<PAGE>
As filed with the Securities and Exchange Commission on December 15, 1999
Registration No. 333-91169
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
To
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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GODIGITAL NETWORKS CORPORATION
(Exact name of Registrant as specified in its charter)
-----------
<TABLE>
<S> <C> <C>
California
(prior to reincorporation)
Delaware 3661 94-3240382
(after reincorporation) (Primary Standard Industrial (I.R.S. Employer
(State or other jurisdiction
of Classification Code Number) Identification Number)
incorporation or
organization)
</TABLE>
41652 Boscell Road
Fremont, California 94538
(510) 979-2200
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-----------
T. Olin Nichols
Chief Financial Officer
41652 Boscell Road
Fremont, California 94538
(510) 979-2200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
<TABLE>
<S> <C>
Judith M. O'Brien, Esq. Nora L. Gibson, Esq.
Alisande M. Rozynko, Esq. Laura M. de Petra, Esq.
Lior Zorea, Esq. Leonard A. Ho, Esq.
Wilson Sonsini Goodrich & Rosati Brobeck, Phleger & Harrison LLP
Professional Corporation One Market, Spear Street Tower
650 Page Mill Road San Francisco, CA 94105
Palo Alto, CA 94304 (415) 442-0900
(650) 493-9300
</TABLE>
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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, 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, 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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,
check the following box. [_]
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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 which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
EXPLANATORY NOTE
The purpose of this Amendment No. 1 to the Registration Statement is solely
to file certain exhibits to the Registration Statement, as set forth below in
Item 16(a) of Part II.
<PAGE>
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 GoDigital Networks
Corporation in connection with the sale of Common Stock being registered. All
amounts are estimates except the SEC registration fee and the NASD filing fee.
<TABLE>
<S> <C>
SEC registration fee............................................. $15,568
NASD filing fee.................................................. 6,100
Nasdaq National Market listing fee............................... *
Printing and engraving costs..................................... *
Legal fees and expenses.......................................... *
Accounting fees and expenses..................................... *
Blue Sky fees and expenses....................................... 3,000
Transfer Agent and Registrar fees................................ *
Miscellaneous expenses........................................... *
-------
Total.......................................................... $ *
=======
</TABLE>
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* To be filed by amendment
Item 14. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits a corporation to
include in its charter documents, and in agreements between the corporation and
its directors and officers, provisions expanding the scope of indemnification
beyond that specifically provided by the current law.
Article XI of the Registrant's Restated Certificate of Incorporation
provides for the indemnification of the Registrant's directors and officers to
the fullest extent permissible under Delaware law.
The Registrant intends to enter into indemnification agreements with its
directors and executive officers, in addition to indemnification provided for
in the Registrant's Restated Certificate of Incorporation, and intends to enter
into indemnification agreements with any new directors and executive officers
in the future.
Item 15. Recent Sales of Unregistered Securities
Since our incorporation in February 1996, we have sold and issued the
following securities:
(1) On March 1, 1996, we issued 3,120,000 shares of common stock to three
founding stockholders for an aggregate consideration of $1,560.00.
(2) On March 12, 1996, we issued 120,000 shares of common stock to a
consultant for an aggregate consideration of $60.00.
(3) On April 6, 1996, we issued 2,678,000 shares of Series A Preferred Stock
to ten investors for an aggregate consideration of $2,678,500.00.
II-1
<PAGE>
(4) On December 11, 1996, we issued 1,339,250 shares of Series B Preferred
Stock to ten investors for an aggregate consideration of $2,678,500.00.
(5) On August 5, 1997, we issued 1,992,476 shares of Series C Preferred
Stock to twelve investors for an aggregate consideration of $7,192,838.36.
(6) On September 22, 1998, we issued 428,574 shares of Series D Preferred
Stock to three investors for an aggregate consideration of $3,000,018.00, and
on October 15, 1998, we issued 12,143 shares of Series D Preferred Stock to
three investors for an aggregate consideration of $85,001.00.
(7) On July 30, 1999, we issued 530,000 shares of Series E Preferred Stock
to fifteen investors for an aggregate consideration of $6,625,000.00, and on
August 12, 1999, we issued 77,920 shares of Series E Preferred Stock to one
investor for an aggregate consideration of $974,000.00.
(8) On September 14, 1999, we issued an aggregate of 6,000 shares of common
stock to four consultants as consideration for past services rendered.
(9) Since our incorporation, we have issued, and there remain outstanding,
options to purchase an aggregate of 2,150,600 shares of common stock with
exercise prices ranging from $0.18 to $4.50 per share. Since our incorporation,
options to purchase 2,858,292 shares of common stock have been exercised for an
aggregate consideration of $2,578,838.78.
None of the foregoing transactions involved any underwriters, underwriting
discounts or commissions, or any public offering.
The issuance of securities described in Items 15(1) through (6) and (8) were
exempt from registration under the Securities Act in reliance on Section 4(2)
of the Securities Act as transactions by an issuer not involving a public
offering. The issuance of securities described in Item 15(7) were exempt from
registration under the Securities Act in reliance on Regulation D of the
Securities Act as transactions by an issuer not involving a public offering.
The issuance of securities described in Item 15(9) were exempt from
registration under the Securities Act in reliance on Section 4(2) or Rule 701
promulgated thereunder as transactions pursuant to compensatory benefit plans
and contracts relating to compensation.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number
- -------
<S> <C>
1.1* Form of Underwriting Agreement
3.1** Restated Certificate of Incorporation of the Registrant
3.2** Bylaws of the Registrant
4.1* Specimen of Common Stock Certificate
4.2** Third Amended and Restated Shareholder Rights Agreement
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
10.1** Form of Indemnification Agreement between the Registrant and each of its directors and officers
10.2+ Purchase Agreement by and between BCTel and the Registrant
10.3 Multi-Tenant Industrial Triple Net Lease, dated as of June 1, 1999, by and between the Registrant
and Catellus Development
10.4** Amended and Restated 1996 Stock Plan and forms of agreements thereunder
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number
-------
<S> <C>
10.5** 1999 Employee Stock Purchase Plan
10.6** Change of Control Severance Agreement by and between the Registrant and each of
its officers
10.7** Change of Control Severance Agreement by and between Dennis Haar and the
Registrant
10.8+ Product Purchase Agreement between GTE Communication Systems Corporation and the
Registrant
10.9+ Agreement for Products by and between US West Communications, Inc. and E/O
Networks
10.10 Assignment, Assumption and Acceptance for Products by and among US West
Communications, Inc., E/O Networks and the Registrant
23.1** Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.2** Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.3* Consent of Counsel (see Exhibit 5.1)
24.1** Power of Attorney
27.1** Financial Data Schedules
</TABLE>
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+ The Registrant will request confidential treatment with respect to certain
portions of this exhibit. The omitted portions will be separately filed with
the Commission.
