foregoing, Nortel shall not be obligated to
provide any Services pursuant to this Agreement after termination of this
Agreement. Company shall pay the full price for Services performed prior to the
effective date of termination plus the costs to Nortel of, and necessarily
incidental to, termination, including such other costs, charges or expenses for
which Nortel has the right to reimbursement hereunder. Termination of this
Agreement shall not entitle Company to withhold payment of any amount due or
accruing to Nortel hereunder prior to the effective date of termination, or to
reimbursement of any amount previously paid to Nortel.
ARTICLE 13. CONFIDENTIALITY
13.1 Each party which receives the other party's Confidential Information
shall use reasonable care to hold such Confidential Information in confidence
and not disclose such Confidential Information to anyone other than to its
employees and employees of a Nortel Affiliate, as applicable, with a need to
know. A party that receives the other party's Confidential Information shall not
reproduce such Confidential Information, except to the extent reasonably
required for the performance of its obligations pursuant to this Agreement and
in connection with any permitted use of such Confidential Information.
13.2 Company shall take reasonable care to use Nortel's Confidential
Information only for study, operating, or maintenance purposes in connection
with Company's use of Services performed by Nortel pursuant to this Agreement.
13.3 Notwithstanding the foregoing, either party shall be free to use that
portion of the Confidential Information which may be retained in intangible form
by those employees who have had access to the Confidential Information, for any
purpose, including use in the development, manufacture, marketing and
maintenance of its products and service. The marketing of any product or
service, including the dissemination of supporting documentation, which
inherently discloses the disclosing party's Confidential Information shall not
be deemed a breach by the recipient of such obligations provided however that
ownership of the Confidential Information and all intellectual property rights
to such Confidential Information remain with the disclosing party.
13.4 The obligations of either party pursuant to this Article 13 shall not
extend to any Confidential Information which a recipient can demonstrate through
written documentation (i) was already known to the recipient, without
confidentiality obligations, prior to its disclosure; (ii) was known or
generally available to the public at the time of disclosure to the recipient;
(iii) becomes known or generally available to the public (other than by act of
the recipient) subsequent to its disclosure to the recipient; (iv) is disclosed
or made available in writing to the recipient by a third party having a bona
fide right to do so; (v) is independently developed by recipient; or (vi) is
required to be disclosed by process of law, provided that the recipient shall
notify the disclosing party promptly upon any request or demand for such
disclosure.
ARTICLE 14. MISCELLANEOUS
14.1 Publicity - A party shall not release, without the prior written
approval of the other party, any advertising or other publicity relating to this
Agreement or the contents hereof wherein such other party may reasonably be
identified. In addition, each party shall take reasonable precautions to keep
the existence and the contents of this Agreement confidential so long as this
Agreement remains in effect and for a period of five (5) years thereafter,
except as may be otherwise expressly provided in this Agreement or as may be
reasonably required to enforce this Agreement by law.
14.2 Applicable Law - The validity, construction and performance of this
Agreement shall be governed by and interpreted in accordance with the laws of
the State of Texas, except for its rules with regard to the conflict of laws.
14.3 Effects of Headings - All headings used herein are for index and
reference purposes only, and shall not be given any substantive effect. This
Agreement has been created jointly by the parties and no rule of construction
requiring interpretation against the drafter of this Agreement shall apply in
its interpretation.
14.4.1 Assignment - Other than as explicitly stated below, neither party
may assign or transfer this Agreement or any of its rights hereunder without the
prior written consent of the other party, such consent not to be unreasonably
withheld. A change in control of Company shall be deemed an assignment
hereunder. A change in control shall occur if ownership or control of more than
fifty percent (50%) of the shares of the Company entitled to elect the board of
directors changes during the term of this Agreement. Company's consent shall not
be required for any assignment or transfer by Nortel (a) to any Nortel Affiliate
of all or any part of this Agreement or of Nortel's rights hereunder, or (b) to
any third party of Nortel's right to receive any monies ("Receivables") which
may become due to Nortel pursuant to this Agreement.
14.4.2 Company hereby consents to the sale of Receivables by Nortel
without the necessity for any further notice and without any qualification on
such consent. Company grants permission for Nortel to disclose the provisions of
this Agreement 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.
14.5 Subcontracting - Nortel may subcontract any of its obligations under
this Agreement, but no such subcontract shall relieve Nortel of primary
responsibility for performance of its obligations.
14.6 Non-Waiver - The failure by either party hereto at any time to require
performance by the other party or to claim a breach of any provision of this
Agreement shall not be construed as affecting any subsequent breach or the right
to require the performance with respect thereto or to claim a breach with
respect thereto.
14.7 Relationship of the Parties Nortel shall perform the Services as an
independent contractor, and the provisions of this Agreement shall not be
construed to establish any form of partnership, agency or other joint venture of
any kind between Nortel and Company, nor to constitute either party as the
agent, employee or legal representative of the other. All persons furnished by
either party to accomplish the intent of this Agreement shall be considered
solely as the furnishing party's employees or agents and the furnishing party
shall be solely responsible for compliance with all laws, rules and regulations
involving, but not limited to, employment of labor, hours of labor, working
conditions, workers' compensation, payment of wages, and withholding and payment
of applicable taxes, including, but not limited to income taxes, unemployment
taxes, and social security taxes.
14.8 Force Majeure - If the performance by a party of any of its
obligations under this Agreement shall be interfered with by reason of any
circumstances beyond the reasonable control of that party, including without
limitation, fire, explosion, acts of God, war, revolution, civil commotion,
unavailability of supplies or sources of energy, power failure, breakdown of
machinery, delays regarding zoning, easements or deed restrictions, any legal
proceedings between parties unrelated to the parties hereto or labor
difficulties, including without limitation, strikes, slowdowns, picketing or
boycotts, then that party shall be excused from such performance for a period
equal to the delay resulting from the applicable circumstances and such
additional period as may be reasonably necessary to allow that party to resume
its performance. With respect to labor difficulties as described above, a party
shall not be obligated to accede to any demands being made by employees or other
personnel.
14.9 Taxes - Company shall at Nortel's direction promptly reimburse Nortel
or pay directly to the applicable government or taxing authority all taxes and
charges arising hereunder, including, without limitation, penalties and
interest, except for taxes computed upon the net income of Nortel.
14.10.1 Hazardous Materials - Prior to issuing any Order for Services to
be performed at Company's facilities, Company shall identify and notify Nortel
in writing of the existence of all Hazardous Materials which Nortel may
encounter during the performance of such Services, including without limitation,
any Hazardous Materials contained within any equipment to be removed by Nortel.
14.10.2 If Company breaches its obligations pursuant to Section 14.10.1,
(a) Nortel may discontinue the performance of any Services which may be
affected by Hazardous Materials until all the Hazardous Materials have been
removed or abated to Nortel's satisfaction by Company at Company's sole expense,
and (b) Company shall defend, indemnify and hold Nortel harmless from any and
all damages, claims, losses, liabilities and expenses, including without
limitation, attorney's fees, which arise out of Company's breach of such
obligations.
14.11 Notice - All notices required or permitted to be given hereunder
shall be in writing and shall be deemed given when delivered (i) by hand, or
(ii) by facsimile, transmission (confirming the same by mail) or (iii) by
certified or next-day mail addressed as follows:
If to Company:
WorldPort Communications, Inc.
1825 Barrett Boulevard
Atlanta, Georgia 30144
USA
Attention: Chief Executive Officer
Facsimile: (770) 792-0676
If to Nortel:
Northern Telecom Inc.
2350 Lakeside Boulevard
Richardson, Texas 75082-4399
USA
Attention: Vice President and General Manager
Facsimile: 972-685-3284
Either party hereto may change its address by a notice given to the other party
hereto in the manner set forth above.
14.12 Information and Documentation - Company shall provide any
information and/or documentation that Nortel reasonably requests from Company
and that is necessary for Nortel to properly perform any of its obligations
hereunder. Such information shall be provided in a form reasonably specified by
Nortel by the dates specified by Nortel.
14.13 Export - Company shall not export any Products or technical data
received from Nortel pursuant to this Agreement, or release any such Products or
technical data with the knowledge or intent that such will be exported or
transmitted to any country or to foreign nationals of any country, except in
accordance with applicable U.S. law concerning exporting and with written
consent of Nortel. Company shall obtain all government authorizations in
accordance with applicable law prior to exporting or transmitting any such
Products or technical data.
14.14 Severability - If any provision of this Agreement is declared or
determined to be invalid or unenforceable under applicable law, the remaining
provisions shall continue in full force and effect and the parties shall
substitute for the invalid provision a valid provision which most closely
approximates the economic effect and intent of the invalid provision.
14.15 Modification of Agreement - No addition to or modification of
this Agreement shall be effective or binding on either of the parties hereto
unless reduced to writing and executed by the respective duly authorized
representatives of each of the parties hereto.
14.16 Entire Agreement - This Agreement, including the Exhibits,
Schedules and Annexes which are attached hereto and incorporated herein,
comprises all the terms, conditions and agreements of the parties hereto with
respect to the subject matter hereof and supersedes all previous negotiations,
proposals, commitments, writings, publications and understandings of any nature
whatsoever. No Exhibits, Schedules or Annexes modified or created subsequent to
the execution of this Agreement shall be deemed to be incorporated into this
Agreement unless mutually agreed in a writing and signed by a duly authorized
representative of each party.
14.17 Survivorship - Any terms of this Agreement, which by their nature
are intended to survive including but not limited to Articles 8, 9, 10, 11, 13
and 14 and Sections 4.4 and 12.3 shall survive the termination or expiration of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement.
NORTHERN TELECOM INC. WORLDPORT COMMUNICATIONS,
INC.
By: By:
Name: Name:
(print) (print)
Title: Title:
Date: Date:
EXHIBIT A to Master Services Agreement
SERVICE ANNEXES
SERVICE ANNEX 1.0 STANDARD SERVICES
The services described in this Service Annex 1.0 represent the Standard Services
with respect to which Company may issue purchase orders from time to time during
the term of the Agreement. Nortel will perform Standard Services either
remotely or at the Company's location, as designated by Company in the
applicable purchase order.
Standard Services will generally be performed during normal business hours, from
8:00 a.m. until 5:00 p.m. (with a one (1) hour lunch break), from Monday through
Friday, excluding Nortel's standard holidays ("Normal Business Hours").
Company must provide Nortel with written notice at least six (6) weeks prior to
the desired Commencement Date of ordered Standard Services, except as stated
otherwise below. In the event that Company desires to extend the duration of
any ordered Standard Services, Company must provide Nortel with written notice
at least two (2) weeks prior to the original completion date of the ordered
Standard Services, except as stated otherwise below.
All prices, charges and fees set forth in this Service Annex 1.0 are valid for a
period of twelve (12) months following the Effective Date of the Agreement. In
the event that Company issues a purchase order for Standard Services after the
initial twelve (12) months of the term, but prior to the expiration or
termination, of the Agreement, Nortel shall provide Company with written
notification of the then-current prices, charges and fees for the Standard
Services ordered. Nortel shall issue monthly invoices for Standard Services
performed during each month, and Company shall pay the entire invoiced amount
within thirty (30) days after the date of invoice, except as stated otherwise
below.
The prices, charges and fees set forth in this Service Annex 1.0 do not include
travel and living expenses incurred by Nortel. Nortel shall issue monthly
invoices for actual travel and living expenses (plus a [*] administrative fee)
incurred during each month, and Company shall pay the entire invoiced amount
within thirty (30) days after the date of invoice.
Nortel's standard overtime rate is time and one half, except as stated below.
1.1 POST CUTOVER INTEGRATION SERVICES
Subsequent to the Turnover Date for an Initial System, Nortel will assign
one (1) technician to provide Post Cutover Integration Services ("PCI Services")
at the Service Site during Normal Business Hours. PCI Services will include
testing of each Initial System to confirm that each Initial System operates as
designed ("Switch Grooming") and that the features engineered for each Initial
System operate correctly in accordance with Nortel's standards and procedures
("Feature and Call Through Testing"). The tests to be performed by Nortel will
include, but will not be limited to, the following:
I. Hardware and Software Testing
A. Install and Test Alarms
1) install cross connects, datafill scan and SD points
2) verify operation and detection of alarms
B. Patch Verification
1) verify patching of peripherals
C. REX Testing
1) set up switch to test its integral parts
D. Switch Grooming
1) set up switch to run Operation and Measurement ("OM") logs
2) set up switch to run maintenance reports
3) set up switch security measures
II. Trunk Testing
A. Install and Perform Transmission Tests
1) test Call Through Features
2) verify CDR trunks
3) verify SS7 Translations and confirm that datafill properly
performed
B. Wire and Cross Connect DSX
1) establish links between transmission facilities with all testing being
performed within the switch room
C. Verification of DSX Cross Connect
D. Interconnection Testing
1) test Transmission and/or ROTL
2) test Call Through dial plan on one trunk member per card
III. Required Line Testing (DMS-500)
A. Line to Line Matching
1) verify NPA's, NNX's and AMA's with the demarcation point for testing
set inside the main distribution frame within the switch room
1.1.1 COMPANY'S RESPONSIBILITIES
In order for Nortel to commence the PCI Services, Company must complete the
following activities with respect to each Initial System at a Service Site:
Ensure that all transmission links are terminated and labeled on the DSX or
distribution frame
blocks;
B. Ensure that trunk facilities are connected to the respective Local
Exchange Carriers ("LEC") at the above sites;
C. Order the appropriate translations from the LEC's access tandem in
order to translate Company's originated calls;
D. Establish a phone board for telephone set and feature evaluations;
E. Provide a test unit or equivalent for DS-1/DS-3 testing, as well as a
PRI monitor; and
Provide a template which identifies specific cross-connect allocations for
trunk and any line
facilities.
1.1.2 TERM
Company may order initial PCI Services ("Initial PCI Services") for each
Initial System in increments of four hundred eighty (480) hours per Initial
System. Company may extend the Initial PCI Services in increments of forty (40)
hours per Initial System ("Extended PCI Services").
1.1.3 FEES
The price for each 480-hour increment of Initial PCI Services is [*]. The
price for each 40-hour increment of Extended PCI Services is [*] per Initial
System. Nortel's overtime rate for PCI Services is [*] per hour for each hour
of PCI Services provided by Nortel after Normal Business Hours.
1.2 ON-SITE FIELD MAINTENANCE SUPPORT SERVICES
Nortel will assign one (1) technician per each DMS-family switching system
("Switch") to perform On-Site Field Maintenance Support Services ("Field Support
Services") at the Service Site during Normal Business Hours. The Field Support
Services technician(s) will perform preventative maintenance, address Switch
problems, perform emergency procedures, and perform administrative functions,
subject to the instructions provided by Company within the Customer Specified
Procedure ("CSP"), as directed by Nortel's Remote Surveillance Center ("RSC")
and Company's Network Operating Center ("NOC"). Field Support Services will
include, but will not be limited to, the following services:
A. Clear Switch, trunk and transport troubles as received by the RSC, CSP
and NOC;
B. Perform routine Switch and transport tasks and procedures as scheduled
and assigned by the RSC, CSP and/or NOC;
C. Prepare back-up office image to tape as scheduled by the RSC;
D. Perform back-up on proper media devise;
E. Replenish printer paper;
F. Maintain a marked, proven set of maintenance spare cards;
G. Maintain the AMA/CDR Tape Log, the Circuit Pack Repair/Replacement
Log, the Site Trouble Ticket Log and the Site Trouble Ticket Log;
H. Perform Circuit Pack Replacement, including acceptance, testing and
replacement of in-service spare cards received from repair and return,
as directed by RSC, CSP and/or NOC;
I. Operate manual answer of dial-up port data sets as required and
restore when dial-up is complete;
J. Request technical assistance from RSC or TAS as required;
K. Supervise hardware change controls;
L. Provide support for service orders including providing assistance in
moves, adds and changes;
M. Provide MDF assignments and connections;
N. Participate in requested major failure and outage investigation
meetings;
O. Assist with data modification for routing and translation changes in
the trunk network and for the Company's groups;
P. Perform preventative maintenance as required by CSP or NOC;
Q. Assist the control/help desk with tracking and resolution of user
trouble reports;
R. Provide trunk problem resolution and coordination assistance with
other Switches;
S. Process AMA/SMDR tapes and billing tapes;
T. Provide PCL/BCS application support; and
U. Maintain up-to-date documentation for NTP, GS, IS and EWB.
Nortel will provide standard issue tool kits and volt-ohmmeters to each
technician. Company shall be responsible for providing any additional test and
measuring equipment, computer terminals and/or on-line documentation required
for performance of the Field Support Services.
1.2.1 TERM
Company may order initial Field Support Services ("Initial Field Support
Services") for each Switch in increments of six (6) months per Switch. Company
may extend the Initial Field Support Services in increments of forty (40) hours
per Switch ("Extended Field Support Services").
1.2.2 FEES
The price for each 6-month increment of Initial Field Support Services
is[*]. The price for each 40-hour increment of Extended Field Support Services
is[*].
In addition to the fees described above, Nortel will invoice Company for
any extraordinary expenses (such as computer printer paper and test equipment
calibration costs) incurred by Nortel during the performance of Field Support
Services.
1.3 REMOTE SURVEILLANCE CENTER SERVICES
Nortel's Remote Surveillance Center ("RSC") will perform system monitoring
for each Switch in Company's network through the use of programmable monitoring
devices and secured dial-back modems ("RSC Services") on a twenty four (24)
hours a day, seven (7) days a week basis. Upon the occurrence of a system
alarm, the RSC will follow the course of action prescribed for that particular
type of alarm in accordance with predetermined Company preferences. Company
will receive monthly reports describing any Switch problems by type, number and
resolution. The RSC Services will include, but will not be limited to, the
following services:
A. Perform surveillance and monitoring of alarm types designated by the
Company, which shall include, but not be limited to, the following
activities:
1) for each type of alarm, perform the course of action prescribed
by the Company;
2) contact Company in the event of a specific type of alarm
pursuant to the applicable method and frequency of contact
indicated by Company;
3) perform any responsive or remedial measures in the event of an
alarm in accordance with the Company's instructions;
4) cancel the alarm pursuant to the Company's instructions;
5) monitor the alarms during the specific days per week and number
of hours per day as indicated by the Company; and
6) perform three (3) status checks during each twenty four (24) hour
period of monitoring to verify an active communications link
between the RSC and Company's Switch.
B. Prepare a monthly RSC Report which shall include, but not be limited
to, the following:
1) report the day to day activities of the surveillance and
monitoring services;
2) provide a list of any alarms that occurred, including, but not
limited to, the type, the date and the time of each alarm;
3) report the course of action performed by the RSC for each type of
alarm signaled, if any;
4) report the responsive or remedial measures performed, if any, as
a result of an alarm; and
5) report the date and time of cancellation of any alarms.
C. Ship and install the following equipment at the Service Site:
1) one (1) Security Dial-Back Modem and cables for each modem to be
installed pursuant to the cable length specified by the Company.
All equipment supplied to the Company by Nortel shall remain the property of
Nortel, and Company shall return the equipment to Nortel or shall permit Nortel
access to the equipment for its removal upon the termination of the RSC
Services.
