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Exhibit 10.1  

	 	 	THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY
USING AIA DOCUMENT D401.
	

 	
 	

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©1997 AIA®

AIA DOCUMENT B151-1997

ABBREVIATED OWNER-ARCHITECT

AGREEMENT
	

 	
 	

The American Institute of Architects

1735 New York Avenue, N.W.

Washington, D.C. 20006-5292
	

 	
 	

 

1997 Edition - Electronic Format  

AIA Document B151 - 1997  

 
 

Abbreviated Standard Form of Agreement Between Owner and Architect    
  

AGREEMENT made as of the 29th of May in the year Two Thousand Two
 (In words, indicate day, month and year)

BETWEEN the Architect's client identified as the Owner:
 (Name, address and other information)

QAD, Inc.

6450 Via Real

Carpinteria, CA 93013 

The
Owner has retained Paul Franz Construction, Inc. to act as its representative. 

and
the Architect:
 (Name, address and other information)

Lenvik & Minor Architects

A California Corporation

315 West Haley Street

Santa Barbara, CA 93101 

For
the following Project:
 (Include detailed description of Project)

Proposed R & D office Park for:

QAD Inc. - Phase A (Phase II)

2111 Ortega Hill Road

Summerland, CA 93067

APN: 005-110-001

A one-story "shell" office building with partial basement of approximately 87,000 square feet. 

The
Owner and Architect agree as follows: 

ARTICLE 1    ARCHITECT'S RESPONSIBILITIES  

1.1    The
services performed by the Architect, Architect's employees and Architect's consultants shall be as enumerated in Articles 2, 3 and 12. 

©
1974, 1978, 1977, 1987, © 1997 by The American Institute of Architects. Reproduction of the material herein or substantial quotation of its provisions without written
permission of the AIA violates the copyright laws of the United States and will subject the violator to legal prosecution. WARNING: Unlicensed photocopying violates U.S. copyright laws and will
subject the violator to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced in accordance with your license without violation until the date
of expiration as noted below. User Document: 0203 aia b151.aia—5/29/02. AIA License Number 1003547, which expires on 2/28/2003. 

1

  

1.2    The
Architect's services shall be performed as expeditiously as is consistent with professional skill and care the orderly progress of the Project. The Architect shall submit for the
Owner's approval a schedule for the performance of the Architect's services which may be adjusted as the Project proceeds. This schedule shall include allowances for periods of time required for the
Owner's review and for approval of submissions by authorities having jurisdiction over the Project. Time limits established by this schedule approved by the Owner shall not, except for reasonable
cause, be exceeded by the Architect or Owner. 

1.3    The
Architect shall designate a representative authorized to act on behalf of the Architect with respect to the Project. 

1.4    The
services covered by this Agreement are subject to the time limitations contained in Subparagraph 11.5.1. 

1.5    The
Architect shall communicate with the Owner's Representative on all aspects of the Project as determined by the Owner and as provided for in Article 4, however, the
Architect shall have the right to communicate directly with the Owner. Architect's billings and requests for information shall be directed through the Owner's Representative. The Owner's
Representative shall receive all submittals, requests for information, change order requests and application and certificates for payment from the Contractor and shall forward them to the Architect.
Owner's instructions to the Architect shall be through the Owner's Representative; provided that in the event of a conflict between instructions from the Owner and instructions from the Owner's
Representative, the instructions from the Owner shall govern and prevail. 

ARTICLE 2    SCOPE OF ARCHITECT'S BASIC SERVICES  

2.1    DEFINITION 

The
Architect's Basic Services consist of those described in Paragraphs 2.2 through 2.6 and any other services identified in Article 12 as part of Basic Services. 

2.3    DESIGN DEVELOPMENT PHASE 

2.3.2    The
Architect shall further develop the Design Development Drawings which have been prepared by Andy Neumann Architect. Those drawings shall further describe the character and
detail of the building. The Architect will coordinate and manage the Owner's Consultants which include, Civil, Structural, Mechanical, Electrical and Plumbing Engineers and Landscape Architect. The
Architect will work with the Owner's General Contractor (Melchiori Construction Co.) on the project construction budget and scheduling. 

2.3.3    The
Architect will work with Andy Neumann Architect to faithfully interpret his design intent. The Owner shall retain Andy Neumann Architect as reasonably required to assist the
Architect in the performance of his basic services and shall use good faith efforts to cause Andy Neumann Architect to as expeditiously as possible, provide the Architect with all details and designs
required to complete the building as envisioned by Andy Neumann Architect. 

Copyright
1974, 1978, 1977, 1987, © 1997 by The American Institute of Architects. Reproduction of the material herein or substantial quotation of its provisions without written
permission of the AIA violates the copyright laws of the United States and will subject the violator to legal prosecution. WARNING: Unlicensed photocopying violates U.S. copyright laws and will
subject the violator to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced in accordance with your license without violation until the date
of expiration as noted below. User Document: aia b151.aia—2/8/2002. AIA License Number 1003547, which expires on 2/28/2002. 

2

 

2.4    CONSTRUCTION DOCUMENTS PHASE 

2.4.1    Based
on the approved Design Development Documents and any further adjustments in the scope or quality of the Project authorized by the Owner, the Architect shall prepare, for
approval by the Owner, Construction Documents consisting of Drawings and Specifications setting forth in detail the requirements for the construction of the Project. 

2.4.1.1    The
Architect will coordinate and manage the Owner's Consultants so that their work is made a part of the architectural construction documents. 

2.4.2    The
Architect shall assist the Owner in the preparation of the necessary bidding information, bidding forms, the Conditions of the Contract, and the form of Agreement between the
Owner and Contractor. 

2.4.4    The
Architect shall assist the Owner in connection with the owner's responsibility for filing documents required for the approval of governmental authorities having jurisdiction
over the Project. 

2.5    BIDDING OR NEGOTIATION PHASE  

The Architect will assist the Owner's General Contractor in his obtaining bids as part of his negotiated construction contract with the Owner. 

2.6    CONSTRUCTION PHASE—ADMINISTRATION OF THE CONSTRUCTION CONTRACT 

2.6.1    The
Architect's responsibility to provide Basic Services for the Construction Phase under this Agreement commences with the award of the initial Contract for Construction and
terminates at the earlier of the issuance to the Owner of the final Certificate for Payment or 60 days after the date of Substantial Completion of the Work. See Article 12.7. 

2.6.2    The
Architect shall provide administration of the Contract for Construction as set forth below and in the edition of AIA Document A201, General Conditions of the Contract for
Construction, current as of the date of this Agreement, unless otherwise provided in this Agreement. Modifications made to the General Conditions, when adopted as part of the Contract Documents, shall
be enforceable under this Agreement only to the extent that they are consistent with this Agreement or approved in writing by the Architect. 

2.6.3    Duties,
responsibilities and limitations of authority of the Architect under this Paragraph 2.6 shall not be restricted, modified or extended without written agreement of the
Owner and Architect. 

2.6.3.1    See
Article 1.5 for Architect's responsibility to act on the Owner's behalf only through the Owner's Representative. 

2.6.4    The
Architect shall be a representative of and shall advise and consult with the Owner during the administration of the Contract for Construction. The Architect shall have authority
to act on behalf of the Owner only to the extent provided in this Agreement unless otherwise modified by written amendment. 

2.6.5    The
Architect, as a representative of the Owner, shall visit the site at intervals appropriate to the stage of the Contractor's operations, or as otherwise agreed by the Owner and
the Architect in Article 12, (1) to become generally familiar with and to keep the Owner informed about the progress and quality of the portion of the Work completed, (2) to
endeavor to guard the Owner against defects and deficiencies in the Work, and (3) to determine in general if the Work is being performed in a manner indicating that the Work, when fully
completed, will be in accordance with the Contract Documents. However, the Architect shall not be required to make exhaustive or continuous on-site inspections to check the quality or
quantity of the Work. The Architect shall 

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neither have control over or charge of, nor be responsible for, the construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with the
Work, since these are solely the Contractor's rights and responsibilities under the Contract Documents. 

2.6.6    The
Architect shall report to the Owner known deviations from the Contract Documents. However, the Architect shall not be responsible for the Contractor's failure to perform the
Work in accordance with the requirements of the Contract Documents. The Architect shall be responsible for the Architect's negligent acts or omissions, but shall not have control over or charge of and
shall not be responsible for acts or omissions of the Contractor, Subcontractors, or their agents or employees, or of any other persons or entities performing portions of the Work. 

2.6.7    The
Architect shall at all times have access to the Work wherever it is in preparation or progress. 

2.6.8    Except
as otherwise provided in this Agreement or when direct communications have been specially authorized, the Owner shall endeavor to communicate with the Contractor through the
Architect about matters arising out of or relating to the Contract Documents. Communications by and with the Architect's consultants shall be through the Architect. 

2.6.9    CERTIFICATES FOR PAYMENT 

2.6.9.1    The
Architect shall review and certify the amounts due the Contractor and shall issue certificates in such amounts. 

2.6.9.2    The
Architect's certification for payment shall constitute a representation to the Owner, based on the Architect's evaluation of the Work as provided in Subparagraph 2.6.5
and on the data comprising the Contractor's Application for Payment, that the Work has progressed to the point indicated and that, to the best of the Architect's knowledge, information and belief, the
quality of the Work is in accordance with the Contract Documents. The foregoing representations are subject (1) to an evaluation of the Work for conformance with the Contract Documents upon
Substantial Completion, (2) to results of subsequent tests and inspections, (3) to correction of minor deviations from the Contract Documents prior to completion, and (4) to
specific qualifications expressed by the Architect. 

2.6.9.3    The
issuance of a Certificate for Payment shall not be a representation that the Architect has (1) made exhaustive or continuous on-site inspections to check
the quality or quantity of the Work, (2) reviewed construction means, methods, techniques, sequences or procedures, (3) reviewed copies of requisitions received from Subcontractors and
material suppliers and other data requested by the Owner to substantiate the Contractor's right to payment, or (4) ascertained how or for what purpose the Contractor has used money previously
paid on account of the Contract Sum. 

2.6.10    The
Architect shall have authority to reject Work that does not conform to the Contract Documents. Whenever the Architect considers it necessary or advisable, the Architect shall
have authority to require inspection or testing of the Work in accordance with the provisions of the Contract Documents, whether or not such Work is fabricated, installed or completed. However,
neither this authority of the Architect nor a decision made in good faith either to exercise or not to exercise such authority shall give rise to a duty or responsibility of the Architect to the
Contractor, Subcontractors, material and equipment suppliers, their agents or employees or other persons or entities performing portions of the Work. 

2.6.11    The
Architect shall review and approve or take other appropriate action upon the Contractor's submittals such as Shop Drawings, Product Data and Samples, but only for the limited
purpose of checking for conformance with information given and the design concept expressed in 

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the Contract Documents. The Architect's action shall be taken with such reasonable promptness as to cause no delay in the Work or in the activities of the Owner, Contractor or separate contractors,
while allowing sufficient time in the Architect's professional judgment to permit adequate review. Review of such submittals is not conducted for the purpose of determining the accuracy and
completeness of other details such as dimensions and quantities, or for substantiating instructions for installation or performance of equipment or systems, all of which remain the responsibility of
the Contractor as required by the Contract Documents. The Architect's review shall not constitute approval of safety precautions or, unless otherwise specifically stated by the Architect, of any
construction means, methods, techniques, sequences or procedures. The Architect's approval of a specific item shall not indicate approval of an assembly of which the item is a component. 

2.6.12    If
professional design services or certifications by a design professional related to systems, materials or equipment are specifically required of the Contractor by the Contract
Documents, the Architect shall specify appropriate performance and design criteria that such services must satisfy. Shop Drawings and other submittals related to the Work designed or certified by the
design professional retained by the Contractor shall bear such professional's written approval when submitted to the Architect. The Architect shall be entitled to rely upon the adequacy, accuracy and
completeness of the services, certifications or approvals performed by such design professionals. 

2.6.13    The
Architect shall prepare Change Orders and Construction Change Directives, with supporting documentation and data if deemed necessary by the Architect as provided in
Subparagraphs 3.1.1 and 3.3.3, for the Owner's approval and execution in accordance with the Contract Documents, and provided the Architect periodically notifies the Owner's Representative, the
Architect may authorize minor changes in the Work not involving an adjustment in the Contract Sum or an extension of the Contract Time which are consistent with the intent of the Contract Documents. 

2.6.14    The
Architect shall conduct inspections to determine the date or dates of Substantial Completion and the date of final completion, shall receive from the Contractor and forward to
the Owner, for the Owner's review and records, written warranties and related documents required by the Contract Documents and assembled by the Contractor, and shall issue a final Certificate for
Payment based upon a final inspection indicating the Work complies with the requirements of the Contract Documents. 

2.6.15    The
Architect shall interpret and decide matters concerning performance of the Owner and Contractor under, and requirements of, the Contract Documents on written request of either
the Owner or Contractor. The Architect's response to such requests shall be made in writing within any time limits agreed upon or otherwise with reasonable promptness. 

2.6.16    Interpretations
and decisions of the Architect shall be consistent with the intent of and reasonably inferable from the Contract Documents and shall be in writing or in the form of
drawings. When making such interpretations and initial decisions, the Architect shall endeavor to secure faithful performance by both Owner and Contractor, shall not show partiality to either, and
shall not be liable for results of interpretations or decisions so rendered in good faith. 

2.6.17    The
Architect shall render initial decisions on claims, disputes or other matters in question between the Owner and Contractor as provided in the Contract Documents. However, the
Architect's decisions on matters relating to aesthetic effect shall be final if consistent with the intent expressed in the Contract Documents. 

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2.6.18    The
Architect's decisions on claims, disputes or other matters in question between the Owner and Contractor, except for those relating to aesthetic effect as provided in
Subparagraph 2.6.17, shall be subject to mediation and arbitration as provided in this Agreement and in the Contract Documents. 

ARTICLE 3    ADDITIONAL SERVICES  

3.1    GENERAL

3.1.1    The
services described in this Article 3 are not included in Basic Services unless so identified in Article 12, and they shall be paid for by the Owner as provided in
this Agreement, in addition to the compensation for Basic Services. The services described under Paragraph 3.4 shall only be provided if authorized or confirmed in writing by the Owner. If
services described under Contingent Additional Services in Paragraph 3.3 are required due to circumstances beyond the Architect's control, the Architect shall notify the Owner prior to
commencing such services. If the Owner deems that such services described under Paragraph 3.3 are not required, the Owner shall give prompt written notice to the Architect. If the Owner
indicates in writing that all or part of such Contingent Additional Services are not required, the Architect shall have no obligation to provide those services. 

3.3    CONTINGENT ADDITIONAL SERVICES

3.3.1    Making
revisions in drawings, specifications or other documents when such revisions are: 

	.1
	inconsistent
with approvals or instructions previously given by the Owner, including revisions made necessary by adjustments in the Owner's program or Project budget;

	.2
	required
by the enactment or revision of codes, laws or regulations subsequent to the preparation of such documents; or

	.3
	due
to changes required as a result of the Owner's failure to render decisions in a timely manner. 

3.3.2    Providing
services required because of significant changes in the Project including, but not limited to, size, quality, complexity, the Owner's schedule, or the method of bidding or
negotiating and contracting for construction, except for services required under Subparagraph 5.2.5. 

3.3.3    Preparing
Drawings, Specifications and other documentation and supporting data, evaluating Contractor's proposals, and providing other services in connection with Change Orders and
Construction Change Directives. 

3.3.4    Providing
services in connection with evaluating substitutions proposed by the Contractor and making subsequent revisions to Drawings, Specifications and other documentation
resulting therefrom. 

3.3.5    Providing
consultation concerning replacement of Work damaged by fire or other cause during construction, and furnishing services required in connection with the replacement of such
Work. 

3.3.6    Providing
services made necessary by the default of the Contractor, by major defects or deficiencies in the Work of the Contractor, or by failure of performance of either the Owner
or Contractor under the Contract for Construction. 

3.3.7    Providing
services in evaluating an extensive number of claims submitted by the Contractor or others in connection with the Work. 

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3.3.8    Providing
services in connection with a public hearing, a dispute resolution proceeding or a legal proceeding except where the Architect is party thereto. 

3.3.9    Preparing
documents for alternate, separate or sequential bids or providing services in connection with bidding, negotiation or construction prior to the completion of the
Construction Documents Phase. 

3.4    OPTIONAL ADDITIONAL SERVICES

3.4.1    Providing
analyses of the Owner's needs and programming the requirements of the Project. 

3.4.2    Providing
financial feasibility or other special studies. 

3.4.3    Providing
planning surveys, site evaluations or comparative studies of prospective sites. 

3.4.4    Providing
special surveys, environmental studies and submissions required for approvals of governmental authorities or others having jurisdiction over the Project. 