* To be filed by amendment
** Previously filed
(b) Financial Statement Schedules
<TABLE>
<CAPTION>
Schedule Page
-------- ----
<S> <C>
Schedule II--Valuation and Qualifying Accounts........................ S-1
</TABLE>
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
Item 17. Undertakings
The undersigned 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
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions referenced in Item 14 of this
registration statement 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 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 a
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 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.
II-3
<PAGE>
The undersigned 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>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 1 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Fremont, State of California, on the 15th day of December, 1999.
GoDigital Networks Corporation
Dennis Haar*
By: _________________________________
Dennis Haar,
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Francis I. Akers* Chairman of the Board December 15, 1999
____________________________________ President, Chief
Francis I. Akers Development Officer and
Director
Dennis Haar* President, Chief Executive December 15, 1999
____________________________________ Officer and Director
Dennis Haar (Principal Executive
Officer)
/s/ T. Olin Nichols Vice President, Finance, December 15, 1999
____________________________________ Chief Financial Officer
T. Olin Nichols (Principal Financial
Officer)
Douglas Carlisle* Director December 15, 1999
____________________________________
Douglas Carlisle
James Flach* Director December 15, 1999
____________________________________
James Flach
Gregorio Reyes* Director December 15, 1999
____________________________________
Gregorio Reyes
</TABLE>
/s/ T. Olin Nichols
*By: ___________________________
T. Olin Nichols
Attorney-in-Fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
1.1* Form of Underwriting Agreement
3.1** Restated Certificate of Incorporation of the Registrant
3.2** Bylaws of the Registrant
4.1* Specimen of Common Stock Certificate
4.2** Third Amended and Restated Shareholder Rights Agreement
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
10.1** Form of Indemnification Agreement between the Registrant and each of
its directors and officers
10.2+ Purchase Agreement by and between BC Tel and the Registrant
10.3 Multi-Tenant Industrial Triple Net Lease, dated as of June 1, 1999, by
and between the Registrant and Catellus Development
10.4** Amended and Restated 1996 Stock Plan and form of agreements thereunder
10.5** 1999 Employee Stock Purchase Plan
10.6** Change of Control Severance Agreement by and between the Registrant
and each of its officers
10.7** Change of Control Severance Agreement by and between Dennis Haar and
the Registrant
10.8+ Product Purchase Agreement between GTE Communication Systems
Corporation and the Registrant
10.9+ Agreement for Products by and between US West Communications, Inc. and
E/O Networks
10.10 Assignment, Assumption and Acceptance of Agreement for Products by and
among US West Communications, Inc., E/O Networks and the Registrant
23.1** Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.2** Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.3* Consent of Counsel (see Exhibit 5.1)
24.1** Power of Attorney
27.1** Financial Data Schedules
</TABLE>
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+ The Registrant will request confidential treatment with respect to certain
portions of this exhibit. The omitted portions will be separately filed with
the Commission.
* To be filed by amendment
** Previously filed
<PAGE>
EXHIBIT 10.2
PURCHASE AGREEMENT
PARTIES
This Product Purchase Agreement is made between:
GoDigital Telecommunications
41305 Albrae Street
Fremont, CA 94538 (Seller)
and
BC TEL
6969 10th Avenue
Burnaby, BC V3N 2R4 (BC TEL)
for the benefit of BC TEL and BC TEL Affiliates (as defined in Clause 7).
THE PARTIES AGREE AS FOLLOWS:
1. TERM
This Agreement shall be for a period of one (1) year commencing April 1, 1999
and shall be subject to renewal at BC TEL's option for further consecutive
periods of one (1) year to a maximum period of five (5) years.
Written notice of renewal shall be given by BC TEL at least sixty (60) days
prior to the end of each period or the Agreement shall terminate. BC TEL
reserves the right to extend the term of any period by one (1) month without
penalty or increased cost.
2. PRODUCTS
This Agreement applies to the purchase by BC TEL of the Product(s) (Product) of
the Seller as described in Schedule "A" and in accordance with the Product
specifications as described in Schedule "C" (Specifications), if any.
3. PRICE AND TERMS OF PAYMENT
BC TEL agrees to pay the prices as described in Schedule A for the Product(s)
which it purchases, which prices shall be fixed until March 31, 2000 and which
prices shall be those of the most favored customer of the Seller.
Payment shall be made net 30 days from invoice date to BC TEL unless approval is
withheld under Clause 15. Payment of invoice in no way indicates approval of
the Product(s) by BC TEL.
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
4. PRECEDENCE OF BC TEL'S TERMS
All purchases by BC TEL of the Seller's Product(s) shall be governed in priority
by:
the terms, conditions of this Purchase Agreement,
BC TEL's General Terms, Conditions, and
the Terms, Conditions of each individual Purchase Order (if any).
All purchases are expressly limited to the above terms, conditions which shall
govern. Any additional or inconsistent terms or conditions proposed by the
Seller are hereby rejected and will not form part of our Agreement, unless
specifically agreed to in advance and in writing by BC TEL.
5. PURCHASE ORDER
This Agreement does not by itself constitute an order. BC TEL shall order
Product or Service by submitting a Purchase Order.
6. CANCELLATION OF PURCHASE ORDERS
If the Seller is in material breach or default of any term or condition of this
Agreement or any purchase order hereunder, BC TEL may give fifteen (15) days
written notice to the Seller to remedy the breach or default.
If the breach or default is not remedied to BC TEL's satisfaction within the
period of notice, then in addition to all other rights and remedies of law
including the right of set off, BC TEL may cancel this Agreement and any
purchase orders made under it without further notice or obligation to the
Seller.
Additionally, BC TEL reserves the right at any time to cancel any purchase order
for convenience prior to completion of delivery of the Product(s), in which case
BC TEL shall reimburse the Seller for the Seller's actual verifiable costs
incurred as a result of such cancellation only, but in no event, shall such
---
cancellation costs exceed the purchase order price.
<PAGE>
7. AFFILIATES
In this Agreement:
(A) "Affiliate" and "Control" will each have the meaning given to it under the
Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended.
(B) "BC TEL Affiliate" means any of the following:
(i) an Affiliate of BC TEL;
(ii) a partnership, joint venture or other entity that directly or
indirectly Controls, is Controlled by, or is under common Control
with, BC TEL; or
(iii) GTE Corporation, its Affiliates, and their successors.
The Seller agrees that the BC TEL Affiliates shall have the same right to
purchase pursuant to the terms of this Agreement as BC TEL and shall have the
same rights to enforce the terms, conditions of this Agreement for any purchase
order they may issue to the Seller as if they were a signatory to the Agreement.
The parties acknowledge that it may be necessary to enter into separate
agreements between the Seller and a BC TEL Affiliate. The parties intend that
any further agreements or terms, conditions will be consistent with and based
upon the applicable terms, conditions of this Agreement, subject to the
requirements of local laws and business practices.