Company's responsibilities shall include the following:
A. Establish the type of alarms to be monitored by the RSC;
B. Define the course of action to be performed, if any, for each type of
alarm, including, but not limited to, whether the Company is to be
contacted in the event of an alarm, the method of contact, the
frequency of contact, the responsive or remedial measures to be taken
in the event of an alarm and/or whether the alarm should be canceled;
C. Define the number of days per week and number of hours per day in
which the alarms shall be monitored;
D. Provide a list of names and telephone numbers to be contacted in the
event of an alarm, in the order of contact;
E. Provide the cable length measurements for the modems to be provided
and installed by Nortel for the Company's use during the term of this
Agreement;
F. Provide Nortel with access to the Service Site for installation and
de-installation of the equipment to be provided by Nortel to Company,
as set forth below; and
G. Provide the following equipment at the Service Site:
1) two (2) switch IOC Ports; and
2) one (1) voice grade telephone line not under the control of the
Switch to be monitored.
1.3.1 TERM
RSC Services may be ordered in increments of twelve (12) months per Switch.
1.3.2 FEES
The annual fee for RSC Services is [*].
1.4 REMOTE MAINTENANCE SERVICES
Nortel's Remote Maintenance Services ("RM Services") include the RSC
Services (as described in Section 1.3.0 above) and the remote resolution of
Switch alarms, on a twenty four (24) hours a day, seven (7) days a week basis,
for each Switch in Company's network pursuant to Company's instructions. In the
event of an emergency situation that requires on-site assistance, RM Services
will notify the appropriate Nortel technician pursuant to Company's
instructions. Typical RM Services responsibilities include, but are not limited
to, the following:
Initial, document, control and escalate remedial and preventative maintenance by
Nortel in
coordination with and support of the Company's NOC, until the
problem is resolved;
Initiate corrective action in response to alarm conditions, including equipment
restoration, system diagnosis, software fault location and alarm release
procedures;
Initiate emergency recovery procedures, including manual recovery when automatic
recovery fails, as required;
Clear non-diagnostic failures, audits and assets, as required; and
Provide alarm service outage analysis and root cause analysis on system
initialization, maintenance interruptions, critical and major alarms, and
hardware and software failures utilizing system log files, processor
recovery messages and OM dumps to Company.
1.4.1 TERM
RM Services may be ordered in increments of twelve (12) months per Switch.
1.4.2 FEES
The annual fee for RM Services is [*] per Switch.
1.5 REMOTE HYBRID MAINTENANCE SERVICES
Nortel's Remote Hybrid Maintenance Services ("RHM Services") will provide,
for each Switch in Company's network, the RSC Services described in Section 1.3
above and the RM Services described in Section 1.4, except that the RM Services
will be performed after Normal Business Hours when Nortel's Field Support
Services technician and/or Company's NOC is not on duty. In order for Nortel to
perform RHM Services, either Nortel or Company must have a technician at the
Service Site during Normal Business Hours.
1.5.1 TERM
RHM Services may be ordered in increments of twelve (12) months per Switch.
1.5.2 FEES
The annual fee for RHM Services is [*] per Switch.
1.6 DATA BASE MANAGEMENT AND/OR TRANSLATIONS SUPPORT SERVICES
Nortel will assign one (1) technician to provide remote Database Management
and/or Translations Support Services ("DM/TS Services") to Company during Normal
Business Hours. DM/TS Services will include, but will not be limited to, the
following services:
Datafill design, including, but not limited to, network routing translation
datafill, trunk translation datafill, and feature translation datafill;
Standardization of translations across Company's network;
Prompt support and turnaround;
Monthly statements that provide an explanation for hours used and list the
hours remaining; and
Simplified ordering process.
In the event that Company requires on-site DM/TS Services, Nortel shall provide
one (1) technician at the Service Site within a reasonable period of time after
Company's request for such on-site services.
1.6.1 TERM
Company may initially order DM/TS Services for each Service Site ("Initial
DM/TS Services") in increments of three hundred (300) hours per Service Site.
Company may extend the Initial DM/TS Services in increments of one hundred (100)
hours per Service Site ("Extended DM/TS Services").
1.6.2 FEES AND BILLING TERMS
The price for each 300-hour increment of Initial DM/TS Services is [*] per
Service Site. The price for each 100-hour increment of Extended DM/TS Services
is [*] per Service Site. Nortel shall invoice Company for the entire amount of
the DM/TS Services upon Nortel's approval of Company's purchase order for such
services.
1.7 DISASTER AVOIDANCE AND RECOVERY PLANNING SERVICES
Nortel will develop a Disaster Avoidance and Recovery Plan ("DARP") for
each network unit of Company to be comprised of no more than one (1) Switch and
ten (10) access nodes ("Network Unit"). The DARP will address, but will not be
limited to, the following issues:
Major component replacement requirements;
Redundancy of equipment locations, capabilities, and capacity;
Network re-route availability;
Avoidance planning such as:
1) Identification of single points of failure, and
2) Avoidance measures involving redundancy and back-up systems;
Priorities for Company's services to customer;
Establish the reduced or interim services required for a switching center
to continue to function;
Identify the lost or delayed revenue resulting from the ceasing or
reduction of switch center operations;
A. Response and recovery planning, such as:
Requirements for annual test of preparation for response and recovery;
Performance of annual update of all elements of contingency plan;
Response and recovery procedures;
Employee and customer notification procedures;
Administrative and operation management actions; and
Preparation of a disaster contact manual.
1.7.1 TERM
DARP Services may be ordered in increments of five hundred twenty (520)
hours per Network Unit.
1.7.2 FEES AND BILLING TERMS
The price for each 520-hour increment of DARP Services is [*] per Network
Unit. Upon Nortel's acceptance of Company's purchase order, Nortel will invoice
Company for [*] of such amount, with the remaining [*] to be invoiced to Company
upon completion of the DARP Services.
1.8 INTEGRATION LAB SERVICES
Nortel's Integration Lab Services ("Lab Services") will provide Company
with access to Nortel's laboratory facility ("Lab") in order that Company may
perform Switch configuration testing and verification of a Software load.
Company may perform testing and verification, including, but not limited to, the
testing of unique dialing plans, unique feature interactions, third party
equipment interworking, billing verification ("Tests") in a controlled
environment and preliminary testing of Software features prior to network
activation.
Company shall designate no less than one (1) representative to perform the
Company's Tests in the Lab. In the event that Company requires the presence of
a third party in the Lab during the Testing, Company shall provide Nortel with
no less than one (1) week's prior written notice of the name, association and
purpose of the presence of the third party. Company shall provide any third
party equipment that Company requires in performing the Tests.
Nortel will provide Company with one (1) Lab technician who will provide
assistance with Company's connection between Company's equipment and Nortel's
Lab equipment ("Connectivity Assistance"), as needed. The Lab technician also
will provide Company with assistance in the Lab ("Lab Assistance") on an as-
needed basis including, but not limited to, the following types of assistance:
Check connectivity and functionality between the Company's equipment and
the Lab equipment;
Revise database tables to accommodate the various testing requirements;
Provide on-going supervision and tracking of the scheduled tests; and
Answer Company's questions regarding use of the Lab.
1.8.1 TERM
Company may order initial Lab Services ("Initial Lab Services") in
increments of ten (10) days, which may be used consecutively or non-
consecutively. Company may extend the Initial Lab Services in increments of one
(1) day ("Extended Lab Services"). The Lab technician will provide Connectivity
Assistance for a period of two (2) days in addition to the ten (10) days of
Initial Lab Services; additional Connectivity Assistance or Lab Assistance may
be ordered in increments of one (1) day. Company shall provide Nortel with no
less than four (4) weeks written notice prior to Company's requested
commencement date for Lab Services, whether Company is using its Lab Services on
consecutive days or not.
1.8.2 FEES AND BILLING TERMS
The price for each 10-day increment of Initial Lab Services is[*]. The
price for each 1-day increment of Extended Lab Services is[*].In addition, if
Company uses any portion of a 10-day increment of Initial Lab Services on non-
consecutive days, Company must pay a Lab set-up charge in the amount of [*] per
day for each new non-consecutive day on which Company conducts Tests. The price
for additional Connectivity Assistance or additional Lab Assistance is [*] for
each one (1) day increment. Nortel shall invoice Company upon Nortel's
acceptance of Company's purchase order for Lab Services.
1.9 NETWORK IMPLEMENTATION AND INTEGRATION MANAGEMENT SERVICES
Nortel will assign one (1) technician to provide Network Implementation and
Integration Management Services ("NI/IM Services") to Company during Normal
Business Hours. The technician shall be responsible for the coordination and
implementation of all Standard Services ordered pursuant to this Service Annex
1.0, as well as establishing the plans and procedures for proper interworking of
all Nortel equipment and required third party equipment. The technician will
provide Company with network integration and implementation plans, timelines,
status reports and recommendation reports, as required. NI/IM Services will
include, but will not be limited to, the following services:
Integration plan development and management;
Network specification:
Network topology:
network diagrams;
nodal functionality diagrams; and
interconnectivity options.
2) Network OSS interfaces:
a) system diagrams; and
b) type of interface required.
3) SERVICES:
a) key service descriptions and call flows; and
b) error conditions, billing, operational measurements,
restrictions and references.
4) NETWORK INTEGRATION PLAN:
a) phased schedule of capability turn-up;
b) Access, Switching and Transport options;
c) test requirements;
d) test schedule;
e) OSS interface requirements; and
f) OEM equipment options.
5) NETWORK EVOLUTION:
a) future service descriptions; and
b) software load requirements.
1.9.1 TERM
Company may initially order NI/IM Services ("Initial NI/IM Services") in
increments of five hundred twenty (520) hours. Company may extend the Initial
NI/IM Services in increments of one hundred sixty (160) hours ("Extended NI/IM
Services").
1.9.2 FEES
The price for each 520-hour increment of Initial NI/IM Services is[*]. The
price for each 160-hour increment of Extended NI/IM Services is[*].
SERVICE ANNEX 2.0 CUSTOMIZED SERVICES
The services described in this Support Annex 2.0 represent the Customized
Services with respect to which Company may request a Statement of Work from time
to time during the term of the Agreement. Nortel will perform Customized
Services either remotely or at the Company's location, as agreed to by the
parties.
Customized Services will generally be performed during Normal Business Hours.
Company must provide Nortel with written notice at least six (6) weeks prior to
the desired Commencement Date of ordered Customized Services, except as stated
otherwise below. In the event that Company desires to extend the duration of
any ordered Customized Services, Company must provide Nortel with written notice
at least two (2) weeks prior to the original completion date of the Customized
Services, except as stated otherwise below.
All prices, charges and fees set forth in this Service Annex 2.0 are valid for a
period of twelve (12) months following the Effective Date of the Agreement. In
the event that Company issues a purchase order for Customized Services after the
initial twelve (12) months of the term, but prior to the expiration or
termination, of the Agreement, Nortel shall provide Company with written
notification of the then-current prices, charges and fees for the Customized
Services ordered. Nortel shall issue monthly invoices for Customized Services
performed during each month, and Company shall pay the entire invoiced amount
within thirty (30) days after the date of invoice, except as stated otherwise
below.
The prices, charges and fees set forth in this Service Annex 2.0 do not include
travel and living expenses incurred by Nortel. Nortel shall issue monthly
invoices for actual travel and living expenses (plus a [*]) administrative fee)
incurred during each month, and Company shall pay the entire invoiced amount
within thirty (30) days after the date of invoice.
Nortel's standard overtime rate is time and one half, except as stated below.
2.1 BUSINESS PLANNING SERVICES
The Business Planning Services that Nortel may provide to Company include
Market Characterization Services, Carrier Product Selection Services, Network
Design Services, Network Operations Services, Business Case Development
Services, New Operation Launch Planning Services, and Sales and Marketing
Training Services.
2.1.1 Market Characterization Services
Market Characterization Services include the following reports:
(1) a metropolitan statistical area report, (2) a market demographics report,
and (3) a carrier and service provider report.
The metropolitan statistical area report summarizes three hundred
twenty four (324) metropolitan areas located in the United States according to
the existing opportunity to offer competitive switching and non-switching local
exchange services. This ranking may be structured within Company's objectives
for selecting a target market such as population, the number of businesses with
more than fifty (50) employees and high telecommunications usage, and the number
of existing CLEC networks.
The market demographics report groups businesses into addressable
buildings and compares businesses by industry and size to their
telecommunications needs. The results will be presented in a format mutually
agreed to between and between the Company and Nortel.
The carrier and service provider report summarizes the
characteristics of carriers and service providers located in the Company's
target market in order to identify the strengths and weaknesses of Company's
competitors, as determined through publicly available information. This report
will also detail market differentials that are applicable to Company.
2.1.2 Carrier Product Selection Services
Carrier Product Selection Services provide Company with a product
and service portfolio specific to Company's target market which lists products
recommended for Company's network in order to differentiate Company in Company's
target market and maximize Company's business return. Company will also receive
a service architecture report that provides available service architecture
products, a competitive price schedule and service options.
2.1.3 Network Design Services
Network Design Services create for Company a network solution that
will provide unique services to a particular market. Company will receive
detailed network configurations that may be used in a particular area,
comparisons of the network configurations based upon Company's needs and
business margin, comparisons of alternate technologies and products,
recommendations for network evolution and a report summarizing capital and cash
flow for business planning purposes.
2.1.4 Network Operations Services
Network Operations Services will recommend the appropriate
operations infrastructure for Company, including, but not limited to, the
employees required, power usage and other operating expenses. Company will
receive a diagram of the recommended network operation infrastructure.
In the event that Company has an operations infrastructure, an
incremental cost model may be developed. Company will receive a report that
analyzes the costs of operation, including, but not limited to, a cost model
detailing the capital required for and the operational cost of the following:
OSS Server and Company's hardware, software and system integration
requirements;
Desktop computing;
Datacomms (LAN/WAN);
Power, real estate, trucks and test equipment;
Billing processing and administration;
Manpower expenditures including the number of executives, engineers,
technicians, administrative personnel, marketing personnel, sales
personnel, consultants and attorneys required; and
Utilities, leasing, outsourcing and commission expenses.
2.1.5 Business Case Development Services
Business Case Development Services assess the viability of Company's
business. Revenue, expense and capital cash flows will be calculated in
spreadsheet form and the results will be described using the financial
indicators selected by Company. The credibility of the Business Case is based
upon the thoroughness of the market characterization, product and service demand
forecast, and capitol plan and operations assessment.
2.1.6 New Operation Launch Planning Services
New Operation Launch Planning Services are designed to assist Company in
preparing for the start-up of a new telecommunications business. Company may
receive the following services:
Customized checklists of business activities that must occur to ensure a
successful launch;
Support to the project management team in preparing project plans for the
launch; and
Strategy and action planning workshops to assist management in developing and
clarifying strategic imperatives, business goals and the action plans to
deliver them.
2.1.7 SALES AND MARKETING TRAINING SERVICES
Sales and Marketing Training Services may be utilized to develop a
training program for Company's sales and marketing staff which may include
product information, training, documentation, procedures, assistance with
tariffs and forms for Centrex, voice and data. The program will focus
exclusively on Nortel products. Company may receive the following services:
A. Develop proposals for product offering;
Develop a sales kit;
Provide training seminars;
Create documentation for Centrex, basic telephony, voice and data;
Provide vertical marketing techniques;
Develop forms and procedures for telephony service sale completion;
Sales presentation training for Centrex, includes slide presentation;
Development of forms and procedure documentation for products; and
Assistance with development of product collateral.
2.2 PLANNING, DESIGN AND ENGINEERING SERVICES
The Planning, Design and Engineering Services offered by Nortel include
Network Architecture Planning Services, Network Design and Engineering Services,
Site Planning Services, Inside and Outside Plant Engineering Support Services,
Intelligent Network Services Creation Consulting and Implementation Services,
and Advanced Intelligent Network Application Support Services.
2.2.1 Network Architecture Planning Services
Network Architecture Planning Services will provide a report
recommending future changes to Company's network. The immediate service
requirements, future expansion expectations, node design, access design,
internodal design, regulatory issues, interconnection, signaling, transport,
operations and services may reviewed in developing recommendations for Company's
network.
2.2.2 NETWORK DESIGN AND ENGINEERING SERVICES
Network Design and Engineering Services will provide a complete
set of detailed engineering documentation for Company's network including, but
not limited to the following:
Topology Diagrams: A set of configuration diagrams to provide a topological
overview of the configuration.
Backbone Network Design: A design document providing a backbone network
architecture of Company's network nodes and a comparison between
Company's network, other carrier networks and other vertical service
providers.
Access Network Design: A design document that provides an access and egress
hybrid network architecture for a target area that supports the GOS and
economic objectives.
Detailed Interconnection Design: A design document that provides an
interconnection architecture between Company's network interface node
and points of interconnection with other carrier network provider. A
report providing specific information such as a list of the facilities,
capacities, tariff status and typical time from order to delivery is
also provided.
Number Plan and Dial Plan Design: A design document that sets forth a
numbering plan and dial plan to support the network, the services
offered and the interoperability required.
Routing Plan Design: A design document that provides a set of routing
plans, based upon Network Node Type, services supported, (e.g., circuit
switched, Internet, broadband) and implementation category, (i.e.,
Network Element resident).
Signaling Network Design: A design document that provides a backbone
signaling network architecture of Company's network nodes in comparison
to PSTN and vertical service providers. The design may incorporate
multiple signaling protocols and identify specific protocols for a
particular set of services, such as CCS7 for voice, circuit switched
data, vertical service and data base query, and ATM for video and
wideband data.
A. Access Signaling Network Design: A design document that provides an
access and egress hybrid signaling network architecture for a targeted
area, including a combination of anticipated traffic and service. The
design may incorporate multiple signaling protocols for a particular
set of services, such as CCS7 for voice, circuit switched data,
vertical services, and ATM for video and wideband data.
2.2.3 Site Planning Services
Site Planning Services will perform the activities associated with
planning for equipment, power, cable installation as required for successful
turn-up of access sites, tandem nodes and central offices. Company may receive
the following services:
A facilities evaluation report which compares all potential sites by
function, central office, AN, TN and rationale for choices;
A planning report for each selected site that identifies the inside plant
requirements and restrictions in terms of:
Space, Power and HVAC;
Cabling entry, access and distribution;
EMI, bracing, venting, floor loading and risers; and
Layout plans for each selected site.
2.2.4 INSIDE AND OUTSIDE PLANT ENGINEERING SUPPORT SERVICES
Inside and Outside Plant Engineering Support Services will provide
the engineering standardization, technical specifications and recommended
equipment lists for outside plant equipment for Company's infrastructure
including, but not limited to, the following:
Splice structure;
Equipment evaluation and standardization;
Cable termination and labeling standards;
Plant interconnection drawing standards; and
Cross connection standards including splice and testing methods, color
orientation, bundle selection, route naming conventions and inventory
tracking methodologies.
2.2.5 INTELLIGENT NETWORK ("IN") SERVICES CREATION CONSULTING AND
IMPLEMENTATION SERVICES
Nortel's IN Services Creation Consulting and Implementation Services may
include:
Written service description based on the results of a whiteboard session
with Company to define a viable, deployable I.N. service;
Comprehensive call flow diagram identifying the expected response from each
nodal component (e.g., SSP, STP, SCP, NAV, etc.); and/or
Assistance/direction in datafilling each nodal component to achieve the
expected response/ results in the most efficient manner and at the least
cost.
2.2.6 ADVANCED INTELLIGENT NETWORK ("AIN") APPLICATION SUPPORT SERVICES
Nortel's AIN Application Support Services may include the following:
Overview of the predefined feature/service, providing a general
understanding of how the feature/service is intended to operate;
Documentation of the attributes of the service you wish to include in your
service offering by chairing and leading a discussion on the feature
strategy and intent with your translation personnel;
Translation overview (relative table relationships) for the target
feature/service based on customer specific data; and/or
Assistance in setting up the translations for one DMS.
