UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 1999
-------------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
333-06609-01
Commission file number 333-06609-02
SPRINT SPECTRUM L.P.
SPRINT SPECTRUM FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 48-1165245
DELAWARE 43-1746537
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Nos.)
4900 Main Street, Kansas City, Missouri 64112
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 559-1000
-------------------
Securities registered pursuant to Section 12(b) and 12(g) of the Act: None
The registrants meet the conditions set forth in General Instruction H (1) (a)
and (b) of Form 10-Q and are therefore filing this Form with the reduced
disclosure format.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No______
At August 1, 1999 the Sprint Spectrum Finance Corporation had 100 common shares
outstanding.
Documents Incorporated by Reference: None
<PAGE>
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Table of Contents
Page
Number
-------------------
SPRINT SPECTRUM L.P.
Part I - Financial Information
Item 1. Financial Statements
<S> <C>
Consolidated Statements of Operations 1
Consolidated Balance Sheets 2
Consolidated Statements of Cash Flows 3
Consolidated Statements of Changes in Partners' Capital and Accumulated
Deficit 4
Condensed Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk 10
Part II - Other Information
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signature 12
SPRINT SPECTRUM FINANCE CORPORATION
Part I - Financial Information
Item 1. Financial Statements
Balance Sheets 13
Notes to Financial Statements 13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
Part II - Other Information
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
</TABLE>
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<TABLE>
<CAPTION>
Part I.
Item 1.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Sprint Spectrum L.P.
(millions)
- --------------------------------------------- ----------------------------------- ----------------------------------
Quarters Ended Year-to-Date
June 30, June 30,
- --------------------------------------------- ----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
<S> <C> <C> <C> <C>
Net Operating Revenues $ 491 $ 192 $ 931 $ 336
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Operating Expenses
Costs of services and products 272 205 653 374
Selling, general and administrative 344 223 627 448
Depreciation and amortization 176 150 345 264
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Total operating expenses 792 578 1,625 1,086
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Operating Loss (301) (386) (694) (750)
Interest expense (132) (98) (249) (176)
Other income, net 3 2 5 4
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Loss before Extraordinary Item (430) (482) (938) (922)
Extraordinary item - - (33) -
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Net Loss $ (430) $ (482) $ (971) $ (922)
--- ------------- -- -------------- -- ------------- --- -------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS Sprint Spectrum L.P.
(millions)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1999 1998
- --------------------------------------------------------------------------------------------------------------------
(Unaudited)
Assets
Current assets
<S> <C> <C>
Cash and equivalents $ 29 $ 70
Accounts receivable, net of allowance for doubtful
accounts of $31 and $16 297 226
Affiliated receivables 185 248
Inventories 150 92
Prepaids and other current assets 51 26
- --------------------------------------------------------------------------------------------------------------------
Total current assets 712 662
Property, plant and equipment
Network equipment 3,317 2,937
Construction work in progress 859 619
Buildings and leasehold improvements 785 758
Other 295 258
- --------------------------------------------------------------------------------------------------------------------
Total property, plant and equipment 5,256 4,572
Accumulated depreciation (1,080) (772)
- --------------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 4,176 3,800
Intangible assets
PCS licenses 2,130 2,130
Microwave relocation costs 307 299
- --------------------------------------------------------------------------------------------------------------------
Total intangible assets 2,437 2,429
Accumulated amortization (140) (110)
- --------------------------------------------------------------------------------------------------------------------
Net intangible assets 2,297 2,319
Other assets 73 45
- --------------------------------------------------------------------------------------------------------------------
Total $ 7,258 $ 6,826
-------------------------------------------
Liabilities and Partners' Capital and Accumulated Deficit
Current liabilities
Current maturities of long-term debt $ 5 $ 5
Accounts payable 315 320
Affiliated payables 233 31
Construction obligations 681 593
Accrued expenses and other current liabilities 405 455
- --------------------------------------------------------------------------------------------------------------------
Total current liabilities 1,639 1,404
Long-term debt 6,812 5,649
Other noncurrent liabilities 68 81
Partners' capital and accumulated deficit:
Partners' capital 3,708 3,690
Accumulated deficit (4,969) (3,998)
- --------------------------------------------------------------------------------------------------------------------
Total partners' capital and accumulated deficit (1,261) (308)
- --------------------------------------------------------------------------------------------------------------------
Total $ 7,258 $ 6,826
-------------------------------------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Sprint Spectrum L.P.
(millions)
- ------------------------------------------------------------------ ----------------- ----------------- ----------------
Year-to-Date June 30, 1999 1998
- ------------------------------------------------------------------ ----------------- ----------------- ----------------
Operating Activities
<S> <C> <C>
Net loss $ (971) $ (922)
Adjustments to reconcile net loss to net cash used by operating
activities:
Depreciation and amortization 345 264
Extraordinary item 33 -
Amortization of debt discount and issuance costs 30 26
Changes in assets and liabilities:
Accounts receivable, net (71) (31)
Affiliated receivables 63 41
Inventories and other current assets (76) (35)
Accounts payable and other current liabilities 283 (225)
Other, net (13) 27
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash used by operating activities (377) (855)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Investing Activities
Capital expenditures (706) (540)
Advances to Sprint (48) -
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash used by investing activities (754) (540)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Financing Activities
Proceeds from long-term debt 3,250 1,419
Payments on long-term debt (2,110) (3)
Other (50) -
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash provided by financing activities 1,090 1,416
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Increase (Decrease) in Cash and Equivalents (41) 21
Cash and Equivalents at Beginning of Period 70 67
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Cash and Equivalents at End of Period $ 29 $ 88
--- ------------- -- -------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL AND ACCUMULATED DEFICIT (Unaudited) Sprint Spectrum L.P.
(millions)
- ---------------------------------------------------------------------------------------------------------------------
Partners' Accumulated
Capital Deficit Total
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Beginning 1999 balance $ 3,690 $ (3,998) $ (308)
Net loss - (971) (971)
Other 18 - 18
- ---------------------------------------------------------------------------------------------------------------------
June 30, 1999 balance $ 3,708 $ (4,969) $ (1,261)
----------------------------------------------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
<PAGE>
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Sprint Spectrum L.P.
(Unaudited)
The information in this Form 10-Q has been prepared according to Securities and
Exchange Commission rules and regulations. In our opinion, the consolidated
interim financial statements reflect all adjustments, consisting only of normal
recurring accruals, needed to fairly present Sprint Spectrum L.P's consolidated
financial position, results of operations and cash flows.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared according to generally accepted accounting
principles have been condensed or omitted. As a result, you should read these
financial statements along with Sprint Spectrum's 1998 Form 10-K. Operating
results for the 1999 year-to-date period do not necessarily represent the
results that may be expected for the year ending December 31, 1999.
- --------------------------------------------------------------------------------
1. PCS Restructuring
- --------------------------------------------------------------------------------
In November 1998, Sprint Corporation purchased the remaining ownership interests
in Sprint Spectrum Holding Company, L.P.--Sprint Spectrum's general partner--and
MinorCo,L.P.--Sprint Spectrum's limited partner--from Tele-Communications, Inc.,
Comcast Corporation and Cox Communications, Inc. At that time, Sprint created
the Sprint PCS Group, which consists of Sprint's domestic wireless personal
communication services (PCS) operations, including Sprint Spectrum.
- --------------------------------------------------------------------------------
2. Basis of Consolidation and Presentation
- --------------------------------------------------------------------------------
The consolidated financial statements include the accounts of Sprint Spectrum
and its subsidiaries. Sprint Spectrum is, indirectly, a wholly owned Sprint
subsidiary.
The consolidated financial statements are prepared using generally accepted
accounting principles. These principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported amounts of
revenues and expenses. Actual results could differ from those estimates.
Certain prior-year amounts have been reclassified to conform to the current-year
presentation. These reclassifications had no effect on the results of operations
or partners' capital as previously reported.
- --------------------------------------------------------------------------------
3. Long-term Debt
- --------------------------------------------------------------------------------
In the 1999 year-to-date period, Sprint allocated $2.4 billion of senior notes
with 5-year and 20-year maturities to Sprint Spectrum. These notes have interest
rates ranging from 7.6% to 8.8%.
In the 1999 first quarter, Sprint Spectrum issued notes payable totaling $844
million to affiliates. The notes mature in 2006 and have interest rates based on
the London Inter-Bank Offered Rate plus 269 basis points.
In the 1999 first quarter, Sprint Spectrum terminated its revolving credit
facilities and repaid, prior to scheduled maturities, the related outstanding
balance of $1.7 billion. These facilities had interest rates ranging from 5.6%
to 6.3%. These repayments resulted in a $33 million extraordinary loss. These
short-term borrowings were repaid with the long-term financing provided by
Sprint.
- --------------------------------------------------------------------------------
4. Litigation, Claims and Assessments
- --------------------------------------------------------------------------------
Various suits arising in the ordinary course of business are pending against
Sprint Spectrum. Management cannot predict the final outcome of these actions
but believes they will not be material to the consolidated financial statements.
- --------------------------------------------------------------------------------
5. Supplemental Cash Flows Information
- --------------------------------------------------------------------------------
Sprint Spectrum's cash paid for interest, net of capitalized interest, totaled
$224 million in the first six months of 1999 and $63 million in the same 1998
period.
Sprint Spectrum's noncash activities included the following:
Year-to-Date
June 30,
-------------------------
1999 1998
- -------------------------------------------------------
(millions)
Accrued interest converted
to long-term debt $ - $ 78
-------------------------
Noncash activity in
partners' capital $ 18 $ -
-------------------------
<PAGE>
Part I.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF Sprint Spectrum L.P.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
General
- --------------------------------------------------------------------------------
In November 1998, Sprint Corporation purchased the remaining ownership interests
in Sprint Spectrum Holding Company, L.P.--Sprint Spectrum's general partner--and
MinorCo,L.P.--Sprint Spectrum's limited partner--from Tele-Communications, Inc.,
Comcast Corporation and Cox Communications, Inc. At that time, Sprint created
the Sprint PCS Group, which consists of Sprint's domestic wireless personal
communication services (PCS) operations, including Sprint Spectrum.
- --------------------------------------------------------------------------------
Forward-Looking Information
- --------------------------------------------------------------------------------
Sprint Spectrum includes certain estimates, projections and other
forward-looking statements in its reports, in presentations to analysts and
others, and in other publicly available material. Future performance cannot be
ensured. Actual results may differ materially from those in the forward-looking
statements. Some factors that could cause actual results to differ include:
- the effects of vigorous competition in the markets in which Sprint
Spectrum operates;
- the costs and business risks related to entering and expanding new
markets necessary to provide nationwide service and new services;
- the ability of Sprint Spectrum to grow its market presence;
- the impact of any unusual items resulting from ongoing evaluations of
Sprint Spectrum's business strategies;
- unexpected results of litigation filed against Sprint Spectrum;
- the impact of the Year 2000 issue and any related noncompliance; and
- the possibility of one or more of the markets in which Sprint Spectrum
competes being impacted by changes in economic or other factors such as
legal and regulatory changes or other external factors over which
Sprint Spectrum has no control.
The words "estimate," "project," "intend," "expect," "believe" and similar
expressions are intended to identify forward-looking statements. Forward-looking
statements are found throughout "Management's Discussion and Analysis of
Financial Condition and Results of Operations". The reader should not place
undue reliance on forward-looking statements, which speak only as of the date of
this report. Sprint Spectrum is not obligated to publicly release any revisions
to forward-looking statements to reflect events after the date of this report or
unforeseen events.
- --------------------------------------------------------------------------------
Results of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Selected Operating Results
---------------------------------------------------------------------
Quarters Ended
June 30, Variance
---------------------------------- -------------------------------
1999 1998 $ %
- ---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 491 $ 192 $ 299 155.7%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------
Operating expenses
Costs of services and products 272 205 67 32.7%
Selling, general and administrative 344 223 121 54.3%
Depreciation and amortization 176 150 26 17.3%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------
Total operating expenses 792 578 214 37.0%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------
Operating loss $ (301) $ (386) $ 85 22.0%
-- ------------- -- -------------- -- -------------
Operating loss before depreciation and
amortization $ (125) $ (236) $ 111 47.0%
-- ------------- -- -------------- -- -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Selected Operating Results
---------------------------------------------------------------------
Year-to-Date
June 30, Variance
---------------------------------- -------------------------------
1999 1998 $ %
- ---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 931 $ 336 $ 595 177.1%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------
Operating expenses
Costs of services and products 653 374 279 74.6%
Selling, general and administrative 627 448 179 40.0%
Depreciation and amortization 345 264 81 30.7%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------
Total operating expenses 1,625 1,086 539 49.6%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------
Operating loss $ (694) $ (750) $ 56 7.5%
-- ------------- -- -------------- -- -------------
Operating loss before depreciation and
amortization $ (349) $ (486) $ 137 28.2%
-- ------------- -- -------------- -- -------------
</TABLE>
The wireless industry typically generates a significantly higher number of
subscriber additions and handset sales in the fourth quarter of each year
compared to the remaining quarters. This is due to the use of retail
distribution, which is dependent on the holiday shopping season; the timing of
new products and service introductions; and aggressive marketing and sales
promotions.
Sprint Spectrum markets its products through multiple distribution channels,
including its own retail stores as well as other retail outlets. Equipment sales
to one retailer, and the related service revenues generated by such sales,
accounted for approximately 30% of net operating revenues in the 1999 second
quarter and year-to-date periods.
Net Operating Revenues
Net operating revenues include subscriber revenues, roaming revenues and sales
of handsets and accessory equipment. Subscriber revenues consist of monthly
recurring charges and usage charges. Net operating revenues increased 156% in
the 1999 second quarter and 177% in the 1999 year-to-date period from the same
1998 periods reflecting an increased customer base over the past 12 months.
Approximately 15% of the 1999 second quarter and 20% of the 1999 year-to-date
net operating revenues and 15% of the 1998 second quarter and year-to-date net
operating revenues were from sales of handsets and accessories. As part of
Sprint Spectrum's marketing plans, handsets are normally sold at prices below
Sprint Spectrum's cost.
Operating Expenses
Costs of services and products mainly includes handset and accessory costs,
interconnection costs, and switch and cell site expenses. These costs increased
33% in the 1999 second quarter and 75% in the 1999 year-to-date period from the
same 1998 periods reflecting the significant growth in customers and expanded
market coverage, partly offset by a reduction in handset unit costs.
Selling, general and administrative (SG&A) expense mainly includes salary and
benefit costs as well as marketing costs to promote products and services. SG&A
expense increased 54% in the 1999 second quarter and 40% in the 1999
year-to-date period from the same 1998 periods reflecting an expanded workforce
to support subscriber growth and increased marketing and selling costs. SG&A
also includes costs related to Sprint Spectrum's efforts to achieve Year 2000
compliance.
Depreciation and amortization expense consists of depreciation of network assets
and amortization of intangible assets. The intangible assets include PCS
licenses, which are amortized over 40 years, and microwave relocation costs,
which are amortized over the remaining life of the related PCS licenses.
Depreciation and amortization expense increased 17% in the 1999 second quarter
and 31% in the 1999 year-to-date period from the same 1998 periods reflecting
depreciation of the network assets placed in service during 1999 and 1998.
<PAGE>
- --------------------------------------------------------------------------------
Interest Expense
- --------------------------------------------------------------------------------
Interest expense increased 35% in the 1999 second quarter and 41% in the 1999
year-to-date periods from the same 1998 periods reflecting increased borrowings.
- --------------------------------------------------------------------------------
Extraordinary Item
- --------------------------------------------------------------------------------
In the 1999 first quarter, Sprint Spectrum terminated its revolving credit
facilities and repaid, prior to scheduled maturities, the related outstanding
balance of $1.7 billion. These facilities had interest rates ranging from 5.6%
to 6.3%. These repayments resulted in a $33 million extraordinary loss. These
short-term borrowings were repaid with long-term financing provided by Sprint.
- --------------------------------------------------------------------------------
Liquidity and Capital Resources
- --------------------------------------------------------------------------------
Sprint Spectrum's liquidity and capital resources are managed by Sprint. Sprint
funds the Sprint PCS Group's, including Sprint Spectrum's, operating losses,
working capital and debt service requirements.
- --------------------------------------------------------------------------------
Year 2000 Issue
- --------------------------------------------------------------------------------
The "Year 2000" issue affects Sprint Spectrum's installed computer systems,
network elements, software applications, and other business systems that have
time-sensitive programs that may not properly reflect or recognize the year
2000. Because many computers and computer applications define dates by the last
two digits of the year, ''00'' may not be properly identified as the year 2000.
This error could result in miscalculations or system failures. The Year 2000
issue may also affect the systems and applications of Sprint Spectrum's
customers, vendors, resellers or affiliates.
Sprint Spectrum has completed an inventory and assessment of its computer
systems, network elements, software applications, products and other business
systems. Sprint Spectrum has also completed the renovation of its computer
systems and other business systems. Substantially all of Sprint Spectrum's
software applications and network elements are renovated. Testing began in the
1999 first quarter and is forecasted to be completed by year-end. Sprint
Spectrum is using both internal and external resources to identify, correct or
reprogram, and test its systems for Year 2000 compliance. It expects Year 2000
compliance for these critical systems to be achieved in 1999.
Sprint Spectrum is also contacting others with whom it conducts business to
receive the proper warranties and assurances that those third parties, including
affiliates, are or will be Year 2000 compliant. Sprint Spectrum relies on
third-party vendors for a significant portion of its important operating and
computer system functions and is highly dependent on those third-party vendors
to remediate and test network elements, computer systems, software applications
and other business systems. However, Sprint Spectrum is reviewing test results
provided by its vendors to help ensure Year 2000 compliance. In addition,
Sprint Spectrum uses publicly available services that are acquired without
contract, such as global positioning system timing signal, that may be affected
by the Year 2000 issue. While Sprint Spectrum believes these publicly available
systems will be Year 2000 compliant, it has no contractual or other right to
force compliance.
Sprint Spectrum incurred approximately $25 million from inception through June
1999 for its Year 2000 remediation program and expects to incur approximately
$25 million through the remainder of 1999. This program is designed to assure
the proper functioning of critical and secondary elements for Year 2000
compliance. When this program is fulfilled, Sprint Spectrum has a high degree of
confidence that elements within its control will function through the upcoming
date changes. However, two risks remain: (1) the risk to Sprint Spectrum if its
Year 2000 program is not fulfilled, and (2) the risk stemming from elements
vulnerable to the Year 2000 problem which are beyond Sprint Spectrum's control.
If the Year 2000 program is not fulfilled in a timely manner by Sprint Spectrum,
or any of its affiliates or any significant third party does not fulfill its own
Year 2000 program in a timely manner, the Year 2000 issue could have a material
adverse effect on Sprint Spectrum's operations. Sprint Spectrum is focusing on
identifying and addressing all aspects of its operations that may be affected by
the Year 2000 issue.
With regards to the second risk, Sprint Spectrum is evaluating events beyond its
control that could occur before and after the arrival of the year 2000. Sprint
Spectrum is reviewing its existing disaster recovery plans and developing
additional contingency and business continuity plans to prepare for the year
2000. Most of these were completed in the second quarter. Sprint Spectrum will
implement, if necessary, appropriate contingency and business continuity plans
to mitigate to the extent possible the effects of any Year 2000 noncompliance.
Sprint Spectrum has begun to review the risks related to a worst case scenario
that could result from a Year 2000 related failure. This scenario could result
in a temporary disruption to normal business operations and could impact Sprint
Spectrum's financial performance. Based upon the work completed to date, Sprint
Spectrum believes that such an occurrence is unlikely. Nevertheless, certain
elements related to the Year 2000 readiness of suppliers, utilities,
interconnecting carriers and customers are beyond Sprint Spectrum's control and
could fail. At this point, Sprint Spectrum does not believe that the failure of
such elements could cause a major breakdown within its normal operations.
<PAGE>
Part I.
Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES Sprint Spectrum L.P.
ABOUT MARKET RISK
Omitted under the provisions of General Instruction H.
Part II.
Other Information
Item 1. Legal Proceedings
There were no reportable events during the quarter ended June 30, 1999.
Item 2. Changes in Securities
Omitted under the provisions of General Instruction H.
Item 3. Defaults Upon Senior Securities
Omitted under the provisions of General Instruction H.
Item 4. Submission of Matters to a Vote of Security Holders
Omitted under the provisions of General Instruction H.
Item 5. Other Information
There were no reportable events during the quarter ended June 30, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
(3.1) Certificate of Limited Partnership of Sprint Spectrum L.P.
(incorporated by reference to Exhibit 3.2 to Sprint Spectrum's
Form S-1 Registration Statement, Registration No. 333-06609,
filed on June 21, 1996).
(3.2) Agreement of Limited Partnership of MajorCo Sub, L.P. (renamed
Sprint Spectrum L.P.), dated as of March 28, 1995, among
MajorCo, L.P. (renamed Sprint Spectrum Holding Company, L.P.)
and MinorCo, L.P. (incorporated by reference to Exhibit 3.6 to
Sprint Spectrum's Form S-1 Registration Statement,
Registration No. 333-06609, filed on June 21, 1996).
(10.1) Procurement and Services Contract, dated as of January 31,
1996, between MajorCo, L.P. and AT&T Corp. Portions of this
exhibit (indicated by brackets) have been omitted pursuant to
a request for confidential treatment.
(10.2) Amendment No. 2 to the Lucent Technologies/Sprint Spectrum
Procurement and Services Contract, dated as of July 15, 1996
between Sprint Spectrum Equipment Company, L.P. and Lucent
Technologies, Inc. Portions of this exhibit (indicated by
brackets) have been omitted pursuant to a request for
confidential treatment.
(10.3) Amended and Restated Procurement and Services Contract, dated
as of October 9, 1996 between Sprint Spectrum Equipment
Company, L.P. and Lucent Technologies, Inc. Portions of this
exhibit (indicated by brackets) have been omitted pursuant to
a request for confidential treatment.
(10.4) Amendment No. 1 dated as of February 25, 1997, to the Amended
and Restated Procurement and Services Contract dated as of
October 9, 1996, between Sprint Spectrum Equipment Company,
L.P. and Lucent Technologies Inc.
(10.5) Amendment No. 2 dated May 8, 1998 to Amended and Restated
Procurement and Services Contract dated October 9, 1996,
between Lucent Technologies Inc. and Sprint Spectrum Equipment
Company, L.P. Portions of this exhibit (indicated by
brackets) have been omitted pursuant to a request for
confidential treatment.
(10.6) PCS Software License and Purchase Agreement dated October 8,
1996 between Sprint Spectrum Equipment Company,L.P. and Lucent
Technologies, Inc. Portions of this exhibit (indicated by
brackets) have been omitted pursuant to a request for
confidential treatment.
(10.7) Procurement and Services Contract, dated as of January 31,
1996, between MajorCo, L.P. and Northern Telecom Inc. Portions
of this exhibit (indicated by brackets) have been omitted
pursuant to a request for confidential treatment.
(10.8) Amendment No. 2 dated as of January 29, 1997, between Sprint
Spectrum Equipment Company, L.P. and Northern Telecom Inc.
Portions of this exhibit (indicated by brackets) have been
omitted pursuant to a request for confidential treatment.
(10.9) Purchase and Supply Agreement, dated as of June 21, 1996,
between Sprint Spectrum L.P., QUALCOMM Personal Electronics,
QUALCOMM Incorporated and Sony Electronics Inc. Portions of
this exhibit (indicated by brackets) have been omitted
pursuant to a request for confidential treatment.
(10.10) Amendment No. 1, dated as of October 24, 1996, to the Purchase
and Supply Agreement dated as of June 21, 1996, between Sprint
Spectrum L.P., QUALCOMM Personal Electronics, QUALCOMM
Incorporated and Sony Electronics Inc. Portions of this
exhibit (indicated by brackets) have been omitted pursuant to
a request for confidential treatment.
(10.11) Master Agreement, dated as of September 1996, between Sprint
Communications Company, L.P. Sprint Spectrum L.P., Sprint
United Management Company and Tandy Corporation, a Delaware
corporation acting by and through its RadioShack division.
Portions of this exhibit (indicated by brackets) have been
omitted pursuant to a request for confidential treatment.
(27) Financial Data Schedule
(a) June 30, 1999
(b) March 31, 1999 Restated
(c) December 31, 1998 Restated
(d) September 30, 1998 Restated
(e) June 30, 1998 Restated
(f) March 31, 1998 Restated
(g) December 31, 1997 Restated
(h) September 30, 1997 Restated
(i) June 30, 1997 Restated
(j) March 31, 1997 Restated
(k) December 31, 1996 Restated
(b) Reports on Form 8-K
Sprint Spectrum filed a Current Report on Form 8-K dated June 13, 1999,
in which it reported that Deloitte & Touche LLP, the independent
auditors for Sprint Spectrum Holding Company, L.P., and its
subsidiaries, including Sprint Spectrum, had been replaced by
Ernst & Young LLP.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPRINT SPECTRUM L.P.
----------------------------------------------------------
(Registrant)
/s/ William J. Gunter
----------------------------------------------------------
William J. Gunter
Chief Financial Officer
Principal Financial Officer
Date: August 16, 1999
<PAGE>
<TABLE>
<CAPTION>
Part I.
Item 1.
Sprint Spectrum Finance Corporation
- --------------------------------------------------------------------------------------------------------------------
BALANCE SHEETS (Unaudited)
June 30, December 31,
1999 1998
- --------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholder's Equity
<S> <C> <C>
Payable to Sprint Spectrum, L.P. $ 1,497 $ 1,497
-------------------------------
Shareholder's equity
Common stock, $1.00 par value; 1,000 shares authorized;
100 shares issued and outstanding 100 100
Accumulated deficit (1,597) (1,597)
-------------------------------
Total shareholder's equity (1,497) (1,497)
-------------------------------
Total $ - $ -
-------------------------------
</TABLE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Sprint Spectrum Finance Corporation, a wholly owned subsidiary of Sprint
Spectrum L.P., was formed to be a co-obligor of certain securities issued by
Sprint Spectrum. Sprint Spectrum Finance Corporation has nominal assets and did
not conduct any operations during 1999 and 1998. As a result, the Statements of
Operations and Statements of Cash Flows have been omitted.
Part I.
Item 2.
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Sprint Spectrum Finance Corporation had no operations during 1999 and 1998.
Part I.
Item 3.
- --------------------------------------------------------------------------------
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Omitted under the provisions of General Instruction H.
<PAGE>
Part II.
Other Information
Item 1. Legal Proceedings
There were no reportable events during the quarter ended June 30, 1999.
Item 2. Changes in Securities
Omitted under the provisions of General Instruction H.
Item 3. Defaults Upon Senior Securities
Omitted under the provisions of General Instruction H.
Item 4. Submission of Matters to a Vote of Security Holders
Omitted under the provisions of General Instruction H.
Item 5. Other Information
There were no reportable events during the quarter ended June 30, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
(3.1) Certificate of Incorporatio of Sprint Spectrum Finance
Corporation (incorporated by reference to Exhibit 3.3 to
Sprint Spectrum's Form S-1 Registration Statement,
Registration No. 333-06609, filed on June 21, 1996).
(3.2) Bylaws of Sprint Spectrum Finance Corporation (incorporated
by reference to Exhibit 3.4 to Sprint Spectrum's Form S-1
Registration Statement, Registration No. 333-06609, filed on
June 21, 1996).
(27) Financial Data Schedule
(a) June 30, 1999
(b) Reports on Form 8-K
Sprint Spectrum Finance Corporation filed a Current Report on Form 8-K
dated June 13, 1999, in which it reported that Deloitte & Touche LLP,
the independent auditors for Sprint Spectrum Holding Company, L.P., and
its subsidiaries, including Sprint Spectrum Finance Corporation, had
been replaced by Ernst & Young LLP.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPRINT SPECTRUM FINANCE CORPORATION
----------------------------------------------------------
(Registrant)
/s/ William J. Gunter
----------------------------------------------------------
William J. Gunter
Vice President, Treasurer and Director
Principal Financial Officer
Date: August 16, 1999
Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
PROCUREMENT AND SERVICES CONTRACT
---------------------------------
between
MAJORCO L.P.,
Owner
and
AT&T CORP.,
Vendor
Dated as of January 31, 1996
<PAGE>
PROCUREMENT AND SERVICES CONTRACT
---------------------------------
This Procurement and Services Contract (the "Contract") is made and is
effective as of January 31, 1996 (the "Effective Date"), by and between MajorCo
L.P., a Delaware limited partnership (the "Owner"), and AT&T Corp., a New York
corporation by and through its Network Systems Group (the "Vendor" and, together
with the Owner, the "Parties").
RECITALS:
--------
A. The Federal Communications Commission (the "FCC") granted to the
Owner or certain of its Affiliates (as defined below) personal communications
services licenses (the "PCS FCC Licenses") to build and operate PCS Systems (as
defined below) in specified geographic areas in the United States;
B. The Owner desires to have the Vendor engineer and construct PCS
Systems in the geographic areas specified on Schedule 4 (collectively, the
"System Areas") pursuant to the terms of this Contract;
C. The Vendor, itself or through its Subcontractors (as defined below),
desires to provide Products (as defined below) and Services (as defined below)
to the Owner in connection with the engineering and construction of PCS Systems
in the System Areas, including, but not limited to, the Vendor's obligation to
engineer, equip, install, build, test and service an operating PCS System in
each System Area in accordance with the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth in this Contract, the Owner and the Vendor hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Definitions. In addition to the terms listed below, certain
-----------
additional terms are defined in the Exhibits, subject to the provisions of
subsection 1.2 hereof. As used in this Contract, the following terms have the
following meanings:
"AAA" means the American Arbitration Association.
---
"Acceptance Certificates" means the collective reference to the
-----------------------
Factory Test Certificate, the Initial PCS System Certificate, the Substantial
Completion Certificate and the Final Acceptance Completion Certificate.
"Acceptance Tests" means the collective reference to the performance
----------------
and reliability demonstrations and tests specified in Exhibits B1, B2 and B3 to
determine whether the Products, the Services, any of the PCS Systems and/or the
System meet the Specifications and the terms and conditions of any applicable
order and this Contract.
<PAGE>
2
"Additional Affiliate Agreement" has the meaning ascribed thereto in
------------------------------
subsection 3.3.
"Additional Affiliate Arrangement" means a formal arrangement between
--------------------------------
the Owner and a Person to be designated an Additional Affiliate under the terms
of this Contract, which arrangement will include, but not be limited to,
agreements on marketing, backhaul, common billing, resale agreements and/or
revenue sharing.
"Additional Affiliate" has the meaning ascribed thereto in
--------------------
subsection 3.1.
"Affiliates" means the collective reference to the Initial
----------
Affiliates and the Additional Affiliates.
"Annual Release Maintenance Fees" means those recurring annual fees of
-------------------------------
the Vendor, usually invoiced annually in January, the Owner's payment of which
entitles the Owner to receive all Combined Software Releases, Software
Enhancements, and Software Upgrades applicable to PCS Products (but not Optional
Software Features) which will be made available to the Owner when made generally
available to the Vendor's Customers during the period for which the fees were
paid. All Annual Release Maintenance Fees will be as in the Vendor's Customer
Price Guides (subject to Section 26) except as otherwise set forth on Schedule
3. The Annual Release Maintenance Fees applicable to the Owner will for the
period from the Effective Date until the Final Acceptance of the last PCS System
within the Initial System always cover at least those PCS Products included in
the Initial System.
"ANSI" means the American National Standards Institute.
----
"APC" means American PCS, L.P., a Delaware limited partnership.
---
"Applicable Laws" means, as to any Person, the certificate of
---------------
incorporation and by-laws or other organizational or governing documents of such
Person, all United States or foreign laws (including, but not limited to, any
Environmental Laws), treaties, ordinances, judgments, decrees, injunctions,
writs, orders and stipulations of any court, arbitrator or governmental agency
or authority and statutes, rules, regulations, orders and interpretations
thereof of any federal, state, provincial, county, municipal, regional,
environmental or other Governmental Entity, instrumentality, agency, authority,
court or other body (i) applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject or (ii)
having jurisdiction over a or any part of any PCS System, the System or the Work
to be performed pursuant to the terms of this Contract.
"Applicable Permits" means any waiver, exemption, zoning, building,
------------------
variance, franchise, permit, authorization, approval, license or similar order
of or from any United States, foreign, federal, state, provincial, county,
municipal, regional, environmental or other governmental body, instrumentality,
agency, authority, court or other body having jurisdiction over all or any part
of any PCS System, the System or the Work to be performed pursuant to the terms
of this Contract.
<PAGE>
3
"AT&T Assignment" has the meaning ascribed thereto in subsection
---------------
27.22
"Backwards Compatibility" or "Backwards Compatible" means that any
-------------------------------------------------
referenced prior Software Revision Level or Levels of the applicable Software
and any referenced prior Equipment Revision Level or Levels of the applicable
Equipment, as the case may be, remain fully functional in accordance with and up
to the performance levels to which it was performing immediately prior to any
such enhancement and/or revision after the integration with the succeeding
Software Revision Level or Equipment Revision Level, as the case may be, and
that after such integration such prior Software Revision Level or Equipment
Revision Level loses no functionality and such succeeding Software Revision
Level or Equipment Revision Level interoperates with all such functionalities of
such prior Software Revision Level or Equipment Revision Level.
"Base Station ("BTS")" means the radio subsystem that handles the
--------------------
Owner's PCS radio traffic in a designated cell. The Base Station includes all
amplification, modulation, synchronization and other circuitry required to
process a radio signal. The inputs to a Base Station are a landline or radio
signal (e.g., T1) and the radio signal that is fed into antenna lines.
"best efforts" means a Party's best efforts under the circumstances,
------------
provided that the use of best efforts will not require the Party to breach any
- - - -------- ----
outstanding contract or to violate any Applicable Law.
"Bolt-down" means for the purposes of each PCS Product all work that
---------
needs to be done by the Vendor in order to permanently and securely place such
PCS Product in its appropriate location within the relevant System Element
Location, provided that Bolt-down will not necessarily constitute installation
-------- ----
of any such PCS Product.
"Building Ready Date" has the meaning ascribed thereto in subsection
-------------------
2.5.
"Build Notice" has the meaning ascribed thereto in subsection 2.7a.
------------
"Business Day" means any day of the year other than a Saturday,
------------
Sunday or a United States national holiday.
"Cable Microcell Integrator ("CMI")" means a form of cable microcell
----------------------------------
integrator that provides for transportation of wireless communication signals
over a cable TV distribution plant. The CMI takes certain signals from the
cable TV distribution plant (the "cable PCS band or bands") and suitably
heterodynes, filters and amplifies these signals such that they can be radiated
by a CMI antenna or antennas in the designated PCS band to PCS wireless
handsets. The CMI takes signals received from the PCS wireless handsets from
one or more CMI receiving antennas and suitably heterodynes, filters and
amplifies these signals for transportation by the cable TV distribution plant to
a Headend Interface Converter ("HIC") or Distributive Cable Access Provider
("DCAP") at a PCS Base Station. Additionally, the CMI unit responds to control
signaling and provides status signals. The CMI is normally collocated with the
cable TV distribution plant and takes power from the cable plant.
<PAGE>
4
"CDMA" means code division multiple access as specified in ANSI-J-
----
STD-008.
"Change Orders" has the meaning ascribed thereto in subsection 7.2.
-------------
"Civil Work" means the labor and materials necessary in the
----------
performance of demolition, construction and renovation work (e.g., roads,
grading, fencing and structural improvements, including, but not limited to, any
buildings, towers and antennas) in order to construct a System Element Facility
in accordance with Exhibit E.
"Completion Cure Period" has the meaning ascribed thereto in
----------------------
subsection 15.3(a).
"Configuration Engineering" means the engineering required to
-------------------------
establish System Element configuration including, without limitation, preparing
component, inventory (including T1 quantities and configurations) and layout
drawings, Equipment labels, cable tray layout drawings, and "as-built" drawings
and Documentation. Configuration Engineering also includes the design, power
distribution and supply for each of the System Elements.
"Continental" means Continental Cablevision, Inc.
-----------
"Contract" has the meaning ascribed thereto in the prefatory paragraph
--------
to this Contract. "Contract" will in all instances include all Exhibits,
Schedules and Specifications and will, unless specifically stated otherwise,
always be deemed to include all amendments, modifications and supplements to the
Contract or any part thereof (including any Exhibits, Schedules or the
Specifications) pursuant to the terms of this Contract.
"Contract Price" has the meaning ascribed thereto in subsection 6.1.
--------------
"Customer" means any PCS customer of the Vendor doing business in
--------
North America or any PCS customer doing business in North America of any of the
Vendor's affiliates or subsidiaries.
"Customer Price Guide" means the Vendor's published "Network Wireless
--------------------
Systems Price Reference Guide" or other price notification releases furnished
for the purpose of communicating the Vendor's list pricing or pricing related
items applicable to PCS Products to Customers intending to operate PCS systems
in the United States, provided that the term does not necessarily include firm
-------- ----
price quotes.
"Custom Material" has the meaning ascribed thereto in subsection
---------------
11.9.1.
"Customer Service Request ("CSR")" has the meaning ascribed thereto
--------------------------------
in subsection 2.26.2.
<PAGE>
5
"Defects and Deficiencies," "Defects or Deficiencies" or "Defective"
------------------------------------------------------------------
means any one or a combination of the following items or other items of a
substantially similar nature:
(a) when used with respect to the performance of labor or service items
of Work (including any work by any Subcontractor), such items that are not
provided in a workmanlike manner and in accordance with the standards and/or
Specifications set forth herein;
(b) when used with respect to structures, materials, Equipment and
Software items of Work (including any Work by any Subcontractor), such items
that are not (i) new and of good quality and free from improper workmanship and
defects in accordance with the standards and/or Specifications set forth herein
or established hereunder and standards of good procurement, manufacturing and
construction standards, or (ii) free from errors and omissions in design or
engineering services in light of such standards; or
(c) in general, (i) Work (including any Work by any Subcontractor) that
does not conform to the Specifications and/or requirements of this Contract, or
(ii) any design, engineering, start-up activities, materials, Equipment,
Software, tools, supplies, Installation or Training that (1) does not conform to
the standards and/or Specifications set forth herein or established hereunder,
(2) has improper or inferior workmanship, (3) would materially and adversely
affect the ability of the System and/or any PCS System and/or any material part
thereof to meet the performance criteria specified in Exhibit F on a consistent
and reliable basis or (4) would materially and adversely affect the continuous
operation of the System and/or any PCS System or any material part thereof in
accordance with the standards and/or Specifications set forth herein or
established hereunder. Defects and Deficiencies will be deemed to exist when
actually discovered or when they should have been apparent to a Person in the
Vendor's position after reasonable inspection and testing.
"Discontinued Products" has the meaning ascribed thereto in
---------------------
subsection 10.1.
"Documentation" means the documentation for the System and/or any
-------------
PCS System and/or any material part thereof.
"Effective Date" has the meaning ascribed thereto in the prefatory
--------------
paragraph to this Contract.
"E1 Emergency Condition ("E1")" has the meaning ascribed thereto in
-----------------------------
subsection 2.26.3(b).
"E2 Emergency Condition ("E2")" has the meaning ascribed thereto in
-----------------------------
subsection 2.26.3(b).
"Emergency Technical Assistance ("ETA")" means the provision of
--------------------------------------
emergency technical assistance to the Owner for the purpose of diagnosing and
resolving a
<PAGE>
6
problem which adversely affects the System and/or any PCS System and/or a
material part thereof, its operation and/or its service pursuant to and in
connection with subsection 2.26.3.
"Engineer" means the engineer or engineers appointed from time to time
--------
by the Owner to do certain work and/or inspections and reviews on behalf of the
Owner and/or provide advice or information to the Owner in connection with the
System and/or any PCS System and/or any part thereof.
"Engineering" means all of the engineering required to be done by the
-----------
Vendor to complete the System in accordance with the Specifications including,
but not limited to, RF Engineering, Configuration Engineering and Facilities
Engineering done in accordance with the Specifications and the CDMA standards.
"Environmental Laws" means any and all United States and foreign,
------------------
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Entity, or
requirements of law (including, without limitation, common law) relating in any
manner to contamination, pollution, or protection of human health or the
environment, as now or may at any time hereafter be in effect.
"Equipment" means all equipment, hardware and other items of personal
---------
property which are required to be furnished by the Vendor or any Subcontractor
pursuant to and in accordance with the terms and conditions of this Contract and
in connection with the System and/or any PCS System and/or any part thereof in
accordance with the Specifications including, without limitation, additional
equipment required as a result of the expansion or additional coverage required
pursuant to subsection 2.2, or otherwise pursuant to the terms of this Contract,
and the equipment listed on Exhibit D or on Schedule 7 (parts A and B).
"Equipment Combined Release" has the meaning ascribed thereto in
--------------------------
subsection 13.1(a).
"Equipment Enhancements" means modifications or improvements made to
----------------------
the PCS Equipment which improve performance or capacity of such Equipment
(sometimes referred to by the Vendor as its "Class B" changes).
"Equipment Revision Level" means each version of an Item of PCS
------------------------
Equipment that reflects any modification or change from the immediately
preceding version of such Item of Equipment.
"Equipment Upgrade" means a change or modification in any delivered
-----------------
PCS Equipment which fixes or otherwise corrects faults, design shortcomings or
shortcomings in meeting the Specifications, required to correct defects of a
type that result in inoperative conditions, unsatisfactory operating conditions,
or which is recommended to enhance safety (sometimes referred to by the Vendor
as its "Class A" changes).
"Escrow Agreement" has the meaning ascribed thereto in subsection
----------------
11.7.
<PAGE>
7
"Exchange Act" has the meaning ascribed thereto in subsection 27.22.
------------
"Expansions" means any additional Products or Services resulting from
----------
a modification by the Owner to the Specifications, the performance criteria set
forth in Exhibit F or the Project Milestones set forth on Exhibit A resulting in
a change to the System and/or any PCS System and/or any material part thereof,
including, but not limited to, the extension or expansion of the System and/or
any PCS System (i) into geographic areas outside of the System Areas covered by
the PCS Systems identified in Schedule 4, or (ii) to increase capacity and/or
performance of the System and/or any PCS System beyond the performance criteria
and/or Specifications originally contemplated herein. Expansions will not
include any additional Products or Services required to meet the Specifications
applicable to the Initial System.
"Extraordinary Transportation" means the Vendor's or its
----------------------------
Subcontractors' transport of Products and/or other materials pursuant to the
terms of this Contract where the circumstances of such transport require the
Vendor to use any one or a combination of the following extraordinary means of
transport and/or extraordinary methods of achieving access to the Owner's
facilities: (i) four-wheel drive vehicle (other than those typically used for
the delivery of Products), (ii) helicopter, (iii) boat, (iv) airplane, (v)
bulldozer, (vi) clear physical obstructions requiring the building of a new road
by the Vendor or its Subcontractors, or (vii) a construction crane.
"Facilities Engineering" means the engineering required to design each
----------------------
System Element Facility including, without limitation, System Element Locations
and System Element layout, drawings and relevant Specifications for the
construction of the buildings, towers, generators, cable and antennae and all
other items required to make the System Element Facility functional. Facilities
Engineering does not include Configuration Engineering.
"Facilities Preparation Services" means all Facilities Engineering,
-------------------------------
Civil Work, Site Plan Architectural Work, Structural Architectural Work, and
Utilities Work, all of which must be performed in accordance with the
Specifications. Pursuant to the definition of Civil Work, Facilities
Preparation Services will (unless otherwise agreed by the Owner) include all
Work to complete the Civil Work in a given System Element Location including,
but not limited to, the supply, building and installation of all buildings,
towers and antennas. Facility Preparation Services does not include Site
Acquisition, Network Interconnection, Microwave Relocation or any of the above
referenced activities for the construction of a Switch Site (except as otherwise
provided in this Contract).
"Facilities Preparation Services Warranty Period" has the meaning
-----------------------------------------------
ascribed thereto in subsection 17.2b.
"Factory Test Certificate" means a document submitted by the Vendor to
------------------------
the Owner and signed by an authorized representative of the Owner and an
authorized officer of the Vendor stating that in accordance with the
requirements of Exhibit B3 and this Contract the Vendor has successfully
completed all factory tests on the PCS Products (of the type to be
<PAGE>
8
installed as part of the Initial System) in accordance with the requirements of
Exhibit B3 and this Contract.
"FCC" has the meaning ascribed thereto in the recitals to this
---
Contract.
"Final Acceptance" means, as to any PCS System, the successful
----------------
completion by the Vendor of all of the final acceptance tests and requirements
applicable to such PCS System set forth in Exhibit B3 in accordance with the
requirements of Exhibit B3 and the terms of this Contract.
"Final Acceptance Completion Certificate" means, with respect to a
---------------------------------------
given PCS System, a document submitted by the Vendor to the Owner and signed by
an authorized representative of the Owner and an authorized officer of the
Vendor stating that the Vendor has successfully completed the Acceptance Tests
and requirements applicable to the Final Acceptance of the Work to be done in
such PCS System in accordance with the requirements of Exhibit B3.
"Final RF Engineering Plan" has the meaning ascribed thereto in
-------------------------
subsection 2.6(c).
"Final RF Review Period" has the meaning ascribed thereto in
----------------------
subsection 2.6(c).
"Final Site Count" has the meaning ascribed thereto in subsection
----------------
2.6(c).
"Financing Interim Period" has the meaning ascribed thereto in
------------------------
subsection 24.9(a).
"Force Majeure" means the following:
-------------
(a) Acts of God, epidemic, earthquake, landslide, lightning, fire,
explosion, accident, tornado, drought, flood, hurricane, or extraordinary
weather conditions more severe than those normally and typically
experienced in the affected area constituted by each of the specified
System Areas in which the Vendor is seeking to claim Contract suspension
due to Force Majeure;
(b) Acts of a public enemy, war (declared or undeclared), blockade,
insurrection, riot or civil disturbance, sabotage, quarantine, or any
exercise of the police power by or on behalf of any public entity;
(c) (i) The valid order, judgment or other act of any federal,
state or local court, administrative agency, Governmental Entity or
authority issued after the Effective Date; (ii) with respect to the
Vendor, the suspension, termination, interruption, denial or failure of
or delay in renewal or issuance of any Applicable Permit required by this
Contract to be obtained by the Owner; (iii) with respect to the Owner,
the suspension, termination, interruption, denial or failure of or delay
in
<PAGE>
9
renewal or issuance of any Applicable Permit required by this Contract to
be obtained by the Vendor; or (iv) a change in Applicable Law (including
the adoption of a new Applicable Law); provided that no such order,
-------- ----
judgment, act, event or change is the result of the action or inaction
of, or breach of this Contract by, the Party relying thereon;
(d) Strikes, boycotts or lockouts, except for any such strike,
boycott or lockout involving the employees of the Vendor or the permanent
employees (not hired on a contract basis) of a Subcontractor (for the
period from the Effective Date until the Final Acceptance of the last PCS
System within the Initial System but in no event to exceed three (3)
years from the Effective Date);
(e) A partial or entire delay or failure of utilities; or
transportation embargoes; or
(f) The presence of (i) any Hazardous Waste on or at any System
Element Location which materially interferes with the Work to be done
thereon or otherwise materially endangers the safety of any personnel at
such location; (ii) any unknown historical or archeological sites which
are not shown or indicated in the survey of any System Element Locations
and of which the Vendor could not have reasonably been expected to be
aware; or (iii) any mining or water recovery activities (other than such
activities by the Vendor or its Subcontractors) at or under any System
Element Location after the Effective Date.
Events of Force Majeure include the failure of a Subcontractor to
furnish labor, services, materials, or equipment in accordance with its
contractual obligations, only if such failure is itself due to an event of Force
Majeure. A Force Majeure does not include any delay in performance to the
extent due to the failure of the Vendor or any Subcontractor to provide an
adequate number of engineers or other workmen or to manufacture or procure an
adequate amount of Equipment, Software and/or Services.
"Governmental Entity" means any nation or government, any state,
-------------------
province or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranteed Substantial Completion Date" means the date which is
--------------------------------------
defined in Exhibit A as "Milestone 8."
"Hazardous Waste" means any and all hazardous or toxic substances,
---------------
wastes, materials or chemicals, petroleum (including crude oil or any fraction
thereof) and petroleum products, asbestos and asbestos-containing materials,
pollutants, contaminants, polychlorinated biphenyls and any and all other
materials, substances, regulated pursuant to any Environmental Laws or that
could result in the imposition of liability under any Environmental Laws.
<PAGE>
10
"Headend Interface Converter ("HIC")" means a form of CMI that
-----------------------------------
provides for transportation of wireless communication signals over a cable TV
distribution plant. The HIC takes signals from the PCS Base Station transmitter
and suitably heterodynes, filters and amplifies these signals for processing by
the PCS Base Station receiver. Additionally, the HIC provides reference and
control signals to the CMI units and receives and processes status signals from
the CMI unit.
"Independent Auditor" means any of the Persons set forth on Schedule
-------------------
15.
"Indemnitees" has the meaning ascribed thereto in subsection 20.2(a)
-----------
"Initial Affiliates" means the collective reference to each of the
------------------
Persons set forth on Schedule 5.
"Initial Affiliate Agreement" has the meaning ascribed thereto in
---------------------------
subsection 3.2.
"Initial Commitment" has the meaning ascribed thereto in subsection
------------------
7.1.
"Initial PCS System" means that PCS System, or a portion thereof,
------------------
designated by the Owner within one hundred twenty (120) days of the Effective
Date as the Initial PCS System in which Substantial Completion must take place
in accordance with the terms of Exhibit B3 prior to and as a condition of the
Owner's acceptance of Substantial Completion of any other PCS System within the
Initial System; provided that at any time after the designation of the Initial
-------- ----
PCS System prior to the Substantial Completion of the first PCS System within
the Initial System the Parties may mutually agree to change the designation of
the Initial PCS System; provided further that in the event the Parties are
-------- -------
unable or unwilling to mutually agree on such redesignation of the Initial PCS
System in good faith within a reasonable time, for the purposes hereof the first
PCS System within the Initial System to actually achieve Substantial Completion
in accordance with and pursuant to the terms of Exhibit A1 and Exhibit B3 will
be deemed to be the Initial PCS System.
"Initial PCS System Certificate" means a document submitted by the
------------------------------
Vendor to the Owner and signed by an authorized representative of the Owner and
an authorized officer of the Vendor stating that the Vendor has successfully
completed the Acceptance Tests applicable to the Initial PCS System in
accordance with the requirements of Exhibit B3.
"Initial System" means the build-out of that portion of the System
--------------
Areas as shown on Schedule 4 prior to any Expansions or Owner requests for
additional coverage for such System Areas pursuant to the terms of this
Contract.
"Initial Term" has the meaning ascribed thereto in subsection 5.1.
------------
"In Revenue Service" or "In Revenue" means the commercial operation of
----------------------------------
any PCS System, or a portion thereof, exclusive of operation for purposes of
conducting Acceptance Tests; provided that In Revenue Service or In Revenue will
-------- ----
not by itself
<PAGE>
11
constitute acceptance in accordance with the terms of this Contract of any such
PCS System or any portion thereof.
"Inspector" means a qualified Person designated as an authorized
---------
representative of the Owner assigned to make all necessary inspections of the
Work, or of the labor, materials and equipment furnished or being furnished by
the Vendor or any of its Subcontractors at the System Element Locations and the
other sites where the Vendor or any Subcontractor is prosecuting the Work,
subject to appropriate safety, security and confidentiality requirements.
"Installation" or "Installed" means the performance and supervision by
------------ ---------
the Vendor of all installation of Products within the System and/or any PCS
System.
"Intellectual Property Rights" has the meaning ascribed thereto in
----------------------------
subsection 14.2(a)
"Interim Delay Penalty" has the meaning ascribed thereto in
---------------------
subsection 15.2.
"Interim Milestone" has the meaning ascribed thereto in subsection
-----------------
15.2.
"Interoperability" means (i) the ability of the System and/or any PCS
----------------
System and/or any material part thereof to interconnect and successfully operate
with the equipment and software of other Systems and/or PCS Systems and/or any
material part thereof of the Vendor and/or the Other Vendors and/or other
suppliers whose equipment and software also meet the relevant ANSI standards and
other Specifications identified in Exhibit D and (ii) the ability of each of the
Products to operate with one another and to operate with and within the System,
including, but not limited to, the ability of the handsets (to be delivered
pursuant to subsection 2.3) to operate with and within the System, all in
accordance with the Specifications. Since certain sections of the ANSI
standards are currently undefined, and certain sections are left available for
independent development by suppliers, the potential for such interoperability or
incompatibility with properly designed systems exists, and must be resolved by
the Vendor or any Subcontractor providing PCS Systems to the Vendor in
accordance with the terms hereof.
"Item" means any item at any time listed in any of the Vendor's price
----
lists and it specifically includes, without limitation, all Software Upgrades,
Software Enhancements, Equipment Upgrades, Equipment Enhancements and
modifications, enhancements, updates or other revisions of any kind in any such
item, spare parts with respect to any of the foregoing and any other PCS/CDMA
related item.
"Late Completion Payment Cap" has the meaning ascribed thereto in
---------------------------
subsection 15.3
"Late Completion Payments" has the meaning ascribed thereto in
------------------------
subsection 15.3
<PAGE>
12
"Liabilities" has the meaning ascribed thereto in subsection 20.1(a)
-----------
"Liquidated Damages" has the meaning ascribed thereto in subsection
------------------
15.1
"M5 Forecast" has the meaning ascribed thereto in subsection 2.7(a)
-----------
"Maintenance and Instruction Manuals" means the manuals prepared by
-----------------------------------
the Vendor and delivered to the Owner pursuant to subsection 2.21 containing
detailed procedures and specifications for the ongoing maintenance of the
System.
"Major Portion" of the Work means a segregated portion of the Work
-------------
with a cost to the Owner of $10,000,000 or more.
"MFC Certificate" has the meaning ascribed thereto in subsection
---------------
26.1(b)
"Microwave Delay Period" has the meaning ascribed thereto in
----------------------
subsection 2.38(a)
"Microwave Relocation" means the process by which incumbent point to
--------------------
point microwave users of the 1850 - 1990 Mhz frequency spectrum are moved to
other frequencies or alternate transmission facilities in order to clear the
licensed PCS spectrum for broadband wireless service.
"Microwave Relocation Completion" means, with respect to any given PCS
-------------------------------
System, the point at which the Owner will have finished sufficient Microwave
Relocation in such PCS System to permit the commercially viable and marketable
operation of such PCS System in accordance with the terms of this Contract.
"Minimum Commitment" means sixty percent (60%) of the Initial
------------------
Commitment.
"Nationwide Network" means all of the PCS Systems built or to be owned
------------------
and/or operated by the Owner or its Affiliates in North America.
"NDAB" means the New Development Advisory Board established pursuant
----
to the terms of this Contract including subsections 2.11, 2.32 and 2.33.
"Network Interconnection" means the transmission links between Base
-----------------------
Stations and MSCs, between an MSC and another MSC, and between MSCs and PSTNs
but does not include connections between demarcation points of transmission
links and System Elements for which the Vendor will be responsible pursuant to
the terms of this Contract, including its obligations to install and test upon
the Owner's completion of such transmission links. Typically T1 transmission
links are used for connectivity.
"NewTelCo" means NewTelCo. L.P., a Delaware limited partnership.
--------
<PAGE>
13
"Non-Essential Equipment" means a Product other than a PCS Product
-----------------------
obtained from a third party supplier and furnished to the Owner as part of
Facilities Preparation Services in accordance with the terms of this Contract,
which Product will be furnished with an assignable warranty from the such third
party supplier of a length and scope determined by the Parties in the
development of the Specifications in accordance with the terms of Exhibit E for
the Product pursuant to the terms of this Contract, including but not limited
to;
Antennas
Transmission towers
Monopoles
Prefabricated equipment shelters
Power transformers
Batteries
Rectifiers
Uninterrupted power sources.
Non-Essential Equipment does not include normal construction materials
(including, but not limited to pipes, conduits, concrete, fences, lighting and
paving materials) used by the Vendor or its Subcontractors in the performance of
its Facilities Preparation Services.
"North America" means the United States, Canada (including the
-------------
Province of Quebec) and Mexico.
"Notice to Proceed" means a written notice given by the Owner to the
-----------------
Vendor in the form attached hereto as Schedule 9 and in compliance with the
provisions of this Contract, fixing the date on which the Vendor will have the
full right, in accordance with the terms of this Contract, and the full
obligation, subject to the terms of this Contract, to commence the Work to be
performed under this Contract.
"Notice to Proceed Date" means the date on which any Notice to Proceed
----------------------
is issued by the Owner in accordance with the terms of this Contract.
"OCC" has the meaning ascribed thereto in subsection 2.26.2.
---
"OM&P" has the meaning ascribed thereto in subsection 2.23(a).
----
"Operating Manuals" means the manuals to be prepared by the Vendor and
-----------------
delivered to the Owner pursuant to subsections 2.20, 2.22 and 2.23 containing
detailed procedures and specifications for the operation of the System and/or
any part thereof.
"Operative" has the meaning ascribed thereto in subsection 27.26.
---------
"Optional Software Features" means Software features for PCS Products
--------------------------
available to Customers on an optional, separate fee, basis. The initial fees
for such Optional Software Features are not included in Annual Release
Maintenance Fees.
<PAGE>
14
"Other Vendors" means vendors, other than the Vendor, with whom the
-------------
Owner has entered, or may enter in the future, into a contract for the provision
of products and services for the engineering and construction of any portion of
the Nationwide Network. Other Vendors does not include any Subcontractors in
connection with the Work to be performed under this Contract in their capacity
as Subcontractors.
"Outage" has the meaning ascribed thereto in subsection 17.4(b).
------
"Owner" has the meaning ascribed thereto in the prefatory paragraph
-----
to this Contract.
"Owner Loss" means an insured loss incurred by the Owner relating to
----------
the System.
"Owner's Succeeding Entity" has the meaning ascribed thereto in
-------------------------
subsection 27.23.
"Parties" has the meaning ascribed thereto in the prefatory
-------
paragraph to this Contract.
"Patent License" has the meaning ascribed thereto in subsection
--------------
14.5.
"P1 Major Condition ("P1")" has the meaning ascribed thereto in
-------------------------
subsection 2.26.3(g).
"P2 Significant Problem ("P2")" has the meaning ascribed thereto in
-----------------------------
subsection 2.26.3(g).
"P3 Minor Problem ("P3")" has the meaning ascribed thereto in
-----------------------
subsection 2.26.3(g).
"Partners" means the collective reference to Sprint Spectrum, L.P., a
--------
Delaware limited partnership and/or Sprint Corporation ("Sprint"), TCI Network
Services, a Delaware general partnership ("TCI"), Cox Telephony Partnership, a
Delaware general partnership ("Cox"), and Comcast Telephony Services, a Delaware
general partnership ("Comcast").
"PCS" means personal communication services authorized by the FCC.
---
"PCS FCC Licenses" has the meaning ascribed thereto in the recitals
----------------
of this Agreement.
"PCS Products" means the Vendor's PCS Equipment and Software, as
------------
offered from time to time in the Customer Price Guide; provided that for the
-------- ----
purposes of this Contract PCS Products will always (subject to subsection 10.1)
include at least those Items listed on the Vendor's Customer Price Guide as of
the Effective Date. As the context
<PAGE>
15
requires and notwithstanding the above, the term PCS Products includes all
Vendor manufactured Products provided to the Owner in connection with its
obligations pursuant to the terms of this Contract, but excludes Items furnished
solely as part of Facilities Preparation Services not otherwise integral to the
operation or maintenance of the PCS Items set forth on the Customer Price Guide,
including Non-Essential Equipment.
"PCS System" means all Products and other equipment, tools and
----------
software, all System Element Sites and any property located thereat necessary or
desirable to provide PCS in a given specified System Area.
"Person" means an individual, partnership, limited partnership,
------
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity of whatever
nature.
"Phillieco" means Phillieco L.P.
---------
"Preliminary RF Design" means an RF Engineering design which
---------------------
incorporates as many prequalified System Element Locations (including existing
structures and other sites provided by Site Acquisition that have a high
likelihood of meeting the zoning requirements) as possible without compromising
the quality of the System or System Element Location counts, design grids,
signal level plots and prequalified site map overlays for each of the System
Areas. The Preliminary RF Design must also include those Items listed on
Schedule 1. The Preliminary RF Design must be based upon all information
reasonably available to the Vendor or provided to the Vendor by the Owner as of
the Effective Date including, but not limited to, the information set forth in
this Contract.
"Product Warranty Period" has the meaning ascribed thereto in
-----------------------
subsection 17.1(a), 17.1(b).
"Product Contract Price" means, at the time of determination, the
----------------------
Contract Price minus the costs applicable to and actually invoiced to such date
by the Owner pursuant to and in accordance with Section 6 for Facilities
Preparation Services and RF Engineering.
"Products" means the collective reference to the PCS Products, the
--------
Equipment and the Software provided by the Vendor or any Subcontractor pursuant
to and in accordance with the terms of this Contract.
"Project Milestones" means the collective reference to the milestone
------------------
dates and intervals as set forth in Exhibits A1 and A2, each a "Milestone."
"Proprietary Information" has the meaning ascribed thereto in
-----------------------
subsection 27.19(a).
"Punch List" means that list prepared in conjunction with the
----------
Acceptance Tests and included in any Acceptance Certificate, which contains one
or more immaterial non-service-affecting items (specifying the cost of
completing such items either determined as
<PAGE>
16
of the date of the Substantial Completion of the relevant PCS System or within a
reasonable time thereafter) which have not been fully completed by the Vendor as
of the Substantial Completion of any PCS System; provided that such incomplete
--------
portion of the Work will not, during its completion, materially impair the
normal daily operation of such PCS System in accordance with the Specifications.
"Reviewers" has the meaning ascribed thereto in subsection 21.4.
---------
"RF" means radio frequency.
--
"RF Engineering" means radio frequency engineering required in
--------------
connection with the architectural design of the System and/or any PCS System.
"RFP" has the meaning ascribed thereto in subsection 11.9.1(a).
---
"RTM License" has the meaning ascribed thereto in subsection 11.6.
-----------
"RTU License" has the meaning ascribed thereto in subsection 11.1.
-----------
"Services" means the collective reference to all of the services to be
--------
conducted by the Vendor as part of the Work pursuant to the terms of this
Contract including, but not limited to, Installation, Facilities Preparation
Services, RF Engineering, System Maintenance Support, System Support Services
and other repair and maintenance services, performed in accordance with the
terms of this Contract including, but not limited to, the Specifications.
Services does not include Site Acquisition, Network Interconnection or Microwave
Relocation.
"Services Warranty Period" has the meaning ascribed thereto in
------------------------
subsection 17.2(b).
"Site Acquisition" means the services to be performed by the Owner
----------------
and/or its subcontractors necessary for identifying and acquiring sufficient
rights to the System Element Locations within the System Areas including all
requisite zoning approvals and all building approvals required by any
Governmental Entity; provided that Site Acquisition does not include any of the
-------- ----
Site Plan Architectural Work or the Facilities Engineering.
"Site Acquisition Delay Period" has the meaning ascribed thereto in
-----------------------------
subsection 2.41.
"Site Acquisition Substantial Completion" means, with respect to any
---------------------------------------
PCS System, the point at which the Owner will have acquired, by purchase, lease
or otherwise, rights to a sufficient number of System Element Locations within
the specified System Area to be covered by such PCS System such that the
performance criteria specified in Exhibit F applicable to such PCS System would
be substantially satisfied in the reasonable opinion of the Owner subject to the
reasonable acceptance of the Vendor. If the Vendor upon receiving notice from
the Owner that Site Acquisition Substantial Completion has been achieved in any
<PAGE>
17
given PCS System disagrees with the Owner's claim, then the Vendor will have ten
(10) Business Days to detail its disagreement in writing to the Owner and a
Third Party Engineer chosen by the Owner and such Third Party Engineer will have
ten (10) Business Days from the receipt of such writing to make a determination
whether or not the Owner's claim of Site Acquisition Substantial Completion is
reasonable. The Third Party Engineer will have no discretion or authority to
provide the Parties with any answer other than whether in its judgment the
Owner's claim is reasonable. Such determination by the Third Party Engineer
will be final and binding upon the Parties.
"Site Acquisition Substantial Completion Date" means with respect to
--------------------------------------------
any PCS System the date on which the Owner will have achieved Site Acquisition
Substantial Completion.
"Site Plan Architectural Work" means the preparation of architectural
----------------------------
and/or engineering drawings, plans and/or specifications necessary to obtain
zoning permits and/or approvals, building permits and/or approvals and/or
conditional use permits for any given System Element Facility.
"Software" means (a) all computer software furnished hereunder for use
--------
with any Equipment including, but not limited to, computer programs contained on
a magnetic or optical storage medium, in a semiconductor device, or in another
memory device or system memory consisting of (i) hardwired logic instructions
which manipulate data in central processors, control input-output operations,
and error diagnostic and recovery routines, or (ii) instruction sequences in
machine-readable code furnished hereunder that control call processing,
peripheral equipment and administration and maintenance functions, (b) any
Software Enhancements, Software Features and Software Upgrades furnished by the
Vendor to the Owner hereunder, and (c) any Documentation furnished hereunder for
use and maintenance of the Software; provided that no Source Code versions of
-------- ----
Software are included in the term Software.
"Software Combined Release" means a Software Upgrade which is at any
-------------------------
time combined with any Software Enhancement.
"Software Enhancements" means modifications or improvements made to
---------------------
the Software relating to PCS Products which improve performance or capacity of
the Software or which provide additional functions to the Software.
"Software Licenses" means the collective reference to the RTU
-----------------
License and the RTM License.
"Software Revision Level" means each version of Software that reflects
-----------------------
any amendment, modification or change from the immediately preceding version.
"Software Upgrades" means periodic updates to the Software issued by
-----------------
the Vendor to the Owner under Warranty and Software maintenance obligations to
correct Defects or Deficiencies in the Software relating to PCS Products.
<PAGE>
18
"Sony/Qualcomm Agreement" has the meaning ascribed thereto in
-----------------------
subsection 2.3(a).
"Source Code" means Software in human-readable form and all
-----------
documentation, such as flow charts, schematics and annotations, that comprise
the precoding detailed design specifications (which constitutes the "embodiment
of the intellectual property" of the Software (excluding Third Party Software)
as such concept is referenced in Section 365(n) of the United States Bankruptcy
Code, as amended), which is necessary to enable the Owner to maintain and modify
the Software in accordance with the licenses granted in this Contract.
"Specifications" means the collective reference to the specifications
--------------
and performance standards of the design, Facilities Preparation Services,
Engineering, Products, Installation and Services contemplated by this Contract
and includes any Expansions, amendments, modifications and/or other revisions
thereto made in accordance with the terms of this Contract and as more fully set
forth in Exhibits C, D, E and F, or as otherwise determined hereunder pursuant
to the terms of this Contract; provided that, except as otherwise provided in or
-------- ----
determined pursuant to this Contract or as otherwise mutually agreed between the
Parties, the applicable Specifications for an Item will be the Vendor's or other
manufacturer's standard technical specifications for such Item, as applicable,
unless the Owner will have specifically not agreed with such Vendor or other
manufacturer specification; and provided further, that with respect to
-------- -------
Facilities Preparation Services, design, Engineering, Products, Installation and
Services for which specifications and performance standards are not provided and
listed in such Exhibits, "Specifications" refers to performance, functionality
and fitness for the intended purpose in which such design, Facilities
Preparation Services, Engineering, Products, Installation and Services are
employed.
"Structural Architectural Work" means the preparation of all
-----------------------------
architectural drawings and blueprints relating to the structural specifications
for a System Element Facility.
"Subcontractor" means a contractor, vendor, supplier, licensor or
-------------
other Person, having a direct or indirect contract with the Vendor or with any
other Subcontractor of the Vendor who has been hired specifically to assist the
Vendor in certain specified areas of its performance of its obligations under
this Contract including, without limitation, performance of any part of the
Work.
"Substantial Completion" means the point at which the Vendor has
----------------------
completed a portion of the Work other than specified Items set forth on
applicable Punch Lists such that the geographic areas of any System Area as
specified in Schedule 4 all have been covered to the extent set forth in
Schedule 4, in accordance with the Specifications and the System Standards and
as verified to the Owner in accordance with the criteria and requirements set
forth in Exhibit B3.
"Substantial Completion Certificate" means, with respect to a given
----------------------------------
PCS System, a document submitted by the Vendor to the Owner and signed by an
authorized representative of the Owner and an authorized officer of the Vendor
stating that the Vendor
<PAGE>
19
has successfully completed the Acceptance Tests applicable to the Substantial
Completion of the Work to be done in such PCS System in accordance with the
requirements of Exhibit B3.
"Successor" has the meaning ascribed thereto in subsection 27.22.
---------
"Switch Site" means the System Element Location designated by the
-----------
Owner as the site in which it wants the MSC(s) to be Installed in any given PCS
System.
"Switch Site Notice" has the meaning ascribed thereto in subsection
------------------
2.6(d).
"Switch Site Notice Date" has the meaning ascribed thereto in
-----------------------
subsection 2.6(d).
"Switch Site Ready Date" has the meaning ascribed thereto in
----------------------
subsection 2.6(d).
"System" means all of the PCS Systems built by the Vendor in the
------
System Areas allocated to the Vendor pursuant to the terms of this Contract and
as set forth on Schedule 4.
"System Areas" has the meaning ascribed thereto in the recitals to
------------
this Contract.
"System Element" means the Equipment and Software required to perform
--------------
radio, switching and/or system element functions for the System and/or any PCS
System (which may include, without limitation, Base Station ("BTS"), Equipment
Identity Register ("EIR"), Messaging System ("MXE"), Mobile Switching
Center/Visitor Location Register ("MSC/VLR"), Mobile Service Node ("MSN"),
Signal Transfer Point ("STP"), Home Location Register ("HLR"), Service Control
Point ("SCP"), Intelligent Peripheral ("IP") and Access Manager ("AM")).
"System Element Facility" means the structures, improvements,
-----------------------
foundations, towers, and other facilities necessary to house or hold any System
Element and any related Equipment to be located at a particular System Element
Location.
"System Element Location" means the physical location for a System
-----------------------
Element.
"System Element Site" means the collective reference to a particular
-------------------
System Element, together with the related System Element Location and System
Element Facility.
"System Element Verification" means the Vendor's laboratory level
---------------------------
testing on the Products conducted by the Vendor in accordance with Exhibit B3.
"System Maintenance Support" means those Services offered by the
--------------------------
Vendor for maintenance of any of the Products and/or any System Element or
collection thereof.
<PAGE>
20
"System Managers" means each of the managers designated by the Owner
---------------
and the Vendor, respectively, for the purposes of subsection 23.1.
"System Standards" means the collective reference to the industry
----------------
standards specified in Exhibits C, D, F, G and H.
"System Support Services" means those services offered by the Vendor
-----------------------
relating to System design, enhancement and optimization.
"System Warranty Period" has the meaning ascribed thereto in
----------------------
subsection 17.3.
"TCG" means the collective reference to Teleport Communications
---
Group, Inc. and TCG Partners.
"Technical Documentation" means the documentation identified as such
-----------------------
in the Specifications.
"Term" has the meaning ascribed thereto in subsection 5.2.
----
"Test-bed Laboratory" has the meaning ascribed thereto in subsection
-------------------
2.5.
"Third Party Engineer" means any one of the Persons listed on
--------------------
Schedule 14.
"Third Party Software" means Software which is independently developed
--------------------
by a third party, sublicensed to the Owner under this Contract or otherwise
provided with the Products in accordance with the Specifications.
"Training" has the meaning ascribed thereto in subsection 2.23.
--------
"Trouble Report ("TR")" has the meaning ascribed thereto in
---------------------
subsection 2.26.2.
"United States" means the fifty states of the United States and the
-------------
District of Columbia.
"Utilities Work" means the installation of electric and telephone
--------------
utilities at the System Element Locations.
"Vendor" has the meaning ascribed thereto in the prefatory paragraph
------
to this Contract.
"Vendor-Controlled Location" has the meaning ascribed thereto in
--------------------------
subsection 2.12.
<PAGE>
21
"Vendor Developments" has the meaning ascribed thereto in subsection
-------------------
2.11.1.
"Vendor Event of Default" has the meaning ascribed thereto in
-----------------------
subsection 24.2.
"Vendor procedural error" has the meaning ascribed thereto in
-----------------------
subsection 17.4(c).
"Vendor Patents" has the meaning ascribed thereto in subsection
--------------
14.5.
"Vendor's Succeeding Entity" has the meaning ascribed thereto in
--------------------------
subsection 27.22.
"Warranty Damages" has the meaning ascribed thereto in subsection
----------------
17.4(c).
"Warranty Periods" means the collective reference to the Product
----------------
Warranty Period, the Non-Essential Equipment Warranty Period, the Services
Warranty Period and the System Warranty Period.
"Work" means all phases of this Contract, including, as required by
----
the terms of this Contract, engineering and design, procurement, manufacture,
construction and erection, installation, training, start-up (including
calibration, inspection and start-up operation), testing and start-up and
testing operation with respect to the System and/or any PCS System and/or any
part thereof to be performed by the Vendor or its Subcontractors pursuant to
this Contract. As required by the terms of this Contract, Work includes (i) all
labor, materials, equipment, services, and any other items to be used by the
Vendor or its Subcontractors in the prosecution of this Contract, wherever the
same are being engineered, designed, procured, manufactured, delivered,
constructed, installed, trained, erected, tested, started up or operated during
start-up and testing and whether the same are on or are not on any System
Element Location or any other site within the System and/or any PCS System and
(ii) all related items which would be required of a contractor of projects of
comparable size and design which are necessary for the System and/or any PCS
System and/or any part thereof to (x) operate in accordance with all Applicable
Laws and Applicable Permits, and (y) provide the operating personal
communications service systems required pursuant to this Contract. The Vendor
will be responsible for providing in accordance with the terms of this Contract
any and all additional items and services which are not expressly included by
the terms of this Contract and which are reasonably required for construction
and start-up of the System and/or any PCS System.
1.2 Other Definitional Provisions. (a) When used in this Contract,
-----------------------------
unless otherwise specified therein, all terms defined in this Contract will have
the defined meanings set forth herein. Terms defined in the Exhibits are deemed
to be terms defined herein; provided that in the case of any terms that are
-------- ----
defined both in this Contract and/or an Exhibit, the definitions contained in
this Contract will supersede such other definitions for all purposes
<PAGE>
22
of this Contract; provided further, that definitions contained in any Exhibit
-------- -------
will control as to such Exhibit.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Contract refer to this Contract as a whole and not to
any particular provision of this Contract and Section, subsection, Schedule and
Exhibit references are to this Contract unless otherwise specified.
(c) The meanings given to terms defined in this Contract are equally
applicable to both the singular and plural forms of such terms.
SECTION 2 SCOPE OF WORK, RESPONSIBILITIES AND PROJECT
MILESTONES
2.1 Scope of Work. Upon the terms and conditions herein set forth, the
-------------
Vendor will provide all Products and Services to the Owner required for the
establishment of the System including, but not limited to, the Vendor's
obligation to engineer, equip, install, build, test and service the PCS Systems
in the System Areas set forth on Schedule 4 in accordance with the
Specifications and that otherwise satisfies all conditions of Final Acceptance;
provided, that the Vendor will not be responsible for Site Acquisition (except
- - - --------
to the extent certain Facilities Preparation Services, including Site Plan
Architectural Work, are required for the successful completion of Site
Acquisition), Network Interconnection or Microwave Relocation. The Vendor must
complete the Work in accordance with the Project Milestones set forth in Exhibit
A1 and as further specified herein provided that Milestone 5 (as set forth on
-------- ----
Exhibit A1) in any PCS System within the Initial System will in no event be
deemed to have occurred prior to March 31, 1996. The Vendor must furnish all
labor, materials, tools, transportation and supplies required to complete the
Work in accordance with the Specifications and the terms of this Contract.
2.2 Additional Coverage. (a) The Owner has the option from time to
-------------------
time, upon not less than thirty (30) days, written notice to the Vendor, to
designate additional geographic areas in the United States, including, but not
limited to, additional System Areas, as to which the Owner may purchase from the
Vendor some or all, as determined by the Owner in its sole discretion, of the
Products and Services required for the PCS coverage of such areas as provided
for in this Contract, all on the terms and conditions set forth in this
Contract; provided that the Parties will mutually agree in good faith on the
-------- ----
payment terms (provided that pricing will be as set forth in this Contract),
-------- ----
liquidated damages, Project Milestones and the System performance criteria
applicable to such additional coverage pursuant to this subsection 2.2(a); and
provided further that any such agreement on (i) such Project Milestones must be
- - - --------- -------
based on substantially the same intervals (including, but not limited to, the
number of days specified in each such interval) as set forth in Exhibits A1 and
A2, to the extent possible, (ii) such payment terms and liquidated damages must
be based on substantially the same terms as are otherwise set forth in this
Contract, and (iii) such System performance criteria must be based on
substantially the same System performance criteria as set forth in Exhibit F, to
the extent possible. The Parties agree that this subsection 2.2(a) will be
<PAGE>
23
effective at any given time during the Term of this Contract as to the
determination of payment terms (other than pricing) and Project Milestones
applicable to the Vendor's provision of additional coverage pursuant to this
subsection 2.2(a) only if (i) the aggregate price of the Products and Services
to be provided by the Vendor at such time under this subsection 2.2(a) is at
such time at least five million dollars ($5,000,000) and (ii) the Vendor is at
such time providing Installation Services and at least one other Service
provided for under this Contract in connection with such additional coverage
provided by the Vendor at any time during the Term of this Contract pursuant to
this subsection 2.2(a). Unless otherwise mutually agreed among the Parties, the
payment terms for additional Products provided by the Vendor after Final
Acceptance of the last PCS System within the Initial System not otherwise
covered by or otherwise determined pursuant to this subsection 2.2(a) will be
subject to the terms of Section 6.
(b) The Owner has the option from time to time upon not less than thirty
(30) days' prior written notice to the Vendor and in accordance with the
applicable change order provisions of subsection 7.2 set forth herein, to
require the Vendor to increase the level of capacity or coverage of an already
allocated PCS System (whether such PCS System has been so allocated pursuant to
Schedule 4 or subsection 2.2(a), all on the terms and conditions of this
Contract.
(c) Where the Owner wishes to purchase PCS Products or Services for use
and/or application in a country outside the United States but within North
America including any territory of the United States not otherwise covered by
the definition of the "United States" as set forth herein, the Owner and the
Vendor will, in good faith, negotiate a separate agreement for such purchase
upon substantially all of the same terms as those set forth in this Contract,
with only such modifications as may reasonably be appropriate to reflect the
international nature of such transaction and to assure protection of the
Vendor's intellectual property. The PCS Product and Software prices and price
discounts set forth in this Contract will prevail in any such separate
agreement, subject only to reasonable pricing adjustments which will be in no
event ten percent (10%) higher than the prices set forth in or determined
pursuant to this Contract plus foreign import duties and taxes. Any such
agreement may, at the Vendor's option, be entered into by any of the
subsidiaries or other affiliates of the Vendor as listed on Schedule 13.
2.3 Handsets. (a) The Vendor must supply the Owner with two thousand
--------
(2,000) subscriber handsets at the prices set forth on Schedule 2 and
substantially meeting the applicable criteria set forth in Exhibit H within
sixty (60) days prior to the Substantial Completion of the Initial PCS System in
accordance with Exhibit B3; provided that the criteria set forth in Exhibit H
-------- ----
will substantially conform to the applicable specifications and/or criteria (but
which will in no event be more than what is required by Exhibit H) agreed
between the Owner and Sony/Qualcomm (the "Sony/Qualcomm Agreement") if such
agreement exists as of the date required for the delivery of handsets by the
Vendor pursuant to this subsection 2.3; provided further that in the event the
-------- -------
Sony/Qualcomm Agreement does not exist as of the date the Vendor is required to
deliver handsets pursuant to the first sentence of this subsection 2.3 the
handsets required to be delivered by the Vendor pursuant to this subsection 2.3
will substantially conform to the criteria set forth in Exhibit H, but in
<PAGE>
24
any event will work in the System and in accordance with the applicable
requirements related thereto.
(b) The Vendor must supply at the prices set forth on Schedule 2 one
hundred (100) handsets per PCS System within the Initial System, acceptable to
the Owner, and the necessary equipment related thereto for testing and operation
of each such PCS System pursuant to, and in accordance with, the terms of this
Contract, Exhibit B3 and substantially in accordance with Exhibit H to the
extent applicable; provided however, with the consent of the Owner, which
-------- -------
consent will not be unreasonably withheld, such handsets will not be required to
be in substantial compliance with the criteria set forth in Exhibit H if they
will otherwise be sufficient to test and accurately demonstrate that the PCS
System meets the Specifications. The one hundred (100) handsets required to be
delivered by the Vendor pursuant to the immediately preceding sentence will be
delivered to the Owner on or before Milestone 7 (as set forth in Exhibit A1) for
the PCS System for which such handsets are provided.
(c) Notwithstanding any other provision of this Contract, including
Section 17, the Vendor does not warrant the handsets provided hereunder, but to
the extent that the Vendor is authorized to do so by the terms of any applicable
agreement or agreements with such third party suppliers, the Vendor will assign
or otherwise transfer any warranty received from its supplier(s) of the handsets
to the Owner at no additional cost to the Owner. For the purposes of this
Contract a supplier of handsets to the Vendor will not be deemed a
Subcontractor.
2.4 Initial PCS System. Pursuant to Exhibit B3, the Vendor must achieve
------------------
Substantial Completion of the Initial PCS System in accordance with the
requirements of Exhibit B3 prior to, and as a condition of, the Substantial
Completion of any other PCS System within the Initial System. This requirement
in no way relieves the Vendor of its obligations prior to the Substantial
Completion of the Initial PCS System to continue with the Work on all of the PCS
Systems constituting the Initial System in accordance with the requirements of
this Contract and the Project Milestones applicable to each such PCS System.
2.5 System Element Verification; Test-bed Laboratory. (a) In
------------------------------------------------
accordance with Milestone 4 (as set forth on Exhibit A1) the Vendor must
successfully complete System Element Verification pursuant to the terms of this
Contract including, but not limited to, the Specifications and Exhibit B3 no
later than August 19, 1996.
(b) The Vendor will supply, at no additional cost to the Owner (except
as provided in Exhibit I), the Products and Services necessary for the
establishment of a test-bed laboratory, which laboratory will include the
Products and Services set forth on Exhibit I (the "Test-bed Laboratory"). Such
Products and Services will be subject to the applicable warranty terms of this
Contract. The Vendor will provide all relevant Software Upgrades, Software
Enhancements and Software Combined Releases applicable to the Test-bed
Laboratory. Equipment Upgrades, Equipment Enhancements and Equipment Combined
Releases will be available for the Test-bed Laboratory as provided in this
Contract. The Test-bed Laboratory will be provided by the Vendor in accordance
with Milestone 3 applicable to the Initial PCS System as set forth on Exhibit
A1, but in no event will the Vendor be required
<PAGE>
25
to provide the Test-bed Laboratory earlier than ninety (90) days after the
building site for such laboratory has been made ready by the Owner and the
Vendor has received the Owner's notice thereof, provided that such notice will
-------- ----
not be delivered to the Vendor before April 19, 1996 (the "Building Ready
Date"). The Owner expressly agrees that it will not use the Test-bed Laboratory
for In Revenue Service or any purpose other than testing without the prior
written consent of the Vendor, which consent the Vendor will not unreasonably
withhold or delay.
2.6 RF Engineering; Site Acquisition and MSC Installation. (a) In
-----------------------------------------------------
accordance with Milestone 2 as set forth on Exhibit A1, within sixty (60) days
of the Effective Date, the Vendor must deliver to the Owner the Preliminary RF
Design for each of the System Areas in accordance with the requirements and
criteria set forth in Exhibit B1 and Schedule 1; provided that the Vendor agrees
-------- ----
to (i) provide Preliminary RF Designs (as set forth above) to the Owner for each
of the Milwaukee, Denver, Salt Lake and Spokane System Areas (as set forth on
Schedule 4) within sixty (60) days of the Effective Date unless, within fourteen
(14) days from delivery of the existing RF information relating to the above
listed four (4) System Areas from the Owner to the Vendor, the Vendor, after
careful consideration determines in good faith that such information or plans
need to be redesigned so that the Vendor may achieve such Milestone 2 (as set
forth in Exhibit A1) for such four (4) System Areas in accordance with Schedule
1 and the terms of this Contract, in which case the Vendor will receive an
additional twenty-one (21) days in which to deliver such Preliminary RF Designs
for such four (4) System Areas only (in no event will such time period from the
Effective Date exceed eighty-one (81) days for such four (4) System Areas) and
(ii) provide to the Owner such a Preliminary RF Design for the Detroit System
Area (as set forth on Schedule 4) within eighty-one (81) days of the Effective
Date. The Vendor must provide the Owner with the applicable search rings for
each PCS System based upon the Preliminary RF Design within twenty (20) Business
Days of Milestone 2 (as set forth in Exhibit A1). The Owner and the Vendor
agree to cooperate with each other to complete the RF Engineering and the Site
Acquisition. The Owner must notify the Vendor of desired coverage areas, RF
Engineering parameters or other information or restrictions the Owner wishes to
be included in the Final RF Engineering Plan for each PCS System. In accordance
with Exhibit B1, the Vendor will do the RF Engineering in each of the PCS
Systems and in connection therewith will use the parameters, information and
restrictions supplied by the Owner. As part of the RF Engineering, the Vendor
will establish "search rings" in each of the PCS Systems that will specify areas
in which the Owner may proceed with Site Acquisition.
(b) In accordance with Exhibit B1 the Vendor, at its request, must be
kept informed of the progress made on ongoing Site Acquisition within the System
Areas. As the Site Acquisition progresses, the Vendor agrees to regularly alter
the RF Engineering plan to determine a new search ring or rings to take into
account any changes or modifications requested by the Owner or otherwise
requested by the Owner due to the Owner's inability to acquire sufficient rights
to a location which could constitute a System Element Location in a timely or
economic manner. When making changes to the RF Engineering plan the Vendor must
take into account the Site Acquisition already completed by the Owner.
<PAGE>
26
(c) Milestone 5 (as set forth in Exhibit A1) will be achieved in each
PCS System in accordance with this subsection 2.6(c); provided that for each PCS
-------- ----
System the appropriate MSCs have been installed by the Vendor in the Owner's
relevant Switch Sites within each such PCS System in accordance with subsection
2.6(d) below. In accordance with the Project Milestones set forth on Exhibit A1
and the requirements and criteria set forth in Exhibit B1, within five (5) days
of the Owner achieving Site Acquisition Substantial Completion within any given
System Area (the "Final RF Review Period"), the Owner and the Vendor will use
their best efforts to agree on a final System Element Location count (the "Final
Site Count") and a final RF Engineering plan (the "Final RF Engineering Plan")
for such System Area upon which the PCS System for such System Area will be
built by the Vendor. Failure of the Owner and the Vendor to reach satisfactory
agreement on a Final Site Count and/or a Final RF Engineering Plan for any given
System Area within the Final RF Review Period will automatically result in the
referral of any such disagreement to the most senior RF engineers of both the
Owner and the Vendor for their review and resolution within five (5) days after
the end of any such Final RF Review Period. If the senior RF engineers fail to
resolve any such disagreement within the extended five (5) day resolution
period, the disagreement will automatically be referred for resolution in
accordance with subsection 23.1. It is understood by the Parties that during
the period of any such disagreement and the resolution thereof in accordance
with the Contract, the Work on such PCS System, to the extent possible, will be
ongoing and that Substantial Completion on such PCS System cannot be achieved
without agreement by the Parties on a Final RF Engineering Plan and/or a Final
Site Count for such PCS System and/or System Area.
(d) The Vendor will install each of the MSCs in each of the Switch Sites
identified by the Owner in each PCS System within the System within sixty (60)
days of the Switch Site Ready Date; provided that (i) the Owner will have
-------- ----
provided the Vendor with the MSC configuration engineering information at least
one hundred (100) days prior to the Switch Site Notice Date, for each such MSC,
such that the Vendor may actually perform the Owner's MSC configuration
engineering (other than the Switch Site layout configuration), (ii) the Owner
will have provided the Vendor with the applicable Switch Site description (in
appropriate detail) at least sixty (60) days prior to the Switch Site Notice
Date and (iii) as of the Switch Site Ready Date the applicable Switch Site will
have been made ready by the Owner such that the relevant MSC can in fact be
installed by the Vendor. For the purposes hereof (i) the "Switch Site Ready
Date" means the date specified by the Owner as the date on which the Switch Site
will in fact be ready for MSC installation as communicated to the Vendor by the
Owner in the Owner's Switch Site Notice to the Vendor, (ii) the "Switch Site
Notice Date" will mean, as to any Switch Site Notice, the date on which such
notice was delivered to the Vendor by the Owner and (iii) the "Switch Site
Notice" will mean the notice provided to the Vendor by the Owner in sufficient
detail to describe the Switch Site so that the Vendor may reasonably engineer
the layout of the MSC configuration specifically for such Switch Site. Nothing
contained herein will in any way limit the Vendor's obligation pursuant to the
terms of this Contract to do the MSC engineering and the RF Engineering in
accordance with the terms of this Contract. Pursuant to this subsection 2.6(d)
in no event will the Owner provide the Vendor the Switch Site Notice more than
sixty (60) days later than the date the Owner delivers the Vendor the Build
Notice pursuant to subsection 2.7(a).
<PAGE>
27
2.7 Facilities Preparation Services and Installation. (a) For any
------------------------------------------------
given PCS System within the Initial System prior to Milestone 5 (as set forth on
Exhibit A1) for such PCS System the Owner (i) may, in its discretion, provide
notice to the Vendor when it has achieved Site Acquisition of at least fifty
(50) System Element Locations in any given PCS System or (ii) in any event, (if
the Owner hasn't already provided notice pursuant to clause (i) above) will
provide such notice to the Vendor when it has achieved Site Acquisition of at
least thirty percent (30%) of the System Element Locations in any given PCS
System (in either event, the "Build Notice"). The Build Notice calculation will
be based upon the Owner's reasonable estimate of System Element Locations within
or in connection with the Preliminary RF Design applicable to the PCS System in
which such Build Notice is issued to the Vendor. The Build Notice for each PCS
System will also include the Owner's best forecast based upon information
available at such time (the "M5 Forecast") of when it expects to be able to
declare Site Acquisition Substantial Completion within such PCS System. The
Owner understands that the Vendor will not be required to commence Facilities
Preparation Services and/or Installation in any given PCS System until and
unless it has received the applicable Build Notice pursuant to and in accordance
with this subsection 2.7.
(b) In accordance with the Project Milestones specified in Exhibit A and
the requirements and criteria of Exhibit B2, for each System Area the Vendor
must complete the Facilities Preparation Services for all System Element
Locations within such PCS System in accordance with the construction criteria
set forth in Exhibit E and the performance criteria set forth in Exhibit F no
later than ninety (90) days from the Owner/Vendor agreement on a Final Site
Count and a Final RF Engineering Plan for such System Area; provided that upon
-------- ----
the prior written request of the Vendor, the Owner may consent (which consent
will not be unreasonably withheld) to postpone Milestone 6 (as set forth in
Exhibit A1) with respect to any PCS System by not more than an additional sixty
(60) days in the event that more than ten percent (10%) of the System Element
Locations in such PCS System estimated as of the date of the Build Notice for
such PCS System have not been fully acquired by the Owner immediately prior to
the date on which Milestone 5 (as set forth in Exhibit A1) otherwise occurs in
such PCS System. Pursuant to the Project Milestones the Vendor must complete
Installation of the Products for any given PCS System within thirty-two and one
half (32-1/2) days of its completion of the Facilities Preparation Services in
accordance with Milestone 6 (as set forth on Exhibit A1) for such PCS System
pursuant to the requirements and criteria set forth in Exhibit D and Exhibit F.
2.8 Site Acquisition Modifications. In the event that the Owner
------------------------------
determines that it is unlikely to achieve Site Acquisition Substantial
Completion for any PCS System in a timely and cost-effective manner, the Vendor
will modify certain performance criteria set forth in Exhibit F with respect to
such PCS System in the manner and to the degree that the Owner reasonably
specifies in writing to the Vendor in accordance with the terms of Exhibit B3.
In the event the Owner notifies the Vendor of a modification to the System
performance criteria for such PCS System pursuant to this subsection 2.8, such
modified criteria, including any such lower number of System Element Locations
that the Owner, in its sole discretion, deems at such time to be satisfactory so
as to constitute Site Acquisition Substantial Completion, will be deemed the
performance criteria and the System Element Location count
<PAGE>
28
applicable to such PCS System for the purposes of Milestone 5 (as set forth on
Exhibit A1) and all other remaining Project Milestones for such PCS System
thereafter.
2.9 Design/System Architecture and Engineering; Interoperability. (a)
------------------------------------------------------------
The Vendor must provide all Engineering and design services necessary for the
completion of the Work and the System in conformity with the Specifications and
the CDMA standards, including, but not limited to, the Engineering and design
necessary to describe and detail the System and the specified PCS Systems.
(b) Pursuant to and in accordance with the terms of Exhibits B3 and G,
BTS/BSC-MSC Interoperability must be demonstrated on or before December 1, 1996
(provided that such date will change to reflect the actual delay beyond December
-------- ----
31, 1995 in the finalization of "Attachment A" to be attached to Exhibit G);
provided that in any event the requirements of this subsection 2.9(b) are a
- - - -------- ----
condition to the Vendor's Substantial Completion of the last PCS System within
the Initial System and Substantial Completion of such last PCS System will not
be deemed to have been achieved by the Vendor unless and until such
Interoperability will have been demonstrated in accordance with the criteria set
forth in Exhibit G; provided further that any delay in such Interoperability
-------- -------
which is not due substantially to the fault of the Vendor, in the reasonable
opinion of the Owner, will not be a delay pursuant to the terms of this
subsection 2.9(b).
2.10 Certification. The Vendor must coordinate its performance of the
-------------
Services described in subsection 2.9 with the Engineering and design efforts
(including, without limitation, any and all RF Engineering and/or Site
Acquisition) of all Subcontractors, the Owner, the Other Vendors, any and all
supply and transportation requirements and all federal, state and local
authorities or agencies. The Vendor will be fully knowledgeable about and will,
after reasonable review thereof, accept all Engineering, including, without
limitation, RF Engineering and design, irrespective of whether the Vendor, the
Other Vendors, the Owner or third parties such as the Subcontractors may furnish
such services. All Engineering requiring certification must be certified by
professional engineers licensed or properly qualified to perform such
Engineering services in all appropriate jurisdictions if such certification is,
in the Owner's opinion, appropriate and reasonable under the circumstances.
This subsection 2.10 will not modify or restrict the Vendor's obligation and/or
right to provide the Services contracted for pursuant to the terms of this
Contract.
2.11 Notice of Developments. 2.11.1 Vendor Developments. The Vendor
---------------------- -------------------
must provide the Owner, through the NDAB or the Owner's vice president and/or
director of product development, with reasonable prior notice of any PCS Product
developments, innovations and/or technological advances (collectively "Vendor
Developments") relevant to the System prior to giving such notice to any other
Customer or otherwise making any such Vendor Development public within the
relevant marketplace; provided that the Vendor will not be obligated to provide
-------- ----
the Owner such notice before any other Customer if doing so would not be
reasonable under the circumstances and/or otherwise breach any contractual
obligation to any other Customer; provided further that any such notice pursuant
-------- -------
to this subsection 2.11.1 need not include any information originated by another
Customer which is
<PAGE>
29
proprietary to such other Customer of the Vendor. For the purposes of this
subsection 2.11.1 the term "Vendor" includes the Vendor and its affiliates and
subsidiaries.
2.11.2 Participation in Testing. The Owner has the right, but not the
------------------------
obligation, to witness and/or participate in any initial testing and/or
application of any such Vendor Development (other than a Vendor Development
originated by another Customer which includes information which is proprietary
to such other Customer); provided that any such initial testing of Vendor
-------- ----
Developments will be subject to (i) scheduling as reasonably determined by the
Vendor, (ii) the qualification that the Owner's PCS System meets the technical
requirements for the testing of such Vendor Development as reasonably determined
by the Vendor (or otherwise that the Owner is willing to update such PCS System
to meet such requirements), (iii) the Owner's acknowledgement that it will be
able to provide the resources necessary to implement the initial testing for
such Vendor Development, and (iv) the Owner and the Vendor executing a
verification office testing agreement that identifies the scope, terms, pricing,
responsibilities and schedule related to the initial testing of such Vendor
Development. The Vendor must provide the Owner at least thirty (30) days' prior
notice of its intent to test any such Vendor Development and upon the Owner's
written request the Vendor will allow the Owner to participate in such testing
upon terms and in a testing environment reasonably acceptable to the Parties at
such time. The Owner will make its Test-bed Laboratory and/or certain of its
PCS Systems (following Final Acceptance thereof) available to the Vendor for any
such testing in which the Owner has the right, and will have notified the Vendor
of its desire, to participate in pursuant to the terms of this subsection
2.11.2. Where the Vendor and the Owner have agreed that the Owner's Test-bed
Laboratory or PCS System will be used as a test bed for Vendor Developments, the
Owner will not unreasonably withhold the Vendor's requests for other Customers
to observe the tests or to release results of the tests to other Customers;
provided that the Owner will have had reasonable prior notice that the Vendor
- - - -------- ----
would like to have other Customers observe such testing and that the Vendor will
remain liable in all respects pursuant to the terms of this Contract for the
protection of Proprietary Information in connection with any such testing. The
length of the prior notice period described above may be shortened to under
thirty (30) days if necessary and appropriate under the circumstances, but in no
event will any such prior notice period be less than ten (10) days.
2.12 Safety. To the extent the Vendor is in control of any System
------
Element Location, or other site within the System or any System Area during the
term of this Contract (a "Vendor-Controlled Location") including, but not
limited to, during the build-out of the Initial System, the Vendor will be
solely responsible for initiating, maintaining, and supervising all safety
precautions and programs in connection with all such Vendor-Controlled
Locations. The Vendor must materially comply with Applicable Laws and
Applicable Permits and the Specifications bearing on safety of persons or
property or protection against injury, damages or loss. The Vendor must provide
a written report to the Owner describing fully all incidents affecting safety on
any Vendor-Controlled Location and must also furnish to the Owner copies of all
MSHA, OSHA and workers' compensation reports. The Vendor acknowledges and
agrees that until Bolt-down of all of the PCS Products to be provided by the
Vendor pursuant to the terms of this Contract on any given System Element
Location (other than the Switch Site or the Test-bed Laboratory) within any
given PCS System is
<PAGE>
30
achieved the Vendor will be deemed to be in control of all Products, tools,
designs, buildings, structures and/or Engineering (other than those Products,
tools, designs, buildings, structures and/or Engineering specific to and
necessary for Site Acquisition, Network Interconnection and/or Microwave
Relocation) at, in or upon any such System Element Location within such PCS
System; provided that in any event for each such System Element Location the
-------- ----
Vendor will always be deemed to be in control of such System Element Location
until the Facilities Preparation Services for such System Element Location have
been completed in accordance with Exhibit B2.
2.13 Emergencies. In the event of any emergency at a Vendor-Controlled
-----------
Location endangering life or property, the Vendor must take such action as may
be reasonable and necessary to prevent, avoid or mitigate injury, damage or loss
and will, as soon as possible, report any such incidents, including the Vendor's
response thereto, to the Owner. Whenever, in the reasonable opinion of the
Owner, the Vendor has failed to take sufficient precautions for the safety of
the public or the protection of the Work or of structures or property on or
adjacent to any Vendor-Controlled Location, creating, in the reasonable opinion
of the Owner, an emergency requiring immediate action, then the Owner, after
having given reasonable prior notice to the Vendor, may cause such sufficient
precautions to be taken or itself provide such protection. The taking or
provision of any such precautions or protection by the Owner or its agents or
representatives will be for the account of the Vendor and the Vendor must
reimburse the Owner for the cost thereof.
2.14 Right of Inspection. The Owner, the parties providing financing in
-------------------
connection with the build-out of the Nationwide Network or their duly appointed
representatives, including Inspectors (collectively "Reviewers"), will at all
reasonable times have access to the various sites where the Vendor or its
Subcontractors are prosecuting the Engineering, design, procurement, testing or
manufacture of the Work; provided that this subsection 2.14 will not be presumed
-------- ----
to give access to the Vendor's or its Subcontractors' sites to direct
competitors of the Vendor provided that such sites are not otherwise Owner
sites. For these purposes, reasonable access will be given during normal
business hours to the Vendor's and its Subcontractors' plants, premises, storage
and deposit areas, facilities and offices, sources of materials, Equipment being
assembled, already assembled or in operation, Equipment being performance tested
or tested to the Vendor's specifications and to any other places or areas
occupied by the Vendor or its Subcontractors in connection with the Work.
Notwithstanding anything herein to the contrary, any Reviewer's right of access
to the Vendor's and/or the Subcontractors' plants, premises, storage and deposit
areas, facilities and offices, sources of materials, Equipment being assembled,
already assembled or in operation, Equipment being performance tested or tested
to the Vendor's specifications and to any other places or areas occupied by the
Vendor or its Subcontractors in connection with the Work will be subject to the
reasonable confidentiality, safety and security requirements of same and further
subject to such Reviewers' non-interference with the Work and other work being
performed thereon. The Vendor must provide reasonable temporary office space
(in the Vendor's facilities where such space is available) and services for the
Reviewers to the extent necessary.
<PAGE>
31
2.15 Transportation. The Vendor must provide for the transport and
--------------
delivery of all the Products to be delivered pursuant to, and in accordance
with, the terms of this Contract. The costs for such transportation will be
borne by the Vendor as part of the Contract Price; provided that the Owner will
-------- ----
reimburse the Vendor for any costs incurred by the Vendor for any Extraordinary
Transportation in such cases where the Vendor, subject to prior notice to the
Owner, found it actually necessary to utilize such Extraordinary Transportation;
provided, further that any amounts due to the Vendor from the Owner pursuant to
- - - -------- -------
the first proviso of this subsection 2.15 will be reduced by the amount of non-
extraordinary transportation costs which otherwise would have been applicable to
the transport of such Products.
2.16 Security. Subject to subsection 2.12, during the course of the
--------
Work, the Vendor will perform the security services necessary to ensure the
safety and security of the System Element Locations, the Products and/or other
materials or designs relevant to the Work.
2.17 Materials and Equipment. Except for materials or Equipment to be
-----------------------
supplied by Subcontractors identified on part B of Schedule 7, whenever
materials or Equipment are specified or described in this Contract (including
the Specifications) by using the name of a proprietary item or the name of a
particular supplier, the naming of the item is intended to establish the type,
function and quality required, and substitute materials or Equipment may
nonetheless be used, provided that such materials or Equipment are equivalent or
equal to that named. If the Vendor wishes to furnish or use a substitute item
of material or Equipment, the Vendor must first certify that the proposed
substitute will perform at least as well the functions and achieve the results
called for by this Contract, will be substantially similar or of equal substance
to that specified and be suited for the same use as that specified. The Owner
may require the Vendor to furnish, at the Vendor's expense, additional data
about the proposed substitute as required to evaluate the substitution. For
Major Portions of the Work, or materials or Equipment listed on part B of
Schedule 7, the Vendor must first receive prior written approval of the Owner
for any substitution. The Owner will be allowed a reasonable time within which
to evaluate each proposed substitute. Notwithstanding the foregoing, with
respect to PCS Products, prior to the shipment of such PCS Products pursuant to
the terms of this Contract, the Vendor may at any time without notice to or
consent of the Owner make changes in a Vendor PCS Product furnished pursuant to
this Contract, or modify the drawings and published specifications relating
thereto, or substitute Products of similar or later design to fulfill its
obligations under this Contract or otherwise fill an order, provided that the
--------
changes, modifications or substitutions will in no way affect or otherwise
impact upon the form, fit, or function of an ordered Product pursuant to and in
accordance with the applicable Specifications. With respect to changes,
modifications and substitutions which do in fact affect the form, fit, or
function of an ordered Product pursuant to and in accordance with the
Specifications, the Vendor must notify the Owner in writing at least thirty (30)
days prior to the effective dates of any such changes, modifications or
substitutions. In the event that any such change, modification or substitution
is not desired by the Owner, the Owner will notify the Vendor within thirty (30)
days from the date of notice and the Vendor will not furnish any such changed
Products to the Owner on any orders in process at the time the Owner is so
notified; provided that nothing contained herein will otherwise modify the
-------- ----
Vendor's obligations under the terms of this Contract.
<PAGE>
32
2.18 Equipment and Data. The Vendor must furnish all drawings,
------------------
specifications, specific design data, preliminary arrangements and outline
drawings of the Equipment and all other information as required in accordance
with this Contract in sufficient detail to indicate that the Equipment and
fabricated materials to be supplied under this Contract comply with the
Specifications.
2.19 References to Certain Sources. Reference to standard
-----------------------------
specifications, manuals or codes of any technical society, organization or
association or to the laws or regulations of any Governmental Entity, whether
such reference is specific or by implication, by this Contract, means the latest
standard specification, manual, code, laws or regulations in effect at the time
of such reference, except as may be otherwise specifically agreed to by the
Owner. However, no provision of any reference, standard, specification, manual
or code (whether or not specifically incorporated by reference in this Contract)
will be effective to change the duties and responsibilities of the Owner, the
Vendor, the Subcontractors or any of their consultants, agents or employees from
those set forth in this Contract; provided that nothing contained in this
-------- ----
Contract will require the Vendor to violate then existing and enforceable
Applicable Laws.
2.20 Operating Manuals. The Vendor will provide the Owner Operating
-----------------
Manuals in accordance with this subsection 2.20 as soon as they are reasonably
available but in no event less than thirty (30) days prior to Substantial
Completion of the Initial PCS System, the Vendor will provide the Owner with as
many sets of the Operating Manuals for the entire System as the Owner then
reasonably requires. The Operating Manuals will be prepared in accordance with
the relevant Specifications and in sufficient detail to accurately represent the
System and all of its component System Elements as constructed and will
recommend procedures for operation. Operating Manuals with up to date (but not
"as-built") drawings, specifications and design sheets will be available for the
Training as set forth in subsection 2.23. All other Technical Documentation not
already delivered to the Owner pursuant to the terms of the Contract must be
delivered to the Owner within ten (10) days after the successful achievement of
all Final Acceptance tests in accordance with Exhibit B3. The Owner will not be
required to deliver the Final Acceptance Certificate until all such Technical
Documentation has been so delivered (and Final Acceptance will not be deemed to
have occurred earlier than the date that is ten (10) days prior to the date of
delivery of such Technical Documentation).
2.21 Maintenance and Instruction Manuals. The Vendor will provide the
-----------------------------------
Owner Maintenance and Instruction Manuals in accordance with this subsection
2.21 as soon as they are reasonably available but in no event less than thirty
(30) days prior to Substantial Completion of the Initial PCS System, the Vendor
must provide the Owner with as many sets of the Maintenance and Instruction
Manuals for the entire System as the Owner then reasonably requires. The
Maintenance and Instruction Manuals will be prepared in accordance with the
Specifications and in sufficient detail to accurately represent the System and
all of its component System Elements as constructed and will set forth
procedures for inspection and maintenance. Maintenance and Instruction Manuals
with up to date (but not "as-built") drawings, specifications and design sheets
will be available for the Training set forth in subsection 223. The
Maintenance and Instruction Manuals must include the volumes compiled by the
Vendor containing all as-built Subcontractor furnished product data.
<PAGE>
33
2.22 Standards for Manuals. All Operating Manuals and Maintenance and
---------------------
Instruction Manuals required to be provided by the Vendor pursuant to this
Contract must be:
(a) detailed and comprehensive and prepared in conformance with the
System Standards and generally accepted national standards of professional care,
skill, diligence and competence applicable to telecommunications and operation
practices for facilities similar to the System;
(b) consistent with good quality industry operating practices for
operating personal communications service systems of similar size, type and
design;
(c) sufficient to enable the Owner to operate and maintain each PCS
System in each of the specified System Areas and the System as a whole on a
continuous basis; and
(d) prepared subject to the foregoing standards with the goal of
achieving operation of the System at the capacity, efficiency, reliability,
safety and maintainability levels contemplated by this Contract and the
Specifications and required by all Applicable Laws and Applicable Permits.
In addition to, and without limiting the requirements set forth in the
preceding sentence, the Operating Manuals and the Maintenance and Instruction
Manuals will be submitted to the Owner in CD-ROM format (as soon as such format
is available provided that such availability will be no later than December
1996) in addition to hard-copy volume format if so requested by the Owner. In
addition to any of the Owner's other rights and remedies, the Owner will have
the right to reject the Operating Manual and the Maintenance and Instruction
Manuals if in its reasonable judgment any of the foregoing does not meet the
standards set forth in this Contract.
2.23 Training. As more fully described below, starting at least one
--------
hundred and eighty (180) days prior to Substantial Completion of the Initial PCS
System, the Vendor must provide to the Owner a practical and participatory and,
where feasible, on-site training program with respect to the System, which
program will include technical education (collectively, the "Training"). The
Vendor will provide, upon the Owner's prior written request and at the time or
times mutually agreed in good faith by the Owner during the Initial Term of this
Contract, not less than a minimum of twelve thousand fifty (12,050) man days of
Training and Training materials for the Owner's personnel, at no cost to the
Owner. The Owner will be responsible for the travel and living expenses of
personnel receiving Training. Such Training must be kept current to encompass
the latest Software and Equipment, or any other Software Revision Level and/or
Equipment Revision Level directed by the Owner pursuant to the terms of this
Contract. Subject to the foregoing, Training course size, content and material
will be designed and agreed to by mutual consent between the Parties. The
Vendor will conduct classes for the subjects described below:
(a) Operations, maintenance and provisioning ("OM&P") Training will
include System Training to technical personnel presumed not qualified or trained
specifically on operating a PCS System or the Equipment and/or Software included
therein. The subject
<PAGE>
34
matter will include (i) a general overview of PCS/CDMA technology and the
System, (ii) a System overview of the Equipment, Software initiation and
configuration requirements, required interconnections, troubleshooting and
testing requirements, recovery from System failures, and (iii) any other
information necessary to successfully operate, maintain, or set up the Equipment
and the Software to work in accordance with the System Element performance
criteria set forth in Exhibit D, in each case so that each PCS System
successfully operates in accordance with the performance criteria set forth in
Exhibit F within its System Area;
(b) The Vendor must provide PCS/CDMA qualified technical staff and
material to train the Owner's personnel so as to enable them to train other
personnel of the Owner (i.e., train the trainers) on the subject matter topics
----
listed below. The Owner's personnel trained by the Vendor will be evaluated and
certified by the Vendor upon successful completion of the course as competent to
train other personnel of the Owner. Such content and materials may be tailored
or customized by the Owner for internal use only and include, without
limitation, Training with respect to the following topics:
(i) System Element configuration;
(ii) Communication interfaces and protocols;
(iii) Software operating system (current to the latest Software
Revision Level);
(iv) Database configuration, structure and content;
(v) Database down loading;
(vi) Program function;
(vii) Troubleshooting procedures; and
(viii) Other subject matter which is necessary or desirable to
understand the operation of the System and maintenance of the
System as well as any enhancements as they are added to the
System and/or any part thereof.
(c) Except for certain plug-in modules and certain Software delivered
under this Contract, the Vendor does not provide, nor does this Contract require
that the Vendor provide, Training, training manuals, Operating manuals or
Maintenance and Instruction Manuals intended to make the Owner proficient in
Installation of any of the Products furnished under this Contract. In the event
that the Vendor should elect to provide training, documentation and/or test
equipment to facilitate self-installation of the Products by a Customer
purchasing PCS Products from the Vendor, the Vendor agrees to make such items
available to the Owner under the Vendor's standard terms and conditions for such
offering as they may exist from time to time subject to the Vendor's obligations
under Section 26; and
<PAGE>
35
(d) Promptly upon execution of this Contract, the Vendor will establish
a training coordinator, whose responsibility will be to work with the Owner to
ensure that the Owner receives the Training set forth above. Such coordinator
(or his or her replacement) will continue in such assignment until the earlier
of (i) the Final Acceptance of the last PCS System within the Initial System, or
(ii) receipt by the Owner of all of the Training required to be provided at no
cost under this subsection 2.23.
2.24 Manuals and Training. The training and the documentation provided
--------------------
in connection herewith, including, without limitation, all documentation
provided in CD-ROM format, and pursuant to subsections 2.20, 2.21 and 2.23 will
be updated pursuant to and in accordance with all Product upgrades and/or
modifications applicable to the System, any PCS System and/or any part thereof.
2.25 Spare Parts. (a) Prior to the Substantial Completion of the
-----------
Initial PCS System the Vendor and the Owner will agree, pursuant to and in
accordance with the terms of this subsection 2.25, as to the type, quantity and
storage location of the spare parts required to continually operate the Initial
System as intended and in accordance with the Specifications. For a period of
two (2) years following Final Acceptance of each PCS System, the Vendor will, if
requested by the Owner, provide such spare parts at its own expense. Following
the expiration of such two (2) year period, the Vendor will provide such spare
parts pursuant to Schedule 12A and at the prices set forth on Schedule 12B.
After the expiration of such two (2) year period invoices for such System spare
parts will be issued directly to the Owner and will be paid for directly by the
Owner in accordance with the invoice and payment terms of this Contract. Any
PCS spare parts applicable to the System utilized or withdrawn from any PCS
System during such two (2) year period will be promptly replaced by the Vendor
at its own cost. With respect to such spare parts provided at the Vendor's
expense, the Owner expressly agrees that (i) the Owner will not utilize such
spare parts for increasing the performance or capacity of the PCS Systems for
which they were provided or otherwise expanding such PCS Systems or any other
PCS systems, (ii) until any such spare part is drawn from storage and utilized
as a replacement in a PCS System or until the Owner pays for such spare part,
title to such spare part will remain with the Vendor, (iii) risk of loss of or
damage to such a spare part will be with the Owner from the time of delivery to
the Owner, and (iv) the Owner will, at its expense, return to the Vendor any
Item replaced by a spare part delivered to the Owner pursuant to the terms of
this subsection 2.25.
(b) The Owner has the right to withhold from its final payment to the
Vendor with respect to any PCS System an amount equal to the Owner's reasonably
estimated cost of any utilized spare parts for such PCS System not so replaced
prior to Final Acceptance; provided that such withheld funds will be released
-------- ----
upon such satisfactory replacement of such spare parts by the Vendor.
(c) To the extent that System PCS spare parts need to be acquired from
third party suppliers, the Vendor will use its reasonable efforts to obtain from
suppliers a supply of System spare parts at no additional cost as part of the
original Product package. To the extent that the Vendor is able to so obtain
such System spare parts at no additional cost as
<PAGE>
36
part of the original Product package, it will provide such System spare parts to
the Owner without cost (and without any charge for the procurement of such spare
parts by the Vendor).
2.26 System Support Services. The Vendor will provide the specified
-----------------------
support services for the operation, maintenance and repair of the System and all
Products to the extent set forth herein below and at the Annual Release
Maintenance Fees.
2.26.1 Vendor Assistance. (a) Upon receipt of a request for technical
-----------------
assistance from the Owner, the nature of the problem will be identified by the
Owner, and a priority assigned by the Owner (upon discussion with the Vendor
which in no event will require the agreement and/or consent of the Vendor) as
either an emergency or non-emergency condition and resolution thereof will be
expedited in accordance with the severity levels set forth below.
(b) Following attempted corrective actions by the Owner in accordance
with applicable Maintenance and Instruction Manuals provided by the Vendor, when
the Vendor is notified by the Owner that the System, any PCS System or any part
thereof fails to operate in accordance with the Specifications, the Vendor will
promptly commence and diligently pursue all reasonable efforts to identify the
Defect or Deficiency and, in the event the Vendor has responsibility therefor,
to correct such Defect or Deficiency.
(c) The Vendor's correction of such Defects or Deficiencies in the
System, any PCS System or any part thereof may take the form of new software
codes, new or supplementary operating instructions or procedures, modifications
of the software codes in the Owner's possession, or any other commonly used
method for correcting Defects or Deficiencies in Software, as the Owner and the
Vendor deem appropriate.
(d) When appropriate, the Vendor will provide non-emergency technical
support to the Owner via telephone, facsimile transmission, modem, or other
means acceptable to the Owner during the Owner's normal business hours.
(e) The Vendor will provide emergency technical assistance to the Owner
via an ETA telephone number designated to the Owner in advance by the Vendor,
twenty-four (24) hours per day, three hundred sixty-five (365) days per year.
(f) The Vendor will provide remote intervention and assistance
capability to the Owner for remotely accessing operating System Elements. Upon
mutual agreement between the Parties, the Vendor may remotely access operating
System Elements for the purpose of ETA.
2.26.2 Trouble Reports. From time to time, failures in, or degradation
---------------
of, Products may cause services provided by the System to be adversely affected.
It is necessary that immediate assistance be provided by the Vendor to allow the
Owner to restore the affected service. Critical service outages that cannot be
resolved by the Owner's field technicians or technical support engineers using
procedures described in the Operating Manuals, Maintenance and Instruction
Manuals and Training will be transmitted to the Vendor as a Trouble Report
("TR"). The Vendor will assign an identifying number to each TR to aid in
<PAGE>
37
tracking its resolution. TRs will be immediately addressed by the Vendor
through Emergency Technical Assistance under guidelines set forth in subsection
2.26.3. TRs may not be considered concluded until the solution is concurred
upon by an employee of the Owner within the Owner's operations control center
("OCC"). The root cause of problems resulting in TRs may be Defects or
Deficiencies which must be corrected through Product or procedure changes.
Problems with the System requiring such changes will be referred to the Vendor
for action through a Customer Service Request ("CSR"). The Vendor is authorized
by the Owner to install and integrate, at the Vendor's expense, any Software
Upgrade or Software Enhancement pursuant to mutual agreements reached between
the Vendor and the Owner.
2.26.3 Emergency Technical Assistance ("ETA"). (a) When a problem is
--------------------------------------
encountered that adversely affects service or performance with respect to the
Products, any PCS System, the System or any part thereof, in each case provided
by the Vendor, an Owner maintenance technician will attempt to repair or replace
any malfunctioning Product adversely affecting such service or performance using
the procedures recommended in the Maintenance and Instruction Manuals or the
Operating Manuals. If unsuccessful, a technical representative of the Owner
will consult the Vendor's designated ETA group at the telephone number provided
by the Vendor in subsection 2.26.3(c) below. Following receipt of notification
by the ETA group, the ETA group will utilize all available technical resources
and will ensure that a qualified technical engineer is communicating with the
Owner's personnel regarding the problem on average within fifteen (15) minutes
of any such notification; provided that no single response will exceed thirty
-------- ----
(30) minutes. If necessary and appropriate the Owner's technician will be
dispatched to assist in the normal change-out of replaceable hardware units.
(b) A problem adversely affecting service that has a severity level
defined below either as an "E1 Emergency Condition" or an "E2 Emergency
Condition" is to be addressed under the ETA procedures set forth below in this
subsection 2.26.3 and in subsection 2.26.4.
(i) An E1 Emergency Condition (this roughly corresponds to a
Critical Condition in the Vendor's ISO 9001 documentation) means a
problem resulting from any one or more of the following events:
- - Any system-initiated event or unplanned manual restart (warm, cold,
reload or image) which causes a system loss of all call processing
capability for more than thirty (30) seconds. Manual restarts with
twenty-four (24) hour notice would be planned.
- - Useable billing data not being collected.
- - Two(2) or more contiguous BTSs failing causing a loss of coverage.
- - Ten percent (10%) or more of the total number of voice trunks (BTS and
switch) are out-of-service.
- - Ten percent (10%) or more of the total number of any links (including
IS-41, ISUP, X.25 and SS7) are out of service.
- - Total loss of access to one or more specific services because of a
fault condition in the MSC and related Equipment.
- - Any BTS having a total failure in excess of thirty (30) minutes after
recovery attempts from the OMP are executed.
38
The Vendor must clear all E1 Emergency Conditions within twelve
(12) hours of notification of their occurrence. Work must continue
without any cessation until the defect causing the E1 Emergency
Condition is solved or the severity thereof is reduced to a "P1
Major Condition", as defined below, or less.
(ii) An E2 Emergency Condition (this roughly corresponds to
Severity 1 Conditions in the Vendor's ISO 9001 documentation) means
a problem resulting from any one or more of the following events:
- - Loss of duplex functionality for any equipment that is duplicated.
- - Single BTS failing less than thirty (30) minutes that is not contiguous
with another failed BTS.
- - Loss of the master clock.
- - Fifty percent (50%) or more of the equipped tape or disk drive units
out-of-service.
- - Loss of duplex recording of billing information.
- - Inability to dump or initialize an office image (e.g. translations and/
or software).
- - Inability to perform critical maintenance procedures.
- - Loss of all links within a single link-set.
The Vendor must clear all E2 Emergency Conditions within
twenty-four (24) hours of notification of such E2 Emergency
Conditions. Work must continue without any cessation until the
defect causing the E2 Emergency Condition is solved or the severity
is reduced to a P1 Major Condition or less.
<PAGE>
39
(c) In the event that an E1 Emergency Condition or an E2 Emergency
Condition should remain unresolved following referral to the Vendor by the
Owner, the problem causing such condition must be reported to the levels of
management set forth below (with comparable titles, if different) to ensure all
available resources necessary to address the problem will be committed in
accordance with the following:
The following are the reporting levels if an E1 Emergency Condition or
an E2 Emergency Condition is not resolved within the time periods set forth
below as amended from time to time with the reasonable acceptance of the Owner
following referral thereof to the Vendor by the Owner:
<TABLE>
<CAPTION>
Vendor Contact Vendor Contact Name Telephone Number
------------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
One hour - Technical Assistance Mgr. to be designated to be designated
Two hours - Customer Service Director to be designated to be designated
Three hours - Customer Service AVP R.B. Andrews (708) 713-1500
Four hours - Vice President R.G. Garriques to be designated
</TABLE>
(d) If the Owner reasonably determines that the Vendor has not provided
sufficient ETA to resolve any E1 Emergency Condition or E2 Emergency Condition
on a timely basis, the Owner will be entitled to withhold all payments with
respect to the affected PCS System then due or outstanding prior to the date of
such determination until such time as adequate ETA is provided to the Owner to
resolve such Emergency Condition.
(e) If an E1 Emergency Condition or an E2 Emergency Condition exists in a
PCS System prior to Final Acceptance of such PCS System, the Vendor will use all
reasonable efforts to deliver to the Owner each Software Upgrade and each
Equipment Upgrade developed by or on behalf of the Vendor to resolve any E1
Emergency Condition or E2 Emergency Condition within forty-eight (48) hours
following completion of development of such Software Upgrades or availability of
such Equipment Upgrades.
(f) The term Non-Emergency Services includes providing to the Owner any
requested technical assistance and support, remote monitoring and outage review
consultation and the handling of CSRs.
(g) Technical assistance and support must be provided for the purpose of
resolving non-emergency problems defined below as "P1 Major Condition", "P2
Significant Problem" and "P3 Minor Problem" which are reported to the Vendor.
(i) P1 Major Condition (this roughly corresponds to
Severity 1 Conditions in the Vendor's ISO 9001 documentation)
means any non-emergency failure of specific features or functions
of the System, any PCS System or any Product that restricts its
operations, but does not render the System, any PCS System or any
Product inoperable, impact traffic capacity or coverage or
require significant manual intervention for the System, any PCS
System or any Product to operate properly and in
<PAGE>
40
accordance with its applicable Specifications. These events will
include loss of diagnostic capabilities and loss of reporting
functions. The Vendor will use all reasonable efforts to use by-
pass or work-around procedures to alleviate such P1 Major
Condition until it is corrected and, upon mutual agreement of the
Parties, the Vendor will resolve such P1 Major Condition during
the next available scheduled Software Upgrade or Equipment
Upgrade.
(ii) P2 Significant Problem (this roughly corresponds
to Severity 2 Conditions in the Vendor's ISO 9001 documentation)
means any non-emergency, intermittently occurring problem related
to specific primary functions or features or any inoperable
secondary functions that do not have a significant adverse effect
on the overall performance of the System, any PCS System or any
Product. The Vendor will undertake appropriate and reasonable
efforts to correct such P2 Significant Problem.
(iii) P3 Minor Problem (this roughly corresponds to
Severity 3 Conditions in the Vendor's ISO 9001 documentation)
means any non-emergency problem that does not affect the
performance or functions of the System, any PCS System or any
Product, and, despite such problem, the System, any PCS System or
any Product is fully operable without restrictions. Such P3 Minor
Problems may include documentation inaccuracies, cosmetics, minor
requests for changes or maintenance requests. The Vendor will
undertake appropriate and reasonable efforts to correct such P3
Minor Problem.
(h) Should a non-emergency problem remain unresolved for the period or
periods of time set forth below following referral to the Vendor by the Owner,
such problem must be reported to the levels of management set forth below to
ensure all available resources necessary to correct such problem will be
committed to address such problem pursuant to the following:
- - - ----------------------------------------------------------------------------
REPORTING LEVELS IF NON-EMERGENCY
IS NOT RESOLVED WITHIN
CONDITION 30 DAYS 45 DAYS 60 DAYS
- - - ----------------------------------------------------------------------------
P1 Technical Manager Customer Service Vice President
Major Condition Director
P2 Technical Manager Customer Service
Significant Problem Director
P3 Technical Manager
Minor Problem
- - - ----------------------------------------------------------------------------
<PAGE>
41
Non-emergency problems referred to the Vendor as a CSR will be resolved
based upon the priority assigned to them as determined by the Owner or as
mutually agreed by the Parties and, to the extent reasonably possible, will be
incorporated into the next scheduled Software release.
2.26.4 ETA and CSR. In the event that emergency technical support
-----------
provided from the Vendor's technical support center is not sufficient to resolve
an E1 Emergency Condition, the Vendor must send a technically qualified person
or persons to the site of such emergency condition or problem to assist the
Owner's employees in solving such condition or problem. The Vendor's
technically qualified person or persons must be on-site as soon as possible, but
in no event more than twenty-four (24) hours after notification to the Vendor by
the Owner, or at such later time as may be mutually agreed on by the Parties.
In the event that emergency technical support provided from the Vendor's
technical support center is not sufficient to resolve an E2 Emergency Condition,
then the Parties will mutually agree to a desired course of action, which may
include requiring the Vendor to send a technically qualified person or persons
to the site of such emergency.
A CSR may be submitted by the Owner to request a repair or work-around of
an emergency condition or repair of a non-emergency problem, or to request a
Software Upgrade or an Equipment Upgrade or other Software or Equipment
operational enhancement. The Owner's CSRs will define the condition or problem
and state whether the Owner considers the CSR to be for a Software Upgrade or an
Equipment Upgrade or other Software or Equipment operational enhancement.
Changes to the System or any PCS System resulting from any CSR must be fully
tested and accepted in accordance with the Specifications. The Vendor must
respond to the submission of a CSR by the Owner within five (5) Business Days,
acknowledging receipt of the CSR. Within thirty (30) days of receipt of the
CSR, the Vendor will respond to the CSR summarizing the Vendor's intended
actions to handle the CSR. A CSR may result in System fixes or enhancements, or
in Product modifications reasonably acceptable to the Owner.
Notwithstanding the above, no event, lack of functionality or failure of
the Test-bed Laboratory will be assigned as an E1 Emergency Condition or E2
Emergency Condition. Any such event, lack of functionality or failure
applicable to the Test-bed Laboratory, which would otherwise be assigned such a
category in accordance with the definitions above, will be assigned a P1 Major
Condition.
2.27 Supply of Additional Products. During the Initial Term of this
-----------------------------
Contract and for a period of three (3) years thereafter, the Vendor will make
available for purchase by the Owner, on applicable terms and conditions set
forth in this Contract or as otherwise mutually agreed between the Parties, PCS
Products to enable the Owner to expand the System and/or any PCS System and/or
any part thereof, which Products will provide equivalent functionality for and
will be compatible with the System or any such PCS System at such time. Nothing
herein will be deemed to prohibit the Vendor from designating any specific PCS
Products as Discontinued Products in accordance with Section 10 of this
Contract.
<PAGE>
42
2.28 Review of Contract. The Vendor has examined in detail and carefully
------------------
studied and compared the Contract with all other information furnished by the
Owner and has promptly reported to the Owner any material errors,
inconsistencies or omissions so discovered or discovered by any of the
Subcontractors. The Vendor will not prosecute any Major Portion of the Work
knowing that it involves a material error, inconsistency or omission in the
Contract without prior written notice to and approval by the Owner. If for any
reason the Vendor violates this subsection 2.28, the Vendor will, in addition to
being subject to any other remedies of the Owner, assume responsibility for such
violation and, in such case, will be deemed to have waived any claims for an
adjustment in any of the Specifications and/or System Standards which results
directly from any such error, inconsistency or omission. This subsection 2.28
does not, nor will be deemed to, in any manner limit the terms of subsection
2.39.
2.29 Licenses, Permits and Approvals. Except as otherwise provided for
-------------------------------
herein with respect to Site Acquisition, Microwave Relocation and Network
Interconnection, any Applicable Permits (in connection with the Vendor's Work)
required by any Government Entity relating to the manufacture, importation,
safety or use of the Products, the System or any PCS System throughout the
United States or in any state or any political sub-division thereof will be the
sole responsibility of the Vendor. Prior to the commencement of any Work and/or
other activities by the Vendor or any of its Subcontractors in connection with
or pursuant to this Contract, upon request of the Owner the Vendor will furnish
the Owner with evidence that such Applicable Permits have been obtained and are
in full force and effect to the extent that Applicable Permits are necessary for
the commencement or undertaking of such activities, and from time to time
thereafter the Vendor, upon the reasonable request of the Owner, will provide
such further evidence as the Owner will deem reasonably necessary.
2.30 Eligibility under Applicable Laws and Applicable Permits. The Vendor
--------------------------------------------------------
will be responsible for ensuring that the Vendor and its Subcontractors are and
remain eligible under all Applicable Laws and Applicable Permits to perform the
Work under this Contract in the various jurisdictions involved.
2.31 Customs Approvals. The Owner agrees to reasonably assist, so long as
-----------------
such assistance will not involve the incurrence of any costs or expenses by the
Owner, the Vendor to obtain and maintain (i) Applicable Permits for importation
into the Products on a duty and customs free basis and (ii) entry or work
permits, visas or authorizations required for personnel engaged by the Vendor to
perform Work under this Contract.
2.32 Owner Participation. In addition to the right of observation
-------------------
contained in subsection 9.4 hereof, the Owner will be entitled to participate in
the Vendor's research and development activities (subject to the reasonable
acceptance of the Vendor) and product development and testing activities
pursuant to this Contract (other than research and development activities
originated by another Customer which is proprietary to such other Customer);
provided that such observation and participation will not affect the Vendor's
- - - --------
responsibilities and warranties hereunder and will not otherwise interfere with
the Vendor's research and development activities. Nothing contained in this
subsection 2.32 purports to grant the Owner rights to the Vendor's research and
development other than such rights
<PAGE>
43
otherwise granted to the Owner pursuant to the terms of this Contract or as
otherwise mutually agreed by the Parties at such time.
2.33 New Development Advisory Board. In order to accommodate the Owner's
------------------------------
participation pursuant to this Contract, including, without limitation, pursuant
to subsections 2.11 and 2.32, the Owner and the Vendor will establish an NDAB
within sixty (60) days of the Effective Date. The purpose of the NDAB will be
to review the development requirements and high level development milestones, to
ensure that the Vendor understands the Owner's requirements for each PCS System,
the System and/or any extensions thereto including, without limitation, any
subsequent Products and/or enhancements. The NDAB will provide an executive
forum to discuss product ideas, Owner requirements and its recommended
development prioritization for improved infrastructure-based subscriber features
and System features, functions and capabilities. The focus of the NDAB will be
on System features and services, new PCS Products, System enhancements, critical
operational issues, future developments beyond CDMA cellular without the need
for System additions and on such other matters as the Parties mutually agree
upon from time to time.
2.34 Market Development Manager. The Vendor will provide a market
--------------------------
development manager to coordinate the efforts of the Vendor in meeting its
obligations relating to the NDAB who will specifically focus on new Products,
CDMA services and features. Such market development manager must be
knowledgeable in CDMA technology and the Owner's System and must work closely,
and on a regularly scheduled basis, with the Owner's senior engineering and
marketing personnel on feature development, feature roll-out, future road maps
for PCS Products, and any other marketing aspect of providing PCS that the Owner
believes is beneficial to the System and/or any PCS System at such time. The
Vendor's market development manager and the manager's staff will serve as the
Owner's direct liaison with the Vendor to ensure that the Vendor's product
development teams are focusing on the Owner's priorities as described to the
Vendor by the Owner from time to time either through the NDAB or by any other
means acceptable to the Parties. Nothing contained in this subsection 2.34 will
in any way limit and/or modify the Owner's ability to enforce its rights under
this Contract or to otherwise maintain contacts with the Vendor in any other way
it sees fit.
2.35 Further Assurances. The Vendor will execute and deliver all further
------------------
instruments and documents, and take all further action, including, but not
limited to, assisting the Owner in filing notices of completion with the
appropriate state and local lien recording offices, that may be necessary or
that the Owner may reasonably request in order to enable the Vendor to complete
performance of the Work or to effectuate the purposes or intent of this
Contract.
2.36 Liens and Other Encumbrances. (a) In consideration of the mutual
----------------------------
undertakings herein and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Vendor:
(i) covenants and agrees to protect and keep free the System and/or
any PCS System and any and all interests and estates therein, and all
improvements and
<PAGE>
44
materials now or hereafter placed thereon under the terms of this Contract,
from any and all claims, liens, charges or encumbrances of the nature of
mechanics, labor or materialmen liens or otherwise arising out of or in
connection with performance by any Subcontractor, including services or
furnishing of any materials hereunder, and to promptly have any such lien
released by bond or otherwise;
(ii) give notice of this subsection 2.36 to each Subcontractor before
such Subcontractor furnishes any labor or materials for the System and/or
any PCS System; and
(iii) make any and all filings reasonably requested by the Owner in
order that the Owner may take advantage of the relevant local mechanics'
lien waiver procedures with respect to mechanics' liens of any such
Subcontractor.
(b) If any laborers', materialmen's, mechanics', or other similar lien or
claim thereof is filed by any Subcontractor, the Vendor will cause such lien to
be satisfied or otherwise discharged, or will file a bond in form and substance
satisfactory to the Owner in lieu thereof within ten (10) days of the Vendor's
receipt of notice of such filing. If any such lien is filed or otherwise
imposed, and the Vendor does not cause such lien to be released and discharged
forthwith, or file a bond in lieu thereof, then, without limiting the Owner's
other available remedies, the Owner has the right, but not the obligation, to
pay all sums necessary to obtain such release and discharge or otherwise cause
the lien to be removed or bonded to the Owner's satisfaction from funds retained
from any payment then due or thereafter to become due to the Vendor.
(c) The Owner reserves the right to post or place within the System and/or
any PCS System notices of non-responsibility or to do any other act required by
Applicable Law, to exempt the Owner and the System from any liability to third
parties by reason of any work or improvements to be performed or furnished
hereunder; provided that failure by the Owner to do so will not release or
-------- ----
discharge the Vendor from any of its obligations hereunder.
2.37 Forecasting and Ordering. Throughout the Term of this Contract, on a
------------------------
monthly basis commencing on the Effective Date, the Owner will provide the
Vendor with rolling twelve-month forecasts of its ongoing Product and Service
requirements. Such forecasts will, to the extent applicable, include, but not
be limited to, the Owner's Site Acquisition, Switch Site Ready Date, Network
Interconnection and Microwave Relocation progress to such date. Upon the review
and reasonable acceptance of such forecasts by the Vendor pursuant to the terms
of this Contract, the Owner will have the right, but not the obligation, to
confirm to the Vendor its orders for the Products and Services set forth in such
forecasts pursuant to the Owner's delivery to the Vendor of formal written
orders specifying the Products and/or Services to be purchased in connection
with the terms of this Contract. The Vendor's obligation to deliver in
accordance with accepted forecasts will be subject to receipt of the Owner's
orders in accordance with the applicable ordering procedures. If the Owner
fails to deliver any forecast pursuant to this subsection 2.37 for any reason,
the Vendor will be responsible for asking the Owner to actually deliver such
forecast to the extent it requires such forecast at such time.
<PAGE>
45
2.38 Microwave Relocation; Network Interconnection. (a) The Vendor will
---------------------------------------------
not be responsible for Microwave Relocation within the System. Unless otherwise
waived by the Owner, however, completion of Microwave Relocation in any given
System Area will be a prerequisite to the commencement of the Substantial
Completion testing to be performed by the Vendor in accordance with Exhibit B3
in such System Area. The Owner may at its option choose instead to modify the
System performance criteria as set forth in Exhibit F by way of a Change Order
in order to account for the failure to fully and/or satisfactorily complete
Microwave Relocation in any such System Area such that Substantial Completion
testing in accordance with the requirements of Exhibit B3 may proceed.
Notwithstanding anything stated herein to the contrary (other than clause (b)
below), the Owner's failure and/or inability to fully complete Microwave
Relocation in any such System Area within twelve (12) months of Milestone 6 (as
set forth in Exhibit A1) (the "Microwave Delay Period") will entitle the Vendor
to otherwise commence Substantial Completion testing (as deemed applicable and
appropriate pursuant to good faith mutual agreement between the Parties at such
time) for the PCS System in such System Area in accordance with Exhibit B3.
Pursuant to the requirements of Exhibits A1, B1 and B3 with respect to any PCS
System within the System the Owner may, upon the prior written request of the
Vendor, consent (such consent not to be unreasonably withheld) to extend the
scheduling of the Vendor's Substantial Completion testing by not more than an
additional sixty (60) days pursuant to Milestone 8 in the event that more than
ten percent (10%) of the System Element Sites in such PCS System as set forth in
the Final Site Count for such PCS System require Vendor optimization pursuant to
Exhibit B1 that was otherwise delayed due to incomplete Microwave Relocation in
such PCS System immediately prior to the date scheduled for Substantial
Completion testing pursuant to Milestone 8 (as set forth on Exhibit A1).
(b) The Vendor will not be responsible for Network Interconnection within
the System. In any given System Area, completion of Network Interconnection in
such System Area at least sixty (60) days (or as otherwise mutually agreed
between the Parties at such time) prior to Milestone 7 (as set forth on Exhibit
A1) will be a prerequisite to the Vendor's obligation pursuant to the terms of
this Contract to successfully achieve Milestone 7 (as set forth in Exhibit A1)
in such System Area.
2.39 Vendor To Inform Itself Fully; Waiver of Defense. (a) The Vendor
------------------------------------------------
will be deemed to have notice of and to have fully examined and approved the
Specifications and all other documents referred to herein, and all drawings,
specifications, schedules, terms and conditions of this Contract, regulations
and other information in relation to this Contract and/or any amendments,
modifications or supplements thereto at any time on or after the Effective Date
and to have fully examined, understood and satisfied itself as to all
information of which the Vendor is aware or should have been aware and which is
relevant as to the risks, contingencies and other circumstances which could
affect this Contract and in particular the installation of the System, any PCS
System or any part thereof. The Owner, its directors, officers, employees and
agents and all of them have no liability in law or equity or in contract or in
tort with respect to any such specifications, drawings, information, risks,
contingencies or other circumstances.
<PAGE>
46
(b) The fact that the Owner may have prepared or taken part in the
preparation of Specifications, documents, drawings, Engineering, designs,
specifications, schedules, terms or conditions, or may have designated
particular types of Products and/or Services to be furnished hereunder or
designated particular manufacturers or suppliers of Products or Services, or may
have taken part in the designation of any particular Subcontractor(s) or
subcontractor(s), or given vetoes or approvals with respect to the Work, or
otherwise become involved in the Work, will not give rise to any claim by the
Vendor or any Subcontractor or any defense to any warranty or other claims
asserted against the Vendor or any Subcontractor to the extent that any such
claim or defense arises out of any specifications, drawings, documents, or other
information, which the Vendor is deemed to have had notice of pursuant to
subsection 2.39(a) above and with respect to any such information arising after
the Effective Date which the Vendor had a reasonable opportunity to review.
2.40 CMI/HIC. From time to time throughout the Term of this Contract the
-------
Parties may mutually agree as to the incorporation and integration of CMI/HIC
into the System in accordance with Exhibit D.
2.41 Site Acquisition Delay Testing. In any given System Area within the
------------------------------
Initial System, in the event Site Acquisition Substantial Completion is delayed
more than one hundred and fifty (150) days beyond the forecasted date for Site
Acquisition Substantial Completion as set forth in the M5 Forecast (the "Site
Acquisition Delay Period") provided to the Vendor with the Build Notice
applicable to such System Area due solely to the Owner's inability to achieve
sufficient Site Acquisition in such System Area, the Vendor will have the right,
but not the obligation, to commence Substantial Completion testing (as deemed
applicable and appropriate pursuant to good faith mutual agreement between the
Parties at such time but in any event to be completed within thirty (30) days of
such commencement) for that portion of the otherwise incomplete PCS System in
which the Vendor has (i) completed all applicable Facilities Preparation
Services and (ii) fully Installed, to the extent possible at such time, all such
Products to be Installed by the Vendor or its Subcontractors on otherwise fully
constructed System Element Locations within such PCS System. Subject to
Section 6, in the event the Vendor successfully completes such modified
Substantial Completion testing for such Installed portion of such otherwise
incomplete PCS System pursuant to and in accordance with this subsection 2.41
and Exhibit B3, the Vendor will be entitled to such portion of the payments that
otherwise would be made by the Owner pursuant to subsection 6.3(b) as applicable
only to those Services and Products actually provided by the Vendor pursuant to
and in accordance with the terms of this Contract in such portion of the
otherwise incomplete PCS System that was subject to testing pursuant to this
subsection 2.41. Nothing contained herein to the contrary will in any way
modify the Vendor's obligations as to the completion and testing of the
remaining portion of such PCS System pursuant to and in accordance with the
terms of this Contract, including but not limited to the Project Milestones set
forth in Exhibit A1. Nothing contained herein to the contrary will in any way
require the Owner to pay the Vendor amounts already paid or otherwise provided
for pursuant to any other provision of this Contract.
SECTION 3 AFFILIATES
<PAGE>
47
3.1 Additional Affiliates. On a quarterly basis commencing on the
---------------------
Effective Date and during the term of this Contract, the Owner may, upon fifteen
(15) days' prior written notice to the Vendor, designate any Person who has been
licensed to use PCS in the United States which is not an Initial Affiliate as an
"Additional Affiliate"; provided that the Vendor will have a reasonable
-------- ----
opportunity to review and approve such designation, such approval not to be
unreasonably withheld, based upon (i) reasonable credit criteria within the
context of the PCS industry, (ii) the fact that such proposed Additional
Affiliate has not in the past materially breached prior material agreements with
the Vendor, (iii) the fact that the proposed Additional Affiliate is not, at the
time of such determination, a direct competitor to the Vendor in the wireless
telecommunications business and (iv) the fact that the proposed Additional
Affiliate is not, at the time of such determination, otherwise engaged with the
Vendor in a material agreement for the purchase and/or supply of PCS CDMA
wireless technology; and provided, further, that (x) the Owner, any Partner or
-------- -------
any Initial Affiliate has at least a ten percent (10%) equity ownership in such
Person, (y) such Person is controlled by or under the common control with the
Owner, any Partner or any Initial Affiliate or (z) there exists between the
Owner and such Person an Additional Affiliate Arrangement.
3.2 Agreements with Initial Affiliates. During the term of this Contract,
----------------------------------
the Owner will have the right, but not the obligation, to require that the
Vendor enter into separate agreements with any Initial Affiliate designated by
the Owner (each, an "Initial Affiliate Agreement") for the supply of Products
and Services on similar terms and conditions as those set forth herein that
relate to the initial build-out of the Initial System as set forth on Schedule
4; provided that the Vendor will not be required to include in any Initial
-------- ----
Affiliate Agreement any provisions substantially similar to those set forth in
subsections 2.3(a), 2.5, 2.23 (but only to the extent of the specific amounts
set forth in such subsection 2.23), 3.1, 3.3, 11.7, 15.1, 21.1, 24.1 and 27.5;
and provided further that after the date on which Final Acceptance of the last
-------- -------
PCS System to reach Final Acceptance has occurred, Initial Affiliate Agreements
(whether or not executed prior to such date) need not contain or retain
substantially the same terms and conditions as those set forth herein, except
for those terms and conditions related to pricing and warranties as are then
available to the Owner pursuant to this Contract. Any Initial Affiliate that
enters into an Initial Affiliate Agreement with the Vendor will have the right
to choose among the Products and Services offered to the Owner under this
Contract solely for use within the Nationwide Network.
3.3 Agreements with Additional Affiliates. During the term of this
-------------------------------------
Contract, the Owner will have the right, but not the obligation, to require that
the Vendor enter into separate agreements with any Additional Affiliate
designated by the Owner (each, an "Additional Affiliate Agreement") for the
supply of Products and Services at similar price and warranty terms as are then
available to the Owner pursuant to the terms of this Contract. The Vendor must
enter into good faith negotiations for the establishment of such Additional
Affiliate Agreements with any such Additional Affiliate promptly upon the
designation of such Additional Affiliate by the Owner and upon notice to the
Vendor that such Additional Affiliate desires to enter into an Additional
Affiliate Agreement. Any Additional Affiliate that enters into an Additional
Affiliate Agreement with the Vendor will have the right to choose among the
Products and Services offered to the Owner under this Contract solely for use
within the Nationwide Network.
<PAGE>
48
3.4 Affiliate Rights. Notwithstanding anything herein contained to the
----------------
contrary, Affiliates will not be deemed third party beneficiaries to this
Contract or otherwise have any rights hereunder. Only the Owner may designate a
Person as an Affiliate in accordance with the terms of this Section 3 and only
the Owner has the right and/or the ability to enforce any rights hereunder
against the Vendor.
SECTION 4 SUBCONTRACTORS
4.1 Subcontractors. The Vendor will select Subcontractors in connection
--------------
with the performance of the Work such that all Products and Services provided by
any such Subcontractors meet the System Standards and reliability and
performance requirements set forth in this Contract. Regardless of whether or
not the Vendor obtains approval from the Owner of a Subcontractor or whether the
Vendor uses a Subcontractor recommended by the Owner, use by the Vendor of a
Subcontractor will not, under any circumstances: (i) give rise to any claim by
the Vendor against the Owner if such Subcontractor breaches its subcontract or
contract with the Vendor; (ii) give rise to any claim by such Subcontractor
against the Owner; (iii) create any contractual obligation by the Owner to the
Subcontractor; (iv) give rise to a waiver by the Owner of its rights to reject
any Defects or Deficiencies or Defective Work; or (v) in any way release the
Vendor from being solely responsible to the Owner for the Work to be performed
under this Contract.
4.2 The Vendor's Liability. The Vendor is the general contractor for the
----------------------
Work and remains responsible for all of its obligations under this Contract,
including the Work, regardless of whether a subcontract or supply agreement is
made or whether the Vendor relies upon any Subcontractor to any extent. The
Vendor's use of Subcontractors for any of the Work will in no way increase the
Vendor's rights or diminish the Vendor's liabilities to the Owner with respect
to this Contract, and in all events, except as otherwise expressly provided for
herein, the Vendor's rights and liabilities hereunder with respect to the Owner
will be as though the Vendor had itself performed such Work. The Vendor will be
liable for any delays caused by any Subcontractor as if such delays were caused
by the Vendor.
4.3 No Effect of Inconsistent Terms in Subcontracts. The terms of this
-----------------------------------------------
Contract will in all events be binding upon the Vendor regardless of and without
regard to the existence of any inconsistent terms in any agreement between the
Vendor and any Subcontractor whether or not and without regard to the fact that
the Owner may have directly and/or indirectly had notice of any such
inconsistent term.
4.4 Assignability of Subcontracts to Owner. Each agreement between the
--------------------------------------
Vendor and a Subcontractor must contain a provision stating that, in the event
that the Vendor is terminated for cause, convenience, abandonment of this
Contract or otherwise, (i) each Subcontractor will continue its portion of the
Work as may be requested by the Owner and (ii) such agreement permits assignment
thereof without penalty to the Owner and, in order to create security interests,
to the Other Vendors, in either case at the option of the Owner and for the same
price and under the same terms and conditions as originally specified in such
Subcontractor's agreement with the Vendor.
<PAGE>
49
4.5 Removal of Subcontractor or Subcontractor's Personnel. The Owner has
-----------------------------------------------------
the right at any time to require removal of a Subcontractor and/or any of a
Subcontractor's personnel from Work on the System upon reasonable grounds and
reasonable prior notice to the Vendor. The exercise of such right by the Owner
will have no effect on the provisions of subsections 4.1 and 4.2.
4.6 Subcontractor Insurance. The Vendor must require its Subcontractors
-----------------------
to obtain, maintain and keep in force during the time they are engaged in
providing Products and Services hereunder adequate insurance coverage consistent
with Section 18 and Schedule 6 (provided that the maintenance of any such
Subcontractor insurance will not relieve the Vendor of its other obligations
pursuant to Section 18 and Schedule 6). The Vendor will, upon the Owner's
request, furnish the Owner with evidence of such insurance in form and substance
reasonably satisfactory to the Owner. All such insurance will be subject to the
Owner's approval. All Subcontractors must be of bondable financial condition.
Nothing herein will be deemed to bar the Vendor or any Subcontractor from
obtaining such insurance on a project basis for each of the Subcontractors
participating in such project.
4.7 Review and Approval not Relief of Vendor Liability. Any inspection,
--------------------------------------------------
review or approval by the Owner permitted under this Contract of any portion of
the Work by the Vendor or any Subcontractor will not relieve the Vendor of any
duties, liabilities or obligations under this Contract, but nothing contained in
this subsection 4.7 will be deemed a bar of any waiver given by the Owner to the
Vendor pursuant to and in accordance with the terms of this Contract.
4.8 Vendor Warranties. Except as otherwise expressly provided in Section
-----------------
17, the warranties of the Vendor pursuant to Section 17 will be deemed to
apply to all Work performed by any Subcontractor as though the Vendor had itself
performed such Work. Except as otherwise specifically provided in Section 17,
the Parties agree that such warranties will not be enforceable merely on a
"pass-through" basis. The Owner may, but will not be obligated to, enforce
such warranties of any Subcontractor to the extent that the Owner determines
that the Vendor is not paying and/or performing its warranties; provided that
-------- ----
any such election by the Owner will not relieve the Vendor from any obligations
or liability with respect to any such warranty.
4.9 Payment of Subcontractors. The Vendor must make all payments to all
-------------------------
Subcontractors (except in the case of legitimate disputes between the Vendor and
any such Subcontractor arising out of the agreement between the Vendor and such
Subcontractor) in accordance with the respective agreements between the Vendor
and its Subcontractors such that Subcontractors will not be in a position to
enforce liens and/or other rights against the Owner, the System or any part
thereof.
SECTION 5 TERM OF CONTRACT
<PAGE>
50
5.1 Initial Term. The initial term of this Contract (the "Initial Term")
------------
is ten (10) years from the Effective Date, subject to the terms and conditions
of this Contract including, without limitation, the termination provisions set
forth in Section 24.
5.2 Renewal. This Contract is subject to renewal for one year periods
-------
(all such periods plus the Initial Term, the "Term") following the expiration of
the Initial Term, on the same terms and conditions contained herein, unless
either Party gives notice to each other Party of its intention not to renew this
Contract within ninety (90) days prior to the expiration of the then current
Term.
SECTION 6 PRICES AND PAYMENT
6.1 Prices. The prices for the Work to be performed pursuant to this
------
Contract (collectively, the "Contract Price") are as set forth on Schedules 2
and 3, subject to the price variation provisions contained on Schedule 2.
Notwithstanding the prices set forth on Schedules 2 and 3 and the Contract
Price, the Vendor will provide the Owner credits in aggregate value not to
exceed [ ] to purchase any Products in the following System Areas and in the
following amounts per such System Areas:
System Credit
Area Amount
----------- ----------
Detroit [ ]
Milwaukee [ ]
Denver [ ]
Salt Lake [ ]
Spokane [ ]
The Owner is also entitled to additional purchase credits of up to [ ] to be
applied in the Owner's discretion to the purchase of any Products in any or all
of the above listed System Areas. At any time during the Term of this Contract
that the Owner wishes to apply the purchase credits referenced in this
subsection 6.1 to any of its Products purchases for the System Areas listed
immediately above, the Owner must notify the Vendor of its intent to do so and
it will be the Vendor's sole responsibility, throughout the Term of this
Contract, to keep account of the remaining purchase credits available to the
Owner. Prices for the Work not otherwise set forth on Schedules 2 or 3, if not
otherwise set forth in this Contract, will be no greater than the Vendor's best
list prices then in effect at the time of ordering by the Owner (as established
by the Vendor's then applicable Customer Price Guide for sales in the United
States) and at discounts otherwise provided to the Owner pursuant to the terms
of this Contract.
6.2 Price Reduction. The Contract Price will be reduced by all amounts
---------------
saved as a result of Engineering changes suggested by the Owner which are
incorporated into the Specifications by the Vendor provided that the Vendor
--------
reasonably believes that such changes will not make it impossible or
impracticable to comply with any of its obligations under this
<PAGE>
51
Contract, including, without limitation, those Vendor obligations relating to
the performance criteria applicable to the System. Any reduction in Contract
Price pursuant to the preceding sentence will be agreed upon promptly by the
Owner and the Vendor. Failure of the Parties to mutually agree to such price
reductions within ten (10) days from the date the Owner delivered written notice
to the Vendor of the need for such price reduction due to incorporated
Engineering changes will result in the automatic reference of such matter to
dispute resolution in accordance with subsection 23.1. During the pendency of
any such dispute resolution prices payable pursuant to subsection 6.1 will be
payable by the Owner to the Vendor at the reduced level pursuant to this
subsection 6.2. If in accordance with subsection 23.1 such dispute resolution
results in a finding that such price reduction was not in fact justified then
the Owner will reimburse the Vendor the amounts that would otherwise have been
payable to the Vendor during the pendency of such dispute resolution.
6.3 Payments. Except with respect to Facilities Preparation Services and
--------
RF Engineering as set forth below, an invoice may be submitted to the Owner only
after shipment of a Product or performance of a Service. Invoices for Products
delivered and Services performed on or prior to Final Acceptance of the PCS
System to which such invoices relate are payable in the following manner:
(a) twenty-five percent (25%) of the amount of each invoice will be paid
within thirty (30) days from receipt of the invoice by the Owner,
(b) fifty-seven and one half percent (57-1/2%) of the amount of such
invoice will be paid within thirty (30) days from the later of (i) Substantial
Completion of the PCS System to which such invoice relates and (ii) receipt of
the invoice by the Owner;
(c) seventeen and one half percent (17-1/2%) of the amount of the invoice
will be paid within thirty (30) days from the later of (i) Final Acceptance of
the PCS System to which such invoice relates and (ii) receipt of the invoice by
the Owner; and
(d) Pursuant to subsection 2.6(d) and provided that any MSCs sought to be
covered hereby have in fact been installed by the Vendor in accordance with
subsection 2.6(d), the Owner will pay to the Vendor [ ] of the price invoiced
to the Owner for any MSC within any PCS System within the Initial System upon
the Vendor's successful achievement of Milestone 5 (as set forth in Exhibit A1)
in such PCS System and an additional [ ] of the price invoiced to the Owner
for any such MSC upon the Vendor's successful achievement of Milestone 8 (as set
forth in Exhibit A1) in such PCS System. All other amounts payable by the Owner
to the Vendor for MSCs within any PCS System within the Initial System will be
otherwise payable in accordance with the terms of this Contract provided that
--------
the Owner will not be obligated to make any payments to the Vendor for MSCs
pursuant to subsection 6.3(b) to the extent it made any payments for any such
MSCs pursuant to this subsection 6.3(d).
Notwithstanding the foregoing, (i) invoices for RF Engineering for each PCS
System will be payable in accordance with subsection 6.4(b) below and (ii)
invoices for Facilities Preparation Services within any PCS System may be
submitted by the Vendor in accordance
<PAGE>
52
with the terms of Exhibit B2 and will be payable by the Owner with respect to
each System Element Facility within thirty (30) days after the date of
acceptance by the Owner of any such System Element Facility in accordance with
the terms of Exhibit B2. Payments for third party manufactured Products (other
than any PCS Products or any Products integral to construction (e.g., concrete,
----
nuts, bolts and other customary building supplies)) purchased by the Vendor or
its Subcontractors for installation on the Owner's System Element Locations
during the course of and as part of Facilities Preparation Services may be made
by the Owner on a current basis (but in no event more often than monthly during
the course of such Facilities Preparation Services) as mutually agreed by the
Parties.
63.1 Additional Products not in Initial System or Otherwise Provided for
------------------------------------------------------------------
in Section 2.2. Any invoice for Products delivered and installed by the Vendor
- - - -------------
and Services performed by the Vendor not otherwise provided for under this
subsection 6.3, subsection 2.2(a) or as otherwise specifically set forth in this
Contract will be payable as follows: [ ] of the amount of the invoice will be
payable within thirty (30) days following receipt of such Products by the Owner
or the full performance of the Services by the Vendor and the outstanding
balance will be payable upon final acceptance by the Owner of the Products or
Services to which such invoice relates. Any invoice (not otherwise provided for
under this subsection 6.3) for Products delivered by the Vendor but not
installed by the Vendor to which such invoice relates will be payable by the
Owner at the level of [ ] of the amount of such invoice within thirty (30)
days from the date of delivery of such invoice to the Owner. For any Services
not otherwise covered by this last paragraph of subsection 6.3, including
without limitation repair services, Engineering and Installation Services not
performed pursuant to a combined furnish and install order, and maintenance fees
(including Annual Release Maintenance Fees), an invoice will be payable by the
Owner at the level of [ ] of the amount of such invoice within thirty (30)
days from the date of delivery of such invoice to the Owner or as otherwise
mutually agreed in good faith between the Parties. For the purposes of this last
paragraph of this subsection 6.3 any acceptance or "final acceptance" relevant
to the Owner's obligation to pay will be deemed to occur on the earlier of (i)
the Owner's In Revenue use of such Products and/or Services, (ii) the Owner's
notification of acceptance of such Products and/or Services or (iii) thirty (30)
days following, as applicable, the Owner's completion of Installation of the
Products (where the Vendor is not performing Installation Services), without the
Owner's having given notice of non-acceptance of such Products and/or Services.
6.4 Payments for Facilities Preparation Services. (a) Upon receipt of
--------------------------------------------
payment from the Owner for Facilities Preparation Services the Vendor will
promptly pay each Subcontractor for Facilities Preparation Services the amount
to which each Subcontractor is entitled pursuant to such Subcontractor's
agreement with the Vendor, based on each Subcontractor's portion of such Work.
By appropriate agreement in each Subcontractor's agreement with the Vendor, the
Vendor will require such Subcontractor to make payments to sub-Subcontractors
and materialmen in a similar manner. The Owner has no duty or obligation to
insure the payment of money to a Subcontractor, sub-Subcontractor, materialman
or any other third party, any such payment being the obligation of the Vendor.
Subcontractors, sub-Subcontractors, materialmen and any other third parties will
not be deemed third party beneficiaries of the Owner's obligations to pay the
Vendor. On or before
<PAGE>
53
the Owner's acceptance of the Facilities Preparation Services of any System
Element Facility within any given PCS System in accordance with the terms of
Exhibit B2, the Owner will have received details (in a form reasonably
satisfactory to the Owner) of all invoices and charges for such Facilities
Preparation Services incurred by the Vendor in connection with the Facilities
Preparation Services for such System Element Facility.
(b) The Owner will make payment to the Vendor for RF Engineering Services
performed by the Vendor within any given System Area pursuant to the terms of
this Contract based upon the following: (i) [ ] of the "RF Engineering
Services price" within the applicable System Area will be payable by the Owner
within thirty (30) days after receiving the Preliminary RF Design for such
System Area pursuant to Milestone 2 for such System Area as set forth on
Exhibit A1; (ii) [ ] of the RF Engineering Services price within the
applicable PCS System will be payable by the Owner within thirty (30) days after
the determination of the Final Site Count and delivery of the Final RF Design
for such PCS System in accordance with subsection 2.6 and Milestone 5 for
such System Area as set forth on Exhibit A1; and (iii) [ ] of the RF
Engineering Services price will be payable by the Owner within the applicable
PCS System within thirty (30) days of the Vendor's Installation of the Products
for such PCS System in accordance with the terms of the Contract and Milestone 7
for such System Area as set forth on Exhibit A1. For the purposes of this
subsection 6.4(b) the term "RF Engineering Services price" will mean the number
of System Element Facilities within the applicable PCS System pursuant to the
build-out of the Initial System multiplied by the Vendor's System Element
Facility RF Engineering price as set forth on Schedule 3. In any given PCS
System and/or System Area the RF Engineering Services price will be readjusted
(and any amounts owed to either Party will be reimbursed) at the point in time
that payment would be made for such RF Engineering pursuant to clause (iii) of
this subsection 6.4(b) in accordance with the determination of the actual Final
Site Count and delivery of Final RF Design applicable to such PCS System.
6.5 Monthly Forecasts. Commencing on the Effective Date, the Vendor will
-----------------
provide the Owner with monthly forecasts of the costs of RF Engineering and
Facilities Preparation Services in each PCS System in which such Services are
being provided by the Vendor and/or any of its Subcontractors throughout the
period that any such Services are being provided during the Term of this
Contract. The forecasts provided by the Vendor pursuant to this subsection 6.5
must be in sufficient detail to reasonably inform the Owner of the nature of the
costs to be incurred for each of RF Engineering and Facilities Preparation
Services in each of the PCS Systems in which such Services are being provided by
the Vendor and/or any of its Subcontractors pursuant to the terms of this
Contract.
6.6 No Payment in Event of Material Breach. Notwithstanding any other
--------------------------------------
provision to the contrary contained herein, the Owner will have no obligation to
make any payment with respect to the affected PCS System in addition to amounts
previously paid to the Vendor at any time the Vendor is in material breach of
this Contract with respect to such PCS System until and unless such breach is
cured or waived by the Owner in accordance with the terms of this Contract.
<PAGE>
54
6.7 Microwave Relocation Delay Partial Payments. In the event the Vendor
-------------------------------------------
has achieved Milestone 7 (as set forth on Exhibit A1) within any given PCS
System but there is a delay in the Owner's completion of Microwave Relocation in
such PCS System pursuant to and in accordance with subsection 2.38, then during
the Microwave Delay Period within such PCS System, the Owner agrees to pay to
the Vendor [ ] provided that Substantial Completion (as deemed applicable and
-------- ----
appropriate pursuant to good faith mutual agreement between the Parties at such
time) of such PCS System will have been achieved by the Vendor in accordance
with the terms of this Contract and Exhibit B3. Nothing contained herein to the
contrary will in any way release the Vendor from its obligations or otherwise
modify the Vendor's obligations as to the completion of testing in accordance
with Exhibit B3 once Microwave Relocation in such affected PCS System or
affected portion of a PCS System has been successfully achieved by the Owner.
Nothing contained herein to the contrary will in any way require the Owner to
pay the Vendor amounts already paid or otherwise provided for pursuant to any
other provision of this Contract.
6.8 In Revenue Payments. At any time during the Site Acquisition Delay
-------------------
Period or the Microwave Delay Period, as the case may be, the Owner may, in its
sole discretion, decide to place the PCS System or any portion thereof which is
subject to such delay into In Revenue Service. In the event the Owner does in
fact decide, in its sole discretion, to place any PCS System or any portion of a
PCS System into In Revenue Service during any such Site Acquisition Delay Period
or Microwave Delay Period, as the case may be, the Owner will be obligated to
pay to the Vendor the amounts it would have otherwise paid to the Vendor upon
the Substantial Completion of such In Revenue PCS System or In Revenue portion
of such PCS System, as the case may be, and the Vendor will be entitled to
commence Substantial Completion testing for such In Revenue PCS System or In
Revenue portion of such PCS System; provided that the Owner understands that the
-------- ----
Vendor can only do such Substantial Completion testing as set forth in Exhibit
B3 as is at such time applicable and appropriate (pursuant to the good faith
mutual agreement of the Parties at such time) to such In Revenue PCS System or
In Revenue portion of such PCS System. The Parties expressly understand and
agree that this subsection 6.8 will only be effective in the event that the
Owner chooses, in its sole discretion, to place a PCS System or a portion
thereof In Revenue during a Microwave Delay Period or Site Acquisition Delay
Period, as applicable to such In Revenue PCS System or In Revenue portion of
such PCS System. Nothing contained herein to the contrary will in any way
modify the Vendor's obligations as to the completion and testing of the
remaining incomplete non-In Revenue portion of any such PCS System which is
otherwise partially In Revenue pursuant to and in accordance with the terms of
this Contract, including but not limited to the Project Milestones set forth on
Exhibit A1. Nothing contained herein to the contrary will in any way require
the Owner to pay the Vendor
<PAGE>
55
amounts already paid or otherwise provided for pursuant to any other provision
of this Contract.
SECTION 7 ORDERS AND SCHEDULING
7.1 Initial Commitment. Subject to subsection 7.2 and to subsection 2.6
------------------
and the determination of the Final Site Count and the delivery of the Final RF
Engineering Plan for each PCS System, the Parties understand that the quantities
of Products and Services identified on Schedules 2 and 3 which are necessary for
the build-out by the Vendor of the Initial System pursuant to the terms and
conditions of this Contract constitute the Owner's initial purchase commitment
under this Contract (the "Initial Commitment").
7.2 Change Orders. The Owner has the right by way of written orders
-------------
("Change Orders") to request Expansions, other revisions and/or modifications in
the Work, including but not limited to the Specifications, the manner of
performance of the Work or the timing of the completion of the Work; provided
--------
that specific Change Orders will be submitted to the Vendor and the Vendor
- - - ----
(subject to the Owner's agreement) will be entitled to make reasonable price
and/or Project Milestone adjustments to the Contract Price in the case of
material modifications. The Vendor must promptly notify the Owner of any such
requested change or changes to Products which may materially affect the
operation and/or maintenance of the System, any PCS System or any part thereof.
The Parties agree that within fifteen (15) Business Days after the Owner's
initial request for a Change Order pursuant to this subsection 7.2 they will
mutually agree to all aspects of such Change Order which agreement will be
evidenced by a writing executed by an authorized representative of each of the
Parties. In the event the Vendor refuses to agree to any such Change Order
within such fifteen (15) day period then the Vendor will provide a written
notice to the Owner detailing its reasons for such refusal and if the Owner, at
such time, disagrees with the reasons set forth in such Vendor notice the matter
will then be referred to dispute resolution pursuant to Section 23. Nothing
contained in this subsection 7.2 is intended to limit the Vendor's right, from
time to time, to make suggestions for modifications to the Work or the
Specifications pursuant to and in accordance with this subsection 7.2 and the
terms of this Contract, provided that in any such event the Owner, in its sole
-------- ----
and absolute discretion pursuant to the terms of this Contract may refuse to
make any such modification or otherwise agree to issue a Change Order
incorporating any such Vendor suggestion.
7.3 Cancellation. During the term of this Contract, and subject to
------------
Section 24, the Owner will have the right, but not the obligation, at any time
to cancel, in whole or in part, any order made pursuant to the terms of this
Contract upon advance written notice to the Vendor. In the event of a
cancellation permitted hereunder, the Owner will pay to the Vendor order
cancellation charges in accordance with, and pursuant to, the terms of Schedule
11.
<PAGE>
56
SECTION 8 INSTALLATION
8.1 Installation. The Vendor will furnish and install the Products
------------
pursuant to the Project Milestones set forth on Exhibit A and in accordance with
the requirements and criteria set forth in Exhibit D. In accordance with and
subject to the Project Milestones set forth on Exhibit A (and the intervals set
forth therein and herein), the Vendor will complete all Product Installation in
any given PCS System in conformance with the requirements and criteria set forth
in Exhibit D within thirty-two and one-half (32-1/2) days of completion of the
Facilities Preparation Services pursuant to Milestone 6 (as set forth in Exhibit
A1) in such PCS System.
8.2 No Interference. The Vendor will install the Products and build each
---------------
of the PCS Systems so as to cause no unauthorized interference with or
obstruction to lands and thoroughfares or rights of way on or near which the
Installation work may be performed. The Vendor must exercise every reasonable
safeguard to avoid damage to existing facilities, and if repairs or new
construction are required in order to replace facilities damaged by the Vendor
due to its carelessness, negligence or willful misconduct, such repairs or new
construction will be at the Vendor's sole cost and expense.
SECTION 9 ACCEPTANCE TESTING AND ACCEPTANCE
9.1 Acceptance Testing. The Vendor must carry out the Acceptance Tests on
------------------
the Products and the PCS Systems as specified in Exhibit B3 and each PCS System
must successfully achieve acceptance (including Substantial Completion and Final
Acceptance) in accordance with the terms of Exhibit B3.
9.2 Costs and Expenses. The costs and expenses of such Acceptance Tests
------------------
will be borne by the Vendor, and the Owner will not be charged or billed for
such costs and expenses, except to the extent that such charges or expenses are
not included in the Contract Price pursuant to and in accordance with the terms
of this Contract. If the Acceptance Tests performed by the Vendor are not
satisfied in accordance with the relevant requirements of Exhibit B3 or are
otherwise inconclusive in the reasonable judgment of the Owner, the Owner will
have the right to order further Acceptance Tests at the sole cost and expense of
the Vendor.
9.3 Notification. The Vendor will notify the Owner at least ten (10) days
------------
prior to the performance of any Acceptance Tests. Prior to or at the first
practicable date after such notification, the Vendor and the Owner will each
agree upon and approve any test forms to be used as part of the particular
Acceptance Test being conducted.
9.4 Presence at Acceptance Tests. The Owner and its representatives will
----------------------------
be permitted to witness and have unrestricted access to the Vendor's and its
Subcontractors' Acceptance Tests, provided that no such access will materially
-------- ----
interfere with or cause undue delay of the Vendor's Work. Nothing herein will
be deemed to require the Vendor to reimburse the Owner for any costs incurred by
the Owner in the Owner's participation in or
<PAGE>
57
observation of Acceptance Tests or other tests performed by the Vendor pursuant
to and in accordance with the terms of this Section 9.
9.5 Correction of Defects. (a) If any Acceptance Test is not satisfied,
---------------------
the Vendor will, at its sole cost and expense, (i) in writing, notify the Owner
of such failure, and (ii) promptly correct whatever Defects or Deficiencies
caused such Acceptance Test not to be satisfied. After such correction, the
Vendor must (i) repeat at its sole cost and expense the failed Acceptance Tests
and as many other Acceptance Tests as are necessary to ensure in the reasonable
opinion of the Owner that such correction made by the Vendor would not have
affected the outcome of such other Acceptance Tests, and (ii) in writing, notify
the Owner as to what correction was made and what Acceptance Tests were
repeated.
(b) If Final Acceptance of a PCS System cannot be achieved after
Substantial Completion of such PCS System (provided that the Vendor will have
fully built-out the Final RF Engineering Plan in accordance with the Final Site
Count in accordance with the terms of this Contract) because such PCS System
fails to meet applicable performance criteria as set forth in Exhibit F, but
would do so with only the implementation and installation of additional Base
Stations at additional System Element Locations over and above the Final Site
Count for such PCS System, the Owner will have the right, in its sole and
absolute discretion, to (i) Finally Accept such PCS System in which case the
Parties will mutually agree in good faith on revised performance criteria for
such PCS System, or (ii) require the Vendor to continue to work (in which case
Final Acceptance of such PCS System will be delayed until completion of the work
and testing contemplated herein and in Exhibit B3) to cause such PCS System to
perform at the applicable levels of the then existing performance criteria as
set forth in Exhibit F, in which case, the required additional Base Stations and
additional System Element Locations will be treated as provided for in
subsections 17.5(c) and 17.10. Any additional Base Station(s) paid for by the
Owner pursuant to this subsection 9.5(b) (which would only have to be paid for
(including any costs associated with the installation thereof) by the Owner upon
the subsequent achievement of Final Acceptance by the Vendor in accordance with
Exhibit B3 which such payment will be made with the payments otherwise made on
Final Acceptance pursuant to Section 6) will be offset against the number of
new Base Stations that may subsequently be for the account of the Owner pursuant
to the terms of subsection 17.5(c). If the Parties are unable to agree upon
revised performance criteria as provided in clause (i) above, the matter will be
resolved in accordance with the provisions of subsection 23.3.
9.6 Acceptance Certificate. Upon the successful completion of the
----------------------
Acceptance Tests for a PCS System or any part thereof conducted by the Vendor,
the Vendor must submit to the Owner an Acceptance Certificate certifying that
(i) such Acceptance Tests have been successfully completed, (ii) the Work so
tested has been completed in accordance with the terms of this Contract, and
(iii) if applicable, that the remainder of the Work is continuing in accordance
with the Project Milestones set forth on Exhibit A. Upon its reasonable
satisfaction that such Acceptance Certificate is correct and complete, the Owner
will acknowledge such certification by signing the Acceptance Certificate. In
the event of any dispute as to the results of any Acceptance Tests, such dispute
will be resolved pursuant to
<PAGE>
58
the dispute resolution mechanisms set forth in Section 23 including, but not
limited to, the Third Party Engineer review mechanism set forth in subsection
23.3.
SECTION 10 DISCONTINUED PRODUCTS
10.1 Notice of Discontinuation. During the Term of this Contract the
-------------------------
Vendor agrees to provide the Owner, or the respective Affiliates as the case may
be, except under extraordinary circumstances not less than one (1) year notice
before the Vendor discontinues accepting orders for a PCS Product ("Discontinued
Products") sold under this Contract. Where the Vendor offers a product for sale
that is equivalent in form, fit and function in accordance with and pursuant to
the Specifications, the notification period may vary but in no event will be
less than the applicable notice period set forth in subsection 2.17.
Notwithstanding the foregoing, the Vendor will not discontinue accepting orders
for any PCS Product applicable to or otherwise used in the System or any portion
thereof until and unless the Vendor and the Owner have agreed upon a mutually
acceptable transition plan that takes into account the Owner's and its
Affiliates' existing investment in the Item scheduled for discontinuance subject
to the minimum terms and conditions set forth in subsections 10.2 and 10.3
below. The Parties' failure to reach agreement within sixty (60) days or such
other reasonable time as they may mutually establish will, upon the request of
either Party, be referred for resolution pursuant to Section 23. In the event
of the foregoing, the Vendor must continue to furnish PCS Products fully
compatible with the System Elements within the System at such time during the
Term of the Contract; provided that nothing herein will bar the Vendor from
-------- ----
discontinuing individual Items of PCS Products as provided in and pursuant to
this subsection 10.1.
10.2 Discontinuation During Warranty Period. If, during the Warranty
--------------------------------------
Period applicable to the relevant Discontinued Product pursuant to Section 17,
the Vendor does not make such Discontinued Products available to the Owner, the
price of any Products provided as a replacement for the Discontinued Product by
the Vendor and required to be purchased by the Owner during such Warranty Period
to replace existing Discontinued Products delivered to the Owner in order to
maintain performance and functionality equivalent to that previously provided by
the Discontinued Products will be discounted by an amount equal to fifty percent
(50%) of the price previously paid for such Discontinued Products.
10.3 Discontinuation After Warranty Period. In the event that the Vendor
-------------------------------------
discontinues the manufacture of a Product following the expiration of the
applicable Warranty Period and the Owner is required to replace an existing
Discontinued Product with a new Product in order to maintain performance and
functionality, the Owner will receive a credit in an amount equal to the
percentage set forth below multiplied by the purchase price paid for such
original Product, which credit will be applied against the Vendor's then-current
list price for a replacement for such Discontinued Product; provided that the
-------- ----
credit will not exceed the Vendor's then-current best list price (as determined
by the Customer Price Guide) for such replacement Product subject to the
discounts available to the Owner pursuant to Section 26 and the other terms of
this Contract:
<PAGE>
59
(i) up to and including one year following expiration
of the applicable Warranty Period: 40%;
(ii) more than one year and up to and including two years
following expiration of the applicable Warranty Period:
30%; and
(iii) more than two years and up to and including three years
following expiration of the applicable Warranty Period:
20%.
SECTION 11 SOFTWARE; CONFIDENTIAL INFORMATION
11.1 RTU License. The Owner is hereby granted a perpetual, non-exclusive,
-----------
non-transferable (except as set forth in subsections 11.4 and 27.4), fully paid-
up, multi-site (capability to move Software from site to site) right to use
license for the Software ("RTU License"), to operate the Products provided in
each of the PCS Systems and the System as a whole, subject to payment of any
license fees in accordance with the terms of this Contract. Except as otherwise
provided herein, the Owner is granted no title or ownership rights to the
Software. Such rights will remain with the Vendor, its Subcontractors or
suppliers, as appropriate.
11.2 Owner's Obligations. The Owner agrees that the Software, whether or
-------------------
not modified, will be treated as proprietary to the Vendor, its Subcontractors
or its suppliers, as appropriate and the Owner will:
(a) Utilize the Software solely in conjunction with the System and/or any
PCS System; provided that the Vendor acknowledges that the Software will be
-------- ----
integrated across interfaces with systems, equipment and software provided by
other suppliers and customers including, but not limited to, the Other Vendors;
(b) Ensure that all copies of the Software will, upon any reproduction by
the Owner authorized by the Vendor and whether or not in the same form or format
as such Software, contain the same proprietary, confidentiality and copyright
notices or legends which appear on the Software provided pursuant hereto; and
(c) Hold secret and not disclose the Software (or, subject to subsection
27.19, interfaces to or with such Software) to any person, except to (i) such of
its employees, contractors, agents or Affiliates that are involved in the
operation or management of the System and/or any PCS System and need to have
access thereto to fulfill their duties in such capacity, or (ii) other Persons
who need to use such Software to permit integration of the System and/or any PCS
System with systems and software of other suppliers and customers including, but
not limited to, the Other Vendors; provided that such persons agree, or are
-------- ----
otherwise obligated, to hold secret and not disclose the Software to the same
extent as if they were subject to this Contract.
<PAGE>
60
(d) When and if the Owner determines that it no longer needs the Software
or if the Owner's license is canceled or terminated pursuant to the terms of
this Contract, return all copies of such Software to the Vendor or follow
reasonable written disposition instructions provided by the Vendor. If the
Vendor authorizes disposition by erasure or destruction, the Owner will remove
from the medium on which Software resides all electronic evidence of the
Software, both original and derived, in such manner that prevents subsequent
recovery of such original or derived Software.
11.3 Backwards Compatibility. (a) In addition to the warranties
-----------------------
contained in Section 17 of this Contract, the Vendor represents and warrants
that each Software Revision Level during the Term of this Contract will be
Backwards Compatible with all existing in-service Equipment provided by the
Vendor and the immediately preceding Software Revision Level of such Software
made available to Customers by the Vendor.
(b) In the event that Software supplied by the Vendor at any System
Element Site at any time does not provide Backwards Compatibility as required by
this subsection 11.3, then the Vendor will provide, without charge to the Owner,
the most current Software Updates of the Software to each such System Element
Location, and otherwise take such steps as may be necessary to achieve Backwards
Compatibility.
11.4 Transfer and Relocation. (a) Except as provided in subsection 27.4,
-----------------------
where the Owner or any successor to the Owner's title in the Products (i) elects
to transfer a Product to a third party, and where such Product will remain in
place and operational for the purpose of continuing to provide PCS in the
franchise area in which such Product is installed, or (ii) elects to transfer
Products to an Affiliate for reuse within the United States, the Owner may
transfer its RTU License for the Software furnished under this Contract for use
with such Product, without the payment of any additional Software right-to-use
fees by the transferee, but only under the following conditions:
(A) The right to use such Software may be transferred only together
with the Products with which the Owner has a right to use such
Software, and such right to use the Software will continue to be
limited to use with such Products;
(B) Before any such Software are transferred, the Owner will notify
the Vendor of such transfer and the transferee will have agreed
in writing (a copy of which will be provided to the Vendor) to
keep the Software in confidence and to corresponding conditions
respecting possession and use of Software as those imposed on the
Owner in this Contract; and
(C) The transferee will have the same right to Software warranty and
Software maintenance for such Software as the transferor,
provided the transferee continues to pay the fees, including
recurring fees, such as Annual Release Maintenance Fees, if any,
associated with such Software warranty or maintenance.
<PAGE>
61
(b) Except as provided in subsection 11.4(a) or subsection 27.4, and except
as may otherwise in this Contract be provided expressly, the Owner or any
successor to the Owner's title in the Products will have no right to transfer
Software furnished by the Vendor under this Contract without the consent of the
Vendor. If the Owner or such successor elects to transfer a Product purchased
under this Contract for which it does not under this Contract have the right to
transfer related Software, the Vendor agrees that upon written request of the
transferee of such Product, or of the Owner or such successor, the Vendor will
not without reasonable cause fail to grant to the transferee a license to use
such Software with the Products, whether to be located within the United States
or elsewhere, upon payment of a relicensing fee to the Vendor in an amount equal
to fifty percent (50%) of the license fee for the Software originally paid by
the Owner to the Vendor at the time of the original purchase of the Software
from the Vendor; provided that such relicensing fee will in no event exceed
-------- ----
fifteen percent (15%) of the price paid by the transferee to the Owner for the
Product with respect to which such Software is used.
11.5 Survival. The obligations of the Owner under the Software Licenses
--------
will survive the termination of this Contract, regardless of the cause of
termination.
11.6 Access to Source Codes. The Vendor grants the Owner a right to
----------------------
access the Source Code and to modify the Software (the "RTM License") for the
maintenance, enhancement and support of those Products purchased from the Vendor
and owned or operated by the Owner under the following circumstances which will
be set forth in the Escrow Agreement:
(a) If the Vendor becomes insolvent, makes a general assignment for the
benefit of creditors, files a voluntary petition in bankruptcy or an involuntary
petition in bankruptcy is filed against the Vendor which is not dismissed within
sixty (60) days, or suffers or permits the appointment of a receiver for its
business, or its assets become subject to any proceeding under a bankruptcy or
insolvency law, domestic or foreign, or has liquidated its business, or the
Vendor, or a business unit of the Vendor that is responsible for maintenance of
the Software, ceases doing business without providing for a successor, and the
Owner has reasonable cause to believe that any such event will cause the Vendor
to be unable to meet its warranty service or support requirements hereunder; or
(b) If it is determined, pursuant to the dispute resolution mechanisms set
forth in subsection 23.1, that the Vendor, its assignee or designee has failed,
or is unable, to provide the warranty service or support of the System and/or
any PCS System contemplated by this Contract.
11.7 Escrow Agreement. The Vendor agrees, at the Owner's request, to
----------------
become party to a Source Code escrow agreement (the "Escrow Agreement") which
will allow the Owner to obtain access to the applicable Source Codes in the
circumstances set forth in subsection 11.6 and such Escrow Agreement. The Owner
will pay all costs, including the Vendor's reasonable costs incurred in
gathering, organizing and delivering such Source Code, associated with such
Escrow Agreement. The Vendor represents, warrants and agrees that (i) the
Source Codes delivered into escrow in accordance with the Escrow Agreement will
<PAGE>
62
comprise the full Source Code language statement of the Software as used, or
required to be used, by the Vendor to maintain or modify the System and/or any
PCS System without the help of any other Person or reference to any other
material, (ii) such Source Codes will include all versions thereof from the date
of initial creation, and (iii) such Source Codes must be kept up to date,
including all updates needed to maintain compliance with the Specifications and
the System Standards. In addition, all parts of the Source Codes from the date
of creation thereof, and all updates thereto (including, without limitation,
those that are necessary to maintain compliance with the Specifications) must be
delivered into escrow in accordance with the Escrow Agreement.
11.8 Software Maintenance. The Vendor represents and warrants that the
--------------------
Software delivered to the escrow agent pursuant to subsection 11.7 for
redelivery to the Owner pursuant to the Escrow Agreement will be in a form
suitable for reproduction by the Owner and will include the full Source Code
language statement of the Software as used by the Vendor sufficient to allow
maintenance and modification.
11.9 Custom Development. 11.9.1 Request for Custom Material. (a) From
------------------ ---------------------------
time to time, the Owner may have requirements for custom Software (including,
but not limited to, development of identified features or modifications to
Software or Software Enhancements) or custom development of Equipment
(including, but not limited to, development of identified features or
modifications to Equipment or Equipment Enhancements) to be provided by the
Vendor under this Contract (the "Custom Material"). If the Owner has a
requirement for Custom Material that is a specific enhancement or modification
of a previously licensed feature or of previously purchased Products, the Owner
will identify to the Vendor in writing a summary of any such proposed
development of Custom Material. Such summary will provide a description of any
proposed Custom Material sufficient to enable the Vendor to determine the
general demand for, and its plans, if any, to develop the same or similar
Products. The Vendor will respond to such summary within thirty (30) days after
receipt thereof and indicate if it has the ability to fulfill a subsequent
Request for Proposal ("RFP") from the Owner for such development of Custom
Material. The Owner acknowledges that the Vendor will have no obligation to
develop any proprietary materials for Owner.
(b) If the Vendor decides that it does not have the technical ability or
the capacity to fulfill a subsequent RFP for such Custom Material development,
the Vendor's response pursuant to subsection 11.9.1(a) will (i) provide the
Owner an explanation of why it cannot fulfill such RFP and (ii) use reasonable
diligence to work with the Owner to identify an alternative source for such
development reasonably acceptable to the Owner. In determining whether the
Vendor has the technical ability or the capacity to fulfill the RFP, the Vendor
may consider factors including, but not limited to, (1) the Vendor's likelihood
of recovering its costs for performing such development, (2) the impact of such
development on the Vendor's actual outstanding commitments to perform work for
other Customers and to pursue strategic development activities; and (3) whether
the Vendor can perform the work utilizing existing software development staff
without stopping work underway.
<PAGE>
63
(c) If the Vendor fails to agree to a request for Custom Material
development pursuant to the terms of this subsection 11.9 then the matter may,
at the Owner's option, be referred to dispute resolution pursuant to Section
23.
11.9.2 Vendor Response. After reviewing an RFP issued for such
---------------
Custom Material, the Vendor will respond to the Owner within thirty (30) days,
unless otherwise agreed by the Parties, stating the terms and conditions upon
which the Vendor would be willing to undertake such development, including, but
not limited to, a listing of specifications, custom development charges, planned
license fees and a proposed delivery schedule.
11.9.3 Ownership of Intellectual Property. The Vendor will own all
----------------------------------
forms of intellectual property rights (including, but not limited to, patent,
trade secret, copyright and mask rights) pertaining to Products, and will have
the right to file for or otherwise secure and protect such rights. The
foregoing notwithstanding, the Parties understand and agree that from time to
time the Owner may devise, develop or otherwise create ideas or other concepts
for services or new products which are patentable or otherwise capable of
receiving protection from duplication. In such event, the Owner will have the
right to patent or otherwise protect such ideas or concepts for its own use and
benefit.
SECTION 12 SOFTWARE CHANGES
12.1 Annual Release Maintenance Fees. So long as the Owner pays the
-------------------------------
applicable Annual Release Maintenance Fees in accordance with the terms of this
Contract during the Term (including at any time after the Term so long as the
Owner at such time continues to pay the Annual Release Maintenance Fees), the
Vendor will provide to the Owner, at such times as they become generally
available to the Vendor's Customers, all Software Upgrades, all Software
Enhancements and all Combined Releases (but not Optional Software Features,
unless otherwise mutually agreed between the Parties) applicable to Software for
PCS Products for which the Owner has obtained a RTU License pursuant to the
terms of this Contract.
12.2 Notice. The Vendor must give the Owner not less than ninety (90)
------
days, prior written notice of the introduction of any Software Enhancement
release or any Software Combined Release or any Optional Software release. In
addition, in each February and August of each year during the Term of this
Contract, the Vendor must provide the Owner with a forecast of future Software
Enhancement releases or Software Combined Releases or any Optional Software
release, as the case may be, then currently being developed by or on behalf of
the Vendor.
12.3 Installation, Testing and Maintenance. The installation and testing
-------------------------------------
of the Software by the Vendor and the acceptance thereof by the Owner will be
performed in accordance with the criteria set forth in Exhibit B3.
<PAGE>
64
12.4 Software Fixes. In the event that any Software Upgrade, Software
--------------
Enhancement or Software Combined Release supplied by the Vendor during the Term
of this Contract has the effect of preventing the System and/or any PCS System
or any part thereof from satisfying, or performing in accordance with the
Specifications, the System Standards and/or Exhibit F or otherwise adversely
affects the functionality or features of the System, any PCS System or any part
thereof, then the Vendor will promptly retrofit or take such other corrective
action as may be necessary to assure that the System, any such PCS System or any
such affected part, as modified to include each such Software Upgrade, Software
Enhancement or Software Combined Release, will satisfy, and perform in
accordance with, the Specifications, the System Standards and/or Exhibit F and
restore all pre-existing functionality and features as well as provide any new
features and functionality provided by any of the foregoing modifications, in
each case without any charge to the Owner (other than payment of the applicable
Annual Release Maintenance Fees pursuant to the terms of this Contract).
SECTION 13 EQUIPMENT CHANGES
13.1 Equipment Upgrades. (a) Equipment Upgrades will be provided to the
------------------
Owner by the Vendor at no charge to the Owner as provided in subsection 13.1(b)
below. Equipment Enhancements must be provided to the Owner by the Vendor, if
requested by the Owner, and the Owner is obligated to make payment therefor in
an amount that is no higher than that payable by any Customer other than the
Owner, which amount of payment will be adjusted as set forth in subsections 6.2,
7.2 and 27.16 and Section 26. If the Vendor at any time issues an Equipment
Upgrade which is combined with any Equipment Enhancement (collectively, the
"Equipment Combined Release") to such Equipment, the Equipment Combined Release
will be provided at no charge to the Owner unless and until the Owner elects to
use any of the feature enhancement or enhancements included within the Equipment
Combined Release and has accepted such Equipment Combined Release.
(b) (i) After a PCS Product has been shipped to the Owner, if the Vendor
issues an Equipment Upgrade ("Class A change") or Equipment Enhancement ("Class
B change"), or where a modification to correct an error in field documentation
is to be introduced, the Vendor will promptly notify the Owner of such change
through the Vendor's design change management system or another Vendor
notification procedure. Each change notification, whether or not it bears a
restrictive legend, will be subject to subsection 27.19, except that such
information may be reproduced by the Owner for the Owner's use as required
within the System. If the Vendor has engineered, furnished, and installed a
Product which is subject to an Equipment Upgrade, the Vendor will implement such
change, at its sole cost and expense, if it is announced within fifteen (15)
years from the date of shipment of that Product, by, at its option (subject to
the reasonable review and acceptance of the Owner at such times as the Owner
reasonably determines that it needs to review such Vendor decision), either (A)
modifying the Product at the Owner's site; (B) modifying the Product which the
Owner has returned to the Vendor in accordance with the Vendor's reasonable
instructions pursuant to and in accordance with the terms of this Contract; or
(C) replacing the Product requiring the change with a replacement Product for
which such change has already been implemented. If
<PAGE>
65
the Vendor has not engineered the original Product application and accordingly
office records are not available to the Vendor, the Vendor will provide the
generic change information and associated parts for the Owner's use in
implementing such change.
(ii) In any of the instances described in clause (i) above, if the
Vendor and the Owner agree that a Product or part thereof subject
to such change is readily returnable, the Owner, at its expense,
will remove and return such Product or part to the Vendor's
designated facility within the United States and the Vendor, at
its sole expense, will implement such change (or replace it with
a Product or part for which such change has already been
implemented) at its facility and return such changed (or
replacement) Product or part at its sole cost and expense to the
Owner's designated location within the United States. Any such
reinstallation will be performed by the Owner at its sole
expense. At any such time that the Owner's spares or plug-in
stocks are not available to implement a rotational program for an
Equipment Upgrade, the Vendor will provide a seed stock, where
feasible and necessary.
(iii)If the Owner does not make or permit the Vendor to make an
Equipment Upgrade as stated above within one (1) year from the
date of change notification or such other period as the Vendor
may agree, subsequent changes, repairs or replacements affected
by the failure to make such change may, at the Vendor's option,
be invoiced to the Owner whether or not such subsequent change,
repair or replacement is covered under the warranty provided in
this Contract for such Product. If requested by the Owner,
Equipment Upgrades announced more than fifteen (15) years from
the date of shipment will be implemented at the Owner's expense.
(iv) If the Vendor issues an Equipment Enhancement after a PCS Product
has been shipped to the Owner, the Vendor will promptly notify
the Owner of such change if it is being offered to any of the
Vendor's Customers. Except as otherwise set forth above in
subsection 13.1(a), when an Equipment Enhancement is requested by
the Owner, the pricing set for such Equipment Enhancements will
be at the Vendor's standard charges subject to the applicable
discounts set forth in this Contract and Section 26.
(v) All change notifications for Equipment Upgrades and Equipment
Enhancements provided by the Vendor to the Owner pursuant to the
terms of this Contract must contain the following information:
(i) a detailed description of the change; (ii) the reason for the
change; (iii) the effective date of the change; and (iv) the
implementation schedule for such change, if appropriate.
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66
13.2 Notice. The Vendor will give the Owner not less than ninety (90)
------
days, prior written notice of the introduction of any Equipment Enhancement or
any Equipment Combined Release. In addition, in each February and August of
each year during the Term of this Contract, the Vendor will provide the Owner
with a forecast of future Equipment Enhancements to the Equipment or Equipment
Combined Releases then currently being developed by or on behalf of the Vendor.
13.3 Installation, Testing and Acceptance. The Installation and testing
------------------------------------
of the Equipment by the Vendor and the acceptance thereof by the Owner must be
performed in accordance with Exhibit B3 pursuant to the Project Milestones in
Exhibit A.
13.4 Equipment Fixes. In the event that any Equipment Upgrade or
---------------
Equipment Enhancement supplied by the Vendor during the Term of this Contract
has the effect of preventing the System and/or any PCS System or any part
thereof from satisfying, or performing in accordance with, the Specifications,
the System Standards and/or Exhibit F or otherwise adversely affects the
functionality, interoperability or features of the System, any such PCS System
or any part thereof then the Vendor will without any charge to the Owner
promptly retrofit or take such other corrective action as may be necessary to
assure that the System, any such PCS System or any such affected part, as
modified to include each such Equipment Upgrade and Equipment Enhancement, will
satisfy, and perform in accordance with, the Specifications, the System
Standards and/or Exhibit F and restore all pre-existing functionality and
features as well as provide any features and functionality provided by any of
the foregoing modifications.
SECTION 14 INTELLECTUAL PROPERTY
14.1 Intellectual Property. The Vendor grants the Owner rights to state
---------------------
that it is using the Vendor's Products or Services in the Owner's marketing,
advertising or promotion of the System, any PCS System or any part thereof. The
Owner has the right to use for such marketing, advertising or promotion the
Vendor's advertising and marketing materials (including pamphlets and brochures)
provided to the Owner by the Vendor describing the System, any PCS System or any
part thereof, or any Product. Other than as set forth in this subsection 14.1,
the Owner has the right to use the trademarks and service marks of the Vendor or
its assignee in the Owner's marketing, advertising and promotion of the System,
any PCS System or any part thereof only with the written consent of the Vendor
not to be unreasonably withheld subject to and in accordance with the terms of
subsection 27.13.
14.2 Infringement. (a) The Vendor agrees that it will defend, at its own
------------
expense, all suits and claims against the Owner for infringement or violation
(whether by use, sale or otherwise) in the United States of any patent,
trademark, copyright, trade secret or other intellectual property rights of any
third party (collectively, "Intellectual Property Rights"), covering, or alleged
to cover, the Equipment, Software, the System and/or any PCS System or any
component thereof for its intended use, in the form furnished or as subsequently
modified by the Vendor or as otherwise modified by the Owner pursuant to the
direction or approval of
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67
the Vendor. The Vendor agrees that it will pay all sums, including, without
limitation, attorneys' fees and other costs, which, by final judgment or decree,
or in settlement of any suit or claim to which the Vendor agrees, may be
assessed against the Owner on account of such infringement or violation,
provided that:
- - - -------- ----
(i) the Vendor will be given prompt written notice of all claims of
any such infringement or violation and of any suits or claims
brought or threatened against the Owner or the Vendor of which
the Owner has actual knowledge;
(ii) the Vendor will be given full authority to assume control of the
defense (including appeals) thereof through its own counsel at
its sole expense and will have the sole right to settle any suits
or claims without the consent of the Owner; provided that the
-------- ----
Vendor will have no right to agree to injunctive relief against
the Owner; provided further that the Vendor will notify the
-------- -------
Owner of any proposed settlement condition prior to the
Vendor's acceptance of such settlement; and
(iii)the Owner will cooperate fully with the Vendor in the defense of
such suit or claims and provide the Vendor, at the Vendor's
expense, such assistance as the Vendor may reasonably require in
connection therewith.
(b) The Vendor's obligation under this subsection 14.2 will not extend to
alleged infringements or violations that arise because the Products provided by
the Vendor are used in combination with other products furnished by third
parties and where any such combination was not installed, recommended, approved,
explicitly or by implication, by the Vendor.
14.3 Vendor's Obligation to Cure. If in any such suit so defended, all or
---------------------------
any part of the Equipment, Software, the System, any PCS System or any component
thereof is held to constitute an infringement or violation of Intellectual
Property Rights and its use is enjoined, or if in respect of any claim of
infringement or violation the Vendor deems it advisable to do so, the Vendor
will at its sole cost, expense and option take one or more of the following
actions: (i) procure the right to continue the use of the same without
interruption for the Owner; (ii) subject to the terms of subsection 2.17 replace
the same with noninfringing Equipment or Software that meets the Specifications;
or (iii) modify said Equipment, Software, the System, any PCS System or any
component thereof so as to be noninfringing, provided that the Equipment,
-------- ----
Software, the System, any PCS System or any component thereof as modified meets
all of the Specifications. In the event that the Vendor is not able to cure the
infringement pursuant to clause (i), (ii) or (iii) in the immediately preceding
sentence, the Vendor will refund to the Owner the full purchase price paid by
the Owner for such infringing Product or feature, and the Owner will be under no
obligation to return to the Vendor such infringing Product or feature regardless
of whether, or by what means, the Owner, on its own or otherwise, subsequently
cures such infringement.
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68
14.4 Vendor's Obligations. The Vendor's obligations under this Section
--------------------
14 will not apply to any infringement or violation of Intellectual Property
Rights caused by modification of the Equipment, Software, the System, any PCS
System or any component thereof by the Owner, or any infringement caused solely
by the Owner's use and maintenance of the Products other than in accordance with
the Specifications and the purposes contemplated by this Contract, except as
expressly authorized or permitted by the Vendor. The Owner will indemnify the
Vendor against all liabilities and costs, including reasonable attorneys' fees,
for defense and settlement of any and all claims against the Vendor for
infringements or violations based upon this subsection 14.4.
14.5 License to Use Vendor Patents. (a) The Vendor grants to the Owner
-----------------------------
and its Affiliates, under patents which the Vendor (or in the event of an AT&T
Assignment pursuant to and in accordance with subsection 27.22 the Vendor's
Successor) owns or has a right to license ("Vendor Patents"), a worldwide,
royalty-free, nonexclusive license (the "Patent License") to use any Product
furnished by the Vendor under this Contract (including any combination of
products and services, whether or not furnished at the same time or as part of a
larger combination) for provision of telecommunications services; provided,
--------
however, that no rights are conveyed to the Owner and its Affiliates with
- - - -------
respect to any invention which is directed to (i) a combination of a Product or
Products furnished with any other Item which the Vendor does not furnish to the
Owner under this Contract wholly or in part for such use, or (ii) a method or
process which is other than an inherent use of the Products furnished. As used
in this subsection 14.5, the term "inherent use" means a use that can be
completely performed by a Product furnished by the Vendor (or a combination of
Products furnished by the Vendor), without the need for any additional product,
service, development modification or programming by the Owner and its Affiliates
or by a third party. The Owner understands that in the event of an AT&T
Assignment pursuant to and in accordance with subsection 27.22 the Owner's
rights to any Patent Licenses granted pursuant to this subsection 14.5 will be
from the Vendor's Successor under only the patents the Vendor's Successor owns
or has a right to license and not those patents as to which there is no such
right to license.
(b) The Owner and any successor to the Owner's title in the Products has
the right (subject to written approval of the Vendor, which approval will not be
unreasonably withheld), to assign the Patent Licenses to any other Person who
acquires legal title to the Products including, but not limited to, any Person
or Persons who taking part in the financing or any part of the Nationwide
Network, provided that no such assignment to Persons taking part in the
-------- ----
financing of any part of the Nationwide Network will be permitted except in
accordance with the provisions of subsection 27.4 of this Contract. Nothing
contained in this subsection 14.5 is intended to, and shall not, limit any
rights or privileges that the Owner has under this Contract or otherwise under
Applicable Law.
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69
SECTION 15 DELAY
15.1 Liquidated Damages. The Parties agree that damages for delay are
------------------
difficult to calculate accurately and, therefore, agree that liquidated damages
(the "Liquidated Damages") will be paid for non-performance or late performance
of the Vendor's obligations under this Contract pursuant to the terms hereof.
15.2 Interim Delay. (a) Failure of the Vendor to complete the Work
-------------
necessary to achieve each of the Project Milestones applicable to any PCS System
(other than Milestone 3 (as set forth on Exhibit A1)) on or before the date
applicable to such Milestone for such PCS System that is required to be achieved
by the Vendor prior to the Guaranteed Substantial Completion Date for such PCS
System (each an "Interim Milestone") will result in the Vendor being liable to
pay to the Owner an amount equal to [ ]; provided that no such Interim Delay
-------- ----
Penalty will be due if the delay is directly and expressly attributable solely
to (i) an event constituting a Force Majeure pursuant to the terms of this
Contract or (ii) an act or omission of the Owner. Interim Delay Penalties
accrued pursuant to this subsection 15.2(a) will be offset against the payment
to be made by the Owner to the Vendor upon Substantial Completion of the PCS
System to which such interim delay relates. The Interim Delay Penalty applicable
to Milestone 4 (as set forth on Exhibit A1) will be [ ]. This subsection 15.2
will not be applicable to Milestone 3 (as set forth on Exhibit A1) for either
the System or any PCS System.
(b) To the extent that the Vendor is responsible for Interim Delay
Penalties pursuant to subsection 15.2(a) such penalties will be credited back to
the Vendor by the Owner to the extent that (i) the Vendor successfully achieves
the Interim Milestone subject to delay within thirty (30) days of the date
scheduled therefore pursuant to the terms hereof and Exhibit A and (ii) such
interim delay does not otherwise materially adversely affect the Owner, such PCS
System and/or the System as a whole. Any such reimbursement will be credited
back to the Vendor such that the Interim Delay Penalty otherwise offset against
the relevant Substantial Completion payment in accordance with subsection
15.2(a) above will be added back to such Substantial Completion payment to be
made to the Vendor by the Owner.
15.3 Completion Delay. (a) [ ]
----------------
<PAGE>
70
[ ]
(b) If any PCS System does not achieve Substantial Completion by the
Guaranteed Substantial Completion Date but the Owner nonetheless chooses (in its
sole discretion) to commence In Revenue Service in such incomplete PCS System
(such action in no way constituting the Owner's acceptance, express or implied,
of the System or such PCS System or any part thereof), then the Vendor will be
required to pay, on a daily basis, only that percentage of the daily Late
Completion Payment equal to that percentage of the geographic area to be
otherwise covered by such PCS System not otherwise placed In Revenue Service by
the Owner.
(c) In the event of a change in the Product Contract Price pursuant to
subsections 6.2, 7.2 or 27.16 or Section 26 during the Term of this Contract
from the amount originally set forth in this Contract pursuant to Section 6 the
per diem amount of Late Completion Payments set forth above will be increased or
decreased, as appropriate, by an amount equal to the increase or decrease in the
Owner's per diem interest payment obligation resulting from any change in the
amount of debt incurred or to be incurred by the Owner related to such change in
the Product Contract Price.
(d) Late Completion Payments, including any portions of such payments
payable in accordance with paragraphs (a) and (b) above, will be accrued during
the Completion Cure Period and offset against payments otherwise due to the
Vendor upon the achievement of Substantial Completion pursuant to the terms of
subsection 6.3. If the Vendor fails to achieve Substantial Completion within
sixty (60) days of the Guaranteed Substantial Completion Date for any reason
other than primarily because of (i) a Force Majeure event pursuant to Section
16 or (ii) the direct and explicit act or omission of the Owner, then the Owner
will have the option to terminate this Contract with respect to the PCS System
affected by any such delay without any penalty or payment obligation (other than
payment obligations under this Contract outstanding as of the date of any such
termination; provided that any such amounts payable by the Owner will not
-------- ----
include any amounts that would have been payable to the Vendor only upon
Substantial Completion or Final Acceptance); provided further that in the event
-------- -------
the Vendor fails to achieve Substantial Completion within such sixty (60) day
period in any two (2) PCS Systems within the Initial System over any period of
time (regardless of whether such events are concurrent or whether the first such
event was subsequently cured) the Owner will have the right, but not the
obligation, to terminate this Contract in its entirety.
SECTION 16 FORCE MAJEURE
16.1 (a) Either Party may make a claim for excusable failure or delay
with respect to any obligation of such Party under this Contract, except any
obligation to make payments when due. Excusable failure or delay will be
allowed only in the event of an event of Force Majeure that is beyond the
reasonable control of the affected Person. Notwithstanding the foregoing, the
Vendor will not be entitled to relief under this Section 16 to the extent that
any event otherwise constituting an event of Force Majeure results from the
negligence or fault of
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71
the Vendor or any Subcontractor, and the Owner will not be entitled to relief
under this Section 16 to the extent any event otherwise constituting an event
of Force Majeure results from the negligence or fault of the Owner.
(b) The Party claiming the benefit of excusable delay hereunder must (i)
promptly notify the other Party of the circumstances creating the failure or
delay and provide a statement of the impact of such Party failure or delay and
(ii) use reasonable efforts to avoid or remove such causes of nonperformance,
excusable failure or delay. If an event of Force Majeure prevents the Vendor
from performing its obligations under this Contract for a period exceeding sixty
(60) days, the Owner may, upon prior written notice to the Vendor, terminate
this Contract.
(c) The Party not claiming the benefit of excusable delay hereunder will
likewise be excused from performance of its obligations hereunder on a day-for-
day basis to the extent such Party's obligations are affected due to the other
Party's delayed performance.
(d) In the event of a Force Majeure which the Party claiming relief for
such event has used all best efforts to resolve in accordance with the terms of
this Contract, upon the written request of either Party, the other Party will in
good faith negotiate modifications, to the extent reasonable and necessary, in
scheduling and performance criteria in order to reasonably address the impact of
such Force Majeure.
SECTION 17 WARRANTIES
17.1 Product Warranty. (a) The Vendor warrants that, for a period of two
----------------
(2) years from the date of Final Acceptance of any PCS System (the "Product
Warranty Period"), all Products and all of the Installation and the
Configuration Engineering thereof within such PCS System will materially conform
with and perform the functions set forth in the Specifications and the relevant
performance criteria set forth in Exhibit D, to the extent applicable, and will
be free from Defects and Deficiencies in material or workmanship which impair
service to subscribers, System performance, billing, administration and/or
maintenance. In the case of Software, the Product Warranty Period applicable to
any such Software will be automatically extended upon, and simultaneous with,
any Software Upgrade issued pursuant to the terms of Section 12. The Vendor
will assign to the Owner all outstanding Subcontractor warranties attributable
to Non-Essential Equipment at such time that the Vendor's warranty on such Non-
Essential Equipment pursuant to this subsection 17.1 expires pursuant to and in
accordance with the Product Warranty Period applicable to such Item of Non-
Essential Equipment. The Warranty Period for a PCS Product or part thereof
repaired or provided as a replacement under this Product warranty is six (6)
months or the unexpired term of the new Product Warranty Period applicable to
the repaired or replaced PCS Product or part, whichever is longer.
