Document:

exv10w1

 

Exhibit 10.1

May 17, 2005

	 	 	 
	Mr. Perry Nolen
	 	 
	Xybernaut Corp.

	 	PERSONAL AND CONFIDENTIAL
	12501 Fair Lakes Circle
	 	 
	Suite 550
	 	 
	Fairfax, VA 22033
	 	 

Perry:

     This is a short note to document our telephone conversation of today regarding arrangements
for Xybernaut compensation to our firm for our services.

1. As we discussed, Xybernaut had in the past paid our firm $30,000 per month for our IP services,
which our firm provided exclusively for Xybernaut Corp; we had no other clients.

     We have agreed today to reduce this payment to $20,000 per month, with Xybernaut agreeing that
our firm can take on other clients. As I noted to you, with the work load our office has and will
continue to have for Xybernaut, the possibility of taking on other major client work is low;
however, we must keep that option open. Saying this, you have our guarantee that the level of work
effort that we will put in for Xybernaut will not be reduced but will be maintained at the same
level as present.

2. Xybernaut presently owes our firm $34,124.39 for past services and disbursements. Today we
agreed to reduce this past-due amount to $25,000 plus $4,124.39 for disbursements for a total
amount due us of $29,124.39. We agreed that this would settle our past-due account.

     Perry, I believe the above is a fair arrangement and thank you for your understanding and
assistance; we want to help Xybernaut and will work very hard, as we have in the past, to preserve
Xybernaut’s IP portfolio.

Regards,

JAMES J. RALABATE

JJR/skexv4wxay

 

	 	 	 
	Switched Voice Umbrella Agreement

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UMBRELLA AGREEMENT

FOR

SWITCHED VOICE SERVICES

This Umbrella Agreement for Switched Voice Services (“UMBRELLA AGREEMENT”) is made as of the
Effective Date between:-

	(1)  	France Telecom S.A., a French company having its registered office at 6, place d’Alleray,
75015 Paris, France (“FT”); and
	 
	(2)  	Equant Network Services International Limited, a limited liability company existing under the
laws of the Republic of Ireland with its principal office at Garryard House, 25-26 Earlsfort
Terrace, Dublin 2, Republic of Ireland (“Equant”).

RECITALS:

	 	(A)  	Annex 5.1 of the Contribution Agreement provided certain principles concerning the
Parties co-operation in relation to switched voice services, which principles were then
varied in the Closing Agreements;
	 
	 	(B)  	The Parties have agreed to modify their relationship in this UMBRELLA AGREEMENT and
related agreements, which will supercede and replace the Closing Agreements as of the
Effective Date.
	 
	 	(C)  	The Parties’ relationship is based on their agreement to have Equant assume
operational and financial responsibility for the MLN subject to the covenants made herein.

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	 	(G)  	The activities herein shall be managed through active cooperation between the
Parties, joint planning, and optimization of resources.

IT IS AGREED as follows:

	 	 	 
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	1.  	DEFINITIONS

In this UMBRELLA AGREEMENT:

“2005 Business Plan Scenario” means the Microsoft Excel sheet named “2005 Scenario” included in the
MLN P&L.

“2006 Business Plan Scenario” means the Microsoft Excel sheet named “2006 Scenario” included in the
MLN P&L.

“Affiliate” means, with respect to any person, any other person controlled by, under common control
with, or controlling such person. For the purposes of this UMBRELLA AGREEMENT: (a) the term
“control” means a person’s (1) ownership, directly or indirectly, of equity securities entitling it
to exercise in the aggregate at least 50% of the voting power of the entity in question; or (2)
possession directly or indirectly, of the power to direct or cause the direction of the management
and policies of or with respect to the entity in question, whether through ownership of securities,
by contract or otherwise; (b) any reference to an Affiliate of FT means any Affiliate excluding
Equant and its Subsidiaries; and (c) any reference to an Affiliate of Equant means a Subsidiary of
Equant.

“Confidential Information” means any matters confidential or secret information or data that is of
value to the Party disclosing such information, including confidential or secret (a) scientific or
technical information; (b) information relative to the current or proposed business, sales, and
marketing plans of the Party disclosing such information and financial information related thereto;
(c) drawings, designs, computer programs and software devices; (d) costs and pricing information;
(e) the contents of this UMBRELLA AGREEMENT, provided, however, the term “Confidential Information”
shall not include any information that (i) is now in or subsequently enters the public domain
through means other than direct or indirect disclosure by either Party in violation of the terms of
this UMBRELLA AGREEMENT; (ii) is already in the possession of the Party receiving such information
free of any known confidential obligation to any other party; or (iii) is lawfully communicated to
the Party receiving the information by a third party, free of any known confidential obligation,
subsequent to the time of communication thereof by, through or on behalf of the other Party.

“Closing Agreements” mean the agreements signed at Closing and subsequently with respect to the
switched voice business of the Parties: the MOU for Switched Voice Services dated June 29, 2001,
the Switched Voice Supply Agreement dated December 17, 2002 and the Switched Voice Miscellaneous
Services Agreement dated December 17, 2002.

“Contribution Agreement” means the agreement of that name, dated 19 November 2000 between France
Telecom S.A., Atlas Telecommunications S.A and Equant N.V.

