<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 3, 1999.
REGISTRATION NO. 333-85999
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 5
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NEXT LEVEL COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
DELAWARE 3674 94-3342408
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
6085 STATE FARM DRIVE
ROHNERT PARK, CALIFORNIA 94928
(707) 584-6820
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JAMES T. WANDREY
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
NEXT LEVEL COMMUNICATIONS, INC.
6085 STATE FARM DRIVE
ROHNERT PARK, CALIFORNIA 94928
(707) 584-6820
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
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<S> <C> <C>
JAY K. HACHIGIAN, ESQ. RAYMOND W. WAGNER, ESQ. VINCENT J. PISANO, ESQ.
GUNDERSON DETTMER STOUGH SIMPSON THACHER & BARTLETT SKADDEN, ARPS, SLATE,
VILLENEUVE FRANKLIN & HACHIGIAN, 425 LEXINGTON AVENUE MEAGHER & FLOM LLP
LLP NEW YORK, NEW YORK 10017 919 THIRD AVENUE
155 CONSTITUTION DRIVE (212) 455-2000 NEW YORK, NEW YORK 10022
MENLO PARK, CALIFORNIA 94025 (212) 735-3000
(650) 321-2400
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 5 to the Form S-1 Registration Statement is being filed
for the sole purpose of filing exhibits.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the sale of Common Stock being registered. All amounts are estimates except
the SEC registration fee and the NASD filing fees.
<TABLE>
<S> <C>
SEC Registration fee....................................... $ 34,750
NASD fee................................................... 13,000
Nasdaq National Market listing fee......................... 95,000
Printing and engraving expenses............................ 400,000
Legal fees and expenses.................................... 1,600,000
Accounting fees and expenses............................... 500,000
Blue sky fees and expenses................................. 5,000
Transfer agent fees........................................ 15,000
Miscellaneous fees and expenses............................ 137,250
----------
Total............................................ $2,800,000
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). The Registrant's Certificate of Incorporation
provides for mandatory indemnification of its directors and officers and
permissible indemnification of employees and other agents to the maximum extent
permitted by the Delaware General Corporation Law. The Registrant's Certificate
of Incorporation provides that, pursuant to Delaware law, its directors shall
not be liable for monetary damages for breach of the directors' fiduciary duty
as directors to the Company and its stockholders. This provision in the
Certificate of Incorporation does not eliminate the directors' fiduciary duty,
and in appropriate circumstances equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Company for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
actions leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws. The Registrant has entered into
Indemnification Agreements with its officers and directors, a form of which is
attached as Exhibit 10.1 hereto and incorporated herein by reference. The
Indemnification Agreements provide the Registrant's officers and directors with
further indemnification to the maximum extent permitted by the Delaware General
Corporation Law." Reference is made to Section 6 of the Underwriting Agreement
contained in Exhibit 1.1 hereto, indemnifying officers and directors of the
Registrant against certain liabilities.
II-1
<PAGE> 3
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Within the last three years, a predecessor to the Registrant sold
securities in the following transactions, each of which was intended to be
exempt from the registration requirements of the Securities Act of 1933, as
amended.
In January 1998, Next Level Communications, a subsidiary of General
Instrument, acquired an 89% limited partner interest in Next Level
Communications L.P. (the "Partnership") in exchange for the net assets,
management and workforce of Next Level Communications.
In January 1998, General Instrument advanced $75.0 million to the
Partnership in exchange for a note convertible by the partnership into shares.
The Partnership used these funds for general working capital.
From November 1998 through May 1999, Next Level Communications has provided
an additional $50.0 million of capital contribution in return for an increase in
its partnership interest from 89% to 90.4%. The Partnership used these funds for
general working capital.
The sale of the above securities was deemed to be exempt from registration
under the Act in reliance upon Section 4(2) of the Act as transactions by an
issuer not involving any public offering. The recipients of securities in each
such transaction represented their intentions to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends were affixed to the securities used
in such transactions. All recipients had adequate access, through their
relationships with the Registrant, to information about the Registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C> <C>
1.1** -- Form of Underwriting Agreement (preliminary form).
2.1** -- Form of Merger Agreement among General Instrument
Corporation, Spencer Trask Investors LLC, Next Level
Communications, Next Level Communications L.P. and
Registrant.
3.1** -- Form of Restated Certificate of Incorporation to be filed
upon the closing of this offering.
3.2** -- Bylaws of the Registrant.
4.1 -- Reference is made to Exhibits 3.1 and 3.2
4.2** -- Form of Registration Rights Agreement among General
Instrument Corporation, Spencer Trask Investors LLC and
Registrant.
4.3* -- Specimen Common Stock certificate.
5.1** -- Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
9.1** -- Form of Voting Trust Agreement among General Instrument
Corporation, Registrant and Chase Mellon Shareholder
Services LLC.
10.1** -- Form of Indemnification Agreement.
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C> <C>
10.2** -- Form of Corporate and Intercompany Agreement between General
Instrument Corporation and Registrant.
10.3** -- 1999 Equity Incentive Plan.
10.4** -- 1999 Employee Stock Purchase Plan.
10.5** -- Patent and Technical Information Cross-License Agreement.
10.8+*** -- Agreement between U S WEST Communications, Inc. and the
Registrant.
10.9+*** -- Agreement by and among Telesector Resources Group, Inc.,
General Instrument Corporation and the Registrant.
10.10+*** -- Agreement between the Registrant and SCI Technology, Inc.
10.11+** -- Agreement between the Registrant and CMC Mississippi, Inc.
10.12** -- 1999 Stock Plan.
23.1** -- Independent Auditors' Consent.
23.2** -- Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** -- Power of Attorney (see page II-5).
27.1** -- Financial Data Schedule.
99.1** -- Consent of Lynn Forester filed pursuant to Rule 438 under
the Securities Act.
99.2** -- Consent of John McCartney filed pursuant to Rule 438 under
the Securities Act.
99.3** -- Consent of Paul S. Latchford filed pursuant to Rule 438
under the Securities Act.
</TABLE>
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* To be supplied by amendment.
** Previously filed.
*** Filed herewith.
+ Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
(b) FINANCIAL STATEMENT SCHEDULES
Schedules have been omitted because the information required to be set
forth therein is not applicable or is shown in the financial statements or
notes.
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes to provide to the Underwriters at the
closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation or the Bylaws of the Registrant, the Underwriting Agreement, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In
II-3
<PAGE> 5
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered hereunder,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 5 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Rohnert Park, State of California, on this 3rd day of November, 1999.
NEXT LEVEL COMMUNICATIONS, INC.
By: /s/ JAMES T. WANDREY*
--------------------------------------
James T. Wandrey
Senior Vice President
and Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
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/s/ PETER W. KEELER* Chief Executive Officer, November 3, 1999
- ------------------------------------------ (Principal Executive
Peter W. Keeler Officer) Chairman of the
Board
and President
/s/ JAMES T. WANDREY Senior Vice President and November 3, 1999
- ------------------------------------------ Chief Financial Officer
James T. Wandrey (Principal Financial and
Accounting Officer)
/s/ RICHARD C. SMITH* Director November 3, 1999
- ------------------------------------------
Richard C. Smith
*By: /s/ JAMES T. WANDREY
------------------------------------
James T. Wandrey
Attorney-in-fact
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C> <C>
1.1** -- Form of Underwriting Agreement (preliminary form).
2.1** -- Form of Merger Agreement among General Instrument
Corporation, Spencer Trask Investors LLC, Next Level
Communications, Next Level Communications L.P. and
Registrant.
3.1** -- Form of Restated Certificate of Incorporation to be filed
upon the closing of this offering.
3.2** -- Bylaws of the Registrant.
4.1 -- Reference is made to Exhibits 3.1 and 3.2.
4.2** -- Form of Registration Rights Agreement among General
Instrument Corporation, Spencer Trask Investors LLC and
Registrant.
4.3* -- Specimen Common Stock certificate.
5.1** -- Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
9.1** -- Form of Voting Trust Agreement among General Instrument
Corporation, Registrant and Chase Mellon Shareholder
Services LLC.
10.1** -- Form of Indemnification Agreement.
10.2** -- Form of Corporate and Intercompany Agreement between General
Instrument Corporation and Registrant.
10.3** -- 1999 Equity Incentive Plan.
10.4** -- 1999 Employee Stock Purchase Plan.
10.5** -- Patent and Technical Information Cross-License Agreement.
10.8+*** -- Agreement between U S WEST Communications, Inc. and the
Registrant.
10.9+*** -- Agreement by and among Telesector Resources Group, Inc.,
General Instrument Corporation and the Registrant.
10.10+*** -- Agreement between the Registrant and SCI Technology, Inc.
10.11+** -- Agreement between the Registrant and CMC Mississippi, Inc.
10.12** -- 1999 Stock Plan.
23.1** -- Independent Auditors' Consent.
23.2** -- Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** -- Power of Attorney (see page II-5).
27.1** -- Financial Data Schedule.
99.1** -- Consent of Lynn Forester filed pursuant to Rule 438 under
the Securities Act.
99.2** -- Consent of John McCartney filed pursuant to Rule 438 under
the Securities Act.
99.3** -- Consent of Paul S. Latchford filed pursuant to Rule 438
under the Securities Act.
</TABLE>
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* To be supplied by amendment
** Previously filed.
*** Filed herewith.
+ Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
<PAGE> 1
EXHIBIT 10.8
AGREEMENT NO. 97050833
AMENDMENT NO. 1
This Amendment No. 1 is made and entered by and between U S WEST Business
Resources, Inc. with offices for transaction of business located at 700 West
Mineral Avenue, Littleton, CO 80120 as agent for U S WEST Communications, Inc.
("Customer"), and Next Level Communications, with offices for transaction of
business located at 6085 State Farm Drive, Rohnert Park, CA 94928 ("Supplier").
RECITALS
Customer and Supplier entered into that certain Agreement No. 97050833, dated
August 8, 1997, (the "Agreement"); and Customer and Supplier wish to amend the
Agreement under the terms and conditions contained herein.
AGREEMENT
In consideration of the mutual promises and advantages to the parties, the
parties incorporate by reference and agree to the accuracy of the above recitals
and further agree as follows:
1. DESCRIPTION OF AMENDMENT AND MODIFICATIONS
1.1 The purpose of Amendment No. 1 is to definitize the award of
Access RFP R100523 to the subject Agreement. Certain terms and
conditions originally intended for the Agreement and Product
Schedule No. One do not apply to this new acquisition. The new
Access products shall be as defined in Product Schedule No.
Two separately from this Amendment.
1.2 Article 21, "Termination for Convenience" -
1.2.1 Article 21.1 of "Termination for Convenience" as set
forth in Addendum No. One, third sentence, fifteenth
line, for purposes of Product Schedule No. Two,
insert after, ". . . as set forth under this
Agreement," the following, "For purchases of the
NLevel(3) Switched Digital Access System(R) products
as specified in Product Schedule No. Two, Supplier's
remedies for termination under this Article 21 shall
be limited to: (1) [ * ] pursuant to the [ * ] set
forth in the Agreement for [ * ] properly [ * ] in
accordance with this Agreement prior to termination;
and (2) [ * ] for Purchases priced by [ * ] based on
the [ * ] of proper [ * ] in accordance with this
Agreement at the time of [ * ] , Customer shall have
no further liability to Supplier as a result of the
termination."
1.2.2 Article 21.2 of "Termination for Convenience" as set
forth in Addendum No. One shall not apply to the
NLevel(3) Switched Digital Access System(R) products
awarded as a result of RFP R100523. The following
statement is added before the text of 21.2, "This
article does not apply to purchases for NLevel(3)
Switched Digital Access System(R) products as
specified in Product Schedule No. Two."
1.3 Article 22.7 of "Default" as set forth in Addendum No. One
shall not apply to NLevel(3) Switched Digital Access System(R)
products awarded as a result of RFP R100523. The following
statement is added before the text of 22.7, "This article does
not apply to purchases for NLevel(3) Switched Digital Access
System(R) products as specified in Product Schedule No. Two."
1.4 Article 29., "M/WBE Subcontracting Plan" as modified by the
statement in Addendum No. One is changed to add the following
additional language as it applies to the Access RFP award
after the first sentence (in Addendum No. One), "Said M/WBE
Subcontracting Plan shall be supplemented and/or revised by a
submittal that applies to purchases of NLevel(3) Switched
Digital Access System(R) products contained in Product
Schedule No. Two, to be incorporated into subject Agreement no
later than December 15, 1998."
CONFIDENTIAL. DISCLOSE AND DISTRIBUTE SOLELY TO THOSE INDIVIDUALS WHO HAVE A
NEED TO KNOW.
1
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 2
AGREEMENT NO. 97050833
Amendment No. 1
1.5 Article 36., "Training" as added via Addendum No. One, is
changed to add conditions that apply to the Access Products
from R100523, to be contained in Product Schedule No. Two. The
following new paragraph is added after the last paragraph of
that article, "Supplier agrees to provide training for those
NLevel(3) Switched Digital Access System(R) products purchased
under Product Schedule No. Two in these [ * ] locations: [ * ]
(the last of which will be agreed upon at a later date)."
1.6 Article 40., "Business Commitment" as added via Amendment No.
One shall not apply to those [ * ] products awarded as a
result [ * ] The following statement is added after the title,
"This Article does not apply to purchases of NLevel(3)
Switched Digital Access System(R) products contained in
Product Schedule No. Two."
1.7 Article 41., "Evaluation of Prices" is added as follows,
"Annual review of Product Schedule by Customer with Supplier
shall occur to determine appropriate adjustments based on
current state of development of the technology, and other
market factors that could affect price."
2. EFFECTIVE DATE
2.1 This Amendment No. 1 shall be deemed effective October 15,
1998 through the Agreement's current expiration date of August
8, 2002.
2.2 Note that the term for Product Schedule No. Two may differ
from that of the Agreement.
3. FURTHER AMENDMENTS
Except as modified herein, the provisions of the Agreement shall remain
in full force and effect. Neither the Agreement nor this Amendment No.
1 may be further amended or altered except by written instrument
executed by an authorized representative of both parties.
The parties intending to be legally bound have executed this Amendment No. 1 as
of the dates set forth below, in multiple counterparts, each of which is deemed
an original, but all of which shall constitute one and the same instrument.
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U S WEST BUSINESS RESOURCES, INC. AS AGENT FOR NEXT LEVEL COMMUNICATIONS
U S WEST COMMUNICATIONS, INC.
/s/ Joyce Becker /s/ Harold S. Klein
- ------------------------------------ ---------------------------------
(Authorized Signature) (Authorized Signature)
Joyce Becker Harold S. Klein
- ------------------------------------ ---------------------------------
(Print or Type Name of Signatory) (Print or Type Name of Signatory)
Procurement Manager VP Contracts Management
- ------------------------------------ ---------------------------------
(Title) (Title)
98 OCT 15 98 OCT 15
- ------------------------------------ ---------------------------------
(Execution Date) (Execution Date)
</TABLE>
CONFIDENTIAL. DISCLOSE AND DISTRIBUTE SOLELY TO THOSE INDIVIDUALS WHO HAVE A
NEED TO KNOW.
2
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 3
Agreement No. 97050833
AGREEMENT
This Agreement is made by and between U S WEST Communications, Inc. with offices
for transaction of business located at 700 West Mineral, Littleton, Colorado
80120 ("Customer"), and Next Level Communications with offices for transaction
of business located at 6085 State Farm Drive, Rohnert Park, California 94928
("Supplier").
In consideration of the mutual covenants and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
GENERAL TERMS AND CONDITIONS
1. DEFINITIONS: The terms defined herein shall have the meanings set
forth below.
1.1. "Acceptance," if applicable, is defined in the Special Provisions
Module(s).
1.2. "Agreement" means this written contract between Customer and
Supplier, including the General Terms and Conditions and all Special
Provisions Modules, together with Schedule(s), exhibits, any other
attachments, Order(s), and amendments to this Agreement.
1.3. "Confidential Information" is defined in Article 6.
1.4. "Customer" means U S WEST Communications, Inc.. Customer shall
also have the right to designate Affiliate(s) who may purchase under
this Agreement as Customer, and such Affiliate(s) shall become
additional Customer(s) under this Agreement upon Customer's written
notice to Supplier. For purposes of this paragraph 1.4, "Affiliate"
means any entity which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, Customer. For purposes of this paragraph 1.4, "control"
means (i) in the case of corporate entities, direct or indirect
ownership of twenty percent (20%) or more of the stock or shares
entitled to vote for the election of the board of directors or other
governing body of the entity; and (ii) in the case of non-corporate
entities, direct or indirect ownership of twenty percent (20%) or
greater of the equity interest.
1.5. "Deliver" ("Delivery") means Customer's receipt of Purchases at
the location specified in any Order(s) or in this Agreement.
1.6. "Documentation" means tangible or intangible information necessary
for the use, planning, engineering, installation, operation and
maintenance of Purchases, including but not limited to: Specifications,
user manuals, test data, flow charts, data file listings, loading and
unloading procedures, machine configuration information, programs,
routines, subroutines, or related information.
1.7. "Liabilities" shall mean all liabilities, claims, judgments,
losses, orders, awards, damages, costs, fines, penalties, costs of
defense, and attorneys' fees.
1.8. "Order(s)" means a written or electronic offer by Customer which
shall be deemed to incorporate all provisions of this Agreement.
1.9. "Product(s)" means those goods, supplies, materials, articles,
items, parts, components, assemblies, and the incidental associated
Software, listed and/or described in this Agreement or any Module(s),
Schedule(s), Order(s) and/or other attachments to this Agreement.
1.10. "Purchases" means all Product(s), Software and/or Services
described in this Agreement, Module(s), or on Schedule(s), Order(s),
and/or other attachments to this Agreement.
1.11. "Schedule(s)" means a written instrument made part of this
Agreement describing such things as the Purchase(s), price,
Specifications, warranty terms and related shipping and delivery
instructions.
1.12. "Services" means my work performed by or for Supplier under this
Agreement, including any deliverables resulting from or incidental to
the Services, as listed and/or described in this Agreement, Module(s),
or any Schedule(s), Order(s) and/or other attachments to this
Agreement.
1.13. "Software" means computer programs as listed and/or described in
this Agreement, Module(s) or any Schedule(s), Order(s) and/or other
attachments to this Agreement, and the related Documentation.
"Software" includes, without limitation, all versions and all updates,
enhancements and corrections, together with operating instructions,
user manuals, training materials and other Documentation. "Software"
does not include source code or proprietary design documentation,
unless otherwise agreed to in writing by the parties.
1.14. "Special Provisions Module(s)" or "Module(s)" means, as
applicable, the Special Provisions Module-Software License and
Services, and/or the Special Provisions Module-Services, and/or the
Special Provisions Module-Product(s), and/or any other similar set of
provisions which we attached to the General Terms and Conditions and
form part of this Agreement.
1.15. "Specifications" means technical, functional, operational and
other criteria and/or performance requirements for Purchases, in any
medium, which criteria and/or requirements are referenced in or made
part of this Agreement, and schematics, prototypes, models, Supplier's
proposals and literature, and/or Documentation furnished to Customer.
CONFIDENTIAL. DISCLOSE AND DISTRIBUTE SOLELY TO THOSE INDIVIDUALS WHO HAVE A
NEED TO KNOW.
1
<PAGE> 4
Agreement No. 97050833
2. TERM: This Agreement shall be effective as of August 8, 1997, and shall
continue through August 8, 2002. This Agreement shall thereafter automatically
renew for successive periods of one (1) year each unless a party gives written
notice of intention to terminate at least one hundred twenty (120) days before
the end of any term, or this Agreement is terminated or canceled under Articles
21 or 22. The Special Provisions Modules, Schedules and/or other parts of this
Agreement may specify a different term(s) applicable specifically to that
portion of this Agreement. If my such specific term continues beyond this
Agreement, the General Terms and Conditions and other applicable provisions of
this Agreement shall continue to govern that portion of this Agreement.
3. INVOICES, PAYMENTS, SETOFF, TAXES:
3.1. Supplier shall issue invoices in the format required by Customer
within thirty (30) days following Delivery of Products or Software or
completion of Services, which itemize all charges, costs, taxes and
Software license fees separately. No term or condition of any invoice
shall be binding upon Customer, and Customer hereby objects to any
terms inconsistent with or additional to the terms and conditions of
this Agreement.
3.2. Correct and undisputed amounts on invoices shall be paid within
thirty (30) days following receipt of the invoice and following
Delivery of Products or Software or completion of Services, unless
otherwise provided in a Schedule or other attachment. Notwithstanding
the foregoing, payment shall not be due then if on or before the due
date Customer notifies Supplier of rejection or non-Acceptance of
Purchase(s). Disputed amounts on invoices shall he paid within thirty
(30) days after resolution of dispute. Supplier agrees to provide to
Customer reasonable supporting documentation concerning any disputed
amount within thirty (30) days after Customer notifies Supplier of the
dispute.
3.3. Credits due to Customer may be applied against amounts owed to
Supplier. If no amounts are owed by Customer to Supplier, Supplier
shall issue payment within thirty (30) days of Customer's written
request.
3.4. Payment shall not constitute Acceptance or approval of the
Purchases or a waiver by Customer of any right to require fulfillment
of all terms and conditions of this Agreement.
3.5. The act of submission of an invoice constitutes Supplier's
certification that all claims, liens and causes of action, if any, for
the payment of wages or salaries or the payment of charges for
materials, tools, machinery or supplies have been satisfied, released
or settled. Customer reserves the right before making payments to
require Supplier to furnish sufficient evidence that all claims, liens
and causes of action have been satisfied, released or settled. If
satisfactory evidence is not furnished, the amount of such claims,
liens and causes of action may be withheld from any monies otherwise
payable to Supplier hereunder until such evidence of payment or a bond
to indemnify Customer against my such claims, liens, and causes of
action has been furnished.
3.6. All claims for monies due from Customer shall be subject to
deduction or setoff by Customer for any claim arising out of any
transaction with Supplier.
3.7. Supplier shall be responsible for any and all taxes including,
without limitation, the income, payroll, sales, use, gross receipts,
real estate, personal property or other taxes imposed upon Supplier.
Supplier will indemnify and hold harmless Customer for any loss or
damage (including without limitation any penalties and interest)
sustained because of Supplier's failure to pay such taxes. Customer
will be responsible only for the sales or transaction taxes that are
directly imposed upon any of the Purchases furnished in accordance with
this Agreement, and such sales or transaction taxes shall be listed
separately on Supplier's invoices.
4. RECORDS: Supplier shall maintain complete and accurate records of all
amounts billable to and payments made by Customer hereunder in accordance with
recognized accounting practices. Supplier shall retain such records for a period
of four (4) years from the date of payment for Purchases covered thereby. During
the term of this Agreement and the respective periods in which Supplier is
required to maintain such records, Customer and its authorized agents and
representatives shall have access to such records for purposes of audit during
Supplier's normal business hours.
5. WARRANTIES:
5.1. Supplier warrants that it has all rights, title, and interest,
free of all liens and encumbrances, in and to all Product(s) and
Software sold, leased or licensed to Customer; except that for Software
which is not owned by Supplier, Supplier warrants that it has the right
to grant the licenses granted hereunder.
5.2. Supplier warrants that Purchases shall conform to all
descriptions, Specifications, statements of work, representations, and
other requirements set forth in this Agreement. Module(s), Schedule(s)
and/or any Order(s); and will be free from defects in materials,
performance, workmanship, and design. Supplier further warrants it will
perform Services with promptness, diligence and in accordance with the
highest standards in the field to the reasonable satisfaction of
Customer.
5.3. Any specific warmly periods shall be as set forth in the
Special Provisions Module(s) and/or Schedule(s).
5.4 Supplier represents and warrants that the Products and
Software will function properly in accordance with Specifications and
will record, store, process, calculate and present calendar dates
falling on and after (and if applicable, spans of time including)
January 1, 2000, and will calculate any information dependent on or
relating to such dates in the same manner, and with the functionality,
data integrity and performance, as the Products and Software record,
store, process, calculate and present calendar dates on or before
December 31, 1999, or calculate any information dependent on or
relating to such dates ("2000 Compliant"). Supplier represents and
warrants that the Products and Software (1) will lose no functionality
on or after January 1, 2000 and will
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Agreement No. 97050833
lose no functionality with respect to the introduction of records
containing dates falling on or after January 1, 2000 and (2) will be
interoperable with other products and software used by Customer that
may deliver records to the Products and Software or receive records
from the Products and Software, or interact with the Products and
Software, including but not limited to back-up and archived data. Upon
request by Customer, Supplier agrees to provide a test script to
validate that the Products and Software are 2000 Compliant. The
warranties and representations in this paragraph are not subject to any
limited or specific warranty periods in the General Terms and
Conditions, or in any Special Provisions Module(s) and/or Schedule(s).
If any products and/or software previously provided to Customer by
Supplier, whether hereunder or under separate agreements, is not 2000
Compliant and is currently under maintenance by Supplier or Supplier's
designee, Supplier shall modify or replace such products and/or
software with products and/or software that are 2000 Compliant no later
than January 1, 1999, without charge to Customer.
5.5. Warranties will not be affected by removal, relocation, or
resale of Product(s), and warranties shall survive inspection,
Acceptance and payment. Warranties shall run to Customer, its agents,
successors in interest, assigns and customers.
5.6. If Supplier is not the manufacturer or licensor, or, with
respect to Software the owner, Supplier shall obtain the same warranty
as specified herein from the manufacturer, licensor or owner, and the
complete warranty will pass to Customer. Supplier shall have primary
responsibility for and shall assist and cooperate with Customer in
making claims under such warranty.
5.7. Supplier shall promptly correct or make good non-conforming
Purchases, to the reasonable approval and acceptance of Customer, at no
cost to Customer.
5.7.1. Non-conforming Purchases shall be either corrected
on-site or returned to Supplier for correction, at Supplier's
expense and at Customer's option. Customer agrees to be
reasonable in requiring on-site corrections.
5.7.2. If the non-conformity has not been corrected within
five (5) days from date of Customer's notification of failure,
Customer shall have the right to have the non-conformities
remedied at the expense of Supplier, and Supplier shall be
responsible for all losses, expenses and damages incurred by
Customer. Customer shall also have the right to cancel this
Agreement and/or any Order(s) pursuant to Article 22.
5.8. These Warranties are not sole and exclusive but are in
addition to, and do not limit, any rights afforded to Customer by this
Agreement or as provided by law.
6. CONFIDENTIAL INFORMATION:
6.1. Confidential Information shall mean any technical or business
information, including third-party information, marked as confidential
or proprietary and furnished, disclosed or made available in
connection with this Agreement, in any form or medium, by one party to
the other, including, without limitation, Specifications, prototypes,
Software, models, drawings, marketing plans, financial data and
personnel statistics. Confidential Information in oral form must be
identified as confidential at the time of disclosure and confirmed as
such in writing within thirty (30) days of such disclosure.
Confidential Information does not include information which (1) the
recipient knew or had in its possession, prior to disclosure, without
confidential limitation; (2) is independently developed by the
recipient without breach of this Agreement; (3) becomes publicly
available without breach of this Agreement; (4) is received rightfully
from a third party and without obligation of confidentiality; or (5)
is disclosed without restriction by the disclosing party.
6.2. If the parties deem it necessary and request to receive
Confidential Information from each other, the parties agree:
6.2.1. To maintain and use Confidential Information only for
the purposes of this Agreement and only as permitted herein.
To only make copies as specifically authorized and with the
same confidential or proprietary notices as are on the
original.
6.2.2. To restrict access and disclosure of Confidential
Information to their employees, agents and contractors who
have a "need to know," and who agree to maintain
confidentiality in accordance with this Article.
6.2.3. To treat Confidential Information as confidential for
a period of [ * ] from the date of receipt.
6.3. Confidential Information shall at all times remain the
property of the disclosing party. Upon request, Confidential
Information shall be returned to the disclosing party upon termination,
cancellation or expiration of this Agreement.
6.4. Except as may be required by applicable law, regulations,
legal or agency order, demand or process, neither party shall disclose
to a third party my Confidential Information or the contents of this
Agreement without the prior written consent of the other party. In the
case of required disclosures, the owner of Confidential Information
shall, to the extent reasonably possible, be given notice prior to the
disclosure and an opportunity to seek an appropriate protective order.
The obligations of this Article shall be satisfied by handling
Confidential Information with the same degree of care which the
receiving party applies to its own similar confidential information but
in no event less than reasonable care. Customer's liability under this
Article shall be subject to the same limitations as set forth in
Article 22.4. The obligations of this Article shall survive the
expiration, cancellation or termination of this Agreement.
7. OWNERSHIP:
7.1. "Work Product(s)" means all information, materials, products,
drawings, specifications, reports, proposals, and any other items, in
any medium, and any ideas, designs, concepts, techniques, inventions,
discoveries, improvements, software, documentation, original works of
authorship and
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* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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Agreement No. 97050833
any other work products discovered, prepared or developed by or for
Supplier or its employees specifically for Customer in connection with
Purchase(s) under this Agreement or in the course of or as a result of
Services. Unless otherwise expressly provided in applicable Schedule(s)
or other attachments, Work Product(s) shall be promptly disclosed and
furnished to Customer. All right, title and interest in and to the Work
Products shall vest in Customer and they shall be deemed to be works
made for hire, and to the extent they may not be considered works made
for hire Supplier assigns to Customer all rights, title and interest in
and to the Work Products, including rights to copyrights in all
copyrightable materials and in and to all patents that may be issued
thereon. If the Work Products include item previously developed or
copyrighted by Supplier or a third party. Supplier hereby grants to
Customer an unrestricted, royalty-free, perpetual, irrevocable license
to make, have made, copy, use, modify, distribute, prepare derivative
works, perform, display, disclose and sublicense such Work Products for
any lawful purpose. Supplier represents and warrants that it has all
necessary agreements with its employees in order to convey the rights
of ownership and title stated herein. Upon request from time to time,
and without charge but with reimbursement for out-of-pocket costs and
expenses incurred, Supplier and its employees agree to reasonably
assist Customer and its nominees to obtain patents for any Work
Products anywhere in the world. Supplier and its employees agree to
execute all papers (including assignments) and do all things required
in order to protect the rights of Customer and vest in it or its
nominees all right, title and interest in and to the Work Products,
patent applications, and patents, without charge but with reimbursement
for out-of-pocket costs and expenses incurred.
7.2. "Other Intellectual Property" means inventions, discoveries,
improvements, concepts, methods, processes, ideas, information,
software, and other intellectual property which is not deemed to be
"Work Product(s)," but which is originated, developed or prepared in
connection with Purchase(s) under this Agreement. Unless otherwise
expressly provided in applicable Schedule(s) or other attachments,
"Other Intellectual Property" which is originated, developed or
prepared: (1) by employees of one party shall belong to that party;
and/or (2) jointly by employees of both parties shall belong jointly to
both, and each party hereby grants the other an unrestricted,
nonexclusive, royalty-free, perpetual, irrevocable license to copy,
use, disclose and sublicense such jointly developed Other Intellectual
Property in connection with its business.
7.3. At the request and expense of Customer, Supplier will assist
Customer and sign all appropriate documents, during and after the term
of this Agreement, to enable Customer to obtain intellectual property
protection for its interests in Work Product(s) and/or Other
Intellectual Property. Customer will, at the request and expense of
Supplier, provide the same assistance to Supplier with respect to Other
Intellectual Property owned by Supplier. The assisting party will not
charge any fees or other charges of my kind in connection with such
activities. Supplier shall obtain from its employees, consultants or
other representatives who perform work hereunder appropriate
assignments and/or rights to ensure that Supplier is authorized to
grant the rights provided to Customer hereunder.
7.4. Neither party grants the other party any express or implied
licenses under any patents, copyrights or trademarks, except to the
extent necessary for each party to fulfill its obligations to the other
under this Agreement.
8. INDEPENDENT CONTRACTOR:
8.1. Supplier warrants and agrees that it is engaged in an
independent business and that it and its employees and agents will
perform under this Agreement as independent contractors and not as
agents or employees of Customer; and that it will maintain complete
control over performance by its employees, agents and subcontractors.
Customer is not liable for debts or expenses incurred by Supplier, its
employees, agents and subcontractors. Nothing in this Agreement or any
subcontract shall create any contractual relationship or liabilities
between any agent or subcontractor and Customer. Supplier shall be
responsible for its own acts and those of its agents, employees and
subcontractors in connection with performance of this Agreement.
8.2. Supplier will be solely responsible for all matters relating
to payment of its employees, including compliance with workers'
compensation, unemployment, disability insurance, social security
withholding, and all other federal, state and local laws, rules and
regulations governing such matters. Supplier and its employees are not
entitled to unemployment insurance benefits as a result of performing
under this Agreement unless unemployment compensation coverage is
provided by Supplier. Supplier is responsible for and shall pay all
assessable federal and state income tax on amounts paid under this
Agreement.
9. SUBCONTRACTORS: Supplier shall obtain Customer's written consent, which
consent will not be unreasonably withheld, prior to subcontracting any
obligations hereunder. Such requirement shall not apply to purchases of
incidental, standard commercial supplies or raw materials.
10. PLANT AND WORK RULES: Each party while on the premises of the other
shall comply with all plant rules and regulations including, where required by
governmental regulation, submission of satisfactory clearance from the
appropriate governmental authorities.
11. INDEMNITY:
11.1. Supplier shall indemnify and hold harmless Customer, its
owners, parents, subsidiaries, affiliates, agents, directors and
employees against all Liabilities to the extent they arise from or in
connection with: (1) the fault or negligence of Supplier, its officers,
employees, agents, subcontractors and/or representatives; and/or (2)
the furnishing, performance or use of any Purchases under this
Agreement or any product
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Agreement No. 97050833
liability claims relating to any Purchases; and/or (3) failure by Supplier,
its officers, employees, agents, subcontractors and/or representatives to
comply with Article 19 "Compliance with Laws:" and/or (4) assertions under
workers' compensation or similar employee benefit acts by Supplier or its
employees, agents, subcontractors, or subcontractors' employees or agents.
11.2 Customer shall indemnify and hold harmless Supplier, its owners,
parents, subsidiaries, affiliates, agents, directors and employees against
all Liabilities to the extent they arise from or in connection with: (1)
the fault or negligence of Customer, its officers, employees, agents,
subcontractors and/or representatives; and/or (2) failure by Customer, its
officers, employees, agents, subcontractors and/or representatives to
comply with Article 19 "Compliance with Laws," and/or (3) assertions under
workers' compensation or similar employee benefit acts by Customer or its
employees, agents, subcontractors, or subcontractors' employees or agents.
Customer's liability under this Article shall be subject to the same
limitations as set forth in Article 22.4.
12. PATENT, TRADEMARK, COPYRIGHT OR TRADE SECRET INDEMNIFICATION:
12.1 Supplier shall, at its expense, indemnify, hold harmless, and defend
Customer, its owners, parents, subsidiaries, affiliates, agents, directors,
and employees against all Liabilities that arise from or in connection with
any infringement or claim of infringement of any patent, trademark,
copyright, trade secret or other intellectual property right, relating to
the Purchases and/or the use thereof. Customer may have its own counsel
participate in the defense of any such claim or action at its expense.
12.2 If any Purchase becomes, or in Supplier's reasonable opinion is likely
to become, the subject of a preliminary or final order or judgment against
Customer's use of any Purchase(s) due to such a claim of infringement.
Supplier shall, at its expense, either procure the right for Customer to
continue using such Purchase(s) or replace or modify the same so as to
become non-infringing, while remaining compatible, functionally equivalent
and in conformity with the requirements of this Agreement. If neither of
the foregoing alternatives is reasonably possible. Supplier shall refund to
Customer an appropriate pro rata portion of amounts paid pursuant to this
Agreement and reimburse Customer for all reasonable expenses of removal and
replacement.
13. Insurance: Supplier shall at all times during the term of this Agreement,
at its own cost and expense, carry and maintain at a minimum, the insurance
coverage listed below with insurers having a "Best's" rating of at least B+XIII.
Supplier shall not commence any work hereunder until Supplier has fulfilled all
insurance requirements herein. Supplier shall require its subcontractors and
agents to maintain the same insurance coverage listed below.
13.1 Worker's Compensation insurance with statutory limits as required in
the state(s) of operation; and providing coverage for any Supplier employee
entering onto Customer premises, even if not required by statute.
Employers' Liability or "Stop Gap" insurance with limits of not less than
$100,000 each accident.
13.2 Commercial General Liability Insurance covering claims for injury,
death, personal injury or property damage bodily occurring or arising out
of the performance of this Agreement, including coverage for independent
contractor's protection (required if any work will be subcontracted),
premises-operations, products/completed operations and contractual
liability with respect to the liability assumed by Supplier hereunder. The
limits of insurance shall not be less than:
Each Occurrence $2,000,000.00
General Aggregate Limit $2,000,000.00
Products-Completed
Operations Limit $2,000,000.00
Personal and Advertising
Injury Limit $2,000,000.00
13.3 Comprehensive Automobile Liability Insurance covering ownership,
operation and maintenance of all owned, non-owned and hired motor vehicles
used in connection with the performance of this Agreement, with limits of
at least $1,000,000 per occurrence for bodily injury and property damage.
13.4 The insurance limits required herein may be obtained through any
combination of primary and excess or umbrella liability insurance. Supplier
shall forward to Customer certificates of such insurance upon execution of
this Agreement and upon any renewal of such insurance during the term of
this Agreement. The certificate(s) shall provide that (1) Customer
(including all participating affiliates) be named as an additional
insured(s) as their interest may appear with respect to this Agreement; (2)
thirty (30) days prior written notice of cancellation, material change or
exclusions in the policy shall be given to Customer; (3) coverage is
primary and not excess, or contributory with, any other valid and
collectible insurance purchased or maintained by Customer.
13.5 Any additional or different insurance requirements shall be specified
in Module(s), Schedule(s) or Attachment(s) to this Agreement.
14. ADVERTISING; PUBLICITY: Neither party shall use the other party's names,
marks, codes, drawings or Specifications in any advertising, promotional efforts
or any publicity of any kind without the prior written permission of such other
party.
15. ASSIGNMENT:
15.1 This Agreement shall be binding upon the parties' respective
successors and permitted assigns. Neither party may assign or delegate this
Agreement and/or any of its rights and obligations hereunder without the
prior written consent of the other party, which consent shall not be
unreasonably withheld. Any such attempted assignment shall be void.
However, Customer may assign this Agreement and delegate any of its rights
and/or obligations hereunder to its parents, subsidiaries of its parents,
or other affiliates, without the consent of Supplier. Any assignment of
amounts payable is void to the extent that it attempts to impose on
Customer obligations to the assignee, or to preclude
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Agreement No. 97050833
Customer from dealing solely and directly with Supplier in all matters
under this Agreement.
15.2. Notwithstanding the above, the parties acknowledge that
Customer may select at any time a "Prime Contractor" to provide and/or
manage the type of Purchases generally covered under this Agreement.
For and in consideration of the mutual covenants contained in this
Agreement, the parties hereby expressly agree that the Purchases,
duties, and obligations to be performed under this Agreement by
Supplier may be assigned and delegated to the Prime Contractor by
Customer. The parties hereby expressly consent to such an assignment
and delegation. The Prime Contractor will take the place of Customer
for all purposes and; Supplier will be obligated to the Prime
Contractor under the terms and conditions set forth under this
Agreement. The Prime Contractor and Supplier will be bound to the terms
of this Agreement in every way as if the Prime Contractor was named a
party to this Agreement. The Agreement between Prime Contractor and
Supplier will supersede the obligations and liabilities arising
thereafter under the Agreement. Customer agrees to provide Supplier
reasonable prior written notice.
16. FORCE MAJEURE: Neither party shall be liable for failure to perform
solely caused by unforeseeable force majeure circumstances beyond their control
("Force Majeure"). If such circumstances occur, the party injured by the other's
inability to perform may elect to: (1) terminate this Agreement in whole or in
part; or (2) suspend the Agreement, in whole or part, for the duration of the
Force Majeure circumstances; or (3) terminate any affected Order(s) and delete
the canceled quantity from its committed quantity for the year in which the
canceled quantity was to have been purchased. The party experiencing the Force
Majeure circumstances shall cooperate with and assist the injured party in all
reasonable ways to minimize the impact of such circumstances on the injured
party, including assisting in locating and arranging for substitute Purchases.
17. TIME IS OF THE ESSENCE: Time is of the essence in performance hereunder
and a significant and material term hereof.
18. WAIVER: The failure of either party to exercise any right shall not be
construed to be a waiver unless agreed upon in writing. A waiver in any one
instance will not constitute an amendment to this Agreement or indicate my
continued waiver of such right on any other occasion.
19. COMPLIANCE WITH LAWS:
19.1. Supplier shall obtain and maintain at its own expense all
permits and licenses and pay all fees required by law with respect to
any Purchases and/or performance of this Agreement. The parties shall,
in connection with performance of and Purchases under this Agreement,
comply with all applicable federal, state, and local laws, ordinances,
rules, regulations, court orders, and governmental or regulatory agency
orders ("Laws"), including, without limitation:
19.1.1. The Telecommunications Act of 1996 and all rules,
regulations and orders issued in connection with that Act and
this Agreement shall, to the greatest extent possible, be
construed to be consistent with the same;
19.1.2. Laws relating to non-discrimination in employment,
fair employment practices, equal employment opportunity,
employment opportunities for veterans, non-segregated
facilities, and/or employment of the disabled, except to the
extent a party is exempt therefrom; and the Laws and contract
clauses required by those Laws to be made a part of this
Agreement are incorporated herein by this reference;
19.1.3. The Laws referred to in Article 8 "Independent
Contractor";
19.1.4. Supplier acknowledges that Purchase(s) and/or
Confidential Information ("Exports") may be subject to U.S.
and applicable foreign export laws or regulations. Supplier
shall perform its obligations under this Agreement in a manner
consistent with the requirements of all applicable U.S. and
all applicable foreign laws and regulations, including the
U.S. export laws and regulations, the Foreign Corrupt
Practices Act, and anti-boycott laws, and U.S. export laws and
regulations prohibiting the unauthorized export or re-export
of certain items to residents of countries listed in U.S.
Export Administration Regulations. Specifically, Supplier
certifies and warrants that the shipment or provision of
Exports, any associated technical data or information, or the
direct product thereof, will not violate U.S. export laws or
regulations, or the import laws and regulations of all
applicable foreign states. Supplier shall be responsible for
obtaining, recording, filing, maintaining, and paying for all
export and import documentation including all licenses and
permits.
19.1.5. The Occupational Safety and Health Act of 1970 (as
amended) and all other Laws relating to safety and health,
including applicable motor carrier safety regulations.
Supplier shall be solely responsible for its safety, the
safety of its employees, its subcontractors and agents, and
its general work area, and the safety of Purchases hereunder
so that all Purchases comply with safety and health Laws when
used or performed. Supplier shall immediately remedy any
non-compliance and indemnify and hold Customer harmless from
my penalty, fine or Liabilities in connection therewith; and
19.1.6. The Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (as amended), and all
other Laws relating to that Act, and all other applicable
environmental Laws, including Laws relating to hazardous
materials, asbestos or toxic items. Supplier shall furnish
Customer with Material Safety Data Sheets that comply with
Laws and other environmental compliance data requested by
Customer.
19.2. The requirements of this Article 19 shall survive the
expiration, termination or cancellation of this Agreement. All
provisions of this Article shall also apply to all subcontractors, and
similar terms shall be included in all Supplier's contracts with
subcontractors.
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20. SEVERABILITY: Any term or provision of this Agreement which is held to be
invalid, void, unenforceable or illegal will in no way affect, impair or
invalidate the remaining terms or provisions, which will remain in full force
and effect, consistent with the original intent of the parties. However, if
such provision is an essential element of the Agreement, the parties shall
promptly attempt to negotiate a substitute therefore.
21. TERMINATION OF AGREEMENT OR ORDER(s):
21.1. Customer shall have the right to terminate this Agreement and/or any
Order(s), in whole or in part, upon thirty (30) days written notice to
Supplier. Upon receipt of notice of termination, Supplier shall place no
further orders, terminate contracts, take such action as directed by
Customer, and cease work, all in accordance with Customers notice.
21.2. Supplier's remedies for termination under this Article 21 shall be
limited to: (1) payment pursuant to the prices set forth in the Agreement
for Purchases properly performed or Delivered in accordance with this
Agreement prior to termination; and (2) partial payment for Purchases priced
by flat fee based on the percentage of proper completion in accordance with
this Agreement at the time of termination. Customer shall have no further
liability to Supplier as a result of the termination.
22. CANCELLATION FOR DEFAULT:
22.1. Either party may cancel this Agreement and/or any Order(s), in whole
or part, without liability, by giving written notice of breach or default if
the other (1) becomes insolvent, unable to pay debts when due, or the
subject of bankruptcy proceedings not terminated within thirty (30) days of
any filing; or makes a general assignment for the benefit of creditors; or
if a receiver is appointed for substantially all of its property; or (2)
materially breaches or defaults on its obligations under this Agreement and,
if the breach or default can be cured, fails to cure the breach or default
within thirty (30) days after receipt of written notice to cure; or (3)
commits breaches on obligations other than payment, repetitively, or at
least three separate significant times within any four-month period.
Customer may cancel any Order(s) in whole or in part, without liability, if
Supplier fails to Deliver conforming Purchases under that Order on time.
22.2. If Services are being provided, Customer shall have the right to take
over and complete the Services at Supplier's expense.
22.3. If Customer cancels this Agreement and/or any Order(s) for Supplier's
default or breach, it shall be entitled to recover from Supplier all losses,
damages and expenses incurred as a result of Supplier's default or breach.
Supplier shall refund to Customer amounts previously paid for Purchases
which, due to such cancellation, cannot reasonably be used by Customer, and
shall bear all expenses for their removal and return. Supplier shall, at
Customer's option, promptly remove Purchases or bear the cost of removal.
Supplier shall restore or bear the expenses of restoration of Customer's
property to its original condition at the direction of Customer and refund
to Customer all monies previously paid for such Purchases.
22.4. If Supplier cancels this Agreement and/or any Order(s) for Customer's
default or breach, it may recover from Customer reasonable expenses incurred
as a direct result of Customer's default or breach, which shall not exceed
the amounts which Customer has not yet paid under the terms hereof. Customer
shall not be liable for incidental, consequential or indirect damages,
including but not limited to lost profits or unallocated overhead.
22.5. Any cancellation by Customer under this Article which is set aside or
deemed wrongful will be deemed a termination under Article 21 "Termination
of Agreement or Order(s)" of this Agreement.
23. DISPUTE RESOLUTION:
23.1. Any claim, controversy or dispute which arises between the parties,
their agents, employees, officers, directors or affiliates ("Dispute") which
the parties are unable to settle through consultation and negotiation may be
mediated under the Commercial Mediation Rules of the American Arbitration
Association ("AAA") by a mutually acceptable mediator. Any Dispute which
cannot be resolved through negotiation or mediation shall be resolved by
binding arbitration as provided in this Article. The arbitrability of claims
shall be determined under the Federal Arbitration Act, 9 USC Secs. 1-16.
Notwithstanding the foregoing, the parties may cancel or terminate this
Agreement in accordance with its terms and conditions without being required
to follow the procedures set forth in this Article.
23.2. A single arbitrator engaged in the practice of law, who is
knowledgeable about the subject matter of this Agreement and the matter in
Dispute, shall conduct the arbitration under the rules of the AAA then in
effect, except as otherwise provided herein. The arbitrator shall be
selected in accordance with AAA procedures from a list of qualified people
maintained by the AAA. The arbitration shall be conducted in Denver,
Colorado, and all expedited procedures prescribed by the AAA rules shall
apply. The laws of Colorado shall govern the construction and interpretation
of this Agreement. The arbitrator's decision and award shall be final,
conclusive and binding, and judgment may be entered upon it in accordance
with applicable law in any court having jurisdiction thereof.
23.3. Either party may request from the arbitrator injunctive relief to
maintain the status quo until such time as the arbitration award is rendered
or the Dispute is otherwise resolved. The arbitrator shall not have
authority to award punitive damages. Each party shall bear its own costs and
attorneys' fees, and the parties shall share equally the fees and expenses
of the mediator and arbitrator.
23.4. If any party files a judicial or administrative action asserting
claims subject to arbitration, as prescribed herein, and another party
successfully stays such action and/or compels arbitration of said claims,
the party filing said action shall pay the other party's costs and expenses
and in seeking such stay and/or compelling arbitration and reasonable
attorneys' fees.
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Agreement No. 97050833
23.5. Supplier agrees that in the event of any Dispute between the
parties, it will continue to provide Purchases without interruption.
23.6. Supplier shall include in all contracts with its
subcontractors provisions similar to those in this Article 23,
requiring that all disputes in my way involving Customer shall be
settled by binding arbitration.
24. SEVERAL LIABILITY AND JOINT DISCOUNTS: The term Customer as used herein
may be applicable to one or more parties and the singular shall include the
plural. If more than one party is referred to as Customer herein, then their
obligations and liabilities shall be several, not joint. Notwithstanding the
foregoing, all Purchases under this Agreement and/or related agreements shall be
cumulative for purposes of determining: (1) whether Customer has met any minimum
purchase requirements; (2) credits which may be applicable; (3) Customer's
forecasts; (4) the level of discount, if any, which shall apply to any
Purchases; and (5) any other requirements or incentives based upon the volume or
amount of Purchases.
25. NONEXCLUSIVE AGREEMENT: It is expressly understood and agreed that this
Agreement does not grant to Supplier any exclusive privileges or rights and
Customer may contract with other suppliers for the procurement of comparable
Purchases. Customer makes no guarantee or commitment for any minimum or maximum
amount of Purchases hereunder.
26. REMEDIES CUMULATIVE: The remedies provided herein shall be cumulative
and in addition to my other remedies provided by law or equity.
27. SURVIVAL: The provisions of this Agreement that, by their sense and
context, are intended to survive performance by either or both parties shall
also survive the completion, expiration, termination or cancellation of this
Agreement.
28. AMENDMENTS: No change or modification of any terms or conditions herein
shall be valid or binding on either party unless made in writing and signed by
authorized representatives of both parties.
29. M/WBE SUBCONTRACTING PLAN: Support of Minority and Women Businesses is
part of Customer's ongoing business strategy. If required by Customer, Supplier
agrees and commits to subcontract in accordance with its subcontracting plan as
approved by Customer, and such subcontracting plan shall be incorporated herein
as an attachment to the General Terms and Conditions entitled "M/WBE
Subcontracting Plan".
30. ELECTRONIC DATA INTERCHANGE ("EDI"): It is Customer's objective to
procure Purchases utilizing EDI. If Supplier is EDI capable, Customer and
Supplier shall enter into a Trading Partner Arrangement to implement EDI
transactions and such arrangement will be incorporated herein as an attachment
to the General Terms and Conditions, entitled "Electronic Data Interchange."
31. ENVIRONMENTAL: Supplier shall utilize its best efforts, wherever
applicable to the Schedule, to: Provide environmentally preferable energy
efficient Products and Services (based on EPA issued guidelines); provide
Products and Services that eliminate or reduce the generation of hazardous
waste/materials and the need for special material processing; and, Supplier
shall provide Products and Services that promote the use of non-hazardous,
recovered and recycled materials.
32. ENTIRE AGREEMENT: Terms and Conditions and all Special Provisions
Modules, together with all incorporated Schedules, exhibits, Order(s), any other
attachments, and amendments, shall constitute the entire Agreement between the
parties. Any preprinted terms and conditions on Order(s), acknowledgment forms,
or other forms or documents shall not apply and are objected to. This Agreement
supersedes all prior oral and written communications, agreements and
understandings of the parties with respect to the subject of this Agreement,
33. COUNTERPARTS: This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which taken together shall
constitute one and the same instrument.
34. AUTHORITY; JOINT PREPARATION: The parties represent and warrant that
they are duly authorized and have received all necessary consents to enter into
this Agreement, and that the signatories are duly authorized to bind the parties
to this Agreement. Each party acknowledges that it has reviewed this Agreement
and participated in its preparation and understands the provisions of this
Agreement. This Agreement and my ambiguous language shall not be construed
against either party for having prepared it.
35. SUPPLIER RELATIONSHIP: It is the parties' objective to support and
strengthen their working relationship to ensure performance and mutual
satisfaction under this Agreement. In support of this objective, the parties my
enter into and attach to the General Terms and Conditions as attachment,
entitled "Working Relationship."
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Agreement No. 97050833
U S WEST COMMUNICATIONS, INC.
/s/ Sol Trujillo
- ---------------------------------
(Authorized Signature)
Sol Trujillo
- ---------------------------------
(Print or Type Name of Signatory)
President and CEO
- ---------------------------------
(Title)
August 21, 1997
- ---------------------------------
(Execution Date)
NEXT LEVEL COMMUNICATIONS
/s/ Pete Keeler
- ---------------------------------
(Authorized Signature)
Pete Keeler
- ---------------------------------
(Print or Type Name of Signatory)
President
- ---------------------------------
(Title)
August 26, 1997
- ---------------------------------
(Execution Date)
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AGREEMENT NO. 97050833*P*2
PRODUCT SCHEDULE NO. TWO
This Product Schedule No. Two ("this Product Schedule") is attached to the
Special Provisions Module - Products and is a part of Agreement No. 97050833,
effective as of August 8, 1997, between U S WEST Communications, Inc.
("Customer") and Next Level Communications ("Supplier"). This Product Schedule
is subject in all respects to the Special Provisions Module - Products, except
that in the event of a conflict between this Product Schedule and the Special
Provisions Module - Products, the terms and conditions of this Product Schedule
shall govern for the purposes of this Product Schedule only.
1. SCOPE:
1.1 This Product Schedule establishes the terms and conditions
under which Customer may purchase the Product(s) set forth herein from
Supplier from time to time.
1.2 "Customer" for purposes of this Product Schedule means U S
WEST Communications, Inc.
1.3 Supplier's response to RFP R100523, Access, specifically
Sections 3, Requirement for Product/Services; 5, Documentation; and 6,
Quality and Reliability, are incorporated herein by this reference and
attached hereto as Supplier's representations as Exhibit B. Customer
shall have the right to rely upon such representations, except as
expressly modified or otherwise deleted in this Agreement.
1.4 Supplier hereby represents that its NLevel(3) Switched Digital
Access Systems(R) product will provide as follows:
1.4.1 A complete access platform along with its management
system, the associated network and customer equipment.
1.4.2 A variety of service capabilities to the users'
network interfaces. These interface requirements can range
from POTS to ISDN to Internet access. This may consist of an
extension of an existing Digital Loop Carrier (DLC) system or
the distribution side of my existing cross connect point.
There is a tremendous need to provide additional facilities
(both residential and business) in areas that we currently at
capacity but wholesale replacement of the facilities is cost
prohibitive.
1.4.3 Fiber to the Curb solutions.
1.4.4 Shortage solutions in growth areas. This includes
areas currently fed by copper, DLC systems, and/or fiber
multiplexers.
1.4.5 Data/video (xDSL, VDSL) on existing copper plant.
1.4.6 POTS and data/video (xDSL, VDSL) on existing copper
plant.
2. TERM OF PRODUCT SCHEDULE: This Product Schedule shall be effective from
October 15, 1998 through October 14, 2001 unless terminated or canceled
pursuant to the terms of this Agreement. The parties may extend the term or any
subsequent term of this Product Schedule by executing a separate written
agreement of extension prior to the expiration of the term.