8. AFFILIATE PURCHASE ORDER
The Seller may enforce each purchase order only against the BC TEL Affiliate
which has submitted the purchase order.
If a BC TEL Affiliate shall be in breach or default of the Agreement, including,
but not limited to, timely payment for the Product purchased and such breach
shall continue for a period of thirty (30) days after the BC TEL Affiliate's
receipt of the Seller's written notice, then, in addition to all other rights
and remedies of law or equity or otherwise, the Seller shall have the right to
suspend delivery of the Product on outstanding purchase orders or revoke
existing acknowledgments only with respect to the BC TEL Affiliate. Default by
a BC TEL Affiliate shall not affect any other BC TEL Affiliate party to this
Agreement or BC TEL.
9. TERMINATION OF AGREEMENT
BC TEL reserves the right at its exclusive option to cancel any Agreement or
Schedule with the Seller without further obligation or expense of any kind:
. at any time without notice or warning for cause or non-compliance with this
Agreement;
<PAGE>
. upon thirty (30) days written notice during the term of the Agreement for
any reason, whereupon BC TEL shall only be liable for such costs, fees or
expenses as are incurred to that date and not thereafter.
10. INDEMNITY
The Seller shall indemnify and save harmless BC TEL, its directors, officers,
agents and employees, and any applicable BC TEL Affiliate and its directors,
officers, agents and employees, from and against any and all liability
whatsoever for losses, liens, charges, claims, demands, payments, suits,
actions, penalties, recoveries and judgments (including legal fees and expenses)
of every nature and description brought or recovered against either BC TEL, its
directors, officers, agents, employees, and any applicable BC TEL Affiliate and
its directors, officers, agents and employees, or the Seller by reason of an
act, error or omission of the Seller, its agents, employees or licensees in
providing the Product(s), including, without limiting the generality of the
foregoing, loss or damage to property, injury to or the death of any persons,
alleged copyright, patent or other intellectual property rights infringement or
interference, defective design or damage to the environment
11. DELIVERY REQUIREMENTS
. Unless otherwise directed by BC TEL, all product shipments shall be FOB
Origin, Freight Collect using BC TEL specified carrier;
. When applicable, Vendor will be expected to include a Certificate of Origin
with each shipment;
. Where the Seller is to arrange transportation at BC TEL's expense, prior to
shipment the Seller shall contact BC TEL's Transportation Manager at: 520-
2121 for instructions on shipping;
. Failure to ship as directed in points 1, 2, and 3 will result in
chargebacks to the Seller for excess freight charges;
. Delivery lead times shall be from the date of receipt of the Purchase
Order;
. The Seller shall ship Product(s) to BC TEL with a 95% or better service
level in delivery;
. Any incremental costs for shipments due to the Seller shipping late or
beyond lead times shall be at the Seller's sole expense, or will be charged
back to the Seller.
<PAGE>
For all purchase orders, the Seller shall:
i. ship in accordance with specified shipping instructions;
ii. ensure all documents (primary and subordinate), shipping papers, bills of
lading, and packages, bear BC TEL's purchase order number;
iii. enclose a packing slip with each shipment, specifying which package
contains the packing slip if more than one package is shipped;
iv. separately invoice BC TEL to the billing address shown on the Purchase
Order; and
v. if requesting payment for shipping cost incurred on invoice of material,
include copy of freight carrier's invoice to substantiate claim.
The Seller shall be responsible for adequate protective packing and for proper
loading, blocking and bracing of materials shipped in accordance with standard
industry shipping practices.
12. CUSTOMS (FOREIGN SELLERS)
Foreign Sellers' shipments required to be cleared by Canadian Customs must be
accompanied by a copy of the Canada Customs Invoice (CCI) or Commercial Invoice,
completed in accordance with Canadian Customs Regulations, and a Certificate of
Origin or NAFTA Certificate of Origin, if applicable, together with any and all
import/export documents/permits required by foreign customs.
You will be liable to reimburse BC TEL for any expenses or losses associated
with a redetermination by Canada Customs of any NAFTA Certificate of Origin
provided by you to support a shipment.
13. PACKAGING/SKIDS AND PALLETS
Product(s) shall be packaged and packed at no additional charge for shipment in
suitable boxes, reels, bundles, pieces, coils, etc., which shall provide
protection against damage during the shipment, handling, and storage process in
dry, unheated quarters. Shipping containers shall comply with requirements of
Rule 41 of the Canadian Freight Classification guide of ETA 100 or USA National
Motor Freight Classification guide (NMFC). Containers of any type that are too
heavy or too large to be palletized shall contain footings to facilitate fork
truck and/or mechanized handling. In the event skid or pallet loads are
necessary, BC TEL requires that skid or pallet loads not exceed a maximum of 1.5
meters in height.
<PAGE>
14. BILL OF SALE
The Seller agrees to execute and deliver a bill of sale evidencing conveyance of
the Product(s), free and clear of all liens, security interests and
encumbrances, together with such other documents as BC TEL may deem necessary.
15. INSPECTION AND ACCEPTANCE
All Product(s) which are installed shall be subject to BC TEL's right to inspect
and approve of the installed Product for six (6) months following date of
installation.
During the inspection period, BC TEL may reject, in whole or in part, any
Product(s) as nonconforming to the purchase order requirements or the Seller's
advertised or published specifications. Whereupon BC TEL shall give the Seller
written notice of rejection and return the rejected Product(s) FOB Origin
Collect at the Seller's risk and expense.
Only following the expiration of the inspection period without notice of
rejection will acceptance be deemed to occur.
Inspection or failure to inspect shall not affect BC TEL's warranty rights nor
any other rights in law.
16. FORECASTS AND ESTIMATES - RESERVED
17. PRODUCT DISCONTINUANCE
The Seller agrees to give BC TEL 180 days prior written notice of any Product(s)
discontinuance and to honor any purchase orders for such Product(s) received
during the notice period provided that delivery dates are within six (6) months
of the date of the notice of discontinuance.
18. PRICE REVISION
In the event prices decrease during the term of this Agreement, the Seller
agrees, effective immediately, to reduce their invoices accordingly for all
outstanding invoices and or undelivered Purchase Orders.
With respect to on-hand inventory in its original packaging and condition, BC
TEL shall, at its option receive a credit or refund from the Seller within
fourteen (14) days of written request from BC TEL, for the difference between
the price paid by BC TEL and the reduced price for all affected product(s).
In the event the Seller wishes to increase prices following the expiration of
the fixed prices date of this Agreement, the Seller agrees to give BC TEL not
less than ninety (90) days advance written notice of such price increase and to
honor all purchase orders received during that notice period at the old prices.
<PAGE>
19. AFFILIATE REPORTS
When requested by BC TEL, the Seller shall provide BC TEL with a monthly
purchase report for orders placed directly with the Seller by a BC TEL
Affiliate. The report shall list the BC TEL Affiliate, Product purchased under
this Agreement, description, part number, quantities shipped, and associated net
price.