2.3 IMPLEMENTATION SERVICES
The Implementation Services provided by Nortel include Carrier Registration
and Facilities Ordering Services, Customer Care Implementation Support Services,
OSS System Implementation Services, Product and Service Implementation Support
Services, Network Integration Services, Advanced Intelligent Network Service
Deployment Assistance, and Advanced Intelligent Network Documentation Support
Services.
2.3.1 CARRIER REGISTRATION AND FACILITIES ORDERING SERVICES
Carrier Registration and Facilities Ordering Services will provide
for the submission of completed forms and supporting documentation to register
Company with the industry. Company will receive assistance in obtaining
necessary carrier identifications, tariff separations, completing registrations
and filing non-legal documentation required for Company to be identified as a
Common Local Exchange Carrier ("CLEC") and/or an Interexchange Carrier ("IEC").
This service does not include any filings with a state Public Services
Commission ("PSC"), a Public Utility Commission ("PUC") or the Federal
Communications Commission ("FCC"), as such filings require legal counsel.
Company may receive the following services:
Completed applications for signature by an authorized signatory;
Technical assistance with legal filings such as:
Tariff 1 to be filed with FCC if Company is an IXC;
Service Provider Certificate of Operating Authority ("SPCOA") to be
filed with PSC and PUC;
Local Service Provider ("LSP") tariffs with PSC and PUC; and
Franchise agreements with municipalities, interconnection agreements
with other carriers.
Carrier identification codes including, but not limited to:
Access Customer Name ("ACNA");
Operating Company Number ("OCN");
Common Channel Signaling System 7 point code;
Carrier Identification Code ("CIC");
Revenue Accounting Office ("RAO") code;
Interexchange Customer Service Center ("ICSC") code; and
Collocation applications.
Number codes within the established national numbering plan, including, but
not limited to:
Central Office Codes;
TCP/IP Address Sets; and
Emergency services E911 notification.
Orders for correct and sufficient physical facilities between Company's
nodes and ILECs, IXCs, ICPs and ISPs.
2.3.2 Customer Care Implementation Support Services
Customer Care Implementation Support Services will assist Company in
the planning and implementation of a customer care center that is designed to
provide any of the following services:
Service Delivery;
Trouble reports;
Billing inquiries;
Other inquires;
Outbound customer contacts for service promotions or surveys; and
Operator and directory services.
Company may receive the following services:
Preparation of the customer service plan or relevant sections;
Development of requirements for the call center and operation support
systems used by the call center staff;
Physical planning of the call center facility;
Preparation for resourcing and development of a training plan for a call
center;
Project management of planning, building and implementation; and
Preparation of performance parameters.
2.3.3 OSS System Implementation Services
OSS System Implementation Services will manage for Company all
aspects of a system implementation project from specifications to project
management to ensure that Company's business requirements are successfully met.
Company may receive the following services:
Project management;
Coordination of all groups involved in the integrated delivery;
Specification of changes, IT infrastructure and interface requirements;
Producing the integrated project plan;
Integration testing plans development;
Verification testing;
Overall interface design, including IT infrastructure;
Interface specifications;
System Change specifications;
Project Plans;
Test plans; and
Verification test results.
2.3.4 Product and Service Implementation Support Services
Product and Service Implementation Support Services will assist
Company in designing and implementing business processes for developing and
launching new products and services, and in planning and introducing a specific
product and/or service. Company may also receive assistance in improving costs
and increasing revenues for a current product of Company.
Designing and implementing Company's business process may include the following
services:
New product introduction processes including workflow diagrams, gating
criteria, performance standards, job specific work instructions and
other process documentation such as templates for product description
requirements;
Recommended assignment of specific new product introduction process
responsibilities;
Suggestions for an optimal organizational structure to maximize the
benefits of the new product introduction process; and
Support in implementing the new product.
Product and service implementation may include the following services:
Product and service business processes and system requirements for
acquisition, service, service assurance, billing and collections of
specific product and service;
A. Development of specific product and service training packages;
B. Product and process staff training; and
C. Preparation of marketing information.
2.3.5 Network Integration Services
Network Integration Services will assist Company in fully
integrating all components, sub-systems and systems into a complete network and
certify that the network is complete. Company may receive the following
services:
Generic network test plan with a matrix that points to plans and procedures
for testing the individual network elements. This plan includes the
procedures necessary to test the interworking of the network elements
and the overall system as a whole;
Detailed network test and verification plans;
Detailed network test procedures to allow execution of the network test
plans;
Detailed network test reports that validate the network through the results
obtained from the execution of the network test plans;
Network test audits certifying that the test results are satisfactory and
that the network is ready for commercial launch;
Punch-list, troubleshooting mechanics and confirmation that suppliers will
take action to resolve problems;
Audit report that compares the designed network to the installed network
with all differences identified, explained and their impact estimated;
Report providing recommendations, estimated costs, time for deployment and
a cost benefit analysis to address differences considered as service
effecting; and
Certification of ready to launch status.
2.3.6 ADVANCED INTELLIGENT NETWORK ("AIN") SERVICE DEPLOYMENT ASSISTANCE
Nortel may provide the following AIN Service Deployment Assistance:
A written analysis of the target services network topology that may
include:
1) Evaluation of customer identified routing schemas,
2) Alternative routing schemas, if any are available, and/or
Determination of whether all Intelligent Network ("IN") components are
present and
correctly positioned;
A written document identifying the proper datafill for each Nortel IN
component (DMS, Service Builder, NAV, SCE, etc.) for a single site;
Identification of datafill for non-Nortel IN elements; and/or
Development of a feature test plan.
2.3.7 ADVANCED INTELLIGENT NETWORK ("AIN") DOCUMENTATION SUPPORT SERVICES
Nortel may provide the following AIN Documentation Support Services:
Clearly define and record the expected operation of the target service from
both the end user perspective and the telco perspective;
Identify the steps and the appropriate datafill to define and activate the
service in the various network elements; and/or
Develop a reference document for the customer.
2.4 OPERATIONS SUPPORT AND OUTSOURCING SERVICES
The Operations Support and Outsourcing Services provided by Nortel include
Business Process Improvement Services, Operations Planning Services, Operations
Review Services, and OSS System Implementation Services.
2.4.1 BUSINESS PROCESS IMPROVEMENT SERVICES
Business Process Improvement Services will assist Company in
defining, developing and implementation of Company's business processes required
to operate Company's business effectively and meet Company's customer
expectations. Company also may receive assistance in customer acquisition,
service delivery, billing and collections and service assurance. Company may
receive the following services:
Customized business process definition to meet Company's business plans;
Comparing strategic business processes to major database entities;
Process and procedure documentation;
Guidelines for transition to the new process;
Proposals for organizational changes required to support the process; and
Practical support during the implementation period.
2.4.2 Operations Planning Services
Operations Planning Services will provide Company with a draft of
an operations plan that addresses operational problems and opportunities, and
presents proposals for operational improvement. The operations plan may provide
a framework for future evolution of Company's business, identification of
immediate and long term opportunities to improve customer service, revenue
earning capability and operating efficiency, and may include the following:
New product planning, development and introduction;
Network planning and network deployment;
Customer acquisition including marketing, sales and order entry functions;
Service delivery;
Service assurance;
Billing and collections;
Network use, collection and management including record edit, validation
and control;
Operator services; and
Carrier liaison.
2.4.3 OPERATIONS REVIEW SERVICES
Operations Review Services will provide Company with a comprehensive
review of current operational performance, identifies operational problems and
identifies opportunities for improvement. Company will receive a detailed
operations review report containing an assessment of the strengths and
weaknesses of Company's business operations with specific recommendations for
improvement, and an evaluation of Company's performance compared to Company's
own objectives and standards and industry standards. Company may receive the
following services:
New product planning, development and introduction;
Network planning and network deployment;
Customer acquisition including marketing, sales and order entry functions;
Service delivery;
Service assurance;
Billing and collections;
Network usage collection and management including record edit, validation
and controls;
Operator services; and
Carrier liaison.
2.4.4 OSS SYSTEM IMPLEMENTATION SERVICES
OSS System Implementation Services will manage for Company all aspects of a
system implementation project from specifications to project management to
ensure that Company's business requirements are successfully met. Company may
receive the following services:
Project management;
Coordination of all groups involved in the integrated delivery;
Specification of changes, IT infrastructure and interface requirements;
Producing the integrated project plan;
Integration testing plans development;
Verification testing;
Overall interface design, including IT infrastructure;
Interface specifications;
System change specifications;
Project plans;
Test plans; and
Verification test results.
2.5 OSS PLANNING AND DESIGN SERVICES
The OSS Planning and Design Services provided by Nortel include OSS
Information Planning Services, Information Systems Planning Services,
Information Systems Architecture Services, OSS Solutions Design Services, OSS
Vendor Evaluation Services, and OSS Performance Review Services.
2.5.1 OSS INFORMATION PLANNING SERVICES
OSS Information Planning Services will assist Company in
developing an OSS information system plan. Company may receive the following
services:
Define and validate Company's business problem by analyzing business,
market and technology variables as well as the Company's tools and
objectives;
Develop and validate a set of architectural principles and rules to be used
in creating the OSS strategic architecture and infrastructure;
Define integration requirements between system components;
Provide system implementation recommendations based upon business needs and
technical merits;
Define future organizational structure, skills and staffing needs; and
Define testing, training and documentation strategies, goals and
directives.
2.5.2 INFORMATION SYSTEMS PLANNING SERVICES
Information Systems Planning Services will provide Company with an
integrated and planned OSS system deployment, migration planning for ongoing
launching of systems, system functionality and infrastructure, and future
resource requirements for OSS management including, but not limited to, budget
requirements, skills, staffing and capacity. Company may receive the following
services:
OSS System implementation selections;
Integrated project plan for OSS including system introduction, migration
and major functional enhancement;
Interface definitions and testing;
OSS standards for testing, documentation and training; and
Resource plan.
2.5.3 INFORMATION SYSTEMS ARCHITECTURE SERVICES
Information Systems Architecture Services will provide Company
with an operational blueprint for Company's OSS system and the infrastructure
upon which the OSS system will operate. This service ensures consistency and
interoperability of components, reduces duplication of data and processes, sets
the technical boundaries for the OSS and provides a framework for planning and
development of systems and networks based upon the principles set forth in the
Information Systems Plan described in Section 2.5.0.2 above. Company may
receive the following services:
Application architecture comparing business function with OSS function;
Data architecture defining the data requirements and database of record;
and
IT architecture defining the infrastructure supporting and constructing
systems.
2.5.4 OSS SOLUTION DESIGN SERVICES
OSS Solution Design Services will assist Company in the
development of an integrated project plan for Company's OSS, based upon
Company's business requirements. Company may receive an integrated solution
design document which outlines the recommended changes to Company's existing OSS
system, functions of a new OSS and interface specifications between OSS systems.
Company may receive the following services:
Produce an integrated solution for OSS;
Define the changes required to existing OSS and functional specification of
new OSS to support business requirements;
Define interface requirements for OSS;
Identify dependencies, risk and sizing per each OSS; and
Produce an integrated project plan.
2.5.5 OSS VENDOR EVALUATION SERVICES
OSS Vendor Evaluation Services will assist Company in making
decisions regarding the selection of an OSS platform and OSS application
procurement in the event that Company is a new or growing operator. Company may
receive the following services:
Preparation of an request for purchase ("RFP") based upon Company's
business and technical requirements for submission to a relevant vendor;
Prepare vendor evaluation and selection criteria in consideration of
Company's defined systems and business requirements;
Assess vendor capability based upon financial stability, support, product
functionality and technical competence;
Assess technical platforms against compliance with industry standards and
Company needs as stated in the RFP;
Assess application functionality in comparison to Company's requirement
model for each functional area; and
Prepare a list of suitable vendors.
2.5.6 OSS PERFORMANCE REVIEW SERVICES
OSS Performance Review Services will provide Company with a
comprehensive assessment of Company's current OSS environment, performance and
capacity for meeting Company's future requirements, and the identification and
prioritizing of areas critical to future growth of Company's business.
Company's OSS and business teams will participate in workshops in order to
formulate accurate information regarding the flow of information and business
process supported by each OSS application. The results will be used to compare
the technical and functional fit of each current OSS application against
Company's business requirements. A gap analysis is provided including
recommendations for changes to current applications, options to purchase third
party components and a migration plan for reaching the target.
EXECUTION COPY
CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT, PORTIONS FOR
WHICH CONFIDENTIAL TREATMENTS IS REQUESTED ARE DENOTED BY [*], [**], [***].
MATERIAL OMITTED HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
ATLANTIC CROSSING/AC-1
SUBMARINE CABLE SYSTEM
CAPACITY PURCHASE AGREEMENT
THIS AGREEMENT (as amended, supplemented or otherwise modified
from time to time, this "Agreement"), entered into as of this 7th day of April,
1998, between GLOBAL TELESYSTEMS LTD., (in the process of changing its name to
Atlantic Crossing Ltd.) a corporation organized and existing under the laws of
Bermuda and having its principal office in Bermuda (the "Grantor"), and each
party a signatory hereto (each such party being called the "Purchaser").
WITNESSETH:
WHEREAS, the Grantor, its subsidiaries, SSI Atlantic Crossing LLC and
AT&T
Submarine Systems, Inc., now known as Tyco Submarine System Ltd. (together with
its successors and assigns, "TSSL") have entered into the Project Development
and Contract, dated Match 18, 1997 (as amended, supplemented or otherwise
modified from time to time, the *Supply Contract), pursuant to which TSSL has
agreed to design, manufacture, construct, install and deliver a fiber optic
cable system connecting (a) the United States to the United Kingdom, (b) the
United Kingdom to the Netherlands, (c) the
Netherlands to Germany and (d) Germany to the United States (the "System");
WHEREAS, the Grantor, its subsidiaries, SSI Atlantic Crossing LLC and
TSSL have also entered into the Operations, Administration and Maintenance
Agreement, dated as of March 25, 1997 (as amended, supplemented or otherwise
modified from time to time, the "OA&M Agreement"), pursuant to which TSSL has
agreed, in accordance with the terms thereof, to operate, administer and
maintain the System;
WHEREAS, the Purchaser desires to acquire rights with respect to the
Purchased Capacity (as defined herein) on an indefeasible right of use basis
(oIRUo) and such Purchased Capacity represents capacity on the System between
the System Interface (as defined herein) of the applicable cable stations;
WHEREAS, the Purchased Capacity is comprised of: (a) S Capacity (as
defined herein), which will be conveyed by the Grantor to the purchaser pursuant
to this Agreement; and (b) to the extent necessary to allow the Purchaser to use
its IRU in the applicable S Capacity, T Capacity (as defined herein), which will
be conveyed by subsidiaries of the Grantor to the Purchaser pursuant to the
Indefeasible Right of Use Agreement, attached hereto as Annex A; and
WHEREAS, in order to obtain inland connection services in the United
States and the United Kingdom for the purpose of extending the Purchased
Capacity inland to a location in New York City and London (the "1nland
Capacity"), the Purchaser will enter into separate agreements (the oInland
Capacity Agreementso) With subsidiaries or affiliates of the Grantor located in
the United States and the United Kingdom (the "Inland Affiliates");
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants contained herein, covenant and agree with each other as follows:
1. DEFINITIONS. Terms defined in the preamble, in the recitals and Annex
B hereto shall have their respective meanings with used herein and the following
terms shall have the following meanings:
"Access Connection" as defined in Annex B to this Agreement.
"Adjusted Pro Rate Share" as defined in Annex B to this Agreement.
"Advisory Committee" as defined in paragraph 5 Annex B to this Agreement.
"business day" means a day other than Saturday, Sunday or other day on which
commercial banks in New York City or Bermuda are authorized or required by law
to close.
"Grantor's Account" means the bank account of the Grantor maintained with [***]
or such other account as the Grantor may designate to the Purchaser in writing.
Wire instructions for the above-referenced account are as follows:
Account Name: Global Telesystems Ltd.
Account Number: [***]
Bank Name: [***]
ABA No.: [***]
Reference: [***]
"Maintenance Costs" as defined in Section 4(a) of this Agreement.
"Minimum Capacity Unit" of "MCU" means the minimum capacity to be purchased by
the Purchaser in the System. An STM-1 is designated as the MCU for purposes of
this Agreement.
"Operator" means TSSL and its successors and assigns as operator under the OA&M
Agreement or any successor operator of the System appointed by Grantor.
"Parent Guaranty" means a Guaranty substantially in the Form of Attachment 5
hereto.
"Payment Date" means, with respect to the IRU granted in respect of any
Purchased Capacity, the date on which the Purchaser pays the Grantor (for the
benefit of the Grantor and the benefit of the Subsidiary Grantors), in
immediately available dollars, the amount required to be paid by the Purchaser
for such Purchased Capacity in accordance with Section 3(b) of this Agreement.
"Payment Due Date" means, with respect to the IRU granted in respect of any
Purchased Capacity, the later of (a) [*] and (b) the date on which each of the
following has been satisfied: (i) the occurrence of the RFS Date for such
Purchased Capacity and (ii) if the Purchaser has entered into an Inland Capacity
Agreement with an Inland Affiliate, the occurrence of the oRFS Dateo for the
Inland Capacity (as such term is defined in the Inland Capacity Agreement).
"Presale Purchaser" means any purchaser who acquires an IRU in capacity on
Segments S-1, S-2 and/or S-4 from the grantor which was contracted for prior to
the earlier of (x) the RFS Date for the entire System and (y) [*]
"Purchased Capacity" means the S Capacity set forth on Schedule I hereto, as
such Schedule may be amended from time to time to reflect purchases of
additional capacity pursuant hereto, together with to the extent necessary to
allow the Purchaser to use it IRU in the applicable S Capacity, the applicable T
Capacity.
"Purchase Price" means, with respect to the IRU granted in respect of any
Purchased Capacity, the amount payable by the Purchaser to the Grantor (for the
benefit of the Grantor and the benefit of the Subsidiary Grantors) in respect of
such Purchased Capacity and set forth under the heading oPurchase Priceo on
Schedule I to this Agreement.
"Residual Capacity" means the Segment S-1 Residual Capacity, the Segment S-2
Residual Capacity, the Segment S-3a Residual Capacity, the Segment S-3b Residual
Capacity, the Segment S-3c Residual Capacity and the Segment S-4 Residual
Capacity.
"RFS Date" means, with respect to any Segment, the date on which such Segment
will be available for service which shall be the date on which the Grantor
certifies that (i) such Segment has achieved the standard described in
Attachment 4 to Annex B hereto, (ii) such Segment has been accepted by Grantor
as ready for commercial service under the Supply Contract, (iii) the independent
engineer engaged by Grantor's senior lenders has concurred with such acceptance
and (iv) Grantor has obtained all material licensee, permits and governmental
authorizations to perform its obligations hereunder with respect to such
Segment. The anticipated RFS Date for Segment S-1 (and the related T Segments)
is May 31, 1998. The anticipated RFS Date for Segment S-2 is November 30, 1998.
The anticipated RFS Date for Segment S-3a, Segment S-3b, Segment S-3c, Segment
S-4 and the entire System is February 22, 1999. The foregoing dates are merely
estimates as of the date hereof and shall not be deemed to be representations,
covenants or conditions to obligations.
