<PAGE>
EXHIBIT 10.9
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
PROCUREMENT AGREEMENT
BETWEEN
QWEST COMMUNICATIONS CORPORATION
AND
CORVIS CORPORATION
DATED JUNE 5, 2000
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
RECITAL.................................................................. 1
ARTICLE 1. VOLUME DEPLOYMENT; QUANTITIES AND DELIVERY SCHEDULES........ 4
ARTICLE 2. QWEST TESTING; PRODUCT DISCONTINUATION...................... 9
ARTICLE 3. PRICING, INVOICING, PAYMENT AND OTHER FINANCIAL TERMS....... 11
ARTICLE 4. TERM........................................................ 13
ARTICLE 5. DOCUMENTATION AND REPORTS................................... 13
ARTICLE 6. DELIVERY AND INSTALLATION................................... 13
ARTICLE 7. FORCE MAJEURE............................................... 16
ARTICLE 8. TRAINING.................................................... 17
ARTICLE 9. SOFTWARE LICENSE............................................ 17
ARTICLE 10. SOFTWARE CHANGES............................................ 20
ARTICLE 11. PRODUCT CHANGES............................................. 22
ARTICLE 12. PROPRIETARY INFORMATION..................................... 24
ARTICLE 13. WARRANTIES, AND WARRANTY EXCLUSIONS AND LIMITATIONS......... 26
ARTICLE 14. REPRESENTATIONS AND OTHER WARRANTIES........................ 28
ARTICLE 15. REMEDIES AND LIMITATIONS.................................... 29
ARTICLE 16. SUPPORT AND OTHER SERVICES.................................. 30
ARTICLE 17. INSURANCE................................................... 31
ARTICLE 18. INDEMNIFICATION............................................. 32
ARTICLE 19. PATENT, COPYRIGHT AND TRADE SECRET.......................... 32
ARTICLE 20. TERMINATION................................................. 34
ARTICLE 21. DISPUTE RESOLUTION.......................................... 35
ARTICLE 22. NOTICE AND REPRESENTATIVES OF THE PARTIES................... 35
ARTICLE 23. GENERAL..................................................... 36
ARTICLE 24. INCORPORATION OF DOCUMENTS.................................. 39
ARTICLE 25. DEFINITIONS................................................. 39
ARTICLE 26. ENTIRE AGREEMENT............................................ 43
</TABLE>
<PAGE>
PROCUREMENT AGREEMENT
BETWEEN QWEST COMMUNICATIONS CORPORATION AND CORVIS CORPORATION
This procurement agreement for certain optical networking hardware and
software products, and the installation, integration and support of said
products is made and entered into by and between Corvis Corporation ("Corvis"),
------
a Delaware corporation, with a place of business at 7015 Albert Einstein Drive,
Columbia, MD 21046-9400, and Qwest Communications Corporation, a Delaware
corporation, having its principal offices and place of business at 555
Seventeenth Street, Suite 1000, Denver, Colorado 80202 ("Qwest") (Corvis and
-----
Qwest each being referred to herein as a "Party" and collectively as the
-----
"Parties").
--------
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants hereinafter expressed, the Parties hereto agree as
follows:
DEFINITIONS: Defined terms and definitions are set forth in Article 25 of this
Agreement.
ARTICLE 1. VOLUME DEPLOYMENT; QUANTITIES AND DELIVERY SCHEDULES.
1.1 Initial Deployment. Subject to the adjustments provided in Section 1.2,
Qwest will purchase from Corvis and deploy Corvis Equipment, Software and
Services in quantities and in configurations priced at U.S.$150,000,000 (the
"Minimum Deployment Commitment"), U.S. $50,000,000 of which (the "Initial
----------------------------- -------
Deployment Commitment") must be purchased within twelve (12) months after the
---------------------
Commencement Date (as defined below). in each case based on the prices and
license fees set forth in the Price List. For purposes of the preceding
sentence, Qwest will be deemed to have purchased a Product if Qwest has ordered
the Product for delivery no later than ninety (90) days after the applicable
Deployment Commitment period. Qwest will be offered most favored customer
pricing in accordance with the terms and conditions of Attachment 3. The term
"Commencement Date" means the date that the Products meet the Technical
-----------------
Requirements described in Attachment 1.1, which shall occur no later than the
dates set forth therein and grace periods, if any.
1.2 Minimum Deployment Commitment Adjustments. The Minimum Deployment
Commitment and Initial Deployment Commitment shall be subject to adjustment to
the extent provided in , including the adjustments set forth below.
If one of the following events occur, the Minimum Deployment Commitment and the
Initial Deployment Commitment obligations hereunder shall terminate (i.e.,
resulting in a Minimum Deployment Commitment and an Initial Deployment
Commitment of zero dollars ($0.00)):
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(i) the OC-192 Product has failed to meet any Technical Requirement set
forth in Attachment 1.1 or the expected test results set forth in
Attachment 1.2 in any material respect by the OC-192 Deadline Date
(as defined below);
(ii) (A) a third party competitor of Corvis provides Qwest with a firm
offer to provide an OC-192 product that meets or exceeds the
specifications of the OC-192 Product, as demonstrated by the current
commercial use of the competitor's product or Qwest's successful lab
testing of such product (as confirmed in writing by Qwest to
Corvis), on terms and conditions comparable to those contained
herein, and at prices more than five percent (5%) less than the
pricing set forth in the Price List (measured on a fully-loaded
basis for point-to-point transmission over the longest relevant
range specified in the Technical Requirements) including warranty,
maintenance, training, and spare kits and (B) Corvis does not adjust
its proposed pricing to fall below the 5% threshold set forth in (A)
above; and (C) Qwest promptly thereafter orders and actually
purchases such products from such third party or another third party
that meets the requirements of this clause (ii). Qwest may only
elect to terminate its Minimum Deployment Commitment pursuant to
this clause (ii) either within the first sixty (60) days after the
Commencement Date, or within the first sixty (60) days after the
first anniversary of the Commencement Date. If Qwest does not
exercise such termination right within the first sixty (60) days
after the Commencement Date, Qwest will remain obligated to purchase
the Initial Deployment Commitment, even if Qwest exercises its
termination right during the sixty (60) days after the first
anniversary of the Commencement Date;
(iii) Corvis will use commercially reasonable efforts to complete
development of the OC-192 Product within the second calendar quarter
of 2001, and will keep Qwest informed of its progress from time to
time. Corvis commits to completing development of the OC-192 Product
by the end of the third calendar quarter of 2001 (i.e., September
30, 2001), provided that if Corvis is unable to meet such date,
Corvis will have a ninety (90) day cure period to complete such
development (the end of such 90 day cure period is December 31, 2001
and is referred to herein as the "OC-192 Deadline Date"). If Corvis
--------------------
does not have an OC-192 Product which conforms to the Technical
Requirements on or before the OC-192 Deadline Date, Qwest may
terminate this Agreement without liability on the part of Qwest and
its Affiliates to Corvis, except with respect to Purchase Orders
that Corvis has already issued.
(iv) If Corvis rejects a Purchase Order that meets the requirements of
Section 1.4 or if Corvis does not deliver a Product within the
applicable delivery timeframes set forth in Section 1.4 for such
Product pursuant to a Purchase
2
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Order issued and accepted in accordance with Section 1.8, Qwest may
as its sole and exclusive remedy cancel that portion of the Purchase
Order that relates to any such Product not delivered within the
delivery timeframes set forth in Section 1.4(b) and have the price
applicable to such undelivered portion of such Purchase Order count
toward the Minimum Deployment Commitment and, if applicable, the
Initial Deployment Commitment. This Section 1.2(b) shall not apply
to any failure to meet Corvis delivery obligations due to fault of
Qwest or due to events of Force Majeure impairing Qwest's ability to
fulfill its obligations. In addition, in the case of a Force Majeure
event that prevents Corvis from fulfilling its obligations, Qwest's
right to terminate the Purchase Order under this Section 1.2 (b)
will arise only after the 60 day period described in Article 7.
1.3 Incomplete Initial Deployment. If Qwest fails to purchase, as provided in
Section 1.1, a total dollar value of Corvis Equipment, Software and/or Services
equal to or exceeding the Initial Deployment Commitment within the twelve (12)
month period after the Commencement Date, or the Minimum Deployment Commitment
within the twenty-four (24) month period after the Commencement Date, then
Corvis may then invoice Qwest for an amount equal to thirty percent (30%) of
purchase price and license fees for such Corvis Equipment, Software and/or
Services Qwest failed to buy pursuant to Section 1.1 (the "Initial Deployment
------------------
Shortfall") and Qwest will pay such invoice within thirty (30) days after
---------
receipt. If Qwest submits Purchase Orders for at least the amount of the
Initial Deployment Shortfall within such 30-day payment period for delivery of
such Equipment and Software within three (3) months, Qwest will receive a credit
for the full amount of the payment made for the Initial Deployment Shortfall.
If Qwest fails to submit such Purchase Orders and pays invoices for Corvis
Equipment, Software and/or Services it failed to purchase or license, Qwest will
receive an 80% credit for such paid amounts if it purchases or licenses such
Corvis Equipment, Software and/or Services (beyond the amount it is otherwise
obligated to purchase during the remainder of the Initial Term, in the case of
an Initial Deployment Shortfall) within twelve (12) months after the date it was
originally obligated to purchase such Equipment and Services or license such
Software.
1.4 (a) Forecasts. Thirty days after the Commencement Date, and thereafter by
the fifth business day of each quarter after the Commencement Date (the
quarter hereafter being "Q"), Qwest will provide to Corvis a twelve-month
rolling forecast (the "Rolling Forecast") of deliveries for the twelve-
----------------
month period commencing at the beginning of the next quarter. The first
quarter of each Rolling Forecast (hereinafter "Q+1") will include the
quantity of each Product, by product code, anticipated to be delivered
during Q+1. For the remaining quarters of each Rolling Forecast (Q+2
through Q+4), the Rolling Forecast will show the quantity of each Product
by product code which Qwest anticipates it will need to be delivered during
the specified quarter. Qwest will present no more than one Rolling Forecast
each quarter. Rolling Forecasts shall be for planning purposes only and
shall not represent Qwest's commitment to purchase any or all of the
Products shown
3
<PAGE>
in such Rolling Forecasts. For the avoidance of doubt, the term "quarter"
means any period including and between the following dates during any
calendar year: (i) from January 1 until March 31; (ii) from April 1 until
June 30; (iii) from July 1 until September 30; and (iv) from October 1
until December 31, except where the context requires any quarter to be a
portion of a quarter.
(b) Capacity and Lead Times. Corvis agrees to accept all Purchase Orders
issued by Qwest under this Agreement, provided that such Purchase Orders
conform with the requirements of this Agreement, including the Commitment
----------
Limitations, as described below. Corvis shall confirm the Purchase Order as
-----------
set forth in Section 1.8, at which point the Purchase Order shall become a
binding commitment. Corvis shall be obligated to accept any Purchase Order
that includes a ninety (90) day lead time and that requires delivery of
Product, within such ninety (90) day period and which does not exceed the
following dollar amounts for the respective quarter: (1) $150 million in
the case of Q+1, spread evenly over such quarter (i.e., delivery of $50
million per month); (2) $250 million for each of Q+2, Q+3, or Q+4; and (3)
$500 million for each of Q+5, Q+6, Q+7, and Q+8 (such lead and dollar
amounts are referred to herein as the "Commitment Limitations"). The ninety
(90) day lead time referred to above may be satisfied either by Qwest's
submission of a Purchase Order or by Qwest's submission of a binding
commitment letter, reasonably acceptable to Corvis, describing the Product
to be purchased and the approximate delivery dates, and confirming Qwest's
agreement to submit within thirty (30) days a Purchase Order containing the
detailed configuration, delivery locations, and specific delivery dates for
each ordered Product. The parties shall mutually agree upon installation
timeframes on a per Purchase Order basis. Corvis shall be entitled to a
cure period of five (5) days after the delivery date set forth in such
Purchase Order(s) before Corvis will be deemed to be in breach of its
delivery obligations hereunder. Corvis will maintain sufficient capacity to
process, manufacture, and deliver to Qwest, within the delivery times
required by this Section 1.4.
1.5 RESERVED
1.6 Corvis shall ship all Products ordered pursuant to this Agreement, freight
prepaid, FOB destination designated in the Purchase Order or to such other
location as the parties may agree. The method of shipment shall be consistent
with the nature of the Products and hazards of transportation. Risk of loss for
all Products ordered in accordance with this Agreement shall pass to Qwest upon
Corvis' delivery of such Products at the destination except loss or damage
caused by Corvis' willful misconduct or negligence, and such loss, damage, or
destruction shall not release Corvis from any obligation hereunder. After
delivery, the risk of loss or damage shall be borne by the Qwest, except loss or
damage caused by Corvis' willful misconduct or negligence. Title to Equipment
will pass to Qwest upon delivery to the Specified Site(s). Corvis will pack the
Products purchased hereunder for transport in accordance with its commercial
standards and will deliver the Products to a carrier of the mode of
transportation selected by Corvis unless
4
<PAGE>
otherwise mutually agreed upon in writing by the Parties. Qwest shall pay the
shipping and insurance costs for the Products. Corvis shall include the shipping
costs separately on the invoice for the Product without markup. The preceding
provisions of this clause are valid for deliveries in the United States, its
possessions and territories and European Union member countries only. All
deliveries outside the aforementioned areas will be mutually agreed upon on a
case-by-case basis.
1.7 Qwest will have the right to alter the destination site at least ten (10)
days prior to Corvis' scheduled shipment date for Products, without cost or
expense to Qwest, by timely transmitting notice to Corvis of the new Specified
Site(s). In addition, Qwest may, by written notice to Corvis, unilaterally
delay or suspend the scheduled shipment date of any Product or the starting date
of any Service for up to 180 days past the scheduled shipment date or starting
date; as the case may be. Such unilateral delay shall be without penalty or
cost, provided that Qwest gives written notice to Corvis at least seven (7) days
prior to the scheduled shipping date of the affected Products or seven (7) days
from the start of the affected Services[*].
1.8 Corvis will execute and deliver to Qwest an order confirmation within seven
(7) days after Corvis' acknowledgement of receipt of each Purchase Order, except
that Corvis may reject any Purchase Order that exceeds the Commitment
Limitations. Corvis is obligated to accept a Purchase Order that does not
exceed the Commitment Limitations and otherwise complies with the requirements
of this Agreement. Provided Corvis has acknowledged receipt of a Purchase Order
that falls within the Commitment Limitations, Corvis shall be deemed to have
accepted such Purchase Order if Corvis fails to accept or reject the order
within such seven (7) day period. If the order exceeds the Commitment
Limitations, Corvis will indicate to what extent it will commit to delivery of
the excess amount. The order acknowledgement shall not contain any terms,
conditions or changes other than as set forth in the preceding sentence.
1.9 Any maintenance response or resolution service levels in this Agreement
are conditioned upon Qwest purchasing on-site installation spares, parts and
components of the Equipment ("Spares Kits" or "Kits") as reasonably specified by
----------- ----
Corvis and agreed upon by Corvis and Qwest from time to time as the quantity
necessary to enable Corvis to meet such service levels. The required quantity
and locations of the Kits may change with installation requirements and changes
in the topology of Qwest's network.
1.10 Corvis will provide Qwest with a laboratory system ("Laboratory System")
-----------------
comprised of Equipment specified by Corvis, provided that such laboratory system
will be limited to transport Products consistent with those of laboratory
systems provided by Corvis at no additional cost to its other customers. Such
Laboratory System will be owned by Corvis, provided that if Qwest order a total
dollar value of Corvis Equipment and Software equal to or exceeding
$50,000,000.00 within twelve (12) months following the Commencement Date, title
to the Laboratory System will pass to Qwest. Qwest may, during the term of this
Agreement, use the Laboratory System solely for its internal use and benefit for
any purpose other than use in the
5
<PAGE>
Qwest network to produce revenue or carry commercial traffic. Qwest's use of
such Laboratory System will be subject to all of the terms and conditions of
this Agreement, including the license provisions in Article 9 and to the
confidentiality provisions in Article 12.
1.11 If Corvis fails to deliver to Qwest a [*] on or prior to the delivery date
for such [*] as mutually agreed upon by the parties pursuant to a Purchase Order
issued and confirmed in accordance with Section 1.8, and Corvis does not cure
such failure within fourteen (14) days thereafter, then, as Qwest's sole and
exclusive remedy, Qwest may reduce the Minimum Deployment Commitment by the
dollar value of the [*] ordered under such Purchase Order or terminate this
Agreement effective upon thirty (30) days' notice to Corvis. Such termination
will be without liability to either Party or to Qwest Affiliates, except that
Qwest shall remain liable for amounts accrued as of the effective date of
termination for Services performed and Products delivered. This Section 1.11
shall not apply to any failure to meet Corvis' delivery obligations due to fault
of Qwest or due to events of Force Majeure impairing Qwest's ability to fulfill
its obligations. In addition, in the case of a Force Majeure event that
prevents Corvis from fulfilling its obligations, Qwest's right to terminate the
Purchase Order under this Section 1.11 will arise only after the 60 day period
described in Article 7.
1.12 Except for a failure to deliver a [*] as set forth in Section 1.11 above,
if Corvis fails to meet any agreed delivery schedule for a Product ordered and
such failure is likely to delay Turn-Over, Qwest, without limiting its other
rights or remedies as specified herein, may direct expedited routing of Products
and any excess costs incurred thereby shall be paid by Corvis unless otherwise
agreed in writing by the Parties. Qwest shall not be liable for Corvis'
commitments to third parties or production arrangements in excess of the amount,
or in advance of the time, necessary to meet Qwest's delivery schedule as set
forth in the applicable Purchase Order. Corvis shall not deliver any Product
significantly earlier than the agreed delivery date unless approved by Qwest.
If delivery occurs significantly earlier than the date set forth in the
applicable purchase order and Corvis has not arranged for designated storage by
Qwest, Qwest may (i) return delivered items at Corvis' expense for proper
delivery, or (ii) place delivered items in storage, with any out-of-pocket
expenses for storage to be paid by Corvis, until the scheduled date of delivery.
6
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1.13 The terms and conditions of this Agreement shall apply to Qwest's purchase
of Products and Services for use anywhere in the world, subject to export
control restrictions; however, to the extent Qwest elects to purchase Products
to be used, or Services to be provided, outside of Canada, Mexico or the United
States (collectively "North America") or the European Union countries, such
purchases may be subject to supplementary or revised provisions relating to
intellectual property, product delivery lead time, performance commitments, tax,
export compliance, local law requirements, and other provisions applicable to
the destination country, which supplementary or revised provisions shall be
negotiated in good faith by the Parties and memorialized in writing. All
purchases made for use outside of North America or the European Union shall
apply toward the Initial Deployment Commitment and the Minimum Deployment
Commitment).
ARTICLE 2. QWEST TESTING AND ACCEPTANCE; PRODUCT DISCONTINUATION.
2.1 Qwest will have the right to test a Product for a period of fourteen (14)
days after delivery of the last Product included in the Purchase Order (or, in
the case of Products comprising [*] to be installed by Corvis, a period of
fourteen (14) days from the date Corvis provides written notice that the [*] is
ready for Turn-Over) to confirm that the Product(s) is(are) Operative and that
there are no Nonconformities ("Acceptance Period").
