1
Gilles Dupuis
Director, Program Management and NPI
Northern Telecom Limited Tel: (514) 956-3529
9300 Trans Canada Highway Fax: (514) 956-3380
St. Laurent, Quebec
H4S 1K5
[NORTEL
NORTHERN TELECOM LOGO]
April 24, 1997
Frank Grenon
Chief Executive Officer
Innova Corporation
3325 South 116th Street,
Seattle, Washington
98168 USA
Subject: Heads of Agreement; Extension
Dear Sir,
This letter is to confirm that Innova Corporation and Northern Telecom Limited
have agreed to extend the Heads of Agreement signed between the parties on
December 13, 1996 to May 15, 1997.
The signatures below indicate the agreement of the parties with the content of
this letter.
NORTHERN TELECOM LIMITED Innova Corporation
/s/ GILLES DUPUIS /s/ FRANK GRENON
- ------------------------------- -------------------------------
Gilles Dupuis Frank Grenon
Director Radio Program Management & NPI CEO
Date: 97-04-25 Date: 4-25-97
cc: P.Boivin Nortel CCM
W.Silverman Nortel St-Laurent
J.Abitbol Nortel St-Laurent
B.Neuschwander Nortel St-Laurent
C.Pallemaerts Innova Corporation
NOTE: The symbol***** indicates where confidential
portions have been omitted and filed separately
with the Securities and Exchange Commission.
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JUDITH ABITOL Northern Telecom Tel 514 956-3149
Research & OEM Contract Manager 9300 Trans Canada Highway Fax 514 956-3219
Transport Networks St. Laurent, Quebec Canada H4S 1K5
[NORTEL
NORTHERN TELECOM LOGO]
FRANK GRENON
CHIEF EXECUTIVE OFFICER
INNOVA CORPORATION
3325 SOUTH 116TH STREET,
SEATTLE, WASHINGTON
98168 USA
February 27, 1997.
SUBJECT: HEADS OF AGREEMENT; EXTENSION
Dear Sir,
This letter is to confirm that Innova Corporation and Northern Telecom Limited
have agreed to extend the Heads of Agreement signed between the parties on
December 13, 1996 to April 15, 1997.
The signatures below indicate the agreement of the parties with the content of
this letter.
Thank you,
/s/ JUDITH ABITOL
- -------------------------------
Judith Abitol
NORTHERN TELECOM LIMITED Innova Corporation
/s/ GILLES DUPUIS /s/ FRANK GRENON
- ------------------------------- -------------------------------
Gilles Dupuis Frank Grenon
Director Radio Program Management & NPI CEO
Date: 97-02-27 Date: Feb. 27, 1997
cc: P.Boivin Nortel CCM
W.Silverman Nortel St-Laurent
G.Dupuis Nortel St-Laurent
B.Neuschwander Nortel St-Laurent
C.Pallemaerts Innova Corporation
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NOTE: The symbol ***** indicates where confidential portions have been omitted
and filed separately with the Securities and Exchange Commission.
HEADS OF AGREEMENT
SLOVTEL OEM PURCHASE AGREEMENT
MINIMUM REQUIREMENTS TO BE AGREED TO BY SUPPLIER
SCOPE
- -----
These Heads of Agreement between Northern Telecom Limited ("Nortel") and Innova
Corporation ("Innova") cover the purchase and sale of the products ("Products")
listed in Appendix A attached hereto. The Technical Specifications for the
Products are listed or referred to in Appendix B attached hereto. These Heads
of Agreement shall govern the sale and purchase of the Products until a
definitive OEM Purchase Agreement is entered into by the parties and such
definitive agreement once agreed upon will take effect from the date of the
Heads of Agreement.
The Parties agree to enter into a definitive OEM Agreement on or before March
1, 1997.
I. DELIVERY:
All Products shall be shipped FCA INNOVA's shipping location. (FCA is
interpreted in accordance with INCOTERMS 1990)
II. PRICES AND PAYMENT
The Prices to be paid by Nortel for the Products are those stipulated
in Appendix A.
Payment shall be due to INNOVA from Nortel, thirty-nine (39) calendar
days following the Delivery Date of the Products.
Nortel shall pay Seller (a) a service fee at the rate of Two percent
(2%) of the amount due for each month or portion thereof that the
amount remains unpaid; and (b) interest on any such late payment from
the due date thereof until the date paid at the lesser of eighteen
percent (18%) per annum or the maximum rate allowed by law.
III. SHIPPING METHOD
Nortel will use its own freight forwarder. Title and risk of loss will
pass to Nortel upon delivery of Products by Seller to freight
forwarder.