	 	 	 
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“Decommissioning Plan” means the document attached as Annex 6, to be updated from time to time,
which defines the schedule for the decommissioning of the MLN Equipment.

“Effective Date” means September 1, 2004.

“FT Network” means the FT voice network operated by FT, including FT’s bilateral network.

“Global Transmission Agreement” means the Agreement for the Purchase of Global Transmission
Services by and between France Telecom and Newco dated June 29th, 2001.

“June 2004 Closing Rate” means EUR 1 for USD 1,1994.

“MLN” means the Global One originated voice switches, related switched voice equipment and
transmission links which form the Multilateral Network (MLN), excluding such switches and equipment
located in Russia, as further described in Annex 1.

“MLN Equipment” means the MLN switching assets listed in Annex 1, except the Bagnolet Switch.

“MLN P&L” means the document attached as Annex 5, with its attachments.

“MLN Transit Switches” means the four MLN switches located at London (Archway, and Telehouse),
Oakhill and Hong Kong and identified in Annex 1.

“Services” means the services to be provided by the Parties as set forth in Section 3 (services to
be provided by Equant) and Section 4 (services to be provided by FT) and to be further described in
the Services Agreement.

“Services Agreements” means (i) the Agreement for Switched Voice Services (from Equant to FT) and
(ii) the Agreement for Support Services for Switched Voice (from FT to Equant).

“Signature Date” means the date when the UMBRELLA AGREEMENT is signed by both parties.

“Subsidiary” means, with respect to any person, any other person controlled by such person.

“Transition Activities” means all transitional activities described in the services descriptions
and in Section 6.

The terms defined above include the plural as well as the singular. Unless otherwise expressly
stated, the words “herein”, “hereof”, and “hereunder” and other words of

	 	 	 
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similar import refer to this UMBRELLA AGREEMENT as a whole and not to any particular Section,
provision or paragraph. “Section” and “Annex” references refer to sections of, and annexes to, this
UMBRELLA AGREEMENT. The words “include” and “including” shall not be construed as terms of
limitation. The words “day”, “month”, and “year” mean, respectively, calendar day, calendar month
and calendar year, and the words “writing” or “written” mean preserved or presented in retrievable
or reproducible form, whether electronic (except for voice mail) or hard copy, unless otherwise
stated herein. The word “or” shall mean “and/or” unless the context specifically requires
otherwise. The headings used in this UMBRELLA AGREEMENT are included for convenience only and are
not to be used in construing or interpreting this UMBRELLA AGREEMENT.

References to “Parties” in this UMBRELLA AGREEMENT means France Telecom and each France Telecom
Affiliate and Equant and each Equant Affiliate which will either be supplying products or services
to a Party under this UMBRELLA AGREEMENT and references to a “Party” means either (a) France
Telecom or the relevant France Telecom Affiliate; or (b) Equant or the relevant Equant Affiliate,
as the context requires, and such terms as “each”, “either”, “both”, “the” or “neither” prefacing
the use of the words “Party” or “Parties” shall be construed accordingly.

List of Annexes:

Annex 1: MLN Description

Annex 2: FT Network Access POPs

Annex 3: FT Transmission POPs

Annex 4: HR Transition Plan

Annex 5: “MLN P&L”

Annex 6: Decommissioning Plan

Annex 7: Off-net Call Termination Price List

2. SCOPE AND PURPOSE OF UMBRELLA AGREEMENT

2.1 This UMBRELLA AGREEMENT records the Parties’ agreement in principle relating to the Services
offered to under this UMBRELLA AGREEMENT and covers:

	 	(a)  	Their co-operation in relation to the Services;
	 
	 	(b)  	Equant’s assumption of operational and financial responsibility for the MLN
as of the Effective Date;
	 
	 	(c)  	The Parties assumption of responsibility for the Transition Activities;
	 
	 	(d)  	The conditions precedent to the Effective Date such as the approval of
Equant’s Independent Directors; and
	 
	 	(e)  	The completion of the Services Agreements.

	 	 	 
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2.2 The Parties agreed in the Closing Agreements that Equant would migrate all traffic from the MLN
by the end of 2005, and that Equant would migrate the switched voice business to voice-over-data
solutions by such date. The parties have now agreed:

	 	(a)  	That Equant will assume financial and operational responsibility for the MLN
as of the Effective Date, with the support of FT as described herein;
	 
	 	(b)  	Equant will purchase switching capacity on FT’s Bagnolet switch and
engineering and operational support services from FT for the operation of the MLN; and
	 
	 	(c)  	Equant will purchase from FT Off-net Call Termination services on a
non-exclusive basis and transmission capacity pursuant to the Global Transmission
Agreement.

2.3 The Parties will negotiate in good faith the completion of the Services Agreements on a best
efforts basis by the Effective Date, but no later than December 31, 2004. In the event the Services
Agreements are not completed by such date, the Parties will meet to determine if either party has
been disadvantaged by the delay and non-signature, and determine appropriate remedies for the
disadvantaged party in accordance with the principles set out in this UMBRELLA AGREEMENT.

2.4 This UMBRELLA AGREEMENT is not a contract for the provision of services and all such
transactions shall be subject to execution by the Parties of the Services Agreements.

