<PAGE>
Exhibit 10.28
***PORTIONS OF THIS EXHIBIT MARKED BY BRACKETS ("[***]") OR OTHERWISE
INDICATED HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***
LNM980716RMPT
GENERAL AGREEMENT
BETWEEN
PAETEC COMMUNICATIONS, INC.
---------------------------
AND
LUCENT TECHNOLOGIES INC.
*** CONFIDENTIAL TREATMENT REQUESTED ***
<PAGE>
LNM980716RMPT
TABLE OF CONTENTS
GENERAL AGREEMENT
<TABLE>
<CAPTION>
Section Page
------- ----
<S> <C>
1. ARTICLE I GENERAL TERMS AND CONDITIONS...................................................... 1
1.1 DEFINITIONS:................................................................................ 1
1.2 TERM OF AGREEMENT:.......................................................................... 3
1.3 SCOPE:...................................................................................... 3
1.4 CUSTOMER RESPONSIBILITY:.................................................................... 4
1.5 ORDERS:..................................................................................... 4
1.6 CHANGES IN CUSTOMER'S ORDERS:............................................................... 5
1.7 CHANGES IN PRODUCTS:........................................................................ 5
1.8 PRICES:..................................................................................... 5
1.9 INVOICES AND TERMS OF PAYMENT:.............................................................. 6
1.10 PURCHASE MONEY SECURITY INTEREST:........................................................... 7
1.11 TAXES:...................................................................................... 8
1.12 TRANSPORTATION AND PACKING:................................................................. 8
1.13 TITLE AND RISK OF LOSS:..................................................................... 8
1.14 WARRANTY:................................................................................... 8
1.15 INFRINGEMENT:............................................................................... 10
1.16 CUSTOMER'S REMEDIES:........................................................................ 12
1.17 USE OF INFORMATION:......................................................................... 12
1.18 DOCUMENTATION:.............................................................................. 13
1.19 NOTICES:.................................................................................... 13
1.20 FORCE MAJEURE:.............................................................................. 14
1.21 ASSIGNMENT:................................................................................. 14
1.22 TERMINATION OF AGREEMENT FOR BREACH:........................................................ 14
1.23 ARBITRATION:................................................................................ 15
1.24 NON-SOLICITATION:........................................................................... 15
1.25 INDEPENDENT CONTRACTOR:..................................................................... 15
1.26 RELEASES VOID:.............................................................................. 15
1.27 PUBLICITY:.................................................................................. 15
1.28 CONFIDENTIALITY OF AGREEMENT:............................................................... 15
1.29 AMENDMENTS:................................................................................. 16
1.30 SEVERABILITY:............................................................................... 16
1.31 WAIVER:..................................................................................... 16
1.32 SURVIVAL:................................................................................... 16
1.33 SECTION HEADINGS:........................................................................... 16
1.34 CHOICE OF LAW:.............................................................................. 16
1.35 AMBIGUITIES:................................................................................ 16
2................................................................................................. 17
2. ARTICLE II PROVISIONS APPLICABLE TO LICENSED MATERIALS...................................... 17
2.1 LICENSE FOR LICENSED MATERIALS:............................................................. 17
2.2 CHANGES IN LICENSED MATERIALS:.............................................................. 17
2.3 CANCELLATION OF LICENSE:.................................................................... 17
2.4 OPTIONAL SOFTWARE FEATURES:................................................................. 18
2.5 ADDITIONAL RIGHTS IN LICENSED MATERIALS:.................................................... 18
2.6 INSTALLATION OF SOFTWARE:................................................................... 18
2.7 SOFTWARE ACCEPTANCE:........................................................................ 18
2.8 MODIFICATIONS BY CUSTOMER TO USER CONTROLLED MODULES:....................................... 19
2.9 ADDITIONAL SOFTWARE RIGHTS FOR 5ESS(R) SWITCH LICENSED MATERIALS............................ 19
3................................................................................................. 21
3. ARTICLE III PROVISIONS APPLICABLE TO ENGINEERING, INSTALLATION AND OTHER SERVICES........... 21
3.1 SITE REQUIREMENTS:.......................................................................... 21
3.2 ADDITIONAL ITEMS TO BE PROVIDED BY CUSTOMER:................................................ 22
3.3 ITEMS TO BE FURNISHED BY SELLER............................................................. 25
3.3.1 ENGINEERING:................................................................................ 25
3.3.2 INSTALLATION:............................................................................... 25
3.4 ACCEPTANCE.................................................................................. 28
</TABLE>
*** CONFIDENTIAL TREATMENT REQUESTED ***
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LNM980716RMPT
<TABLE>
<S> <C>
3.5 WORK OR SERVICES PERFORMED BY OTHERS:....................................................... 28
4................................................................................................. 29
4. ARTICLE IV ENTIRE AGREEMENT:................................................................ 29
4.1 ENTIRE AGREEMENT............................................................................ 29
</TABLE>
*** CONFIDENTIAL TREATMENT REQUESTED ***
<PAGE>
LNM980716RMPT
This General Agreement Number LNM980617RMPT (hereinafter "General Agreement" or
"Agreement") is made effective as of the 17/th/ day of June, 1998 ("Effective
Date") by and between PaeTec Communications, Inc., a Delaware corporation, with
offices located at 290 Woodcliff Drive, Fairport, NY 14450 (hereinafter
"Customer"), and Lucent Technologies Inc., a Delaware corporation, acting
through its Global Service Provider Group, with offices located at 600 Mountain
Avenue, Murray Hill, New Jersey 07974 (hereinafter "Seller").
WHEREAS, Seller desires to supply to Customer and Customer desires to procure
from Seller the products and services described herein, pursuant to the terms
and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises herein contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties intending to be lawfully bound agree as
follows:
1. ARTICLE I
GENERAL TERMS AND CONDITIONS
1.1 DEFINITIONS:
For the purpose of this Agreement, the following definitions will apply:
(a) "Affiliate" of a corporation means its parent company, its Subsidiaries,
and any other Subsidiaries of such company or its parent company.
(b) "Bill and Hold Products" means Products, Licensed Materials, and/or parts
thereof, which the Customer requests and Seller agrees to inventory or
warehouse, at a price mutually agreed to by the parties, until final
delivery to the Customer.
(c) "Customer Price List" means Seller's published "Ordering and Price Guides"
or other price notification releases furnished by Seller for the purpose of
communicating Seller's prices or pricing related information to Customer;
however, this does not include firm price quotations.
(d) "Cutover" means the verification by Seller and Customer of actual usage
over the installed Products. This function occurs after Turnover and is
not performed by Seller unless specifically requested by Customer and is
usually covered under a separate Professional Services Agreement.
(e) "Delivery Date" means the date required under this Agreement by which all
deliverables ordered by Customer are to be delivered to the destination
specified in the order.
(f) "Designated Processor" means the Product for which licenses to Use Licensed
Materials are granted.
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(g) "Firmware" means a combination of (1) hardware and (2) Software represented
by a pattern of bits contained in such Hardware.
(h) "Fit" means physical size or mounting arrangement (e.g., electrical or
mechanical connections).
(i) "Form means physical shape.
(j) "Function" means the operation the Product performs.
(k) "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) or as defined in the Comprehensive Governmental
Response, Compensation and Liability Act, 42 U.S.C. 9601 (14), or other
pollutant or contaminant.
(l) "Installation Complete Date" means the date on which OS Software or
transmission systems Software is installed by Seller at the location
specified in the order and determined by Seller to be ready for Use by
Customer.
(m) "Licensed Materials" means the Software and Related Documentation for which
licenses are granted by Seller under this Agreement; no Source Code
versions of Software are included in Licensed Materials.
(n) "OS Software" means the object code Software, for operations systems,
embodied in any medium, including firmware.
(o) "Product" means equipment hardware, and parts thereof, but the term does
not mean Software whether or not such Software is part of Firmware.
(p) "Related Documentation" means materials useful in connection with Software
such as, but not limited to, flowcharts, logic diagrams and listings,
program descriptions and Specifications.
(q) "Services" means any engineering, installation or repair services to be
performed by Seller under this Agreement, but the term "Services" does not
include any services provided by the Professional Services Division of
Seller's Network Systems Group unless otherwise expressly agreed to in
writing by the parties.
(r) "Software" means a computer program consisting of a set of logical
instructions and tables of information that guide the functioning of a
processor. Such program may be contained in any medium whatsoever,
including hardware containing a pattern of bits, representing such program.
However, the term "Software" does not mean or include such medium.
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(s) "Source Code" means any version of Software incorporating high-level or
assembly language that generally is not directly executable by a processor.
(t) "Specifications" means Seller's or its vendor's technical specifications
for particular Products or Software furnished hereunder.
(u) "Statement of Work" (SOW) means the detailed description of the actual
Services to be performed which includes the expected completion dates of
such Services as shown in Exhibit 1.
(v) "Subsidiary" means any corporation in which Customer owns more than fifty
percent (50%) of the eligible voting stock; such corporation shall be
deemed to be a Subsidiary of such Customer only as long as such ownership
or control exists.
(w) "Turnover" means, with respect to Products and Software to be installed by
Seller, the point at which Seller has completed the installation and
notifies Customer that the installation is completed and that Seller has
confirmed that the installed Product and/or Software comply with Seller's
Specifications. This term does not mean Cutover which is separately
defined herein.
(x) "Use," with respect to Licensed Materials means loading the Licensed
Materials, or any portion thereof, into a Designated Processor for
execution of the instructions and tables contained in such Licensed
Materials.
1.2 TERM OF AGREEMENT:
The term of this Agreement shall commence on the Effective Date and shall
continue in effect thereafter for a period of five (5) years ("Term").
1.3 SCOPE:
(a) The terms and conditions of this Agreement shall apply to all transactions
occurring during the Term whereby Products, Licensed Materials or Services are
provided by Seller's Global Service Providers Group (formerly Network Systems
Group) to Customer. Except as expressly stated in this Agreement, this Agreement
shall not apply to any products, licensed materials or services offered for
supply by any other group (e.g. Microelectronics, Business Communications
Systems) within Lucent. By placing orders with Seller, including change and/or
addition orders, or using any Products, Licensed Materials, or Services provided
hereunder, Customer agrees to be bound to the terms of this Agreement. Customer
understands and agrees that all Products, Licensed Materials, or Services
furnished by Seller to Customer pursuant to this Agreement shall be for
Customer's own internal use in the United States only. Products, Licensed
Materials or Services furnished under this Agreement are not being supplied for
resale and shall not be resold by Customer.
(b) All firm price quotes made by Seller to Customer shall incorporate the
terms and conditions of this Agreement. Any conflicting terms and conditions of
a firm price quote, signed
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by an authorized representative of Seller and Customer and dated after the
effective date of this Agreement, will supersede the comparable terms of this
Agreement.
1.4 CUSTOMER RESPONSIBILITY:
Customer shall, at no charge to Seller, provide Seller with such technical
information, data, technical support or assistance as may reasonably be required
by Seller to fulfill its obligations under this Agreement, any subordinate
agreement or order. If Customer fails to provide the technical information,
data, support or assistance, Seller shall be discharged from any such
obligation.
1.5 ORDERS:
(a) All orders submitted by Customer for Products, Licensed Materials, and
Services shall incorporate and be subject to the terms and conditions of this
Agreement. Any order submitted pursuant to a firm price quotation shall include
such firm price quotation number. All orders, including electronic orders, shall
contain the information as detailed below:
(i) Complete and correct ship to and bill to address;
(ii) The quantity and type of Products, Licensed Materials, and Services
being ordered;
(iii) The price;
(iv) The requested Delivery Date in accordance with Seller's standard
interval for the Products, Licensed Materials, and Services being
ordered. In the event a non standard interval has been mutually
agreed to by the parties, reference to the specific document
agreeing to the interval needs to be included;
(v) The requested completion date in accordance with Seller's standard
interval for the Products, Licensed Materials, and Services being
ordered;
(vi) Reference to this Agreement;
(vii) If an order is for Bill and Hold Products, the phrase "Bill and
Hold" must be clearly and conspicuously stated in the order.
The requested Delivery Date of any order must be in accordance with
Seller's published standard order intervals in effect on the date of receipt of
order by Seller. Seller reserves the right to change such standard order
intervals without notification to Customer but only with respect to future
orders. Such change shall not affect orders accepted by Seller prior to the
change to the standard order intervals. Electronic orders with a value of [***]
dollars ($[***]) or less shall be binding on Customer notwithstanding the
absence of a signature. Electronic orders placed by Customer with a value
greater than [***] dollars ($[***]) shall be processed based upon a mutually
agreed upon process prior to the placement of such orders. All orders are
subject to acceptance by Seller. Seller reserves the right to place any order on
hold, delay shipment, and/or reject any order due to, but not limited to the
breach or default by Customer of its obligations under this Agreement or
Customer's insufficient credit limits. Terms and conditions on Customer's
purchase order which are inconsistent with the provisions of this Agreement and
any pre-printed terms and conditions on Customer's purchase order shall be
ineffective, void and of no force and effect. Orders shall be sent to the
following address:
***CONFIDENTIAL TREATMENT REQUESTED***
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LNM980716RMPT
Lucent Technologies Inc.
Customer Service
6701 Roswell Road
Building D - 3rd Floor
Atlanta, GA 30328-2501
(b) If an order is for Bill and Hold Products, the phrase "Bill and Hold" must
clearly and conspicuously appear on the order. In the event Customer orders Bill
and Hold Products, Seller will defer final shipment of such Product(s) until the
final ship date indicated on the purchase order or such final ship date as is
mutually agreed between the parties provided that in no event shall Seller be
obligated to hold Bill and Hold Products longer than one (1) year from the date
of the applicable purchase order. Customer agrees to pay to Seller a monthly
stocking fee for any Bill and Hold Products held beyond the final ship date
indicated on the purchase order or otherwise mutually agreed to date.
1.6 CHANGES IN CUSTOMER'S ORDERS:
Changes by Customer to an order which has been previously accepted by
Seller (a "Change Order") are subject to acceptance by Seller. Change Orders
shall be treated as a separate order and shall follow Seller's change order
process. In the event Seller accepts a Change Order and such change affects
Seller's ability to meet its obligations under the original order, any price (or
discount, if applicable), shipment date or Services completion date quoted by
Seller with respect to such original order is subject to change. Seller will
provide to Customer written quotations and expected completion dates for any
requested Change Orders.
1.7 CHANGES IN PRODUCTS:
Prior to shipment, Seller may at any time make changes in Products. Seller
may modify the Product(s) drawings and Specifications or substitute Products of
later design. Seller agrees that such modifications or substitutions will not
impact upon Form, Fit, or Function under normal and proper use of the ordered
Product as provided in Seller's Specifications. With respect to changes,
modifications, and substitutions that do impact the Form, Fit, or Function of
the ordered Product, Seller shall notify Customer in writing thirty (30) days
prior to the date the changes become effective. In the event the Customer
objects to the change, Customer shall notify Seller within thirty (30) days from
the date of notice. Upon receipt of notice, Seller shall not furnish modified
Products to Customer on any orders in process.
1.8 PRICES:
(a) To the extent Customer's order is subject to a firm price quotation made by
Seller, prices, fees and charges (hereinafter "Prices") shall be as set forth in
Seller's firm price quotation.
(b) Except as expressly stated in this Agreement, in all other cases Prices
shall be those contained in Seller's Customer Price Lists. The applicable
Customer Price List shall be the issue that is in effect on the date of Seller's
receipt of the order. The requested Delivery Date of such order must be in
accordance with Seller's published shipping or planning interval or thirty (30)
days from the date of order receipt, whichever is longer. Prices for Products
and license fees for
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Licensed Materials to be shipped, or Services to be performed beyond the
published shipping interval will be based upon the date required for order entry
by Seller in accordance with Customer's requested date and applying the Price
from the Customer Price List as of that date.
(c) Seller may amend its Prices, other than those subject to firm price
quotations and, except when applicable Prices are adjusted for changes in raw
material prices, Seller agrees to provide thirty (30) days written notice of any
increase in Prices contained in Seller's Customer Price Lists. When Prices
contained in Seller's Customer Price Lists are adjusted for changes in raw
material prices, Seller's new Prices will be revised effective the first day of
any given month. The basis for raw material adjustments will be provided to
Customer upon request.