3. PRODUCT(S) DESCRIPTION AND PURCHASE PRICE: Supplier shall provide to
Customer the Product(s) described in Exhibit "A," entitled "NLevel(3) Switched
Digital Access Systems(R) Product Schedule," dated October 7, 1998, a copy of
which is attached hereto and by this reference incorporated herein.
4. WARRANTY TERM:
4.1 Supplier's warranty for Product(s) shall commence upon date of
invoice and shall continue thereafter for a period of [ * ].
4.2 The warranty period for any Product(s) corrected or replaced
shall be [ * ] from Delivery of the corrected or replaced Product(s) or
the original warranty period, whichever period is longer.
4.3 The warranty period for the hardware portion of all Access
Systems and related products shall be [ * ] from the date of invoice.
Should out-of-box failures occur or new products fail, said products
shall be replaced with new products for similar fit and function.
Should products fail or become defective while in service, said
products shall, at Supplier's option, be repaired or replaced with
refurbished products. The warranty period for the repaired or replaced
products shall be the remainder of the original warranty or ninety (90)
days, whichever is greater. If Supplier is not the manufacturer or
licensor, Supplier shall obtain and pass to Customer manufacturer's
complete warranty.
4.4 The warranty for Customer Premises Equipment (CPE) intended
for use outside of Supplier's network interfaces shall be [ * ] from
the date of invoice. Such CPE shall include but not be limited to set
top boxes, residential gateways, data modem or set devices, and NIC
cards. During the warranty period, Supplier shall replace any defective
products or products that suffer out-of-box failure with new product of
similar fit and function. Should products fail or become defective
while in service, said products shall, at Supplier's option, be
repaired or replaced with refurbished products. The warranty period for
the repaired or replaced products shall be the remainder of original
warranty or ninety (90) days, whichever is greater.
4.5 The warranty period for the software utilized in View1 and
View2 product shall be [ * ] from the date of installation on
a workstation or computing platform. Said software is warranted to
conform to and perform in accordance with Supplier's specifications as
contained in Supplier's documentation when said software is operated on
the computing platform(s) outlined in Supplier's specifications. During
the warranty period, and at no charge, Customer shall received any and
all enhancements and maintenance releases issued by Supplier, and
shall, have unrestricted access to Supplier's TAC center for technical
support and assistance during normal business hours (6:00 a.m. to 5:00
p.m. PST). During non-business hours
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AGREEMENT NO. 97050833*P*2
Customer's access shall be restricted to service problems and
emergencies only. Upon Customer's purchase of any new feature release
license, Customer's warranty shall be extended to a period of [ * ]
years from the date of installation of the software release on a
workstation.
5. TRANSPORTATION, SHIPPING AND DELIVERY:
5.1 Supplier shall ship Product(s) in accordance with Customer's
instructions. Product(s) shall be shipped FOB Origin, Freight Collect.
Customer shall have the right to designate the transportation carrier
in any Order(s). Unless otherwise agreed, transportation charges shall
be limited to actual common carrier charges. Invoices reflecting
transportation charges shall be accompanied by legible copies of
prepaid freight bills, express receipts or bills of lading or other
supporting documents, as requested by Customer.
5.2 Customer may specify the Product(s) freight classifications in
its Order(s). If not so specified, Supplier shall classify Product(s)
and invoice Customer for freight charges in accordance with the current
National Motor Freight classifications.
5.3 Unless otherwise agreed, transportation charges payable by
Customer shall not exceed the lowest available cost of shipment between
the Delivery location and Supplier's nearest facility from which
Product(s) can normally be shipped. Nothing herein shall be construed
to alter or amend the Delivery schedule contained in any Order(s).
5.4 Customer will reimburse Supplier only those costs for rigging
and drayage performed at Customer's site, made at Customer's request,
if the costs thereof are not part of the price in any Order(s).
5.6 Supplier shall obtain and maintain, at its expense, cargo and
riggers insurance to cover the value of Product(s) being shipped.
5.7 Supplier shall be responsible for all misdirected shipments.
Misdirected shipments from Supplier shall be immediately reshipped by
Supplier prepaid to the correct destination. Customer shall be entitled
to deduct from Supplier's invoice all costs incurred by Customer due to
the reshipping.
5.8 Supplier's noncompliance with Customer's routing instructions
shall render Supplier liable for all risk of loss and excess freight
charges. Supplier shall be responsible for all charges in excess of
normal pricing, which result from deviation from normal service or
routing by Supplier.
5.9 Supplier shall not use premium transportation without the
prior written authorization of Customer. Premium transportation is any
service that produces a transportation cost higher than the cost that
would be incurred on a shipment via normal transportation.
5.10 It is understood and agreed to between the parties that
Supplier remains fully responsible to meet the Delivery Date as
specified in my Order(s) even though the Product(s) are shipped FOB
Origin, Freight Collect or per Customer's instructions. If Supplier
fails to meet a Delivery Date due to the sole negligence or fault of
the common carrier transporting said Product(s), Supplier agrees to use
its best efforts to: (a) reposition Customer to the front of Supplier's
manufacturing schedule; and (b) promptly and immediately reship
replacement Product(s) to Customer. Supplier will use reasonable
efforts to maintain a safety stock inventory on long lead Product(s).
5.11 Supplier shall Deliver Product(s) in time to meet the Delivery
Date; provided however: (a) Supplier shall not Deliver any Product(s)
prior to the Delivery Date without Customer's consent; and (b) Customer
and Supplier may agree in writing to change my Delivery Date.
5.12 Delivery interval(s) shall be thirty (30) days after receipt
of Order(s).
5.13 If the Delivery date specified in an Order is not met by
Supplier, then a late charge of [ * ] shall apply. Customer shall have
the right to credit any late charge against Supplier's invoices.
Customer's late charge shall not be deemed to constitute liquidated
damages, and Customer reserves all remedies provided in this Agreement
or at law.
6. PRICE PROTECTION:
6.1 For a period of [ * ] after the effective date of this
Product Schedule, the prices, rates, charges or fees for Product(s)
shall be as set forth in Paragraph 3, of this Product Schedule.
However, annual review of Product Schedule by Customer with Supplier
shall occur to determine appropriate adjustments based on current state
of development of the technology, and other market factors that could
affect price.
6.2 Supplier warrants that the prices, rates, charges or fees for
Product(s) sold hereunder are not less favorable than those currently
and in the future extended to other customers for the same or similar
Product(s) in similar quantities. Customer shall automatically have
the benefit of any lower prices, rates, charges or fees. Supplier
warrants that the prices shown on Order(s) are complete, and no
additional charges (including but not limited to shipping, packaging,
labeling, custom duties, storage, insurance, boxing and crating) shall
be added to Order(s) without Customer's express written consent.
6.3 Notwithstanding any other provision in this Product Schedule
or Order(s), Supplier shall not Deliver Product(s) and Customer shall
not be required to pay for Product(s) in excess of the quantity or
requirements set forth in the Order(s) unless Customer has first
executed a written acknowledgment to an order(s) authorizing the
increased expenditure.
7. REPORTS: supplies shall maintain a performance service level
of [ * ] percent or above for Delivery of all Order(s) issued within
the contracted intervals. Supplier shall provide to Customer its Performance
Service Reports in hard copy and on a ASCII DOS formatted 3 1/2" floppy disk
(written information shall accompany the disk that details the column widths for
each data field). Supplier shall mail the Reports to the address and person
indicated by Customer. Supplier's Performance Service Reports shall contain the
following:
7.1 Order(s) number;
7.2 Order issued date;
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AGREEMENT NO. 97050833*P*2
7.3 Order "On Job Date;"
7.4 Number of changes to Order;
7.5 Deliver performance on Order "On Job Due;"
7.6 Supplier ship date;
7.7 Quantity;
7.8 Full or partial shipment;
7.9 Order(s) received and returned by Customer;
7.10 Order(s) canceled prior to shipment;
7.11 Supplier's Delivery (contracted interval of performance); and
7.12 Supplier's assessment of performance.
8. OWNERSHIP: Upon Acceptance of products and payment to Supplier,
Customer shall own all products.
9. RESTOCKING CHARGE: Customer may at my time subsequent to Delivery
return Purchases to Supplier for credit. For any Purchases returned that are not
useable by Supplier's other customers within sixty (60) days, the Parties agree
they will use good faith efforts to reach an agreement as to an appropriate
amount due Supplier. However, in no event shall the amount due Supplier from
Customer exceed ten percent (10%) of the unit price of the Purchases returned.
10. UNCONFIRMED ORDERS: Customer may designate any Order(s), prior to
Supplier's acceptance, as unconfirmed Order(s). Unconfirmed Order(s) shall
establish Customer's position in Supplier's manufacturing, delivery and Services
schedule, and shall establish prices. Customer shall confirm, extend or withdraw
the unconfirmed Order(s) within thirty (30) days of issuance. Any Order(s) not
confirmed or extended shall be deemed to be terminated. Customer shall be under
no obligation to Supplier until the unconfirmed Order(s) have been confirmed.
11. PURCHASE SPECIFICATIONS AND REQUIREMENTS:
11.1 RF(X) Documentation provided to Customer by Supplier
regarding this project and Supplier's Specifications which have been
approved by Customer, including drawings, relating to Purchases are
hereby made a part of this Schedule. To the extent that any Order(s)
specifically provides for a variation from such Specification, the
requirements of the Order(s) shall control.
11.2 Supplier shall provide, as requested by Customer and at no
charge, any applicable drawings and updates thereof, in accordance with
U S WEST Technical Publications 77352 entitled "Central Office
Telecommunications Equipment Standard Drawing Requirements,"
incorporated by reference and made a part hereof, and 77002 entitled
"Technical Drawing Media Standards," incorporated by reference and made
a part hereof, to Customer's Central Office Record Center, located at
U S WEST Communications, Inc., 700 West Mineral Avenue, Littleton,
Colorado 80120. Supplier shall also provide, at no charge, and on an
ongoing basis, a current index of all drawings, showing latest issue
numbers, as well as complete descriptive information, to Customer's
Central Office Record Center. Such index shall be furnished in
accordance with U S WEST Technical Publication 77002. If Customer
requires additional copies of Supplier's drawings and index, such
drawings and index shall be made available to Customer at no charge.
11.3 Supplier shall promptly furnish for Purchases, standard site
preparation Specifications, if applicable, in such detail to ensure
that Purchases(s) can be properly installed. Any alterations or
modifications required in site preparation attributable to Supplier's
incomplete or erroneous Specifications shall be made at Supplier's
expense.
11.4 Upon Customer's request, Supplier shall provide with each
Order of Purchases, current applicable Purchases drawings in accordance
with Technical Publication 77352 and in the type of media as specified
by Customer. Such drawings shall be delivered to the Purchases Delivery
location and to the engineering location specified in the Order(s).
11.5 Customer shall have the right to reproduce Specifications,
including drawings and updates thereof for the purposes of engineering,
installing, maintaining, repairing and operating Purchases.
12. SUPPLIER QUALITY ASSURANCE AND INSPECTION:
12.11 If Supplier is the manufacturer, Supplier shall test and inspect
all Purchases and Software prior to shipment to Customer.
12.2 Supplier agrees to inform Customer in writing in advance of
any scheduled change(s) in Supplier's manufacturing processes or
quality control procedures or practices when such change(s) may affect
from, fit, function, quality or reliability of Purchases or Software.
12.3 Customer reserves the right to inspect manufacturing
facilities, processes and finished Purchases or Software prior to the
shipment date to verify compliance with the requirements herein or any
Order(s). Such inspection shall not relieve Supplier of any obligations
under the Agreement or my Order(s) nor shall such inspection be deemed
Acceptance.
12.4 Customer reserves the right to stop shipment of ordered
Purchases if they fail the inspection referred to in the paragraph
above.
12.5 Supplier will provide, at the request of Customer, access to
its quality control activity results, data, reports, charts,
procedures, manuals, requirements, practices and methods for incoming
or in-process Purchases or Software.
12.6 If Customer observes Supplier's deviation from Supplier's
quality control procedures or observes quality control activity results
which may indicate worsening Purchases or Software quality or
reliability, Supplier will, upon written request, formulate a
corrective action plan and submit it to Customer for review and
acceptance.
12.7 Supplier shall comply with the provisions in U S WEST
Technical Publication 77357, entitled
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AGREEMENT NO. 97050833*P*2
"Engineering Complaints and Service Failure Analysis Reports"
incorporated by reference and made a part hereof. All documentation
relating to U S WEST Technical Publication 77357 shall be submitted by
Supplier to the address specified in U S WEST Technical Publication
77357.
12.8 Supplier shall comply with the current issues of Technical
Requirement Documents TR-NWT-000815 entitled "Network Element (NE)
Memory Administration Network Element and Network System Security,"
Issue 2, December 1992 and TR-NWT-000835 entitled "Operations
Application Messages - Network Element and Network System Security
Administration Messages" Issue 3, January 1993, and any subsequent
revisions and updates, at no charge.
12.9 Changes to Purchases or Software shall be in accordance with
U S WEST Technical Publication 77354, Guidelines For Product Change
Notices, incorporated by reference and made a part hereof. All
documentation relating to U S WEST Technical Publication 77354 shall be
submitted by Supplier to the address specified in U S WEST Technical
Publication 77354.
13. MARKING: Purchases and Software shall be marked by Supplier with the
following information, at no additional charge: (1) Supplier model and serial
numbers, if applicable; and (2) date of shipment or manufacture. Supplier shall
add any other identification which Customer may request, at Customer's expense.
14. REIMBURSABLE EXPENSES: Supplier shall be reimbursed only for
reasonable and necessary expenses incurred in connection with performance under
this Schedule and authorized in writing in advance, and meeting the criteria
below. Supplier shall provide monthly itemized statements of reimbursable
expenses, containing the Agreement and Schedule numbers under which the expenses
were incurred, with receipts attached for each single expenditure in excess of
twenty-five dollars.
14.1 Airfares: Unless waived below, all air reservations must be
made through Customer's authorized travel agency. If air reservations
are not made through Customer's authorized travel agency, airfares will
not be reimbursed. If waived, airfares shall be at the lowest rate
available not to exceed coach. TRAVEL AGENCY [ ] WAIVED [ X ]NOT
WAIVED.
14.2 Personal Automobile, Mileage: at $0.315 per mile for actual
miles traveled in performance under this Schedule.
14.3 Automobile, Rental: Where necessary for performance under this
Schedule, a subcompact or compact shall be used unless more than four
(4) people share the same car; where two (2) or more of Supplier
personnel are at the same site in connection with one Order, one (1)
car shall be shared by up to four (4) individuals.
14.4 Meals: shall not exceed thirty-five dollars per day per person
14.5 Lodging: at reasonable rates for the locale
14.6 Telephone Calls: those necessary for performance under this
Schedule. Personal calls are not reimbursable.
15. TRAINING:
15.1 Supplier shall provide sufficient training, training materials
and support to Customer to enable Customer to use Purchases to train
Customer's training instructors.
15.2 Supplier shall provide a list of prices for training manuals,
courses and support.
15.3 Customer shall have the right to reproduce training material
for internal use and for the purpose of training Customer or others
subject to the requirements herein dealing with "Confidential
Information." Such rights shall include photographic, video and audio
recordings of any training or training material.
15.4 "Training Services" means instructing, teaching, qualifying,
or certifying Customer's or others' employees or providing other
related services.
15.5 Supplier shall provide, as required by any Order(s), personnel
to conduct training and instructional aids appropriate for each course,
including books, pamphlets and diagrams.
15.6 Customer may, without liability, terminate any Training
Services by giving Supplier written notice ten (10) days prior to the
commencement date.
15.7 If Customer terminates any Training Services within one (1)
days of or after the commencement date, the parties will agree to a
reasonable fee for Supplier's time thus far.
16. MANUALS AND DOCUMENTATION:
16.1 Supplier shall provide at no additional charge, one (1)
complete paper set and one (1) complete electronic set of current
manuals and Documentation for each type of Purchases purchased by
Customer to: as specified by Customer.
16.2 With every Order Supplier shall deliver one (1) paper set of
Order specific manuals and one paper set of Order specific
Documentation at no additional charge. Supplier shall also deliver one
electronic set of Order specific manuals and Order specific
Documentation at no additional charge.
16.3 Manuals and Documentation will describe in detail the
engineering, installation, maintenance, repair and operation of
Purchases, Software and/or Products or Software resulting from
Services.
16.4 Supplier shall, at no additional charge, provide all future
updates, revisions and corrections of manuals and Documentation.
16.5 Customer shall have the right to reproduce manuals and
Documentation for the purpose of engineering, installing, maintaining,
repairing and operating Purchases. Reproduction shall include the
copyright or similar proprietary notices.
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AGREEMENT NO. 97050833*P*2
17. FUTURE AVAILABILITY OF REPAIRS, REPLACEMENT PARTS, AND MAINTENANCE NOT
COVERED UNDER WARRANTY:
17.1 "Repair Services" means inspecting for damages, repairing,
cleaning, lubricating, adjusting, calibrating, restoring or rebuilding,
refurbishing, testing and retrofitting engineering changes and updates,
and performing similar Services on Purchases not covered under
Maintenance Services or Warranty.
17.2 Supplier shall maintain the capability to perform Repair
Services or replace Purchases for [ * ] after the last purchase of such
Purchases. Replacement Purchases shall conform to the original
Purchases in form, fit and function. Repair or replacement shall be
accomplished within Supplier's published repair intervals or as agreed.
17.3 Supplier shall perform Repair Services in accordance with
Specifications and the requirements of this Schedule or any Order(s).
17.4 Unless otherwise specified in any Order(s), Supplier shall
perform Repair Services and return repaired Purchases within Supplier's
published repair interval. If Supplier has no published repair
interval, the parties shall mutually agree on an interval.
17.5 New or equivalent parts shall be used in effecting repairs or
replacement. Parts which have been removed from Purchases, shall become
Supplier's property. Parts which are installed in Purchases shall
become Customer's property.
17.6 If an emergency or out-of-service condition exists, Supplier
shall perform Repair Services within twenty-four hours (24) of
Supplier's receipt of Purchases.
17.7 If Purchases returned to Supplier are determined to be
irreparable, Supplier shall notify Customer and request disposition
instructions for such Purchases. If requested by Customer, Supplier
shall dispose of the irreparable Purchases and pay Customer the salvage
value. Customer's liability with regard to irreparable Purchases shall
be limited to transportation charges associated with the return of
Purchase.
17.8 Repaired and replacement Purchases shall be warranted as
outlined in the Warranties provisions contained in this Agreement.
17.9 Repaired Purchases shall have the warranty expiration date
identified in a permanent manner at a readily visible location or as
otherwise agreed. Repaired Purchases shall be returned with a tag or
other papers describing the Repair Services and any other modifications
and improvements which have been made.
17.10 Supplier shall be strictly liable for loss of or damage to
Purchases in its care, custody or control.
17.11 If Supplier is unable to maintain the capability to repair or
replace Purchases pursuant to the requirements set forth herein,
Supplier shall provide Specifications to enable other Customer
contractors to manufacture or Customer to obtain parts from third
parties. Such Specifications shall include, but not be limited to the
following:
A. Manufacturing drawings and Specifications of raw
materials and components comprising such parts;
B. Manufacturing drawings and Specifications covering
tooling and the operation thereof, and
C. A detailed list of all commercially available parts
and components including the part number, name and location of
Supplier, prices and functional descriptions.
17.12 Supplier shall provide written notification [ * ] prior to
discontinuing the manufacture of items of Purchases.
18. TECHNICAL SUPPORT:
18.1 Supplier shall provide for a period of [ * ] after the last
purchase of Purchases, technical support to assist Customer in the
engineering, installation, operation and maintenance of Purchases.
18.2 Supplier shall make such technical support available at no
charge during the warranty period.
18.3 After expiration of the warranty period such technical support
shall be available at Supplier's then current rates plus reimbursable
expenses as pre-authorized by Customer. Off-site technical support
shall be at no charge.
19. COMPLIANCE WITH LAWS AND REGULATIONS:
19.1 Radio Frequency Energy Standards: Appropriate Purchases shall
comply with the requirements of the Federal Communications Commission's
Rules and Regulations, Part 15, Subparts A, B, and C, and Part 2,
Subpart J as applicable and as amended, including those sections
concerning the labeling of such Purchases and the suppression of
radiation to specified levels.
19.2 Lightwave Radiation: Purchases containing laser devices must
meet the requirements of the United States Department of Health and
Human Services, and the Bureau of Radiological Health regulations,
including, but not limited to, those sections concerning the labeling
of Purchases and the suppression of lightwave radiation to specified
levels.
19.3 Registration: Appropriate Purchases shall comply with the
Federal Communications Commission's Rules and Regulations, Part 68.
20. INSTALLATION AND REMOVAL SERVICES:
20.1 "Installation Services" means constructing, erecting, placing,
moving, modifying, unpacking, connecting, wiring, cabling, inspecting
and testing Purchases and/or Software or perforating similar work as
ordered.
20.2 "Removal Services" means disconnecting, de-cabling,
dismantling, mining, packing or performing similar work affecting
Customer's Purchases as ordered.
Page 5 of 15
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NEED TO KNOW.
* Certain information on this page has been omitted and filed separately with
the Comission. Confidential treatment has been requested with respect to the
omitted portion.
<PAGE> 17
AGREEMENT NO. 97050833*P*2
20.3 For Installation and Removal Services performed in central
offices, Supplier shall perform such Services in accordance with U S
WEST Technical Publication 77350, entitled "Central Office
Telecommunications Equipment Installation and Removal Guidelines,"
incorporated by reference and made a part hereof.
20.4 Supplier shall provide all labor, tools (including portable
tools and test sets) portable buildings and toilets, trailers, storage
facilities, vehicles, equipment and other materials required.
20.5 Supplier shall receive, uncrate, unpack and inspect for damage
all Purchases and/or Software to be installed and shall promptly notify
Customer of any shortage or damage. If Supplier fails to make such
notations, Supplier shall be responsible for all loss of or damage to
Purchases and/or Software. When Supplier is also providing the
Purchases and/or Software, Supplier shall be solely responsible for all
claims, reordering and replacement of affected Purchases and/or
Software.
20.6 Supplier shall provide its current installation quality
standards, including workmanship standards, test and inspection
methods, sampling plans, test equipment calibration methods and
requirements, methods for determining acceptance quality levels and
similar criteria for administering Supplier's quality assurance
program.
20.7 Supplier shall conduct tests and analysis of installed
Purchases in accordance with Specifications and the requirements herein
and any Order(s), prior to the date stated in the Order(s) for
completion of installation and removal services.
20.8 Title to Customer's removed Purchases shall remain with
Customer.
20.9 Invoice and Payment: Installation and Removal Services, which
are scheduled to be completed in twelve (12) weeks or less, shall be
invoiced within thirty (30) days following the date Services are
completed. Services which are scheduled to be completed in more than
twelve (12) weeks shall be invoiced on a monthly basis for charges
accrued during the preceding month. Twenty percent (20%) of the total
amount payable may be withheld by Customer until the Services have been
accepted.
21. ENGINEERING SERVICES:
21.1 "Engineering Services" means analyzing, planning, designing,
pricing, detailing, drafting, creating specifications, ordering and
otherwise technically describing or specifying Purchases as ordered.
21.2 Supplier shall perform Engineering Services in accordance with
Specifications and the requirements herein and in any applicable
Order(s).
21.3 Engineering Services associated with central office equipment
shall be performed in accordance with the requirements of U S WEST
Technical Publication 77351 entitled "Central Office Telecommunication
Equipment Engineering Standards," incorporated by reference and made a
part hereof.
21.4 Drafting of Customer's central office drawings shall be
performed in accordance with U S WEST Technical Publication 77353,
entitled "Central Office Drawing Standards," incorporated by reference
and made a part hereof.
21.5 Results of Engineering Services including, but not limited to,
equipment specifications, office records, drawings and summaries of
Purchases shall become the exclusive property of Customer upon
Delivery, and shall not be used by Supplier for my other purposes.
21.6 Engineering Services Support: Notwithstanding any acceptance
by Customer, Supplier's obligation to provide Engineering Services
shall include support for such Services until the expiration of the
warranty period. Such support shall be available to Customer on-site,
if requested, at no additional charge and shall not be limited to
Supplier's normal working hours.
21.7 Invoice and Payment: Engineering Services, which are scheduled
to be completed in twelve (12) weeks or less, shall be invoiced within
thirty (30) days following the date Services are completed. Engineering
Services which are scheduled to be completed in more than twelve (12)
weeks shall be invoiced on a monthly basis for charges accrued during
the preceding month. Twenty percent (20%) of the total amount payable
may be withheld by Customer until the Services have been accepted.
22. MAINTENANCE SERVICES:
22.1 "Maintenance Services" means those Preventive, Remedial and
similar services performed by Supplier for a specified period of time
for a specific application.
22.2 "Principal Period of Maintenance" (PPM) means a consecutive
period from 8:00 a.m. to 7:00 p.m., EST in the continental U.S.A. and
8:00 a.m. to 5:00 p.m. local time, outside the continental U.S.A. at
site where Purchases are installed, occurring daily, Monday through
Friday, excluding New Year's Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
22.3 "Preventive Maintenance" means Maintenance Service performed
by Supplier on a scheduled basis to keep Purchases in good operating
condition as required in the Order(s). Preventive Maintenance may
include, but not be limited to:
A. Calibrating, testing, adjusting, cleaning,
lubricating, replacing worn or defective parts and performing
minor circuit updating and modification;
B. Maintenance and Engineering Services necessary to
retrofit or otherwise install engineering changes,
modifications and improvements made to any Purchases by
Supplier during the maintenance term for that (those)
Purchases; and
C. Automatic update services for all Manuals and
Documentation furnished with Purchases.
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<PAGE> 18
AGREEMENT NO. 97050833*P*2
22.4 "Remedial Maintenance" means maintenance performed by Supplier
which is necessary to return inoperative or malfunctioning Purchases to
good operating condition.
22.5 The following shall be automatically eligible for Maintenance
Services without further conditions:
A. Purchases installed by Supplier, immediately upon
installation;
B. Purchases certified by Supplier as being eligible for
Maintenance Services;
C. Purchases maintained by Supplier, upon expiration of
the maintenance term; and
D. Purchases under warranty, upon expiration of the
warranty period.
22.6 Supplier shall inspect all other Purchases or systems and shall
notify Customer in writing of its condition and eligibility.
22.7 Preventive Maintenance shall be performed in a manner which
does not unreasonably interfere with Customer's use of Purchases.
Within two (2) days after acceptance of the Order(s), Supplier shall
specify in writing the frequency and duration of such maintenance, and
thereafter Customer will specify the schedule. This schedule may be
modified by written agreement.
22.8 Supplier shall provide a telephone number at which Customer
may obtain Remedial Maintenance. Maintenance personnel shall arrive
within one (1) hour, or as otherwise agreed, after receipt of
notification that Remedial Maintenance is required. Only one (1)
maintenance representative shall respond unless it is agreed that more
than one is required. Supplier may, at no additional charge, send
additional personnel.
22.9 Supplier shall provide continuously updated maintenance
organization charts, up to and including the national support level.
The charts shall include twenty-four hours (24) a day and seven (7)
days a week contact information.
22.10 Maintenance Service includes the following:
A. Preventive Maintenance;
B. Remedial Maintenance;
C. Additional Remedial Maintenance required due to a
recurrence of the same malfunction within a thirty day period;
D. Remedial Maintenance required when Preventive
Maintenance was not performed prior to occurrence of the
malfunction;
E. Parts required for Preventive or Remedial
Maintenance;
F. Labor to retrofit engineering changes for Purchases
purchased from Supplier;
G. Relocation of Purchases at Customer's site, if
requested by Customer and as agreed, during the term of
Maintenance Services;
H. Unpacking, installing, removing, packing and moving
including supervising such Services, or Purchases required in
the course or performance of Maintenance Services;
I. Performance of Acceptance tests; and
J. Refurbishment, rehabilitation or rebuilding services,
including parts and labor, for Purchases that has (have) been
in operation at one (1) or more of Customer's sites, or at
other locations selected by Customer, for less than seven (7)
years after the Acceptance Date, if such Purchases has (have)
been maintained by Supplier throughout its operation.
22.11 Supplier shall use only new parts, or parts of equal quality
and operating specifications, in performing Preventive or Remedial
Maintenance. Parts that are removed and replaced by Supplier shall
become the property of Supplier. All parts placed in operation shall be
additions to Purchases and shall become Customer's property.
22.12 Supplier shall keep a reasonable inventory of spare parts for
Purchases at Customer's site to make emergency repairs.
22.13 Supplier shall furnish and maintain a legible maintenance log
at each of Customer's maintenance sites which shall be available to
Customer for inspection. This log shall include:
A. Date and time Supplier was notified;
B. Date and time of arrival of Supplier's maintenance
personnel at Customer's site;
C. Nature of Services (Preventive or Remedial
Maintenance) provided;
D. Type, model number, serial number and location of
Purchases serviced;
E. Time Purchases were made available to Supplier and
the time Purchases were returned to service;
F. Total actual time expended performing Maintenance
Services;
G. Description of the malfunction, including known
causes;
H. Corrective action taken, including replacement parts
used;
I. Identification and signature of Supplier's
representatives; and
J. Customer's signature, if required.
22.14 Customer will, at no charge, provide reasonable space to
Supplier for spare parts and working space and will provide heat,
light, ventilation and power for use by Supplier's maintenance
personnel. Supplier shall maintain this space in an orderly manner,
consistent with Customer's site rules. Customer will not be liable for
loss or damage to Supplier's equipment or materials stored on
Customer's premises, except to the extent caused solely by Customer.
22.15 Notwithstanding the term of Services specified in the
Order(s), Customer may terminate Maintenance Services for its
convenience and at no charge upon thirty (30) days prior written notice
to Supplier.
Page 7 of 15
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NEED TO KNOW.
<PAGE> 19
AGREEMENT NO. 97050833*P*2
22.16 Supplier shall provide Customer a detailed description of its
maintenance escalation guidelines prior to the commencement date.
23. PRODUCT(S) EVALUATION:
23.1 Supplier may provide to Customer certain Product(s) as further
described in a Request for Evaluation ("RFE") for the purposes of
Customer evaluating the applicability of such Product(s) to its
business, subject to the following: (1) Customer shall issue an RFE;
and (2) The term of the RFE shall be as set forth in the RFE.
23.2 An RFE shall be signed by both parties and shall include, at
a minimum, the following:
A. A description of the Products and/or Software and
delivery date;
B. The period of time for the evaluation;
C. Specifications and performance requirements;
D. Contacts for both Parties, including their phone
numbers;
E. Location of Products and/or Software;
F. Supplier's Responsibilities; and
G. Customer's Responsibilities.
23.3 Customer agrees not to use Products after the expiration of
the evaluation unless and until a separate written agreement of
extension is executed by the Parties.
23.4 At the end of the evaluation Customer shall notify Supplier of
its decision. At the end of the evaluation term if Supplier has not
been notified as to whether Customer desires to purchase Purchases
Supplier will request a status report from Customer. In no event shall
Supplier assume such silence is Acceptance.
23.5 If Customer decides not to purchase the Purchases, within ten
(10) days of such notice Supplier shall remove such Purchases at its
own risk and expense.
23.6 If Customer decides to purchase the Purchases, the Parties
will agree to the amount and terms of payment.
23.7 Customer will use Purchases provided under this Article for
the purpose of evaluation only. Such evaluation shall not obligate
Customer to procure Purchases for future use. Nor shall such usage be
deemed Acceptance by Customer.
23.8 Title to Purchases shall be and remain vested in Supplier.
Supplier shall bear the risk of loss of or damage to the Purchases
and/or Software.
24. INSURANCE:
24.1 Supplier shall at all times during the term of this Agreement,
at its own cost and expense, carry and maintain the insurance coverage
listed below with insurers having a "Best's" rating of B+XIII.
24.2 Should performance of this Agreement involve any use of
aircraft, aircraft liability insurance covering the ownership,
operation and maintenance of all owned and non-owned aircraft with
limits of not less than $5,000,000 per occurrence for bodily injury and
property damage, including passengers.
24.3 Comprehensive Crime insurance covering losses due to theft of
moneys or securities by Supplier's employees or third parties in an
amount not less than $ N/A per occurrence. Such insurance shall be
endorsed to provide coverage to Customer for losses arising from theft
from Supplier's employees or third parties while providing services
hereunder.
24.4 Errors and Omissions/Professional Liability insurance
covering errors and emissions of the Supplier with limits of not less
than $1,000,000 per occurrence and endorsed to provide coverage for
contractual liability with respect to liability assumed by Supplier
hereunder. Such insurance shall provide a retroactive date prior to the
date of this agreement and an extended claims reporting period of not
less than three (3) yews after the termination of this agreement.
24.5 Fidelity Bond covering losses due to Supplier's employee
dishonest acts in an amount not less than $1,000,000 per occurrence.
Such insurance shall be endorsed to provide coverage to Customer for
losses arising from dishonest acts of Supplier's employees while
providing Services hereunder.
24.6 Garage Liability insurance covering claims for bodily injury,
death or property damage occurring or arising out of the servicing or
repair of Customer's vehicles with limits of not less than $ N/A each
accident.
24.7 Garagekeepers' Liability insurance including comprehensive and
collision coverage for damage to Customer's vehicles left in the
Supplier's care with limits of not less than $ N/A each garage
location.
24.8 Liquor Liability insurance covering bodily injury, death or
property damage occurring or arising out of the sale or distribution of
alcoholic beverages with limits of not less than $ N/A per occurrence.
24.9 Motor Truck Cargo insurance covering losses to Customer's
property with limits of not less than $500,000 any one conveyance.
25. VOLUME: Customer has estimated various planning forecasts in the range
of [ * ] subscriber lines to be provisioned over the term of this Product
Schedule. Supplier clearly understands and agrees that such planning estimates
do not represent any minimum or maximum purchase obligations/commitments on the
part of Customer under this Agreement.
Page 8 of 15
CONFIDENTIAL. DISCLOSE AND DISTRIBUTE SOLELY TO THOSE INDIVIDUALS WHO HAVE A
NEED TO KNOW.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 20
AGREEMENT NO. 97050833*P*2
The parties intending to be legally bound have caused this Product Schedule
No. Two to be executed by their duly authorized representatives.
<TABLE>
<S> <C>
U S WEST BUSINESS RESOURCES, INC. AS AGENT FOR NEXT LEVEL COMMUNICATIONS
U S WEST COMMUNICATIONS, INC.
/s/ Joyce Becker /s/ Harold S. Klein
- ------------------------------------ ---------------------------------
(Authorized Signature) (Authorized Signature)
Joyce Becker Harold S. Klein
- ------------------------------------ ---------------------------------
(Print or Type Name of Signatory) (Print or Type Name of Signatory)
Procurement Manager VP Contracts Management
- ------------------------------------ ---------------------------------
(Title) (Title)
98 OCT 15 98 OCT 15
- ------------------------------------ ---------------------------------
(Execution Date) (Execution Date)
</TABLE>
Page 9 of 15
CONFIDENTIAL. DISCLOSE AND DISTRIBUTE SOLELY TO THOSE INDIVIDUALS WHO HAVE A
NEED TO KNOW.
<PAGE> 21
Agreement No.: 97050833
Product Schedule No.: Two
Exhibit: A
Dated: October 7, 1998
PRODUCT AND PRICE LIST
<TABLE>
<CAPTION>
MFG'S P/N DESCRIPTION PRICE CLEI(TM) CODE
- ---------- ---------------------------------------- ----- -------------
CENTRAL OFFICE EQUIPMENT
<S> <C> <C> <C>
750-00008 Broadband Digital Terminal Shelf Assembly (BDT) [ * ] BAM3AA0ARA
825-00001 N3 View-1, Operational Support Software --
Billing Only
825-00002 N3 View-2, Broadcast Management System -- [ * ]
Billing Only [ * ]
750-00032 Network Interface Unit, BDT (NIU3) [ * ]
750-00061 Network Interface Unit, BDT (NIU3) --
No Optics [ * ]
750-00011 Administrative Interface Unit, BDT (AIU) [ * ] BAC1290JAA
750-00030 Administrative Interface Unit, BDT (AIU2) [ * ]
750-00031 Administrative Interface Unit, BDT (AIU2)
w/DBP: incl. Tollgrade MCU [ * ]
660-00014 Power Supply, BDT (BDTPS) [ * ] BAPU670LAA
660-00089 Optical Distribution Unit, BDT (ODU2) [ * ]
820-00004 Fuse and Alarm Panel (FAP) [ * ]
780-50002 N3 View-1, Operational Support Software --
Media & Documentation [ * ]
780-50004 N3 View-2, Broadcast Management System --
Media & Documentation [ * ]
UNIVERSAL SERVICES ACCESS MULTIPLEXE--, EQUIPMENT
750-00045 Remote Terminal Shelf, USAM 1SL [ * ]
750-00059 Central Office/Customer Prem. Shelf, USAM [ * ]
750-00068 DS1 Expansion Shelf, USAM [ * ]
660-00180 Common Control, Optical Interface, USAM
Redundant (SMCCO) [ * ]
660-00080 Common Control, Optical Interface, USAM
Split Shelf (SMCCV) [ * ]
660-00181 Common Control, Electrical Interface,
USAM (SMCCE) [ * ]
660-00068 Power Supply, -48VDC, USAM (USMPS48) [ * ]
660-00115 Power Supply, 115VAC, VDSL USAM (USMP115) [ * ]
660-00132 Power Supply, 115VAC/-130VDC, RT USAM [ * ]
750-00044 Alarm & Test Unit, RT, USAM (SMATU) [ * ]
750-00070 Alarm & Test Unit, USAM (SMAUVDSL only) [ * ]
750-00072 Alarm & Test Unit, RT, W/DBP (SMATB) [ * ]
660-00144 DS1 Expansion Line Card -- 24 DS1 [ * ]
660-00142 DS1 Expansion Common Control Optical (IDLCC) [ * ]
660-00143 DS1 Expansion Power Supply [ * ]
750-00058 Administrative Access Panel, USAM (SMAP) [ * ]
</TABLE>
Page 10 or 15
CONFIDENTIAL. DISCLOSE AND DISTRIBUTE SOLELY TO
THOSE INDIVIDUALS WHO HAVE A NEED TO KNOW.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 22
Agreement No.: 97050833
Product Schedule No.: Two
Exhibit: A
Dated: October 7, 1998
PRODUCT AND PRICE LIST
<TABLE>
<CAPTION>
MGF'S P/N DESCRIPTION PRICE CLEI(TM) CODE
- ----------------------------------------------------------------------------------------------------------------
UNIVERSAL SERVICES ACCESS MULTIPLEXER-, PLUG-INS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
660-00027 Dual VDSL Line Card, USAM (SMVD) [ * ]
660-00131 Dual (RADSL) Line Card, USAM [ * ]
660-00087 Hex POTS UVG/Coin Line Card, COT, USAM [ * ]
660-00075 Hex POTS UVG Line Card, RT, USAM (SMRTU) [ * ]
660-00088 Hex POTS Line Card, RT, USAM (SMRTP) [ * ]
660-00108 Hex Coin Line Card, RT, USAM [ * ]
660-00083 Hex Coin Line Card, COT, USAM (may be replaced with 660-00087) [ * ]
660-00129 Hex BRI Line Card, RT, USAM [ * ]
660-90006 Dual 2W FXO, RT/COT, USAM [ * ]
660-90002 Dual 2W FXS, RT/COT, USAM [ * ]
660-90001 Single 4W E&M, COT/RT USAM [ * ]
660-90003 Single 4W FX COT/RT, USAM [ * ]
660-90004 DSO Dataport, COT, USAM [ * ]
660-90005 OCU Dataport, RT, USAM [ * ]
660-00192 3-DS1 Line Card (triple), USAM [ * ]
660-00193 Quad P-Phone Line card - USAM RT [ * ]
660-00194 Quad P-Phone Line card - USAM COT [ * ]
660-00190 Dual DMT ADSL Line Card - USAM RT [ * ]
660-00191 Dual DMT G.Lite ADSDL Line Card - USAM RT [ * ]
- ----------------------------------------------------------------------------------------------------------------
FIBER TO THE CURB
- ----------------------------------------------------------------------------------------------------------------
METAL BNUS 1.5 POTS PER BB LINE
- ----------------------------------------------------------------------------------------------------------------
750-00001 BNU-8 enclosure with IDC blocks and stubs - ready for aerial [ * ]
750-00001 BNU-8 enclosure with IDC blocks and stubs - ready for pedestal [ * ]
750-00026 BNU-8 enclosure with IDC blocks and stubs - wall mount [ * ]
750-00002 BNU-16 enclosure with IDC blocks and stubs - ready for aerial [ * ]
750-00002 BNU-16 enclosure with IDC blocks - ready for pedestal [ * ]
750-00027 BNU-16 enclosure with IDC blocks - wall mount [ * ]
680-00077 BNU Power Supply (BNU-8 or BNU-16) [ * ] BAPU780LAA
680-00009 BNU Common Control w/ROH (BNU-8 or BNU-16) [ * ]
680-00012 BNU TIU2 -6 UVG POTS (BNU-8 or BNU-16) [ * ]
</TABLE>
Page 11 of 15
CONFIDENTIAL. DISCLOSE AND DISTRIBUTE SOLELY TO THOSE INDIVIDUALS
WHO HAVE A NEED TO KNOW.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 23
Agreement No.: 97050833
Product Schedule No.: Two
Exhibit: A
Dated: October 7, 1998
PRODUCT AND PRICE LIST
<TABLE>
<CAPTION>
MFG'S P/N DESCRIPTION PRICE CLEI(TM) CODE
- ---------- --------------------------------------------------- -------- -------------
<S> <C> <C> <C>
680-00022 BNU PTIU - 6 POTS (BNU-8 or BNU-16) [ * ]
680-00017 BNU FXTIU2 - 6 FXS/UVG POTS [ * ]
680-00025 BNU CTIU2 - 1 COIN/5 UVG POTS [ * ] BAL8FG0BAA
680-00015 BNU BTIU2 - 1 BRI/ISDN/5 UVG POTS [ * ] BAL8FGHBAA
680-00019 Dual VDSL Broadband Interface Unit - (VDIUC) [ * ]
680-00020 Dual RADSL Broadband Interface Unit - (RADIUC) [ * ]
750-00066 BNU VDSL Coax adapter - BNU-16 only [ * ]
750-00065 BNU RADSL Coax adapter - BNU-16 only [ * ]
671-00030 BNU Connecter Assembly for TWP - BNU-16 Only [ * ]
Non-Metallic BNU with lightweight cassettes
750-00050 BNU1636 - ENCLOSURE (does not include BB protection
or composite stub [ * ]
750-00150 BNU1636 - ENCLOSURE with BB IDC's (does not include
composite stub [ * ]
750-00250 BNU1636 - ENCLOSURE with BB IDC's and
25' composite stub [ * ]
680-00176 BNU1636 VDSL BNU (VDIU) [ * ]
680-00177 BNU1636 Dual RADSL BIU (RADIU) [ * ]
680-00164 BNU1636 Common Control (CCU36) [ * ]
660-00199 BNU1636 Power Supply [ * ]
680-00104 TIU3 POTS 6 Line [ * ]
680-00105 TIU3 1 COIN/5POTS [ * ]
680-00106 TIU3 1 ISDN/5 POTS [ * ]
680-00159 Dual DS1 linecard: BNU1636 [ * ]
680-00117 TIU3 6 Line FXS/UVG [ * ]
Special Service Unit (SSU)
750-00005 SSU-2 Shelf & backplane with OSP cover [ * ]
660-00192 SSU-2 Common Control (DSL interface) [ * ]
660-00051 SSU-2 Power Supply [ * ]
750-00004 SSU-2 Common Control (Coax interface):
(Note - limited production for DC Ranch/Lowry [ * ]
671-00024 Kit, RPS Alarm Unit [ * ]
CUSTOMER PROMISE EQUIPMENT
750-00056 Residential Gateway, 3 MPEG decoders, with main remote [ * ]
750-00062 Auxiliary Remote Control [ * ]
</TABLE>
Page 12 of 15
CONFIDENTIAL. Disclose and distribute solely to those
individuals who have a need to know.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 24
Agreement No.: 97050833
Product Schedule No.: Two
Exhibit: A
Dated: October 7, 1998
PRODUCT AND PRICE LIST
<TABLE>
<CAPTION>
MFG'S P/N Description Price CLEI(TM) Code
- --------- ----------------- -------- -------------
<S> <C> <C> <C>
750-00064 Residential Gateway UHF receiver,kit [ * ]
750-00034 Etherset, VDSL [ * ]
750-00043 Etherset, RADSL [ * ]
750-00078 Etherset, DMT [ * ]
750-00079 Etherset, DMT Lite [ * ]
750-00033 Etherset, Coax: note DC Ranch & Lowry only [ * ]
671-90037 POTS Separation Filter, VDSL [ * ]
671-90038 POTS Separation Filter, RADSL/ADSL [ * ]
CABINETS AND ENCLOSURES
Channell Enclosure 12" Base [ * ] MD 8/98
Channell Enclosure 18" Base [ * ] MD 8/98
860-00022 Channell Enclosure w/bracket-24" base US WEST specified [ * ]
750-90001 2-3 Shelf Base Cabinet, includes; [ * ] replaces
rack, fan, baffles, fiber tray, door alarm, GFCI outlet, mounting
template; fully installed and tested (with shelves order
separately)
750-00035 4 Shelf VDSL Cabinet, includes; [ * ]
rack, fan, baffles, fiber tray, door alarm, GFCI outlet, mounting
template, AC load center, 4 100 pr. Cat. 5 protector panels, fan,
door alarm, fiber tray, sealed splice enclosure; fully installed
and tested with 4 shelves
750-90002 4 Shelf Base Cabinet, includes; [ * ]
rack, fan, baffles, fiber tray, door alarm, GFCI outlet, mounting
template; fully installed and tested (with shelves order
separately)
750-90003 6-8 shelf Base Assembly, includes; [ * ]
Heat Exchanger, sealed splice encl. rack, fan, baffles, fiber
tray, door alarm, GFCI outlet, mounting template; fully installed
and tested (with shelves order separately)
750-90004 12 shelf Base Cabinet includes; [ * ]
Heat Exchanger, sealed splice encl. rack, fan, baffles, fiber
tray, door alarm, GFCI outlet, mounting template; fully installed
and tested (with shelves order separately)
CABINET OPTIONS: ADD TO BASE CABINET (INSTALLATION INCLUDED IN BASE PRICE -
Siecor 100 Pr. Cat 3 (Telephony) Protector Panel [ * ]
Siecor 100 Pr. Cat 5 (VDSL) Protector Panel [ * ]
Millbank AC Load Center (VDSL or VDSL mix cabinets) [ * ]
Fiber FC Jumper cables (1 pr. per shelf requiring optical connection) [ * ]
Alpha 4810 Rectifier shelf with supervisory module [ * ]
Alpha 4810 550 V rectifier module [ * ]
GNB 90 Ahr. Battery String (4 per string) - may be replaced with JCI 90 Ahr. [ * ]
</TABLE>
Page 13 of 15
CONFIDENTIAL, Disclose and distribute solely to those
individuals who have a need to know.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 25
Agreement No. 97050833
Product Schedule No.: Two
Exhibit: A
Dated: October 7, 1998
PRODUCT AND PRICE LIST
<TABLE>
<CAPTION>
MFG'S P/N DESCRIPTION PRICE CLEI(TM) CODE
<S> <C> <C> <C>
Battery Drawer (required for all -48V rectifier with battery Backup);
2-3 Shelf Battery Drawer [ * ]
4 Shelf Battery Drawer [ * ]
6-8 Shelf Battery Drawer [ * ]
12 Shelf Battery Drawer [ * ]
Battery Heater; per battery string [ * ]
POWER SYSTEMS
835-00410 Alpha Low Profile Double Wide RPS, 3600W, FPN 4010, Alpha [ * ]
USW configuration CDXX-GBA2 consisting of:
(1 ea.) 835-00047 Pad Mount FPN 4010 cabinet and bulk rail assembly
(8 ea.) 835-00034 RSM4810 550 W rectifier modules
(18 ea.) 835-00035 CSM 31 200 W DC/DC Converter Modules
(14 ea.) 835-00036 5/VA Limiter Modules
(1 ea.) 835-00010 3 string end battery Cable Kit
(3 ea.) 835-00037 battery heater & tray assembly
(1 ea.) 835-00046 3M 100X200X200 cross connect
(65 ea.) 835-00023 Lucent 5 pin gas tube protectors
(1 ea.) 890-00009 TBI pad mount steel anchor frame kit & documentation
(1 ea.) 835-00052 AC service entrance
(1 ea.) 835-00051 AC meter base
(1 ea.) 835-00053 AC Data surge protector
835-00310 Alpha Low Profile Pad Mount RPS, 1200W, FPN3010, Alpha U S W [ * ]
Configuration ZDZZ-GBA2, consisting of:
(1 ea.) 835-00044 Pad Mount FPN 3010 cabinet and bulk rail assembly
(4 ea.) 835-00034 RSM4810 550 W rectifier modules
(7 ea.) CSM 31 200 W DC/DC Converter Modules
(6 ea.) 835-00036 5/VA Limiter Modules
(1 ea.) 835-00011 3 string end battery Cable Kit
(3 ea.) 835-00037 battery heater & tray assembly
(1 ea.) 835-00039 3M 50X100 cross connect
(21 ea.) 835-00023 Lucent 5 pin gas tube protectors
</TABLE>
Page 14 of 15
CONFIDENTIAL. Disclose and distribute solely to those
individuals who have a need to know.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 26
Agreement No: 97050833
Product Schedule No.: Two
Exhibit: A
Dated: October 7, 1998
PRODUCT AND PRICE LIST
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Mfg's P/N Description Price CLEI(TM) CODE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
(1 ea.) 890-00009 TE1 pad mount steel
anchor frame kit & documentation
(1 ea.) 835-00052 AC service entrance
(1 ea.) 835-00051 AC meter base
(1 ea.) 835-00053 AC Data surge protector
835-00038 JCI Tel-12-105F 100 Ahr. Battery
(ea) -- requires 4 per string [ * ]
835-00034 RSM 4810 550 V rectifier modules [ * ]
835-00035 CSM 31 200 V DC/DC converter modules [ * ]
835-00036 5/VA limiter modules [ * ]
835-00043 Lucent 5 pin gas tube protectors [ * ]
</TABLE>
Page 15 of 15
CONFIDENTIAL. Disclose and distribute solely to those individuals who have a
need to know
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 27
Agreement No. 97050833
ADDENDUM NO. ONE
This Addendum consisting of eleven pages is attached to and made part of that
certain Agreement No. 97050833, dated August 8, 1997 (the "Agreement"), between
the U S WEST Companies defined therein ("Customer") and Next Level
Communications, ("Supplier").
In consideration of the mutual promises and advantages to the parties, the
parties further agree as follows:
1. DESCRIPTION OF MODIFICATIONS
1.1 Paragraph 3.2 under Article 3, entitled "Invoices, Payment, Setoff,
Taxes", of the General Terms and Conditions is deleted in its entirely and
replaced with the following which is incorporated herein and into the
Agreement by this reference.
INVOICE AND BILLING
Correct and undisputed amounts on invoices shall be paid within forth-five
(45) days following receipt of both the product and the invoice. Customer
and Supplier agree to a grace period of fifteen (15) days from the date by
which payment is due before and invoice is considered to be past due. If
payment has not been received within sixty (60) days of the invoice date,
and Supplier has not been notified that the invoice is in dispute,
Supplier shall assess a charge of one percent (1%) of the invoice amount
per month for each month the invoice is past due.
Special payment terms for 1998 pre-provisioning of new technology
During the initial deployment period (January 1, 1998 to April 30, 1998)
Customer may order and install the below listed products which are in
early release stages for pre-provisioning of service implementation. For
purposes of warranty and billing, these products shall be considered
pre-acceptance in nature and shall have the following special provisions:
o Warranty shall not commence until the date the invoice is due and payable
o The terms of payment shall be Net 90 days after receipt of invoice.
o If, at the time the invoice is due, Customer has not agreed to accept the
product(s) or the availability of features required to meet acceptance has
slipped, Customer may request, and Supplier shall agree, to extend the
payment term by the amount of time necessary to satisfy such criteria.
o These terms shall apply only to the following products: USAM shelf
assemblies and commons, USAM modems and line cards, STD1500 set top boxes
and/or Residential Gateway, View 2 Broadcast Management System, associated
pedestal enclosures, and Remote Power Systems.
1.2 Article 5, entitled "Warranties", of the General Terms and Conditions;
Article 4, entitled "Warranties", of the Special Provision Module -
Services, and the Article entitled, "Warrant Term" contained in Product
Schedule One are modified to add the following:
WARRANTY
5.9 In addition to the standard warranty provisions to which Customer and
Supplier have agreed, Customer and Supplier agree to the following which
is incorporated herein and into the Agreement by this reference.
The warranty period for the hardware portion of all Access Systems and
related products shall be [ * ] from the date of invoice. Should out-of-box
failures occur or new products fail, said products shall be replaced with
new products for similar fit and function. Should products fail or become
defective while in service, said products shall, at Supplier's option, be
repaired or replaced with refurbished products. The warranty period for the
replaced or replaced products shall be the remainder of the original
warranty or [ * ], whichever is greater. If Supplier is not the
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
<PAGE> 28
manufacturer or licenser, Supplier shall obtain and pass to Customer
manufacturer's complete warranty.
o The warranty for Customer Premise Equipment ("CPE") intended for use
outside of Supplier's network Interfaces shall be [ * ] from the date of
invoice. Such CPE shall include but not be limited to set top boxes,
residential gateways, data modem or set devices, and NIC cards. During the
warranty period, Supplier shall replace any defective products or products
which suffer out-of-box failure with new product of similar fit and
function. Should products fail or become defective while in service, said
products shall, at Supplier's option, be repaired or replaced with
refurbished products. The warranty period for the repaired or replaced
products shall be the remainder of the original warranty or [ * ],
whichever is greater.
o The warranty period for the software utilized in View 1, View 2, and View 3
product shall be [ * ] from the date of installation on a workstation or
computing platform. Said software is warranted to conform to and perform in
accordance with Supplier's specifications as contained in Supplier's
documentation when said software is operated on the computing platform(s)
outlined in Supplier's specifications. During the warranty period, and at
no charge, Customer shall received an and all enhancement and maintenance
releases issued by Supplier, and shall have unrestricted access to
Supplier's TAC center for technical support and assistance during normal
business hours (6 AM to 5 PM PST). During non-business hours, Customer's
access shall be restricted to service problems and emergencies only. Upon
Customer's purchase of any new feature license, Customer's warranty shall
be extended to a period of [ * ] from the date of Installation of the
software release on a workstation.
1.3 Article 16, entitled "Force Majeure", of the General Terms and Conditions
in deleted in its entirety and replace with the following which is
incorporated herein and into the Agreement by this reference.