20. PRODUCT DOCUMENTATION
The Seller agrees to provide to BC TEL at no additional charge, reasonable
amounts of Product documentation together with a fully paid license to reproduce
all or some of the Seller's Product documentation for BC TEL's use only.
21. TRADEMARK LICENSE
If BC TEL requests, the Seller agrees to grant to BC TEL the non-exclusive right
to use the Seller's trade name and trademark which use shall be subject to the
Seller's prior review and approval, which shall not be unreasonably withheld or
delayed.
22. PUBLICITY
The parties agree not to publish or use any advertising, sales promotions, press
releases, or publicity matters of the other party without the prior written
approval of the other party. Such approval shall not be unreasonably withheld
or delayed.
23. CONFIDENTIAL INFORMATION
Except for the purposes of providing Product, the Seller shall retain in strict
secrecy, and shall not divulge or use, any information acquired in the course of
providing Product to BC TEL or BC TEL Affiliates, or any information disclosed
to it by BC TEL or BC TEL Affiliates without BC TEL's prior written approval.
24. BC TEL AFFILIATES
The Seller acknowledges that BC TEL may, at its sole discretion, share Vendor,
Product, Price, Lead-time and Specification information and all other
information related to or arising from this Agreement among the BC TEL
Affiliates.
<PAGE>
25. INITIATIVES
The Seller agrees to work with BC TEL during the term of this Agreement to
develop and implement initiatives, such as, Product Standardization, Bar Coding,
Electronic Data Interchange (EDI) where appropriate or requested.
26. ATTACHMENTS
All the terms, conditions contained within the attached Appendices, Schedules
and Exhibits, if any, shall form part of the Agreement and shall have the same
force and effect as if incorporated in the body of the Agreement.
27. PRODUCT FOR RESALE BY BC TEL
In the event BC TEL issues an order for product or related service for resale or
distribution, the Seller agrees Appendix D shall govern over the general terms
of this Agreement where they are in conflict.
28. NO WAIVER
BC TEL may at any time insist upon strict compliance with this Agreement,
regardless of past conduct or practice.
29. ASSIGNMENT
The Seller shall not assign (in any manner including by operation of law) or
sub-contract any of its obligations under this Agreement without the prior
written consent of BC TEL. BC TEL may, from time to time in its sole
discretion, assign or subcontract its rights or obligations under this
Agreement, in whole or in part, to one or more BC TEL Affiliates.
30. SURVIVAL OF OBLIGATIONS
The respective obligations of the parties under this Agreement that by their
nature would continue beyond the termination, cancellation or expiration,
including, but not limited to, obligations to indemnify, insure and maintain
confidentiality and continued availability of Product support, shall survive the
end of the Agreement.
31. ENUREMENT
This Agreement shall enure to the benefit of and be binding on BC TEL and its
successors and assigns. This Agreement shall enure to the benefit of the
Seller, its permitted successors and permitted assigns, and be binding on the
Seller, its successors and assigns.
<PAGE>
32. ARBITRATION
All disputes arising out of or in connection with this Agreement or in respect
of any defined legal relationship associated therewith or derived therefrom
shall be referred to and finally resolved by arbitration under the rules of the
British Columbia International Commercial Arbitration Center and in connection
therewith:
. the appointing authority shall be the British Columbia International
Commercial Arbitration Center;
. the arbitration will be conducted by a single arbitrator unless the Parties
agree otherwise;
. the case shall be administered by the British Columbia International
Commercial Arbitration Center in accordance with its rules;
. the place of arbitration shall be Vancouver, British Columbia, Canada; and
. the language of the arbitration shall be English.
33. GOVERNING LAWS
This Agreement shall be interpreted and governed according to the laws of the
Province of British Columbia.
Should any provision of this Agreement be found to be invalid or unenforceable,
the remainder shall continue to be valid and enforceable.
Section headings are not intended to affect the meaning nor the interpretation
of this Agreement.
34. NOTICES
All notices under this Agreement shall be in writing and shall be deemed
received, if sent to the addresses or FAX numbers of the parties:
a) by FAX on the business day following date of transmission (with the party
taxing bearing the onus of proof that the fax was actually received);
b) by mail, on the date of actual delivery;
c) by registered mail, on the fifth day following date of mailing.
The addresses of the parties on the first page of this Agreement shall be the
registered addresses for all notices, unless written notice is received of a
substitute address.
<PAGE>
35. ENTIRE AGREEMENT
This document together with the BC TEL General Terms, Conditions, the BC TEL
Request for Proposal, if any, and, the accepted portions of any Reply (but only
to the extent that the Reply is not inconsistent with BC TEL's above named
documents), shall form one entire and complete Agreement (the Agreement).
The Agreement shall supersede all prior oral and written communications and
representations.
The Agreement may only be amended in writing signed by both parties or their
fully authorized representatives.
AGREEMENT ENTERED INTO May 17, 1999.
------------
For: BC TEL For: GoDigital Telecommunications
/s/ Rick Wong /s/ Frank I. Akers
------------------------- ------------------------------
Rick Wong Authorized Signatory
Corporate Contracts
Frank I. Akers
------------------------------
Name
President and CEO
------------------------------
Title
<PAGE>
SCHEDULE "A" TO PURCHASE AGREEMENT
PRODUCT DESCRIPTIONS & SELLER'S PRICES
<PAGE>
SCHEDULE A
B983503PC027 - GDSL-8 DIGITAL SUBSCRIBER LINE CARRIER
<TABLE>
<CAPTION>
ITEM# ITEM ID DESCRIPTION PART PRICE
US
<S> <C> <C> <C> <C>
1 8001173 CTU CO Terminal Unit 990073 [*]
2 8001172 API Alarm & Power Unit 990072 [*]
3 8001174 STR Straight Through Repeater 990064 [*]
4 8001176 ADR2 Add Drop Repeater With 2 Drops 990089 [*]
5 8001177 ADR4 Add Drop Repeater With 4 Drops 990100 [*]
6 8001178 TAD2 Terminal Add Drop With 2 Drops 990090 [*]
7 8001179 TAD4 Terminal Add Drop With 4 Drops 990101 [*]
8 8001192 STRM 239 Repeater Electronics Card 990102 [*]
9 8001175 RTU8 Remote Terminal Unit 81 Lines 990091 [*]
10 8001170 19" Shelf GDSL-8 990071 [*]
</TABLE>
LEAD TIME: 15 Days
WARRANTY: 2 Years
TERMS: Net 30 Days
F.O.B.: Origin, Fremont
SHIP VIA: Nationsway Transport Collect
<PAGE>
SCHEDULE "B" TO PURCHASE AGREEMENT
RESERVED
SCHEDULE "C" TO PURCHASE AGREEMENT
RESERVED
<PAGE>
APPENDIX A
WARRANTY RIGHTS
The Seller warrants that:
. the Product(s) shall be free from defects in material and workmanship for a
period of two (2) years from date of delivery to BC TEL;
. the Product(s) shall conform to and perform in accordance with BC TEL's
specifications for two (2) years from date of delivery to BC TEL;
. any replacement, repair modification, installation, or other service
performed by the Seller shall be warranted to the same extent as above for
the expiration of the warranty period or for ninety (90) days, whichever is
longer.