3.4.5    Providing
services relative to future facilities, systems and equipment. 

3.4.6    Providing
services to investigate existing conditions or facilities or to make measured drawings thereof. 

3.4.7    Providing
services to verify the accuracy of drawings or other information furnished by the Owner. 

3.4.8    Providing
coordination of construction performed by separate contractors or by the Owner's own forces and coordination of services required in connection with construction performed
and equipment supplied by the Owner. 

3.4.10    Providing
detailed estimates of Construction Cost. 

3.4.11    Providing
detailed quantity surveys or inventories of material, equipment and labor. 

3.4.12    Providing
analyses of owning and operating costs. 

3.4.13    Providing
interior design and other similar services required for or in connection with the selection, procurement or installation of furniture, furnishings and related equipment. 

3.4.14    Providing
services for planning tenant or rental spaces. 

3.4.15    Making
investigations, inventories of materials or equipment, or valuations and detailed appraisals of existing facilities. 

3.4.16    Preparing
a set of reproducible record drawings showing significant changes in the Work made during construction based on marked-up prints, drawings and other data furnished by the
Contractor to the Architect. 

3.4.17    Providing
assistance in the utilization of equipment or systems such as testing, adjusting and balancing, preparation of operation and maintenance manuals, training personnel for
operation and maintenance, and consultation during operation. 

3.4.18    Providing
services after issuance to the Owner of the final Certificate for Payment, or in the absence of a final Certificate for Payment, more than 60 days after the date
of Substantial Completion of the Work. 

3.4.19    Providing
services of consultants. 

3.4.20    Providing
any other services not otherwise included in this Agreement or not customarily furnished in accordance with generally accepted architectural practice. 

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ARTICLE 4    OWNER'S RESPONSIBILITIES  

4.1    The
Owner shall provide full information in a timely manner regarding requirements for and limitations on the Project, including a written program which shall set forth the Owner's
objectives, schedule, constraints and criteria, including space requirements and relationships, flexibility, expandability, special equipment, systems and site requirements. The Owner shall furnish to
the Architect, within 15 days after receipt of a written request, information necessary and relevant for the Architect to evaluate, give notice of or enforce lien rights. 

4.3    Architect
to communicate with Owner's Representative, Paul Franz; Franz will be responsible for obtaining any needed consents from the Owner. 

4.4    The
Owner shall furnish surveys to describe physical characteristics, legal limitations and utility locations for the site of the Project, and a written legal description of the site.
The surveys and legal information shall include, as applicable, grades and lines of streets, alleys, pavements and adjoining property and structures; adjacent drainage; rights-of-way, restrictions,
easements, encroachments, zoning, deed restrictions, boundaries and contours of the site; locations, dimensions and necessary data with respect to existing buildings, other improvements and trees; and
information concerning available utility services and lines, both public and private, above and below grade, including inverts and depths. All the information on the survey shall be referenced to a
Project benchmark. 

4.5    The
Owner shall furnish the services of geotechnical engineers when such services are requested by the Architect. Such services may include but are not limited to test borings, test
pits, determinations of soil bearing values, percolation tests, evaluations of hazardous materials, ground corrosion tests and resistivity tests, including necessary operations for anticipating
subsoil conditions, with reports and appropriate recommendations. 

4.6    The
Owner shall furnish the services of consultants when such services are requested by the Architect and are reasonably required by the scope of the Project. 

4.6.1    The
Owner is furnishing the services of all Consultants including but not limited to, Civil Engineer, Structural Engineer, Mechanical Engineer, Electrical Engineer, Plumbing
Engineer and Landscape Architect. The Architect, as part of his basic services, is not providing any Consultants to the project. 

4.7    The
Owner shall furnish structural, mechanical, and chemical tests; tests for air and water pollution; tests for hazardous materials; and other laboratory and environmental tests,
inspections and reports required by law or the Contract Documents. 

4.8    The
Owner shall furnish all legal, accounting and insurance services that may be necessary at any time for the Project to meet the Owner's needs and interests. Such services shall
include auditing services the Owner may require to verify the Contractor's Applications for Payment or to ascertain how or for what purposes the Contractor has used the money paid by or on behalf of
the Owner. 

4.9    The
services, information, surveys and reports required by Paragraphs 4.4 through 4.8 shall be furnished at the Owner's expense, and the Architect shall be entitled to rely upon the
accuracy and completeness thereof. 

4.10    The
Owner shall provide prompt written notice to the Architect if the Owner becomes aware of any fault or defect in the Project, including any errors, omissions or inconsistencies in
the Architect's Instruments of Service. 

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ARTICLE 5  

ARTICLE 6    USE OF ARCHITECT'S INSTRUMENTS OF SERVICE  

6.1    Drawings,
specifications and other documents, including those in electronic form, prepared by the Architect and the Architect's consultants are Instruments of Service for use solely
with respect to this Project. The Architect and the Architect's consultants shall be deemed the authors and owners of their respective Instruments of Service and shall retain all common law, statutory
and other reserved rights. 

6.2    Upon
execution of this Agreement, the Architect grants to the Owner a nonexclusive license to reproduce the Architect's Instruments of Service solely for purposes of constructing,
using and maintaining the Project, provided that the Owner shall comply with all obligations, including prompt payment of all sums when due, under this Agreement. 

6.3    Except
for the licenses granted in Paragraph 6.2, no other license or right shall be deemed granted or implied under this Agreement. Any unauthorized use of the Instruments of
Service shall be at the Owner's sole risk and without liability to the Architect and the Architect's consultants. 

6.4    Prior
to the Architect providing to the Owner any Instruments of Service in electronic form or the Owner providing to the Architect any electronic data for incorporation into the
Instruments of Service, the Owner and the Architect shall by separate written agreement set forth the specific conditions governing the format of such Instruments of Service or electronic data,
including any special limitations or licenses not otherwise provided in this Agreement. 

ARTICLE 7    DISPUTE RESOLUTION  

7.1    MEDIATION

7.1.1    Any
claim, dispute or other matter in question arising out of or related to this Agreement shall be subject to mediation as a condition precedent to arbitration or the institution
of legal or equitable proceedings by either party. If such matter relates to or is the subject of a lien arising out of the Architect's services, the Architect may proceed in accordance with
applicable law to comply with the lien notice or filing deadlines prior to resolution of the matter by mediation or by arbitration. 

7.1.2    The
Owner and Architect shall endeavor to resolve claims, disputes and other matters in question between them by mediation which, unless the parties mutually agree otherwise, shall
be in accordance with the Construction Industry Mediation Rules of The American Arbitration Association currently in effect. Request for mediation shall be filed in writing with the other party to
this Agreement and with the American Arbitration Association. The request may be made concurrently with the filing of a demand for arbitration but, in such event, mediation shall proceed in advance of
arbitration or legal or equitable proceedings, which shall be stayed pending mediation for a period of 60 days from the date of filing, unless stayed for a longer period by agreement of the
parties or court order. 

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7.1.3    The
parties shall share the mediator's fee and any filing fees equally. The mediation shall be held in the place where the Project is located, unless another location is mutually
agreed upon. Agreements reached in mediation shall be enforceable as settlement agreements in any court having jurisdiction thereof. 

7.2    ARBITRATION 

7.2.1    Any
claim, dispute or other matter in question arising out of or related to this Agreement shall be subject to arbitration. Prior to arbitration, the parties shall endeavor to
resolve disputes by mediation in accordance with Paragraph 7.1. 

7.2.2    Claims,
disputes and other matters in question between the parties that are not resolved by mediation shall be decided by arbitration which, unless the parties mutually agree
otherwise, shall be in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect. The demand for arbitration shall be filed in writing
with the other party to this Agreement and with the American Arbitration Association. 

7.2.3    A
demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations. 

7.2.4    No
arbitration arising out of or relating to this Agreement shall include, by consolidation or joinder or in any other manner, an additional person or entity not a party to this
Agreement, except by written consent containing a specific reference to this Agreement and signed by the Owner, Architect, and any other person or entity sought to be joined. Consent to arbitration
involving an additional person or entity shall not constitute consent to arbitration of any claim, dispute or other matter in question not described in the written consent or with a person or entity
not named or described therein. The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or entity duly consented to by parties to this Agreement shall be
specifically enforceable in accordance with applicable law in any court having jurisdiction thereof. 

7.2.5    The
award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. 

7.3    CLAIMS FOR CONSEQUENTIAL DAMAGES 

The
Architect and Owner waive consequential damages for claims, disputes or other matters in question arising out of or relating to this Agreement. This mutual waiver is applicable, without
limitation, to all consequential damages due to either party's termination in accordance with Article 8. 

ARTICLE 8    TERMINATION OR SUSPENSION  

8.1    If
the Owner fails to make payments to the Architect in accordance with this Agreement, and Owner fails to cure the default within ten (10) calendar days after written notice,
such failure shall be considered substantial nonperformance and cause for termination or, at the Architect's option, cause for suspension of performance of services under this Agreement. In the event
of a suspension of services, the Architect shall have no liability to the Owner for delay or damage caused the Owner because of such suspension of services. Before resuming services, the Architect
shall be paid all sums due prior to suspension and any expenses incurred in the interruption and resumption of the Architect's services. The Architect's fees for the remaining services and the time
schedules shall be equitably adjusted. 

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8.2    If
the Project is suspended by the Owner for more than 30 consecutive days, the Architect shall be compensated for services performed prior to notice of such suspension. When the
Project is resumed, the Architect shall be compensated for expenses incurred in the interruption and resumption of the Architect's services. The Architect's fees for the remaining services and the
time schedules shall be equitable adjusted. 

8.3    If
the Project is suspended or the Architect's services are suspended for more than 90 consecutive days, the Architect may terminate this Agreement by giving not less than
seven days' written notice. 

8.4    This
Agreement may be terminated by either party should the other party fail to cure a default within ten (10) calendar days after written notice, through no fault of the party
initiating the termination. 

8.5    This
Agreement may be terminated by the Owner upon not less than seven days' written notice to the Architect for the Owner's convenience and without cause. 

8.6    In
the event of termination not the fault of the Architect, the Architect shall be compensated for services performed prior to termination, together with Reimbursable Expenses then
due. 

ARTICLE 9    MISCELLANEOUS PROVISIONS  

9.1    This
Agreement shall be governed by the law of the principal place of business of the Architect, unless otherwise provided in Article 12. 

9.2    Terms
in this Agreement shall have the same meaning as those in the edition of AIA Document A201, General Conditions of the Contract for Construction, current as of the date of this
Agreement. 

9.3    Causes
of action between the parties to this Agreement pertaining to acts or failures to act shall be deemed to have accrued and the applicable statutes of limitations shall commence
to run not later than either the date of Substantial Completion for acts or failures to act occurring prior to Substantial Completion or the date of issuance of the final Certificate for Payment for
acts or failures to act occurring after Substantial Completion. In no event shall such statutes of limitations commence to run any later than the date when the Architect's services are substantially
completed. 

9.4    To
the extent damages are covered by property insurance during construction, the Owner and Architect waive all rights against each other and against the contractors, consultants,
agents and employees of the other for damages, except such rights as they may have to the proceeds of such insurance as set forth in the edition of the AIA Document A201, General Conditions of the
Contract for Construction, current as of the date of this Agreement. The Owner or the Architect, as appropriate, shall require of the contractors, consultants, agents and employees of any of them
similar waivers in favor of the other parties enumerated herein. 

9.5    The
Owner and Architect, respectively, bind themselves, their partners, successors, assigns and legal representatives to the other party to this Agreement and to the partners,
successors, assigns and legal representatives of such other party with respect to all covenants of this Agreement. Neither the Owner nor the Architect shall assign this Agreement without the written
consent of the other, except that the Owner may assign this Agreement to an institutional lender providing financing for the Project. In such event, the lender shall assume the Owner's rights and
obligations under this Agreement. The Architect
shall execute all consents reasonably required to facilitate such assignment arising after lender realizes on its collateral. 

9.6    This
Agreement represents the entire and integrated agreement between the owner and the architect and supersedes all prior negotiations, representations or agreements, either written
or 

11

 

oral. This Agreement may be amended only by written instrument signed by both Owner and Architect. 

9.7    Nothing
contained in this Agreement shall create a contractual relationship with or a cause of action in favor of a third party against either the Owner or Architect. 

9.8    Unless
otherwise provided in this Agreement, the Architect shall have no responsibility for the discovery, presence, handling, removal or disposal of or exposure of persons to
hazardous materials or toxic substances in any form at the Project site. 

9.9    The
Architect shall have the right to include photographic or artistic representations of the design of the Project among the Architect's promotional and professional materials. The
Architect shall be given reasonable access to the completed Project to make such representations. However, the Architect's materials shall not include the Owner's confidential or proprietary
information if the Owner has previously advised the Architect in writing of the specific information considered by the Owner to be confidential or proprietary. The Owner shall provide professional
credit for the Architect in the Owner's promotional materials for the Project. 

9.10    If
the Owner requests the Architect to execute certificates, the proposed language of such certificates shall be submitted to the Architect for review at least 14 days prior
to the requested dates of execution. The Architect shall not be required to execute certificates that would require knowledge, services or responsibilities beyond the scope of this Agreement. The term
"certification" and "certify" are defined by California law with regard to the Architect's use of those terms. 

ARTICLE 10    PAYMENTS TO THE ARCHITECT  

10.1    DIRECT PERSONNEL EXPENSE 

Direct
Personnel Expense is defined as the direct salaries of the Architect's personnel engaged on the Project and the portion of the cost of their mandatory and customary contributions and benefits
related thereto, such as employment taxes and other statutory employee benefits, insurance, sick leave, holidays, vacations, employee retirement plans and similar contributions. 

10.2    REIMBURSEABLE EXPENSES 

10.2.1    Reimbursable
Expenses are in addition to compensation for Basic and Additional Services and include expenses incurred by the Architect and Architect's employees and consultants
directly related to the Project, of the types as identified in the following Clauses: 

	.1
	transportation
in connection with the Project, authorized out-of-town travel and subsistence, and electronic communications;

	.2
	fees
paid for securing approval of authorities having jurisdiction over the Project;

	.3
	reproductions,
plots, standard form documents, postage, handling and delivery of Instruments of Service;

	.4
	expense
of overtime work requiring higher than regular rates if authorized in advance by the Owner;

	.5
	renderings,
models and mock-ups requested by the Owner;

	.6
	expense
of professional liability insurance dedicated exclusively to this Project that is requested by Owner or the expense of additional insurance coverage or limits requested by the
Owner in excess of that normally carried by the Architect and the Architect's consultant if authorized by Owner;

	.7
	reimbursable
expenses as designated in Article 12;

	.8
	other
similar direct Project-related expenditures. 

12

  

10.3    PAYMENTS ON ACCOUNT OF BASIC SERVICES

10.3.2    Payments
for Basic Services shall be made monthly and, where applicable, shall be in proportion to services performed within each phase of service, on the basis set forth in
Subparagraph 11.2.2. 

10.3.3    If
and to the extent that the time initially established in Subparagraph 11.5.1 of this Agreement is exceeded or extended through no fault of the Architect, compensation for any
services rendered during the additional period of time shall be computed in the manner set forth in Subparagraph 11.3.2. 

10.4    PAYMENTS ON ACCOUNT OF ADDITIONAL SERVICES

Payments
on account of the Architect's Additional Services and for Reimbursable Expenses shall be made monthly upon presentation of the Architect's statement of services rendered or expenses incurred. 

10.5    PAYMENTS WITHHELD

No
deductions shall be made from the Architect's compensation on account of penalty, liquidated damages or other sums withheld from payments to contractors, or on account of the cost of changes in the
Work other than those for which the Architect has been adjudged to be liable. 

10.6    ARCHITECT'S ACCOUNTING RECORDS

Records
of Reimbursable Expenses and expenses pertaining to Additional Services and services performed on the basis of hourly rates or a multiple of Direct Personnel Expense shall be available to the
Owner or the Owner's authorized representative at mutually convenient times. 

ARTICLE 11    BASIS OF COMPENSATION  

The
Owner shall compensate the Architect as follows: 

11.2    BASIC COMPENSATION

11.2.1    For Basic Services, as described in Article 2, and any other services included in Article 12 as part of Basic Services, Basic
Compensation shall be computed as follows: 

(Insert basis of compensation, including stipulated sums, multiples or percentages and identify phases to which particular methods of compensation apply, if
necessary.)