1.9 INVOICES AND TERMS OF PAYMENT:
(a) Payment for Products, Licensed Materials and Services (including
transportation charges and taxes, if applicable) will be due in accordance with
the payment schedule described below. Upon acceptance of the purchase order and
initial payment required below, Seller will commence the order fulfillment
process. Seller shall notify Customer when the Products and/or Licensed
Materials are ready for shipment. Upon such notification, Customer shall arrange
the electronic transfer of funds for the second payment in accordance with
subsection (c) below. Upon receipt of the second scheduled payment, Seller will
release the shipment for delivery to Customer. Seller will provide Customer a
"record only" invoice after receipt of the second payment. Such invoice will
reflect the amount due and payments received through the date of the invoice. If
Seller is responsible for installation, the final payment will be invoiced upon
Turnover or as soon thereafter as practical. For furnish only orders the final
payment will be invoiced upon shipment or as soon as practical thereafter. In
either case the payment is due for receipt by Seller within thirty (30) days of
the date of the invoice.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Payment Milestone Schedule Percent of Total Amount of Purchase
Order Due
----------------------------------------------------------------------------------------------
<S> <C>
To Accompany Purchase Order (Initial [***]%
Payment)
----------------------------------------------------------------------------------------------
Prior to Shipment of Products (Second [***]%
Payment)
----------------------------------------------------------------------------------------------
Due to Seller within thirty (30) days of date of [***]%
invoice (Final Payment)
----------------------------------------------------------------------------------------------
</TABLE>
(b) For Products, Licensed Materials and Services (including transportation
charges and taxes, if applicable) that are not required to be paid in advance,
Seller will invoice Customer, all amounts due for Products and Licensed
Materials upon shipment and all amounts due for Services, upon completion of
Services or, in either event, as soon as practical thereafter. Customer shall
pay such invoiced amounts for receipt by Lucent within thirty (30) days of the
invoice date. Bill and Hold Products will be invoiced by Seller upon the earlier
of (i) completion of assembly at Seller's facility or (ii) upon stocking at
Customer's designated location. Such invoice will serve as Seller's notification
that Bill and Hold Products are complete and ready to be released by Customer
for final shipment. A sample invoice is provided in Exhibit 2 for informational
purposes only.
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(c) Customer shall pay all amounts due Seller hereunder using Electronic Funds
Transfer ("EFT") whether amounts have been invoiced by Seller or are due as
advance payments. EFT payments by Customer shall be made to the following
account of Seller or such other account as is subsequently designated by Seller
in writing and, concurrent with the EFT payment, Customer shall fax a copy of
the remittal to Seller's Manager Cash Operations at 770-750-4288.
Chase Manhattan Bank
New York, New York
Account Name: Lucent Technologies Inc.
ACCT. 910144-9099
ABA 021000021
(d) If Customer fails to pay any invoiced amount when due, the invoiced amount
will be subject to a late payment charge at the rate of [***] percent ([***])
per month, or portion thereof, of the amount due (but not to exceed the
maximum lawful rate). Customer agrees to pay Seller's reasonable attorneys'
fees and other reasonable and necessary costs incurred by Seller in the
collection of any amounts invoiced hereunder.
(e) Customer agrees to review all invoices furnished by Seller hereunder upon
receipt and, notify Seller of any billing discrepancies within fifteen (15) days
of receipt of the applicable invoice. Such inquiries can be directed to Seller
in writing or by telephone. Inquiries shall be made to the telephone number or,
if in writing, to the address identified on the invoice.
1.10 PURCHASE MONEY SECURITY INTEREST:
(a) Seller reserves and Customer agrees that Seller shall have a purchase money
security interest in all Products and Licensed Materials heretofore supplied or
hereafter supplied to Customer by Seller under this Agreement until any and all
payments and charges due Seller under this Agreement including, without
limitation, shipping and installation charges, are paid in full. Seller shall
have the right, at any time during the Term and without notice to Customer, to
file in any state or local jurisdiction such financing statements (e.g., UCC-1
financing statements) as Seller deems necessary to perfect its purchase money
security interest hereunder. Upon request by Seller, Customer hereby agrees to
execute all documents necessary to secure Seller's purchase money security
interest including without limitation, UCC-1 or such other documents Seller
deems reasonably necessary. Notwithstanding the foregoing obligation of Customer
to execute, Customer hereby irrevocably appoints Seller as its attorney-in-fact
solely for purposes of executing and filing such financing statements and such
other documents prepared by Seller or its designated agent for purposes of
perfecting Seller's security interest hereunder. Customer also agrees that this
Agreement may be filed by Seller in any state or local jurisdiction as a
financing statement (or as other evidence of the Seller's purchase money
security interest).
(b) In addition to any other remedy available to Seller as provided herein, by
common law and by statute, Seller may exercise its right to reclaim all Products
and Licensed Materials sold to Customer pursuant to UCC-702 or such other
applicable provision as it may exist from state to state, upon discovery of
Customer's insolvency, provided Seller demands in writing reclamation of such
goods before ten (10) days after receipt of such goods by Customer, or if such
ten (10)
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day period expires after the commencement of a bankruptcy case, before twenty
(20) days after receipt of such goods by the Customer.
1.11 TAXES:
Customer shall be liable for all taxes and related charges, however
designated, imposed upon or based upon the provision, sale, license or Use of
Products, Licensed Materials or Services levied upon the sale, excluding taxes
on Seller's net income, unless Customer provides Seller with a valid tax exempt
certificate. Seller's failure to collect taxes in accordance herewith shall not
be deemed to be an authorization to resell Products or Services or sublicense
Licensed Materials.
1.12 TRANSPORTATION AND PACKING:
Seller, in accordance with its normal practices, shall arrange for prepaid
transportation to destinations in the contiguous United States and shall invoice
transportation charges to Customer. Premium transportation will be used only at
Customer's request. Seller shall pack Products for delivery in the contiguous
United States, in accordance with its standard practices for domestic shipments.
Where, in order to meet Customer's requests, Seller packs Products in other than
its normal manner or for destinations outside the contiguous United States,
Customer shall pay the additional charges for such packing and transportation.
1.13 TITLE AND RISK OF LOSS:
Title to Products only and risk of loss to Products and Licensed Materials
shall pass to Customer upon delivery to the Customer. Title to all Licensed
Materials (whether or not part of Firmware) furnished by Seller, and all copies
thereof made by Customer, including translations, compilations and partial
copies are, and shall remain, the property of Seller. Title to Products only and
risk of loss for Products and Licensed Material for Bill and Hold Products shall
pass to Customer upon stocking at Seller's facility or Customer's designated
location, whichever occurs earlier. Customer shall notify Seller promptly of any
claim with respect to loss which occurs while Seller has the risk of loss and
shall cooperate in every reasonable way to facilitate the settlement of any
claim. For purposes of this section, "delivery" shall mean the point at which
Seller or Seller's supplier or agent turns over possession of the Product or
Licensed Materials to Customer, Customer's employee, Customer's designated
carrier, Customer's warehouse, or other Customer's agent and not necessarily the
final destination shown on the order.
1.14 WARRANTY:
(a) Seller warrants to Customer only, that during the applicable Warranty
Periods set forth below (i) Seller's manufactured Products (exclusive of
Software) will be free from defects in material and workmanship and will conform
to Seller's Specifications for such Products; (ii) Software developed by Seller
will be free from those defects which materially affect performance in
accordance with Seller's Specifications; and (iii) Services will be performed in
a workmanlike manner and in accordance with good usage and accepted practices in
the community in which Services are provided. With respect to Products or
Software or partial assembly of Products furnished by Seller but neither
manufactured by Seller nor purchased by Seller pursuant to its procurement
Specifications ("Vendor Items"), Seller, to the extent permitted, does hereby
assign to Customer the warranties given to Seller by its vendor(s) of such
Vendor Items.
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(b) For purposes of this Agreement the term "Warranty Period" means the period
of time listed below which, unless otherwise stated, commences on date of
shipment or, if installed by Seller the earliest of either: (i) acceptance by
Customer; or (ii) thirty (30) days from the date Seller submits its notice of
completion of its installation; or (iii) the date Customer first puts Products
and/or Licensed Materials into service. For Bill and Hold Products the warranty
will commence upon the date of stocking at Seller's facility or Customer's
designated location. The Warranty Period for any Product or Software (or part
thereof) repaired or replaced under this Section 1.14 is the period listed in
the right column below or the unexpired portion of the new Product Warranty
Period, whichever is longer.
<TABLE>
<CAPTION>
SELLER'S MANUFACTURED PRODUCTS AND SOFTWARE
WARRANTY PERIOD
---------------------------------------------------------------------------------------------------------
Base Repaired
---- --------
Period Product or
------ ----------
New Part
--- ----
Product
-------
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Switching Systems Products [***] [***]
---------------------------------------------------------------------------------------------------------
Central Office Power Equipment:
---------------------------------------------------------------------------------------------------------
Associated with Switching Systems [***] [***]
---------------------------------------------------------------------------------------------------------
Not Associated with Switching Systems [***] [***]
---------------------------------------------------------------------------------------------------------
Transmission Systems Products:
---------------------------------------------------------------------------------------------------------
DACS-IV 2000, [***] [***]
---------------------------------------------------------------------------------------------------------
FT-2000 OC-48 [***] [***]
---------------------------------------------------------------------------------------------------------
DDM-2000 OC-3/OC-12 [***] [***]
---------------------------------------------------------------------------------------------------------
DDM-2000 FIBER REACH [***] [***]
---------------------------------------------------------------------------------------------------------
SLC 2000 Access System [***] [***]
---------------------------------------------------------------------------------------------------------
SLC 2000 MSDT [***] [***]
---------------------------------------------------------------------------------------------------------
SLC Series 5 (System and Plug In) [***] [***]
---------------------------------------------------------------------------------------------------------
Other Transmission Products (i.e., DDM Plus [***] [***]
Repeater Cases)
---------------------------------------------------------------------------------------------------------
Network Cable Systems Products [***] [***]
---------------------------------------------------------------------------------------------------------
All Other Products [***] [***]
---------------------------------------------------------------------------------------------------------
Software:
---------------------------------------------------------------------------------------------------------
Switching System Software [***] [***]
---------------------------------------------------------------------------------------------------------
Transmission Systems Software [***] [***]
---------------------------------------------------------------------------------------------------------
Operations Systems Software [***] [***]
---------------------------------------------------------------------------------------------------------
All Other Software [***] [***]
---------------------------------------------------------------------------------------------------------
</TABLE>
(c) If, under normal and proper use, a defect or non-conformity appears in
Seller's manufactured Products or Software during the applicable Warranty
Period and Customer promptly notifies Seller in writing of such defect or non-
conformance and follows Seller's instructions regarding return of defective or
non-conforming Product or Software, Seller, at its option, will either repair,
replace or correct the same without charge at its manufacturing or repair
facility or provide a refund or credit based on the original
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purchase price or license fee. If engineering or installation Services prove not
to be performed as warranted within a [***] ([**]) [******] period commencing on
the date of completion of the Services, Seller, at its option, either will
correct the defect or non-conforming Services or render a full or pro-rated
refund or credit based on the original charges for the Services. No Product or
Software will be accepted for repair or replacement without the written
authorization of and in accordance with instructions of Seller. Removal and
reinstallation expenses as well as transportation expenses associated with
returning such Product or Software to Seller shall be borne by Customer. Seller
shall pay the costs of transportation of the repaired or replacing Product or
Software to any United States destination designated by Customer. If Seller
determines that returned Product or Software is not defective, Customer shall
pay Seller's costs of handling, inspecting, testing and transportation and, if
applicable, travel and related expenses. In repairing or replacing any Product,
part of Product, or Software medium under this warranty, Seller may use either
new, remanufactured, reconditioned, refurbished or functionally equivalent
Products or parts. Replaced Products or parts shall become Seller's property.
(d) With respect to Seller's manufactured Products which Seller has
ascertained are not readily returnable for repair, Seller, at its option, may
elect to repair or replace the Products at Customer's site. In such instances,
travel and living expenses for Seller's personnel to and from Customer's site
shall be borne by Seller. Customer, at its expense, shall make the Products
accessible for repair or replacement and shall restore the site after Seller has
completed its repairs or replacement.
(e) Seller makes no warranty with respect to defective conditions or non-
conformities resulting from any of the following: Customer's modifications,
misuse, neglect, accident or abuse; improper wiring, repairing, splicing,
alteration, installation, storage or maintenance; use in a manner not in
accordance with Seller's or its vendor's Specifications, or operating
instructions or failure of Customer to apply previously applicable Seller's
modifications or corrections. In addition, Seller 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, including, without
limitation, fuses, light bulbs, motor brushes and the like. No warranty is made
that Software will run uninterrupted or error free, and in addition Seller makes
no warranty with respect to defects related to Customer's data base errors.
(f) THE FOREGOING WARRANTIES ARE EXCLUSIVE 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. CUSTOMER'S SOLE AND
EXCLUSIVE REMEDY SHALL BE SELLER'S OBLIGATION TO REPAIR, REPLACE, CREDIT, OR
REFUND AS SET FORTH ABOVE IN THIS WARRANTY.
1.15 INFRINGEMENT:
(a) In the event of any claim, action, proceeding or suit by a third party
against Customer alleging an infringement of any United States patent, United
States copyright, or United States trademark, or a violation in the United
States of any trade secret or proprietary rights by reason of the use, in
accordance with Seller's Specifications, of any Product or Licensed Materials
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furnished by Seller to Customer under this Agreement, Seller, at its expense,
will defend Customer, subject to the conditions and exceptions stated below.
Seller will reimburse Customer for any cost, expense or attorneys' fees,
incurred (i) at Seller's written request or authorization and (ii) by Customer
where Customer has provided Seller with advance written notice describing
Customer's need to incur such expenses and Seller has not, within three (3)
business days of such notice, taken appropriate action to obviate Customer's
need to incur such expenses, in which case such inaction shall be deemed
authorization for Customer to proceed, and such costs shall continue to be
reimbursed by Seller, until such time as Seller demonstrates, to Customer's
reasonable satisfaction, that such costs no longer need to be incurred. Further,
Seller will indemnify Customer against any liability assessed against Customer
by final judgment on account of such infringement or violation arising out of
such use.
(b) If Customer's use shall be enjoined or in Seller's opinion is likely
to be enjoined, Seller will, at its expense and at its option, either (1)
replace the enjoined Product or Licensed Materials furnished pursuant to this
Agreement with a suitable substitute free of any infringement; (2) modify it so
that it will be free of the infringement; or (3) procure for Customer a license
or other right to use it. If none of the foregoing options are practical, Seller
will remove the enjoined Product or Licensed Materials and refund to Customer
any amounts paid to Seller therefor less a reasonable charge for any actual
period of use by Customer.
(c) Customer shall give Seller prompt written notice of all such claims,
actions, proceedings or suits alleging infringement or violation and Seller
shall have full and complete authority to assume the sole defense thereof,
including appeals, and to settle same. Customer shall, upon Seller's request and
at Seller's expense, furnish all information and assistance available to
Customer and cooperate in every reasonable way to facilitate the defense and/or
settlement of any such claim, action, proceeding or suit.
(d) No undertaking of Seller under this section shall extend to any such
alleged infringement or violation to the extent that it: (1) arises from
adherence to design modifications, specifications, drawings, or written
instructions which Seller is directed by Customer to follow, but only if such
alleged infringement or violation does not reside in corresponding commercial
Product or Licensed Materials of Seller's design or selection; or (2) arises
from adherence to instructions to apply Customer's trademark, trade name or
other company identification; or (3) resides in a product or licensed materials
which are not of Seller's origin and which are furnished by Customer to Seller
for use under this Agreement; or (4) relates to uses of Product or Licensed
Materials provided by Seller in combinations with other Product or Licensed
Materials, furnished either by Seller or others, which combination was not
installed, recommended or otherwise approved by Seller. In the foregoing cases
numbered (1) through (4), Customer will defend and save Seller harmless, subject
to the same terms and conditions and exceptions stated above, with respect to
the Seller's rights and obligations under this section.
(e) The liability of Seller and Customer with respect to any and all
claims, actions, proceedings or suits by third parties alleging infringement of
patents, trademarks or copyrights or violation of trade secrets or proprietary
rights because of, or in connection with, any Products or Licensed Materials
furnished pursuant to this Agreement shall be limited to the specific
undertakings contained in this section.
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1.16 CUSTOMER'S REMEDIES:
(a) CUSTOMER'S EXCLUSIVE REMEDIES AND THE ENTIRE LIABILITY OF SELLER, ITS
AFFILIATES AND THEIR EMPLOYEES, AND AGENTS, AND ITS SUPPLIERS FOR ANY CLAIM,
LOSS, DAMAGE OR EXPENSE OF CUSTOMER OR ANY OTHER ENTITY ARISING OUT OF THIS
AGREEMENT, OR THE USE OR PERFORMANCE OF ANY PRODUCT, LICENSED MATERIALS, OR
SERVICES, WHETHER IN AN ACTION FOR OR ARISING OUT OF BREACH OF CONTRACT, TORT,
INCLUDING NEGLIGENCE, INDEMNITY, OR STRICT LIABILITY, SHALL BE AS FOLLOWS:
1) FOR INFRINGEMENT --THE REMEDY SET FORTH IN THE "INFRINGEMENT" SECTION;
2) FOR THE NON-PERFORMANCE OF PRODUCTS, SOFTWARE, AND SERVICES DURING THE
WARRANTY PERIOD --THE REMEDY SET FORTH IN THE APPLICABLE "WARRANTY"
SECTION;
3) FOR TANGIBLE PROPERTY DAMAGE AND PERSONAL INJURY CAUSED BY SELLER'S
NEGLIGENCE --THE AMOUNT OF THE PROVEN DIRECT DAMAGES;
4) FOR EVERYTHING OTHER THAN AS SET FORTH ABOVE --THE AMOUNT OF THE PROVEN
DIRECT DAMAGES NOT TO EXCEED $[***] PER OCCURRENCE INCLUDING AWARDED
COUNSEL FEES AND COSTS.