2.5 Post transition, both parties will continue to operate pursuant to their existing regulatory
authority and the agreements in place between them, all in accordance with all relevant local
legislation.

2.6 The Parties will exercise their best efforts to settle all outstanding obligations relating to
the Closing Agreements prior to December 31, 2004.

	3.  	RESPONSIBILITIES OF EQUANT
	 
	   	Equant will provide the Services to FT for the benefit of FT under the Agreement for Switched
Voice Services. Equant will support its MultiNational Corporation customers (“MNC”) using
its own resources as well as the services provided by FT under this UMBRELLA AGREEMENT.
	 
	3.1  	Operation of the MLN

3.1.1. Equant is responsible to operate the MLN. For further clarity, Equant’s operation of the
switched voice business in Russia is unrelated to the obligations of the Parties herein.

3.1.2. Equant intends to retain and decommission switches in accordance with the

	 	 	 
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Decommissioning Plan. Equant will share with FT its Decommissioning Plan for switches and discuss
the schedule and method of decommissioning. Equant and FT will meet on a monthly basis in the Voice
Decommissioning Steering Committee to review and update the Decommissioning Plan. Notwithstanding
these forecasts and consultation, Equant has the right to decommission a switch in accordance with
the Decommission Plan and will provide confirmation in the monthly Voice Decommissioning Steering
Committee meeting that a switch will be decommissioned at least 3 months before the set date and
that FT must cease all traffic on such switch on the decommission date notified by Equant. This
decommission notice shall be formally minuted or confirmed by letter. If Equant wants to
decommission earlier than the plan, Equant will give at least a 3 months plus 10 days notice and FT
will confirm within 10 days that they will cease all traffic on the switch. In the event that FT
desires to continue to utilize such switch, then the principle set forth below applies. It is
understood that Equant is under no obligation to continue to operate and manage the switch. If
Equant wants to decommission later than the Decommissioning Plan, then Equant will advise FT and
the parties will negotiate the possibility for FT to continue using the switch with the objective
of improving the profitability of the switch.

3.1.3. Notwithstanding the above, Equant shall provide a notice of 6 months for the MLN Transit
Switches. In no event will these MLN Transit Switches be decommissioned by Equant prior to January
1, 2006, unless with the express prior approval by FT.

3.1.4. In the event that FT desires to continue traffic on any MLN switch that Equant has requested
to be decommissioned, then the Parties will enter into negotiations regarding either (i) FT’s
purchase of the switch at a price not less than the remaining net booked value of the switch and
additional net booked value of subsequent related investment (capacity upgrade and software),
except for investment already funded by FT, in which case FT would then takeover the operation of
the switch themselves; or (ii) Equant’s continuing to operate the switch in which case FT would
fund this operation at cost plus 8%.

3.1.5. If at any time after the Effective Date, Equant intends to sale, transfer, assign, swap or
in any other way dispose of a MLN Transit Switch, Equant shall first notify FT of its intent and
negotiate the assignment of such MLN Transit Switch to FT at the conditions described in Section
3.1.4 if FT notifies Equant of its interest in buying such MLN Transit Switches.

	3.2  	Supply of Switched Voice Services to FT
	 
	   	Equant shall provide to FT a protocol conversion solution based on switching ports and
associated switching services on the MLN Equipment (the “Switched Voice Services”).
	 
	   	For the purpose of this Section 3.2:

	 	 	 
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	 	–  	“Target Situation” shall mean the situation defined in Section 3.2.1 where FT
shall only have their FT customer traffic on the MLN Transit Switches, subject to the
services exclusions referred to in this Section 3.2.1.5;
	 
	 	–  	“Transition Period” shall mean the period from the Effective Date until the
Target Situation is reached.

	3.2.1.  Target Situation
	 
	3.2.1.1.  	Service Description

3.2.1.1.1. Post Transition Period, Equant shall be responsible for managing the FT customer
traffic from the input ports to the output ports of each of the MLN Transit Switches, and
connected to the FT Network.

3.2.1.1.2. Equant will provide ports capacity utilization reports on a monthly basis for
any ports connected to MLN backbone trunks that carry FT and Equant customer traffic,
showing the split of utilization between FT and Equant customer traffic.

3.2.1.1.3. FT shall be responsible for all costs and associated management for access and
transmission between MLN Equipment ports and the FT Network and FT customers.

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	3.2.1.3.  	Operating Model

3.2.1.3.1. FT will provide usage forecasts based on the number of installed and
disconnected connections, with the first forecast being provided before the Effective Date,
to enable Equant to dimension the MLN Equipment and assess the workload. FT undertakes to
provide forecasts on a regular basis to be defined in the Agreement for Switched Voice
Services.

3.2.1.3.2. Equant shall identify a single point of contact, who will act as the carrier
business support coordinator for the implementation of FT orders.

	3.2.1.4.  	Service Level Agreements (SLAs)

Equant will provide SLAs relating to the Switched Voice Services including port
availability, Guaranteed Time to Restore, Time to connect, and Time to disconnect. The
Parties shall exercise their best efforts to have these SLAs and the associated reporting
agreed before the Effective Date. These SLAs and the associated reporting will be detailed
in the Agreement for Switched Voice Services.