FORCE MAJEURE
Neither party shall be held responsible to the other for delays or
failures to perform caused by fires, strikes or similar labor
difficulties, embargoes, Government requirements, civil or military
authorities, acts of God or the public enemy or other similar
unforeseeable causes beyond the control of either party. If such
contingency occurs to one party, the other party may elect to: 1)
terminate the Order, in whole or in part, as to the product or software
not received or services not completed; 2) suspend the Order for the
duration of the delaying cause, buy or sell elsewhere the items to be
bought or sold thereunder, and deduct from any Order commitment that
quantity bought or sold or for which such commitments have been made
elsewhere; or 3) resume performance under the Order once the delaying
cause ceases and, at the option of such other party, extend the affected
dates up to the length of time the contingency endures. Such Order shall
continue in full force and effect with respect to all other rights and
obligations. Subparagraph 2) above shall be deemed selected unless written
notice is given with thirty (30) days after such other party is apprised
of the contingency. Supplier shall not be relieved of liability under this
clause if the delay results from failure of Supplier's subcontractor to
make a timely delivery of material, or perform services in a timely manner
unless such default arises out of causes beyond the control of both
Supplier and its subcontractor, and without the fault or negligence of
either of them.
1.4 Article 21, entitled "Termination of Agreement or Order(s)", is deleted in
its entirety and replaced with the following which is incorporated herein
and into the Agreement by this reference.
ARTICLE 21. TERMINATION FOR CONVENIENCE:
21.1 Customer and Supplier shall, in addition to its rights to cancel
this Agreement for default, have the right to terminate this Agreement
and/or any order(s) in whole or in part for its convenience at any time by
giving Supplier at least fifteen (15) days written notice of termination
specifying the extent to which the Agreement and/or any Order(s) is (are)
terminated and the date upon which such termination becomes effective.
After receiving notice of termination and except as otherwise directed by
Customer, Supplier shall: (1) Stop work under the Agreement and/or any
Order(s) on the
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
2
<PAGE> 29
Agreement No. 97050833
Addendum No. One
21.1 Customer and Supplier shall, in addition to its rights to cancel this
Agreement for default, have the right to terminate this Agreement and/or
any order(s) in whole or in part for its convenience at any time by giving
Supplier at least fifteen (15) days written notice of termination
specifying the extent to which the Agreement and/or any Order(s) is (are)
terminated and the date upon which such termination becomes effective.
After receiving notice of termination and except as otherwise directed by
Customer, Supplier shall: (1) Stop work under the Agreement and/or any
Order(s) on the date and to the extent specified; (2) Place no further
contracts except as may be necessary for completing such portions of the
Agreement and/or Order(s) as have not been terminated; (3) Terminate all
contracts to the extent that they may relate to portions of the Agreement
and/or any Order(s) terminated, and (4) Take such action as may be
necessary or as Customer may direct to protect and preserve product which
is in Supplier's possession and in which Customer has or may acquire an
interest. At the time of termination and to the extent of the termination,
the parties shall be released from any and all obligations under this
Agreement provided that Supplier shall be paid for product(s) shipped prior
to the date of termination less any amounts previously prepaid, for
products ordered by Customer, but not yet shipped, Customer agrees to pay
termination charges as set forth in this Agreement. Supplier agrees that a
termination under this Article shall not constitute a breach of or default
under this Agreement by Customer and that the payments to Supplier as
provided in this Article shall constitute full payment of all claims by
Supplier against Customer arising from a termination. Except to the extent
of expenses incurred at the express request of Customer, Customer shall not
be liable to Supplier for expenses, damages or losses of any kind including
incidental and consequential damages, loss, anticipated profit, or
unabsorbed indirect costs or overheads or any other losses or claims
whatsoever on account of or arising out of termination. Except as set forth
above, termination shall not affect either Customer's or Supplier's
pretermination obligations hereunder and shall be without prejudice to
enforcement of any undischarged obligations existing at the time of
termination.
21.2 If Termination For Convenience occurs in any period of time prior to
fulfillment by Customer of its obligations under this Agreement, Supplier
shall be entitled to issue an adjustment for the difference in the volume
pricing granted for the commitment and the price Supplier would have
otherwise have offered if no such commitment existed, as specified in the
Product Pricing Schedule, Exhibit B, hereby referenced and incorporated
into this Agreement. The adjustment shall apply to the quantities which
have been shipped to Customer against Customer's Orders up to and including
the effective date of termination for convenience of this Agreement in
accordance with the following sliding scale:
<TABLE>
<CAPTION>
Volume USAM Residential Gateway
------ ---- -------------------
<S> <C> <C>
0 - 100,000 [ * ] [ * ]
100,001 - 200,000 [ * ] [ * ]
200,001 - 450,000 [ * ] [ * ]
450,001+ [ * ] [ * ]
</TABLE>
The highest actual extended discount level achieved by Customer shall apply
to all lines purchased.
21.3 Termination for Convenience of Orders upon Customer's fulfillment of
the commitment, will not be subject to the terms stated in this paragraph
but shall be governed by the preceding paragraph 21.1 of this Article.
1.5 Article 22, entitled "Cancellation For Default," of the General Terms and
Conditions is modified to add the following, which is incorporated herein
and into the Agreement by this reference.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
3
<PAGE> 30
Agreement No. 97050833
Addendum No. One
DEFAULT
22.6 In addition to all other rights and remedies herein or at law or in
equity, both parties shall have the right to terminate an Order, in whole
or in part, without any obligation on the part of the aggrieved party, if,
following notification, the other party is in breach or default of an Order
and such breach continues beyond the time periods outlined in the clause
entitled, "Cure Period". A Default shall deemed to be in effect upon
written Notice by the aggrieved party. In the event that the party in
breach or default is unable to correct or remedy the breach or default
within the cure period, that party may submit to the aggrieved party an
action plan which may include workarounds, substitutions, compensation, or
other alternative means of resolution which may, upon acceptance by the
aggrieved party, be deemed a reasonable cure in lieu of final resolution on
an interim basis. Such acceptance shall not supersede any other obligations
or remedies available to the aggrieved party under this Agreement.
22.7 In the event the parties established a commitment, purchase level or
discount program, the quantity covered by such canceled Order(s) under a
breach or default shall be deducted from such commitment, purchase level or
volume required for discount entitlement. Each party shall provide
reasonable cooperation with the other to facilitate the remedy of a breach
or default hereunder.
22.8 Failure by Customer to pay any invoice due under any Order which is
the subject of a good faith dispute shall not be deemed to be a breach or
default by Customer.
1.6 The following Article entitled "Training" is incorporated herein and into
the Agreement by this reference as Article 36.
TRAINING
Supplier offers to Customer training seats which may be used at its
discretion and schedules at no charge contingent upon acceptance of the
terms for commitment. Training credits will be accrued upon Order of each
configured BDT system in the amount of:
- 2 Installation, operations, or maintenance courses for each configured BDT
system ordered which are standard training courses normally offered by
Supplier to its customers
- 1 management overview training credit for each configured BDT system
ordered
Training shall include instructor led hands on training (as applicable),
training manuals and materials, and student review (certification of
completion). Customer shall pay normal travel, lodging, and per diem
expenses for Supplier's instructors for on site training. Customer shall be
responsible for providing adequate facilities suitable for training for any
on site training. If no such facility is available, Supplier may be
requested to provide a location at a hotel or in one of its office
facilities for training locally, which Customer agrees to reimburse the
cost to Supplier.
Customer understands that training requires hands on interaction by its
personnel with the system and equipment. Unless training can be effectively
conducted in a Customer facility where such equipment is present, without
interruption to service, it will be necessary to have dedicated training
systems in the location where training is to be conducted. Supplier will
offer to Customer training systems and equipment (except workstations) in
configurations adequate to meet its training requirements as follows:
- Customer shall purchase training systems and equipment necessary
4
<PAGE> 31
Agreement No. 97050833
Addendum No. One
o Supplier will offer a special discount of 25% from the volume prices in
exhibits for all equipment purchased for training
o Racks, materials, and labor to assemble training systems will be quoted
by Supplier at a pass through cost if needed by Customer
o Supplier will provide to Customer those releases and upgrades necessary to
maintain the training systems purchased by Customer at the most current
version level being deployed at no cost, unless the system is being
upgraded or enhanced with new features which are included in the volume
pricing schedules of this Agreement. These will continue to be offered at
the special training discount.
Training classes shall be limited to a minimum of 4 students and a
maximum of 8 for all hands-on training conducted by Supplier. Management
overview training has no restriction on the number of attendees, subject
to space availability. Supplier requires at least 15 days advance
notification to schedule training and instructors.
Training courses offered by Supplier and descriptions are included in
exhibits, along with costs for those courses, including volume pricing
for contract training, should Customer require additional training beyond
the number of seats available through training credits, Customized
training, as may be required for Systems Integration, is included in
System integration Pricing and training exhibits and is therefore not
included in these terms.
1.7 The following Article, entitled "Distributed Software License Fees", is
added to the Agreement and replaces Article 5 of the Special Provisions
Module-Software License and Services in its entirety.
DISTRIBUTED SOFTWARE LICENSE FEES
Supplier offers to Customer a License to utilize its View1 Element Manager
System (EMS) and View2 Broadcast Manager System (BMS). The one-time
Right-To Use fees for these Software Programs shall be [ * ] per copy
(single workstation) for the View1 Element Manager System and [ * ] per
copy (single workstation) for the View2 Broadcast System, View1 and View2
Software Programs can support the applications and services for which they
were intended for up to fifty (50) Broadband Digital Terminals (BDTs).
Should Customer choose to distribute the cost of the Licensed Software
over the number of lines in a deployment, Supplier offers to Customer a
"distributed" Software License Fee which shall be paid incrementally with
the purchase of a BDT shelf assembly. With each purchase of a BDT,
Supplier shall include on the invoice, as a separate line item, a license
fee of [ * ] for each View1 and [ * ] for each View2 Manager System
purchased.
License fees paid under the "distributed" Software License Fee program
shall be captured and applied against the actual View1 and View2 Software
License Programs ordered by Customer. Customer shall automatically
receive full rights to utilize the software as well as Warranty for each
copy of the View1 and View2 Software License Program ordered. Said
Software License Programs shall be Ordered and invoiced at no cost.
Following the first full calendar year under contract (calendar year
1998), Supplier shall, on an annual basis, reconcile and adjust the
amounts paid under the "distributed" Software License Fee program with
any monies due based upon the actual number of copies of the Software
License Programs delivered to Customer. If a shortfall exists, Customer
shall be invoiced for the balance due. If Customer has overpaid, Supplier
shall issue a credit to Customer which can be applied to
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
5
<PAGE> 32
Agreement NO. 97050833
Addendum No. One
any future purchases of products manufactured by Supplier. If the Agreement
has expired or been terminated, Customer shall receive a cash refund in the
amount of the overpayment. All invoices or credit memos issued by Supplier
shall be supported by documentation which refers to the quantities of BDTs
ordered as well as the quantity of Software License Programs delivered to
Customer. At Customer's option, Customer's purchase orders shall be cross
referenced. Under the "distributed" Software License Fee Program, Software
License Programs which have been delivered to Customer, but for which the
actual cost of the License is less than [ * ] paid for under the
"distributed" Software License Fee program, Supplier shall carry the fees
due into the following calendar year until such time as the Agreement may
expire or be terminated. Upon expiration or termination of the Agreement,
Customer shall pay any monies due as payment for the Software License
Programs, including the monies which are due as payment for partially paid
Licenses under the "distributed" Software License Fee program. At the time
established as the annual adjustment period, Supplier shall allow Customer
to accrued and apply any overpayment of License fees for View 1 product as
payment for fees due on View 2 product, and vice versa, should an imbalance
exists which can be offset by transferring the accrued overpayment.
1.8 The following Article 37, entitled "Cure Period", is added to the Agreement
and is incorporated herein and into the Agreement by this reference.
CURE PERIOD AND WORKAROUND
37.1 Both party shall be afforded a reasonable cure period following
Notification of a default or breach of any term or condition of this
Agreement to make corrective actions and resolve the breach or default
prior to the injured party seeking relief through penalties, damages,
termination or cancellation of Orders or this Agreement, or entering into
Arbitration. During the cure period, the parties shall maintain on going
communications as to the remedial actions being taken and the status of the
breach or default, and shall make available its records and facilities for
inspection as deemed necessary to assess the remedial actions or status.
The cure period for the performance of an Order which has been accepted and
Acknowledged shall be fifteen (15) working days. For new products,
features, enhancements, or releases for which Customer has bee provided
schedules, the cure period shall be thirty (30) working days. For services
to be performed under this Agreement, the cure period shall be five (5)
working days. All other terms or conditions under this Agreement shall have
a thirty (30) days cure period.
37.2 In the event Supplier fails to furnish any product, system, material,
software or services, or any combination thereof, which conforms to
Customer's specification(s) by the agreed upon delivery or availability
date, for reasons other than "Force Majeure", or delays caused solely,
directly, and independently of all other causes by the actions of
Customer's failure to meet its obligations to Supplier, which failure may
cause Customer to incur additional costs to meet commitments to its
customers, then Customer may notify Supplier in writing that a workaround
condition exists. Supplier shall immediately take every action available to
provide interim solutions, substitutions, or other such measures at its
expense to resolve the failure or minimize its impact until such time as
the failure or delay no longer exists.
37.3 Unless otherwise agreed upon in advance, the workaround condition
shall be deemed the same period of time as the Cure Period prior to
invoking a default, breach, or penalties or damages under this Agreement.
If Supplier's workaround plan is accepted by Customer at its sole
discretion, that plan, including any period of time specified in the Plan,
shall relieve Supplier of any liability under default, breach, or penalties
or damages under this Agreement.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
6
<PAGE> 33
Agreement No. 97050833
Addendum No. One
1.10 The following Article 38, entitled "Most Favored Status", is added to the
Agreement and is incorporated herein and into the Agreement by this
reference.
MOST FAVORED STATUS
The prices, volume discounts, and terms for products, systems, software,
and services contained herein shall be at least as low as those prices,
volume discounts, and terms offered by Supplier to any of its other
customer for comparable products, systems, software, and services under
similar terms and/or commitments in like quantities or volumes. If Supplier
at any time extends to any of its other customers prices, volume discounts,
or terms for products, systems, software, or services in terms,
commitments, quantities, or volumes equal to or less favorable than those
contained in this Agreement, Supplier shall promptly notify Customer in
writing and extend such prices, volume discounts, or terms to Customer as
of the date such prices, volume discounts, or terms were first offered by
Supplier to any other customer. Such adjustments shall be effective as of
the date first offered, and Customer shall be entitled to receive
adjustments on all Orders from that date, including any applicable credits
for invoices paid from the date first offered which may be applied against
future Orders.
Customer shall receive from Supplier most favored consideration in the
definition and requirements of the features for the products, systems, and
software without claim to patents or Intellectual Property. Supplier agrees
to work jointly with Customer to define features and requirements during
its development process in consideration of Customer's status as "first
deployment customer" for Broadband services. Customer shall also be
allocated first evaluation and production availability for those products
under development by Supplier under this Agreement, and will have its
Orders filled ahead of any other customer's Orders provided Buyer provides
Seller with required forecasts on a timely basis. Supplier's obligations
shall be limited to the availability of such forecasts on a timely basis
and the quantities therein.
Supplier shall receive from Customer "most favored" status as a primary
supplier for the products, systems, software, and services under this
Agreement and shall be allowed an opportunity to offer its products,
systems, software, and services upon evaluation and acceptance by Customer
within its operating territory for which Supplier's products, systems,
software, or services conform to the intended application and function on a
non-exclusive basis. Unless cause arises out of default, breach,
contingency, or other such failure in performance under this Agreement,
Supplier shall be considered a primary supplier for the services
contemplated under this Agreement.
1.11 The following Article 39, entitled "Performance Compensation Payments", is
added to the Agreement and is incorporated herein and into the Agreement by
this reference.
39. PERFORMANCE COMPENSATION PAYMENTS (LD)
Both parties acknowledge that the assessment of penalties or damages may
not adequately compensate for actual costs incurred by Customer, nor
represent a remedy to default or breach of this Agreement. The parties
therefore agree to jointly pursue every available course of action prior to
reaching the damage or penalty stage to seek resolution. If Customer
determines through such joint action that Supplier is making its best
efforts to meet its obligations and is taking every reasonable action to
resolve the situation, Customer may at its option agree to extend the
schedule or date or waive damages or penalties if, in Customer's opinion,
such action can be taken without financial impact to its business. However,
if Supplier is not making its best efforts to meet its obligations a
liquidated damage in the amount of [ * ] per day shall be deducted from any
amounts that Customer owes Supplier.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
7
<PAGE> 34
Agreement No. 97050833
Addendum No. One
1.12 The following Article, entitled "Exclusive Development", replaces Article
3.1 in the Special Provisions Module-Software License and Services.
EXCLUSIVE DEVELOPMENT
Customer may request Supplier to develop specific software or hardware
features and enhancements to its existing products for which Customer
desires to have exclusive use for either competitive reasons or special
service offerings. If Supplier agrees to provide such development, Customer
shall submit to Supplier a proposal containing the scope of effort and the
nature of any required testing. Customer and Supplier shall jointly agree
on the requirements and specifications for the product to be developed.
Upon agreement by Customer and Supplier as to pricing and the methodology
for pricing, Customer shall submit to Supplier a change order authorizing
the development of the product as "work-for-hire." Customer shall have all
title and rights to license the developed product provided Customer has
paid for the development. However, this shall not preclude Supplier from
using its know how and Intellectual Property to develop works of a similar
nature for use with other customers. Upon Acceptance by Customer, and the
passing of title, Supplier shall not be responsible for warranting the
developed product under the warranty provisions of this Agreement.
1.13 The following Article entitled "Business Commitment", is added to the
Agreement and is incorporated herein and into the Agreement by this
reference.
Business Commitment
Customer shall purchase Broadband infrastructure and Broadband Access
Lines, subject to termination for convenience and the conditions outlined
below, with a minimum of 450,000 lines (telephone or video) over a period
of sixty (60) months commencing on January 1, 1998, with an equal number of
Residential Gateways purchased on a line-for-line basis. Customer may
purchase either the NLC Fiber-to-the-Curb or USAM Broadband platforms as
needed against this commitment.
A. The volume commitments shall be subject to satisfying the following
conditions:
(1) Supplier meets schedules for product and feature availability for
general deployment consistent with the Business Plan Customer has
established for its service offerings. If product or feature availability
is not satisfied, Customer shall have the right to either reduce the level
commitment caused by the delay, extend the commitment of a period of time
to compensate for the delay, or cancel the commitment if it is determined
that the impact is such that the business plan for Broadband deployment
under which the commitment was made can no longer be achieved;
(2) Both annual commitment volumes and the contract commitment volumes
shall be consistent with the actual take rates Customer achieves over the
term of the business commitment period. Supplier shall allow Customer to
extend, in annual increments, the commitment levels beyond the term of the
Agreement without penalty should the take rates not afford Customer the
opportunity to retire the commitment over the specified period. Thus,
annual purchase and total purchase during the term of the commitment period
shall remain consistent with Customer's on-going business plans and
budgets for Broadband deployment; and
8
<PAGE> 35
Agreement No. 97050833
Addendum No. One
(3) If unforeseen adverse economic or regulatory factors beyond the control
of Customer develop either internally or externally during the term of the
Agreement which were not contemplated at the time the Agreement was entered
into, or if the Customer's business case is not sustainable, Customer
shall immediately revise its commitment to reflect the impact that such
adverse factor(s) has on the commitment. This provision is an alternative
to (b) above for Customer. The Customer's 1997 business case for the period
covered by the term of this Agreement shall be the baseline used. Supplier
shall not hold Customer liable for any portion of the commitment which
cannot be met due to such circumstances. Customer shall, however, seek
other application or services which may be available for which Supplier
offers competitive technology, as a means to fulfill the commitment
adversely affected.
B. The Supplier's pricing under this Agreement is discounted based on the
commitment (subject to the provisions hereof) volumes of 450,000 lines and
450,000 residential gateways, and the volumes of sales that may possibly be made
under Customer's business case potential for 1,000,000 Access Lines in Colorado
and Arizona. Customer is not required to utilize Supplier for additional lines
required over the commitment level of 450,000 lines.
Supplier will extend to Customer its Most Favored Prices, which shall not be
increased, for the commitment portion of the potential deployment without
commitment beyond that agreed upon.
During the term of this Agreement, if Supplier is able to secure further cost
reductions from their suppliers, this savings will be passed on to Customer.
Supplier shall additionally assist Customer in reducing costs by recommending
any known engineering process changes, product changes, etc. of which will
result in Customer benefiting from a cost perspective.
C. The following conditions apply to new markets and deployment volumes beyond
the level of commitment:
(1) Customer may, at any time during the term of the Agreement, purchase
and deploy any of the products under this commitment in its other market
areas beyond the initially budgeted markets or services as its business
needs dictate. Customer shall not be precluded from issuing Request for
Quotes or Proposals or selecting second suppliers for new markets, nor
shall Supplier be precluded from responding to Requests for Quotes or
Proposals or seeking opportunity to sell its systems and products in any
Customer market if the opportunity avails itself. Nothing herein shall be
construed as a limitation on where Customer can install products purchased
under the commitment; and
(2) That, in any market area in which a Head-end is installed and Supplier
is selected as a prime contractor or systems integrator for that Head-end,
customer shall consider the Broadband Service deployment associated with
that Head-end as business committed to Supplier; and
D. Customer shall provide Supplier with its best estimate of demand in a
product forecast on a twelve (12) month rolling basis, which shall be
non-binding except for the Ninety (90) day period proceeding the forecast
month. Orders placed by Customer during the Ninety (90) day period preceding the
forecast month shall be cancelable under Section C stated above or under
Termination for Convenience. Customer shall place orders for delivery on the
dates specified on the Orders for the quantities forecasted during that Ninety
(90) day period. Customer may increase or decrease the remaining nine (9)
months of the twelve (12) month rolling forecast by 25% per quarter. Supplier's
obligation with respect to product availability and delivery on the dates and
in the quantities ordered shall be limited to the forecast. Customer shall be
assured its Orders shall be filled ahead of any other customer to the extent
that the Orders are within the forecast.
9
<PAGE> 36
Agreement No. 97050833
Addendum No. One
E. Customer shall not be required to pay any differentials in cost ("Bill
Backs") or be required to pay higher than the Most Favored Prices for
shortfalls in either the commitment levels or forecasts, provided Customer,
at its sole discretion, extends the commitment period through amendment to
the term of the Agreement to a period of time necessary to fulfill the
commitment obligation or makes equivalent purchase in like volume levels of
other systems or products offered by Supplier under the Agreement, unless
termination for Convenience occurs prior to fulfillment of the commitment.
Customer shall not be required to purchase or own any inventory related to
the commitment level except for ninety (90) days of the rolling forecast
which shall represent firm Orders. Customer's sole liability for not
meeting the commitment shall be the payback discount stated in the Addendum
Number Twenty-One, entitled "Termination for Convenience."
F. Prior to this commitment taking effect and Orders placed in conjunction
with Customer's commitment, the following milestones must be substantially
met to the satisfaction of Customer and Supplier:
(1) Prototype testing of VDSL modem technology meets mutually agreed
upon criteria for use in general Broadband deployment no later than
November 11, 1997;
(2) USAM xDSL system meets Bellcore lab and FOA test criteria prior
to General Deployment as mutually agreed upon by both parties no later
than December 1, 1997;
(3) the Residential Gateway meet the feature, performance, and
functional requirements during Lab, FOA, and General Release stages
as mutually agreed upon by both parties no later than June 1, 1998;
(4) the View2 system meets the functional and operational
requirements during the Lab, FOA, and General Release stages as
mutually agreed upon by both parties by November 1, 1997;
(5) the DC Ranch project meet Customer Acceptance criteria to be
mutually agreed upon by both parties for data by November 1, 1997 and
video by December 1, 1997;
(6) Supplier and Customer shall reach mutual agreement upon detailed
specifications no later than November 1, 1997; and
(7) Supplier and Supplier shall reach mutual agreement upon USAM/XDSL
and all necessary system integration plans and test requirements no
later than December 1, 1997.
Should any of the aforementioned products be delayed or fail to meet the
mutually agreed upon requirements prior to the General Deployment schedule
shown in exhibits, Customer may, at its option, either reduce the
commitment to reflect the impact the delay or failure has on its plans and
schedules, or extend the commitment by the period of time of the delay or
time it takes to remedy the failure, irrespective of any other remedies
Customer may be entitled to under the Agreement.
G. The following exhibits are hereby incorporated into this Agreement by this
reference and shall apply to paragraph F above:
(1) Exhibit C entitled "USAM VDSL NLC. Bellcore and U S WEST
Testing", dated August 14, 1997;
(2) Exhibit D entitled "Phase 1 and 2 Videoset Capabilities";
10
<PAGE> 37
Agreement No. 97050833
Addendum No. One
(3) Exhibit E entitled "View2 Feature Releases";
(4) Exhibit F entitled "Video Service Deployment Timeframes";
(5) Exhibit G entitled "Data Service Deployment Timeframes"; and
(6) Exhibit H entitled "Bellcore VDSL Test Plan".
Further it is understood by both parties that the referenced documents
will continue to change. Both parties shall mutually agree upon changes
to these documents.
1.14 Article Number 29, entitled "M/WBE Subcontracting Plan", of the General
Terms and Conditions, is hereby modified to add:
Supplier agrees to work in good faith with Customer and to incorporate a
formal M/WBE Subcontracting Plan as described in Exhibit A no later than
January 1, 1998, hereby incorporated into the Agreement by this reference.
1.15 Exhibit B, Project Milestones, is hereby attached and incorporated into
the Agreement, General Terms and Conditions, by this reference.
1.16 The following Article entitled
2.0 Except as modified herein, the provisions of the Agreement shall remain
in full force and effect. The Agreement may not be further amended or
altered except by written instrument executed by an authorized
representative of both parties.
11
<PAGE> 1
EXHIBIT 10.9
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 1 OF 77
SWITCHED DIGITAL VIDEO TECHNOLOGY AGREEMENT: TERMS AND CONDITIONS
TABLE OF CONTENTS
1. REQUIREMENTS
2. DEFINITIONS
2.1 ACCEPTANCE DATE
2.2. AFFILIATE
2.3. DOCUMENTATION
2.4. MATERIAL
2.5. PRODUCT
2.6. SERVICES
2.7. SOFTWARE
2.7.A. "RELATED DOCUMENTATION"
2.7.B. "LICENSED MATERIALS"
2.8. "SOURCE CODE"
2.9. "OPERATIONS SUPPORT SYSTEM"
2.10. SYSTEM
2.11. WORK
3. AGREEMENT TO PURCHASE
3.1. SCOPE OF AGREEMENT
3.2. TERM OF AGREEMENT
3.3. INTERRELATIONSHIP WITH ORDERS
3.4. GOVERNMENT CONTRACT PROVISIONS
3.5. NON-EXCLUSIVE MARKET RIGHTS
4. ASSIGNMENT
4.1. ASSIGNMENT BY NYNEX
4.2. ASSIGNMENT BY SUPPLIER
5. SOFTWARE
5.1. RIGHTS IN SOFTWARE
5.2. CUSTOM DEVELOPMENT OR MODIFICATION
5.2.1. INVENTIONS
5.2.2. WORK PRODUCT AND DEVELOPED INFORMATION
5.2.3. AUTHORSHIP AND COPYRIGHT
5.2.4. ACCESS TO WORK IN PROGRESS
5.3. EXPORT LICENSE
6. DOCUMENTATION AND SPECIFICATIONS
6.1. DOCUMENTATION
6.2. SPECIFICATIONS AND DRAWINGS
7. TERMINATION
7.1. TERMINATION FOR CAUSE
7.2. TERMINATION FOR CONVENIENCE
7.3 TERMINATION FOR INSOLVENCY, BANKRUPTCY, ASSIGNMENT, EXPROPRIATION,
AND/OR LIQUIDATION
7.4. TRANSFER OF CONTROL
7.5. TERMINATION BY SUPPLIER
7.6.
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 2
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 2 OF 77
8. PRICES AND TERMS OF PAYMENT
8.1. PRICES
8.2. [ * ]
8.3. TERMS OF PAYMENT
8.4. BILLING VERIFICATION AND AUTHORIZATION FOR PAYMENT PROCESS
9. TITLE AND RISK OF LOSS
9.1. TITLE AND RISK OF LOSS
9.2. QUIET ENJOYMENT
10. DELIVERY AND SHIPPING
10.1. FOB POINT
10.2. COSTS AND ROUTING
10.3. SCHEDULES
10.4. SHIPPING AND BILLING
10.5. SHIPPING SCHEDULE
10.6. INEXCUSABLE DELAY
10.7. PERFORMANCE COMPENSATION PAYMENTS
10.8. PERFORMANCE COMPENSATION CURE PERIOD
10.9. NOTICE OF DELAY
11. ORDERS
11.1. ORDERS
11.2. VARIATION IN QUANTITY
11.3. TERMINATION OF ORDER
11.4. CHANGE ORDER
11.5. STOP WORK ORDER
11.6. NYNEX ADVICE
12. QUALITY ASSURANCE
12.1. QUALITY SYSTEM
12.2. QUALITY PERFORMANCE REPORTING
12.3. SOURCE INSPECTION
12.4. PACKING
12.5. MARKING
12.6. TECHNICAL SUPPORT
12.7. ENGINEERING COMPLAINTS
12.8. CHANGE TO MATERIAL OR SOFTWARE/PRODUCT CHANGE NOTICES
12.9. REPAIRS AND REPLACEMENT
12.9.A. FOA REPAIR AND REPLACEMENT PROCEDURES
12.9.B. IN WARRANTY
12.9.C. OUT OF WARRANTY
12.9.D. EMERGENCY "OUT OF SERVICE" CONDITIONS
12.10. DETAIL ENGINEERING, OFFICE RECORDS
12.11. INSTALLATION BY SUPPLIER
12.12. INSTALLATION BY NYNEX
12.13. ACCEPTANCE
12.13.1. FIRST OFFICE APPLICATION ("FOA") ACCEPTANCE
12.13.2. FOA PHASE II ACCEPTANCE
12.13.3. FOA CORRECTIVE ACTION PLAN
12.13.4. GENERALLY AVAILABLE PRODUCT ACCEPTANCE
12.13.5. GA CORRECTIVE ACTION PLAN
12.14. INFORMATION KEPT CURRENT
12.15. CONTINUOUS IMPROVEMENT PLAN ("SQIP")
13. WARRANTIES
13.1. WARRANTY OF TITLE
13.2. BASIC WARRANTY
13.3. SYSTEM COMPATIBILITY WARRANTY
13.4. CONFIGURATION WARRANTY
13.5. ADDITIONAL COMMITMENTS AND WARRANTIES
13.6. GOODWILL WARRANTY
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 3
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 3 OF 77
13.7. WARRANTY PERIOD
13.8. SOFTWARE
13.9. ESCROW
13.10. ILLICIT CODE
13.11. SERVICES
13.12 EMPLOYEES AND SUBCONTRACTORS BOUND
13.13 DISCLOSURE
14. COMPLIANCE WITH FEDERAL RULES
14.1. RADIO FREQUENCY ENERGY STANDARDS
14.2. REGISTRATION
15. CONTINUING AVAILABILITY
16. EXTRAORDINARY SUPPORT
17. WORKAROUND
18. SUPPLIER COMPREHENSIVE RESPONSIBILITY FOR OVERALL PERFORMANCE
19. REPORT RATE
20. PERFORMANCE STANDARDS
21. DEFAULT
22. WORK PERFORMED ON NYNEX PREMISES
22.1. CLEAN-UP
22.2. HARMONY
22.3. PLANT AND WORK RULES
22.4. RIGHT OF ACCESS
22.5. TOOLS AND EQUIPMENT
22.6. WORK HEREUNDER
23. LIABILITY AND INSURANCE
23.1. LIABILITY
23.2. INSURANCE
24. IMPLEADER AND LIMITED LIABILITY OF NYNEX
25. DOCUMENTATION AND RECORD KEEPING
25.1. PERIODIC REPORTS
25.2. RECORDS AND AUDITS
26. INTELLECTUAL PROPERTY - GENERAL OBLIGATIONS
26.1. INFRINGEMENT OF PATENTS, COPYRIGHTS, AND TRADEMARKS
26.2. PERFORMANCE BOND OR LETTER OF CREDIT
26.3. INTELLECTUAL PROPERTY RIGHTS
26.4. RIGHTS TO INNOVATIONS
26.5. LICENSES
26.6. IDENTIFICATION
26.7. INSIGNIA
26.8. PUBLICITY
26.9. USE OF INFORMATION
26.10. SUPPLIER'S INFORMATION
26.11. WAIVER OF CONFIDENTIALITY
27. ENVIRONMENTAL AND SAFETY
27.1. ENVIRONMENTAL COMPLIANCE
27.2. HAZARDOUS CHEMICAL INFORMATION
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NMEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 4
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 4 OF 77
27.3. OCCUPATIONAL SAFETY AND HEALTH ACT (O.S.H.A.)
28. TRAINING
29. CONSULTING
30. GENERAL PROVISIONS
30.1. SEVERABILITY
30.2. CHOICE OF LAW
30.3. COMPLIANCE WITH LAWS
30.4 MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES
30.5. EXPORT CONTROL
30.6. TAXES
30.7. REGULATORY ASSISTANCE
30.8. SURVIVAL
30.9. NON-WAIVER
30.10. NOTICES
30.11. FORCE MAJEURE
30.12. DISASTER RECOVERY
30.13. RELEASES VOID
30.14. SECTION HEADINGS
31. ALTERNATE DISPUTE RESOLUTION
31.1. REFERRAL
31.2. MEDIATION
31.3. INDEPENDENT OBLIGATION OF SUPPLIER TO CONTINUE PERFORMANCE
32. ENTIRE AGREEMENT
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 5
CONTRACT NO. X134094D
OCTOBER 16,1996 PAGE 5 OF 77
THIS AGREEMENT ("Agreement") is entered into this 16th day of October 1996 by
and between Telesector Resources Group, Inc., a Delaware corporation with
offices at 240 E. 38th Street, New York, N.Y. 10016, on behalf of itself and for
the benefit of its AFFILIATES, (hereinafter referred to as "NYNEX") and General
Instrument Corporation of Delaware and its subsidiary corporation Next Level
Communications, a California corporation with offices respectfully at 8770 West
Bryn Mawr Avenue, Chicago, IL. 60631 and 6153 State Farm Drive, Rohnert Park,
Ca. 94928(hereinafter referred to as "SUPPLIER"). Under the Agreement, NYNEX
agrees to purchase and SUPPLIER agrees to sell SYSTEMS, Material, Services and
Documentation and to license SOFTWARE and related Documentation when Ordered by
NYNEX in accordance with the terms and conditions stated in this Agreement.
Whereas, NYNEX has issued to Supplier a Request For Proposal dated October 19,
1995 and a Request for Revised Proposal dated April 2, 1996 (hereinafter
collectively the "RFP"), setting forth certain requirements and other
information incident to the purchase and deployment of a Switch Digital Video
System as referenced in Article 1.
Whereas, Supplier has reviewed and analyzed the RFP and has developed and
submitted to NYNEX its Proposal dated December 4, 1995 and its Response to the
Request For Revised Proposal dated April 30, 1996 (hereinafter collectively the
"Proposal") as referenced in Article 1.
Whereas, said Proposal sets forth Supplier's offer and representations
including, without limitation, conclusions, recommendations, and benefits
incident to the appropriate facilities, hardware, system, software, and
services, required to provide NYNEX with the functional and operational
performance capabilities and capacities specified in the RFP; and
Whereas, based on the representations contained in Supplier's Proposal,
presentations, other printed material, correspondence, discussions, and in
reliance upon the expertise of Supplier in developing, designing and delivering
systems, NYNEX desires to buy products and services from Supplier and Supplier
desires to supply products and services to NYNEX under the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and conditions set forth
herein, and intending to be legally bound, the parties agree as follows:
ARTICLE I
REQUIREMENTS
Specific sections of the Request for Proposal and Request for Revised
Proposal No. 95-7058SRH (together the "RFP") and specific sections of the
Supplier's Responses to the RFP are incorporated into this Article as if fully
set forth herein. Specific sections of the Appendices A through H supplement,
amend or modify the specific sections of the RFP and the Responses to which they
relate. Supplier and NYNEX understand and acknowledge that Appendices A through
H, together with the incorporated sections of the RFP and the Responses together
with the text of this Agreement constitute the specific requirements and
detailed specifications, and that they are agreed to by the parties, except to
the extent specifically supplemented, clarified, amended or modified by
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 6
Contract No. X134094D
October 16, 1996 Page 6 of 77
Appendix X hereof, entitled Modifications to Appendices; provided, however,
that, as and for an inducement to NYNEX to enter into this Agreement prior to
the full consolidation of all the requirement documents, in the event of any
conflict, dispute or disagreement between Supplier and NYNEX as to the meaning,
interpretation, effect or implication of any item or issue contained in Appendix
X hereof, entitled Modifications to Appendices, Supplier agrees that the
interpretation, meaning, effect or implication advocated by NYNEX, for all
purposes, shall govern, control and be determinative of the item or issue,
unless contradictory documentation is provided to NYNEX and/or its AFFILIATES
which substantiates SUPPLIER's position.
APPENDICES The following appendices are attached hereto and are hereby
made a part of this AGREEMENT:
Section Title
- ------- -----
A Scope of Work - The scope of work includes NYNEX
requirements for the Residential Broadband Loop Access
Transport Infrastructure Hardware, Software, Power,
Interfaces, Development Schedule, and Elements for future
functionality. The appendix documents below formulate the
statement of work.
1. Nynex Request for Proposal No. 95-7058SRH: Broadband
Loop Access Transport Infrastructure, dated October
19, 1995, Section 2.0 - Scope of Work and Section 4.0
Technical Questions
2. Nynex Request for Proposal No. 95-7058-SRH: Broadband
Loop Access Transport Infrastructure Addendum, dated
October 25, 1995, Replacement Section 2.0 - Scope Of
Work and Section 4.0 Technical Questions Additions
and Revisions.
3. Nynex Request for Proposal No. 95-7058-SRH: Broadband
Loop Access Transport Infrastructure Addendum 2,
dated November 8, 1995, Section 4.0 Vendor one-on-one
Sessions, Technical Questions Responses
4. Technical Mailing: Including 1) Video Dialtone
Service Requirements, dated September 1995, 2) Video
Services Platform System Requirement Specifications,
dated October 13, 1995.
5. Next Level Communications / General Instruments
Corporation, NYNEX RFP No. 95-7058SRH, December 4,
1995, Section 2.0 Scope of Work and Section 4.0
Technical Questions.
6. Broadband Loop Access Transport Infrastructure - RRP
95-7058SRH (Request for Revised Proposals, dated
April 2, 1996, Exhibit 3 - Technical Requirements,
Exhibit 12 - Operations Requirements, Exhibit 13 -
Testing and Acceptance Support Requirements, Exhibit
14 - Software Requirements, Exhibit 16 - Supplier
Quality Specifications.
7. Next Level Communications/General Instruments
Corporation, NYNEX RFP No. 95-7058SRH, Revised
Response, dated April 30, 1996, , Exhibit 3
-Technical Requirements, Exhibit 12 - Operations
Requirements, Exhibit 13 - Testing and Acceptance
Support Requirements, Exhibit 14 - Software
Requirements, Exhibit 16 - Supplier Quality
Specifications.
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
<PAGE> 7
Contract No. X134094D
October 16,1996 Page 7 of 77
8. Negotiation document # 5, Executive response
regarding GI issues, dated 8/7/96
9. Negotiation document # 9, Engineering and Operations
Package, dated 8/7/96
10. Negotiation document # 13, Broadband OSS/VSP Review,
dated 8/8/96
11. Negotiation document # 14, NYNEX Exhibit 6 RRP
Requirement and GI Proposal / OSS and VSP Schedule,
dated 8/8/96
12. Negotiation document # 16, NYNEX/GI Document trail,
dated 8/8/96 including Residential Broadband
Operations Support Systems Requirements
Specifications for Switched Digital Video
(TM96-0029), dated 7/9/96
13. Negotiation document # 17, GI / SDV Software Issues,
dated 8/8/96
14. Negotiation document # 19, OSS Functional
Requirements on the Access Sub-system EMS, dated
8/8/96
15. Negotiation document # 20, Modified Work Process Flow
description with Process Flow Diagram, dated 8/8/96
16. Negotiation document # 23, Response to Negotiation
document # 19, "OSS Functional Requirements of the
Access Sub-System EMS", dated 8/8/96
17. Negotiation document # 27, EMS Stand - Alone
Capability, dated 8/9/96
18. Negotiation document # 42, Description of 8/20/96
Documentation Meeting, dated 8/14/96
19. Negotiation Document # 50, Reference List of
Technical Documents for the SDV Project, dated
8/16/96
20. Negotiation Document # 61, Technical, Engineering and
Field Support, dated 8/22/96
21. Negotiation Document # 62, Updated List of NIM
Issues, dated 8/22/96
22. Negotiation Document # 63, Licensing VSP GW, Terms to
GI Subcontractors, Broadnet Decision date impact, and
Payment Terms for EMS, dated 8/22/96
23. Negotiation Document # 69, EMS Interface Issues, EMS
Interface to VIP GW, IP Addressing, dated 8/23/96
24. Negotiation Document # 71, ASC Development, dated
8/23/96
25. Negotiation Document # 97, Acceptance Criteria, dated
10/11/96
B. Project Implementation - Includes NYNEX requirements for schedule
deployment, Risk Management, GI/NLC Key Individuals, Testing and
Acceptance, and Report Rate. The appendix documents below represent the
requirements for Project Implementation
1. NYNEX Request for Proposal No. 95-7058SRH: Broadband Loop
Access Transport Infrastructure, dated October 19, 1995,
Section 3.0 Forecasted Requirements and Section 6.0 Milestone
Schedules
2. NYNEX Request for Proposal No. 95-7058-SRH: Broadband Loop
Access Transport Infrastructure Addendum, dated October 25,
1995, Section 3.0 Forecasted Requirements and Section 6.0
Milestone Schedules
3. NYNEX Request for Proposal No. 95-7058-SRH: Broadband Loop
Access Transport Infrastructure Addendum 2, dated November 8,
1995, Section 3.0 Forecasted Requirements
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 8
Contract No. X134094D
October 16, 1996 Page 8 of 77
4. Next Level Communications/General Instruments Corporation,
NYNEX RFP No. 95-7058SRH December 4, 1995, Section 3.0
Forecasted Requirements and Section 6.0 Milestone Schedules
5. Broadband Loop Access Transport Infrastructure -
RRP 95-7058SRH (Request for Revised Proposals, dated April 2,
1996, Exhibit 4 - Deployment Schedule, Exhibit 5-Supplier
Hardware and Software Schedule, Exhibit 6-NYNEX Broadband OSS
and VSP Schedule, Exhibit 13-Testing and Acceptance Support
Requirements.
6. Next Level Communications / General Instruments Corporation,
NYNEX RFP No. 95-7058SRH, Revised Response, dated April 30,
1996, Exhibit 4 - Deployment Schedule, Exhibit 5 - Supplier
Hardware and Software Schedule, Exhibit 6 - NYNEX Broadband
OSS and VSP Schedule, Exhibit 13 - Testing and Acceptance
Support Requirements.
7. Negotiation document # 4, Initial GI/SDV Equipment
Requirements for NYNEX's Lab, dated August 7, 1996
8. Negotiation document # 7, NYNEX Lab Trial Availability Dates,
dated 8/7/96
9. Negotiation document # 10, Broadband Deployment Risk
Management Strategy, dated 8/7/96
10 Negotiation document # 11, 18 Month Production Cycle Broadband
Implementation, dated 8/7/96
11. Negotiation document # 21, GI/NLC Negotiations Section VI,
Project Management Team, GI/NLC Organization Charts, Dated
August 8, 1996
12. Negotiation document # 22, GI Organization Personnel chart,
(Key Personnel), dated 8/8/96
13. Negotiation document # 26, GI/NLC Negotiations, Section III,
Report Rate Performance Criteria, dated 8/9/96
14. Negotiation document # 30, GI Response to: Deployment
Flexibility, Goodwill, VSP integration Lab in BA, dated 8/9/96
15. Negotiation document # 34, SDV Reports, dated 8/14/96
16. Negotiation Document # 67, NYNEX Broadband Build Schedule,
dated 8/23/96
17. Definition of Report Rate Criteria, dated 10/11/96
C Pricing - Includes NYNEX Loop Electronics Pricing Model, Detailed
Component Price List and GI's hourly, daily and monthly rate schedule
1. NYNEX Request for Proposal No. 95-7058SRH: Broadband Loop
Access Transport Infrastructure, dated October 19, 1995,
Section 5.2 Total Cost
2. NYNEX Request for Proposal No. 95-7058-SRH: Broadband Loop
Access Transport Infrastructure Addendum, dated October 25,
1995, Section 5.2. Total Cost
3. NYNEX Request for Proposal No. 95-7058-SRH: Broadband Loop
Access Transport Infrastructure Addendum 2, dated November 8,
1995, Section 5.0
4. Next Level Communications / General Instruments Corporation,
NYNEX RFP No. 95-7058SRH, December 4, 1995, Section 5.0
Business Issues and Requirements, Section 5.2 Total Cost
5. Broadband Loop Access Transport Infrastructure - RRP 95 -
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 9
Contract No. X134094D
October 16, 1996 Page 9 of 77
7058SRH (Request for Revised Proposals, dated April 2, 1996,
Exhibit 1 Pricing
6. Next Level Communications / General Instruments Corporation,
NYNEX RFP No. 95-7058SRH, Revised Response, dated April 30,
1996, Exhibit 1 Pricing, Worksheet 2, Loop Electronics Pricing
Model
7. NYNEX RFP 95-7058SRH - Detailed Component Price List
8. Residential Broadband System Component Price List, dated
10/11/96
D Changes in Scope - Includes the documents relating to a structure to
define and cost out changes in scope for hardware, software and
outsourcing requirements. The appendix documents will define their
contents as they relate to Structures for Change Orders.
1. Negotiation document # 37, Changes to NYNEX Exhibit 14 -
Software Requirements, dated 8/14/96
2. Negotiation Document # 44 & #58, Changes In Scope of Work,
dated 8/14/96
3. Negotiation Document # 47, Addition to "Changes Exhibit" dated
8/15/96
4. Compensation for Services for Changes in Scope, dated 10/11/96
E. Terms and Conditions - Intentionally left blank; See Switched Digital
Technology Agreement: Terms and Conditions.
F. Business Issues - Includes NYNEX requirements as they relate to
specific business aspects of this contract including Hardware and
Software Warranty, Training, Asset inventory Management, Most Favored
Nation, Volume Incentive, Transportation, Spares and M/WBE
Subcontracting Efforts
1. NYNEX Request for Proposal No. 95-7058SRH: Broadband Loop
Access Transport Infrastructure, dated October 19, 1995,
Section 5.0 Business Issues and Requirements
2. NYNEX Request for Proposal No. 95-7058-SRH: Broadband Loop
Access Transport Infrastructure Addendum, dated October 25,
1995, Section 5.0 Business Issues and Requirements
3. NYNEX Request for Proposal No. 95-7058-SRH: Broadband Loop
Access Transport Infrastructure Addendum 2, dated November 8,
1995, Section 5.0
4. Next Level Communications / General Instruments Corporation,
NYNEX RFP No. 95-7058SRH, December 4, 1995, Section 5.0
Business Issues and Requirements
5. Broadband Loop Access Transport Infrastructure - RRP 95 -
7058SRH (Request for Revised Proposals, dated April 2, 1996,
Exhibit 17 - Warranty, Exhibit 18 Training, Exhibit 19 - Asset
Inventory Management, Exhibit 20 - Transportation, M/WBE
Subcontracting Initiatives
6. Next Level Communications / General Instruments Corporation,
NYNEX RFP No. 95-7058SRH, Revised Response, dated April 30,
1996, Exhibit 17 - Warranty, Exhibit 18
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 10
Contract No. X134094D
October 16, 1996 Page 10 of 77
Training, Exhibit 19 - Asset Inventory Management, Exhibit 20
- Transportation, M/WBE Subcontracting Initiatives
7. Negotiation document # 35, Elements for Strategic
Relationship, dated 8/14/96
8. Negotiation document # 36, Recommended Contract Language
Regarding Utilization of Diversified Supplier (Minority
Businesses Enterprises) , dated 8/14/96
9. Negotiation document # 38, Training, dated 8/14/96
10. Negotiation Document # 68, Software Escrow, Framework on
Acceptance, EMS Cost Clarification, dated 8/23/96
11. Negotiation Document # 72, Financial Stewardship & Termination
for Insolvency, dated 8/23/96
12. Negotiation Document # 76, Updated Training Information, dated
8/23/96
13. Elements for a Strategic Partnership, dated 9/27/96
14. Financial Accountability Requirements, dated 10/14/96
G. Negotiation Session Issues - Includes Negotiation Minutes and Action
Items, Summary of Negotiation Action Items, Negotiation Document
Exchange, and Negotiation Open Items. The appendix documents will
define their contents as they relate to the Negotiation Session.
1. Negotiation Minutes and Action Items, Version 8.0 dated 9/3/96
2. Negotiation Document Exchange dated 10/14/96
3. Summary of Negotiation Actions Items, dated 8/28/96
H. Additional Correspondence:
1. General Instruments letter, dated May 3, 1996, Subject: DA
Maps, To J. Greer from M. McClintic
2. General Instruments letter, dated May 7, 1996, Subject: NYNEX
RRP Clarification Questions, To: John Greer/Charlie Seibold
from M. McClintic
3. General Instruments letter, dated May 9, 1996, Subject $238
for additional business, To: Alan Polonsky from D. Genin.
4. General Instruments letter dated May 9, 1996, Subject EMS
Release and Maintenance Information, To: Eric Angione from S.
Klein
5. General Instruments letter, dated May 10, 1996, Subject GI/NLC
training response, To: D. McCloud from: S. Klein
6. General Instruments letter dated May 20, 1996, Subject GI/NLC
Executive Summary/Bios, To: J. Gross from Sandra Fulton
7. General Instruments presentation to NYNEX Officers dated May
29, 1996
8. General Instruments letter dated June 4, 1996, Subject: DSC
litigation, to J. Gross from K. Zar
9. NYNEX and General Instrument SDV Letter of Intent dated
September 6, 1996
10. General Instruments letter dated October 7, 1996, Subject:
NYNEX Functional and Interface Requirements for
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 11
CONTRACT NO. X134094D
OCTOBER 16,1996 PAGE 11 OF 77
the Video Services Platform (VSP) , to C. Carey from M. Nguyen
11. General Instruments letter dated October 1, 1996, Subject
Narrowband/Broadband Engineering Guideline Coordination, to C.
Carey from B. Weeks
12. NYNEX letter to General Instrument letter dated August 2,
1996, Subject: Preliminary EDI Requirements, To: D. Genin from
J. Greer
X Modifications to Appendices: - This document supplements previously
exchanged documentation; in the event of conflict between the Terms
of this document and previously exchanged documentation, this
document shall control and take precedence.
1. Modifications to Appendices, Version 1.0 dated October 14,
1996
ARTICLE 2
DEFINITIONS
2.1 ACCEPTANCE DATE For any hardware or SOFTWARE provided hereunder,
ACCEPTANCE DATE is the first day after the applicable PRODUCT successfully
completes all Acceptance requirements provided for in this Agreement and any
applicable Order.
2.2 AFFILIATE means, at any time, and with respect to any corporation,
person or other entity (a) any other corporation that at such time, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such first corporation, person or other entity;
or (b) any other corporation, person or other entity beneficially owning or
holding, directly or indirectly, 25% or more of any class of voting or equity
interests of the first corporation or any subsidiary or any corporation of which
the first corporation and its subsidiaries beneficially own or hold, in the
aggregate, directly or indirectly, 25% or more of any class of voting or equity
interests. As used in this definition, "Control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a corporation, person or other entity whether through the
ownership of voting securities, or by contract or otherwise.
2.3 DOCUMENTATION shall mean any and all necessary written materials,
drawings, and specifications, that include but are not limited to, full
descriptions of planning, installation, engineering, use, test, maintenance,
analysis, repair, operation, and acceptance testing of the SYSTEM, together with
any and all modifications, revisions, additions, improvements or enhancements.
2.4 MATERIAL shall mean-the SUPPLIER's hardware, firmware, additions,
extensions, components, supplies, test equipment, apparatus and parts, as
specified in this AGREEMENT or in an Order, or which are integral to, or
associated with the acceptable functioning and performance of SUPPLIER's SYSTEM,
including, without limitation, those
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<PAGE> 12
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 12 of 77
set forth or otherwise identified in Appendix A hereto, entitled SCOPE OF WORK
and all other Appendices to this Agreement.
2.5 PRODUCT shall mean any or all SYSTEM(s), MATERIAL, or SOFTWARE or
Licensed Materials provided or furnished by SUPPLIER, including, without
limitation, those set forth or otherwise identified in Appendix A hereto,
entitled SCOPE OF WORK and all other Appendices to this Agreement.
2.6 SERVICES shall mean the SUPPLIER's SYSTEM engineering, installation,
installation support, technical support, emergency technical assistance,
training, and other related SERVICES which may be ordered hereunder, including,
without limitation, those set forth or otherwise identified in Appendix A
hereto, entitled SCOPE OF WORK and all other Appendices to this Agreement.
2.7 SOFTWARE shall mean a program, or programs, consisting of machine
readable logical instructions and tables of information, including, without
limitation, those set forth or otherwise identified in Appendix A hereto,
entitled SCOPE OF WORK and all other Appendices to this Agreement, which guide
the functioning of a processor and which are required to provide NYNEX with the
functional and operational performance capabilities and capacities specified in
the RFP or as may be identified in any order, associated Appendices or other
document or attachments associated with the Order. Such programs include, but
are not limited to, control programs, application programs, operating SYSTEM
programs, base-feature programs, optional-feature programs, and other programs
related to the operation, administration and/or support of MATERIAL.
2.7.A RELATED DOCUMENTATION shall mean DOCUMENTATION, useful in
connection with the SOFTWARE, such as but not limited to, flow charts, logic
diagrams, program listing, program descriptions and specifications; program
listings and program descriptions shall incorporate high-level language, SOURCE
CODE and programmer's comments.
2.7.B LICENSED MATERIALS shall mean the SOFTWARE and RELATED
DOCUMENTATION defined in Section 2.7 and 2.7.A and the firmware or internal code
fixed in, or otherwise incident to, the MATERIAL and for which licenses are
granted by SUPPLIER under this AGREEMENT.
2.8 SOURCE CODE shall mean a computer program in the form of high-level
language that generally is not directly executable by a processor.
2.9 OPERATIONS SUPPORT SYSTEM ("OSS") shall mean an Operations Support
System (SOFTWARE, interface hardware and processor) that interfaces with
SOFTWARE and/or MATERIAL in the SYSTEM and which is required for the 'operation,
administration and/or support (including but not limited to testing,
surveillance, billing, provisioning and inventory) of the SYSTEM.
2.10 SYSTEM shall mean the PRODUCT(S), MATERIAL and SOFTWARE of, and
associated with, SUPPLIER's System, functioning together, performing and
interoperating as a fully integrated and efficient whole with itself and with
all other switching, transport and transmission elements and other facilities
and equipment in the NYNEX network in accordance with the requirements and
specifications incident to this Agreement or any Order(s) issued pursuant to
this Agreement, including, without limitation, those set forth or otherwise
identified in Appendix A
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<PAGE> 13
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 13 OF 77
hereto, entitled SCOPE OF WORK and all other Appendices to this Agreement.