-----------------
2.2 "Acceptance" for any [*] Product, as the case may be, shall be deemed to
----------
occur upon the earlier of (i) the expiration of the applicable Acceptance Period
in the case of [*], or the review period set forth in Section 2.7 in the case of
Products, unless Qwest notifies Corvis within such Acceptance Period or review
period of any Nonconformities in such [*] Product, (ii) the date Qwest provides
to Corvis notice of acceptance of such [*] Product, or (iii) the date Qwest uses
such [*] Product to carry commercial traffic or otherwise in its commercial
operations. Qwest will provide to Corvis written confirmation of Acceptance
within three (3) business days after Qwest's Acceptance or, in the case of a
deemed acceptance by Qwest, with three (3) business days after Qwest's receipt
of a request from Corvis for such confirmation.
2.3 If, prior to the expiration of the Acceptance Period, Qwest in good faith
determines that the Product(s) included under a Purchase Order as part of [*]
fails to successfully pass the acceptance tests due to Nonconformities, Qwest
will (i) promptly notify Corvis in writing of such failure, and (ii) specify in
reasonable detail the nature and extent of such Nonconformities. Upon receipt
of such notice of Nonconformities in such Product(s), Corvis will, at its
expense and option, use its commercially reasonable efforts to modify, repair,
adjust or replace the Product(s) within thirty (30) days after receipt of
Qwest's notice of such Nonconformities and shall provide Qwest with written
notice of the completion of such modification, repair, adjustment or
replacement. The Acceptance Period will be restarted for a second 14-day period
upon Qwest's receipt of written notice from Corvis of Corvis' completion of such
modification, repair,
7
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adjustment or replacement. If, at the end of the second Acceptance Period and an
additional thirty (30) day cure period, such Product(s) still does not pass the
acceptance tests due to Nonconformities, then, Qwest may, at its sole option and
as its sole and exclusive remedy, either (a) reject such Product(s) without a
further cure period and terminate the applicable Purchase Order upon written
notice to Corvis, without either Party (including Qwest Affiliates) having any
liability under such Purchase and reduce the remaining Minimum Deployment
Commitment by the amount ordered pursuant to such Purchase Order; or (b)
terminate the Agreement and the Initial Deployment Commitment and Minimum
Deployment Commitment shall be reduced to zero ($0.00).
2.4 In addition to Qwest's rights set forth in Section 2.3 above, if Qwest
rightfully rejects any Products pursuant to Section 2.3, Qwest may return to
Corvis such Products, at Corvis' expense, and upon receipt of such Products,
Corvis shall repay to Qwest the amounts previously paid to Corvis by Qwest for
such Products.
2.5 Corvis will notify Qwest promptly upon learning of any material defects in
any of the Products.
2.6 (a) Corvis will support all Product(s) for its expected useful life, as
set forth in Attachment 2.6 ("Product Life"), subject to the support
------------
limitations for Software contained in Attachment 8.1.
(b) If Corvis discontinues manufacture and/or support of the Equipment
(including firmware), Corvis will at Qwest's request, to the extent of
Corvis' legal rights to do so, without obligation or charge to Qwest
deliver to Qwest all of the technical information owned and possessed by
Corvis relating to the manufacture and/or support of the Product, in the
form being used in Corvis' factories in its day-to-day operations of
manufacture, or arrange for the replacement and repair spare parts for the
Product to Qwest's reasonable satisfaction. Qwest may use such technical
information only to manufacture, have manufactured, obtain such spare parts
from other sources in connection with the Product and System Software
obtained from Corvis and owned and operated or licensed by Qwest. Title to
Corvis' technical information and intellectual property rights will remain
with Corvis. In the event of such decision to discontinue manufacture or
support of the Product(s) without providing a Product replacement that
meets or exceeds the Technical Requirements and is at least equally
compatible with Qwest's network components as the replaced Product, Qwest
may reduce the Minimum Deployment Commitment, if any, remaining at the time
such decision is made to zero dollars ($0.00).
2.7 Inspection and Rejection. In the case of Products which are not delivered
as part of [*] under a Purchase Order, Qwest shall have the right to inspect and
reject Product(s) for a Nonconformity or error in shipment for a period of ten
(10) days from physical delivery to Qwest.
8
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ARTICLE 3. PRICING, INVOICING, PAYMENT AND OTHER FINANCIAL TERMS.
3.1 Corvis will provide Qwest with a price list ("Price List") for Products and
----------
Services, including the right to use fee (the "Right to Use Fee") for the
Equipment and/or Software and intellectual property associated with Corvis
Equipment, maintenance, and Spare Kits, on or before the Commencement Date.
Such Price List shall be attached to this Agreement as Attachment 3.1. The
Parties may negotiate different pricing for Qwest's purchases after Qwest meets
or exceeds the Minimum Deployment Commitment.
3.2 The prices in this Agreement do not include any federal, state or local
sales, use, excise or similar taxes, however designated, which may be levied or
assessed on the Products or Services provided hereunder, and any personal
property taxes levied or assessed on Products which has been delivered but as to
which title has not passed to Qwest. With respect to such taxes, Qwest will
either furnish Corvis with an appropriate exemption certificate applicable
thereto, or pay to Corvis, such amounts as Corvis may by law be required to
collect or pay.
3.3 Payment terms are set forth as follows:
(a) For Products provided hereunder that are purchased as part of an
initial deployment of [*], (i) Qwest will remit payment to Corvis for sixty
percent (60%) of the correctly invoiced amounts for such Products within
thirty (30) days after receipt of the invoice, which will be issued upon
shipment of such Products to Qwest; and Qwest will remit payment to Corvis
for the remaining forty percent (40%) of the correctly invoiced amounts for
such Products within thirty (30) days after Turn-Over, subject to
Acceptance of such Products pursuant to Article 2. For Products that are
not purchased as part of an initial deployment of [*], Corvis will invoice
Qwest the full amount upon delivery and Qwest will remit payment of the
full amount to Corvis within thirty (30) days after its receipt of invoice
unless the Product has been rejected in accordance with 2.7 (Inspection).
(b) For Services performed hereunder, unless otherwise specified herein,
Qwest will remit payment to Corvis for correctly invoiced amounts within
thirty (30) days after the receipt of the invoice, which will be issued
upon the completion of Services, unless otherwise agreed in writing by the
parties. Charges for Services and Equipment will be invoiced and paid
separately by Qwest.
(c) Qwest will not be required to pay charges for Products or Services that
are rightfully disputed, except for any Products that Qwest has used to
carry commercial traffic or otherwise in its commercial operations.
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(d) Notwithstanding the foregoing, amounts reasonably and in good faith
disputed by Qwest will not be due and payable, provided that Qwest: (i)
pays all undisputed charges on or before the applicable due date; (ii)
presents to Corvis a written statement of any billing discrepancies in
reasonable detail as soon as reasonably practicable; and (iii) negotiates
in good faith with Corvis for the purpose of resolving such dispute within
a sixty (60) day period after Qwest's presentation to Corvis of notice of
such billing discrepancies. In the event that such dispute is resolved in
favor of Corvis, Qwest agrees to pay Corvis the disputed amounts plus
interest calculated at the rate of twelve percent (12%) per annum within
ten (10) days of such resolution. To the extent any portion of the
disputed amount is by mutual agreement resolved in favor of Qwest, Qwest
will not be obligated to pay such portion of the disputed charges and the
applicable late fees. If Corvis has responded to Qwest's dispute in
writing and the parties fail to mutually resolve or settle the dispute
within such sixty (60) day period, upon notice to Qwest, all disputed
amounts plus interest at the rate specified above will become due and
payable, unless (1) Corvis has agreed in writing to extend such period or
(2) the payment dispute is then the subject of an arbitration proceeding or
litigation.. This provision will not be construed to prevent Qwest from
pursuing any legal remedies available to it.
(e) In addition to and without limiting any of Corvis' rights or remedies
hereunder, Corvis will be entitled to suspend its provision of new Products
and Services if Qwest fails to pay any material amount, including any
disputed amount, unless the amount relates only to Products or Services
previously performed or delivered and is then the subject of a mediation,
arbitration, litigation, or other formal proceeding. Corvis will provide
Qwest with at least ten (10) days' advance notice of its intention to elect
such suspension. Provision of Products and Services shall re-commence upon
payment of such amounts, unless this Agreement has been terminated in the
interim.
3.4 In the event Corvis fails to receive payment from Qwest as required herein,
Qwest will have fifteen (15) calendar days to cure such non-payment after
its receipt of notice of non-payment from Corvis. Payments provided for in
this Agreement, when overdue, will bear interest at a rate per month equal
to one and one-quarter percent (1.25%), or if lower, the highest rate
permitted by applicable law, for the time period from and including the due
date until payment is remitted by Qwest.
3.5 Invoicing instructions will be as follows:
Original Invoice Sent To: One Copy of Invoice Sent To:
555 17/th/ St. 1670 Broadway, Suite 3200
Denver, CO 80202 Denver, CO 80202
Attn: Accounts Payable Attn: Director, Material and Capital
Program Management
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3.6 Any Services performed for, or Products purchased by Qwest or any Qwest
Affiliate pursuant to the terms and conditions of this Agreement shall accrue to
the benefit of Qwest and its Affiliates for the purpose of determining pricing
hereunder and shall be counted against the Minimum Deployment Commitment and the
Initial Deployment Commitment.
ARTICLE 4. TERM; SCOPE.
4.1 Subject to the terms and conditions of this Agreement, the initial term of
this Agreement will be from the Effective Date and continue thereafter for a
period of two (2) years from the Commencement Date ("Initial Term"). This
------------
Agreement will be automatically renewed for successive one-year terms unless
either Party gives notice of non-renewal at least 90 days before the expiration
of the Initial Term or any renewal term; however, the Minimum Deployment
Commitment shall not be renewed. The Initial Term in combination with any
extensions is also referred to in this Agreement as the "Term".
4.2 Any Qwest Affiliate (other than a competitor of Corvis) may issue a
Purchase Order under this Agreement, provided that Qwest will be liable for any
breach of this Agreement by any Qwest Affiliate, and provided further that the
Qwest Affiliate executes an agreement in the form of Attachment 4.2 whereby such
Affiliate confirms in writing its agreement to be bound by all provisions of
this Agreement applicable to Qwest's rights and responsibilities hereunder.
ARTICLE 5. DOCUMENTATION.
Corvis will provide to Qwest, a reasonable number of paper copies of the
Documentation and, if available, one (1) electronic copy of the Documentation on
CD-ROM, necessary to operate and maintain the Products provided hereunder for
each Specified Site at which such Product is installed. Corvis will provide
Qwest with (a) updates to the Documentation, as such updates are made generally
available, and (b) new and/or revised data incorporating any changes to the
Products which affect Form, Fit, or Function, in each case at no additional
charge to Qwest. Such Documentation may be reproduced by Qwest for its internal
use, provided that any copyright notice of such Documentation is copied as well.
Such Documentation will be used solely for Qwest's internal use only on a need-
to-know and need-to-use basis. Updates to Documentation shall be provided at
no charge during the Warranty Period and the Maintenance Period.
ARTICLE 6. DELIVERY AND INSTALLATION; PERSONNEL; CHANGE ORDERS.
6.1 Corvis will mark each shipment to Qwest with Corvis' name, the Purchase
Order number, and the identity and quantity of Product. Final destination,
interim staging area or any special shipping instructions and any applicable
charge will be specified on each Purchase Order.
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6.2 In the event that Qwest installs a bar coding system for its fixed assets,
Corvis shall apply a Qwest asset tag (to be supplied by Qwest) at either the
manufacturing site or at the point of shipment for the Equipment in a manner
that allows Qwest to easily read the asset tag, provided the parties mutually
agree upon the fee, if any, to cover Corvis' reasonable, direct costs associated
with such bar coding system. A joint meeting will be held between Corvis and
Qwest at an agreed upon time to further define these requirements and fees (if
any).
6.3 Corvis will perform installation services for the Products at the rates
and on the terms and conditions agreed to by the parties. The provisions of
Attachment 6.3 will apply to engineering, installation, turn-up and testing
services provided by Corvis pursuant to this Agreement.
6.4 Each Party will be responsible for providing all qualified personnel
necessary to fulfill its obligations pursuant to this Agreement.
6.5 Corvis shall provide Qwest with the name and office address of the two (2)
most senior Corvis managers which are to be providing or which Corvis reasonably
anticipates to be providing Services at a Qwest site prior to the date on which
each of the respective named Corvis managers are scheduled, by Corvis, to
commence providing Services, together with a brief description of, and an
anticipated schedule for the Services each of the named Corvis manager is to be
providing.
6.6 Corvis personnel shall be granted reasonable access to Qwest sites as
necessary for Corvis to perform its obligations pursuant to this Agreement,
subject to said personnel's compliance with all reasonable site and security
regulations specified by Qwest and provided to Corvis in advance. Corvis will
limit access to Confidential Information to those Corvis personnel who have
agreed to confidentiality obligations consistent with those in Article 12.
6.7 Qwest shall not unreasonably withhold or delay consent to any Corvis
personnel named by Corvis pursuant to this Section to be involved in any effort
under this Agreement.
6.8 After the Commencement Date, upon Qwest's request, Corvis agrees to
identify the Corvis personnel who will fill positions that are mutually agreed
upon by the parties in writing to be positions for "key personnel" ("Key
---
Personnel"), and will provide Qwest with a general description of the education
---------
and experience and other job-related information about any individual designated
to fill a Key Personnel position, and will introduce (either by telephone or, if
requested by Qwest in person) such Key Personnel to appropriate Qwest
representatives.
6.9 Except in connection with sickness, death, vacation, promotion, cessation
of employment or engagement by Corvis or any other events outside of reasonable
Corvis' control, or where Corvis determines in good faith that there exists a
need to reassign Key Personnel to improve Corvis' ability to perform its
obligations hereunder, Corvis shall use its commercially reasonable efforts to
not reassign any Key Personnel from the provision of Services to Qwest after the
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Commencement Date unless Qwest consents to such reassignment (such consent not
to be unreasonably withheld or delayed).
6.10 Before assigning an individual as a replacement for any of the Key
Personnel, Corvis will notify Qwest of the proposed assignment, will provide
Qwest, upon request by Qwest, with a general description of the education and
experience and other job-related information about the individual and will
introduce (either by telephone or, if requested by Qwest in person) the
individual to appropriate Qwest representatives.
6.11 Meetings. Within thirty (30) days of the Commencement Date, the parties
will mutually determine appropriate intervals for periodic meetings to be held
between representatives of Qwest and Corvis. These meetings may include the
following:
(a) A weekly meeting between the respective project management teams;
(b) A monthly management meeting to review Corvis' progress under open
Purchase Orders, project schedules, financial and administrative matters
and such other matters as appropriate; and
(c) A quarterly executive review meeting to review relevant contract and
performance issues.
Each Party's Program Manager or individual designated by the Program Manager
will attend each meeting.
6.12 Qwest reserves the right to require replacement of any Corvis employee or
contractor performing work for Corvis under this Agreement if Qwest is
dissatisfied in good faith with the performance of that individual and
determines that the continued assignment of such individual is not in the best
interest of Qwest. Qwest shall give Corvis written notice requesting that the
individual be replaced and stating the reasons for the request. Corvis will have
a reasonable period of time, not to exceed five (5) business days, in which to
investigate the matters stated in such notice, discuss its findings with Qwest
and attempt to resolve any problems with such individual. If, following such
five (5) business day period, Corvis has not resolved the issues raised by Qwest
to Qwest's reasonable satisfaction and Qwest still requests replacement of such
person, Corvis will replace such person and use its commercially reasonable
efforts to replace such person.
6.13 Corvis shall provide to Qwest, at Qwest's request, written progress reports
as agreed by the Parties, generally on a weekly basis, delivered by electronic
mail followed by a paper copy to Qwest's designated representative. Progress
reports shall include, to the extent available: (i) the status of delivery and,
as applicable installation, under all open Purchase Orders for Products
including such information as Qwest may reasonably request; (ii) items completed
during the
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reporting period including Turn-Over and Acceptance; (iii) items to be completed
within the next reporting period; (iv) open action items; and (v) any other
action items required by Qwest, listing the Party responsible for such actions.
6.14 If Qwest finds there is a need to request that Corvis perform services or
provide products beyond the scope of this Agreement, then (i) Qwest shall submit
a proposed amendment to this Agreement in writing and (ii) Corvis may, but shall
not be obligated to, evaluate the impact of the proposed change considering
cost, schedule and performance as well as any impact on the delivery of Products
and Services to be provided hereunder and respond by providing Qwest with a
formal proposal. If Corvis elects to provide such proposal, the parties may
then commence to negotiate the proposed amendment or incorporate Corvis'
proposal by written agreement as an amendment to this Agreement.
6.15 If Corvis finds that there is a need for it to perform services or provide
products beyond the scope of this Agreement, then Corvis shall submit a proposal
detailing the proposed amendment in writing and evaluating the impact of the
proposed amendment on cost, schedule and performance as well as any on the
delivery of Products and Services to be provided hereunder. The parties may
then further negotiate the proposed amendment or incorporate Corvis' proposal by
written agreement as an amendment to this Agreement.
6.16 Any changes to the terms and conditions of this Agreement including the
attachments attached hereto, except as expressly provided otherwise herein,
shall be by a written amendment to this Agreement executed by both parties. No
proposed such amendment or change shall be effective upon in writing and signed
by each Party.
ARTICLE 7. FORCE MAJEURE
7.1 Except as otherwise provided herein, neither Corvis nor Qwest will be
liable to the other for any delay in performing in accordance with this
Agreement if such delay arises out of an Act of God including fire, flood,
earthquake, explosion, casualty, or accident, or out of war, riot, civil
commotion, labor dispute, the requirement of any governmental agency or
instrumentality, industry-wide shortages of raw materials or transportation
facilities, or any other cause beyond the control of the Party claiming force
majeure.
7.2 The Party asserting that an event of force majeure has occurred will send
the other Party prompt notice thereof setting forth a description of the event
of force majeure, an estimate of its effect upon the Party's ability to perform
its obligations under this Agreement and the duration or expected duration
thereof.
7.3 The Party asserting that an event of force majeure has occurred will be
excused, on a day-to-day basis, from the performance of its obligations under
this Agreement to the extent prevented or delayed by such event (and the other
Party likewise will be excused, on a day-to-
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day basis, from the performance of its obligations under this Agreement to the
extent such Party's obligations related to the obligations are so prevented or
delayed); provided, however, that the Party asserting the occurrence of a force
majeure event will use diligent efforts to avoid or remove such force majeure
event. Notwithstanding the preceding provisions included in this Article 1 to
the contrary, if Corvis is unable to deliver or perform any Product or Service
by the date required under the terms of this Agreement for longer than sixty
(60) calendar days because of a force majeure event, Qwest may, at its option,
by written notice given during the postponement or extension, terminate the
purchase order for such affected Products or Services after the effective date
of termination without liability on the part of either Party or any of its
Affiliates for that termination.
ARTICLE 8. TRAINING.