	 	 	 
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	3.2.1.5.  	Switched Voice Services Exclusions

3.2.1.5.1. Equant will not provide FT customer specific best cost routing.

3.2.1.5.2. Equant will not provide call detail records for any FT customer traffic.

3.2.1.5.3. Equant will not provide any SCP services to any FT customer traffic.

	3.2.1.6. Switched Voice Service Restrictions

The following restrictions shall apply to the Switched Voice Services:

3.2.1.6.1. Capacity Management Rules:

	 	(a)  	In the event that the switching capacity or the port capacity in any MLN
Equipment requires to be increased for Equant customers then Equant shall have the
right to request that FT reduces FT customers’ traffic capacity until the FT customer
traffic is nil. Notwithstanding the above, if FT still desires to utilize the MLN
switch capacity, then FT shall fund all such capacity increases at cost plus 8% and
such capacity funded by FT will be reserved for FT until the decommissioning of the
MLN switch as per Section 3.1. (for purposes of clarity such cost includes capital
expenditure and operational costs required to increase the capacity of the switch to
meet the FT requirements.)
	 
	 	(b)  	Equant may, in its sole discretion, increase the capacity on a MLN switch to
meet its customers’ demand and may allow FT to continue to use some switching
capacity.

3.2.1.6.2. Functionality Rules:

Equant shall be allowed to change, increase or decrease, the functionality of
the MLN Equipments in order to meet the needs of the Equant customers. Equant
shall not be obliged to alter the functionality of the MLN Equipment in order to
meet the requirements of FT’s customers. Equant will in good faith work with FT
to ensure any changes in functionality are not customer disruptive. In the
event that FT requests changes to the functionality of the MLN Equipment, Equant
will work in good faith with FT to meet FT’s needs and FT will be obligated to
fund any such changes done on their behalf at cost plus 8%.

	 	 	 
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	3.2.2.  	Transition Period

This Section describes the relationship during the Transition Period.

	3.2.2.1.  	Description

As of the Effective Date, FT shall use the MLN Equipment for its own customers, and shall
proceed with the migration of its customer to the 4 MLN Transit switches.

	3.2.2.2.  	Delay

FT and Equant shall work together in good faith to effect a transition to the Target
Situation described in Section 3.2.1 prior to December 31, 2004.

If the Target Situation has not yet been fully established by December 31, 2004, then
either Party may request that the parties shall meet in accordance with the dispute
resolution provision set forth in Section 13.1, no later than January 31, 2005, to agree
appropriate steps to accelerate the transition, and to determine if this delay in getting
to the Target Situation has resulted in any negative P&L impact for Equant relative to the
2005 Business Plan Scenario, and, if due to FT, whether any compensation shall be due to
Equant for this impact.

	3.2.2.3.  	Pricing / Billing

FT shall be liable for the cost of transmission upon the Effective Date. The pricing for
the Switched Voice Services shall be in accordance with Section 3.2.1.2 above, during the
Transition Period.

	3.2.2.4.  	Inventory

Both parties will agree on a list of all the MLN Equipment ports (shared and dedicated,
customer side and interco side and backbone side) used for FT customer traffic as soon as
practically possible and in any event before the Effective Date. Upon the Effective Date,
this list shall be updated by the Equant SPOC on a monthly basis.

	3.2.2.5.  	Switched Voice Services Operating Model

  The operating model during the Transition Period will be the same as for the Target
Situation (Section 3.2.1.3).

  During the Transition Period, the customer support model will be the same as before the
Effective Date.

	 	 	 
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	3.2.2.6.  	Switched Voice Services Troubleshooting / SLAs

The SLAs during the Transition Period will be the same as for the Target Situation (Section
3.1.2.1.4).

	4.  	RESPONSIBILITIES OF FT (“VOICE RELATED FT SERVICES”)

FT will provide the Voice Related FT Services to Equant for the benefit of Equant under the
Agreement for the Supply of Support Services for Switched Voice, all as of the Effective
Date. FT will support its customers using its own resources as well as the services provided
by Equant under this UMBRELLA AGREEMENT.

	4.1.  	Provision of operational and engineering services (“Support Services”)
	 
	4.1.1.  	Scope of the Support Services

	4.1.1.1.  	General description

4.1.1.1.1. FT shall provide engineering and operation services to Equant to support
the operation of the MLN as further defined in the Agreement for Support Services for
Switched Voice.

4.1.1.1.2. The Support Services will consist in engineering & operational recommendations.
Therefore, investment decisions and operational governance, such as, but not limited to,
P&L or Quality of Service impacting decisions (routing policy, echo cancellation,
compression, BCR management, etc...) will be under the responsibility of Equant.
Operational governance will be secured by providing access to Equant to network
monitoring/reporting systems and tools, and read write access capability to the MLN
switches subject to the provisions below.

4.1.1.1.3. Support Services will be provided by specialized FT teams that will work with
Equant’s field operations teams.