(b) To the extent the Owner orders additional Products from the Vendor in
accordance with the terms of this Contract including, but not limited to,
subsections 2.2 and/or 7.2, any such Products so ordered by the Owner and
delivered and installed by the Vendor or its Subcontractors will be warranted to
the same extent as set forth in clause (a) above for a
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72
period of not less than twenty four (24) months from the earlier of (i) the date
the Owner puts such additional Products into In Revenue Service, (ii) the date
of the Owner's acceptance and (iii) thirty (30) days after the Vendor completes
the installation of such additional Products. If in the event, pursuant to the
Owner's order for such additional Products the Vendor is not required to install
such additional Products, the warranty on such additional products will run
twenty-four (24) months from the date the Vendor shipped such products to the
Owner.
17.2 Services Warranty. (a) The Vendor warrants that, for a period of not
-----------------
less than three (3) years from the date of completion of RF Engineering done by
the Vendor or its Subcontractors (but in no event earlier than the achievement
of Milestone 5 in such PCS System) in any given PCS System (the "RF Services
Warranty Period") the Final Site Count within and the Final RF Design applicable
to such PCS System will be accurate based upon the environmental circumstances
in such PCS System as they existed at the time of the Final Acceptance of such
PCS System provided that the projections of subscriber growth, traffic and other
-------- ----
predictive data, including all applicable standards as identified in Exhibits
B1, D and H, upon which the Final Site Count and Final RF Design have been
determined, have not been materially exceeded or the applicable and relevant
industry standards have not materially changed; and provided further that in no
-------- ------- ----
event will the RF Engineering warranty pursuant to this subsection 17.2(a) cover
or warrant items or performance otherwise covered or warranted pursuant to
subsection 17.3 below.
(b) The Vendor warrants that, for a period of not less than two (2) years
from the date of completion of Facilities Preparation Services within any PCS
System but in no event later than the achievement of Milestone 8 pursuant to
Exhibit A1 in such PCS System (provided that in the event of a Microwave Delay
-------- ----
Period in such PCS System pursuant to subsection 23.8, the commencement of the
Facilities Preparation Services Warranty Period will not be later than three (3)
months from the date the Vendor would have otherwise been able to commence
Substantial Completion testing in such PCS System in accordance with Exhibit B3
and Milestone 8 as set forth on Exhibit A1 but for the existence of such
Microwave Delay Period) (the "Facilities Preparation Services Warranty Period"
and collectively with the RF Services Warranty Period, the "Services Warranty
Periods") such Facilities Preparation Services will be (i) operational in
accordance with the Specifications, (ii) in compliance with all material
Applicable Laws and material Applicable Permits in effect at the time of the
completion of such Facilities Preparation Services in such PCS System, and (iii)
free from Defects or Deficiencies.
(c) The Vendor warrants that, for a period of six (6) months from the date
of completion, with respect to other Services performed by the Vendor and not
otherwise covered elsewhere in this Section 17, including, but not limited to,
repair Services, such other Service(s) will be free from Defects or Deficiencies
for which the Vendor is responsible pursuant to the terms of this Contract.
17.3 System Warranty. The Vendor warrants that, for a period ending three
---------------
(3) years from the Final Acceptance of the last PCS System within the Initial
System (the "System Warranty Period"), the ongoing performance of each PCS
System together with all other PCS Systems within the System will conform with
and perform to the performance criteria set
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73
forth Exhibit F as of the date of the Final Acceptance of such PCS System based
on the circumstances within such PCS System on such date. The System warranty
pursuant to this subsection 17.3 will be limited to the extent that the
projections of subscriber growth, traffic and other predictive data, including
all applicable standards as identified in Exhibits B1, D and H, upon which the
Final Site Count and Final RF Design have been determined, have not been
materially exceeded or the applicable and relevant industry standards have not
materially changed.
17.4 Breach of Warranties. (a) In the event of any breach of any of the
--------------------
Warranties during any of the applicable Warranty Periods set forth in
subsections 17.1(a), 17.1(b), 17.2(a), 17.2(b), 17.2(c) and 17.3, the Vendor
will, in accordance with the terms of this Section 17, promptly repair or
replace the defective or nonconforming Product or otherwise cure any Defects and
Deficiencies so that each PCS System and the System as a whole will perform in
accordance with the Specifications and Exhibit F. If the Vendor fails to
promptly repair, replace and/or cure such defect, the Owner may, in addition to
exercising any other remedies available to it, itself cause such repair,
replacement and/or cure, at its option and at the sole cost and expense of the
Vendor.
(b) The Vendor recognizes that the Owner may suffer injury and may be
damaged in an amount which will be difficult to determine with certainty as a
result of Outages resulting from causes attributable to the failure of the
Vendor's Products and/or Services to perform in accordance with the
Specifications. As used herein, "Outage" means an unscheduled loss of
functionality of the System or any PCS System due to the failures of PCS
Products or any combination thereof defined as the loss of the capability to
originate or terminate [ ] or more of the active voice channels then in service
within the System or such PCS System for a period of time exceeding [ ] minutes.
(c) During the System Warranty Period, the Vendor will be liable to the
Owner for damages (the "Warranty Damages") for Outages (for other than in the
Test-bed Laboratory) that result from (i) the failure of the Vendor's Equipment
and/or Software to perform in accordance with the Specifications, (ii) the
failure of the Vendor to provide Services in accordance with the Specifications
applicable thereto, (iii) a Vendor procedural error or (iv) inaccurate Technical
Documentation, excluding marketing bulletins, sales literature or other
promotional materials provided by the Vendor to the Owner. As used herein,
"Vendor procedural error" means an error or improper deviation from the Vendor's
or its Subcontractors' procedures by, or attributable to, the Vendor's
personnel. Warranty Damages will be calculated based upon [ ] for each Outage
occurring in any given PCS System to the extent such Outage exceeds [ ] from
the time the Owner notified the Vendor of such Outage (not including such
[ ]), plus [ ] for each minute the duration of the Outage exceeds [ ]from
the time the Owner notifies the Vendor of such Outage (not including such [ ]).
(d) In no event will the Vendor's liability for Warranty Damages pursuant
to this subsection 17.4 exceed [ ] with respect to each Outage in any given
PCS System. In addition, the Vendor's total liability for Warranty Damages
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74
pursuant to this subsection 17.4 will not exceed [ ] per calendar year during
the Term of this Contract with respect to Outages in any given PCS System per
calendar year.
(e) Notwithstanding the foregoing, the Vendor will have no liability
pursuant to this subsection 17.4 for:
(i) Outages caused by a Force Majeure event as
described in Section 16 other than to the extent that any of the
Vendor's Products and/or Services resulting in such Outages
should, in accordance with the Specifications be able to
withstand any such Force Majeure event;
(ii) Outages resulting from a scheduled activity,
including, but not limited to, System maintenance or loading of
Software or Equipment Upgrades, Enhancements or Combined
Releases, unless said Outage (without fault of the Owner) extends
beyond the expected downtime, as provided in the Specifications
applicable thereto, associated with such Equipment or Software
maintenance Upgrades, Enhancements or Combined Releases;
(iii) alterations by the Owner and/or the Vendor at
the Owner's request or otherwise pursuant to the terms of this
Contract to the System and/or any PCS System, excluding normal
maintenance or parameter changes as prescribed by the applicable
Technical Documentation;
(iv) Outages resulting from the Owner's, its
subcontractors' or any third party's (if such third party is
employed by the Owner) failure to follow the Technical
Documentation;
(v) Outages resulting from the negligence, gross
negligence or willful misconduct of the Owner, or any of its
employees, agents or contractors or any other third party (other
than any Subcontractor or any employees, representatives or
agents of the Vendor); or
(vi) Outages resulting from failure of equipment or
software not supplied by the Vendor or any Subcontractors or from
the performance of services not performed by the Vendor or any
Subcontractors; or
(vii) Outages caused by the Owner's deactivation of
the System or any portion thereof, unless the deactivation is
undertaken in avoidance of an unplanned outage; or
(viii) Outages caused by the failure of the Network
Interconnection facilities.
(f) On or before the beginning of each quarter of each calendar year
during the Term of this Contract, the Owner will provide the Vendor a written
report summarizing any Outages occurring during the previous calendar quarter.
The amount of any Warranty
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75
Damages will be determined by the Owner as of the end of the fourth quarter of
each calendar year during the Term, for the preceding four quarterly reporting
periods during such Term. The Owner will notify the Vendor of any such Warranty
Damages in writing. Such Damages will be payable in credits on future purchases
under this Contract or otherwise if this Contract is terminated for any reason
within thirty (30) days of the occurrence. Any disputes regarding the
determination of the cause of an Outage or the amount of any such Warranty
Damages will be resolved in accordance with the provisions of Section 23.
17.5 Repair and Return. (a) If the Owner claims a breach of warranty
-----------------
under subsections 17.1, 17.2 or 17.3, it must notify the Vendor of the claimed
breach within a reasonable time after its determination that a breach has in
fact occurred. The Owner will allow the Vendor to inspect the Products, the
Services or the System, as the case may be, on-site, or, upon the Vendor's
reasonable request and, subject to subsection 17.5(d) below, at the Vendor's
sole expense: (i) with respect to Products, return such Products to any of the
Vendor's repair facilities located in the United States and listed on Schedule
8, or (ii) with respect to Non-Essential Equipment, return such Non-Essential
Equipment to the Vendor (or to the third party manufacturer if previously
requested by the Vendor) for further return to the applicable third party
manufacturer. The Vendor or such third party manufacturer may use either new,
remanufactured, reconditioned, refurbished, or functionally equivalent Products
or parts pursuant to the terms of this Contract, including, but not limited to,
the Specifications, in the furnishing of warranty repairs or replacements under
this Contract.
(b) The Vendor agrees to commence work on all such Products, Non-Essential
Equipment, Services or any System Defect, as the case may be, or Installation
defects as soon as practicable, but the Vendor will use reasonable efforts to
commence such Work in no event later than twenty-four (24) hours after
notification of such defect, and, subject to subsections 17.5(e) and 17.5(f),
the Vendor will cure such defect as promptly as practicable. During the Product
Warranty Period electronic circuit board components of Equipment or Non-
Essential Equipment, as the case may be, will be repaired or replaced by the
Vendor.
(c) Failure of the System to function to the level of the performance
warranty as set forth in subsection 17.3 will result in the obligation of the
Vendor to promptly make whatever repairs, modifications, alterations, expansions
or to take any other action of any kind, including but not limited to the
provision of additional Products and/or Services, necessary to satisfactorily
fix that portion of the System causing any failure for which the Vendor is
responsible. In the event of a breach of the warranties in Section 17 which
will be cured with the installation of additional PCS Products, the Vendor will
provide such PCS Products, together with related transportation, Installation
and optimization Services, as are reasonably required to remedy the shortfall,
at no charge to the Owner, provided that, if in order to remedy the shortfall,
-------- ----
the number of additional Base Stations required to cure the Vendor's breach
under these warranties is not in excess of five percent (5%) of the total number
of Base Stations in the relevant PCS System (as such "total number" is as set
forth in the Final RF Engineering Plan), the Vendor will not be obligated to pay
for the Base Stations and the installation and transportation related thereto
required to cure such breach, provided further that the Vendor will be obligated
-------- ------- ----
to provide and pay for any Base Stations and the installation and transportation
related thereto in excess of any such five percent (5%) shortfall.
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(d) All costs associated with (i) removing or disconnecting the Products
or the Non-Essential Equipment subject to the warranty claim pursuant to the
terms of this Section 17 from any other Products, the respective PCS System or
any part thereof or from other equipment, any other pcs system or any part
thereof to which they are attached or connected, or (ii) dismantling surrounding
Products, the respective PCS System or any part thereof or any other equipment
or other pcs system or any part thereof in order to so remove or disconnect the
Products or Non-Essential Equipment subject to such warranty claim will be borne
by the Vendor throughout the applicable Warranty Period unless such Products are
readily returnable to the Vendor in which case the Owner will bear all such
costs. All packaging, shipping and freight charges incurred in connection with
the return of Items to the Vendor will be borne by the Owner. The Vendor will
be responsible for packing, shipping and freight charges for return of repaired
or replacement Items to the Owner, unless the Products or Non-Essential
Equipment, as the case may be, returned are not Defective or otherwise not
covered by the Vendor's warranty pursuant to subsection 17.1, in which case the
Owner will pay for all such charges between the Owner's point of origin and the
Vendor's applicable repair facility in the United States.
(e) For routine warranty service, the Vendor will, during the respective
Warranty Period, ship replacement or repaired Products or Non-Essential
Equipment (or components thereof) within thirty (30) days of receipt of the
Defective Equipment or Non-Essential Equipment (or components thereof) from the
Owner. In the event such replacement or repaired Products or Non-Essential
Equipment cannot be shipped within such time period, or if the Vendor determines
that due to the particular circumstances, on-site repairs or services are
required, the Vendor will undertake such repairs or replacement services on-site
within thirty (30) days of notification of the warranty Defect by the Owner. In
the event that the Vendor fails to repair or replace Defective Products and/or
Non-Essential Equipment within thirty (30) days from the Owner's notice to the
Vendor, then the Vendor will be deemed to be in breach of its obligations
pursuant to this Contract and the Owner will be entitled to receive a refund of
all amounts previously paid to the Vendor for the Defective Products or Non-
Essential Equipment, and will have no further obligation to pay additional
amounts in connection with the Defective Products or Non-Essential Equipment.
The Owner will return such Defective Products and Non-Essential Equipment to the
Vendor at the Vendor's sole cost and expense.
(f) For emergency warranty service situations, the Vendor will, during the
applicable Warranty Periods, use its best efforts to ship replacement Products
or Non-Essential Equipment (or components thereof) no later than twelve (12)
hours after notification of the warranty Defect by the Owner. The Owner will
ship the Defective Products or Non-Essential Equipment to the Vendor within
thirty (30) days of receipt of the replacement Products or Non-Essential
Equipment, as the case may be. In the event the Vendor fails to receive such
Defective Products or Non-Essential Equipment within such thirty (30) day
period, the Vendor will invoice the Owner for the replacement Products or Non-
Essential Equipment at the then-current price in effect therefor pursuant to the
terms of this Contract. If in an emergency warranty service situation, the
Owner and/or the Vendor determines that due to the particular circumstances, on-
site technical assistance is necessary, the Vendor will dispatch emergency
service personnel to the site in accordance with the terms of subsection 2.26.
For
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the purpose of this subsection 17.5, an emergency warranty service situation
will be deemed to exist upon the occurrence of any E1 Emergency Condition or E2
Emergency Condition. The Vendor agrees to commence work on all Equipment, Non-
Essential Equipment, Facilities Preparation Services or any System defect, as
the case may be, or Installation defects materially impairing service to
subscribers, System performance, billing, administration and/or maintenance as
soon as practicable, but in no event later than twenty-four (24) hours after
notification of such defect, and the Vendor will cure such defect as promptly as
practicable.
17.6 Technical Assistance Center. The Vendor must maintain a technical
---------------------------
assistance center in the United States, and during the Warranty Periods
established pursuant to subsections 17.1(a), 17.1(b), 17.2 and 17.3,
respectively, will make such support center available to the Owner twenty-four
(24) hours per day free of any additional charge to the Owner (other than
applicable Annual Release Maintenance Fees).
17.7 Scope of Warranties. Unless otherwise stated herein, the Vendor's
-------------------
warranties under this Section 17 will not apply to:
17.7.1 damage or defects resulting from the negligence, gross
negligence or willful misconduct of the Owner, or any of its employees, agents
or contractors;
17.7.2 any Equipment or Software damaged by accident or disaster,
including without limitation, fire, flood, wind, water, lightning or power
failure other than to the extent that any such Equipment or Software should in
accordance with the Specifications and/or the Vendor's representations be able
to withstand any such events; or
17.7.3 non-integral items (other than any Non-Essential Equipment
otherwise covered by subsection 17.1) normally consumed in operation or which
has a normal life inherently shorter than the Warranty Periods (e.g., fuses,
----
lamps, magnetic tape); or
17.7.4 damages or defects resulting directly from Other Vendor's
equipment provided that this will in no event limit the Vendor's obligations as
to Interoperability pursuant to the terms of this Contract;
17.7.5 Products which have had their serial numbers or months and
year of manufacture removed or obliterated by the Owner; or
17.7.6 failures or deficiencies in BTS performance resulting solely
from changed environmental conditions, including, but not limited to, the growth
of trees and other foliage, the erection of buildings, and interference from
third party radio transmissions not otherwise engineered for by the Vendor;
except when any such damage or defects are made, done or caused by the Vendor or
any of its Subcontractors.
17.8 Expenses. Except as otherwise provided in this Section 17, the
--------
Owner will reimburse the Vendor for the Vendor's out-of-pocket expenses incurred
at the Owner's
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78
request in responding to and/or remedying Products, Non-Essential Equipment,
Services or any System defect, or service Deficiencies not covered by the
warranties set forth herein or otherwise covered under a separate System
maintenance agreement (subject, however, to the terms and conditions of any such
agreement) between the Vendor and the Owner.
17.9 Third Party Warranties. If the Vendor purchases or subcontracts for
----------------------
the manufacture of any part of the System or the performance of any of the
Services to be provided hereunder from a third party, the warranties given to
the Vendor by such third party will inure, to the extent assigned to the Owner
pursuant to this Section 17 or permitted by law, to the benefit of the Owner,
and the Owner will have the right, at its sole discretion, to enforce such
warranties directly and/or through the Vendor. The warranties of such third
parties will be in addition to and will not, unless otherwise expressly stated
herein, be in lieu of any warranties given by the Vendor under this Contract.
17.10 Additional System Element Locations. In the event that under the
-----------------------------------
remedy provisions of this Section 17 the Vendor is required to provide
additional MSC and/or Base Stations requiring additional System Element
Locations, the Owner will be responsible for all Site Acquisition and Facilities
Preparation Services costs (other than any construction management costs or fees
which will be borne by the Vendor).
17.11 EXCLUSIVE REMEDIES. THE FOREGOING PRODUCT, SERVICES AND SYSTEM
------------------
WARRANTIES AND REMEDIES ARE EXCLUSIVE FOR THE PURPOSES OF ANY BREACH BY THE
VENDOR OF ANY SUCH WARRANTY AND ARE IN LIEU OF ALL OTHER EXPRESS AND IMPLIED
WARRANTIES, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
SECTION 18 INSURANCE
18.1 Insurance. The Vendor will maintain insurance in accordance with the
---------
provisions set forth in Schedule 6.
SECTION 19 TAXES
19.1 Taxes. The amounts to be paid by the Owner under this Contract do
-----
not include any state, provincial or local sales and use taxes, however
designated, which may be levied or assessed on the System, any PCS System or any
component thereof, including, but not limited to, the Services. With respect to
such taxes, the Owner will either furnish the Vendor with an appropriate
exemption certificate applicable thereto or pay to the Vendor, upon presentation
of invoices therefor, such amounts thereof as the Vendor may by law be required
to collect or pay; provided, however, that the Vendor will use its best efforts
-------- -------
to minimize the amount of any such taxes. The Owner has no obligation to the
Vendor with respect to other taxes, including, but not limited to, those
relating to franchise, net or gross income or revenue,
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79
license, occupation, other real or personal property, and fees relating to
importation of the Products in the United States.
SECTION 20 INDEMNIFICATION AND LIMITATION OF LIABILITY
20.1 Vendor Indemnity. (a) The Vendor will indemnify and hold the Owner
----------------
and its Affiliates, partners, directors, officers, agents and employees (the
"Indemnitees") harmless from and against all third party claims, demands suits,
proceedings, damages, costs, expenses, liabilities (including, without
limitation, reasonable legal fees) or causes of action (collectively,
"Liabilities") brought against or incurred by any Indemnitee for (i) injury to
persons (including physical or mental injury, libel, slander and death), or (ii)
loss or damage to any property, or (iii) violations of Applicable Laws,
Applicable Permits, codes, ordinances or regulations by the Vendor, or (iv) any
patent or trademark claims arising out of the Vendor's obligation subject to
subsection 14.2 or (v) any other liability, resulting from the acts or
omissions, negligence, error, wilful misconduct or strict liability, of the
Vendor, its officers, agents, employees, or Subcontractors in the performance of
this Contract. If the Vendor and the Owner jointly cause such Liabilities, the
Parties will share the liability in proportion to their respective degree of
causal responsibility.
(b) The Vendor's obligation to indemnify under subsection 20.1(a) with
respect to any Liability will not arise unless the Owner or the Indemnitee (i)
notifies the Vendor in writing of such potential Liability, in the case of the
Owner, within a reasonable time after the Owner will receive written notice of
such Liability; provided that the lack of such notice will not affect the
-------- ----
Vendor's obligation hereunder (A) if the Vendor otherwise has knowledge of such
Liability and (B) unless such lack of notice is the cause of the Vendor being
unable to adequately and reasonably defend such Liability, (ii) gives the Vendor
the opportunity and authority to assume the defense of and settle such
Liability, subject to the provisions of the next two sentences, and (iii)
furnishes to the Vendor all such reasonable information and assistance available
to the Owner (or other Indemnitees) as may be reasonably requested by the Vendor
and necessary for the defense against such Liability. The Vendor will assume on
behalf of the Indemnitee and conduct with due diligence and in good faith the
defense of such Liability with counsel (including in-house counsel) reasonably
satisfactory to the Indemnitee; provided that the Indemnitee will have the right
-------- ----
to be represented therein by advisory counsel of its own selection and at its
own expense. If the Indemnitee will have reasonably concluded that there may be
legal defenses available to it which are different from or additional to, or
inconsistent with, those available to the Vendor, the Indemnitee will have the
right to select separate counsel reasonably satisfactory to the Vendor to
participate in the defense of such action on its own behalf at the Vendor's
expense. In the event the Vendor fails to defend any Liability as to which an
indemnity might be provided herein, then the Indemnitee may, at the Vendor's
expense, contest or settle such matter without the Vendor's consent. All
payments, losses, damages and reasonable costs and expenses incurred in
connection with such contest, payment or settlement will be to the Vendor's
account and may be deducted from any amounts due to the Vendor. The Vendor will
not settle any such Liability without consent of the Indemnitee, which consent
will not be unreasonably withheld. This indemnity is in lieu of all other
obligations of the Vendor, expressed or implied, in law
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80
or in equity, to indemnify the Indemnitees (except pursuant to Section 14 or
any other Vendor indemnitees set forth in this Contract).
20.2 LIMITATION ON LIABILITY. EXCEPT AS PROVIDED IN SUBSECTIONS 14.2,
-----------------------
15.2, 15.3, 17.4, 20.1, AND 20.3 HEREOF, IN NO EVENT, AS A RESULT OF BREACH OF
CONTRACT OR BREACH OF WARRANTY, WILL EITHER PARTY HERETO BE LIABLE UNDER THIS
CONTRACT TO THE OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES,
INCLUDING LOST PROFITS OR REVENUES OF SUCH PARTY, BEFORE OR AFTER ACCEPTANCE,
WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE.
20.3 Damages for Fraud or Willful Misconduct (a) The Vendor will be
---------------------------------------
responsible for all damages, including without limitation, indirect, incidental
and consequential damages, incurred by the Owner as a result of any damage or
injury caused by or resulting from the fraud or willful misconduct of the
Vendor.
(b) The Vendor will be responsible for all damages, but excluding
indirect, incidental and consequential damages, incurred by the Owner as a
result of any damages or injury caused by or resulting from the fraud, gross
negligence or willful misconduct of any of the Subcontractors related to the
performance of the Work, to the extent the Vendor would have liability therefor
under this Contract if the Vendor had engaged in such conduct.
SECTION 21 REPRESENTATIONS AND WARRANTIES
21.1 Representations and Warranties of the Vendor. The Vendor hereby
--------------------------------------------
represents and warrants to the Owner as follows:
21.1.1 Due Organization of the Vendor. The Vendor is a corporation
------------------------------
duly incorporated, validly existing and in good standing under the laws of the
State of New York and has all requisite corporate power and authority to own and
operate its business and properties and to carry on its business as such
business is now being conducted and is duly qualified to do business in all
jurisdictions in which the transaction of its business in connection with the
performance of its obligations under this Contract makes such qualification
necessary or required.
21.1.2 Due Authorization of the Vendor; Binding Obligation. The
---------------------------------------------------
Vendor has full corporate power and authority to execute and deliver this
Contract and to perform its obligations hereunder, and the execution, delivery
and performance of this Contract by the Vendor have been duly authorized by all
necessary corporate action on the part of the Vendor; this Contract has been
duly executed and delivered by the Vendor and is the valid and binding
obligation of the Vendor enforceable in accordance with its terms, except as
enforcement thereof may be limited by or with respect to the following: (i)
applicable insolvency, moratorium, bankruptcy, fraudulent conveyance and other
similar laws of general application relating to or affecting the rights and
remedies of creditors; (ii) application of equitable principles (whether
enforcement is sought in proceedings in equity or at law); and
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81
(iii) provided the remedy of specific enforcement or of injunctive relief is
subject to the discretion of the court before which any proceeding therefore may
be brought.
21.1.3 Non-Contravention. The execution, delivery and performance of
-----------------
this Contract by the Vendor and the consummation of the transactions
contemplated hereby do not and will not contravene the certificate of
incorporation or by-laws of the Vendor and do not and will not conflict with or
result in (i) a breach of or default under any indenture, mortgage, lease,
agreement, instrument, judgment, decree, order or ruling to which the Vendor is
a Party or by which it or any of its properties is bound or affected, or (ii) a
breach of any Applicable Law.
21.1.4 Regulatory Approvals. All authorizations by, approvals or
--------------------
orders by, consents of, notices to, filings with or other acts by or in respect
of any Governmental Entity or any other Person required in connection with the
execution, delivery and performance of this Contract by the Vendor have been
obtained or will be obtained in due course.
21.1.5 Non-Infringement. The Vendor represents and warrants to the
----------------
best of its knowledge based on reasonable diligence under the circumstances that
as of the Effective Date there are no actual claims or threatened or actual
suits in connection with patents and other intellectual property matters that
would materially adversely affect the Vendor's ability to perform its
obligations under this Contract.
21.1.6 Scope. The representations and warranties of the Vendor
-----
pursuant to this subsection 21.1 will be deemed to apply to all of the Work
performed by any Subcontractor employed by the Vendor as though the Vendor had
itself performed such Work.
21.1.7 Requisite Knowledge. The Vendor represents and warrants that
-------------------
it has all requisite knowledge, know-how, skill, expertise and experience to
perform the Work in accordance with the terms of this Contract.
21.1.8 Financial Capacity. The Vendor represents and warrants the
------------------
financial, management and manufacturing capacity and capabilities to do the Work
in a timely manner in accordance with the terms of this Contract.
21.2 Representations and Warranties of the Owner. The Owner hereby
-------------------------------------------
represents and warrants to the Vendor as follows:
21.2.1 Due Organization of the Owner. The Owner is a limited
-----------------------------
partnership, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to own and operate its
business and properties and to carry on its business as such business is now
being conducted and is duly qualified to do business in Delaware and in any
other jurisdiction in which the transaction of its business makes such
qualification necessary.
21.2.2 Due Authorization of the Owner; Binding Obligation. The Owner
--------------------------------------------------
has full power and authority to execute and deliver this Contract and to perform
its obligations
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82
hereunder, and the execution, delivery and performance of this Contract by the
Owner have been duly authorized by all necessary partnership action on the part
of the Owner; this Contract has been duly executed and delivered by the Owner
and is the valid and binding obligation of the Owner enforceable in accordance
with its terms, except as enforcement thereof may be limited by or with respect
to the following: (i) applicable insolvency, moratorium, bankruptcy, fraudulent
conveyance and other similar laws of general application relating to or
affecting the rights and remedies of creditors; (ii) application of equitable
principles (whether enforcement is sought in proceedings in equity or at law);
and (iii) provided the remedy of specific enforcement or of injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.
21.2.3 Non-Contravention. The execution, delivery and performance of
-----------------
this Contract by the Owner and the consummation of the transactions contemplated
hereby do not and will not contravene the partnership arrangements governing the
conduct of the partners in the Owner and do not and will not conflict with or
result in (i) a breach of or default under any indenture, mortgage, lease,
agreement, instrument, judgment, decree, order or ruling to which the Owner is a
Party or by which it or any of its properties is bound or affected, or (ii) a
breach of any Applicable Law.
SECTION 22 TITLE AND RISK OF LOSS
22.1 Title. Title to each Item of Equipment (but in no case Software)
-----
will pass to the Owner upon delivery thereof by the Vendor to the System Element
Location to which each such Item belongs or such other location specifically
requested by the Owner or as otherwise mutually agreed to by the Parties. Prior
to acquiring title to the Equipment, the Owner will not cause or permit the
Equipment to be sold, leased or subjected to a lien or other encumbrance.
22.2 Risk of Loss. Risk of loss of any Products furnished to the Owner in
------------
connection with this Contract will pass from the Vendor to the Owner upon the
completion of the Bolt-down by the Vendor of any PCS Product or at the
completion of installation of any other Product each at the appropriate System
Element Location within the given PCS System provided that the risk of loss of
any given PCS System within the System will not pass to the Owner until such
time as the Vendor is fully prepared to commence testing for the Substantial
Completion of such PCS System in accordance with and pursuant to Exhibit B3 and
Exhibit A1; provided, however, that the Owner will assume the risk of loss prior
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to such Substantial Completion by the Vendor for any such Products damaged due
to the gross negligence or willful misconduct of the Owner (provided that the
-------- ----
Owner will also assume the risk of loss for its own negligence at any time after
Milestone 6 (as set forth in Exhibit A1) in each PCS System within the System).
With respect to Products delivered by the Vendor but not otherwise installed by
the Vendor pursuant to and in accordance with the terms of this Contract, risk
of loss will pass to the Owner upon delivery by the Vendor to the Owner's
designated site. Until such time as risk passes to the Owner, the Vendor will,
at its sole cost and expense, remedy, repair and replace all physical damage,
loss or injury to such property; provided that, prior to the passing of risk of
-------- ----
loss to the Owner, any actual proceeds of its
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83
applicable insurance payable with respect to such physical damage at such time,
loss or injury are paid to the Vendor as necessary to achieve such remedy,
repair or replacement.
SECTION 23 DISPUTE RESOLUTION
23.1 Dispute Resolution. Subject to subsection 24.3 and subsection 23.4,
------------------
in the event any controversy, claim, dispute, difference or misunderstanding
arises out of or relates to this Contract, any term or condition hereof, any of
the Work to be performed hereunder or in connection herewith, the respective
System Managers of the Owner and the Vendor will meet and negotiate in good
faith in an attempt to amicably resolve such controversy, claim, dispute,
difference or misunderstanding in writing. Such System Managers must meet for
this purpose within ten (10) Business Days, or such other time period mutually
agreed to by the Parties, after such controversy, claim, dispute, difference or
misunderstanding arises. If the Parties are unable to resolve the controversy,
claim, dispute, difference or misunderstanding through good faith negotiations
within such ten (10) business day period, each Party will, within five (5)
Business Days after the expiration of such ten (10) business day period, prepare
a written position statement which summarizes the unresolved issues and such
Party's proposed resolution. Such position statement must be delivered by the
Vendor to the Owner's Vice President of Engineering or Operations and by the
Owner to the Vendor's corresponding officer or representative for resolution
within (5) Business Days, or such other time period mutually agreed to by the
Parties.
If the Parties continue to be unable to resolve the controversy, claim,
dispute, difference or misunderstanding, either Party may initiate arbitration
in accordance with the provisions of subsection 23.2 below; provided, however,
-------- -------
that with respect to any controversy, claim, dispute, difference or
misunderstanding arising out of or relating to this Contract by which either
Party seeks to obtain from the other monetary damages in excess of twenty-five
million dollars ($25,000,000), either Party, in such case, may commence an
action in any state or federal court in accordance with subsection 27.7 to
resolve such matter in lieu of proceeding with an arbitration pursuant to and in
accordance with subsection 23.2. The arbitrators hired or otherwise chosen
pursuant to and in accordance with the terms of this Contract will determine
issues of arbitrability pursuant to the terms of this Contract but may not in
any way limit, expand or otherwise modify the terms of this Contract nor will
they have any authority to award punitive or other damages in excess of
compensatory damages (other than as specifically set forth in this Contract) and
each Party irrevocably waives any such claim thereto when invoking the
arbitration provisions of subsection 23.2.
23.2 Arbitration. An arbitration proceeding initiated by either
-----------
Party under this Contract with respect to any controversy, claim, dispute,
difference or misunderstanding will be conducted in Kansas City, Missouri in
accordance with the Commercial Arbitration rules of the AAA, except that, at the
request of either Party, a stenographic transcript of the testimony and
proceedings will be taken and the arbitrators will base their decision upon the
records and briefs of the Parties.
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84
Such arbitration will be initiated by either Party by notifying the other
Party in writing and will be settled before three (3) impartial arbitrators, one
of whom will be named by the Owner, one by the Vendor and the third by the two
arbitrators appointed by the Owner and the Vendor, respectively. All of the
named arbitrators will have significant experience in the wireless
telecommunications industry. If either the Owner or the Vendor fails to select
an arbitrator within ten (10) days after notice has been given of the initiation
of the arbitration, the officer in charge of the Kansas City, Missouri office of
the AAA will have the right to appoint the other arbitrator, and the two
arbitrators thus chosen will then select the third arbitrator.
Except as the Parties may otherwise mutually agree, the arbitration
hearings will commence within fifteen (15) Business Days after a Party's
initiation of the arbitration. The Federal Rules of Evidence will apply and
reasonable discovery, including depositions, will be permitted. Discovery
issues will be decided by the arbitrators and post-hearing briefs will be
permitted.
The arbitrators will render a decision within ten (10) days after the
conclusion of the hearing(s) and submission of post-hearing briefs and a written
opinion setting forth findings of fact and conclusions of law will be made
available to the Parties within that time period. The decision of the majority
of the arbitrators regarding the matter submitted will be final and binding upon
the Parties. Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
Each Party will pay for the services and expenses of the arbitrator
appointed by it, its witnesses and attorneys, and all other costs incurred in
connection with the arbitration (including, without limitation, the cost of the
services and expenses of the arbitrator appointed by the two arbitrators
appointed by the Parties) will be paid in equal part by the Parties, unless the
award will specify a different division of the costs. Unless otherwise
specifically stated in this Contract, during the pendency of any arbitration
proceedings, the Parties agree to continue to perform their obligations
hereunder in the same manner as prior to the institution of arbitration
proceedings.
23.3 Third Party Engineer. Disputes arising under subsections 2.6, 2.7,
--------------------
9.5(b), 9.6, 10.1 and 17.4 of this Contract, or as otherwise specifically
provided elsewhere in this Contract, or as otherwise mutually agreed by the
Parties, are to be resolved by the Third Party Engineer in the manner provided
in this subsection 23.3. The Vendor and the Buyer will first attempt to resolve
the dispute through consultation and negotiation in good faith and in a spirit
of mutual cooperation as provided in subsection 23.1 above. If those attempts
fail, then either Party may submit its written notice to the other Party
requesting that the dispute be resolved by the Third Party Engineer, in
accordance with the merits of the dispute. If, within ten (10) Business Days
after the receipt of such notice by the notified Party, the dispute is not
resolved, the Owner will select one of the Third Party Engineers listed on
Schedule 14 to render decision in the dispute. The Third Party Engineer will
issue a written decision containing an explanation of how and why the decision
was reached. The Third Party Engineer's decision will be final and binding,
except with respect to any opinion that over the Term of the Contract will
impact the losing Party in the amount of one million dollars
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85
($1,000,000) or more. If within ten (10) Business Days following the issuance
of any such opinion the Parties have not agreed to implement the terms of any
such opinion that is not final, either Party may seek arbitration pursuant to
the provisions of subsection 23.2 above. In such arbitration, either Party may
introduce into evidence the opinion of the Third Party Engineer, but the
arbitrator(s) must rule on all issues of the dispute on a de novo basis, except
-------
as to any facts or other matters set forth in the opinion and stipulated by both
of the Parties. If none of the listed Third Party Engineers is available or if
none accepts the assignment and the Parties cannot otherwise mutually agree to
another Third Party Engineer, an experienced and reputable engineer (who is not
employed by either Party or any of their Affiliates or affiliates) will be
chosen by the then President of the Institute of Electrical and Electronic
Engineers (or the Vice President, if the President is a present or former
employee of any such entities) to serve as the Third Party Engineer for the
purposes of resolving the dispute. Unless otherwise mutually agreed by the
Parties, any Person who is an officer or employee, agent, Subcontractor or
subcontractor of, or a technical consultant to, either Party will be
automatically ineligible to be the Third Party Engineer. The costs of
utilizing a Third Party Engineer to resolve disputes under this subsection 23.3
will be shared equally by both Parties.
23.4 Other Remedies. Notwithstanding anything to the contrary herein
--------------
contained, each Party will be entitled to pursue any equitable rights and
remedies that are available at law or in equity without complying with
subsection 23.2 or 23.3.
23.5 Tolling. All applicable statutes of limitation will be tolled to the
-------
extent permitted by Applicable Law while the dispute resolution procedures
specified in this Section 23 are pending, and nothing herein will be deemed to
bar any Party from taking such action as the Party may reasonably deem to be
required to effectuate such tolling.
SECTION 24 TERMINATION AND EVENTS OF DEFAULT
24.1 Termination Without Cause. (a) The Owner may, at its sole option,
-------------------------
terminate this Contract, in its entirety, for convenience upon ninety (90) days'
prior written notice at any time; provided that prior to any such termination
-------- ----
pursuant to this subsection 24.1 the Minimum Commitment will have been fulfilled
by the Owner in accordance with the terms of this Contract.
(b) Any orders for Vendor Work within any PCS System within the System
made by the Owner pursuant to and in accordance with the terms of this Contract
and the program management procedures of the Owner prior to any such termination
described in clause (a) above, other than the Initial Commitment, will remain in
effect and will be fulfilled to the extent that such orders are outstanding as
of the date of such termination. For the purposes of this subsection 24.1(b) an
"order" will not include the Initial Commitment or any order for a full PCS
System within the Initial System or the System.
24.2 Termination for Cause. The Owner also has the right to terminate
---------------------
this Contract in its entirety (except as otherwise set forth in clause (l)
below) without any penalty or
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86
payment obligation upon the occurrence of any Vendor event of default (each a
"Vendor Event of Default") as set forth below. The occurrence of any of the
following will constitute a Vendor Event of Default:
(a) the Vendor (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed within
forty-five (45) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it, (iii) is adjudged
bankrupt, or (iv) makes a general assignment for the benefit of its creditors,
or if a receiver is appointed for all or a substantial portion of its assets and
is not discharged within sixty (60) days after his appointment; or
(b) the Vendor commences any proceeding for relief from its creditors in
any court under any state insolvency statutes; or
(c) the Vendor materially disregards or materially violates material
Applicable Laws or material Applicable Permits; or
(d) the Vendor persistently and materially allows Defects and Deficiencies
to exist; or
(e) the Vendor fails to fulfill its obligations with respect to the
satisfaction, discharge or bonding of liens as set forth in subsection 23.6
hereof; or
(f) the Vendor abandons or ceases for a period in excess of thirty (30)
days its performance of the Work (except as a result of a casualty which is
fully covered by insurance or as to which other provisions reasonably acceptable
to the Owner are being diligently pursued) or fails to begin the Work within
thirty (30) days after the Notice to Proceed Date; or
(g) the Vendor assigns or subcontracts Work other than as provided for in
this Contract; or
(h) the Vendor fails to materially comply with any Change Order; or
(i) the Vendor fails to perform this Contract (including, without
limitation, any action the Vendor may take on any Vendor-Controlled Site) and
thereby prejudices in any way deemed material by the parties providing financing
in connection with the build-out of the Nationwide Network and/or the Owner in
their reasonable opinion the Owner's efforts to obtain financing for the System
and/or the Nationwide System; or
(j) the Vendor fails to pay to the Owner any material amount due to the
Owner by the date required for such payment; or
(k) the Vendor fails to comply with subsection 27.22;
(l) the Vendor misses any Interim Milestone within any given PCS System by
a period in excess of thirty (30) days and such failure to achieve such Interim
Milestone was
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87
not caused by (i) a Force Majeure event and/or (ii) any act or omission of the
Owner; provided that in such case the Owner will have the right, but not the
-------- ----
obligation, to terminate this Contract with respect to only that PCS System in
which such interim delay occurred unless such interim delay relates to Milestone
4 (as set forth on Exhibit A1) in which case the Owner will have the right, but
not the obligation, to terminate this Contract in its entirety as otherwise set
forth in this subsection 24.2; or
(m) the Vendor otherwise materially breaches any provision of this
Contract.
24.3 Remedies. (a) If any of the Vendor Events of Default exists, the
--------
Owner may, without prejudice to any other rights or remedies of the Owner in
this Contract or at law or in equity, terminate this Contract upon written
notice to the Vendor; provided, however, that the Owner will have first provided
-------- -------
to the Vendor the following periods of notice and opportunity to cure:
(i) in the case of an Event of Default specified in the
foregoing clauses (e) and (k), the Owner will have provided seven (7) days'
prior written notice to the Vendor, and the Vendor will have failed to
remedy such breach entirely by the end of such seven (7) day period;
(ii) in the case of an Event of Default specified in the
foregoing clauses (a) or (b), no notice or opportunity to cure will be
required from the Owner; and
(iii) in the case of any other Event of Default by the Vendor,
the Owner will have provided forty-five (45) days' prior written notice,
and the Vendor will have failed (i) to commence to cure the default within
five (5) days of delivery of such notice, and (ii) to diligently pursue
such cure and remedy the breach entirely by the end of said forty-five (45)
day notice period.
(b) If the Owner elects to terminate this Contract, the Owner may, without
prejudice to any other rights or remedies of the Owner in this Contract or of
law or in equity, do one or more of the following:
(i) Take possession of all Engineering and design data,
procurement data, manufacturing data, construction and erection data,
start-up and testing data, materials, and Products that will become part of
the System and/or the specified PCS Systems, or the Work, whether any of
the same is in a partial state of completion or completed condition, and
title to any of said items vests in the Owner (if not already vested by the
provisions of this Contract);
(ii) Take temporary possession and control of all of the
Vendor's installation equipment, machinery, and the Vendor's materials,
supplies, Software and any and all tools (including, but not limited to,
any and all RF Engineering tools and/or software) at any project site,
including but not limited to any System Element Location, within the System
and/or the specified PCS Systems which in the Owner's opinion are necessary
to finish the Work;
<PAGE>
88
(iii) Direct that the Vendor assign its Subcontractor agreements to
the Owner without any change of price or conditions therein or penalty or
payment therefor; or
(iv) Take over and finish the Work by whatever reasonable
methods the Owner may deem expedient;
provided, that, nothing contained in paragraphs (a) through (d) above will
- - - -------- ----
require the Vendor to relinquish to the Owner any of its manufacturing
facilities, specific Product designs (other than such designs previously
provided to the Owner pursuant to the terms of this Contract), Software Source
Codes, trade secrets or proprietary information not previously provided or made
available to the Owner, the System or any part thereof or any materials,
supplies, inventories, tools, software, engineering and/or designs that are not
integral or relevant to the completion of the Work.
24.4 Discontinuance of Work. Upon such notification of termination, the
----------------------
Vendor must immediately discontinue all of the Work (unless such notice of
termination directs otherwise), and, as more fully set forth in subsection
24.3(b) clauses (i) through (iv), deliver to the Owner copies of all data,
drawings, specifications, reports, estimates, summaries, and such other
information, and materials as may have been accumulated by the Vendor in
performing the Work, whether completed or in process. Furthermore, the Vendor
must assign, assemble and deliver to the Owner all purchase orders and
Subcontractor agreements requested by the Owner.
24.5 Payments. When the Owner terminates this Contract for cause pursuant
--------
to subsection 24.2, the Vendor will not be entitled to receive further payment
other than payments due and payable under this Contract and not subject to
dispute prior to such termination (provided that any such disputed amounts will
-------- ----
be paid by the Owner when and if such dispute is in fact resolved).
Notwithstanding anything herein to the contrary, the Owner may withhold
payments, if any, to the Vendor for the purposes of offset of amounts owed to
the Owner pursuant to the terms of this Contract until such time as the exact
amount of damages due the Owner from the Vendor is fully determined.
24.6 Costs. In the event of a termination due to a Vendor Event of
-----
Default, the Owner will be entitled to the costs in connection with finishing
the Work (exclusive of any Liquidated Damages already paid and/or owing to the
Owner upon termination of this Contract), and if such costs exceed the unpaid
balance of the Contract Price, the Vendor will be liable to pay such excess to
the Owner. The amount to be paid by the Vendor pursuant to this subsection 24.6
will survive termination of this Contract and will be subject to the limitations
of liability in this Contract.
24.7 Continuing Obligations. Termination of this Contract for any reason
----------------------
(i) will not relieve either Party of its obligations with respect to the
confidentiality of the Proprietary Information as set forth in subsection 27.19,
(ii) will not relieve either Party of any obligation which applies to it and
which expressly or by implication survives termination, and (iii) except as
otherwise provided in any provision of this Contract expressly limiting the
liability of either Party, will not relieve either Party of any obligations or
liabilities for loss or damage
<PAGE>
89
to the other Party arising out of or caused by acts or omissions of such Party
prior to the effectiveness of such termination or arising out of its obligations
as to portions of the Work already performed or of obligations assumed by the
Vendor prior to the date of such termination.
24.8 Vendor's Right to Terminate. The Vendor will have the option to
---------------------------
terminate this Contract without any penalty or payment obligations, other than
undisputed payment obligations outstanding as of the date of any such
termination pursuant to the terms of this Contract if:
(a) the Owner (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed within
forty-five (45) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it, (iii) is adjudged
bankrupt, or (iv) makes a general assignment for the benefit of its creditors,
or if a receiver is appointed for all or a substantial portion of its assets and
is not discharged within sixty (60) days after his appointment, and any such
filing, proceeding, adjudication or assignment as described herein above will
otherwise materially impair the Owner's ability to perform its obligations under
this Contract;
(b) the Owner commences any proceeding for relief in any court under any
state insolvency statutes;
(c) the Owner fails to make payments of undisputed amounts due to the
Vendor pursuant to the terms of this Contract which are more than sixty (60)
days overdue, provided that such failure has continued for at least thirty (30)
-------- ----
days after the Vendor has notified the Owner of its right and intent to so
terminate on account of such overdue amount;
(d) the Owner persistently and materially breaches subsection 11.1 or
subsection 27.19 notwithstanding the fact that the Vendor will have provided the
Owner with prior written notice describing the alleged material breaches and
will have given the Owner a reasonable time (not less than thirty (30) days) to
cure any such breaches; or
(e) except as otherwise provided in subsection 24.1 the Owner fails to
fulfill its Initial Commitment within five (5) years of the Effective Date for
whatever reason other than (i) any act or omission of the Vendor, (ii) failure
or inability to successfully complete Microwave Relocation in any PCS System,
(iii) failure or inability to successfully attain Site Acquisition Substantial
Completion in any given PCS System or (iv) any event otherwise constituting a
Force Majeure hereunder.
24.9 Special Termination Events. (a) In the event that financing for the
--------------------------
Owner's build-out of the initial phase of the Nationwide Network has not been
finalized with the Vendor and the Other Vendors on terms and conditions
reasonably satisfactory to the Owner, on or before one hundred and eighty (180)
days after the Effective Date, the Owner will have the right, but not the
obligation, to terminate this Contract in its entirety without charge or penalty
of any kind. In the event of a termination of this Contract pursuant to this
subsection 24.9 the Owner will remain liable for amounts due to the Vendor for
all Work performed
<PAGE>
90
or Products delivered by the Vendor or any of its Subcontractors pursuant to the
specific terms of this Contract which had been directly delivered to or
performed for the Owner and/or any of its facilities or sites in accordance with
the terms of this Contract including, but not limited to, the Project
Milestones. Any amounts owed by the Owner for Work done or Products delivered by
the Vendor during such interim one hundred and eighty (180) day period (the
"Financing Interim Period") not otherwise invoiced to the Owner by the Vendor
prior to the termination of such Financing Interim Period, will be invoiced to
the Owner by the Vendor within thirty (30) days (but failure to so invoice will
not excuse the Owner's obligation to otherwise pay the Vendor pursuant to the
terms of this subsection 24.9(a)) of such termination pursuant to this
subsection 24.9(a) and will be payable to the extent not otherwise in dispute by
the Owner within thirty (30) days of receipt of such invoice; provided that in
-------- ----
no event will the Owner be liable to the Vendor due to a termination
of this Contract pursuant to this subsection 24.9(a) for any of the Vendor's
direct or indirect costs or expenses incurred in connection with any supplies or
equipment ordered by the Vendor or agreements entered into by the Vendor in
order to enable it to fulfill its obligations hereunder or in connection with
the establishment of and/or upgrade to its manufacturing, personnel,
engineering, administrative or other capacities and/or resources in
contemplation of or pursuant to its performance in accordance with the terms of
this Contract and any amounts due to the Vendor pursuant to this subsection
24.9(a) will be limited in all cases to Work actually done or Products or
Services actually delivered to the Owner, its sites or its facilities.
(b) If at any time after the Effective Date any material change will have
occurred in any Applicable Law or in the interpretation thereof by any
Governmental Entity, or there will be rendered any decision in any judicial or
administrative case, in either case which, in the reasonable opinion of the
Owner, would make the Owner's use of any part of any PCS System illegal or would
subject the Owner or any of its Affiliates to any material penalty, other
material liability or onerous condition or to any burdensome regulation by any
Governmental Entity or otherwise render the use of such PCS System economically
nonviable, then, with respect to such PCS System, or affected part thereof, or
with respect to the entire System if so affected, the Owner may terminate this
Contract without charge or penalty of any kind; provided that (i) the Owner
-------- ----
gives the Vendor prior written notice of any such change or decision; (ii) that
the Owner uses its reasonable efforts for a reasonable time to reverse or
ameliorate such change or decision to the extent possible or practical prior to
declaring such termination and (iii) the Owner, at the Vendor's request, gives
the Vendor a legal opinion from a reputable law firm with experience in the area
confirming the Owner's reasonable opinion as set forth above. In the event of a
termination pursuant to this subsection 24.9(b), payment obligations incurred by
the Owner for Work actually done or Products or Services actually delivered by
the Vendor prior to such termination pursuant to this Contract will be payable
by the Owner to the Vendor on the same terms and subject to the limitations set
forth in subsection 24.9(a) above.
<PAGE>
91
SECTION 25 SUSPENSION
25.1 Owner's Right to Suspend Work. The Owner may, at any time and upon
-----------------------------
reasonable notice to the Vendor, order the Vendor, in writing, to suspend all or
any part of the Work for such reasonable period of time as the Owner may
reasonably determine to be appropriate for its convenience. Any request by the
Vendor for a change in the Specifications caused by the Owner's suspension of
the Work pursuant to this subsection 25.1 will be subject to the review and
reasonable acceptance of the Owner. No modification to the Specifications will
be made to the extent that performance is, was or would have been suspended,
delayed or interrupted for any other cause due to the Vendor's fault or if the
suspension had no effect on agreed upon performance deadlines and/or Project
Milestones set forth in this Contract. In the event of any such suspension, the
Vendor will be compensated for any actual and reasonable loss, actual and
reasonable damages or actual and reasonable expenses arising directly from such
delay, including but not limited to payments contractually required under any
Subcontractor agreements and reimbursement of reasonable expenses associated
with the necessary re-deployment of the Vendor's resources; provided that the
-------- ----
Vendor will in such event use reasonable efforts to estimate and report to the
Owner any such costs or expenses prior to the commencement of any such Owner
suspension pursuant to this subsection 25.1.
SECTION 26 MOST FAVORED CUSTOMER
26.1 Most Favored Customer Status. (a) With respect to the deployment of
----------------------------
the Initial System (including any Expansions or additions to the Initial System
within the context of the Initial System pursuant to the terms of this
Contract), the Owner will be deemed one of the Vendor's most important and
favored Customers and will always receive priority in terms of availability and
quantity of Products, Engineering and Services no less favorable than any other
Customer of the Vendor and in any event always in accordance with the terms of
this Contract, including, but not limited to, Exhibit A2. At any time during the
Term, the Owner will receive PCS Products, Engineering and Services at prices
and on payment terms and all other contract terms, including financing terms, no
less favorable to the Owner (when viewed collectively) than those offered or
available to any other Customer (other than Initial Affiliates and/or Additional
Affiliates pursuant to the terms of this Contract) of the Vendor for use of such
Items within the Unites States who are involved in transactions and/or
arrangements of similar or lesser volumes (for the purposes hereof, the Owner's
volume will always be deemed to be at least the level of the Initial Commitment
plus any more PCS Products, Services and/or Engineering ordered at such time
- - - ----
during the Term of this Contract.)
(b) On an annual basis throughout the Term of this Contract commencing on
the Effective Date the Vendor will be required to audit its offering of all CDMA
PCS Products, engineering and services provided to the then-existing ten (10)
largest of its Customers (other than Initial Affiliates and/or Additional
Affiliates pursuant to the terms of this Contract) (based on volume purchased or
to be purchased) in the preceding calendar year and certify to the Owner in a
certificate executed by a duly authorized officer of the Vendor (the "MFC
Certificate") that the Owner has in fact received the prices, payment and other
contract terms,
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92
availability and quantity of and on Products, Engineering and Services in
accordance with the terms of clause (a) above.
(c) To the extent the Owner determines pursuant to clause (b) above, or
otherwise, that the Vendor has not in fact complied with the terms of clause (a)
above the Owner will have thirty (30) Business Days from receipt of the MFC
Certificate to provide the Vendor with a written claim for Product and/or
Engineering and/or Service pricing rebates on future purchases under this
Contract based upon the Owner's reasonable calculation of the impact on the
Owner of the Vendor's failure to comply with clause (a) of this subsection 26.1.
The Owner's written claim will specify the reasoning underlying its claim. To
the extent the Vendor disagrees with any such claim for such pricing rebates
made by the Owner pursuant to this clause (c) the Vendor will have the right
within ten (10) Business Days of receiving the Owner's written rebate claim to
request management escalation of the matter as provided in subsection 23.1. In
the event that the Parties have not resolved the matter within ten (10) Business
Days after commencement of such escalation, either Party will have the right to
submit the Owner's claim and the Vendor's written response thereto to an
Independent Auditor who will have the authority only to determine whether the
Vendor is in non-compliance with the terms of clause (a) above and whether the
Owner's calculation of the claimed pricing rebate is fair and reasonable in
light of the Vendor's non-compliance with the terms of clause (a) above. Any
such independent determination will be made upon specific procedures and a set
of factors mutually agreed by the Parties. The Vendor will provide to the
Independent Auditor records and summaries of its agreements with such ten (10)
largest Customers pursuant to and in accordance with the terms of this
subsection 26.1. The Independent Auditor's determination must be made and
delivered to both the Vendor and the Owner within ten (10) Business Days of
receiving the request from the Vendor. The report of the Independent Auditor
will not be determinative of the Owner's right to pricing rebates under this
clause, and any dispute between the Vendor and the Owner as to such matter after
the Independent Auditor has rendered its opinion may be referred to arbitration
as provided in subsection 23.2; provided that the report of such Independent
-------- ----
Auditor will be admissible as evidence in any such arbitration. The Party
requesting a determination by an Independent Auditor will bear the cost of the
auditor, provided that, if the other Party's position is not supported by the
-------- ----
Independent Auditor, such other Party will bear any such cost.
SECTION 27 MISCELLANEOUS
27.1 Amendments. The terms and conditions of this Contract, including the
----------
provisions of Exhibits and Schedules hereto, may only be amended by mutually
agreed contract amendments. Each amendment must be in writing and will identify
the provisions to be changed and the changes to be made. Contract amendments
must be signed by duly authorized representatives of each of the Vendor and the
Owner.
27.2 Owner Liabilities. The Parties understand and agree that none of the
-----------------
Partners, nor any of their Affiliates, will guarantee or otherwise be in any way
liable with respect to any obligations or liabilities of the Owner or any of its
subsidiaries pursuant to this Contract. The Parties further understand and
agree that neither the Owner nor any of its subsidiaries
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93
will guarantee or otherwise be in any way liable for any obligations or
liabilities of any of the Partners or any Affiliate of the Owner pursuant to
this Contract unless, and only to the extent, (i) the Owner or any one of its
subsidiaries in accordance with the Owner's direction expressly agrees in
writing to guarantee or otherwise be liable for such liability, or (ii) in the
case of an Affiliate, such Affiliate orders Products and/or Services through the
Owner pursuant to the terms of this Contact.
27.3 Offset. The Vendor hereby waives any right of offset of amounts owed
------
by the Owner to the Vendor pursuant to the terms of this Contract.
27.4 Assignment. Except as otherwise permitted herein, neither this
----------
Contract nor any portion hereof may be assigned by either Party without the
express prior written consent of the other Party provided that such consent will
-------- ----
not otherwise be unreasonably withheld (provided further that the Owner's
-------- ------- ----
reasonable concern about an assignee's ability to perform the obligations and/or
the Work of the Vendor pursuant to and in accordance with the terms of this
Contract will be deemed to be reasonable grounds for the Owner withholding any
such consent). The Owner may, without the consent of the Vendor, collaterally
assign its rights hereunder (including, but not limited to, all licenses with
respect to the Software) to any or all parties providing financing for any part
of the Nationwide Network under a collateral trust for the benefit of the Vendor
and one or more other entities providing financing for any part of the
Nationwide Network or similar arrangement for the benefit of the Vendor and one
or more other entities providing for the financing for any part of the
Nationwide Network, in either case, which collateral trust or similar
arrangement, as the case may be, is reasonably acceptable to the Vendor in
accordance with the terms of the financing documents. If requested by the
Owner, the Vendor will within seven (7) days of such request provide a written
consent to any such assignment; provided that such consent will permit
-------- ----
reassignment if the financing parties exercise their remedies under the
documents for such financing subject to reasonable standards as to (i) the
creditworthiness of the assignee and (ii) the fact that the assignee is not at
such time a competitor of the Vendor. The foregoing rights and obligations are
in addition to those set forth in subsection 27.21. Any attempted assignment in
violation of the terms of this Contract will be null and void.
27.5 Enforcement. The Parties agree that either Party may enforce the
-----------
provisions of subsections 11.4 and 27.4 regarding assignment by an action for
injunction or other equitable remedies.
27.6 Notices. Any notice, request, consent, waiver or other communication
-------
required or permitted hereunder will be effective only if it is in writing and
personally delivered by hand or by overnight courier or sent by certified or
registered mail, postage prepaid, return receipt requested, addressed as
follows:
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94
If to the Owner:
MajorCo L.P.
c/o Sprint Telecommunications Venture
9221 Ward Parkway
Kansas City, Missouri 64113
Attention: Director, Program Management
If to the Vendor:
AT&T Corp.
7500 College Boulevard
Suite 1212
Overland Park, Kansas 66210
Attention: W.M. Plunkett
With a copy to;
AT&T Network Systems
Law Department
475 South Street
Morristown, New Jersey 07962
Attention: General Counsel
Written notice given pursuant to this subsection 27.6 will be delivered in
accordance with this subsection 27.6 in writing and when so delivered will be
deemed to have been fully served and delivered. By written notice provided
pursuant to this subsection 27.6, either Party may change its designated
addressee for purposes of giving notices under this Contract.
27.7 Governing Law and Forums. This Contract is governed by the laws and
------------------------
statutes of the State of Missouri, exclusive of Missouri's conflict of laws
rules. This Contract and the Work will be deemed to be made, executed and
performed in the State of Missouri. If one Party commences a lawsuit in
relation to this Contract against the other Party, such lawsuit can only be
brought in the State of Missouri. The Parties hereby waive a trial by jury in
any such lawsuit. The Vendor and the Owner each hereby irrevocably (a) agrees
that any suit, action or other legal proceeding arising out of or relating to
this Contract will be brought in the Federal District Court for the Western
District of Missouri, or in the Federal District Court for the District of
Delaware, which courts will have exclusive jurisdiction over any controversy
arising out of this Contract, (b) consents to the jurisdiction of such courts in
any such suit, action or proceeding and (c) waives any objection which it may
have to the laying of venue of any such suit, action or proceeding in such
courts and claim that any such suit, action or proceeding has been brought in an
inconvenient forum. Service of process in any suit, action or proceeding may be
made by mailing or delivering a copy of such process to the Owner or the Vendor,
as the case may be, at the addresses indicated in subsection 27.6 hereof and in
the manner set forth in such subsection 27.6. Nothing in this subsection 27.7
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95
will affect the right of the Owner or the Vendor to serve legal process in any
other manner permitted by law.
27.8 Compliance with Law. The Owner and the Vendor will (a) comply with
-------------------
all Applicable Laws in the performance of this Contract, including, without
limitation, the laws and regulations of the United States Department of Commerce
and State Department and any other applicable agency or department of the United
States regarding the import, re-import, export or re-export of products or
technology; and (b) indemnify each other for any loss, liability or expense
incurred as the result of breach of this subsection 27.8.
27.9 Independent Contractor. All work performed by any Party under this
----------------------
Contract will be performed as an independent contractor and not as an agent of
the other and no Persons furnished by the performing Party will be considered
the employees or agents of the other. The performing Party will be responsible
for its employees' compliance with all laws, rules, and regulations while
performing all work under this Contract.
27.10 Headings. The headings given to the Sections and subsections herein
--------
are inserted only for convenience and are in no way to be construed as part of
this Contract or as a limitation of the scope of the particular Section or
subsection to which the title refers.
27.11 Severability. Whenever possible, each provision of this Contract
------------
will be interpreted in such a manner as to be effective and valid under such
applicable law, but, if any provision of this Contract will be held to be
prohibited or invalid in any jurisdiction, the remaining provisions of this
Contract will remain in full force and effect and such prohibited or invalid
provision will remain in effect in any jurisdiction in which it is not
prohibited or invalid.
27.12 Waiver. Unless otherwise specifically provided by the terms of this
------
Contract, no delay or failure to exercise a right resulting from any breach of
this Contract will impair such right or will be construed to be a waiver
thereof, but such right may be exercised from time to time as may be deemed
expedient. If any representation, warranty or covenant contained in this
Contract is breached by either Party and thereafter waived by the other Party,
such waiver will be limited to the particular breach so waived and not be deemed
to waive any other breach under this Contract.
27.13 Public Statements and Advertising. (a) Neither Party nor its
---------------------------------
Subcontractors will issue any public statement (or any private statement unless
required in the performance of the Work), except as stated below, relating to or
in any way disclosing any aspect of the Work, the System, or any PCS System
including the scope, the specific terms of this Contract, extent or value of the
Work and/or the System or any PCS System. Express written consent of the other
Party is required prior to the invitation of or permission to any reporter or
journalist to enter upon the System or any part thereof. The Vendor agrees not
to use for publicity purposes any photographs, drawings and/or materials
describing the System or any PCS System without obtaining the prior written
consent of the Owner, which consent will not be unreasonably withheld. This
subsection 27.13(a) is not intended to exclude the provision of necessary
information to prospective Subcontractors and the Vendor's or the Owner's
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96
personnel, agents or consultants. All other such public disclosures by a Party
require the written consent of the other Party. The obligations of the Parties
under this subsection 27.13(a) are in addition to their respective obligations
pursuant to subsection 27.19. This subsection 27.13(a) will in no way limit
either Party from responding to customary press inquiries or otherwise making
public or private statements not otherwise disclosing Proprietary Information or
the specific terms of this Contract in the normal course of its business and/or
in connection with the Work hereunder.
(b) Subject to the last sentence of subsection 27.13(a), each Party will
submit to the other proposed copies of all advertising (other than public
statements or press releases) wherein the name, trademark or service mark of the
other Party or its Affiliates or affiliates is mentioned; and neither Party will
publish or use such advertising without the other Party's prior written
approval. Such approval will be granted as promptly as possible and will not be
unreasonably withheld. The Parties acknowledge that the obtaining of prior
written approval for each such use pursuant to this subsection 27.13(b) may be
an administrative burden. At the request of either Party, the Owner and the
Vendor will establish mutually acceptable guidelines that will constitute pre-
authorization for the uses specified therein. Such guidelines will be subject to
change from time to time at the reasonable request of either Party.
27.14 Records and Communications. To the extent not already established,
--------------------------
promptly after the Work begins, procedures for keeping and distributing orderly
and complete records of the Work and its progress will be established. The
procedures so established will be followed throughout the course of the Work
unless the Owner and the Vendor mutually agree in advance in writing to revise
the procedures. Furthermore, immediately after the Notice to Proceed is issued,
complete procedures for communications among the Owner and the Vendor will be
established. The procedures so established will be followed throughout the
course of the Work unless the Owner and the Vendor mutually agree in advance and
in writing to revise such procedure.
27.15 Ownership of Specifications. Neither the Vendor nor any
---------------------------
Subcontractor, nor any other Person performing or furnishing the Work, whether
or not under a direct or indirect contract with the Owner, will have or acquire
any title to or ownership rights in any of the Specifications, or in any other
part or portion of this Contract (or copies of any of the Specifications or this
Contract); and no such Person will reuse any of the Specifications on and/or
with respect to any other project without the prior written consent of the
Owner. The Specifications and this Contract (and any and all copies thereof),
are owned by and title resides in the Owner, unless otherwise agreed between the
Owner and any other Person. Notwithstanding anything contained herein to the
contrary, the Owner will not acquire any patent, copyright or trade secret
rights as a result of this Contract, except with respect to copyright and trade
secret rights pursuant to licenses and other approvals provided in connection
with the performance of the Work and except to the extent that a non-exclusive
license of any of the Vendor's copyright or trade secret rights is required to
perform the Work.
27.16 Financing Parties Requirements. The Vendor acknowledges that the
------------------------------
Owner represents that attainment of financing for construction of the Nationwide
Network may be
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97
subject to conditions that are customary and appropriate for the providers of
such financing. Therefore, the Vendor agrees to execute promptly any reasonable
amendment to or modification or assignment of this Contract required by such
providers (including, without limitation, any pertinent industrial development
authority or other similar governmental agency issuing bonds for financing of
the System) which do not materially modify the scope of the Vendor's Work in
order to obtain such financing. In the event that any such amendment or
modification materially increases the Vendor's risk or costs hereunder, the
Owner and the Vendor will negotiate in good faith to adjust the Contract Price,
and to equitably adjust such other provisions of this Contract, if any, which
may be affected thereby, to the extent necessary to reflect such increased risk
or costs. In no event will the Vendor be required to accept any modification or
amendment pursuant to this subsection 27.16 which places material increased risk
on the Vendor or otherwise materially modifies the scope of the Vendor's Work,
if, in the Vendor's reasonable opinion, such materially increased risk or
material modification in the Work is not otherwise adequately addressed by the
Owner or otherwise. The Vendor will be responsible for and pay all costs as a
result of the Vendor's unreasonable refusal to promptly comply with the request
for any such modification or amendment made by any provider of financing
described in this subsection 27.16.
27.17 Owner Review, Comment and Approval. To the extent that various
----------------------------------
provisions of this Contract provide for the Owner's review, comment, inspection,
evaluation, recommendation or approval, the Owner may at its option do so in
conjunction and/or consultation with the Vendor. To the extent that this
Contract requires the Owner to submit, furnish, provide or deliver to the Vendor
any report, notice, Change Order, request or other items, the Owner may at its
option and upon written notice to the Vendor designate the Engineer to submit,
furnish, provide or deliver such items as the Owner's agent therefor. To the
extent that various provisions of this Contract provide that the Owner may
order, direct or make requests with respect to performance of the Work or is
provided access to the System sites or any other site, the Owner may at its
option and upon written notice to the Vendor authorize the Engineer to act as
the Owner's agent therefor. Upon receipt of such notice, the Vendor will be
entitled to rely upon such authorization until a superseding written notice from
the Owner is received by the Vendor.
27.18 Specifications. The Owner acknowledges that parts of the
--------------
Specifications are comprised of Specifications prepared by the Vendor and that
the Vendor contributed significantly to many other portions thereof. The Owner
also acknowledges that, during the normal design, evolution and development
process, portions of the Specifications may appear in design and procurement
documents prepared by the Vendor in its normal course of business; provided,
--------
however, that the Owner will have no liability for any third party infringement
- - - -------
claims arising from such Specifications prepared by the Vendor and the Vendor
will hold the Owner harmless from any such third party claims as provided in
subsection 14.2.
27.19 Confidentiality. (a) All information, including without limitation
---------------
all oral and written information (including, but not limited to, determinations
or reports by arbitrators or the Third Party Engineer pursuant to the terms of
this Contract), disclosed to the other Party is deemed to be confidential,
restricted and proprietary to the disclosing Party (hereinafter
<PAGE>
98
referred to as "Proprietary Information"). Each Party agrees to use the
Proprietary Information received from the other Party only for the purpose of
this Contract. Except as specified in this Contract, no other rights, and
particularly licenses, to trademarks, inventions, copyrights, patents, or any
other intellectual property rights are implied or granted under this Contract or
by the conveying of Proprietary Information between the Parties. Proprietary
Information supplied is not to be reproduced in any form except as required to
accomplish the intent of, and in accordance with the terms of, this Contract.
The receiving Party must provide the same care to avoid disclosure or
unauthorized use of Proprietary Information as it provides to protect its own
similar proprietary information but in no event will the receiving Party fail to
use reasonable care under the circumstances to avoid disclosure or unauthorized
use of Proprietary Information. All Proprietary Information must be retained by
the receiving Party in a secure place with access limited to only such of the
receiving Party's employees, subcontractors or agents who need to know such
information for purposes of this Contract and to such third parties as the
disclosing Party has consented to by prior written approval. All Proprietary
Information, unless otherwise specified in writing (i) remains the property of
the disclosing Party, (ii) must be used by the receiving Party only for the
purpose for which it was intended, and (iii) such Proprietary Information,
including all copies of such information, must be returned to the disclosing
Party or destroyed after the receiving Party's need for it has expired or upon
request of the disclosing Party, and, in any event, upon termination of this
Contract. At the request of the disclosing Party, the receiving Party will
furnish a certificate of an officer of the receiving Party certifying that
Proprietary Information not returned to disclosing Party has been destroyed.
For the purposes hereof, Proprietary Information does not include information
which:
(i) is published or is otherwise in the public domain
through no fault of the receiving Party at the time of any
claimed disclosure or unauthorized use by the receiving Party;
(ii) prior to disclosure pursuant to this Contract is
properly within the legitimate possession of the receiving Party
as evidenced by reasonable documentation to the extent
applicable;
(iii) subsequent to disclosure pursuant to this Contract
is lawfully received from a third party having rights in the
information without restriction of the third party's right to
disseminate the information and without notice of any restriction
against its further disclosure;
(iv) is independently developed by the receiving Party or
is otherwise received through parties who have not had, either
directly or indirectly, access to or knowledge of such
Proprietary Information;
(v) is transmitted to the receiving Party after the
disclosing Party has received written notice from the receiving
Party after termination or expiration of this Contract that it
does not desire to receive further Proprietary Information;
<PAGE>
99
(vi) is obligated to be produced under order of a
court of competent jurisdiction or other similar requirement of a
Governmental Entity, so long as the Party required to disclose
the information provides the other Party with prior notice of
such order or requirement and its cooperation to the extent
reasonable in preserving its confidentiality; or
(vii) the disclosing Party agrees in writing is free of
such restrictions.
(b) Because damages may be difficult to ascertain, the Parties agree,
without limiting any other rights and remedies specified herein, an injunction
may be sought against the Party who has breached or threatened to breach this
subsection 27.19. Each Party represents and warrants that it has the right to
disclose all Proprietary Information which it has disclosed to the other Party
pursuant to this Contract, and each Party agrees to indemnify and hold harmless
the other from all claims by a third party related to the wrongful disclosure of
such third party's proprietary information. Otherwise, neither Party makes any
representation or warranty, express or implied, with respect to any Proprietary
Information.
27.20 Entirety of Contract; No Oral Change. This Contract and the
------------------------------------
Exhibits and Schedules referenced herein constitute the entire contract between
the Parties with respect to the subject matter hereof, and supersede all
proposals, oral or written, all previous negotiations, and all other
communications between the Parties with respect to the subject matter hereof.
No modifications, alterations or waivers of any provisions herein contained will
be binding on the Parties hereto unless evidenced in writing signed by duly
authorized representatives of both Parties as set forth in subsection 27.1. Any
representations by the Vendor in any RFP response and/or any documentation
otherwise provided to the Owner in connection with the Vendor's solicitation of
the business granted pursuant hereto prior to the execution hereof will also be
deemed to be incorporated into and otherwise made a part of this Contract;
provided that any such information will in no way be deemed to modify the
- - - -------- ----
Specifications unless otherwise specifically mutually agreed by the Parties.
27.21 Successors and Assigns. This Contract will bind and inure to the
----------------------
benefit of the Parties to this Contract, their successors and permitted assigns.
27.22 Change of Control of the Vendor. The Vendor will not consolidate
-------------------------------
with or merge into any other Person or convey, transfer or lease all or
substantially all of its assets to any Person, nor will any Person or group (as
such term is defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) own or acquire fifty percent (50%) of the value of the Vendor's
equity where such Person or group did not own as of the Effective Date in excess
of ten percent (10%) of such equity (any such Person or group will be referred
to as the "Vendor's Succeeding Entity"), unless:
(i) the Vendor's Succeeding Entity will agree to
assume the obligations of the Vendor under this Contract; and
(ii) the Owner will have approved the transaction,
based solely on (i) the creditworthiness of the Vendor's
Succeeding Entity, (ii) whether the
<PAGE>
100
Vendor's Succeeding Entity is a competitor of the Owner and (iii)
whether in the Owner's reasonable judgment the Vendor's
Succeeding Entity will be able to fulfill the obligations for
present and future orders under this Contract.
Notwithstanding the foregoing paragraph, by provision of prior written
notice in accordance with this Contract, the Vendor will have the right, without
further consent of the Owner, to assign the Vendor's rights and delegate the
Vendor's obligations and liabilities under this Contract in whole (but not in
part), to any Person that is, or that was immediately prior to the assignment, a
current or former subsidiary, business unit, division or other affiliate of the
Vendor, provided that such entity is in fact the full successor to the Network
Systems Group (the "Successor") in connection with the transaction effecting
restructure of the Vendor and its affiliates announced on September 20, 1995
(the "AT&T Assignment"). The notice of the AT&T Assignment will state the
effective date of the AT&T Assignment. Upon the effective date of the AT&T
Assignment, the Vendor will be released and discharged from all obligations and
liabilities under this Contract provided that the Successor will have assumed
-------- ----
all obligations and liabilities under this Contract. The AT&T Assignment will
be complete and will not be altered by the termination of the affiliation
between the Vendor and the Successor.
27.23 Change of Control of the Owner. Except as otherwise permitted under
------------------------------
the documents relating to the financing of the build-out of the Nationwide
Network, the Owner will not consolidate with or merge into any other business
entity or convey, transfer or lease all or substantially all of its assets to
any Person, nor will any Person or group (as such term is defined in the
Exchange Act) own or acquire fifty percent (50%) of the value of the Owner's
limited partnership interests or general partnership interests where such Person
or group did not own as of the Effective Date in excess of ten percent (10%) of
either of such partnership interests (any such Person or group will be referred
to as the "Owner's Succeeding Entity"), unless:
(a) the Owner's Succeeding Entity will agree to assume the obligations of
the Owner under this Contract; and
(b) the Vendor will have approved the transaction, based solely on (i) the
creditworthiness of the Owner's Succeeding Entity and (ii) whether the Owner's
Succeeding Entity is a competitor of the Vendor.
27.24 Relationship of the Parties. Pursuant to subsection 27.9, nothing
---------------------------
in this Contract will be deemed to constitute either Party a partner, agent or
legal representative of the other Party, or to create any fiduciary relationship
between the Parties. The Vendor is and will remain an independent contractor in
the performance of this Contract, maintaining complete control of its personnel,
workers, Subcontractors and operations required for performance of the Work.
This Contract will not be construed to create any relationship, contractual or
otherwise, between the Owner and any Subcontractor.
<PAGE>
101
27.25 Discretion. Notwithstanding anything contained herein to the
----------
contrary, to the extent that various provisions of this Contract call for an
exercise of discretion in making decisions or granting approvals or consents,
the Parties will be required to exercise such discretion, decision or approvals
in accordance with accepted PCS industry practices and in good faith.
27.26 Non-Recourse. No past, present or future limited or general partner
------------
in or of the Owner, no parent or other affiliate of any company comprising the
Owner, and no officer, employee, servant, executive, director, agent or
authorized representative of any of them (each, an "Operative") will be liable
by virtue of the direct or indirect ownership interest of such Operative in the
Owner for payments due under this Contract or for the performance of any
obligation, or breach of any representation or warranty made by the Owner
hereunder. The sole recourse of the Vendor for satisfaction of the obligations
of the Owner under this Contract will be against the Owner and the Owner's
assets and not against any Operative or any assets or property of any such
Operative. In the event that a default occurs in connection with such
obligations, no action will be brought against any such Operative by virtue of
its direct or indirect ownership interest in the Owner. The foregoing
provisions of this subsection 27.26 will not in any way limit or restrict any
right or remedy of the Vendor with respect to, and the Operatives will remain
fully liable for, any fraud perpetuated by such Operatives.
27.27 Improvements, Inventions and Innovations. All rights in any
----------------------------------------
improvements, inventions, and innovations made by the Owner will vest in the
Owner, and the Owner and its affiliates will have the right to exploit such
improvements, inventions, and innovations. All rights in any improvements,
inventions and innovations made by the Vendor will vest in the Vendor, and the
Vendor and its affiliates will have the right to exploit such improvements,
inventions and innovations; provided, however, that subject to and in accordance
-------- -------
with subsection 11.9 the Owner and its affiliates may be granted certain rights
to improvements, inventions or innovations made in connection with the System
pursuant to subsection 11.9 by the Vendor (but not by any Subcontractor) in the
course and as a result of performing the Work and in which the Vendor owns or
possesses any proprietary interest (provided that the immediately preceding
-------- ----
proviso of this last sentence of this subsection 27.27 is not subject to
subsection 23.2).
27.28 Attachments and Incorporations. All Schedules and Exhibits attached
------------------------------
hereto, are hereby incorporated by reference herein and made a part of this
Contract with the same force and effect as though set forth in their entirety
herein.
27.29 Conflicts. In the event of any conflict or inconsistency among the
---------
provisions of this Contract and the documents attached hereto and incorporated
herein, such conflict or inconsistency will be resolved by giving precedence to
this Contract and thereafter to the Exhibits, Schedules and Specifications.
27.30 Counterparts. This Contract may be executed by one or more of the
------------
Parties to this Contract on any number of separate counterparts, and all of said
counterparts taken together will be deemed to constitute one and the same
instrument.
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102
THE OWNER AND THE VENDOR HAVE READ THIS CONTRACT INCLUDING ALL SCHEDULES
AND EXHIBITS HERETO AND AGREE TO BE BOUND BY ALL THE TERMS AND CONDITIONS HEREOF
AND THEREOF.
IN WITNESS WHEREOF, the Parties have executed this Contract as of the
date first above written.
AT&T CORP., as the Vendor
By: /s/ Daniel C. Stanzione
-------------------------
Name: Daniel C. Stanzione
Title: President, Network Systems
MAJORCO L.P., as the Owner
By: /s/ Ronald T. LeMay
---------------------
Name: Ronald T. LeMay
Title: Chief Executive Officer
<PAGE>
TABLE OF CONTENTS
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SECTION 1 DEFINITIONS
1.1 Definitions......................................... 1
1.2 Other Definitional Provisions....................... 21
SECTION 2 SCOPE OF WORK, RESPONSIBILITIES AND PROJECT
MILESTONES
2.1 Scope of Work....................................... 22
2.2 Additional Coverage................................. 22
2.3 Handsets............................................ 23
2.4 Initial PCS System.................................. 24
2.5 System Element Verification; Test-bed Laboratory.... 24
2.6 RF Engineering; Site Acquisition and MSC
Installation............................................ 25
2.7 Facilities Preparation Services and Installation.... 27
2.8 Site Acquisition Modifications...................... 27
2.9 Design/System Architecture and Engineering.......... 28
2.10 Certification...................................... 28
2.11 Notice of Developments............................. 28
2.11.1 Vendor Developments.............................. 28
2.11.2 Participation in Testing......................... 29
2.12 Safety............................................. 29
2.13 Emergencies........................................ 30
2.14 Right of Inspection................................ 30
2.15 Transportation..................................... 31
2.16 Security........................................... 31
2.17 Materials and Equipment............................ 31
2.18 Equipment and Data................................. 32
2.19 References to Certain Sources...................... 32
2.20 Operating Manuals.................................. 32
2.21 Maintenance and Instruction Manuals................ 32
2.22 Standards for Manuals.............................. 33
2.23 Training........................................... 33
2.24 Manuals and Training............................... 35
2.25 Spare Parts........................................ 35
2.26 System Support Services............................ 36
2.26.1 Vendor Assistance................................ 36
2.26.2 Trouble Reports.................................. 36
2.26.3 Emergency Technical Assistance ("ETA")........... 37
2.26.4 ETA and CSR...................................... 41
2.27 Supply of Additional Products...................... 41
2.28 Review of Contract................................. 42
2.29 Licenses, Permits and Approvals.................... 42
2.30 Eligibility under Applicable Laws and Applicable
Permits................................................. 42
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2.31 Customs Approvals.. 42
2.32 Owner Participation... 42
2.33 New Development Advisory Board 43
2.34 Market Development Manager 43
2.35 Further Assurances.... 43
2.36 Liens and Other Encumbrances 43
2.37 Forecasting and Ordering 44
2.38 Microwave Relocation; Network Interconnection 45
2.39 Vendor To Inform Itself Fully; Waiver of Defense 45
2.40 CMI/HIC 46
2.41 Site Acquisition Delay Testing 46
SECTION 3 AFFILIATES
3.1 Additional Affiliates.. 47
3.2 Agreements with Initial Affiliates 47
3.3 Agreements with Additional Affiliates 47
3.4 Affiliate Rights....... 48
SECTION 4 SUBCONTRACTORS
4.1 Subcontractors......... 48
4.2 The Vendor's Liability 48
4.3 No Effect of Inconsistent Terms in Subcontracts 48
4.4 Assignability of Subcontracts to Owner 48
4.5 Removal of Subcontractor or Subcontractor's
Personnel.................. 49
4.6 Subcontractor Insurance 49
4.7 Review and Approval not Relief of Vendor Liability 49
4.8 Vendor Warranties...... 49
4.9 Payment of Subcontractors 49
SECTION 5 TERM OF CONTRACT
5.1 Initial Term 50
5.2 Renewal 50
SECTION 6 PRICES AND PAYMENT
6.1 Prices 50
6.2 Price Reduction........ 50
6.3 Payments 51
6.3.1 Additional Products not in Initial System
or Otherwise Provided for in Section 22....
6.4 Payments for Facilities Preparation Services 52
6.5 Monthly Forecasts...... 53
6.6 No Payment in Event of Material Breach 53
6.7 Microwave Relocation Delay Partial Payments 54
6.8 In Revenue Payments.... 54
SECTION 7 ORDERS AND
SCHEDULING
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7.1 Initial Commitment..... 55
7.2 Change Orders.......... 55
7.3 Cancellation 55
SECTION 8 INSTALLATION
8.1 Installation 56
8.2 No Interference........ 56
SECTION 9 ACCEPTANCE TESTING
AND ACCEPTANCE
9.1 Acceptance Testing..... 56
9.2 Costs and Expenses..... 56
9.3 Notification 56
9.4 Presence at Acceptance Tests 56
9.5 Correction of Defects.. 57
9.6 Acceptance Certificate 57
SECTION 10 DISCONTINUED
PRODUCTS
10.1 Notice of Discontinuation 58
10.2 Discontinuation During Warranty Period 58
10.3 Discontinuation After Warranty Period 58
SECTION 11 SOFTWARE;
CONFIDENTIAL INFORMATION
11.1 RTU License........... 59
11.2 Owner's Obligations... 59
11.3 Backwards Compatibility 60
11.4 Transfer and Relocation 60
11.5 Survival 61
11.6 Access to Source Codes 61
11.7 Escrow Agreement...... 61
11.8 Software Maintenance.. 62
11.9 Custom Development.... 62
11.9.1 Request for Custom Material 62
11.9.2 Vendor Response 63
11.9.3 Ownership of Intellectual Property 63
SECTION 12 SOFTWARE CHANGES
12.1 Annual Release Maintenance Fees 63
12.2 Notice 63
12.3 Installation, Testing and Maintenance 63
12.4 Software Fixes........ 64
SECTION 13 EQUIPMENT CHANGES
13.1 Equipment Upgrades.... 64
13.2 Notice 66
13.3 Installation, Testing and Acceptance 66
13.4 Equipment Fixes....... 66
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SECTION 14 INTELLECTUAL
PROPERTY
14.1 Intellectual Property 66
14.2 Infringement.......... 66
14.3 Vendor's Obligation to Cure 67
14.4 Vendor's Obligations.. 68
14.5 License to Use Vendor Patents 68
SECTION 15 DELAY
15.1 Liquidated Damages.... 69
15.2 Interim Delay......... 69
15.3 Completion Delay...... 69
SECTION 16 FORCE MAJEURE
SECTION 17 WARRANTIES
17.1 Product Warranty...... 71
17.2 Services Warranty..... 72
17.3 System Warranty....... 72
17.4 Breach of Warranties.. 73
17.5 Repair and Return..... 75
17.6 Technical Assistance Center 77
17.7 Scope of Warranties... 77
17.8 Expenses 77
17.9 Third Party Warranties 78
17.10 Additional System Element Locations 78
17.11 EXCLUSIVE REMEDIES... 78
SECTION 18 INSURANCE
18.1 Insurance 78
SECTION 19 TAXES
19.1 Taxes 78
SECTION 20 INDEMNIFICATION
AND LIMITATION OF LIABILITY
20.1 Vendor Indemnity...... 79
20.2 LIMITATION ON LIABILITY 80
20.3 Damages for Fraud or Willful Misconduct 80
SECTION 21 REPRESENTATIONS
AND WARRANTIES
21.1 Representations and Warranties of the Vendor 80
21.1.1 Due Organization of the Vendor 80
21.1.2 Due Authorization of the Vendor; Binding
Obligation.............. 80
211.3 Non-Contravention 81
211.4 Regulatory Approvals 81
211.5 Non-Infringement 81
211.6 Scope 81
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21.1.7 Requisite Knowledge 81
21.1.8 Financial Capacity 81
21.2 Representations and Warranties of the Owner 81
21.2.1 Due Organization of the Owner 81
21.2.2 Due Authorization of the Owner; Binding
Obligation.............. 81
21.2.3 Non-Contravention 82
SECTION 22 TITLE AND RISK OF
LOSS
22.1 Title 82
22.2 Risk of Loss.......... 82
SECTION 23 DISPUTE RESOLUTION
23.1 Dispute Resolution.... 83
23.2 Arbitration 83
23.3 Third Party Engineer.. 84
23.4 Other Remedies........ 85
23.5 Tolling 85
SECTION 24 TERMINATION AND
EVENTS OF DEFAULT
24.1 Termination Without Cause 85
24.2 Termination for Cause. 85
24.3 Remedies 87
24.4 Discontinuance of Work 88
24.5 Payments 88
24.6 Costs
24.7 Continuing Obligations 88
24.8 Vendor's Right to Terminate 89
24.9 Special Termination Events 89
SECTION 25 SUSPENSION
25.1 Owner's Right to Suspend Work 91
SECTION 26 MOST FAVORED CUSTOMER
26.1 Most Favored Customer Status 91
SECTION 27 MISCELLANEOUS
27.1 Amendments............ 92
27.2 Owner Liabilities..... 92
27.3 Offset 93
27.4 Assignment............ 93
27.5 Enforcement........... 3
27.6 Notices 3
27.7 Governing Law and Forums 4
27.8 Compliance with Law... 5
27.9 Independent Contractor 5
27.10 Headings 5
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27.11 Severability...... 95
27.12 Waiver 95
27.13 Public Statements and Advertising 95
27.14 Records and Communications 96
27.15 Ownership of Specifications 96
27.16 Financing Parties Requirements 96
27.17 Owner Review, Comment and Approval 97
27.18 Specifications....... 97
27.19 Confidentiality...... 97
27.20 Entirety of Contract; No Oral Change 99
27.21 Successors and Assigns 99
27.22 Change of Control of the Vendor 99
27.23 Change of Control of the Owner 100
27.24 Relationship of the Parties 100
27.25 Discretion 101
27.26 Non-Recourse......... 101
27.27 Improvements, Inventions and Innovations 101
27.28 Attachments and Incorporations 101
27.29 Conflicts 101
27.30 Counterparts......... 101
</TABLE>
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EXHIBITS
<S> <C><C>
Exhibit A1 - Project Milestones
Exhibit A2 - PCS Product Availability
Exhibit B1 - RF Design and Acceptance Process
Exhibit B2 - Acceptance Process for Completion of System Element
Facilities
Exhibit B3 - Validation and Acceptance Testing
Exhibit C - Owner Required Wireless Features and Functions
Exhibit D - System Elements
Exhibit E - Construction Management Criteria
Exhibit F - RF Performance Criteria
Exhibit G - BTS/BSC - MSC Interoperability
Exhibit H - Handsets
Exhibit I - Technology Integration Laboratory Requirements
SCHEDULES
Schedule 1 - Preliminary RF Design
Schedule 2 - Product Prices
Schedule 3 - Services Prices
Schedule 4 - Allocated System Areas
Schedule 5 - Initial Affiliates
Schedule 6 - Insurance Provisions
Schedule 7 - Products
Schedule 8 - Vendor's Repair Facilities
Schedule 9 - Form of Notice to Proceed
Schedule 10 - [Intentionally Omitted]
Schedule 11 - Order Cancellation Charges
Schedule 12A - Spare Parts Requirements
Schedule 12B - Spare Parts Prices
Schedule 13 - AT&T Foreign Subsidiaries and Affiliates
Schedule 14 - Third Party Engineers
Schedule 15 - Independent Auditors
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<PAGE>
Schedule 13
-----------
Foreign Affiliates
Each entity referred to in subsection 2.2 (c) is the Vendor's primary
subsidiary offering PCS Products and Services in the country or territory
involved on the Effective Date, or its successor. As of the Effective Date,
these entities are for Canada, AT&T Canada Inc., and for Mexico, AT&T de Mexico
--------------
SA de CV. This list includes any other foreign or other Vendor affiliate
- - - --------
otherwise designated.
<PAGE>
Schedules 2 and 3
-----------------
[ ]
SCHEDULE 4
Allocated System Areas
----------------------
(AT&T)
City
----
San Francisco
New York
Boston
Portland
Seattle
Pittsburgh
Phoenix
Philadelphia
Buffalo
Detroit
Milwaukee
Denver
Salt Lake
Spokane
including maps of the aforementioned MTAs
<PAGE>
Attached are the Owner's System Area (or MTA) coverage definition maps.
Legend
The highways shown in green are only those highways with an average
daily traffic count of greater than 10,000 vehicles. The darker green
represents an average daily traffic count of greater than 50,000 vehicles.
The census tracts of the System Areas were combined and ranked by demand
density in erlangs (wireless talk time traffic) per square mile for year 10,
based on busy hour (peak daily demand hour) minutes of use estimates. Those
tracts which fall within the top 70% of the population total a national level
are displayed in red. Those tracts which fall within the next 10% of the total
population (70 to 80% at the national level) are displayed in pink.
Initial System Coverage
For contiguous Initial System coverage, the Contract's requirement is to
cover all of the red, pink and green areas within the blue "Arbitron Radio
Market" boundaries. This represents 60% covered population at the national
level for the Initial System.
<PAGE>
Schedule 5
----------
INITIAL AFFILIATES
1. Each of the Partners and their operating subsidiaries.
2. APC and its operating subsidiaries.
3. PhillieCo and its operating subsidiaries.
4. Continental and its operating subsidiaries.
5. TCG and its operating subsidiaries.
6. NewTelCo. and its operating subsidiaries.
<PAGE>
Schedule 11
-----------
Without charge and/or penalty, the Owner may cancel any Order for Products no
later than ninety (90) days prior to the earliest date scheduled for shipment of
such Product; or
If the Owner cancels an Order less than ninety (90) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of ten percent (10%) of the price for such Product as
determined pursuant to the Contract; or
If the Owner cancels an Order less than sixty (60) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of fifteen percent (15%) of the price for such Product as
determined pursuant to the Contract; or
If the Owner cancels an Order less than thirty (30) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of twenty percent (20%) of the price for such Product as
determined pursuant to the Contract.
The Owner may not cancel an Order after the applicable date scheduled for
shipment of such Product. The payment of such charges will be the Vendor's sole
remedy and the Owner's sole obligation for such canceled Order. Any changes
requested by the Owner that involve the return or exchange of Non-Essential
Equipment will be subject to the standard policies of the applicable Non-
Essential Equipment supplier unless such policies are otherwise set out in the
applicable agreement between such Non-essential Equipment supplier and the
Vendor, in which case the Owner will be entitled to cancel any such Order for
Non-essential Equipment in accordance with the terms of such agreement. For the
purposes of this Schedule 11, the term "Order" will not include the Minimum
Commitment or the Initial Commitment.
Nothing herein will be deemed to bar the Vendor's right to invoice the Owner for
all Services actually performed prior to the date of such performance by the
Vendor in respect of such Products in accordance with the provisions of this
Contract.
Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
AMENDMENT NO. 2
TO THE
LUCENT TECHNOLOGIES/SPRINT SPECTRUM
PROCUREMENT AND SERVICES CONTRACT
Dated as of July 15, 1996
<PAGE>
AMENDMENT NO. 2 dated as of July 15, 1996, to the Procurement and Services
Contract dated as of January 31, 1996, between Sprint Spectrum Holding Company,
L.P., a Delaware limited partnership formerly known as MajorCo L.P., a Delaware
limited partnership, as subsequently assigned (pursuant to that certain
Assignment, Assumption and Amendment No. 1 dated June 21, 1996) to Sprint
Spectrum Equipment Company, L.P., a Delaware limited partnership (and as the
successor in interest of Sprint Spectrum, L.P., the "Owner") and Lucent
Technologies Inc., a Delaware corporation, the full successor to the Network
Systems Group of AT&T Corp., a New York corporation (the "Vendor", and together
with the Owner, the "Parties").
RECITALS:
WHEREAS, the Parties are parties to a certain Procurement and Services
Contract dated as of January 31, 1996 (the "Contract") wherein the Owner agreed
to have the Vendor engineer and construct PCS Systems in the System Areas and
the Vendor, itself or through its Subcontractors, agreed to provide Products and
Services to the Owner in connection with the engineering and construction of PCS
Systems in the System Areas pursuant to and in accordance with the terms of the
Contract.
WHEREAS, the Parties desire to amend the Contract to provide, amongst other
things, for the provision, installation, operation and maintenance by the Vendor
to and for the Owner of a stand-alone Service Control Point/Home Location
Register (SCP/HLR), Service Management System (SMS) and Service Creation
Environment (SCE) (as such terms are defined below).
WHEREAS, the Parties further desire to amend the Contract to provide,
amongst other things, for the provision, installation, operation and maintenance
by the Vendor to and for the Owner of certain Application Software Products,
including AS Software, AS Equipment and AS Services (as such terms are defined
below).
NOW THEREFORE, in consideration of the mutual covenants and conditions set
forth herein, the Owner and the Vendor hereby agree as follows:
1. Definitions. Unless otherwise defined herein, all capitalized terms used
in this Amendment will have the meaning given to such terms in the Contract. For
the purposes of the Contract and this Amendment (i) the term "Equipment" as
defined in the Contract will be deemed (to the extent it is not already clear)
to include the SCP/HLRs and any and all equipment associated with or integral to
the SCP/HLRs, the AM/HLRs as well as the AS Equipment to be delivered and
installed by the Vendor pursuant to the SCP/HLR Specifications, the AM/HLR
Specifications and the AS Statement of Work, as applicable, including, but not
limited to, SMS and SCE, as the case may be, and (ii) the term "Software" as
defined in the Contract will be deemed (to the extent it is not already clear)
to include all software with or integral to the SCP/HLRs, the AM/HLR Products
and the AS Software delivered and installed by the Vendor pursuant to the
SCP/HLR Specifications, the AM/HLR Specifications or the AS Statement of Work,
as the case may be.
2. Agreements.
(a) Pursuant to and in accordance with the terms of the Contract as amended
hereby, the Vendor agrees to provide the Owner with; (i) one mated pair of
stand-alone SCP/HLRs with SMS (two SCPs), (ii) one SCE with eight RTUs, (iii)
one AM/HLR (to the extent not already being provided), (iv) compiled servers and
(v) one copy of "Execution Environment" in accordance with the Specifications in
the Owners Test-bed Laboratory no later than the Completion Dates as set forth
in the HLR Statement of Work. In addition, the Vendor agrees to provide the
Owner three (3) other mated pairs of SCP/HLRs for the Nationwide Network in
accordance with the SCP/HLR Specifications at the HLR Designated Switch Sites no
later than the HLR Completion Dates. As an interim solution only, the Vendor
will provide, at its sole cost and expense, AM/HLRs in accordance with the
AM/HLR Specifications at the AM/HLR Designated Switch Sites.
(b) Pursuant to the terms of the Contract as amended hereby, the Vendor
will supply to the Owner AS Products and AS Services for the Owner's Nationwide
Network pursuant to and in accordance with the AS Statement of Work (as defined
below).
(c) The Vendor will use its best efforts to work with Northern Telecom
Inc., a Delaware corporation ("Nortel") and a party to that certain Procurement
and Services Contract dated as of January 31, 1996, between the Owner and Nortel
(the "Nortel Contract") in order to ensure that the AM/HLRs and SCP/HLRs work
with the Equipment and Software (as defined in the Nortel Contract) provided by
Nortel so that in a timely manner the AM/HLRs and SCP/HLRs Products and Services
provide service to the entire Nationwide Network (including, but not limited to,
the Nortel constructed portion of the Nationwide Network) in accordance with the
AM/HLR Specifications and the SCP/HLR Specifications, as applicable. Nothing
stated herein above to the contrary, the Vendor will not be liable for the
failure of any of the AM/HLRs and/or the SCP/HLRs to properly operate with the
Nortel System (as such term is defined in the Nortel Agreement) where such
failure was directly caused by Nortel's failure to provide timely and accurate
specifications or to make its Equipment accessible and to operate with the
AM/HLRs and/or SCP/HLRs in accordance with and pursuant to the Lucent/Nortel
License Agreement.
(d) The Vendor will use its best efforts to work with Nortel in order to
ensure that the AS Products work with the Equipment and Software (as defined in
the Nortel Contract) provided by Nortel so that in a timely manner the AS
Products and Services provide service to the entire Nationwide Network
(including, but not limited to, the Nortel constructed portion of the Nationwide
Network) in accordance with the AS Statement of Work, as applicable. Nothing
stated herein above to the contrary, the Vendor will not be liable for the
failure of any of the AS Products to properly operate with the Nortel System (as
such term is defined in the Nortel Agreement) where such failure was directly
caused by Nortel's failure to provide timely and accurate specifications or to
make its Equipment accessible and to operate with the AS Products in accordance
with and pursuant to the Lucent/Nortel License Agreement-OAM&P.
(e) Commencing on the date hereof, the Vendor will regularly update
(including the provision of at least monthly written updates) the Owner as to
the Vendor's progress in developing and being able to timely deliver the AM/HLRs
and the SCP/HLRs for both the Test-bed Laboratory and the Nationwide Network.
(f) Notwithstanding anything to the contrary in the Contract, Substantial
Completion of any PCS System within the Initial System, and the testing required
therefor, will expressly require and be conditioned upon the successful
integration and inter-operation (in accordance with the AM/HLR Specifications),
of the other Products within any such PCS System with the then existing AM/HLRs
within the Nationwide Network.
(g) Notwithstanding anything to the contrary, the provisions of subsections
2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9(b), 2.10, 2.25, 2.38, 2.40, 2.41, 6.4, 6.5,
6.7, 6.8, and 7.1 and Section 4 are not applicable to AS Products and AS
Services.
(h) The Parties will mutually agree to and incorporate in the Contract an
Appendix K to Amendment No. 2 as to Application Software Products Acceptance
Procedures and Criteria which will work to provide verification for the
requirements set forth in Appendix G by no later than July 24, 1996.
3. Amendment to Subsection 1.1. Subsection 1.1 of the Contract is hereby
amended as follows:
(a) by adding the following definitions:
"Access Manager HLR (AM/HLR)" means Equipment and Software that
provides the call processing logic which comprises the stand-alone HLR
service. The stand-alone service being that service which contains the
PCS subscriber's or group of PCS subscribers' profile data used to
provide call completion and enhanced services as further described in
Appendix A attached to Amendment No. 2.
"Access Manager Specifications (AM/HLR Specifications)" means the
Access Manager Specifications set forth in Appendix A attached to
Amendment No. 2.
"Adaptations" means any derivative work based on service package
application licensed Software including (i) any work incorporating any
of service package application licensed Software directly, (ii) any
work incorporating any computer program from service package
application licensed Software rewritten in a different computer
language or converted to operate on a different type of CPU, (iii) any
work utilizing a method or concept from service package application
licensed Software that the Owner is obligated to keep in confidence
hereunder or (iv) any work otherwise covered by any of the Vendor's
intellectual property rights in service package application licensed
Software.
"Amendment No. 2" means this Amendment No. 2 to the Contract.
"AS Acceptance Date" means the date or dates on which the AS Products
successfully complete the AS Functional Acceptance Tests or the AS
Final Acceptance Tests, as the case may be.
"AS Acceptance Test(s)" means the collective reference to the AS
Functional Acceptance Tests and the AS Final Acceptance Tests.
"AS Acceptance Test Period" means the applicable period of time in
days that the Vendor has to test and the Owner has to accept certain
AS Products as specified in the AS Statement of Work.
"AS Completion Dates" means the dates and milestones as set forth in
Appendix G that are required to be met by the Vendor for the
successful and timely completion of the AS Statement of Work in
accordance with the AS Statement of Work.
"AS Equipment" means certain third party manufactured or other
Equipment provided to the Owner by the Vendor as necessary for the
operation and integration of the AS Software and the AS Services
pursuant to and in accordance with the AS Statement of Work.
"AS Functional Acceptance" means the Owner's initial acceptance of AS
Products and Services, and, to the extent applicable, the installation
thereof, pursuant to and in accordance with the AS Functional
Acceptance Tests set forth in Appendix K to Amendment No. 2.
"AS Final Acceptance" means the Owner's final acceptance of the
relevant AS Products and installation thereof, pursuant to and in
accordance with the AS Final Acceptance Tests set forth in Appendix K
to Amendment No. 2; provided that in no event can AS Final Acceptance
occur with respect to AS Software and/or AS Services prior to thirty
(30) days after the completion of AS Functional Acceptance Testing.
"AS Functional Acceptance Test" and "AS Functional Acceptance Testing"
means the initial functional tests performed pursuant to and in
accordance with Appendix K to Amendment No. 2.
"AS Final Acceptance Tests" and "AS Final Acceptance Testing" means
the AS Product final acceptance testing as set forth in Appendix K to
Amendment No. 2.
"AS Maintenance and Instruction Manuals" has the meaning ascribed
thereto in subsection 2.22.
"AS/OAM&P Statement of Work" or "AS Statement of Work" means the scope
of work to be performed by the Vendor in accordance with the AS
Statement of Work as set forth in Appendix G to Amendment No. 2.
"AS Operating Manuals" has the meaning ascribed thereto in subsection
2.20.1.
"AS Price" means the aggregate price set forth in Appendix I to
Amendment No. 2 for all of the AS Products and AS Services to be
provided under the Contract and described in the AS Statement of Work.
"AS Products" means the collective reference to AS Software and AS
Equipment.
"AS Product Warranty Period" has the meaning ascribed thereto in
subsection 17.1.1. "AS Services" means those OAM&P Services
(including, but not limited to, Optional AS Services) provided by the
Vendor as part of the provision, installation and continuing operation
and maintenance of the AS Products pursuant to and in accordance with
the AS Statement of Work.
"Application Software ("AS")" or "AS Software," means the software
used for operations and maintenance support as part of the Vendor
provided AS Products and Services described in Appendix G to Amendment
No. 2.
"AS/T&M" means AS Services time and material pricing as set forth in
Appendix I to Amendment No. 2 describing the quantity of hours and
involved and material expenses related to a specific AS Statement of
Work requirement which is done in accordance with and pursuant to the
AS Statement of Work; provided that AS/T&M charges will only be
charged (to the extent applicable) by the Vendor for AS Services
(other than Optional AS Services requested by the Owner in accordance
with Appendix G to Amendment No. 2) requested by the Owner for
performance by the Vendor of applicable AS Services after three (3)
years from the date of Amendment No. 2 to the Contract.
"Computer Program" means any Source-Code or object-code instruction or
group of such instructions for controlling the operation of a CPU.
"Contract Cover Damages" has the meaning ascribed thereto in
subsection 15.4.
"CPU" means a central processing unit.
"Designated Processor" has the meaning of the AS Product for which the
"RTU" License specified in subsection 11.1 is granted.
"Field Acceptance" means the Owner's initial acceptance of SCP/HLR
Products and the installation thereof, pursuant to and in accordance
with the Field Acceptance Tests set forth in Appendix E to Amendment
No. 2.
"Field Acceptance Tests" and "Field Acceptance Testing" means the
SCP/HLR field acceptance testing as set forth in Appendix E to
Amendment No. 2.
"Firmware" means a combination of (i) Equipment and (ii) Software
represented by a pattern of bits contained in such Equipment.
"HLR Completion Dates" means the dates and milestones as set forth in
Appendix E to Amendment No. 2 that are required to be met by the
Vendor for the successful and timely completion of the HLR Statement
of Work.
"HLR Designated Switch Sites" means the Switch Sites within the
Nationwide Network in which the Owner requires the installation of
AM/HLRs within the Denver, Kansas City and Philadelphia System Areas
and the installation of SCP/HLRs within the San Francisco, New York,
Dallas, Denver, Kansas City and Philadelphia System Areas.
"HLR Final Acceptance" means the Owner's final acceptance of SCP/HLR
Products and the installation thereof, pursuant to and in accordance
with the HLR Final Acceptance Tests set forth in Appendix E to
Amendment No. 2; provided that in no event can HLR Final Acceptance
occur with respect to any SCP/HLR Product prior to thirty (30) days
after the completion of Field Acceptance Testing for such SCP/HLR
Product(s).
"HLR Final Acceptance Tests" and "HLR Final Acceptance Testing" means
the SCP/HLR final acceptance testing as set forth in Appendix E to
Amendment No. 2.
"HLR Statement of Work" means the statement of work applicable to the
AM/HLRs and the SCP/HLRs as set forth in Appendix E to Amendment No.
2.
"Lucent/Nortel License Agreement" means the Interface License
Agreement between the Vendor and Nortel dated as of June 14, 1996
attached as Appendix D1 to Amendment No. 2.
"Lucent/Nortel License Agreement-OAM&P" means the OAM&P Interface
License Agreement between the Vendor and Nortel dated as of July __,
1996 attached as Appendix D2 to Amendment No. 2.
"Nortel" has the meaning ascribed thereto in Paragraph 2(c) of
Amendment No. 2.
"Nortel Contract" has the meaning ascribed thereto in Paragraph 2(c)
of Amendment No. 2.
"OAM&P" means Operations Administration Maintenance & Provisioning as
described in Appendix G to Amendment No. 2.
"Optional AS Services" means those AS services classified as optional,
as set forth in Appendix G to Amendment No. 2, which are only provided
to the Owner upon the request of the Owner.
"SCE" means the Service Creation Environment Equipment and Software as
further described in Appendix B to Amendment No. 2.
"SCP/HLR" means the Equipment and Software that provides the call
processing logic which comprises the stand-alone HLR service which
contains the PCS subscriber's or group of PCS subscriber's profile
data used to provide call completion and enhanced services and further
described in Appendix B to Amendment No. 2.
"SCP/HLR Hardware" means SCP/HLR equipment and platform software as
set forth in Appendix B to Amendment No. 2.
"SCP/HLR Price" means the aggregate price for all of the SCP/HLRs as
set forth on Appendix F to Amendment No. 2.
"SCP/HLR Products" means the collective reference to SCP/HLR Hardware,
and SCP/HLR Software, SMSs, SCEs and RTUs.
"SCP/HLR Specifications" means the SCP/HLR specifications as set forth
in Appendix B to Amendment No. 2 and including, but not limited to,
the SCE and the SMS.
"SCP/HLR Software" means the SCP/HLR Software as more fully described
in Appendix B to Amendment No. 2.
"SMS" means the Service Management System Equipment and Software as
further described in Appendix B to Amendment No. 2.
(b) by deleting the definition of "PCS Products" as such definition is set
forth in the Contract and replacing it in its entirety with the following
definition:
"'PCS Products' means the Vendor's PCS Equipment and Software, as
offered from time to time in the Customer Price Guide; provided that
for the purposes of this Contract, PCS Products will always (subject
to subsection 10.1) include at least (i) the SCP/HLRs, (ii) the
SCP/HLR Products, (iii) the AM/HLRs (to the extent not already PCS
Products), (iv) SMS, (v) SCE, (vi) the AS Products and (vii) those
other Items listed on the Vendor's Customer Price Guide as of the
Effective Date. As the context requires and notwithstanding the above,
the term PCS Products includes all Vendor manufactured Products
provided to the Owner in connection with its obligations pursuant to
the terms of this Contract, but excludes Items furnished solely as
part of Facilities Preparation Services not otherwise integral to the
operation or maintenance of the PCS Items set forth on the Customer
Price Guide, including Non-Essential Equipment." and
(c) by deleting the definition of "Specifications" as such definition is
set forth in the Contract and replacing it in its entirety with the following
definition:
"'Specifications' means the collective reference to the
specifications and performance standards of the design, Facilities
Preparation Services, Engineering, Products, Installation and Services
contemplated by this Contract and includes any Expansions, amendments,
modifications and/or other revisions thereto made in accordance with
the terms of this Contract and as more fully set forth in Exhibits C,
D, E and F and the AM/HLR Specifications, the SCP/HLR Specifications,
the HLR Statement of Work, the AS Statement of Work or as otherwise
determined hereunder pursuant to the terms of this Contract; provided
that, except as otherwise provided in or determined pursuant to this
Contract or as otherwise mutually agreed between the Parties, the
applicable Specifications for an Item will be the Vendor's or other
manufacturer's standard technical specifications for such Item, as
applicable, unless the Owner will have specifically not agreed with
such Vendor or other manufacturer specification; and provided further,
that with respect to Facilities Preparation Services, design,
engineering, Products, Installation and Services for which
specifications and performance standards are not provided and listed
in such Exhibits (such Exhibits including, but not limited to, the
AM/HLR Specifications, SCP/HLR Specifications, the HLR Statement of
Work and the AS Statement of Work), "Specifications" references to
performance, functionality and fitness for the intended purpose in
which such design, Facilities, Preparation Services, Engineering,
Products, Installation and Services are employed."
4. Amendment to Subsection 2.2. Subsection 2.2 is hereby amended to add the
following subsection 2.2.1 after subsection 2.2:
"2.2.1 AS Products and AS Services Additional Coverage. Where the
Owner wishes to purchase AS Products or AS Services for use and/or
application in a country outside the United States but within North
America including any territory of the United States not otherwise
covered by the definition of the "United States" as set forth herein,
the Owner and the Vendor will, in good faith, negotiate a separate
agreement for such purchase upon substantially all of the same terms
as those set forth in this Contract, with only such modifications as
may reasonably be appropriate to reflect the international nature of
such transaction and to assure protection of the Vendor's intellectual
property applicable to such AS Products and AS Services."
5. Amendment to Subsection 2.5. Subsection 2.5 is hereby amended to add the
following subsection 2.5(c) after subsection 2.5(b):
"(c) The Vendor will supply (and Exhibit I will be deemed to include),
at no cost to the Owner, (i) one mated pair SCP/HLRs with one SMS,
(ii) one SCE with eight RTU's, (iii) one AM/HLR, (iv) one source code
compiler and (v) one copy of "Execution Environment" all in accordance
with and pursuant to the Specifications for the Test-bed /Laboratory
no later than the dates specified in the HLR Statement of Work. All
provisions of subsections 2.5(a) and 2.5(b) above will apply similarly
to the Products listed in clauses (i) through (v) provided by the
Vendor pursuant to this subsection 2.5(c). Nothing in this subsection
2.5(c) will be deemed to release or accelerate the Project Milestones
and/or delivery requirements set forth in subsections 2.5(a) and
2.5(b) above."
6. Amendment to Subsection 2.20. Subsection 2.20 is hereby is amended to
add the following subsection 2.20.1 after subsection 2.20:
"2.20.1 AS Products and Services Operating Manuals. The Vendor will
provide the Owner operating and instruction manuals for the AS
Products and AS Services (the "AS Operating Manuals") in accordance
with this subsection as soon as they are reasonably available but in
no event later than the dates and times as set forth in Appendix G to
Amendment No. 2. The Vendor will provide the Owner with the quantity
of AS Operating Manuals as set forth in the AS Statement of Work. The
AS Operating Manuals will be prepared in accordance with the AS
Statement of Work and in sufficient detail to accurately describe the
operations and instructions for the AS Products and all of its
component parts and will recommend procedures for operation and
maintenance."
7. Amendment to Subsection 2.22. Subsection 2.22 is hereby amended to add
the following paragraph after the last unnumbered paragraph in subsection 2.22:
"In addition to, and without limiting the requirements set forth in
clauses (a) through (d) of this subsection 2.22, the AS Operating
Manuals for the AS Products and Services will be submitted to the
Owner in hard-copy volume format if so requested by the Owner. In
addition to any of the Owner's other rights and remedies, the Owner
will have the right to reject such AS Operating Manuals if in its
reasonable judgment any of them do not meet the standards set forth in
this Contract."
8. Amendment to Subsection 2.23. Subsection 2.23 is hereby amended as
follows:
(a) by deleting the text of subsection 2.23 immediately preceding clause
(a) and substituting in lieu thereof the following:
"2.23 Training. As more fully described below, starting at least one
hundred and eighty (180) days prior to the Substantial Completion of
the Initial PCS System, the Vendor must provide to the Owner a
practical and participatory and, where feasible, on-site training
program with respect to the System, which program will include
technical education (collectively, the "Training"). The Vendor will
provide, upon the Owner's prior written request and at the time or
times mutually agreed in good faith by the Owner during the Initial
Term of this Contract, (i) not less than a minimum of twelve thousand
fifty (12,050) man days of Training and Training materials for the
Owner's personnel, at no cost to the Owner plus (ii) an additional one
thousand (1,000) man days of Training at no cost to the Owner for the
SCP/HLRs and/or AM/HLRs; provided that the Vendor will be required to
commence provision of SCP/HLR training no later than October 1, 1996.
The Owner will be responsible for the travel and living expenses of
personnel receiving Training. Such Training must be kept current to
encompass the latest Software and Equipment, or any other Software
Revision level and/or Equipment Revision Level directed by the Owner
pursuant to the terms of this Contract. Subject to the foregoing,
Training course size, content and material will be designed and agreed
to by mutual consent between the Parties. The Vendor will conduct
classes for the subjects described below:" and
(b) by inserting the following clauses (vii) and (viii) after clause (vi)
of subsection 2.23 (b) and renumbering the following clauses accordingly:
"(vii) Stand-alone SCP/HLR operations;
(viii) OAM&P and AS Products operations;"
9. Amendment to Subsection 6.1. Subsection 6.1 is hereby amended to add the
following sentence to the end of subsection 6.1 as such subsection is identified
in the Contract:
"Notwithstanding the foregoing, the aforesaid credits may not be
applied to the purchase of any SCP/HLRs and/or any AS Products or
Services."
10. Amendment to Subsection 6.3.to Subsection 6.3
(a) Subsection 6.3 is hereby amended by deleting the first sentence of such
subsection and replacing in lieu thereof the following:
"Except with respect to Facilities Preparation Services, RF
Engineering, SCP/HLR Products and AS Products and Services as set
forth below, an invoice may be submitted to the Owner only after
shipment of a Product or performance of a Service." and
(b) Clause (c) of subsection 6.3 is hereby amended by adding immediately
prior to the semicolon at the end of such clause (c) the following:
"; provided that the Owner will not be obligated to make any such
Final Acceptance payment to the Vendor for the Initial PCS System
only, until and unless the SCP/HLRs to be delivered and installed in
accordance with the SCP/HLR Specifications are so delivered and
installed and operating in accordance with such SCP/HLR
Specifications."
(c) Subsection 6.3 is hereby amended by inserting the following subsections
6.3.2 and 6.3.3:
"6.3.2 SCP/HLR Payments. Notwithstanding anything contained in this
Section 6 to the contrary, any invoice for SCP/HLR Products delivered
and/or installed by the Vendor will be payable as follows: (a) (i)
[_______________] of the amount of any invoice for SCP/HLR Hardware
will be payable within [_______________] following the installation by
the Vendor of such SCP/HLR Hardware at the appropriate HLR Designated
Switch Sites, (ii) [_______________] of the amount of any invoice for
SCP/HLR Hardware will be payable within [______________] following the
Owner's Field Acceptance of such installed SCP/HLR Hardware in
accordance with the SCP/HLR Specifications and (iii) the remaining
[_______________] of the amount of any invoice for SCP/HLR Hardware
will be payable within [_______________] of the Owner's Final
Acceptance of such installed SCP/HLR Hardware in accordance with the
SCP/HLR Specifications; and (b) (i) [_______________] of the amount of
any invoice for SCP/HLR Software will be payable within
[_______________] of the Owner's Field Acceptance in accordance with
the SCP/HLR Specifications and (ii) the remaining [__________________]
of the amount of any invoice for SCP/HLR Software will be payable
within [_______________] of the Owner's HLR Final Acceptance in
accordance with the SCP/HLR Specifications.
6.3.3. AS Products Payments. (a) Notwithstanding anything contained in
this Section 6 to the contrary, any invoice for AS Software delivered
and/or installed by the Vendor will be payable by the Owner as
follows: (i) [___________________] of the total price for any AS
Software order for such AS Software will be payable within
[______________] of the order placement for such AS Software by the
Owner, (ii) [_________________] of the amount of any invoice for
ordered AS Software will be payable within [______________] of the
time of delivery by the Vendor of such AS Software, (iii)
[________________] of the amount of any invoice for ordered AS
Software will be payable within [______________] of AS Functional
Acceptance of such AS Software, and (iv) the remaining
[________________] of the amount of any invoice for ordered AS
Software will be payable within [_______________] of AS Final
Acceptance of such AS Software.
(b) The Vendor may invoice the Owner for [_______________] of the
passed-through cost (without mark-ups, add-ons or charges of any kind
(except as explicitly provided in Appendix I)) of any third party
manufactured AS Equipment supplied by the Vendor for the AS Software
for the AS Software System in accordance with the AS Statement of Work
and the Owner will be required to pay any such invoice for third-party
AS Equipment within [_______________] of the Owner's receipt and
reasonable acceptance thereof. The Vendor may invoice the Owner for AS
Services (if applicable) pursuant to the first sentence of subsection
6.3.1 of the Contract. AS Software Annual Maintenance Services will be
provided by the Vendor pursuant to the Annual Application Software
Maintenance Services Fees as set forth on Appendix I to Amendment No.
2 and such fees will be invoiced to the Owner with the Annual Software
Release Maintenance Fees in accordance with the terms of the
Contract."
11. Amendment to Section 9. Section 9 is hereby amended by inserting the
following subsection 9.7 after subsection 9.6:
"9.7 AS Acceptance Testing and Acceptance. (a) After installation of
AS Software, or any part thereof as set forth in Appendix K to
Amendment No. 2, the Owner will carry out Functional Acceptance Tests
in accordance with the provisions of Appendix K to Amendment No. 2,
testing the compliance of the AS Software with the AS Statement of
Work. The Owner will start the AS Functional Acceptance Tests no later
than seven (7) days after installation of such AS Software and
complete the AS Functional Acceptance Tests no later than fourteen
(14) days after installation of such AS Software.
(b) After the AS Software has successfully passed the Functional
Acceptance Tests, the Owner will commence the AS Final Acceptance Test
in accordance with the provisions of Appendix K to Amendment No. 2.
The duration of the AS Final Acceptance Test shall be thirty (30) days
after successful completion of the AS Functional Acceptance Test.
(c) If the Owner fails to complete either the AS Functional Acceptance
Tests or the Final Acceptance Test within the time periods set forth
in subsections 9.7(a) and 9.7(b), the AS Software shall be deemed to
have met the Acceptance Test criteria on the last day of the time
period allotted for the applicable AS Acceptance Test.
(d) The costs and expenses of the AS Acceptance Tests will be borne by
the Owner. Upon request of the Owner, the Vendor will provide
reasonable support to the Owner during the AS Functional Acceptance
Tests and the AS Final Acceptance Tests.
(e) If the AS Acceptance Tests show that any of the AS Software
complies with the AS Statement of Work, such AS Software will be
accepted by the Owner by confirming the results in a written report.
(f) If any AS Acceptance Test is not satisfied, the Owner will (i) in
writing, notify the Vendor of such failure, and (ii) the Vendor will
promptly correct whatever Defects or Deficiencies caused such AS
Acceptance Test not to be satisfied. After such correction, the Vendor
must (i) repeat at its sole cost and expense the failed AS Acceptance
Tests and as many other AS Acceptance Tests as are necessary to ensure
in the reasonable opinion of the Owner that such correction made by
the Vendor would not have affected the outcome of such other AS
Acceptance Tests, and (ii) in writing, notify the Owner as to what
correction was made and what AS Acceptance Tests were repeated.
Nothing stated herein to the contrary will in any way limit the
Owner's right to liquidated damages pursuant to subsection 15.8 or
other remedies under this Contract in the event the Vendor fails to
deliver AS Products in accordance with the requirements of Appendix G
to Amendment No. 2 on the dates originally scheduled for such
deliveries.
(g) Minor Defects and shortcomings not affecting the operational use
of any part of the AS Software shall not give rise to withholding the
acceptance provided that the Vendor undertakes to remedy such Defects
and shortcomings as soon as reasonably possible, pursuant to the
procedures described in Appendix K to Amendment No. 2."
12. Amendment to Section 12. Section 12 is hereby amended by inserting the
following subsections 12.5 and 12.6 after subsection 12.4.:
"12.5 Right to Modify SCP/HLR Software. The Vendor grants to the Owner
a personal, non-transferable, non-exclusive and royalty-free license
to modify the following component layers of the SCP/HLR Software
provided under this Amendment No. 2 to run on the SCP/HLR Hardware,
solely for use by the Owner in its business of providing
telecommunications services (the names for the component layers set
forth below being used in conformity with the conventions displayed on
the graphic element of Appendix B to Amendment No. 2):
(i) Service Customization Layer
(ii) Application Oriented Layer
(iii) Capability Creation Layer
(iv) Platform Enhancement Layer
Such right to modify includes the right for the Owner, its
employees, and agents to modify and copy the Source Code of the
above named component layers (including, but not limited to,
access to the "SCP Action Execution Library" (including IS41 Rev.
B and IS41 Rev. C)) of the SCP/HLR Software provided solely for
the purposes of maintaining and enhancing or supplementing the
object code versions of such provided Software. The Owner agrees
to use the modifications to Licensed Software made in the
exercise of the license granted in this subsection 12.5 in
accordance with its licensed rights in the SCP/HLR Software
hereunder, except as otherwise provided in this subsection 12.5.
The license to modify set forth in this subsection 12.5 will be
royalty-free and without fee with respect to code implementing
features or capabilities provided within the above-enumerated
layers of releases or versions of the Software which are provided
by the Vendor in accordance with or pursuant to the Annual
Maintenance Fee.
Intellectual property rights in modifications to the SCP/HLR
Software by the Owner, its employers or agents for hire in the
exercise of a right of modification granted in this subsection
12.5 will vest in the Owner, subject to the Vendor's intellectual
property rights in the Vendor's proprietary "SLL" programming
language and compiler and in the Vendor's unmodified SCP/HLR
Licensed Software. The unmodified Computer Programs provided by
the Vendor, including, but not limited to, the SCP/HLR Software,
will remain the intellectual property of the Vendor; and nothing
in this subsection 12.5 will be deemed to confer upon the Owner
ownership in any aspect of the unmodified SCP/HLR Software. Nor
will anything herein be deemed to confer upon the Owner any right
to license or sublicense use of the unmodified SCP/HLR Software,
or any part thereof, to third persons. The Vendor will be
entitled to license any right to use and to sublicense
modifications made by or for the Owner on terms mutually agreed
between the Owner and the Vendor, unless the Owner unilaterally
designates, in writing, a specific modification or modifications
to be restricted from such licensing for a specific period of
time.
The Vendor agrees to provide the Owner Software tools,
documentation, services and training requested by the Owner which
is reasonably necessary to the exercise of the Owner's rights of
modification granted in this subsection 12.5, upon mutually
agreed prices, terms and conditions. The Vendor will endeavor in
subsequent Software Upgrades, Software Enhancements, Combined
Releases and other versions of its SCP/HLR Software to
accommodate the Owner's need to preserve compatibility between
the Owner's modifications and such Vendor-provided programs.
Nothing contained in this subsection 12.5 to the contrary
authorizes the Owner to engage any entity or person as an agent
for hire to modify the Vendor's SCP/HLR Software which entity or
person (i) is substantially and directly engaged in competition
with the Vendor in manufacturing or developing PCS systems; or
(ii) does not agree in writing to recognize and respect the
Vendor's intellectual property rights in such Licensed Software
(including, but not limited to, the Vendor's rights stated
herein) and to maintain the secrecy of information proprietary to
the Vendor regarding the structure and contents of the Vendor's
computer programs upon terms comparable to the Owner's
undertakings to maintain the confidentiality of the Vendor's
Proprietary Information."
12.6 Right to Modify AS Software. The Owner may add to, delete
from, or modify AS Software modules or menus, if available from
the Vendor. Such changes or modifications, however extensive
shall not affect the Vendor's title to the AS Software."
13. Amendment to Section 15. Section 15 of the Contract is hereby amended
by inserting the following subsections 15.4, 15.5, 15.6, 15.7 and 15.8 after
subsection 15.3:
"15.4 SCP/HLR Delay. (a) Failure of the Vendor to properly
deliver, install and test any of the SCP/HLR Products at the then
existing HLR Designated Switch Sites in accordance with the
SCP/HLR Specifications and the milestones set forth therein
applicable to SCP/HLR Products by the HLR Completion Dates will
result in the Vendor being liable to pay to the Owner contract
cover damages (the "Contract Cover Damages") equal to any and all
reasonable and actual increased costs or expenses including, but
not limited to, increased costs or expenses associated with
network modifications, extra equipment, software or training or
re-engineering incurred by the Owner due to the Vendor's failure
to deliver, install and test the SCP/HLR Products by the HLR
Completion Dates in accordance with SCP/HLR Specifications and
the HLR Statement of Work.
15.5 AM/HLR Interim Solution. In order to meet the Owner's
projected service date the Vendor will provide to the Owner, at
the Vendor's own sole cost and expense, and at the Owner's then
existing HLR Designated Switch Sites, AM/HLRs pursuant to and in
accordance with the AM/HLR Specifications and the HLR Statement
of Work as an interim solution so that the Nationwide Network may
operate in accordance with the Specifications; provided that the
Vendor will continue to use its best efforts, at its sole cost
and expense (but with all reasonable cooperation from the Owner),
to replace such interim AM/HLR solution with a comprehensive
SCP/HLR system in accordance with the SCP/HLR Specifications and
the HLR Statement of Work.
15.6 AM/HLR Redeployment. After acceptance of the SCP/HLRs, the
Owner will, at the Owner's sole discretion, have the Vendor
redeploy the AM/HLRs as Access Managers to other sites within the
System at the Vendor's sole cost and expense for any and all
costs associated with such redeployment, including removal,
transportation, and delivery but not installation or the cost of
such Access Manager; provided that if the Access Manager is not
moved to another location but redeployed in the same location in
a separate function or for a separate MSC, the Owner will only be
liable for the cost of the Access Manager and the Vendor will be
responsible for all other costs. All payments, if any, for
redeployed AM/HLRs will be made by the Owner pursuant to
subsection 6.3(a)-(d); provided that in the event that any such
redeployment is to a PCS System which has already achieved
Substantial Completion then the payment terms of subsection 6.3.1
will apply.
15.7 SCP/HLR Delay Termination. If after thirty (30) days after
the HLR Completion Dates the Vendor is still unable to
satisfactorily complete the Final Acceptance Tests applicable to
the SCP/HLRs and/or any of the SCP/HLR Products to be delivered
in accordance with the terms of this Contract (including, but not
limited to, the SCP/HLR Specifications) the Owner will have the
right (in addition to any rights under subsection 15.4 above),
but not the obligation, to terminate the Contract only with
respect to the SCP/HLR Products and will have the right to seek
from the Vendor reimbursement for any of its reasonable and
actual increased costs associated with acquiring reasonable
replacement SCP/HLR Products from a third-party supplier. The
remedies set forth in subsections 15.4, 15.5 and 15.7 will be the
Owner's sole and exclusive remedies in the event the Owner
chooses to terminate the delivery of SCP/HLR Products pursuant to
the terms of this subsection 15.7.
15.8 AS Software Delay. With respect to the AS Products and
Services, in the event the Vendor fails to deliver any such AS
Statement of Work compliant AS Products and/or AS Services within
seven (7) days (except as provided below, the "AS Delay Grace
Period") of the applicable dates for delivery set forth in
Appendix G to Amendment No. 2, the Vendor will (to the extent the
Owner will not have cancelled the applicable order therefor
pursuant to the terms of the Contract) credit to the Owner (in
the form of purchase credits for any Vendor Products including,
but not limited to, AS Products) as liquidated damages for such
late performance for each of the first [_______________] beyond
such AS Delay Grace Period, an amount equal to [________________]
per day (for such [________________] period) of the total price
of such undelivered or unsatisfactory AS Products or AS Services;
provided that upon the timely AS Functional Acceptance (on the
dates originally scheduled for such AS Functional Acceptance) of
any such AS Products and/or AS Services, any delay penalties
accrued therefor shall be forgiven; and provided further for AS
Software "release 0.1" (as defined in Appendix G) the AS Delay
Grace Period will be [____________] from the delivery dates set
forth in Appendix G for the delivery of such AS Software release
0.1."
14. Amendment to Subsection 17.1. Subsection 17.1 is hereby amended to add
the following subsection 17.1.1 after subsection 17.1:
"17.1.1 AS Products Warranty. Notwithstanding anything stated
herein to the contrary, for the AS Products provided hereunder,
the Vendor warrants that, from the date of AS Final Acceptance of
the installation and Engineering thereof, the AS Products will
materially conform with and perform the functions set forth in
the AS Statement of Work, to the extent applicable, and will be
free from Defects and Deficiencies for a warranty period (each as
applicable, an "AS Product Warranty Period") of (i) in the case
of AS Software, ninety (90) days and (ii) in the case of AS
Equipment, one (1) year. In the case of AS Software, the AS
Product Warranty Period applicable to any such AS Software will
be automatically extended for a new ninety (90) day period
commencing on the date of the completion of any applicable
Software Upgrade and/or Software Enhancement upon, and
simultaneous with, any Software Upgrade and/or Software
Enhancement issued pursuant to the terms of Section 12. To the
extent the Owner orders additional AS Products not otherwise
covered pursuant to Appendix G to Amendment No. 2 from the Vendor
in accordance with the terms of this Contract, any such AS
Products so ordered by the Owner and delivered and installed by
the Vendor or its Subcontractors will be warranted to the same
extent as set forth above, from the earlier of (i) the date the
Owner puts such additional AS Products into In Revenue Service,
(ii) the date of the Owner's acceptance of such additional AS
Products and (iii) thirty (30) days after the Vendor completes
the installation of such additional AS Products."
15. Amendment to Subsection 17.7. Subsection 17.7 is hereby amended by
deleting the "or" at the end of clause or subsection 17.7.5, and placing an "or"
at the very end of clause or subsection 17.7.6 and by inserting the following
new clause or subsection 17.7.7:
"17.7.7 Owner modifications to SCP/HLR Software (including the
Platform Software in SCP/HLR Hardware) done pursuant to
subsection 12.5 and/or Owner modifications to AS Software done
pursuant to subsection 12.6."
16. Amendment to Subsection 20.2. Subsection 20.2 is hereby amended by
adding in the second line thereof after "15.3," and before "17.4," "15.4, 15.5,
15.6, 15.7, 15.8".
17. Amendment to Subsection 22.2. Subsection 22.2 is hereby amended by
adding subsection 22.3 after subsection 22.2:
"22.3 AS Products Risk of Loss. Risk of loss as to AS Products
will pass to the Owner upon the delivery to the Owner's
designated location."
18. Cross References. All references in the Contract to Section and
subsection numbers of the Contract will be amended accordingly to reflect the
changes made by this Amendment.
19. NO OTHER AMENDMENTS. EXCEPT AS EXPRESSLY AMENDED, MODIFIED AND
SUPPLEMENTED HEREBY, THE PROVISIONS OF THE CONTRACT ARE AND WILL REMAIN IN FULL
FORCE AND EFFECT AND NOTHING IN THIS AMENDMENT NO. 2 WILL BE CONSTRUED AS A
WAIVER OF ANY OF THE RIGHTS OR OBLIGATIONS OF THE PARTIES UNDER THE CONTRACT.
20. Governing Law. This Amendment No. 2 will be construed in accordance
with and governed by the laws of the State of Missouri without regards to the
laws and principles thereof which would direct the application of the laws of
another jurisdiction.
21. Descriptive Headings. Descriptive headings are for convenience only and
will not control or affect the meaning or construction of any provisions of this
Amendment No. 2.
22. Counterparts. This Amendment No. 2 may be executed in any number of
identical counterparts, each of which will constitute an original but all of
which when taken together will constitute but one contract.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be signed by their duly authorized representatives on the date
first above written.
SPRINT SPECTRUM EQUIPMENT COMPANY, L.P.,
as the Owner
By: /s/ Arthur A. Kurtze
Name: Arthur A. Kurtze
Title: Chief Operating Officer
LUCENT TECHNOLOGIES INC.,
as the Vendor
By: /s/ James P. Goodman
Name: James P. Goodman
Title: Sales Vice President
<PAGE>
APPENDIX A
AM/HLR Description and Specifications
<PAGE>
APPENDIX B
SCP/HLR Description and Specifications
<PAGE>
APPENDIX C
[Intentionally Omitted]
<PAGE>
APPENDIX D1
Lucent/Nortel License Agreement-HLR
<PAGE>
APPENDIX D2
Lucent/Nortel License Agreement-OAM&P
<PAGE>
APPENDIX E
HLR Statement of Work
<PAGE>
APPENDIX F
SCP/HLR Prices
<PAGE>
APPENDIX G
AS/OAM&P Statement of Work
<PAGE>
APPENDIX H
[Intentionally Omitted]
<PAGE>
APPENDIX I
AS/OAM&P Prices
<PAGE>
APPENDIX J
[Intentionally Omitted]
<PAGE>
APPENDIX K
Application Software Products Acceptance Procedures and Criteria
APPLICATIONS SOFTWARE ACCEPTANCE:
To be delivered pursuant to mutual agreement of the Parties pursuant to the
terms of Amendment No. 2.
<PAGE>
APPENDIX L
Application Software Products Maintenance and Support Services
6.1 GENERAL
The provisions of this Appendix L apply to the furnishing of maintenance AS
Services by the Vendor for AS Software furnished by the Vendor. This Appendix L
in no way limits, modifies or otherwise amends the Vendor's obligations as to
maintenance Services for other Products pursuant to the terms of the Contract.
6.2 DEFINITIONS
For the purposes of this Appendix L, the following terms shall have the
meanings indicated below:
(a) "AS Severity Level" means the priority status of an AS Software
condition that is indicative of the severity of the reported condition as set
forth in the table below.
(b) "Corrective Maintenance" means maintenance performed or required to be
performed by the Vendor upon written or oral request of the Owner to correct a
Defect in the AS Software.
(c) "Maintenance Updates", to be provided from time to time by the Vendor
but in any event, at least monthly, consist of at least the following:
(i) revised object code as appropriate for AS Software in the
same machine-readable storage media form as the original AS
Software; and
(ii) new or modified AS Software documentation or information
regarding such documentation.
(d) "Problem Resolution Management" means the procedures and actions
performed or required to be performed by the Vendor upon written or oral request
of the Owner to act in an ombudsman-type capacity and investigate and manage the
resolution of a reported condition so that the Owner has a single interface that
is engaged in pursuing a problem through to its resolution. This includes
Corrective Maintenance in the case of a reported Defect in AS Software covered
by the Contract.
(e) "Response Time" means the maximum period of time, in hours, within
which the Vendor will acknowledge the Owner's written or oral notification of a
Defect, make an initial assignment of the appropriate AS Severity Level and
initiate corrective action and escalation procedures.
6.3 SERVICE DESCRIPTION
Maintenance AS Services for AS Software include, but are not limited to,
fixed-term Service and AS/T&M Service. Unless otherwise agreed by Vendor in
writing, maintenance AS Service is only available for the then present generic
and the then immediately preceding generic.
(a) Fixed-term maintenance AS Service consists of procedures, as determined
by the Vendor for particular AS Software and for fixed periods, to keep the AS
Software operating consistent with the AS Statement of Work. Such AS Services
include diagnostic Service using on-site or remote techniques, as appropriate,
to analyze a problem and prescribe remedial action, and mandatory escalation
procedures to provide successively higher levels of expertise. Such AS Services
do not include support for administrative, operational, or keyboard command
questions. Fixed-term maintenance AS Services will be rendered primarily during
the Service hours reasonably requested by the Owners.
(b) Each order for fixed-term maintenance AS Services shall be for a
minimum of one (1) year and shall commence on the date set forth in the Owner's
order therefor. The Vendor shall give written notice of the impending
termination of an order at least sixty (60) days prior to the date for such
renewal, at which time the Owner may consider renewal, in its sole and absolute
discretion.
(c) AS/T&M Service includes, on a call-by-call basis and on the basis of
the Vendor's AS Services personnel availability, technical assistance using
on-site or remote techniques, as appropriate, to analyze a problem, prescribe
remedial action and, if ordered, make necessary repairs to AS Products.
6.4 ELIGIBILITY FOR MAINTENANCE SERVICE
AS Software installed by the Vendor is eligible for maintenance Service
without initial evaluation by the Vendor provided the Service commences not
later than the end of the Warranty Period.
In all other situations, the AS Software shall not be eligible for
maintenance Service until the Vendor, at its option, has made an initial
evaluation to determine whether modifications are required to make the AS
Software eligible. If, in the Vendor's reasonable judgment, modifications are
required for this purpose, the Vendor will provide an estimate to the Owner of
the costs of making such modifications. The Owner will be invoiced at Vendor's
then standard reasonable rate for such evaluation and any such modifications
furnished by the Vendor and accepted by the Owner.
6.5 PERIODS OF AS MAINTENANCE SERVICE
AS Maintenance Service will be provided twenty-four (24) hours a day, three
hundred sixty-five (365) days a year, unless otherwise agreed by the Parties in
writing.
6.6 AS MAINTENANCE SERVICE EXCLUSIONS
Unless expressly agreed by Vendor, maintenance Services to be provided
under this Appendix L will not include:
(a) Work external to the AS Software, whether or not on the AS Software's
Designated Processor;
(b) Making AS Specification changes or performing Services connected with
relocation of the AS Software;
(c) Such Service which is impractical for Vendor to render because of
changes not authorized by Vendor in the Designated Processor, hardware
configuration or Vendor's AS Software; and
(d) Modification or replacement of AS Software, repair of damage, or
increase in Service time caused by:
(i) Failure to provide a reasonably suitable operational
environment with all facilities prescribed by the applicable
manual including, but not limited to, the failure to provide, or
the failure of, reasonable electrical power, air conditioning, or
humidity control;
(ii) The use of the AS Software in a manner not in accordance
with the AS Statement of Work (except as otherwise authorized by
the Vendor);
(iii) Accident; disaster, which shall include, but not be limited
to, fire, flood, water, wind, and lightning (but only to the
extent such AS Software should not have withstood such conditions
pursuant to and in accordance with the AS Statement of Work);
transportation not provided by or arranged by Vendor; neglect, or
misuse by anyone other than Vendor, its employees, agents, or
subcontractors;
(iv) Modifications, maintenance, or repairs performed by other
than Vendor, its employees, agents, or subcontractors;
(v) The conversion from one Vendor AS Software release to
another, or the failure of Owner to reasonably apply previously
applicable modifications and corrections furnished by the Vendor
(excluding any items in Appendix G); and
(vi) The use of the AS Software in combination with other
Software not furnished by Vendor, except where such combinations
are specified in Vendor's Specifications for the AS Software or
are approved by Vendor in writing; provided that any Nortel
Software (as defined in the Nortel Agreement) shall be deemed to
be authorized by the Vendor for any such combinations to the
extent such Nortel Software needs to interoperate or otherwise
integrate with the AS Software in order for the entire Nationwide
Network to operate with the AS Software.
At the request and acceptance of the Owner, the Vendor will perform any of
the following Services at the Vendor's reasonable rates and terms in effect at
the time of such request.
6.7 MAINTENANCE OF RELOCATED AS SOFTWARE
AS Software Serviced under the Contract which is moved to another
Designated Processor within the Territory shall continue to be covered under
this Agreement provided that the Vendor has received fifteen (15) days prior
written notice of such relocation and, if requested by Vendor, the Parties have
renegotiated the objective response time selected by the Owner in the order. The
Vendor reserves the right to supervise the unloading of the AS Software from the
original processor and to inspect and reinstall the AS Software at the new
installation location; provided that in such event, the Vendor must exercise any
such rights, promptly and in a workmanlike manner. If the Owner elects to
utilize the Vendor's services hereunder, the Owner shall be charged for all such
work performed by Vendor at the Vendor's then reasonable rates.
6.8 SCOPE OF AS SOFTWARE MAINTENANCE AS SERVICES
(a) All Designated Processors covered for maintenance AS Services shall be
listed in the order along with their physical location and serial numbers. The
Owner may add or delete any Designated Processor upon the Owner's written notice
to the Vendor. Unless otherwise agreed by the Vendor in writing, maintenance AS
Services will be provided to support only the then present generic and
immediately preceding generic of each AS Software System for which such Services
are offered.
(b) The Vendor shall provide a telephone contact point at which the Owner
can notify the Vendor of the need for AS Software maintenance AS Services
twenty-four (24) hours per day, seven (7) days per week. In accordance with
provisions of the order a trained, knowledgeable, technically qualified Vendor
representative will promptly respond to the Owner. Such response will serve to
acknowledge receipt of notification and to obtain from the Owner a verbal
description of the nature of the need for maintenance AS Services. Such
representative shall analyze the problem, using data provided by the Owner, and
provide the Owner with timely program corrections to either fix the problem or
provide a procedure for working around the problem. If a work-around is provided
by the Vendor, the Vendor shall, on a best efforts basis, subsequently (but
promptly) provide a permanent solution to such problem.
(c) The Vendor shall, within a reasonable period of time after making any
correction to the AS Software as described herein, provide any necessary
revisions to the Vendor documentation related to the AS Software ("AS Related
Documentation").
(d) If it is determined that the AS Software is operating in accordance
with the AS Statement of Work and the reported problem arose from the Owner's
unauthorized use of the AS Software, the Vendor shall be entitled to Vendor's
reasonable standard charges for any reasonable effort spent, including
reasonable personnel travel and reasonable subsistence, if any, to diagnose,
analyze, and resolve such problem.
6.9 DESCRIPTION OF AS SOFTWARE CORRECTIVE MAINTENANCE SERVICES
A. DIAGNOSTIC SUPPORT
The Vendor will provide diagnostic support of Defects reported by the Owner
including isolation of the Defect to one of the following areas: (1) Program
Problems:
(a) AS Software
(b) AS Related Documentation
(2) Other Problems:
(a) Owner Operational Problems
(b) Data Base Problems
(c) Hardware and Firmware Problems
(d) Other Interfacing AS Systems Problems
B. CORRECTIVE ACTION
The Vendor will provide the following types of corrective action as
follow-up to the diagnostic support.
(1) AS SOFTWARE DEFECTS
(a) AS Software - In response to maintenance requests, the Vendor will
provide required Corrective Maintenance, in accordance with the AS Severity
Levels and Corrective Actions specified below for the AS Software in two ways:
(i) AS Emergency Fixes - Vendor will provide fixes such as
patches or changes to operational methods when it has been
determined that the Defect is in the AS Severity Level 1 or
2 classification;
(ii) AS Maintenance Update - A maintenance update to the
standard AS Software release will be issued on a periodic
basis to provide a fix to a group of conditions.
(iii) AS Related Documentation - If the condition is
isolated to the AS Related Documentation for the AS
Software, the corrected documentation will be given to the
Owner as part of the AS Maintenance Update or AS Emergency
Fix procedures.
(2) OTHER PROBLEMS
The Vendor will perform Problem Resolution Management for all components of
the total system, including AS Software, hardware and Firmware as follows:
(a) Owner Operational Problems - If the condition is determined to be the
result of unauthorized use or misuse of the AS System by the Owner, it will be
referred back to the Owner by the Vendor. At the Owner's request the Vendor will
prepare a proposal for billable effort to correct such nonstandard use.
(b) Data Base Problems - If the condition is determined to be the result of
corruption of the AS Software data base, and such corruption is not the direct
result of the AS Software, the condition will be referred back to Owner. At
Owner's request and at Vendor's option, Vendor may prepare a proposal for
billable effort to correct Owner's data base.
(c) Hardware/Firmware Problems - When a condition has been isolated to
hardware or Firmware associated with the AS Software, it will be referred back
to the Owner by Problem Resolution Management personnel for disposition under
whatever maintenance arrangement the Owner may have.
(d) Other Interfacing Systems Problems - If the condition is determined to
be caused by mechanized systems other than the AS Software, including but not
limited to those systems, excluding any and all systems and/or products, which
interface with the AS Software, it will be referred to Owner for action
authorized and/or contemplated in Appendix G.
(3) USER DOCUMENTATION
Documentation will be provided for AS Maintenance Updates which will enable
the Owner to train its personnel in the operation of the AS Software as modified
by such releases.
(4) NOTIFICATIONS OF CORRECTIONS
The Vendor will issue bulletins periodically, but not less than quarterly,
that describe known Defects in the AS Software or known interface hardware or
Firmware Defects and the availability of corrections for them. Bulletins will be
provided to the Owner during the period in which Owner is receiving maintenance
AS Services under the Contract for the applicable AS Software. The Owner will be
responsible for distribution of such bulletins within its own company; provided
that the Vendor will use reasonable efforts to forward any such bulletins to the
appropriate personnel at the Owner then known to the Vendor.
(5) CORRECTIVE MAINTENANCE RESPONSIBILITY
The Owner agrees to install the corrections or replacements provided
pursuant to the terms of this Contract as promptly as possible. Owner's failure
to install emergency fixes or patches or releases will cause the AS Software to
be considered nonstandard until all such fixes are installed.
(6) [Intentionally Omitted]
(7) PROBLEM DIAGNOSIS MATERIALS
The Owner will use its reasonable efforts to cooperate with the Vendor, in
the Vendor's performance of its obligations under and/or pursuant to the terms
of this Appendix L.
(8) SEVERITY CONDITIONS AND PRIORITIZATION
The Vendor shall perform AS Problem Resolution Management in accordance
with the AS System severity condition after it has been assigned an AS Severity
Level by the Owner. The priority for problem condition resolution will be based
on the AS Severity Level of outstanding reported conditions. AS Severity Level 1
conditions will receive top priority support. In the event that notification of
a condition with a AS Severity Level 1 supplants and redirects efforts expended
on a AS Severity Level 2 condition, the Vendor will notify the Owner reporting
such AS Severity Level 2 condition that there will be a delay in correcting the
AS Severity Level 2 condition and will reschedule efforts to correct that
condition.
(9) ESCALATION PROCEDURES
The Vendor will observe the following escalation procedures:
(a) AS Severity Level 1 - In the event of a AS Severity Level 1 condition
that is still unresolved four (4) hours after the condition is reported, the
Vendor will notify the Vendor's supervisory management of the unresolved
condition. If the AS Severity Level 1 condition is still unresolved eight (8)
hours after the condition is reported, the next higher level of the Vendor
supervisory management will be notified of the unresolved condition.
(b) AS Severity Level 2 - In the event of a AS Severity Level 2 condition
that is still unresolved twelve (12) hours after the condition is reported, the
Vendor will notify the Vendor's supervisory management of the unresolved
condition. If the AS Severity Level 2 condition is still unresolved twenty-four
(24) hours after the condition is reported, the next higher level of Vendor
supervisory management will be notified of the unresolved condition.
(10) HOT-LINE SERVICE
The Vendor will provide an "800 Hot-Line" telephone Service for direct
telephone support to the Owner in an emergency situation. This Service will be
available twenty-four (24) hours a day, seven (7) days a week for AS Severity
Levels 1 and 2 conditions only. Prior to placing the call to the Hot-Line, the
following steps shall have been completed by the Owner with assistance of Vendor
when necessary:
(a) Identification of the condition and its isolation to a particular
component of the AS System believed to be the Vendor's responsibility.
(b) Collection of sufficient supporting documentation from the system for
inclusion in the trouble report.
(c) Determination that there are no outstanding program fixes which correct
the condition.
Once the solution is found, the Vendor will supply it for testing and use
on the failed system.
(11) NORMAL TROUBLE-REPORTING PROCEDURES
Owner requirements and routines for reporting AS Severity Levels 2, 3 and 4
conditions are as follows:
(a) The Owner shall prepare a trouble report, including supporting
documentation and forward it to the Vendor.
(b) The Owner may also telephone the Vendor's Operation Support Center
(OSC) for answers to general operational questions about the AS Software and/or
assistance in correcting Severity Level 3 and 4 conditions. The return call will
either provide the requested information, request additional information, or
report on the status of corrective action on the trouble report.
(c) The calling Owner's personnel shall provide the following information:
Caller's name, location, and company Call-back
telephone number System name, location Generic issue
Processor location, type and serial number Nature of
question or situation.
(12) RESPONSE TIME
The Vendor will provide a one (1) hour Response Time during the twenty-four
hour seven day a week coverage period (the "Standard Coverage Period"). The
response will involve the establishment of a mutually agreed-upon AS Severity
Level for the condition. Appropriate Corrective Maintenance and escalation
procedures will begin during the Standard Coverage Period. However, at the
Owner's request, the Vendor will immediately initiate Corrective Maintenance
activities during other periods for a AS Severity Level 1 condition.
AS SEVERITY LEVELS AND CORRECTIVE ACTIONS
=========== ------------------------------ =====================================
AS
SEVERITY CONDITION ACTION
=========== ------------------------------ =====================================
LEVEL 1 This condition exists when The Vendor will develop an emergency
the AS System is completely bypass or a fix to enable the
inoperative, and it is not licensed AS Software to function
usable by the Owner. The until the condition is resolved or
inoperative portion of the make necessary changes to such AS
licensed Software completely Software to restore it to
restricts the Owner's operating condition.
operation.
=========== ------------------------------ =====================================
LEVEL 2 This condition exists when The Vendor will initiate problem
the AS System is partially correction procedures and will
inoperative, but it is still continue them until the condition is
usable by Owner. The resolved or corrected. The Vendor
inoperative portion of the will notify the Owner of any
licensed AS Software severely resolution or corrections, which
restricts the Owner's will be in the form of procedure or
operations but has a less program changes. If a bypass proce-
critical effect than a AS dure is utilized, the condition will
Severity Level 1 condition. be reclassified to AS Severity
Level 3.
=========== ------------------------------ =====================================
LEVEL 3 This condition exists when The Vendor will initiate problem
the AS System is usable by resolution and correction procedures
the Owner but with limited with the objective of resolving or
functions. The condition is correcting the condition and
not critical to Owner scheduling any correction, replace-
operations and does not ment, or change for inclusion in
severely restrict such future scheduled release of the
operations licensed AS Software and/or its
related documentation.
============ ----------------------------- =====================================
LEVEL 4 This condition exists when The Vendor will initiate problem
the AS System is usable by resolution and correction procedures
the Owner and a means of with the objective of resolving or
circumventing the condition correcting the condition and may
has been found. The condi- schedule any correction, replacement
tion does not materially or change for inclusion in a future
affect Owner operations release of the licensed AS Software.
or service.
============ ============================= =====================================
<PAGE>
TABLE OF CONTENTS
Page
1. Definitions......................................................... 1
2. Agreements.......................................................... 2
3. Amendment to Subsection 1.1......................................... 3
4. Amendment to Subsection 2.2......................................... 8
5. Amendment to Subsection 2.5......................................... 9
6. Amendment to Subsection 2.20........................................ 9
7. Amendment to Subsection 2.22........................................ 9
8. Amendment to Subsection 2.23....................................... 10
9. Amendment to Subsection 6.1........................................ 11
10. Amendment to Subsection 6.3........................................ 11
11. Amendment to Section 9............................................. 12
12. Amendment to Section 12............................................ 14
13. Amendment to Section 15............................................ 16
14. Amendment to Subsection 17.1....................................... 17
15. Amendment to Subsection 17.7....................................... 18
16. Amendment to Subsection 20.2....................................... 18
17. Amendment to Subsection 22.2....................................... 18
18. Cross References................................................... 19
19. NO OTHER AMENDMENTS................................................ 19
20. Governing Law...................................................... 19
21. Descriptive Headings............................................... 19
22. Counterparts....................................................... 19
<PAGE>
APPENDICES
Appendix A.................................AM/HLR Description and Specifications
Appendix B................................SCP/HLR Description and Specifications
Appendix C...............................................[Intentionally Omitted]
Appendix D1..................................Lucent/Nortel License Agreement-HLR
Appendix D2................................Lucent/Nortel License Agreement-OAM&P
Appendix E.................................................HLR Statement of Work
Appendix F........................................................SCP/HLR Prices
Appendix G............................................AS/OAM&P Statement of Work
Appendix H...............................................[Intentionally Omitted]
Appendix I.......................................................AS/OAM&P Prices
Appendix J...............................................[Intentionally Omitted]
Appendix K......Application Software Products Acceptance Procedures and Criteria
Appendix L........Application Software Products Maintenance and Support Services
Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
AMENDED AND RESTATED
PROCUREMENT AND SERVICES CONTRACT
between
SPRINT SPECTRUM EQUIPMENT COMPANY, L.P.,
Owner
and
LUCENT TECHNOLOGIES INC.,
Vendor
Dated as of October 9, 1996
<PAGE>
AMENDED AND RESTATED PROCUREMENT AND SERVICES CONTRACT
This Amended and Restated Procurement and Services Contract
(the "Contract") is made and is effective as of October 9, 1996 (the "Effective
Date"), by and between Sprint Spectrum Equipment Company, L.P., a Delaware
limited partnership (the "Owner"), and Lucent Technologies Inc., a Delaware
corporation (the "Vendor" and, together with the Owner, the "Parties").
RECITALS:
A. The Federal Communications Commission (the "FCC") granted to
Sprint Spectrum Holding Company L.P. ("Holdings"), a Delaware limited partner-
ship (formerly known as MajorCo L.P.) and certain of its affiliates personal
communications services licenses (the "PCS FCC Licenses") to build and operate
PCS Systems (as defined below) in specified geographic areas in the United
States;
B. Holdings and AT&T Corp. ("AT&T"), a New York corporation by and
through its Network Systems Group entered into a Procurement and Services
Contract dated as of January 31, 1996 (the "Procurement and Services Contract").
Effective as of February 1, 1996, pursuant to subsection 27.22 of the
Procurement and Services Contract and a Notice of Assignment dated as of
February 1, 1996 (the "AT&T Assignment"), AT&T assigned all of its right, title
and interest in and to, and delegated and transferred all of its duties,
obligations and liabilities, under the Procurement and Services Contract to
Lucent Technologies Inc., a Delaware corporation (the "Vendor") and the full
successor to the Network Systems Group of AT&T. Pursuant to the AT&T Assignment,
AT&T was released and discharged from all duties, obligations and liabilities
under the Procurement and Services Contract. Effective as of June 21, 1996,
pursuant to an Assignment, Assumption and Amendment No. 1 dated as of June 21,
1996 ("Amendment No. 1") by and among Holdings, Sprint Spectrum L.P., a Delaware
limited partnership ("Sprint Spectrum"), the Owner and the Vendor, all of
Holdings' right, title and interest in and to the Procurement and Services
Contract was assigned to and all of its duties and obligations under the
Procurement and Services Contract were delegated to Sprint Spectrum and Holdings
was released and discharged from any and all liabilities, obligations or duties
under or in respect of the Procurement and Services Contract. Pursuant to
Amendment No. 1, all of Sprint Spectrum's right (other than certain rights under
the Procurement and Services Contract to exercise remedies under the Procurement
and Services Contract in lieu of any such exercise by the Owner), title and
interest in and to the Procurement and Services Contract was assigned to and all
of its duties and obligations under the Procurement and Services Contract were
delegated to the Owner and further, the Procurement and Services Contract was
amended. Pursuant to Amendment No. 2 to the Procurement and Services Contract
dated as of July 15, 1996 ("Amendment No. 2"), the Procurement and Services
Contract was further amended. For the purposes hereof, the Procurement and
Services Contract as assigned pursuant to the AT&T Assignment and Amendment No.
1 and as amended pursuant to Amendment No. 1 and Amendment No. 2 is hereinafter
referred to as the "Existing Contract";
C. The Owner desires to have the Vendor engineer and construct PCS
Systems and PCS Sub-Systems in the geographic areas specified for such PCS
Systems and PCS Sub-Systems on Schedule 4 (collectively, the "System Areas")
pursuant to the terms of this Contract;
D. The Vendor, itself or through its Subcontractors (as defined
below), desires to provide Products (as defined below) and Services (as defined
below) to the Owner in connection with the engineering and construction of PCS
Systems and PCS Sub-Systems in the System Areas (as certain of such System Areas
may be divided into the certain sub-areas ("System Sub-Areas") set forth on
Schedule 4) including, but not limited to, the Vendor's obligation to engineer,
equip, install, build, test and service and operate PCS Systems and PCS
Sub-Systems in such System Areas and System Sub-Areas in accordance with the
terms and conditions set forth herein; and
E. The Parties desire to amend and restate the Existing Contract
to provide for, among other things, the incorporation of all prior amendments
and the subdivision of certain PCS Systems into certain defined PCS Sub-Systems;
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the Parties hereby agree that the Existing Contract
will be and hereby is amended and restated in its entirety to read herein as
follows:
<PAGE>
SECTION 1 DEFINITIONS
1.1 Definitions. In addition to the terms listed below, certain
additional terms are defined in the Exhibits (as defined below), subject to the
provisions of subsection 1.2 hereof. As used in this Contract, the following
terms have the following meanings:
"AAA" means the American Arbitration Association.
"Acceptance Certificates" means the collective reference to the
Factory Test Certificate, the Initial PCS System Certificate, the Substantial
Completion Certificate and the Final Acceptance Completion Certificate.
"Acceptance Tests" means the collective reference to the
performance and reliability demonstrations and tests specified in Exhibits B1,
B2 and B3 to determine whether the Products, the Services, any of the PCS
Systems, PCS Sub-Systems and/or the System meet the Specifications and the terms
and conditions of any applicable order and this Contract.
"Access Manager HLR (AM/HLR)" means Equipment and Software that
provides the call processing logic which comprises the stand-alone HLR service.
The stand-alone service being that service which contains the PCS subscriber's
or group of PCS subscribers' profile data used to provide call completion and
enhanced services as further described in Appendix A.
"Access Manager Specifications ("AM/HLR Specifications")" means the
Access Manager Specifications set forth in Appendix A.
"Actiview" means Vendor's Actiview application software that is
used for provisioning of services features ("SFP") within the Owner's services
operations, including, but not limited to, over-the-air provisioning and
non-over-the-air provisioning and computer desk to functions as defined in the
Actiview Statement of Work.
"Actiview Acceptance Test Period" means the applicable period of
time in days that the Vendor has to test and the Owner has to accept Actiview
Products and Services as specified in the Actiview Statement of Work.
"Actiview Completion Dates" means the dates and milestones set
forth in the Actiview Statement of Work that are required to be met by the
Vendor for the successful and timely completion of the provision of the Actiview
Products and Services.
"Actiview Final Acceptance" means the Owner's final acceptance of
the relevant Actiview Products and Services, and, to the extent applicable, the
installation thereof, pursuant to and in accordance with the Actiview Final
Acceptance Tests set forth in Appendix S; provided that in no event can Actiview
Final Acceptance occur with respect to Actiview Products or Services prior to
thirty (30) days after the completion of Actiview Final Acceptance Testing.
"Actiview Final Acceptance Tests" and "Actiview Final Acceptance
Testing" means the Actiview Products and Services final acceptance testing as
set forth in Appendix S.
"Actiview Functional Acceptance" means the Owner's initial
acceptance of Actiview Products and Services, and, to the extent applicable, the
installation thereof, pursuant to and in accordance with the Actiview Functional
Acceptance Tests set forth in Appendix S.
"Actiview Functional Acceptance Test" and "Actiview Functional
Acceptance Testing" means the initial field tests performed pursuant to and in
accordance with Appendix S during the Actiview Acceptance Test Period to
determine whether the Actiview Products and Services meet the requirements and
specifications set forth in the Actiview Statement of Work.
"Actiview Maintenance and Instruction Manuals" has the meaning
ascribed thereto in subsection 2.22.
"Actiview Operating Manuals" has the meaning ascribed thereto in
subsection 2.20.3.
"Actiview Price" means the aggregate price set forth in Appendix T
for all of the Actiview Products and Actiview Services to be provided under the
Contract and described in the Actiview Statement of Work.
"Actiview Product Warranty Period" has the meaning ascribed thereto
in subsection 17.1.3.
"Actiview Products" means the collective reference to Actiview
Software, Actiview documentation and any other ancillary Actiview items provided
by the Vendor to the Owner.
"Actiview Services" means those services provided by the Vendor to
the Owner as part of the provision, installation and continuing operation and
maintenance of the Actiview Products pursuant to and in accordance with the
Actiview Statement of Work.
"Actiview Software" means the work management Software forming part
of the application Software provided by the Vendor to the Owner pursuant to and
in accordance with the Actiview Statement of Work.
"Actiview Statement of Work" means the requirements, specifications
and milestones set forth in Appendix U.
"Adaptations" means any derivative work based on service package
application licensed Software including (i) any work incorporating any service
package application licensed Software directly, (ii) any work incorporating any
computer program from service package application licensed Software rewritten in
a different computer language or converted to operate on a different type of
CPU, (iii) any work utilizing a method or concept from service package
application licensed Software that the Owner is obligated to keep in confidence
hereunder or (iv) any work otherwise covered by any of the Vendor's intellectual
property rights in service package application licensed Software.
"Additional Affiliate" has the meaning ascribed thereto in subsec-
tion 3.1.
"Additional Affiliate Agreement" has the meaning ascribed thereto
in subsection 3.3.
"Additional Affiliate Arrangement" means a formal arrangement
between the Owner and a Person to be designated an Additional Affiliate under
the terms of this Contract, which arrangement will include, but not be limited
to, agreements on marketing, backhaul, common billing, resale agreements and/or
revenue sharing.
"Affiliates" means the collective reference to the Initial Affil-
iates and the Additional Affiliates.
"Annual Release Maintenance Fees" means those recurring annual fees
of the Vendor, usually invoiced annually in January, the Owner's payment of
which entitles the Owner to receive all Combined Software Releases, Software
Enhancements, and Software Upgrades applicable to PCS Products (but not Optional
Software Features) which will be made available to the Owner when made generally
available to the Vendor's Customers during the period for which the fees were
paid. All Annual Release Maintenance Fees will be as in the Vendor's Customer
Price Guides (subject to Section 26) except as otherwise set forth on Schedule
3. The Annual Release Maintenance Fees applicable to the Owner will for the
period from the Effective Date until the Final Acceptance of the last PCS System
within the Initial System always cover at least those PCS Products included in
the Initial System.
"ANSI" means the American National Standards Institute.
"APC" means American PCS, L.P., a Delaware limited partnership.
"Applicable Laws" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, all United States or foreign laws (including, but not limited to, any
Environmental Laws), treaties, ordinances, judgments, decrees, injunctions,
writs, orders and stipulations of any court, arbitrator or governmental agency
or authority and statutes, rules, regulations, orders and interpretations
thereof of any federal, state, provincial, county, municipal, regional,
environmental or other Governmental Entity, instrumentality, agency, authority,
court or other body (i) applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject or (ii)
having jurisdiction over a or any part of any PCS System, the System or the Work
to be performed pursuant to the terms of this Contract.
"Applicable Permits" means any waiver, exemption, zoning, building,
variance, franchise, permit, authorization, approval, license or similar order
of or from any United States, foreign, federal, state, provincial, county,
municipal, regional, environmental or other governmental body, instrumentality,
agency, authority, court or other body having jurisdiction over all or any part
of any PCS System, the System or the Work to be performed pursuant to the terms
of this Contract.
"Application Software ("AS")" or "AS Software," means the Software
used for operations and maintenance support as part of the Vendor provided AS
Products and Services described in Appendix G.
"AS Acceptance Date" means the date or dates on which the AS
Products successfully complete the AS Functional Acceptance Tests or the AS
Final Acceptance Tests, as the case may be.
"AS Acceptance Test(s)" means the collective reference to the AS
Functional Acceptance Tests and the AS Final Acceptance Tests.
"AS Acceptance Test Period" means the applicable period of time in
days that the Vendor has to test and the Owner has to accept or reject certain
AS Products as specified in the AS Statement of Work.
"AS Completion Dates" means the dates and milestones set forth in
Appendix G that are required to be met by the Vendor for the successful and
timely completion of the AS Statement of Work in accordance with the AS
Statement of Work.
"AS Equipment" means certain third party manufactured or other
Equipment provided to the Owner by the Vendor as necessary for the operation and
integration of the AS Software and the AS Services pursuant to and in accordance
with the AS Statement of Work.
"AS Final Acceptance" means the Owner's final acceptance of the AS
Products and installation thereof, pursuant to and in accordance with the AS
Final Acceptance Tests; provided that in no event can AS Final Acceptance occur
with respect to AS Software and/or AS Services prior to thirty (30) days after
the completion of AS Functional Acceptance Testing.
"AS Final Acceptance Tests" and "AS Final Acceptance Testing" means
the AS Product final acceptance tests set forth in Appendix K.
"AS Functional Acceptance" means the Owner's initial acceptance of
AS Products and Services, and, to the extent applicable, the installation
thereof, pursuant to and in accordance with the AS Functional Acceptance Tests.
"AS Functional Acceptance Test" and "AS Functional Acceptance
Testing" means the initial functional tests performed pursuant to and in
accordance with Appendix K.
"AS/OAM&P Statement of Work" or "AS Statement of Work" means the
scope of work to be performed by the Vendor in accordance with the terms of
Appendix G.
"AS Operating Manuals" has the meaning ascribed thereto in subsec-
tion 2.20.1.
"AS Price" means the aggregate price set forth in Appendix I for
all of the AS Products and AS Services to be provided under the Contract and
described in the AS Statement of Work.
"AS Product Warranty Period" has the meaning ascribed thereto in
subsection 17.1.1.
"AS Products" means the collective reference to AS Software and AS
Equipment.
"AS Services" means those OAM&P Services (including, but not
limited to, Optional AS Services) provided by the Vendor as part of the
provision, installation and continuing operation and maintenance of the AS
Products pursuant to and in accordance with the AS Statement of Work.
"AS/T&M" means the AS Services time and material pricing set forth
in Appendix I describing the quantity of hours involved and material expenses
related to a specific AS Statement of Work requirement which is done in
accordance with and pursuant to the AS Statement of Work; provided that AS/T&M
charges will only be charged (to the extent applicable) by the Vendor for AS
Services (other than Optional AS Services requested by the Owner in accordance
with Appendix G) requested by the Owner for performance by the Vendor of
applicable AS Services at any time after July 15, 1999.
"Backwards Compatibility" or "Backwards Compatible" means that any
referenced prior Software Revision Level or Levels of the applicable Software or
any referenced prior Equipment Revision Level or Levels of the applicable
Equipment, as the case may be, remain fully functional in accordance with and up
to the performance levels to which it was performing immediately prior to any
such enhancement and/or revision after the integration with the succeeding
Software Revision Level or Equipment Revision Level, as the case may be, and
that after such integration such prior Software Revision Level or Equipment
Revision Level loses no functionality and such succeeding Software Revision
Level or Equipment Revision Level interoperates with all such functionalities of
such prior Software Revision Level or Equipment Revision Level.
"Base Station ("BTS")" means the radio subsystem that handles the
Owner's PCS radio traffic in a designated cell. The Base Station includes all
amplification, modulation, synchronization and other circuitry required to
process a radio signal. The inputs to a Base Station are a landline or radio
signal (e.g., T1) and the radio signal that is fed into antenna lines.
"best efforts" means a Party's best efforts under the
circumstances, provided that the use of best efforts will not require the Party
to breach any outstanding contract or to violate any Applicable Law.
"Bolt-down" means for the purposes of each PCS Product all work
that needs to be done by the Vendor in order to permanently and securely place
such PCS Product in its appropriate location within the relevant System Element
Location, provided that Bolt-down will not necessarily constitute installation
of any such PCS Product.
"Build Notice" has the meaning ascribed thereto in subsection
2.7(a).
"Building Ready Date" has the meaning ascribed thereto in subsec-
tion 2.5.
"Business Day" means any day of the year other than a Saturday,
Sunday or a United States national holiday.
"Cable Microcell Integrator ("CMI")" means a form of cable
microcell integrator that provides for transportation of wireless communication
signals over a cable TV distribution plant. The CMI takes certain signals from
the cable TV distribution plant (the "cable PCS band or bands") and suitably
heterodynes, filters and amplifies these signals such that they can be radiated
by a CMI antenna or antennas in the designated PCS band to PCS wireless
handsets. The CMI takes signals received from the PCS wireless handsets from one
or more CMI receiving antennas and suitably heterodynes, filters and amplifies
these signals for transportation by the cable TV distribution plant to a Headend
Interface Converter ("HIC") or Distributive Cable Access Provider ("DCAP") at a
PCS Base Station. Additionally, the CMI unit responds to control signaling and
provides status signals. The CMI is normally collocated with the cable TV
distribution plant and takes power from the cable plant.
"Cable Partner" has the meaning ascribed thereto in subsection
27.23.
"CDMA" means code division multiple access as specified in
ANSI-J-STD-008.
"Change Orders" has the meaning ascribed thereto in subsection 7.2.
"Channels" means the voice channeling units contained in each cell
site.
"Civil Work" means the labor and materials necessary in the
performance of demolition, construction and renovation work (e.g., roads,
grading, fencing and structural improvements, including, but not limited to, any
buildings, towers and antennas) in order to construct a System Element Facility
in accordance with Exhibit E.
"Completion Cure Period" has the meaning ascribed thereto in sub-
section 15.3(a).
"Computer Program" means any Source Code or object-code instruction
or group of such instructions for controlling the operation of a CPU.
"Configuration Engineering" means the engineering required to
establish System Element configuration including, without limitation, preparing
component, inventory (including T1 quantities and configurations) and layout
drawings, Equipment labels, cable tray layout drawings, and "as-built" drawings
and Documentation. Configuration Engineering also includes the design, power
distribution and supply for each of the System Elements.
"Continental" means Continental Cablevision, Inc.
"Contract" has the meaning ascribed thereto in the prefatory
paragraph to this Amended and Restated Contract hereof. "Contract" will in all
instances include all Exhibits, Schedules, Appendices and Specifications and
will, unless specifically stated otherwise, always be deemed to include all
amendments, modifications and supplements to the Contract or any part thereof
(including any Exhibits, Schedules, Appendices or the Specifications) pursuant
to the terms of this Contract.
"Contract Cover Damages" has the meaning ascribed thereto in sub-
section 15.4.
"Contract Price" has the meaning ascribed thereto in subsection
6.1.
"CPU" means a central processing unit.
"Custom Material" has the meaning ascribed thereto in subsection
11.9.1.
"Customer" means any PCS customer of the Vendor doing business in
North America or any PCS customer doing business in North America of any of the
Vendor's affiliates or subsidiaries.
"Customer Price Guide" means the Vendor's published "Network
Wireless Systems Price Reference Guide" or other price notification releases
furnished for the purpose of communicating the Vendor's list pricing or
pricing-related items applicable to PCS Products to Customers intending to
operate PCS systems in the United States, provided that the term does not
necessarily include firm price quotes.
"Customer Service Request ("CSR")" has the meaning ascribed thereto
in subsection 2.26.2.
"Defects and Deficiencies," "Defects or Deficiencies" or
"Defective" means any one or a combination of the following items or other items
of a substantially similar nature:
(a) when used with respect to the performance of labor or service
items of Work (including any work by any Subcontractor), such items that are not
provided in a workmanlike manner and in accordance with the standards and/or
Specifications set forth herein;
(b) when used with respect to structures, materials, Equipment and
Software items of Work (including any Work by any Subcontractor), such items
that are not (i) new and of good quality and free from improper workmanship and
defects in accordance with the standards and/or Specifications set forth herein
or established hereunder and standards of good procurement, manufacturing and
construction standards, or (ii) free from errors and omissions in design or
engineering services in light of such standards; or
(c) in general, (i) Work (including any Work by any Subcontractor)
that does not conform to the Specifications and/or requirements of this
Contract, or (ii) any design, engineering, start-up activities, materials,
Equipment, Software, tools, supplies, Installation or Training that (1) does not
conform to the standards and/or Specifications set forth herein or established
hereunder, (2) has improper or inferior workmanship, (3) would materially and
adversely affect the ability of the System and/or any PCS System and/or any PCS
Sub-System and/or any material part thereof to meet the performance criteria
specified in Exhibit F on a consistent and reliable basis or (4) would
materially and adversely affect the continuous operation of the System and/or
any PCS System and/or any PCS Sub-System or any material part thereof in
accordance with the standards and/or Specifications set forth herein or
established hereunder. Defects and Deficiencies will be deemed to exist when
actually discovered or when they should have been apparent to a Person in the
Vendor's position after reasonable inspection and testing.
"Designated Processor" has the meaning of the AS Product for which
the "RTU" License specified in subsection 11.1 is granted.
"Discontinued Products" has the meaning ascribed thereto in sub-
section 10.1.
"Documentation" means the documentation for the System and/or any
PCS System and/or PCS Sub-System and/or any material part thereof.
"Effective Date" has the meaning ascribed thereto in the prefatory
paragraph to this Contract.
"E1 Emergency Condition ("E1")" has the meaning ascribed thereto in
subsection 2.26.3(b).
"E2 Emergency Condition ("E2")" has the meaning ascribed thereto in
subsection 2.26.3(b).
"Emergency Technical Assistance ("ETA")" means the provision of
emergency technical assistance to the Owner for the purpose of diagnosing and
resolving a problem which adversely affects the System and/or any PCS System
and/or any PCS Sub-System and/or any material part thereof, its operation and/or
its service pursuant to and in connection with subsection 2.26.3.
"Engineer" means the engineer or engineers appointed from time to
time by the Owner to do certain work and/or inspections and reviews on behalf of
the Owner and/or provide advice or information to the Owner in connection with
the System and/or any PCS System and/or any PCS Sub-System and/or any part
thereof.
"Engineering" means all of the engineering required to be done by
the Vendor to complete the System in accordance with the Specifications
including, but not limited to, RF Engineering, Configuration Engineering and
Facilities Engineering done in accordance with the Specifications and the CDMA
standards.
"Environmental Laws" means any and all United States and foreign,
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Entity, or
requirements of law (including, without limitation, common law) relating in any
manner to contamination, pollution, or protection of human health or the
environment, as now or may at any time hereafter be in effect.
"Equipment" means all equipment, hardware and other items of
personal property which are required to be furnished by the Vendor or any
Subcontractor pursuant to and in accordance with the terms and conditions of
this Contract and in connection with the System and/or any PCS System and/or any
PCS Sub-System and/or any part thereof in accordance with the Specifications
including, without limitation, additional equipment required as a result of the
expansion or additional coverage required pursuant to subsection 2.2, or
otherwise pursuant to the terms of this Contract, and the equipment listed on
Exhibit D or on Schedule 7 (parts A and B).
"Equipment Combined Release" has the meaning ascribed thereto in
subsection 13.1(a).
"Equipment Enhancements" means modifications or improvements made
to the PCS Equipment which improve performance or capacity of such Equipment
(sometimes referred to by the Vendor as its "Class B" changes).
"Equipment Revision Level" means each version of an Item of PCS
Equipment that reflects any modification or change from the immediately
preceding version of such Item of Equipment.
"Equipment Upgrade" means a change or modification in any delivered
PCS Equipment which fixes or otherwise corrects faults, design shortcomings or
shortcomings in meeting the Specifications, required to correct defects of a
type that result in inoperative conditions, unsatisfactory operating conditions,
or which is recommended to enhance safety (sometimes referred to by the Vendor
as its "Class A" changes).
"Escrow Agreement" has the meaning ascribed thereto in subsection
11.7.
"ETA" means Emergency Technical Assistance.
"Exchange Act" has the meaning ascribed thereto in subsection
27.22.
"Exhibits" means all of the schedules, exhibits, appendices or
other attachments hereto and made a part of this Contract as any such schedules,
exhibits, appendices and/or attachments may be amended, supplemented or
otherwise modified from time to time in accordance with the terms of this
Contract.
"Existing Contract" has the meaning ascribed thereto in the reci-
tals hereof.
"Expansions" means any additional Products or Services resulting
from a modification by the Owner to the Specifications, the performance criteria
set forth in Exhibit F or the Project Milestones set forth on Exhibit A
resulting in a change to the System and/or any PCS System and/or any PCS
Sub-System and/or any material part thereof, including, but not limited to, the
extension or expansion of the System and/or any PCS System and/or any PCS
Sub-System (i) into geographic areas outside of the System Areas or System
Sub-Areas, as the case may be, covered by the applicable PCS Systems or PCS
Sub-Systems, as the case may be, identified in Schedule 4, or (ii) to increase
capacity and/or performance of the System and/or any PCS System and/or any PCS
Sub-System beyond the performance criteria and/or Specifications originally
contemplated herein. Expansions will not include any additional Products or
Services required to meet the Specifications applicable to the Initial System.
For the purposes of this definition, "Expansions" will specifically not include
the extension of a PCS Sub-System into a geographic area covered or to be
covered by a PCS System of which such PCS Sub-System is a part.
"Extraordinary Transportation" means the Vendor's or its
Subcontractors' transport of Products and/or other materials pursuant to the
terms of this Contract where the circumstances of such transport require the
Vendor to use any one or a combination of the following extraordinary means of
transport and/or extraordinary methods of achieving access to the Owner's
facilities: (i) four-wheel drive vehicle (other than those typically used for
the delivery of Products), (ii) helicopter, (iii) boat, (iv) airplane, (v)
bulldozer, (vi) clear physical obstructions requiring the building of a new road
by the Vendor or its Subcontractors, or (vii) a construction crane.
"Facilities Engineering" means the engineering required to design
each System Element Facility including, without limitation, System Element
Locations and System Element layout, drawings and relevant Specifications for
the construction of the buildings, towers, generators, cable and antennae and
all other items required to make the System Element Facility functional.
Facilities Engineering does not include Configuration Engineering.
"Facilities Preparation Services" means all Facilities Engineering,
Civil Work, Site Plan Architectural Work, Structural Architectural Work, and
Utilities Work, all of which must be performed in accordance with the
Specifications. Pursuant to the definition of Civil Work, Facilities Preparation
Services will (unless otherwise agreed by the Owner) include all Work to
complete the Civil Work in a given System Element Location including, but not
limited to, the supply, building and installation of all buildings, towers and
antennas. Facility Preparation Services does not include Site Acquisition,
Network Interconnection, Microwave Relocation or any of the above referenced
activities for the construction of a Switch Site (except as otherwise provided
in this Contract).
"Facilities Preparation Services Warranty Period" has the meaning
ascribed thereto in subsection 17.2(b).
"Factory Test Certificate" means a document submitted by the Vendor
to the Owner and signed by an authorized representative of the Owner and an
authorized officer of the Vendor stating that in accordance with the
requirements of Exhibit B3 and this Contract the Vendor has successfully
completed all factory tests on the PCS Products (of the type to be installed as
part of the Initial System) in accordance with the requirements of Exhibit B3
and this Contract.
"FCC" has the meaning ascribed thereto in the recitals to this Con-
tract.
"Field Acceptance" means the Owner's initial acceptance of SCP/HLR
Products and the installation thereof, pursuant to and in accordance with the
Field Acceptance Tests set forth in Appendix E.
"Field Acceptance Tests" and "Field Acceptance Testing" means the
SCP/HLR field acceptance testing as set forth in Appendix E.
"Final Acceptance" means, as to any PCS System and/or PCS
Sub-System, the successful completion by the Vendor of all of the final
acceptance tests and requirements applicable to such PCS System and/or PCS
Sub-System set forth in Exhibit B3 in accordance with the requirements of
Exhibit B3 and the terms of this Contract. For the purposes of this Contract for
any PCS System that has been divided into PCS Sub-Systems, the Final Acceptance
of such PCS System will be deemed to have occurred upon the Final Acceptance of
the last PCS Sub-System within such PCS System.
"Final Acceptance Completion Certificate" means, with respect to a
given PCS System or PCS Sub-System, a document submitted by the Vendor to the
Owner and signed by an authorized representative of the Owner and an authorized
officer of the Vendor stating that the Vendor has successfully completed the
Acceptance Tests and requirements applicable to the Final Acceptance of the Work
to be done in such PCS System or PCS Sub-System, as the case may be, in
accordance with the requirements of Exhibit B3.
"Final RF Engineering Plan" has the meaning ascribed thereto in
subsection 2.6(c).
"Final RF Review Period" has the meaning ascribed thereto in sub-
section 2.6(c).
"Final Site Count" has the meaning ascribed thereto in subsection
2.6(c).
"Financing Interim Period" has the meaning ascribed thereto in sub-
section 24.9(a).
"Firmware" means a combination of (i) Equipment and (ii) Software
represented by a pattern of bits contained in such Equipment.
"Force Majeure" means the following:
(a) Acts of God, epidemic, earthquake, landslide,
lightning, fire, explosion, accident, tornado, drought, flood,
hurricane, or extraordinary weather conditions more severe than
those normally and typically experienced in the affected area
constituted by each of the specified System Areas in which the
Vendor is seeking to claim Contract suspension due to Force
Majeure;
(b) Acts of a public enemy, war (declared or undeclared),
blockade, insurrection, riot or civil disturbance, sabotage,
quarantine, or any exercise of the police power by or on behalf of
any public entity;
(c) (i) The valid order, judgment or other act of any
federal, state or local court, administrative agency, Governmental
Entity or authority issued after the Effective Date; (ii) with
respect to the Vendor, the suspension, termination, interruption,
denial or failure of or delay in renewal or issuance of any
Applicable Permit required by this Contract to be obtained by the
Owner; (iii) with respect to the Owner, the suspension,
termination, interruption, denial or failure of or delay in renewal
or issuance of any Applicable Permit required by this Contract to
be obtained by the Vendor; or (iv) a change in Applicable Law
(including the adoption of a new Applicable Law); provided that no
such order, judgment, act, event or change is the result of the
action or inaction of, or breach of this Contract by, the Party
relying thereon;
(d) Strikes, boycotts or lockouts, except for any such
strike, boycott or lockout involving the employees of the Vendor or
the permanent employees (not hired on a contract basis) of a
Subcontractor (for the period from the Effective Date until the
Final Acceptance of the last PCS System within the Initial System
but in no event to exceed three (3) years from the Effective Date);
(e) A partial or entire delay or failure of utilities; or
transportation embargoes; or
(f) The presence of (i) any Hazardous Waste on or at any
System Element Location which materially interferes with the Work
to be done thereon or otherwise materially endangers the safety of
any personnel at such location; (ii) any unknown historical or
archeological sites which are not shown or indicated in the survey
of any System Element Locations and of which the Vendor could not
have reasonably been expected to be aware; or (iii) any mining or
water recovery activities (other than such activities by the Vendor
or its Subcontractors) at or under any System Element Location
after the Effective Date.
Events of Force Majeure include the failure of a Subcontractor to
furnish labor, services, materials, or equipment in accordance with its
contractual obligations, only if such failure is itself due to an event of Force
Majeure. A Force Majeure does not include any delay in performance to the extent
due to the failure of the Vendor or any Subcontractor to provide an adequate
number of engineers or other workmen or to manufacture or procure an adequate
amount of Equipment, Software and/or Services.
"Governmental Entity" means any nation or government, any state,
province or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranteed Substantial Completion Date" means the date which is
defined in Exhibit A1 as "Milestone 8."
"Hazardous Waste" means any and all hazardous or toxic substances,
wastes, materials or chemicals, petroleum (including crude oil or any fraction
thereof) and petroleum products, asbestos and asbestos-containing materials,
pollutants, contaminants, polychlorinated biphenyls and any and all other
materials, substances, regulated pursuant to any Environmental Laws or that
could result in the imposition of liability under any Environmental Laws.
"HCUs" means the High Density Channel Card Units which carry eight
(8) voice Channels per card.
"Headend Interface Converter ("HIC")" means a form of CMI that
provides for transportation of wireless communication signals over a cable TV
distribution plant. The HIC takes signals from the PCS Base Station transmitter
and suitably heterodynes, filters and amplifies these signals for processing by
the PCS Base Station receiver. Additionally, the HIC provides reference and
control signals to the CMI units and receives and processes status signals from
the CMI unit.
"HLR Completion Dates" means the dates and milestones set forth in
Appendix E that are required to be met by the Vendor for the successful and
timely completion of the HLR Statement of Work.
"HLR Designated Switch Sites" means the Switch Sites within the
Nationwide Network in which the Owner requires the installation of AM/HLRs
within the Denver and Kansas City System Areas and the Philadelphia System Area
(as defined in the PhillieCo Contract) and the installation of SCP/HLRs within
the San Francisco, New York, Dallas, Denver and Kansas City System Areas and the
Philadelphia System Area (as defined in the PhillieCo Contract).
"HLR Final Acceptance" means the Owner's final acceptance of
SCP/HLR Products and the installation thereof, pursuant to and in accordance
with the HLR Final Acceptance Tests; provided that in no event can HLR Final
Acceptance occur with respect to any SCP/HLR Product prior to thirty (30) days
after the completion of Field Acceptance Testing for such SCP/HLR Product(s).
"HLR Final Acceptance Tests" and "HLR Final Acceptance Testing"
means the SCP/HLR final acceptance tests set forth in Appendix E.
"HLR Statement of Work" means the statement of work applicable to
the AM/HLRs and the SCP/HLRs set forth in Appendix E.
"In Revenue Service" or "In Revenue" means the commercial operation
of any PCS System and/or PCS Sub-System, or a portion thereof, exclusive of
operation for purposes of conducting Acceptance Tests; provided that In Revenue
Service or In Revenue will not by itself constitute acceptance in accordance
with the terms of this Contract of any such PCS System and/or PCS Sub-System or
any portion thereof.
"Indemnitees" has the meaning ascribed thereto in subsection
20.1(a).
"Independent Auditor" means any of the Persons set forth on
Schedule 15.
"Initial Affiliate Agreement" has the meaning ascribed thereto in
subsection 3.2.
"Initial Affiliates" means the collective reference to each of the
Persons set forth on Schedule 5.
"Initial Commitment" has the meaning ascribed thereto in subsection
7.1.
"Initial PCS System" means the Fresno PCS Sub-System or as
otherwise mutually agreed between the Parties.
"Initial PCS System Certificate" means a document submitted by the
Vendor to the Owner and signed by an authorized representative of the Owner and
an authorized officer of the Vendor stating that the Vendor has successfully
completed the Acceptance Tests applicable to the Initial PCS System in
accordance with the requirements of Exhibit B3.
"Initial System" means the build-out of that portion of the System
Areas and System Sub-Areas shown on Schedule 4 prior to any Expansions or Owner
requests for additional coverage for such System Areas and System Sub-Areas
pursuant to the terms of this Contract.
"Initial Term" has the meaning ascribed thereto in subsection 5.1.
"Inspector" means a qualified Person designated as an authorized
representative of the Owner assigned to make all necessary inspections of the
Work, or of the labor, materials and equipment furnished or being furnished by
the Vendor or any of its Subcontractors at the System Element Locations and the
other sites where the Vendor or any Subcontractor is prosecuting the Work,
subject to appropriate safety, security and confidentiality requirements.
"Installation" or "Installed" means the performance and supervision
by the Vendor of all installation of Products within the System and/or any PCS
System and/or any PCS Sub-System.
"Intellectual Property Rights" has the meaning ascribed thereto in
subsection 14.2(a).
"Interim Delay Penalty" has the meaning ascribed thereto in subsec-
tion 15.2.
"Interim Milestone" has the meaning ascribed thereto in subsection
15.2.
"Interoperability" means (i) the ability of the System and/or any
PCS System and/or any PCS Sub-System and/or any material part thereof to
interconnect and successfully operate with the equipment and software of other
systems and/or PCS systems and/or PCS sub-systems and/or any material part
thereof of the Vendor (including, for purposes of this definition, the PhillieCo
System) and/or the Other Vendors and/or other suppliers whose equipment and
software also meet the relevant ANSI standards and other Specifications
identified in Exhibit D and (ii) the ability of each of the Products to operate
with one another and to operate with and within the System, including, but not
limited to, the ability of the handsets (to be delivered pursuant to subsection
2.3) to operate with and within the System (including, for purposes of this
definition, the PhillieCo System), all in accordance with the Specifications.
Since certain sections of the ANSI standards are currently undefined, and
certain sections are left available for independent development by suppliers,
the potential for such interoperability or incompatibility with properly
designed systems exists, and must be resolved by the Vendor or any Subcontractor
providing PCS Systems or PCS Sub-Systems to the Vendor in accordance with the
terms hereof.
"Item" means any item at any time listed in any of the Vendor's
price lists and it specifically includes, without limitation, all Software
Upgrades, Software Enhancements, Equipment Upgrades, Equipment Enhancements and
modifications, enhancements, updates or other revisions of any kind in any such
item, spare parts with respect to any of the foregoing and any other
PCS/CDMA-related item.
"Late Completion Payment Cap" has the meaning ascribed thereto in
subsection 15.3.
"Late Completion Payments" has the meaning ascribed thereto in sub-
section 15.3.
"Liabilities" has the meaning ascribed thereto in subsection
20.1(a).
"Liquidated Damages" has the meaning ascribed thereto in subsection
15.1.
"Lucent/Nortel License Agreement" means the Interface License
Agreement between the Vendor and Nortel dated as of June 14, 1996 attached
hereto as Appendix D1.
"Lucent/Nortel License Agreement-OAM&P" means the OAM&P Interface
License Agreement between the Vendor and Nortel dated as of July 24, 1996
attached hereto as Appendix D2.
"M5 Forecast" has the meaning ascribed thereto in subsection
2.7(a).
"Maintenance and Instruction Manuals" means the manuals prepared by
the Vendor and delivered to the Owner pursuant to subsection 2.21 containing
detailed procedures and specifications for the ongoing maintenance of the
System.
"Major Portion" of the Work means a segregated portion of the Work
with a cost to the Owner of $10,000,000 or more.
"MFC Certificate" has the meaning ascribed thereto in subsection
26.1(b).
"Microwave Delay Period" has the meaning ascribed thereto in sub-
section 2.38(a).
"Microwave Relocation" means the process by which incumbent
point-to-point microwave users of the 1850 - 1990 Mhz frequency spectrum are
moved to other frequencies or alternate transmission facilities in order to
clear the licensed PCS spectrum for broadband wireless service.
"Microwave Relocation Completion" means, with respect to any given
PCS System or PCS Sub-System, the point at which the Owner will have finished
sufficient Microwave Relocation in such PCS System or PCS Sub-System to permit
the commercially viable and marketable operation of such PCS System or PCS
Sub-System in accordance with the terms of this Contract.
"Minimum Commitment" means sixty percent (60%) of the Initial
Commitment.
"Nationwide Network" means all of the PCS Systems and PCS
Sub-Systems built or to be owned and/or operated by the Owner or its Affiliates
in North America.
"NDAB" means the New Development Advisory Board established
pursuant to the terms of this Contract including subsections 2.11, 2.32 and
2.33.
"Network Interconnection" means the transmission links between Base
Stations and MSCs, between an MSC and another MSC, and between MSCs and PSTNs
but does not include connections between demarcation points of transmission
links and System Elements for which the Vendor will be responsible pursuant to
the terms of this Contract, including its obligations to install and test upon
the Owner's completion of such transmission links.
Typically T1 transmission links are used for connectivity.
"NewTelCo" means NewTelCo. L.P., a Delaware limited partnership.
"Non-Essential Equipment" means a Product, other than a PCS
Product, obtained from a third party supplier and furnished to the Owner as part
of Facilities Preparation Services in accordance with the terms of this
Contract, which Product will be furnished with an assignable warranty from the
such third party supplier of a length and scope determined by the Parties in the
development of the Specifications in accordance with the terms of Exhibit E for
the Product pursuant to the terms of this Contract, including, but not limited
to:
Antennas
Transmission towers
Monopoles
Prefabricated equipment shelters Power transformers
Batteries Rectifiers Uninterrupted power sources.
Non-Essential Equipment does not include normal construction materials
(including, but not limited to pipes, conduits, concrete, fences, lighting and
paving materials) used by the Vendor or its Subcontractors in the performance of
its Facilities Preparation Services.
"Nortel" means Northern Telecom Inc., a Delaware corporation.
"Nortel Contract" means that certain Procurement and Services
Contract between the Owner and Nortel dated as of January 31, 1996.
"North America" means the United States, Canada (including the
Province of Quebec) and Mexico.
"Notice to Proceed" means a written notice given by the Owner to
the Vendor in the form attached hereto as Schedule 9 and in compliance with the
provisions of this Contract, fixing the date on which the Vendor will have the
full right, in accordance with the terms of this Contract, and the full
obligation, subject to the terms of this Contract, to commence the Work to be
performed under this Contract.
"Notice to Proceed Date" means the date on which any Notice to
Proceed is issued by the Owner in accordance with the terms of this Contract.
"OAM&P" means operations administration maintenance and provision-
ing as described in Appendix G.
"OCC" has the meaning ascribed thereto in subsection 2.26.2.
"OM&P" has the meaning ascribed thereto in subsection 2.23(a).
"Operating Manuals" means the manuals to be prepared by the Vendor
and delivered to the Owner pursuant to subsections 2.20, 2.22 and 2.23
containing detailed procedures and specifications for the operation of the
System and/or any part thereof.
"Operative" has the meaning ascribed thereto in subsection 27.26.
"Optional AS Services" means those AS services classified as
optional, as set forth in Appendix G, which are only provided to the Owner upon
the request of the Owner.
"Optional Software Features" means Software features for PCS
Products available to Customers on an optional, separate fee, basis. The initial
fees for such Optional Software Features are not included in Annual Release
Maintenance Fees.
"OTAF" means the collective reference to SPARC/OTAF and SCP/OTAF.
"OTAF Acceptance Test Period" means the applicable period of time
in days that the Vendor has to test and the Owner has to accept certain OTAF
Products and Services (in each case as applicable to the SCP/OTAF Products and
Services and the SPARC/OTAF Products and Services) as specified in the OTAF
Statement of Work.
"OTAF Completion Dates" means the dates and milestones as set forth
in Appendix M that are required to be met by the Vendor for the successful and
timely completion of the OTAF Statement of Work (in each case as applicable to
the SCP/OTAF Products and Services and the SPARC/OTAF Products and Services).
"OTAF Equipment" means the collective reference to the SCP/OTAF
Equipment and the SPARC/OTAF Equipment.
"OTAF Field Acceptance" means the Owner's initial acceptance of
OTAF Products and Services (in each case as applicable to the SCP/OTAF Products
and Services and the SPARC/OTAF Products and Services) and the installation
thereof, pursuant to and in accordance with the OTAF Field Acceptance Tests (in
each case as applicable to the SCP/OTAF Products and Services and the SPARC/OTAF
Products and Services) set forth in Appendix P.
"OTAF Field Acceptance Test" and "OTAF Field Acceptance Testing"
means the initial field tests performed pursuant to and in accordance with
Appendix P during the OTAF Acceptance Test Period to determine whether the OTAF
Products and Services meet the requirements and specifications set forth in the
OTAF Statement of Work (in each case as applicable to the SCP/OTAF Products and
Services and the SPARC/OTAF Products and Services).
"OTAF Final Acceptance" means the Owner's final acceptance of the
relevant OTAF Products and Services (in each case as applicable to the SCP/OTAF
Products and Services and the SPARC/OTAF Products and Services) and installation
thereof, pursuant to and in accordance with the OTAF Final Acceptance Tests set
forth in Appendix P; provided that in no event can OTAF Final Acceptance occur
with respect to any OTAF Products and Services prior to thirty (30) days after
the completion of OTAF Final Acceptance Testing applicable thereto.
"OTAF Final Acceptance Tests" and "OTAF Final Acceptance Testing"
means the OTAF Products and Services final acceptance testing as set forth in
Appendix P (in each case as applicable to the SCP/OTAF Products and Services and
the SPARC/OTAF Products and Services).
"OTAF Maintenance and Instruction Manuals" has the meaning ascribed
thereto in subsection 2.22.
"OTAF Operating Manuals" has the meaning ascribed thereto in sub-
section 2.20.2.
"OTAF Price" means the aggregate price set forth in Appendix O for
all of the SCP/OTAF Products and Services to be provided under the Contract and
described in the OTAF Statement of Work.
"OTAF Product Warranty Period" has the meaning ascribed thereto in
subsection 17.1.2.
"OTAF Products" means the collective reference to SCP/OTAF Products
and SPARC/OTAF Products.
"OTAF Services" means those services provided by the Vendor as part
of the provision, installation and continuing operation and maintenance of the
SPARC/OTAF Products and/or the SCP/OTAF Products, as the case may be, pursuant
to and in accordance with the OTAF Statement of Work.
"OTAF Software" means the collective reference to the SCP/OTAF
Software and the SPARC/OTAF Software.
"OTAF Statement of Work" means the over-the-air provisioning
functionality requirements, specifications and milestones as set forth in
Appendix M.
"Other Vendors" means vendors, other than the Vendor, with whom the
Owner has entered, or may enter in the future, into a contract for the provision
of products and services for the engineering and construction of any portion of
the Nationwide Network. Other Vendors does not include any Subcontractors in
connection with the Work to be performed under this Contract in their capacity
as Subcontractors.
"Outage" has the meaning ascribed thereto in subsection 17.4(b).
"Owner" has the meaning ascribed thereto in the prefatory paragraph
to this Contract.
"Owner Loss" means an insured loss incurred by the Owner relating
to the System.
"Owner's Succeeding Entity" has the meaning ascribed thereto in
subsection 27.22.
"Parties" has the meaning ascribed thereto in the prefatory para-
graph to this Contract.
"Patent License" has the meaning ascribed thereto in subsection
14.5.
"P1 Major Condition ("P1")" has the meaning ascribed thereto in
subsection 2.26.3(g).
"P2 Significant Problem ("P2")" has the meaning ascribed thereto in
subsection 2.26.3(g).
"P3 Minor Problem ("P3")" has the meaning ascribed thereto in sub-
section 2.26.3(g).
"Partners" means the collective reference to Sprint Corporation, a
Delaware corporation, Sprint Enterprises, L.P., a Delaware limited partnership
("Sprint"), TeleCommunications Inc., a Delaware corporation, TCI Telephony
Services, Inc., a Colorado corporation ("TCI"), Comcast Corporation, a Delaware
corporation, Comcast Telephony Services, a Delaware general partnership
("Comcast"), Cox Communications, Inc., a Delaware corporation and Cox Telephony
Partnership, a Delaware general partnership ("Cox").
"PCS" means personal communication services authorized by the FCC.
"PCS FCC Licenses" has the meaning ascribed thereto in the recitals
of this Contract.
"PCS Products" means the Vendor's PCS Equipment and Software, as
offered from time to time in the Customer Price Guide; provided that for the
purposes of this Contract, PCS Products will always (subject to subsection 10.1)
include at least (i) the SCP/HLRs, (ii) the SCP/HLR Products, (iii) the AM/HLR
(to the extent not already a PCS Product), (iv) SMS, (v) SCE, (vi) the AS
Products, (vii) the OTAF Products (viii) the Actiview Products, (ix) the TCUs
and/or the HCUs as the case may be, and (x) those other Items listed on the
Vendor's Customer Price Guide as of the Effective Date. As the context requires
and notwithstanding the above, the term PCS Products includes all Vendor
manufactured Products provided to the Owner in connection with its obligations
pursuant to the terms of this Contract, but excludes Items furnished solely as
part of Facilities Preparation Services not otherwise integral to the operation
or maintenance of the PCS Items set forth on the Customer Price Guide, including
Non-Essential Equipment.
"PCS Sub-System" means all Products and other equipment, tools and
software, all System Elements Sites and any property located thereat necessary
or desirable to provide PCS in a System Sub-Area.
"PCS Sub-System Percentage" has the meaning ascribed thereto in
subsection 17.4(c).
"PCS Sub-System Specific Outage" has the meaning ascribed thereto
in subsection 17.4(c).
"PCS System" means all Products and other equipment, tools and
software, all System Element Sites and any property located thereat necessary or
desirable to provide PCS in a given specified System Area. Each PCS System is
and will be inclusive of all PCS Sub-Systems, if any, within such PCS Systems.
"Permitted Transaction" has the meaning ascribed thereto in sub-
section 27.23.
"Person" means an individual, partnership, limited partnership,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity of whatever
nature.
"PhillieCo" means PhillieCo L.P., a Delaware limited partnership.
"PhillieCo Contract" means that certain Procurement and Services
Contract between PhillieCo L.P., a Delaware limited partnership and the Vendor,
as the same may be amended, supplemented or otherwise modified from time to
time.
"PhillieCo System" means the System, as defined in the PhillieCo
Contract.
"Preliminary RF Design" means an RF Engineering design which
incorporates as many prequalified System Element Locations (including existing
structures and other sites provided by Site Acquisition that have a high
likelihood of meeting the zoning requirements) as possible without compromising
the quality of the System or System Element Location counts, design grids,
signal level plots and prequalified site map overlays for each of the System
Areas and System Sub-Areas. The Preliminary RF Design must also include those
Items listed on Schedule 1. The Preliminary RF Design must be based upon all
information reasonably available to the Vendor or provided to the Vendor by the
Owner as of the Effective Date including, but not limited to, the information
set forth in this Contract.
"Product Contract Price" means, at the time of determination, the
Contract Price minus the costs applicable to and actually invoiced to such date
by the Owner pursuant to and in accordance with Section 6 for Facilities
Preparation Services and RF Engineering.
"Product Warranty Period" has the meaning ascribed thereto in sub-
section 17.1(a).
"Products" means the collective reference to the PCS Products, the
Equipment and the Software provided by the Vendor or any Subcontractor pursuant
to and in accordance with the terms of this Contract.
"Project Milestones" means the collective reference to the mile-
stone dates and intervals set forth in Exhibits A1 and A2. Each a "Milestone."
"Proprietary Information" has the meaning ascribed thereto in sub-
section 27.19(a).
"Punch List" means that list prepared in conjunction with the
Acceptance Tests and included in any Acceptance Certificate, which contains one
or more immaterial non-service-affecting items (specifying the cost of
completing such items either determined as of the date of the Substantial
Completion of the relevant PCS System or PCS Sub-System or within a reasonable
time thereafter) which have not been fully completed by the Vendor as of the
Substantial Completion of any PCS System or PCS Sub-System; provided that such
incomplete portion of the Work will not, during its completion, materially
impair the normal daily operation of such PCS System or PCS Sub-System in
accordance with the Specifications.
"Reviewers" has the meaning ascribed thereto in subsection 2.14.
"RF" means radio frequency.
"RF Engineering" means radio frequency engineering required in
connection with the architectural design of the System and/or any PCS System
and/or any PCS Sub-System.
"RFP" has the meaning ascribed thereto in subsection 11.9.1(a).
"RTM License" has the meaning ascribed thereto in subsection 11.6.
"RTU License" has the meaning ascribed thereto in subsection 11.1.
"SCE" means the Service Creation Environment Equipment and Software
as further described in Appendix B.
"SCP/HLR" means the Equipment and Software that provide the call
processing logic which comprises the stand-alone HLR service which contains the
PCS subscriber's or group of PCS subscriber's profile data used to provide call
completion and enhanced services and further described in Appendix B.
"SCP/HLR Hardware" means the SCP/HLR Equipment and platform
Software as set forth in Appendix B.
"SCP/HLR Price" means the aggregate price for all of the SCP/HLRs
as set forth on Appendix F.
"SCP/HLR Products" means the collective reference to SCP/HLR
Hardware, and SCP/HLR Software, SMSs, SCEs and RTUs.
"SCP/HLR Services" means those Services provided by the Vendor to
the Owner pursuant to and in accordance with the HLR Statement of Work, the
AM/HLR Specifications and the SCP/HLR Specifications.
"SCP/HLR Specifications" means the SCP/HLR specifications as set
forth in Appendix B and including, but not limited to, the specifications for
the SCE and the SMS.
"SCP/HLR Software" means the SCP/HLR Software as more fully
described in Appendix B.
"SCP/OTAF" means those Service Control Point ("SCP") OTAF Products
and Services provided by the Vendor to the Owner as further detailed in Appendix
M.
"SCP/OTAF Software" means the SCP based software for over-the-air
provisioning functionality provided to the Owner by the Vendor pursuant to and
in accordance with the OTAF Statement of Work.
"SCP/OTAF Equipment" means the equipment and hardware provided to
the Owner by the Vendor as necessary for the operation and integration of the
SCP/OTAF Software and the SCP/OTAF Services pursuant to and in accordance with
the OTAF Statement of Work. "Services" means the collective reference to all of
the services to be conducted by the Vendor as part of the Work pursuant to the
terms of this Contract including, but not limited to, Installation, Facilities
Preparation Services, RF Engineering, System Maintenance Support, System Support
Services and other repair and maintenance services, performed in accordance with
the terms of this Contract including, but not limited to, the Specifications.
Services does not include Site Acquisition, Network Interconnection or Microwave
Relocation.
"Services Warranty Period" has the meaning ascribed thereto in sub-
section 17.2(b).
"Site Acquisition" means the services to be performed by the Owner
and/or its subcontractors necessary for identifying and acquiring sufficient
rights to the System Element Locations within the System Areas and System
Sub-Areas including all requisite zoning approvals and all building approvals
required by any Governmental Entity; provided that Site Acquisition does not
include any of the Site Plan Architectural Work or the Facilities Engineering.
"Site Acquisition Delay Period" has the meaning ascribed thereto in
subsection 2.41.
"Site Acquisition Substantial Completion" means, with respect to
any PCS System or PCS Sub-System, the point at which the Owner will have
acquired, by purchase, lease or otherwise, rights to a sufficient number of
System Element Locations within the specified System Area or System Sub-Area to
be covered by such PCS System or PCS Sub-System such that the performance
criteria specified in Exhibit F applicable to such PCS System or PCS Sub-System
would be substantially satisfied in the reasonable opinion of the Owner subject
to the reasonable acceptance of the Vendor. If the Vendor upon receiving notice
from the Owner that Site Acquisition Substantial Completion has been achieved in
any PCS System or PCS Sub-System disagrees with the Owner's claim, then the
Vendor will have ten (10) Business Days to detail its disagreement in writing to
the Owner and a Third Party Engineer chosen by the Owner and such Third Party
Engineer will have ten (10) Business Days from the receipt of such writing to
make a determination whether or not the Owner's claim of Site Acquisition
Substantial Completion is reasonable. The Third Party Engineer will have no
discretion or authority to provide the Parties with any answer other than
whether in its judgment the Owner's claim is reasonable. Such determination by
the Third Party Engineer will be final and binding upon the Parties.