The Seller's warranty does not apply if the Product has been:
. subject to misuse, neglect, accident or abuse not caused by Seller or by
Seller's authorized agent;
. wired, repaired or altered by anyone other than the Seller or by Seller's
authorized agent;
. improperly installed by other than the Seller or by Seller's authorized
agent;
. used in violation of the appropriate written instructions furnished by the
Seller or by the Seller's authorized agent;
. subjected to improper temperature, humidity or other environmental conditions
and such action is the cause of the damage or malfunction.
NOTE: FOR THE PURPOSES OF THIS WARRANTY INSTALLATION BY EMPLOYEES OF BC
- ----
TEL OR ANY BC TEL AFFILIATE SHALL BE CONSIDERED TO BE INSTALLATION,
WIRING, REPAIR OR ALTERATION BY AN AUTHORIZED AGENT OF THE SELLER.
RETURN AUTHORIZATION PROCEDURES
To authorize a return, BC TEL shall obtain from the Seller and the Seller shall
provide a Return Authorization (RA) number or equivalent authorization. All
returns of Product(s) shall be made within sixty (60) days of the issuance of
the RA number or equivalent authorization. Unauthorized returns shall be
returned to BC TEL at BC TEL's risk and expense.
<PAGE>
DEFECTIVE PRODUCT RIGHTS
Unless otherwise agreed, all defective Product(s) under warranty shall be
returned to the Seller for repair or replacement at no charge to BC TEL.
The Seller shall complete repairs and ship the repaired Product(s), or, at its
option, ship replaced Product(s), within ten (10) days of receipt of the
defective Product(s), following procedures of return as directed in the letter
accompanying return of the Product(s).
BC TEL shall bear the risk of in-transit loss or damage only until the
Product(s) is placed in the possession of a freight carrier or courier/third
party intermediary whereupon thereafter the Seller shall bear all risks and
costs for shipping and return to BC TEL.
STANDARDS
All Product(s) supplied or used shall comply with the applicable requirements of
the Industry Canada Standard and/or Canadian Standards Association (CSA) Rules
and Regulations.
All installations and repairs shall also comply with the above Rules,
Regulations and requirements.
INTERFERENCE
If any Product(s) which was installed generates interference harmful to radio
and other communications, then the Seller shall, within thirty (30) days of
notification, provide BC TEL with methods for suppressing such interference, or,
failing that, to accept return of the Product(s), refund to BC TEL of the price
less a reasonable allowance for depreciated value and bear all expenses for
removal, for up to one year from installation
<PAGE>
APPENDIX B
REPAIRS WHERE PRODUCT(S) NOT DEFECTIVE OR UNDER WARRANTY
If the Seller determines a returned Product is not defective or is not under
warranty, the Seller shall promptly advise BC TEL in writing of this
determination.
REPAIRS NOT COVERED BY WARRANTY
In addition to warranty repairs, if requested by BC TEL, the Seller agrees to
provide non-exclusive repair services at the Seller's prevailing repair charge
rates on all Product(s) ordered during the period under which Product(s) is
manufactured by the Seller and for a period of five (5) years after the
Product(s) manufactured has been discontinued.
If Product(s) is irreparable, the Seller shall promptly notify BC TEL in writing
and BC TEL may, at its option, purchase replacement(s) from the Seller at prices
as described in Exhibit B or current prices, whichever is lower.
The Seller shall perform all repairs or provide replacement Product(s) in
accordance with the specifications herein. New parts only shall be used. Parts
removed shall become the Seller's property and parts installed shall become BC
TEL's property.
The Seller shall make its best efforts to complete repairs and ship the repaired
Product(s) or, at its option, ship replacement Product(s) within thirty (30)
days of receipt of the defective Product(s).
SERVICE INTERRUPTIONS
In the event of service interruption requiring immediate on-site repair, BC TEL
may require the Seller to commence on-site repairs one (1) business day
following the request for on-site repairs.
IN-HOUSE REPAIRS
BC TEL reserves, at its option, the right to perform in-house repairs to
Product(s) without affecting the Seller's warranties providing the repair is
performed by an employee or subcontractor of BC TEL who has been certified by
the Seller as an authorized repairer.
Repair documentation to be provided to BC TEL shall include, but not limited to,
the following:
i. circuit drawings and explanations;
ii. assembly drawings;
iii. material lists;
iv. art work drawings;
v. component specifications;
vi. supplier cross references;
<PAGE>
vii. repair procedure specifications;
viii. engineering change orders; and
ix. generic component piece part cross reference.
Except as provided in Section I of this exhibit, no repair effected by BC TEL
under this Agreement shall affect any warranty afforded to BC TEL.
CONTINUING AVAILABILITY OF SPARES
During the period the Product(s) is manufactured by the Seller and for five (5)
years following discontinuance, the Seller agrees to offer for sale to BC TEL
functionally equivalent replacement and repair components.
Additionally, where the manufacturer discontinues the Product and the Seller is
not the manufacturer, the Seller shall offer repair services for all Product(s)
for a period of five (5) years and Product replacement parts for a period of ten
(10) years.
In the event the Seller is unable to supply such parts themselves or from
another source of supply, the Seller shall, without obligation or charge to BC
TEL, provide to BC TEL all necessary drawings, technical information,
specifications and all other data and expertise to allow BC TEL to either
manufacture or buy such parts. All such information shall be used by BC TEL
only for the maintenance, repair or manufacture of replacement or spare parts
for BC TEL or BC TEL Affiliates.
EMERGENCY REPLACEMENT SERVICE
Additionally, in the event an "out-of-box" failure resulting in a service
impairment occurs and is caused by the Product(s) furnished herein, the Seller
agrees to ship replacement parts within twenty-four (24) hours of verbal
notification by BC TEL, at no charge, providing the defective part is returned
to the Seller within thirty (30) days of receipt of the replacement part.
In the event of an emergency, such as "out of service condition", the Seller
agrees to ship replacement parts within forty-eight (48) hours of verbal
notification by BC TEL, provided that BC TEL shall also maintain a reasonable
quantity of replacement parts for each Product(s). Those emergency replacement
parts shall be billable at the Seller's current list price less applicable BC
TEL discounts.
In order to facilitate emergency repairs, the Seller agrees to provide a normal
working-hours telephone number and an emergency contact after-hours telephone
number.
<PAGE>
APPENDIX C
TECHNICAL ASSISTANCE SUPPORT
The Seller agrees to provide to BC TEL, at no additional charge, twenty four
(24) hour per day, seven days per week, all necessary Customer Technical
Assistance support as BC TEL may from time to time require during the warranty
period of the product.