IV. DOCUMENTATION: These documents should be sent to Paul Nugent at Nortel
St. Laurent
The shipment documents are as follows: (Note: documents 4 and 5 may be
sent separately.)
1) In case of air-freight; One original and one copy of Airway Bill
2) Commercial Invoice issued by Innova in three (3) originals and three
(3) copies indicating P.O. Number and Shipping Mark;
3) Packing List in three (3) originals;
4) Certificate of Quality (or a Certificate of Conformance/Compliance)
including test data and a Certificate of Quantity, each in two (2)
originals;
5) Copy of fax/letter to Nortel advising particulars of shipment within
(48) hours after shipment;
6) Certificate of Origin in two (2) originals;
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V. PACKING AND SHIPPING MARK:
1) All the Products to be delivered by Seller shall be suitably packed in
accordance with Nortel's packing specs for long distance ocean, air and
inland transportation and well protected against repeated handling,
numerous loading and unloading.
Packaging shall conform to the following standards; ISTA Procedure 1A
Should the Products be damaged or lost due to Seller's failure to
materially comply with the above packing specifications and the
below-described marking specifications, and/or inadequate protective
measures before arrival at Port of Destination, Seller is liable, at
Nortel's option, for the repair or replacement of the Products.
2) Each of the accessories (i.e. cables, connectors, etc.,) in package or
bundle shall be labeled by Seller, indicating P.O. Number, package
number, name of main Product to which it is an accessory, names of
accessories and its position numbers on assembly drawings. Spare parts
and tools shall be marked with the words "Spare Parts" or "Tools"
besides the above particulars.
3) Seller shall mark the following on each shippable unit (be it crate,
pallet, box) with indelible paint in conspicuous printed English words:
P.O. Number, shipping mark, consignee, port of destination, Name of
Products, Case Number, Gross Weight (in Kg), Measurement (L x W x H in
cm).
4) The following documents shall be enclosed in each package of the
Products;
Detailed Packing List in two (2) copies; Installation card.
5) The following documents shall be provided to Nortel: certification of
conformance/compliance (as referred to in paragraph 4 of the
Documentation section), certification of inspection.
6) The Technical Documentation to be provided by Seller as set forth in
Appendix A, shall be properly packed to withstand numerous handling,
long distance transportation and to protect from damages of moisture
and rain. The surface of each package shall be marked with the following
printed words: P.O. Number, Shipping Mark, Consignee, Port of
Destination, Gross Weight (in Kg):
VI. WARRANTY
1) Seller warrants that the Products to be supplied shall be completely new
and shall comply with the Technical Specifications. This warranty shall
not apply to any defect which has been caused by Nortel and arises from
mishandling, misuse, neglect or improper testing or repair.
2) The Warranty Period applicable to the Products listed in Appendix A and
manufactured by Seller shall be twenty-six (26) months from the date of
Delivery. The items listed in Appendix A as being manufactured by third
parties (i.e. cabinets, power supplies, cross connects, and Andrew
antennas) shall have the pass-through warranty obtained from the
manufacturer.
3) Nortel is responsible for the quantity and type of equipment, cabling
and installation materials required to commission the Products, except
items which have been clearly indicated as being supplied by Seller and
which are listed in Appendix A. Should Innova fail to provide all the
Products listed in Appendix A, Innova will be responsible for
supplementing the shortage or deficiencies free of charge without
delay.
4) Seller shall repair or replace any defective Products free of charge
during the Warranty Period.
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5) Products with defects that affect all, substantially all, or
substantially all of a Production Lot and which result or could result
in some form of personal health or safety hazard, property damage or
which are service affecting will be repaired by the Seller free of
charge on installation site. Other repairs will be effected by the
return of the defective Products to Seller for repair or replacement at
Seller's option free of charge to Nortel.
After the warranty period has expired and for a period of an additional
Five (5) years, Seller agrees to repair or replace, at its option, free
of charge to Nortel, Products with defects that affect all,
substantially all, or substantially all of a Production Lot and which
result or could result in some form of personal health or safety
hazard, property damage or which are service affecting. Furthermore,
for health and safety hazards Seller will provide this warranty beyond
the additional five (5) year period.
All transportation and delivery costs for Products returned pursuant to
the previous paragraph from the original installation site to Seller
shall be borne by the Buyer unless the repair in question relates to
Products with defects that affect all, substantially all, or
substantially all of a Production Lot and which result or could result
in some form of personal health or safety hazard, property damage or
which are service affecting. All transportation and delivery costs from
the Seller to original installation site, including insurance, for
Products returned pursuant to previous paragraph shall be borne by
Seller.