Compensation
shall be a stipulated sum of Four Hundred Ninety Three Thousand, Seven Hundred Dollars ($493,700). 

Compensation
for services rendered by Consultants which the Architect may be required by the Owner to retain, as provided for in Article 4.6 shall be based on a multiplier of one point one five
(1.15) times the amounts billed by the Consultants to the Architect. 

11.2.2    When
compensation is based on a stipulated sum Cost, progress payments For Basic Services in each phase shall total the following percentages of the total Basic Compensation
payable: 

13

 

(Insert additional phases as appropriate.)

	 
	 	 
	 	 
	 	 

	 	 	Design Development Phase:	 	Eighteen	 	percent (18%)
	 	 	Construction Documents Phase:	 	Fifty Nine	 	percent (59%)
	 	 	Bidding or Negotiation Phase:	 	Two	 	percent (2%)
	 	 	Construction Phase:	 	Twenty One	 	percent (21%)
	 	 	 	 	 	 	 
	 	 	Total Basic Compensation	 	one hundred percent (100%)

11.3    COMPENSATION FOR ADDITIONAL SERVICES

11.3.2.    For Additional Services of the Architects, as described in Article 3 and 12, other than (1) Additional Project
Representation, as described in Paragraph 3.2. and (2) services included in Article 12 as part of Basic Services, but excluding services of consultants, compensation shall be
computed as follows: 

(Insert basis of compensation, including rates and multiples of Direct Personnel Expense for Principals and employees, and identify Principals and classify employees, if
required. Identify specific services to which particular methods of compensation apply, if necessary.)

	 
	 	 
	 	 
	 	 

	 	 	Principals time at fixed rate:	 	Edwin A. Lenvik	 	$140.00/hour
	 	 	 	 	David P. Jones	 	$125.00/hour
	 	 	 	 	Richard S. Six	 	$125.00/hour

Employee
time (other than principals) is billed at a multiple of two point five (2.5) times the employee's Direct Personnel Expense. Computer aided drafting and design (CADD) time is billed at a
multiple of three point zero (3.0) the employee's Direct Personnel Expense. 

At
the request of the client, employees who are asked to work overtime will be compensated at 1.5 times their base wages. The adjusted wage rate will be billed to the client. Overtime pay will be in
conformance with the State of California "8-hour Day Restoration & Workplace Flexibility Act of 1999" (AB60). 

The
firm has a minimum billing increment of one-quarter of an hour for services. Time is computed door to door, unless otherwise indicated, and the time for which we will bill includes only time for
which we are actually engaged in the Client's project. Principals and other personnel serving in the capacity of an expert witness will have their time billed at 1.5 times their regular billing rate. 

11.3.3.    For Additional Services of Consultants, including additional structural, mechanical and electrical engineering services and those
provided under Subparagraph 3.4.19 or identified in Article 12 as part of Additional Services, a multiple of one point one five (1.15) times the amounts billed to the Architect for such
services. 

(Identify specific types of consultants in Article 12, if required.)

11.4    REIMBURSABLE EXPENSES

For
Reimbursable Expenses, as described in Paragraph 10.2, and any other items included in Article 12 as Reimbursable Expenses, a multiple of one point one five (1.15) times the expenses
incurred by the Architect, the Architect's employees and consultants directly related to the Project. 

11.5    ADDITIONAL PROVISIONS

11.5.1    If the Basic Services covered by this Agreement have not been completed within eighteen (18) months of February 1, 2002,
through no fault of the Architect, extension of the Architect's services beyond that time shall be compensated as provided in Subparagraphs 10.3.3 and 11.3.2. 

14

 

11.5.2    Payments
are due and payable thirty (30) days from the date of the Architect's invoice. Amounts unpaid sixty (60) days after the invoice date shall bear interest at the rate
entered below, or in the absence thereof at the legal rate prevailing from time to time at the principal place of business of the Architect. 

(Insert rate of interest agreed upon.)

Interest
of 10% per year (but not exceeding the maximum rate allowable by law) will be payable on any amount not paid within 60 days. Payment thereafter to be applied first to accrued interest and
then to the principal unpaid amount. 

(Usury laws and requirements under the Federal Truth in Lending Act, similar state and local consumer credit laws and other regulations at the Owner's and Architect's principal
places of business, the location of the Project and elsewhere may affect the validity of this provision. Specific legal advice should be obtained with respect to deletions or modifications, and also
regarding requirements such as written disclosures or waivers.)

11.5.3    The
data and multiples set forth for Additional Services shall be adjusted in accordance with the normal salary review practices of the Architect. 

ARTICLE 12    OTHER CONDITIONS OR SERVICES  

(Insert descriptions of other services, identify Additional Services included within Basic Compensation and modifications to the payment and compensation terms included in this
Agreement.)

12.1    Architect's
service and fee is based on the "in progress" design drawings produced by Andy Neumann Architect which include the Structural, Mechanical, Plumbing and Electrical
drawings by Ove Arup and Partners, the Civil Engineering by Flowers and Associates and the Landscape drawings by Cunningham Design. Those drawings are titled "Phase 2—Design Development, R
& D Office Part for OAD Inc.", APN: 005-110-001 being 45 sheets of drawings, generally dated 9/4/98. 

12.2    The
construction drawings will be for "shell and core" only, The "core and shell" include restrooms, elevators and stairs but will not include any of the other interior improvements
indicated in the basement. The balance of the Interior will be left unfinished with no interior partitions, finishes on the interior of the exterior walls or ceiling systems, with the exception of the
entry lobby which will be detailed with all interior finishes. 

12.3    Pool
or fountain design will be by others. 

12.4    All
exterior flatwork and other site landscape furniture, etc. will be designed and specified by the Landscape Architect and will be part of his drawings. The Structural Engineer or
Civil Engineer will take responsibility for the retaining walls. 

12.5    We
will assist Andy Neumann Architect in his representation of the project before the Summerland design review board and the County Board of Architectural Review (BAR). Any public
presentations beyond the above will be considered additional services. 

12.6    Our
services do not include any renderings or other graphic presentations. 

12.7    The
Architect's construction phase administration is based on a construction period not exceeding twelve months. See Article 2.6.1. That construction period would start when
the first submittals were made to our office or the first field visits were conducted. If the construction period for the "shell and core" portion of the building exceeds twelve months our fee would
be adjusted accordingly. 

12.8    All
building finish materials and colors will be selected by Andy Neumann Architect. 

15

  

12.9    Our
services under this Agreement are based on Andy Neumann Architect's drawings dated 9/4/98 as identified in Article 12.1. We have not tried to "second guess" or anticipate
any changes that might be required to the design and/or construction drawing effort as a result of value engineering being done by the General Contractor, future analysis of the building's design for
conformance with current building codes, future refinement of the design by Andy Neumann Architect, or changes which may come out of subsequent governmental design review meetings. If there are
changes to the project which effect our work we would need to reexamine the fee and the time schedule for producing the construction documents. Changes or adjustments to the building design will be
considered additional services. 

12.10    Architect
shall maintain professional liability insurance ($1,000,000) for a period of three years after the date of substantial completion. 

12.11    The
Architect agrees to keep confidential and not to disclose to any person or entity, other than the Architect's employees and subcontractors, without the prior consent of the
Owner, all data and information not previously known to and generated by the Architect, or furnished to the Architect and marked confidential by the Owner in the course of the Architect's performance
hereunder; provided, however, that this provision shall not apply to data which are in the public domain, or were previously known to the Architect, or which were acquired by the Architect
independently from third parties not under any obligation to the Owner to keep said data and information confidential. These provisions shall not apply to information in whatever form that comes into
the public domain through no fault of the Architect, nor shall they be interpreted to in any way restrict the Architect from complying with an order to provide information or data when such order if
issued by a court, administrative agency or other authority with proper jurisdiction. The Owner agrees that the Architect may use and publish the Owner's name and a general description of the
Architect's services with respect to the project in describing the Architect's experience and qualifications to other clients and prospective clients. 

	 
	 	 
	 	 

	/s/  KATHLEEN FISHER      
OWNER (Signature)

Kathleen Fisher

Exec. V.P./Chief Financial Officer-QAD, Inc.
 (Printed name and title)	 	 	 	/s/  EDWIN A. LENVIK      
ARCHITECT (Signature)

Edwin A. Lenvik, AIA

President
 (Printed name and title)

16

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Exhibit 10.2  

  

 
  MASTER SERVICES AGREEMENT
  
  
  BETWEEN
  
  
  EQUANT INC.
  
  
  AND
  
  
  QAD INC.
  
  
  AGREEMENT NUMBER: MSA/US/QAD/06/02/05

  
  DATED: June 6, 2002
  
  
  Final    
  

 

EQUANT MASTER SERVICES AGREEMENT  

TABLE OF CONTENTS  

	Definitions	 	1
	Term	 	3
	Ordering of Services	 	3
	 	New Services	 	4
	 	Change Control Process	 	4
	Invoices, Payment and Taxes	 	4
	 	Commencement of Invoicing	 	4
	 	Payment	 	4
	 	Taxes	 	5
	 	Late Payment	 	5
	 	Billing Disputes	 	5
	 	Credit Requirements	 	5
	 	Additional Pro Forma Invoices	 	5
	Intellectual Property Rights	 	6
	 	Ownership of Intellectual Property	 	6
	 	Indemnification for Infringement of Intellectual Property Rights	 	6
	Software	 	6
	Confidentiality and Non-Disclosure	 	7
	Exclusions and Limitations of Liability	 	7
	 	Limitation of Warranties	 	8
	Termination	 	8
	 	Immediate Termination	 	8
	 	Termination on Notice	 	9
	 	Effect of Termination	 	9
	Assignment	 	10
	Governing Law	 	10
	Dispute Resolution	 	10
	General	 	11
	 	Notices	 	11
	 	Status of the Parties	 	11
	 	Third Party Beneficiaries	 	11
	 	Sub-Contractors	 	11
	 	Invalidity	 	11
	 	No Waivers	 	11
	 	Modifications of the Agreement	 	11
	 	Order of Precedence	 	11
	 	Entire Agreement	 	12
	 	Compliance with Laws	 	12
	 	Non-Solicitation	 	12
	 	Independent Counsel	 	12
	 	Counterparts	 	12
	 	Force Majeure	 	12
	 	Survival	 	12
	SERVICE ANNEX 1—NETWORK SERVICES	 	13
	 	Annex 1-A—Additional Terms And Conditions For Network Services	 	13
	 	 	Network Services Definitions	 	13
	 	 	Provision of Service and Support Services—Equant's Obligations	 	13

DATE ISSUED: June 6, 2002  

CONFIDENTIAL 

i

 

	 	 	Use of the Service—Customer's Obligations	 	14
	 	 	CPE	 	15
	 	 	Connection of Services	 	16
	 	 	Disconnection of Locations	 	17
	 	 	Reservation of Rights	 	17
	 	Annex 1-B—Network Services Support	 	21
	 	 	Help Desk	 	21
	 	 	Global Support	 	21
	 	 	Support Levels	 	21
	 	 	 	Core Network Support	 	21
	 	 	 	Customer Service Support	 	21
	 	 	 	On-site Support	 	22
	 	 	 	Fault Management	 	22
	 	 	 	 	Fault Reporting	 	22
	 	 	 	 	Fault Diagnosis	 	22
	 	 	 	 	TO Problems	 	22
	 	 	 	 	Equipment Problem	 	23
	 	 	 	Network Problems	 	23
	 	 	 	 	Closing Trouble Ticket	 	23
	 	 	 	 	Escalation Process	 	23
	 	 	 	Support Services—Tail Circuit Management	 	23
	 	 	 	Support Services—Project Management	 	24
	 	Annex 1-C—Network Services Acceptance Tests.	 	25
	 	 	Tail Circuit Testing	 	25
	 	 	Frame Relay Functionality Testing	 	25
	 	 	PPP Dial Access Testing	 	25
	 	 	Alternative Testing	 	25
	 	Annex 1-D—Service Descriptions	 	26
	 	Equant Frame Relay Service	 	26
	 	 	Committed Information Rate	 	26
	 	 	Excess Information Rate	 	26
	 	 	Premium Burst Option	 	26
	 	Annex 1-E—Service Levels	 	28
	 	 	Introduction	 	28
	 	 	Conditions and Exclusions	 	28
	 	 	 	P Grade (X.28/RLA/PPP/CID Dial Services)	 	28
	 	 	 	Mean Time To Attend (MTTA)	 	29
	 	 	 	Fault Management	 	30
	 	 	 	Cancellation of Service	 	30
	 	 	Definitions	 	30
	 	 	 	Schedule 1—Service Levels	 	32
	 	Annex 1-F—Pricing	 	34
	 	 	 	Table 1 to Annex 1-F Zones for Remote IP Dial Charges	 	35
	 	 	 	Table 2 to Annex 1-F IP Dial Usage Charges	 	36
	 	 	 	Table 3 to Annex 1-F Monthly IP Dial Fixed Charges	 	37
	 	 	 	Table 4 to Annex 1-F Frame Relay Charges	 	38

ii

   
This Agreement is made as of April 30, 2002 ("Effective Date") between: 

	(1)
	Equant Inc., a company incorporated in Delaware, with its principal place of business located at 400 Galleria Parkway, Atlanta,
Georgia 30339 ("Equant"); and

	(2)
	QAD Inc., a company incorporated in Delaware, with its principal place of business located at 6450 Via Real, Carpinteria,
California 93013 ("Customer"). 

BACKGROUND  

	(A)
	Customer desires to obtain data, voice, and professional services from Equant in order to facilitate communications between various
locations, as described in the Service Annexes; and

	(B)
	Equant has agreed to provide, and Customer has agreed to use the Services in accordance with the terms and conditions set out in this
Agreement. 

IT IS AGREED as follows: 

	1.
	DEFINITIONS 

In
addition to capitalized terms defined elsewhere in this Agreement, the following capitalized words and phrases have the meanings given below. 

	 	 	"Affiliate"	 	means in relation to an entity, any other entity controlled by, under common control with or controlling such entity, where "control" means an entity's (a) 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 (b) 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.
	

 	
 	

"Agreement"	
 	

means this fully executed Master Services Agreement, including all Service Annexes, Order Forms, schedules, attachments, exhibits and all amendments to this Master Services Agreement as may be made in writing and signed by the Parties.
	

 	
 	

"Business Day"	
 	

means the customary working hours for each day in each country where the Services are provided (except locally observed holidays in such countries).
	

 	
 	

"Changes"	
 	

means changes to this Agreement effected pursuant to the Change Control Process.
	

 	
 	

"Change Control Process"	
 	

means the process set out in Clause 3.6.
	

 	
 	

"Charges"	
 	

means the fees and rates that Equant will charge Customer for all Services provided under this Agreement.
	
 	
 	

 	
 	

 

1

 

	

 	
 	

"Confidential Information"	
 	

means the contents of this Agreement and all information disclosed (whether in writing, or orally or whether directly or indirectly) by a Party to the other Party whether before or after the Effective Date of this Agreement and marked or indicated
"CONFIDENTIAL", including information relating to the disclosing Party's products and services, operations, customers and prospects, know-how, design rights, trade secrets, market opportunities or business affairs.
	

 	
 	

"CPE"	
 	

or "Customer Premises Equipment" means the hardware (including cables, connectors and software) at Locations, as may be supplied by Equant as part of the Network Services.
	

 	
 	

"Date of Acceptance"	
 	

means the date the Acceptance Tests are successfully completed.
	

 	
 	

"Effective Date"	
 	

means, the date indicated above, or if no date is stated, the latest date written on the signature blocks of this Agreement.
	

 	
 	

"Force Majeure Event"	
 	

means a cause beyond the reasonable control of a Party affecting the performance of any of its obligations under this Agreement, as provided in section 13.14.
	

 	
 	

"Initial Term"	
 	

or "Term" means a period of thirty-six (36) months commencing on the Effective Date.
	

 	
 	

"Intellectual Property Rights"	
 	

means any patents, design rights, copyright, trademarks, trade names, trade secrets, know-how, in each case, whether registered or unregistered and any other intellectual property right whatsoever and wherever enforceable.
	

 	
 	

"Location"	
 	

means each User site to be provided with Services, identified in Order Forms.
	

 	
 	

"Losses"	
 	

means all claims, liabilities, demands, proceedings, losses, costs (including reasonable legal and other professional costs) and reasonable expenses of whatever nature.
	

 	
 	

"Network Services"	
 	

means the Equant data network services as described in the relevant Service Descriptions.
	

 	
 	

"Network"	
 	

means Equant's network used by Equant for the provision of the Network Services, excluding Tail Circuits, public networks and CPE.
	