"Site Acquisition Substantial Completion Date" means with respect
to any PCS System or PCS Sub-System the date on which the Owner will have
achieved Site Acquisition Substantial Completion.
"Site Plan Architectural Work" means the preparation of
architectural and/or engineering drawings, plans and/or specifications necessary
to obtain zoning permits and/or approvals, building permits and/or approvals
and/or conditional use permits for any given System Element Facility.
"SMS" means the service management system equipment and software
described in Appendix B.
"Software" means (a) all computer software furnished hereunder for
use with any Equipment including, but not limited to, computer programs
contained on a magnetic or optical storage medium, in a semiconductor device, or
in another memory device or system memory consisting of (i) hardwired logic
instructions which manipulate data in central processors, control input-output
operations, and error diagnostic and recovery routines, or (ii) instruction
sequences in machine-readable code furnished hereunder that control call
processing, peripheral equipment and administration and maintenance functions,
(b) any Software Enhancements, Software features and Software Upgrades furnished
by the Vendor to the Owner hereunder, and (c) any Documentation furnished
hereunder for use and maintenance of the Software; provided that no Source Code
versions of Software are included in the term Software.
"Software Combined Release" means a Software Upgrade which is at
any time combined with any Software Enhancement.
"Software Enhancements" means modifications or improvements made to
the Software relating to PCS Products which improve performance or capacity of
the Software or which provide additional functions to the Software.
"Software Licenses" means the collective reference to the RTU Li-
cense and the RTM License.
"Software Revision Level" means each version of Software that
reflects any amendment, modification or change from the immediately preceding
version.
"Software Upgrades" means periodic updates to the Software issued
by the Vendor to the Owner under Warranty and Software maintenance obligations
to correct Defects or Deficiencies in the Software relating to PCS Products.
"Sony/Qualcomm Agreement" has the meaning ascribed thereto in sub-
section 2.3(a).
"Source Code" means Software in human-readable form and all
documentation, such as flow charts, schematics and annotations, that comprise
the precoding detailed design specifications (which constitutes the "embodiment
of the intellectual property" of the Software (excluding Third Party Software)
as such concept is referenced in Section 365(n) of the United States Bankruptcy
Code, as amended), which is necessary to enable the Owner to maintain and modify
the Software in accordance with the licenses granted in this Contract.
"SPARC" means certain Sun System workstation equipment.
"SPARC/OTAF" means those SPARC OTAF Products and Services provided
by the Vendor to the Owner as further detailed in Appendix M.
"SPARC/OTAF Equipment" means the equipment and hardware provided to
the Owner by the Vendor as necessary for the operation and integration of the
SPARC/OTAF Software and the OTAF Services pursuant to and in accordance with the
SPARC/OTAF Statement of Work.
"SPARC/OTAF Software" means the SPARC based software for
over-the-air provisioning functionality provided to the Owner by the Vendor
pursuant to and in accordance with the OTAF Statement of Work.
"Specifications" means the collective reference to the
specifications and performance standards of the design, Facilities Preparation
Services, Engineering, Products, Installation and Services contemplated by this
Contract and includes any Expansions, amendments, modifications and/or other
revisions thereto made in accordance with the terms of this Contract and as more
fully set forth in Exhibits C, D, E and F and in the AM/HLR Specifications, the
SCP/HLR Specifications, the HLR Statement of Work, the AS Statement of Work, the
OTAF Statement of Work and the Actiview Statement of Work or as otherwise
determined hereunder pursuant to the terms of the Contract; provided that,
except as otherwise provided in or determined pursuant to the Contract or as
otherwise mutually agreed between the Parties, the applicable Specifications for
an Item will be the Vendor's or other manufacturer's standard technical
specifications for such Item, as applicable, unless the Owner will have
specifically not agreed with such Vendor or other manufacturer specification;
and provided further, that with respect to Facilities Preparation Services,
design, Engineering, Products, Installation and Services for which
specifications and performance standards are not provided and listed in such
Exhibits (such Exhibits including, but not limited to, the AM/HLR
Specifications, SCP/HLR Specifications, the HLR Statement of Work, the AS
Statement of Work, the OTAF Statement of Work and the Actiview Statement of
Work), "Specifications" refers to performance, functionality and fitness for the
intended purpose in which such design, Facilities, Preparation Services,
Engineering, Products, Installation and Services are employed.
"Structural Architectural Work" means the preparation of all
architectural drawings and blueprints relating to the structural specifications
for a System Element Facility.
"Subcontractor" means a contractor, vendor, supplier, licensor or
other Person, having a direct or indirect contract with the Vendor or with any
other Subcontractor of the Vendor who has been hired specifically to assist the
Vendor in certain specified areas of its performance of its obligations under
this Contract including, without limitation, performance of any part of the
Work.
"Substantial Completion" means the point at which the Vendor has
completed a portion of the Work other than specified Items set forth on
applicable Punch Lists such that the geographic areas of any System Area and/or
System Sub-Areas as specified in Schedule 4 all have been covered to the extent
set forth in Schedule 4, in accordance with the Specifications and the System
Standards and as verified to the Owner in accordance with the criteria and
requirements set forth in Exhibit B3.
"Substantial Completion Certificate" means, with respect to a given
PCS System and/or PCS Sub-System, a document submitted by the Vendor to the
Owner and signed by an authorized representative of the Owner and an authorized
officer of the Vendor stating that the Vendor has successfully completed the
Acceptance Tests applicable to the Substantial Completion of the Work to be done
in such PCS System and/or PCS Sub-System, as the case may be, in accordance with
the requirements of Exhibit B3.
"Successor" has the meaning ascribed thereto in subsection 27.22.
"Switch Site" means the System Element Location designated by the
Owner as the site in which it wants the MSC(s) to be Installed in any given PCS
System.
"Switch Site Notice" has the meaning ascribed thereto in subsection
2.6(d).
"Switch Site Notice Date" has the meaning ascribed thereto in sub-
section 2.6(d).
"Switch Site Ready Date" has the meaning ascribed thereto in sub-
section 2.6(d).
"System" means all of the PCS Systems and PCS Sub-Systems built by
the Vendor in the System Areas and System Sub-Areas allocated to the Vendor
pursuant to the terms of this Contract and as set forth on Schedule 4.
"System Areas" has the meaning ascribed thereto in the recitals to
this Contract.
"System Element" means the Equipment and Software required to
perform radio, switching and/or functions for the System and/or any PCS System
and/or any PCS Sub-System (which may include, without limitation, Base Station
("BTS"), Equipment Identity Register ("EIR"), Messaging System ("MXE"), Mobile
Switching Center/Visitor Location Register ("MSC/VLR"), Mobile Service Node
("MSN"), Signal Transfer Point ("STP"), Home Location Register ("HLR"), Service
Control Point ("SCP"), Intelligent Peripheral ("IP") and Access Manager ("AM")).
"System Element Facility" means the structures, improvements,
foundations, towers, and other facilities necessary to house or hold any System
Element and any related Equipment to be located at a particular System Element
Location.
"System Element Location" means the physical location for a System
Element.
"System Element Site" means the collective reference to a
particular System Element, together with the related System Element Location and
System Element Facility.
"System Element Verification" means the Vendor's laboratory level
testing on the Products conducted by the Vendor in accordance with Exhibit B3.
"System Maintenance Support" means those Services offered by the
Vendor for maintenance of any of the Products and/or any System Element or
collection thereof.
"System Managers" means each of the managers designated by the
Owner and the Vendor, respectively, for the purposes of subsection 23.1.
"System Standards" means the collective reference to the industry
standards specified in Exhibits C, D, F, G and H.
"System Sub-Areas" has the meaning ascribed thereto in the recitals
to this Contract.
"System Support Services" means those services offered by the
Vendor relating to System design, enhancement and optimization.
"System Warranty Period" has the meaning ascribed thereto in sub-
section 17.3.
"TCG" means the collective reference to Teleport Communications
Group, Inc. and TCG Partners.
"TCUs" means the Two Channel Card Units which currently carry two
voice paths in the existing cells.
"Technical Documentation" means the documentation identified as
such in the Specifications.
"Term" has the meaning ascribed thereto in subsection 5.2.
"Test-bed Laboratory" has the meaning ascribed thereto in subsec-
tion 2.5.
"Third Party Engineer" means any one of the Persons listed on
Schedule 14.
"Third Party Software" means Software which is independently
developed by a third party, sublicensed to the Owner under this Contract or
otherwise provided with the Products in accordance with the Specifications.
"Training" has the meaning ascribed thereto in subsection 2.23.
"Trouble Report ("TR")" has the meaning ascribed thereto in sub-
section 2.26.2.
"United States" means the fifty states of the United States and the
District of Columbia.
"Utilities Work" means the installation of electric and telephone
utilities at the System Element Locations.
"Vendor" has the meaning ascribed thereto in the prefatory para-
graph to this Contract.
"Vendor-Controlled Location" has the meaning ascribed thereto in
subsection 2.12.
"Vendor Developments" has the meaning ascribed thereto in subsec-
tion 2.11.1.
"Vendor Event of Default" has the meaning ascribed thereto in sub-
section 24.2.
"Vendor Patents" has the meaning ascribed thereto in subsection
14.5.
"Vendor procedural error" has the meaning ascribed thereto in sub-
section 17.4(c).
"Vendor's Succeeding Entity" has the meaning ascribed thereto in
subsection 27.22.
"Warranty Damages" has the meaning ascribed thereto in subsection
17.4(c).
"Warranty Periods" means the collective reference to the Product
Warranty Period, the Services Warranty Period and the System Warranty Period.
"Work" means all phases of this Contract, including, as required by
the terms of this Contract, engineering and design, procurement, manufacture,
construction and erection, installation, training, start-up (including
calibration, inspection and start-up operation), testing and start-up and
testing operation with respect to the System and/or any PCS System and/or any
PCS Sub-System and/or any part thereof to be performed by the Vendor or its
Subcontractors pursuant to this Contract. As required by the terms of this
Contract, Work includes (i) all labor, materials, equipment, services, and any
other items to be used by the Vendor or its Subcontractors in the prosecution of
this Contract, wherever the same are being engineered, designed, procured,
manufactured, delivered, constructed, installed, trained, erected, tested,
started up or operated during start-up and testing and whether the same are on
or are not on any System Element Location or any other site within the System
and/or any PCS System and/or any PCS Sub-System and (ii) all related items which
would be required of a contractor of projects of comparable size and design
which are necessary for the System and/or any PCS System and/or any PCS
Sub-System and/or any part thereof to (x) operate in accordance with all
Applicable Laws and Applicable Permits, and (y) provide the operating personal
communications service systems required pursuant to this Contract. The Vendor
will be responsible for providing in accordance with the terms of this Contract
any and all additional items and services which are not expressly included by
the terms of this Contract and which are reasonably required for construction
and start-up of the System and/or any PCS System and/or any PCS Sub-System.
1.2 Other Definitional Provisions. (a) When used in this Contract,
unless otherwise specified herein, all terms defined in this Contract will have
the defined meanings set forth herein. Terms defined in the Exhibits are deemed
to be terms defined herein; provided that in the case of any terms that are
defined both in this Contract (excluding Exhibits) and/or an Exhibit, the
definitions contained in this Contract will supersede such other definitions for
all purposes of this Contract; provided further, that definitions contained in
any Exhibit will control as to such Exhibit.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Contract refer to this Contract as a whole and
not to any particular provision of this Contract and Section, subsection,
Schedule and Exhibit references are to this Contract unless otherwise specified.
(c) The meanings given to terms defined in this Contract are
equally applicable to both the singular and plural forms of such terms.
(d) Notwithstanding anything to the contrary, the provisions of
subsections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9(b), 2.10, 2.25, 2.38, 2.40, 2.41,
6.4, 6.5, 6.7, 6.8, and 7.1 and Section 4 are not applicable to (i) AS Products
and AS Services and (ii) Actiview Products and Actiview Services.
SECTION 2 SCOPE OF WORK, RESPONSIBILITIES AND PROJECT
2.1 Scope of Work. Upon the terms and conditions herein set forth,
the Vendor will provide all Products and Services to the Owner required for the
establishment of the System including, but not limited to, the Vendor's
obligation to engineer, equip, install, build, test and service the PCS Systems
and the PCS Sub-Systems in the System Areas and System Sub-Areas set forth on
Schedule 4 in accordance with the Specifications and that otherwise satisfies
all conditions of Final Acceptance; provided, that the Vendor will not be
responsible for Site Acquisition (except to the extent certain Facilities
Preparation Services, including Site Plan Architectural Work, are required for
the successful completion of Site Acquisition), Network Interconnection or
Microwave Relocation. The Vendor must complete the Work in accordance with the
Project Milestones set forth in Exhibit A1 and as further specified herein. The
Vendor must furnish all labor, materials, tools, transportation and supplies
required to complete the Work in accordance with the Specifications and the
terms of this Contract. For the purposes of this Contract, it is expressly
understood and agreed between the Parties that certain PCS Systems (the System
Areas of which are set forth on Schedule 4) are divided into PCS Sub-Systems
(the System Sub-Areas of which are set forth on Schedule 4) and that any such
PCS System that is so divided shall not be deemed to work and/or operate in
accordance with the terms of this Contract, including, but not limited to, the
Specifications, until and unless all of the PCS Sub-Systems within such PCS
System work in accordance with the Specifications.
2.2 Additional Coverage. (a) The Owner has the option from time to
time, upon not less than thirty (30) days written notice to the Vendor, to
designate additional geographic areas in the United States, including, but not
limited to, additional System Sub-Areas and/or System Areas, as to which the
Owner may purchase from the Vendor some or all, as determined by the Owner in
its sole discretion, of the Products and Services required for the PCS coverage
of such areas as provided for in this Contract, all on the terms and conditions
set forth in this Contract; provided that the Parties will mutually agree in
good faith on the payment terms (provided that pricing will be as set forth in
this Contract), liquidated damages, Project Milestones and the System
performance criteria applicable to such additional coverage pursuant to this
subsection 2.2; and provided further that any such agreement on (i) such Project
Milestones must be based on substantially the same intervals (including, but not
limited to, the number of days specified in each such interval) as are set forth
in Exhibits A1 and A2, to the extent possible, (ii) such payment terms and
liquidated damages must be based on substantially the same terms as are
otherwise set forth in this Contract, and (iii) such System performance criteria
must be based on substantially the same System performance criteria as are set
forth in Exhibit F, to the extent possible. The Parties agree that this
subsection 2.2(a) will be effective at any time during the Term of this Contract
as to the determination of payment terms (other than pricing) and Project
Milestones applicable to the Vendor's provision of additional coverage pursuant
to this subsection 2.2(a) only if (i) the aggregate price of the Products and
Services to be provided by the Vendor at such time under this subsection 2.2(a)
is at such time at least five million dollars ($5,000,000) and (ii) the Vendor
is at such time providing Installation Services and at least one other Service
provided for under this Contract in connection with such additional coverage
provided by the Vendor at any time during the Term of this Contract pursuant to
this subsection 2.2(a). Unless otherwise mutually agreed among the Parties, the
payment terms for additional Products provided by the Vendor after Final
Acceptance of the last PCS System within the Initial System not otherwise
covered by or otherwise determined pursuant to this subsection 2.2(a) will be
subject to the terms of Section 6.
(b) The Owner has the option from time to time upon not less than
thirty (30) days' prior written notice to the Vendor and in accordance with the
applicable change order provisions of subsection 7.2, to require the Vendor to
increase the level of capacity or coverage of an already allocated PCS System
and/or PCS Sub-System (whether such PCS System or PCS Sub-System has been so
allocated pursuant to Schedule 4 or subsection 2.2(a)), all on the terms and
conditions of this Contract. From time to time prior to the Substantial
Completion of the given PCS System which would be so affected, the Owner will
have the right to, upon thirty (30) days prior written notice to the Vendor,
divide an applicable System Area into separate System Sub-Areas for the
build-out of separate PCS Sub-System(s) not indicated on Schedule 4 as of the
Effective Date; provided that such additional PCS Sub-System will at least meet
the requirements set forth in clauses (i) and (ii) of the second to last
sentence of subsection 2.2(a) above. In such event, such a newly created PCS
Sub-System will, from such point forward, be treated as a PCS Sub-System
pursuant to the terms of this Contract.
(c) Where the Owner wishes to purchase PCS Products or Services for
use and/or application in a country outside the United States but within North
America including any territory of the United States not otherwise covered by
the definition of the "United States" as set forth herein, the Owner and the
Vendor will, in good faith, negotiate a separate agreement for such purchase
upon substantially all of the same terms set forth in this Contract, with only
such modifications as may reasonably be appropriate to reflect the international
nature of such transaction and to assure protection of the Vendor's intellectual
property. The PCS Product and Software prices and price discounts set forth in
this Contract will prevail in any such separate agreement, subject only to
reasonable pricing adjustments which will be in no event ten percent (10%)
higher than the prices set forth in or determined pursuant to this Contract plus
foreign import duties and taxes. Any such agreement may, at the Vendor's option,
be entered into by any of the subsidiaries or other affiliates of the Vendor as
listed on Schedule 13.
2.2.1 AS Products and AS Services Additional Coverage. Where the
Owner wishes to purchase AS Products or AS Services for use and/or application
in a country outside the United States but within North America including any
territory of the United States not otherwise covered by the definition of the
"United States" as set forth herein, the Owner and the Vendor will, in good
faith, negotiate a separate agreement for such purchase upon substantially all
of the same terms set forth in this Contract, with only such modifications as
may reasonably be appropriate to reflect the international nature of such
transaction and to assure protection of the Vendor's intellectual property
applicable to such AS Products and AS Services.
2.3 Handsets. (a) The Vendor must supply the Owner with two
thousand (2,000) subscriber handsets at the prices set forth on Schedule 2 and
substantially meeting the applicable criteria set forth in Exhibit H within
sixty (60) days prior to the Substantial Completion of the Initial PCS System in
accordance with Exhibit B3; provided that the criteria set forth in Exhibit H
will substantially conform to the applicable specifications and/or criteria (but
which will in no event be more than what is required by Exhibit H) agreed
between the Owner and Sony/Qualcomm (the "Sony/Qualcomm Agreement").
(b) The Vendor must supply at the prices set forth on Schedule 2
one hundred (100) handsets per PCS System within the Initial System, acceptable
to the Owner, and the necessary equipment related thereto for testing and
operation of each such PCS System pursuant to, and in accordance with, the terms
of this Contract, Exhibit B3 and substantially in accordance with Exhibit H to
the extent applicable; provided however, with the consent of the Owner, which
consent will not be unreasonably withheld, such handsets will not be required to
be in substantial compliance with the criteria set forth in Exhibit H if they
will otherwise be sufficient to test and accurately demonstrate that the PCS
System meets the Specifications. The one hundred (100) for each PCS System
handsets required to be delivered by the Vendor pursuant to the immediately
preceding sentence will be delivered to the Owner on or before Milestone 7 (as
set forth in Exhibit A1) for the first PCS Sub-System completed in such PCS
System.
(c) Notwithstanding any other provision of this Contract, including
Section 17, the Vendor does not warrant the handsets provided hereunder, but to
the extent that the Vendor is authorized to do so by the terms of any applicable
agreement or agreements with such third party suppliers, the Vendor will assign
or otherwise transfer any warranty received from its supplier(s) of the handsets
to the Owner at no additional cost to the Owner. For the purposes of this
Contract a supplier of handsets to the Vendor will not be deemed a
Subcontractor.
2.4 Initial PCS System. Pursuant to Exhibit B3, the Vendor must
achieve Substantial Completion of the Initial PCS System in accordance with the
requirements of Exhibit B3 prior to, and as a condition of, the Substantial
Completion of any other PCS System and/or PCS Sub-System within the Initial
System. This requirement in no way relieves the Vendor of its obligations prior
to the Substantial Completion of the Initial PCS System to continue with the
Work on all of the PCS Systems and PCS Sub-Systems constituting the Initial
System in accordance with the requirements of this Contract and the Project
Milestones applicable to each such PCS System and/or PCS Sub-System.
2.5 System Element Verification; Test-bed Laboratory. (a) In
accordance with Milestone 4 (as set forth on Exhibit A1) the Vendor must
successfully complete System Element Verification pursuant to the terms of this
Contract including, but not limited to, the Specifications and Exhibit B3 no
later than August 19, 1996.
(b) The Vendor will supply, at no additional cost to the Owner
(except as provided in Exhibit I), the Products and Services necessary for the
establishment of a test-bed laboratory, which laboratory will include the
Products and Services set forth on Exhibit I (the "Test-bed Laboratory"). Such
Products and Services will be subject to the applicable warranty terms of this
Contract. The Vendor will provide all relevant Software Upgrades, Software
Enhancements and Software Combined Releases applicable to the Test-bed
Laboratory. Equipment Upgrades, Equipment Enhancements and Equipment Combined
Releases will be available for the Test-bed Laboratory as provided in this
Contract. The Test-bed Laboratory will be provided by the Vendor in accordance
with Milestone 3 applicable to the Initial PCS System as set forth on Exhibit
A1, but in no event will the Vendor be required to provide the Test-bed
Laboratory earlier than ninety (90) days after the building site for such
laboratory has been made ready by the Owner and the Vendor has received the
Owner's notice thereof, provided that such notice will not be delivered to the
Vendor before April 19, 1996 (the "Building Ready Date"). The Owner expressly
agrees that it will not use the Test-bed Laboratory for In Revenue Service or
any purpose other than testing without the prior written consent of the Vendor,
which consent the Vendor will not unreasonably withhold or delay.
(c) The Vendor will supply (and Exhibit I will be deemed to
include), at no cost to the Owner, (i) one mated pair SCP/HLRs with one SMS,
(ii) one SCE with eight RTUs, (iii) one AM/HLR, (iv) one source code compiler
and (v) one copy of "Execution Environment" all in accordance with and pursuant
to the Specifications for the Test-bed Laboratory no later than the dates
specified in the HLR Statement of Work. All provisions of subsections 2.5(a) and
2.5(b) above will apply similarly to the Products listed in this subsection
2.5(c). Nothing in this subsection 2.5(c) will be deemed to release or
accelerate the Project Milestones and/or delivery requirements set forth in
subsections 2.5(a) and 2.5(b) above.
(d) The Vendor will supply (and Exhibit I will be deemed to
include), at not cost to the Owner (i) a SPARC/OTAF Product platform (consisting
of at least two (2) CPUs) plus accompanying OTAF Software and OTAF Equipment all
in accordance with and pursuant to the Specifications for the Test-bed
Laboratory no later than October 23, 1996 and (ii) SCP/OTAF Software all in
accordance with and pursuant to the Specifications for the Test-bed Laboratory
no later than May 15, 1997. All provisions of subsections 2.5(a) and 2.5(b)
above will apply similarly to the Products listed in clauses (i) and (ii) above
provided by the Vendor pursuant to this subsection 2.5(d). Nothing in this
subsection 2.5(d) will be deemed to release or accelerate the project Milestones
and/or delivery requirements set forth in subsections 2.5 (a) and 2.5 (b) above.
(e) The Vendor will supply (and Exhibit I will be deemed to
include) at no cost to the Owner and simultaneous with each release of Actiview
Software, an installed copy of such Actiview Software for the Test-bed
Laboratory all in accordance with and pursuant to the Specifications. All
provisions of subsections 2.5(a) and 2.5(b) above will apply similarly to the
Products listed in the first sentence of this subsection 2.5(e) provided by the
Vendor pursuant to this subsection 2.5(e). Nothing in this subsection 2.5(e)
will be deemed to release or accelerate the project Milestones and/or delivery
requirements set forth in subsections 2.5 (a) and 2.5 (b) above.
2.6 RF Engineering; Site Acquisition and MSC Installation. (a) In
accordance with Milestone 2 as set forth on Exhibit A1, the Vendor has delivered
to the Owner the Preliminary RF Design for each of the System Areas and System
Sub-Areas in accordance with the requirements and criteria set forth in Exhibit
B1 and Schedule 1. The Vendor has provided the Owner with the applicable search
rings for each PCS Sub-System based upon the Preliminary RF Design. The Owner
and the Vendor agree to cooperate with each other to complete the RF Engineering
and the Site Acquisition. The Owner must notify the Vendor of desired coverage
areas, RF Engineering parameters or other information or restrictions the Owner
wishes to be included in the Final RF Engineering Plan for each PCS System
and/or PCS Sub-System. In accordance with Exhibit B1, the Vendor will do the RF
Engineering in each of the PCS Systems and/or PCS Sub-Systems and in connection
therewith will use the parameters, information and restrictions supplied by the
Owner. As part of the RF Engineering, the Vendor will establish "search rings"
in each of the PCS Systems and/or PCS Sub-Systems that will specify areas in
which the Owner may proceed with Site Acquisition.
(b) In accordance with Exhibit B1 the Vendor, at its request, must
be kept informed of the progress made on ongoing Site Acquisition within each
System Area and System Sub-Area. As the Site Acquisition progresses, the Vendor
agrees to regularly alter the RF Engineering plan to determine a new search ring
or rings to take into account any changes or modifications requested by the
Owner or otherwise requested by the Owner due to the Owner's inability to
acquire sufficient rights to a location which could constitute a System Element
Location in a timely or economic manner. When making changes to the RF
Engineering plan the Vendor must take into account the Site Acquisition already
completed by the Owner.
(c) Milestone 5 (as set forth in Exhibit A1) will be achieved in
each PCS System and PCS Sub-System in accordance with this subsection 2.6(c);
provided that for each PCS System and PCS Sub-System the appropriate MSCs have
been installed by the Vendor in the Owner's relevant Switch Sites within each
such PCS System and PCS Sub-System in accordance with subsection 2.6(d) below.
In accordance with the Project Milestones set forth on Exhibit A1 and the
requirements and criteria set forth in Exhibit B1, within five (5) days of the
Owner achieving Site Acquisition Substantial Completion within any System Area
or System Sub-Area (the "Final RF Review Period"), the Owner and the Vendor will
use their best efforts to agree on a final System Element Location count (the
"Final Site Count") and a final RF Engineering plan (the "Final RF Engineering
Plan") for such System Area or System Sub-Area, as the case may be, upon which
the PCS System for such System Area and/or System Sub-Area, as the case may be,
will be built by the Vendor. Failure of the Owner and the Vendor to reach
satisfactory agreement on a Final Site Count and/or a Final RF Engineering Plan
for any given System Area or System Sub-Area within the Final RF Review Period
will automatically result in the referral of any such disagreement to the most
senior RF engineers of both the Owner and the Vendor for their review and
resolution within five (5) days after the end of any such Final RF Review
Period. If the senior RF engineers fail to resolve any such disagreement within
the extended five (5) day resolution period, the disagreement will automatically
be referred for resolution in accordance with subsection 23.1. It is understood
by the Parties that during the period of any such disagreement and the
resolution thereof in accordance with the Contract, the Work on such PCS System
and/or PCS Sub-System, to the extent possible, will be ongoing and that
Substantial Completion on such PCS System and/or PCS Sub-System shall require
agreement by the Parties on a Final RF Engineering Plan and/or a Final Site
Count for such PCS System and/or System Area and/or PCS Sub-System.
(d) The Vendor will install each of the MSCs in each of the Switch
Sites within sixty (60) days of the Switch Site Ready Date; provided that (i)
the Owner will have provided the Vendor with the MSC configuration engineering
information at least one hundred (100) days prior to the Switch Site Notice
Date, for each such MSC, such that the Vendor may actually perform the Owner's
MSC configuration engineering (other than the Switch Site layout configuration),
(ii) the Owner will have provided the Vendor with the applicable Switch Site
description (in appropriate detail) at least sixty (60) days prior to the Switch
Site Notice Date and (iii) as of such Switch Site Ready Date the applicable
Switch Site will have been made ready by the Owner such that the relevant MSC
can in fact be installed by the Vendor. For the purposes hereof (i) the "Switch
Site Ready Date" means the date specified by the Owner as the date on which the
Switch Site will in fact be ready for MSC installation as communicated to the
Vendor by the Owner in the Owner's Switch Site Notice to the Vendor, (ii) the
"Switch Site Notice Date" will mean, as to any Switch Site Notice, the date on
which such notice was delivered to the Vendor by the Owner and (iii) the "Switch
Site Notice" will mean the notice provided to the Vendor by the Owner in
sufficient detail to describe the Switch Site so that the Vendor may reasonably
engineer the layout of the MSC configuration specifically for such Switch Site.
Nothing contained herein will in any way limit the Vendor's obligation pursuant
to the terms of this Contract to do the MSC engineering and the RF Engineering
in accordance with the terms of this Contract. Pursuant to this subsection
2.6(d) in no event will the Owner provide the Vendor the Switch Site Notice more
than sixty (60) days later than the date the Owner delivers the Vendor the Build
Notice pursuant to subsection 2.7(a).
2.7 Facilities Preparation Services and Installation. (a) For any
PCS System and/or PCS Sub-System within the Initial System prior to Milestone 5
(as set forth on Exhibit A1) for such PCS System or PCS Sub-System, as the case
may be, the Owner (i) may, in its discretion, provide notice to the Vendor when
it has achieved Site Acquisition of at least fifty (50) System Element Locations
in any given PCS System and/or PCS Sub-System, as the case may be, or (ii) in
any event, (if the Owner hasn't already provided notice pursuant to clause (i)
above) will provide such notice to the Vendor when it has achieved Site
Acquisition of at least thirty percent (30%) of the System Element Locations in
such PCS Sub-System, as the case may be (in either event, the "Build Notice").
The Build Notice calculation will be based upon the Owner's reasonable estimate
of System Element Locations within or in connection with the Preliminary RF
Design applicable to the PCS System and/or PCS Sub-System in which such Build
Notice is issued to the Vendor. The Build Notice for each PCS System or PCS
Sub-System will also include the Owner's best forecast based upon information
available at such time (the "M5 Forecast") of when it expects to be able to
declare Site Acquisition Substantial Completion within such PCS System or PCS
Sub-System. The Owner understands that the Vendor will not be required to
commence Facilities Preparation Services and/or Installation in any PCS System
or PCS Sub-System until and unless the Vendor has received the applicable Build
Notice pursuant to and in accordance with this subsection 2.7.
(b) In accordance with the Project Milestones specified in Exhibit
A and the requirements and criteria of Exhibit B2, for each System Area and/or
System Sub-Area the Vendor must complete the Facilities Preparation Services for
all System Element Locations within such PCS System and/or PCS Sub-System, as
applicable, in accordance with the construction criteria set forth in Exhibit E
and the performance criteria set forth in Exhibit F no later than ninety (90)
days from the Owner/Vendor agreement on a Final Site Count and a Final RF
Engineering Plan for such System Area and/or System Sub-Area; provided that upon
the prior written request of the Vendor, the Owner may consent (which consent
will not be unreasonably withheld) to postpone Milestone 6 (as set forth in
Exhibit A1) with respect to any PCS System and/or PCS Sub-System by not more
than an additional sixty (60) days in the event that more than ten percent (10%)
of the System Element Locations in such PCS System and/or PCS Sub-System
estimated as of the date of the Build Notice for such PCS System and/or PCS
Sub-System have not been fully acquired by the Owner immediately prior to the
date on which Milestone 5 (as set forth in Exhibit A1) otherwise occurs in such
PCS System and/or PCS Sub-System. Pursuant to the Project Milestones the Vendor
must complete Installation of the Products for any given PCS System within
thirty-two and one half (32-1/2) days of its completion of the Facilities
Preparation Services in accordance with Milestone 6 (as set forth on Exhibit A1)
for such PCS System pursuant to the requirements and criteria set forth in
Exhibit D and Exhibit F.
2.8 Site Acquisition Modifications. In the event that the Owner
determines that it is unlikely to achieve Site Acquisition Substantial
Completion for any PCS System and/or PCS Sub-System in a timely and
cost-effective manner, the Vendor will modify certain performance criteria set
forth in Exhibit F with respect to such PCS System and/or PCS Sub-System in the
manner and to the degree that the Owner reasonably specifies in writing to the
Vendor in accordance with the terms of Exhibit B3. In the event the Owner
notifies the Vendor of a modification to the System performance criteria for
such PCS System and/or PCS Sub-System pursuant to this subsection 2.8, such
modified criteria, including any such lower number of System Element Locations
that the Owner, in its sole discretion, deems at such time to be satisfactory so
as to constitute Site Acquisition Substantial Completion, will be deemed the
performance criteria and the System Element Location count applicable to such
PCS System for the purposes of Milestone 5 (as set forth on Exhibit A1) and all
other remaining Project Milestones for such PCS System and/or PCS Sub-System
thereafter.
2.9 Design/System Architecture and Engineering; Interoperability.
(a) The Vendor must provide all Engineering and design services necessary for
the completion of the Work and the System in conformity with the Specifications
and the CDMA standards, including, but not limited to, the Engineering and
design necessary to describe and detail the System and the specified PCS Systems
and/or PCS Sub-Systems.
(b) Pursuant to and in accordance with the terms of Exhibits B3 and
G, BTS/BSC-MSC Interoperability must be demonstrated on or before December 1,
1996 (provided that such date will change to reflect the actual delay beyond
December 31, 1995 in the finalization of "Attachment A" to be attached to
Exhibit G); provided that in any event the requirements of this subsection
2.9(b) are a condition to the Vendor's Substantial Completion of the last PCS
System within the Initial System and Substantial Completion of such last PCS
System will not be deemed to have been achieved by the Vendor unless and until
such Interoperability will have been demonstrated in accordance with the
criteria set forth in Exhibit G; provided further that any delay in such
Interoperability which is not due substantially to the fault of the Vendor, in
the reasonable opinion of the Owner, will not be a delay pursuant to the terms
of this subsection 2.9(b).
(c) It is expressly understood and agreed by the Vendor that the
Substantial Completion of any PCS System and/or PCS Sub-System will (in addition
to all other requirements of PCS System (and/or PCS Sub-System) Substantial
Completion set forth in this Contract) be subject to, and conditioned upon, such
PCS System and/or PCS Sub-System, as the case may be, pursuant to and in
accordance with the Specifications, operating and interoperating with any then
operating and/or in service Owner and/or Affiliate PCS Systems and PCS
Sub-Systems (and/or PCS systems and/or PCS sub-systems, as the case may be)
which comply with the relevant ANSI standards and other specifications
identified in Exhibit D.
(d) The Vendor will use its best efforts to work with Nortel in
order to ensure that the AM/HLRs and SCP/HLRs work with the Equipment and
Software (as defined in the Nortel Contract) provided by Nortel so that in a
timely manner the AM/HLR and SCP/HLR Products and Services provide service to
the entire Nationwide Network (including, but not limited to, the Nortel
constructed portion of the Nationwide Network) in accordance with the AM/HLR
Specifications and the SCP/HLR Specifications, as applicable. Notwithstanding
anything stated herein to the contrary, the Vendor will not be liable for the
failure of any of the AM/HLRs and/or the SCP/HLRs to properly operate with the
Nortel System (as such term is defined in the Nortel Agreement) where such
failure was directly caused by Nortel's failure to provide timely and accurate
specifications or to make its Equipment accessible and to operate with the
AM/HLRs and/or SCP/HLRs in accordance with and pursuant to the Lucent/Nortel
License Agreement. The Vendor will also use its best efforts to work with Nortel
in order to ensure that the AS Products work with the Equipment and Software (as
defined in the Nortel Contract) provided by Nortel so that in a timely manner
the AS Products and Services provide service to the entire Nationwide Network
(including, but not limited to, the Nortel constructed portion of the Nationwide
Network) in accordance with the AS Statement of Work, as applicable.
Notwithstanding anything stated herein to the contrary, the Vendor will not be
liable for the failure of any of the AS Products to properly operate with the
Nortel System (as such term is defined in the Nortel Agreement) where such
failure was directly caused by Nortel's failure to provide timely and accurate
specifications or to make its Equipment accessible and to operate with the AS
Products in accordance with and pursuant to the Lucent/Nortel License
Agreement-OAM&P.
(e) Commencing as of July 15, 1996, the Vendor will have and will
continue to regularly update (including the provision of at least monthly
written updates) the Owner as to the Vendor's progress in developing and being
able to timely deliver the AM/HLRs and the SCP/HLRs for both the Test-bed
Laboratory and the Nationwide Network.
(f) Notwithstanding anything to the contrary in the Contract,
Substantial Completion of any PCS System or PCS Sub-System, as the case may be,
within the Initial System, and the testing required therefor, will expressly
require and be conditioned upon the successful integration and interoperation
(in accordance with the AM/HLR Specifications), of the other Products within any
such PCS System and/or PCS Sub-System with the then existing AM/HLRs within the
Nationwide Network.
(g) For each applicable Actiview Software release, the Acceptance
Procedures for such release are to be mutually agreed between the Parties no
later than one (1) week prior to the delivery by the Vendor of any such release.
Failure of the Parties to so mutually agree at such time will in no way modify
the Vendor's obligation to timely deliver any such Actiview Software release
pursuant to and in accordance with the Actiview Statement of Work.
2.10 Certification. The Vendor must coordinate its performance of
the Services described in subsection 2.9 with the Engineering and design efforts
(including, without limitation, any and all RF Engineering and/or Site
Acquisition) of all Subcontractors, the Owner, the Other Vendors, any and all
supply and transportation requirements and all federal, state and local
authorities or agencies. The Vendor will be fully knowledgeable about and will,
after reasonable review thereof, accept all Engineering, including, without
limitation, RF Engineering and design, irrespective of whether the Vendor, the
Other Vendors, the Owner or third parties such as the Subcontractors may furnish
such services. All Engineering requiring certification must be certified by
professional engineers licensed or properly qualified to perform such
Engineering services in all appropriate jurisdictions if such certification is,
in the Owner's opinion, appropriate and reasonable under the circumstances. This
subsection 2.10 will not modify or restrict the Vendor's obligation and/or right
to provide the Services contracted for pursuant to the terms of this Contract.
2.11 Notice of Developments.
2.11.1 Vendor Developments. The Vendor must provide the Owner,
through the NDAB or the Owner's vice president and/or director of product
development, with reasonable prior notice of any PCS Product developments,
innovations and/or technological advances (collectively "Vendor Developments")
relevant to the System prior to giving such notice to any other Customer or
otherwise making any such Vendor Development public within the relevant
marketplace; provided that the Vendor will not be obligated to provide the Owner
such notice before any other Customer if doing so would not be reasonable under
the circumstances and/or otherwise breach any contractual obligation to any
other Customer; provided further that any such notice pursuant to this
subsection 2.11.1 need not include any information originated by another
Customer which is proprietary to such other Customer of the Vendor. For the
purposes of this subsection 2.11.1 the term "Vendor" includes the Vendor and its
affiliates and subsidiaries.
2.11.2 Participation in Testing. The Owner has the right, but not
the obligation, to witness and/or participate in any initial testing and/or
application of any such Vendor Development (other than a Vendor Development
originated by another Customer which includes information which is proprietary
to such other Customer); provided that any such initial testing of Vendor
Developments will be subject to (i) scheduling as reasonably determined by the
Vendor, (ii) the qualification that the Owner's PCS System or PCS Sub-System, as
the case may be, meets the technical requirements for the testing of such Vendor
Development as reasonably determined by the Vendor (or otherwise that the Owner
is willing to update such PCS System or PCS Sub-System, as the case may be, to
meet such requirements), (iii) the Owner's acknowledgement that it will be able
to provide the resources necessary to implement the initial testing for such
Vendor Development, and (iv) the Owner and the Vendor executing a verification
office testing agreement that identifies the scope, terms, pricing,
responsibilities and schedule related to the initial testing of such Vendor
Development. The Vendor must provide the Owner at least thirty (30) days prior
notice of its intent to test any such Vendor Development and upon the Owner's
written request the Vendor will allow the Owner to participate in such testing
upon terms and in a testing environment reasonably acceptable to the Parties at
such time. The Owner will make its Test-bed Laboratory and/or certain of its PCS
Systems and/or PCS Sub-Systems (following Final Acceptance thereof) available to
the Vendor for any such testing in which the Owner has the right, and will have
notified the Vendor of its desire, to participate in pursuant to the terms of
this subsection 2.11.2. Where the Vendor and the Owner have agreed that the
Owner's Test-bed Laboratory or PCS System and/or PCS Sub-System will be used as
a test bed for Vendor Developments, the Owner will not unreasonably refuse the
Vendor's requests for other Customers to observe the tests or to release results
of the tests to other Customers; provided that the Owner will have had
reasonable prior notice that the Vendor would like to have other Customers
observe such testing and that the Vendor will remain liable in all respects
pursuant to the terms of this Contract for the protection of Proprietary
Information in connection with any such testing. The length of the prior notice
period described above may be shortened to under thirty (30) days if necessary
and appropriate under the circumstances, but in no event will any such prior
notice period be less than ten (10) days.
2.12 Safety. To the extent the Vendor is in control of any System
Element Location, or other site within the System or any System Area during the
term of this Contract (a "Vendor-Controlled Location") including, but not
limited to, during the build-out of the Initial System, the Vendor will be
solely responsible for initiating, maintaining, and supervising all safety
precautions and programs in connection with all such Vendor-Controlled
Locations. The Vendor must materially comply with Applicable Laws and Applicable
Permits and the Specifications bearing on safety of persons or property or
protection against injury, damages or loss. The Vendor must provide a written
report to the Owner describing fully all incidents affecting safety on any
Vendor-Controlled Location and must also furnish to the Owner copies of all
MSHA, OSHA and workers' compensation reports. The Vendor acknowledges and agrees
that until Bolt-down of all of the PCS Products to be provided by the Vendor
pursuant to the terms of this Contract on any given System Element Location
(other than the Switch Site or the Test-bed Laboratory) within any given PCS
System and/or PCS Sub-System is achieved the Vendor will be deemed to be in
control of all Products, tools, designs, buildings, structures and/or
Engineering (other than those Products, tools, designs, buildings, structures
and/or Engineering specific to and necessary for Site Acquisition, Network
Interconnection and/or Microwave Relocation) at, in or upon any such System
Element Location within such PCS System and/or PCS Sub-System; provided that in
any event for each such System Element Location the Vendor will always be deemed
to be in control of such System Element Location until the Facilities
Preparation Services for such System Element Location have been completed in
accordance with Exhibit B2.
2.13 Emergencies. In the event of any emergency at a
Vendor-Controlled Location endangering life or property, the Vendor must take
such action as may be reasonable and necessary to prevent, avoid or mitigate
injury, damage or loss and will, as soon as possible, report any such incidents,
including the Vendor's response thereto, to the Owner. Whenever, in the
reasonable opinion of the Owner, the Vendor has failed to take sufficient
precautions for the safety of the public or the protection of the Work or of
structures or property on or adjacent to any Vendor-Controlled Location,
creating, in the reasonable opinion of the Owner, an emergency requiring
immediate action, then the Owner, after having given reasonable prior notice to
the Vendor, may cause such sufficient precautions to be taken or itself provide
such protection. The taking or provision of any such precautions or protection
by the Owner or its agents or representatives will be for the account of the
Vendor and the Vendor must reimburse the Owner for the cost thereof.
2.14 Right of Inspection. The Owner, the parties providing
financing in connection with the build-out of the Nationwide Network and their
duly appointed representatives, including Inspectors (collectively "Reviewers"),
will at all reasonable times have access to the various sites where the Vendor
or its Subcontractors are prosecuting the Engineering, design, procurement,
testing or manufacture of the Work; provided that this subsection 2.14 will not
be presumed to give access to the Vendor's or its Subcontractors' sites to
direct competitors of the Vendor provided that such sites are not otherwise
Owner sites. For these purposes, reasonable access will be given during normal
business hours to the Vendor's and its Subcontractors' plants, premises, storage
and deposit areas, facilities and offices, sources of materials, Equipment being
assembled, already assembled or in operation, Equipment being performance tested
or tested to the Vendor's specifications and to any other places or areas
occupied by the Vendor or its Subcontractors in connection with the Work.
Notwithstanding anything herein to the contrary, any Reviewer's right of access
to the Vendor's and/or the Subcontractors' plants, premises, storage and deposit
areas, facilities and offices, sources of materials, Equipment being assembled,
already assembled or in operation, Equipment being performance tested or tested
to the Vendor's specifications and to any other places or areas occupied by the
Vendor or its Subcontractors in connection with the Work will be subject to the
reasonable confidentiality, safety and security requirements of same and further
subject to such Reviewers' non-interference with the Work and other work being
performed thereon. The Vendor must provide reasonable temporary office space (in
the Vendor's facilities where such space is available) and services for the
Reviewers to the extent necessary.
2.15 Transportation. The Vendor must provide for the transport and
delivery of all the Products to be delivered pursuant to, and in accordance
with, the terms of this Contract. The costs for such transportation will be
borne by the Vendor as part of the Contract Price; provided that the Owner will
reimburse the Vendor for any costs incurred by the Vendor for any Extraordinary
Transportation in such cases where the Vendor, subject to prior notice to the
Owner, found it actually necessary to utilize such Extraordinary Transportation;
provided, further that any amounts due to the Vendor from the Owner pursuant to
the first proviso of this subsection 2.15 will be reduced by the amount of
non-extraordinary transportation costs which otherwise would have been
applicable to the transport of such Products.
2.16 Security. Subject to subsection 2.12, during the course of the
Work, the Vendor will perform the security services necessary to ensure the
safety and security of the System Element Locations, the Products and/or other
materials or designs relevant to the Work.
2.17 Materials and Equipment. Except for materials or Equipment to
be supplied by Subcontractors identified on part B of Schedule 7, whenever
materials or Equipment are specified or described in this Contract (including
the Specifications) by using the name of a proprietary item or the name of a
particular supplier, the naming of the item is intended to establish the type,
function and quality required, and substitute materials or Equipment may
nonetheless be used, provided that such materials or Equipment are equivalent or
equal to that named. If the Vendor wishes to furnish or use a substitute item of
material or Equipment, the Vendor must first certify that the proposed
substitute will perform at least as well the functions and achieve the results
called for by this Contract, will be substantially similar or of equal substance
to that specified and be suited for the same use as that specified. The Owner
may require the Vendor to furnish, at the Vendor's expense, additional data
about the proposed substitute as required to evaluate the substitution. For
Major Portions of the Work, or materials or Equipment listed on part B of
Schedule 7, the Vendor must first receive prior written approval of the Owner
for any substitution. The Owner will be allowed a reasonable time within which
to evaluate each proposed substitute. Notwithstanding the foregoing, with
respect to PCS Products, prior to the shipment of such PCS Products pursuant to
the terms of this Contract, the Vendor may at any time without notice to or
consent of the Owner make changes in a Vendor PCS Product furnished pursuant to
this Contract, or modify the drawings and published specifications relating
thereto, or substitute Products of similar or later design to fulfill its
obligations under this Contract or otherwise fill an order, provided that the
changes, modifications or substitutions will in no way affect or otherwise
impact upon the form, fit, or function of an ordered Product pursuant to and in
accordance with the applicable Specifications. With respect to changes,
modifications and substitutions which do in fact affect the form, fit, or
function of an ordered Product pursuant to and in accordance with the
Specifications, the Vendor must notify the Owner in writing at least thirty (30)
days prior to the effective dates of any such changes, modifications or
substitutions. In the event that any such change, modification or substitution
is not desired by the Owner, the Owner will notify the Vendor within thirty (30)
days from the date of notice and the Vendor will not furnish any such changed
Products to the Owner on any orders in process at the time the Owner is so
notified; provided that nothing contained herein will otherwise modify the
Vendor's obligations under the terms of this Contract.
2.18 Equipment and Data. The Vendor must furnish all drawings,
specifications, specific design data, preliminary arrangements and outline
drawings of the Equipment and all other information as required in accordance
with this Contract in sufficient detail to indicate that the Equipment and
fabricated materials to be supplied under this Contract comply with the
Specifications.
2.19 References to Certain Sources. Reference to standard
specifications, manuals or codes of any technical society, organization or
association or to the laws or regulations of any Governmental Entity, whether
such reference is specific or by implication, by this Contract, means the latest
standard specification, manual, code, laws or regulations in effect at the time
of such reference, except as may be otherwise specifically agreed to by the
Owner. However, no provision of any reference, standard, specification, manual
or code (whether or not specifically incorporated by reference in this Contract)
will be effective to change the duties and responsibilities of the Owner, the
Vendor, the Subcontractors or any of their consultants, agents or employees from
those set forth in this Contract; provided that nothing contained in this
Contract will require the Vendor to violate then existing and enforceable
Applicable Laws.
2.20 Operating Manuals. The Vendor will provide the Owner Operating
Manuals in accordance with this subsection 2.20 as soon as they are reasonably
available but in no event less than thirty (30) days prior to Substantial
Completion of the Initial PCS System, the Vendor will provide the Owner with as
many sets of the Operating Manuals for the entire System as the Owner then
reasonably requires. The Operating Manuals will be prepared in accordance with
the relevant Specifications and in sufficient detail to accurately represent the
System and all of its component System Elements as constructed and will
recommend procedures for operation. Operating Manuals with up to date (but not
"as-built") drawings, specifications and design sheets will be available for the
Training as set forth in subsection 2.23. All other Technical Documentation not
already delivered to the Owner pursuant to the terms of the Contract must be
delivered to the Owner within ten (10) days after the successful achievement of
all Final Acceptance tests in accordance with Exhibit B3. The Owner will not be
required to deliver the Final Acceptance Certificate until all such Technical
Documentation has been so delivered (and Final Acceptance will not be deemed to
have occurred earlier than the date that is ten (10) days prior to the date of
delivery of such Technical Documentation).
2.20.1 AS Products and Services Operating Manuals. The
Vendor will provide the Owner operating and instruction manuals for the AS
Products and AS Services (the "AS Operating Manuals") in accordance with
this subsection as soon as they are reasonably available but in no event later
than the dates and times set forth in Appendix G. The Vendor will provide the
Owner with the quantity of AS Operating Manuals set forth in the AS Statement of
Work. The AS Operating Manuals will be prepared in accordance with the AS
Statement of Work and in sufficient detail to accurately describe the opera-
tions and instructions for the AS Products and all of such AS Products component
parts and will recommend procedures for operation and maintenance.
2.20.2 OTAF Products and Services Operating Manuals. The
Vendor will provide the Owner operating and instruction manuals for the OTAF
Products and OTAF Services (the "OTAF Operating Manuals") in accordance with
this subsection as soon as they are reasonably available but in no event later
than the dates and times as set forth in the OTAF Statement of Work. The
Vendor will provide the Owner with the quantity of OTAF Operating Manuals
set forth in the OTAF Statement of Work. The OTAF Operating Manuals will be
prepared in accordance with the requirements and specifications of the OTAF
Statement of Work and in sufficient detail to accurately describe the OTA
Products and Services (including SPARC/OTAF and SCP/OTAF) and will recommend
procedures for OTAF operation and maintenance.
2.20.3 Actiview Products and Services Operating Manuals.
The Vendor will provide the Owner operating and instruction manuals for the
Actiview Products and Actiview Services (the "Actiview Operating Manuals")
in accordance with this subsection as soon as they are reasonably available
but in no event later than the dates and times set forth in the Actiview State-
ment of Work. The Vendor will provide the Owner with the quantity of Acti-
view Operating Manuals set forth in the Actiview Statement of Work. The
Actiview Operating Manuals will be prepared in accordance with the Actiview
Statement of Work and in sufficient detail to accurately describe the Acti-
view Products (and all of their component parts) and Services and will recommend
procedures for Actiview operation and maintenance.
2.21 Maintenance and Instruction Manuals. The Vendor will provide
the Owner Maintenance and Instruction Manuals in accordance with this subsection
2.21 as soon as they are reasonably available but in no event less than thirty
(30) days prior to Substantial Completion of the Initial PCS System, the Vendor
must provide the Owner with as many sets of the Maintenance and Instruction
Manuals for the entire System as the Owner then reasonably requires. The
Maintenance and Instruction Manuals will be prepared in accordance with the
Specifications and in sufficient detail to accurately represent the System and
all of its component System Elements as constructed and will set forth
procedures for inspection and maintenance. Maintenance and Instruction Manuals
with up to date (but not "as-built") drawings, specifications and design sheets
will be available for the Training set forth in subsection 2.23. The Maintenance
and Instruction Manuals must include the volumes compiled by the Vendor
containing all as-built Subcontractor furnished product data.
2.22 Standards for Manuals. All Operating Manuals and Maintenance
and Instruction Manuals required to be provided by the Vendor pursuant to this
Contract must be:
(a) detailed, comprehensive and prepared in conformance with the
System Standards and generally accepted national standards of professional care,
skill, diligence and competence applicable to telecommunications and operation
practices for facilities similar to the System;
(b) consistent with good quality industry operating practices for
operating personal communications service systems of similar size, type and
design;
(c) sufficient to enable the Owner to operate and maintain each PCS
System and/or PCS Sub-System in each System Area or System Sub-Area, as the case
may be, and the System as a whole on a continuous basis; and
(d) prepared subject to the foregoing standards with the goal of
achieving operation of the System at the capacity, efficiency, reliability,
safety and maintainability levels contemplated by this Contract and the
Specifications and required by all Applicable Laws and Applicable Permits.
In addition to, and without limiting the requirements set forth in
the preceding sentence, the Operating Manuals and the Maintenance and
Instruction Manuals will be submitted to the Owner in CD-ROM format (as soon as
such format is available provided that such availability will be no later than
December 1996) in addition to hard-copy volume format if so requested by the
Owner. In addition to any of the Owner's other rights and remedies, the Owner
will have the right to reject the Operating Manual and the Maintenance and
Instruction Manuals if in its reasonable judgment any of the foregoing does not
meet the standards set forth in this Contract.
In addition to, and without limiting the requirements set forth in
clauses (a) through (d) of this subsection 2.22, the AS Operating Manuals for
the AS Products and Services will be submitted to the Owner in hard-copy volume
format if so requested by the Owner. In addition to any of the Owner's other
rights and remedies, the Owner will have the right to reject such AS Operating
Manuals if in its reasonable judgment any of them do not meet the standards set
forth in this Contract.
In addition to, and without limiting the requirements set forth in
clauses (a) through (d) of this subsection 2.22, the OTAF Operating Manuals and
the OTAF Products and Services maintenance and instruction manuals (the "OTAF
Maintenance and Instruction Manuals") for the OTAF Products and Services, will
be submitted to the Owner in hard-copy volume format if so requested by the
Owner. In addition to any of the Owner's other rights and remedies, the Owner
will have the right to reject the OTAF Operating Manuals and OTAF Maintenance
and Instruction Manuals if in its reasonable judgment any of the foregoing does
not meet the standards set forth in this Contract. Furthermore, the Actiview
Operating Manuals and the Actiview Products and Services maintenance and
instruction manuals (the "Actiview Maintenance and Instruction Manuals") for the
Actiview Products and Services, will be submitted to the Owner in hard-copy
volume format if so requested by the Owner. In addition to any of the Owner's
other rights and remedies, the Owner will have the right to reject such Actiview
Operating Manuals and Actiview Maintenance and Instruction Manuals if in its
reasonable judgment any of the foregoing does not meet the standards set forth
in this Contract.
2.23 Training. As more fully described below, starting at least one
hundred and eighty (180) days prior to the Substantial Completion of the Initial
PCS System, the Vendor must provide to the Owner a practical and participatory
and, where feasible, on-site training program with respect to the System, which
program will include technical education (collectively, the "Training"). The
Vendor will provide, upon the Owner's prior written request and at the time or
times mutually agreed in good faith by the Owner during the Initial Term of this
Contract, (i) not less than a minimum of twelve thousand fifty (12,050) man-days
of Training and Training materials for the Owner's personnel, at no cost to the
Owner plus (ii) an additional one thousand (1,000) man-days of Training at no
cost to the Owner for the SCP/HLRs and/or AM/HLRs. The Vendor will be required
to commence provision of SCP/HLR training no later than October 1, 1996. The
Owner will be responsible for the travel and living expenses of personnel
receiving Training. Such Training must be kept current to encompass the latest
Software and Equipment, or any other Software Revision Level and/or Equipment
Revision Level directed by the Owner pursuant to the terms of this Contract.
Subject to the foregoing, Training course size, content and material will be
designed and agreed to by mutual consent between the Parties. The Vendor will
conduct classes for the subjects described below:
(a) Operations, maintenance and provisioning ("OM&P") Training will
include System Training to technical personnel presumed not qualified or trained
specifically on operating a PCS System and/or PCS Sub-System or the Equipment
and/or Software included therein. The subject matter will include (i) a general
overview of PCS/CDMA technology and the System, (ii) a System overview of the
Equipment, Software initiation and configuration requirements, required
interconnections, troubleshooting and testing requirements, recovery from System
failures, and (iii) any other information necessary to successfully operate,
maintain, or set up the Equipment and the Software to work in accordance with
the System Element performance criteria set forth in Exhibit D, in each case so
that each PCS System successfully operates in accordance with the performance
criteria set forth in Exhibit F within its System Area;
(b) The Vendor must provide PCS/CDMA qualified technical staff and
material to train the Owner's personnel so as to enable them to train other
personnel of the Owner (i.e., train the trainers) on the subject matter topics
listed below. The Owner's personnel trained by the Vendor will be evaluated and
certified by the Vendor upon successful completion of the course as competent to
train other personnel of the Owner. Such content and materials may be tailored
or customized by the Owner for internal use only and include, without
limitation, Training with respect to the following topics:
(i) System Element configuration;
(ii) Communication interfaces and protocols;
(iii) Software operating system (current to the latest
Software Revision Level);
(iv) Database configuration, structure and content;
(v) Database down loading;
(vi) Program function;
(vii) Stand-alone SCP/HLR operations;
(viii) OAM&P and AS Products operations;
(ix) SPARC/OTAF Products and Services and SCP/OTAF Prod-
ucts and Services operations and maintenance;
(x) Actiview operations and maintenance;
(xi) Troubleshooting procedures; and
(xii) Other subject matter which is necessary or
desirable to understand the operation of the
System and maintenance of the System as well as
any enhancements as they are added to the System
and/or any part thereof.
(c) Except for certain plug-in modules and certain Software
delivered under this Contract, the Vendor does not provide, nor does this
Contract require that the Vendor provide, Training, training manuals, Operating
manuals or Maintenance and Instruction Manuals intended to make the Owner
proficient in Installation of any of the Products furnished under this Contract.
In the event that the Vendor should elect to provide training, documentation
and/or test equipment to facilitate self-installation of the Products by a
Customer purchasing PCS Products from the Vendor, the Vendor agrees to make such
items available to the Owner under the Vendor's standard terms and conditions
for such offering as they may exist from time to time subject to the Vendor's
obligations under Section 26; and
(d) Promptly upon execution of this Contract, the Vendor will
establish a training coordinator, whose responsibility will be to work with the
Owner to ensure that the Owner receives the Training set forth above. Such
coordinator (or his or her replacement) will continue in such assignment until
the earlier of (i) the Final Acceptance of the last PCS System within the
Initial System, or (ii) receipt by the Owner of all of the Training required to
be provided at no cost under this subsection.
2.23.1 [INTENTIONALLY OMITTED]
2.23.2 Actiview Training. Any Training for Actiview requested by
the Owner and provided by the Vendor at the prices and terms set forth in the
Actiview Statement of Work will be provided by the Vendor at the Owner's
locations as such locations are designated by the Owner to the Vendor.
2.24 Manuals and Training. The training and the documentation
provided in connection herewith, including, without limitation, all
documentation provided in CD-ROM format, and pursuant to subsections 2.20, 2.21
and 2.23 will be updated pursuant to and in accordance with all Product upgrades
and/or modifications applicable to the System, any PCS System and/or any part
thereof.
2.25 Spare Parts. (a) Prior to the Substantial Completion of the
Initial PCS System the Vendor and the Owner will agree, pursuant to and in
accordance with the terms of this subsection 2.25, as to the type, quantity and
storage location of the spare parts required to continually operate the Initial
System as intended and in accordance with the Specifications. For a period of
two (2) years following Final Acceptance of each PCS Sub-System, the Vendor
will, if requested by the Owner, provide such spare parts at its own expense.
Following the expiration of such two (2) year period, the Vendor will provide
such spare parts pursuant to Schedule 12A and at the prices set forth on
Schedule 12B. After the expiration of such two (2) year period invoices for such
System spare parts will be issued directly to the Owner and will be paid for
directly by the Owner in accordance with the invoice and payment terms of this
Contract. Any PCS spare parts applicable to the System utilized or withdrawn
from any PCS System and/or PCS Sub-System during such two (2) year period will
be promptly replaced by the Vendor at its own cost. With respect to such spare
parts provided at the Vendor's expense, the Owner expressly agrees that (i) the
Owner will not utilize such spare parts for increasing the performance or
capacity of the PCS Sub-Systems and/or PCS Sub-Systems for which they were
provided or otherwise expanding such PCS Sub-Systems and/or PCS Sub-Systems or
any other PCS systems, (ii) until any such spare part is drawn from storage and
utilized as a replacement in a PCS System and/or PCS Sub-System or until the
Owner pays for such spare part, title to such spare part will remain with the
Vendor, (iii) risk of loss of or damage to such a spare part will be with the
Owner from the time of delivery to the Owner, and (iv) the Owner will, at its
expense, return to the Vendor any Item replaced by a spare part delivered to the
Owner pursuant to the terms of this subsection 2.25.
(b) The Owner has the right to withhold from its final payment to
the Vendor with respect to any PCS System and/or PCS Sub-System an amount equal
to the Owner's reasonably estimated cost of any utilized spare parts for such
PCS System and/or PCS Sub-System, as the case may be, not so replaced prior to
Final Acceptance; provided that such withheld funds will be released upon such
satisfactory replacement of such spare parts by the Vendor.
(c) To the extent that System PCS spare parts need to be acquired
from third party suppliers, the Vendor will use its reasonable efforts to obtain
from suppliers a supply of System spare parts at no additional cost as part of
the original Product package. To the extent that the Vendor is able to so obtain
such System spare parts at no additional cost as part of the original Product
package, it will provide such System spare parts to the Owner without cost (and
without any charge for the procurement of such spare parts by the Vendor).
2.26 System Support Services. The Vendor will provide the specified
support services for the operation, maintenance and repair of the System and all
Products to the extent set forth herein below and at the Annual Release
Maintenance Fees.
2.26.1 Vendor Assistance. (a) Upon receipt of a request
for technical assistance from the Owner, the nature of the problem will be iden-
tified by the Owner, and a priority assigned by the Owner (upon discussion
with the Vendor which in no event will require the agreement and/or consent
of the Vendor) as either an emergency or non-emergency condition and resolution
thereof will be expedited in accordance with the severity levels set forth be-
low.
(b) Following attempted corrective actions by the Owner in
accordance with applicable Maintenance and Instruction Manuals provided by the
Vendor, when the Vendor is notified by the Owner that the System, any PCS
System, any PCS Sub-System or any part thereof fails to operate in accordance
with the Specifications, the Vendor will promptly commence and diligently pursue
all reasonable efforts to identify the Defect or Deficiency and, in the event
the Vendor has responsibility therefor, to correct such Defect or Deficiency.
(c) The Vendor's correction of such Defects or Deficiencies in the
System, any PCS System, any PCS Sub-System, or any part thereof, may take the
form of new software codes, new or supplementary operating instructions or
procedures, modifications of the software codes in the Owner's possession, or
any other commonly used method for correcting Defects or Deficiencies in
Software, as the Owner and the Vendor deem appropriate.
(d) When appropriate, the Vendor will provide non-emergency
technical support to the Owner via telephone, facsimile transmission, modem, or
other means acceptable to the Owner during the Owner's normal business hours.
(e) The Vendor will provide emergency technical assistance to the
Owner via an ETA telephone number designated to the Owner in advance by the
Vendor, twenty-four (24) hours per day, three hundred sixty-five (365) days per
year.
(f) The Vendor will provide remote intervention and assistance
capability to the Owner for remotely accessing operating System Elements. Upon
mutual agreement between the Parties, the Vendor may remotely access operating
System Elements for the purpose of ETA.
2.26.2 Trouble Reports. From time to time, failures in,
or degradation of, Products may cause services provided by the System to be ad-
versely affected. It is necessary that immediate assistance be provided by
the Vendor to allow the Owner to restore the affected service. Critical ser-
vice outages that cannot be resolved by the Owner's field technicians or techni-
cal support engineers using procedures described in the Operating Manuals,
Maintenance and Instruction Manuals and Training will be transmitted to
the Vendor as a Trouble Report ("TR"). The Vendor will assign an identi-
fying number to each TR to aid in tracking its resolution. TRs will be imme-
diately addressed by the Vendor through Emergency Technical Assistance under
guidelines set forth in subsection 2.26.3. TRs may not be considered conclud-
ed until the solution is concurred upon by an employee of the Owner within the
Owner's operations control center ("OCC"). The root cause of problems re-
sulting in TRs may be Defects or Deficiencies which must be corrected through
Product or procedure changes. Problems with the System requiring such
changes will be referred to the Vendor for action through a Customer Ser-
vice Request ("CSR"). The Vendor is authorized by the Owner to install and
integrate, at the Vendor's expense, any Software Upgrade or Software Enhancement
pursuant to mutual agreements reached between the Vendor and the Owner.
<PAGE>
2.26.3 Emergency Technical Assistance. (a) When a prob-
lem is encountered that adversely affects service or performance with respect
to the Products, any PCS System and/or PCS Sub-System, the System or any part
thereof, in each case provided by the Vendor, an Owner maintenance techni-
cian will attempt to repair or replace any malfunctioning Product adversely
affecting such service or performance using the procedures recommended in the
Maintenance and Instruction Manuals or the Operating Manuals. If unsuccess-
ful, a technical representative of the Owner will consult the Vendor's desig-
nated ETA group at the telephone number provided by the Vendor in subsection
2.26.3(c) below. Following receipt of notification by the ETA group, the ETA
group will utilize all available technical resources and will ensure that a
qualified technical engineer is communicating with the Owner's personnel
regarding the problem on average within fifteen (15) minutes of any such noti-
fication; provided that no single response will exceed thirty (30) minutes.
If necessary and appropriate the Owner's technician will be dispatched to
assist in the normal change-out of replaceable hardware units.
(b) A problem adversely affecting service that has a
severity level defined below either as an "E1 Emergency Condition" or an
"E2 Emergency Condition" is to be addressed under the ETA procedures set
forth below in this subsection 2.26.3 and in subsection 2.26.4.
(i) An E1 Emergency Condition (this roughly corresponds to a
Critical Condition in the Vendor's ISO 9001 documentation)
means a problem resulting from any one or more of the
following events:
- - Any system-initiated event or unplanned manual restart (warm, cold,
reload or image) which causes a system loss of all call
processing capability for more than thirty (30) seconds.
Manual restarts with twenty-four (24) hour notice would
be planned.
- - Useable billing data not being collected.
- - Two (2) or more contiguous BTSs failing causing a loss of coverage.
- - Ten percent (10%) or more of the total number of voice trunks (BTS and
switch) are out-of-service.
- - Ten percent (10%) or more of the total number of any links (including
IS-41, ISUP, X.25 and SS7 are out of service.
- - Total loss of access to one or more specific services because of a
fault condition in the MSC and related Equipment.
- - Any BTS having a total failure in excess of thirty (30) minutes after
recovery attempts from the OMP are executed.
The Vendor must clear all E1 Emergency Conditions within
twelve (12) hours of notification of their occurrence.
Work must continue without any cessation until the defect
causing the E1 Emergency Condition is solved or the
severity thereof is reduced to a "P1 Major Condition", as
defined below, or less.
(ii) An E2 Emergency Condition (this roughly corresponds to
Severity 1 Conditions in the Vendor's ISO 9001
documentation) means a problem resulting from any one or
more of the following events:
- - Loss of the duplex functionality for any equipment that is duplicated.
- - Single BTS failing less than thirty (30) minutes that is not contiguous
with another failed BTS.
- - Loss of the master clock.
- - Fifty percent (50%) or more of the equipped tape or disk drive units
out-of-service.
- - Loss of duplex recording of billing information.
- - Inability to dump or initialize an office image (e.g., translations
and/or software).
- - Inability to perform critical maintenance procedures.
- - Loss of all links within a single link-set.
The Vendor must clear all E2 Emergency Conditions within
twenty-four (24) hours of notification of such E2
Emergency Conditions. Work must continue without any
cessation until the defect causing the E2 Emergency
Condition is solved or the severity is reduced to a P1
Major Condition or less.
(c) In the event that an E1 Emergency Condition or an E2
Emergency Condition should remain unresolved following referral to the Vendor.
by the Owner, the problem causing such condition must be reported to the
levels of management set forth below (with comparable titles, if different)
to ensure all available resources necessary to address the problem will be
committed in accordance with the following:
The following are the reporting levels if an E1 Emergency Condition
or an E2 Emergency Condition is not resolved within the time periods set forth
below, as amended from time to time with the reasonable acceptance of the Owner,
following referral thereof to the Vendor by the Owner:
Vendor Contact Vendor Contact Name Telephone Number
One hour -- Technical Assistance Mgr. to be designated to be designated
Two hours -- Customer Service Director to be designated to be designated
Three hours -- Customer Service AVP R.B. Andrews (708) 713-1500
Four hours -- Vice President R.G. Garriques to be designated
(d) If the Owner reasonably determines that the Vendor has not provided
sufficient ETA to resolve any E1 Emergency Condition or E2 Emergency Condition
on a timely basis, the Owner will be entitled to withhold all payments with
respect to the affected PCS System and/or PCS Sub-System then due or outstanding
prior to the date of such determination until such time as adequate ETA is
provided to the Owner to resolve such Emergency Condition.
(e) If an E1 Emergency Condition or an E2 Emergency Condition exists in
a PCS System and/or PCS Sub-System prior to Final Acceptance of such PCS System
or PCS Sub-System, as the case may be, the Vendor will use all reasonable
efforts to deliver to the Owner each Software Upgrade and each Equipment Upgrade
developed by or on behalf of the Vendor to resolve any E1 Emergency Condition or
E2 Emergency Condition within forty-eight (48) hours following completion of
development of such Software Upgrades or availability of such Equipment
Upgrades.
(f) The term "Non-Emergency Services" includes providing to the Owner
any requested technical assistance and support, remote monitoring and outage
review consultation and the handling of CSRs.
(g) Technical assistance and support must be provided for the purpose
of resolving non-emergency problems defined below as "P1 Major Condition", "P2
Significant Problem" and "P3 Minor Problem" which are reported to the Vendor.
(i) P1 Major Condition (this roughly corresponds to
Severity 1 Conditions in the Vendor's ISO 9001
documentation) means any non-emergency failure of
specific features or functions of the System, any PCS
System, any PCS Sub-System or any Product that
restricts its operations, but does not render the
System, any PCS System, any PCS Sub-System or any
Product inoperable, impact traffic capacity or coverage
or require significant manual intervention for the
System, any PCS System, any PCS Sub-System or any
Product to operate properly and in accordance with its
applicable Specifications. These events will include
loss of diagnostic capabilities and loss of reporting
functions. The Vendor will use all reasonable efforts
to use by-pass or work-around procedures to alleviate
such P1 Major Condition until it is corrected and, upon
mutual agreement of the Parties, the Vendor will
resolve such P1 Major Condition during the next
available scheduled Software Upgrade or Equipment
Upgrade.
(ii) P2 Significant Problem (this roughly corresponds to
Severity 2 Conditions in the Vendor's ISO 9001
documentation) means any non-emergency, intermittently
occurring problem related to specific primary functions
or features or any inoperable secondary functions that
do not have a significant adverse effect on the overall
performance of the System, any PCS System, any PCS
Sub-System or any Product. The Vendor will undertake
appropriate and reasonable efforts to correct such P2
Significant Problem.
(iii)P3 Minor Problem (this roughly corresponds to Severity
3 Conditions in the Vendor's ISO 9001 documentation)
means any non-emergency problem that does not affect
the performance or functions of the System, any PCS
System, any PCS Sub-System or any Product, and, despite
such problem, the System, any PCS System, any PCS
Sub-System or any Product is fully operable without
restrictions. Such P3 Minor Problems may include
documentation inaccuracies, cosmetics, minor requests
for changes or maintenance requests. The Vendor will
undertake appropriate and reasonable efforts to correct
such P3 Minor Problem.
(h) Should a non-emergency problem remain unresolved for the period or
periods of time set forth below following referral to the Vendor by the Owner,
such problem must be reported to the levels of management set forth below to
ensure all available resources necessary to correct such problem will be
committed to address such problem pursuant to the following:
- - ------------------------------------------------------------------------------
REPORTING LEVELS IF NON-EMERGENCY
IS NOT RESOLVED WITHIN
- - -------------------- -------------------- -------------------- ---------------
CONDITION 30 DAYS 45 DAYS 60 DAYS
- - -------------------- -------------------- -------------------- ---------------
P1 Technical Manager Customer Service Vice President
Major Condition Director
- - -------------------- -------------------- -------------------- ---------------
P2 Technical Manager Customer Service
Significant Problem Director
- - -------------------- -------------------- -------------------- ---------------
P3 Technical
Minor Problem Manager
- - -------------------- -------------------- -------------------- ---------------
Non-emergency problems referred to the Vendor as a CSR will be resolved
based upon the priority assigned to them as determined by the Owner or as
mutually agreed by the Parties and, to the extent reasonably possible, will be
incorporated into the next scheduled Software release.
2.26.4 ETA and CSR. In the event that emergency technical
support provided from the Vendor's technical support center is not sufficient to
resolve an E1 Emergency Condition, the Vendor must send a technically qualified
person or persons to the site of such emergency condition or problem to assist
the Owner's employees in solving such condition or problem. The Vendor's
technically qualified person or persons must be on-site as soon as possible, but
in no event more than twenty-four (24) hours after notification to the Vendor by
the Owner, or at such later time as may be mutually agreed on by the Parties. In
the event that emergency technical support provided from the Vendor's technical
support center is not sufficient to resolve an E2 Emergency Condition, then the
Parties will mutually agree to a desired course of action, which may include
requiring the Vendor to send a technically qualified person or persons to the
site of such emergency.
A CSR may be submitted by the Owner to request a repair or
work-around of an emergency condition or repair of a non-emergency problem, or
to request a Software Upgrade or an Equipment Upgrade or other Software or
Equipment operational enhancement. The Owner's CSRs will define the condition or
problem and state whether the Owner considers the CSR to be for a Software
Upgrade or an Equipment Upgrade or other Software or Equipment operational
enhancement. Changes to the System, any PCS System or any PCS Sub-System
resulting from any CSR must be fully tested and accepted in accordance with the
Specifications. The Vendor must respond to the submission of a CSR by the Owner
within five (5) Business Days, acknowledging receipt of the CSR. Within thirty
(30) days of receipt of the CSR, the Vendor will respond to the CSR summarizing
the Vendor's intended actions to handle the CSR. A CSR may result in System
fixes or enhancements, or in Product modifications reasonably acceptable to the
Owner.
Notwithstanding the above, no event, lack of functionality or
failure of the Test-bed Laboratory will be assigned as an E1 Emergency Condition
or E2 Emergency Condition. Any such event, lack of functionality or failure
applicable to the Test-bed Laboratory, which would otherwise be assigned such a
category in accordance with the definitions above, will be assigned a P1 Major
Condition.
<PAGE>
- - ------------------------------------------------------------------------------
2.27 Supply of Additional Products. During the Initial Term of this
Contract and for a period of three (3) years thereafter, the Vendor will make
available for purchase by the Owner, on applicable terms and conditions set
forth in this Contract or as otherwise mutually agreed between the Parties, PCS
Products to enable the Owner to expand the System and/or any PCS System and/or
any PCS Sub-System and/or any part thereof, which Products will provide
equivalent functionality for and will be compatible with the System or any such
PCS System or PCS Sub-System at such time. Nothing herein will be deemed to
prohibit the Vendor from designating any specific PCS Products as Discontinued
Products in accordance with Section 10 of this Contract.
- - ------------------------------------------------------------------------------
2.28 Review of Contract. The Vendor has examined in detail and
carefully studied and compared the Contract with all other information furnished
by the Owner and has promptly reported to the Owner any material errors,
inconsistencies or omissions so discovered or discovered by any of the
Subcontractors. The Vendor will not prosecute any Major Portion of the Work
knowing that it involves a material error, inconsistency or omission in the
Contract without prior written notice to and approval by the Owner. If for any
reason the Vendor violates this subsection 2.28, the Vendor will, in addition to
being subject to any other remedies of the Owner, assume responsibility for such
violation and, in such case, will be deemed to have waived any claims for an
adjustment in any of the Specifications and/or System Standards which results
directly from any such error, inconsistency or omission. This subsection 2.28
does not, nor will be deemed to, in any manner limit the terms of subsection
2.39.
2.29 Licenses, Permits and Approvals. Except as otherwise provided for
herein with respect to Site Acquisition, Microwave Relocation and Network
Interconnection, any Applicable Permits (in connection with the Vendor's Work)
required by any Government Entity relating to the manufacture, importation,
safety or use of the Products, the System, any PCS System or any PCS Sub-System
throughout the United States or in any state or any political sub-division
thereof will be the sole responsibility of the Vendor. Prior to the commencement
of any Work and/or other activities by the Vendor or any of its Subcontractors
in connection with or pursuant to this Contract, upon request of the Owner the
Vendor will furnish the Owner with evidence that such Applicable Permits have
been obtained and are in full force and effect to the extent that Applicable
Permits are necessary for the commencement or undertaking of such activities,
and from time to time thereafter the Vendor, upon the reasonable request of the
Owner, will provide such further evidence as the Owner will deem reasonably
necessary.
2.30 Eligibility under Applicable Laws and Applicable Permits. The
Vendor will be responsible for ensuring that the Vendor and its Subcontractors
are and remain eligible under all Applicable Laws and Applicable Permits to
perform the Work under this Contract in the various jurisdictions involved.
2.31 Customs Approvals. The Owner agrees to reasonably assist, so long
as such assistance will not involve the incurrence of any costs or expenses by
the Owner, the Vendor to obtain and maintain (i) Applicable Permits for
importation into the Products on a duty and customs free basis and (ii) entry or
work permits, visas or authorizations required for personnel engaged by the
Vendor to perform Work under this Contract.
2.32 Owner Participation. In addition to the right of observation
contained in subsection 9.4 hereof, the Owner will be entitled to participate in
the Vendor's research and development activities (subject to the reasonable
acceptance of the Vendor) and product development and testing activities
pursuant to this Contract (other than research and development activities
originated by another Customer which is proprietary to such other Customer);
provided that such observation and participation will not affect the Vendor's
responsibilities and warranties hereunder and will not otherwise interfere with
the Vendor's research and development activities. Nothing contained in this
subsection 2.32 purports to grant the Owner rights to the Vendor's research and
development other than such rights otherwise granted to the Owner pursuant to
the terms of this Contract or as otherwise mutually agreed by the Parties at
such time.
2.33 New Development Advisory Board. In order to accommodate the
Owner's participation pursuant to this Contract, including, without limitation,
pursuant to subsections 2.11 and 2.32, the Owner and the Vendor will establish
an NDAB within sixty (60) days of the Effective Date. The purpose of the NDAB
will be to review the development requirements and high level development
milestones, to ensure that the Vendor understands the Owner's requirements for
each PCS System, each PCS Sub-System the System, and/or any extensions thereto,
including, without limitation, any subsequent Products and/or enhancements. The
NDAB will provide an executive forum to discuss product ideas, Owner
requirements and its recommended development prioritization for improved
infrastructure-based subscriber features and System features, functions and
capabilities. The focus of the NDAB will be on System features and services, new
PCS Products, System enhancements, critical operational issues, future
developments beyond CDMA cellular without the need for System additions and on
such other matters as the Parties mutually agree upon from time to time.
2.34 Market Development Manager. The Vendor will provide a market
development manager to coordinate the efforts of the Vendor in meeting its
obligations relating to the NDAB who will specifically focus on new Products,
CDMA services and features. Such market development manager must be
knowledgeable in CDMA technology and the Owner's System and must work closely,
and on a regularly scheduled basis, with the Owner's senior engineering and
marketing personnel on feature development, feature roll-out, future road maps
for PCS Products, and any other marketing aspect of providing PCS that the Owner
believes is beneficial to the System and/or any PCS System and/or any PCS
Sub-System at such time. The Vendor's market development manager and the
manager's staff will serve as the Owner's direct liaison with the Vendor to
ensure that the Vendor's product development teams are focusing on the Owner's
priorities as described to the Vendor by the Owner from time to time either
through the NDAB or by any other means acceptable to the Parties. Nothing
contained in this subsection 2.34 will in any way limit and/or modify the
Owner's ability to enforce its rights under this Contract or to otherwise
maintain contacts with the Vendor in any other way it sees fit.
2.35 Further Assurances. The Vendor will execute and deliver all
further instruments and documents, and take all further action, including, but
not limited to, assisting the Owner in filing notices of completion with the
appropriate state and local lien recording offices, that may be necessary or
that the Owner may reasonably request in order to enable the Vendor to complete
performance of the Work or to effectuate the purposes or intent of this
Contract.
2.36 Liens and Other Encumbrances. (a) In consideration of the mut-
ual undertakings herein and other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the Vendor:
(i) covenants and agrees to protect and keep free the System
and/or any PCS System and/or any PCS Sub-System and any and all
interests and estates therein, and all improvements and materials now
or hereafter placed thereon under the terms of this Contract, from any
and all claims, liens, charges or encumbrances of the nature of
mechanics, labor or materialmen liens or otherwise arising out of or in
connection with performance by any Subcontractor, including services or
furnishing of any materials hereunder, and to promptly have any such
lien released by bond or otherwise;
(ii) will give notice of this subsection 2.36 to each
Subcontractor before such Subcontractor furnishes any labor or
materials for the System and/or any PCS System and/or any PCS
Sub-System; and
(iii) will make any and all filings reasonably requested by the
Owner in order that the Owner may take advantage of the relevant local
mechanics' lien waiver procedures with respect to mechanics' liens of
any such Subcontractor.
(b) If any laborers', materialmen's, mechanics', or other similar lien
or claim thereof is filed by any Subcontractor, the Vendor will cause such lien
to be satisfied or otherwise discharged, or will file a bond in form and
substance satisfactory to the Owner in lieu thereof within ten (10) days of the
Vendor's receipt of notice of such filing. If any such lien is filed or
otherwise imposed, and the Vendor does not cause such lien to be released and
discharged forthwith, or file a bond in lieu thereof, then, without limiting the
Owner's other available remedies, the Owner has the right, but not the
obligation, to pay all sums necessary to obtain such release and discharge or
otherwise cause the lien to be removed or bonded to the Owner's satisfaction
from funds retained from any payment then due or thereafter to become due to the
Vendor.
(c) The Owner reserves the right to post or place within the System
and/or any PCS System and/or any PCS Sub-System notices of non-responsibility or
to do any other act required by Applicable Law, to exempt the Owner and the
System from any liability to third parties by reason of any work or improvements
to be performed or furnished hereunder; provided that failure by the Owner to do
so will not release or discharge the Vendor from any of its obligations
hereunder.
2.37 Forecasting and Ordering. Throughout the Term of this Contract, on
a monthly basis commencing on the Effective Date, the Owner will provide the
Vendor with rolling twelve-month forecasts of its ongoing Product and Service
requirements. Such forecasts will, to the extent applicable, include, but not be
limited to, the Owner's Site Acquisition, Switch Site Ready Date, Network
Interconnection and Microwave Relocation progress to such date. Upon the review
and reasonable acceptance of such forecasts by the Vendor pursuant to the terms
of this Contract, the Owner will have the right, but not the obligation, to
confirm to the Vendor its orders for the Products and Services set forth in such
forecasts pursuant to the Owner's delivery to the Vendor of formal written
orders specifying the Products and/or Services to be purchased in connection
with the terms of this Contract. The Vendor's obligation to deliver in
accordance with accepted forecasts will be subject to receipt of the Owner's
orders in accordance with the applicable ordering procedures. If the Owner fails
to deliver any forecast pursuant to this subsection 2.37 for any reason, the
Vendor will be responsible for asking the Owner to actually deliver such
forecast to the extent it requires such forecast at such time.
2.38 Microwave Relocation; Network Interconnection. (a) The Vendor will
not be responsible for Microwave Relocation within the System. Unless otherwise
waived by the Owner, however, completion of Microwave Relocation in any given
System Area or System Sub-Area will be a prerequisite to the commencement of the
Substantial Completion testing to be performed by the Vendor in accordance with
Exhibit B3 in such System Area or System Sub-Area. The Owner may at its option
choose instead to modify the System performance criteria as set forth in Exhibit
F by way of a Change Order in order to account for the failure to fully and/or
satisfactorily complete Microwave Relocation in any such System Area or System
Sub-Area such that Substantial Completion testing in accordance with the
requirements of Exhibit B3 may proceed. Notwithstanding anything stated herein
to the contrary (other than clause (b) below), the Owner's failure and/or
inability to fully complete Microwave Relocation in any such System Area or
System Sub-Area within twelve (12) months of Milestone 6 (as set forth in
Exhibit A1) (the "Microwave Delay Period") will entitle the Vendor to otherwise
commence Substantial Completion testing (as deemed applicable and appropriate
pursuant to good faith mutual agreement between the Parties at such time) for
the PCS System or PCS Sub-System in such System Area or System Sub-Area, as the
case may be, in accordance with Exhibit B3. Pursuant to the requirements of
Exhibits A1, B1 and B3 with respect to any PCS System or any PCS Sub-System
within the System the Owner may, upon the prior written request of the Vendor,
consent (such consent not to be unreasonably withheld) to extend the scheduling
of the Vendor's Substantial Completion testing by not more than an additional
sixty (60) days pursuant to Milestone 8 in the event that more than ten percent
(10%) of the System Element Sites in such PCS System or PCS Sub-System as set
forth in the Final Site Count for such PCS System or PCS Sub-System require
Vendor optimization pursuant to Exhibit B1 that was otherwise delayed due to
incomplete Microwave Relocation in such PCS System or PCS Sub-System immediately
prior to the date scheduled for Substantial Completion testing pursuant to
Milestone 8 (as set forth on Exhibit A1).
(b) The Vendor will not be responsible for Network Interconnection
within the System. In any given System Area or System Sub-Area, completion of
Network Interconnection in such System Area or System Sub-Area at least sixty
(60) days (or as otherwise mutually agreed between the Parties at such time)
prior to Milestone 7 (as set forth on Exhibit A1) will be a prerequisite to the
Vendor's obligation pursuant to the terms of this Contract to successfully
achieve Milestone 7 (as set forth in Exhibit A1) in such System Area or System
Sub-Area.
2.39 Vendor To Inform Itself Fully; Waiver of Defense. (a) The Vendor
will be deemed to have notice of and to have fully examined and approved the
Specifications and all other documents referred to herein, and all drawings,
specifications, schedules, terms and conditions of this Contract, regulations
and other information in relation to this Contract and/or any amendments,
modifications or supplements thereto at any time on or after the Effective Date
and to have fully examined, understood and satisfied itself as to all
information of which the Vendor is aware or should have been aware and which is
relevant as to the risks, contingencies and other circumstances which could
affect this Contract and in particular the installation of the System, any PCS
System, any PCS Sub-System or any part thereof. The Owner, its directors,
officers, employees and agents and all of them have no liability in law or
equity or in contract or in tort with respect to any such specifications,
drawings, information, risks, contingencies or other circumstances.
(b) The fact that the Owner may have prepared or taken part in the
preparation of Specifications, documents, drawings, Engineering, designs,
specifications, schedules, terms or conditions, or may have designated
particular types of Products and/or Services to be furnished hereunder or
designated particular manufacturers or suppliers of Products or Services, or may
have taken part in the designation of any particular Subcontractor(s) or
subcontractor(s), or given vetoes or approvals with respect to the Work, or
otherwise become involved in the Work, will not give rise to any claim by the
Vendor or any Subcontractor or any defense to any warranty or other claims
asserted against the Vendor or any Subcontractor to the extent that any such
claim or defense arises out of any specifications, drawings, documents, or other
information, which the Vendor is deemed to have had notice of pursuant to
subsection 2.39(a) above and with respect to any such information arising after
the Effective Date which the Vendor had a reasonable opportunity to review.
2.40 CMI/HIC. From time to time throughout the Term of this Contract
the Parties may mutually agree as to the incorporation and integration of
CMI/HIC into the System in accordance with Exhibit D.
2.41 Site Acquisition Delay Testing. In any given System Area or System
Sub-Area within the Initial System, in the event Site Acquisition Substantial
Completion is delayed more than one hundred and fifty (150) days beyond the
forecasted date for Site Acquisition Substantial Completion as set forth in the
M5 Forecast (the "Site Acquisition Delay Period") provided to the Vendor with
the Build Notice applicable to such System Area or System Sub-Area, as the case
may be, due solely to the Owner's inability to achieve sufficient Site
Acquisition in such System Area and/or System Sub-Area, as the case may be, the
Vendor will have the right, but not the obligation, to commence Substantial
Completion testing (as deemed applicable and appropriate pursuant to good faith
mutual agreement between the Parties at such time but in any event to be
completed within thirty (30) days of such commencement) for that portion of the
otherwise incomplete PCS System or PCS Sub-System, as the case may be, in which
the Vendor has (i) completed all applicable Facilities Preparation Services and
(ii) fully Installed, to the extent possible at such time, all such Products to
be Installed by the Vendor or its Subcontractors on otherwise fully constructed
System Element Locations within such PCS System or PCS Sub-System. Subject to
Section 6, in the event the Vendor successfully completes such modified
Substantial Completion testing for such Installed portion of such otherwise
incomplete PCS System or PCS Sub-System, as the case may be, pursuant to and in
accordance with this subsection 2.41 and Exhibit B3, the Vendor will be entitled
to such portion of the payments that otherwise would be made by the Owner
pursuant to subsection 6.3(b) as applicable only to those Services and Products
actually provided by the Vendor pursuant to and in accordance with the terms of
this Contract in such portion of the otherwise incomplete PCS System and/or PCS
Sub-System, as the case may be, that was subject to testing pursuant to this
subsection 2.41. Nothing contained herein to the contrary will in any way modify
the Vendor's obligations as to the completion and testing of the remaining
portion of such PCS System pursuant to and in accordance with the terms of this
Contract, including but not limited to the Project Milestones set forth in
Exhibit A1. Nothing contained herein to the contrary will in any way require the
Owner to pay the Vendor amounts already paid or otherwise provided for pursuant
to any other provision of this Contract.
SECTION 3 AFFILIATES
3.1 Additional Affiliates. On a quarterly basis commencing on the
Effective Date and during the term of this Contract, the Owner may, upon fifteen
(15) days' prior written notice to the Vendor, designate any Person who has been
licensed or has access to or rights to use licenses for PCS in the United States
which is not an Initial Affiliate as an "Additional Affiliate"; provided that
the Vendor will have a reasonable opportunity to review and approve such
designation, such approval not to be unreasonably withheld, based upon (i)
reasonable credit criteria within the context of the PCS industry, (ii) the fact
that such proposed Additional Affiliate has not in the past materially breached
prior material agreements with the Vendor, (iii) the fact that the proposed
Additional Affiliate is not, at the time of such determination, a direct
competitor to the Vendor in the wireless telecommunications business and (iv)
the fact that the proposed Additional Affiliate is not, at the time of such
determination, otherwise engaged with the Vendor in a material agreement for the
purchase and/or supply of PCS CDMA wireless technology; and provided, further,
that (x) the Owner, any Partner or any Initial Affiliate has at least a ten
percent (10%) equity ownership in such Person, (y) such Person is controlled by
or under the common control with the Owner, any Partner or any Initial Affiliate
or (z) there exists between the Owner and such Person an Additional Affiliate
Arrangement.
3.2 Agreements with Initial Affiliates. During the term of this
Contract, the Owner will have the right, but not the obligation, to require that
the Vendor enter into separate agreements with any Initial Affiliate designated
by the Owner (each, an "Initial Affiliate Agreement") for the supply of Products
and Services on similar terms and conditions as those set forth herein that
relate to the initial build-out of the Initial System as set forth on Schedule
4; provided that the Vendor will not be required to include in any Initial
Affiliate Agreement any provisions substantially similar to those set forth in
subsections 2.3(a), 2.5, 2.23 (but only to the extent of the specific amounts
set forth in such subsection 2.23), 3.1, 3.3, 11.7, 15.1, 21.1, 24.1 and 27.5;
and provided further that after the date on which Final Acceptance of the last
PCS System to reach Final Acceptance has occurred, Initial Affiliate Agreements
(whether or not executed prior to such date) need not contain or retain
substantially the same terms and conditions as those set forth herein, except
for those terms and conditions related to pricing and warranties as are then
available to the Owner pursuant to this Contract. Any Initial Affiliate that
enters into an Initial Affiliate Agreement with the Vendor will have the right
to choose among the Products and Services offered to the Owner under this
Contract solely for use within the Nationwide Network.
3.3 Agreements with Additional Affiliates. During the term of this
Contract, the Owner will have the right, but not the obligation, to require that
the Vendor enter into separate agreements with any Additional Affiliate
designated by the Owner (each, an "Additional Affiliate Agreement") for the
supply of Products and Services at similar price and warranty terms as are then
available to the Owner pursuant to the terms of this Contract. The Vendor must
enter into good faith negotiations for the establishment of such Additional
Affiliate Agreements with any such Additional Affiliate promptly upon the
designation of such Additional Affiliate by the Owner and upon notice to the
Vendor that such Additional Affiliate desires to enter into an Additional
Affiliate Agreement. Any Additional Affiliate that enters into an Additional
Affiliate Agreement with the Vendor will have the right to choose among the
Products and Services offered to the Owner under this Contract solely for use
within the Nationwide Network.
3.4 Affiliate Rights. Notwithstanding anything herein contained to the
contrary, Affiliates will not be deemed third party beneficiaries to this
Contract or otherwise have any rights hereunder. Only the Owner may designate a
Person as an Affiliate in accordance with the terms of this Section 3 and only
the Owner has the right and/or the ability to enforce any rights hereunder
against the Vendor.
SECTION 4 SUBCONTRACTORS
4.1 Subcontractors. The Vendor will select Subcontractors in connection
with the performance of the Work such that all Products and Services provided by
any such Subcontractors meet the System Standards and reliability and
performance requirements set forth in this Contract. Regardless of whether or
not the Vendor obtains approval from the Owner of a Subcontractor or whether the
Vendor uses a Subcontractor recommended by the Owner, use by the Vendor of a
Subcontractor will not, under any circumstances: (i) give rise to any claim by
the Vendor against the Owner if such Subcontractor breaches its subcontract or
contract with the Vendor; (ii) give rise to any claim by such Subcontractor
against the Owner; (iii) create any contractual obligation by the Owner to the
Subcontractor; (iv) give rise to a waiver by the Owner of its rights to reject
any Defects or Deficiencies or Defective Work; or (v) in any way release the
Vendor from being solely responsible to the Owner for the Work to be performed
under this Contract.
4.2 The Vendor's Liability. The Vendor is the general contractor for
the Work and remains responsible for all of its obligations under this Contract,
including the Work, regardless of whether a subcontract or supply agreement is
made or whether the Vendor relies upon any Subcontractor to any extent. The
Vendor's use of Subcontractors for any of the Work will in no way increase the
Vendor's rights or diminish the Vendor's liabilities to the Owner with respect
to this Contract, and in all events, except as otherwise expressly provided for
herein, the Vendor's rights and liabilities hereunder with respect to the Owner
will be as though the Vendor had itself performed such Work. The Vendor will be
liable for any delays caused by any Subcontractor as if such delays were caused
by the Vendor.
4.3 No Effect of Inconsistent Terms in Subcontracts. The terms of this
Contract will in all events be binding upon the Vendor regardless of and without
regard to the existence of any inconsistent terms in any agreement between the
Vendor and any Subcontractor whether or not and without regard to the fact that
the Owner may have directly and/or indirectly had notice of any such
inconsistent term.
4.4 Assignability of Subcontracts to Owner. Each agreement between the
Vendor and a Subcontractor must contain a provision stating that, in the event
that the Vendor is terminated for cause, convenience, abandonment of this
Contract or otherwise, (i) each Subcontractor will continue its portion of the
Work as may be requested by the Owner and (ii) such agreement permits assignment
thereof without penalty to the Owner and, in order to create security interests,
to the Other Vendors, in either case at the option of the Owner and for the same
price and under the same terms and conditions as originally specified in such
Subcontractor's agreement with the Vendor.
4.5 Removal of Subcontractor or Subcontractor's Personnel. The Owner
has the right at any time to require removal of a Subcontractor and/or any of a
Subcontractor's personnel from Work on the System upon reasonable grounds and
reasonable prior notice to the Vendor. The exercise of such right by the Owner
will have no effect on the provisions of subsections 4.1 and 4.2.
4.6 Subcontractor Insurance. The Vendor must require its Subcontractors
to obtain, maintain and keep in force during the time they are engaged in
providing Products and Services hereunder adequate insurance coverage consistent
with Section 18 and Schedule 6 (provided that the maintenance of any such
Subcontractor insurance will not relieve the Vendor of its other obligations
pursuant to Section 18 and Schedule 6). The Vendor will, upon the Owner's
request, furnish the Owner with evidence of such insurance in form and substance
reasonably satisfactory to the Owner. All such insurance will be subject to the
Owner's approval. All Subcontractors must be of bondable financial condition.
Nothing herein will be deemed to bar the Vendor or any Subcontractor from
obtaining such insurance on a project basis for each of the Subcontractors
participating in such project.
4.7 Review and Approval not Relief of Vendor Liability. Any inspection,
review or approval by the Owner permitted under this Contract of any portion of
the Work by the Vendor or any Subcontractor will not relieve the Vendor of any
duties, liabilities or obligations under this Contract, but nothing contained in
this subsection 4.7 will be deemed a bar of any waiver given by the Owner to the
Vendor pursuant to and in accordance with the terms of this Contract.
4.8 Vendor Warranties. Except as otherwise expressly provided in
Section 17, the warranties of the Vendor pursuant to Section 17 will be deemed
to apply to all Work performed by any Subcontractor as though the Vendor had
itself performed such Work. Except as otherwise specifically provided in Section
17, the Parties agree that such warranties will not be enforceable merely on a
"pass-through" basis. The Owner may, but will not be obligated to, enforce such
warranties of any Subcontractor to the extent that the Owner determines that the
Vendor is not paying and/or performing its warranties; provided that any such
election by the Owner will not relieve the Vendor from any obligations or
liability with respect to any such warranty.
4.9 Payment of Subcontractors. The Vendor must make all payments to all
Subcontractors (except in the case of legitimate disputes between the Vendor and
any such Subcontractor arising out of the agreement between the Vendor and such
Subcontractor) in accordance with the respective agreements between the Vendor
and its Subcontractors such that Subcontractors will not be in a position to
enforce liens and/or other rights against the Owner, the System or any part
thereof.
SECTION 5 TERM OF CONTRACT
5.1 Initial Term. The initial term of this Contract (the "Initial
Term") is ten (10) years from the Effective Date, subject to the terms and
conditions of this Contract including, without limitation, the termination
provisions set forth in Section 24.
5.2 Renewal. This Contract is subject to renewal for one year periods
(all such periods plus the Initial Term, the "Term") following the expiration of
the Initial Term, on the same terms and conditions contained herein, unless
either Party gives notice to each other Party of its intention not to renew this
Contract within ninety (90) days prior to the expiration of the then current
Term.
SECTION 6 PRICES AND PAYMENT
6.1 Prices. The prices for the Work to be performed pursuant to this
Contract (collectively, the "Contract Price") are as set forth on Schedules 2
and 3, subject to the price variation provisions contained on Schedule 2.
Notwithstanding the prices set forth on Schedules 2 and 3 and the Contract
Price, the Vendor will provide the Owner credits in aggregate value not to
exceed [ ] dollars ($[ ]) to purchase any Products in the following System Areas
(and any and all System Sub-Areas included therein) and in the following amounts
per such System Areas:
System Area Credit Amount
Detroit $[ ]
Milwaukee $[ ]
Denver $[ ]
Salt Lake $[ ]
Spokane $[ ]
The Owner is also entitled to additional purchase credits of up to [_________]
dollars ($[__________]) to be applied in the Owner's discretion to the purchase
of any Products in any or all of the above listed System Areas (and any and all
System Sub-Areas included therein). At any time during the Term of this Contract
that the Owner wishes to apply the purchase credits referenced in this
subsection 6.1 to any of its Product purchases for the System Areas listed
immediately above, the Owner must notify the Vendor of its intent to do so and
it will be the Vendor's sole responsibility, throughout the Term of this
Contract, to keep account of the remaining purchase credits available to the
Owner. Prices for the Work not otherwise set forth on Schedules 2 or 3, if not
otherwise set forth in this Contract, will be no greater than the Vendor's best
list prices then in effect at the time of ordering by the Owner (as established
by the Vendor's then applicable Customer Price Guide for sales in the United
States) and at discounts otherwise provided to the Owner pursuant to the terms
of this Contract. Notwithstanding the foregoing, the aforesaid credits may not
be applied to the purchase of any OTAF Products or Services and/or any Actiview
Products or Services.
6.2 Price Reduction. The Contract Price will be reduced by all amounts
saved as a result of Engineering changes suggested by the Owner which are
incorporated into the Specifications by the Vendor provided that the Vendor
reasonably believes that such changes will not make it impossible or
impracticable to comply with any of its obligations under this Contract,
including, without limitation, those Vendor obligations relating to the
performance criteria applicable to the System. Any reduction in Contract Price
pursuant to the preceding sentence will be agreed upon promptly by the Owner and
the Vendor. Failure of the Parties to mutually agree to such price reductions
within ten (10) days from the date the Owner delivered written notice to the
Vendor of the need for such price reduction due to incorporated Engineering
changes will result in the automatic reference of such matter to dispute
resolution in accordance with subsection 23.1. During the pendency of any such
dispute resolution prices payable pursuant to subsection 6.1 will be payable by
the Owner to the Vendor at the reduced level pursuant to this subsection 6.2. If
in accordance with subsection 23.1 such dispute resolution results in a finding
that such price reduction was not in fact justified then the Owner will
reimburse the Vendor the amounts that would otherwise have been payable to the
Vendor during the pendency of such dispute resolution.
6.2.1 TCU Payments. Notwithstanding anything contained in this
Section 6 to the contrary, the Owner will purchase and the Vendor will provide
the first eleven thousand one hundred (11,100) TCUs at a price of two thousand
three hundred fifteen dollars ($2,315.00) each. Any additional TCUs purchased by
the Owner in excess of eleven thousand one hundred (11,100) TCUs will be sold by
the Vendor to the Owner for one thousand five hundred five dollars ($1,505.00)
each. From July 15, 1997 through December 31, 1997, the Vendor will provide one
(1) HCU free of charge for every four (4) TCUs purchased by the Owner at the one
thousand five hundred five dollars ($1,505.00) price per unit. At any time after
December 31, 1997, any TCUs or HCUs purchased by the owner will be provided at
the prices otherwise set forth in Schedules 2 and 3 to the Contract.
6.2.2 Additional Cabinet Payments. Notwithstanding anything
contained in this Section 6 to the contrary, the Vendor shall supply to the
Owner at the Vendor's sole cost and expense any and all equipment (including any
and all power supplies, cables, cabinets, T-1 facilities and any other ancillary
equipment), labor, materials and services, including installation and
de-installation, in connection with the supply of additional cabinets to the
Owner where a requirement for more than twenty four (24) Channels already exists
or such a requirement arises before the later of (i) July 15, 1997 and (ii) the
first general availability of any HCU(s) by the Vendor to the Owner. On or
before November 15, 1997, the Owner will advise the Vendor of its requirements
concerning disposition of the TCUs purchased for one thousand five hundred five
dollars ($1,505.00) each and any additional cabinets provided by the Vendor to
accommodate TCUs in excess of the first eleven thousand one hundred (11,100)
TCUs. If the Owner elects to redeploy or retain any such additional TCUs and/or
cabinets, the Vendor may invoice the Owner for such additional Equipment based
upon the applicable prices set forth in Schedules 2 and 3 to the Contract. The
Vendor will be responsible for any and all costs arising out of or in connection
with deinstallation and/or removal of any such additional Equipment.
6.3 Payments. Except with respect to Facilities Preparation Services,
RF Engineering, SCP/HLR Products, AS Products and Services, OTAF Products and
Services and Actiview Products and Services as set forth below, an invoice may
be submitted to the Owner only after shipment of a Product or performance of a
Service. Invoices for Products delivered and Services performed for any given
PCS System or PCS Sub-System on or prior to Final Acceptance of the PCS System
and/or PCS Sub-System to which such invoices relate are payable in the following
manner:
(a) [__________] percent of the amount of each invoice will be paid
within [__________] days from receipt of the invoice by the Owner;
(b) [__________] percent of the amount of such invoice will be paid
within [_________] days from the later of (i) Substantial Completion of the PCS
System or PCS Sub-System to which such invoice relates and (ii) receipt of the
invoice by the Owner;
(c) subject to subsection 6.3(d) below, [__________]percent of the
amount of the invoice will be paid within [__________] days from the later of
(i) Final Acceptance of a PCS System to which such invoice relates and (ii)
receipt of the invoice by the Owner. The Owner will not be obligated to make any
such Final Acceptance payment pursuant to this subsection 6.3(c) to the Vendor
for any PCS System or PCS Sub-System within the Initial System, until and unless
the SCP/HLRs to be delivered and installed in accordance with the SCP/HLR
Specifications are so delivered and installed and operating in accordance with
such SCP/HLR Specifications;
(d) Notwithstanding anything stated in this subsection 6.3 to the
contrary, upon the Final Acceptance of any PCS Sub-System, the Owner will only
be required to pay to the Vendor [__________]percent of the amount of the
invoice applicable to such PCS Sub-System within thirty (30) days from the later
of (i) Final Acceptance of such PCS Sub-System and (ii) receipt of the invoice
applicable to such PCS Sub-System by the Owner. The Owner will pay the remaining
[__________] percent of the amount of the invoice applicable to such PCS
Sub-System upon the earlier of (i) ninety (90) days after the date of Final
Acceptance of such PCS Sub-System and (ii) the Final Acceptance of the next
succeeding PCS Sub-System within such PCS System; and
(e) Pursuant to subsection 2.6(d) and provided that any MSCs sought to
be covered hereby have in fact been installed by the Vendor in accordance with
subsection 2.6(d), the Owner will pay to the Vendor [__________] percent of the
price invoiced to the Owner for any MSC within any PCS System within the Initial
System upon the Vendor's successful achievement of Milestone 5 (as set forth in
Exhibit A1) in such PCS System and an additional [__________] percent of the
price invoiced to the Owner for any such MSC upon the Vendor's successful
achievement of Milestone 8 (as set forth in Exhibit A1) in such PCS System. All
other amounts payable by the Owner to the Vendor for MSCs within any PCS System
within the Initial System will be otherwise payable in accordance with the terms
of this Contract provided that the Owner will not be obligated to make any
payments to the Vendor for MSCs pursuant to subsection 6.3(b) to the extent it
made any payments for any such MSCs pursuant to this subsection 6.3(d).
Notwithstanding the foregoing, (i) invoices for RF Engineering for each
PCS System and/or PCS Sub-System will be payable in accordance with subsection
6.4(b) below and (ii) invoices for Facilities Preparation Services within any
PCS System may be submitted by the Vendor in accordance with the terms of
Exhibit B2 and will be payable by the Owner with respect to each System Element
Facility within thirty (30) days after the date of acceptance by the Owner of
such System Element Facility in accordance with the terms of Exhibit B2.
Payments for third party manufactured Products (other than any PCS Products or
any Products integral to construction (e.g., concrete, nuts, bolts and other
customary building supplies)) purchased by the Vendor or its Subcontractors for
installation on the Owner's System Element Locations during the course of and as
part of Facilities Preparation Services may be made by the Owner on a current
basis (but in no event more often than monthly during the course of such
Facilities Preparation Services) as mutually agreed by the Parties.
6.3.1 Additional Products not in Initial System or Otherwise
Provided for in Section 2.2. Any invoice for Products delivered and installed by
the Vendor and Services performed by the Vendor not otherwise provided for under
this subsection 6.3.1, subsection 2.2(a), subsection 2.2(b), subsection 2.2(c)
or as otherwise specifically set forth in this Contract will be payable as
follows: [__________] percent of the amount of the invoice will be payable
within thirty (30) days following receipt of such Products by the Owner or the
full performance of the Services by the Vendor and the outstanding balance will
be payable upon final acceptance by the Owner of the Products or Services to
which such invoice relates. Any invoice (not otherwise provided for under this
subsection 6.3) for Products delivered by the Vendor but not installed by the
Vendor to which such invoice relates will be payable by the Owner at the level
of [__________] percent of the amount of such invoice within thirty (30) days
from the date of delivery of such invoice to the Owner. For any Services not
otherwise covered by the last paragraph of subsection 6.3 above, including,
without limitation, repair services, Engineering and Installation Services not
performed pursuant to a combined furnish and install order, and maintenance fees
(including Annual Release Maintenance Fees), an invoice will be payable by the
Owner at the level of [__________] percent of the amount of such invoice within
thirty (30) days from the date of delivery of such invoice to the Owner or as
otherwise mutually agreed in good faith between the Parties. For the purposes of
this last paragraph of this subsection 6.3 any acceptance or "final acceptance"
relevant to the Owner's obligation to pay will be deemed to occur on the
earliest of (i) the Owner's In Revenue use of such Products and/or Services,
(ii) the Owner's notification of acceptance of such Products and/or Services and
(iii) thirty (30) days following, as applicable, the Owner's completion of
Installation of the Products (where the Vendor is not performing Installation
Services), without the Owner's having given notice of non-acceptance of such
Products and/or Services.
6.3.2 SCP/HLR Payments. Notwithstanding anything contained in
this Section 6 to the contrary, any invoice for SCP/HLR Products delivered
and/or installed by the Vendor will be payable as follows: (a) (i) [__________]
percent of the amount of any invoice for SCP/HLR Hardware will be payable within
[________] days following the installation by the Vendor of such SCP/HLR
Hardware at the appropriate HLR Designated Switch Sites, (ii) [__________]
percent of the amount of any invoice for SCP/HLR Hardware will be payable within
[_______] days following the Owner's Field Acceptance of such installed SCP/HLR
Hardware in accordance with the SCP/HLR Specifications and (iii) the remaining
[__________] percent of the amount of any invoice for SCP/HLR Hardware will be
payable within [_________] days of the Owner's Final Acceptance of such
installed SCP/HLR Hardware in accordance with the SCP/HLR Specifications; and
(b) (i) [__________] percent of the amount of any invoice for SCP/HLR Software
will be payable within [________] days of the Owner's Field Acceptance in
accordance with the SCP/HLR Specifications and (ii) the remaining [__________]
percent of the amount of any invoice for SCP/HLR Software will be payable within
[________] days of the Owner's HLR Final Acceptance in accordance with the
SCP/HLR Specifications.
6.3.3. AS Products Payments. (a) Notwithstanding anything
contained in this Section 6 to the contrary, any invoice for AS Software
delivered and/or installed by the Vendor will be payable by the Owner as
follows: (i) [__________] percent of the total price for any AS Software order
for such AS Software will be payable within [_________] days of the order
placement for such AS Software by the Owner, (ii) [__________] percent of the
amount of any invoice for ordered AS Software will be payable within
[__________] days of the time of delivery by the Vendor of such AS Software,
(iii) [__________] percent of the amount of any invoice for ordered AS Software
will be payable within [__________] days of AS Functional Acceptance of such AS
Software, and (iv) the remaining [__________] percent of the amount of any
invoice for ordered AS Software will be payable within [__________] days of AS
Final Acceptance of such AS Software.
(b) The Vendor may invoice the Owner for [_________]
percent of the passed-through cost (without mark-ups, add-ons or charges of
any kind (except as explicitly provided in Appendix I)) of any third party man-
ufactured AS Equipment supplied by the Vendor for the AS Software for the AS
Software System in accordance with the AS Statement of Work and the Owner will.
be required to pay any such invoice for third-party AS Equipment within [______]
days of the Owner's receipt and reasonable acceptance thereof. The Vendor may
invoice the Owner for AS Services (if applicable) pursuant to the first sen-
tence of subsection 6.3.1 above. AS Software Annual Maintenance Services
will be provided by the Vendor in accordance with the Annual Application
Software Maintenance Services Fees set forth on Appendix I and such fees will
be invoiced to the Owner with the Annual Software Release Maintenance Fees.
6.3.4 OTAF Payments. Any and all SPARC/OTAF Products and
Services provided by the Vendor to the Owner pursuant to the OTAF Statement of
Work will be provided, installed and tested at the Vendor's sole cost and
expense. Any such SPARC/OTAF Products may be retained by the Owner, to the
extent it so chooses in its sole and absolute discretion, upon the provision and
installation of SCP/OTAF Products. The Vendor will be solely responsible for any
and all costs associated with the deinstallation and/or removal of any
SPARC/OTAF Products upon the availability and provision of SCP/OTAF Products
pursuant to the OTAF Statement of Work. Notwithstanding anything contained in
this Section 6 to the contrary, any invoice for SCP/OTAF Products delivered
and/or installed by the Vendor will be payable as follows: (i) [__________]
percent of the amount of any invoice for SCP/OTAF Products will be payable
within [__________] days following the installation by the Vendor of the
SPARC/OTAF Products in the Test-bed Laboratory in accordance with the OTAF
Statement of Work, (ii) [__________] percent of the amount of any invoice for
SCP/OTAF Products will be payable within [__________] days following the Owner's
OTAF Field Acceptance of installed SPARC/OTAF Products in accordance with the
OTAF Statement of Work, (iii) [__________] percent of the amount of any invoice
for SCP/OTAF Products will be payable within [__________] days following the
delivery of OTAF Software to the Test-bed Laboratory, (iv) [__________] percent
of the amount of any invoice for SCP/OTAF Products will be payable within
[__________] days following the Owner's OTAF Field Acceptance of installed
SCP/OTAF Products in accordance with the OTAF Statement of Work, and (v) the
remaining [__________] percent of the amount of any invoice for SCP/OTAF
Products will be payable within [__________] days of the Owner's Final
Acceptance of such installed SCP/OTAF Products in accordance with the OTAF
Statement of Work.
6.3.5 Actiview Payments. (a) Notwithstanding anything
contained in this Section 6 to the contrary, any invoice for Actiview Software
delivered and/or installed by the Vendor will be payable by the Owner as
follows: (i) [__________] percent of the total price for any Actiview Software
order for such Actiview Software will be payable within [__________] days of the
order placement for such Actiview Software by the Owner, (ii) [__________]
percent of the amount of any invoice for ordered Actiview Software will be
payable within [__________] days of the time of delivery by the Vendor of such
Actiview Software, (iii) [__________] percent of the amount of any invoice for
ordered Actiview Software will be payable within [__________] days of Actiview
Functional Acceptance of such Actiview Software, and (iv) the remaining
[__________] percent of the amount of any invoice for ordered Actiview Software
will be payable within [__________] days of Actiview Final Acceptance of such
Actiview Software.
(b) The Vendor may invoice the Owner for Actiview
Services (if applicable) pursuant to the first sentence of subsection 6.3.1
above. Actiview Software Annual Maintenance Services will be provided by
the Vendor pursuant to the Annual Application Software Maintenance Ser-
vices Fees as set forth on Appendix T and such fees will be invoiced to the
Owner with the Annual Software Release Maintenance Fees.
6.4 Payments for Facilities Preparation Services. (a) Upon receipt of
payment from the Owner for Facilities Preparation Services the Vendor will
promptly pay each Subcontractor for Facilities Preparation Services the amount
to which each Subcontractor is entitled pursuant to such Subcontractor's
agreement with the Vendor, based on each Subcontractor's portion of such Work.
By appropriate agreement in each Subcontractor's agreement with the Vendor, the
Vendor will require such Subcontractor to make payments to sub-Subcontractors
and materialmen in a similar manner. The Owner has no duty or obligation to
insure the payment of money to a Subcontractor, sub-Subcontractor, materialman
or any other third party, any such payment being the obligation of the Vendor.
Subcontractors, sub-Subcontractors, materialmen and any other third parties will
not be deemed third party beneficiaries of the Owner's obligations to pay the
Vendor. On or before the Owner's acceptance of the Facilities Preparation
Services of any System Element Facility within any given PCS System in
accordance with the terms of Exhibit B2, the Owner will have received details
(in a form reasonably satisfactory to the Owner) of all invoices and charges for
such Facilities Preparation Services incurred by the Vendor in connection with
the Facilities Preparation Services for such System Element Facility.
(b) The Owner will make payment to the Vendor for RF Engineering
Services performed by the Vendor within any given System Area pursuant to the
terms of this Contract based upon the following: (i) [__________] percent of the
"RF Engineering Services price" within the applicable System Area will be
payable by the Owner within [__________] days after receiving the Preliminary RF
Design for such System Area pursuant to Milestone 2 for such System Area as set
forth on Exhibit A1; (ii) [__________] percent of the RF Engineering Services
price within the applicable PCS System will be payable by the Owner within
[__________] days after the determination of the Final Site Count and delivery
of the Final RF Design for such PCS System in accordance with subsection 2.6 and
Milestone 5 for such System Area as set forth on Exhibit A1; and (iii)
[__________] percent of the RF Engineering Services price will be payable by the
Owner within the applicable PCS System within [__________] days of the Vendor's
Installation of the Products for such PCS System in accordance with the terms of
the Contract and Milestone 7 for such System Area as set forth on Exhibit A1.
For the purposes of this subsection 6.4(b) the term "RF Engineering Services
price" will mean the number of System Element Facilities within the applicable
PCS System pursuant to the build-out of the Initial System multiplied by the
Vendor's System Element Facility RF Engineering price as set forth on Schedule
3. In any given PCS System and/or System Area the RF Engineering Services price
will be readjusted (and any amounts owed to either Party will be reimbursed) at
the point in time that payment would be made for such RF Engineering pursuant to
clause (iii) of this subsection 6.4(b) in accordance with the determination of
the actual Final Site Count and delivery of Final RF Design applicable to such
PCS System.
6.5 Monthly Forecasts. Commencing on the Effective Date, the Vendor
will provide the Owner with monthly forecasts of the costs of RF Engineering and
Facilities Preparation Services in each PCS System and PCS Sub-System in which
such Services are being provided by the Vendor and/or any of its Subcontractors
throughout the period that any such Services are being provided during the Term
of this Contract. The forecasts provided by the Vendor pursuant to this
subsection 6.5 must be in sufficient detail to reasonably inform the Owner of
the nature of the costs to be incurred for each of RF Engineering and Facilities
Preparation Services in each of the PCS Systems and/or any PCS Sub-Systems in
which such Services are being provided by the Vendor and/or any of its
Subcontractors pursuant to the terms of this Contract.
6.6 No Payment in Event of Material Breach. Notwithstanding any other
provision to the contrary contained herein, the Owner will have no obligation to
make any payment with respect to the affected PCS System and/or PCS Sub-System
in addition to amounts previously paid to the Vendor at any time the Vendor is
in material breach of this Contract with respect to such PCS System and/or PCS
Sub-System, as the case may be, until and unless such breach is cured or waived
by the Owner in accordance with the terms of this Contract.
6.7 Microwave Relocation Delay Partial Payments. In the event the
Vendor has achieved Milestone 7 (as set forth on Exhibit A1) within any given
PCS System and/or PCS Sub-System, as the case may be, but there is a delay in
the Owner's completion of Microwave Relocation in such PCS System and/or PCS
Sub-System, as the case may be, pursuant to and in accordance with subsection
2.38, then during the Microwave Delay Period within such PCS System and/or PCS
Sub-System, as the case may be, the Owner agrees to pay to the Vendor (i)
[__________] percent of the amounts otherwise due to the Vendor under subsection
6.3(b) on or before [_________] of such Microwave Delay Period, (ii) an
additional [__________] percent of the amounts otherwise due to the Vendor under
subsection 6.3(b) on or before [_____________] of such Microwave Delay Period,
(iii) an additional [__________] percent of the amounts otherwise due to the
Vendor under subsection 6.3(b) on or before [______________] of such Microwave
Delay Period, and (iv) any remaining amounts still outstanding pursuant to
subsection 6.3(b) on the last day of such Microwave Delay Period provided that
Substantial Completion (as deemed applicable and appropriate pursuant to good
faith mutual agreement between the Parties at such time) of such PCS System
and/or PCS Sub-System, as the case may be, will have been achieved by the Vendor
in accordance with the terms of this Contract and Exhibit B3. Nothing contained
herein to the contrary will in any way release the Vendor from its obligations
or otherwise modify the Vendor's obligations as to the completion of testing in
accordance with Exhibit B3 once Microwave Relocation in such affected PCS
System, PCS Sub-System or affected portion of a PCS System and/or PCS Sub-System
has been successfully achieved by the Owner. Nothing contained herein to the
contrary will in any way require the Owner to pay the Vendor amounts already
paid or otherwise provided for pursuant to any other provision of this Contract.
6.8 In Revenue Payments. At any time during the Site Acquisition Delay
Period or the Microwave Delay Period, as the case may be, the Owner may, in its
sole discretion, decide to place the PCS System or PCS Sub-System, as the case
may be, or any portion thereof which is subject to such delay into In Revenue
Service. In the event the Owner does in fact decide, in its sole discretion, to
place any PCS System or PCS Sub-System, as the case may be, or any portion of a
PCS System or PCS Sub-System, as the case may be, into In Revenue Service during
any such Site Acquisition Delay Period or Microwave Delay Period, as the case
may be, the Owner will be obligated to pay to the Vendor the amounts it would
have otherwise paid to the Vendor upon the Substantial Completion of such In
Revenue PCS System or In Revenue portion of such PCS System, as the case may be,
and the Vendor will be entitled to commence Substantial Completion testing for
such In Revenue PCS System or In Revenue portion of such PCS System; provided
that the Owner understands that the Vendor can only do such Substantial
Completion testing as set forth in Exhibit B3 as is at such time applicable and
appropriate (pursuant to the good faith mutual agreement of the Parties at such
time) to such In Revenue PCS System or PCS Sub-System or In Revenue portion of
such PCS System or PCS Sub-System. The Parties expressly understand and agree
that this subsection 6.8 will only be effective in the event that the Owner
chooses, in its sole discretion, to place a PCS System, PCS Sub-System or a
portion thereof In Revenue during a Microwave Delay Period or Site Acquisition
Delay Period, as applicable to such In Revenue PCS System or In Revenue portion
of such PCS System or PCS Sub-System, as the case may be. Nothing contained
herein to the contrary will in any way modify the Vendor's obligations as to the
completion and testing of the remaining incomplete non-In Revenue portion of any
such PCS System or PCS Sub-System, as the case may be, which is otherwise
partially In Revenue pursuant to and in accordance with the terms of this
Contract, including but not limited to the Project Milestones set forth on
Exhibit A1. Nothing contained herein to the contrary will in any way require the
Owner to pay the Vendor amounts already paid or otherwise provided for pursuant
to any other provision of this Contract.
SECTION 7 ORDERS AND SCHEDULING
7.1 Initial Commitment. Subject to subsection 7.2 and to subsection 2.6
and the determination of the Final Site Count and the delivery of the Final RF
Engineering Plan for each PCS System and PCS Sub-System, the Parties understand
that the quantities of Products and Services identified on Schedules 2 and 3
which are necessary for the build-out by the Vendor of the Initial System
pursuant to the terms and conditions of this Contract constitute the Owner's
initial purchase commitment under this Contract (the "Initial Commitment").
7.2 Change Orders. The Owner has the right by way of written orders
("Change Orders") to request Expansions, other revisions and/or modifications in
the Work, including but not limited to the Specifications, the manner of
performance of the Work or the timing of the completion of the Work; provided
that specific Change Orders will be submitted to the Vendor and the Vendor
(subject to the Owner's agreement) will be entitled to make reasonable price
and/or Project Milestone adjustments to the Contract Price in the case of
material modifications. The Vendor must promptly notify the Owner of any such
requested change or changes to Products which may materially affect the
operation and/or maintenance of the System, any PCS System, any PCS Sub-System
or any part thereof. The Parties agree that within fifteen (15) Business Days
after the Owner's initial request for a Change Order pursuant to this subsection
7.2 they will mutually agree to all aspects of such Change Order which agreement
will be evidenced by a writing executed by an authorized representative of each
of the Parties. In the event the Vendor refuses to agree to any such Change
Order within such fifteen (15) day period then the Vendor will provide a written
notice to the Owner detailing its reasons for such refusal and if the Owner, at
such time, disagrees with the reasons set forth in such Vendor notice the matter
will then be referred to dispute resolution pursuant to Section 23. Nothing
contained in this subsection 7.2 is intended to limit the Vendor's right, from
time to time, to make suggestions for modifications to the Work or the
Specifications pursuant to and in accordance with this subsection 7.2 and the
terms of this Contract, provided that in any such event the Owner, in its sole
and absolute discretion pursuant to the terms of this Contract may refuse to
make any such modification or otherwise agree to issue a Change Order
incorporating any such Vendor suggestion.
7.3 Cancellation. During the term of this Contract, and subject to
Section 24, the Owner will have the right, but not the obligation, at any time
to cancel, in whole or in part, any order made pursuant to the terms of this
Contract upon advance written notice to the Vendor. In the event of a
cancellation permitted hereunder, the Owner will pay to the Vendor order
cancellation charges in accordance with, and pursuant to, the terms of Schedule
11.
SECTION 8 INSTALLATION
8.1 Installation. The Vendor will furnish and install the Products
pursuant to the Project Milestones set forth on Exhibit A and in accordance with
the requirements and criteria set forth in Exhibit D. In accordance with and
subject to the Project Milestones set forth on Exhibit A (and the intervals set
forth therein and herein), the Vendor will complete all Product Installation in
any given PCS System and/or PCS Sub-System in conformance with the requirements
and criteria set forth in Exhibit D within thirty-two and one-half (32-1/2) days
of completion of the Facilities Preparation Services pursuant to Milestone 6 (as
set forth in Exhibit A1) in such PCS System and/or PCS Sub-System.
8.2 No Interference. The Vendor will install the Products and build
each of the PCS Systems and PCS Sub-Systems so as to cause no unauthorized
interference with or obstruction to lands and thoroughfares or rights of way on
or near which the Installation work may be performed. The Vendor must exercise
every reasonable safeguard to avoid damage to existing facilities, and if
repairs or new construction are required in order to replace facilities damaged
by the Vendor due to its carelessness, negligence or willful misconduct, such
repairs or new construction will be at the Vendor's sole cost and expense.
SECTION 9 ACCEPTANCE TESTING AND ACCEPTANCE
9.1 Acceptance Testing. The Vendor must carry out the Acceptance Tests
on the Products, the PCS Systems and the PCS Sub-Systems as specified in Exhibit
B3 and each PCS System and PCS Sub-System must successfully achieve acceptance
(including Substantial Completion and Final Acceptance) in accordance with the
terms of Exhibit B3.
9.2 Costs and Expenses. The costs and expenses of such Acceptance Tests
will be borne by the Vendor, and the Owner will not be charged or billed for
such costs and expenses, except to the extent that such charges or expenses are
not included in the Contract Price pursuant to and in accordance with the terms
of this Contract. If the Acceptance Tests performed by the Vendor are not
satisfied in accordance with the relevant requirements of Exhibit B3 or are
otherwise inconclusive in the reasonable judgment of the Owner, the Owner will
have the right to order further Acceptance Tests at the sole cost and expense of
the Vendor.
9.3 Notification. The Vendor will notify the Owner at least ten (10)
days prior to the performance of any Acceptance Tests. Prior to or at the first
practicable date after such notification, the Vendor and the Owner will each
agree upon and approve any test forms to be used as part of the particular
Acceptance Test being conducted.
9.4 Presence at Acceptance Tests. The Owner and its representatives
will be permitted to witness and have unrestricted access to the Vendor's and
its Subcontractors' Acceptance Tests, provided that no such access will
materially interfere with or cause undue delay of the Vendor's Work. Nothing
herein will be deemed to require the Vendor to reimburse the Owner for any costs
incurred by the Owner in the Owner's participation in or observation of
Acceptance Tests or other tests performed by the Vendor pursuant to and in
accordance with the terms of this Section 9.
9.5 Correction of Defects. (a) If any Acceptance Test is not satisfied,
the Vendor will, at its sole cost and expense, (i) in writing, notify the Owner
of such failure, and (ii) promptly correct whatever Defects or Deficiencies
caused such Acceptance Test not to be satisfied. After such correction, the
Vendor must (i) repeat at its sole cost and expense the failed Acceptance Tests
and as many other Acceptance Tests as are necessary to ensure in the reasonable
opinion of the Owner that such correction made by the Vendor would not have
affected the outcome of such other Acceptance Tests, and (ii) in writing, notify
the Owner as to what correction was made and what Acceptance Tests were
repeated.
(b) If Final Acceptance of a PCS System and/or PCS Sub-System, as the
case may be, cannot be achieved after Substantial Completion of such PCS System
or PCS Sub-System (provided that the Vendor will have fully built-out the Final
RF Engineering Plan in accordance with the Final Site Count in accordance with
the terms of this Contract) because such PCS System or PCS Sub-System, as the
case may be, fails to meet applicable performance criteria as set forth in
Exhibit F, but would do so with only the implementation and installation of
additional Base Stations at additional System Element Locations over and above
the Final Site Count for such PCS System or PCS Sub-System, as the case may be,
the Owner will have the right, in its sole and absolute discretion, to (i)
finally accept such PCS System and/or PCS Sub-System, as the case may be, in
which case the Parties will mutually agree in good faith on revised performance
criteria for such PCS System or PCS Sub-System, as the case may be, or (ii)
require the Vendor to continue to work (in which case Final Acceptance of such
PCS System or PCS Sub-System, as the case may be, will be delayed until
completion of the work and testing contemplated herein and in Exhibit B3) to
cause such PCS System or PCS Sub-System, as the case may be, to perform at the
applicable levels of the then existing performance criteria as set forth in
Exhibit F, in which case, the required additional Base Stations and additional
System Element Locations will be treated as provided for in subsections 17.5(c)
and 17.10. Any additional Base Station(s) paid for by the Owner pursuant to this
subsection 9.5(b) (which would only have to be paid for (including any costs
associated with the installation thereof) by the Owner upon the subsequent
achievement of Final Acceptance by the Vendor in accordance with Exhibit B3
which such payment will be made with the payments otherwise made on Final
Acceptance pursuant to Section 6) will be offset against the number of new Base
Stations that may subsequently be for the account of the Owner pursuant to the
terms of subsection 17.5(c). If the Parties are unable to agree upon revised
performance criteria as provided in clause (i) above, the matter will be
resolved in accordance with the provisions of subsection 23.3.
9.6 Acceptance Certificate. Upon the successful completion of the
Acceptance Tests for a PCS System, and/or a PCS Sub-System or any part thereof
conducted by the Vendor, the Vendor must submit to the Owner an Acceptance
Certificate certifying that (i) such Acceptance Tests have been successfully
completed, (ii) the Work so tested has been completed in accordance with the
terms of this Contract, and (iii) if applicable, that the remainder of the Work
is continuing in accordance with the Project Milestones set forth on Exhibit A.
Upon its reasonable satisfaction that such Acceptance Certificate is correct and
complete, the Owner will acknowledge such certification by signing the
Acceptance Certificate. In the event of any dispute as to the results of any
Acceptance Tests, such dispute will be resolved pursuant to the dispute
resolution mechanisms set forth in Section 23 including, but not limited to, the
Third Party Engineer review mechanism set forth in subsection 23.3.
9.7 AS Acceptance Testing and Acceptance. (a) After installation of the
AS Software, or any part thereof as set forth in Appendix K, the Owner will
carry out Functional Acceptance Tests in accordance with the provisions of
Appendix K, testing the compliance of the AS Software with the AS Statement of
Work. The Owner will start the AS Functional Acceptance Tests no later than
seven (7) days after installation of such AS Software and complete the AS
Functional Acceptance Tests no later than fourteen (14) days after installation
of such AS Software.
(b) After such AS Software has successfully passed the Functional
Acceptance Tests, the Owner will commence the AS Final Acceptance Test in
accordance with the provisions of Appendix K. The duration of the AS Final
Acceptance Test shall be thirty (30) days after successful completion of the AS
Functional Acceptance Test.
(c) If the Owner fails to conduct either the AS Functional Acceptance
Tests or the Final Acceptance Test within the time periods set forth in
subsections 9.7(a) and 9.7(b), the AS Software shall be deemed to have met the
Acceptance Test criteria on the last day of the time period allotted for the
applicable AS Acceptance Test.
(d) The costs and expenses of the AS Acceptance Tests will be borne by
the Owner. Upon request of the Owner, the Vendor will provide reasonable support
to the Owner during the AS Functional Acceptance Tests and the AS Final
Acceptance Tests.
(e) If the AS Acceptance Tests show that the AS Software complies with
the AS Statement of Work, such AS Software will be accepted by the Owner by
confirming the results in a written report.
(f) If any AS Acceptance Test is not satisfied, the Owner will (i) in
writing, notify the Vendor of such failure, and (ii) the Vendor will promptly
correct whatever Defects or Deficiencies caused such AS Acceptance Test not to
be satisfied. After such correction, the Vendor must (i) repeat at its sole cost
and expense the failed AS Acceptance Tests and as many other AS Acceptance Tests
as are necessary to ensure in the reasonable opinion of the Owner that such
correction made by the Vendor would not have affected the outcome of such other
AS Acceptance Tests, and (ii) in writing, notify the Owner as to what correction
was made and what AS Acceptance Tests were repeated. Nothing stated herein to
the contrary will in any way limit the Owner's right to liquidated damages
pursuant to subsection 15.8 or other remedies under this Contract in the event
the Vendor fails to deliver AS Products in accordance with the requirements of
Appendix G on the dates originally scheduled for such deliveries.
(g) Minor Defects and shortcomings not affecting the operational use of
any part of the AS Software shall not give rise to withholding the acceptance
provided that the Vendor undertakes to remedy such Defects and shortcomings as
soon as reasonably possible, pursuant to the procedures described in Appendix K.
9.8 Actiview Acceptance Testing and Acceptance. (a) After installation
of Actiview Software as set forth in Appendix S, the Owner will carry out
Actiview Functional Acceptance Tests in accordance with the provisions of
Appendix S, testing the compliance of the Actiview Software with the Actiview
Statement of Work. The Owner will start the Actiview Functional Acceptance Tests
no later than thirty (30) days after installation of such Actiview Software and
complete the Actiview Functional Acceptance Tests no later than sixty (60) days
after installation of such Actiview Software.
(b) After the Actiview Software has successfully passed the Actiview
Functional Acceptance Tests, the Owner will commence the Actiview Final
Acceptance Test in accordance with the provisions of Appendix S. The Actiview
Final Acceptance Test shall be thirty (30) days after successful completion of
the Actiview Functional Acceptance Test.
(c) If the Owner fails to conduct either the Actiview Functional
Acceptance Tests or the Actiview Final Acceptance Tests within the time periods
set forth in subsections 9.8(a) and 9.8(b), the Actiview Software will be deemed
to have met the Actiview Acceptance Test criteria on the last day of the time
period allotted for the applicable Actiview Acceptance Test unless any such
delay is caused by or due to an act or omission of the Vendor and/or a Defect in
the Actiview Software.
(d) The Owner will be responsible for the costs and expenses of the
Actiview Acceptance Tests. The Vendor will provide the support services to the
Owner set forth in the Actiview Statement of Work.
(e) If the Actiview Acceptance Tests show that any of the Actiview
Software complies with the Actiview Statement of Work, such Actiview Software
will be accepted by the Owner by confirming the results in a written report.
(f) If any Actiview Acceptance Test is not satisfied, the Owner will
(i) in writing, notify the Vendor of such failure, and (ii) the Vendor will
promptly correct whatever Defects or Deficiencies caused such Actiview
Acceptance Test not to be satisfied. After such correction, the Vendor must (i)
repeat at its sole cost and expense the failed Actiview Acceptance Tests and as
many other Actiview Acceptance Tests as are necessary to ensure in the
reasonable opinion of the Owner that such correction made by the Vendor would
not have affected the outcome of such other Actiview Acceptance Tests, and (ii)
in writing, notify the Owner as to what correction was made and what Actiview
Acceptance Tests were repeated. Nothing stated herein to the contrary will in
any way limit the Owner's right to liquidated damages pursuant to subsection
15.10 or other remedies under the Contract in the event the Vendor fails to
deliver Actiview Products in accordance with the requirements of Appendix U on
the dates originally scheduled for such deliveries.
(g) Minor Defects and shortcomings not affecting the operational use of
any part of the Actiview Software shall not give rise to withholding the
acceptance provided that the Vendor undertakes to remedy such Defects and
shortcomings as soon as reasonably possible, pursuant to the procedures
described in Appendix S.
SECTION 10 DISCONTINUED PRODUCTS
10.1 Notice of Discontinuation. During the Term of this Contract the
Vendor agrees to provide the Owner, or the respective Affiliates as the case may
be, except under extraordinary circumstances not less than one (1) year notice
before the Vendor discontinues accepting orders for a PCS Product ("Discontinued
Products") sold under this Contract. Where the Vendor offers a product for sale
that is equivalent in form, fit and function in accordance with and pursuant to
the Specifications, the notification period may vary but in no event will be
less than the applicable notice period set forth in subsection 2.17.
Notwithstanding the foregoing, the Vendor will not discontinue accepting orders
for any PCS Product applicable to or otherwise used in the System or any portion
thereof until and unless the Vendor and the Owner have agreed upon a mutually
acceptable transition plan that takes into account the Owner's and its
Affiliates' existing investment in the Item scheduled for discontinuance subject
to the minimum terms and conditions set forth in subsections 10.2 and 10.3
below. The Parties' failure to reach agreement within sixty (60) days or such
other reasonable time as they may mutually establish will, upon the request of
either Party, be referred for resolution pursuant to Section 23. In the event of
the foregoing, the Vendor must continue to furnish PCS Products fully compatible
with the System Elements within the System at such time during the Term of the
Contract; provided that nothing herein will bar the Vendor from discontinuing
individual Items of PCS Products as provided in and pursuant to this subsection
10.1.
10.2 Discontinuation During Warranty Period. If, during the Warranty
Period applicable to the relevant Discontinued Product pursuant to Section 17,
the Vendor does not make such Discontinued Products available to the Owner, the
price of any Products provided as a replacement for the Discontinued Product by
the Vendor and required to be purchased by the Owner during such Warranty Period
to replace existing Discontinued Products delivered to the Owner in order to
maintain performance and functionality equivalent to that previously provided by
the Discontinued Products will be discounted by an amount equal to fifty percent
(50%) of the price previously paid for such Discontinued Products.
10.3 Discontinuation After Warranty Period. In the event that the
Vendor discontinues the manufacture of a Product following the expiration of the
applicable Warranty Period and the Owner is required to replace an existing
Discontinued Product with a new Product in order to maintain performance and
functionality, the Owner will receive a credit in an amount equal to the
percentage set forth below multiplied by the purchase price paid for such
original Product, which credit will be applied against the Vendor's then-current
list price for a replacement for such Discontinued Product; provided that the
credit will not exceed the Vendor's then-current best list price (as determined
by the Customer Price Guide) for such replacement Product subject to the
discounts available to the Owner pursuant to Section 26 and the other terms of
this Contract:
(i) up to and including one year following expiration of the
applicable Warranty Period: 40%;
(ii) more than one year and up to and including two years following
expiration of the applicable Warranty Period: 30%; and
(iii)more than two years and up to and including three years following
expiration of the applicable Warranty Period: 20%.
SECTION 11 SOFTWARE; CONFIDENTIAL INFORMATION
11.1 RTU License. The Owner is hereby granted a perpetual,
non-exclusive, non-transferable (except as set forth in subsections 11.4 and
27.4), fully paid-up, multi-site (capability to have deployed Software in any
number of sites) right to use license for the Software ("RTU License"), to
operate the Products provided in each of the PCS Systems and/or PCS Sub-Systems,
as the case may be, and the System as a whole, subject to payment of any license
fees in accordance with the terms of this Contract. Except as otherwise provided
herein, the Owner is granted no title or ownership rights to the Software. Such
rights will remain with the Vendor, its Subcontractors or suppliers, as
appropriate. The RTU License granted hereunder includes and is deemed to cover
any Affiliate of the Owner to the extent such Affiliate is (i) developing,
constructing and/or operating a PCS system and (ii) seeking to access and/or use
the Products and Services available on or as a part of the Owner's System.
11.2 Owner's Obligations. The Owner agrees that the Software, whether
or not modified, will be treated as proprietary to the Vendor, its Subcontrac-
tors or its suppliers, as appropriate and the Owner will:
(a) Utilize the Software solely in conjunction with the System and/or
any PCS System or any PCS Sub-System; provided that the Vendor acknowledges that
the Software will be integrated across interfaces with systems, equipment and
software provided by other suppliers and customers including, but not limited
to, the Other Vendors;
(b) Ensure that all copies of the Software will, upon any reproduction
by the Owner authorized by the Vendor and whether or not in the same form or
format as such Software, contain the same proprietary, confidentiality and
copyright notices or legends which appear on the Software provided pursuant
hereto; and
(c) Hold secret and not disclose the Software (or, subject to
subsection 27.19, interfaces to or with such Software) to any person, except to
(i) such of its employees, contractors, agents or Affiliates that are involved
in the operation or management of the System and/or any PCS System or any PCS
Sub-System and need to have access thereto to fulfill their duties in such
capacity, or (ii) other Persons who need to use such Software to permit
integration of the System and/or any PCS System and/or any PCS Sub-System with
systems and software of other suppliers and customers including, but not limited
to, the Other Vendors; provided that such Persons agree, or are otherwise
obligated, to hold secret and not disclose the Software to the same extent as if
they were subject to this Contract.
(d) When and if the Owner determines that it no longer needs the
Software or if the Owner's license is canceled or terminated pursuant to the
terms of this Contract, return all copies of such Software to the Vendor or
follow reasonable written disposition instructions provided by the Vendor. If
the Vendor authorizes disposition by erasure or destruction, the Owner will
remove from the medium on which Software resides all electronic evidence of the
Software, both original and derived, in such manner that prevents subsequent
recovery of such original or derived Software.
11.3 Backwards Compatibility. (a) In addition to the warranties
contained in Section 17 of this Contract, the Vendor represents and warrants
that each Software Revision Level during the Term of this Contract will be
Backwards Compatible with all existing in-service Equipment provided by the
Vendor and the immediately preceding Software Revision Level of such Software
made available to Customers by the Vendor.
(b) In the event that Software supplied by the Vendor at any System
Element Site at any time does not provide Backwards Compatibility as required by
this subsection 11.3, then the Vendor will provide, without charge to the Owner,
the most current Software Updates of the Software to each such System Element
Location, and otherwise take such steps as may be necessary to achieve Backwards
Compatibility.
11.4 Transfer and Relocation. (a) Except as provided in subsection
27.4, where the Owner or any successor to the Owner's title in the Products (i)
elects to transfer a Product to a third party, and where such Product will
remain in place and operational for the purpose of continuing to provide PCS in
the franchise area in which such Product is installed, or (ii) elects to
transfer Products to an Affiliate for reuse within the United States, the Owner
may transfer its RTU License for the Software furnished under this Contract for
use with such Product, without the payment of any additional Software
right-to-use fees by the transferee, but only under the following conditions:
(A) The right to use such Software may be transferred
only together with the Products with which the Owner
has a right to use such Software, and such right to
use the Software will continue to be limited to use
with such Products;
(B) Before any such Software is transferred, the Owner
will notify the Vendor of such transfer and the
transferee will have agreed in writing (a copy of
which will be provided to the Vendor) to keep the
Software in confidence and to corresponding
conditions respecting possession and use of Software
as those imposed on the Owner in this Contract; and
(C) The transferee will have the same right to Software
warranty and Software maintenance for such Software
as the transferor, provided the transferee continues
to pay the fees, including recurring fees, such as
Annual Release Maintenance Fees, if any, associated
with such Software warranty or maintenance.
(b) Except as provided in subsection 11.4(a) or subsection 27.4, and
except as may otherwise in this Contract be provided expressly, the Owner or any
successor to the Owner's title in the Products will have no right to transfer
Software furnished by the Vendor under this Contract without the consent of the
Vendor. If the Owner or such successor elects to transfer a Product purchased
under this Contract for which it does not under this Contract have the right to
transfer related Software, the Vendor agrees that upon written request of the
transferee of such Product, or of the Owner or such successor, the Vendor will
not without reasonable cause fail to grant to the transferee a license to use
such Software with the Products, whether to be located within the United States
or elsewhere, upon payment of a relicensing fee to the Vendor in an amount equal
to fifty percent (50%) of the license fee for the Software originally paid by
the Owner to the Vendor at the time of the original purchase of the Software
from the Vendor; provided that such relicensing fee will in no event exceed
fifteen percent (15%) of the price paid by the transferee to the Owner for the
Product with respect to which such Software is used.
11.5 Survival. The obligations of the Owner under the Software Licenses
will survive the termination of this Contract, regardless of the cause of
termination.
11.6 Access to Source Codes. The Vendor grants the Owner a right to
access the Source Code and to modify the Software (the "RTM License") for the
maintenance, enhancement and support of those Products purchased from the Vendor
and owned or operated by the Owner under the following circumstances which will
be set forth in the Escrow Agreement:
(a) If the Vendor becomes insolvent, makes a general assignment for the
benefit of creditors, files a voluntary petition in bankruptcy or an involuntary
petition in bankruptcy is filed against the Vendor which is not dismissed within
sixty (60) days, or suffers or permits the appointment of a receiver for its
business, or its assets become subject to any proceeding under a bankruptcy or
insolvency law, domestic or foreign, or has liquidated its business, or the
Vendor, or a business unit of the Vendor that is responsible for maintenance of
the Software, ceases doing business without providing for a successor, and the
Owner has reasonable cause to believe that any such event will cause the Vendor
to be unable to meet its warranty service or support requirements hereunder; or
(b) If it is determined, pursuant to the dispute resolution mechanisms
set forth in subsection 23.1, that the Vendor, its assignee or designee has
failed, or is unable, to provide the warranty service or support of the System
and/or any PCS System and/or any PCS Sub-System contemplated by this Contract.
11.7 Escrow Agreement. The Vendor agrees, at the Owner's request, to
become party to a Source Code escrow agreement (the "Escrow Agreement") which
will allow the Owner to obtain access to the applicable Source Codes in the
circumstances set forth in subsection 11.6 and such Escrow Agreement. The Owner
will pay all costs, including the Vendor's reasonable costs incurred in
gathering, organizing and delivering such Source Code, associated with such
Escrow Agreement. The Vendor represents, warrants and agrees that (i) the Source
Codes delivered into escrow in accordance with the Escrow Agreement will
comprise the full Source Code language statement of the Software as used, or
required to be used, by the Vendor to maintain or modify the System and/or any
PCS System and/or any PCS Sub-System without the help of any other Person or
reference to any other material, (ii) such Source Codes will include all
versions thereof from the date of initial creation, and (iii) such Source Codes
must be kept up to date, including all updates needed to maintain compliance
with the Specifications and the System Standards. In addition, all parts of the
Source Codes from the date of creation thereof, and all updates thereto
(including, without limitation, those that are necessary to maintain compliance
with the Specifications) must be delivered into escrow in accordance with the
Escrow Agreement; provided that the Vendor will not be required to update and/or
deliver into escrow any updates of any Owner Software modifications made
pursuant to subsections 12.5, 12.6 or 12.7.
11.8 Software Maintenance. The Vendor represents and warrants that the
Software delivered to the escrow agent pursuant to subsection 11.7 for
redelivery to the Owner pursuant to the Escrow Agreement will be in a form
suitable for reproduction by the Owner and will include the full Source Code
language statement of the Software as used by the Vendor sufficient to allow
maintenance and modification.
11.9 Custom Development.
11.9.1 Request for Custom Material. (a) From time to time, the
Owner may have requirements for custom Software (including, but not limited to,
development of identified features or modifications to Software or Software
Enhancements) or custom development of Equipment (including, but not limited to,
development of identified features or modifications to Equipment or Equipment
Enhancements) to be provided by the Vendor under this Contract (the "Custom
Material"). If the Owner has a requirement for Custom Material that is a
specific enhancement or modification of a previously licensed feature or of
previously purchased Products, the Owner will identify to the Vendor in writing
a summary of any such proposed development of Custom Material. Such summary will
provide a description of any proposed Custom Material sufficient to enable the
Vendor to determine the general demand for, and its plans, if any, to develop
the same or similar Products. The Vendor will respond to such summary within
thirty (30) days after receipt thereof and indicate if it has the ability to
fulfill a subsequent Request for Proposal ("RFP") from the Owner for such
development of Custom Material. The Owner acknowledges that the Vendor will have
no obligation to develop any proprietary materials for Owner.
(b) If the Vendor decides that it does not have the technical ability
or the capacity to fulfill a subsequent RFP for such Custom Material
development, the Vendor's response pursuant to subsection 11.9.1(a) will (i)
provide the Owner an explanation of why it cannot fulfill such RFP and (ii) use
reasonable diligence to work with the Owner to identify an alternative source
for such development reasonably acceptable to the Owner. In determining whether
the Vendor has the technical ability or the capacity to fulfill the RFP, the
Vendor may consider factors including, but not limited to, (1) the Vendor's
likelihood of recovering its costs for performing such development, (2) the
impact of such development on the Vendor's actual outstanding commitments to
perform work for other Customers and to pursue strategic development activities;
and (3) whether the Vendor can perform the work utilizing existing software
development staff without stopping work underway.
(c) If the Vendor fails to agree to a request for Custom Material
development pursuant to the terms of this subsection 11.9 then the matter may,
at the Owner's option, be referred to dispute resolution pursuant to Section 23.
11.9.2 Vendor Response. After reviewing an RFP issued for such
Custom Material, the Vendor will respond to the Owner within thirty (30) days,
unless otherwise agreed by the Parties, stating the terms and conditions upon
which the Vendor would be willing to undertake such development, including, but
not limited to, a listing of specifications, custom development charges, planned
license fees and a proposed delivery schedule.
11.9.3 Ownership of Intellectual Property. The Vendor will own
all forms of intellectual property rights (including, but not limited to,
patent, trade secret, copyright and mask rights) pertaining to Products, and
will have the right to file for or otherwise secure and protect such rights. The
foregoing notwithstanding, the Parties understand and agree that from time to
time the Owner may devise, develop or otherwise create ideas or other concepts
for services or new products which are patentable or otherwise capable of
receiving protection from duplication. In such event, the Owner will have the
right to patent or otherwise protect such ideas or concepts for its own use and
benefit.
SECTION 12 SOFTWARE CHANGES
12.1 Annual Release Maintenance Fees. So long as the Owner pays the
applicable Annual Release Maintenance Fees in accordance with the terms of this
Contract during the Term (including at any time after the Term so long as the
Owner at such time continues to pay the Annual Release Maintenance Fees), the
Vendor will provide to the Owner, at such times as they become generally
available to the Vendor's Customers, all Software Upgrades, all Software
Enhancements and all Combined Releases (but not Optional Software Features,
unless otherwise mutually agreed between the Parties) applicable to Software for
PCS Products for which the Owner has obtained an RTU License pursuant to the
terms of this Contract.
12.2 Notice. The Vendor must give the Owner not less than ninety (90)
days prior written notice of the introduction of any Software Enhancement
release or any Software Combined Release or any Optional Software Features
release. In addition, in each February and August of each year during the Term
of this Contract, the Vendor must provide the Owner with a forecast of future
Software Enhancement releases or Software Combined Releases or any Optional
Software Features release, as the case may be, then currently being developed by
or on behalf of the Vendor.
12.3 Installation, Testing and Maintenance. The installation and
testing of the Software by the Vendor and the acceptance thereof by the Owner
will be performed in accordance with the criteria set forth in Exhibit B3.
12.4 Software Fixes. In the event that any Software Upgrade, Software
Enhancement or Software Combined Release supplied by the Vendor during the Term
of this Contract has the effect of preventing the System and/or any PCS System
and/or any PCS Sub-System, as the case may be, or any part thereof from
satisfying, or performing in accordance with the Specifications, the System
Standards and/or Exhibit F or otherwise adversely affects the functionality or
features of the System, any PCS System, any PCS Sub-System or any part thereof,
then the Vendor will promptly retrofit or take such other corrective action as
may be necessary to assure that the System, any such PCS System or any PCS
Sub-System or any such affected part, as modified to include each such Software
Upgrade, Software Enhancement or Software Combined Release, will satisfy, and
perform in accordance with, the Specifications, the System Standards and/or
Exhibit F and restore all pre-existing functionality and features as well as
provide any new features and functionality provided by any of the foregoing
modifications, in each case without any charge to the Owner (other than payment
of the applicable Annual Release Maintenance Fees pursuant to the terms of this
Contract).
12.5 Right to Modify SCP/HLR Software. The Vendor grants to the Owner a
personal, non-transferable, non-exclusive and royalty-free license to modify the
following component layers of the SCP/HLR Software provided herein to run on the
SCP/HLR Hardware, solely for use by the Owner in its business of providing
telecommunications services (the names for the component layers set forth below
being used in conformity with the conventions displayed on the graphic element
of Appendix B):
(i) Service Customization Layer
(ii) Application Oriented Layer
(iii) Capability Creation Layer
(iv) Platform Enhancement Layer
Such right to modify includes the right for the Owner, its
employees, and agents to modify and copy the Source Code of the above named
component layers (including, but not limited to, access to the "SCP Action
Execution Library" (including IS41 Rev. B and IS41 Rev. C)) of the SCP/HLR
Software provided solely for the purposes of maintaining and enhancing or
supplementing the object code versions of such provided Software. The Owner
agrees to use the modifications to Licensed Software made in the exercise of the
license granted in this subsection 12.5 in accordance with its licensed rights
in the SCP/HLR Software hereunder, except as otherwise provided in this
subsection 12.5. The license to modify set forth in this subsection 12.5 will be
royalty-free and without fee with respect to code implementing features or
capabilities provided within the above-enumerated layers of releases or versions
of the Software which are provided by the Vendor in accordance with or pursuant
to the Annual Release Maintenance Fees.
Intellectual property rights in modifications to the SCP/HLR
Software by the Owner, its employees or agents for hire in the exercise of a
right of modification granted in this subsection 12.5 will vest in the Owner,
subject to the Vendor's intellectual property rights in the Vendor's proprietary
"SLL" programming language and compiler and in the Vendor's unmodified SCP/HLR
Licensed Software. The unmodified Computer Programs provided by the Vendor,
including, but not limited to, the SCP/HLR Software, will remain the
intellectual property of the Vendor; and nothing in this subsection 12.5 will be
deemed to confer upon the Owner ownership in any aspect of the unmodified
SCP/HLR Software. Except as provided in subsection 11.4, nothing contained
herein will be deemed to confer upon the Owner any right to license or
sublicense use of the unmodified SCP/HLR Software, or any part thereof, to third
persons. The Vendor will be entitled to license any right to use and to
sublicense modifications made by or for the Owner on terms mutually agreed
between the Owner and the Vendor, unless the Owner unilaterally designates, in
writing, a specific modification or modifications to be restricted from such
licensing for a specific period of time.
The Vendor agrees to provide the Owner Software tools,
documentation, services and training requested by the Owner which are reasonably
necessary to the exercise of the Owner's rights of modification granted in this
subsection 12.5, upon mutually agreed prices, terms and conditions. The Vendor
will endeavor in subsequent Software Upgrades, Software Enhancements, Combined
Releases and other versions of its SCP/HLR Software to accommodate the Owner's
need to preserve compatibility between the Owner's modifications and such
Vendor-provided programs.
Nothing contained in this subsection 12.5 to the contrary
authorizes the Owner to engage any entity or person as an agent for hire to
modify the Vendor's SCP/HLR Software which entity or person (i) is substantially
and directly engaged in competition with the Vendor in manufacturing or
developing PCS systems; or (ii) does not agree in writing to recognize and
respect the Vendor's intellectual property rights in such Licensed Software
(including, but not limited to, the Vendor's rights stated herein) and to
maintain the secrecy of information proprietary to the Vendor regarding the
structure and contents of the Vendor's computer programs upon terms comparable
to the Owner's undertakings to maintain the confidentiality of the Vendor's
Proprietary Information.
12.6 Right to Modify AS Software and Actiview Software. The Owner may
add to, delete from, or modify AS Software modules or menus, if available from
the Vendor. Such changes or modifications, however extensive shall not affect
the Vendor's title to the AS Software. The Owner may add to, delete from, or
modify Actiview Software modules or menus, if available from the Vendor. Such
changes or modifications, however extensive, shall not affect the Vendor's title
to the Actiview Software.
12.7 Right to Modify OTAF Software. The Vendor grants to the Owner a
personal, non-transferable, non-exclusive and royalty-free license to modify the
operations environment of the OTAF Software provided under the Contract to run
on the OTAF Equipment, solely for use by the Owner in its business of providing
telecommunications services.
Such right to modify includes the right for the Owner, its
employees and agents to modify and copy the Source Code for the operations
environment of the OTAF Software (including, but not limited to, access to the
"SCP Action Execution Library" (including IS41 Rev. B and IS41 Rev. C) of the
SCP/OTAF Software provided solely for the purposes of maintaining and enhancing
or supplementing the object code versions of such provided Software. The Owner
agrees to use the modifications to Software made in the exercise of the license
granted in this subsection 12.7 in accordance with its licensed rights in the
OTAF Software hereunder, except as otherwise provided in this subsection 12.7.
The license to modify set forth in this subsection 12.7 will be royalty-free and
without fee with respect to code implementing features or capabilities provided
within the OTAF operating environments of releases or versions of the Software
which are provided by the Vendor in accordance with or pursuant to the Annual
Release Maintenance Fees.
Intellectual property rights in modifications to the OTAF
Software by the Owner, its employers or agents for hire in the exercise of a
right of modification granted in this subsection 12.7 will vest in the Owner,
subject to the Vendor's intellectual property rights in the Vendor's proprietary
"SLL" programming language and compiler and in the Vendor's unmodified OTAF
Software. The unmodified Computer Programs provided by the Vendor, including,
but not limited to, the OTAF Software, will remain the intellectual property of
the Vendor; and nothing in this subsection 12.7 will be deemed to confer upon
the Owner ownership in any aspect of the unmodified OTAF Software. Nor will
anything herein be deemed to confer upon the Owner any right to license or
sublicense use of the unmodified OTAF Software, or any part thereof, to third
persons. The Vendor will be entitled to license any right to use and to
sublicense modifications made by or for the Owner on terms mutually agreed
between the Owner and the Vendor, unless the Owner unilaterally designates, in
writing, a specific modification or modifications to be restricted from such
licensing for a specific period of time.
The Vendor agrees to provide the Owner Software tools,
documentation, services and training requested by the Owner which is reasonably
necessary to the exercise of the Owner's rights of modification granted in this
subsection 12.7, upon mutually agreed prices, terms and conditions. The Vendor
will endeavor in subsequent Software Upgrades, Software Enhancements, Combined
Releases and other versions of its OTAF Software to accommodate the Owner's need
to preserve compatibility between the Owner's modifications and such
Vendor-provided programs.
Nothing contained in this subsection 12.7 to the contrary
authorizes the Owner to engage any entity or person as an agent for hire to
modify the Vendor's OTAF Software which entity or person (i) is substantially
and directly engaged in competition with the Vendor in manufacturing or
developing PCS systems; or (ii) does not agree in writing to recognize and
respect the Vendor's intellectual property rights in such Licensed Software
(including, but not limited to, the Vendor's rights stated herein) and to
maintain the secrecy of information proprietary to the Vendor regarding the
structure and contents of the Vendor's computer programs upon terms comparable
to the Owner's undertakings to maintain the confidentiality of the Vendor's
Proprietary Information. The right to modify OTAF Software shall not apply to
any third party manufactured or provided OTAF Software unless the Vendor owns
the rights to such third party OTAF Software. The list of third party OTAF
Software excluded from the right to modify set forth in this subsection 12.7
consists of "NewNet SS-7", "ESI-BACE", "ESIE Background", "BACE Background",
"Rogueware Tools H++", and "FairCom c-tree".
SECTION 13 EQUIPMENT CHANGES
13.1 Equipment Upgrades. (a) Equipment Upgrades will be provided to the
Owner by the Vendor at no charge to the Owner as provided in subsection 13.1(b)
below. Equipment Enhancements must be provided to the Owner by the Vendor, if
requested by the Owner, and the Owner is obligated to make payment therefor in
an amount that is no higher than that payable by any Customer other than the
Owner, which amount of payment will be adjusted as set forth in subsections 6.2,
7.2 and 27.16 Section 26. If the Vendor at any time issues an Equipment Upgrade
which is combined with any Equipment Enhancement (collectively, the "Equipment
Combined Release") to such Equipment, the Equipment Combined Release will be
provided at no charge to the Owner unless and until the Owner elects to use any
of the feature enhancement or enhancements included within the Equipment
Combined Release and has accepted such Equipment Combined Release.
(b) (i) After a PCS Product has been shipped to the Owner, if the
Vendor issues an Equipment Upgrade ("Class A change") or Equipment Enhancement
("Class B change"), or where a modification to correct an error in field
documentation is to be introduced, the Vendor will promptly notify the Owner of
such change through the Vendor's design change management system or another
Vendor notification procedure. Each change notification, whether or not it bears
a restrictive legend, will be subject to subsection 27.19, except that such
information may be reproduced by the Owner for the Owner's use as required
within the System. If the Vendor has engineered, furnished, and installed a
Product which is subject to an Equipment Upgrade, the Vendor will implement such
change, at its sole cost and expense, if it is announced within fifteen (15)
years from the date of shipment of that Product, by, at its option (subject to
the reasonable review and acceptance of the Owner at such times as the Owner
reasonably determines that it needs to review such Vendor decision), either (A)
modifying the Product at the Owner's site; (B) modifying the Product which the
Owner has returned to the Vendor in accordance with the Vendor's reasonable
instructions pursuant to and in accordance with the terms of this Contract; or
(C) replacing the Product requiring the change with a replacement Product for
which such change has already been implemented. If the Vendor has not engineered
the original Product application and accordingly office records are not
available to the Vendor, the Vendor will provide the generic change information
and associated parts for the Owner's use in implementing such change.
(ii) In any of the instances described in clause (i) above,
if the Vendor and the Owner agree that a Product or
part thereof subject to such change is readily
returnable, the Owner, at its expense, will remove and
return such Product or part to the Vendor's designated
facility within the United States and the Vendor, at
its sole expense, will implement such change (or
replace it with a Product or part for which such change
has already been implemented) at its facility and
return such changed (or replacement) Product or part at
its sole cost and expense to the Owner's designated
location within the United States. Any such
reinstallation will be performed by the Owner at its
sole expense. At any such time that the Owner's spares
or plug-in stocks are not available to implement a
rotational program for an Equipment Upgrade, the Vendor
will provide a seed stock, where feasible and
necessary.
(iii)If the Owner does not make or permit the Vendor to
make an Equipment Upgrade as stated above within one
(1) year from the date of change notification or such
other period as the Vendor may agree, subsequent
changes, repairs or replacements affected by the
failure to make such change may, at the Vendor's
option, be invoiced to the Owner whether or not such
subsequent change, repair or replacement is covered
under the warranty provided in this Contract for such
Product. If requested by the Owner, Equipment Upgrades
announced more than fifteen (15) years from the date of
shipment will be implemented at the Owner's expense.
(iv) If the Vendor issues an Equipment Enhancement after a
PCS Product has been shipped to the Owner, the Vendor
will promptly notify the Owner of such change if it is
being offered to any of the Vendor's Customers. Except
as otherwise set forth above in subsection 13.1(a),
when an Equipment Enhancement is requested by the
Owner, the pricing set for such Equipment Enhancements
will be at the Vendor's standard charges subject to the
applicable discounts set forth in this Contract and
Section 26.
(v) All change notifications for Equipment Upgrades and
Equipment Enhancements provided by the Vendor to the
Owner pursuant to the terms of this Contract must
contain the following information: (i) a detailed
description of the change; (ii) the reason for the
change; (iii) the effective date of the change; and
(iv) the implementation schedule for such change, if
appropriate.
13.2 Notice. The Vendor will give the Owner not less than ninety (90)
days prior written notice of the introduction of any Equipment Enhancement or
any Equipment Combined Release. In addition, in February and August of each year
during the Term of this Contract, the Vendor will provide the Owner with a
forecast of future Equipment Enhancements to the Equipment or Equipment Combined
Releases then currently being developed by or on behalf of the Vendor.
13.3 Installation, Testing and Acceptance. The Installation and testing
of the Equipment by the Vendor and the acceptance thereof by the Owner must be
performed in accordance with Exhibit B3 pursuant to the Project Milestones in
Exhibit A.
13.4 Equipment Fixes. In the event that any Equipment Upgrade or
Equipment Enhancement supplied by the Vendor during the Term of this Contract
has the effect of preventing the System and/or any PCS System and/or any PCS
Sub-System or any part thereof from satisfying, or performing in accordance
with, the Specifications, the System Standards and/or Exhibit F or otherwise
adversely affects the functionality, interoperability or features of the System,
any such PCS System or PCS Sub-System or any part thereof, then the Vendor will
without any charge to the Owner promptly retrofit or take such other corrective
action as may be necessary to assure that the System, any such PCS System or PCS
Sub-System or any such affected part, as modified to include each such Equipment
Upgrade and Equipment Enhancement, will satisfy, and perform in accordance with,
the Specifications, the System Standards and/or Exhibit F and restore all
pre-existing functionality and features as well as provide any features and
functionality provided by any of the foregoing modifications.
SECTION 14 INTELLECTUAL PROPERTY
14.1 Intellectual Property. The Vendor grants the Owner rights to state
that it is using the Vendor's Products or Services in the Owner's marketing,
advertising or promotion of the System, any PCS System, any PCS Sub-System or
any part thereof. The Owner has the right to use for such marketing, advertising
or promotion the Vendor's advertising and marketing materials (including
pamphlets and brochures) provided to the Owner by the Vendor describing the
System, any PCS System, any PCS Sub-System or any part thereof, or any Product.
Other than as set forth in this subsection 14.1, the Owner has the right to use
the trademarks and service marks of the Vendor or its assignee in the Owner's
marketing, advertising and promotion of the System, any PCS System, any PCS
Sub-System or any part thereof only with the written consent of the Vendor not
to be unreasonably withheld subject to and in accordance with the terms of
subsection 27.13.
14.2 Infringement. (a) The Vendor agrees that it will defend, at its
own expense, all suits and claims against the Owner for infringement or
violation (whether by use, sale or otherwise) in the United States of any
patent, trademark, copyright, trade secret or other intellectual property rights
of any third party (collectively, "Intellectual Property Rights"), covering, or
alleged to cover, the Equipment, Software, the System and/or any PCS System, any
PCS Sub-System or any component thereof for its intended use, in the form
furnished or as subsequently modified by the Vendor or as otherwise modified by
the Owner pursuant to the direction or approval of the Vendor. The Vendor agrees
that it will pay all sums, including, without limitation, attorneys' fees and
other costs, which, by final judgment or decree, or in settlement of any suit or
claim to which the Vendor agrees, may be assessed against the Owner on account
of such infringement or violation, provided that:
(i) the Vendor will be given prompt written
notice of all claims of any such infringement or
violation and of any suits or claims brought or
threatened against the Owner or the Vendor of which
the Owner has actual knowledge;
(ii) the Vendor will be given full authority
to assume control of the defense (including appeals)
thereof through its own counsel at its sole expense
and will have the sole right to settle any suits or
claims without the consent of the Owner; provided
that the Vendor will have no right to agree to
injunctive relief against the Owner; provided further
that the Vendor will notify the Owner of any proposed
settlement condition prior to the Vendor's acceptance
of such settlement; and
(iii) the Owner will cooperate fully with
the Vendor in the defense of such suit or claims and
provide the Vendor, at the Vendor's expense, such
assistance as the Vendor may reasonably require in
connection therewith.
(b) The Vendor's obligation under this subsection 14.2 will not extend
to alleged infringements or violations that arise because the Products provided
by the Vendor are used in combination with other products furnished by third
parties and where any such combination was not installed, recommended, approved,
explicitly or by implication, by the Vendor.
14.3 Vendor's Obligation to Cure. If in any such suit so defended, all
or any part of the Equipment, Software, the System, any PCS System, any PCS
Sub-System or any component thereof is held to constitute an infringement or
violation of Intellectual Property Rights and its use is enjoined, or if in
respect of any claim of infringement or violation the Vendor deems it advisable
to do so, the Vendor will at its sole cost, expense and option take one or more
of the following actions: (i) procure the right to continue the use of the same
without interruption for the Owner; (ii) subject to the terms of subsection 2.17
replace the same with noninfringing Equipment or Software that meets the
Specifications; or (iii) modify said Equipment, Software, the System, any PCS
System, any PCS Sub-System or any component thereof so as to be noninfringing,
provided that the Equipment, Software, the System, any PCS System, any PCS
Sub-System or any component thereof as modified meets all of the Specifications.
In the event that the Vendor is not able to cure the infringement pursuant to
clause (i), (ii) or (iii) in the immediately preceding sentence, the Vendor will
refund to the Owner the full purchase price paid by the Owner for such
infringing Product or feature, and the Owner will be under no obligation to
return to the Vendor such infringing Product or feature regardless of whether,
or by what means, the Owner, on its own or otherwise, subsequently cures such
infringement.
14.4 Vendor's Obligations. The Vendor's obligations under this Section
14 will not apply to any infringement or violation of Intellectual Property
Rights to the extent caused by modification of the Equipment, Software, the
System, any PCS System, any PCS Sub-System or any component thereof by the
Owner, or any infringement caused solely by the Owner's use and maintenance of
the Products other than in accordance with the Specifications and the purposes
contemplated by this Contract, except as expressly authorized or permitted by
the Vendor. The Owner will indemnify the Vendor against all liabilities and
costs, including reasonable attorneys' fees, for defense and settlement of any
and all claims against the Vendor for infringements or violations based upon
this subsection 14.4.
14.5 License to Use Vendor Patents. (a) The Vendor grants to the Owner
and its Affiliates, under patents which the Vendor owns or has a right to
license ("Vendor Patents"), a worldwide, royalty-free, nonexclusive license (the
"Patent License") to use any Product furnished by the Vendor under this Contract
(including any combination of products and services, whether or not furnished at
the same time or as part of a larger combination) for provision of
telecommunications services; provided, however, that no rights are conveyed to
the Owner and its Affiliates with respect to any invention which is directed to
(i) a combination of a Product or Products furnished with any other Item which
the Vendor does not furnish to the Owner under this Contract wholly or in part
for such use, or (ii) a method or process which is other than an inherent use of
the Products furnished. As used in this subsection 14.5, the term "inherent use"
means a use that can be completely performed by a Product furnished by the
Vendor (or a combination of Products furnished by the Vendor), without the need
for any additional product, service, development modification or programming by
the Owner and its Affiliates or by a third party.
(b) The Owner and any successor to the Owner's title in the Products
has the right (subject to written approval of the Vendor, which approval will
not be unreasonably withheld), to assign the Patent Licenses to any other Person
who acquires legal title to the Products including, but not limited to, any
Person or Persons taking part in the financing of any part of the Nationwide
Network, provided that no such assignment to Persons taking part in the
financing of any part of the Nationwide Network will be permitted except in
accordance with the provisions of subsection 27.4 of this Contract. Nothing
contained in this subsection 14.5 is intended to, and shall not, limit any
rights or privileges that the Owner has under this Contract or otherwise under
Applicable Law.
SECTION 15 DELAY
15.1 Liquidated Damages. The Parties agree that damages for delay are
difficult to calculate accurately and, therefore, agree that liquidated damages
(the "Liquidated Damages") will be paid for non-performance or late performance
of the Vendor's obligations under this Contract pursuant to the terms hereof.
15.2 Interim Delay. (a) Failure of the Vendor to complete the Work
necessary to achieve each of the Project Milestones applicable to any PCS System
and/or any PCS Sub-System, as the case may be (other than Milestone 3 (as set
forth on Exhibit A1)), on or before the date applicable to such Milestone for
such PCS System or PCS Sub-System, as the case may be, that is required to be
achieved by the Vendor prior to the Guaranteed Substantial Completion Date for
such PCS System or PCS Sub-System (each an "Interim Milestone") will result in
the Vendor being liable to pay to the Owner an amount equal to [__________];
provided that no such Interim Delay Penalty will be due if the delay is directly
and expressly attributable solely to (i) an event constituting a Force Majeure
pursuant to the terms of this Contract or (ii) an act or omission of the Owner.
Interim Delay Penalties accrued pursuant to this subsection 15.2(a) will be
offset against the payment to be made by the Owner to the Vendor upon
Substantial Completion of the PCS System or PCS Sub-System to which such interim
delay relates. The Interim Delay Penalty applicable to Milestone 4 (as set forth
on Exhibit A1) will be [__________]. This subsection 15.2 will not be applicable
to Milestone 3 (as set forth on Exhibit A1) for either the System or any PCS
System or any PCS Sub-System.
(b) To the extent that the Vendor is responsible for Interim Delay
Penalties pursuant to subsection 15.2(a) such penalties will be credited back to
the Vendor by the Owner to the extent that (i) the Vendor successfully achieves
the Interim Milestone subject to delay within thirty (30) days of the date
scheduled therefore pursuant to the terms hereof and Exhibit A and (ii) such
interim delay does not otherwise materially adversely affect the Owner, such PCS
System or PCS Sub-System and/or the System as a whole. Any such reimbursement
will be credited back to the Vendor such that the Interim Delay Penalty
otherwise offset against the relevant Substantial Completion payment in
accordance with subsection 15.2(a) above will be added back to such Substantial
Completion payment to be made to the Vendor by the Owner.
15.3 Completion Delay. (a) For each day that any PCS System and/or any
PCS Sub-System, as the case may be, fails to [__________], the Vendor will pay,
subject to the limitations otherwise set forth in this subsection 15.3, an
amount equal to [_____________] percent of the Product Contract Price applicable
to such PCS System or PCS Sub-System, as the case may be, [_________]. In no
event will the Late Completion Payments payable by the Vendor with respect to
any PCS System or such PCS Sub-System, as the case may be, exceed [___________].
(b) If any PCS System or any PCS Sub-System does not achieve
Substantial Completion by the Guaranteed Substantial Completion Date applicable
thereto but the Owner nonetheless chooses (in its sole discretion) to commence
In Revenue Service in such incomplete PCS System or incomplete PCS Sub-System,
as the case may be (such action in no way constituting the Owner's acceptance,
express or implied, of the System or such PCS System or such PCS Sub-System or
any part thereof), then the Vendor will be required to pay, on a daily basis,
only that percentage of the daily Late Completion Payment equal to that
percentage of the geographic area to be otherwise covered by such PCS System or
PCS Sub-System, as the case may be, not otherwise placed In Revenue Service by
the Owner.
(c) In the event of a change in the Product Contract Price pursuant to
subsections 6.2, 7.2 or 27.16 or Section 26 during the Term of this Contract
from the amount originally set forth in this Contract pursuant to Section 6 the
per diem amount of Late Completion Payments set forth above will be increased or
decreased, as appropriate, by an amount equal to the increase or decrease in the
Owner's per diem interest payment obligation resulting from any change in the
amount of debt incurred or to be incurred by the Owner related to such change in
the Product Contract Price.
(d) Late Completion Payments, including any portions of such payments
payable in accordance with paragraphs (a) and (b) above, will be accrued during
the Completion Cure Period and offset against payments otherwise due to the
Vendor upon the achievement of Substantial Completion pursuant to the terms of
subsection 6.3. If the Vendor fails to achieve Substantial Completion within
sixty (60) days of the Guaranteed Substantial Completion Date for any reason
other than primarily because of (i) a Force Majeure event pursuant to Section 16
or (ii) the direct and explicit act or omission of the Owner, then the Owner
will have the option to terminate this Contract with respect to the PCS System
and/or the PCS Sub-System, as the case may be, affected by any such delay
without any penalty or payment obligation (other than payment obligations under
this Contract outstanding as of the date of any such termination; provided that
any such amounts payable by the Owner will not include any amounts that would
have been payable to the Vendor only upon Substantial Completion or Final
Acceptance); provided further that in the event the Vendor fails to achieve
Substantial Completion within such sixty (60) day period in any combination of
two (2) PCS Systems and/or PCS Sub-Systems within the Initial System over any
period of time (regardless of whether such events are concurrent or whether the
first such event was subsequently cured) the Owner will have the right, but not
the obligation, to terminate this Contract in its entirety.
15.4 SCP/HLR Delay. (a) Failure of the Vendor to properly deliver,
install and test any of the SCP/HLR Products at the then existing HLR Designated
Switch Sites in accordance with the SCP/HLR Specifications and the milestones
set forth therein applicable to SCP/HLR Products by the HLR Completion Dates
will result in the Vendor being liable to pay to the Owner contract cover
damages (the "Contract Cover Damages") equal to any and all reasonable and
actual increased costs and expenses including, but not limited to, increased
costs and expenses associated with network modifications, extra equipment,
software or training or re-engineering incurred by the Owner due to the Vendor's
failure to deliver, install and test the SCP/HLR Products by the HLR Completion
Dates in accordance with SCP/HLR Specifications and the HLR Statement of Work.
15.5 AM/HLR Interim Solution. In order to meet the Owner's projected
service date the Vendor will provide to the Owner, [_____________], and at the
Owner's then existing HLR Designated Switch Sites, AM/HLRs pursuant to and in
accordance with the AM/HLR Specifications and the HLR Statement of Work as an
interim solution so that the Nationwide Network may operate in accordance with
the Specifications; provided that the Vendor will continue to use its best
efforts, [______________] (but with all reasonable cooperation from the Owner),
to replace such interim AM/HLR solution with a comprehensive SCP/HLR system in
accordance with the SCP/HLR Specifications and the HLR Statement of Work.
15.6 AM/HLR Redeployment. After acceptance of the SCP/HLRs, the Owner
will, at the Owner's sole discretion, have the Vendor redeploy the AM/HLRs as
Access Managers to other sites within the System at the Vendor's sole cost and
expense for any and all costs associated with such redeployment, including
removal, transportation, and delivery but not installation or the cost of such
Access Manager; provided that if the Access Manager is not moved to another
location but redeployed in the same location in a separate function or for a
separate MSC, the Owner will only be liable for the cost of the Access Manager
and the Vendor will be responsible for all other costs. All payments, if any,
for redeployed AM/HLRs will be made by the Owner pursuant to subsections
6.3(a)-(d); provided that in the event that any such redeployment is to a PCS
System which has already achieved Substantial Completion then the payment terms
of subsection 6.3.1 will apply.
15.7 SCP/HLR Delay Termination. If after thirty (30) days after the HLR
Completion Dates the Vendor is still unable to satisfactorily complete the Final
Acceptance Tests applicable to the SCP/HLRs and/or any of the SCP/HLR Products
to be delivered in accordance with the terms of this Contract (including, but
not limited to, the SCP/HLR Specifications) the Owner will have the right (in
addition to any rights under subsection 15.4 above), but not the obligation, to
terminate the Contract only with respect to the SCP/HLR Products and will have
the right to seek from the Vendor reimbursement for any of its reasonable and
actual increased costs associated with acquiring reasonable replacement SCP/HLR
Products from a third-party supplier. The remedies set forth in subsections
15.4, 15.5 and 15.7 will be the Owner's sole and exclusive remedies in the event
the Owner chooses to terminate the delivery of SCP/HLR Products pursuant to the
terms of this subsection 15.7.
15.8 AS Software Delay. With respect to the AS Products and Services,
in the event the Vendor fails to deliver any such AS Statement of Work compliant
AS Products and/or AS Services within seven (7) days (except as provided below,
the "AS Delay Grace Period") of the applicable dates for delivery set forth in
Appendix G, the Vendor will (to the extent the Owner will not have cancelled the
applicable order therefor pursuant to the terms of the Contract) credit to the
Owner (in the form of purchase credits for any Vendor Products including, but
not limited to, AS Products) as liquidated damages for such late performance for
each of the first thirty (30) days beyond such AS Delay Grace Period, an amount
equal to [____________] percent per day (for such [________] day period) of the
total price of such undelivered or unsatisfactory AS Products or AS Services;
provided that upon the timely AS Functional Acceptance (on the dates originally
scheduled for such AS Functional Acceptance) of any such AS Products and/or AS
Services, any delay penalties accrued therefor shall be forgiven; and provided
further for AS Software "release 0.1" (as defined in Appendix G) the AS Delay
Grace Period will be [________] days from the delivery dates set forth in
Appendix G for the delivery of such AS Software release 0.1.
15.9 OTAF and/or Actiview Delay Termination. If after thirty (30) days
after the OTAF Completion Dates the Vendor is still unable to satisfactorily
complete the OTAF Final Acceptance Tests and/or any of the OTAF Products and/or
Services to be delivered in accordance with the terms of this Contract
(including, but not limited to, the OTAF Statement of Work) the Owner will have
the right, but not the obligation, to terminate the Contract only with respect
to the OTAF Products and/or Services and will have the right to seek from the
Vendor reimbursement for any of its reasonable and actual increased costs
associated with acquiring reasonable replacement OTAF Products and/or Services
from a third-party supplier. If after thirty (30) days after the Actiview
Completion Dates the Vendor is still unable to satisfactorily complete the
Actiview Final Acceptance Tests and/or any of the Actiview Products and/or
Services to be delivered in accordance with the terms of this Contract
(including, but not limited to, the Actiview Statement of Work) the Owner will
have the right, but not the obligation, to terminate the Contract only with
respect to the Actiview Products and/or Services and will have the right to seek
from the Vendor reimbursement for any of its reasonable and actual increased
costs associated with acquiring reasonable replacement Actiview Products and/or
Services from a third-party supplier. Pursuant to and in accordance with the
Actiview Statement of Work, the Owner will be responsible for the timely
furnishing of the Actiview operations environment, which includes delivery,
installation and testing of third party equipment and third party software
applicable and necessary for the operation of the Actiview Software. The Parties
understand and agree that the dates set forth in Section 12 of Appendix M for
the delivery of SCP/OTAF Products and Services are subject to modification
pursuant to the mutual good faith agreement between the Parties on or before
October 14, 1996; provided, that, the Vendor agrees that the delivery dates for
SCP/OTAF Products and Services will in no event be modified to be more than
forty-five (45) days beyond the dates for such deliveries set forth in Section
12 of Appendix M as of the Effective Date.
15.10 OTAF and/or Actiview Delay. (a) (i) With respect to the
SPARC/OTAF Products (other than any OTAF Maintenance and Instruction Manuals or
OTAF Operating Manuals) and SPARC/OTAF Services, in the event the Vendor fails
to deliver any such OTAF Statement of Work compliant SPARC/OTAF Products and/or
Services within seven (7) days (the "OTAF Delay Grace Period") of the applicable
dates for delivery set forth in the OTAF Statement of Work, the Vendor will (to
the extent the Owner will not have cancelled the applicable order therefor
pursuant to the terms of the Contract) credit to the Owner (in the form of
purchase credits for any Vendor Products including, but not limited to, OTAF
Products) as liquidated damages for such late performance for each of the first
[________] days beyond such OTAF Delay Grace Period, an amount equal to
[__________] percent per day (for such [_________] day period) of the OTAF
Price; provided that upon the timely SPARC/OTAF Field Acceptance (on the dates
originally scheduled for such SPARC/OTAF Field Acceptance) of any such
SPARC/OTAF Products and/or SPARC/OTAF Services, any delay penalties accrued
therefor shall be forgiven. (ii) With respect to the SCP/OTAF Products (other
than any OTAF Maintenance and Instruction Manuals or OTAF Operating Manuals) and
Services, in the event the Vendor fails to deliver any such OTAF Statement of
Work compliant SCP/OTAF Products (other than any OTAF Maintenance and
Instruction Manuals or OTAF Operating Manuals) or Services within seven (7) days
of the applicable dates for delivery set forth in the OTAF Statement of Work,
the Vendor will (to the extent the Owner will not have cancelled the applicable
order therefor pursuant to the terms of the Contract) credit to the Owner (in
the form of purchase credits for any Vendor Products including, but not limited
to, OTAF Products) as liquidated damages for such late performance for each of
the first [_________] days beyond such OTAF Delay Grace Period, an amount equal
to [___________] percent per day (for such [_________] day period) of the OTAF
Price; provided that upon the timely SCP/OTAF Field Acceptance (on the dates
originally scheduled for such SCP/OTAF Field Acceptance) of any such SCP/OTAF
Products and/or SCP/OTAF Services, any delay penalties accrued therefor shall be
forgiven.
Furthermore and in addition to any and all damages and/or
remedies available to the Owner pursuant to this Section 15, with respect to a
delay in the Specification compliant availability and installation of SCP/OTAF
Products and Services in accordance with the dates and requirements of the OTAF
Statement of Work that is in excess of thirty (30) days beyond the dates
originally scheduled for any such SCP/OTAF Products and Services availability
and installation, the Owner will be entitled to and the Vendor will provide for
the Owner's Nationwide Network, SPARC/OTAF Products and Services that are equal
in features and functionality to the SCP/OTAF Products and Services that would
have been available and installed pursuant to the OTAF Statement of Work but for
such delay in the availability and/or installation of Specification compliant
SCP/OTAF Products or Services.
(b) With respect to the Actiview Products and Actiview Services, in the
event the Vendor fails to deliver any such Actiview Statement of Work compliant
Actiview Products and/or Services within seven (7) days (the "Actiview Delay
Grace Period") of the applicable dates for delivery set forth in the Actiview
Statement of Work, the Vendor will (to the extent the Owner will not have
cancelled the applicable order therefor pursuant to the terms of the Contract)
credit to the Owner (in the form of purchase credits for any Vendor Products
including, but not limited to, Actiview Products) as liquidated damages for such
late performance for each of the first [______] days beyond such Actiview Delay
Grace Period, an amount equal to [__________] percent per day (for such
[________] day period) of the total price of such undelivered or unsatisfactory
Actiview Products or Actiview Services; provided that upon the timely Actiview
Functional Acceptance (on the dates originally scheduled for such Actiview
Functional Acceptance) of any such Actiview Products and Actiview Services, any
delay penalties accrued therefor shall be forgiven.
SECTION 16 FORCE MAJEURE
16.1 Force Majeure. (a) Either Party may make a claim for excusable
failure or delay with respect to any obligation of such Party under this
Contract, except any obligation to make payments when due. Excusable failure or
delay will be allowed only in the event of an event of Force Majeure that is
beyond the reasonable control of the affected Person. Notwithstanding the
foregoing, the Vendor will not be entitled to relief under this Section 16 to
the extent that any event otherwise constituting an event of Force Majeure
results from the negligence or fault of the Vendor or any Subcontractor, and the
Owner will not be entitled to relief under this Section 16 to the extent any
event otherwise constituting an event of Force Majeure results from the
negligence or fault of the Owner.
(b) The Party claiming the benefit of excusable delay hereunder must
(i) promptly notify the other Party of the circumstances creating the failure or
delay and provide a statement of the impact of such Party failure or delay and
(ii) use reasonable efforts to avoid or remove such causes of nonperformance,
excusable failure or delay. If an event of Force Majeure prevents the Vendor
from performing its obligations under this Contract for a period exceeding sixty
(60) days, the Owner may, upon prior written notice to the Vendor, terminate
this Contract.
(c) The Party not claiming the benefit of excusable delay hereunder
will likewise be excused from performance of its obligations hereunder on a
day-for-day basis to the extent such Party's obligations are affected due to the
other Party's delayed performance.
(d) In the event of a Force Majeure which the Party claiming relief for
such event has used all best efforts to resolve in accordance with the terms of
this Contract, upon the written request of either Party, the other Party will in
good faith negotiate modifications, to the extent reasonable and necessary, in
scheduling and performance criteria in order to reasonably address the impact of
such Force Majeure.
SECTION 17 WARRANTIES
17.1 Product Warranty. (a) The Vendor warrants that, for a period of
two (2) years from the date of Final Acceptance of any PCS System and/or PCS
Sub-System, as the case may be (the "Product Warranty Period"), all Products and
all of the Installation and the Configuration Engineering thereof within such
PCS System and/or PCS Sub-System, as the case may be, will materially conform
with and perform the functions set forth in the Specifications and the relevant
performance criteria set forth in Exhibit D, to the extent applicable, and will
be free from Defects and Deficiencies in material or workmanship which impair
service to subscribers, System performance, billing, administration and/or
maintenance. In the case of Software, the Product Warranty Period applicable to
any such Software will be automatically extended upon, and simultaneous with,
any Software Upgrade issued pursuant to the terms of Section 12. The Vendor will
assign to the Owner all outstanding Subcontractor warranties attributable to
Non-Essential Equipment at such time that the Vendor's warranty on such
Non-Essential Equipment pursuant to this subsection 17.1 expires pursuant to and
in accordance with the Product Warranty Period applicable to such Item of
Non-Essential Equipment. The Warranty Period for a PCS Product or part thereof
repaired or provided as a replacement under this Product warranty is six (6)
months or the unexpired term of the new Product Warranty Period applicable to
the repaired or replaced PCS Product or part, whichever is longer.
(b) To the extent the Owner orders additional Products from the Vendor
in accordance with the terms of this Contract including, but not limited to,
subsections 2.2 and/or 7.2, any such Products so ordered by the Owner and
delivered and installed by the Vendor or its Subcontractors will be warranted to
the same extent as set forth in clause (a) above for a period of not less than
twenty four (24) months from the earlier of (i) the date the Owner puts such
additional Products into In Revenue Service, (ii) the date of the Owner's
acceptance and (iii) thirty (30) days after the Vendor completes the
installation of such additional Products. If in the event, pursuant to the
Owner's order for such additional Products the Vendor is not required to install
such additional Products, the warranty on such additional products will run
twenty-four (24) months from the date the Vendor shipped such products to the
Owner.
17.1.1 AS Products Warranty. Notwithstanding anything stated
herein to the contrary, for the AS Products provided hereunder, the Vendor
warrants that, from the date of AS Final Acceptance of the installation and
Engineering thereof, the AS Products will materially conform with and perform
the functions set forth in the AS Statement of Work, to the extent applicable,
and will be free from Defects and Deficiencies for a warranty period (each as
applicable, an "AS Product Warranty Period") of (i) in the case of AS Software,
ninety (90) days and (ii) in the case of AS Equipment, one (1) year. In the case
of AS Software, the AS Product Warranty Period applicable to any such AS
Software will be automatically extended for a new ninety (90) day period
commencing on the date of the completion of any applicable Software Upgrade
and/or Software Enhancement upon, and simultaneous with, any Software Upgrade
and/or Software Enhancement issued pursuant to the terms of Section 12. To the
extent the Owner orders additional AS Products not otherwise covered pursuant to
Appendix G from the Vendor in accordance with the terms of this Contract, any
such AS Products so ordered by the Owner and delivered and installed by the
Vendor or its Subcontractors will be warranted to the same extent as set forth
above, from the earlier of (i) the date the Owner puts such additional AS
Products into In Revenue Service, (ii) the date of the Owner's acceptance of
such additional AS Products and (iii) thirty (30) days after the Vendor
completes the installation of such additional AS Products.
17.1.2 OTAF Products Warranty. Notwithstanding anything stated
herein to the contrary, for the OTAF Products provided hereunder, the Vendor
warrants that, from the date of OTAF Final Acceptance, the OTAF Products will
materially conform with and perform the functions set forth in the OTAF
Statement of Work, to the extent applicable, and will be free from Defects and
Deficiencies in material or workmanship which impair service to subscribers
and/or System performance, administration and/or maintenance for a warranty
period (each as applicable, an "OTAF Product Warranty Period") of (c) in the
case of OTAF Software, ninety (90) days and (d) in the case of OTAF Equipment,
one (1) year. In the case of OTAF Software, the OTAF Product Warranty Period
applicable to any such OTAF Software will be automatically extended for a new
ninety (90) day period commencing on the date of the completion of any
applicable Software Upgrade and/or Software Enhancement applicable to such OTAF
Software upon, and simultaneous with, any Software Upgrade and/or Software
Enhancement applicable to such OTAF Software issued pursuant to the terms of
Section 12.
17.1.3 Actiview Products Warranty. Notwithstanding anything
stated herein to the contrary, for the Actiview Products provided hereunder, the
Vendor warrants that, from the date of Actiview Final Acceptance, the Actiview
Products will materially conform with and perform the functions set forth in the
Actiview Statement of Work, to the extent applicable, and will be free from
Defects and Deficiencies in material or workmanship which impair service to
subscribers and/or System performance, administration and/or maintenance for a
warranty period (each as applicable, an "Actiview Product Warranty Period") of
ninety (90) days from the date of such Actiview Final Acceptance. The Actiview
Product Warranty Period applicable to Actiview Software will be automatically
extended for a new ninety (90) day period commencing on the date of the
completion of any applicable Software Upgrade and/or Software Enhancement
applicable to such Actiview Software upon, and simultaneous with, any Software
Upgrade and/or Software Enhancement applicable to such Actiview Software issued
pursuant to the terms of Section 12. To the extent the Owner orders additional
Actiview Software not otherwise covered pursuant to Appendix U from the Vendor
in accordance with the terms of this Contract, any such additional Actiview
Software so ordered by the Owner and delivered and installed by the Vendor or
its Subcontractors will be warranted to the same extent as set forth above, from
the earlier of (i) the date of the Owner puts such additional Actiview Software
into In Revenue Service, (ii) the date of the Owner's acceptance of such
additional Actiview Software and (iii) thirty (30) days after the Vendor
completes the installation of such additional Actiview Software.
17.2 Services Warranty (a) The Vendor warrants that, for a period of
not less than three (3) years from the date of completion of RF Engineering done
by the Vendor or its Subcontractors (but in no event earlier than the
achievement of Milestone 5 in such PCS System or PCS Sub-System) in any given
PCS System or PCS Sub-System, as the case may be (the "RF Services Warranty
Period"), the Final Site Count within and the Final RF Design applicable to such
PCS System or PCS Sub-System, as the case may be, will be accurate based upon
the environmental circumstances in such PCS System or PCS Sub-System, as the
case may be, as they existed at the time of the Final Acceptance of such PCS
System or PCS Sub-System, as the case may be, provided that the projections of
subscriber growth, traffic and other predictive data, including all applicable
standards as identified in Exhibits B1, D and H, upon which the Final Site Count
and Final RF Design have been determined, have not been materially exceeded or
the applicable and relevant industry standards have not materially changed; and
provided further that in no event will the RF Engineering warranty pursuant to
this subsection 17.2(a) cover or warrant items or performance otherwise covered
or warranted pursuant to subsection 17.3 below.
(b) The Vendor warrants that, for a period of not less than two (2)
years from the date of completion of Facilities Preparation Services within any
PCS System or PCS Sub-System, as the case may be, but in no event later than the
achievement of Milestone 8 pursuant to Exhibit A1 in such PCS System or PCS
Sub-System, as the case may be (provided that in the event of a Microwave Delay
Period in such PCS System or PCS Sub-System, as the case may be, pursuant to
subsection 2.38, the commencement of the Facilities Preparation Services
Warranty Period will not be later than three (3) months from the date the Vendor
would have otherwise been able to commence Substantial Completion testing in
such PCS System or PCS Sub-System, as the case may be, in accordance with
Exhibit B3 and Milestone 8 as set forth on Exhibit A1 but for the existence of
such Microwave Delay Period) (the "Facilities Preparation Services Warranty
Period" and collectively with the RF Services Warranty Period, the "Services
Warranty Periods"), such Facilities Preparation Services will be (i) operational
in accordance with the Specifications, (ii) in compliance with all material
Applicable Laws and material Applicable Permits in effect at the time of the
completion of such Facilities Preparation Services in such PCS System or PCS
Sub-System, as the case may be, and (iii) free from Defects or Deficiencies.
(c) The Vendor warrants that, for a period of six (6) months from the
date of completion, with respect to other Services performed by the Vendor and
not otherwise covered elsewhere in this Section 17, including, but not limited
to, repair Services, such other Service(s) will be free from Defects or
Deficiencies for which the Vendor is responsible pursuant to the terms of this
Contract.
17.3 System Warranty. The Vendor warrants that, for a period ending
three (3) years from the Final Acceptance of the last PCS System within the
Initial System (the "System Warranty Period"), the ongoing performance of each
PCS System together with all other PCS Systems and PCS Sub-Systems within the
System will conform with and perform to the performance criteria set forth on
Exhibit F as of the date of the Final Acceptance of such PCS System based on the
circumstances within such PCS System on such date. The System warranty pursuant
to this subsection 17.3 will be limited to the extent that the projections of
subscriber growth, traffic and other predictive data, including all applicable
standards as identified in Exhibits B1, D and H, upon which the Final Site Count
and Final RF Design have been determined, have not been materially exceeded or
the applicable and relevant industry standards have not materially changed.
17.4 Breach of Warranties. (a) In the event of any breach of any of the
Warranties during any of the applicable Warranty Periods set forth in
subsections 17.1(a), 17.2(a), 17.2(b), 17.2(c) and 17.3, the Vendor will, in
accordance with the terms of this Section 17, promptly repair or replace the
defective or nonconforming Product or otherwise cure any Defects and
Deficiencies so that each PCS Sub-System and each PCS System and the System as a
whole will perform in accordance with the Specifications and Exhibit F. If the
Vendor fails to promptly repair, replace and/or cure such defect, the Owner may,
in addition to exercising any other remedies available to it, itself cause such
repair, replacement and/or cure, at its option and at the sole cost and expense
of the Vendor.
(b) The Vendor recognizes that the Owner may suffer injury and may be
damaged in an amount which will be difficult to determine with certainty as a
result of Outages resulting from causes attributable to the failure of the
Vendor's Products and/or Services to perform in accordance with the
Specifications. As used herein, "Outage" means an unscheduled loss of
functionality of the System, any PCS System or any PCS Sub-System due to the
failures of PCS Products or any combination thereof defined as the loss of the
capability to originate or terminate [___________] percent or more of the active
voice channels then in service within the System or such PCS System and/or PCS
Sub-System for a period of time exceeding [_____] minutes.
(c) During the System Warranty Period, the Vendor will be liable to the
Owner for damages (the "Warranty Damages") for Outages (for other than in the
Test-bed Laboratory) that result from (i) the failure of the Vendor's Equipment
and/or Software to perform in accordance with the Specifications, (ii) the
failure of the Vendor to provide Services in accordance with the Specifications
applicable thereto, (iii) a Vendor procedural error or (iv) inaccurate Technical
Documentation, excluding marketing bulletins, sales literature or other
promotional materials provided by the Vendor to the Owner. As used herein,
"Vendor procedural error" means an error or improper deviation from the Vendor's
or its Subcontractors' procedures by, or attributable to, the Vendor's
personnel. Warranty Damages will be calculated based upon
[______________]dollars for each Outage occurring in any given PCS System to the
extent such Outage exceeds [__________] from the time the Owner notified the
Vendor of such Outage (not including such [__________]), plus [___________]
dollars per minute for [___________] the duration of the Outage exceeds
[___________] from the time the Owner notifies the Vendor of such Outage (not
including such [__________]). In the event any Outage is specific only to a PCS
Sub-System and not any other portion of the PCS System of which such PCS
Sub-System is a part (each a "PCS Sub-System Specific Outage"), then the amount
of the Warranty Damages payable to the Owner for any such PCS Sub-System Outage
pursuant to the terms of this subsection 17.4(c) will be calculated by
multiplying the applicable amounts set forth in this subsection 17.4(c) by the
percentage equal to the Contract Price for such PCS Sub-System divided by the
Contract Price for the entire PCS System of which such PCS Sub-System is a part
(for each PCS Sub-System, the "PCS Sub-System Percentage"). [______________].
(d) In no event will the Vendor's liability for Warranty Damages
pursuant to this subsection 17.4 exceed [___________] dollars with respect to
each Outage in any given PCS System; provided that the Warranty Damages cap
applicable to each PCS Sub-System Specific Outage will be [___________] dollars
multiplied by the applicable PCS Sub-System Percentage. In addition, the
Vendor's total liability for Warranty Damages pursuant to this subsection 17.4
will not exceed [___________] dollars per calendar year during the Term of this
Contract with respect to Outages in any given PCS System per calendar year;
provided that the annual Warranty Damages cap applicable to each PCS Sub-System
for all PCS Sub-System Specific Outages in each such PCS Sub-System will not
exceed [___________] dollars multiplied by the applicable PCS Sub-System
Percentage.
(e) Notwithstanding the foregoing, the Vendor will have no liability
pursuant to this subsection 17.4 for:
(i) Outages caused by a Force Majeure event
as described in Section 16 other than to the extent
that any of the Vendor's Products and/or Services
resulting in such Outages should, in accordance with
the Specifications be able to withstand any such
Force Majeure event;
(ii) Outages resulting from a scheduled
activity, including, but not limited to, System
maintenance or loading of Software or Equipment
Upgrades, Enhancements or Combined Releases, unless
said Outage (without fault of the Owner) extends
beyond the expected downtime, as provided in the
Specifications applicable thereto, associated with
such Equipment or Software maintenance Upgrades,
Enhancements or Combined Releases;
(iii) alterations by the Owner and/or the
Vendor at the Owner's request or otherwise pursuant
to the terms of this Contract to the System and/or
any PCS System and/or any PCS Sub-System, excluding
normal maintenance or parameter changes as prescribed
by the applicable Technical Documentation;
(iv) Outages resulting from the Owner's, its
subcontractors' or any third party's (if such third
party is employed by the Owner) failure to follow the
Technical Documentation;
(v) Outages resulting from the negligence,
gross negligence or willful misconduct of the Owner,
or any of its employees, agents or contractors or any
other third party (other than any Subcontractor or
any employees, representatives or agents of the
Vendor); or
(vi) Outages resulting from failure of
equipment or software not supplied by the Vendor or
any Subcontractors or from the performance of
services not performed by the Vendor or any
Subcontractors; or
(vii) Outages caused by the Owner's
deactivation of the System or any portion thereof,
unless the deactivation is undertaken in avoidance of
an unplanned outage; or
(viii) Outages caused by the failure of the
Network Interconnection facilities.
(f) On or before the beginning of each quarter of each calendar year
during the Term of this Contract, the Owner will provide the Vendor a written
report summarizing any Outages occurring during the previous calendar quarter.
The amount of any Warranty Damages will be determined by the Owner as of the end
of the fourth quarter of each calendar year during the Term, for the preceding
four quarterly reporting periods during such Term. The Owner will notify the
Vendor of any such Warranty Damages in writing. Such Damages will be payable in
credits on future purchases under this Contract or otherwise if this Contract is
terminated for any reason within thirty (30) days of the occurrence. Any
disputes regarding the determination of the cause of an Outage or the amount of
any such Warranty Damages will be resolved in accordance with the provisions of
Section 23.
17.5 Repair and Return. (a) If the Owner claims a breach of warranty
under subsections 17.1, 17.2 or 17.3, it must notify the Vendor of the claimed
breach within a reasonable time after its determination that a breach has in
fact occurred. The Owner will allow the Vendor to inspect the Products, the
Services or the System, as the case may be, on-site, or, upon the Vendor's
reasonable request and, subject to subsection 17.5(d) below, at the Vendor's
sole expense: (i) with respect to Products, return such Products to any of the
Vendor's repair facilities located in the United States and listed on Schedule
8, or (ii) with respect to Non-Essential Equipment, return such Non-Essential
Equipment to the Vendor (or to the third party manufacturer if previously
requested by the Vendor) for further return to the applicable third party
manufacturer. The Vendor or such third party manufacturer may use either new,
remanufactured, reconditioned, refurbished, or functionally equivalent Products
or parts pursuant to the terms of this Contract, including, but not limited to,
the Specifications, in the furnishing of warranty repairs or replacements under
this Contract.
(b) The Vendor agrees to commence work on all such Products,
Non-Essential Equipment, Services or any System Defect, as the case may be, or
Installation defects as soon as practicable, but the Vendor will use reasonable
efforts to commence such Work in no event later than twenty-four (24) hours
after notification of such defect, and, subject to subsections 17.5(e) and
17.5(f), the Vendor will cure such defect as promptly as practicable. During the
Product Warranty Period electronic circuit board components of Equipment or
Non-Essential Equipment, as the case may be, will be repaired or replaced by the
Vendor.
(c) Failure of the System to function to the level of the performance
warranty as set forth in subsection 17.3 will result in the obligation of the
Vendor to promptly make whatever repairs, modifications, alterations, expansions
or to take any other action of any kind, including but not limited to the
provision of additional Products and/or Services, necessary to satisfactorily
fix that portion of the System causing any failure for which the Vendor is
responsible. In the event of a breach of the warranties in Section 17 which will
be cured with the installation of additional PCS Products, the Vendor will
provide such PCS Products, together with related transportation, Installation
and optimization Services, as are reasonably required to remedy the shortfall,
at no charge to the Owner, provided that, if in order to remedy the shortfall,
the number of additional Base Stations required to cure the Vendor's breach
under these warranties is not in excess of five percent (5%) of the total number
of Base Stations in the relevant PCS System (as such "total number" is as set
forth in the Final RF Engineering Plan), the Vendor will not be obligated to pay
for the Base Stations and the installation and transportation related thereto
required to cure such breach, provided further that the Vendor will be obligated
to provide and pay for any Base Stations and the installation and transportation
related thereto in excess of any such five percent (5%) shortfall.
(d) All costs associated with (i) removing or disconnecting the
Products or the Non-Essential Equipment subject to the warranty claim pursuant
to the terms of this Section 17 from any other Products, the respective PCS
System or PCS Sub-System or any part thereof or from other equipment, any other
PCS system or any part thereof to which they are attached or connected, or (ii)
dismantling surrounding Products, the respective PCS System or PCS Sub-System or
any part thereof or any other equipment or other PCS system or any part thereof
in order to so remove or disconnect the Products or Non-Essential Equipment
subject to such warranty claim will be borne by the Vendor throughout the
applicable Warranty Period unless such Products are readily returnable to the
Vendor in which case the Owner will bear all such costs. All packaging, shipping
and freight charges incurred in connection with the return of Items to the
Vendor will be borne by the Owner. The Vendor will be responsible for packing,
shipping and freight charges for return of repaired or replacement Items to the
Owner, unless the Products or Non-Essential Equipment, as the case may be,
returned are not Defective or otherwise not covered by the Vendor's warranty
pursuant to subsection 17.1, in which case the Owner will pay for all such
charges between the Owner's point of origin and the Vendor's applicable repair
facility in the United States.
(e) For routine warranty service, the Vendor will, during the
respective Warranty Period, ship replacement or repaired Products or
Non-Essential Equipment (or components thereof) within thirty (30) days of
receipt of the Defective Equipment or Non-Essential Equipment (or components
thereof) from the Owner. In the event such replacement or repaired Products or
Non-Essential Equipment cannot be shipped within such time period, or if the
Vendor determines that due to the particular circumstances, on-site repairs or
services are required, the Vendor will undertake such repairs or replacement
services on-site within thirty (30) days of notification of the warranty Defect
by the Owner. In the event that the Vendor fails to repair or replace Defective
Products and/or Non-Essential Equipment within thirty (30) days from the Owner's
notice to the Vendor, then the Vendor will be deemed to be in breach of its
obligations pursuant to this Contract and the Owner will be entitled to receive
a refund of all amounts previously paid to the Vendor for the Defective Products
or Non-Essential Equipment, and will have no further obligation to pay
additional amounts in connection with the Defective Products or Non-Essential
Equipment. The Owner will return such Defective Products and Non-Essential
Equipment to the Vendor at the Vendor's sole cost and expense.