"Right of Use Agreement" means the Indefeasible Right of Use Agreement, dated as
of the date hereof, made by GT Landing Corp., GT U.K. Ltd., Global Telesystems
GmbH and GT Netherlands B.V., in favor of purchasers of capacity on the System
(including the Purchaser) and attached as Annex A to this Agreement, as such
agreement may be amended, supplemented or otherwise modified from time to time
in accordance with Paragraph 9 thereof.
"S Capacity" means capacity on the System available on any S Segment.
"S Segments" the collective reference to Segment S-1, S-2 and S-3a, S-3b, S-3c
and S-4, as necessary.
"Segment S-1" as defined in Annex B to this Agreement.
"Segment S-1 Residual Capacity" as defined in Annex B to this Agreement.
"Segment S-2" as defined in Annex B to this Agreement.
"Segment S-2 Residual Capacity" as defined in Annex B to this Agreement.
"Segment S-3a" as defined in Annex B to this Agreement.
"Segment S-3a Residual Capacity" as defined in Annex B to this Agreement.
"Segment S-3b" as defined in Annex B to this Agreement.
"Segment S-3b Residual Capacity" as defined in Annex B to this Agreement.
"Segment S-3c" as defined in Annex B to this Agreement.
"Segment S-3c Residual Capacity" as defined in Annex B to this Agreement.
"Segment S-4" as defined in Annex B to this Agreement.
"Segment S-4 Residual Capacity" as defined in Annex B to this Agreement.
"Segment T-1" as defined in Annex B to this Agreement.
"Segment T-2" as defined in Annex B to this Agreement.
"Segment T-3" as defined in Annex B to this Agreement.
"Segment T-4" as defined in Annex B to this Agreement.
"Segments" the collective reference to the S Segments and the T Segments.
"Subsidiary Grantors" the collective reference to GT Landing Corp., GT U.K.
Ltd., Global Telesystems GmbH and GT Netherlands B.V., each a wholly-owned
subsidiary of the Grantor.
"Supplier" means TSSL and its successors and assigns as contractor under the
Supply Contract or any successor contractor of the System appointed by Grantor.
"T Capacity" means capacity on the System available on any T Segment.
"T Segments" the collective reference to Segment T-1, T-2, T-3 and T-4.
"Tier III Price" shall mean, for purposes of paragraph (f) of Section 2, the
"Tier 3" price for each Transatlantic Segment set forth in the then current
pricing schedule, provided in no event shall such amount exceed [*] MCU.
"Total Purchase Price" means the aggregate amount payable by the Purchaser to
the Grantor (for the benefit of the Grantor and he benefit of the Subsidiary
Grantors) for the IRU of the Purchased Capacity as set forth on the bottom of
Schedule I to this Agreement opposite the phrase "Total Purchase Price."
"Transatlantic Segments" means Segments S-1, S-2 and S-4.
IRU FOR PURCHASED CAPACITY.
Purchaser. World Port Communications, Inc. is defined as the
oPurchasero for all purposes of this Agreement.
Grant of IRU. Effective on the Payment Date, the Grantor, together
with the applicable Subsidiary Grantors pursuant to the Right of Use Agreement,
grants to the Purchaser, for the term of this Agreement, an IRU is Purchased
Capacity for which payment has been made in accordance with Section 3(b) of this
Agreement. Each purchase and grant of the IRU in the Purchased Capacity takes
place in Bermuda.
Annex B. Certain rights and obligations with respect to the IRU of the
Purchased Capacity are described in Annex B hereto, which is incorporated herein
by reference.
Residual Capacity. If the Purchaser is a Presale Purchaser, then,
effective on the date which is [**] years after the RFS Date for the entire
System, the Grantor, together with the applicable Subsidiary Grantors pursuant
to the Right of Use Agreement, grants to the Purchaser, at no additional charge
and for the remaining term of this Agreement, an IRU in (i) the Purchaser's
Adjusted Pro Rate Share of the Segment S-1 Residual Capacity, (ii) the
Purchaser's Adjusted Pro Rate Share of the Segment S-2 Residual Capacity, (iii)
the Purchaser's Adjusted Pro Rate Share of the Segment S-3a Residual Capacity,
(iv) the Purchaser's Adjusted Pro Rate Share of Segment S-3b Residual Capacity,
(v) the Purchaser's Adjusted Pro Rate Share of Segment S-3c Residual Capacity,
(vi) the Purchaser's Adjusted Pro Rate Share of Segment S-4 Residual Capacity.
The Grantor shall promptly notify the Purchaser of the amount of capacity in
which the Purchaser obtained an IRU pursuant to this Section 2(d). If the
Purchaser acquires an IRU in any Residual Capacity, the terms contained herein
binding on the Purchaser with respect to Purchased Capacity shall be binding on
the Purchaser with respect to such Residual Capacity. The Purchasers Adjusted
Pro Rate Share in any S-Segment shall be allocated in half MCUs, and the Grantor
shall be permitted to round down to the nearest whole MCU.
Presale Upgrade Rights. If the Grantor and the Subsidiary Grantors
determine to increase the Initial Design Capacity (as defined in Annex B) of the
System after the date which is [**] years after the RFS Date for the entire
System, the Grantor shall deliver to the Purchaser (only if the Purchaser is a
Presale Purchaser) notice of the proposed increase. If the Purchaser is a
Presale Purchaser, the Purchaser will have the right to receive a portion of
such increased capacity (as provided in Section 2(g) below), on terms to be
provided at that time which shall be no less favorable than those accorded to
other potential purchasers at such time for the purchase of similar amount of
capacity.
Additional Purchases. The Purchaser will have the right to elect to
purchase additional MCUs of Purchased Capacity on any Transatlantic Segment at
any time, so long as and only to the extant that at such time uncommitted
capacity remains available in the subject Segment. The purchase price for such
additional MCUs shall be as follows:
First additional Transatlantic Segment [*][/ MCU
Second additional Transatlantic Segment [*] / MCU
Third additional Transatlantic Segment [*]/ MCU*
Each additional Transatlantic Segment [*]/ MCU
[*] /MCU if such additional MCU is purchased after [*]
provided that such purchase price payable shall be increased
by [*] per MCU if such Transatlantic Segment is Segment S-2or Segment S-4.
The purchase price for each additional MCU on any Segment
shall be due and payable on RFS Date of such Segment or if such RFS Date has
occurred prior to the date of such election, then on the date which occurs 30
days after the date such election is made. The Purchaser may elect to exercise
such right by (1) delivering written notice to Grantor, which notice shall set
forth the number of MCUs and the Segments to which such election shall apply and
(2) making an initial payment to Grantor of [*] of the applicable purchase price
of such additional capacity, which payment shall be governed by the provisions
of Section 3(a) below. Upon delivery of such election notice and payment, to
the extent that such additional capacity remains uncommitted at that time, the
Purchaser shall be irrevocably obligated to purchase such additional MCU(s) of
Purchased Capacity on the subject Segment(s) on the payment due date described
above in this Section 2(f). The [*] initial payment made pursuant to this
Section 2(f) shall be credited toward the payment of the purchase price pursuant
to this Section 2(f), subject to 21 hereof.
Upgrades. The Grantor hereby grants to the Purchaser an option to
acquire MCUs of Purchased Capacity on any Segment if and when such Segment is
upgraded (an oUpgraded Segmento), which option shall be exercised by delivery to
the Grantor of the election notice described below in this Section 2(g) on or
prior to the date which is 30 days after the Grantor shall notify Purchaser of
the expected RFS Date of the Upgraded Segment(s) (the oUpgrade Option
Deadlineo). The purchase price for each such MCU of Purchased Capacity shall be
equal to the lesser of (i) the market price at which Grantor is offering
capacity on such Upgraded Segment or (ii) the applicable price set forth for the
purchase of additional MCU's of Purchased Capacity in Section 2(f) above in the
case of any Transatlantic Segment and [*] in the case of any European Segment
(provided that, in the case of European Segments, Purchaser is also purchasing
an equal number of MCUs on a Transatlantic Segment(s)). The number of MCUs that
Purchaser may elect to purchase on any Upgraded Segment under this Section 2(g)
shall not exceed the number of MCUs that Purchaser acquired on such Segment
pursuant to this Agreement. The Purchaser may elect to exercise such option by
delivering a written election notice to the Grantor on or before the Upgrade
Option Deadline, which election notice shall set forth the number of MCUs and
the Upgraded Segments to which such election applies (the "Upgrade Purchased
Capacity") and which shall be irrevocably obligated to purchase on the RFS Date
of the Upgraded Segment, for the purchase price described in this Section 2(g),
the Upgrade Purchased Capacity. This Section 2(g) shall not preclude additional
purchases pursuant to Section 2(f) hereof.
Option for Segments S-3a and S-3c. Thc Grantor hereby grants to the
Purchaser the option to purchase Purchased Capacity on Segment S-3a and/or
Segment S-3c for a purchase price of [*] per MCU, which option shall be
exercised through receipt by the Grantor of the election notice and the
additional payment described below in this Section 2(h) in the next sentence For
each MCU on a European Segment which Purchaser elects to purchase under this
Section 2(h), Purchaser must have committed to purchase hereunder an MCU on a
Transatlantic Segment. The Purchaser may elect to exercise such option by (i)
delivering a written election notice to the Grantor, which election notice shall
be irrevocable, and (ii) (A) if such notice is delivered prior to the RFS Date
of the relevant European Segment, making an initial payment to Grantor of [*]
for each MCU to be purchased under this Section 2(h) in order to increase the
Initial payment pursuant to Section 3(a) below or (B) If such notice is
delivered after the RFS Date of the relevant European Segment, making the full
payment to Grantor of [*] for each MCU being purchased under this Section 2(h).
If such notice is delivered prior to the RES Date of the relevant European
Segment, the Purchaser shall upon delivery of such notice be irrevocably
obligated to purchase the elected number of MCUs on Segments S-3a and S-3c on
the respective Payment Due Dates. The [*] initial payment(s) to be made in such
event pursuant to this Section 2(h) shall be credited toward the[*] purchase
price pursuant to this Section 2(h), subject to Section 21 hereof. If the
Purchaser purchases a MCU on Segment S-3a or S-3c pursuant to this Section 2(h),
it shall obtain a omatchingo MCU of Capacity on Segment S-3b for no extra
charge.
Parent Guaranty. Intentionally Omitted.
Interim Restoration. Intentionally Omitted.
Inland Capacity. The Grantor will ensure that the price for Inland
Capacity under the Inland Capacity Agreements will be [*] between the Brookhaven
Cable Landing Station and Hudson Street in New York and [*],between the White
Sands Cable Landing Station and Docklands in London for each STM01 of capacity
purchased, each for a [*] term.
AT&T Guaranty. Grantor represents that it has obtained from AT&T Corp.
a guaranty that TSSL will complete construction of the System pursuant to the
Supply Contract. Grantor will use reasonable commercial efforts to cause AT&T
Corp. to perform its obligations under such guaranty. All references to the
Supply Contract herein shall be deemed to include such guaranty.
Additional Purchases. In addition to the option granted to the
Purchaser under Section 2(h). The Purchaser shall have the right to purchase
additional European Segments for a purchase price of [*] per MCU. The mechanics
(notices, downpayment, etc.) of such purchase shall be consistent with those set
forth in Section 2(h).
3. PAYMENT FOR CAPACITY.
Initial Payment. Upon the execution and delivery of this Agreement,
the Purchaser shall make an initial payment to the Grantor's Account (for the
benefit of the Grantor and the benefit of the Subsidiary Grantors), in
immediately available Dollars, in an amount equal to [*] (the oInitial
Paymento). Upon payment of the Initial Payment, Purchaser's IRU in the capacity
on the applicable S Segment shall be reserved. The Initial Payment shall be
non-refundable (except as provided in Section 21 of this Agreement) and shall be
credited toward the payment of the Total Purchase Price.
Payment of Purchase Price. In exchange for the IRU interest granted
pursuant to this Agreement and the Right of Use Agreement in any Purchased
Capacity, the Purchaser shall, on or before the Payment Due Date, pay to the
Grantor's Account (for the benefit of the Grantor and the benefit of the
Subsidiary Grantors), in immediately available Dollars, an amount equal to 100%
of the Purchase Price for such MCU (with the Initial Payment being credited to
such 100% payment). Each payment made under this Section 3(b) shall be
non-refundable (except as provided in Section 21).
Additional Service Payment. The Purchaser shall be required to make,
at the request of the Grantor, additional payments in respect of the right of
use granted under this Agreement, or the Right of Use Agreement, for access
connection rearrangement requested by the Purchaser, as set forth in Schedule II
to this Agreement and such other reasonable costs in respect of additional
services or equipment requested by the Purchaser to be provided hereunder or in
connection herewith.
Taxes. All payments made by the Purchaser under this Agreement shall
be made without any deduction or withholding for or on account of any tax, duty
or other charges of whatever nature imposed by any taxing or governmental
authority (collectively oTaxeso); provided that, the term oTaxeso shall not
include (A) any tax imposed upon, or measured by, the net income of the Grantor
and/or the Subsidiary Grantors, (B) any tax imposed on the Grantor or a
Subsidiary Grantor respectively by its country of formation and (C) any tax
imposed on any dividend or deemed dividend by any Subsidiary Grantor to Grantor.
If the Purchaser is required by law to make any deduction or withholding from
any payment due hereunder to the Grantor (for the benefit of the Grantor and the
benefit of the Subsidiary Grantors), then, notwithstanding anything to the
contrary contained in this Agreement, the gross amount payable by the Purchaser
to the Grantor (for the benefit of the Grantor and the benefit of the Subsidiary
Grantors) will be increased so that, after any such deduction or withholding for
Taxes, the net amount received by the Grantor (for the benefit of the Grantor
and the benefit of the Subsidiary Grantors) will not be less than the Grantor
(for the benefit of the Grantor and the benefit of the Subsidiary Grantors)
would have received had no such deduction or withholding been required.
4. OPERATION AND MAINTENANCE OF SYSTEM.
Maintenance Payments. The Purchaser shall pay to the Grantor (for the
benefit of the Grantor and the benefit of the Subsidiary Grantors), in
immediately available Dollars, its allocated share of the costs for operating,
maintaining and repairing the System in accordance with paragraph 8 of Annex B
(oMaintenance Costso). Maintenance Costs shall be payable quarterly in advance
on each January 1, April 1, July 1 and October 1, commencing with the first
January 1 after the applicable RFS Date, except that on the applicable RFS Date
the Purchaser shall make a proportional payment for the period from the
applicable RFS Date to the first such quarterly payment. Each payment made by
the Purchaser under this Section shall be subject to the provisions of Section
3(d) of this Agreement and shall be nonrefundable. Any payment due on a date,
which is not a business day, shall be paid on the next business day.
Maintenance. (i) The Grantor shall use commercially reasonable efforts
to cause the System to be maintained in efficient working order and in
accordance with industry standards and the standards set forth in Attachment 4
hereto. Grantor represents that the OA&M Agreement is in full force and effect
and that it requires and at all times shall require TSSL to provide routine,
preventive and corrective maintenance for the System in accordance with
performance standards that at least meet prudent industry standards. Grantor
will use reasonable commercial efforts to cause TSSL to perform its obligations
under the OA&M Agreement and the Supply Contract.
(ii) The Grantor together with the Subsidiary Grantors will
have sole responsibility for negotiating, executing and administering contracts
and all other aspects related to the construction, operation, maintenance and
repair of the System.
(iii) Should any condition exist in any Segment that may
impair the integrity of the System, the Grantor shall initiate and coordinate
planned maintenance (or shall cause such action to occur), on such relevant
Segment which may include the deactivation of such Segment. The Grantor shall,
to the extent reasonably practicable, advise the Purchaser in writing at least
(60) days (or such shorter period as may be agreed), prior to initiating a
planned maintenance operation, of the timing, scope and costs of such planned
maintenance operation.
(iv) In the event of disruption of service due to a force
majeure or other emergency, the Grantor shall cause service to be restored as
quickly as reasonably possible and the Grantor shall take such measures as are
reasonably necessary to obtain such objective.
5. INVOICES: DEFAULT INTEREST.
Invoices. The Grantor (and/or the Subsidiary Grantors) or its
authorized agent (which may include the Operator), shall render invoices under
this Agreement in Dollars, and the Purchaser shall pay such amount in Dollars.
The Purchaser shall make all payments by means of a wire transfer to Grantor's
Account (for the benefit of the Grantor and the Subsidiary Grantors).
Default Interest. Any invoice rendered under this Agreement which is
not paid when due, shall accrue interest at the annual rate of six percent (6%)
above the rate for U.S. dollar LIBOR for one month as quoted in The Wall Street
Journal on the first business day of the month in which such payment is due.
Such interest shall accrue from the day following the date payment was due until
it is paid in full. In the event that applicable law does not allow the
imposition of default interest at the rate established in accordance with this
Section 5(b), such "default interest" shall be at the highest rate permitted by
applicable law. For the purposes of this Section, "paid" shall mean that funds
are available for immediate use by the Grantor.
6. DEFAULT.
If the Purchaser fails to make any payment required by this Agreement
on the date this it is due, or if the purchaser is otherwise in breach of this
Agreement, and such payment default continues unremedied for a period of at
least [**] days or such other breach continues for a period of at least [**]
days, the Grantor, or its authorized agent, may notify the Purchaser in writing
of such payment default or other breach and if full payment is not received or
such other breach is not fully remedied within 15 (fifteen) days of such
notification, the Grantor: (i) may suspend all service provided to Purchaser
hereunder and under the Right of Use Agreement (including suspending Purchaser's
right to use the Purchased Capacity0, until such payment default or other breach
has been cured (including payment of default interest, if any), and (ii) shall
be entitled to pursue any and all rights and legal and equitable remedies
(including its rights and remedies to enforce the Purchaser's obligations under
this Agreement).
If the Grantor is in breach of this Agreement and such breach continues
for a period of at least 30 days, the Purchaser may notify the Grantor in
writing of such breach and if such breach is not fully remedied within fifteen
days of such notification, the Purchaser shall, for so long as such breach
continues, be entitles to pursue any and all rights and legal and equitable
remedies, including its rights and remedies to enforce Grantor's obligations
under this agreement.
7. USE OF CAPACITY.
The operation of the Purchased Capacity and any equipment associated
therewith shall be such as not to interrupt, interfere with, or impair service
over any of the facilities comprising the System, or impair privacy of any
communications over such facilities, cause damage to plant or create hazards to
employees, affiliates or connecting companies of the Grantor, any Subsidiary
Grantor, the Purchaser, or any other user, owner or operator of the System or
the public. The Purchaser shall bear the cost of any additional protective
apparatus reasonably required to be installed because of the use of such
facilities by the Purchaser, any lessees or permitted transferees of the
Purchaser, or any customer or customers of the Purchaser or of any such lessee
or transferee. The Grantor will use reasonable efforts to cause all other
purchasers of capacity in the System to undertake obligations comparable to
those of the Purchaser set forth in this Section, and the Purchaser shall cause
all permitted users of the IRU in the Purchased Capacity to undertake comparable
obligations.
The Purchased Capacity granted to the Purchaser shall be made available
to the Grantor (or it subsidiaries, its agents or the Operator), at such times
agreeable to the Purchaser and the Grantor, to permit the Grantor and the
Subsidiary Grantors to conduct such tests and adjustments as may be necessary
for such capacity to be maintained in efficient working order.
8. DURATION OF AGREEMENT.
This Agreement shall become effective on the day and year set forth in
the preamble hereto and shall continue in operation until the [**]anniversary of
the RFS Date for the entire System (the "Term").