	4.1.1.2.  	Engineering services:

	 	–  	For the MLN TDM switching (Nortel and Ericsson), FT will provide technical support
in particular studies, quotation, business cases, implementation coordination, supplier
interface, maintenance contract negotiation, lab tests;
	 
	 	–  	For SS7 engineering, FT will provide SS7 MLN design and policy recommendations;
	 
	 	–  	For numbering plan and routing policy and QoS policy, FT will provide studies,
routing policy and recommendations as to the impact on the invoicing chain, the network
architecture for products, the network QoS policy and the technical interconnect policy;

	 	 	 
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	 	–  	For the mutualised Information Systems (Networks, Océane, Descartes, GFC,
Steleus,...), FT will provide Information Systems network evolution management
recommendations;
	 
	 	–  	For INAP evolution/issues for SCP interconnection, FT will provide support
services;
	 
	 	–  	For the Intelligent Network services, FT will provide SSP/STP support and design
services;
	 
	 	–  	In countries where communications security intercepts and number portability are
implemented, FT will provide engineering design, implementation and support for the MLN;
	 
	 	–  	FT will provide project management services pursuant to project forecasts provided
by Equant twice a year; this service includes at least MLN decommissioning.

	4.1.1.3.  	Operational services:

	 	–  	In relation to MLN switches and backbone transmission capacity, FT will provide
on-going support including management of network resources e.g. equipment, international
public routing plans, DCME, Echo Cancellers, backbone trunks and 3rd party
service providers supervision;

	 	–  	In relation to the supervision of MLN switches/ports (including access ports)
24/7, FT will provide alarms and fault messages acknowledgement, trouble shooting
management and planned works coordination and management;
	 
	 	–  	In relation to Ericsson MLN Equipment’s first line, second line network and
end-to-end service support and skill centre, FT will provide maintenance contract
management, trouble shooting management, Lab test O&M, relationship management ;
	 
	 	–  	For MLN traffic supervision 24/7, FT will provide re-routing management, ASR
supervision, reporting;
	 
	 	–  	For MLN SS7 signaling, FT will provide 24/7 operation, supervision and
support;
	 
	 	–  	In relation to revenue Assurance and Fraud management for MLN Voice and SS7
traffics, FT will provide support services;
	 
	 	–  	FT will provide feasibility study, provisioning, production, delivery, after
sales and decommissioning processes management for the MLN;
	 
	 	–  	FT will provide KPIs, QoS report services for the MLN;
	 
	 	–  	FT will provide MLN customer or network migration support services upon
Equant’s request;
	 
	 	–  	Upon Equant request, FT shall provide effective fault management support at
the levels in effect at the Signature Date.

	   	Between the Effective Date and the effective transfer of operational resources to Equant,
which shall happen at the latest on December 31, 2004, FT shall provide the following
services in addition to the above:

	 	–  	Voice BCR management and MLN planning;

	 	 	 
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	 	–  	IS network tools management including maintenance contracts (hardware,
software and data): BCRSS;

	 	–  	routing management;
	 
	 	–  	In relation to Nortel MLN Equipment’s first line, second line network and
end-to-end service support and skill centre, FT will provide maintenance contract
management, trouble shooting management, Lab test O&M, relationship management.

4.1.1.4. In the event Equant request FT to provide additional services and such additional services
requested cause FT to incur additional costs, then the Parties shall discuss and agree such
additional services and the relating additional remuneration to FT.

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	4.2.  	Provision of Off-net Call Termination Services on the FT Network

FT will provide Off-net Call Termination Services to Equant on a non-exclusive basis from the
FT Network Access POPs defined in Annex 2.

	4.2.1.  	Scope

The Off-net Call Termination Service provided is off-net call termination for anywhere in the
world for traffic delivered by Equant to FT Network Access POPs.

	4.2.2.  	Pricing

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4.2.3. Invoicing

FT will invoice Equant on a monthly basis, hard copy format. FT shall study with Equant FT’s
sending electronic copies of the invoices before the end of 2004. FT will provide a single
invoice detailing reports including number of minutes per destination. The parties will
discuss additional billing information that Equant may require and FT will exercise
reasonable efforts to meet such requests. Details of the invoicing mechanism shall be further
described in the Agreement for Support Services for Switched Voice.

	 	 	 
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	4.3.  	Provision of Switching Capacity on the Bagnolet Switch

	4.3.1.  	Service Description

4.3.1.1. FT owns a switch in Bagnolet (CIAB, Niv 2, 7 avenue Gambetta, Bagnolet, 93, France) (the
“Bagnolet Switch”) which forms part of the MLN as it is connected to Equant customers and service
platforms, but which is not totally dedicated to the MLN as FT uses it for other services.

4.3.1.2. As of the Effective Date, FT will provide switching capacity on the Bagnolet Switch for
the MLN traffic for the use of Equant customers and service platforms.

4.3.1.3. FT is responsible for managing the MLN traffic from the input ports to the output ports of
the Bagnolet Switch.

	4.3.1.4.  	FT’s management includes:

	 	–  	allocation, installation/dismantling of ports,
	 
	 	–  	maintenance of the SS7 interconnection to the MLN,
	 
	 	–  	supervision and maintenance,
	 
	 	–  	execution of any required customer related routing table updates.

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	4.3.3.  	SLAs

FT will provide SLAs for the switching capacity on the Bagnolet Switch including port
availability (standard SLA for traffic and premium SLA for signaling, if feasible),
Guaranteed Time to Restore, Lead Time to connect, and Lead Time to disconnect. The parties
shall exercise their best efforts to have these SLAs and the associated reporting agreed
before the Effective Date. These SLAs and the associated reporting shall be detailed in the
Switched Voice Support Service Agreement before the effective date.