(f) For emergency warranty service situations, the Vendor will, during
the applicable Warranty Periods, use its best efforts to ship replacement
Products or Non-Essential Equipment (or components thereof) no later than twelve
(12) hours after notification of the warranty Defect by the Owner. The Owner
will ship the Defective Products or Non-Essential Equipment to the Vendor within
thirty (30) days of receipt of the replacement Products or Non-Essential
Equipment, as the case may be. In the event the Vendor fails to receive such
Defective Products or Non-Essential Equipment within such thirty (30) day
period, the Vendor will invoice the Owner for the replacement Products or
Non-Essential Equipment at the then-current price in effect therefor pursuant to
the terms of this Contract. If in an emergency warranty service situation, the
Owner and/or the Vendor determines that due to the particular circumstances,
on-site technical assistance is necessary, the Vendor will dispatch emergency
service personnel to the site in accordance with the terms of subsection 2.26.
For the purpose of this subsection 17.5, an emergency warranty service situation
will be deemed to exist upon the occurrence of any E1 Emergency Condition or E2
Emergency Condition. The Vendor agrees to commence work on all Equipment,
Non-Essential Equipment, Facilities Preparation Services or any System defect,
as the case may be, or Installation defects materially impairing service to
subscribers, System performance, billing, administration and/or maintenance as
soon as practicable, but in no event later than twenty-four (24) hours after
notification of such defect, and the Vendor will cure such defect as promptly as
practicable.
17.6 Technical Assistance Center. The Vendor must maintain a technical
assistance center in the United States, and during the Warranty Periods
established pursuant to subsections 17.1(a), 17.1(b), 17.2 and 17.3,
respectively, will make such support center available to the Owner twenty-four
(24) hours per day free of any additional charge to the Owner (other than
applicable Annual Release Maintenance Fees).
17.7 Scope of Warranties. Unless otherwise stated herein, the Vendor's
warranties under this Section 17 will not apply to:
17.7.1 damage or defects resulting from the negligence, gross
negligence or willful misconduct of the Owner, or any of its employees, agents
or contractors;
17.7.2 any Equipment or Software damaged by accident or
disaster, including without limitation, fire, flood, wind, water, lightning or
power failure other than to the extent that any such Equipment or Software
should in accordance with the Specifications and/or the Vendor's representations
be able to withstand any such events; or
17.7.3 non-integral items (other than any Non-Essential
Equipment otherwise covered by subsection 17.1) normally consumed in operation
or which has a normal life inherently shorter than the Warranty Periods (e.g.,
fuses, lamps, magnetic tape); or
17.7.4 damages or defects resulting directly from Other
Vendor's equipment provided that this will in no event limit the Vendor's
obligations as to Interoperability pursuant to the terms of this Contract;
17.7.5 Products which have had their serial numbers or months
and year of manufacture removed or obliterated by the Owner;
17.7.6 failures or deficiencies in BTS performance resulting
solely from changed environmental conditions, including, but not limited to, the
growth of trees and other foliage, the erection of buildings, and interference
from third party radio transmissions not otherwise engineered for by the Vendor;
or
17.7.7 Owner modifications to (i) SCP/HLR Software (including
the Platform Software in SCP/HLR Hardware) done pursuant to subsection 12.5,
(ii) Owner modifications to AS Software and/or Actiview Software done pursuant
to subsection 12.6 or (iii) Owner modifications to OTAF Software done pursuant
to subsection 12.7.
except when any such damage or defects are made, done or caused by the Vendor or
any of its Subcontractors.
17.8 Expenses. Except as otherwise provided in this Section 17, the
Owner will reimburse the Vendor for the Vendor's out-of-pocket expenses incurred
at the Owner's request in responding to and/or remedying Products, Non-Essential
Equipment, Services or any System defect, or service Deficiencies not covered by
the warranties set forth herein or otherwise covered under a separate System
maintenance agreement (subject, however, to the terms and conditions of any such
agreement) between the Vendor and the Owner.
17.9 Third Party Warranties. If the Vendor purchases or subcontracts
for the manufacture of any part of the System or the performance of any of the
Services to be provided hereunder from a third party, the warranties given to
the Vendor by such third party will inure, to the extent assigned to the Owner
pursuant to this Section 17 or permitted by law, to the benefit of the Owner,
and the Owner will have the right, at its sole discretion, to enforce such
warranties directly and/or through the Vendor. The warranties of such third
parties will be in addition to and will not, unless otherwise expressly stated
herein, be in lieu of any warranties given by the Vendor under this Contract.
17.10 Additional System Element Locations. In the event that under the
remedy provisions of this Section 17 the Vendor is required to provide
additional MSC and/or Base Stations requiring additional System Element
Locations, the Owner will be responsible for all Site Acquisition and Facilities
Preparation Services costs (other than any construction management costs or fees
which will be borne by the Vendor).
17.11 EXCLUSIVE REMEDIES. THE FOREGOING PRODUCT, SERVICES AND SYSTEM
WARRANTIES AND REMEDIES ARE EXCLUSIVE FOR THE PURPOSES OF ANY BREACH BY THE
VENDOR OF ANY SUCH WARRANTY AND ARE IN LIEU OF ALL OTHER EXPRESS AND IMPLIED
WARRANTIES, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
SECTION 18 INSURANCE
18.1 Insurance. The Vendor will maintain insurance in accordance with
the provisions set forth in Schedule 6.
SECTION 19 TAXES
19.1 Taxes. The amounts to be paid by the Owner under this Contract do
not include any state, provincial or local sales and use taxes, however
designated, which may be levied or assessed on the System, any PCS System, any
PCS Sub-System or any component thereof, including, but not limited to, the
Services. With respect to such taxes, the Owner will either furnish the Vendor
with an appropriate exemption certificate applicable thereto or pay to the
Vendor, upon presentation of invoices therefor, such amounts thereof as the
Vendor may by law be required to collect or pay; provided, however, that the
Vendor will use its best efforts to minimize the amount of any such taxes. The
Owner has no obligation to the Vendor with respect to other taxes, including,
but not limited to, those relating to franchise, net or gross income or revenue,
license, occupation, other real or personal property, and fees relating to
importation of the Products in the United States.
SECTION 20 INDEMNIFICATION AND LIMITATION OF LIABILITY
20.1 Vendor Indemnity. (a) The Vendor will indemnify and hold the Owner
and its Affiliates, partners, directors, officers, agents and employees (the
"Indemnitees") harmless from and against all third party claims, demands suits,
proceedings, damages, costs, expenses, liabilities (including, without
limitation, reasonable legal fees) or causes of action (collectively,
"Liabilities") brought against or incurred by any Indemnitee for (i) injury to
persons (including physical or mental injury, libel, slander and death), or (ii)
loss or damage to any property, or (iii) violations of Applicable Laws,
Applicable Permits, codes, ordinances or regulations by the Vendor, or (iv) any
patent or trademark claims arising out of the Vendor's obligation subject to
subsection 14.2 or (v) any other liability, resulting from the acts or
omissions, negligence, error, willful misconduct or strict liability, of the
Vendor, its officers, agents, employees, or Subcontractors in the performance of
this Contract. If the Vendor and the Owner jointly cause such Liabilities, the
Parties will share the liability in proportion to their respective degree of
causal responsibility.
(b) The Vendor's obligation to indemnify under subsection 20.1(a) with
respect to any Liability will not arise unless the Owner or the Indemnitee (i)
notifies the Vendor in writing of such potential Liability, in the case of the
Owner, within a reasonable time after the Owner will receive written notice of
such Liability; provided that the lack of such notice will not affect the
Vendor's obligation hereunder (A) if the Vendor otherwise has knowledge of such
Liability and (B) unless such lack of notice is the cause of the Vendor being
unable to adequately and reasonably defend such Liability, (ii) gives the Vendor
the opportunity and authority to assume the defense of and settle such
Liability, subject to the provisions of the next two sentences, and (iii)
furnishes to the Vendor all such reasonable information and assistance available
to the Owner (or other Indemnitees) as may be reasonably requested by the Vendor
and necessary for the defense against such Liability. The Vendor will assume on
behalf of the Indemnitee and conduct with due diligence and in good faith the
defense of such Liability with counsel (including in-house counsel) reasonably
satisfactory to the Indemnitee; provided that the Indemnitee will have the right
to be represented therein by advisory counsel of its own selection and at its
own expense. If the Indemnitee will have reasonably concluded that there may be
legal defenses available to it which are different from or additional to, or
inconsistent with, those available to the Vendor, the Indemnitee will have the
right to select separate counsel reasonably satisfactory to the Vendor to
participate in the defense of such action on its own behalf at the Vendor's
expense. In the event the Vendor fails to defend any Liability as to which an
indemnity might be provided herein, then the Indemnitee may, at the Vendor's
expense, contest or settle such matter without the Vendor's consent. All
payments, losses, damages and reasonable costs and expenses incurred in
connection with such contest, payment or settlement will be to the Vendor's
account and may be deducted from any amounts due to the Vendor. The Vendor will
not settle any such Liability without consent of the Indemnitee, which consent
will not be unreasonably withheld. This indemnity is in lieu of all other
obligations of the Vendor, expressed or implied, in law or in equity, to
indemnify the Indemnitees (except pursuant to Section 14 or any other Vendor
indemnitees set forth in this Contract).
20.2 LIMITATION ON LIABILITY. EXCEPT AS PROVIDED IN SUBSECTIONS 14.2,
15.2, 15.3, 15.4, 15.5, 15.6, 15.7, 15.8, 15.9, 15.10, 17.4, 20.1, AND 20.3
HEREOF, IN NO EVENT, AS A RESULT OF BREACH OF CONTRACT OR BREACH OF WARRANTY,
WILL EITHER PARTY HERETO BE LIABLE UNDER THIS CONTRACT TO THE OTHER PARTY FOR
ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES, INCLUDING LOST PROFITS OR REVENUES OF
SUCH PARTY, BEFORE OR AFTER ACCEPTANCE, WHETHER OR NOT SUCH DAMAGES ARE
FORESEEABLE.
20.3 Damages for Fraud or Willful Misconduct (a) The Vendor will be
responsible for all damages, including without limitation, indirect, incidental
and consequential damages, incurred by the Owner as a result of any damage or
injury caused by or resulting from the fraud or willful misconduct of the
Vendor.
(-)
(b) The Vendor will be responsible for all damages, but excluding
indirect, incidental and consequential damages, incurred by the Owner as a
result of any damages or injury caused by or resulting from the fraud, gross
negligence or willful misconduct of any of the Subcontractors related to the
performance of the Work, to the extent the Vendor would have liability therefor
under this Contract if the Vendor had engaged in such conduct.
SECTION 21 REPRESENTATIONS AND WARRANTIES
21.1 Representations and Warranties of the Vendor. The Vendor hereby
represents and warrants to the Owner as follows:
21.1.1 Due Organization of the Vendor. The Vendor is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of New York and has all requisite corporate power and
authority to own and operate its business and properties and to carry on its
business as such business is now being conducted and is duly qualified to do
business in all jurisdictions in which the transaction of its business in
connection with the performance of its obligations under this Contract makes
such qualification necessary or required.
21.1.2 Due Authorization of the Vendor; Binding Obligation.
The Vendor has full corporate power and authority to execute and deliver this
Contract and to perform its obligations hereunder, and the execution, delivery
and performance of this Contract by the Vendor have been duly authorized by all
necessary corporate action on the part of the Vendor; this Contract has been
duly executed and delivered by the Vendor and is the valid and binding
obligation of the Vendor enforceable in accordance with its terms, except as
enforcement thereof may be limited by or with respect to the following: (i)
applicable insolvency, moratorium, bankruptcy, fraudulent conveyance and other
similar laws of general application relating to or affecting the rights and
remedies of creditors; (ii) application of equitable principles (whether
enforcement is sought in proceedings in equity or at law); and (iii) provided
the remedy of specific enforcement or of injunctive relief is subject to the
discretion of the court before which any proceeding therefore may be brought.
21.1.3 Non-Contravention. The execution, delivery and
performance of this Contract by the Vendor and the consummation of the
transactions contemplated hereby do not and will not contravene the certificate
of incorporation or by-laws of the Vendor and do not and will not conflict with
or result in (i) a breach of or default under any indenture, mortgage, lease,
agreement, instrument, judgment, decree, order or ruling to which the Vendor is
a Party or by which it or any of its properties is bound or affected, or (ii) a
breach of any Applicable Law.
21.1.4 Regulatory Approvals. All authorizations by, approvals
or orders by, consents of, notices to, filings with or other acts by or in
respect of any Governmental Entity or any other Person required in connection
with the execution, delivery and performance of this Contract by the Vendor have
been obtained or will be obtained in due course.
21.1.5 Non-Infringement. The Vendor represents and warrants to
the best of its knowledge based on reasonable diligence under the circumstances
that as of the Effective Date there are no actual claims or threatened or actual
suits in connection with patents and other intellectual property matters that
would materially adversely affect the Vendor's ability to perform its
obligations under this Contract.
21.1.6 Scope. The representations and warranties of the Vendor
pursuant to this subsection 21.1 will be deemed to apply to all of the Work
performed by any Subcontractor employed by the Vendor as though the Vendor had
itself performed such Work.
21.1.7 Requisite Knowledge. The Vendor represents and warrants
that it has all requisite knowledge, know-how, skill, expertise and experience
to perform the Work in accordance with the terms of this Contract.
21.1.8 Financial Capacity. The Vendor represents and
warrants the financial, management and manufacturing capacity and capabilities
to do the Work in a timely manner in accordance with the terms of this
Contract.
21.2 Representations and Warranties of the Owner. The Owner hereby .
represents and warrants to the Vendor as follows:
21.2.1 Due Organization of the Owner. The Owner is a limited
partnership, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to own and operate its
business and properties and to carry on its business as such business is now
being conducted and is duly qualified to do business in Delaware and in any
other jurisdiction in which the transaction of its business makes such
qualification necessary.
21.2.2 Due Authorization of the Owner; Binding Obligation. The
Owner has full power and authority to execute and deliver this Contract and to
perform its obligations hereunder, and the execution, delivery and performance
of this Contract by the Owner have been duly authorized by all necessary
partnership action on the part of the Owner; this Contract has been duly
executed and delivered by the Owner and is the valid and binding obligation of
the Owner enforceable in accordance with its terms, except as enforcement
thereof may be limited by or with respect to the following: (i) applicable
insolvency, moratorium, bankruptcy, fraudulent conveyance and other similar laws
of general application relating to or affecting the rights and remedies of
creditors; (ii) application of equitable principles (whether enforcement is
sought in proceedings in equity or at law); and (iii) provided the remedy of
specific enforcement or of injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
21.2.3 Non-Contravention. The execution, delivery and
performance of this Contract by the Owner and the consummation of the
transactions contemplated hereby do not and will not contravene the partnership
arrangements governing the conduct of the partners in the Owner and do not and
will not conflict with or result in (i) a breach of or default under any
indenture, mortgage, lease, agreement, instrument, judgment, decree, order or
ruling to which the Owner is a Party or by which it or any of its properties is
bound or affected, or (ii) a breach of any Applicable Law.
SECTION 22 TITLE AND RISK OF LOSS
22.1 Title. Title to each Item of Equipment (but in no case Software)
will pass to the Owner upon delivery thereof by the Vendor to the System Element
Location to which each such Item belongs or such other location specifically
requested by the Owner or as otherwise mutually agreed to by the Parties. Prior
to acquiring title to the Equipment, the Owner will not cause or permit the
Equipment to be sold, leased or subjected to a lien or other encumbrance.
22.2 Risk of Loss. Risk of loss of any Products furnished to the Owner
in connection with this Contract will pass from the Vendor to the Owner upon the
completion of the Bolt-down by the Vendor of any PCS Product or at the
completion of installation of any other Product each at the appropriate System
Element Location within the given PCS System and/or PCS Sub-System provided that
the risk of loss of any such PCS System or PCS Sub-System within the System will
not pass to the Owner until such time as the Vendor is fully prepared to
commence testing for the Substantial Completion of such PCS System or PCS
Sub-System in accordance with and pursuant to Exhibit B3 and Exhibit A1;
provided, however, that the Owner will assume the risk of loss prior to such
Substantial Completion by the Vendor for any such Products damaged due to the
gross negligence or willful misconduct of the Owner (provided that the Owner
will also assume the risk of loss for its own negligence at any time after
Milestone 6 (as set forth in Exhibit A1) in each PCS System and/or PCS
Sub-System within the System). With respect to Products delivered by the Vendor
but not otherwise installed by the Vendor pursuant to and in accordance with the
terms of this Contract, risk of loss will pass to the Owner upon delivery by the
Vendor to the Owner's designated site. Until such time as risk passes to the
Owner, the Vendor will, at its sole cost and expense, remedy, repair and replace
all physical damage, loss or injury to such property; provided that, prior to
the passing of risk of loss to the Owner, any actual proceeds of its applicable
insurance payable with respect to such physical damage at such time, loss or
injury are paid to the Vendor as necessary to achieve such remedy, repair or
replacement.
22.3 AS Products Risk of Loss. Notwithstanding anything contained in
this Section 22 to the contrary, risk of loss as to AS Products will pass to the
Owner upon the delivery to the Owner's designated location.
22.4 OTAF and Actiview Products Risk of Loss. Notwithstanding anything
contained in this Section 22 to the contrary, risk of loss as to OTAF and/or
Actiview Products (as appropriate) will pass to the Owner upon delivery (and
installation to the extent applicable) thereof to the Owner's designated
location.
SECTION 23 DISPUTE RESOLUTION
23.1 Dispute Resolution. Subject to subsection 23.4 and subsection
24.3, in the event any controversy, claim, dispute, difference or
misunderstanding arises out of or relates to this Contract, any term or
condition hereof, any of the Work to be performed hereunder or in connection
herewith, the respective System Managers of the Owner and the Vendor will meet
and negotiate in good faith in an attempt to amicably resolve such controversy,
claim, dispute, difference or misunderstanding in writing. Such System Managers
must meet for this purpose within ten (10) Business Days, or such other time
period mutually agreed to by the Parties, after such controversy, claim,
dispute, difference or misunderstanding arises. If the Parties are unable to
resolve the controversy, claim, dispute, difference or misunderstanding through
good faith negotiations within such ten (10) business day period, each Party
will, within five (5) Business Days after the expiration of such ten (10)
business day period, prepare a written position statement which summarizes the
unresolved issues and such Party's proposed resolution. Such position statement
must be delivered by the Vendor to the Owner's Vice President of Engineering or
Operations and by the Owner to the Vendor's corresponding officer or
representative for resolution within (5) Business Days, or such other time
period mutually agreed to by the Parties.
If the Parties continue to be unable to resolve the controversy, claim,
dispute, difference or misunderstanding, either Party may initiate arbitration
in accordance with the provisions of subsection 23.2 below; provided, however,
that with respect to any controversy, claim, dispute, difference or
misunderstanding arising out of or relating to this Contract by which either
Party seeks to obtain from the other monetary damages in excess of twenty-five
million dollars ($25,000,000), either Party, in such case, may commence an
action in any state or federal court in accordance with subsection 27.7 to
resolve such matter in lieu of proceeding with an arbitration pursuant to and in
accordance with subsection 23.2. The arbitrators hired or otherwise chosen
pursuant to and in accordance with the terms of this Contract will determine
issues of arbitrability pursuant to the terms of this Contract but may not in
any way limit, expand or otherwise modify the terms of this Contract nor will
they have any authority to award punitive or other damages in excess of
compensatory damages (other than as specifically set forth in this Contract) and
each Party irrevocably waives any such claim thereto when invoking the
arbitration provisions of subsection 23.2.
23.2 Arbitration. An arbitration proceeding initiated by either Party
under this Contract with respect to any controversy, claim, dispute, difference
or misunderstanding will be conducted in Kansas City, Missouri in accordance
with the Commercial Arbitration rules of the AAA, except that, at the request of
either Party, a stenographic transcript of the testimony and proceedings will be
taken and the arbitrators will base their decision upon the records and briefs
of the Parties.
Such arbitration will be initiated by either Party by notifying the
other Party in writing and will be settled before three (3) impartial
arbitrators, one of whom will be named by the Owner, one by the Vendor and the
third by the two arbitrators appointed by the Owner and the Vendor,
respectively. All of the named arbitrators will have significant experience in
the wireless telecommunications industry. If either the Owner or the Vendor
fails to select an arbitrator within ten (10) days after notice has been given
of the initiation of the arbitration, the officer in charge of the Kansas City,
Missouri office of the AAA will have the right to appoint the other arbitrator,
and the two arbitrators thus chosen will then select the third arbitrator.
Except as the Parties may otherwise mutually agree, the arbitration
hearings will commence within fifteen (15) Business Days after a Party's
initiation of the arbitration. The Federal Rules of Evidence will apply and
reasonable discovery, including depositions, will be permitted. Discovery issues
will be decided by the arbitrators and post-hearing briefs will be permitted.
The arbitrators will render a decision within ten (10) days after the
conclusion of the hearing(s) and submission of post-hearing briefs and a written
opinion setting forth findings of fact and conclusions of law will be made
available to the Parties within that time period. The decision of the majority
of the arbitrators regarding the matter submitted will be final and binding upon
the Parties. Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
Each Party will pay for the services and expenses of the arbitrator
appointed by it, its witnesses and attorneys, and all other costs incurred in
connection with the arbitration (including, without limitation, the cost of the
services and expenses of the arbitrator appointed by the two arbitrators
appointed by the Parties) will be paid in equal part by the Parties, unless the
award will specify a different division of the costs. Unless otherwise
specifically stated in this Contract, during the pendency of any arbitration
proceedings, the Parties agree to continue to perform their obligations
hereunder in the same manner as prior to the institution of arbitration
proceedings.
23.3 Third Party Engineer. Disputes arising under subsections 2.6, 2.7,
9.5(b), 9.6, 10.1 and 17.4 of this Contract, or as otherwise specifically
provided elsewhere in this Contract, or as otherwise mutually agreed by the
Parties, are to be resolved by the Third Party Engineer in the manner provided
in this subsection 23.3. The Vendor and the Buyer will first attempt to resolve
the dispute through consultation and negotiation in good faith and in a spirit
of mutual cooperation as provided in subsection 23.1 above. If those attempts
fail, then either Party may submit its written notice to the other Party
requesting that the dispute be resolved by the Third Party Engineer, in
accordance with the merits of the dispute. If, within ten (10) Business Days
after the receipt of such notice by the notified Party, the dispute is not
resolved, the Owner will select one of the Third Party Engineers listed on
Schedule 14 to render decision in the dispute. The Third Party Engineer will
issue a written decision containing an explanation of how and why the decision
was reached. The Third Party Engineer's decision will be final and binding,
except with respect to any opinion that over the Term of the Contract will
impact the losing Party in the amount of one million dollars ($1,000,000) or
more. If within ten (10) Business Days following the issuance of any such
opinion the Parties have not agreed to implement the terms of any such opinion
that is not final, either Party may seek arbitration pursuant to the provisions
of subsection 23.2 above. In such arbitration, either Party may introduce into
evidence the opinion of the Third Party Engineer, but the arbitrator(s) must
rule on all issues of the dispute on a de novo basis, except as to any facts or
other matters set forth in the opinion and stipulated by both of the Parties. If
none of the listed Third Party Engineers is available or if none accepts the
assignment and the Parties cannot otherwise mutually agree to another Third
Party Engineer, an experienced and reputable engineer (who is not employed by
either Party or any of their Affiliates or affiliates) will be chosen by the
then President of the Institute of Electrical and Electronic Engineers (or the
Vice President, if the President is a present or former employee of any such
entities) to serve as the Third Party Engineer for the purposes of resolving the
dispute. Unless otherwise mutually agreed by the Parties, any Person who is an
officer or employee, agent, Subcontractor or subcontractor of, or a technical
consultant to, either Party will be automatically ineligible to be the Third
Party Engineer. The costs of utilizing a Third Party Engineer to resolve
disputes under this subsection 23.3 will be shared equally by both Parties.
23.4 Other Remedies. Notwithstanding anything to the contrary herein
contained, each Party will be entitled to pursue any equitable rights and
remedies that are available at law or in equity without complying with
subsection 23.2 or 23.3.
23.5 Tolling. All applicable statutes of limitation will be tolled to
the extent permitted by Applicable Law while the dispute resolution procedures
specified in this Section 23 are pending, and nothing herein will be deemed to
bar any Party from taking such action as the Party may reasonably deem to be
required to effectuate such tolling.
SECTION 24 TERMINATION AND EVENTS OF DEFAULT
24.1 Termination Without Cause. (a) The Owner may, at its sole option,
terminate this Contract, in its entirety, for convenience upon ninety (90) days'
prior written notice at any time; provided that prior to any such termination
pursuant to this subsection 24.1 the Minimum Commitment will have been fulfilled
by the Owner in accordance with the terms of this Contract.
(b) Any orders for Vendor Work within any PCS System and/or PCS
Sub-System within the System made by the Owner pursuant to and in accordance
with the terms of this Contract and the program management procedures of the
Owner prior to any such termination described in clause (a) above, other than
the Initial Commitment, will remain in effect and will be fulfilled to the
extent that such orders are outstanding as of the date of such termination. For
the purposes of this subsection 24.1(b) an "order" will not include the Initial
Commitment or any order for a full PCS System or PCS Sub-System within the
Initial System or the System.
24.2 Termination for Cause. The Owner also has the right to terminate
this Contract in its entirety (except as otherwise set forth in clause (l)
below) without any penalty or payment obligation upon the occurrence of any
Vendor event of default (each a "Vendor Event of Default") as set forth below.
The occurrence of any of the following will constitute a Vendor Event of
Default:
(a) the Vendor (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed within
forty-five (45) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it, (iii) is adjudged
bankrupt, or (iv) makes a general assignment for the benefit of its creditors,
or if a receiver is appointed for all or a substantial portion of its assets and
is not discharged within sixty (60) days after his appointment; or
(b) the Vendor commences any proceeding for relief from its creditors
in any court under any state insolvency statutes; or
(c) the Vendor materially disregards or materially violates material
Applicable Laws or material Applicable Permits; or
(d) the Vendor persistently and materially allows Defects and Defi-
ciencies to exist; or
(e) the Vendor fails to fulfill its obligations with respect to the
satisfaction, discharge or bonding of liens as set forth in subsection 2.36
hereof; or
(f) the Vendor abandons or ceases for a period in excess of thirty (30)
days its performance of the Work (except as a result of a casualty which is
fully covered by insurance or as to which other provisions reasonably acceptable
to the Owner are being diligently pursued) or fails to begin the Work within
thirty (30) days after the Notice to Proceed Date; or
(g) the Vendor assigns or subcontracts Work other than as provided for
in this Contract; or
(h) the Vendor fails to materially comply with any Change Order; or
(i) the Vendor fails to perform this Contract (including, without
limitation, any action the Vendor may take on any Vendor-Controlled Site) and
thereby prejudices in any way deemed material by the parties providing financing
in connection with the build-out of the Nationwide Network and/or the Owner in
their reasonable opinion the Owner's efforts to obtain financing for the System
and/or the Nationwide System; or
(j) the Vendor fails to pay to the Owner any material amount due to
the Owner by the date required for such payment; or
(k) the Vendor fails to comply with subsection 27.22;
(l) the Vendor misses any Interim Milestone within any given PCS System
or PCS Sub-System by a period in excess of thirty (30) days and such failure to
achieve such Interim Milestone was not caused by (i) a Force Majeure event
and/or (ii) any act or omission of the Owner; provided that in such case the
Owner will have the right, but not the obligation, to terminate this Contract
with respect to only that PCS System or PCS Sub-System in which such interim
delay occurred unless such interim delay relates to Milestone 4 (as set forth on
Exhibit A1) in which case the Owner will have the right, but not the obligation,
to terminate this Contract in its entirety as otherwise set forth in this
subsection 24.2; or
(m) the Vendor otherwise materially breaches any provision of this
Contract.
24.3 Remedies. (a) If any of the Vendor Events of Default exists, the
Owner may, without prejudice to any other rights or remedies of the Owner in
this Contract or at law or in equity, terminate this Contract upon written
notice to the Vendor; provided, however, that the Owner will have first provided
to the Vendor the following periods of notice and opportunity to cure:
(i) in the case of an Event of Default specified in the
foregoing clauses (e) and (k), the Owner will have provided seven (7)
days' prior written notice to the Vendor, and the Vendor will have
failed to remedy such breach entirely by the end of such seven (7) day
period;
(ii) in the case of an Event of Default specified in the
foregoing clauses (a) or (b), no notice or opportunity to cure will be
required from the Owner; and
(iii) in the case of any other Event of Default by the Vendor,
the Owner will have provided forty-five (45) days' prior written
notice, and the Vendor will have failed (i) to commence to cure the
default within five (5) days of delivery of such notice, and (ii) to
diligently pursue such cure and remedy the breach entirely by the end
of said forty-five (45) day notice period.
(b) If the Owner elects to terminate this Contract, the Owner may,
without prejudice to any other rights or remedies of the Owner in this Contract
or of law or in equity, do one or more of the following:
(i) Take possession of all Engineering and design data,
procurement data, manufacturing data, construction and erection data,
start-up and testing data, materials, and Products that will become
part of the System and/or the specified PCS Systems and/or the
specified PCS Sub-Systems, or the Work, whether any of the same is in a
partial state of completion or completed condition, and title to any of
said items vests in the Owner (if not already vested by the provisions
of this Contract);
(ii) Take temporary possession and control of all of the
Vendor's installation equipment, machinery, and the Vendor's materials,
supplies, Software and any and all tools (including, but not limited
to, any and all RF Engineering tools and/or software) at any project
site, including but not limited to any System Element Location, within
the System and/or the specified PCS Systems and/or the specified PCS
Sub-Systems which in the Owner's opinion are necessary to finish the
Work;
(iii) Direct that the Vendor assign its Subcontractor
agreements to the Owner without any change of price or conditions
therein or penalty or payment therefor; or
(iv) Take over and finish the Work by whatever reasonable
methods the Owner may deem expedient;
provided, that, nothing contained in paragraphs (a) through (d) above will
require the Vendor to relinquish to the Owner any of its manufacturing
facilities, specific Product designs (other than such designs previously
provided to the Owner pursuant to the terms of this Contract), Software Source
Codes, trade secrets or proprietary information not previously provided or made
available to the Owner, the System or any part thereof or any materials,
supplies, inventories, tools, software, engineering and/or designs that are not
integral or relevant to the completion of the Work.
24.4 Discontinuance of Work. Upon such notification of termination, the
Vendor must immediately discontinue all of the Work (unless such notice of
termination directs otherwise), and, as more fully set forth in subsection
24.3(b) clauses (i) through (iv), deliver to the Owner copies of all data,
drawings, specifications, reports, estimates, summaries, and such other
information, and materials as may have been accumulated by the Vendor in
performing the Work, whether completed or in process. Furthermore, the Vendor
must assign, assemble and deliver to the Owner all purchase orders and
Subcontractor agreements requested by the Owner.
24.5 Payments. When the Owner terminates this Contract for cause
pursuant to subsection 24.2, the Vendor will not be entitled to receive further
payment other than payments due and payable under this Contract and not subject
to dispute prior to such termination (provided that any such disputed amounts
will be paid by the Owner when and if such dispute is in fact resolved).
Notwithstanding anything herein to the contrary, the Owner may withhold
payments, if any, to the Vendor for the purposes of offset of amounts owed to
the Owner pursuant to the terms of this Contract until such time as the exact
amount of damages due the Owner from the Vendor is fully determined.
24.6 Costs. In the event of a termination due to a Vendor Event of
Default, the Owner will be entitled to the costs in connection with finishing
the Work (exclusive of any Liquidated Damages already paid and/or owing to the
Owner upon termination of this Contract), and if such costs exceed the unpaid
balance of the Contract Price, the Vendor will be liable to pay such excess to
the Owner. The amount to be paid by the Vendor pursuant to this subsection 24.6
will survive termination of this Contract and will be subject to the limitations
of liability in this Contract.
24.7 Continuing Obligations. Termination of this Contract for any
reason (i) will not relieve either Party of its obligations with respect to the
confidentiality of the Proprietary Information as set forth in subsection 27.19,
(ii) will not relieve either Party of any obligation which applies to it and
which expressly or by implication survives termination, and (iii) except as
otherwise provided in any provision of this Contract expressly limiting the
liability of either Party, will not relieve either Party of any obligations or
liabilities for loss or damage to the other Party arising out of or caused by
acts or omissions of such Party prior to the effectiveness of such termination
or arising out of its obligations as to portions of the Work already performed
or of obligations assumed by the Vendor prior to the date of such termination.
24.8 Vendor's Right to Terminate. The Vendor will have the option to
terminate this Contract without any penalty or payment obligations, other than
undisputed payment obligations outstanding as of the date of any such
termination pursuant to the terms of this Contract if:
(a) the Owner (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed within
forty-five (45) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it, (iii) is adjudged
bankrupt, or (iv) makes a general assignment for the benefit of its creditors,
or if a receiver is appointed for all or a substantial portion of its assets and
is not discharged within sixty (60) days after his appointment, and any such
filing, proceeding, adjudication or assignment as described herein above will
otherwise materially impair the Owner's ability to perform its obligations under
this Contract;
(b) the Owner commences any proceeding for relief in any court under
any state insolvency statutes;
(c) the Owner fails to make payments of undisputed amounts due to the
Vendor pursuant to the terms of this Contract which are more than sixty (60)
days overdue, provided that such failure has continued for at least thirty (30)
days after the Vendor has notified the Owner of its right and intent to so
terminate on account of such overdue amount;
(d) the Owner persistently and materially breaches subsection 11.1 or
subsection 27.19 notwithstanding the fact that the Vendor will have provided the
Owner with prior written notice describing the alleged material breaches and
will have given the Owner a reasonable time (not less than thirty (30) days) to
cure any such breaches; or
(e) except as otherwise provided in subsection 24.1 the Owner fails to
fulfill its Initial Commitment within five (5) years of the Effective Date for
whatever reason other than (i) any act or omission of the Vendor, (ii) failure
or inability to successfully complete Microwave Relocation in any PCS System
and/or PCS Sub-System, (iii) failure or inability to successfully attain Site
Acquisition Substantial Completion in any given PCS System and/or PCS Sub-System
or (iv) any event otherwise constituting a Force Majeure hereunder.
24.9 Special Termination Events. (a) In the event that financing for
the Owner's build-out of the initial phase of the Nationwide Network has not
been finalized with the Vendor and the Other Vendors on terms and conditions
reasonably satisfactory to the Owner, on or before one hundred and eighty (180)
days after January 31, 1996, the Owner will have the right, but not the
obligation, to terminate this Contract in its entirety without charge or penalty
of any kind. In the event of a termination of this Contract pursuant to this
subsection 24.9(a) the Owner will remain liable for amounts due to the Vendor
for all Work performed or Products delivered by the Vendor or any of its
Subcontractors pursuant to the specific terms of this Contract which had been
directly delivered to or performed for the Owner and/or any of its facilities or
sites in accordance with the terms of this Contract including, but not limited
to, the Project Milestones. Any amounts owed by the Owner for Work done or
Products delivered by the Vendor during such interim one hundred and eighty
(180) day period (the "Financing Interim Period") not otherwise invoiced to the
Owner by the Vendor prior to the termination of such Financing Interim Period,
will be invoiced to the Owner by the Vendor within thirty (30) days (but failure
to so invoice will not excuse the Owner's obligation to otherwise pay the Vendor
pursuant to the terms of this subsection 24.9(a)) of such termination pursuant
to this subsection 24.9(a) and will be payable to the extent not otherwise in
dispute by the Owner within thirty (30) days of receipt of such invoice;
provided that in no event will the Owner be liable to the Vendor due to a
termination of this Contract pursuant to this subsection 24.9(a) for any of the
Vendor's direct or indirect costs or expenses incurred in connection with any
supplies or equipment ordered by the Vendor or agreements entered into by the
Vendor in order to enable it to fulfill its obligations hereunder or in
connection with the establishment of and/or upgrade to its manufacturing,
personnel, engineering, administrative or other capacities and/or resources in
contemplation of or pursuant to its performance in accordance with the terms of
this Contract and any amounts due to the Vendor pursuant to this subsection
24.9(a) will be limited in all cases to Work actually done or Products or
Services actually delivered to the Owner, its sites or its facilities.
(b) If at any time after the Effective Date any material change will
have occurred in any Applicable Law or in the interpretation thereof by any
Governmental Entity, or there will be rendered any decision in any judicial or
administrative case, in either case which, in the reasonable opinion of the
Owner, would make the Owner's use of any part of any PCS System illegal or would
subject the Owner or any of its Affiliates to any material penalty, other
material liability or onerous condition or to any burdensome regulation by any
Governmental Entity or otherwise render the use of such PCS System and/or PCS
Sub-System economically nonviable, then, with respect to such PCS System and/or
PCS Sub-System, or affected part thereof, or with respect to the entire System
if so affected, the Owner may terminate this Contract without charge or penalty
of any kind; provided that (i) the Owner gives the Vendor prior written notice
of any such change or decision; (ii) that the Owner uses its reasonable efforts
for a reasonable time to reverse or ameliorate such change or decision to the
extent possible or practical prior to declaring such termination and (iii) the
Owner, at the Vendor's request, gives the Vendor a legal opinion from a
reputable law firm with experience in the area confirming the Owner's reasonable
opinion as set forth above. In the event of a termination pursuant to this
subsection 24.9(b), payment obligations incurred by the Owner for Work actually
done or Products or Services actually delivered by the Vendor prior to such
termination pursuant to this Contract will be payable by the Owner to the Vendor
on the same terms and subject to the limitations set forth in subsection 24.9(a)
above.
SECTION 25 SUSPENSION
25.1 Owner's Right to Suspend Work. The Owner may, at any time and upon
reasonable notice to the Vendor, order the Vendor, in writing, to suspend all or
any part of the Work for such reasonable period of time as the Owner may
reasonably determine to be appropriate for its convenience. Any request by the
Vendor for a change in the Specifications caused by the Owner's suspension of
the Work pursuant to this subsection 25.1 will be subject to the review and
reasonable acceptance of the Owner. No modification to the Specifications will
be made to the extent that performance is, was or would have been suspended,
delayed or interrupted for any other cause due to the Vendor's fault or if the
suspension had no effect on agreed upon performance deadlines and/or Project
Milestones set forth in this Contract. In the event of any such suspension, the
Vendor will be compensated for any actual and reasonable loss, actual and
reasonable damages or actual and reasonable expenses arising directly from such
delay, including but not limited to payments contractually required under any
Subcontractor agreements and reimbursement of reasonable expenses associated
with the necessary re-deployment of the Vendor's resources; provided that the
Vendor will in such event use reasonable efforts to estimate and report to the
Owner any such costs or expenses prior to the commencement of any such Owner
suspension pursuant to this subsection 25.1.
SECTION 26 MOST FAVORED CUSTOMER
26.1 Most Favored Customer Status. (a) With respect to the deployment
of the Initial System (including any Expansions or additions to the Initial
System within the context of the Initial System pursuant to the terms of this
Contract), the Owner will be deemed one of the Vendor's most important and
favored Customers and will always receive priority in terms of availability and
quantity of Products, Engineering and Services no less favorable than any other
Customer of the Vendor and in any event always in accordance with the terms of
this Contract, including, but not limited to, Exhibit A2. At any time during the
Term, the Owner will receive PCS Products, Engineering and Services at prices
and on payment terms and all other contract terms, including financing terms, no
less favorable to the Owner (when viewed collectively) than those offered or
available to any other Customer (other than Initial Affiliates and/or Additional
Affiliates pursuant to the terms of this Contract) of the Vendor for use of such
Items within the United States who are involved in transactions and/or
arrangements of similar or lesser volumes (for the purposes hereof, the Owner's
volume will always be deemed to be at least the level of the Initial Commitment
plus any more PCS Products, Services and/or Engineering ordered at such time
during the Term of this Contract).
(b) On an annual basis throughout the Term of this Contract commencing
on the Effective Date the Vendor will be required to audit its offering of all
CDMA PCS Products, engineering and services provided to the then-existing ten
(10) largest of its Customers (other than Initial Affiliates and/or Additional
Affiliates pursuant to the terms of this Contract) (based on volume purchased or
to be purchased) in the preceding calendar year and certify to the Owner in a
certificate executed by a duly authorized officer of the Vendor (the "MFC
Certificate") that the Owner has in fact received the prices, payment and other
contract terms, availability and quantity of and on Products, Engineering and
Services in accordance with the terms of clause (a) above.
(c) To the extent the Owner determines pursuant to clause (b) above, or
otherwise, that the Vendor has not in fact complied with the terms of clause (a)
above the Owner will have thirty (30) Business Days from receipt of the MFC
Certificate to provide the Vendor with a written claim for Product and/or
Engineering and/or Service pricing rebates on future purchases under this
Contract based upon the Owner's reasonable calculation of the impact on the
Owner of the Vendor's failure to comply with clause (a) of this subsection 26.1.
The Owner's written claim will specify the reasoning underlying its claim. To
the extent the Vendor disagrees with any such claim for such pricing rebates
made by the Owner pursuant to this clause (c) the Vendor will have the right
within ten (10) Business Days of receiving the Owner's written rebate claim to
request management escalation of the matter as provided in subsection 23.1. In
the event that the Parties have not resolved the matter within ten (10) Business
Days after commencement of such escalation, either Party will have the right to
submit the Owner's claim and the Vendor's written response thereto to an
Independent Auditor who will have the authority only to determine whether the
Vendor is in non-compliance with the terms of clause (a) above and whether the
Owner's calculation of the claimed pricing rebate is fair and reasonable in
light of the Vendor's non-compliance with the terms of clause (a) above. Any
such independent determination will be made upon specific procedures and a set
of factors mutually agreed by the Parties. The Vendor will provide to the
Independent Auditor records and summaries of its agreements with such ten (10)
largest Customers pursuant to and in accordance with the terms of this
subsection 26.1. The Independent Auditor's determination must be made and
delivered to both the Vendor and the Owner within ten (10) Business Days of
receiving the request from the Vendor. The report of the Independent Auditor
will not be determinative of the Owner's right to pricing rebates under this
clause, and any dispute between the Vendor and the Owner as to such matter after
the Independent Auditor has rendered its opinion may be referred to arbitration
as provided in subsection 23.2; provided that the report of such Independent
Auditor will be admissible as evidence in any such arbitration. The Party
requesting a determination by an Independent Auditor will bear the cost of the
auditor, provided that, if the other Party's position is not supported by the
Independent Auditor, such other Party will bear any such cost.
SECTION 27 MISCELLANEOUS
27.1 Amendments. The terms and conditions of this Contract, including
the provisions of Exhibits and Schedules hereto, may only be amended by mutually
agreed contract amendments. Each amendment must be in writing and will identify
the provisions to be changed and the changes to be made. Contract amendments
must be signed by duly authorized representatives of each of the Vendor and the
Owner.
27.2 Owner Liabilities. The Parties understand and agree that none of
the Partners, nor any of their Affiliates, will guarantee or otherwise be in any
way liable with respect to any obligations or liabilities of the Owner or any of
its subsidiaries pursuant to this Contract. The Parties further understand and
agree that neither the Owner nor any of its subsidiaries will guarantee or
otherwise be in any way liable for any obligations or liabilities of any of the
Partners or any Affiliate of the Owner pursuant to this Contract unless, and
only to the extent, (i) the Owner or any one of its subsidiaries in accordance
with the Owner's direction expressly agrees in writing to guarantee or otherwise
be liable for such liability, or (ii) in the case of an Affiliate, such
Affiliate orders Products and/or Services through the Owner pursuant to the
terms of this Contact.
27.3 Offset. The Vendor hereby waives any right of offset of amounts
owed by the Owner to the Vendor pursuant to the terms of this Contract.
27.4 Assignment. Except as otherwise permitted herein, neither this
Contract nor any portion hereof may be assigned by either Party without the
express prior written consent of the other Party provided that such consent will
not otherwise be unreasonably withheld (provided further that the Owner's
reasonable concern about an assignee's ability to perform the obligations and/or
the Work of the Vendor pursuant to and in accordance with the terms of this
Contract will be deemed to be reasonable grounds for the Owner withholding any
such consent). The Owner may, without the consent of the Vendor, collaterally
assign its rights hereunder (including, but not limited to, all licenses with
respect to the Software) to any or all parties providing financing for any part
of the Nationwide Network under a collateral trust for the benefit of the Vendor
and one or more other entities providing financing for any part of the
Nationwide Network or similar arrangement for the benefit of the Vendor and one
or more other entities providing for the financing for any part of the
Nationwide Network, in either case, which collateral trust or similar
arrangement, as the case may be, is reasonably acceptable to the Vendor in
accordance with the terms of the financing documents. If requested by the Owner,
the Vendor will within seven (7) days of such request provide a written consent
to any such assignment; provided that such consent will permit reassignment if
the financing parties exercise their remedies under the documents for such
financing subject to reasonable standards as to (i) the creditworthiness of the
assignee and (ii) the fact that the assignee is not at such time a competitor of
the Vendor. The foregoing rights and obligations are in addition to those set
forth in subsection 27.21. Any attempted assignment in violation of the terms of
this Contract will be null and void.
27.5 Enforcement. The Parties agree that either Party may enforce the
provisions of subsections 11.4 and 27.4 regarding assignment by an action for
injunction or other equitable remedies.
27.6 Notices. Any notice, request, consent, waiver or other
communication required or permitted hereunder will be effective only if it is in
writing and personally delivered by hand or by overnight courier or sent by
certified or registered mail, postage prepaid, return receipt requested,
addressed as follows:
If to the Owner:
Sprint Spectrum Equipment Company, L.P.
c/o Sprint Spectrum L.P.
4900 Main
Kansas City, Missouri 64112
Attention: Director, Program Management
If to the Vendor:
Lucent Technologies Inc.
111 Madison Avenue
Morristown, New Jersey 07962-1970
Attention: William K. Nelson
With a copy to;
Lucent Technologies Inc.
Law Department
475 South Street
Morristown, New Jersey 07962
Attention: General Counsel
Written notice given pursuant to this subsection 27.6 will be delivered in
accordance with this subsection 27.6 in writing and when so delivered will be
deemed to have been fully served and delivered. By written notice provided
pursuant to this subsection 27.6, either Party may change its designated
addressee for purposes of giving notices under this Contract.
27.7 GOVERNING LAW AND FORUMS. THIS CONTRACT IS GOVERNED BY THE LAWS
AND STATUTES OF THE STATE OF NEW YORK, EXCLUSIVE OF NEW YORK'S CONFLICT OF LAWS
RULES. THIS CONTRACT AND THE WORK WILL BE DEEMED TO BE MADE, EXECUTED AND
PERFORMED IN THE STATE OF NEW YORK. IF ONE PARTY COMMENCES A LAWSUIT IN RELATION
TO THIS CONTRACT AGAINST THE OTHER PARTY, SUCH LAWSUIT CAN ONLY BE BROUGHT IN
THE STATE OF MISSOURI OR DELAWARE. THE PARTIES HEREBY WAIVE A TRIAL BY JURY IN
ANY SUCH LAWSUIT. THE VENDOR AND THE OWNER EACH HEREBY IRREVOCABLY (A) AGREES
THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS CONTRACT WILL BE BROUGHT IN THE FEDERAL DISTRICT COURT FOR THE WESTERN
DISTRICT OF MISSOURI, OR IN THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF
DELAWARE, WHICH COURTS WILL HAVE EXCLUSIVE JURISDICTION OVER ANY CONTROVERSY
ARISING OUT OF THIS CONTRACT, (B) CONSENTS TO THE JURISDICTION OF SUCH COURTS IN
ANY SUCH SUIT, ACTION OR PROCEEDING AND (C) WAIVES ANY OBJECTION WHICH IT MAY
HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN SUCH
COURTS AND CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING MAY BE
MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE OWNER OR THE VENDOR,
AS THE CASE MAY BE, AT THE ADDRESSES INDICATED IN SUBSECTION 27.6 HEREOF AND IN
THE MANNER SET FORTH IN SUCH SUBSECTION 27.6. NOTHING IN THIS SUBSECTION 27.7
WILL AFFECT THE RIGHT OF THE OWNER OR THE VENDOR TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
27.8 Compliance with Law. The Owner and the Vendor will (a) comply with
all Applicable Laws in the performance of this Contract, including, without
limitation, the laws and regulations of the United States Department of Commerce
and State Department and any other applicable agency or department of the United
States regarding the import, re-import, export or re-export of products or
technology; and (b) indemnify each other for any loss, liability or expense
incurred as the result of breach of this subsection 27.8.
27.9 Independent Contractor. All work performed by any Party under this
Contract will be performed as an independent contractor and not as an agent of
the other and no Persons furnished by the performing Party will be considered
the employees or agents of the other. The performing Party will be responsible
for its employees' compliance with all laws, rules, and regulations while
performing all work under this Contract.
27.10 Headings. The headings given to the Sections and subsections
herein are inserted only for convenience and are in no way to be construed as
part of this Contract or as a limitation of the scope of the particular Section
or subsection to which the title refers.
27.11 Severability. Whenever possible, each provision of this Contract
will be interpreted in such a manner as to be effective and valid under such
applicable law, but, if any provision of this Contract will be held to be
prohibited or invalid in any jurisdiction, the remaining provisions of this
Contract will remain in full force and effect and such prohibited or invalid
provision will remain in effect in any jurisdiction in which it is not
prohibited or invalid.
27.12 Waiver. Unless otherwise specifically provided by the terms of
this Contract, no delay or failure to exercise a right resulting from any breach
of this Contract will impair such right or will be construed to be a waiver
thereof, but such right may be exercised from time to time as may be deemed
expedient. If any representation, warranty or covenant contained in this
Contract is breached by either Party and thereafter waived by the other Party,
such waiver will be limited to the particular breach so waived and not be deemed
to waive any other breach under this Contract.
27.13 Public Statements and Advertising. (a) Neither Party nor its
Subcontractors will issue any public statement (or any private statement unless
required in the performance of the Work), except as stated below, relating to or
in any way disclosing any aspect of the Work, the System, any PCS System or any
PCS Sub-System including the scope, the specific terms of this Contract, extent
or value of the Work and/or the System or any PCS System or any PCS Sub-System.
Express written consent of the other Party is required prior to the invitation
of or permission to any reporter or journalist to enter upon the System or any
part thereof. The Vendor agrees not to use for publicity purposes any
photographs, drawings and/or materials describing the System, any PCS System or
any PCS Sub-System without obtaining the prior written consent of the Owner,
which consent will not be unreasonably withheld. This subsection 27.13(a) is not
intended to exclude the provision of necessary information to prospective
Subcontractors and the Vendor's or the Owner's personnel, agents or consultants.
All other such public disclosures by a Party require the written consent of the
other Party. The obligations of the Parties under this subsection 27.13(a) are
in addition to their respective obligations pursuant to subsection 27.19. This
subsection 27.13(a) will in no way limit either Party from responding to
customary press inquiries or otherwise making public or private statements not
otherwise disclosing Proprietary Information or the specific terms of this
Contract in the normal course of its business and/or in connection with the Work
hereunder.
(b) Subject to the last sentence of subsection 27.13(a), each Party
will submit to the other proposed copies of all advertising (other than public
statements or press releases) wherein the name, trademark or service mark of the
other Party or its Affiliates or affiliates is mentioned; and neither Party will
publish or use such advertising without the other Party's prior written
approval. Such approval will be granted as promptly as possible and will not be
unreasonably withheld. The Parties acknowledge that the obtaining of prior
written approval for each such use pursuant to this subsection 27.13(b) may be
an administrative burden. At the request of either Party, the Owner and the
Vendor will establish mutually acceptable guidelines that will constitute
pre-authorization for the uses specified therein. Such guidelines will be
subject to change from time to time at the reasonable request of either Party.
27.14 Records and Communications. To the extent not already
established, promptly after the Work begins, procedures for keeping and
distributing orderly and complete records of the Work and its progress will be
established. The procedures so established will be followed throughout the
course of the Work unless the Owner and the Vendor mutually agree in advance in
writing to revise the procedures. Furthermore, immediately after the Notice to
Proceed is issued, complete procedures for communications among the Owner and
the Vendor will be established. The procedures so established will be followed
throughout the course of the Work unless the Owner and the Vendor mutually agree
in advance and in writing to revise such procedure.
27.15 Ownership of Specifications. Neither the Vendor nor any
Subcontractor, nor any other Person performing or furnishing the Work, whether
or not under a direct or indirect contract with the Owner, will have or acquire
any title to or ownership rights in any of the Specifications, or in any other
part or portion of this Contract (or copies of any of the Specifications or this
Contract); and no such Person will reuse any of the Specifications on and/or
with respect to any other project without the prior written consent of the
Owner. The Specifications and this Contract (and any and all copies thereof),
are owned by and title resides in the Owner, unless otherwise agreed between the
Owner and any other Person. Notwithstanding anything contained herein to the
contrary, the Owner will not acquire any patent, copyright or trade secret
rights as a result of this Contract, except with respect to copyright and trade
secret rights pursuant to licenses and other approvals provided in connection
with the performance of the Work and except to the extent that a non-exclusive
license of any of the Vendor's copyright or trade secret rights is required to
perform the Work.
27.16 Financing Parties Requirements. The Vendor acknowledges that the
Owner represents that attainment of financing for construction of the Nationwide
Network may be subject to conditions that are customary and appropriate for the
providers of such financing. Therefore, the Vendor agrees to execute promptly
any reasonable amendment to or modification or assignment of this Contract
required by such providers (including, without limitation, any pertinent
industrial development authority or other similar governmental agency issuing
bonds for financing of the System) which do not materially modify the scope of
the Vendor's Work in order to obtain such financing. In the event that any such
amendment or modification materially increases the Vendor's risk or costs
hereunder, the Owner and the Vendor will negotiate in good faith to adjust the
Contract Price, and to equitably adjust such other provisions of this Contract,
if any, which may be affected thereby, to the extent necessary to reflect such
increased risk or costs. In no event will the Vendor be required to accept any
modification or amendment pursuant to this subsection 27.16 which places
material increased risk on the Vendor or otherwise materially modifies the scope
of the Vendor's Work, if, in the Vendor's reasonable opinion, such materially
increased risk or material modification in the Work is not otherwise adequately
addressed by the Owner or otherwise. The Vendor will be responsible for and pay
all costs as a result of the Vendor's unreasonable refusal to promptly comply
with the request for any such modification or amendment made by any provider of
financing described in this subsection 27.16.
27.17 Owner Review, Comment and Approval. To the extent that various
provisions of this Contract provide for the Owner's review, comment, inspection,
evaluation, recommendation or approval, the Owner may at its option do so in
conjunction and/or consultation with the Vendor. To the extent that this
Contract requires the Owner to submit, furnish, provide or deliver to the Vendor
any report, notice, Change Order, request or other items, the Owner may at its
option and upon written notice to the Vendor designate the Engineer to submit,
furnish, provide or deliver such items as the Owner's agent therefor. To the
extent that various provisions of this Contract provide that the Owner may
order, direct or make requests with respect to performance of the Work or is
provided access to the System sites or any other site, the Owner may at its
option and upon written notice to the Vendor authorize the Engineer to act as
the Owner's agent therefor. Upon receipt of such notice, the Vendor will be
entitled to rely upon such authorization until a superseding written notice from
the Owner is received by the Vendor.
27.18 Specifications. The Owner acknowledges that parts of the
Specifications are comprised of Specifications prepared by the Vendor and that
the Vendor contributed significantly to many other portions thereof. The Owner
also acknowledges that, during the normal design, evolution and development
process, portions of the Specifications may appear in design and procurement
documents prepared by the Vendor in its normal course of business; provided,
however, that the Owner will have no liability for any third party infringement
claims arising from such Specifications prepared by the Vendor and the Vendor
will hold the Owner harmless from any such third party claims as provided in
subsection 14.2.
27.19 Confidentiality. (a) All information, including without
limitation all oral and written information (including, but not limited to,
determinations or reports by arbitrators or the Third Party Engineer pursuant to
the terms of this Contract), disclosed to the other Party is deemed to be
confidential, restricted and proprietary to the disclosing Party (hereinafter
referred to as "Proprietary Information"). Each Party agrees to use the
Proprietary Information received from the other Party only for the purpose of
this Contract. Except as specified in this Contract, no other rights, and
particularly licenses, to trademarks, inventions, copyrights, patents, or any
other intellectual property rights are implied or granted under this Contract or
by the conveying of Proprietary Information between the Parties. Proprietary
Information supplied is not to be reproduced in any form except as required to
accomplish the intent of, and in accordance with the terms of, this Contract.
The receiving Party must provide the same care to avoid disclosure or
unauthorized use of Proprietary Information as it provides to protect its own
similar proprietary information but in no event will the receiving Party fail to
use reasonable care under the circumstances to avoid disclosure or unauthorized
use of Proprietary Information. All Proprietary Information must be retained by
the receiving Party in a secure place with access limited to only such of the
receiving Party's employees, subcontractors or agents who need to know such
information for purposes of this Contract and to such third parties as the
disclosing Party has consented to by prior written approval. All Proprietary
Information, unless otherwise specified in writing (i) remains the property of
the disclosing Party, (ii) must be used by the receiving Party only for the
purpose for which it was intended, and (iii) such Proprietary Information,
including all copies of such information, must be returned to the disclosing
Party or destroyed after the receiving Party's need for it has expired or upon
request of the disclosing Party, and, in any event, upon termination of this
Contract. At the request of the disclosing Party, the receiving Party will
furnish a certificate of an officer of the receiving Party certifying that
Proprietary Information not returned to disclosing Party has been destroyed. For
the purposes hereof, Proprietary Information does not include information which:
(i) is published or is otherwise in the
public domain through no fault of the receiving Party
at the time of any claimed disclosure or unauthorized
use by the receiving Party;
(ii) prior to disclosure pursuant to this
Contract is properly within the legitimate possession
of the receiving Party as evidenced by reasonable
documentation to the extent applicable;
(iii) subsequent to disclosure pursuant to
this Contract is lawfully received from a third party
having rights in the information without restriction
of the third party's right to disseminate the
information and without notice of any restriction
against its further disclosure;
(iv) is independently developed by the
receiving Party or is otherwise received through
parties who have not had, either directly or
indirectly, access to or knowledge of such
Proprietary Information;
(v) is transmitted to the receiving Party
after the disclosing Party has received written
notice from the receiving Party after termination or
expiration of this Contract that it does not desire
to receive further Proprietary Information;
(vi) is obligated to be produced under order
of a court of competent jurisdiction or other similar
requirement of a Governmental Entity, so long as the
Party required to disclose the information provides
the other Party with prior notice of such order or
requirement and its cooperation to the extent
reasonable in preserving its confidentiality; or
(vii) the disclosing Party agrees in writ-
ing is free of such restrictions.
(b) Because damages may be difficult to ascertain, the Parties agree,
without limiting any other rights and remedies specified herein, an injunction
may be sought against the Party who has breached or threatened to breach this
subsection 27.19. Each Party represents and warrants that it has the right to
disclose all Proprietary Information which it has disclosed to the other Party
pursuant to this Contract, and each Party agrees to indemnify and hold harmless
the other from all claims by a third party related to the wrongful disclosure of
such third party's proprietary information. Otherwise, neither Party makes any
representation or warranty, express or implied, with respect to any Proprietary
Information.
27.20 Entirety of Contract; No Oral Change. This Contract and the
Exhibits and Schedules referenced herein constitute the entire contract between
the Parties with respect to the subject matter hereof, and supersede all
proposals, oral or written, all previous negotiations, and all other
communications between the Parties with respect to the subject matter hereof. No
modifications, alterations or waivers of any provisions herein contained will be
binding on the Parties hereto unless evidenced in writing signed by duly
authorized representatives of both Parties as set forth in subsection 27.1. Any
representations by the Vendor in any RFP response and/or any documentation
otherwise provided to the Owner in connection with the Vendor's solicitation of
the business granted pursuant hereto prior to the execution hereof will also be
deemed to be incorporated into and otherwise made a part of this Contract;
provided that any such information will in no way be deemed to modify the
Specifications unless otherwise specifically mutually agreed by the Parties.
27.21 Successors and Assigns. This Contract will bind and inure to the
benefit of the Parties to this Contract, their successors and permitted assigns.
27.22 Change of Control of the Vendor. The Vendor will not consolidate
with or merge into any other Person or convey, transfer or lease all or
substantially all of its assets to any Person, nor will any Person or group (as
such term is defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) own or acquire fifty percent (50%) of the value of the Vendor's
equity where such Person or group did not own as of the Effective Date in excess
of ten percent (10%) of such equity (any such Person or group will be referred
to as the "Vendor's Succeeding Entity"), unless:
(i) the Vendor's Succeeding Entity will
agree to assume the obligations of the Vendor under
this Contract; and
(ii) the Owner will have approved the
transaction, based solely on (i) the creditworthiness
of the Vendor's Succeeding Entity, (ii) whether the
Vendor's Succeeding Entity is a competitor of the
Owner and (iii) whether in the Owner's reasonable
judgment the Vendor's Succeeding Entity will be able
to fulfill the obligations for present and future
orders under this Contract.
27.23 Change of Control of the Owner. Except as otherwise (i) provided
below, (ii) permitted under the documents relating to the financing of the
Nationwide Network or (iii) pursuant to internal reorganizations of the Owner,
the Owner will not consolidate with or merge into any other business entity or
convey, transfer or lease all or substantially all of its assets to any Person,
nor will any Person or group (as such term is defined in the Exchange Act) own
or acquire fifty percent (50%) of the value of the Owner's limited partnership
interests or general partnership interests where such Person or group did not
own as of the Effective Date in excess of ten percent (10%) of either of such
partnership interests (any such Person or group will be referred to as the
"Owner's Succeeding Entity"), unless:
(a) the Owner's Succeeding Entity will agree to assume the obligations
of the Owner under this Contract; and
(b) the Vendor will have approved the transaction, based solely on (i)
the creditworthiness of the Owner's Succeeding Entity and (ii) whether the
Owner's Succeeding Entity is a competitor of the Vendor.
Notwithstanding anything stated in this subsection 27.23 to the
contrary a "Permitted Transaction" or a series of Permitted Transactions by any
Partner or Partners (or any affiliate, parent or subsidiary thereof) will not be
subject to or in any way in violation of this subsection 27.23. For the purposes
hereof, a "Permitted Transaction" means with respect to any Partner (or
affiliate, parent or subsidiary thereof) a transaction or series of related
transactions in which (i) such Partner ceases to be a subsidiary of its parent
or such parent transfers its interests in such Partner to a Person that is not
an affiliate of such Partner and (ii) the new parent of such Partner (or such
Partner if it is its own parent) or the parent of the transferee of such
interests after giving effect to such transaction, or the last transaction in a
series of related transactions, owns, directly and indirectly through its
affiliates, all or a "Substantial Portion" of the cable television system assets
(in the case of a Partner in the cable business (a "Cable Partner")) or long
distance telecommunications business assets (in the case of Sprint) owned by the
parent of such Partners, directly and indirectly through its affiliates,
immediately prior to the commencement of such transaction or series of
transactions. As used herein, "Substantial Portion" means (x) in the case of a
Cable Partner, cable television systems serving seventy five percent (75%) or
more of the aggregate number of basic subscribers served by cable television
systems in the United States (including its territories and possessions other
than Puerto Rico) owned by the parent of such Cable Partner, directly and
indirectly through its affiliates, and (y) in the case of Sprint, long distance
telecommunications business assets serving seventy five percent (75%) or more of
the aggregate number of customers served by the long distance telecommunications
business in the United States (including its territories and possessions other
than Puerto Rico) owned by Sprint and/or its parent, directly and indirectly
through its affiliates.
27.24 Relationship of the Parties. Pursuant to subsection 27.9, nothing
in this Contract will be deemed to constitute either Party a partner, agent or
legal representative of the other Party, or to create any fiduciary relationship
between the Parties. The Vendor is and will remain an independent contractor in
the performance of this Contract, maintaining complete control of its personnel,
workers, Subcontractors and operations required for performance of the Work.
This Contract will not be construed to create any relationship, contractual or
otherwise, between the Owner and any Subcontractor.
27.25 Discretion. Notwithstanding anything contained herein to the
contrary, to the extent that various provisions of this Contract call for an
exercise of discretion in making decisions or granting approvals or consents,
the Parties will be required to exercise such discretion, decision or approvals
in accordance with accepted PCS industry practices and in good faith.
27.26 Non-Recourse. No past, present or future limited or general
partner in or of the Owner, no parent or other affiliate of any company
comprising the Owner, and no officer, employee, servant, executive, director,
agent or authorized representative of any of them (each, an "Operative") will be
liable by virtue of the direct or indirect ownership interest of such Operative
in the Owner for payments due under this Contract or for the performance of any
obligation, or breach of any representation or warranty made by the Owner
hereunder. The sole recourse of the Vendor for satisfaction of the obligations
of the Owner under this Contract will be against the Owner and the Owner's
assets and not against any Operative or any assets or property of any such
Operative. In the event that a default occurs in connection with such
obligations, no action will be brought against any such Operative by virtue of
its direct or indirect ownership interest in the Owner. The foregoing provisions
of this subsection 27.26 will not in any way limit or restrict any right or
remedy of the Vendor with respect to, and the Operatives will remain fully
liable for, any fraud perpetuated by such Operatives.
27.27 Improvements, Inventions and Innovations. All rights in any
improvements, inventions, and innovations made by the Owner will vest in the
Owner, and the Owner and its affiliates will have the right to exploit such
improvements, inventions, and innovations. All rights in any improvements,
inventions and innovations made by the Vendor will vest in the Vendor, and the
Vendor and its affiliates will have the right to exploit such improvements,
inventions and innovations; provided, however, that subject to and in accordance
with subsection 11.9 the Owner and its affiliates may be granted certain rights
to improvements, inventions or innovations made in connection with the System
pursuant to subsection 11.9 by the Vendor (but not by any Subcontractor) in the
course and as a result of performing the Work and in which the Vendor owns or
possesses any proprietary interest (provided that the immediately preceding
proviso of this last sentence of this subsection 27.27 is not subject to
subsection 23.2).
27.28 Attachments and Incorporations. All Schedules and Exhibits
attached hereto, are hereby incorporated by reference herein and made a part of
this Contract with the same force and effect as though set forth in their
entirety herein.
27.29 Conflicts. In the event of any conflict or inconsistency among
the provisions of this Contract and the documents attached hereto and
incorporated herein, such conflict or inconsistency will be resolved by giving
precedence to this Contract and thereafter to the Exhibits, Schedules and
Specifications.
27.30 Counterparts. This Contract may be executed by one or more of the
Parties to this Contract on any number of separate counterparts, and all of said
counterparts taken together will be deemed to constitute one and the same
instrument.
* * *
<PAGE>
THE OWNER AND THE VENDOR HAVE READ THIS CONTRACT INCLUDING ALL
SCHEDULES, EXHIBITS AND APPENDICES HERETO AND AGREE TO BE BOUND BY ALL THE TERMS
AND CONDITIONS HEREOF AND THEREOF.
IN WITNESS WHEREOF, the Parties have executed this Contract as
of the date first above written.
SPRINT SPECTRUM EQUIPMENT
COMPANY, L.P., as the Owner
By:/s/ ANDREW W. SUKAWATY
Name: Andrew W. Sukawaty
Title: CEO
LUCENT TECHNOLOGIES INC., as the
Vendor
By:/s/ WILLIAM K. NELSON
Name: William K. Nelson
Title: Vice President
Sprint Spectrum Account
<PAGE>
Schedule 1
Preliminary RF Design
The preliminary RF Design will also be based on the following items as listed in
the Contract:
1) Design grid of all coverage areas
2) Signal level plot(s) including:
- Plot scales appropriate to review complete system and site-
to-site interaction.
- Latitude, longitude, radiation center, omni/sector and power
of each site as set forth in tabular form.
- Cell count by land classifications:
- Within the applicable arbitron area;
- For the entire System Area; and
- For launch (if different from the Arbitron count).
- System performance criteria as specified in Exhibit F.
3) Prequalified site overlay.
4) Estimated number of voice channels (4.7% penetration, 260 min-
utes of use/month/per sub).
5) Average tower heights by land classification based on FAA in-
formation and preliminary site zoning information.
<PAGE>
Schedule 2
Product Prices
[12 pages were omitted pursuant to the Registrant's request for
confidential treatment.]
<PAGE>
Schedule 3
Services Prices
[1 page was omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
Schedule 4
Allocated System Areas and Allocated System Sub-Areas
PCS SYSTEM AND PCS SUBSYSTEMS
REGION PCS SYSTEM AND PCS SUBSYSTEMS
East Albany
Boston/South
Buffalo
Hartford
New Hampshire/Maine
New York City (including Manhattan, Brooklyn, Queens,
Bronx, Staten Island)
New York - Metro Area
Pittsburgh
Providence
Rochester
Syracuse
Central Detroit
Toledo
Milwaukee
West Denver
Fresno
Phoenix - Metro
Phoenix - Tucson
Portland
Salt Lake City
Sacramento
S.F. North/Oakland
S.F. South
Seattle
Spokane
[15 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
Schedule 5
Initial Affiliates
1. Each of the Partners and their operating subsidiaries.
2. APC and its operating subsidiaries.
3. PhillieCo and its operating subsidiaries.
4. Continental and its operating subsidiaries.
5. TCG and its operating subsidiaries.
6. NewTelCo. and its operating subsidiaries.
<PAGE>
Schedule 6
Insurance
The Vendor will procure and maintain, during the Term of this Contract,
insurance with financially sound and reputable insurance companies in not less
than the following amounts:
(a) Workers' compensation insurance in accordance with the provisions
of the applicable Worker's Compensation or similar law of each state or other
political subdivision with jurisdiction applicable to the Vendor's personnel;
(b) Commercial general liability, including contractual liability
insurance with a coverage limit of not less than five million dollars
($5,000,000) combined single limit per occurrence of bodily injury or property
damage liability. To the extent reasonably requested by the Owner and not unduly
burdensome to the Vendor and to the extent otherwise applicable, such policy or
policies will name the Owner as an additional insured and will contain a
provision waiving the insurer's right of subrogation against the Owner and its
employees, agents, officers and directors; and
(c) If the use of any vehicle is required by the Vendor or any employee
of the Vendor in the performance of this Contract, the Vendor will also obtain
and maintain business vehicle liability insurance for the operation of all
owned, non-owned and hired vehicles with a coverage limit of not less than one
million dollars ($1,000,000) per accident for bodily injury and not less than
three hundred thousand dollars ($300,000) per accident for property damage
liability.
The Vendor reserves the right to self-retain any or all coverage
described above in this Schedule 6 and upon the Effective Date, does retain some
of such coverage. The Vendor upon the written request of the Owner will deliver
to the Owner certificates of commercial insurance satisfactory in form and
content to the Owner evidencing that all of the insurance required by this
Contract is in force, and that no policy may be canceled or materially altered
without first giving the Owner at least thirty (30) days' written notice.
Nothing herein is intended to imply that the Vendor's liability to the
Owner is limited to the amount of insurance carried.
<PAGE>
Schedule 7
Products
See Schedules 2 and 3 for a list of the Vendor's Products.
<PAGE>
Schedule 8
Vendor's Repair Facilities
Lucent Technologies
Repair Services & Returns Org.
6200 East Broad Street
Columbus, Ohio 43213-1569
Telephone: 1-800-349-4810
<PAGE>
Schedule 9
[Form of Notice to Proceed]
NOTICE TO PROCEED
____________ ___, 199__
[Name of Contractor]
[Address]
Attention: [Contractor Representative]
Re: Sprint Spectrum L.P.
Lucent Technologies Inc.
Vendor Procurement Contract
Dear Sirs:
This Notice to Proceed is hereby delivered to you pursuant to the
Procurement and Services Contract for Sprint Spectrum L.P., dated as of
_________, 1996 (the "Contract"), between Sprint Spectrum Equipment Company,
L.P. (the "Owner") and Lucent Technologies Inc. (the "Vendor"). The Owner hereby
instructs the Vendor to commence performance of the Work under the Contract as
of the date hereof.
Sincerely,
SPRINT SPECTRUM EQUIPMENT COMPANY, L.P.
By:__________________________
Name:
Title:
<PAGE>
Schedule 10
[Intentionally Omitted]
<PAGE>
Schedule 11
Order Cancellation Charges
Without charge and/or penalty, the Owner may cancel any Order for Products no
later than ninety (90) days prior to the earliest date scheduled for shipment of
such Product; or
If the Owner cancels an Order less than ninety (90) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of ten percent (10%) of the price for such Product as
determined pursuant to the Contract; or
If the Owner cancels an Order less than sixty (60) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of fifteen percent (15%) of the price for such Product as
determined pursuant to the Contract; or
If the Owner cancels an Order less than thirty (30) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of twenty percent (20%) of the price for such Product as
determined pursuant to the Contract.
The Owner may not cancel an Order after the applicable date scheduled for
shipment of such Product. The payment of such charges will be the Vendor's sole
remedy and the Owner's sole obligation for such canceled Order. Any changes
requested by the Owner that involve the return or exchange of Non-Essential
Equipment will be subject to the standard policies of the applicable
Non-Essential Equipment supplier unless such policies are otherwise set out in
the applicable agreement between such Non-Essential Equipment supplier and the
Vendor, in which case the Owner will be entitled to cancel any such Order for
Non-Essential Equipment in accordance with the terms of such agreement. For the
purposes of this Schedule 11, the term "Order" will not include the Minimum
Commitment or the Initial Commitment.
Nothing herein will be deemed to bar the Vendor's right to invoice the Owner for
all Services actually performed prior to the date of such performance by the
Vendor in respect of such Products in accordance with the provisions of this
Contract.
<PAGE>
Schedules 12 A and 12B
Base Station Spares
[2 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
Schedule 13
Foreign Affiliates
Each entity referred to in subsection 2.2(c) is the Vendor's primary
subsidiary offering PCS Products and Services in the country or territory
involved on the Effective Date, or its successor. As of the Effective Date,
these entities are for Canada, AT&T Canada Inc., and for Mexico, AT&T de Mexico
SA de CV. This list includes any other foreign or other Vendor affiliate
otherwise designated.
<PAGE>
Schedule 14
Third Party Engineers
Moffitt Larson & Johnson
LCC L.L.C.
Mobile System International, Inc.
<PAGE>
Schedule 15
Independent Auditors
Ernst & Young LLP
Arthur Andersen & Co. LLP
Price Waterhouse LLP
Deloitte & Touche LLP
KPMG Peat Marwick LLP
This list will at all times throughout the Term of this Contract specifically
exclude the then current auditor of either the Vendor and the Owner.
<PAGE>
Exhibit A1
Project Milestones
[1 page was omitted pursuant to the Registrant's request for confidential treat-
ment.]
<PAGE>
Exhibit A2
2) PCS Product Availability 1996
1Q 2Q 3Q 4Q
BTS [
MSCs ]
1) BTS availability is based on current ordering expectations. Above quantities
require a 12 week order interval. Additional quantities up to [ ] could be
ordered with additional lead time.
2) MSCs are assumed available on regular order interval. Additional capacity
could be provided with longer intervals.
<PAGE>
EXHIBIT B1 (A)
AT&T RF Design and Acceptance Process
[32 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT C (A)
Owner Required Wireless Features and Functions
[11 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT D
AT&T System Elements
[66 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT E (A)
Construction Management Criteria
[12 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT F (A)
RF Performance Criteria
[6 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT G (A)
AT&T BTS/BSC - MSC Interoperability
[3 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT H (A)
Handsets
[46 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
EXHIBIT I (A)
Technology Integration Laboratory Requirements
[1 page was omitted pursuant to the Registrant's request for confidential treat-
ment.]
<PAGE>
APPENDIX A
AM/HLR Description and Specifications
[53 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX B
SCP/HLR Description and Specifications
[27 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX C
[Intentionally Omitted]
<PAGE>
APPENDIX D1
Lucent/Nortel License Agreement - HLR
[8 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX D2
Lucent/Nortel License Agreement - OAM&P
[9 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX E
HLR Statement of Work
[37 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX F
SCP/HLR Prices
[5 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX G
AS/OAM&P Statement of Work
[79 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX H
[Intentionally Omitted]
<PAGE>
APPENDIX I
AS/OAM&P Prices
[7 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX J
[Intentionally Omitted]
<PAGE>
APPENDIX K
Application Software Products Acceptance Procedures and Criteria
APPLICATION SOFTWARE ACCEPTANCE:
To be delivered pursuant to mutual agreement of the Parties pursuant to
the terms of Amendment No. 2.
<PAGE>
APPENDIX L
Application Software Products Maintenance and Support Services
[11 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX M
OTAF Statement of Work
[38 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX N
[Intentionally Omitted]
<PAGE>
APPENDIX O
OTAF Prices
[1 page was omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX P
OTAF Acceptance Procedures and Criteria
To be mutually agreed by the Parties no later than October 23, 1996.
<PAGE>
APPENDIX Q
[Intentionally Omitted]
<PAGE>
APPENDIX R
[Intentionally Omitted]
<PAGE>
APPENDIX S
Actiview Acceptance Procedures and Criteria
For each applicable Actiview Software release, the Acceptance Procedures for
such release are to be mutually agreed between the Parties no later than one (1)
week prior to the delivery by the Vendor of any such release. Failure of the
Parties to so mutually agree at such time will in no way modify the Vendor's
obligation to timely deliver any such Actiview Software release pursuant to and
in accordance with the Actiview Statement of Work.
<PAGE>
APPENDIX T
Actiview Prices
[5 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
APPENDIX U
Actiview Statement of Work
[24 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS
1.1 Definitions................................................ 2
1.2 Other Definitional Provisions.............................. 32
SECTION 2 SCOPE OF WORK, RESPONSIBILITIES AND PROJECT
MILESTONES
2.1 Scope of Work.............................................. 32
2.2 Additional Coverage........................................ 33
2.2.1 AS Products and AS Services Additional Coverage............ 34
2.3 Handsets................................................... 34
2.4 Initial PCS System......................................... 35
2.5 System Element Verification; Test-bed Laboratory........... 35
2.6 RF Engineering; Site Acquisition and MSC Installation...... 36
2.7 Facilities Preparation Services and Installation........... 38
2.8 Site Acquisition Modifications............................. 39
2.9 Design/System Architecture and Engineering................. 39
2.10 Certification.............................................. 41
2.11 Notice of Developments..................................... 41
2.11.1 Vendor Developments........................................ 41
2.11.2 Participation in Testing................................... 41
2.12 Safety..................................................... 42
2.13 Emergencies................................................ 42
2.14 Right of Inspection........................................ 43
2.15 Transportation............................................. 43
2.16 Security................................................... 44
2.17 Materials and Equipment.................................... 44
2.18 Equipment and Data......................................... 44
2.19 References to Certain Sources.............................. 45
2.20 Operating Manuals.......................................... 45
2.20.1 AS Products and Services Operating Manuals................. 45
2.20.2 OTAF Products and Services Operating Manuals............... 45
2.20.3 Actiview Products and Services Operating Manuals........... 46
2.21 Maintenance and Instruction Manuals........................ 46
2.22 Standards for Manuals...................................... 46
2.23 Training................................................... 47
2.23.1 [INTENTIONALLY OMITTED].................................... 49
2.23.2 Actiview Training.......................................... 49
2.24 Manuals and Training....................................... 49
2.25 Spare Parts................................................ 50
2.26 System Support Services.................................... 50
2.26.1 Vendor Assistance.......................................... 50
2.26.2 Trouble Reports............................................ 51
2.26.3 Emergency Technical Assistance............................. 52
2.26.4 ETA and CSR................................................ 56
2.27 Supply of Additional Products.............................. 57
2.28 Review of Contract......................................... 57
2.29 Licenses, Permits and Approvals............................ 57
2.30 Eligibility under Applicable Laws and Applicable Permits... 57
2.31 Customs Approvals.......................................... 58
2.32 Owner Participation........................................ 58
2.33 New Development Advisory Board............................. 58
2.34 Market Development Manager................................. 58
2.35 Further Assurances......................................... 59
2.36 Liens and Other Encumbrances............................... 59
2.37 Forecasting and Ordering................................... 60
2.38 Microwave Relocation; Network Interconnection.............. 60
2.39 Vendor To Inform Itself Fully; Waiver of Defense........... 61
2.40 CMI/HIC.................................................... 61
2.41 Site Acquisition Delay Testing............................. 61
SECTION 3 AFFILIATES
3.1 Additional Affiliates...................................... 62
3.2 Agreements with Initial Affiliates......................... 63
3.3 Agreements with Additional Affiliates...................... 63
3.4 Affiliate Rights........................................... 63
SECTION 4 SUBCONTRACTORS
4.1 Subcontractors............................................. 64
4.2 The Vendor's Liability..................................... 64
4.3 No Effect of Inconsistent Terms in Subcontracts............ 64
4.4 Assignability of Subcontracts to Owner..................... 64
4.5 Removal of Subcontractor or Subcontractor's Personnel...... 64
4.6 Subcontractor Insurance.................................... 65
4.7 Review and Approval not Relief of Vendor Liability......... 65
4.8 Vendor Warranties.......................................... 65
4.9 Payment of Subcontractors.................................. 65
SECTION 5 TERM OF CONTRACT
5.1 Initial Term............................................... 66
5.2 Renewal.................................................... 66
SECTION 6 PRICES AND PAYMENT
6.1 Prices..................................................... 66
6.2 Price Reduction............................................ 67
6.2.1 TCU Payments............................................... 67
6.3 Payments................................................... 68
6.3.1 Additional Products not in Initial System or Otherwise
Provided for in Section 2.2.............................. 69
6.3.2 SCP/HLR Payments........................................... 70
6.3.3. AS Products Payments....................................... 70
6.3.4 OTAF Payments.............................................. 70
6.3.5 Actiview Payments.......................................... 71
6.4 Payments for Facilities Preparation Services............... 71
6.5 Monthly Forecasts.......................................... 72
6.6 No Payment in Event of Material Breach..................... 73
6.7 Microwave Relocation Delay Partial Payments................ 73
6.8 In Revenue Payments........................................ 73
SECTION 7 ORDERS AND SCHEDULING
7.1 Initial Commitment......................................... 74
7.2 Change Orders.............................................. 74
7.3 Cancellation............................................... 75
SECTION 8 INSTALLATION
8.1 Installation............................................... 75
8.2 No Interference............................................ 75
SECTION 9 ACCEPTANCE TESTING AND ACCEPTANCE
9.1 Acceptance Testing......................................... 76
9.2 Costs and Expenses......................................... 76
9.3 Notification............................................... 76
9.4 Presence at Acceptance Tests............................... 76
9.5 Correction of Defects...................................... 76
9.6 Acceptance Certificate..................................... 77
9.7 AS Acceptance Testing and Acceptance....................... 77
9.8 Actiview Acceptance Testing and Acceptance................. 78
SECTION 10 DISCONTINUED PRODUCTS
10.1 Notice of Discontinuation.................................. 79
10.2 Discontinuation During Warranty Period..................... 80
10.3 Discontinuation After Warranty Period...................... 80
SECTION 11 SOFTWARE; CONFIDENTIAL INFORMATION
11.1 RTU License................................................ 81
11.2 Owner's Obligations........................................ 81
11.3 Backwards Compatibility.................................... 82
11.4 Transfer and Relocation.................................... 82
11.5 Survival................................................... 83
11.6 Access to Source Codes..................................... 83
11.7 Escrow Agreement........................................... 83
11.8 Software Maintenance....................................... 84
11.9 Custom Development......................................... 84
11.9.1 Request for Custom Material................................ 84
11.9.2 Vendor Response............................................ 85
11.9.3 Ownership of Intellectual Property......................... 85
SECTION 12 SOFTWARE CHANGES
12.1 Annual Release Maintenance Fees............................ 85
12.2 Notice..................................................... 85
12.3 Installation, Testing and Maintenance...................... 85
12.4 Software Fixes............................................. 86
12.5 Right to Modify SCP/HLR Software........................... 86
12.6 Right to Modify AS Software and Actiview Software.......... 87
12.7 Right to Modify OTAF Software.............................. 87
SECTION 13 EQUIPMENT CHANGES
13.1 Equipment Upgrades......................................... 89
13.2 Notice..................................................... 90
13.3 Installation, Testing and Acceptance....................... 91
13.4 Equipment Fixes............................................ 91
SECTION 14 INTELLECTUAL PROPERTY
14.1 Intellectual Property...................................... 91
14.2 Infringement............................................... 91
14.3 Vendor's Obligation to Cure................................ 92
14.4 Vendor's Obligations....................................... 93
14.5 License to Use Vendor Patents.............................. 93
SECTION 15 DELAY
15.1 Liquidated Damages......................................... 94
15.2 Interim Delay.............................................. 94
15.3 Completion Delay........................................... 94
15.4 SCP/HLR Delay.............................................. 96
15.5 AM/HLR Interim Solution.................................... 96
15.6 AM/HLR Redeployment........................................ 96
15.7 SCP/HLR Delay Termination.................................. 96
15.8 AS Software Delay.......................................... 97
15.9 OTAF and/or Actiview Delay Termination..................... 97
15.10 OTAF and/or Actiview Delay................................. 98
SECTION 16 FORCE MAJEURE
16.1 Force Majeure.............................................. 99
SECTION 17 WARRANTIES
17.1 Product Warranty...........................................100
17.1.1 AS Products Warranty.......................................100
17.1.2 OTAF Products Warranty.....................................101
17.1.3 Actiview Products Warranty.................................101
17.2 Services Warranty..........................................102
17.3 System Warranty............................................102
17.4 Breach of Warranties.......................................103
17.5 Repair and Return..........................................105
17.6 Technical Assistance Center................................107
17.7 Scope of Warranties........................................108
17.8 Expenses...................................................108
17.9 Third Party Warranties.....................................109
17.10 Additional System Element Locations........................109
17.11 EXCLUSIVE REMEDIES.........................................109
SECTION 18 INSURANCE
18.1 Insurance..................................................109
SECTION 19 TAXES
19.1 Taxes......................................................109
SECTION 20 INDEMNIFICATION AND LIMITATION OF LIABILITY
20.1 Vendor Indemnity...........................................110
20.2 LIMITATION ON LIABILITY....................................111
20.3 Damages for Fraud or Willful Misconduct....................111
SECTION 21 REPRESENTATIONS AND WARRANTIES
21.1 Representations and Warranties of the Vendor...............111
21.1.1 Due Organization of the Vendor.............................111
21.1.2 Due Authorization of the Vendor; Binding Obligation........111
21.1.3 Non-Contravention..........................................112
21.1.4 Regulatory Approvals.......................................112
21.1.5 Non-Infringement...........................................112
21.1.6 Scope 112
21.1.7 Requisite Knowledge........................................112
21.1.8 Financial Capacity.........................................112
21.2 Representations and Warranties of the Owner................112
21.2.1 Due Organization of the Owner..............................112
21.2.2 Due Authorization of the Owner; Binding Obligation.........113
21.2.3 Non-Contravention..........................................113
SECTION 22 TITLE AND RISK OF LOSS
22.1 Title......................................................113
22.2 Risk of Loss...............................................113
22.3 AS Products Risk of Loss...................................114
22.4 OTAF and Actiview Products Risk of Loss....................114
SECTION 23 DISPUTE RESOLUTION
23.1 Dispute Resolution.........................................114
23.2 Arbitration................................................115
23.3 Third Party Engineer.......................................116
23.4 Other Remedies.............................................116
23.5 Tolling....................................................116
SECTION 24 TERMINATION AND EVENTS OF DEFAULT
24.1 Termination Without Cause .................................117
24.2 Termination for Cause......................................117
24.3 Remedies...................................................118
24.4 Discontinuance of Work.....................................119
24.5 Payments...................................................120
24.6 Costs......................................................120
24.7 Continuing Obligations.....................................120
24.8 Vendor's Right to Terminate................................120
24.9 Special Termination Events.................................121
SECTION 25 SUSPENSION
25.1 Owner's Right to Suspend Work..............................122
SECTION 26 MOST FAVORED CUSTOMER
26.1 Most Favored Customer Status...............................123
SECTION 27 MISCELLANEOUS
27.1 Amendments.................................................124
27.2 Owner Liabilities..........................................124
27.3 Offset.....................................................124
27.4 Assignment.................................................125
27.5 Enforcement................................................125
27.6 Notices....................................................125
27.7 GOVERNING LAW AND FORUMS...................................126
27.8 Compliance with Law........................................127
27.9 Independent Contractor.....................................127
27.10 Headings...................................................127
27.11 Severability...............................................127
27.12 Waiver.....................................................127
27.13 Public Statements and Advertising..........................127
27.14 Records and Communications.................................128
27.15 Ownership of Specifications................................128
27.16 Financing Parties Requirements.............................129
27.17 Owner Review, Comment and Approval.........................129
27.18 Specifications.............................................129
27.19 Confidentiality............................................130
27.20 Entirety of Contract; No Oral Change.......................131
27.21 Successors and Assigns.....................................132
27.22 Change of Control of the Vendor............................132
27.23 Change of Control of the Owner.............................132
27.24 Relationship of the Parties................................133
27.25 Discretion.................................................133
27.26 Non-Recourse...............................................133
27.27 Improvements, Inventions and Innovations...................134
27.28 Attachments and Incorporations.............................134
27.29 Conflicts..................................................134
27.30 Counterparts...............................................134
<PAGE>
EXHIBITS
Exhibit A1 - Project Milestones
Exhibit A2 - PCS Product Availability
Exhibit B1 - RF Design and Acceptance Process
Exhibit B2 - Acceptance Process for Completion of System Element
Facilities
Exhibit B3 - Validation and Acceptance Testing
Exhibit C - Owner Required Wireless Features and Functions
Exhibit D - System Elements
Exhibit E - Construction Management Criteria
Exhibit F - RF Performance Criteria
Exhibit G - BTS/BSC - MSC Interoperability
Exhibit H - Handsets
Exhibit I - Technology Integration Laboratory Requirements
SCHEDULES
Schedule 1 - Preliminary RF Design
Schedule 2 - Product Prices
Schedule 3 - Services Prices
Schedule 4 - Allocated System Areas and System Sub-Areas
Schedule 5 - Initial Affiliates
Schedule 6 - Insurance Provisions
Schedule 7 - Products
Schedule 8 - Vendor's Repair Facilities
Schedule 9 - Form of Notice to Proceed
Schedule 10 - [Intentionally Omitted]
Schedule 11 - Order Cancellation Charges
Schedule 12A - Spare Parts Requirements
Schedule 12B - Spare Parts Prices
Schedule 13 - Foreign Subsidiaries and Affiliates
Schedule 14 - Third Party Engineers
Schedule 15 - Independent Auditors
APPENDICES
Appendix A - AM/HLR Description and Specifications
Appendix B - SCP/HLR Description and Specifications
Appendix C - [Intentionally Omitted]
Appendix D1 - Lucent/Nortel License Agreement - HLR
Appendix D2 - Lucent/Nortel License Agreement - OAM&P
Appendix E - HLR Statement of Work
Appendix F - SCP/HLR Prices
Appendix G - AS/OAM&P Statement of Work
Appendix H - [Intentionally Omitted]
Appendix I - AS/OAM&P Prices
Appendix J - [Intentionally Omitted]
Appendix K - Application Software Products Acceptance Procedures and
Criteria
Appendix L - Application Software Products Maintenance and Support
Services
Appendix M - OTAF Statement of Work
Appendix N - [Intentionally Omitted]
Appendix O - OTAF Prices
Appendix P - OTAF Acceptance Procedures and Criteria
Appendix Q - [Intentionally Omitted]
Appendix R - [Intentionally Omitted]
Appendix S - Actiview Acceptance Procedures and Criteria
Appendix T - Actiview Prices
Appendix U - Actiview Statement of Work
AMENDMENT NO. 1 dated as of February 25, 1997, to the Amended
and Restated Procurement and Services Contract dated as of October 9, 1996,
between Sprint Spectrum Equipment Company, L.P., a Delaware limited partnership
(the "Owner") and Lucent Technologies Inc., a Delaware corporation, the full
successor to the Network Systems Group of AT&T Corp., a New York corporation
(the "Vendor", and together with the Owner, the "Parties").
RECITALS:
WHEREAS, the Parties are parties to a certain Amended and
Restated Procurement and Services Contract dated as of October 9, 1996 as may be
amended, supplemented or modified from time to time (the "Contract") wherein the
Owner agreed to have the Vendor engineer and construct PCS Systems in the System
Areas and the Vendor, itself or through its Subcontractors, agreed to provide
Products and Services to the Owner in connection with the engineering and
construction of PCS Systems in the System Areas pursuant to and in accordance
with the terms of the Contract.
WHEREAS, pursuant to and in accordance with a Consent and
Waiver between the Parties (the "Consent and Waiver") dated as of December 23,
1996, the Parties desire to amend the Contract.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions set forth herein, the Owner and the Vendor hereby agree as follows:
1. Definitions. Unless otherwise defined herein, all capitalized terms
used in this Amendment will have the meaning given to such terms in the
Contract.
2. Agreement. The Parties understand and agree that the terms of Paragraph
2 of the Consent and Waiver are hereby incorporated into and are made a part of
the Contract.
3. Amendment to Subsection 2.7. Subsection 2.7 is hereby amended to add the
following subsection 2.7(c) after subsection 2.7(b):
"(c) Notwithstanding anything contained in subsection
2.6, this subsection 2.7 and/or Exhibit A1 to the contrary, the Vendor
will be required to complete the Work in accordance with the
Specifications as required by each of Milestone 6, Milestone 7 and
Milestone 8 within the time periods between the Milestones (denoted by
"M" on the table below) set forth on the table below. The Guaranteed
Substantial Completion Dates for each of the PCS Systems and PCS
Sub-Systems listed in the following table will not be later than the
dates set forth in the column marked "Guaranteed Substantial Completion
Date".
<TABLE>
<CAPTION>
===========================--------------------------------------------------------------------=====================
PCS System/PCS M5 Latest M6 to M7 Latest M7 to M8 M8
Sub-System M6 date Interval M7 date Interval Guaranteed
Substantial
Completion Date
===========================--------------------------------------------------------------------=====================
<S> <C> <C> <C> <C> <C> <C>
Salt Lake City 10/31/96 12/30/96 0 Days 12/30/96 16 Days 1/15/97
(76 Days)
===========================--------------------------------------------------------------------=====================
Rochester 11/29/96 1/31/97 3 Days 2/3/97 25 Days 2/28/97
(91 Days)
===========================--------------------------------------------------------------------=====================
Denver 12/6/96 2/16/97 2 Days 2/18/97 30 Days 3/20/97
(104 Days)
-------------
===========================--------------------------------------------------------------------=====================
Manhattan 12/19/96 2/27/97 2 Days 3/1/97 30 Days 3/31/97
(102 Days)
-------------
===========================--------------------------------------------------------------------=====================
Bronx/Brooklyn/Queens 1/09/97 3/08/97 2 Days 3/10/97 30 Days 4/9/97
(90 Days)
-------------
===========================--------------------------------------------------------------------=====================
Tucson 2/14/97 4/13/97 2 Days 4/15/97 30 Days 5/15/97
(90 Days)
-------------
===========================--------------------------------------------------------------------=====================
Toledo 2/17/97 4/16/97 2 Days 4/18/97 30 Days 5/18/97
(90 Days)
-------------
===========================--------------------------------------------------------------------=====================
Boston 1/15/97 4/23/97 2 Days 4/25/97 30 Days 5/25/97
(130 Days)
-------------
====================================================================================================================
NH/Maine 1/22/97 4/30/97 2 Days 5/2/97 30 Days 6/1/97
(130 Days)
====================================================================================================================
</TABLE>
Furthermore and notwithstanding anything contained in this Contract to
the contrary, for any PCS System and/or PCS Sub-System (other than any
PCS Systems and/or PCS Sub-Systems listed on the table above) which did
not achieve the requirements of Milestone 5 pursuant to the terms of
the Contract on or before January 15, 1997 (each a "97 System"), the
target permissible interim period between Milestone 5 and Milestone 8
in which the Vendor must complete the Work required for and as a
condition of achieving Substantial Completion in a timely manner in
accordance with the terms of this Contract shall be ninety (90) days;
provided that in certain larger PCS Systems and PCS Sub-Systems such
period may exceed ninety (90) days, as mutually agreed by the Owner and
the Vendor, but in no event will such period exceed a total of one
hundred thirty (130) days. For all such 97 Systems, the applicable
permissible interim periods (including the periods between applicable
Interim Milestones) will be mutually agreed by the Owner and the Vendor
on or before achieving Milestone 5 for each such 97 System. All such
agreements will be reflected in writing, executed by authorized
representatives of both the Owner and the Vendor. For purposes hereof,
the authorized representative of the Vendor is Pat Pomponio and the
authorized representative of the Owner is Keith Paglusch.
4. Amendment to Subsection 15.2. Subsection 15.2(b) is hereby amended to
add the following sentence after the last sentence of 15.2(b):
"Notwithstanding anything contained herein to the contrary, for any of
the five PCS Systems and/or PCS Sub-Systems listed on the table in
subsection 2.7(c) or any 97 System, any Interim Delay Penalties accrued
pursuant to subsection 15.2(a) will be credited back to the Vendor in
the manner described in the immediately preceding sentence to the
extent that (i) the Vendor successfully achieves Substantial Completion
of such PCS System or PCS Sub-System on or before the Guaranteed
Substantial Completion Date (as such date is determined in accordance
with the terms of subsection 2.7(c)) and (ii) the relevant interim
delay does not otherwise materially adversely affect the Owner, such
PCS System or PCS Sub-System and/or the System as a whole."
5. NO OTHER AMENDMENTS. EXCEPT AS EXPRESSLY AMENDED, MODIFIED AND
SUPPLEMENTED HEREBY, THE PROVISIONS OF THE CONTRACT ARE AND WILL REMAIN IN FULL
FORCE AND EFFECT AND NOTHING IN THIS AMENDMENT WILL BE CONSTRUED AS A WAIVER OF
ANY OF THE RIGHTS OR OBLIGATIONS OF THE PARTIES UNDER THE CONTRACT.
6. GOVERNING LAW. THIS AMENDMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARDS TO THE LAWS AND
PRINCIPLES THEREOF WHICH WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
7. Descriptive Headings. Descriptive headings are for convenience only and
will not control or affect the meaning or construction of any provisions of this
Amendment.
8. Counterparts. This Amendment may be executed in any number of identical
counterparts, each of which will constitute an original but all of which when
taken together will constitute but one contract.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be signed by their duly authorized representatives on the date
first above written.
SPRINT SPECTRUM EQUIPMENT
COMPANY, L.P., as the Owner
By: /s/ KEITH PAGLUSCH
Name: Keith Paglusch
Title: Vice President - Engineering &
Operations
LUCENT TECHNOLOGIES INC.,
as the Vendor
By:/s/ WILLIAM K. NELSON
Name: William K. Nelson
Title: Vice President
Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
AMENDMENT NO. 2
Amendment No. 2 dated as of May 8, 1998 (this "Amendment"), to
the Amended and Restated Procurement and Services Contract dated as of October
9, 1996, between Sprint Spectrum Equipment Company, L.P., a Delaware limited
(the "Owner") and Lucent Technologies Inc., a Delaware corporation (the
"Vendor", and together with the Owner, the "Parties).
RECITALS:
WHEREAS, the Parties are parties to a certain Amended and
Restated Procurement and Services Contract dated as of October 9, 1996, as
amended by Amendment No. 1 dated as of February 25, 1997 (as amended, the
"Contract"), wherein the Owner agreed to have the Vendor engineer and construct
PCS Systems and PCS Sub-Systems in the System Areas and the Vendor agreed to
provide Products and Services to the Owner in connection with the engineering
and construction of PCS Systems and PCS Sub-Systems in the System Areas pursuant
to and in accordance with the terms of the Contract; and
WHEREAS, the Parties desire to amend the Contract such that,
among other things, the Owner may purchase Products and Services on or after
January 1, 1998 and that the Vendor shall provide and shall be deemed to have
provided such Products and Services on and after January 1, 1998 on terms and
conditions regarding price, payment and warranties, among others, which may vary
(pursuant to the terms of this Amendment) from those terms and conditions
respecting Products and Services ordered by the Owner prior to January 1, 1998.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions set forth herein, the Owner and the Vendor hereby agree as follows:
1. Definitions.
Unless otherwise defined herein, all capitalized terms used in
this Amendment shall have the meaning set forth for such terms in the Contract.
2. Amendments to Section 1.
(a) Subsection 1.1 of the Contract is hereby amended by adding
the following definitions in the appropriate alphabetic order:
"Additional Products", "Additional Services" and "Additional
Products and Services" means those Products and/or Services,
respectively, which are ordered by the Owner on or after January 1,
1998 pursuant to a Purchase Order.
<PAGE>
"Additional Services Acceptance Certificates" means those
written certificates provided by the Owner to the Vendor evidencing the
Owner's acceptance pursuant to and in accordance with the Testing
Exhibits.
"Additional Services Acceptance Tests" means the collective
reference to the performance and reliability demonstrations and tests
specified in the Testing Exhibits.
"Additional Product Commitment" has the meaning ascribed
thereto in subsection 7.4.
"Approved CIQ" means a Customer Information Questionnaire for
ordered MSC(s), which such Customer Information Questionnaire has been
executed by Authorized Representatives of both Parties.
"Cluster" means at least five (5) System Element Facilities
(with installed System Elements) designated by the Owner within each
PCS System and/or PCS Sub-System, as the case may be, to be Cluster
Optimized by the Vendor.
"Cluster Optimization" means the Optimization to be performed
by the Vendor in each Cluster in accordance with the requirements of
Exhibit B5 and the terms of this Contract.
"Commissioning" means the Work to be performed by the Vendor
pursuant to a Purchase Order in accordance with the requirements of
Exhibit B4 and the terms of this Contract.
"Deliverable(s)" means any Item identified as to be delivered
by the Vendor to the Owner pursuant to the terms of this Contract or
otherwise identified in any Purchase Order made pursuant to the terms
of this Contract an shall at all times include, but not be limited to,
Equipment, Software and Services.
"Designated Switch Site" means with respect to each MSC, the
location designated by the Owner to the Vendor in the applicable
Purchase Order to which the Vendor is required to deliver, install and
Commission such MSC.
"FOB Point" means with respect to BTS and Growth Cabinet
Additional Products, the Vendor's staging or manufacturing facilities
in Columbus, Ohio, Omaha, Nebraska and, with respect to batteries only,
Dallas, Texas, or as otherwise mutually agreed between the Parties in
writing from time to time. With respect to MSC Additional Products (and
associated Equipment and Software), FOB Point means the Owner's
Designated Switch Sites.
"Forecast" has the meaning ascribed thereto in subsection 7.5.
<PAGE>
"Forecast Period" has the meaning ascribed thereto in
subsection 7.5.
"Growth Cabinet(s)" means any make, model or type of Base
Station growth cabinet set forth on Schedule 2A.
"Initial Products", "Initial Services" and "Initial Products
and Services" means the collective reference to, respectively, any
Products, Services, or Products and Services which are not,
respectively, Additional Products, Additional Services, or Additional
Products and Services.
"Integration" means the connection and/or hook-up of the BTS
Products to the MSC Products pursuant to and in accordance with the
requirements of Exhibit B4.
"IOS Milestone Dates" means the collective reference to the
dates specified for each IOS Milestone as set forth in Exhibit G1; each
an "IOS Milestone Date."
"IOS Milestones" means the collective reference to the
interoperability milestones designated as such in Exhibit G1; each an
"IOS Milestone."
"Late Amount" has the meaning ascribed thereto in subsection
6.3.1.
"List Price" whenever used with respect to the Vendor's
pricing means the Vendor's then current PCS Product price lists
published and/or made available by the Vendor to its Customers.
"Local Transportation" means the Vendor's transport of
Additional Products from the Owner's designated warehouses to the
Owner's designated System Element Facilities within fifty (50) air
miles of such warehouse(s) pursuant to the pricing terms and as a part
of Optional Additional Services under Schedule 2A and Schedule 3A. In
no event will Local Transportation include Extraordinary
Transportation.
"MFC Deliverable" means any of the Products or Services listed
on Schedules 2, 2A, 3 and 3A (including any Products and Services added
to any such Schedules in accordance with the terms of this Contract)
and with respect to the Optional Features Software Releases listed on
Schedule 2A, each such Optional Features Software Release will be
deemed a single MFC Deliverable; collectively, the "MFC Deliverables."
"Optimization" means the Work to be performed by the Vendor
pursuant to a Purchase Order in accordance with the requirements of
Exhibit B5 and the terms of this Contract.
"Optional Additional Services" means those Additional
Services with respect to the Local Transportation, Installation,
Integration, Commissioning and/or Optimization
<PAGE>
of Additional Products which may be purchased by the Owner
and, in such case, performed by the Vendor, for BTS and/or Growth
Cabinet Additional Products pursuant to Schedules 2A and 3A; each an
"Optional Additional Service." On Schedules 2A and 3A, the Optional
Additional Services for BTSs are sometimes referred to as "Services
Suite I" and the Optional Additional Services for Growth Cabinets are
sometimes referred to as "Services Suite II." To the extent the Owner
chooses to have the Vendor perform any or all of the Optional
Additional Services, any such Services will be performed by the Vendor
pursuant to and in accordance with the terms of Exhibits B4 and B5.
"Optional Features Software Releases" means the collective
reference to Vendor Software releases 7, 8 and 9, to be provided to the
Owner and installed within the Nationwide Network pursuant to and in
accordance with the terms of Exhibits C, C1 and J and the terms hereof,
each, an "Optional Features Software Release."
"Purchase Order(s)" means those written order(s) delivered by
the Owner to the Vendor pursuant to Section 7 hereof specifying the
type, quantity, delivery dates, prices and "ship to" locations of and
for the furnishing, Commissioning and/or Optimization of Additional
Products and Services on and within the System Element Locations as
specified in such written order(s).
"SprintCom" means SprintCom, Inc., a Kansas corporation.
"SprintCom MOU" means that certain Memorandum of Understanding
between SprintCom and the Vendor with respect to the Vendor's
achievement of IOS V.2 and "IOS V.3" (as such term is defined therein)
made and effective as of May 8, 1998, as the same may be amended,
supplemented or restated from time to time.
"System Optimization" means the Work to be performed by the
Vendor in each PCS System in accordance with the requirements of
Exhibit B5 and the terms of this Contract.
"System Optimization Certificate" means the System
Optimization Acceptance Certificate evidencing the Owner's acceptance
of System Optimization in each PCS System pursuant to and in accordance
with Exhibit B5. A form of System Optimization Certificate is attached
to Exhibit B5.
"System Support Services" means those services provided by the
Vendor pursuant to the terms of this Contract relating to PCS System
design, enhancement and optimization.
"Testing Exhibits" means with respect to Additional Products
and Services, the collective reference to Exhibits B4, B5, C, C1, G1
and G3."
"WIN Software Releases" means all of those Software releases
specified in Exhibits C and C1 with respect to any and all SCP/HLR
Software, SCP/OTAF Software,
<PAGE>
OAM&P and Actiview Software and/or any and all Software
releases or features relating to HLR, OTAF, Actiview, OAM&P, TIMS and
ADDS; each a "WIN Software Release."
(b) Subsection 1.1 is further amended by deleting the definitions
of "Acceptance Certificates," "Acceptance Tests," "Customer," "Force Majeure,"
"Installation," "Nationwide Network," "Net Price," "PCS Products," "Products,"
"Services," "Software," "System Areas", "System Support Services" and "United
States" as such definitions are set forth in the Contract and replacing them,
respectively, in their entirety with the following:
"Acceptance Certificates" means the collective reference to
the Factory Test Certificate, the Initial PCS System Certificate, the
Substantial Completion Certificate, the Final Acceptance Certificate
and with respect to Additional Services, the Additional Services
Acceptance Certificates.
"Acceptance Tests" means the collective reference to the
performance and reliability demonstrations and tests specified in
Exhibits B1, B2, B3, B4, B5, C, G1 and G3 to determine whether the
Products, the Services, any of the PCS Systems, PCS Sub-Systems and/or
the System meet the relevant Specifications and the terms and
conditions of this Contract, and with respect to the Additional
Services, the Additional Services Acceptance Tests.
"Customer" means any PCS customer of the Vendor doing business
in the United States or any PCS customer doing business in the United
States of any of the Vendor's affiliates or subsidiaries.
"Force Majeure" means the following:
(a) Acts of God, epidemic, earthquake, landslide, lightening,
fire, explosion, accident, tornado, drought, flood, hurricane, or
extraordinary weather conditions more severe than those normally and
typically experienced in the affected area constituted by each of the
specified System Areas in which the Vendor is seeking to claim Contract
suspension due to Force Majeure;
(b) Acts of a public enemy, war (declared or undeclared),
blockade, insurrection, riot or civil disturbance, sabotage,
quarantine, or any exercise of the police power by or on behalf of any
public entity;
(c) (i) The valid order, judgment or other act of any federal,
state or local court, administrative agency, Governmental Entity or
authority issued after the Effective Date; (ii) with respect to the
Vendor only, the suspension, termination, interruption, denial or
failure of or delay in renewal or issuance of any Applicable Permit
required by this Contract to be obtained by the Owner; (iii) with
respect to the Owner only, the suspension, termination, interruption,
denial or failure of or delay in renewal or issuance of any Applicable
Permit required by this Contract to be obtained by the Vendor; or (iv)
a change in Applicable Law (including the adoption of a new Applicable
Law); provided
<PAGE>
that no such order, judgment, act, event or change is the
result of the action or inaction of, or breach of this Contract by, the
Party relying thereon;
(d) Strikes, boycotts or lockouts involving the employees of
the Vendor;
(e) A partial or entire delay or failure of utilities; or
transportation embargoes; or
(f) The presence of (i) any Hazardous Waste on or at any
System Element Location which materially interferes with the Work to be
done thereon or otherwise materially endangers the safety of any
personnel at such location; (ii) any unknown historical or
archeological sites which are not shown or indicated in the survey of
any System Element Locations and of which the Vendor could not have
reasonably been expected to be aware; or (iii) any mining or water
recovery activities (other than such activities by the Vendor or its
Subcontractors) at or under any System Element Location after the
Effective Date.
Events of Force Majeure include the failure of a Subcontractor
to furnish labor, services, materials, or equipment in accordance with
its contractual obligations, only if such failure is itself due to an
event of Force Majeure. A Force Majeure does not include any delay in
performance to the extent due to the failure of the Vendor or any
Subcontractor to provide an adequate number of engineers or other
workmen or to manufacture or procure an adequate amount of Equipment,
Software and/or Services.
"Installation" means (i) with respect to Additional Products
that are not being purchased with the Optional Additional Services, the
Owner's activities with respect to the placement of the Additional
Products in and within the relevant System Element Facilities pursuant
to the criteria set forth in Exhibit B4 so that the Vendor may commence
Integration and/or Commissioning on such Products pursuant to and in
accordance with the requirements of Exhibit B4 and (ii) with respect to
Additional Products that are being purchased with such Optional
Additional Services and/or are being purchased as an Optional
Additional Service, the Vendor's activities with respect to the
placement of the Additional Products in and within the relevant System
Element Facilities pursuant to the criteria set forth in Exhibit B4 so
that Commissioning will be completed in accordance with Exhibit B4. The
Vendor sometimes refers to Installation as "Bolt-Down."
"Nationwide Network" means all of the PCS systems and PCS
sub-systems (including, but not limited to, all PCS Systems and/or PCS
Sub-Systems covered hereby) built or to be owned and/or operated by the
Owner or any of its Affiliates in the United States.
"Net Price" means the final price paid by any Person after all
discounts, reductions, rebates, volume discounts or adjustments of any
kind are applied, whether under the original contract of purchase, as
it may be amended, supplemented or otherwise modified from time to
time, or any supplemental separate, or complementary transaction.
<PAGE>
"PCS Products" means the Vendor's PCS Equipment and Software,
as offered from time to time in the Customer Price Guide; provided that
for the purposes of this Contract, PCS Products will always (subject to
subsection 10.1) include at least (i) the SCP/HLRs, (ii) the SCP/HLR
Products, (iii) the AM/HLR (to the extent not already a PCS Product),
(iv) SMS, (v) SCE, (vi) the AS Products, (vii) the OTAF Products,
(viii) the Actiview Products, (ix) the TCUs and/or the ECUs as the case
may be, (x) any and all other products set forth in Schedules 2, 2A, 3
and 3A, (xi) any and all Optional Features Software Releases and WIN
Software Releases and (xii) those other Items listed on the Vendor's
Customer Price Guide as of the Effective Date and as of January 1,
1998. As the context requires and notwithstanding the above, the term
PCS Products includes all Vendor manufactured Products provided to the
Owner in connection with its obligations pursuant to the terms of this
Contract, but excludes Items furnished solely as part of Facilities
Preparation Services not otherwise integral to the operation or
maintenance of the PCS Items set forth on the Customer Price Guide,
including Non-Essential Equipment.
"Products" means the collective reference to the PCS Products,
the Equipment and the Software provided by the Vendor or any
Subcontractor, including without limitation, Initial Products, PCS
Products and Additional Products, pursuant to and in accordance with
the terms of this Contract.
"Services" means the collective reference to all of the
services to be conducted by the Vendor as part of the Work, including
without limitation, Initial Services, Additional Services and the
Optional Additional Services, pursuant to the terms of the Contract
including but not limited to, Installation, Integration, Facilities
Preparation Services, RF Engineering, System Maintenance Support,
System Support Services, Commissioning and Optimization and other
services, performed in accordance with the terms of this Contract
including, but not limited to, the relevant Specifications. Services do
not include Site Acquisition, Network Interconnection or Microwave
Relocation and with respect to Additional Products only, unless
otherwise mutually agreed to by the Parties, Additional Services also
do not include any Installation, Integration, Commissioning, RF
Engineering, Optimization or Civil Work services to be performed by the
Owner with respect to Additional Products.
"Software" means (a) all computer software furnished hereunder
for use with any Equipment including, but not limited to, computer
programs contained on a magnetic or optical storage medium, in a
semiconductor device, or in another memory device or system memory
consisting of (i) hardwired logic instructions which manipulate data in
central processors, control input-output operations, and error
diagnostic and recovery routines, or (ii) instruction sequences in
machine-readable code furnished hereunder that control call processing,
peripheral equipment and administration and maintenance functions, (b)
any Software Enhancements, Software features, Software Upgrades,
<PAGE>
Optional Features Software Releases and WIN Software Releases
furnished by the Vendor to the Owner hereunder, and (c) any
Documentation furnished hereunder for use and maintenance of the
Software; provided that no Source Code versions of Software are
included in the term Software.
"System Areas" means those geographic areas in the United
States (including its possessions and territories) in which the Owner
and/or any of its Affiliates is operating, managing, constructing,
planning to operate, manage or construct or otherwise possessing rights
to operate, manage or construct a PCS system(s) or service(s)."
"System Support Services" means the Services described in
subsection 2.26.
"United States" means the fifty states of the United States of
America, the District of Columbia and each territory or possession of
the United States of America.
(c) Subsection 1.1 is further amended by deleting the following
definitions in their entirety:
"APC"
"Cable Microcell Integrator (CMI)"
"Headend Interface Converter (HIC)"
"Interoperability"
3. Amendments to Section 2.
(a) Subsection 2.1 is hereby amended by making it subsection
2.1(a) and adding the following subsections 2.1(b) and (c) immediately after
subsection 2.1(a):
"(b) Notwithstanding anything contained herein to the
contrary, the Vendor will provide all Additional Products and Services
to the Owner pursuant to Purchase Orders and in accordance with the
requirements of the relevant Specifications, including, but not limited
to, the Vendor's obligation to furnish, design, manufacture, Install,
Integrate, Commission, Optimize and test the Additional Products in and
within the PCS Systems and the PCS Sub-Systems in accordance with the
terms of the Contract and, in particular, the relevant Specifications
and in a manner that otherwise satisfies all conditions of the relevant
Specifications; provided that, respecting the Work to be performed
pursuant to Purchase Orders for Additional Products or Services, the
Vendor will generally (except to the extent otherwise specifically set
forth in this Contract or otherwise agreed to by the Parties) not be
responsible for Site Acquisition, Civil Work, RF Engineering, Microwave
Relocation or Network Interconnection, and further, the Vendor will not
be responsible for any Installation, Integration, Commissioning or
Optimization which upon the Owner's
<PAGE>
choice not to purchase Optional Additional Services from the
Vendor is being performed by the Owner.
(c) To the extent any action, inaction or obligation of the
Vendor pursuant to the terms of this Contract is a condition to or
requirement of the fulfillment achievement and/or performance of any
other action, inaction or obligation of the Vendor (including, but not
limited to, any IOS Milestone), the failure or inability of the Vendor
to achieve, fulfill or otherwise perform such prior action, inaction or
obligation will in no way, without the express prior written consent of
the Owner pursuant to the terms of this Contract, modify, waive, or in
any way limit the Vendor's obligation to continue to use its best
efforts to achieve, fulfill and/or perform such prior action, inaction
or obligation and continue to do all such other Work necessary to
achieve, fulfill and/or perform all such succeeding actions, in actions
and/or obligations."
(b) Subsection 2.2 is hereby amended by deleting subsection
2.2(a) in its entirety and renaming subsections 2.2(b) and 2.2(c), respectively,
as subsections 2.2(a) and 2.2(b).
(c) Subsection 2.6 is hereby amended by adding the following
subsections 2.6(e), (f), (g) and (h) immediately after subsection 2.6(d):
"(e) Notwithstanding anything contained herein to the
contrary, with respect to each System Element Location for which the
Owner has ordered Additional Products pursuant to the terms of this
Contract, the Vendor must complete Installation and/or Integration and
Commissioning (in each case, to the extent applicable) of such
Additional Products within the time frames set forth in Exhibits B4 and
B5 and pursuant to the requirements and criteria set forth in Exhibits
B4 and B5 and the relevant Specifications.
(f) The Vendor must complete Cluster Optimization (to the
extent applicable) for each designated Cluster within each PCS System
within the time frames set forth in Exhibit B5 and pursuant to the
requirements and criteria set forth in Exhibit B5. The Vendor must
complete System Optimization (to the extent applicable) for each PCS
System within the time frames set forth in Exhibit B5 and pursuant to
the requirements and criteria set forth in Exhibit B5 and the relevant
Specifications.
(g) Notwithstanding anything contained herein to the contrary,
the Vendor will engineer, furnish, Commission and Install, Integrate
and Optimize the MSC Additional Products forecasted and ordered by the
Owner at and in the Designated Switch Sites pursuant to and in
accordance with the terms of Exhibit B4 and the relevant
Specifications.
(h) The Vendor will engineer, furnish, Install, Integrate,
Commission and Optimize (in each case, to the extent applicable) the
Additional Products in each of the PCS Systems so as to cause no
unauthorized interference with or obstruction to lands and
thoroughfares or rights of way on or near which the Work may be
performed. The Vendor must use due care and exercise every reasonable
safeguard to avoid damage to
<PAGE>
existing facilities, and if repairs or new construction are
required in order to replace facilities damaged by the Vendor due to
its carelessness, negligence or willful misconduct, such repairs or new
construction will be at the Vendor's sole cost and expense."
(d) Subsection 2.9 is hereby amended by adding the following subsections
2.9(h) and (i) immediately after subsection 2.9(g):
"(h) The Vendor recognizes and agrees that the timely
achievement and commercial implementation within the Nationwide Network
of the IOS Milestones is extremely important to the Owner and
fundamental to the Owner's business objectives. To that end, the Vendor
will achieve each of the IOS Milestones on or before each of the IOS
Milestone Dates pursuant to and in accordance with the terms of
Exhibits G1, G2 and G3.
(i) The Vendor recognizes and agrees that the achievement and
commercial implementation within the Nationwide Network of an
inter-vendor packet based interoperability standard based on IS-634
Rev. A and any industry and/or Owner specific additions or
modifications thereto is extremely important to the Owner and
fundamental to the Owner's business objectives. To that end, the Owner
and the Vendor understand and agree that the Vendor is committed to
achieving "IOS V.3" (as such term is defined in the SprintCom MOU)
pursuant to Sections B.3 and B.4 of the SprintCom MOU."
(e) Section 2.15 is hereby amended by adding the following sentence at the
end of such subsection:
"Notwithstanding anything contained herein to the contrary,
with respect to BTS and Growth Cabinet Additional Products the Owner
will be responsible for all transportation costs associated with
transporting such BTS and Growth Cabinet Additional Products from the
applicable FOB Points to the appropriate System Element Facilities;
provided that the Vendor will be responsible for all transportation
costs associated with transporting the MSC Additional Products to the
appropriate Designated Switch Sites and all Local Transportation.
(f) Subsection 2.20 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 2.20:
"2.20 Operating Manuals. The Vendor will provide the Owner one
(1) set of Operating Manuals with each Additional Product shipped to
the Owner. In addition, the Vendor will, at its sole cost and expense,
provide the Owner with six (6) sets of updated Operating Manuals by
July 1, 1998. The Operating Manuals will be prepared in accordance with
the relevant Specifications and in sufficient detail to accurately
represent the Products and all of their material components as
constructed and will recommend procedures for operation. Operating
Manuals with up to date drawings, specifications and design sheets will
be available for the Training as set forth in subsection 2.23. All
<PAGE>
Operating Manuals will be provided in CD-ROM format (other
than certain engineering drawings that are not practical to place on
CD-ROM format). The Owner has the right and license to print, copy and
distribute such materials as deemed necessary so long as any such
distribution complies with the restrictions set forth in subsection
27.19."
(g) Subsection 2.21 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 2.21:
"2.21 Maintenance and Instruction Manuals. The Vendor, at its
sole cost and expense during the applicable Warranty Periods, will
provide the Owner (i) one (1) set of Maintenance and Instruction
Manuals with each MSC Additional Product shipped to the Owner and (ii)
one set of Maintenance and Instruction Manuals with every twenty-five
(25) BTS Additional Products in each PCS System or PCS Sub-System. In
addition, the Vendor, at its sole cost and expense, must provide the
Owner with six (6) sets of the updated Maintenance and Instruction
Manuals by July 1, 1998. The Maintenance and Instruction Manuals will
be prepared in accordance with the relevant Specifications and in
sufficient detail to accurately represent the Products and all of their
material components as constructed and will set forth procedures for
inspection and maintenance. Maintenance and Instruction Manuals with
up-to-date drawings, specifications and design sheets will be available
for the Training set forth in subsection 2.23. The Maintenance and
Instruction Manuals must include the volumes compiled by the Vendor
containing all as-built Subcontractor furnished product data. All
Maintenance and Instruction Manuals will be provided in CD-ROM format
(other than certain engineering drawings that are not practical to
place on CD-Rom format). The Owner has the right and license to print,
copy and distribute such materials as deemed necessary so long as any
such distribution complies with the restrictions set forth in
subsection 27.19."
(h) Subsection 2.40 is hereby amended by deleting it in its
entirety.
4. Amendments to Section 3.
(a) Subsection 3.2 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 3.2:
"3.2 Purchase Orders from Initial Affiliates. During the Term
of this Contract, the Owner will have the right, but not the
obligation, to require the Vendor to fulfill (and the Vendor will so
fulfill) signed Purchase Orders for forecasted amounts (as set forth in
subsection 7.5) of Products and/or Services received from any Initial
Affiliate designated by the Owner pursuant to and in accordance with
all of the same prices and all of the same terms and conditions as set
forth in this Contract; provided that such Products and/or Services
(other than wireless/wireline MSCs and associated Equipment and
Software) will be solely for use within or related to the Nationwide
Network and/or any part thereof. Any Initial Affiliate(s) hereunder
will have the right, in lieu of ordering
<PAGE>
directly hereunder pursuant to the preceding sentence, to
enter into a separate contract with the Vendor pursuant to and in
accordance with clause (ii) of subsection 3.3 below."
(b) Subsection 3.3 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 3.3:
"3.3 Agreements with Additional Affiliates. During the Term of
this Contract, the Owner will have the right, but not the obligation,
to require that the Vendor either: (i) fulfill (and the Vendor will so
fulfill) signed Purchase Orders for forecasted amounts of Products
and/or Services received from any Additional Affiliate designated by
the Owner for the supply of any Products and/or Services solely for use
within or related to the Nationwide Network and/or any part thereof
(except in the case of any Additional Affiliate wireless/wireline MSCs
and associated Equipment and Software which may be used outside of
and/or not in connection with the Nationwide Network) at the same price
and other terms and conditions of this Contract, provided that
Additional Affiliates will not be entitled to only the rights or
remedies under Section 15 of this Contract or the rights of this
Section 3, subsections 2.11.1, 11.6 and 11.7 of this Contract (it is
expressly understood by the Vendor that the list of exclusions in this
sub-clause (i) is an exclusive list of those rights and remedies under
this Contract that are not applicable to Additional Affiliates'
Purchase Orders and that all other terms and conditions of this
Contract shall apply to such Additional Affiliates' Purchase Orders);
or (ii) enter into separate agreements with any Additional Affiliate
designated by the Owner (an "Additional Affiliate Agreement") for the
supply of Products and/or Services as are then available to the Owner
pursuant to the terms of this Contract in which case the Vendor must
enter into good faith negotiations for the establishment of such
Additional Affiliate Agreements with any such Additional Affiliate
promptly upon the designation of such Additional Affiliate by the Owner
and upon notice to the Vendor that such Additional Affiliate desires to
enter into an Additional Affiliate Agreement. Any Additional Affiliate
that enters into an Additional Affiliate Agreement with the Vendor will
have the right to choose among the Products and Services offered to the
Owner under this Contract solely for use within the Nationwide
Network."
(c) Subsection 3.4 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 3.4:
"3.4 Affiliate Rights and Obligations. Notwithstanding
anything contained herein to the contrary, Affiliates will not be
deemed third party beneficiaries to this Contract or otherwise have any
rights hereunder. Only the Owner may designate a Person as an Affiliate
in accordance with the terms of this Section 3 and (except with respect
to specific Affiliate Purchase Orders or Additional Affiliate Agreement
made or entered into by an Affiliate pursuant to and in accordance with
the terms of this Section 3) only the Owner has the right and/or the
ability to enforce any rights hereunder against the Vendor. All
Affiliate Purchase Orders shall be made and fulfilled pursuant to and
in accordance with the terms of this Contract. ONLY THE AFFILIATE OF
THE OWNER
<PAGE>
ISSUING A SPECIFIC PURCHASE ORDER OR ENTERING INTO A SEPARATE
CONTRACT FOR THE SUPPLY OF PRODUCTS AND SERVICES UNDER THIS CONTRACT
WILL INCUR ANY OBLIGATION OR LIABILITY TO THE VENDOR FOR ANY CLAIM
WHICH MAY ARISE FROM OR RELATE TO THAT PURCHASE ORDER OR CONTRACT, AS
THE CASE MAY BE."
5. Amendments to Section 6.
(a) Subsection 6.1 is hereby amended by deleting it in its
entirety (other than the one time credit provisions set forth in the second and
third sentences of such subsection) and replacing it with the following
subsection 6.1:
"6.1 Prices. The prices for the Initial Products and Services
to be provided pursuant to this Contract are as set forth on Schedule 2
and Schedule 3, subject to the price variation provisions contained on
Schedule 2. The prices for the Additional Products and Services to be
provided pursuant to this Contract are as set forth on Schedule 2A and
Schedule 3A, subject to the price variation provisions contained
therein. Unless otherwise expressly agreed by the Parties in writing,
in no event will the Vendor invoice the Owner nor will the Owner (or
its Affiliates) be required to pay any price for any Product or Service
which is higher than the price or prices for such Products and Services
as set forth in Schedules 2, 2A, 3 or 3A, as the case may be. Prices
for the Work not set forth therein, if not otherwise set forth in this
Contract, will be no greater than the Vendor's best List Prices then in
effect and/or offered to any other Customer at the time of ordering by
the Owner and at discounts otherwise provided to the Owner pursuant to
the terms of this Contract. Prices for all Products set forth on
Schedule 2A include the delivery by the Vendor to the FOB Point(s)
and/or the Designated Switch Sites, as the case may be."
(b) Subsection 6.3 is hereby amended by deleting subsection 6.3.1
in its entirety and replacing it with the following subsection 6.3.1, and
further amended by deleting subsections 6.3.2, 6.3.3, 6.3.4 and 6.3.5 in their
entirety (provided that for SCP/HLR Products, AS Products, OTAF Products and
Actiview Products that otherwise constitute Initial Products, the payment terms
with respect to such Products as set forth in such subsections 6.3.2, 6.3.3,
6.3.4 and 6.3.5, respectively, shall remain in full force and effect):
"6.3.1 Additional Products and Services. (a) Notwithstanding
anything contained in this subsection 6.3 to the contrary, invoices for
Additional Products and Services may be submitted to the Owner only
after shipment of an Additional Product or upon completion of a
performance of an Additional Service. With respect to Additional
Products and Services only, the Owner agrees to pay to the Vendor a
late charge for undisputed amounts actually due and not paid when due
in accordance with the terms of this Contract (a "Late Amount") equal
to the lesser of one percent (1%) per month, pro rata, of the Late
Amount, or the maximum amount permitted by Applicable Law; provided
that any such late payment penalties will not accrue until amounts owed
by the
<PAGE>
Owner to the Vendor are actually late and outstanding and will
stop accruing immediately upon the Owner's payment of such Late Amount.
(b) Notwithstanding anything contained in subsection 6.3 to
the contrary, invoices for Additional Products ordered by the Owner
pursuant to the terms of this Contract are payable in full within
thirty (30) days after the later of delivery of such Additional
Products to the appropriate FOB Point or Designated Switch Site, as the
case may be (pursuant to the terms of the applicable Purchase Order)
and receipt of the applicable invoice by the Owner; provided that with
respect to Optional Features Software Releases and WIN Software
Releases, invoices for any such releases are payable within thirty (30)
days after Owner acceptance of any such releases pursuant to subsection
12.3.1. Notwithstanding anything contained herein to the contrary,
payment for Optional Features Software Release 7 will not be due and
payable until the later of thirty (30) days after Owner acceptance
pursuant to subsection 12.3.1 and January 15, 1999.
(c) Notwithstanding anything contained in this subsection 6.3
to the contrary, the Owner will only be obligated to make payments for
Additional Service(s) rendered by the Vendor pursuant to the terms of
this Contract within thirty (30) days of completion of any such
Additional Service(s) pursuant to and in accordance with the terms of
this Contract."
6. Amendments to Section 7.
Section 7 is hereby amended by adding the following subsections
7.4, 7.5, 7.6, 7.7, 7.8 and 7.9 immediately after subsection 7.3:
"7.4 Additional Products and Services Commitment. Subject to and
conditioned upon the delivery by the Vendor of Additional Products in
accordance with the relevant Specifications, the Owner, together with
any of its Affiliates, will order from and after January 1, 1998 in
aggregate at least three thousand two hundred fifty (3,250) Additional
Products (consisting of any mix of any models of any BTSs and/or any
models of any Growth Cabinets, as the Owner (or any such Affiliate,
as the case may be) shall, in its sole and absolute discretion, see
fit) (the "Additional Product Commitment") by a date no later than
January 1, 2001; provided that the Owner, together with any of its
Affiliates, will order from and after January 1, 1998 a minimum of one
thousand two hundred fifty (1,250)BTSs as part of its fulfillment of
the total Additional Product Commitment. With respect to Additional
Products ordered by the Owner and/or any of its Affiliates as part of
the Additional Product Commitment, the Owner, together with any of its
Affiliates, will order the packaged BTS Optional Additional Services
for at least seven hundred fifty (750) BTS Additional Products as part
of the Additional Product Commitment. Any and all Additional Products
and Services ordered on or after January 1, 1998 by the Owner and/or
any Affiliate shall be aggregated for the purposes of determining what
portion of the Additional Product Commitment has been fulfilled
pursuant to the terms of this subsection 7.4.
<PAGE>
7.5 Forecasts of Additional Products and Services. On May 1,
1998 and on the first of each month thereafter throughout the Term, the
Owner will deliver to the Vendor written forecasts (a "Forecast")
specifying its best estimate of the quantity of each type of Additional
Products and Services that the Owner and its Affiliates expects to
purchase on a month to month basis during the twelve (12) months
following the date of such Forecast (a "Forecast Period"). The
Forecasts will be in a format mutually acceptable to the Parties;
provided that the form of the first Forecast as set forth in Schedule
10 will at all times be deemed a form acceptable to both Parties.
7.6 Purchase Orders. (a) In order to be effective, all orders
by the Owner for Additional Products and Services will be made by the
Owner via Purchase Orders pursuant to the process described in Exhibit
K, which such Exhibit K may be amended from time to time by the mutual
agreement of the Parties (provided that fully executed Change Orders
approved by the Owner prior to May 8, 1998 will remain valid); provided
that with respect to BTS(s), Growth Cabinets and all associated
Equipment and Software the Vendor's delivery to the FOB Point will be
no more than seventy five (75) days after the date of receipt of such
Purchase Order, unless the Purchase Order as submitted by the Owner
specifies a longer period. Purchase Orders for MSC(s) will specify the
type and quantity of MSC(s) to be delivered by the Vendor to the
Designated Switch Site(s) and will be accompanied by an Approved
CIQ(s); provided that, notwithstanding the Vendor's failure to accept,
approve or return the applicable CIQ, the Vendor's delivery to such
Designated Switch Sites will be no more than one hundred five (105)
days from the date of receipt of the applicable Purchase Order for such
MSC(s). Each Purchase Order will be submitted to the Vendor at Lucent
Technologies Inc., Attention: David Widergren, 22 Tech Parkway, Suite
200, Norcross, Georgia 30092; Telephone: (770) 613-8060; Telecopy:
(770) 613-8068, or any other designated location of the Vendor in the
continental United States designated to the Owner in writing by the
Vendor from time to time, and will be subject to the acknowledgement by
the Vendor in writing to the designated authorized representative of
the Owner within five (5) Business Days of receipt of Purchase Orders.
Failure of the Vendor to acknowledge to the Owner in writing receipt of
any Purchase Order shall be deemed to render any such Purchase Order
acknowledged. To the extent that the Vendor is actually aware that any
Purchase Order in any way contradicts or is not otherwise in
conformance with the terms of this Contract, the Vendor agrees to
promptly notify the Owner of any such contradiction or non-conformance
as soon as possible upon becoming actually aware of such contradiction
or non-conformance so that the Owner will have a reasonable opportunity
to correct any such contradiction or non-conformance and, furthermore,
to the extent reasonable under the circumstances the Vendor will
endeavor to fulfill any such non-conforming Purchase Order ignoring any
such non-conformity unless the Owner, after notification from the
Vendor, will have expressly refused to accept the fulfillment of such
Purchase Order with any such correcting modification.
(b) Except with respect to the first Forecast (and the next
succeeding Forecast immediately following the first Forecast), in no
event will the Vendor be required to
<PAGE>
accept an amount in any given month of a Forecast which is
greater than one hundred -fifty percent (150%) of the average amount
forecasted by the Owner for the three months immediately preceding the
subject month.
(c) The Vendor will reasonably cooperate with the Owner,
and/or any Person designated by the Owner for such purpose, (i) to
utilize UPC stock control numbering and other bar-coding requirements
relating to inventory processes and systems, and (ii) to develop
processes and systems that will maximize delivery logistics. Metric
targets will be defined by the mutual good faith agreement of the
Parties for acceptable stock out percentages, delivery times and total
logistics costs.
(d) Unless the Parties otherwise expressly agree in writing,
each Purchase Order will be deemed to incorporate by reference all of
the terms and conditions of this Contract. Should the terms of any
Purchase Order conflict with the terms of this Contract, the terms of
this Contract will govern unless the Parties expressly agree in writing
(signed by a duly authorized representative of both Parties) to the
contrary. This Contract will continue to apply to a Purchase Order
pursuant to the terms of this Contract until all obligations herein and
thereunder are performed.
7.7 Cancellation of Additional Products and Services. During
the Term, the Owner will have the right, but not the obligation, at any
time to cancel, in whole or in part, any Purchase Order respecting
Additional Products and Services made pursuant to the terms of this
Contract upon advance written notice to the Vendor. In the event of a
cancellation permitted hereunder, the Owner will pay to the Vendor
order cancellation charges in accordance with, and pursuant to, the
terms of Schedule 11A.
7.8 Delivery of Additional Products. All deliveries of
Additional Products will be made to the FOB Point and/or the Designated
Switch Site, as the case may be, at the Vendor's sole cost and expense.
The Owner may request that the Vendor provide more extensive logistical
and distribution capabilities to the Owner, which capabilities the
Vendor will use its best commercial efforts to provide. If the Vendor
agrees to provide such services, there may be, depending on the level
and scope of such services, additional charges to the Owner on a per
Additional Product basis. Any such charges will be mutually agreed upon
by the Parties during negotiations between the Parties on the provision
of any such additional logistical and distribution services beyond
those outlined in this subsection.
7.9 Purchase Order Deferral. The Owner may defer (without
payment or penalty of any kind whatsoever) upon written notice provided
to the Vendor at least thirty (30) days prior to the actual shipment
therefor, all of or any portion of any then outstanding Purchase Order
(on a one time basis only with respect to each Purchase Order) for a
period not less than thirty (30) days and not in excess of sixty (60)
days beyond the date originally scheduled for the delivery thereof by
the Vendor; provided that in no event will
<PAGE>
the Owner be entitled hereunder to defer shipment of more than
fifty (50) BTSs and/or Growth Cabinets, as the case may be, at any one
time.
7. Amendments to Section 8.
Subsection 8.1 is hereby amended by making it 8.1(a) and by
adding the following as 8.1(b) immediately thereafter:
"(b) The Vendor will Install and Integrate those BTS and
Growth Cabinet Additional Products for which Optional Additional
Services are ordered by the Owner, pursuant to the requirements of
Exhibit B4. The Owner will be responsible for the Installation and
Integration of all other BTS and Growth Cabinet Additional Products for
which such Optional Additional Services are not ordered by the Owner.
The Vendor will be responsible for and will perform the full
Installation and Integration of MSC Additional Products in accordance
with Exhibit B4."
8. Amendments to Section 9.
(a) Subsection 9.1 is hereby amended by making it subsection
9.1(a) and adding the following subsection 9.1(b) immediately thereafter:
"(b) Notwithstanding anything contained in subsection 9.1(a)
above to the contrary, the Vendor must carry out the Additional
Services Acceptance Tests on Additional Products and Services as
specified in the Testing Exhibits."
(b) Subsection 9.2 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 9.2:
"9.2 Costs and Expenses. The costs and expenses of Acceptance
Tests will be borne by the Vendor, and the Owner will not be charged or
invoiced for such costs and expenses. If the Acceptance Tests performed
by the Vendor on each Product and Service are not satisfied in
accordance with the relevant requirements of Exhibit B3, Exhibit F
and/or the Testing Exhibits, as the case may be, or are otherwise
inconclusive in the reasonable judgment of the Owner, the Owner will
have the right to order further Acceptance Tests at the sole cost and
expense of the Vendor."
9. Amendments to Section 12.
(a) Subsection 12.1 is hereby amended by making it subsection
12.1(a) and adding the following subsection 12.1(b) immediately after subsection
12.1(a):
"(b) Notwithstanding anything contained in subsection 12.1(a) to
the contrary, the Vendor understands and agrees that the Software
release management requirements set forth in Exhibit J are
material to the operation of the System and to the Owner's
business. The Vendor will provide all Software Upgrades, Software
Enhancements and
<PAGE>
Software Combined Releases pursuant to and in accordance with
the requirements set forth in Exhibits C, C1 and J. Without in any way
limiting the foregoing, Software Upgrades must be provided to the Owner
by the Vendor at no charge (other than the Owner's payment of the
Annual Release Maintenance Fees pursuant to subsection 12.1(a)) to the
Owner for the entire Term of this Contract. In the event the Vendor at
any time issues a Software Combined Release to such Software, the
Software Combined Release will be provided at the prices for Software
features set forth on Schedule 2A. The Vendor will at all times take
all reasonable measures to ensure that the Products and Services will
not introduce or release any virus or other software contaminant into
any part of the Nationwide Network."
(b) Subsection 12.3 is hereby amended by deleting it in its
entirety and replacing it with the following subsections 12.3(a) and (b):
"12.3 Software Installation, Testing and Maintenance. (a) The
installation and testing of the Software associated with Initial
Products by the Vendor and the acceptance thereof by the Owner
will be performed in accordance with the criteria set forth in
Exhibit B3.
(b) Subject to clause (c) below and subsection 12.3.1, the
installation and testing of the Software associated with Additional
Products by the Vendor and the acceptance thereof by the Owner will be
performed in accordance with the criteria of the relevant
Specifications including, but not limited to, the requirements set
forth in Exhibits B3, B4, C, C1 and J.
(c) Notwithstanding anything contained herein to the contrary,
the Optional Features Software Releases and the WIN Software Releases
will, to the extent applicable, conform to the requirements set forth
in Exhibits C and C1. The installation and testing of the Optional
Features Software Releases and the WIN Software Releases will be
performed by the Vendor in accordance with the requirements set forth
in Exhibits C, C1 and J. Acceptance of each Optional Features Software
Release and each WIN Software Release by the Owner will be subject to
the terms of subsection 12.3.1."
(c) Section 12 is hereby further amended by adding the following
subsection 12.3.1 immediately after subsection 12.3:
"12.3.1 Optional Features Software Releases and WIN Software
Releases Acceptance. (a) The Owner and the Vendor agree that acceptance
testing for each Optional Features Software Release and/or WIN Software
Release, as the case may be, will commence no later than ten (10)
Business Days after the Vendor's delivery of such Optional Features
Software Release or WIN Software Release, as the case may be, to the
Owner's Test-bed Laboratory in accordance with Exhibit C and/or C1. The
Vendor will install all such Optional Features Releases and WIN
Software Releases into the Owner's Test-Bed Laboratory on the dates set
forth in Exhibit C and/or C1 for each such Optional
<PAGE>
Features Software Release and WIN Software Release, as
applicable. The period for acceptance testing pursuant to this
subsection 12.3.1 will run for no longer than the thirty (30) day
period after commencement of acceptance testing. The Owner will accept
or reject each such Optional Features Software Release or WIN Software
Release, as the case may be, within such thirty (30) day period unless
the Parties mutually agree that the Optional Features Software Release
or WIN Software Release, as the case may be, has met the acceptance
tests prior thereto. If the Owner does not provide a notice of
rejection, then the Optional Features Software Release or the WIN
Software Release, as the case may be, will be deemed to have been
accepted at the end of the thirty (30) day acceptance period; provided
that any such acceptance will in no way limit the Vendor's warranty or
any other obligations under the Contract. If prior to Owner acceptance,
the Owner notifies the Vendor of a Defect or Deficiency in the Optional
Features Software Release or the WIN Software Release, as the case may
be, then the thirty (30) day acceptance period will be extended
day-for-day until the Vendor has corrected such Defect or Deficiency.
(b) Minor defects and deficiencies not affecting the
operational use of any part of such Optional Features Software Release
or WIN Software Release, as the case may be, shall not give rise to
withholding acceptance, provided that the Vendor undertakes to remedy
such defects and shortcomings as soon as reasonably possible."
(d) Subsection 12.4 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 12.4:
"12.4 Software Fixes. In the event that any Software Upgrade,
Software Enhancement or Software Combined Release supplied by the
Vendor during the Term of this Contract has the effect of preventing
the System and/or any PCS System and/or any PCS Sub-System, as the case
may be, or any part thereof from satisfying, or performing in
accordance with the Specifications, the System Standards and/or Exhibit
F or otherwise adversely affects the functionality or features of the
System, any PCS System, any PCS Sub-System or any part thereof, then
the Vendor will promptly retrofit or take such other corrective action
(including the Installation of any additional Equipment, at the
Vendor's sole cost and expense) as may be necessary to assure that the
System, any such PCS System, any such PCS Sub-System or any such
affected part thereof, as modified to include each such Software
Upgrade, Software Enhancement or Software Combined Release, will
satisfy, and perform in accordance with, the Specifications, the System
Standards and/or Exhibit F and restore all pre-existing functionality
and features, in each case without any cost or expense to the Owner
(other than payment of the applicable Annual Release Maintenance Fees
pursuant to the terms of this Contract). Notwithstanding anything
contained in this subsection 12.4 to the contrary, the Owner will be
responsible for the cost of any additional Equipment required to
accommodate additional capacity, memory or processing requirements
necessitated by any new Software feature contained in any such Software
Enhancement or Software Combined Release."
<PAGE>
10. Amendments to Section 13.
Subsection 13.3 is hereby amended by making it subsection 13.3(a)
and adding the following subsection 13.3(b) thereafter:
"(b) Notwithstanding anything contained in subsection 13.3(a)
above, the testing of the Equipment associated with the Additional
Products by the Vendor and the acceptance thereof by the Owner must be
performed in accordance with Exhibit B4, Exhibit D and the relevant
Specifications."
11. Amendments to Section 15.
Section 15 is hereby amended by adding the following subsection 15.11
immediately after subsection 15.10:
"15.11 Additional Products and Services Delay. (a) Failure of the
Vendor to deliver the Additional Products subject to a Purchase Order
on or before the date scheduled therefor pursuant to the terms of this
Contract and/or the relevant Purchase Order will result in the Vendor
owing the Owner an amount in purchase credits equal to [ ] of the
value of the delayed portion of any such Purchase Order divided by
thirty (30) days per day commencing on the date originally scheduled
for such delivery and continuing for a period of thirty (30) days for
a maximum amount of [ ] of the value of such late Purchase Order.
Notwithstanding anything herein to the contrary, on the thirtieth day
after the original date scheduled for the delivery of any such late
portion of any such Purchase Order, the Owner will be entitled, in its
sole and absolute discretion, to cancel any such late portion of any
Purchase Order without payment or penalty of any kind. If the Owner
chooses not to so cancel such late portion of such Purchase Order, the
Vendor will, at its sole cost and expense, ship the affected
Additional Products to the Owner's designated location by same day or
overnight shipping or by any other expedited means reasonably
acceptable to the Owner.
(b) Failure of the Vendor to properly and timely Commission
the Additional Products subject to a Purchase Order pursuant to the
requirements of Exhibit B4 will result in the Vendor being obligated
to pay in purchase credits to the Owner an amount equal to [ ] of the
value of the late Commissioning divided by thirty (30) days per day
for a period not in excess of thirty (30) days for failure of the
Vendor to complete such Commissioning on the date originally scheduled
therefor. Notwithstanding the above, in no event will the Vendor be
obligated to incur late fees under this subsection 15.11(b)) for late
Commissioning with respect to Purchase Orders that have been deferred
by the Owner pursuant to the terms of subsection 7.9.
(c) Failure of the Vendor to properly and timely Optimize the
Additional Products subject to a Purchase Order pursuant to the
requirements of Exhibit B5 will result in the Vendor being obligated
to pay in purchase credits to the Owner an amount equal to [ ] of the
value of the late Optimization divided by thirty (30)
<PAGE>
days per day for a period not in excess of thirty (30) days
for failure of the Vendor to complete such Optimization on the date
originally scheduled therefor. Notwithstanding the above, in no event
will the Vendor be obligated to pay late fees under this subsection
15.11(c) with respect to Purchase Orders that have been deferred by the
Owner pursuant to the terms of subsection 7.9.
(d) Except as otherwise provided in this subsection 15.11,
late fees payable under or pursuant to subsection 15.11 will be accrued
during the applicable cure periods, if any, and offset against payments
otherwise due to the Vendor. The Vendor will not be liable for any late
fees pursuant to this Section 15 for a Vendor delay caused directly and
solely by (i) a Force Majeure event pursuant to Section 16 or (ii) the
direct and explicit act or omission of the Owner, its agents,
subcontractors or any other vendor."
12. Amendments to Section 17.
(a) Subsections 17.1(a) and (b) are hereby amended by deleting
them in their entirety and replacing them with the following subsection 17.1:
"17.1 Product Warranty. The Vendor warrants that, for a period
which is the greater of (i) two (2) years from and after September 1,
1998 and (ii) two (2) years from and after the date of delivery of such
Products to the applicable FOB Point or the Designated Switch Site, as
the case may be (the "Product Warranty Period"), all Products and the
Installation and Integration thereof within such PCS System or PCS
Sub-System, as the case may be, will materially conform with and
perform the functions set forth in the relevant Specifications and the
relevant performance criteria set forth in Exhibits C, C1 and D, to the
extent applicable, and will be free from Defects and Deficiencies in
material or workmanship which impair service to subscribers, system
performance, billing, administration and/or maintenance. In the case of
Software, the Product Warranty Period applicable to any such Software
will be automatically extended for an additional one (1) year upon, and
simultaneous with, any Software Upgrade pursuant to the terms of
Section 12. The Vendor will assign to the Owner all outstanding
Subcontractor warranties attributable to Non-Essential Equipment at
such time that the Vendor's warranty on such Non-Essential Equipment
pursuant to this subsection 17.1 expires pursuant to and in accordance
with the Product Warranty Period applicable to such Item of
Non-Essential Equipment. The Warranty Period for a PCS Product or part
thereof repaired or provided as a replacement under this Product
warranty is six (6) months or the unexpired term of the new Product
Warranty Period applicable to the repaired or replaced PCS Product or
part, whichever is longer."
(b) Subsection 17.2 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 17.2:
"17.2 Services Warranty (a) The Vendor warrants that, for a
period of two (2) years commencing on the date of the Final Acceptance
of the applicable PCS System or
<PAGE>
PCS Sub-System, as the case may be (the "RF Services Warranty
Period"), the Final Site Count within and the Final RF Design
applicable to such PCS System or PCS Sub-System, as the case may be,
will be accurate based upon the environmental circumstances in such PCS
System or PCS Sub-System, as the case may be, as they existed at the
time of the Final Acceptance of such PCS System or PCS Sub-System, as
the case may be, provided that the projections of subscriber growth,
traffic and other predictive data, including all applicable standards
as identified in Exhibits B1, D and H, upon which the Final Site Count
and Final RF Design have been determined, have not been materially
exceeded or the applicable and relevant industry standards have not
materially changed; and provided further that in no event will the RF
Engineering warranty pursuant to this subsection 17.2(a) cover or
warrant items or performance otherwise covered or warranted pursuant to
subsection 17.3 below.
(b) The Vendor warrants that, for a period which is the
greater of (i) two (2) years from and after September 1, 1998 and (ii)
two (2) years from and after the Specification compliant completion of
any such Facilities Preparation Services (the "Facilities Preparation
Services Warranty Period" and collectively with the RF Services
Warranty Period and all other Service warranty periods, the "Services
Warranty Periods"), such Facilities Preparation Services will be (A)
operational in accordance with the relevant Specifications, (B) in
compliance with all material Applicable Laws and material Applicable
Permits in effect at the time of the completion of such Facilities
Preparation Services in such PCS System or PCS Sub-System, as the case
may be, and (C) free from Defects or Deficiencies.
(c) Notwithstanding anything contained herein to the contrary,
the Vendor warrants that, for a period which is the greater of (i) two
(2) years from and after September 1, 1998 and (ii) two (2) years from
and after the completion of each other Service provided by the Vendor
hereunder, such Service will be (A) operational in accordance with the
relevant Specifications, (B) in compliance with all material Applicable
Laws and material Applicable Permits in effect at the time of the
completion of such Additional Service in such PCS System or PCS
Sub-System, as the case may be, and (C) free from Defects or
Deficiencies."
(c) Subsection 17.3 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 17.3:
"17.3 System Warranty. The Vendor warrants that, for a period
ending three (3) years from the Final Acceptance of the last PCS System
within the Initial System (the "System Warranty Period"), the ongoing
performance of each PCS System and PCS Sub-System together with all
other PCS Systems and PCS Sub-Systems within the System will conform
with and perform to the performance criteria set forth in Exhibit F as
of the date of the Final Acceptance of such PCS System based on the
circumstances within such PCS System on such date; provided, however,
that any apparent breach of the Vendor's obligations under this
subsection 17.3 which the Vendor demonstrates conclusively is due
<PAGE>
to the Installation, Integration, Commissioning and/or
Optimization of Additional Products by someone other than the Vendor or
any Subcontractors shall be deemed not to be a breach of the Vendor's
obligations hereunder. The System warranty pursuant to this subsection
17.3 will be limited to the extent that the projections of subscriber
growth, traffic and other predictive data, including all applicable
standards as identified in Exhibits B1, D and H, upon which the Final
Site Count and Final RF Design have been determined, have not been
materially exceeded or the applicable and relevant industry standards
have not materially changed."
(d) Subsection 17.5 is hereby amended by changing subsection
17.5(c) to subsection 17.5(c)(i) and adding the following subsection
17.5(c)(ii):
"(ii) In the event of a breach of the warranties in Section 17
respecting Additional, Products which will be cured with the
installation of other or further Additional Products, the Vendor will
provide such Additional Products, together with related transportation,
Installation, Integration, Commissioning and Optimization Services, as
are reasonably required to remedy the shortfall, at no cost or expense
to the Owner."
(e) Subsection 17.7.4 is amended by deleting the word
"Interoperability" in the third line of such subsection and replacing it with
the word "interoperability."
(f) Section 17 is hereby amended by adding the following
subsection 17.11 immediately after the current subsection 17.12, re-numbering
the existing subsection 17.11 as subsection "17.12":
"17.11 Year 2000 Compliance Warranty. (a) Until the later of
December 31, 2002 or three (3) years after the delivery of any
applicable Product, the Vendor represents and warrants that any
Products delivered by the Vendor to the Owner under this Contract are
designed to be used prior to, during, and after the calendar year 2000
A.D., and that such Products will operate during each such time period
without any material performance affecting error relating to date data
and date-dependent data, specifically including any material
performance affecting error relating to, or the product of, date data
which represents or references different centuries or more than one
century. Notwithstanding anything contained herein to the contrary, the
extension of the applicable Software warranties pursuant to the terms
of subsection 17.1 will also extend the term of the Vendor's
obligations under this subsection 17.11 with respect to any such
Software, as to which any such subsection 17.1 Software warranty is so
extended.
(b) Without limiting the generality of the foregoing the
Vendor further represents and warrants:
(i) That each Product will not abnormally end or provide
invalid or incorrect results which have a material performance-affecting
impact as a result of date data,specifically including date data which
<PAGE>
represents or references different centuries or more than one century;
(ii) That each Product has been designed to ensure date
data century recognition, calculations which accommodate same century
and multi-century formulas and date values, and date data interface
values that reflect the century; and
(iii) That each Product includes "Year 2000
Capabilities." For the purposes of this Contract, "Year 2000
Capabilities" means each Product manages and manipulates data involving
dates, including single century formulas and multi-century formulas,
and will not cause an abnormally ending scenario within the application
or generate material performance-affecting incorrect values or invalid
results involving such dates.
(c) At the Owner's request and upon reasonable notice, the
Vendor will provide written evidence reasonably sufficient to
demonstrate adequate testing and conversion of each Product to meet the
foregoing requirements."
13. Amendments to Section 22.
(a) Subsection 22.1 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 22.1:
"22.1 Title. Free and clear title to each Product (other than
licensed Software hereunder, which will be deemed licensed pursuant to
the terms of this Contract upon delivery) will pass to the Owner upon
delivery thereof by the Vendor to the System Element Location to which
each such Item belongs or, with respect to Additional Products, to the
designated FOB Point to which the delivery of each such Item has been
designated, as the case may be; provided that with respect to MSCs and
associated Equipment and Software free and clear title to each such MSC
and Item of associated Equipment and Software will only pass from the
Vendor to the Owner upon delivery to the applicable Designated Switch
Site. Prior to acquiring title to the Products, the Owner will not
cause or permit any such Products to be sold, leased or subjected to a
lien or other encumbrance."
(b) Subsection 22.2 is hereby amended by deleting it in its
entirety and replacing it with the following subsection 22.2:
"22.2 Risk of Loss. Risk of loss of any Initial Products
furnished to the Owner in connection with this Contract will pass from
the Vendor to the Owner upon the completion of the installation by the
Vendor of any PCS Product or at the completion of installation of any
other Product each at the appropriate System Element Location within
the given PCS System and/or PCS Sub-System; provided, however, that the
Owner will assume the risk of loss prior to such installation by the
Vendor for any such Initial Products damaged due to the gross
negligence or willful misconduct of the Owner. Risk of loss of any
Additional Products furnished to the Owner in connection with this
<PAGE>
Contract will pass from the Vendor to the Owner upon the
delivery to the designated FOB Point or Designated Switch Site, as the
case may be. Until such time as risk passes to the Owner, the Vendor
will, at its sole cost and expense, remedy, repair and replace all
physical damage, loss or injury to such property."
14. Amendments to Section 26.
Subsection 26.1 is hereby amended by deleting it in its entirety
and replacing it with the following subsection 26.1 (provided that with respect
to any MFC Certificates provided or to be provided to the Owner on or before the
effective date of this Amendment, any such MFC Certificates and the Vendor's
obligations in respect thereof will be governed by the terms of such subsection
26.1 as they existed immediately prior to the effective date of this Amendment):
"26.1 Most Favored Customer. (a) The Owner will be deemed one
of the Vendor's most important and favored Customers and will always
receive priority in terms of availability and quantity of MFC
Deliverables no less favorable than any other Customer of the Vendor
and in any event always in accordance with the terms of this Contract.
Subject to subsections 26(b) and (c) below, the Vendor guarantees that
at any time during the Term, the Owner will receive Net Prices (as
determined pursuant to Schedules 2, 2A, 3 and 3A and taking into
account any price incentives, discounts and any purchase credits over
the Term of the Contract) for MFC Deliverables that are equal to or
better than those charged to any other of the Vendor's Customers (other
than Affiliates) for the use of same or similar deliverables within the
United States who are involved in transactions and/or arrangements of
similar or lesser volumes (for the purposes hereof, the Owner's volume
will always be deemed to be at least the level of the Initial
Commitment plus the Additional Product Commitment hereunder and any
more PCS Products, Services and/or Engineering ordered at such time
during the Term of this Contract). Equipment Enhancements must be
provided to the Owner by the Vendor, if requested by the Owner, and the
Owner is obligated to make payment therefor in an amount that is no
higher than that payable by any Customer other than the Owner, which
amount of payment will be adjusted as set forth in subsections 7.2, 8.4
and this Section 26.1.
(b) The Vendor will not be deemed to be in violation of this
Section 26 in the event that the Vendor grants a price concession to
any Customer for a specific MFC Deliverable specifically in connection
with the resolution of a specific contractual dispute or threatened or
actual litigation with such Customer which results in a Net Price for
that MFC Deliverable lower than the Net Price provided to the Owner.
The Vendor will also not be deemed to be in violation of this Section
26 in connection with (i) Vendor sales of MFC Deliverables to a United
States government entity purchasing MFC Deliverables for government
use, (ii) Vendor sales of used and/or refurbished MFC Deliverables, or
(iii) Vendor sales of MFC Deliverables that are subject to a notice of
discontinued availability, provided that the Owner has been given
written notice and the opportunity to
<PAGE>
purchase a reasonable allocation of such discontinued MFC
Deliverables at a Net Price less than or equal to such Customer's Net
Price for such MFC Deliverables.
(c) For the purposes of determining the Vendor's prices for
MSC(s) sold to Customer(s) the pricing of BTSs and/or Growth Cabinets,
if any, sold to such Customer(s) under the same contract with such
MSC(s) may be referenced in determining the actual pricing of such
MSC(s). The following example shall instruct the application of the
immediately preceding sentence: If the Vendor is selling BTSs to the
Owner at $100 per BTS and MSCs at $450 per MSC and the Vendor proceeds
to sell to a Customer 5 BTSs at $150 per BTS and 1 MSC at $300, then in
determining whether the Vendor has violated the terms of subsection
26.1(a), the $50 per BTS charged to the Customer in excess of the price
charged to the Owner may be added to the price to the Customer of the
MSC (i.e., $300 plus (5 x $50) = $550). In such case the price deemed
to have been actually paid by the Customer under this example is $100
in excess of the Owner's MSC price and, therefore, not in violation of
the terms of subsection 26.1(a).
With respect to BTS and Growth Cabinets sold under the same
contract to any other Customer, the Vendor, in connection with
determining its compliance with subsection 26.1(a), may reference the
pricing of Growth Cabinets with respect to BTSs and BTSs with respect
to Growth Cabinets whenever the pricing of one such Product is used by
the Vendor to subsidize and/or reduce the pricing of the other such
Product. The following example shall instruct the application of the
immediately preceding sentence: If the Vendor is selling BTSs to the
Owner at $100 per BTS and Growth Cabinets at $50 per Growth Cabinet and
the Vendor proceeds to sell to a Customer 10 BTSs at $75 per BTS and 5
Growth Cabinets at $100 per Growth Cabinet, then, in determining
whether the Vendor has violated the terms of subsection 26.1(a), the
$50 per Growth Cabinet charged to the Customer in excess of the price
charged to the Owner may be added to the price to the Customer of the
BTSs (i.e., ($75 x 10) plus ($100 x 5) = $1,250). In such case, the
price deemed to have been actually paid by the Customer under this
example is equal to the Owner's BTS and Growth Cabinet combined pricing
for the same quantity of BTSs and Growth Cabinets and, therefore, not
in violation of the terms of subsection 26.1(a).
With respect to BTSs and Optional Additional Services (or
services similar thereto) sold under the same contract to any other
Customer, the Vendor, in connection with determining its compliance
with subsection 26.1(a), may reference the pricing of such services
with respect to BTSs whenever the pricing of any such services is used
by the Vendor to subsidize and/or reduce the pricing of such BTSs. The
following example shall instruct the application of the immediately
preceding sentence: If the Vendor is selling BTSs to the Owner at $100
per BTS and Optional Additional Services for such BTSs at $10 for such
similar services (on a per BTS basis) and the Vendor proceeds to sell
to a Customer 10 BTSs at $90 per BTS and services for such BTSs at $20
per each such BTS, then, in determining whether the Vendor has violated
the terms of subsection 26.1(a), the $10 per BTS services charged to
the Customer in excess of the price charged
<PAGE>
to the Owner may be added to the price to the Customer of the
BTSs (i.e., ($90 x 10) plus ($20 x 10) = $1,100). In such case, the
price deemed to have been actually paid by the Customer under this
example is equal to the Owner's BTS and Optional Additional Services
combined pricing for the same amount of BTSs and services and,
therefore, not in violation of the terms of subsection 26.1(a).
In determining whether the Vendor is in compliance with the
terms of this Section 26 in connection with the sale of MFC
Deliverables to Customers which have granted the Vendor firm
contractual commitments as to the then present and future exclusive
purchase and use of the Vendor's PCS CDMA products in all of such
Customer's PCS markets, the Vendor will be entitled for the purposes
hereof to deem the Net Prices charged to such Customer to be up to 10%
higher than the Net Prices actually charged to such Customer.
(d) In the event that a Net Price charged to any other of the
Vendor's Customers for any MFC Deliverable(s) is lower than the Net
Price previously charged to the Owner for such MFC Deliverable(s), the
Owner is entitled to receive the benefit of such lower Net Price with
respect to any MFC Deliverable(s) invoiced to but not yet paid for by
the Owner from and after the time such lower Net Price was first
provided to such other Customer. In addition, such lower Net Price
shall be applied to all subsequent purchases of such MFC Deliverable(s)
by the Owner during the remainder of the Term (subject to future
reductions pursuant to this Section 26).
(e) All invoices for MFC Deliverable(s) to which a lower Net
Price is applied pursuant to this Section 26 will be reissued by the
Vendor within thirty (30) days after notification is sent to the Owner.
The reissued invoice must indicate the difference between the Net Price
originally invoiced to the Owner and the reduced Net Price, together
with all applicable sales or other tax reductions attributable to the
price reduction. The reduction in Net Price made in accordance with
this Section 26 shall be reflected on all future invoices issued by the
Vendor to the Owner (subject to future reductions pursuant to this
Section 26). If the Owner has paid invoice(s) that would otherwise be
required to be reissued hereunder, then at the Owner's option, the
Vendor will credit the Owner's account with the Vendor, or make a
payment to the Owner, in either case in an amount equal to the
aggregate amount of the difference between the Net Price paid by the
Owner for each affected MFC Deliverable and the reduced Net Price paid
or charged to such other Customer for each such MFC Deliverable.
(f) On an annual basis throughout the Term of this Contract
commencing on January 1, 1998 the Vendor will be required to audit its
offering of all MFC Deliverables provided to the then-existing ten (10)
largest of its Customers (other than Affiliates and based on volume
purchased or to be purchased) in the preceding calendar year and
deliver to the Owner a certification (the "MFC Certificate") signed by
an authorized officer or the Vendor certifying that this Section 26 has
been adhered to and identifying what, if any, Net Price(s) charged to
the Owner have been or should be decreased as a result of
<PAGE>
compliance with this Section 26. The MFC Certificate will be
provided to the Owner within sixty (60) days after the close of each
calendar year. If after discussion with the Vendor concerning the
accuracy of the MFC Certificate the Owner reasonably believes that such
MFC Certificate may in fact not be accurate, the Owner shall be
entitled to have the Vendor's compliance with this Section 26 verified
by an Independent Auditor chosen by the Owner. The costs of any such
Independent Auditor will be borne by the Party whose position, upon
final determination pursuant to the terms of this subsection 26.1(f),
is not supported by such Independent Auditor. The Independent Auditor
will be required to complete its report pursuant to the terms hereof
within sixty (60) days from the date of notice from the Owner to the
Independent Auditor. The Owner understands and agrees that the
Independent Auditor will, at the Vendor's request, be subject to
reasonable confidentiality restrictions with respect to the Vendor's
product and service pricing information and will only have access to
such Vendor product and service pricing information as is reasonably
necessary for the Independent Auditor to make a determination of the
Vendor's compliance or non-compliance under this Section 26. Any
information received by the Independent Auditor during any such audit
will only be shared with the Owner to the extent reasonably necessary
to verify or document the Independent Auditor's conclusions pursuant to
any such audit. Any findings of any such Independent Auditor will be
subject to the arbitration and litigation provisions of subsection 23.2
without first being subject to the prior management dispute resolution
provisions of subsection 23.1. The Parties agree that the findings of
any such Independent Auditor will be admissible as evidence in any such
arbitration and/or litigation."
15. Amendments to Schedules.
(a) The Contract is hereby amended by adding the attached
Schedule 2A after Schedule 2.
(b) The Contract is hereby amended by adding the attached
Schedule 3A after Schedule 3.
(c) The Contract is hereby amended by deleting the existing
Schedule 10 in its entirety and replacing it with the attached Schedule 10.
(d) The Contract is hereby amended by adding the attached
Schedule 11A after Schedule 11 and incorporating such Schedule 11A with and into
Schedule 11 and further making it a part thereof.
(e) The Contract is hereby amended by deleting the existing
Schedules 12A and 12B in their entirety and replacing them with the attached
Schedules 12A, 12B, 12C and 12D, all of which collectively may be referred to as
Schedule 12.
(f) The Contract is hereby amended by deleting the existing
Schedule 13 in its entirety and replacing it with the attached Schedule 13.
<PAGE>
16. Amendments to Exhibits.
(a) The Contract is hereby amended by adding the attached Exhibit
B4 and Exhibit B5 after Exhibit B3.
(b) The Contract is hereby amended by adding the attached Exhibit
C1 after Exhibit C and incorporating such Exhibit C1 with and into Exhibit C and
further making it a part thereof.
(c) The Contract is hereby amended by deleting the existing
Exhibit D in its entirety and replacing it with the attached Exhibit D.
(d) The Contract is hereby amended by deleting the existing
Exhibit G in its entirety and replacing it with the attached Exhibits G1, G2 and
G3.
(e) The Contract is hereby amended by adding the attached Exhibit
J after Exhibit I.
(f) The Contract is hereby amended by adding the attached Exhibit
K after Exhibit J.
17. Amendments to Appendices.
(a) The Contract is hereby amended by adding the attached
Appendix B1 after Appendix B.
(b) The Contract is hereby amended by deleting the existing
Appendices F, I, O and T. All references to the pricing of any Products
previously listed in Appendix F, I, O or T will be contained exclusively on
Schedule 2A or Schedule 3A, as the case may be.
(c) The Contract is hereby amended by adding the attached
Appendix L1 after Appendix L.
18. Cross References.
All references in the Contract to Section and subsection numbers
will, to the extent necessary, be deemed amended accordingly to reflect the
changes made by this Amendment.
19. OTHER AMENDMENTS.
EXCEPT AS EXPRESSLY AMENDED, MODIFIED AND SUPPLEMENTED HEREBY,
THE PROVISIONS OF THE CONTRACT ARE AND WILL REMAIN IN FULL FORCE AND EFFECT AND
NOTHING IN THIS AMENDMENT WILL BE CONSTRUED AS A WAIVER OF ANY OF THE RIGHTS OR
OBLIGATIONS OF THE PARTIES UNDER THE CONTRACT.
<PAGE>
20. GOVERNING LAW.
THIS AMENDMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARDS TO THE LAWS AND PRINCIPLES
THEREOF WHICH WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
21. Descriptive Headings.
Descriptive headings are for convenience only and will not
control or affect the meaning or construction of any provisions of this
Amendment.
22. Counterparts.
This Amendment may be executed by one or more of the Parties to
the Contract on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be
signed by their duly authorized representatives on the date first above written.
SPRINT SPECTRUM EQUIPMENT COMPANY, L.P., as the Owner
By:/s/ Keith D. Paglusch
Name: Keith D. Paglusch
Title: Senior Vice President, Technical Services &
Network Operations
LUCENT TECHNOLOGIES INC.,
as the Vendor
By: /s/William K. Nelson
Name: William K. Nelson
Title: Sprint PCS - Vice President
<PAGE>
SCHEDULE 2A
PRODUCT PRICES
Prices for Additional Products and Services throughout the Term will in no event
be higher than the prices set forth herein and or on Schedule 3A, as applicable.
The Vendor will provide to the Owner a $[ ]credit which can be used to
purchase the Vendor's CDMA BTSs, MSCs or Services associated with CDMA BTSs or
MSCs at any time during the Term of the Contract.
1) Base Station Model
Discounted
1.a. Base 3 Sector Model - High Power Price
Includes:
3 Sector Primary Cabinet - 16W $[
3 - ECUs $
Initial Operating Software $
Total Discounted Price $
less discount $
Net Base Model Price $ ]
- Components added to this base model will be priced according to
the "Unit Price After All Discounts" column in Section 2 of this
Schedule 2A.
1.b Additional Recommended Hardware & Power Quantity Price
3 Sector - Full Duplexer Option -
ordered with Primary Cabinet. 1 $[
CSU (Channel Service Unit) 1 $
CRTU (CDMA Radio Test Unit) 1 $
Compact - Cable Cover Assembly 1 $
Low Gain GPS Antenna & Hardware Kit 1 $
Indoor/Outdoor Mounting Hardware Kits
(One per cabinet) 2 $
Outdoor Weatherproof Kit 1 $
Antenna Jumper Cables 6 $
66EC - Outdoor Primary Power Cabinet
(with 8 batteries) 1 $
-
Total Additional Hardware $ ]
1.c Additional Services**
Services Suite I (See Schedule 3A for individual component pricing.)
Includes Bolt-down, Commissioning, Integration,
and Local Transportation of primary and power cabinets 1 $[
Total of BTS Model with Recommended Hardware, Power and Services $ ]
** Optimization Pricing not included (refer to Schedule 3A)
<PAGE>
1.d Base 2 Sector Model - High Power
Discounted
Price
2 Sector Primary Cabinet - 16W $[
2 - ECUs $
Initial Operating Software $
Total Discounted Price $
less discount $
Net Base Model Price $ ]
- Components added to this base model will be priced
according to the "Unit Price After All Discounts"
column in Section 2 of this schedule 2A.
1.e. Base OMNI Model - High Power (Not Upgradable to Multi Sector)
Discounted
Price
OMNI Primary Cabinet - 16W $[
Initial Operating Software $
Total Discounted Price $
less discount $
Net Base Model Price $ ]
- Components added to this base model will be priced according to
the "Unit Price After All Discounts" column in Section 2 of this schedule 2A.
Discounted
1.f. Base CATV Model - 3 Sector Simplex - A Band Price
3 Sector Primary Cabinet $[
3 - ECUs $
Initial Operating Software $
less discount $
Net Base Model Price $ ]
- Components added to this base model will be priced according to
the "Unit Price After All Discounts" in Section 2 of this schedule 2A.
- CATV Minicells must be forecasted 6 months in advance of an
order being placed after July 1998.
- CATV Minicells are only available for A band markets.
- The price and delivery interval for CATV minicells for B band
markets will be quoted as needed.
<PAGE>
Unit Price
After All
Discounts
3 Sector Primary - Outdoor 8W $[
3 Sector - Full Duplexer Option -
ordered with Primary Cabinet. $
2 Sector Primary 8W $
2 Sector - Full Duplexer Option -
ordered w/ Primary Cab. $
OMNI Primary - 8W $
OMNI - Full Duplexer Option -
Ordered w/ primary OMNI $ ]
Growth Cabinets used on all System Element Facilities ordered
prior to January 1, 1998. (Refer to Schedule 13 for a
listing of these System Element Facilities)
3 Sector - 2nd or 3rd Carrier Growth Cabinet - 16W $[
6 Sector CATV Growth Cabinet (A Band Only) $
2 Sector - 2nd or 3rd Carrier Growth Cabinet - 8W $
2 Sector - 2nd or 3rd Carrier Growth Cabinet - 16W $ ]
Growth Cabinets used on all System Element Facilities ordered
on or after January 1, 1998. (Sites not listed on Schedule
13.)
3 Sector - 2nd or 3rd Carrier Growth Cabinet - 8W $[
3 Sector - 2nd or 3rd Carrier Growth Cabinet - 16W $
6 Sector CATV Growth Cabinet (A Band Only) $
2 Sector - 2nd or 3rd Carrier Growth Cabinet - 8W $
2 Sector - 2nd or 3rd Carrier Growth Cabinet - 16W $ ]
Simplex Filter (Price / sector when ordered with 3rd carrier
growth cabinet. $ Also required on 2nd Carrier growth
cabinet where primary is not full duplex.
3-Duplexer Filter Upgrade Kit $[
6-Duplexer Filter Upgrade Kit $
ECU (Expanded Channel Unit) $
CSU (Channel Service Unit) $
CRTU (CDMA Radio Test Unit) $
IOS (Initial Operating System)
Software Fee $
High Power CTU Option - 3 Sector (16W) $
High Power CTU Option - 2 Sector (16W) $
High Power CTU Option - OMNI (16W) $
High Power CTU Upgrade Kit -
3 Sector (8W to 16W) $
High Power CTU Upgrade Kit -
2 Sector (8W to 16W) $
High Power CTU Upgrade Kit -
OMNI (8W to 16W) $ ]
All additional BTS components will be discounted forty percent
(40%) off of the Vendor's then current List Price.
Installation Hardware
Compact - Cable Cover Assembly $[
Low Gain GPS Antenna & Hardware Kit $
Indoor/Outdoor Anchoring Kit
(price per cabinet) $
Outdoor Weatherproof Kit $
Antenna Jumper Cable (6ft.) $ ]
<PAGE>
3) Power Equipment
Discounted
Outdoor Power Equipment Price
3.a. 66EC - Outdoor Primary Power Cabinet (one shelf, $[
6.8 hr. backup)Equipped for 2KW or (4) rectifiers
and 8 batteries (not included in cabinet price) in a
conditioned compartment for 6.8 hours holdover
NOTE: For the Vendor Primary BTS Cabinet.
- Four (4) Rectifiers (MPWR-RECT)
- Eight (8) Batteries (MPWR-BATTIR125)
TOTAL PRICE ]
3.b. 60EC - Enhanced Cooled Battery Backup Cabinet
Includes cabinet, cabinet interconnection hardware, $[
fusing, alarms, battery cabling, battery busbars, and
heater pads. (price does not include batteries)
3.c. 66RPEC - Outdoor Primary Power Cabinet (Motorola BTS Sites)
(One shelf, 2.9 hr. backup) wired for (8) batteries,
(price does not incl. Batteries) LVD, rectifier shelf
and rectifier to charge batteries. Enhanced cooling
- Eight (8) Batteries
TOTAL PRICE $ ]
3.d. Second Carrier Power Upgrade (8W) - For 60C & 66EC $[
- Additional Rectifier Shelf (MPWR-SHLFAD)
- Power Upgrade for Growth Cabinet
- Two (2) Rectifiers (MPWR-RECT)
TOTAL PRICE $ ]
Indoor Power Equipment
3.e. Indoor Primary Power Cabinet Equipped for 2KW, or $[
(4) rectifiers, and (4) Batteries in one rack with
(6) 30 amp breakers.
3.f. Indoor Primary Power Cabinet Equipped for 4KW, or
(7) rectifiers, and (4) Batteries in one rack with
(6) 30 amp breakers.
3.g. Indoor Primary Power Cabinet Equipped for 6KW, or
(10) rectifiers, and (4) Batteries in one rack with
(6) 70 amp breakers.
3.h. Indoor Primary Power Cabinet Equipped for 8KW, or
(13) rectifiers, and (4) Batteries in one rack with
(10) 30 amp breakers.
Other Power Equipment
3.i. Spare +24 volt plug-in rectifier (ZS2M/MN-RECT)
3.j. MPWR-BATTIR125 Battery to be used at Vendor Sites
One +12 volt battery with intercell connectors
3.l. Replacement Battery String (Comcode 407155399) Containing
(4) 12 volt 2IR125 Batteries Does not include
transportation, shipped 4 per pallet. ]
4) Power Pricing Notes
4.a. 66RPEC will be shipped from Omaha, NE. Batteries for the 66 RPEC will
be shipped from Dallas, TX
5) Future Power Products for Base Stations
5.a. Future power products manufactured by Vendor for Vendor's Base
Stations will be discounted [ ]off of the Vendor's then current List Price,
except batteries
5.b. Future power products not manufactured by the Vendor, including
batteries, for Vendor's Base Stations will be discounted [ ] off Vendor's
then current List Price .
6) MSC Complex Power
6.a. Power products manufactured by Vendor for the Vendor's MSC complex
will be discounted a minimum of [ ] off the then current List Price, except
batteries.
6.b. Power products supplied by Vendor but manufactured by third parties,
including batteries, for the Vendor's MSC complex will be discounted a
minimum of [ ] off the then current List Price.
7) Annual Software Release Maintenance Fees
7.a. Annual Fees
Base Station Release Maintenance Fees $[ ](per Base Station)
5ESS Wireless Switch Release
Maintenance Fees $[ ] (per 5ESS Switch)
Access Manager Maintenance Fees $[ ] (per Access Mgr.)
7.b. The annual fees include all new Software Upgrades, Enhancements and
Combined Releases including, but not limited to, the following;
- MSC infrastructure improvements including system performance and
operation.
- Compatibility of existing features with the new release.
- Addition of base features.
- Platform for Optional Software Features.
- MSC support for BTS software releases.
- 24 hour and 7 day Technical Support.
7.c. Owner (and its Affiliates, as the case may be) who have paid the per
MSC Annual Release Maintenance Fee in full will be eligible to receive all
MSC Software Upgrades, Enhancements, and Combined Releases which will be
packaged on an ECP, DCS, 5ESS-2000 Switch DCS, OMP, or AutoPace basis.
7.d. Payment of this fee includes all the Office Data Assembly and all the
translation work required.
7.e. Annual Release Maintenance Fees will be invoiced in advance on January
1, 1998, and in advance annually thereafter for all equipment delivered
prior to January 1st of each succeeding year.
8) Optional Features Software
8.a. All Vendor CDMA Optional Features made available in Vendor's CDMA
Releases 7.0, 8.0 and 9.0 will be licensed to the Owner and the Owner's
Affiliates, within the United States at the following prices:
Sprint PCS &
Affiliates (Other than Sprint Com
CDMA Release Sprint Com) Price Price
------------ ----------------- -----
7.0 $[ $[
8.0 $ $
9.0 $ ] $ ]
8.b. CDMA releases 1 through 6 will be licensed to the Owner and the
Owner's Affiliates throughout the Nationwide Network, in the United States at no
additional charge.
8.c. This License does not include features provided on only the following
peripheral platforms and applications; HLR, Actiview, TIMS, WIN, SCE, SCN,
SCP, SMC.
8.d. Base Station Optional Features on non-Vendor Base Stations will be
discounted [ ] off the Vendor's then current List Price.
8.e. Upon delivery of each CDMA release to the Owner's Test-bed Laboratory,
Vendor will invoice 100% of the price of the release, with payment thereof
subject to subsection 12.3.1 and in any event payment for CDMA 7.0 will be
deferred until January 15, 1999.
9) MSC 5ESS Switch
9.a. Administrative Module and Initial Communications Module
Price
Equipment $[
Software $
Total $ ]
9.b. Communications Module Price
First Capacity growth Module $[
All Additional growth Modules $ ] (per module)
9.c. Wireless Switch Modules Models
Packet Total
Erlangs Pipes T1.5s Price
5E11 Models
Model A 95 120 60 $[
Model B 210 90 60 $
Model C 330 60 60 $
Model D 450 30 60 $
5E12 Models:
Model E 280 270 120 $
Model F 400 210 120 $
Model G 510 150 120 $
Model H 630 90 120 $
Model J * 300 360 120 $
Model K * 620 300 120 $
Model L * 940 240 120 $
Model M * 1250 180 120 $
Model N * 770 0 0 $
Model P * 2200 0 0 $ ]
* These Switch Module Models utilize PHV4.
<TABLE>
9.d. Wireless Switch Modules Upgrade Options
Packet Total
Erlangs Pipes T1.5s Price
<S> <C> <C> <C> <C>
From Model A to Option 1 510 150 50 $[
From Model A to Option 2 450 180 60 $
From Model B to Option 1 510 150 50 $
From Model B to Option 2 450 180 60 $
From Model A to Option 3 510 150 50 $
From Model A to Option 4 510 180 60 $
From Model B to Option 3 510 150 50 $
From Model B to Option 4 510 180 60 $ ]
</TABLE>
Notes: Options 1 and 2 are used to upgrade a Model A or Model B to a PSU2
expanded model and add additional PH4 & PHV2 cards.
Options 3 and 4 are used to upgrade a Model A or Model B to a PSU2 expanded
model and add additional PH4 & PHV4 cards.
10) MSC 5ESS Pricing Notes
10.a. Owner requested additions to the following models will be priced at the
Vendor's then current List Price minus [ ].
10.b. Prices include transportation to the Designated Switch Site pursuant to
the terms of the Contract.
10.c. Prices do not include MSC Engineering or Installation.
11) Access Manager
11.a. Initial Access Manager unit price configured to support 100 Base
Stations and 10,000 subscribers.
11.b. Only one Access Manager per 5ESS Switch and a maximum of 220 base
stations.
11.c. All additional Access Manager growth will be priced at the Vendor's
then current List Price minus [ ].
11.d. Model price of the Access Manager as follows, includes transportation
as past of MSC delivery:
Price
Interprocess Message Switch (IMS) $[
Executive Call Processor (ECP)
High Availability Operations and Maintenance
Platform (HA-OMP)
less Discount
Model Price ]
12.a. Detail Pricing of Buyout
Description Price
1998
10 SCP/HLR Field Systems Upgrade -Model2 $[
4 New SCP/HLR Field Systems - Model2
4 SCP/HLR Lab Machines Upgrade - Model2
1 SMS Field System
1 SMS Lab System
1 Lab OTAF System
2 Field OTAF
Service Creation Environment
SCP/HLR Release 1.0
SCP/OTAF Release 1.0
Sub-Total ]
WIN 1.1 - WIN2.1(HLR,OTAF,SMS) $[
Actiview 4.0 & 5.0
TIMS release 6.2
ADDS Release through release
2.0 Maintenance Fees
Sub-Total
1998 Total ]
1999
WIN 2.2 - 3.0 (HLR,OTAF,SMS) $[
ACTIVIEW 6.0 & 7.0
TIMS release 7.0
ADDS release 3.0 and 3.1
Maintenance
1999 Total ]
Grand Total For 1998 & 1999 $[ ]
12.b. New SCP/HLR Equipment purchased beyond pair 7 will be purchased at the
price of [ ] per SCP/HLR system (Two SCP/HLR systems required per pair).
New SMS Equipment purchased beyond existing 1 field SMS will be
purchased at the price of [ ] Per System New TIMS (HP K-460)
Equipment will be purchased at the price of [ ] New ADDS (HP
K-460) Equipment will be purchased at the price of [ ] This
buyout includes Sybase Software License for 1,050 Seats, one open
server RTU, one open client RTU.
12.c. The herein described Intelligent Network Software buyout will cover the
Nationwide Network and will include, without limitation, the following feature
releases. A detailed list of the features included in each Release is identified
in Exhibit C1. A feature is defined as any software enhancement that provides
new functionality, capacity increase or performance improvements to any platform
including the SCP, SMS, Actiview, TIMS or ADDS.
-HLR, OTAF, and SMS WIN Releases 1.0 through 3.0 -Actiview Releases
4.0, 5.0, 6.0 and 7.0.
-TIMS Release 6.0 and 6.1
-ADDS Release 2 and Release 3.
12.d. The releases will have at least the following number of features:
- For the HLR, OTAF, and SMS, 40 features in WIN 1.1-2.1, and 30
features in WIN 2.2 - WIN 3.0 (Exhibit C1 has a complete list of features for
these releases).
-For Actiview, 7 features in 4.0 and 8 features in each of the
releases 5, 6, and 7. -For the year 99', there will be two software
release for the HLR, OTAF and Actview.
The HLR and OTAF will have WIN 2.2 and WIN 3.0. Actiview will have Release 6 and
7.
12.e. All Maintenance Fees for the years 1998 and 1999 are included in the
herein described Intelligent Network Software buyout for:
- HLR
- OTAF
- SMS
- Actiview
- TIMS
- ADDS
<PAGE>
Schedule 3A
Services Prices
Travel and living expenses will be incurred if the Installation site is
more than 50 miles from the associated Designated Switch Site subject
to prior Owner written approval of quote, and Vendor will not commence
such work without such approval.
Installation, Integration and Engineering prices are based on a Monday
through Friday 8 A.M. to 5 P.M. work day excluding United States
national holidays and weekends. Requests for overtime or out of hours
work will be an additional charge and will be priced separately, and
subject to prior Owner written approval.
1) Service Suites
1.a. Services Suite 1 (BTS)
Bolt-down, Commissioning, Integration and Local Transportation of BTS
and power cabinets.
Total Price = [ ]
1.b. Services Suite 2 (Growth Cabinet)
Bolt-down, Commissioning, Integration and Local Transportation of
Growth Cabinet and power upgrade.
Total Price = [ ]
1.c. Services Suite 3 (Primary Cabinet)
Bolt-down, Commissioning, Integration, Project Management (As defined
in Exhibit B4) and Local Transportation of BTS and power cabinets.
Total Price = [ ]
1.d. Services Suite 4 (Growth Cabinet)
Bolt-down, Commissioning, Integration, Project Management(As defined in
Exhibit B4) and Local Transportation of Growth Cabinet and power
upgrade.
Total Price = [ ]
2) Component Pricing Breakdown of Services Included in Services Suites 1 - 4.
2.a Indoor / Outdoor Commissioning Services for BTS/Growth Cabinet PCS, CDMA,
Single Frame
Refer to Exhibit B4
(Including without limitation, Commissioning for BTS to include connection
and testing to activate and power up the BTS/Growth Cabinet)
[ ]per cabinet
<PAGE>
2.b Indoor / Outdoor Commissioning Services for BTS Power / Battery / Generator
Cabinet
Refer to Exhibit B4
(Including without limitation, Commissioning, connection, test and power up
of cabinets)
[ ]per cabinet
2.c Cell Integration (Initial and Subsequent Installations)
Refer to Exhibit B4
[ ] per cell (Vendor provides technician at MSC and cell site)
2.d Bolt-down Services
Bolt-down of cabinets as described in Exhibit B4.
[ ] per cell
2.e Project Management
Local Project Management support as described in Exhibit B4
[ ]per cell
3) Additional Services Not included in Service Suites
3.a Equipment Engineering Services (Initial and Subsequent Installations)
Conduct field surveys as required, and support all Owner and/or Affiliate
requests for quotes for the site. Custom engineer specific BTS sites
requiring non-standard configurations.
[ ] per cabinet
3.b. Indoor / Outdoor Commissioning Services for Growth Power / Battery /
Generator Cabinet Modified for Motorola Cabinets
[ ] per cabinet Refer to Exhibit B4
3.c. De-install Power/Battery/Generator Cabinet (Out of Service)
[ ] per cabinet
Note: This charge in no way relates to or can be charged in connection with
the Vendor's delivery or warranty obligations.
<PAGE>
3.d. Miscellaneous Installation Services
(Custom Installation, Demarc Work, Ladder Racking, Additional Trips, and
other installation services outside the scope of work in Exhibit B4.)
[ ] per hour per person depending on the labor rate in each market, as
such will be reasonably documented to the Owner.
3.e. Miscellaneous Engineering & Consulting Services
Asset Management Documentation
Product Configuration Consultation
Site Surveys, Energy System Surveys
In Field Engineering Installation Support.
[ ] per hour.
3.f. Wireless Program Management
Veteran Vendor program manager with extensive experience working on Owner
projects to locally program manage all aspects of project as directed by
the Owner's regional headquarters and as defined in the scope of work in
Exhibit B4.
[ ] per month per such program manager.
4) Optimization Services
4.a.Optimizing Individual BTS and/or Growth Cabinets Into an Existing
System Pursuant to the Requirements of Exhibit B5.
The addition of BTSs or Growth Cabinets to an existing PCS System
without the Installation of a new MSC is considered growth of an
existing system and is billable according to the following schedule.
Price break points are dependent upon the number of cells to be added
on a single Vendor visit to a PCS System.
1- 15 cells [ ] per cell
16-20 cells [ ] per cell
21 or more cells [ ] per cell
In only those markets where the Vendor does not have optimization
resources available, a per diem fee of [ ] will be charged to cover the
expenses for all Vendor employees and sub-contractors working on the
project that may be required to temporarily relocate to the given PCS
System. All fees are exclusive of airfare charges, and in all cases
will be subject to the Owner's prior approval via the Owner's vendor
and contract manager department.
Note: If Owner elects to have the Vendor perform busy hour drive testing,
the Owner will be billed on a time and materials basis.
<PAGE>
4.b. System Optimization (New MSC) Pursuant to the Requirements of Exhibit B5
For the purpose of this paragraph 4.b only, a new system is defined as
one, which includes a newly installed MSC and associated Base Stations.
System optimization for each "new system" will be quoted on an
individual basis depending on the required scope of work, but in no
case will exceed the prices below for the associated scope of work in
Exhibit B5.
1-40 cells [ ] per cell
41-80 cells [ ] per cell
81 or more cells [ ] per cell
5) WIN Services
5.a. SCP Engineering and Installation
Model 2 Engineering and Installation for one machine.
[ ]
Model 1 to Model 2 Engineering and Installation for one machine.
[ ]
5.b. SMS Engineering and Installation
I70 to K460 Engineering and Installation for one machine
[ ]
5.c. TIMS(NFM) Installation, Testing and Integration of Software
K460 software installation, testing and integration for one
machine.
[ ] for the first month plus travel and living expenses.
All travel and living expenses to be estimated and provided for
Owner's approval before start of job. All travel and living
expenses to be actual costs. Charges beyond the first
month
will be as follows:
[ ] per day plus travel and living expenses.
<PAGE>
Schedule 10
SPRINT PCS
MONTHLY BASE STATION FORECAST REPORT FORM
(Primary BTS)
[
]
Assumes:
- Full Duplex Filter
- 16W Amplifier
- Includes CSU
- Outdoor
- 3 ECU's
<PAGE>
SPRINT PCS
MONTHLY BASE STATION FORECAST REPORT FORM
(CATV)
[
]
Assumes:
- Full Duplex Filter
- 16W Amplifier
- Includes CSU
- Outdoor
- 3 ECU's
<PAGE>
SPRINT PCS
MONTHLY BASE STATION FORECAST REPORT FORM
(1st Growth BTS)
[
]
Assumes:
- Full Duplex Filter
- 16W Amplifier
- Includes CSU
- Outdoor
- 3 ECU's
<PAGE>
SPRINT PCS
MONTHLY BASE STATION FORECAST REPORT FORM
(Totals)
[
]
Assumes:
- Full Duplex Filter
- 16W Amplifier
- Includes CSU
- Outdoor
- 3 ECU's
<PAGE>
Schedule 11A
Cancellation Charges (Additional Products)
Without charge and/or penalty, the Owner may cancel any
Purchase Order for an Additional Product no later than seventy-five (75) days
prior to the earliest date scheduled for shipment of such Additional Product; or
If the Owner cancels a Purchase Order or a portion thereof
less than seventy-five (75) days prior to the earliest date scheduled for
shipment of such Additional Product, the Owner shall pay to the Vendor a
cancellation charge of ten percent (10%) of the Net Price for such Additional
Product pursuant to Schedule 2A; or
If the Owner cancels a Purchase Order or a portion thereof
less than thirty (30) days prior to the earliest date scheduled for shipment of
such Additional Product, the Owner shall pay to the Vendor a cancellation charge
of fifteen percent (15%) of the Net Price for such Additional Product pursuant
to Schedule 2A.
The Owner may not cancel a Purchase Order after the applicable
date scheduled for shipment of such Additional Product. The payment of such
charges shall be the Vendor's sole remedy and the Owner's sole obligation for
such canceled Purchase Order. Furthermore, the Owner will only have the right to
cancel orders for Bulk Items subject to any cancellation rights and payments, if
any, the Vendor has or has to make with or to its own suppliers with respect to
any such Bulk Items.
Any changes requested by the Owner that involve the return or
exchange of Non-Essential Equipment will be subject to the standard policies of
the applicable Non-Essential Equipment supplier unless such policies are
otherwise set out in the applicable agreement between such Non-Essential
Equipment supplier and the Vendor, in which case the Owner will be entitled to
cancel any such Order for Non-Essential Equipment in accordance with the terms
of such agreement.
Nothing herein will be deemed to bar the Vendor's right to
invoice the Owner for all Services actually performed prior to the date of such
performance by the Vendor in respect of such Products in accordance with the
provisions of this Contract.