 	
 	

"Order Form"	
 	

means any of Equant's standard order forms for the Services, prevailing from time to time.
	

 	
 	

"Order"	
 	

means any request for a Service issued by Customer or a User, using an Order Form. All Orders are subject to acceptance by Equant.
	

 	
 	

"Parties"	
 	

means Equant and Customer, or individually as a "Party".
	

 	
 	

"Service Annexes"	
 	

means the annexes to this Agreement attached hereto and detailing Service specific additional terms and conditions, Service descriptions, the SLA(s), and the schedule of Charges.
	
 	
 	

 	
 	

 

2

 

	

 	
 	

"Service Level"	
 	

or "Service Level Agreement" or "SLA" means the required level of service that Equant shall provide to Customer.
	

 	
 	

"Services"	
 	

means the services to be provided by Equant to Customer under this Agreement, described in the applicable Service Annexes.
	

 	
 	

"Software"	
 	

means computer programs in object code, as applicable, provided or to be provided by Equant pursuant to this Agreement, and excluding any proprietary Software provided by Customer.
	

 	
 	

"Tail Circuit"	
 	

means a telecommunications circuit or other capacity and attached modems leased from a TO connecting Locations to the Network.
	

 	
 	

"Target Date"	
 	

means the expected date for delivery and acceptance of Network Services, as set out in Order Forms.
	

 	
 	

"TO"	
 	

or "Telecommunications Operator" means an entity authorized to own, lease and operate telecommunications circuits.
	

 	
 	

"Users"	
 	

means users of the Services under this Agreement, excluding Customer, who have been authorized by Equant in writing, and will include the entity or entities that are designated in an Order Form as the recipient of the Services.

The
terms defined above include the plural as well as the singular. Any reference to a "Clause" means a clause of the document in which it appears unless otherwise expressly stated. The words
"include" and "including" will not be construed as terms of limitation. Use of the word "or" means and/or. The words "day", "month", and "year" mean, respectively, calendar day, calendar month and
calendar year, unless otherwise expressly stated. Any amounts expressed in dollars or preceded by "$" will refer to United States dollars. The headings used in any document are included for
convenience only and may not be used in construing or interpreting that document. 

	2.
	TERM

This
Agreement becomes effective from the Effective Date and, except as provided under Clause 3.2, will continue in full force and effect for thirty-six (36) months.
Thereafter, this Agreement shall continue on a monthly basis until terminated by either Party upon at least sixty (60) days notice before the end of the Initial Term or any renewal thereof. 

	3.
	ORDERING OF SERVICES

	3.1.
	Equant's
provision of any Services to Customer and Users is contingent upon the execution and acceptance of an Order Form for each Service.

	3.2.
	Upon
the Effective Date of this Agreement, Customer will provide Equant with a list of Customer and User personnel who are authorized to issue Orders to Equant. Equant may elect not
to accept any Orders that are issued by non-authorized personnel. Customer may add or delete names to/from the list, provided Equant has been notified in writing prior to the placement of
an Order.

	3.3.
	All
revisions to a previously issued and accepted Order Form must be provided in writing and signed by duly authorized personnel. Revisions issued verbally or electronically to
Equant must be confirmed in writing within three (3) Business Days. Customer will be charged for all costs incurred by Equant in preparation for the initially requested Services and those
incurred in revising the Services. 

3

 

	3.4.
	No
cancellations of Orders will be permitted unless otherwise stated in this Agreement or in writing and agreed in advance by the Parties.

	3.5.
	New Services

	(a)
	Customer
may request that Equant provide certain services (collectively, "New Services") that are not described in any Service Annex,
provided, however, that such a request will not require Customer to procure any such New Services from Equant.

	(b)
	Additionally,
Customer may request pricing on a per project basis whereby Equant will provide pricing (a "Price Quote") in accordance
with the following:

	(i)
	upon
receipt of such request, Equant will investigate and advise Customer of the feasibility and availability of the proposed New Service, and to the extent possible, if Equant can
legally provide the New Service. If so, Equant will promptly provide Customer with a Price Quote for such New Services;

	(ii)
	Customer
will have sixty (60) days or as mutually agreed to time period to accept or reject the Price Quote. If Customer accepts the Price Quote, the Parties will execute an
amendment to this Agreement, adding or revising the relevant Service Annex;

	(iii)
	upon
execution of all necessary documentation by both Parties, such New Services will be by amendment and will be deemed "Services" under this Agreement, and Equant will commence
provision thereof. 

	3.6.
	Change Control Process

Customer
may request Changes to this Agreement using the relevant Order Form in respect of any upgrades, downgrades, re-configuration or re-location of any Services ordered.
All Changes will be subject to such terms and conditions (including financial considerations) to be agreed by the Parties. 

	4.
	INVOICES, PAYMENT AND TAXES

	4.1.
	Commencement of Invoicing

	

 	

4.1.1	
 	

Charges for all Services are set out in the schedule of Charges, or in Order Forms. Charges will be invoiced and paid in Dollars.
	

 	

4.1.2	
 	

Equant will commence invoicing of all Charges as of the date specified in the relevant Service Annex.
	

 	

4.1.3	
 	

Equant will invoice all fixed recurring Charges monthly in advance, all other recurring Charges monthly in arrears, and all Charges for one time services on completion of the Service, unless otherwise specified in any Service Annex.
	

 	

4.1.4	
 	

Equant shall invoice Customer for its Charges, excluding claims for Losses, within one hundred eighty (180) days after the month in which the applicable Services and other work are rendered or the expense incurred.
	

 	

4.1.5	
 	

Equant shall invoice Customer for all Tail Circuit Charges and third party charges, excluding claims for Losses, within one (1) year after the month in which the applicable Services and other work are rendered or the expense
incurred.

	4.2.
	Payment

All
invoices are due and payable within thirty (30) days of the date of the invoice. Customer may dispute an invoice within one hundred eighty (180) days of the invoice date. Failing any
notification of a dispute from Customer within the one hundred eighty (180) day period, 

4

 

Customer will be deemed to have accepted the amounts stated on the invoice. In the event of a good faith, timely notified dispute on a part of the invoice, Customer may withhold payment only of the
disputed amount. 

	4.3.
	Taxes

The
amounts listed in the schedule of Charges do not include taxes or government imposed fees or surcharges, including VAT, sales, excise, gross receipts, withholding taxes and universal service fund
fees, which will be invoiced to Customer in accordance with local law. Customer agrees to pay or reimburse Equant for all such taxes, fees, and surcharges, excluding tax on Equant's, associated
companies or Sub-Contractors income. In respect of withholding tax, Customer will pay such additional
amounts as may be necessary, such that Equant receives the amount it would have received had no withholding been imposed. 

	4.4.
	Late Payment

Failure
by Customer to pay any undisputed charges in accordance with this Agreement will entitle Equant to suspend the Service to which the non-payment relates, having given thirty
(30) days notice of its intention to do so, and Customer having failed to remedy its payment default during that time unless such payment is disputed in good faith pursuant to
Clause 4.5 below. 

The
exercise of this remedy is without prejudice to Equant's other rights and remedies under this Agreement. 

	4.5.
	Billing Disputes

In
the event that Customer disputes in good faith the accuracy or validity of an invoice provided by Equant, Customer shall notify Equant within thirty (30) business days of the receipt of the
invoice stating the reason why Customer disputes the invoice and the amount in dispute. Customer shall pay the undisputed portion of the Charges to Equant. Customer and Equant shall use their
commercially reasonable efforts to promptly resolve any billing dispute in accordance with the dispute procedure set forth in Clause 12.1. 

	4.6.
	Credit Requirements

	

 	

4.6.1.	
 	

From time to time, Customer may be requested to provide financial information as Equant may reasonably request, to determine Customer's continued creditworthiness.
	

 	

4.6.2.	
 	

If Equant reasonably determines that Customer's creditworthiness is insufficient to cover the full payment of all Charges under this Agreement, Equant may require Customer to provide a financial guarantee in a form reasonably acceptable to both
Parties in order to continue the provision of the Services as a condition for the continued provision of the Services.

	4.7
	Additional Pro Forma Invoices

Equant
shall include pro forma invoices along with each billing invoice to allow Customer to identify its pass-through costs related to the use of the Services by Customer's Affiliates and
use such documentation to substantiate potential local tax deductions. The content of such schedules and pro forma invoices will be agreed by the Parties and shall be provided to Customer for a Charge
of $250 per month. In no event shall Equant be liable to Customer or Customer's Affiliates for any disallowance or rejection of local tax deductions by the applicable authorities due to the provision
of such pro forma invoices by Equant or the content thereof. 

5

 

	5.
	INTELLECTUAL PROPERTY RIGHTS

	5.1.
	Ownership of Intellectual Property

As
between the Parties, all Intellectual Property Rights in the Services are either owned by or licensed to Equant. Nothing contained in this Agreement will be deemed to convey any title or ownership
interest in any Intellectual Property Rights to Customer or Users, nor are any rights or licenses are granted by this Agreement with respect to any Intellectual Property Right, except as otherwise
expressly provided in this Agreement. 

	5.2.
	Indemnification for Infringement of Intellectual Property Rights

Equant,
at its expense, will indemnify, defend, and hold harmless Customer from any action brought against Customer or any User based on a claim that any Service or part thereof infringes any
Intellectual Property Right in any country where the Service is provided, if Customer promptly notifies Equant in writing when such action is brought against Customer and Equant has sole control of
such defense. Equant at its sole option may settle or compromise the claim. Notwithstanding the foregoing, Customer may elect to be represented by its own counsel at its cost in any such settlement
negotiation. In addition, Equant will pay all fees, costs or damages finally awarded in the action or constituting a settlement thereof, provided Customer gives Equant reasonable assistance in the
defense or settlement. In the event that an injunction, whether temporary or permanent, is obtained against Customer prohibiting the use of a Service or any part thereof, by reason of such
infringement, Equant will: 

	(a)
	use
reasonable efforts, at its own expense, to procure the right for Customer to continue using the Service, or replace or modify the Service so that it is no longer infringing an
Intellectual Property Right; or

	(b)
	only
if Equant cannot achieve the solution referred to in Clause 5.2 (a) above, direct Customer to cease using the affected Service or to return the infringing equipment
to Equant at Equant's expense, in which case the relevant Order will be automatically terminated. 

	5.3.
	Equant
will have no obligation to defend Customer or any User or to pay costs, damages or fees for any claim based on:

	(a)
	use
of the Service or of any part thereof other than the current unaltered Service provided by Equant, if such infringement would have been avoided by the use of the current unaltered
Service provided by Equant; or

	(b)
	the
combination, operation or use of a Service, or of any part thereof, with non-Equant services, equipment or software, if such infringement would have been avoided by
not combining, operating or using such Service or part thereof with other such non-Equant service, equipment or software. 

	6.
	SOFTWARE

If
required to enable Customer or Users to use a Service, Equant, will grant to Customer and Users for the Term of this Agreement, non-exclusive and non-transferable licenses
to use Software strictly for such purpose. Customer agrees not to produce, copy (except for the purpose of retaining a back-up copy), alter, modify, or add to the Software or any part
thereof, nor to attempt or to allow a third party to attempt to reverse engineer, translate or convert the Software from machine readable to human readable form, except as permitted by applicable law. 

6

 
	7.
	CONFIDENTIALTY AND NON-DISCLOSURE

	7.1.
	During
the Term of this Agreement and for three (3) years after its expiry, each Party will (a) use Confidential Information of the other Party only for the purpose of
this Agreement (which may include disclosure to all necessary sub-contractors, provided such subcontractors agree to comply with the provisions of the Agreement); (b) only disclose
the Confidential Information to a third party with the
other Party's prior written consent, except to its professional advisors and auditors and as regards Equant, to its Affiliates which agree to comply with this Agreement; and (c) use reasonable
endeavors to prevent the unauthorized use or disclosure of Confidential Information using at least the same degree of care exercised to protect its own Confidential Information.

	7.2.
	Clause 7.1
will not apply to the disclosure of Confidential Information (a) which is in the public domain at the time of disclosure otherwise than by the receiving
Party's breach of Clause 7.1; (b) which is rightfully received from a third party or independently developed by the receiving Party; or (c) in accordance with the order of a court
or governmental authority, in which case the receiving Party will give as much advance notice thereof to the disclosing Party as is reasonably practicable and will use its reasonable efforts to limit
the extent of any such disclosure.

	7.3
	Neither
Party will make any public announcement or issue any press release concerning this Agreement, the fact that Customer is a customer of Equant for the Services, or the
transactions contemplated hereby, without the other Party's prior written consent, such consent not to be unreasonably withheld or delayed. 

	8.
	EXCLUSIONS AND LIMITATIONS OF LIABILITY

	8.1.
	Neither
Party will be liable for any indirect, incidental or consequential loss or damages, howsoever arising, including loss of use or data or lost time, revenue, profits, goodwill
of clients or any business interruption of any kind even if advised of the possibility of such damages.

	8.2.
	Except
for completing any payment obligations, which Customer shall satisfy as soon as practicable following a Force Majeure Event that initially prevents Customer from meeting its
payment obligations in a timely manner but in any case within thirty (30) days of the Force Majeure Event, neither Party will be liable for any delay or for the consequences of any delay in
fulfilling any of its obligations under this Agreement if such delay is due to a Force Majeure Event.

	8.3.
	Equant
will have no liability in contract, tort or otherwise for any claim of unauthorized access of Customer's or any Users' transmission facilities or equipment, or for
unauthorized access to, or alteration, theft or destruction of Customer's or any Users' data files, programs, procedures or information through accident, fraudulent means or devices, or any other
method, except to the extent caused by Equant's willful misconduct or gross negligence.

	8.4.
	EACH
PARTY'S LIABILITY FOR DIRECT DAMAGES UNDER THIS AGREEMENT, WHETHER IN CONTRACT OR IN TORT, INCLUDING NEGLIGENCE, WILL BE LIMITED, FOR EACH EVENT OR SERIES OF CONNECTED EVENTS,
AS FOLLOWS:

	(A)
	FOR
FAILURE TO COMPLY WITH THE SERVICE LEVELS SET OUT IN THE SERVICE ANNEXES, TO THE AMOUNT OF CREDITS SET OUT IN THE RELEVANT SLA;

	(B)
	FOR
DAMAGE OR DESTRUCTION OF TANGIBLE PROPERTY, *; 

	*
	Confidential
portions omitted and filed separately with the Securities and Exchange Commission. 

7

 

	(C)
	FOR
ALL OTHER EVENTS, * OR THE CHARGES INCURRED IN THE 12 MONTHS IMMEDIATELY PRECEDING THE CAUSE OF ACTION UNDER THE ORDER TO WHICH THE CLAIM RELATES, WHICHEVER IS THE GREATER. 

THE
EXCLUSIONS AND LIMITATIONS OF LIABILITY CONTAINED IN CLAUSE 8.4 DO NOT APPLY TO CLAUSES 5 AND 7 OR TO CLAIMS FOR DEATH OR PERSONAL INJURY. 

	8.5.
	Limitation of Warranties

	

 	

8.5.1	
 	

EXCEPT FOR ANY EXPRESS WARRANTY SET OUT IN THE SLAS CONTAINED IN THE SERVICE ANNEXES OR ELSEWHERE IN THIS AGREEMENT, THE SERVICES ARE PROVIDED ON AN "AS IS" BASIS, AND CUSTOMER'S AND USERS' USE OF THE SERVICES IS AT THEIR OWN RISK. EQUANT DOES NOT
MAKE, AND HEREBY DISCLAIMS, ANY AND ALL OTHER EXPRESS AND/OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT AND TITLE, AND ANY WARRANTIES ARISING FROM A COURSE OF
DEALING, USAGE, OR TRADE PRACTICE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EQUANT DOES NOT WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED, ERROR-FREE, OR SECURE.
	

 	

8.5.2	
 	

The obligation of Equant and the rights and remedies of Customer set out in this Agreement are exclusive and in substitution for all other remedies, obligations and liabilities of Equant. The remedies of the Parties with respect to any matter under
this Agreement will be limited to the remedies set out herein; provided, that neither Party will receive duplicative recoveries.