Seller anticipates to maintain a repair/swap stock level of five percent
(5%) of installed base. Parts used for repair or replacement shall not
be those spare parts for maintenance supplied by Seller to Nortel.
However, under urgent circumstances, Seller may use Nortel's spare parts
to ensure normal running of the Product. Seller shall then promptly, at
its cost replace all the spare parts so used. The warranty period
applicable to replaced or repaired parts is 90 days from the date of
arrival at original installation site or the end of the Warranty Period,
whichever is longer.
Seller shall make the best efforts to repair or replace the defective
parts/components of the Products required under the terms of the
Warranty and return them duty free within Ten (10) working days counting
from the date of receipt at the Seller's location of the defective
portion of the Products.
IN EMERGENCY SITUATIONS, SELLER SHALL SHIP TO NORTEL TO DESTINATION
REQUESTED AT TIME OF NOTIFICATION, REPLACEMENT PARTS WITHIN FORTY-EIGHT
(48) HOURS FROM NOTIFICATION OF THE EMERGENCY OR RECEIPT OF THE
DEFECTIVE PRODUCTS AT SELLER'S PLANT, WHICHEVER IS SOONER (EMERGENCY IS
DEFINED AS A SITUATION AT THE CUSTOMER SITE THAT IS SERVICE AFFECTING OR
POTENTIALLY SERVICE AFFECTING AND FOR WHICH NORTEL MUST OBTAIN REPAIRED
OR REPLACEMENT PARTS WITHIN 48 HOURS).
6) SELLER represents and warrants that the Products will meet and comply
with the applicable standards identified or referenced in the Technical
Specifications. SELLER shall defend, indemnify and hold Nortel and its
customers harmless from any and all claims, suits or actions brought
against it for any damages, including reasonable attorney's fees, as a
result of the failure of Seller to comply with any of its above
obligations. [IN TECHNICAL SPECS ADD ETSI REFERENCE: PR ETS 300 385 FOR
EMISSION, AND MPT 1409 & MPT 1414 FOR PERFORMANCE (UK TYPE APPROVAL)]
SELLER shall supply to Nortel a list of all materials incorporated into
a Products which are classified as toxic or hazardous under applicable
laws and regulations to meet the Technical Specifications listed in
Appendix B, information on the safe handling of each Product, and any
pertinent information available to Innova concerning any adverse effects
on people or the environment that may result from the use of, exposure
to, or disposal of such Products. Seller warrants to Nortel that each
Product provided by Seller is safe for its normal use. Seller shall
indemnify Nortel for any expenses that they may incur by reason of
recall or prohibition of use of a Product due to a final determination
that the Products are not safe for its intended use. Nortel shall
cooperate with Seller to facilitate and minimize the expense of any
recall or prohibition against such use.
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THIS WARRANTY DOES NOT COVER:
Defect, damage, or malfunctions resulting from:
a. Use of the Products on other than their normal or
customary manner which is defined as being "fixed point to point
terrestrial applications in environmental conditions within the
Technical Specifications of the Product";
b. Misuse, accident, neglect, environmental or site
conditions not conforming to the Technical Specifications for
the Product;
c. Unauthorized alterations or repairs, use of unapproved
parts in the Products or the combination or interfacing of the
Products in each case in a manner not approved by Innova;
d. an event of Force Majeure as defined in section XII,
(sub-paragraph 1 only);
e. Failure of any item or service not supplied by Seller;
f. Damage which occurs during shipment of the Product; and
g. Failure of Nortel to maintain the Products substantially
in accordance with the Technical Documentation.
All claims for Product defects in and out of warranty will be made by
Nortel.
THE WARRANTIES IN THIS AGREEMENT ARE GIVEN IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE SPECIFICALLY EXCLUDED,
INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL INNOVA BE LIABLE FOR
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES; PROVIDED,
HOWEVER, THAT IF THE LAW OF ANY JURISDICTION APPLICABLE TO THIS
AGREEMENT DOES NOT PERMIT SUCH DAMAGES TO BE COMPLETELY DISCLAIMED, THIS
CLAUSE SHALL BE INTERPRETED AS NECESSARY TO GIVE INNOVA THE FULL BENEFIT
OF ANY DISCLAIMER OR LIMITATION OF SAID DAMAGES AS PERMITTED UNDER SUCH
LAW.
VII. WARRANTIES OF OWNERSHIP:
Seller represents and warrants that it has developed, is the owner of
and/or possesses all necessary rights, including, without limitation,
rights in respect of third party software, to use, execute and market
the Products software required for the operation of the Products and
that it has the right to license Nortel, to receive, use, and execute
the Product software for the operation of the Products and to sublicense
end users to use the Product software for the operation of the Products.