8.1 Upon the Commencement Date, Corvis shall make available to Qwest 500 seats
to Corvis training programs at no additional charge. The term "seat" means one
day of training for one Qwest personnel. In addition, Qwest shall be entitled
to five (5) additional seats to Corvis training programs for each $1,000,000.00
in Products or Services purchased or licensed from Corvis. All such training
seats shall expire if not used within twelve (12) months after the end of the
Initial Term. In any event, Corvis will provide, upon Qwest's request and at
the time or times required by Qwest during the Term of this Agreement, training
classes and training materials for Qwest personnel. Training will take place at
the Corvis facilities in Columbia, MD or such other location as may be mutually
agreed upon by the parties. The training programs necessary for full
installation, operation and maintenance of the Corvis Products are summarized in
Attachment 8.1, which will be subject to change by Corvis from time to time to
reflect updates to the training methodology and courses. Such training will be
kept current to encompass the latest Licensed Software and Equipment, or any
other Software revision level and/or Equipment revision level directed by Qwest.
Subject to the foregoing, course content and material will be designed and
agreed to by mutual consent. Qwest will have the right to copy Corvis' training
materials for its internal use provided that any copyright notice included in
such material is copied as well. Courses will be limited to a maximum of ten
(10) attendees in each course session. Training programs in excess of the
training seats provided above will be charged at a rate of U.S.$350 per person-
day of training. In all cases, Qwest is obligated to pay for all travel and
lodging of Qwest personnel.
8.2 Corvis will certify attendees upon successful completion of the course.
Such course content and materials may be tailored or customized by Qwest for its
internal use only.
ARTICLE 9. SOFTWARE LICENSE.
9.1 Upon delivery of the Software, Corvis grants to Qwest a perpetual (except
as provided in this Agreement), irrevocable (except as provided in this
Agreement), personal, nontransferable (except as provided in this Agreement),
and nonexclusive license (or, with respect to the Third
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Party Software, a sublicense) to use anywhere in North America or any European
Union member country such Software and its related Documentation provided
pursuant to the terms and subject to the conditions of this Agreement. Use of
the Software is restricted to the specified number of Network Elements or the
designated equipment, as applicable ("Designated Equipment") set forth on
--------------------
Qwest's Purchase Order(s). If any Designated Equipment becomes inoperative,
Qwest will have the right to use the Software on comparable backup equipment
until such Designated Equipment is restored to operable status. The license
grants Qwest no right to and Qwest will not sublicense such Software, or modify,
decompile or disassemble Software furnished as object code to generate
corresponding Source Code. Qwest and its customers will be entitled to modify
only the user-controlled features of the Software as provided for in the related
Documentation. With respect to any Third Party Software, in addition to the
terms and conditions herein, Qwest will abide by the applicable terms and
conditions for such Third Party Software, provided that Corvis has provided
Qwest with a copy of such terms and conditions. Attachment 9.1 lists the Third
Party Software licenses that are applicable as of the date of this Agreement.
Corvis shall update such Attachment 9.1 within thirty (30) days of incorporation
of Third Party Software into Products or otherwise offered by Corvis.
9.2 The CEM Software provided for use on Sun Workstations may only be used on
such workstation if such Software is the only software running on such
workstation and access to such workstation is password protected.
9.3 All Software (whether or not part of firmware) and its related
documentation furnished by Corvis, and all copies thereof made by Qwest,
including translations, compilations, and partial copies, are and will remain
the exclusive property of Corvis and its licensors. However, any Qwest specific
configuration, application, or arrangement of the Software and its systems into
networks, as well as any output from the normal use of the Software, shall
remain Confidential Information Qwest, and Qwest shall retain ownership of its
data and any products developed by Qwest; it being understood that nothing in
this Agreement shall be deemed to impose any restrictions on the configurations
or arrangements in which Corvis may implement its Products for third parties.
Additionally, Qwest shall retain sole and exclusive ownership of Qwest data
which is incorporated in products derived or produced by Qwest's normal use of
the Software. Finally, nothing in this Agreement shall be deemed to prohibit
either party from using any ideas or information that is not Proprietary
Information of the other party or its licensors.
Qwest will not, without Corvis' prior written consent, disclose, provide
access to, or otherwise make available, in whole or in part, any Software or
related documentation including any description of the Corvis Management
Information Base (MIB) sections of the Software to anyone, except to its
employees, and those agents and subcontractors that are not competitors of
Corvis having a need to know for purposes of operating or maintaining the
related Product, and except to its customers to the extent necessary to permit
them to utilize customer-controlled features in accordance with the applicable
Documentation. Such availability will be limited to only those portions of the
Software and its related documentation for which there is a need-to-know for
purposes of
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operating or maintaining the related Product. All such access to the Software
shall be granted only through passwords individually assigned to the authorized
personnel, with appropriate access level restrictions tied to each password.
Qwest shall take all steps reasonably necessary to ensure that the personnel
accessing the Software do so only by using that personnel's assigned password,
so as to permit Corvis to maintain an accurate automated log of the personnel
accessing the Software. Qwest will use reasonable efforts to provide Corvis with
prompt written notice of any unauthorized use of the Software and its related
documentation and reasonably cooperate with Corvis in enforcing Corvis'
proprietary rights in the Software and its related documentation. Qwest shall
safeguard said Software with the same degree of care and diligence as Qwest
affords to its own similar property, but in no event less than reasonable care.
Qwest will not, and will not permit any other person to, copy, duplicate,
modify, alter, enhance, revise, summarize or prepare derivative works from any
portion of the MIB sections of the Software except to the extent necessary to
permit authorized Qwest personnel to utilize customer-controlled features of
such Software in accordance with the applicable Documentation. Qwest will not
copy Software embodied in firmware or of any other Software or related
documentation except as necessary for maintaining archival copies in accordance
with Qwest's customary practices. Such archival copies will be stored on systems
under password protection, and otherwise in accordance with the same security
procedures as Qwest uses to protect its own sensitive and proprietary software,
but in any event in a reasonably secure manner. Qwest will reproduce and include
any Corvis copyright and proprietary notice on all such necessary copies of the
Software and its related documentation. Qwest will take appropriate action, by
instruction, agreement, or otherwise, with the persons permitted access to the
Software and related documentation to enable Qwest to satisfy its obligations
under this Agreement. When the Software and related documentation are no longer
needed by Qwest, or if Qwest's license is canceled or terminated, Qwest will
return all copies of such Software and related documentation to Corvis or follow
written disposition instructions provided by Corvis.
9.4 Qwest may transfer its right to use Software furnished under this Agreement
to a Qwest Affiliate or a third party approved by Corvis, which approval shall
not be unreasonably withheld, without the payment of an additional right-to-use
fee, except for additional fees that would have been applicable to Qwest with
respect to usage sensitive factors (e.g., feature pricing based on activation
level). Such transfer will be made only to another end user for their own
internal use, but not to any competitor of Corvis and only under the following
conditions:
(a) Such Software may be used only in accordance with the license granted
in Section 9.1 above.
(b) The right to use such Software may be transferred only together with
the Designated Equipment with which Qwest has a right to use such Software,
as long as such transfer of the Designated Equipment is permitted pursuant
to Section 12.3, and
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such right to use the Software will continue to be limited to use with such
Designated Equipment;
(c) Before any such Software may be transferred, Qwest will notify Corvis
in writing of such intended transfer and the transferee will have agreed in
writing (a copy of which will be provided to Corvis before such transfer)
to the terms and conditions of this Agreement and any amendments thereto.
9.5 Subject to Section 9.2, upon advance written notice to Corvis, Qwest may
physically transfer Software or optional feature packages, for which Qwest has
the right to use, from one Qwest-owned workstation computer and relocate them to
another Qwest-owned workstation computer, provided that (a) the Product from
which the Software has been transferred will cease to be Designated Equipment
for such transferred Software and the workstation computer to which the Software
has been transferred will thereafter be deemed to be the Designated Equipment,
and (b) the Software delivered by Corvis pursuant to a Purchase Order will not
be resident at any time on more than the total number of items of Designated
Equipment for such Software set forth on the applicable Purchase Order. Qwest
will not be required to pay additional right-to-use fees as a result of such
relocation, except for additional fees that would have been applicable to Qwest
with respect to usage sensitive factors.
9.6 Within thirty (30) days after the Commencement Date, Corvis and Qwest will
enter into an escrow agreement, in the form set forth in Attachment 9.6 and
acceptable to both parties ("Escrow Agreement"). The escrow agent for the
----------------
Escrow Agreement will be Fort Knox Escrow Services, Inc. or another escrow agent
acceptable to both parties. Corvis will bear the cost of providing Corvis'
Source Code to the Escrow Agent. Qwest will pay the Escrow Agent's charges,
including any costs associated with testing the Source Code in Escrow or with
release of such Source Code. Upon execution of the Escrow Agreement by both
parties, Corvis will place in escrow the Source Code version of the Software
(excluding Third Party Software). Thereafter, Corvis will supplement the
materials in escrow to include upgrades and new releases of the Software
(excluding Third Party Software) then in use by Qwest. The Escrow Agreement
will provide for the availability of the materials in escrow, subject to the
terms and conditions of the Escrow Agreement.
Corvis shall keep and maintain a copy of Software Source Codes and other
Documentation relevant to the use and maintenance of the Software licensed
hereunder, including without limitation the current release of the Software. In
the event the Escrow Agreement expires, terminates or is otherwise not
enforceable, and should Corvis at a future date: (i) declare voluntary
bankruptcy or be the subject of an involuntary bankruptcy; or (ii) cease
supporting the Products including the Software, then Corvis agrees and commits
to Qwest that it will promptly and free of charge make available all such
Software Source Codes and other relevant Corvis proprietary data information
which Corvis has a legal right to sublicense, and grant to Qwest a non-exclusive
perpetual, irrevocable, worldwide license to use, modify, copy and make
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derivative such Software Source Code solely for the purpose of supporting and
maintaining the Products including Software, for Qwest's and its Affiliates' own
internal use in accordance with the terms of this Agreement. Corvis
acknowledges that if a trustee in bankruptcy or Corvis as a debtor in possession
rejects this Agreement, Qwest may elect to retain its rights under this
Subsection as provided in Section 365(n) of Title 11, United States Code (the
"Bankruptcy Code").
ARTICLE 10. SOFTWARE CHANGES.
10.1 Corvis will furnish to Qwest preliminary planning information and
Documentation for new releases of the Software. Such information will be
provided at no charge to Qwest. New generally available release of the Software
constituting a Class B Change may be licensed by Qwest at Corvis' then-current
standard license fees, less any volume discounts that may be mutually agreed
upon by the parties in writing, except to the extent such releases are included
in the Maintenance and Support Services purchased by Qwest pursuant to the terms
of this Agreement.
10.2 Software licensed to Qwest under this Agreement may contain supplemental
optional features or enhancements that are separately priced. Qwest agrees not
to activate such optional features or enhancements without written authorization
from Corvis and Qwest's payment of the appropriate license fees. If, in spite of
Qwest's best efforts to comply with this restriction, such features are
activated, Qwest will so notify Corvis promptly and pay Corvis the license fees
for the activated features. Upon reasonable advance notice to Qwest, Corvis will
have the right, through an independent third party, to inventory Qwest's usage
of Corvis Equipment and Software in conjunction with Qwest to assure compliance
with the terms of this Agreement.
ARTICLE 11. PRODUCT CHANGES.
11.1 Prior to shipment, Corvis may at any time make changes in Products or
modify the drawings and specifications relating thereto or substitute Products
of later design, provided the changes, modifications or substitutions under
normal and proper use do not: (i) adversely impact upon Form, Fit or Function of
the ordered Equipment; (ii) adversely affect the Product Life as compared to the
Product prior to such change or modification, (iii) materially and adversely
impact operation or performance of any such changed Product as compared to the
Product prior to such change or modification, as determined by Qwest in its
reasonable discretion; (iv) make the changed Product less compatible with
Qwest's network components as compared to the Product prior to such change or
modification; (v) prevent any Product from meeting (though it may exceed) the
applicable Technical Requirements; or (vi) materially adversely affect the use,
function or performance of the ordered Software, as provided in the Technical
Requirements. Unless otherwise agreed by the parties in writing, such Software
substitution will not result in any additional charges to Qwest with respect to
licenses for which Corvis has quoted fees to
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Qwest. With respect to changes, modifications, and substitutions that affect the
Product as set forth in subsections (i) through (vi) above, Corvis will notify
Qwest in writing ninety (90) days prior to their effective dates. In the event
any such change is not desired by Qwest, Qwest will notify Corvis within thirty
(30) days from the date of notice and Corvis will not furnish any such changed
Products to Qwest on any orders in process at the time Corvis is so notified. In
no event will Corvis change the Form, Fit, Function, use or performance of any
Product if such change causes the ordered Product not to conform to the
Technical Requirements.
Corvis may discontinue any Product or Software version if Corvis gives Qwest at
least one (1) year's notice thereof. In such event, Corvis will provide Qwest
with a suggested product replacement which meets or exceeds the Technical
Requirements, has substantially the same Form, Fit and Function and is at least
equally compatible with Qwest's network components as the discontinued Product
it replaces. Qwest will have the right to substitute the replacement product
for the Product under this Agreement, at a price to be negotiated by the
parties. If Qwest elects not to use the suggested replacement product, Corvis
will offer Qwest a one-year period beginning the day of the notice of
discontinuance within which Qwest may place orders for the discontinued Product.
Qwest may give a last order ("One Time Buy Order") immediately prior to the end
------------------
of the six-month period beginning the day of the notice of discontinuance. The
One Time Buy Order is non-cancelable, non-reschedulable and non-returnable,
except as otherwise provided in this Agreement, including without limitation
Acceptance as set forth in Article 2. Products ordered with the One Time Buy
Order will be delivered to Qwest as requested by Qwest but no later than one (1)
year after the notice of discontinuance.
11.2 Class Changes.
(a) After Corvis Product(s) has been shipped to Qwest, if Corvis issues a
Class A Change or Class B Change, or where modification to correct an error
in Documentation is to be introduced, Corvis will promptly notify Qwest of
such change through Corvis' designated notification procedure ("Change
------
Notification"). Corvis will promptly provide, or cause the respective
------------
manufacturer to provide, to Qwest any changes comparable to Class A and
Class B Changes (to the extent they are made available by manufacturers
with respect to Vendor Items sold to Qwest by Corvis); it being understood
that the respective manufacturers of the Vendor Items may not provide such
changes for the same period of time for which Corvis is obligated to
provide Class A and Class B changes.
(b) Corvis will, at its expense, furnish the parts and documentation
necessary for Qwest to implement such Class A Change if it is issued within
the Warranty or Maintenance Periods for the applicable Product.
(c) In any of the instances above, if Corvis determines that the Equipment
or part thereof subject to such change is readily returnable (e.g. plug-in
items), Qwest, at its expense, will remove and will return such Equipment
or part to Corvis' facility and
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Corvis, at its expense, will implement such change at its facility and
return such changed Equipment or part to Qwest's designated location.
Reinstallation will be performed by Corvis' at its expense.
(d) Corvis' undertaking under this Article 11 with respect to Vendor Items
is limited to the extent changes comparable to Class A Changes are provided
by the respective manufacturers of Vendor Items.
(e) If Qwest does not make or permit Corvis to make a Class A Change
Notification within one (1) year after the date of the related Change
Notification, subsequent changes, repairs or replacements affected by the
failure to make such change may, at Corvis' option, be billed to Qwest
whether or not such subsequent change, repair, or replacement is covered
under warranty.
(f) If Corvis or any applicable manufacturer of a Vendor Item issues a
Class B Change (or comparable change in the case of such manufacturer)
after such Product has been shipped to Qwest, Corvis will promptly notify
Qwest of such change if it is being generally offered to Corvis' customers.
When a Class B Change is requested by Qwest, billing will be at Corvis'
applicable prices or the respective manufacturer's then-current prices to
Corvis, as the case may be, less any volume discount that may have been
mutually agreed upon by the parties. Notwithstanding the above, there will
be no charge for any Class B Change (or, in the case of a Vendor Item, a
comparable change) if such Change is included in the Maintenance or Support
Services then in effect pursuant to the terms of this Agreement.
11.3 Corvis reserves the right to discontinue any product that is a Product
under this Agreement if Qwest has not ordered any of that Product for two (2)
consecutive years. Corvis will provide a minimum of ninety (90) days' prior
notice for Products being discontinued.
11.4 Unless otherwise agreed upon by the Parties in a separate written
Agreement, Corvis reserves the right to develop, manufacture and market Products
incorporating new features, functionality, or performance characteristics as a
result of Qwest's suggestions or input, or or as a result of Corvis' observation
of Qwest's use and operation of the Products. Qwest acknowledges that such
Products will be the sole and exclusive property of Corvis.
11.5 Corvis shall make available to Qwest sufficient repair and spare parts for
each Product furnished under this Agreement to keep such Product Operative for
its Product Life. For the duration of the Product Life of any Product , annual
price increases for such repair parts shall not exceed the greater of (i) four
percent (4%) or (ii) the increase in the Consumer Price Index during the
preceding twelve month period. Corvis, at its option and expense, may replace
Products for which repair parts are no longer available with functionally
equivalent Products provided that such Products meet the Technical Requirements.
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ARTICLE 12. PROPRIETARY INFORMATION.
12.1 Each Party acknowledges the other Party's ownership of trade secrets,
proprietary or confidential information, including but not limited to products,
planned products, services or planned services, the identity of or information
concerning customers or prospective customers, data, financial information,
computer software, processes, methods, knowledge, inventions, ideas, marketing
promotions, discoveries, current or planned activities, research development or
other information relating to the other Party's business activities or
operations and those of its customers or subcontractors, as well as the pricing
and other terms and conditions of this Agreement (collectively referred to
hereinafter as the "Proprietary Information").
12.2 (a) This Agreement creates a confidential relationship between Qwest and
Corvis and, in the course of, negotiating or performing this Agreement,
including providing Products pursuant to this Agreement, the disclosing
Party may disclose Proprietary Information to the receiving Party. The
receiving Party will keep Proprietary Information confidential and, except
as directed or authorized in writing, will use Proprietary Information only
to provide the Products and services pursuant to this Agreement and will
not disclose to any person or entity, directly or indirectly, in whole or
in part, any Proprietary Information, information prepared from Proprietary
Information, or information that comes into possession by reason of
services hereunder. Dissemination of Proprietary Information will be
limited to the personnel within the receiving Party's organization with a
need to know and solely for the purpose of the performance of duties
hereunder. Upon cessation of work hereunder, the receiving Party will
return or destroy and certify to the disclosing Party such destruction of
all documents, papers and other materials in its control that contain or
relate to Proprietary Information. To the extent practicable all
Proprietary Information disclosed to the receiving Party will be promptly
identified as such by the disclosing Party in writing.
(b) The receiving Party will protect the Proprietary Information from
unauthorized use or disclosure by exercising the same degree of care that
it uses with respect to information of its own of a similar nature, but in
no event less than reasonable care.
12.3 Qwest acknowledges and agrees that the Products constitute and embody the
valuable trade secrets and intellectual property of Corvis developed at great
expense to Corvis. Qwest may not sell, assign or otherwise transfer any of the
Products to a third party other than to: (i) a communications carrier for its
own internal use in providing communication services; or (ii) an Affiliate,
without the prior written consent of Corvis, which consent will not be
unreasonably withheld. Qwest agrees that it would be reasonable for Corvis to
withhold its consent to any such sale, assignment or transfer of any Product to
a company directly involved in the development, marketing, distribution or sale
of any products that are competitive with the Products.