2.11 WORK shall mean the provision of Systems, Product, Material,
Software, and Documentation and the performance of Services incident to this
Agreement or any Order(s) issued pursuant to this Agreement, including, without
limitation, those set forth or otherwise identified in Appendix A hereto,
entitled SCOPE OF WORK and all other Appendices to this Agreement.
ARTICLE 3
AGREEMENT TO PURCHASE
3.1 SCOPE OF AGREEMENT NYNEX agrees to purchase and SUPPLIER agrees to
sell, SYSTEM(S), PRODUCT(S), MATERIAL, SERVICES and DOCUMENTATION and to license
SOFTWARE and RELATED DOCUMENTATION, when ordered by NYNEX in accordance with
Appendix A hereto, entitled SCOPE OF WORK and the terms and conditions stated in
this AGREEMENT at the prices identified in Appendix C hereto, entitled Pricing.
3.2 TERM OF AGREEMENT This Agreement shall commence on the date first
above written and, unless otherwise terminated pursuant to the provisions of
this Agreement, shall continue for an initial term of fifteen (15) years.
Thereafter, this Agreement shall continue in effect for successive terms of up
to one year, unless terminated by either party giving written notice to the
other party at least one hundred eighty (180) days prior to the anniversary
date, which shall be the effective date of termination, or unless otherwise
terminated as provided herein. This AGREEMENT shall be effective for SYSTEMS,
PRODUCTS, MATERIAL, SOFTWARE, SERVICES, DOCUMENTATION and Licensed Materials
ordered by NYNEX during the term and any extension thereof.
3.3 INTERRELATIONSHIP WITH ORDERS Whenever the provisions of an Order
conflict with the provisions of this Agreement, the typewritten provisions of
the Order which have been mutually agreed upon by the parties in writing and
which are not pre-printed as part of a form shall control and take precedence
over the conflicting provisions of this Agreement, but only for purposes of such
Order and, except for the conflicting provisions of such Order, the terms and
conditions of this Agreement shall not be deemed to be amended, modified,
canceled, or waived. Conflicting pre-printed provisions on the reverse or front
of the forms belonging to either party shall be deemed deleted.
3.4 GOVERNMENT CONTRACT PROVISIONS Orders placed pursuant to this
AGREEMENT containing a notation that the MATERIAL is intended for use under
government contracts shall, upon acceptance by SUPPLIER, be subject to the then
current government provisions referenced thereon or in attachments thereto.
3.5 NON-EXCLUSIVE MARKET RIGHTS It is expressly understood and agreed that
this AGREEMENT neither grants to SUPPLIER an exclusive privilege to sell or
provide to NYNEX or its AFFILIATES any or all PRODUCTS or services of the type
described in this AGREEMENT which NYNEX or its AFFILIATES may require, nor does
it require the purchase of any SYSTEM, PRODUCTS, MATERIAL, SOFTWARE,
DOCUMENTATION, licensed materials, or SERVICES from SUPPLIER by NYNEX or its
AFFILIATES. Supplier understands and agrees that NYNEX and its AFFILIATES are
free to and may contract with other manufacturers and Suppliers for the
procurement of
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NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
<PAGE> 14
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 14 OF 77
comparable SYSTEMS, MATERIAL, SOFTWARE, DOCUMENTATION, licensed materials or
SERVICES.
ARTICLE 4
ASSIGNMENT
4.1 ASSIGNMENT BY NYNEX NYNEX shall have the right to assign this
AGREEMENT or to assign its rights and delegate its duties, obligations or
commitments under this AGREEMENT, either in whole or in part, to any of its
AFFILIATES, parent, and/or subsidiaries upon notice to SUPPLIER.
Any assignment pursuant to this clause shall neither affect nor diminish
any rights or duties that NYNEX may then have as to MATERIAL ordered by, or
SOFTWARE licensed to, NYNEX or delivered by SUPPLIER prior to the effective date
of the assignment or as to MATERIAL or SOFTWARE which is beyond the scope of the
assignment. Upon the acceptance of the assignment and the assumption of the
duties under this AGREEMENT by the assignee, the assignor shall be released and
discharged, to the extent of the assignment, from all further duties under this
AGREEMENT.
4.2 ASSIGNMENT BY SUPPLIER SUPPLIER shall not assign any right or interest
under this AGREEMENT, or Orders issued pursuant to this AGREEMENT (excepting
monies due or to become due), nor delegate any work or other obligation to be
performed or owed by SUPPLIER under this AGREEMENT, or Orders issued pursuant to
this AGREEMENT, without the prior written consent of NYNEX. Any attempted
assignment or delegation in contravention of the above provision shall be void
and ineffective. Any assignment of monies shall be void and ineffective to the
extent that (1) SUPPLIER shall not have given NYNEX at least sixty (60) days
prior written notice of such assignment and (2) such assignment attempts to
impose upon NYNEX obligations to the assignee additional to the payment of such
monies, or which are in excess of or differ from its obligations hereunder, or
to preclude NYNEX from dealing solely and directly with SUPPLIER in all matters
pertaining to this AGREEMENT including the negotiation of amendments or
settlements of charges due.
ARTICLE 5
SOFTWARE
5.1 RIGHTS IN SOFTWARE Unless otherwise specified in an Order, Supplier
hereby grants to NYNEX and its Affiliates, as to any Licensed Materials, in any
form known or unknown, a perpetual, irrevocable, royalty-free, world-wide,
non-exclusive, unrestricted, except as provided herein, right and license, under
any intellectual property or license rights now or hereafter acquired by
Supplier or its affiliates:
(i) to use, execute and operate the Licensed Materials, in whole or in
part, on any computer system or processor on which the Licensed
Materials will function, and an any number of computer systems or
processors, provided the use, execution or operation is in the
normal course of business; notwithstanding anything to the contrary
in the Agreement, use by or for NYNEX's direct or lower tier
customers, as incident to, arising out of, or as reasonably
necessary to comply with, the Telecommunications Act of 1996 or any
FCC orders implementing same, or any similar unbundling or
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NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
<PAGE> 15
CONTRACT NO. X134094D
OCTOBER 16,1996 PAGE 15 OF 77
interconnection requirements imposed by any state or local public
service authority shall be deemed to be use, execution or operation
in the normal course of business and shall be included, without
additional charge, within the scope of the license granted under
this Agreement.
(ii) to perform, display, transmit, reproduce, modify, enhance,
integrate, and create derivative works from, the Licensed Materials,
subject to the limitations in Section 5.1;
(iii) to sublicense, distribute, and market the Licensed Materials upon
execution of a separate re-seller or other marketing agreement
subject to terms for royalty fees and conditions for sublicense as
agreed upon by Supplier
(iv) to authorize any third party to exercise any of the foregoing rights
and licenses, subject to prior written approval from Supplier, which
shall not be unreasonably withheld.
NYNEX acknowledges SUPPLIER's representation that Licensed Materials are
the property of Supplier or its suppliers and that NYNEX shall not have any
ownership interest in Licensed Materials
Any modifications, enhancements, interfaces, or compilations created by or
on behalf of NYNEX by a third party or solely for NYNEX by Supplier,
("Changes"), as well as all intellectual property rights, including copyright,
to and in such Changes, shall be owned by NYNEX. All applications so developed
through use of the Licensed Products ("Applications") as well as all
intellectual property rights to and in such Applications shall be owned by
NYNEX. NYNEX or its AFFILIATES may add to, delete from, enhance or modify the
LICENSED MATERIALS, but no such changes, however extensive, shall alter
SUPPLIER's title to the original LICENSED MATERIALS. At no additional charge,
Supplier shall execute such documents as may be reasonably required to effect
the purposes of this provision.
NYNEX and/or its AFFILIATES shall hold LICENSED MATERIALS as they treat
their own confidential information. NYNEX' or its AFFILIATES' obligations
hereunder shall not extend to any information or data relating to LICENSED
MATERIALS which are now available to the public or become available by reason of
acts or omissions not attributable to NYNEX or its AFFILIATES.
NYNEX and/or its AFFILIATES shall have the right, at no additional charge,
to have the Software at any site used at any other location by means of remote
electronic access.
The license term for Software shall commence on the date of Phase I
acceptance of such Software and shall continue perpetually, unless terminated by
NYNEX and/or its AFFILIATES by giving SUPPLIER sixty (60) days prior written
notice. Termination of such license term shall also automatically terminate any
maintenance services for such Software.
Except to an Affiliate, or as set forth in Subsection 5.1.(i) hereof,
NYNEX or its AFFILIATES may not transfer the right to use SUPPLIER's Licensed
Material without prior written approval of Supplier, and subject to prior
agreement on terms for payment of any applicable royalties or license fees by
and to the party being transferred to. The Warranty terms in Article 13 of this
Agreement shall not be transferred by Supplier. Transfer of the right to use
Supplier's Licensed Material and related Documentation or technical information
to any of Supplier's
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NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
<PAGE> 16
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 16 of 77
competitors is prohibited, and at no time shall such transfer be made to any
foreign Company, governmental body, or agency which is not subject to the U.S.
laws and enforcement pertaining to patents and copyrights protection.
With each license of Software ordered hereunder, SUPPLIER shall provide
NYNEX and/or its AFFILIATES with and documentation identified in Article 6
hereof, entitled DOCUMENTATION AND SPECIFICATIONS together with documentation
which either is provided by SUPPLIER to any of its other customers for the
Software or is reasonably necessary to enable NYNEX and/or its AFFILIATES to
adequately use such Software. Documentation shall comply with commonly accepted
industry standards with respect to content, size, legibility and
reproducibility.
SOURCE CODE shall be provided to NYNEX and/or its AFFILIATES' Electronics
SYSTEMS Assistance Centers (ESAC) organizations and ESAC field locations for use
in case of any emergency or out of service condition in accordance with the
escrow provisions of Section 13.9 of this AGREEMENT and then only for the
purpose of placing the SYSTEM back into operation. SOURCE CODE shall be provided
at the time of SOFTWARE delivery, and thereafter upon the performance of any
upgrades, changes, updates or other improvements thereto, all at no charge to
NYNEX or its AFFILIATES.
5.2 CUSTOM DEVELOPMENT OR MODIFICATION From time to time, NYNEX may issue
an Order to SUPPLIER to develop custom MATERIAL or SOFTWARE not generally
offered by SUPPLIER, or create modifications or enhancements to existing
SOFTWARE exclusively for NYNEX or for which NYNEX is charged substantially all
of the development cost. Subject to acceptance of an Order and agreement on the
scope of effort for which NYNEX retains title and rights to license of the
developed product, title to such custom developed MATERIAL or SOFTWARE shall
vest in NYNEX upon creation, unless such developments and/or modifications are
covered by a separate Feature Development Agreement between the parties, which
otherwise allocates, title or ownership rights to the developments and/or
modifications, defines the scope of work, schedules, license fees, and payments
as shall be appropriate to the project. SUPPLIER agrees that the cost to NYNEX
of such custom development services shall be determined in accordance with the
terms of Appendix D hereof, entitled CHANGES IN SCOPE. SUPPLIER shall warrant
any such custom developed product pursuant to the terms in Article 13,
Subsection 13.2.
5.2.1 INVENTIONS Supplier agrees that if any inventions, discoveries
or improvements are conceived or first reduced to practice in the course of
performance under this Section 5.2 and related in any way to the Work as defined
in Section 2.11 hereof, entitled Work, but not to inventions, discoveries or
improvements which are unrelated to the Work or the provision of
telecommunications services, Supplier will assign to NYNEX, SUPPLIER's entire
rights, title and interest in and to such inventions, discoveries and
improvements, and any patents that may be granted thereon in any country of the
world. Supplier further agrees that, without charge to NYNEX, SUPPLIER will sign
all papers and do all acts which may be necessary, desirable or convenient to
enable NYNEX, at NYNEX's expense, to file and prosecute applications for patents
on such inventions, discoveries and improvements, and to maintain patents
granted thereon.
5.2.2 WORK PRODUCT AND DEVELOPED INFORMATION For the purposes of
this Agreement, the term "Work Product" shall mean all material and information,
in any form now or hereafter known, including without limitation, concepts,
compilations, programs, specifications,
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<PAGE> 17
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 17 OF 77
records, documentation, and data, developed, created or prepared by or on behalf
of SUPPLIER, its employees, its agents, or its subcontractors, alone or jointly
with NYNEX employees or other persons, in connection with the SUPPLIER's
performance under Section 5.2. SUPPLIER agrees that SUPPLIER will disclose and
furnish promptly to NYNEX all such Work Product. SUPPLIER further agrees that
all such Work Product shall be NYNEX property, shall be treated as NYNEX
Information and kept in confidence by SUPPLIER, and may not be used for other
purposes except upon such terms as agreed to by NYNEX in writing.
5.2.3 AUTHORSHIP AND COPYRIGHT The entire right, title and interest,
including without limitation, copyright and moral rights, in all original works
of authorship fixed in any tangible medium of expression created or prepared by
SUPPLIER, or on SUPPLIER's behalf, alone or jointly with others, in the course
of performance under Section, 5.2 shall be vested in NYNEX. The parties
expressly agree to consider all such works as "works made for hire," to be owned
by NYNEX, to the extent permitted under applicable copyright laws. For all such
works, whether or not deemed a "work made for hire," SUPPLIER agrees, at no
additional charge, to assign, transfer and convey title to NYNEX of all such
right, title and interest, and to provide documentation satisfactory to NYNEX of
compliance with the foregoing.
5.2.4 ACCESS TO WORK IN PROGRESS All work in progress, including but
not limited to, design, test data and documentation generated through SUPPLIER's
effort or efforts of its permitted subcontractors, is subject to continuous
examination and evaluation by NYNEX on the SUPPLIER's or its subcontractor's
premises at any reasonable hour during and up to the completion of the Work or
termination of this Agreement. In addition, SUPPLIER agrees to render, on
reasonable request, status reports of the Work in progress, as quickly as
possible, containing the information required by NYNEX.
5.3 EXPORT LICENSE NYNEX shall not export or re-export the Software
License Materials, Documentation or other technical data without the appropriate
U.S. government approvals necessary for such export or re-export. NYNEX shall,
at its own expense, obtain all necessary customs, import, or other governmental
authorizations and Approvals.
ARTICLE 6
DOCUMENTATION AND SPECIFICATIONS
6.1 DOCUMENTATION SUPPLIER agrees to furnish DOCUMENTATION, as set forth
or otherwise identified in Appendix A hereof, entitled SCOPE OF WORK and the
terms and conditions stated within this AGREEMENT, for the SYSTEM hereunder, and
any succeeding changes thereto, at no additional charge. The cost of
DOCUMENTATION shall be included at no additional cost to NYNEX and/or its
AFFILIATES.
For each Order placed under this AGREEMENT, SUPPLIER shall furnish to
NYNEX or its AFFILIATES appropriate DOCUMENTATION including, but not limited to,
items of installation, engineering, planning, acceptance testing, operation and
maintenance of MATERIAL and SOFTWARE.
SUPPLIER shall be responsible for updating the DOCUMENTATION for any
subsequent updates and changes to DOCUMENTATION. SUPPLIER shall maintain a list
of persons and organizations of NYNEX and its AFFILIATES, to whom the updates
shall be provided. The updates and any
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NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 18
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 18 OF 77
subsequent changes shall contain a SUPPLIER identification reference number and
date of issue to facilitate administration. Such subsequent changes and updates
shall be provided within a reasonable time, at no charge to NYNEX and its
AFFILIATES.
SUPPLIER grants NYNEX and its AFFILIATES the right to make copies of any
documents furnished under this AGREEMENT for the exclusive internal use of NYNEX
and its AFFILIATES. If any document that is to be copied bears a copyright or
proprietary notice, NYNEX and its AFFILIATE shall reproduce the copyright or
proprietary notice on all copies. Notwithstanding the preceding reference to
proprietary markings, SUPPLIER shall not provide NYNEX or its AFFILIATES with
any proprietary information unless previously agreed to in writing.
6.2 SPECIFICATIONS AND DRAWINGS SUPPLIER's standard commercial and/or
technical specifications (including drawings) or other applicable documentation
("SPECIFICATIONS"), approved by NYNEX and its AFFILIATES relating to the SYSTEM,
MATERIAL, SERVICES, DOCUMENTATION and LICENSED MATERIALS provided hereunder and
listed in Appendix A hereof, entitled SCOPE OF WORK, shall be considered a part
of this AGREEMENT. SUPPLIER agrees to provide NYNEX, at no charge, a total of 20
copies of all such SPECIFICATIONS and approved amendments thereto, as issued.
ARTICLE 7
TERMINATION
7.1 TERMINATION FOR CAUSE In the event Supplier is in Default as defined
in Article 21 hereof, entitled Default, and has failed to remedy the default
within the Cure Period specified therein, NYNEX may, in addition to any other
remedy that may be available under this Agreement, at law or in equity,
terminate this Agreement upon giving at least [ * ] written Notice in
accordance with Section 30.10 hereof entitled NOTICES. However, the first time
that Notice is given to Supplier under this paragraph it may, by curing the
breach within [ * ] of receipt of the Notice, prevent the termination
for cause. In the case of SUPPLIER's Default resulting from a violation of law,
or an action which could or does endanger the health or safety of a person or
the environment, NYNEX may terminate this Agreement immediately, by giving
SUPPLIER Notice, without giving SUPPLIER any opportunity to cure.
7.2 TERMINATION FOR CONVENIENCE Notwithstanding any other provisions of
this Article 7, NYNEX may terminate this Agreement or cancel any Order(s) issued
hereunder for convenience upon [ * ] Notice to Supplier in accordance
with Section 30.10 hereof, entitled. NOTICES. Upon termination or cancellation
pursuant to this Section 7.2, NYNEX shall make payments to Supplier as set forth
in Appendix X hereto, entitled MODIFICATIONS TO APPENDICES unless more
specifically set forth in an applicable Order(s).
7.2.1 The effect of the termination of this Agreement shall be to
cancel any and all Order(s) under this Agreement; however the cancellation of
any individual Order(s) shall not affect the obligations of either party to the
other under any other existing Order(s). This Agreement shall continue in full
force and effect with respect to each Order(s) then in effect and not canceled,
until the expiration of each such Order(s) pursuant to the terms of that
Order(s).
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NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 19
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 19 of 77
7.2.2 Unless otherwise specified herein, NYNEX's liability to
Supplier with respect to such termination or cancellation shall be limited to
those set forth in Appendix X hereto, entitled MODIFICATIONS TO APPENDICES. Such
payment will constitute a full and complete discharge of NYNEX's obligations
under this Agreement, in the event of termination of the Agreement, or under the
specific Order(s), in the event of cancellation of an Order(s).
7.3 TERMINATION FOR INSOLVENCY, BANKRUPTCY, ASSIGNMENT, EXPROPRIATION,
AND/OR LIQUIDATION NYNEX may terminate this Agreement immediately by giving
written Notice in accordance with Section 30.10 hereof, without liability to the
Supplier, except for such MATERIAL, SOFTWARE, LICENSED MATERIALS and SERVICES
already delivered, installed and accepted together with such other MATERIALS
purchased for and identified to this Agreement which Supplier, even through the
application of its best efforts, cannot utilize with any of its other customers,
in the event the Supplier:
1. fails to meet and maintain the financial performance criteria defined in
the Financial Accountability Requirement Appendix F hereof, entitled
Business Issues;
2. is declared insolvent or bankrupt, or makes an assignment or other
arrangement for the benefit of its creditors;
3. has all or any substantial portion of its capital stock or assets
expropriated by government authority; or
4. is dissolved or liquidated (except as a consequence of a merger,
consolidation, or other corporate reorganization not involving the
insolvency or expropriation of that party).
If Supplier is involved in any of the events described in subsections
(1.), (2.), (3.) or (4.) it shall promptly notify NYNEX in accordance with
Section 30.10 hereof.
7.4 TRANSFER OF CONTROL In the event of the direct or indirect sale or
transfer of control of Supplier or substantially all of its assets to any third
party (other than a third party approved by NYNEX, which approval shall not be
unreasonably withheld), NYNEX shall have the [ * ] this Agreement at [ * ]
thereafter upon giving [ * ] thereof to Supplier or its successor in
interest and upon the giving of [ * ] in accordance with Section [ * ]
hereof, this Agreement [ * ] and NYNEX shall have [ * ] to Supplier
[ * ] for Material and licensed Materials [ * ] .
7.5 TERMINATION BY SUPPLIER Supplier may not terminate this Agreement, or
cancel an Order(s) or intellectual property rights granted or created hereunder,
except for non-payment of the purchase price or other charges and fees and then
only if after sixty (60) days of receipt of written Notice of Non-payment in
accordance with Section 30.10 hereof, NYNEX fails to pay such purchase price or
other charges and fees and thereupon Supplier issues its written Notice of
Default and NYNEX fails to pay such purchase price or other charges and fees
within ten (10) business days of receipt of such Notice of Default.
7.6 In the event of any termination or non-renewal of this Agreement,
Supplier shall assist and cooperate in all reasonable ways with NYNEX and any
replacement provider in the transition to a replacement provider. Such
assistance shall include, but not be limited
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NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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CONTRACT No. X134094D
OCTOBER 16, 1996 PAGE 20 OF 77
to, the delivery to NYNEX [ * ] subject to the limitations of this
Agreement. [ * ] and [ * ] and shall be provided in accordance with the
provisions of Section [ * ] hereof entitled [ * ] , including provisions
for the payment of additional fees for any additional Work.
ARTICLE 8
PRICES AND TERMS OF PAYMENT
8.1 PRICES
A. SYSTEMS, PRODUCTS, MATERIAL, SOFTWARE, SERVICES, DOCUMENTATION and
LICENSED MATERIALS will be furnished by SUPPLIER in accordance with the
prices stated in APPENDIX C hereof, entitled PRICING. All costs and prices
identified are inclusive of Appendices A through H and X as well as all
terms and conditions of this AGREEMENT. Such prices shall be applicable to
Orders issued to SUPPLIER by NYNEX or its Affiliate(s) at the location and
by the method agreed to by the parties (hereinafter "placed") for up to
and including [ * ] households passed. SUPPLIER"s price
list for or SOFTWARE in APPENDIX C hereto, entitled PRICING must
differentiate between operating system SOFTWARE and applications SOFTWARE
according to the FCC mandated Uniform System of Accounts, Part 32 of the
FCC Rules and Regulations. SUPPLIER shall strive during the Term to reduce
prices for all Material, SOFTWARE and Services. in accordance with the
goal of Continuous Improvement.
B. SUPPLIER shall not, during the effective term of this Agreement,
[ * ] for any Product [ * ] for such PRODUCT
specified in Appendix C hereto, entitled PRICING.
C. Price reductions may be initiated by SUPPLIER at any time.
D. Continuous Improvement. SUPPLIER and NYNEX shall identify areas for
SUPPLIER's continuous improvement in cost, quality, and service over the
term of this Agreement. SUPPLIER shall afford NYNEX the ability to realize
such improvement including price reductions. SUPPLIER and NYNEX will meet
at least once every three months to assess SUPPLIER's progress towards
implementation of continuous improvement.
E. New Technology Replacement. NYNEX and SUPPLIER recognize that SUPPLIER
may develop and market new PRODUCTS ("New Technology") that are designed
to enhance or replace the PRODUCTS provided for in this Agreement.
SUPPLIER agrees to include THE NEW Technology as part of its PRODUCT
offerings within the terms provided for in this Agreement, and at a price
for comparable, successor, or substitute features and functionality,
[ * ] for PRODUCT or Purchase volumes stated within this Agreement
subject to the following:
1. SUPPLIER shall strive during the Term to reduce prices for all
Material, SOFTWARE, and Services in accordance with the goal of
Continuous Improvement.
2. New Technology shall only be furnished to NYNEX pursuant to a
written amendment hereto and in accordance with the Changes to
Material and SOFTWARE provisions of this Agreement including the
notice requirements therein.
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* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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CONTRACT NO. X134094D
OCTOBER 16,1996 PAGE 21 OF 77
3. [ * ] shall be priced at the [ * ] for comparable, or successor,
substitute features and functionality, as the replaced Material or
SOFTWARE in accordance with the mutual goal of Continuous
Improvement.
4. SUPPLIER shall ensure continued availability of the current
PRODUCTS during the Term at the [ * ] as stated in Appendix C
hereto, entitled PRICING unless otherwise agreed to pursuant to a
written amendment to this Agreement.
5. All such proposed changes to Appendix C hereto, entitled PRICING
shall be subject to NYNEX's written agreement evidenced by a written
amendment to this Agreement.
F. New Technology Additions - SUPPLIER may propose the addition of New
Technology to Appendix A hereto, entitled SCOPE OF WORK which is not
intended to replace or upgrade current Material ("New Technology
Addition"). SUPPLIER shall provide a detailed written explanation of how
such New Technology Addition will meet the joint goal of Continuous
Improvement. All proposed New Technology Additions shall only be furnished
to NYNEX pursuant to a written Amendment to this Agreement or pursuant to
a separate written agreement between the parties.
8.2 [ * ] SUPPLIER represents that all of the prices, warranties,
benefits, terms and conditions granted to NYNEX or its Affiliate(s) by SUPPLIER
hereunder will be [ * ] than the equivalent prices, warranties, benefits, terms
and conditions [ * ] to SUPPLIER's [ * ] under [ * ] or [ * ] circumstances.
If at any time during the term of this AGREEMENT, SUPPLIER shall [ * ]
prices, warranties, benefits, terms or conditions for substantially the same or
similar MATERIAL or SERVICES or DOCUMENTATION or LICENSED MATERIALS as those
provided hereunder, then:
A. SUPPLIER shall, within [ * ] calendar days after the effective date of
such offering, [ * ] NYNEX to its Affiliate(s) of such fact in
accordance with Section 30.10 hereof, and [ * ] NYNEX or its
Affiliate(s) [ * ] offering and [ * ] any additional differentiating
factors; and
B. this AGREEMENT and all applicable Orders shall be deemed to be
automatically amended, effective retroactively to the effective date of
the [ * ] , and SUPPLIER shall provide [ * ] prices, warranties,
benefits, terms and conditions [ * ]; and
C. NYNEX shall have the right to decline to accept [ * ] , in which
event such automatic amendment shall be deemed to be void.
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NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 22 OF 77
8.3 TERMS OF PAYMENT
A. FIRST OFFICE APPLICATION ("FOA") PHASE I [ * ] shall be issued by
Supplier and [ * ] shall be made by NYNEX until [ * ] which means
that a sufficient number of tracking units to constitute
approximately [ * ]. Upon FOA Phase I Acceptance, SUPPLIER shall
issue its invoice for SYSTEM, PRODUCT, MATERIAL, SOFTWARE and
associated SERVICE which shall be paid [ * ] from Phase I Acceptance
of the FOA in accordance with the terms of this AGREEMENT.
B. FOA PHASE II Subsequent to FOA Phase I Acceptance, Supplier shall
furnish, deliver and install the System(s), Product, Material,
Software and Service required to complete the installation of the
remainder of the FOA which shall include a sufficient number of
tracking units in order to determine whether or not SUPPLIER'S
SYSTEM, PRODUCT, MATERIAL, SOFTWARE or SERVICES is fully
operational, loaded with sufficient traffic and functioning and
operating in a fully compatible mode as a SYSTEM in accordance with
the requirements and SPECIFICATIONS of this AGREEMENT or any
Order(s) issued pursuant to this AGREEMENT ("FOA Phase II").
SUPPLIER's invoice for the FOA Phase II SYSTEM(S), PRODUCT,
MATERIAL, SOFTWARE and associated SERVICES shall be paid [ * ] from
receipt of invoice, but in no event shall invoice be dated or issued
prior to shipment. Payment by NYNEX of such invoices does not mean
or imply that the Product has been accepted and does not impair or
limit in any way NYNEX's full rights and remedies of acceptance
which shall be and remain as set in Article 12 hereof, entitled
QUALITY ASSURANCE.
C. GENERAL AVAILABILITY Subsequent to FOA Phase I and Phase II
Acceptance, SUPPLIER's invoice for all other and additional SYSTEM,
PRODUCT, MATERIAL, SOFTWARE and associated SERVICES shall be paid
[ * ] from receipt of invoice, but in no event shall invoice be
dated or issued prior to shipment. Payment by NYNEX of such
invoices does not mean or imply that the Product has been accepted
and does not impair or limit in any way NYNEX's full rights and
remedies of acceptance which shall be and remain as set forth in
Article 12 hereof, entitled QUALITY ASSURANCE.
8.4 BILLING VERIFICATION AND AUTHORIZATION FOR PAYMENT PROCESS ("BVAPP")
whenever NYNEX issues an Order, the identification number of which is prefaced
by the letter "B," the provisions of this clause "BVAPP" shall apply. Whenever
the provisions of this clause conflict with any other clause in this AGREEMENT,
the provisions of this clause shall prevail.
SUPPLIER shall code central office equipment and render billing as
directed by NYNEX.
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NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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Contract No. X134094D
October 16,1996 PAGE 23 of 77
ARTICLE 9
TITLE AND RISK OF LOSS
9.1 TITLE AND RISK OF LOSS In the event SUPPLIER does not have an Order to
install MATERIAL and the installation is to be performed by NYNEX, Title and
Risk of Loss or damage to MATERIAL purchased by NYNEX or its AFFILIATE under
this AGREEMENT, or an Order issued pursuant to this AGREEMENT, shall vest in
NYNEX or its AFFILIATE when the delivery of the MATERIAL has been completed to
the location specified in the Order.
When the Order(s) is placed by an Affiliate(s), title to direct ship
MATERIAL shall pass from SUPPLIER directly to the applicable AFFILIATE(s) and
the receiving company shall be entitled to all of the rights otherwise afforded
to NYNEX under this AGREEMENT.
If an Order requires additional services, such as unloading, hoisting and
rigging, installation or acceptance testing to be performed by SUPPLIER,
SUPPLIER shall be responsible for loss or damage to the MATERIAL while the
MATERIAL is in the custody, control or possession of SUPPLIER until such
services have been performed. Responsibility for such loss or damage shall be
governed by the clause hereof entitled "LIABILITY AND INSURANCE."
SUPPLIER shall retain risk of loss or damage for all MATERIAL until NYNEX
and/or its AFFILIATES shall have inspected the shipping container(s) and
verified that the MATERIAL received complies with the order with respect to
quantity and condition of the shipping container in which the MATERIAL is
received. In the event that the shipment does not comply NYNEX shall note any
shortage and/or visible transportation damages on the shipping document and
notify SUPPLIER of same within (7) days of receipt of MATERIAL; and cooperate
with SUPPLIER in the prosecution of loss or damage and resulting claim.
9.2 QUIET ENJOYMENT With respect to any PRODUCT or Service furnished
hereunder, SUPPLIER agrees that NYNEX, or its Affiliate(s), shall be entitled to
possess and use such PRODUCT or Service during the Initial term, including any
extensions or renewals thereof, without interruption by SUPPLIER or any person
claiming by or through SUPPLIER, provided only that NYNEX shall duly perform its
obligations pursuant to this Agreement and the applicable Order.
ARTICLE 10
DELIVERY AND SHIPPING
10.1 FOB POINT MATERIAL and SOFTWARE shall be delivered FOB Rohnert Park,
Ca., or a point geographically closer and within the continental United States,
Destination collect in accordance with instructions provided on the Order. The
NYNEX, or its Affiliate(s), designated location to which the MATERIAL and
SOFTWARE are to be delivered shall be indicated on the order.
10.2 COSTS AND ROUTING. For all OC shipments, SUPPLIER shall ship all
MATERIAL and SOFTWARE Freight Collect (OC) according to NYNEX's instructions,
which will be given to SUPPLIER by Freight Traffic Services at the 800 number
below, and have bills sent to the following address (which address NYNEX may
change upon providing SUPPLIER with written Notice in accordance with Section
30.10 hereof).
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CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 24 OF 77
Telesector Resources Group
c/o Freight Traffic Services (FTS)
P.O. Box 1259
Somerville, New Jersey 08876
1-800-891-6218
If SUPPLIER fails to follow NYNEX's shipping instructions, or if SUPPLIER
fails to request instructions when directed to in an Order, then SUPPLIER
shall be solely responsible for the associated freight bill and freight
costs in excess of NYNEX's contract rates that are incurred due to
SUPPLIER's nonconformance. If the freight bill is paid by NYNEX, SUPPLIER
shall be required to reimburse NYNEX accordingly within 30 days.
10.3 SCHEDULES In order to facilitate acquisition planning for SYSTEM(S),
MATERIAL, SOFTWARE and SERVICES, SUPPLIER shall establish standard delivery
schedules based upon mutually agreed upon forecasts provided by NYNEX or its
Affiliates and/or annual commitment levels for the SYSTEM(S), MATERIAL, SOFTWARE
and SERVICES to be furnished under this AGREEMENT.
A. These schedules will be from receipt of NYNEX's or its Affiliates'
Order until delivery to NYNEX's or its Affiliates' specified
location. Such schedules, as shall be provided to NYNEX by SUPPLIER,
shall be mutually agreed upon and shall apply to all routine orders
placed under this AGREEMENT.
B. In the event that an accelerated delivery schedule is required by
NYNEX, SUPPLIER shall utilize its best efforts to comply with such
requirements.
C. SUPPLIER shall give written or electronically transmitted notice as
Order Acknowledgment at least fifteen (15) days prior to the
scheduled delivery date.
D. If the possibility exists that the scheduled date of delivery will
not be met, or if Supplier notifies NYNEX that an error or
discrepancy exists on an Order, SUPPLIER shall immediately notify
NYNEX as stated herein in the clause entitled "NOTICES."
10.4 SHIPPING AND BILLING Unless instructed otherwise by NYNEX, SUPPLIER
shall, for Orders placed hereunder: (1) deliver entire quantity of items
ordered; (2) ship to the destination designated in the Order in accordance with
specific shipping instructions; (3) ensure that all subordinate documents bear
NYNEX's Order number; (4) enclose a packing memorandum with each shipment and
when more than one package is shipped, identify the one containing the
memorandum; (5) mark NYNEX's Order number on all packages and shipping papers;
(6) render itemized invoices in duplicate, or as otherwise specified, showing
Order number; (7) render separate invoices for each shipment or Order; (8)
invoice NYNEX by mailing or otherwise transmitting invoices, bills and notices
to the billing address on the Order after shipment of MATERIAL. Shipping and
routing instructions may be altered in writing, as mutually agreed by SUPPLIER
and NYNEX.
SUPPLIER's invoicing for SOFTWARE must reflect a differentiation between
operating system SOFTWARE and applications SOFTWARE, according
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CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 25 OF 77
to the FCC mandated Uniform System of Accounts; Part 32 of the FCC Rules and
Regulations.
In addition, SUPPLIER agrees to provide invoices that include priced units
of MATERIAL for use in the Continuing Property Record, the requirements of which
shall be specified by NYNEX.
10.5 SHIPPING SCHEDULE The shipping schedule applicable to each Order will
be that set forth in the Order or any Change Order, if applicable. SUPPLIER
agrees not to ship MATERIAL or SOFTWARE prior to the agreed-upon shipping
schedule. Any variation from the foregoing must be agreed upon by the parties in
writing.
10.6 INEXCUSABLE DELAY In the event SUPPLIER fails to meet the agreed-upon
delivery date of MATERIAL or SOFTWARE or the agreed-upon completion date for
SERVICES and fails [ * ] within [ * ] set forth in Section [ * ] hereof for
reasons other than Force Majeure or delays caused by NYNEX's or its AFFILIATES'
material failure to meet its obligations to SUPPLIER, then SUPPLIER shall be
considered in breach of contract and shall be [ * ] to compensate [ * ] for
[ * ] in accordance with Section [ * ] hereof entitled [ * ].
10.7 PERFORMANCE COMPENSATION PAYMENTS Supplier shall pay NYNEX, at NYNEX's
election, either i) an amount equal to [ * ] Supplier fails to make delivery or
otherwise perform or comply with the terms and conditions of this Agreement; or
ii) an amount equal to [ * ]. The payment of compensatory damages by Supplier
shall be deemed made under and subject to Article 20 hereof, entitled
PERFORMANCE STANDARDS.
10.8 PERFORMANCE COMPENSATION CURE PERIOD In the event of any Supplier
breach, default or other failure to perform under (i) Section 10.6 hereof,
entitled INEXCUSABLE DELAY, or (ii) Section 12.7 hereof, entitled ENGINEERING
COMPLAINTS, or (iii) Section 12.13.3 hereof, entitled FOA CORRECTIVE ACTION
PLAN, or (iv) 12.12.5 hereof, entitled GA CORRECTIVE ACTION PLAN, or v) Article
17 hereof, entitled WORKAROUND, and NYNEX elects to proceed under Article 20
hereof, entitled PERFORMANCE STANDARDS in order to receive compensation for such
Breach pursuant to Section 10.7 hereof, entitled PERFORMANCE COMPENSATION
PAYMENTS, NYNEX shall provide Supplier with written Notice thereof in accordance
with Section 30.10 hereof, and Supplier shall have [ * ] from the mailing, or
other issuance, of said notice to cure the Performance Failure ("Performance
Failure Cure Period"). If at the end of the Performance Failure Cure Period, the
Performance Failure(s) has not been remedied to the reasonable satisfaction of
NYNEX, then NYNEX shall assess Performance Compensation Payments and Supplier
shall make such Performance Compensation Payments to NYNEX in accordance with
Section 10.7 hereof, entitled PERFORMANCE COMPENSATION PAYMENTS.
10.9 NOTICE OF DELAY SUPPLIER, having agreed to the delivery date and/or
completion date, whichever is applicable, for any combination of MATERIAL,
SOFTWARE or SERVICES incorporated into NYNEX' Order, further agrees to notify
NYNEX in accordance with Section 30.10 hereof, as soon as any foreseeable delay
in that date becomes known to SUPPLIER.
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NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 26 OF 77
ARTICLE 11
ORDERS
11.1 ORDERS Any written order or statement of work ("Order") issued by
NYNEX or its Affiliate(s) for a SYSTEM, PRODUCT, MATERIAL, SOFTWARE, and
SERVICES, DOCUMENTATION, and LICENSED MATERIALS specified herein, or which
reference this Agreement, shall be deemed to be placed under and incorporate the
terms and conditions of this AGREEMENT.
An Order for the purchase of a SYSTEM, PRODUCT, MATERIAL, SOFTWARE, and
SERVICES shall be written on a NYNEX or its Affiliate's purchase order form and
shall contain the following:
A. The incorporation by reference of this AGREEMENT;
B. A complete list of the SYSTEM, PRODUCT, MATERIAL, SOFTWARE, and
SERVICES to be purchased specifying quantity, type, model, feature,
description and purchase price;
C. The locations at which the SYSTEM, PRODUCT, MATERIAL, SOFTWARE, and
SERVICES will be delivered or installed and to which invoices shall
be forwarded;
D. The dates by which the SYSTEM, MATERIAL, SOFTWARE and SERVICES are
(a) to be shipped or performed and (b) installed or completed and
ready for use;
E. Any other special terms and conditions agreed upon by the parties.
Orders placed for SYSTEM(S), MATERIAL, PRODUCT, SERVICES, DOCUMENTATION,
SOFTWARE and RELATED DOCUMENTATION which are consistent with the terms and
conditions of this AGREEMENT, shall be deemed accepted by SUPPLIER unless
written notice to the contrary is received by NYNEX or its Affiliate(s) within
ten (10) business days of SUPPLIER's receipt of Order.
NYNEX and its AFFILIATES shall have the right to change the locations at
which the SYSTEM, PRODUCT, MATERIAL, SOFTWARE, and SERVICES will be delivered or
installed and/or to which invoices shall be forwarded at least 3 days prior to
shipment at no additional cost to NYNEX and/or its AFFILIATES. SUPPLIER shall
accept such changes and forward a written acknowledgment of such changes to
NYNEX or its AFFILIATE.
11.2 VARIATION IN QUANTITY NYNEX assumes no liability for any MATERIAL or
SOFTWARE produced or processed in excess of the amount specified in an Order
issued pursuant to this AGREEMENT.
11.3 TERMINATION OF ORDER NYNEX may, upon written notice to SUPPLIER, at
any time prior to shipment, terminate any or all Orders, or portions thereof,
placed by NYNEX hereunder, except with respect to SYSTEM(S), PRODUCT, MATERIAL
and/or SOFTWARE which has already been delivered or SERVICES which have already
been completed. Unless otherwise specified herein, NYNEX' liability to SUPPLIER
with respect to such terminated Order(s) shall be limited to SUPPLIER's purchase
price of all components which are not usable in SUPPLIER's other operations or
marketable to SUPPLIER's other customers.
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CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 27 OF 77
11.4 CHANGE ORDER
11.4.1 NYNEX may at any time upon fifteen (15) days written notice
to Supplier, by written order, make any change within the scope of this
Agreement or any Order(s), including, without limitation, the addition or
deletion of System(s), Product, Material, Software covered, the Service(s) to be
performed, the time and/or place of performance, delivery or installation
thereof. Any such order shall be specifically identified as a Change Order
pursuant to this Article. In the event NYNEX desires to make a change, NYNEX
shall request Supplier to provide a written proposal stating the additional
requirements or reduction of existing requirements and the cost and schedule
implications incident thereto. SUPPLIER agrees that the cost to NYNEX of the
change shall be determined in accordance with the terms of Appendix D hereof,
entitled CHANGES IN SCOPE. If NYNEX is in agreement with the terms, conditions
and charges specified in the proposal, NYNEX will issue a Change Order pursuant
to this Agreement. In the event that the Change Order is issued at least fifteen
(15) days prior to the scheduled delivery date, the change(s) shall be
accomplished without affecting the original delivery date; unless otherwise
specified in the terms of an agreed upon Change Order if the Change Order is
issued less than fifteenth (15) days from the scheduled delivery date, the
delivery date may be subject to change and Supplier will identify, upon receipt
of the Change Order, whether, and to what extent, any change in delivery date
will occur. All Services and Materials covered hereunder shall be performed in
accordance with this Agreement and such changes thereto as are subsequently
authorized by a written Change Order issued by NYNEX. Nothing in this clause
shall excuse the Supplier from proceeding with the Agreement as changed.
11.4.2 Before the issuance of a Change Order under this Agreement,
NYNEX may request SUPPLIER's written agreement as to the maximum (in case of an
increase) or minimum (in case of a decrease) adjustments to be made in the price
and/or in the time of performance, by reason of the change. NYNEX may also
request an agreement limiting the adjustments to any other provisions of the
Agreement which may be subject to equitable adjustment by reason of the change.
Any such written agreement shall then be cited in the Change Order, and upon its
issuance shall be deemed to become part of this Agreement. In making equitable
adjustments pursuant to this clause, in no event shall the definitive adjustment
exceed the maximum or be less than the minimum price and/or time of performance
adjustments so established, nor otherwise be inconsistent with other adjustment
limitations so established. Except with respect to such limitations, nothing
contained in this paragraph (2) shall affect the SUPPLIER's rights to equitable
adjustment by reason of the change pursuant to this clause.
11.4.3 Unless expressly stipulated elsewhere in this Agreement as
being excepted from this provision, wherever this Agreement provides for
submittal of designs, data including Software, elements, procedures, or other
items for approval of NYNEX, such approvals shall not be construed as a complete
check as to the adequacy of said design, procedure, practice or item, nor as a
agreement that the design, procedure, practice or items will meet the
requirements of the Order or Change Order. Such approvals are for the purpose of
ensuring NYNEX's knowledge of the SUPPLIER's plans and progress and will
indicate only that the SUPPLIER's general approach toward meeting contractual
requirements is satisfactory. Such approvals shall in no way relieve the
Supplier of the responsibility for any error or deficiency which may exist in
the submitted design, procedure, or other items, as the
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CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 28 OF 77
Supplier shall be responsible for meeting all the requirements for the
Agreement.
11.4.4 NYNEX's engineering, technical, and administrative personnel
may from time to time render assistance or give technical advice to, or effect
an exchange of information with, SUPPLIER's personnel in a liaison effort
concerning the System, Products, Material, Software or Services to be furnished
hereunder. However, such exchange of information or advise shall not vest
Supplier with the authority to change the Material, Software or Service(s)
hereunder or the provisions of the Agreement, and no change in the Material or
Service(s) or the provisions of the Agreement shall be binding upon NYNEX unless
incorporated as a change in accordance with Section 11.4 hereof. Only NYNEX, is
authorized to make a change to the Agreement.
11.4.5 Requests for information related to Change Orders shall be
directed to both Jim Henderson, Sourcing Process Leader, NYNEX, Corporate
Sourcing, 240 East 38th Street, 14th Floor, New York, N.Y. 10016; (212) 338-1088
and to Charlie Andrianopoulos, Director/Design Build Broadband, NYNEX, 251 Locke
Drive, Marlboro, Ma. 01750, (508) 624-1100 or to their successor(s) as
designated by NYNEX.
11.5 STOP WORK ORDER
11.5.1 NYNEX may, at any time, by written order to the Supplier,
delivered in accordance with the notice provisions of Section 30.10 hereof,
require the Supplier to stop all or any part of the Work called for by this
Agreement or applicable Order(s) for a period of up to [ * ] after the Stop Work
Order is delivered to the Supplier, and for any further period to which the
parties may agree not to exceed [ * ]. Any such order shall be specifically
identified as a Stop Work Order issued pursuant to this clause and shall
automatically extend the time of performance or the delivery date of such Work
for a period equal to the period of the Stop Work Order.
11.5.2 Upon receipt of such an order, the Supplier shall forthwith
comply with its terms and take all reasonable steps to minimize the incurrence
of costs allocable to the Work covered by the order during the period of work
stoppage. Within a period of [ * ] after a Stop Work Order is delivered to the
Supplier, or within any extension of that period to which the parties shall have
agreed, NYNEX shall either: (i) cancel the Stop Work Order, or (ii) terminate
the Work covered by such order as provided in Article 7 hereof, entitled
TERMINATION.
11.5.3 If a Stop Work Order issued under this clause is canceled or
the period of the order or any extension thereof expires, the Supplier shall
resume Work. An equitable adjustment shall be made in delivery schedule or the
period of performance and in any other provisions of the Agreement that may be
affected, and the Agreement shall be modified in writing accordingly, if,
(i) the Stop Work Order results in an increase in the time required
for, or in the SUPPLIER's cost properly allocable to the performance of any part
of this Agreement, and
(ii) the Supplier asserts a claim for such adjustment within [ * ],
provided that, if NYNEX decides the facts justify such action, it may
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NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 29
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 29 OF 77
receive and act upon any such claim asserted at any time prior to final payment
under this Agreement.
11.5.4 If a Stop Work Order is not canceled, the Work covered by
such order shall be deemed terminated pursuant to the TERMINATION clause of this
contract.
11.6 NYNEX ADVICE
In the course of performing the Work and providing the Services, Supplier
may receive advice from NYNEX concerning results to be achieved and requirements
to be met in the performance of the Work. Supplier shall make every reasonable
effort to comply to any advise consistent with the terms of this Agreement but
it shall be the responsibility of SUPPLIER's representatives and supervisors to
give such instructions and directions as may be necessary or appropriate to
ensure that the work assignments of SUPPLIER's employees are properly carried
out in conformity with such advice.
ARTICLE 12
QUALITY ASSURANCE
12.1 QUALITY SYSTEM The SUPPLIER shall maintain a quality system which
assures that the SYSTEM(s), MATERIAL, SOFTWARE or PRODUCTS/SERVICES provided to
NYNEX meet all performance standards and requirements, and perform as intended,
including without limitation those identified in Appendix A hereof, entitled
SCOPE OF WORK, together with the following: the SUPPLIER'S quality system shall
satisfy the requirements in TR-NWT-001252, Bell Communications Research
Technical Reference, "Quality System Generic Requirements", Issue 1, December
1992 for hardware design and manufacturing; and TR-TSY-000179, Bell
Communications Research Technical Reference, "Quality System Generic
Requirements for SOFTWARE", Issue 2, June 1993 for SOFTWARE design and
development. SUPPLIER shall remain updated on all such performance standards and
requirements and shall, at the discretion of NYNEX and/or its AFFILIATES, meet
those updated standards and requirements.
In addition to the standards, specifications and requirements set forth or
otherwise identified in Appendix A hereof, entitled SCOPE OF WORK, the SUPPLIER
shall also adhere to the following standards and requirements throughout the
life of this agreement:
1. TR-TSY-000078, Bell Communications Research Technical Reference, "Physical
Design and Test Requirements for Telecommunications PRODUCTS and Equipment",
Issue 3, December 1991.
2. FR-NWT-000796, Bell Communications Research Framework, "Reliability and
Quality Generic Requirements (RQGR)", Issue 3, June 1993.
3. TR-NWT-000870, Bell Communications Research Technical Reference,
"Electrostatic Discharge Control in the Manufacture of Telecommunication
Equipment", Issue 1, February 1991.
4. TR-NWT-001037, Bell Communications Research Technical Reference, "Statistical
Process Control Program Generic Requirements", Issue 1l, November 1990.
For SOFTWARE design, development and delivery the SUPPLIER shall adhere to
the following requirements:
- --------------------------------------------------------------------------------
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 30
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 30 OF 77
1. GR-282-CORE, Bell Communications Research Generic Requirements, "SOFTWARE
Reliability and Quality Acceptance Criteria (SRQAC)", Issue 1, December 1994.
2. GR-1315-CORE, Bell Communications Research Generic Requirements, "In Process
Quality Metrics (IPQM)", Issue 1, September 1995.
3. QPS 88.010, Bell Communications Research Quality Program Specification,
"Quality Assurance Surveillance Program for SOFTWARE General", Issue 6,
November 1991.
12.2 QUALITY PERFORMANCE REPORTING The SUPPLIER agrees to provide, at no
cost to NYNEX, regular data reports which demonstrate the performance of the
SUPPLIER'S PRODUCT while in development, manufacture and service, and the
adherence of the SUPPLIER'S PRODUCT to stated requirements. The following
requirements for collecting, calculating and reporting data shall be followed:
1. TR-TSY-000389, Bell Communications Research Technical Reference, "SUPPLIER
Data Program Analysis", Issue 1, August 1987.
2. GR-929-CORE, Bell Communications Research Generic Requirements, "Reliability
and Quality Measurements for Telecommunications SYSTEMS(RQMS", Issue 1 -
Revision 1, December 1995. Note: the Conditional Requirements of Sections
3.4.5, 3.4.9.1, 3.4.9.2, 3.4.9.3, shall be required.
3. TR-NWT-001323, Bell Communications Research Technical Reference, "SUPPLIER
Data - Comprehensive Generic Requirements", Issue 1 November 1993.
4. TR-NWT-001359, Bell Communications Research Technical Reference, "SUPPLIER
Data - Basic Generic Requirements", Issue 1 , June 1993.
All required reports and data shall be delivered to NYNEX's SUPPLIER
Quality Organization at:
SUPPLIER Quality Leader
240 E 38 ST., 14th floor
New York, NY 10016
SUPPLIER agrees to render other periodic reports for service affecting
conditions or other conditions that affect the operations and administrative
procedures of NYNEX of its AFFILIATES, or as otherwise requested by NYNEX of its
AFFILIATES. ALL PROVIDED INFORMATION SHALL BE CLASSIFIED AS PROPRIETY TO NYNEX
AND SUPPLIER.
12.3 SOURCE INSPECTION Source Inspection means that NYNEX shall have the
right to conduct due diligence inspection and testing at the Supplier's, and any
of its subcontractors, facilities at any point(s) or on a continuing basis as
NYNEX may deem appropriate. Source Inspection applies to all MATERIAL and/or
SOFTWARE. Source Inspection will be performed upon Material and/or SOFTWARE by a
NYNEX representative. When requested, SUPPLIER will furnish NYNEX full access to
its facilities and those of its subcontractors and with the appropriate
documentation proving that the PRODUCT does conform to all contractual
specifications, and the SUPPLIER'S projected failure rate, along with the test
data that substantiates the conformance of MATERIAL and/or SOFTWARE prior to
shipment. NYNEX does reserve the right to perform confirmation of data at the
SUPPLIER's facility. SUPPLIER shall provide, without charge, any production
testing facilities and personnel required to inspect and test the MATERIAL
and/or SOFTWARE as described in QPS 70.001-N, NYNEX Quality Program
Specification, "Quality Assurance Procedures Applicable to Material as Specified
on the Order", Issue 2, June 1993, to determine
- --------------------------------------------------------------------------------
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 31
Contract No. X134094D
OCTOBER 16, 1996 Page 31 OF 77
that the MATERIAL and/or SOFTWARE meets the requirements of the specification
and/or Order.
Where NYNEX SUPPLIER Quality Management finds received PRODUCTS do not
meet contractual requirements, the cost of inspection and testing, replacement
and shipping shall be incurred by the SUPPLIER.
NYNEX reserves the right to have the SUPPLIER inspect 100% of their
PRODUCT at their cost in cases where PRODUCT does not meet contractual
specifications.
12.4 PACKING Adequate protective packing and any special packing required
by law or governmental regulation for domestic shipment shall be furnished by
SUPPLIER at no additional charge for MATERIAL purchased, repaired, replaced or
refurbished hereunder.
The SUPPLIER shall adhere to the following requirements for packaging of
MATERIALS and or SOFTWARE:
1. ME-000047NX, NYNEX Specification, "Packing, Packaging and Palletization",
Issue 7, November 1991.
2. GR-1421-CORE, Bell Communications Research Generic Requirements,
"ESD-Protective Circuit Pack Containers", Issue 2, June 1995. *Note that
Conditional/Objective Requirements CR4-33, 04-34, 04-41, 04-42, 04-54,
CR4-56, and 04-57 shall be required.
12.5 MARKING All MATERIAL and/or related packaging furnished hereunder
shall be marked for identification purposes with part number, or Comcode number,
and/or SUPPLIER's Model/Serial number as applicable.
In addition SUPPLIER agrees to adhere to the following:
1. NX-00008TRG, NYNEX Specification, "Marking Specification", Issue 7, September
1993.
2. NX-00138TRG, NYNEX Specification, "PRODUCT Marking Specification", Issue 1,
September 1993.
3. ST-STS-000124, Bell Communications Research Technical Reference, "Common
Language Codes for Frame Identification", Issue 1, February 1989.
4. TR-STS-000383, Bell Communications Research Technical Reference,
"Generic Requirements for Common Language Bar Code Labels", Issue 5,
January 1991.
5. GR-485-CORE, Bell Communications Research Generic Requirements, "Common
Language Equipment Coding Processes and Guidelines", Issue 2, October 1995.
6. QPS 94.890, Bell Communications Research Quality Program Specification,
"Common Language Equipment Identification (CLEI)/Bar Code Labels", Issue 4,
February 1990.
12.6 TECHNICAL SUPPORT Technical Support shall be provided in accordance
with Appendix A hereof, entitled SCOPE OF WORK; and except to the extent more
specifically set forth in Appendix A hereof, entitled SCOPE OF WORK, shall
include at least the following: field service and assistance, replacement and
repair parts and/or repair SERVICES or MATERIAL, SERVICES and SOFTWARE, PROVIDED
HOWEVER, THAT THE AVAILABILITY or performance of this technical support SERVICE
shall not be construed as reducing SUPPLIER's obligations as set forth in the
clause entitled "WARRANTIES" or elsewhere provided for in this AGREEMENT.