The termination of this Agreement (whether under this Section or
otherwise) shall not relieve the Purchaser, the Grantor or the Subsidiary
Grantors from any liabilities arising prior to such termination.
Upon the termination of this Agreement, so long as Purchaser is not in
default hereunder, the Purchaser may elect to extend its rights in the System,
for so long as the System exists or has not been retired, by giving written
notice to Grantor any paying to Grantor one (1) dollar. Such election to extend
shall not affect or delay the termination of the Grantor's obligations under
this Agreement. Upon such election to extend and payment, the Purchaser,
together with all other purchaser of capacity on the System that also elect to
so extend, shall become the sole owner of the System. The ownership interests
of the Purchaser and such other purchasers shall be in proportion to the amount
of capacity covered by IRU's previously granted to the Purchaser and such other
purchasers. The Grantor shall execute and deliver such documentation as may be
reasonably required to effect such transfer of ownership. Without limitation to
the generality of the foregoing provisions, Grantor shall have no obligation to
operate or maintain the System during such extension.
The parties hereto shall discuss with each other and the other
purchasers of capacity on the System establishing a procedure for the early
retirement of the System if such retirement appears to be commercially
appropriate.
9. PERFORMANCE OF AGREEMENT.
The performance of this Agreement by each party hereto is contingent
upon the obtaining and continuance of such approvals, consents, governmental
authorizations, licenses and permits as may be required or deemed necessary by
the parties for performance by such party hereunder and as may be satisfactory
to them. The parties shall use (and in the case of the Grantor, shall cause the
Subsidiary Grantors to use) all reasonable efforts to obtain and continue, and
to have continued, such approvals, consents, licenses and permits. No license
under patents is granted by the Grantor or any of the Subsidiary Grantors or
shall be implied or arise by estoppel in the Purchaser's favor with respect to
any apparatus, system or method used by the Purchaser in connection with the use
of the capacity granted to it hereunder or under the Right of Use Agreement.
10. DISCLAIMER.
The Grantor and the Subsidiary Grantor have entered into the Supply
Contract to obtain plant, equipment and services necessary to allow the
Purchased Capacity to be placed into operation on the applicable schedule RFS
Date. Neither the Grantor, any Subsidiary Grantor or any of their respective
affiliates warrants or guarantees that the RFS Date for any Segment or the
System will occur and the Grantor, the Subsidiary Grantors and their respective
affiliates will otherwise have no obligation under this Agreement or the Right
of Use Agreement or otherwise unless and until the applicable RFS Date occurs,
except as set forth in Section 21 hereof. THE PURCHASER ACKNOWLEDGES AND AGREES
THAT THE GRANTOR AND THE SUBSIDIARY GRANTORS ARE NOT LIABLE FOR THE SUPPLIER'S
FAILURE TO PERFORM. UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT, ANY OTHER
WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE ARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE SPECIFICALLY
DISCLAIMED.
In order to make it more convenient for the Purchaser to connect the
Purchased Capacity to inland networks, the Grantor and the Subsidiary Grantors
may permit certain Inland Carriers to collocate at the cable stations located at
each T-Segment. Neither the Grantor, any Subsidiary Grantor or any of their
respective affiliates warrants or guarantees any agreement between the Purchaser
and any Inland Carrier and neither the Grantor, any Subsidiary Grantor or any of
their respective affiliates shall have any liability to the Purchaser for any
failure of any Inland Carrier to perform the terms and conditions of any such
agreement. The foregoing is not intended to limit the definition of "RFS Date."
11. LIMITATIONS OF LIABILITY.
In no event shall Purchaser, the Grantor or any Subsidiary Grantor be
liable to the other for consequential, incidental, indirect or special damages,
including, but not limited to, loss of revenue, loss of business opportunity or
the costs associated with the use of external (outside the System) restoration
facilities, including, without limitation, for any loss or damage sustained by
reason of any failure in or breakdown of the System or the facilities associated
with the System, the failure of any Inland Carrier to perform the terms and
conditions of any agreement to which it and the purchaser are parties or for any
interruption of service, whatever the cause and however long it shall last.
Neither the Grantor nor any Subsidiary Grantor shall be liable to the
Purchaser for any loss or damage which may be suffered by the Purchaser by
reason of any circumstances beyond the control of the Grantor and the Subsidiary
Grantors and having an adverse effect on the provision of any part of the System
in which the Purchaser is entitled to capacity or has any other right or
interest under this Agreement or under the Right of Use Agreement.
(i) Neither the Grantor nor any Subsidiary Grantor shall be liable to
the Purchaser for any loss or damage which may be suffered by the Purchaser as a
result of, related to, or in connection with, the Purchasers compliance or
non-compliance with any applicable state, federal, foreign governmental,
international (foreign or domestic) or other law related to the transfer of the
IRU in, or the use of, the Purchased Capacity.
(ii) The Purchaser shall not be liable to the Grantor or any
Subsidiary Grantor for any loss or damage which may be suffered by the Grantor
or any Subsidiary Grantor as a result of, related to, or in connection with, the
Grantor's or any Subsidiary Grantor's non-compliance with any applicable state,
federal, foreign governmental, international (foreign or domestic) or other law
related to the transfer by the Grantor of the IRU to the Purchaser in, or the
Grantor's operation, ownership or use of, the System.
(iii) The Purchaser shall not be liable to the Grantor or to
any Subsidiary Grantor for any loss or damage, which may be suffered by the
Grantor or any Subsidiary Grantor by reason of any circumstances beyond the
control of the Purchaser.
12. SETTLEMENT OF DISPUTES.
The parties hereto shall endeavor to settle amicably by mutual
discussions any disputes, differences, or claims whatsoever related to this
Agreement.
Failing such amicable settlement within a period of 30 days from the
commencement of mutual discussions, any controversy, claim or dispute arising
under or relating to this Agreement, including the existence, validity,
interpretation, performance, termination or breach thereof, shall finally be
settled by arbitration in accordance with the International Arbitration Rules of
the American Arbitration Associate ("AAA"). There shall be three (3)
arbitrators, the first of which shall be appointed by the claimant in its notice
of arbitration, the second of which shall be appointed by the respondent within
(30) days of the appointment of the first arbitrator and the third of which
shall be jointly appointed by the party-appointed arbitrators within thirty (30)
days thereafter. The language of the Arbitration shall be English. The
Arbitrator will not have authority to award punitive damages to either party.
Each party shall bear its own expenses, but the parties shall share equally the
<PAGE>
expenses of the Arbitration Tribunal and the AAA. This Agreement shall be
enforceable, and any arbitration award shall be final, and judgement thereon may
be entered in any court of competent jurisdiction. The arbitration shall be
held in New York, New York, USA.
13. INCREASE OF INITIAL DESIGN CAPACITY.
The Grantor and the Subsidiary Grantors shall have authority to
increase, at their own cost and expense (except as may be otherwise agreed
pursuant to Section 2(c) hereof), the Initial Design Capacity (as defined in
Annex B) of the System. Such increase shall be implemented so as not to cause
any undue interruption of normal service and its associated self healing ring
protection in respect of existing IRU capacity.
GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
WAIVER OF IMMUNITY.
The parties hereto acknowledge that this Agreement is commercial in
nature, and each party hereof expressly and irrevocably waives any claim or
right which it may have to immunity (whether sovereign immunity, act of state or
otherwise) for itself or with respect to any of its assets in connection with an
arbitration, arbitral award or other proceeding to enforce this Agreement,
including, without limitation, immunity from service of process, immunity of any
of its assets form pre- or post- judgement attachment or execution and immunity
from the jurisdiction of any court or arbitral tribunal.
EXPORT CONTROL.
The parties hereto acknowledge that to the extent any products,
software or technical information provided under this Agreement or the Right of
Use Agreement are or may be subject to any applicable export laws and
regulations, the parties hereto agree that they will not use, distribute,
transfer or transmit the products, software or technical information (even if
incorporated into other product) except in compliance with such export laws and
regulation (or licenses or orders issued pursuant thereto). If requested by
either party hereto the other party agrees to sign all necessary export-related
documents as may be required to comply therewith.
17. REPRESENTATION: INDEMNITY.
Grantor hereby represents and warrants to Purchaser that (i) Grantor is
a corporation duly organized and validly existing under the laws of Bermuda;
(ii) the execution, delivery and performance of this Agreement by Grantor has be
duly authorized by all necessary corporate action on the part of Grantor and
this Agreement is a valid, binding and enforceable obligation of Grantor
enforceable in accordance with its terms and (iii) the execution, delivery and
performance of this Agreement by Grantor does not violate, conflict with or
constitute a breach of, the organizational documents or any order, decree or
judgement of any court, tribunal or governmental authority binding on Grantor.
Purchaser hereby represents and warrants to Grantor that (i) Purchaser
is a corporation duly organized, validly existing an din good standing under the
laws of its jurisdiction of organization; (ii) the execution, delivery and
performance of this Agreement by Purchaser has been duly authorized by all
necessary corporate action on the part of the Purchaser and this Agreement is a
valid, binding and enforceable obligation of Purchaser enforceable in accordance
with its terms; and (iii) the execution, delivery and performance of this
Agreement by Purchaser does not violate, conflict with or constitute a breach
of, the organizational documents or any order, decree or judgement of any court,
tribunal or governmental authority binding on Purchaser.
Except for any governmental approvals set forth on any Purchaser's
Schedule I, each party hereby represents and warrants to the other party that is
has obtained all approvals, consents, governmental authorizations, licenses and
permits as may be required to enter into this Agreement, and grant or acquire,
as the case may be, the IRU in the Purchased Capacity.
The Foregoing representations and warranties shall survive the
execution and delivery of this Agreement.
Subject to Section 11, the Purchaser agrees to indemnify and hold
harmless the Grantor and the Subsidiary Grantors and their respective officers,
directors, employees, agents and representatives from and against any loss,
damage, expense or cost arising out of or in connection with: (i) any breach or
violation by the Purchaser of applicable law or governmental regulation, and
(ii) any claims of whatever nature by third parties with respect to the services
provided by the Purchaser.
Subject to Section 11, the Grantor agrees to indemnify and hold
harmless the Purchaser and its officers, directors, employees, agents and
representatives from and against any loss, damage, expense or cost arising out
of or in connection with: (i) any breach or violation by the Grantor or any
Subsidiary Grantor of applicable law or governmental regulation, and (ii) any
claims of whatever nature by third parties with respect to the services provided
by the Grantor or any Subsidiary Grantor.
In the event an indemnified party under paragraph (e) or (f) above is
notified of any action as to which it may seek to be indemnified under such
paragraph, it will promptly notify the party from which indemnification will be
sought and seek to consult with such party prior to taking any material action
with respect thereto.
RELATIONSHIP OF THE PARTIES.
This Agreement shall not form a joint venture or partnership or similar
business arrangement among Grantor, the Purchaser and/or the Subsidiary
Grantors, and nothing contained herein or in the Right of Use Agreement shall be
deemed to constitute a partnership or joint venture or similar business
arrangement nor shall any party be deemed to be the agent or partner of any
other party. No party shall have the right to bind any other party.
NO THIRD PARTY BENEFICIARIES.
This Agreement does not provide and is not intended to provide third
parties (including, but not limited to, customers of the Purchaser, any
permitted transferee of the Purchased Capacity (other than a permitted
transferee of all the Purchaser's rights and obligations under this Agreement)
or any other permitted user of the Purchased Capacity) with any remedy, claim,
liability, reimbursement, cause of action, or any other right, except for the
Subsidiary Grantors. Furthermore, the Purchaser acknowledges that, except as
set forth in the Right of Use Agreement, it is not a third party beneficiary of
any agreement entered into by the Grantor or the Subsidiary Grantors including,
but not limited to, the Supply Contract and the OA&M Agreement.
20. ASSIGNMENT.
This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto, the Subsidiary Grantors and
their respective successors and permitted assigns; provided that, except for the
assignment of the Purchaser's or the Grantor's and/or any Subsidiary Grantor's
rights under this Agreement to one or more of the Purchaser's or the Grantor's
lenders as security and except as proved in one of paragraphs (b), (c), (d) or
(e) of this Section, neither this Agreement nor any of the rights or interests
hereunder shall be assigned, transferred or otherwise disposed of or the
obligations hereunder delegated by either party hereto without the prior written
consent of the other party.
Each party hereto shall be permitted to assign, transfer or otherwise
dispose of any or all of their rights hereunder and under the Right of Use
Agreement and delegate any or all of their obligations hereunder and under the
Right of Use Agreement to any present or future affiliated company of such party
or to an entity controlled by, under the same control as, or controlling, such
party; provided that any such assignment, transfer or other disposition shall
not release such party from its obligations hereunder, unless the other party
consents otherwise in writing, which consent shall not be unreasonably withheld
(it being understood that it is not unreasonable to withhold consent if the
assignee or transferee is not as creditworthy as the assignor). Each party
shall give the others notice of any such assignment, transfer or other
disposition or any such delegation.
Except as specifically under paragraph (a), (b), (c), (d) or (e) of
this Section, the Purchaser shall not be permitted to:
(1) Assign, transfer or otherwise dispose of any or all
of its rights hereunder or under the Right of Use Agreement; provided that the
Purchaser shall be permitted to (A) enter into one or more lease or license
agreements to lease or license Purchased Capacity to a lessee so long as each
such lease or license involves less than one MCU of Purchased Capacity and does
not affect the Purchaser's obligations hereunder or (B) transfer its rights (but
not its obligations) to use any Purchased Capacity to a Carrier Party in
accordance with paragraph 6 of Annex B to this Agreement, provided that the
aggregate maximum amount of capacity that may be transferred to all Carrier
Parties shall not exceed one MCU and provided further that simultaneously with
transferring such rights to such Carrier Party, such Carrier Party executes a
document acknowledging:
(i) that is has acquired from the
Purchaser rights to use Purchased Capacity which were conveyed to the Purchaser
under or in connection with a capacity purchase agreement with the Grantor (the
"CPA");
that the Purchaser has an ongoing obligation under the CPA to make
certain payments to the Grantor (including, without limitation, in respect of
operation, administration and maintenance expenses and in respect of remaining
payments for the Purchase price of such Purchased Capacity) and otherwise comply
with the terms thereof, and that the failure of the Purchaser to make any such
payments when due or the occurrence of any other breach by the Purchaser of the
terms of the CPA could result in the suspension of Purchaser's right to the
Purchased Capacity or reclamation by the Grantor of the Purchased Capacity in
accordance with the terms of the CPA; and
that such Carrier Party is not a third party beneficiary of the CPA or
the right of use Agreement; or
delegate any or all of its obligations hereunder or under the
Right of Use Agreement to any person or entity.
In addition to any rights of assignment under Section 20(b), upon
payment in full of the purchase price pursuant hereto of all capacity to be
purchased hereunder, or, prior to such payment, upon execution and delivery by
the Purchaser of a Parent Guaranty (or if a Parent Guaranty is already in
effect, the execution and delivery by the Purchaser's parent of a new Parent
Guaranty or a written consent), the Purchaser shall be permitted to assign,
transfer or otherwise dispose of any or all of its rights hereunder and under
the Right of Use Agreement and delegate any or all of its obligations hereunder
and under the Right of Use Agreement to any present or future affiliated company
of the Purchaser or to an entity controlled by, under the same control as, or
controlling, the Purchaser. The Purchaser shall give the Grantor notice of any
such assignment, transfer or other disposition or any such delegation.
In addition to any rights the Purchaser may have under any other
paragraph of this Section, (i) after the date on which all capacity (including
additional capacity created when the System is upgraded) on the System has been
sold by the Grantor or (ii) prior to such date, so long as a Purchaser has not
acquired more than one MCU of Purchased Capacity on a Transatlantic Segment
hereunder, and provided that it waives all rights to acquire additional MCUs of
Purchased Capacity under the terms of Sections 2(f) and 2(g) hereof, such
Purchaser shall be permitted to assign, transfer or otherwise dispose of all if
its rights hereunder and under the Right of Use Agreement and delegate all of
its obligations hereunder and under the Right of Use Agreement or any other
Person; provided that any such assignment, transfer, other disposition or
delegation shall not release such Purchaser from its obligations hereunder,
unless the Grantor consents otherwise in writing, which consent shall not be
unreasonably withheld (it being understood that it is not unreasonable to
withhold consent if the assignee or transferee is not as creditworthy as the
assignor). Each party shall give the others notice of any such assignment,
transfer or other disposition or any such delegation. Any transfer by the
Purchaser of its obligations or its rights to use any Purchased Capacity which
is in violation of this Section shall be void and of no force and effect.
21. CONDITION TO PURCHASER'S OBLIGATIONS.
The Purchaser's obligation to pay for an IRU with respect to any
Purchased Capacity shall terminate if the RFS Date for the Purchased Capacity on
Segment S-1 has not occurred by October 15, 1998, or in the case of any other
Purchased Capacity the RFS Date had not occurred by June 30, 1999. In such
event, the Grantor shall refund all amounts of Purchased Price paid by the
Purchaser with respect to such Purchased Capacity within thirty (30) days after
the applicable date and this Agreement shall terminate.
The Purchaser's obligation to pay for an IRU on the Payment Due Date
with respect to (i) any Purchased Capacity on Segment S-1 (or any matching
European Segment) shall terminate if, prior to the RFS Date for Segment S-1, the
Purchaser has not obtained all department of Trade and industry and Federal
Communications Commission licenses necessary to carry traffic on such Segment
and (ii) any Purchased Capacity on any European Segment shall terminate if,
prior to the RFS Date for such European Segment, the Purchaser has not obtained
(A) all necessary governmental approvals in the Netherlands or Germany, as the
case may be, necessary to carry traffic on such Segment, and (B) an appropriate
inland capacity agreement with an Inland Carrier and/or a correspondent
agreement to enable the Purchaser to terminate its traffic. The Purchaser shall
use good faith efforts to obtain the necessary licenses and governmental
approvals and to enter into the inland capacity agreements and/or correspondent
agreements prior to the RFS Date for a particular Segment. In the event of any
such termination, (i) this Agreement shall remain in full force and effect for
any Segment not so affected and (ii) the Purchaser shall be entitled to the
return (within fourteen (1) days) of its initial Payment for any affected
Segments.
NOTICES.
Each notice, demand, certification or other communication given or made
under this Agreement shall be in writing and shall be delivered by hand or by
recognized overnight delivery service or sent by registered mail or by facsimile
transmission to the address of the respective party as shown below (or such
other address as may be designated in writing to the other party hereto in
accordance with the terms of this Section):
If to the Purchaser: to the address or facsimile
number set forth on the
signature pages
If to the Grantor: Global Telesystems Ltd.
Wessex House
45 Reid Street
Hamilton HM12, Bermuda
Attn: Executive Director
Fax No.: 441-296-8606
Any changes to the name, address and facsimile numbers may be made at
any time by giving fifteen (15) days prior written notice in accordance with
this Section. Any such notice, demand or other communication shall be deemed to
have been received, if delivered by hand, at the time of delivery or, if sent by
overnight deliver service the date when delivered or, if posted, at the
expiration of seven (7) days after the envelope containing the same shall have
been deposited in the post maintained for such purpose, postage prepaid, or, if
sent by facsimile, at the date of transmission if confirmed receipt is followed
by postal notice.
SEVERABILITY.
If any provision of this Agreement is found by an arbitral, judicial or
regulatory authority having jurisdiction to be void or unenforceable, such
provision shall be deemed to be deleted from this Agreement and the remaining
provisions shall continue in full force and effect.