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12.4 Notwithstanding anything to the contrary contained herein, no information
will be deemed Proprietary Information if the Party receiving such information
hereunder or any of its Affiliates ("Receiving Party") can demonstrate that
---------------
such information: (a) is generally known to the public on the date of disclosure
of same or becomes generally known to the public after such date through no
breach of this Agreement or any other obligation of confidentiality; (b) was
known by the Receiving Party without any obligation to hold it in confidence at
the time of disclosure; (c) is received by the Receiving Party after the date of
disclosure by the other Party or any of its affiliates ("Disclosing Party") from
----------------
a third Party without breach of any obligation of confidentiality and without
any obligation of confidentiality binding upon the Receiving Party; (d) is
independently developed by the Receiving Party after the date of disclosure by
employees without access to Proprietary Information of the Disclosing Party; (e)
is approved for release by written authorization of the Disclosing Party, but
only to the extent of and subject to such conditions as may be imposed in such
written authorization; (f) is required by law, rule or regulation, including
requirements of the applicable securities exchanges, to be disclosed, but only
to the extent and for the purposes of such required disclosure and subject to
Section 12.5; or (g) is disclosed in response to a valid order of a court or
other governmental body, but only to the extent of and for the purposes of such
order and subject to Section 12.5.
12.5 If a Receiving Party is or may be required by law or court order to
disclose any Proprietary Information of a Disclosing Party, such Receiving
Party: (a) will provide to such Disclosing Party immediate notice of such
possible disclosure; and (b) will permit such Disclosing Party, at its expense,
to take all reasonable actions to eliminate such requirement of such disclosure,
to limit the scope of same and to obtain protective orders to protect the
confidentiality of such Proprietary Information, including, without limitation,
filing motions and otherwise making appearances before the court.
12.6 The provisions of this Article 12 will survive any termination or
expiration of this Agreement.
12.7 A Party shall not use the other Party's name, logo, trademark(s) or service
mark(s) or refer to the other Party directly or indirectly in any advertising,
sales presentation to any other person, news release, release to any
professional or trade publication or for any other purpose without the other
Party's prior written approval.
12.8 Notwithstanding the foregoing, neither Party shall reverse-engineer,
decompile or disassemble any hardware or software provided or disclosed to it
and shall not remove, overprint or deface any notice of copyright, trademark,
logo, legend or other notice of ownership from any originals or copies of
Proprietary Information it obtains from the other Party.
ARTICLE 13. WARRANTIES, AND WARRANTY EXCLUSIONS AND LIMITATIONS.
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13.1 Corvis warrants and represents to Qwest, or the applicable Qwest Affiliate
that purchases the Products hereunder that (i) for the applicable warranty
period set forth in Attachment 13.1 ("Warranty Period") and subject to the
---------------
support limitations set forth in Attachment 8.1, the Corvis Equipment and
Software (as applicable) will be free from defects in material and workmanship
and will conform, in all material respects to its specifications, which in the
case of the OC-192 Product shall be the Technical Requirements, (ii) upon
delivery, the Equipment will be free from all liens and encumbrances, and (iii)
Corvis' Services will be performed in a professional and workmanlike manner by
competent personnel and in accordance with industry standards. With respect to
any Third Party Software or any Equipment furnished by Corvis but neither
manufactured by Corvis nor purchased by Corvis pursuant to its procurement
specifications (e.g., items such as personal computers and products offered as
accessories to the Corvis Products) which are identified as such on the Price
List ("Vendor Items"), Corvis does hereby assign to Qwest the warranties given
------------
to Corvis by its vendor(s) of such Vendor Items to the fullest extent permitted
by such warranties.
13.2 With respect to Products repaired or replaced during the applicable
Warranty Period, Corvis warrants, for a period equal to the greater of (i) the
remaining unexpired portion of such Warranty Period, or (ii) ninety (90) days
from the date the repair is effected, in the case of Products repaired at the
Installation Site, and from the date a replacement is shipped to Qwest, in the
case of defective Products that are replaced, that such Products will satisfy
and perform in accordance with the warranty set forth in clause (i) in Section
13.1, throughout such time period.
13.3 Corvis may use either new or remanufactured, reconditioned or refurbished
Equipment or parts if in like-new condition, or functionally equivalent
Equipment or parts (at equivalent or comparable prices) in the furnishing of
repairs or replacements under this Agreement. Corvis will have appropriate
safeguards and systems in place to assure that parts previously determined to be
defective are not reused unless they have been proven to be in compliance with
applicable specifications. Corvis warrants, except as stated in the Technical
Requirements, or as otherwise mutually agreed by the parties, that it shall not
intentionally insert, and shall use commercially reasonable efforts to prevent
the introduction, into the Software provided to Qwest by Corvis any harmful
programs, data, circuitry or other technological means ("Harmful Code") which
------------
is intended to materially disrupt the proper operation of a computer hardware
system or associated software. In the event Corvis breaches the warranty in the
preceding sentence and as a result Harmful Code is present in the Software,
Corvis shall indemnify Qwest and hold Qwest harmless from and against any and
all direct damages caused by such Harmful Code, subject to the limitations and
exclusions in Sections 15.6 and 15.7.
13.4 Corvis warrants that it has good marketable title to the Equipment provided
to Qwest under this Agreement.
13.5 Corvis warrants that the Products (other than Third Party Software)
provided under the Agreement shall be able to accurately process data
(including without limitation, calculating,
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compiling and sequencing date data) from, into and between the twentieth and
twenty-first centuries, including leap year calculations, and will create,
store, process and exchange (input and output) information related to or
including dates on or after January 1, 2000, without error or omissions, as long
as, and only to the extent that, all other information technology used in
combination with such Product (e.g., software, firmware, hardware) properly
exchanges date data with it. If Qwest reports to Corvis on or before expiration
of the Warranty Period for the Product that a Product does not meet the warranty
in this Section 13.5, Corvis will: (i) exercise commercially reasonable efforts
to correct any material non-compliance; and (ii) provide any resulting
correction to Qwest, without charge. This is Qwest's exclusive remedy for breach
of the warranty under this Section 13.5. Subject to the provisions of Section
13.1, Corvis makes no warranties regarding third party products provided by
Corvis under this Agreement. Corvis' sole obligation with respect to such third
party products will be to assign to Qwest any warranty provided to Corvis with
respect to such products to the extent such warranty is assignable, and if any
such warranty is not assignable, then to take commercially reasonable steps to
enforce the warranty for Qwest's benefit.
13.6 THE WARRANTIES IN THIS ARTICLE 13, SECTION 19.1, AND SECTION 23.16 ARE THE
EXCLUSIVE WARRANTIES WITH RESPECT TO ANY OF THE PRODUCTS OR SERVICES PROVIDED
HEREUNDER, 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. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, QWEST'S SOLE
AND EXCLUSIVE REMEDY WILL BE CORVIS' OBLIGATION TO REPAIR OR REPLACE OR, SUBJECT
TO THE CONDITIONS STATED IN THIS ARTICLE 13 AND IN ARTICLE 15, TO CREDIT OR
REFUND AS SET FORTH SECTION 15.1.
13.7 In the event that Qwest (i) makes any unauthorized modifications to the
Equipment or Software, which shall not include a user controlled feature or
option that is configured in accordance with the Documentation for such
Equipment or Software, or (ii) uses the Equipment or Software in the core
optical network in connection with any other equipment or software not specified
in the associated Documentation or otherwise approved by Corvis, the Equipment
and Software warranty will be voided with respect to the Equipment or Software
so modified or used with such equipment or software. Corvis and Qwest agree to
cooperate to plan the configuration of Qwest's network to optimize its
efficiency.
13.8 Corvis makes no warranty with respect to defective conditions or non-
conformities resulting from the following: Qwest (including third parties
contracted by Qwest) modifications, misuse, neglect, accident or abuse; improper
wiring, repairing, splicing, alteration, installation, storage or maintenance by
Qwest (or third parties contracted by Qwest), not including Qwest's
configuration of user controlled features or options in accordance with the
applicable Documentation; use in a manner not in accordance with the applicable
specifications (including the Technical Requirements and user Documentation), or
failure of Qwest to apply previously
25
<PAGE>
applicable Corvis modifications or corrections, which were provided at no charge
to Qwest and that do not impair the applicable Product's compatibility with
Qwest's network components. In addition, Corvis makes no warranty with respect
to Products which have had their serial numbers or month and year of manufacture
removed, altered and with respect to expendable items. Corvis makes no warranty
with respect to defects related to Qwest's database errors. Moreover, no
warranty is made that Software will run uninterrupted or error free.
13.9 Qwest agrees not to use any third party equipment or software in
connection with the Corvis Equipment and Software, other than the [*] interfaces
of the Corvis [*] modules, [*] and order wire interfaces, or the network
management interfaces provided on the Corvis Equipment and Software. Corvis
acknowledges that Qwest prefers open architecture and Corvis agrees to
investigate ways to develop open architecture products. Qwest represents that
the Products are being acquired hereunder for Qwest's and its Affiliates'
internal use and not for resale to any third party.
ARTICLE 14. REPRESENTATIONS AND OTHER WARRANTIES.
14.1 Each Party represents and warrants that it is duly organized, existing and
in good standing under the laws of its State of organization, and is duly
qualified as a foreign corporation and in good standing in all jurisdictions in
which the failure to so qualify would have a materially adverse impact upon its
business and assets.
14.2 Each Party represents and warrants that it has the corporate power and
requisite authority to execute, deliver and perform this Agreement, any Escrow
Agreement entered into pursuant to this Agreement, and all Purchase Orders to be
executed pursuant to or in connection with this Agreement, and that it is duly
authorized to, and has taken all corporate action necessary to authorize, the
execution, delivery and performance of this Agreement and such other agreements
and documents.
14.3 Each Party represents and warrants that neither the execution and delivery
of this Agreement and the agreements or documents stated in Section 14.2 above
executed by it pursuant to or in connection with this Agreement, nor the
consummation of any of the transactions herein or therein contemplated, nor
compliance by it with the terms and provisions hereof or with the terms and
provisions thereof will (i) contravene or materially conflict with any provision
of applicable law to which it is subject or any judgment, license, order or
permit applicable to it, or any indenture, mortgage, deed of trust, or other
agreement or instrument to which it is a party or by which it or its property
may be bound, or to which it or its property may be subject, (ii) violate any
provision of its articles of incorporation or bylaws or partnership agreement,
if any or (iii) require the consent or approval of, the giving of notice to, or
the registration, recording or filing of any document with, or the taking of any
other action in respect of, any person, entity or governmental agency.
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14.4 Each Party represents and warrants that this Agreement and the agreements
or documents stated in Section 14.2 above executed by it pursuant to or in
connection with this Agreement will constitute when executed in full the legal,
valid and binding obligations of said Party, enforceable in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws affecting the
enforcement of creditors rights generally and to general principles of equity.
ARTICLE 15. REMEDIES AND LIMITATIONS.
15.1 If, under normal and proper use (i.e., as approved by Corvis or as
provided in the applicable Technical Requirements and Documentation) any Product
fails to conform to the warranty specified in Article 13 during the applicable
Warranty Period, Corvis will promptly, but in any event within thirty (30) days,
repair or replace, at its option and expense, all such defective or
nonconforming Product so as to cause it to satisfy, and perform in accordance
with, in all material respects, its applicable Technical Requirements. Corvis
shall use commercially reasonable efforts to correct any non-material
Nonconformity in a commercially reasonable time period following notice from
Qwest of such non-material Nonconformity. If Corvis cannot repair or replace
such Product in a commercially practicable manner, it will provide a refund for
the original purchase price or license fee paid by Qwest for such Product and
such other Products which are rendered useless by the defective Product. If
Corvis' installation Services prove not to be performed as warranted, within a
six (6) month period commencing on the date of Acceptance of the Services,
Corvis, at its option, either will correct the defect or non-conforming Services
or render a full refund for such defective or non-conforming Services based on
the original charges for such Services. In no event shall the maximum aggregate
amount that Qwest will be permitted to recover as a result of Corvis' breach of
the warranty set forth in Sections 13.1 and 13.2 [*].
No Product will be accepted for repair or replacement unless returned in
accordance with reasonable instructions of Corvis which were provided to Qwest
in writing prior to such request for warranty services. Removal and
reinstallation expenses as well as transportation expenses associated with
returning such Product to Corvis for readily returnable Products (e.g., plug-in
items) will be borne by Corvis only if Corvis performed improper installation
services necessitating such removal and reinstallation. Corvis will pay the
costs of transportation of the repaired or replaced Product to the destination
designated by Qwest. In repairing or replacing any Equipment or Software medium
under this warranty, Corvis may use either new Products or parts or
remanufactured, reconditioned or refurbished Products or parts if in like-new
condition or functionally equivalent Products or parts. Replaced Products or
parts will be retained by Corvis and become Corvis' property. Replacement
Products or parts become the property of Qwest.
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15.2 In the event Qwest returns Products for repair, which in Corvis'
reasonable determination are not defective, Corvis may require that Qwest pay,
with respect to any subsequently returned Products which prove not to be
defective, a reasonable fee which reflects Corvis' reasonable cost of handling,
inspecting and testing and, if applicable, travel and related expenses by
Corvis' employees.
15.3 The parties acknowledge that disclosure of any Proprietary Information
other than as allowed by Articles 9 or 12 may give rise to irreparable injury
and may be inadequately compensable in monetary damages and therefore the non-
disclosing Party will be entitled to seek and to obtain injunctive or other
equitable relief against the breach or threatened breach of the obligations of
said Articles 9 or 12, in addition to any other remedies which may be available.
15.4 The remedies available to either Party under this Agreement are
cumulative. The exercise of any one remedy will not be deemed an election of
such remedy to the exclusion of other remedies; and, except as limited by the
terms of this Agreement, the rights and remedies of the parties as set forth in
this Agreement are not exclusive and are in addition to any other rights and
remedies available to it at law or in equity.
15.6 IN NOT EVENT WILL EITHER PARTY'S AGGREGATE LIABILITY TO THE OTHER PARTY
AND ITS AFFILIATES UNDER THIS AGREEMENT EXCEED AN AMOUNT EQUAL TO THE GREATER OF
(i) THE TOTAL AMOUNT PAID OR PAYABLE UNDER THIS AGREEMENT BY QWEST (ASSUMING IN
THE CASE OF CORVIS' LIABILITY THE AMOUNT PAYABLE IS IN FACT PAID) DURING THE
TWELVE (12) MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO SUCH LIABILITY, OR
(ii) THE MINIMUM LIABILITY LIMIT. THE TERM "MINIMUM LIABILITY LIMIT" WILL MEAN
(A) $[*] MILLION IN THE CASE OF DAMAGES ARISING FROM A BREACH OF ARTICLE 12,
WILLFUL MISCONDUCT, LIABILITY ARISING UNDER THE INDEMNITY OBLIGATIONS SET FORTH
IN ARTICLES 18 OR 19, OR (B) $[*] MILLION IN ALL OTHER CASES. THE FOREGOING
LIMITATION ON QWEST'S LIABILITY WILL NOT APPLY TO ANY OF QWEST'S PAYMENT
OBLIGATIONS AS SET FORTH IN THIS AGREEMENT.
15.7 NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NEITHER PARTY, NOR
ITS AFFILIATES, AND THEIR DIRECTORS, EMPLOYEES AND AGENTS, WILL BE LIABLE FOR
ANY INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES OR LOST
PROFITS, REVENUES OR SAVINGS ARISING OUT OF THIS AGREEMENT, OR THE USE OR
PERFORMANCE OF ANY PRODUCT OR SERVICES, WHETHER IN AN ACTION FOR OR ARISING OUT
OF BREACH OF CONTRACT, TORT, OR OTHERWISE. THIS PARAGRAPH WILL SURVIVE FAILURE
OF AN EXCLUSIVE OR LIMITED REMEDY. THE FOREGOING WILL NOT BE DEEMED TO LIMIT.
EITHER PARTY'S INDEMNITY OBLIGATIONS UNDER ARTICLES 18 OR 19, ANY DAMAGES
ARISING FROM A BREACH OF ITS OBLIGATIONS UNDER ARTICLE 12 OR LIABILITY RESULTING
FROM THE WILLFUL MISCONDUCT OF SUCH PARTY, OR ITS EMPLOYEES, AGENTS OR
CONTRACTORS WHILE ACTING ON SUCH PARTY'S BEHALF.
ARTICLE 16. SUPPORT AND OTHER SERVICES.
16.1 Qwest may purchase the maintenance and support services ("Maintenance and
---------------
Support Services") identified in Attachment 8.1 for the Products. Qwest may
----------------
purchase additional maintenance and support services at mutually agreeable
rates.
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ARTICLE 17. INSURANCE.
17.1 During the Term, Corvis and any of its subcontractors shall maintain
insurance of the kinds and in the amounts specified below with insurers of
recognized responsibility, whose policies are valid in the states where the work
is being performed.
17.2 In accordance with the above, Corvis and any subcontractors shall maintain
the following insurance coverages:
(a) Comprehensive general liability insurance:
Commercial general liability insurance with a combined single limit for
bodily injury and property damage of $2,000,000 each occurrence and General and
Products Liability aggregates of $10,000,000 each, covering all operations
and/or work performed under this Agreement.
(b) Business automobile liability insurance:
Business automobile liability with a combined single limit for bodily
injury and property damage of $2,000,000 each occurrence to include coverage
for all owned, non-owned, and hired vehicles.
(e) Worker's compensation and employers' liability insurance:
Worker's compensation insurance complying with the law of the State or States of
operation, whether or not such coverage is required by law, and employer's
liability insurance with limits of $500,000 each employee and $500,000 disease
policy limit.
17.3 Certificates of such insurance shall be submitted to Qwest naming Qwest as
an additional insured as its interest may appear with respect to Sections 17.2
(a) and 17.2 (b) prior to the start of any Work to be performed by Corvis or its
subcontractors on Qwest's premises. These certificates shall provide that there
will be no termination or non-renewal of such coverage without thirty (30) days
prior written notice to Qwest, in which case Corvis shall still maintain
insurance and which may require certificate, and in no case where this Agreement
is still in effect.
17.4 Corvis shall require each subcontractor to provide and maintain at all
times during the term of this Agreement insurance equivalent to that which is
required of Corvis.
17.5 Should Corvis at any time refuse to provide the insurance required
pursuant to this Section, or should such insurance be canceled or non-renewed,
Qwest shall have the right, at its own expense, to purchase such insurance.
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ARTICLE 18. INDEMNIFICATION.
18.1 Corvis will be responsible for and agree to indemnify, defend and hold
harmless Qwest, its officers, directors, employees, agents, subsidiaries, parent
and Affiliates, from and against all losses, liabilities, demands, claims,
actions, proceedings, suits and damages (including reasonable legal fees) for
injury and death to persons or damage to tangible property to the extent it
results directly from the intentional or negligent acts or omissions, of Corvis,
its officers, agents, employees, or contractors.