- --------------------------------------------------------------------------------
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 32
Exhibit 22
Contract No. X134094D
Page 32 of 77
October 16, 1996
SUPPLIER's technical support SERVICES for MATERIAL, SERVICES and
SOFTWARE shall include telephone and emergency (service affecting) onsite
twenty-four (24) hours, seven (7) days assistance.
During the warranty period, SUPPLIER shall provide technical support to
NYNEX and/or its AFFILIATE without charge to correct warranty defects.
During any SYSTEM installations identified by NYNEX or its AFFILIATES,
SUPPLIER shall provide, on an as requested basis and as mutually agreed upon and
at no additional charge to NYNEX or its AFFILIATES, on-site technical advisors
at each of the wire center sites to assist NYNEX or its AFFILIATE during the
installation and Acceptance periods to ensure SYSTEM performance in accordance
with SPECIFICATIONS. Non-Emergency requests for acceptance assistance, as
required, must be made at least 5 days prior to the scheduled date.
A. Full Customer Support During Engineering, Installation and Conversion
Periods
Prior to installation and during installation, testing and acceptance
periods, NYNEX, its AFFILIATE and/or AFFILIATE's agent shall be provided
installation and technical support SERVICES, DOCUMENTATION and RELATED
DOCUMENTATION as specified below:
1. Twenty-four (24) hours per day, seven (7) days per week, SUPPLIER
shall provide telephonic technical support SERVICES from its Technical
Assistance Center (TAC) utilizing SUPPLIER's technical information for
installation, testing, operation, maintenance, use, and analysis, all
at no charge to NYNEX or its AFFILIATE(S). SUPPLIER shall provide, upon
request, on-site technical personnel during cutover/in-service weekend
(46 hours post cutover/in-service), and for three (3) weeks thereafter
to ensure SYSTEM performance at no charge to NYNEX or its AFFILIATES.
2. SUPPLIER agrees that in the event MATERIAL and/or SOFTWARE does not
perform in accordance with the SPECIFICATIONS or is otherwise
defective, then SUPPLIER will provide on-site technical support, at no
charge to NYNEX or its AFFILIATE.
B. Customer Support Post Acceptance
After Acceptance by NYNEX or its AFFILIATE, SUPPLIER shall provide
on-going, in-service technical support SERVICES and DOCUMENTATION as specified
below:
1. In Warranty
a. SUPPLIER shall make available telephonic Technical Assistance
Center (TAC) SERVICE, twenty-four (24) hours per day, seven
(7) days per week, utilizing SUPPLIER's technical information
for installation, testing, operation, maintenance, use, and
analysis, all at the no charge to NYNEX or its AFFILIATE.
b. In the event of an emergency or service-affecting condition
involving the SYSTEM, SUPPLIER shall provide immediate
technical support and shall work continuously until such
emergency and/or service-affecting condition is remedied.
On-site technical support within twelve (12) hours shall be
provided by SUPPLIER upon request of
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
<PAGE> 33
Contract No. X134094D
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October 16,1996
NYNEX or its AFFILIATE. It is mutually agreed that if on-site
assistance is required to correct a problem or defect under
warranty, such on-site assistance shall be at no charge to
NYNEX or its AFFILIATES.
2. Out of Warranty
a. SUPPLIER shall make available telephonic Technical
Assistance Center (TAC) SERVICE, twenty-four (24) hours per
day, seven (7) days per week, utilizing SUPPLIER's technical
information for installation, testing, operation, maintenance,
use, and analysis, at the rates and charges mutually agreed to
as set forth in Appendix D hereto, entitled CHANGES IN SCOPE.
b. Non-warranty technical support SERVICE charges shall be as
shown in Appendix D hereto, entitled CHANGES IN SCOPE. On site
technical assistance within twelve (12) hours shall be
provided by SUPPLIER upon request by NYNEX or its AFFILIATES
as shown in Appendix A hereto, entitled SCOPE OF WORK.
c. In the event of an emergency or service-affecting condition
involving the SYSTEM, SUPPLIER shall provide immediate
technical support and shall work continuously until such
emergency and/or servicing-affecting condition is remedied. If
the emergency is determined to be a result of a failure or
occurrence not related to the performance of SUPPLIER's
Materials or Software, or not directly related to the work or
actions of the Supplier, then Supplier may, at its option,
charge NYNEX for the on site technical support as set forth in
Appendix D hereto, entitled CHANGES IN SCOPE, including all
pre-approved travel and reasonable and necessary expenses.
NYNEX or its AFFILIATE may call the following telephone number(s) for
emergency technical assistance or TAC Support, or to escalate any problem at any
time interval: 1-888-653-8353. In furtherance of this procedure, SUPPLIER shall
provide NYNEX with an escalation procedure and list within thirty (30) days of
execution of this AGREEMENT by NYNEX and SUPPLIER, that is agreed upon and
satisfactory, as well as keep NYNEX updated as to all changes to such procedure
and list. For additional technical information, NYNEX or its AFFILIATE may
contact SUPPLIER's technical assistance Services on 1-888-653-8353.
In addition to SUPPLIER's obligations under Article 13 hereof, entitled
"WARRANTIES," NYNEX and its AFFILIATES shall be entitled to technical
maintenance and support for a period of twenty (20) years after expiration or
termination of this AGREEMENT.
12.7 ENGINEERING COMPLAINTS The SUPPLIER shall handle all Engineering
Complaints (ECs) submitted by NYNEX in accordance with Bell Communications
Research Generic Requirements, GR-230-CORE, "Generic Requirements for
Engineering Complaints", Issue 1, September 1994 together with such further and
additional requirements set forth in Appendix A hereof, entitled SCOPE OF WORK.
In addition the following requirements shall be adhered to:
Upon receipt of an Engineering Complaint ("EC") identified as a fire or
safety hazard, SUPPLIER agrees to acknowledge receipt of such EC and to respond
within twenty-four (24) hours. This response shall
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
<PAGE> 34
Contract No. X134094D
Page 34 of 77
October 16,1996
include the implementation and execution of the accepted remedy or corrective
action to resolve the stated problem, or the date when the accepted solution
will be completed.
In the event that a NYNEX EC is marked "SERVICE EMERGENCY," then
SUPPLIER agrees to exert effort which goes beyond that which is customarily
provided to resolve the EC. Such effort will be consistent with the level of
effort SUPPLIER will furnish to support NYNEX and its AFFILIATES under the
clauses hereof entitled "REPAIRS AND REPLACEMENT" and "EXTRAORDINARY SUPPORT."
In the event the SUPPLIER anticipates that the solution to the EC will
exceed thirty (30) days, then SUPPLIER shall issue bi-weekly EC Interim Reports
to NYNEX, reporting actions taken and progress made during the reporting period.
In addition, such reports will indicate the date by which SUPPLIER anticipates
that the ongoing EC study will be successfully concluded. This requirement
modifies GR-230-CORE, Section 2.3.2.2.
SUPPLIER shall create and maintain a tracking system that records and
summarizes all events surrounding all ECs submitted by NYNEX. SUPPLIER shall
also provide NYNEX with on-going reports at monthly intervals as to what
manifested the EC, what remedial actions were made by SUPPLIER as a result of
the EC and what was the result of those remedial actions. The overall progress
and performance results shall be reviewed by NYNEX and SUPPLIER to evaluate the
overall quality of the process.
Upon acceptance of SUPPLIER's resolution by NYNEX, SUPPLIER shall
implement necessary changes within thirty (30) days.
SUPPLIER shall be responsible for reimbursement or credit to NYNEX
and/or its AFFILIATE for any mutually agreed to substantiated claim resulting
from an EC, and such agreement shall not be unreasonably withheld or delayed by
either party. Any such claim shall be resolved within thirty (30) days after
resolution of the EC upon which it is based in accordance with Section 10.7
hereof, entitled PERFORMANCE COMPENSATION PAYMENTS.
If NYNEX or its AFFILIATE disagree with SUPPLIER on the implementation
schedule and/or resolution of an EC, NYNEX or its AFFILIATE shall have the right
to escalate the matter for review on the implementation schedule, validity of
the complaint, and/or resolution to higher management in accordance with Article
31 hereof, entitled ALTERNATE DISPUTE RESOLUTION.
NYNEX's point of contact for all EC information and correspondence
shall be:
SUPPLIER Quality Leader
NYNEX
240 East 38th Street, 14th Floor
New York, New York 10016
12.8 CHANGES TO MATERIAL OR SOFTWARE/PRODUCT CHANGE NOTICES ("PCNs")
SUPPLIER shall notify NYNEX in writing of any changes to MATERIAL and/or
SOFTWARE in accordance with Bell Communications Research, GR-209-CORE, "Generic
Requirements for PRODUCT Change Notices", Issue 2, January 1996. In addition the
following provisions shall apply:
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
<PAGE> 35
CONTRACT NO. X134094D
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OCTOBER 16, 1996
SUPPLIER shall propose a schedule for the application of these changes
at all MATERIAL or SOFTWARE locations, which schedule shall be mutually agreed
upon with NYNEX and its AFFILIATE prior to implementation.
If SUPPLIER develops a Method Of Procedure (MOP) for the change, the
MOP shall be provided to NYNEX with the PCN.
Any related Engineering Complaint Number shall be included on the PCN
form.
If NYNEX or its AFFILIATE disagrees with the nature of, or with the
classification which SUPPLIER assigns to, a change in MATERIAL or SOFTWARE,
NYNEX or its AFFILIATES shall have the right to escalate the matter for review,
reclassification, and resolution to higher levels of management in accordance
with the Alternate Dispute Resolution clause of this AGREEMENT.
SUPPLIER shall provide all changed MATERIAL, SOFTWARE, and
DOCUMENTATION for Class A and AC changes for a period of twenty (20) years from
the date of last shipment of the affected MATERIAL or SOFTWARE, at no charge to
NYNEX or its AFFILIATES. Where SUPPLIER installed the MATERIAL or SOFTWARE
subject to the Class A and AC change, SUPPLIER will supply such change MATERIAL,
SOFTWARE, and installation labor without charge. Where NYNEX, its AFFILIATE
and/or AFFILIATE's agent has installed MATERIAL or SOFTWARE, SUPPLIER will
supply such change to MATERIAL and/or SOFTWARE without charge and will reimburse
or credit NYNEX or its AFFILIATE for its labor to implement or execute
corrective action for a change during a period of twenty (20) years from the
date of last shipment of the MATERIAL or SOFTWARE. SUPPLIER shall supply
relevant DOCUMENTATION to NYNEX for all Class A and AC changes.
DOCUMENTATION changes, required to satisfy SUPPLIER's obligations to
provide Class A and AC changes to MATERIAL or SOFTWARE as specified herein,
shall be provided by SUPPLIER at no charge to NYNEX or its AFFILIATES.
For those changes classified as "B" or "D", SUPPLIER shall notify NYNEX
in writing one hundred and twenty (120) days prior to the effective date of such
change to be made in the MATERIAL or SOFTWARE furnished under an order.
For Class B changes, SUPPLIER shall first notify NYNEX of the exact
nature of the change. Details of the proposed implementation procedure for
MATERIAL or SOFTWARE which is being or will be manufactured shall be discussed
with NYNEX or its AFFILIATES within the notification time periods stated in the
first section above. NYNEX or its AFFILIATE shall, at its option, determine if
MATERIAL or SOFTWARE previously shipped shall be replaced or modified. Should
such replacement or modifications be deemed necessary, SUPPLIER shall make
arrangements for the necessary MATERIAL, SOFTWARE, DOCUMENTATION or RELATED
DOCUMENTATION replacement or modification at prices and schedules to be mutually
agreed upon with NYNEX or its AFFILIATES prior to implementation.
In the event that NYNEX does not desire any such change, NYNEX shall
notify SUPPLIER in writing within sixty (60) days from the date of receipt of
notification and SUPPLIER shall not furnish any such changed MATERIAL or
SOFTWARE to NYNEX pursuant to any Orders. NYNEX may extend the sixty (60) day
period if NYNEX is unable to respond within such period.
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
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CONTRACT NO. X134094D
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OCTOBER 16, 1996
SUPPLIER shall notify NYNEX and its AFFILIATES in writing when
implementation of each field change has been completed at all affected
locations.
SUPPLIER shall reimburse NYNEX for all costs incurred by NYNEX due to
insufficient or incorrect instructions and/or DOCUMENTATION provided in
connection with Changes to MATERIAL and/or SOFTWARE hereunder.
All correspondence relating to changes to MATERIAL or SOFTWARE shall be
sent to the following individual or his successor(s) as appointed by NYNEX or
its AFFILIATES:
Jim Henderson, Sourcing Process Leader
NYNEX
240 East 38th St., 14th. Floor
New York, N.Y. 10016
12.9 REPAIRS AND REPLACEMENT Replacement and repaired MATERIAL and
SOFTWARE shall be warranted as set forth in the clause entitled "WARRANTIES."
SUPPLIER acknowledges that this AGREEMENT does not grant SUPPLIER an
exclusive privilege to repair any or all of the MATERIAL or SOFTWARE purchased
and/or licensed hereunder for which NYNEX or its AFFILIATES may require repair.
12.9.A FOA REPAIR AND REPLACEMENT PROCEDURES During the
installation of MATERIAL and SOFTWARE during the FOA Acceptance Periods,
defective MATERIAL or SOFTWARE will be replaced with new MATERIAL or SOFTWARE,
at no charge to NYNEX or its AFFILIATES. SUPPLIER shall ship such new MATERIAL
or SOFTWARE to a location specified by NYNEX or its AFFILIATES within
twenty-four (24) hours of notice to SUPPLIER. For purposes of this AGREEMENT,
"new MATERIAL or SOFTWARE" shall mean MATERIAL or SOFTWARE directly from the
manufacturing assembly line or from SUPPLIER's finished goods inventory,
provided that said MATERIAL has not been previously repaired or reconditioned.
All transportation charges for, and risk of in-transit loss or damage
to, MATERIAL or SOFTWARE returned to SUPPLIER for repair/replacement under this
clause shall be borne by SUPPLIER.
SUPPLIER shall adhere to QPS 82.061, Bell Communications Research
Quality Program Specification, "Repair and Return Operations of
Telecommunications PRODUCTS - General", Issue 2, March 1985, or the most current
issue of Bell Communications Research Quality Program Specification relating
thereto, when repairing MATERIAL and/or SOFTWARE.
NYNEX or its AFFILIATES shall furnish the following information with
MATERIAL returned to SUPPLIER for repair:
(1) NYNEX' or its AFFILIATE's name and complete address;
(2) name(s) and telephone number(s) of NYNEX' or its AFFILIATE's
employee(s) to contact in case of questions about the MATERIAL
or SOFTWARE to be repaired;
(3) reference to NYNEX' order number, if applicable;
(4) ship to address for return of repaired or replacement MATERIAL
or SOFTWARE if different from (1);
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 37
CONTRACT NO. X134094D
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OCTOBER 16, 1996
(5) a complete list of MATERIAL or SOFTWARE returned;
(6) the nature of the defect or failure, if known.
MATERIAL or SOFTWARE repaired by SUPPLIER shall have the repair
completion date stenciled or otherwise identified in a permanent manner at a
readily visible location on the MATERIAL or SOFTWARE to the extent practicable;
otherwise it shall be indicated in documentation accompanying the MATERIAL
and/or SOFTWARE. The repaired MATERIAL and/or SOFTWARE shall be returned with a
tag or other documentation describing the repairs or affirming that the required
repairs have been made.
SUPPLIER shall maintain a record of all No Trouble Founds ("NTFs")
which permits tracking of NTFs to assure that any MATERIAL or SOFTWARE that has
been categorized as an NTF for the third time is not returned to NYNEX of its
AFFILIATES for future deployment. SUPPLIER shall also publish these results in a
monthly summary report and forward such report to Jim Henderson, Sourcing
Process Leader, NYNEX, 240 East 38th. Street, New York, N.Y. 10016 or his
successor(s) as appointed by NYNEX.
SUPPLIER shall provide NYNEX SUPPLIER Quality Management a monthly
report of MATERIAL or SOFTWARE repaired and returned by PRODUCT line and CLEI
code with projected Failure in Time ("FIT") rate of MATERIAL or SOFTWARE.
When requested in the Order, SUPPLIER shall hold replaced parts for
inspection or return to NYNEX at prices and terms to be agreed upon.
12.9.B IN WARRANTY The following provisions define the
obligations of the parties in the event, under normal and proper use, a defect
or non-conformity appears in MATERIAL or SOFTWARE during the applicable warranty
period, as set forth in Article 13 hereof, entitled WARRANTIES.
(1) NYNEX or its AFFILIATE must notify SUPPLIER in writing of the
claimed defect or non-conformity not later than thirty (30)
days after the expiration of the applicable warranty period.
(2) SUPPLIER shall provide written instructions covering return of
MATERIAL or SOFTWARE.
(3) SUPPLIER shall:
a. at NYNEX' or its AFFILIATE's option either repair,
replace or correct the MATERIAL or SOFTWARE without
charge at its manufacturing or repair facility within
five (5) working days. Where defective or
nonconforming MATERIAL or SOFTWARE is readily
returnable, it shall be removed and sent to SUPPLIER
by NYNEX or its AFFILIATE in accordance with
instructions for return of MATERIAL or SOFTWARE
provided by SUPPLIER in (B) (2) above, at SUPPLIER's
expense and SUPPLIER's risk of loss or damage.
Thereafter the provisions set forth in this Section
shall apply and, if repaired or replaced, SUPPLIER
shall return the MATERIAL or SOFTWARE to NYNEX or its
AFFILIATE at a destination designated by NYNEX or its
AFFILIATE at SUPPLIER's expense; or
b. if the MATERIAL or SOFTWARE is not repairable or
replaceable, or is not corrected, at the option of
NYNEX
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 38
Contract No. X134094D
Page 38 of 77
October 16, 1996
or NYNEX' AFFILIATE provide a refund or credit of the
original purchase price of the MATERIAL, or the
license fee and any non-recurring charges for
SOFTWARE, engineering SERVICES charges, and, if
installed by SUPPLIER, also a refund or credit of the
original price for associated installation SERVICES
provided, or if installed by NYNEX the installation
cost and expense of, the defective or non-conforming
MATERIAL or SOFTWARE, and the incremental costs
required to implement and execute corrective action,
including reprocurement. SUPPLIER shall remove the
MATERIAL and SOFTWARE, and shall at its own expense,
restore the premises as nearly to their original
condition as is reasonably possible, unless otherwise
instructed by NYNEX or its AFFILIATES in writing, at
SUPPLIER's expense.
c. Notwithstanding the provisions of (b) above, if the
MATERIAL and SOFTWARE subject to defect or
non-conformity is determined to be repairable but not
readily returnable for repair, SUPPLIER shall, at
NYNEX' option, either repair the MATERIAL or SOFTWARE
at NYNEX' or its AFFILIATE's site without charge, or
remove the MATERIAL or SOFTWARE from NYNEX' or its
AFFILIATE's site and replace and install the
replacement MATERIAL or SOFTWARE at no charge to
NYNEX or its AFFILIATE.
d. If requested, SUPPLIER shall ship to NYNEX or its
AFFILIATE replacement MATERIAL or SOFTWARE within
five (5) days of such request to NYNEX or its
AFFILIATE's designated location. NYNEX or its
AFFILIATE shall return defective MATERIAL or SOFTWARE
within thirty (30) days after receipt of replacement
MATERIAL or SOFTWARE.
12.9.C OUT OF WARRANTY SUPPLIER agrees to provide repair or
replacement SERVICES and replacement parts for all MATERIAL and SOFTWARE ordered
hereunder at the prices in Appendix C hereto, entitled PRICING, for the
effective period of the AGREEMENT and thereafter at SUPPLIER's current list
prices, as long as SUPPLIER is still furnishing such MATERIAL and SOFTWARE; or
repair parts therefor, but in no event for less than the minimum support periods
set forth in the clause hereof entitled "CONTINUING AVAILABILITY OF MAINTENANCE
REPLACEMENT AND REPAIR PARTS."
MATERIAL or to be repaired under this clause will be shipped by NYNEX
or its AFFILIATE to a location designated by SUPPLIER, and unless otherwise
agreed, SUPPLIER shall return ship the repaired or replacement MATERIAL within
five (5) days of receipt of the defective MATERIAL or pursuant to a mutually
agreed upon schedule. If requested by either party, repairs may be made on-site
pursuant to mutually agreed upon schedules. Repaired MATERIAL or SOFTWARE shall
meet established performance specifications.
Notwithstanding the provisions above, if the MATERIAL and SOFTWARE
subject to defect or non-conformity is determined to be repairable but not
readily returnable for repair, SUPPLIER shall either repair the MATERIAL or
SOFTWARE at NYNEX' or its AFFILIATE's site as specified by NYNEX for the on-site
repair SERVICE, or remove the MATERIAL or SOFTWARE from NYNEX's or its
AFFILIATE's site and replace and install the replacement MATERIAL or SOFTWARE at
no charge to NYNEX or its AFFILIATE.
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
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Where defective or non-conforming MATERIAL or SOFTWARE is readily
returnable, it shall be removed and sent to SUPPLIER by NYNEX or its AFFILIATES
in accordance with instructions for return of MATERIAL or SOFTWARE provided by
SUPPLIER, at NYNEX's or its AFFILIATE's expense and NYNEX's or its AFFILIATE's
risk of loss or damage. Thereafter the provisions set forth in section C of this
clause shall apply and, if repaired or replaced, SUPPLIER shall return the
MATERIAL or SOFTWARE to NYNEX or its AFFILIATE at a destination within the
contiguous fortyeight United States at SUPPLIER's expense.
If MATERIAL or SOFTWARE is returned to SUPPLIER for repair as provided
for in this clause, and is determined to be beyond repair, or repair costs are
expected to exceed fifty percent (50%) of the cost of replacement, SUPPLIER
shall so notify NYNEX and/or its AFFILIATES prior to making the repair.
Invoices originated by SUPPLIER for repair SERVICES for MATERIAL or
SOFTWARE out of warranty must be clearly identified as such, and must contain:
(1) a reference to NYNEX' Order for these repair SERVICES;
(2) a description of services rendered by SUPPLIER; and
(3) an itemized listing of parts and labor charges, when repairs
are done on a time and material basis.
If requested by NYNEX, SUPPLIER shall dispose of unrepairable MATERIAL
or SOFTWARE, consistent with sound commercial practices, and remit to NYNEX the
net salvage value, if any.
12.9.D EMERGENCY "OUT OF SERVICE" CONDITIONS So long as
SUPPLIER is providing regular repair service as set forth in (B) and (C) above,
SUPPLIER shall provide emergency replacement service and on-site repairs, in the
event of an emergency out of service condition caused by defective MATERIAL or
SOFTWARE. SUPPLIER will start repairs or ship a new, or functionally equivalent
replacement, within twelve (12) hours or as soon as is reasonably possible after
receipt of verbal notification. If NYNEX or its AFFILIATE is not satisfied with
the emergency replacement service and/or on site repairs, NYNEX or its AFFILIATE
shall have the right to escalate the matter for review and expeditious
resolution to higher levels of management pursuant to the Alternate Dispute
Resolution clause of this AGREEMENT.
12.10 DETAIL ENGINEERING, OFFICE RECORDS (Detail engineering by
SUPPLIER) The SUPPLIER shall provide full detail engineering services, upon
request of NYNEX and/or its AFFILIATES, consisting of writing a detailed
specification, creating and/or updating central office drawings and records,
including the Equipment Inventory Update (("EIU")) form and the ordering of all
materials and equipment needed to complete the job in compliance to NYNEX
requirements, methods, procedures and standards. When detail engineering is
performed by the SUPPLIER, the SUPPLIER shall be responsible for all detail
engineering and agrees to use a NYNEX certified or approved detail engineering
sub-contractor to provide full detail engineering services.
12.11 INSTALLATION BY SUPPLIER SUPPLIER shall provide such installation
services as are identified in Appendix A hereto, entitled SCOPE OF WORK, or as
would be carried out under Article 11.4 of this AGREEMENT, entitled CHANGE
ORDER, and which are consistent with NYNEX's
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
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labor agreements either utilizing its own personnel or a third party supplier,
approved by NYNEX, as a sub-contractor.
12.11.1 During installation, NYNEX and/or its AFFILIATES shall
be given the opportunity to observe, witness and review the tests performed by
SUPPLIER's installation forces, and review all test results and trouble reports
to ensure conformity to SPECIFICATIONS. NYNEX and/or its AFFILIATES shall have
early access to the SYSTEM to perform joint testing with SUPPLIER, as well as
NYNEX' and/or its AFFILIATES' own independent testing of work completed by
SUPPLIER.
During the installation and Acceptance periods, NYNEX and/or its
AFFILIATES shall be provided installation support SERVICES and technical support
SERVICES at no additional charge by SUPPLIER. Installation and technical support
SERVICES provided by SUPPLIER shall be as follows:
1. SUPPLIER shall provide at no charge to NYNEX and/or its
AFFILIATES telephonic Technical Assistance Center (TAC)
SERVICE, which shall be available twenty-four (24) hours per
day, seven (7) days per week; and
2. SUPPLIER shall provide at no charge, as requested by NYNEX
and/or its AFFILIATES, a project manager to represent SUPPLIER
on all matters; and
3. SUPPLIER shall provide, as requested by NYNEX and/or its
AFFILIATES technical personnel during cutover/in-service
weekend (48 hours post cutover/in-service) to ensure SYSTEM
performance, at no charge to NYNEX and its AFFILIATES.
12.11.2 Prior to cutover and field installation, SUPPLIER
shall perform heat and load testing approved by NYNEX and/or its AFFILIATES.
Load testing shall demonstrate to NYNEX and/or its AFFILIATE that the SYSTEM
meets the traffic capacity for which the SYSTEM was specified and to particular
service application engineering specific to the SYSTEM. This traffic carrying
capacity is specified by the Planning Engineer by Originating and Terminating
(O+T), CCS per main station, call attempts, number of main stations, and service
arrangements including non-switch requirements. SUPPLIER shall meet with NYNEX
and/or its AFFILIATE (Early Job Conferences, contact meetings, test and analysis
meetings) to collect all essential information needed and to jointly prepare a
Method of Procedure (MOP). SUPPLIER and NYNEX and/or its AFFILIATE shall plan
all aspects of the job and a sequence of performance to complete the job on
schedule, which is understood and mutually agreeable to both parties. All job
requirements shall be discussed, resolved and approved by NYNEX and/or its
AFFILIATE at these preliminary meetings, including schedules (Ordering,
installation start, in-progress job status, completion, etc.), quality,
technical and performance issues, workmanship, load testing, and acceptance
testing. Heat testing on the job or the waiver of such heat testing due to heat
testing performed during manufacture, or the waiver of such heat testing due to
statistical analysis shall be determined in the Method of Procedure (MOP).
Additionally, prior to service cutover, load testing shall demonstrate to NYNEX
and/or its AFFILIATE that the SYSTEM meets the parameters for which the SYSTEM
was specified, including but not limited to traffic capacity, failure rates,
SYSTEM functionality and performance objectives.
When SUPPLIER completes installation SERVICES hereunder, SUPPLIER shall
provide to NYNEX and/or its AFFILIATES a Notice of Installation
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
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Completion, in writing, which may include electronic transmission or similar
communications.
On a continuing basis SUPPLIER shall provide, at no charge to NYNEX
and/or its AFFILIATES, Installation Alerts and Broadcast Warnings, PRODUCTS
Change Notices, Engineering Change Notices, and documentation for changes to
MATERIAL, SOFTWARE, non-conformance to SPECIFICATION, service affecting items,
acceptance failures, and installation issues. SUPPLIER shall establish and
maintain a list of NYNEX and its AFFILIATES and/or AFFILIATES' agent's personnel
and organizations responsible for each SYSTEM installation and shall promptly
provide Installation Alerts and Broadcast Warnings necessary to support MATERIAL
and SOFTWARE supplied by SUPPLIER during acceptance and thereafter for a period
of twenty (20) years at no charge to NYNEX or its AFFILIATES.
12.12 INSTALLATION BY NYNEX Except for those installation services
which are to be performed by Supplier as identified in Appendix A hereto,
entitled SCOPE OF WORK or as would be performed under Article 11.4 of this
AGREEMENT, entitled CHANGE ORDER, all Installation will be performed by NYNEX or
a certified SUPPLIER contracted by NYNEX.
12.12.1 Prior to installation and during the installation and
Acceptance periods, NYNEX and/or its AFFILIATE shall be provided installation
support SERVICES and technical support SERVICES at no additional charge by
SUPPLIER. Installation and technical support SERVICES and DOCUMENTATION provided
by SUPPLIER shall be as follows:
1. SUPPLIER shall provide, at no charge to NYNEX and/or its
AFFILIATES, telephonic Technical Assistance Center (TAC)
SERVICE, which shall be available twenty-four (24) hours per
day, seven (7) days per week; and
2. SUPPLIER shall provide at no charge, as required by NYNEX
and/or its AFFILIATES, a project manager to represent SUPPLIER
on all matters; and
3. SUPPLIER shall provide, upon request, technical personnel
during cutover/in service including weekends, (48 hours post
cutover/in-service) to ensure SYSTEM performance, at no charge
to NYNEX and/or its AFFILIATES.
4. SUPPLIER shall provide on-site technical support during the
installation and Acceptance periods, to be dispatched within
24 hours of request by NYNEX and/or its AFFILIATES, at no
charge.
5. SUPPLIER shall replace defective MATERIAL and/or SOFTWARE with
new MATERIAL and/or SOFTWARE, as set forth in the clause
hereof entitled "REPAIRS AND REPLACEMENT," which shall be
shipped to the location specified by NYNEX and/or its
AFFILIATE within twenty-four (24) hours of notice to SUPPLIER.
6. SUPPLIER agrees that in the event MATERIAL and/or SOFTWARE
does not perform in accordance with the SPECIFICATION, or is
defective, then SUPPLIER shall provide on-site technical
assistance, at no charge to NYNEX and/or its AFFILIATE.
7. SUPPLIER shall furnish at no charge to NYNEX and/or its
AFFILIATES current, updated relevant and complete
DOCUMENTATION to support NYNEX, its AFFILIATE's and/or agent's
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
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installation, heat testing, load testing, acceptance, turnover,
cutover/in-service, and maintenance.
12.12.2 SUPPLIER shall meet with NYNEX and/or its AFFILIATE
(Early Job Conferences, contact meetings, test and analysis meetings) to collect
all essential information needed and to jointly prepare a Method of Procedure
(MOP). SUPPLIER, NYNEX and/or its AFFILIATE and/or AFFILIATE's agent shall plan
all aspects of the job and a sequence of performance to complete the job on
schedule, which is understood and mutually agreeable to both parties. All job
requirements should be discussed, resolved and approved by NYNEX and/or its
AFFILIATE at these preliminary meetings, including schedules (ordering,
installation start, in-progress job status, completion, etc.), quality,
technical and performance issues, workmanship, load testing, and acceptance
testing. Heat testing on the job or the waiver of such heat testing due to heat
testing performed during manufacture, or the waiver of such heat testing due to
statistical analysis, shall be determined in the MOP. Load testing shall
demonstrate to NYNEX and/or its AFFILIATE that the SYSTEM meets the parameters
for which the SYSTEM was specified, including but not limited to traffic
capacity, failure rates, SYSTEM functionality and performance objectives.
12.13 ACCEPTANCE The SYSTEM(s), PRODUCT, MATERIAL, SOFTWARE and
SERVICES to be furnished or delivered pursuant to Order(s) issued under this
Agreement shall be subject to acceptance as follows:
12.13.1 FIRST OFFICE APPLICATION ("FOA") ACCEPTANCE First
Office Application ("FOA") Acceptance shall occur in two phases, denoted as
Phase I and Phase II. Upon completion of installation of such tracking units, as
constitutes a minimum of two thousand (2000) households passed, NYNEX and/or its
AFFILIATES shall have a sixty (60) day period (FOA Phase I Acceptance Period) to
determine whether or not the System, Product, Material, Software or Service
initially meets the parameters for which the System, Product, Material, Software
or Service was specified including but not limited to traffic carrying capacity,
failure and report rate, functionality, including System functionality,
operational definitions and performance objectives in conformance with
SPECIFICATIONS utilizing SUPPLIER's standard acceptance test procedures and
NYNEX' and/or its AFFILIATE's own independent requirements, standards and
testing procedures. Upon successful completion of such testing, NYNEX and/or its
AFFILIATE will issue a Notice of Initial Acceptance to SUPPLIER; or if the
Product fails Acceptance, a Notice of Defect.
12.13.2 FOA PHASE II ACCEPTANCE Phase II Acceptance shall
commence upon the completion of installation of a sufficient number of tracking
units such that in NYNEX's sole but reasonable judgment the SYSTEM, PRODUCT,
MATERIAL, SOFTWARE or SERVICE is fully operational and loaded with sufficient
traffic in order to determine whether or not the SYSTEM, PRODUCT, MATERIAL,
SOFTWARE or SERVICE operates and functions in a fully compatible mode as a
System, functioning together, performing and interoperating as a fully
integrated and efficient whole with itself and with all other switching,
transport and transmission elements and other facilities and equipment in the
NYNEX network on an uninterrupted and trouble free basis for a continuous sixty
(60) day period (Phase II Acceptance Period), in accordance with the
requirements and specifications incident to this Agreement or any Order(s)
issued pursuant to this Agreement. Upon successful completion of FOA Phase II
Acceptance, NYNEX and/or its Affiliate(s) will issue a Notice of FOA Acceptance
signifying that full and final acceptance of the FOA portion
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
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of the SYSTEM, PRODUCT, MATERIAL, SOFTWARE or SERVICE has occurred; or in the
event the FOA fails acceptance, a Notice of Rejection.
12.13.3 FOA CORRECTIVE ACTION PLAN In the event that the
SUPPLIER's SYSTEM, PRODUCT, MATERIAL, SOFTWARE or SERVICE does not meet the
specifications or requirements established by NYNEX, for Phase I or Phase 11 of
the First Office Application ("FDA"), the SUPPLIER shall respond with a
documented FOA Corrective Action plan. The plan shall address the unacceptable
condition with a root cause analysis of the problem, the proposed solution, the
process modification to prevent reoccurrence, the time frame for the changes,
and the person(s) responsible for SUPPLIER's implementation of the plan.
The FOA Corrective Action plan shall be presented to the NYNEX
Representative for concurrence prior to implementation. Upon completion of the
Corrective Action Plan by Supplier, NYNEX shall reinitiate its Acceptance
procedures and the applicable Acceptance Period shall start anew. In the event
that the SYSTEM, PRODUCT, MATERIAL, SOFTWARE or SERVICE in the First Office
Application ("FOA") fails Phase I or Phase II Acceptance NYNEX may reject, in
whole or in part, the SYSTEM(s), PRODUCT, MATERIAL, SOFTWARE or SERVICE and
without reference, recourse, resort or referral to Alternate Dispute Resolution,
cancel the Agreement without liability or obligation of any type or character to
Supplier and Supplier shall promptly refund any payment which NYNEX may have
made for the rejected System(s), Product(s), Material Software, or Service(s),
and NYNEX may procure through third parties or other sources substitute
functionally similar or comparable System(s), Product(s), Materials, Software or
Service(s) as may be deemed necessary to replace that which has been rejected in
such a manner and under such terms as NYNEX may deem appropriate. Supplier shall
be liable for any excess costs for such reprocurement incurred by NYNEX, as well
as any direct costs associated with the installation and de-installation and
removal of rejected equipment and installation of that being substituted.
Supplier shall also be liable for any other costs associated with the FDA which
NYNEX may substantiate; provided that any such claims for compensatory or
consequential damages shall be subject to those terms as specified in Articles
21 and 26 of this Agreement as they apply.
12.13.4 GENERALLY AVAILABLE PRODUCT ACCEPTANCE Upon successful
completion of FOA Phase I and Phase II Acceptance, SUPPLIER shall furnish,
deliver and, if required, install SYSTEM(s), PRODUCT, MATERIAL, SOFTWARE and
SERVICE ordered by NYNEX on a generally available basis and NYNEX or its
Affiliate(s) shall have the following rights in acceptance.
Upon completion of the installation for each component initially built
for each tracking unit, NYNEX and/or its AFFILIATES shall test and determine
readiness for turnover i.e., accept for service. This routine procedure will be
normally conducted as part of the acceptance procedure to determine whether or
not the SYSTEM, PRODUCT, MATERIAL, SOFTWARE or SERVICE meets the parameters for
which the SYSTEMS, PRODUCT, MATERIAL, SOFTWARE or SERVICE was specified,
including but not limited to the traffic carrying capacity, functionality,
including System functionality, and performance objectives in conformance with
SPECIFICATIONS utilizing SUPPLIER's standard acceptance test, standards and
procedures and NYNEX and/or its AFFILIATES' own independent requirements,
standards and testing procedures. Upon successful completion of such tests,
NYNEX and/or its AFFILIATES shall issue a Notice of GA Acceptance; or if the
Product fails acceptance, a Notice of Defect. In the event a Notice of Defect
has been issued by NYNEX and/or its AFFILIATES, SUPPLIER shall start to correct
defects within twenty-
NOTICE: Not for use/disclosure outside NYNEX except by written agreement
<PAGE> 44
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four (24) hours of such Notice, and as set forth in Section 12.9 hereof,
entitled "REPAIRS AND REPLACEMENT." Upon completion of such corrective actions
by SUPPLIER, NYNEX and/or its AFFILIATES shall retest the MATERIAL and/or
SOFTWARE ("Retest Period") for turnover i.e., accept for service. SUPPLIER shall
be responsible to make payments under Section 10.7 hereof, entitled PERFORMANCE
COMPENSATION PAYMENTS from the date of initial Acceptance failure until the
failure is cured to NYNEX's satisfaction.
12.13.5 GA CORRECTIVE ACTION PLAN If during the Retest Period,
the SUPPLIER's SYSTEM, PRODUCT, MATERIAL, SOFTWARE or SERVICE does not meet the
specifications or expectations established by NYNEX, or otherwise fails
acceptance, the SUPPLIER shall respond with a documented GA Corrective Action
plan established by NYNEX and Supplier jointly. The plan which shall be mutually
agreed upon shall address the unacceptable condition with a root cause analysis
of the problem, the proposed solution, the process modification to prevent
reoccurrence, the time frame for the changes, and the person(s) responsible for
SUPPLIER's implementation of the plan.
The Corrective Action plan shall be presented to the NYNEX
Representative for concurrence prior to implementation. Upon completion of the
Corrective Action Plan by Supplier, NYNEX shall re-initiate its Acceptance
procedures and the applicable Acceptance Period shall start anew. In the event
that the SYSTEM, PRODUCT, MATERIAL, SOFTWARE or SERVICE again fails Acceptance,
NYNEX shall have the right to declare a breach and proceed in accordance with
Article 21 hereof, entitled DEFAULT.
12.14 INFORMATION KEPT CURRENT On a continuing basis SUPPLIER shall
provide, at no charge to NYNEX and/or its AFFILIATES, Installation Alerts and
Broadcast Warnings, PRODUCT Change Notices, Engineering Change Notices, and
documentation for changes to MATERIAL, SOFTWARE, non-conformance to
SPECIFICATION, service affecting items, acceptance failures, and installation
issues. SUPPLIER shall establish and maintain a list of NYNEX' and/or its
AFFILIATES and/or AFFILIATE's agent's personnel and organizations responsible
for each SYSTEM installation and shall promptly provide Installation Alerts and
Broadcast Warnings necessary to support MATERIAL and SOFTWARE supplied by
SUPPLIER during the Acceptance Period and thereafter for a period of twenty (20)
years at no charge to NYNEX and/or its AFFILIATES.
For each Order placed, SUPPLIER shall be accountable to NYNEX and/or
its AFFILIATES to advise them of the shipping and delivery status of each Order
placed, to maintain shipping intervals, and to provide repairs and replacement
for MATERIAL and/or SOFTWARE, as set forth in this AGREEMENT. If NYNEX and/or
its AFFILIATE is not satisfied with such shipping and delivery status and/or
on-site repairs, NYNEX and/or its AFFILIATE shall have the right to escalate the
matter for review and expeditious resolution to higher levels of management in
accordance with the Alternate Dispute Resolution provision of this AGREEMENT.
12.15 CONTINUOUS IMPROVEMENT PLAN [SOFTWARE Quality Improvement Plan
("SQIP")] SUPPLIER shall have a documented plan for continuously assessing and
improving the price, quality and reliability of MATERIAL and SOFTWARE used in
network applications. SUPPLIER's SOFTWARE Quality Improvement Plan (SQIP) shall
incorporate a well defined set of metrics, acceptable to NYNEX, that will assess
internal development data and field performance data in order to improve
SUPPLIER's on-line performance for PRODUCTS deployed in NYNEX.
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
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SUPPLIER's Quality Improvement Plan (SQIP) should include the use of a
documented set of metrics. Metric collection, analysis and reporting should be
conducted on a continual basis. Both field performance and in-process data shall
be utilized.
All information in SUPPLIER's SQIP shall be made available for
semi-annual review by NYNEX. This includes, but is not limited to, plans,
procedures and results.
ARTICLE 13
WARRANTIES
WARRANTIES SUPPLIER represents, warrants and agrees that it has the
full and entire responsibility, duty and obligation to provide the SYSTEM,
PRODUCTS, MATERIAL, SERVICES AND SOFTWARE and perform, deliver and manage the
Services, ancillary services, facilities, equipment and personnel optimally
useful to perform the Work set forth in this Agreement or any Order(s) issued by
NYNEX and accepted by SUPPLIER pursuant to this Agreement, including, without
limitation, the responsibility, duty and obligation to ensure the full,
adequate, complete and timely performance of SUPPLIER's other subcontractors,
agents and independent contractors of whatever tier, type or character.
13.1 WARRANTY OF TITLE SUPPLIER warrants that it shall have, as of the
date of each Order, and as of the ACCEPTANCE DATE of each PRODUCT thereunder,
and throughout any applicable license term thereunder, including any renewals or
extensions thereof, free and clear title to, and the right to possess, use,
sell, transfer, assign, license, or sub license, any and all SYSTEM(S), MATERIAL
and SOFTWARE PRODUCTS that are sold, licensed or otherwise provided to NYNEX by
SUPPLIER pursuant to such Order. SUPPLIER shall not create or permit the
creation of any lien, encumbrance, or security interest in any PRODUCT licensed
to NYNEX, or sold to NYNEX and for which title has not yet passed to NYNEX,
without the prior written consent of NYNEX. Title to any PRODUCT licensed by
NYNEX hereunder shall remain with SUPPLIER through the applicable license term,
unless otherwise specified in this Agreement or related Order(s). For all
PRODUCTS after the FOA Acceptance Periods, title to and risk of loss for any
PRODUCT purchased by NYNEX hereunder shall pass to NYNEX, in accordance with
Article 9 of this AGREEMENT, entitled TITLE AND RISK OF LOSS. Passing title to
any PRODUCT shall not constitute acceptance on the part of NYNEX.
13.2 BASIC WARRANTY SUPPLIER represents and warrants that all SYSTEMS,
PRODUCTS, MATERIAL, SOFTWARE and components will be free from defects in
material or workmanship and will conform to, comply, function and perform in
accordance with the requirements and specifications stated in the RFP, RRP or
addenda thereto and as stated in Article 13.7 of this AGREEMENT as modified by
Appendix A hereto, entitled SCOPE OF WORK, the applicable Proposal, this
Agreement and all Order(s), associated appendices or other attachments incident
to the Order(s), and that SUPPLIER will make all necessary adjustments, repairs
and replacements to maintain all SYSTEMS, PRODUCTS, MATERIAL, SOFTWARE and
Components in such condition during the term of the applicable warranty, in
accordance with the terms and conditions hereof. SUPPLIER further warrants that
each of the SYSTEMS, PRODUCTS, MATERIAL, SOFTWARE and Components furnished under
this Agreement will perform such general and specific operations and have such
general and specific characteristics as described and claimed for them in any of
SUPPLIER's published literature, descriptions and specifications whether or not
such
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
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literature, descriptions and specifications are included in or referenced by an
Order or this Agreement.
13.3 SYSTEM COMPATIBILITY WARRANTY Unless the applicable Order
specifically indicates otherwise, SUPPLIER warrants that all PRODUCTS acquired
pursuant to such Order and to any related Order shall operate and function in a
fully compatible mode as a System, functioning together, performing and
interoperating as a fully integrated and efficient whole with itself and with
all other switching, transport and transmission elements and other facilities
and equipment in the NYNEX network in accordance with the requirements and
specifications incident to this Agreement or any Order(s) issued pursuant to
this Agreement which meet the interface standards and requirements specifically
referenced by NYNEX and provided to Supplier as a requirement and/or those
standards which are contained in industry publications by recognized standards
bodies. SUPPLIER will review each NYNEX Order for completeness and accuracy with
respect to components, materials and part numbers and, prior to submitting the
Order to a sub-contractor, will notify NYNEX as to any inaccuracies or know
deficiencies or incompatibility with any related Order.
13.4 CONFIGURATION WARRANTY Unless the applicable Order specifically
indicates otherwise, SUPPLIER warrants that the PRODUCT list for such Order for
a SYSTEM hereunder, or for such Order for a component that includes one (1) or
more separately listed PRODUCTS, shall be deemed to include, at no additional
cost to NYNEX, any and all parts, items, and other PRODUCTS necessary for the
respective SYSTEM or Component to operate according to the standards and
SPECIFICATIONS set forth and referenced in this Agreement and the applicable
Order, regardless of whether such parts, items, or other PRODUCTS are specified
or listed in the applicable Order.
13.5 ADDITIONAL COMMITMENTS AND WARRANTIES Any written commitment by
SUPPLIER under the terms of any Order or of this Agreement shall be binding upon
SUPPLIER whether or not incorporated into said Order or this Agreement. For
purposes of this Agreement, a commitment by SUPPLIER shall include: (i) prices
and options committed by SUPPLIER or its agent to remain in force during the
term of this Agreement; (ii) any warranty or representation made by SUPPLIER or
its agent in a written proposal to NYNEX as to PRODUCT performance, total
System's performance, or any other physical, design, or functional
characteristics of any Equipment, SOFTWARE, SYSTEM, or other PRODUCT; (iii) any
warranty or representation made by SUPPLIER or its agent concerning the
characteristics or items described in above, made in any literature,
descriptions, drawings or specifications accompanying or referred to in a
proposal or presentation to NYNEX; and (iv) any modification of or affirmation
or representation as to any of the above which is made by SUPPLIER or its agent
in the course of negotiations or during the term of this Agreement whether or
not incorporated into a formal amendment to the proposal; and (v) any
representation by SUPPLIER or its agent in a written proposal, in supporting
documents or in negotiations subsequent thereto as to training to be provided,
services to be performed, prices and options committed to remain in force over a
fixed period of time, or any other similar matter regardless of the fact that
the duration of such commitment may exceed the duration of this Agreement. All
warranties shall survive inspection, acceptance and payment.
13.6 GOODWILL WARRANTY For the term of the contract, Supplier will
provide NYNEX a limited warranty beyond the standard [ * ] covering
the environmental integrity of the BNU
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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enclosures pertaining to specific damage, wear, or degradation resulting from
natural causes and under normal use, defined as NYNEX's performance and
conformance to the routing maintenance and operations practices and procedures
contained in SUPPLIER Documentation timely provided to and accepted by NYNEX.
During the extended warranty period, SUPPLIER shall either replace, provide
replacement parts, or make repairs to affected materials at their option and at
their expense. Extended warranty is limited to:
1. Corrosion on or in the BNU assembly.
2. Rust or corrosion on hinges, latches, cable feeds, and mounting
brackets connected to the BNU assembly.
3. Excessive wear or breakage of door hinges, mounting brackets
connected to the BNU assembly.
4. Cracks, fractures, or metal fatigue causing loss of integrity to the
BNU casting and doors.
During the project period, SUPPLIER will track and monitor failures and
defects of BNU's reported by NYNEX through customer support. In the event that
records indicate a significant increase in failures or notification of repeated
defect or failures of a specific nature exceeding the norm, SUPPLIER will
cooperate with NYNEX to determine the cause of the problem and implement
mutually agreed upon fixes including repairs, modifications, or replacements
which are mutually agreed upon.
13.7 WARRANTY PERIOD
a) The warranty period for System(s), Product, Material(s),
Software or Services furnished for, or during, the First
Office Application ("FOA") shall begin on the day following
the issuance by NYNEX of the Notice of Final Acceptance of the
FOA and shall continue for a minimum period of [ * ].
b) Once the FOA has passed Phase I and Phase II Acceptance and in
order to facilitate the tracking and administration of the
warranty for record keeping purposes, the warranty period on
all subsequently furnished System(s), Product, material,
Software or Service shall begin upon shipment of the
System(s), Product, Material, Software or Service and shall
continue thereafter for a minimum period of [ * ] provided,
however, the parties agree that the initiation of and coverage
by the warranty is entirely independent of acceptance,
including NYNEX's rights and remedies in acceptance, and is
not intended to nor shall it be construed as in any way
precluding, limiting or otherwise affecting NYNEX's acceptance
rights which shall be and remain as set forth in Section 12.13
hereof, entitled ACCEPTANCE.
c) In all instances where the repair or replacement of System(s),
Product, Material, Software is not completed within [ * ] of
Supplier's receipt of notification of the defect, the warranty
period shall be extended for a period equivalent to the time
required by Supplier to complete the repair or replacement.
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 48
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13.8. SOFTWARE
(A) In addition to the foregoing Sections 13.1 through 13.5 and 13.7,
SUPPLIER warrants to NYNEX and its AFFILIATES that it has the right
to grant the licenses for SOFTWARE ordered hereunder, and that
SOFTWARE ordered under this AGREEMENT shall properly function in the
SYSTEM environment, and shall conform, function and perform in
accordance with all of SUPPLIER's published software specifications
and with the SPECIFICATIONS set forth in Appendix A hereof, entitled
SCOPE OF WORK including all subsequent changes and modifications
thereto, in all respects, including, but not limited to, operating
performance, memory requirements, response and run times and timing
characteristics, documentation, compatibility, and modularity.
(B) The warranty shall apply to all software releases, upgrades,
enhancements, fixes, modifications and the like as well as third
party software and SUPPLIER's firmware.
(C) In the event the SOFTWARE fails to perform as described in
Subsection (A) of this Section 13.8, SUPPLIER shall promptly correct
or replace the SOFTWARE.
(D) The transportation expense associated with returning SOFTWARE to and
from SUPPLIER shall be borne by SUPPLIER.
(E) SUPPLIER shall notify NYNEX and its AFFILIATES of defects in
SUPPLIER's SOFTWARE of which SUPPLIER becomes aware and SUPPLIER
shall immediately initiate corrective actions and make its best
commercial efforts to correct all defects. Where the defect is
service affecting the warranty period shall be temporarily suspended
during the period needed to correct the defect and upon correction
shall restart for the remaining warranty period or [ * ] whichever
is greater.
(F) SOFTWARE Release Warranty. SUPPLIER hereby represents and warrants
to NYNEX that, for a period of [ * ] following the ACCEPTANCE DATE
for such any SYSTEM: (i) No release by SUPPLIER of any operating
SOFTWARE for any SYSTEM purchased by or provided to NYNEX pursuant
to this Agreement shall eliminate, reduce, or degrade the
performance capabilities of the SYSTEM from the corresponding level
of performance at the ACCEPTANCE DATE for the SYSTEM; and (ii)
Applications SOFTWARE will function on such SYSTEM purchased by or
otherwise provided to NYNEX pursuant to this Agreement, unless
specifically noted in the appropriate Order; (iii) SUPPLIER shall
maintain the previous two (2) release levels of any SOFTWARE, or all
levels released over the previous [ * ], whichever is longer.
(G) SUPPLIER also shall perform a Post Mortem analysis after each major
SOFTWARE release. Such analysis should determine which development
stage activities were accomplished smoothly and which activities
contributed to problems that effected quality or scheduling. Results
of the analysis should yield documented process improvement plans
which will be implemented before development of the next release
begins.
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 49
I
Contract No. X134094D
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(H) Year 2000 - Representation and Warranty (SOFTWARE) SUPPLIER
represents and warrants that all SOFTWARE Deliverables delivered
hereunder shall record, store, process, and present calendar dates
falling on or after January 1, 2000, in the same manner, and with
the same functionality, as such SOFTWARE record, store, process and
present calendar dates falling on or before December 31, 1999.
SUPPLIER further represents and warrants that in all other respects
such SOFTWARE shall not in any way lose functionality or degrade in
performance as a consequence of such SOFTWARE operating at a date
later than December 31, 1999. Without limitation of the foregoing,
SUPPLIER's representative will consult with NYNEX' or AFFILIATE's
designated representative for century date change requirements, to
ensure that such SOFTWARE Deliverables will lose no functionality
with respect to the introduction of records containing dates falling
on or after January 1, 2000, and to use its best efforts to ensure
that such SOFTWARE Deliverable will be interoperable with other
SOFTWARE used by NYNEX or AFFILIATE which may deliver records to
such SOFTWARE Deliverable, receive records from such SOFTWARE
Deliverable, or interact with such SOFTWARE Deliverable in the
course of processing data.
(SYSTEMS) SUPPLIER represents and warrants that all SYSTEMS
delivered hereunder will record, store, process, and present
calendar dates falling on or after January 1, 2000, and with the
same functionality, as such SYSTEMS record, store, process and
present calendar dates falling on or before December 31, 1999.
SUPPLIER further represents and warrants that in all other respects
such SYSTEMS shall not in any way lose functionality or degrade in
performance as a consequence of such SYSTEMS operating at a date
later than December 31, 1999. Without limitation of the foregoing,
SUPPLIER's representative will consult with NYNEX' or AFFILIATE's
designated representative for century date change requirements, to
ensure that such SYSTEMS will lose no functionality nor will they
degrade in performance with respect to the introduction of records
containing dates falling on or after January 1, 2000, and to use its
best efforts to ensure that such SYSTEMS will be interoperable with
other SYSTEMS used by NYNEX or its AFFILIATE which may deliver
records to such SYSTEMS, receive records from such SYSTEMS, or
interact with such SYSTEMS, in the course of processing data.
Notwithstanding the foregoing, Supplier shall have no responsibility
for any loss of functionality or degradation or failure to record,
store, process or present calendar dates falling on or after January
1, 2000 caused by the failure to so perform of any software or
systems, other than Supplier's, used by NYNEX or any of its
Affiliates or any other supplier.
13.9 ESCROW In order to protect the rights of NYNEX, SUPPLIER shall keep
and maintain current a copy of the SOURCE CODE and Related Documentation for any
SOFTWARE licensed by SUPPLIER to NYNEX in escrow with a commercial escrow agent
selected by NYNEX, pursuant to an escrow agreement by and among SUPPLIER, NYNEX,
and such agent. Such escrow agreement shall authorize the escrow agent to
release such SOURCE CODE
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 50
Contract No. X134094D
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and Related Documentation to NYNEX if and when NYNEX shall have a right thereto
pursuant to this Agreement or if SUPPLIER fails to maintain the escrow as agreed
herein.