<PAGE>
Schedule 13
<TABLE>
- - --------------------------------------------------------------------------------------------------------------------------
SYSTEM SITEID SITENAME BOLTDOWN
- - --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Albany AL03XC001V [ 10/24/96
AL03XC002V 09/13/96
AL03XC005V 10/15/96
AL03XC006V 11/08/96
AL03XC007V 10/17/96
AL03XC008V 10/17/96
AL03XC010V 10/17/96
AL03XC012V 12/17/96
AL03XC014V 08/06/96
AL03XC015V 10/15/96
AL03XC017V 12/17/96
AL03XC019V 10/30/96
AL03XC021V 10/18/96
AL03XC023V 10/14/96
AL03XC024V 10/04/96
AL03XC025V 10/16/96
AL03XC028V 10/10/96
AL03XC029V 10/09/96
AL03XC034V 10/16/96
AL03XC035V 10/09/96
AL03XC037V 11/11/96
AL03XC038V 10/15/96
AL03XC040V 10/22/96
AL03XC042V 11/08/96
AL03XC048V 10/24/96
AL03XC049V 10/08/96
AL03XC052V 11/04/96
AL03XC054V 10/18/96
AL03XC059V 11/06/96
AL03XC061V 10/16/96
AL03XC064V 10/10/96
AL03XC067V 10/04/96
AL03XC068V 11/08/96
AL03XC069V 10/01/96
AL03XC071V 10/21/96
AL03XC072V 10/30/96
AL03XC073V 10/21/96
AL03XC074V 10/22/96
AL03XC003V 05/05/97
AL03XC004V 11/15/96
AL03XC018V 11/26/97
<PAGE>
AL03XC020V 09/25/97
AL03XC022V 08/27/97
AL03XC026V 03/06/97
AL03XC027V 12/17/97
AL03XC030V 02/28/97
AL03XC031V 08/28/97
AL03XC036V 02/18/97
AL03XC039V 10/22/96
AL03XC041V 03/18/97
AL03XC047V 09/24/97
AL03XC050V 08/26/97
AL03XC051V 05/05/97
AL03XC053V 11/12/96
AL03XC055V 12/19/97
AL03XC056V 05/06/97
AL03XC057V 09/10/97
AL03XC058V 05/14/97
AL03XC060V 06/09/97
AL03XC062V 03/07/97
AL03XC063V 03/07/97
AL03XC065V 09/10/97
AL03XC066V 04/08/97
AL03XC078V 05/07/97
---------------------------------------------------------------------------------------------------
64
Boston BS03XC001V 02/04/97
BS03XC002V 12/17/96
BS03XC003V 09/23/96
BS03XC004V 03/17/97
BS03XC005V 12/10/96
BS03XC007V 12/11/96
BS03XC008V 10/11/96
BS03XC010V 11/20/96
BS03XC011V 03/17/97
BS03XC012V 02/26/97
BS03XC013V 03/07/97
BS03XC015V 02/25/97
BS03XC017V 01/30/97
BS03XC019V 01/03/97
BS03XC020V 02/28/97
BS03XC021V 12/27/96
BS03XC022V 02/27/97
BS03XC023V 03/24/97
<PAGE>
BS03XC025V 03/11/97
BS03XC026V 09/22/96
BS03XC028V 01/29/97
BS03XC029V 10/18/96
BS03XC030V 10/17/96
BS03XC031V 03/20/97
BS03XC032V 03/24/97
BS03XC033V 01/07/97
BS03XC036V 03/22/97
BS03XC037V 02/08/97
BS03XC042V 11/20/96
BS03XC043V 03/05/97
BS03XC048V 06/11/96
BS03XC049V 11/22/96
BS03XC052V 11/20/96
BS03XC053V 03/15/97
BS03XC054V 01/10/97
BS03XC055V 01/09/97
BS03XC058V 03/14/97
BS03XC065V 03/21/97
BS03XC072V 01/22/97
BS03XC079V 02/21/97
BS03XC080V 02/03/97
BS03XC199V 03/18/97
BS03XC201V 02/06/97
BS03XC534V 03/13/97
BS03XC014V 09/20/97
BS03XC024V 09/20/97
BS03XC027V 05/10/97
BS03XC044V 03/05/97
BS03XC045V 05/08/97
BS03XC066V 12/10/97
BS03XC073V 05/13/97
BS03XC078V 06/16/97
BS03XC138V 11/08/97
BS03XC139V 06/02/97
BS03XC140V 08/15/97
BS03XC141V 10/16/97
BS03XC151V 05/09/97
BS03XC152V 04/18/97
BS03XC153V 12/31/98
BS03XC154V 08/18/97
BS03XC155V 04/17/97
<PAGE>
BS03XC181V 06/26/97
BS03XC188V 07/26/97
BS03XC192V 09/13/97
BS03XC198V 05/23/97
BS03XC203V 05/28/97
BS03XC207V 09/25/97
BS03XC208V 05/22/97
BS03XC218V 10/14/97
BS03XC219V 10/15/97
BS03XC221V 11/21/97
BS03XC222V 06/24/97
BS03XC223V 11/06/97
BS03XC501V 12/11/97
BS03XC509V 12/13/97
BS03XC524V 06/18/97
BS03XC535V 11/12/97
BS03XC555V 10/29/97
BS03XC581V 11/11/97
BS03XC016V 02/25/97
BS03XC038V 03/21/97
BS03XC068V 02/12/97
BS03XC071V 03/06/97
BS03XC077 01/31/97
BS03XC083V 11/21/96
BS03XC090V 02/15/97
BS03XC092V 02/07/97
BS03XC099V 02/26/97
BS03XC116V 03/12/97
BS03XC122V 04/14/97
BS03XC124 02/13/97
BS03XC126 02/10/97
BS03XC137 02/25/97
BS03XC145V 02/14/97
BS03XC148V 01/27/97
BS03XC210V 03/24/97
BS03XC301 10/01/96
BS03XC302V 12/16/96
BS03XC303V 11/21/96
BS03XC309V 11/25/96
BS03XC317V 02/11/97
BS03XC326V 02/05/97
BS03XC339V 02/19/97
BS03XC350V 02/18/97
<PAGE>
BS03XC351V 02/20/97
BS03XC355V 03/25/97
BS03XC519 03/12/97
BS03XC006V 05/28/97
BS03XC009V 09/19/97
BS03XC018V 08/07/97
BS03XC039V 11/01/97
BS03XC040V 04/26/97
BS03XC041V 04/08/97
BS03XC047V 09/26/97
BS03XC051V 09/19/97
BS03XC057V 11/11/97
BS03XC059V 07/11/97
BS03XC061V 10/31/97
BS03XC062V 08/20/97
BS03XC064V 09/18/97
BS03XC074V 11/04/97
BS03XC084V 09/02/97
BS03XC085V 07/28/97
BS03XC088V 10/10/97
BS03XC089 09/17/97
BS03XC091V 08/13/97
BS03XC093V 09/23/97
BS03XC094V 05/24/97
BS03XC095V 05/28/97
BS03XC098V 09/22/97
BS03XC101V 06/10/97
BS03XC103V 09/09/97
BS03XC105V 04/11/97
BS03XC108V 07/18/97
BS03XC112V 11/14/97
BS03XC114V 11/01/97
BS03XC115V 11/13/97
BS03XC123V 07/10/97
BS03XC125V 05/07/97
BS03XC129V 04/14/97
BS03XC133V 09/29/97
BS03XC143V 05/21/97
BS03XC144V 04/28/97
BS03XC147 05/16/97
BS03XC150V 07/25/97
BS03XC156V 10/17/97
BS03XC161V 09/30/97
<PAGE>
BS03XC168V 12/29/97
BS03XC178V 06/05/97
BS03XC186V 05/24/97
BS03XC200V 08/13/97
BS03XC209V 06/23/97
BS03XC211V 10/30/97
BS03XC212V 11/13/97
BS03XC213V 08/19/97
BS03XC215V 09/15/97
BS03XC216V 07/22/97
BS03XC304V 07/28/97
BS03XC305V 09/15/97
BS03XC307V 11/03/97
BS03XC308V 10/24/97
BS03XC311V 10/10/97
BS03XC315V 09/24/97
BS03XC316V 10/03/97
BS03XC319V 09/11/97
BS03XC323V 09/25/97
BS03XC324V 09/24/97
BS03XC325V 11/10/97
BS03XC327V 05/27/97
BS03XC329V 11/12/97
BS03XC344V 12/08/97
BS03XC345V 10/08/97
BS03XC346V 09/16/97
BS03XC347V 09/17/97
BS03XC349V 09/10/97
BS03XC352V 07/09/97
BS03XC353V 06/25/97
BS03XC356V 09/16/97
BS03XC357V 12/30/97
BS03XC504V 06/27/97
BS03XC513V 08/29/97
BS03XC517V 09/29/97
BS03XC518V 11/05/97
BS03XC529V 07/23/97
BS03XC530V 05/15/97
BS03XC550V 07/28/97
BS03XC551V 09/25/97
BS03XC576V 10/21/97
BS03XC585V 12/12/97
---------------------------------------------------------------------------------------------------
189
<PAGE>
Buffalo BU03XC001V 03/31/97
BU03XC002V 05/23/97
BU03XC003V 03/11/97
BU03XC004V 03/18/97
BU03XC005V 03/11/97
BU03XC006V 03/18/97
BU03XC007V 03/11/97
BU03XC008V 03/11/97
BU03XC011V 03/27/97
BU03XC012V 04/18/97
BU03XC014V 04/11/97
BU03XC015V 04/04/97
BU03XC021V 04/11/97
BU03XC024V 06/07/97
BU03XC025V 03/31/97
BU03XC026V 04/25/97
BU03XC027V 03/21/97
BU03XC028V 04/23/97
BU03XC029V 03/31/97
BU03XC030V 04/25/97
BU03XC033V 04/03/97
BU03XC034V 03/27/97
BU03XC035V 04/03/97
BU03XC036V 03/26/97
BU03XC038V 04/03/97
BU03XC040V 04/03/97
BU03XC041V 03/31/97
BU03XC042V 03/26/97
BU03XC043V 04/23/97
BU03XC044V 04/25/97
BU03XC045V 03/27/97
BU03XC046V 03/06/97
BU03XC047V 05/02/97
BU03XC048V 03/06/97
BU03XC050V 03/21/97
BU03XC052V 04/11/97
BU03XC053V 03/27/97
BU03XC055V 04/03/97
BU03XC056V 04/18/97
BU03XC057V 04/04/97
BU03XC063V 03/26/97
BU03XC066V 04/11/97
BU03XC068V 04/25/97
<PAGE>
BU03XC071V 04/18/97
BU03XC072V 03/06/97
BU03XC077V 03/11/97
BU03XC010V 07/08/97
BU03XC013V 06/22/97
BU03XC016V 12/03/97
BU03XC017V 06/21/97
BU03XC018V 06/21/97
BU03XC019V 06/21/97
BU03XC023V 07/08/97
BU03XC049V 06/21/97
BU03XC051V 06/22/97
BU03XC058V 06/22/97
BU03XC062V 08/08/97
BU03XC065V 06/22/97
BU03XC069V 08/08/97
BU03XC070V 06/22/97
BU03XC073V 04/25/97
BU03XC075V 04/18/97
---------------------------------------------------------------------------------------------------
62
Denver DN03XC001V 12/02/96
DN03XC003V 11/08/96
DN03XC004V 12/10/96
DN03XC005V 11/30/96
DN03XC006V 12/11/96
DN03XC008V 01/12/97
DN03XC009V 10/08/96
DN03XC010V 01/04/97
DN03XC011V 12/11/96
DN03XC012V 10/21/96
DN03XC013V 01/20/97
DN03XC017V 09/25/96
DN03XC018V 10/07/96
DN03XC019V 01/20/97
DN03XC020V 11/18/96
DN03XC021V 12/03/96
DN03XC031V 01/18/97
DN03XC033V 01/03/97
DN03XC034V 12/24/96
DN03XC035V 12/13/96
DN03XC036V 12/24/96
DN03XC037V 01/25/97
<PAGE>
DN03XC040V 09/17/96
DN03XC041V 11/11/96
DN03XC043V 11/27/96
DN03XC044V 11/07/96
DN03XC045V 01/21/97
DN03XC046V 11/20/96
DN03XC047V 11/29/96
DN03XC048V 01/20/97
DN03XC049V 01/10/97
DN03XC050V 10/10/96
DN03XC056V 12/03/96
DN03XC057V 01/21/97
DN03XC058V 10/11/96
DN03XC059V 01/23/97
DN03XC060V 01/18/97
DN03XC061V 01/10/97
DN03XC062V 12/13/96
DN03XC063V 12/14/96
DN03XC064V 12/13/96
DN03XC065V 10/28/96
DN03XC066V 10/23/96
DN03XC067V 01/04/97
DN03XC068V 12/05/96
DN03XC071V 01/23/97
DN03XC072V 10/07/96
DN03XC075V 12/27/96
DN03XC076V 01/22/97
DN03XC077V 11/22/96
DN03XC078V 01/14/97
DN03XC079V 01/22/97
DN03XC080V 12/14/96
DN03XC081V 10/28/96
DN03XC084V 12/14/96
DN03XC085V 12/14/96
DN03XC087V 01/21/97
DN03XC091V 08/06/96
DN03XC092V 12/05/96
DN03XC093V 10/15/96
DN03XC094V 12/11/96
DN03XC095V 01/02/97
DN03XC096V 12/02/96
DN03XC097V 10/28/96
DN03XC098V 12/11/96
<PAGE>
DN03XC100V 11/15/96
DN03XC101V 01/24/97
DN03XC102V 09/24/96
DN03XC103V 12/12/96
DN03XC105V 12/13/96
DN03XC106V 10/28/96
DN03XC107V 01/17/97
DN03XC108V 10/14/96
DN03XC109V 01/23/97
DN03XC110V 08/19/96
DN03XC111V 12/03/96
DN03XC112V 09/07/96
DN03XC113V 01/23/97
DN03XC114V 12/30/96
DN03XC116V 01/25/97
DN03XC119V 10/24/96
DN03XC120V 09/03/96
DN03XC121V 01/25/97
DN03XC122V 12/12/96
DN03XC123V 01/02/97
DN03XC125V 11/07/96
DN03XC126V 01/07/97
DN03XC127V 09/23/96
DN03XC128V 12/02/96
DN03XC130V 02/12/97
DN03XC131V 01/18/97
DN03XC135V 09/20/96
DN03XC136V 12/14/96
DN03XC138V 11/10/96
DN03XC139V 12/13/96
DN03XC142V 11/05/96
DN03XC147V 01/17/97
DN03XC148V 01/02/97
DN03XC149V 12/11/96
DN03XC150V 12/06/96
DN03XC152V 11/18/96
DN03XC155V 12/14/96
---------------------------------------------------------------------------------------------------
102
Detroit DE03XC003AV 06/09/97
DE03XC009AV 07/30/97
DE03XC010BV 05/13/97
DE03XC014BV 06/19/97
<PAGE>
DE03XC016AV 04/10/97
DE03XC017AV 02/03/97
DE03XC019AV 08/08/97
DE03XC020BV 07/23/97
DE03XC022AV 06/12/97
DE03XC027AV 06/13/97
DE03XC036AV 07/07/97
DE03XC037BV 06/19/97
DE03XC038AV 07/10/97
DE03XC042BV 08/07/97
DE03XC044AV 06/09/97
DE03XC050AV 06/11/97
DE03XC053AV 06/18/97
DE03XC056AV 06/11/97
DE03XC059AV 12/11/96
DE03XC060AV 07/16/97
DE03XC061AV 06/10/97
DE03XC063XV 07/27/97
DE03XC066BV 06/18/97
DE03XC071AV 06/24/97
DE03XC072AV 07/25/97
DE03XC074AV 04/07/97
DE03XC075AV 07/22/97
DE03XC079AV 07/21/97
DE03XC081CV 07/29/97
DE03XC082AV 05/15/97
DE03XC085BV 07/28/97
DE03XC086BV 07/25/97
DE03XC087AV 06/13/97
DE03XC094AV 07/24/97
DE03XC095AV 05/09/97
DE03XC096BV 06/16/97
DE03XC100AV 05/23/97
DE03XC102BV 07/26/97
DE03XC104AV 06/29/97
DE03XC105AV 08/01/97
DE03XC107BV 06/16/97
DE03XC115BV 07/24/97
DE03XC117AV 07/25/97
DE03XC118BV 07/31/97
DE03XC127AV 04/28/97
DE03XC132BV 07/11/97
DE03XC133AV 06/17/97
<PAGE>
DE03XC134AV 05/30/97
DE03XC136AV 07/03/97
DE03XC137AV 03/31/97
DE03XC138BV 07/28/97
DE03XC140BV 07/29/97
DE03XC142AV 06/26/97
DE03XC144AV 06/26/97
DE03XC145AV 08/07/97
DE03XC147AV 06/27/97
DE03XC151AV 08/13/97
DE03XC153AV 04/17/97
DE03XC155AV 04/15/97
DE03XC156AV 04/01/97
DE03XC157AV 04/24/97
DE03XC158AV 06/27/97
DE03XC160AV 04/21/97
DE03XC161AV 06/30/97
DE03XC162AV 06/30/97
DE03XC163AV 07/16/97
DE03XC166BV 07/23/97
DE03XC167AV 05/20/97
DE03XC168BV 07/21/97
DE03XC170BV 06/17/97
DE03XC171AV 07/01/97
DE03XC173BV 07/01/97
DE03XC174BV 07/09/97
DE03XC176AV 05/21/97
DE03XC177AV 03/26/97
DE03XC178BV 07/16/97
DE03XC184BV 07/31/97
DE03XC185AV 01/23/97
DE03XC186AV 05/02/97
DE03XC193BV 07/02/97
DE03XC194AV 05/22/97
DE03XC195AV 06/20/97
DE03XC199AV 04/16/97
DE03XC205AV 06/23/97
DE03XC208AV 08/07/97
DE03XC211BV 07/26/97
DE03XC217AV 07/31/97
DE03XC221AV 06/06/97
DE03XC227AV 04/04/97
DE03XC230AV 07/29/97
DE03XC237AV 05/12/97
<PAGE>
DE03XC238AV 04/30/97
DE03XC241AV 05/27/97
DE03XC243AV 06/25/97
DE03XC246AV 06/23/97
DE03XC113BV 05/06/97
DE03XC024BV 10/14/97
DE03XC026AV 07/26/97
DE03XC028CV 08/26/97
DE03XC029AV 08/08/97
DE03XC030AV 10/28/97
DE03XC031AV 10/13/97
DE03XC032AV 10/29/97
DE03XC033BV 06/04/97
DE03XC035AV 06/10/97
DE03XC041AV 10/14/97
DE03XC047AV 08/20/97
DE03XC057AV 09/25/97
DE03XC062AV 12/09/97
DE03XC064AV 10/27/97
DE03XC070BV 08/22/97
DE03XC077AV 08/01/97
DE03XC078AV 09/18/97
DE03XC088AV 08/21/97
DE03XC089XV 01/05/98
DE03XC091AV 07/22/97
DE03XC093BV 10/20/97
DE03XC099AV 11/26/97
DE03XC101AV 01/12/98
DE03XC106AV 08/06/97
DE03XC108BV 08/21/97
DE03XC109AV 08/20/97
DE03XC110AV 10/07/97
DE03XC111AV 07/30/97
DE03XC114BV 08/29/97
DE03XC119AV 08/29/97
DE03XC121BV 01/05/98
DE03XC122AV 07/18/97
DE03XC123BV 10/21/97
DE03XC124BV 08/26/97
DE03XC125BV 10/20/97
DE03XC126AV 08/27/97
DE03XC128AV 09/19/97
DE03XC129BV 08/27/97
DE03XC135BV 09/08/97
<PAGE>
DE03XC139AV 09/30/97
DE03XC148AV 10/04/97
DE03XC152BV 10/13/97
DE03XC165AV 10/02/97
DE03XC172AV 10/30/97
DE03XC175XV 09/15/97
DE03XC179AV 09/22/97
DE03XC187AV 09/30/97
DE03XC188BV 01/07/98
DE03XC190BV 11/21/97
DE03XC191BV 07/28/97
DE03XC192BV 06/20/97
DE03XC196AV 12/12/97
DE03XC201AV 08/06/97
DE03XC202AV 08/25/97
DE03XC203AV 09/12/97
DE03XC206BV 07/02/97
DE03XC207BV 10/29/97
DE03XC210AV 08/02/97
DE03XC212BV 10/01/97
DE03XC213AV 12/23/97
DE03XC215AV 09/02/97
DE03XC216AV 10/13/97
DE03XC219BV 07/27/97
DE03XC220AV 07/29/97
DE03XC222AV 10/01/97
DE03XC223BV 11/17/97
DE03XC226AV 07/30/97
DE03XC229AV 09/02/97
DE03XC232BV 09/08/97
DE03XC233AV 10/04/97
DE03XC236BV 10/30/97
DE03XC239AV 11/24/97
DE03XC244BV 08/25/97
DE03XC247AV 09/17/97
---------------------------------------------------------------------------------------------------
170
Fresno FS03XC256V 10/02/96
FS03XC257V 10/09/96
FS03XC259V 10/02/96
FS03XC260V 10/14/96
FS03XC261V 10/14/96
FS03XC263V 10/09/96
<PAGE>
FS03XC264V 07/15/96
FS03XC265V 07/14/96
FS03XC266V 07/08/96
FS03XC267V 07/08/96
FS03XC271V 10/03/96
FS03XC272V 07/14/96
FS03XC273V 07/14/96
FS03XC274V 07/15/96
FS03XC275V 08/23/96
FS03XC276V 10/03/96
FS03XC278V 10/01/96
FS03XC279V 10/10/96
FS03XC283V 09/30/96
FS03XC284V 09/30/96
FS03XC285V 10/24/96
FS03XC286V 07/05/96
FS03XC287V 08/03/96
FS03XC288V 07/15/96
FS03XC291V 07/05/96
FS03XC292V 10/01/96
FS03XC293V 08/24/96
---------------------------------------------------------------------------------------------------
27
Hartford CT03XC001V 06/05/97
CT03XC002V 12/20/96
CT03XC004V 02/21/97
CT03XC010V 08/07/97
CT03XC012V 06/17/97
CT03XC013V 08/07/97
CT03XC018V 06/09/97
CT03XC025V 03/12/97
CT03XC026V 04/29/97
CT03XC034V 06/19/97
CT03XC042V 07/03/97
CT03XC045V 03/04/97
CT03XC046V 07/25/97
CT03XC051V 12/04/96
CT03XC053V 06/06/97
CT03XC054V 05/06/97
CT03XC055V 08/05/97
CT03XC056V 07/09/97
CT03XC057V 04/17/97
CT03XC058V 02/14/97
<PAGE>
CT03XC060V 02/21/97
CT03XC061V 02/13/97
CT03XC062V 07/16/97
CT03XC063V 06/11/97
CT03XC064V 02/24/97
CT03XC065V 04/08/97
CT03XC066V 04/03/97
CT03XC067V 08/14/97
CT03XC069V 06/27/97
CT03XC070V 04/11/97
CT03XC074V 08/13/97
CT03XC075V 06/06/97
CT03XC076V 04/23/97
CT03XC078V 04/11/97
CT03XC081V 06/16/97
CT03XC082V 02/13/97
CT03XC083V 04/23/97
CT03XC084V 07/03/97
CT03XC086V 04/16/97
CT03XC090V 04/30/97
CT03XC091V 06/12/97
CT03XC092V 06/12/97
CT03XC093V*1 08/20/97
CT03XC095V 02/28/97
CT03XC096V 02/18/97
CT03XC097V 02/18/97
CT03XC098V 03/21/97
CT03XC104V 07/02/97
CT03XC111V 04/29/97
CT03XC120V 07/28/97
CT03XC153V 06/16/97
CT03XC157V 12/04/96
CT03XC162V 06/04/97
CT03XC168V 06/20/97
CT03XC169V 07/15/97
CT03XC201V 02/19/97
CT03XC202V 02/24/97
CT03XC204V 04/30/97
CT03XC206V 02/24/97
CT03XC220V 07/15/97
CT03XC221V*1 08/05/97
CT03XC223V 04/06/97
CT03XC224V 06/18/97
<PAGE>
CT03XC227V 06/18/97
CT03XC251V 08/05/97
CT03XC325V 06/03/97
CT03XC326V 08/14/97
CT03XC331V 03/04/97
CT03XC332V 04/21/97
CT03XC340V 05/28/97
CT03XC341V 04/18/97
CT03XC348V 06/14/97
CT03XC352V 05/16/97
CT03XC355V 06/17/97
CT03XC366V 04/09/97
CT03XC370V 06/10/97
CT03XC372V 04/21/97
CT03XC378V 04/28/97
CT03XC381V 04/18/97
CT03XC003V 11/18/97
CT03XC006V 10/28/97
CT03XC007V 11/08/97
CT03XC008V 11/05/97
CT03XC009V 11/05/97
CT03XC011V 12/20/97
CT03XC021V 11/17/97
CT03XC038V 09/04/97
CT03XC039V 11/14/97
CT03XC040V 11/25/97
CT03XC043V 06/13/97
CT03XC044V 09/04/97
CT03XC049V 08/11/97
CT03XC071V 09/17/97
CT03XC088V 12/19/97
CT03XC106V 12/01/97
CT03XC151V*2 11/06/97
CT03XC156V 11/19/97
CT03XC171V 11/12/97
CT03XC172V 09/02/97
CT03XC181V 11/10/97
CT03XC205V 06/27/97
CT03XC208V 08/04/97
CT03XC211V*2 12/02/97
CT03XC225V 06/18/97
CT03XC226V 08/13/97
CT03XC229V 08/13/97
<PAGE>
CT03XC327V 12/24/97
CT03XC334V 11/25/97
CT03XC337V 12/12/97
CT03XC349V*1 11/21/97
CT03XC350V 09/03/97
CT03XC353V 09/16/97
CT03XC371V 12/10/97
CT03XC376V 12/04/97
CT03XC377V 12/10/97
---------------------------------------------------------------------------------------------------
115
Long Island NY07XC519V 09/04/97
NY07XC619V 09/04/97
NY07XC622V 09/08/97
NY07XC646V 08/20/97
NY07XC701V 08/01/97
NY07XC702V 07/29/97
NY07XC705V 09/07/97
NY07XC706V 06/12/97
NY07XC707V 09/04/97
NY07XC708V 08/20/97
NY07XC711V 09/04/97
NY07XC714V 08/01/97
NY07XC715V 06/17/97
NY07XC716V 08/01/97
NY07XC723V 09/10/97
NY07XC728V 07/29/97
NY07XC731V 09/24/97
NY07XC733V 06/17/97
NY07XC735V 06/12/97
NY07XC736V 06/12/97
NY07XC737V 09/07/97
NY07XC740V 07/29/97
NY07XC741V 08/20/97
NY07XC746V 08/01/97
NY07XC748V 08/29/97
NY07XC749V 06/12/97
NY07XC750V 09/08/97
NY07XC753V 06/17/97
NY07XC754V 09/04/97
NY07XC755V 09/17/97
NY07XC756V 08/20/97
NY07XC764V 09/24/97
<PAGE>
NY07XC766V 09/24/97
NY07XC768V 08/29/97
NY07XC769V 08/20/97
NY07XC771V 09/04/97
NY07XC773V 09/07/97
NY07XC774V 09/08/97
NY07XC776V 09/07/97
NY07XC777V 06/17/97
NY07XC778V 08/29/97
NY07XC784V 09/07/97
NY07XC787V 07/29/97
NY07XC604V 12/18/97
NY07XC703V 12/12/97
NY07XC713V 10/24/97
NY07XC770V 09/24/97
NY07XC782V 12/12/97
NY07XC783V 10/24/97
---------------------------------------------------------------------------------------------------
49
Manhattan NY04XC801V 01/24/97
NY04XC802V 01/14/97
NY04XC803V 01/15/97
NY04XC804V 01/21/97
NY04XC805V 01/17/97
NY04XC806V 01/21/97
NY04XC807V 01/07/97
NY04XC808V 01/31/97
NY04XC811V 01/21/97
NY04XC812V 01/21/97
NY04XC813V 01/16/97
NY04XC816V 12/30/96
NY04XC817V 01/10/97
NY04XC818V 01/16/97
NY04XC820V 02/20/97
NY04XC830V 03/20/97
NY04XC831V 01/07/97
NY04XC832V 03/05/97
NY04XC833V 04/13/97
NY04XC834V 02/13/97
NY04XC835V 01/10/97
NY04XC837V 02/18/97
NY04XC838V 01/13/97
NY04XC839V 01/29/97
<PAGE>
NY04XC840V 01/22/97
NY04XC842V 02/17/97
NY04XC843V 03/01/97
NY04XC844V 02/23/97
NY04XC845V 01/14/97
NY04XC850V 01/31/97
NY04XC851V 03/01/97
NY04XC852V 03/28/97
NY04XC853V 03/27/97
NY04XC854V 02/13/97
NY04XC856V 02/20/97
NY04XC857V 02/17/97
NY04XC859V 03/13/97
NY04XC860V 01/16/97
NY04XC865V 01/10/97
NY04XC866V 01/31/97
NY04XC867V 03/20/97
NY04XC868V 03/13/97
NY04XC869V 02/01/97
NY04XC870V 02/05/97
NY04XC871V 01/14/97
NY04XC872V 01/16/97
NY04XC875V 01/28/97
NY04XC877V 01/22/97
NY04XC880V 01/24/97
NY04XC881V 03/20/97
NY04XC882V 01/13/97
NY04XC888V 01/17/97
NY04XC891V 01/22/97
NY04XC893V 03/20/97
NY04XC894V 01/28/97
NY04XC895V 01/07/97
NY04XC898V 01/22/97
NY04XC809v 05/06/97
NY04XC810v 06/06/97
NY04XC814v 05/08/97
NY04XC824v 04/18/97
NY04XC836v 04/08/97
NY04XC846v 04/18/97
NY04XC855v 04/18/97
NY04XC862v 05/02/97
NY14XC923v 11/14/97
NY14XC922v 10/08/97
<PAGE>
NY14XC925v 12/18/97
NY14XC926v 11/15/97
NY14XC927v 11/20/97
NY14XC929v 11/20/97
NY04XC821V 01/31/97
NY04XC822V 01/29/97
NY04XC823V 01/31/97
NY04XC825V 02/03/97
NY04XC826V 02/11/97
NY04XC827V 02/11/97
NY04XC828V 03/03/97
NY04XC829V 03/03/97
---------------------------------------------------------------------------------------------------
79
Milwaukee ML03XC104V 06/27/96
ML03XC105V 10/17/96
ML03XC106V 10/28/96
ML03XC108V 09/26/96
ML03XC109V 07/29/96
ML03XC110V 09/20/96
ML03XC111V 09/25/96
ML03XC112V 09/25/96
ML03XC117V 11/07/96
ML03XC119V 09/16/96
ML03XC120V 09/10/96
ML03XC121V 10/21/96
ML03XC122V 07/31/96
ML03XC124V 08/22/96
ML03XC127V 09/03/96
ML03XC128V 10/02/96
ML03XC129V 08/15/96
ML03XC131V 09/19/96
ML03XC132V 11/04/96
ML03XC133V 09/20/96
ML03XC134V 07/31/96
ML03XC137V 09/18/96
ML03XC144V 11/05/96
ML03XC147V 09/13/96
ML03XC149V 11/27/96
ML03XC150V 09/13/96
ML03XC153V 11/15/96
ML03XC155V 09/24/96
ML03XC160V 10/31/96
<PAGE>
ML03XC162V 11/04/96
ML03XC170V 11/15/96
ML03XC172V 10/29/96
ML03XC173V 11/06/96
ML03XC174V 10/29/96
ML03XC175V 11/08/96
ML03XC205V 03/22/97
ML03XC206V 11/25/96
ML03XC211V 09/16/96
ML03XC219V 09/27/96
ML03XC220V 11/01/96
ML03XC223V 11/05/96
ML03XC240V 12/02/96
ML03XC255V 12/04/96
ML03XC276V 11/20/96
ML03XC302V 09/19/96
ML03XC303V 11/01/96
ML03XC304V 08/23/96
ML03XC307V 11/08/96
ML03XC507V 11/15/96
ML03XC510V 11/08/96
ML03XC512V 12/09/96
ML03XC515V 08/30/96
ML03XC517V 10/18/96
---------------------------------------------------------------------------------------------------
53
New Hamp/Maine NM03XC001V 02/21/97
NM03XC002V 03/04/97
NM03XC003V 03/04/97
NM03XC004V 02/25/97
NM03XC005V 03/25/97
NM03XC006V 01/23/97
NM03XC007V 03/03/97
NM03XC008V 01/22/97
NM03XC010V 01/14/97
NM03XC011V 03/11/97
NM03XC013V 12/23/96
NM03XC014V 03/10/97
NM03XC015V 03/15/97
NM03XC017V 04/22/97
NM03XC019V 03/08/97
NM03XC020V 02/12/97
NM03XC021V 03/06/97
<PAGE>
NM03XC022V 01/29/97
NM03XC023V 03/06/97
NM03XC024V 02/28/97
NM03XC025V 03/13/97
NM03XC026V 02/28/97
NM03XC027V 09/16/96
NM03XC028V 02/24/97
NM03XC029V 01/31/97
NM03XC037V 02/24/97
NM03XC039V 02/26/97
NM03XC040V 03/05/97
NM03XC041V 02/19/97
NM03XC042V 10/21/96
NM03XC043V 01/16/97
NM03XC044V 02/04/97
NM03XC045V 02/06/97
NM03XC047V 03/07/97
NM03XC048V 03/14/97
NM03XC049V 03/03/97
NM03XC050V 03/14/97
NM03XC052V 03/21/97
NM03XC053V 03/12/97
NM03XC056V 02/27/97
NM03XC057V 03/17/97
NM03XC058V 02/03/97
NM03XC069V 10/30/96
NM03XC059V 01/30/97
NM03XC060V 10/02/96
NM03XC061V 03/20/97
NM03XC062V 02/05/97
NM03XC065V 12/19/96
NM03XC066V 03/17/97
NM03XC067V 08/06/96
NM03XC068V 03/18/97
NM03XC070V 02/13/97
NM03XC071V 02/13/97
NM03XC072V 03/01/97
NM03XC009V 10/28/97
NM03XC012V 04/24/97
NM03XC016V 09/22/97
NM03XC038V 10/22/97
NM03XC046V 09/27/97
NM03XC051V 07/29/97
<PAGE>
NM03XC054V 11/07/97
NM03XC055V 05/29/97
NM03XC063V 05/21/97
NM03XC073V 07/29/97
NM03XC074V 03/19/97
---------------------------------------------------------------------------------------------------
65
New Jersey NY03XC001V 07/03/97
NY03XC003V 06/12/97
NY03XC008V 07/25/97
NY03XC009V 09/05/97
NY03XC010V 09/05/97
NY03XC013V 09/09/97
NY03XC018V 07/18/97
NY03XC021V 08/30/97
NY03XC022V 09/05/97
NY03XC023V 09/03/97
NY03XC024V 09/05/97
NY03XC027V 06/18/97
NY03XC035V 09/10/97
NY03XC040V 06/13/97
NY03XC041V 08/29/97
NY03XC042V 06/13/97
NY03XC043V 07/25/97
NY03XC044V 09/09/97
NY03XC046V 08/08/97
NY03XC050V 06/20/97
NY03XC055V 09/06/97
NY03XC057V 09/12/97
NY03XC060V 09/06/97
NY03XC072V 06/20/97
NY03XC074V 09/12/97
NY03XC075V 09/10/97
NY03XC077V 09/06/97
NY03XC078V 09/09/97
NY03XC081V 09/03/97
NY03XC083V 09/03/97
NY03XC094V 09/03/97
NY03XC096V 09/03/97
NY03XC098V 09/12/97
NY03XC100V 09/03/97
NY03XC104V 09/06/97
NY03XC105V 09/06/97
<PAGE>
NY03XC107V 09/06/97
NY03XC108V 09/06/97
NY03XC109V 09/12/97
NY03XC111V 09/06/97
NY03XC112V 06/18/97
NY03XC113V 09/06/97
NY03XC114V 09/10/97
NY03XC119V 09/08/97
NY03XC126V 06/13/97
NY03XC127V 09/10/97
NY03XC133V 08/27/97
NY03XC134V 09/03/97
NY03XC138V 08/30/97
NY03XC139V 08/29/97
NY03XC141V 08/29/97
NY03XC143V 09/30/97
NY03XC144V 09/12/97
NY03XC146V 08/30/97
NY03XC147V 08/30/97
NY03XC154V 09/04/96
NY03XC156V 07/18/97
NY03XC158V 08/29/97
NY03XC181V 08/08/97
NY03XC261V 09/08/97
NY03XC183V 08/15/97
NY03XC184V 07/03/97
NY03XC186V 07/25/97
NY03XC188V 08/15/97
NY03XC189V 08/08/97
NY03XC190V 07/03/97
NY03XC195V 09/06/97
NY03XC201V 09/09/97
NY03XC214V 08/15/97
NY03XC243V 09/09/97
NY03XC244V 09/09/97
NY03XC250V 08/27/97
NY03XC251V 10/01/97
NY03XC253V 09/03/97
NY03XC263V 08/27/97
BIL1#1 11/25/97
NY03XC032V 12/13/97
NY03XC059V 10/06/97
NY03XC071V 12/09/97
<PAGE>
NY03XC082V 10/01/97
NY03XC088V 10/06/97
NY03XC092V 12/23/97
NY03XC095V 12/23/97
NY03XC097V 10/01/97
NY03XC101V 12/09/97
NY03XC103V 12/09/97
NY03XC140V 12/16/97
NY03XC187V 12/19/97
NY03XC197V 12/08/97
NY03XC212V 10/17/97
NY03XC242V 11/24/97
NY03XC260V 12/13/97
---------------------------------------------------------------------------------------------------
92
New York BBQ NY04XC300V 02/06/97
NY04XC301V 02/04/97
NY04XC302V 02/14/97
NY04XC303V 02/24/97
NY04XC304V 02/06/97
NY04XC306V 02/14/97
NY04XC307V 02/06/97
NY04XC309V 02/07/97
NY04XC311V 02/07/97
NY04XC312V 02/14/97
NY04XC313V 02/14/97
NY04XC314V 02/23/97
NY04XC315V 02/14/97
NY04XC316V 02/06/97
NY04XC317V 02/07/97
NY04XC319V 02/23/97
NY04XC320V 03/13/97
NY04XC321V 03/13/97
NY04XC322V 02/14/97
NY04XC324V 02/06/97
NY04XC501V 03/05/97
NY04XC502V 02/25/97
NY04XC504V 02/12/97
NY04XC505V 03/13/97
NY04XC507V 03/19/97
NY04XC508V 02/18/97
NY04XC509V 02/25/97
NY04XC510V 02/22/97
NY04XC511V 02/18/97
<PAGE>
NY04XC512V 02/19/97
NY04XC513V 02/15/97
NY04XC514V 02/19/97
NY04XC518V 02/19/97
NY04XC520V 02/19/97
NY04XC521V 02/25/97
NY04XC522V 02/19/97
NY04XC523V 02/15/97
NY04XC525V 02/13/97
NY04XC527V 02/22/97
NY04XC528V 02/08/97
NY04XC529V 02/22/97
NY04XC530V 03/12/97
NY04XC531V 02/18/97
NY04XC533V 02/28/97
NY04XC540V 02/16/97
NY04XC544V 02/24/97
NY04XC601V 02/21/97
NY04XC603V 02/05/97
NY04XC607V 02/12/97
NY04XC609V 02/12/97
NY04XC610V 03/10/97
NY04XC614V 02/21/97
NY04XC615V 02/20/97
NY04XC617V 02/05/97
NY04XC618V 02/17/97
NY04XC620V 02/24/97
NY04XC621V 02/21/97
NY04XC623V 02/20/97
NY04XC624V 02/05/97
NY04XC625V 02/12/97
NY04XC626V 02/17/97
NY04XC628V 02/20/97
NY04XC631V 02/21/97
NY04XC633V 02/13/97
NY04XC634V 03/19/97
NY04XC636V 03/11/97
NY04XC637V 02/12/97
NY04XC639V 03/10/97
NY04XC640V 02/15/97
NY04XC641V 02/17/97
NY04XC642V 02/08/97
NY04XC644V 02/28/97
<PAGE>
NY04XC645V 02/08/97
NY04XC647V 03/19/97
NY04XC648V 02/21/97
NY04XC649V 03/15/97
NY04XC652V 03/13/97
NY04XC653V 02/05/97
NY04XC655V 02/28/97
NY04XC656V 02/08/97
NY04XC848V 02/07/97
NY04XC849V 02/04/97
NY05XC029V 04/30/97
NY05XC125V 11/09/97
NY05XC120V 05/06/97
NY05XC122V 09/08/97
NY05XC123V 06/08/97
NY05XC124V 05/23/97
NY05XC215V 05/06/97
NY05XC305V 05/08/97
NY05XC310V 08/22/97
NY05XC318V 04/08/97
NY05XC323V 06/07/97
NY05XC506V 07/09/97
NY05XC515V 05/14/97
NY05XC516V 07/09/97
NY05XC517V 12/08/97
NY05XC524V 05/02/97
NY05XC536V 05/14/97
NY05XC538V 08/01/97
NY05XC541V 05/14/97
NY05XC543V 04/07/97
NY05XC606V 11/14/97
NY05XC608V 05/13/97
NY05XC612V 07/09/97
NY05XC627V 04/07/97
NY05XC629V 04/07/97
NY05XC632V 06/26/97
NY05XC635V 07/18/97
NY05XC638V 06/26/97
NY15XC503V 11/15/97
NY15XC545V 12/11/97
NY15XC546V 12/11/97
NY15XC549V 11/21/97
NY15XC657V 11/21/97
<PAGE>
NY15XC658V 11/15/97
NY15XC659V 11/21/97
---------------------------------------------------------------------------------------------------
117
Philadelphia PL03XC001V 01/28/97
PL03XC002V 02/24/97
PL03XC003V 11/26/96
PL03XC004V 11/25/96
PL03XC005V 02/22/97
PL03XC006V 11/02/96
PL03XC007V 12/18/96
PL03XC008V 01/22/97
PL03XC009V 10/29/96
PL03XC011V 12/16/96
PL03XC012V 12/16/96
PL03XC013V 02/24/97
PL03XC014V 12/19/96
PL03XC015V 09/19/96
PL03XC016V 02/21/97
PL03XC017V 01/04/97
PL03XC018V 02/03/97
PL03XC019V 12/27/96
PL03XC021V 01/30/97
PL03XC022V 02/22/97
PL03XC026V 12/11/96
PL03XC028V 02/17/97
PL03XC030V 12/19/96
PL03XC031V 02/26/97
PL03XC032V 02/17/97
PL03XC033V 02/06/97
PL03XC034V 11/23/96
PL03XC035V 02/21/97
PL03XC036V 02/12/97
PL03XC037V 02/11/97
PL03XC038V 09/20/96
PL03XC039V 02/12/97
PL03XC042V 01/28/97
PL03XC046V 02/14/97
PL03XC047V 02/27/97
PL03XC049V 02/26/97
PL03XC050V 02/27/97
PL03XC051V 02/28/97
PL03XC058V 02/14/97
PL03XC059V 02/26/97
<PAGE>
PL03XC068V 02/12/97
PL03XC069V 02/21/97
PL03XC071V 02/26/97
PL03XC072V 02/10/97
PL03XC074V 02/19/97
PL03XC075V 02/27/97
PL03XC076V 01/16/97
PL03XC078V 02/28/97
PL03XC079V 02/27/97
PL03XC080V 12/31/96
PL03XC081V 01/29/97
PL03XC082V 02/15/97
PL03XC084V 02/28/97
PL03XC085V 02/28/97
PL03XC086V 03/04/97
PL03XC090V 02/21/97
PL03XC099V 02/28/97
PL03XC101V 02/24/97
PL03XC108V 02/06/97
PL03XC120V 03/14/97
PL03XC121V 02/18/97
PL03XC122V 02/11/97
PL03XC123V 02/11/97
PL03XC124V 12/11/96
PL03XC125V 03/03/97
PL03XC127V 02/22/97
PL03XC128V 03/01/97
PL03XC129V 12/13/96
PL03XC131V 12/27/96
PL03XC132V 02/28/97
PL03XC133V 12/17/96
PL03XC135V 02/27/97
PL03XC136V 02/19/97
PL03XC137V 02/20/97
PL03XC138V 12/30/96
PL03XC140V 03/05/97
PL03XC144V 02/10/97
PL03XC148V 02/28/97
PL03XC149V 02/26/97
PL03XC150V 02/28/97
PL03XC151V 12/02/96
PL03XC152V 02/26/97
PL03XC153V 02/27/97
<PAGE>
PL03XC154V 01/30/97
PL03XC157V 12/23/96
PL03XC159V 01/15/97
PL03XC160V 12/17/96
PL03XC162V 02/28/97
PL03XC163V 02/06/97
PL03XC165V 02/28/97
PL03XC168V 01/30/97
PL03XC170V 02/24/97
PL03XC171V 02/13/97
PL03XC179V 02/24/97
PL03XC183V 03/14/97
PL03XC196V 02/14/97
PL03XC197V 11/22/96
PL03XC198V 01/09/97
PL03XC200V 02/13/97
PL03XC029V 05/14/97
PL03XC203V 02/20/97
PL03XC207V 03/07/97
PL03XC209V 05/20/96
PL03XC219V 02/05/97
PL03XC223V 03/04/97
PL03XC224V 03/20/97
PL03XC225V 01/31/97
PL03XC226V 02/03/97
PL03XC229V 02/04/97
PL03XC232V 03/06/97
PL03XC234V 03/06/97
PL03XC236V 02/26/97
PL03XC237V 03/14/97
PL03XC239V 02/26/97
PL03XC247V 12/19/96
PL03XC248V 02/13/97
PL03XC250V 01/19/97
PL03XC251V 02/28/97
PL03XC258V 02/27/97
PL03XC259V 02/21/97
PL03XC263V 02/25/97
PL03XC024V 04/15/97
PL03XC027V 03/13/97
PL03XC043V 09/02/97
PL03XC044V 10/23/97
PL03XC052V 10/24/97
<PAGE>
PL03XC055V 05/14/97
PL03XC057V 05/14/97
PL03XC064V 09/18/97
PL03XC066V 03/31/97
PL03XC077V 03/20/97
PL03XC083V 03/14/97
PL03XC093V 05/08/97
PL03XC096V 10/28/97
PL03XC097V 10/28/97
PL03XC100V 09/30/97
PL03XC105V 06/25/97
PL03XC107V 10/22/97
PL03XC113V 03/21/97
PL03XC114V 12/26/97
PL03XC116V 04/21/97
PL03XC134V 10/22/97
PL03XC141V 04/17/97
PL03XC142V 06/20/97
PL03XC143V 06/20/97
PL03XC145V 12/15/97
PL03XC146V 06/16/97
PL03XC155V 09/02/97
PL03XC156V 07/01/97
PL03XC158V 03/26/97
PL03XC161V 06/27/97
PL03XC164V 11/25/97
PL03XC166V 03/26/97
PL03XC167V 10/23/97
PL03XC172V 06/03/97
PL03XC173V 05/28/97
PL03XC174V 10/13/97
PL03XC175V 03/21/97
PL03XC176V 06/20/97
PL03XC177V 09/30/97
PL03XC182V 08/25/97
PL03XC187V 10/24/97
PL03XC202V 09/25/97
PL03XC205V 04/15/97
PL03XC206V 11/20/97
PL03XC214V 07/16/97
PL03XC215V 08/06/97
PL03XC216V 12/05/97
PL03XC227V 03/21/97
<PAGE>
PL03XC230V 04/10/97
PL03XC233V 10/24/97
PL03XC243V 09/16/97
PL03XC244V 05/20/97
PL03XC245V 05/20/97
PL03XC246V 07/08/97
PL03XC249V 09/22/97
PL03XC252V 12/23/97
PL03XC253V 06/20/97
PL03XC255V 05/17/97
PL03XC256V 11/21/97
PL03XC265V 12/15/97
PL01XC094V 01/09/98
PL01XC102V 12/26/97
PL01XC192V 01/09/98
PL01XC268V 01/05/98
PL01XC270V 12/12/98
---------------------------------------------------------------------------------------------------
186
Phoenix PH03XC001V 02/08/97
PH03XC002V 01/13/97
PH03XC003V 03/03/97
PH03XC004V 04/25/97
PH03XC005V 03/06/97
PH03XC007V 03/10/97
PH03XC008V 04/10/97
PH03XC012V 04/14/97
PH03XC013V 03/10/97
PH03XC014V 01/10/97
PH03XC015V 01/04/97
PH03XC037V 04/17/97
PH03XC038V 03/11/97
PH03XC039V 04/08/97
PH03XC040V 03/07/97
PH03XC041V 05/02/97
PH03XC042V 04/11/97
PH03XC045V 03/24/97
PH03XC046V 04/09/97
PH03XC047V 04/29/97
PH03XC048V 04/28/97
PH03XC051V 04/28/97
PH03XC049V 04/10/97
PH03XC050V 04/21/97
<PAGE>
PH03XC052V 05/28/97
PH03XC053V 04/16/97
PH03XC054V 04/22/97
PH03XC055V 03/27/97
PH03XC056V 04/15/97
PH03XC060V 03/24/97
PH03XC061V 04/29/97
PH03XC062V 05/06/97
PH03XC063V 04/22/97
PH03XC078V 03/27/97
PH03XC079V 03/25/97
PH03XC080V 03/06/97
PH03XC081V 03/04/97
PH03XC082V 04/18/97
PH03XC083V 05/01/97
PH03XC084V 05/01/97
PH03XC085V 04/17/97
PH03XC086V 03/04/97
PH03XC087V 03/01/97
PH03XC091V 04/23/97
PH03XC092V 03/10/97
PH03XC093V 04/18/97
PH03XC094V 05/02/97
PH03XC095V 04/22/97
PH03XC096V 04/02/97
PH03XC097V 04/07/97
PH03XC098V 03/07/97
PH03XC099V 04/23/97
PH03XC100V 04/04/97
PH03XC101V 04/10/97
PH03XC102V 04/28/97
PH03XC103V 03/20/97
PH03XC179V 05/23/97
PH03XC104V 03/26/97
PH03XC106V 12/12/96
PH03XC107V 04/09/97
PH03XC108V 04/14/97
PH03XC109V 04/07/97
PH03XC111V 04/09/97
PH03XC112V 04/10/97
PH03XC114V 02/27/97
PH03XC115V 04/29/97
PH03XC120V 02/27/97
<PAGE>
PH03XC121V 03/27/97
PH03XC122V 03/25/97
PH03XC123V 03/04/97
PH03XC126V 02/26/97
PH03XC127V 04/01/97
PH03XC129V 04/11/97
PH03XC130V 05/22/97
PH03XC131V 04/26/97
PH03XC132V 04/10/97
PH03XC133V 05/23/97
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133
Pittsburgh PT03XC002V 09/12/96
PT03XC003V 11/08/96
PT03XC008V 12/05/96
PT03XC009V 11/19/96
PT03XC012V 11/07/96
PT03XC013V 11/04/96
PT03XC014V 11/22/96
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PT03XC016V 11/29/96
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PT03XC018V 11/26/96
PT03XC019V 11/20/96
PT03XC020V 08/29/96
PT03XC023V 09/12/96
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PT03XC031V 10/31/96
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PT03XC038V 11/04/96
PT03XC041V 10/29/96
PT03XC043V 06/26/96
PT03XC044V 11/08/96
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PT03XC046V 11/06/96
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PT03XC072V 09/11/96
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PT03XC202V 10/29/96
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PT03XC240V 08/29/96
PT03XC241V 11/15/96
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PT03XC408V 11/19/96
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PT03XC001V 04/03/97
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PT03XC030V 08/15/97
PT03XC033V 01/31/97
PT03XC040V 08/14/97
PT03XC051V 10/23/97
PT03XC057V 01/31/97
PT03XC069V 09/10/97
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PT03XC071V 12/23/96
PT03XC073V 12/16/96
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PT03XC120V 09/18/97
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PT03XC129V 10/29/96
PT03XC135V 06/17/97
PT03XC138V 06/18/97
PT03XC141V 12/13/96
PT03XC146V 01/31/97
PT03XC148V 01/07/97
PT03XC153V 12/17/96
PT03XC158V 05/02/97
PT03XC159V 04/08/97
PT03XC160V 12/23/96
PT03XC161V 12/11/96
PT03XC164V 02/07/97
PT03XC165V 06/16/97
PT03XC167V 07/18/97
PT03XC211V 06/19/97
PT03XC223V 05/23/97
PT03XC254V 04/11/97
PT03XC255V 08/14/97
PT03XC263V 01/31/97
PT03XC266V 01/21/97
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PT03XC268V 11/21/96
PT03XC275V 01/07/98
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PT03XC401V 08/07/97
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PT03XC406V 07/08/97
PT03XC407V 07/16/97
PT13XC103v 06/16/97
PT13XC170v 08/01/97
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183
Portland PO03XC001V 08/23/96
PO03XC002V 08/29/96
PO03XC003V 08/17/96
PO03XC004V 08/17/96
PO03XC005V 08/17/96
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PO03XC006V 06/14/96
PO03XC007V 10/19/96
PO03XC008V 11/06/96
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PO03XC011V 09/11/96
PO03XC014V 08/24/96
PO03XC015V 11/12/96
PO03XC016V 11/06/96
PO03XC017V 10/23/96
PO03XC018V 11/06/96
PO03XC019V 10/17/96
PO03XC020V 11/08/96
PO03XC021V 10/22/96
PO03XC022V 10/07/96
PO03XC023V 09/04/96
PO03XC026V 09/13/96
PO03XC027V 09/16/96
PO03XC028V 10/18/96
PO03XC029V 09/04/96
PO03XC030V 10/23/96
PO03XC031V 09/03/96
PO03XC032V 09/03/96
PO03XC033V 10/17/96
PO03XC034V 10/16/96
PO03XC035V 10/01/96
PO03XC036V 10/26/96
PO03XC037V 11/06/96
PO03XC038V 10/21/96
PO03XC039V 09/25/96
PO03XC040V 10/26/96
PO03XC041V 09/13/96
PO03XC042V 10/03/96
PO03XC043V 10/10/96
PO03XC044V 11/06/96
PO03XC046V 10/29/96
PO03XC047V 09/18/96
PO03XC048V 08/28/96
PO03XC049V 11/06/96
PO03XC050V 09/12/96
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PO03XC053V 11/27/96
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PO03XC055V 11/27/96
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PO03XC059V 11/01/96
PO03XC060V 11/29/96
PO03XC061V 10/09/96
PO03XC062V 11/25/96
PO03XC063V 10/22/96
PO03XC064V 11/13/96
PO03XC065V 10/29/96
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PO03XC068V 11/18/96
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PO03XC071V 09/26/96
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PO03XC106V 11/05/96
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PO03XC115V 10/31/96
PO03XC116V 10/23/96
PO03XC118V 08/28/96
PO03XC119V 11/18/96
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PO03XC122V 09/11/96
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PO03XC220V 09/18/97
PO03XCCOWV 06/24/97
PO03XCTOYV 10/10/97
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137
Rochester BU04XC001V 11/22/96
BU04XC002V 11/13/96
BU04XC003V 12/11/96
BU04XC005V 10/16/96
BU04XC006V 12/18/96
BU04XC008V 01/07/97
BU04XC010V 12/20/96
BU04XC014V 12/18/96
BU04XC018V 01/29/97
BU04XC019V 12/18/96
BU04XC020V 02/03/97
BU04XC021V 11/13/96
BU04XC023V 12/04/96
BU04XC024V 01/06/97
BU04XC029V 12/06/96
BU04XC030V 12/11/96
BU04XC032V 11/22/96
BU04XC041V 11/13/96
BU04XC042V 01/07/97
BU04XC043V 01/08/97
BU04XC045V 06/30/96
BU04XC052V 12/18/96
BU04XC056V 12/11/96
BU04XC058V 12/13/96
BU04XC065V 01/08/97
BU04XC066V 12/13/96
BU04XC067V 01/06/97
BU04XC074V 01/07/97
BU04XC077V 12/04/96
BU04XC078V 12/06/96
BU04XC079V 12/20/96
BU04XC081V 01/06/97
BU04XC085V 01/06/97
BU04XC088V 12/13/96
BU04XC093V 01/08/97
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<PAGE>
BU04XC102V 12/13/96
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BU04XC119V 12/04/96
BU04XC120V 12/20/96
BU04XC121V 01/07/97
BU04XC004V 07/25/97
BU04XC007V 05/15/97
BU04XC011V 02/28/97
BU04XC013V 06/09/97
BU04XC015V 05/23/97
BU04XC016V 12/10/97
BU04XC017V 06/20/97
BU04XC022V 09/24/97
BU04XC026V 09/24/97
BU04XC027V 08/21/97
BU04XC031V 10/28/97
BU04XC033V 12/19/97
BU04XC035V 06/20/97
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BU04XC037V 07/25/97
BU04XC038V 08/08/97
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BU04XC047V 10/28/97
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BU04XC051V 06/18/97
BU04XC054V 08/21/97
BU04XC055V 10/28/97
BU04XC062V 08/21/97
BU04XC063V 07/25/97
BU04XC064V 03/21/97
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BU04XC069V 06/18/97
BU04XC071V 08/08/97
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BU04XC083V 04/11/97
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BU04XC086V 03/27/97
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BU04XC089V 11/04/97
BU04XC090V 04/23/97
BU04XC091V 08/28/97
BU04XC094V 08/28/97
BU04XC096V 04/23/97
BU04XC097V 08/28/97
BU04XC106V 12/19/97
BU04XC107V 02/28/97
BU04XC109V 08/13/97
BU04XC110V 05/15/97
BU04XC111V 09/24/97
BU04XC112V 08/22/97
BU04XC113V 08/21/97
BU04XC117V 09/24/97
BU04XC118V 08/08/97
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101
Sacramento FN04XC002 01/13/97
FN04XC003 01/13/97
FN04XC005 04/08/97
FN04XC006 03/13/97
FN04XC008 01/17/97
FN04XC009 01/15/97
FN04XC010 03/06/97
FN04XC011 02/03/97
FN04XC013 01/23/97
FN04XC016 02/22/97
FN04XC017 03/07/97
FN04XC020 02/27/97
FN04XC021 02/18/97
FN04XC022 02/28/97
FN04XC023 03/12/97
FN04XC024 01/09/97
FN04XC025 02/27/97
FN04XC026 03/07/97
FN04XC027 03/01/97
FN04XC028 04/08/97
FN04XC029 01/09/97
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<PAGE>
FN04XC031 03/07/97
FN04XC032 02/08/97
FN04XC034 02/04/97
FN04XC035 02/28/97
FN04XC036 02/12/97
FN04XC037 02/11/97
FN04XC039 01/15/97
FN04XC041 01/21/97
FN04XC043 03/13/97
FN04XC044 02/27/97
FN04XC048 01/14/97
FN04XC055 01/21/97
FN04XC057 04/08/97
FN04XC058 02/28/97
FN04XC062 04/08/97
FN04XC079 03/06/97
FN04XC081 03/21/97
FN04XC085 03/11/97
FN04XC088 02/05/97
FN04XC102 04/11/97
FN04XC107 04/11/97
FN04XC110 01/16/97
FN04XC113 03/07/97
FN04XC114 01/20/97
FN04XC115 12/18/96
FN04XC116 01/20/97
FN04XC120 01/16/97
FN04XC224 01/22/97
FN04XC233 03/10/97
FN04XC001 08/08/97
FN04XC007 05/16/97
FN04XC012 02/03/97
FN04XC015 08/22/97
FN04XC018 04/16/97
FN04XC019 06/30/97
FN04XC038 04/24/97
FN04XC040 08/18/97
FN04XC042 07/15/97
FN04XC052 12/16/97
FN04XC049 04/10/97
FN04XC050 06/25/97
FN04XC051 04/15/97
FN04XC053 04/10/97
<PAGE>
FN04XC054 05/16/97
FN04XC061 10/24/97
FN04XC063 04/01/97
FN04XC064 03/06/97
FN04XC071 04/24/97
FN04XC075 05/20/97
FN04XC080 02/05/97
FN04XC082 02/19/97
FN04XC084 05/16/97
FN04XC089 07/15/97
FN04XC101 05/30/97
FN04XC103 04/10/97
FN04XC104 06/07/97
FN04XC105 09/04/97
FN04XC108 07/25/97
FN04XC109 07/25/97
FN04XC112 06/25/97
FN04XC117 12/01/97
FN04XC118 04/22/97
FN04XC121 05/30/97
FN04XC122 05/02/97
FN04XC225 07/03/97
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87
Salt Lake City SL03XC102V 10/31/96
SL03XC104V 10/21/96
SL03XC106V 10/21/96
SL03XC108V 11/12/96
SL03XC110V 11/13/96
SL03XC112V 12/02/96
SL03XC114V 11/12/96
SL03XC118V 10/09/96
SL03XC120V 10/23/96
SL03XC122V 11/13/96
SL03XC124V 11/13/96
SL03XC126V 11/05/96
SL03XC128V 11/08/96
SL03XC130V 11/12/96
SL03XC132V 12/11/96
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SL03XC144V 09/05/96
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SL03XC152V 11/14/96
SL03XC154V 11/12/96
SL03XC158V 10/31/96
SL03XC162V 11/13/96
SL03XC164V 11/12/96
SL03XC166V 11/20/96
SL03XC168V 10/28/96
SL03XC170V 11/04/96
SL03XC174V 11/05/96
SL03XC178V 11/12/96
SL03XC182V 11/08/96
SL03XC184V 11/11/96
SL03XC188V 11/08/96
SL03XC192V 11/11/96
SL03XC204V 11/11/96
SL03XC206V 09/13/96
SL03XC208V 10/04/96
SL03XC210V 11/15/96
SL03XC212V 11/06/96
SL03XC214V 12/05/96
SL03XC216V 09/20/96
SL03XC218V 10/04/96
SL03XC220V 10/22/96
SL03XC222V 11/14/96
SL03XC224V 12/12/96
SL03XC228V 11/06/96
SL03XC230V 11/13/96
SL03XC232V 11/02/96
SL03XC234V 09/13/96
SL03XC236V 10/29/96
SL03XC238V 12/12/96
SL03XC242V 10/29/96
SL03XC244V 07/01/96
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134
San Francisco N FN03XC001 07/29/97
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<PAGE>
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164
San Francisco S FS04XC000 04/28/97
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234
Seattle SE03XC001V 04/03/97
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SE03XC604V 03/05/97
SE03XC605V 09/22/96
SE03XC621V 04/21/97
SE03XC653V 12/10/96
SE03XC654V 04/12/97
SE03XC655V 01/23/97
SE03XC658V 04/25/97
SE03XC659V 01/21/97
SE03XC662V 03/26/97
SE03XC677V 07/09/97
SE03XC678V 07/07/97
SE03XC679V 04/18/97
SE03XC680V 04/25/97
SE03XC681V 07/03/97
<PAGE>
SE03XC130V 08/18/97
SE03XC131V 08/26/97
SE03XC132V 10/15/97
SE03XC153V 12/16/97
SE03XC206V 12/16/97
SE03XC274V 10/13/97
SE03XC359V 11/06/97
SE03XC383V 08/20/97
SE03XC663V 10/02/97
---------------------------------------------------------------------------------------------------
199
Spokane SP03XC001V 09/04/96
SP03XC002V 09/09/96
SP03XC003V 08/08/96
SP03XC004V 10/11/96
SP03XC005V 10/08/96
SP03XC006V 11/06/96
SP03XC007V 10/08/96
SP03XC008V 11/04/96
SP03XC009V 09/12/96
SP03XC010V 11/26/96
SP03XC011V 10/10/96
SP03XC012V 08/28/96
SP03XC013V 10/04/96
SP03XC014V 09/20/96
SP03XC015V 11/23/96
SP03XC017V 10/16/96
SP03XC018V 10/04/96
SP03XC019V 11/08/96
SP03XC023V 09/26/96
SP03XC024V 10/01/96
SP03XC025V 10/05/96
SP03XC026V 10/10/96
SP03XC030V 11/05/96
SP03XC038V 10/07/96
SP03XC039V 11/08/96
SP03XC040V 10/11/96
SP03XC041V 10/15/96
SP03XC045V 09/27/96
SP03XC046V 11/01/96
SP03XC050V 09/27/96
SP03XC051V 10/02/96
SP03XC052V 08/10/96
<PAGE>
SP03XC053V 08/19/96
SP03XC054V 10/14/96
SP03XC055V 09/04/96
SP03XC056V 09/25/96
SP03XC057V 11/08/96
SP03XC016V 01/24/97
SP03XC029V 12/19/96
---------------------------------------------------------------------------------------------------
39
Syracuse AL04XC001V 10/09/96
AL04XC002V 11/08/96
AL04XC004V 10/15/96
AL04XC005V 10/01/96
AL04XC008V 11/08/96
AL04XC009V 11/11/96
AL04XC010V 09/26/96
AL04XC011V 11/28/96
AL04XC012V 10/10/96
AL04XC013V 10/18/96
AL04XC014V 10/22/96
AL04XC017V 10/18/96
AL04XC018V 10/22/96
AL04XC020V 09/27/96
AL04XC022V 10/15/96
AL04XC023V 10/16/96
AL04XC024V 10/22/96
AL04XC025V 10/28/96
AL04XC026V 11/13/96
AL04XC027V 10/16/96
AL04XC028V 10/25/96
AL04XC029V 10/21/96
AL04XC030V 10/16/96
AL04XC031V 10/29/96
AL04XC032V 09/30/96
AL04XC033V 10/21/96
AL04XC034V 10/17/96
AL04XC035V 10/17/96
AL04XC039V 10/04/96
AL04XC040V 10/23/96
AL04XC042V 10/15/96
AL04XC043V 10/04/96
AL04XC045V 10/23/96
AL04XC049V 10/17/96
AL04XC007V 04/10/97
<PAGE>
AL04XC021V 06/02/97
AL04XC036V 11/27/96
AL04XC037V 07/02/97
AL04XC038V 05/07/97
AL04XC041V 03/04/97
AL04XC044V 04/04/97
AL04XC046V 06/23/97
AL04XC047V 03/04/97
AL04XC048V 03/06/97
AL04XC006 12/29/97
AL04XC019 12/22/97
---------------------------------------------------------------------------------------------------
46
Toledo DE03XC180V 03/17/97
DE03XC182V 03/07/97
DE03XC249V 03/11/97
DE03XC250V 02/10/97
DE03XC251V 03/02/97
DE03XC252V 03/16/97
DE03XC254V 03/02/97
DE03XC258V 11/18/96
DE04XC001V 03/05/97
DE04XC002V 03/08/97
DE04XC003V 03/05/97
DE04XC004V 02/18/97
DE04XC005V 02/18/97
DE04XC007V 03/21/97
DE04XC008V 02/13/97
DE04XC010V 03/19/97
DE04XC011V 03/13/97
DE04XC012V 03/12/97
DE04XC015V 02/20/97
DE04XC016V 03/10/97
DE04XC017V 02/13/97
DE04XC018V 02/20/97
DE04XC019V 03/14/97
DE04XC020V 03/06/97
DE04XC021V 02/24/97
DE04XC022V 02/11/97
DE04XC023V 12/26/96
DE04XC024V 03/09/97
DE04XC025V 02/24/97
DE04XC026V 03/15/97
<PAGE>
DE03XC253V 07/08/97
DE03XC256V 07/18/97
DE03XC259V 10/21/97
DE04XC009V 09/12/97
DE04XC014V 04/03/97
---------------------------------------------------------------------------------------------------
35
Tucson PH04XC009V 02/19/97
PH04XC010V 12/07/96
PH04XC011V 11/14/96
PH04XC017V 12/03/96
PH04XC018V 11/25/96
PH04XC019V 02/04/97
PH04XC020V 02/04/97
PH04XC021V 12/04/96
PH04XC022V 02/12/97
PH04XC023V 01/09/97
PH04XC024V 03/14/97
PH04XC026V 03/14/97
PH04XC028V 02/21/97
PH04XC029V 12/17/96
PH04XC030V 04/08/97
PH04XC031V 02/21/97
PH04XC032V 03/19/97
PH04XC033V 02/19/97
PH04XC067V 03/18/97
PH04XC069V 12/17/96
PH04XC070V 02/20/97
PH04XC071V 02/04/97
PH04XC073V 01/09/97
PH04XC074V 02/21/97
PH04XC075V 04/08/97
PH04XC217V 02/22/97
PH04XC218V 02/25/97
PH04XC219V 07/18/97
PH03XC076V 05/30/97
PH03XC077V 06/02/97
PH03XC241V 09/17/97
PH04XC025V 05/12/97
PH04XC027V 08/08/97
PH04XC034V 10/29/97
PH04XC036V 04/04/97
PH04XC208V 12/17/97
<PAGE>
PH04XC211V 03/14/97
PH04XC215V 06/19/97
PH04XC221V 06/19/97
PH04XC222V 11/14/97
PH04XC223V*2 12/18/97
PH04XC227V 04/10/97
PH04XC229V 06/02/97
PH04XC237V 06/12/97
PH04XC238V 07/24/97
PH04XC239V 09/30/97
PH04XC251V 12/17/97
PH04XC253V 11/14/97
PH04XC223V*1 12/18/97
---------------------------------------------------------------------------------------------------
49
Westchester NY06XC404V 09/27/97
NY06XC405V 10/08/97
NY06XC408V 08/28/97
NY06XC411V 08/07/97
NY06XC412V 04/22/97
NY06XC413V 08/07/97
NY06XC414V 06/19/97
NY06XC422V 09/15/97
NY06XC427V 06/19/97
NY06XC429V 08/28/97
NY06XC430V 09/06/97
NY06XC431V 06/19/97
NY06XC432V 09/06/97
NY06XC435V 09/11/97
NY06XC437V 09/06/97
NY06XC443V 08/28/97
NY06XC445V 09/06/97
NY06XC449V 08/28/97
NY06XC463V 09/11/97
NY06XC469V 09/06/97
NY06XC471V 09/06/97
NY06XC403V 10/02/97
NY06XC417V 11/04/97
NY06XC442V 12/31/97
NY06XC470V 10/16/97
NY06XC472V 09/27/97
NY06XC477V 10/24/97
NY06XC479V 12/10/97
---------------------------------------------------------------------------------------------------
Tucson Subtotal 28
----------------------------------------------------------
--------------------
Grand Total 2939
--------------------
<PAGE>
- - ---------------------------------------------------------------------------------------------------------------------
SYSTEM SITEID SITENAME BOLTDOWN
- - ---------------------------------------------------------------------------------------------------------------------
APC - Hanover CBC001 8/21/97
CBC002 8/8/97
CBC003 9/23/97
CBC004 9/5/97
CBC005 9/3/97
CBC006 10/18/97
CBC007 10/18/97
CBC008 10/2/97
CBC009 9/4/97
CBC010 10/12/97
CBC011 9/13/97
CBC013 9/3/97
CBC016 11/13/97
CBC018 9/5/97
CBC019 9/29/97
CBC020 9/4/97
CBC021 9/5/97
CBC022 9/18/97
CBC023 9/5/97
CBC024 8/21/97
CBC025 10/24/97
CBC026 8/21/97
CBC027 9/29/97
CBC028 8/26/97
CBC029 10/6/97
CBC030 10/31/97
CBC032 9/19/97
CBC033 8/22/97
CBC034 10/6/97
CBC035 8/25/97
CBC036 12/5/97
CBC037 11/17/97
CBC038 8/21/97
CBC046 8/22/97
CBC050 10/2/97
CBC051 9/4/97
CBN002 11/25/97
CBN003 11/13/97
CBN004 8/22/97
CBN006 9/26/97
CBN007 9/25/97
CBN008 8/22/97
<PAGE>
CBN010 9/19/97
CBN012 9/19/97
CBN014 9/29/97
CBN015 9/26/97
CBN016 9/12/97
CBN017 8/25/97
CBN019 10/2/97
CBN020 9/18/97
CBN021 10/27/97
CBN023 11/13/97
CBN024 8/22/97
CBN025 12/3/97
CBN026 9/16/97
CBN027 8/21/97
CBN028 12/5/97
CBN029 8/21/97
CBN031 9/12/97
CBN032 9/11/97
CBN033 8/21/97
CBN034 9/12/97
CBN036 9/4/97
CBN037 9/19/97
CBN038 10/8/97
CBN039 9/8/97
CBN040 10/1/97
CBN041 10/6/97
CBN042 9/19/97
CBN046 10/2/97
CBN048 9/26/97
CBN051 11/7/97
CBN054 9/8/97
CBN058 10/16/97
CBN063 8/14/97
CBN064 9/19/97
CBN065 9/12/97
CBN066 10/24/97
CBN067 9/22/97
CBN068 9/12/97
CBN069 9/29/97
CBN070 9/11/97
CBN071 9/22/97
CBN072 12/5/97
CBN073 10/1/97
<PAGE>
CBN074 9/22/97
CBN076 9/26/97
CBN077 9/24/97
CBN079 9/10/97
CBN081 9/12/97
CBN082 9/11/97
CBN090 10/14/97
CBN091 9/17/97
CBN101 9/12/97
CBN103 9/12/97
CBN107 11/17/97
CBN123 9/18/97
CBN124 8/14/97
CBN125 9/11/97
CBN128 10/14/97
CBN129 11/14/97
CBS001 9/25/97
CBS002 10/13/97
CBS003 9/10/97
CBS004 9/15/97
CBS005 9/15/97
CBS009 9/17/97
CBS011 9/19/97
CBS012 8/15/97
CBS013 9/15/97
CBS014 9/17/97
CBS015 8/14/97
CBS016 9/15/97
CBS017 9/17/97
CBS018 10/20/97
CBS021 10/15/97
CBS022 9/18/97
CBS023 10/15/97
CBS024 8/14/97
CBS025 8/14/97
CBS033 8/14/97
CBS034 9/11/97
CBS038 9/15/97
CBS040 9/11/97
CBS041 10/16/97
CBS065 10/16/97
CBS066 9/17/97
127
<PAGE>
APC - Beltsville 1 CBN011 8/22/97
CBN013 8/22/97
CBN043 10/14/97
CBN080 10/27/97
CBN131 9/15/97
CBS006 10/15/97
CBS007 9/17/97
CDC027 9/3/97
CDC032 8/15/97
CWN001 11/5/97
CWN002 8/19/97
CWN003 9/22/97
CWN005 9/22/97
CWN007 12/16/96
CWN008 9/22/97
CWN009 10/3/97
CWN010 8/19/97
CWN011 9/22/97
CWN012 10/13/97
CWN014 8/19/97
CWN015 11/23/96
CWN016 2/21/97
CWN018 12/3/97
CWN019 10/27/97
CWN020 8/15/97
CWN021 1/30/97
CWN023 11/6/97
CWN024 11/18/97
CWN027 10/17/97
CWN029 8/16/97
CWN030 11/18/97
CWN031 8/15/97
CWN033 10/2/97
CWN034 2/27/97
CWN035 10/13/97
CWN036 2/21/97
CWN038 10/2/97
CWN039 10/31/97
CWN040 10/10/97
CWN041 11/26/97
CWN042 10/10/97
CWN043 10/21/97
CWN044 7/17/97
<PAGE>
CWN045 8/15/97
CWN047 8/15/97
CWN048 1/23/97
CWN050 9/26/97
CWN053 9/22/97
CWN055 10/28/97
CWN056 9/22/97
CWN057 10/2/97
CWN058 7/31/97
CWN059 10/13/97
CWN061 8/15/97
CWN062 8/15/97
CWN074 10/10/97
CWN077 12/3/97
CWN079 9/23/97
CWN081 10/21/97
CWN082 10/10/97
CWN084 9/23/97
CWN100 12/12/97
CWN108 10/24/97
CWS001 9/23/97
CWS002 10/22/97
CWS003 9/24/97
CWS004 10/22/97
CWS006 9/11/97
CWS007 9/10/97
CWS008 10/17/97
CWS009 8/19/97
CWS010 10/17/97
CWS012 7/17/97
CWS013 10/22/97
CWS014 9/11/97
CWS015 12/3/97
CWS018 10/15/97
CWS019 8/19/97
CWS020 10/15/97
CWS021 9/11/97
CWS022 10/15/97
CWS023 10/31/97
CWS024 10/9/97
CWS026 10/9/97
CWS027 9/10/97
CWS028 9/11/97
<PAGE>
CWS031 9/10/97
CWS034 9/10/97
CWS036 7/17/97
CWS044 10/15/97
CWS048 9/10/97
CWS049 9/11/97
CWS050 10/9/97
CWS051 8/19/97
CWS052 10/20/97
CWS057 10/20/97
CWS058 10/28/97
CWS062 7/17/97
CWS072 10/13/97
CWS083 9/10/97
CWS121 11/15/96
101
APC - Beltsville 2 CDC001 2/27/97
CDC003 3/24/97
CDC002 10/11/97
CDC004 9/12/97
CDC006 9/15/97
CDC007 3/7/97
CDC008 10/21/97
CDC009 12/20/96
CDC011 8/20/97
CDC012 8/25/97
CDC013 3/7/97
CDC014 12/16/96
CDC015 8/20/97
CDC016 9/15/97
CDC017 8/25/97
CDC018 1/15/97
CDC019 8/26/97
CDC020 9/15/97
CDC021 10/4/97
CDC022 8/26/97
CDC024 8/30/97
CDC026 9/15/97
CDC028 10/8/97
CDC029 10/15/97
CDC030 8/26/97
CDC031 8/27/97
CDC034 8/13/97
<PAGE>
CDC035 1/30/97
CDC036 4/5/97
CDC037 12/16/96
CDC038 12/1/97
CDC039 8/27/97
CDC040 8/27/97
CDC041 10/18/97
CDC042 8/27/97
CDC043 10/4/97
CDC044 10/4/97
CDC045 8/14/97
CDC046 8/28/97
CDC047 8/28/97
CDC049 8/28/97
CDC050 8/28/97
CDC057 10/8/97
CDC058 11/13/97
CWC001 10/8/97
CWC002 12/8/97
CWC003 12/14/96
CWC004 8/29/97
CWC006 8/29/97
CWC007 8/20/97
CWC008 8/29/97
CWC009 10/6/97
CWC010 1/23/97
CWC012 8/15/97
CWC013 9/2/97
CWC014 8/15/97
CWC015 9/2/97
CWC016 10/9/97
CWC018 9/12/97
CWC019 10/13/97
CWC020 8/30/97
CWC021 8/18/97
CWC024 10/23/97
CWC026 11/13/97
CWC027 9/2/97
CWC028 11/11/97
CWC030 10/16/97
CWC032 8/26/97
CWC033 10/17/97
CWC034 10/17/97
<PAGE>
CWC035 8/25/97
CWC036 10/10/97
CWC042 12/1/97
CWC044 9/3/97
CWC045 10/13/97
CWC046 8/29/97
CWC047 9/3/97
CWC050 8/22/97
CWC051 10/10/97
CWC052 12/17/97
CWC057 10/10/97
CWC058 8/14/97
CWC059 8/21/97
CWC063 12/8/97
CWC065 8/18/97
CWC066 8/22/97
CWC067 10/14/97
CWC068 10/13/97
CWC070 10/9/97
CWC073 10/17/97
CWC076 9/3/97
CWC077 9/3/97
CWC078 10/9/97
CWC080 10/13/97
CWC082 10/23/97
CWC083 8/8/97
CWC084 11/17/97
CWC086 10/16/97
CWC088 10/16/97
CWC089 10/14/97
CWC091 10/21/97
CWC101 8/21/97
CWC103 8/8/97
CWN063 9/25/97
CWN064 11/14/97
CWN065 10/24/97
CWN066 8/8/97
CWN067 8/11/97
CWN068 10/15/97
CWN069 11/18/97
CWS025 8/19/97
CWS029 8/21/97
CWS032 9/11/97
<PAGE>
CWS046 8/19/97
CWW001 10/23/97
CWW003 11/13/97
CWW004 8/11/97
CWW009 11/17/97
CWW013 12/1/97
CWW014 11/17/97
CWW017 8/11/97
CWW019 ] 8/4/97
BELTSVILLE 2 SUBTOTAL 122
TOTAL BOLTDOWNS 350
<PAGE>
- - ------------------------------------------------------------------------------------------------------------
SYSTEM SITEID SITENAME BOLTDOWN
- - ------------------------------------------------------------------------------------------------------------
Orange County OR001-A [ 10/20/96
OR002-A 2/8/97
OR003-A 12/26/96
OR005-A 10/8/96
OR006-C 2/1/97
OR007-A 10/10/96
OR008-B 2/17/97
OR009-B 2/7/97
OR011-B 12/27/96
OR013-B 2/14/97
OR015-C 3/6/97
OR016-B 2/24/97
OR018-B 3/6/97
OR019-A 12/6/96
OR021-E 2/8/97
OR022-A 2/7/97
OR024-D 12/27/96
OR025-A 2/5/97
OR026-A 1/6/97
OR028-A 12/4/96
OR029-C 9/22/96
OR030-A 10/30/96
OR032-A 12/3/96
OR034-A 11/15/96
OR035-D 11/18/96
OR036-A 3/17/97
OR037-A 11/7/96
OR040-D 11/18/96
OR041-A 11/20/96
OR042-A 11/15/96
OR043-A 11/15/96
OR048-A 3/6/97
OR050-A 10/30/96
OR051-A 10/15/96
OR052-B 3/2/97
OR055-A 3/7/97
OR057-A 1/3/97
OR058-B 12/3/96
OR059-A 12/12/96
OR061-A 9/30/96
OR064-A 12/3/96
OR065-A 11/1/96
<PAGE>
OR066-A 10/10/96
OR069-D 3/12/97
OR073-C 3/1/97
OR083-D 2/6/97
OR084-B 3/11/97
OR085-A 11/15/96
OR088-A 11/18/96
OR089-A 8/27/96
OR090-A 12/21/96
OR093-A 12/2/96
OR094-B 1/2/97
OR095-A 2/25/97
OR096-F 12/20/96
OR099-A 11/19/96
OR104-B 3/11/97
OR107-A 12/28/96
OR108-A 1/20/97
OR109-A 3/10/97
OR111-B 12/23/96
OR112-C 12/20/96
OR117-A 2/18/97
OR118-A 1/22/97
OR121-B 2/27/97
OR122-A 2/18/97
OR123-A 3/1/97
OR126-B 2/14/97
OR127-A 3/21/97
OR128-A 1/14/97
OR129-D 11/16/96
OR130-A 1/17/97
OR132-E 1/17/97
OR134-A 2/27/97
OR135-B 1/11/97
OR136-B 3/1/97
OR137-B 2/24/97
OR139-D 3/24/97
OR141-B 1/14/97
OR142-D 3/17/97
OR145-A 3/10/97
OR149-A 2/26/97
CHE003SD 6/11/97
OR004-E 12/3/97
OR044-D 10/14/97
<PAGE>
OR049-1A 7/25/97
OR053-B 11/24/97
OR067-A 7/30/97
OR071-B 3/21/97
OR074-B 4/1/97
OR076-C 11/7/97
OR092-D 4/1/97
OR079-A 8/20/97
OR087-C 7/23/97
OR102-A 11/6/97
OR110-A 7/14/97
OR146-A 8/8/97
97
San Diego SD001 2/20/96
SD002 2/20/96
SD005 5/23/96
SD003 5/30/96
SD042 9/26/96
SD006 10/15/96
SD007 9/19/96
SD009 10/14/96
SD008 10/3/96
SD010 3/22/96
SD012 8/26/96
SD013 8/19/96
SD014 6/18/96
SD015 7/2/96
SD016 8/26/96
SD018 8/12/96
SD023 5/21/96
SD024 9/6/96
SD025 9/16/96
SD027 9/26/96
SD028 8/26/96
SD030 8/6/96
SD032 8/11/96
SD033 9/30/96
SD035-1 9/27/96
SD037 10/31/96
SD038 10/3/96
SD039 10/7/96
SD040 8/29/96
SD041 10/9/96
<PAGE>
SD044 8/30/96
SD045 9/6/96
SD048 9/19/96
SD049 9/16/96
SD051 9/25/96
SD053 9/25/96
SD054 9/24/96
SD055 5/25/96
SD121-1 9/24/96
SD132 11/7/96
SD146 10/14/96
SD148-1 10/15/96
SD149 9/5/96
SD151 9/12/96
SD168 8/30/96
SD174 10/16/96
SD178-1 9/13/96
SD180 9/13/96
SD189 9/25/96
SD194 10/15/96
SD197 8/30/96
SD201 10/16/96
SD212 8/16/96
SD216 8/30/96
SD218 8/23/96
SD221 10/6/96
SD222 8/7/96
SD300 9/13/96
SD301 9/13/96
SD302 9/13/96
SD303 9/13/96
SD304 9/13/96
SD305 9/13/96
SD325 10/1/96
SD326 10/1/96
SD327 10/1/96
SD328 10/1/96
SD329 10/1/96
SD330 10/1/96
SD350 9/5/96
SD351 9/5/96
SD352 9/5/96
SD353 9/5/96
<PAGE>
SD375 10/3/96
SD376 10/3/96
SD377 10/3/96
SD378 10/3/96
SD379 10/3/96
SD380 10/3/96
SD381 10/3/96
SD382 10/3/96
SD383 10/3/96
SD384 10/3/96
SD385 10/3/96
SD386 10/3/96
SD387 10/3/96
SD388 10/3/96
SD425 10/16/96
SD426 10/16/96
SD427 10/16/96
SD428 10/16/96
SD429 10/16/96
SD430 10/16/96
SD431 10/16/96
SD432 10/16/96
SD450 11/20/96
SD451 11/20/96
SD454 10/1/96
SD455 10/1/96
SD500 10/16/96
SD501 10/16/96
COW01 1/1/97
COW02 1/1/97
COW03 1/1/97
COW04 1/1/97
COW05 1/1/97
COW06 1/1/97
SD004 11/16/96
SD011 5/24/97
SD017 11/5/97
SD019 2/7/97
SD020 11/4/96
SD021 10/21/96
SD026 11/8/96
SD029 11/6/96
SD031 2/26/97
<PAGE>
SD043 10/16/96
SD046 10/4/96
SD047 5/30/97
SD052 5/29/97
SD130 2/11/97
SD133 12/3/96
SD137 4/8/97
SD139 4/8/97
SD140 2/5/97
SD141 9/22/97
SD142 11/1/96
SD143 10/26/96
SD145 12/19/97
SD150 5/28/97
SD166 10/17/96
SD171-1 3/26/97
SD191 10/14/96
SD199 7/7/97
SD214 6/5/97
SD215 6/19/97
SD220 3/14/97
SD400 12/7/97
SD401 12/7/97
SD452 11/20/96
SD453 11/20/96
141
Los Angeles LA011-A 3/12/97
LA002-B 6/6/97
LA009-D 3/20/97
LA010-B 5/2/97
LA013-A 5/27/97
LA014-A 8/20/97
LA018-A 3/12/97
LA022-A 4/10/97
LA023-C 3/29/97
LA025-B 5/15/97
LA028-A 6/5/97
LA029-A 2/26/97
LA032-B 3/26/97
LA033-A 3/19/97
LA039-A 4/7/97
LA040-A 4/8/97
LA041-B 4/12/97
<PAGE>
LA042-A 2/8/97
LA043-A 7/26/97
LA045-C 6/20/97
LA047-A 4/12/97
LA048-B 4/8/97
LA049-A 4/10/97
LA051-A 4/2/97
LA062-A 3/25/97
LA067-B 6/10/97
LA068-B 4/3/97
LA070-A 4/19/97
LA072-A 9/17/97
LA080-A 2/3/97
LA096-A 6/28/97
LA097-A 7/10/97
LA098-B 3/25/97
LA102-B 4/29/97
LA111-B 7/24/97
LA112-A 2/8/97
LA113-A 2/8/97
LA118-A 5/8/97
LA119-B 3/20/97
LA120-B 7/22/97
LA122-A 5/16/97
LA123-A 8/5/97
LA125-A 6/18/97
LA126-D 4/16/97
LA128-A 3/19/97
LA129-A 6/17/97
LA139-A 3/26/97
LA143-1 6/5/97
LA145-A 1/24/97
LA147-A 2/7/97
LA149-B 1/23/97
LA151-A 6/10/97
LA153-A 1/23/97
LA155-A 5/2/97
LA158-A 1/29/97
LA159-B 1/27/97
LA160-C 1/27/97
LA161-C 2/7/97
LA162-B 5/6/97
LA163-A 4/3/97
<PAGE>
LA167-A 3/28/97
LA170-A 4/11/97
LA171-B 1/29/97
LA175-A 3/7/97
LA177-A 8/12/97
LA178-A 2/14/97
LA180-A 3/1/97
LA181-A 2/14/97
LA183-A 3/5/97
LA185-C 7/25/97
LA190-A 6/13/97
LA193-A 3/28/97
LA252-A 3/27/97
LA255-A 3/7/97
LA260-A 2/6/97
LA262-A 3/7/97
LA263-A 4/16/97
LA264-A 3/6/97
LA266-B 3/27/97
LA268-A 5/14/97
LA269-A 5/9/97
LA270-B 2/6/97
LA271-A 4/4/97
LA274-B 5/13/97
LA277-A 3/6/97
LA278-A 2/13/97
LA279-A 2/13/97
LA283-A 6/18/97
LA292-A 4/2/97
LA294-B 8/29/97
LA297-B 4/9/97
LA300-A 6/12/97
LA301-A 2/20/97
LA302-B 4/4/97
LA310-A 6/13/97
LA315-A 8/22/97
LA316-A 3/21/97
LA327-A 3/8/97
LA331-A 2/21/97
LA333-A 3/14/97
LA335-B 6/19/97
LA339-A 3/13/97
LA341-A 6/12/97
<PAGE>
LA343-A 3/13/97
LA358-A 3/27/97
LA511 9/18/97
LA512 9/18/97
LA514 9/18/97
LA003-A 7/10/97
LA007-B 11/11/97
LA016-B 9/23/97
LA017-D 10/9/97
LA019-B 11/18/97
LA021-B 11/19/97
LA026-B 10/29/97
LA027-D 11/5/97
LA050-B 10/31/97
LA052-A 9/15/97
LA055-B 10/23/97
LA060-A 5/27/97
LA061-B 10/22/97
LA074-A 9/16/97
LA064-2A 11/11/97
LA075-A 10/23/97
LA082-A 11/12/97
LA088-A 10/1/97
LA091-A 10/1/97
LA092-D 11/12/97
LA093-B 10/24/97
LA095-E 12/15/97
LA099-A 6/28/97
LA100-B 10/30/97
LA105-B 7/18/97
LA107-A 11/3/97
LA110-A 10/22/97
LA117-D 7/15/97
LA127-E 11/5/97
LA133-A 11/25/97
LA144-B 10/30/97
LA156-A 10/28/97
LA172-A 9/11/97
LA173-A 9/2/97
LA174-D 10/22/97
LA179-B 10/22/97
LA184-A 3/5/97
LA187-B 10/1/97
<PAGE>
LA188-A 10/20/97
LA189-A 9/26/97
LA199-A 12/16/97
LA200-C 9/10/97
LA201-B 10/23/97
LA257-D 11/10/97
LA267-C 10/28/97
LA272-A 11/2/97
LA273-A 11/20/97
LA281-D 10/27/97
LA285-A 10/8/97
LA286-A 11/17/97
LA287-A 9/18/97
LA288-C 11/2/97
LA290-A 11/4/97
LA295-A 11/7/97
LA298-A 9/24/97
LA311-C 11/18/97
LA313-B 11/10/97
LA314-A 10/16/97
LA318-A 9/25/97
LA319-A 11/4/97
LA320-B 10/10/97
LA321-A 8/21/97
LA325-B 10/24/97
LA330-A 11/16/97
LA338-A 10/23/97
LA344-B 10/17/97
LA347-A 9/3/97
LA513PV 9/19/97
LA515PV 9/19/97
LA516PV 9/19/97
LA517PV 9/19/97
LA518PV 9/19/97
LA519PV 9/19/97
LA520PV 9/19/97
] 182
TOTAL BOLTDOWNS 420
</TABLE>
<PAGE>
EXHIBIT B4
SYSTEM ELEMENT FIELD INSTALLATION AND COMMISSIONING
EXHIBIT B4
SYSTEM ELEMENT FIELD INSTALLATION
AND COMMISSIONING
A - Boltdown of BTS Equipment
B - Commissioning of BTS Equipment
C - Base Station Cell Integration
D - Switch / BSC
E - Project Intervals
F - Project Management
G - Program Management
Attachments 1 - 5
<PAGE>
INTRODUCTION
This Statement of Work ("SOW") defines the work requirements and
responsibilities of both Vendor and the Owner which are necessary to
engineer, furnish, deliver, install, commission and test Products
furnished hereunder in accordance with the Project Intervals set forth in
Section E herein, and in the case of a BTS, necessary for shipment to the
Owner's designated FOB Point. Vendor's obligation to perform the Services
described hereunder assumes receipt and acceptance of a valid Purchase
Order for such Services and associated Products. The materials and labor
required for Installation activities as described below represent a
"standard" installation. Owner understands and agrees that certain of the
requirements for such Boltdown and Commissioning activities are site
dependent, and Vendor reserves the right to quote additional charges on a
time-and-material basis as the actual Designated Switch Site(s) or System
Element Location(s), as applicable, are identified, in accordance with
Subsection 7.2 of the Contract.
A. BOLTDOWN OF BTS EQUIPMENT
1.1 Activities Required Prior to Boltdown
Vendor has responsibility for delivering BTS equipment to Owner's FOB
point. The Owner has responsibility for transportation from the FOB point
to the Owner's local warehouse in the market.
If Owner purchases any of the Service Suites in Section 1 of Schedule 3A,
the Vendor will be responsible for the local transportation of the BTS
equipment from the Owner's local warehouse to the BTS site.
These activities are the responsibility of the Owner regardless of whether
the Vendor is performing Boltdown activities for the BTS. All of these
activities must be complete prior to Boltdown Activities beginning as
described in item 1.3 below.
Responsibilities
a. Owner will provide warehousing for all BTSs, including associated
equipment, at the Owner's designated local warehouse. Owner will notify
Vendor upon receipt of Products of any damage which occurred during
shipment, and, if known, shortages.
b. Owner will provide Vendor's authorized employees the same level of
access to the BTS and all associated equipment as afforded Owner's
employees, to the warehouse and once the BTS has been delivered to its
permanent System Element Location, including out of hours access.
c. Owner will furnish all anchors, external mounting hardware, and all
other material necessary for positioning and securing and final
boltdown of the BTS.
d. Owner will provide all permits necessary for System Element Location
construction, installation, electrical and telco connections and
service activation.
e. Owner will be responsible for Local Transportation costs and scheduling
associated with the delivery of the BTSs and all associated equipment
from the Owner's local warehouse to the System Element Location.
However if the Owner has purchased one of the Services Suites in
<PAGE>
Section 1 of Schedule 3A, the Vendor will be responsible for Local
Transportation. If the Owner has purchased Project Management as
described in Section F of this Exhibit B4, the Vendor will be
responsible for scheduling associated with the delivery of the BTS and
the associated equipment from the Owner's local warehouse to the System
Element Location. Local Transportation does not including Extraordinary
Transportation.
f. Owner will engineer the placement of the (C) BTS, Global Positioning
Satellite (GPS) antenna and antenna cable cover assemblies. Owner will
also validate the reception of the GPS antenna and furnish any required
GPS surge protection. (See Specifications Reference List in Section A,
Subsection 3 herein.)
g. Owner will mount the Global Positioning Satellite (GPS) antenna and
install any required GPS surge protection.
h. Owner will provide, install, connectorize and label all antenna cables
that will be terminated to the BTS. Owner will complete antenna sweep
testing and provide Vendor with successful results from such tests.
i. Owner will provide and coordinate scheduling of the licensed
electrician (union if necessary) for the connection of the AC to the
BTS.
j. Owner will provide and install Telco, T1 and alarm cables through the
conduit and into the (c)ACCA and connectorize and label each cable.
k. Owner will design and construct all grounding systems, connect all
grounds (BTS, (c)ACCA, GPS antennas, etc.) and perform proper Megger
Grounding test to the agreed upon specifications listed in the
Specifications Reference List in Section A, Subsection 3 herein.
l. Upon completion of its obligations as set forth in this Section 1.1,
Owner shall complete a BTS Construction Site Ready For Acceptance Check
List in accordance with Attachment I herein and forward such list to
Vendor.
These activities are also the responsibility of the Owner and must be
complete prior to the Vendor beginning Boltdown Activities as described in
item 1.3 below.
m. Antenna sweep has been successfully completed and all test results have
been performed in accordance with Section A, Subsection 3 and accepted
by Vendor.
n. Telco Span (T1) has been successfully tested, including backhaul:
Straight Span, Drop & Insert, Test results have been accepted by
Vendor.
o. Switch translations and packet pipes provisioned.
p. At each BTS System Element Location, a POTS line or wireless phone
service is available. Such phone will be used for business purposes
only.
q. Electrical (AC) is available on the System Element Location as
specified in Section A herein, as applicable.
<PAGE>
1.2 Material Supplied for each BTS Boltdown
1.2.1 The following material shall be supplied by the Owner for each
BTS installation.
a. BTS Isolation Pad / I-Beams
b. Bottom Cover Plate
c. Power Cables and Connectors
d. Coax Cables and Connectors
e. GPS Antenna Coax and Connectors
f. GPS Antenna Mounts
g. T1, TELCO, & Alarm Cables
h. Commercial AC Wiring
i. Wire Raceways
j. Electrical and RF Cables Conduit
k. Cable Entry Systems (may choose from the following)
(i) ROX Block System
(ii) Seal Tight Conduit and Locking Collars
(iii) Cord Connectors
1.2.2 The following material shall be supplied by the Vendor for each BTS
installation if the Vendor is responsible for Boltdown Activities.
a. GPS Antenna
b. Compact Antenna Cable Cover Assembly (ACCA)
c. Jumper Cables
d. BTS Mounting Kit (as applicable):
(i) M12 Hilti anchors for pad
(ii) Bolts for platform
(iii) Bolts for rooftop mounts
<PAGE>
1.3 Boltdown Activities
These Boltdown Activities will be the responsibility of the Vendor only
when the Owner has purchased the "Boltdown" service in Schedule 3A.
Otherwise the Owner will be responsible for these activities. Prior to the
Vendor performing these activities, all of the activities in Section 1.1
"Activities Required Prior to Boltdown" must be successfully completed.
Responsibilities
a. Provide and install the conduit and cables for electricity (AC), Telco
(T1, POTS etc.), heat strips (where necessary) and alarm cables from
the Power Protection Cabinet (PPC) to the BTS. During Boltdown these
cables are not to be terminated to the BTS, (Refer to Commissioning
activities).
b. Provide all tools and test equipment required for installation.
c. Mount the BTS onto the pad, (ii) bolt the BTS to anchors, (iii) place
batteries in trays (see Section A 1.8) and mount the antenna cable
cover assemblies.
d. Remove any debris or refuse from the System Element Location resulting
from BTS installation.
2. System Element Location Site Not Ready
Vendor reserves the right to charge Owner for downtime and travel
expenses for the dispatch of Vendor personnel to System Element
Locations as applicable, which are not ready to begin Installations
applicable as scheduled. Owner will be responsible for reimbursing the
Vendor for all downtime lost due to actions/inactions by Owner, its
agents or subcontractors. All such charges, including hourly charges
(supported by reasonable documentation provided by Vendor), will be
charged at Vendor's standard rates then in effect unless otherwise
specified in the Contract.
All such charges will be paid by Owner within thirty (30) days of
receipt of Vendor's invoice thereof.
<PAGE>
3. Specifications Reference List for the 1.9Ghz BTS
The following documents describe and govern the installation and
cabling of outdoor BTS Products as provided by the Vendor hereunder.
Vendor reserves the right to update these documents or to provide
additional documents as may be necessary to reflect changes in BTS
installation, testing procedures and/or practices.
Document Number Title
IM 401-703-300 CDMA Mini Cell Installation (Document restricted to
internal Lucent use/not available for order or use
by the Owner)
IM Handbook
Section 222 CDMA Mini Cell Installation & Integration Tests
(Document restricted to internal Lucent use/not
available for order or use by the Owner)
IM IEH 18 Power Plant Installation
<PAGE>
B. COMMISSIONING OF BTS EQUIPMENT
1.1 Activities Required Prior to Commissioning
All activities in Section A of this Exhibit B4 `Boltdown of BTS
Equipment' must be successfully completed in order for the BTS System
Element Location to be declared "Site Ready" for Commissioning.
A System Element Location will be declared "Site Ready" upon the
successful completion of the "Site Ready Check List" attached to this
Exhibit B4 as Attachment 1.
The Site Ready Check List must be completed by Owner and signed off by
Vendor's designated representative assigned to the PCS Systems in which
the work is being performed. Owner will provide to Vendor a completed
Site Ready Check List with all items verified. Such check list must be
completed by Owner and signed off by Vendor prior to Vendor's
Commissioning personnel being dispatched to the Site.
The following activities are the responsibility of the Owner and are
not considered part of the Commissioning activities.
Responsibilities
a. If required by the Owner, the Owner will scan the bar code on all BTS
Products (field replaceable units only) during Commissioning and
organize the data for the purposes of maintaining site specific
historical information.
b. Owner may provide qualified personnel to witness BTS Commissioning.
c. Owner will provide a rolling forecast for the installation of BTSs in
accordance with Subsection 7.5 of the Contract, in clusters of five (5)
or more per market, with a minimum four (4) week lead time prior to the
commencement of BTS commissioning or as negotiated on a local basis.
d. Antenna sweep has been successfully completed and all test results have
been performed in accordance with Section A, Subsection 3 and accepted
by Vendor.
e. Successful Megger testing of ground systems has been completed in
accordance with Section A, Subsection 3, as applicable.
f. Telco Span (T1) has been successfully tested, including backhaul:
Straight Span, Drop & Insert, Test results have been accepted by
Vendor.
g. Switch translations and packet pipes provisioned.
h. At each BTS System Element Location, a POTS line or wireless phone
service is available. Such phone will be used for business purposes
only.
i. Electrical (AC) is available on the System Element Location as
specified in Section A herein, as applicable.
<PAGE>
1.2 Commissioning Activities
Responsibilities
a. Vendor will provide Commissioning teams once (5) or more BTSs in a PCS
System are ready for Commissioning or as negotiated on a local basis.
b. Vendor owned tools and test equipment will be used by Vendor to Commission
the BTS.
c. Upon Vendor's receipt and acknowledgment of the BTS Construction Site Ready
For Acceptance Check List (Attachment 1 to Exhibit B4), Vendor will execute
the Commissioning tests [Minicell Installation 401-703-300], in accordance
with (i), the tests as set forth in [Handbook Section 222] Attachment 2 to
this Exhibit B4 (BTS Commissioning Form and (ii), Section E Exhibit B4
("Project Intervals"). Owner shall be notified reasonably in advance of the
commencement of Commissioning.
d. Vendor will connect all batteries and circuit packs delivered to the BTS
System Element Location.
e. Vendor will provide, place and terminate all RF cables from (i) the BTS to
the ACCA, (ii) ACCA to the antenna cables(s), and (iii) from the BTS to the
GPS, including all clamps, connectors, etc.
f. For growth cells in existing markets (PCS Systems), Owner will perform
Switch database administration and BTS data down loading. Owner will be
responsible for all changes to database engineering and Switch translations
necessary to integrate a newly Commissioned BTS into an existing "on air"'
network.
2. Specifications Reference List for the 1.9Ghz BTS
The following documents describe and govern the installation and
cabling of outdoor BTS Products as provided by the Vendor hereunder.
Vendor reserves the right to update these documents or to provide
additional documents as may be necessary to reflect changes in BTS
installation, testing procedures and/or practices.
Document Number Title
IM 401-703-300 CDMA Mini Cell Installation (Document restricted to
internal Lucent use/not available for order or use by
the Owner)
IM
Handbook
Section 222 CDMA Mini Cell Installation & Integration Tests
(Document restricted to internal Lucent use/not
available for order or use by the Owner)
IM IEH 18 Power Plant Installation
<PAGE>
C. BASE STATION CELL INTEGRATION
1. Activities Required Prior to BTS Cell Integration
a. MSC and Access Manager has passed acceptance process (See Attachment 4 and
5).
b. Fully installed and commissioned base station (See Attachment 2).
c. AC power on-line on 24 hour x 7 days a week.
d. Backhaul facilities (T1 or MW) on-line 24 hour x 7 days a week fully
supporting the designed number of packet pipes.
e. Demonstrated (completed testing checklist) BTS connectivity to MSC.
f. Antennas installed and oriented per RF design documentation, and
successfully swept (see Attachment 1). g. BCR power attenuation settings
correctly set on BTS (performed during BTS Installation; see Attachment 2).
h. Additional BTS Integration work may be required due to rework (e.g. BTS or
backhaul facilities not functioning, etc.) and additional BTS Integration
fees may be applicable. These fees would only apply to rework causes that
are outside Lucent's contractual responsibilities.
2. Typical Crew Content & Duration for Base Station Cell Integration
One MSC technician per market.
One Base Station technician.
Project management oversight.
3. Activities Required for BTS Cell Integration
Integration will include the following and will be performed per Lucent
Document Handbook Section 222. The integration process is accomplished
from the switch remotely from the BTS. The tasks to be performed during
the integration process are:
a. Verify transmission and CSU/DSU facilities.
b. Download software from MSC.
c. Initialize BTS equipment.
d. Perform diagnostic tests for BTS.
e. Perform call through testing.
f. Perform other various functional tests.
<PAGE>
D. SWITCH
The responsibilities of both Owner and Vendor as set out in this
Section D relate only to the Installation of Switch Products.
1.0 Vendor's Roles and Responsibilities
Vendor, or its designated agent(s) or Subcontractor(s), shall perform
the following:
1.1 Engineer, furnish, deliver, install, and test all Switch
Products as described herein, in accordance with Section E
herein ("Project Intervals"), the applicable Specifications and
Attachment 3, 4, and 5 to this Exhibit B4. Delivery requiring
special lifting devices or vehicles to facilitate delivery will
be at additional charge to Owner and coordinated with the
Vendor.
1.2 Furnish a Customer Input(CI) Questionnaire and Data Base
Engineering Questionnaire for completion by Owner.
1.3 Provide draft floor plans of the Designated Switch Site for
Owner's approval. Floor plan layouts will be finalized at the CI
meeting.
1.4 When necessary, perform a site visit to Owner's facilities to
review the information collected from the completed
Questionnaires, survey the Designated Switch Site and generate
floor plans to engineer and install the Switch Products CI
meeting). Any Services in addition to those included in this
Section C which may be requested by Owner as a result of the CI
meeting shall be quoted by Vendor, and if such quote is accepted
by Owner, will be documented in a Change Order pursuant to
Subsection 7.2 of the Contract.
1.5 Deliver the Switch Products to the Designated Switch Site on or
before the date specified in Section E ("Project Intervals").
Owner shall provide all necessary shipping information and Owner
contact personnel name and telephone number for delivery
coordination no later than three (3) weeks prior to scheduled
ship date of Switch Products.
1.6 Vendor shall acknowledge receipt of the Switch Site Ready Check
List within two (2) days of receipt. Upon acknowledgment of the
Switch Site Ready check list, begin Installation of the Switch
Products, in accordance with Section E herein and utilizing the
applicable sections of the Lucent Technologies Installation
Handbook.
1.7 Provide all tools, installation and test equipment necessary for
performance of Vendor's obligations listed herein. Any use of
Vendor's tools and/or test equipment by Owner must be approved
by Vendor and may subject Owner to additional charges. Vendor to
provide their own mobile phones.
1.8 Comply with the Owner's security regulations for the Designated
Switch Site.
1.9 Furnish and install cable required to connect the Switch
Products to the demarcation points defined below:
<PAGE>
1.9.1 Telco Facilities Demarcation
Switch
The Telco facility demarcation points are defined as the DSX
Jacks (to be provided by Owner). Terminal blocks required for
Products, VF, data, and alarm cables will be provided and
installed by Vendor on Owner's Intermediate Distribution Frame
("IDF"). Up to 100 ft. of each type cable (standard length)
shall be provided by Vendor to connect the Switch Products
to the IDF. Vendor will cross connect the jumpers as directed by
Owner. Additional cable and associated materials, if
required, will be Provided at Owner's expense. Vendor shall
terminate the Switch DS-1 cables to the Owner-provided DSX
panel. Owner shall be responsible for bringing and connecting
all other DS-1 facilities to the DSX.
1.9.2 DC Power System Demarcation
Switch
The DC power system demarcation point is defined as the DC
power board fuse(s) and/or breaker(s). Wire for each power and
return lead shall be provided by Vendor (amaximum of 50 ft.
per frame) to connect to the Switch Products. Additional wire
and associated materials, if required, will be provided at
Owner's expense. DC fuses and/or breakers and any other part of
the power board or DC power system (including inverters) are
not provided by Vendor. Information regarding the required fuse
and/or breaker quantities and sizes will be provided by the
Vendor, with actual hardware provided by the Owner.
1.9.3 Alarm System Demarcation
Switch
The alarm system demarcation point is defined as the Vendor
furnished alarm terminal block or Owner provided IDF. Up to 100
ft. of alarm cable shall be provided by Vendor to connect
Product alarms to the terminal block. Up to 100 ft. of cable
shall also be provided to connect Vendor's alarm display and
control panel at the Switch. Additional cable and associated
materials, if required, will be provided at Owner's expense. Any
alarm points that the Owner may want to take to an external
alarm system will be done at Owner's expense.
1.9.4 Switch Demarcation
Owner's designated DSX position.
1.10 If requested by Owner and at Owner's additional expense, provide
all overhead cable trays at each Designated Switch Site for the
Switch room and Transport room.
1.11 At each Designated Switch Site, provide up to 50 ft. of wire
for the ground lead extending from the Products to the Main
Ground Bar (MGB).
1.12 Furnish, install and test two (2) video display units, two (2)
printers. No telephone key system or telephones are provided.
Any additional items will be provided and installed at Owner's
expense.
1.13 Complete the Switch Installation on or before the date as
specified in Section E ("Project Intervals") herein.
<PAGE>
2.0 Owner's Roles and Responsibilities
Owner or its designated agent(s) or subcontractor(s), shall perform the
following:
2.1 Provide overall program management and engineering functions
related to the Owner's responsibilities listed herein. This
includes, but is not limited to, management of schedules for BTS
shipments, other product suppliers, telco circuit orders,
utility orders, building access coordination, and engineering
relating to the applicable Designated Switch Site.
2.2 Provide all real estate property, environmental approvals,
leases, rents, rights-of-way and all local and federal
government permits and licenses applicable to the Installation
and operation of a CDMA MTA and/or BTA market (excluding any
applicable permits required in the normal course of Vendor's
doing business), including but not limited to, Certificates of
Occupancy and FCC, construction, zoning and FAA permits.
2.3 Gather the information necessary to complete the Customer
Information and Data Base Engineering Questionnaires on or
before the applicable date specified in Section E ("Project
Intervals").
2.4 Review, approve and return Vendor's draft floor plan for each
Designated Switch Site on or before the date specified in
Section E.
2.5 Prepare the Switch System Element Location as necessary,
including the following:
2.5.1 Provide all required architectural work, civil
engineering and construction work including, but not
limited to, site acquisition, site preparation such as
grading, removal of trees and debris, roads, tower and
building foundations, and fencing.
2.5.2 Install Vendor provided GPS antenna system and all
associated cabling prior to BSC install start. Owner
will be responsible for cross-connection of Switch
cables at the DSX position designated by Owner.
2.5.3 Provide adequate building facilities, utilities, space
and environmental conditions for Vendor's Installation
personnel and Products as well as any other Owner
equipment. Owner shall ensure that each Designated
Switch Site is prepared in accordance with the
environmental requirements for Vendor's Switch Products
as set forth in Section C, Subsection 3.0 herein. All
Designated Switch Sites shall provide safe access for
Installation personnel taking into account the kind of
activity to be performed, the location of the sites,
and inclement weather conditions.
2.5.4 The Designated Switch Site shall have air-conditioning,
heating, ventilation, lighting and adequate working
space that is free of debris and other clutter which
might hinder the Installation. The building must be dry
and free from dust and in such condition as not to be
hazardous to Vendor personnel or the Products and
materials to be installed. Vendor shall gather and
separate debris from usable material, mark accordingly,
and place in an area identified by Owner for Owner's
pick-up and disposition. The air conditioning duct
should be purged by the Owner prior to equipment
delivery.
2.5.5 Provide any building renovations, computer floors and
wall penetrations. Provide openings (including elevator
space where required) to allow the Switch Products to
be placed into position. All Owner provided material
and utility and telco services shall be
<PAGE>
installed prior to Lucent Technologies job start date.
2.5.6 Provide and install adequate fire fighting apparatus at
each Designated Switch Site. Activation of a water fire
extinguishing system may void the Product warranty.
2.5.7 Provide and install all required commercial AC power
and associated fixtures including, but not limited to,
all necessary conduits, AC panels, AC circuit breakers,
AC fuses, building wiring, convenience outlets,
lighting and AC grounds. All electrical facilities
shall conform to the latest issue of the National
Electrical Code (NEC) and any local codes to insure a
safe work area.
2.5.8 Provide adequate security for the Switch Products,
installation materials and tools at each Designated
Switch Site and/or storage facility (if required).
2.5.9 Provide three telephone lines (two for modems and one
telephone set) and service (dial tone from a local
exchange) at each Switch Designated Switch Site. One
(1) line at installation start, and two (2) modem lines
four (4) weeks prior to commissioning start. All
traffic generated by Vendor personnel will be limited
to business and Product testing purposes only. Any
personal calls will be the responsibility of Vendor.
Costs to be provided on a pass-thru basis. Vendor to
supply own phones.
2.6 Engineer, furnish, deliver, install and test the following in a
professional and workmanlike manner:
2.6.1 All required overhead cable trays at each Designated
Switch Site. If requested by Owner, and at Owner's
additional expense, such cable trays can be provided by
the Vendor for the Switch room and Transport room.
2.6.2 An IDF for each Designated Switch Site. The IDF can be
a free standing rack.
2.6.3 A single point grounding system, including an MGB and
all subsequent connections to the ground field, shall
be provided for the Products at each Designated Switch
Site. The ground fields shall measure 5 ohms or less.
2.6.4 A negative 48 VDC power system and a 500VA DC to AC
inverter for each Designated Switch Site, including any
alarm cables, terminal blocks and AC power wiring.
2.6.5 Dedicated DS-1 facilities to connect each Switch to the
PSTN. If direct digital DS-1 facilities are not
available, the Owner may incur additional costs to
interface the Products. DS-1 facilities are to be
provided (from the DSX panel provided by Owner) to the
Telco facility demarcation point as defined in
paragraph 1.9.1 of this Section C of this Exhibit B4 at
each Designated Switch Site.
2.6.6 All DSX cross connect panels including: any associated
relay racks, fuse and alarm panels, power wiring, HF
cables, jumpers, alarm cables, VF jack fields, patch
cords and terminal blocks.
2.6.7 All alarm sensors and wiring, other than those
which are included with the Products, and connect such
sensors and wiring to Owner-provided alarm terminal
blocks. This includes, but is not limited to, open
door, high/low temperature, tower lights and smoke
detector alarm sensors.
<PAGE>
2.6.8 All owner provided material shall be available to
Lucent Installation prior to the job start date.
2.7 Provide Vendor-designated personnel free access to each
Designated Switch Site as required to perform Vendor's
obligations under the Contract. Access is to be provided as
follows:
2.7.1 Adequate roads and parking to each Designated Switch
Site for delivery vans and two-wheel drive vehicles.
2.7.2 Owner shall provide all required security passes and
clearances.
2.7.3 Owner will provide Vendor's authorized employees the
same level of access to the Designated Switch Site as
afforded Owner's employees. Vendor shall provide Owner
twenty-four hours' advance notice of the need for
access. Telephonic notification is permissible.
2.8 The Owner will provide proper floor loading and wall
installation and any additional bracing needed to meet any
Federal, State or Local Government seismic zone requirements. If
requested in the CIQ, Vendor will provide and install earthquake
anchoring kits for the Switch at an additional expense to Owner.
2.9 Owner shall provide free telephone service (air time and long
distance) to Vendor personnel during the Term of this Contract
as may be necessary for the Vendor to carry out any
Installation, testing, or other Services necessary for
Installation of the Switch . The purpose of such service will be
to support the Switch Product Installation for testing purposes,
business communications, and safety needs of Vendor personnel.
The free service shall include, but not be limited to,
activation charges, air time, long distance, and roamer charges
for both cellular and wired service.
2.10 The Owner will provide the Vendor's personnel clear access to
all end points that are to be cabled to or from the Switch
and/or the BSC. The Owner will be responsible for any
construction associated with clear access (holes through walls,
etc.) and any subsequent construction needed per local
ordinances or building codes once cabling is complete (fire
stopping, etc.).
2.11 All Owner provided materials or services shall be available
prior to Lucent's commencement of installation services.
3.0 Products Environmental Requirements
3.1 All preparation work for the Designated Switch Site shall be
performed in such a way as to allow operation of the Switch
Products in accordance with Vendor's standard environmental
requirements for the Products. Operation outside the normal
conditions will void the warranty.
3.1.1 In the event Owner elects to deploy the Switch Products
in areas where Owner has reason to believe that the
normal environmental parameters for such Products may
be exceeded, Owner and Vendor shall mutually agree on
the conditions in which the warranty may remain in
effect.
<PAGE>
4.0 Owner's completion of its responsibilities as set forth in Section C,
Subsection 2 and Vendor's sign-off of the Site Ready Check List
referenced in Section D herein shall constitute the Designated Switch
Site as being "Site Ready."
5.0 Designated Switch Site Ready for Switch Installation
Completion of Owner's responsibilities as set forth in Section C herein
shall result in the Designated Switch Site being declared Site Ready
for Installation.
6.0 System Element Location/Designated Switch Site Not Site Ready
6.1 Vendor reserves the right to charge Owner for downtime and
travel expenses for the dispatch of Vendor personnel to System
Element Locations or Designated Switch Sites, as applicable,
which are not ready to begin Installation and/or Commissioning
as applicable as scheduled. Owner will be responsible for
reimbursing the Vendor for all downtime lost due to
actions/inactions by Owner, its agents or subcontractors. All
such charges, including hourly charges (supported by reasonable
documentation provided by Vendor), will be charged at Vendor's
standard rates then in effect unless otherwise specified in the
Contract.
All such charges will be paid by Owner within thirty (30) days
of receipt of Vendor's invoice thereof.
6.2 Vendor reserves the right to re-assign its Installation
personnel should the downtime described in Section 4.1 above
exceed three (3) consecutive days. Vendor reserves the right to
charge, in addition to its hourly downtime rate, actual and
reasonable expenses incurred to cover cost of travel expenses
for its employees or Subcontractors.
All such charges will be paid by Owner within thirty (30) days
of receipt of Vendor's invoice thereof.
6.3 Owner reserves the right to cancel Vendor's scheduled
commencement of Commissioning without penalty, with ten (10)
business days notice. This notice must be written and signed by
an authorized Owner employee. This notice must be acknowledged
in writing by Vendor's designated representative prior to the
start of such ten (10) day period. Electronic mail or facsimile
notices are acceptable.
<PAGE>
E. PROJECT INTERVALS
These typical intervals set forth below assume that the Products and/or
Services, as applicable, have been forecasted.
<TABLE>
1.0 Order to Delivery Intervals
<S> <C> <C> <C>
Activity Switch BTS MSC Power
Questionnaire Received by Lucent Week 1
Quote Return to Owner For Approval Week 2 Week 1
Quote Accepted / Order Placed Week 3 Week 1
Engineering Specs In Factory Week 4-7 Week 3 Week 2-5
Manufacture/Assemble/Test Week 8 - 12 Week 4 - 6 Week 6 -13
Ship Week 12 Week 6 Week 13
Delivery Week 13 Week 7
Switch Installation Begins Week 14-21 Week 8 Week 15-19
Complete Week 21 Week 8 Week 19
* Assumes Owner has reviewed and approved floor plan.
2.0 Services Intervals
Activity Switch ** BTS ***
Installation Complete Site Ready sign-off Site Ready sign-off
plus plus
12 weeks 3 days
</TABLE>
** Vendor's Price assumes no more than three (3) Switches s will be
Commissioned concurrently, with work to be performed Monday
through Friday (excluding Vendor Holidays), not to exceed forty
(40) man hours per week. Performance of Installation Services
which require Vendor's personnel to work more than forty (40)
hours per week, and/or the Installation of more than 3 Switches
concurrently, if requested by Owner, will result in additional
charges to Owner at premium rates.
*** Vendor's Commissioning Price assumes a steady work flow of not
more than 300 BTSs per calendar month in no more than 20 PCS
Systems, in clusters of five (5) or more, with work to be
performed Monday through Friday, (excluding Vendor Holidays), not
to exceed forty (40) man hours per week. Performance of
Commissioning Services which require Vendor's personnel to work
more than forty (40) hours per week, and/or the Commissioning of
more than 300 BTSs per month, if requested by Owner, will result
in additional charges to Owner at premium rates.
<PAGE>
F. PROJECT MANAGEMENT
Note: Project Management is associated with Per Cell Pricing
(See Section 2 of Schedule 3A)
Vendor will provide Owner proven support in the timely management of
the effort of delivery, boltdown, commissioning, and integration of
base station equipment as described in the Statement of Work listed
below.
1.0 Statement of Work
1.1 Work with Owner Site Development personnel involved with
Site Acquisition to insure timely ordering of PCS Minicells and
provide accurate forecast reports based on data supplied by
Owner's Site Acquisition personnel.
1.2 Provide status reports to Owner as requested.
1.3 Manage on time delivery of PCS Minicells from the Owner's local
distribution warehouse to the Site. This includes any
extraordinary delivery requirements such as cranes or
helicopter. (Cost of extraordinary delivery or delivery greater
than 50 miles from Owner's warehouse will be an Owner
responsibility.)
1.4 Project Manage Vendor Installation Services for bolting,
installing, testing and integration of the PCS Minicells.
1.5 Project Management will coordinate with construction schedules
the: bolting down, installation, testing and integration of
Minicells.
1.6 Provide PCS Minicells serial number by Site to Owner and Vendor
Product Management. Providing the Serial Numbers to Vendor
Product Management will facilitate any changes and warranty work
that may be covered under the Vendor Change Notice (CN) process.
1.7 Project Manage PCS Minicell optimization including sector
testing.
1.8 Hold or attend Build Plan and Construction status meetings to
report equipment integration status as needed.
2.0 Planning Assumptions
2.1 Resources required will be determined by joint agreement.
2.2 Vendor will manage transportation of the PCS Minicells and
associated equipment to the Site. The cost for this service will
be fixed per Site. Extraordinary charges, crane, helicopter,
special equipment or additional personnel etc., when applicable,
will be a Owner responsibility.
2.3 Owner will be responsible for insurance and damage including any
losses due to transportation and storage. Normal Vendor warranty
applies to unit functional failure. Unit damage occurring while
in shipment, or while stored at the Owner's local distribution
center is at Owner cost.
2.4 A purchase order will be signed prior to start of work efforts.
<PAGE>
G. PROGRAM MANAGEMENT
Program Management is defined as the coordination, scheduling, tracking
and controlling of a Wireless Project with the presence of a local
project manager in the local market to ensure the task of meeting
schedules and budgets are accomplished. Vendor Wireless Program
Managers (WPM's) will be responsible for tracking cell site development
from the RF engineering phase through site acquisition, construction,
BTS installation, integration and optimization. All vendors and
contractors will have been selected and contracted by the Owner.
The Vendor Wireless Program Manager will be a delegate of the Owner
Regional Implementation Manager. The Owner's Implementation Manager is
free to customize the role of the WPM by assigning whichever
responsibilities they choose to Lucent. The WPM will represent the
Implementation Manager's interest in meetings and correspondence with
all key contractors, vendors and other Owner units. The WPM will
provide written and verbal communication to the project status at
whatever intervals requests. The WPM will also provide at least monthly
management review sessions to be conducted in person at the Regional
Headquarters.
1.0 Program Management Role
The WPM is expected to ensure discipline across the deployment of the
project. Criteria in this area include:
1.1 Meeting performance standards
1.2 Ensuring consistency in application
1.3 Achieving excellence in execution
1.4 Working for continuous improvement
2.0 Accountability
The Wireless Program Manager assumes accountability for the entire
project. The areas of accountability are:
2.1 Defining the project scope
2.2 Assembling and directing the project team
2.3 Engaging all support organizations
2.4 Identifying resource requirements
2.5 Serving as the primary customer liaison
2.6 Reporting project status
2.7 Managing all changes
2.8 Acquiring customer's acceptance
3.0 Program Management Service Components
3.1 Project Control - All of the activities required to
manage the program costs and schedule:
3.1.1 Change Control - Provides support that not only
includes the management of changes as per the contract,
but also ongoing assessment and trending of changes.
<PAGE>
3.1.2 Management of Schedules and Reports
- Master Project Schedule
- Schedule for the functional service areas
- Charts that reflect progress against plan
- Weekly status reports, which could include:
RF Plan, Site Acquisition Plan, Spectrum Clearance
Plan, Microwave Facilities - Design Activities,
Microwave Facilities - Detailed Engineering Plan,
Site Construction, Network Design Plan, Cell
Engineering Plan, Switch Engineering Plan, Cell
Plan, Optimization Plan.
3.2 Contract Administration
Interpret and maintain the contract to ensure that there is
total understanding of planned deliverables:
3.2.1 Provide claims management.
3.2.2 Perform project administration.
3.2.3 Provide records management.
3.2.4 Contract administration functions ensure that every
member of the team understands their responsibilities
and addresses the proper objectives.
3.3 Accounting/Controller Management
Analyze all vendor and subcontractor billing to verify product
delivery and performance as per the purchase agreements.
3.4 Management of Functional Services
RF Design, Site Acquisition, Network Planning and Development,
Spectrum Clearing/Microwave Relocation, Construction Management,
Microwave Backhaul Services, Cell Engineering, Switch
Engineering, and Optimization Services.
3.5 Experience and Education
The WPM is a veteran project manager with two years service
working on Owner projects as well as extensive project
management experience in other areas of the telecommunications
industry. The WPM has proven to have strong leadership,
organizational and personal relations skills and has achieved or
is in pursuit of accreditation as a Professional Project Manager
(PMP).
4.0 Program Management Pricing
Due to the extreme variability in scope this service is priced using
the Time and Material method. Prior to project inception Owner and
Vendor must agree to the expected duration of the project. Any partial
months would be prorated. All travel and living costs will be at the
Vendor's standard per-diem rate and will be subject to the Owner's
prior approval. A purchase order will be signed prior to start of work
efforts.
<PAGE>
Lucent Technologies and Sprint PCS Proprietary
ATTACHMENT 1
To Exhibit B4
BTS CONSTRUCTION SITES
READY FOR ACCEPTANCE (RFA) CHECKLIST
Site Name: Site #:
Site Address: Date Submitted:
Site Ready: Construction Elements
Type of Site: Raw Land Co-Locate Roof-top Indoor Model Type
------------------------------------------------- --------------
Activity Date Observed
------------------------------------------------- --------------
----------
Pad or Platform Ready
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
Permits Secured
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
Site Secure (e.g., locked gate on fence)
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
Equipment requirements identified (e.g., Crane or lift )
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
Landlord/Tenant Advised of Delivery Schedule
---------- -------------------------------------------------- --------------
Additional Information:
- - ------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------
Site Ready: Operational Elements
-------------------------------------------------- --------------
Activity Date Observed
-------------------------------------------------- --------------
----------
Grounding Complete per 96101 7L
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
Spectrum Clear
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
Packet Pipes provisioned
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
Switch Translations complete
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
Sweep Tests Complete per SSE0 3.003.10.002 (6/17/97)
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
AC Available
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
BTS bolted down
---------- -------------------------------------------------- --------------
---------- -------------------------------------------------- --------------
T1 Available
---------- -------------------------------------------------- --------------
<PAGE>
BTS CONSTRUCTION SITES
READY FOR ACCEPTANCE (RFA) CHECKLIST (continued)
Page 2 of 2
Additional Information:
- - ------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------
Information for Site Access
Contact Name: Contact Phone #:
Special Access Instructions:
Owner Approval: Vendor Acknowledgment:
Date: Date:
Note: Owner shall certify the correct Model design for the site. Any
deviation from the design not noted on this form may result in additional
charges.
<PAGE>
ATTACHMENT 2
To EXHIBIT B4
BTS Commissioning Form
Cell ID PCS ID
Labor Order Number
-----------------------------
-----------------------------
- - --------------------------- ---------------------------------------------
Date Prepared: Test Reference
(cite document, chapter & section as applicable)
- - --------------------------- ---------------------------------------------
HB 222 Sections 2 through 13.
- - --------------------------- ---------------------------------------------
Prepared by: Test References for Growth Frames Only:
--------------------------------
HDBK 222 Sections 204, 208 & 210
- - -------------------------- --------------------------------------------------
Lucent Document 401-703-300,
Section (8) or (9).
Approval to Proceed Vendor Date
------------------------- -------------
with Testing Operations Date
------------------------- -------------
Engineering Date
------------------------- -------------
Test(s) to be Performed by
Vendor Owner
------------------------- ----------------------------
Exceptions
Critical Exception Item Corrective Action Date
(y/n) Brief Description Referral, Trouble Ticket, Corrected
& Test Reference E.T.A., etc
Comments
Owner Acceptance
- - ------------------------------------------------------------------------------
Accepted Accepted Not Accepted
Approved by Date ATP exceptions Critical Items
listed listed
- - ------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------
Operations
- - ------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------
Engineering
- - ------------------------------------------------------------------------------
<PAGE>
ATTACHMENT 3
TO
EXHIBIT B4
PCSC - 5ESS SITE READINESS CHECKLIST
ALL APPLICATIONS
<TABLE>
<S> <C> <C> <C>
Y N NA Has the equipment ordering list been reviewed with the customer?
Y N NA Are all site drawings complete and available?
Y N NA Has ODA/5E software been reserved from CTSO?
Y N NA Has the systems engineering group reviewed the customer requirements?
Y N NA Has the FE completed a site visit?
Y N NA Has A/C power service been supplied according to specs?
Y N NA Is thefloor space cleared?
Y N NA Is there sufficient space to store equipment?
Y N NA Is the building secure?
Y N NA Have all access permissions been obtained (keys/pass cards)?
Y N NA Have all the equipment specs transmitted?
Y N NA Are the T1/E1 facilities in place and functional?
Y N NA Has the customer ordered a block of phone numbers?
Y N NA Is the equipment scheduled to ship complete?
Y N NA Are the delivery logistics known?
Y N NA Is there a plan for moving the equipment into or onto the site?
Y N NA Are the ECP/switch and cell software generics compatible?
Y N NA Can the room adequately dissipate the heat generated by the ultimate configuration?
Y N NA Is the proper customer provided air conditioning in place?
Y N NA If DC powered, is the power system in place or is there adequate room to install the system?
Y N NA If Lucent is not installing the ground system, is the halo ground in place?
Y N NA Are the cable racking and supports in place?
</TABLE>
NOTES
===============================================================================
<PAGE>
ATTACHMENT 4
To EXHIBIT B4
MSC and AM Acceptance
PCS ID
Date Prepared: Test Reference (cite document, chapter & section as applicable)
401-703-203 Sect. 2 thru 6
Prepared by:
Approval to Proceed Vendor Date
with Testing -------------------- ------
Operations Date
-------------------- -------
Engineering Date
-------------------- ------
Test(s) to be Performed by
Vendor Owner
------------------ ---------------------------------------
Exceptions
Critical Exception Item Corrective Action Date Corrected
(y/n) Brief Description Referral, Trouble Ticket,
& Test Reference E.T.A., etc.
Comments
-------------------------------------------------------------
-------------------------------------------------------------
Owner Acceptance
- - ------------------------------------------------------------------------------
Accepted Accepted Not Accepted
Approved by Date ATP exceptions Critical Items
listed listed
Operations
Engineering
<PAGE>
ATTACHMENT 5
TO
EXHIBIT B4
Owner Program
Power/ 5ESS Switch Acceptance Form
Date:____________
MTA: ___________________
PCS System (City/State):__________________
Site Number: __________________
- - ----------------------------------------------------------------------
POWER & SWITCH INSTALLATION ACCEPTANCE
- - ------------------------------------------------------------------------------
Item: Initial Date Remarks/Open Items
- - ------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------
1. Pwr-Plt per HDBk 18 ___ ______ ___________________
- - ------------------------------------------------------------------------------
2. 5ESS 2000 ___ ______ ___________________
- - ------------------------------------------------------------------------------
(Instl Per HDBk 555/SigTWIDO)
- - ------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------
3. Cabled/Connect per Job Specs/Dwgs ___ _______ __________________
- - ------------------------------------------------------------------------------
4. Tested per HDBk 351 & SIG-TWIDO ___ _______ __________________
- - ------------------------------------------------------------------------------
Pwr.PLT/Switch Submitted by _________________________ ________
Lucent Technologies Date
Pwr.PLT/Switch Accepted by ___________________________ ________
Owner Date
Lucent Technologies submits the Power Plant and 5ESS 2000 Switch Installation as
complete. Signature by Owner, constitutes acknowledgment of installation
completion
______________________________________________________________________
Issue B, Sept 27,1996
Definitions (To be supplied by Vendor in support of this document, if needed.)
<PAGE>
EXHIBIT B5
RF OPTIMIZATION PROCESS
Section 1. Optimization Service - Cell Additions to Existing
CDMA Systems
Section 2. Cluster and System Optimization Service -
New Cells
Appendix A Cluster Optimization Acceptance Form
Appendix B Final System Optimization Completion Form
<PAGE>
Exhibit B5
section 1
OPTIMIZATION SERVICE - CELL ADDITIONS TO EXISTING CDMA SYSTEMS
STATEMENT OF WORK
Optimization for Post Deployment Cell Additions:
Optimization testing for post deployment cell additions will be performed per
Vendor documented optimization process. This process will include:
Cluster definitions and drive routes for each defined cluster will be
defined by Vendor with agreement by Owner RF teams on a per market basis.
Sector test of each site.
Drive test the selected routes (Unloaded) including origination and drop
out call tests
Analyze drive test data.
Optimization changes made as necessary to cell sites on drive routes:
Parameter changes (e.g. Power attenuation)
Neighbor list changes
Antenna alignment recommendation
Inputs
Owner
1. Spectral monitoring reports.
2. All antennae and base stations installed and working
correctly.
3. All cells in the cluster have successfully completed
Integration and are ready for Cluster Optimization. Cell
site Integration includes power calibration and call
through testing inside and outside the base station. Cell
site readiness for optimization also includes:
Manual diagnostics - ATP
Routine Diagnostics - ATP
Functional test - ATP
All integration records must be available to the
optimization team.
4. Design specifications (coverage/propagation maps, coverage
requirements).
5. Latitude and longitude measurements of the acquired sites.
6. Count of acquired sites, cell names, cell numbers and
associated ECP/DCS information, PN offsets plans, and cell
configuration (1, 2, or 3 sector sites).
7. Antennae downtilts and orientations.
8. Antennae installation and operation dates.
9. Operation center workspace and locality.
10. Pre-defined optimization routes, including primary &
secondary roads. Identification of critical marketing
areas is also essential.
11. Switch and OMP access.
12. Activation of Vender's test mobiles and invoicing
resulting in a net charge of zero dollars to the Vender
for access and usage.
Vendor
1. Documented optimization process.
2. Optimization drive team and all required test equipment
including test mobiles.
3. Optimization Plan and Schedule
<PAGE>
Outputs
Optimization for Post Deployment Cell Additions
- Cluster drive route testing will meet the following exit criteria on
a per cluster and among all the clusters being optimized at the same
time, with the exception of "Performance Exclusion Zones" which
are defined within the assumptions of this proposal:
- 90% of Forward Frame Error Rate (FFER) and RFER samples
should be less than or equal to 2% FFER and 2% RFER.
- Drop Call Rate should be less than or equal to 2% over 90%
of the area, assuming 90 second call duration.
- Origination Success Rate should be 90% or greater over 100%
of the area.
- Forward Link Burst Error Rate of 5 or more consecutive frames
in error, is less than 10%.
- Cluster Drive Route Data/Output Reports/Plots Completed.
- ECIO Max Finger, FCIO Aggregate, MRX (Mobile Receive),
MTX (Mobile Transmit), FFER, RFER, Forward Link Burst Error
for the cluster drive test.
- Sector test plot of ECIO Max Finger, MRX, MTX, and per PN plot
for each antenna face.
- Dropped call plots, origination test plots, soft hand off
histograms.
- Cluster Optimization Acceptance Form (APPENDIX A). The form includes
all exit statistics plus a list of problems identified which are
over and above meeting the exit criteria.
Optimization Team
- Pricing assumes an Optimization Team consisting of the following:
Driver(s), RF engineer(s) Data Collector(s), and Data Processor(s)
as required. The number of each resource deployed depends upon the
number of available clusters and size of the system being optimized.
Assumptions
Vendor cell site and switch equipment only,
Data Processor, Data Collector, and driver are local to the market
Price/cell assumes acceptable response time from Owner on activities that
Vendor is not responsible for.
Vendor will provide their own data analysis tools, which does not include
PlaNET.
Antenna adjustments are the responsibility of Owner. Pricing assumes
acceptable response for antenna adjustments.
Cost of ANY delay (even 1 week or less) due to Owner unable to begin
optimization will be a cost to Owner, regardless if Owner chooses to send
Vendor home or pays Vendor to stay on-site.
Workweek is defined as 40 hours (5 days per week x 8 hours per day)
Once Vendor resources are placed in a market it is assumed that all cells
sites which need to be optimized are available in order to sustain that
team. If all cell sites are not ready as planned to sustain the team, a
daily fee of $4,000 will be charged. If Vendor did not perform the RF
design of any system, Vendor will not be responsible for achieving
performance exit criteria. Performance exit criteria defined by Owner will
be goals only for optimization. Vendor is only responsible for performing
due diligence in obtaining these objectives.
Maintenance of cells is the responsibility of Owner.
Base stations that are part of a cluster will not be optimized on an
individual basis. They must be optimized in clusters (number of cells to be
determined mutually).
All clusters defined will be mutually agreed upon.
All drive routes will be jointly defined by Vendor and Owner in advance of
work beginning in a market.
Agreement will be reached on coverage areas.
Agreement will be reached on defining "no coverage".
<PAGE>
Any area that can not clearly be optimized due to the following reasons
will be classified as a "Performance Exclusion Zone". Data gathered from
that zone will be removed from the exit criteria sample set:
Lack of RF coverage
Prohibitive interference beyond the control of the engineers
Non-standard hardware configurations using another vendor's equipment.
All cells in a given cluster have completed integration and are ready for
optimization. Cell site integration includes power calibration and call
through testing inside and outside the base station. Cell site readiness
for optimization also includes:
Manual diagnostics - ATP
Routine Diagnostics - ATP
Functional test - ATP
All integration records must be available to the optimization team.
If cell installation and integration was not performed by Vendor and does
not meet Vendor Optimization Service entrance criteria, a daily fee of
$4,000 will be charged for Vendor personnel to correct the problems to
prepare for optimization.
An Optimization Plan and Schedule will be agreed-upon prior to start dates.
Owner will provide a qualified cell technician to work with Vendor on RF
Optimization of CDMA Growth Cells.
Owner staffing as per the Optimization Plan will be in place prior to the
start of Optimization Services.
Owner will provide Vendor personnel with adequate workspace, including
desks, office equipment (copier & fax machine) and access to telephones.
Agreement will be reached on how resources will be re-assigned in the event
conditions in a market indicate loss of productivity for any significant
period of time.
<PAGE>
Exhibit B5
Section 2
CLUSTER AND SYSTEM OPTIMIZATION SERVICE - NEW CELLS
Statement of Work
New Cell Cluster and System Optimization:
Cluster Optimization testing for new CDMA markets will be performed per
Vendor documented optimization process. The objective of cluster optimization is
to reach system performance goals in a manageable subset of contiguous cells
within the system. During cluster optimization, coverage holes are identified,
neighbor lists, access windows and system parameters are modified through
analysis of drive test data to improve performance.
System Optimization is the process where individual clusters are combined
together so that the system as a whole provides the best coverage and
performance possible. Vendor performs System Optimization among completed
clusters throughout the Optimization period.
Processes for Cell Cluster and System Optimization include:
- Cluster definitions, drive routes for each defined cluster, and drive routes
between adjacent clusters (System Optimization) will be defined by Vendor
with agreement by Owner RF teams on a per market basis.
- Baseline drive test for each drive route (Unloaded).
- Drive test the selected routes (Unloaded & Loaded).
- Analyze drive test data.
- Optimization changes made as necessary to cell sites on drive routes:
- Parameter changes (e.g. Power attenuation)
- Neighbor list changes
- Antenna alignment recommendation (if acceptable for analog system)
- Origination, termination, and drop call tests performed on defined drive
routes.
Inputs
Owner
1. Spectral monitoring reports.
2. All antennae and base stations installed and working
correctly.
3. All cells in the cluster have successfully completed
Integration and are ready for Cluster Optimization. Cell
site Integration includes power calibration and call
through testing inside and outside the base station. Cell
site readiness for optimization also includes:
Manual diagnostics - ATP
Routine Diagnostics - ATP
Functional test - ATP
All integration records must be available to the
optimization team.
4. Design specifications (coverage/propagation maps,
coverage requirements).
5. Latitude and longitude measurements of the acquired sites
6. Count of acquired sites, cell names, cell numbers and
associated ECP/DCS information, PN offsets plans, and
cell configuration (1, 2, or 3 sector sites).
7. Antennae downtilts and orientations.
8. Antennae installation and operation dates.
9. Operation center workspace and locality.
10. Pre-defined optimization routes, including primary &
secondary roads. Identification of critical marketing
areas is also essential.
11. Switch and OMP access.
12. Activation of Vender's test mobiles and invoicing
resulting in a net charge of zero dollars to the Vender
for access and usage.
<PAGE>
Vendor
1. Documented optimization process.
2. Optimization drive team and all required test
equipment including test mobiles.
3. Optimization Plan and Schedule
Outputs
New Cell Cluster and System Optimization
Drive route testing will meet the following exit criteria on a per cluster basis
and among all of the clusters being optimized at the same time (System
Optimization), with the exception of "Performance Exclusion Zones" which are
defined within the assumptions of this proposal:
90% of Forward Frame Error Rate (FFER) and RFER samples should be less than
or equal to 2% FFER and 2% RFER.
Drop Call Rate should be less than or equal to 2% over 90% of the area,
assuming 90 second call duration.
Origination Success Rate should be 90% or greater over 100% of the
area.
Forward Link Burst Error Rate of 5 or more consecutive frames in error, is
less than 10%.
Cluster Drive Route Data/Output Reports/Plots Completed.
ECIO Max Finger, FCIO Aggregate, MRX (Mobile Receive), MTX (Mobile
Transmit), FFER, RFER, Forward Link Burst Error for the cluster drive test.
Sector test plot of ECIO Max Finger, MRX, MTX, and per PN plot for each
antenna face. Dropped call plots, origination test plots, soft hand off
histograms.
Cluster Optimization Acceptance Form (APPENDIX A) and Final System
Optimization Completion Form(APPENDIX B). The forms includes all exit
statistics plus a list of problems identified which are over and above
meeting the exit criteria.
Optimization Team
Pricing assumes an Optimization Team consisting of the following:
Driver(s), RF engineer(s) Data Collector(s), Switch engineer and Data
Processor(s) as required. The number of each resource deployed depends upon
the number of available clusters and size of the system being optimized.
ASSUMPTIONS:
Vendor cell site and switch equipment only,
Data Processor, Data Collector, and driver are local to the market
Price/cell assumes acceptable response time from Owner on activities that
Vendor is not responsible for.
Vendor will provide their own data analysis tools, which does not include
PlaNET.
Antenna adjustments are the responsibility of Owner.
Pricing assumes acceptable response for antenna adjustments.
Cost of ANY delay (even 1 week or less) due to Owner unable to begin
optimization will be a cost to Owner, regardless if Owner chooses to send
Vendor home or pays Vendor to stay on-site.
Workweek is defined as 40 hours (5 days per week x 8 hours per day)
<PAGE>
Once Vendor resources are placed in a market it is assumed that all cell
sites which need to be optimized are available in order to sustain that
team. If all cell sites are not ready as planned to sustain the team, a
daily fee of $4,000 will be charged.
If Vendor did not perform the RF design of any system, Vendor will not be
responsible for achieving performance exit criteria. Performance exit
criteria defined by Owner will be goals only for optimization. Vendor is
only responsible for performing due diligence in obtaining these objectives
Maintenance of cells is the responsibility of Owner.
Base stations that are part of a cluster will not be optimized on an
individual basis. They must be optimized in clusters (number of cells to be
determined mutually).
All clusters defined will be mutually agreed upon.
All drive routes will be jointly defined by Vendor and Owner in advance of
work beginning in a market.
Agreement will be reached on coverage areas.
Agreement will be reached on defining "no coverage".
Any area that can not clearly be optimized due to the following reasons
will be classified as a "Performance Exclusion Zone". Data gathered from
that zone will be removed from the exit criteria sample set:
Lack of RF coverage
Prohibitive interference beyond the control of the engineers
Non-standard hardware configurations using another vendor's equipment.
All cells in a given cluster have completed integration and are ready for
optimization. Cell site integration includes power calibration and call
through testing inside and outside the base station. Cell site readiness
for optimization also includes:
Manual diagnostics - ATP
Routine Diagnostics - ATP
Functional test - ATP
All integration records must be available to the optimization team.
If cell installation and integration was not performed by Vendor and does
not meet Lucent's Optimization Service entrance criteria, a daily fee of
$4,000 will be charged for Vendor personnel to correct the problems to
prepare for optimization.
An Optimization Plan and Schedule will be agreed-upon prior to start dates.
Owner will provide a qualified cell technician to work with Vendor on RF
Optimization of CDMA Cells.
Owner staffing as per the Optimization Plan will be in place prior to the
start of Optimization Services.
Owner will provide Vendor personnel with adequate workspace, including
desks, office equipment (copier & fax machine) and access to telephones.
Agreement will be reached on how resources will be re-assigned in the event
conditions in a market indicate loss of productivity for any significant
period of time.
<PAGE>
Exhibit B5
Lucent Technologies and Sprint PCS Proprietary
Appendix A
Cluster Optimization Acceptance Form
MTA Name: Cluster ID________________________
(List of Cell Ids for this Cluster included on page 2 of this
attachment)
Date Started:__________________________
Date Completed:_____________________________
Optimization Team Name Company Performance
Summary:
For binned data over 90% of area available, the following criteria will
be met
Specification Pass
1 . Average Forward Link 2% or less average
FER/bin
2. Average Reverse Link 2% or less average
FER/bin
3 % Call Origination 90% or better for originating
and terminating calls
For binned data over 90 % of available area
Specification Actual
1. Dropped Calls 2% or less
Following requirements are added:
1. Map of Cluster with cell site locations, drive routes, and problem areas
2. Color FER plot overlaid on control routes
4. Burst Error Rate Histograms for control routes
5. Dropped call plots
6. Call completion statistics
7. Ec/lo Plots
8. Mobile transmit power plots
9. Mobile receive power plots
10. Soft Handoff Histograms
11. TADD1 TDROP1TTDROP and TCOMP values per sector
Provided by the Candidate's Optimization Manager_____________________
NAME DATE
Received by Sprint Spectrum's PCS RF Manager:_________________________
NAME DATE
Approved with Exceptions? (Yes/No): ________________
(If "Yes", exceptions listed on page 2)
<PAGE>
Appendix A
Cluster Optimization Acceptance Form
Cells Optimized in Cluster:
Cell ID Morphology
============================ ==========================
---------------------------- --------------------------
---------------------------- --------------------------
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---------------------------- --------------------------
Exceptions to Cluster Optimization Requirements:
- - ---------------------- ------------------------------- -----------------------
Exceptions Corrective Actions Date Corrected
- - ---------------------- ------------------------------- -----------------------
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Additional Comments: ______________________________________________________
- - ------------------------------------------------------------------------------
===============================================================================
- - ------------------------------------------------------------------------------
<PAGE>
Appendix B
Final System Optimization Completion Form
Page 1of 3
MTA Name:______________________________
(List of Cell IDs included in the Final System Optimization Completion in this
attachment)
Date Started: Date Complete:
Performance Summary:
For binned data over 90% of available area
- - -------------------- --------------------------------- -----------------------
Specification Actual
- - -------------------- --------------------------------- -----------------------
- - -------------------- --------------------------------- -----------------------
1. Forward Link FER 2% or less average
- - -------------------- --------------------------------- -----------------------
- - -------------------- --------------------------------- -----------------------
2. Reverse Link FER 2% or less average
- - -------------------- --------------------------------- -----------------------
- - -------------------- --------------------------------- -----------------------
3. % Call Origination 90% or better for originating
and terminating calls
- - -------------------- --------------------------------- -----------------------
For binned data over 90% of available area
- - -------------------- --------------------------------- -----------------------
Specification Actual
- - -------------------- --------------------------------- -----------------------
- - -------------------- --------------------------------- -----------------------
1. Dropped Calls 2% or less average
-
- - -------------------- --------------------------------- -----------------------
- - -------------------- --------------------------------- -----------------------
- - -------------------- --------------------------------- -----------------------
Following requirements must be attached:
1. Map(s) of System with cell site locations, drive routes, and problem
areas
2. Color Forward and Reverse FIER plot overlaid on routes
3. Dropped call plots
4. Call completion statistics
5. Ec/lo Plots
6. Mobile transmit power plots
7. Mobile receive power plots
8. Documentation of changes made since Cluster Optimization
<PAGE>
Appendix B
Optimization Signatures:
Candidate's Manager____________________________________________________________
NAME DATE
Sprint Spectrum's RIF Manager:________________________________________________
NAME DATE
Sprint Spectrum Director_______________________________________________________
NAME DATE
Sprint Spectrum Regional VP____________________________________________________
NAME DATE
Approved with Exceptions? (Yes/No): _______________________
(If "Yes", exceptions listed below)
Exceptions to System Optimization Completion Requirements:
- - ------------------ ------------------------------- ---------------------------
Exceptions Corrective Actions Date Corrected
- - ------------------ ------------------------------- ---------------------------
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<PAGE>
Appendix B
Page 3 of 3
Cells Approved at System Optimization Completion:
- - --------------------------------------- --------------------------------------
CELL ID CELL ID
- - --------------------------------------- --------------------------------------
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<PAGE>
<TABLE>
Feature or Function CDMA CDMA Dependency
Rel Avail
<S> <C> <C> <C>
CDMA IS95 Signaling Message Encryption - Signal Message Encryption as specified in 7.1 12-31-98 terminals
IS95A. Encryption protects information set to an IS95A mobile for display. SME standards
protects against channel hijacking.
7.0 9-30-98 terminals
CDMA SMS Point to Point over Digital Traffic Channel - This service allows a standards
subscriber standards to receive and display short messages at their mobile
stations when the subscriber is on a call.
7.0 9-30-98 terminals
CDMA Voice/Traffic Privacy - This feature encrypts the end-user data (voice standards
signal standards carried on the digital traffic channel for IS95A mobile.
7.0 9-30-98 terminals
CDMA OTASP Standardized IS-41 Interfaces - Compliance with standards. Update standards
IS-41 standards messaging used for OTA for standards compliance.
7.0 9-30-98 terminals
Six Way Soft Handoff - Expands the number of allowable soft handoff legs to standards
allow the standards mobile to more rapidly respond to changing RF environments
and ultimately reduce dropped call rates.
8.0 3-31-99 terminals
CDMA User Zone Platform (formerly Phase 1) - Allows service providers to define standards
the standards private network by network ID. User Zone ID shall be used to group
desired features together and assign them to the subscribed end users.
8.1 6-30-99 terminals
CDMA Packet Switch Data (terminal dependency) - This feature provides a standards
subscriber the standards ability to transmit burst of data over a packet data
network.
8.0 3-31-99 terminals
OTA A-Key Exchange (terminal dependency) - This feature allows an authentication standards
(A-Key) standards to be generated over the air using the Diffie-Hellman
cryptographic exchange method without transmitting the A-key itself OTA.
8.1 6-30-99 terminals
User Zone Enhanced Parameters (formerly Phase II) - This feature allows service standards
standards providers to define a private network by Network ID (NID) as defined
in the IS95/J_STD_008 CDMA standard.
8.0 3-31-99
CDMA Packet Pipe 16 - This feature increases the packet pipe size from 8 DS0s to
16 DS0s.
8.0 3-31-99
CDMA Packet Pipe Engineering Optimization - This feature optimizes the overall
utilization of packet pipes in a mixed vocoder service MSC.
8.0 3-31-99 terminals
CDMA SMS Mobile Originated/Ack. Over Traffic Channel - This feature allows a standards
subscriber standards to create a short message and send it via the MSC for
delivery to the Message Center (MC), even when the subscriber is on a call.
8.0 3-31-99 terminals
CDMA SMS Mobile Originiated/Ack. Over Access Channel - This feature allows a standards
CDMA mobile standards with Mobile-Originated STM capability to send STMs over
the CDMA access channel to a cell site which forwards the message to a message
center via the MSC.
8.0 3-31-99
Undeclared Neighbor List - This feature supports the storage of neighbor
candidates that are reported by a mobile which are not contained in a cell
site's candidate (neighbor) list.
8.1 6-30-99 terminals
CDMA OTASP Re-Auth Voice Privacy and SME (mobile dependency) - This feature standards
allows standards mobiles with a new A_Key to use OTASP A-Key exchange capability
to run SME and/or VP on the CDMA traffic channel.
NOTE:
Feature list, feature description and availability dates for CDMA Release
7.0, CDMA Release 8.0, CDMA 9.0, WIN 2.2, 3.0 are for planning purposes
only and do not represent a Lucent commitment.
</TABLE>
<PAGE>
WIN FEATURES
EXHIBIT C1
WIN 1.1 Delivered SMS 1395.12 Support for 1000 HLR TPH
SMS 1738 SMS Data Retrofit (HPUX 9/Sybase 10 to HPUX 10/Sybase 11)
SMS 1469 SMS AC Sub. Migration
SMS sms526 SMS Service GUI for AC
SMS 1727 SMS Provisioning Utility for Update AC Subscriber
SPA W2548 AC Integrated with SHLR
SPA W3120 Authentication Center Updates
SCP 1244.02 CORC Update
SMS 1586 HPUX10 Migration (release 9 to 10)
SCP 1370 Nortel Immediate Court Order Surveillance
SPA 1381 Msg. Support for NT Authentication Center
SPA W2696 Nortel Authentication on SHLR
SPA W2552 Nortel Extensions for ICOS on the SHLR
SPA W2724 Nortel Extensions for Call Forwarding Billing
SMS 1395.14 Support for 64 Users (Sprint PCS)
SMS sms531 Migrate JAM GUI into PC GUI
SMS 1747 PC Gui Partial Update Screen
SMS 1581 Print SMS Table View from PC GUI
SCP 1255.01 SLL Compiler Support for CAVE Algorithm
SCP 1255.02 IS41 Rev C for Authentication Center
SCP 1311 Support of 512 MB on R7 P6 Processor
SPA W3034 SMS-C Temination Addressing on SHLR
SMS sms538 SMS Display of HLR Data
SMS 1577.00 TNM Interfaces and alarms
SCP 1400.00 SCP/SHLR Impacts for Short Message Service Center
WIN 1.2 Delivered
SMS 1582 Increase SMS SW NE Limit
SCP 1327 OTAF/Actiview TCP/IP Interface
SCP 1197 TCP/IP SCP Support
SMS 1737 SMS Support for Std OTAF
SPA W2697 Standardized OTAF
SPA W2704 WSCP OTAF
WIN 1.3 May 15, 1998
SMS sms534 SMS Actiview Query
SMS sms525 SMS Actiview Interface for AC
SMS sms590 SPA Cross Validation
SMS 1751 SMS Support for 1500 New Subscriber Inserts/Hour Thru SGS
WIN 2.0 May 15, 1998
SMS 1748 SMS Copy Record
SMS 1800 Change MIN (Mobile Identification Number) Index
SCP 1428 CDMA and TDMA Circuit Mode Data Services
SMS 1428.01 SMS Supt. for Data Services
SPA W2841 CS Data/G3 Fax on SHLR
SCP 1131.82 R8 Upgrade/Retrofit for Sprint PCS
SCP 1244.04 RTDB Retrofit
SMS 1395.16 SMS RTDB Retrofit
SMS 1400.01 Support for SHLR SMSC Update
SPA W3117 SMS-C Termination Addressing on SHLR
SPA W3117 SMS-C Origination Restriction on SHLR
SCE 1397 RTDB Migration Map
SMS 1366.09 SMS Support for 20 Network Elements
SCP 1244.06 Wireless SCP Inter-SPA Communication
WIN 2.1 August 1998
SMS 1752 New Subscribers Insertions 2500 TPH
SCP 1771 SPVM/SPAFU Support for Update Processing
SCP 1673.01 Reverse Migration Map File (SCP)
SMS 1659 SPVM Improvements
SMS 1771.01 SPVM/SPAFU Support for Update Processing
One Time Feature Indicator
Support of SSD Update and Unique Challenge on Control Channel
A.C. Provisioning Report
WIN 2.2 Feb 1, 1999
SMS 1472 SMS Capacity Support for 5 Million Subscribers
SCP 2349 SCP Support: Packet Mode Data
SMS 2350 SMS Support: Packet Mode Data
SPA 2348 SHLR Support: Packet Mode Data
SCP 2076 SCP Support: IS683A Compliance (OTAF enhancements)
SMS 2077 SMS Support: IS683A Compliance (OTAF enhancements)
SPA IS683A rev 17 Compliance, 5K, Std PRL, Program Lock
SCP 1374 WSCP - CDMA OTASP SSD UPDATE & A-KEY EXCHANGE PROCEDURES
SCP W2862 A-key Exchange/SSD Update
SPA W3037 Standardized A-key Exchange/SSD Update
SPA W2706 WSCP OTAF A-key
SMS 1750 CORC Updates Improvement (Improved Performance)
SCP 1244.03 RTDB Data Audit from SMS
SMS sms148 RTDB Audits
SCP 1573 TCP/IP Interface between SCP and SMS (SCP)
SMS 1573.01 TCP/IP Interface between SCP and SMS (SMS)
SMS 1745 Monitoring TCP/IP Link to SCP
SCP 2080 SCP support for User Zone (CDMA Phase 2 equivalent)
SMS 2079 SMS support for User Zone (CDMA Phase 2 equivalent)
SPA 2078 SHLR support for User Zone (CDMA Phase 2 equivalent)
SCP OTAF support for Bilingual Mobile Handset
WIN 3.0 July 1, 1999
See Note
SMS 1759 SMS Support of Share Secret Data via Sendtext
SMS 2291 SMS Support of Unique Challenge via Sendtext
SCP SMS Database Query
SMS 2474 SMS support for Encrypted A-Key
SCP 2475 SCP support for Decryption of A-Key
SMS 2276 TCMON or Trap and Trace
SPA 1767 Flexible Alerting (SPA)
SMS 1767.01 Flexible Alerting (SMS)
SCP 2085 Flexible Alerting (SCP)
SCP 1376 TCP/IP Interface between SCP Mates
SMS SMS support for 7M subscribers
SCP WLNP support on SCP/HLR
SMS WLNP support on SMS
Note: Owner will provide the candidate features list for WIN 3.0 to the Vendor
before 7/15/98 and Vendor will confirm features prior to 8/1/98.
<PAGE>
ACTIVIEW FEATURES
EXHIBIT C1
Release 4.0 April 1998
Providing a new Preferred |Roaming List (PRL) Selection UMT to enable
ACTIVIEW to select the proper roaming list.
Provisioning and Support of Dual Mode Handsets (PCS & Cellular).
Provisoning and Support of Short Message Service via the New ACTIVIEW to
AirMedia Interface.
ACTIVIEW Cellualr MIN Window and Database to enable the Customer Advocate
to enter a Cellualr MIN.
Improvement to the Paging Interface to recognize Local or National pager
for slightly different provisioning.
Release 5.0 August 14, 1998
Service Guard (Hot Backup of the ACTIVIEW product)
SMSC (Support for Short Message Service Center - Messaging Gateway to SirMedia).
Circuit Swtiched Data Provisioning support.
Automated PRL (Preferred Roaming List) download using OTAF.
Support for Manual A-Key provisioning.
Support for SSD (Shared Secret Data) update.
Programming Control functions (ability to turn certain features ON and Off.
Support for Rev. A handsets via OTA (Affects WIN).
A-Key exchange via OTAF (Affects WIN).
SMSC provisioning on the HLR (Affects SMS).
Release 6.0 May 15, 1999
SMS support of Packet Data
SMS support of OTAF enhancements (Large PRL)
Support of IS 683A Standards
Standardized A-Key Exchange and SSD Update
WSCP OTAF A-Key
SMS support for User Zone
GUI Enhancements to Actiview
Release 7.0 Oct 15, 1999
SMS Database Query
Voice Privacy
Re-Authentication
WNP
<PAGE>
ADDS FEATURES
EXHIBIT C1
Release 2.0 April 1998
Data Gateway
Graphic Analysis Tools
Network Reporting
Order Activity
Change Order Process Enhancement
Hyper-Text On-Line Help
On-Line MS Word Data Generation
Release 3.0 January 1, 1999
Full feature functionality for all releases from v.1.6.2-v.3.0 as currently
defined
Intranet functionality for order mediation and Inventory Management
(Includes client Software only. Owner must purchase user License direct
from Netscape)
Upgrade to Oracle 7.3
All documentation, installation, maintenance and support equivalent with
current levels.
Release 3.1 April 1999
All Y2K fixes.
Any additional features developed specifically for v.3.1 at a date later
than this agreement.
All documentation, installation, maintenance and support equivalent with
current levels.
<PAGE>
TIM (NFM) FEATURES
EXHIBIT C1
Release 6.2 Sept. 1, 1998
Java Support
Web Based Client Interface
Q3 CMIP
Year 2000 Compliant
Release 7.0 July 1, 1999
CORBA
SNMP
Reporting Tool
Alarm Support for Motorola
<PAGE>
EXHIBIT D.BTS
LUCENT TECHNOLOGIES D.BTS
BASE STATION REQUIREMENTS
DEFINITIONS:
Carrier: A 1.25 MHz radio channel that is used in pairs, one for the
downlink (BTS to mobile) and a second on the uplink (mobile to BTS).
Effective Voice Channel: An effective voice channel is a channel element in
a sector that supports voice traffic. This is exclusive of channel elements
required for paging, synchronization, pilot, soft hand-off, softer hand-off,
soft-softer hand-off or other maintenance activities. As such, the effective
voice channel is used to calculate the traffic capacity, measured in Erlangs, of
a sector.
Hard hand-off: Hand off from carrier to carrier; either within a sector,
between different sectors, or between different cells.
Inter system hand-off: A hand-off between two MSCs or BSCs. The MSCs and / or
BSCs may be from different vendors.
Macro BTS (Minicell): A full range cell. A micro cell is smaller than macro
cell and is designed for "hot spots".
Operations and Maintenance Platform (OMP): An element level management
system that controls and monitors the switching and radio subsystems. The radio
and switching OMPs may be different.
Outdoor BTS: A self contained unit that is environmentally hardened, and has
self contained battery backup. Any type of BTS can be an outdoor BTS.
Pico BTS: Low power, low capacity cell primary for deployment in building. Can
also be used outdoor.
PCS bands: The FCC designated bands for PCS operation are as follows:
- - ------------------------ ---------------------------- ------------------------
Block Mobile Transmit (MHz) Base Transmit (MHz)
- - ------------------------ ---------------------------- ------------------------
- - ------------------------ ---------------------------- ------------------------
A 1850-1865 1930-1945
- - ------------------------ ---------------------------- ------------------------
- - ------------------------ ---------------------------- ------------------------
D 1865-1870 1945-1950
- - ------------------------ ---------------------------- ------------------------
- - ------------------------ ---------------------------- ------------------------
B 1870-1885 1950-1965
- - ------------------------ ---------------------------- ------------------------
- - ------------------------ ---------------------------- ------------------------
E 1885-1890 1965-1970
- - ------------------------ ---------------------------- ------------------------
- - ------------------------ ---------------------------- ------------------------
F 1890-1895 1970-1975
- - ------------------------ ---------------------------- ------------------------
- - ------------------------ ---------------------------- ------------------------
C 1895-1910 1975-1990
- - ------------------------ ---------------------------- ------------------------
Physical Traffic Channels: Channel elements that are used to perform processing
in a sector. These channels can be used for pilot, paging, voice and all
versions of soft hand-off. Soft hand-off: Hand-off that involves 2 or 3 cells on
the same carrier. A soft hand-off will result in no more than 2 frames lost.
Softer hand-off: Hand-off from sector to sector within a cell. This shall be
performed on the same carrier. A softer hand-off will result in no more than 2
frames lost. Soft softer hand-off: Hand-off between 2 sectors of one cell and a
sector of a different cell on the same carrier.
<PAGE>
EXHIBIT D.BTS: BTS REQUIREMENTS:
GENERAL:
Unless specifically excepted, the following requirements apply to all BTS
products, indoor and outdoor.
D.BTS.1 AIR INTERFACE REQUIREMENTS:
D.BTS.1.1 COMPLIANCE TO STANDARDS:
All BTS equipment must comply with ANSI-J-STD-008 and shall support rate set 2
and multiplex option 2 as described in ANSI-J-008. This will ensure
compatibility with 14.4 kbps and 9.6 kbps data rates.
D.BTS.1.2 HAND-OFF CAPABILITY:
The BTS shall have the capability to support the following types of hand-offs:
Soft hand-off: Hand-off that involves 2 or 3 cells on the same carrier. A soft
hand-off will result in no more than 2 frames lost. Softer: Hand off from sector
to sector within a cell. This shall be performed on the same carrier. A softer
hand-off will result in no more than 2 frames lost. Soft softer: Hand-off
between 2 sectors of one cell and a sector of a different cell. A Soft-softer
hand-off will result in no more than 2 frames lost. Hard hand-off: Hand-off from
carrier to carrier either within a sector or between different cells.
Acquisition time is less than 200ms and number of lost frames is less than 15.
Interfrequency hand-off: A hand-off between a 1.9 Ghz and a 850 Mhz system.
Acquisition time is less than 200ms.
In all cases the hand-off process must perform as described in ANSI-J-STD-008.
D.BTS.1.3 INTER BAND HARD HAND-OFF:
The BTS shall be able to support band to band hard hand-off. Such a hand-off
must support a hand-off between any combination of bands A-F of the FCC
allocated PCS spectrum. When such hand-offs are inter-vendor they shall be
supported to the extent that appropriate standards exist.
D.BTS.2 REQUIREMENTS FOR MULTI CARRIER OPERATION:
D.BTS.2.1 HARDWARE:
D.BTS.2.1.1 Growth pattern to accommodate multiple carriers:
The Owner requires that the PCS CDMA macro cellular product (both indoor and
outdoor) grow to accommodate at least 6 CDMA 1.25 carriers for each 3 sector
site. The growth from one carrier to 6 carriers can be achieved by adding
additional bays to an existing initial bay. The growth hardware must include
whatever cabling, combining, amplification, and duplexing is needed to provide
for additional carriers.
D.BTS.2.1.2 Antenna requirements:
The Owner will be deploying its PCS products with as few antennas as possible.
The CDMA BTS can support up to two (2) CDMA carriers per sector on two (2)
antennas per sector. This requires the inclusion of additional Duplexers (Full
Duplex Option). In this configuration, both antennas operate as transmit and
receive. The standard configuration includes two (2) duplex filters.
This allows both (1) antennae to operate as transmit and receive.
<PAGE>
D.BTS.2.2 TRAFFIC MANAGEMENT:
In a multi carrier operation, the radio subsystems must be able to manage
traffic across any carrier that may be present in a particular sector. Traffic
management is defined as the ability to balance traffic as follows:
1) Originate and terminate calls on or to any carrier present in a sector.
2) The ability to dynamically move a call in process from one carrier to
another carrier that is on a separate frequency.
D.BTS.2.2.1 Load balancing during origination and termination:
The system shall implement a function which will allocate originations and
terminations across the available CDMA carriers. Allocation is to be based upon
the available capacity in each sector.
D.BTS.2.2.2 Load balancing for a call in process:
For the purpose of executing hand-offs, the system shall have the ability to
move users between carriers during an active call on a dynamic basis. This will
be done when the traffic on any particular channel exceeds the designed loading
objectives and a user or users must be moved to another, less utilized
frequency.
D.BTS.2.2.3 Traffic capacity:
The traffic capacity of a sector, measured in Erlangs, is based upon the total
traffic channels available in a sector. The total channels are calculated as
follows:
N = number of effective traffic channels available on a carrier at a
particular loading (percentage of pole). This number excludes the channels
required for overhead channels and hand-offs.
C = number of carriers in a sector Total Channels = N x C
The total channels are to be used in the appropriate Erlang table to determine
the capacity of a sector. This capacity criterion shall apply to both calls in
progress or call origination or termination.
D.BTS.2.3 POOLING PHYSICAL ELEMENTS WITHIN A CARRIER:
The BTS shall be able to pool physical traffic channels across all sectors using
the same carrier frequency. As such, a voice channel on a particular carrier
frequency in any sector of a BTS can utilize any physical traffic channels
element assigned to the same carrier frequency. This capability allows for the
pooling of all the physical channels equipped within one BTS cabinet.
D.BTS.2.4 CHANNEL CARD CAPACITY:
The Vendor shall supply channel cards that are capable of supporting at least
ten (10) physical traffic channels per card.
D.BTS.3 CONTROL REQUIREMENTS:
D.BTS.3.1 ABILITY TO RETUNE FREQUENCIES REMOTELY:
The base transceiver station must have the ability to tune any channel within a
block of the PCS band (1850-1910 Mhz, 1930-1990 Mhz). The re-tuning capability
must be administered remotely via the OMP.
D.BTS.3.2 ABILITY TO PERFORM T1 OR OTHER TRANSMISSION LOOP BACK
REMOTELY:
The BTS / MSC must have the ability to perform T1 loop backs remotely
from the MSC. The Vendor and the Owner shall mutually agree to dates and
requirements for transmission interfaces to have loopback that the BTS may
support.
D.BTS.3.3 TELEMETRY AND ALARMS:
Telemetry and alarming capability are provided with the BTS software. These
capabilities include the collection of data and alarms related to the following
cell site systems: environmental (high and low
<PAGE>
temperatures), GPS receiver, power and battery, RF and other BTS hardware.
Telemetry and alarm information is to be collected and reported automatically to
the OMP via data links.
D.BTS.3.4 AUTOMATIC INVENTORY:
The BTS shall have the ability to automatically inventory equipment.
D.BTS.4 ENVIRONMENTAL REQUIREMENTS:
D.BTS.4.1 OUTDOOR CABINETS:
The BTS shall meet all environmental and physical requirements of Bellcore
TA-NWT-000487, "Generic Requirements For Electronic Equipment Cabinets, Issue
2-June 1993" and NEMA UL-50, Type 3R. The exception to TA-NWT-000487 is the
amount of battery back-up supported. UL certification is required.
D.BTS.4.2 ALTITUDE:
All BTS equipment specifications outlined in this exhibit shall be maintained
for altitude ranges from 0 to 10,000 ft.
D.BTS.4.3 TEMPERATURE RANGE AND HUMIDITY:
* Denotes ambient temperature of room (indoor) or outside of cabinet
(outdoor D.BTS4.3.1 Standard Outdoor unit:
Temperature: -40(degree) to +46(degree)C*
Humidity: 0% to + 100% RH
D.BTS4.3.2 Optional High Temperature Outdoor Unit:
Temperature: -40(degree) to +52(degree)C*
Humidity: 0% to + 100% RH
D.BTS4.3.3 Indoor unit:
Temperature: 0(degree) to +50(degree)C*
Humidity: +20% to +55% RH
D.BTS.4.4 ENVIRONMENTAL CONTROL MECHANISM:
The CDMA BTS utilizes a combination of convection cooling, forced air and heat
exchangers to meet the minimum requirements. Additional heat exchangers and
modifications to the forced air system may be used in some optional high
temperature outdoor unit.
D.BTS.4.5 SEISMIC:
All Base Stations will be BELLCORE Zone 4 Compliant per TR-NWT-000063. This
specification applies to the Cabinet or Frame structure. Optional bracing may be
required in Zone 4 areas to provide support of the Cabinet or Frame for indoor
applications.
D.BTS.4.6 EMI:
Emission levels must meet FCC part 24, "Radiated and conducted Emissions for
Cellular Telephone Systems" and Bellcore GR-1089-CORE Section 3.
D.BTS.4.7 ELECTROMAGNETIC SUSCEPTIBILITY:
The Minicell complies to FCC part 15, class B.
D.BTS.4.8 LIGHTNING PROTECTION AND GROUNDING:
The CDMA BTS shall have lightning protection in compliance with IEEE C62.41-1992
category C, high exposure for lightning. This protection is part of the CDMA BTS
design. Commercial AC power and T1/E1 facilities are particularly susceptible to
lightning surges and shall be properly protected. An appropriate surge
protection device shall be installed at the service entry point and shall be
connected directly to the Ground Electrode System. The lightning protection and
grounding is compliant when installation is performed per Vendor guidelines.
<PAGE>
D.BTS.4.9 60 HZ INDUCTION EFFECTS:
The CDMA BTS transmission facility interface shall meet the appropriate "60 Hz
Effects" of TR-NWT-00499.
D.BTS.5 POWER REQUIREMENTS:
D.BTS.5.1 LINE VOLTAGE:
Outdoor:
208-240 Vac, 50 to 60 Hz, single phase.
Indoor:
The Indoor version of the BTS must support both DC and AC power supplies as
follows:
DC: +25V to + 28V at Minicell input.
AC: 110-220 Vac, 50 to 60 Hz, single phase (This will be input to the power
cabinet and the power cabinet will provide the required DC input to the
Minicell).
D.BTS.5.2 POWER REQUIREMENTS:
The Power equipment used to supply and distribute DC and AC power to the BTS
must meet or exceed the specifications identified in Vendor Document MTO-3D-131.
D.BTS.5.2.1 ADDITIONAL POWER INFORMATION:
Additional power specification can be found in Exhibit D.Power.
D.BTS.6 TRANSMISSION REQUIREMENTS:
D.BTS.6.1 INTERFACES:
The BTS must be able to support a standard T1 (ANSI T1.403) interface. All T1
links between the BTS and Transcoder at the MSC are to support multiplexed
packetized voice channels on a set of DSOs referred to as the packet pipe. The
concentration of the CDMA packetized voice traffic to the conventional 64PCM
voice channel will vary with the bit rate of the voice encoding (Vocoders)
scheme.
<TABLE>
- - ---------------------- -------------------- --------------------- --------------------- --------------------
<S> <C> <C> <C> <C>
Packet Pipe # 8 kbit Chan. w/ #8 kbit Chls. w/ 13kbit Chls. w/ 13 kbit Chls. w/
Size 64K DSOs 56K DSOs 64K DSOs 56K DSOs
- - ---------------------- -------------------- --------------------- --------------------- --------------------
- - ---------------------- -------------------- --------------------- --------------------- --------------------
2 6 5 4 3
- - ---------------------- -------------------- --------------------- --------------------- --------------------
- - ---------------------- -------------------- --------------------- --------------------- --------------------
3 10 9 7 6
- - ---------------------- -------------------- --------------------- --------------------- --------------------
- - ---------------------- -------------------- --------------------- --------------------- --------------------
4 14 12 10 8
- - ---------------------- -------------------- --------------------- --------------------- --------------------
- - ---------------------- -------------------- --------------------- --------------------- --------------------
5 18 16 12 11
- - ---------------------- -------------------- --------------------- --------------------- --------------------
- - ---------------------- -------------------- --------------------- --------------------- --------------------
6 22 19 15 13
- - ---------------------- -------------------- --------------------- --------------------- --------------------
- - ---------------------- -------------------- --------------------- --------------------- --------------------
7 26 22 18 15
- - ---------------------- -------------------- --------------------- --------------------- --------------------
- - ---------------------- -------------------- --------------------- --------------------- --------------------
8 30 26 21 19
- - ---------------------- -------------------- --------------------- --------------------- --------------------
</TABLE>
D.BTS.6.1.1 T1 transmission interface:
The transmission interface is T1 and must have integrated CSU functionality.
There shall also be an option to terminate a second T1 span for facility
redundancy. The T1 interface must be compatible with B8ZS line coding. All T1
alarm and performance information shall be collected by the OMP.
D.BTS.6.1.2 Add / drop capability for T1 interface:
The BTS configured with a T1 interface must have the option to perform add /
drop multiplexing thereby permitting a chaining of BTSs onto a single link T1.
The Switching and or Base Station Controller must be able to support multiple
BTSs on a single link.
<PAGE>
D.BTS.7 OTHER BTS REQUIREMENTS:
D.BTS.7.1 SYNCHRONIZATION:
The Global Positioning System shall have an internal clock (oscillator) as a
back-up timing source. In the case of failure of the GPS receiver, an internal
clock shall provide timing for at least 24 hours such that all CDMA
Pseudo-random numbers can be synchronized within + / - 10 micro seconds of each
other during this period. Vendor's clock should meet ANSI standard ANSI-
J-Std-019 (Recommended Minimum Performance Requirements for Base Stations
Supporting 1.8 to 2.0 Ghz Code Division Multiple Access (CDMA) Personal Stations
Section #4.3.1).
D.BTS.7.2 CONNECTORS:
All connections (e.g., transmission, antenna, power, and other cabling) to the
BTS shall be connectorized with standard, commercially available and industry
accepted connectors.
D.BTS.7.3 CELL SITE MONITORING CAPABILITIES:
The Vendor is to provide, as an option, the ability to perform remote call
processing diagnostics via CRTU (CDMA Radio Test Unit).
D.BTS.7.4 SOFTWARE DOWNLOAD ABILITY:
All software for the base station shall be downloaded from the MSC. The software
download shall be broadcast to multiple BTSs simultaneously. A software download
shall not remove the BTS from service for a period in excess of 15 minutes.
Remote rebooting of each BTS may be included. The Vendor shall use its best
efforts to reduce the amount of downtime required.
D.BTS.7.5 RECEIVER SENSITIVITY:
Base Station receiver sensitivity shall be measured at the Base Station site
equipment level. Antenna, connector or cable losses are not included as part of
this measurement. Mast mount or external Low Noise Amplifier (LNA) equipment
shall not be included as part of, or included with, this measurement. Lightning
suppression devices which contribute loss to these systems will be included if
this suppression device is located at or with the Base Station site equipment.
Mast mount or coax line feed installed suppression devices will be included in
the antenna / coax feed loss budget.
Sensitivity measurements shall include any internal cell sites equipment
internal (e.g., LNA, frequency selective components such as band pass or band
reject filters, and receiver path signal).
D.BTS.7.5.1 Multicarrier Receiver Performance:
The requirements for receiver sensitivity and demodulation must be the same for
a single carrier per sector as well as for multiple carriers per sector sharing
the same antenna per D.BTS.2.1.2. This will ensure that the reverse link budget
in the multicarrier case is the same as in the single carrier case. The tests
outlined below will be performed for both single and multiple carriers per
sector. The performance metrics given in D.BTS.7.5.2 and D.BTS.7.5.3 must be the
same in the single carrier case as in the multi-carrier case.
D.BTS.7.5.2 Receiver Sensitivity:
Receiver sensitivity shall be compliant with PN3383, (Draft American National
Standard or Telecommunications - Recommended Minimum Performance Requirement for
Base Stations Supporting 1.8 to 2.0 GHz Code Division Multiple Access (CDMA)
Personal Stations) with the following clarification / exceptions.
Baud rate = 14.4 kbps
Item 2 in section 3.4.1.2 Method of Measurements should be amended to read
<PAGE>
Adjust the equipment to ensure that signal power of -119.8 dBm per RF
input port is not exceeded. Reverse Traffic Channel power control in the
personal station simulator should not be disabled (see 6.4.3 of PN3383).
For a 7dB Eb / No, the guaranteed base station receiver sensitivity is -119.8
dBm. The minimum requirement is -119.8 dBm.
D.BTS.7.5.3 Demodulation Requirements; Base Station Receive Performance in
Multipath Fading with Closed Loop Power Control: Base station receive
performance in multipath fading with closed loop power control shall be
compliant with PN3383, (American National Standards for Telecommunications -
Recommended Minimum Performance Requirement for Base Stations Supporting 1.8 to
2.0 GHz Code Division Multiple Access (CDMA) Personal Stations) with the
following clarification / exceptions:
Use Rate Set 2
Follow the procedures outlined in Section 3.3 of PN3383. Use modified
versions of Table 3.3.1 and 3.3.2 supplied below. Perform the tests
outlined in section 3.3.3 of PN3383.
<PAGE>
Created on: 4-15-98
Printed 08/08/98
Table 3.3.1 Parameters for Rate Set 1 Demodulation Tests
-----------------------------
Eb / No Limits (dB)
-----------------------------
- - ---------------- -------------- ----------------- -------------- -------------
Case Test Channel Lower Upper
Simulator
Configuration
Number
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
1 3.3.1 None 4.05 4.65
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
2(a) 3.3.2 1 10.35 10.95
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
2(b) 3.3.2 2 9.0 9.6
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
2(c) 3.3.2 3 8.0 8.6
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
2(d) 3.3.2 3 8.4 9.0
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
3(a) 3.3.3 1 6.3 6.9
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
3(b) 3.3.3 2 7.6 8.2
- - ---------------- -------------- ----------------- -------------- -------------
Table 3.3.2 Parameters for Rate Set 2 Demodulation Tests
-----------------------------
Eb / No Limits (dB)
-----------------------------
- - ---------------- -------------- ----------------- -------------- -------------
Case Test Channel Lower Upper
Simulator
Configuration
Number
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
1 3.3.1 None 3.2 3.8
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
2(a) 3.3.2 1 9.9 10.5
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- ----------------------------
2(b) 3.3.2 2 Not required
- - ---------------- -------------- ----------------- ----------------------------
- - ---------------- -------------- ----------------- -------------- -------------
2(c) 3.3.2 3 7.7 8.3
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
2(d) 3.3.2 3 8.1 8.7
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
3(a) 3.3.3 1 5.8 6.4
- - ---------------- -------------- ----------------- -------------- -------------
- - ---------------- -------------- ----------------- -------------- -------------
3(b) 3.3.3 2 8.3 8.9
- - ---------------- -------------- ----------------- -------------- -------------
<PAGE>
D.BTS.8 RELIABILITY:
D.BTS.8.1 REDUNDANCY:
Channel cards: N + 1
Power supply: N + 1
Synchronization: GPS receiver must have a highly stable local oscillator per
"D.BTS.7.1: Synchronization".
D.BTS.8.2 OVERALL RELIABILITY:
The MTBF for a failure that reduces the traffic capacity or the ability to
initiate or terminate calls shall be equal to or greater than 4.27 years (as
calculated per Schedule 2) for a 3-sectored BTS. A traffic reducing failure is
defined as a failure that removes one or more effective voice channel (Erlang
bearing voice channel) from one or more sectors.
Component level reliability is given in Schedule 2.
<PAGE>
LUCENT TECHNOLOGIES SCHEDULE 1 - D.BTS
Base Station Compliance and Roll Out Schedule
A 4 means that the Vendor currently meets the requirement.
General Availability
BTS Section Description -
1.0 AIR INTERFACE REQUIREMENTS : 4
1.1 Compliance of STDs 4
1.2 HAND-OFF CAPABILITY: 4
1.3 INTER BAND HAND-OFF: 4
2.0 MULTI-CARRIER: -
2.1 HARDWARE: -
2.1.1 Multi-Carriers -
3 Carriers/Sector 4
4-6 Carriers/Sector 4
2.1.2 Antenna Requirements: 2carriers per sector
on 2 antennas 4
2.2 TRAFFIC MANAGEMENT: -
2.2.1 Load Balancing on call setups 4
2.2.2 Load Balance during handoffs 4
2.2.3 Traffic Capacity 4
2.3 Pooling of traffic channels 4
2.2.4 Expanded Channel Element Card
(10 Channel CCU) 4
3.0 CONTROL REQUIREMENTS: -
3.1 Retune Frequency Remotely 4
3.2 T1 Remote Loopback 4
3.3 Telemetry Alarms 4
3.4 Automatic Inventory 4
4.0 ENVIRONMENTAL REQUIREMENTS: -
4.1 Outdoor Cabinets 4
4.2 Altitudes 4
4.3 Temperature & Humidity 4
4.4 Environmental Control Mechanism 4
4.5 Seismic 4
4.6 EMI 4
4.7 Electromagnetic 4
4.8 Lighting Protection 4
4.9 60 Hz Induction Effects 4
5.0 POWER REQUIREMENTS -
5.1 Line Voltage 4
5.2 Power Requirements 4
5.3 Power Supply Redundancy 4
6.0 TRANSMISSION: -
6.1 Interfaces 4
6.1.1 T1 Transmission Interface 4
6.1.2 Integrated Add / Drop 3Q98
7.0 OTHER BTS REQUIREMENTS: -
7.1 Synchronization 4
7.2 Rear Access 4
7.3 Cell Site Monitoring 4
7.4 Software Download 4
7.5 Receiver Sensitivity 4
8.0 RELIABILITY: -
8.1 Redundancy 4
8.2 Overall and Component Reliability 4 as per
the attachment
<PAGE>
LUCENT TECHNOLOGIES SCHEDULE 2 - D.BTS
BTS Reliability
CDMA PCS (1.8 GHz) Minicell
Component Mean-Time-Between-Failure
<TABLE>
Mean-Time
Between Failure
Component Name Component Code (Hours)
<S> <C> <C>
Radio Control Complex TN167 586,132
- - ---------------------
Core Processor Unit (CPU) TN168 1,870,557
Network Control Interface (NCI) TN169 389,499
Memory (MEM) UN166 1,152,206
Alarm / FITS Interface (AFI) UN524 874,967
Central Processing Unit (CPI) 415AC 397,852
Power Converter Unit (PCU)
CDMA Radio Shelf
CDMA Channel Unit (CCU) TN1701 777,001
Bus Interface Unit (BIU) TN1702 387,837
Synchronize Clock & Tone (SCT) TN1703 736,703
CDMA Cluster Controller (CCC) TN1852 979,624
Analog Conversion Unit (ACU) TN1853 726,111
Digital Facility Interface (DFI) TN3500 1,122,334
Baseband Combiner & Radio (BCR) 44WR1 325,140
Power Converter Unit (PCU) 415AE 397,852
CDMA Transmit Unit Shelf
20W Transmit Power Amplifier (TPA) 44WA6 191,791
TPA Power Supply (TPA-PS) 418,936
Alarm Control Board (ACB) BLB1 NA
Tx Amplifier QCPA-1900
Tx UP Board Assembly BLB2 1,847,746
Reference Freq. & Time Generator
Reference Frequency & Timing Generator KS24019
Customer Service Unit (CSU) Shelf
Customer Service Unit (CSU) 333,367
Shelf Interface Unit (SIU) 1,617,599
</TABLE>
<PAGE>
CDMA Radio Test Unit (CRTU)
CDMA Radio Test Unit (CTRU)
Radio Switch Panel (RSP)
The estimates for Mean-Time-Between-Failure (MTBF) for the major CDMA PCS
components shown are based on typical environmental conditions for the CDMA
growth frame which have been derated by 10% for the outdoor cabinet
configurations.
All of the Radio Control Complex (RCC) components are duplicated for redundancy.
Failure of any of the RCC components will not result in a loss of service.
In the CDMA Radio Shelf, loss of CDMA Channel Unit (CCU) will result in a loss
of capacity, but the system will be able to provide service on the remaining
CCU's. The system will be able to reconfigure CCU's assigned to pilot, sync,
page, and access channels as necessary to maintain service. The Synchronize
Clock and Tone (SCT) is duplicated for redundancy; failure will not result in a
loss of service. The system can reconfigure in the event of a loss of CDMA
Cluster Controller (CCC), such that failure of a CCC will result in a loss of
capacity but the system will still provide service to each sector. Failure of
the Bus Interface Unit (BIU), Analog Conversion Unit (ACU), Baseband Combiner
Radio (BCR), or Power Converter Unit (PCU) will result in a loss of service to
one sector.
Failure of any of the CDMA Transmit Unit Shelf components with the exception of
the Alarm Control Board (SCB) will result in a loss of service to one sector.
The Alarm Control Board (SCB) is not service affecting.
In the event of a single failure in the Reference Frequency and Test Generator
(RFTG), redundancy within the RFTG shall maintain synchronization with all other
CDMA cell sites for 24 hours. In the event of a double failure within the RFTG,
synchronization shall be maintained for a minimum of 4 hours.
The Shelf Interface Unit (SIU), CDMA Radio Test Unit (CRTU), and Radio Switch
Panel (RSP) are not service affecting.
Reliability information on the Transmit and Receive Filters are not available at
this time and are not included in the system MTFB discussed below. Generally,
for system with receive diversity, failures in the receive path are not
considered service affecting.
Failure of the entire system (loss of all traffic channels) will result from the
failure of the Digital Facility Interface (DFI) or Channel Service Unit (CSU).
The Mean-Time-Between-Failures (MTFB) of these two units is 257,000 hours.
<PAGE>
The loss of one or more traffic channels in a sector due to the loss of an
amplifier or other common electronics will result from the failure of the Bus
Interface Unit (BIU), Analog Conversion Unit (ACU), Baseband Combiner Radio
(BCR), or Power Converter Unit (PCU) in the CDMA Radio Shelf; or from a failure
of the Transmit Power Amplifier (TPA), TPA Power Supply (TPA-PS), Tx Amplifier
(Tx AMP), or the Tx UP Board in the CDMA Transmit Unit Shelf. The
Mean-Time-Between-Failure (MTBF) associated with these units is 40,860 hours.
<PAGE>
EXHIBIT D.MSC
LUCENT TECHNOLOGIES D.MSC
D.MSC.1 FEATURES AND FUNCTIONALITIES:
The MSC shall include the functions assigned to the Visitor Location Register
(VLR) in IS-41 Rev. C. In the remainder of this Exhibit D.MSC, MSC shall be used
to indicate MSC/VLR wherever VLR functions are described. The MSC shall include
the PCS Access Manager and the PCS switch of the AUTOPLEX(R)-1000 System.
If the Owner requests, for the purpose of interfacing the Vendor's MSC with
non-Vendor network elements, the Vendor will provide and permit the use of any
Vendor-defined interface protocols (including the Vendor's FTN/EFTN protocol) as
necessary for the sole purpose of supporting the Owners features and
functionalities in the Owners network.
The Vendor will make available to the Owner complete documentation of MSC
capabilities and interfaces pertaining to any Vendor - defined interface
protocols which may be necessary for the Owner to plan new features and
functionalities using these capabilities.
D.MSC.1.1
In accordance with Exhibit C, the MSC shall support registration, call
origination, call delivery and hard hand-off for CDMA mobile stations in
conformance with IS-41 Rev. C.
D.MSC.1.2
The MSC shall support inter-operation with non-Owner networks supporting IS-41
Rev. B plus TSB 41 plus TSB 55 for roaming.
D.MSC.1.3
In accordance with Exhibit C, the MSC shall support hard and soft hand-off
functions.
D.MSC.1.4
The MSC shall support the features and functions identified in Exhibit C and
shall conform to IS-41 Rev. C. as it applies to these features and functions.
D.MSC.1.5
The MSC shall be capable of inter-operating with a separate Home Location
Register (HLR) for home users accessed over an SS7 network following the
procedures of IS-41 Rev. C as necessary to support the Owners features and
functionalities documented in Exhibit C. The separate HLR may be a product of
another vendor.
<PAGE>
D.MSC.1.6
The MSC shall provide the ability to establish originating, dialed digits, and
terminating triggers for individual subscribers in response to IS-41 Rev. C
messages and to generate IS-41 Rev. C messages when established trigger criteria
are encountered.
D.MSC.1.7
The MSC shall provide the ability to establish terminating and dialed digits
triggers for an entire MSC and to generate IS-41 Rev. C messages when
established trigger criteria are encountered.
D.MSC.1.8
The Vendor shall perform reasonable and necessary IS-41 inter-operability
testing with other vendors and will work with other vendors in good faith to
achieve IS-41 inter-operability as required to support the Owners features and
functionalities documented in Exhibit C.
D.MSC.1.9
The MSC shall support a remote switching capability by providing centralized
operations, administration, and maintenance for remote switches.
D.MSC.1.10
The MSC shall be capable of routing calls to announcements. The determination of
what calls or events result in an announcement must be settable through
translation. The content of the announcements must be able to be recorded by the
Owner. A minimum of 30 different announcements must be available.
D.MSC.2 SIGNALING:
D.MSC.2.1
Subject to the exceptions specified in the Vendor's compliance and exceptions
documentation (evaluation date 1/31/95) previously provided by the Vendor to the
Owner to the following reference, the MSC shall meet the requirements of
GR-317-CORE, Switching System Generic Requirements for Call Control Using the
Integrated Services Digital Network User Part (ISDNUP) Issue 1, 2/94, Revision 1
(9/94) for interoffice trunk signaling between MSCs.
D.MSC.2.2
Subject to the exceptions specified in the Vendor's compliance and exceptions
documentation (completed 11/8/93) previously provided by the Vendor to the Owner
to the following reference, the MSC shall meet the requirements of
TR-NWT-000606, Issue 2, October 1992 LSSGR: Common Channel Signaling Section
6.5, for connection to the SS7 network via STP's.
D.MSC.2.3
Subject to the exceptions specified in the Vendor's compliance and exceptions
documentation (dated 10/2/89) previously provided by the Vendor to the Owner to
the following reference, the
<PAGE>
MSC shall support all interface types (except the SS7 option for Type 2C) in
TR-NPL-000145, Compatibility Information for Interconnection of a Wireless
Services Provider and a Local Exchange Carrier Network, Issue 2, 12/93.
D.MSC.2.4
Subject to the exceptions specified in the Vendor's compliance and exceptions
documentation (completed June 1992) previously provided by the Vendor to the
Owner to the following reference, the MSC shall meet the requirements of equal
access MF signaling for both direct and tandem interconnection to interexchange
carriers as defined in GR-690-CORE LSSGR: Exchange Access Interconnection FSD
20-24-0000 (a module of LSSGR, FR-64), Issue 1, 12/94.
D.MSC.2.5
Subject to the exceptions specified in the Vendor's compliance and exceptions
documentation (evaluation date 1/31/95) previously provided by the Vendor to the
Owner to the following reference, the MSC shall meet the requirements of equal
access SS7 signaling for both direct and tandem interconnection to interexchange
carriers as defined in GR-394-CORE Switching System Generic Requirements for
Interexchange Carrier Interconnection Using the Integrated Services Digital
Network User Part (ISDNUP) Issue 1, 2/94, Revision 1 (9/94).
D.MSC.3 TRANSMISSION:
Subject to the exceptions specified in the Vendor's compliance and exceptions
documentation (analysis completed 4/91) previously provided by the Vendor to the
Owner to the following reference, the MSC shall meet the requirements of
TR-NWT-000507, LSSGR: Transmission, Section 7 (a module of LSSGR, FR-64) Issue
4.
D.MSC.4 ADMINISTRATION AND MAINTENANCE:
D.MSC.4.1
The MSC shall provide measurements and commands to support the following
administration and maintenance functions:
traffic measurements, billing measurements, service measurements,
service evaluation, data base management, generic program alteration, and
security of memory administration, trouble detection, service recovery, trouble
notification, trouble verification, trouble isolation and repair.
D.MSC.4.2
The Vendor shall comply with the latest version of the following
Vendor-published detailed documentation for each measurement, report, and
command:
(a) Lucent Technologies 401-610-133, Issue 9.0, January 1997, "Autoplex
Cellular Telecommunications System 1000 AMA Formats Description."
(b) Lucent Technologies 401-610-000 AUTOPLEX System 1000 Documentation Catalog.
<PAGE>
D.MSC.4.3
MSC Software modifications (whether considered to be Software Upgrades or
Software Enhancements) that can be incorporated into the then-current releases
will not require more than fifteen (15) minutes of downtime, and in addition,
the Vendor will use its best efforts to reduce the amount of downtime required.
D.MSC.5 SYSTEM INTERFACES:
D.MSC.5.1
Subject to the exceptions to TR-TSY-000510 specified in the Vendor's compliance
and exceptions documentation's (completed 8/89) previously provided by the
Vendor to the Owner to the following references, the MSC shall support the
following interfaces:
(a) Digital Signal Level 1 (DS-1) as defined in TR-TSY-000510, LSSGR:
System Interfaces, Section 10 ( a module of LSSGR, FR-64) Issue 2,
7/87.
(b) The SONET digital switch trunk interface as described in
TR-TSY-000782, SONET Digital Switch Trunk Interface Criteria (a
module of TSGR, FR-440 and LSSGR, FR-64), Issue 2, 9/89.
(c) In accordance with Exhibit C, the MSC will support interfaces to
the voice mail systems.
D.MSC.5.2
The MSC shall support an interface to an external information services gateway
to provide voice menu / touch tone response information services and to
automatically redirect the call to the information service number requested. The
subscriber shall be able to dial a feature service code to access a voice mail
system. After selecting the desired option the call shall be transferred to the
requested service DN. The interface to the MSC shall be as identified in Lucent
Technologies 401-601-010 "Information Services Gateway Optional Feature."
D.MSC.6 SERVICE STANDARDS AND CAPACITY:
D.MSC.6.1
Subject to the exceptions specified in the Vendor's compliance and exceptions
documentation (analysis updated 9/92) previously provided by the Vendor to the
Owner to the following reference, the MSC shall meet the objectives for
reliability in TR-TSY-512, Issue 3, "Reliability." In this context, a DS-1
interface to a BTS shall conform to the 20 minutes/year objective for integrated
digital terminations.
D.MSC.6.2
The Vendor shall provide engineering rules for determining the capacity of the
MSC system. The engineering rules shall identify the parameters required in
order to determine the MSC capacity required by the Owner.
D.MSC.6.3
Based on the assumptions listed in Attachment 1, the MSC shall be configurable
with a maximum capacity not less than the following:
<PAGE>
(a) Busy Hour Call Attempts: 200,000
(b) Subtending BTS: 222
(c) Trunks: 15,000
(d) Signaling links: 64, or 32 link pairs (not including links to the
BSC/BTS)
D.MSC.7 POWER:
Subject to the exceptions specified in the Vendor's compliance and exceptions
documentation (reviewed and confirmed 9/15/92) previously provided by the Vendor
to the Owner to the following reference, the MSC shall comply with
TR-TSY-000513, Issue 2, July 1987, Revision 1, December 1988, LSSGR Section 13:
Power, for compatibility with central office power systems.
D.MSC.8 ENVIRONMENTAL:
Subject to the exceptions specified in the Vendor's compliance and exceptions
documentation (completed June 1994) previously provided by the Vendor to the
Owner to the following reference, the MSC shall comply with TR-NWT-000063,
Network Equipment - Building System (NEBS) Generic Requirements ( a module of
LSSGR, FR-64 and TSGR, FR-440), Issue 5, 9/93, regarding spatial and
environmental characteristics, including testing methods.
Subject to the exceptions specified in the Vendor's compliance and exceptions
documentation (completed 7/25/95) previously provided by the Vendor to the Owner
to the following reference, the MSC shall comply with GR-1089-CORE,
Electromagnetic Compatibility and Electrical Safety - Criteria for Network
Telecommunications Equipment (a module of LSSGR, FR-64 and TSGR, FR-440), Issue
1, 11/94.
D.MSC.9 NETWORK TRAFFIC MANAGEMENT:
D.MSC.9.1
The MSC shall implement traffic measurements and overload controls including:
(a) detection of congestion onset when settable congestion onset thresholds
are crossed;
(b) deferral of tasks according to a priority scheme when congestion onset
is detected;
(c) detection of congestion abatement when separately settable abatement
thresholds are crossed; and
(d) gradual resumption of deferred tasks when congestion abatement is
detected.
D.MSC.10
The MSC shall support subtending Vendor BTS's using a Vendor-defined interface.
See Exhibit G for IOS / IS-634.
D.MSC.10.1
The MSC shall support CDMA Soft hand-off between or among any two or three
subtending Vendor BTS's. A Soft Hand-off shall result in no more than 2 frames
lost. Refer to Exhibit C for software soft hand-off enhancements.
<PAGE>
D.MSC.10.2
The voice information shall be transcoded to 64 kb/s PCM in accordance to CCITT
G703 standards. The transcoded PCM shall support vocoder rates as specified in
Exhibit C. Vocoder bypass must be enabled when fax or data messages are
transmitted.
D.MSC.10.3
Owner and Vendor acknowledge echo is present in any digital radio technology.
Vendor can supply, as an option, echo cancellation units.
Owner is responsible for echo treatment in the system. One possible option
is the vendors echo canceler as noted above.
D.MSC.10.4
The BTS to MSC link shall support the multiplexing of multiple voice or data
channels as specified in Exhibit D.BTS.6.1.
D.MSC.10.5
The T1 from the BTS to the MSC shall support multiple BTS sites on a single
link. Thus a link that has been groomed with two or more separate BTS sites
shall be terminated directly on the MSC.
D.MSC.10.6
The link from the BTS to the MSC shall be compatible for transport over any
network, independent of the type of transmission equipment embedded in that
network as long as the constraints on the transmission delay budget are
maintained. The transmission delay budget is 7 msec. These networks shall
include local and long distance networks, and base band transport over cable
networks. Multiplexing, drop and insert, grooming and other transport effects
and functions must be transparent to the BTS to MSC link.
D.MSC.10.7
There are two other types of transmission interfaces proposed: an HDSL interface
and a cable transport system. Both of these transport mechanisms will have
dedicated Central Office Terminals that will interface with the BTS on one side
and have a T1 interface towards the MSC. The MSC to BTS link must be able to
maintain performance over this interface as long as the delay requirements
outlined in D.MSC.10.6 are maintained.
D.MSC.10.8
In accordance with Exhibit C, multiple MSCs must be able to be networked to form
a soft hand-off clusters allowing any BTS served by MSC-A to enter Soft Hand-off
with any BTS served by MSC-B where MSC-A and MSC-B are from the same Vendor.
<PAGE>
D.MSC.10.9
In accordance with Exhibit C, multiple MSCs must be able to be networked to form
Soft Hand-off cluster allowing any BTS served by MSC-A to enter soft hand-off
with any BTS served by MSC-B where MSC-A and MSC-B are from different vendors
(IS-41).
<PAGE>
ATTACHMENT 1 TO EXHIBIT D.MSC
North American Market BHCA Rating
The system capacity for Autoplex 1000(R) North American markets is 200,000 BHCA
based on the following assumptions:
- Single MSC system EC
- Release 9.0 (or later)
- 3B21 Duplex ECP
- OMP with Release 9.0 (or later) software
- A single 5ESS-2000 Switch DCS carrying 100% of system traffic with a
hand-off rate of 1.6 Soft HO/BHCA or less and 0.2 Hard HO/BHCA or less
- 2.5 Autonomous Registrations (AR) per BHCA
- Short Message per BHCA <10%
- Voice Mail/CF/CW on 2.5% of BHCA
- Available paging capacity in CDMA is approximately 51 pages/second
- Maximum of two page messages per page attempt
- Maximum "No Page Response" rate is 50%
- Mobile terminated call attempts are 32% of BHCA or lower
- Mobile terminated calls answered is 10%
- Mobile originated calls are 68% of BHCA
- Mobile originated answered calls are 55% of BHCA
- Mobile to mobile calls are 10% of BHCA
- Mobile busies is 3% or higher of BHCA Mobile originations limited to 18,000
calls/cell/hour on the access channel
- BHCA per subscriber is 1.0
- Average Call Holding Time (ACHT) is 90 seconds.
<PAGE>
EXHIBIT D.NM
LUCENT TECHNOLOGIES D.NM
D.NM. NETWORK ELEMENT MANAGEMENT SYSTEM REQUIREMENTS
Network Element Management Systems (NEMS) will be defined as systems required
for operating and maintaining the PCS networks being designed and implemented by
the Vendor.
The NEMS will provide management for any and all network elements provided by
the vendor. Management applications include configuration management, fault
management, fault isolation, fault resolution, security management, performance
management, accounting management, data storage, system provisioning and data
evaluation.
<PAGE>
D.NM.1. SYSTEM COMPATIBILITY:
D.NM.1.1 INTEROPERABILITY WITH NETWORK MANAGEMENT SYSTEM:
Provide interoperability between all network element managers and an overlay
network management system via SNMP, CMIP or ASCII. Both the network elements and
network element managers will allow interconnection of a remote network
management system while maintaining local functionality with the network element
manager.
Owners objective is Q3 interface. CMIP / CMISE is highly desired by Owner. Both
Vendor and Owner recognize that no commitment presently exists for Q3 interface.
D.NM.1.2 NETWORK ELEMENT MANAGEMENT FOR THE VENDOR-PROVIDED BSC:
D.NM.1.3 NETWORK ELEMENT MANAGEMENT FOR THE VENDOR-PROVIDED BTS:
D.NM.1.4 NETWORK ELEMENT MANAGEMENT FOR THE VENDOR-PROVIDED HLR:
D.NM.1.5 NETWORK ELEMENT MANAGEMENT FOR THE VENDOR-PROVIDED MSC/VLR:
D.NM.1.6
Vendor shall provide a first level NMS that directly interconnects and
interoperates with BSC, BTS, and MSC / VLR NEMS systems. ASCII over RS-232 or
TCP / IP interfaces is supported.
D.NM.1.7
Vendor NEMS shall be consistent with the Telecommunications Management Network
(TMN) hierarchy. Vendor OA&M architecture is consistent with philosophy of TMN.
OMP / ECP act functionally as an EMS. Owner and Vendor agree that this is not a
testable item.
D.NM.1.8
Vendor NEMS shall interoperate with Owners Network Management System (NMS). More
information is required from Owner to determine protocol and interfacing
requirements. ASCII over RS-232 or TCP / IP interfaces is supported.
D.NM.1.9
Vendor NEMS shall interconnect with Owners deployment of Metapath's Peripheral /
Pollable Data Unit (PDU). TCP / IP connection to the OMP is needed by Owner.
D.NM.1.10
Vendors OMP shall be the NEMS that interconnects and interoperates with Owners
NMS. The OMP can act as the interface point to the NMS.
<PAGE>
D.NM.1.11
OMP shall be redundant and highly available according to the "Redundant
Architecture - Hot Standby Systems" requirements. Input is needed by the Owner
to understand requirements in the referenced document. HA-OMP should satisfy
redundant architecture requirements.
D.NM.2 NETWORK ELEMENT DIVERSITY:
D.NM.2.1
Vendor NEMS shall support at least two NMS connections in an active hot standby
configuration with automatic failover.
D.NM.2.2 SUPPORT ALL NETWORK ELEMENTS ON THE SAME MONITOR:
Provide the capability to display management windows from all network elements
from any single monitoring station.
D.NM.2.3 SUPPORT MULTIPLE SIMULTANEOUS SESSIONS:
Provide the capability to support multiple user interactive sessions. System
will support up to 16 users simultaneously, with all users having the capability
of running multiple applications simultaneously.
D.NM.2.4 ALLOW NETWORK ANALYSIS OF MULTIPLE ELEMENTS:
Provide the capability to analyze multiple network elements, in an integrated
manner. The system will allow for analyses of multiple elements simultaneously.
D.NM.2.5 REDUNDANT ARCHITECTURE - HOT STANDBY SYSTEMS:
Provide fault tolerant architecture to protect and ensure access into network
elements at all times. Network element management systems will have multiple
means of accessing the element being managed by providing access to multiple
interface processors. The network element management system itself will have
hot-standby functionality and/or a fault tolerant processor. All elements will
be accessible in the event of complete network element management failure.
Requires High Availability OMP.
NEMS shall have a standby processor than can assume full role of most recent
former active processor within 5 minutes. This role assumption shall be
activated automatically while allowing manual intervention to prevent it.
Vendors HA-OMP should satisfy this requirement.
D.NM.3. CONFIGURATION MANAGEMENT:
D.NM.3.1 DEFINE AND VIEW RESOURCES:
(a) The OMP shall collect, report and store inventory information for
each BTS provided by the Vendor and provide the capability to
report hardware and software resource information. System will
report Nomenclature and version of each software-loadable circuit
card. Granularity will be to the lowest field replaceable circuit
card. Version information to be available by June 1997.
<PAGE>
D.NM.3.2 START AND STOP NETWORK OPERATIONS:
Provide the capability to remove and restore desired functional units within
each network element. The starting and stopping of any network operation will be
allowed on a unit by unit basis. This includes call processing.
D.NM.3.3 REPORT CONFIGURATION STATUS:
Provide the capability to report the on-line/off-line/hot-standby/Out-of-service
state of each circuit card within a network element.
D.NM.3.4 BROADCAST SOFTWARE LOADS TO ELEMENTS SIMULTANEOUSLY:
Provide the capability to download system software to multiple base stations
simultaneously by issuing a single command, in compliance with D.BTS.7.4
"Software Download". System will allow the creation of batch files to download
software per a user designated time to user designated cell sites. System will
report on successful or unsuccessful load.
D.NM.3.5
[intentionally omitted]
D.NM.3.6 REMOTE RETUNING OF BASE STATIONS:
Provide the capability to remotely retune the base station in compliance with
D.BTS.3.1 "Ability to retune frequencies remotely."
D.NM.4 FAULT MANAGEMENT:
D.NM.4.1 FAULT DETECTION AND REPORTING:
Provide the capability to detect faults within each network element and report
these faults in a hierarchical, graphic display. Reports will be available for
reporting alarm reports, equipment state change reports, call processing failure
reports, diagnostic error reports, software error and recovery reports, hardware
error and recovery reports, and initialization event reports. System will allow
for critical faults to be reported via a commercial pager. TIMS system or some
NM system to fully comply.
System shall be capable of reporting all alarms (faults, events, state changes,
etc...) to Owners Fault Management System via Owners Operations Systems Support
Network (OSSN). Equipment shall connect and report alarms over TCP/IP Ethernet.
Vendors current OMP supports TCP/IP connections to NMS. However, compliance
depends on Owners protocol requirements. Owner and Vendor must mutually agree
upon those requirements and availability. ASCII over RS-232 or TCP / IP
interfaces is supported.
D.NM.4.2 FAULT DIAGNOSIS:
Provide the capability to diagnose the validity of a particular system failure,
hardware or software. System will report a diagnosis of possible causes for the
failure. Fault diagnosis will be both automatic and allow for manual requests.
Off-line equipment will be allowed to be diagnosed manually and automatically,
periodically. Base Station control and reporting will be in compliance with
<PAGE>
D.BTS.3.2 "Ability to perform T1 or other loopbacks remotely" and D.BTS.3.3
"Telemetry and alarms."
D.NM.4.3 FAULT ISOLATION TO LOWEST REPLACEMENT UNIT:
Provide the capability to isolate system faults to a field replaceable circuit
card.
D.NM.4.4 FAULT CORRECTION:
Provide the capability to automatically attempt to restore of faulty circuit
cards or software upon detection of system errors. System will also allow for
manual intervention of an automatic restore procedure.
D.NM.4.5 ALARM AND REACT TO SITE RELAY TRIGGERS:
Provide the capability to monitor and alarm a minimum of 10 relay contacts of
cell sites and switches. Alarming will include environmental systems, power
systems, lighting systems, security systems, etc.
Each relay alarm will have the ability to be assigned a severity level, thus
allowing the management system to react accordingly (i.e. issue critical alarm,
page technician, etc.).
D.NM.4.6 PROVIDE FAULT SEVERITY VIA GRAPHICAL USER INTERFACE (GUI):
Provide the capability to report alarms via a graphical user interface. Banners
will report individual fault or conditions and indicate severity by altering
banner color.
D.NM.4.7 NO ACTIVITY ALARMING:
Provide the capability to report a possible alarm condition due to link failure
when no data has been received from a particular link in a user defined
time-frame.
Vendor shall provide alarm heartbeat message, a positive acknowledgment sent
asynchronously once every five (5) minutes by the equipment that interfaces with
Owners Fault Management System. Owner and Vendor need to mutually agree upon
protocol requirements for interfacing to the Fault Management System.
D.NM.4.8 ABILITY TO ADMINISTER REMOTE TEST UNITS:
Provide the ability to monitor remotely cell site performance in accordance with
D.BTS 7.3 "Cell site Monitoring capability."
D.NM.5 SECURITY MANAGEMENT:
D.NM.5.1
[intentionally omitted]
<PAGE>
D.NM.5.2 ARCHIVE AND RETRIEVE SECURITY INFORMATION:
Provide the capability to store and retrieve all security related information.
Information will range from security access levels, to login times by user id,
to password aging data.
D.NM.5.3 USER PASSWORD AGING:
Provide the capability for user defined time-frames for password aging. Allow
for synchronization of password aging to multiple network elements.
D.NM.5.4
[intentionally omitted]
D.NM.5.5 USER DEFINED MAXIMUM IDLE TIME:
Provide the capability to automatically logout a user that does not enter a
keystroke in a definable time-period.
D.NM.5.6 LOGIN FAILURE AFTER USER DEFINED ATTEMPTS:
Provide the capability to reject user id login after attempting to enter
password fails. System allow user to define how many attempts are allowed before
rejection.
D.NM.5.7 USER DEFINED MAXIMUM LOGIN TIME ALLOTTED:
Provide the capability to set the amount of time each login session is allotted
before rejection occurs.
D.NM.6 PERFORMANCE MANAGEMENT:
Vendor shall provide a TCP/IP Ethernet (at least 10Mbps) interface over which it
shall provide Performance Measurements to Owners Performance Management System.
D.NM.6.1 REPORT NETWORK TRAFFIC USAGE BY CELL AND SECTOR:
Provide the ability to gather statistics on usage in terms of:
Effective voice channels
Erlangs based upon a given blocking assumption
D.NM.6.2 REPORT BLOCKED CALL RATE BY CELL AND SECTOR:
Only supported by cell, not sector.
D.NM.6.3 REPORT DROPPED CALL RATE BY CELL AND SECTOR:
D.NM.6.4 REPORT HAND-OFF STATISTICS BY CELL AND SECTOR:
D.NM.6.5
[intentionally omitted]
<PAGE>
D.NM.6.6
[intentionally omitted]
D.NM.6.7 REPORT POWER LEVELS AT PERTINENT CALL TIMES:
Provide the capability to report mobile power levels at call termination and
call hand-off points. Owner and Vendor must mutually agree upon availability.
D.NM.6.8 REPORT ALL PROCESSOR USAGE STATISTICS:
Provide the capability to alarm when critical processors approach resource
limitations.
D.NM.6.9
[intentionally omitted]
D.NM.6.10 REPORT OF ANY OTHER STAT OR EVENT OR ANY NETWORK ELEMENT:
Provide the capability to report statistical or event information per vendor
provided documentation.
D.NM.6.11 PROVIDE MULTIPLE MEANS OF FILTERING DATA:
Provide the capability of selecting very specific statistics or events and
filter by measurement type, type of network element, time of day, etc.
D.NM.6.12 PROVIDE PERFORMANCE TUNING INTERFACE:
Provide a tool for performing iterative changes to performance parameters and
viewing performance characteristics resulting from the changes. A mobile tool is
desired.
D.NM.6.13 PROVIDE EVALUATION OF PERFORMANCE TUNING:
Provide the capability to manipulate and analyze the data received from the
performance turning interface. Analysis will assist with determining performance
parameters. A mobile interface and analysis tool is desired.
D.NM.6.14 PROVIDE A CALL TRACING FEATURE FOR MONITORING ACTIVE CALLS:
Provide the capability to trace multiple calls while in progress. The system
will report power levels and frame error rate. During hand-off, the system will
report soft hand-off stats on all possible candidate cells and sectors. Owner
and Vendor must mutually agree upon availability.
D.NM.7. ACCOUNTING MANAGEMENT:
D.NM.7.1 GENERATE AND RECORD ACCOUNTING INFORMATION:
Provide the capability to control, collect and record all accounting
information. AMA data will be collected in real time (hot billing) and stored on
disk.
<PAGE>
D.NM.7.2 USER DEFINED INFORMATION IN THE CALL DETAIL RECORD (CDR):
Provide the capability to add specific fields in the call detail record. Fields
will be capable of accepting any stat or event already produced by the network
elements. A standard CDR will be developed with "spare" fields provided for user
definition. Depending on the scope of changes required, this may be undertaken
as custom development pursuant to the terms of the Contract.
D.NM.7.3 CONTROL STORAGE AND ACCESS TO ACCOUNTING INFORMATION:
Provide the capability to store AMA data to disk and then allow the transfer of
data to magnetic tape or via an electronic data network to a billing center.
D.NM.7.4
[intentionally omitted]
D.NM.7.5 HIGH CAPACITY AMA - REAL TIME BILLING:
Provide the capability to produce a high data transfer rate for billing
information to allow the feasibility of real time billing applications.
D.NM.8. INFORMATION REPOSITORY:
D.NM.8.1 SUBSCRIBER INFORMATION:
D.NM.8.2 BILLING INFORMATION:
D.NM.8.3 PERFORMANCE INFORMATION:
D.NM.8.4 FAULT MANAGEMENT INFORMATION:
D.NM.8.5 SYSTEM AND ELEMENT CONFIGURATION INFORMATION:
D.NM.8.6 SECURITY MANAGEMENT INFORMATION:
D.NM.9. GENERAL REQUIREMENTS:
D.NM.9.1
[intentionally omitted]
D.NM.9.2 INTERFACE TO OA&M INFORMATION:
Provide the capability to allow user to develop desired applications.
D.NM.9.3 FAULT TOLERANT PROCESSORS:
See section 2.5
<PAGE>
D.NM.9.4 NETWORK ELEMENT MANAGEMENT TO SUPPORT ARCHITECTURE:
Provide the capability to manage network elements as the architecture grows to
full capacity. If the capacity of the network element management system cannot
control a fully grown network element, provide the ability to expand and grow
(scaleable) the management system. Regardless of element size, the network
element management system will always be required to manage its respective
element.
D.NM.9.5 IS41 MESSAGE VISIBILITY FOR FRAUD PROTECTION:
Provide a near real-time data channel for fraud control. Provide the
functionality to decode the messages into useful formats and provide filters to
view only desired messages.
D.NM.9.6 PREVENTATIVE MAINTENANCE ANALYSIS:
Provide off-line and on-line diagnostics to search for possible faulty equipment
before customer reports service issue. Provide call processing failure reports
to identify faulty network elements as quickly as possible.
D.NM.9.7 OFF-LINE MODELING OF REAL-TIME DATA:
Provide the capability to use real-time data from the live network for
optimization purposes. Stats of interest include power levels, hand-off
channelization information, and hand-off topology data.
D.NM.9.8 ON-LINE DOCUMENTATION OF NETWORK ELEMENTS AND SOFTWARE:
Provide all system manuals, both hardware and software, on CD ROM format for
easy access to network element information. Every hardware and software upgrade
will include documentation supported on CD ROM for changing/adding/deleting the
existing electronic documentation.
D.NM.9.9
[intentionally omitted]
<PAGE>
D.NM.10 GRAPHICAL USER INTERFACE:
D.NM.10.1 ALARM MONITORING UTILIZING GRAPHIC ALARM BARS:
See section 4.6.
D.NM.10.2
[intentionally omitted]
D.NM.10.3 PERFORMANCE MANAGEMENT STATISTICS GATHERING VIA MENUS:
Provide the capability, in a pull-down menu system, to choose system statistics
and provide the filtering of that data through a graphical selection of
measurement type, network element, time of day, etc.
D.NM.10.4 LOGICAL STATUS DISPLAY - HIERARCHICAL EQUIPMENT TREES:
Provide the capability to view network status and configuration through
hierarchical equipment trees. Each screen will illustrate the next level in the
hierarchy. Any trouble in a particular network element will flow up to the
highest level in the tree. Simple diagnostics will be allowed from the tree by
simply entering a menu command and the system will issue a command to remove a
device and attempt to force it back into service.
<PAGE>
Exhibit G1
BTS/BSC - MSC
MSC - MSC
INTEROPERABILITY
INTRODUCTION
The Owner standard, open BSC to MSC interface (the "Open A Interface", or OAI),
is based on industry standard IS634. Interoperability between MSCs is based on
industry standard IS41. Lucent proprietary MSC to BSC interfaces may be deployed
in circumstances where the open or standard interface is not available, or is
not needed in the Owner's reasonable opinion. In cases where a proprietary
interface has been implemented in a PCS system, and an OAI is provided as an
additional option on such system, then it is desirable that the OAI option
support the standardized capabilities supported by the proprietary interface.
All references to "D.MSC" are references to Exhibit D.MSC to the Amended and
Restated Procurement and Services Contract between Sprint Spectrum Equipment
Company, L.P. and Lucent, dated as of October 9, 1996 (as the same may be
amended, supplemented or modified from time to time, the "SSLP Contract").
Capitalized terms used herein but not otherwise defined herein or in the MOU
shall have the meanings set forth in the SSLP Contract.
MSC CAPABILITIES
The MSC shall provide the capabilities of D.MSC.1 ("Features and
Functionalities") when the interface to the radio system is via the OAI.
MSC Retrofit
The Open A Interface shall be made available as an additional option for any of
the Owner's MSCs purchased, past or future. Adding this option will consist of
purchasing additional hardware and software specific to the A-Interface itself
and, where necessary, hardware and software to support traffic growth for added
base stations that goes beyond the existing MSC's engineered capacity.
Interface Conformance
The Open A Interface shall conform to the Owner's Inter-Operability
Specification (IOS), as contained in Exhibit G2.
Administration and Maintenance
For purposes of this exhibit, "Local MSC Open A Interface" shall refer to MSC
hardware and software components up to the points of demarcation between the MSC
and BSC, defined here as the physical signaling links and voice circuits
connecting the BSC to the MSC.