18.2 Qwest will be responsible for and agrees to indemnify, defend and hold
harmless Corvis, its officers, directors, employees, agents, subsidiaries,
parent and Affiliates, from and against all losses, liabilities, demands,
claims, actions, proceedings, suits and damages (including reasonable legal
fees) for injury, including death, to persons or damage to tangible property to
the extent it results directly from the intentional or negligent acts or
omissions of Qwest, its officers, agents, employees or contractors.
18.3 With respect to each of Sections 18.1 and 18.2 above, the indemnified
Party will give the indemnifying Party prompt written notice of all such claims,
actions, proceedings or suits and the indemnifying Party will have the sole
defense thereof, including appeals, and the sole right to settle the same;
provided, however, that the indemnifying Party will not agree to any settlement
which imposes liability or obligation on the indemnified for which the
indemnified Party is not fully indemnified without first obtaining the
indemnified Party's consent. The indemnified Party will, upon the indemnifying
Party's request and at the indemnifying Party's expense, furnish all relevant
information available to the indemnifying Party and cooperate and assist the
indemnifying Party in every reasonable way to facilitate the defense and/or
settlement of any such claim, action, proceeding or suit.
ARTICLE 19. PATENT, COPYRIGHT AND TRADE SECRET.
19.1 Corvis warrants and represents that it or its Affiliates are the owners or
licensee of the Products, or, if the Products or other materials contain third
party products or software, that Corvis has the full power and authority to
deliver, convey and grant to Qwest the related license and other rights granted
under this Agreement with respect to the Software. Corvis further warrants that
Corvis' provision of Services under this Agreement, grant of the licenses to the
Software hereunder, and Qwest's use of the Products in the manner permitted
hereunder and described in the Documentation will not constitute a
misappropriation of any trade secrets or constitute infringement any North
American or European Union member country patent, copyright, trademark or other
intellectual property right of a third party. Corvis further warrants that as
of the Effective Date, Corvis has not received written notice of any pending
lawsuits, claims, disputes or actions that it reasonably considers significant
alleging that the Products
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infringe or misappropriate any intellectual property rights. Qwest's sole and
exclusive remedy, and Corvis' sole and exclusive liability, for any breach of
the foregoing warranties shall be the indemnity provided in Section 19.2 and
obligations set forth in 19.3.
19.2 Corvis shall defend or settle, at its expense, any threatened or actual
claim, suit or proceeding made by a third party against Qwest alleging that the
Products or Qwest's use of thereof infringes any United States or European Union
member country patent, trademark, copyright, trade secret or other intellectual
property right of a third party subject to Section 19.4 below ("Infringement
------------
Claim"), and shall indemnify, defend and hold Qwest harmless against all
-----
damages, claims, costs of investigation, litigation, settlements, judgments
disbursements, expenses, including reasonable attorneys' fees, and fines
("Losses") arising from such Infringement Claim and assessed against Qwest by
------
final judgment or settlement. Qwest agrees to (i) provide Corvis prompt written
notice following Qwest's knowledge of any such claim, (ii) tender to Corvis sole
control over the defense and settlement of such claim, and (iii) provide to
Corvis all reasonable assistance and cooperation requested by Corvis, at Corvis'
expense, in connection with the defense and settlement of such claim. Corvis'
indemnity obligations under this Section 19.2 shall be excused to the extent
Corvis has been prejudiced or its ability to defend the claim has been impaired
by Qwest's failure to comply with the undertaking in the immediately preceding
sentence. Qwest shall approve the terms of any settlement or compromise for
which Corvis does not have the financial capacity to satisfy, which approval
shall not be unreasonably withheld or delayed.
19.3 If any Product furnished under this Agreement becomes the subject of any
Infringement Claim, and as a result, Qwest's use is enjoined or in Corvis'
opinion is likely to be enjoined, Corvis, at its expense and option, either:
(a) secure for Qwest the right to continue using the Product;
(b) replace or modify the Product to make it non-infringing; provided,
however, that such modification or replacement shall not materially
degrade the operation or impair the performance of the Product, or
otherwise cause it to be not in accordance with the Technical
Requirements; or
(c) if (a) and (b) are not available on a commercially reasonable basis,
accept return of the Product and refund Qwest all amounts paid therefor,
including any prepaid maintenance and support fees. Any refund of amounts
paid for Product(s) Accepted more than twelve (12) months prior to the
commencement of the Infringement Claim or potential enjoinment shall be
reduced based on depreciation of the Product on straight line basis over a
five year period beginning from the Acceptance of the Product.
19.4 Corvis shall have no obligation or liability in respect of any
Infringement Claim based on the use of a Product to the extent that such claim
(i) is based on a use of a Product by or for
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Qwest in a manner or for a purpose inconsistent with this Agreement or the
Documentation; (ii) is based on a use of the Product by or for Qwest in
combination with non-Corvis products which were not furnished, or specified in
Corvis' Documentation or otherwise recommended, by Corvis; (iii) is based on a
modification of the Product other than by Corvis, not including Qwest's
configuration of user controlled features or options in accordance with the
Documentation; (iv) use of any software or other items furnished by Qwest to
Corvis for use under this Agreement; (v) arises from adherence to instructions
to apply Qwest's trademark, trade name or other company identification; or (vi)
arises from a third party product, including any Third Party Software, furnished
by Qwest to Corvis for use under this Agreement. To the extent permitted by its
agreements with the applicable manufacturer, Corvis hereby assigns to Qwest any
rights that Corvis may have to indemnity from the original manufacturer with
respect to any Vendor Item provided under this Agreement.
ARTICLE 20. TERMINATION.
20.1 In addition to the rights of termination provided elsewhere in this
Agreement:
(a) Either Party may terminate the Agreement if the other Party shall: (i)
file a voluntary petition under any bankruptcy or insolvency law, or file
a voluntary petition under the reorganization or arrangement provisions of
any law of any jurisdiction, or have proceedings under any such laws
instituted against it which are not terminated within thirty (30) days of
such commencement; (b) become insolvent, bankrupt, or admit in writing of
its inability to pay all debts as they mature or make a general assignment
for the benefit of or enter into any composition or arrangement with
creditors; or (c) authorize, apply for, or consent to the appointment of a
receiver, trustee, or liquidator of all or a substantial part of its
assets, or has proceedings seeking such appointment commenced against it
which are not terminated within thirty (30) days of such commencement;
(b) Either Party has the right to terminate this Agreement or an
individual Purchase Order if the other Party breaches or is in default of
any material obligation hereunder which default is incapable of cure or
which, being capable of cure, has not been cured within thirty (30)
calendar days after receipt of notice of such default (or such additional
cure period as the nondefaulting Party may authorize).
20.2 The license for Software set forth in Article 9 below shall survive the
expiration or early termination of this Agreement for any reason, except a
material, uncured breach by Qwest of Articles 9 or 12 with respect to such
Software.
20.3 Neither the expiration of this Agreement according to its terms nor its
termination under the provisions of Section 20.1 will prejudice any claim for
any outstanding amount owed Corvis
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and Qwest to each other, damages or any other rights or remedies that any Party
may have under this Agreement or at law or in equity or relieve any Party from
the duty to hold in confidence proprietary information and otherwise comply
with, and exercise the rights set forth in the Articles or Sections which in
order to achieve their fundamental purpose must survive such termination or
expiration, including without limitation 1.2, 1.4, 2.3, 3, 9 (except as
otherwise provided in Section 20.2), 11.1, 12, 13, 15, 16, 17, 18, 19, 20, 21,
22, 23, and 25 hereof, will survive such termination.
ARTICLE 21. DISPUTE RESOLUTION.
21.1 In the event of any dispute or claim arising under or in connection with
this Agreement, including a dispute regarding an alleged breach of this
Agreement, one Party shall notify the other Party in writing of the dispute (the
"Dispute"). The Parties shall work together in good faith first to informally
-------
resolve the Dispute internally by escalating it as necessary to progressively
higher levels of management. If the Parties cannot resolve the Dispute
internally, the parties may by agreement refer the matter to an appropriate form
of alternative dispute resolution such as mediation. If the parties cannot
resolve the matter or if they cannot agree upon an alternative form of dispute
resolution, then either Party may pursue resolution of the matter through
arbitration, which shall take place in Denver, Colorado, in accordance with the
rules of the American Arbitration Association (the "AAA") applying the
substantive law of the State of New York without regard to any conflict of laws
provisions. The arbitration will be conducted by a panel of three (3)
arbitrators selected in accordance with the rules of the AAA. Each arbitrator
will be an attorney familiar with telecommunications technology and the
telecommunications industry. The arbitration will be governed by the United
States Arbitration Act, 9, U.S.C. Section 1, et. seq. and judgment upon the
award rendered by the arbitrators may be entered by any court with jurisdiction.
The arbitrators are not empowered to award damages in excess of compensatory
damages, and each Party waives any damages in excess of compensatory damages.
21.2 Notwithstanding the foregoing, either Party may bring a claim for
injunctive relief as provided in Section 15.3 in any court of competent
jurisdiction without first submitting the claim to arbitration.
ARTICLE 22. NOTICE AND REPRESENTATIVES OF THE PARTIES.
In addition to those instances identified throughout this Agreement that require
notices to particular individuals via particular means for particular purposes,
all notices, requests, demands, or consents required or permitted hereunder,
other than routine operational communication, shall be in writing and shall be
delivered, sent by facsimile transmission or overnight courier, or sent by
certified or registered mail to the respective Party at the addresses set forth
below or at such other address as shall have been given to the other Party in
writing for the purposes of this
33
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Section and Agreement. Such notices and other communications shall be deemed
effective upon the earliest to occur of (i) actual delivery of confirmed
facsimile or electronic transmission; (ii) three (3) postal delivery days after
the date of mailing by certified or registered mail, return receipt requested,
postage prepaid; (iii) one (1) business day after dispatch via an express
courier with a reliable system for tracking delivery; (iv) actual delivery by
hand.
The notices provided for by this Article 22 will be given to the following:
If to Qwest:
Qwest Communications Corporation
555 17/th/ Street
Denver, Colorado 80202
Attention: Vice President, Procurement
With a copy to:
Qwest Communications Corporation
555 17/th/ Street
Denver, CO 80202
Attention: General Counsel
If to Corvis:
Corvis Corporation
ATTN: General Counsel
7015 Albert Einstein Drive
PO Box 9400
Columbia, Maryland 21046-9400
Telephone: 443.259.4110
With a copy to:
A Party may from time to time change its address for notification purposes by
giving the other Party prior written notice of the new address and the date upon
which it will become effective, in accordance with the manner set forth in this
Section.
ARTICLE 23. GENERAL
23.1 Assignment and Subcontractors. Neither Party to this Agreement may assign,
transfer, pledge, encumber or hypothecate its interest in this Agreement or any
of its rights hereunder or delegate its obligations hereunder without the prior
written consent of the other Party to this Agreement, which consent will not be
unreasonably withheld, and any attempted assignment
34
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which does not comply fully with this Section 23.1 will be null and void.
Notwithstanding the foregoing, (i) Qwest may assign or sublicense its rights and
obligations under Article 19 as provided in Section 9.4; and (ii) either Qwest
or Corvis may, upon prompt written notice, assign their respective rights and
obligations pursuant to this Agreement to any Affiliate, as appropriate, or to
their respective successors by consolidation or merger, or the transferee of
substantially all of the assets of either and in such event this Agreement will
be binding upon and inure to the benefit of each such successor or transferee.
Corvis shall have the right to subcontract for installation Services, provided
that Qwest approved the use of such subcontractors in advance, which approval
shall not be unreasonably withheld. Qwest shall have the right to require the
removal of a subcontractor that fails to cure any breach of this Agreement
within the cure period applicable to a Corvis breach.
23.2 Governing Law. This Agreement will be construed in accordance with and
governed by the law of the State of New York without regard to the conflict of
law provisions of such state or any other jurisdiction.
23.3 Laws and Regulations. The parties hereby agree to comply with all local,
municipal, state, federal, foreign, governmental and regulatory laws, orders,
codes, rules and regulations that are applicable to their respective performance
of this Agreement.
23.4 Amendment. No changes, amendments or modifications of any of the terms or
conditions of this Agreement shall be valid unless made by an instrument in
writing signed by both Parties. Additions to the Corvis Products in Price List
may be made by each Party signing a supplement to such Price List containing the
following information: Corvis Product, Equipment Description and Price.
23.5 Waiver. No delay, failure or waiver of either Party's exercise or partial
exercise of any right or remedy under this Agreement shall operate to limit,
impair, preclude, cancel, waive or otherwise affect such right or remedy.
23.6 Successors and Assigns. The provisions of this Agreement will be binding
upon and inure to the benefit of the Parties hereto and their respective
permitted successors and permitted assigns.
23.7 Public Disclosures. Neither Party shall, without the prior written
approval of the other Party, publicly disclose in any press release, filing,
brochure or document any information pertaining to this Agreement, or the
Products or any services to be performed pursuant to this Agreement, except to
the extent required by law. In addition, Qwest and Corvis will jointly develop,
and Corvis will issue, a mutually acceptable press release regarding this
Agreement.
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23.8 Severability. If any provision of this Agreement is held invalid, illegal
or unenforceable, the validity, legality or enforceability of the remaining
provisions shall in no way be affected or impaired thereby.
23.9 Construction/Headings. All Schedules and attachments, as supplemented and
amended, to this Agreement or to be attached to this Agreement are made a part
of it as if fully included in the text of this Agreement. References to any
law, legislative act, rule or regulation shall mean references to such law,
legislative act, rule or regulation in changed or supplemented form or to a
newly adopted law, legislative act, rule or regulation replacing a previous law,
legislative act, rule or regulation. All defined terms used in the Agreement
shall have the same meanings ascribed to them when used in the Schedules,
attachments and Purchase Orders, unless otherwise specified therein. The terms
"including" or "includes" shall always be construed as meaning respectively
"including without limitation" or "includes without limitation". The title,
captions and headings used in this Agreement are strictly for convenience of
reference only and shall not be used in the interpretation, construction,
amplification or limitation of any of the content of this Agreement. Whenever
the singular is used herein, the same shall include the plural where
appropriate, and when the plural is used herein, the same shall include the
singular where appropriate.
23.10 Counterparts. This Agreement may be executed by the Parties in one or
more counterparts, and each of which when so executed shall be an original, but
all such counterparts shall constitute one and the same instrument.
23.11 Relationship of Parties. The Parties are independent contractors.
Nothing in this Agreement or in the activities contemplated by the Parties
pursuant to this Agreement shall be deemed to create an agency, partnership,
employment or joint venture relationship between the Parties. Each Party shall
be deemed to be acting solely on its own behalf and, except as expressly stated,
has no authority to pledge the credit of, or incur obligations or perform any
acts or make any statements on behalf of, the other Party. Neither Party shall
represent to any person or permit any person to act upon the belief that it has
any such authority from the other Party. Neither Party's officers or employees,
agents or contractors shall be deemed officers, employees, agents or contractors
of the other Party for any purpose.
23.12 Supersession of PO. The terms of this Agreement shall prevail over all
preprinted forms, including Purchase Orders, software shrink wrap licenses and
invoices, as any terms and conditions on such preprinted forms shall be null and
void unless otherwise agreed to in writing by both Parties.
23.13 Qwest will comply with the export control laws and regulations of the
United States with respect to the Products purchased under this Agreement
36
<PAGE>
23.14 The Parties, who have both been represented by legal counsel, have
jointly participated in negotiating and drafting this Agreement, including its
Schedules and any attachments. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if jointly
drafted by the parties and no presumption, inference or burden of proof shall
arise favoring or disfavoring a Party by virtue of authorship of any or all of
the Agreement provisions.
23.15 Approvals. Wherever this Agreement requires either Party's approval,
consent or satisfaction, the response shall not be unreasonably or arbitrarily
withheld or delayed.
23.16 Immigration Reform and Control Act. Corvis warrants, represents,
covenants and agrees that it will not assign to perform any efforts under this
Agreement any individual who is an unauthorized alien under the Immigration
Reform and Control Act of 1986 or its implementing regulations. Corvis shall
indemnify and hold harmless Qwest, its parent, subsidiaries and affiliated
companies from and against any and all liabilities, damages, losses, claims or
expenses (including attorneys' fees) arising out of any breach by Corvis of this
section. In the event any Corvis personnel or contractor working under this
Agreement, or other individuals providing work to Qwest on behalf of Corvis
under this Agreement, are discovered to be unauthorized aliens, Corvis will
promptly remove such individuals from performing work under this Agreement and
replace such individuals with individuals who are not unauthorized aliens.
Corvis shall indemnify and hold harmless Qwest, its parent, subsidiaries and
affiliated companies from and against any and all liabilities, damages, losses,
claims or expenses (including attorneys' fees) arising out of any breach by
Corvis of this section.
23.17 Entire Agreement. This Agreement, together with any other instrument,
agreement or document attached or referred to, which are incorporated by this
reference as though set forth in full, embodies the final, full and exclusive
statement of the agreement between Qwest and Corvis, as it relates to the
design, engineering, supply, sale, maintenance or installation of transport and
transmission Products and Services by Corvis or its Affiliates occurring on or
after the Effective Date. Neither Party shall be bound by or liable to the
other Party for any representation, promise or inducement made by any agent or
person in their employ relating to subject matter which is not embodied in this
Agreement. Notwithstanding the foregoing, this Agreement shall not be deemed to
limit any duty, obligation, right or remedy either party may have under the
Bilateral Nondisclosure Agreement between Corvis and Qwest dated November 13,
1998.
ARTICLE 24. INCORPORATION OF DOCUMENTS.
This Agreement hereby incorporates by reference the Attachments referred to
herein. In the event of an inconsistency or conflict between or among the
provisions of this Agreement, the inconsistency will be resolved by giving
precedence in the following order:
(1) Agreement
37
<PAGE>
(2) Attachments
(3) Purchase Orders (excluding any preprinted terms and conditions)
ARTICLE 25. DEFINITIONS.
"Acceptance Period" is defined in Section 2.1.
"Affiliate" means (i) any individual, corporation, partnership, joint venture,
limited liability company, limited liability partnership, practice, association,
joint stock company, trust, unincorporated organization or other venture or
business vehicle (each an "Entity") in which a party owns ten percent (10%) or
greater equity interest in the case of a publicly or privately owned Entity;
(ii) any Entity which, directly or indirectly, is in control of, is controlled
by or is under common control with a party, as applicable, after applying the
attribution rules of Section 318 of the Internal Revenue Code; or (iii) any
other Entity mutually agreed to in writing by the parties. For the purposes of
this Agreement, control of an Entity ("Control") shall include the power,
directly or indirectly, whether or not exercised (i) to vote twenty percent
(20%) (or such lesser percentage as is the maximum allowed to be owned by a
foreign corporation in a particular jurisdiction) or more of the securities or
other interests having ordinary voting power for the election of directors or
other managing authority of such Entity; or (ii) to direct or cause the
direction of the management or policies of such Entity, whether through
ownership of voting securities, partnership interest or equity, by contract or
otherwise.
"Change Notification" is defined in Section 11.2
"Class A Change" means a modification, revision, replacement, correction or
release of existing Corvis manufactured Product to remedy a non-conformance to
Technical Requirements required to correct design defects of a type that results
in electrical or mechanical inoperative conditions or unsatisfactory operating
conditions, or which is recommended to enhance safety, provided that the Product
incorporating such change is at least as equally compatible with Qwest's
network components and other Corvis Products as the same Product prior to the
incorporation of such change.