	9.
	TERMINATION

	9.1.
	Immediate Termination 

Either
Party may terminate this Agreement with immediate effect, by giving notice to the other Party, if: 

	

 	

9.1.1.	
 	

the other Party commits any material breach of this Agreement, and does not remedy the breach (if it is capable of remedy) within thirty (30) days of notice of the breach being given by the non-defaulting Party. Failure to meet an SLA will not
be deemed a material breach for the purpose of this Clause 9.1.1, and any right of termination will be governed by the terms of the SLA set out in the relevant Service Annex;
	

 	

9.1.2.	
 	

a court order is made, or an effective resolution is passed for the dissolution or winding up of the other Party except for the purposes of an amalgamation, merger or restructuring;
	

 	

9.1.3.	
 	

a lien holder takes possession or a receiver is appointed over the whole or a material part of the undertakings or assets of the other Party;
	

 	

9.1.4.	
 	

the other Party becomes insolvent or makes any special arrangements or any special assignment for the benefit of its creditors, or is the subject of a voluntary or involuntary filing under the insolvency or bankruptcy laws of any
jurisdiction;
	

 	

9.1.5.	
 	

all Orders have been terminated pursuant to Clause 9.2.

	*
	Confidential
portions omitted and filed separately with the Securities and Exchange Commission. 

8

 

	9.2.
	Termination on Notice

Either
Party may terminate any Order with immediate effect by giving notice to the other Party: 

	

 	

9.2.1.	
 	

if the other Party fails to make any payment relating to that Order when due and does not remedy this within thirty (30) days following notice thereof, unless such payment is in dispute in accordance with Clause 4.5;
	

 	

9.2.2.	
 	

as permitted in the relevant SLA;
	

 	

9.2.3.	
 	

if a Force Majeure Event affecting the provision of Services under that Order continues for more than thirty (30) consecutive days.

	9.3.
	Effect of Termination

	

 	

9.3.1.	
 	

On termination of this Agreement, all Orders will immediately be terminated. The expiration or termination, for any reason, of this Agreement or of any Order, will not affect (a) the rights of either Party against the other which have accrued on
or prior to the termination; nor (b) any provision expressed to survive the termination.
	

 	

9.3.2.	
 	

On termination of this Agreement for whatever reason, each Party will immediately return to the other Party all property of whatever kind and nature provided under this Agreement and belonging to the other Party, including Confidential
Information.
	

 	

9.3.3.	
 	

Subject to Clause 6.2 of Annex 1-A and satisfaction of the Service Commitments in Annex 1-F,Customer may terminate service at any Location at any time provided that (i) the Service has been connected at the applicable Location for a minimum
of twelve (12) months, and (ii) Customer continues to meet the agreed to Services Commitment set forth in Annex 1-F for the remainder of the Term. Notwithstanding the foregoing, the twelve (12) month minimum connection requirement
stated in subsection (i) above shall not apply to the following Locations as of the Effective Date:

Carpinteria,
CA USA

Mt. Laurel, NJ

Alfortville, France

Annecy, France

Bangkok, Thailand

Mexico City, Mexico

Adelaide, Australia

Grand Rapids, Michigan USA

Durban, South Africa

Chicago, Illinois USA

Istanbul, Turkey

Johannesburg, South Africa

Limerick, Ireland

Milan, Italy

Mumbai, India

Sydney, Australia

Osaka, Japan

Powell, TN USA

Rancho Pales Verdes, CA USA

San Mateo, CA USA

Sao Paulo, Brazil

Singapore

9

 

Tokyo, Japan

Wanchai, Hong Kong

Dudley, UK

Willich, Germany

Wroclaw, Poland 

The
following Locations will satisfy the twelve (12) month minimum connection requirement stated in subsection (i) above on the dates set forth below: 

	 	 	Turin, Italy	 	December 1, 2002
	 	 	Melbourne, Australia	 	June 1, 2003
	 	 	Brisbane, Australia	 	November 1, 2002
	 	 	Milton, Australia	 	November 1, 2002
	 	 	Schiphol, Netherlands	 	June 1, 2003

	10.
	ASSIGNMENT

	

 	

10.1.	
 	

Either Party may at any time assign all or part of its rights or obligations under this Agreement to any of its Affiliates, provided that (a) the assignee is not a direct competitor of the other Party; or (b) the assignment would not cause
the other Party to incur materially increased costs in connection with the provision of the Services or this Agreement.
	

 	

10.2.	
 	

Subject to Clause 10.1 and 13.4, neither Party may assign, or otherwise dispose of its rights or obligations under this Agreement, or any part of this Agreement, without the written consent of the other Party, such consent not to be unreasonably
withheld or delayed.

	11.
	GOVERNING LAW

This
Agreement and all matters regarding the interpretation or enforcement hereof, will be governed exclusively by the laws of the State of New York, without regard to its conflict of laws provisions. 

	12.
	DISPUTE RESOLUTION

	

 	

12.1	
 	
Informal Dispute Resolution
	

 	

 	
 	

Equant and Customer will attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation between executives who have authority to settle the controversy and who are at a higher level of management
than the persons with direct responsibility for administration of this Agreement. Either party may give the other party written notice of any dispute not resolved in the normal course of business. Within ten (10) days after delivery of the
notice, the receiving party will submit to the other a written response. The notice and the response will include (a) a statement of each party's position and a summary of arguments supporting that position, and (b) the name and title of
the executive who will represent that party and of any other person who will accompany that executive. Within twenty (20) days after delivery of the disputing party's notice, the executives of both parties will meet at a mutually acceptable time
and place, and thereafter as often as they reasonably deem necessary to attempt to resolve the dispute. If the executives are unable to reach resolution within forty-five (45) days after delivery of the disputing party's notice, then the parties
may proceed to mediation or arbitration as set forth below. All reasonable requests for information made by one party to the other will be honored.
	
 	

 	
 	

 

10

 

	

 	

1.1.	
 	
Arbitration. All disputes, controversies or differences which may arise between the Parties, out of, or in relation to or in connection with this Agreement, or for the breach of it, will be
initially by internal dispute resolution and then, if necessary, exclusively by arbitration before a single arbitrator in New York City, New York, in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Each Party
irrevocably consents to personal jurisdiction and to ex parte action should any Party refuse to participate in such proceedings. The arbitrator's award will be final and binding on all Parties and judgment on the award may be entered and the award
enforced in any court having jurisdiction thereof.

	13.
	GENERAL

	

 	

13.1.	
 	
Notices. Any and all notices required or permitted to be given under this Agreement will be in writing and will be sufficiently given when delivered (i) by hand, (ii) by registered
mail, postage prepaid, return receipt requested, (iii) by facsimile transmission, sent to the addresses of the Parties appearing on page 3 of this Agreement or such other address as may be notified by a Party to the other. Except in the case of
delivery by hand, and save for evidence to the contrary, notices will be deemed to have been given on the day on which such communication ought to have been delivered in due course of postal or facsimile transmission.
	

 	

13.2.	
 	
Status of the Parties. This Agreement is not intended to create, nor will it be construed to be, a joint venture, association, partnership, franchise, or other form of business relationship.
Neither Party will 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 the other Party, except as expressly provided in this Agreement.
	

 	

13.3.	
 	
Third Party Beneficiaries. Nothing in this Agreement will be construed as conferring any rights or benefits on any person or legal entity (including Users other than Customer) who or which
is not a party to this Agreement.
	

 	

13.4.	
 	
Sub-Contractors. Equant will be entitled to sub-contract any of its obligations to a third party (each, a "Sub-Contractor"), except that it
will not sub-contract any of its obligations to a third party which may be reasonably considered as a competitor of Customer without Customer prior written consent. Equant will be responsible for the acts and omission of any
Sub-Contractor.
	

 	

13.5.	
 	
Invalidity. Should any provision of this Agreement be declared invalid for any reason, such decision will not affect the validity of any remaining provisions which will remain in force and
effect as if this Agreement had been executed with the invalid provision eliminated. In any such event, the Parties will work together and negotiate in good faith to replace the invalid provision with a provision of equivalent economic
effect.
	

 	

13.6.	
 	
No Waivers. The failure of either Party to require the performance of any of the terms of this Agreement or the waiver by either Party of any default under this Agreement will not prevent a
subsequent enforcement of such term, nor be deemed a waiver of any subsequent breach.
	

 	

13.7.	
 	
Modifications of the Agreement. This Agreement may be modified, supplemented, or amended upon signed written agreement of the Parties.
	

 	

13.8.	
 	
Order of Precedence In the event of any conflict or inconsistency between the provisions of (1) the body of this Agreement; (2) the Service Annexes; and (3) Order Forms, the
following order of precedence will apply:
	

 	

1.2.	
 	

the body of this Agreement;
	
 	

 	
 	

 

11

 

	

 	

1.3.	
 	

the Service Annexes;
	

 	

1.4.	
 	

the Order Forms.
	

 	

 	
 	

This order of precedence will apply unless otherwise expressly set out in any Service Annex.
	

 	

13.9.	
 	
Entire Agreement. This Agreement represents the entire agreement of the Parties with respect to its subject matter and supersedes all prior agreements, negotiations, representations
(innocent or negligent), and proposals, written or oral, relating to its subject matter including, without limitation, the Managed Data Network Services Agreement Number MDNS/US/QAD/07/99/02 executed between the Parties. Neither Party will be bound
by or liable to the other Party for any representation, promise, or inducement made by any agent or person in the other Party's employ which is not expressly stated in this Agreement.
	

 	

13.10.	
 	
Compliance with Laws. The Parties will comply in all material respects with all telecommunications, data protection and other laws relating to the subject matter of this
Agreement.
	

 	

13.11.	
 	
Non-Solicitation. Each Party acknowledges the importance of the other Party's employees to its successful operation, and agrees not to solicit, for the purposes of making an offer of
employment any person employed by the other Party (a) at any time during the term of this Agreement (including any extensions hereof); and (b) for a period of 12 months following the termination of this Agreement, without the prior
written consent of the other Party. The Parties expressly acknowledge that the remedy at law for any breach by it of this covenant will be inadequate and therefore, in the event of any threatened or actual breach of such covenant, the breaching Party
will be entitled to injunctive or other equitable relief in addition to any other remedies that it may have at law or in equity.
	

 	

13.12.	
 	
Independent Counsel. This Agreement has been negotiated at arms length and jointly prepared by the Parties and their respective counsel of choice.
	

 	

13.13.	
 	
Counterparts. This Agreement may be signed in any number of counterparts each of which, when signed, will be an original, but all the counterparts together will constitute one and the same
instrument.
	

 	

13.14.	
 	
Force Majeure. Neither party shall be held responsible for any delay or failure in performance to the extent such delay or failure is caused by fires, floods, strikes, lockouts, epidemics,
accidents, shortages, act of any governmental authority, or other causes beyond the reasonable control and without the fault or negligence of the delayed or non performing party or its subcontractors. If any such conditions occur, the party delayed
or unable to perform shall give immediate notice to the other party stating the nature of the condition and any action being taken to avoid or minimize its effect.
	

 	

13.15.	
 	
Survival. The provisions of this Agreement that, by their very nature, are intended to survive this Agreement, including without limitation, Clauses 7, 8, and 9, shall survive the
termination or expiration of this Agreement.

        IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the dates set out below. 

	

FOR AND ON BEHALF OF:	
 	

FOR AND ON BEHALF OF:
	
EQUANT INC.	
 	

QAD INC.
	

BY:	
 	

/s/  BRUCE W. SMITH       
	
 	

BY:	
 	

/s/  VINCE NIEDZIELSKI      

	NAME:	 	Bruce W. Smith
	 	NAME:	 	Vince Niedzielski

	TITLE:	 	Head of North America
	 	TITLE:	 	Executive VP, R&D

	DATE:	 	7/22/02
	 	DATE:	 	6/7/02

	 	 	 	 	 	 	 

12

   SERVICE ANNEX 1—NETWORK SERVICES  

ANNEX 1-A—ADDITIONAL TERMS AND CONDITIONS FOR NETWORK SERVICES  

        The terms set forth below may conflict with terms and conditions set forth in another Service Annex. Such conflicting terms are not inadvertent; rather, they are
due to the nature of these Specific Conditions. To the extent that there is a conflict, the terms provided in these Specific Conditions will prevail regarding delivery of the Services described in
this Service Annex 

	1.
	Definitions

All capitalized terms used will have the meanings set out elsewhere in this Agreement.

	2.
	Provision of Network Service And Support Services—Equant's Obligations
	2.1.
	Equant
will provide the Services ordered by Customer as of the Date of Acceptance.

	2.2.
	Equant
will cooperate with and provide all reasonable assistance to Customer in its performance of this Agreement including the timely provision of all information necessary for
Customer to utilize the Services and effect any Changes.

	2.3.
	The
Services will conform to the Service Levels set out in the relevant SLAs attached to this Agreement. If any Service fails to so conform, Customer will be entitled to the remedies
set out in the relevant SLA attached to this Agreement.

	2.4.
	Equant
will maintain during this Agreement, security procedures (as the same may be revised from time to time so as to maintain security), to protect Customer's computer stored data
transmitted over
the Network from unauthorized access and disclosure other than as permitted by this Agreement or to anybody having statutory authority to require Equant to make disclosures. The security procedures
will at all times be consistent with the Code of Practice for Information Security Management.

	2.5.
	Equant
will not inspect Customer data transmitted over the network beyond OSI Layer 4.

	2.6.
	Equant
will not provide service via a NNI or third party Frame Relay provider without prior approval.

	2.7.
	Technology upgrades

Equant
warrants that it will keep up to date in technology changes in the telecommunications industry and will offer all new technologies to Customer when commercially available. In the event that
Customer is able to demonstrate that it can obtain an enhanced or upgraded service as an alternative to the Service at all the Locations listed in the table following this Clause 2.7 from at
least one (1) other single-source service provider at performance levels and charges equivalent to or better than the Service Levels and Charges, then Equant shall have four (4) months
in which to offer such enhanced or upgraded service to Customer at competitive charges and performance levels, failing which Customer's sole remedy shall be the right to terminate this Agreement upon
thirty (30) days notice subject to payment of the Charges set forth in Clauses 6.2.2 and 6.2.3 of this Annex 1-A. 

13

 

Table to Annex 1-A

Technology Upgrade Locations  

Carpinteria,
CA USA

Mt. Laurel, NJ

Alfortville, France

Annecy, France

Mexico City, Mexico

Adelaide, Australia

Grand Rapids, Michigan USA

Chicago, Illinois USA

Limerick, Ireland

Melbourne, Australia

Milan, Italy

Milton, Australia

Sydney, Australia

Nieuwegein (Schiphol) Netherlands

Osaka, Japan

Powell, TN USA

Rancho Pales Verdes, CA USA

San Mateo, CA USA

Sao Paulo, Brazil

Singapore

Tokyo, Japan

Turin, Italy

Wanchai, Hong Kong

Dudley, UK

Willich, Germany

	3.
	Use of Network Services—Customer's Obligations

 
	3.1.
	Customer will accept the Services on each mutually agreed upon Date of Acceptance and thereafter pay the Charges for all Services in accordance with this
Agreement.

	3.2.
	Customer
will cooperate with and provide all reasonable assistance to Equant in its performance of this Agreement including the timely provision of all information necessary for
Equant to install the Services and effect any Changes.

	3.3.
	Customer
will not knowingly use the Services to transmit, distribute, disseminate, publish, or store any material that:

	(a)
	is
in violation of any applicable local, national, or international law or regulation;

	(b)
	is
defamatory, abusive, obscene, indecent, or harassing; or that threatens or encourages bodily harm, destruction of property, or infringement of the lawful rights of any party;

	(c)
	violates
the privacy of any party as protected by applicable local, national, or international law or regulation; or

	(d)
	contains
software viruses, trojan horses, or any computer code, files, or programs designed to disrupt, destroy, invade, gain unauthorized access to, corrupt, observe, or modify
without authorization, data, software, computing or network devices, or telecommunications equipment. 

14

 

	3.4
	Customer
will not knowingly use the Services to access any computer, network, or data without authorization or in a manner which exceeds authorization including, any attempt to:

	(a)
	retrieve,
alter, or destroy data;

	(b)
	probe,
scan or test the vulnerability of a system or network; or

	(c)
	breach
or defeat system or network security, authentication, authorization, confidentiality, intrusion detection, monitoring, or other security measures. 

	3.5
	Customer
will indemnify and hold harmless Equant and its Affiliates from and against any and all Losses caused by or arising from any breach by Customer or Users of Clauses 4.3 and
3.4.

	3.6
	Customer
will not interconnect the Network, or cause or allow the Network to be interconnected via an NNI (Network to Network Interface—on layer 1 and 2 of the OSI Model),
with any other network unless Equant has given Customer its prior approval. Any breach of this provision will be a material breach of this Agreement

	3.7
	Customer
will ensure that all Users will comply at all times with the obligations of Customer under this Agreement.

	3.8
	Except
as otherwise authorized under this Agreement, Customer will not resell or otherwise make available the Services to any third party. Any breach of this provision will be a
material breach of this Agreement. 