The Source Code Escrow agreement shall include, but not be limited to,
conditions defined as "Escrow Release Events" upon which source code shall be
released to NYNEX, temporarily or permanently if one or more of, the following
events occur:
a. permanently, if SUPPLIER becomes insolvent or admits insolvency or admits
a general inability to pay debts as they become due;
b. permanently, if SUPPLIER files a petition for protection under the
Bankruptcy code of the United States, or an involuntary petition is filed
against the SUPPLIER and is not dismissed within sixty (60) days;
c. permanently, if control of SUPPLIER is acquired by a competitor of NYNEX
and it is determined by NYNEX that there is a threat to its interest or
inadequate safeguards exist resulting from the transfer of control;
d. temporarily, if SUPPLIER fails to provide technical support during any
emergency or out-of-service condition. NYNEX shall only use source code
released during this event for the purpose of placing the SYSTEM back into
operation.
[ * ] shall pay all costs of providing and maintaining the SOURCE CODE in
escrow, including the fees of the escrow agent. NYNEX shall have the right at
any time to verify that the copy of the SOURCE CODE placed in escrow shall be
reproduced and maintained on machine readable media compatible with SUPPLIER's
Equipment and shall be accompanied by full documentation thereof. When a change
is made to the SOURCE CODE by or on behalf of SUPPLIER during the term of the
escrow agreement, the revised SOURCE CODE, including the change, shall be
delivered to the escrow agent not later than [ * ] business days after the
change is affected by or on behalf of SUPPLIER. Copies of the revised SOURCE
CODE and the SOURCE CODE prior to the then-latest revision shall be maintained
in escrow as provided hereunder.
13.10 ILLICIT CODE SUPPLIER warrants (a) unless authorized in writing by
NYNEX or (b) necessary to perform valid duties under this Agreement, any
SOFTWARE provided to NYNEX by SUPPLIER for use by SUPPLIER or NYNEX shall: (a)
contain no hidden files; (b) not replicate, transmit, or activate itself without
control of a person operating computing equipment on which it resides; (c) not
alter, damage, or erase any data or computer programs without control of a
person operating the computing equipment on which it resides; (d) contain no
encrypted imbedded key unknown to NYNEX, node lock, time-out or other function,
whether implemented by electronic, mechanical or other means, which restricts or
may restrict use or access to any programs or data developed under this
Agreement, based on residency on a specific hardware configuration, frequency of
duration of use, or other limiting criteria ("Illicit Code") except, and to the
extent, required by NYNEX as set forth in "Revised Section 14 Document". Should
any program have any of the foregoing attributes, and notwithstanding anything
elsewhere in this Agreement to the contrary, SUPPLIER shall be in default of
this Agreement, and no cure period shall apply. In addition to any other
remedies available to it under this Agreement, NYNEX reserves the right to
pursue any civil and/or criminal penalties available to it against the SUPPLIER.
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
<PAGE> 51
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13.11 SERVICES SUPPLIER warrants to NYNEX and NYNEX AFFILIATES that
SERVICES provided hereunder shall be expertly performed in a manner which meets
or exceeds the highest prevailing standards in the industry, and in accordance
with applicable SPECIFICATIONS. All warranties shall survive inspection,
acceptance and payment.
13.12 EMPLOYEES AND SUBCONTRACTORS BOUND Supplier represents that it has
and will maintain an appropriate agreement(s) with its employees, or (without
altering the restrictions against subcontracting set forth elsewhere in this
Agreement) others whose services Supplier may require, sufficient to enable it
to comply with all provisions of this Agreement, including, without limitation,
the provisions relating to intellectual property. Upon request by NYNEX,
Supplier shall make such agreements available for inspection by NYNEX. Supplier
shall be in all aspects liable for any acts or omissions of its employees and
subcontractors as well as any breaches of this Agreement arising from such acts
or omissions.
13.13 DISCLOSURE SUPPLIER represents that it has made its best efforts to
disclose, and will continue to disclose, any issue, element, factor, cause of
action, claim or event incident to its Proposal and the technology upon which
the Proposal is based, which if disclosed would be likely to have a significant
adverse impact upon NYNEX's decision to accept such Proposal or the technology
upon which the Proposal is based.
ARTICLE 14
COMPLIANCE WITH FEDERAL RULES
14.1 RADIO FREQUENCY ENERGY STANDARDS MATERIAL furnished hereunder shall,
at time of shipment, comply to the extent applicable with the requirements of
Subpart J of Part 15 of the Federal Communications Commission's Rules and
Regulations, as they may be amended from time to time, including those Sections
concerning the labeling of such MATERIAL and the suppression of radio frequency
and electro-magnetic radiation to the specified levels. Should the MATERIAL
during use fail to meet relevant parts of the FCC Rules and Regulations for
spurious emission and interference to radio communications, SUPPLIER shall
provide to NYNEX information relating to methods of suppressing such
interference. In the event such interference cannot reasonably be suppressed,
then all remedies as provided by the clause entitled "WARRANTIES" shall apply.
14.2 REGISTRATION When MATERIAL furnished under this AGREEMENT is subject
to registration under Part 68 of the Federal Communications Commission's Rules
and Regulations as they may be amended from time to time ("Part 68"), SUPPLIER
warrants that such MATERIAL furnished under this AGREEMENT is registered under
and complies with Part 68 including, but not limited to, all labeling and
customer instruction requirements unless such MATERIAL is furnished as part of a
technical field trial or unless the MATERIAL is provided for services not
covered or exempt under Part 68. SUPPLIER agrees to defend and hold NYNEX and
its AFFILIATES harmless from any liability, claim or demand (including the
costs, expenses and reasonable attorney's fees on account thereof) that may
arise out of SUPPLIER's non-compliance with Part 68. NYNEX agrees to promptly
notify SUPPLIER of any liability, claim or demand against NYNEX or its
AFFILIATES for which SUPPLIER is responsible under this clause and gives
SUPPLIER full opportunity and authority to assume the defense, including
appeals, and to settle such liability, claims and demands,
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
<PAGE> 52
Contract No. X134094D
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provided that if NYNEX reasonably believes that SUPPLIER is not adequately
handling such defense or settlement, NYNEX reserves the right to assume the
defense or settlement.
ARTICLE 15
CONTINUING AVAILABILITY
SUPPLIER agrees to offer for sale functionally equivalent or superior
maintenance, support, replacement and repair parts for MATERIAL ordered pursuant
to this AGREEMENT for [ * ] commencing from SUPPLIER's last shipment
of such MATERIAL to NYNEX or its AFFILIATES. In addition to SUPPLIER's
obligation to offer MATERIAL support for [ * ] from SUPPLIER's last shipment of
MATERIAL, SUPPLIER agrees to provide SOFTWARE support for maintenance,
replacement or updates for [ * ] from SUPPLIER's last shipment of SOFTWARE
listed in Appendix B hereof, as applicable. SUPPLIER agrees to support MATERIALS
and/or SOFTWARE for [ * ] from SUPPLIER's last shipment. Under this Paragraph,
SUPPLIER shall also give NYNEX [ * ] prior written notice of the discontinuance
of the sale of maintenance, replacement and repair parts for MATERIAL. Charges
for support SERVICES provided pursuant to this paragraph shall be mutually
agreed upon at time of discontinuance notice.
When SUPPLIER has given NYNEX such discontinuance notice, or if for any
other reason SUPPLIER is unable to provide such MATERIAL, or SOFTWARE, SUPPLIER
shall, if requested by NYNEX, endeavor to arrange for a third party to continue
to furnish the discontinued maintenance, replacement and repair parts to NYNEX.
In the event SUPPLIER is not requested or, if requested, is unable to find a
third party to furnish such parts to NYNEX, SUPPLIER shall, upon request by
NYNEX, to the extent SUPPLIER has such rights, provide NYNEX with existing
technical information and rights, including SOURCE CODE and documentation, at no
additional charge, sufficient for NYNEX to manufacture, or have manufactured,
the discontinued parts. In no event shall the provision of such rights and
technical information to a third party or to NYNEX be delayed beyond six (6)
months after SUPPLIER's date of notice of discontinuance.
SUPPLIER shall protect against the loss or damage of the existing
technical information required for the manufacture of the discontinued parts
with the same degree of care that SUPPLIER uses to protect its own valuable
technical information. In addition, SUPPLIER shall advise NYNEX in writing at
least six (6) months in advance of its decision to discontinue maintenance of
any technical information, so that NYNEX may acquire such technical information
in accordance with the provisions of this clause.
The technical information includes, by example and not by way of
limitation: (a) manufacturing drawings and specifications of raw materials and
components comprising such parts; (b) manufacturing drawings and specifications
covering special tooling and the operation thereof; and (c) a detailed list of
all commercially available parts and components purchased by the SUPPLIER on the
open market disclosing the part number, name, and location of the SUPPLIER and
price lists for the purchase thereof, including SOURCE CODE and documentation.
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 53
Contract No. X134094D
October 16, 1996 Page 53 of 77
ARTICLE 16
EXTRAORDINARY SUPPORT
In addition to the provisions for repair or replacement or MATERIAL and/or
SOFTWARE set forth in Article 13 hereof, entitled "WARRANTIES" and Section 12.9
hereof, entitled "REPAIRS AND REPLACEMENT," SUPPLIER agrees, in any event, if
any natural or other disaster or emergency causes an out of service condition,
SUPPLIER shall use extraordinary effort to locate or provide (i.e. procure or
manufacture) and ship to NYNEX replacement MATERIAL or SOFTWARE, and make
available necessary manpower within twenty four (24) hours of verbal
notification by NYNEX or its AFFILIATES.
Such emergency support shall be available twenty four (24) hours a day,
seven (7) days a week during the term of this Agreement and for a period of
twenty (20) years after the expiration of this Agreement.
Charges for replacement MATERIAL, SOFTWARE, AND SERVICES shall be at the
prices contained in Appendix C hereof, entitled PRICING, or Appendix D hereof,
entitled CHANGES IN SCOPE, as applicable, for the term of this Agreement. This
clause shall not be construed to required SUPPLIER to maintain any inventories
whatsoever nor maintain any position of readiness to perform in the future nor
require breach of SUPPLIER's contractual obligations to third parties.
ARTICLE 17
WORKAROUND
In the event SUPPLIER fails to furnish any SYSTEM, PRODUCT, MATERIAL,
SOFTWARE or SERVICES, or any combination thereof, that conform to approved
SPECIFICATIONS by the agreed upon original delivery date, or an amended delivery
or completion date, for reasons other than FORCE MAJEURE, or delays caused
solely, directly and independently of all other causes by NYNEX or its
AFFILIATES' failure to meet their obligations to SUPPLIER, and NYNEX determines
that SUPPLIER's failure to meet its obligations will cause NYNEX or its
AFFILIATES to incur additional costs to meet commitments to their customers,
then NYNEX may notify SUPPLIER in writing, in accordance with Section 30.10
hereof, that a WORKAROUND condition exists. SUPPLIER shall then be granted a
cure period as set forth in Section 10.8 hereof, entitled Performance
Compensation Cure Period. In the event that the failure is not remedied to
NYNEX's reasonable satisfaction prior to the expiration of the cure period,
NYNEX may invoke SUPPLIER's liability under Section 10.7 hereof, entitled
PERFORMANCE COMPENSATION PAYMENTS.
In addition, SUPPLIER and NYNEX shall promptly participate in the joint
preparation of a WORKAROUND plan to resolve the problem. NYNEX, however, shall
have final approval of the WORKAROUND plan to be performed.
ARTICLE 18
SUPPLIER COMPREHENSIVE RESPONSIBILITIES FOR OVERALL PERFORMANCE
18.1 Supplier represents, warrants and agrees that it has the full and
final responsibility, duty and obligation to provide, perform, deliver and
install, to the extent set forth in Appendix A hereof, entitled SCOPE OF WORK,
the System, Products, Material, Software and
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
<PAGE> 54
Contract No. X134094D
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Services as well as any ancillary services, facilities, and equipment, set forth
any Order(s) issued by NYNEX and accepted by Supplier pursuant to this Agreement
and further Supplier agrees and acknowledges:
(i) that it recognizes that the System(s), Products, Material, Software
or Services which are to be provided under this Agreement are vital
to NYNEX and must be delivered and installed without interruption,
delay, cessation or limitation and in full compliance with the
scheduled developmental dates, specifications and requirements set
forth in the Order(s) and this Agreement; and that in the event of
any conflict or contention of whatever type or character between a
NYNEX or its Affiliate's Order(s) within the commitment schedule of
agreed upon forecast for SYSTEM, PRODUCT, MATERIAL, SOFTWARE or
SERVICES and any order by a third party, Supplier shall satisfy and
fulfill, and shall take any lawful action necessary, to satisfy and
fulfill, the NYNEX or its Affiliate's Order(s) before it satisfies
such third party Order(s).
(ii) that Supplier has and will maintain an organization staffed by
optimally useful number(s) of qualified personnel, including "key
personnel", with the knowledge, skill and resources optimally useful
to perform and complete the work and that there are and will be, no
impediments to, or commitments legal, contractual or otherwise which
impede SUPPLIER's timely performance and completion of the work or
its capacity or capability to do so;
(iii) that should Supplier fail in its performance beyond the cures and
remedies in this Agreement, the cost, and expense required to
reprocure the System(s), and the time lost and the revenues income
and profit jeopardized could be substantial and material;
(iv) that any such failure in [ * ] under this Agreement may under the
circumstances set forth in this Agreement constitute a Default by
Supplier and give rise to an obligation to pay money damages and
such other and additional relief or remedy as may be set forth in
this Agreement or permitted at law or in equity, should any of the
foregoing events occur.
ARTICLE 19
REPORT RATE
Supplier, as and for an inducement to NYNEX to enter into this Agreement,
agrees i) that in the event of any failure to achieve or maintain a [ * ] in
accordance with, or otherwise fails to comply or perform in accordance with, the
requirements set forth in Appendix B hereof, entitled PROJECT MANAGEMENT the
amounts set forth therein constitute a fair and reasonable determination of the
actual damages NYNEX would sustain as a result of a Supplier breach or default
under this Article; and ii) that Supplier shall, as Principal therein,
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 55
Contract No. X134094D
October 16, 1996 Page 55 of 77
[ * ] of such damages, together with such other and additional damages set forth
in Article 26 hereof, entitled INTELLECTUAL PROPERTY - GENERAL OBLIGATIONS,
including without limitation those set forth in Section 26.1(D).
NYNEX shall be entitled to damages pursuant to this Article whether or not
NYNEX terminates the Agreement or cancels the applicable Order(s). The receipt
of damages under this Article shall not preclude NYNEX or its AFFILIATE from any
other rights and remedies to which they are entitled under the terms and
conditions of this AGREEMENT at law or in equity. A breach under Article 19
shall be deemed to be cured on the date that remedial action is completed which
results in performance in accordance with the requirements of this Agreement.
ARTICLE 20
PERFORMANCE STANDARDS
20.1 Performance Standards are set forth in Article 12 hereof, entitled
Quality Assurance, together with those as shall be set forth in the applicable
Order(s). Supplier shall meet or exceed such performance standards in all work
performed or Material or Software provided under this Agreement or any Order(s).
The utilization of such minimum performance standards and the identification of
those damage elements which will be reimbursed as compensation for failure to
satisfy the requirements of the minimum performance standards is not intended
and should not be construed as sanctioning performance at or below such
standards. The sole purpose of such compensation is to provide a mechanism
within the context of the ongoing performance of the Agreement under which NYNEX
would determine and receive compensation, should SUPPLIER fail in its
performance, without immediate resort to Article 21 hereof, entitled DEFAULT.
Accordingly, under normal circumstances resort to and utilization of the
Performance Compensation Payments shall preclude the subsequent exercise of the
Default provision for those specific performance events for which compensatory
damages have been assessed and reimbursed. However, said specific performance
events shall be counted in determining the cumulative failure of Supplier to
meet the material performance requirements of this Agreement or any Order(s).
Failure to meet material performance requirements shall occur, if Supplier
performs below the minimum performance requirements consistently over a [ * ]
coincides with a calendar year. NYNEX shall have the option to invoke Default,
should Supplier fail to meet the material performance requirements of this
Agreement or any Order(s) issued pursuant to this Agreement.
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 56
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 56 OF 77
ARTICLE 21
DEFAULT
21.1 Supplier shall be in default as defined in this Article, if Supplier
fails to:
(i) individually, or in the aggregate over time, in any material
respect, make delivery of any Material or Software or to perform any
Service(s) within the time specified herein or in any applicable
Order(s), including without limitation development dates, or any
extension thereof by change order or amendment; or
(ii) individually, or in the aggregate over time, in any material
respect, replace or correct defective Material or Software or other
deliverable(s) or Service(s) in accordance with the provisions of
Article 12 hereof, entitled QUALITY ASSURANCE, Article 13 hereof,
entitled WARRANTIES, Article 18 hereof, entitled SUPPLIER
COMPREHENSIVE RESPONSIBILITIES FOR OVERALL PERFORMANCE, Article 20
hereof, entitled PERFORMANCE STANDARDS, or Article 17 hereof,
entitled WORKAROUND.
(iii) perform any of its other material obligations under this Agreement;
or
(iv) make progress so as to endanger performance of this Agreement or any
Order(s) in accordance with its terms; and, in any of the
circumstances specified in this Article, Supplier cannot demonstrate
that the Material, Software or other deliverable(s) or service(s)
will conform to this Agreement or any Order(s) and satisfy the
Acceptance Criteria, or that the SUPPLIER's employees as a group
assigned to the work are not capable of producing Material or
Software which will conform to this Agreement or any Order(s) and
satisfy the Acceptance Criteria; NYNEX may give Supplier written
notice citing the areas believed to be inadequate or deficient.
21.2 In the event of any Supplier Default under Section 21.1 or other
failure to perform any duty or obligation under this Agreement or any Order(s)
issued pursuant to this Agreement ("Default"), NYNEX shall provide Supplier with
written Notice thereof, in accordance with Section 30.10 hereof, and Supplier
shall have [ * ] from the mailing, or other issuance, of said
notice by NYNEX to cure the Default ("Cure Period"). Should an occasion(s) of
Default arise which the parties agree is of such a nature that it cannot be
remedied within the Cure Period through the application of Supplier's best
efforts, Supplier shall present within such Cure Period a plan of action to
remedy same, which plan shall have, in NYNEX's judgment, a reasonable
opportunity for success. If, at the end of the [ * ] period the
Default has not been remedied to the reasonable satisfaction of NYNEX, or a plan
to remedy reasonably acceptable to NYNEX is not presented, as the case may be,
then NYNEX may cause Supplier to be in Default
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 57
CONTRACT NO. X134094D
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hereunder by giving Supplier at least ten (10) business days prior written
notice of the effective date of such Default.
21.3 In the event of Default, then in addition to and independent of all
other rights and remedies at law or in equity or as provided in this Agreement,
NYNEX shall have the right to, and at its option may, terminate this Agreement
or cancel any such Order(s) placed by NYNEX without any charge, obligation or
liability whatsoever, except as to the payment for Material already installed
and accepted in those instances where an Order(s) only is canceled, provided
such Material was not the subject matter of the Default nor was its
effectiveness affected by such Default. The effect of such termination shall be
to terminate NYNEX's continuing obligation to make payments hereunder and to
cause NYNEX's right, title, and interest to the Material, Software, Service(s)
or other deliverable(s) including license rights under Article 5, to fully vest
in NYNEX and Supplier hereby agrees to and does grant all such right, title, and
interest to NYNEX, agrees to deliver such items to NYNEX, and agrees to take all
steps necessary to cause such right, title and interest to vest in NYNEX
including execution and filing of documents with the United States Patent
Office, United States Copyright Office and other relevant governmental agencies;
and
21.4 If this Agreement, or any Order(s), is terminated pursuant to this Article,
NYNEX, in addition to any other rights provided in this Article, may require the
Supplier to transfer title and deliver to NYNEX, in the manner and to the extent
directed by NYNEX, (i) any completed Material or Software, and (ii) such
partially completed Material or Software and developed Materials or Software as
specified in this Agreement or any Order(s) (hereinafter called "Developed
Materials") as the Supplier has specifically produced or acquired for the
performance of such part of this Agreement as has been terminated; and Supplier
shall, upon direction of NYNEX, protect and preserve such property, as
enumerated in the paragraph, in the possession of the Supplier. Payment for
completed contract Material delivered to and accepted by NYNEX shall be at the
Agreement or Order price. Payment for developed materials delivered to and
accepted by NYNEX and for the protection and preservation of property shall be
in the amount agreed upon by the Supplier and NYNEX; however, SUPPLIER's
obligation hereunder to carry out NYNEX's direction as to such shipment,
protection and preservation shall not be contingent upon prior agreement of the
parties as to such amount. NYNEX may withhold from amounts otherwise due the
Supplier for such completed contract Work or developed materials, such sums as
NYNEX determines to be necessary to protect NYNEX against loss. NYNEX shall
continue to hold a perpetual, worldwide, royalty-free license to all Software
previously delivered hereunder by Supplier, GI Information in accordance with
and subject to the limitations of Section 26.3 hereof, entitled INTELLECTUAL
PROPERTY RIGHTS, in accordance with Section 26.4 hereof, entitled RIGHTS TO
INNOVATIONS pursuant to the terms of such license as set forth herein, and
Supplier shall use its best commercial efforts to support such license as set
forth herein; and
21.5 NYNEX and Supplier will negotiate in good faith and in accordance
with Article 31 hereof, entitled ALTERNATE DISPUTE RESOLUTION any appropriate
and reasonable refunds due to, and other damages
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 58
CONTRACT NO. X134094D
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incurred by, NYNEX as a result of, or arising out of, such Default; such refunds
and damages to be based upon, among other things, the nature of the Default
resulting in such termination, the useful life to NYNEX of any Materials or
Software which are the subject matter of such Default, initial installation
costs, the excess costs of reprocurement and incremental costs, including
installation. In the event that Supplier and NYNEX fail to arrive at a mutual
agreement on the amount of refund and other damages to be received by NYNEX
within the steps and time periods set forth in Article 31, NYNEX shall have the
right to pursue such remedies as may be available at law or in equity or under
this Agreement. Failure of NYNEX to enforce any right under this Article
shall not be deemed a waiver of any right hereunder. The rights and remedies of
NYNEX under this Article shall not be exclusive and are in addition to any other
rights and remedies provided by law or under this Agreement.
ARTICLE 22
WORK PERFORMED ON NYNEX PREMISES
22.1 CLEAN UP Upon completion of any work performed under this AGREEMENT
or pursuant to Orders placed hereunder, SUPPLIER shall promptly remove all
implements, surplus materials and debris.
22.2 HARMONY SUPPLIER shall be entirely responsible for all persons
furnished by it working in harmony with all others working on NYNEX premises or
those of NYNEX's AFFILIATE.
22.3 PLANT AND WORK RULES SUPPLIER's employees, agents and contractors
shall, while on NYNEX or its AFFILIATES' premises, comply with all plant rules
and regulations, including, where required by government regulations, submission
of satisfactory clearance from the U.S. Department of Defense and other Federal
authorities concerned.
22.4 RIGHT OF ACCESS Each party shall permit access to the other's
respective facilities as reasonably required in connection with work hereunder.
No charge shall be made for such access. It is agreed that reasonable advance
notice will be given when access is required.
22.5 TOOLS AND EQUIPMENT Unless otherwise specifically provided in this
AGREEMENT, SUPPLIER shall provide labor, tools and equipment necessary for
performance pursuant to an Order under this AGREEMENT.
22.6 WORK HEREUNDER It is understood that visits by SUPPLIER's
representatives or SUPPLIER's contractor's representatives to perform SUPPLIER's
obligations under this AGREEMENT shall for all purposes be deemed "work
hereunder" and shall be at no charge to NYNEX and/or its AFFILIATES unless
otherwise specifically provided in this AGREEMENT or in another writing signed
or duly acknowledged by authorized representatives of both parties.
SUPPLIER's employees, contractors, and/or agents shall all be considered
SUPPLIER's employees, and SUPPLIER shall be solely responsible for work
performed by its employees, agents, and/or contractors. SUPPLIER shall, upon
notification from NYNEX of completion of work performed by others, upon whose
completion SUPPLIER's own work depends, promptly inspect and advise NYNEX of any
impediment that prevents the SUPPLIER's proper performance. SUPPLIER's silence
shall
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 59
CONTRACT NO. X134094D
OCTOBER 16,1996 PAGE 59 OF 77
constitute approval of such other work as fit, proper, and suitable for
SUPPLIER's performance of work.
ARTICLE 23
LIABILITY AND INSURANCE
23.1 LIABILITY All work or SERVICES furnished by SUPPLIER or by persons
furnished by SUPPLIER, including its subcontractors (if any) pursuant to this
CONTRACT shall be performed in a proper and workmanlike manner and as an
Independent Contractor and not as the agent of NYNEX. All persons furnished by
SUPPLIER and its subcontractors (if any) shall be considered solely SUPPLIER's
and its subcontractors' (if any) employees or agents, and SUPPLIER and its
subcontractors (if any) shall be responsible for compliance with all laws,
rules, and regulations including, but not limited to employment of labor, hours
of labor, working conditions, worker's compensation payment of wages, and
payment of taxes, such as unemployment, social security and other payroll taxes,
including applicable contributions from such persons when required by law.
SUPPLIER and its subcontractors (if any) shall indemnify, hold harmless, and
defend NYNEX and its AFFILIATES from and against any claim or lawsuits arising
out of SUPPLIER's and its subcontractors' (if any) failure to comply with any
such laws, rules or regulations.
SUPPLIER shall indemnify, hold harmless and defend NYNEX and its
AFFILIATES from and against any loss, cost, liabilities, claims or demands
(including the costs, expenses and attorney's fees) that may be made: (a) by
anyone for injuries including death to persons or damage to property including
theft, resulting from its acts or omissions or those of persons furnished by
SUPPLIER; (b) by persons furnished by SUPPLIER and its subcontractors (if any)
under Worker's Compensation or similar acts; (c) by anyone in connection with
work, MATERIAL, SOFTWARE DOCUMENTATION, RELATED DOCUMENTATION or SERVICES
provided by Supplier or contemplated by this AGREEMENT; and (d) under any
federal securities laws or under any other statute, at common law or otherwise
arising out of or in connection with the performance by Supplier contemplated by
this AGREEMENT or any information obtained in connection with such performance;
except, in each case, to the extent such losses are caused by the negligence or
willful misconduct of NYNEX or its Affiliates; and SUPPLIER further agrees to
bind its subcontractors (if any) to' similarly indemnify, hold harmless and
defend NYNEX. Supplier shall not implead or bring any action against NYNEX and
its NYNEX Affiliates, their respective directors, officers, employees, agents in
connection with any action by any of SUPPLIER's employees for any personal
injury (including death) or property damage that occurs in the course or scope
of employment of such person except to the extent such personal injury or
property damage is directly caused by the negligence of NYNEX and/or its
Affiliates or their employees or agents. NYNEX and its AFFILIATES will notify
SUPPLIER of any written claims or demands against it for which SUPPLIER is
responsible hereunder.
23.2 INSURANCE SUPPLIER and its subcontractors (if any) agree to purchase
and maintain during the term hereof all insurance and/or bonds required by law
or this AGREEMENT including without limitation: (a) Workers' Compensation and
related insurance as prescribed by the law of the State in which the work is
performed; (b) Employers Liability insurance with limits of not less than
$2,000,000 per occurrence and the aggregate; (c) Commercial General Liability
insurance, including PRODUCTS Liability and Completed Operation endorsements for
a combine single limit of not less than $5,000,000 per occurrence and in the
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 60
CONTRACT NO. X134094D
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aggregate; and (d) if the use of a motor vehicle is required, Automobile
liability coverage for a combined single limit of $2,000,000. SUPPLIER shall
furnish certificates of insurance evidencing placement of such insurance. NYNEX
and NYNEX Corporation shall be named as Additional Insureds in the policies
referred to in (c) above.
Certificates furnished by SUPPLIER shall provide that NYNEX is to be
notified in writing, in accordance with Section 30.10 hereof, at least twenty
(20) days prior to cancellation of, or any material change in the policy.
SUPPLIER and its subcontractors (if any) shall assume responsibility for such
notification being given to:
Manager, Customer Support
NYNEX
240 East 38th Street, 15th Floor
New York, New York 10016
ARTICLE 24
IMPLEADER AND LIMITED LIABILITY OF NYNEX
SUPPLIER shall not implead or bring any action against NYNEX or its
AFFILIATES or the employees of either based on any claim by any person for
personal injury or death that occurs in the course or scope of employment of
such person by NYNEX or its AFFILIATE for which a claim may be filed under the
Worker's Compensation Act and that arises out of the business contemplated under
this AGREEMENT except if such personal injury or death is caused by the gross
negligence or willful misconduct of NYNEX. SUPPLIER also agrees that neither
NYNEX nor its AFFILIATES shall be liable for any special, punitive or exemplary
damages for any acts or failure to act under this AGREEMENT unless such act or
failure to act is intentional or willful.
ARTICLE 25
DOCUMENTATION AND RECORD KEEPING
25.1 PERIODIC REPORTS SUPPLIER agrees to render at no charge to NYNEX on a
monthly basis, unless otherwise mutually agreed upon, and in formats acceptable
to NYNEX, the following reports (by way of-example and not limitation):
a. Material Back Order Report
b. Repair and Return Report
c. Outstanding Engineering Complaints Report
d. Outstanding Order Report
e. Volume Report
f. Monthly Product Development Reports
9. Monthly Production Schedule Reports
h. Monthly Billing Reports
i. Software Development Tracking Reports
j. Quarterly reports listing sub-contractors and products/services
provided under this Agreement.
k. Organization charts
l. Status reports for engineering and design documents
m. Monthly Change Reports detailing Engineering and Design Statement of
Work changes.
n. Weekly Impact/Issues Report
o. Monthly Quality Reports
p. M/WBE (second tier) Reports identifying diversified sub-contractors
used by SUPPLIER.
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
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CONTRACT NO. X134094D
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q. Warranty Reports
r. NTF Summary Reports
SUPPLIER agrees to render other periodic reports for service affecting
conditions or other conditions that affect the operational and administrative
procedures of NYNEX or its AFFILIATES, or as otherwise requested by NYNEX or its
AFFILIATES.
25.2 RECORDS AND AUDIT SUPPLIER shall maintain, in accordance with
standard recognized accounting practices, accurate and complete records as are
necessary to enable SUPPLIER to demonstrate full compliance with all of the
Terms and Conditions of this AGREEMENT. SUPPLIER shall maintain such records for
a period of ten (10) years from the date of termination of this AGREEMENT.
SUPPLIER agrees to provide reasonable supporting documentation concerning
any disputed amount(s) within twenty (20) days after NYNEX or its AFFILIATES
provides written notification of the dispute to SUPPLIER.
NYNEX and SUPPLIER shall mutually agree upon an independent auditor who,
at NYNEX' option, shall audit SUPPLIER's records of SUPPLIER's transactions with
its other commercial customers for verification of comparable pricing and other
commercial elements in accordance with the clause hereof entitled "MOST FAVORED
NATION"; provided that the identity of such other commercial customers shall not
be disclosed to NYNEX. SUPPLIER shall be responsible for all audit/ verification
expenses should the audit reveal or determine that there is a deficiency or
violation of Section 8.2 hereof, entitled MOST FAVORED NATION. At NYNEX'
request, the independent auditor shall have access to the SUPPLIER's records,
for purposes of audit during normal business hours during the term of this
AGREEMENT and during the respective periods in which SUPPLIER is required to
maintain such records. The accuracy of SUPPLIER's billing shall be determined
from the results of such audits.
ARTICLE 26
INTELLECTUAL PROPERTY - GENERAL OBLIGATIONS
26.1 INFRINGEMENT OF PATENTS, COPYRIGHTS, AND TRADEMARKS The following
terms apply to any infringement, claim of infringement or other misappropriation
of any patent, trademark, copyright, trade secret or other proprietary interest,
breach of fiduciary relationship or breach of contract related to the existence
of a fiduciary or employee relationship ("Claim") based on or arising out of the
disclosure, development, manufacture, use, reproduction, possession,
distribution, sale, transfer, resale, misuse or misappropriation of any SYSTEM,
PRODUCT, MATERIAL, SOFTWARE or DOCUMENTATION, or part thereof, or SERVICES
furnished, or the use of any Licensed Materials within the scope of the licenses
granted to NYNEX under this AGREEMENT and provided such Licensed Materials are
not being used in violation of an expressed restriction in such licenses.
SUPPLIER shall indemnify, hold harmless and defend, NYNEX and its
AFFILIATES, ("Indemnitees") from and against any loss, cost, damage, claim,
expense, including without limitation court costs and reasonable attorney fees,
or liability that may arise out of, or result by reason of, any such
infringement or claim, including without limitation any claim or cause of action
of whatever type or nature arising out of any
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 62
CONTRACT NO. X134094D
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claim, cause of action or litigation, between Supplier, any of its subsidiaries,
affiliates or successors in interest and DSC Communications Corporation or DSC
Technologies Corporation or any of its subsidiaries, affiliates or successors in
interest ("DSC Litigation") whether currently pending or during the term of this
Agreement. SUPPLIER shall defend or settle, at its own expense, any action, suit
or proceeding against any Indemnitees arising in connection with a Claim, and
shall pay any damages, costs or expenses awarded therein or payable in
settlement; provided, however, that no such settlement shall compromise, impede
or limit in any manner NYNEX's possession, use or distribution of the System,
Product, Material, Software or other item subject to the Claim. NYNEX shall
notify the SUPPLIER promptly, in accordance with Section 30.10 hereof, of any
claim of infringement for which SUPPLIER is responsible, and shall cooperate
with SUPPLIER in every reasonable way to facilitate the defense of any such
claim.
Without limitation of the foregoing, should NYNEX's or its AFFILIATES' use
of, or full benefit from, the SYSTEM, PRODUCT, MATERIAL, SOFTWARE, DOCUMENTATION
or Licensed Materials and/or SERVICES be impeded, prevented or limited by
injunction or other court order arising out of any such infringement or other
cause of action for which SUPPLIER is responsible, SUPPLIER shall, in addition
to the above indemnity, at no expense, loss or damage to NYNEX or its AFFILIATES
and, at SUPPLIER's option:
A. replace such PRODUCT, SYSTEM, MATERIAL, DOCUMENTATION, LICENSED
MATERIALS and/or SERVICES which SUPPLIER can demonstrate to NYNEX's
reasonable satisfaction are equally suitable MATERIAL, DOCUMENTATION
and LICENSED MATERIALS and/or SERVICES and which are free of any
infringement; or
B. modify such MATERIAL, DOCUMENTATION, LICENSED MATERIALS and/or
SERVICES without reduction or loss of functionality so that it or
they will be free of infringement; or
C. by license or other release from claim of infringement, procure for
NYNEX' or its AFFILIATES' benefit the right to use, install, sell,
or resell such MATERIAL, DOCUMENTATION, LICENSED MATERIALS and/or
SERVICES; or
D. i) if none of the foregoing can be rapidly and effectively
accomplished such that the NYNEX implementation schedules will be
delayed by more than one hundred and twenty (120) days or such
longer period as may be agreed to by the Parties; or ii) should an
effect of the DSC litigation be to materially limit SUPPLIER's
ability to sell the SYSTEM, PRODUCTS, MATERIAL or SOFTWARE, such
that SUPPLIER fails to complete the sale of such Material or
Products, on a generally available basis and in quantities
comparable to the NYNEX sale, to at least two additional purchasers
within twenty four (24) months of the date of the completion of
Phase I of FOA by NYNEX; or iii) should SUPPLIER fail to use its
best efforts to develop, support or market the Material or Products
in a commercially reasonable manner; or iv) if SUPPLIER discontinues
the development or manufacture, or otherwise exits the business of
providing the SYSTEM, PRODUCT, MATERIAL, or SOFTWARE, or acts in
such a way as to support a determination by NYNEX that SUPPLIER
plans to so discontinue manufacture or exit the business, (provided,
however, that the terms "discontinue" and "exit," as used in this
Article 26.1D(iii) shall not include (a) advances by
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
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CONTRACT NO. X134094D
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SUPPLIER in the technology of the SYSTEM, PRODUCT, MATERIAL, or
SOFTWARE so long as such advances in technology are backward
compatible with, and so long as SUPPLIER continues to support, the
SYSTEM, PRODUCT, MATERIAL, and SOFTWARE; and (b) the sale or
transfer of that part of SUPPLIER's business that includes the
subject matter of this Agreement to a third party approved by NYNEX
[which approval shall not be unreasonably withheld] who agrees to
assume the obligations of this Agreement; and provided, further,
that SUPPLIER's obligations under this Article 26.1D(iii) shall
terminate (except for SUPPLIER's obligations to support the SYSTEM,
PRODUCT, MATERIAL and SOFTWARE)(c) at such time that NYNEX
discontinues ordering MATERIAL in accordance with its commitments
under the Agreement, other than replacement parts for MATERIAL
already installed; SUPPLIER shall, if directed by NYNEX, (1) remove
the MATERIAL from the premises of NYNEX or its AFFILIATES, or such
other location, and refund to NYNEX or its AFFILIATES the full
SYSTEM, PRODUCT, MATERIAL purchase price and any non-recurring
reasonable amount paid for the use of any associated SOFTWARE and
the reasonable costs associated with removal thereof, and shall, at
its own expense, restore the premises as nearly to their original
condition as is reasonably possible, unless otherwise directed in
writing by NYNEX or its AFFILIATE; (2) [ * ] an amount equal
to [ * ] similar generally available SYSTEMS, PRODUCTS,
MATERIAL, SOFTWARE and SERVICES from a [ * ] on an [ * ]
, it being understood that [ * ] such systems, products,
material, software and services will be net of the [ * ] ,
(ii) to retrofit the NYNEX network and its infrastructure, including
substantiated installation costs, whether any of the foregoing
damages in items (i) and (ii) are general or special in nature; and
NYNEX may terminate the Agreement without liability of any type or
character to SUPPLER.
If either NYNEX or SUPPLIER is directed by a court of competent
jurisdiction, after all permissible appeals have been taken, to cease further
use or deployment of, or remove the MATERIAL from the premises of NYNEX or its
AFFILIATES, or such other location, then SUPPLIER shall (1) remove the MATERIAL
from the premises of NYNEX or its AFFILIATES, or such other location, and refund
to NYNEX or its AFFILIATES the full SYSTEM, PRODUCT, MATERIAL purchase price
paid to date and any nonrecurring reasonable amount paid for the use of any
associated SOFTWARE and the reasonable costs associated with removal thereof,
and shall, at its own expense, restore the premises as nearly to their original
condition as is reasonably possible, unless otherwise directed in writing by
NYNEX or its AFFILIATE; (2) pay to NYNEX an amount equal to all reasonable
charges, costs and expenses (i) to reprocure similar commercially available
SYSTEMS, PRODUCTS, MATERIAL, SOFTWARE and SERVICES from a third party on an
expedited basis, it being understood that any such costs associated with such
SYSTEMS, PRODUCTS, MATERIAL, SOFTWARE and SERVICES will be net of the refund of
the purchase price referred to above, (ii) to retrofit the NYNEX network and its
infrastructure, including substantiated installation costs, and (iii) any
assessments or penalties imposed by regulatory agencies as a consequence of such
removal of MATERIAL, whether any of the foregoing damages in items (i) through
(iii) are general or special in nature; and NYNEX may terminate the Agreement
without liability of any type or character to Supplier.
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
<PAGE> 64
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 64 OF 77
26.2 Performance Bond or Irrevocable Letter of Credit SUPPLIER shall
obtain and maintain, during the terms of this Agreement or any Order(s) issued
pursuant to the Agreement and any extensions thereof, a Performance Bond
("Bond") or Irrevocable Letter of Credit ("LC") in the penal sum of One Hundred
and Thirty Five Million Dollars ($135,000,000.00). SUPPLIER shall secure and
procure the Bond(s) or LC(s) according to the following schedule:
A) Within sixty (60) days of the execution of this Agreement by both
parties, a Bond or LC in an initial amount of Fifty Million Dollars
($50,000,000);
B) Commencing no later than January 31, 1998, the Bond or LC shall be
increased by an additional Fifty Million Dollars ($50,000,000);
C) Commencing no later than January 31, 1999, the Bond or LC shall be
increased by an additional Thirty Five Million Dollars ($35,000,000)
bringing the total value of the Bond or LC to One Hundred and Thirty
Five Million Dollars ($135,000,000). The Bond or LC in the amount of
One Hundred and Thirty Five Million Dollars ($135,000,000) shall
remain in effect until i) the infrastructure implementation to the
commitment level of eight hundred thousand (800,000) households
passed is completed and achieved in accordance with the requirements
of this Agreement; and ii) all DSC Litigation has been concluded and
SUPPLIER has satisfied any and all obligations arising out of such
DSC Litigation. Thereafter, and only upon satisfaction of conditions
i) and ii) of this paragraph, SUPPLIER may be permitted to reduce
the amount of the Bond or LC during the term of this Agreement, but
only in the amounts listed herein and then only under the following
conditions:
1) by an amount of Sixty Five Million Dollars ($65,000,000), upon
completion of the infrastructure implementation to the
commitment level of eight hundred thousand (800,000)
households passed in accordance with the requirements of this
Agreement and provided that no default has occurred and no
Performance Compensation Payments have been assessed by NYNEX
against SUPPLIER; or
2) by the amount of One Million Dollars ($1,000,000.00) for each
one percent (1%) that NYNEX fails to meet the commitment level
of households passed by the conclusion of the scheduled
infrastructure implementation period, provided such failure is
caused solely, directly and independently of all other causes
by NYNEX; or
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
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CONTRACT NO. X134094D
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3) by an amount which reduces the Bond to the level of dollars
actually paid by NYNEX to SUPPLIER or Twenty Five Million
Dollars ($25,000,000), whichever is greater, should NYNEX
terminate for convenience, except that no reduction shall
occur in the event of a termination for convenience related
to, based on, or arising out of the DSC Litigation; or
4) the Bond or LC may be canceled in its entirety if, and only
if, at the completion of the infrastructure implementation to
the commitment level of eight hundred thousand
(800,000)households passed in accordance with the requirements
of this Agreement, i) no default has occurred and no
Performance Compensation Payments have been assessed by NYNEX
against SUPPLIER; and ii) Supplier provides proof
satisfactory to NYNEX, in the form of financial statements,
D&B ratings, and such other means identified by NYNEX in the
Financial Accountability Requirement, that SUPPLIER's
financial ability and assets adequately back and provide
sufficient security against any further contingencies arising
out of Article 19 hereof entitled REPORT RATE, Article 21
hereof, entitled DEFAULT and Article 26 hereof, entitled
INTELLECTUAL PROPERTY - GENERAL OBLIGATIONS.
Under said Bond or LC, the Principal and the Surety(ies) shall be firmly
bound to NYNEX in the foregoing penal sum and shall promptly pay NYNEX in
accordance with and pursuant to Article 19 hereof, entitled REPORT RATE, or
Article 21 hereof, entitled DEFAULT or, Article 26, entitled INTELLECTUAL
PROPERTY - GENERAL OBLIGATIONS or Article 31 hereof, entitled ALTERNATE DISPUTE
RESOLUTION, if it is determined, by the Mediator under Article 31 or by the
Supreme Court of the State of New York or any United States District Court, that
SUPPLIER has failed to perform or fulfill any of the undertakings, covenants,
terms, conditions or requirements of this Agreement or any Order(s) issued
pursuant to this Agreement or any extension or modification thereof; provided
however, that any penal sums assessed in accordance with the terms of the
Agreement shall be, in the first instance, the responsibility of General
Instrument, acting as Principle, and it shall be at General Instrument's initial
discretion as to whether such penal sums are paid to NYNEX through its own
assets or from the Bond or LC; provided however that if such penal sums are not
paid by General Instrument within 90 days of their assessment, NYNEX shall have
the right to directly claim against the Bond or LC and invoke its right to
prompt payment under the Bond or LC.
In the event that liabilities occur and damage sums are assessed, those
sums shall be limited only to the actual amounts arising out of the claim, and
shall not be construed as a forfeiture of the entire
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
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CONTRACT NO. X134094D
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amount of the Bond or LC. Furthermore, prior to any claim by NYNEX against the
Bond, the claim must have been submitted to General Instrument and all due
process including those contained in Article 31 of this Agreement shall have
been acted upon.
The Surety(ies) for said Bond shall be a major insurance corporation or
other major financial institution licensed to do business in the State of New
York and with a Bests Rating of A10 or better, whose principal assets are
located in the United States of America or shall appear on the Department of
Treasury's list of approved sureties and must act within the limitations listed
therein. The commercial bank providing an Irrevocable Letter of Credit shall be
chartered or licensed by either the United States, or by New York State, shall
be rated A- or better by Standard & Poor's, and shall have capital in excess of
one billion dollars ($1,000,000,000.).
26.3 INTELLECTUAL PROPERTY RIGHTS Supplier pursuant to this Agreement and
the relationship created herein will provide Material, Software, and Services,
including without limitation previously developed hardware and software,
firmware, internal code, materials and services based upon or utilizing
inventions, discoveries, know-how, techniques, data, reports, records, research,
information, software, including source code and documentation developed,
acquired or owned by Supplier, or to which Supplier holds a license, prior to
and independent of this Agreement ("GI Information"); and furthermore Supplier
may develop, acquire or obtain a license for additional material, data, records,
research, information, software, firmware, including source code and
documentation ("GI Information") which will be used or useful in the provision
of Material, Software or Services pursuant to this Agreement, but which GI
Information was not initially developed, acquired or licensed in order to
perform or satisfy the requirements of this Agreement, a Work Order(s) or
Statement(s) of Work issued under this Agreement. Supplier shall retain its
right, title and ownership interest in all such GI Information; provided,
however, that if, and to the extent that, such GI Information is conveyed to
NYNEX or is fixed, imbedded, used or useful in, or incident to the use,
execution, operation, maintenance or support of Material, Software or Services
provided pursuant to this Agreement, Supplier hereby grants to NYNEX and its
Affiliate(s) a perpetual, paid-up, non-cancelable, license and right ("License")
to use execute, copy, reproduce, display, translate, perform, modify, correct,
enhance, and create derivative works of or based upon, in whole or in part, the
GI Information and the right to authorize others to do the same, provided such
use by such non-affiliated third parties is solely for NYNEX or its Affiliated
Company(s) use in the normal course of business.
Supplier recognizes that NYNEX possesses superior knowledge and
experience, incident to the construction, operation and management of a complex
local exchange network, cable systems and other telecommunications networks
("NYNEX Networks") and that NYNEX has made substantial investments of time,
personnel and money in the development of a broad range of technical information
and expertise relating to the NYNEX Networks, and the hardware, equipment,
facilities, and software used and useful in the construction, provision,
operation and management of telecommunications services, including without
limitation inventions, discoveries, know-how, techniques, data, reports,
records, research, information, software, including source code and
documentation developed, acquired or owned by NYNEX, or to which NYNEX holds a
license, prior to and independent of this Agreement ("NYNEX
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
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Information"); and furthermore NYNEX may develop, acquire or obtain a license
for additional data, records, research, information, software, including source
code and documentation ("NYNEX Information") which will be used or useful in the
provision of telecommunications services, including without limitation Switched
Digital Video services. NYNEX shall retain its right, title and ownership
interest in all such NYNEX Information.
26.4 RIGHTS TO INNOVATIONS Supplier and NYNEX acknowledge that new or
proprietary or trade secret concepts, methods, techniques, processes, know-how,
adaptations, ideas, inventions, discoveries, improvements, including without
limitation patented or patentable concepts ("Innovations") may be conceived,
first reduced to practice, made or developed, in the course of, or as a result
of, or in preparation for, performance under this Agreement.
Supplier and NYNEX agree that all such Innovations developed, or otherwise
made, during the course of this Agreement by Supplier personnel or jointly by
Supplier and NYNEX personnel can be used by either party in any way it may deem
appropriate. Each Innovation shall be treated as follows: (a) if made by NYNEX
personnel, it shall be the property of NYNEX, (b) if made by Supplier personnel,
it shall be the property of Supplier and Supplier grants, and agrees to grant,
to NYNEX a non-exclusive, irrevocable, unrestricted and royalty-free license
throughout the world, including the right to grant sublicenses to its
subsidiaries and, to its affiliated companies; (c) if made jointly by personnel
of Supplier and NYNEX, it shall be jointly owned without accounting,
distribution or sharing of revenues of any kind between Supplier and NYNEX.
Except as expressly provided in this Article, nothing herein shall be construed
as granting any license or rights under any statutory forms of protection. This
Agreement shall not preclude Supplier or NYNEX from developing materials which
are competitive, irrespective of their similarity, to materials which might be
delivered to NYNEX pursuant to this Agreement.
26.4.1 SUPPLIER and NYNEX further agrees that, each will sign and cause to
be signed all papers and do and cause to be done all acts which may be
necessary, desirable or convenient to enable the other, at the other's expense,
to file and prosecute applications for jointly owned patents on such inventions,
discoveries and improvements, and to maintain patents granted thereon. SUPPLIER
shall have and acquire from SUPPLIER's and any subcontractor's employees, agents
and contractors who perform services under this Agreement, such assignment and
rights as to assure that NYNEX shall receive all of the rights provided for in
this Agreement. SUPPLIER shall provide a copy of all documents to show that all
Work PRODUCT and intellectual property developed by its and its subcontractor's
employees, agents and contractors have been transferred to SUPPLIER.
26.5 LICENSES except as set forth in Sections 26.3 and 26.4 no licenses,
express or implied, under any patents, copyrights, trade secrets, trademarks or
otherwise are granted by NYNEX or its AFFILIATES to SUPPLIER hereunder.
26.6 IDENTIFICATION No NYNEX or its AFFILIATE's (including but not limited
to NYT and NET), identification or simulation thereof, references to NYNEX or
its AFFILIATE or references to their respective trademarks, service marks,
codes, drawings, or specifications will be used in any of SUPPLIER's advertising
or promotional efforts in reference to activities undertaken by SUPPLIER under
this AGREEMENT without NYNEX' prior written permission. SUPPLIER shall remove
any
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
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identification, trade names, trademarks, insignia, symbols or evidences of NYNEX
inspection prior to any sale, use or disposition of material or equipment
rejected or not purchased by NYNEX or its AFFILIATE. SUPPLIER agrees to
indemnify NYNEX and its AFFILIATE against any claim arising out of SUPPLIER's
failure to do so. This clause does not modify the USE OF INFORMATION clause.
26.7 INSIGNIA Upon NYNEX' written request SUPPLIER shall, at mutually
agreed to charges, properly affix to MATERIAL certain of NYNEX' or NYNEX'
AFFILIATES' trademarks, trade names, insignia, symbols, decorative designs,
(hereafter "Insignia") provided such insignia do not adversely affect the
operation of the MATERIAL. MATERIAL rejected or not purchased by NYNEX which has
been identified or marked with NYNEX' or its AFFILIATES' insignia or evidences
of NYNEX inspection, shall have all such insignia and evidences of NYNEX
inspection removed, mutilated, destroyed or disposed of or as otherwise agreed
upon, prior to any sale, use or dispositions thereof. SUPPLIER agrees to
indemnify and hold NYNEX and NYNEX' AFFILIATES harmless and if requested defend
NYNEX and/or its AFFILIATES, from and against any claim, loss, damage or lawsuit
arising out of SUPPLIER's failure to do so. This clause shall in no way modify
the provisions hereof related to Use of Information.
26.8 PUBLICITY Supplier agrees to submit to NYNEX all advertising, sales,
and promotional materials, press releases and other publicity materials relating
to the SYSTEM, MATERIAL, SOFTWARE to be furnished, or the SERVICES performed, by
the SUPPLIER under this AGREEMENT wherein the name, marks, or the name or mark
of the other is mentioned or containing language from which the connection of
said names or marks may be inferred or implied; and the parties further agree
not to publish or use such advertising, sales and promotional materials, press
releases, or other publicity materials before receiving the prior written
approval from the other party. Such approval shall not be unreasonably withheld.
26.9 USE OF INFORMATION Any specifications, drawings, sketches, models,
samples, tools, computer or other apparatus programs, technical or business
information or data, written, oral or otherwise (all hereinafter designated
"Information") which NYNEX furnished, or shall furnish, to SUPPLIER under this
AGREEMENT or in contemplation of this AGREEMENT shall remain NYNEX' or its
AFFILIATE's property. All copies of such Information in written, graphic or
other tangible form shall be returned to NYNEX or its AFFILIATE upon request.
Unless such Information was previously known to SUPPLIER free of any obligation
to keep it confidential, or has been or is subsequently made public by NYNEX or
a third party, it shall be kept confidential by SUPPLIER, shall be used only in
performing under this AGREEMENT, and may not be used for other purposes except
upon such terms as may be agreed upon in writing by NYNEX.
26.10 SUPPLIER'S INFORMATION except as mutually agreed upon in writing and
in advance of such information being provided by Supplier no specifications,
drawings, sketches, models, samples, tools, computer or other apparatus
programs, technical or business information or data, written, oral or otherwise,
furnished by SUPPLIER to NYNEX or NYNEX' AFFILIATES under this AGREEMENT shall
be considered by SUPPLIER to be confidential or proprietary.
26.11 WAIVER OF CONFIDENTIALITY SUPPLIER hereby waives confidentiality in
regard to specific technical information related to troubles and design defects
in the SYSTEM, MATERIAL, and/or SOFTWARE
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
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CONTRACT NO. X134094D
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purchased hereunder. The information as to which confidentiality is waived is
specifically:
A. Operational Trouble Reports (OTR) and Summaries;
B. Engineering Complaints, Final Reports, Maintenance Requests and
Summaries;
C. Call/Trouble Reports (including failure reports, maintenance
requests and internal memorandum reports);
D. Circuit Pack Failure Rates and Failure Mode Data;
E. Outage/Downtime Data;
F. Equipment Failure Reports (EFR);
This waiver shall permit NYNEX and its AFFILIATES to share the specified
technical records, documents and information with other operating telephone
companies, Bell Communications Research, and vendors performing services for
NYNEX and its AFFILIATES.
ARTICLE 27
ENVIRONMENTAL AND SAFETY
27.1 ENVIRONMENTAL COMPLIANCE
(A) SUPPLIER hereby warrants, represents and certifies that SUPPLIER's
performance of this AGREEMENT, SUPPLIER's PRODUCTS and the result of
SUPPLIER's SERVICES rendered hereunder conform to and shall conform
and comply with all climatic, weather and environmental factors and
requirements identified in Appendix A, entitled SCOPE OF WORK and
shall comply in all material respects with all applicable Federal,
State, County and Municipal laws, statutes, regulations, and codes
which relate to environmental protection and employee protection
including, but not limited to, the Atomic Energy Act, Clean Air Act,
Clean Water Act, Comprehensive Environmental Response, Compensation
and Liability Act, Federal Insecticide, Fungicide and Rodenticide
Act, Hazardous Materials Transportation Act, Marine Protection,
Research and Sanctuaries Act, National Environmental Policy Act,
Noise Control Act, Occupational Safety and Health Act, Safe Drinking
Water Act, Solid Waste Disposal Act, Toxic Substances Control Act,
and any equivalent or similar state, county, or local law,
regulation, statute, code, or ordinance.
(B) "State" refers to the State of New York, the state where, or in
which, SUPPLIER's Performance occurs and any other state or
subdivision of a state asserting jurisdiction over SUPPLIER's
performance hereunder.
(C) "Performance" as used herein refers to SUPPLIER's installation,
dismantling, segregation, staging, loading, removal, processing,
transportation, disposal, treatment, reclamation or other handling
methods used in performing under this AGREEMENT.