Additionally, if requested by BC TEL, for five (5) calendar days following first
installation of newly developed Product(s), the Seller shall provide, at no
additional charge, a fully qualified engineer conversant with the Product(s) and
installation thereof.
ON-SITE ASSISTANCE
The Seller agrees to be available to furnish on-site assistance, both on an
emergency basis for an out of service condition within twenty-four (24) hours
from BC TEL's request and under normal conditions within forty-eight (48) hours,
at the Seller's prevailing rates.
SUB-CONTRACTING BY BC TEL
In the event BC TEL uses sub-contractors for installation and maintenance
services, such subcontractors shall be chosen from a mutually agreed upon,
confidential list of approved subcontractors.
<PAGE>
APPENDIX D
PRODUCT FOR RESALE BY BC TEL
SCOPE
If BC TEL issues an Order for Product or related Service for resale or for
distribution to other customers, the terms, conditions of this Appendix apply.
RESALE
BC TEL may purchase Product and Service for its own use, to provide services to
third parties, for resale to end users, or for distribution. This Agreement
shall not be construed to (i) require BC TEL to purchase any specific amount of
Product or Service, or (ii) require BC TEL to sell any, all or a portion of the
Product or Service it orders, or (iii) unless otherwise specified in this
Agreement, restrict the resale and or distribution of the Product or Service.
RESELL INDEMNITY
The Seller agrees to indemnify and save harmless BC TEL, its directors,
officers, agents, employees and any applicable BC TEL Affiliate and its
directors, officers, agents and employees from and against any and all liability
whatsoever for losses, liens, charges, claims, demands, payments, suits,
actions, penalties, recoveries and judgments (including legal fees and expenses)
of every nature and description brought or recovered against those parties or
the Seller by reason of any product defect, whether of design, manufacture or
otherwise, or any failure by the Seller to honor any warranties, conditions,
repair obligations or representations made by it, or by BC TEL or any BC TEL
Affiliate in accordance with this Agreement in the course of sale of such
products to third parties.
PRODUCT WARRANTIES AND CLAIMS
The Seller warrants that it has or will pass title, free of all liens and
encumbrances, to all Products that are sold or leased to BC TEL and to BC TEL's
end users or customers.
BC TEL will pass through the Seller's warranty, as set forth in Attachment 1 to
this Appendix, to its end users or customers and which warranty shall state that
all Product will conform to all Specifications, statement of work and other
requirements set forth in this Agreement, including any Orders, will be free
from material defects in materials and workmanship, and, except for any Product
manufactured or developed in accordance with a detailed design furnished by BC
TEL or their end users or customers, shall be free from material defects in
design.
<PAGE>
TRADEMARK LICENSE
The Seller grants to the BC TEL the nonexclusive right to use the Seller's trade
names and trademark in marketing the Seller's Product. BC TEL agrees to
designate the Product properly and depict the marks accurately.
INVENTORY RETURN
The Seller agrees that BC TEL may at no cost, return for refund or exchange
Product of its selection with a total purchase price of all returned or
exchanged Product not to exceed [*] of the total purchase price for all Product
purchased by BC TEL from the Seller for the previous twelve (12) months
excluding taxes and freight charges.
If the Product shipped in exchange is less in price than the returned Product,
the Seller shall issue BC TEL a credit for the difference in price between the
Product returned and the exchanged Product.
BC TEL will notify the Seller in writing of its intent to return the Product, BC
TEL agrees to ship the returned Product and the Seller agrees to deliver the
exchanged Product FOB: Origin, Freight Collect, within thirty (30) days of
notification by BC TEL.
The Seller agrees to issue a credit for the returned Product within fourteen
(14) days of receipt equal to the actual purchase price of the returned Product.
The Product returned must be in the original condition and carton, if any. Any
return under this section does not limit BC TEL's warranty rights under this
Agreement.
REPORTING
When requested by the Seller, BC TEL shall provide a monthly Report (Point of
Sale) listing each Resale Purchase Order shipped, such Report will detail the
customer, product shipped, part number, description, quantities shipped and
associated net prices.
PRODUCT LITERATURE
The Seller agrees to provide BC TEL with reasonable amounts of Product
literature, at no additional charge, to properly support the Seller's Product.
The Seller hereby grants BC TEL a fully paid license, at no additional charge,
for the term of this Agreement, to copy or otherwise reproduce all or portions
of the Seller's Product brochures, or to incorporate portions of the Seller's
copyrighted material in Product brochures or advertising material composed by BC
TEL. Such reproduction shall not apply to proprietary and/or confidential
information and shall be subject to all applicable copyright laws.
<PAGE>
APPENDIX E
TRAINING SUPPORT
Where BC TEL determines it to be appropriate, to support the purchase of the
proposed Product(s) and/or services ("the System"), the successful Seller must
be prepared to provide, at no additional cost, the following training, equipment
and support which shall meet or exceed applicable industry standards:
. BASIC SUPPORT
The Seller shall provide supporting manuals, textbooks, documentation and
reference material in written format no later than upon the delivery or
installation of the System.
. ADVANCED TRAINING
If BC TEL determines that one or more employees will require training to
support or use the system, the Seller shall provide either of the
following:
a) if practical, the Seller shall provide such training as is, in BC
TEL's opinion, required to certify such employees as BC TEL may
select as qualified in-house instructors in the proposed System.
b) if in BC TEL's opinion, the use of BC TEL instructors is not
practical, then the Seller shall provide qualified instructors
for such employees as BC TEL may select to train to support or
use the proposed System.
In either event, the location of training shall be chosen by BC TEL.
. EQUIPMENT SUPPORT
The Seller shall provide to BC TEL all equipment necessary to support
initial and on-going training requirements on the proposed System, timed to
support BC TEL's training schedule.
Training equipment shall include all enhancements and/or upgrades to the
proposed System as are or may become available and shall include all
warranties and service support as apply to the purchase of the proposed
System.
. ADDITIONAL/FOLLOW-UP TRAINING
Where BC TEL determines additional or follow-up training is necessary, the
Seller shall provide such further training as may be required by BC TEL.
<PAGE>
APPENDIX F
SOFTWARE LICENSE
BC TEL or its officers, agents and employees, and/or any applicable BC TEL
Affiliate and its officers, agents and employees, are hereby granted a non-
exclusive, paid-up, non transferable license to use software Product(s) or
software which ordinarily comes with the Product(s), only in connection with the
Product(s).
The software provided by the Seller to BC TEL, together with any enhancements,
modifications, extensions or expansions thereof shall be the property of the
Seller and treated as a Trade Secret by BC TEL.