HEADINGS.
The Section headings of this Agreement are for convenience of reference
only and are not intended to restrict, affect or influence the interpretation or
construction of provisions of such Section.
COUNTERPARTS: FACSIMILE SIGNATURES.
This Agreement may be executed in counterparts, each of which when
executed and delivered shall be deemed an original. Such counterparts shall
together (as well as separately) constitute one and the same instrument.
Delivery of an executed counterpart by facsimile transmission shall be as
effective as delivery of a manually executed counterpart hereof.
ENTIRE AGREEMENT.
This Agreement together with the Schedules, Annexes and Attachments
hereto supersedes all prior or written understanding between the parties hereto
and constitutes the entire agreement with respect to the subject matter herein.
This Agreement shall not be modified or amended except by a writing signed by
authorized representative of the parties hereto.
PUBLICITY AND CONFIDENTIALITY.
The provisions of this Agreement and any non-public information,
written or oral, with respect to this Agreement (oConfidential Informationo)
will be kept confidential and shall bot be disclosed, in whole or in part, to
any person other than affiliates, officers, directors, employees, agents or
representatives of a party (collectively, oRepresentativeo) who need to know
such Confidential Information for the purpose of negotiating, executing and
implementing this Agreement. Each party agrees to inform each of its
Representatives of the non-public nature of the Confidential Information and to
direct such persons to treat such Confidential Information in accordance with
the terms of this Section 27. Nothing herein shall prevent a party from
disclosing Confidential Information (i) upon the order of any court or
administrative agency, (ii) upon the request or demand of, or pursuant to any
regulation of, any regulatory agency or authority, (iii) to the extent
reasonably required in connection with the exercise of any remedy hereunder,
(iv) to a party's legal counsel or independent auditors, (v) to prospective
lenders to the Grantor, and (vi) to any actual or proposed assignee, transferee
or lessee of all or part of its rights hereunder provided that such actual or
proposed assignee agrees in writing to be bound by the provisions of this
Section 27.
MISSING PAGE 21
IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date first written above.
GLOBAL TELESYSTEMS LTD.
By: _______________________
Name: K. Eugene Shutler
Title: President
WORLDPORT COMMUNICATIONS, INC.
By: ________________________
Name:
Title: Vice-President Global
Sales & Marketing
Address: 3610 Kennesaw
North Industrial Parkway
Suite 200
Kennesaw, Georgia 30144
Attention:
Facsimile:
Schedule I
PURCHASER: Worldport Communications, Inc.
Description of Purchased Capacity
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Date of Transaction Appropriate S-Segment Number of Whole MCUs Price Per Whole MCU Purchase Price
and Related T-Segments (c)*(d)
Note (1)
<S> <C> <C> <C> <C>
4/7/98 Segments S-1, T-1 and T-2 1 [*] [*]
4/7/98 Segments S-1, T-1 and T-2 4 [*] [*]
Total Purchase Price [*]
Less Initial Payment [*]
Purchase Price Due on RFS of Segment S-1 [*]
Note:
The S-Segment and related T-Segments are set forth for purposes of
showing the point of entry and exit with respect to Purchased Capacity.
Purchased Capacity is not dependent on any specific Routing.
Permits not yet acquired
(None)
</TABLE>
Schedule II
AC-1 Additional Charges
Function Fees
Access Connection Initial Service None
Access Connection Rearrangement per STM-1 [*]
Schedule III
Chief Executive Offices
Worldport Communications, Inc.
3610 Kennasaw North Industrial parkway
Suite 200
Kennasaw, Georgia 30144
ANNEX A
INDEFEASIBLE RIGHT OF USE AGREEMENT
THIS AGREEMENT (as amended, supplemented or otherwise modified from
time to time, this "Agreement") is made and entered into as of this 7th day of
April, 1998, between and among GT Landing Corp., GT U.K. Ltd., Global
Telesystems GmbH and GT Netherlands B.V. (collectively, the "Subsidiary
Grantors") and the Purchaser signatory hereto.
WITNESSETH:
WHEREAS, each Subsidiary Grantor is a wholly-owned subsidiary of Global
Telesystems Ltd. (the "Parent") who is the grantor under the Capacity Purchase
Agreement (as amended, supplemented or otherwise modified form time to time, the
"Capacity Purchase Agreement") to which a copy of this Agreement is attached;
WHEREAS, capitalized terms used in this Agreement and not otherwise
defined in this Agreement shall have the meanings assigned to them in the
Capacity Purchase Agreement;
WHEREAS, upon completion of the construction and installation of the
System, GT Landing Corp. will have an IRU in the whole of Segment T-1, GT U.K.
Ltd. will own Segment T-2, Global Telesytems GmbH will own Segment T-3 (except
with respect to that portion of Segment T-3 which comprises Subsegment T-3A in
which Global Telesystems GmbH has rights to) and GT Netherlands B.V. will own
Segment T-4 (except with respect to that portion of Segment T-4 which comprises
Subsegment T-4A in which GT Netherlands B.V. shall have rights to);
WHEREAS, subject to and in accordance with the terms of the Capacity
Purchase Agreement, the Parent is conveying certain S Capacity to the Purchaser
on an indefeasible right of use basis;
WHEREAS, each Subsidiary Granter desires to grant to the Purchaser, at
no additional charge and for so long as the Purchaser maintains an IRU in any S
Capacity, an indefeasible right of use with respect to its respective T Segment
to the extent required by the Purchaser to use its IRU in such S Capacity; and
WHEREAS, the Subsidiary Grantors acknowledge and agree that the
Purchaser has relied upon this Agreement in entering into the Capacity Purchase
Agreement;
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which and hereby acknowledged, the Subsidiary Grantors covenant
and agree as follows:
1. Upon the effectiveness of the grant to the Purchaser of an indefeasible
right of use with respect to any S Capacity (including in any Residual
Capacity) in accordance with the Capacity Purchase Agreement, each
Subsidiary Grantor grants to the Purchaser, at no additional charge and for
the Term of the Capacity Purchase Agreement so long as the Purchaser
maintains an IRU is such S Capacity, an indefeasible right of use with
respect to its respective T Segment to the extent required by the Purchaser
to use its IRU in the S Capacity.
2. Subject to Sections 10 and 11 of the Capacity Purchase Agreement, each
Subsidiary Grantor shall maintain, or cause the Operator to maintain, its
respective T Segment in accordance with the provisions set forth in the
Capacity Purchase Agreement and the OA&M Agreement.
3. The grant under this Agreement by the Subsidiary Grantors is contingent
upon the continued operation of the System, the continuance of the Capacity
Purchase Agreement and upon the obtaining and continuance of such
approvals, consents, governmental authorizations, licenses and permits as
may be required or deemed necessary by the parties and as may be
satisfactory to them. No license under patents is granted by the
Subsidiary Grantor or shall be implied or arise by estoppel in the
Purchaser's favor with respect to any apparatus, system or method used by
the Purchaser in connection with the use of the T Segment(s) granted
hereunder.
4. The Subsidiary Grantors and the Parent have entered in the Supply Contract
to obtain plant, equipment and services necessary to allow the T Segments
to be placed into operation on the applicable scheduled RFS Date. The
Subsidiary Grantors do not warrant or guarantee that the RFS Date will
occur for any T Segment and the Subsidiary Grantors will otherwise have no
obligation under this Agreement or otherwise unless and until the
applicable RFS Date occurs. UNLESS SPECIFICALLY SET FORTH IN THIS
AGREEMENT, ANY OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING BUT NOT
LIMITEDTO, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE ARE SPECIFICALLY DISCLAIMED.
5. In no event shall any Subsidiary Grantor be liable to the Purchaser for
consequential, incidental, indirect or special damages, including but not
limited to, loss of revenue or loss of business opportunity, or the cost
associated with the use of external (outside the System) restoration
facilities.
6. This Agreement shall not form a joint venture or partnership or similar
business arrangement between the parties hereto or between the parties
hereto, the Parent and the Purchaser, and nothing contained herein shall be
deemed to constitute a partnership or joint venture or similar business
arrangement nor shall any party be deemed to be the agent or partner of any
Purchaser. No party hereto shall have the right to bind any Purchaser.
7. Except with respect to the Purchaser as provided I Section 12, this
Agreement does not provide and is not intended to provide third parties
(including, but not limited to, customers of the Purchaser, any permitted
transferee (other than a permitted transferee of all of the Purchaser's
rights and obligations under the Capacity Purchase Agreement) of the
Purchased Capacity or any other permitted user of Purchased Capacity) with
any remedy, claim, liability, reimbursement, cause of action, or any other
right.
8. This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the Purchaser and the Subsidiary Grantors and their
respective successors and permitted assigns under the Capacity Purchase
Agreement.
9. This Agreement shall not be modified or amended except by a writing signed
by authorized representatives of the parties hereto, provided that in no
event shall any such amendment that is adverse to the interests of the
Purchaser be effective as against the Purchaser unless and until the
Purchaser shall have consented in writing to such amendment.
10. This Agreement shall become effective on the date set forth above and shall
continue in effect for the Term of the Capacity Purchase Agreement, and
shall immediately terminate without any further action upon the termination
of the Capacity Purchase Agreement.
11. The provisions of Section 11, 12, 14, 20, 23 and 25 of the Capacity
Purchase Agreement are hereby incorporated herein by reference, Mutatis
Mutandis, and shall be deemed a part of this Agreement as if fully act
forth herein.
12. This Agreement is intended to be for the express benefit of each of the
Purchaser signatories to this Agreement and, upon execution by each
Subsidiary Grantor and each such Purchaser, shall be deemed to be a
contract between each such Subsidiary Grantor and each such Purchaser under
the laws of the State of New York, enforceable directly by such party in
its own name.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date first written above.
GT LANDING CORP.
By: _________________________
Name:
Title:
GT U.K. LTD.
By: ___________________________
Name:
Title:
GLOBAL TELESYSTEMS GmbH
By: ___________________________
Name:
Title:
GT NETHERLANDS B.V.
By: ____________________________
Name:
Title:
WORLDPORT COMMUNICATIONS, INC.
By: ___________________________
Name:
Title:
ATLANTIC CROSSING
SUBMARINE CABLE SYSTEM
ANNEX B
ATLANTIC CROSSING
SUBMARINE CABLE SYSTEM
ANNEX B
TABLE OF CONTENTS
PARAGRAPH
PAGE
Definitions
2
Cable System Configuration and Segments
2
Ownership and Provision of Segments and Additional Property
2
Interconnection Services
2
The System Advisory Committee
2
Increase of System Capacity
2
Operations, Administration and Maintenance of Segments and Access Connections
2
Keeping and Inspection of Books
2
Termination: Realization of Assets
2
ATTACHMETNS
Attachment 1 - Configuration of the Atlantic Crossing Submarine Cable System
Attachment 2 - Terms of Reference for Assignments, Routing and Restoration
Attachment 3 - Terms of Reference for Operation and maintenance
ATLANTIC CROSSING SUBMARINE CABLE SYSTEM
ANNEX B
Definitions
Definitions are as described in the specific Paragraphs or in the
Capacity Purchase Agreement to which this Annex B is attached. Except as
otherwise provided, the following definitions shall apply throughout this Annex
B:
Adjusted Pro Rate Share (for apportionment of Residual Capacity): with
respect to each of the Segment S-1 Residual Capacity, the Segment S-2 Residual
Capacity, the Segment S-3a Residual Capacity, the Segment S-3b Residual
Capacity, the Segment S-3c Residual Capacity and the Segment S-4 Residual
Capacity, a fraction:
(i) the numerator of which equals the sum of, (A) the number
of STM-1s on the applicable S Segment in which the Purchaser acquired an IRU
from the Grantor pursuant to this Agreement and which were deemed contracted for
effective on or prior to [*], multiplied by [*], (B) the number of STM-1s on the
applicable S Segment in which the Purchaser acquired and IRU from the Grantor
pursuant to this Agreement and which were deemed contracted for effective after
[*] but prior to [*], multiplied by [*] and (C) the number of STM-1s on the
applicable S Segment in which the Purchaser acquired an IRU from the Grantor
pursuant to this Agreement and which were deemed contracted for effective on and
after [*] but prior to the earlier of (x) the RFS Date for the entire System and
(y) [*] ; and
(ii) the denominator of which equals the sum of, (A) the
number of STM-1s on the applicable S Segment that all purchasers acquired an IRU
from the Grantor and which were deemed contracted for effective on or prior to
[*], multiplied by [*], (B) the number of STM-1s on the applicable S Segment
that all purchasers acquired an IRU from the Grantor and which were deemed
contracted for effective after [*] but prior to [*] multiplied by [*] and (C)
the number of STM-1s on the applicable S Segment that all purchasers acquired
and IRU from the Granter and which were deemed contracted for effective on and
after [*] but prior to the earlier of (x) the RFS Date for the entire System and
(y) [*].
The Adjusted Pro Rate Share shall be calculated by the Grantor and
shall be conclusive absent manifest error.
Basic System Module: A Basic System Module of the System shall consist
of a digital line section in each direction with interface in accordance with
ITU Recommendations G.703 and G.707 to G.708 and containing sixteen (16) STM-1s.
Cable Landing Point: Cable Landing Point shall be the beach joint at
each cable landing location or the mean high water mark of ordinary spring tides
if there is no beach joint.
Carrier Party: Any entity authorized or permitted under the laws of
its respective country, to acquire and, if applicable, use facilities for the
provision of international telecommunication services.
Initial Design Capacity: The Initial Design Capacity of each Segment
of the System shall consist of four (4) fiber pairs providing a minimum of
sixteen (16) Basic System Modules (eight will be used for service and the
remaining eight will be used for restoration) initially supplying STM-1's or any
increase as determined form time to time by the Grantor in its sole discretion.
Inland Carriers: An entity authorized or permitted under the laws of
its respective country to provide for inland communications services.
Maintenance Authority: An entity designated by Granter which shall be
primarily responsible for the operations and maintenance of the wet plant as set
forth in Paragraph 8(b).
Segment S-1 Residual Capacity, Segment S-2 Residual Capacity, Segment
S-3a Residual Capacity, Segment S-3b Residual Capacity, Segment S-3c Residual
Capacity and Segment S-4 Residual Capacity: With regard to each of the S
Segments, as of the date which is [*] years after the RFS Date for the entire
System [*]% of that portion of the service capacity on the applicable S Segment
which is available as of such date to be sold by the Grantor to prospective
purchaser, together with, to the extent necessary to use such S Capacity, the
applicable T Capacity. The amount of Residual Capacity for each such S Segment
shall be determined solely by the Grantor and shall not, in any event, include
any capacity on the applicable S Segment which the Grantor has determined should
be reserved for restoration purposes.
System Interface: The nominal 155 Mb/s (STM-1) digital/optical
input/output ports on the digital/optical distribution frame (including the
digital/optical distribution frame itself) where the Basic System Module
connects with other transmission facilities or equipment.
Terminal Parties: The Terminal Parties are GT U.K. Ltd., Global
Telesystems GmbH, GT Landing Corp. and GT Netherlands B.V. each of which are, or
in the case of the Netherlands Subsidiary will be, wholly-owned subsidiaries of
the Grantor.
Cable System Configuration and Segments
The configuration of the System shall be as shown in Attachment 1.
In accordance with the arrangement contained in this Annex B, the
System shall be regarded as consisting of the following Segments:
Segment S-1: A submarine cable linking Segments T-2 and T-1.
Segment S-2: A submarine cable linking Segments T-1 and T-3.
Segment S-3a: A submarine cable linking Segments T-4 and T-2.
Segment S-3b: A submarine cable linking Segments T-3 and T-4.
Segment S-3c: A submarine cable linking Segments T-2 and T-3. (which
goes through Segment T-4)
Segment S-4: The portion of the System linking Segments T-1 and T-4.
Segment T-1: A cable station in Brookhaven, New York, United States,
together with that portion of the System which is
located between such cable station and the point which
is one-half mile beyond the United States territorial
limit.
Segment T-2: A cable station in Whitesands, United Kingdom, together
with that portion of the System which is located
between such cable station and the point which is
one-half mile beyond the United Kingdom territorial
limit.
Segment T-3: A cable station in Sylt, Germany, together with that
portion of the System which is located between such
cable station and the point which is one-half mile
beyond the Germany territorial limit.
Segment T-4: A cable station in Bever Dijk, Netherlands, together
with that portion of the System which is located
between such cable station and the point which is
one-half mile beyond the Netherlands territorial limit.
It is assumed that under the current law of the United Kingdom, the United
State, the Netherlands and Germany, the territorial waters of such country
extend twelve nautical miles seaward from the coast of such country. If
such assumption shall prove to be incorrect, or if a law shall change such
assumption and in fact the territorial waters of any such county extend
beyond twelve nautical miles, the parties hereto shall adjust the T Segment
of the applicable Terminal Party.
Except as provided herein, Segments T-1 and T-2 shall include, as
appropriate:
(i) the transmission cable and equipment associated with the
submersible plant between the point which is one-half mile beyond the
territorial waters of the United Kingdom or the United States, as
appropriate, up to the nominal 155.52 Mb/s (STM-1) digital/optical or
input/output ports on the digital/optical distribution frame
(including the digital/optical distribution frame itself) where the
Basic System Module connects with other transmission facilities or
equipment;
(ii) the land, civil works and buildings at the specified locations
for the cable landing and for the cable route including cable
rights-of-way and ducts between the applicable cable station and it
respective Cable Landing Point, and common services and equipment at
each of the locations, together with equipment in each of those cable
stations which is solely associated with the System; and
(iii) the sea earth cable and electrode system and/or the land earth
system, or an appropriate share thereof, associated with the terminal
power feeding equipment.
Except as provided herein, Segment T-3 consists of Subsegment T-3A and
Subsegment T-3b.
Subsegment T-3A shall consist of:
(i) the transmission cable and equipment associated with the
submersible plant between the point which is one-half mile beyond the
territorial waters of Germany up to the nominal 155 Mb/s (STM-1)
digital/optical or input/output ports on the digital/optical
distribution frame (including the digital/optical distribution frame
itself) where the Basic System Module connects with other transmission
facilities or equipment, together with equipment in the cable station
which is solely associated with the System;
(ii) the sea earth cable and electrode system and/or the land earth
system associated with the terminal power feeding equipment; and
(iii) all of Global Telesytems GmbH's leasehold interest or other
rights in Subsegment T-3B.
Subsegment T-3B shall consist of al the land, civil works and building in
Sylt, Germany for the cable landing and the cable right of way and ducts
between the cable station and the Cable Landing Point.
Except as provided herein, Segment T-4 consists of Subsegment T-4A and
Subsegment T-4B.
Subsegment T-4A shall consist of:
(i) the transmission cable and equipment associated
with the submersible plant between the point which is one-half mile beyond the
territorial waters of Netherlands up to the nominal 155 Mb/s (STM-1)
digital/optical or input/output ports on the digital/optical distribution frame
(including the digital/optical distribution frame itself) where the Basic System
Module connects with other transmission facilities or equipment, together with
equipment in the cable station which is solely associated with the System;
(ii) the sea earth cable and electrode system and/or the land
earth system associated with the terminal power feeding equipment; and
(iii) all of GT Netherlands B.V.'s leasehold interest or other
rights in Subsegment T-4B.
Subsegment T-3B shall consist of al the land, civil works and building
in Bever Dijk, Netherlands for the cable landing and the cable right of way and
ducts between the cable station and the Cable Landing Point.