(b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, SELLER, ITS
AFFILIATES AND THEIR EMPLOYEES, AND AGENTS, AND ITS SUPPLIERS SHALL NOT BE
LIABLE FOR ANY INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES OR LOST PROFITS,
REVENUES OR SAVINGS ARISING OUT OF THIS AGREEMENT, OR THE USE OR PERFORMANCE OF
ANY PRODUCT, LICENSED MATERIALS, OR SERVICES, WHETHER IN AN ACTION FOR OR
ARISING OUT OF BREACH OF CONTRACT, TORT, INCLUDING NEGLIGENCE, OR STRICT
LIABILITY. THIS SECTION, 1.16(B), SHALL SURVIVE FAILURE OF AN EXCLUSIVE OR
LIMITED REMEDY.
(c) CUSTOMER SHALL GIVE SELLER PROMPT WRITTEN NOTICE OF ANY CLAIM. ANY
ACTION OR PROCEEDING AGAINST SELLER MUST BE BROUGHT WITHIN THE GREATER OF
[***] ([***])[***] OR THE TIME PERIOD SPECIFIED WITHIN THE APPLICABLE STATUTE OF
LIMITATION AFTER THE CAUSE OF ACTION ACCRUES.
1.17 USE OF INFORMATION:
All technical and business information in whatever form recorded which
bears a legend or notice restricting its use, copying, or dissemination or, if
not in tangible form, is described as being proprietary or confidential at the
time of disclosure and is subsequently summarized in a writing so marked and
delivered to the receiving party within thirty (30) days of disclosure to the
receiving party (all hereinafter designated "Information") shall remain the
property of the furnishing party. The furnishing party grants the receiving
party the right to use such Information only for purposes expressly permitted in
this section. Such Information (1) shall not be reproduced or copied, in whole
or part, except for use as authorized in this Agreement; and (2)
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shall, together with any full or partial copies thereof, be returned or
destroyed when no longer needed. Moreover, when Seller is the receiving party,
Seller shall use such Information only for the purpose of performing under this
Agreement, and when Customer is the receiving party, Customer shall use such
Information only (1) to order; (2) to evaluate Seller's Products, Licensed
Materials and Services; or (3) to install, operate and maintain the particular
Products and Licensed Materials for which it was originally furnished. Unless
the furnishing party consents in writing, such Information, except for that
part, if any, which is known to the receiving party free of any confidential
obligation, or which becomes generally known to the public through acts not
attributable to the receiving party, shall be held in confidence by the
receiving party. The receiving party may disclose such Information to other
persons, upon the furnishing party's prior written authorization, but solely to
perform acts which this section expressly authorizes the receiving party to
perform itself and further provided such other person agrees in writing (a copy
of which writing will be provided to the furnishing party at its request) to the
same conditions respecting use of Information contained in this section and to
any other reasonable conditions requested by the furnishing party.
1.18 DOCUMENTATION:
Seller shall furnish to Customer, at no additional charge, one (1)
copy of the documentation for Products and/or one (1) copy of the Related
Documentation for Software licensed to Customer. Such documentation shall be
that which is customarily provided by Seller to its Customers at no additional
charge. Such documentation shall be sufficient to enable Customer to operate and
maintain such Products and Software in accordance with Seller's Specifications.
Such documentation shall be provided either prior to, included with, or shortly
after shipment of Products and/or Software from Seller to Customer. Additional
copies of such documentation are available at prices set forth in Seller's
Customer Price Lists.
1.19 NOTICES:
(a) Any notice, demand or other communication (other than an order)
required, or which may be given, under this Agreement shall, unless specifically
otherwise provided in this Agreement, be in writing and shall be given or made
by nationally recognized overnight courier service, confirmed facsimile, or
certified mail, return receipt requested and shall be addressed to the
respective parties as follows:
If to Seller:
Lucent Technologies Inc.
Global Commercial Markets
5440 Millstream Road, E2N32
I-85 & Mt. Hope Church Road
McLeansville, North Carolina 27301
Attn: Contract Manager (Fax # 336-279-6544)
<TABLE>
<S> <C>
If to Customer:
PaeTec Communications, Inc. With a copy to:
Attn: President PaeTec Communications, Inc.
290 Woodcliff Drive Attn: General Counsel
Fairport, NY 14450 290 Woodcliff Drive
</TABLE>
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Fax# 716-385-8994 Fairport, NY 14450
Fax#716-385-5634
(b) Any such notice shall be effective upon receipt. Each party may change its
designated representative who is to receive communications and notices
and/or the applicable address for such communications and notices by giving
notice thereof to the other party as provided herein.
1.20 FORCE MAJEURE:
Except for payment obligations, neither party shall be held
responsible for any delay or failure in performance to the extent that such
delay or failure is caused by fires, strikes, embargoes, explosions,
earthquakes, floods, wars, water, the elements, labor disputes, government
requirements, civil or military authorities, acts of God or by the public enemy,
inability to secure raw materials or transportation facilities, acts or
omissions of carriers or suppliers, or other causes beyond its reasonable
control whether or not similar to the foregoing.
1.21 ASSIGNMENT:
Except as provided in this section, neither party shall assign this
Agreement or any right or interest under this Agreement, nor delegate any work
or obligation to be performed under this Agreement, (an "assignment") without
the other party's prior written consent. Such consent shall not be unreasonably
withheld. Any attempted assignment in contravention of this shall be void and
ineffective. Nothing shall preclude a party from employing a subcontractor in
carrying out its obligations under this Agreement. A party's use of such
subcontractor shall not release the party from its obligations under this
Agreement. Notwithstanding the foregoing, Seller has the right to assign this
Agreement and to assign its rights and delegate its duties under this Agreement,
in whole or in part, at any time and without Customer's consent, to any present
or future subsidiary or "Affiliate" of Seller or to any combination of the
foregoing. Such assignment or delegation shall release Seller from any further
obligation or liability thereon. Seller shall give Customer prompt written
notice of the assignment. For the purposes of this section, the term "Agreement"
includes this Agreement, any subordinate agreement placed under this Agreement
and any order placed under this Agreement or subordinate agreement.
1.22 TERMINATION OF AGREEMENT FOR BREACH:
In the event either party is in material breach or default of the
terms of this Agreement and such breach or default continues for a period of ten
(10) days with respect to payment obligations or thirty (30) days with respect
to any other obligations after the receipt of written notice from the other
party, then the party not in breach or default shall have the right to terminate
this Agreement without any charge, obligation or liability except for Products
or Licensed Materials already delivered and Services already performed. The
party not in breach or default shall provide full cooperation to the other party
in every reasonable way to facilitate the remedy of the breach or default
hereunder within the applicable cure period. Notwithstanding the foregoing, if
the nature of the material breach or default is such that it is not a payment
obligation and it is incapable of cure within the foregoing thirty (30) day
period, then the thirty (30) day cure period may be extended for a reasonable
period of time (in no event to exceed an additional thirty (30) days), provided
that the party in breach or default is proceeding diligently and in good faith
to effectuate a cure.
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1.23 ARBITRATION:
If a dispute arises out of or relates to this Agreement, or its
breach, the parties agree to escalate such dispute to their respective senior
executives for good faith negotiations seeking a mutually agreeable resolution.
This demand for escalation shall be in writing and notice shall be served in
accordance with the notice provision of this Agreement. If the dispute is not
resolved through such escalation within fifteen (15) days after the date of
escalation, either party shall have the right to submit the dispute to a sole
mediator selected by the parties or, at any time at the option of a party, to
mediation by the American Arbitration Association ("AAA"). If not thus resolved,
it shall be referred to a sole arbitrator selected by the parties within thirty
(30) days of the mediation or, in the absence of such selection, to AAA
arbitration which shall be governed by the United States Arbitration Act, and
judgment on the award may be entered in any court having jurisdiction. The
arbitrator may determine issues of arbitrability, but may not award punitive
damages or limit, expand or otherwise modify the terms of this Agreement. The
parties, their representatives, other participants and the mediator and
arbitrator shall hold the existence, content and result of mediation and
arbitration in confidence, except as such disclosure may be necessary for the
purpose of recording or otherwise acting upon the arbitrator's award.
1.24 NON-SOLICITATION:
During the term of this Agreement and for a period of [***] ([***])
[***] from the termination of this Agreement or a Statement of Work, the
parties agree not to employ, make an offer of employment to, or enter into a
consulting relationship with any employee, subcontractors or consultant of the
other party who is directly involved with the delivery of Services under this
Agreement, except upon the prior written consent of the affected party.
1.25 INDEPENDENT CONTRACTOR:
All work performed by either party under this Agreement shall be
performed as an independent contractor and not as an agent of the other, and no
persons furnished by the performing party shall be considered the employees or
agents of the other.
1.26 RELEASES VOID:
Neither party shall require releases or waivers of any personal rights
from representatives or employees of the other in connection with visits to its
premises, nor shall such parties plead such releases or waivers in any action or
proceeding .
1.27 PUBLICITY:
Neither party shall issue or release for publication any articles,
advertising, or publicity material relating to Products, Licensed Materials, or
Services under this Agreement or mentioning or implying the name, trademarks,
logos, trade name, service mark or other company identification of the other
party or any of its Affiliates or any of its personnel without the prior written
consent of the other party.
1.28 CONFIDENTIALITY OF AGREEMENT:
Notwithstanding the obligations contained in Section 1.17 (Use of
Information) of this Agreement the parties shall keep all provisions of this
Agreement and any order submitted hereunder (including, without limitation,
prices and pricing related information) confidential
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except as reasonably necessary for performance by the parties hereunder and
except to the extent disclosure may be required by applicable laws or
regulations, in which latter case, the party required to make such disclosure
shall promptly inform the other prior to such disclosure in sufficient time to
enable such other party to make known any objections it may have to such
disclosure. The disclosing party shall take all reasonable steps and exercise
all reasonable efforts directed by Seller to secure a protective order, seek
confidential treatment, or otherwise assure that this Agreement and/or any order
will be withheld from the public record.
1.29 AMENDMENTS:
Any supplement, modification or waiver of any provision of this
Agreement must be in writing and signed by authorized representatives of both
parties.
1.30 SEVERABILITY:
If any portion of this Agreement is found to be invalid or
unenforceable, the parties agree that the remaining portions shall remain in
effect. The parties further agree that in the event such invalid or
unenforceable portion is an essential part of this Agreement, they will
immediately begin negotiations for a replacement.
1.31 WAIVER:
If either party fails to enforce any right or remedy available under this
Agreement, that failure shall not be construed as a waiver of any right or
remedy with respect to any other breach or failure by the other party.
1.32 SURVIVAL:
The rights and obligations of the parties which by their nature would
continue beyond the termination, cancellation, or expiration of this Agreement,
shall survive such termination, cancellation or expiration.
1.33 SECTION HEADINGS:
The section headings in this Agreement are inserted for convenience
only and are not intended to affect the meaning or interpretation of this
Agreement.
1.34 CHOICE OF LAW:
The construction and interpretation of, and the rights and obligations
of the parties pursuant to this Agreement, shall be governed by the laws of the
State of New York without regard to its conflict of laws provision.
1.35 AMBIGUITIES:
The parties represent that they are sophisticated businesses with
access to their own legal, financial and business advisors and that each party
has had the opportunity to consult with advisors of their own choosing before
entering into this Agreement. The parties therefore acknowledge and agree that
the rule of law that ambiguities are construed against the drafter shall not
apply to the interpretation of this Agreement.
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2. ARTICLE II
PROVISIONS APPLICABLE TO LICENSED MATERIALS
2.1 LICENSE FOR LICENSED MATERIALS:
(a) Upon delivery of Licensed Materials pursuant to this Agreement, Seller
grants to Customer a personal, nontransferable, and nonexclusive license to Use
Licensed Materials on a Designated Processor in the United States for its own
business operations. No license is granted to Customer to Use the Licensed
Materials outside the United States or to sublicense such Licensed Materials
furnished by Seller. Customer shall not reverse engineer, decompile or
disassemble Software furnished as object code to generate corresponding Source
Code. Unless otherwise agreed in writing by Seller, Customer shall not modify
Software furnished by Seller under this Agreement. If the Designated Processor
becomes temporarily inoperative, Customer shall have the right to Use the
Licensed Materials temporarily on a backup processor until operable status is
restored and processing on the backup processor is completed.
(b) Customer shall not copy Software embodied in Firmware. Customer shall
not make any copies of any other Licensed Materials except as necessary in
connection with the rights granted hereunder. Customer shall reproduce and
include any Seller copyright and proprietary notice on all such necessary copies
of the Licensed Materials. Customer shall also mark all media containing such
copies with a warning that the Licensed Materials are subject to restrictions
contained in an agreement between Seller and Customer and that such Licensed
Materials are the property of Seller. Customer shall maintain records of the
number and location of all copies of the Licensed Materials. Customer shall take
appropriate action, by instruction, agreement, or otherwise, with the persons
permitted access to the Licensed Materials so as to enable Customer to satisfy
its obligations under this Agreement. If Customer's license is canceled or
terminated, or when the Licensed Materials are no longer needed by Customer,
Customer shall return all copies of such Licensed Materials to Seller or follow
written disposition instructions provided by Seller.
2.2 CHANGES IN LICENSED MATERIALS:
Prior to shipment, Seller at its option may at any time modify the
Specifications relating to its Licensed Materials, provided the modifications,
under normal and proper Use, do not materially adversely affect the Use,
function, or performance of the ordered Licensed Materials. Unless otherwise
agreed in writing, such substitution shall not result in any additional charges
to Customer with respect to licenses for which Seller has quoted fees to
Customer.
2.3 CANCELLATION OF LICENSE:
Notwithstanding any other section in this Agreement to the contrary,
if Customer fails to comply with any of the material terms and conditions of
this Agreement with respect to the Use of Licensed Materials, and such failure
is not corrected within ten (10) days of receipt of written notice thereof by
Customer, Seller, upon written notice to Customer, may cancel any affected
license for Licensed Materials without further notification.
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2.4 OPTIONAL SOFTWARE FEATURES:
Software provided to Customer under this Agreement may contain
optional features which are separately licensed and priced. Customer understands
and agrees that such optional features will not be activated without written
authorization from Seller and Customer and Customer's payment of the appropriate
license fees. If, in spite of Customer's best efforts to comply with this
restriction, such features are activated, Customer agrees to so notify Seller
within five (5) business days from the date of Customer's knowledge that such
features were activated and to pay Seller the current license fees charged by
Seller for the activated features, as well as the reasonable cost of money for
the period in which such features were activated.
2.5 ADDITIONAL RIGHTS IN LICENSED MATERIALS:
(a) Upon thirty (30) days advance written notice, Customer may relocate
the Software permanently to a new processor of Customer. This new processor
shall then become the Designated Processor in lieu of the former Designated
Processor.
(b) Customer may retain an archival copy of the Software for as long as
such Software is relevant to Customer's operations.
INSTALLATION OF SOFTWARE:
(a) Where Customer is responsible for Software installation, Seller's sole
responsibility is to deliver the Software to Customer on or before the scheduled
Delivery Date agreed to by Seller. However, if the order specifies that Seller
is responsible for such installation, Seller shall deliver the Software to
Customer in sufficient time for it to be installed on or before the scheduled
Installation Complete Date agreed to by Seller, and Seller shall complete its
installation and associated testing on or before such date.
(b) Where Customer has assumed responsibility for the installation of
newly licensed Software and in the event that Customer encounters installation
difficulties, at Customer's request, Seller will, at the standard rate in effect
at the time of the request, provide technical assistance.
2.7 SOFTWARE ACCEPTANCE:
(a) Prior to Software acceptance by Customer, Customer has the right to
operate the Software furnished by Seller on the Designated Processor solely for
the purpose of conducting an Acceptance Test (means the test which may be
performed by Customer during the Acceptance Test Period to determine whether
Software will be free from defects which materially affect performance in
accordance with the Seller's Specifications). Unless otherwise agreed by the
parties, the Acceptance Test Period (means the period of time in days agreed to
by the parties and specified in this section) for Software shall be eighteen
(18) consecutive calendar days from the ship date if Customer performs
installation or from the Installation Complete Date if Seller performs
installation. The Software shall be deemed accepted by Customer unless Customer
notifies Seller in writing to the contrary within the applicable Acceptance Test
Period described above. If Seller receives written notice from Customer during
the Acceptance Test Period that the Software failed the Acceptance Test, the
Acceptance Date (the date on which the Software successfully completes the
Acceptance Test) shall be extended on a day-to-day basis until such time as the
Software passes the Acceptance Test.