BC TEL agrees to use its best efforts to:
. modify the software @l with the prior written consent of the Seller;
. reproduce or copy the software, in whole or in part, provided Seller's
copyright and/or proprietary notices are also reproduced or copied
therewith, for the sole use by BC TEL in connection with the use of
the Product(s) only in accordance with the law, and with the prior,
written consent of the Seller;
. only disclose proprietary information regarding the software to its
employees on a "need to know" basis, without the prior written consent
of the Seller;
. hold all aspects of the software including the documentation or other
material associated with the software in confidence for the benefit of
the Seller and Seller's suppliers, as appropriate; and
. utilize the software or any portions or aspects (including any methods
or concepts utilized which are trade secrets) solely in conjunction
with the Product(s).
The obligations of BC TEL shall survive termination of this Agreement and shall
continue even if the software is no longer utilized with the Product(s).
However, BC TEL's obligations of confidentiality will not extend to information
or data which is now available to the general public nor to that which becomes
available by reasons of unlawful acts or failures to act not attributable to BC
TEL.
<PAGE>
SOFTWARE VIRUS
The Seller certifies and covenant that software provided to BC TEL whether in
the form of disk or otherwise, has been tested to ensure it is free from viruses
and the Seller hereby certifies that it has taken steps to ensure that software
delivered by it to BC TEL is free of such viruses. The Seller agrees to
indemnify and hold harmless BC TEL from and against any claims for loss or
damages arising from delivery of, or use of software containing viruses.
SOFTWARE ACCESS CONFIDENTIALITY
If Seller is given access, whether on-site or through remote facilities, to BC
TEL or any BC TEL Affiliate (BC TEL) computer or electronic data storage system
in order for Seller to accomplish the work called for in this Agreement, Seller
shall limit such access and use solely to perform work within the scope of this
Agreement and shall not access or attempt to access any computer system,
electronic file, software or other electronic services other than those
specifically required to accomplish the work required under this Agreement.
Seller shall limit such access to those of its employees who are qualified and
required, subject to BC TEL required written authorization, to have such access
in connection with this Agreement, and shall strictly follow all BC TEL's
security rules and procedures for use of BC TEL's electronic resources. All
user identification numbers and passwords disclosed to Seller and any
information obtained by Seller as a result of Seller's access to and use of BC
TEL's computer and electronic data storage systems shall be deemed to be, and
shall be treated as, BC TEL Confidential Information under applicable provisions
of this Agreement. Seller agrees to cooperate with BC TEL in the investigation
of any apparent unauthorized access by Seller to BC TEL's computer or electronic
data storage systems or unauthorized release of Confidential Information by
Seller.
<PAGE>
CENTURY COMPLIANCE
A) When used in this Exhibit with initial capital letters, the following terms
have the respective meanings given below.
i) "Procured System" means the computer software, computer firmware,
computer hardware (whether general or special purpose), documentation,
data, and other similar or related items of the automated,
computerized, and/or software system(s) that are provided by or
through Seller pursuant to this Agreement, or any component part
thereof, and any services provided by or through Seller in connection
therewith.
ii) "Calendar-Related" refers to date values based on the Gregorian
calendar, as defined in Encyclopedia Britannica, 15th edition, 1993,
page 476, and to all uses in any manner of those date values,
including without limitation manipulations, calculations, conversions,
comparisons, and presentations.
iii) "Date Data" means any Calendar-Related data value in the inclusive
range January 1, 1990, through December 31, 2050, which the Procured
System uses in any manner.
iv) "System Date" means any Calendar Related data value in the inclusive
range January 1, 1985, through December 31, 2035 (including the
natural transition between such values), which the Procured System
shall be able to use as its current date while operating.
v) "Century Compliant" means that the Procured System satisfies the
requirements set forth in Clause (B), (C), and (D) below.
vi) "Century Noncompliance" or "Century Noncompliant" means any failure of
the Procured System to be Century Compliant.
B) Seller represents that, in connection with Calendar-Related data and
Calendar-Related processing of Date Data or of any System Date, the
Procured System will not malfunction, will not cease to function, will not
generate incorrect data, and will not produce incorrect results.
C) Seller further represents that, in connection with providing Calendar-
Related data to and accepting Calendar-Related data from other automated,
computerized, and/or software systems and users via user interfaces,
electronic interfaces, and data storage, the Procured System represents
dates without ambiguity as to century.
<PAGE>
D) Seller further represents that Seller has verified through testing that the
Procured System is Century Compliant and that testing included, without
limitation, each of the following specific dates and the transition to and
from each such date: December 31, 1998; January 1, 1999; September 9, 1999;
September 10, 1999; December 31, 1999; January 1, 2000; February 28, 2000;
February 29, 2000; March 1, 2000; December 31, 2000; January 1, 2001;
December 31, 2004; and January 1, 2005.
E) These representations survive the expiration or earlier termination of this
Agreement.
INTERFACING
If the Procured System is a Commercial-Off-The-Shelf (COTS) product, it shall
have the present capability, which can be readily utilized by BC TEL, of
providing Calendar-Related data to and accepting Calendar-Related data from
other automated, computerized, and/or software systems and users in a four-digit
CCYY format, where CC are the two digits expressing the century and YY are the
two digits expressing the year with that century (e.g., 1996, 2003 and 2027).
CENTURY NONCOMPLIANCE REMEDY
In the event the Procured System is Century Noncompliant in any respect, Seller
shall, at no cost to BC TEL, promptly correct the Century Noncompliance and
provide the corrected Century Compliant Procured System to BC TEL within ninety
(90) days after receipt of a written request from BC TEL, unless otherwise
agreed by BC TEL in writing.
NONCOMPLIANCE NOTICE
In the event Seller becomes aware of (i) a possible or an actual Century
Noncompliance in the Procured System or (ii) any international, governmental,
industrial, or other standard (proposed or adopted) regarding Calendar-Related
data and/or processing, or it begins any significant effort to conform the
Procured System to any such standard, Seller shall promptly inform BC TEL of all
relevant information (and timely provide BC TEL updates to such information)
with respect to Seller's knowledge. Seller shall respond promptly and fully to
inquiries by BC TEL (and timely provide BC TEL updates to such information) with
respect to Seller's knowledge. Seller shall respond promptly and fully to
inquiries by BC TEL (and timely provide updates to any responses provided to BC
TEL) interalia, inquiries with respect to (i) any possible Century Noncompliance
in the Procured System or to (ii) any international, governmental, industrial,
or other standards. In the foregoing, the use of "timely" means promptly after
the relevant information becomes known to or is developed by or for Seller.
<PAGE>
EXHIBIT 10.3
MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE
Effective Date: June 1, 1999
BASIC LEASE INFORMATION
-----------------------
Landlord: CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
Landlord's Address 201 Mission Street
For Notice: San Francisco, California 94105
Attn: Asset Management
Telephone: (415) 974-4500
Fax: (415) 974-4687
Landlord's Address File #1918
For Payment of Rent: P.O. Box 61000
San Francisco, California 94161-1918
Tenant: GODIGITAL TELECOMMUNICATIONS, INC.,
a California corporation
Tenant's Address Prior to Commencement Date:
For Notice: GoDigital Telecommunications, Inc.