"Class B Change" means an optional change, available to Qwest at an additional
cost, that provides Equipment enhancements resulting in new features or improved
service capabilities to Corvis Equipment, provided that the Product
incorporating such change is at least as equally compatible with Qwest's network
components and other Corvis Products as the same Product prior to the
incorporation of such change.
"Commitment Limitations" is defined in Section 1.4.
"Designated Equipment" is defined in Article 9.
38
<PAGE>
"Documentation" with respect to any Product means Corvis' technical
documentation and operating manuals for such Product.
"Effective Date" is defined in the Preamble.
"Equipment" or "Corvis Equipment" means the equipment that may be purchased from
Corvis pursuant to this Agreement.
"Form, Fit or Function" shall have the following meaning. "Form" means shape;
"Fit" means physical size or mounting arrangement (e.g., electrical or
mechanical connections); and
"Function" means features and capabilities.
"Initial Deployment Shortfall" is defined in Section 1.3.
"Initial Term" is defined in Section 4.
"Installation Site" means the building, complex of buildings or remote site at
which any of the Products are installed pursuant to this Agreement.
"Licensed Software" means the Corvis software and third party software, each of
which in machine-readable form, and subsequent Software upgrades, necessary to
install, operate, and maintain the Products purchased or licensed by Qwest
pursuant to this Agreement.
"Maintenance and Support Services" is defined in Section 16.
"Maintenance Period" means the Period for which Qwest has exercised its option
to have Maintenance performed, subject to Corvis right to discontinue providing
Maintenance for a Product after its Product Life.
"Net Price" means the final price paid by any Qwest after all sales discounts,
price reductions, sales rebates, volume discounts or similar adjustments of any
kind are applied, whether under the original contract of purchase or any
supplemental, separate, or complimentary transaction.
"Network Element" means a material component of Corvis' fiber optic transmission
system, including, but not limited to, optical amplifiers, optical routers,
optical add-drop multiplexers or end nodes at given sites or nodes in the
network.
"Nonconformity" means an instance of a material failure of a Product to be
Operative.
"OC-192 Product" mean the Product developed by Corvis complying with the
Technical Requirements.
39
<PAGE>
"Object Code" means machine-readable computer instructions that can be executed
by a computer.
"OC-192 Deadline Date" is defined in Section 1.2.
"Operative" means: (i) conforming in all material respects to the applicable
Technical Requirements; and (ii) the Product is fully compatible and inter-
operates with other Corvis Products provided under this Agreement to the extent
such Products are intended to be compatible and interoperable in accordance with
their applicable Technical Requirements.
"Product Life" for each Product is as set out in Attachment 2.3.
"Products" means Equipment and Software.
"Program Manager" means the senior manager of a Party who shall have overall
responsibility for the day-to-day management and administration of this
Agreement on behalf of such Party and who shall work together with the other
Party's Program Manager to facilitate an efficient delivery of Products and
Services.
"Proprietary Information" is defined in Section 12.1.
"Purchase Order" means the document issued by Qwest that identifies the Products
and specifies the scope of work, quantities and dates for delivery, billing
instructions, and any other necessary information.
"Rolling Forecast" is defined in Section 1.4.
"Services" means the services provided by Corvis to Qwest as specified in a
Purchase Order to the extent such Services are not included in the supply of
other Products. Services may include, but are not limited to, Maintenance,
design, engineering, installation and implementation of Products, testing,
warranty, technical support, training and similar activities.
"Software" refers to the Object Code, the Source Code (to the extent provided to
Qwest pursuant to this Agreement), computer languages, operations and Licensed
Software used to make Equipment perform a useful function or used to enable
human access to the Equipment for the purposes of installing, operating, or
maintaining such Equipment. Any Software license granted hereunder shall be
understood to extend to all associated intellectual property to the extent
needed to permit the licensee to use the Software in accordance with the license
terms.
"SONET" means a Synchronous Optical Network that adheres to the interface
standard of the same name created by the Exchange Carriers Standards Association
for the American National
40
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Standards Institute ("ANSI"), and promulgated by Bellcore on behalf of the
----
Regional Bell Operating Companies.
"Source Code" means the human-readable code from which a computer can compile or
assemble the Object Code of the Software (excluding Third Party Software),
together with a description of the procedure for generating the Object Code.
[*] means a combination of Products configured as a [*] transmission route not
exceeding [*] kilometers in length.
"Specified Site" means the installation or delivery site for the Products and
Services as specified in the Purchase Order.
"System" means a configuration of Equipment with two (2) end terminals, any
intermediate line amplifiers connected by fiber to the end terminals, all
associated Software, which has the ability to communicate to an element
management system such that traffic can be transmitted from end terminal to end
terminal and operation can be monitored by the element management system.
"Technical Requirements" means (i) the specifications set forth in appropriate
industry standard telecommunications technical requirements where applicable, or
as such specifications may be most currently modified or amended pursuant to
mutual agreement of the parties, (ii) in the case of the OC-192 Product, the
specifications set forth in Attachment 1.1, or the current version of such
specifications that are consistent with the Technical Requirements, or in the
case of other Products, the applicable specifications provided by Corvis for
such Product, and (iii) any other specifications that are mutually agreed upon
in writing by the parties.
"Third Party Software" means Software that is independently developed by a third
party, sub-licensed to Qwest under this Agreement or otherwise provided with the
Products hereunder and which was identified to Qwest on the Price List as being
owed by a third party.
"Turn-Over" means that a [*] is Operative and ready for operational use as part
of Qwest's network.
"Vendor Items" is defined in Section 13.1.
"Warranty Period" is defined in Section 13.1.
ARTICLE 26. ENTIRE AGREEMENT.
This Agreement together with all Exhibits and Attachments constitutes the
entire Agreement between Qwest and Corvis with respect to the subject matter
hereof and supersedes all prior agreements and understandings, both written and
oral, between the parties with respect
41
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to such subject matter, and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
42
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year below
written.
CORVIS CORPORATION QWEST COMMUNICATIONS
CORPORATION
BY: /s/ David R. Huber BY: /s/
TITLE: President and CEO TITLE: SVP
DATE: June 4, 2000 DATE: June 8, 2000
43
<PAGE>
LIST OF ATTACHMENTS
-------------------
Attachment 1.1 Specifications for Product
Attachment 1.2 Expected Test Results
Attachment 2.3 Licensed Software and Equipment
Attachment 2.6 Product Life
Attachment 4.2 Form of Qwest Affiliate Supplement
Attachment 6.3 Engineering, Installation and Other Services
Attachment 8.1 Maintenance, Training and Support Services
Attachment 9.1 Third Party Software Licenses
Attachment 9.6 Escrow Agreement
Attachment 13.1 Warranty Period
<PAGE>
ATTACHMENT 1.1
Specifications for Product
Corvis can transport up to [*] channels of [*] OC-192 at distances up to [*] of
fiber in a [*] configuration without regeneration for [*] with an average loss
of [*] dB in [*].
The fibers supported by this product will be
[*]
The exact performance of the system depends on the specific characteristics of
an individual link and the properties of the fiber in each [*] in the link.
Contingencies:
1) Corvis will not guarantee performance of any channels in fibers with
dispersion lower than [*]. [*] fibers have a [*] that is located near the
short wavelength end of the C-band. Similarly, [*] fibers have a [*] that
is located near the long wavelength end of the C-band. [*].
2) The above performance baseline is intended to reflect the performance of
the system over the known [*] statistics of the Qwest network with
reasonable operating margin. The table below reflects the performance
baseline for networks having [*] ranging from [*].
-----------------------------------------------
[*] [*]
-----------------------------------------------
[*] [*]
-----------------------------------------------
[*] [*]
-----------------------------------------------
[*] [*]
-----------------------------------------------
[*] [*]
-----------------------------------------------
[*] [*]
-----------------------------------------------
<PAGE>
ATTACHMENT 1.2
Expected Test Results
--------------------------------------------------------------------------------
Corvis Test-Plan Outline
--------------------------------------------------------------------------------
Test Outline Criteria
--------------------------------------------------------------------------------
Optical Parameter for a Bi-directional System
--------------------------------------------------------------------------------
- Optical transmitter performance
- Optical receiver performance [*]
- Long Term Bit Error Rate
- Gain Flatness and Profile
- Eye Mask
- Jitter (generation, transfer, tolerance)
--------------------------------------------------------------------------------
- Wavelength accuracy of [*] [*] pm
--------------------------------------------------------------------------------
- Optical Return Loss [*] dB
--------------------------------------------------------------------------------
- Span Optical Signal to Noise Ratio [*] dB
--------------------------------------------------------------------------------
- [*] Overhead [*] Pass/Fail
--------------------------------------------------------------------------------
Performance Monitoring Pass/Fail
- [*] and [*] registers
- Threshold Crossing Alarms
--------------------------------------------------------------------------------
Power Pass/Fail
- Verify correct input power alarms
--------------------------------------------------------------------------------
Local Craft Element Manager Pass/Fail
Pass/Fail
- Verify screen function properly Pass/Fail
<PAGE>
----------------------------------------------------
- Alarm
- Provisioning
--------------------------------------------------------------------------------
Demonstrate [*] interface capability Pass/Fail
--------------------------------------------------------------------------------
<PAGE>
ATTACHMENT 2.3
Licensed Software and Equipment
---------------------------------------------------------------
Item Version
---------------------------------------------------------------
SNMP (v1) (AdventNet) 2.0
---------------------------------------------------------------
Solstice Enterprise Manager 3.0
---------------------------------------------------------------
Solstice OSI 8.1.1 Comm. Platform 8.1.1
---------------------------------------------------------------
JRE/JVM 1.1.7b and 1.1.8
---------------------------------------------------------------
<PAGE>
ATTACHMENT 2.6
Product Life
The Product Life shall be [*] years.
<PAGE>
ATTACHMENT 4.2
Affiliate Confirmation Agreement
_________________________ ("Firm"), a corporation/partnership organized
under the laws of _____________________________ and an affiliate of Qwest
Communications Corporation ("Qwest"), hereby covenants and agrees with Qwest and
Corvis Corporation ("Corvis"), that it will comply with all obligations of Qwest
under the Procurement Agreement dated as of _________________ (the "Agreement"),
including all exhibits thereto and all other agreements referred to therein, as
fully as if Firm had executed the Agreement and shall be bound by all provisions
of the Agreement applicable to Qwest=s rights and responsibilities thereunder
with such changes thereto as are set forth below as mutually agreed to by Corvis
and the Firm and set forth in accordance with the terms hereof.
1. Capitalized terms used herein but not otherwise defined herein shall
have the meaning given to them in the Agreement.
[2. The Agreement shall be amended as set forth in the attachment to this
Agreement, which attachment has been executed by both Corvis and Firm. Firm
hereby represents that the following amendments to the Agreement are otherwise
acceptable to Corvis and Qwest: _______________________________.]
3. Notwithstanding any other provision of the Agreement, in no event
shall Firm or any other Affiliate be liable to Corvis or any other party for any
act or failure to act by any other Affiliate or any failure by such party to
fulfill the obligations imposed upon Firm pursuant to the terms of this
Affiliate Confirmation Agreement.
4. This Affiliate Confirmation Agreement shall be effective as of
________________. This Affiliate Confirmation Agreement shall terminate upon
the earlier of (i) the termination or expiration of the Agreement, or (ii) the
date at which Firm ceases to be an Affiliate of Qwest.
5. This Affiliate Confirmation Agreement shall be governed by and
construed in accordance with the laws of ___________.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Affiliate Confirmation
Agreement to be signed by the authorized representatives as of the date shown
above.
[Formal Name of FIRM] Corvis Corporation
By:_________________________ By:________________________
Printed Printed
Name:_______________________ Name:______________________
Title:_______________________ Title:_______________________
Qwest Communications Corporation
By:_________________________
Printed
Name:_______________________
Title:________________________
<PAGE>
ATTACHMENT 6.3
PROVISIONS APPLICABLE TO ENGINEERING, INSTALLATION, AND OTHER SERVICES
In addition to the other provisions of the Agreement, the provisions of this
Attachment 6.3 shall apply to the furnishing by Corvis of Services to Qwest.
--------------
Such services include, but are not limited to (i) engineering Services such as
preparation of equipment specifications, preparation and updating of office
records, and preparation of a summary of material not specifically itemized in
the order; (ii) installation Services such as installation, equipment removal,
and cable mining; (iii) equipment turn-up, and (iv) other Services such as
repairs.
ARTICLE 1. CONDITIONS OF SERVICES PERFORMED ON CUSTOMER'S SITE.
1.1 Items To Be Provided by Qwest. Qwest will be responsible for furnishing
-----------------------------
the following items (as required by the conditions of the particular
installation or other on-site Service) at no charge to Corvis and these items
are not included in Corvis' price for the Services. To the extent Corvis
requires any item or assistance from Qwest, including without limitation, data,
access, documentation, equipment or input of any kind from Qwest in order for
Corvis to perform the Services, Corvis shall notify Qwest if such item or
assistance is not forthcoming. Further, Corvis and Qwest acknowledge and agree
that if Qwest's ability to provide requested items is delayed, restricted or
prohibited by the landlord for the facility involved, Qwest shall remain
responsible for the timely provision of such items and such delay, restriction
or prohibition shall constitute an Adjustment Event (as defined below). Should
Corvis incur expense as a result of Qwest's failure to provide any of these
items, where Corvis provided notice of such failure, additional billing will be
rendered to and paid by Qwest for Corvis' reasonable and actual fees and
expenses.
(a) Access to Building and Work Site. Qwest will allow employees of
--------------------------------
Corvis and its subcontractors appropriate access to premises and facilities at
all reasonable hours during the scheduled Service or at such other times as are
reasonably requested by Corvis and approved by Qwest, such approval not to be
unreasonably withheld, delayed or denied. Qwest shall obtain for Corvis' and its
subcontractors' employees any necessary identification and clearance credentials
to enable Corvis and its subcontractors to have access to the work site.
(b) General Building Conditions. Qwest will take such action as may be
---------------------------
reasonably necessary to insure that the premises will be free from Hazardous
Materials (as defined below), including but not limited to asbestos, and in such
condition as not to be injurious to Corvis' or its subcontractors' employees or
to the Products to be installed. Prior to commencement of the Services and
during the performance of the Services, Qwest shall, if requested by Corvis,
provide Corvis with sufficient data to assist Corvis or its subcontractor in
evaluating the environmental conditions at the work site (including
<PAGE>
the presence of Hazardous Materials). The price quoted by Corvis for Services
does not include the cost of removal or disposal of the Hazardous Materials from
the work site. Qwest is responsible for removing and disposing of the Hazardous
Materials, including but not limited to asbestos, prior to commencement of
Services. The term "Hazardous Materials" means material designated as a
-------------------
"hazardous chemical substance or mixture" pursuant to Section 6 of the Toxic
Substance Control Act; a "hazardous material" as defined in the Hazardous
Materials Transportation Act (49 U.S.C. 1801, et seq.); "hazardous substance" as
defined in the Occupational Safety and Health Act Hazard Communication Standard
(29 CFR 1910.1200).
(c) Sensitive Equipment. Prior to Services start date, Qwest will inform
-------------------
Corvis of the presence of any sensitive equipment at the work site (e.g.,
equipment sensitive to static electricity or light).
(d) Repairs to Buildings. Prior to Services start date, Qwest will make
--------------------
such alterations and repairs as are necessary for proper installation of
Products.
(e) Openings in Buildings. Prior to Services start date, Qwest will
---------------------
furnish suitable openings in buildings to allow Products to be placed in
position, and provide necessary openings and ducts for cable and conductors in
floors and walls as designated on engineering drawings furnished by Corvis. At
least three (3) weeks prior to the Services start date, Corvis shall provide
such drawings to Qwest. Qwest will fireproof (with steel covers) all unopened
paths throughout the building.
(f) Surveys. Prior to Services start date, Qwest will furnish surveys
-------
(describing the physical characteristics, legal limitations, and utility
locations for the work site).
(g) Electrical Current, Heat, Light, and Water. Qwest will provide
------------------------------------------
electric current for charging storage batteries and for any other reasonable and
necessary purposes with suitable terminals where work is to be performed;
provide temperature control and general illumination (regular and emergency) in
rooms in which work is to be performed or Products stored, equivalent to that
ordinarily furnished for similar purposes in a working office; provide exit
lights; provide water and other necessary utilities for the proper execution of
Services.
(h) Building Evacuation. Prior to Services start date, Qwest will provide
-------------------
building evacuation plans in case of a fire or other emergency.
(i) Material Furnished by Qwest. Unless expressly stated to the contrary,
---------------------------
Corvis' prices do not include costs for any Qwest furnished material nor does it
include any Corvis charges for engineering, installation, modification, or
repair Services to Qwest furnished material. New or used material furnished by
Qwest shall be in such condition that it requires no repair and no adjustment or
test effort in excess of that normal for new equipment. Qwest assumes all
responsibility for the proper functioning of such material. Qwest shall also
provide the necessary information for Corvis to properly install such material.
<PAGE>
(j) Floor Space and Storage Facilities. Where the Services are to be
----------------------------------
performed outside of a building or in a building under construction, Qwest
shall, in addition to the above requirements, as appropriate, permit or secure
permission for Corvis and its subcontractors to maintain at the work site,
storage facilities (such as trailers) for Products, material, tools and
equipment needed to complete the Services.
(k) Easements, Permits and Rights of Way. Prior to Services start date,
------------------------------------
Qwest will provide all rights-of-way, easements, licenses to come upon land to
perform the Services; permits and authority for installation of Products and
other material; permits for opening sidewalks, streets, alleys, and highways;
and construction and building permits which are indicated by the Corvis
installation plans submitted to Qwest.
(l) Use of Available Testing Equipment. Qwest will make available to
----------------------------------
Corvis the maintenance test facilities that are embedded in equipment to which
the Product being installed will be connected or added. Corvis' use of such
test equipment shall not interfere with Qwest's normal equipment use or
maintenance functions (except as required for the particular Services or
provided in the MOP).
(m) Hazardous Materials Cleanup. At the conclusion of the Services, Qwest
---------------------------
will be responsible for the cleanup, removal, and proper disposal of all
Hazardous Materials present at Qwest's premises which were not brought onto such
premises by Corvis or caused by Corvis during the provision of the Services by
Corvis, other than the release of Hazardous Materials already on Qwest's
premises and not previously disclosed to Corvis.
(n) Access to Existing Facilities. Qwest will permit Corvis reasonable
-----------------------------
use of such portions of the existing plant or equipment as are necessary for the
proper completion of such tests as require coordination with existing
facilities. Such use will not unreasonably interfere with the Qwest's normal
use or maintenance of equipment (except as required for the particular Services
or provided in the MOP).
(O) GROUNDS. QWEST WILL PROVIDE ACCESS TO SUITABLE AND ISOLATED BUILDING
-------
GROUND AS REQUIRED FOR CORVIS' STANDARD GROUNDING OF EQUIPMENT. (P)
REQUIREMENTS FOR QWEST DESIGNED CIRCUITS. QWEST WILL FURNISH INFORMATION
----------------------------------------
COVERING THE PROPER TEST AND READJUST REQUIREMENTS FOR APPARATUS AND
REQUIREMENTS FOR CIRCUIT PERFORMANCE ASSOCIATED WITH CIRCUITS DESIGNED BY QWEST
OR STANDARD CIRCUITS MODIFIED BY QWEST'S DRAWINGS.