	4.
	CPE

	4.1
	The
Services may include CPE. Equant warrants that it has the right to provide the CPE to Customer and that Customer and its Affiliates will have the right to use the CPE for the
duration of this Agreement.

	4.2
	Equant
will connect the CPE at the Locations on dates to be agreed by the Parties. If a connection requires the removal or disconnection of any existing equipment of Customer,
Customer will permit, or obtain all necessary consents for, the removal or disconnection and will give Equant all reasonable assistance to enable the work to be carried out.

	4.3
	The
CPE will at all times remain the sole and exclusive property of Equant or its Sub-Contractors and Customer will obtain no property rights or interest in the CPE but
will have the right to quiet possession and the right to use the CPE in accordance with this Agreement.

	4.4
	Customer
will have the following obligations with respect to the CPE: 

	

 	

4.4.1	
 	

not to sell, assign, sub-let, pledge or part with possession or control of, or otherwise deal with the CPE or any interest in it;
	

 	

4.4.2	
 	

not to change, remove or obscure any labels, plates, insignia, lettering or other markings which are on the CPE at the time of its connection or which may afterwards be placed on the CPE by Equant;
	

 	

4.4.3	
 	

to keep the CPE free from distress, execution or any other legal process provided Equant shall have taken such action itself as shall be reasonably necessary or appropriate to protect against claims of liens;
	

 	

4.4.4	
 	

not to move the CPE from the Location to which it was delivered and connected without Equant's prior consent, which consent shall not be unreasonably be withheld;
	

 	

4.4.5	
 	

not to use the CPE or permit the same to be used contrary to any law or any regulation for the time being in force;
	
 	

 	
 	

 

15

 

	

 	

4.4.6	
 	

to ensure that proper environmental conditions as recommended in writing by Equant are maintained for the CPE and that the exterior surfaces are kept clean and in good condition;
	

 	

4.4.7	
 	

not make any modifications to the CPE; without Equant's prior consent;
	

 	

4.4.8	
 	

provide Equant with all reasonably required access to the Locations.

	4.5
	Upon
termination of this Agreement, Customer will surrender possession of the CPE in good order, repair and condition, to Equant, reasonable wear and tear excepted, provided Equant
covenants to remove such CPE in a manner that does not cause damage to Customer property or premises.

	4.6
	Subject
to Clause 4.4 of this Service Annex, Equant will ensure that the CPE is in good working order for the duration of this Agreement. If a fault in a Service occurs which
has been caused by a failure in the CPE, Equant will repair the fault as soon as possible following notification of the fault by Customer or detection of the fault by Equant, whichever first occurs.
If a visit to a Location is required, Equant will comply with the relevant Service Level described in the SLA.

	4.7
	Any
visits to a Location or repairs to CPE made necessary by: (a) damage to the CPE not caused by Equant; (b) interventions other than normal interventions carried out
by non-Equant personnel; (c) modifications to the CPE which have not been approved by Equant or have been carried out by personnel not approved by Equant; (d) improper
treatment of the CPE by Customer; (e) failure by Customer to meet the CPE manufacturer's specifications as advised by Equant to Customer on environmental conditions; or (f) Customer's
negligence, will entitle Equant to make an additional charge for the Services at the relevant Location, such additional charge to be equal to the actual and reasonable cost to Equant of restoring the
Services and repairing or replacing the CPE. 

	5
	Connection of Services

	5.1
	Equant
will use reasonable efforts to connect Services on the Target Dates, or if not so stated on dates agreed by the Parties and in any event as soon as possible after the date the
Tail Circuits are made available by the TOs. Equant will use all reasonable efforts to ensure that Tail Circuits are ordered and administered by Equant so as to be made available in accordance with
TOs' usual lead times. However, Equant will have no responsibility, nor liability for delays caused by Customer Users, TOs or any event of Force Majeure. In the event of any such delays, Equant will
use all reasonable efforts to provide the Services at the earliest opportunity. Equant reserves the right to connect an interim service of an equivalent functionality and performance should such
delays occur.

	5.2
	Customer
will use all reasonable efforts to accept the Services on agreed connection dates. Equant reserves the right to commence the Charges for any delayed Service due to Customer's
breach of this provision, and in addition no such delay will affect Equant's right to receive reimbursement from
Customer for all TO and other third party vendor charges in respect of Tail Circuits and communications equipment incurred from the date of any contract between Equant and any TO or other third party
vendor.

	5.3
	Customer
also understands that should Equant, its agents or Sub-Contractors carry out a visit agreed to in advance by Customer to a Location in order to connect a Service,
and then be unable to do so as a result of any act or omission by Customer or any User, Equant reserves the right to charge Customer for such visit at its then current manpower rates for such time and
its reasonable travel and out of pocket expenses. 

16

 

	6
	Cancellation of Services

	6.1
	Customer
may not cancel or disconnect any Service during the Term of this Agreement unless: 

	

 	

6.1.1	
 	

Customer is entitled to terminate this Agreement, or to cancel a Service pursuant to its rights under any SLA;
	

 	

6.1.2	
 	

Customer is unable to conduct its business at any Location due to Force Majeure. Customer may only invoke this provision after 30 continuous days of Force Majeure;
	

 	

6.1.3	
 	

Customer is unable to conduct its business at a Location due to insolvency, cessation of business or dissolution of an entity within the Customer's operation. In such instance Customer shall advise Equant in writing of its intent to cancel such
Location, with the reasons for such cancellation.
	

 	

6.1.4	
 	

Customer substitutes any Location or PVC with a new Location or PVC having equivalent monthly recurring Charges that are substantially equivalent to the monthly recurring Charges of the Location or PVC being disconnected, provided Equant is able to
connect the Service at the new Location or PVC. Equant shall be entitled to charge a connection and project management fee for the new Location or PVC, as agreed by the Parties.

	6.2
	Any
cancellation or disconnection of a Service authorized by Equant will be conditional on Customer providing the following: 

	

 	

6.2.1	
 	

at least sixty (60) days prior notice and signature on and return of an Equant Disconnect Form to Equant;
	

 	

6.2.2	
 	

for CPE based services, payments of (i) an early disconnection charge of $1500; and (ii) the applicable router disconnection fee indicated in the table following this Clause 6.2; and
	

 	

6.2.3	
 	

any contingent Tail Circuit charges including any cancellation penalties; Equant agrees to mitigate any such charges by terminating any Tail Circuit leases with the TO as soon as practicable following notification of the cancellation by Customer. In
most cases, cancellation penalties imposed by TOs will not exceed 12 month's charges for the disconnected Tail Circuit.

	Location
 
	 	Router Disconnection Fee

	 	 	 	 
	Netherlands	 	$	1,275
	USA	 	$	1,050
	Hong Kong	 	$	1,500
	Australia	 	$	1,500

	6.3
	Payment
of the charges set out in Clauses 6.2.2 and 6.2.3 above are in addition to any early termination damages that may accrue elsewhere in this Agreement. 

	7
	Reservation of Rights

	7.1
	Equant
reserves the right to make operational changes to the Services, if the changes do not adversely affect the Services provided to Customer nor cause Customer to incur increased
charges, and Equant will provide advance notice of such operational changes whenever practicable.

	7.2
	Equant
will be entitled to refuse, suspend, or discontinue the provision of Services to Customer in any Location by providing to Customer prior written notice as is appropriate under
the circumstances, if Equant, in its reasonable discretion, determines that the provision 

17

 

of
any Service will jeopardize Equant's ability or authority to provide Equant services in any jurisdiction. In the event of such refusal, suspension, or discontinuation of Services, the Parties will
consult with each other in an attempt to find an alternative solution, if any that would allow the provision of Services to that Location. The amount of any Shortfall as set forth in Clause 1
of Annex 1-F shall be Services commitment will be reduced for the Customer as appropriate for Services discontinued under this Clause 7.2 with no alternative solution provided by
Equant. 

	8.
	Benchmarking

	8.1
	Overview

	

 	

8.1.1	
 	

This Clause 8 of Service Annex 1 defines the process for benchmarking the Services.
	

 	

8.1.2	
 	

Benchmarking will be carried out to provide an independent view of the Median Charge for Comparative Services.
	

 	

8.1.3	
 	

The benchmarking shall occur during the eighteenth (18th) month of Term of this Agreement or as agreed to by the Parties.

	8.2
	Definitions

In
this Clause 8: 

"Comparative Services" means the services provided by at least two (2) reasonably comparable global service suppliers selected by the Independent
Adviser that are reasonably comparable to the Services being benchmarked in respect of (a) geographic availability; (b) service levels; and (c) functionality. 

"Regions" means (1) North, South and Central America, (2) Europe, (3) the Asia/Pacific region and (4) the rest of the world. 

"Independent Adviser" means Gartner Group, GIGA, Ovum or such other independent third party adviser agreed in writing by the parties from time to time. 

"Median Charge" means, in respect of Comparative Services, the median market price for such services identified by the Independent Adviser. 

	8.3
	Selection of the Independent Adviser

	

 	

8.3.1	
 	

The Parties will agree to the selection of the Independent Adviser. The Independent Adviser chosen will be responsible for all subsequent benchmarking of the Services, unless the Parties agree otherwise.
	

 	

8.3.2	
 	

The Independent Adviser will be jointly instructed by the Parties and, subject to Clause 8.4.7 below, the Parties will share the Independent Advisor's costs equally. The instruction to the Independent Adviser will specify the number of
Comparative Services to be considered in the benchmarking process. There will be a single brief for the Independent Adviser, produced jointly by the Parties, except where there are differences between the Parties' requirements for that brief. In
these circumstances, there will be a single joint brief, together with a document from each Party, in which each explains their respective differences. The Independent Adviser will decide in his sole discretion how to resolve any such differing
requirements.

18

 

	8.4
	Process

	

 	

8.4.1	
 	

Benchmarking may be invoked for any or all Services then provided to Customer by Equant, in any or all Regions. Where the Services to be benchmarked are provided across a Region, the benchmarking will be conducted against the whole of such Region and
not against any individual country or countries.
	

 	

8.4.2	
 	

The Independent Adviser will identify the Comparative Services against which the Services are to be benchmarked.
	

 	

8.4.3	
 	

Where in his sole judgment it is appropriate, the Independent Adviser will adjust the applicable charges for Comparative Services to take account of any material differences between the Comparative Services and the Services then provided by Equant to
Customer, including differences in: (a) geographic availability; (b) service levels; (c) functionality; (d) service configuration and capacities; (e) service management and reporting; (f) security; (g) aggregate
expenditure and volumes; (h) minimum commitment and available discounts; (i) contract term; and (j) the level of remedies provided under any service level agreement.
	

 	

8.4.4	
 	

The applicable charges derived by the Independent Adviser for each Comparative Service, including any adjustment made pursuant to Clause 8.4.3 above, will then be aggregated, and the relevant Median Charge will be calculated. The Independent
Adviser will then compare the Median Charge with the charges then payable by Customer to Equant for the relevant Service (including any relevant applicable discounts). The comparison will take full account of any elements of the charges that the
Independent Adviser deems appropriate in his sole discretion (e.g. in addition to comparing fixed recurring service charges, the Independent Adviser may include connection charges in the relevant comparison).
	

 	

8.4.5	
 	

For Services that comprise a number of options, e.g., CIR capacity options, the Independent Adviser may choose to benchmark a representative sample of what he considers to be the most frequently used options. Either party may object, on reasonable
grounds, to the Independent Adviser's chosen options and the parties will resolve any such objection and agree to the relevant sample to apply prior to the Independent Auditor proceeding with the process. Any percentage change in charges resulting
from the benchmarking of the relevant sample will then be applied to all options for that Service and aggregated to derive a new Median Charge. Where there are a range of available prices within a Service, the Independent Advisor will use his sole
discretion to determine the Median Charge for that Service in order to produce a fair and reasonable balance between the various prices.
	

 	

8.4.6	
 	

Where the Median Charges for a Service are less than the charges then charged by Equant to Customer for such Service, Customer will have the right to request Equant to reduce its Charges to match the relevant Median Charges to take effect from the
first (1st) of the month following completion of the process ("Date of Effect").
	

 	

8.4.7	
 	

If Equant does not reduce its Charges in accordance with Clause 8.4.6 above, Customer may, within forty-five (45) days of the Date of Effect:

	

 	

8.4.7.1	
 	

terminate the Services in the relevant Region under this Agreement, on thirty (30) days prior written notice to Equant; or
	
 	

 	
 	

 

19

 

	

 	

8.4.7.2	
 	

terminate this Agreement on thirty (30) days prior written notice to Equant, where the Services that may be terminated pursuant to Clause 8.4.7.1 above constitute at least forty percent (40%) (by volume of charges) of all Services then
being provided to Customer by Equant under this Agreement;
	

 	

8.4.7.3	
 	

in both such events, Equant shall be responsible for full payment of the Independent Advisor's costs for the relevant benchmarking exercise.

	

 	

8.4.8	
 	

Any dispute between the parties relating to this Clause 8 which is not resolved within ten (10) business days of notice of the dispute by either party shall be escalated by both parties to their respective senior management. If the dispute
is not settled by senior management within ten (10) business days of escalation, either party shall be entitled to initiate the dispute resolution process pursuant to Clause 12 of this Agreement.

20

 
Annex 1-B—Network Services Support  

	1.
	Help Desk  

Access
to help desks at certain locations notified by Equant, via which Customer and Users may obtain technical advice and guidance on the operation and use of the Service. Customer understands that
the location of the help desks is subject to reasonable change at any time. These help desks will be available 24 hours a day, 7 days a week, to answer all Service related queries to
Customer's and Users designated personnel. Equant will use its reasonable efforts to respond promptly on any query that is related to the Services. 

	2.
	Global Support  
	2.1.
	Equant's multi-tiered support structure is available to serve the needs of customers in more than 200 countries. All support personnel can speak English and
are either indigenous to the local country or are fluent in one or more of nearly 40 local languages.

	2.2.
	Equant
takes responsibility for managing network access between all sites, even where the network path crosses many national boundaries. Each service center is equipped with
comprehensive trouble and fault diagnosis hardware.

	2.3.
	Equant
support is organized as a pyramid based on 3 levels of support: core network support, customer service support, and on-site support. These support levels and the
key functions of the hierarchy are illustrated below: 

        

  

	3.
	Support Levels

	3.1.
	Core Network Support

Ultimate
responsibility for network management is assigned to 3 network management centers in Paris, Tulsa, and Singapore. These 3 centers, referred to as Global Network Management Centers
(GNMCs), use a follow-the-sun approach to provide 24 hour central control and visibility over the core backbone network,
7 days a week, three hundred sixty-five (365) days a year. The 3 GNMCs maintain the integrity of the core backbone and also serve as a final escalation point for the most
complex of customer network issues. 

	3.2.
	Customer Service Support

	

 	

3.2.1.	
 	

Equant's 5 Global Customer Service Centers (GCSCs) provide the first level of customer support on a twenty-four hour/seven day basis. The 5 GCSCs, located in Atlanta, Cairo, London, Rio de Janeiro and
Sydney, each have global visibility of the entire network and maintain full ownership of all faults reported. The GCSCs are supported by more than 20 satellite Customer Service Centers, which handle in-country fault management activities for
countries with regulatory, technical or linguistic restrictions.
	

 	

3.2.2.	
 	

Located within the GCSCs are the Proactive Surveillance Units, which provide constant monitoring of selected customers that have subscribed to Equant's managed router solutions.
	
 	

 	
 	

 

21

 

	

 	

3.2.3.	
 	

The GCSCs are further supported by Equant's Internetwork Operation Centers, which provide local LAN Access, Intranet Connect, and VPN support for customers and operations; the Applications Referral Centers, which deliver support of core network
application-based problems; and Equant's Centers of Excellence, which provide the highest level of technical expertise in resolving service-specific problems.

	3.3.
	On-site Support

At
the local level, Equant's entire organization is supported by multiple Fault Repair Units (FRUs), which are part of Regional Service Operations. The
FRUs maintain local presence in over 280 cities in more than 150 countries. The FRUs facilitate the repair and service of local nodes, connections and customer equipment as well as manage the
relationship with local TO service providers. 

	3.4.
	Fault Management

	

 	

3.4.1.	
 	
Fault Reporting
	

 	

(a)	
 	

Upon the Customer's detection or notification of a fault, the Customer will open a trouble ticket with the GCSC. The GCSC staff will retrieve the Customer site file from the trouble ticket database, confirm the user code and address, and initiate the
appropriate action.
	

 	

(b)	
 	

The GCSC will commence standard procedures to properly address all problems and restore the Service within the shortest possible period of time.
	