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(b) If Customer elects in the order not to perform Acceptance Tests for any
Software, the Acceptance Date for such Software shall be the Delivery Date if
not installed by Seller or the Installation Complete Date if installed by
Seller, as applicable.
(c) For any Acceptance Test conducted by Customer on newly licensed Software,
and in the event that Customer encounters difficulties, Seller will, at
Customer's request and for the standard rate in effect at the time of the
request, provide technical assistance to Customer.
(d) If Customer performs installation and elects to perform applicable tests
for any Software, the warranty for such Software shall commence on the Delivery
Date.
2.8 MODIFICATIONS BY CUSTOMER TO USER CONTROLLED MODULES:
Customer may add to, delete from, or modify user controlled Software
modules or menus as contemplated in the Seller's Related Documentation. Such
changes or modifications, however extensive, shall not affect Seller's title to
the licensed Software. Seller shall have no liability for Customer's errors in
making such changes or modifications.
2.9 ADDITIONAL SOFTWARE RIGHTS FOR 5ESS(R) SWITCH LICENSED MATERIALS
The following provisions also apply to the granting of licenses by Seller
to Customer for 5ESS(R) Switch Licensed Materials.
(a) Customer may transfer its right-to-use 5ESS(R) Switch Software furnished
under this Agreement without the payment of an additional right-to-use fee by
transferee, except where size sensitive units are a factor. Such transfer can be
made to an end user for their own internal use and only under the following
conditions:
(i) Such software shall be used only within the United States; however,
Seller will not unreasonably withhold its consent to Use outside the
United States provided that, in the sole opinion of the Seller, the
proprietary information associated with the Use can be adequately
protected and any other reasonable concerns of Seller are adequately
addressed;
(ii) Except as otherwise provided in the Agreement, the right to use such
Software may be transferred only together with the 5ESS(R) Switch
Product with which customer has a right to use such Software, and
such right to use the Software shall continue to be limited to Use
with such Product;
(iii) Before any such Software shall be transferred, Customer shall notify
Seller of such transfer and the transferee shall have agreed in
writing (a copy of which will be provided to Seller at its request)
to keep such Software in confidence and to comply with corresponding
conditions respecting Use of Licensed Materials as those imposed on
customer; and
(iv) Within the United States, the transferee shall have the same right to
Software warranty or Software maintenance for such Software as the
transferor, provided the
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transferee continues to pay the fees, if any, associated with such
Software or Software maintenance.
(v) In no event shall such transfer be made to any competitor of Seller
who is in the business of manufacturing comparable systems or to any
other party who presents a competitive or strategic conflict to
Seller.
(b) Upon advance written notice to Seller, Customer may remove 5ESS(R) Switch
Software or optional feature packages, which Customer has the right to Use under
this Agreement from one Customer-owned 5ESS(R) Switch Product and relocate them
to another Customer-owned 5ESS(R) Switch Product within the same company as
Customer. Customer shall not be required to pay additional right-to-use fees as
a result of such relocation, except where size sensitive units are a factor.
Seller may charge Customer for services requested by Customer in support of such
relocation. Such Software shall not be used or transferred to Customer's
affiliate that is a manufacturer of telecommunication products in direct
competition with Seller.
(c) If Seller ceases to maintain a standard, supported version of Software for
the 5ESS(R) Switch Product furnished pursuant to this Agreement, and these
support services are not available from another entity (either working with or
independently from Seller), then Seller shall furnish Customer, under a
confidentiality agreement acceptable to Seller, Seller's then existing Software
Source Code, Software development programs, and associated documentation for
such standard version to the extent necessary for Customer to maintain and
enhance for its own use the standard version of that Software which it has the
right to use under this Agreement.
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3. ARTICLE III
PROVISIONS APPLICABLE TO ENGINEERING, INSTALLATION AND OTHER SERVICES
GENERAL: The provisions of this Article III shall apply to the Services
ordered by Customer and furnished by Seller under this Agreement.
3.1 SITE REQUIREMENTS:
(a) Customer is solely responsible for ensuring that the installation site is
compliant with any site requirements identified by Seller for the installation
and/or operation of any Products, Licensed Materials, or Services furnished by
Seller under this Agreement. Such site requirements shall include, without
limitation, those site requirements set forth in this Section 3.1 below. Seller
agrees to cooperate with Customer to ensure compliance with all site
requirements, provided that such cooperation shall not require Seller to incur
any out-of-pocket costs unless the parties expressly agree otherwise in writing.
(b) Customer shall be solely responsible for ensuring that the installation
site complies with all applicable laws, orders, and regulations of federal,
state and local governmental entities including, without limitation, those
relating to environmental conditions.
(c) Notwithstanding anything contained in this Agreement to the contrary,
Seller shall have no liability to Customer, its employees, agents, and customers
for any delay by Seller in completion of any installation or other Service to be
provided by Seller under this Agreement if such delay is attributable to the
failure by Customer to comply with any site requirements or to provide any other
items which are the responsibility of Customer under this Article III.
(d) The site requirements which are solely the Customer's responsibility shall
include but are not limited to the following:
(i) Participate in a joint site survey with Seller
(ii) Interior Space -Clears ten feet (10') from floor to bottom of lowest
obstruction
(iii) Floor Loading(minimum requirements) Structural Analysis always
required
(iv) Power Room 150 lb. per sq. ft
(v) Switch Room 100 lb. per sq. ft.
(vi) Floor Thickness: In accordance with local seismic requirements for
the equipment
(vii) Conduit access to all floors in building
(viii) Local exchange carrier cable available
(ix) Commercial electrical current
(x) Existing building grounding is 5 ohm or less metered
(xi) Battery room ventilation in accordance with local requirements
(xii) Fire suppression system
(xiii) Freight access for a 48' trailer off loading equipment.
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3.2 ADDITIONAL ITEMS TO BE PROVIDED BY CUSTOMER:
(a) Customer will also be responsible for furnishing the items described in
this Section 3.2 as required by the conditions of the particular installation or
other on-site Service at no cost to Seller and such items are not included in
Seller's price for the Services. Seller shall have the right to invoice Customer
for any costs or expenses incurred by Seller as a result of Customer's failure
to provide any of these items described in this Section 3.2 and all such
invoices shall be paid by Customer in accordance with this Agreement.
(i) Access to Building and Work Site Customer shall provide employees
--------------------------------
of Seller and its subcontractors free access to premises and
facilities at all hours during the scheduled Service or at such
other times as are reasonably requested by Seller. Customer shall
obtain for Seller's employees and its subcontractors' employees any
identification and clearance credentials which are necessary to
enable Seller and its subcontractors to have access to the work
site.
(ii) Site Coordination At Seller's request Customer shall coordinate
-----------------
with Customer's sub contractors, property managers, Regional Bell
Operating Company, Local Exchange Carrier and any other parties and
tenants having rights to the work site or whose participation is
necessary in order for Seller to perform the applicable Services.
(iii) Environmental Conditions Prior to the Services start date,
------------------------
Customer shall insure that the premises will be dry and free from
dust and Hazardous Materials, including but not limited to asbestos,
and that the premises are in such condition as not to be injurious
to Seller's or its subcontractors' employees or to the Products and
Licensed Materials to be installed. Prior to Services start date and
during the performance of the Services, Customer shall, if requested
by Seller, provide Seller with sufficient data to assist Seller and
its subcontractors in evaluating the environmental conditions at the
work site (including without limitation, the presence of Hazardous
Materials). The price quoted by Seller for Services does not include
the cost of removal or disposal of the Hazardous Materials from the
work site. Customer is responsible for the removal and disposal in
accordance with applicable laws, rules and regulation of the
Hazardous Materials, including but not limited to asbestos, prior to
commencement of Services.
(iv) Sensitive Equipment Prior to the Services start date, Customer
-------------------
shall inform Seller of the presence of any sensitive equipment at
the work site (e.g., equipment sensitive to static electricity or
light).
(v) Repairs to Buildings Prior to the Services start date, Customer
--------------------
shall make such alterations and repairs to the work site as are
necessary for proper installation of Products and Licensed
Materials.
(vi) Building Readiness Prior to the Services start date, Customer
------------------
shall provide extraordinary hauling and hoisting services such as,
rigging or crane services, if applicable, and shall arrange for
traffic control, if necessary for the delivery of Products.
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(vii) Openings in Buildings - Customer shall furnish suitable openings in
---------------------
buildings, including, without limitation, elevators and windows as
needed to allow Products to be placed in position, and shall provide
necessary openings and ducts for cable and conductors in floors and
walls as designated on engineering drawings furnished by Seller.
Customer shall fireproof (with steel covers and as otherwise
required by applicable laws, rules, regulations, and codes) all
unopened paths throughout such buildings.
(viii) Surveys Prior to the Services start date, Customer shall provide
-------
to Seller (and, if requested by Seller, to Seller's subcontractors)
surveys (describing the physical characteristics, legal limitations,
and utility locations for the work site) and a legal description of
the site.
(ix) Electrical Current, Heat, Light, and Water Customer shall, in
------------------------------------------
amounts no less than that ordinarily furnished for similar purposes
in a working office, provide electric power, run all leads to
Seller's power board; provide temperature control and general
illumination (regular and emergency) in rooms in which services are
to be performed or Products stored, provide exit lights; and
provide water and other necessary utilities for the proper
execution of Services.
(x) Building Evacuation Prior to the Services start date, Customer
-------------------
shall provide building evacuation plans in case of a fire or other
emergency.
(xi) Ceiling Inserts Provide ceiling inserts as required using\
---------------
Seller's standard spacing arrangement for ceiling support
equipment.
(xii) Material Furnished by Customer Unless expressly stated to the
------------------------------
contrary, Seller's prices do not include costs for any Customer
furnished material nor do they include any Seller charges for
engineering, installation, modification, or repair Services to
Customer furnished material. New or used material furnished by
Customer shall be in such condition that it requires no repair and
no adjustment or test effort in excess of that normal for new
equipment. Customer assumes all responsibility for the proper
functioning of such material. Customer shall also provide the
necessary technical assistance and information for Seller to
properly install such material.
(xiii) Floor Space and Storage Facilities Customer shall provide, for
----------------------------------
the duration of Services, suitable and easily accessible floor
space and storage facilities to permit storing of Products and
other material, tools and other property of Seller and its
subcontractors in close proximity to where they will be used. Where
the Services are to be performed outside of a building or in a
building under construction, Customer shall, in addition to the
above requirements, permit or secure any necessary permission for
Seller and its subcontractors to maintain at the work site, storage
facilities for Products, material, tools, and equipment needed to
complete the Services. As appropriate Customer shall provide
Seller's and its subcontractors' personnel access to toilet
facilities.
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(xiv) Easements, Permits, and Rights of Way Customer shall secure prior
-------------------------------------
to the Services start date and shall maintain for the duration of
the Services all rights-of-way, easements, licenses, and permits
and such other rights and approvals as are necessary to enable
Seller to perform the Services including, without limitation, all
construction and building permits for work to be performed at the
work site and other areas ancillary to the work site such as
sidewalks, streets, alleys, and highways.
(xv) Security Service Customer shall provide such levels of security
----------------
as are necessary to prevent admission of unauthorized persons to
building and other areas where installation Services are performed
and to prevent unauthorized removal of the Products and other
materials. Seller will inform Customer as to which storage
facilities at the work site Seller will keep locked. Such storage
facilities will remain closed to Customer's building surveillance.
(xvi) Access to Existing Equipment Customer shall permit Seller
----------------------------
reasonable use of such portions of the existing equipment as are
necessary for the proper completion of such tests as require
coordination with existing equipment. Such use shall not interfere
with the Customer's normal maintenance of equipment.
(xvii) Grounds Customer shall provide access to suitable and isolated
-------
building ground as required for Seller's standard grounding of
equipment. Where installation is performed outside or in a building
under construction, Customer shall also furnish lightning
protection ground.
(xviii) Requirements for Customer Designed Circuits Customer shall
-------------------------------------------
furnish information covering the proper test and readjust
requirements for apparatus and shall furnish requirements for
circuit performance associated with circuits designed by Customer
or standard circuits modified by Customer's drawings such as alarm
and environmental circuits.
(xix) Cross-Connecting Main Distributing Frames and Installing Heat Coils
-------------------------------------------------------------------
Customer shall install such cross-connections and heat coils as are
necessary in connection with the Services.
(xx) Clearing Equipment for Modifications Customer shall remove cross-
------------------------------------
connections, transfer service on trunks and sundry working
equipment, and make other arrangements required to permit Seller to
modify existing equipment.
(b) In the event the joint site survey conducted by the parties pursuant to
Section 3.3.2(a) determines that the necessary requirements are not met at the
commencement of the installation of the Products and the Customer needs to
arrange for alterations and/or repairs, the order will be placed on hold until
such time as requirements are met. During such interval, Seller reserves the
right to determine any schedule and price impacts, to treat such product as Bill
and Hold, or to cancel such order. Customer shall be responsible for and agrees
to pay the applicable cancellation fee if such order is canceled by Seller.
***CONFIDENTIAL TREATMENT REQUESTED***
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LNM980716RMPT
3.3 ITEMS TO BE FURNISHED BY SELLER
3.3.1 ENGINEERING:
(a) General Review Seller will review the following items as Seller deems
--------------
appropriate; switching Products (Products and Software); transmission Products
(Products and Software); power/energy equipment hardware; engineering drawings;
site survey; grounding of the switch; appliance outlets; front and rear aisle
lighting as required; timing cables; distributing frame engineering and
equipment; cable rack and hardware; stanchions; end guards auxiliary framing;
existing cable holes; fiber cable protection systems.
(b) Needs Analysis Seller will perform a needs analysis of the Telephone
--------------
Equipment Order (TEO) and the Customer's specified requirements to determine the
equipment solution that meets those requirements.
(c) Records Upon Installation Complete, Seller will turn over to Customer
-------
a complete set of records. Such records include but are not limited to wiring
lists, front equipment drawings, assignment drawings, and interface schematics.
3.3.2 INSTALLATION:
(a) Site Survey Prior to the commencement of installation Services,
-----------
Seller and Customer will perform a joint site survey to determine whether the
installation site meets the site requirements referenced in Section 3.1 and
whether Customer has provided the items in Section 3.2. Should Seller determine
that the site does not comply with such site requirements or that Customer has
not provided any item required under Section 3.2, Seller shall specify such
deficiencies to Customer in writing. Seller and Customer shall jointly agree on
a course of action to correct such deficiencies prior to the start of
installation Services. During the joint site survey, Seller and Customer shall
also jointly agree upon the layouts and arrangements for the Products and
Licensed Materials to be installed. Upon the start of installation all changes
shall be subject to additional charges.
(b) Method of Procedure Seller shall prepare a detailed Method of
-------------------
Procedure ("MOP") and review with Customer before starting work. Customer shall
review the MOP prepared by Seller and shall give Seller written acceptance of
the MOP by signing a copy thereof prior to the Services start date. Any changes
to the MOP requested by Customer shall be agreed upon subject to the Change
Order process.
The MOP shall contain the following details:
(i) A concise statement that covers the installation Services to be
performed including the equipment that will be affected and the
(ii) Specific responsibilities of Seller and Customer;
(iii) Service protection procedures that include, general service
protection rules and special service precautions for the specific
project;
(iv) A time and release schedule of the work operations involving
working equipment and/or circuits in service and;
(v) A method of identifying equipment and cabling to ensure that the
circuits are "cleared" before start of work
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(vi) A detailed account of the work operations that the installer
will follow
(vii) The methodology to be used to halt installation Services if
trouble occurs and a general procedure to correct/resume work
operations;
(viii) Provide environmental safety concerns, if applicable;
(ix) Obtain Customer signature.
(c) Warehousing, Delivery, Receipt & On-site Storage of Equipment, and
------------------------------------------------------------------
General Cleaning Seller will stage the delivery of Products. Seller's
----------------
personnel will be on-site at the time the Products are delivered. Such personnel
will accept the Products, unpack for inventory purposes and inspect such
Products for damage. Seller will resolve all shipping errors inventory
discrepancies and damage issues. This function shall be performed in an area
previously designated for the storage and unpacking of equipment and Product(s).
Such area will be selected based on a location that minimizes movement of
material and personnel through the work site. In the event storage is limited or
inadequate, as determined by Seller, temporary storage facilities such as
trailers or containers may be required. Any fees associated with the procurement
of temporary storage facilities are not included in Seller's quoted prices and
shall be solely the responsibility of the Customer. Materials such as plywood or
masonite will be utilized as necessary, to prevent cable reels, iron work and
other heavy objects from damaging floors, walls and doors. Seller shall perform
general cleaning of the equipment and storage areas (e.g. clearing floors of
debris, packing material, etc.) on a regular basis throughout the installation
period. Rubbish shall be disposed of at Seller's expense and in compliance with
local requirements.