<PAGE>
The MSC shall meet the requirements of D.MSC.4 ("Administration and
Maintenance") for administration and maintenance of the Local MSC Open A
Interface. The administrative and maintenance capabilities for the Local MSC
Open A Interface shall be functionally equivalent to those provided for an
existing proprietary interface between the MSC and a radio system.
The MSC shall be capable of establishing a DS-0 channel within a given DS-1 link
to a subtending BSC for transporting operations messages between the radio
system and an Operations and Maintenance Center (OMC) responsible for managing
that radio system.
Reliability
The Local MSC Open A Interface will meet the reliability requirements
established for the radio system to MSC interface in D.MSC.6.1 ("Reliability").
NETWORK TRAFFIC MANAGEMENT
The MSC shall provide traffic management controls for the Local MSC Open A
Interface, meeting the requirements of D.MSC.9.1 ("Traffic Management").
CAPACITY
The OAI shall be able to support 24 CDMA PCS calls simultaneously per DS-1 link
to the MSC, less the number of required signaling or operations channels. For
any given DS-1, the number of signaling and operations channels may be zero. The
MSC shall support system capacities for the OAI or a mixture of the OAI and
proprietary interfaces no less than that stated in D.MSC.6 ("Service Standards
and Capacity"). The MSC shall be capable of supporting individual BSCs up to a
maximum capacity of 50,000 Busy Hour Call Attempts (BHCA). The MSC shall be
capable of supporting up to 15 BSCs with combined capacity up to the MSC maximum
capacities stated in D.MSC.6 ("Service Standards and Capacity"). The MSC shall
be capable of supporting a sufficient number of DS-1 links per BSC to allow full
utilization of the BSC BHCA capacity at initial deployment, so long as the BHCA
capacity does not exceed the value stated in G.6.3 hereof.
<PAGE>
OPEN A INTERFACE SCHEDULE
The following milestones included in Table G1, as evidenced by completion of the
corresponding deliverables, shall be met to assure timely availability of the
OAI. The milestones listed below are subject to change upon mutual agreement of
the Owner and the parties involved.
<TABLE>
Table G1
<S> <C> <C> <C>
- - --------------------------- -------------------------- -------------------------- --------------------------
MILESTONE DELIVERABLE RESPONSIBILITY DUE DATE
- - --------------------------- -------------------------- -------------------------- --------------------------
- - --------------------------- -------------------------- -------------------------- --------------------------
- - --------------------------- -------------------------- -------------------------- --------------------------
- - --------------------------- -------------------------- -------------------------- --------------------------
System Level Requirements Functional Message Lucent 2/18/98
Complete 1 Review with Owner and BS
Vendor
- - --------------------------- -------------------------- -------------------------- --------------------------
- - --------------------------- -------------------------- -------------------------- --------------------------
Inter-Op Test Plan Test Plan Documentation IOTT 3/31/98
Complete2
- - --------------------------- -------------------------- -------------------------- --------------------------
- - --------------------------- -------------------------- -------------------------- --------------------------
Vendor Design 90% Post_Design Functional IOS Working Group 6/1/98
Complete Message Review .
- - --------------------------- -------------------------- -------------------------- --------------------------
- - --------------------------- -------------------------- -------------------------- --------------------------
IOTT (KC Lab) test start 1. MSC equipment and 1. MSC Vendor 12/31/98
3 software
operational.
2. BTS equipment and 2. BTS Vendor 12/31/98
software
operational.
3. Lab Environment. 3. Owner 12/31/98
- - --------------------------- -------------------------- -------------------------- --------------------------
- - --------------------------- -------------------------- -------------------------- --------------------------
IOTT (KC Lab) Test IOTT Test Documentation IOTT 4/30/99
Complete4 indicating successful
test completion.
- - --------------------------- -------------------------- -------------------------- --------------------------
- - --------------------------- -------------------------- -------------------------- --------------------------
General Availability of IOTT Test Documentation Lucent 7/31/99
IOS Version 2 OAI to indicating successful
Owner 5 field test completion.
- - --------------------------- -------------------------- -------------------------- --------------------------
</TABLE>
G1.10.1.1 Over The Air Service Provisioning (OTA-SP) Phase 2
The capability of delivering additional authentication information to a mobile
over the OAI will be delivered by the Vendor at a schedule mutually agreeable to
the Owner and Vendor.
G1.10.1.2 Inter-Vendor / Inter-BSC Soft Handoff
The capability of performing soft handoff between BTSs served by two separate
BSCs will be delivered by the Vendor in a manner consistent with IS634 Revision
A. The schedule for delivery of this capability will be jointly determined by
Owner and Vendor upon approval of the IS634 Revision A standard.
G1.11 MSC-MSC INTER-VENDOR HARD HANDOFF
The Vendor will deliver to the Owner the capability to perform CDMA PCS to CDMA
PCS Inter-vendor hard handoff between MSCs, as described in IS41 Revision C.
<PAGE>
Exhibit G2
MSC to BSC Interface IOS V.2
"MSC to BS Interface Inter-Operability Specification (IOS) Version 2.0"
Published April 25, 1997
Complete copy of this document on file with Owner and Vendor
<PAGE>
Exhibit G3
MSC to BS Interface IOTT Test Strategy and Test Plan
"MSC to BS Interface Inter-Operability Test Team (IOTT)
Test Strategy and Test Plan"
Based on Sprint PCS Interoperability Specifications (IOS) Version 1.1
Published June 30, 1997
Complete copy of this document on file with Owner and Vendor
<PAGE>
EXHIBIT J
Lucent Technologies and Sprint PCS's Software Development Understanding
1. Purpose of Document and Background
The purpose of this document is to describe the tasks, procedures, and timing
necessary to evaluate and respond to requests for new or improved functionality
in the Autoplex(R) product line from Sprint PCS. Section 2 covers the process
for feature development where Sprint PCS has the opportunity to input into that
process. Section 3 covers the RDAF process in more detail and how Sprint PCS
matches up their own document to the RDAF process. Section 4 looks at the
Platinum Ticket concept for faster development of software features. Section 5
addresses the Autoplex(R) Mobile Switching Center (MSC) Fast Feature Development
Process. Section 6 provides alternatives for addressing software concerns.
1.1 Custom Development
Sprint PCS may have requirements for features that will be considered custom
software development. As stated in more detail in section 11.9 of the Contract,
Sprint PCS will identify to Lucent, in writing, a summary of any such proposed
development of custom software. This summary from Sprint PCS should be directed
to the Customer Team Director of Sales with a copy to the Applications
Engineering Team. This summary will provide a description of any proposed custom
software sufficient to enable Lucent to determine the general demand for, and
its plans, if any, to develop the same or similar products. Lucent will respond
to such summary within thirty (30) days after receipt and indicate if it has the
ability to fulfill a subsequent Request for Proposal (RFP) from Sprint PCS for
development of custom software.
2. Lucent Technologies Wireless Product Life Cycle Process - Overview
The development of software features, from concept to deployment, follows a
product life cycle process, also know as the Lucent Gate Process. See Figure 1
below. This product life cycle process has `checkpoints' in which Sprint PCS has
an opportunity to provide input or feedback into the process. Section 2 provides
an overview of the process as well as point out areas within the process in
which Sprint PCS has the opportunity to input. These inputs, discussed below,
are the RDAF process, FDD review, and priority ranking.
<PAGE>
[GRAPHIC OMITTED]
2.1 Sprint PCS Input.
Sprint PCS has three main areas of input into the product life cycle process.
2.1.1 Sprint PCS's First Input.
The first opportunity for input into the process is at Gate I via the Request
Definition Assessment Form (RDAF). The RDAF process is discussed in section 3.
2.1.2 Sprint PCS's Second Input.
The second opportunity for input into the process is after Gate II, but before
Gate III. This is when Sprint PCS has the opportunity to review the Lucent
Feature Definition Document (FDD) with Lucent's Application Engineering Team
supporting Sprint PCS. In rare cases where an FDD is not created, then
Application Engineering will share the feature design information with Sprint
PCS before Gate III.
2.1.3 Sprint PCS's Priority Input.
To better address Sprint PCS's feature needs and to more importantly reflect
upon Sprint PCS's major revenue contribution to Lucent, a new prioritization
process has been implemented. Beginning with CDMA Release 8.0, Cell 13.0, ECP
13.0, and 5E13, Lucent is using a weighted ranking scale that provides the
proper recognition of revenue contribution to the prioritization of features. In
Sprint PCS's case, this clearly ranks their feature needs ahead of all other
customers. This ranking provides Sprint PCS the necessary "clout" that they
deserve.
2.2 Product Life Cycle Check Points
The sub-sections below list the actions that take place after a Gate has been
passed and action that needs to happen before the next Gate. This section is
intended to show the various checkpoints within the process. Also refer to
Figure 1 and Figure 2.
2.2.1 Gate I: Opportunity Statement
Customer Need (RDAF)
Proposed Product Functionality
Potential Market Assessment
2.2.2 Gate II: Technical, Marketing, & Business Issues
Preliminary Business Case
Proposed Support Strategies
Baselined Feature Description Document (FDD)
<PAGE>
2.2.3 Gate III: Detailed Customer Requirements
Baselined Lucent's proprietary System Requirements Document (SRD)
Baselined Release Plan
2.2.4 Gate IV: Product Development
Development Plan Implemented
Support Plan Implemented
First Office Application (FOA)
2.2.5 Gate V: Full Product Deployment
Generally Availability (GA)
2.3 Product Life Cycle Schedule Timeline
Features that will be developed will be assigned a software release. These
software releases are tracked through one of three programs. Those software
program names are CDMA, ECP (MSC), and 5ESS.
Figure 2, below, shows the product life cycle schedule timeline that points out
the approximate timing of how long it takes for a feature, that is part of a
release, to be deployed and when certain checkpoints need to be met. There is
typically a 22 month development time frame.
- - ------------------------------------------------------------------------------
Feature Candidate List 22 Months from GA
- - ------------------------------------------------------------------------------
Opportunity Statement (RDAF) 18 Months from GA
Feature Description Document (FDD) 16 Months from GA
System Requirements Complete (SRD) 12 Months from GA
Development Complete 6 Months from GA
First Office Application Complete 2 Months from GA
- - ------------------------------------------------------------------------------
GA = General Availability
- - ------------------------------------------------------------------------------
Figure 2. - Product Life Cycle Schedule Timeline
3. Lucent's Request Definition & Assessment Form (RDAF) Process
The RDAF Process is used to review and track requests originating from internal
Lucent organizations and AUTOPLEX customers (Sprint PCS). All requests,
regardless of the origination, must be made via the RDAF. The process begins
when a Lucent employee or a customer through a Lucent employee (Application
Engineering), requests a new feature/enhancement by way of the RDAF form. The
RDAF process includes the logging of the request, as well as the gathering of
the necessary technical and marketing information in an organized fashion for
Product Management to evaluate the request. The process concludes with the
Product Manager documenting disposition of the request via electronic mail to
the Lucent originator and Customer Business Management (CBM). The CBM will work
up the response to the customer and send that response on to the Customer Team.
It is the responsibility of the Lucent originator and the Customer Team to
forward the Product Manager's and CBM's response to the customer, where
applicable.
<PAGE>
3.1 Sprint PCS's Input into the RDAF process.
Sprint PCS has a document called Request Feature Definition (RFD) that, after
written by Sprint PCS, easily converts to a Lucent RDAF. A Sprint PCS requested
RDAF is filled out by the Applications Engineering Team responsible for Sprint
PCS. The Application Engineering Team works with Sprint PCS to convert Sprint
PCS's RFD to a RDAF.
Once the RDAF is submitted, Lucent will respond within 60 days or less to
estimate the request. For PMUG related RDAFs Lucent will respond within 30 days.
4.0 Platinum Ticket
It is critical that Sprint PCS remain the leader in the fiercely competitive PCS
marketplace. Sprint PCS's business relationship is vitally important to Lucent,
so Lucent wants to provide not only assurance, but action that if the situation
ever presents itself where a feature is deployed to the marketplace (GSM, TDMA,
another PCS provider, an 850 provider) that Sprint PCS will be covered by way of
Lucent reacting to support Sprint PCS and help Sprint PCS not lose market
advantage. This process will remain in effect until release 9.0 is made
generally available.
To assure Sprint PCS of Lucent's intentions, Lucent will offer Sprint PCS one
"Platinum Ticket", per release, that is to be used within that calendar year
beginning January 1998. Lucent clearly understands the importance of time to
market in feature deployment and is committed to be responsive to Sprint PCS's
needs. Sprint PCS will have one `Platinum Ticket' per release that can be
"cashed" to make certain that no feature is deployed in a Sprint PCS market that
Sprint PCS was, for whatever reason, unaware of and cannot afford to be late in
deploying a similar feature.
4.1 New Feature Request
A new feature request would be defined as a feature whereby Lucent has not
received an RDAF. This Sprint PCS request will engage the pertinent Lucent
executive groups including Application Engineering, Customer Business
Management, and Product Management, Systems Engineering and Development. Lucent
will immediately pull together the required resources (a conference call within
48 hours and a meeting within five (5) working days) to counter-attack a feature
that would be in competition with a Sprint PCS market. This feature must be a
subscriber calling feature. This process would specifically exclude network
performance features, platform affecting features, and IS634/Interoperability
features. Specifics, such as feature functionality, feature estimation, systems
engineering requirements, development, testing, etc. would be addressed and
reasonably negotiated by an emergency task force of Lucent management.
A Platinum Ticket that is cashed to create a Platinum Feature can only be used
for a feature that lies in the CDMA, ECP (MSC), 5ESS, or WIN programs. Once a
Platinum Ticket is cashed, it cannot be reused. It will be mutually communicated
and understood by all parties what impacts utilizing the Platinum Ticket may
have on other Sprint PCS feature requests, including already committed features.
<PAGE>
4.2 Existing Feature Request
There might also be a situation where Lucent has received a RDAF from Sprint PCS
that has been recently identified as a competitive feature. However, based on
customer priorities, requirement definitions, terminal issues, etc., Lucent has
targeted this particular feature for a future release. In the event that this
unknown competitive feature is targeted for a release before Lucent's planned
release, Sprint could utilize their "Platinum Ticket" to request the pull-up of
such a competitive feature to an earlier Lucent release. Lucent will put its
best effort forward to pull the requested feature up to an agreeable date of
delivery in an earlier release or in a software update to a release. Timing
restrictions for this request will have to be discussed on a per feature basis
given the unknown uniqueness of the feature at hand. Specifics, such as feature
functionality, feature estimation, systems engineering requirements,
development, testing, etc. would be addressed and reasonably negotiated by an
emergency task force of Lucent management.
5.0 Autoplex(R) Mobile Switching Center (MSC) Fast Feature Development Process.
In order to be more responsive, Lucent has developed the Fast Feature Process
(FFP). This process addresses small, urgent features that require immediate
attention. Specifically, this reduces the concept to delivery interval for
smaller features that have limited system impact. This process allows the MSC
team to improve response time to feature requests received through the Request
Definition and Assessment Form (RDAF) process, and items received through the
PCS Maintenance User's Group (PMUG). It also provides the opportunity to reduce
rework by including customers in the feature definition and review process.
5.1 Requirements / Restrictions / Conditions
Targeted as urgent features that are relatively small, Lucent intends to turn
around a feature request from RDAF to deployment in less than 6 months. Lucent
will guarantee Sprint PCS two (2) MSC Fast Features per calendar year providing
the conditions below are met.
The following must be met for a feature to even be considered for the
Autoplex(R) Mobile Switching Center (MSC) Fast Feature Development Process:
No hardware development No 3rd Party Vendors No WIN involvement No
terminal impact Requirements must be stable
No change to standards or government regulations.
6.0 Additional Alternative Suggestions
In addition to previously mentioned methods of addressing Sprint's time to
market needs, there exist other avenues which Sprint PCS should always take
advantage of.
<PAGE>
6.1 PCS Maintenance User Group (PMUG)
Lucent is extremely committed to our PCS customers, which is why the PCS
Maintenance Group was founded almost a year ago. The purpose of this forum is to
create and maintain an active partnership between PCS CDMA Users and Lucent to
provide prioritized deliverables and direction for system maintenance and
development.
A critical component to the PMUG forum is the Action Item Review meetings. This
is where status is provided as to the action items customers, especially Sprint,
bring to Lucent's attention.
Sprint PCS also has the opportunity to gather great market and competitive
information by attending these forums. PMUG is just one place where many
customers and/or groups of customers express (or demand) new or expedited
development. The combined influence of many customers purchasing power has
significant impact on Lucent's development programs. Sprint PCS certainly has
the leverage to influence such a conference in the feature direction it
requires.
From a competitive market data perspective, the entire PCS CDMA operator base is
present at this forum expressing their future feature needs -- this can provide
Sprint PCS with a very early view of what direction other PCS carriers are
moving in.
As a reminder, the next PMUG Action Item Review meeting which is scheduled for
Tuesday, April 14th at the following location:
Lisle/Naperville Hilton
3003 Corporate West Drive
Lisle, IL 60532
(630) 505-0990
800-552-2599
If you have any questions, please contact Anita Besch on (630) 224-7453 for
further information on registration and hotel information.
6.2 Lucent's 3rd Party Programs
Lucent strives to partner with those corporations that can also enhance and
speed to market features that compliment your existing markets as well as
provides the competitive differentiation necessary to be successful.
6.3 Interoperability Lab
This facility is specifically designed to address Sprint's needs with our staff
ready to respond to Sprint PCS's requests.
- - --------
1 Distribution of functionality across system elements, and specific
requirements written for each element.
2 Detailed test cases to validate functionality of the IOS irrespective of
vendors or schedule.
3 Owner's lab environment made available to Vendor consistent with the approved
test plan. MSC and BTS vendors have hardware and software in place to start
testing.
4 Applicable IOTT test cases have been executed.
5 The OAI capability, or a subset (specific to vendors verified) is declared
available for general deployment in a CDMA PCS network.
<PAGE>
Exhibit K
BTS ORDER PROCESS
LUCENT/SPRINT PCS BTS ORDER PROCESS:
Sprint PCS provides BTS questionnaire to Lucent Account Executive and Field
Engineer.
The Lucent Account Executive provides a Firm Price Quote identifying the
products to the Sprint PCS team representative. The BTS is now approved for
product procurement. Lucent Standard Indoor and Outdoor BTS Kits and services
are included in the Approved Products List (APL). The Sprint PCS Regional
representative will prepare the Purchase Requisition, obtain Budget Manager and
Director's signatures and notify the Lucent Account Executive of approval. The
Lucent Account Executive will send a copy of the Firm Price Quote to Order
Management (Dave Widergren). The Sprint PCS Regional representative will forward
the PR with Firm Price Quote attached to Sprint PCS Kansas City Purchasing :
John Sorrentino
Phone: 816-559-6029 Fax: 816-559-1555
7900 College Blvd. 2NDFl Overland Park, Kansas 66210
Sprint PCS Purchasing, John Sorrentino, will confirm part #'s and prices per the
Approved Products List (APL). Part numbers/prices which are not valid are
confirmed with the Sprint PCS Region and included as a variance or added to APL.
Joe Sotak, Lucent (913-338-8904) and John Sorrentino, Sprint PCS, will manage
the APL. Joe Sotak will send updates to Lucent Order Management (Dave Widergren)
and East AE (Ed Wacienga) and West AE (Dave Hemphill) for distribution to the
appropriate Field Engineers. See Attachment A for APL Process. John Sorrentino
will prepare individual Purchase Orders for equipment and services. All Purchase
Orders will include the Firm Price Quote Proposal number. The Purchase Order for
equipment is forwarded to Sprint North Supply; the Purchase Order for services
is forwarded to Lucent Order Management. Philadelphia is the only market
exception. Philadelphia orders will contain both Equipment and services on 1
order which is sent from Sprint PCS to Order Management. (Sprint has agreed to a
24 hour turnaround from receipt of approved Purchase Requisition to transmittal
of P.O. to Sprint North Supply and Lucent Order Management.) NO ORDERS FROM
SPRINT PCS FIELD/REGIONAL PERSONNEL WILL BE ACCEPTED BY LUCENT ORDER MANAGEMENT.
Equipment Orders to: Services Orders to:
April Holtwick, Sprint North Supply Dave Widergren, Lucent Order Mgmt
Phone: 800-755-3032 Phone: 770-613-8060
Fax: 800-776-3953 Fax: 770-613-8068
Sprint North Supply forwards the Equipment Purchase Order to Lucent Order
Management: (Sprint North Supply has agreed to a 48 hour turnaround from receipt
of P.O. to transmission to Lucent Order Management.) Sprint North Supply will
forward the equipment purchase order to:
Dave Widergren, Lucent Order Management Phone: 771-613-8060 Fax: 8068
<PAGE>
Lucent Order Management confirms receipt of Equipment Orders and ship date
within 48 hours via notification to April Holtwick, Sprint North Supply. Lucent
Order Management confirms receipt of Services Orders within 48 hours via
notification to John Sorrentino, Sprint PCS Purchasing. Program Manager sends
the Market Template (contains Cascade Site ID & FPN numbers) to Lucent Order
Management. Order Management sends the Account Executive, Program Manager,
Sprint North Supply and Nancy Elpers a copy of the Order Tracking Spreadsheet
which contains all equipment and services order information as required.
MATERIAL SHIPPING
Lucent GPC (Columbus - James Mc Griff, Columbus Global Provisioning Center
(GPC), Warehouse/Shipping ) to provide 24 hour advance notice of material at
dock by notifying:
Sprint North Supply; Rod Bennett
800-243-4666 or 913-791-6571 Voice
913-791-7668 Fax
Office Hours 7am to 4:30 pm Central Time, Monday thru Friday.
Rod will schedule Transportation Carrier (North Star Trucking). If material is
not picked up by 6:00 PM on scheduled day by SNS Carrier, Lucent will make
arrangements with back-up carriers for delivery. The back-up carrier will
invoice Sprint North Supply directly for transportation charges.
Back up carrier identified are:
Yellow Freight, Consolidated Freightways (LTL less than truck load) CalArk,
Burlington Motors, USA Truce (TL truckload) Eagle USA, LEP Profit (middle of
night pickup/and or hot shot run)
Sprint PCS is responsible for all transportation costs.
No orders are to be shipped with shortages......whole order ship ONLY. If
shortage is identified AFTER NOTIFICATION TO ROD BENNET, Columbus is to notify
Rod Bennett immediately. Jeff Hatfield, Columbus Customer Service will be
responsible to notify James McGriff of any shortages.
The same process for shipping will apply to Power Cabinets shipped from Omaha
and Batteries shipped from Dallas. (for those products which are not part of a
configured order)
<PAGE>
INVOICING:
EQUIPMENT:
Lucent Asset Management Organization will generate invoice per the Contract
terms; FOB Origin - payable 30 days from invoice date. The invoice for equipment
orders will be sent to Sprint North Supply per instructions on the Purchase
Order. Invoice at ship, payable 30 days from invoice date.
Sprint North Supply and Sprint PCS require one invoice for each Purchase Order.
Combining invoices is not acceptable. Invoice amount will not exceed Purchase
Order amount.
No additional documentation need accompany the invoice.
Invoice Disputes: John Sorrentino, is the Dispute Contact for Sprint PCS.
816-559-6029 Voice
816-559-1555 Fax
SERVICES:
Including Commissioning, Boltdown, Transportation:
The Program Manager will send the "Acceptance Form" to Asset Management
East/Central to: (New York, Albany, Syracuse, Buffalo, Rochester, Manhattan,
BBQ) Bob Seelig Fax: 770-613-8113
(Philadelphia, Boston, Milwaukee, Pittsburgh, Toledo, New Hampshire/Maine,
Hartford, Detroit) Fax: 770-613-8813
West to: (Phoenix, Salt Lake City, Denver, Tucson)
Julie Collins Fax: 770-613-8113
(San Francisco, Seattle, Fresno, Spokane, Portland, Sacramento)
Krista Hawkins Fax 770-613-8813
Receipt of the Acceptance form will trigger the Services Invoice.
The invoice for service orders will be sent to Sprint PCS Accounts Payable per
instructions on the Purchase Order. A copy of the Acceptance form is to be
attached to the invoice.
CTSO/Optimization efforts - a FQP is to be provided to Sprint PCS Regional Team
and PR prepared and submitted to Kansas City Purchasing. A PO will be issued by
John Sorrentino and submitted to Lucent Order Management. When the project is
complete (or established billing intervals) and customer acceptance signature is
obtained, CTSO will establish final billing to customer. Asset Management will
issue invoice and send per instructions on the Purchase Order.
<PAGE>
Sprint PCS requires one invoice for each purchase order. Combining invoices is
not acceptable. Invoice amount will not exceed Purchase Order amount.
*Exception: Philadelphia - Equipment and Services will be ordered on the same
purchase order issued by Sprint PCS Purchasing. The invoicing as agreed to by
SPCS and Asset Management will be progressive billing.
SPCS Services Invoice Dispute Contacts:
Eastern Region: Gina Alfonso 201-512-4717 Voice
Western Region: Sonny Sharma 510-468-7823 Voice
It is the responsibility of the Account Executive to monitor all invoicing
activities and manage dispute resolution.
GUIDELINES:
The BTS Order Process is effective January 1, 1998.
New Prices and terms are effective January 1, 1998
All documents must match (Quote - Purchase Order - Packing Slip - Invoice)
(The quote will contain BTS Equipment, Installation Equipment, and Services
with subtotal provided. As Sprint PCS internal Tax requirements do not allow for
equipment and services to be on same PO, Sprint PCS Purchasing will split into
separate POs. Thus the guideline that all documents must be matched is
compromised, i.e. Quote to Invoice.)
Cascade Site ID, Sprint PCS Order Number and Sprint North Supply Order Number
will be included on Equipment Purchase Orders sent to Lucent Order Management.
Cascade Site ID and Sprint PCS Order Number will be included on Services
Purchase Orders sent to Lucent Order Management.
Terms: FOB Origin - i.e. Sprint is responsible for all transportation costs.
Risk of Loss and title transfers at the Lucent dock. Lucent responsibility ends
at dock.
Sprint is responsible for transportation, construction and bolt down. Sprint may
elect to have Lucent perform these responsibilities for additional compensation
as noted in the contract. Lucent is responsible for commissioning.
<PAGE>
A Purchase Order is required for ALL orders. This includes material priced less
than $2500 (example; miscellaneous cables, adaptors, etc.). Change Orders and
Supplemental Authorization for Work (SAWOs) are not acceptable. A PO is required
for all products and services. Construction management is optional per the
Contract Terms. (for sites other than the SPCS Grandfathered cell sites deployed
in 1997 - 2939 identified in contract Exhibit X)
Orders are based on a 3 ECU Sprint Engineering Standard. Deviation from the 3
ECU i.e.. 1 or 2 will be billed at the $131,000 price. Orders beyond the
standard 3 ECU model (i.e. 4, 5, 6, etc.) will be invoiced at an additional
$7,000 each.
BTS will ship from Columbus, Ohio *Power Cabinets will ship from Omaha, Neb.
*Batteries will ship from Mesquite, Texas or direct from supplier (*If part of a
configured order, i.e., will ship from Columbus with BTS order)
One quote will be generated by Lucent Field Engineer for each base station,
installation hardware and services. It will be the responsibility of Sprint PCS
to break out the appropriate items such as installation hardware and services if
needed onto separate Purchase Requisition and Purchase Orders. Sprint E&O
indicated they want BTS installation hardware shipped earlier than BTS
equipment, thus need for Sprint Purchasing to issue separate PO identifying Date
Required (ie ship date).
BTS interval is 4 weeks from order entry into Lucent Order Management System.
REQUIREMENTS FOR VENDOR SHIPMENT:
BTSWhole Order ship. (with exception of Power cabinets and batteries)
Packing lists to be attached to outside of each master carton which detail, by
line item all assets contained in each box.
Each box/pallet shall contain the appropriate Cascade Site ID number, Sprint and
North Supply Purchase Order number.
PRICING:
Pricing is identified in the Contract, Schedule 2 and 3.
Growth frames - $78,700 (if identified in Phase II contract Exhibit X as part of
1997 deployed BTS) Sprint PCS agrees to provide Lucent with the intended Base
Station site.
<PAGE>
Identification for all 2nd and 3rd carrier growth cabinets which will be placed
at any of the Phase I sites listed in Exhibit X. Sprint PCS agrees that this
site information will be required in order to purchase at the Phase I price of
$78,700 for 8W or $94,700 for 16W per growth cabinet (Schedule 2). Sprint PCS
agrees to provide Lucent twice each year an inventory of Lucents's manufactured
equipment at each of the Sprint PCS sites. This list will be used to insure all
growth cabinets placed at locations not listed in Exhibit X were purchased at
the $100,000 price. Any discrepancies will be mutually worked by both parties
and invoices will be corrected as appropriate.
<PAGE>
ATTACHMENT A
APL - APPROVED PRODUCTS LIST CHANGE PROCESS
Owners:
Lucent: Joe Sotak Sprint PCS: John Sorrentino
7500 College Blvd., Suite 1212 7900 College Blvd, 2nd F
Overland Park, Kansas 66210 Overland Park, Ks 66210
913-338-8904 voice 816-559-6209 voice
913-338-8888 fax 816-559-1555 fax
Step 1, Lucent Technologies issues the "Approved Products List Change Form" with
associated reason for change. This form is to be signed off by the appropriate
Lucent Technologies representative (J. Sotak or a delegate).
Step 2, Sprint PCS inputs the updates/changes into the Approved Products List
(APL) and the appropriate Sprint PCS representative (J. Sorrentino or delegate)
signs off and dates and returns "Approved Products List Change Form" and a
printout of the updated APL. Sprint PCS faxes back the form and APL to J. Sotak
Fax 913-338-8888.
Step 3, The Change Form will have an issue number and date. The Change form will
be attached to the updated APL printout to serve as a permanent record. Copies
will be retained by Sprint PCS (J. Sorrentino) and Lucent Technologies (J.
Sotak).
Step 4, Joe Sotak sends updates to Dave Widergren, Lucent Order Management and
the Eastern Region AE, Ed Wacienga and the Western Region AE, Dave Hemphill as
required. It is the AE's responsibility to inform the Field Engineers.
The APL does not contain all BTS spares due to the high level of maintenance
required. The APL is intended to control a majority of the high dollar value
purchases of BTS equipment made by Sprint PCS.
See Att APL Change Form
<PAGE>
ATTACHMENT B
SPRINT PCS CONTACTS:
PURCHASING & BTSEQUIPMENT SERVICE INVOICE DISPUTES:
INVOICE DISPUTES:
John Sorrentino Eastern Region: Gina Alfonso
816-559-6029 voice 201-512-4717 voice
816-559-1555 fax 201-512-4713 fax
7900 College Blvd. 2nd Ft. One International Blvd, Suite 800
Overland Park, Kansas 66210 Mahwah, NJ 07495
Western Region: Sonny Sharma
510-468-7823 voice
510-468-7923 fax
4683 Chabot Drive, Suite 100
Pleasanton, California 94588
SPRINT NORTH SUPPLY:
ORDER MANAGEMENT:
April Holtwick John Burgess
1-80-755-3032 voice 1-800-755-3032 voice
913-791-7124 fax 913-791-7124 fax
600 New Century Parkway 600 New Century Parkway
New Century, Kansas 66031 New Century, Kansas 66031
TRANSPORTATION: Main Warehouse:
Rod Bennett 500 Sumner Way
1-800-243-4666 voice New Century, Kansas 66031
913-791-6571 voice
913-791-7668 fax
600 New Century Parkway
New Century, Kansas 66031
<PAGE>
ATTACHMENT B
LUCENT CONTACTS:
ORDER MANAGEMENT:
Dave Widergren
770-613-8060 voice
770-613-8068 fax
22 Technology Pkwy, Suite 200
Norcross, Georgia 30092
INVOICING:
Ed Rivers Bob Seelig - East Region
770-613-8002 voice 770-613-8091 voice
770-613-8113 fax 770-613-8813 fax
22 Technology Pkwy, Suite 200
Norcross, Georgia 30092
Butch Hefner - East Region
770-613-8092 voice
770-613-8813 fax
Julie Collins - West Region
770-613-8093 voice
770-613-8813 fax
Krista Hawkins - West Region
770-613-8094 voice
770-613-8113 fax
PROCESS: APPROVED PRODUCT LIST
Nancy Elpers Joe Sotak
913-338-8838 voice 338-8857 fax 913-338-8904 voice 338-8888 fax
7500 College Blvd, Suite 1212 7500 College Blvd, Suite 1212
Overland Park, Kansas 66210 Overland Park, Kansas 66210
EASTERN REGION AE: WESTERN REGION AE:
Ed Wacienga Dave Hemphill
716-223-6334 voice 510-468-7835 voice
716-223-4830 fax 510-468-7830
COLUMBUS GPC
James McGriff, Warehouse/Shipping
614-860-3822
Jeff Hatfield, Customer Service
614-860-7962
<PAGE>
Exhibit K
LUCENT/SPRINT PCS BTS ORDER PROCESS
Exhibit K is a flowchart diagram showing the processes by which Sprint Spectrum
Equipment Company, L.P. orders equipment from Lucent Technologies, Inc. and
Lucent Technologies, Inc., in turn, generates an invoice to send to Sprint
Spectrum Equipment Company, L.P. The exhibit lists the names, addresses and
telephone numbers of contact persons at both Sprint Spectrum L.P. and Lucent
Technologies Inc.
Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
PCS SOFTWARE LICENSE AND PURCHASE AGREEMENT
This Agreement ("Agreement") is entered into between Sprint Spectrum
Equipment Company, L.P., a Delaware limited partnership ("Owner") and Lucent
Technologies Inc., a Delaware corporation ("Vendor").
RECITALS
WHEREAS, the Owner and the Vendor entered into a Procurement and
Services Contract dated as of January 31, 1996, as the same may be amended,
restated, supplemented or otherwise modified from time to time (the "Contract"),
and
WHEREAS, the Owner desires to obtain a fully paid-up license for
Vendor's 1996 optional features software (defined below as Licensed Software),
pursuant to the terms and conditions and prices set forth herein.
NOW, THEREFORE, in consideration of the mutual promises herein, the
parties agree as follows:
1. SCOPE
1.1. This Agreement including Exhibits A, B and C as attached hereto
and incorporated herein by reference, sets forth the terms and conditions,
prices and payment schedule under which the Vendor agrees to license Licensed
Software, as defined herein, for use on all of the PCS Products purchased from
the Vendor and used in the Owner's Nationwide Network.
1.2. All the terms and conditions of the Contract are hereby
incorporated by reference into this Agreement, except as expressly modified or
supplemented herein. Any such modifications or supplements shall apply to this
Agreement only and shall not apply to any other agreement unless so provided for
therein. In the event of a conflict between the terms and conditions of this
Agreement and the Contract, the Contract shall prevail.
1.3. For purposes of the Vendor financing with the Owner's parent, the
Vendor expressly agrees that all payments made or to be made hereunder will be
covered by such Vendor financing as if such payments were made under the
Contract.
2. DEFINITIONS
2.1. "Licensed Software" means all optional software features for PCS
Products made generally available to Customers in 1996 on an optional, separate
fee, basis. A current list of these features is set forth on Exhibit A hereto.
2.2. "Initial Application" means the initial configuration to be
deployed in Fresno, California consisting of one (1) switch and the number of
base stations within the Initial Application which are available for testing of
the Licensed Software on the date Vendor is ready to commence testing pursuant
to Section 5.1.
2.3. "Initial Application Verification" means the tests set forth on
Exhibit C hereto.
2.4. "Initial Application Verification Test Plan" means the test plan
set forth on Exhibit C hereto.
All other capitalized terms shall have the meanings set forth herein or
as defined in the Contract.
3. SOFTWARE LICENSE
Upon delivery of the Licensed Software, the Vendor grants to the Owner
a perpetual, nontransferable, non-exclusive fully paid-up (i.e., buyout),
multi-site (capability to have deployed Licensed Software in any number of
sites) right to use license for the Licensed Software ("License") for use on the
Products purchased from the Vendor provided in each of the systems and the
System as a whole, subject to payment of license fees set forth on Exhibit B.
The Licensed Software will at all times throughout the term perform in
accordance with the Specifications.
4. ORDER AND DELIVERY OF LICENSED SOFTWARE
4.1. The Owner agrees that the execution of this Agreement shall be
deemed an order for the Licensed Software for its Initial Application.
4.2. The Vendor agrees to deliver and install the Licensed Software
for the Owner's Initial Application as soon as possible, but, in any event, no
later than October 30, 1996.
5. ACCEPTANCE
5.1. The Owner and the Vendor agree that acceptance testing in
accordance with Exhibit C of the Initial Application for Licensed Software will
commence on the date of the installation of the Licensed Software or October 30,
1996, whichever is later. The period for acceptance testing will run for no
longer than the thirty (30) day period after commencement of acceptance testing.
The Owner will accept or reject the Licensed Software within such thirty (30)
day period unless the parties mutually agree that the Licensed Software has met
the acceptance tests prior thereto. If the Owner does not provide a notice of
rejection, then the Licensed Software will be deemed to have been accepted at
the end of the thirty (30) day acceptance period; provided that any such
acceptance will in no way limit the Vendor's warranty or other obligations under
this Agreement and/or the Contract. If prior to Owner acceptance, the Owner
notifies the Vendor of a Defect in the Licensed Software, then the thirty (30)
day acceptance period will be extended day-for-day until the Vendor has
corrected the Defect.
5.2. Minor Defects and shortcomings not affecting the operational use
of the part of the Licensed Software shall not give rise to withholding
acceptance provided that the Vendor undertakes to remedy such defects and
shortcomings as soon as reasonably possible.
5.3. The Owner and the Vendor further agree that the Owner's acceptance
of the Licensed Software for the Owner's Initial Application shall be deemed
acceptance of the Licensed Software by the Owner for deployment of the Licensed
Software in its Nationwide Network; provided that nothing herein will limit or
otherwise modify the Vendor's warranty and other obligations hereunder.
6. INTELLECTUAL PROPERTY
Without limiting the generality of Section 1.2, all of the Software and
Intellectual Property provisions of the Contract shall apply to the Licensed
Software provided herein.
7. WARRANTY
Without limiting the generality of Section 1.2, all of the warranty
provisions of the Contract shall apply to the Licensed Software provided herein.
8. INVOICE PAYMENTS
The Vendor will invoice the Owner for the full amounts shown in Exhibit
B on the dates set forth therein. The Owner will pay such invoiced amounts
within thirty (30) days of the receipt of any such invoices. The Vendor
understands and agrees that amounts owed and invoiced in accordance with the
terms of this Agreement, may be credited, at the Owner's option, against the
Vendor's financing facilities pursuant to and in accordance with the terms of
those facilities.
9. NOTICES
Any notice, request, consent, waiver or other communication required or
permitted under this Agreement will be effective only if it is in writing and
personally delivered by hand or by overnight courier or sent by certified or
registered mail, postage prepaid, return receipt requested, addressed as
follows:
If to the Owner: Sprint Spectrum Equipment Company, L.P.
c/o Sprint Spectrum L.P.
4900 Main Street
Kansas City, Missouri 64112
Attention: Director, Program Management
If to the Vendor: Lucent Technologies Inc.
111 Madison Avenue
Morristown, New Jersey 07962-1970
Attention: William K. Nelson
10. AGREEMENT
10.1. Except as otherwise stated herein, this Agreement, together with
all incorporated documents, constitutes the entire Agreement with regard to the
subject matter herein between the Parties.
10.2. Any amendment, modification or supplemental agreement shall only
be binding after its effective date, provided that such amendment, modification
or supplemental agreement is in writing and signed by an authorized
representative of each Party.
10.3. Any material and continuing breach of the terms of this Agreement
by the Vendor will constitute a material breach of an/or a Vendor Event of
Default under the Contract. The Owner and the Vendor expressly understand and
agree that any slip or delay in the availability of any feature(s) set forth on
Exhibit A in excess of sixty (60) days beyond the dates applicable for such
feature(s) as set forth on Exhibit A will constitute a "material and continuing
beach" by the Vendor under this Agreement.
10.4. This Agreement will be construed in accordance with and governed
by the laws of the State of New York without regard to any laws and principles
thereof which would direct the application of the laws of another jurisdiction.
11. SIGNATURES
This Agreement may be executed in any number of identical counterparts,
each of which will constitute an original but all of which when taken together
will constitute one contract.
IN WITNESS WHEREOF, the Parties have caused this agreement to be
executed by their duly authorized officers or representatives, to be effective
when each party has executed this Agreement.
Lucent Technologies Inc.
Signature: /s/ William K. Nelson
Name: William K. Nelson
Title: Vice President
Date: 10/7/96
Sprint Spectrum Equipment Company, L.P.
Signature: /s/ A.A. Kurtze
Name: A. Kurtze
Title: Chief Technology Officer
Date: October 8, 1996
<PAGE>
EXHIBIT A
1996 OPTIONAL FEATURES SOFTWARE
CDMA Software Feature by Release
- - --------------------------------------- -------------------- -----------------
CDMA CDMA
Feature Name Release Availability
- - --------------------------------------- -------------------- -----------------
[ ]
<PAGE>
- - ------------------------------------------------------------------------------
EXHIBIT B
- - ------------------------------------------------------------------------------
All Vendor Optional Features Software made generally available for PCS
Products in 1996 (Exhibit A) will be licensed to the Owner for a total price of
________________________ Dollars ($_______.00). This package price does not
include features provided on peripheral equipment, i.e., HLR, SCP, SCN,
Actiview, etc.
Invoice Schedule
_________ (__) Days After Owner Acceptance of Licensed Software $__________
_________ (__) Days following First Invoice of Licensed Software
or _________ (__) Days after Substantial Completion
of the Initial PCS System, whichever is earlier $__________
All new Vendor Optional Software Features made generally available
starting on January 1, 1998 will receive a _______ percent (___%) discount off
the then current List Price. For non-Vendor manufactured equipment, the discount
for new Optional Software Features will be _______ percent (___%) off the then
current List Price.
<PAGE>
EXHIBIT C
Initial Application Verification Test Plan
[ ]
Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
PROCUREMENT AND SERVICES CONTRACT
---------------------------------
between
MAJORCO L.P.,
Owner
and
NORTHERN TELECOM INC.,
Vendor
Dated as of January 31, 1996
<PAGE>
PROCUREMENT AND SERVICES CONTRACT
---------------------------------
This Procurement and Services Contract (the "Contract") is made and is
effective as of January 31, 1996 (the "Effective Date"), by and between MajorCo
L.P., a Delaware limited partnership (the "Owner"), and Northern Telecom Inc., a
Delaware corporation (the "Vendor" and, together with the Owner, the "Parties").
RECITALS:
--------
A. The Federal Communications Commission (the "FCC") granted to the
Owner or certain of its Affiliates (as defined below) personal communications
services licenses (the "PCS FCC Licenses") to build and operate PCS Systems (as
defined below) in specified geographic areas in the United States;
B. The Owner desires to have the Vendor engineer and construct PCS
Systems in the geographic areas specified on Schedule 4 (collectively, the
"System Areas") pursuant to the terms of this Contract;
C. The Vendor, itself or through its Subcontractors (as defined
below), desires to provide Products (as defined below) and Services (as defined
below) to the Owner in connection with the engineering and construction of PCS
Systems in the System Areas, including, but not limited to, the Vendor's
obligation to engineer, equip, install, build, test and service an operating PCS
System in each System Area in accordance with the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth in this Contract, the Owner and the Vendor hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Definitions. In addition to the terms listed below, certain
-----------
additional terms are defined in Schedule 1 and in the Exhibits, subject to the
provisions of subsection 1.2 hereof. As used in this Contract, the following
terms have the following meanings:
"AAA" means the American Arbitration Association.
---
"Acceptance Certificates" means the collective reference to the
-----------------------
Factory Test Certificate, the Initial PCS System Certificate, the Substantial
Completion Certificate and the Final Acceptance Certificate.
"Acceptance Tests" means the collective reference to the performance
----------------
and reliability demonstrations and tests specified in Exhibits B1, B2 and B3 to
determine whether the Products, the Services, any of the PCS Systems and/or the
System meet the Specifications and the terms and conditions of this Contract.
<PAGE>
2
"Additional Affiliate Agreement" has the meaning ascribed thereto in
------------------------------
subsection 3.3.
"Additional Affiliate Arrangement" means a formal arrangement in
--------------------------------
connection with the Owner's build-out of the Nationwide Network between the
Owner and a Person to be designated an Additional Affiliate under the terms of
this Contract which arrangement must include agreements on marketing and any of
one or more of the following characteristics: backhaul, billing systems, resale
agreements (other than or in addition to marketing agreements) and/or revenue
sharing. In any event, the Parties understand that roaming agreements and/or
arrangements alone will not constitute an Additional Affiliate Arrangement
unless at least one of the other characteristics listed above (other than or in
addition to marketing agreements) is also made a part of any such agreement
and/or arrangement.
"Additional Affiliate" has the meaning ascribed thereto in
--------------------
subsection 3.1.
"Affiliates" means the collective reference to the Initial
----------
Affiliates and the Additional Affiliates.
"ANSI" means the American National Standards Institute.
----
"APC" means American PCS, L.P., a Delaware limited partnership.
---
"Applicable Laws" means, as to any Person, the certificate of
---------------
incorporation and by-laws or other organizational or governing documents of such
Person, all North American or foreign laws (including, but not limited to,
Environmental Laws), treaties, ordinances, judgments, decrees, injunctions,
writs, orders and stipulations of any court, arbitrator or governmental agency
or authority and statutes, rules, regulations, orders and interpretations
thereof of any federal, state, provincial, county, municipal, regional,
environmental or other Governmental Entity, instrumentality, agency, authority,
court or other body (i) applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject or (ii)
having jurisdiction over a or any part of any PCS System, the System or the Work
to be performed pursuant to the terms of this Contract.
"Applicable Permits" means any waiver, exemption, zoning, building,
------------------
variance, franchise, permit, authorization, approval, license or similar order
of or from any North American or foreign, federal, state, provincial, county,
municipal, regional, environmental or other governmental body, instrumentality,
agency, authority, court or other body having jurisdiction over all or any part
of any PCS System, the System or the Work to be performed pursuant to the terms
of this Contract.
"Backwards Compatibility" or "Backwards Compatible" means that any
-------------------------------------------------
referenced prior Software Revision Level or Levels of the applicable Software
and any referenced prior Equipment Revision Level or Levels of the applicable
Equipment, as the case may be, remain fully functional in accordance with and up
to the performance levels to which it was performing immediately prior to any
such enhancement and/or revision after the
<PAGE>
3
integration with the succeeding Software Revision Level or Equipment Revision
Level, as the case may be, and that after such integration such prior Software
Revision Level or Equipment Revision Level loses no functionality and such
succeeding Software Revision Level or Equipment Revision Level interoperates
with all such functionalities of such prior Software Revision Level or Equipment
Revision Level.
"Base Station ("BTS")" means the radio subsystem that handles the
--------------------
Owner's PCS radio traffic in a designated cell. The Base Station includes all
amplification, modulation, synchronization and other circuitry required to
process a radio signal. The inputs to a Base Station are a landline signal
(e.g. T1) and the radio signal that is fed into antenna lines.
"Building Ready Date" has the meaning ascribed thereto in subsection
-------------------
2.5.
"Cable Microcell Integrator ("CMI")" means a form of cable microcell
----------------------------------
integrator that provides for transportation of wireless communication signals
over a cable TV distribution plant. The CMI takes certain signals from the
cable TV distribution plant (the "cable PCS band or bands") and suitably
heterodynes, filters and amplifies these signals such that they can be radiated
by a CMI antenna or antennas in the designated PCS band to PCS wireless
handsets. The CMI takes signals received from the PCS wireless handsets from
one or more CMI receiving antennas and suitably heterodynes, filters and
amplifies these signals for transportation by the cable TV distribution plant to
a Headend Interface Converter or Distributive Cable Access Provider ("DCAP") at
a PCS Base Station. Additionally, the CMI unit responds to control signaling
and provides status signals. The CMI is normally collocated with the cable TV
distribution plant and takes power from the cable plant.
"CDMA" means code division multiple access as specified in ANSI-J-
----
STD-008.
"Change Orders" has the meaning ascribed thereto in subsection 7.3.
-------------
"Civil Work" means the labor and materials necessary in the
----------
performance of demolition, construction and renovation work (e.g., roads,
grading, fencing and structural improvements, including, but not limited to, any
buildings and towers) in order to construct a System Element Facility in
accordance with Exhibit E.
"Completion Cure Period" has the meaning ascribed thereto in
----------------------
subsection 15.3.
"Configuration Engineering" means the engineering required to
-------------------------
establish System Element configuration including, without limitation, preparing
component, inventory and layout drawings, Equipment labels, cable tray layout
drawings, and "as-built" drawings and Documentation. Configuration Engineering
also includes the design, power distribution and supply for each of the System
Elements.
"Continental" means Continental Cablevision, Inc.
-----------
<PAGE>
4
"Contract" has the meaning ascribed thereto in the prefatory
--------
paragraph to this Contract.
"Contract Documents" means this Contract and all of the Exhibits and
------------------
Schedules attached hereto.
"Contract Price" has the meaning ascribed thereto in subsection 6.1.
--------------
"CSR" has the meaning ascribed thereto in subsection 2.26.2.
---
"Customer" means any CDMA 1900 customer doing business in North
--------
America of the Vendor or any CDMA 1900 customer doing business in North America
of any of the Vendor's affiliates or subsidiaries.
"Custom Material" has the meaning ascribed thereto in subsection
---------------
11.10.1.
"Defects and Deficiencies," "Defects or Deficiencies" or "Defective""
-------------------------------------------------------------------
means any one or a combination of the following or items of a similar nature:
(a) when used with respect to the performance of labor or service items
of Work (including any work by any Subcontractor), such items that are not
provided in a workmanlike manner and in accordance with the standards and/or
Specifications set forth herein;
(b) when used with respect to structures, materials, Equipment and
Software items of Work (including any Work by any Subcontractor), such items
that are not (i) new and of good quality and free from improper workmanship and
defects in accordance with the standards set forth herein and standards of good
procurement, manufacturing and construction standards, or (ii) free from errors
and omissions in design or engineering services in light of such standards; or
(c) in general, (i) Work (including any Work by any Subcontractor) that
does not conform to the Specifications and/or requirements of this Contract,
(ii) Work (including any Work by any Subcontractor) that is not free from
excessive corrosion or erosion or (iii) any design, engineering, start-up
activities, materials, Equipment, Software, tools, supplies, Installation or
Training that (1) does not conform to the standards and/or Specifications set
forth herein, (2) has improper or inferior workmanship, (3) would materially and
adversely affect the ability of the System and/or any PCS System and/or any
material part thereof to meet the performance criteria specified in Exhibit F on
a consistent and reliable basis or (4) would materially and adversely affect the
continuous operation of the System and/or any PCS System or any material part
thereof.
"Discontinued Products" has the meaning ascribed thereto in
---------------------
subsection 10.2.
<PAGE>
5
"Documentation" means the documentation for the System and/or any
-------------
PCS System and/or any material part thereof.
"Effective Date" has the meaning ascribed thereto in the prefatory
--------------
paragraph to this Contract.
"E1 Emergency Condition ("E1")" has the meaning ascribed thereto in
-----------------------------
subsection 2.26.3.
"E2 Emergency Condition ("E2")" has the meaning ascribed thereto in
-----------------------------
subsection 2.26.3.
"Emergency Technical Assistance ("ETA")" means the provision of
--------------------------------------
emergency technical assistance to the Owner for the purpose of diagnosing and
resolving a problem which adversely affects the System and/or any PCS System
and/or a material part thereof, its operation and/or its service pursuant to and
in connection with subsection 2.26.3.
"Engineer" means the engineer or engineers appointed from time to time
--------
by the Owner to do certain work and/or inspections and reviews on behalf of the
Owner and/or provide advice or information to the Owner in connection with the
System and/or any PCS System and/or any part thereof.
"Engineering" means all of the engineering required to be done by the
-----------
Vendor to complete the System in accordance with the Specifications including,
but not limited to, RF Engineering, Configuration Engineering, Network
Interconnection Engineering and Facilities Engineering done in accordance with
the Specifications and the CDMA standards.
"Engineering Warranty Period" has the meaning ascribed thereto in
---------------------------
subsection 17.3.
"Environmental Laws" means any and all North American and foreign,
------------------
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Entity, or
requirements of law (including, without limitation, common law) relating in any
manner to contamination, pollution, or protection of human health or the
environment, as now or may at any time hereafter be in effect.
"Equipment" means all equipment, hardware and other items of personal
---------
property which are required to construct and operate the System and/or any PCS
System and/or any part thereof in accordance with the Specifications including,
without limitation, additional equipment required as a result of the expansion
or additional coverage required pursuant to subsection 2.2 and the equipment
listed on Exhibit D or on Schedule 7 (parts A and B).
"Equipment Combined Release" has the meaning ascribed thereto in
--------------------------
subsection 13.1.
<PAGE>
6
"Equipment Enhancements" means modifications or improvements made to
----------------------
the Equipment which improve performance or capacity of the Equipment.
"Equipment Revision Level" means each version of an Item of Equipment
------------------------
that reflects any modification or change from the immediately preceding version
of such Item of Equipment.
"Equipment Upgrade" means a change or modification in any Equipment
-----------------
which fixes or otherwise corrects faults, design shortcomings or shortcomings in
meeting the Specifications, or failure rates, or in any such case, that is
necessary to enable performance in accordance with the most current version of
the Equipment (which may be referred to by the Vendor as "class A changes").
"Escrow Agreement" has the meaning ascribed thereto in subsection
----------------
11.8.
"Exchange Act" has the meaning ascribed thereto in subsection 27.22.
------------
"Expansions" means any additional Products or Services resulting from
----------
a modification by the Owner to the Specifications, the performance criteria set
forth in Exhibit F or the Project Milestones set forth on Exhibit A resulting in
a change to the System and/or any PCS System and/or any material part thereof,
including, but not limited to, the extension or expansion of the System and/or
any PCS System (i) into geographic areas outside of the System Areas covered by
the PCS Systems identified in Schedule 4, or (ii) to increase capacity and/or
performance of the System and/or any PCS System beyond the performance criteria
and/or Specifications originally contemplated herein. Expansions will not
include any additional Products or Services required to meet the Specifications
applicable to the Initial System.
"Extraordinary Transportation" means the Vendor's or its
----------------------------
Subcontractors' transport of Products and/or other materials pursuant to the
terms of this Contract where the circumstances of such transport require the
Vendor to use any one or a combination of the following extraordinary means of
transport and/or extraordinary methods of achieving access to the Owner's
facilities: (i) four-wheel drive vehicle (other than those typically used for
the delivery of Equipment), (ii) helicopter, (iii) boat, (iv) airplane, (v)
bulldozer, (vi) clear physical obstructions requiring the building of a new road
by the Vendor or its Subcontractors or (vii) a construction crane.
"Facilities Engineering" means the engineering required to design each
----------------------
System Element Facility including, without limitation pursuant to and as
required by Exhibit E and Exhibit B2, building layout, drawings and relevant
Specifications for the construction of the buildings, towers, generators, cable
and antennae and all other items required to make the System Element Facility
functional. Facilities Engineering does not include Configuration Engineering.
"Facilities Preparation Services" means all Facilities Engineering,
-------------------------------
Civil Work, Site Plan Architectural Work, Structural Architectural Work, and
Utilities Work, all of
<PAGE>
7
which must be performed in accordance with the Specifications. Facility
Preparation Services does not include Site Acquisition or Microwave Relocation.
"Facilities Preparation Services Warranty Period" has the meaning
-----------------------------------------------
ascribed thereto in subsection 17.3(c).
"Factory Test Certificate" means a document submitted by the Vendor to
------------------------
the Owner and signed by an authorized representative of the Owner and an
authorized officer of the Vendor stating that in accordance with the
requirements of Exhibit B3 and this Contract the Vendor has successfully
completed all factory tests on the Products in accordance with the requirements
of Exhibit B3 and this Contract.
"FCC" has the meaning ascribed thereto in the recitals to this
---
Contract.
"Final Acceptance" means, as to any PCS System, the successful
----------------
completion by the Vendor of all of the final acceptance tests and requirements
applicable to such PCS System set forth in Exhibit B3 in accordance with the
requirements of Exhibit B3 and the terms of this Contract.
"Final Acceptance Certificate" means a document submitted by the
----------------------------
Vendor to the Owner and signed by an authorized officer of the Vendor stating
that the Vendor has successfully completed the Final Acceptance Acceptance Tests
applicable to the relevant PCS System in accordance with the requirements of
Exhibit B3.
"Final RF Engineering Plan" has the meaning ascribed thereto in
-------------------------
subsection 2.6.
"Final RF Review Period" has the meaning ascribed thereto in
----------------------
subsection 2.6.
"Final Site Count" has the meaning ascribed thereto in subsection
----------------
2.6.
"Financing Interim Period" has the meaning ascribed thereto in
------------------------
subsection 24.9.
"Force Majeure" means the following:
-------------
(a) Acts of God, epidemic, earthquake, landslide, lightning, fire,
explosion, accident, tornado, drought, flood, hurricane, or extraordinary
weather conditions more severe than those normally and typically
experienced in the affected geographic area constituted by each of the
specified System Areas in which the Vendor is seeking to claim Contract
suspension due to Force Majeure;
(b) Acts of a public enemy, war (declared or undeclared), blockade,
insurrection, riot or civil disturbance, sabotage, quarantine, or any
exercise of the police power by or on behalf of any public entity;
<PAGE>
8
(c) (i) The valid order, judgment or other act of any federal, state or
local court, administrative agency, Governmental Entity or authority
issued after the Effective Date; (ii) with respect to the Vendor, the
suspension, termination, interruption, denial or failure of or delay in
renewal or issuance of any Applicable Permit required by this Contract to
be obtained by the Owner; (iii) with respect to the Owner, the
suspension, termination, interruption, denial or failure of or delay in
renewal or issuance of any Applicable Permit required by this Contract to
be obtained by the Vendor; or (iv) a change in law; provided that no such
-------- ----
order, judgment, act, event or change is the result of the action or
inaction of, or breach of this Contract by, the Party relying thereon;
(d) Strikes, boycotts or lockouts, except for any such strike,
boycott or lockout involving the employees of the Vendor or the employees
of a material Subcontractor;
(e) A partial or entire delay or failure of utilities; or
transportation embargoes; or
(f) The presence of (i) any Hazardous Waste on or at any System
Element Location which materially interferes with the Work to be done
thereon or otherwise materially endangers the safety of any personnel at
such location; (ii) any unknown historical or archeological sites which
are not shown or indicated in the survey of any System Element Locations
and of which the Vendor could not have reasonably been expected to be
aware; or (iii) any mining or water recovery activities (other than such
activities by the Vendor or its Subcontractors) at or under any System
Element Location after the Effective Date.
Events of Force Majeure include the failure of a Subcontractor to
furnish labor, services, materials, or equipment in accordance with its
contractual obligations, only if such failure is itself due to an event of Force
Majeure. A Force Majeure does not include any delay in performance to the
extent due to the failure of the Vendor or any Subcontractor to provide an
adequate number of engineers or other workmen or to manufacture or procure an
adequate amount of Equipment, Software and/or Services.
"Friable Asbestos" has the meaning ascribed thereto in subsection
----------------
20.4.
"Governmental Entity" means any nation or government, any state,
-------------------
province or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranteed Substantial Completion Date" means the date which is
--------------------------------------
defined in Exhibit A as "Milestone M8" as such date may be delayed for the Non-
Designated System Areas pursuant to subsection 2.7(b) and any other System Area
pursuant to subsection 15.4(c).
"Hazardous Waste" means any and all hazardous or toxic substances,
---------------
wastes, materials or chemicals, petroleum (including crude oil or any fraction
thereof) and petroleum
<PAGE>
9
products, asbestos and asbestos-containing materials, pollutants, contaminants,
polychlorinated biphenyls and any and all other materials or substances,
regulated pursuant to any Environmental Laws or that could result in the
imposition of liability under any Environmental Laws.
"Headend Interface Converter ("HIC")" means a form of CMI that
-----------------------------------
provides for transportation of wireless communication signals over a cable TV
distribution plant. The HIC takes signals from the PCS Base Station transmitter
and suitably heterodynes, filters and amplifies these signals for processing by
the PCS Base Station receiver. Additionally, the HIC provides reference and
control signals to the CMI units and receives and processes status signals from
the CMI unit.
"Independent Auditor" means any of the Persons set forth on Schedule
-------------------
15 or any Person mutually agreeable to the Parties.
"Indemnitees" has the meaning ascribed thereto in subsection 20.1.
-----------
"Initial Affiliates" means the collective reference to each of the
------------------
Persons set forth on Schedule 5.
"Initial Affiliate Agreement" has the meaning ascribed thereto in
---------------------------
subsection 3.2.
"Initial Commitment" has the meaning ascribed thereto in subsection
------------------
7.1.
"Initial PCS System" means that PCS System, or a portion thereof,
------------------
designated by the Owner within one hundred twenty (120) days of the Effective
Date as the Initial PCS System in which Substantial Completion must take place
in accordance with the terms of Exhibit B3 prior to and as a condition of the
Owner's acceptance of Substantial Completion of any other PCS System within the
Initial System; provided that at any time after the designation of the Initial
-------- ----
PCS System prior to the Substantial Completion of the first PCS System within
the Initial System the Parties may mutually agree to change the designation of
the Initial PCS System.
"Initial PCS System Certificate" means a document submitted by the
------------------------------
Vendor to the Owner and signed by an authorized representative of the Owner and
an authorized officer of the Vendor stating that the Vendor has successfully
completed the Acceptance Tests applicable to the Initial PCS System in
accordance with the requirements of Exhibit B3.
"Initial System" means the build-out of that portion of the System
--------------
Areas as shown on Schedule 4 prior to any Expansions or Owner requests for
additional coverage for such System Areas pursuant to the terms of this
Contract.
"Initial Term" has the meaning ascribed thereto in subsection 5.1.
------------
<PAGE>
10
"In Revenue Service" means the commercial operation of any PCS System,
------------------
or a portion thereof, exclusive of operation for purposes of conducting
Acceptance Tests; provided that In Revenue Service will not by itself constitute
-------- ----
acceptance of any such PCS System or any portion thereof.
"Inspector" means a qualified Person designated as an authorized
---------
representative of the Owner assigned to make all necessary inspections of the
Work, or of the labor, materials and equipment furnished or being furnished by
the Vendor or any of its Subcontractors at the System Element Locations and the
other sites where the Vendor or any Subcontractor is prosecuting the Work,
subject to appropriate safety, security and confidentiality requirements.
"Installation" means the performance and supervision by the Vendor of
------------
all installation of Products within the System and/or any PCS System.
"Intellectual Property Rights" has the meaning ascribed thereto in
----------------------------
subsection 14.2.
"Interim Delay Penalty" has the meaning ascribed thereto in
---------------------
subsection 15.2.
"Interim Milestone" has the meaning ascribed thereto in subsection
-----------------
15.2.
"Interoperability" means (i) the ability of the System and/or any PCS
----------------
System and/or any material part thereof to interconnect and successfully operate
with the equipment and software of other Systems and/or PCS Systems and/or any
material part thereof of the Vendor and/or the Other Vendors and/or other
suppliers whose equipment and software also meet the relevant ANSI standards and
other Specifications identified in Exhibit D and (ii) the ability of each of the
Products to operate with one another and to operate with and within the System,
including, but not limited to, the ability of the handsets (to be delivered
pursuant to subsection 2.3) to operate with and within the System, all in
accordance with the Specifications. Since certain sections of the ANSI
standards are currently undefined, and certain sections are left available for
independent development by suppliers, the potential for such interoperability or
incompatibility with properly designed systems exists, and must be resolved by
the Vendor or any Subcontractor providing PCS Systems to the Vendor in
accordance with the terms hereof.
"Item" means any item at any time listed in any of the Vendor's price
----
lists and it specifically includes, without limitation, all Software Upgrades,
Software Enhancements, Equipment Upgrades, Equipment Enhancements and
modifications, enhancements, updates or other revisions of any kind in any such
item, spare parts with respect to any of the foregoing and any other PCS/CDMA
related item.
"Late Completion Payment Cap" has the meaning ascribed thereto in
---------------------------
subsection 15.3.
<PAGE>
11
"Late Completion Payments" has the meaning ascribed thereto in
------------------------
subsection 15.3.
"Liabilities" has the meaning ascribed thereto in subsection 20.1.
-----------
"Liquidated Damages" has the meaning ascribed thereto in subsection
------------------
15.1.
"Maintenance and Instruction Manuals" means the manuals prepared by
-----------------------------------
the Vendor and delivered to the Owner pursuant to subsection 2.21 containing
detailed procedures and specifications for the ongoing maintenance of the
System.
"Major Portion" of the Work means a segregated portion of the Work
-------------
with a cost of ten million dollars ($10,000,000) or more.
"MFC Certificate" has the meaning ascribed thereto in subsection
---------------
26.1.
"Microwave Delay Period" has the meaning ascribed thereto in
----------------------
subsection 2.37.
"Microwave Relocation" means the process by which incumbent point to
--------------------
point microwave users of the 1850 - 1990 Mhz frequency spectrum are moved to
other frequencies or alternate transmission facilities in order to clear the
licensed PCS spectrum for broadband wireless service.
"Microwave Relocation Completion" means, with respect to any given PCS
-------------------------------
System, the point at which the Owner will have finished sufficient Microwave
Relocation in such PCS System to permit the commercially viable and marketable
operation of such PCS System in accordance with the terms of this Contract.
"Minimum Commitment" has the meaning ascribed thereto in subsection
------------------
7.2.
"Nationwide Network" means all of the PCS Systems built or to be owned
------------------
and/or operated by the Owner or its Affiliates in North America.
"NDAB" means the New Development Advisory Board established pursuant
----
to the terms of this Contract including subsections 2.11, 2.31 and 2.32.
"Net Price" means the final price paid by any Customer after all
---------
discounts, reductions, rebates, volume discounts or adjustments of any kind are
applied, whether under the original contract of purchase, as it may be amended,
supplemented or otherwise modified from time to time, or any supplemental,
separate, or complimentary transaction.
"Network Interconnection" means the transmission linkage between Base
-----------------------
Stations and MSCs and between MSCs and PSTNs but does not include Network
Interconnection Engineering. Typically T1 transmission links are used for
connectivity.
<PAGE>
12
"Network Interconnection Engineering" means the traffic engineering
-----------------------------------
among all System Elements within the System.
"NewTelCo" means NewTelCo. L.P., a Delaware limited partnership.
--------
"Non-Designated System Areas" means the collective reference to the
----------------------------
four System Areas not set forth in the notice provided to the Vendor by the
Owner pursuant to subsection 15.4(c).
"Non-Essential Equipment" means all Equipment listed on part B of
-----------------------
Schedule 7.
"Non-Essential Equipment Warranty Period" has the meaning ascribed
---------------------------------------
thereto in subsection 17.2.
"North America" means the United States, Canada (including the
-------------
Province of Quebec) and Mexico.
"Notice to Proceed" means a written notice given by the Owner to the
-----------------
Vendor in the form attached hereto as Schedule 9 and in compliance with the
provisions of this Contract, fixing the date on which the Vendor will have the
full right, in accordance with the terms of this Contract, and the full
obligation, subject to the terms of this Contract, to commence the Work to be
performed under this Contract.
"Notice to Proceed Date" means the date on which any Notice to Proceed
----------------------
is issued by the Owner in accordance with the terms of this Contract.
"OCC" has the meaning ascribed thereto in subsection 2.26.2.
---
"OM&P" has the meaning ascribed thereto in subsection 2.23.
----
"Operating Manuals" means the manuals to be prepared by the Vendor and
-----------------
delivered to the Owner pursuant to subsections 2.20, 2.22 and 2.23 containing
detailed procedures and specifications for the operation of the System and/or
any part thereof.
"Operative" has the meaning ascribed thereto in subsection 27.26.
---------
"Other Vendors" means vendors, other than the Vendor, with whom the
-------------
Owner has entered, or may enter in the future, into a contract for the provision
of products and services for the engineering and construction of any portion of
the Nationwide Network. Other Vendors does not include any Subcontractors in
connection with the Work to be performed under this Contract in their capacity
as Subcontractors.
"Outage" has the meaning ascribed thereto in subsection 17.5.
------
<PAGE>
13
"Owner" has the meaning ascribed thereto in the prefatory paragraph
-----
to this Contract.
"Owner Loss" means an insured loss incurred by the Owner relating to
----------
the System.
"Owner's Succeeding Entity" has the meaning ascribed thereto in
-------------------------
subsection 27.23.
"Parties" has the meaning ascribed thereto in the prefatory
-------
paragraph to this Contract.
"P1 Major Condition ("P1")" has the meaning ascribed thereto in
-------------------------
subsection 2.26.3.
"P2 Significant Problem ("P2")" has the meaning ascribed thereto in
-----------------------------
subsection 2.26.3.
"P3 Minor Problem ("P3")" has the meaning ascribed thereto in
-----------------------
subsection 2.26.3.
"Partners" means the collective reference to Sprint Spectrum, L.P., a
--------
Delaware limited partnership and/or Sprint Corporation ("Sprint"), TCI Network
Services, a Delaware general partnership ("TCI"), Cox Telephony Partnership, a
Delaware general partnership ("Cox"), and Comcast Telephony Services, a Delaware
general partnership ("Comcast").
"Patent License" has the meaning ascribed thereto in subsection
--------------
14.5.
"PCS" means personal communication services authorized by the FCC.
---
"PCS FCC Licenses" has the meaning ascribed thereto in the recitals
----------------
of this Agreement.
"PCS System" means all Products and other equipment, tools and
----------
software, all System Element Sites and any property located thereat necessary or
required to provide PCS in a given specified System Area.
"Person" means an individual, partnership, limited partnership,
------
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity of whatever
nature.
"Phillieco" means Phillieco L.P.
---------
"Preliminary RF Design" has the meaning ascribed thereto in
---------------------
subsection 2.6.
<PAGE>
14
"Product Warranty Period" has the meaning ascribed thereto in
-----------------------
subsection 17.1.
"Products" means the collective reference to the Equipment and the
--------
Software provided by the Vendor or any Subcontractor pursuant to and in
accordance with the terms of this Contract.
"Project Milestones" means the collective reference to the milestone
------------------
dates and intervals as set forth in Exhibits A1 and A2, each a "Milestone."
"Proprietary Information" has the meaning ascribed thereto in
-----------------------
subsection 27.19.
"Punch List" means that list prepared in conjunction with the
----------
Acceptance Tests and included in any Acceptance Certificate, which contains one
or more immaterial non service-affecting items (specifying the cost of
completing such items) which have not been fully completed by the Vendor as of
the Substantial Completion of any PCS System; provided that the aggregate price
-------- ----
of completing such items will not exceed ten percent (10%) of the Contract Price
for any such PCS System, or in the case of acceptance of a System Element
Facility ten percent (10%) of the cost of the Civil Work related thereto, and
such incomplete portion of the Work will not during its completion, materially
impair the normal daily operation of such PCS System in accordance with the
Specifications.
"Qualcomm" has the meaning ascribed thereto in subsection 21.1.5.
--------
"Reviewers" has the meaning ascribed thereto in subsection 2.14.
---------
"RF" means radio frequency.
--
"RF Engineering" means radio frequency engineering required in
--------------
connection with the architectural design of the System and/or any PCS System.
"RF Services Warranty Period" has the meaning ascribed thereto in
---------------------------
subsection 17.3(b).
"RFP" has the meaning ascribed thereto in subsection 11.10.1.
---
"RTM License" has the meaning ascribed thereto in subsection 11.7.
-----------
"RTU License" has the meaning ascribed thereto in subsection 11.1.
-----------
"Services" means the collective reference to all of the services to be
--------
conducted by the Vendor as part of the Work pursuant to the terms of this
Contract including, but not limited to, Facilities Preparation Services, RF
Engineering, System Maintenance Support, System Support Services and other
repair and maintenance services, performed in accordance with the terms of this
Contract including, but not limited to, the Specifications.
<PAGE>
15
Services does not include Site Acquisition, Network Interconnection or Microwave
Relocation.
"Services Warranty Periods" has the meaning ascribed thereto in
-------------------------
subsection 17.3(c).
"Site Acquisition" means the services to be performed by the Owner
----------------
and/or its subcontractors necessary for identifying and acquiring sufficient
rights to the System Element Locations within the System Areas including all
requisite zoning approvals and all building approvals required by any
Governmental Entity; provided that Site Acquisition does not include any of the
-------- ----
Site Plan Architectural Work.
"Site Acquisition Substantial Completion" means, with respect to any
---------------------------------------
PCS System, the point at which the Owner will have acquired, by purchase, lease
or otherwise, rights to a sufficient number of System Element Locations within
the specified System Area to be covered by such PCS System such that the
performance criteria specified in Exhibit F applicable to such PCS System would
be substantially satisfied in the reasonable opinion of the Owner subject to the
reasonable acceptance of the Vendor. If the Vendor upon receiving notice from
the Owner that Site Acquisition Substantial Completion has been achieved in any
given PCS System disagrees with the Owner's claim, then the Vendor will have ten
(10) days to detail its disagreement in writing to the Owner and an Independent
Auditor chosen by the Owner and such Independent Auditor will have ten (10)
business days from the receipt of such writing to make a determination whether
or not the Owner's claim of Site Acquisition Substantial Completion is
reasonable. The Independent Auditor will have no discretion or authority to
provide the Parties with any answer other than whether in its judgment the
Owner's claim is reasonable. If the Parties still disagree in good faith with
the determination by the Independent Auditor such dispute will be referred to
arbitration pursuant to the terms of subsection 23.1 for final resolution.
"Site Acquisition Substantial Completion Date" means with respect to
--------------------------------------------
any PCS System the date on which the Owner will have achieved Site Acquisition
Substantial Completion.
"Site Plan Architectural Work" means the preparation of architectural
----------------------------
and/or engineering drawings, plans and/or specifications necessary to obtain
zoning permits and/or approvals, building permits and/or approvals and/or
conditional use permits for any given System Element Facility.
"Software" means (a) all computer software furnished hereunder for use
--------
with any Equipment including, but not limited to, computer programs contained on
a magnetic or optical storage medium, in a semiconductor device, or in another
memory device or system memory consisting of (i) hardwired logic instructions
which manipulate data in central processors, control input-output operations,
and error diagnostic and recovery routines, or (ii) instruction sequences in
machine-readable code furnished hereunder that control call processing,
peripheral equipment and administration and maintenance functions, (b) any
Software Enhancements, Software Features and Software Upgrades furnished by the
Vendor
<PAGE>
16
to the Owner hereunder, and (c) any Documentation furnished hereunder for use
and maintenance of the Software.
"Software Combined Release" has the meaning ascribed thereto in
-------------------------
subsection 12.1.
"Software Enhancements" means modifications or improvements made to
---------------------
the Software which improve performance or capacity of the Software or which
provide additional functions to the Software.
"Software Licenses" means the collective reference to the RTU
-----------------
License and the RTM License.
"Software Revision Level" means each version of Software that reflects
-----------------------
any amendment, modification or change from the immediately preceding version.
"Software Upgrades" means periodic updates to the Software issued by
-----------------
the Vendor to the Owner under Warranty and Software maintenance obligations to
correct Defects or Deficiencies in the Software (which may be referred to by the
Vendor as "patches").
"Sony/Qualcomm Agreement" has the meaning ascribed thereto in
-----------------------
subsection 2.3.
"Source Code" means all CDMA 1900 intellectual information including,
-----------
but not limited to, all relevant documentation, Software in human-readable form,
flow charts, schematics and annotations which comprise the pre-coding detailed
design specifications for Software (excluding Third Party Software) which are
then being maintained by the Vendor which constitutes the "embodiment of the
intellectual property" of the Software as such concept is referenced in Section
365(n) of the United States Bankruptcy Code, as amended.
"Specifications" means the collective reference to the specifications
--------------
and performance standards of the design, Facilities Preparation Services,
Engineering, Products, Installation and Services contemplated by this Contract
and includes any Expansions, amendments, modifications and/or other revisions
thereto made in accordance with the terms of this Contract and as more fully set
forth in Exhibits C, D, E and F; provided, however, that with respect to
-------- -------
Facilities Preparation Services, design, Engineering, Products, Installation and
Services for which specifications and performance standards are not provided and
listed in such Exhibits, "Specifications" refers to performance, functionality
and fitness for the intended purpose for which such design, Facilities
Preparation Services, Engineering, Products, Installation and Services are
employed specified in the manner as set forth in the Exhibits.
"Structural Architectural Work" means the preparation of all
-----------------------------
architectural drawings and blueprints relating to the structural specifications
for a System Element Facility.
<PAGE>
17
"Subcontractor" means a contractor, vendor, supplier, licensor or
-------------
other Person, having a contract with the Vendor or with any other Subcontractor
of the Vendor who has been hired to assist the Vendor in certain specified areas
of its performance of its obligations under this Contract including, without
limitation, performance of any part of the Work.
"Substantial Completion" means the point at which the Vendor has
----------------------
completed a portion of the Work other than specified Items set forth on
applicable Punch Lists such that the geographic areas of any System Area as
specified in Schedule 4 all have been covered to the extent set forth in
Schedule 4, in accordance with the Specifications and the System Standards and
as verified to the Owner in accordance with the criteria and requirements set
forth in Exhibit B3.
"Substantial Completion Certificate" means, with respect to a given
----------------------------------
PCS System, a document submitted by the Vendor to the Owner and signed by an
authorized representative of the Owner and an authorized officer of the Vendor
stating that the Vendor has successfully completed the Acceptance Tests
applicable to the Substantial Completion of the Work to be done in such PCS
System in accordance with the requirements of Exhibit B3.
"System" means all of the PCS Systems built by the Vendor in the
------
System Areas allocated to the Vendor pursuant to the terms of this Contract and
as set forth on Schedule 4.
"System Areas" has the meaning ascribed thereto in the recitals to
------------
this Contract.
"System Element" means the Equipment and Software required to perform
--------------
radio, switching and/or related functions for the System and/or any PCS System
(which may include, without limitation, Authentication Center ("AUC"), Base
Station, Base Station Controller ("BSC"), Equipment Identity Register ("EIR"),
Messaging System ("MXE"), Mobile Switching Center/Visitor Location Register
("MSC/VLR"), Mobile Service Node ("MSN"), Signal Transfer Point ("STP"), Home
Location Register ("HLR"), Service Control Point ("SCP") and Intelligent
Peripheral ("IP")).
"System Element Facility" means the structures, improvements,
-----------------------
foundations, towers, and other facilities necessary to house or hold any System
Element and any related Equipment to be located at a particular System Element
Location.
"System Element Location" means the physical location for a System
-----------------------
Element.
"System Element Site" means the collective reference to a particular
-------------------
System Element, together with the related System Element Location and System
Element Facility.
"System Element Verification" means the Vendor's laboratory level
---------------------------
testing on the Products conducted by the Vendor in accordance with Exhibit B3.
<PAGE>
18
"System Maintenance Support" means those Services offered by the
--------------------------
Vendor for maintenance of any of the Products and/or any System Element or
collection thereof.
"System Managers" means each of the managers designated by the Owner
---------------
and the Vendor, respectively, for the purposes of subsection 23.1.
"System Standards" means the collective reference to the industry
----------------
standards specified in Exhibits C, D, F, G and H.
"System Support Services" means those services offered by the Vendor
-----------------------
relating to System design, enhancement and optimization.
"System Warranty Period" has the meaning ascribed thereto in
----------------------
subsection 17.4.
"TCG" means the collective reference to Teleport Communications
---
Group, Inc., and TCG Partners.
"Technical Documentation" means the documentation identified as such
-----------------------
in the Specifications.
"Term" has the meaning ascribed thereto in subsection 5.2.
----
"Test-bed Laboratory" has the meaning ascribed thereto in subsection
-------------------
2.5.
"Third Party Software" means Software which is independently developed
--------------------
by a third party, sublicensed to the Owner under this Contract or otherwise
provided with the Products in accordance with the Specifications.
"Training" has the meaning ascribed thereto in subsection 2.23.
--------
"Trouble Report ("TR")" has the meaning ascribed thereto in
---------------------
subsection 2.26.2.
"Utilities Work" means the installation of electric and telephone
--------------
utilities at the System Element Locations.
"Vendor" has the meaning ascribed thereto in the prefatory paragraph
------
to this Contract.
"Vendor-Controlled Location" has the meaning ascribed thereto in
--------------------------
subsection 2.12.
"Vendor Developments" has the meaning ascribed thereto in subsection
-------------------
2.11.
<PAGE>
19
"Vendor Event of Default" has the meaning ascribed thereto in
-----------------------
subsection 24.2.
"Vendor Patents" has the meaning ascribed thereto in subsection
--------------
14.5.
"Vendor procedural error" has the meaning ascribed thereto in
-----------------------
subsection 17.5.
"Vendor's Succeeding Entity" has the meaning ascribed thereto in
--------------------------
subsection 27.22.
"Warranty Damages" has the meaning ascribed thereto in subsection
----------------
17.5.
"Warranty Periods" means the collective reference to the Product
----------------
Warranty Period, the Non-Essential Equipment Warranty Period, the Services
Warranty Period and the System Warranty Period.
"Work" means all phases of this Contract, including engineering and
----
design, procurement, manufacture, construction and erection, installation,
training, start-up (including calibration, inspection and start-up operation),
testing and start-up and testing operation with respect to the System and/or any
PCS System and/or any part thereof to be performed by the Vendor or its
Subcontractors pursuant to this Contract. Work includes (i) all labor,
materials, equipment, services, and any other items to be used by the Vendor or
its Subcontractors in the prosecution of this Contract, wherever the same are
being engineered, designed, procured, manufactured, delivered, constructed,
installed, trained, erected, tested, started up or operated during start-up and
testing and whether the same are on or are not on any System Element Location or
any other site within the System and/or any PCS System and (ii) all related
items which would be required of a contractor of projects of comparable size and
design which are necessary for the System and/or any PCS System and/or any part
thereof to (x) operate in accordance with all Applicable Laws and Applicable
Permits, and (y) provide the operating personal communications service systems
required pursuant to this Contract. The Vendor will be responsible for
providing in accordance with the terms of this Contract any and all additional
items and services which are not expressly included by the terms of this
Contract and which are reasonably required for construction and start-up of the
System and/or any PCS System.
1.2 Other Definitional Provisions. 1.2.1 When used in any other
-----------------------------
Contract Documents, unless otherwise specified therein, all terms defined in
this Contract will have the defined meanings set forth herein. Terms defined in
Schedule 1 and the Exhibits are deemed to be terms defined herein; provided,
--------
that in the case of any terms that are defined both in this Contract, in
- - - ----
Schedule 1 and/or an Exhibit, the definitions contained in this Contract will
supersede such other definitions for all purposes of this Contract; provided,
--------
further, that definitions contained in any Exhibit shall control as to such
- - - -------
Exhibit.
1.2.2 The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Contract refer to this Contract as a whole and
not to any particular
<PAGE>
20
provision of this Contract and Section, subsection, Schedule and Exhibit
references are to this Contract unless otherwise specified.
1.2.3 The meanings given to terms defined in this Contract are
equally applicable to both the singular and plural forms of such terms.
SECTION 2 SCOPE OF WORK, RESPONSIBILITIES AND PROJECT
MILESTONES
2.1 Scope of Work. Upon the terms and conditions herein set forth, the
-------------
Vendor will provide all Products and Services to the Owner required for the
establishment of the System including, but not limited to, the Vendor's
obligation to engineer, equip, install, build, test and service the PCS Systems
in the System Areas set forth on Schedule 4 in accordance with the
Specifications and that otherwise satisfies all conditions of Final Acceptance;
provided, that the Vendor will not be responsible for Site Acquisition (except
- - - --------
to the extent certain Facilities Preparation Services, including Site Plan
Architectural Work, are required for the successful completion of Site
Acquisition), Network Interconnection or Microwave Relocation. The Vendor must
complete the Work in accordance with the Project Milestones set forth in Exhibit
A1 and as further specified herein. The Vendor must furnish all labor,
materials, tools, transportation and supplies required to complete the Work in
accordance with the Specifications and the terms of this Contract.
2.2 Additional Coverage. (a) The Owner has the option from time to
-------------------
time, upon not less than thirty (30) days' written notice to the Vendor, to
designate additional geographic areas, including, but not limited to, additional
System Areas, as to which the Owner may purchase from the Vendor some or all, as
determined by the Owner in its sole discretion, of the Products and Services
required for the PCS coverage of such areas as provided for in this Contract,
all on the terms and conditions set forth in this Contract; provided that the
-------- ----
Parties will mutually agree on the Project Milestones and the System performance
criteria applicable to such additional coverage pursuant to this subsection 2.2;
provided further that any such agreement on (i) such Project Milestones must be
- - - -------- -------
based on substantially the same intervals (including, but not limited to, the
number of days specified in each such interval) as set forth in Exhibits A1 and
A2, to the extent possible or (ii) such System performance criteria must be
based on substantially the same System performance criteria as set forth in
Exhibit F, to the extent possible.
(b) The Owner has the option from time to time upon not less than thirty
(30) days' prior written notice to the Vendor and in accordance with applicable
ordering procedures set forth herein, to require the Vendor to increase the
level of capacity or coverage of an already allocated PCS System (whether such
PCS System has been so allocated pursuant to Schedule 4 or subsection 2.2(a)),
all on the terms and conditions of this Contract.
2.3 Handsets. The Vendor must supply the Owner with two thousand
--------
(2,000) subscriber handsets at the prices set forth on Schedule 2 and meeting
the criteria set forth in Exhibit H within sixty (60) days prior to the
Substantial Completion of the Initial PCS
<PAGE>
21
System in accordance with Exhibit B3; provided that the criteria set forth in
-------- ----
Exhibit H will conform to the specifications and/or criteria agreed between the
Owner and Sony/Qualcomm (the "Sony/Qualcomm Agreement") if such agreement has
been entered into as of the date required for the delivery of handsets by the
Vendor pursuant to this subsection 2.3; provided further that in the event the
-------- -------
Sony/Qualcomm Agreement has not been entered into as of the date the Vendor is
required to deliver handsets pursuant to the first sentence of this subsection
2.3 the handsets required to be delivered by the Vendor pursuant to this
subsection 2.3, will substantially conform to the criteria set forth in Exhibit
H, but in any event will work with the System and in accordance with the
applicable requirements related thereto. The Vendor must supply a sufficient
number of subscriber handsets, but in no event not less than one hundred (100)
per PCS System within the Initial System, acceptable to the Owner and the
necessary equipment related thereto for testing and operation of each such PCS
System pursuant to, and in accordance with, the terms of this Contract, Exhibit
B3 and Exhibit H.
2.4 Initial PCS System. Pursuant to Exhibit B3, the Vendor must achieve
------------------
Substantial Completion of the Initial PCS System in accordance with the
requirements of Exhibit B3 prior to, and as a condition of, the Substantial
Completion of any other PCS System within the Initial System. This requirement
in no way relieves the Vendor of its obligations prior to the Substantial
Completion of the Initial PCS System to continue with the Work on all of the PCS
Systems constituting the Initial System in accordance with the requirements of
this Contract and the Project Milestones applicable to each such PCS System.
2.5 System Element Verification; Test-bed Laboratory. (a) In
------------------------------------------------
accordance with Milestone M4 (as set forth on Exhibit A1) the Vendor must
successfully complete System Element Verification pursuant to the terms of this
Contract including, but not limited to, the Specifications and Exhibit B3 no
later than August 19, 1996.
(b) The Vendor will supply, at no additional cost to the Owner, the
Products and Services necessary for the establishment of a test-bed laboratory,
which laboratory will include the Products and Services set forth on Exhibit I
(the "Test-bed Laboratory"), and the ongoing maintenance of such laboratory at
the then-current level of technology throughout the Term of this Contract. The
Test-bed Laboratory will be provided by the Vendor in accordance with Milestone
M3 applicable to the Initial PCS System as set forth on Exhibit A1 but in no
event later than ninety (90) days after a date specified by the Owner provided
--------
that such date is not before April 19, 1996 (the "Building Ready Date").
- - - ----
2.6 RF Engineering and Site Acquisition. (a) In accordance with the
-----------------------------------
Project Milestones set forth on Exhibit A1, within sixty (60) days of the
Effective Date, the Vendor must deliver to the Owner a detailed preliminary RF
design (the "Preliminary RF Design") for each of the System Areas in accordance
with the requirements and criteria set forth in Exhibit B1. The Owner and the
Vendor agree to cooperate with each other to complete the RF Engineering and the
Site Acquisition. The Owner must notify the Vendor of desired coverage areas,
RF Engineering parameters or other information or restrictions the Owner wishes
to be included in the Final RF Engineering Plan for each PCS System. In
accordance with Exhibit B1, the Vendor will do the RF Engineering in each of the
PCS Systems and in connection therewith will use the parameters, information and
restrictions supplied by the Owner. As
<PAGE>
22
part of the RF Engineering, the Vendor will establish "search rings" in each of
the PCS Systems that will specify areas in which the Owner may proceed with Site
Acquisition.
(b) In accordance with Exhibit B1 the Vendor will be kept reasonably
informed of the progress made on ongoing Site Acquisition within the System
Areas. As the Site Acquisition progresses, the Vendor agrees to regularly alter
the RF Engineering plan to determine a new search ring or rings to take into
account any changes or modifications requested by the Owner due to the Owner's
inability to acquire sufficient rights to a location which could constitute a
System Element Location in a timely or economic manner. When making changes to
the RF Engineering plan the Vendor must take into account the Site Acquisition
already completed by the Owner.
(c) In accordance with the Project Milestones set forth on Exhibit A1
and the requirements and criteria set forth in Exhibit B1, within five (5) days
of the Owner achieving Site Acquisition Substantial Completion within any given
System Area (the "Final RF Review Period"), the Owner and the Vendor will use
their best efforts to agree on a final System Element Location count (the "Final
Site Count") and a final RF Engineering plan (the "Final RF Engineering Plan")
for such System Area upon which the PCS System for such System Area will be
built by the Vendor. Failure of the Owner and the Vendor to reach satisfactory
agreement on a Final Site Count and/or a Final RF Engineering Plan for any given
System Area within the Final RF Review Period will automatically result in the
referral of any such disagreement to the most senior RF engineers of both the
Owner and the Vendor for their review and resolution within five (5) days after
the end of any such Final RF Review Period. If the senior RF engineers fail to
resolve any such disagreement within the extended five (5) day resolution
period, the disagreement shall automatically be referred for resolution in
accordance with subsection 23.1. It is understood by the Parties that during
the period of any such disagreement and the resolution thereof in accordance
with the Contract, the Work on such PCS System, to the extent possible, will be
ongoing and that Substantial Completion on such PCS System cannot be achieved
without agreement by the Parties on a Final RF Engineering Plan and/or a Final
Site Count for such PCS System and/or System Area.
2.7 Facilities Preparation Services, Installation and Substantial
-------------------------------------------------------------
Completion. (a) In accordance with the Project Milestones specified in Exhibit
- - - ----------
A and the requirements and criteria of Exhibit B2, for each System Area the
Vendor must complete the Facilities Preparation Services for all System Element
Locations within such PCS System in accordance with the construction criteria
set forth in Exhibit E and the performance criteria set forth in Exhibit F no
later than ninety (90) days from the Owner/Vendor agreement on a Final Site
Count and a Final RF Engineering Plan for such System Area. Pursuant to the
Project Milestones the Vendor must complete Installation of the Products for any
given PCS System within three (3) days of its completion of the Facilities
Preparation Services for such PCS System pursuant to the requirements and
criteria set forth in Exhibit D and Exhibit F.
(b) In accordance with the terms of this Contract, including but not
limited to subsection 2.37, the Vendor must achieve Substantial Completion for
each PCS System within the Initial System pursuant to the Substantial Completion
testing set forth in Exhibit B3 by the later of (i) thirty (30) days from
Microwave Relocation Completion in such
<PAGE>
23
PCS System or (ii) thirty (30) days from Milestone M7 (as set forth in Exhibit
A1) for such PCS System; provided that for any of the PCS Systems within the
-------- ----
Non-Designated System Areas the Vendor will not be required to achieve
Substantial Completion in accordance with Milestone M8 (as set forth on Exhibit
A1) and Exhibits A1 and B3 prior to June 1, 1997 and Milestone M6 (as set forth
on Exhibit A1) applicable to the PCS Systems in the Non-Designated System Areas
will not be required to be achieved by the Vendor prior to thirty-two and one-
half (32- 1/2) days prior to the Vendor's achievement of Substantial Completion
in such PCS Systems; provided, further that Vendor will endeavor to achieve
--------
Substantial Completion of the PCS Systems within such Non-Designated System
Areas on or about January 31, 1997. For example, if, with respect to a PCS
System within a Non-Designated System Area, the date specified in clauses (i) or
(ii) (excluding the first proviso in this subsection 27(b)) above occurs on
-------
December 15, 1996, then the Guaranteed Substantial Completion Date for such PCS
System would be June 1, 1997.
2.8 Site Acquisition Modifications. In the event that the Owner
------------------------------
determines that it is unlikely to achieve Site Acquisition Substantial
Completion for any PCS System in a timely and cost-effective manner, the Vendor
will modify certain performance criteria set forth in Exhibit F with respect to
such PCS System in the manner and to the degree that the Owner reasonably
specifies in writing to the Vendor in accordance with the terms of Exhibit B3.
2.9 Design/System Architecture and Engineering; Interoperability. (a)
------------------------------------------------------------
The Vendor must provide all Engineering and design services necessary for the
completion of the Work and the System in conformity with the Specifications and
the CDMA standards, including, but not limited to, the Engineering and design
necessary to describe and detail the System and the specified PCS Systems.
(b) Pursuant to and in accordance with the terms of Exhibits B3 and G,
BTS/BSC-MSC Interoperability must be achieved upon the earlier of (i) the
Substantial Completion of the last PCS System within the Initial System or (ii)
December 1, 1996 (provided that such date will change to reflect the actual
-------- ----
delay in the finalization of Attachment A to be attached to Exhibit G); provided
--------
that the requirements of this subsection 2.9(b) are a condition to the Vendor's
- - - ----
Substantial Completion of such last PCS System within the Initial System and
Substantial Completion of such last PCS System will not be deemed to have been
achieved by the Vendor unless and until such Interoperability shall have been
achieved in accordance with the criteria set forth in Exhibit G; provided
--------
further that in no event will the achievement of BTS/BSC-MSC Interoperability in
- - - -------
accordance with Exhibit G be required prior to December 1, 1996 and that in any
event any delay in such Interoperability which is not due substantially to the
fault of the Vendor will not be a delay pursuant to the terms of this subsection
2.9(b) subject to the reasonable opinion of the Owner.
2.10 Certification. The Vendor must coordinate its performance of the
-------------
Services described in subsection 2.9 with the Engineering and design efforts
(including, without limitation, any and all RF Engineering and/or Site
Acquisition) of all Subcontractors, the Owner, the Other Vendors, any and all
supply and transportation requirements and all federal, state and local
authorities or agencies. The Vendor will be fully knowledgeable about and
<PAGE>
24
will, after reasonable review thereof, accept all Engineering, including,
without limitation, RF Engineering and design, irrespective of whether the
Vendor, the Other Vendors, the Owner or third parties such as the Subcontractors
may furnish such services. All Engineering requiring certification must be
certified by professional engineers licensed or properly qualified to perform
such Engineering services in all appropriate jurisdictions if such certification
is, in the Owner's opinion, appropriate and reasonable under the circumstances.
2.11 Notice of Developments. 2.11.1 Vendor Developments. The Vendor
---------------------- -------------------
must provide the Owner, through the NDAB or the Owner's vice president and/or
director of product development, with reasonable prior notice (but in any event
not less than ten (10) business days) of any CDMA 1900 Vendor Product
developments, innovations and/or technological advances (collectively "Vendor
Developments") relevant to the System prior to giving such notice to any other
Customer of the Vendor or otherwise making any such Vendor Development public
within the relevant marketplace; provided that any such notice pursuant to this
-------- ----
subsection 2.11.1 need not include any information originated by another
Customer which is proprietary to such other Customer of the Vendor. For the
purposes of this subsection 2.11.1 the term "Vendor" includes the Vendor and its
affiliates and subsidiaries.
2.11.2 Participation in Testing. The Owner has the right, but not the
------------------------
obligation, to witness and/or participate in any initial testing and/or
application of any Vendor Development; provided that any such initial testing of
-------- ----
such Vendor Development shall be subject to (i) scheduling as reasonably
determined by the Vendor, (ii) the qualification that the Owner's PCS System
meets the technical requirements for the testing of such Vendor Development as
reasonably determined by the Vendor (or otherwise that the Owner is willing to
update such PCS System to meet such requirements), (iii) the Owner's
acknowledgement that it will be able to provide the resources necessary to
implement the initial testing for such Vendor Development, and (iv) the Owner
and the Vendor executing a reasonable verification office testing agreement that
identifies the scope, terms, pricing, responsibilities and schedule related to
the initial testing of such Vendor Development. The Vendor must provide the
Owner at least thirty (30) days' prior notice of its intent to test any such
Vendor Development and upon the Owner's written request the Vendor will allow
the Owner to participate in such testing upon terms and in a testing environment
reasonably acceptable to the Parties at such time. The Owner will make its
Test-bed Laboratory and/or certain of its PCS Systems (following Final
Acceptance thereof) available to the Vendor for any such testing in which the
Owner has the right, and will have notified the Vendor of its desire, to
participate in pursuant to the terms of this subsection 2.11.2. The length of
the prior notice period described above may be shortened to under thirty (30)
days if necessary and appropriate under the circumstances, but in no event will
any such prior notice period be less than ten (10) days.
2.12 Safety. To the extent the Vendor is in control of any System
------
Element Location, or other site within the System or any System Area during the
term of this Contract (a "Vendor-Controlled Location") including, but not
limited to, during the build-out of the Initial System, the Vendor will be
solely responsible for initiating, maintaining, and supervising all safety
precautions and programs in connection with all such Vendor-Controlled
<PAGE>
25
Locations. The Vendor must materially comply with Applicable Laws and
Applicable Permits and the Specifications bearing on safety of persons or
property or protection against injury, damages or loss. The Vendor must provide
a written report to the Owner describing fully all incidents affecting safety on
any Vendor-Controlled Location and must also furnish to the Owner copies of all
MSHA, OSHA and workers' compensation reports. The Vendor acknowledges and
agrees that until Substantial Completion of any given PCS System is achieved the
Vendor will be deemed to be in control of all Products, tools, designs,
buildings, structures and/or Engineering (other than those Products, tools,
designs, buildings, structures and/or Engineering specific to and necessary for
Site Acquisition, Network Interconnection and/or Microwave Relocation) at, in or
upon all System Element Locations and/or any other site within such PCS System.
2.13 Emergencies. In the event of any emergency endangering life or
-----------
property, the Vendor must take such action as may be reasonable and necessary to
prevent, avoid or mitigate injury, damage or loss and will, as soon as possible,
report any such incidents, including the Vendor's response thereto, to the
Owner. Whenever, in the reasonable opinion of the Owner, the Vendor has failed
to take sufficient precautions for the safety of the public or the protection of
the Work or of structures or property on or adjacent to any Vendor-Controlled
Location, creating, in the reasonable opinion of the Owner, an emergency
requiring immediate action, then the Owner, after having given reasonable prior
notice to the Vendor, may cause such sufficient precautions to be taken or
itself provide such protection. The taking or provision of any such precautions
or protection by the Owner or its agents or representatives will be for the
account of the Vendor and the Vendor must reimburse the Owner for the cost
thereof.
2.14 Right of Inspection. The Owner, the parties providing financing in
-------------------
connection with the build-out of the Nationwide Network or their duly appointed
representatives, including Inspectors (collectively "Reviewers"), will at all
reasonable times have access to the various sites where the Vendor or its
Subcontractors are prosecuting the Engineering, design, procurement, testing or
manufacture of the Work; provided that this subsection 2.14 will not be presumed
-------- ----
to give access to the Vendor's or its Subcontractors' sites to direct
competitors of the Vendor provided that such sites are not otherwise Owner
sites. For these purposes, reasonable access will be given during normal
business hours to the Vendor's and its Subcontractors' plants, premises, storage
and deposit areas, facilities and offices, sources of materials, Equipment being
assembled, already assembled or in operation, Equipment being performance tested
or tested to the Vendor's specifications and to any other places or areas
occupied by the Vendor or its Subcontractors in connection with the Work.
Notwithstanding anything herein to the contrary, any Reviewer's right of access
to the Vendor's and/or the Subcontractors' plants, premises, storage and deposit
areas, facilities and offices, sources of materials, Equipment being assembled,
already assembled or in operation, Equipment being performance tested or tested
to the Vendor's specifications and to any other places or areas occupied by the
Vendor or its Subcontractors in connection with the Work will be subject to the
reasonable confidentiality, safety and security requirements of same and further
subject to such Reviewers' non-interference with the Work and other work being
performed thereon. The Vendor must provide reasonable temporary office space
and services for the Reviewers to the extent necessary.
<PAGE>
26
2.15 Transportation. The Vendor must provide for the transport and
--------------
delivery of all the Products to be delivered pursuant to, and in accordance
with, the terms of this Contract. The costs for such transportation will be
borne by the Vendor as part of the Contract Price; provided that the Owner will
-------- ----
reimburse the Vendor for any costs incurred by the Vendor for any Extraordinary
Transportation in such cases where the Vendor, subject to prior notice to the
Owner, found it actually necessary to utilize such Extraordinary Transportation;
provided, further that any amounts due to the Vendor from the Owner pursuant to
- - - -------- -------
the first proviso of this subsection 2.15 will be reduced by the amount of non-
extraordinary transportation costs which otherwise would have been applicable to
the transport of such Products.
2.16 Security. During the course of the Work, the Vendor will perform
--------
the security services necessary to ensure the safety and security of the System
Element Locations, the Products and/or other materials or designs relevant to
the Work.
2.17 Materials and Equipment. Except for materials or Equipment to be
-----------------------
supplied by Subcontractors identified on part B of Schedule 7, whenever
materials or Equipment are specified or described in this Contract (including
the Specifications) by using the name of a proprietary item or the name of a
particular supplier, the naming of the item is intended to establish the type,
function and quality required, and substitute materials or Equipment may
nonetheless be used, provided that such materials or Equipment are equivalent or
equal to that named. If the Vendor wishes to furnish or use a substitute item
of material or Equipment, the Vendor must first certify that the proposed
substitute will perform at least as well the functions and achieve the results
called for by this Contract, will be substantially similar or of equal substance
to that specified and be suited for the same use as that specified. The Owner
may require the Vendor to furnish, at the Vendor's expense, additional data
about the proposed substitute as required to evaluate the substitution. For
Major Portions of the Work, or materials or Equipment listed on part B of
Schedule 7, the Vendor must first receive prior written approval of the Owner
for any substitution. The Owner will be allowed a reasonable time within which
to evaluate each proposed substitute.
2.18 Equipment and Data. The Vendor must furnish all drawings,
------------------
specifications, specific high level design data, preliminary arrangements and
outline drawings of the Equipment and all other information as required in
accordance with this Contract in sufficient detail to indicate that the
Equipment and fabricated materials to be supplied under this Contract comply
with the Specifications.
2.19 References to Certain Sources. Reference to standard
-----------------------------
specifications, manuals or codes of any technical society, organization or
association or to the laws or regulations of any Governmental Entity by this
Contract, means (unless specifically stated otherwise) the latest standard
specification, manual, code, laws or regulations in effect at the time of such
reference (unless specifically stated otherwise) except as may be otherwise
specifically agreed to by the Parties. However, no provision of any reference,
standard, specification, manual or code (whether or not specifically
incorporated by reference in this Contract) will be effective to change the
duties and responsibilities of the Owner, the Vendor, the Subcontractors or any
of their consultants, agents or employees from those set forth in this Contract.
<PAGE>
27
2.20 Operating Manuals. The Vendor will provide the Owner Operating
-----------------
Manuals in accordance with this subsection 2.20 as soon as they are reasonably
available but in no event less than thirty (30) days prior to Substantial
Completion of the Initial PCS System. In accordance with this subsection 2.20
the Vendor will provide the Owner with as many sets of the Operating Manuals for
the entire System as the Owner then reasonably requires. The Operating Manuals
will be prepared in accordance with the relevant Specifications and in
sufficient detail to accurately represent the System and all of its component
System Elements as constructed and will recommend procedures for operation.
Operating Manuals with up to date (but not "as-built") drawings, specifications
and design sheets will be available for the Training as set forth in subsection
2.23. All other Technical Documentation not already delivered to the Owner
pursuant to the terms of the Contract must be delivered to the Owner within ten
(10) days after the successful achievement of all Final Acceptance tests in
accordance with Exhibit B3. The Owner will not be required to deliver the Final
Acceptance Certificate until all such Technical Documentation has been so
delivered (and Final Acceptance will not be deemed to have occurred earlier than
the date that is ten (10) days prior to the date of delivery of such Technical
Documentation).
2.21 Maintenance and Instruction Manuals. The Vendor will provide the
-----------------------------------
Owner Maintenance and Instruction Manuals in accordance with this subsection
2.21 as soon as they are reasonably available but in no event less than thirty
(30) days prior to Substantial Completion of the Initial PCS System. In
accordance with this subsection 2.20 the Vendor must provide the Owner with as
many sets of the Maintenance and Instruction Manuals for the entire System as
the Owner then reasonably requires. The Maintenance and Instruction Manuals
will be prepared in accordance with the Specifications and in sufficient detail
to accurately represent the System and all of its component System Elements as
constructed and will set forth procedures for inspection and maintenance.
Maintenance and Instruction Manuals with up to date (but not "as-built")
drawings, specifications and design sheets will be available for the Training
set forth in subsection 2.23. The Maintenance and Instruction Manuals must
include the volumes compiled by the Vendor containing all as-built Subcontractor
furnished product data.
2.22 Standards for Manuals. All Operating Manuals and Maintenance and
---------------------
Instruction Manuals required to be provided by the Vendor pursuant to this
Contract must be:
(a) detailed and comprehensive and prepared in conformance with the
System Standards and generally accepted national standards of professional care,
skill, diligence and competence applicable to telecommunications and operation
practices for facilities similar to the System;
(b) consistent with good quality industry operating practices for
operating personal communications service systems of similar size, type and
design;
(c) sufficient to enable the Owner to operate and maintain each PCS
System in each of the specified System Areas and the System as a whole on a
continuous basis; and
<PAGE>
28
(d) prepared subject to the foregoing standards with the goal of
achieving operation of the System at the capacity, efficiency, reliability,
safety and maintainability levels contemplated by this Contract and the
Specifications and required by all Applicable Laws and Applicable Permits.
In addition to, and without limiting the requirements set forth in the
preceding sentence, the Operating Manuals and the Maintenance and Instruction
Manuals (but not "as-built" drawings) will be submitted to the Owner in CD-ROM
format in addition to hard-copy volume format if so requested by the Owner and
will include maintenance procedures for circuit breakers, relays and auxiliary
equipment and devices in accordance with the manufacturers' recommendations
therefor. In addition to any of the Owner's other rights and remedies, the
Owner will have the right to reject the Operating Manual and the Maintenance and
Instruction Manuals if in its reasonable judgment any of the foregoing does not
meet the standards set forth in this Contract.
2.23 Training. As more fully described below, starting at least one
--------
hundred and eighty (180) days prior to Substantial Completion of the Initial PCS
System, the Vendor must provide to the Owner a practical and participatory on-
site training program with respect to the System, which program will include
technical education (collectively, the "Training"). The Vendor will provide,
upon the Owner's prior written request and at the time or times required by the
Owner during the Term of this Contract, not less than four hundred and fifty
(450) Training seats or a minimum of four thousand five hundred ninety (4,590)
man days of Training and Training materials for the Owner's personnel, at no
cost to the Owner. Such Training must be kept current to encompass the latest
Software and Equipment, or any other Software Revision Level and/or Equipment
Revision Level directed by the Owner pursuant to the terms of this Contract.
Subject to the foregoing, Training course content and material will be designed
and agreed to by mutual consent between the Parties. Unless otherwise directed
by the Owner in writing to the Vendor, Training courses must be limited to a
maximum of eight (8) to ten (10) attendees in each course session (but not less
than six (6) attendees unless otherwise specifically requested by the Owner
subject to the reasonable agreement of the Vendor). The Owner agrees to
reimburse the Vendor for reasonable and actual travel and living expenses for
Vendor's on-site training so long as such costs do not exceed, in any event, the
Owner's own travel expense limitations for such attendees. The Vendor will
conduct classes for each course described below:
(a) Installation Training will include PCS Training to the Owner's
technical personnel presumed not qualified or trained specifically on
Installation or testing of a PCS System or the Equipment and/or Software
included therein. The subject matter of such Training will include (i) a
general overview of PCS/CDMA technology and the System, (ii) an overview of the
System which includes coverage of specific Equipment and Software, and (iii) any
other information necessary to successfully install and test each PCS System in
any System Area;
(b) Operations, maintenance and provisioning ("OM&P") Training will
include System Training to technical personnel presumed not qualified or trained
specifically on operating a PCS System or the Equipment and/or Software included
therein. The subject
<PAGE>
29
matter will include (i) a general overview of PCS/CDMA technology and the
System, (ii) a System overview of the Equipment, Software initiation and
configuration requirements, required interconnections, troubleshooting and
testing requirements, recovery from System failures, and (iii) any other
information necessary to successfully operate, maintain, or set up the Equipment
and the Software to work in accordance with the System Element performance
criteria set forth in Exhibit D, in each case so that each PCS System
successfully operates in accordance with the performance criteria set forth in
Exhibit F within its System Area; and
(c) The Vendor must provide PCS/CDMA qualified technical staff and
material to train the Owner's personnel so as to enable them to train other
personnel of the Owner (i.e., train the trainers) on the subject matter topics
----
listed below. The Owner's personnel trained by the Vendor will be evaluated and
certified by the Vendor upon successful completion of the course as competent to
train other personnel of the Owner. Such content and materials may be tailored
or customized by the Owner for internal use only and include, without
limitation, Training with respect to the following topics:
(i) System Element configuration;
(ii) Communication interfaces and protocols;
(iii) Software operating system (current to the latest
Software Revision Level);
(iv) Database configuration, structure and content;
(v) Database down loading;
(vi) Program function;
(vii) Troubleshooting procedures; and
(viii) Other subject matter which is necessary or
desirable to understand the operation of the System and
maintenance of the System as well as any enhancements as they
are added to the System and/or any part thereof.
2.24 Manuals and Training. The training and the documentation provided
--------------------
in connection herewith, including, without limitation, all documentation
provided in CD-ROM format, and pursuant to subsections 2.20, 2.21 and 2.23 will
be updated pursuant to and in accordance with all technology and Product
upgrades applicable to the System, any PCS System and/or any part thereof.
2.25 Spare Parts. (a) Prior to the Substantial Completion of the
-----------
Initial PCS System the Vendor and the Owner will agree, pursuant to and in
accordance with the terms of this subsection 2.25, as to the type, quantity and
storage location of the spare parts required to continually operate the System
and in accordance with the Specifications. Until the
<PAGE>
30
expiration of the applicable Warranty Periods, the Vendor will, if requested by
the Owner, provide such spare parts at its own expense. Following the
expiration of such Warranty Periods, the Vendor will provide such spare parts
pursuant to Schedule 12A and at the prices set forth on Schedule 12B. After the
expiration of the applicable Warranty Periods invoices for such System spare
parts will be issued directly to the Owner and will be paid for directly by the
Owner by the dates set forth on a schedule provided by the Owner, which schedule
will be consistent with the Vendor's schedule and in accordance with the terms
and conditions required by the suppliers of such System spare parts if such
supplier is a Person other than the Vendor. Any System spare parts utilized or
withdrawn from the System will be promptly replaced by the Vendor at its own
cost during the period the Vendor is responsible for providing such spare parts
at no cost pursuant to this subsection 2.25.
(b) The Owner has the right to withhold from its final payment to the
Vendor with respect to any PCS System an amount equal to the Owner's reasonably
estimated cost of any utilized or System spare parts for such PCS System not so
replaced prior to Final Acceptance; provided that such withheld funds will be
-------- ----
released upon such satisfactory replacement of such spare parts by the Vendor.
To the extent that System spare parts need to be acquired from third party
suppliers, the Vendor will use its best efforts to obtain from suppliers a
supply of System spare parts at no additional cost as part of the original
Product package. To the extent that the Vendor is able to so obtain such System
spare parts at no additional cost as part of the original Product package, it
will provide such System spare parts to the Owner without cost (and without any
charge for the procurement of such spare parts by the Vendor).
2.26 System Support Services. The Vendor will provide the specified
-----------------------
System support services for the operation, maintenance and/or repair of the
System and all Products to the extent set forth herein below and at the prices
set forth on Schedule 3.
2.26.1 Vendor Assistance. (a) Upon receipt of a request for technical
-----------------
assistance from the Owner, the nature of the problem will be identified by the
Owner, and a priority assigned by the Owner (upon discussion with the Vendor
which in no event will require the agreement and/or consent of the Vendor) as
either an emergency or non-emergency condition and resolution thereof will be
expedited accordingly.
(b) Following attempted corrective actions by the Owner in accordance
with applicable Maintenance and Instruction Manuals provided by the Vendor, when
the Vendor is notified by the Owner that the System, any PCS System or any part
thereof fails to operate in accordance with the Specifications, the Vendor will
promptly commence and diligently pursue all reasonable efforts to correct the
Defect or Deficiency.
(c) The Vendor's correction of such Defects or Deficiencies in the
System, any PCS System or any part thereof may take the form of new Software
codes, new or supplementary operating instructions or procedures, modifications
of the Software codes in the Owner's possession, or any other commonly used
method for correcting Software Defects or Deficiencies, as the Owner and Vendor
deem appropriate.
<PAGE>
31
(d) When appropriate, the Vendor will provide non-emergency technical
support to the Owner via telephone, facsimile transmission, modem, or other
acceptable means during the Owner's normal business hours.
(e) The Vendor will provide emergency technical assistance to the Owner
via an ETA telephone number designated to the Owner in advance by the Vendor,
twenty-four (24) hours per day, three hundred sixty-five (365) days per year.
(f) The Vendor will provide remote intervention and assistance capability
to the Owner for remotely accessing operating System Elements. Upon mutual
agreement between the Parties, the Vendor may remotely access operating System
Elements for the purpose of ETA.
2.26.2 Trouble Reports. From time to time, failures in or degradation
---------------
of Products comprising the System may cause services provided by the System to
be adversely affected. It is necessary that immediate assistance be provided by
the Vendor to allow the Owner to restore the affected service. Critical service
Outages which cannot be resolved by the Owner's field technicians or technical
support engineers using procedures described in the Vendor's Operating Manuals,
Maintenance and Instruction Manuals and Training will be transmitted to the
Vendor as a Trouble Report ("TR"). The Vendor will assign an identifying number
to each TR to aid in tracking its disposition. TRs will be immediately
addressed by the Vendor through Emergency Technical Assistance under guidelines
set forth in this subsection 2.26.2. TRs may not be considered concluded until
the solution is concurred upon by an Owner's employee within the Owner's
operations control center ("OCC"). The root cause of problems resulting in TRs
may be System Defects or Deficiencies which must be corrected through Product or
procedure changes. Problems with the System requiring such changes will be
referred to the Vendor for action through a customer service request ("CSR").
The Vendor is authorized by the Owner to install and integrate, at the Vendor's
expense, any Software Upgrade or Software Enhancement pursuant to mutual
agreements reached between the Vendor and the Owner.
2.26.3 Emergency Technical Assistance. (a) When a problem is
------------------------------
encountered which adversely affects service and/or performance with respect to
the Products, any PCS System and/or the System and/or any part thereof, in each
case provided by the Vendor, an Owner maintenance technician will attempt to
repair or replace any malfunctioning Product adversely affecting such service
and/or performance using the procedures recommended in the Maintenance and
Instruction Manuals and/or the Operating Manuals. If unsuccessful, an Owner
technical representative will consult the Vendor's designated ETA group at the
telephone number provided by the Vendor in subsection 2.26.3(c) below.
Following receipt of notification by the ETA group, the ETA group will utilize
all available technical resources and will ensure that a qualified technical
engineer is communicating with the Owner's personnel regarding the problem
within fifteen (15) minutes of any such notification.
(b) A problem adversely affecting service that has a severity level
defined below either as an "E1 Emergency Condition" or an "E2 Emergency
Condition" is to be addressed under the ETA procedures set forth below in this
subsection 2.26.3 and in subsection 2.26.4.
<PAGE>
32
(i) An E1 Emergency Condition means a problem resulting from any one or
more of the following events:
- - An event including loss of origination and termination capability in
all terminations for a period longer than thirty (30)seconds.
- - Any system-initiated or unplanned manual restart (warm, cold, reload,
or image) which causes a system loss of call processing capability
for more than thirty (30) seconds. Manual restarts with twenty-four
(24) hour notice would be planned.
- - Useable billing data not being collected.
- - Two (2) or more contiguous BTSs failing causing a loss of coverage.
- - Ten percent (10%) or more of the total number of trunks are
out-of-service, where the disrupted traffic demand exceeds the
alternate routing capability.
- - A one-hundred percent (100%) trunk group failure disrupting connections
between any switching offices, where the disrupted traffic demand
exceeds the alternate routing capability.
- - IS41 networking failures, isolation of the MSC and related Equipment
from the rest of the network.
- - Common channel signaling system networking failures, isolation of the
MSC and related Equipment from the rest of the network.
- - Total loss of access to a specific service, total loss of access to one
or more specific services because of a fault conditions in the MSC
and related Equipment.
- - Any BTS having a hard failure in excess of thirty (30) minutes.
The Vendor must clear all El Emergency Conditions within twelve
(12) hours of notification of their occurrence. Work must continue
without any cessation until the defect causing the E1 Emergency
Condition is solved or the
<PAGE>
33
severity thereof is reduced to a "P1 Major Condition", as defined
below, or less.
(ii) An E2 Emergency Condition means a problem resulting from any one or
more of the following events:
- - Loss of duplex functionality for any equipment that is duplicated
(e.g. CPU, CM, CMC, MS, XPM, IOC, NM, etc. (as such terms are
understood by the Owner and the Vendor)).
- - Single BTS failing less than thirty (30) minutes that is not contiguous
with another failed BTS.
- - Loss of the master clock or a network plane out-of-service.
- - Fifty percent (50%) or more of the equipped tape or disk drive units
out-of-service.
- - Loss of duplex recording of billing information.
- - Inability to dump or initialize an office image.
- - Inability to perform critical maintenance procedures.
- - Loss of all links within a single link-set.
The Vendor must clear all E2 Emergency Conditions within
twenty-four (24) hours of notification of such E2 Emergency
Conditions. Work must continue without any cessation until the
defect causing the E2 Emergency Condition is solved or the severity
is reduced to a P1 Major Condition or less.
(c) In the event that an E1 Emergency Condition or an E2 Emergency
Condition should remain unresolved following referral to the Vendor by the
Owner, the problem causing such condition must be reported to the levels of
management set forth below (with comparable titles, if different) to ensure all
available resources necessary to address the problem will be committed in
accordance with the following:
The following are the reporting levels if an E1 Emergency Condition or
an E2 Emergency Condition is not resolved within the time periods set forth
below as amended from time to time following referral thereof to the Vendor by
the Owner:
<TABLE>
<CAPTION>
Vendor Contact Vendor Contact Name Telephone Number
------------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
One hour - Technical Assistance Mgr. to be designated to be designated
</TABLE>
<PAGE>
34
<TABLE>
<S> <C> <C> <C> <C>
Two hours - Customer Service Director Ron Fordon (214) 684-2999
Three hours - Customer Service AVP Norm Peters (214) 684-1299
Four hours - Vice President Chris MacIssac (905) 238-7229
</TABLE>
(d) If the Owner reasonably determines that the Vendor has not provided
sufficient ETA to resolve any E1 Emergency Condition or E2 Emergency Condition
on a timely basis, the Owner will be entitled to withhold all payments with
respect to the affected PCS System then due or outstanding prior to the date of
such determination until such time as adequate ETA is provided to the Owner to
resolve such Emergency Condition.
(e) If an E1 Emergency Condition or an E2 Emergency Condition exists in a
PCS System prior to Final Acceptance of such PCS System the Vendor must deliver
to the Owner each Software Upgrade and each Equipment Upgrade developed by or on
behalf of the Vendor to resolve any E1 Emergency Condition or E2 Emergency
Condition promptly following completion of development of such Software Upgrades
or promptly following availability of such Equipment Upgrades but in no event
later than forty-eight (48) hours following such completion or such development
of such Software Upgrades or availability of such Equipment Upgrades.
(f) The term Non-Emergency Services includes providing to the Owner any
requested technical assistance and support, remote monitoring and outage review
consultation and the handling of Customer Service Requests ("CSR").
(g) Technical assistance and support must be provided for the purpose of
resolving non-emergency problems defined below as "P1 Major Condition", "P2
Significant Problem" and "P3 Minor Problem" which are reported to the Vendor.
(i) P1 Major Condition means any non-emergency
failure of specific features or functions of the System, any PCS
System and/or any Product that restricts its operations, but does
not render the System, any PCS System and/or any Product
inoperable, impact traffic capacity or coverage or require
significant manual intervention for the System, any PCS System
and/or any Product to operate properly and in accordance with its
applicable Specifications. These events will include loss of
diagnostic capabilities and/or loss of reporting functions.
(ii) P2 Significant Problem means any non-emergency
intermittently occurring problem related to specific primary
functions or features and/or any inoperable secondary functions,
which does not have a significant adverse effect on the overall
performance of the System, any PCS System and/or any Product.
By-pass or work around procedures must be used to alleviate such
P2 Significant Problem until it is corrected.
(iii) P3 Minor Problem means any non-emergency
problem that does not affect the performance or functions of the
System, any PCS System
<PAGE>
35
and/or any Product, and, despite such problem, the System, any
PCS System and/or any Product is fully operable without
restrictions. Such P3 Minor Problems may include documentation
inaccuracies, cosmetics, minor requests for changes or
maintenance requests. The Vendor will resolve such P3 Minor
Problems during the next available scheduled Software Upgrade or
Equipment Upgrade.
(h) Should a non-emergency problem remain unresolved for the period or
periods of time set forth below following referral to the Vendor by the Owner,
such problem must be reported to the levels of management set forth below to
ensure all available resources necessary to correct such problem will be
committed to address such problem pursuant to the following:
<TABLE>
<CAPTION>
REPORTING LEVELS IF NON-EMERGENCY
IS NOT RESOLVED WITHIN
<S> <C> <C> <C> <C>
CONDITION 1 DAY 2 DAYS 7 DAYS 30 DAYS
P1 Technical Technical Customer Service Vice President
Major Condition Assistance Manager Assistance Senior Director
Manager
P2 Technical Technical Customer
Significant Assistance Assistance Senior Service
Condition Manager Manager Director
P3 Technical Customer
Minor Condition Assistance Service
Manager Director
- - - ------------------------------------------------------------------------------------------------
</TABLE>
Non-emergency problems referred to the Vendor as a CSR will be resolved
based upon the priority assigned to them as determined by the Owner or as
mutually agreed by the Parties, and to the extent possible will be incorporated
into the next scheduled Software Release or Equipment Upgrade.
2.26.4 ETA and CSR. In the event that emergency or non-emergency
-----------
technical support provided from the Vendor's technical support center is not
sufficient to resolve an E1 Emergency Condition or an E2 Emergency Condition, a
P1 Major Condition or a P2 Significant Problem, the Vendor must send a
technically qualified person or persons to the site of such emergency condition
or problem to assist the Owner's employees in solving such condition or problem.
The Vendor's technically qualified person or persons must be on-site within
twelve (12) hours after notification to the Vendor by the Owner, or at such
later time as may be determined by the Owner. A CSR will be submitted by the
Owner to request a repair of the emergency condition or the non-emergency
problem, or to request the addition of a Software or Equipment Upgrade or other
Software or Equipment Feature Enhancement. The Owner's CSRs will define the
condition or problem and state whether the Owner considers the CSR to be for a
Software/Equipment Upgrade or Software/Equipment Enhancement. Changes to the
System or any PCS System resulting from CSRs must be fully
<PAGE>
36
tested and accepted in accordance with the Specifications. The Vendor must
respond to the submission of a CSR by the Owner within five (5) business days,
acknowledging receipt of the CSR, confirming or denying agreement with the
Owner's assessment of whether the CSR may be considered a Software or Equipment
Upgrade or a Software or Equipment Feature Enhancement and summarizing the
Vendor's intended actions to handle the CSR. A CSR may result in System fixes,
or enhancements, resulting in Product modifications reasonably acceptable to the
Owner.
2.27 Review of Contract Documents. The Vendor has examined in detail and
----------------------------
carefully studied and compared the Contract Documents with all other information
furnished by the Owner as of the Effective Date and has promptly reported to the
Owner any material errors, inconsistencies or omissions so discovered or
discovered by any of the Subcontractors. The Vendor will not prosecute any
Major Portion of the Work knowing that it involves a material error,
inconsistency or omission in the Contract Documents without prior written notice
to and approval by the Owner. If for any reason the Vendor violates this
subsection 227, the Vendor will, in addition to being subject to any other
remedies of the Owner and, in such case, will be deemed to have waived any
claims for an adjustment in any of the Specifications and/or System Standards
which results directly from any such error, inconsistency or omission. This
subsection 227 does not, nor will be deemed to, in any manner limit the terms
of subsection 2.38.
2.28 Licenses, Permits and Approvals. Except as otherwise provided for
-------------------------------
herein with respect to Site Acquisition, Microwave Relocation and Network
Interconnection, any Applicable Permits required by any Government Entity
relating to the manufacture, importation, re-exportation, safety or use of the
Products, the System or any PCS System throughout North America or in any state,
province or any political sub-division thereof will be the sole responsibility
of the Vendor. Prior to the commencement of any Work and/or other activities by
the Vendor or any of its Subcontractors in connection with or pursuant to this
Contract, the Vendor will furnish the Owner with evidence that such Applicable
Permits have been obtained and are in full force and effect to the extent that
Applicable Permits are necessary for the commencement or undertaking of such
activities, and from time to time thereafter the Vendor, upon the reasonable
request of the Owner, will provide such further evidence as the Owner will deem
reasonably necessary.
2.29 Eligibility under Applicable Laws and Applicable Permits. The Vendor
--------------------------------------------------------
will be responsible for ensuring that the Vendor and its Subcontractors are and
remain eligible under all Applicable Laws and Applicable Permits to perform the
Work under this Contract in the various jurisdictions involved.
2.30 Customs Approvals. The Owner agrees to reasonably assist, so long as
-----------------
such assistance will not involve the incurrence of any costs or expenses by the
Owner, the Vendor to obtain and maintain (i) Applicable Permits for importation
or re-exportation of the Products on a duty and customs free basis and (ii)
entry or work permits, visas or authorizations required for personnel engaged by
the Vendor to perform Work under this Contract.
<PAGE>
37
2.31 Owner Participation. In addition to the right of observation
-------------------
contained in subsection 9.4 hereof, the Owner will be entitled to participate in
the Vendor's research and development activities (subject to the reasonable
acceptance of the Vendor) and product development and testing activities
pursuant to this Contract; provided that such observation will not affect the
--------
Vendor's responsibilities and warranties hereunder and will not otherwise
interfere with the Vendor's research and development activities.
2.32 New Development Advisory Board. In order to accommodate the Owner's
------------------------------
participation pursuant to this Contract, including, without limitation, pursuant
to subsections 2.11 and 2.31, the Owner and the Vendor will establish an NDAB
within sixty (60) days of the Effective Date. The purpose of the NDAB will be
to review the development requirements and high level development milestones, to
ensure that the Vendor understands the Owner's requirements for each PCS System,
the System and/or any extensions thereto including, without limitation, any
subsequent Products and/or enhancements. The NDAB will provide an executive
forum to discuss product ideas, Owner requirements and its recommended
development prioritization for improved infrastructure-based subscriber features
and System features, functions and capabilities. The focus of the NDAB will be
on System features and services, new CDMA Products, System enhancements,
critical operational issues, future developments beyond CDMA cellular without
the need for System additions and on such other matters as the Parties mutually
agree upon from time to time. Nothing contained in this subsection 2.32 will in
any way limit and/or modify the Owner's ability to enforce its rights under this
Contract and/or the Contract Documents or to otherwise maintain contacts with
the Vendor in any other way it sees fit.
2.33 Market Development Manager. The Vendor will provide a market
--------------------------
development manager to coordinate the efforts of the Vendor in meeting its
obligations relating to the NDAB who will specifically focus on new Products,
CDMA services and features. Such market development manager must be
knowledgeable in CDMA technology and the Owner's System and must work closely,
and on a regularly scheduled basis, with the Owner's senior engineering and
marketing personnel on feature development, feature roll-out, future road maps
for CDMA Products, and any other marketing aspect of providing PCS that the
Owner believes is beneficial to the System and/or any PCS System at such time.
The Vendor's market development manager and the manager's staff will serve as
the Owner's direct liaison with the Vendor to ensure that the Vendor's product
development teams are focusing on the Owner's priorities as described to the
Vendor by the Owner from time to time either through the NDAB or by any other
means acceptable to the Parties.
2.34 Further Assurances. The Vendor will execute and deliver all further
------------------
instruments and documents, and take all further action, including, but not
limited to, assisting the Owner in filing notices of completion with the
appropriate state, provincial and local lien recording offices, that may be
necessary or that the Owner may reasonably request in order to enable the Vendor
to complete performance of the Work or to effectuate the purposes or intent of
this Contract.
<PAGE>
38
2.35 Liens and Other Encumbrances. (a) In consideration of the mutual
----------------------------
undertakings herein and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Vendor:
(i) covenants and agrees to protect and keep free the System and/or
any PCS System and any and all interests and estates therein, and all
improvements and materials now or hereafter placed thereon under the terms
of this Contract, from any and all claims, liens, charges or encumbrances
of the nature of mechanics, labor or materialmen liens or otherwise arising
out of or in connection with performance by any Subcontractor, including
services or furnishing of any materials hereunder, and to promptly have any
such lien released by bond or otherwise;
(ii) give notice of this subsection 2.35 to each Subcontractor before
such Subcontractor furnishes any labor or materials for the System and/or
any PCS System; and
(iii) make any and all filings reasonably requested by the Owner in
order that the Owner may take advantage of the relevant local mechanics'
lien waiver procedures with respect to mechanics' liens of any such
Subcontractor and the Owner will cooperate in helping the Vendor to fulfill
its obligation under this clause (iii) to the extent necessary.
(b) If any laborers', materialmen's, mechanics', or other similar lien or
claim thereof is filed by any Subcontractor, the Vendor will cause such lien to
be satisfied or otherwise discharged, or will file a bond in form and substance
satisfactory to the Owner in lieu thereof within ten (10) business days. If any
such lien is filed or otherwise imposed, and the Vendor does not cause such lien
to be released and discharged forthwith, or file a bond in lieu thereof, then,
without limiting the Owner's other available remedies, the Owner has the right,
but not the obligation, to pay all sums necessary to obtain such release and
discharge or otherwise cause the lien to be removed or bonded to the Owner's
satisfaction from funds retained from any payment then due or thereafter to
become due to the Vendor.
(c) The Owner reserves the right to post or place within the System and/or
any PCS System notices of non-responsibility or to do any other act required by
Applicable Law, to exempt the Owner and the System from any liability to third
parties by reason of any work or improvements to be performed or furnished
hereunder; provided that failure by the Owner to do so will not release or
-------- ----
discharge the Vendor from any of its obligations hereunder.
2.36 Forecasting and Ordering. Throughout the Term of this Contract, on a
------------------------
quarterly basis commencing on the Effective Date, the Owner will provide the
Vendor with rolling twelve-month forecasts of its ongoing Product and Service
requirements. Upon the review and reasonable acceptance of such forecasts by
the Vendor pursuant to the terms of this Contract, the Owner will have the
right, but not the obligation, to confirm to the Vendor its orders for the
Products and Services set forth in such forecasts pursuant to the Owner's
delivery to the Vendor of formal written orders specifying the Products and/or
Services to be purchased in connection with the terms of this Contract. The
Vendor's obligation to deliver
<PAGE>
39
in accordance with accepted forecasts will be subject to receipt of the Owner's
orders not later than eighty-four (84) days prior to delivery of commercially
available MSC Equipment and forty-two (42) days prior to delivery of
commercially available BTS Equipment; provided, however, that nothing contained
-------- -------
in this subsection 2.36 will in any way limit and/or modify the Vendor
obligations under this Contract to deliver Products and Services and to
otherwise do the Work in accordance with the Project Milestones set forth in
Exhibit A pursuant to the terms of this Contract.
2.37 Microwave Relocation; Network Interconnection. (a) The Vendor will
---------------------------------------------
not be responsible for Microwave Relocation within the System. Unless otherwise
waived by the Owner, however, completion of Microwave Relocation in any given
System Area will be a prerequisite to the commencement of the Substantial
Completion testing to be performed by the Vendor in accordance with Exhibit B3
in such System Area. The Owner may at its option choose instead to modify the
System performance criteria as set forth in Exhibit F by way of a Change Order
in order to account for the failure to fully and/or satisfactorily complete
Microwave Relocation in any such System Area such that Substantial Completion
testing in accordance with the requirements of Exhibit B3 may proceed.
Notwithstanding anything stated herein to the contrary (other than clause (b)
below), the Owner's failure and/or inability to fully complete Microwave
Relocation in any such System Area within eighteen (18) months of Milestone M6
(as set forth in Exhibit A1) (the "Microwave Delay Period") will entitle the
Vendor to otherwise commence Substantial Completion testing for the PCS System
in such System Area in accordance with Exhibit B3. Pursuant to the requirements
of Exhibits A1, B1 and B3 with respect to any PCS System within the System the
Owner may upon the prior written request of the Vendor consent (such consent not
to be unreasonably withheld) to extend the scheduling of the Vendor's
Substantial Completion testing by not more than an additional thirty (30) days
pursuant to Milestone M8 in the event that more than twenty-five percent (25%)
of the System Element Sites in such PCS System as set forth in the Final Site
Count for such PCS System require Vendor optimization pursuant to Exhibit B1
that was otherwise delayed due to incomplete Microwave Relocation in such PCS
System immediately prior to the date scheduled for Substantial Completion
testing pursuant to Milestone M8.
(b) The Vendor will not be responsible for Network Interconnection within
the System. Unless otherwise waived by the Owner, completion of Network
Interconnection in any given System Area will be a prerequisite to the
commencement of the Substantial Completion testing to be performed by the Vendor
in accordance with Exhibit B3 in such System Area. Notwithstanding anything
stated herein to the contrary (other than clause (a) above), if the Owner fails
to fully complete Network Interconnection in any such System Area within ninety
(90) days after Milestone 6 (as set forth on Exhibit A1), the Vendor will be
entitled to commence Substantial Completion testing for the PCS System in such
System Area in accordance with Exhibit B3.
2.38 Vendor To Inform Itself Fully; Waiver of Defense. (a) The Vendor
------------------------------------------------
will be deemed to have notice of and to have fully examined and approved the
Specifications and all other documents referred to herein, and all drawings,
specifications, schedules, terms and conditions of this Contract, regulations
and other information in relation to this Contract
<PAGE>
40
and/or the Contract Documents and/or any amendments, modifications or
supplements thereto at any time on or after the Effective Date and to have fully
examined, understood and satisfied itself as to all relevant information of
which the Vendor is aware or should have been aware and which is relevant as to
the risks, contingencies and other circumstances which could affect this
Contract and in particular the installation of the System, any PCS System or any
part thereof. The Owner, its directors, officers, employees and agents and all
of them have no liability in law or equity or in contract or in tort with
respect to any such specifications, drawings, information, risks, contingencies
or other circumstances.
(b) The fact that the Owner may have prepared or taken part in the
preparation of Specifications, documents, drawings, Engineering, designs,
specifications, schedules, terms or conditions, or may have designated
particular types of Products and/or Services to be furnished hereunder or
designated particular manufacturers or suppliers of Products or Services, or may
have taken part in the designation of any particular Subcontractor(s) or
subcontractor(s), or given vetoes or approvals with respect to the Work, or
otherwise become involved in the Work, will not give rise to any claim by the
Vendor or any Subcontractor or any defense to any warranty or other claims
asserted against the Vendor or any Subcontractor to the extent any such claim or
defense arises out of any information, specifications, drawings, documents or
other information, which the Vendor is deemed to have had notice of pursuant to
subsection 238(a) above and with respect to any such information arising after
the Effective Date which the Vendor had a reasonable opportunity to review.
2.39 CMI/HIC. From time to time throughout the Term of this Contract the
-------
Parties may mutually agree as to the incorporation and integration of CMI/HIC
into the System in accordance with Exhibit D.
SECTION 3 AFFILIATES
3.1 Additional Affiliates. On a quarterly basis commencing on the
---------------------
Effective Date and during the term of this Contract, the Owner may, upon fifteen
(15) days' prior written notice to the Vendor, designate any Person which is not
an Initial Affiliate as an "Additional Affiliate"; provided that the Vendor will
-------- ----
have a reasonable opportunity to review and approve such designation, such
approval not to be unreasonably withheld, based upon (i) reasonable credit
criteria within the context of the PCS industry, (ii) the fact that such
proposed Additional Affiliate has not in the past materially breached prior
material agreements with the Vendor, (iii) the fact that the proposed Additional
Affiliate is not, at the time of such determination, a direct competitor to the
Vendor in the wireless telecommunications business and (iv) the fact that the
proposed Additional Affiliate is not, at the time of such determination,
otherwise engaged with the Vendor in a material agreement for the purchase
and/or supply of PCS CDMA wireless technology; and provided, further, that (x)
-------- -------
the Owner, any Partner or any Initial Affiliate has at least a ten percent (10%)
equity ownership in such Person, (y) such Person is controlled by or under the
common control with the Owner, any Partner or any Initial Affiliate or (z) there
exists between the Owner and such Person an Additional Affiliate Arrangement.
<PAGE>
41
3.2 Agreements with Initial Affiliates. During the term of this Contract,
----------------------------------
the Owner will have the right, but not the obligation, to require that the
Vendor enter into separate agreements with any Initial Affiliate designated by
the Owner (each, an "Initial Affiliate Agreement") for the supply of Products
and Services on similar terms and conditions as those set forth herein that
relate to the initial build-out of the Initial System as set forth on Schedule
4; provided that the Vendor will not be required to include in any Initial
-------- ----
Affiliate Agreement any provisions substantially similar to those set forth in
Section 15 and subsections 2.5, 21.1, 24.1 and 27.5; and provided further that
-------- -------
after the date on which Final Acceptance of the last PCS System to reach Final
Acceptance has occurred, Initial Affiliate Agreements (whether or not executed
prior to such date) need not contain or retain substantially the same terms and
conditions as those set forth herein, except for those terms and conditions
related to pricing and warranties as are then available to the Owner pursuant to
this Contract. Any Initial Affiliate that enters into an Initial Affiliate
Agreement with the Vendor will have the right to choose among the Products and
Services offered to the Owner under this Contract solely for use within the
Nationwide Network.
3.3 Agreements with Additional Affiliates. During the term of this
-------------------------------------
Contract, the Owner will have the right, but not the obligation, to require that
the Vendor enter into separate agreements with any Additional Affiliate
designated by the Owner (each, an "Additional Affiliate Agreement") for the
supply of Products and Services at similar price and warranty terms as are then
available to the Owner pursuant to the terms of this Contract. The Vendor must
enter into good faith negotiations for the establishment of such Additional
Affiliate Agreements with any such Additional Affiliate promptly upon the
designation of such Additional Affiliate by the Owner and upon notice to the
Vendor that such Additional Affiliate desires to enter into an Additional
Affiliate Agreement. Any Additional Affiliate that enters into an Additional
Affiliate Agreement with the Vendor will have the right to choose among the
Products and Services offered to the Owner under this Contract solely for use
within the Nationwide Network.
3.4 Affiliate Rights. Notwithstanding anything herein contained to the
----------------
contrary, Affiliates will not be deemed third party beneficiaries to this
Contract or otherwise have any rights hereunder. Only the Owner may designate a
Person as an Affiliate in accordance with the terms of this Section 3 and only
the Owner has the right and/or the ability to enforce any rights hereunder
against the Vendor.
SECTION 4 SUBCONTRACTORS
4.1 Subcontractors. The Vendor will select Subcontractors in connection
--------------
with the performance of the Work such that all Products and Services provided by
any such Subcontractors meet the System Standards and reliability and
performance requirements set forth in this Contract. Regardless of whether or
not the Vendor obtains approval from the Owner of a Subcontractor or whether the
Vendor uses a Subcontractor recommended by the Owner, use by the Vendor of a
Subcontractor will not, under any circumstances: (i) give rise to any claim by
the Vendor against the Owner if such Subcontractor breaches its subcontract or
contract with the Vendor; (ii) give rise to any claim by such Subcontractor
against the
<PAGE>
42
Owner; (iii) create any contractual obligation by the Owner to the
Subcontractor; (iv) give rise to a waiver by the Owner of its rights to reject
any Defects or Deficiencies or Defective Work; or (v) in any way release the
Vendor from being solely responsible to the Owner for the Work to be performed
under this Contract.
4.2 The Vendor's Liability. The Vendor is the general contractor for the
----------------------
Work and remains responsible for all of its obligations under this Contract,
including the Work, regardless of whether a subcontract or supply agreement is
made or whether the Vendor relies upon any Subcontractor to any extent. The
Vendor's use of Subcontractors for any of the Work will in no way increase the
Vendor's rights or diminish the Vendor's liabilities to the Owner with respect
to this Contract, and in all events, except as otherwise expressly provided for
herein, the Vendor's rights and liabilities hereunder with respect to the Owner
will be as though the Vendor had itself performed such Work. The Vendor will be
liable for any delays caused by any Subcontractor as if such delays were caused
by the Vendor.
4.3 No Effect of Inconsistent Terms in Subcontracts. The terms of this
-----------------------------------------------
Contract shall in all events be binding upon the Vendor regardless of and
without regard to the existence of any inconsistent terms in any agreement
between the Vendor and any Subcontractor whether or not and without regard to
the fact that the Owner may have directly and/or indirectly had notice of any
such inconsistent term.
4.4 Assignability of Subcontracts to Owner. The Vendor will use its best
--------------------------------------
efforts to ensure that each material agreement between the Vendor and a
Subcontractor must contain a provision stating that, in the event that the
Vendor is terminated for cause, convenience, abandonment of this Contract or
otherwise, (i) each Subcontractor will continue its portion of the Work as may
be requested by the Owner and (ii) such agreement permits assignment thereof
without penalty to the Owner and, in order to create security interests, to the
Other Vendors, in either case at the option of the Owner and for the same price
and under the same terms and conditions as originally specified in such
Subcontractor's agreement with the Vendor. Furthermore, the Vendor will use its
best efforts to ensure that each material agreement between the Vendor and a
Subcontractor contains a provision stating that such agreement may be made
available in whole or in part to the Owner at its reasonable request without
causing the violation and/or breach of any such agreement. In the event the
Vendor is unable to ensure each such material Subcontractor agreement complies
with all of the requirements of this subsection 4.4 to the Owner, the Vendor
will notify the Owner of its inability to do so prior to executing such
arrangement with such Subcontractor and the Vendor will provide the Owner a
reasonable opportunity to determine whether it requires any such requirement in
question and if the Owner determines in its reasonable opinion that it in fact
requires such requirement the Vendor will not execute such Subcontractor
agreement without first obtaining the prior written consent of the Owner.
4.5 Removal of Subcontractor or Subcontractor's Personnel. The Owner has
-----------------------------------------------------
the right at any time to require removal of a Subcontractor and/or any of a
Subcontractor's personnel from Work on the System upon reasonable grounds and
reasonable prior written notice to the Vendor. The exercise of such right by
the Owner will have no effect on the provisions of subsections 4.1 and 4.2.
<PAGE>
43
4.6 Subcontractor Insurance. The Vendor must require all Subcontractors
-----------------------
to obtain, maintain and keep in force during the time they are engaged in
providing Products and Services hereunder adequate insurance coverage consistent
with Section 18 and Schedule 6 (provided that the maintenance of any such
Subcontractor insurance will not relieve the Vendor of its other obligations
pursuant to Section 18 and Schedule 6). The Vendor will, upon the Owner's
request, furnish the Owner with evidence of such insurance in form and substance
reasonably satisfactory to the Owner. To the extent requested by the Owner all
such insurance will be subject to the Owner's reasonable approval. All
Subcontractors must be of bondable financial condition.
4.7 Review and Approval not Relief of Vendor Liability. Any inspection,
--------------------------------------------------
review or approval by the Owner permitted under this Contract of any portion of
the Work by the Vendor or any Subcontractor will not relieve the Vendor of any
duties, liabilities or obligations under this Contract.
4.8 Vendor Warranties. Except as otherwise expressly provided in Section
-----------------
17, the warranties of the Vendor pursuant to Section 17 will be deemed to
apply to all Work performed by any Subcontractor as though the Vendor had itself
performed such Work. Except as otherwise specifically provided in Section 17,
the Parties agree that such warranties will not be enforceable merely on a
"pass-through" basis. The Owner may, but shall not be obligated to, enforce
such warranties of any Subcontractor to the extent that the Owner determines
that the Vendor is not paying and/or performing its warranties; provided that
-------- ----
any such election by the Owner will not relieve the Vendor from any obligations
or liability with respect to any such warranty.
4.9 Payment of Subcontractors. The Vendor must make all payments to all
-------------------------
Subcontractors (except in the case of legitimate disputes between the Vendor and
any such Subcontractor arising out of the agreement between the Vendor and such
Subcontractor) in accordance with the respective agreements between the Vendor
and its Subcontractors such that Subcontractors will not be in a position to
enforce liens and/or other rights against the Owner, the System or any part
thereof.
SECTION 5 TERM OF CONTRACT
5.1 Initial Term. The initial term of this Contract (the "Initial Term")
------------
is ten (10) years from the Effective Date, subject to the terms and conditions
of this Contract including, without limitation, the termination provisions set
forth in Section 24.
5.2 Renewal. This Contract is subject to renewal for one year periods
-------
(all such periods plus the Initial Term, the "Term") following the expiration of
the Initial Term, on the same terms and conditions contained herein, unless
either Party gives notice to each other Party of its intention not to renew this
Contract within ninety (90) days prior to the expiration of the then current
Term.
<PAGE>
44
SECTION 6 PRICES AND PAYMENT
6.1 Prices. The prices for the Work to be performed pursuant to this
------
Contract (collectively, the "Contract Price") are as set forth on Schedules 2
and 3, subject to the price variation provisions contained on Schedule 2.
Prices for the Work not set forth on Schedules 2 or 3, if not otherwise set
forth in this Contract, will be no greater than the Vendor's best list prices
then in effect at the time of ordering by the Owner and at discounts otherwise
provided to the Owner pursuant to the terms of this Contract.
6.2 Price Reduction. The Contract Price will be reduced by all amounts
---------------
saved as a result of Engineering changes suggested by the Owner which are
incorporated into the Specifications by the Vendor provided that the Vendor
--------
reasonably believes that such changes will not make it impossible or
impracticable for it to comply with any of its obligations under this Contract.
Any reduction in Contract Price pursuant to the preceding sentence will be
agreed upon promptly by the Owner and the Vendor. Failure of the Parties to
mutually agree to such price reductions within ten (10) days from the date the
Owner delivered written notice to the Vendor of the need for such price
reduction due to incorporated Engineering changes will result in the automatic
reference of such matter to dispute resolution in accordance with subsection
23.1. During the pendency of any such dispute resolution prices payable
pursuant to subsection 6.1 will be payable by the Owner to the Vendor at the
reduced level pursuant to this subsection 6.2 so long as such dispute resolution
pursuant to this subsection 6.2 does not exceed thirty (30) days; provided that
-------- ----
in the event such dispute resolution exceeds thirty (30) days prices in question
pursuant to this subsection 6.2 will revert back to the level prior to the
Owner's invocation of this subsection 6.2 for the remaining period of any such
dispute resolution. If in accordance with subsection 23.1 such dispute
resolution results in a finding that such price reduction was not in fact
justified then the Owner will refund to the Vendor the amounts that would
otherwise have been payable to the Vendor during the pendency of such dispute
resolution.
6.3 Payments. Except with respect to Facilities Preparation Services and
--------
RF Engineering as set forth below, an invoice may be submitted to the Owner only
after shipment of a Product or performance of a Service. Invoices for Products
delivered and Services performed on or prior to Final Acceptance of the PCS
System to which such invoices relate are payable in the following manner:
(a) fifteen percent (15%) of the total amount due under subsection 6.1 will
be paid within thirty (30) days from receipt of the invoice by the Owner;
(b) sixty-five percent (65%) of the total amount due under subsection 6.1
will be paid within thirty (30) days from the later of (i) Substantial
Completion of the PCS System to which such invoice relates or (ii) receipt of
the invoice by the Owner; and
(c) twenty percent (20%) of the total amount due under subsection 6.1 will
be paid within thirty (30) days from the later of (i) Final Acceptance of the
PCS System to which such invoice relates or (ii) receipt of the invoice by the
Owner.
<PAGE>
45
Notwithstanding the foregoing, (i) invoices for RF Engineering for each PCS
System will be payable in accordance with subsection 6.4(b) below and (ii)
invoices for Facilities Preparation Services within any PCS System will be
submitted by the Vendor in accordance with the terms of Exhibit B2 and will be
payable by the Owner with respect to each System Element Facility within forty-
five (45) days after the date of acceptance by the Owner of any such System
Element Facility in accordance with the terms of Exhibit B2.
Any invoice for Products delivered and installed by the Vendor or its
Subcontractors and Services performed by the Vendor or its Subcontractors after
Final Acceptance of the PCS System to which such invoice relates will be payable
as follows: [ ] of the amount of the invoice will be payable within forty-five
(45) days following receipt of such installed Products by the Owner or the full
performance of the Services by the Vendor and the outstanding balance will be
payable upon final acceptance by the Owner of the Products or Services to which
such invoice relates pursuant to section B.3.5 of Exhibit B3. Any invoice for
Products delivered by the Vendor but not installed by the Vendor or its
Subcontractors after Final Acceptance of the PCS System to which such invoice
relates will be payable by the Owner at the level of [ ] of the amount of
such invoice within forty-five (45) days from the date of delivery of such
invoice to the Owner.
6.4 Payments for Facilities Preparation Services and RF Engineering
---------------------------------------------------------------
Services. (a) The Vendor will pay each Subcontractor for Facilities
- - - --------
Preparation Services the amount to which each Subcontractor is entitled pursuant
to such Subcontractor's agreement with the Vendor, based on each Subcontractor's
portion of such Work. By appropriate agreement in each Subcontractor's
agreement with the Vendor, the Vendor will require such Subcontractor to make
payments to sub-Subcontractors and materialmen in a similar manner. The Owner
shall have no obligations to pay any amount other than for Facilities
Preparation Services performed and shall have no obligations to pay any other
amount to which a Subcontractor may be entitled pursuant to its agreement with
the Vendor including, without limitations, any indemnity damage or penalty. The
Owner has no duty or obligation to insure the payment of money to a
Subcontractor, sub-Subcontractor, materialman or any other third party, any such
payment being the obligation of the Vendor. Subcontractors, sub-Subcontractors,
materialmen and any other third parties will not be deemed third party
beneficiaries of the Owner's obligations to pay the Vendor. On or before the
Owner's acceptance of the Facilities Preparation Services of any System Element
Facility within any given PCS System in accordance with the terms of Exhibit B2,
the Owner will have received details (in a form reasonably satisfactory to the
Owner) of all invoices and charges for such Facilities Preparation Services
incurred by the Vendor in connection with the Facilities Preparation Services
for such System Element Facility.
(b) The Owner will make payment to the Vendor for RF Engineering Services
performed by the Vendor within any given System Area pursuant to the terms of
this Contract based upon the following: (i) [ ] of the "RF Engineering
Services price" within the applicable System Area will be payable by the Owner
within forty-five (45) days after receiving the Preliminary RF Design for such
System Area pursuant to Milestone M2 for such System Area as set forth on
Exhibit A1; (ii) [ ] of the RF Engineering Services price within the
applicable PCS System will be payable by the Owner within forty-
<PAGE>
46
five (45) days after the determination of the Final Site Count and delivery of
the Final RF Design for such PCS System in accordance with subsection 2.6 and
Milestone M5 for such System Area as set forth on Exhibit A1; and (iii) [ ] of
the RF Engineering Services price will be payable by the Owner within the
applicable PCS System within forty-five (45) days of the Vendor's Installation
of the Products for such PCS System in accordance with the terms of the Contract
and Milestone M7 for such System Area as set forth on Exhibit A1. For the
purposes of this subsection 6.4(b) the term "RF Engineering Services price"
shall mean the number of System Element Facilities within the applicable PCS
System pursuant to the build-out of the Initial System multiplied by the
Vendor's System Element Facility RF Engineering price as set forth on Schedule
3. In any given PCS System and/or System Area the RF Engineering Services price
shall be readjusted (and any amounts owed to either Party will be reimbursed) at
the point in time that payment would be made for such RF Engineering pursuant to
clause (iii) of this subsection 6.4(b) in accordance with the determination of
the actual Final Site Count and delivery of Final RF Design applicable to such
PCS System.
6.5 Monthly Forecasts. Commencing on the Effective Date, the Vendor will
-----------------
provide the Owner with monthly forecasts of the costs of RF Engineering and
Facilities Preparation Services in each PCS System in which such Services are
being provided by the Vendor and/or any of its Subcontractors throughout the
period that any such Services are being provided during the Term of this
Contract. The forecasts provided by the Vendor pursuant to this subsection 6.5
must be in sufficient detail to reasonably inform the Owner of the nature of the
costs to be incurred for each of RF Engineering and Facilities Preparation
Services in each of the PCS Systems in which such Services are being provided by
the Vendor and/or any of its Subcontractors pursuant to the terms of this
Contract.
6.6 No Payment in Event of Material Breach. Notwithstanding any other
--------------------------------------
provision to the contrary contained herein, within any given PCS System the
Owner will have no obligation to make any payment for work done in such PCS
System in addition to amounts previously paid to the Vendor at any time the
Vendor is in material breach of this Contract with respect to such PCS System
(whether within the Initial System or otherwise) until and unless such material
breach is cured or waived by the Owner in accordance with the terms of this
Contract.
6.7 Microwave Relocation Delay Partial Payments. In the event of a delay
-------------------------------------------
in the Owner's completion of Microwave Relocation in any given PCS System
pursuant to and in accordance with subsection 2.37 during the Microwave Delay
Period within such PCS System, the Owner agrees to pay to the Vendor (i) [ ]
provided that Substantial Completion of such PCS
- - - -------- ----
<PAGE>
47
System will have been achieved by the Vendor in accordance with the terms of
this Contract and Exhibit B3.
SECTION 7 ORDERS AND SCHEDULING
7.1 Initial Commitment. Subject to subsection 7.3 and to subsection 2.6
------------------
and the determination of the Final Site Count and the delivery of the Final RF
Engineering Plan for each PCS System, the Parties understand that the Products
and Services identified on Schedule 13 constitute the Owner's initial purchase
commitment under this Contract (the "Initial Commitment").
7.2 Minimum Commitment. The Minimum Commitment of the Owner to the Vendor
------------------
pursuant to this Contract is an amount of Services and Products purchased by the
Owner from the Vendor under this contract constituting an aggregate amount
payable to the Vendor based upon the pricing set forth in this Contract of not
less than one billion dollars ($1,000,000,000) (the "Minimum Commitment").
7.3 Change Orders. The Owner has the right by way of written orders
-------------
("Change Orders") to request Expansions and/or other revisions in the Work,
including but not limited to the Specifications, the manner of performance of
the Work or the timing of the completion of the Work; provided that specific
-------- ----
Change Orders will be submitted to the Vendor and the Vendor will be entitled to
make reasonable price and/or Project Milestone adjustments to the Contract Price
(subject to the Owner's agreement) in the case of material modifications. The
Vendor must promptly notify the Owner of any such requested change or changes to
Products which may materially affect the operation and/or maintenance of the
System, any PCS System or any part thereof. The Parties agree that within
fifteen (15) business days after the Owner's initial request for a Change Order
pursuant to this subsection 7.3 they will mutually agree to all aspects of such
Change Order, which agreement shall be evidenced by a writing executed by an
authorized representative of each of the Parties. In the event the Vendor
refuses to agree to any such Change Order within such fifteen (15) day period
then the Vendor will provide a written notice to the Owner detailing its reasons
for such refusal and if the Owner, at such time, disagrees with the reasons set
forth in such Vendor notice the matter will then be referred to dispute
resolution pursuant to Section 23.
7.4 Cancellation. During the term of this Contract, and subject to
------------
Section 24, the Owner will have the right, but not the obligation, at any time
to cancel, in whole or in part, any order made pursuant to the terms of this
Contract upon advance written notice to the Vendor. In the event of a
cancellation permitted hereunder, the Owner will pay to the Vendor order
cancellation charges in accordance with, and pursuant to, the terms of Schedule
11.
7.5 Supply of Additional Products. During the Term of this Contract (but
-----------------------------
in no event less than ten (10) years from the Effective Date) and for a period
of three (3) years thereafter, the Vendor will make available for purchase by
the Owner, on terms and conditions, as applicable, set forth in subsection 2.2,
subsection 6.3, as otherwise set forth in this Contract or as otherwise mutually
agreed between the Parties, Vendor Products to enable
<PAGE>
48
the Owner to expand the System and/or any PCS System and/or any part thereof,
which Products will provide equivalent functionality for and will be compatible
with the System or any such PCS System at such time.
SECTION 8 INSTALLATION
8.1 Installation. The Vendor will furnish and install the Products
------------
pursuant to the Project Milestones set forth on Exhibit A and in accordance with
the requirements and criteria set forth in Exhibit D. In accordance with the
Project Milestones set forth on Exhibit A, the Vendor will complete all Product
Installation in any given PCS System in conformance with the requirements and
criteria set forth in Exhibit D within three (3) days of completion of the
Facilities Preparation Services in such PCS System.
8.2 No Interference. The Vendor will install the Products and build each
---------------
of the PCS Systems so as to cause no unauthorized interference with or
obstruction to lands and thoroughfares or rights of way on or near which the
Installation work may be performed. The Vendor must exercise every reasonable
safeguard to avoid damage to existing facilities, and if repairs or new
construction are required in order to replace facilities damaged by the Vendor
due to its carelessness, negligence or willful misconduct, such repairs or new
construction will be at the Vendor's sole cost and expense.
SECTION 9 ACCEPTANCE TESTING AND ACCEPTANCE
9.1 Acceptance Testing. The Vendor must carry out the Acceptance Tests on
------------------
the Products and the PCS Systems as specified in Exhibit B3 and each PCS System
must successfully achieve acceptance (including Substantial Completion and Final
Acceptance) in accordance with the terms of Exhibit B3.
9.2 Costs and Expenses. The costs and expenses of such Acceptance Tests
------------------
will be borne by the Vendor, and the Owner will not be charged or billed for
such costs and expenses. If the Acceptance Tests performed by the Vendor are
not satisfied in accordance with the relevant requirements of Exhibit B3 or are
otherwise inconclusive in the reasonable judgment of the Owner, the Owner will
have the right to order further Acceptance Tests at the sole cost and expense of
the Vendor.
9.3 Notification. The Vendor will notify the Owner at least ten (10) days
------------
prior to the performance of any Acceptance Tests. Prior to or at the first
practicable date after such notification, the Vendor and the Owner will each
agree upon and approve any test forms to be used as part of the particular
Acceptance Test being conducted.
9.4 Presence at Acceptance Tests. The Owner and its representatives will
----------------------------
be permitted to witness and have unrestricted access to the Vendor's and its
Subcontractors' Acceptance Tests.
<PAGE>
49
9.5 Correction of Defects. If any Acceptance Test is not satisfied, the
---------------------
Vendor will, at its sole cost and expense, (i) in writing, notify the Owner of
such failure, and (ii) promptly correct whatever Defects or Deficiencies caused
such Acceptance Test not to be satisfied. After such correction, the Vendor
must (i) repeat at its sole cost and expense the failed Acceptance Tests and as
many other Acceptance Tests as are necessary to ensure in the reasonable opinion
of the Owner that such correction made by the Vendor would not have affected the
outcome of such other Acceptance Tests, and (ii) in writing, notify the Owner as
to what correction was made and what Acceptance Tests were repeated.
9.6 Acceptance Certificate. Upon the successful completion of the
----------------------
Acceptance Tests for a PCS System or any part thereof conducted by the Vendor,
the Vendor must submit to the Owner an Acceptance Certificate certifying that
(i) such Acceptance Tests have been successfully completed, (ii) the Work so
tested has been completed in accordance with the terms of this Contract, and
(iii) if applicable, that the remainder of the Work is continuing in accordance
with the Project Milestones set forth on Exhibit A. Upon its reasonable
satisfaction that such Acceptance Certificate is correct and complete, the Owner
will acknowledge such certification by signing the Acceptance Certificate. In
the event of any dispute as to the results of any Acceptance Tests, such dispute
will be resolved pursuant to the dispute resolution mechanisms set forth in
subsection 23.1.
SECTION 10 DISCONTINUED PRODUCTS
10.1 Notice of Discontinuation. During the Term of this Contract, the
-------------------------
Vendor agrees to provide the Owner, or the respective Affiliates as the case may
be, not less than ninety (90) business days' prior written notice of its intent
to discontinue any Product being supplied by the Vendor to the Owner and/or any
Affiliate in connection with the terms of this Contract.
10.2 Discontinuation During Warranty Period. In the event that the Vendor
--------------------------------------
discontinues the manufacture of a Product ("Discontinued Products"), the Vendor
will promptly notify the Owner of such discontinuance. The Vendor, at its
option, may continue to make such Discontinued Products available to the Owner.
If, during the applicable Warranty Period thereof pursuant to Section 17, the
Vendor does not make such Products which were previously purchased by the Owner
and have become Discontinued Products available to the Owner, the price of any
Products provided as a replacement for the Discontinued Product by the Vendor
and required to be purchased by the Owner during such Warranty Period in order
to maintain performance and functionality equivalent to that previously provided
by the Discontinued Products will be discounted by an amount equal to 65% of the
price previously paid for such Discontinued Products.
10.3 Discontinuation After Warranty Period. In the event that the Vendor
-------------------------------------
discontinues the manufacture of a Product following the expiration of the
applicable Warranty Period and the Owner is required to replace a Product which
was previously purchased by the Owner and has become a Discontinued Product in
order to maintain performance and functionality, the Owner will receive a credit
in an amount equal to the percentage set forth
<PAGE>
50
below multiplied by the purchase price paid for such original Product, which
credit will be applied against the Vendor's then-current list price for a
replacement for such Discontinued Product; provided that the credit will not
-------- ----
exceed the Vendor's then-current best price for such replacement Product subject
to the discounts available to the Owner pursuant to the terms of this Contract:
(i) up to and including one year following expiration of the
applicable Warranty Period: forty percent (40%);
(ii) more than one year and up to and including two years following
expiration of the applicable Warranty Period: thirty percent
(30%);
(iii) more than two years and up to and including three years following
expiration of the applicable Warranty Period: twenty percent
(20%); and
(iv) more than three years and up to and including four years
following expiration of the applicable Warranty Period: ten
percent (10%).
SECTION 11 SOFTWARE; CONFIDENTIAL INFORMATION
11.1 RTU License. The Owner is hereby granted a perpetual, non-exclusive,
-----------
non-transferable (except as set forth in subsections 11.5 and 27.4), fully paid-
up, worldwide multi-site (capability to move Software from site to site) right
to use ("RTU") license for the Software ("RTU License"), to operate each of the
PCS Systems and to operate the System as a whole subject to the payment of the
appropriate license fees pursuant to and in accordance with the terms of this
Contract. Except as otherwise provided herein, the Owner is granted no title or
ownership rights to the Software. Such rights will remain with the Vendor or
its Subcontractors, as appropriate.
11.2 Additional Copies. The Vendor must provide two (2) additional copies
-----------------
of the Software to the Owner for use in the Test-bed Laboratory and in
accordance with Exhibit I at no additional charge or expense; provided that such
-------- ----
copies will be used for testing and validation purposes only.
11.3 Owner's Obligations. The Owner agrees that the Software, whether or
-------------------
not modified, will be treated as proprietary and the Owner will:
(a) Utilize the Software solely in conjunction with the System and/or any
PCS System; provided that the Vendor acknowledges that the Software will be
-------- ----
connected in a working manner with systems, equipment and software provided by
other suppliers and customers including, but not limited to, the Other Vendors;
<PAGE>
51
(b) Ensure that all copies of the Software will, upon reproduction by the
Owner and whether or not in the same form or format as such Software, contain
the same proprietary and confidentiality notices or legends which appear on the
Software provided pursuant hereto; and
(c) Hold secret and not disclose the Software to any person, except to (i)
such of its employees, contractors, agents or Affiliates that are involved in
the operation or management of the System and/or any PCS System or otherwise
need to have access thereto to fulfill their duties in such capacity, or (ii)
other Persons (other than the Other Vendors except to the extent required for
the implementation of Exhibit G pursuant to the terms of this Contract) who need
to use the Software to permit connection in a working manner of the System
and/or any PCS System with systems and software of other suppliers and customers
including, but not limited to, the Other Vendors; provided that such other
-------- ----
Persons (and/or the contractors or agents described in clause (i) above agree,
or are otherwise obligated, to hold secret and not disclose the Software to the
same extent as if they were subject to this Contract.
11.4 Backwards Compatibility. (a) In addition to the warranties
-----------------------
contained in Section 17 of this Contract, the Vendor represents and warrants
that each Software Revision Level during the Term of this Contract will be
Backwards Compatible with all existing in-service Equipment and all previous
Software Revision Levels of the Software made available to the Owner by the
Vendor during the three (3) year period prior to the date each such current
Software Revision Level is first made available to Owner. So long as the Owner
has opted to deploy any one of the last two (2) consecutive Software Revision
Levels prior to the current Software Revision Level, the Owner will not be
required to purchase more than one Software Revision Level of the Software at
each System Element Location to achieve the functionality and features of the
most current Software Revision Level of the Software and to maintain Backwards
Compatibility.
(b) In the event that Software supplied by the Vendor for any System
Element at any time does not provide Backwards Compatibility as required by this
subsection 11.4, then the Vendor will provide, without charge to the Owner, the
Software Upgrades of the Software to such System Element, and otherwise take
such steps as may be necessary to achieve Backwards Compatibility.
11.5 Assignment. The Owner and any successor to the Owner's title in the
----------
Products has the right (subject to written approval from the Vendor, which
approval will not be unreasonably withheld), to assign the Software licenses to
any other Person who acquires legal title to the Products including, but not
limited to, any Person or Persons taking part in the financing of any part of
the Nationwide Network provided that no such assignment to Persons taking part
-------- ----
in the financing of any part of the Nationwide Network will be permitted except
in accordance with the provisions of subsection 27.4 of this Contract. The
Vendor also hereby grants to the Owner the right to sublicense the Software
Licenses to any Affiliate.
11.6 Survival. The obligations of the Owner under the Software Licenses
--------
will survive the termination of this Contract, regardless of the cause of
termination.
<PAGE>
52
11.7 Access to Source Codes. The Vendor grants the Owner a right to
----------------------
modify (the "RTM License") for the maintenance, modification and support of
those Products purchased from the Vendor and owned or operated by the Owner.
The RTM License does not permit access to Source Codes, except as set forth in
this Contract and in the Escrow Agreement under the following circumstances:
(a) If the Vendor becomes insolvent, makes a general assignment for the
benefit of creditors, files a voluntary petition in bankruptcy or an involuntary
petition in bankruptcy is filed against the Vendor which is not dismissed within
sixty (60) days, or suffers or permits the appointment of a receiver for its
business, or its assets become subject to any proceeding under a bankruptcy or
insolvency law, domestic or foreign, or has liquidated its business, or the
Vendor, or a business unit of the Vendor that is responsible for maintenance of
the Software, ceases doing business without providing for a successor, or the
Owner has reasonable cause to believe that any such event will occur; or
(b) Pursuant to the dispute resolution mechanisms set forth in subsection
23.1, it is determined that the Vendor or its transferee or assignee has proved
unwilling, or is otherwise unable, to provide the warranty service or support of
the System and/or any PCS System contemplated by this Contract.
11.8 Escrow Agreement. The Vendor agrees to become a party to a Source
----------------
Code escrow agreement (the "Escrow Agreement") which will enable the Owner to
obtain access to the applicable Source Codes in any of the circumstances set
forth in subsection 11.7. The Vendor shall do so promptly and cooperatively
upon the first to occur of the following events: (i) before Substantial
Completion of the last PCS System within the Initial System, upon the Owner
declaring to the Vendor in writing that any one of the occasions enumerated in
the alternative in subsection 11.7(a) has been realized; or (ii) after the
Substantial Completion of the last PCS System within the Initial System, upon
the Owner declaring over the signature of an officer of the Owner that the Owner
elects, in its sole discretion, to call upon the Vendor to enter into such an
Escrow Agreement. The Owner will pay all costs associated with such Escrow
Agreement including but not limited to the Vendor's reasonable Source Code
gathering costs in connection with such Escrow Agreement. The Vendor
represents, warrants and agrees that (i) the Source Codes delivered into escrow
in accordance with the Escrow Agreement will comprise the full Source Code
language statement of the Software as used, or required to be used, by the
Vendor to maintain or modify the System and/or any PCS System without the help
of any other Person or reference to any other material, (ii) such Source Codes
will include all relevant versions thereof, and (iii) such Source Codes must be
kept up to date, including all updates needed to maintain compliance with the
Specifications and the System Standards. In addition, all parts of the Source
Codes and all updates thereto (including, without limitation, those that are
necessary to maintain compliance with the Specifications) must be delivered into
escrow in accordance with the Escrow Agreement.
11.9 Software Maintenance. The Vendor represents and warrants that the
--------------------
Software delivered to the escrow agent pursuant to subsection 11.8 and to the
Owner pursuant to the Escrow Agreement will be in a form suitable for
reproduction by the Owner and will include
<PAGE>
53
the full Source Code language statement of the Software as used by the Vendor
sufficient to allow the Owner to maintain or modify the System without the help
of any other Person or reference to any other material.
11.10 Custom Software. 11.10.1 Request for Custom Material. (a) From
--------------- ---------------------------
time to time, the Owner may have requirements for custom Software or custom
development of Equipment to be provided by the Vendor under this Contract (the
"Custom Material"). If the Owner has a requirement for Custom Material that is
a specific enhancement or modification of a previously licensed feature or of
previously purchased Products, the Owner will identify to the Vendor in writing
a summary of any such proposed development of Custom Material. Such summary
will provide a description of any proposed Custom Material sufficient to enable
the Vendor to determine the general demand for, and its plans, if any, to
develop the same or similar Products. The Vendor will respond to such summary
within ten (10) days after receipt thereof and indicate if it has the ability to
fulfill a subsequent Request for Proposal ("RFP") from the Owner for such
development of Custom Material.
(b) If the Vendor decides after reasonable review that it does not have
the technical ability or the capacity to fulfill a subsequent RFP for such
Custom Material development, the Vendor will (i) provide the Owner no later than
twenty (20) days from the date of receiving the initial request from the Owner
pursuant to this subsection 11.10 a detailed explanation of why it cannot
fulfill such RFP and (ii) use its best efforts to make available to the Owner an
alternative route for such development reasonably acceptable to the Owner.
(c) In the event the Vendor fails to agree to a request for Custom
Material development pursuant to the terms of this subsection 11.10 then the
matter will be referred to dispute resolution pursuant to Section 23.
11.10.2 Vendor Response. After reviewing such RFP, the Vendor will
---------------
respond to the Owner within ten (10) business days, stating the terms and
conditions upon which the Vendor would be willing to undertake such development,
including, but not limited to, a listing of specifications, ownership rights,
custom development charges, planned license fees and a proposed delivery
schedule provided, however, that no response shall require the Owner to forfeit
-------- -------
rights of invention or authorship otherwise arising under law or as a condition
of contracting with the Vendor for such Custom Developments, and in any event
the Vendor will use its best efforts to provide the Owner full ownership rights
to such Custom Developments where practical.
11.10.3 Ownership of Intellectual Property. The Vendor will own or
----------------------------------
have valid and enforceable licenses to use, transfer or distribute all forms of
intellectual property rights (including, but not limited to, patent, trade
secret, copyright and mask rights) pertaining to Products, and will have the
right to file for or otherwise secure and protect such rights. The foregoing
notwithstanding, the Parties understand and agree that from time to time the
Owner may devise, develop or otherwise create ideas or other concepts for
services or new products which are patentable or otherwise capable of receiving
protection from duplication. In such event, the Owner will have the right to
patent or otherwise protect such ideas or concepts for its own use and benefit.
<PAGE>
54
SECTION 12 SOFTWARE CHANGES
12.1 Software Upgrades. Software Upgrades must be provided to the Owner
-----------------
by the Vendor at no charge to the Owner for the Term of this Contract. Software
Enhancements will be provided to the Owner by the Vendor, if requested by the
Owner, and the Owner will be obligated to pay a license fee therefor at a price
that is no less favorable to the Owner than that offered or available to any
other Customer of the Vendor, which fee will be adjusted pursuant to subsections
6.2, 7.3 and 27.16. The Owner will not be obligated to pay any fee related to
any Software Enhancement supplied to the Owner at the initiative of the Vendor
unless the Owner elects to utilize any new feature included therein, in which
event the fee for such Software Enhancement will be due and payable within
thirty (30) days of written notice from the Owner to the Vendor that the Owner
has elected to use such feature and has accepted such Software Enhancement. In
the event the Vendor at any time issues a Software Upgrade which is combined
with any Software Enhancement (collectively, the "Software Combined Release") to
such Software, the Software Combined Release will be provided at no charge to
the Owner unless and until the Owner elects to use any of the feature
enhancement or enhancements included within the Software Combined Release and
has accepted such Software Combined Release, in which event the fee for such
Software Combined Release will be due and payable within thirty (30) days of
written notice from the Owner to the Vendor that the Owner has elected to use
such feature enhancement and has accepted such Software Combined Release.
12.2 Notice. The Vendor must give the Owner not less than six (6) months
------
prior written notice of the introduction of any Software Enhancement release or
any Software Combined Release. In addition, on each January 15 and July 15 of
each year during the Term of this Contract, the Vendor must provide the Owner
with a forecast of future Software Enhancement releases or Software Combined
Releases then currently being developed by or on behalf of the Vendor.
12.3 Development Resources. During the Term of this Contract, if
---------------------
requested by the Owner, the Vendor will make available to the Owner sufficient
resources for the development of identified features or modifications to
Software or Software Enhancements for a fee no less favorable to the Owner than
that charged to any Customer other than the Owner, which fee will be adjusted as
contemplated by subsections 6.2, 7.3 and 27.16.
12.4 Installation, Testing and Maintenance. The installation and testing
-------------------------------------
of the Software by the Vendor and the acceptance thereof by the Owner will be
performed in accordance with the criteria set forth in Exhibit B3.
12.5 Software Fixes. In the event that any Software Upgrade or Software
--------------
Enhancement supplied by the Vendor during the Term of this Contract has the
effect of preventing the System and/or any PCS System or any part thereof from
satisfying, or performing in accordance with the Specifications, the System
Standards and/or Exhibit F or otherwise adversely affects the functionality or
features of the System, any PCS System or any part thereof, then the Vendor will
promptly retrofit or take such other corrective action as
<PAGE>
55
may be necessary to assure that the System, any such PCS System or any such
affected part, as modified to include each such Software Upgrade or Software
Enhancement, will satisfy, and perform in accordance with, the Specifications,
the System Standards and/or Exhibit F and restore all pre-existing functionality
and features as well as provide any new features and functionality provided by
any of the foregoing modifications, in each case without any charge to the
Owner.
SECTION 13 EQUIPMENT CHANGES
13.1 Equipment Upgrades. Equipment Upgrades will be provided to the Owner
------------------
by the Vendor at no charge to the Owner for the Term of this Contract.
Equipment Enhancements must be provided to the Owner by the Vendor, if requested
by the Owner, and the Owner is obligated to make payment therefor in an amount
that is no higher than that payable by any Customer other than the Owner, which
amount of payment will be adjusted as set forth in subsections 6.2, 7.3 and
27.16. The Owner will not be obligated to pay any amount for any Equipment
Enhancement supplied to the Owner at the initiative of the Vendor unless the
Owner elects to utilize any new feature included therein, in which event the Net
Price for any such Equipment Enhancement will be due within forty-five (45) days
of written notice from the Owner to the Vendor that the Owner has elected to use
such new feature and has accepted such Equipment Enhancement. If the Vendor at
any time issues an Equipment Upgrade which is combined with any Equipment
Enhancement (collectively, the "Equipment Combined Release") to such Equipment,
the Equipment Combined Release will be provided at no charge to the Owner unless
and until the Owner elects to use any of the feature enhancement or enhancements
included within the Equipment Combined Release and has accepted such Equipment
Combined Release.
13.2 Notice. The Vendor will give the Owner not less than six (6) months
------
prior written notice of the introduction of any Equipment Enhancement or any
Equipment Combined Release. In addition, on each January 15 and July 15 of each
year during the Term of this Contract, the Vendor will provide the Owner with a
forecast of future Equipment Enhancements to the Equipment or Equipment Combined
Releases then currently being developed by or on behalf of the Vendor.
13.3 Development Resources. During the term of this Contract, if
---------------------
requested by the Owner, the Vendor will make available to the Owner sufficient
resources for the development of identified features, modifications or
enhancements to any Equipment, at charges no less favorable to the Owner than
those charged to any Customer other than the Owner, and such charges will be
adjusted as contemplated by subsections 6.2, 7.3 and 27.16.
13.4 Installation, Testing and Acceptance. The Installation and testing
------------------------------------
of the Equipment by the Vendor and the acceptance thereof by the Owner must be
performed in accordance with Exhibit B3 pursuant to the Project Milestones in
Exhibit A.
<PAGE>
56
13.5 Equipment Fixes. In the event that any Equipment Upgrade or
---------------
Equipment Enhancement supplied by the Vendor during the Term of this Contract
has the effect of preventing the System and/or any PCS System or any part
thereof from satisfying, or performing in accordance with, the Specifications,
the System Standards and/or Exhibit F or otherwise adversely affects the
functionality, interoperability or features of the System, any such PCS System
or any part thereof then the Vendor will without any charge to the Vendor
promptly retrofit or take such other corrective action as may be necessary to
assure that the System, any such PCS System or any such affected part, as
modified to include each such Equipment Upgrade and Equipment Enhancement, will
satisfy, and perform in accordance with, the Specifications, the System
Standards and/or Exhibit F and restore all pre-existing functionality and
features as well as provide any features and functionality provided by any of
the foregoing modifications.
SECTION 14 INTELLECTUAL PROPERTY
14.1 Intellectual Property. The Vendor grants the Owner rights to use any
---------------------
copyrights, trademarks or servicemarks necessary or useful for the use,
operation, maintenance, marketing, advertising and publication of the System,
any PCS System or any part thereof, subject to the prior consent of the Vendor,
which consent will not be unreasonably withheld.
14.2 Infringement. The Vendor agrees that it will defend, at its own
------------
expense, all suits and claims against the Owner for infringement or violation of
any patent, trademark, copyright, trade secret, mark or other intellectual
property rights of any third party (collectively, "Intellectual Property
Rights"), covering, or alleged to cover, the Equipment, Software, the System
and/or any PCS System or any component thereof or the use thereof, in the form
furnished or as subsequently modified by the Vendor. The Vendor agrees that it
will pay all sums, including, without limitation, attorneys' fees and other
costs, which, by judgment or decree, or in settlement of any suit or claim, may
be assessed against the Owner on account of such infringement or violation,
provided that:
- - - -------- ----
(a) the Vendor will be given written notice of all claims of any such
infringement or violation and of any suits or claims brought or threatened
against the Owner or the Vendor of which the Owner has actual knowledge and the
Vendor will promptly either accept or deny the defense of such claim;
(b) the Vendor will be given full authority to assume control of the
defense thereof through its own counsel at its sole expense but will not
compromise or settle any suits or claims without the express prior written
consent of the Owner provided that such consent will not be unreasonably
-------- ----
withheld; and
(c) the Owner will cooperate fully with the Vendor in the defense of such
suit or claims and provide the Vendor such assistance as the Vendor may
reasonably require in connection therewith so long as any such assistance will
not include any cost and/or expense to the Owner.
<PAGE>
57
14.3 Vendor's Obligations. If in any such suit so defended, all or any
--------------------
part of the Equipment, Software, the System, any PCS System or any component
thereof or the use thereof is held to constitute an infringement or violation of
Intellectual Property Rights and its use is enjoined, or if in respect of any
claim of infringement or violation the Vendor deems it advisable to do so, the
Vendor will at its sole cost and expense take one or more of the following
actions: (i) procure the right to continue the use of the same without
interruption for the Owner; (ii) subject to the terms of subsection 2.17 replace
the same with noninfringing Equipment or Software that meets the Specifications;
or (iii) modify said Equipment, Software, the System, any PCS System or any
component thereof so as to be noninfringing, provided that the Equipment,
-------- ----
Software, the System, any PCS System or any component thereof as modified meets
all of the Specifications.
14.4 Vendor's Remedies. The Vendor's obligations under this Section 14
-----------------
will not apply to any infringement or violation of Intellectual Property Rights
caused by modification of the Products, the System, any PCS System or any
component thereof by the Owner, or any infringement caused solely by the Owner's
use and maintenance of the Products other than in accordance with the
Specifications or the purposes contemplated by this Contract, except as
expressly authorized or permitted by the Vendor. The Owner will indemnify the
Vendor against all liabilities and costs, including reasonable attorneys' fees,
for defense and settlement of any and all claims against the Vendor based upon
infringement or violation of third parties' Intellectual Property Rights in
connection with this subsection 14.4 and arising solely from modification of the
Equipment made without Vendor's express prior consent.
14.5 License to Use Vendor Patents. In consideration of the purchase of
-----------------------------
Products from the Vendor, the Vendor hereby grants to the Owner and its
Affiliates, under patents associated with such Products or parts thereof and
which the Vendor owns or has a right to license ("Vendor Patents"), a world-wide
royalty-free, non-exclusive license (the "Patent License") to utilize the Vendor
Patents in connection with the Owner's provision of telecommunications services
utilizing or in connection with the Products. The Patent License includes the
right to use not only the Products licensed or purchased hereunder, but also
combinations of the Equipment and the Software with other equipment and software
which are utilized by the Owner and its Affiliates in the provision of such
telecommunications services. The scope of the Patent License will extend only
to the right to use and/or the right to sell, but not manufacture, the Product
or Products to which such Patent License relates. The Patent License includes
those patents existing on the date of this Contract and those patents which come
into existence during the Term of this Contract. The Patent License will
continue for the entire unexpired term of the last to expire of such Vendor
Patents.
The Patent License may be assigned to any successor in interest of the
Owner which acquires all or substantially all of the assets of the Owner by
sale, merger, consolidation or otherwise. The Vendor will not assert any claim
of infringement against other suppliers (including, but not limited to, the
Other Vendors) of the Owner, arising out of authorized activities for
interconnection with Equipment or Software provided to the Owner by the Vendor.
<PAGE>
58
SECTION 15 DELAY
15.1 Liquidated Damages. (a) The Parties agree that damages for delay
------------------
are difficult to calculate accurately and, therefore, agree that liquidated
damages (the "Liquidated Damages") will be paid for non-performance or late
performance of the Vendor's obligations under this Contract pursuant to the
terms hereof. Except as otherwise specifically set forth in this Contract the
damages, penalties and/or payments payable to the Owner pursuant to subsections
15.1, 15.2 and 15.3 will be the sole and exclusive remedies for the specific
delays described in such subsections 15.1, 15.2 and 15.3.
15.2 Interim Delay. (a) Subject to the terms of this Contract, failure
-------------
of the Vendor to complete the Work necessary to achieve each of the Project
Milestones set forth in Exhibit A1 applicable to any PCS System on or before the
date applicable to such Milestone for such PCS System that is required to be
achieved by the Vendor prior to the Guaranteed Substantial Completion Date for
such PCS System (each an "Interim Milestone") will result in the Vendor being
liable to pay to the Owner an amount equal to [ ]; provided that no such
-------- ----
Interim Delay Penalty will be due if the delay is directly and expressly
attributable primarily to (i) an event constituting a Force Majeure pursuant to
the terms of this Contract or (ii) an act or omission of the Owner. Interim
Delay Penalties accrued pursuant to this subsection 15.2(a) will be offset
against the payment to be made by the Owner to the Vendor upon Substantial
Completion of the PCS System to which such interim delay relates. The Interim
Delay Penalty applicable to each of Project Milestones M3 and M4 as set forth on
Exhibit A will be [ ]
(b) To the extent that the Vendor is responsible for Interim Delay
Penalties pursuant to subsection 15.2(a) such penalties will be credited back to
the Vendor by the Owner to the extent that (i) the Vendor successfully achieves
the Interim Milestone subject to delay within thirty (30) days of the date
scheduled therefor pursuant to the terms hereof and Exhibit A and (ii) such
interim delay does not otherwise materially adversely affect the Owner, such PCS
System and/or the System as a whole. Any such reimbursement will be credited
back to the Vendor such that the Interim Delay Penalty otherwise offset against
the relevant Substantial Completion payment in accordance with subsection
15.1(a) above will be added back to such Substantial Completion payment to be
made to the Vendor by the Owner. Interim Delay Penalties applicable to Interim
Milestones M6 and M7 within any PCS System in any Non-Designated System Area may
be assessed on the earliest date any such Interim Delay Penalties may be
retroactively calculated in accordance with subsection 2.7(b).
15.3 Completion Delay. (a) [ ]
----------------
<PAGE>
59
[ ]
(b) If any PCS System does not achieve Substantial Completion by the
Guaranteed Substantial Completion Date but the Owner nonetheless chooses (in its
sole discretion) to commence In Revenue Service in such incomplete PCS System
(such action in no way constituting the Owner's acceptance, express or implied,
of the System or such PCS System or any part thereof), then the Vendor will be
required to pay, on a daily basis, only that percentage of the daily Late
Completion Payment equal to that percentage of the geographic area to be
otherwise covered by such PCS System not otherwise placed in In Revenue Service
by the Owner.
(c) In the event of a change in the Contract Price pursuant to subsections
6.2, 7.3 or 27.16 during the Term of this Contract from the amount originally
set forth in this Contract pursuant to Section 6 the per diem amount of Late
Completion Payments set forth above will be increased or decreased, as
appropriate, by an amount equal to the increase or decrease in the Owner's per
diem interest payment obligation resulting from any change in the amount of debt
incurred or to be incurred by the Owner related to such change in the Contract
Price.
(d) Late Completion Payments, including any portions of such payments
payable in accordance with paragraphs (a) and (b) above, will be accrued during
the Completion Cure Period and offset against payments otherwise due to the
Vendor upon the achievement of Substantial Completion pursuant to the terms of
subsection 6.3. If the Vendor fails to achieve Substantial Completion within
forty-five (45) days, or thirty (30) days in the event the Owner chooses to
commence In Revenue Service as described in clauses (b) and (c) to this
subsection 15.3, of the Guaranteed Substantial Completion Date for any reason
other than primarily because of (i) a Force Majeure event pursuant to Section
16 or (ii) the direct and explicit act or omission of the Owner, then the Owner
will have the option to terminate this Contract without any penalty or payment
obligation (other than payment obligations under this Contract outstanding as of
the date of any such termination; provided that any such amounts payable by the
-------- ----
Owner will not include any amounts that would have been payable to the Vendor
only upon Substantial Completion or Final Acceptance). For the purposes of
determining amounts owed to the Owner by the Vendor pursuant to the terms of
this subsection 15.3, the term "Contract Price" as applicable to any given PCS
System will mean the total cost of such PCS System as incurred by the Owner and
payable to the Vendor or any of its Subcontractors for any and all Products and
Services provided or performed by the Vendor or any of its Subcontractors in
connection with the construction and operation of such PCS System pursuant to
the terms of this Contract other than Facilities Preparation Services performed
within such PCS System; provided that in the event of any delay in the Vendor's
-------- ----
performance in a given PCS System subject to the damages set forth in this
subsection 15.3 that is due in whole or in part, directly or indirectly, to a
delay in satisfactory completion of the Facilities Preparation Services within
such PCS System to be performed by the Vendor or any of its Subcontractors
pursuant to the terms of this Contract and in accordance with
<PAGE>
60
Exhibit E, the calculation of the Contract Price will include the full cost of
all Facilities Preparation Services performed by the Vendor or any of its
Subcontractors in such PCS System. In any given PCS System the aggregate amount
of all Interim Delay Penalties and Late Completion Payments owed to the owner
pursuant to this Section 15 will in no event exceed thirty-five percent (35%) of
the Contract Price applicable to such PCS System.
15.4 PCS System and System Element Delivery Prioritization. (a) In no
-----------------------------------------------------
event will the Vendor be required under the terms of this Contract to deliver to
the Owner Products on a time schedule and/or in amounts greater than that set
forth on Exhibit A2.
(b) In the event the Vendor is required pursuant to the progression
of the Work and the Project Milestones in every PCS System within the System to
deliver an amount of Products equal to or more than ninety-five percent (95%) of
the amount of Products indicated for delivery by the Vendor in the fourth
quarter of 1996 as set forth on Exhibit A2, the Vendor will have the right, but
not the obligation, pursuant to this subsection 15.4, to request in writing that
the Owner re-prioritize up to three (3) PCS Systems within the System and in
such event the Owner will delay the Project Milestones to be achieved by the
Vendor in each such PCS System as the Owner will designate to the Vendor, in its
sole and absolute discretion, for a period not in excess of ninety (90) days
without any penalty to the Vendor under this Section 15.
(c) The Owner will use reasonable efforts to inform the Vendor by
5:00 p.m. on April 15, 1996 which System Areas, of all of the System Areas set
forth on Schedule 4, it, in its sole and absolute discretion, has determined to
designate as the thirteen (13) System Areas which should receive priority as to
the build-out by the Vendor of the PCS Systems within such System Areas. The
remaining four System Areas are the "Non-Designated System Areas" referred to
herein. Any such notification provided pursuant to and in accordance with this
subsection 15.4(c) will in no way modify the Vendor's obligations under the
terms of this Contract; provided that any delay by the Owner in providing the
-------- ----
Vendor the notice described in this subsection 15.4(c) will result in day-for-
day delays in the Guaranteed Completion Dates applicable to the PCS Systems
within the Initial System (other than the PCS Systems in the Non-Designated
System Areas).
SECTION 16 FORCE MAJEURE
16.1 (a) Either Party may make a claim for excusable failure or delay
with respect to any obligation of such Party under this Contract, except any
obligation to make payments when due. Excusable failure or delay will be
allowed only in the event of an event of Force Majeure that is beyond the
reasonable control of the affected Person. Notwithstanding the foregoing, the
Vendor will not be entitled to relief under this Section 16 to the extent that
any event otherwise constituting an event of Force Majeure results from the
negligence or fault of the Vendor or any Subcontractor, and the Owner will not
be entitled to relief under this Section 16 to the extent any event otherwise
constituting an event of Force Majeure results from the negligence or fault of
the Owner.
<PAGE>
61
(b) The Party claiming the benefit of excusable delay hereunder must (i)
promptly notify the other Party of the circumstances creating the failure or
delay and provide a statement of the impact of such Party failure or delay and
(ii) use reasonable efforts to avoid or remove such causes of nonperformance,
excusable failure or delay. If an event of Force Majeure prevents the Vendor
from performing its obligations under this Contract for a period exceeding sixty
(60) days, the Owner may, upon prior written notice to the Vendor, terminate
this Contract.
(c) The Party not claiming the benefit of excusable delay hereunder will
likewise be excused from performance of its obligations hereunder on a day-for-
day basis to the extent such Party's obligations are affected due to the other
Party's delayed performance.
SECTION 17 WARRANTIES
17.1 Product Warranty. (a) Except as otherwise provided below in
----------------
subsection 17.2, the Vendor warrants that, for a period of three (3) years from
the date of Final Acceptance of any PCS System (the "Product Warranty Period"),
all Products and the Installation thereof within such PCS System will materially
conform with and perform the functions set forth in the Specifications and the
relevant performance criteria set forth in Exhibit D and will be free from
Defects and Deficiencies in material or workmanship which impair service to
subscribers, System performance, billing, administration and/or maintenance. In
the case of Software, the Product Warranty Period applicable to any such
Software shall be automatically extended upon, and simultaneous with, any
Software Upgrade pursuant to the terms of Section 12.
(b) To the extent the Owner orders additional Products from the Vendor in
accordance with the terms of this Contract including, but not limited to,
subsections 2.2 and/or 7.3, any such Products so ordered by the Owner and
delivered and installed by the Vendor or its Subcontractors will be warranted to
the same extent as set forth in clause (a) above for a period of not less than
twelve (12) months from the date the Owner puts such additional Products into
commercial service but for a period of not greater than fifteen (15) months from
shipment. If in the event, pursuant to the Owner's order for such additional
Products the Vendor is not required to install such additional Products, the
warranty on such additional products will run fifteen (15) months from the date
the Vendor shipped such products to the Owner.
17.2 Non-Essential Equipment Warranty. The Vendor warrants, to the extent
--------------------------------
and for the time period of the warranties received by the Vendor from any third
party manufacturer or supplier of Non-Essential Equipment (the "Non-Essential
Equipment Warranty Period"), that all such Non-Essential Equipment and the
Installation thereof will conform with and perform the functions set forth in
the Specifications and the performance criteria set forth in Exhibit F and will
be free from Defects and Deficiencies in material or workmanship which impair
service to subscribers, System performance, billing, administration and/or
maintenance; provided that to the extent any Defect or Deficiency or failure in
-------- ----
the performance of Non-Essential Equipment causes a Defect or Deficiency or
failure in any Equipment, the Vendor
<PAGE>
62
will be responsible for the repair and/or replacement of such Equipment
throughout the applicable Product Warranty Period in accordance with subsection
17.1 except to the extent the Owner is otherwise covered by insurance for any
such failure in Equipment. The Owner agrees to maintain reasonable and ordinary
levels of insurance for each of the PCS Systems within the System.
17.3 Services Warranty (a) The Vendor warrants that, for a period of not
-----------------
less than three (3) years from the date of completion of Network Interconnection
Engineering or Configuration Engineering provided by the Vendor to the Owner
pursuant to the terms of this Contract in any given PCS System (the "Engineering
Warranty Period"), such Network Interconnection Engineering or Configuration
Engineering, as the case may be, will be (i) operational in accordance with the
Specifications, (ii) in compliance with all material Applicable Laws and
material Applicable Permits in effect at the time of the completion of such
engineering in such PCS System, and (iii) free from Defects or Deficiencies in
design, materials, workmanship or otherwise.
(b) The Vendor warrants that, for a period of not less than three (3)
years from the date of completion of RF Engineering to be done by the Vendor or
its Subcontractors (but in no event earlier than the achievement of Milestone M5
in such PCS System) in any given PCS System (the "RF Services Warranty Period")
the Final Site Count within and the Final RF Design applicable to such PCS
System will be accurate based upon the circumstances in such PCS System as they
existed at the time of the Final Acceptance of such PCS System; provided that in
-------- ----
no event will the RF Engineering warranty pursuant to this subsection 17.3(b)
cover or warrant items or performance otherwise covered or warranted pursuant to
subsection 17.4 below.
(c) The Vendor warrants that, for a period of not less than three (3)
years from the date of completion of Facilities Preparation Services within any
PCS System but in no event later than the achievement of Milestone M8 pursuant
to Exhibit A1 in such PCS System (provided that in the event of a Microwave
-------- ----
Delay Period in such PCS System pursuant to subsection 2.37, the commencement of
the Facilities Preparation Services Warranty Period will not be later than three
(3) months from the date the Vendor would have otherwise been able to commence
Substantial Completion testing in such PCS System in accordance with Exhibit B3
and Milestone M8 as set forth on Exhibit A1 but for the existence of such
Microwave Delay Period) (the "Facilities Preparation Services Warranty Period"
and collectively with the Engineering Warranty Period and the RF Services
Warranty Period, the "Services Warranty Periods") such Facilities Preparation
Services will be (i) operational in accordance with the Specifications, (ii) in
compliance with all material Applicable Laws and material Applicable Permits in
effect at the time of the completion of such Facilities Preparation Services in
such PCS System, and (iii) free from Defects or Deficiencies in design,
materials, workmanship or otherwise.
17.4 System Warranty. The Vendor warrants that, for a period three (3)
---------------
years from the Final Acceptance of the last PCS System within the Initial System
(the "System Warranty Period"), the ongoing performance of each PCS System
together with all other PCS Systems within the System will conform with and
perform to the performance criteria set forth
<PAGE>
63
Exhibit F as of the date of the Final Acceptance of such PCS System based on the
circumstances within such PCS System on such date.
17.5 Breach of Warranties. (a) In the event of any breach of any of the
--------------------
Warranties during any of the applicable Warranty Periods set forth in
subsections 17.1, 17.2, 17.3(a), 17.3(b), 17.3(c) and 17.4, the Vendor will, in
accordance with the terms of this Section 17, promptly repair or replace the
defective or nonconforming Product or otherwise cure any Defects and
Deficiencies so that each PCS System and the System as a whole will perform in
accordance with the Specifications and Exhibit F. If the Vendor fails to
promptly repair, replace and/or cure such defect, the Owner may, in addition to
exercising any other remedies available to it, itself cause such repair,
replacement and/or cure, at its option and at the sole cost and expense of the
Vendor.
(b) The Vendor recognizes that the Owner may suffer injury and may be
damaged in an amount which will be difficult to determine with certainty as a
result of Outages resulting from causes attributable to the failure of the
Vendor's Products and/or Services to perform in accordance with the
Specifications. As used herein, "Outage" means an unscheduled loss of
functionality of the System or any PCS System defined as the loss of the
capability to originate or terminate [ ] or more of the active voice channels
then in service within the System or such PCS System for a period of time
exceeding [ ] minutes.
(c) During the System Warranty Period, the Vendor will be liable to the
Owner for damages (the "Warranty Damages") for Outages that result from (i) the
failure of the Vendor's Equipment and/or Software to perform in accordance with
the Specifications, (ii) the failure of the Vendor to provide Services in
accordance with the Specifications applicable thereto, (iii) a Vendor procedural
error or (iv) inaccurate Technical Documentation, excluding marketing bulletins,
sales literature or other promotional materials provided by the Vendor to the
Owner. As used herein, "Vendor procedural error" means an error or improper
deviation from the Vendor's or its Subcontractors' procedures by, or
attributable to, the Vendor's personnel. Warranty Damages will be calculated
based upon [ ] for each Outage occurring in any given PCS System to the extent
such Outage exceeds [ ] from the time the Owner notified the Vendor of
such Outage (not including such first hour), plus [ ] per minute for each
minute the duration of the Outage exceeds one (1) hour from the time the Owner
notifies the Vendor of such Outage (not including such first hour).
(d) In no event will the Vendor's liability for Warranty Damages pursuant
to this subsection 17.5 exceed [ ] with respect to each Outage in any given
PCS System. In addition, the Vendor's total liability for Warranty Damages
pursuant to this subsection 17.5 will not exceed [ ] per calendar year during
the Term of this Contract with respect to Outages in any given PCS System per
calendar year.
(e) Notwithstanding the foregoing, the Vendor will have no liability
pursuant to this subsection 17.5 for:
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64
(i) Outages caused by a Force Majeure event as
described in Section 16 other than to the extent that any of the
Vendor's Products and/or Services resulting in such Outages
should, in accordance with the Specifications and/or the Vendor's
representations be able to withstand any such Force Majeure
event;
(ii) Outages resulting from a scheduled activity,
including, but not limited to, System maintenance or Software or
Equipment Upgrades, unless said Outage extends beyond the
expected downtime, as provided in the Specifications applicable
thereto, associated with such Equipment or Software maintenance
Upgrades;
(iii) alterations by the Owner and/or the Vendor at
the Owner's request or otherwise pursuant to the terms of this
Contract to the System and/or any PCS System, excluding normal
maintenance or parameter changes as prescribed by the applicable
Technical Documentation;
(iv) Outages resulting from the Owner's, its
subcontractors' or any third party's (if such third party is
employed by the Owner) failure to follow the Technical
Documentation;
(v) Outages resulting from the gross negligence or
willful misconduct of the Owner, or any of its employees, agents
or contractors; or
(vi) Outages resulting from failure of equipment or
software not supplied by the Vendor or any Subcontractors or from
the performance of services not performed by the Vendor or any
Subcontractors.
(f) On or before the beginning of each quarter of each calendar year
during the Term of this Contract, the Owner shall provide the Vendor a written
report summarizing any Outages occurring during the previous calendar quarter.
The amount of any Warranty Damages shall be determined by the Owner as of the
end of the fourth quarter of each calendar year during the Term, for the
preceding four quarterly reporting periods during such Term. The Owner will
notify the Vendor of any such Warranty Damages in writing. Such Damages will be
payable in credits on future purchases under this Contract or otherwise if this
Contract is terminated for any reason within thirty (30) days of the occurrence.
Any disputes regarding the determination of the cause of an Outage or the amount
of any such Warranty Damages shall be resolved in accordance with the provisions
of Section 23.
17.6 Repair and Return. (a) If the Owner claims a breach of warranty
-----------------
under subsections 17.1, 17.2, 17.3 or 17.4, it must notify the Vendor of the
claimed breach within a reasonable time after its determination that a breach
has in fact occurred. The Owner will allow the Vendor to inspect the Products,
the Non-Essential Equipment, the Services or the System, as the case may be, on-
site, or, upon the Vendor's reasonable request and, subject to subsection
17.6(d) below, at the Vendor's sole expense: (i) with respect to Products,
return such Products to any of the Vendor's repair facilities located in North
America and listed on
<PAGE>
65
Schedule 8, or (ii) with respect to Non-Essential Equipment, return such Non-
Essential Equipment to the Vendor for further return to the applicable third
party manufacturer.
(b) The Vendor agrees to commence work on all such Products, Non-
Essential Equipment, Services or any System Defect, as the case may be, or
Installation Defects as soon as practicable, but in no event later than twenty-
four (24) hours after notification of such defect, and, subject to subsections
17.6(e) and 17.6(f), the Vendor will cure such defect as promptly as
practicable. During the Product Warranty Period and the Non-Essential Equipment
Warranty Period, electronic circuit board components of Equipment or Non-
Essential Equipment, as the case may be, will be repaired or replaced by the
Vendor.
(c) Failure of the System to function to the level of the performance
warranty as set forth in subsection 17.4 will result in the obligation of the
Vendor to promptly make whatever repairs, modifications, alterations, expansions
or to take any other action of any kind, including but not limited to the
provision of additional Products and/or Services, necessary to satisfactorily
fix that portion of the System causing such failure.
(d) All costs associated with (i) removing or disconnecting the
Products or the Non-Essential Equipment subject to the warranty claim pursuant
to the terms of this Section 17 from any other Products, the respective PCS
System or any part thereof or from other equipment, any other pcs system or any
part thereof to which they are attached or connected, or (ii) dismantling
surrounding Products, the respective PCS System or any part thereof or any other
equipment or other pcs system or any part thereof in order to so remove or
disconnect the Products or Non-Essential Equipment subject to such warranty
claim shall be borne by the Vendor throughout the applicable Warranty Period.
All packaging, shipping and freight charges incurred in connection with the
Vendor's obligations under this subsection 17.6 will be borne by the Vendor,
unless the Products or Non-Essential Equipment, as the case may be, returned are
not Defective or otherwise not covered by the Vendor's warranty pursuant to
subsections 17.1 and 17.2, in which case the Owner will pay for all such charges
between the Owner's point of origin and the Vendor's applicable repair facility
in North America.
(e) For routine warranty service, the Vendor will, during the
respective Warranty Period, ship replacement or repaired Products or Non-
Essential Equipment (or components thereof) within thirty (30) days of receipt
of the Defective Equipment or Non-Essential Equipment (or components thereof)
from the Owner. In the event such replacement or repaired Products or Non-
Essential Equipment cannot be shipped within such time period, or if the Vendor
determines that due to the particular circumstances, on-site repairs or services
are required, the Vendor shall undertake such repairs or replacement services
on-site within thirty (30) days of notification of the warranty Defect by the
Owner. In the event that the Vendor fails to repair or replace Defective
Products and/or Non-Essential Equipment within thirty (30) days from the Owner's
notice to the Vendor, then the Vendor shall be deemed to be in material breach
of its obligations pursuant to this Contract and the Owner shall be entitled to
receive a refund of all amounts previously paid to the Vendor for the Defective
Products or Non-Essential Equipment, and shall have no further obligation to pay
additional amounts in connection with the Defective Products or Non-Essential
Equipment.
<PAGE>
66
The Owner shall return such Defective Products and Non-Essential Equipment to
the Vendor at the Vendor's sole cost and expense.
(f) For emergency warranty service situations, the Vendor will,
during the applicable Warranty Periods, use its best efforts to ship replacement
Products or Non-Essential Equipment (or components thereof) no later than twelve
(12) hours after notification of the warranty Defect by the Owner. The Owner
shall ship the Defective Products or Non-Essential Equipment to the Vendor
within thirty (30) days of receipt of the replacement Products or Non-Essential
Equipment, as the case may be. In the event the Vendor fails to receive such
Defective Products or Non-Essential Equipment within such thirty (30) day
period, the Vendor shall invoice the Owner for the replacement Products or Non-
Essential Equipment at the then-current price in effect therefor pursuant to the
terms of this Contract. If in an emergency warranty service situation, the
Owner and/or the Vendor determines that due to the particular circumstances, on-
site technical assistance is necessary, the Vendor shall use its best efforts to
dispatch emergency service personnel to the site within twelve (12) hours of
notification of the warranty Defect by the Owner. For the purpose of this
subsection 17.6, an emergency warranty service situation shall be deemed to
exist upon the occurrence of any E1 Emergency Condition or E2 Emergency
Condition. The Vendor agrees to commence work on all Equipment, Non-Essential
Equipment, Facilities Preparation Services or any System defect, as the case may
be, or Installation defects materially impairing service to subscribers, System
performance, billing, administration and/or maintenance as soon as practicable,
but in no event later than twenty-four (24) hours after notification of such
defect, and the Vendor will cure such defect as promptly as practicable.
17.7 Technical Assistance Center. The Vendor must maintain a technical
---------------------------
assistance center in the United States, and during the Warranty Periods
established pursuant to subsections 17.1, 17.2, 17.3 and 17.4, respectively,
will make such support center available to the Owner twenty-four (24) hours per
day free of charge to the Owner.
17.8 Scope of Warranties. Unless otherwise stated herein, the Vendor's
-------------------
warranties under this Section 17 will not apply to:
17.8.1 damage or defects resulting from the gross negligence or willful
misconduct of the Owner, or any of its employees, agents or
contractors;
17.8.2 any Equipment or Software damaged by accident or disaster,
including without limitation, fire, flood, wind, water, lightning
or power failure other than to the extent that any such Equipment
or Software should in accordance with the Specifications and/or the
Vendor's representations be able to withstand any such events;
17.8.3 Non-Essential Equipment normally consumed in operation or which has
a normal life inherently shorter than the Warranty Periods (e.g.,
----
fuses, lamps, magnetic tape); or
<PAGE>
67
17.8.4 damages or defects resulting directly from the Other Vendor's
equipment provided that this will in no event limit the Vendor's
obligation as to Interoperability pursuant to the terms of this
Contract.
17.9 Expenses. Except as otherwise provided in this Section 17, the
--------
Owner will reimburse the Vendor for the Vendor's out-of-pocket expenses incurred
at the Owner's request in responding to and/or remedying Products, Non-Essential
Equipment, Services or any System defect, or service Deficiencies not covered by
the warranties set forth herein or otherwise covered under a separate System
maintenance agreement (subject, however, to the terms and conditions of any such
agreement) between the Vendor and the Owner.