 	

(c)	
 	

All GCSCs utilize Equant's single global trouble ticket system to log and track reported faults. This system provides global visibility of all faults and associated activities to all network operations and support staff. In order to assist Customer
in its fault monitoring and management, Equant offers Customer the optional Web Vision, TT Vision and i Vision customer service tools at no charge, so Customer can obtain real-time access to this system to check the status and add comments to the
ticket.
	

 	

3.4.2.	
 	
 Fault Diagnosis
	

 	

 	
 	

The GCSC personnel will initiate a step-by-step fault diagnosis process that will allow them to diagnose the problem and take the appropriate corrective action. This may include dispatching a technician, or referring the fault to the local TO or one
of our internal Centers of Excellence. In cases where the problem is identified to be at the remote end, the trouble ticket will be referred to the appropriate local customer service center while maintaining trouble ticket ownership to
resolution.
	

 	

3.4.3.	
 	
 TO Problems
	

 	

 	
 	

If the problem is identified as within the local TO's responsibility, GCSC personnel will open a trouble ticket and route the problem directly to the local TO supplier. The trouble ticket will remain open until the problem has been resolved and the
user confirms that the service has been restored back to normal. During this time, ownership of the trouble ticket stays with the Equant GCSC and they will keep Customer apprised of the status and escalate as required.
	
 	

 	
 	

 

22

 

	

 	

3.4.4.	
 	
 Equipment Problem
	

 	

 	
 	

If the problem is diagnosed as caused by an Equant-supplied equipment component, the trouble ticket will be routed to the local field service unit, who will arrange to dispatch a technician under the terms of Customer's maintenance agreement. Once
the fault has been resolved, the field support engineer will contact the local customer service center and request confirmation that service has been restored with the local user and close the trouble ticket.
	

 	

3.4.5.	
 	
 Network Problems
	

 	

 	
 	

Any problem identified as a fault in the Equant network will be routed to the Network Operations staff and/or the appropriate Center of Excellence. After the fault has been cleared, it will be referred back to the GCSC, which will check with the
local site prior to closing the trouble ticket.
	

 	

3.4.6.	
 	
 Closing Trouble Tickets
	

 	

 	
 	

Once the fault has been reported as resolved it will be placed in "cleared" status. The GCSC staff will then contact Customer's contact and request confirmation that the fault is in fact resolved. Only after the GCSC staff has received this
confirmation can the trouble ticket be closed.
	

 	

3.4.7.	
 	
 Escalation Process 
	

 	

 	
 	

If the trouble ticket is not immediately resolved, the trouble ticket is automatically escalated using a predefined time scale. The Equant escalation process is designed to provide a high level of management visibility within Network Operations to
ensure every possible action is being taken to resolve the fault.
	

 	

 	
 	

The following is a general guideline for an automated management notification:

	Level
 
	 	Elapsed Time
	 	Function

	1	 	2 hours	 	Unit Supervisor/COM (if assigned)
	

2	
 	

4 hours	
 	

CSC Manager
	

3	
 	

6 hours	
 	

Regional CSC Director
	

4	
 	

24 hours	
 	

GCSC Director
	

5	
 	

48 hours	
 	

VP of Global Customer Service

Managerial
escalation should occur anytime it is felt that involvement of the next level manager is required to resolve a problem. Managerial escalation times are based on the judgment of the problem
owner. 

	3.5.
	Tail Circuit Management

Tail
Circuit management services for all Tail Circuits, includes: 

	•
	ordering
and management of the connection of Tail Circuits, modems and other communications equipment from the relevant TOs or other third party vendors as
applicable; in the event Equant is unable to order Tail Circuits due to regulatory impediment, Customer agrees to order them in its own name;

	•
	testing
and acceptance of Tail Circuits, modems and other communications equipment;

	•
	notification
of Tail Circuit faults both to Customer and the relevant TO upon Equant becoming aware of the faults and the coordination and expediting of
Service restoration; 

23

 

	•
	payment
to TOs and other third party vendors in local currency on Customer's behalf, where applicable. However, this service does not affect Customer's
liability with respect to such Tail Circuits, modems or other communications equipment and all sums paid by Equant to TOs or other third party vendors in respect thereof will be reimbursed by Customer
as more fully described in Annex 1-F. 

	3.6.
	Project Management.

Project
management includes the creation and agreement of critical path schedules, liaison with Customer's designated network personnel, implementation and configuration of all Network connections and
overall management of Customer's account. 

24

 

Annex 1-C—Network Services Acceptance Tests.  

	1.
	Tail Circuits. Equant will perform a 15 minute Bit Error Rate Test to ensure that no more than one error in 106 data bits
occur on the Tail Circuit.

	2.
	Frame Relay Functionality Testing. Equant will perform:

	•
	A
test to confirm that a route DTE supporting Frame Relay attached via a Tail Circuit to a Node is able to establish link-level communications
via a pre-designated local DLCI address with the Node local to the Site.

	•
	A
test to confirm that application data is able to be successfully transferred up to the registered CIR level between Customer-sited router DTEs supporting
Frame Relay, via PVC routers and pre-designated local DLCI addresses. 

	3.
	IP Private Dial Testing. Customer will be deemed to have accepted the Service at a Location upon issuance of a domain name.

	4.
	Alternative Testing. Where TO operating conditions are such that the Acceptance Tests are not appropriate, Equant shall carry out
alternative commissioning tests as agreed between the Parties. In this event, Equant will provide to Customer a written description of these alternative acceptance tests. 

25

  

Annex 1-D—Network Service Descriptions  

	1
	Description Of Equant Frame Relay Service

	1.1
	Equant Frame Relay Service

The
Equant Frame Relay Service is delivered on the Equant Global Network (EGN). Equant's Frame Relay service provides a Committed Information Rate based service with Burst Mode Options. Equant's Frame
Relay service conforms to: 

	STANDARDS INSTITUTE
 
	 	STANDARD
	 	LIMITATIONS

	Frame Relay Forum	 	"Joint Specification"	 	 
	Frame Relay Forum	 	UNI	 	 
	ANSI	 	T1.617 Annex D	 	 
	ITU-T (CCITT)	 	Q.933 Annex A	 	 
	ANSI	 	T.606; T1.606 addendum	 	 
	ANSI	 	T1.617—1991	 	 
	ANSI	 	T1.618—1991	 	Only 2 byte addressing

No CLLM mechanism

	1.2
	Committed Information Rate

The
Committed Information Rate (CIR), is the amount of bandwidth that Equant agrees to make available to
the Customer's Frame Relay Data Terminal Equipment through the Network, enabling the transfer of data between any given Frame Relay Permanent Virtual Circuit Ingress and Egress points during normal
network operational conditions. CIRs are provided on a per individual Data Link Channel basis. 

	1.3
	Excess Information Rate

The
Excess Information Rate (EIR), is the additional bandwidth that Equant agree to make available, to
enable the transfer of data between any given Frame Relay Permanent Virtual Circuit Ingress and Egress points on a per Data Link Channel Basis. The value of the EIR will be an additional
50 percent of the CIR, on individual CIRs up to 128 Kbit/s, or the upper limit of the access line bandwidth, dependent on whichever sum is the lesser. The EIR will be made available as a
sustained Network resource during normal Network operations. All data submitted within the EIR range is eligible to be discarded under adverse Network conditions. 

	1.4
	Premium Burst Option

Premium
Burst is an additional Equant Frame Relay service feature that provides additional bursting capacity of up to an additional 100% of the CIR value on any given individual CIR or the access line
bandwidth, dependent on whichever sum is the lesser. The Premium Burst configurations will ensure that CIR will be equal to or greater than 25% of the Access Speed unless otherwise agreed by Equant. 

The
Premium Burst facility will be made available to Customer's Frame Relay DTE under the following terms and conditions: 

Upon
acceptance by Equant and subject to the payment of Charges by Customer, EIR may be configured subject to the limitations below: 

EIR
usage will be limited to either: 

	(i)
	15 million
characters per day (for both directions) per 8kbps of CIR; or

	(ii)
	450MB
of total traffic (that is, the combined CIR and EIR usage) for both directions per month per 8 kbps of CIR. 

26

 

In
the event that the EIR usage exceeds the limitations stated in above for (i) 2 consecutive months; or (ii) 3 out of any 6 consecutive months, Equant reserves the right, at its sole
discretion, to take the steps set out below. 

Equant
may do either or both of the following: 

	(i)
	upgrade
the CIR to a level such that the EIR usage is within the limitations stated above; and

	(ii)
	downgrade
(to a level as determined by Equant) or terminate EIR over the PVC. 

Equant
reserves the right to charge for the above upgrade or reconfiguration of EIR. 

	2.
	Description of Equant IP Private Dial Service

The
Private Dial service enables access to hosts using a native LAN protocol via PSTN or ISDN, using point-to-point protocol (PPP). The service is accessed via a PC or a
router. The PC requires no additional hardware beyond a terminal adapter or a modem, except an available serial Port (ie, any port on a PC that can support a dial modem connection) and client software
supporting PPP and challenge handshake authentication protocol (CHAP). 

To
use the IP Private Dial Service, a user calls a public PSTN or ISDN telephone number that gives the user access to the network access server. The user's terminal, PC, or router then issues a CHAP
user name, domain name, and encrypted password. The call is sent automatically to the router defined to be associated with the domain name specified via a layer 2 forwarding tunnel. 

The
IP Private Dial security server positively identifies the user as authenticated and having access to the network or LAN and then opens an IP session. Additional levels of security may also be
procured (e.g., token-based systems, etc.). Please note that this process is handled by the client software; therefore, it is transparent to the user. 

27

 

Annex 1-E—Service Levels  

	1.
	Introduction.

In
calculating Equant's performance using the metrics set forth below, Equant will only be liable for its obligations hereunder as they relate to the Service described in this Service Annex. Equant
will not be liable for any required remedial actions if the failure to meet a Service Level was caused by the actions or inactions of (i) Customer or User; (ii) third parties;
(iii) any events that would be deemed Force Majeure Event as defined in Clause 1 of the Agreement. 

All
words with initial caps are defined in Clause 9 of this SLA or Clause 1 of the Agreement. 

	2.
	Conditions and Exclusions. This SLA and the remedies set out are subject to the following conditions and exclusions:

	2.1
	Save
only in respect of material breach of this Agreement, this SLA sets out Customer's sole and exclusive remedies for any failure by Equant to provide Services in accordance with
this Agreement Equant's periodic routine, non-routine, or emergency maintenance of the Service, provided in a proper, non-negligent manner and in accordance with commercially
prudent practices will not be deemed to be a failure of Equant to provide Services in accordance with this Agreement, or the breach of any SLA.

	2.2
	Customer
must claim credits for unachieved SLA in writing within 120 days following the end of the month in which Customer believes the Service Level was not achieved. Within
30 days following receipt of the claim, Equant will confirm in writing to Customer the amount of the credit, if any, from reports generated by Equant. All credits will be issued within
60 days of Customer's written claim.

	2.3
	Customer's
right of cancellation of a Service pursuant to Equant's failure to meet a SLA must be exercised within 120 days of Equant's written confirmation of that failure. If
Customer does not notify Equant in writing of its election to cancel, the availability of that particular remedy expires.

	2.4
	Any
termination of a Service or this Agreement by Customer due to Equant's failure to meet its SLA obligations is without financial liability to Customer, other than Customer's
liability to pay for Service provided before the effective date of termination.

	2.5
	In
no event will total credits due under for any unachieved SLA for any Location or Service in any month exceed 100% of the Qualifying Charges for that Location or Service in that
month.

	2.6
	Service
Levels for Service Availability, Latency and P Grade will apply from the first full month following the Date of Acceptance of the Service at the relevant Location. 

	3.
	P Grade (IP Dial Services).

	3.1
	Equant
commits to an accessibility level of 99.5% during Peak Hours (as defined below) for all calls placed by Customer. This accessibility level is equal to 100 minus
P-Grade indicator. P Grade means the probability of a call being blocked, during Peak Hours, due to access ports not being available for that call, which probability is expressed as
percentage. 

P
Grade ratio = (accumulated duration in minutes of the maximum port occupancy in the period × 100) (reference threshold for the period) where—the
reference threshold is set to 1500 minutes per week. Equant regularly monitors the P Grade levels in every rotary and targets to maintain it at levels below 0.5%. For purposes of this
Clause 3.1, "Peak Hours" means the normal business hours of the city and country where the call is placed. 

28

 

	3.2
	If
the accessibility level is not achieved in any Month, Customer will receive a credit of 10% of the previous Month's usage Charges via the relevant Node. 

	4.
	Network Path Availability (Frame Relay)

If
an NPA Service Level is not met in any calendar month, Equant will grant Customer a credit against the monthly recurring Port and CIR charge for any affected Location, payable for the calendar
month during which the Service Level has been breached. 

This
credit shall be an amount calculated as follows: 

	10    x	(NPA - Actual NPA)
 NPA	 	x    monthly port and CIR charge for the month concerned for the Location

provided
that no credit will be paid until the difference between the relevant NPA Service Level and the actual NPA is one tenth of one percent (0.10%) or greater.    For example, if the
NPA = 99.5%, the monthly Port and CIR Charges = $1,800 and the actual NPA = 99.45%, then 

10 × (99.5-99.45)
/ 99.5 × $1,800 = $9.05 

	5.
	Network Transit Time (Frame Relay)

If
any NTT Performance Level is not achieved, Customer will receive a credit against the Qualifying Charges for the affected Locations, calculated as follows: 

	Actual NTT higher than NTT Service Level by less than 10%	 	No credit
	

Actual NTT higher than NTT Performance Level by greater than 10%	
 	

1% of Qualifying Charges for every 1% by which actual NTT is higher than the NTT Service Level, up to a maximum credit of 100% of Qualifying Charges for the affected Locations

Credits
will be pro rated per millisecond. 

	6.
	Maximum Time To Attend (MTTA).

Equant
commits to a MTTA of 4 hours (5 hours for Customer's Location in Carpinteria, California USA), provided that: 

	6.1
	a
call-out notification is received from Customer, and the call-out can be made during the normal business day in the country in which the Location is
situated; and

	6.2
	the
Location is situated within a 50 mile radius of the nearest Equant Service Center ("Normal Service"). This requirement does not apply to Customer's Location in Carpinteria,
California USA. If a call-out notification is received and there are less than 4 hours remaining in the normal business day in the applicable country (5 hours with respect to
Customer's Carpinteria, California Location), then the MTTA calculation will stop at the end of the normal business day and resume on the following normal business day. 

Remedial
service on CPE other than Normal Service will be carried out soon as is practicably possible, taking into account availability of service personnel, the time and date of Customer's
notification and the country concerned. 

Where
Equant provides Normal Service, but does not achieve an MTTA of 4 hours or less (or 5 hours or less for Customer's Location in Carpinteria, California USA), Customer will receive a
credit of $150.00 up to a maximum of the Monthly CPE Charges, for each full hour that Equant delays commencement of its remedial activities. 

29

 

	7.
	Fault Management.

Equant
will: 

	•
	Issue
a Trouble Ticket number to Customer when Customer reports each fault to Equant;

	•
	Inform
Customer of Outages identified by Equant and not reported by Customer no later than one (1) hour after detecting such faults;

	•
	Provide
Customer with copies of all Trouble Tickets opened. 

If
Customer can demonstrate that Equant has not achieved the above Service Levels in any Month, the Parties will meet to discuss the reasons and Equant will escalate to a senior Network manager for
resolution. 

All
escalation of faults will be in accordance with the procedures described in Annex 1-B. 

	8.
	Cancellation of Service. In addition to any credits due for any unachieved SLA, in respect of all Service Levels, Customer shall be
entitled to cancel the Service at a Location, or this Agreement in its entirety, in the following circumstances:

	•
	If
the maximum credit is due in two (2) consecutive months, or in any four (4) Months during any 12 month period, at any Location,
Customer will be entitled to terminate the affected Service at the affected Location, by giving Equant at least 30 days prior notice.

	•
	If
the maximum credit is due in 2 consecutive months, or in any 4 months during any 12 month period, at more than 50% of the Locations,
Customer will be entitled to terminate this Agreement in its entirety by giving Equant at least 30 days prior notice. For the purposes of this remedy, non-achievement of the Service
Level at a Hub Location that causes non-achievement of the same Service Level at other Locations will be counted as one event. 

The
amount of any Shortfall, as defined in Clause 1 of Annex 1-F, shall be reduced accordingly in the event of a cancellation of Service under this Clause 8. 

	9.
	Definitions

	 	 	"Acceptance Tests"	 	means the processes employed by Equant to determine that the Services are properly performing.
	