	4.3.4.  	Invoicing

The invoicing will be on a monthly basis, provided to Equant by the 15th day of
the month and based on the number of minutes of use of the Bagnolet Switch in the
immediately prior month.

	4.3.5.  	Operating Model

Equant will provide traffic forecasts, with the first forecast being provided before the
Effective Date, to enable FT to dimension the Bagnolet Switch and assess the workload.
Equant undertakes to provide forecasts on a regular basis to be defined in the Agreement
for Support Services for Switched Voice.

	 	 	 
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4.3.6. Restrictions to the Switching Capacity service on the Bagnolet Switch

     The following restrictions shall apply to the service:

4.3.6.1. Capacity Management Rules:

	 	(a)  	In the event that the switching capacity or the port capacity in the Bagnolet
Switch requires to be increased for Equant customers then Equant shall fund all such
capacity increases at cost plus 8% (for purposes of clarity this includes capital
expenditure and operational costs required to increase the capacity of the switch to
meet the Equant requirements.)
	 
	 	(b)  	FT may, in its sole discretion, increase the capacity on the Bagnolet Switch
to meet its customers’ demand.

4.3.6.2. Functionality Rules:

FT shall be allowed to change, increase or decrease, the functionality of the Bagnolet
Switch in order to meet the needs of the FT customers. FT shall not be obliged to alter the
functionality of the Bagnolet Switch in order to meet the requirements of Equant’s
customers. FT will in good faith work with Equant to ensure any changes in functionality
are not customer disruptive. In the event that Equant requests changes to the functionality
of the Bagnolet Switch, FT will work in good faith with Equant to meet Equant’s needs and
Equant will be obligated to fund any such changes done on their behalf at cost plus 8%.

4.4. Provision of transmission capacity for voice services

4.4.1. Service Description

4.4.1.1. FT will provide transmission capacity to Equant to connect the MLN switches between and
amongst them, and to connect them to the FT Network. This transmission capacity will be provided
between the POPs listed in Annex 3 (the “FT Transmission POPs”).

4.4.1.2. The transmission capacity will be provided pursuant to the Global Transmission Agreement,
using in particular the existing benchmark and pricing mechanism, and SLAs.

4.4.1.3. Where applicable, the Global Transmission Agreement will be supplemented in the Agreement
for Support Services for Switched Voice to provide for capacity
levels or functionalities not included in the Global Transmission Agreement.

 

			
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4.4.1.4. Echo cancellers and compression equipment have been and will be provided by Equant and
will remain under Equant’s responsibility.

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	5.  	ACTIVITIES REQUIRING JOINT PARTICIPATION OF FT AND EQUANT — PURCHASING OF OFF-NET CALL
TERMINATION ON THE MLN
	 
	5.1.  	  Scope

During a transition period from the Effective Date to the end of 2004, Equant and FT will
both purchase off-net call termination on the MLN for their combined needs.

	5.2.  	  Operating Model

Each party remains responsible for the management of their own purchasing staff and the costs
of such staff.

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	6.  	  OTHER TRANSITIONAL ACTIVITIES

The assumption of responsibility for the MLN by Equant involves certain Transition Activities to
ensure proper ownership and accountability.

6.1.   Human Resources

	6.1.1.  	  The parties have agreed a transition plan which describes how the Parties will execute their
obligations described herein with regard to staff who provide Services hereunder (The “HR
Transition Plan”). The HR Transition Plan is attached at Annex 4

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	6.2.  	  Third Party Contracts

	6.2.1.  	  In general, all third party contracts for circuits, maintenance, or that support any of
Equant’s obligations herein shall be entered into by Equant, or if that is not currently the
case, assigned to Equant at the next possible opportunity. Any third party contracts in
support of FT’s obligations herein shall be in the name of FT and if they are not currently,
shall be assigned to FT at the next possible opportunity.

	6.2.2.  	  For the contracts relating to off-net call termination purchasing currently held by FT, the
Parties will work together as of the Effective Date, to have the contracts assigned to Equant
at the latest at the end of January, 2005.

7.   FINANCIAL COMMITMENTS

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	7.1.  	  Auditability

FT shall have the right, through an independent auditor retained by it, to inspect records of
Equant for the sole purpose of verifying the accuracy of the statements made by Equant with respect
to the provisions of this agreement, provided that Equant shall be subject to no more than two such
audits per year. Audits shall be allowed only after the giving of reasonable notice and only where
an audit is conducted at a reasonable time. Any agent who may conduct an audit on behalf of FT
shall execute a confidentiality undertaking if required by the party whose records are being
audited.

8.   CONDITIONS PRECEDENT TO THE EFFECTIVE DATE

	8.1.  	  Approval of Equant’s Management Board and Independent Directors, pursuant to the process set
forth in the Contribution Agreement and Equant’s Articles of Association, no later than July
31, 2004.