(d) Hardware Assembly Hardware assemblies and overhead cable rack, iron
-----------------
work and conduit (collectively "Components") will be delivered for specific bays
and cabinets as identified in the firm price quote provided or in the Statement
of Work, attached hereto. Unless included in the SOW, additions of these
components to provide access to other locations (i.e. power rooms, computer
rooms, distributing frames not located with Products, or Products located on
separate floors) will be specifically excluded from the installation Services.
Such additions will only be included in the installation Services for an
additional charge. Seller will place and secure all ordered Products in the
location specified in the engineering specifications. Such activity includes but
is not limited to:
(i) Mark and drill floors
(ii) Assemble and place floor mounted Products
(iii) Assemble distribution frames
(iv) Erect frames
(v) Align and junction frames
(vi) Install end guards and covers
(vii) Assemble and install fiber protection ductwork
(viii) Mount units and apparatus
(ix) Place batteries
Seller will also erect supporting hardware compatible with purchased
Products. Such activity includes but is not limited to:
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(i) Fabricate and install cable racks, bars, rod or stations as
identified in Statement of Work attached hereto
(ii) Erect ladder rack and ladders
(iii) Open and close existing cable holes and slots. Any new cable to
--------
facilitate Products designs the responsibility of the Customer
(iv) Fabricate and install framing aisle lighting conduit and fittings
In addition, Seller will place and designate connecting appliances
(MDF terminal blocks, DSX panels, etc.) provided with order. Such as but not
limited to:
(i) Stamp and/or affix aisle, shelf and unit designations
(ii) Mount and stencil terminal strips
Seller will also extend lighting, AC circuits and grounding to include
added Products if Products are ordered in Statement of Work. Such activities
include but are not limited to:
(i) Assemble and install lighting fixtures
(ii) Install switches and receptacles
(e) Cable and Wire For cable and wire to be installed by Seller, Seller
--------------
will run, tag, and secure metallic and fiber optic cables in an unobstructed
environment a maximum of one hundred (100) feet and power cables a maximum of
fifty (50) feet for the Products and apparatus (this specifically excludes
primary power cables, except on power equipment orders) identified in the
Product order or Statement of Work attached hereto. Seller will wire, attach,
terminate and affix all cable and wire including fiber optic cables supplied
with purchased Products. This may include but is not limited to mechanical wire
wrapping, soldering, crimping, plugging in of pre-terminated cables or polishing
of fiber optics for purchased Product. Seller will run alarm cabling, terminate
and test for the identified equipment including Customer provided environmental
scan points of fire detection and door entry which are less than fifty (50) feet
away and pre-terminated. Seller will verify all copper wiring placed by the
Seller for continuity to detect and analyze opens, shorts, reversals, and
incorrect wiring. Where pairs, quads or groupings are indicated, the grouping
will be verified. Seller will ensure the functionality and integrity of all
fiber directly associated with the installed Products and the fiber optic cables
installed by Seller within the building structure. Seller will "Dress" all
cabling and wiring and provide physical protection. Seller will properly protect
cables at all "break-off" locations, such as the vertical turns from the
overhead cable rack to bay frame work.
(f) Testing Specific test procedures are dependent upon the type of
-------
Product installed and are identified in the installation guide for the
particular Product. To ensure that technical design and performance criteria are
being met, testing shall be performed by Seller to obtain an evaluation of the
functional, operational, electrical and mechanical integrity of all Products
installed by Seller. In general the following tests are required for all Product
types furnished and installed by Seller: Seller's activities associated with
testing will include, but not be limited to the following:
(i) Turn on and verify power to installed Products
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(ii) Load product software and default parameters required to
conduct local unit loop-back testing to demarcation points.
(iii) Run and connect test specific cross-connects. Remove upon
completion of test(s).
(iv) Perform all unit and system-level tests to ensure Products pass
system and technician evoked diagnostics
(v) Test functionality of circuit packs required by job, at time of
original installation, within the installed unit. Testing of
spares is specifically excluded and will be included only for
an additional charge.
(vi) Test functionality and integrity of Seller installed local
alarms.
(vii) Resolve troubles encountered with Products purchased on order.
Refer to Customer any trouble found in Customer provided
equipment.
(viii) Maintain test logs and trouble reports and turn over to
Customer.
(g) Seller will perform the following Turnover procedures for all
installation Services provided by Seller:
(i) Inform Customer of completion of installation cycle.
(ii) Provide Customer with all drawings, invoices, logs and test
results per the contract.
(iii) Remove from Customer premises tools and scrap generated from
installation effort.
(iv) Issue job completion notice to Customer.
3.4 ACCEPTANCE
(a) All installation Services shall be considered complete and ready for
acceptance by Customer on Turnover. Upon completion of the installation, Seller
will submit to Customer a notice of completion or, if Customer has elected
advance-turnover of subsystems, a notice of completion of advance-turnover.
(b) Customer shall promptly make its final inspection of substantial
conformance with the Specifications and do everything necessary to expedite
acceptance of the job. Seller will promptly correct any defects for which it is
responsible. All work will be considered as fully accepted unless Seller
receives notification to the contrary within thirty (30) days after submitting
its notice of completion. Notwithstanding the foregoing, Customer shall be
deemed to have accepted any Products and Licensed Materials upon the placement
of the same into service.
3.5 WORK OR SERVICES PERFORMED BY OTHERS:
Work or services performed at the site by Customer or its other
vendors or contractors shall not interfere with Seller's performance of
Services. Seller shall have no responsibility or liability with respect to such
work or services performed by others. If Customer or its other vendors or
contractors fail to timely complete the site readiness or if Customer's or its
other vendors' or contractors' work interferes with Seller's performance, the
scheduled completion date of Seller's Services under this Agreement shall be
extended as necessary to compensate for such delay or interference.
***CONFIDENTIAL TREATMENT REQUESTED***
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4. ARTICLE IV
ENTIRE AGREEMENT:
4.1 ENTIRE AGREEMENT
The terms and conditions contained in this General Agreement supersede
all prior oral or written understandings between the parties with respect to the
subject matter hereof and constitute the entire agreement between the parties
with respect to such subject matter. The preprinted terms and conditions on
Customer's purchase orders or Seller's sales forms are deleted. The typed or
handwritten provisions of an order which are consistent with the terms of this
General Agreement along with the terms of this General Agreement shall
constitute the entire Agreement between the parties relating to said order.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives on the date(s) indicated.
PaeTec Communications, Inc. Lucent Technologies Inc.
By: /s/ Richard E. Ottalagana By: /s/ Gerard T. Cafaro
-------------------------------- ---------------------------------
Name: Richard Ottalagana Name: Gerard T. Cafaro
_______________________________ _______________________________
Title: Exec. Vice President Title: AVP
______________________________ ______________________________
Date: 8-11-98 Date: 8/17/98
_______________________________ _______________________________
***CONFIDENTIAL TREATMENT REQUESTED***
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EXHIBIT 1
STATEMENT OF WORK
IMPLEMENTATION SCHEDULE
The parties recognize that the following milestones must be met in
order to keep the project on schedule. Each party agrees to adhere to this
schedule and in the event a circumstance arises that will cause a delay the
party knowledgeable of the delay will notify the other party and the schedule
will be adjusted accordingly.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Milestone Stakeholder Expected Completion Date
------------------------------------------------------------------------------------------
<S> <C> <C>
Develop Implementation Plan
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Identify Project Site
------------------------------------------------------------------------------------------
Receive Customer Purchase
Order
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Site Ready
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Switch Software Questionnaire
Complete
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Installation and Testing
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Turnover/Acceptance
------------------------------------------------------------------------------------------
</TABLE>
If separately ordered by Customer the following will be included in the
implementation.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Milestone Stakeholder Expected Completion Date
------------------------------------------------------------------------------------------
<S> <C> <C>
------------------------------------------------------------------------------------------
Network Planning
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Cutover
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Monitor
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Maintenance
------------------------------------------------------------------------------------------
</TABLE>
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EXHIBIT 2
INVOICE NUMBER___________________
INVOICE DATE_____________________
[LOGO OF LUCENT TECHNOLOGIES] ACCOUNT NUMBER___________________
PAGE NUMBER______________________
SHIP TO: BILL TO:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
CUSTOMER P.O. # LUC REFERENCE # CUSTOMER CODE TERMS CONTRACT # FOB
---------------------------------------------------------------------------------------------------------
ITEM LUCENT BILL OF QUANTITY QUANTITY
NO. ORDER SHIP DATE SHIP METH LADING # PART NUMBER/DESCRIPTION ORDERED SHIPPED UNIT PRICE PM TOTAL PRICE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 J7888KK 2/2/00 5ESS Material 1 $[_______] E $[_______]
2 J7888KK 2/2/00 Spares 1 $[_______] E $[_______]
3 J7888KK 2/2/00 Engineering $[_______] $[_______]
4 J7888KK 2/2/00 Installation $[_______] $[_______]
5 J7888KK 2/2/00 Transportation $[_______] $[_______]
------------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL $[_______]
----------------------------- ____________
QUESTIONS ABOUT YOUR ACCOUNT? MAKE CHECK PAYABLE TO: INVOICES ARE PAYABLE LESS ADVANCE PAYMENT $[_______]
____________
CALL: Lucent Technologies Inc. IN U.S. CURRENCY AND TRANSPORTATION $[_______]
____________
P.O. Box 100317 OVERDUE AMOUNT SHALL TAX
____________
REMARKS Atlanta, GA 30384-0317 BEAR INTEREST AT A REASONABLE TOTAL DUE $[_______]
Attn: Accounts Receivable RATE OR IS SUBJECT TO LATE
-----------------------------
PAYMENT CHARGES PER AGREEMENT
</TABLE>
***CONFIDENTIAL TREATMENT REQUESTED***
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EXHIBIT 10.28 (Continued)
LNM980824RMPT
ADDENDUM NUMBER ONE
5ESS(R)-2000 SWITCH AND TRANSMISSION SYSTEMS
PURCHASE AGREEMENT
BETWEEN PAETEC COMMUNICATIONS, INC.,
AND LUCENT TECHNOLOGIES INC.
This 5ESS(R)-2000 Switch and Transmission Systems Product Purchase Agreement
(hereinafter "Addendum") is made effective as of the Sept. 16 1998 ("Effective
Date"), by and between PaeTec Communications, Inc., a Delaware corporation with
offices located at 290 Woodcliff Drive, Fairport, NY 14450 (hereinafter
"Customer"), and Lucent Technologies Inc., a Delaware corporation, acting
through its Global Service Provider Group (formerly Network Systems Group), with
offices located at 600 Mountain Avenue, Murray Hill, New Jersey 07974,
(hereinafter "Seller").
WHEREAS, PaeTec Communications, Inc. and Seller have entered into a certain
General Agreement, Agreement #LNM980716RMPT, (the "General Agreement") effective
June 17, 1998, setting forth the terms and conditions pursuant to which Seller
agreed to supply and Customer agreed to procure certain Lucent Products,
Licensed Materials or Services (as such terms are defined therein); and
WHEREAS, Customer and Seller desire to establish in this Addendum discounts, and
additional terms and conditions applicable to Customer's purchase and/or license
for use, as appropriate, of certain of Seller's 5ESS(R)-2000 Switching Systems,
Transmission Systems and related Licensed Materials and Services and
Communications Software Products during the term of this Addendum, as set forth
below,
NOW THEREFORE, in consideration of the mutual promises hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
A-1.1 SCOPE OF ADDENDUM
Notwithstanding anything to the contrary contained within the General Agreement,
this Addendum shall govern any purchase order placed by Customer during the Term
for Seller's 5ESS-2000 Switching Systems, Transmission Systems, Power Systems,
Communications Software Product, and Network Product Group Products and related
Licensed Materials and Services. This Addendum is issued pursuant to and
incorporates the non-conflicting terms and conditions of the General Agreement.
In the event of any conflict or inconsistency between the terms of this Addendum
and the terms of the General Agreement, the terms of this Addendum shall
prevail.
The terms and conditions of this Addendum shall apply to all transactions in
which Seller furnishes Products, Licensed Materials or Services provided by its
Global Service Provider Group to Customer, or to any Affiliate or authorized
Associated Entity (as hereinafter defined) of Customer, it being the intent and
understanding between the parties that said Affiliates or authorized Associated
Entity shall be authorized to procure Products, Licensed Materials and Services
from Seller under and pursuant to the terms and conditions of the Addendum,
provided, however that the Affiliates or authorized
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Associated Entity shall each additionally be subject to meeting Seller's credit
requirements prior to the placement of any orders. In addition, said Affiliates
or authorized Associated Entities shall not include competitors of Seller
engaged in the business of manufacturing systems comparable to those offered to
Customer hereunder.
By virtue of placing orders with Seller or using any Products, Licensed
Materials or Services provided hereunder, Customer, or any of the Affiliates or
authorized Associated Entities agrees to be bound to the obligations and
limitations set forth in this General Agreement respecting such Products,
Licensed Materials or Services.
All Products, Licensed Materials, or Services furnished by Seller to Customer
pursuant to this General Agreement shall be for Customer, Customer's Affiliates,
or authorized Associated Entity's own internal use only and not for resale,
unless Customer (1) resells or transfers internally to its Affiliated Companies
or authorized Associated Entity for their own use, or (2) unless authorized
representatives of both parties expressly agree in writing that the terms and
conditions of the General Agreement, modified where applicable, shall apply to
resale transactions.
A-1.2 DEFINITIONS
For the purpose of this Addendum, the following definitions will apply:
a) "5ESS-2000 Switching Systems Products" means the 5ESS-2000 Switch, Growth
and related Licensed Materials including, without limitation, Base
Software.
b) "5ESS-2000 Switch" means any 5ESS-2000 Host Switch system (including the
5ESS-2000 Compact Digital Exchange ("CDX") and 5ESS-2000 Very Compact
Digital Exchange ("VCDX")). With the exception of the VCDX, a 5ESS-2000
Switch contains at a minimum, an Administrative Module (AM), Communications
Module (CM), and at least one (1) switch module. Any such Switch can act as
a host for Optically Remote Modules ("ORMs"), Remote Switch Modules
("RSMs") and/or Extended Switch Modules ("EXMs"). The VCDX contains a Sun
Workstation and one (1) Switch Module.
c) "Base Software" means the operating system and related Software, and
operations, administration and maintenance features and functions, for all
Seller's switch-based platforms.
d) "Growth" means any 5ESS-2000 hardware or software not purchased with the
associated 5ESS-2000 Switch required to support the expansion of such 5ESS-
2000 Switch, which may include without limitation any ORMs, RSMs, or EXMs.
e) "List Price" means Seller's list price in effect at the time of order
placement.
f) "Switch Module/Switch Module 2000 (SM2000)" means a Module Control/Time
Slot Interchange Unit along with a number of Peripheral units and related
Software added to an embedded 5ESS-2000 Switch or to an existing RSM site.
g) "Peripherals" means hardware and/or Software extensions added subsequent to
the installation of the initial 5ESS-2000 Switch, or Switch Module/Switch
Module 2000.
h) "Transmission Systems Products" means a DDM-2000 OC-1 Fiber Reach
Multiplexer, DDM-2000 OC-3 Multiplexer, DDM-2000 OC-12 Multiplexer, SLC(R)-
2000 Access System, SLC(R)-2000 MSDT, SLC(R)-Series 5 Carrier System, FT-
2000 OC-48 Lightwave, Echo Canceller, DACS IV -2000,
***CONFIDENTIAL TREATMENT REQUESTED***
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DACS II, Millennia ADM 155C, AnyMedia Fast, SLC Connect Reach, and SLC Line
Reach and any related Licensed Materials and any other Transmission Systems
Products as may be added based upon the mutual written agreement of both
parties prior to order placement.
i) "Communications Software Products" for the purpose of this Addendum means
Seller's NOC1, BILLDATS and ConnectVu products and any other Communications
Software Products as may be added based upon the mutual written agreement
of both parties.
j) "Network Product Group Products" means Seller's optical
products/connectivity solutions and network power products furnished by
Seller's Network Products Group.
k) "Private Branch Exchange (PBX) Systems Products" means Seller's PBX Systems
Products (e.g. DEFINITY(R)) and voice mail products furnished by Seller's
Business Communications Systems Group.
A-1.3 TERM OF ADDENDUM
This Addendum shall be coterminous with the General Agreement, unless earlier
terminated as provided by this Addendum or the General Agreement, and shall
remain in effect for so long as the General Agreement remains in effect.
A-1.4 STATEMENTS OF WORK
At Customer's request, Seller will provide pricing on a firm price quote basis
for Seller's Communications Software Products. Such pricing shall be pursuant
to separate Statements of Work to be developed and mutually agreed upon by both
parties. All deliverables and their due dates related to such Communications
Software Products shall be set forth, along with all fees, costs and related
expenses in the Statements of Work. Executed Statements of Work and any changes
thereto shall be in writing and made part of this Addendum.
A-1.5 ASSOCIATED ENTITY ORDERS
Subject to Seller's prior written approval, Customer's Associated Entities may
place orders pursuant to the terms and conditions of the General Agreement.