VIII. QUALITY ASSURANCE PROGRAM:
Innova shall maintain, in the manufacture and the assembly of the
Products, a quality assurance program that meets the requirements of ISO
9001.
Innova shall inform Nortel of any process, component and supplier change
that may impact the performances or the quality of the Products.
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Nortel reserves the right to hold Factory Inspections and Audits at
Seller's site. Nortel also reserves the right to integrate its
Acceptance of Production Lots based on the ANSI/ASQLZ 1-4-1993
(corresponding to MIL-STD-105-E) with an AQL of 1% and the General
inspection level II.
IX. TECHNICAL ASSISTANCE:
Nortel will provide the first level of on-line technical assistance to
its customers, twenty-four (24) hours a day, seven (7) days a week. In
the event Nortel requires Seller's support for such purpose, Seller will
provide technical telephone assistance for a period of Fifteen (15)
years at no charge twenty-four (24) hours a day, seven (7) days a week,
with an application, installation, operation and routine service for the
Products with a telephone call back within 30 minutes.
Seller shall provide to Nortel, at Nortel's expense, reasonable
installation support as required. Seller shall provide to Nortel access
to all documentation for training and installation of the Products in
Hard copy.
X. INDEMNIFICATION:
Seller will indemnify and hold Nortel, harmless from and against any and
all claims, demands, suits or actions made or brought by Nortel, the end
user or third parties on account of the non-compliance of the Products
to the Technical specifications causes physical injury, including death,
or damage to property to the extent such physical injury, including
death, and damage to property is attributable to a breach of Seller's
warranty hereunder.
EXCEPT AS SPECIFICALLY PROVIDED HEREIN, INNOVA, WHETHER AS A RESULT OF
BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), PATENT
INFRINGEMENT, COPYRIGHT INFRINGEMENT, OR OTHERWISE, SHALL NOT HAVE ANY
LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, EXCEPT AS EXPRESSLY
SET FORTH IN SECTION XI, INCLUDING BUT NOT LIMITED TO, LOSS OF PROFIT OR
REVENUES, LOSS OF USE OF THE PRODUCTS OR ANY ASSOCIATED EQUIPMENT, COST
OF CAPITAL, COST OF SUBSTITUTE PRODUCTS, FACILITIES OR SERVICE, OR
DOWNTIME COSTS.
XI. PATENT AND COPYRIGHT INDEMNITY
A. Innova shall defend Nortel against a claim that
Innova-manufactured Products infringe a patent or copyright
granted or registered in the jurisdiction which covers the
geographical location of the original installation site if and
only if (i) Nortel promptly notifies Innova in writing of the
claim, (ii) Innova has sole control of the defense and all
related settlement negotiations, and (iii) Nortel gives Innova
information and assistance for the defense. Innova shall
indemnify and hold harmless Nortel from all payments, which by
final judgments in such suits, may be assessed against Nortel on
account of such alleged infringement and shall pay resulting
settlements, costs and damages finally awarded against Nortel by
a court of law.
B. Nortel agrees that if Innova-manufactured Products become, or in
Innova's opinion are likely to become, the subject of such a
claim, Nortel will permit Innova, at its option and expense,
either to procure the right for Nortel to continue using such
Products or to replace or modify same so that they become
non-infringing, and, if neither of the foregoing alternatives is
available on terms which are acceptable to Innova, Nortel shall
have the right to return the entire unusable portion of such
infringing or potentially infringing Innova-manufactured
Products for the purchase price actually paid by Nortel to
Innova therefor.
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C. Innova disclaims any and all liability for any claim of patent or
copyright infringement (i) based upon adherence to specifications,
designs or instructions furnished by Nortel, (ii) any claim based
upon the combination, operation or use of any Innova-manufactured
Products supplied hereunder with products, software or data not
supplied by Innova, and (iii) any claim based upon alteration of the
Products made by any party other than Innova.
Nothing contained in this Agreement shall be deemed to grant, either
directly or indirectly or by implication, any license under any
patents or patent applications of Innova, except that Nortel shall
have the normal non-exclusive, royalty-free license to use that
which is implied, or otherwise arises by operation of law, in the
sale of the Products.