(Q) CLEARING EQUIPMENT FOR MODIFICATIONS. QWEST SHALL MAKE APPROPRIATE
------------------------------------
ARRANGEMENTS REQUIRED TO PERMIT CORVIS TO MODIFY EXISTING PLANT.
<PAGE>
(R) DESIGNATION STRIPS. QWEST SHALL NUMBER ALL JACK DESIGNATION STRIPS
------------------
DESCRIBED IN JOB REQUIREMENTS.
(S) FIRE PROTECTION APPARATUS. QWEST SHALL INSTALL THE PERMANENT FIRE
-------------------------
PROTECTION APPARATUS AND FURNISH SUCH TEMPORARY APPARATUS AS MAY BE NECESSARY
FOR THE PROTECTION OF THE PRODUCT AND OTHER EQUIPMENT STORED PRIOR TO
INSTALLATION.
(T) BATTERY ROOM VENTILATION. QWEST SHALL PROVIDE THE REQUIRED
------------------------
VENTILATION FOR BATTERY ROOMS OR AREAS.
(U) HOUSE SERVICE PANEL. QWEST SHALL PROVIDE ELECTRIC POWER FROM THE
-------------------
QWEST'S SERVICE PANEL TO THE CORVIS' POWER BOARD AND SHALL RUN ALL LEADS BETWEEN
SAID SERVICE PANEL AND POWER BOARD.
(V) THROUGH TESTS AND TRUNK TESTS - QWEST SHALL MAKE REQUIRED THROUGH
-----------------------------
AND/OR SYSTEM TESTS TO OTHER OFFICES AFTER CORVIS PROVIDES ITS NOTICE OF
COMPLETION OR NOTICE OF ADVANCED TURNOVER.
1.2 ITEMS TO BE PROVIDED BY CORVIS. THE FOLLOWING ITEMS WILL BE FURNISHED BY
------------------------------
CORVIS (IF REQUIRED BY THE CONDITIONS OF THE PARTICULAR SERVICES) AND THE PRICE
THEREOF IS INCLUDED IN CORVIS' PRICE FOR SERVICES:
(A) PROTECTION OF EQUIPMENT AND BUILDINGS. CORVIS SHALL PROVIDE
-------------------------------------
PROTECTION FOR QWEST'S EQUIPMENT AND BUILDINGS DURING THE PERFORMANCE OF THE
SERVICES IN ACCORDANCE WITH CORVIS' STANDARD PRACTICES, BUT IN ANY EVENT USING
NOT LESS THAN REASONABLE CARE.
(B) METHOD OF PROCEDURE. CORVIS SHALL PREPARE A DETAILED METHOD OF
-------------------
PROCEDURE ("MOP") BEFORE STARTING WORK ON LIVE EQUIPMENT. QWEST SHALL REVIEW
THE MOP AND ANY REQUESTED CHANGES SHALL BE NEGOTIATED. QWEST SHALL GIVE CORVIS
WRITTEN ACCEPTANCE OF THE FINAL MOP PRIOR TO START OF THIS WORK.
(C) POWER CIRCUIT. CORVIS SHALL INSTALL POWER CONDUIT AND WIRE AS
-------------
DESCRIBED IN QWEST'S JOB REQUIREMENTS.
(D) FRAME AND AISLE LIGHTING. CORVIS SHALL INSTALL CONDUIT, WIRE,
------------------------
FIXTURES AND OTHER NECESSARY MATERIAL FOR FRAME AND AISLE LIGHTING AS DESCRIBED
IN QWEST'S JOB REQUIREMENTS.
(E) LIMITED DISRUPTION. THE PARTIES WILL MUTUALLY AGREE ON A SCHEDULE FOR
------------------
INSTALLATION. CORVIS SHALL NOT CAUSE A DISRUPTION TO QWEST OPERATIONS DURING
THE INSTALLATION
<PAGE>
PROCESS. CORVIS SHALL PROVIDE AT LEAST FIVE (5) DAYS ADVANCE WRITTEN NOTICE TO
QWEST OF A NECESSARY DISRUPTION, SUCH NOTICE CONTAINING A REASONABLE DESCRIPTION
OF SAID DISRUPTION TO ASSIST QWEST'S EFFORTS TO EFFECT A REASONABLE, RELIABLE
AND ECONOMICAL SUBSTITUTE FOR THE DISRUPTED OPERATIONS.
1.3 ITEMS TO BE PROVIDED BY CORVIS AT QWEST'S REQUEST. THE FOLLOWING ITEMS
-------------------------------------------------
MAY BE FURNISHED BY CORVIS IF REQUESTED BY QWEST, BUT QWEST WILL BE BILLED AND
SHALL PAY FOR THEM IN ADDITION TO CORVIS' STANDARD OR FIRM QUOTED PRICE FOR
SERVICES.
(A) PROTECTION OF BUILDINGS AND EQUIPMENT. CORVIS MAY PROVIDE PROTECTION
-------------------------------------
OF BUILDINGS AND EQUIPMENT IN ACCORDANCE WITH SPECIAL PRACTICES OF QWEST
DIFFERING FROM CORVIS' STANDARD PRACTICES.
(B) READJUSTING APPARATUS. CORVIS MAY PROVIDE READJUSTMENT (IN EXCESS OF
---------------------
THAT NORMALLY REQUIRED ON NEW APPARATUS) OF APPARATUS ASSOCIATED WITH RELOCATED
OR REWIRED CIRCUITS.
(C) HANDLING, PACKING, TRANSPORTATION AND DISPOSITION OF REMOVED AND
----------------------------------------------------------------
SURPLUS QWEST EQUIPMENT. CORVIS MAY PACK, TRANSPORT, AND DISPOSE OF SURPLUS AND
-----------------------
REMOVED QWEST EQUIPMENT AS AGREED BY THE PARTIES.
(D) PREMIUM TIME ALLOWANCES AND NIGHT SHIFT BONUSES. CORVIS MAY HAVE ITS
-----------------------------------------------
SERVICES PERSONNEL WORK PREMIUM TIME AND NIGHT SHIFTS TO THE EXTENT THAT CORVIS
MAY DEEM SUCH TO BE NECESSARY TO EFFECT THE REQUIRED COORDINATION OF INSTALLING
AND TESTING OPERATIONS OR OTHER SERVICES BECAUSE OF QWEST'S REQUIREMENTS. ANY
ADDITIONAL COST FOR PREMIUM TIME AND NIGHT SHIFTS MUST BE APPROVED IN ADVANCE BY
QWEST.
(E) EMERGENCY LIGHTING SYSTEM. CORVIS MAY PROVIDE NEW EMERGENCY LIGHTING
-------------------------
SYSTEM (OTHER THAN THE ORIGINAL CEILING MOUNTED STUMBLE LIGHTING) TO SATISFY
ILLUMINATION AND SAFETY NEEDS OF PRODUCTS OF CERTAIN HEIGHTS.
ARTICLE 3. CUSTOMER RESPONSIBILITIES; CUSTOMER DELAYS.
Qwest shall: (a) provide Corvis, in a timely fashion, with all information
reasonably required for the performance of the Services by Corvis hereunder; (b)
cooperate reasonably with Corvis in the providing of the Services; (c) provide
adequate resources in accordance with this Agreement; (d) timely participate in
meetings and make its personnel readily available for such meetings; (e) assign
personnel with relevant training and experience to work with Corvis' personnel
as part of each project team; and (f) where Services are to be performed by
Corvis, Qwest shall be responsible for insuring that the premises where the work
is to be performed are accessible to Corvis and ready and
<PAGE>
suitable for the Services to be performed in accordance with Corvis' site-
preparation conditions. Corvis' representative shall have the right to inspect
the site prior to Services start date. Should Qwest fail to comply with the
site-preparation within three days after Corvis provides Qwest notice, Corvis
may perform such work or furnish such items and charge Qwest for them in
addition to the prices otherwise charged by Corvis for such Services. In
addition, Qwest shall, at no charge to Corvis, provide Corvis with such
electrical and environmental conditions, technical information, data, technical
support or assistance as may reasonably be required by Corvis to fulfill its
obligations under this Agreement, any subordinate agreement or order. To the
extent Corvis requires any item or assistance from Qwest, including without
limitation, data, access, information, documentation, equipment or input of any
kind from Qwest in order for Corvis to perform the Services, Corvis shall notify
Qwest if such item or assistance is not forthcoming. Absent such notice to
Qwest, all such items or assistance actually provided to Corvis shall be
presumed to have been timely provided. If Qwest delays or fails to provide the
required conditions, technical information, data, support or assistance, Corvis
shall be discharged from any such obligation. If such delay or failure by Qwest
lasts for thirty (30) days or more, Corvis shall be entitled to terminate the
affected Purchase Order by giving written notice to Qwest, such termination to
be effective on the date indicated in said notice.
ARTICLE 4. WORK OR SERVICES PERFORMED BY OTHERS.
Qwest is responsible for ensuring that any work or services performed at the
site by Qwest or its other vendors or contractors shall not interfere with
Corvis' performance of Services. Corvis agrees to reasonably cooperate and not
interfere with the performance of services by Qwest or its other vendors and
contractors. Corvis shall have no responsibility or liability with respect to
such work or services performed by others. If Qwest or its other vendors or
contractors fail to timely complete the site readiness or if Qwest's or its
other vendors' or contractors' work interferes with Corvis' performance, and
Corvis notifies Qwest of such failures or interference, the scheduled completion
date of Corvis' Services under this Agreement shall be extended as necessary to
compensate for such delay or interference.
ARTICLE 5. CHANGES TO SERVICES.
5.1 Changes to the scope of Services must be made in writing and signed by both
parties, and Corvis will have no obligation to commence work in connection with
any changes until the fee and/or other impact(s) of the change is agreed to by
the parties in writing. Additional resources required by Corvis to provide
Services set forth in the Change Order and will be charged to Qwest at Corvis'
then standard rates as described in the Change Order.
5.2 The parties acknowledge and agree that if (a) there is a material change to
information which Qwest has supplied to Corvis, (b) Qwest fails in any material
respect to perform any of its responsibilities under this Agreement and does not
cure such failure within in sufficient time for Corvis to perform its
responsibilities in accordance with its
<PAGE>
work schedule, (c) an unanticipated event occurs that materially affects Qwest's
service needs or requirements or the manner in which Qwest requires Corvis to
provide the Services, (d) Qwest directs Corvis to provide services in an order
of priority that could reasonably be expected to have an adverse impact on the
planned provision of the Services, (e) there is a defect in any third party
hardware, software or other product or not provided by Corvis, or (f) a force
majeure event occurs (each, an "Adjustment Event"), Corvis will inform Qwest as
to its estimates of the impact of the Adjustment Event on the fees, expenses,
schedule and/or other material provisions of this Agreement. In such event, the
parties shall seek to establish mutually agreeable alternative arrangements and
to make any appropriate adjustments to their respective obligations under this
Agreement, including the fees and expenses payable to Corvis, if any, through
the execution of a Change Order, as described below. Subject to the foregoing,
nothing contained in this paragraph shall serve to reduce the parties rights
under Article 7 of the Agreement.
5.3 In addition to the impact on the fees, expenses, schedule and/or other
material provisions of this Agreement, as applicable, caused by circumstances
constituting an Adjustment Event, Qwest may from time to time during the term of
this Agreement request Corvis to implement an addition, deletion or other change
to the Services (each, a "Change").
5.4 Change Orders. Upon the occurrence of an Adjustment Event or receipt of a
written request for a Change, Corvis shall provide Qwest with a proposed change
order (each, a "Proposed Change Order") which shall include: (i) a written
description of the changes to the Services that Corvis anticipates in connection
with such Adjustment Event or Change; (ii) the impact of such change on the
overall schedule for completing the Services; (iii) the impact to the fee for
the Services; (iv) when appropriate, a description of any additional personnel
and other resources required of Qwest to permit Corvis to perform the Services
if such change is made; and (v) any modification of any provisions herein.
A Proposed Change Order shall become a "Change Order" when the parties have
agreed upon the content of the Proposed Change Order and each of them has
executed a copy of the Proposed Change Order. Change Orders may be executed in
counterparts, and may be amended only through an additional Change Order. Each
Change Order shall be deemed an amendment to this Agreement or Change Order, as
applicable. Proposed Change Orders shall have no effect whatsoever. Corvis shall
not be liable for any delays resulting from Qwest's rejection of, or delay in
approving, a Proposed Change Order relating to an Adjustment Event or Change.
Corvis may from time to time identify events, conditions or circumstances that
it considers to be an Adjustment Event or Change and may require that the
parties enter into a Change Order before proceeding with the Services.
<PAGE>
ATTACHMENT 8.1
The following is the warranty repair service provided by Corvis:
Repair and Return - Basic
Corvis will supply replacement components for Products that have failed.
The customer is responsible for first calling Corvis Customer Repair and getting
a Return Material Authorization number. The customer is responsible for sending
the faulty component to the Corvis designated location along with the assigned
RMA# for that module/component. Qwest is responsible for packing material,
shipping enclosure and all necessary documentation to facilitate the return of
the defective component to Corvis. Requests for Basic Repair and Return on
replacement module/components received by Corvis by 3:00 p.m. Eastern Time will
be generally processed and sent back to customer within 5 days of receiving the
faulty module/component. Requests made after 3:00 p.m. Eastern Time or on
weekends or Corvis holidays will be processed the next business day.
Corvis will provide a description of its maintenance, training and support
services for the OC-192 Product when Corvis provides Qwest with the pricing for
such Product.
<PAGE>
ATTACHMENT 9.1
Third Party Software Licenses
---------------------------------------------------------------
Item Version
---------------------------------------------------------------
SNMP (v1) (AdventNet) 2.0
---------------------------------------------------------------
Solstice Enterprise Manager 3.0
---------------------------------------------------------------
Solstice OSI 8.1.1 Comm. Platform 8.1.1
---------------------------------------------------------------
JRE/JVM 1.1.7b and 1.1.8
---------------------------------------------------------------
<PAGE>
ATTACHMENT 9.6
Escrow Agreement
Account Number ______________________
This Agreement is effective _________________, 2000 ("Effective Date") among
Fort Knox Escrow Service, Inc. ("Escrow Agent"), Corvis Corporation
("Depositor") and Qwest Communications Corporation ("Preferred Beneficiary"),
who collectively may be referred to in this Agreement as "the parties."
A. Depositor and Preferred Beneficiary have entered into a Procurement
Agreement dated ________________, 2000 regarding certain proprietary technology
of Depositor (referred to in this Agreement as the "Procurement Agreement").
B. Depositor desires to avoid disclosure of its proprietary technology except
under certain limited circumstances.
C. The availability of the proprietary technology of Depositor is critical to
Preferred Beneficiary in the conduct of its business and, therefore, Preferred
Beneficiary needs access to the proprietary technology under certain limited
circumstances.
D. Depositor and Preferred Beneficiary desire to establish an escrow with
Escrow Agent to provide for the retention, administration and controlled access
of the proprietary technology materials of Depositor.
E. The parties desire this Agreement to be supplementary to the Procurement
Agreement pursuant to 11 United States Bankruptcy Code, Section 365(n).
ARTICLE 1 -- DEPOSITS
1.1 Obligation to Make Deposit. Within thirty (30) days following successful
--------------------------
completion of the Field Trial (as defined in the Procurement Agreement),
Depositor will deliver to Escrow Agent the proprietary technology and other
materials ("Deposit Materials") identified on Exhibit A attached hereto.
Exhibit A will be prepared and signed by Depositor and Preferred Beneficiary.
Escrow Agent will have no obligation with respect to the preparation, signing or
delivery of Exhibit A.
1.2 Identification of Tangible Media. Prior to the delivery of the Deposit
--------------------------------
Materials to Escrow Agent, Depositor will conspicuously label for identification
each document, magnetic tape, disk, or other tangible media upon which the
Deposit Materials are written
<PAGE>
or stored. Additionally, Depositor will complete Exhibit B to this Agreement by
listing each such tangible media by the item label description, the type of
media and the quantity. The Exhibit B must be signed by Depositor and delivered
to Escrow Agent with the Deposit Materials. Unless and until Depositor makes the
initial deposit with Escrow Agent, Escrow Agent will have no obligation with
respect to this Agreement, except the obligation to notify the parties regarding
the status of the deposit account as required in Section 2.2 below.
1.3 Deposit Inspection. When Escrow Agent receives the Deposit Materials and
------------------
the Exhibit B, Escrow Agent will conduct a deposit inspection by visually
matching the labeling of the tangible media containing the Deposit Materials to
the item descriptions and quantity listed on the Exhibit B. In addition to the
deposit inspection, Preferred Beneficiary may elect to cause a verification of
the Deposit Materials in accordance with Section 1.6 below.
1.4 Acceptance of Deposit. At completion of the deposit inspection, if Escrow
---------------------
Agent determines that the labeling of the tangible media matches the item
descriptions and quantity on Exhibit B, Escrow Agent will date and sign the
Exhibit B and mail a copy thereof to Depositor and Preferred Beneficiary. If
Escrow Agent determines that the labeling does not match the item descriptions
or quantity on the Exhibit B, Escrow Agent will (a) note the discrepancies in
writing on the Exhibit B; (b) date and sign the Exhibit B with the exceptions
noted; and (c) mail a copy of the Exhibit B to Depositor and Preferred
Beneficiary. Escrow Agent's acceptance of the deposit occurs upon the signing
of the Exhibit B by Escrow Agent. Delivery of the signed Exhibit B to Preferred
Beneficiary is Preferred Beneficiary's notice that the Deposit Materials have
been received and accepted by Escrow Agent. If Escrow Agent notes a
discrepancy, Depositor shall promptly act to correct such discrepancy and have
Escrow Agent issue a revised Exhibit B which contains no exceptions.
1.5 Depositor's Representations. Depositor represents as follows:
---------------------------
a. Depositor lawfully possesses all of the Deposit Materials deposited
with Escrow Agent;
b. With respect to all of the Deposit Materials, Depositor has the right
and authority to grant to Escrow Agent and Preferred Beneficiary the
rights as provided in this Agreement;
c. The Deposit Materials are not subject to any lien or other
encumbrance;
d. The Deposit Materials consist of the proprietary technology and other
materials identified in Exhibit A; and
<PAGE>
e. The Deposit Materials are readable and useable in their current form
or, if the Deposit Materials are encrypted, the decryption tools and
decryption keys have also been deposited.
1.6 Verification. Preferred Beneficiary will have the right, at Preferred
------------
Beneficiary's expense, to cause a verification of any Deposit Materials. A
verification determines, in different levels of detail, the accuracy,
completeness, sufficiency and quality of the Deposit Materials. If a
verification is elected after the Deposit Materials have been delivered to
Escrow Agent, then only Escrow Agent, or at Escrow Agent's election an
independent person or company selected and supervised by Escrow Agent, may
perform the verification.