Associated Entity as used herein shall mean any corporation, partnership or
venture in which Customer has a minority ownership interest, or any other entity
as may be added based upon the mutual written agreement of both parties. Star
Telecommunications Inc. maybe added based upon the mutual written agreement of
both parties. Such corporation shall be deemed to be an Associated Entity of
such Customer only as long as such ownership interest exists.
Seller will review Customer's prospective Associated Entities submitted by
Customer in accordance with, but not limited to, Seller's then-current credit
approval process. Seller agrees not to unreasonably withhold approval of such
Associated Entities. Seller also agrees that the 5ESS-2000 Switch paid purchases
of an Affiliate or Associated Entity received by Seller during the Term shall
count towards the satisfaction of the Purchase Commitment, set forth in the
Section entitled "Customer's Purchase Commitment."
A-1.6 TERMS OF DISCOUNT
Any purchase orders placed pursuant to this Addendum shall reference Contract
Number LNM980824RMPT to qualify for the discounts incorporated herein. During
the Term, all discounts shown in this Addendum are applicable to all Seller's
Products, and related Licensed Materials listed herein only and are not
applicable to related Services such as engineering and installation. Such
discounts shall be
***CONFIDENTIAL TREATMENT REQUESTED***
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applied to Seller's List Price. Discounts set forth in this Addendum will apply
to all purchase orders requiring Seller's then-current standard delivery
interval.
A-1.7 CUSTOMER'S PURCHASE COMMITMENT
(a) In consideration for the discounts, allowances, and incentives set forth in
this Addendum, Customer agrees to directly procure from Seller a minimum of one
hundred million US dollars ($100,000,000) of Contributing Purchases (as defined
below) during the Term (the "Purchase Commitment"). In satisfaction of the
Purchase Commitment, Customer shall procure at least sixteen (16) 5ESS-2000
Switches during the Term.
(b) For purposes of this Section, Contributing Purchases shall include, to the
extent not more specifically stated in subsection (a) above, all of the dollar
amounts actually received by Seller from Customer for (a) Seller's 5ESS-2000
Switching System Products, Transmission Systems Products, Network Product Group
Products, Communications Software Products, Power Systems Products and related
Licensed Materials and Services and (b) payments received by Seller's Business
Communications Systems (BCS) Group from Customer for Seller's PBX purchases and
Seller's voice mail purchases which may be procured by Customer under a separate
agreement to be negotiated by Seller's BCS Group and Customer.
(c) If the Customer fails to meet the Purchase Commitment set forth above, then
in addition to any other rights and remedies available to Seller under this
Agreement, at law, in equity, or otherwise, then Seller may invoice and Customer
shall pay, pursuant to the terms of this Agreement, an additional price premium
to be calculated as follows:
If Customer procures at least [***] ([***]) 5ESS-2000 Switches but less than
[***] ([***]) 5ESS-2000 Switches during the Term and Customer's Contributing
Purchases total between [***] ([***]) and [***] ([***]) US dollars then,
Customer shall pay an additional price premium equal to [***] ([***]) percent of
the value of Contributing Purchases; or
If Customer procures at least [***] ([***]) but less than [***] ([***]) 5ESS-
2000 Switches during the Term and Customer's Contributing Purchases total
between [***] ([***]) and [***] ([***]) US dollars then, Customer shall pay an
additional price premium equal to [***] ([***]) percent of the value of the
Contributing Purchases; or
If Customer procures at least [***] ([***]) but less than [***] ([***]) 5ESS-
2000 Switches during the Term and Customer's Contributing Purchases total
between [***] ([***]) and [***] ([***]) US dollars then, Customer shall pay an
additional price premium equal to [***] ([***]) percent of the value of the
Contributing Purchases; or
If Customer procures at least [***] ([***]) but less than [***] ([***]) 5ESS-
2000 Switches during the Term and Customer's Contributing Purchases total
between [***] ([***]) and [***] ([***]) US dollars then, Customer shall pay an
additional price premium equal to [***] ([***]) percent of the of the value of
the Contributing Purchases; or
If Customer procures up to [***] ([***]) 5ESS-2000 Switches during the Term and
Customer's Contributing Purchases total less than [***] ([***]) US dollars then,
Customer shall pay an additional price premium equal to [***] ([***]) percent of
the of the of the value of the Contributing Purchases.
***CONFIDENTIAL TREATMENT REQUESTED***
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The provisions of this Section entitled, "Customer's Purchase Commitment," shall
survive the expiration or earlier termination of this Agreement.
A-1.8 SERVICE CONTROL POINT (SCP) MODEL PRICING
In consideration for Customer's Purchase Commitment as set forth in the Section
entitled "Customer's Purchase Commitment", Seller will provide Customer with
the following pricing for Seller's Service Control Point (SCP) Model purchased
directly from Seller during the Term. Such pricing shall be based upon the SCP
Model configuration set forth in Appendix C attached hereto and made a part of
this Addendum.
SERVICE CONTROL POINT MODEL PRICING**
<TABLE>
<CAPTION>
-------------------------------------------------------------------
DESCRIPTION Total Price
-------------------------------------------------------------------
<S> <C>
SCP Hardware and Software $[***]
-------------------------------------------------------------------
Service Management System (SMS) RTU & Hardware [***]
-------------------------------------------------------------------
Flexible Network Routing 1 & 2 service [***]
-------------------------------------------------------------------
Engineering [***]
-------------------------------------------------------------------
Installation [***]
-------------------------------------------------------------------
Advance Toll Free RTU Fee [***]
-------------------------------------------------------------------
Total Gross Price [***]
-------------------------------------------------------------------
Less: Discount [***]*
-------------------------------------------------------------------
Net Total Price $[***]
-------------------------------------------------------------------
</TABLE>
*The one time incentive of [***]([***]) US dollars is contingent upon Customer
purchasing the SCP Model configuration shown above.
**Pricing is valid only for [***] ([***]) days from [***].
Additional SCP purchases during the Term shall be based on a discount of [***]
per cent ([***]%) off the then current List Price. Any deviations from such
configuration and the pricing related to such deviation shall be mutually agreed
to in writing between the parties prior to order placement and shall be priced
on a firm price quote basis.
A-1.8.1 SERVICE CONTROL POINT (SCP) GROWTH PRICING
In consideration for Customer's Purchase Commitment as set forth in the Section
entitled "Customer's Purchase Commitment," Seller will further provide Customer
with the following growth pricing to [***] the SS7 linkage of the SCP from [***]
([***]) to [***] ([***]) SS7 links for [***] ([***]) US dollars. This pricing is
based on a [***] per cent ([***]%) discount off the then current List Price.
Engineering and Installation costs are not included in this price.
Following are the components of the $[***] quote for each SCP:
([***])[***]
([***])[***]
([***])[***]
([***])[***]
[***]
***CONFIDENTIAL TREATMENT REQUESTED***
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A-1.9 PRICING PLAN FOR POWER PRODUCTS
In consideration for Customer's Purchase Commitment as set forth in the Section
entitled "Customer's Purchase Commitment," Seller will provide the following
discounts off the List Price for all purchases of Seller's Power products made
by Customer directly from Seller during the Term.
Manufactured Products [***]%
Purchased Products ([***]) [***]%
A-1.10 ANNUAL FORECAST
Within thirty (30) days of the execution date of this Addendum, Customer will
submit in writing a quarterly forecast of its planned purchases of Seller's
5ESS-2000 Switching and Transmission Systems Products and/or related Licensed
Materials and Services. Such forecasts shall include type(s), quantities,
locations and other information as mutually agreed to by the parties. The
forecasts will be updated quarterly, and shall provide a twelve (12) month
rolling view of all prospective purchases by month. Customer will submit such
forecasts to Seller's Account Manager at the following address:
Greg Spanellis, Account Manager
Lucent Technologies Inc.
Room 4K508
101 Crawfords Corner Road
Holmdel, NJ 07733 U S
Customer will designate upon execution of this Addendum an authorized
representative to coordinate the ordering and distribution of Products and
related Licensed Materials and to interface with Seller's Account Manager as
needed.
A-1.11 PRICING PLAN FOR 5ESS(R)-2000 PRODUCTS
In consideration for Customer's Purchase Commitment as set forth in the Section
"Customer's Purchase Commitment" Seller will provide the following discounts as
described herein off the List Price for all purchases of the following products
made by Customer directly from Seller during the Term:
A-1.11.1 DISCOUNT SCHEDULE FOR 5ESS(R)-2000 SWITCH PRODUCTS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
PRODUCT TYPE INITIAL SWITCH DISCOUNTS FOR GROWTH DISCOUNTS FOR
DISCOUNTS SM-2000 SWITCH MODULES PERIPHERAL GROWTH
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5ESS(R)-2000 Switch [***]% [***]%* [***]
-------------------------------------------------------------------------------------------------------
RSM/ORM/EXM [***]% [***] [***]
-------------------------------------------------------------------------------------------------------
</TABLE>
*This discount shall apply to SM-2000 Growth purchases only. The [***] percent
([***]) discount shall also apply to Peripherals and circuit packs contained
within such SM-2000 Module and ordered as part of the Growth purchase order.
Pricing for all other Peripheral orders shall be calculated using the [***]
percent ([***]) discount shown above.
***CONFIDENTIAL TREATMENT REQUESTED***
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A-1.11.2 GROWTH DISCOUNTS FOR CUSTOMER DESIGNATED PERIODS
In addition to the above discounts, for each 5ESS(R)-2000 Switch purchased
hereunder, a growth discount of [***] percent ([***]%) shall apply to orders for
subsequent Growth and Peripheral Growth of said Switch received during any [***]
([***]) Customer designated [***] ([***]) [***] periods during the Term. Orders
received for Growth and Peripheral Growth outside of such designated periods
shall be priced in accordance with the discounts contained within the Section
entitled, "Discount Schedule for 5ESS(R)-Switch Products."
For each RSM/ORM/EXM purchased hereunder, a growth Discount of [***] percent
([***]%) shall apply to orders for subsequent Growth and Peripheral Growth of
said RSM/ORM/EXM Switch received during any [***] ([***]) Customer designated
[***] ([***])[***] periods during the Term. Orders for Growth and Peripheral
Growth received outside of such designated periods shall be priced in accordance
with the discounts contained within the Section entitled, "Discount Schedule for
5ESS(R)-Switch Products."
The [***] ([***]) [***] ([***]) [***] periods referenced herein must be
designated in writing by the Customer at the time of order placement and the
commencement of such periods can only begin after Turnover of the applicable
5ESS-2000 Switch.
A-1.11.3 PRICING PLAN FOR 5ESS-2000 SWITCH SOFTWARE RELEASES
For purposes of this section, the fees for Base Software releases shall mean the
Software RTU and Office Data Assembler ("ODA") fees. The purchase by Customer
of a 5ESS-2000 Switch during the Term includes, a license (subject to the
licensing provisions of the General Agreement) to use the then-current Base
Software release. In addition, if Customer licenses each consecutive annual
generic Base Software release (after the generic release in effect at the time
of each 5ESS-2000 Switch installation), then the RTU fees for each subsequent
generic Base Software release will be fixed at [***] dollars ($[***]) per
release for the first [***] ([***]) [***] following the in-service date
(Cutover) of each 5ESS-2000 Switch. This [***] dollars ($[***]) RTU fee for the
5ESS-2000 Switch includes the generic RTU fee and Office Data Assembler
Processing but does not include any additional hardware, engineering,
installation or optional RTU feature fees. Customer will be responsible for all
engineering charges associated with each Base Software release furnished by
Seller under this Addendum.
Base Software releases shall be available to Customer in accordance with
Seller's published announcement stating when customers can order Base Software
subject, however, to Seller's then-current availability process and Seller's
standard order intervals.
A-1.11.4 5ESS-2000 SWITCH TRAINING INCENTIVE
In consideration of Customer's Purchase Commitment and upon Seller's receipt of
a purchase order from Customer for the first 5ESS-2000 Switch, Seller will make
available to Customer up to [***] ([***]) tuition-free training days upon
execution and placement for the first switch purchase orders. The use of
training day as used herein shall mean one student day per training class.
Seller will also award to Customer [***] ([***]) additional tuition free
training days for each subsequent 5ESS-2000 Switch beyond the first switch
procured from Seller. Seller will make available to Customer [***] ([***])
additional training days for
***CONFIDENTIAL TREATMENT REQUESTED***
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RSMs, ORMs, and EXMs. Training days earned by Customer for each 5ESS-2000 Switch
shall be used within [***] ([***]) [***] prior to Turnover date or within [***]
([***]) [***] after the Turnover date of such 5ESS-2000 Switch. Customer is
responsible for all associated travel and living expenses for Customer
personnel. Seller, at its option, shall offer training regionally at Seller's
Training Centers. While Seller recommends core courses from its Customer
Training Catalog, Customer may choose from any of Seller's 5ESS-2000 Switch
related courses.
A-1.11.5 INVENTORY CONTROL PROVISIONS FOR 5ESS-2000 SWITCHES
Seller will offer the Spares Exchange Service for 5ESS Switching Equipment (SES-
5) to address Customer's 5ESS-2000 System inventory control requirements. SES-5
will enhance equipment maintenance by facilitating the exchange of defective
circuit packs for new or remanufactured devices in a timely manner. This
service operates on a twenty-four-hour, seven-day-week basis, under the
following delivery services options:
<TABLE>
<S> <C>
1. Normal Delivery Interval (2 to 7 days) $[***] per plug-in
2. Emergency Delivery Interval (24 hours) $[***] per plug-in
3. Critical Delivery Interval (less than 24 hours) $[***] per plug-in (minimum $[***] per order)
</TABLE>
SES-5 will exchange Seller-manufactured material required to support a 5ESS-2000
Switch and the embedded 3B21 Computer for "readily returnable" material (e.g.,
circuit packs and plug-ins, but not disk or tape drives). Customer shall not be
charged for the "readily returnable" material provided by Seller through SES-5
if the material for which it is exchanged is determined by Seller to be under
warranty. If Seller determines such exchanged material to be out of warranty,
Customer will be billed and shall pay for the material furnished by Seller
through SES-5 based on the current SES-5 catalog price.
A-1.11.6 TECHNICAL SUPPORT OF SELLER'S SWITCH AND TRANSMISSION SYSTEMS
PRODUCTS AND LICENSED MATERIALS
Seller will, in addition to its repair obligations under the "Warranty" clause
of the General Agreement, make available for purchase by Customer technical
support for Seller's Switch and Transmission Systems Products and related
Licensed Materials. Such technical support shall be provided under mutually
agreed upon, separate technical support agreements entered into by the parties
or on a per-problem basis at Seller's prevailing rates.
Seller will, in addition to the technical support specified above, make
available for purchase by Customer post-warranty technical support. Such post-
warranty technical support shall be provided under mutually agreed upon,
separate post-warranty service contracts entered into by the parties or on a
per-problem basis at Seller's prevailing rates. Separately from such warranty or
post-warranty technical support services, Seller may offer Services designed to
enhance the operating capabilities of Customer's network or system on a billable
basis.
A-1.11.7 FIVE FACILITY ACCESS INCENTIVE
In consideration of the Purchase Commitment set forth in the Section entitled,
"Customer's Purchase Commitment," Seller will provide Customer access to
Seller's Feature Interactive Verification Environment (FIVE) facility in Lisle,
Illinois to enable Customer to test the following to the extent relating to the
5ESS-2000 Switching Systems Products purchased under this Addendum: new features
of Seller's 5ESS-2000 Switching Systems Products, verification of new
applications and simulation of call scenarios. To the extent relating to
Seller's Switching and Transmission Systems Products
***CONFIDENTIAL TREATMENT REQUESTED***
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purchased under this Addendum, Seller may use the FIVE facility on a billable
basis to integrate other vendor's equipment for Customer-specific applications.
Such access shall be provided on a reservation basis only. Customer agrees to be
reasonable in its requests for reservations and will provide reasonable notice
of any cancellation.
A-1.12 5ESS-2000 SWITCH DOCUMENTATION
In consideration of the Purchase Commitment set forth in the Section entitled
"Customer's Purchase Commitment," and upon the receipt of a purchase order for
Customer's 5ESS-2000 Switch, Seller will make available to Customer at no charge
two (2) copies of CD ROM documentation. In addition, Seller will provide to
Customer at no charge one (1) copy each of the most recent text and drawing
CD-ROM or one (1) login to the 5ESS(R) Switch Documentation World Wide Web
Internet site for each new host/standalone Switch site. No documentation will be
provided to RSMs (Remote Site Modules) or ORMs (Optical Remote Modules).
In addition, Seller will provide updates at [***] to the host/standalone site
for a period of [***] ([***]) [***] following switch Turnover. After the initial
[***] ([***]) [***] update period, Customer may purchase an update subscription
at the standard subscription rate.
A-1.13 PRICING PLAN FOR TRANSMISSION SYSTEMS PRODUCTS
Seller will provide the following discounts off the List Price for all purchases
of the following products made by Customer directly from Seller during the Term.