17.10 Third Party Warranties. If the Vendor purchases or subcontracts for
----------------------
the manufacture of any part of the System or the performance of any of the
Services to be provided hereunder from a third party, the warranties given to
the Vendor by such third party will inure, to the extent applicable or permitted
by law, to the benefit of the Owner, and the Owner will have the right, at its
sole discretion, to enforce such warranties directly and/or through the Vendor.
The warranties of such third parties will be in addition to and will not, unless
otherwise expressly stated herein, be in lieu of any warranties given by the
Vendor under this Contract.
SECTION 18 INSURANCE
18.1 Insurance. The Vendor and the Owner will maintain insurance in
---------
accordance with the provisions set forth in Schedule 6; provided that the Owner
-------- ----
will have the right to maintain otherwise reasonable levels of insurance
substantially similar to that set forth on Schedule 6.
SECTION 19 TAXES
19.1 Taxes. The amounts to be paid by the Owner under this Contract do
-----
not include any state, provincial or local sales and use taxes, however
designated, which may be levied or assessed on the System, any PCS System or any
component thereof, including, but not limited to, the Services. With respect to
such taxes, the Owner will either furnish the Vendor with an appropriate
exemption certificate applicable thereto or pay to the Vendor, upon presentation
of invoices therefor, such amounts thereof as the Vendor may by law be required
to collect or pay; provided, however, that the Vendor will use its reasonable
-------- -------
efforts to minimize the amount of any such taxes. The Owner has no obligation
to the Vendor with respect to other taxes, including, but not limited to, those
relating to franchise, net or gross income or revenue, license, occupation,
other real or personal property, and fees relating to importation or exportation
of the Products.
<PAGE>
68
SECTION 20 INDEMNIFICATION AND LIMITATION OF LIABILITY
20.1 Vendor Indemnity. The Vendor will indemnify and hold the Owner and
----------------
its Affiliates, partners, directors, officers, agents and employees (the
"Indemnitees") harmless from and against all claims, demands suits, proceedings,
damages, costs, expenses, liabilities (including, without limitation, reasonable
legal fees) or causes of action (collectively, "Liabilities") brought against or
incurred by any Indemnitee for (i) injury to persons (including physical or
mental injury, libel, slander and death), or (ii) loss or damage to property
including, without limitation, the System, any PCS System or any part thereof or
(iii) violations of Applicable Laws, Applicable Permits, codes, ordinances or
regulations by the Vendor, or (iv) any claims arising out of or in connection
with the Vendor's obligation pursuant to subsection 14.2 or (v) any other
liability, resulting from the gross negligence, wilful misconduct or product
liability, of the Vendor, its officers, agents, employees, or Subcontractors in
the performance of this Contract. If the Vendor and the Owner jointly cause
such Liabilities, the Parties will share the liability in proportion to their
respective degree of causal responsibility.
20.2 LIMITATION ON LIABILITY. EXCEPT AS TO THE DAMAGES, AMOUNTS AND/OR
-----------------------
COSTS PROVIDED IN SUBSECTIONS 14.2, 15.2, 15.3, 17.5, 20.1, AND 20.3 HEREOF, IN
NO EVENT, AS A RESULT OF BREACH OF CONTRACT OR BREACH OF WARRANTY, WILL EITHER
PARTY HERETO OR EITHER PARTY'S SUBCONTRACTORS, BE LIABLE UNDER THIS CONTRACT TO
THE OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES, INCLUDING LOST
PROFITS OR REVENUES OF SUCH PARTY, BEFORE OR AFTER ACCEPTANCE, WHETHER OR NOT
SUCH DAMAGES ARE FORESEEABLE. SUCH LIMITATION SHALL NOT APPLY TO LIABILITIES
PAYABLE UNDER THE VENDOR'S OR ANY SUBCONTRACTOR'S INSURANCE POLICIES. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN THIS CONTRACT NOTHING CONTAINED HEREIN WILL BE
DEEMED TO IMPLY A WARRANTY OF FITNESS FOR PARTICULAR PURPOSE.
20.3 Damages for Fraud, Gross Negligence or Willful Misconduct (a) The
---------------------------------------------------------
Vendor shall be responsible for all damages incurred by the Owner as a result of
any damage or injury caused by or resulting from the fraud, gross negligence or
willful misconduct of the Vendor.
(b) The Vendor shall be responsible for all damages, but excluding
indirect, incidental and consequential damages, incurred by the Owner as a
result of any damages or injury caused by or resulting from the fraud, gross
negligence or willful misconduct of any of the Subcontractors.
20.4 Friable Asbestos. (a) Each party will notify the other Party in
----------------
writing of the existence of any friable asbestos that is an imminent health
hazard ("Friable Asbestos") at any System Element Location which is the subject
of the Work hereunder of which such Party has actual knowledge. The foregoing
notwithstanding, the Owner will not be required to notify the Vendor of the
existence of any Friable Asbestos which is contained in Equipment
<PAGE>
69
supplied by the Vendor or its Subcontractors or brought onto any System Element
Location by the Vendor. If the Owner fails to notify the Vendor of the
existence of such Friable Asbestos as required by this subsection 20.4 and the
Vendor, during the performance of Services hereunder, discovers that Friable
Asbestos is present, other than such Friable Asbestos brought onto the premises
or otherwise disturbed by the Vendor or any Subcontractor at the System Element
Location where such Services are to be performed, the Vendor may upon written
notice to the Owner, and without penalty, suspend the performance of the
Services at the affected System Element Location for only the period of time
that Friable Asbestos remains an imminent health hazard.
(b) The Owner shall be responsible for, without cost to the Vendor, the
abatement or removal of the imminent health hazard presented by the Friable
Asbestos encountered by the Vendor; provided that the Vendor shall be
-------- ----
responsible for, without cost to the Owner, the abatement or removal of such
health hazard if the Friable Asbestos causing such health hazard was brought
onto the premises or otherwise disturbed by the Vendor or any of its
Subcontractors. In the event the Owner chooses not to do the foregoing, the
Owner shall provide, at no charge to the Vendor, alternative plans for providing
such Services that will not expose the Vendor or its Subcontractors to such
imminent health hazard. In the event the Vendor elects to suspend the
performance of Services hereunder due to the presence of Friable Asbestos, the
Vendor's obligations with respect to the performance of the Work on such System
Element Location will only be delayed for that period of time such Friable
Asbestos remains unabated.
(c) Except where such Friable Asbestos was brought onto the premises or
otherwise disturbed by the Vendor or any of its Subcontractors the Owner will
indemnify and hold harmless the Vendor against and in respect of any and all
damages, claims, losses, liabilities and reasonable legal expenses which may be
imposed upon or incurred by the Vendor or asserted against the Vendor by any
employees and/or contractors of the Vendor or any of its Subcontractors and any
Governmental Entity arising out of or in connection with the Owner's failure to
identify and inform the Vendor of the existence of Friable Asbestos as required
by this subsection 20.4.
SECTION 21 REPRESENTATIONS AND WARRANTIES
21.1 Representations and Warranties of the Vendor. The Vendor hereby
--------------------------------------------
represents and warrants to the Owner as follows:
21.1.1 Due Organization of the Vendor. The Vendor is a corporation
------------------------------
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own and
operate its business and properties and to carry on its business as such
business is now being conducted and is duly qualified to do business in all
jurisdictions in which the transaction of its business in connection with the
performance of its obligations in connection with this Contract makes such
qualification necessary.
<PAGE>
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21.1.2 Due Authorization of the Vendor; Binding Obligation. The
---------------------------------------------------
Vendor has full corporate power and authority to execute and deliver this
Contract and to perform its obligations hereunder, and the execution, delivery
and performance of this Contract by the Vendor have been duly authorized by all
necessary corporate action on the part of the Vendor; this Contract has been
duly executed and delivered by the Vendor and is the valid and binding
obligation of the Vendor enforceable in accordance with its terms, except as
enforcement thereof may be limited by or with respect to the following: (i)
applicable insolvency, moratorium, bankruptcy, fraudulent conveyance and other
similar laws of general application relating to or affecting the rights and
remedies of creditors; (ii) application of equitable principles (whether
enforcement is sought in proceedings in equity or at law); and (iii) provided
the remedy of specific enforcement or of injunctive relief is subject to the
discretion of the court before which any proceeding therefore may be brought.
21.1.3 Non-Contravention. The execution, delivery and performance of
-----------------
this Contract by the Vendor and the consummation of the transactions
contemplated hereby do not and will not contravene the certificate of
incorporation or by-laws of the Vendor and do not and will not conflict with or
result in (i) a breach of or default under any indenture, agreement, judgment,
decree, order or ruling to which the Vendor is a party which would materially
adversely affect the Vendor's ability to perform its obligations under this
Contract; or (ii) a breach of any Applicable Law.
21.1.4 Regulatory Approvals. All authorizations by, approvals or
--------------------
orders by, consents of, notices to, filings with or other acts by or in respect
of any Governmental Entity or any other Person required in connection with the
execution, delivery and performance of this Contract by the Vendor have been
obtained or will be obtained in due course.
21.1.5 Non-Infringement. The Vendor represents and warrants to the
----------------
best of its knowledge based on reasonable diligence that as of the Effective
Date there are no threatened or actual claims or suits in connection with
patents and other intellectual property matters that would materially adversely
affect the Vendor's ability to perform its obligations under this Contract.
Furthermore, the Vendor represents and warrants to the best of its knowledge
that its own agreements with Qualcomm Incorporated ("Qualcomm") for the
licensing of CDMA technology are enforceable in accordance with their terms and
that the Vendor has all necessary rights and licenses to such CDMA technology so
as to be authorized and/or able to perform its obligations under this Contract
with respect thereto.
21.1.6 Scope. The representations and warranties of the Vendor
-----
pursuant to this subsection 21.1 will be deemed to apply to all of the Work
performed by any Subcontractor employed by the Vendor as though the Vendor had
itself performed such Work.
21.1.7 Requisite Knowledge. The Vendor represents and warrants that
-------------------
it has all requisite knowledge, know-how, skill, expertise and experience to
perform the Work in accordance with the terms of this Contract.
21.2 Representations and Warranties of the Owner. The Owner hereby
-------------------------------------------
represents and warrants to the Vendor as follows:
<PAGE>
71
21.2.1 Due Organization of the Owner. The Owner is a limited
-----------------------------
partnership, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to own and operate its
business and properties and to carry on its business as such business is now
being conducted and is duly qualified to do business in Delaware and in any
other jurisdiction in which the transaction of its business makes such
qualification necessary.
21.2.2 Due Authorization of the Owner; Binding Obligation. The Owner
--------------------------------------------------
has full power and authority to execute and deliver this Contract and to perform
its obligations hereunder, and the execution, delivery and performance of this
Contract by the Owner have been duly authorized by all necessary partnership
action on the part of the Owner; this Contract has been duly executed and
delivered by the Owner and is the valid and binding obligation of the Owner
enforceable in accordance with its terms, except as enforcement thereof may be
limited by or with respect to the following: (i) applicable insolvency,
moratorium, bankruptcy, fraudulent conveyance and other similar laws of general
application relating to or affecting the rights and remedies of creditors; (ii)
application of equitable principles (whether enforcement is sought in
proceedings in equity or at law); and (iii) provided the remedy of specific
enforcement or of injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
21.2.3 Non-Contravention. The execution, delivery and performance of
-----------------
this Contract by the Owner and the consummation of the transactions contemplated
hereby do not and will not contravene the partnership arrangements governing the
conduct of the partners in the Owner and do not and will not conflict with or
result in (i) a breach of or default under any indenture, agreement, judgment,
decree, order or ruling to which the Owner is a party which would materially
adversely affect the Owner's ability to perform its obligations under this
Contract or (ii) a breach of any Applicable Law.
SECTION 22 TITLE AND RISK OF LOSS
22.1 Title. Title to each Item of Equipment will pass to the Owner upon
-----
delivery thereof by the Vendor to the System Element Location to which each such
Item belongs. Prior to acquiring title to the Equipment, the Owner will not
cause or permit the Equipment to be sold, leased or subjected to a lien or other
encumbrance.
22.2 Risk of Loss. Risk of loss of any Products furnished to the Owner in
------------
connection with this Contract will pass from the Vendor to the Owner upon the
completion of the Installation by the Vendor of any such Product at the
appropriate System Element Location within the given PCS System provided that
the risk of loss of any given PCS System within the System will not pass to the
Owner until such time as the Vendor is fully prepared to commence testing for
the Substantial Completion of such PCS System in accordance with and pursuant to
Exhibit B3 and Exhibit A1; provided, however, that the Owner will assume the
-------- -------
risk of loss prior to such Substantial Completion by the Vendor for any such
Products damaged due to the gross negligence or willful misconduct of the Owner.
Until such time as
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72
risk passes to the Owner, the Vendor will, at its sole cost and expense, remedy,
repair and replace all physical damage, loss or injury to such property;
provided that, prior to the passing of risk of loss to the Owner, any actual
- - - -------- ----
proceeds of the insurance described in Schedule 6 payable with respect to such
physical damage, loss or injury, and any deductible payable with respect to an
Owner Loss, are paid to the Vendor as necessary to achieve such remedy, repair
or replacement.
SECTION 23 DISPUTE RESOLUTION
23.1 Dispute Resolution. Subject to subsections 24.1, 24.2, 24.3, 24.8
------------------
and 23.3, in the event any controversy, claim, dispute, difference or
misunderstanding arises out of or relates to this Contract, any term or
condition hereof, any of the Work to be performed hereunder or in connection
herewith, the respective System Managers of the Owner and the Vendor will meet
and negotiate in good faith in an attempt to amicably resolve such controversy,
claim, dispute, difference or misunderstanding in writing. Such System Managers
must meet for this purpose within ten (10) business days, or such other time
period mutually agreed to by the Parties, after such controversy, claim,
dispute, difference or misunderstanding arises. If the Parties are unable to
resolve the controversy, claim, dispute, difference or misunderstanding through
good faith negotiations within such ten (10) business day period, each Party
will, within five (5) business days after the expiration of such ten (10)
business day period, prepare a written position statement which summarizes the
unresolved issues and such Party's proposed resolution. Such position statement
must be delivered by the Vendor to the Owner's Vice President of Engineering or
Operations and by the Owner to the Vendor's corresponding officer or
representative for resolution within (5) business days, or such other time
period mutually agreed to by the Parties.
If the Parties continue to be unable to resolve the controversy, claim,
dispute, difference or misunderstanding, either Party may initiate arbitration
in accordance with the provisions of subsection 23.2 below; provided, however,
-------- -------
that with respect to any controversy, claim, dispute, difference or
misunderstanding arising out of or relating to this Contract by which either
Party seeks to obtain from the other monetary damages in excess of ($5,000,000)
either Party, in such case, may commence an action in any state or federal court
in accordance with subsection 27.7 to resolve such matter in lieu of proceeding
with an arbitration pursuant to and in accordance with subsection 23.2.
23.2 Arbitration. An arbitration proceeding initiated by either Party
-----------
under this Contract with respect to any controversy, claim, dispute, difference
or misunderstanding will be conducted in Kansas City, Missouri in accordance
with the Commercial Arbitration rules of the AAA, except that, at the request of
either Party, a stenographic transcript of the testimony and proceedings will be
taken and the arbitrators will base their decision upon the records and briefs
of the Parties.
Such arbitration will be initiated by either Party by notifying the other
Party in writing and will be settled before three (3) impartial arbitrators, one
of whom will be named by the Owner, one by the Vendor and the third by the two
arbitrators appointed by the Owner and
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73
the Vendor, respectively. All of the named arbitrators will have significant
experience in the wireless telecommunications industry. If either the Owner or
the Vendor fails to select an arbitrator within ten (10) days after notice has
been given of the initiation of the arbitration, the officer in charge of the
Kansas City, Missouri office of the AAA will have the right to appoint the other
arbitrator, and the two arbitrators thus chosen will then select the third
arbitrator.
The arbitration hearings will be held within fifteen (15) business days
after a Party's initiation of the arbitration. The Federal Rules of Evidence
will apply and reasonable discovery, including depositions, will be permitted.
Discovery issues will be decided by the arbitrators and post-hearing briefs will
be permitted.
The arbitrators will render a decision within ten (10) days after the
conclusion of the hearing(s) and a written opinion setting forth findings of
fact and conclusions of law will be made available to the Parties within that
time period. The decision of the majority of the arbitrators regarding the
matter submitted will be final and binding upon the Parties. Judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
Each Party will pay for the services and expenses of the arbitrator
appointed by it, its witnesses and attorneys, and all other costs incurred in
connection with the arbitration (including, without limitation, the cost of the
services and expenses of the arbitrator appointed by the two arbitrators
appointed by the Parties) will be paid in equal part by the Parties, unless the
award will specify a different division of the costs. Unless otherwise
specifically stated in this Contract, during the pendency of any arbitration
proceedings, the Parties agree to continue to perform their obligations
hereunder in the same manner as prior to the institution of arbitration
proceedings.
23.3 Other Remedies. Notwithstanding anything to the contrary herein
--------------
contained, each Party will be entitled to pursue any equitable rights and
remedies that are available at law or in equity without complying with
subsection 23.1 or 23.2.
SECTION 24 TERMINATION AND EVENTS OF DEFAULT
24.1 Termination Without Cause. (a) The Owner may, at its sole option,
-------------------------
terminate this Contract, in its entirety, for convenience upon sixty (60) days'
prior written notice at any time; provided that prior to any such termination
-------- ----
pursuant to this subsection 24.1 the Minimum Commitment will have been fulfilled
by the Owner in accordance with the terms of this Contract.
(b) Any orders made prior to any such termination described in clause (a)
above, other than the Initial Commitment, will remain in effect and will be
fulfilled to the extent that such orders are outstanding as of the date of such
termination.
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74
24.2 Termination for Cause. The Owner also has the right to terminate
---------------------
this Contract in its entirety (except as otherwise set forth in clause (l)
below) without any penalty or payment obligation upon the occurrence of any
Vendor event of default (each a "Vendor Event of Default") as set forth below.
The occurrence of any of the following will constitute a Vendor Event of
Default:
(a) the Vendor (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed within
sixty (60) days of such involuntary filing, (ii) admits the material allegations
of any petition in bankruptcy filed against it, (iii) is adjudged bankrupt, or
(iv) makes a general assignment for the benefit of its creditors, or if a
receiver is appointed for all or a substantial portion of its assets and is not
discharged within sixty (60) days after his appointment; or
(b) the Vendor commences any proceeding for relief from its creditors in
any court under any state insolvency statutes; or
(c) the Vendor materially disregards or materially violates material
Applicable Laws or material Applicable Permits; or
(d) the Vendor persistently and materially fails to timely correct Defects
and Deficiencies in accordance with the terms of this Contract; or
(e) the Vendor persistently fails to fulfill its obligations with respect
to the satisfaction, discharge or bonding of liens as set forth in subsection
2.35 hereof; or
(f) the Vendor abandons or ceases for a period in excess of thirty (30)
days its performance of the Work (except as a result of an event of Force
Majeure or a casualty which is fully covered by insurance or as to which other
provisions reasonably acceptable to the Owner are being diligently pursued) or
fails to begin the Work within thirty (30) days after the Notice to Proceed
Date; or
(g) the Vendor assigns or subcontracts Work other than in accordance with
the terms and conditions of Section 4; or
(h) the Vendor fails to materially comply with any accepted Change Order
pursuant to subsection 7.3; or
(i) the Vendor materially breaches this Contract (including, without
limitation, any action the Vendor may take on any Vendor-Controlled Site) and
thereby prejudices in any way deemed material by the parties providing financing
in connection with the build-out of the Nationwide Network in their reasonable
opinion (whether expressed and/or communicated through the Owner or otherwise);
or
(j) the Vendor fails to pay to the Owner any material amount due not
otherwise in good faith dispute to the Owner by the date required for such
payment; or
<PAGE>
75
(k) the Vendor fails to comply with subsection 27.22; or
(l) the Vendor misses any Interim Milestone within any given PCS System by
a period in excess of thirty (30) days and such failure to achieve such Interim
Milestone was not caused by (i) a Force Majeure event and/or (ii) any act or
omission of the Owner; provided that in such case the Owner will have the right,
-------- ----
but not the obligation, to terminate this Contract with respect to only that PCS
System in which such interim delay occurred unless such interim delay relates to
Project Milestones M3 and M4 as set forth on Exhibit A1 in which case the Owner
will have the right, but not the obligation, to terminate this Contract in its
entirety as otherwise set forth in this subsection 24.2; or
(m) the Vendor otherwise materially breaches any provision of this
Contract.
24.3 Remedies. (a) If any of the Vendor Events of Default exists, the
--------
Owner may, without prejudice to any other rights or remedies of the Owner in
this Contract or at law or in equity, terminate this Contract upon written
notice to the Vendor; provided, however, that the Owner will have first provided
-------- -------
to the Vendor the following periods of notice and opportunity to cure:
(i) in the case of an Event of Default specified in the
foregoing subsections 24.2 (e) and (k), the Owner will have provided
ten (10) business days' prior written notice to the Vendor, and the
Vendor will have failed to remedy such breach entirely by the end of
such ten (10) business day period;
(ii) in the case of an Event of Default specified in the
foregoing subsections 24.2 (a) or (b), no notice or opportunity to
cure will be required from the Owner; and
(iii) in the case of any other Event of Default by the
Vendor, the Owner will have provided forty-five (45) days' prior
written notice, and the Vendor will have failed (i) to commence to
cure the default within five (5) days after receipt of such notice,
and (ii) to diligently pursue such cure and remedy the breach entirely
by the end of said forty-five (45) day notice period.
(b) If the Owner elects to terminate this Contract, the Owner may,
without prejudice to any other rights or remedies of the Owner in this Contract
or of law or in equity, do one or more of the following:
(i) Take possession of all Engineering and design data,
procurement data, manufacturing data, construction and erection data,
start-up and testing data, materials, and Products that will become
part of the System and/or the specified PCS Systems, or the Work and
which Owner will have the right of ownership to and/or possession of
under the terms of this Contract, whether any of
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76
the same is in a partial state of completion or completed condition,
and title to any of said items vests in the Owner (if not already
vested by the provisions of this Contract);
(ii) Take possession of all Engineering and design data,
procurement data, manufacturing data, construction and erection data,
start-up and testing data, materials, and Products that will become
part of the System and/or the specified PCS Systems, or the Work
whether any of the same is in a partial state of completion or
completed condition (if not already vested in the Owner by the
provisions of this Contract);
(iii) Take temporary possession and control of all of the
Vendor's installation equipment, machinery, and the Vendor's
materials, supplies, Software and any and all tools (including, but
not limited to, any and all RF Engineering tools and/or software) at
any project site, including but not limited to any System Element
Location, within the System and/or the specified PCS Systems which in
the Owner's opinion are necessary to finish the Work subject to any
enforceable licenses related thereto or any confidentiality
restrictions otherwise contained in this Contract;
(iv) Direct that the Vendor assign its Subcontractor
agreements to the Owner without any change of price or conditions
therein or penalty or payment therefor to the full extent permitted by
such agreement or agreements; or
(v) Take over and finish the Work by whatever reasonable
methods the Owner may deem expedient;
provided, that, nothing contained in paragraphs (a) through (d) above will
- - - -------- ----
require the Vendor to relinquish to the Owner any of its manufacturing
facilities, specific Product designs (other than such designs previously
provided to the Owner pursuant to the terms of this Contract), Software Source
Codes, trade secrets or proprietary information not previously provided or made
available to the Owner, the System or any part thereof or any materials,
supplies, inventories, tools, software, engineering and/or designs that are not
integral or relevant to the completion of the Work.
24.4 Discontinuance of Work. Upon such notification of termination, the
----------------------
Vendor must immediately discontinue all of the Work (unless such notice of
termination directs otherwise), and, as more fully set forth in subsection
24.3(b), deliver to the Owner copies of all data, drawings, specifications,
reports, estimates, summaries, and such other information, and materials as may
have been accumulated by the Vendor in performing the Work, whether completed or
in process. Furthermore, the Vendor must assign, assemble and deliver to the
Owner all purchase orders and Subcontractor agreements (and in connection with
such agreements, to the full extent permitted by such agreements) requested by
the Owner.
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77
24.5 Payments. In the event the Owner terminates this Contract for cause
--------
pursuant to subsection 24.2, the Vendor will not be entitled to receive further
payment other than payments due and payable under this Contract and not subject
to dispute prior to such termination. Notwithstanding anything herein to the
contrary, the Owner may withhold payments, if any, to the Vendor for the
purposes of offset of amounts owed to the Owner pursuant to the terms of this
Contract until such time as the exact amount of damages due the Owner from the
Vendor is fully determined; provided, however, that the amount of any such
-------- -------
offset pursuant to this subsection 24.5 will not be greater than the amounts
otherwise owed to the Vendor and claimed hereunder.
24.6 Costs. In the event of a termination due to a Vendor Event of
-----
Default, the Owner will be entitled to the costs in connection with finishing
the Work (exclusive of any Liquidated Damages already paid and/or owing to the
Owner upon termination of this Contract), and if such costs exceed the unpaid
balance of the Contract Price for such Work, the Vendor will be liable to pay
such excess to the Owner, provided that the Owner will use the same care as it
-------- ----
would otherwise use in light of the extraordinary circumstances contemplated
under this subsection 24.6. The amount to be paid by the Vendor pursuant to
this subsection 24.6 will survive termination of this Contract and will be
subject to the limitations of liability in this Contract.
24.7 Continuing Obligations. Termination of this Contract for any reason
----------------------
(i) will not relieve either Party of its obligations with respect to the
confidentiality of the Proprietary Information as set forth in subsection 27.19,
(ii) shall not relieve either Party of any obligation which expressly or by
implication survives termination, and (iii) except as otherwise provided in any
provision of this Contract expressly limiting the liability of either Party,
will not relieve either Party of any obligations or liabilities for loss or
damage to the other Party arising out of or caused by acts or omissions of such
Party prior to the effectiveness of such termination or arising out of its
obligations as to portions of the Work already performed or of obligations
assumed by the Vendor prior to the date of such termination.
24.8 Vendor's Right to Terminate. The Vendor will have the option to
---------------------------
terminate this Contract without any penalty or payment obligations, other than
undisputed payment obligations outstanding as of the date of any such
termination pursuant to the terms of this Contract if:
(a) the Owner (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed within
forty-five (45) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it, (iii) is adjudged
bankrupt, or (iv) makes a general assignment for the benefit of its creditors,
or if a receiver is appointed for all or a substantial portion of its assets and
is not discharged within sixty (60) days after his appointment, and any such
filing, proceeding, adjudication or assignment as described herein above will
otherwise materially impair the Owner's ability to perform its obligations under
this Contract;
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78
(b) the Owner commences any proceeding for relief in any court under any
state insolvency statutes;
(c) the Owner fails to make payments of undisputed amounts due to the
Vendor pursuant to the terms of this Contract which are more than sixty (60)
days overdue, provided that such failure has continued for at least thirty (30)
-------- ----
days after the Vendor has notified the Owner of its right and intent to so
terminate on account of such overdue amount;
(d) the Owner continuously and materially breaches subsection 11.1 or
subsection 27.19 notwithstanding the fact that the Vendor will have provided the
Owner with prior written notice describing the alleged material breaches and
will have given the Owner a reasonable time (not less than thirty (30) days) to
cure any such breaches; or
(e) except as otherwise provided in subsection 24.1 the Owner fails to
fulfill its Initial Commitment within five (5) years of the Effective Date for
whatever reason other than (i) any act or omission of the Vendor, (ii) inability
to successfully complete Microwave Relocation in any PCS System, (iii) inability
to successfully attain Site Acquisition Substantial Completion in any given PCS
System or (iv) any event otherwise constituting a Force Majeure hereunder; or
(f) the Owner otherwise materially breaches this Contract in a way which
materially and adversely affects the Vendor and/or its performance under this
Contract, provided that in no event will (i) Site Acquisition, Microwave
-------- ----
Relocation and/or Network Interconnection be deemed to be obligations of the
Owner under this Contract for the purposes of this subsection 24.8(f) or (ii)
the failure and/or inability of the Owner to complete any such activities for
any reason whatsoever be deemed a breach of the Owner under the terms of this
Contract including, but not limited to, this subsection 24.8(f).
24.9 Special Termination Events. (a) In the event that financing for the
--------------------------
Owner's build-out of the initial phase of the Nationwide Network has not been
finalized with the Vendor and the Other Vendors on terms and conditions
reasonably satisfactory to the Owner, on or before one hundred and eighty (180)
days after the Effective Date, the Owner will have the right, but not the
obligation, to terminate this Contract in its entirety without charge or penalty
of any kind. In the event of a termination of this Contract pursuant to this
subsection 24.9(a) the Owner will remain liable for amounts due to the Vendor
for all Work performed or Products delivered by the Vendor or any of its
Subcontractors pursuant to the specific terms of this Contract which had been
directly delivered to or performed for the Owner and/or any of its facilities or
sites in accordance with the terms of this Contract including, but not limited
to, the Project Milestones. Any amounts owed by the Owner for Work done or
Products delivered by the Vendor during such interim one hundred and eighty
(180) day period (the "Financing Interim Period") not otherwise invoiced to the
Owner by the Vendor prior to the termination of such Financing Interim Period,
will be invoiced to the Owner by the Vendor within forty-five (45) days of such
termination pursuant to this subsection 24.9(a) and will be payable to the
extent not otherwise in dispute by the Owner within forty-five (45) days of
receipt of such invoice; provided that in no event will the Owner be liable to
-------- ----
the Vendor due to a termination of this Contract pursuant to this subsection
24.9(a) for any of the
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79
Vendor's direct or indirect costs or expenses incurred in connection with any
suppliers or equipment ordered by the Vendor or agreements entered into by the
Vendor in order to enable it to fulfill its obligations hereunder or in
connection with the establishment of and/or upgrade to its manufacturing,
personnel, engineering, administrative or other capacities and/or resources in
contemplation of or pursuant to its performance in accordance the terms of this
Contract and any amounts due to the Vendor pursuant to this subsection 24.9(a)
will be limited in all cases to Work actually done or Products actually
delivered to the Owner, its sites or its facilities.
(b) At any time after the Effective Date of this Contract during the
Financing Interim Period, the Vendor will have the right, but not the
obligation, upon not less than thirty (30) days' prior written notice to the
Owner, to terminate its obligations under this Contract without penalty if it
believes, in its reasonable opinion, that the financing for the System and/or
the Nationwide Network is not likely to be finalized by the end of any such
Financing Interim Period. In the event of a termination pursuant to this
subsection 24.9(b) payment obligations incurred by the Owner for Work done by
the Vendor pursuant to the terms of this Contract will be payable by the Owner
to the Vendor on the same terms and subject to the limitations set forth in
subsection 24.9(a) above.
(c) If at any time after the Effective Date any material change shall have
occurred in any Applicable Law or in the interpretation thereof by any
Governmental Entity, or there shall be rendered any decision in any judicial or
administrative case, in either case which, in the reasonable opinion of the
Owner, would make the Owner's use of any part of any PCS System illegal or would
subject the Owner or any of its Affiliates to any material penalty, other
material liability or onerous condition or to any burdensome regulation by any
Governmental Entity or otherwise render the use of such PCS System economically
nonviable, then, with respect to such PCS System, or affected part thereof, or
with respect to the entire System if so affected, the Owner may terminate this
Contract without charge or penalty of any kind; provided that (i) the Owner
-------- ----
gives the Vendor prior written notice of any such change or decision; (ii) that
the Owner uses its reasonable efforts for a reasonable time to reverse or
ameliorate such change or decision to the extent possible or practical prior to
declaring such termination and (iii) the Owner, at the Vendor's request, gives
the Vendor a legal opinion from a reputable law firm with experience in the area
confirming the Owner's reasonable opinion as set forth above. In the event of a
termination pursuant to this subsection 24.9(c), payment obligations incurred by
the Owner for work done by the Vendor prior to such termination pursuant to this
Contract will be payable by the Owner to the Vendor on the same terms and
subject to the limitations set forth in subsection 24.9(a) above.
SECTION 25 SUSPENSION
25.1 Owner's Right to Suspend Work. The Owner may, at any time and upon
-----------------------------
reasonable notice to the Vendor, order the Vendor, in writing, to suspend all or
any part of the Work for such reasonable period of time as the Owner may
reasonably determine to be appropriate for its convenience. Any request by the
Vendor for a change in the Specifications caused by the Owner's suspension of
the Work pursuant to this subsection 25.1 will be
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80
subject to the review and reasonable acceptance of the Owner. No modification
to the Specifications will be made to the extent that performance is, was or
would have been suspended, delayed or interrupted for any other cause due to the
Vendor's fault or if the suspension had no effect on agreed upon performance
deadlines and/or Project Milestones set forth in this Contract.
SECTION 26 MOST FAVORED CUSTOMER
26.1 Most Favored Customer Status. (a) With respect to the Initial
----------------------------
System (including any Expansions or additions to the Initial System within the
context of the Initial System pursuant to the terms of this Contract), the Owner
will be deemed the Vendor's most important and favored Customer and will always
receive priority in terms of price, availability and quantity of CDMA 1900
Products, Engineering and Services. [ ] the Owner will receive Products,
Engineering and Services at prices and on payment terms no less favorable to the
Owner than those offered or available to any other Customer (other than Initial
Affiliates and/or Additional Affiliates pursuant to the terms of this Contract)
of the Vendor.
(b) On an annual basis throughout the Term of this Contract commencing on
the Effective Date the Vendor will be required to audit its pricing of all CDMA
1900 products, engineering and services provided to all of its Customers (other
than Initial Affiliates and/or Additional Affiliates pursuant to the terms of
this Contract) in the preceding calendar year and certify to the Owner in a
certificate executed by a duly authorized officer of the Vendor (the "MFC
Certificate") that the Owner has in fact received the prices, availability and
quantity of and on Products, Engineering and Services in accordance with the
terms of clause (a) above. The annual MFC Certificate delivered to the Owner in
accordance with this subsection 26.1 will be subject to verification by an
independent, reputable and nationwide public accounting firm reasonably
acceptable to the Owner and at the sole cost and expense of the Vendor.
(c) To the extent that it is determined pursuant to clause (b) above that
the Vendor has not in fact complied with the terms of clause (a) above the Owner
will have thirty (30) business days from receipt of the MFC Certificate as
verified by the independent public accountant to provide the Vendor with a
written claim for Product and/or Engineering and/or Service pricing rebates on
future purchases under this Contract based upon the Owner's reasonable
calculation of the impact on the Owner of the Vendor's failure to comply with
clause (a) of this subsection 26.1. To the extent the Vendor disagrees with any
such claim for such pricing rebates made by the Owner pursuant to this clause
(c) the Vendor will have the right within ten (10) business days of receiving
the Owner's written rebate claim to submit the Owner's claim and the Vendor's
written response thereto to an Independent Auditor who will have the authority
only to determine whether the Owner's calculation of the claimed pricing rebate
is fair and reasonable in light of the Vendor's non-compliance with the terms of
clause (a) above. The Independent Auditor's determination must be made and
delivered to both the Vendor and the Owner within ten (10) business days of
receiving the
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81
request from the Vendor. Such determination once made by the Independent
Auditor will be final and binding on the Parties and will not be subject to
further modification.
SECTION 27 MISCELLANEOUS
27.1 Amendments. The terms and conditions of this Contract, including the
----------
provisions of Exhibits and Schedules hereto, may only be amended by mutually
agreed contract amendments. Each amendment must be in writing and will identify
the provisions to be changed and the changes to be made. Contract amendments
must be signed by duly authorized representatives of each of the Vendor and the
Owner.
27.2 Owner Liabilities. The Parties understand and agree that none of the
-----------------
Partners, nor any of their affiliates will guarantee or otherwise be in any way
liable with respect to any obligations or liabilities of the Owner or any of its
subsidiaries pursuant to this Contract. The Parties further understand and
agree that neither the Owner nor any of its subsidiaries will guarantee or
otherwise be in any way liable for any obligations or liabilities of any of the
Partners or any Affiliate of the Owner pursuant to this Contract unless, and
only to the extent, (i) the Owner or any one of its subsidiaries in accordance
with the Owner's direction expressly agrees in writing to guarantee or otherwise
be liable for such liability, or (ii) in the case of an Affiliate, such
Affiliate orders Products and/or Services through the Owner under this Contact.
27.3 Offset. The Vendor hereby waives any right of offset of amounts owed
------
by the Owner to the Vendor pursuant to the terms of this Contract.
27.4 Assignment. Except as otherwise permitted herein, neither this
----------
Contract nor any portion hereof may be assigned by either Party without the
express prior written consent of the other Party. The Owner may, without the
consent of the Vendor, collaterally assign its rights hereunder to any or all
parties providing financing for any part of the Nationwide Network under a
collateral trust for the benefit of the Vendor and one or more other entities
providing financing for any part of the Nationwide Network or similar
arrangement for the benefit of the Vendor and one or more other entities
providing for the financing for any part of the Nationwide Network, in either
case, which collateral trust or similar arrangement, as the case may be, is
reasonably acceptable to the Vendor in accordance with the terms of the
financing documents. If requested by the Owner, the Vendor will within seven
(7) days of such request provide a written consent to any such assignment;
provided that such consent will permit re-assignment if the financing parties
- - - -------- ----
exercise their remedies under the documents for such financing subject to
reasonable standards as to (i) the creditworthiness of the assignee and (ii) the
fact that the assignee is not at such time a competitor of the Vendor. The
foregoing rights and obligations are in addition to those set forth in
subsection 27.21. Any attempted assignment in violation of the terms of this
Contract will be null and void.
27.5 Enforcement. The Parties agree that the Owner may enforce the
-----------
provisions of subsections 11.5 and 27.4 regarding assignment by an action for
injunction or other equitable remedies.
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27.6 Notices. Any notice, request, consent, waiver or other communication
-------
required or permitted hereunder will be effective only if it is in writing and
personally delivered by hand or by overnight courier or sent by certified or
registered mail, postage prepaid, return receipt requested, addressed as
follows:
If to the Owner:
MajorCo L.P.
c/o Sprint Telecommunications Venture
9221 Ward Parkway
Kansas City, Missouri 64113
Attention: Director, Program Management
If to the Vendor:
Northern Telecom Inc.
2435 N. Central Expressway
Richardson, TX 75080
Attention: Director, CDMA 1900 Wireless Contract Administration
Written notice given pursuant to this subsection 27.6 will be delivered to
recipients authorized by the Owner and the Vendor, as the case may be, in
writing and when so delivered will be deemed to have been fully served and
delivered.
27.7 Governing Law and Forums. This Contract is governed by the laws and
------------------------
statutes of the State of Missouri, exclusive of Missouri's conflict of laws
rules. This Contract and the Work will be deemed to be made, executed and
performed in the State of Missouri. If one Party commences a lawsuit in
relation to this Contract against the other Party, such lawsuit can only be
brought in the State of Missouri or the State of Delaware. The Parties hereby
waive a trial by jury in any such lawsuit. The Vendor and the Owner each hereby
irrevocably (a) agrees that any suit, action or other legal proceeding arising
out of or relating to this Contract will be brought in the Federal District
Court for the Western District of Missouri or the District of Delaware, as the
case may be, which courts will have exclusive jurisdiction over any controversy
arising out of this Contract, (b) consents to the jurisdiction of such courts in
any such suit, action or proceeding and (c) waives any objection which it may
have to the laying of venue of any such suit, action or proceeding in such
courts and claim that any such suit, action or proceeding has been brought in an
inconvenient forum. Service of process in any suit, action or proceeding may be
made by mailing or delivering a copy of such process to the Owner or the Vendor,
as the case may be, at the addresses indicated in subsection 27.6 hereof and in
the manner set forth in such subsection 27.6. Nothing in this subsection 27.7
will affect the right of the Owner or the Vendor to serve legal process in any
other manner permitted by law.
27.8 Compliance with Law. The Owner and the Vendor will (a) comply with
-------------------
all Applicable Laws in the performance of this Contract, including, without
limitation, the laws
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83
and regulations of the United States Department of Commerce and State Department
and any other applicable agency or department of the United States regarding the
import, re-import, export or re-export of products or technology; and (b)
indemnify each other for any loss, liability or expense incurred as the result
of breach of this subsection 27.8.
27.9 Independent Contractor. All work performed by any Party under this
----------------------
Contract will be performed as an independent contractor and not as an agent of
the other and no Persons furnished by the performing Party will be considered
the employees or agents of the other. The performing Party will be responsible
for its employees' compliance with all laws, rules, and regulations while
performing all work under this Contract.
27.10 Headings. The headings given to the Sections and subsections herein
--------
are inserted only for convenience and are in no way to be construed as part of
this Contract or as a limitation of the scope of the particular Section or
subsection to which the title refers.
27.11 Severability. Whenever possible, each provision of this Contract
------------
will be interpreted in such a manner as to be effective and valid under such
applicable law, but, if any provision of this Contract will be held to be
prohibited or invalid in any jurisdiction, the remaining provisions of this
Contract will remain in full force and effect and such prohibited or invalid
provision will remain in effect in any jurisdiction in which it is not
prohibited or invalid.
27.12 Waiver. Unless otherwise specifically provided by the terms of this
------
Contract, no delay or failure to exercise a right resulting from any breach of
this Contract will impair such right or will be construed to be a waiver
thereof, but such right may be exercised from time to time as may be deemed
expedient. If any representation, warranty or covenant contained in this
Contract is breached by either Party and thereafter waived by the other Party,
such waiver will be limited to the particular breach so waived and not be deemed
to waive any other breach under this Contract.
27.13 Public Statements. Neither the Owner, Vendor nor its Subcontractors
-----------------
will issue any public statement (or any private statement unless required in the
performance of the Work), except as stated below, relating to or in any way
disclosing any aspect of the Work, the System, or any PCS System including the
scope, extent or value of the Work and/or the System or any PCS System. Express
written consent of the other Party (except in the case of any Subcontractors the
consent of the Owner will be required) is required prior to the invitation of or
permission to any reporter or journalist to enter upon the System or any part
thereof. The Vendor agrees not to use for publicity purposes any photographs,
drawings and/or materials describing the System without obtaining the prior
written consent of the Owner, which consent will not be unreasonably withheld.
This subsection 27.13 is not intended to exclude the provision of necessary
information to prospective Subcontractors and the Vendor's personnel. All other
such public disclosures require the written consent of the Owner. The
obligations of the Parties under this subsection 27.13 are in addition to their
respective obligations pursuant to subsection 27.19.
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84
27.14 Records and Communications. To the extent not already established,
--------------------------
promptly after the Work begins, procedures for keeping and distributing orderly
and complete records of the Work and its progress will be established. The
procedures so established will be followed throughout the course of the Work
unless the Owner and the Vendor mutually agree in advance in writing to revise
the procedures. Furthermore, immediately after the Notice to Proceed is issued,
complete procedures for communications among the Owner and the Vendor will be
established. The procedures so established will be followed throughout the
course of the Work unless the Owner and the Vendor mutually agree in advance and
in writing to revise such procedure.
27.15 Ownership of Specifications. Neither the Vendor nor any
---------------------------
Subcontractor, nor any other Person performing or furnishing the Work, whether
or not under a direct or indirect contract with the Owner, will have or acquire
any title to or ownership rights in any of the Specifications, or in any other
part or portion of this Contract (or copies of any of the Specifications or this
Contract); and no such Party will reuse any of the Specifications on and/or with
respect to any other project without the prior written consent of the Owner.
The Specifications and this Contract (and any and all copies thereof), are owned
by and title resides in the Owner, unless otherwise agreed between the Owner and
any other Person. Notwithstanding anything contained in this subsection 27.15
to the contrary, the Owner will not acquire any patent, copyright or trade
secret rights as a result of this Contract, except pursuant to licenses and
other approvals provided in connection with the performance of the Work and
except to the extent that a non-exclusive license of any of the Vendor's patent,
copyright or trade secret rights is required to perform the Work and as further
provided for in this Contract.
27.16 Financing Parties Requirements. The Vendor acknowledges that the
------------------------------
Owner represents that attainment of financing for construction of the Nationwide
Network may be subject to conditions that are customary and appropriate for the
providers of such financing. Therefore, the Vendor agrees to execute promptly
any reasonable amendment to or modification of this Contract required by such
providers (including, without limitation, any pertinent industrial development
authority or other similar governmental agency issuing bonds for financing of
the System) in order to obtain such financing. In the event that any such
amendment or modification materially increases the Vendor's risk or costs
hereunder, the Owner and the Vendor will negotiate in good faith to adjust the
Contract Price, and to equitably adjust such other provisions of this Contract,
if any, which may be affected thereby, to the extent necessary to reflect such
increased risk or costs. Amendments or modifications not materially increasing
the Vendor's risk or costs will be made without charge by the Vendor. The
Vendor will be responsible for and pay all costs as a result of the Vendor's or
its Subcontractors' failure to promptly comply with the request for any such
modification or amendment made by any provider of financing described in this
subsection.
27.17 Owner Review, Comment and Approval. To the extent that various
----------------------------------
provisions of this Contract provide for the Owner's review, comment, inspection,
evaluation, recommendation or approval, the Owner may at its option do so in
conjunction and/or consultation with the Vendor. To the extent that this
Contract requires the Owner to submit, furnish, provide or deliver to the Vendor
any report, notice, Change Order, request or other
<PAGE>
85
items, the Owner may at its option and upon written notice to the Vendor
designate the Engineer to submit, furnish, provide or deliver such items as the
Owner's agent therefor. To the extent that various provisions of this Contract
provide that the Owner may order, direct or make requests with respect to
performance of the Work or is provided access to the System sites or any other
site, the Owner may at its option and upon written notice to the Vendor
authorize the Engineer to act as the Owner's agent therefor. Upon receipt of
such notice, the Vendor shall be entitled to rely upon such authorization until
a superseding written notice from the Owner is received by the Vendor.
27.18 Specifications. The Owner acknowledges that parts of the
--------------
Specifications are comprised of Specifications prepared by the Vendor and that
the Vendor contributed significantly to many other portions thereof. The Owner
also acknowledges that, during the normal design, evolution and development
process, portions of the Specifications may appear in design and procurement
documents prepared by the Vendor in its normal course of business; provided,
--------
however, that the Owner will have no liability for any third party claims for
- - - -------
contributor infringement or the like with respect to such Specifications
prepared by the Vendor or portions thereof to which the Vendor contributed
significant portions or use and the Vendor will hold the Owner harmless from any
such third party claims.
27.19 Confidentiality. (a) All information, including without limitation
---------------
all oral and written information, disclosed to the other Party is deemed to be
confidential, restricted and proprietary to the disclosing Party (hereinafter
referred to as "Proprietary Information"). Each Party agrees to use the
Proprietary Information received from the other Party only for the purpose of
this Contract. Except as specified in this Contract, no other rights, and
particularly licenses, to trademarks, inventions, copyrights, patents, or any
other intellectual property rights are implied or granted under this Contract or
by the conveying of Proprietary Information between the Parties. Proprietary
Information supplied is not to be reproduced in any form except as required to
accomplish the intent of, and in accordance with the terms of, this Contract.
The receiving Party must provide the same care to avoid disclosure or
unauthorized use of Proprietary Information as it provides to protect its own
similar proprietary information. All Proprietary Information must be retained
by the receiving Party in a secure place with access limited to only such of the
receiving Party's employees or agents who need to know such information for
purposes of this Contract and to such third parties as the disclosing Party has
consented to by prior written approval. All Proprietary Information, unless
otherwise specified in writing (i) remains the property of the disclosing Party,
(ii) must be used by the receiving Party only for the purpose for which it was
intended, and (iii) such Proprietary Information, including all copies of such
information, must be returned to the disclosing Party or destroyed after the
receiving Party's need for it has expired or upon request of the disclosing
Party, and, in any event, upon termination of this Contract. At the request of
the disclosing Party, the receiving Party will furnish a certificate of an
officer of the receiving Party certifying that Proprietary Information not
returned to disclosing Party has been destroyed. For the purposes hereof,
Proprietary Information does not include information which:
<PAGE>
86
(i) has been or may in the future be published or is now or may
in the future be otherwise in the public domain through no fault
of the receiving Party;
(ii) prior to disclosure pursuant to this Contract is properly
within the legitimate possession of the receiving Party;
(iii) subsequent to disclosure pursuant to this Contract is
lawfully received from a third party having rights in the
information without restriction of the third party's right to
disseminate the information and without notice of any restriction
against its further disclosure;
(iv) is independently developed by the receiving Party through
parties who have not had, either directly or indirectly, access
to or knowledge of such Proprietary Information;
(v) is transmitted to the receiving Party after the disclosing
Party has received written notice from the receiving Party that
it does not desire to receive further Proprietary Information; or
(vi) is obligated to be produced under order of a court of
competent jurisdiction or other similar requirement of a
Governmental Entity, so long as the Party required to disclose
the information provides the other Party with prior notice of
such order or requirement.
(b) Because damages may be difficult to ascertain, the Parties agree that
in the event of a breach or threatened breach of this Contract, without limiting
any other rights and remedies specified herein, an injunction may be sought
against the Party who has breached or threatened to breach this subsection
27.19. Each Party represents and warrants that it has the right to disclose all
Proprietary Information which it has disclosed to the other Party pursuant to
this Contract, and each Party agrees to indemnify and hold harmless the other
from all claims by a third party related to the wrongful disclosure of such
third party's proprietary information. Otherwise, neither Party makes any
representation or warranty, express or implied, with respect to any Proprietary
Information.
27.20 Entirety of Contract; No Oral Change. This Contract and the
------------------------------------
Exhibits and Schedules referenced herein constitute the entire contract between
the Parties with respect to the subject matter hereof, and supersede all
proposals, oral or written, all previous negotiations, and all other
communications between the Parties with respect to the subject matter hereof.
No modifications, alterations or waivers of any provisions herein contained will
be binding on the Parties hereto unless evidenced in writing signed by duly
authorized representatives of both Parties as set forth in subsection 27.1. Any
representations by the Vendor in any RFP response and/or any documentation
otherwise provided to the Owner in connection with the Vendor's solicitation of
the business granted pursuant hereto prior to the execution hereof will also be
deemed to be incorporated into and otherwise made a part of this Contract.
<PAGE>
87
27.21 Successors and Assigns. This Contract will bind and inure to the
----------------------
benefit of the Parties to this Contract, their successors and permitted assigns.
27.22 Change of Control of the Vendor. The Vendor will not consolidate
-------------------------------
with or merge into any other Person or convey, transfer or lease all or
substantially all of its assets to any Person, nor will any Person or group (as
such term is defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) own or acquire fifty percent (50%) of the value of the Vendor's
equity where such Person or group did not own as of the Effective Date in excess
of ten percent (10%) of such equity (any such Person or group will be referred
to as the "Vendor's Succeeding Entity"), unless:
(i) the Vendor's Succeeding Entity will agree to
assume the obligations of the Vendor under this Contract; and
(ii) the Owner will have approved the transaction,
based solely on (i) the creditworthiness of the Vendor's
Succeeding Entity, (ii) whether the Vendor's Succeeding Entity is
a competitor of the Owner and (iii) whether in the Owner's
reasonable judgment the Vendor's Succeeding Entity will be able
to fulfill the obligations for present and future orders under
this Contract.
27.23 Change of Control of the Owner. Except as otherwise permitted under
------------------------------
the documents relating to the financing of the build-out of the Nationwide
Network, the Owner will not consolidate with or merge into any other business
entity or convey, transfer or lease all or substantially all of its assets to
any Person, nor will any Person or group (as such term is defined in the
Exchange Act) own or acquire fifty percent (50%) of the value of the Owner's
limited partnership interests or general partnership interests where such Person
or group did not own as of the Effective Date in excess of ten percent (10%) of
either of such partnership interests (any such Person or group will be referred
to as the "Owner's Succeeding Entity"), unless:
(a) the Owner's Succeeding Entity will agree to assume the obligations of
the Owner under this Contract; and
(b) the Vendor will have approved the transaction, based solely on (i) the
creditworthiness of the Owner's Succeeding Entity and (ii) whether the Owner's
Succeeding Entity is a competitor of the Vendor.
27.24 Relationship of the Parties. Pursuant to subsection 27.9, nothing
---------------------------
in this Contract will be deemed to constitute either Party a partner, agent or
legal representative of the other Party, or to create any fiduciary relationship
between the Parties. The Vendor is and will remain an independent contractor in
the performance of this Contract, maintaining complete control of its personnel,
workers, Subcontractors and operations required for performance of the Work.
This Contract will not be construed to create any relationship, contractual or
otherwise, between the Owner and any Subcontractor.
<PAGE>
88
27.25 Discretion. Notwithstanding anything contained herein to the
----------
contrary, to the extent that various provisions of this Contract call for an
exercise of discretion in making decisions or granting approvals or consents,
the Parties will be required to exercise such discretion, decision or approvals
in accordance with accepted PCS industry practices.
27.26 Non-Recourse. No past, present or future limited or general partner
------------
in or of the Owner, no parent or other affiliate of any company comprising the
Owner, and no officer, employee, servant, executive, director, agent or
authorized representative of any of them (each, an "Operative") will be liable
by virtue of the direct or indirect ownership interest of such Operative in the
Owner for payments due under this Contract or for the performance of any
obligation, or breach of any representation or warranty made by the Owner
hereunder. The sole recourse of the Vendor for satisfaction of the obligations
of the Owner under this Contract will be against the Owner and the Owner's
assets and not against any Operative or any assets or property of any such
Operative. In the event that a default occurs in connection with such
obligations, no action will be brought against any such Operative by virtue of
its direct or indirect ownership interest in the Owner. The foregoing
provisions of this subsection 27.26 will not in any way limit or restrict any
right or remedy of the Vendor with respect to, and the Operatives will remain
fully liable for, any fraud perpetuated by such Operatives.
27.27 Improvements, Inventions and Innovations. All rights in any
----------------------------------------
improvements, inventions, and innovations made by the Owner will vest in the
Owner, and the Owner and its affiliates will have the right to exploit such
improvements, inventions, and innovations. Except as may have been otherwise
agreed with respect to Custom Material under subsection 11.10.2, all rights in
any improvements, inventions and innovations made by the Vendor will vest in the
Vendor, and the Vendor and its affiliates will have the right to exploit such
improvements, inventions and innovations; provided, however, that the Owner and
-------- -------
its affiliates will be granted a non-exclusive royalty-free license for use in
any future project in connection with or related to the System by the Owner (or
the parties that comprise the Owner or their respective affiliates) of any such
improvement, invention or innovation made by the Vendor (but not by any
Subcontractor) in the course and as a result of performing the Work and in which
the Vendor owns or possesses any proprietary interest.
27.28 Attachments and Incorporations. All Schedules and Exhibits attached
------------------------------
hereto, are hereby incorporated by reference herein and made a part of this
Contract with the same force and effect as though set forth in their entirety
herein.
27.29 Conflicts. In the event of any conflict or inconsistency among the
---------
provisions of this Contract and the documents attached hereto and incorporated
herein, such conflict or inconsistency will be resolved by giving precedence to
this Contract and thereafter to the Exhibits and Schedules.
27.30 Counterparts. This Contract may be executed by one or more of the
------------
Parties to this Contract on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
<PAGE>
THE OWNER AND THE VENDOR HAVE READ THIS CONTRACT INCLUDING ALL SCHEDULES
AND EXHIBITS HERETO AND AGREE TO BE BOUND BY ALL THE TERMS AND CONDITIONS HEREOF
AND THEREOF.
IN WITNESS WHEREOF, the Parties have executed this Contract as of the date
first above written.
NORTHERN TELECOM INC.
By: /s/ D.A. Twyver
----------------
Name: D.A. Twyver
Title: Vice President
MAJORCO L.P., as the Owner
By: /s/ Ronald T. LeMay
--------------------
Name: Ronald T. LeMay
Title: Chief Executive Officer
<PAGE>
SCHEDULE 2
[ ]
SCHEDULE 3
[ ]
<
SCHEDULE 4
ALLOCATED SYSTEM AREAS
----------------------
(NORTEL)
CITY
----
Miami
New Orleans
Louisville
Birmingham
Nashville
St. Louis
Dallas
San Antonio
Kansas City
Oklahoma City
Little Rock
Wichita
Tulsa
Omaha
Minneapolis
Des Moines
Indianapolis
<PAGE>
Attached are the Owner's System Area (or MTA) coverage definition maps.
LEGEND
The highways shown in green are only those highways with an average daily
traffic count of greater than 10,000 vehicles. The darker green represents an
average daily traffic count of greater than 50,000 vehicles.
The census tracts of the System Areas were combined and ranked by demand
density in erlangs (wireless talk time traffic) per square mile for year 10,
based on busy hour (peak daily demand hour) minutes of use estimates. Those
tracts which fall within the top 70% of the population total a national level
are displayed in red. Those tracts which fall within the next 10% of the total
population (70 to 80% at the national level) are displayed in pink.
INITIAL SYSTEM COVERAGE
For contiguous Initial System coverage, the Contract's requirement is to
cover all of the red, pink and green areas within the blue "Arbitron Radio
Market" boundaries. This represents 60% covered population at the national
level for the Initial System.
<PAGE>
Birmingham MTA
[MAP]
<PAGE>
Dallas MTA
[MAP]
<PAGE>
Des Moines MTA
[MAP]
<PAGE>
Indianapolis MTA
[MAP]
<PAGE>
Kansas City MTA
[MAP]
<PAGE>
Little Rock MTA
[MAP]
<PAGE>
Louisville MTA
[MAP]
<PAGE>
Miami MTA
[MAP]
<PAGE>
Minneapolis MTA
[MAP]
<PAGE>
Nashville MTA
[MAP]
<PAGE>
New Orleans MTA
[MTA]
<PAGE>
Oklahoma MTA
[MAP]
<PAGE>
Omaha MTA
[MAP]
<PAGE>
San Antonio MTA
[MAP]
<PAGE>
St Louis MTA
[MAP]
<PAGE>
Tulsa MTA
[MAP]
<PAGE>
Wichita MTA
[MAP]
<PAGE>
SCHEDULE 5
- - - ----------
INITIAL AFFILIATES
1. Each of the Partners and their operating subsidiaries.
2. APC and its operating subsidiaries.
3. PhillieCo and its operating subsidiaries.
4. Continental and its operating subsidiaries.
5. TCG and its operating subsidiaries.
6. NewTelCo. And its operating subsidiaries.
<PAGE>
SCHEDULE 7
- - - ----------
PRODUCTS
A. Essential Equipment: (Including Applicable Software)
* DMS-MTX
* Base Station Controller (BSC) and Base Station Manager (BSM)
* Base Transceiver Station (BTS)
* Visual Display Units (VDU) used as DMS-MTX Maintenance and Administration
Positions (MAP) and provided by Vendor
* Printers used at DMS-MTX Maintenance and Administration Positions (MAP) and
provided by Vendor
* Voice Mail Systems if provided by Vendor
* Service Node if provided by Vendor
* HLR/SCP if provided by Vendor
* DC Power plants and batteries if provided by Vendor
B. Non-Essential Equipment:
Non-Essential Equipment includes, by way of example:
* Towers
* Antennas
* Concrete
* Fences
* Roads
* Buildings/Shelters
* Fire Extinguishers
* 120 VAC Electrical Systems
* Lighting
* Thermostats
* Heater/Air Conditioners
* Cable Rack
* Nuts, Bolts, Connectors, Washers
* Isolators
* Furniture
* Coax Cable
* Antenna Mounting Assemblies
* Connectors, Isolators
* Cable Rack
* CMI/HIC (Including Applicable Software)
<PAGE>
Schedule 11
-----------
CANCELLATION CHARGES
Without charge and/or penalty, the Owner may cancel any order for a Product no
later than ninety (90) days prior to the earliest date scheduled for shipment of
such Product; or
If the Owner cancels an order less than ninety (90) days prior to the earliest
date scheduled for shipment of such Product, the Owner shall pay to the Vendor a
cancellation charge of ten percent (10%) of the price for such Product pursuant
to Schedule 2; or
If the Owner cancels an order less than sixty (60) days prior to the earliest
date scheduled for shipment of such Product, the Owner shall pay to the Vendor a
cancellation charge of fifteen percent (15%) of the price for such Product
pursuant to Schedule 2; or
If the Owner cancels an order less than thirty (30) days prior to the earliest
date scheduled for shipment of such Product, the Owner shall pay to the Vendor a
cancellation charge of twenty percent (20%) of the price for such Product
pursuant to Schedule 2.
The Owner may not cancel an order after the applicable date scheduled for
shipment of such Product. The payment of such charges shall be the Vendor's
sole remedy and the Owner's sole obligation for such canceled order. Any
changes requested by the Owner that involve the return or exchange of Non-
essential Equipment will be subject to the standard policies of the applicable
Non-essential Equipment supplier unless such policies of such supplier are
otherwise set out in the applicable agreement between such Non-essential
Equipment supplier and the Vendor, in which case the Owner will be entitled to
cancel any such order for Non-essential Equipment in accordance with the terms
of such agreement. For the purposes of this Schedule 11, the term "order" shall
not mean the Minimum Commitment or the Initial Commitment.
<PAGE>
SCHEDULE 12 A/B
[ ]
SCHEDULE 13
[ ]
Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
AMENDMENT NO. 2
TO
PROCUREMENT AND SERVICES CONTRACT
BETWEEN
SPRINT SPECTRUM EQUIPMENT COMPANY, L.P.
AND
NORTHERN TELECOM INC.
Made as of this 29th day of January, 1997, by and between Sprint
Spectrum Equipment Company, L.P. ("Equipment Co.") (the "Owner"), a Delaware
limited partnership, and Northern Telecom Inc., a Delaware corporation (the
"Vendor").
RECITALS:
WHEREAS, Equipment Co. and the Vendor, are parties to that certain
Procurement and Services Contract dated as of January 31, 1996, as amended the
"Contract", wherein Sprint Spectrum Holding Company L. P. (formerly known as
MajorCo, L.P., "Holdings") agreed to have the Vendor engineer and construct PCS
Systems in the System Areas and the Vendor agreed to provide Products and
Services to Holdings in connection with the engineering and construction of PCS
Systems in the System Areas pursuant to and in accordance with the terms of the
Contract; and
WHEREAS, Equipment Co. is the successor to all of the rights and
obligations of Holdings under the Contract pursuant to that certain
Assignment, Assumption and Amendment No. 1 to the Contract dated as of June
26, 1996; and
WHEREAS, the Parties desire to amend subsections 6.3, 17.3, 27.7, and
Schedules 2 and 12 A/B of the Contract;
NOW, THEREFORE, in consideration of the mutual covenants and
conditions set forth herein, the Parties hereby agree as follows:
1. Delete the next to the last paragraph of subsection 6.3 "Payments'
and replace, in lieu thereof, a new next to the last paragraph of subsection 6.3
as set forth below:
"Notwithstanding the foregoing, (i) invoices for RF
Engineering for each PCS System will be payable in accordance with
subsection 6.4(b) below and (ii) invoices for Facilities Preparation
Services being provided to the Vendor by a Subcontractor within any PCS
System will be submitted to the Owner by the Vendor upon the
Subcontractor's full and satisfactory completion of that portion of the
Facilities Preparation Services for which that invoice is written. Each
such invoice will be payable by the Owner within forty-five (45) days
of the date of Vendor's invoice."
2. Delete subsection 17.3 (c) Services Warranty and replace, in
lieu thereof, a new subsection 17.3 (c) as set forth below:
"(c) The Vendor warrants that, for a period of not less than
three (3) years (except in the case of Civil Work specific to site
preparation limited to only, grading, dirtwork, land clearing, pad
construction, compound construction, erection of towers, installation
of fencing, landscaping, road work, site and building improvements,
including retaining walls, roof repair and reinforcements, and building
reinforcements, or such other items as the Parties shall mutually agree
to in writing) as to which the period shall be one (1 ) year) from the
date of completion of Facilities Preparation Services within any PCS
System but in no event later than the achievement of Milestone M8
pursuant to Exhibit A1 in such PCS System (provided that in the event
of a Microwave Delay Period in such PCS System pursuant to subsection
2.37, the commencement of the Facilities Preparation Services Warranty
Period will not be later than three (3) months from the date the Vendor
would have otherwise been able to commence Substantial Completion
testing in such PCS System in accordance with Exhibit B3 and Milestone
M8 as set forth on Exhibit A1 but for the existence of such Microwave
Delay Period) (the `Facilities Preparation Services Warranty Period'
and collectively with the Engineering Warranty Period and the RF
Services Warranty Period, the `Services Warranty Periods') Facilities
Preparation Services will be (i) operational in accordance with the
Specifications, (ii) in compliance with all material Applicable Laws
and material Applicable Permits in effect at the time of the completion
of such Facilities Preparation Services in such PCS System, and (iii)
free from Defects or Deficiencies in design, materials, workmanship or
otherwise. It is expressly understood by the Parties that `Civil Work
specific to site preparation,' for the sole purpose of determining
which Civil Work is subject to a one (1) year warranty and which Civil
Work is subject to a three (3) year warranty pursuant to the terms set
forth above, does not include building construction, tower materials,
fencing materials and/or Non-Essential Equipment (which will be subject
to warranties pursuant to Subsection 17.2) all of which may be part of
Civil Work but will not be deemed `Civil Work specific to site
preparation.'"
3. Delete subsection 27.7 "Governing Law" and replace, in lieu
thereof, a new subsection 27.7 as set forth below:
"GOVERNING LAW AND FORUMS. THIS CONTRACT IS GOVERNED BY THE
LAWS AND STATUTES OF THE STATE OF NEW YORK, EXCLUSIVE OF NEW YORK'S
CONFLICT OF LAWS RULES. THIS CONTRACT AND THE WORK WILL BE DEEMED TO BE
MADE, EXECUTED AND PERFORMED IN THE STATE OF NEW YORK. IF ONE PARTY
COMMENCES A LAWSUIT IN RELATION TO THIS CONTRACT AGAINST THE OTHER
PARTY, SUCH LAWSUIT CAN ONLY BE BROUGHT IN THE STATE OF MISSOURI OR THE
STATE OF DELAWARE. THE PARTIES HEREBY WAIVE A TRIAL BY JURY IN ANY SUCH
LAWSUIT. THE VENDOR AND THE OWNER EACH HEREBY IRREVOCABLY (A) AGREES
THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS CONTRACT WILL BE BROUGHT IN THE FEDERAL DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI, OR IN THE FEDERAL DISTRICT COURT
FOR THE DISTRICT OF DELAWARE, WHICH COURTS WILL HAVE EXCLUSIVE
JURISDICTION OVER ANY CONTROVERSY ARISING OUT OF THIS CONTRACT, (B)
CONSENTS TO THE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR
PROCEEDINGS AND (C) WAIVES ANY OBJECTION WHICH IT MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN SUCH COURTS
AND CLAIMS THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. SERVICE OF PROCESS IN ANY SUIT, ACTION OR
PROCEEDING MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS
TO THE OWNER OR THE VENDOR, AS THE CASE MAY BE, AT THE ADDRESSES
INDICATED IN SUBSECTION 27.6 HEREOF AND IN THE MANNER SET FORTH IN SUCH
SUBSECTION 27.6. NOTHING IN THIS SUBSECTION 27.7 WILL AFFECT THE RIGHT
OF THE OWNER OR THE VENDOR TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW."
4. Schedule 2 of the Contract is hereby amended by adding the following
as an additional line above the chart on the first page of such Schedule 2:
"The BSS discount applies to BSM spares."
5. Schedule 12 A/B of the Contract, is hereby deleted and replaced with
"Schedule 12 A/B (Revised)" as contained in Attachment A of this Amendment.
6. IN ALL OTHER RESPECTS, THE CONTRACT AS HERETOFORE AMENDED, SHALL RE-
MAIN IN FULL FORCE AND EFFECT WITH NO OTHER CHANGES WHATSOEVER.
7. This Amendment No. 2 shall be governed by New York law.
8. Capitalized term not otherwise defined herein have the meanings
set forth in the Contract.
9. This Amendment No. 2 may be executed by one or more of the Parties
to this Amendment No. 2 on any number of separate counterparts, and all of said
counterparts taken together will be deemed to constitute one and the same in-
strument.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 2 to be
executed by their duly authorized representatives as of the date first set forth
above.
SPRINT SPECTRUM EQUIPMENT
COMPANY, L.P.
By: /s/ Keith D. Paglusch
Name: Keith D. Paglusch
Title: Vice President - Network
Engineering and Operations
Date: 1-18-97
NORTHERN TELECOM INC.
By: /s/ Charles Drayton
Name: Charles Drayton
Title: Vice President - Marketing
and Sales
Date: January 29, 1997
<PAGE>
ATTACHMENT A
DMS_MTX SPARES LIST
[ ]
Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
EXECUTION COPY
--------------
PURCHASE AND SUPPLY AGREEMENT
-----------------------------
Between
SPRINT SPECTRUM L.P.,
Owner
and
QUALCOMM Personal Electronics,
Vendor
and
QUALCOMM Incorporated,
Guarantor
and
SONY ELECTRONICS INC.
Guarantor
Dated as of June 21, 1996
<PAGE>
PURCHASE AND SUPPLY AGREEMENT
-----------------------------
This Purchase and Supply Agreement (the "Agreement") dated as of
June 21, 1996 (the "Effective Date") by and between QUALCOMM Personal
Electronics, a California general partnership (the "Vendor"), Sprint Spectrum
L.P., a Delaware limited partnership (the "Owner"), QUALCOMM Incorporated, a
Delaware corporation ("QUALCOMM"), and SONY Electronics Inc., a Delaware
corporation ("Sony" and together with QUALCOMM, the "Guarantors," each a
"Guarantor").
RECITALS:
--------
WHEREAS, the Vendor has certain rights to use certain proprietary
Code Division Multiple Access ("CDMA") technology;
WHEREAS, the Federal Communications Commission ("FCC") has defined
six spectral bands near 1.9 Ghz for use in Personal Communications Services
("PCS") for auction to bidders;
WHEREAS, the FCC granted to the Owner or certain of its Affiliates
PCS licenses to build and operate PCS systems in specified geographic areas in
the United States;
WHEREAS, the Owner desires to purchase certain CDMA subscriber
equipment from the Vendor and the Vendor desires to sell such equipment to the
Owner in accordance with the terms and conditions of this Agreement;
WHEREAS, in consideration for the Owner entering into this
Agreement the Guarantors as the owners of the Vendor have agreed to guaranty
the obligations of the Vendor under this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth in this Agreement, the Owner and the Vendor hereby agree as
follows:
SECTION 1. HEADINGS AND DEFINITIONS
All headings used in this Agreement are inserted for convenience
only and are not intended to affect the meaning or interpretation of this
Agreement or any section or clause of this Agreement. References to "third
party" or "third parties" will not mean either Party. The meanings given to
terms defined in this Agreement are equally applicable to both the singular and
the plural forms of such terms. Terms used and/or defined in the Exhibits,
appendices or Schedules attached hereto that are not otherwise defined in this
Agreement, will have the meanings as set forth in those Exhibits, appendices or
Schedules for the purposes of those Exhibits, appendices or Schedules only.
For the purposes of this Agreement, the following definitions apply:
<PAGE>
"AAA" means the American Arbitration Association.
---
"Accessories" mean those accessories for the Subscriber Units
-----------
and made generally available to Customers and will include, without limitation,
a car kit, cigarette lighter adapter, desktop charger, travel charger, leather
case, hand strap and extra batteries (all in accordance with and pursuant to
the Specifications) and such other items as are specified in the Specifications
or agreed upon by the Parties from time to time. Individually, an
"Accessory".
---------
"Additional Affiliate" has the meaning ascribed thereto in
--------------------
subsection 12.2.
"Additional Affiliate Agreement" has the meaning ascribed
------------------------------
thereto in subsection 12.3.
"Additional Affiliate Arrangement" means a formal arrangement
--------------------------------
between the Owner and a Person to be designated an Additional Affiliate under
the terms of this Agreement, which arrangement will include, but not be limited
to, agreements on marketing, backhaul, common billing, resale agreements and/or
revenue sharing.
"Affected Products" has the meaning ascribed thereto in
-----------------
subsection 3.6(b).
"Affiliates" means the collective reference to the Initial
----------
Affiliates and the Additional Affiliates.
"Agents" means the Owner's agents with resale capability in the
------
Territory.
"Agreement" means this written contract together with all
---------
appendices, exhibits and schedules attached hereto, as this Agreement may be
amended, supplemented or otherwise modified from time to time in accordance
with the provisions of subsection 11.13 of this Agreement.
"Annual Minimum Commitment" has the meaning ascribed thereto in
-------------------------
subsection 3.2(b).
"Annual Supply Period" has the meaning ascribed thereto in
--------------------
subsection 3.2(b).
"Applicable Laws" means, as to any Person, the certificate of
---------------
incorporation and by-laws or other organizational or governing documents of
such Person, all laws (including, but not limited to, any Environmental Laws),
treaties, ordinances, judgments, orders and stipulations of any court or
governmental agency or authority and statutes, rules, regulations, orders and
interpretations thereof of any federal, state, provincial, county, municipal,
regional, environmental or other Governmental Entity, instrumentality, agency,
authority, court or other body (i) applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is subject
or (ii) having jurisdiction over all or any part of the Products or otherwise
in connection with the Vendor's obligations under this Agreement.
-2-
<PAGE>
"Beta Software" has the meaning ascribed thereto in subsection
-------------
3.2(a).
"Buffer Stock" has the meaning ascribed thereto in subsection
------------
5.1(b).
"Buffer Stock Commencement Date" has the meaning ascribed
------------------------------
thereto in subsection 5.2(d).
"Business Day" means any day of the year other than a Saturday
------------
or Sunday or a United States national public holiday.
"Catastrophic Defect" has the meaning ascribed thereto in
-------------------
subsection 3.10.
"Catastrophic Defect Cure Period" has the meaning ascribed
-------------------------------
thereto in subsection 3.10(a).
"Change Order" has the meaning ascribed thereto in subsection
------------
3.23.
"Commencement" has the meaning ascribed thereto in subsection
------------
4.2(d).
"Commencement Date" has the meaning ascribed thereto in
-----------------
subsection 3.2(a).
"Consumer Warranty" has the meaning ascribed thereto in
-----------------
subsection 3.8.
"Contract Vendors" means the counterparties to Procurement and
----------------
Services Contracts.
"Co-op Marketing Fund" has the meaning ascribed thereto in
--------------------
subsection 3.4(c).
"Customer" means any CDMA customer of the Vendor offering
--------
Products for sale within the Territory (including any CDMA customer outside of
the Territory who intends to use or resell Products within the Territory) or
any CDMA customer of any of the Vendor's affiliates or subsidiaries offering
Products for sale within the Territory.
"Custom Material" has the meaning ascribed thereto in
---------------
subsection 7.9.
"Defects and Deficiencies," "Defects or Deficiencies" or
--------------------------------------------------------
"Defective"" means when used with respect to any Products, such items that
- - - -----------
are not (i) new (unless otherwise as specifically set forth in this Agreement)
and of good quality and free from improper or inferior workmanship and defects
or (ii) otherwise in conformance with the Specifications; provided that
-------- ----
any Product defect or deficiency caused by the misuse, neglect or other
improper handling of a Product or Products by any Person other than the Vendor
as described in subsection 3.7(c) will not be deemed a Defect or Deficiency for
the purposes hereof.
-3-
<PAGE>
"Delay Grace Period" has the meaning ascribed thereto in
------------------
subsection 4.2.
"Delay Period" has the meaning ascribed thereto in subsection
------------
4.2(d).
"Delayed Products" has the meaning ascribed thereto in
----------------
subsection 4.2(d).
"End Date" has the meaning ascribed thereto in Section 2.
--------
"Environmental Laws" means any and all federal, state, local
------------------
or municipal laws, rules, orders, regulations, statutes, ordinances, codes,
requirements of any Governmental Entity, or requirements of law (including,
without limitation, common law) relating in any manner to contamination,
pollution, or protection of human health or the environment.
"Excess Purchase Order" has the meaning ascribed thereto in
---------------------
subsection 5.2.
"Exchange Act" has the meaning ascribed thereto in subsection
------------
11.18.
"FCC Rules and Regulations" has the meaning ascribed thereto in
-------------------------
subsection 3.20.
"Financing Interim Period" has the meaning ascribed thereto in
------------------------
subsection 10.10.
"First Annual Minimum Commitment" has the meaning ascribed
-------------------------------
thereto in subsection 3.2(b).
"First Sale Date" has the meaning ascribed-thereto in
---------------
subsection 3.10(a).
"First System" has the meaning ascribed thereto in subsection
------------
4.2(d).
"FOB point" means the dock or other distribution point of the
---------
Vendor's then applicable manufacturing facility or facilities or as otherwise
mutually agreed between the Parties from time to time.
"Force Majeure" has the meaning ascribed thereto in subsection
-------------
11.17.
"Forecast" has the meaning ascribed thereto in subsection 5.1.
--------
"Forecast Period" has the meaning ascribed thereto in
---------------
subsection 5.1.
"Governmental Entity" means any nation or government, any
-------------------
state, province or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government within the Territory.
-4-
<PAGE>
"Independent Auditor" means any of the Persons set forth on
-------------------
Schedule 1 or any Person otherwise mutually agreeable to the Parties other than
the then acting Independent Public Accountant.
"Independent Public Accountant" has the meaning ascribed
-----------------------------
thereto in subsection 3.3(b).
"Infrastructure Equipment" means any radio subsystem or any
------------------------
combination of radio subsystems that handle the Owner's PCS radio traffic in a
cell or cells within any given Owner PCS System and all other
telecommunications equipment which is necessary to the functioning of any such
radio subsystem(s) (i) with any other radio subsystem or (ii) otherwise within
the Nationwide Network or any part thereof.
"Initial Affiliates" means the collective reference to each of
------------------
the Persons set forth on Schedule 2.
"Initial Affiliate Agreement" has the meaning ascribed thereto
---------------------------
in subsection 12.1
"Initial Subscriber Units" has the meaning ascribed thereto in
------------------------
subsection 3.2(a).
"Initial Term" has the meaning ascribed thereto in Section 2.
------------
"Intellectual Property Rights" has the meaning ascribed thereto
----------------------------
in subsection 7.1.
"Late Amount" has the meaning ascribed thereto in subsection
-----------
3.4(a).
"Late Postponement" has the meaning ascribed thereto in
-----------------
subsection 5.2(c).
"Launch Units" has the meaning ascribed thereto in subsection
------------
4.2(a).
"Mark" has the meaning ascribed thereto in subsection 3.15.
----
"Material Accessories" means, with respect to each Subscriber
--------------------
Unit, the desktop charger (and the plug therefor), handstrap and the battery.
"MFC Certificate" has the meaning ascribed thereto in
---------------
subsection 3.3(b).
"Nationwide Network" means all of the PCS Systems built or to
------------------
be owned and/or operated by the Owner or its Affiliates in North America.
"NDAB" means the New Development Advisory Board established
----
pursuant to subsection 3.18.
-5-
<PAGE>
"New Products" has the meaning ascribed thereto in subsection
------------
3.11.
"Non-Conforming Products" has the meaning ascribed thereto in
-----------------------
subsection 3.22(b).
"North America" means the United States, Canada (including the
-------------
Province of Quebec) and Mexico.
"NTF Products" or "No Trouble Found Products" means Products
-------------------------------------------
returned to the Vendor pursuant to subsection 3.9(a) which the Vendor has, in
good faith and only after applicable testing, found not to be Defective.
"OEM Customer" means (i) QUALCOMM and Sony Corporation and
------------
their respective subsidiaries and affiliates, (ii) any foreign affiliate of the
Vendor which is selling Products outside of the Territory for use and/or resale
outside of the Territory and (iii) a manufacturer of telecommunications
equipment and a purchaser of products from the Vendor that is not a provider of
cellular and/or PCS services (other than such a manufacturer and purchaser that
holds only a minority non-controlling interest in any such provider) in the
Territory or elsewhere, and that either (i) purchases private-labelled products
(i.e., labelled with the OEM Customer's brand name or trademark) from the
----
Vendor for the primary purpose of reselling such products on a wholesale basis
into channels of distribution, or (ii) is purchasing products from the Vendor
primarily for the purpose of supplying and/or reselling such products to its
customers that purchase telecommunications equipment for resale and use outside
the Territory.
"Operating Subsidiary" means an entity (i) at least fifty-one
--------------------
percent (51%) owned or controlled by an other entity, (ii) operating in the
telecommunications industry and (iii) having assets of at least twenty five
million dollars ($25,000,000).
"Originally Scheduled Supply Period" has the meaning ascribed
----------------------------------
thereto in subsection 3.2(c).
"Owner Defined Feature" means (a) the features listed on
---------------------
Schedule 5 and (b) any feature, enhancement, modification or upgrade to or to
be added to any Product (i) which is not currently listed on or described in
Exhibit A1 or Exhibit A2, (ii) which is, after the Effective Date, specifically
requested in writing by the Owner to the Vendor to be added to any Product
pursuant to and in accordance with the terms of this Agreement, (iii) which is
not otherwise made generally available to the Vendor's Customers and (iv) which
is developed by the Vendor for the Owner based solely upon the initiation of
the Owner.
"Owner Event of Default" has the meaning ascribed thereto in
----------------------
subsection 10.8.
-6-
<PAGE>
"Owner's Succeeding Entity" has the meaning ascribed thereto in
-------------------------
subsection 11.19.
"Parties" means, collectively, the Owner and the Vendor, and
-------
"Party" will individually mean the Owner or the Vendor.
-----
"Partners" means the collective reference to Sprint
--------
Corporation, a Delaware corporation ("Sprint"), Sprint Enterprises, L.P., a
Delaware limited partnership, Tele-Communications Inc., a Delaware corporation,
TCI Network Services, a Delaware general partnership ("TCI"), Comcast
Corporation, a Delaware corporation, Comcast Telephony Services, a Delaware
general partnership ("Comcast"), Cox Communications, Inc., a Delaware
corporation, and Cox Telephony Partnership, a Delaware general partnership
("Cox").
"PCS" has the meaning ascribed thereto in the second Recital.
---
"PCS System" means all products and other equipment, tools and
----------
software, all system element sites and any property located there necessary or
desirable to provide PCS in a given specified System Area.
"Person" means an individual, partnership, limited partnership,
------
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity of whatever
nature.
"Previously Existing Products" has the meaning ascribed thereto
----------------------------
in subsection 3.12.
"Procurement and Services Contract" means a procurement and
---------------------------------
services contract entered into, or to be entered into, between the Owner and
the counterparty or counterparties thereto in connection with the engineering
and construction of PCS Systems or any part thereof, as the same may be
amended, supplemented or otherwise modified from time to time.
"Product Class" has the meaning ascribed thereto in subsection
-------------
3.10(a).
"Product Depreciation" means the depreciation in the value of
--------------------
the relevant Product (based on the prices set forth in Appendix 1) over a
straight line five (5) year term from the date of shipment of such Product.
"Product Enhancements" means modifications or improvements made
--------------------
to the Products which improve performance of such Products.
"Products" means all of the Subscriber Units and the
--------
Accessories provided by the Vendor pursuant to and in accordance with this
Agreement.
-7-
<PAGE>
"Proprietary Information" has the meaning ascribed thereto in
-----------------------
subsection 8.2.
"Proprietary Marks" has the meaning ascribed thereto in
-----------------
subsection 3.17(b).
"Purchase Order" means a written order by the Owner to purchase
--------------
Products pursuant to and in accordance with the terms of this Agreement, each
of which will be deemed to incorporate all terms, conditions and provisions of
this Agreement unless the Parties expressly agree otherwise.
"Purchaser" means a Person who purchases Products from the
---------
Owner or an Agent as an initial end user of the Product or Products
(provided that an Agent that uses the Product will in no event be a
----
Purchaser).
"RF Interference Condition" has the meaning ascribed thereto in
-------------------------
subsection 3.20.
"Purchasing Credits" has the meaning ascribed thereto in
------------------
subsection 3.6(c).
"RFP" has the meaning ascribed thereto in subsection 7.9.
---
"Second Annual Minimum Commitment" has the meaning ascribed
--------------------------------
thereto in subsection 3.2(b).
"Shipped-to Location" has the meaning ascribed thereto in
-------------------
subsection 5.2.
"Shortfall" has the meaning ascribed thereto in subsection
---------
3.2(c).
"Software" has the meaning ascribed thereto in subsection
--------
7.5(a).
"Software Enhancements" means modifications or improvements
---------------------
made to the Software relating to PCS Products which improve performance of the
Software or which provide additional functions to the Software.
"Sony Branded Product" means any Product which bears a
--------------------
trademark, insignia, logo or other proprietary mark listed on Schedule 6 if
such trademark, insignia, logo or other mark consists of or incorporates the
term "Sony" and/or any variations thereof.
"Sony Corporation" means Sony Corporation, a Japanese
----------------
corporation, the parent company of Sony.
"Specifications" means the specifications and performance
--------------
standards of the Products contemplated by this Agreement and includes any
amendments, modifications
-8-
<PAGE>
and/or other revisions thereto made in accordance with the terms of this
Agreement and as more fully set forth in the Exhibits.
"Stub Period" has the meaning ascribed thereto in subsection
-----------
3.2(b).
"Subscriber Unit" means (i) the Vendor's QCP-1900 hand held
---------------
portable phone that provides CDMA service in the PCS band, (ii) the Vendor's
CM-D600 hand held portable phone that provides CDMA service in the PCS band,
and (iii) subsequent portable phone models added pursuant to this Agreement,
all in accordance with and pursuant to the Specifications.
"Succeeding Delay Grace Period" has the meaning ascribed
-----------------------------
thereto in subsection 4.2(b).
"System Area" means a major trading area to which the Owner has
-----------
FCC Licenses to operate PCS services.
"System Managers" means each of the managers designated by the
---------------
Owner and the Vendor, respectively, for the purposes of subsection 11.8.
"Term" has the meaning ascribed thereto in Section 2.
----
"Territory" means (i) with respect to the Vendor's QCP-1900
---------
Subscriber Unit, CM-D600 Subscriber Unit and Accessories therefor, the United
States and Canada (including the province of Quebec) and (ii) with respect to
subsequent hand held portable models and Accessories therefor added pursuant to
this Agreement, such geographical areas as will be mutually agreed to by the
Parties (but in any event not less than the United States); provided
--------
that for Sony Branded Products only, Territory shall not include Canada.
- - - ----
"Third Annual Minimum Commitment" has the meaning ascribed
-------------------------------
thereto in subsection 3.2(b).
"Total Minimum Commitment" has the meaning ascribed thereto in
------------------------
subsection 3.2(b).
"Training" has the meaning ascribed thereto in subsection 6.1.
--------
"United States" means the fifty states of the United States,
-------------
the District of Columbia and all United States territories and possessions;
provided that for Sony Branded Products only, the term "United States"
----
shall mean only the continental United States, Alaska and the District of
Columbia.
"UPC" means the Universal Product Code.
---
-9-
<PAGE>
"Vendor Event of Default" has the meaning ascribed thereto in
-----------------------
subsection 10.2.
"Vendor Indemnities" has the meaning ascribed thereto in
------------------
subsection 9.3(a).
"Vendor Liabilities" has the meaning ascribed thereto in
------------------
subsection 9.3(a).
"Vendor's affiliate","affiliate of the Vendor" or "Vendor's
------------------------------------------------------------
affiliates" or the like means any Person which directly or indirectly
- - - -----------
controls, or is controlled by, or is under common control with, the Vendor,
Sony Corporation or any of Sony Corporation's affiliates and subsidiaries. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person.
"Vendor's Succeeding Entity" has the meaning ascribed thereto
--------------------------
in subsection 11.18.
"Warranty Period" means (x) as to each Subscriber Unit the
---------------
period expiring (i) with respect to the Owner, twenty four (24) months after
the respective date of delivery of such Subscriber Unit to the FOB point, and
(ii) with respect to a Purchaser, either twenty four (24) months or twelve (12)
months (at the election of the Owner in accordance with subsection 3.8) after
the respective date of first sale of such Subscriber Unit to such Purchaser and
(y) as to each Accessory, the period expiring (i) with respect to the Owner,
twelve (12) months after the respective date of delivery of such Accessory to
the FOB point and (ii) with respect to a Purchaser, twelve (12) months after
the respective date of first sale of such Accessory to such Purchaser.
SECTION 2. TERM
This Agreement will commence on the date first set forth above and will
continue for a period of three (3) years (the "Initial Term") following the
initial purchase of production Subscriber Units by the Owner (the "End Date").
The Initial Term of this Agreement may be extended beyond the End Date for
successive periods by mutual agreement of the Parties hereto (all such periods
plus the Initial Term, the "Term"). The terms, conditions and provisions of
this Agreement will apply to all Purchase Orders issued by the Owner for any
Products during the Term, unless otherwise agreed by the Parties.
SECTION 3. PRODUCT PURCHASES
3.1 Right to Purchase, Resell and Use. (a) During the Term of this
---------------------------------
Agreement, the Owner will purchase Subscriber Units and Accessories on a
non-exclusive basis from the Vendor pursuant to and in accordance with the
terms and conditions of this Agreement. The Vendor understands and agrees that
the Owner will purchase Products from the Vendor pursuant to this Agreement for
the purpose of reselling such Products
-10-
<PAGE>
to the Owner's Agents and/or Purchasers in accordance with the applicable terms
of this Agreement. The Vendor further understands, acknowledges, and agrees
that the Products sold hereunder will be used in accordance with their intended
purpose on and within the Owner's Nationwide Network. The Owner will use its
reasonable efforts to ensure that it will not modify the form, fit, function,
specifications, performance or design of the Products (or components or
subcomponents thereof) without the express authorization of the Vendor, which
authorization, if any, will be provided by the Vendor pursuant to and in
accordance with the terms of this Agreement.
(b) The Vendor hereby grants to the Owner a nonexclusive right to resell
the Products within the Territory by means of (i) the Owner's own direct sales
utilizing its outbound sales force and/or through retail outlets owned or
operated by the Owner, and (ii) resales to Agents, all upon the terms and
conditions set forth herein. Subject to Applicable Law, the Owner agrees that,
in each contract between the Owner and an Agent, the Owner will use its
reasonable commercial efforts to require the Agent to which it supplies,
directly or indirectly, Products to resell such Products only to bona fide end
users, Purchasers or other Agents and only within the Territory. For the
purposes hereof a "bona fide end user" means any Person who is purchasing
Products without the intent to resell such Products.
3.2 Availability of Subscriber Units and Accessories; Minimum
----------------------------------------------------------
Commitment. (a) Subscriber Units and the Accessories therefor may be ordered
- - - ----------
by the Owner for delivery at any time during the Term on or after (i) for
Subscriber Units (with accompanying Material Accessories), July 1, 1996 (the
"Commencement Date"), and for other additional Accessories, the respective
dates set forth on APPENDIX 1, in accordance with the lead times and
----------
forecasts set forth in Sections 4 and 5 below; provided that the
----
Accessories specifically listed in APPENDIX 1 hereto shall be available
----------
no later than the dates set forth for such accessories in APPENDIX 1.
----------
Notwithstanding the above, the Owner acknowledges and agrees that, unless the
Vendor otherwise notifies the Owner in writing to the contrary, the Software
contained in any Subscriber Unit manufactured by the Vendor prior to September
24, 1996 may contain "bugs" that may adversely impact the functionality,
performance and/or compliance of the Subscriber Unit with the Specifications
(such Software being hereinafter referred to as the "Beta Software"). With
respect to Subscriber Units forecasted pursuant to subsection 5.1(a) for
delivery on or before October 1, 1996 (the "Initial Subscriber Units"), the
Vendor will build and hold the Initial Subscriber Units in the Vendor's
inventory and will deliver such Initial Subscriber Units in accordance with the
provisions of this subsection 3.2(a). Commencing on September 24, 1996 (and
assuming that the Owner will have placed Purchase Orders for such Products with
the Vendor in accordance with the lead times set forth in this Agreement), the
Vendor will deliver to the FOB point on a daily basis (or such other longer
time intervals ending before October 8, 1996 as the Vendor may request in
writing) those Initial Subscriber Units in which the Vendor has upgraded to the
Specifications the Beta Software. On October 8, 1996, the Vendor will deliver
to the FOB point any then remaining Initial Subscriber Units still in the
Vendor's inventory as of such date (and the Owner will have placed Purchase
Orders for such Products with the Vendor in accordance with the lead times set
forth in this Agreement). Prior to
-11-
<PAGE>
their respective delivery to the FOB point pursuant to the prior two sentences,
the Vendor will upgrade to the Specifications the Beta Software in the subject
Initial Subscriber Units. For each of the Initial Subscriber Units so held in
the Vendor's inventory and upgraded, the Owner will pay to the Vendor a fee of
[ ] Initial Subscriber Unit to be upgraded to the Specifications, such
fee due and payable on the date the invoice for such Products is due and
payable. The Owner may request in writing that up to [ ] of the Initial
Subscriber Units be delivered (with their accompanying Material Accessories)
prior to the dates specified above. Upon such written request, the Vendor will
use its reasonable commercial efforts to comply with the dates and quantities
specified by the Owner in such request forsuch Initial Subscriber Units to be
delivered prior to September 24, 1996; provided that between September 24, 1996
-------- ----
and October 8, 1996, the Owner may request the delivery of any remaining Initial
Subscriber Units (subject to the [ ] limitation set forth above) that have not
been upgraded and were not earlier delivered prior to September 24, 1996. During
the period from September 24, 1996 to October 8, 1996 the Owner may request and
the Vendor will deliver as many upgraded Specification compliant Subscriber
Units as it has so upgraded and otherwise made available pursuant to and in
accordance with the forecasting and ordering requirements set forth in this
Agreement. With respect to any such Initial Subscriber Unit delivered prior to
the dates specified above, (i) acceptance of such Initial Subscriber Units with
the Beta Software will be deemed to have occurred upon delivery, (ii) the Vendor
makes no warranty with respect to the Beta Software (such Beta Software being
delivered on an "AS IS" basis), nor does the Vendor make any warranty with
respect to compliance of such Initial Subscriber Units with the Specifications
as a result of the fact that such Initial Subscriber Units contain Beta
Software; provided that any such Initial Subscriber Unit will be fully
-------- ----
compliant with all other applicable Specifications and the Vendor's warranties
pursuant to subsections 3.7 and 3.8 shall remain in full force and effect except
with respect to the effects of such Beta Software, and (iii) the Vendor shall
have no obligation to upgrade the Beta Software in such delivered Initial
Subscriber Units, but the Vendor agrees to cooperate, to the extent set forth in
the next sentence, with the Owner to assist the Owner to upgrade such Beta
Software in the field. In the event that there are Initial Subscriber Units
containing Beta Software delivered by the Vendor, the Vendor will supply to the
Owner, at no charge to the Owner, the computer disks containing the software
upgrades and reasonable amounts of training and assistance to permit the Owner
to implement a field upgrade of such Beta Software. The provisions of subsection
5.2(c) and subsection 5.2(d) will not apply to Initial Subscriber Units unless
and only to the extent that the Owner postpones delivery of any Initial
Subscriber Units to a date after October 8, 1996 (in which event, for purposes
of applying the provisions of subsection 5.2(c) and subsection 5.2(d), the
initial shipment date for such Initial Subscriber Units will be deemed to be
October 8, 1996). For the purposes hereof, a "bug" or "bugs" means a Software
imperfection, but in any event such Initial Subscriber Units with Beta Software
will be able to at least perform the following basic functions: which are
"power-up," "power-down," placing calls, receiving calls, perform self-check on
power-up, store phone numbers, recall phone numbers and speed dial phone
numbers.
-12-
<PAGE>
(b) Pursuant to and in accordance with the terms of this Agreement,
during the Initial Term of this Agreement the Owner will purchase from the
Vendor not less than [ ] Subscriber Units (the "Total Minimum Commitment").
During the first six (6) months from the Commencement Date (such first six month
period and each succeeding twelve (12) month period during the Term an "Annual
Supply Period") the Owner will only be required to purchase from the Vendor
[ ] Subscriber Units (the "First Annual Minimum Commitment"). During the
second Annual Supply Period the Owner will only be required to purchase from the
Vendor [ ] Subscriber Units (the "Second Annual Minimum Commitment"). During
the third Annual Supply Period the Owner will only be required to purchase from
the Vendor [ ] Subscriber Units (the "Third Annual Minimum Commitment"; each
of the First Annual Minimum Commitment, Second Annual Minimum Commitment, and
Third Annual Minimum Commitment, an "Annual Minimum Commitment").
Notwithstanding anything stated in this subsection 3.2(b) to the contrary, in
any given Annual Supply Period the Owner will only have to purchase [ ] of the
respective amounts set forth in the second, third and fourth sentences of this
subsection 3.2(b), provided that at any time prior to the termination of the
-------- ----
Initial Term (unless earlier terminated in accordance with Section 10) the Owner
will have fulfilled its Total Minimum Commitment pursuant to and in accordance
with the terms of this Agreement. Pursuant to and in accordance with the
immediately preceding sentence, any amounts (up to [ ]) not purchased, or
otherwise subject to firm Purchase Orders in accordance with this Agreement, by
the Owner in any given Annual Supply Period will increase the Annual Minimum
Commitment in the next succeeding Annual Supply Period (without any penalty or
Shortfall payment by the Owner to the Vendor); provided that for the third
-------- ----
Annual Supply Period any such amounts [ ] will be carried over and into the
remaining period within the Initial Term (the "Stub Period") and must be
purchased by the Owner in accordance with the terms of this Agreement during the
Stub Period. Prior to the end of the first Annual Supply Period, the second
Annual Supply Period and the third Annual Supply Period, the Owner will give the
Vendor prior written notice of any election by the Owner to exercise the Owner's
rights under the preceding sentence to purchase less than [ ] of the amount of
the First Annual Minimum Commitment, the Second Annual Minimum Commitment and
the Third Annual Minimum Commitment, as applicable, in the respective first
Annual Supply Period, second Annual Supply Period and the third Annual Supply
Period, as the case may be.
(c) In the event that the Owner elects, in its sole discretion, not to
place Purchase Orders for delivery of Subscriber Units in accordance with the
terms of this Agreement in the amounts as set forth in subsection 3.2(b) above
(the difference between each of the Annual Minimum Commitments and the amount
actually ordered for delivery during each of the relevant Annual Supply Periods
set forth in subsection 3.2(b) or otherwise during the Stub Period by the Owner
herein referred to as the "Shortfall"), then the amount of the relevant Annual
Minimum Commitment for such period (or the residual amount to be purchased in
the Stub Period, as applicable) will be reduced (by an amount equal to the
amount of the Shortfall for such Annual Supply
-13-
<PAGE>
Period or the Stub Period, as the case may be) by paying to the Vendor the
following amounts per Subscriber Unit which are in any such Shortfall, as full
compensation to the Vendor for such a reduction in the applicable Annual
Minimum Commitments:
Charge per Subscriber
Amount of Shortfall Unit in the Shortfall
- - - ------------------- ---------------------
Shortfall greater than or equal to [ ] [ ] per Subscriber Unit in
of the applicable Annual Minimum Shortfall
Commitment
Shortfall greater than or equal to [ ] [ ] per Subscriber Unit in
and less than [ ] of the applicable Shortfall
Annual Minimum Commitment
Shortfall greater than or equal to [ ] [ ] per Subscriber Unit in
and less than [ ] of the applicable Shortfall
Annual Minimum Commitment
Shortfall less than [ ] of the applicable [ ] per Subscriber
Annual Minimum Commitment Unit in Shortfall
To the extent there is a Shortfall in any Annual Supply Period or the
Stub Period, as the case may be, the Vendor may invoice the Owner for any
amounts owed by the Owner to the Vendor pursuant to this subsection 3.2(c) no
earlier than 5:00 p.m. on the last Business Day of such period and no later
than ninety (90) days from the last Business Day of such period and the Owner
will have sixty (60) days to pay any such invoice to the extent the amount of
any such invoice is not in good faith dispute between the Parties pursuant to
subsection 11.8. To the extent the Owner is required to pay the Vendor amounts
as set forth in this subsection 3.2(c) for any Shortfall during any Annual
Supply Period, or during the Stub Period, as the case may be, any such amounts
once paid by the Owner will be full compensation to the Vendor for such
reduction in the Annual Minimum Commitments and the Owner will have no further
liability or obligation of any kind to the Vendor for any such reductions in
the Annual Minimum Commitments and any such payment will be the Vendor's sole
remedy (at law or in equity) for any such reductions in the Annual Minimum
Commitments. Nothing set forth in subsections 3.2(b) or 3.2(c) will be
construed or interpreted as relieving the Owner of purchasing those amounts of
Products projected by the Owner in the first five (5) months of a Forecast
which are subject to a firm Purchase Order in accordance with subsection 5.1.
For the purpose of subsections 3.2(b) and 3.2(c), any Purchase Order or Excess
Purchase Order postponed by the Owner pursuant to subsection 5.2(c) which, as a
result of such postponement, would cause the Products subject to such Purchase
Order or Excess Purchase Order not to be purchased in the Annual Supply Period
(the "Originally Scheduled Supply Period") in which such Products otherwise
were to be purchased (but for such postponement), will not be considered to be
Purchase Orders for Products ordered for delivery in the Originally Scheduled
Supply Period and such Products may be considered as part of any such Shortfall
during the Originally Scheduled Supply Period.
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<PAGE>
3.3 Most Favored Customer Status. (a) With respect to all Products
----------------------------
(including any New Products ordered by the Owner pursuant to the terms of this
Agreement), the Owner will be deemed the most important and favored Customer of
the Vendor and will always throughout the [ ]. Notwithstanding the
above, the Vendor will not be obligated to provide such priority to Owner if
providing such priority either (i) would cause the Vendor, QUALCOMM or Sony
(including their respective affiliates) to breach any of their then-existing
contracts and/or any Applicable Law, or (ii) if the Owner elects to exercise
any of its remedies, as specified in subsection 4.2. At any time during the
Term, the Owner will receive Products (including any New Products ordered by
the Owner pursuant to the terms of this Agreement) at prices (prior to taking
into account price increases due to customization specific to the Owner;
[ ]. For the purposes of subsection 3.3 only, "Customer" will not include any
(i) OEM Customer or (ii) any other Customer who is only receiving Products from
the Vendor (or its affiliates) as a piece of a larger telecommunications,
engineering and/or design contract (other than with respect to Products sold
under a contract(s) with a third party to the extent that (x) the price
differential between the Product(s) sold under such third party contract (taking
into account corresponding time periods) multiplied by the number of units of
---------- --
Product(s) to be sold under such third party contract (at a lower price), is (y)
greater than [ ] of the total contract value of such third party contract), the
primary purpose of which is not the sale or supply of Subscriber Units.
(b) On an annual basis throughout the Term of this Agreement commencing
on the Effective Date, each of the Vendor, Sony and QUALCOMM will be required
to audit their pricing of all similar products provided to all of their
customers selling or using or intending to sell or use the Products in the
Territory in the preceding calendar year and certify to the Owner in a
certificate (or in separate certificates) executed by a duly authorized officer
of each such entity (the "MFC Certificate") that the Owner has in fact received
the prices and availability of Products in accordance with the terms of
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<PAGE>
clause (a) of this subsection 3.3. The annual MFC Certificate delivered to the
Owner in accordance with this subsection 3.3(b) will be subject to
verification, at the election of the Owner, by any public accounting firm
reasonably acceptable to the Owner and listed on Schedule 1 (the "Independent
Public Accountant") and at the sole cost and expense of the Party whose
position is not supported by the report of the Independent Public Accountant
or, if contested, the report of the Independent Auditor. The Independent
Public Accountant will in no event disclose to the Owner or any other third
party the details of any contract or amendment between the Vendor and any
Customer (or between QUALCOMM and any of QUALCOMM's customers or between Sony
and any of Sony's customers or between any affiliate and such affiliate's
customers) other than details as necessary to summarize terms including, but
not limited to, pricing relevant to determinations under subsections 3.3(a) and
(b).
(c) To the extent that it is determined pursuant to subsection 3.3(b)
that the provisions of subsection 3.3(a) have not been complied with, the Owner
will have thirty (30) Business Days from receipt of the MFC Certificate (as
verified by the Independent Public Accountant, if the MFC Certificate(s) was so
subject to verification) to provide the Vendor with a written claim for Product
pricing rebates (as measured from the date any Product is delivered at any such
lower prices in violation of this subsection 3.3) on future purchases under
this Agreement based upon (i) the Independent Public Accountant's calculation
of the price differentials between the Vendor's prices for Products (including
any New Products) under this Agreement and any lower prices charged by the
Vendor, Sony or QUALCOMM, as the case may be, to any other Customer (including
customers of either QUALCOMM or Sony (including their respective affiliates)
who intend to use or resell, or who actually use or resell, such Products
within the Territory) in violation of clause (a) of this subsection 3.3. To
the extent that the Vendor, Sony or QUALCOMM, as the case may be, disagrees
with any such claim for such pricing rebates made by the Owner pursuant to this
subsection 3.3(c), the Vendor will have the right within ten (10) Business Days
of receiving the Owner's written rebate claim to submit such claim (including,
but not limited to, the Independent Public Accountant's report on which it as
based) and the Vendor's written response thereto to an Independent Auditor
(other than the Independent Public Accountant) who will have the authority to
determine whether, based on the information provided by the Owner and the
Vendor, the provisions of subsection 3.3(a) have been complied with. As part
of any such submission to the Independent Auditor, either Party may dispute the
validity or accuracy of the Independent Public Accountant's report. If the
Independent Auditor finds that the Owner's pricing rebate claim is incorrect
but that the provisions of subsection 3.3(a) have been violated, then the
Independent Auditor will have the right to adjust any such claim as appropriate
under such circumstances. The Independent Auditor's determination must be made
and delivered to both the Vendor and the Owner within ten (10) Business Days of
receiving the request from the Vendor. Such determination once made by the
Independent Auditor will be final and binding on the Parties and will not be
subject to further modification. The costs and expenses of the Independent
Auditor will be borne by the Party whose position is not supported by the
Independent Auditor or otherwise equitably under the circumstances.
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<PAGE>
3.4 Payment Terms, Taxes and Co-op Marketing Fund. (a) Pursuant to
---------------------------------------------
and in accordance with the terms of this Agreement, the Vendor will invoice the
Owner for Products purchased upon delivery of such Products to the FOB point,
and the Owner will pay all such invoices within [ ] days after the
invoice date unless the Owner disputes (in accordance with subsection 11.8) in
good faith either the Vendor's entitlement to, or the amount of, any such
invoiced amount. The Owner agrees to pay to the Vendor a late charge for
amounts actually due and not paid when due in accordance with the terms of this
Agreement (a "Late Amount") equal to the lesser of [ ] per month,
pro-rata, of the Late Amount, or the maximum amount permitted by Applicable
Law; provided that any such late payment penalties will not accrue
----
until amounts owed by the Owner to the Vendor are actually late and outstanding
and will stop accruing immediately upon the Owner's payment of such Late Amount
plus any such accrued late payment penalties. All amounts stated herein and/or
otherwise required to be paid under or pursuant to this Agreement are stated
in, and will be paid in, U.S. Dollars. In the event that, at any given time,
there are undisputed amounts, in aggregate, of [ ] or more, which the Owner
has failed to pay when due in accordance with the terms of this Agreement, then
the Vendor, upon five Business Days prior written notice to the Owner, shall be
entitled to, without any penalty or payment obligations, suspend shipping
Products.
(b) The amounts to be paid by the Owner under this Agreement do not
include any state, provincial or local sales and use taxes, however designated,
which may be levied or assessed on the Products to be sold hereunder. With
respect to such taxes, the Owner will either furnish the Vendor with an
appropriate exemption certificate applicable thereto or pay to the Vendor, upon
presentation of invoices therefor, such amounts thereof as the Vendor may by
law be required to collect or pay; provided, however, that the Vendor
-------- -------
will use its reasonable efforts to minimize the amount of any such taxes. The
Owner has no obligation to the Vendor with respect to other taxes, including,
but not limited to, those relating to franchise, net or gross income or
revenue, license, occupation, other real or personal property, and fees
relating to importation or exportation of the Products to the FOB point.
(c) Throughout the Term the Vendor will contribute cash amounts equal
to [ ] of the invoiced FOB point price of any Subscriber Units (and their
included accompanying Material Accessories) so invoiced by the Vendor to the
Owner for such Products purchased and paid for by the Owner pursuant to the
terms of this Agreement to a separate fund owned by the Owner and designated in
writing to the Vendor from time to time by the Owner (the "Co-op Marketing
Fund"). Any and all amounts in the Co-op Marketing Fund may be used by the Owner
in its sole and absolute discretion for any purpose in connection with the
marketing and/or advancement of the Nationwide Network or any part thereof,
subject only to the terms of subsection 3.17(b) and Section 8. In accordance
with the terms of this subsection 3.4(c), the Vendor must make any such
contribution to the Co-op Marketing Fund within ten (10) Business Days of
receipt by the Vendor of full payment by the Owner of amounts due under any such
invoice for Subscriber Units (and their included Material Accessories). The
amount of any such contribution to be made by the Vendor pursuant
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<PAGE>
to this subsection 3.4(c) will be calculated based upon [ ] of the invoiced
FOB point price for Subscriber Units (and their included Material Accessories)
invoiced by the Vendor to the Owner. The failure of the Vendor to make the
contributions in cash to the Owner's Co-op Marketing Fund in accordance with and
subject to the terms of this subsection 3.4(c) will entitle the Owner to
withhold any such amounts from any future Vendor invoices (until such time as
the Vendor does make any such required contributions).
3.5 Delivery. (a) All deliveries of Products will be made to the
--------
FOB point. The Owner will specify the desired method of shipping. Unless
otherwise agreed in writing, the Owner will pay for all shipping, freight,
insurance and other similar charges incurred in connection with such
deliveries. In the absence of written shipping instructions from the Owner,
the Vendor will select the carrier and insurance company at the Owner's
expense, taking into account the charges levied by the carriers and insurance
companies under consideration, and will ship Products utilizing ground
transportation; provided that, in the absence of prior shipping
-------- ----
instructions, the Vendor will use reasonable efforts to contact the Owner to
request such shipping instructions prior to making any such selections.
(b) The Owner will inspect and either accept or reject all Products in
whole or in part within ten (10) Business Days after the date of receipt at the
delivery location applicable to such Products pursuant to the terms of this
Agreement. If the Owner fails to reject any Product delivered within such
period, the Owner shall be deemed to have accepted such Product; provided,
--------
however, that any such acceptance will in no event limit, modify, waive or
- - - -------
otherwise restrict the Owner's rights under the terms, including without
limitation the warranty provisions, of this Agreement.
(c) The Owner may request that the Vendor provide more extensive
logistical and distribution capabilities to the Owner, which capabilities the
Vendor will use its reasonable commercial efforts to provide. If the Vendor
agrees to provide such services, there may be, depending on the level and scope
of such services, additional charges to the Owner on a per Product basis. Any
such charges will be mutually agreed upon by the Parties during negotiations
between the Parties on the provision of any such additional logistical and
distribution services beyond those outlined in this subsection 3.5;
provided that, in determining any such charges, the Owner will be
- - - -------- ----
deemed the Vendor's most important and favored Customer and will receive such
services at prices, on payment terms and subject to all other contract terms on
terms no less favorable to the Owner than those offered or available to any
other Customer subject to and in accordance with the terms of subsection 3.3.
3.6 Pricing. (a) The Owner will purchase Products from the Vendor
-------
in accordance with the Product pricing set forth on Appendix 1. The price for
Products will be the price in effect on the date of the applicable Purchase
Order. Notwithstanding anything to the contrary contained in subsection 3.2(b)
or subsection 5.2(c), to the extent the Owner orders or is required to order
Subscriber Units during 1996, the Owner will be required to pay the 1996 price
(as set forth in Appendix 1) for
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<PAGE>
such Subscriber Units, even if and notwithstanding the fact that the Owner will
have moved, or delayed the delivery (pursuant to subsection 3.2(b) or
subsection 5.2(c)) of any such first Annual Supply Period Subscriber Units into
a succeeding Annual Supply Period or the Stub Period, as the case may be;
provided, however, that nothing contained in this sentence will in any
- - - -------- -------
way limit or modify the Owner's right to reduce its First Annual Minimum
Commitment pursuant to the shortfall mechanisms in subsection 3.2(c);
provided further, however, in the event the Owner so reduces its
- - - -------- ------- -------
First Annual Minimum Commitment but does purchase Subscriber Units subsequent
to December 31, 1996, then the Owner will be required to pay, for each
Subscriber Unit until such time as the Owner has purchased, in aggregate, [ ]
Subscriber Units, an amount equal to (i) the 1996 price (as set forth in
Appendix 1) for such Subscriber Units, less (ii) the amount paid by the Owner to
the Vendor (calculated on a per Subscriber Unit basis) pursuant to subsection
3.2(c) as a result of there being a Shortfall in the First Annual Supply Period.
Pursuant to the terms of this Agreement the Vendor may, upon not less than sixty
(60) days prior written notice to the Owner, increase its pricing for any of its
Products covered by the terms of this Agreement as set forth in Appendix 1 only
once in any given Annual Supply Period, in accordance with the most favored
customer provisions set forth herein; provided that any such price increase will
-------- ----
in no event be in excess of [ ] above the previously established price as set
forth in Appendix 1 for any such Product; and provided further, that nothing in
-------- -------
this subsection 3.6 will limit or otherwise pertain to a price increase
implemented pursuant to a Change Order pursuant to and in accordance with
subsection 3.23. In the event of any such price increase the Owner will have the
right, but not the obligation, by written notice to the Vendor, to reduce the
then remaining unpurchased portion of the applicable Annual Minimum Commitment
by the same percentage [ ] as such price increase in such Annual Supply
Period. For example, if the Vendor pursuant to the terms of this subsection
3.6(a) chose to increase its prices during the First Annual Supply Period by
[ ], then the Owner would have the corresponding right to decrease the then
remaining unpurchased portion of the First Annual Minimum Commitment by [ ].
Initial pricing for new Products not otherwise covered by Appendix 1 or the
terms of this Agreement will be established by mutual good faith agreement
between the Parties, such agreement to be reached no less than ninety (90) days
prior to the commercial availability of any such new Products to any Customer.
All such pricing for such new Products will be determined in accordance with the
terms of this Agreement, including, but not limited to, the most favored
customer provisions set forth herein.
(b) In the event that the Vendor reduces the price (other than the
automatic annual price reductions set forth in Appendix 1 or any price reduction
due to a violation of subsection 3.3) of any Product, the Vendor will credit the
Owner's accounts payable with an amount equal to the difference between the
reduced price (less the applicable [ ] Co-op Marketing Fund contribution
referenced in subsection 3.4(c)) and the price (less the applicable [ ] Co-op
Marketing Fund contribution referenced in subsection 3.4(c)) in effect
immediately prior to such reduction multiplied by the number of units of such
Product which were shipped to the Owner during the thirty (30) days immediately
prior to such price reduction and which remain in the
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<PAGE>
Owner's inventory at such time (the "Affected Products"). Within thirty (30)
days of such price reduction taking effect, the Vendor will notify the Owner of
such price reduction. If the Vendor fails to provide the Owner with such a
credit within such thirty (30) day period after notification by the Owner of
such quantities remaining in the Owner's inventory, the Owner will be entitled
to offset the amount of such credit (calculated in accordance with the
immediately preceding sentence) first against the amounts owed for any of the
Affected Products, and second against any other amounts due to the Vendor by
the Owner pursuant to this Agreement. The Vendor will have the right, but not
the obligation, to have an Independent Auditor audit the Owner's calculation of
the quantity of Products that remain in the Owner's inventory immediately prior
to such price reduction, provided that the Party whose position is not
-------- ----
supported by the Independent Auditor will be responsible for the costs and
expenses of the Independent Auditor designated pursuant to this subsection
3.6(b).
(c) The Owner will receive from the Vendor purchasing credits to be
applied as a reduction in the purchase price of Subscriber Units (with
accompanying Material Accessories) purchased by the Owner in 1998 as follows:
for each Subscriber Unit (with accompanying Material Accessories) purchased by
the Owner in 1997, the Owner will receive from the Vendor [ ] credit (the
"Purchasing Credits"). The Purchasing Credits will be applied by the Vendor
against purchases by the Owner of Subscriber Units in 1998 as a
reduction in the purchase price of such Subscriber Units; provided,
--------
however the amount of the Purchasing Credits to be applied to reduce the
- - - -------
purchase price of any individual Subscriber Unit (with accompanying Material
Accessories) purchased in 1998 will be [ ] or such lesser then remaining
unused amount (if the amount of remaining unused Purchasing Credits is then
less than [ ].
3.7 Warranty to the Owner. (a) The Vendor warrants to the Owner
---------------------
that each Product will be, during the applicable Warranty Period, free from
Defects or Deficiencies in material and workmanship.
(b) In the event of any breach of the warranty set forth in subsection
3.7(a) during the applicable Warranty Period, the Vendor will, in accordance
with the terms of this subsection 3.7, promptly repair or replace (in
accordance with subsection 3.9) the defective or nonconforming Product or
otherwise cure any Defects and Deficiencies so that the defective or
nonconforming Product will perform in accordance with the Specifications. If
the Vendor fails to promptly repair, replace and/or cure such defect or
nonconformance, the Vendor will promptly refund any monies paid by the Owner
for such Defective Product, less any amounts contributed by the Vendor to the
Co-op Marketing Fund relating to such defective Product (such refund to be made
no later than the notice to the Owner that it will not repair and replace).
The remedies set forth in this subsection 3.7(b) will be the sole and exclusive
remedies in the event of a breach by the Vendor of its obligation under this
subsection 3.7.
(c) No warranty will extend to any Product which has been subjected to
misuse, neglect or improper storage or installation by any Person other than
the Vendor, its
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<PAGE>
agents, employees, subsidiaries and/or affiliates or which has been used with
accessories other than Accessories provided by the Vendor (or expressly
authorized in writing by the Vendor for use with the subject Product) or any
Product which has been opened, repaired, modified or altered by anyone other
than the Vendor or a Vendor authorized repair facility.
(d) The Owner hereby acknowledges and agrees that it has not relied on
any representations or warranties other than those expressly set forth in this
Agreement. During the applicable Warranty Period (in no event less than the
Term), Vendor will provide, at Vendor's sole expense, to the Owner telephonic
technical support, including a hotline staffed from 7:00 a.m to 10:00 p.m.
Eastern time seven (7) days a week.
3.8 Consumer Warranty. (a) In addition to the warranty provided in
-----------------
subsection 3.7, the Vendor will provide a warranty ("Consumer Warranty") to
Purchasers of Sony Branded Products, on the terms and conditions set forth on
APPENDIX 3, and to Purchasers of all other Products, on the terms and
- - - ----------
conditions set forth on APPENDIX 2. At the election of the Owner and
----------
upon prior written notice to the Vendor, the Consumer Warranty for Subscriber
Units not yet delivered to the FOB point can be extended from twelve (12)
months to twenty four (24) months from the date of sale and the forms of the
Consumer Warranty set forth on Appendices 2 and 3 (which shall accompany such
Subscriber Units, as applicable) shall be appropriately modified to implement
the warranty extension for such Subscriber Units. The amount of prior written
notice which the Owner must give to the Vendor to implement such a warranty
extension shall be mutually agreed upon (in any event not in excess of ninety
(90) days) in each instance, taking into account such factors as printing and
packaging lead times, which may vary depending on the number of phones to be
subject to such warranty extension, and any other relevant factor. The Parties
agree that the Consumer Warranty is made solely by the Vendor and that the
Owner makes no warranties with respect to the Products pursuant to this
Agreement. In the event any such Purchaser inadvertently or otherwise forwards
Products subject to the Consumer Warranty to the Owner, the Owner will have the
right to forward such Products to the Vendor and the Vendor will perform its
obligations under the Consumer Warranty as if such Purchaser forwarded such
Products directly to the Vendor.
(b) During the Consumer Warranty period the Vendor agrees to allow a
Purchaser to return a Subscriber Unit (with the original accompanying Material
Accessories) to the Owner or to the locations described in Schedule 4 (or, with
respect to Sony Branded Product, to any authorized dealer or service facility,
as contemplated by APPENDIX 3) for a replacement thereof by the Vendor
----------
in the event that such Subscriber Unit or any such accompanying Material
Accessory suffers from a Defect or Deficiency within ten (10) days after the
purchase of such Subscriber Unit (with such accompanying Material Accessories).
Upon the Owner's receipt of a Defective Product (and prescribed accompanying
Products, if required) from a Purchaser the Owner will have the right to
deliver any such Defective Product (and prescribed accompanying Products, if
required) to the Vendor and the Vendor will within ten (10) days of its receipt
of such Defective Product (and prescribed accompanying Products, if required)
from the Owner replace
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<PAGE>
such Defective Product by sending a replacement Product directly to the Owner
or its designated agents, or as otherwise mutually agreed by the Parties.
3.9 Repair and Replacement Services. (a) If the Owner claims a
-------------------------------
breach of warranty under subsection 3.7, it must notify the Vendor of the
claimed breach within a reasonable time (in any event during the applicable
Warranty Period) after its determination that a breach has in fact occurred.
The Owner will allow the Vendor to inspect the Products, at the Owner's
location designated for such purpose, or, upon the Vendor's issuance of a
return authorization number and at the Vendor's sole expense, the Owner will
return via ground transportation such Products to any of the Vendor's
designated repair facilities located in the United States and listed on
Schedule 4. Notwithstanding anything to the contrary in this subsection
3.9(a), the Owner agrees to pay to the Vendor the lesser of (i) the Vendor's
then current standard cost to refurbish and transport the NTF Product or (ii)
thirty daollars ($30) per NTF Product for each NTF Product actually replaced
with a refurbished or new Product by the Vendor, provided that the Owner will
have the right, but
-------- ----
not the obligation, to designate an Independent Auditor to verify the Vendor's
calculation of the quantity of and the Vendor's standard cost to refurbish and
transport any such NTF Products received by the Vendor pursuant to this
subsection 3.9; provided further that the costs and expenses of the Independent
-------- -------
Auditor will be borne by the Party whose position is not supported by the
Independent Auditor or otherwise equitably under the circumstances.
(b) Upon request by the Owner for a return authorization, pursuant to
subsection 3.7 or 3.8, whether for replacement or for repair of a Product, the
Vendor agrees that, within thirty (30) days of such Owner request, it will
either issue such return authorization number or provide the Owner in writing
with reasons for refusing to issue such return authorization number. In the
event that the Vendor fails to provide the return authorization number, or
provide written reasons for refusing to do so, the Owner will be permitted to
offset the value of any amount paid for the Product against any other amounts
owed by the Owner to the Vendor pursuant to this Agreement; provided
--------
that in the event of any such offset the Vendor may request the return of
- - - ----
the subject Product and, in the event of such request, the Owner will return
such Product.
(c) The Vendor will repair Products as soon as practicable after receipt
of the Defective Product giving rise to the warranty claim and will maintain a
maximum ten (10) day turn-around time to either repair or replace Products.
Turn-around time is the time between receipt by the Vendor of the Defective
Product and shipment for return by the Vendor of the repaired or replacement
Product. When repairing or replacing any Defective Product, the Vendor will
maintain the quality of the Product and will not substitute any component
thereof with a component of lesser quality or with a component that has a
lesser performance standard or capability. Subject to the immediately
preceding sentence, the Vendor will be entitled to repair or replace defective
Products using refurbished components and refurbished Products.
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<PAGE>
3.10 Catastrophic Defects (a) Throughout the applicable Warranty
--------------------
Period for each Product, as applicable to each Product, in the event that (i) in
excess of [ ] of the Products in any class, category or type of Products (a
"Product Class") shipped to the Owner in the initial [ ] period following the
first commercial sale by the Vendor to the Owner of such Product (a "First Sale
Date") (provided that in any event at least [ ] separate Products) are found to
-------- ----
be Defective within any consecutive [ ] month period, (ii) in excess of [ ] of
the Products in any Product Class shipped to the Owner in the second [ ] month
period following the First Sale Date (provided that in any event at least
-------- ----
[ ] separate Products) are found to be Defective within any consecutive [ ]
month period or (iii) in excess of [ ] of the Products in any Product Class
shipped to the Owner after the [ ] month period following the First Sale Date
(provided that in any event at least [ ] separate Products) are found to be
-------- ----
Defective within any consecutive six (6) month period (any such defect described
in clauses (i), (ii) or (iii) above hereinafter referred to as a "Catastrophic
Defect") the Owner will notify the Vendor thereof. Upon receipt of such
notification, the Vendor will have ninety (90) days in which to determine the
cause of and to remedy such Defect (the "Catastrophic Defect Cure Period"). Upon
such remediation, the Vendor will promptly repair or replace any and all
Products that were subject to the same or similar condition(s) causing such
Catastrophic Defect (in the Owner's inventory and any such Products sold by the
Owner to Purchasers) with repaired or otherwise replaced Products at the
Vendor's sole expense (including, without limitation, all freight and duty
payments applicable thereto). In order to accurately determine that any
Catastrophic Defect has in fact been cured by the Vendor in accordance with the
terms of this subsection 3.10, the Owner will not exercise any of its remedies
under this subsection 3.10 against the Vendor until and unless the Defect
percentages for any such class, category or type of Products subject to such a
Catastrophic Defect, as measured during a ninety (90) day period starting on the
date the Vendor commences any such remediation, has failed to fall below the
applicable threshold percentages set forth in clauses (i), (ii) or (iii) above.
(b) In the event that such Catastrophic Defect is not remedied within
the Catastrophic Defect Cure Period in accordance with this subsection 3.10,
the Owner will have the right, but not the obligation, to terminate this
Agreement and to resell to the Vendor for cash payment any and all Products
which are then in the Owner's inventory and which are subject to such
Catastrophic Defect or which are subject to the same or similar condition(s)
causing such Catastrophic Defect at the price paid (less any applicable amounts
contributed by the Vendor to the Co-op Marketing Fund for such Product and less
any Product Depreciation) to the Vendor by the Owner, without charge
(including, without limitation, any restock charge) or penalty; provided
--------
that if the Vendor is diligently pursuing a cure, prior to any such
- - - ----
termination the Owner will allow the Vendor an additional fifty (50) days to
remedy such Catastrophic Defect (provided further that any such resale
-------- -------
will be implemented at the end of the initial ninety (90) day cure period for
such Catastrophic Defect). Regardless of whether the Owner exercises the
rights set forth in the immediately preceding sentence, in the event that such
Catastrophic Defect is not remedied, the Vendor agrees to reimburse the Owner
for any
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<PAGE>
and all reasonable direct out of pocket expenses and costs in excess of any
expenses and costs the Owner would have otherwise incurred hereunder in
reasonably replacing (using replacement Products with the most comparable
features and functionality available at such time) the Owner's or any
Purchasers' Products as a result of such Catastrophic Defect and to repurchase
from the Owner any Vendor Products repurchased or otherwise recalled by the
Owner due to the Vendor's failure to remedy any such Catastrophic Defect.
(c) In the event the Vendor has failed to perform any of its warranty
obligations under the terms of this Agreement and if the Vendor purchases or
subcontracts for the manufacture of any part of any Product to be provided
hereunder from a third party, the warranties given to the Vendor by such third
party will inure, to the extent applicable, permitted by such warranties and
permitted by Applicable Law, to the benefit of the Owner, and the Owner will
have the right, to the extent permitted by such warranties and Applicable Law,
in its sole discretion, to enforce such warranties directly against such third
party. The remedies set forth in subsections 3.10(b) and (c) will be the sole
and exclusive remedies in the event of a breach by the Vendor of its obligation
under subsection 3.10(a) above.
(d) Notwithstanding that the applicable Warranty Period in respect
thereof may have expired, the Vendor will provide repair and maintenance (but
not replacement) services as set forth in subsection 3.9 with respect to any
Product purchased under this Agreement for a period of five (5) years following
the purchase of such Product at its standard commercial prices which will be
reasonable, unless (i) such Product has been subjected by a Person other than
the Vendor (or any of its subcontractors or suppliers) to misuse, neglect or
improper storage or installation or (ii) is in such deteriorated or damaged
condition that it cannot reasonably be repaired. In the event that a Product
is not repairable, the Vendor will return such Product to the Person who
returned such Product (at such Person's cost), with a statement certifying the
reasons why such Product cannot be repaired.
3.11 New Generation of Products. The Vendor may, from time to time
--------------------------
during the Term of this Agreement, modify, update or enhance existing or
produce new generations, or updated, modified or enhanced versions, of Products
sold hereunder ("New Products"). In the event that the Vendor makes such New
Products generally available to any of its other Customers, the Vendor will
offer to sell such New Products to the Owner on terms and conditions pursuant
to and in accordance with subsection 3.3. Notwithstanding anything stated
herein to the contrary, no Product subject to a modification which in no way
affects the form, fit or functionality of the Product will be deemed a New
Product and any such Product will remain a Previously Existing Product.
3.12 Right to Cease Supply of Obsolete Products. If the Vendor
------------------------------------------
begins selling and making generally available New Products or products to
replace or as a substitute for previously existing Products ("Previously
Existing Products"), the Vendor may, with the Owner's prior written consent,
such consent not to be unreasonably withheld, cease supplying the Previously
Existing Products to the Owner under this Agreement by
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<PAGE>
delivering six (6) months' prior written notice to the Owner regarding such
cessation; provided that the Vendor will offer to supply to the Owner
-------- ----
such replacement or substitute Products on terms and conditions pursuant to and
in accordance with subsection 3.3; and provided further that the
-------- -------
New Products or replacement or substitute Products maintain performance and
functionality equivalent to that previously provided by the Previously Existing
Products (unless any such lower performance and/or functionality has been
consented to by the Owner, such consent not to be unreasonably withheld).
Notwithstanding anything stated herein to the contrary, the Vendor will not be
required to provide the Owner notice under this subsection 3.12 or otherwise of
any modification to a Product or a component thereof which in no way affects
the form, fit and/or functionality of such Product. The Vendor will under no
circumstances be entitled to cease supplying such Previously Existing Products
which are covered under a then unfilled Purchase Order from the Owner. The
Vendor will have no right to cease supplying the Owner under this subsection
3.12 with any such Previously Existing Products so long as the Vendor continues
to supply and make available such Previously Existing Products to any other
Customer. It is expressly understood by the Owner that the Vendor does intend,
not earlier than April 1997, to obsolete the QCP-1900 and the CM-D600 models of
Subscriber Units and replace them with a New Product (at the same prices set
forth in Appendix 1) in accordance with this subsection 3.12. Such New Product
will comply with the specifications as set forth in Exhibit A3. In accordance
with this subsection 3.12, the Owner does hereby give its written consent to
the substitution of the New Product as specified in Exhibit A3 for any QCP-1900
and/or CM-D600 models of Subscriber Units ordered by the Owner under this
Agreement.
3.13 [Intentionally Omitted].
---------------------
3.14 Right to Return Products. The Vendor agrees that at any time within
------------------------
ninety (90) days immediately prior to the End Date (or the last Business Day of
the Term in the event the End Date should be extended pursuant to the terms of
this Agreement), in the event that items of a Product are not purchased by
Purchasers and remain in the Owner's inventory at such time, the Owner will be
permitted, but not required, to return such items to the Vendor; provided that
the aggregate value of any such Products will not exceed three hundred seventy
five thousand dollars ($375,000) minus the reasonable actual rework costs
incurred by the Vendor for any such Products which were customized for the Owner
pursuant to and in accordance with the terms of this Agreement. Upon return of
such items to the Vendor, the Vendor will refund to the Owner the price paid for
such items (less such rework costs and less any amounts contributed by the
Vendor to the Co-op Marketing Fund relating to such returned Products) without
charge or penalty or offsetting such returned items are new, unused, in the
original as shipped by the Vendor to the Owner and are not Previously Existing
Products. Such refund (less such rework costs and less any amounts contributed
by the Vendor to the Co-op Marketing Fund relating to such returned Products)
will be offset against outstanding invoices or, if there are no such invoices,
in cash. Any freight and other charges incurred in connection with returning
such items to the Vendor within such ninety (90) day period will be paid by the
Owner.
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<PAGE>
3.15 Labeling and Logo Changes. (a) The exterior of each
-------------------------
Subscriber Unit and its packaging will bear the technology mark, as specified
in Appendix 4, or such other substantially equivalent technology mark as
mutually agreed upon by the Parties (a "Mark"). The Mark will be positioned in
accordance with Appendix 4. At the Owner's option, and at the Vendor's sole
expense, and with appropriate lead times agreed to by the Parties, each
Subscriber Unit may be otherwise labeled and/or logoed on the front of the
Subscriber Unit below the key pad in accordance with the Specifications.
(b) The Parties acknowledge that the Owner may want to participate in
certain aspects of the Product labeling and the Vendor agrees to design, upon
mutual agreement with the Owner as to feasibility, timing and additional cost
(subject to the Vendor's obligations as to prices and costs pursuant to
subsection 3.3), if any, associated with any such labeling change not otherwise
at the Vendor's expense pursuant to the terms of this Agreement including, but
not limited to, the Specifications, Product labeling to complement the Owner's
marketing effort in accordance with the Owner's instructions.
3.16 Materials and Equipment. Whenever materials are specified or
-----------------------
described in this Agreement (including the Specifications) by using the name of
a proprietary item or the name of a particular supplier, the naming of the item
is intended to establish the type, function and quality required, and
substitute materials may nonetheless be used, provided that such
-------- ----
materials are equivalent or equal to that named. If the Vendor wishes to
furnish or use a substitute item, the Vendor must first certify that the
proposed substitute will perform at least as well as the intended functions and
achieve the results called for by this Agreement (including but not limited to
the Specifications), will be substantially similar or of equal substance to
that specified and be suited for the same use as that specified. The Owner may
require the Vendor to furnish, at the Vendor's expense, additional data about
the proposed substitute as required to evaluate the substitution. The Owner
will be allowed a reasonable time within which to evaluate each proposed
substitute. Notwithstanding the foregoing, prior to the shipment of Products
pursuant to the terms of this Agreement, the Vendor may at any time without
notice to or consent of the Owner make changes in a Vendor Product furnished
pursuant to this Agreement, or modify the drawings and published specifications
relating thereto, or substitute Products of similar or later design to fulfill
its obligations under this Agreement or otherwise fill an order, provided
--------
that any such changes, modifications or substitutions will in no way have
- - - ----
an adverse affect or otherwise adversely impact upon the form, fit, or function
of an ordered Product pursuant to and in accordance with the applicable
Specifications. With respect to changes, modifications and substitutions which
do in fact adversely affect the form, fit, or function of an ordered Product
pursuant to and in accordance with the Specifications, the Vendor must notify
the Owner in writing at least ninety (90) days prior to the effective dates of
any such changes, modifications or substitutions. In the event that any such
change, modification or substitution is not desired by the Owner, the Owner
will notify the Vendor within thirty (30) days from the date of notice and the
Vendor will not furnish any such changed Products to the Owner on any orders in
process at the time the Owner is so notified; provided further, nothing
-------- -------
contained herein will otherwise modify Vendor's obligations under the terms of
this Agreement.
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<PAGE>
3.17 Logos. (a) The Products will bear only those logos as agreed
-----
to by the Owner pursuant to the terms of this Agreement (other than the Mark
pursuant to subsection 3.15). The Products will bear the "Sprint" label or
logo and/or such other labels or logos as the Owner shall require from time to
time, in such size and position on the Products as the Owner shall notify to
the Vendor from time to time pursuant to and in accordance with subsection
3.15.
(b) Throughout the Term of this Agreement, the Owner may use only those
trademarks, insignias, logos or other proprietary marks listed on Schedule 6 or
as otherwise consented to in writing by the Vendor ("Proprietary Marks") in
connection with the Owner's sales, advertisements and marketing of the
Products; provided that the Owner's use thereof shall be in accordance
-------- ----
with the Vendor's, Sony's or Qualcomm's, as applicable, reasonable directions
and policies. The Owner agrees that it has no rights with respect to the
Proprietary Marks, except as expressly provided in this subsection 3.17(b), and
will not use the Proprietary Marks as part of the business name of the Owner.
(c) The Vendor will use its reasonable efforts to cooperate with the
Owner in the development of Product packaging that is fully integrated with the
Owner's branding strategy and which supports the Owner's marketing
communication and segmentation strategy as reasonably communicated to the
Vendor by the Owner from time to time. Such cooperation will focus on the
contents of Product packaging, the configuration, physical dimensions and
materials of such packaging, communications, colors, graphics and descriptive
language used in connection with such Products and such other items as the
Parties shall agree upon from time to time.
(d) If the Vendor is itself unable to meet the Owner's packaging needs
as set forth in subsection 3.17(c) or as otherwise reasonably communicated by
the Owner to the Vendor from time to time, the Vendor agrees to supply the
Products in specified configurations and bulk packaging to the Owner's
designated packager for the required packaging; provided that in such
-------- ----
case the Vendor will credit the Owner against the purchase price for the
subject Products with any amounts saved by the Vendor for not having had to
perform the packaging services as required by the Specifications.
3.18 New Development Advisory Board; Notice of New Developments.
----------------------------------------------------------
The Owner and the Vendor will establish an NDAB within sixty (60) days of the
Effective Date. The purpose of the NDAB will be to review the development
requirements and high level development milestones, to ensure that the Vendor
understands the Owner's requirements for each Product (including New Products)
and/or enhancements. The NDAB will provide an executive forum to discuss
product ideas, Owner requirements and its recommended development
prioritization for improved infrastructure-based subscriber features. The
focus of the NDAB will be on Product features, new CDMA products, Product
Enhancements, critical operational issues, future developments beyond CDMA
cellular without the need for System additions and on such other matters as the
Parties mutually agree upon from time to time. Throughout the Term, the Vendor
will use its reasonable efforts to provide the Owner notice of its
technological innovations
-27-
<PAGE>
and advancements relevant to the Products within a time reasonably prior to
making any such information generally available to its Customers, provided
--------
that nothing herein will require the Vendor to disclose any information
- - - ----
proprietary to any other Customer.
3.19 Market Development Manager. The Vendor will provide a market
--------------------------
development manager to coordinate the efforts of the Vendor in meeting its
obligations relating to the NDAB who will specifically focus on new Products,
CDMA services and features. Such market development manager must be reasonably
knowledgeable in CDMA technology and the Owner's Nationwide Network and must
work closely, and on a regularly scheduled basis, with the Owner's senior
engineering and marketing personnel on feature development, feature roll-out,
future road maps for CDMA Products, and any other marketing aspect of providing
PCS that the Owner believes is beneficial to the Nationwide Network and/or any
PCS System and/or Products at such time. The Vendor's market development
manager and the manager's staff will serve as the Owner's direct liaison with
the Vendor to advise the Vendor's product development teams of the Owner's
priorities as described to the Vendor by the Owner from time to time either
through the NDAB or by any other means acceptable to the Parties. Nothing
contained in this subsection 3.19 will in any way limit and/or modify the
Owner's ability to enforce its rights under this Agreement or to otherwise
maintain contacts with the Vendor in any other way it sees fit. Within a
reasonable time after the Effective Date the Owner will use reasonable efforts
to designate appropriate personnel to coordinate with the Vendor's market
development manager pursuant to this subsection 3.19.
3.20 Applicable Law and Radio Frequency Energy Standards. All
---------------------------------------------------
Products must comply, to the extent applicable, with all Applicable Law as of
their respective date of delivery to the FOB point including, but not limited
to, the requirements of Subpart J of Part 15 of the rules and regulations
promulgated by the FCC, as the same may be amended from time to time (the "FCC
Rules and Regulations"), including, without limitation, those provisions
concerning the labeling of Products and the suppression of radio frequency and
electromagnetic radiation to specified levels. In the event that the Products
produce radio frequency interference, notwithstanding that such Products comply
with the FCC Rules and Regulations, the Vendor will use reasonable efforts to
provide the Owner with reasonable technical information in its possession on
the methods to suppress such interference and will exercise reasonable
commercial efforts to isolate and remediate any such radio frequency
interference caused by the Products which constitutes a condition materially
adversely affecting the Nationwide Network (a "RF Interference Condition") or
any part thereof, provided that the Owner will cooperate to the extent
-------- ----
reasonable with the Vendor to achieve such remediation. Nothing in this
subsection 3.20 will be deemed to diminish or otherwise limit the Vendor's
warranty obligations pursuant to this Agreement.
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<PAGE>
3.21 [Intentionally Omitted].
-----------------------
3.22 Test Products; Product Verification and Testing. (a) The
-----------------------------------------------
Vendor agrees to supply the Owner with ten (10) pre-production items of each
Subscriber Unit and Material Accessory no later than five (5) Business Days
after the Effective Date and ten (10) additional pre-production items of each
Subscriber Unit and Material Accessory no later than July 31, 1996 in order to
allow the Owner to test such items to determine whether such Subscriber Units
and Material Accessories comply with the requirements of this Agreement,
including the Specifications; provided that no such tests or any such
-------- ----
knowledge or experience gained or otherwise acquired from such tests or
otherwise will in any way be deemed a waiver of or to reduce or affect the
Vendor's obligations with respect to the provision of warranties pursuant to
this Agreement. The Owner will use reasonable efforts to provide the Vendor
with the results of such tests. In the event of the Vendor's introduction of
New Products pursuant to the terms of this Agreement, the Vendor will provide
the Owner reasonably sufficient numbers of pre-production units (in any event
not more than ten (10)) of any such New Product for the purposes of Owner
testing at least ninety (90) days prior to the general market availability of
any such New Products. Notwithstanding anything stated herein to the contrary,
the warranties set forth in subsections 3.7 and 3.8 will not apply to any
pre-production Subscriber Units required to be delivered by the Vendor pursuant
to this subsection 3.22(a) or otherwise purchased by the Owner. Exhibits B1
and B2 are preliminary and subject to final revision as mutually agreed to by
the Parties in good faith; provided that Exhibits B1 and B2 will be
-------- ----
finalized no later than July 15, 1996; provided further that in the
-------- -------
event the Parties are unable to mutually agree in good faith by July 15, 1996
such disagreement will be immediately referred to dispute resolution pursuant
to and in accordance with the terms of subsection 11.8.
(b) The Vendor will test the Products and verify to the Owner their
performance in accordance with the Specifications pursuant to and in accordance
with the requirements and milestones set forth in Exhibits B1, B2 and B3. The
failure of the Vendor to verify the performance of the Products pursuant to the
requirements of Exhibits B1, B2 and B3 will result in the Owner having the
absolute right to suspend or cancel (in its sole and absolute discretion) any
then existing or future Purchase Orders for any such Products which have not in
fact complied with the requirements of Exhibits B1, B2 and B3. To the extent
any class, category or type of Products do not comply with the requirements of
Exhibits B1, B2 and B3 within ninety (90) days (one hundred forty (140) days in
the event a semiconductor component modification is required) of the testing
dates provided for any such verifications pursuant to Exhibits B1, B2 and B3
(in the case of Exhibit B3 at the Vendor's testing facility), the Owner will
have the right, but not the obligation, to terminate this Agreement without
payment or penalty of any kind; provided that at any time after the
-------- ----
first thirty (30) days of any such applicable cure period as set forth above in
this sentence, the Owner will have the right, in addition to any other rights
set forth in the immediately preceding sentence, to cancel (in its sole and
absolute discretion) any then existing Purchase Orders for Products delivered
or required to be delivered on such date which have not in fact complied with
the requirements of Exhibits B1, B2 or B3 and the Vendor agrees to reimburse
the Owner
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<PAGE>
for any and all reasonable direct out of pocket expenses and costs in excess of
any expenses and costs the Owner would have otherwise incurred hereunder in
reasonably replacing (using replacement Products with the most comparable
specified features and functionality available at such time) any such Products.
In the event that the Owner chooses to terminate this Agreement pursuant to
this subsection 3.22(b) such termination will be the Owner's sole and exclusive
remedy; provided that in the event the Owner does not terminate under
-------- ----
this subsection 3.22(b), the Owner will retain all rights to enforce any and
all delay penalties against the Vendor pursuant to and in accordance with
subsection 4.2 as its sole and exclusive remedy in such case; provided
--------
further that nothing contained herein will be deemed to diminish or
- - - -------
otherwise limit the Vendor's warranty obligations pursuant to this Agreement.
Notwithstanding anything to the contrary stated herein above, to the extent
that the Owner decides (in its sole and absolute discretion) to take, delivery
of and place into service any such Products which have failed to pass the
testing required by Exhibits B1, B2 or B3 ("Non-Conforming Products"), the
Owner will be deemed to have accepted any such Non-Conforming Products with any
such non-conformance; provided that, in such case, the Owner will in no
-------- ----
way be deemed to have waived any of its rights to enforce the Vendor's complete
conformance (including, but not limited to, conformance with any requirement
not otherwise met by such Non-Conforming Products) with the testing
requirements set forth in Exhibits B1, B2 and B3 and the Specifications on all
other Products (except for previously delivered and accepted Non-Conforming
Products) already then delivered or yet to be delivered by the Vendor pursuant
to the terms of this Agreement.
3.23 Change Orders. From time to time the Owner may request changes
-------------
or modifications to the Products or packaging and/or the Specifications
("Change Orders"). All such Change Orders requested in writing by the Owner to
the Vendor will be subject to the reasonable good faith and timely agreement
(including, but not limited to, agreement on terms such as one-time charges,
price increases, minimum purchase commitments and schedule impacts) of the
Vendor and the Owner which agreement will be evidenced by a writing executed by
an authorized representative of each of the Parties.
SECTION 4. LEAD TIMES AND DELAY
4.1 Lead Times. Provided that the Owner submits Forecasts to the
----------
Vendor and places Purchase Orders for Products in accordance with Section 5
below and subject to the provisions of subsection 3.2(a), the Vendor will ship
Products (other than as specified in the last sentence of this subsection 4.1)
ordered by the Owner against such Forecasts within the later of (i) ten (10)
Business Days after receipt and the Vendor's acknowledgement of the Owner's
Purchase Order therefor, and (ii) the shipment date specified by the Owner in
such Purchase Order pursuant to subsection 5.2(a); provided that the
-------- ----
Vendor has acknowledged receipt of such Purchase Order, and the time period
from the date of the Vendor's acknowledgement and the specified shipment date
is longer than ten (10) Business Days. The Vendor will be able to provide the
Owner with specific lead times (which will in no event be in excess of ten (10)
days from receipt and acknowledgement by the Vendor of the Owner's Purchase
Order subject to the terms of
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<PAGE>
the first sentence of this subsection 4.1) applicable to each Purchase Order
for Products at the time the Vendor receives and acknowledges the Owner's
Purchase Order therefor. The Vendor will ship Products maintained in the
Buffer Stock ordered by the Owner against Forecasts for such Buffer Stock in
accordance with the provisions set forth in subsection 5.2.
4.2 Delivery Delay. (a) With respect to the first [ ] Subscriber Units
--------------
(and their included Material Accessories) purchased hereunder (the "Launch
Units"), in the event that the Vendor fails to deliver the Launch Units within
[ ] days (the "Delay Grace Period") of the applicable dates for shipment
referred to in subsection 4.1, the Vendor will pay to the Owner as liquidated
damages for such late performance (i) for each of the first [ ] days
beyond such Delay Grace Period, an amount equal to [ ] per day (for such
[ ] day period) of the total price of such undelivered Launch Units and
(ii) on the thirty fourth day after the date set for shipment pursuant to
subsection 4.1, an amount equal to [ ] of the total price of such undelivered
Launch Units; provided that in no event will the Vendor incur aggregate damages
-------- ----
with respect to Launch Units under this subsection 4.2(a) in excess of [ ] and
further, in no event will the Vendor incur damages with respect to Launch Units
on any given day pursuant to this subsection 4.2(a) in excess of [ ] per day;
provided further, that no such liquidated damages for delivery delay will be due
- - - -------- -------
if the delay is attributable solely to (i) an event constituting a Force Majeure
pursuant to the terms of this Agreement or (ii) an act or omission of the Owner.
The Owner may offset the amount of such delay penalty against any amounts owed
to the Vendor for Products supplied under this Agreement.
(b) With respect to Subscriber Units (and their included Material
Accessories) that do not constitute Launch Units, for each of the first [
] days beyond the applicable "Succeeding Delay Grace Period" that the Vendor
fails to deliver any Subscriber Units (and their included Material
Accessories), the Vendor will pay to the Owner as liquidated damages for such
late performance an amount equal to [ ] per day (for such [ ] day period)
of the total price of such Subscriber Units (and included Material Accessories)
up to an amount not to exceed, in aggregate, [ ] of the total price of such
Subscriber Units (and included Material Accessories); provided that no such
-------- ----
liquidated damages for delivery delay will be due if the delay is attributable
solely to (i) an event constituting a force majeure pursuant to the terms of
this Agreement or (ii) an act or omission of the Owner. The Owner may offset the
amount of any delay penalty against any amounts owed to the Vendor for Products
supplied under this Agreement. For the purposes hereof, Products that will have
been rightfully rejected by the Owner in accordance with the terms of this
Agreement will not be deemed to be delivered by the Vendor; provided that
-------- ----
liquidated damages for delivery delay will not accrue during the time it takes
the Owner to inspect and reject any such Products. For the purposes of this
subsection 4.2(b) "Succeeding Delay Grace Period" shall mean [ ] days
beyond the applicable dates for shipment referred to in subsection 4.1.
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<PAGE>
(c) Notwithstanding anything stated in this subsection 4.2 to the
contrary, during any time that the Owner is in default under this Agreement for
undisputed payments owed to the Vendor, the Owner will not be entitled to any of
the delay penalties set forth in this subsection 4.2, nor shall any such delay
penalties accrue during the period any such default remains outstanding.
Furthermore, in the event that on the last day of the Initial Term the Owner's
aggregate Shortfall over the Initial Term exceeds [ ] of the Total Minimum
Commitment, the Owner will, within (30) days of receiving an invoice from the
Vendor, refund to the Vendor any delay penalties collected by the Owner pursuant
to this subsection 4.2 (or if such delay penalties have accrued but have not yet
been paid, the obligation to pay such penalties shall be absolved); provided
--------
that in no event will the Owner be obligated to make any such refund if the
- - - ----
Owner's Shortfall was reasonably due to the Vendor's delivery delays throughout
the Initial Term.
(d) No liquidated damages for delivery delays under subsection 4.2 will
accrue (nor will the Owner be entitled to exercise any other remedies set forth
herein with respect to the enforcement of timely delivery) with respect to any
Subscriber Units not timely delivered by the Vendor (the "Delayed Products")
(i) to the extent, and only to the extent, that the Delayed Products were
intended for distribution and use in the first System Area in which the Owner
plans (in its sole and absolute discretion) to commence commercial operation
("Commencement") having more than [ ], (ii) if the Commencement of the First
System would have been delayed, even with timely delivery of the Delayed
Products beyond that date the Owner anticipated Commencement was to occur when
the Owner ordered the Delayed Products (the length of such delay being the
"Delay Period"), (iii) the Delayed Products are delivered before the end of the
Delay Period and (iv) the Owner, in such instance, will have given the Vendor
prior written notice of such Commencement delay. The Owner agrees to promptly
give the Vendor written notice of any delay in Commencement. It is the intent of
the Parties that the length of the Delay Period be equal to the number of days
from the date the Owner anticipated Commencement was to occur when the Owner
ordered the Delayed Products until the date Commencement would have occurred
assuming that the Owner had received the Delayed Products. For the purpose of
subsection 4.2(a), liquidated damages for delivery delays will be calculated
with respect to Delayed Products by using the day following the last day of the
Delay Period as the date on which the Delayed Products were to have been
delivered by the Vendor. It is expressly understood and agreed that this
subsection 4.2(d) will only apply to Products ordered by the Owner for the First
System and that the Vendor will not be entitled to the benefits of this
subsection 4.2(d) for any other Products or any other System Area to or for
which Products are to be shipped pursuant to the terms of this Agreement.
(e) In the event (i) there are delivery delays in any given Annual
Supply Period, or the Stub Period, as the case may be, which Vendor fails to
cure within the applicable Delay Grace Period, which delivery delays involve
the Vendor's failure to timely deliver more than [ ] Subscriber Units, in
aggregate, and (ii) the percentage of deliveries of Subscriber Units which are
subject to delivery delays in any given Annual Supply Period, or the Stub
Period, as the case may be, and which Vendor fails to cure
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<PAGE>
within the applicable Delay Grace Period, exceeds [ ], provided that in any
-------- ----
event the actual number of delivery delays referenced in the immediately
proceeding clause (ii) will be at least [ ] of the number of scheduled
deliveries, then the Owner will have the right, but not the obligation, to
terminate this Agreement without any payment or penalty. In the event the Vendor
fails to cure any delivery delay within thirty (30) days from the date delivery
was due, the Owner will have the right, but not the obligation, to cancel the
Purchase Order subject to such delay without any payment or penalty. With
respect to any such cancelled Purchase Order, the Owner will be entitled to
receive from the Vendor any and all reasonable direct out of pocket expenses and
costs in excess of any expenses and costs the Owner would have otherwise
incurred hereunder in order to reasonably fulfill (using replacement products
with the most comparable features and functionality) such cancelled Purchase
Order with any third party supplier acceptable to the Owner.
(f) Notwithstanding anything in this subsection 4.2 to the contrary, the
Vendor will only be obligated to pay to the Owner one-half (1/2) of the Delay
Penalties otherwise applicable to the late delivery of Products ordered
pursuant to an Excess Purchase Order.
(g) In the event the Owner exercises its rights under this subsection
4.2 due to a Vendor delivery delay, the remedies for any such Vendor delivery
delay as set forth in this subsection 4.2 will be exclusive.
SECTION 5. FORECASTS AND ORDERING
5.1 Forecasts. (a) Upon execution of this Agreement and on the
---------
first of each month thereafter, the Owner will deliver to the Vendor written
forecasts (a "Forecast") specifying its estimate of the quantity of each type
of Product that it expects to purchase on a month to month basis during the
twelve (12) months following the date of such Forecast (a "Forecast Period"),
which shall, subject to the provisions of subsection 3.2(a), be treated as
follows;
(i) quantities forecasted to be ordered during the first three
(3) months of each Forecast Period will be a firm Purchase
Order which, pursuant to the terms of this Agreement, must be
taken by the Owner in the month indicated. The Owner will
place one or more Purchase Orders to purchase Products in
accordance with the applicable Forecast;
(ii) quantities forecasted to be ordered during month four (4) of
each such Forecast Period shall be considered reasonably
accurate estimates of prospective Purchase Orders and
accordingly, the Owner will issue the Vendor firm Purchase
Orders to ensure that at least eighty percent (80%) and not
more than one hundred twenty percent (120%)
of the quantities specified during this segment of
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<PAGE>
the Forecast Period are covered by firm Purchase Orders from
the Owner;
(iii) quantities forecasted to be ordered during month five (5) of
each such Forecast Period shall be considered reasonably
accurate estimates of prospective Purchase Orders, and
accordingly, the Owner will issue the Vendor firm Purchase
Orders to ensure that at least sixty percent (60%) and not
more than on hundred forty percent (140%)
of the quantities specified during this segment of the
Forecast Period are covered by firm Purchase Orders from the
Owner; and
(iv) quantities forecasted to be ordered during months six (6)
through twelve (12) of each such Forecast Period will only be
estimates of prospective Purchase Orders, and subsequent
Forecasts and actual Purchase Orders may completely vary and
be completely changeable by the Owner in its absolute
discretion.
Any reductions in firm Purchase Orders below the specified
forecasted amounts or any increases in firm Purchase Orders above the specified
forecasted amounts pursuant to clause (iii) of this subsection 5.1(a) may, in
the Owner's sole discretion, be cumulative with any such increase or decrease
pursuant to clause (ii) of this subsection 5.1(a). For example, if a
forecasted amount for month five in any forecast is subsequently reduced by the
Owner by forty percent (40%) pursuant to clause (iii) of this subsection 5.1(a)
the Owner will have the right, but not the obligation, to further reduce such
reduced amount by an additional twenty percent (20%) pursuant to clause (ii) of
this subsection 5.1(a). The first Forecast to be delivered by the Owner to the
Vendor is attached hereto as Schedule 8 and is expressly accepted by the Vendor.
Except with respect to such first Forecast, in no event will the Vendor be
required to accept an amount in any given month of a Forecast which is greater
than one hundred fifty percent (150%)of the average amount forecasted by the
Owner for the five months immediately preceding the subject month. In the event
the Owner fails to deliver to the Vendor a new Forecast by the first Business
Day of any given month, then the new Forecast for such new twelve month period
shall be deemed to be the prior Forecast, adjusted by shifting the monthly
quantities up one month (i.e, the quantity that used to be forecasted for month
two will instead be the quantity for month one) with the new amount forecasted
for month twelve being the same as the amount for the new month eleven.
Notwithstanding anything set forth in this Agreement, in no event shall the
Owner be entitled to increase the amount of Products forecasted in the months of
July through December, 1996 above the amounts forecasted for any such month in
the first Forecast.
(b) Within any Forecast provided to the Vendor by the Owner
pursuant to and in accordance with the terms of this subsection 5.1, the Owner
may designate to the Vendor a certain percentage of each type of the Product
requirements so forecasted ((i) up to fifteen percent (15%) in the Owner's sole
discretion during the first Annual Supply
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Period and (ii) up to ten percent (10%) in the Owner's sole discretion during
any succeeding Annual Supply Period, or the Stub Period, as the case may be) to
be held by the Vendor in separate buffer stock ("Buffer Stock") for accelerated
ordering and shipment of such Products within such Buffer Stock. In the event
of any such designation pursuant to this clause (b) of subsection 5.1, the
Vendor will maintain such Buffer Stock and deliver to the Owner any Products
within such Buffer Stock in accordance with the lead times and ordering
provisions for such Buffer Stock set forth in this Agreement.
(c) The Forecasts will be in a format mutually acceptable to the
Parties; provided that the format of the first Forecast as set forth in
-------- ----
Schedule 8 will at all times be deemed in a format acceptable to both Parties.
5.2 Ordering. (a) In order to be effective, all orders by the
--------
Owner for Products will be made by the Owner in the form of written Purchase
Orders, specifying the quantity of each type of Product to be purchased and the
date or dates on which such Products are required to be shipped to the Owner,
the shipping method and the location to which such Products should be shipped;
provided that such shipment date will be no earlier than (i) ten (10)
- - - -------- ----
Business Days after the date of such Purchase Order in the event of Purchase
Orders for Products not in Buffer Stock, (ii) one (1) Business Day for not more
than (x) [ ] Subscriber Units (with accompanying Accessories) and not
exceeding (y) [ ] separate destinations to which Products will be shipped as
designated by the Owner in Purchase Orders (each such destination a
"Shipped-to Location") for Products in Buffer Stock and (iii) two Business Days
for not more than (x) [ ] Subscriber Units (with accompanying Accessories)
and not exceeding (y) [ ] separate Shipped-to Locations for Products in
Buffer Stock; and provided further that the Vendor will use its reasonable
-------- -------
efforts to fulfill Purchase Orders in excess of forecasted quantities that the
Owner is entitled to turn into firm Purchase Orders pursuant to and in
accordance with subsection 5.1 (each an "Excess Purchase Order"). Each Purchase
Order will be submitted to the Vendor, 10300 Campus Point Drive, San Diego, CA
92121, Attn: Sprint Spectrum L.P. Account Manager (or any other authorized
representative of the Vendor designated to the Owner in writing by the Vendor
from time to time) and will be subject to the acknowledgement by the Vendor in
writing to the designated authorized representative of the Owner within two (2)
Business Days of receipt of Purchase Orders for Products in Vendor stock and
within one (1) Business Day of receipt of Purchase Orders for Products in Buffer
Stock. The Vendor will acknowledge Purchase Orders that the appropriate
personnel of the Vendor have actual knowledge of. Subject to the immediately
preceding sentence, failure of the Vendor to acknowledge to the Owner in writing
receipt of any Purchase Order or Excess Purchase Order shall be deemed to render
any such Purchase Order or Excess Purchase Order null and void. Within ten (10)
Business Days of receipt of Purchase Orders for Products in Vendor stock and
within one (1) Business Day of receipt of Purchase Orders for Products in Buffer
Stock, the Vendor will (subject to the terms of the last three sentences of this
subsection 5.2(a)) have the right to reject for non-conformance with the terms
of this Agreement any such Purchase Orders the receipt of which it has
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acknowledged pursuant to the terms set forth above; provided that for
-------- ----
any acknowledged Purchase Orders which must be fulfilled within one (1)
Business Day pursuant to clause (ii) above, the Vendor must reject for such
non-conformance any such Purchase Order on the same day as the acknowledgment
of such Purchase Order. The failure of the Vendor to so reject Purchase Orders
within the time frames above will be deemed acceptance by the Vendor of any
such acknowledged Purchase Orders. The Vendor will not have the right to
disagree with, reject, modify or otherwise amend any Purchase Order in
conformance with the terms of this Agreement including, but not limited to,
quantities which have already been the subject of Forecasts by the Owner
pursuant to the terms of subsection 5.1; provided that subject to the
-------- ----
terms of the immediately preceding sentence of this subsection 5.2(a), the
Vendor may reject or otherwise respond to any Excess Purchase Order,
provided that failure of the Vendor to respond to any such acknowledged
- - - -------- ----
Excess Purchase Order within ten (10) days of receipt thereof will be deemed
acceptance thereof. Any Vendor rejection of or modification to a Purchase
Order (other than Excess Purchase Orders) in conformance with the terms of this
Agreement pursuant to and in accordance with subsection 5.1 will be deemed a
material breach of this Agreement by the Vendor. Notwithstanding subsection
5.2(f) below, to the extent that the Vendor is actually aware that any Purchase
Order in any way contradicts or is not otherwise in conformance with the terms
of this Agreement, the Vendor agrees to promptly notify the Owner of any such
contradiction or non-conformance as soon as possible upon becoming actually
aware of such contradiction or non-conformance so that the Owner will have a
reasonable opportunity to correct any such contradiction or non-conformance and
furthermore to the extent reasonable under the circumstances the Vendor will
endeavor to fulfill any such non-conforming Purchase Order ignoring any such
non-conformity unless the Owner, after notification from the Vendor, will have
expressly refused to accept the fulfillment of such Purchase Order with any
such correcting modification.
(b) [Intentionally Omitted]
(c) Subject to subsections 3.2(b) and 3.2(c), any Purchase Order or
Excess Purchase Order may, in the Owner's sole and absolute discretion, be
postponed once without penalty by written notice from the Owner to the Vendor
at any time prior to ninety (90) days immediately prior to the initial shipment
date established for such Purchase Order pursuant to the terms of this
Agreement for a period not in excess of ninety (90) days from such initial
shipment date. If the Owner chooses to postpone a Purchase Order (for a period
not in excess of ninety (90) days from the initial shipment date for such
Purchase Order) at any time within the ninety (90) days immediately prior to
the initial shipment date (a "Late Postponement"), the Owner will pay to the
Vendor an amount equal to [ ] of the value (based upon the prices set forth in
Appendix 1) of any increased Product inventory for each month or portion of a
month (such amount to be prorated if such time periods are not whole months) the
Vendor is required to carry such increased Product inventory due to such Late
Postponement. The Vendor will invoice any such amounts on a monthly basis. In
any event and notwithstanding anything to the contrary in this clause (c) of
subsection 5.2, no Purchase Order or Excess Purchase Order may be postponed by
the Owner (i) within (10)
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Business Days of the initial shipment date for such Purchase Order or Excess
Purchase Order or (ii) if an Owner Event of Default has occurred or is
continuing pursuant to subsection 10.8.
(d) In accordance with the terms of subsection 5.1(b), the Vendor will
maintain Buffer Stock of Products which, when ordered by the Owner from the
Vendor in accordance with the Owner's Forecasts, will be delivered to the Owner
in accordance with the terms of subsection 5.2(a). The Owner will be liable
for and will pay to the Vendor an amount equal to [ ] of the value
(based upon the prices set forth in Appendix 1) of such Buffer Stock held in the
Vendor's inventory for each month or portion of a month (such amount to be
prorated if such time periods are not whole months) such Buffer Stock is so held
by the Vendor in its inventory in excess of thirty (30) days from the date the
Vendor commenced holding any such Buffer Stock for the Owner pursuant to and in
accordance with subsection 5.1 (each such date a "Buffer Stock Commencement
Date"); provided that during the first Annual Supply Period the Owner will
-------- ----
not be liable for any such amounts during the first thirty (30) day period
commencing upon the applicable Buffer Stock Commencement Date.
(e) The Vendor will reasonably cooperate with the Owner, and/or any
Person designated by the Owner for such purpose, (i) to utilize UPC stock
control numbering and other bar-coding requirements relating to inventory
processes and systems, and (ii) to develop processes and systems that will
maximize delivery logistics. Metric targets will be defined by the mutual good
faith agreement of the Parties for acceptable stock out percentages, delivery
times and total logistics costs.
(f) Unless the Parties otherwise expressly agree in writing, each
Purchase Order will be deemed to incorporate by reference all of the terms and
conditions of this Agreement. Should the terms of any Purchase Order conflict
with the terms of this Agreement, the terms of this Agreement will govern
unless the Parties expressly agree in writing (signed by a duly authorized
representative of both Parties) to the contrary. This Agreement will continue
to apply to a Purchase Order during the Term of this Agreement until all
obligations herein and thereunder are performed.
SECTION 6. SALES AND TECHNICAL SUPPORT
6.1 Sales Training. The Vendor will work with the Owner, at the
--------------
Vendor's sole expense, to agree on a sales training program for the
distribution channel used by the Owner for Subscriber Units. The goal of this
program will be to provide sales training ("Training") to the Owner's personnel
on CDMA and the features of the Subscriber Units, as well as to provide
appropriate Product related collateral material. The training program will
include, but will not be limited to, the following topics: CDMA; Product
features and usage; Subscriber Unit programming, installation and
troubleshooting; and such other matters as the Parties may reasonably agree
upon from time to time. The target audiences for the training will be the
Owner's marketing and sales personnel. These training programs will take place
at mutually agreeable locations (such locations to be provided at the Owner's
sole expense) in each of the Owner's System Areas at
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least once a year for the first two (2) years after introduction of the
Subscriber Units, at no charge to the Owner. Such training program will last
for a period of time as reasonably agreed upon by the Parties. The Vendor
anticipates that the Owner may want to influence aspects of the training and
will design the CDMA training program to complement the Owner's marketing and
sales effort. Should the Owner request the Vendor to modify the program in
such a way as to increase the Vendor's actual expenses, the Owner and the
Vendor will negotiate the terms and conditions of implementing the Owner's
request in good faith.
6.2 Sales and Promotional Efforts. (a) In order to ensure that the
-----------------------------
relationship between the Parties contemplated by this Agreement will be
mutually advantageous, and in recognition of the expertise and commitment by
the Parties necessary for the effective marketing and support of the Products,
the Owner agrees to encourage and develop the sales potential for such
Products, to employ competent personnel to meet the demands and needs for
marketing and support of the Products, and to encourage the purchase of
Products by Agents and Purchasers. Nothing contained in this subsection 6.2(a)
will in any way limit or otherwise modify the Vendor's obligations under this
Agreement.
(b) In order to assist the Owner to promote sales of the Products, the
Vendor will furnish the Owner, at the Vendor's sole expense, Vendor catalogs,
point of sales literature, training documentation, printed technical
information, data sheets and other reasonable advertising materials in such
quantities and at such time as may be reasonably agreed to by the Parties.
(c) If the Owner reasonably requires customized Vendor sales and
training literature, the content of the Vendor's appropriate existing
literature will be provided to the Owner, in the Owner's discretion, at the
Vendor's sole expense, in electronic form, or CD-ROM format or artwork to allow
the Owner to produce literature and promotional pieces that are of the Owner's
style and name. The use of any such literature will be subject to the
guidelines established between the Parties pursuant to subsection 8.1(b). In
addition, the Vendor agrees to grant the Owner a world-wide non-exclusive
royalty-free license to reprint any Vendor-owned sales literature in connection
with the Owner's sales, advertising and promotion of the Products. In
addition, the Vendor agrees to grant the Owner a non-exclusive royalty-free
license to distribute within the Territory any of the Vendor's own sales
literature in connection with the Owner's sales, advertising and promotion of
the Products; provided that in the event any such literature is in fact
-------- ----
distributed outside of the Territory by any Person other than the Owner (or by
an agent or affiliate of the Owner acting on the Owner's behalf or upon the
Owner's direction), the Vendor will not, in such event, take any action for
damages of any nature against the Owner under this Agreement or otherwise.
(d) The Vendor and the Owner agree to reasonably cooperate with each
other in the areas of sales and marketing in support of sales of the Vendor's
Products to customers of the Owner's telecommunications services.
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SECTION 7. INTELLECTUAL PROPERTY
7.1 Intellectual Property Rights Infringement. Subject to the
-----------------------------------------
provisions of subsections 7.3 and 7.4, the Vendor agrees that it will defend,
at its own expense, all suits and claims against the Owner, its affiliates,
directors, officers, agents and employees for infringement or violation
(whether by use, sale or otherwise) of any patent, trademark, copyright, trade
secret or other intellectual property rights of any third party (collectively,
"Intellectual Property Rights"), arising under or in connection with Applicable
Law within the Territory covering, or alleged to cover, the Products or any
component thereof for its intended use, in the form furnished or as
subsequently modified by the Vendor. The Vendor agrees that it will pay all
sums, including, without limitation, attorneys' fees and other costs, which, by
final judgment or decree, or in settlement of any suit or claim to which the
Vendor agrees, may be assessed against the Owner on account of such
infringement or violation, provided that:
-------- ----
(i) the Vendor will be given prompt written notice of all claims
of any such infringement or violation and of any suits or
claims brought or threatened against the Owner or the Vendor
of which the Owner has actual knowledge;
(ii) the Vendor is given full authority to assume control of the
defense (including appeals) thereof through its own counsel
at its sole expense and will have the sole right to settle
any suits or claims without the consent of the Owner;
provided that the Vendor has no right and will have
-------- ----
no right to agree to injunctive relief against the Owner;
provided further that the Vendor will notify the
-------- -------
Owner of any proposed settlement prior to the Vendor's
acceptance of such settlement; and
(iii) the Owner will cooperate fully with the Vendor in the defense
of such suit or claims and provide the Vendor, at the
Vendor's expense, such assistance as the Vendor may
reasonably require in connection therewith.
7.2 The Vendor's Obligation to Cure. If in any such suit so
-------------------------------
defended all or any part of the Products or the Software or any component
thereof is held to constitute an infringement or violation of Intellectual
Property Rights and its use is enjoined, or if in respect of any claim of
infringement or violation the Vendor deems it advisable to do so, the Vendor
will, within one hundred twenty (120) days, at its sole cost, expense and
option take one or more of the following actions: (i) procure the right to
continue the use of the same without interruption for the Owner; (ii) replace
the infringing Product, Software or component with a noninfringing product,
noninfringing Software or a non-infringing component, as applicable, that meets
the Specifications; or (iii) modify said Product, Software or any component
thereof so as to be noninfringing, provided that the Product, Software
-------- ----
or any component thereof as modified meets all of the Specifications. In the
event that the Vendor is not able, using reasonable commercial efforts, to cure
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the infringement pursuant to clause (i), (ii) or (iii) in the immediately
preceding sentence, the Vendor will refund to the Owner the full purchase price
paid (less Product Depreciation and less any amounts contributed by the Vendor
to the Co-op Marketing Fund relating to such Products) by the Owner for such
infringing Product, and the Owner will, if requested by the Vendor, use
reasonable efforts to return, at the Vendor's sole cost and expense, any such
infringing Products which are then available to it; provided that the
-------- ----
Vendor will have first refunded any such monies for such infringing
Products to the Owner. The obligations of the Vendor under subsection 7.1 and
the remedies under this subsection 7.2 will be the sole and exclusive
obligations of the Vendor and the sole and exclusive remedies available to the
Owner against the Vendor in the event of a claim against the Owner which is
covered by subsection 7.1 above.
7.3 The Vendor's Obligations. The Vendor's obligations under this
------------------------
Section 7 will not apply to (i) any infringement or violation of Intellectual
Property Rights caused by modification of any Product, Software or any
component thereof by any Person other than the Vendor, its employees or agents
acting on the Vendor's behalf or at its direction, or (ii) any infringement
caused directly by any such Person's use and maintenance of such Product other
than in accordance with the Specifications and the purposes contemplated by
this Agreement for use in the Owner's Nationwide Network, except as expressly
authorized in writing by the Vendor. The Vendor's obligations under subsection
7.1 will not extend to alleged infringements or violations that arise because
the Products provided by the Vendor are used in combination with other products
(other than Infrastructure Equipment) furnished by third parties and where any
such combination was not installed, recommended or approved, expressly in
writing by the Vendor; provided that in no event will the Owner seek
-------- ----
indemnification against the Vendor under this Section 7 for an infringement
claim based upon any such combination of Products with Infrastructure Equipment
to the extent and only to such extent the Owner is covered by an indemnity
under a then existing Procurement and Services Contract. The Vendor's
indemnification obligations specified in this Section 7 will not apply to any
intellectual property infringement caused directly by an Owner Defined Feature.
Nothing contained herein to the contrary will in any way constitute a waiver or
modification of the Vendor's rights to enforce its intellectual property rights
against third parties.
7.4 The Owner's Obligations. The Owner agrees that it will defend,
-----------------------
at its own expense, and indemnify and hold harmless the Vendor, its affiliates,
directors, officers, agents, employees and successors, from and against all
suits and claims for infringements or violations of any patent, trademark,
copyright, trade secret or other intellectual property rights of any third
party (i) caused directly by the Owner's (or by an affiliate's or agent's if
done at the direction of the Owner) modification, use or maintenance of any
Product other than in accordance with the Specifications and the terms of this
Agreement or the Vendor's written authorization, (ii) to the extent that any
Owner Defined Feature directly gives rise to an intellectual property
infringement claim against the Vendor, its affiliates, directors, officers,
agents, employees and successors, or (iii) to the extent, but only to such
extent, that an intellectual property infringement claim involves any markings
or logos specifically requested by the Owner in writing. The
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<PAGE>
Owner agrees that it will pay all sums, including, without limitation,
attorneys' fees, damages, losses, liabilities, expenses and other costs, which,
by final judgment or decree, or in settlement of any suit or claim to which the
Owner agrees, may be assessed against the Vendor on account of such matters,
provided that:
- - - -------- ----
(a) the Owner will be given prompt written notice of all claims of
any such infringement or violation and of any suits or claims brought or
threatened against the Vendor or the Owner of which the Vendor has actual
knowledge;
(b) the Owner is given full authority to assume control of the
defense (including appeals) thereof through its own counsel at its sole
expense and will have the sole right to settle any suits or claims
without the consent of the Vendor, provided that the Owner has no
-------- ----
right to agree to injunctive relief against the Vendor; provided
--------
further that the Owner will notify the Vendor of any proposed
-------
settlement prior to the Owner's acceptance of such settlement; and
(c) the Vendor will cooperate fully with the Owner in the defense
of such suit or claims and provide the Owner, at the Owner's expense,
such assistance as the Owner may reasonably require in connection
therewith, including, but not limited to, implementation of modifications
to Products or other manufacturing fixes pursuant to the provisions of
subsection 3.23.
7.5 Software License. (a) Certain Products sold to the Owner
----------------
hereunder may contain software in executable code form ("Software"), and,
except as otherwise expressly provided herein, all references to "Products" in
this Agreement will be deemed to include the accompanying Software,
provided that nothing herein will be construed as the sale of any
- - - -------- ----
Software to the Owner. The Vendor hereby grants to the Owner a non-exclusive
royalty-free world-wide license to use (for the period of time the Product is
in use in accordance with its intended use), and sublicense to the Owner's or
its Agents' Purchasers or end user customers (in object form only), the
Software solely in each of the Products purchased by the Owner from the Vendor
and for use only in the manner in which such Products are intended to be used
pursuant to the terms of this Agreement, including, without limitation, the
Specifications.
(b) The Owner will not, without the prior written consent of the Vendor:
(i) alter, modify, translate or adapt any Software or create any derivative
works based thereon; (ii) copy any Software; (iii) assign, sublicense or
otherwise transfer the Software in whole or in part, except as permitted
herein; (iv) use the Software except as specifically contemplated in this
Agreement; or (v) disclose the Software to any third party except as required
by Applicable Law or pursuant to an order of a court of competent jurisdiction
or other similar requirement of a Governmental Entity; provided that
-------- ----
the Owner will use reasonable efforts to provide the Vendor prior written
notice prior to any such disclosure. The entire right, title and interest in
the Software will remain with the Vendor, and the Owner will not remove any
copyright notices or other legends from the Software or any accompanying
documentation, without the prior written consent of the Vendor.
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7.6 Sublicense of Software. The Owner may sub-license to Agents,
----------------------
Purchasers or other end-user customers the right to use the Software in object
form only with the use of the Products resold by the Owner to such customers,
and such right will survive termination of this Agreement.
7.7 Ownership of Intellectual Property Rights. (a) Except for
-----------------------------------------
licenses expressly granted under this Agreement, the sale of Products and the
license of Software to the Owner does not convey to the Owner any intellectual
property rights in such Products or Software. Neither the sale of Products,
the license of any Software, nor any provision of this Agreement will be
construed to grant to the Owner, either expressly, by implication or by way of
estoppel, any license under any patents or other intellectual property rights
of the Vendor covering or relating to any other product or invention of the
Vendor or any combination of Product or Software with any other product of the
Vendor. The foregoing notwithstanding, the Parties understand and agree that
from time to time the Owner may devise, develop or otherwise create ideas or
other concepts for services or new products which are patentable or otherwise
capable of receiving protection from duplication. In such event, the Owner
will have the right to patent or otherwise protect such ideas or concepts for
its own use and benefit.
(b) The Owner hereby acknowledges and agrees that nothing herein gives
it any right, title or interest in the Mark and that upon termination of this
Agreement, by expiration or termination in accordance with this Agreement, the
Owner will no longer use the Mark in advertising or in any other manner,
provided that such termination will not affect any use by the Owner's
- - - -------- ----
Agents, Purchasers or other customers of Products sold by the Owner and
provided further that nothing in this subsection 7.7 will prohibit or
- - - -------- -------
otherwise inhibit in any way the sale following such termination by the Owner
of inventory held by it at the time of such termination. The Owner will not
challenge the validity of the Vendor's ownership of or right to use of the Mark
or the Vendor's copyrights, nor otherwise impair the interest of the Vendor in
the Mark or such copyrights. Except as specifically provided for under this
Agreement, the Owner will not use any mark which is confusingly similar to, or
a colorable imitation of the Mark. The Owner will use the Products and
Software furnished by the Vendor solely in accordance with the terms of this
Agreement, and the Owner will not, directly or indirectly, disassemble,
decompile, reverse engineer, or analyze or copy the physical construction of,
any of the Products or Software or any component thereof for any purpose other
than as expressly permitted by the Vendor in writing.
7.8 Intellectual Property. Subject to the Vendor's then existing
---------------------
reasonable marketing policies, if any, with respect to Products sold hereunder,
the Vendor grants the Owner rights to state that it is using the Vendor's
Products in the Owner's marketing, advertising or promotion of the Nationwide
Network, any PCS System, any part thereof or any Product. Subject to the
Vendor's then existing reasonable marketing policies, if any, with respect to
Products sold hereunder the Owner has the right to use for such marketing,
advertising or promotion the Vendor's advertising and marketing materials
(including pamphlets and brochures) provided to the Owner by the Vendor
describing the Nationwide Network, any PCS System, any part thereof or any
Product.
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Other than as set forth in this subsection 7.8 or subsections 3.17 or 6.2, the
Owner has the right to use the trademarks and service marks of the Vendor in
the Owner's marketing, advertising and promotion of the Nationwide Network, any
PCS System, any part thereof or any Product only with the written consent of
the Vendor, such consent not to be unreasonably withheld, subject to and in
accordance with the terms of subsection 8.1.
7.9 Request for Custom Development. (a) From time to time, the
------------------------------
Owner may have requirements for custom Software (including, but not limited to,
development of identified features or modifications to Software or Software
Enhancements) or custom development of Products (including, but not limited to,
development of identified features or modifications to Products or Product
Enhancements) to be provided by the Vendor under this Agreement (the "Custom
Material"). If the Owner has a requirement for Custom Material that is a
specific enhancement or modification of a previously licensed feature or of
previously purchased Products, the Owner will identify to the Vendor in writing
a summary of any such proposed development of Custom Material. Such summary
will provide a description of any proposed Custom Material sufficient to enable
the Vendor to determine the general demand for, and its plans, if any, to
develop the same or similar Products. The Vendor will respond to such summary
within thirty (30) days after receipt thereof and indicate if it has the
ability to fulfill a subsequent Request for Proposal ("RFP") from the Owner for
such development of Custom Material. The Owner acknowledges that the Vendor
shall have no obligation to develop any proprietary materials for Owner other
than as expressly set forth in this subsection 7.9.
(b) If the Vendor decides that it does not have the technical ability or
the capacity to fulfill a RFP for such Custom Material development, the
Vendor's response pursuant to subsection 7.9(a) will (i) provide the Owner an
explanation of why it cannot fulfill such RFP and (ii) use reasonable diligence
to work with the Owner to identify an alternative source for such development
reasonably acceptable to the Owner. In determining whether the Vendor has the
technical ability or the capacity to fulfill the RFP, the Vendor may consider
factors including, but not limited to, (i) the Vendor's likelihood of
recovering the costs for performing such development, (ii) the impact of such
development on the Vendor's actual outstanding commitments to perform work for
other Customers and to pursue strategic development activities; and (iii)
whether the Vendor can perform the work utilizing existing software development
staff without stopping work underway.
7.10 Vendor Response. After reviewing an RFP issued to the Vendor
---------------
from the Owner for such Custom Material, the Vendor will respond to the Owner
within thirty (30) days, unless otherwise agreed by the Parties, stating the
terms and conditions upon which the Vendor would be willing to undertake such
development, including, but not limited to, a listing of specifications, custom
development charges, planned license fees and a proposed delivery schedule.
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SECTION 8. PROPRIETARY INFORMATION
8.1 Public Statements and Advertising. (a) Except to the extent
---------------------------------
specifically set forth herein, the Vendor will not issue any public statement
(or any private statement unless required in the performance of the work
contemplated by this Agreement) relating to or in any way disclosing any aspect
of the work contemplated by this Agreement, the Nationwide Network, any Owner
PCS System or any Product (other than statements regarding the Vendor's
products generally) including the scope, the specific terms of this Agreement,
extent or value of the work contemplated by this Agreement, the Products (other
than statements regarding the Vendor's products generally) and/or the
Nationwide Network or any Owner PCS System. The Owner will not issue any
public statement (or any private statement unless required in the performance
of the work contemplated by this Agreement) relating to or in any way
disclosing any aspect of the work contemplated by this Agreement or any Product
(other than statements regarding the Vendor's products generally), including
the scope, the specific terms of this Agreement, the extent or value of the
work contemplated by this Agreement and/or the Products (other than statements
regarding the Vendor's products generally). The Vendor agrees not to use for
publicity purposes any photographs, drawings and/or materials describing any
PCS System or any part of the Nationwide Network (other than Vendor Products),
without obtaining the prior written consent of the Owner, such consent not to
be unreasonably withheld. The obligations of the Parties under this subsection
8.1 are in addition to their respective obligations pursuant to subsection 8.2
but in no way limit the exceptions to public disclosure specifically referred
to in subsection 8.2(a) clauses (i) through (vii). This subsection 8.1 will in
no way limit (i) either Party from responding to customary press inquiries or
otherwise making public or private statements not otherwise disclosing
Proprietary Information or the specific terms of this Agreement in the normal
course of its business and/or in connection with the obligations hereunder or
(ii) the provision of necessary information to prospective suppliers and the
Vendor's or the Owner's personnel, agents or consultants.
(b) Each Party will submit to the other proposed copies of all
advertising (other than public statements or press releases pursuant to and in
accordance with the last sentence of subsection 8.1(a) above) wherein the name,
trademark or service mark of the other Party or its Affiliates or affiliates is
mentioned; and neither Party will publish or use such advertising without the
other Party's prior written approval. Such approval will be granted as
promptly as possible and will not be unreasonably withheld. The Parties
acknowledge that the obtaining of prior written approval for each such use
pursuant to this subsection 8.1(b) may be an administrative burden. From time
to time at the request of either Party, the Owner and the Vendor will establish
mutually acceptable guidelines that will constitute pre-authorization for the
uses specified therein. Such guidelines will be subject to change from time to
time at the reasonable request of either Party subject to the mutual agreement
of the Parties.
8.2 Confidentiality. (a) All information, including without
---------------
limitation all oral and written information (including, but not limited to,
determinations or reports by arbitrators pursuant to the terms of this
Agreement), disclosed to the other Party is
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deemed to be confidential, restricted and proprietary to the disclosing Party
(hereinafter referred to as "Proprietary Information"). Each Party agrees to
use the Proprietary Information received from the other Party only for the
purpose of this Agreement. Except as specified in this Agreement, no other
rights, and particularly licenses, to trademarks, inventions, copyrights,
patents, or any other intellectual property rights are implied or granted under
this Agreement or by the conveying of Proprietary Information between the
Parties. Proprietary Information supplied is not to be reproduced in any form
except as required to accomplish the intent of, and in accordance with the
terms of, this Agreement. The receiving Party must provide the same care to
avoid disclosure or unauthorized use of Proprietary Information as it provides
to protect its own similar proprietary information but in no event will the
receiving Party fail to use reasonable care under the circumstances to avoid
disclosure or unauthorized use of Proprietary Information. All Proprietary
Information must be retained by the receiving Party in a secure place with
access limited to only such of the receiving Party's employees, subcontractors,
suppliers or agents who need to know such information for purposes of this
Agreement and to such third parties as the disclosing Party has consented to by
prior written approval. All Proprietary Information, unless otherwise
specified in writing (i) remains the property of the disclosing Party, (ii)
must be used by the receiving Party only for the purpose for which it was
intended, and (iii) such Proprietary Information, including all copies of such
information, must be returned to the disclosing Party or destroyed after the
receiving Party's need for it has expired or upon request of the disclosing
Party, and, in any event, upon termination of this Agreement. At the request
of the disclosing Party, the receiving Party will furnish a certificate of an
officer of the receiving Party certifying that Proprietary Information not
returned to the disclosing Party has been destroyed. For the purposes hereof,
Proprietary Information does not include information that:
(i) is published or is otherwise in the public domain through no
fault of the receiving Party at the time of any claimed
disclosure or unauthorized use by the receiving Party;
(ii) prior to disclosure pursuant to this Agreement is properly
within the legitimate possession of the receiving Party as
evidenced by reasonable documentation to the extent
applicable;
(iii) subsequent to disclosure pursuant to this Agreement is
lawfully received from a third party having rights in the
information without restriction of the third party's right to
disseminate the information and without notice of any
restriction against its further disclosure;
(iv) is independently developed by the receiving Party or is
otherwise received through parties who have not had, either
directly or indirectly, access to or knowledge of such
Proprietary Information;
(v) is transmitted to the receiving Party after the disclosing
Party has received written notice from the receiving Party,
after termination
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or expiration of this Agreement, that it does not desire to
receive further Proprietary Information;
(vi) is obligated to be produced under order of a court of
competent jurisdiction or other similar requirement of a
Governmental Entity, so long as the Party required to
disclose the information provides the other Party with prior
notice of such order or requirement and its cooperation to
the extent reasonable in preserving its confidentiality; or
(vii) the disclosing Party agrees in writing is free of such
restrictions.
(b) Because damages may be difficult to ascertain, the Parties agree
that, without limiting any other rights and remedies specified herein, an
injunction may be sought against the Party who has breached or threatened to
breach this subsection 8.2. Each Party represents and warrants that it has the
right to disclose all Proprietary Information which it has disclosed to the
other Party pursuant to this Agreement, and each Party agrees to indemnify and
hold harmless the other from all claims by a third party related to the
wrongful disclosure of such third party's proprietary information. Otherwise,
neither Party makes any representation or warranty, express or implied, with
respect to any Proprietary Information.
SECTION 9. INDEMNIFICATION/LIMITATION OF LIABILITY
9.1 Vendor Indemnity. (a) The Vendor will indemnify and hold the
----------------
Owner and its affiliates, partners, directors, officers, agents and employees
(the "Indemnitees") harmless from and against all third party claims, demands,
suits, proceedings, damages, costs, expenses, liabilities, including, without
limitation, reasonable legal fees (collectively, "Liabilities") brought against
or incurred by any Indemnitee for (i) injury to persons (including physical or
mental injury, libel, slander and death), or (ii) loss or damage to any
property, or (iii) any other liability, in each instance resulting from the
negligence, willful misconduct or gross negligence, of the Vendor in the
performance of this Agreement. If the Vendor and the Owner jointly cause such
Liabilities, the Parties will share the liability in proportion to their
respective degree of causal responsibility.
(b) The Vendor's obligation to indemnify under subsection 9.1(a) with
respect to any Liability will not arise unless the Indemnitee (i) notifies the
Vendor in writing of such potential Liability within a reasonable time after
the Indemnitee is aware of such potential Liability; provided that the
-------- ----
lack of providing such notice will not affect the Vendor's obligation hereunder
(A) if the Vendor otherwise has actual knowledge of such Liability and (B)
unless such lack of notice is the cause of the Vendor being unable to
adequately and reasonably defend such Liability, (ii) gives the Vendor the
opportunity and authority to assume the defense of and settle such Liability,
subject to the provisions of the next two sentences, and (iii) furnishes to the
Vendor all such reasonable information and assistance available to the Owner
(or other Indemnities) as may be reasonably requested by the Vendor and
necessary for the defense against such Liability.
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The Vendor will assume on behalf of the Indemnitee and conduct in good faith
the defense of such Liability with counsel (including in-house counsel)
reasonably satisfactory to the Indemnitee; provided that the Indemnitee
-------- ----
will have the right to be represented therein by advisory counsel of its own
selection and at its own expense. If the Indemnitee will have reasonably
concluded that there may be legal defenses available to it which are different
from or additional to, or inconsistent with, those available to the Vendor, the
Indemnitee will have the right to select separate counsel reasonably
satisfactory to the Vendor to participate in the defense of such action on its
own behalf at such Indemnitee's expense. In the event the Vendor fails, after
written demand by such Indemnitee, to defend any Liability as to which an
indemnity should be provided under subsection 9.1(a), then the Indemnitee may,
at the Vendor's expense, contest or settle such matter without the Vendor's
consent. All payments, losses, damages and reasonable costs and expenses
incurred in connection with such contest, payment or settlement controlled by
such Indemnitee will be to the Vendor's account. The Vendor will not settle
any such Liability without the consent of the Indemnitee, which consent will
not be unreasonably withheld. Any such Indemnitee will exercise its best
efforts to respond to any request for a consent prior to the expiration of any
such settlement offer. This indemnity is in lieu of all other obligations of
the Vendor, expressed or implied, in law or in equity, to indemnify the
Indemnitees (except those other indemnity obligations expressly set forth in
this Agreement).
(c) EXCEPT AS EXPRESSLY SET FORTH IN SUBSECTIONS 3.7 AND 3.8 OF THIS
AGREEMENT, THE VENDOR MAKES NO WARRANTIES AS TO PRODUCTS, SOFTWARE, TECHNOLOGY,
MATERIALS, SERVICES, INFORMATION OR OTHER ITEMS IT FURNISHES TO THE OWNER,
AGENTS OR PURCHASERS, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OR THAT
SUCH ITEMS ARE FREE FROM THE RIGHTFUL CLAIM OF ANY THIRD PARTY, BY WAY OF
INFRINGEMENT OR THE LIKE.
(d) EXCEPT AS PROVIDED IN SUBSECTIONS 3.2(c), 4.2, 5.2(c), 5.2(d), 7.1,
7.4, 9.2 AND 9.4 HEREOF, NEITHER PARTY WILL BE LIABLE TO THE OTHER (ITS AGENTS
OR, IN THE CASE OF THE VENDOR, THE PURCHASERS) FOR ANY INCIDENTAL,
CONSEQUENTIAL OR SPECIAL DAMAGES OR ANY OTHER INDIRECT LOSSES OR DAMAGES
ARISING OUT OF THIS AGREEMENT, THE DELIVERY OR THE FAILURE TO DELIVER ANY OF
THE PRODUCTS OR ANY COMPONENT THEREOF, ANY BREACH OF THIS AGREEMENT, THE
FAILURE OF THE PRODUCTS TO PERFORM AS WARRANTED OR OTHERWISE OR ANY RESULTING
OBLIGATION, OR THE USE OR INABILITY TO USE OF ANY PRODUCTS DELIVERED PURSUANT
TO THIS AGREEMENT, WHETHER IN AN ACTION FOR OR ARISING OUT OF BREACH OF
CONTRACT, FOR TORT, OR ANY OTHER CAUSE OF ACTION.
EXCEPT AS PROVIDED IN SUBSECTIONS 3.2(c), 4.2, 5.2(c), 5.2(d), 7.1, 7.4,
9.2 AND 9.4 HEREOF, IN NO EVENT WILL EITHER PARTY BE LIABLE TO
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THE OTHER (ITS AGENTS OR, IN THE CASE OF THE VENDOR, THE PURCHASERS) FOR ANY
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGE OR LOSS OF ANY NATURE
WHICH MAY ARISE IN CONNECTION WITH THE USE, DISTRIBUTION, INSTALLATION,
REMOVAL, MAINTENANCE OR SUPPORT OF PRODUCTS AND/OR SOFTWARE (SEPARATELY OR IN
COMBINATION WITH EACH OTHER OR WITH OTHER PRODUCTS AND/OR SOFTWARE NOT PROVIDED
BY VENDOR) BY OWNER, AGENTS AND ANY PURCHASER PURSUANT TO OR UNDER THIS
AGREEMENT, REGARDLESS OF WHETHER SUCH CLAIMS ARE BASED OR REMEDIES ARE SOUGHT
IN WARRANTY, CONTRACT, NEGLIGENCE, STRICT LIABILITY, TORT, PRODUCTS LIABILITY
OR OTHERWISE, EVEN IF THE PARTY SOUGHT TO BE HELD LIABLE HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGE OR LOSS.
(e) IN NO EVENT WILL THE TOTAL LIABILITY OF THE VENDOR UNDER THIS
AGREEMENT, WHETHER SUCH LIABILITY BE IN CONTRACT, STRICT LIABILITY, PRODUCTS
LIABILITY OR TORT (INCLUDING NEGLIGENCE), EXCEED THE GREATER OF (x) [ ] AND
[ ] PROVIDED THAT ANY SUCH PURCHASE ORDERS ARE IN FACT PAID FOR PRIOR TO
-------- ----
OR OFFSET AGAINST THE PAYMENT OF ANY AMOUNTS OWED BY THE VENDOR TO THE OWNER
PURSUANT TO THE VENDOR INDEMNITIES UNDER THIS AGREEMENT. NOTWITHSTANDING
ANYTHING TO THE CONTRARY SET FORTH IN THIS AGREEMENT, IN THE EVENT THE OWNER
EXERCISES ITS RIGHTS TO PURCHASE REPLACEMENT PRODUCTS IN CONNECTION WITH THE
CANCELLATION OF A PURCHASE ORDER, THE TERMINATION OF THIS AGREEMENT OR THE
REPURCHASE OR RECALL OF ANY PRODUCTS (WHETHER PURSUANT TO SUBSECTION 3.10(b),
3.22(b), 4.2(e), 10.2, 10.3, 10.6, 11.10 OF OTHERWISE), THE AMOUNT THAT THE
VENDOR SHALL BE LIABLE TO THE OWNER WITH RESPECT TO THOSE ADDITIONAL EXPENSES
AND COSTS INCURRED BY THE OWNER (IN CONNECTION WITH ACQUIRING SUCH REPLACEMENT
PRODUCTS) IN EXCESS OF ANY EXPENSES AND COSTS THE OWNER WOULD HAVE OTHERWISE
INCURRED UNDER THIS AGREEMENT IN PURCHASING THE SUBJECT PRODUCTS, SHALL NOT
EXCEED (I) IF THE SUBJECT PRODUCTS TO BE REPLACED ARE PRODUCTS THAT CONSTITUTE
PART OF THE FIRST [ ] OF THE TOTAL MINIMUM COMMITMENT, [ ] OF THE PURCHASE
PRICE OF THE SUBJECT PRODUCTS SO REPLACED, AND (II) WITH RESPECT TO ALL OTHER
PRODUCTS, [ ] OF THE PURCHASE PRICE OF THE SUBJECT PRODUCTS SO REPLACED.
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(f) IN NO EVENT WILL THE TOTAL LIABILITY OF THE OWNER UNDER THIS
AGREEMENT, WHETHER SUCH LIABILITY BE IN CONTRACT, STRICT LIABILITY, PRODUCTS
LIABILITY OR TORT (INCLUDING NEGLIGENCE), EXCEED THE GREATER OF (x) [ ] AND
[ ].
9.2 Vendor Damages for Fraud. The Vendor will be responsible for
------------------------
all actual damages incurred by the Owner as a result of any damage or injury
caused by or resulting from the fraud of the Vendor; provided, however,
-------- -------
if the senior management of the Vendor knew or should have known of such fraud,
then the Vendor will be responsible for all damages (including, but not limited
to, actual, consequential, incidental and special) so incurred by the Owner for
such fraud.
9.3 Owner Indemnity. (a) The Owner will indemnify and hold the
---------------
Vendor and its affiliates, partners, directors, officers, agents and employees
(the "Vendor Indemnitees") harmless from and against all third party claims,
demands, suits, proceedings, damages, costs, expenses, liabilities, including,
without limitation, reasonable legal fees (collectively, "Vendor Liabilities")
brought against or incurred by any Vendor Indemnitee for (i) injury to persons
(including physical or mental injury, libel, slander and death), or (ii) loss
or damage to any property, or (iii) any other liability, in each instance
resulting from the negligence, willful misconduct or gross negligence, of the
Owner in the performance of this Agreement. If the Vendor and the Owner
jointly cause such Vendor Liabilities, the Parties will share the liability in
proportion to their respective degree of causal responsibility.
(b) The Owner's obligation to indemnify under subsection 9.3(a) with
respect to any Vendor Liability will not arise unless the Vendor Indemnitee (i)
notifies the Owner in writing of such potential Vendor Liability within a
reasonable time after the Vendor Indemnitee is aware of such potential Vendor
Liability; provided that the lack of providing such notice will not
-------- ----
affect the Owner's obligation hereunder (A) if the Owner otherwise has actual
knowledge of such Vendor Liability and (B) unless such lack of notice is the
cause of the Owner being unable to adequately and reasonably defend such Vendor
Liability, (ii) gives the Owner the opportunity and authority to assume the
defense of and settle such Vendor Liability, subject to the provisions of the
next two sentences, and (iii) furnishes to the Owner all such reasonable
information and assistance available to the Vendor (or other Vendor
Indemnitees) as may be reasonably requested by the Owner and necessary for the
defense against such Vendor Liability. The Owner will assume on behalf of the
Vendor Indemnitee and conduct in good faith the defense of such Liability with
counsel (including in-house counsel) reasonably satisfactory to the Vendor
Indemnitee; provided that the Vendor Indemnitee will have
-------- ----
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the right to be represented therein by advisory counsel of its own selection
and at its own expense. If the Vendor Indemnitee will have reasonably
concluded that there may be legal defenses available to it which are different
from or additional to, or inconsistent with, those available to the Owner, the
Vendor Indemnitee will have the right to select separate counsel reasonably
satisfactory to the Owner to participate in the defense of such action on its
own behalf at such Vendor Indemnitee's expense. In the event the Owner fails,
after written demand by such Vendor Indemnitee, to defend any Vendor Liability
as to which an indemnity should be provided under subsection 9.3(a), then the
Vendor Indemnitee may, at the Owner's expense, contest or settle such matter
without the Owner's consent. All payments, losses, damages and reasonable
costs and expenses incurred in connection with such contest, payment or
settlement controlled by such Vendor Indemnitee will be to the Owner's account.
The Owner will not settle any such Vendor Liability without the consent of the
Vendor Indemnitee, which consent will not be unreasonably withheld.
Furthermore, the Owner will indemnify and hold the Vendor Indemnitees harmless
from and against all Vendor Liabilities brought against or incurred by any
Vendor Indemnitee for (i) injury to persons (including physical or mental
injury, libel, slander and death), or (ii) loss or damage to any property, or
(iii) any other liability resulting directly and solely from the unauthorized
modification by the Owner of the Products or by the Owner's use of any Product
in combination with any other Subscriber Unit accessory not furnished and/or
authorized in writing for such use by the Vendor. This indemnity is in lieu of
all other obligations of the Owner, expressed or implied, in law or in equity,
to indemnify the Vendor Indemnitees (except those other indemnity obligations
expressly set forth in this Agreement).
9.4 Owner Damages for Fraud. The Owner will be responsible for
-----------------------
actual damages incurred by the Vendor as a result of any damage or injury
caused by or resulting from the fraud of the Owner; provided, however,
-------- -------
if the senior management of the Owner knew or should have known of such fraud,
then the Owner will be responsible for all damages (including, but not limited
to, actual, consequential, incidental and special) so incurred by the Vendor
for such fraud.
SECTION 10. TERMINATION
10.1 Termination. This Agreement will terminate on the End Date,
-----------
unless extended by mutual agreement of the Parties hereto, in accordance with
Section 2, or unless sooner terminated as provided herein. Any such
termination in accordance with the terms of this Section 10 will in no way
terminate, modify, amend or otherwise affect the Vendor's warranties hereunder
(or the enforceability thereof) in connection with Products sold pursuant to
the terms of this Agreement.
10.2 Termination For Cause. The Owner has the right to terminate
---------------------
this Agreement in its entirety without any penalty or payment obligation upon
the occurrence of any Vendor event of default (each a "Vendor Event of
Default") as set forth below. The occurrence of any of the following will
constitute a Vendor Event of Default:
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(a) the Vendor (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed
within sixty (60) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it, (iii) is adjudged
bankrupt, or (iv) makes a general assignment for the benefit of its creditors,
or if a receiver is appointed for all or a substantial portion of its assets
and is not discharged within sixty (60) days after his appointment; or
(b) the Vendor commences any proceeding for relief from its creditors in
any court under any state insolvency statutes; or
(c) the Vendor violates any Applicable Law and the effect of such
violation materially impairs the Vendor's ability to perform its obligation
under this Agreement; or
(d) the Vendor fails to perform this Agreement in any material respect
and thereby prejudices in any way deemed material by the parties providing
financing in connection with the build-out of the Nationwide Network, in such
parties' reasonable opinion, the Owner's efforts to obtain financing for the
Nationwide Network; or
(e) the Vendor fails to comply with subsection 11.18; or
(f) the Vendor breaches any other provision of this Agreement and the
effect of such breach materially impairs the Vendor's ability to perform its
obligations under this Agreement.
10.3 Remedies. If any of the Vendor Events of Default exists, the
--------
Owner may, without prejudice to any other rights or remedies of the Owner in
this Agreement or at law or in equity (except as such legal or equitable
remedies may be limited by this Agreement), terminate this Agreement upon
written notice to the Vendor; provided, however, that the Owner will
-------- -------
have first provided to the Vendor the following periods of notice and
opportunity to cure:
(i) in the case of an Event of Default specified in subsections
10.2(a) and 10.2(b), no notice or opportunity to cure will be required
from the Owner; and
(ii) in the case of any other Event of Default by the Vendor, the
Owner will have provided thirty (30) days' prior written notice, and the
Vendor will have failed to diligently pursue such cure and remedy the
breach entirely by the end of said thirty (30) day notice period.
10.4 Discontinuance of Supply. Upon such notification of
------------------------
termination, the Vendor must immediately discontinue all supply of Products.
10.5 Payments. When the Owner terminates this Agreement for cause
--------
pursuant to subsection 10.2, notwithstanding anything herein to the contrary,
the Owner may
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withhold payments in amounts that it reasonably believes are in dispute, if
any, at such time to the Vendor for the purposes of offset of amounts owed to
the Owner pursuant to the terms of this Agreement, until such time as the exact
amount of damages due to the Owner from the Vendor is fully determined;
provided that in the event that any such disputed amounts are
----
determined to in fact be owed by the Owner to the Vendor, such amounts will be
increased by the late payment penalties, if any, applicable thereto pursuant to
subsection 3.4.
10.6 Costs. In the event of a termination due to a Vendor Event of
-----
Default, the Owner will be entitled to receive from the Vendor the following:
(i) with respect to those costs and expenses incurred by the Owner in procuring
substitute subscriber units (and their included accessories) for the Products
not delivered by the Vendor, only those reasonable direct out of pocket costs
and expenses incurred by the Owner in reasonably procuring substitute
subscriber units (and their included accessories) having the most comparable
features and functionality available at such time, in excess of the costs and
expenses the Owner would have otherwise incurred hereunder in purchasing such
undelivered Products; and (ii) with respect to any other costs and expenses
incurred by the Owner, only those reasonable direct out-of-pocket costs and
expenses incurred by the Owner that the Owner would not otherwise have incurred
under this Agreement which arise as a result of the Vendor's failure to perform
any other obligation under this Agreement. For the purpose of clause "(i)" of
this subsection 10.6, the Owner shall be entitled to recover only those
reasonable direct out of pocket costs and expenses pertaining to procuring that
number of substitute subscriber units (and their included accessories) equal to
(x) the amount of the Total Minimum Commitment (as such amount may be increased
or decreased from time to time pursuant to the terms of this Agreement), minus
(y) that number of Subscriber Units purchased by the Owner as of the date of
any such termination. The amount to be paid by the Vendor pursuant to this
subsection 10.6 will survive termination of this Agreement and will be subject
to the limitations of liability set forth in this Agreement.
10.7 Continuing Obligations. Termination of this Agreement for any
----------------------
reason (i) will not relieve either Party of its obligations with respect to the
confidentiality of the Proprietary Information as set forth in subsection 8.2,
(ii) will not relieve either Party of any obligation which applies to it and
which expressly or by implication survives termination, and (iii) except as
otherwise provided in any provision of this Agreement expressly limiting the
liability of either Party, will not relieve either Party of any obligations or
liabilities for loss or damage to the other Party arising out of or caused by
acts or omissions of such Party prior to the effectiveness of such termination.
10.8 The Vendor's Right to Terminate. The Vendor has the right to
-------------------------------
terminate this Agreement in its entirety without any penalty or payment
obligations, upon the occurrence of any of the following (each an "Owner Event
of Default"):
(a) the Owner (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed
within sixty (60) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed
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against it, (iii) is adjudged bankrupt, or (iv) makes a general assignment for
the benefit of its creditors, or if a receiver is appointed for all or a
substantial portion of its assets and is not discharged within sixty (60) days
after his appointment; or
(b) the Owner commences any proceeding for relief from its creditors in
any court under any state insolvency statutes; or
(c) the Owner fails to (i) make payments of undisputed amounts
(considered separately and not in aggregate) of less than five million
($5,000,000) due to the Vendor pursuant to the terms of this Agreement,
provided that such failure has continued for at least fifteen (15) days
- - - -------- ----
after the Vendor has provided the Owner with written notice of its intent to so
terminate on account of such overdue amount, or (ii) make payments of
undisputed amounts in excess of five million ($5,000,000) due to the Vendor
pursuant to the terms of this Agreement, provided that such failure has
-------- ----
continued for at least thirty (30) days after the Vendor has provided the Owner
with written notice of its intent to so terminate on account of such overdue
amount; and provided further that if the Vendor notice provided to the
-------- -------
Owner pursuant to and in accordance with either clause (i) or (ii) is the first
such notice provided to the Owner by the Vendor in any rolling twelve (12)
month period, the Owner will have an additional thirty (30) days to cure any
such default prior to the Vendor having the right to terminate this Agreement
pursuant to this subsection 10.8(c); or
(d) the Owner repeatedly and materially breaches subsection 8.2
notwithstanding the fact that the Vendor will have provided the Owner with
prior written notice describing the alleged material breaches and will have
given the Owner a reasonable time (not less than thirty (30) days) to cure any
such breaches; or
(e) the Owner fails to comply with subsection 11.19; or
(f) the Owner violates any Applicable Laws, and the effect of such
violation materially impairs the Owner's ability to perform its obligations
under this Agreement; or
(g) the Owner fails to purchase in any of the respective Annual Supply
Periods or the Stub Period, as applicable, the First Annual Minimum Commitment,
the Second Annual Minimum Commitment, the Third Annual Minimum Commitment or
the residual amount to be purchased in the Stub Period, as applicable and as
such Annual Minimum Commitments may reduced from time to time in accordance
with the terms of this Agreement; or
(h) the Owner fails to issue Purchase Orders for those amounts of
Products which are considered to be under firm Purchase Orders pursuant to any
Forecast and in accordance with the terms of this Agreement; or
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(i) the Owner fails to pay when due more than ten (10) undisputed
payment amounts in aggregate value in excess of seven million five hundred
thousand dollars ($7,500,000) in any given consecutive nine (9) month period;
or
(j) the Owner otherwise materially breaches any provision of this
Agreement which such material breach it has not cured within a reasonable time
after notification by the Vendor thereof.