 	
 	

"Accessibility Level"	
 	

means the probability of accessing a free Port on a dial modem bank.
	

 	
 	

"Back-Up"	
 	

means either automatic ISDN back-up or redundant Tail Circuits with automatic switching capability on a separate circuit path to the Tail Circuit. Back Up for Hub Locations must include equivalent service levels and diverse routing.
	

 	
 	

"CIR"	
 	

or "Committed Information Rate" means the amount of bandwidth that is made available to Customer on the end-to-end path between the Network Entry Access Node and the Network Exit Access Node.
	

 	
 	

"EIR"	
 	

or "Excessive Information Rate" means the feature that allows Users to send bursts of data that exceed the CIR allocated bandwidth. All frames within the EIR range are tagged to denote they are eligible
for discarding if network congestion occurs.
	
 	
 	

 	
 	

 

30

 

	

 	
 	

"Entry Access Node"	
 	

means the access node to which the originator data terminal equipment is connected.
	

 	
 	

"Exit Access Node"	
 	

means the access node to which the destination data terminal equipment or host computer is connected.
	

 	
 	

"Hub Location"	
 	

means the Location(s) designated as a hub or host Location by Customer.
	

 	
 	

"MTTA"	
 	

or "Mean Time To Attend" means the average time it takes for authorized Equant field personnel to arrive at the Customer Location in the event of a fault, failure or malfunction of the CPE that cannot be repaired or restored remotely.
	

 	
 	

"Node"	
 	

means a node of the Network to which Customer is connected via a Tail Circuit or to which Customer dials in, such Nodes being deployed at such times and places as determined by Equant.
	

 	
 	

"NPA"	
 	

or "Network Path Availability", means the availability of the virtual communication path between the Entry Access Node and the Exit Access Node on the Network excluding Scheduled Maintenance, host links,
Tail Circuits, and CPE. NPA is measured on a monthly basis.
	

 	
 	

"Network Transit Time"	
 	

or "NTT" means the elapsed time taken for the one way transmission of a one hundred twenty-eight (128) character length packet (a "Packet") between the entry point on the Network Node to which
Customer's transmitter of the Packet is connected, and the exit point on the Network Node to which the receiver of the Packet is connected, averaged over a calendar month. NTT excludes Tail Circuits and CPE.
	

 	
 	

"Outage"	
 	

means the non-availability of the Service at a Location, specifically that Customer or User cannot send or receive data using the Service.
	

 	
 	

"P Grade"	
 	

means a monthly measurement of congestion (or blocking) at the X.28/RLA/PPP rotary, expressed as a percentage, excluding availability and quality of the PSTN from the user to the rotary.
	

 	
 	

"Qualifying Charges"	
 	

means all monthly recurring Charges excluding Tail Circuit Charges and all one-time charges, including installation, project management and professional services charges.
	

 	
 	

"Scheduled Maintenance"	
 	

means maintenance scheduled by Equant to occur during low network traffic periods three to five times per year to implement generic changes to, or generic version updates of, the Network and lasting an average of five minutes each.
	

 	
 	

"Third Party Intervention"	
 	

means intervention by any person not authorized by Equant.
	

 	
 	

 	
 	

 

31

 
Schedule 1—Service Levels  

	
LOCATION
 
	
 	

NTT

(ms)
	
 	

NPA

(%)
	
 
	
 	
 	

 	
 	

 	
 
	
Host Location	
 	

 	
 	

 	
 
	

Carpinteria, CA USA	
 	

N/A	
 	

99.99	
%
	

Carpinteria, CA USA	
 	

N/A	
 	

99.99	
%
	

Mt. Laurel, NJ	
 	

N/A	
 	

99.99	
%
	
Remotes to Carpinteria, California	
 	

 	
 	

 	
 
	

Nieuwegein, Netherlands	
 	

139	
 	

99.99	
%
	

Wanchai, Hong Kong	
 	

100	
 	

99.99	
%
	

Sydney, Australia	
 	

114	
 	

99.99	
%
	

Mumbai, India	
 	

190	
 	

99.99	
%
	

Mexico City, Mexico	
 	

80	
 	

99.99	
%
	

Limerick, Ireland	
 	

145	
 	

99.99	
%
	

Sao Paulo, Brazil	
 	

140	
 	

99.99	
%
	

Grand Rapids, Michigan USA	
 	

95	
 	

99.99	
%
	

Chicago, Illinois USA	
 	

91	
 	

99.99	
%
	

Powell, TN USA	
 	

60	
 	

99.99	
%
	

Rancho Pales Verdes, CA USA	
 	

30	
 	

99.99	
%
	

San Mateo, CA USA	
 	

30	
 	

99.99	
%
	
Remotes to Mt. Laurel	
 	

 	
 	

 	
 
	

Grand Rapids, Michigan USA	
 	

40	
 	

99.99	
%
	

Chicago, Illinois USA	
 	

40	
 	

99.99	
%
	

Rancho Pales Verdes, CA USA	
 	

60	
 	

99.99	
%
	
Remotes to Nieuwegein, Netherlands	
 	

 	
 	

 	
 
	

Alfortville, France	
 	

40	
 	

99.99	
%
	

Annecy, France	
 	

40	
 	

99.99	
%
	

Hoofddorp, Netherlands	
 	

30	
 	

99.99	
%
	

Istanbul, Turkey	
 	

55	
 	

99.99	
%
	

Willich, Germany	
 	

30	
 	

99.99	
%
	

Wroclaw, Poland	
 	

40	
 	

99.99	
%
	

Dudley, UK	
 	

30	
 	

99.99	
%
	

Durban, South Africa	
 	

128	
 	

99.99	
%
	
 	
 	

 	
 	

 	
 

32

 

	

Milan, Italy	
 	

30	
 	

99.99	
%
	
Remote to Durban	
 	

 	
 	

 	
 
	

Johannesburg, South Africa	
 	

40	
 	

99.99	
%
	
Remote to Milan	
 	

 	
 	

 	
 
	

Turin, Italy	
 	

30	
 	

99.99	
%
	
Remotes to Hong Kong	
 	

 	
 	

 	
 
	

Bangkok, Thailand	
 	

58	
 	

99.99	
%
	

Singapore	
 	

47	
 	

99.99	
%
	

Tokyo, Japan	
 	

40	
 	

99.99	
%
	
Remote to Tokyo	
 	

 	
 	

 	
 
	

Osaka, Japan	
 	

30	
 	

99.99	
%
	
Remotes to Sydney, Australia	
 	

 	
 	

 	
 
	

Adelaide, Australia	
 	

40	
 	

99.99	
%
	

Melbourne, Australia	
 	

35	
 	

99.99	
%
	

Milton, Australia	
 	

35	
 	

99.99	
%

33

 
 
 

Annex 1-F—Pricing    
  

	1.
	Services Commitment

Customer
agrees that it shall have paid or shall be due to pay One Million One Hundred Twenty Thousand Dollars ($1,120,000) in "Qualifying Charges" (as defined below) under this Agreement
("Services Commitment") during the period commencing on the Effective Date and ending twelve (12) months from that date, and during each
consecutive twelve (12) month period during the Term of this Agreement (or a pro-rated amount for any portion thereof) thereafter (each such consecutive twelve (12) month
period referred to as an "Annual Period"). 

The
term "Qualifying Charges" shall refer to all Charges for the Services ordered under this Agreement, including all Tail Circuit charges and charges
for CPE. 

Should
the actual Qualifying Charges invoiced to Customer during any Annual Period be less than the Services Commitment, Equant shall invoice, and Customer shall pay, the difference between the actual
Qualifying Charges invoiced to Customer during the applicable Annual Period and the Services Commitment ("Shortfall") in accordance with Clause 4
of the Agreement. 

	2.
	Charges

Charges
for the Service are set out in the following tables attached to this Annex 1-F (collectively, the "Table"). Charges shall be
invoiced and paid in accordance with Clause 4 of this Agreement. 

	3.
	Commencement of Charges

All
Charges shall commence from the Date of Acceptance of the Service at a Location except that: (a) Tail Circuit Charges shall commence from the date of installation of the Tail Circuit at a
Location by the TO; (b) any Software license fees shall commence from the date of delivery of the Software to Customer. 

	4.
	Monthly Recurring/One Time Charges

Unless
otherwise stated, all Charges set out in the Table are monthly recurring. All connection, disconnection and project management charges are one time only charges. 

	5.
	Tail Circuit Charges

Tail
Circuit Charges shall be as set out in the Table or otherwise as notified by Equant from time to time. 

	6.
	Network User Identifier ("NUI") Charges

NUI
Charges shall be $10 per NUI per month plus a one time set up Charge of $10 per NUI. 

34

 
Table 1 to Annex 1-F Zones for Remote IP Dial Charges  

	Group 1
	 	Group 2
	 	Group 3
	 	Group 4

	*	 	*	 	*	 	*	 	*	 	*	 	*
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Group 5
	 	Group 6
	 	Group 7
	 	Group 8
	 	Group 9
	 	Group 10
	 	Group 11

	*	 	*	 	*	 	*	 	*	 	*	 	*
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Group 12
	 	Group 13
	 	Group 14
	 	ROW

	*	 	*	 	*	 	*	 	*	 	*	 	*

	*
	Confidential
portions omitted and filed separately with the Securities and Exchange Commission. 

35

  

 
 

Table 2 to Annex 1-F—IP Dial Usage Charges    
  

	Route
 
	 	Group 1
	 	Group 2
	 	Group 3
	 	Group 4
	 	Group 5
	 	Group 6
	 	Group 7
	 	Group 8
	 	Group 9
	 	Group 10
	 	Group 11
	 	Group 12
	 	Group 13
	 	Group 14
	 	ROW

	Domestic	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 1	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 2	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 3	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 4	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 5	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 6	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 7	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 8	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 9	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 10	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 11	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 12	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 13	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	Group 14	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*
	ROW	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*

	*
	Confidential
portions omitted and filed separately with the Securities and Exchange Commission. 

36

 
Table 3 to Annex 1-F Monthly IP Dial Fixed Charges  

	Location
 
	 	Tail

Circuit

Speed

(kbps)
	 	Port Speed

(kbps)
	 	CIR Speed

(kbps)
	 	Tail Circuit
	 	Tail

Circuit

Mgmt.
	 	Port
	 	CIR
	 	Managed

Router
	 	Monthly Total

	Carpinteria, CA	 	T-1	 	384K	 	N/A	 	*	 	*	 	*	 	*	 	*	 	*
	

New Joy, Netherlands	
 	

E-1	
 	

512K	
 	

N/A	
 	

*	
 	

*	
 	

*	
 	

*	
 	

*	
 	

*
	

Mt. Laurel, NJ	
 	

T-1	
 	

512K	
 	

N/A	
 	

*	
 	

*	
 	

*	
 	

*	
 	

*	
 	

*
	

Hong Kong, HK	
 	

512K	
 	

256K	
 	

N/A	
 	

*	
 	

*	
 	

*	
 	

*	
 	

*	
 	

*
	

Sydney, Australia	
 	

512K	
 	

256K	
 	

N/A	
 	

*	
 	

*	
 	

*	
 	

*	
 	

*	
 	

*
	
TOTAL	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

*

	*
	Confidential
portions omitted and filed separately with the Securities and Exchange Commission. 

37

 
Table 4 to Annex 1-F—Frame Relay Charges  

	 
	 	 
	 	 
	 	 
	 	MONTHLY RECURRING CHARGES

	LOCATION
 
	 	CIRCUIT
	 	PORT
	 	CIR
	 	CIRCUIT

CHARGES
	 	PORT

CHARGES
	 	CIR

CHARGES
	 	TOTAL

CHARGES

	Host Location	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Carpinteria, CA USA	 	1536K	 	1536K	 	N/A	 	*	 	*	 	*	 	*
	Carpinteria, CA USA	 	1536K	 	512K	 	N/A	 	*	 	*	 	*	 	*
	Mt. Laurel, NJ	 	1536K	 	512K	 	N/A	 	*	 	*	 	*	 	*
	
Remotes to Carpinteria, California	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 
	Nieuwegein, Netherlands	 	2048K	 	2048K	 	768K	 	*	 	*	 	*	 	*
	Wanchai, Hong Kong	 	512K	 	512K	 	256K	 	*	 	*	 	*	 	*
	Sydney, Australia	 	512K	 	512K	 	256K	 	*	 	*	 	*	 	*
	Mumbai, India	 	2048K	 	512K	 	128K	 	*	 	*	 	*	 	*
	Mexico City, Mexico	 	256K	 	256K	 	192K	 	*	 	*	 	*	 	*
	Limerick, Ireland	 	384K	 	384K	 	256K	 	*	 	*	 	*	 	*
	Sao Paulo, Brazil	 	256K	 	256K	 	96K	 	*	 	*	 	*	 	*
	Grand Rapids, Michigan USA	 	256K	 	256K	 	192K	 	*	 	*	 	*	 	*
	Chicago, Illinois USA	 	256K	 	256K	 	64K	 	*	 	*	 	*	 	*
	Powell, TN USA	 	128K	 	128K	 	96K	 	*	 	*	 	*	 	*
	Rancho Pales Verdes, CA USA	 	56K	 	56K	 	16K	 	*	 	*	 	*	 	*
	San Mateo, CA USA	 	384K	 	384K	 	256K	 	*	 	*	 	*	 	*
	
Remotes to Mt. Laurel	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 
	Grand Rapids, Michigan USA	 	256K	 	256K	 	24K	 	*	 	*	 	*	 	*
	Chicago, Illinois USA	 	256K	 	256K	 	64K	 	*	 	*	 	*	 	*
	Rancho Pales Verdes, CA USA	 	56K	 	56K	 	16K	 	*	 	*	 	*	 	*
	
Remotes to Nieuwegein, Netherlands	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 
	Alfortville, France	 	128K	 	128K	 	48K	 	*	 	*	 	*	 	*
	Annecy, France	 	128K	 	128K	 	96K	 	*	 	*	 	*	 	*
	Istanbul, Turkey	 	128K	 	64K	 	48K	 	*	 	*	 	*	 	*
	Willich, Germany	 	128K	 	128K	 	64K	 	*	 	*	 	*	 	*
	Wroclaw, Poland	 	256K	 	256K	 	48K	 	*	 	*	 	*	 	*
	Dudley, UK	 	E-1	 	768K	 	256K	 	*	 	*	 	*	 	*
	Durban, South Africa	 	128K	 	128K	 	64K	 	*	 	*	 	*	 	*
	Milan, Italy	 	256K	 	256K	 	128K	 	*	 	*	 	*	 	*
	
Remote to Durban	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 
	Johannesburg, South Africa	 	128K	 	128K	 	48K	 	*	 	*	 	*	 	*
	
Remote to Milan	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 
	Turin, Italy	 	128K	 	128K	 	64K	 	*	 	*	 	*	 	*
	
Remotes to Hong Kong	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 
	Bangkok, Thailand	 	256K	 	128K	 	64K	 	*	 	*	 	*	 	*
	Singapore	 	128K	 	128K	 	96K	 	*	 	*	 	*	 	*
	Tokyo, Japan	 	256K	 	256K	 	192K	 	*	 	*	 	*	 	*
	
Remote to Tokyo	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 
	Osaka, Japan	 	64K	 	64K	 	32K	 	*	 	*	 	*	 	*
	
Remotes to Sydney, Australia	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 
	Adelaide, Australia	 	128K	 	128K	 	64K	 	*	 	*	 	*	 	*
	Melbourne, Australia	 	256K	 	256K	 	96K	 	*	 	*	 	*	 	*
	Milton, Australia	 	128K	 	128K	 	64K	 	*	 	*	 	*	 	*
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	Total	 	 	 	 	 	 	 	*	 	*	 	*	 	*
	 	 	 	 	 	 	 	 	
	 	
	 	
	 	

	Notes:	1)	There are no installation charges specified for the above Locations because the Service is already installed at these Locations as of the Effective Date.
	

 	

2)	

There will be a one-time project management charge applied for each Change Order submitted.
	

 	

3)	

Charges for Web Vision, TT Vision and I Vision are waived for Customer during the Term.
	

 	

4)	

The Charges above include one (1) Customer Operations Manager.
	

 	

 	

 

	*
	Confidential
portions omitted and filed separately with the Securities and Exchange Commission. 

38

QuickLinks

MASTER SERVICES AGREEMENT BETWEEN EQUANT INC. AND QAD INC. AGREEMENT NUMBER: MSA/US/QAD/06/02/05 DATED: June 6, 2002 Final

Annex 1-F—Pricing

Table 2 to Annex 1-F—IP Dial Usage Charges

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]