1.7 Deposit Updates. Unless otherwise provided by the Procurement Agreement,
---------------
Depositor will update the Deposit Materials within 60 days after each release of
a new version of the product that is subject to the Procurement Agreement. Such
updates will be added to the existing deposit. All deposit updates will be
listed on a new Exhibit B and each new Exhibit B will be signed by Depositor and
Escrow Agent and delivered to Preferred Beneficiary. Each Exhibit B will be
held and maintained separately within the escrow account. An independent record
will be created which will document the activity for each Exhibit B. The
processing of all deposit updates will be in accordance with Sections 1.2
through 1.6 above. All references in this Agreement to the Deposit Materials
will include the initial Deposit Materials and any updates.
1.8 Removal of Deposit Materials. The Deposit Materials may be removed and/or
----------------------------
exchanged only on written instructions signed by Depositor and Preferred
Beneficiary, or as otherwise provided in this Agreement.
ARTICLE 2 -- CONFIDENTIALITY AND RECORD KEEPING
2.1 Confidentiality. Escrow Agent will maintain the Deposit Materials in a
---------------
secure, environmentally safe, locked facility which is accessible only to
authorized representatives of Escrow Agent. Escrow Agent will have the
obligation to reasonably protect the confidentiality of the Deposit Materials.
Except as provided in this Agreement, Escrow Agent will not disclose, transfer,
make available, or use the Deposit Materials. Escrow Agent will not disclose the
content of this Agreement to any third party. If Escrow Agent receives a
subpoena or other order of a court or other judicial tribunal pertaining to the
disclosure or release of the Deposit Materials, Escrow Agent will immediately
notify the parties to this Agreement. It will be the responsibility of
Depositor and/or Preferred Beneficiary to challenge any such order, provided,
however, that Escrow Agent does not waive its rights to present its position
with respect to any such order. Escrow Agent will not be required to disobey any
court or other judicial tribunal order. (See Section 7.5 below for notices of
requested orders.) Notwithstanding the foregoing, in the event that Escrow
Agent receives any subpoena or order initiated by a party and which is not
issued pursuant to the procedure detailed in Section 7.3, Escrow
<PAGE>
Agent will not comply with such order without first notifying the parties and
permitting the Depositor the opportunity to challenge such order or to seek to
have such order narrowed in a manner acceptable to the Depositor, as owner of
the proprietary information embodied on the Deposit Materials.
2.2 Status Reports. Escrow Agent will issue to Depositor and Preferred
--------------
Beneficiary a report profiling the account history at least semi-annually.
Escrow Agent may provide copies of the account history pertaining to this
Agreement upon the request of any party to this Agreement.
2.3 Audit Rights. During the term of this Agreement, Depositor and Preferred
------------
Beneficiary will each have the right to inspect the written records of Escrow
Agent pertaining to this Agreement. Any inspection will be held during normal
business hours and following reasonable prior notice.
ARTICLE 3 -- GRANT OF RIGHTS TO ESCROW AGENT
3.1 Title to Media. Depositor hereby transfers to Escrow Agent the title to
--------------
the media upon which the proprietary technology and materials are written or
stored. However, this transfer does not include the ownership of the
proprietary technology and materials contained on the media including any
copyright, trade secret, patent or other intellectual property rights. Title to
all such intellectual property will at all times remain vested in Depositor.
3.2 Right to Make Copies. Escrow Agent will have the right to make copies of
--------------------
the Deposit Materials as reasonably necessary to perform its obligations under
this Agreement. Escrow Agent will copy all copyright, nondisclosure, and other
proprietary notices and titles contained on the Deposit Materials onto any
copies made by Escrow Agent. With all Deposit Materials submitted to Escrow
Agent, Depositor will provide any and all instructions as may be necessary to
duplicate the Deposit Materials including but not limited to the hardware and/or
software needed.
3.3 Right to Transfer Upon Release. Depositor hereby grants to Escrow Agent a
------------------------------
non-exclusive, non-transferable, perpetual and royalty-free license to
sublicense the Deposit Materials to Preferred Beneficiary upon any release of
the Deposit Materials for use by Preferred Beneficiary in accordance with
Section 4.5. Except upon such a release or as otherwise provided in this
Agreement, Escrow Agent will not sublicense or otherwise transfer the Deposit
Materials or permit Preferred Beneficiary to make use of the Deposit Materials.
It is expressly understood and agreed that Escrow Agent is not authorized to
enter into any sublicense or similar agreement with Preferred Beneficiary that
alters the terms of this Section 3.3. In case of any conflict between the
provisions of this Section 3.3 (or Section 4.5) and the provisions of the
Procurement Agreement relating to the scope of the Preferred Beneficiary's
license upon release from escrow, the provisions of the Procurement Agreement
will control.
<PAGE>
ARTICLE 4 -- RELEASE OF DEPOSIT
4.1 Release Conditions. As used in this Agreement, "Release Condition" will
------------------
mean the following:
a. Depositor is in material breach of its support obligations, as
described in the Maintenance and Support Services Agreement entered
into pursuant to Article 16 of the Procurement Agreement or any other
support obligations under the Procurement Agreement, that is not cured
within the cure periods provided in the Procurement Agreement; or
b. Either party 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 such party which
is not dismissed within sixty (60) days after the date such petition
is filed, 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
4.2 Request for Release. If Preferred Beneficiary believes in good faith that
-------------------
a release condition has occurred, Preferred Beneficiary may provide Escrow Agent
written notice that a Release Condition and a request for release of the Deposit
Materials. The request will include instructions to Escrow Agent for
accomplishing the release, and a description in full detail of the release
condition that Preferred Beneficiary believes occurred. Escrow Agent will
immediately send the notice to Depositor by overnight carrier.
4.3 Release by Escrow Agent. Escrow Agent will 10 days after Depositor's
-----------------------
receipt of the notice of request for release, release the Deposit Materials to
Preferred Beneficiary pursuant to the instructions included in the request for
release, unless Depositor disputes that a release condition has occurred and
demands that Escrow Agent submit a notice of dispute to the American Arbitration
Association as provided for in Section 7.3. Subject to section 5.2, Escrow
Agent will continue to store the Deposit Materials without release pending (a)
joint instructions from Depositor and Preferred Beneficiary; (b) resolution
pursuant to the Dispute Resolution provisions or (c) order of a court.
4.4 Release of Deposit. If Escrow Agent does not receive notice that Depositor
------------------
disputes the condition of release and demand for submission to arbitration then
Escrow Agent is authorized to release the Deposit materials to the Preferred
Beneficiary or if more than one beneficiary is registered to the deposit, to
release a copy of the Deposit Materials to the Preferred Beneficiary. However,
Escrow Agent is entitled to receive any fees due Escrow Agent before making the
release. Any copying expense in excess of $300 will be chargeable to the
Preferred Beneficiary. This Agreement will terminate upon the release of the
Deposit Materials held by Escrow Agent. In the event that
<PAGE>
Escrow Agent does receive notice that Depositor disputes the release condition
and demands arbitration and subsequently receives (a) joint instructions from
Depositor and Preferred Beneficiary; (b) resolution pursuant to the Dispute
Resolution provisions; or (c) order of a court, Escrow Agent will release a copy
of the Deposit Materials to the Preferred Beneficiary in accordance with such
joint instructions from Depositor and Preferred Beneficiary; resolution pursuant
to the Dispute Resolution provisions; or court order. The provisions of the
second, third and fourth sentences of this Section 4.4 will apply to any such
release.
4.5 Right to Use Following Release. Unless otherwise provided in the
------------------------------
Procurement Agreement, upon release of the Deposit Materials in accordance with
this Article 4, Preferred Beneficiary will have the non-exclusive, non-
transferable, right to use the Deposit Materials for the sole purpose of
continuing the benefits afforded to Preferred Beneficiary by the Procurement
Agreement. Preferred Beneficiary will be obligated to maintain the strict
confidentiality of the released Deposit Materials, including maintaining such
Deposit Materials in a single, access restricted, and locked location.
Preferred Beneficiary will provide access to the released Deposit Materials to
only those of its personnel who require such access for supporting Qwest's use
of the Products sold or licensed to Qwest under the Procurement Agreement and
Qwest will maintain a written list of such personnel. Without limiting the
foregoing, the Deposit Materials will also be protected as Corvis' Proprietary
Materials under Article 15 of the Procurement Agreement. Receipt by Preferred
Beneficiary of the Deposit Materials pursuant to this Article 4 does not in any
way convey title or ownership of the Depositor products or the intellectual
property rights embodied in the products. Preferred Beneficiary may subcontract
to third parties maintenance and support work permitted under this Section 4.5;
provided all such third parties enter into a written agreement containing terms
equivalent to those contained in the Procurement Agreement regarding Depositor's
confidential information and preservation of Depositor's proprietary rights.
Preferred Beneficiary will upon request of Corvis, provide to Corvis signed
copies of all such agreements to Depositor before providing any such party with
access to the Depositor.
4.6 Preferred Beneficiary will place all Deposit Materials (including all
copies and extracts thereof) in another escrow under terms similar to this
Agreement if and when Preferred Beneficiary determines, in its sole and absolute
discretion, that Depositor is able and willing to resume performance of its
support obligations, as described in the Maintenance and Support Services and
Other Services pursuant to Article 19 of the Procurement Agreement.
ARTICLE 5 -- TERM AND TERMINATION
5.1 Term of Agreement. The initial term of this Agreement is for a period of
-----------------
one year. Thereafter, this Agreement will automatically renew from year-to-year
unless (a) Depositor and Preferred Beneficiary jointly instruct Escrow Agent in
writing that the Agreement is terminated; or (b) the Agreement is terminated by
Escrow Agent for
<PAGE>
nonpayment in accordance with Section 5.2. If the Deposit Materials are subject
to another escrow agreement with Escrow Agent, Escrow Agent reserves the right
upon written notice to Depositor and Preferred Beneficiary, after the initial
one year term, to adjust the anniversary date of this Agreement to match the
then prevailing anniversary date of such other escrow arrangements.
5.2 Termination for Nonpayment. In the event of the nonpayment of fees owed to
--------------------------
Escrow Agent, Escrow Agent will provide written notice of delinquency to all
parties to this Agreement. Any party to this Agreement will have the right to
make the payment to Escrow Agent to cure the default. If the past due payment
is not received in full by Escrow Agent within one month of the date of such
notice, then Escrow Agent will have the right to terminate this Agreement at any
time thereafter by sending written notice of termination to all parties. Escrow
Agent will have no obligation to take any action under this Agreement so long as
any payment due to Escrow Agent remains unpaid.
5.3 Disposition of Deposit Materials Upon Termination. Upon termination of this
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Agreement, Escrow Agent will destroy, return, or otherwise deliver the Deposit
Materials in accordance with Depositor's instructions. If there are no
instructions, Escrow Agent may, at its sole discretion, destroy the Deposit
Materials or return them to Depositor. Escrow Agent will have no obligation to
return or destroy the Deposit Materials if the Deposit Materials are subject to
another escrow agreement with Escrow Agent.
5.4 Survival of Terms Following Termination. Upon termination of this
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Agreement, the following provisions of this Agreement will survive:
a. Depositor's Representations (Section 1.5);
b. The obligations of Escrow Agent and Preferred Beneficiary to maintain
confidentiality with respect to the Deposit Materials;
c. The rights granted in the sections entitled Right to Transfer Upon
Release (Section 3.3) and Right to Use Following Release (Section
4.5), if a release of the Deposit Materials has been made using the
procedure described in Article 4 prior to termination;
d. The obligation to pay Escrow Agent any fees and expenses due; and
e. The provisions of Sections 7.1 and 7.2.
ARTICLE 6 -- ESCROW'S FEES
6.1 Fee Schedule. Escrow Agent is entitled to be paid its standard fees and
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expenses applicable to the services provided. Said fees shall be paid by
Depositor. Escrow Agent will notify Depositor for payment of Escrow Agent's
fees at least 90 days prior to any
<PAGE>
increase in fees. For any service not listed on Escrow Agent 's standard fee
schedule, Escrow Agent will provide a quote prior to rendering the service, if
requested.
6.2 Payment Terms. Escrow Agent will not be required to perform any service
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unless the payment for such service and any outstanding balances owed to Escrow
Agent are paid in full. Fees are due upon receipt of a signed contract or
receipt of the Deposit Materials whichever is earliest. If invoiced fees are
not paid, Escrow Agent may terminate this Agreement in accordance with Section
5.2. Late fees on past due amounts will accrue interest at the rate of one and
one-half percent per month (18% per annum) from the date of the invoice.
ARTICLE 7 -- LIABILITY AND DISPUTES
7.1 Right to Rely on Instructions. Escrow Agent may act in reliance upon any
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instruction, instrument, or signature reasonably believed by Escrow Agent to be
genuine. Escrow Agent may assume that any employee of a party to this Agreement
who gives any written notice, request, or instruction has the authority to do
so. Escrow Agent will not be responsible for failure to act as a result of
causes beyond the reasonable control of Escrow Agent.
7.2 Indemnification. Escrow Agent will be responsible to perform its
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obligations under this Agreement and to act in a reasonable and prudent manner
with regard to this escrow arrangement. Provided Escrow Agent has acted in the
manner stated in the preceding sentence, Depositor and Preferred Beneficiary
each agree to indemnify, defend and hold harmless Escrow Agent from any and all
claims, actions, damages, arbitration fees and expenses, costs, attorney's fees
and other liabilities incurred by Escrow Agent relating in any way to this
escrow arrangement. In no event shall any party be responsible for any special,
consequential, incidental or indirect losses suffered by any other party.
7.3 Dispute Resolution. (a) Any dispute relating to or arising from this
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Agreement will be resolved by arbitration under the Commercial Arbitration Rules
of the American Arbitration Association. Unless otherwise agreed by Depositor
and Preferred Beneficiary, arbitration will take place in Boston, Massachusetts,
U.S.A. Depositor and Preferred Beneficiary will submit any dispute relating to
the release of Deposit Materials to the jurisdiction of a board of arbitrators
(the "Board") sitting in Boston, Massachusetts for resolution and will so notify
Escrow Agent. The Board will be selected within thirty (30) days from the date
of the filing of the notice of a dispute by Escrow Agent under Section 4.3 (or
other location or time mutually agreeable to Depositor and Preferred
Beneficiary). The Board will comprise three (3) members, one selected by
Depositor, one selected by Preferred Beneficiary and the third chosen by the two
members so selected, or if they cannot agree, by the American Arbitration
Association. The sole question before the Board will be whether or not
Depositor or Preferred Beneficiary is entitled to have the Deposit Materials
released from escrow. The Board will have no authority to order a modification
or amendment of this Agreement or the Procurement
<PAGE>
Agreement. The decision of the Board will be forthwith delivered to Escrow
Agent, Depositor and Preferred Beneficiary, will be final and binding on
Depositor and Preferred Beneficiary, and judgment thereon may be entered in any
court of competent jurisdiction. Service of a petition to confirm the
arbitration award may be made by First Class mail or by commercial express mail,
to the attorney for the party or, if unrepresented, to the party at the last
known business address. The dispute resolution procedures outlined above may be
followed for any other dispute arising out of this Agreement, but the timetables
established above will be adjusted by agreement of the effected parties to
account for the event that triggers the desire of any party to seek arbitration.
The limitations on the authority of the Board enumerated above will apply to any
arbitration pursued under this Agreement.
(b) All fees charged by the Board will be paid by the nonprevailing party
to the arbitration. Each of Depositor and Preferred Beneficiary, however, will
be responsible for payment of all fees and expenses connected with the
presentation of its respective case, except that the Board may award such
reasonable fees and expenses of presentation, including counsel fees, to the
prevailing party in the event that the Board determines that the contentions of
the nonprevailing party were made in bad faith or without reasonable
justification.
7.4 Controlling Law. This Agreement is to be governed and construed in
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accordance with the laws of the State of New York, without regard to its
conflict of law provisions.
7.5 Notice of Requested Order. If any party intends to obtain an order from
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the arbitrator or any court of competent jurisdiction that may direct Escrow
Agent to take, or refrain from taking any action, that party will:
a. Give Escrow Agent at least two business days' prior notice of the
hearing;
b. Include in any such order that, as a precondition to Escrow Agent's
obligation, Escrow Agent be paid in full for any past due fees and be
paid for the reasonable value of the services to be rendered pursuant
to such order; and
c. Ensure that Escrow Agent not be required to deliver the original (as
opposed to a copy) of the Deposit Materials if Escrow Agent may need
to retain the original in its possession to fulfill any of its other
duties.
ARTICLE 8 -- GENERAL PROVISIONS
8.1 Entire Agreement. This Agreement, which includes the Exhibits described
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herein, embodies the entire understanding among the parties with respect to its
subject matter and supersedes all previous communications, representations or
understandings, either oral or written. Escrow Agent is not a party to the
Procurement Agreement between Depositor and Preferred Beneficiary and has no
knowledge of any of the terms or provisions of any
<PAGE>
such Procurement Agreement. Escrow Agent's only obligations to Depositor or
Preferred Beneficiary are as set forth in this Agreement. No amendment or
modification of this Agreement will be valid or binding unless signed by all the
parties hereto, except that Exhibit A need not be signed by Escrow Agent,
Exhibit B need not be signed by Preferred Beneficiary and Exhibit C need not be
signed.
8.2 Notices. All notices, invoices, payments, deposits and other documents and
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communications will be given to the parties at the addresses specified in the
attached Exhibit C. It will be the responsibility of the parties to notify each
other as provided in this Section in the event of a change of address. The
parties will have the right to rely on the last known address of the other
parties. Unless otherwise provided in this Agreement, all documents and
communications may be delivered by First Class mail.
8.3 Severability. In the event any provision of this Agreement is found to be
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invalid, voidable or unenforceable, the parties agree that unless it materially
affects the entire intent and purpose of this Agreement, such invalidity,
voidability or unenforceability will affect neither the validity of this
Agreement nor the remaining provisions herein, and the provision in question
will be deemed to be replaced with a valid and enforceable provision most
closely reflecting the intent and purpose of the original provision.
8.4 Successors. This Agreement will be binding upon and will inure to the
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benefit of the successors and assigns of the parties. However, Escrow Agent
will have no obligation in performing this Agreement to recognize any successor
or assign of Depositor or Preferred Beneficiary unless Escrow Agent receives
clear, authoritative and conclusive written evidence of the change of parties.
8.5 Regulations. Depositor and Preferred Beneficiary are responsible for and
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warrant compliance with all applicable laws, rules and regulations, including
but not limited to customs laws, import, export, and re-export laws and
government regulations of any country from or to which the Deposit Materials may
be delivered in accordance with the provisions of this Agreement.
8.6 Conflict of Interest. Escrow Agent will not pay any commissions, fees or
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rebates of significant value to any employees of Depositor or Preferred
Beneficiary, nor favor any employee of Depositor or Preferred Beneficiary with
gifts or entertainment of significant value. If Depositor or Preferred
Beneficiary has reasonable cause to believe that this provision has been
violated, Escrow Agent agrees to cooperate with Depositor or Preferred
Beneficiary in its investigation.
_____________ Qwest Communications Corporation
Depositor Preferred Beneficiary
By: _________________________________ By: _________________________________
<PAGE>
Name:_______________________________ Name:_______________________________
Title:________________________________ Title:________________________________
Date:________________________________ Date:________________________________
___________________________________
By:________________________________
Name:______________________________
Title:_____________________________
Date: _____________________________
<PAGE>
ATTACHMENT 13.1
Warranty Period
The Warranty Period shall be [*] years.