Segments S-1 shall consist of the whole of the Submarine Cable provided
between Segments T-1 and T-2. Segment S-2 shall consist of the whole of the
Submarine Cable provided between Segments T-2 and T-3. Segment S-3a shall
consist of the whole of the Submarine Cable provided between Segments T-4 and
T-1. Segment S-3b shall consist of the whole of the Submarine Cable provided
between Segments T-3 and T-4. Segment S-3c shall consist of the whole of the
Submarine Cable provided between Segments T-1 and T-3. Segment S-4 shall
consist of the whole of the Submarine Cable provided between Segments T-2 and
T-4. Each S Segment shall also include the transmission cable equipped with
appropriate repeaters and joint housing between the respective T Segments.
Ownership And Provision Of Segments and Additional Property
Segments S-1, S-2, S-3a, S-3b, S-3c and S-4shall be owned and provided
by the Grantor.
GT Landing Corp., a wholly owned United States subsidiary of the
Grantor, shall own (or shall have a right of use for) and provide Segment T-1.
Segment T-2 shall be owned and provided by GT UK Ltd., a wholly owned United
Kingdom subsidiary of the Grantor. Subsegment T-3A shall be owned and provided
by Global Telesystems GmbH, a wholly owned German subsidiary of the Grantor.
Subsegment T-4A shall be owned and provided by the Netherlands Subsidiary, which
shall be a wholly owned Netherlands subsidiary of the Granter.
Global Telesystems GmbH shall procure rights in Subsegment T-3B of the
System from Deutache Telekom and or its subsidiary Deutsche Telekom Immobilen
and Service GmbH.
GT Netherlands B.V. shall procure rights in Subsegment T-4B of the
System from PTT Telecom.
Access /Inland Connection Services/Customer Care
Access connection services refers to the transmission facilities and
the equipment required for interconnection between the demarcation equipment
point associated with the System and the demarcation point associated with
inland communications services ("Access Connections"). Within the Cable
Stations, the operator of the System shall provide STM-1 Access Connections.
Each Access Connection provides full-time digital private line transmission on a
two-point basis. Access Connections may be changed or modified upon written
request of the Purchaser and shall be provided subject to the availability of
equipment, facilities and personnel necessary to establish the Access Connection
in accordance with the schedule of fees set forth on Schedule II to the Capacity
Purchase Agreement.
This Annex and the Capacity Purchase Agreement is a master agreement
under which service orders for Access Connections ("Service Orders") may be
placed by the Purchaser. All Service Orders will be governed by the terms and
conditions of the Capacity Purchase Agreement and this Annex B. Access
Connections shall be ordered by he Purchaser in accordance with the
Interconnection Services Ordering Procedures manual ("ISOP Manual") which the
Grantor shall publish from time to time. The Grantor agrees to deliver a copy
of the ISOP manual to the Purchaser as least 30 days prior to the RFS Date and
shall deliver copies of any amendments or modifications thereto to the Purchaser
on or prior to the effective date of such amendment or modification. The
Purchaser shall submit all Service Orders under this Agreement to the Grantor
0or its designated agent). When the Service Order is received, the Purchaser
shall be notified of such receipt and the Grantor shall make a reasonable effort
to make (or cause to have made) the Access Connection available on the date
request by the Purchaser if requested in accordance with this Annex B and in
accordance with the ISOP Manual. Each Service Order must provide such
information as may be reasonably required in order to design, install and
maintain the Access Connection Ordered.
Once placed, the Service Order will be processed in accordance with the
ISOP Manual and a due date will be established.
If the Purchaser has not entered into the Inland Capacity Agreements,
the Purchaser may obtain inland connection services ("Inland Connections") for
the purpose of extending the Purchaser's Capacity inland, by entering into one
of the following types of agreements, all of which shall be subject to the
provisions of Section 10 and 11 of the Capacity Purchase Agreement to which this
Annex is attached:
(i) through an Inland Carrier that is co-located at the
designated cable station, such services shall be provided under separate
agreement between the Purchaser and such Inland Carrier; or
(ii) in the United States and the United Kingdom, through
a negotiated agreement with the cable station owner (or its designated agent)
for co-location at the cable station to provide Inland Connections for
Purchaser's own use. To the extent that space is available at such cable
station, Grantor shall cause the owner thereof to enter into such an agreement,
in reasonable form, with Purchaser.
A customer care center will be established to provide service to users
of the System, which such customer care center will provide the detailed
services set forth in the Customer Care Manuel. The Grantor agrees to deliver a
copy of the Customer Car Manuel at least 30 days prior to the RFS Date of
Segment S-1.
Deutsche Tlekom A.G. is the provider of Inland Connections from the
cable station located in Sylt, Germany.
The System Advisory Committee
For the purpose of directing the progress of the System, an advisory
committee (the "Advisory Committee") shall be formed consisting of the Grantor,
each Terminal Party, those Carrier Parties having purchased a minimum of 16
STM-1s. The Grantor shall appoint the Chairman or Co-Chairmen until and such
appointee(s) shall serve as Chairman and Co-Chairman until such time as the
Grantor shall appoint another Chairman or Co-Chairmen. The Chairman or
Co-Chairmen may appoint one secretary as an assistant to the Chairman or
Co-Chairmen. The Advisory Committee shall make recommendations to the Grantor
(for the benefit of the Grantor and the Terminal Parties) in respect of the
construction and installation of the System and the operation and maintenance
thereof, which the Grantor may accept or reject in its sole discretion.
The Advisory Committee will meet on the cal l of the Chairman or
Co-Chairmen or whenever requested by one or more of its members. The Chairman
or Co-Chairmen shall give the Advisory Committee at least thirty (30) days
advance written notice of each meeting, together with a copy of the draft
agenda. In case of emergency, such notice period may be reduced upon the
request of the Granter. Documents to be discussed at any meeting of the
Advisory Committee shall be made available to the Advisory Committee member at
least fourteen (14) days before the meeting, but the Advisory Committee may
agree to discuss documents distributed on less than fourteen (14) day notice.
To aid the Advisory Committee in the performance of its duties, the
following Expert Working Groups (hereafter oEWG'so) shall be formed, and said
EWG's, under the direction of the Advisory Committee, shall be responsible for
making recommendations to the Grantor for their respective areas of interest
listed in Attachment 2 and Attachment 3 and any other areas of interest
designated by the Advisory Committee:
(i) Assignments, Routing and Restoration (the "A&R EWG");
and
(ii) Operations and Maintenance (the "O7M EWG").
The Chairman or Co-Chairmen of the Advisory Committee and the Grantor
in consultation with the Advisory Committee may establish such other groups as
they shall determine in their discretion to provide assistant in the Advisory
Committees performance of its responsibilities hereunder. The Chairman or
Co-Chairmen of the Advisory Committee and the Grantor in consultation with the
Advisory Committee shall appoint the Chairman or Co-Chairmen of the AR&R and O&M
EWG's. Each of which EWGs shall meet at lease once annually and more
frequently, if necessary, until two (2) years following the RFS Date for the
System, and thereafter as may be appropriate. Meetings of such groups may be
called to consider specific questions at the discretion of the Chairman or
Co-Chairmen, or whenever requested by one or more of its members of the
Advisory Committee. On or about two (2) years after the RFS Date for the
System, the Advisory Committee shall determine whether any of its EWGs should
remain in existence or be disbanded.
The Granter shall perform or cause to have performed customary duties
and responsibilities pertaining to Network Administrator/Customer Care Center
for the System.
Transfer of Rights to Use Purchased Capacity
The Purchaser shall be permitted to transfer its right to use the
Purchased Capacity only in accordance with Section 20 of the Capacity Purchase
Agreement. In the event Purchaser transfers its right to use the Purchased
Capacity to any Carrier Party the Purchaser shall immediately notify the Network
Administrator/Customer Care Center of the identity of the transferee Carrier
Party and shall provide all other information reasonably requested by the
Network Administrator/Customer Care Center.
Subject to clause (a) of this paragraph 6, the Purchaser may transfer
its interests in Purchased Capacity to another Carrier Party at anytime by
giving immediate notice to the Network Administrator/Customer Care Center.
The Purchaser may not make any Purchased Capacity available to another
Carrier Party without written notification to the Customer Care Center.
Confirmation of such transfer of capacity shall be provided by the
Network Administrator/Customer Care Center within 7 days after completion.
Increase of System Capacity
Subject to the remaining provisions of this paragraph, the Grantor
shall have authority to increase the Capacity of the System without any benefit
or cost to the Purchaser.
Prior to any increase in the Capacity of the System, the Grantor shall
notify the Purchaser as appropriate.
Such increases in System Capacity shall be made without interruption of
normal service.
Operations, Administration and Maintenance of Segments and Access Connections
The operation and maintenance of the dry plant for Segments T-1, T-2,
T-3 and T-4 (and to the extent applicable the Access Connections) shall consist
of the following functions:
(i) monitoring and routine maintenance of terminal
equipment; and
(ii) testing, troubleshooting, fault location and
replacement of faulty terminal equipment using existing spare parts inventory.
The designated maintenance Authority shall be responsible for the
operations and maintenance of the wet plant for Segments S-1, S-2, S-3a, S-3b,
S-3c and S-4 and Segments T-1, T-2, T-3 and T-4; and shall consist of the
Following functions;
(i) be solely responsible for determining the need for
System repair;
(ii) plan and direct maintenance work;
(iii) provide ship owners and ship operators with the
Systems documentation necessary for repairs;
(iv) be responsible for delivery, control and allocation
of System spares between shore
storage depots and cable ship; and
(v) provide trained personnel to perform repair functions
and supplemental cable ship personnel.
Maintenance Costs include but are not limited to the following:
(i) dry maintenance including the land segment to the
beach joint;
(ii) wet maintenance;
(iii) cable protection and at sea repairs;
(iv) common equipment costs associated with the Atlantic
Crossing equipment at the cable stations; and
(v) operating costs associated with operating each cable
station.
If the only IRU in S Capacity acquired by the Purchaser is on Segment
S-3a, Segment S-3b or Segment S-3c or if the Purchaser has acquired unmatched
capacity on Segment S-3a, Segment S-3b or Segment S-3c, then Maintenance Costs
for such capacity shall mean, for any calendar year, an amount equal to [*] of
the Purchaser allocated share of [*] of the actual costs of operating,
maintaining and repairing the System for the calendar year preceding such
period; provided that in no event shall the Purchaser be required to pay
Maintenance Costs in an amount in excess of [*] (increasing by [*] for each
calendar year occurring after the 1998 calendar year, compounded annually) per
STM-1 acquired in such capacity. The Purchasers allocable share will be
determined first by dividing an amount equal to [*] of the aggregate amount of
such actual costs by the number of STM-1's sold in such S Capacity as of such
date to all users of such S Capacity and then multiplying the quotient by the
number of MCUs in which the Purchaser acquired on IRU. The assumed Maintenance
Costs for the first calendar year will be assumed to be [*] for reach of
Segments S-3a, S-3b and S-3c.
Except as provided in clause (d) above, Maintenance Costs shall mean,
for any calendar year, an amount equal to the difference between (x) [*] of the
Purchasers allocated share of the actual costs of operating, maintaining and
repairing the System for the calendar year preceding such period and (y) the
Purchasers allocated share of the maintenance costs payable pursuant to the
clause (d) above for such period, if any, provided that in no event shall the
Purchaser be required to pay Maintenance Costs pursuant to this clause (e) for
any calendar year in an amount in excess of [*] (increasing by [*]for each
calendar year occurring after the 1998 calendar year, compounded annually) per
STM-1. The Purchaser allocable share will be determined first by dividing the
actual costs of operating, maintaining and repairing the System by the number of
STM-1's sold on the entire System as of such date to all users of the System and
then multiplying the quotient by the number of MCUs in which the purchaser
acquired an IRU. The Assumed Maintenance Costs for the first calendar year will
be assumed to be [*].
Within 30 days after the end of each calendar year, Grantor shall
provide the Purchaser with an itemized statement of the actual Maintenance Costs
for the prior calendar year. If it is determined that the amount paid by the
Purchaser was more or less than the actual Maintenance Costs for such period,
the Purchaser shall receive a credit for such excess to be applied against, or
pay such shortfall on, the next quarterly payment date or if necessary in the
case of any excess, to subsequent quarterly payment dates.
The Maintenance Authority shall establish procedures for giving timely
notice to users of the System in the event of a System failure.
Keeping and Inspection of Books
The Grantor shall keep and maintain, or cause to have kept and
maintained, copies of such books, records, and accounts relating to bills, for a
period of five (5) years from the date of billing and shall afford each the
Purchaser the right to review such books, records and accounts during such
period.
Realization of Assets
Unless the Grantor shall otherwise determine, the termination of the
attached Capacity Purchase Agreement shall not relieve the Purchaser form any
liabilities arising on account of claims made by the Grantor in respect of the
System or any obligations which may arise in relation to the System due to any
law, order or regulation made by any government or supranational legal authority
pursuant to any international convention, treaty or agreement.
The Purchaser understands and agrees to abide by all rules, regulations
and requirements set forth by each entity having rights in any S- Segment or T
Segment, including, but not limited to, equipment and floor spacing equipment,
specifications and equipment.
Nothing contained in this Annex B or the Capacity Purchase Agreement to
which the Annex B is attached shall be deemed to vest in the Purchaser any
salvage rights in any Segment.
ATTACHMENT 1
CONFIGUREATION OF THE SYSTEM
[graphics ommitted]
Segment S-4 is the portion of the System between Segments T-1 and T-4.
Segment S-3c is the portion of the System between Segments t-2 and T-3.
ATTACHMENT 2
TERMS OF REFERENCE OF ASSIGNMENTS,
ROUTING, AND RESTORATION EWG
The responsibilities of the A&R EWG shall include the Following:
Review the principles governing the development of the System's routing plan, as
prepared by the cable administrator, and concur or comment, as appropriate.
Make recommendations with respect to the digital interworking arrangements,
including a detailed multiplex plan and synchronization arrangements, according
to the optimum routing plan developed by the cable administrator.
Study and recommend extension arraignments.
Make recommendations with respect to the deployment and timely provision of
compatible interface arrangements with all connecting facilities necessary to
meet restoration and operational requirements.
Make recommendations with respect to the availability o inland extensions,
transit facilities necessary to meet service and restoration requirements.
Make recommendations with respect to the implementation of the initial capacity
assignments of MCU's including fascicles within the System.
Study and recommend restoration plans for the System
Make recommendations with respect to the normal service and restoration
equipment requirements.
Make recommendations with respect to the plans for restoration exercise testing.
Develop and recommend detailed procedures in compliance with the terms and
conditions of this Agreement with respect to:
Increase, decrease or assignment of Capacity
Report regularly, as appropriate, to the Advisory Committee on the A&R EWG
activities
The A&R EWG shall carry out such other responsibilities as the Advisory
Committee may direct.
Any activities of the A&R EWG which cause costs to be incurred shall be covered
by the annual cap on maintenance charges set forth in paragraph 8 of Annex B.
All decisions made by the A&R EWG shall be subject in the first place to
consultation among the members of the A&R EWG and the Grantor who shall make
every reasonable effort to reach agreement. In the event agreement cannot be
reached, the issue shall be decided by the Grantor.
ATTACHMENT 3
TERMS OF REFERENCE FOR THE OPERATIONS AND
MAINTENANCE EXPERTS WORKING GROUP
The responsibilities of the O&M EWG shall include the following:
Recommend to the Grantor any project changes pertaining to the technical,
operational and maintenance aspects that O&M EWG deems appropriate for the
construction of the System.
Recommend to the Grantor the required quantity of spare equipment for
submersible and terminal equipment. Make recommendations with respect to for
depot storage and location of spear equipment in consultation with the
Maintenance Authorities.
Provide assistance and support as may be requested by the Grantor.
Make recommendations with respect to the testing, operation and maintenance
methods to be used for the System as proposed by the suppliers or Maintenance
Authorities, as appropriate.
Study other matters and make recommendations with respect to problems affecting
maintenance of the System as may be identified by the Maintenance Authorities.
Oversee TSSL under the OA&M Agreement.
Report on a regular basis to, or when requested by, Advisory Committee.
The O&M EWG shall carry out such other responsibilities as the Advisory
Committee may direct.
All decisions made by this EWG shall be subject in the first place to
consultation among the members thereof and the Grantor who shall make every
reasonable effort to reach agreement. In the event agreement cannot be reached,
the issue shall be decided by the Grantor.
Any activities of the O&M EWG which cause costs to be incurred shall be covered
by the annual cap on maintenance charges set forth in paragraph 8 of Annex B.
ATTACHMENT 4
RFS STANDARD
RFS Standard means (i) for any Segment that (a) such Segment has the
ability to carry commercial traffic between the two landing points of such
Segment meeting performance criteria of ITU-T G.826 and has line monitoring and
protection switching capability and (b) TSSL has tested and provided for STM-1
interconnectivity capability to the Segment terminal equipment according to
ITU-T G.826 and (ii) for the System, (a) that the System has the ability to
carry commercial traffic throughout the System
meeting performance criteria of ITU-T G.826 with self healing ring protection
capability (capable of restoring full service to all IRU capacity within a
period of time equal to or better than submarine cable industry standards) and
per Segment protection capability, has line monitoring and per Segment
protection switching capability and has network management capability, (b) TSSL
has tested and provided for STM-1 interconnectivity capability to the System
terminal equipment according to ITU-T G.826 and
(c) the Grantor has entered into an interconnect agreement with a carrier at
each landing point.
ATTACHMENT 5
GUARANTY
GUARANTY, dated as of ________, 199__, by _____________, a
_____________ corporation ( the "Guarantor") in favor of Global Telesystems
Ltd., a corporation organized and existing under the laws of Bermuda (the
"Grantor")
RECITALS
(A) Pursuant to the Capacity Purchase Agreement, dated as of April
____, 1998 (the "Capacity Purchase Agreement"), between the Grantor, [
], a ____________corporation (the "Subsidiary"), the Subsidiary has acquired
rights with respect to the purchased capacity on an indefeasible right of use
basis and in exchange therefor has agreed, among other things, to pay to the
Grantor the purchase price for such capacity purchased under the Capacity
Purchase Agreement.
(B) The Grantor has required, as a condition precedent to entering into
the Capacity Purchase Agreement, that the Guarantor execute and deliver this
Guaranty (for the benefit of the Grantor and the Grantor's Subsidiaries). The
Grantor would not enter into the Capacity Purchase Agreement with the Subsidiary
but for the execution an delivery of this Guaranty by the Guarantor.
(C) In furtherance of the business of the Guarantor, the Guarantor
desires to guaranty certain of the obligations of the Subsidiary under the
Capacity Purchase Agreement as provided herein.
(D) The Guarantor is the owner either directly or indirectly of all of
the capital stock of the Subsidiary.
NOW, THEREFORE, based upon the foregoing, and in order to induce the
Grantor to enter into the Capacity Purchase Agreement, the Guarantor hereby
agrees as follow:
ARTICLE
DEFINITIONS
Section Definitions. Capitalized terms not otherwise defined is the
Guaranty shall have the meaning ascribed to them in the Capacity Purchase
Agreement, as the same may be amended, supplemented or otherwise modified from
time to time. As used herein, the following terms shall have the following
meaning unless the context otherwise requires:
"Guarantied Obligations" has the meaning ascribed to such term in Section 2.1.
"Guaranty" means this Guaranty, as it may be amended, supplemented or otherwise
modified from time to time in writing signed by the Guarantor and the Grantor.