TRANSMISSION SYSTEMS PRODUCTS DISCOUNT SCHEDULE
------------------------------------------------------------------------
TRANSMISSION SYSTEMS PRODUCTS* DISCOUNT
------------------------------------------------------------------------
DDM-2000
------------------------------------------------------------------------
DDM-2000 OC-3 BAYS/SHELVES [***]%
------------------------------------------------------------------------
DDM-2000 OC-3 PLUGS-INS [***]%
------------------------------------------------------------------------
DDM-2000 OC-3 SOFTWARE [***]%
------------------------------------------------------------------------
DDM-2000 OC-12 BAYS/SHELVES [***]%
------------------------------------------------------------------------
DDM-2000 OC-12 PLUG-INS [***]%
------------------------------------------------------------------------
DDM-2000 OC-12 SOFTWARE [***]%
------------------------------------------------------------------------
DDM-2000 FIBEREACH WIDEBAND SHELF [***]%
------------------------------------------------------------------------
DDM-2000 FIBEREACH OC-1 PLUGS-INS [***]%
------------------------------------------------------------------------
DDM- 2000 OC-3 & OC-12 CABLES
------------------------------------------------------------------------
FT-2000 [***]%
------------------------------------------------------------------------
FT-2000 OC-48 BAYS/SHELVES/COMMON PLUG-INS [***]%
------------------------------------------------------------------------
FT-2000 OC-48 HIGH SPEED OPTICS & LOW SPEED PLUG-INS [***]%
------------------------------------------------------------------------
FT-2000 OC-48 SOFTWARE [***]%
------------------------------------------------------------------------
FT-2000 CABLES [***]%
------------------------------------------------------------------------
SLC-2000 CARRIER SYSTEM:
------------------------------------------------------------------------
SLC-2000 BAYS/SHELVES [***]%
------------------------------------------------------------------------
SLC-2000 COMMONS [***]%
------------------------------------------------------------------------
SLC-2000 (POTS/SPOTS) [***]%
------------------------------------------------------------------------
SLC-2000 (SPECIAL CHANNEL UNITS) [***]%
------------------------------------------------------------------------
***CONFIDENTIAL TREATMENT REQUESTED***
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------------------------------------------------------------------------
TRANSMISSION SYSTEMS PRODUCTS* DISCOUNT
------------------------------------------------------------------------
SLC-2000 SOFTWARE [***]%
------------------------------------------------------------------------
ISDN CHANNEL UNITS [***]%
------------------------------------------------------------------------
SLC(R) SERIES 5 CARRIER SYSTEM:
------------------------------------------------------------------------
SLC SERIES 5 BAYS/SHELVES [***]%
------------------------------------------------------------------------
SLC SERIES 5 COMMONS [***]%
------------------------------------------------------------------------
SLC SERIES 5 (POTS/SPOTS) [***]%
------------------------------------------------------------------------
SLC SERIES 5 (SPECIAL CHANNEL UNITS) [***]%
------------------------------------------------------------------------
ISDN CHANNEL UNITS [***]%
------------------------------------------------------------------------
FIBEREACH NARROW BAND SYSTEM
------------------------------------------------------------------------
NARROW BAND SHELF [***]%
------------------------------------------------------------------------
NARROW BAND COMMONS [***]%
------------------------------------------------------------------------
NARROW BAND (POTS/SPOTS) [***]%
------------------------------------------------------------------------
NARROW BAND (SPECIAL CHANNEL UNITS) [***]%
------------------------------------------------------------------------
FIBERREACH CABLES [***]%
------------------------------------------------------------------------
MULTI-SERVICES DISTANT TERMINAL (MSDT)
------------------------------------------------------------------------
MSDT TERMINAL [***]%
------------------------------------------------------------------------
MSDT PLUG-INS [***]%
------------------------------------------------------------------------
DACS IV-2000 [***]%
------------------------------------------------------------------------
DACS III-2000 [***]%
------------------------------------------------------------------------
DSX-1 [***]%
------------------------------------------------------------------------
DSX-3 [***]%
------------------------------------------------------------------------
ANYMEDIA FAST 303/08
------------------------------------------------------------------------
ANYMEDIA SHELF/COMMONS [***]%
------------------------------------------------------------------------
POTS ONLY APPLICATION PACK [***]%
------------------------------------------------------------------------
PROGRAMMABLE APPLICATION PACK [***]%
------------------------------------------------------------------------
ISDN APPLICATION PACK [***]%
------------------------------------------------------------------------
ADSL APPLICATION PACK [***]%
------------------------------------------------------------------------
SLC CONNECT REACH
------------------------------------------------------------------------
HARDWARE [***]%
------------------------------------------------------------------------
POTS CHANNEL UNITS [***]%
------------------------------------------------------------------------
DATA CHANNEL UNITS [***]%
------------------------------------------------------------------------
SERVER CARD [***]%
------------------------------------------------------------------------
SLC LINE REACH
------------------------------------------------------------------------
SHELF [***]%
------------------------------------------------------------------------
COMMONS [***]%
------------------------------------------------------------------------
* This does not include [***]
The applicable merchandise class for Seller's Transmission Systems Products and
related Licensed Materials shall determine the applicable discount level.
***CONFIDENTIAL TREATMENT REQUESTED***
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A-1.14 TRANSMISSION SYSTEMS PRODUCTS TRAINING
For each [***] dollars ($[***]) in total paid purchases of Seller's Transmission
Systems Products, Seller will provide one (1) tuition-free training day. The use
of training day as used herein shall mean one student day per training class.
Training days earned by Customer for Transmission Systems Products shall be used
within [***] ([***]) [***] after the Turnover date for such Transmission Systems
Products. Customer is responsible for all associated travel and living expenses
for Customer personnel. Seller, at its option, shall offer training regionally
at Seller's Training Centers. While Seller recommends core courses from its
Customer Training Catalog, Customer may choose from any of Seller's Transmission
Systems Product related courses.
A-1.15 COMMUNICATIONS SOFTWARE PRODUCTS CREDIT
In consideration for the Purchase Commitment set forth in the Section entitled,
"Customer's Purchase Commitment," Seller will provide Customer with a credit
equal to [***] dollars ($[***]) to be applied towards Customer's first purchase
order for Seller's Communications Software Products (CSP) where such order shall
be for at least [***] ([***]) of the following CSP Products: BILLDATS, NOC-1,
ConnectVu. As noted within the Section, entitled "Statements of Work," the
Statements of Work related to these Communication Software Products shall be
developed within [***] ([***])[***] of the execution of this Agreement or as
mutually agreed to between the parties .
A-1.15.1 TERMS OF PAYMENT INCENTIVE FOR COMMUNICATIONS SOFTWARE
PRODUCTS
If Customer's first purchase order for Seller's Communications Software Products
(CSP) is for at least [***] ([***]) of the [***] ([***]) or for all [***]
([***]) of the CSP Products described in the above Section entitled
Communications Software Products Credit and such order is received within [***]
([***])[***] of the execution of this Agreement then, Seller shall provide the
following payment and invoicing terms for such order as follows:
Customer shall in addition to receiving the [***] ([***]) dollar credit pay
[***] of the remaining amount for the CSP Software at the time of order
placement and the balance of the order no later than [***] from the initial
invoice date.
A-1.16 CHECKMATE MARKETING & BUSINESS SOLUTIONS MARKETING
DEVELOPMENT FUND ALLOWANCE
In consideration for the Purchase Commitment set forth in the Section entitled,
"Customer's Purchase Commitment", Seller agrees to provide Customer with
following incentives related to the Checkmate Marketing and Business Solutions
Market Development Fund (hereinafter "MDF") described in Appendix A, entitled
"Checkmate and Marketing & Business Solutions Marketing Development Guidelines"
attached hereto and made part of this Agreement:
(a) Upon the execution of this Agreement, Seller agrees to provide [***] to
Customer the
***CONFIDENTIAL TREATMENT REQUESTED***
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Checkmate element services listed in Appendix B. The total value of these
Checkmate Services equals [***] dollars ($[***]).
(b) Seller also agrees to create a MDF as described in Appendix A into which
Seller will allocate up to [***]% of Customer's paid purchases of Seller's
5ESS-2000 Products and related Licensed Materials (excludes engineering,
installation, and related Services) and Transmission Systems Products
during the Term of this Addendum.
(c) Upon the Effective Date, Seller shall provide Customer with a credit
allocation into the MDF equal to [***] ($[***]) as an advance against the
credits to be earned by Customer under the Section A 1.13 (b). Upon such
advance, no further credit allocations shall be earned or accrued by
Customer until its paid purchases to Seller exceeds [***] dollars ($[***])
at which time the advance shall be satisfied.
Any amounts allocated to the MDF hereunder shall be subject in all respects to
and may be utilized by Customer only in accordance with the MDF Guidelines
attached hereto and must be used prior to the Term expiration or be forfeited.
A-1.17 [***]
[***].
[***].
[***].
[***].
[***].
A-1.18 INVOICES AND TERMS OF PAYMENT
For Customer's first order for the first switch site only and until an adequate
credit line has been established, all Customer's purchase orders will be subject
to the invoices and payment terms shown below. If a sufficient line of credit
has not been established prior to the shipment of the second order, shipment of
such order and all subsequent orders will be pursuant to the invoice and payment
terms Section 1.9 of the General Agreement. Further, if at any time Customer
does not meet the Net 30 payment requirements specified below, the invoices and
terms of payment clause specified in Section 1.9 in the General Agreement, will
apply for subsequent orders.
(a) Except as otherwise specified above, for orders in which an adequate line
of credit has been established, Products and Licensed Materials (including
transportation charges and taxes, if applicable) will be billed by Seller when
shipped, or as soon thereafter as practicable. A sample invoice is provided in
Exhibit 2 of the General Agreement for informational purposes only. Engineering
will be billed with the initial shipment of Product(s). Installation will be
billed as performed or as soon thereafter as practical. Payment in full for all
invoiced or billed amounts is due for receipt by Seller within thirty (30) days
of the invoice or bill date. All payments other than EFT payments described in
subsection (c) below shall be forwarded to Seller at the following address:
If by regular mail: Lucent Technologies Inc.
P.O. Box 100317
Atlanta, GA 30384-0317
Attn: Accounts Receivable
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Proprietary
12
<PAGE>
LNM980824RMPT
If by overnight courier: NationsBank
Account Number 143049062
6000 Feldwood Road
P.O. Box 100317
College Park, GA 30349
(b) Bill and Hold Products will be invoiced by Seller upon the earlier of (i)
completion of assembly at Seller's facility or (ii) upon stocking at Customer's
designated location. Such invoice will serve as Seller's notification that Bill
and Hold Products are complete and ready to be released by Customer for final
shipment. The date of the invoice, which shall be the stocking date, shall be
deemed the warranty start date.
(c) Customer shall have the right to pay any amounts due Seller hereunder using
Electronic Funds Transfer ("EFT"). Seller reserves the right to cancel the
Customer's right to pay using EFT with thirty (30) days notice to the Customer.
(d) EFT payments by Customer shall be made to the following account of Seller
or such other account as is subsequently designated by Seller in writing and,
concurrent with the EFT payment, Customer shall fax a copy of the [federal wire
instructions/remittal] to Seller's Manager Cash Operations at 770-750-4288.
Customer will EFT funds to the following location:
Chase Manhattan Bank
New York, New York
Lucent Technologies Inc.
ACCT. 910144-9099
ABA 021000021
(e) If Customer fails to pay any invoiced amount when due, the invoiced amount
will be subject to a late payment charge at the rate of [***] percent
([***]%) per month, or portion thereof, of the amount due (but not to exceed the
maximum lawful rate). Customer agrees to pay Seller's attorneys' fees and other
costs incurred by Seller in the collection of any amounts invoiced hereunder.
(f) Customer agrees to review invoice upon receipt and if necessary, initiate
billing inquires within ten (10) days of receipt of invoice. Inquiries can be
initiated in writing or by telephone and shall be directed to the address or
telephone number identified on the invoice.
ENTIRE AGREEMENT
Except as specifically modified, amended or supplemented herein, all terms and
conditions of the General Agreement shall remain in full force and effect. The
terms and conditions contained in this Addendum and those nonconflicting terms
and conditions of the General Agreement supersede all prior oral and written
understandings between the parties and shall constitute the entire agreement
between the parties with respect to the subject matter herein.
IN WITNESS WHEREOF, the parties have caused this Addendum to be executed by
their duly authorized representatives on the date(s) indicated.
PaeTec Communications, Inc. Lucent Technologies Inc.
By: /s/ Arunas A. Chesonis By: /s/ Gerard T. Cafaro
----------------------------------- -----------------------------------
Name: Arunas A. Chesonis Name: Gerard T. Cafaro
--------------------------------- ---------------------------------
Title: Chairman and CEO Title: Assistant Vice President
-------------------------------- --------------------------------
Date: September 16, 1998 Date: 9/16/98
--------------------------------- ---------------------------------
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Proprietary
13
<PAGE>
LNM980824RMPT
APPENDIX A
CHECKMATE
MARKETING & BUSINESS SOLUTIONS
MARKETING DEVELOPMENT FUND
GUIDELINES
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Proprietary
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Proprietary
14
<PAGE>
LNM980824RMPT
CHECKMATE MARKETING & BUSINESS SOLUTIONS
MARKETING DEVELOPMENT FUND GUIDELINES 11/96
The Checkmate Marketing & Business Solutions Marketing Development Fund
(hereinafter "MDF") is a cooperative approach to marketing and promotion. The
program provides assistance for pre-approved market development and promotional
activities executed by authorized Lucent Technologies Global Commercial Markets
(GCM) Customers to stimulate switched services sales activity.
MDF Funding
. Funding is based on the year's purchases of Lucent Technologies Network
Systems 5ESS(R) Switching and, Transmission and OS products only. Network
Systems products are used to calculate the amount of MDF funds. Note: Network
Cable Systems products are not eligible for rebate reimbursement calculations
under this plan.
. For customers to be eligible for MDF, a written marketing plan must be
jointly approved by the Lucent Technologies GCM Marketing Administrator and
sales organization and the customer's marketing and sales organization prior
to submission of any MDF reimbursement claims.
. Proper MDF forms are submitted by the customer along with supporting
documentation for pre-approval. After approval, copies of original paid
invoices are submitted. MDF reimbursements are issued as credits to be
applied to current or future Lucent Technologies invoices.
. Funding is based on a percentage of the year's total paid direct
purchases only.
It's a Five Step Process
1. Jointly prepare a Marketing Development Business Plan. This plan must at a
minimum include:
. Marketing opportunities or projects designed to stimulate switched
services sales activities
. Forecasts of new revenues produced with corresponding cost summaries,
and
. Specific "measurements of success."
2. Submit a completed MDF Submittal Form for pre-approval.
3. When the project is completed, the approved MDF Submittal Form will be
returned to Lucent Technologies along with paid invoices and substantiating
documents.
4. The MDF program administrator will process the reimbursement claim, verify
that funding is available, and, if so, forward the approval documentation to
the customer with a reimbursement certificate.
5. When submitted by the customer, the amount of the reimbursement certificate
will be credited to the customer's account.
Answers to your Questions . . .
Your primary MDF contact with Lucent Technologies is your Account
Representative. Your Representative can provide whatever assistance you may
need in providing direction and planning marketing strategies. Lucent
Technologies has appointed a Marketing Development Fund Administrator who
handles day-to-day details of tracking and coordinating reimbursement claims
within Lucent Technologies. You may contact the Administrator at the following
address: 5 Wood Hollow Rd., Room 1I82, Parsippany, NJ 07054-2821.
*** CONFIDENTIAL TREATMENT REQUESTED ***
15
<PAGE>
LNM980824RMPT
CHECKMATE MARKETING & BUSINESS SOLUTIONS
MARKETING DEVELOPMENT FUND GUIDELINES
Activities Eligible for MDF Reimbursement
Direct marketing
Direct marketing may include advertising, e.g. print ads and radio spots,
collateral salesware, catalogs, trade show fees, Lucent Technologies product
displays, direct mail and telemarketing programs and other pre-approved
activities. MDF funds may be utilized to assist with individual company
customization of direct marketing materials, including development, printing,
and one-time production costs on authorized mailings.
Events
MDF allowances may be used to off-set Lucent Technologies sponsorship of events
such as technology forums, conferences, seminars, trade shows or other business
related activities. Pre-approval requests must clearly demonstrate goals and
objectives of the event. Reimbursement claims must include a list of any other
co-sponsors, a copy of guest invitations to the event, detailed event cost
estimates, and a full description of the participation, involvement, and
activity by the Lucent Technologies Representative who would attend or support
the event.
Database Acquisition
MDF can be utilized to fund a variety of pre-approved database tools such as
market-based automated pricing tools (which could include basic Centrex rates,
standard features, and ISDN rates and features), and Marketing Information
Databases (such as MKIS) for client prospecting, lead generation and
infrastructure modeling.