XII. FORCE MAJEURE
Except for payment of monies due, neither party shall be liable for
delays in delivery or performance or for failure to manufacture, deliver
or perform resulting from acts beyond the reasonable control of the
party responsible for performance. Such acts shall include, but not
limited to:
1. acts of God, acts of a public enemy, acts or failures to act by
the other party, acts of civil or military authority,
governmental priorities, strikes or other labor disturbances,
hurricanes, adverse weather conditions, earthquakes, fires,
floods, epidemics, embargoes, war, riots, and loss or damage to
goods in transit; or
2. inability to obtain necessary products, components, services or
facilities on account of causes beyond the reasonable control of
the delayed party or its suppliers.
In the event of any such delay, the date(s) of Delivery or performance
shall be extended for as many days as are reasonably required due to
the delay.
XIII. GENERAL
The UNCITRAL Convention on Contracts for the International Sale of Goods
shall govern the sale and purchase of Products except as expressly set
forth herein.
Innova and Nortel shall have a relationship of Seller and Purchaser.
This Agreement does not create an employer-employee, agency, joint
venture or partnership relationship between Innova and Nortel. Nothing
in this Agreement shall be interpreted as granting Nortel the right or
authority to make commitments of any kind for Innova, implied or
otherwise, without the prior written consent of Innova.
INNOVA Corporation
Gateway North Bldg. 2
3325 South 116th Street
Seattle, WA 98168
Tel.#: (206) 439-9121
Fax#: (206) 439-2700
Signature: /s/ COLIN PALLEMAERTS Date: 29th November 1996
-------------------------------------- ------------------
COLIN PALLEMAERTS
EVP Marketing
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NORTHERN TELECOM LIMITED
9300 Trans Canada Highway
St Laurent, Quebec, H4S 1K5
Tel#: (514) 956-1010
Fax#: (514) 956-3219
Signature: /s/ William Silverman Date: 13th December 1996
--------------------------------
WILLIAM SILVERMAN
Director of Supply Management
Signature: /s/ Gilles Dupuis Date: 13th December 1996
--------------------------------
GILLES DUPUIS
Director, Radio Program
Management & NPI
Signature: /s/ Bernard Neuschwander Date: 12th December 1996
--------------------------------
BERNARD NEUSCHWANDER
General Manager, Radio
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- -------------------------------------------------------------------------------
EXHIBIT A
PRODUCTS LIST
NORTEL / INNOVA
---------------------------
PRICE MANUFACTURER
---------------------------
INNOVA MANUFACTURED PRODUCTS:
ARU 38 BAND (2/4E1, 4DS1, OR 4/8DS1) $***** INNOVA
ARU 23 BAND (2/4E1, 4DS1, OR 4/8DS1) ***** INNOVA
------------------------------------------------------ ---------------------------
1RU SIU SHELF, 2/4E 1/4DS1, INCLUDES N-TYPE CONNECTORS ***** INNOVA
------------------------------------------------------ ---------------------------
RS-422 SERVICE CHANNEL, PER SIU ***** INNOVA
24 cm HORN (10") ANTENNA, 38 GHz ***** INNOVA
------------------------------------------------------ --------------------------
34 cm HORN (14") ANTENNA, 38 GHz ***** INNOVA
------------------------------------------------------ ---------------------------
34 cm HORN (14") ANTENNA, 23 GHz ***** INNOVA
XPVIEW SOFTWARE, 1x PER END USER N/C INNOVA
XPVIEW USER FEE PER SIU N/C INNOVA
------------------------------------------------------ ---------------------------
NON-INNOVA MANUFACTURED PRODUCTS:
BELDEN 9913 CABLE, BULK WITHOUT CONNECTORS $0.68/ft. BELDEN
50 CM PARABOLIC ANTENNA (ANY BAND) 938.00 ANDREW
------------------------------------------------------ ---------------------------
1 2 M PARABOLIC ANTENNA (23 GHz ONLY) 2,175.00 ANDREW
------------------------------------------------------ ---------------------------
ELECTRICAL ENCLOSURE, 2' WITH INTEGRATION 1,733.00 HOFFMAN
CROSS CONNECT PANEL 150.00 ADC
------------------------------------------------------ ---------------------------
DOCUMENTATION:
------------------------------------------------------ ---------------------------
XP4 INSTALLATION GUIDE N/C INNOVA
TRAINING DOCUMENTATION N/C INNOVA
------------------------------------------------------ ---------------------------
REFERENCE MANUAL N/C INNOVA
------------------------------------------------------ ---------------------------
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APPENDIX B
TECHNICAL SPECIFICATIONS
The documents enclosed have been supplied by Innova. If any further information
is required regarding the Technical Specifications the following people may be
contracted:
INNOVA: Nick Jeffery NORTEL: Peter Hornacek
Pat McDonald (Project engineer)