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 70
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(D) SUPPLIER further agrees to recertify compliance herewith at NYNEX's
request. SUPPLIER will indemnify and save NYNEX and its CUSTOMER
harmless from any violation or breach of this clause entitled
"ENVIRONMENTAL COMPLIANCE."
(E) SUPPLIER certifies that it shall obtain all licenses, permits, and
authorizations necessary to perform this AGREEMENT from the
appropriate State, Federal and Local governments and agencies prior
to commencement (performance) of WORK hereunder.
(F) SUPPLIER shall use its best efforts to exercise every reasonable
safety precaution and best management practice, whether or not
required by law, in dealing with the MATERIAL.
(G) SUPPLIER shall notify NYNEX immediately if any permit, license,
certificate or identification number required for working on the
MATERIAL shall have been revoked, not been renewed, expired or been
suspended.
27.2 HAZARDOUS CHEMICAL INFORMATION SUPPLIER shall provide Material Safety
Data Sheet(s) in the event that the MATERIAL, equipment, or PRODUCT (including
electronic components) to be provided is or contains any substance designated:
A. as a toxic/hazardous substance, as defined by the Occupational
Safety and Health Administration, Environmental Protection Agency,
and/or all state "Right to Know" laws; and/or
B. as a carcinogen or potential carcinogen by the National Toxicology
Program or the International Agency for Research on cancer; and/or
C. a hazardous material as defined in the Hazardous Material
Transportation Act; and/or
D. a regulated PRODUCT under the Federal Insecticide, Fungicide and
Rodenticide Act; and/or
E. as a hazardous waste in the Resource Conservation and Recovery Act
or the Superfund Amendment Reauthorization Act; and/or
F. as radioactive; and/or
G. under the Clean Air Act or Clean Water Act.
A Material Safety Data Sheet must also be provided if the MATERIAL,
equipment or PRODUCT (including components) could be a hazard to human health
and/or the environment in a fire/combustion or spill situation.
27.3 OCCUPATIONAL SAFETY AND HEALTH ACT (O.S.H.A.) SUPPLIER in performing
work under this AGREEMENT will fully comply with the provisions of the Federal
Occupational Safety and Health Act of 1970 and with any and all applicable rules
and regulations issued pursuant to the Act.
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 71
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OCTOBER 16, 1996 PAGE 71 OF 77
ARTICLE 28
TRAINING
If requested by NYNEX and/or its AFFILIATES, SUPPLIER agrees to provide
training in the courses referenced in APPENDICES F and X hereto, respectively
entitled BUSINESS ISSUES and MODIFICATIONS TO APPENDICES and any changes
thereto, training in any courses subsequently developed by SUPPLIER, and any
training equipment and instructional documentation required in support of
MATERIAL, SOFTWARE, and/or SERVICES to be furnished by SUPPLIER under this
AGREEMENT.
The training, training equipment and instructional documentation to be
furnished by SUPPLIER under this AGREEMENT shall be suitable to train NYNEX
and/or its AFFILIATES' personnel in the area of SYSTEMS planning, application
engineering, practices, operation, installation, maintenance and repair, as well
as marketing of SYSTEM features as required.
Such training, training equipment and instructional documentation shall be
configured to provide at NYNEX and/or its AFFILIATE's option, either/or both of
the following:
A. Instructors, training equipment and instructional DOCUMENTATION
suitable to train NYNEX' and/or its AFFILIATE's personnel at either
SUPPLIER's or NYNEX' and/or its AFFILIATE's location.
B. Provide instructor training, training equipment and instructional
DOCUMENTATION suitable to sufficiently train NYNEX' and/or its
AFFILIATE's training staff, so that they, in turn, may conduct
training programs related to the SYSTEM and qualify other NYNEX
and/or its AFFILIATE personnel in the appropriate use, or
application of the SYSTEM.
The training, training equipment and instructional documentation furnished
by SUPPLIER under this AGREEMENT, shall be developed and furnished in accordance
with the requirements, formats and procedures set forth in APPENDICES F and X
hereto this AGREEMENT, respectively entitled BUSINESS ISSUES and MODIFICATIONS
TO APPENDICES.
ARTICLE 29
CONSULTING
ENGAGEMENT NYNEX shall have the option to contract for specialized
consulting assistance from SUPPLIER on a project basis to be described in
documents specifying the consulting services and deliverables to be provided by
SUPPLIER ("Statement(s) of Work"). Statements of Work will be executed from time
to time, and upon acceptance by both parties will be incorporated into this
Agreement by reference thus describing the specifications for each engagement
("Engagement"). If there are any terms or conditions specified in a Statement of
Work that conflict with this Agreement, the terms and conditions of this
Agreement will prevail unless those terms are expressly noted as overriding the
terms and conditions of the Agreement and then only for that specific Statement
of Work. SUPPLIER understands that time is of the essence and will endeavor to
place the appropriate personnel on a timely basis.
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
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ARTICLE 30
GENERAL PROVISIONS
30.1 SEVERABILITY If any of the provisions of this AGREEMENT shall be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate or render unenforceable the entire AGREEMENT, but rather the entire
AGREEMENT shall be construed as if not containing the particular invalid or
unenforceable provision or provisions. If the invalid or unenforceable provision
or provisions shall be considered an essential element of this AGREEMENT, the
parties shall promptly attempt to negotiate a substitute therefor.
30.2 CHOICE OF LAW The construction, interpretation and performance of
this AGREEMENT shall be governed by and construed in accordance with the
domestic laws of the State of New York, and all actions under this AGREEMENT
shall be brought in a court of competent subject matter jurisdiction of the
State of New York and both parties agree to accept and submit to the personal
jurisdiction of such court. SUPPLIER also agrees to submit to the jurisdiction
of any court in the United States wherein an action is commenced against NYNEX
or its AFFILIATES based on a claim for which SUPPLIER has indemnified NYNEX and
its AFFILIATES hereunder.
30.3 COMPLIANCE WITH LAWS SUPPLIER and all persons furnished by SUPPLIER
shall comply with the applicable EEO, Fair Labor Standards Act and all other
federal, state, county and local laws, ordinances, regulations and codes
(including procurement of required permits or certificates) in its or their
performance under this AGREEMENT or an Order issued pursuant hereto.
This AGREEMENT is subject to applicable laws and executive orders relating
to equal opportunity and nondiscrimination in employment. SUPPLIER and all
persons furnished by SUPPLIER shall not unlawfully discriminate in its
employment practices against any person by reason of race, religion, color, sex,
disability or national origin and agrees to comply with the provisions of said
laws and orders to the extent applicable in the performance of this AGREEMENT
and as set forth in the attached Non-Discrimination Compliance Undertaking.
SUPPLIER agrees to indemnify and hold harmless NYNEX and/or its AFFILIATES
for, from and against and defend NYNEX and/or its AFFILIATES against, any loss
or damage sustained because of SUPPLIER'S noncompliance hereunder.
30.4 MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES SUPPLIER agrees to
provide equal opportunity to Minority and Women-Owned Business Enterprises
(M/WBE) in accordance to requirements set forth in Appendix F hereto, entitled
BUSINESS ISSUES.
SUPPLIER's compliance with this clause shall be subject, at NYNEX's option
to independent verification in accordance with the clause hereof entitled
"Records and Audit."
30.5 EXPORT CONTROL
A. SUPPLIER hereby certifies to NYNEX that unless SUPPLIER has received
the prior written authorization of the Office of Export Licensing of
the U.S. Department of Commerce, Washington, D.C., SUPPLIER will not
transmit, by any means,
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
<PAGE> 73
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 73 OF 77
either directly or indirectly, any technical data or information
in any form whatsoever (whether written, oral or otherwise)
acquired from NYNEX, or any direct PRODUCT of such data or
information, to any "Q," "S," "T," "V," "W," "Y" or "Z" country
enumerated in the Export Control Regulations of the U.S.
Department of Commerce or to Afghanistan or the People's Republic
of China including Inner Mongolia, the provinces of Tsinghsi and
Sikang, Sinkiang, Tibet and Manchuria (includes the former
Kwantung Leased Territory, the present Port Arthur Naval Base
Area, and Lianong Province), but excluding the Republic of China
(Taiwan, also known as Formosa).
B. SUPPLIER further covenants and agrees with NYNEX that in performing
under this AGREEMENT SUPPLIER will, at all times, comply with The
Export Administration Amendments Act of 1985 (P.L. 99-64); The
Department of Defense Authorizations Act of 1984 (P.L. 98-94); The
Arms Export Control Act (22 USC 1234 Sections 2751 et seq.); The
Department of State International Traffic in Arms Regulations
(22 CFR Sections 121 et seq.); The Department of Commerce
Technical Data Regulations (15 CFR Pt. 179) and all Regulations
promulgated under any of the foregoing Acts.
30.6 TAXES NYNEX shall be liable for and shall reimburse SUPPLIER only
for the following tax payments, including related charges, except for any
related charges that may be imposed as a result of SUPPLIER's failure to timely
file an accurate tax return required to be filed by it, with respect to
transactions under this AGREEMENT: Federal manufacturers and retailers excise
and New York state and local sales or use taxes, including any privilege or
excise taxes in the nature of sales or use taxes, as applicable. Such taxes
shall be billed to NYNEX as separate items on SUPPLIER's invoices, unless a
valid exemption certificate is furnished by NYNEX to SUPPLIER. NYNEX shall have
the right to have SUPPLIER cooperate with NYNEX in contesting with the imposing
jurisdiction, at NYNEX' expense, any such taxes that NYNEX deems are improperly
levied.
30.7 REGULATORY ASSISTANCE If requested by NYNEX or its AFFILIATE,
SUPPLIER shall, to the best of its ability, provide assistance by supplying an
expert witness, if required, with regard to regulatory matters in connection
with SYSTEMS, MATERIAL, SOFTWARE and/or SERVICES provided hereunder, provided
that NYNEX or its AFFILIATE shall pay SUPPLIER for such assistance at a
reasonable rate to be specified and shall reimburse SUPPLIER for all travel and
per-diem living expenses reasonably incurred by the expert witness.
30.8 SURVIVAL All Right and obligations hereunder granted or incurred
prior to and which by their nature would continue beyond the cancellation,
termination, or expiration of this AGREEMENT or any Order placed hereunder by
NYNEX shall survive such cancellation, termination, or expiration.
30.9 NON-WAIVER No course of dealing or failure of either party to
strictly enforce any term, right or condition of this AGREEMENT shall be
construed as a waiver of such term, right or condition.
30.10 NOTICES Any Notice or demand which under the terms of this
Agreement or under any statute shall be made by SUPPLIER or NYNEX in writing
which may take the form of facsimile, electronic transfer, overnight courier or
certified or registered mail, with return receipt
NOTICE: NOT FOR USE/DISCLOSURE OUTSIDE NYNEX EXCEPT BY WRITTEN AGREEMENT.
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CONTRACT NO. X134094D
OCTOBER 16,1996 PAGE 74 of 77
requested, addressed to the respective parties. A Notice shall be deemed
delivered upon record of transmission receipt or return receipt, as applicable,
or one (1) day after shipment via overnight courier or three (3) days after
mailing by certified or registered mail.
Notices to NYNEX shall be addressed to the following (unless this AGREEMENT
provides otherwise):
NYNEX
240 East 38th Street, 14th Floor
New York, New York 10016
Attn.: James Henderson
Sourcing Process Leader
Telecopier No.: 212-476-5245
with a copy to:
NYNEX
1095 Avenue of the Americas, 38th Floor
New York, New York 10016
Attn.: Legal Department
Telecopier No.: 212-840-1110
Notices to SUPPLIER shall be addressed to:
Next Level Communications
6153 State Farm Drive
Rohnert Park, CA 94928
Attn.: Steve Klein
Telephone No.: (707) 585-6550
Telecopier No.: (707) 588-1338
with a copy to:
General Instrument Corporation
8770 West Bryn Mawr Avenue
Chicago, IL 60631
Attn.: General Counsel
Telephone No.: (773) 695-1000
Telecopier No.: (773) 695-1021
30.11 FORCE MAJEURE Neither party shall be held responsible for any
delay or failure in performance of this AGREEMENT caused by fires, strikes,
embargoes, requirements imposed by government regulations, civil or military
authorities, acts of God, beyond the control of SUPPLIER or NYNEX and which
could not have been avoided through the application of reasonable foresight or
diligent effort, but excluding the effects of environmental factors identified
in Appendix A, SCOPE OF WORK, on the performance or durability of Systems,
Products, Material, Software or Services. If such contingency occurs, the party
delayed or unable to perform shall provide notice to the other party and if the
delaying causes continue for a period of fifteen (15) days, the party injured by
the other's inability to perform may elect to:
(a) terminate such order or part thereof as to MATERIAL and/or SOFTWARE
not already shipped or SERVICES not already performed;
(b) suspend such order for the duration of the delaying causes, buy or
sell elsewhere MATERIAL and/or SOFTWARE to be bought or sold hereunder
and deduct from any order commitment the
NOTICE. Not For Use/Disclosure outside NYNEX except by written agreement
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Contract No. X134094D
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quantity bought or sold or for which such commitments have been made
elsewhere; or
(c) resume performance under such order once the delaying cause ceases
with an option in the injured party to extend the delivery or
performance date up to the length of time the contingency endures.
Unless written notice is given no later than fifteen (15) days from when
the injured party is notified, (b) shall be deemed selected.
30.12 DISASTER RECOVERY If any SYSTEM or Component acquired hereunder is
rendered inoperative as a result of a natural or other disaster or emergency
(including major PRODUCT failure or breakdown and peak load conditions),
SUPPLIER will make all reasonable efforts to supply or help locate back-up or
replacement SYSTEMS, Components, and facilities for NYNEX's use, In such event,
SUPPLIER agrees to waive any delivery schedule priorities, to the extent
permitted by law, and to make the replacement SYSTEM or Component available from
the manufacturing facility currently producing such equipment or from inventory.
Subject to this Agreement, the price for any replacement PRODUCT provided by
SUPPLIER will be in compliance with this Agreement, plus shipment costs;
provided, however, that if the non-operation is due to the negligence or fault
of SUPPLIER, replacement equipment will be provided and delivered at no cost to
NYNEX. NYNEX shall retain the right to accept or reject any offer by SUPPLIER to
supply any emergency or back-up PRODUCT or other equipment or service.
30.13 RELEASES VOID Neither party shall require waivers or releases of
any personal rights from representatives of the other in connection with visits
to their respective premises and no such releases or waivers shall be pleaded by
SUPPLIER or NYNEX or its AFFILIATES in any action or proceeding.
30.14 SECTION HEADINGS The headings of the sections herein are inserted
for convenience only and are not intended to affect the meaning or
interpretation of this AGREEMENT.
ARTICLE 31
ALTERNATE DISPUTE RESOLUTION
31.1 REFERRAL Should any disagreement, dispute, disputed claim of
breach, nonperformance, or repudiation arising from, related to or connected
with this AGREEMENT or any of the terms or conditions hereof, or any
transactions hereunder ("Dispute"), arise between NYNEX and SUPPLIER either
during this AGREEMENT or after termination or expiration of this AGREEMENT,
either party may give to the other notice of the Dispute, specifically
referencing this provision and request resolution of the Dispute. At the
expiration of ten (10) business days, unless it shall have been settled, either
party may refer such Dispute to Alan Polansky, Director/Sourcing Process - NYNEX
and Chuck Seebock SUPPLIER for resolution. If within an additional ten (10)
business days such Dispute shall not have been settled, then either party may
refer it to Leonard J. Garrambone, Vice-President/Corporate Sourcing -NYNEX and
Charlie Dickson, CFO - SUPPLIER for resolution. The parties agree to exchange
relevant information and cooperate in good faith to resolve the Dispute under
this provision. If within an additional ten (10) business days, such dispute
shall not have been settled, the parties agree to resort to the dispute
mediation remedies set forth below. The parties
NOTICE: Not for use/disclosure outside NYNEX except by written agreement
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CONTRACT NO. X134094D
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will not be prohibited from seeking injunctive relief to preserve the status quo
while the mediation is pending.
31.2 MEDIATION A formal mediation procedure may be commenced by either
party under the then current Public Resources ("CPR") Model Procedure for
Mediation of Business Disputes by notice to CPR to select an experienced neutral
mediator and a proposed time and date for mediation. All mediators shall be
selected from the CPR Panel of Neutrals unless the parties mutually agree to a
difference neutral mediator. All mediator fees shall be equally shared by the
parties. Each party will pay its own costs and other expenses associated with
the mediation, except that the reasonable travel expenses, as outlined in the
NYNEX Travel Guidelines, incurred by the party, which is more distant from the
site of the mediation, shall be shared equally by SUPPLIER and NYNEX. The
parties shall participate in good faith in the mediation and if the parties
reach a resolution of the Dispute, it shall be reduced to writing and shall be
enforceable in accordance with its terms.
If the procedures set forth above do not result in a resolution of the
dispute satisfactory to both parties within thirty-one (31) calendar days of
the first notice to CPR to select a mediator, either party may give notice in
writing to the other party that the mediation procedure is terminated. Upon the
issuance of such notice, either party shall have the right to pursue such
remedies as may be available at law or in equity or under this Agreement.
ALL DISCUSSIONS AND DOCUMENTS PREPARED PURSUANT TO ANY ATTEMPT TO RESOLVE A
DISPUTE UNDER THIS PROVISION ARE CONFIDENTIAL AND FOR SETTLEMENT PURPOSES ONLY
AND SHALL NOT BE ADMITTED IN ANY COURT OR OTHER FORUM AS AN ADMISSION OR
OTHERWISE AGAINST A PARTY FOR ANY PURPOSE INCLUDING THE APPLICABILITY OF FEDERAL
AND STATE COURT RULES.]
31.3 INDEPENDENT OBLIGATION OF SUPPLIER TO CONTINUE PERFORMANCE Because
of the critical importance of the obligations undertaken by SUPPLIER hereunder
to the operations of NYNEX and the substantial expertise and manufacturing
capability and capacity (not otherwise possessed by NYNEX) which SUPPLIER has
represented it will utilize in connection with the fulfillment of its
obligations and the reliance of NYNEX on such expertise, capability and
capacity, SUPPLIER assumes an independent obligation to continue performance of
its obligations hereunder in all respects regardless of any dispute which may
arise between NYNEX and SUPPLIER in connection with any claims by SUPPLIER that
NYNEX has materially breached its obligations hereunder. Such independent
obligation shall continue for ninety (90) days from the date upon which NYNEX
receives written notice of such alleged breach from SUPPLIER. SUPPLIER
undertakes this independent obligation without prejudice to any rights or
remedies it may otherwise have in connection with any dispute between SUPPLIER
and NYNEX.
ARTICLE 32
ENTIRE AGREEMENT
This instrument, the Appendices and Schedules attached and the Order(s)
attached hereto, or hereafter issued under this Agreement, constitute and embody
the entire Agreement by and between the parties hereto and supersede all prior
oral or written agreements or understandings, if any, between them with respect
to the subject matter of this Agreement. In the event of a direct conflict
between a specific term or condition of this Agreement and a specific term or
condition in
NOTICE: Not for use/disclosure outside NYNEX except by written agreement
242721
<PAGE> 77
CONTRACT NO. X134094D
OCTOBER 16, 1996 PAGE 77 OF 77
an Order, issued and accepted by the parties, the specific term or condition in
the Order shall take precedence and control, but only for purposes of that
individual Order. All Orders placed by NYNEX shall be deemed to incorporate the
terms and conditions of this AGREEMENT as well as any supplemental terms and
conditions agreed to by the parties in writing. No provisions or data in
subordinated documents (such as shipping releases) or on any document
unilaterally originated by either party shall be incorporated in this AGREEMENT
unless the provisions or data merely supply information contemplated by this
AGREEMENT.
This AGREEMENT shall not be modified or amended except by a writing signed
by authorized representatives of both parties.
IN WITNESS WHEREOF, the parties have set their hand and seal intending to
be legally bound this 16th day of October 1996.
GENERAL INSTRUMENT CORPORATION TELESECTOR RESOURCES GROUP, INC.
OF DELAWARE (A NYNEX COMPANY)
By /S/ Richard S. Friedland By /S/ Richard A. Jalkut
------------------------- -------------------------
Typed Name Richard S. Friedland Typed Name
-------------------- --------------------
Title Chairman and CEO Title
---------------------- -----------------------
Date October 16, 1996 Date
---------------------- -----------------------
NEXT LEVEL COMMUNICATION
By /S/ Peter W. Keeler
------------------------
Typed Name Peter W. Keeler
-----------------
Title President
----------------------
Date October 16, 1996
----------------------
NOTICE: Not for use/disclosure outside NYNEX except by written agreement.
242721
<PAGE> 78
Agreement No. X-134094D
Amendment No. 1
Page 1 of 3
This Amendment No. 1 to Contract X-134094D dated October 6, 1996 ("Amendment")
is entered into between Telesector Resources Group, Inc. d/b/a Bell Atlantic
Network Services, a Delaware Corporation, having an office located at 240 East
38th Street, New York, New York 10016 (hereinafter "Bell Atlantic") on behalf of
itself and for the benefit of its Affiliates, and General Instrument Corporation
of Delaware, representing its financial interests in Next Level Communications
in Contract X-134094D, and Next Level Communications, a Delaware Limited
Partnership, having an office at 6085 State Farm Drive, Rohnert Park, CA 94928,
(hereinafter collectively referred to as "Supplier").
NOW THEREFORE, the parties agree as follows:
1 . SCOPE OF AMENDMENT
Under this Amendment, Bell Atlantic and Supplier agree to modify the dollar
amount of the Performance Bond or Irrevocable Letter of Credit and set SSU-2
hardware and functionality pricing.
2. PERFORMANCE BOND OR IRREVOCABLE LETTER OF CREDIT
Section 26.2 of the Agreement, entitled "Performance Bond or Irrevocable Letter
of Credit," is hereby deleted in its entirety and replaced with the following:
SUPPLIER shall obtain and maintain, during the terms of this Agreement or any
Order(s) issued pursuant to the Agreement and any extensions thereof, a
performance bond ("Bond") or Irrevocable Letter of Credit ("LC") in the penal
sum of Twenty Five Million Dollars ($25,000,000.00). SUPPLIER shall maintain the
Bond(s) or LC(s) according to the following schedule:
A) Upon completion of the infrastructure implementation to the level of
one hundred thousand (100,000) households passed, SUPPLIER shall
increase the Bond or LC to an amount of Fifty Million Dollars
($50,000,000).
A) Upon completion of the infrastructure implementation to the level of
one hundred and fifty thousand (150,000) households passed, SUPPLIER
shall increase the Bond or LC to an amount of Seventy Five Million
Dollars ($75,000,000).
The Bond or LC may be canceled in its entirety if, and only if the following
conditions have been satisfied: i) no default has occurred and no Performance
Compensation Payments have been assessed by Bell Atlantic against SUPPLIER; and
ii) Supplier provides proof satisfactory to Bell Atlantic, in the form of
financial statements, D&B ratings, and such other means identified by Bell
Atlantic in the Financial Accountability Requirement, that SUPPLIER's financial
ability and assets adequately back and provide sufficient security against any
further contingencies arising out of Article 19 hereof entitled REPORT RATE,
Article 21 hereof, entitled DEFAULT and Article 26 hereof, entitled INTELLECTUAL
PROPERTY - GENERAL OBLIGATIONS.
Under said Bond or LC, the Principal and the Surety(ies) shall be firmly bound
to Bell Atlantic in the foregoing penal sum and shall promptly pay Bell Atlantic
in accordance with and pursuant to Article 19 hereof, entitled REPORT RATE, or
Article 21 hereof, entitled DEFAULT or Article 26, entitled INTELLECTUAL
PROPERTY - GENERAL OBLIGATIONS or Article 31
<PAGE> 79
Agreement No. X-134094D
Amendment No. 1
Page 2 of 3
hereof, entitled ALTERNATE DISPUTE RESOLUTION, if it is determined, by the
Mediator under Article 31 or by the Supreme Court of the State of New York or
any United States District Court, that SUPPLIER has failed to perform or fulfill
any of the undertakings covenants, terms, conditions or requirements of this
Agreement or any extension or modification thereof; provided however, that any
penal sums assessed in accordance with the terms of the Agreement shall be, in
the first instance, the responsibility of General Instrument, acting as
Principle, and it shall be at General Instrument's initial discretion as to
whether such penal sums are paid to Bell Atlantic through its own assets or from
the Bond or LC; provided however that if such penal sums are not paid by General
Instrument within 90 days of their assessment, Bell Atlantic shall have the
right to directly claim against the Bond or LC and invoke its right to prompt
payment under the Bond or LC.
In the event that liabilities occur and damage sums are assessed, those sums
shall be limited only to the actual amounts arising out of the claim, and shall
not be construed as a forfeiture of the entire amount of the Bond or LC.
Furthermore, prior to any claim by Bell Atlantic against the Bond, the claim
must have been submitted to General Instrument and all due process including
those contained in Article 31 of the Agreement shall have been acted upon.
The Surety(ies) for said Bond shall be a major insurance corporation or other
major financial institution licensed to do business in the State of New York and
with a Bests Rating of A10 or better, whose principal assets are located in the
United States of America or shall appear on the Departments of Treasury's list
of approved sureties and must act within the limitations listed therein. The
commercial bank providing the Irrevocable Letter of Credit shall be chartered or
licensed by either the United States, or by New York State, shall be rated A- or
better by Standard & Poor's, and shall have capital in excess of one billion
dollars ($1,000,000,000.).
3. SSU HARDWARE AND FUNCTIONALITY
To ensure an economic, efficient and timely method of providing special
services, Next Level Communications has agreed to provide to Bell Atlantic SSU-2
hardware and functionality at a price equal to that of the current FXTIU.
4. OTHER TERMS UNCHANGED
All other terms and conditions of the Agreement shall remain unchanged.
5. ENTIRE AMENDMENT
This Amendment constitutes and embodies the entire agreement by and between the
parties hereto and supersede all prior oral or written agreements or
understandings, if any, between them with respect to the subject matter of this
Amendment.
<PAGE> 80
Agreement No. X-134094D
Amendment No. 1
Page 3 of 3
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed on the
date indicated.
NEXT LEVEL COMMUNICATIONS, LP TELESECTOR RESOURCES GROUP,
INC.
/s/ James T. Wandrey
- --------------------- ---------------------
Signature Signature
James T. Wandrey
- --------------------- ---------------------
Name Name
Sr. VP & CFO
- --------------------- ---------------------
Title Title
8/19/99
- --------------------- ---------------------
Date Date
GENERAL INSTRUMENT
CORPORATION
/s/ Richard C. Smith
- ---------------------
Signature
Richard C. Smith
- ---------------------
Name
Exec Vice President
- ---------------------
Title
8/19/99
- ---------------------
Date
<PAGE> 81
APPENDIX X: MODIFICATIONS TO
APPENDICES
This document supplements previously exchanged documentation; in the event of
conflict between the Terms of this document and previously exchanged
documentation, this document shall control and take precedence.
1. ATM & SONET
SUPPLIER specifically represents and warrants that all SYSTEMS,
PRODUCTS, MATERIAL, and SOFTWARE and to be supplied hereunder shall be fully
compatible with all ATM and SONET related SYSTEMS, PRODUCTS, MATERIAL, and
SOFTWARE and obtained by NYNEX and/or its AFFILIATES, irrespective of the
manufacturer of such aforementioned ATM and SONET related items. SUPPLIER shall
have the opportunity to review and comment upon NYNEX's and/or its AFFILIATES'
Sonet and ATM technical requirement specifications contained in current and
future NYNEX RFPs. SUPPLIER shall within ninety (90) days of notification by
NYNEX and/or its AFFILIATES of the manufacturer selected by NYNEX, verify, test
and perform such work as shall be necessary to ensure and guarantee that all
SYSTEMS, PRODUCTS, MATERIAL, and SOFTWARE furnished under this Agreement shall
be compatible with any and all ATM and SONET related SYSTEMS, PRODUCTS,
MATERIAL, and SOFTWARE of the manufacturer identified by NYNEX and/or its
AFFILIATES, SUPPLIER shall be responsible for any necessary changes to SYSTEMS,
PRODUCTS, MATERIAL, and SOFTWARE that are ATM or SONET related or supplied
hereunder due to inoperability resulting from a lack of compatibility. NYNEX
and/or its AFFILIATES shall use its best effort to assist SUPPLIER in its
efforts to secure the necessary cooperation from NYNEX's and/or its AFFILIATES'
ATM and SONET related suppliers, provided, however, it is understood and agreed
that NYNEX and/or its AFFILIATES shall act only as a mediator and to establish
priorities in reference to issues of inoperability between such SONET suppliers,
ATM suppliers and SUPPLIER hereunder. All SUPPLIER activity under this Article
shall be included in the [ * ] to NYNEX and/or its AFFILIATES.
2. SPECIAL SERVICES
SUPPLIER shall provide to NYNEX an economical, efficient and timely
method of providing special services as outlined in section 4 of the RFP and
Section 3 of the RRP. SUPPLIER'S special service solution shall not result in
any degradation to NYNEX's and/or its AFFILIATES' customers' existing service(s)
nor necessitate re-wiring of the such customers' internal premises. NYNEX and
SUPPLIER shall mutually agree upon a schedule which identifies the
service/functionality and the service delivery architecture which shall be
jointly developed by NYNEX and SUPPLIER. The costs for providing a special
service over the SUPPLIER's architecture shall not necessitate an increase in
the tariff pice for the service (as compared to current DLC/ODLC serving
architectures). NYNEX shall, if requested by SUPPLIER, assist SUPPLIER in the
identification of and the prioritizing of all special services as necessary.
NYNEX shall continue to hold formal meetings to address the
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
1
<PAGE> 82
APPENDIX X: MODIFICATIONS TO
APPENDICES
schedule, deployment and performance of all special services. NYNEX and SUPPLIER
shall work jointly to define the customer interface for all special services.
SUPPLIER and NYNEX and/or its AFFILIATES shall work on a joint task force to
investigate, establish and resolve, in a cost effective manner, issues including
those of technical and regulatory aspects and which are related to special
services. SUPPLIER and NYNEX acknowledge that the first action of such joint
task force is the determination of NYNEX's feature priority. As a result of the
special services task force, SUPPLIER commits to provide special services in
accordance with the "Next Level Communications Laboratory Trial 1.2 Feature
Content Special Services" and the "Table of Services Available with N/Level3",
stated below:
NEXT LEVEL COMMUNICATIONS
LABORATORY TRIAL 1.2 FEATURE CONTENT
SPECIAL SERVICES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
LAB. F.O.A. G.A.
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
BNU Pots ISDN Hybrid [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
BNU Pots Coin Hybrid [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANID:
- --------------------------------------------------------------------------------
Pots (Single) [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
Pots (Dual) [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
Coin [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
ISDN [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Sets: (a.k.a. PID)
- --------------------------------------------------------------------------------
Pots (Single) [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
Pots (Dual) [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
ISDN [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BNU/SSU-8 [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
BNU/SSU-16 [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BIU (single) [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
BIU (dual) [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(End of month convention used)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Channel
Unit/ GI/NLC F.O.
Service Description Code Supplier Lab A. G.A.
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Single Party SPOTS (2W Loop or GI/NLC [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------
</TABLE>
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of its
subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
2
<PAGE> 83
APPENDIX X: MODIFICATIONS TO
APPENDICES
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
Ground Start) Dual developing [ * ]
POTS PID Q4
1996
- --------------------------------------------------------------------------------------------
Coin Dial Tone Coin First ANID GI to develop 1Q [ * ] [ * ] [ * ]
- --------------------------------------------------------------------------------------------
2W UVG DID DPO SSU- Teltrend/NLC [ * ] [ * ] [ * ]
(Loop AUA5 developing
Reverse 6
Battery)
- --------------------------------------------------------------------------------------------
ISDN BRI Basic Rate ISDN SSU Teltrend/NLC [ * ] [ * ] [ * ]
developing
- --------------------------------------------------------------------------------------------
Derived Versus Alarm @ BNU/ GI/NLC POTS [ * ] [ * ] [ * ]
trademark by TTU interface will
Pulsenet alarm have alarm
service. Supports capability
Derived Channel
Multiplex Technology.
Inband signaling
plus 30Hz tone
- --------------------------------------------------------------------------------------------
Lottery New England SSU- Teltrend/AT&T [ * ] [ * ] [ * ]
Circuit lottery INC's UVDM AUA2 /NLC
linecard. Is a 32+
proprietary TCM in AUA1
10KHz-112KHz 58
similar to 56KHz
DDS
- --------------------------------------------------------------------------------------------
Lottery New York Lottery SSU- Teltrend/AT&T [ * ] [ * ] [ * ]
Circuit Seiscor's Data Over AUA2 /NLC
Voice Linecard. 32+
74KHz-200KHz FSK AUA1
58
- --------------------------------------------------------------------------------------------
DDS OCU 2,4,4,8,9,6,19,2,38,4,5 SSU- Teltrend/NLC [ * ] [ * ] [ * ]
Dataport 6,64 & switched AUA5
56Kbs 2
- --------------------------------------------------------------------------------------------
DDS DSO SSU- Teltrend/NLC [ * ] [ * ] [ * ]
Dataport AUA
34
- --------------------------------------------------------------------------------------------
DS1 GI/NLC to [ * ] [ * ] [ * ]
Develop Set &
USAM
- --------------------------------------------------------------------------------------------
2 Wire Non SSU- Teltrend/NLC [ * ] [ * ] [ * ]
Switched AUA
Special) 43
- --------------------------------------------------------------------------------------------
</TABLE>
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
2996 NYNEX Corporation, All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
3
<PAGE> 84
APPENDIX X: MODIFICATIONS TO
APPENDICES
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
4 Wire Non SSU- Teltrend/NLC [ * ] [ * ] [ * ]
Switched AUA
Special) 44
- --------------------------------------------------------------------------------------------
2w FXO SSU- Teltrend/NLC [ * ] [ * ] [ * ]
AUA
42
- --------------------------------------------------------------------------------------------
2W FXS SSU- Teltrend/NLC [ * ] [ * ] [ * ]
AUA
43
- --------------------------------------------------------------------------------------------
4W SSU- Teltrend/NLC [ * ] [ * ] [ * ]
(Switched AUA
Special 43
- --------------------------------------------------------------------------------------------
2W SSU- Teltrend/NLC [ * ] [ * ] [ * ]
RD/PLAR AUA
45
- --------------------------------------------------------------------------------------------
4W
RD/PLAR
- --------------------------------------------------------------------------------------------
ISND PRI GI/NLC to [ * ] [ * ] [ * ]
develop
SET/USAM
- --------------------------------------------------------------------------------------------
Direct Dual DID Card SSU- Teltrend [ * ] [ * ] [ * ]
Inward AUA Channel/NLC
(DID) 56
- --------------------------------------------------------------------------------------------
Switched 2W 56 (Datapath) SSU Teltrend [ * ] [ * ] [ * ]
56Kbs Interfaces to Nortern Channel/NLC
Telecom DMS 100
One Circuit/card
- --------------------------------------------------------------------------------------------
P-Phone EBS being evaluated
- --------------------------------------------------------------------------------------------
Pots/ISDN BNU-TIU e/w 5 GI/NLC [ * ] [ * ] [ * ]
Hybrid Pots & 1 ISDN
- --------------------------------------------------------------------------------------------
Pots/Coin BNU-TIU e/w 4 GI/NLC [ * ] [ * ] [ * ]
Hybrid Pots & 1 Coin
- --------------------------------------------------------------------------------------------
ANID, GI/NLC NPM1 GI/NLC [ * ] [ * ] [ * ]
Single
POTS/UVG
- --------------------------------------------------------------------------------------------
ANID, Dual GI/NLC NPM2 GI/NLC [ * ] [ * ] [ * ]
POTS/UVG
- --------------------------------------------------------------------------------------------
ANID, GI/NLC NBM1 GI/NLC [ * ] [ * ] [ * ]
Single iSDN
U BRI
- --------------------------------------------------------------------------------------------
ANID, GI/NLC NCM1 GI/NLC [ * ] [ * ] [ * ]
Single Coin
- --------------------------------------------------------------------------------------------
PID, Single GI/NLC PPM1 GI/NLC [ * ] [ * ] [ * ]
POTS/UVG
- --------------------------------------------------------------------------------------------
</TABLE>
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
4
<PAGE> 85
APPENDIX X: MODIFICATIONS TO
APPENDICES
<TABLE>
<CAPTION>
Channel Description Code CI/NLC Lab P.O.A. G.A.
Unit Supplier
Service
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PID, DUAL GI/NLC PPM2 GI/NLC [ * ] [ * ] [ * ]
POTS/UVG
- ----------------------------------------------------------------------------------------------
PID, ISDN GI/NLC PBM1 GI/NLC [ * ] [ * ] [ * ]
U BRI
- ----------------------------------------------------------------------------------------------
SSU - 8-16 Teltrend [ * ] [ * ] [ * ]
- ----------------------------------------------------------------------------------------------
PC ISDN ISDN-NIC PCBA [ * ] [ * ] [ * ]
Card
- ----------------------------------------------------------------------------------------------
PC Card 256 Kb/s PCMA [ * ] [ * ] [ * ]
Multirate
Adapter
- ----------------------------------------------------------------------------------------------
MPEG-2 [ * ] [ * ] [ * ]
Set-Top
(DET)
includes
NIM
- ----------------------------------------------------------------------------------------------
BIU Single RF Modem At BNU [ * ] [ * ] [ * ]
- ----------------------------------------------------------------------------------------------
BIU Dual RF Modem At BNU [ * ] [ * ] [ * ]
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
3. General System Document (GSD)
SUPPLIER shall furnish NYNEX, within fourteen (14) days of execution of
this AGREEMENT by both parties, a General System Document (GSD), which shall be
defined as an integrated system design specification that reflects all system
specifications which SUPPLIER has proposed to NYNEX throughout SUPPLIER's
proposal to NYNEX's LRFP and RFP, as well as respective addendums thereto. All
SUPPLIER activity under this Article shall be included in the [ * ]to NYNEX
and/or its AFFILIATES.
4. Documentation Repository
SUPPLIER and NYNEX shall jointly establish and maintain an electronic
document depository and communications mechanism between each other.
Furthermore; SUPPLIER and NYNEX shall each identify respective single points of
contact in furtherance of such electronic document depository and communications
mechanism. All SUPPLIER activity
Notice: Not for use or disclosure outside of the NYNEX Corporation or
any of its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
5
<PAGE> 86
APPENDIX X: MODIFICATIONS TO
APPENDICES
under this Article shall be included in the [ * ] to NYNEX and/or its
AFFILIATES.
5. Hi-Rise
NYNEX and/or its AFFILIATES and SUPPLIER shall continue to work toward an
economical and efficient method of delivering telephony and broadband services
in Hi-Rise environments where NYNEX and/or its affiliates have no access to
coaxial riser facilities. This method may or may not use the architecture
proposed in the RFP and RRP. SUPPLIER shall provide NYNEX and/or its AFFILIATES
a mutually agreed upon Hi-Rise solution at the prices stated in RRP worksheet 2
under the following conditions: that the cable characteristics of the twisted
pair meet the minimum industry specification. All alternatives shall be explored
jointly by NYNEX and/or its AFFILIATES and SUPPLIER using technically feasible
solutions available in the marketplace. SUPPLIER shall provide the mutually
agreed to Hi-Rise solution at price equivalent to or less than those stated in
the RRP worksheet 2 as follows:
- -----------------------------------------------------------
Total Telephony and Video 1 Million HHP'd - [ * ] = [ * ]
- -----------------------------------------------------------
@800,000 HHP'd Dense Urban and 200,000 HHP'd High
Rise
- --------------------------------------------------
SUPPLIER shall offer to NYNEX and/or its AFFILIATES both an active and passive
NT solution. The choice by NYNEX and/or its AFFILIATES between pursuing either
an active or passive NT solution shall be based upon the characteristics of the
wiring. All SUPPLIER activity under this Article shall be included in the [ * ]
to NYNEX and/or its AFFILIATES, unless wiring characteristics require an active
NT at a price that will be mutually negotiated.
6. Power
Supplier shall provide, at the prices included in this Agreement, a Remote Power
supply (RPS) to NYNEX and its AFFILIATES which complies with the technical
requirements and specifications of NYNEX and its AFFILIATES or exceeds those
requirements which shall be designed for use with SUPPLIER platform. SUPPLIER
may provide, upon acceptance by NYNEX and/or its AFFILIATES, a power system as
substitute to the one originally proposed which shall meet the requirements and
specifications of the RFP/RRP at the price quoted, as well as other options
which offer a cost per line, ONU or home passed which is equal to or less than
the costs of the originally proposed system, subject to acceptance of such
alternative solutions by NYNEX and/or its AFFILIATES through the joint task
force and in accordance with the terms for Change Order Management under this
Agreement. SUPPLIER
Notice: Not for use or disclosure outside of the NYNEX Corporation or
any of its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
6
<PAGE> 87
APPENDIX X: MODIFICATIONS TO
APPENDICES
further agrees to provide any such alternative power systems to NYNEX and/or its
AFFILIATES under the terms of this Agreement for lab evaluation and FOA.
SUPPLIER shall, at the request of NYNEX and/or its AFFILIATES, jointly work to
evaluate proposed and other alternative power product line manufacturers to
ensue compatibility with the SYSTEMS, PRODUCTS, MATERIALS, SOFTWARE, and
COMPONENTS of those alternative power product line manufacturers to the extent
indicated in the RFP/RRP specifications, and to the extend indicated in Article
12 (TR-909) requirements. SUPPLIES and NYNEX and/or its AFFILIATES agree that
compatible manufacturers may be substituted at the discretion of NYNEX and/or
its AFFILIATES under the terms for change order management under this Agreement,
and such substitution shall not increase either a) the prices of the power
system as provided by SUPPLIER in the RFP/RRP, or b) the cost for power as
contained in the RFP/RRP responses in the cost allocation worksheets. SUPPLIER
shall work with NYNEX and/or its AFFILIATES, as well as any third parties
mutually agreed upon identified by NYNEX and/or its AFFILIATES, to develop
alternative compatible power architectures for SUPPLIERS platform. SUPPLIER
further agrees that, if an alternative power architecture is chosen by NYNEX
and/or its AFFILIATES for a particular build, the power component shall not
increase the prices for SUPPLIERS platform. Batteries supplied by SUPPLIER as a
part of the remote power supplies (RPS) shall be based upon mutual agreement and
acceptance by NYNEX and/or its AFFILIATES. The RPS furnished by SUPPLIER shall
include all subsystems required to meet the specifications outlined in the
original RFP.
SUPPLIER shall work with NYNEX and/or its AFFILIATES to provide RPS ancillary
products or services that may be required to meet a variety of field conditions.
This shall include, but not be limited to, pole mounting apparatus and
underground battery burial compartments. SUPPLIER shall provide to NYNEX and/or
its AFFILIATES adequate copies of the software needed for remote interfacing
with the RPS, SUPPLIER shall provide to NYNEX a fully functional RPS (either
[ * ] or [ * ]) for use in NYNEX's lab simulation. SUPPLIER and its RPS
supplier(s) shall provide setup and check-out assistance to NYNEX personnel on
the RPS at the NYNEX selected lab. Should NYNEX decide to use the proposed [ * ]
RPS, SUPPLIER shall make [ * ] and [ * ] style power supply cabinets available
for locations requiring more than [ * ]. Furthermore, power specifications of,
but not limited to, the BDTs, BNUs and active NIDs shall not deviate from
specifications previously presented to NYNEX. All SUPPLIER activity under this
Article shall be included in the [ * ] to NYNEX and/or its AFFILIATES.
7. Laboratory
During the Laboratory evaluation, SUPPLIER shall provide NYNEX with full
test documentation, results, third party testing methodology, and all pertinent
compliance information. Detailed schedules shall be provided by SUPPLIER to
NYNEX for all new equipment, equipment changes, and system configurations,
including but not limited to,
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of its
subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
7
<PAGE> 88
APPENDIX X:
MODIFICATIONS TO APPENDICES
software, hardware, functionality, methods and procedures and documentation.
These schedules shall include dates for pre-production, laboratory, production,
and general availability versions. All software upgrades, hardware upgrades and
system upgrades shall be made available by SUPPLIER for testing at a designated
NYNEX location with suitable lead-time to insure functionality prior to release
into the NYNEX network. SUPPLIER shall have personnel on-site for a mutually
agreeable specified time. If directed by NYNEX, SUPPLIER shall perform the
installation and pre-packaging of the laboratory related equipment at no cost to
NYNEX. SUPPLIER shall furnish NYNEX training for the laboratory personnel and
associated documentation. SUPPLIER shall provide 3 laboratory systems for
component, pair-wise, and integration testing. The respective systems are for
OSP & Telephony, VSP integration testbed and a transportable. Supplier shall
work to mutually define the configuration and functionality of the portable test
unit.
During the term of the lab evaluation, all equipment, Software, and
materials provided by SUPPLIER to NYNEX shall remain SUPPLIER property and title
will not pass to NYNEX and/or its AFFILIATES. The equipment, Software, and
materials provided by SUPPLIER during the course of the evaluation period may be
pre-production, prototype, or experimental in nature. Since title resides with
SUPPLIER at all times, no warranties, expressed or implied, exist for trial
equipment. During the course of the evaluation, NYNEX shall be responsible to
insure that: a) access to SUPPLIER equipment is restricted to its employees or
contractors who have need to access the equipment, b) NYNEX will take reasonable
precautions to protect SUPPLIER equipment in its facility from access by other
suppliers or personnel not employed by NYNEX, and c) NYNEX provides the same
degree of security and protection to SUPPLIER equipment as it does its own
equipment while in NYNEX possession. NYNEX agrees that NYNEX and its employees
shall not directly, in reference to SUPPLIER equipment, Software and materials
provided to NYNEX during the course of the evaluation, (i) sell, lease,
sublicense or otherwise transfer, and furthermore, shall not (ii) decompile,
dissemble, or otherwise analyze for reverse engineering purposes, including all
trade secrets and confidential information therein. SUPPLIER shall periodically
inform NYNEX of new enhancements, features, or product levels available for
evaluation and, furthermore, shall request from NYNEX permission to perform any
necessary upgrades or changes. NYNEX shall cooperate with SUPPLIER in scheduling
and facilitating such activities. NYNEX shall assume responsibility for any
damages, thefts, or other losses while SUPPLIER equipment is in their facility
during the evaluation period. SUPPLIER shall provide adequate on-site, as well
as remote (telephone "hotline") technical support, for the evaluation period.
SUPPLIER shall, upon request to NYNEX, be provided reasonable access to the lab
and its equipment, and a dial-in modem line may be provided, upon mutual
agreement, for remote diagnostic and trouble shooting support directly into
SUPPLIER equipment. During the evaluation period, all Software License Programs,
as well as third party licenses, are offered on loan, with no grant of license.
NYNEX may not adapt, modify, copy or convert any Software License Programs or
sub-license programs at any time. NYNEX shall install and use Software License
Programs only on those workstations and operating systems provided by SUPPLIERS
or identified in SUPPLIER specifications and such Software License Programs
shall be operated by NYNEX with reasonable network security from external
access. Upon expiration of the evaluation period, all Software License
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
8
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APPENDIX X: MODIFICATIONS TO APPENDICES
Programs shall promptly be returned intact and in their original format, with
all records or copies deleted by NYNEX from NYNEX databases. Property loaned to
NYNEX by SUPPLIER under this AGREEMENT shall be returned to SUPPLIER within ten
(10) days of expiration of the Evaluation Period and termination of the Lab
Evaluation. Property shall be returned in its original carton and packaging, or
in carton and packaging provided by or specified by SUPPLIER. Either party to
this AGREEMENT may, with thirty (30) days written notice, terminate the Lab
Evaluation without obligation or penalty, provided the terms of this AGREEMENT
are fulfilled. All SUPPLIER activity under this Article shall be included in the
[ * ] to NYNEX and/or its AFFILIATES.
8. Training
SUPPLIER shall furnish three (3) training systems to NYNEX. SUPPLIER shall
train thirty (30) NYNEX trainers. Each of these trainers shall be trained to
teach all four (4) parts of SUPPLIER's complete training package (estimated to
be a seven to ten day training effort). Each trainer trained shall be Certified
by SUPPLIER. Furthermore, SUPPLIER agrees that additional personnel of NYNEX
and/or its AFFILIATES shall have the opportunity to attend the thirty (30) two
week "train-the-trainer" classes for the thirty (30) identified trainers at no
cost to NYNEX and/or its AFFILIATES. The number of personnel of NYNEX and/or its
AFFILIATES to attend each class is at NYNEX's and/or its AFFILIATES' discretion.
NYNEX understands that SUPPLIER will not guarantee or supply any Certification
for those additional NYNEX and/or its AFFILIATES personnel or the trainer in a
session if: a) an individual attends for less than the entire
"train-the-trainer" course (SUPPLIER will not track or speak for their
competence) or if: b) more than nine individuals are designated by NYNEX and/or
its AFFILIATES to attend the "train-the-trainer" class. NYNEX shall receive from
SUPPLIER a minimum of thirty (30) original sets of documentation for the NYNEX
trainers and NYNEX shall have unlimited rights to duplicate such documentation.
The additional personnel that attend the "train-the-trainer" class shall each
receive a complete set of original training documentation. SUPPLIER shall train
fifty (50) people, to be designated by NYNEX, for the FOA within the areas of
engineering and operations and shall also supply corresponding training
documentation for each trainee. SUPPLIER shall furnish training for the
laboratory personnel along with associated training documentation. SUPPLIER
shall hire one additional "floating" trainer to act at the discretion of NYNEX
and/or its AFFILIATES. If NYNEX and/or its AFFILIATES identify or require
additional training, up to and beyond what was negotiated, SUPPLIER shall adhere
to the following guidelines:
A) Hire additional personnel for training to meet NYNEX's and/or its
AFFILIATES' additional requirements;
B) Submit travel and expense costs to NYNEX and/or its AFFILIATES for up to,
but not exceeding, thirty (30) trips for which NYNEX and/or its AFFILIATES
shall reimburse SUPPLIER; and
C) SUPPLIER shall prorate these costs.
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
9
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APPENDIX X: MODIFICATIONS TO
APPENDICES
NYNEX and SUPPLIER shall, at the appropriate time, jointly produce and fully
develop the remaining training details.
All SUPPLIER activity under this Article shall be included in the [ * ] to NYNEX
and/or its AFFILIATES up to the amount negotiated.
9. NIM
SUPPLIER shall provide interface specifications sufficient for CPE vendors,
identified by NYNEX, to design and build CPE compatible with SUPPLIER system and
having the capability to work with SUPPLIER system on the NYNEX network. Within
thirty (30) days following SUPPLIER execution of this AGREEMENT, formal
specifications shall be made available by SUPPLIER, upon request, to such CPE
vendors. Any subsequent changes applicable to SUPPLIER specifications shall be
incorporated by SUPPLIER into the specifications and SUPPLIER shall retransmit
the then modified specifications to previously requesting CPE vendors. Due to
SUPPLIER integration effort with NYNEX identified CPE vendors, SUPPLIER AND
NYNEX shall mutually agree upon a reasonable license fee/royalty that is based
on the rates commercially available in the market place. SUPPLIER shall provide
timely technical assistance, which shall consist of the integration effort and
which would be provided under the license fee to such CPE vendors, as would be
helpful in the design and manufacture of CPE.
10. OSS
SUPPLIER shall provide to NYNEX, if so directed by NYNEX, a DCE/RPC
interface from the EMS to the VIP Gateway, for a cost to NYNEX which shall be
mutually agreed upon and not to exceed [ * ].
11. Asset Inventory Management
SUPPLIER shall, during the First Office Application (FOA), maintain
sufficient provisions of spares so as to supply NYNEX for unforeseen failures
within twenty four (24) hours from the request of NYNEX SUPPLIER agrees that,
during such FOA period, it shall maintain at [ * ] spare levels all inventory
supplied to NYNEX. Furthermore, within ninety (90) days of the completion of
negotiations between SUPPLIER and NYNEX, SUPPLIER and NYNEX shall mutually agree
upon an appropriate level of spares so as to allow NYNEX a reasonable response,
that being within twenty four (24) hours, to an unforeseen service related
failure of the NYNEX SDV network deployed at any given time. NYNEX reserves the
right to review and recommend adjustments to the level of appropriate spares at
any point in time, based on the actual performance of the NYNEX SDV network. All
SUPPLIER activity under this Article shall be included in the [ * ] to NYNEX
and/or its AFFILIATES.
Notice: Not for use or disclosure outside of the NYNEX Corporation or
any of its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
10
<PAGE> 91
APPENDIX X: MODIFICATIONS TO
APPENDICES
12. Supplier Key Personnel
Rick Freidland, or his successor(s), shall be the designated individual
appointed by SUPPLIER to possess full oversight responsibilities as to SUPPLIER
for purposes of this AGREEMENT.
Bill Weeks, or his successor(s) in that position or responsibility, shall
be [ * ] to the project hereunder this AGREEMENT.
SUPPLIER, subject to NYNEX's right of review, approval and change, shall
appoint for purposes of this AGREEMENT, a Vice-President of Technology, an
Overall Program Director, a New England District Director and a New York
District Director.
All SUPPLIER activity under this Article shall be included in the [ * ] per HHP
cost structure to NYNEX and/or its AFFILIATES.
13. Schedule & Deployment
The terms and conditions of the contract are scaleable up to 5 million
households passed (HHP).
SUPPLIER and NYNEX shall jointly establish a mutually agreeable 12 month rolling
and a multi-year forecast window for the implementation of the backbone.
NYNEX and SUPPLIER agree to the following two options for deployment of the
infrastructure hereunder.
Option 1: A four year time frame to deploy the infrastructure with that time
frame commencing at the acceptance of the FOA telephony.
The project is defined to be:
Infrastructure of 800,000 HHP
832,000 pots lines over the life (12 years)
60,160 video lines over the life (12 years)
Year-to-year Infrastructure deployment:
1997 numbers include FOA numbers.
1997: 50,000 HHP with 10% flexibility
1998: 250,000 HHP with 10% flexibility
1999: 250,000 HHP with 10% flexibility
2000: 250,000 HHP
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of its
subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
11
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APPENDIX X: MODIFICATIONS TO APPENDICES
Telephony Lines:
1997: 3,000 lines with 10% flexibility
1998: 54,400 lines with 10% flexibility
1999: 102,200 lines with 10% flexibility
2000: 88,000 lines with 10% flexibility
2001: 73,500 lines with 10% flexibility
2002: 73,500 lines with 10% flexibility
2003: 73,500 lines with 10% flexibility
2004: 73,500 lines with 10% flexibility
2005: 73,500 lines with 10% flexibility
2006: 73,500 lines with 10% flexibility
2007: 73,500 lines with 10% flexibility
2008: 56,200 lines with 10% flexibility
2009: 14,500 lines
Video Lines:
1997: 0 lines
1998: 1,680 lines with 10% flexibility
1999: 4,880 lines with 10% flexibility
2000: 7,440 lines with 10% flexibility
2001: 5,520 lines with 10% flexibility
2002: 6,480 lines with 10% flexibility
2003: 4,880 lines with 10% flexibility
2004: 6,480 lines with 10% flexibility
2005: 4,880 lines with 10% flexibility
2006: 4,880 lines with 10% flexibility
2007: 4,880 lines with 10% flexibility
2008: 4,880 lines with 10% flexibility
2009: 3,280 lines
Option 2: A five year time frame to deploy the infrastructure with that time
frame commencing at the acceptance of the FOA telephony.