ARTICLE
GUARANTY
Guaranty. Except as expressly set forth herein, the Guarantor hereby
unconditionally guarantees to the Grantor the full and punctual payment by
Subsidiary of the purchase price for any capacity purchased under the Capacity
Purchase Agreement when due as required under the Capacity Purchase Agreement,
including, without limitation, the obligation to "gross up" a purchase price
pursuant to Section 3(d) of the Capacity Purchase Agreement (the "Guarantied
Obligations").
Termination of Guaranty. This Guaranty shall remain in full force and
effect until the earliest date on which (i) all of the Guarantied Obligations
have been completely paid in full or (ii) a replacement guarantor reasonably
acceptable to the Grantor shall have assumed all the rights and obligations of
the Guarantor under this Guaranty or (iii) the termination of the Subsidiary's
payment obligations pursuant to Section 21 of the Capacity Purchase Agreement.
The Guarantor's payment of a portion, but not all, of the Guarantied obligations
shall in no way limit, affect, modify or abridge the Guarantor's liability, as
set forth herein, for any portion of the Guarantied Obligations that has not
been completely performed or indefeasible pain in full.
Guaranty Unconditional. Except as expressly set forth herein, the
Guarantor agrees that the obligations of the Guarantor hereunder shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Subsidiary under the Capacity
Purchase Agreement, by operation of law or otherwise;
any modification or amendment of or supplement to the Capacity Purchase
Agreement;
any release, impairment, non-perfection or invalidity of any direct or
indirect security for any
obligation of the Subsidiary under the Capacity Purchase Agreement;
any change in the corporate existence, structure or ownership of the
Subsidiary, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the subsidiary or its assets or any resulting release or
discharge of any obligation of the Subsidiary contained in the Capacity Purchase
Agreement;
the existence of any claim, set-off or other rights which the Guarantor
may have at any time against the Subsidiary, the Grantor, or any other
corporation or person, whether in connection herewith or any unrelated
transactions, provided that nothing herein shall prevent the assertion of any
such claim by separate suite or compulsory counterclaim;
any invalidity or unenforceability relating to or against the
Subsidiary for any reason of the Capacity Purchase Agreement, or any provision
of applicable law or regulation purporting to prohibit the payment by the
Subsidiary of any other amount payable by the Subsidiary under the Capacity
Purchase Agreement; or
any other act or omission to act or delay of any kind by the
Subsidiary, the Grantor, or any other corporation or person or any other
circumstance whatsoever might, but for the provisions of this paragraph,
constitute a legal or equitable discharge or defense to the Guarantor's
obligations hereunder.
Notwithstanding any provision of this Guaranty to the contrary, the Guarantor
shall be entitled to assert as a defense to any claim for payment or performance
of the Guarantied Obligations, that (i) such Guarantied Obligations are not
currently due under the terms of the Capacity Purchase Agreement or (I) that
such Guarantied Obligation have previously been paid or performed in full.
Waivers of Notices and Defenses. The Guarantor hereby waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
corporation or person against the Subsidiary or any other corporation or person.
Stay. The Guarantor agrees that, notwithstanding anything to the
contrary herein, if the Grantor is stayed upon the insolvency, bankruptcy, or
reorganization of the Subsidiary from exercising its rights to enforce or
exercise any right or remedy with respect to the Guarantied Obligations, or is
prevented from giving any notice or demand for payment or performance or taking
any action to realize on any security or collateral or is prevented form
collecting any of the Guarantied Obligations, in any such case, by such
proceeding or action, the Guarantor shall pay or render to the Grantor upon
demand therefor the amount or performance that would otherwise have been due has
such rights and remedies been permitted to be exercised by the Grantor.
Reinstatement. This Guaranty shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Guarantied Obligations is rescinded or must otherwise be restored or
returned by the Grantor upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Subsidiary or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Subsidiary or any substantial part of its property, or
otherwise, all as though such payments had not been made.
No Enforcement of Subrogation. Upon making any payment or performance
with respect to any Guarantied Obligation hereunder, the Guarantor shall be
subrogated to the rights of the Grantor against the Subsidiary with respect to
such payment or performance; provided that the Guarantor shall not enforce any
payment or performance right by way of subrogation until all Guarantied
Obligations have been pain and performed in full.
ARTICLE
REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants to the Grantor that the
following statements are true and correct:
Binding Obligation. This Guaranty have been duly and validly executed
and delivered by the Guarantor and constitutes the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally and by equitable principles relating to the availability of equitable
remedies.
Relationship to the Subsidiary. As of the date hereof, the Guarantor
is the owner, directly or through one or more wholly-owned subsidiaries, of all
of the issued and outstanding capital stock of the Subsidiary; the agreement of
the Grantor to enter into the Capacity Purchase Agreement with the Subsidiary is
of substantial and material benefit to the Guarantor; and the Guarantor has
reviewed and approved copies of the Capacity Purchase Agreement and all other
related documents and is fully informed of the remedies the Grantor may pursue
upon the occurrence of a default under the Capacity Purchase Agreement.
ARTICLE
MISCELLANEOUS
Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, facsimile transmission,
telex or similar writing) and shall be given to such party at its address,
telecopy number at telex number set forth, in On case of the Guarantor, on the
signature pages hereof, or in the case of the Grantor. in The Capacity Purchase
Agreement. or such other address or telecopy number or telex number as such
party may hereafter specify for the purpose by notice to the other party. Each
such notice, request or other communication shall be effective (i) if given by
facsimile transmission. when such telecopy is transmitted to the telecopy number
specified in this Section and answerback has been received, 00 if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (iii) if given by mail three
business days after such communication is deposited in the mails with first
class (or, in the case of internatio1w mail, airmail) postage prepaid, addressed
as aforesaid, or (iv) if given by any other meow, when delivered at the addrCS3
3POCified in this Section.
No Waivers. No failure or delay by the Grantor is exercising any
right, power or privilege hereunder or under the Capacity Purchase Agreement
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any right or remedies provided by law.
Amendments and Waivers. This Guaranty constitutes the complete
agreement of the Grantor and the Guarantor with respect to the subject matter
hereof and supersedes all prior or contemporaneous negotiations, promises,
covenants, agreements or representations. No amendment, modification,
termination or waiver of any provision of this Guaranty, shall in any even be
effective without the written consent of the Grantor and Guarantor.
Successors and Assigns. This Guaranty is a continuing Guaranty and
shall be binding upon the Guarantor and its successors and assigns, provided,
however, that, except for assignments to an entity which purchases all or
substantially all of the Guarantor's assets or into which or with which the
Guarantor is merged or consolidated, the Guarantor may not assign this Guaranty
or any of the rights or obligations of the Guarantor hereunder without the prior
written consent of the Grantor, which shall not be unreasonably withheld. This
Guaranty shall inure to the benefit of (i) the Grantor and its successors and
assigns permitted under the Capacity Purchase Agreement, (ii) any lenders
participating in the financing of the System to which the Grantor assigns its
rights hereunto and (iii) any of the successors, assigns and transferees of such
lenders to whom the Capacity Purchase Agreement has also been assigned in
accordance with the terms of any consent to the assignment of the Capacity
Purchase Agreement executed by Subsidiary. Nothing contained in this Guaranty
shall be deemed to confer upon anyone other than the parties hereto (and their
permitted successors and assigns) any right to insist upon or to enforce the
performance or observance of any of the obligations contained herein.
APPLICABLE LAW. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
JURISDICTION
(a) ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR RELATING IN ANY WAY
TO THIS GUARANTY MAY BE BROUGHT AND ENFORCED IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND THE
GUARANTOR IRREVOCABLY CONSENTS TO THE JURISDICTION OF EACH SUCH COURT IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING. THE GUARANTOR IRREVOCABLY APPOINTS
[__________], WHICH CURRENTLY MAINTAINS AN OFFICE IN [__________], NEW YORK
SITUATED AT [_________________], AS ITS AGENT TO RECEIVE SERVICE OF PROCESS OR
OTHER LEGAL SUMMONS FOR PURPOSES OF ANY SUCH ACTION OR PROCEEDING. THE
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUIESTED, TO THE GUARANTOR AT ITS
ADDRESS AS PROVIDED FOR NOTICES HEREUNDER. THE FOREGOING SHALL NOT LIMIT THE
RIGHT OF THE GRANTOR TO SERVE PROCSS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING ANY ACTION OR PROCEEDING, OR TO OBTAIN EXECUTION OF ANY JUDGMENT, IN ANY
OTHER JUERISDITION.
(b) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION THAT IS MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING
UNDER THIS GUARANTY IN ANY COURT LOCATED IN THE STAE OF NEW YORK, AND HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLIAM THA ANY COURT LOCATED IN THE STATE OF NEW
YORK IS NOT A CONVENIENT FORUM FOR ANY SUCH ACTION OR PROCEEDING.
WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED UPON,
OR ARISING OUT OF, THIS GUARANTY OR ANY OTHER RELATED DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF THE GRANTOR OR THE
GUARANTOR RELATING THERETO.
Severability. If any provision in or obligation under this Guaranty
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Interpretation. Section headings in this Guaranty are included herein
for convenience of reference only and shall not constitute a part of this
Guaranty for any other purpose or be given any substantive effect.
Further Assurances. At any time or from time to time, upon the request
of the Grantor, the Guarantor shall execute and deliver such further documents
and do such other acts and things as the Grantor may reasonably request in order
to effect fully the purposes of this Guaranty. The Guarantor agrees to be
liable for any reasonable expenses incurred by Grantor and/or its successors and
assigns with respect to any action or proceeding to enforce this Guaranty.
Effectiveness. This Guaranty shall become effective upon the Capacity
Purchase Agreement becoming effective with respect to the Subsidiary.
GLOBAL CROSSING INTERNATIONAL, LTD.
Wessex house
45 Reid Street
Hamilton, Bermuda
April 7, 1998
WORLDPORT COMMUNICATION, INC.
3610 kennesaw North Industrial Parkway
Suite 200
Kennesaw, Georgia 30144
Ladies and Gentlemen:
As we have discussed, certain of our affiliates are in the process of
developing fiber optic cable systems, in particular (i) a system connecting the
United States and Japan ("PC-1"), (ii) a system connecting the North Eastern
United States, the South Eastern United States and the Caribbean ("MAC") and
(iii) a system connecting the Western United States, Mexico and Panama ("PAC;
together with PC-1 and MAC, the "Systems"). You have indicated that you desire
to purchase capacity on each of the Systems as described herein.
You have advised us that Worldport Communications, Inc. ("WCI") would
like to purchased capacity on the Systems as follows:
1 STM-1 on PC-1;
3 STM-1s on MAC; and
3 STM-1s on PAC
By your signature below, WCI agrees to enter into a standard capacity purchase
agreement with the applicable affiliate of Global Crossing International, Inc.
("GCT") which is developing the related System within one week of the date a
first draft is delivered to WCI in order to purchase capacity on the Systems as
set forth above.
Attached hereto are the current pricing schedules for each of PC-1, MAC
and PAC. The price to be paid by WCI for the purchase of capacity on the
Systems set forth above shall be the then current [*] price for such System at
the time the related capacity purchase agreement is entered into, provided that
with respect to the pricing on PC-1, such pricing arrangements is subject to the
consent of our partners' in PC-1.
In addition, you have advised us that you would like the option to
purchase terrestrial capacity starting at the AC-1 cable station located in New
York an ending at the planned PC-1 cable station located in California. GCI
shall give WCI an option to purchase such capacity may only be purchased in
connection with a purchase of transatlantic capacity on Atlantic Crossing. Such
option must be exercised be WCI within 6 months from the date hereof and the
exercise thereof will be subject to there eing uncommitted capacity then
available on the applicable system.
Neither party hereto shall have the right to assign any or all of their
respective rights or obligations hereunder without the prior written consent of
the other party hereto, except the GCI shall be permitted to assign its rights
hereunder with respect to the sale of capacity on any system to its affiliate
developing such system.
This Agreement may be amended, supplemented or otherwise modified only
by an instrument in writing signed by each of the parties hereto.
WCI agrees to keep the existence and contents of this letter agreement
confidential and not to discuss it to any other person except as is necessary in
order to enable it to comply with its obligations hereunder or with GCT's
written consent.
This Agreement shall be governed by and construed and interpreted in accordance
with the laws of the State of New York.
If you are in agreement with the terms set forth in this letter
agreement, please so indicate by signing in the space indicated below.
Very truly yours,
GLOBAL CROSSING
INTERNATIONAL, INC.
By: ________________________
Name:
Title:
Address: Wessex House
45 Reid Street
P.O. Box HM2615
Hamilton, Bermuda
Facsimile: 441-296-8606
AGREED AND ACCEPTED:
WORLDPORT COMMUNICATIONS, INC.
By: ____________________________
Name:
Title:
Address:
<TABLE>
Pricing Schedule for Global Crossing Systems
(Prices in Millions US$)
Cable Station to Cable Station Prices
<CAPTION>
Atlantic Crossing (AC-1) System Pacific Crossing (PC-1) System
Valid Through Valid Through
Tier 1: For 1 STM-1 Tier 1: For 1 STM-1
<S> <C> <C> <C> <C> <C> <C>
Cable Station Whitesands Sylt Beverwijk Cable Station Shima Ajigaura California
Bookhaven Washington
Beverwijk California
Sylt Ajigaura
Tier 2: For 2.3.4 STM-1's Tier 2: For 2.3.4 STM-1's
Cable Station Whitesands Sylt Beverwijk Cable Station Shima Ajigaura California
Bookhaven Washington
Beverwijk California
Sylt Ajigaura
Tier 3: For 5+ STM-1's Tier 3; For 5+ STM-1's
Cable Station Whitesands Sylt Beverwijk Cable Station Shima Ajigaura California
Bookhaven Washington
Beverwijk California
Sylt Ajigaura
[*-ALL DELETED INFORMATION REGARDS PRICING]
</TABLE>
<TABLE>
Pricing Schedule for Global Crossing Systems
(Prices in Millions US$)
Cable Station to Cable Station Prices
<CAPTION>
Mid Atlantic Crossing (MAC) System Pan American Crossing (PAC) System
Valid Through Valid Through
Tier 1: For 1 STM-1 Tier 1: For 1 STM-1
<S> <C> <C> <C> <C> <C> <C> <C>
Cable Station St. Croix Hollywood Bermuda Cable Station Puerto Vallarta Acapulco Panama
Bookhaven, NY California
Hollywood, FL XXXXXXXX Panama
Bermuda Acapuico
Panama
Tier 2: For 2.3.4 STM-1's Tier 2: For 2.3.4 STM-1's
Cable Station St. Croix Hollywood Bermuda Cable Station Puerto Vallarta Acapulco Panama
Bookhaven, NY California
Hollywood, FL XXXXXXXX Panama
Bermuda Acapuico
Panama
Tier 3: For 5+ STM-1's Tier 3; For 5+ STM-1's
Cable Station St. Croix Hollywood Bermuda Cable Station Puerto Vallarta Acapulco Panama
Bookhaven, NY California
Hollywood, FL XXXXXXXX Panama
Bermuda Acapuico
Panama
For a DS-3 For a DS-3
Cable Station St. Croix Hollywood Bermuda Cable Station Puerto Vallarta Acapulco Panama
Bookhaven, NY California
Hollywood, FL XXXXXXXX Panama
Bermuda Acapuico
Panama
[*-ALL DELETED INFORMATION REGARDS PRICING]
</TABLE>
<TABLE>
City-to-city Pricing Schedule
Tier 1
<CAPTION>
(Price/STM-1, US$M for 1 STM-1)
Between Europe and North America
<S> <C> <C> <C> <C> <C> <C> <C> <C>
North America Amsterdam Antwerp Brussels Dusseldorf Frankfurt London Paris Rotherdam
New York
Boston
Philadelphia
Wash., DC
Atlanta
Charlotte
Chicago
Dallas
Denver
Houston
Kansa City
Miami
Los Angeles
San Francisco
Seattle
Between Japan & North America Between Japan & Europe
North America Japan Europe Japan
<S> <C> <C> <C>
Tokyo
Osaka Tokyo
Osaka
Boston Amsterdam
Miami Antwerp
New York Brussels
Philadelphia Dusseldorf
Wash., DC Frankfurt
Atlanta London
Charlotte Paris
Chicago Rotterdam
Dallas
Houston
Kansas City
Los Angeles San Francisco
Seattle
Denver
[*-ALL DELETED INFORMATION REGARDS PRICING]
</TABLE>
<TABLE>
City-to-Pricing Schedule
<CAPTION>
Tier 2
(Price/STM-1, USSM for 2,3,4 STM-1)
Between Europe and North America
<S> <C> <C> <C> <C> <C> <C> <C> <C>
North America Amsterdam Antwerp Brussels Dusseldorf Frankfurt London Paris Rotterdam
New York
Boston
Philadelphia
Wash., DC
Atlanta
Charlotte
Chicago
Dallas
Denver
Houston
Kansas City
Miami
Los Angeles
San Francisco
Seattle
Between Japan and North America Between Japan and Europe
North America Japan Europe Japan
<S> <C> <C> <C>
Tokyo Tokyo
Osaka Osaka
Boston Amsterdam
Miami Antwerp
New York Brusels
Philadelphia Dusseldorf
Wash.,DC Frankfurt
Atlanta London
Charlotte Paris
Chicago Rotterdam
Dallas
Houston
Kansas City
Los Angeles
San Francisco
Denver
Seattle
[*-ALL DELETED INFORMATION REGARDS PRICING]
</TABLE>
<TABLE>
City-to-Pricing Schedule
<CAPTION>
Tier 3
(Price/STM-1, USSM for 5+ STM-1)
Between Europe and North America
<S> <C> <C> <C> <C> <C> <C> <C> <C>
North America Amsterdam Antwerp Brussels Dusseldorf Frankfurt London Paris Rotterdam
New York
Boston
Philadelphia
Wash., DC
Atlanta
Charlotte
Chicago
Dallas
Denver
Houston
Kansas City
Miami
Los Angeles
San Francisco
Seattle
Between Japan and North America Between Japan and Europe
<S> <C> <C> <C>
North America Japan Europe Japan
Tokyo Tokyo
Osaka Osaka
Boston Amsterdam
Miami Antwerp
New York Brusels
Philadelphia Dusseldorf
Wash.,DC Frankfurt
Atlanta London
Charlotte Paris
Chicago Rotterdam
Dallas
Houston
Kansas City
Los Angeles
San Francisco
Denver
Seattle
[*-ALL DELETED INFORMATION REGARDS PRICING]
</TABLE>
Schedule I
<TABLE>
PURCHASER: WorldPort Communications, Inc
Description of Purchased Capacity
<CAPTION>
(a) (b) ( c ) (d) (e)
Date of Transaction Appropriate S-Segment and Number of Whole MCU's Price per Whole MCU Purchase Price
Related T-Segments
Note (1) ( c )x(d)
<S> <C> <C> <C> <C>
4/7/98 1 [*] [*]
4/7/98 4 [*] [*]
5/29/98 2 [*] [*]
4/7/98 Transaction
Total Purchase Price [*]
Less Initial Payment [*]
Net Purchase Price Due on RFS of Segment S-1 [*]
10
29/5/98 Transaction
Total Purchase Price [*]
Due and Payable
Note:
The S-Segment and related T-Segments are set forth for purposes of
showing the point of entry and exit with respect to Purchased
Capacity. Purchased Capacity is not dependent on any specified
routing.
______________________________________
Permits not yet acquired
(None)
</TABLE>