Sales Incentive Programs
Incentive programs to stimulate switched services sales are designed and
administered by the customer. A jointly established target for service activity
penetration must be in effect and tracked for the duration of the program.
Proposed incentive programs must conform to the following guidelines:
. An outline of procedures to administer, track and audit the program is
provided.
. Estimated program costs, award descriptions and values are identified.
. A complete program activity description with specific time-frames is
established.
. A list of participating Account Executives and Sales Managers and their
incentive program objectives is submitted to Lucent Technologies.
Training
Lucent Technologies offers a wide range of educational opportunities, and
encourages Lucent Technologies sponsored customers to increase product knowledge
and marketing and sales skills. Lucent Technologies training courses are
delivered at Lucent Technologies training locations or suitcased to remote
locations.
MDF Personnel
. Under the MDF program, the Lucent Technologies customer may fund technical
consultants and/or marketing sales consultant personnel to implement
marketing and sales programs to stimulate switched services sales activity.
All pre-approved personnel funded by MDF must be dedicated 100% to
stimulating Lucent Technologies switched services sales. All expenses must
conform to standard Lucent Technologies voucher guidelines. All expenses
require pre-approval and must include: overall project concept, opportunity
identification, program cost, and a detailed action plan with measurable
milestones and start-stop dates. MDF payments for personnel are made
quarterly.
Appendix B
CHECKMATE ELEMENT SERVICES INCENTIVE
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Proprietary
16
<PAGE>
LNM980824RMPT
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
ITEM NO. CHECKMATE SERVICE DESRIPTION PRICE
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
<S> <C>
204 RBOC PRICING (10 Tariffs and 2 cities under one tariff) $[***]
--------------------------------------------------------------------------------------------------------
205 RBOC MTCE (Qtrly mtce for 10 tariffs) $[***]
--------------------------------------------------------------------------------------------------------
301 Multimedia Presentation package: 70 copies Multimedia Presentation, Sales
Toolkit, IAP services guide and forms $[***]
--------------------------------------------------------------------------------------------------------
401 Introduction to Telecom Training (70 copies of CBT training) $[***]
--------------------------------------------------------------------------------------------------------
403 Introduction to Centrex (70 copies of self paced training) $[***]
--------------------------------------------------------------------------------------------------------
404 Centrex Applications (Instructor led training for 12 cities & 70 users) $[***]
--------------------------------------------------------------------------------------------------------
405 IAP CBT (70 copies of CBT Training ) $[***]
--------------------------------------------------------------------------------------------------------
406 Marketplace (70 copies of CBT Training) $[***]
--------------------------------------------------------------------------------------------------------
501 IAP Training (Instructor led training for 12 cities and 70 users) $[***]
--------------------------------------------------------------------------------------------------------
502 New City Rollout (Instructor led training for 12 cities and 70 users) $[***]
--------------------------------------------------------------------------------------------------------
503 ISDN Configurator (70 Copies) $[***]
--------------------------------------------------------------------------------------------------------
600 Checkmate Consulting (10 days of Marketing and Sales Support in addition to
Checkmate integration) $[***]
--------------------------------------------------------------------------------------------------------
601 Checkmate other miscellaneous services $[***]
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Total Total Checkmate Services Incentive $[***]
--------------------------------------------------------------------------------------------------------
</TABLE>
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Proprietary
17
<PAGE>
LNM980824RMPT
APPENDIX C
SERVICE CONTROL POINT (SCP) MODEL CONFIGURATION
SCP System Configuration - 4 SS7 Links/SCP (165 tps) in a mated environment.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
Item Quantity
----------------------------------------------------------------------------------------------------------
<S> <C>
R8 SCP Hardware
----------------------------------------------------------------------------------------------------------
Control Server Hardware The Model 2 Control Server Cabinet is equipped [***]
with active/standby 4-way SMP P6 200 MHz Processors with 512 MB RAM, 6
pair of 4GB disks (3-pair system, 3-pair user), Ethernet interface, 16-port
asynch interface and system sanity monitoring equipment, 4 x.25 ports.
Also provides Control Server cabinet peripherals kit which includes 2
windowing terminals, Alarm Relay Unit, splitters and cables.
----------------------------------------------------------------------------------------------------------
Additional Hardware [***]
----------------------------------------------------------------------------------------------------------
Miscellaneous Cabinet with Power Distribution Unit [***]
----------------------------------------------------------------------------------------------------------
Modem Rack [***]
----------------------------------------------------------------------------------------------------------
Synchronous Modems [***]
----------------------------------------------------------------------------------------------------------
Asynchronous Modems [***]
----------------------------------------------------------------------------------------------------------
Printer [***]
----------------------------------------------------------------------------------------------------------
Telecom Server Hardware (The Telecom Server cabinet is equipped with 2 Telecom [***]
Servers each with 2 SS7 ports for a total of 4 SS7 links (ports) per SCP.
----------------------------------------------------------------------------------------------------------
Spares [***]
----------------------------------------------------------------------------------------------------------
SCP Model 2 System Spares Kit [***]
----------------------------------------------------------------------------------------------------------
Synchronous Modem Card [***]
----------------------------------------------------------------------------------------------------------
Asynchronous Modem Card [***]
----------------------------------------------------------------------------------------------------------
Filter Kit [***]
----------------------------------------------------------------------------------------------------------
Blank Tape Kit [***]
----------------------------------------------------------------------------------------------------------
Simm Mod 64MB [***]
----------------------------------------------------------------------------------------------------------
Documentation [***]
----------------------------------------------------------------------------------------------------------
Single User License and CD-ROM Media [***]
----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SMS (K-460 Duplex) Hewlett Packard System:
-------------------------------------------------------------------------------------------------------
Item Configuration
-------------------------------------------------------------------------------------------------------
<S> <C>
Hewlett Packard System (duplex HP-K460 e/w 4 CPUs, 1.28GB RAM, 120GB
disk storage, support for up to 8 network
element interfaces)
Single User license and CD-ROM Media documentation
one copy
-------------------------------------------------------------------------------------------------------
Additional Equipage SMS peripherals kit for duplex systems (2 ethernet
switches, 2 terminal servers, 1 Alarm Relay Unit,
1 modem, 2 system console PCs w EXCEED software,
2 modem racks e/w 32 synchronous
1 standalone maintenance modem)
-------------------------------------------------------------------------------------------------------
</TABLE>
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Proprietary
18
<PAGE>
LNM980824RMPT
Assumptions:
1. Quote assumes [***] of Gold Support Maintenance for the SCP pair and the SMS.
The Lucent Customer Technical Support organization is accessible via pager 24
hours per day in the event of a service disruption. Otherwise, the
maintenance period is 8 a.m. - 5 p.m. CST/CSD, Monday-Friday, except
holidays.
2. The current standard engineering, manufacturing, and installation interval
for this equipment is 16 weeks and is subject to change.
3. Since Lucent does not currently have access to forecasts of PaeTec's expected
SS7 traffic that will require SCP transactions, Lucent has quoted its
smallest SCP system which will handle 165 Transactions per Second of Flexible
Network Routing service traffic, assuming one half of the calls are for an
FNR function that requires one SCP query and one half of the calls are for an
FNR function that requires two SCP queries. Since a Lucent SCP can be
configured in the following increments: 4 links, 8 links, 16 links, 32 links
(the maximum), an increase in TPS rates needed or the addition of other
services to the SCP will require subsequent engineering analysis to determine
the needed link or CPU growth. Each SCP of the mated pair is quoted at 40%
link occupancy so each of the SCPs can handle all of the SS7 queries from the
Signal Transfer Point in the event it is necessary for one SCP of the mated
pair to carry the entire traffic load.
4. Quote for the 4 SS7 link SCP pair DOES NOT include engineering and
installation services charges.
5. Seller will provide [***] ([***]) days of SCP related training to Customer.
Such training days must be used with [***] of the Turnover Date of the SCP
Product or be forfeited. Additional SCP, SMS, and service courses can be
scheduled at a Lucent facility for a fee of $[***] per student per day.
Courses can also delivered to the customer site for the fee as stated above
plus travel and living expenses.
6. Pricing includes [***] ([***]) [***] of product integration and
[***] ([***]) [***] of acceptance testing services.
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Proprietary
19
<PAGE>
Exhibit 10.28 (Continued)
LNM981204KBPT
ADDENDUM NUMBER TWO
5ESS(R)-2000 SWITCH LONG DISTANCE FEATURE PACKAGE
PURCHASE AGREEMENT
BETWEEN PAETEC COMMUNICATIONS, INC.,
AND LUCENT TECHNOLOGIES INC.
This Addendum Two, LNM981204KBPT (hereinafter "Addendum"), is made effective as
of the 17th day of December 1998 ("Effective Date"), by and between PaeTec
Communications, Inc., a Delaware corporation with offices located at 290
Woodcliff Drive, Fairport, NY 14450 (hereinafter "Customer"), and Lucent
Technologies Inc., a Delaware corporation, acting through its Global Service
Provider Group (formerly Network Systems Group), with offices located at 600
Mountain Avenue, Murray Hill, New Jersey 07974, (hereinafter "Seller").
WHEREAS, PaeTec Communications, Inc. and Seller have entered into a certain
General Agreement, Contract #LNM980716RMPT effective June 17, 1998, and entered
into Addendum Number One to the General Agreement Contract #LNM980824RMPT
effective September 16, 1998 (hereinafter collectively referred to as the
"General Agreement") as amended from time to time by Seller and Customer,
setting forth the terms and conditions pursuant to which Seller agreed to supply
and Customer agreed to procure certain Lucent Products, Licensed Materials or
Services (as such terms are defined therein); and
WHEREAS, Customer and Seller desire to establish in this Addendum additional
terms and conditions applicable to Customer's purchase and/or license for use,
as appropriate, of certain Products and related Licensed Materials and Services,
NOW THEREFORE, in consideration of the mutual promises hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
A-1.1 SCOPE OF ADDENDUM
Notwithstanding anything to the contrary contained within the General Agreement,
this Addendum shall apply to: (1) Customer's purchase orders for Seller's Long
Distance Feature Packages which will provide the long distance related features
as listed in Exhibit 1 attached hereto and made part of this Addendum
(hereinafter "Long Distance Feature Packages" and; (2) Customer's purchase
orders for Real Time Call Detail (RTCD) Product and related Licensed Materials
as listed within Exhibit 2 attached hereto and made a part of this Agreement.
This Addendum is issued pursuant to and incorporates the non-conflicting terms
and conditions of the General Agreement. In the event of any conflict or
inconsistency between the terms of this Addendum and the terms of the General
Agreement, the terms of this Addendum shall prevail.
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Inc. Proprietary
1
<PAGE>
LNM981204KBPT
A-1.2 PRICING PLAN FOR LONG DISTANCE FEATURE PACKAGES.
At Customer's request, Seller will provide firm price quotations for the Long
Distance Feature Packages and Real Time Call Detail (RTCD) Product and Licensed
Material contained within Exhibits 1 & 2, respectively.
A-1.3 [***]
[***].
[***].
[***].
[***].
[***].
A-1.4 ADDITIONAL SUPPORT INCENTIVES RELATED TO DELIVERY OF LONG DISTANCE
FEATURE PACKAGES.
In consideration for Customer's Purchase Commitment as set forth in the Section
entitled "Customer's Purchase Commitment" of the Agreement, Seller will provide,
at no additional charge, the following incentives for Customer's first order for
Long Distance Feature Packages:
i. [***] ([***]) [***] to assist Customer's engineering in completing the
necessary information required for ODA with respect to the Long Distance
features only.
ii. [***] ([***]) [***]. dedicated to the installation activities of the long
distance features included within Attachment 1.
A-1.5 TERMS OF PAYMENT [***] FOR LONG DISTANCE
FEATURE PACKAGES AND REAL TIME CALL DETAIL ORDERS.
In consideration for Customer's Purchase Commitment as set forth in the Section
entitled "Customer's Purchase Commitment" of the Agreement, Seller will provide
the following extended payment terms incentive for Customer's first order only
for: (1) the Long Distance Feature Packages and (2) the Real Time Call Detail
Frame. For Customer's initial order only of these items Seller agrees to: (1)
issue invoices for these items upon Seller's notice of installation completion
(i.e. Turnover date) and (2) provide extended payment terms for these items only
of Net [***] from the date Seller provides its notice of installation complete.
A-1.6 5ESS-2000 TRAINING INCENTIVE
Refer to Section A-1.11.4 of Addendum Number One and delete the fourth sentence
in its entirety and replace it with the following provision:
Seller will make available to Customer [***] ([***]) additional training
days for RSMs, ORMs, and EXMs.
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Inc. Proprietary
2
<PAGE>
LNM981204KBPT
All other provisions of such Section remain unchanged.
ENTIRE AGREEMENT
Except as specifically modified, amended or supplemented herein, all terms and
conditions of the General Agreement shall remain in full force and effect. The
terms and conditions contained in this Addendum and those nonconflicting terms
and conditions of the General Agreement supersede all prior oral and written
understandings between the parties and shall constitute the entire agreement
between the parties with respect to the subject matter herein.
IN WITNESS WHEREOF, the parties have caused this Addendum to be executed by
their duly authorized representatives on the date(s) indicated.
PaeTec Communications, Inc. Lucent Technologies Inc.
By: /s/ Richard Ottalagana By: /s/ Gerard T. Cafaro
_____________________________ ________________________________
Name: Richard Ottalagana Name: Gerard T. Cafaro
___________________________ ________________________________
Title: Ex. V.P. Title: Sales V.P.
__________________________ ________________________________
Date: 12/22/98 Date: 12/18/98
___________________________ _______________________________
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Inc. Proprietary
3
<PAGE>
LNM981204KBPT
EXHIBIT 1
PaeTec Long Distance Features and Feature Packages
[***] [***] [***] [***] [***]
1. [***] [***] [***] [***] [***]
2. [***] [***] [***] [***] [***]
3. [***] [***] [***] [***] [***]
4. [***] [***] [***] [***] [***]
5. [***] [***] [***] [***] [***]
6. [***] [***] [***] [***] [***]
7. [***] [***] [***] [***] [***]
[***]
1. [***] [***] [***] [***] [***]
2. [***] [***] [***] [***] [***]
*[***]
[***]
1. [***] [***] [***] [***] [***]
2. [***] [***] [***] [***] [***]
3. [***] [***] [***] [***] [***]
4. [***] [***] [***] [***] [***]
[***]
1. [***] [***] [***] [***] [***]
[***]
1. [***] [***] [***] [***] [***]
2. [***] [***] [***] [***] [***]
3. [***] [***] [***] [***] [***]
4. [***] [***] [***] [***] [***]
5. [***] [***] [***] [***] [***]
6. [***] [***] [***] [***] [***]
*[***]
[***]
1. [***] [***] [***] [***] [***]
[***] [***] [***] [***]
2. [***] [***] [***] [***] [***]
[***]
1. [***] [***] [***] [***] [***]
2. [***] [***] [***] [***] [***]
[***]
1. [***] [***] [***] [***] [***]
2. [***] [***] [***] [***] [***]
[***]
1. [***] [***] [***] [***] [***]
2. [***] [***] [***] [***] [***]
3. [***] [***] [***] [***] [***]
4. [***] [***] [***] [***] [***]
5. [***] [***] [***] [***] [***]
6. [***] [***] [***] [***] [***]
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Inc. Proprietary
4
<PAGE>
LNM981204KBPT
[***]
1. [***] [***] [***] [***] [***]
2. [***] [***] [***] [***] [***]
[***]
1. [***] [***] [***] [***] [***]
[***]
1. [***] [***] [***] [***] [***]
[***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Inc. Proprietary
5
<PAGE>
LNM981204KBPT
EXHIBIT 2
REAL TIME CALL DETAIL (RTCD) FRAME
REAL TIME CALL DETAIL FRAME COMPONENTS:
<TABLE>
<CAPTION>
Quantity Description
--------------------------------------------------------------------------------
<S> <C>
[***] Cabinet Assembly incl. Intra bay cables, EMC and safety kits
--------------------------------------------------------------------------------
[***] VT 100 Terminal and Cables
--------------------------------------------------------------------------------
[***] 28.8 Modem
--------------------------------------------------------------------------------
[***] A/B Box
--------------------------------------------------------------------------------
[***] Duplex system operation/application software bundle RTU
--------------------------------------------------------------------------------
[***] DAT tapes
--------------------------------------------------------------------------------
</TABLE>
* System Price does not include the following:
Engineering
Installation
Inter Bay Cabling
Cable Rack
Spares Equipment
Recommended Spares Equipment include the Basic Spares Kit, ED5D838-30-G-40
equipped as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Quantity Description
--------------------------------------------------------------------------------
<S> <C>
[***] Integrated Server with pre-loaded software
--------------------------------------------------------------------------------
[***] Hot swap components for Data Storage
--------------------------------------------------------------------------------
[***] Ethernet Hub Module
--------------------------------------------------------------------------------
</TABLE>
***CONFIDENTIAL TREATMENT REQUESTED***
Lucent Technologies Inc. Proprietary
6