	9.  	  ASSIGNMENT

Neither this UMBRELLA AGREEMENT, nor the rights, obligations or duties of Equant

 

			
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under this UMBRELLA AGREEMENT may be assigned to any third party without the prior written consent
of FT. In any case, Equant shall continue to be liable towards FT for the performance, by its
assignee, of the obligations arising from this UMBRELLA AGREEMENT and the Services Agreements.
Equant shall be entitled to subcontract any of its obligations to sub-contractors, provided that
Equant shall be liable for the acts and omissions of any sub-contractor.

10.   TERM AND TERMINATION

	10.1.  	  This UMBRELLA AGREEMENT becomes effective on the Signature Date, and subject to earlier
termination in accordance with Section 10.2 below, shall remain in force for an unlimited
period and, in any event, until all of the Transition Activities and Financial Commitments
have been completed.

	10.2.  	  Either Party may terminate this UMBRELLA AGREEMENT with immediate effect by giving notice to
the other Party, if the other Party, in material breach of this UMBRELLA AGREEMENT if the
breach is capable of remedy, has failed to remedy the breach within 30 working days of notice
of the breach having being given by the non-defaulting Party.

	10.3.  	  Either Party shall be entitled to terminate this UMBRELLA AGREEMENT at its discretion on 60
days prior notice to the other Party, if FT’s interest in the voting stock of Equant falls
below 34%.

	11.  	   RELATIONSHIP OF THE PARTIES

The UMBRELLA AGREEMENT is made between independent contractors and is not intended to create, nor
shall they be construed to be, a partnership, franchise, or other form of business relationship,
except as otherwise provided herein. No Party shall have, nor hold itself out as having, any right,
power or authority to assume, create, or incur any expenses, liability, or obligation on behalf of
another Party, except as expressly provided in this UMBRELLA AGREEMENT or the Services Agreements.

	12.  	   CONFIDENTIALITY

	12.1.  	  All Confidential Information shall be deemed the proprietary and confidential information of
the disclosing Party and shall be used by the other Party only in accordance with this
UMBRELLA AGREEMENT. Each Party shall be responsible for the performance by its respective
Affiliates of the obligations under this Section 12 with respect to Confidential Information.
	 
	   	 

			
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	12.2.  	   With respect to all such Confidential Information, the receiving Party shall:

	 	(a)  	receive and hold such Confidential Information in confidence and in the same
manner the receiving Party treats its own proprietary or confidential information;
	 
	 	(b)  	restrict disclosure of such Confidential Information solely to those
employees, advisers and consultants with a need to know in connection with the
performance of this UMBRELLA AGREEMENT or the business of the Parties and not make any
further use or disclosure without the prior written permission of the disclosing
Party;
	 
	 	(c)  	advise those employees, advisers and consultants, given access to such
Confidential Information of their obligations with respect to such information; and
	 
	 	(d)  	not copy or reproduce any of such Confidential Information except to the
extent necessary to perform this UMBRELLA AGREEMENT.

	12.3.  	   If either Party becomes subject to a mandatory requirement of any judicial, governmental or
regulatory authority having jurisdiction over such Party to disclose Confidential Information,
such Party shall give the Party which disclosed such Confidential Information notice as soon
as practicable of such disclosure obligation and shall take any reasonable and lawful steps to
limit the amount of Confidential Information to be disclosed.

	12.4.  	   All such Confidential Information disclosed by any Party to the other in tangible form
shall, upon the request of the disclosing Party, and in any event upon termination of this
UMBRELLA AGREEMENT, be returned to it or destroyed.

	12.5.  	   Neither Party shall be liable to the other in damages for inadvertent, accidental,
unauthorized, or mistaken disclosure by its employees of Confidential Information obtained
pursuant to this UMBRELLA AGREEMENT.

	12.6.  	   The provisions of this Section 12 shall survive the termination or expiration of this
UMBRELLA AGREEMENT for a period of 5 years following such termination or expiration.

	12.7.  	   No Party shall make any public announcement with respect to any UMBRELLA AGREEMENT, without
the prior written consent of FT and Equant.

	13.  	  GOVERNING LAW AND DISPUTE RESOLUTION

	13.1.  	    As long as the two Parties remains members of France Telecom’s Group (as defined in Section
10.3), any dispute between the Parties
	 
	   	 

			
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relating to this UMBRELLA AGREEMENT will first be submitted in writing to a panel consisting
of one-senior executive of each of FT and Equant, who will promptly meet and confer in an
effort to resolve such dispute. Each Party’s executives will be identified by notice to the
other Party, and may be changed at any time thereafter also by notice to the other Party. Any
decisions of the executives jointly agreed to in writing will be final and binding on the
Parties. In the event the executives are unable to resolve any dispute within thirty (30)
days after submission to them, either party shall then refer such dispute to their respective
Chief Executive Officers. If there are two different Chief Executive Officers and should
these Chief Executive Officers be unable to resolve the dispute within sixty (60) days after
submission to them, such dispute shall be submitted to a conciliator appointed jointly by
these Chief Executive Officer(s).

	13.2.  	   However if one Party cease to be a member of France Telecom’s Group (as defined in Section
10.3), then any dispute under this UMBRELLA AGREEMENT arising thereafter, or any prior dispute
not resolved on the date of change of control, shall be submitted to the exclusive
jurisdiction of the Courts of Paris, France, unless otherwise agreed between the Parties.