10.9 Vendor Remedies. If any of the Owner Events of Default exist,
---------------
the Vendor may, without prejudice to any rights or remedies of the Vendor in
this Agreement or at law or in equity (except as such legal or equitable
remedies may be limited by this Agreement), terminate this Agreement (i)
immediately upon the occurrence of any Owner Event of Default specified in
clauses (a), (b), (c), (d), (i) and (j) and (ii) after thirty (30) days prior
written notice upon the occurrence of any other Owner Event of Default. All
amounts owed by the Owner to the Vendor prior to any such termination shall be
payable immediately upon termination. Notwithstanding anything set forth in
this Agreement, immediately upon the occurrence of any Owner Event of Default
the Vendor shall have the right, without any penalty or payment obligations, to
suspend Vendor's performance with respect to manufacturing Products, to stop
shipment of all Products subject to Purchase Orders, and to recall, if
possible, all Products subject to unfulfilled or undelivered Purchase Orders.
10.10 Special Termination Events. (a) In the event that financing
--------------------------
for the Owner's build-out of the initial phase of the Nationwide Network has
not been finalized with the Contract Vendors on terms and conditions reasonably
satisfactory to the Owner, on or before July 29, 1996, the Owner will have the
right, but not the obligation, to terminate this Agreement in its entirety
without charge or penalty of any kind; provided that the Owner will
-------- ----
only have this right if it has terminated or materially amended (as a result of
a failure to achieve adequate financing) at least one of its then existing
Procurement and Services Contracts; and provided further that in the
-------- -------
event the Owner elects to exercise its rights under this subsection 10.10 and
any Procurement and Services Contract then remains outstanding and in force,
the Vendor and the Owner will negotiate in good faith to make any equitable
modifications in Annual Minimum Commitments and corresponding pricing prior to
and in lieu of any such termination. The "Financing Interim Period" means the
period from the Effective Date to July 29, 1996. In the event of a termination
of this Agreement pursuant to this subsection 10.10, the Owner will remain
liable for amounts due to the Vendor for (i) amounts owed by the Owner to the
Vendor prior to such termination, (ii) all Products which are forecasted in the
first five months of the then current Forecast Period for the then current
Forecast (up to the full amount of such forecasted Products) which are
delivered by the Vendor pursuant to the specific terms of this Agreement to the
FOB point, the Owner and/or any of its facilities or sites in accordance with
the terms of this Agreement and (iii) all such other amounts for customization,
specific engineering or change orders ordered by the Owner prior to such
termination. Any amounts owed by the Owner for Products delivered by the
Vendor during such Financing Interim Period not otherwise invoiced to the Owner
by the Vendor prior to the termination of such Financing Interim
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Period, will be invoiced to the Owner by the Vendor within thirty (30) days
(but failure to so invoice will not excuse the Owner's obligation to otherwise
pay the Vendor pursuant to the terms of this subsection 10.10) of such
termination pursuant to this subsection 10.10 and will be payable by the Owner
within thirty (30) days of receipt of such invoice. Except as specifically set
forth in clause (i), clause (ii) and/or clause (iii) above, in this subsection
10.10, in no event will the Owner be liable to the Vendor due to a termination
of this Agreement pursuant to this subsection 10.10 for any of the Vendor's
direct or indirect costs or expenses incurred in connection with any supplies
or equipment ordered by the Vendor or agreements entered into by the Vendor in
order to enable it to fulfill its obligations hereunder or in connection with
the establishment of and/or upgrade to its manufacturing, personnel,
engineering, administrative or other capacities and/or resources in
contemplation of or pursuant to its performance in accordance with the terms of
this Agreement.
(b) If, prior to May 2, 1997 the Vendor, for any reason whatsoever, fails
or is otherwise unable to commence delivery to the Owner of Subscriber Units
with an average of four (4) hours of continuous talk time based on thirty five
percent (35%) voice activity, ten (10) dBm transmit power at the antenna,and a
standard battery pack, the Owner will be able to, in its sole discretion, on
May 2, 1997 or at any time within the ten (10) Business Day period thereafter,
terminate this Agreement in its entirety without any payment or penalty of
either Party whatsoever; provided that within
-------- ----
thirty (30) days of such termination each Party will pay any and all monies then
actually outstanding, owed, accrued or otherwise due to the other Party up to
the point of such termination including payment for any Purchase Orders or
Excess Purchase Orders from the Owner to the Vendor outstanding at the time of
such termination; and provided further the Owner will still be committed to
-------- -------
submit Purchase Orders and pay for all Products delivered subject to the most
recent then outstanding Forecasts for May, June and July 1997 pursuant to the
terms of this Agreement.
SECTION 11. GENERAL PROVISIONS
11.1 Assignment. Except as otherwise permitted herein, neither this
----------
Agreement nor any portion hereof may be assigned by either Party without the
express prior written consent of the other Party provided that such
-------- ----
consent will not otherwise be unreasonably withheld. The Owner may, without
the consent of the Vendor, (i) assign in whole, but not in part, its rights
hereunder to any direct or indirect wholly owned operating subsidiary of the
Owner or of Sprint Spectrum Holding Company, L.P., a Delaware limited
partnership (provided that any such assignment to any such subsidiary
-------- ----
will not be deemed a release of the Owner's obligations hereunder unless the
Vendor will have given prior written consent to any such release) and/or (ii)
collaterally assign its rights hereunder (including, but not limited to, all
licenses with respect to the Software) to the parties providing financing for
any part of the Nationwide Network under a collateral trust for the benefit of
the Vendor and one or more other entities providing financing for any part of
the Nationwide Network or similar arrangement for the benefit of the entities
providing for the financing for any part of the Nationwide Network, in either
case, which collateral trust or similar arrangement, as the case may be, is
reasonably
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acceptable to the parties providing financing for any part of the Nationwide
Network in accordance with the terms of the financing documents. If requested
by the Owner, the Vendor, will within seven (7) days of such request, provide a
written consent to any such assignment; provided that such consent will
-------- ----
permit reassignment if the financing parties exercise their remedies under the
documents for such financing subject to reasonable standards as to (i) the
creditworthiness of the assignee and (ii) the fact that the assignee is not at
such time a direct competitor of the Vendor or of its affiliates. The
foregoing rights and obligations are in addition to those set forth in
subsection 11.2. Any attempted assignment in violation of the terms of this
Agreement will be null and void.
11.2 Successors and Assigns. This Agreement will bind and inure to
----------------------
the benefit of the Parties to this Agreement, their successors and permitted
assigns.
11.3 Survival of Obligations. The Parties' rights and obligations
-----------------------
which, by their nature, would continue beyond the termination, cancellation, or
expiration of this Agreement, including but not limited to those rights and
obligations of the Parties set forth in subsections 3.7, 3.8, 10.6 and 10.9 and
Sections 7, 8 and 9, will survive such termination, cancellation or expiration.
11.4 Severability. If any provision in this Agreement will be held
------------
to be invalid or unenforceable, the remaining portions will remain in effect.
In the event such invalid or unenforceable provision is considered an essential
element of this Agreement, the Parties will promptly negotiate a replacement
provision.
11.5 Non-waiver. No waiver of the terms and conditions of this
----------
Agreement, or the failure of either party strictly to enforce any such term or
condition on one or more occasions will be construed as a waiver of the same or
of any other term or condition of this Agreement on any other occasion.
11.6 Compliance with United States Regulations.Nothing contained in
-----------------------------------------
this Agreement will require or permit the Owner or the Vendor to do any act
inconsistent with the requirements of (a) the regulations of the United States
Department of Commerce, or (b) the foreign assets controls or foreign
transactions controls regulations of the United States Treasury Department, or
(c) any Applicable Law, regulation or executive order as the same may be in
effect in the Territory from time to time.
11.7 Notices. All notices, requests, demands, consents, agreements
-------
and other communications required or permitted to be given under this Agreement
will be in writing and will be mailed to the party to whom notice is to be
given, by facsimile, and confirmed by first class mail, postage prepaid, and
properly addressed as follows (in which case such notice will be deemed to have
been duly given on the day the notice is first received by the party):
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SPRINT SPECTRUM L.P.
4717 Grand Avenue
Kansas City, Missouri 64112
Attention: Vice President, Business Development
Facsimile No.: (816) 559-6040
Telephone No.: (816) 559-6000
with a copy to:
Joe Gensheimer
General Counsel
Sprint Spectrum L.P.
4717 Grand Avenue
Kansas City, Missouri 64112
Facsimile No.: (816) 559-2591
Telephone No.: (816) 559-2500
QUALCOMM Personal Electronics
10300 Campus Point Drive
San Diego, CA 92121-1579
Facsimile No.: (619) 658-1564
Telephone No.: (619) 658-2626
Attn.:Director of Strategic Accounts, Sony/QUALCOMM CDMA Marketing
with a copy to:
Steven Altman
Secretary
6455 Lusk Boulevard
San Diego, California 92121-2779
Facsimile No.: (619) 658-2500
Telephone No.: (619) 658-4811
QUALCOMM Incorporated
6455 Lusk Boulevard
San Diego, CA 92121-2779
Facsimile No.: (619) 658-1564
Telephone No.: (619) 658-2933
Attn.:Vice President and General Manager, Subscriber Products Division
with a copy to:
SONY ELECTRONICS INC.
16450 West Bernardo Drive
San Diego, California 92127
Facsimile No.: (619) 673-3232
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Telephone No.: (619) 673-3219
Attn.:President, Wireless Telecommunications Co.
The above addresses can be changed by providing notice to the other
Party in accordance with this subsection 11.7.
11.8 Dispute Resolution. (a) Subject to subsections 10.2, 10.3,
------------------
10.8, 10.9 and 11.10, in the event any controversy, claim, dispute, difference
or misunderstanding arises out of or relates to this Agreement, any term or
condition hereof, any of the work to be performed hereunder or in connection
herewith, the respective System Managers of the Owner and the Vendor will meet
and negotiate in good faith in an attempt to amicably resolve such controversy,
claim, dispute, difference or misunderstanding in writing. Such System
Managers must meet for this purpose within ten (10) Business Days, or such
other time period mutually agreed to by the Parties, after such controversy,
claim, dispute, difference or misunderstanding arises. If the Parties are
unable to resolve the controversy, claim, dispute, difference or
misunderstanding through good faith negotiations within such ten (10) Business
Day period, each Party will, within five (5) Business Days after the expiration
of such ten (10) Business Day period, prepare a written position statement
which summarizes the unresolved issues and such Party's proposed resolution.
Such position statement must be delivered by the Vendor to the Owner's Vice
President of Engineering or Operations or then equivalent officer and by the
Owner to the Vendor's corresponding officer or representative for resolution
within (5) Business Days, or such other time period mutually agreed to by the
Parties.
(b) If the Parties continue to be unable to resolve the controversy,
claim, dispute, difference or misunderstanding, either Party may initiate
arbitration in accordance with the provisions of subsection 11.9; provided,
--------
however, that with respect to any controversy, claim, dispute, difference
- - - -------
or misunderstanding (other than an undisputed claim with respect to the payment
of money) arising out of or relating to this Agreement by which either Party
seeks to obtain from the other monetary damages in excess of one million dollars
($1,000,000), either Party, in such case, may commence an action in any state or
federal court in accordance
with subsection 11.12 to resolve such matter in lieu of proceeding with an
arbitration pursuant to and in accordance with subsection 11.9. The arbitrators
hired or otherwise chosen pursuant to and in accordance with the terms of this
Agreement will determine issues of arbitrability pursuant to the terms of this
Agreement but may not in any way limit, expand or otherwise modify the terms of
this Agreement nor will they have any authority to award punitive or other
damages in excess of compensatory damages (other than as specifically set forth
in this Agreement) and each Party irrevocably waives any such claim thereto when
invoking the arbitration provisions of subsection 11.9.
11.9 Arbitration. (a) An arbitration proceeding initiated by
-----------
either Party under this Agreement with respect to any controversy, claim,
dispute, difference or misunderstanding will be conducted in New York in
accordance with the Commercial Arbitration rules of the AAA, except that, at
the request of either Party, a stenographic
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transcript of the testimony and proceedings will be taken and the arbitrators
will base their decision upon the records and briefs of the Parties.
(b) Such arbitration will be initiated by either Party by notifying the
other Party in writing and will be settled before three (3) impartial
arbitrators, one of whom will be named by the Owner, one by the Vendor and the
third by the two arbitrators appointed by the Owner and the Vendor,
respectively. All of the named arbitrators will have significant experience in
the wireless telecommunications industry. If either the Owner or the Vendor
fails to select an arbitrator within ten (10) days after notice has been given
of the initiation of the arbitration, the officer in charge of the New York
office of the AAA will have the right to appoint the other arbitrator, and the
two arbitrators thus chosen will then select the third arbitrator.
(c) Except as the Parties may otherwise mutually agree, the arbitration
hearings will commence within fifteen (15) Business Days after a Party's
initiation of the arbitration. The Federal Rules of Evidence will apply and
reasonable discovery, including depositions, will be permitted. Discovery
issues will be decided by the arbitrators and post-hearing briefs will be
permitted.
(d) The arbitrator will render a decision within ten (10) days after the
conclusion of the hearing(s) and submission of post-hearing briefs and a
written opinion setting forth findings of fact and conclusions of law will be
made available to the Parties within that time period. The decision of the
majority of the arbitrators regarding the matter submitted will be final and
binding upon the Parties. Judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.
(e) Each Party will pay for the services and expenses of the arbitrator
appointed by it, its witnesses and attorneys, and all other costs incurred in
connection with the arbitration (including, without limitation, the cost of the
services and expenses of the arbitrator appointed by the two arbitrators
appointed by the Parties) will be paid in equal part by the Parties, unless the
award will specify a different division of the costs. Unless otherwise
specifically stated in this Agreement, during the pendency of any arbitration
proceedings, the Parties agree to continue to perform their obligations
hereunder in the same manner as prior to the institution of arbitration
proceedings.
11.10 Other Remedies. Notwithstanding anything to the contrary
--------------
herein contained, each Party will be entitled to pursue any equitable rights
and remedies that are available at law or in equity without complying with
subsection 11.9.
11.11 Tolling. All applicable statutes of limitation will be tolled
-------
to the extent permitted by Applicable Law while the dispute resolution
procedures specified in subsections 11.8 and 11.9 are pending, and nothing
herein will be deemed to bar any Party from taking such action as the Party may
reasonably deem to be required to effectuate such tolling.
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11.12 Governing Law and Forums. This Agreement is governed by the
------------------------
laws and statutes of the State of New York, exclusive of New York's conflict of
laws rules. This Agreement will be deemed to be made and executed in the State
of New York. If one Party commences a lawsuit in relation to this Agreement
against the other Party, such lawsuit can only be brought in the State of New
York. The Parties hereby waive a trial by jury in any such lawsuit. The
Vendor and the Owner each hereby irrevocably (a) agrees that any suit, action
or other legal proceeding arising out of or relating to this Agreement will be
brought in the Federal District Court for the Southern District of New York
which court will have exclusive jurisdiction over any controversy arising out
of this Agreement, (b) consents to the jurisdiction of such court in any such
suit, action or proceeding and (c) waives any objection which it may have to
the laying of venue of any such suit, action or proceeding in such court and
claim that any such suit, action or proceeding has been brought in an
inconvenient forum. Service of process in any suit, action or proceeding may
be made by mailing or delivering a copy of such process to the Owner or the
Vendor, as the case may be, at the addresses indicated in subsection 11.7
hereof and in the manner set forth in such subsection 11.7. Nothing in this
subsection 11.12 will affect the right of the Owner or the Vendor to serve
legal process in any other manner permitted by law.
11.13 Entire Agreement. This Agreement, together with all
----------------
Appendices, Exhibits and Schedules attached hereto, which are incorporated
herein by this reference, constitutes the entire agreement between the Parties
and supersedes all prior oral or written negotiations and agreements between
the Parties with respect to the subject matter hereof. No modification,
variation or amendment to this Agreement will be effective unless made in
writing and signed by duly authorized representatives of each of the Parties.
Except as otherwise provided in this Agreement, any additional or inconsistent
terms stated by the Owner in any Purchase Order issued hereunder will be of no
force or effect other than to express types and quantities of Products ordered
and shipment destinations.
11.14 Improvements, Inventions and Innovations. All rights in any
----------------------------------------
improvements, inventions, and innovations made by the Owner will vest in the
Owner, and the Owner and its Affiliates will have the right to exploit such
improvements, inventions, and innovations. All rights in any improvements,
inventions and innovations made by the Vendor will vest in the Vendor, and the
Vendor and its affiliates will have the right to exploit such improvements,
inventions and innovations.
11.15 Conflicts. In the event of any conflict or inconsistency
---------
among the provisions of this Agreement and the documents attached hereto and
incorporated herein, such conflict or inconsistency will be resolved by giving
precedence to this Agreement and thereafter to the Exhibits, Schedules and the
Appendices.
11.16 Independent Contractors. The relationship between the Vendor
-----------------------
and the Owner pursuant to this Agreement is that of independent contractors.
The Vendor and the Owner are not joint venturers, partners, principal and
agent, master and servant,
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employer or employee, and have no other relationship pursuant to this Agreement
other than independent contracting parties.
11.17 Force Majeure. If the performance of this Agreement
-------------
(including without limitation any deliveries hereunder) is interfered with by
reason of any circumstance beyond the reasonable control of the Party affected,
including without limitation, fire, acts of God or the public enemy, riots and
insurrections, strikes, boycotts or lockouts, embargoes, judicial action, lack
of or inability to obtain export permits or approvals, necessary labor,
materials, energy, components or machinery, and acts of civil or military
authorities (each an event of "Force Majeure"), then the Party affected will be
excused from such performance on a day-for-day basis to the extent of such
interference (and the other Party will likewise be excused from performance on
a day-for-day basis to the extent such Party's obligations relate to the
performance so interfered with); provided that the Party so affected
-------- ----
will use its best efforts under the circumstances to remove such causes of
nonperformance. In the event of a Force Majeure claimed by the Vendor which
lasts in excess of one-hundred twenty (120) days from the commencement of any
such claim by the Vendor hereunder, the Owner will have the right, but not the
obligation, to terminate this Agreement. The Vendor will not be liable to the
Owner for any damages or other amounts as a result of any termination pursuant
to this subsection 11.17. Notwithstanding anything in this subsection 11.17 to
the contrary, from the Effective Date until July 1, 1997, neither Party will be
entitled to claim an event of Force Majeure pursuant to this subsection 11.17
or otherwise, due to or based upon lack or inability to obtain export permits
or approvals, or lack of necessary labor, materials, energy, components or
machinery, unless such lack or inability to obtain export permits or approvals,
lack of necessary labor, materials, energy, components or machinery is due to a
verifiable force majeure claim from a third party supplier (to the Owner or the
Vendor, as the case may be) based upon a fire, act of God or public enemy, riot
or insurrection, strike, boycott or lockout, embargo, judicial action, and/or
acts of civil or military authorities that is beyond the reasonable control of
such third party supplier.
11.18 Change of Control of the Vendor. The Vendor will not
-------------------------------
consolidate with or merge into any other Person or convey, transfer or lease
(other than in connection with sale leaseback or lease financing transactions
in connection with ongoing Vendor operations) all or substantially all of its
assets to any Person, nor will the Vendor permit any Person or group (as such
term is defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) to own or acquire fifty percent (50%) of the value of the
Vendor's equity interests where such Person or group did not own as of the
Effective Date in excess of ten percent (10%) of such equity interests (any
such Person or group will be referred to as the "Vendor's Succeeding Entity"),
unless:
(i) the Vendor's Succeeding Entity will agree to assume the
obligations of the Vendor under this Agreement; and
(ii) the Owner will have approved the transaction, based solely on
(i) the creditworthiness of the Vendor's Succeeding Entity,
(ii) whether the Vendor's Succeeding Entity is a competitor
of the Owner and
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(iii) whether in the Owner's reasonable judgment the Vendor's
Succeeding Entity will be able to fulfill the obligations of
the Vendor (including, but not limited to, the Vendor's
obligations as to then present or future orders) under this
Agreement.
11.19 Change of Control of the Owner. Except as otherwise permitted
------------------------------
under subsection 11.1, the Owner will not consolidate with or merge into any
other business entity or convey, transfer or lease all or substantially all of
its assets to any Person, nor will the Owner permit any Person or group (as
such term is defined in the Exchange Act) to own or acquire fifty percent (50%)
of the value of the Owner's limited partnership interests or general
partnership interests where such Person or group did not own as of the
Effective Date in excess of ten percent (10%) of either of such partnership
interests (any such Person or group will be referred to as the "Owner's
Succeeding Entity"), unless:
(a) the Owner's Succeeding Entity will agree to assume the obligations
of the Owner under this Agreement; and
(b) the Vendor will have approved the transaction, based solely on (i)
the creditworthiness of the Owner's Succeeding Entity and (ii) whether the
Owner's Succeeding Entity is a direct competitor of the Vendor or any affiliate
of the Vendor in the business of selling wireless telephones.
11.20 Offset. Either Party may deduct or retain out of any moneys
------
which may be due or become due to the other Party hereunder or otherwise any
amounts such other Party owes to such first Party hereunder or otherwise.
11.21 Additional Insured. In addition to any indemnities for
------------------
product liability provided by the Vendor to the Owner hereunder as of the
Effective Date, the Vendor will name the Owner as an additional insured on its
product liability insurance policies to provide the Owner with ten million
dollars ($10,000,000) of coverage under such policies. Such policies will be
with reputable carriers and will have terms reasonably satisfactory to the
Owner. With respect to such policies as of the Effective Date, the Owner
acknowledges that the carriers and the terms of such policies are satisfactory
to the Owner.
SECTION 12. AFFILIATES
12.1 Agreements with Initial Affiliates. During the Initial Term of
----------------------------------
this Agreement, the Owner will have the right, but not the obligation, to
require that the Vendor enter into separate agreements with any Initial
Affiliate designated by the Owner (each, an "Initial Affiliate Agreement") for
the supply of Products pursuant to the same prices as set forth herein and on
similar warranty and indemnity terms and conditions as those set forth in this
Agreement.
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12.2 Additional Affiliates. On a quarterly basis commencing on the
---------------------
Effective Date and during the Initial Term of this Agreement, the Owner may,
upon fifteen (15) days' prior written notice to the Vendor, designate any
Person which has been licensed to use PCS in the Territory but which is not an
Initial Affiliate as an "Additional Affiliate"; provided that the
-------- ----
Vendor will have a reasonable opportunity to review and approve such
designation, such approval not to be unreasonably withheld, based upon (i)
reasonable credit criteria, (ii) the fact that such proposed Additional
Affiliate has not in the past materially breached prior material agreements
with the Vendor or its affiliates, (iii) the fact that the proposed Additional
Affiliate is not, at the time of such determination, a direct competitor to the
Vendor or its affiliates in the wireless telecommunications business and (iv)
the fact that the proposed Additional Affiliate is not, at the time of such
determination, otherwise engaged with the Vendor or its affiliates in a
material agreement for the purchase and/or supply of PCS CDMA wireless
technology; and provided, further, that (x) the Owner, any Partner or
-------- -------
any Initial Affiliate has at least a ten percent (10%) equity ownership in such
Person, (y) such Person is controlled by or under the common control with the
Owner, any Partner or any Initial Affiliate or (z) there exists between the
Owner and such Person an Additional Affiliate Arrangement.
12.3 Agreements with Additional Affiliates. During the Initial Term
-------------------------------------
of this Agreement, the Owner will have the right, but not the obligation, to
require that the Vendor enter into separate agreements with any Additional
Affiliate designated by the Owner (each, an "Additional Affiliate Agreement")
for the supply of Products at similar price and warranty terms as are then
available to the Owner pursuant to the terms of this Agreement. The Vendor
must enter into good faith negotiations for the establishment of such
Additional Affiliate Agreements with any such Additional Affiliate promptly
upon the designation of such Additional Affiliate by the Owner and upon notice
to the Vendor that such Additional Affiliate desires to enter into an
Additional Affiliate Agreement. Any Additional Affiliate that enters into an
Additional Affiliate Agreement with the Vendor will have the right to choose
among the Products offered to the Owner under this Agreement solely for use
within the Nationwide Network.
12.4 Affiliate Rights. Notwithstanding anything herein contained to
----------------
the contrary, Affiliates will not be deemed third party beneficiaries to this
Agreement or otherwise have any rights hereunder. Only the Owner may designate
a Person as an Affiliate in accordance with the terms of this Section 12 and
only the Owner has the right and/or the ability to enforce any rights hereunder
against the Vendor.
SECTION 13. REPRESENTATIONS AND WARRANTIES
13.1 Representations and Warranties of the Vendor and the
-----------------------------------------------------
Guarantors. The Vendor and the Guarantors hereby represent and warrant to
- - - ----------
the Owner as follows:
(a) Due Organization of the Vendor and the Guarantors. (i) The
-------------------------------------------------
Vendor is a general partnership, validly existing and in good standing under
the laws of the State of California and has all requisite power and authority
to own and operate its business and
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properties and to carry on its business as such business is now being conducted
and is duly qualified to do business in all jurisdictions in which the
transaction of its business in connection with the performance of its
obligations under this Agreement makes such qualification necessary or
required.
(ii) QUALCOMM is a corporation, validly existing and in good
standing under the laws of the State of Delaware and has all requisite power
and authority to own and operate its business and properties and to carry on
its business as such business is now being conducted and is duly qualified to
do business in all jurisdictions in which the transaction of its business in
connection with the performance of its obligations under this Agreement makes
such qualification necessary or required.
(iii) Sony is a corporation, validly existing and in good standing
under the laws of the State of Delaware and has all requisite power and
authority to own and operate its business and properties and to carry on its
business as such business is now being conducted and is duly qualified to do
business in all jurisdictions in which the transaction of its business in
connection with the performance of its obligations under this Agreement makes
such qualification necessary or required.
(b) Due Authorization of the Vendor and the Guarantors; Binding
------------------------------------------------------------
Obligation. The Vendor and each of the Guarantors have full partnership or
- - - ----------
corporate power and authority to execute and deliver this Agreement and to
perform their respective obligations hereunder, and the execution, delivery and
performance of this Agreement by each of the Vendor and the Guarantors has been
duly authorized by all necessary corporate and/or partnership action on the
part of each of the Vendor and the Guarantors; this Agreement has been duly
executed and delivered by the Vendor and is the valid and binding obligation of
the Vendor enforceable in accordance with its terms, except as enforcement
thereof may be limited by or with respect to the following: (i) applicable
insolvency, moratorium, bankruptcy, fraudulent conveyance and other similar
laws of general application relating to or affecting the rights and remedies of
creditors; (ii) application of equitable principles (whether enforcement is
sought in proceedings in equity or at law); and (iii) provided the remedy of
specific enforcement or of injunctive relief is subject to the discretion of
the court before which any proceeding therefore may be brought. This Agreement
has been duly executed and delivered by each of the Guarantors, in their
capacity as guarantors pursuant to Section 14, and is the valid and binding
obligation of each Guarantor enforceable in accordance with its terms, except
as enforcement thereof may be limited by or with respect to the following: (i)
applicable insolvency, moratorium, bankruptcy, fraudulent conveyance and other
similar laws of general application relating to or affecting the rights and
remedies of creditors; (ii) application of equitable principles (whether
enforcement is sought in proceedings in equity or at law); and (iii) provided
the remedy of specific enforcement or of injunctive relief is subject to the
discretion of the court before which any proceeding therefore may be brought.
(c) Non-Contravention. The execution, delivery and performance of
-----------------
this Agreement by the Vendor and the Guarantors and the consummation of the
transactions
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contemplated hereby do not and will not contravene the partnership arrangements
governing the conduct of the partners in the Vendor or corporate arrangements
governing each of the Guarantors and do not and will not conflict with or
result in (i) a breach of or default under any material indenture, mortgage,
instrument, judgment, decree, order or ruling to which the Vendor or any of the
Guarantors are a party or by which it or any of its properties is bound or
affected, or (ii) a breach of any Applicable Law.
(d) Regulatory Approvals. All material authorizations by, approvals
--------------------
or orders by, consents of, notices to, filings with or other acts by or in
respect of any Governmental Entity or any other Person required in connection
with the execution, delivery and performance of this Agreement by the Vendor
and the Guarantors have been obtained or will be obtained in due course.
(e) Non-Infringement. Except as set forth on Schedule 7, the Vendor
----------------
and the Guarantors each represent and warrant that as of the Effective Date
there are no threatened or actual claims or threatened or actual suits in
connection with patents and other intellectual property matters that would or
could materially adversely affect the Vendor's or the Guarantors' ability to
perform their obligations under this Agreement.
(f) Requisite Knowledge. The Vendor has or will obtain all
-------------------
requisite knowledge, know-how, skill, expertise and experience to perform its
obligations in accordance with the terms of this Agreement.
(g) Financial Capacity. The Vendor has the financial, management
------------------
and manufacturing capacity and capabilities to do the work in a timely manner
in accordance with the terms of this Agreement.
13.2 Representations and Warranties of the Owner. The Owner hereby
-------------------------------------------
represents and warrants to the Vendor and each Guarantor as follows:
(a) Due Organization of the Owner. The Owner is a limited
-----------------------------
partnership, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to own and operate its
business and properties and to carry on its business as such business is now
being conducted and is duly qualified to do business in Delaware and in any
other jurisdiction in which the transaction of its business makes such
qualification necessary or required.
(b) Due Authorization of the Owner; Binding Obligation. The Owner
--------------------------------------------------
has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance
of this Agreement by each of the Owner have been duly authorized by all
necessary partnership action on the part of the Owner; this Agreement has been
duly executed and delivered by the Owner and is the valid and binding
obligation of the Owner enforceable in accordance with its terms, except as
enforcement thereof may be limited by or with respect to the following: (i)
applicable insolvency, moratorium, bankruptcy, fraudulent conveyance and other
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similar laws of general application relating to or affecting the rights and
remedies of creditors; (ii) application of equitable principles (whether
enforcement is sought in proceedings in equity or at law); and (iii) provided
the remedy of specific enforcement or of injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
(c) Non-Contravention. The execution, delivery and performance of
-----------------
this Agreement by the Owner and the consummation of the transactions
contemplated hereby do not and will not contravene the partnership arrangements
governing the conduct of the Partners in the Owner and do not and will not
conflict with or result in (i) a breach of or default under any material
indenture, agreement, instrument, judgment, decree, order or ruling to which
the Owner is a Party or by which it or any of its properties is bound or
affected, or (ii) a breach of any Applicable Law.
(d) Regulatory Approvals. All material authorizations by, approvals
--------------------
or orders by, consents of, notices to, filings with or other acts by or in
respect of any Governmental Entity or any other Person required in connection
with the execution, delivery and performance of this Agreement by the Owner
have been obtained or will be obtained in due course.
(e) Requisite Knowledge. The Owner has all requisite knowledge,
-------------------
know-how, skill, expertise and experience to perform its obligations under this
Agreement.
SECTION 14. GUARANTY
14.1 Guaranty. Each of the Guarantors hereby irrevocably and
---------
unconditionally, severally but not jointly, guarantees the punctual payment and
performance of each and every obligation of the Vendor under this Agreement
and agrees that if for any reason whatsoever the Vendor will fail or be unable
duly, punctually and fully to perform any such obligation under this Agreement,
either of the Guarantors will forthwith perform each and every such obligation,
or cause each such obligation to be performed, without regard to any exercise
or nonexercise by the Owner of any right, remedy, power or privilege under or
in respect of the Agreement against the Vendor. The obligations of each of the
Guarantors will be subject to the Owner providing each of the Guarantors
written notice (unless the giving of such notice is prevented by Applicable Law
or court order) of any default of the Vendor in performing any obligation for
which the Owner is seeking the guaranty of either Guarantor. The Guarantors
will cure such default within fifteen (15) Business Days after receipt by the
Guarantors of written notice thereof specifying the nature of such default. In
addition, the Guarantors agree to reimburse the Owner on demand for any and all
expenses (including counsel fees and expenses) reasonably incurred by the Owner
in enforcing or attempting to enforce any rights under this guaranty.
Notwithstanding anything to the contrary stated in this Section 14, QUALCOMM
will only be liable for up to fifty one percent (51%) of the obligations under
this Section 14, including, but not limited, to all payment obligations under
this Section 14 and Sony will only be liable for up to forty
-66-
<PAGE>
nine percent (49%) of the obligations under this Section 14, including, but not
limited to, all payment obligations under this Section 14.
14.2 Guaranty Absolute. The liability of each of the
-----------------
Guarantors under this Guaranty with respect to the guaranteed obligations will
be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of this Agreement or any
other agreement or instrument relating thereto;
(b) any amendment to, waiver of or consent to departure from, or
failure to exercise any right, remedy, power or privilege under or
in respect of, this Agreement, unless the Owner, and any assignee
of Owner pursuant to Subsection 11.1, shall expressly agree
otherwise in writing, and then only to the extent that such
liability is released in such written agreement;
(c) any exchange, release or nonperfection of any collateral, or any
release or amendment or waiver of or consent to departure from any
other guaranty of or security for the performance of all or any of
the obligations of the Vendor under the Agreement;
(d) the insolvency of the Vendor or any other guarantor or any
proceeding, voluntary or involuntary, involving the bankruptcy,
insolvency, receivership, reorganization, arrangement, dissolution
or liquidation of the Vendor or any other guarantor or any defense
which the Vendor or any other guarantor may have by reason of the
order, decree or decision of any court or administrative body
resulting from any such proceeding;
(e) any change in ownership of the Vendor or any change, whether direct
or indirect, in the relationship of either of the Guarantors to the
Vendor, including, without limitation, any such change by reason of
any merger or any sale, transfer, issuance, or other disposition of
any stock of the Vendor, each of the Guarantors or any other
entity; and
(f) any other circumstance of a similar or different nature that might
otherwise constitute a defense available to either of the
Guarantors as a guarantor.
Except as provided above in this subsection 14.2, in no event shall
the obligations of the Guarantors hereunder exceed the obligations the
Guarantors would have had if either were itself a party to this Agreement, and
each of the Guarantors shall have all rights and defenses of the "Vendor" under
the terms of this Agreement. This Guaranty shall continue to be effective, or
be reinstated, as the case may be, if at any time any payment made, or any
part thereof, to the Owner by the Vendor under this Agreement or by either of
the Guarantors hereunder is ordered rescinded or must otherwise be returned by
the Owner to the Vendor or its representative for any reason,
-67-
<PAGE>
including, without limitation, upon the insolvency, bankruptcy, reorganization,
dissolution or liquidation of the Vendor or otherwise, all as though such
payment had not been made.
14.3 Waiver. Each of the Guarantors hereby waives promptness,
------
diligence, notice of acceptance and any other notice with respect to this
guaranty and any requirement that the Owner exhaust any right or take any
action against or with respect to the Vendor or any other person or entity or
any property.
14.4 No Subrogation. Notwithstanding any payment or payments
--------------
made by either of the Guarantors under or pursuant to this Section 14 or any
set-off or application of funds of either of the Guarantors by the Owner,
neither of the Guarantors shall, until all of the Vendor's obligations under
this Agreement (including warranty obligations) shall have been fulfilled, (a)
be entitled to be subrogated to any of the rights of Owner against the Vendor
or any other guarantor or in any collateral security or guaranty or right of
offset held by the Owner for the performance and payment of all of the
obligations of the Vendor under this Agreement, or (b) seek any reimbursement
or contribution from the Vendor or any other guarantor in respect of any
payment, set-off or application of funds made by either of the Guarantors under
or pursuant to this Section 14.
14.5 No Petition. Neither of the Guarantors will, without the
-----------
prior consent of Owner, voluntarily commence, or join with or solicit any other
person or entity in commencing, any case or other proceeding seeking
liquidation, reorganization or other relief with respect to the Vendor or its
debts under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of the Vendor.
14.6 Continuing Guaranty: Assignments. The Guaranty set forth
--------------------------------
in this Section 14 will be construed as a continuing, absolute and
unconditional guaranty of payment and performance, and, except as specifically
provided in subsection 14.1 above, the obligations of the Guarantors hereunder
will not be conditioned or contingent upon the pursuit by Owner at any time of
any right or remedy against the Vendor or against any other person or entity
which may be or become liable in respect of all or any part of the obligations
of the Vendor under this Agreement or against any collateral security or
guaranty therefor. The Guaranty set forth in this Section 14 will (i) remain
in full force and effect until satisfaction in full of all the Vendor's
obligations under this Agreement, (ii) be binding upon each of the Guarantors
and their respective successors and (iii) inure to the benefit of and be
enforceable by the Owner and its successors, transferees and assigns. Except
as may be necessary to fulfill its obligations hereunder in a timely manner,
and with the consent of Owner, not to be unreasonably withheld or delayed,
neither of the Guarantors will have any right, power or authority to delegate
all or any of its obligations hereunder; provided that upon any such
-------- ----
delegation permitted hereunder, each of the Guarantors will nevertheless remain
liable for the performance of any obligations so delegated.
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<PAGE>
14.7 Other Terms. Subsections 11.1, 11.2, 11.3, 11.4, 11.5,
-----------
11.7, 11.8, 11.9, 11.10, 11.11 and 11.12 will apply to and be binding upon each
of the Guarantors to the same extent as such provisions apply to and are
binding upon the Vendor. In executing this Agreement, each of QUALCOMM and
Sony are directly bound by the provisions of subsection 3.3 applicable to them,
in addition to their obligations as Guarantors hereunder. For purposes of this
Agreement, any breach by either Guarantor of any representation or warranty in
this Agreement shall be deemed to only be a breach of such representation and
warranty by the Vendor, and not such Guarantor; provided that this
-------- ----
sentence will in no way limit the Guarantors' obligations under Section 14.
SECTION 15. OTHER
15.1 Owner Liabilities. The Parties understand and agree that
-----------------
none of the Partners, nor any of their affiliates (other than the Owner), have
guaranteed or otherwise are now in any way liable with respect to any
obligations or liabilities of the Owner or any of its subsidiaries pursuant to
or in connection with this Agreement. The Parties further understand and agree
that neither the Owner nor any of its subsidiaries will guarantee or otherwise
be in any way liable for any obligations or liabilities of any of the Partners
or any affiliate of the Owner pursuant to this Agreement unless, and only to
the extent the Owner or any one of its subsidiaries expressly agrees in writing
to guarantee or otherwise be liable for such liability.
15.2 Counterparts. This Agreement may be executed by one or
------------
more of the Guarantors and the Parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together will be
deemed to constitute one and the same instrument.
-69-
<PAGE>
THE OWNER, THE VENDOR AND EACH OF THE GUARANTORS HAVE READ THIS
AGREEMENT INCLUDING ALL APPENDICES, EXHIBITS AND SCHEDULES HERETO AND AGREE TO
BE BOUND BY ALL THE TERMS AND CONDITIONS HEREOF AND THEREOF.
IN WITNESS WHEREOF, the Parties hereto and each of the Guarantors
have caused their authorized representatives to execute this Agreement
effective as of the date first set forth above.
SPRINT SPECTRUM L.P.,
Owner
/s/ Bernie Bianchino
By: _______________________________________
Name: Bernie Bianchino
Title: Chief Business Development Officer
QUALCOMM Personal Electronics,
Vendor
/s/ Stephen Burke
By: _______________________________________
Name: Stephen Burke
Title: Vice President and General Manager
QUALCOMM Incorporated,
Guarantor
/s/ Paul E. Jacobs
By: _______________________________________
Name: Paul E. Jacobs
Title: Vice President and General Manager
Subscriber Products
SONY ELECTRONICS INC.,
Guarantor
/s/ Yutaka Sato
By: _______________________________________
Name: Yutaka Sato
Title: President WTC
-70-
<PAGE>
APPENDIX 1
----------
[ ]
[ ]
<PAGE>
SCHEDULE 1
Independent Auditors
- - Ernst & Yong LLP
- - Arthur Andersen LLP
- - Price Wasterhouse LLP
- - Deloitte & Touche LLP
- - KPMG Peat Marwick LLP
This list at all times throughout the Term or this Agreement specifically
exclude the then current auditors or either the Vendor, the Owner or the
Guarantors.
SCHEDULE 2
- - - ----------
Initial Affiliates
(a) Each of the Partners and their Operating Subsidiaries.
(b) APC and its Operating Subsidiaries.
(c) PhillieCo and its Operating Subsidiaries.
(d) TCG and its Operating Subsidiaries.
(e) NewTelCo. And its operating Subsidiaries.
<PAGE>
SCHEDULE 3
[Intentionally omitted]
SCHEDULE 4
QUALCOMM Personal Electronics
1300 Campus Point Drive
San Diego, California 92121
SCHEDULE 5
None.
SCHEDULE 6
List of Proprietary Marks
I. Registered Trademarks (circle R designation)
1. QUALCOMM
2. Digital by QUALCOMM (with stylized Q logo)
3. Sony
II. Unregistered Trademarks (use TM designation)
1. Data on the Go
2. SmartKeys
3. SmartRate
4. Where Digital Comes From
5. Pure Voice
6. Q (with stylized Q logo
SCHEDULE 7
----------
[ ]
Schedule 7 -- Page 1
<PAGE>
[ ]
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 8
First Forecast
Owner Product Requirements For Vendor Subscriber Units
with Accompanying Material Accessories
1st Supply Period - 6 mos 2nd Annual Supply Period 3rd Annual Supply Period
1996 1997 1998
<S> <C> <C> <C>
Jan -- 85,000 2,500
Feb -- 85,000 2,500
Mar -- 90,000 2,500
Apr -- 70,000 2,500
May -- 55,000 --
Jun -- 55,000 --
Jul -- 45,000 --
Aug -- 55,000 --
Sep 55,000 65,000 --
Oct 50,000 125,000 --
Nov 60,000 125,000 --
Dec 70,000 95,000 --
TOTAL 235,000 950,000 10,00
GRAND TOTAL 1,195,000
Owner Product Requirements Forecast - Non-Accompanying Accessories-
Desktop Charger with RED/GREEN LED (and AC Adapter)
1st Supply Period - 6 mos 2nd Annual Supply Period 3rd Annual Supply Period
1996 1997 1998
Jan -- 8,500 --
Feb -- 8,500 --
Mar -- 9,000 --
Apr -- -- --
May -- -- --
Jun -- -- --
Jul -- -- --
Aug -- -- --
Sep -- -- --
Oct -- -- --
Nov 16,500 -- --
Dec 7,000 -- --
TOTAL 23,500 26,000 0
GRAND TOTAL 49,500
____________________________
o For extra Accessories which are not Material Accessories which are to accompany Subscriber Units.
Owner Product Requirements Forecast - Non-Accompanying Accessories-
Hands Free Car Kit (with audio design improvements)
1st Supply Period - 6 mos 2nd Annual Supply Period 3rd Annual Supply Period
1996 1997 1998
Jan -- 4,250 --
Feb -- 4,250 --
Mar -- 4,500 --
Apr -- -- --
May -- -- --
Jun -- -- --
Jul -- -- --
Aug -- -- --
Sep -- -- --
Oct -- -- --
Nov 8,250 -- --
Dec 3,500 -- --
TOTAL 11,750 13,000 0
GRAND TOTAL 24,750
____________________________
o For extra Accessories which are not Material Accessories which are to accompany Subscriber Units.
Owner Product Requirements Forecast - Non-Accompanying Accessories-
Travel Charger
1st Supply Period - 6 mos 2nd Annual Supply Period 3rd Annual Supply Period
1996 1997 1998
Jan -- 25,500 --
Feb -- 25,500 --
Mar -- 27,000 --
Apr -- -- --
May -- -- --
Jun -- -- --
Jul -- -- --
Aug -- -- --
Sep -- -- --
Oct -- -- --
Nov 49,500 -- --
Dec 21,000 -- --
TOTAL 70,500 78,000 0
GRAND TOTAL 148,500
____________________________
o For extra Accessories which are not Material Accessories which are to accompany Subscriber Units.
Owner Product Requirements Forecast - Non-Accompanying Accessories-
Cigarette Lighter Adapter with Fast Charge
1st Supply Period - 6 mos 2nd Annual Supply Period 3rd Annual Supply Period
1996 1997 1998
Jan -- 63,750 --
Feb -- 63,750 --
Mar -- 67,500 --
Apr -- -- --
May -- -- --
Jun -- -- --
Jul -- -- --
Aug -- -- --
Sep -- -- --
Oct -- -- --
Nov 123,750 -- --
Dec 52,500 -- --
TOTAL 176,250 195,000 0
GRAND TOTAL 371,250
____________________________
o For extra Accessories which are not Material Accessories which are to accompany Subscriber Units.
Owner Product Requirements Forecast - Non-Accompanying Accessories-
Data Adapter Cable
1st Supply Period - 6 mos 2nd Annual Supply Period 3rd Annual Supply Period
1996 1997 1998
Jan -- -- --
Feb -- -- --
Mar -- -- --
Apr -- -- --
May -- -- --
Jun -- -- --
Jul -- -- --
Aug -- -- --
Sep -- -- --
Oct -- -- --
Nov -- -- --
Dec -- -- --
TOTAL 0 0 0
GRAND TOTAL 0
____________________________
o For extra Accessories which are not Material Accessories which are to accompany Subscriber Units.
Owner Product Requirements Forecast - Non-Accompanying Accessories-
Standard Battery (Lithium Ion)
1st Supply Period - 6 mos 2nd Annual Supply Period 3rd Annual Supply Period
1996 1997 1998
Jan -- 25,500 --
Feb -- 25,500 --
Mar -- 27,000 --
Apr -- -- --
May -- -- --
Jun -- -- --
Jul -- -- --
Aug -- -- --
Sep -- -- --
Oct -- -- --
Nov 49,500 -- --
Dec 21,000 -- --
TOTAL 70,500 78,000 0
GRAND TOTAL 148,500
____________________________
o For extra Accessories which are not Material Accessories which are to accompany Subscriber Units.
Owner Product Requirements Forecast - Non-Accompanying Accessories-
Leather Case
1st Supply Period - 6 mos 2nd Annual Supply Period 3rd Annual Supply Period
1996 1997 1998
Jan -- -- --
Feb -- -- --
Mar -- -- --
Apr -- -- --
May -- -- --
Jun -- -- --
Jul -- -- --
Aug -- -- --
Sep -- -- --
Oct -- -- --
Nov 82,500 -- --
Dec 0 -- --
TOTAL 82,500 0 0
GRAND TOTAL 82,500
____________________________
o For extra Accessories which are not Material Accessories which are to accompany Subscriber Units.
Owner Product Requirements Forecast - Non-Accompanying Accessories-
PCMIA Adapter
1st Supply Period - 6 mos 2nd Annual Supply Period 3rd Annual Supply Period
1996 1997 1998
Jan -- -- --
Feb -- -- --
Mar -- -- --
Apr -- -- --
May -- -- --
Jun -- -- --
Jul -- -- --
Aug -- -- --
Sep -- -- --
Oct -- -- --
Nov -- -- --
Dec -- -- --
TOTAL 0 0 0
GRAND TOTAL 0
____________________________
o For extra Accessories which are not Material Accessories which are to accompany Subscriber Units.
</TABLE>
Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
AMENDMENT NO. 1 ("Amendment") dated as of October 24, 1996 to the
Purchase and Supply Agreement dated as of June 21, 1996, among Sprint Spectrum
L.P., a Delaware limited partnership (the "Owner"), QUALCOMM Personal
Electronics, a California general partnership (the "Vendor"), QUALCOMM
Incorporated, a Delaware corporation, as a guarantor and Sony Electronics Inc.,
a Delaware corporation, as a guarantor (each guarantor together with the Owner
and the Vendor, the "Parties").
RECITALS:
WHEREAS, the Owner, the Vendor and the guarantors are parties to a
certain Purchase and Supply Agreement dated as of June 21, 1996 (the
"Contract"), and
WHEREAS, the Parties desire to amend the Contract.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, the Parties hereby agree as follows:
1. Definitions. Unless otherwise defined herein, all capitalized terms used in
this Amendment will have the meaning given to such terms in the Contract.
References to "Specifications" include the modifications to the Specifications
set forth in the Consent to Specification Deviation executed by the Parties and
dated September 24, 1996.
2. Agreements.
(a) The Owner hereby waives its rights to (i) only those liquidated
damages under Section 4 of the Contract which have accrued as of the date hereof
and are due with respect to the Products which were to be delivered by the
Vendor prior to the date hereof and (ii) terminate the Contract now or in the
future pursuant to the Contract's treatment under subsection 4.2(e) of Vendor
Product delivery delays that have occurred prior to the date hereof. Nothing
contained in this clause (a) shall in any way amend, waive or otherwise modify
the Owner's rights under the Contract as amended hereby in the event of any
Vendor delivery delay after the date hereof; provided, however, any delivery
delays that occurred prior to the date hereof shall not be taken into
consideration with respect to any future application of subsection 4.2(e) of the
Contract.
(b) Notwithstanding the terms of the Contract and any Purchase Orders
delivered to the Vendor prior to the date hereof, the Vendor shall have and hold
specifically for the Owner the following quantities of Specification compliant
Subscriber Units (and their Material Accessories) at its manufacturing facility
in San Diego, California no later than the dates set forth below:
Date Amount
10/27/96 30,000
11/10/96 70,000
12/01/96 60,000
12/05/96 20,000
12/10/96 20,000
It is agreed by the Parties that the quantities and dates set forth
above are firm and that no grace periods (including, but not limited to, the
Delay Grace Period) will apply to these dates and/or quantities. To the extent
the quantities of Products set forth above are manufactured and held as set
forth in this clause (b) and clause (c) below by the dates set forth above, the
Vendor may invoice the Owner for such manufactured, held and verified
Specification compliant Products at the prices set forth on Appendix 1 as
amended hereby. The 20,000 Subscriber Units to be manufactured and held on
December 10, 1996, as set forth above, will be divided between 10,000 "blue"
Subscriber Units and 10,000 "green" Subscriber Units and the Owner and the
Vendor will work together in good faith to promptly agree and establish color
samples for such colored Subscriber Units; provided, however, in the event the
Parties fail to promptly reach such agreement, then the color of such Subscriber
Units shall be as set forth in Exhibit A1 and their price shall not include the
price increase set forth in "Note 3" to Appendix 1. It is expressly understood
and agreed by the Parties that in the event the Vendor shall for any reason
(other than an event constituting a Force Majeure pursuant to subsection 11.17
of the Contract in which case the terms of subsection 11.17 shall apply) fail to
comply with any of the specific dates, quantities and other requirements set
forth in this clause (b) by not having and holding such quantities of
Specification compliant Subscriber Units (and their Material Accessories)
specifically for the Owner (as verified in accordance with clause (c) below)
at the Vendor's manufacturing facility in San Diego, California, then,
notwithstanding anything in the Contract to the contrary, the Owner will have
the right, based upon the Owner's needs and requirements, as determined in the
Owner's sole and absolute discretion and upon giving the Vendor written notice,
within three (3) Business Days following such failure or notice of failure by
the Vendor, of the Owner's election to proceed under either subclause (i) or
(ii) below, to:
(i) if the Owner does not need such Products, immediately (and without any grace
period whatsoever) cancel, without payment or penalty to either the Vendor or
the Owners, any such missing quantity by lowering the Total Minimum Commitment
by the amount of such missing and or unverified Products; provided, that in such
event the Owner will have the right and the Vendor will be obligated to treat
such canceled quantity of Products exactly as the additional thirty-five
thousand (35,000) Subscriber Units are being treated under subsection 5.2(g) of
the Contract as added pursuant to this Amendment; or
(ii) if the Owner does not need such Products, accept such Specification
compliant Products as and when provided and verified by Vendor; provided, that
the price of any such late Products will be reduced by (x) one-half of one
percent (1/2%) for each day late (without any grace period whatsoever) and (y)
on the thirtieth day late, an additional five percent (5%). In the event such
late Products are in excess of thirty (30) days late (starting at 5:00 p.m. San
Diego time on the scheduled dates set forth above), the Owner will again have
the right to cancel such late Products as set forth in subclause (i) above to
the extent such rights were not previously exercised by the Owner with respect
to such late Products.
(c) Any Products manufactured and held pursuant to clause (b) above
will be held by the Vendor in separately identifiable inventory, in individual
boxes or bulk storage boxes, at the Vendor's manufacturing facility in San
Diego, California specifically for the Owner and any such held quantities will,
on or before the delivery dates set forth above, be verified by the Vendor in
writing to the Owner identifying the quantity, location, model and serial
numbers of the Products so held and further identifying such Products as being
held for the Owner pursuant to the Contract (provided that the Vendor's
verification of the first thirty thousand (30,000) Subscriber Units to be
available on October 27, 1996, will be dated November 4, 1996). The Vendor will
provide the Owner and its personnel reasonable access to its facilities to
physically verify the availability and continued maintenance of delivered
Products held for the Owner; provided, that the Owner will exercise its rights
(to the extent not previously exercised) to physically verify the availability
and continued maintenance of any such Products already verified by the Vendor to
the Owner pursuant to and in accordance with the first sentence of clause (c)
within five (5) days after receipt of any such written verification from the
Vendor and provided further that nothing herein will prevent the Vendor from
sending an invoice to the Owner for any Vendor verified Products at any time (i)
after the Owner shall have notified the Vendor in writing of its intent not to
physically verify the availability and continued maintenance of such Products or
(ii) after expiration of such five day period if the Owner neither physically
verifies nor provides notice of the Owner's intention not to physically verify
(in which event the Owner shall be deemed to have verified for purposes of the
third sentence of clause 2(b) above). The Vendor will hold all such Products
until such time as the Owner provides written notice to the Vendor that it
desires to have all or any portion of such held Products delivered to the FOB
point for shipment; provided, that the Owner will provide the Vendor with three
(3) days prior written notice to individually box any Products held by the
Vendor in bulk storage based upon a Vendor individual box packaging ability of
five thousand (5,000) Subscriber Units (and their Material Accessories) per day.
If for any reason the Vendor shall not, on the date(s) scheduled for the
delivery thereof, deliver to the FOB point any Products held for the Owner which
have been paid for by the Owner, then (notwithstanding subsection 11.17 of the
Contract), the Owner will have the absolute right to the immediate refund of any
monies paid to the Vendor for any such held but undelivered Products, and such
right will be in addition to any and all rights (subject to subsection 11.17 of
the Contract) the Owner may otherwise have in Contract or in law in any such
event.
(d) The Vendor will have a release of software ready for conducting
phase 2 NSOTASP interoperability testing with the Owner's infrastructure vendors
on November 15, 1996. This release of Software is intended to have and this
phase of testing is intended to verify the following NSOTASP functionality: (a)
default factory configuration complies to section 3.1 of IS-683; (b) an NSOTASP
call can be successfully completed; (c) a PCS call can be originated using the
newly programmed mobile; (d) a PCS voice call can be terminated by the newly
programmed mobile; (e) programming lock works properly; (f) the parameters of an
activated mobile can be modified by an NSOTASP call; (g) no permanent data is
changed if the call is terminated before the "Commit;" (h) verify the PRL is
stored properly; and (i) mobile functions properly after downloading a list with
PRL with a size exceeding MAX_PR_LIST_SIZE. Following successful passing of all
these phase 2 tests, the Vendor will, within four weeks, be in a position to
conduct CDG testing with the Owner's infrastructure vendors. Any and all
Subscriber Units held at the Vendor's facilities will be promptly upgraded by
the Vendor to have such NSOTASP Software upon availability of NSOTASP Software
and within the time for implementing such feature, in each instance in
accordance with and pursuant to the terms and conditions of Section 4.5 of
Exhibit A-1 of the Contract. The Vendor may invoice the Owner and the Owner will
pay to the Vendor $3.85 for the upgrading of each such satisfactorily
OTASP-upgraded Subscriber Unit.
(e) The liquidated damages provisions of subsection 4.2(a) of the
Contract shall not apply to those 1996 forecasted Products which are
specifically subject to liquidated damages, price reduction and/or cancellation
pursuant to the provisions of subsection 2(b)(i) or 2(b)(ii) of this Amendment.
3. Amendment to Subsection 3.2(a). Subsection 3.2(a) of the Contract is
hereby amended by deleting the seventh sentence thereof commencing "For each of
the Initial Subscriber Units ..." in its entirety.
4. Amendment to Subsection 3.2(b). Subsection 3.2(b) of the Contract is
hereby amended by (i) changing the definition of "Total Minimum Commitment" in
the first sentence thereof from one million one hundred ninety five thousand
(1,195,000) Subscriber Units to "one million one hundred sixty thousand
(1,160,000)Subscriber Units" and (ii) changing the definition of "First Annual
Minimum Commitment" in the second sentence thereof from two hundred thirty five
thousand (235,000) Subscriber Units to "two hundred thousand (200,000)
Subscriber Units".
5. Amendment to Subsection 5.1. Subsection 5.1 of the Contract is hereby amended
by adding a new subsection 5.1(d) immediately after subsection 5.1(c) as
follows:
"(d) Notwithstanding anything stated herein (including, but
not limited to, Schedule 8 hereto) to the contrary, to the extent the
Owner shall have forecasted for the delivery of any Accessories, the
Owner may reduce the aggregate Accessory deliveries forecasted for the
first three (3) months of 1997, by an amount equal to no more than
[______] percent of the amount of Accessories purchased by the Owner
from the Vendor in 1996 (over and above any quantity reductions
available to the Owner for the first three (3) months of 1997 pursuant
to subsection 5.1); provided, that any such reduction shall be
distributed evenly over the first three (3) months of 1997."
6. Amendment to Subsection 5.2. Subsection 5.2 of the Contract is hereby amended
by adding a new subsection 5.2(g) immediately after subsection 5.2(f) as
follows:
"(g) Notwithstanding anything stated herein to the contrary,
at any time throughout the Initial Term the Owner may in its sole and
absolute discretion choose to order up to [_____________] additional
Specification compliant Subscriber Units (and their Material
Accessories) above the Total Minimum Commitment. If the Owner should
order any such additional Subscriber Units (and their Material
Accessories) for delivery at any time in 1996, any such order for such
additional Products will be deemed an Excess Purchase Order and to the
extent fulfilled by the Vendor, will be fulfilled at a price not in
excess of [_____________] percent less than the 1996 price set forth on
Appendix 1. If the Owner desires to order any such additional
Subscriber Units (and their Material Accessories) for delivery in 1997
or 1998 then, the Owner shall include such additional Subscriber Units
in the subject Forecast pursuant to the provisions of subsection 5.1 of
the Contract and the Vendor will be obligated to deliver such Products
to the Owner in accordance with the terms of the Contract (including
subsection 5.2 of the Contract) and at the prices as set forth on
Appendix 1."
7. Amendment to Schedules and Appendices. The Schedules and Appendices
to the Contract are hereby amended by (i) deleting the first page of Schedule 8
in its entirety and replacing in lieu thereof the revised page 1 of Schedule 8
attached hereto as Attachment 1 and (ii) deleting Appendix 1 in its entirety and
replacing in lieu thereof the revised Appendix 1 attached hereto as Attachment
2.
8. NO OTHER AMENDMENTS. EXCEPT AS EXPRESSLY AMENDED, MODIFIED AND SUPPLEMENTED
HEREBY, THE PROVISIONS OF THE CONTRACT ARE AND WILL REMAIN IN FULL FORCE AND
EFFECT AND, EXCEPT AS EXPRESSLY PROVIDED HEREIN, NOTHING IN THIS AMENDMENT WILL
BE CONSTRUED AS A WAIVER OF ANY OF THE RIGHTS OR OBLIGATIONS OF THE PARTIES
UNDER THE CONTRACT.
9. GOVERNING LAW. THIS AMENDMENT WILL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE LAWS AND
PRINCIPLES THEREOF WHICH WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
10. Descriptive Headings. Descriptive headings are for convenience only and will
not control or affect the meaning or construction of any provisions of this
Amendment.
11. Counterparts. This Amendment may be executed in any number of identical
counterparts, each of which will constitute an original but all of which when
taken together will constitute but one instrument.
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
signed by their duly authorized representatives on the date first above written.
SPRINT SPECTRUM L.P.,
as Owner
By: /s/Bernie Bianchino
Name: Bernie Bianchino
Title: Chief Business Development
Officer
QUALCOMM Personal Electronics,
as Vendor
By: /s/Stephen Burke
Name: Stephen Burke
Title: Vice President and General
Manager Sony/QUALCOMM
CDMA Sales
QUALCOMM Incorporated,
as Guarantor
By: /s/Paul E. Jacobs
Name: Paul E. Jacobs
Title: Senior Vice President and
General Manager Subscriber
Products
SONY ELECTRONICS INC.,
as Guarantor
By: /s/Yutaka Sato
Name: Yutaka Sato
Title: President, Sony WTC
<PAGE>
ATTACHMENT 1
SCHEDULE 8
First Forecast
Owner Product Requirements for Vendor Subscriber Units
with Accompanying Material Accessories
---------- --------------- --------------- ----------------
1st Supply 2nd Annual 3rd Annual
(6 mos) Supply Period Supply Period
1996 1997 1998
---------- --------------- --------------- ----------------
Jan -- 85,000 2,500
Feb -- 85,000 2,500
Mar -- 90,000 2,500
Apr -- 70,000 2,500
May -- 55,000 --
Jun -- 55,000 --
Jul -- 45,000 --
Aug -- 55,000 --
Sep -- 65,000 --
Oct 27 30,000 125,000 --
Nov 10 70,000 125,000 --
Dec 1 60,000 95,000 --
Dec 5 20,000
Dec 10 20,000
---------- --------------- --------------- ----------------
TOTAL 200,000 950,000 10,000
========== =============== =============== ================
GRAND TOTAL 1,160,000
========== =============== =============== ================
<PAGE>
ATTACHMENT 2
APPENDIX 1
Pricing
Subscriber Units With Accompanying Material Accessories
- - -------------------- ------------------------ -------------------------------
1996 1997 1998
- - -------------------- ------------------------ -------------------------------
$[
- - -------------------- ------------------------ -------------------------------
]
- - -----------------------------------------------------------------------------
Additional Accessories
- - ------------------------------------- ------------- --------------------------
Extra Non-Accompanying Accessories(1) Price Per
Accessory Available no later than
- - ------------------------------------- ------------- --------------------------
Desktop Charger (w/AC Adapter) [
- - ------------------------------------- ------------- --------------------------
- - ------------------------------------- ------------- --------------------------
Hands Free Car Kit
- - ------------------------------------- ------------- --------------------------
- - ------------------------------------- ------------- --------------------------
Travel Charger
- - ------------------------------------- ------------- --------------------------
- - ------------------------------------- ------------- --------------------------
Cigarette Lighter Adapter
- - ------------------------------------- ------------- --------------------------
- - ------------------------------------- -------------- -------------------------
Data Adapter Cable
- - ------------------------------------- ------------- --------------------------
- - ------------------------------------- ------------- --------------------------
Standard Batter (Li-Ion)
- - ------------------------------------- ------------- --------------------------
- - ------------------------------------- ------------- --------------------------
Leather Case
- - ------------------------------------- ------------- --------------------------
- - ------------------------------------- ------------- --------------------------
PCMCIA Data Adapter
- - ------------------------------------- ------------- --------------------------
- - ------------------------------------- ------------- --------------------------
Mock Up Unit ]
- - ------------------------------------- --------------- ------------------------
(1)The Accessories and the prices and dates therefore as set forth in this table
do not relate to Material Accessories which accompany Subscriber Units.
Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
MASTER AGREEMENT
This Master Agreement ("Agreement") between Sprint Communications Company,
L.P., Sprint Spectrum, L.P. ("Sprint Spectrum"), Sprint United Management
Company, individually and on behalf of the affiliates listed in Attachment 1
("SUMC")(Sprint Communications Company, L.P. and SUMC collectively referred to
herein as "Sprint") and Tandy Corporation a corporation organized under the laws
of the State of Delaware, acting by and through its RadioShack division
("RadioShack"), dated this 10th day of September, 1996 along with the Addenda
executed by the Parties and currently attached to this Agreement and any future
Addenda executed by the Parties and subsequently attached to this Agreement
shall establish and set forth the terms and conditions upon which RadioShack
will market and sell, to its customers, telecommunication products and solicit
orders for services provided by Sprint and Sprint Spectrum. In this Agreement
Sprint, Sprint Spectrum, and RadioShack are sometimes referred to individually
as a "Party," and collectively as the "Parties." Unless otherwise specifically
stated herein, this Agreement applies only to RadioShack and no other division,
subsidiary or Affiliate of Tandy Corporation.
RECITALS
WHEREAS, Sprint Communications Company, L.P. is a telecommunications
company providing a variety of products and services including, but not limited
to, long distance, local telephone and internet services;
WHEREAS, Sprint Spectrum is a telecommunications company providing a
variety of telecommunication products and services including, but not limited
to, Personal Communication Services;
WHEREAS, SUMC is an Affiliate of Sprint, and has the authority to execute
this Agreement on behalf of those affiliates listed on Attachment 1.
WHEREAS, RadioShack is engaged in the business, among other things, of
selling consumer electronic products and related services through RadioShack
Company Owned Stores and independent RadioShack dealers and franchisees;
WHEREAS, Sprint, Sprint Spectrum and RadioShack wish to enter a business
relationship (the "Program") to, among other things, promote and provide
consumers access to Sprint and Sprint Spectrum products and services at
RadioShack Company Owned Stores and participating RadioShack independent dealers
and franchisees;
NOW, THEREFORE, AND IN CONSIDERATION of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties agree as follows:
1. Definitions - The following definitions shall govern for the purposes of this
Agreement and the Addenda, except as otherwise provided herein or therein:
"Addenda" - shall mean each and every Addendum attached to this Agreement,
and Schedules and Exhibits included therein.
"Affiliate" - shall mean an individual, association, co-partnership,
limited partnership, limited liability company, corporation or joint-stock
company, trust or other business entity (hereinafter referred to as "Person"),
however organized, that directly or indirectly, through one (1) or more
intermediaries, controls, is controlled by or is under common control with such
Person. Control shall be defined as (i) ownership of a majority of the voting
power of those classes of voting stock entitled to vote in the election of
directors or (ii) ownership of a majority of the beneficial interests in income
and capital of an entity other than a corporation.
"Agreement" - shall mean this Master Agreement, including the Addenda
attached hereto and any Addenda later executed and made part of this Master
Agreement.
"Arbitrator" - shall mean a neutral person who has no past or current
employment, contractual or attorney/client relationship with any Party, and who
is selected pursuant to Schedule 20.
"Cellular Radiotelephone Service" or "CRS" - shall mean a radio service in
which common carriers are authorized by the FCC under 47 CFR Part 22 and
licensed under 47 CFR Part 22, Subpart H to offer and provide service for hire
to the general public through a cellular system utilizing the channels and
frequency bandwidths assigned under 47 CFR Part 22, Subpart H, Section 22.905.
CRS shall not mean or include any paging services utilizing the channels and
frequency bandwidths assigned and licensed to radiotelephone service under 47
CFR Part 22, Subpart E, any Narrowband PCS services utilizing the channels and
frequency bandwidths assigned and licensed under 47 CFR Part 24, Subpart D or
any Broadband PCS services utilizing the channels and frequency bandwidths
assigned and licensed under 47 CFR Part 24, Subpart E.
"Change of Control" - shall mean (a) the consummation of a reorganization,
merger or consolidation or sale or other disposition of substantially all of the
assets of any Party; or (b) the acquisition by any Person or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than 50% of either: (i) the then outstanding
shares of common stock of any Party hereto; (ii) the combined voting power of
the then outstanding voting securities of any Party hereto entitled to vote
generally in the election of directors; or (iii) the income and profits interest
of the general partners or limited partners where the entity is a limited
partnership.
"Combination Marks" - shall mean "The Sprint Store @ RadioShack," Sprint @
RadioShack," "Sprint at RadioShack," "The Sprint Store at RadioShack," or any
combination of a Sprint/Sprint Spectrum Mark interlocked or connected with a
Radio Shack Mark by "@" or "at," or such other Marks as the Joint Steering
Committee may decide from time to time to use in connection with the promotion
of the Merchandising Display and the Products and Services jointly marketed by
the Parties hereto under the terms of this Agreement, which such other
Combination Marks shall be added to this Agreement by an addendum.
Notwithstanding anything to the contrary, the Combination Marks will not include
those Marks set forth on the Excluded Marks Addendum attached hereto.
"Combination Mark Format" - shall mean "The Sprint Store @ ," "Sprint @ ,"
"The Sprint Store at ," "Sprint at ," "The Sprint Shop @ ," "The Sprint Shop at
," or any combination of Marks in which "The Sprint Store," "Sprint," "The
Sprint Shop" or a Sprint/Sprint Spectrum Mark is interlocked or connected with a
single word, symbol or letter, including, but not limited to "@" or "at," with
the name or Mark of any Retailer.
"Company Owned Stores" - shall mean a retail store owned and operated by a
Party.
"Confidentiality Agreement" - shall mean the Confidential Information
Nondisclosure Agreement executed by and between the Parties effective May 2,
1996, and attached as Exhibit 1 hereto.
"Damages" - shall have the meaning set forth in Section 14(f) below.
"Effective Date" - shall mean the date set forth in the first paragraph of
this Agreement.
"FCC" - shall mean the U.S. Federal Communications Commission.
"Initial Term" - shall mean, unless earlier terminated as provided in
Section 2 or Section 15, the date beginning on the Effective Date and ending at
12:00 a.m. on the tenth (10th) anniversary of the Effective Date.
"JSC" or "Joint Steering Committee" - shall mean the committee described in
Section 5 below.
"Mark" - shall mean any trademark, service mark, trade name, logo,
insignia, symbol or trade dress, whether or not registered.
"Market Launch Date" - means the first day of the first month after the
appropriate Merchandising Display has been installed in 4,000 Retail Stores, or
such other date established by the Joint Steering Committee.
"Merchandising Display" - shall mean the physical location(s) of the
computer interface and fixtures within each Retail Store dedicated to the
merchandising of the Products and Services as more fully described in a Computer
Interface Addendum and a Fixtures Addendum to be attached hereto, but not to
include any products or services which are not either (i) Sprint or Sprint
Spectrum Products or Services or (ii) telecommunication products or services
(but not Cellular Radiotelephone Service products or services) bearing a
RadioShack Mark, unless authorized in writing by the Sprint and Sprint Spectrum
members of the Joint Steering Committee.
"Merchandising Display Expenditures" - means the actual out-of-pocket
expenditures by Sprint and Sprint Spectrum to acquire, design, develop,
construct, ship and install, remodel and replace as a result of obsolescence the
Merchandising Displays in the RadioShack Company Owned Stores as set forth in
Section 6.
"Net Collectible Call Usage Revenue" - means the monthly revenue generated
by Sprint's Service, excluding taxes, bad debt, fraud and subsequently credited
charges.
"Party" or "Parties" - shall have the meaning set forth in the first
paragraph of this Agreement.
"Person" - shall have the meaning set forth in the definition of Affiliate.
"PCS" or "Personal Communication Service" - shall mean a radio service in
which common carriers are authorized by the FCC and licensed under 47 CFR Part
24, Subpart E as currently in effect as of the Effective Date, and amended from
time to time, to offer and provide service for hire to the general public
utilizing the following frequency bandwidths: 1850-1890 MHz, 1930-1970 MHz,
2130-2150 MHz, and 2180-2200 MHz (Broadband PCS). PCS does not include Cellular
Radiotelephone Service.
"PCS Equipment" - shall have the meaning set forth in the PCS Addendum
hereto.
"Product" - shall mean any tangible goods bearing a Sprint or Sprint
Spectrum Mark which are offered both for sale to consumers and listed on any
Addendum attached hereto.
"Product/Service Bundle" - shall mean a package including one or more
telecommunication products and one or more telecommunication services sold and
billed to the customer as a unit at a single combined price.
"Program" - shall have the meaning set forth in the Recitals above.
"Program Expenses" - shall mean those expenses related to the rollout of
the Program, advertising the Program, training costs related to implementing the
Program and other expenses set forth in Section 7.
"Proprietary Information" - shall mean all information as defined in the
Confidentiality Agreement.
"RadioShack Gift Express" - shall mean RadioShack's mail or telephone order
and delivery service.
"RadioShack Marks" - shall mean all of the Marks listed on the RadioShack
Licensed Marks Addendum attached hereto.
"RadioShack Unlimited" - shall mean the in-store catalog located in each
Retail Store, as the same may be revised and any future RadioShack Unlimited
consumer catalog supplied to consumers for out-of-store use.
"Retail Stores" means RadioShack Company Owned Stores and participating
independent RadioShack dealers and franchisees operating under RadioShack
Franchise Agreements or Authorized Sales Center Agreements with RadioShack in
the Territory.
"Retailer" - shall mean a retail merchant of products or services who sells
through one or more physical store locations directly to consumers (but not
including any entity or any division, department or subsidiary thereof that
sells to consumers directly through mail or telephone order, telephone
solicitation, the internet or any other means of distribution, which is not in
conjunction with the operation of a retail store or stores).
"Service" - shall mean any provision of telecommunication of voice or data
by either Sprint or Sprint Spectrum which is listed on any Addendum attached
hereto.
"Sprint/Sprint Spectrum Marks" - shall mean all of the Marks listed on the
Sprint Licensed Marks Addendum or Sprint Spectrum Licensed Marks Addendum
attached hereto.
"Sourced" - means the act of supplying, acquiring or procuring a product.
"Territory" - shall mean the states constituting the United States, Puerto
Rico and the U.S. Virgin Islands, except where otherwise specifically modified,
where Sprint and/or Sprint Spectrum make Products and Services available for
sale.
2. Term - This Agreement shall be effective for the Initial Term, unless earlier
terminated as provided in Section 19. This Agreement shall be automatically
renewed for two (2) successive five (5) year renewal terms.
3. Products and Services - Subject to the terms and conditions of this Agreement
and each Addendum attached hereto and existing or future laws, regulations or
orders of a court or governmental agency specifically affecting the performance
of a Party's obligations hereunder, RadioShack is authorized to and will use
commercially reasonable efforts to promote, distribute, sell and solicit orders
for the Products and solicit orders for Services as soon as made available by
Sprint/Sprint Spectrum through all, and in no event less than 4,500 RadioShack
Company Owned Stores located in the Territory.
(a) Addenda. Each Product and Service subject to this Agreement shall be
treated in a separate Addendum to this Agreement. Each Addendum shall separately
specify each Product or Service to be sold or for which orders are to be
solicited by RadioShack at the RadioShack Company Owned Stores, the terms of
compensation payable to RadioShack in connection therewith and all other terms
and conditions supplemental to this Agreement which pertain specifically to each
Product and Service which becomes subject to this Agreement.
(b) Dealers and Franchisees. RadioShack will use commercially reasonable
efforts to obtain the participation of the independent RadioShack dealers and
franchisees in the Program. RadioShack will develop and assist Sprint and Sprint
Spectrum to develop appropriate variations of the Program for presentation and
marketing to the independent RadioShack dealers and franchisees. RadioShack
shall market and shall assist Sprint and Sprint Spectrum in marketing the
Program to independent RadioShack dealers and franchisees. The participation of
independent RadioShack dealers and franchisees in the Program or a variation
thereof shall be (1) on terms and conditions negotiated among RadioShack, Sprint
and Sprint Spectrum and said participating independent RadioShack dealers and
franchisees consistent with the terms and conditions of this Agreement and (2)
subject to the terms of a separate trademark license agreement between the
independent RadioShack dealer or franchisee and Sprint or Sprint Spectrum, as
the case may be. It is agreed and understood that such dealers and franchisees
are independent businesses, not controlled by RadioShack, and participation
shall be at the mutual election of the respective dealer or franchisee and
Sprint or Sprint Spectrum, as the case may be.
(c) Purchase Orders for Products. RadioShack will issue a purchase order
for all Products to be purchased from Sprint or Sprint Spectrum, as the case may
be. The basic terms and conditions of such Purchase Order will be as set forth
in the Purchase Order Addendum attached hereto.
(d) Terms of Payment. Unless otherwise specified in this Agreement or an
Addendum, payment of all amounts due any Party, whether in the form of
residuals, sales incentive payments, market development funds, activation fees
or other payments, will be made within sixty (60) days from the end of the
calendar month in which the right to receive payment accrued. Sprint/Sprint
Spectrum will remit for deposit to the appropriate account designated by
RadioShack in writing all monthly amounts due hereunder. Each category of
payment (e.g. Sprint Residential Long Distance Service Residuals, Sprint
Residential Long Distance Service Residual Sales Incentive--each being a
category) shall be paid by a separate (i) check or (ii) EFT transmission. In
connection with each such category of payment, Sprint/Sprint Spectrum will
provide detailed documentation to be agreed upon by the Parties.
4. Program, Exclusivity and Commitments - In connection with the Program:
(a) Subject to the terms and conditions of this Agreement and each Addendum
thereto, RadioShack agrees that, after the Effective Date and in the Territory,
it will not:
(i) solicit an order for a service which is competitive with the Services
offered by Sprint or Sprint Spectrum and which are listed and
described on any Addendum attached hereto specifically including, but
not limited to, a competitor's long distance telephone service, local
telephone service, including network services, PCS, paging service, or
internet access;
(ii) offer for sale a competitor's Product/Service Bundle which is
competitive with a Product/Service Bundle offered by Sprint or Sprint
Spectrum through RadioShack;
(iii)offer for sale a third party product which is competitive with a
Product offered by Sprint or Sprint Spectrum through RadioShack and
which is listed and described on any Addendum attached hereto; or
(iv) do any of the activities described in Section 4(a)(i)-(iii) through
any Retailer Affiliate which includes the name "RadioShack" or any
RadioShack Mark in the advertised name of such Retailer Affiliate,
without the approval of the Joint Steering Committee.
(b) Notwithstanding Section 4(a) above, no restrictions shall be placed on
the rights of RadioShack to:
(i) offer for sale any product bearing a RadioShack Mark offered for sale
as of the Effective Date or at any time thereafter;
(ii) offer for sale a product otherwise subject to Section 4(a) that may be
used only in connection with Cellular Radiotelephone Service and not
in conjunction with PCS (e.g., RadioShack may not sell dual-mode
handsets that may be used both with Cellular Radiotelephone Service
and PCS without Sprint Spectrum's written consent), accessories that
may be used with either Cellular Radiotelephone Services or PCS, or to
solicit an order for the sale of Cellular Radiotelephone Service;
(iii)offer for sale any products otherwise subject to Section 4(a) supplied
by an existing vendor to RadioShack and offered or sold by RadioShack
as of the Effective Date and to continue to offer the same until such
time RadioShack is able to conduct an orderly transition out of such
competitive products in a commercially reasonable manner, and with
respect to pagers and paging service, until such time Sprint or Sprint
Spectrum is able to offer a reasonably competitive product; or
(iv) offer for sale any product through RadioShack's catalogs, including
the current or future RadioShack, RadioShack Unlimited or RadioShack
Gift Express catalogs, mail order, telephone order or internet
programs; provided, however, RadioShack will not market or otherwise
offer for sale in the Merchandising Display or in an area of the
Retail Store immediately adjacent to the Merchandising Display (taking
into account and allowing for the relatively small floor plan of a
typical Retail Store) any product or service competitive to the
Products and Services merchandised in the Merchandising Display,
except for (1) telecommunication products or services bearing a
RadioShack Mark, or (2) any other third party branded product or
service with respect to which Sprint and Sprint Spectrum have given
their prior written approval.
(c) During the term of this Agreement:
(i) Except as provided in subsection 4(c)(ii) below, RadioShack will have
the exclusive use of the Combination Marks only in connection with the
Program;
(ii) Sprint and Sprint Spectrum have the right to use the Combination Marks
only in connection with the Program.
(iii)Except for the Combination Marks, neither Sprint nor Sprint Spectrum
will create or use in the marketing or sale of Products or Services
the Combination Mark Format; provided, however, Sprint or Sprint
Spectrum will have the right to use the specific Mark combinations set
forth on the Excluded Marks Addendum with the name of any other Person
or Retailer including RadioShack (provided the name "RadioShack" is
not used in Combination Mark Format) and may use any Sprint or Sprint
Spectrum Mark together with the name of any individually identified
product or service of Sprint or Sprint Spectrum in connection with the
name of any other Person provided that such use is never interlocked
or connected with the name of a Retailer by the "@" symbol or by the
word "at" if the use of the word "at" is exclusively auditory and not
accompanied by a visual presentation (e.g., both "Sprint Sense at
Retailer" and "Sprint PCS at Retailer" would be permissible usage in
print media and on television if depicted visually, even if
accompanied by audio voice-over, but would not be permissible usage on
radio or on television if not accompanied by a visual depiction of
"Sprint Sense at Retailer." "Sprint Sense @ Retailer" or "Sprint PCS @
Retailer" are not permissible usages no matter what media or
combination of media used because of the inclusion of the "@" symbol);
(iv) Sprint and Sprint Spectrum will make available for sale by RadioShack,
and RadioShack will have the right to: (1) offer for sale or lease, as
applicable all generally available Products, (2) solicit orders for
all generally available Services, and (3) offer or solicit orders for
all generally available Product/Service Bundles which include any of
the Products and Services, offered as of the Effective Date or in the
future by Sprint or Sprint Spectrum, including all mass marketed rate
plans for those Services offered by Sprint or Sprint Spectrum;
provided, however, that Sprint and Sprint Spectrum may offer from time
to time, through direct distribution channels or special third party
corporate promotional programs, Products, Services, rate plans for
such Services, and Product/Service Bundles not advertised as being
generally available through RadioShack Retail Stores if (1) the
general terms and conditions of each such promotion to be offered to
consumers are first communicated to RadioShack by Sprint or Sprint
Spectrum, as the case may be, subject to any applicable
confidentiality agreements with respect to proprietary and
confidential information and (2) RadioShack is compensated in
accordance with the provisions of subsection 4(e) below, if such
promotion is available to, offered by and sold by RadioShack;
(v) All goodwill resulting from the use of individual trademark or service
mark usage as part of the Combination Marks by the Parties inures to
the benefit of the respective individual trademark or service mark
owner. No Party acquires rights, title or interest in the Combination
Marks or the goodwill associated with them, other than the right to
use the Combination Marks in accordance with this Agreement. In
accepting this Agreement, all Parties acknowledge ownership of the
respective individual Marks which comprise the Combination Mark, their
validity and the goodwill connected with them. The Parties further
agree not to make any application to register the Combination Marks.
This paragraph will survive the termination of this Agreement.
(vi) With respect to all Sprint branded consumer, residential, single-line
telephones (other than PCS equipment) Sourced by RadioShack,
RadioShack will have the exclusive right to sell those Products at
retail;
(vii)With respect to all Sprint branded consumer, residential, single-line
telephones (other than PCS equipment) Sourced from a vendor other than
RadioShack ("Sprint Sourced Phones"), RadioShack will be the exclusive
Retailer (other than Sprint or Sprint Spectrum Company Owned Stores)
of such Sprint Sourced Phones to the extent set forth on Addendum
6-Telephone Products;
(viii) Sprint and Sprint Spectrum will each separately designate a national
account manager dedicated to the management of the relationship with
RadioShack created hereunder;
(ix) Sprint and Sprint Spectrum will provide a dedicated 800 or 888 number
to be answered exclusively for customer support of RadioShack 24 hours
per day, seven days per week; and
(x) Sprint and Sprint Spectrum will use all commercially reasonable
efforts to assist Tandy Service, a division of Tandy Corporation, to
obtain from Sprint and Sprint Spectrum's Product vendors authorized
service center agreements permitting Tandy Service to repair all
Products subject to this Agreement.
(d) During the term of this Agreement, neither Sprint nor Sprint Spectrum
will own or lease a Company Owned Store, kiosk or other similar facility not
located within a Retailer, unreasonably close to the current location of any
RadioShack Company Owned Store or participating independent RadioShack dealer or
franchisee's store, all as of the Effective Date.
(e) RadioShack shall be compensated by Sprint or Sprint Spectrum in
accordance with the terms of each Addendum relating to a Product or Service but
in all cases (except Internet products and services and Spree cards) consistent
with the general principles that (1) if the sale of the Product is made or the
order for the Service is placed through a Retail Store, RadioShack is entitled
to be compensated for acquiring that customer, and (2) if on the date of the
sale of the Product or Service order placement the customer is not already a
current Sprint or Sprint Spectrum Service customer, said customer will be given
a unique source code by Sprint or Sprint Spectrum identifying said customer as a
RadioShack acquired customer and RadioShack shall be entitled to receive
residual compensation for the period of time said RadioShack acquired customer
remains a Sprint or Sprint Spectrum customer for any Service during the term of
this Agreement and for two years after the termination of this Agreement. In the
event a RadioShack acquired customer terminates all Service during the term of
this Agreement and subsequently resumes Service with Sprint or Sprint Spectrum
during the term of this Agreement, no residual compensation will be payable to
RadioShack with respect to said re-acquired customer unless such customer is
re-acquired by RadioShack.
(f) With respect to the offer and sale of Products and the solicitation of
orders for Services, the Parties intend this Agreement to be national in scope
and coverage. Subject to the terms and conditions of this Agreement and Addenda
attached hereto (including, without limitation, JSC approval) and unless
precluded by judicial or governmental order or action, RadioShack will commence,
and thereafter continue, the offer and sale of Sprint Spectrum PCS, and will use
commercially reasonable efforts to, and thereafter continue, the offer and sale
of Products and the solicitation of orders for Services as and when agreed as
set forth in this Agreement or any applicable Addendum after such Products
and/or Services are made available in a market within the Territory. Should
RadioShack be precluded by a judicial or governmental order or action from
offering a Product or soliciting an order for a Service, RadioShack will
expeditiously remove the impediment to continuing sales and marketing activities
and, specifically relating to the solicitation of orders for Sprint Spectrum
PCS, RadioShack shall take all necessary action to be able to solicit orders for
Sprint Spectrum PCS. In this regard, RadioShack will negotiate, renegotiate as
necessary, and include in each Cellular Radio Service Referral Agreement
executed between RadioShack and a CRS carrier after the Effective Date the
definition of CRS substantially in the form contained in this Agreement or such
other provisions as are necessary to permit RadioShack to offer for sale PCS
Equipment and solicit orders for Sprint Spectrum PCS or, in the alternative,
obtain from each CRS carrier written assurances that the offer and sale of PCS
Equipment and the solicitation of orders for Sprint Spectrum PCS is not
prohibited by the Cellular Radio Service Referral Agreement executed between
RadioShack and such CRS carrier.
5. Joint Steering Committee - RadioShack will appoint two (2) representatives
and Sprint and Sprint Spectrum will each appoint one (1) representative to serve
as members of a four (4) person Joint Steering Committee, each of whom shall
hold a position of assistant vice-president or higher within each respective
Party. The Joint Steering Committee will be responsible for all joint issues,
including Program rollout timing and strategy, and deciding which Products and
Services will be sold through certain Retail Stores. Consistent with
RadioShack's commitment to Sprint Spectrum PCS set forth in Section 4(f) of this
Agreement, RadioShack, acting through its Joint Steering Committee members, will
not use as a reason for withholding approval of the placement of PCS Equipment
and/or Sprint Spectrum PCS in a Retail Store the existence of a Cellular Radio
Service Referral Agreement with a CRS carrier or the threat of a CRS carrier to
terminate any such agreement if RadioShack introduces Sprint Spectrum PCS into a
Retail Store(s) in that CRS carrier's market(s). The Joint Steering Committee
will also meet to discuss marketing expenditures and strategies and will be
primarily responsible for providing initial approval of all joint
advertisements.
Except as provided in Section 7 below, advertising and market development
fund expenditures, expenses and allowances with regard to specific Products and
Services will not be a subject for the Joint Steering Committee, but rather will
be subject to the guidelines set forth in the specific Addendum related to that
Product or Service. The JSC will establish, from time to time, guidelines for
general routine print, broadcast and electronic media advertising to govern each
Party's unilateral advertising and promotion of the Products and Services and
which also contains one or more of the RadioShack Marks and one or more
Sprint/Sprint Spectrum Marks. Each Party agrees any other Party may unilaterally
advertise the Products and Services in this manner, without JSC approval, but
only if that Party complies in all material respects with the JSC's guidelines
for such advertising.
The Joint Steering Committee will also be responsible for operational and
implementation issues not specifically addressed in this Agreement or the
Addenda.
The JSC will also be responsible for making recommendations regarding
modifications to the terms of this Agreement, including the terms of each
Addendum attached hereto, to respond to market conditions and concerns of the
Parties hereto, subject in all cases to applicable laws, regulations and
contracts with third parties.
The JSC may authorize legal action in the name of any or all Parties in
response to legal threats to the ability of any Party to fulfill their
obligations under this Agreement, and will, in that event, have the authority to
retain counsel and allocate the costs of such counsel and related expenses among
the Parties.
The Joint Steering Committee will meet as often as necessary either in
person or by telephone, but not less than four times per year in person at
mutually acceptable times and locations. Any member of the JSC may be
represented by proxy if unavailable to attend in person or by telephone. Any
Party may call a JSC meeting upon seven (7) days written notice. At each
meeting, each member of the JSC may bring one or more additional advisors,
experts or vendors to participate in the meeting. All decisions by the Joint
Steering Committee must be unanimous to be binding on the Parties.
6. Merchandising Displays
(a) The Parties agree to collaborate on the design and approve the format
of the Merchandising Display for the promotion of the Products and Services to
be placed inside those Retail Stores deemed appropriate by the Joint Steering
Committee. Each Merchandising Display will consist of two categories of
components: (1) a computer interface with related accessories, and (2) fixtures,
each as specified in a Computer Interface, Fixtures, and Floor Plan Design
Addendum to be developed in accordance with Section 6(b) below and attached as
an Addendum hereto.
(b) The Parties acknowledge that the installation of an appropriate
Merchandising Display in the Retail Stores is fundamental and material to
achieving the goals of the Program. The Parties agree to meet and determine the
specifications of the Merchandising Displays including the cost, size and
location of the Merchandising Displays, applicable fixtures and displays within
each representative RadioShack floor plan, and the cost breakdown between the
fixtures and the computer systems, all to be set forth on Addenda to this
Agreement.
(c) Sprint and Sprint Spectrum will each commit, subject to Section 6(b)
above, $[___________], if necessary, for an aggregate total of $[_____________],
to offset the initial costs of the design, development, production, acquisition,
construction and installation of the Merchandising Displays.
(d) RadioShack, by and through its Real Estate Design and Construction
Department, will have charge and supervision of the construction, shipment,
installation, relocation, remodeling and replacement of the Merchandising
Displays in the RadioShack Company Owned Retail Stores. RadioShack, in the
performance of such work, may contract and subcontract with others for portions
of the work in the same manner as done with respect to similar work, provided
Sprint/Sprint Spectrum will have the right to approve all contractors and
subcontractors who are Affiliates of RadioShack. Sprint and Sprint Spectrum will
pay RadioShack for all actual out-of-pocket Merchandising Display Expenditures
advanced, paid or reasonably incurred by RadioShack in the course of doing such
work, provided these costs will not include a profit to RadioShack or include
RadioShack overhead, internal salaries and wages. Payment shall be made within
thirty (30) days of the date of an invoice by RadioShack for such out-of-pocket
Merchandising Display Expenditures. The invoice shall state, in reasonable
detail, the amount and nature of the out-of-pocket Merchandising Display
Expenditures and the date and to whom advanced, paid or incurred. Sprint and
Sprint Spectrum, in like manner, will pay RadioShack for all other out-of-pocket
Merchandising Display Expenditures (and any other costs, charges or expenditures
allocable to Sprint and Sprint Spectrum under this Agreement) advanced, paid or
incurred by RadioShack.
(e) Sprint and Sprint Spectrum will each have and retain all right, title
and interest to the Merchandising Displays. RadioShack will have the right to
relocate and reinstall an existing Merchandising Display upon the relocation or
closure of each respective Retail Store at RadioShack's sole cost and expense.
(f) The Parties will determine as part of the process set forth in Section
6(b) above the per store cost of the Merchandising Display for each of the
representative RadioShack Retail Store floor plans and the incremental cost over
the budgeted construction cost of installing a new Merchandising Display in a
newly builtout Retail Store. With respect to each newly builtout RadioShack
Company Owned Store opened after the Effective Date, Sprint and Sprint Spectrum
will pay the incremental cost reasonably incurred to install the Merchandising
Display in such newly builtout RadioShack Company Owned Stores, which
incremental cost shall be capped at and will not exceed the appropriate per
store cost of the Merchandising Display for an existing Retail Store on the
Effective Date.
(g) After the initial installation, RadioShack will bear the cost of
insuring, maintaining and repairing the fixtures contained in the Merchandising
Display (including replacement due to casualty loss or damage), but not the
computer interface. After the initial installation, Sprint and Sprint Spectrum
will bear the cost of insuring, maintaining, repairing and replacing the
computer interface in the Merchandising Display (including replacement due to
casualty loss or damage).
(h) If the Merchandising Display becomes obsolete, in whole or in part, or
needs remodeling, each as determined by the Joint Steering Committee, the costs
of remodeling or obsolescence replacement of the Merchandising Displays will be
borne by Sprint and Sprint Spectrum. Upon obsolescence or as otherwise
determined by the JSC, RadioShack will have the right to sell or otherwise
dispose of such Merchandising Displays at RadioShack's sole cost and the right
to retain the proceeds of any such sale or disposition without accounting to
Sprint or Sprint Spectrum, provided, however, that Sprint and Sprint Spectrum
shall have an option to retain the entirety or any useable portion of the
Merchandising Display upon replacement, by giving RadioShack written notice
within thirty (30) days after receiving written notice of RadioShack's intent to
sell or otherwise dispose of such Merchandising Display. If Sprint and Sprint
Spectrum exercise this option, the unamortized cost of such Merchandising
Display(s) or useable portion thereof shall be credited against the unamortized
costs referenced in Section 20(b) below.
(i) Sprint and Sprint Spectrum hereby grant to Tandy Cabinets, a division
of TE Electronics Inc., a wholly owned subsidiary of Tandy Corporation, a right
to bid on the fabrication and construction of the fixtures for the Merchandising
Display.
(j) Sprint and Sprint Spectrum shall be responsible for all personal
property taxes due and payable attributable to the Merchandising Displays. The
Parties shall cooperate in exchanging information necessary for a Party to file
any necessary tax returns with respect to its property. Sprint and Sprint
Spectrum will be responsible for filing all personal property tax returns with
respect to the Merchandising Displays and for the payment of all personal
property taxes in connection therewith. RadioShack will reimburse Sprint and
Sprint Spectrum for 50% of the taxes actually paid by Sprint and Sprint Spectrum
within thirty (30) days after receipt of an invoice from Sprint and/or Sprint
Spectrum with supporting documentation of the tax and payment thereof attached.
7. Program Expenses
(a) Market Launch Expenditures. Each Party will use commercially reasonable
efforts to reach the Market Launch Date no later than October 1, 1997. Sprint
will contribute $[___________] and Sprint Spectrum will contribute $[__________]
and RadioShack will contribute $[___________] to the initial promotion of the
rollout of the Program after the Market Launch Date. The Joint Steering
Committee will determine when and how to spend the combined $[___________], and
what expenditures will be counted as market launch expenditures as distinguished
from expenditures under subsection (b) below.
(b) Unilateral Advertising Commitments.
(i) During the term of this Agreement, RadioShack will include those
Combination Marks or Sprints Marks, as appropriate, in all RadioShack
advertising related to or including any of the Products or Services,
including but not limited to, print, broadcast and electronic media.
The Parties agree that RadioShack spend at least $[_____________] and
Sprint will spend at least $[_____________] and Sprint Spectrum will
spend at least $[_____________] of such Party's respective advertising
budgets for each of the first two twelve (12) month periods beginning
on the Market Launch Date, and the first anniversary thereof during
the term of this Agreement for the broadcast, print or electronic
media marketing and communications of the Products and Services. These
promotions will include one or more of the Combination Marks in
advertising consistent with the standards adopted by the Joint
Steering Committee. Beginning for the calendar year beginning January
1, 1999, each Party's advertising commitment under this subsection
(b)(i) will remain the same as their commitment for the immediately
preceding calendar year, unless such Party notifies the other Party at
least six (6) months before (beginning July 1, 1998 and each year
thereafter) the beginning of such year of that Party's desire to
change their commitment and before September 30, before the beginning
of such year (beginning September 30, 1998, and each year thereafter),
the respective Party discloses through their respective JSC member the
size of the Party's commitment, provided in no event will the size of
any Party's (i.e., Sprint and Sprint Spectrum collectively for these
purposes, and RadioShack) commitment under this subsection (b)(i) be
less than $[______________]. Each Party will be obligated to satisfy
that commitment, provided, neither party will be obligated to spend
more than the amount that is the lower of the two (2) amounts
submitted to the JSC.
(ii) Each Party may satisfy its obligation under this Section as that Party
decides in its sole discretion, provided that advertising generally
will include direct mail, newspaper inserts, television and radio
campaigns, Yellow Page advertising including the Sprint Marks or the
Sprint Spectrum Marks, RadioShack Marks and the Combination Marks, and
conspicuous store signage within each Retail Store, all subject to the
prior approval of the JSC and each Party pursuant to the terms of
their respective Mark licenses or their respective advertising
guidelines concerning Marks.
(iii)Nothing in this Section prohibits Sprint or Sprint Spectrum from
tagging or promoting any other Retailer or distribution channel in
advertising which is not designated as part of the commitment set
forth in Section 7(b)(i) above, provided the advertising does not
include any of the Combination Marks or violate Section 4(c)(i) above.
(c) Training Costs. The Parties intend that Sprint and Sprint Spectrum will
provide trainers for the purpose of training designated RadioShack employees
("RadioShack Trainers") who then will train all appropriate RadioShack employees
with respect to the Products and Services. The Joint Steering Committee will
determine the appropriate level of necessary training and the specific details
of such training. Sprint and Sprint Spectrum will be responsible for all
reasonable costs relating to the initial training of RadioShack Trainers with
respect to their individual Products and Services, and any subsequent training
of the RadioShack Trainers with respect to, and including but not limited to,
existing or new Products and Services offered during the term of this Agreement,
by such Party. Except as provided below, RadioShack will be responsible for all
costs relating to the cost of training RadioShack's employees and the cost of
meeting internal certification standards. RadioShack will pay one-half, Sprint
one-fourth, and Sprint Spectrum one-fourth of the costs of developing a
certification module for the Program and incorporating said module into
RadioShack's training program. Except as provided above, RadioShack will pay
one-half, Sprint one-fourth, and Sprint Spectrum one-fourth of the training
costs of RadioShack's employees and of meeting internal certification standards
in the following manner: RadioShack will pay one-half, Sprint one-fourth, and
Sprint Spectrum one-fourth of the initial cost of production of the
certification materials and test sheets, in a total amount estimated to be less
than $25,000 (each one-fourth to be estimated to be less than $6,250). Sprint
will pay one-half and Sprint Spectrum will pay one-half of the cost of a
certification training video (estimated total cost to be between $25,000 and
$50,000). Sprint will pay one-half and Sprint Spectrum will pay one-half of the
duplication cost of a certification training video (estimated to be $3 per tape
for 5,000 tapes for a total of $15,000). RadioShack agrees to distribute these
video tapes at no cost to Sprint and Sprint Spectrum. RadioShack will pay
one-half, Sprint one-fourth and Sprint Spectrum one-fourth of the maintenance of
this program, up to a maximum of $10,000 total per year ($2,500 per one-fourth).
The certification material and video must be approved by the JSC before
distribution and use thereof.
(d) Payment. The Party paying, advancing or incurring any cost or expense
under this Agreement shall invoice the other Party for the other's allocable
share. The other Party will pay its share within thirty (30) days of such
invoice.
(e) Other Program Expenses. The Parties anticipate that there will be
additional costs and expenses incurred by the Parties with respect to the
Program during the term of this Agreement. Unless otherwise mutually agreed by
the Parties, all such costs and expenses will be borne entirely by the Party
incurring such costs and expenses.
8. Acceptance of Orders for Services and Cancellation, Customer Service,
Discontinuance of Service or Shortage of Capacity
(a) Orders submitted by customers who sign up through RadioShack for Sprint
or Sprint Spectrum Services are not binding on Sprint or Sprint Spectrum until
accepted by Sprint or Sprint Spectrum. Each of Sprint and Sprint Spectrum
reserve the right at its sole discretion to decline to accept any order for
their respective Services solicited or taken by RadioShack, provided Sprint and
Sprint Spectrum, as the case may be, will not discriminate against or apply any
more stringent standards upon RadioShack customers than any other potential
Sprint or Sprint Spectrum customer. Sprint and Sprint Spectrum may, for a valid
business purpose, cancel or suspend any order for Services, either in whole or
in part, without liability to RadioShack, at any time after acceptance by Sprint
and Sprint Spectrum. Sprint and Sprint Spectrum further reserve the right to
allocate their Services during periods of shortages without incurring any
liability to RadioShack for payment of compensation hereunder. Sprint and Sprint
Spectrum may discontinue offering for sale or the actual sale of any Product or
Service, notwithstanding the fact that it may be listed on any of the attached
Addenda, provided in such event, RadioShack may offer in the Retail Store a
competitor's products or services (provided such products and services are not
merchandised in the immediate vicinity of the Merchandising Display) to replace
those Products or Services discontinued by Sprint or Sprint Spectrum, unless
such discontinued Products or Services are replaced by Sprint or Sprint Spectrum
with reasonably comparable services within a reasonable time after such
discontinuation.
(b) Sprint and Sprint Spectrum shall provide customer service for their
respective Services in accordance with each of their respective standard
practices and customer agreements. Customers for Services will be customers of
Sprint and/or Sprint Spectrum and shall remain customers of Sprint and/or Sprint
Spectrum after termination of this Agreement.
(c) Customer installation dates given by Sprint and Sprint Spectrum shall
be approximate only.
9. Sprint Trademark License
(a) License. Sprint grants to RadioShack a non-exclusive, nontransferable,
revocable license, without the right to sublicense, to use the Sprint Marks as
set forth in the Agreement in the Territory in connection with the provision of
the Products and Services set forth on the Addenda attached hereto. For
Services, RadioShack has the right to use the Sprint Marks to promote and
solicit orders for those Sprint Services identified in the Addenda. For
Products, RadioShack has the right to use the Sprint Marks on those quantities
of RadioShack-sourced residential consumer telephones, as defined herein,
approved by Sprint, and to promote, offer for sale and sell Sprint-sourced
Products identified in the Addenda, provided, nothing in this Agreement permits
RadioShack to use Sprint Marks to brand, co-brand or dual-brand any products or
services without Sprint's prior written consent, which consent may be withheld
in Sprint's sole discretion for any reason, including but not limited to failure
to be supplied with acceptable product warranties and indemnification relating
to such products.
(b) Use of Marks. RadioShack agrees to use the Sprint Marks only as set
forth in the Sprint Trademark Usage Guidelines, and in this Agreement and to
follow the standards of quality established by Sprint. RadioShack must not use
the Sprint Marks in combination with any other trade name, trademark or service
mark, including RadioShack's Marks except as otherwise set forth in the Sprint
Trademark Usage Guidelines and in this Agreement, without the prior written
approval of Sprint.
(c) Sprint or Sprint Spectrum after providing written notice to RadioShack
of a breach of any trademark license provision, and after providing a reasonable
time to cure such breach, but not less than thirty (30) days, may, at its
option, take those actions reasonably necessary to protect Sprint or Sprint
Spectrum's trademark rights. Notwithstanding the foregoing, a breach of these
license provisions may give rise to irreparable injury; consequently, Sprint or
Sprint Spectrum may seek injunctive relief without entering into any dispute
resolution or arbitration process.
(d) Control of Marks.
(i) Sprint has the right, at all reasonable times, to inspect RadioShack's
relevant facilities and review the manner in which RadioShack provides
products and services so that Sprint may satisfy itself that the
products and services with which the Sprint Marks are used meet
Sprint's established standards.
(ii) RadioShack agrees to adhere to the trademark usage guidelines
furnished by Sprint for the depiction of the Sprint Marks (" Sprint
Trademark Usage Guidelines"). The attached Exhibit 9(d)(ii) "Summary
of Brand Identity Standards, December, 1995" will function as the
current ver- sion of the Sprint Trademark Usage Guidelines.
(iii)RadioShack agrees to include on the packaging of each
RadioShack-sourced, Sprint-branded Product, on all advertising and
promotional materials, and on all labels bearing any of the Sprint
Marks the following notice:
"[Sprint Mark] is a registered* trademark of Sprint Communi-
cations Company L.P. Used under license."
* "Registered" - to be used only when the Mark is
registered in the USPTO.
(iv) RadioShack agrees that, except with respect to materials substantially
identical to materials that have previously been approved, it will
furnish to Sprint for trademark usage approval prior to any use of the
Sprint Marks a sample of each use of the Sprint Marks that is
different from previously approved usages on advertising, promotional
materials, packaging and labels. RadioShack agrees to amend the use of
the Sprint Marks in any such advertising, promotional materials,
packaging or labels if the use of the Sprint Marks is not approved by
Sprint in accordance with the terms of this Agreement. RadioShack will
use all commercially reasonable efforts to provide sufficient
submission lead times to allow Sprint adequate review and approval
time on trademark usage of Sprint Marks by RadioShack. Sprint will use
all commercially reasonable efforts to provide trademark usage review
and approval within the time constraints applicable to the conduct of
RadioShack's retail operations and the specific advertising,
promotional, packaging or label usage proposed for the Sprint Marks.
If, however, such approval is not received by RadioShack within 5
business days of the date of receipt by Sprint of such materials, such
materials will be deemed approved unless Sprint and RadioShack agrees
on a longer period of time for approval of specific materials. All
materials will be sent for approval to:
Patrice Dougherty, Sr. Intellectual Property Analyst
Sprint Communications Company L.P.
8140 Ward Parkway
Kansas City, MO 64114
Facsimile: (913) 624-6388
(v) RadioShack must not offer for sale, advertise, promote, distribute, or
use for any purpose any RadioShack-sourced, Sprint-branded Product or
associated packaging that is damaged, defective, is a second, or that
otherwise fails to meet the specifications and quality requirements
listed in Exhibit 12(c)(i) without the prior written consent of
Sprint.
(e) Royalties. Sprint provides this license royalty-free to RadioShack.
(f) Rights in Marks.
(i) All uses of the Sprint Marks by RadioShack inure to the benefit of
Sprint. RadioShack acquires no rights, title or interest in the Sprint
Marks or the goodwill associated with them, other than the right to
use the Sprint Marks in accordance with this Agreement. In accepting
this Agreement, RadioShack acknowledges Sprint's ownership of the
Sprint Marks, their validity and the goodwill connected with them.
RadioShack shall not attack the Sprint Marks, nor assist anyone in
attacking them. RadioShack further agrees not to make any application
to register the Sprint Marks, nor to use any confusingly similar
trademark, service mark, trade name, or derivation, during the term of
this Agreement or thereafter. This paragraph will survive the
termination of this Agreement.
(ii) At the request of Sprint, RadioShack will execute any papers or
documents reasonably necessary to protect the rights of Sprint in the
Sprint Marks and execute and deliver such other documents as may be
reasonably requested by Sprint. (g) Infringement. RadioShack shall
promptly notify Sprint of any unauthorized use of the Sprint Marks
that comes to RadioShack's attention. Sprint in its sole discretion
may take such action as may be required to prosecute the infringement.
In the event that Sprint decides that action should be taken against
such third parties, Sprint may take such action either in its own
name, or alternatively, Sprint may authorize RadioShack to initiate
such action in RadioShack's name. In either event, RadioShack agrees
to cooperate fully with Sprint to whatever extent it is necessary to
prosecute such action, all expenses being borne by Sprint and all
damages which may be recovered being solely for the account of Sprint.
(h) Indemnification.
(i) Except as set forth herein and in Section 18 of this Agreement,
RadioShack shall defend, indemnify and hold harmless Sprint and Sprint
Spectrum, their subsidiaries, officers, agents, employees and
Affiliates from all Damages arising out of or resulting from any act
or omission of RadioShack relating to claims for unauthorized use or
misuse of any Sprint/Sprint Spectrum Mark. Notwithstanding the above,
RadioShack shall not be responsible for and shall not defend,
indemnify or hold harmless Sprint or Sprint Spectrum from any Damages
arising out of or resulting from claims of trademark infringement that
are based solely on depicting the Sprint/Sprint Spectrum Marks in
accordance with the Sprint Trademark Usage Guidelines, or pursuant to
other authorization by Sprint or Sprint Spectrum, as the case may be.
10. Sprint Spectrum Trademark License
Sprint Spectrum has no marks to be licensed under this Agreement. If the
Parties later desire to license any Sprint Spectrum Marks, they agree to
negotiate a Trademark License substantially similar to the Trademark Licenses
provisions contained in this Agreement.
11. RadioShack Trademark License
(a) License. RadioShack grants to Sprint and Sprint Spectrum each a
non-exclusive, nontransferable, revocable license, without the right to
sublicense, to use the RadioShack Marks as set forth in this Agreement in the
Territory in connection with the promotion of the sale and use of the Products
and Services set forth on the Addenda attached hereto.
(b) Use of Marks. Sprint and Sprint Spectrum agree to use the RadioShack
Marks only as set forth in this Agreement and to follow the standards of quality
established by RadioShack. Sprint and Sprint Spectrum must not use the
RadioShack Marks in combination with any other trade name, trademark or service
mark, except as otherwise set forth in the RadioShack Trademark Usage Guidelines
in this Agreement, without the prior written approval of RadioShack.
(c) RadioShack after providing written notice to a Sprint or Sprint
Spectrum of a breach of any trademark license provision, and after providing a
reasonable time to cure such breach, but not less than thirty (30) days, may, at
its option, take those actions reasonably necessary to protect RadioShack's
trademark rights. Notwithstanding the foregoing, a breach of these license
provisions may give rise to irreparable injury; consequently, RadioShack may
seek injunctive relief without entering into any dispute resolution or
arbitration process.
(d) Control of Marks.
(i) Sprint and Sprint Spectrum agree to adhere to the trademark usage
guidelines furnished by RadioShack for the depiction of the RadioShack
Marks ("RadioShack Trademark Usage Guidelines"). The attached Exhibit
11(d)(ii) will function as the current version of the RadioShack
Trademark Usage Guidelines.
(ii) Sprint and Sprint Spectrum agree to include on all advertising and
promotional materials bearing any of the RadioShack Marks the
following notice:
"[RadioShack Mark] is a registered* Trademark of Technology
Properties,Inc. Used under license."
* "Registered" to be used only when the Mark is registered in the
USPTO.
(iii)Sprint agrees that, except with respect to materials substantially
identical to materials that have previously been approved, it will
furnish to RadioShack for trademark usage approval prior to any use of
the RadioShack Marks a sample of each use of the RadioShack Marks that
is different from previously approved usages on advertising,
promotional materials, packaging and labels. Sprint agrees to amend
the use of the RadioShack Marks in any such advertising, promotional
materials, packaging or labels if the use of the RadioShack Marks is
not approved by Radioshack in accordance with the terms of this
Agreement. Sprint will use all commercially reasonable efforts to
provide sufficient submission lead times to allow RadioShack adequate
review and approval time on trademark usage of RadioShack Marks by
Sprint. Radioshack will use all commercially reasonable efforts to
provide trademark usage review and approval within the time
constraints applicable to the conduct of Sprint's operations and the
specific advertising, promotional, packaging or label usage proposed
for the RadioShack Marks. If, however, such approval is not received
by Sprint within 5 business days of the date of receipt by RadioShack
of such materials, such materials will be deemed approved unless
Sprint and RadioShack agree on a longer period of time for approval of
specific materials. All materials will be sent for approval to:
General Counsel
Tandy Corporation
1800 One Tandy Center
Fort Worth, TX 76102
(e) Royalties. RadioShack provides this license royalty-free to Sprint and
Sprint Spectrum.
(f) Rights in Marks.
(i) All uses of the RadioShack Marks by Sprint and Sprint Spectrum inure
to the benefit of RadioShack. Sprint and Sprint Spectrum acquire no
rights, title or interest in the RadioShack Marks or the goodwill
associated with them, other than the right to use the RadioShack Marks
in accordance with this Agreement. In accepting this Agreement, Sprint
and Sprint Spectrum acknowledge RadioShack's ownership of the
RadioShack Marks, their validity and the goodwill connected with them.
Sprint and Sprint Spectrum shall not attack the RadioShack Marks, nor
assist anyone in attacking them. Sprint and Sprint Spectrum further
agree not to make any application to register the RadioShack Marks,
nor to use any confusingly similar trademark, service mark, trade
name, or derivation, during the term of this Agreement or thereafter.
This paragraph will survive the termination of this Agreement.
(ii) At the request of RadioShack, Sprint and Sprint Spectrum will execute
any papers or documents reasonably necessary to protect the rights of
RadioShack in the RadioShack Marks and execute and deliver such other
documents as may be reasonably requested by RadioShack.
(g) Infringement. Sprint and Sprint Spectrum shall promptly notify
RadioShack of any unauthorized use of the RadioShack Marks that comes to Sprint
or Sprint Spectrum's attention. RadioShack in its sole discretion may take such
action as may be required to prosecute the infringement. In the event that
RadioShack decides that action should be taken against such third parties,
RadioShack may take such action either in its own name, or alternatively,
RadioShack may authorize Sprint or Sprint Spectrum to initiate such action in
Sprint or Sprint Spectrum's name. In either event, Sprint and Sprint Spectrum
agree to cooperate fully with RadioShack to whatever extent it is necessary to
prosecute such action, all expenses being borne by RadioShack and all damages
which may be recovered being solely for the account of RadioShack.
(h) Indemnification.
(i) Except as set forth herein and in Section 18 of this Agreement, Sprint
and Sprint Spectrum, as the case may be, shall defend, indemnify and
hold harmless RadioShack, its officers, agents, employees and
Affiliates from all Damages arising out of or resulting from any act
or omission of Sprint or Sprint Spectrum, as the case may be, relating
to claims for unauthorized use or misuse of any RadioShack Mark.
Notwithstanding the above, Sprint and Sprint Spectrum shall not be
responsible for and shall not defend, indemnify or hold harmless
RadioShack from any Damages arising out of or resulting from claims of
trademark infringement that are based solely on depicting the
RadioShack Marks in accordance with the RadioShack Trademark Usage
Guidelines, or pursuant to other authorization by RadioShack.
(ii) Except as set forth herein and in Section 18 of this Agreement,
RadioShack shall defend, indemnify and hold harmless Sprint and Sprint
Spectrum, their subsidiaries, offices, agents, employees and
Affiliates from all Damages arising out of the proper use of
RadioShack Marks.
12. Quality Control and Approval
(a) Quality Control, Approvals, and Samples--RadioShack-Sourced Products.
(i) RadioShack agrees that RadioShack-sourced, Sprint-branded products
will meet the applicable quality and standard requirements furnished
by Sprint ("Sprint Quality Standards"). The Attached Exhibit 12(a)(i)
will function as the current version of the Sprint Quality Standards.
Approval of a particular product pursuant to Section 12(a)(ii) below
will not be deemed a waiver of any of the quality and standard
requirements set forth in Exhibit 12(a)(i) with respect to any other
product.
(ii) RadioShack agrees to submit a reasonable number of representative
samples of each RadioShack-sourced, Sprint-branded product at no cost
for review and written approval prior to any use, sale or other
distribution by RadioShack. RadioShack must not distribute any
RadioShack-sourced, Sprint-branded product until final approval of
such samples is received in writing from Sprint, such approval not to
be unreasonably withheld. Samples are to be provided to the person
designated by Sprint in writing to RadioShack.
(iii)RadioShack agrees that all RadioShack-sourced, Sprint-branded products
that it advertises, distributes and sells will be substantially
identical to and of no lesser quality than the final samples approved.
RadioShack agrees to submit to Sprint for written approval any
proposed change from the final samples approved involving any material
alteration in the form fit and structure, design or quality of the
RadioShack-sourced, Sprint-branded products prior to RadioShack's
advertisement, sale or distribution.
(b) Quality Control, Approvals, and Samples--Sprint-Sourced Products.
(i) Sprint agrees that the Sprint-sourced, Sprint-branded Products will
meet the applicable quality and standard requirements furnished by
RadioShack ("RadioShack Quality Standards"). The Attached Exhibit
12(b)(i) will function as the current version of the RadioShack
Quality Standards. Approval of a particular product pursuant to
Section 12(b)(ii) below will not be deemed a waiver of any of the
quality and standard requirements set forth in Exhibit 12(b)(i) with
respect to any other product.
(ii) Sprint agrees to submit a reasonable number of representative samples
of each Sprint-sourced, Sprint-branded product at no cost for review
and written approval prior to any use, sale or other distribution by
RadioShack. RadioShack must not distribute any Sprint-sourced,
Sprint-branded product until final approval of such samples is
received in writing from Sprint, such approval not to be unreasonably
withheld. Samples are to be provided to the person designated by
RadioShack in writing to Sprint.
(iii)Sprint agrees that all Sprint-sourced, Sprint-branded products that
Sprint advertises, distributes and sells will be substantially
identical to and of no lesser quality than the final samples approved.
Sprint agrees to submit to RadioShack for written approval any
proposed change from the final samples approved involving any material
alteration in the form fit and structure, design or quality of the
Sprint-sourced, Sprint-branded products prior to RadioShack's
advertisement, sale or distribution.
13. Copyright and Patent Indemnification and Infringement
(a) RadioShack shall promptly notify Sprint or Sprint Spectrum of any event
of third party infringement of Sprint or Sprint Spectrum copyrights in a work or
authorship related to this Agreement ("Works") that comes to RadioShack's
attention. RadioShack agrees to reasonably assist Sprint and Sprint Spectrum in
the prosecution of any claim or lawsuit against infringement of the Sprint or
Sprint Spectrum Works by providing such relevant evidence as RadioShack may have
within its control. Sprint and Sprint Spectrum agree to reimburse RadioShack for
RadioShack's out-of-pocket expenses (including attorney's fees and expenses)
reasonably and solely incurred in providing such evidence and reasonable
assistance. To the extent permitted by law, RadioShack shall have the right to
intervene at its own expense in any legal proceedings affecting its copyrights.
Sprint and Sprint Spectrum may at their own expense and in the exercise of their
sole discretion bring a claim or lawsuit to restrain any infringement of the
Sprint and Sprint Spectrum Works, in its own name, and shall be entitled to
receive and retain for its own use and benefit any recovery awarded in such
lawsuit. Sprint and Sprint Spectrum may only name RadioShack as a plaintiff or
join RadioShack as a party to any such lawsuit after obtaining RadioShack's
prior written permission and after Sprint and Sprint Spectrum have agreed in
writing to reimburse RadioShack for all reasonable attorney's fees, costs and
expenses incurred.
Sprint and Sprint Spectrum shall defend, indemnify and hold RadioShack
harmless from any Damages imposed on or incurred by RadioShack as a result of
any claim or lawsuit brought against RadioShack: (A) claiming direct or
contributory infringement or inducement to infringe a third party's patent,
copyright or similar intellectual property of right arising out of RadioShack's,
Sprint's or Sprint Spectrum's importing, using, soliciting orders for, or
selling Products or Services supplied by Sprint or Sprint Spectrum or made to
specifications supplied by Sprint or Sprint Spectrum for compatibility with the
Services; (B) claiming contributory infringement of or inducement to infringe a
third party's patent, copyright or similar intellectual property right arising
out of RadioShack's: (1) importing or making Products for sale; or (2) using or
selling Products or products, in association with the Services of Sprint or
Sprint Spectrum, wherein such Products or products do not directly infringe such
third party's intellectual property right; or (C) claiming infringement of a
third party's copyright or similar intellectual property right resulting from
RadioShack's exercise of any of the exclusive rights of an owner of copyright or
similar intellectual property right with respect to any work or material
supplied by Sprint or Sprint Spectrum under this Agreement for use by
RadioShack, provided that RadioShack complies with the procedure set forth in
Section 14(g) below.
(b) Sprint or Sprint Spectrum shall promptly notify RadioShack of any event
of third party infringement of RadioShack copyrights in a work or authorship
related to this Agreement ("Works") that comes to Sprint or Sprint Spectrum's
attention. Sprint or Sprint Spectrum agrees to reasonably assist RadioShack in
the prosecution of any claim or lawsuit against infringement of RadioShack Works
by providing such relevant evidence as Sprint or Sprint Spectrum may have within
its control. RadioShack agrees to reimburse Sprint or Sprint Spectrum for Sprint
or Sprint Spectrum's out-of-pocket expenses (including attorney's fees and
expenses) reasonably and solely incurred in providing such evidence and
reasonable assistance. To the extent permitted by law, Sprint or Sprint Spectrum
shall have the right to intervene at its own expense in any legal proceedings
affecting Sprint's or Sprint Spectrum's copyrights. RadioShack may at
RadioShack's own expense and in the exercise of RadioShack's sole discretion
bring a claim or lawsuit to restrain any infringement of the RadioShack Works,
in its own name, and shall be entitled to receive and retain for its own use and
benefit any recovery awarded in such lawsuit. RadioShack may only name Sprint or
Sprint Spectrum as a plaintiff or join Sprint or Sprint Spectrum as a party to
any such lawsuit after obtaining Sprint or Sprint Spectrum's prior written
permission and after RadioShack agrees in writing to reimburse Sprint or Sprint
Spectrum for all reasonable attorney's fees, costs and expenses incurred.
RadioShack shall defend, indemnify and hold Sprint or Sprint Spectrum
harmless from any Damages imposed on or incurred by Sprint or Sprint Spectrum as
a result of any claim or lawsuit brought against Sprint or Sprint Spectrum: (A)
claiming direct or contributory infringement of or inducement to infringe a
third party's patent, copyright or similar intellectual property right arising
out of Sprint or Sprint Spectrum's or RadioShack's importing, using, soliciting
orders for, or selling products or services supplied by RadioShack or made to
specifications supplied by RadioShack for compatibility with the Services; (B)
claiming contributory infringement of or inducement to infringe a third party's
patent, copyright or similar intellectual property right arising out of Sprint
or Sprint Spectrum's: (1) importing or making products for sale; or (2) using or
selling Products or products, in association with the services of RadioShack,
wherein such Products or products do not directly infringe such third party's
intellectual property right; or (C) claiming infringement of a third party's
copyright or similar intellectual property right resulting from Sprint or Sprint
Spectrum's exercise of any of the exclusive rights of an owner of copyright or
similar intellectual property right with respect to any work or material
supplied by RadioShack under this Agreement for use by Sprint or Sprint
Spectrum, provided that Sprint or Sprint Spectrum as the case may be, comply
with the procedure set forth in Section 14(g) below.
14. Representations and Warranties: Indemnification - Each Party represents
and warrants to the other Parties that:
(a) Due Incorporation or Formation; Authorization of Agreements - The Party
is a limited partnership or corporation as the case may be duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, and is duly qualified or licensed to do business as a foreign
corporation, limited partnership, or entity and is in good standing in each
jurisdiction in which it will conduct business or carry out the transactions
contemplated under this Agreement, if the failure to be so qualified would have
a material adverse effect on the business or assets of the respective Party or
materially affects its ability to perform its obligations hereunder. The Party
has the full power and authority to own its property and carry on its business
as owned and carried on at the date of this Agreement. The Party has the full
power and authority to execute and deliver this Agreement, to perform its
obligations under this Agreement and to consummate the transactions contemplated
by this Agreement. The execution, delivery and performance of this Agreement by
the Party has been duly authorized by all necessary corporate/partnership
action. This Agreement constitutes the legal, valid and binding obligation of
the Party, enforceable in accordance with its terms, subject as to
enforceability limits imposed by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and the availability of equitable
remedies. The Party has all necessary licenses to market and sell the Products
and Service as contemplated by this Agreement.
(b) No Conflict; No Default - Except under subparagraph (b) (iii) with
respect to any lease of any Retail Store and except as set forth on Schedule
14(b), to the best of the knowledge, information and belief of the Party,
neither the execution, delivery and performance of this Agreement nor the
consummation by the Party of the transactions contemplated hereby:
(i) will violate or cause a breach of any of the terms, conditions or
provisions of any existing law, regulation, order, writ, injunction,
decree, determination or award of any governmental authority or any
arbitrator, applicable to such Party,
(ii) will violate or cause a breach of or constitute a default under any of
the terms, conditions or provisions of the certificate or articles of
incorporation or bylaws (or other governing documents) of such Party
or of any material agreement or instrument to which such Party is or
may be bound or to which any of its material properties or assets is
subject, including the course of conduct between the Party and the
other party(ies) to such agreement,
(iii)will violate or cause a breach of, constitute a default under (whether
with notice or lapse of time or both), accelerate or permit the
acceleration of the performance required by, give to others any
interests or rights or require any consent, authorization or approval
under any indenture, mortgage or lease agreement or material financial
obligation to which such Party or by which such Party is or may be
bound, or
(iv) will require any consent, approval or authorization of, or
declaration, filing a registration with, any governmental or
regulatory authority, or
(v) will require any license, other than those currently held by a Party
with the good faith belief that such license will endure or is
renewable and will be renewed by such Party for the full term of this
Agreement, under the intellectual property rights of a third party.
In addition, except as provided in Schedule 14(b) attached to this
Agreement, RadioShack represents and warrants to the other Parties that it has
contacted each of the Cellular Radiotelephone Service Carriers listed on Exhibit
14(b) and that, to the best of its information, knowledge and belief, the
execution, delivery and performance of this Agreement will not violate or cause
a breach or constitute a default under (whether with notice or lapse of time or
both) of any existing contract by and between RadioShack and any of the Cellular
Radio Telephone Service Carriers listed on Exhibit 14(b) in any of the Licensed
Markets listed on Schedule III.1 of the National Agreement to Market Personal
Communications Services Addendum attached hereto.
(c) Litigation - There are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of the Party, threatened against or
affecting the Party or any of its properties, assets or businesses in any court
or before or by any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator which could, if adversely determined (or,
in the case of an investigation, could lead to any action, suit or proceeding,
which if adversely determined could) reasonably be expected to have a material
adverse effect on the Party's ability to perform its obligations under this
Agreement. The Party has not received any currently effective notice of default
under any law, regulation, contract, agreement or otherwise which if not timely
cured could have a material adverse effect on the Party's ability to perform its
obligations under this Agreement. The Party is not in default under any
applicable order, writ, injunction, decree, permit, determination or award of
any governmental authority or any arbitrator which could reasonably be expected
to have a material adverse effect on the Party.
(d) Right to Disclose; Marks, Ownership and Registration - Each Party
warrants that it has the right to disclose all Proprietary Information which it
has disclosed to the other Party pursuant to this Agreement. Except as expressly
provided otherwise in this Agreement, none of the Parties make any
representation or warranty, express or implied, with respect to any Proprietary
Information.
Each respective Party's Marks and the registration thereof are good, valid
and enforceable at law and in equity. Marks which are being applied for and
those for which registrations have not been renewed are not included in this
representation and warranty (it being understood no Party, by this exception,
waives its claim to such Marks and this Agreement shall apply to such Marks even
if only applied for or currently not registered).
(e) Indemnification - Each Party hereto (the "Indemnifying Party") agrees
to indemnify and hold harmless the other Parties hereto and their permitted
assigns, and their partners, officers, directors, employees and agents, and each
of their representatives, and their successors and assigns (collectively, the
"Indemnitees") at all times from and after the Effective Date against and in
respect of any Damages (hereinafter defined) suffered by the Indemnitees as a
direct or indirect result of any claims, actions or demands by a third party,
who is not an Affiliate of a Party hereto, to the extent caused by (i) any
breach of any representation or warranty made by the Indemnifying Party in this
Agreement or any agreement executed by the Indemnifying Party in connection
herewith; (ii) breach or default in the performance by the Indemnifying Party of
any of the covenants to be performed by the Indemnifying Party under this
Agreement or any agreement executed by the Indemnifying Party in connection
herewith; (iii) any debts, liabilities or obligations of the Indemnifying Party,
whether accrued, absolute, contingent, or otherwise, due or to become due; (iv)
any claim by a third party preventing the Indemnifying Party from substantially
performing its material obligations hereunder; (v) the Indemnifying Party's acts
or omissions with respect to any advertising (other than claims arising out of
(A) the proper use of the Indemnified Party's Marks, and (B) advertising that is
specifically approved in form and content by the Parties, or (vi) any other act
or omission of the Indemnifying Party, or any occurrence on the property of the
Indemnifying Party, unrelated to this Agreement. In addition, notwithstanding
any term or provision of any purchase order or Addendum to this Agreement,
RadioShack will indemnify and hold harmless Sprint and Sprint's Indemnitees from
all Damages relating to or arising out of the manufacture, sale or distribution
of any RadioShack-sourced, Sprint-branded products, not attributable to any act
or omission of Sprint or otherwise addressed herein; and notwithstanding any
term or provision of any purchase order or Addendum to this Agreement, Sprint
will indemnify and hold harmless RadioShack and RadioShack's Indemnitees from
all Damages relating to or arising out of the manufacture, sale or distribution
of any Sprint-sourced, Sprint-branded products, not attributable to any act or
omission of RadioShack or otherwise addressed herein. PROVIDED, HOWEVER, that
claims, actions and judgments against an Indemnitee for wrongful or tortious
interference with contractual relationships or wrongful or tortious inducement
of breach of contract or like claims or actions under the case law, statutes or
regulations of any jurisdiction, and all Damages awarded in respect of such
claims (including any actual or punitive damages) are specifically excluded from
this indemnification obligation.
(f) For the purposes of this Agreement and unless otherwise specifically
provided, the term "Damages" shall include (i) all amounts finally awarded or
charged against an Indemnitee and all actual out-of-pocket expenses or costs
incurred by such Indemnitee(s), including reasonable professional and attorneys'
fees and expenses incurred in investigating or in attempting to avoid the same
or oppose the imposition thereof and (ii) interest at a rate per annum equal to
that announced from time to time by the Wall St. Journal as the "prime rate" or
"base rate" (or the legal rate of interest, if lower) from the date thirty (30)
days after notice of any such claim for indemnification under this Agreement is
given, or if an unliquidated claim, from such later date as the claim is
liquidated, to the date full indemnification is made therefor, but Damages shall
not include any amounts for which any one of the Indemnitees actually receives
payment under an insurance policy, excluding self-insured amounts and deductible
amounts.
(g) Promptly upon receipt by it of notice of any demand, assertion, claim,
action or proceeding, judicial or otherwise, with respect to any matter as to
which an Indemnifying Party has agreed to indemnify an Indemnitee under the
provisions of this Agreement, the Indemnitee will give prompt notice thereof in
writing to the Indemnifying Party, together with the statement of such
information respecting such demand, assertion, claim, action or proceeding as
the Indemnitee shall then have. If the Indemnifying Party acknowledges full
liability or potential liability without admitting same under this Agreement,
the Indemnifying Party shall have the right to contest and defend by all
appropriate legal or other proceedings any demand, assertion, claim, action or
proceeding with respect to which it has been called upon to indemnify the
Indemnitee under the provisions of this Agreement; provided, however, that:
(i) notice of intention so to contest shall be delivered to the Indemnitee
within twenty (20) calendar days from the receipt by the Indemnifying
Party of notice of the assertion of such demand, assertion, claim,
action or proceeding;
(ii) the Indemnifying Party will pay all costs and expenses of such contest
or defense, including all attorneys' and accountants' fees, and the
cost of any bond required by law to be posted in connection with such
contest or defense;
(iii)such contest or defense shall be conducted by reputable attorneys
employed by the Indemnifying Party and reasonably approved by the
Indemnitee, at the Indemnifying Party's sole cost and expense, but the
Indemnitee shall have the right to participate in such proceedings and
to be represented by attorneys of its own choosing, at the
Indemnitee's cost and expense without contribution or indemnification
by the Indemnifying Party for such costs or expenses;
(iv) if after such opportunity, the Indemnifying Party does not elect to
assume the defense in any such proceedings, the Indemnifying Party
shall be bound by the results obtained by the Indemnitee, including
without limitation any out-of-court settlement or compromise;
(v) if the Indemnifying Party assumes the defense, the Indemnitee(s) will
not settle, or attempt to settle, such claim without the Indemnifying
Party's consent; and
(vi) the Indemnifying Party will not settle any claim without the prior
written consent of the Indemnitees, unless the settlement contains a
complete and unconditional release of the Indemnitee(s), and the
settlement does not involve the imposition of any nonmonetary relief
on the Indemnitees.
(h) Remedies in General - No delay or omission on the part of any Party in
exercising any right or remedy shall operate as a waiver of said right or remedy
or any other right or remedy. A waiver on any one occasion shall not be
construed as a bar to or a waiver of any right on any future occasion. Every
right and remedy of a Party shall be cumulative and in addition to every other
right and remedy expressed in this Agreement or allowed by law or equity, and
may be exercised singularly or concurrently.
15. Publicity - Except for legally mandated disclosures, any press releases or
public announcements relating to this Agreement or the terms of the Agreement
must be mutually agreed upon by the Parties.
16. Independent Contractors - Nothing contained in this Agreement is intended or
shall be construed to create or establish any agency, partnership, joint venture
or other profit-sharing arrangement, landlord-tenant, or lessor-lessee
relationship between the Parties. No Party shall have any authority, express or
implied, to create or assume any obligation, enter into any agreement, make any
representation or warranty, file any document with any governmental body, or
serve or accept legal process on behalf of any other Party, settle any claim by
or against any other Party, or to bind or otherwise render any other Party
liable in any way to any other person, without the prior express written consent
of the Party to be affected by such action.
17. Product and Service Representations - All Product and Service warranties
will be limited to, and be as set forth, on each respective Addendum attached
hereto. RadioShack will not make to any customer or potential customer any
representation or warranties whatsoever on behalf of Sprint or Sprint Spectrum,
and shall effectively disclaim any authority to make such warranty or
representation on Sprint's or Sprint Spectrum's behalf, to any customer or
potential customer regarding any of the Products or Services, except as
specifically authorized by Sprint or Sprint Spectrum on an Addendum attached
hereto, as appropriate.
Sprint and Sprint Spectrum will not make to any customer or potential
customer any representation or warranty whatsoever on behalf of RadioShack, and
shall effectively disclaim any authority to make such warranty or representation
on RadioShack's behalf, to any customer or potential customer regarding any of
the Products or Services, except as specifically authorized by RadioShack on an
Addendum attached hereto, as appropriate.
18. Limitation of Liability - IN NO EVENT WILL ANY PARTY BE LIABLE TO THE OTHER
PARTIES FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL, PUNITIVE
DAMAGES, OR LIKE DAMAGES, HOWEVER CALLED, OR LOSS OF PROFITS, ARISING FROM THE
RELATIONSHIP OF THE PARTIES OR THE CONDUCT OF BUSINESS UNDER, OR BREACH OF THIS
AGREEMENT, EXCEPT WHERE SUCH DAMAGES, OR LOSS OF PROFITS, ARE CLAIMED BY OR
AWARDED TO A THIRD PARTY IN A CLAIM OR ACTION AGAINST WHICH A PARTY TO THIS
AGREEMENT HAS A SPECIFIC OBLIGATION TO INDEMNIFY ANOTHER PARTY TO THIS
AGREEMENT.
NOTWITHSTANDING ANY INDICATION TO THE CONTRARY HEREIN, IN NO EVENT WILL ANY
PARTY, INCLUDING SPRINT AND SPRINT SPECTRUM, BE LIABLE OR HAVE ANY JOINT AND
SEVERAL OBLIGATION FOR THE INDEMNIFICATION OBLIGATIONS, OR ANY OTHER OBLIGATIONS
OR LIABILITIES, OF ANY OTHER PARTY UNDER THIS AGREEMENT OR ANY ADDENDUM HERETO.
THIS COVENANT DOES NOT AFFECT THE OBLIGATION OF A PARTY TO INDEMNIFY ANOTHER
PARTY AS SPECIFICALLY PROVIDED HEREIN.
19. Termination
(a) Termination Events. No Party will have the right to terminate this
Agreement for a period of thirty-six (36) months after the Effective Date unless
the grounds for termination are:
(i) that another Party has been convicted of a violation of a Federal,
state or local criminal statute and such conviction actually and
materially adversely affects that Party's ability to perform its
obligations under this Agreement;
(ii) that a final judgment has been entered against another Party finding
said Party in violation of a Federal, state or local statute or
regulation and such final judgment actually and materially affects
that Party's ability to perform its obligations under this Agreement;
(iii)that another Party has (a) filed a voluntary petition in bankruptcy or
voluntary petition or an answer seeking reorganization, arrangement,
readjustment of its debts, or any other relief under the Federal
Bankruptcy Code or under any other insolvency act or law now or
hereafter existing, (b) made a general assignment for the benefit of
creditors, or (c) admitted in writing its inability to pay its debts
as they mature;
(iv) that another Party has had (a) an involuntary petition filed against
it seeking reorganization, arrangement, readjustment of its debts, or
any other relief under the Federal Bankruptcy Code or under any other
insolvency act or law now or hereafter existing (b) a receiver or
trustee appointed involuntarily, and such petition or action is not
suspended, stayed or dismissed within sixty (60) days after filing or
appointment, as the case may be.
(v) that a Final Order has been issued by the Arbitrator containing a
finding of a material breach of contract, representation or warranty
given by a Party in this Agreement or of any other material breach of
this Agreement by the Party against which termination is sought; or
(vi) that a Change of Control has occurred involving a Party, other than a
transaction constituting a Change of Control by one Party of another
Party.
With respect to a termination pursuant to subsections (i)-(iv) the Party
seeking termination will provide the other Parties sixty (60) days written
notice following the occurrence of the event creating the grounds for
termination; and, with respect to a termination pursuant to subsection (vi), the
Party seeking termination will provide the other Parties one hundred twenty
(120) days written notice following the occurrence of the event creating the
grounds for termination; and with respect to a termination pursuant to
subsection (v), the Party seeking termination will have the right to an
immediate termination following receipt of the Final Order, but in no event
sooner than sixty (60) days from the date a Party first notifies the others in
writing of a breach.
(b) Intentionally left blank.
(c) Termination after Thirty-Six Months. Each Party may unilaterally
terminate this Agreement at any time after the end of the thirty-sixth (36th)
month after the Effective Date upon one hundred eighty (180) days written notice
following the unsatisfactory conclusion of the Dispute Resolution procedure set
forth in Section 20(a) below. The Parties may by mutual agreement terminate this
Agreement at any time after the end of the thirty-sixty (36th) month after the
Effective Date by the following procedure:
(i) A Party who desires to initiate the mutual termination process
described herein (the "Initiating Party") shall notify each other
Party to this Agreement (each a "Responding Party") in writing
pursuant to Section 26 and signed by the Chief Executive Officer of
the Initiating Party. Such notice shall state conspicuously that it is
a "Notice of Request for Mutual Termination of Master Agreement." The
Notice of Request for Mutual Termination may be withdrawn by the
Initiating Party if the Initiating Party notifies each Responding
Party of such withdrawal in writing signed by the said Chief Executive
Officer prior to receiving the appropriate written responses from all
Responding Parties described below.
(ii) Within thirty (30) days from receipt of a Notice of Request for Mutual
Termination from the Initiating Party or within such extended period
as may be agreed upon by all Parties in writing, each Responding Party
shall respond in writing signed by its Chief Executive Officer to the
Initiating Party and send a copy of its response to the other
Responding Party. The content of such responses shall only state:
a. "Notice of Request for Mutual Termination of Master Agreement by
(Party Name)" (if the Responding Party concurs with the Initiating
Party and wishes to mutually terminate the Master Agreement); or
b. "Rejection of Request for Mutual Termination of Master Agreement by
(Party Name)" (if Responding Party does not concur with the Initiating
Party and does not wish to mutually terminate the Master Agreement).
Each Responding party shall use its best efforts to respond within the time
period provided. Failure of any Responding Party to respond within the time
period shall be deemed an automatic withdrawal of all Notices of Request for
Mutual Termination of the Master Agreement by the Initiating Party and all
Responding Parties.
(iii)If all parties send the required Notice of Request for Mutual
Termination of the Master Agreement as set forth above, the Parties
shall, within the next thirty (30) days or within such extended period
as may be agreed by all Parties in writing, negotiate to determine and
resolve all outstanding issues, including all amounts payable under
Section 20(b)(iii) and all other amounts payable by a Party to the
other Parties. Any such outstanding issues that are not resolved
within the time provided will be submitted to arbitration in the
manner set forth in this Agreement.
(d) Termination Applies to All Parties. If this Agreement is terminated by
a Party, this Agreement will be terminated in its entirety.
(e) Mitigation of Losses. Upon the occurrence of an event creating grounds
for termination under Section 19(a) above, including but not limited to, a claim
that any Party has breached this Agreement or any representation or warranty
given in this Agreement, the Parties shall use commercially reasonable efforts
to mitigate damages caused by the occurrence of such event.
(f) Duties Upon Termination. Upon the expiration or termination of this
Agreement:
(i) Except as otherwise provided herein, the Parties will use all
commercially reasonable efforts to cease immediately all of their
respective efforts to promote the sale of the Products and Services
through the Retail Stores including the use of the Combination Marks
but in any event no later than sixty (60) days after expiration or
termination of this Agreement;
(ii) Except as otherwise provided herein, RadioShack will cease immediately
the use of any Sprint and/or Sprint Spectrum Marks, and Sprint and
Sprint Spectrum will cease immediately the use of RadioShack Marks,
and each will cease immediately the use of the Combination Marks;
(iii)Except as otherwise provided herein, the Parties will discontinue
immediately making any statements or taking any actions that might
cause third parties to infer that any business relationship continues
to exist between the Parties pursuant to this Agreement, and where
necessary or advisable, inform third parties that the Parties no
longer have a business relationship pursuant to this Agreement; and
(iv) RadioShack will retain possession of and take title to the
Merchandising Display (if neither Sprint or Sprint Spectrum notifies
RadioShack within thirty (30) days after the effective date of
termination of such Party's intent to take and remove the
Merchandising Display at such Party's expense), and RadioShack will
remove and destroy the Sprint and/or Sprint Spectrum Marks and other
designations from all Retail Stores, including the Merchandising
Displays, at RadioShack's sole cost and expense, within sixty (60)
days following termination of this Agreement.
Notwithstanding anything to the contrary herein, following a termination of
this Agreement, RadioShack may continue to advertise and sell the Products for
the time period necessary to sell through or sell out each Product remaining in
current inventories to the extent provided in each Addendum hereto, but in any
event no later than twenty-four (24) months after expiration or termination of
this Agreement. During such time, RadioShack may continue to use the Sprint
Marks (but not in Combination Mark Format), but such use shall be subject to the
terms of this Agreement and limited to the Products RadioShack has on order and
in inventory as of the termination of this Agreement.
(g) Subsequent Marketing. During the term of this Agreement, and for a
period equal to the greater (i) five years following termination of this
Agreement, or (ii) the time period set forth in any applicable governmental law
or regulations, RadioShack will not sort out and use for its own purposes,
including any target marketing, a list of customers who have purchased any of
the Sprint or Sprint Spectrum Products or Services which are the subject of this
Agreement, or make such list or any portion thereof available to another PCS or
telecommunications carrier for the purpose of sale of products or services
similar to those set forth on any Addendum attached hereto; provided, however,
that this paragraph shall not be construed in any way to limit general use by
RadioShack of RadioShack's lists compiled by RadioShack of its own customers
purchasing products or services, including Products or Services.
(h) Post Termination Compensation. For a period of twenty-four (24) months
following the expiration or termination of this Agreement, Sprint and Sprint
Spectrum shall pay RadioShack residual commissions and compensation at the rate
and pursuant to the terms set forth on the applicable Addendum in effect on the
effective date of termination or expiration of this Agreement.
Upon a unilateral termination of this Agreement, Sprint or Sprint Spectrum,
as the case may be, has the option in Sprint or Sprint Spectrum's sole
discretion, but not the obligation, to pay to RadioShack, in one lump sum,
within sixty (60) days after the termination date, an amount equal to the
present value as of the effective date of (using a discount factor equal to the
then current two year Federal T-Bill interest rate per annum) of a stream of
Assumed Payments, as defined below) for 24 months, less payments made to
RadioShack between the date of termination and the date of payment of the lump
sum in full satisfaction of their respective obligations, as the case may be, to
pay residual commissions hereunder. For the purposes of this option, the lump
sum payment will be equal to the Assumed Payment multiplied by 24, and then
discounted at the rate set forth above. For the purposes of this Agreement,
"Assumed Payment" means the amount equal to 1/12th of the residuals actually
earned by RadioShack from all Sprint or Sprint Spectrum Services, as the case
may be, sold on a residual basis by RadioShack on behalf of Sprint or Sprint
Spectrum during the twelve (12) month period immediately preceding a termination
of this Agreement. Any bounties, activation fees, incentive program payments,
marketing development funds, advertising funds or any other non-residual or one
time payments made by Sprint or Sprint Spectrum to RadioShack will not be
included in this calculation. If the Agreement is in effect for fewer than
twelve (12) months prior to termination, the monthly average will be multiplied
by twelve in order to arrive at the twelve month period.
20. Dispute Resolution
(a) Procedures - In the event of a dispute arising between any of the
Parties, out of or relating to the Agreement or the performance of any
obligations under the Agreement, the Parties agree to attempt, in good faith, to
resolve such disputes through the escalation procedure set forth below:
(i) The Joint Steering Committee members for the Parties shall meet by
telephone or in person and attempt to resolve any dispute in good
faith;
(ii) If the Joint Steering Committee members are unable to resolve the
dispute within five (5) business days, or such longer period of time
as agreed by the Joint Steering Committee, the Parties' respective
Joint Steering Committee members shall provide a written summary of
the disputed issues to a senior division officers for each Party. The
senior division officers (i.e., the president or titular head of each
appropriate division or designated group of such Party) for each Party
shall then meet by telephone or in person and attempt to resolve such
dispute in good faith;
(iii)If the senior division officers are unable to resolve the dispute
within ten (10) business days, the senior division officers will
provide a written summary of the disputed issues to the chief
executive officers of each Party. The chief executive officers of each
Party will then meet by telephone or in person and attempt to resolve
such dispute in good faith;
(iv) If the chief executive officers are unable to resolve the dispute
within ten (10) business days, then either Party may terminate this
Agreement as provided in Section 19(a)(v) or 19(c) above.
(b) Termination Payments and Arbitration.
(i) Upon a unilateral termination of this Agreement by RadioShack under
Section 19(c), or by Sprint or Sprint Spectrum under Section 19(a),
RadioShack will pay to Sprint and Sprint Spectrum an amount equal to
the unamortized Merchandising Display Expenditures (less any credits
or payments for the same previously received) as of the termination
date of this Agreement, and Radio Shack will be entitled to receive
only one-half of the amount otherwise payable by Sprint and Sprint
Spectrum under Section 19(h) above;
(ii) Upon a unilateral termination of this Agreement by Sprint or Sprint
Spectrum under Section 19(c), or by RadioShack under Section 19(a),
RadioShack will pay to Sprint and Sprint Spectrum an amount equal to
one-half of the unamortized Merchandising Display Expenditures (less
any credits or payments for the same previously received) as of the
termination date of this Agreement, and RadioShack will be entitled to
receive all of the amounts otherwise payable under Section 19(h).
(iii)Upon a mutual termination of this Agreement by the Parties under
Section 19(c), the Parties will meet and agree upon the amount of the
unamortized Merchandising Display Expenditures, if any, payable to
Sprint and Sprint Spectrum by Radio Shack and the amount of money
otherwise payable under Section 19 (h), if any, payable to RadioShack
by Sprint and Sprint Spectrum. taking into consideration the
principles set forth in Section 20(b)(i) and Section 20(b)(ii).
(iv) All payments due under this Section will be due and payable in
immediately available funds within thirty (30) days of the effective
date of the termination of this Agreement. If Sprint or Sprint
Spectrum, as the case may be, elect the lump sum payment option in
Section 19(h) above, the lump sum payment will be offset against the
payment payable by Radio Shack hereunder.
(v) Solely for the purposes of this Section 20(b), and notwithstanding any
inconsistent period of amortization or depreciation schedule claimed
or used by a Party hereto, the Merchandising Display Expenditures will
be amortized as follows: the Merchandising Display Expenditures
attributable to the fixtures will be amortized on the straight-line
basis over one hundred (100) months; and Merchandising Display
Expenditures attributable to the computer interface will be amortized
on the straight-line basis over thirty-six (36) months. The starting
date for the amortization with respect to each computer interface and
fixtures for each Retail Store will be the first day of the first
month in which a Merchandising Display is installed and operational in
that Retail Store.
Except for termination payment disputes under Section 20(b)(i) and (ii),
the Parties will submit to an Arbitrator any dispute which cannot be resolved by
the Parties regarding the unwinding of this relationship and any alleged breach
of contract issues. The Arbitrator will determine what, if any, measures should
be taken by the Parties to unwind the relationship; provided, however, that the
Parties will not submit any trademark license provision to arbitration.
Irrespective of termination, following the dispute resolution procedure set
forth above, a Party may submit a good faith allegation of a breach of contract
claim to the Arbitrator for determination by the Arbitrator, who will also
determine the amount of damages, if any, to be paid by a Party to another Party
for a breach of this Agreement. This Arbitration process shall be conducted in
accordance with the procedures set forth on Schedule 20(b) attached hereto.
21. Confidentiality
(a) Restriction - All Proprietary Information disclosed by one Party to the
other Parties is deemed to be confidential, restricted and proprietary to the
disclosing Party.
(b) Use - The Parties agree to use the Proprietary Information received
from the other Parties only to accomplish the intent of this Agreement. No other
rights to trademarks, inventions, copyrights, patents, or any other intellectual
property rights are implied or granted under this Agreement or by the conveying
of Proprietary Information between the Parties. Notwithstanding anything to the
contrary herein or in the Confidentiality Agreement, either Party may attach
this Agreement and attachments hereto to any public filing to the extent counsel
for such Party reasonably determines necessary.
(c) Copying - Proprietary Information supplied is not to be reproduced in
any form except as required to perform a Party's obligations under this
Agreement.
(d) Care - The receiving Parties must provide the same degree of care to
avoid disclosure or unauthorized use of the Proprietary Information as they
provide to protect their own similar proprietary information. All Proprietary
Information must be retained by the receiving Parties in a secure place with
access limited to only such of the receiving Party's employees, attorneys,
accountants or agents who need to know such information to perform a Party's
obligations under this Agreement and to such third parties as the disclosing
Party has consented to by prior written approval.
(e) Ownership - All Proprietary Information, unless otherwise specified in
writing, (a) remains the property of the disclosing Party, (b) must be used by
the receiving Parties only for the purpose of performing its obligations under
this Agreement, and (c) such Proprietary Information, including all copies of
such information, must be returned to the disclosing Party or destroyed after
the receiving Party's need for it has expired or upon request of the disclosing
Party, and, in any event, upon termination of this Agreement. At the request of
the disclosing Party, the receiving Party will furnish a certificate of an
officer of the receiving Party certifying that Proprietary Information not
returned to disclosing Party has been destroyed.
(f) Limitation - The Parties agree that the term "Proprietary Information"
does not include information which:
(i) has been or may in the future be published or is now or may in the
future be otherwise in the public domain through no fault of the
receiving Party;
(ii) prior to disclosure pursuant to this Agreement is property within the
legitimate possession of the receiving Party;
(iii)subsequent to disclosure pursuant to this Agreement is lawfully
received from a third party having rights in the information without
restriction of the third party's right to disseminate the information
and without notice of any restriction against its further disclosure;
(iv) is independently developed by the receiving Party through parties who
have not had, either directly or indirectly, access to or knowledge of
such Proprietary Information; or
(v) is obligated to be produced under order of a court of competent
jurisdiction or other similar requirement of a governmental agency, so
long as the Party required to disclose the information provides the
other Party with prior notice of such order or requirement.
(g) Relief - The Parties agree that a breach of this Section 21 may give
rise to irreparable injury to the non-breaching Party(ies) that cannot be
compensated for adequately by damages. Consequently, the Parties agree that each
Party shall be entitled, in addition to all other remedies available, to
injunctive and other equitable relief to prevent a breach of this Section 21 of
this Agreement and to secure the enforcement of the provisions of this Section
21 in any court of competent jurisdiction in the United States or any state
thereof (and the Parties agree to waive any requirement for the posting of bond
in connection with such remedy).
(h) Term - A Party must not disclose the Proprietary Information for a
period which is the longer of (a) four years from the date of disclosure or (b)
two years following the date of termination of this Agreement.
22. Insurance
(a) Required Insurance - Each Party must, during the term of this Agreement
and at its sole expense, obtain and keep in force, the following insurance:
(i) Commercial General Liability Coverage, including personal injury,
bodily injury, property damage, operations hazard, independent
contractor coverage, contractual liability, and products and completed
operations liability, in limits not less than $5,000,000 for each
occurrence (combined single limit); and
(ii) Worker's Compensation and Employer's Liability insurance.
(b) Request for Certificates - Each Party shall promptly comply with
another Party's request for a certificate of insurance evidencing such coverage.
(c) Policies of Insurance - All required insurance policies must be taken
out with reputable national insurers that are licensed to do business in the
jurisdictions where the Parties are doing business.
(d) No Limitation On Liability - The provision of insurance required in
this Agreement will not be construed to limit or otherwise affect the liability
of any Party to the other Parties.
(e) Release - The Parties agree to release each other, and their respective
principals, employees, representatives and agents, from any claims for damage to
any person or property, that are caused by, or result from, risks insured
against under any insurance policies carried by the Parties and in force at the
time of any such damage. Each Party will cause each insurance policy obtained by
it to provide that the insurance company waives all right of recovery by way of
subrogation against the other Party in connection with any damage covered by any
such policy. Neither Party will be liable to the other for any damage caused by
fire or any of the risks insured against under any insurance policy required by
this Section.
23. Ethical Conduct and Related Covenants - Each Party will perform its
obligations under this Agreement, in a diligent, legal, ethical, and
professional manner. Any representation made by either Party concerning Products
or Services shall be in compliance with the covenants in of this Agreement.
Neither Party will disparage the other Party, or the other Party's products or
services.
24. Compensation Disputes and Audit
(a) Disputes Concerning Compensation Payments - If any dispute arises
concerning any compensation payment due hereunder, the disputing Party must give
the other Parties written notice of the nature and amount of the dispute within
ninety (90) days of receipt of payment and supporting documentation. If a Party
does not receive such written notice within that ninety (90) day period, all
compensation payments made will be final and the other Parties may not
thereafter dispute the nature or amount of the compensation payment. If,
however, the complaining party did not have knowledge of the compensation due it
because of fraud, intentional failure to disclose, breach of this Agreement or
any other act or omission of the other Party, this provision shall not apply and
the complaining Party shall have two (2) years from the date of discovery of the
relevant facts in which to make a claim.
(b) Audit - Each Party will maintain complete and accurate accounting
records during the term of this Agreement and for twelve (12) months following
conclusion or expiration of all post-agreement payment obligations of all
Parties in a consistent form to substantiate the direct monetary payments and
reporting obligations of one Party to any other Party under this Agreement. Each
Party may, upon reasonable advanced written notice, conduct during the other
Party's regular business hours, and in accordance with applicable law and
reasonable security requirements, audits of such direct monetary payment and
reporting obligation accounts and records, in accordance with the following
guidelines and restrictions: (a) the audit may be conducted by members of the
internal audit department who are employees of the auditing Party, (b) the
audited Party may require the auditing Party's employee to conduct the audit on
the premises of the audited Party, (c) the audited Party will have the right to
have an employee or representative present at all times during the audit, (d)
the auditing Party will not have direct unrestricted access to the audited
Party's computer database without the consent of the audited Party, and will be
entitled to review only those specific records of the audited Party directly
related to the monetary obligations of the audited Party hereunder or the
applicable Addendum, specifically limited to customer activations,
deactivations, customer billing records, records related to media/advertising
expenditures (excluding advertising rate information subject to third party
confidentiality and non-disclosure agreements), Merchandising Display
Expenditures and reimbursements, market launch expenditures, market development
funds/escrow arrangements, and any other records directly related to the
monetary rights and obligations of such Party hereunder, and (e) the auditing
Party's audit of activation, deactivation, and customer billing records will be
limited to a reasonable random sampling audit of those records.
Subject to the restrictions set forth above, the audited Party shall
cooperate fully with the auditing Party. All reasonable fees and costs incurred
(including a reasonable charge for the services of any employee of the audited
Party directly involved in the audit) by either Party in connection with such
audits shall be paid by the auditing Party. The audited Party will have the
right to have the results of any such audit reviewed by the audited Party's
internal auditing staff or by the audited Party's independent accountants who
then audit the financial statements of the audited Party ("Independent
Auditors"). The cost of such internal or Independent Auditors review shall be
borne by the audited Party. The audited Party shall use its commercially
reasonable efforts to immediately correct any deficiencies related to
performance uncovered by such audit.
Each Party may seek an audit of the other Party, pursuant to this Section,
no more than once every six (6) months. These audit rights shall survive until
the period ending twelve (12) months following conclusion or expiration of all
post-agreement payment obligations of all Parties under this Agreement.
25. Taxes - RadioShack is responsible for payment of all taxes due as a result
of compensation payable by Sprint and Sprint Spectrum to RadioShack.
26. Notices - Notices under this Agreement shall be given in writing, either by:
personal delivery; prepaid certified or registered mail return receipt
requested; recognized overnight courier or; facsimile transmission with receipt
confirmed (with a copy of the original of the facsimile transmission sent by
certified or registered mail to follow) addressed as follows: RadioShack Sprint
RadioShack Sprint
100 Throckmorton Street Consumer Services Group
Suite 1600 8140 Ward Parkway
Fort Worth, TX 76102 Kansas City, MO 64114
Attn: Vice-President Attn: Director/RadioShack
Advertising and Marketing
with a copy (only of claims, with a copy to:
indemnity matters, notices of
default and termination):
Tandy Corporation Sprint
1800 One Tandy Center Consumer Services Group
Fort Worth, TX 76102 8140 Ward Parkway
Attn: General Counsel Kansas City, MO 64111
Attn: Legal Department
Sprint Spectrum
Sprint Telecommunications Venture
4717 Grand
Kansas City, MO 64112
Attn: Vice-President Business
Development with a copy
to Law Department
with a copy (only of claims,
indemnity matters, notices of
default and termination):
Sonnenschein Nath & Rosenthal
Twentieth Century Tower II
4520 Main Street, 11th Floor
Attention: David D. Gatchell
or to such other address as the Party to receive the notices shall from time to
time designate in writing to the other Parties.
27. Assignment - The Parties shall not assign or in any other way transfer
this Agreement or any right or obligation hereunder, whether by operation of law
or otherwise, without the prior written consent of the other Parties, which
consent shall not unreasonably be withheld or delayed; provided, however, such
consent shall not be required in the event this Agreement, or any rights or
obligations hereunder, is assigned by a Party: (i) to a person or entity with
which that Party may merge or consolidate, or (ii) to a person or entity which
purchases all or substantially all of that Party's business or assets, or (iii)
to a person or entity which is an Affiliate of that Party.
28. Miscellaneous Provisions
(a) Force Majeure. Any Party's delay in, or failure of, performance under
this Agreement shall be excused where such delay or failure is caused by an act
of nature, fire, or other catastrophe, electrical, computer or mechanical
failure, work stoppage, delays or failure to act of any carrier or agent,
direction or effect of an order from a court or government agency or body, or
any other cause beyond a Party's direct control. Any Party seeking to be excused
for a delay in performing any obligation due to force majeure must exercise
reasonable efforts to minimize the delay in performing such obligation.
(b) Entire Agreement. This Agreement, together with the Addenda to the
Agreement, set forth the entire understanding of the Parties with respect to the
subject matters contained therein, and supersede any prior or contemporaneous
agreements, understandings and representations, whether oral or written, made by
or among the Parties hereto. No supplement, modification or amendment of this
Agreement shall be binding, unless executed in writing by the Parties hereto.
(c) Amendments. Any amendments to the Agreement must be in writing and
signed by the Parties.
(d) Waiver. If any Party fails, at any time, to enforce any right or remedy
available to it under this Agreement, that failure shall not be construed to be
a waiver of the right or remedy with respect to any other breach or failure by
the other Party.
(e) Validity. If for any reason any clause or provision of this Agreement,
or the application of any such clause or provision in a particular context or to
a particular situation, circumstance, or person, should be held unenforceable,
invalid or in violation of law by any court or other tribunal, then the
application of such clause or provision in contexts or to situations,
circumstances or persons other than that in or to which it is held
unenforceable, invalid or in violation of law shall not be affected thereby, and
the remaining clauses and provisions hereof shall nevertheless remain in full
force and effect. Further, where state or federal law governs any aspect of
matters or services covered by this Agreement, such state or federal law shall
prevail over inconsistent provisions in this Agreement.
(f) Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
principles of conflicts of law.
(g) Captions. The captions included in this Agreement have been inserted as
a matter of convenience only and in no way are intended to define, limit or to
be used in connection with the interpretation of this Agreement.
(h) Approvals. This Agreement is subject to any necessary approval and/or
modification required by any local, state and federal regulatory agencies having
jurisdiction over the subject matter hereof.
(i) Unforeseen Expenses. The Parties shall address any future unforeseen
mutual Program expenses which result in a significant financial impact on the
Program in such a way as to not disadvantage one or the other.
(j) Nonrecourse. Unless a Party to this Agreement, no past, present or
future shareholder, limited or general partner in or of RadioShack or Sprint
Spectrum, no parent or other Affiliate of any company comprising RadioShack and
no parent or other affiliate of any company comprising Sprint Spectrum, and no
shareholder, officer, employee, servant, executive, director, agent or
authorized representative of any of them (each, an "Operative") will be liable
by virtue of the direct or indirect ownership interest of such Operative in such
Party for payments due under this Agreement or for the performance of any
obligation, or breach of any representation or warranty made by such Party
hereunder. The sole recourse of RadioShack or Sprint Spectrum for satisfaction
of the obligations of Sprint Spectrum or RadioShack under this Agreement will be
against the Party and the Party's assets and not against any Operative or any
assets or property of any such Operative. In the event that a default occurs in
connection with such obligations, no action will be brought against any such
Operative by virtue of its direct or indirect ownership interest in RadioShack
or Sprint Spectrum, as the case may be.
(k) Counterparts. This Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute one and the same
instrument. Any Party hereto may execute this Agreement by signing any such
counterpart.
<PAGE>
Signature Page of Master Agreement
SPRINT UNITED MANAGEMENT SPRINT COMMUNICATIONS COMPANY, L.P.
COMPANY
By: /s/ D. Wayne Peterson By: /s/ Gary D. Forsee
Name: D. Wayne Peterson Name: Gary D. Forsee
Its: President and Chief Operating Its: President and Chief Executive
Officer, Local Telecommunications Officer
Division
SPRINT SPECTRUM, L.P.
By: Sprint Spectrum Holding
Company, L.P.
Its: General Partner
By: /s/ Andrew Sukawaty
Name: Andrew Sukawaty
Its: CEO
TANDY CORPORATION, acting by and
through its RadioShack Division
By: /s/ John V. Roach
Name: John V. Roach
Its: Chairman and CEO
<PAGE>
Attachment 1
SUMC Affiliates
Carolina Telephone & Telegraph Co. Central Telephone Company - Nevada Division
Central Telephone Company - North Carolina Division Central Telephone Company of
Florida Central Telephone Company of Illinois Central Telephone Company of Texas
Central Telephone Company of Virginia The United Telephone Company of
Pennsylvania United Telephone Company of Eastern Kansas United Telephone Company
of Florida United Telephone Company of Indiana, Inc. United Telephone Company of
Kansas United Telephone Company of Minnesota United Telephone Company of
Missouri United Telephone Company of New Jersey, Inc. United Telephone Company
of Ohio United Telephone Company of Southcentral Kansas United Telephone Company
of Texas, Inc. United Telephone Company of the Carolinas United Telephone
Company of the Northwest United Telephone Company of the West United
Telephone-Southeast, Inc.
<PAGE>
Computer Interface and Fixtures Addendum
To Be Determined
<PAGE>
Excluded Marks Addendum
"Sprint available1/4"
<PAGE>
Exhibit 1
Confidentiality Agreement
(to be attached)
<PAGE>
Purchase Order Addendum
<PAGE>
RadioShack Marks
SERVICE MARK APPLICATION NO. REGISTRATION NO.
1-800-THE SHACK 1,981,542
CIRCLE R RADIOSHACK logo 74-703,498
CROPPED CIRCLE R logo 75-019,807
CROPPED CIRCLE R logo 75-019,808
CROPPED CIRCLE R logo 75-019,809
MAKE RADIOSHACK YOUR
TELEPHONE COMPANY 1,353,351
RADIO SHACK 1,676,195
RADIO SHACK logo 1,707,423
RADIOSHACK 75-975,233
THE REPAIR SHOP AT RADIOSHACK 1,887,479
YOU'VE GOT QUESTIONS
WE'VE GOT ANSWERS 1,909,013
<PAGE>
Sprint Marks
To Be Supplied
<PAGE>
Schedule 20(b)
ARBITRATION PROCEDURES
1. Controversies and Claims Subject to Arbitration.
Any controversy arising out of or related to the relationship of the
Parties, (excluding the determination of termination payments under Section
20(b)(i), (ii) or a good faith allegation of a breach of the terms of the
Agreement or other matters for which arbitration is specifically provided in the
Agreement (collectively, "Claims"), will be settled by a single Arbitrator in
accordance with the arbitration rules of the American Arbitration Association,
governed by the United States Arbitration Act, 9 U.S.C. Sec. 1., et. seq. The
Arbitrator shall apply the common law of Delaware with respect to any breach of
contract claims. If the Parties cannot agree on the selection of the Arbitrator
within ten (10) days of the request for arbitration, any Party may immediately
request the appointment of the Arbitrator in accordance with the governing
rules. Arbitration shall occur at any location to which the Parties and the
Arbitrator agrees or, in the absence of agreement, in Oklahoma City, Oklahoma.
2. When Arbitration May Be Demanded.
Demand for arbitration may not be made until the later of the expiration of
any period for notice and time to cure, or the tenth (10th) day after the
Parties have presented evidence to each other or have been given reasonable
opportunity to do so, with respect to their position regarding their Claims.
A demand for arbitration shall be made within a reasonable time after the
Parties have exchanged their position, and in no event shall it be made after
the date when institution of legal or equitable proceedings based on a breach of
contract would be barred by the applicable statute of limitations.
3. Factors for Consideration.
Each Party may propose in writing, within fifteen (15) days of the
selection of an Arbitrator, those factors that it contends should be applied by
the Arbitrator in reaching a decision, and may submit a supporting brief.
The Parties may, within twenty (20) days following the conclusion of the
discovery provided for in Section 6 below, propose additional factors that they
contend should be applied by the Arbitrator and may submit supporting briefs.
The Arbitrator shall receive evidence and hear arguments on each factor
proposed as hereinbefore provided ("proposed factor(s)"), for inclusion as a
factor to be applied in reaching a decision. The Arbitrator shall select for
application any proposed factor if there is sufficient information in the record
as a whole to permit its rational application. In applying the proposed factors
selected, the Arbitrator may weigh the proposed factors, including giving no
weight, to any one or more proposed factors. The Arbitrator also shall apply
each proposed factor consistently to the maximum extent possible, provided,
however, that the Arbitrator may not decline to apply a proposed factor to a
Party solely because information in the record as a whole concerning that
proposed factor may not apply to, or is insufficient to allow application of
that proposed factor to, all Parties. The Arbitrator shall apply only proposed
factors. The Arbitrator shall, in his final order, an explanation of the
reason(s) why any proposed factor was or was not applied, and if applied, the
manner in which it was applied.
4. Contract Performance During Arbitration.
During arbitration proceedings, the Parties will continue to perform their
respective responsibilities under the terms and conditions of the Agreement and
each Addendum thereto.
5. Claims and Timely Assertion of Claims.
A Party who files notice of demand for arbitration must assert in the
demand all Claims then known to that Party on which arbitration is permitted to
be demanded. When a Party fails to include a claim through oversight,
inadvertence or excusable neglect, or when a claim has matured or been acquired
subsequently, the Arbitrator may permit amendment.
6. Discovery.
Within thirty (30) days of appointment, the Arbitrator shall prepare
written information and document requests to the Parties for the purpose of
eliciting the facts necessary to make a decision. The Parties may make
suggestions by letter to the Arbitrator as to the information and documents they
deem necessary for a decision and the form of the requests; however, the
Arbitrator's decision with respect to the information and document requests is
final. The Arbitrator shall give liberal consideration to the Parties'
suggestions and shall thereafter submit proposed information and document
requests to the Parties and allow them fifteen (15) days after the mailing
thereof to comment on such proposals. The Arbitrator shall prescribe a
reasonable time within which to respond to the information and document
requests, may grant those extensions of time he deems appropriate, and may,
after the responses have been served, submit additional information and document
requests until satisfied there is sufficient information to make an allocation.
Responses to information and document requests must be signed and sworn to by an
authorized representative of each respective Party. The Parties may object to
information and document requests on the grounds set forth in Fed. R. Civ. P.
26(b)(1) and (c) within fifteen (15) days of the mailing of such information and
document requests, and the Arbitrator shall establish a reasonable procedure to
rule promptly on such objections. Following the information and document
exchange, the Parties will have ninety (90) days in which to conduct and
complete depositions under a reasonable procedure established by the Arbitrator.
The Parties may object to depositions or deposition questions on the grounds set
out in Fed. R. Civ. P. 26(b)(1) and (c), and the Arbitrator shall establish a
procedure to rule promptly on such objections. The Arbitrator shall have
available for enforcement of rulings relating to the information and document
exchange and depositions the sanctions set forth in Fed. R. Civ. P. 37(b)(2),
except contempt, as well as the right to adjust a Party's award, if any, as a
sanction.
7. Hearing Procedure. The following procedure shall govern the Arbitration
hearing.
A. After presentation of evidence, each Party shall have thirty (30) days
for submission of Proposed Findings of Fact and Briefs. Within fifteen
(15) days of the last day for such submissions, any Party may file a
Reply to the Brief of any other Party or Parties.
B. Within sixty (60) days of the last day for submission of Proposed
Findings of Fact and Briefs, the Arbitrator shall issue a Preliminary
Order. The Preliminary Order shall provide a specific reasoned
justification for the Preliminary Order consistent with the
requirements of Section 3 above.
C. Each Party will have thirty (30) days from the date of the Preliminary
Order to file written exceptions to the Order.
D. Within thirty (30) days of the deadline for filing exceptions, the
Arbitrator shall issue a Final Order, and provide a specific reasoned
justification for the Final Order consistent with the requirements of
Section 3 above.
E. The failure of the Arbitrator to meet the deadlines established in
subparagraphs B and D of this Section will not affect the validity or
enforceability of the Final Order.
8. Settlement Offers and Judgment on Final Award.
At least ten (10) calendar days before the commencement of the arbitration
hearings, each side shall provide a written offer of settlement to the other
side. Each side shall concurrently provide to the Arbitrator the same such
written offer of settlement at the time of the commencement of the first day of
arbitration hearings. The Arbitrator shall review each of the offers in camera.
The Arbitrator shall make the award in the amount of one settlement offer or the
other settlement offer. The Arbitrator may not decide upon a dollar figure
different than the dollar figure appearing in one or the other of the settlement
offers submitted by the Parties.
The Arbitrator may select such non-economic procedures to be used in
connection with the unwinding based upon the proposals of the Parties, as the
Arbitrator may decide in his/her sole discretion.
9. Enforcement.
The award rendered by the Arbitrator shall be final, and judgment may be
entered upon it in accordance with applicable law in any court having
jurisdiction of the Party against whom the award was rendered.
<PAGE>
SPRINT SPECTRUM, L.P.
NATIONAL AGREEMENT TO MARKET
PERSONAL COMMUNICATION SERVICES
ADDENDUM TO MASTER AGREEMENT
September 10, 1996
Except as otherwise provided herein, all terms of the Master
Agreement by and between Sprint Spectrum, L.P. ("Sprint Spectrum") and Tandy
Corporation, acting by and through its RadioShack division ("RadioShack") and
other Parties, dated September 10, 1996 (the "Master Agreement") are hereby
incorporated by reference.
I. Definitions.
All capitalized terms not otherwise defined below have the meanings
given to them in the Master Agreement.
"Activation" - means when Sprint Spectrum initially activates PCS to a
subscriber, provided, initiation of service will not begin until Sprint Spectrum
has sufficient customer information to bill a RadioShack PCS Customer for all
PCS Service.
"Activation Fee" - has the meaning set forth in Section IV.A.1 below.
"Activation Period" - means a twelve calendar month period, provided;
the "First Activation Period" set forth in Section VIII.C for a Licensed Market
begins on the first day of the first full month during which RadioShack has PCS
Equipment and solicits orders for Sprint Spectrum's Commercially Operational PCS
Services in that Licensed Market and ends on the last day of the twelfth
calendar month from that date; the "Second Activation Period" for that Licensed
Market is the next succeeding twelve month period; and the "Third Activation
Period" for that Licensed Market is the next succeeding twelve month period, and
so forth.
"Additional Provider" - means a PCS provider added as a party to this
Addendum, as provided in Section III.D. below.
"Commission Period" - means with respect to each RadioShack PCS
Customer for whom a PCS Residual Commission is due, the period beginning on the
date of Activation of the RadioShack PCS Customer and ending on the earlier of
(i) the date such customer is Deactivated from PCS service with Sprint Spectrum
(whether or not such customer subsequently resumes PCS service with Sprint
Spectrum), (ii) the last day of the twenty-fourth (24th) calendar month
following a termination of the Master Agreement.
"Commercially Operational" - means the operation of PCS, which Sprint
Spectrum has made available to the public, in a market with the minimum
standards set forth in 47 CFR Part 24.203.
"Deactivate" or "Deactivation" - means the act of, or when, Sprint
Spectrum terminates the PCS of any RadioShack PCS Customer (whether on Sprint
Spectrum's initiative or the request of the Customer) in a Licensed Market which
does not constitute a Temporary Suspension of PCS.
"Licensed Market" - means a Market area for which Sprint Spectrum
either owns, controls, or has a contractual relationship with a party that owns
or controls, an FCC license to provide PCS.
"Market" - means a Broadband PCS Major Trading Area ("MTA") or Basic
Trading Area ("BTA") service area as defined and specified in 47 CFR Part
24.202, as amended.
"Market Share" - means, for a calendar month in a Licensed Market, the
total number of Net Activations attributable to the sale of Service by
RadioShack during that month divided by the total number of Net Activations
attributable to Sprint Spectrum, RadioShack and all other authorized
distributors of Services in that Licensed Market during that calendar month.
Market Share will be expressed as a percentage.
"Master Agreement" - means the Master Agreement by and between Sprint
Spectrum and RadioShack dated September 10, 1996.
"Net Collected PCS Fees" - means total revenues received from
RadioShack PCS Customers for a given month less taxes, interconnection fees
(local and long distance), any non-recurring charges, charges subsequently
credited to a customer and revenues for excluded services not provided by Sprint
Spectrum but billed by Sprint Spectrum. These excluded services could include
but are not limited to long distance, local phone service, and cable television.
In situations where a RadioShack PCS Customer partially pays a bill, RadioShack
will receive commissions based on the prorated PCS revenues.
"Net Activations" - means Activations for a given month less activated
customers that do not maintain PCS Service with Sprint Spectrum for a period
exceeding thirty (30) days or any offered money back guarantee period, whichever
is longer.
"PCS Equipment" - means Sprint Spectrum PCS handsets (including dual
mode handsets designed to transmit and receive both PCS and Cellular
Radiotelephone Service) and related accessories included in the original
manufacturer's packaging with the handset ("PCS Equipment").
"PCS Residual Commission" - has the meaning set forth in Section IV.A.2
below.
"Product" - has the meaning set forth in Section II.B below.
"RadioShack PCS Customer" - means a retail consumer who (a) purchases
PCS Equipment from a RadioShack Company Owned Retail Store, and (b) Activates
Sprint Spectrum PCS on that PCS Equipment as identified by the PCS Equipment's
unique equipment serial number ("ESN"); provided, however, a consumer will cease
to be a RadioShack PCS Customer upon the date the consumer's PCS is Deactivated
with Sprint Spectrum for whatever reason.
"Service" - means Sprint Spectrum's "Personal Communication Service" or
"PCS." As defined in the Master Agreement, PCS does not include Cellular
Radiotelephone Service.
"S.S.S.R.P." - means Sprint Spectrum's suggested retail price as set
forth on Schedule II.B.
"Temporary Suspension" - means the temporary interruption by Sprint
Spectrum of PCS to any subscriber for any reason.
"Uncovered Market" - means any Market for which Sprint Spectrum does
not offer Commercially Operational PCS whether because the Market is an
Unlicensed Market or Sprint Spectrum has not completed the necessary buildout to
have Commercially Operational PCS.
"Unlicensed Market" - means any Market that is not a Licensed Market.
"Weighted Average S.S.S.R.P." - means with respect to each separate
model of PCS Equipment, the amount determined by dividing X by Y where:
Y = the total number of units of that model of PCS Equipment
sold by RadioShack in all Licensed Markets during the
immediately preceding month;
X = the sum of all Z's determined for all Licensed Markets; and
Z = the product determined by multiplying the S.S.S.R.P. for
that model of PCS Equipment in that Licensed Market as of the
beginning of the immediately preceding month by the number of
units of that model of PCS Equipment sold in that Licensed
Market during the immediately preceding month. For example,
assume the S.S.S.R.P. for Model 1 of PCS Equipment in Licensed
Market A is $225, $200 in Licensed Market B and $175 in
Licensed Market C and RadioShack sold 100 units in A, 200
units in B and 300 units in C.
<PAGE>
Licensed Market Number of Units Sold S.S.S.R.P. Z
A 100 $225 $22,500
B 200 $200 $ 40,000
C 300 $175 $ 52,500
Y = Total Units Sold = 600 X = $115,000
Weighted Average S.S.S.R.P. = $115,000 = $191.67
--------
600
II. Product or Service Description
A. Description. All PCS Equipment will have the design specifications
and features determined by Sprint Spectrum in its sole commercially reasonable
discretion. All PCS Equipment subject to this Addendum is and will be separately
identified by model number and other description, the wholesale price to
RadioShack, and the S.S.S.R.P. set forth on Schedule II.B to this Addendum,
which may be amended, including the removal or addition of specified Products,
from time to time, by Sprint Spectrum.
B. Price. Sprint Spectrum will sell to RadioShack the Products at the
wholesale price set forth on Schedule II.B, as amended from time to time by
Sprint Spectrum, which wholesale price will be no more than sixty-five percent
(65%) of the S.S.S.R.P. set forth on Schedule II.B., or otherwise published in
writing by Sprint Spectrum to RadioShack. If Sprint Spectrum designates, in its
sole discretion one or more different S.S.S.R.P.s for a model of PCS Equipment
for different Licensed Markets, the wholesale price to RadioShack will be
sixty-five percent (65%) of the Weighted Average S.S.S.R.P. for that model. Upon
ten (10) business days notice by RadioShack Sprint Spectrum agrees to calculate
and publish a Weighted Average S.S.S.R.P. if such price exists. Sprint Spectrum
retains the right in its sole discretion to increase or decrease the S.S.S.R.P.,
nationally or for an individual Licensed Market, and may take into account all
factors, including, but not limited to supply, demand, and any other prevailing
competitive forces. RadioShack may sell such Products at any legal price.
All invoices for Products supplied to RadioShack will allow RadioShack
a discount of two percent (2%) of the aggregate purchase price due for the
Products if paid within ten (10) days of receipt of the invoice by RadioShack,
with full payment (without any discount) due within thirty (30) days from the
date of RadioShack's receipt of the invoice covering those products.
III. Geographic Coverage (Rollout)
A. Licensed Markets. Sprint Spectrum has identified on Schedule III.1 and
Exhibit III.2 to this Addendum each Licensed Market, as amended by
Sprint Spectrum from time to time. Sprint Spectrum will amend Schedule
III.1 within ninety (90) days from the date of this Addendum with the
estimated dates that Sprint Spectrum will have PCS Commercially
Operational in each Licensed Market, and will update these dates on
Schedule III.1 from time to time as and when the estimated dates are
adjusted and will immediately notify RadioShack of any date
adjustments to Schedule III.1 by telecopy notice to RadioShack's
Director of Cellular Marketing. The dates set forth on Schedule III.1
are good faith estimates only and Sprint Spectrum will have no
obligation to provide PCS in any Market on or before such dates.
B. Unlicensed Markets. Sprint Spectrum desires to, and will continue to
strive to, obtain access to and PCS coverage of all Unlicensed Markets
and Uncovered Markets through acquisitions, buildout, joint ventures,
affiliations, resale agreements or other contractual relationships of
or with third party entities, necessary to provide PCS in such
Unlicensed Markets or Uncovered Markets.
C. Uncovered Markets. [________________________.]
D. Additional Providers. Subject to RadioShack's reasonable consent
(except as provided below), Sprint Spectrum may add one or more
Additional Providers who have a license or contractual right to
provide PCS in one or more Markets as a party to this Addendum, but
only if such Additional Provider agrees to execute a copy of this
Addendum and be bound and subject to the terms and conditions
hereunder. RadioShack's consent will not be unreasonably withheld and
cannot be withheld for compensation reasons. Notwithstanding, Sprint
Spectrum may add any Additional Provider to this Addendum who is an
Affiliate of Sprint Spectrum, or who is an Affiliate of any equity
owner of Sprint Spectrum, without RadioShack's consent. Further,
notwithstanding the first sentence of this paragraph, Sprint Spectrum
may add any other Additional Provider, without RadioShack's consent if
Sprint Spectrum guarantees the payments and performance of such
Additional Provider's obligations to RadioShack under this Addendum.
Subject to RadioShack's contractual obligations with third parties,
RadioShack agrees to solicit orders for the PCS Services of each such Additional
Provider in that provider's Market(s), and be compensated for such service as
set forth in this Addendum. Notwithstanding anything to the contrary herein, the
Additional Provider will have no liability for the direct obligations of Sprint
Spectrum or any other Additional Provider in the Master Agreement or this
Addendum, and Sprint Spectrum will have no liability for the direct obligations
of any Additional Provider hereunder, except as provided above. Upon addition as
a party, the Additional Provider's Market and Roll-Out Date(s) will be listed on
Schedule III.1 hereto.
All references herein to "Sprint Spectrum" shall mean the applicable
Additional Provider with respect to Activations and PCS Services on the
Additional Provider's PCS network(s), which such PCS Service shall in all cases
be marketed and sold by RadioShack as Sprint Spectrum Service.
IV. Compensation/Terms of Payment
A. Compensation.
1. Activation Fee. Except as provided below, Sprint Spectrum will pay to
RadioShack an "Activation Fee" of [_________________] multiplied by
the number of Net Activations obtained by RadioShack. Sprint Spectrum
will not pay RadioShack the Activation Fee in cases where PCS Service
is established with respect to an item of PCS Equipment stolen from
RadioShack. Sprint Spectrum will not pay RadioShack an Activation Fee
in cases where PCS Service is established in violation of either
subscriber enrollment procedures or fraud prevention policies
developed by Sprint Spectrum and reasonably agreed upon by RadioShack
in writing and attached to this Addendum as an exhibit or exhibits.
2. Service Residual Commissions. During the Commission Period, Sprint
Spectrum will pay to RadioShack a residual commission of
[________________] of the Net Collected PCS Fees attributable to a
RadioShack PCS Customer during the term of this Agreement (the "PCS
Residual Commissions").
Upon a unilateral termination of the Master Agreement or this
Addendum, and in lieu of the first paragraph of Section 19(h) of the
Master Agreement (subject further to Section 20(b)(i) of the Master
Agreement), Sprint Spectrum has the option in Sprint Spectrum's sole
discretion, but not the obligation, to pay to RadioShack, in one lump
sum, within 60 days after the termination date, an amount equal to the
present value as of the effective date of termination (using a
discount factor equal to the then current two year Federal T-Bill
interest rate per annum) of a stream of Assumed Payments, as defined
below) for 24 months, less payments made to RadioShack between the
date of termination and the date of payment of the lump sum payment
under this Subsection 2 in full satisfaction of Sprint Spectrum's
obligations to pay PCS Residual Commissions hereunder. For the
purposes of this option, the lump sum payment will be equal to the
Assumed Payment multiplied by 24, and then discounted at the rate set
forth above. For the purposes of this Agreement, "Assumed Payment"
means the amount equal to 1/12th of the Service Residual Commissions
actually earned by RadioShack from all Spectrum Services on which a
Service Residual Commission was earned by RadioShack during the twelve
(12) month period immediately preceding a termination of the Master
Agreement. Any bounties, Activation Fees, incentive program payments,
market development funds, advertising funds or any other non-residual
or one time payments made by Sprint Spectrum to RadioShack will not be
included in this calculation.
3. Product Price Protection. If Sprint Spectrum's wholesale price, as set
forth on Schedule II.B, to RadioShack for any Product shall decline,
RadioShack shall receive a credit in an amount equal to the amount of
the price decrease multiplied by the sum of the applicable quantity of
such PCS Equipment (i) in transit by Sprint Spectrum's carrier to any
one of RadioShack's warehouse distribution centers and (ii) inventory
landed in the distribution centers during the thirty (30) days
immediately preceding the effective date of such price decrease, which
credit Sprint Spectrum agrees may be offset by RadioShack against
other amounts owed by RadioShack to Sprint Spectrum.
4. Product Stock Balancing. Product stock balancing will be addressed on
a case-by-case basis on terms negotiated in good faith by the parties
and based upon prevailing market conditions at the time.
B. Incentive Programs. Sprint Spectrum may, from time to time, offer
RadioShack and/or RadioShack employees incentive compensation
programs to promote the sale of PCS Equipment and the
solicitation of orders for the Service. All such incentive
compensation programs will be coordinated through the Cellular
Marketing Department of RadioShack. To the extent of any cash
payments, Sprint Spectrum will pay all amounts payable hereunder
directly to RadioShack; RadioShack will disburse the payments to
the applicable employees in accordance with any applicable
agreements between RadioShack and Sprint Spectrum. All such
programs may be terminated by Sprint Spectrum in Sprint
Spectrum's sole reasonable discretion.
C. Market Development Fund. Sprint Spectrum will pay
[_________________] per Net Activation to a market development
fund to be used for the promotion of the PCS Equipment and
Services in the form and mediums determined by the RadioShack and
Sprint Spectrum members of the Joint Steering Committee. Unless
otherwise decided by the unanimous vote of the RadioShack and
Sprint Spectrum members of the JSC all balances remaining in the
market development fund in excess of the budget for the following
calendar quarter as determined by the RadioShack and Sprint
Spectrum members of the JSC at the end of each calendar quarter
will be returned to Sprint Spectrum, at Sprint Spectrum's option.
Upon termination of the Master Agreement or this Addendum, and
after payment of all prior market development binding commitments
and obligations made by the RadioShack and Sprint Spectrum
members of the JSC, all balances in the market development fund
will be returned to Sprint Spectrum.
D. Terms of Payment. Within thirty (30) days from the end of each
calendar month, Sprint Spectrum will remit to the appropriate
account for deposit designated by RadioShack in writing all
monthly amounts due hereunder including: (1) Activation Fees
earned for Activations during that month, (2) PCS Residual
Commissions due for Net Collected PCS Fees received by Sprint
Spectrum during such calendar month, (3) any incentive program
payments, if any with respect to incentive programs offered by
Sprint Spectrum and in effect during such month in accordance
with the terms of such program, and (4) any market development
funds, to be segregated and held in an interest-bearing escrow
account, instrument or fund subject to the mutual control of
RadioShack and Sprint Spectrum. In connection with such payments,
Sprint Spectrum will provide the documentation listed on Schedule
IV.D attached hereto.
E. Rights of Setoff. If RadioShack incurs obligations to Sprint
Spectrum pursuant to the Master Agreement or under this Addendum,
Sprint Spectrum will be entitled to offset any such obligations
first against Activation Fee payments (other than Activation Fee
payments being withheld, if any), and thereafter against
aggregate compensation payments due RadioShack from Sprint
Spectrum as provided under the terms of this Addendum.
V. Customer Offer
Sprint Spectrum will offer PCS through one or more rate plans, the
specifics of which will be attached as Schedule IV.C to this Addendum, as
amended.
VI. Terms of Warranty/Customer Service
Sprint Spectrum will assign to RadioShack and customers who purchase
PCS Equipment all warranties provided by manufacturers of the respective PCS
Equipment, which will be included in the packaging of the respective PCS
Equipment.
Sprint Spectrum agrees to maintain a support staff to provide telephone
support to RadioShack Retail Stores and their customers in the installation and
use of the PCS Equipment. Telephone support will be provided to RadioShack at no
charge and to RadioShack PCS Customers at a charge not to exceed that assessed
to other customers supported by Sprint Spectrum.
VII. Marketing/Merchandising
A. Merchandising Display. See Master Agreement.
B. Demonstration Units. The Merchandising Display will include one
or more demonstration units at no cost to RadioShack.
C. Literature. Sprint Spectrum will supply reasonably adequate point
of purchase brochures and marketing materials at no cost to
RadioShack to assist RadioShack sales presentations. Sprint
Spectrum will also supply, and RadioShack will use, materials at
no cost to RadioShack which set forth Sprint Spectrum's rate
plans and terms of service.
VIII. RadioShack's Operational Duties and Responsibilities
RadioShack will perform the following duties, responsibilities, and
obligations with respect to the Products and PCS during the term of this
Addendum:
A. Licensed Markets. RadioShack will distribute Products and
Services designated by the JSC in each Licensed Market once
Sprint Spectrum has PCS Commercially Operational in that Licensed
Market. The Products will be distributed and orders for Service
solicited through those Retail Stores in that Market designated
by the Joint Steering Committee, subject to the terms of written
legally binding contracts with third party vendors in the Market
executed by RadioShack before Sprint Spectrum's Operational
Notice as provided in Section III.C. above.
B. Customers. RadioShack will use commercially reasonable efforts to
solicit customer orders for the Services within each applicable
Market and promote the sale of the Products and solicitation of
orders for Services to the extent reasonable, lawful, and
consistent with RadioShack's written contractual obligations with
providers of cellular products and Cellular Radiotelephone
Services, where applicable, all subject to and in accordance with
the terms and conditions hereof.
C. Minimum Activation Level/Sales Quotas. In exchange for the
payment of the Activation Fee attributable to Net Activations in
a Licensed Market for a given calendar month, RadioShack agrees
to use all commercially reasonable efforts to attain average Net
Activations greater than or equal to the Minimum Activation
Levels established for that Licensed Market for that calendar
month. Sprint Spectrum may withhold payment of the Activation Fee
attributable to a Licensed Market if RadioShack fails to satisfy
the Minimum Activation Levels for that Licensed Market during any
three (3) consecutive month period. Sprint Spectrum will make
payment of any withheld Activation Fees and reinstate current
payment of the Activation Fee for that Licensed Market as of the
first day of the first month after which RadioShack satisfies the
Minimum Activation Levels for at least two (2) consecutive
months. Any Activation Fees withheld pursuant to this Section
VIII.C. as of the termination of this Addendum, that are not
payable to RadioShack as provided in this Section VIII.C., will
be retained by Sprint Spectrum.
For the purposes of this Addendum, "Minimum Activation Levels"
for a Licensed Market will be: [ ]
The Minimum Activation Levels in any Licensed Market will be
waived for the purposes of achieving Activation Period
requirements in any month where there is a shortage of PCS
Equipment or Service supplied by Sprint Spectrum or Additional
Providers that would restrict or limit the sales of PCS through
the Retail Stores in that Market. A shortage of PCS Equipment is
defined as an average per Retail Store availability quantity,
evenly distributed throughout the month, of less than one and
one-half times the previous month's sales per Retail Store.
Notwithstanding the first paragraph of this Section C, RadioShack will
no longer be required to satisfy the Minimum Activation Levels in a Market after
the Third Activation Period for that Market.
D. Establishment of PCS Service. Schedule VIII.D sets forth the
process by which RadioShack PCS Customers will activate and
establish a PCS customer account with Sprint Spectrum.
E. Equipment Purchases. RadioShack may purchase Product from Sprint
Spectrum's inventory, subject to availability, and for
RadioShack's own account, solely for the purpose of resale to end
users within the Licensed Markets; provided, however, that except
where prohibited by law, the resale of any Product to an end user
must be for the purpose of using Sprint Spectrum's Service by an
end user within the Licensed Markets. RadioShack may, from time
to time, purchase PCS Equipment from another source, provided the
PCS equipment satisfies Sprint Spectrum's technical
specifications. With the approval of the JSC, Sprint Spectrum
will, upon execution of the Master Agreement, provide the
technical specifications for PCS Equipment to RadioShack, subject
to applicable supplier contracts. In no event will Sprint
Spectrum have any liability with respect to the wholesale price
paid by RadioShack with respect to the sale of PCS equipment
provided by anyone other than Sprint Spectrum. Without limitation
of the foregoing, and excluding sales and shipments of Products
to Retail Stores, RadioShack will not transship, sell, transfer
or otherwise distribute outside the Licensed Markets where
RadioShack solicits orders for the Services any Products
purchased from Sprint Spectrum. All purchase orders will be
subject to and incorporate the terms of the P.O. Addendum
attached to the Master Agreement.
F. Intentionally left blank.
G. Diligence. RadioShack will at all times exert all commercially
reasonable efforts to promote and enhance the objectives of this
Addendum. In connection therewith, and except as may be provided
otherwise in advertising guidelines established under Section 5
of the Master Agreement, RadioShack will not define, describe or
market Cellular Radiotelephone Service as PCS, or PCS as Cellular
Radiotelephone Service, in its advertising and promotional
efforts in Licensed Markets and will take those actions
commercially reasonable to ensure RadioShack's employees and
associates comply with this covenant. If, however, RadioShack's
abilities to compete and to maximize sales of Product and orders
for Services (for example, where the accepted or general
marketing and promotion methods of other PCS or cellular
providers with whom RadioShack must compete equate cellular
service with PCS or vice-versa, or where the consumer perception
in the marketplace so equates the two) are limited by this
provision, RadioShack may use all lawful means to meet the
competition and to market the PCS Product and Service to
consumers.
IX. Sprint Spectrum's Operational Duties and Responsibilities
Sprint Spectrum will perform the following duties, responsibilities,
and obligations with respect to the Service and Products during the term of this
Addendum in each of the Licensed Markets:
A. PCS System. Sprint Spectrum will construct, maintain and operate,
or contract with a third party for the production, maintenance or
operation of, a Commercially Operational PCS system;
B. Rates. Sprint Spectrum will establish the rates and reasonable
terms and conditions of the sale of Sprint Spectrum's Service to
subscribers;
C. Product Samples. Unless otherwise agreed, Sprint Spectrum agrees
to provide a minimum of seven (7) samples of all Products with
written specifications for evaluation to RadioShack's Quality
Control Department at no charge to RadioShack. RadioShack may
dispose of all samples in the exercise of its sole discretion and
without any obligation to return same to Sprint Spectrum or to
compensate Sprint Spectrum in any way therefor. Sprint Spectrum
understands that the submission of any software samples will also
include the rights to a full non-exclusive revocable site license
for use within RadioShack headquarters.
D. Administrative Procedure. Sprint Spectrum will establish
reasonable administrative procedures and guidelines for sale of
PCS, enrollment of PCS subscribers set forth on Schedule VIII.D,
and customer service to be provided to subscribers;
E. Illustrative Materials. Sprint Spectrum will provide to
RadioShack without charge sufficient information and illustrative
material on Sprint Spectrum's PCS Equipment and Service for the
preparation of catalogs, advertising and other promotional
activities by RadioShack;
F. Forms and Applications. Sprint Spectrum will provide all
applications, forms and other documentation necessary for
referring a customer to Sprint Spectrum without charge to
RadioShack;
G. PCS Capability. Sprint Spectrum will use all commercially
reasonable efforts to provide sufficient PCS Equipment and
Service capacity for sales of Products by RadioShack in the
Licensed Markets.
H. Billing. Sprint Spectrum will bill subscribers for Sprint
Spectrum's Service charges and provide customer service and
assistance, including collections of Service charges;
I. Monthly Report. Sprint Spectrum will provide RadioShack, within
thirty (30) days from the end of each calendar month billing
cycle, with a monthly report, in EDI format if possible, of all
RadioShack PCS Customer Deactivations made by Sprint Spectrum
during such calendar month billing cycle, which monthly report
will include, but not be limited to, the following information:
subscriber name, ESN, PCS phone number, date of activation, and
date of deactivation.
J. Site Listing. Sprint Spectrum will provide RadioShack's Accounts
Receivable Department with a NPA-NXX by site listing, or
functional equivalent, of all area code/exchange combinations in
use in the Licensed Markets and update such listing at least
quarterly during the term of this Agreement to reflect new or
changed area code/exchange combinations as are issued to Sprint
Spectrum.
K. Diligence. Sprint Spectrum will at all times faithfully, honestly
and diligently perform its obligations hereunder and exert all
commercially reasonable efforts to promote and enhance the
objectives of this Addendum.
X. Regulatory Approvals
A. Personal Communications Services. Sprint Spectrum will be
responsible for securing and maintaining the necessary regulatory
approvals to operate a PCS system.
B. Approvals. This Addendum is subject to any necessary approval
and/or modification required by any local, state and federal
regulatory agencies having jurisdiction over the provision of PCS
in the Licensed Markets.
C. Sprint Spectrum as Licensee. No provision of this Addendum will
be construed as vesting in RadioShack any control whatsoever in
any facilities and operations of Sprint Spectrum, or the
operations of any Affiliate or contractual third-party of Sprint
Spectrum. RadioShack will not represent itself as an FCC, federal
or state certified licensee for PCS. Nothing in this Addendum
will be construed to make RadioShack a carrier or obligate
RadioShack to provide Service or obtain any license to solicit
orders for Service.
D. Compliance with Laws. RadioShack and Sprint Spectrum will comply
with all applicable federal, state, county and local laws, rules,
regulations and orders which apply to the performance of their
obligations under this Addendum.
E. Rate Approvals. The basic charges to customers for Service will
be those as set forth by Sprint Spectrum, which may be amended
from time to time as hereinafter provided. To the extent that any
rate or category of classification is subject to regulation or
tariff, Sprint Spectrum, in its sole discretion, may change such
rate or category of classification, effective when specified in
any such regulation or tariff. To the extent that any rate or
category of classification is not subject to regulation or
tariff, Sprint Spectrum, in its sole discretion, may modify such
rate or category of classification at anytime, but will make
reasonable efforts to the extent commercially reasonable provide
thirty (30) days prior written notice to RadioShack.
XI. Termination of Agreement
A. Shipped Purchase Orders. In the event a notice of termination of
the Master Agreement is received by either Sprint Spectrum or
RadioShack, all unshipped purchase orders placed by RadioShack
and accepted by Sprint Spectrum will be canceled, provided,
however that RadioShack will be obligated to provide Sprint
Spectrum with (1) a written good faith estimate of RadioShack's
anticipated PCS Equipment requirements for the duration of the
termination notice period within fifteen (15) calendar days from
the date of the termination notice and (2) a purchase order for
said requirements which will be placed by RadioShack with Sprint
Spectrum which will be subject to acceptance by Sprint Spectrum
in accordance with the P.O. Addendum attached to the Master
Agreement.
B. Repurchase of Products by Sprint Spectrum. During the thirty (30)
calendar day period after the date of expiration or termination
of this Addendum, Sprint Spectrum will repurchase from
RadioShack, at the net price (net of any product price protection
credits used by RadioShack with respect to such Products) paid by
RadioShack to Sprint Spectrum, any and all of the Products on
hand at the Retail Stores and RadioShack's other places of
business or otherwise in the possession of RadioShack, which
Products RadioShack cannot use with any other PCS provider's
system or handsets. Upon notice thereof and tender by Sprint
Spectrum of such purchase price, RadioShack will deliver such
Products and all right, title and interest therein, free and
clear of all liens and encumbrances, to Sprint Spectrum and
Sprint Spectrum will prepay all costs associated with shipping
such Products back to Sprint Spectrum. Sprint Spectrum, however,
will not be required to repurchase and will be entitled to, and
will receive from RadioShack a credit to the extent that any such
repurchased Products are not in acceptable condition, as
reasonably determined by Sprint Spectrum.
XII. Nonrecourse
Unless a Party to this Addendum, no past, present or future
shareholder, limited or general partner in or of RadioShack or Sprint Spectrum
or any Additional Provider, no parent or other Affiliate of any company
comprising RadioShack, and no parent or other affiliate of any company
comprising Sprint Spectrum or an Additional Provider, and no shareholder,
officer, employee, servant, executive, director, agent or authorized
representative of any of them (each, an "Operative") will be liable by virtue of
the direct or indirect ownership interest of such Operative in such Party for
payments due under this Addendum or for the performance of any obligation, or
breach of any representation or warranty made by such Party hereunder. The sole
recourse of RadioShack or Sprint Spectrum or an Additional Provider for
satisfaction of the obligations of Sprint Spectrum or an Additional Provider or
RadioShack under this Agreement will be against the Party and the Party's assets
and not against any Operative or any assets or property of any such Operative.
In the event that a default occurs in connection with such obligations, no
action will be brought against any such Operative by virtue of its direct or
indirect ownership interest in RadioShack or Sprint Spectrum or an Additional
Provider, as the case may be.
XIII. Counterparts
This Addendum may be executed in any number of counterparts, all of
which when taken together shall constitute one and the same instrument. Any
Party hereto may execute this Addendum by signing any such counterpart.
<PAGE>
SIGNATURE PAGE FOR NATIONAL PCS ADDENDUM
IN WITNESS WHEREOF, the parties have executed this Addendum as of the
date first above written.
SPRINT SPECTRUM, L.P.
By: Sprint Spectrum Holding Company, L.P.
Its: General Partner
By: /s/ Andrew Sukawaty
Name: Andrew Sukawaty
Its: CEO
TANDY CORPORATION, acting by and through
its RadioShack Division
By: /s/ John V. Roach
Name: John V. Roach
Its: Chairman and CEO
<PAGE>
Schedule II.B
LIST OF PRODUCTS
Model No. Wholesale Price S.S.S.R.P.
(To be Determined)
<PAGE>
Schedule III.1
LICENSED MARKETS
[ ].
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<PERIOD-END> Jun-30-1999
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0
0
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<INCOME-PRETAX> (938)
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<EXTRAORDINARY> (33)
<CHANGES> 0
<NET-INCOME> (971)
<EPS-BASIC> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001015551
<NAME> Sprint Spectrum L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
<CASH> 41,400
<SECURITIES> 0
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0
0
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<INCOME-PRETAX> (508,200)
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001015551
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<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Dec-31-1998
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<TOTAL-ASSETS> 6,825,800
<CURRENT-LIABILITIES> 1,404,400
<BONDS> 5,649,100
0
0
<COMMON> 0
<OTHER-SE> (307,600)
<TOTAL-LIABILITY-AND-EQUITY> 6,825,800
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<TOTAL-REVENUES> 909,800
<CGS> 0
<TOTAL-COSTS> 1,516,600
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 386,700
<INCOME-PRETAX> (1,995,700)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,995,700)
<DISCONTINUED> 0
<EXTRAORDINARY> (42,900)
<CHANGES> 0
<NET-INCOME> (2,038,600)
<EPS-BASIC> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001015551
<NAME> Sprint Spectrum L.P.
<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Sep-30-1998
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<INVENTORY> 162,700
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<PP&E> 4,211,800
<DEPRECIATION> 631,400
<TOTAL-ASSETS> 6,531,400
<CURRENT-LIABILITIES> 1,153,900
<BONDS> 5,001,100
0
0
<COMMON> 0
<OTHER-SE> 290,800
<TOTAL-LIABILITY-AND-EQUITY> 6,531,400
<SALES> 0
<TOTAL-REVENUES> 582,600
<CGS> 0
<TOTAL-COSTS> 1,738,900
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 287,300
<INCOME-PRETAX> (1,440,200)
<INCOME-TAX> 0
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (1,440,200)
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001015551
<NAME> Sprint Spectrum L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Jun-30-1998
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<CURRENT-LIABILITIES> 1,026,000
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0
0
<COMMON> 0
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<TOTAL-LIABILITY-AND-EQUITY> 6,273,200
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<CGS> 0
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<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 175,600
<INCOME-PRETAX> (922,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (922,000)
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<NET-INCOME> (922,000)
<EPS-BASIC> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001015551
<NAME> Sprint Spectrum L.P.
<MULTIPLIER> 1,000
<S> <C>
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<PERIOD-END> Mar-31-1998
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0
0
<COMMON> 0
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<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
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<INCOME-PRETAX> (439,800)
<INCOME-TAX> 0
<INCOME-CONTINUING> (439,800)
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<NET-INCOME> (439,800)
<EPS-BASIC> 0
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</TABLE>
<TABLE> <S> <C>
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<CIK> 0001015551
<NAME> Sprint Spectrum L.P.
<MULTIPLIER> 1,000
<S> <C>
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<PERIOD-END> Dec-31-1997
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<ALLOWANCES> 9,000
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0
0
<COMMON> 0
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<CGS> 0
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<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 113,700
<INCOME-PRETAX> (1,407,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,407,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (1,407,000)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001015551
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<MULTIPLIER> 1,000
<S> <C>
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<PERIOD-END> Sep-30-1997
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<CURRENT-LIABILITIES> 1,299,500
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0
0
<COMMON> 0
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<LOSS-PROVISION> 0
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<INCOME-PRETAX> (897,500)
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<NET-INCOME> (897,500)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001015551
<NAME> Sprint Spectrum L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Jun-30-1997
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<CURRENT-LIABILITIES> 1,424,600
<BONDS> 1,832,300
0
0
<COMMON> 0
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<CGS> 0
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<INCOME-PRETAX> (476,500)
<INCOME-TAX> 0
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<EPS-BASIC> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001015551
<NAME> Sprint Spectrum L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Mar-31-1997
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<ALLOWANCES> 1,200
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0
0
<COMMON> 0
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<TOTAL-COSTS> 200,300
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<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 100
<INCOME-PRETAX> (188,900)
<INCOME-TAX> 0
<INCOME-CONTINUING> (188,900)
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<NET-INCOME> (188,900)
<EPS-BASIC> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001015551
<NAME> Sprint Spectrum L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Dec-31-1996
<CASH> 50,000
<SECURITIES> 0
<RECEIVABLES> 3,100
<ALLOWANCES> 200
<INVENTORY> 72,400
<CURRENT-ASSETS> 154,000
<PP&E> 1,418,000
<DEPRECIATION> 9,600
<TOTAL-ASSETS> 3,898,800
<CURRENT-LIABILITIES> 981,000
<BONDS> 686,200
0
0
<COMMON> 0
<OTHER-SE> 2,215,300
<TOTAL-LIABILITY-AND-EQUITY> 3,898,800
<SALES> 0
<TOTAL-REVENUES> 4,200
<CGS> 0
<TOTAL-COSTS> 360,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 500
<INCOME-PRETAX> (438,600)
<INCOME-TAX> 0
<INCOME-CONTINUING> (438,600)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (438,600)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001017358
<NAME> Sprint Spectrum Finance Corporation
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
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0
0
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<DISCONTINUED> 0
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</TABLE>