The project is defined to be:
Infrastructure of 800,000 HHP
893,000 pots lines over the life (12 years)
Year-to-year Infrastructure deployment:
1997: 30,000 HHP (numbers include FOA numbers)
1998: 100,000 HHP
1999: 250,000 HHP
2000: 250,000 HHP
2001: 170,000 HHP
Notice: Note for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
12
<PAGE> 93
APPENDIX X: MODIFICATIONS TO
APPENDICES
TELEPHONE LINES:
1997: 20,000 lines
1998: 80,000 lines
1999: 200,000 lines
2000: 200,000 lines
2001: 200,000 lines
2002: 50,000 lines
2003: 50,000 lines
2004: 50,000 lines
2005: 25,000 lines
2006: 25,000 lines
2007: 20,000 lines
2008: 13,000 lines
2009: 10,000 lines
On July 1, 1997, SUPPLER shall request a response from NYNEX as to which of
the above options NYNEX shall pursue.
All SUPPLIER activity under this Article shall be included in the [ * ] to NYNEX
and/or its AFFILIATES.
14. Options.
SUPPLIER shall submit a proposal to NYNEX in reference to the purchase of
the OSP Design Tool by NYNEX. NYNEX shall make a decision on whether to
purchase the OSP Design Tool after the ability to evaluate several
alternatives. Such an evaluation and purchase is purely an option to NYNEX and
no obligation exists on NYNEX to execute that option to any degree.
SUPPLIER and NYNEX shall negotiate a mutual agreeable business arrangement
regarding NYNEX's Level 1 Gateway.
15. VSP Architecture & Control
15.1 Requirements and Architecture Documents
The documents listed below are the complete set of requirements,
architecture and specification documents relevant to the NYNEX Video Services
Platform for Release 1. These supersede any VSP related documents which may
have previously been delivered to SUPPLIER, or may have been referred to in the
Letter of Intent.
1. VDT Service Requirements, Version 2.1 (Annotated) TM95-0027, March
1996
2. VSP System Requirement Specifications, Version 1.4, TM95-0034, October
13, 1995
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
13
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APPENDIX X: MODIFICATIONS TO
APPENDICES
3. Addendum to VSP SRS v1.4, TM96-0054, Version 1.0 - Draft, June 6, 1996
4. VSP Access Subsystem Controller (ASC) Generic External Interface and
Core to SDV Implementation Document, Version 1.0, TM96-0049, May 15,
1996
5. VSP System Design Specifications for SDV Based Platforms, Version 2.1
- Draft, TM95-076, October 2, 1996
6. Full Service Network High Speed Data Requirements, Version 1.0,
January 1996
7. BSP System Requirements Specification, Version 1.7 - Draft, TM96-0066,
August 1, 1996
Any changes to these requirements shall be communicated to SUPPLIER by NYNEX
through appropriate updates to these documents, using the change management
process indicated in this AGREEMENT. SUPPLIER has indicated in writing that
SUPPLIER system is in compliance with these documents except as indicated in a
letter (contained in Appendix H) dated October 7, 1996 from Matthew Nguyen of
SUPPLIER to Christopher J. Carey NYNEX.
15.2 Schedule for Software Development by SUPPLIER
The following schedule defines SUPPLIER's delivery obligations for
developing the Access Specific Part of the Access Subsystem Controller (ASC).
This schedule leads to the ASC being available, for QA & integration testing,
seven months after the development starts.
<TABLE>
<CAPTION>
============================================================================================
ITEM PROJECT PLAN ASSUMPTION RESPONSIBILITY DUE DATE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Approval of GI/NLC software development NYNEX start
project
- --------------------------------------------------------------------------------------------
2 Agree on internal (core to GI/SDV Message NYNEX & start + 1 month
set) interfaces TM95-0049 v2.0 GI/NLC
(modification of current document v1.0)
- --------------------------------------------------------------------------------------------
3 GI/SDV Broadcast and Interactive component GI/NLC start + 6 months
available for ASC Component Development
Testing
- --------------------------------------------------------------------------------------------
4 Test Plans for the GI/SDV component delivered GI/NLC start + 6 months
- --------------------------------------------------------------------------------------------
5 Design Specification for the GI/SDV component GI/NLC start + 6 months
delivered
- --------------------------------------------------------------------------------------------
6 GI on site, at the Work Location specified in GI 7th month
testing section of SOW, during ASC Component
Development Testing
- --------------------------------------------------------------------------------------------
7 ASC available for QA & integration with rest NYNEX start + 7 months
of VSP
============================================================================================
</TABLE>
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of its
subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
14
<PAGE> 95
APPENDIX X:
MODIFICATIONS TO APPENDICES
15.3. Plan to Address Bandwidth Limitations of BDT
SUPPLIER and NYNEX acknowledge that the current design of SUPPLIER
system specifies two OC-12c interfaces at the HDT for Broadcast Services and one
OC-12c interface for Interactive Services as well as that NYNEX marketing
requirements (as indicated in the RFP and RRP) exceed these capacities. SUPPLIER
shall pursue and propose to NYNEX viable cost effective capacity upgrade
strategies that shall, at a minimum, provide one additional OC-12c interface for
NYNEX Broadband Services. This upgrade on the part of SUPPLIER shall be
accomplished without excessive down time for existing system retrofits
(backwards compatibility). The cost to NYNEX for this additional capacity shall
not exceed the cost for the initial OC-12c capability on a per bandwidth unit
basis. The upgrade requirements, specifications and costs shall be negotiated
between SUPPLIER and NYNEX within the parameters of the change of scope section
of this AGREEMENT. SUPPLIER shall provide NYNEX, by March 1, 1997, a proposal
outlining the technical approach to such capacity upgrade, the implications on
service to perform the upgrade, and budgetary pricing for development. SUPPLIER
shall simultaneously provide to NYNEX a development schedule with an intent of a
trial unit being available by [ * ].
15.4. Independence of Telephony and Video Engineering Guidelines
SUPPLIER asserts that if NYNEX chooses to design a telephony first
network, there will be no re-engineering necessary to incorporate video at a
future date as SUPPLIER system shall be video capable.
ALL SUPPLIER activity under this Article shall be included in the [ * ] to NYNEX
and/or its AFFILIATES.
16. EMS
The EMS cost to NYNEX shall be [ * ] for one million households passed
(HHP). NYNEX shall pay a fixed incremental portion of this for every BHDT
deployed. Upon attaining the [ * ] threshold, this cost shall be removed from
the BHDT cost. Beyond one million HHP, SUPPLIER shall grant a perpetual RTU to
NYNEX and/or its AFFILIATES without limitation or restriction to quantity of
HHP. This is a single fee of [ * ]. This fee shall also entitle NYNEX to all
upgrade and new generic releases for the life of this AGREEMENT.
17. Travel & Expenses
NYNEX's and/or its AFFILIATES' travel and expense guidelines may apply,
at the discretion of NYNEX and/or its AFFILIATES, to SUPPLIER personnel during
and only for
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
15
<PAGE> 96
APPENDIX X: MODIFICATIONS TO
APPENDICES
their active support this AGREEMENT. Furthermore, SUPPLIER personnel shall be
required, at the discretion of NYNEX and/or its AFFILIATES, to complete and
submit a written report of such travels and expenses, in a mode and deliverable
to a location, as indicated by and acceptable to NYNEX and/or its AFFILIATES.
SUPPLIER shall not disclose any NYNEX proprietary information to which SUPPLIER
gains knowledge of within its compliance with this Article.
18. Payment for termination for convenience
In the event of termination for convenience by NYNEX, NYNEX shall purchase
and SUPPLIER shall furnish an equivalent number of telephony cards so as to
outfit/service the respective HHP infrastructure that was complete at the time
of termination and not yet equipped for telephony service.
For the period of October 17, 1996 through February 1, 1997, NYNEX shall be
limited, in accordance with Article 7, Section 7.2 (entitled Termination for
Convenience) of this AGREEMENT to a maximum of [ * ] for Orders placed for the
FOA Project and for any other obligation or liability arising out of this
AGREEMENT. SUPPLIER shall not be liable to make delivery of any Orders placed by
NYNEX in excess of [ * ] until such time as this limit has been removed or
amended by NYNEX and SUPPLIER and NYNEX have established a mutually agreeable
twelve (12) month rolling and a multi-year forecast window for the
implementation of the backbone.
All SUPPLIER activity under this Article shall be included in the [ * ] to NYNEX
and/or its AFFILIATES.
19. Material & Apparatus
SUPPLIER shall include third party lab testing to Bellcore Specifications
for ONU cabinets including certification to: TA-NWT-000487, Generic Requirements
for Electronic Equipment Cabinets and GR-1089-CORE, Electronmagnetic
Compatibility and Electrical Safety - Generic Criteria for Network
Telecommunication Equipment, Section 3 Electromagnetic Interference (EMI). All
SUPPLIER activity under this Article shall be included in the [ * ] to NYNEX
and/or its AFFILIATES.
20. Software Related Documentation
In addition to what is also stated within this AGREEMENT, related
documentation shall mean DOCUMENTATION as to SOFTWARE hereunder this AGREEMENT
pertaining to, but not limited to, the manufacturer, type/model, configuration
and engineering change level of the specific development processor used to
code/develop and compile/interpret the
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
16
<PAGE> 97
APPENDIX X: MODIFICATIONS TO
APPENDICES
source code. Additionally all host/server/workstation environment information
shall include, but not be limited to, specific operating system
versions/releases, all corrective service applied, all system
configurations/generations and parameters/information, all compiler information
and specific parameters used at the time of source code development and
subsequent object code generation. Furthermore, all such information shall
include relevant file management/relational database management systems and all
other application programs, application program modules, LOADABLE MODULES,
OBJECT CODE, DLLs' and file management systems that the source code and
subsequent object code reference and link/bind in order to produce the
executable code delivered to NYNEX and/or its AFFILIATES. All SUPPLIER activity
under this Article shall be included in the [ * ] to NYNEX and/or its
AFFILIATES.
21. Source Code
OBJECT CODE/DYNAMIC LINK LIBRARIES (DLLs') shall mean a computer program in
the form of machine language that has been generated as the output of processing
SOURCE CODE through a compiler/interpreter transforming the SOURCE CODE
instructions into lower level machine language instructions suitable for
execution when all internal references have been resolved relative to all file
management/relational database pointers and all control system/operating
system/network management/requisite application program pointers. A LOADABLE
MODULE shall mean output of a process that has input OBJECT CODE into a linking/
binding process which has resolved/established all internal pointers such that
the output code, once loaded into a system, can be executed without further
processing. All SUPPLIER activity under this Article shall be included in the
[ * ] to NYNEX and/or its AFFILIATES.
22. Custom Development or Modification
In the event NYNEX and/or its AFFILIATES submits to the SUPPLIER a
specification for custom development or for changes in existing SOFTWARE,
SUPPLIER shall provide, upon request from NYNEX and/or its AFFILIATES, in a
timely and appropriate manner and within a format mutually agreed upon and
acceptable to NYNEX and/or its AFFILIATES or its designated third party, the
interface specification to relevant SUPPLIER furnished systems. If applicable,
SUPPLIER and NYNEX shall negotiate and mutually agree upon appropriate license
fees or royalties. SUPPLIER shall provide interface information related to those
interfaces to NYNEX systems or other network elements operating with and to the
SOFTWARE in a form such that NYNEX or a NYNEX designated third party shall be
able to design and code such custom development or changes. Such information
shall include, at a minimum, file layouts, message codes, processing flows,
alarm criteria/error handling routines and all relevant DOCUMENTATION. All
custom development efforts or modifications to existing SUPPLIER SOFTWARE,
requested by NYNEX and/or its
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of its
subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
17
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APPENDIX X: MODIFICATIONS TO
APPENDICES
AFFILIATES and performed by SUPPLIER, shall be priced by SUPPLIER in accordance
with the pricing guidelines established by this AGREEMENT and shall be
submitted with a detailed project implementation plan for the custom
development/modification. The project plan shall include, at a minimum, the
identification of all personnel to be assigned to the project, their specific
functions relative to the project, their resumes, and a complete cost rollup of
each project members' costs within an appropriate and reasonable time interval
(day/week/month/year) period and such shall be a reimbursable expense to the
project. NYNEX reserves the right to approve all such project plans and costs.
NYNEX and SUPPLIER shall jointly review and agree to any proposed staff
assigned to such projects. SUPPLIER agrees to make a best effort to
accommodate NYNEX as to its requested response date for any and all such
project plans and, if applicable, implementation/deliverable dates. SUPPLIER
shall fully cooperate and support the testing and integration of all such
custom developments/modifications even if done by a third party in order to
achieve the objectives of NYNEX and/or its AFFILIATES in undertaking such
custom development/modification project(s). Any costs associated with required
changes to SUPPLIER SOFTWARE and SUPPLIER provided system/electronic interfaces
which were precipitated by omissions to the interface specifications provided
by SUPPLIER, and subsequently used to cost out the project, shall be borne by
SUPPLIER. SUPPLIER agrees that once such a project is undertaken by NYNEX
and/or its AFFILIATES to implement such custom development/modification, any
interface specifications and subsequent enablement of such an interface shall
not be altered by SUPPLIER unless specifically approved in writing by NYNEX.
23. Illicit Code
SUPPLIER shall possess and institute an auditable quality control and
inspection procedure in order to verify that all machine readable medium is free
of ILLICIT CODE prior to being used to transfer code to NYNEX and/or its
AFFILIATES. In addition, SUPPLIER shall possess and institute a secure process
to assure that all code transmitted to and received by NYNEX and/or its
AFFILIATES via EDI methods is free of ILLICIT CODE. All SUPPLIER activity under
this Article shall be included in the [ * ] to NYNEX and/or its AFFILIATES
24. ASC Pricing
SUPPLIER and NYNEX shall jointly develop the access interface portion of
the Access System Controller (ASC) subject to acceptance by SUPPLIER of the
NYNEX specification and a mutually agreed upon scope of work. Such joint
development by SUPPLIER and NYNEX shall be governed by the following terms:
A.) SUPPLIER licensed product or NYNEX licensed product with grant back
license to SUPPLIER:
Notice: Not for use or disclosure outside of the NYNEX Corporation or
any of its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
18
<PAGE> 99
APPENDIX X: MODIFICATIONS TO
APPENDICES
A one-time Non-Recurring Engineering fee (NRE) of [ * ] payable by NYNEX to
SUPPLIER, upon NYNEX'S acceptance of the scope of work and issuance by NYNEX of
an Order and either, at the option of NYNEX, a payment by NYNEX to SUPPLIER of
an unlimited license fee of [ * ] . For licenses required by NYNEX and/or its
AFFILIATES beyond one million HHP, a fee of [ * ] shall be payable by NYNEX
and/or its AFFILIATES to SUPPLIER and shall entitle NYNEX and/or its AFFILIATES
to a perpetual and unlimited use license for ASC. The warranty provided by
SUPPLIER to NYNEX and/or its AFFILIATES shall be for a term of [ * ] as provided
under Article 13 of this AGREEMENT.
B.) NYNEX owned license (Work made for hire)
A Non-Recurring Engineering fee (NRE) of [ * ] shall be paid by NYNEX to
SUPPLIER upon acceptance by NYNEX of the scope of work and issuance of an Order.
Upon acceptance by NYNEX of Software hereunder, NYNEX shall pay to SUPPLIER a
lump sum fee of [ * ] in exchange for which SUPPLIER shall transfer to NYNEX
license, title and ownership of said Software and all rights therein, including
all related Source Code and technical documentation. Upon transfer of license,
title and ownership to Software, all obligations of warranty and technical
support by SUPPLIER under Article 13, section 13.2 of this AGREEMENT shall be
deemed fulfilled. SUPPLIER shall in no way be prevented or precluded in its
subsequent development of similar or comparable or functionally equivalent
interfaces based upon published or recognized industry standards as may be
contained in the ASC.
25. Future Features Development Payment Methodology
SUPPLIER shall price future changes in scope of work (custom, feature,
enhancements to SOFTWARE) to NYNEX and/or its AFFILIATES as follows:
A.) A one-time payment upon acceptance by NYNEX and/or its AFFILIATES if total
cost for the scope of work is less than [ * ].
B.) If total cost for the scope of work is [ * ] or greater, a price mutually
agreed upon by SUPPLIER and NYNEX and/or its AFFILIATES shall be allocated on a
per BDT basis. The price allocated shall be based upon the total cost of the
number of BDTs committed in the [ * ] passed (HHP) or one thousand (1000) BDTs,
NYNEX agrees that, depending on the timing involved, this allocation shall
include both BDTs installed and those remaining within the commitment.
C.) SUPPLIER shall offer NYNEX a one-time unlimited perpetual license beyond
[ * ] passed (HHP).
Notice: Not for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
2996 NYNEX Corporation. All rights reserved.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
19
<PAGE> 100
APPENDIX X: MODIFICATIONS TO APPENDICES
In the event NYNEX elects to own license and title to a SUPPLIER developed
Software product as work made for hire, payment to SUPPLIER by NYNEX shall be
required upon NYNEX acceptance of said Software. SUPPLIER and NYNEX shall have
the ability to negotiate interim payments, such as, but not limited to,
progressive payments, in the event the work effort is a.) of a large volume,
and b.) over an extended development and test period.
SUPPLIER and NYNEX agree to negotiate any and all reasonable payment
methodology so as to provide NYNEX a "pay as you go" method over the project
term within the restriction that such a methodology shall have the ability to
be tracked by SUPPLIER's customer support database for warranty, possesses the
ability to be tied to an identifiable "trigger" and meets the requirements of
both SUPPLIER and NYNEX and/or its AFFILIATES for purchase order/invoice
administration.
26. ONU Production
General Instrument will work with NYNEX to develop a plan to address this issue
that is satisfactory to NYNEX.
27. Methods & Procedures
General Instrument will work with NYNEX to develop a plan to address this issue
that is satisfactory to NYNEX.
28. Engineering & Design
General Instrument will work with NYNEX to develop a plan to address this issue
that is satisfactory to NYNEX.
29. Engineering Guidelines
General Instrument will work with NYNEX to develop a plan to address this issue
that is satisfactory to NYNEX.
30. FOA Schedule & Delivery
General Instrument will work with NYNEX to develop a plan to address this issue
that is satisfactory to NYNEX.
Notice: Note for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
20
<PAGE> 101
APPENDIX X: MODIFICATIONS TO APPENDICES
31. TECHNICAL AND PRODUCT SUPPORT
General Instrument will work with NYNEX to develop a plan to address this issue
that is satisfactory to NYNEX.
Notice: Note for use or disclosure outside of the NYNEX Corporation or any of
its subsidiaries except under written agreement.
1996 NYNEX Corporation. All rights reserved.
21
<PAGE> 1
Exhibit 10.10
Contractor Manufacturing Agreement
Between
Next Level Communications
Rohnert Park, CA 94928
and
SCI Technology, Inc.
Augusta, Maine
<PAGE> 2
TABLE OF CONTENTS
SECTION
I. Definitions
II. Manufacture and Supply
III. Purchase Orders
IV. Purchase Period
V. Business Reviews
VI. Pricing
VII. Delivery
VIII. Quality and Inspection
IX Payment
X. Warranty
XI. Manufacturing or Product Changes
XII. Indemnity and Hold Harmless
XIII. Limitation of Liability
XIV. Confidentiality
XV. No Implied License
XVI. Marking Trademarks and Trade Secrets
XVII Country of Origin and Duty Drawback
XVIII. Termination for Cause
XIX. Inventory Indemnification
XX. General
Exhibit A. Products
Exhibit B. Product Pricing and Lead Time
Exhibit C. Product Specifications
Exhibit D. Approved Vendor List and Supplied Specifications
Exhibit E. Reschedule and Cancellation Notice Period
Exhibit F. Products Packaging, Storage and Handling
Exhibit G. Supplier Quality Assurance Provisions
Exhibit H. Product Reliability Requirements
Exhibit I. RMA Process for Returns to Seller
2
<PAGE> 3
This Contractor Manufacturing Agreement (the "Agreement") is made and entered
into as of the __ day of _______) 1997 (the "Effective Date") by and between
Next Level Communications (the "Buyer") and SCI Technology, Inc. (the "Seller").
RECITALS
WHEREAS, Buyer wishes to purchase Products (as hereinafter defined) from the
Seller, and Seller wishes to manufacture and sell Products to the Buyer, NOW,
THEREFORE, in consideration of the premises and the covenants herein contained,
Buyer and Seller hereby agree as follows:
AGREEMENT
I. DEFINITIONS. For the purpose of this Agreement, the following terms shall
have the following meanings:
A. "Confidential Information" means any and all data and other
information which is provided by the Buyer to the Seller hereunder
which is (i) clearly marked as confidential or proprietary when
disclosed in tangible form, or (ii) when disclosed orally or visually,
identified as confidential or proprietary at the time of disclosure
and reduced to a writing marked as confidential or proprietary and
submitted to the other party within thirty (30) calendar days after
such disclosure.
B. "Days" shall mean business days.
C. "Products" shall mean the products identified in Exhibit A attached
hereto,
D. "Purchase Order" shall mean Buyers written purchase order form.
E. "Party" means the Buyer or the Seller, as applicable; and "Parties" means
both the Buyer and the Seller.
II. MANUFACTURE AND SUPPLY
A. Upon receipt of Purchase Orders from the Buyer, the Seller agrees to
manufacture and sell Products specified in the Purchase Orders, and Buyer
agrees to purchase such manufactured Products from the Seller, subject to
the terms and conditions set forth in this Agreement.
B. The terms and conditions contained in this Agreement exclusively govern
the purchase and sale of the Products, pricing and lead-times for such
purchases and sales, and the applicable specifications for the Products.
Exhibit B describes the Product pricing and Purchase Order lead-times,
and Exhibit C describes the
3
<PAGE> 4
applicable specifications for the Products.
1. The terms and conditions of any Purchase Order, acknowledgment,
schedule or other form or document of Buyer or Seller shall not
apply.
C. Seller shall:
1. Provide all labor, material, tooling, facilities and other resources
necessary and/or appropriate for the timely and satisfactory
completion and delivery of the Products;
2. Commit and utilize sufficient and qualified personnel to support the
requirements hereof,
3. Provide sufficient resources for testing the Products to ensure
compliance with the specifications set forth in Exhibit C;
4. Provide Buyer with reasonably detailed written progress reports as
reasonably requested by Buyer;
5. Notify Buyer within three (3) business days of any factor,
occurrence or event coming to its attention that may adversely
affect Suppliers ability to meet any of its obligations hereunder or
that is likely to occasion any material delay in delivery of any of
the deliverables due hereunder. For example, but not by way of
limitation, such notice shall be given in the event of any loss or
reassignment of key personnel, threat of strike, or major material
equipment failure;
6. Be responsible for material procurement, attrition and vendor
management, except as otherwise set out herein.
D. This Agreement does not specify a quantity of Products to be purchased by
Buyer nor does this Agreement obligate Buyer to purchase any quantity of
Products. All such quantities will be specified on Buyer's Purchase Orders
as further discussed in Section III.
E. Seller agrees that all Products are exclusively developed and designed by
Buyer for Buyer's exclusive purchase and use only. Seller agrees not to
sell, lease, or otherwise dispose of the Products to any individual or
entity other than the Buyer.
F. Seller shall procure all materials used in manufacturing Products
utilizing Buyers approved vendor list and supplied specifications, as
amended from time to time by Buyer. Exhibit D provides the current
approved vendor list and supplied
4
<PAGE> 5
specifications. Under no circumstances shall Seller procure such materials
from sources other than those specified on Exhibit D without first
obtaining written approval from Buyer.
G. Seller shall provide Buyer with competitive customer service available to
insure Buyers ability to meet all customer demand for product and cost
competitiveness.
III. PURCHASE ORDERS
A. Buyer will order Products by issuing Purchase Orders. Each Purchase Order
will specify items such as: Products, quantity, delivery schedule,
destination, and total price of the Purchase Order.
B. Seller shall have five (5) days after receipt to reject the Purchase
Order. By not rejecting the Purchase Order within five (5) days, Seller
will have accepted the Purchase Order. Seller shall not reject any
Purchase Order unless its terms are inconsistent with the terms of this
Agreement.
C. If Buyers Purchase Order specifies export before passage of title, Seller
shall prepare all export-import documentation and furnish a copy to Buyer.
Seller will not be responsible for shipping delays resulting from a
requirement to obtain export licenses or determinations.
D. Seller will purchase material to manufacture Buyer's Products according to
the quantity and delivery schedules set forth in Purchase Orders in effect
from time to time during the term of this Agreement. In the event Purchase
Orders do not cover long lead time material, or if Seller can purchase
material in volume at a lower price, Buyer will issue a separate Purchase
Order to cover such material.
IV. PURCHASE PERIOD
A. Buyer may issue Purchase Orders to Seller as long as this Agreement is in
effect. This Agreement shall remain in effect for a period of three (3)
years (the "Purchase Period") starting from the Effective Date, unless
terminated sooner under the provisions of Section XVIII.
B. The Parties may extend the Purchase Period by one (1) additional year by
providing a written notice to the Seller sixty (60) days prior to the end
of the Purchase Period.
V. BUSINESS REVIEWS
A. The Parties shall, each at their own expense, meet quarterly to review
performance
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<PAGE> 6
and the transacted business, and to identify and resolve those issues which have
arisen since the last business review meeting.
B. Should conflicts arise between Seller and an approved vendor of the
Buyer which cannot be resolved between the Seller and the vendor and
which could impact quality, cost or delivery of Products, Buyer is to
be notified immediately by Seller, at which time, Buyer will intervene
to resolve the conflict.
1. If Buyer cannot resolve the conflict between the Seller and
the vendor, Buyer has one hundred and eighty (180) days to
designate a new vendor to replace the original vendor. Seller
agrees to accept any such newly designated vendor of the Buyer
and to work with such vendor to deliver the Products.
VI. PRICING
A. Exhibit B sets forth the pricing and lead-times for the Products. The
pricing and lead-times shall remain fixed for a period of one (1) year
(the "Pricing Period"), except for: (a) component/material cost
variances resulting from sole source or industry wide conditions which
are outside Sellers control, or (b) changes in design, materials or
requirements made by Buyer ("Excusable Price Changes"), with the first
Pricing Period commencing on the Effective Date. Sixty (60) days prior
to the end of the then current Pricing Period, Seller and Buyer shall
meet to review the pricing and lead-times for the next Pricing Period.
If Buyer and Seller reach an agreement to modify the pricing and
lead-times, a new Exhibit B shall be prepared for the next Pricing
Period and shall be added to this Agreement. If Buyer and Seller fail
to reach agreement on pricing and lead-times for the next Pricing
Period, then this Agreement shall remain in effect for a period of one
(1) year following the end of the then-current Pricing Period, during
which pricing and lead times shall remain unchanged except for
Excusable Price Changes (if any). At the end of such one (1) year
period, this Agreement shall terminate unless the Parties mutually
agree to extend this Agreement.
B. The pricing in Exhibit B shall include all charges such as packaging,
packing, custom duties imposed before passage of title, and all taxes
except freight, duty, and applicable federal, state and local sales or
use taxes. Buyer shall be liable to Seller for such taxes actually paid
by the Seller only if Buyer has failed to comply with statutory resale
tax certificate requirements.
C. Termination of this Agreement (other than termination for cause in
accordance with Section XVIII) shall not affect any outstanding
Purchase Orders, which Seller shall fulfill in accordance with the
terms hereof. This Agreement will apply to all Products purchased
following termination of this Agreement.
6
<PAGE> 7
VII. DELIVERY
A. Buyers Purchase Orders shall state the delivery dates for Products.
TIME AND RATE OF DELIVERY ARE OF THE ESSENCE OF ALL PURCHASES MADE
UNDER THIS AGREEMENT. The minimum agreed period between Buyer issuance
of a Purchase Order and the scheduled delivery date shall be as stated
in Exhibit B. All deliveries shall be F.O.B. ship point.
1. If Seller fails or is about to fail to meet a delivery date
stated in a Purchase Order, and such failure is the sole fault
of Seller, then Seller shall promptly notify Buyer, and Buyer
reserves the right to (a) direct Seller, at Seller's expense,
for the extra cost thereof, to use any expedited
transportation methods available to deliver the Products as
quickly as possible.
2. For each Purchase Order, Seller shall deliver on the delivery
date stated in the Purchase Order the full number of Products
ordered in each Purchase Order by Buyer. If Seller is unable
to deliver the full number of Products ordered, and such
failure is the sole fault of Seller, Seller shall notify Buyer
promptly, and Buyer may, at its sole option, (i) consent to
such partial delivery or (ii) reschedule all or a portion of
the order without charge.
B. Buyer will only pay for quantities of Product ordered by Buyer except
as otherwise agreed. Buyer may, at its option, purchase any quantity of
over shipped Products. Any portion of the over shipment not purchased
will be returned to Seller at Seller's risk, freight collect. Seller
will credit Buyer with the amount of outbound freight attributable to
such returned over shipments.
C. Buyer shall have the right to cancel all or part of Purchase Orders and
cancel or reschedule purchase and delivery of any Products purchased
pursuant to the canceled Purchase Order. Exhibit E provides the
required notice periods and the percentage of Products that the Buyer
can cancel or reschedule for each notice period.
D. Buyer shall use its best efforts to forecast its intended purchases for
a twelve (12) month period on a monthly basis. Such forecast is for
Seller's convenience only, and shall not create any liability for Buyer
or obligation to purchase Products.
E. Buyer will measure Seller's performance against commitments, for the
purpose of establishing Seller's rate of timely delivery and lead-time
improvement against Buyer's requirements. Timely delivery shall mean
delivery of scheduled quantities no more than three (3) days early or
three (3) days late. Seller shall deliver the exact quantity of
Products scheduled. If Seller delivers less than the scheduled
7
<PAGE> 8
requirement, Seller shall correct the shortage within a two (2) day
period.
F. Seller shall package, store, and handle Products manufactured for, and
for delivery to, Buyer in accordance with the requirements and
procedures set forth in Exhibit F. Seller shall be responsible for any
loss or damage to Products due to Sellers failure to properly package,
store, or handle the Products in accordance with the terms of Exhibit F
or otherwise good commercial practice. Seller shall bear the risk of
loss during transportation with respect to any Products rejected by
Buyer, acting in good faith, upon delivery by Buyer to the carrier.
G. Title and risk of loss shall pass to Buyer upon Seller's delivery to
the common or contract carrier at Seller's facility.
H. Seller shall provide all information under its control which is
necessary or useful for Buyer to obtain any export or import licenses
required for Buyer to ship or receive Products, including, but not
limited to, U.S. customs certificates of delivery, affidavits of
origin, and U.S. Federal Communications Commissions identifier, if
applicable. Each Party shall comply with all applicable export control
laws and regulations.
VIII. QUALITY AND INSPECTION
A. Seller shall comply with all provisions of this Agreement, including
but not limited to the obligations set forth in Exhibit G relating to
Sellers Quality Assurance Requirements, and Exhibit H relating to
On-Going Reliability Requirements. The Products manufactured by the
Seller for the Buyer shall meet or exceed all quality and reliability
standards set forth in Exhibits G and H. Buyer is required to inspect
each shipment of Products and give Seller written notice of any defects
or count or other discrepancies within fifteen (15) calendar days of
receipt. If Buyer does not inspect Products within fifteen (15)
calendar days, the Products will be considered accepted by Buyer; any
Product defects reported after fifteen (15) calendar days will be
covered by the warranty provisions of this Agreement.
B. Buyer, or its designee if the designated delivery site for Products is
other than the Buyer's site, may inspect Products at their destination.
A Product shall be deemed nonconforming if it fails to comply in any
way with applicable Buyer's specifications as set forth in Exhibit C,
the quality requirements as set forth in Exhibit G, or the reliability
requirements as set forth in Exhibit H.
1. All Products will be subject to final inspection and
acceptance. However, any Product which is defective upon
removal from its original packaging and initial checkout
("Dead-on-Arrival" or "DOA"), whether discovered by Buyer or
its customer, will be treated as though discovered during
Buyer's
8
<PAGE> 9
acceptance process.
C. Seller shall notify Buyer in writing of any discrepancy or defect in
workmanship or manufacturing process discovered by Seller which could
have a detrimental effect on previously shipped Products which have
reached Buyers customer base. In conjunction therewith, Buyer and
Seller agree to negotiate in good faith an appropriate course of action
which may include an obligation for Seller to:
1. Repair or replace Product at Buyer's or its customers' sites;
2. Sort all affected material located at Buyer's or Seller's
product, repair facilities; and/or
3. Reimburse Buyer for its reasonable costs, if Buyer agrees to
perform the repair or replacement contemplated in subsection
C1 above, on Sellers behalf.
D. Exhibit I sets forth the procedures for returning Products rejected by
Buyer, its designee, or its customer to the Seller.
E. Seller authorizes Buyer to perform source inspection and process
control audits at Seller's manufacturing facilities, but this shall in
no way relieve Seller of its obligation to deliver conforming Products
or waive Buyers right of rejection at the destination of the Products.
IX. PAYMENT
A. Buyer shall issue payment net thirty (30) calendar days from Seller's
invoice date, the invoice date will be no earlier than the ship date.
Payments are not subject to off-set or setoff. Acceptance of a partial
payment will not be a waiver of the right to be paid the remainder due.
B. Amounts owed to Buyer due to rejection of Products or discrepancies on
paid invoices will be,
1. Fully credited by Seller.
After repair or replacement of rejected Products, Seller will
re-invoice Buyer for the amount credited when reshipped.
X. WARRANTY
A. Seller warrants for [ * ] from date of acceptance of Products by
Buyer that all
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portion.
9
<PAGE> 10
Products:
1. Shall be free from defects in manufacturing process, material
and workmanship,
2. Shall conform to the requirements of this Agreement, the
specifications set forth in Exhibit C, the quality
requirements set forth in Exhibit G, and the reliability
requirements set forth in Exhibit H,
B. Seller warrants it has the right to manufacture and convey the Products
and that the Products are free of all liens and encumbrances.
C. Seller shall correct defects in Products. At Seller's option, Seller
shall repair or replace all defective Products within five (5) days of
receipt of such Products. Seller shall bear all warranty costs such as
labor, material, inspection and shipping to and from Buyers facilities.
The foregoing represents Buyer's sole and exclusive remedy for breach
of the Product warranty.
D. These warranties shall survive any inspection, delivery, or termination
of this Agreement, and shall run to Buyer.
E. The materials portion of the warranty shall not apply to (i) Buyer
consigned or supplied materials, (ii) Product that is abused, damaged,
altered or misused other than by Seller, or (iii) Product damaged by
external causes not directly contributed to by Seller.
Product shall be considered free from defects in workmanship if they
are manufactured in accordance with Sellers manufacturing workmanship
standards, conform to the Product specifications, and successfully
complete any mutually agreed upon Product Acceptance Tests. Buyer may
perform acceptance testing which measures a different array of
performance criteria but the parties agree that the mutually agreed
upon Product Acceptance Test will be the measurement standard to
determine if the Product meets specifications.
ALL CLAIMS FOR BREACH OF WARRANTY MUST BE RECEIVED BY SELLER NO LATER
THAN [ * ] AFTER THE EXPIRATION OF THE WARRANTY PERIOD FOR THE
MATERIAL.
THE PRODUCT WARRANTY IS THE ONLY WARRANTY GIVEN BY SELLER. SELLER
MAKES, AND BUYER RECEIVES, NO OTHER WARRANTY EITHER EXPRESSED OR
IMPLIED. ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE, AND ALL IMPLIED WARRANTIES OF TITLE FOR ANY CONSIGNED
OR BUYER SUPPLIED
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
10
<PAGE> 11
MATERIALS, ARE EXPRESSLY DISCLAIMED AND EXCLUDED HEREFROM.
UNLESS EXPRESSLY AGREED TO BY SELLER IN WRITING, SELLER MAKES NO WARRANTY
THAT THE PRODUCTS WILL (i) MEET ANY SPECIFICATION NOT MADE KNOWN TO AND
AGREED TO BY SELLER, OR (ii) RECEIVE THE APPROVAL OF OR BE CERTIFIED BY
UNDERWRITERS LABORATORY, ANY FEDERAL, STATE, LOCAL OR FOREIGN GOVERNMENT
AGENCY (INCLUDING WITHOUT LIMITATION THE FEDERAL COMMUNICATIONS
COMMISSION) OR ANY OTHER PERSON OR ENTITY. SELLER ASSUMES NO
RESPONSIBILITY FOR OBTAINING SUCH APPROVALS OR CERTIFICATIONS, OR MEETING
SUCH SPECIFICATIONS.
Seller's warranty obligations will cease upon the earlier of the agreed
upon warranty period or upon Seller's fulfillment of Buyer's request to
return any Buyer-owned test equipment and fixtures.
Buyer warrants to Seller that any documentation or other data which it
provides Seller to manufacture the Material is accurate and complete,
unless Buyer informs Seller otherwise.
SCI will repair Products which are outside the warranty period on mutually
agreed prices and terms and conditions.
XI. MANUFACTURING OR PRODUCT CHANGES
A. Seller shall not implement any changes that may effect form, fit,
function, or design of the Products, including without limitation, changes
in performance, interchangeability, interconnectability, appearance,
reliability or compatibility of Products, or any changes to the place of
manufacture, or packing and packaging of Products, without the prior
written consent of Buyer.
B. Buyer and Seller envision that the specifications, quality assurance, and
reliability procedures may be amended from time to time by Buyer during
the course of the development effort and desire to provide a process
whereby the specifications can evolve in accordance with the changing
needs and desires of Buyer and its customers. Any amendment to the
specifications and procedures will be valid and binding only if affected
by a change order approved as set forth below.
1. Buyer may initiate a proposed change order by delivering to Seller a
written request for Seller to prepare information for submission to
Buyer detailing the likely effects of the proposed change order.
Such writing shall specify the requested change and cross-reference
the portion of the specifications which is proposed to be amended.
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<PAGE> 12
a) Upon receipt of such written request by Buyer, Seller shall,
within seven (7) days, prepare a good faith estimate of the
effort and adjustments required to complete the proposed
change order for Buyer's review. Such estimate shall be
limited to those adjustments that Seller reasonably requires
to implement the requested change and shall contain any change
to the applicable delivery date and/or to the amounts due,
including any change in price as a result of such change
order. Seller will not be required to implement such change
order until the Parties have mutually agreed upon the price.
2. Seller may propose a change order to Buyer by delivering to Buyer a
written request with no less than [ * ] notice for "major
change orders" (defined as changes to Products affecting form, fit
or function) and no less than [ * ] notice of all other
change orders (defined as "minor change orders"). Such notice should
include a description of the proposed change, good faith estimate of
the effort and adjustments required to complete the proposed change
order, and any change to the applicable delivery date and/or to the
amounts due, including any change in price as a result of such
change order. Written approval from Buyer must be received by Seller
prior to implementation of such changes, and will be referenced as
revisions to this Agreement.
XII. INDEMNITY AND HOLD HARMLESS
A. Intellectual Property Indemnification.
1. Seller shall defend, at its expense, any claim against Buyer
alleging that the manufacturing process of the Products, or any part
thereof, infringe any patent, copyright, trademark, trade secret,
mask work, or other intellectual property interest in any country
and shall pay all costs and damages awarded, including any
settlement amounts, if Seller is notified promptly of such a claim.
2. In addition to the Seller's other obligations, if an injunction
against Buyer's or Buyer's customer's use, sale, lease, license, or
other distribution of the Products or any part thereof results from
such a claim, or if Buyer reasonably believes such a claim is
likely, Seller shall at its expense upon the Buyer's request, at
Seller's option, replace or modify the manufacturing process of the
Products so that the Products become non-infringing but functionally
equivalent.
3. Buyer is responsible for the design of the Product. Upon Seller's
demand, Buyer will promptly defend, indemnify and hold Seller, its
officers, directors,
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
12
<PAGE> 13
employees, agents, successors and assigns, harmless from and against
every kind of cost, expense or loss (including attorneys' fees and
legal costs) relating to any claim or threatened claim: (a) that any
Product or portion of the Product violates the intellectual property
rights of a third party (foreign or domestic); (b) that the Product
has a design defect; or (c) arising from or related to the
distribution, sale or use of the Product or portion of the Product.
The immediately preceding sentence will apply whether the claim is
based upon contract, tort or any other legal theory.
B. Seller shall defend, indemnify, and hold Buyer, its officers, directors,
agents and employees harmless from and against any and all claims, losses,
expenses (including reasonable attorneys' fees), demands, or judgments
("Claims") which result from or arise out of-
1. The presence of the Seller or equipment or tools used by Seller in
the performance of this Agreement on the property of Buyer or its
customers; or
2. The acts, errors, omissions, or negligence of Seller while on the
property of Buyer or its customers, regardless of whether the loss,
damage or injury resulting from same occurs after the Seller has
left such property; or
3. The use by Seller of Buyer's equipment, tools, or facilities
("Equipment").
XIII. LIMITATION OF LIABILITY
A. Seller's liability for any Product claim shall not exceed the purchase
price of the Product for which the claim is made. Except as otherwise
provided in this Agreement, neither party shall be liable for special,
indirect, incidental, or consequential damages. The foregoing limitation
shall not limit Seller's or Buyer's liability for:
1. Any costs, expenses, and damages arising out of or in connection
with claims brought by third parties;
2. Seller's or Buyer's unauthorized disclosure of the other Party's
Confidential Information; or
3. Any indemnification, including intellectual property
indemnification, owed to Buyer by Seller, or owed to Seller by Buyer
in connection with this Agreement.
XIV. CONFIDENTIALITY
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<PAGE> 14
A. Seller and Buyer understand and agree that the specifications, drawings,
blueprints, data, pricing, purchasing information, and other business
information relating to the Products and otherwise made available to the
receiving Party hereunder, constitute Confidential Information, title to
which shall remain in the disclosing Party.
B. Neither Party shall disclose the Confidential Information of the other to
any third party except to its employees who have a legitimate need to know
or to subcontractors that have agreed to be bound by the provisions of
this Section XIV. This duty of nondisclosure shall last for a period
ending the later of termination of this Agreement and [ * ]
after the disclosure of such Confidential Information. The receiving Party
shall further protect the Confidential Information of the disclosing Party
to the same extent as it protects its own information of a similar type,
but in no event with less than reasonable care.
C. The receiving Party shall have no obligation to preserve the
confidentiality of any information which (1) is in the public domain at
the time of disclosure to the receiving Party hereunder, (2) becomes
publicly available through no fault of the receiving Party, and without
breach of this Agreement, (3) is already in the lawful possession of the
receiving Party without restriction prior to disclosure to the receiving
Party hereunder, (4) is required to be disclosed by the receiving party
pursuant to the order of a court of competent jurisdiction, provided that
the receiving Party previously notifies the disclosing Party to permit the
taking of appropriate protective measures.
D. Without the other Party's prior written consent, Seller or Buyer shall not
in any manner disclose, advertise or publish the existence or terms of
transactions under this Agreement.
E. At the disclosing Party's request, the receiving Party shall promptly
return to the disclosing Party all Confidential Information including all
copies.
F. Both Parties agrees that breach of this Section XIV would cause
irreparable harm, for which monetary damages would not be an adequate
remedy, and that the disclosing Party shall therefore be entitled to
injunctive relief to prevent any such breach, in addition to any other
remedies available.
XV. NO IMPLIED LICENSE
A. The parties understand that neither the terms and conditions of this
Agreement nor the acts of either party arising out of this Agreement may
be considered in any way as an express or implied license to the Seller
for any of the Buyer's present or future patents, copyrights, trademarks,
trade secrets or other proprietary rights.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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Without limiting the generality of the foregoing, Seller shall not utilize
any of Buyer's Confidential Information to design, develop, manufacture,
market or sell any other product or service.
XVI. MARKING, COPYRIGHT, TRADEMARKS AND TRADE SECRETS
A. Seller agrees to properly mark each Product with Buyer's trademark,
copyright or other proprietary rights notice, as directed by Buyer, to
indicate Buyer's intellectual property rights in such Products.
B. Seller grants Buyer the right to reproduce any materials supplied to Buyer
under this Agreement, and to distribute such materials in conjunction with
the marketing and support of the Products.
C. With respect to product that contains software and/or firmware owned by
Buyer, Buyer grants the Seller a nontransferable, nonexclusive license to
reproduce and install software and/or firmware in products manufactured by
the Seller for Buyer. Seller shall have no other rights with respect to
software and/or firmware provided by the Buyer, and agrees not to sell,
lease, or otherwise dispose of the software and/or firmware supplied by
the Buyer. For software and/or firmware not owned by Buyer, Seller hereby
grants to Buyer a perpetual, nontransferable, nonexclusive license to use,
reproduce, modify and to market, distribute, and sublicense the use of the
Buyers sale, loan, or other disposition or distribution of the product.
XVII. COUNTRY OF ORIGIN AND DUTY DRAWBACK
A. Upon delivery of Products and at Buyer's option, Seller shall furnish
Buyer with a signed certificate for delivered Products. The signed
certificate should identify the country or countries in which the Products
were manufactured, the quantity of the delivered Products, and the Buyer's
and Seller's part numbers for the delivered Products.
B. For each delivery during each fiscal quarter, Seller shall provide such
required certificates, unless otherwise agreed in writing by both parties.
XVIII. TERMINATION FOR CAUSE
A. The occurrence of any of the following constitutes a breach hereof and is
cause for Buyer's termination of this Agreement and/or its Purchase
Orders.
1. Buyer may cancel the related Purchase Order if Seller consistently
fails to deliver Products in accordance with the applicable Purchase
Order delivery schedule, and the fault lies solely with Seller.
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2. Buyer may cancel the related Purchase Order if, Products
consistently do not conform to the applicable specifications, and
the fault lies solely with Seller.
3. Seller consistently fails to perform any material provision of this
Agreement or Buyer's Purchase Orders.
4. Seller assigns this Agreement or any obligation or right under it,
Seller transfers a majority interest in the Seller to a third party,
or Seller merges with a third party that is not a parent or
subsidiary company of the Seller at the Effective Date.
5. Seller becomes insolvent or makes an assignment for the benefit of
creditors or a receiver, or similar officer is appointed to take
charge of all or part of Seller's assets.
B. Seller must cure any of the above breaches and notify Buyer of such cure
within twenty (20) days from receipt of a notice to cure from Buyer. If
Seller fails to so cure, Buyer may terminate this Agreement and/or any
Purchase Orders under it by giving Seller written notice.
C. The provisions of Sections X, XII, XIV, and XVII of this Agreement shall
survive termination or expiration of this Agreement.
D. The occurrence of any of the following constitutes a breach hereof and is
cause for Seller's termination of this Agreement and/or its Purchase
Orders.
1. Buyer assigns this Agreement, or any obligation or right under it,
Buyer transfers a majority interest in the Buyer to a third party,
or Buyer merges with a third party that is not a parent or
subsidiary company of the Seller at the Effective Date.
2. Buyer becomes insolvent or makes an assignment for the benefit of
creditors, or a receiver or similar officer is appointed to take
charge of all or part of Buyer's assets.
3. Buyer consistently fails to perform any material provision of this
Agreement.
4. Buyer fails to make payment.
Buyer must cure any of the above breaches and notify Seller of such cure
within [ * ] from receipt of a notice to cure from Seller,
except that in the case of number 4, Buyer shall have [ * ] to
remedy such breach. If Buyer fails to so cure, Seller may terminate this
Agreement and/or any Purchase Orders under it by giving Buyer written
notice.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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XIX. INVENTORY INDEMNIFICATION
Upon cancellation or quantity reduction of a Purchase Order, or upon
expiration of this Agreement or termination of this Agreement for any
reason, Buyer shall be responsible for:
(i) all finished Product scheduled for shipment within the thirty (30)
days immediately following Seller's receipt of the cancellation or
termination notice (the "Notice");
(ii) all work-in-process at receipt of the Notice; and
(iii) all components, subassemblies and other material purchased to fill a
Purchase Order or authorized to be purchased by Buyer which are on
hand or on order at receipt of the Notice. Without limitation this
includes Piece Part Inventory made obsolete or excessive due to
changes to the specifications or Product, minimum buy quantities,
and reel quantities. Items (i)-(iii) are referred to as the
"Termination Inventory". In calculating the quantity of finished
Product under (i) above, Material rescheduled for manufacture and
shipment during the forty-five (45) days immediately prior to
receipt of the Notice may be counted by Seller.
Seller will make every reasonable effort to use the Termination Inventory
on other current programs at the Plant where the Product is manufactured,
will cancel all outstanding material orders with vendors, and will attempt
to return piece parts to vendors. Buyer will be responsible for costs,
charges and fees actually incurred by Seller to cancel or return any
portion of the Termination Inventory to vendors and, upon mutual
agreement, the cost to modify the Product for other programs.
Within [ * ] from termination or cancellation, Seller will
invoice, and Buyer will purchase, the Termination Inventory remaining
after vendor cancellations and returns and after other program use, as
follows: (i) for Piece Part Inventory and authorized long lead time
components, at Seller's standard cost, plus a reasonable handling charge;
(ii) for WIP, at a reasonable pro rata percentage of the finished Product
purchase price; and (iii) for finished Product, at the purchase price in
effect at termination or cancellation. Buyer will be responsible for any
negative price differentials between the price Seller paid for the Piece
Part Inventory and authorized long lead time components and the price at
which Seller was able to return and/or utilize the items on other
programs. Seller will credit Buyer for any positive price differentials.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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XIX. GENERAL
A. Non-assignability. Seller or Buyer, without prior written consent of the
other Party may not assign any rights or obligations hereunder in whole or
in part to any third party. Notwithstanding the foregoing, a permitted
successor in interest of the Seller acquires all rights and obligations
hereunder in whole or in part.
B. Waiver. Any failure of either Party to enforce, at any time or any period
of time, any of the provision of this Agreement shall not be construed as
a waiver of such provisions or of the right of such Party thereafter to
enforce each and every such provision.
C. Relationship. Seller is an independent contractor and not an agent or
employee of Buyer. Without limiting the foregoing, Seller is not
authorized to represent or make any commitments on behalf of Buyer and
Buyer expressly disclaims any liability thereof.
D. Import and Export Laws. All Products and technical data delivered under
this Agreement are subject to U.S. export control laws and may be subject
to export or import regulations in other countries. The parties agree to
comply strictly with all such laws and regulations.
E. Notice. Any notice given under this Agreement shall be written or sent by
facsimile, or e-mail. Written notice shall be sent by registered mail or
certified mail, postage prepaid, return receipt requested. Any facsimile
notice must be followed within three (3) days by written notice. All
notices shall be effective when first received at the following addresses:
If to Seller: If to Buyer:
SCI Technology Incorporated Next Level Communications
500 Civic Center Drive 6085 State Farm Drive
Augusta, ME 04330-9417 Rohnert Park, CA 94928
ATTN: Patrick Barry, Vice President ATTN: Director of Materials
F. Arbitration. All disputes, controversies or differences which may arise
between the Parties, out of or in relation to or in connection with this
Agreement or the breach thereof, other than an action for breach of
Section XIV, shall be finally settled by arbitration pursuant to the
Commercial Arbitration Rules of the American Arbitration Association in a
location that allows approximately equal travel expenses, by which each
Party hereto agrees to be bound. The dispute, controversy or difference
will be decided by a single arbitrator if the Parties so agree, with
experience in the subject matter, otherwise the dispute will be decided by
three (3) arbitrators with
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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experience in the dispute. One arbitrator to be chosen by Buyer; one
arbitrator to be chosen by Seller, and the third arbitrator to be chosen
by the first two arbitrators. All arbitrators must be chosen within sixty
(60) calendar days of the dispute being submitted to arbitration. After
selection of the arbitrators, the parties have forty-five (45) calendar
days to complete discovery. Arbitration must commence within ten (10)
calendar days after the discovery period. Arbitration will not exceed
thirty (30) calendar days and the award is final. The arbitrator(s) award
may include direct damages against either party but under no circumstances
will the arbitrator(s) be authorized to nor shall they award punitive
damages or multiple damages against either party. The arbitrators will
award to the prevailing party hereto, if any, as determined by the
arbitrators, all of its reasonable costs and fees, including without
limitation administrative fees, arbitrator fees, travel expenses,
out-of-pocket expenses, such as copying and telephone, facsimile, witness
fees and attorneys' fees.
G. Governing Law. This Agreement shall be governed as to all matters
including validity, construction and performance, by and under the laws of
State of California, USA, without regard to its rules governing conflict
of laws.
H. Separability. Except as otherwise specified in this Agreement, all rights
and remedies conferred by this Agreement, by any other instrument, or by
law are cumulative and may be exercised singularly or concurrently. The
Parties hereto agree that, in the event of one or more of the provisions
hereof being subsequently declared invalid or unenforceable by court or
administrative decision, such invalidity or unenforceability of any of the
provisions shall not in any way affect the validity or enforceability of
any other provisions hereof except those which the invalidated or
unenforceable provisions comprise an integral part of or are otherwise
clearly inseparable from such other provisions.
I. Entire Agreement and Amendment. This Agreement sets forth the entire
agreement and understanding between the Parties as to the subject matter
of this Agreement. Neither of the Parties shall be bound by any
conditions, definitions, warranties, or representations with respect to
the subject matter of this Agreement, other than expressly provided in
this Agreement or any written amendment duly executed on or subsequent to
the date hereof by the duly authorized representatives of the Parties in
which the Parties agree to be bound thereby.
J. Force Majeure. Neither party shall be liable for damages and costs to the
other party arising out of delays or failures to perform under this
Agreement if such delays or failures result from causes beyond the
reasonable control of a party, and are not caused by an act or omission of
such party. Notice of any such delays or failures and explanation of their
causes must be given to the other party within five (5) days of the
occurrence. As soon as it is reasonably apparent that the occurrence will
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likely cause a delay of more than ninety (90) calendar days, the party
against whom this section is invoked shall have the right to terminate the
affected installments under any Purchase Order. If Buyer is the party
claiming the force majeure event, Buyer shall be liable for any applicable
cancellation charges and be responsible for termination obligations, both
as provided for in this Agreement. This force majeure provision may not be
invoked for failure or inability to make a payment under this Agreement.
H. Assignees. Buyer is the only entity authorized to purchase Material
hereunder and the individual executing this Agreement certifies they have
the legal authority to bind the Buyer. Any affiliates, subsidiaries, and
permitted assigns ("Assignees") of Buyer which Buyer wishes to purchase
Material hereunder must execute a copy of this Agreement and Buyer
warrants that any and all obligations and debts of the Assignees will be
discharged in a timely fashion. Buyer shall be liable for performance of
the Assignees hereunder including, without limitation, payment of all
monies.
IN WITNESS WHEREOF, the authorized representative of the parties have executed
this Agreement under seal.
SCI Technology. Inc. Next Level Communications
(Seller) (Buyer)
/s/ [Illegible] /s/ [Illegible]
------------------------------ ---------------------------------
(By, Signature & Name) (By, Signature & Name)
Vice President VP/CFO
------------------------------ ---------------------------------
(Title) (Title)
2/13/98 2/16/98
------------------------------ ---------------------------------
(Date) (Date)
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