	13.3.  	   This Framework Agreement shall be governed by and construed in accordance with French law,
without regard to its principles of conflicts of laws.

	14.  	   ENTIRE OBLIGATION

	14.1.  	   This UMBRELLA AGREEMENT does not obligate either Party to any financial or legal obligations
other than those specified herein.

	14.2.  	   UMBRELLA AGREEMENT constitutes the entire agreement between the Parties with respect to
the subject matter dealt with in this UMBRELLA AGREEMENT and supersede all prior oral or
written agreements, representations (innocent or negligent), statements, negotiations,
understandings, proposals relating to such subject matter between the Parties.
	 
	   	 

			
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	15.  	   GENERAL

	15.1.  	    Notices:- All notices, demands, or requests which may be given by any Party to the other
Party shall be in writing in the English language and shall be deemed to have been duly given
(a) on the date of dispatch when delivered in person; (b) one day after dispatch when sent by
overnight courier, maintaining records of receipt; and (c) on the date of dispatch when sent
by registered mail or facsimile during normal business hours with telephone confirmation of
receipt and addressed as follows:

	15.1.1.  	   If to Equant:
	 
	   	Attention: General Counsel
	 
	15.1.2.  	    If to FT:

	 	   	Attention: FT/Networks, Carriers & IT Executive Vice President

Attention: FT/Enterprise Communication Services Executive Vice President

With a copy to:

FT/NC&IT Legal Department

	15.1.3.  	    The address to which such notices, demands, request, elections, or other communications
given by either Party may be changed by written notice given by such Party to the other Party
pursuant to this Section.

	15.2.  	    No Waivers:- No waiver of any provisions of the UMBRELLA AGREEMENT and no consent to any
default under this UMBRELLA AGREEMENT shall be effective unless the same shall be in writing
and signed by or on behalf of the Party against whom such waiver or consent is claimed. No
failure of either Party to strictly enforce any term, right, or conditions of the UMBRELLA
AGREEMENT shall be construed as a waiver of such term, right or condition.

	15.3.  	    Invalidity:- If any provision of this UMBRELLA AGREEMENT or any part thereof, is held
invalid or unenforceable, the remainder of this UMBRELLA AGREEMENT will not be affected
thereby and each remaining provision or part thereof will be valid and enforceable to the full
extent permitted by law.

	15.4.  	    Equitable Relief:- Either Party may seek injunctive or other equitable relief to remedy any
actual or threatened dispute.

	15.5.  	    Counterparts:- This UMBRELLA AGREEMENT may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same
instrument.

Accordingly, the Parties agree as of the Effective Date:-

 

			
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For Equant:-

	 	 	 
	

	 	 
	Name: 
 Peter Cummings
	 	 
	 
	 	 
	Title: Director,
ENSIL
	 	 
	 
	 	 
	Date :
	 	 

For France Telecom:-

	 	 	 
	

	 	 
	Name:
 Jean-Philippe Vanot
	 	 
	 
	 	 
	Title: 
Executive Vice-President NC&IT
	 	 
	 
	 	 
	Date :
	 	 
	 
	 	 

			
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Annex 2 - FT Network Access POPS

	 	 	 	 	 
	 	 	 
	 	Name
	 	 	 
	 	 	 
	 	Archway
	 	 	 
	 	Telehouse
	 	 	 
	 	Geneva
	 	 	 
	 	Paris Bagnolet
	 	 	 
	 	Stockholm
	 	 	 
	 	Amsterdam
	 	 	 
	 	Brussels
	 	 	 
	 	Madrid
	 	 	 
	 	Vienna
	 	 	 
	 	FrankFurt
	 	 	 
	 	Oslo
	 	 	 
	 	Milano
	 	 	 
	 	Oak Hill
	 	 	 
	 	Tokyo
	 	 	 
	 	 	 

This list may be changed by FT anytime, with a prior notice to Equant

 

			
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Annex 3 - FT Transmission POPs

	 	 	 	 	 

	 	 	 
	 	Name
	 	 	 
	 	 	 
	 	Archway
	 	 	 
	 	Telehouse
	 	 	 
	 	Geneva
	 	 	 
	 	Paris Bagnolet
	 	 	 
	 	Stockholm
	 	 	 
	 	Amsterdam
	 	 	 
	 	Brussels
	 	 	 
	 	Madrid
	 	 	 
	 	Vienna
	 	 	 
	 	FrankFurt
	 	 	 
	 	Oslo
	 	 	 
	 	Milano
	 	 	 
	 	Oak Hill
	 	 	 
	 	Tokyo
	 	 	 
	 	 	 
	 	 
	 	 	 
	 	Lisbon
	 	 	 
	 	Copenhagen
	 	 	 
	 	Luxembourg
	 	 	 
	 	Zurich
	 	 	 
	 	Toronto
	 	 	 
	 	Hong Kong
	 	 	 
	 	Taïpeï
	 	 	 
	 	Singapore
	 	 	 
	 	Sydney
	 	 	 
	 	 	 

This list may be changed by FT anytime, with a prior notice to Equant

 

			
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Annex 6 - Decommissioning Plan

To be provided by Equant. The Parties shall exercise their best efforts to agree the content of the
Decommissioning Plan before the Effective Date

 

			
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