41305 Albrae Street
Fremont, California 94538
Attn: President
Telephone: (510) 226-8289
Fax: (510) 226-8785
After the Commencement Date:
At the Premises.
Project: Pacific Business Center
Building: Phase III, which consists of approximately
102,656 rentable square feet.
Premises: Approximately 46,226 rentable square feet
as shown in Exhibit A.
---------
Premises Address:
Street: 41652 Boscell Road
City and State: Fremont, California
Term: Sixty (60) months, with one option to
renew for a period of five (5) years (see
Article 21 below)
Estimated Commencement
Date: August 1, 1999
Base Rent: Months Monthly Base Rent
------ -----------------
1-12 $35,594.02
13-24 $37,017.78
25-36 $38,498.49
37-48 $40,038.43
49-60 $41,639.97
Tenant's Share of Building Expenses: 45.04%
Tenant's Share of Operating Expenses: 45.04%
Security Deposit: $83,279.94
Letter of Credit Amount: $220,000.00
Broker: Landlord's Broker: Colliers
International, Inc.
Tenant's Broker: Grubb & Ellis
Lease Year: Shall refer to each twelve month period
during the Term commencing on the
Commencement Date.
Permitted Uses: Office, assembly, warehousing,
distribution, light manufacturing,
research and development and no other uses
shall be permitted without the prior
written consent of Landlord.
Options: One option to renew for a period of five
(5) years (see Article 21 below)
Guarantor(s): None.
EXHIBITS
A Premises
B Work Letter
C Commencement Date Memorandum
D Prohibited Uses
E Rules and Regulations
F Requirements for Improvements or Alterations by Tenant
G Estoppel Certificate
The Basic Lease Information set forth above and the Exhibits attached
hereto are incorporated into and made a part of the following Lease. Each
reference in this Lease to any of the Basic Lease Information shall mean the
respective information above and shall be construed to incorporate all of the
terms provided under the particular Lease paragraph pertaining to such
<PAGE>
information. In the event of any conflict between the Basic Lease Information
and the provisions of the Lease, the latter shall control.
LANDLORD ( /s/ DDL ) AND TENANT ( /s/ FIA ) AGREE.
----------- -----------
initial initial
ii
<PAGE>
Table of Contents
-----------------
<TABLE>
<CAPTION> Page
----
<S> <C>
1. PREMISES.............................................................................................. 1
1.1 Premises..................................................................................... 1
1.2 Common Area.................................................................................. 1
1.3 Reserved Rights.............................................................................. 1
2. TERM.................................................................................................. 2
2.1 Commencement Date............................................................................ 2
2.2 Early Occupancy.............................................................................. 2
3. RENT.................................................................................................. 3
3.1 Rent......................................................................................... 3
3.2 Late Charge and Interest..................................................................... 3
3.3 Security Deposit............................................................................. 4
4. UTILITIES............................................................................................. 4
5. TAXES................................................................................................. 4
5.1 Real Property Taxes.......................................................................... 4
5.2 Definition of Real Property Taxes............................................................ 5
5.3 Personal Property Taxes...................................................................... 5
6. OPERATING EXPENSES.................................................................................... 5
6.1 Operating Expenses........................................................................... 5
6.2 Definition of Operating Expenses............................................................. 6
7. ESTIMATED EXPENSES.................................................................................... 8
7.1 Payment...................................................................................... 8
7.2 Adjustment................................................................................... 8
8. INSURANCE............................................................................................. 8
8.1 Landlord..................................................................................... 8
8.2 Tenant....................................................................................... 9
8.3 General...................................................................................... 10
8.4 Indemnity.................................................................................... 11
8.5 Exemption of Landlord from Liability......................................................... 11
9. REPAIRS AND MAINTENANCE............................................................................... 12
9.1 Tenant....................................................................................... 12
9.2 Landlord..................................................................................... 13
</TABLE>
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<TABLE>
<S> <C>
10. ALTERATIONS........................................................................................... 13
10.1 Trade Fixtures; Alterations.................................................................. 13
10.2 Damage; Removal.............................................................................. 14
10.3 Liens........................................................................................ 15
10.4 Standard of Work............................................................................. 15
11. USE................................................................................................... 15
12. ENVIRONMENTAL MATTERS................................................................................. 16
12.1 Hazardous Materials.......................................................................... 16
12.2 Indemnification.............................................................................. 17
13. DAMAGE AND DESTRUCTION................................................................................ 18
13.1 Casualty..................................................................................... 18
13.3 Uninsured Casualty........................................................................... 19
13.4 Waiver....................................................................................... 20
14. EMINENT DOMAIN........................................................................................ 20
14.1 Total Condemnation........................................................................... 20
14.2 Partial Condemnation......................................................................... 20
14.3 Award........................................................................................ 20
14.4 Temporary Condemnation....................................................................... 21
15. DEFAULT............................................................................................... 21
15.1 Events of Defaults........................................................................... 21
15.2 Remedies..................................................................................... 22
15.3 Cumulative................................................................................... 23
16. ASSIGNMENT AND SUBLETTING............................................................................. 23
17. ESTOPPEL, ATTORNMENT AND SUBORDINATION................................................................ 26
17.1 Estoppel..................................................................................... 26
17.2 Subordination................................................................................ 26
17.3 Attornment................................................................................... 27
18. INTENTIONALLY DELETED................................................................................. 27
19. MISCELLANEOUS......................................................................................... 27
19.1 General...................................................................................... 27
19.2 Signs........................................................................................ 28
19.3 Waiver....................................................................................... 28
19.4 Financial Statements......................................................................... 29
19.5 Limitation of Liability...................................................................... 29
19.6 Notices...................................................................................... 29
19.7 Brokerage Commission......................................................................... 29
</TABLE>
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<TABLE>
<S> <C>
19.8 Authorization................................................................................ 30
19.9 Holding Over; Surrender...................................................................... 30
19.10 Joint and Several............................................................................ 30
19.12 Auctions..................................................................................... 31
19.13 Consents..................................................................................... 31
19.14 Force Majeure................................................................................ 31
19.15 Mortgagee Protection......................................................................... 31
19.17 Hazardous Substance Disclosure............................................................... 32
19.18 Intentionally Deleted........................................................................ 32
19.19 Reasonable Expenditures...................................................................... 32
19.20 Parking...................................................................................... 32
20. LETTER OF CREDIT...................................................................................... 32
20.1 Delivery..................................................................................... 33
20.2 Expiration................................................................................... 34
</TABLE>
v
<PAGE>
1. PREMISES.
1.1 Premises. Landlord hereby leases to Tenant the Premises as shown on
--------
Exhibit A attached hereto, but excluding the Common Area (defined below) and any
other portion of the Project. Tenant has determined that the Premises are
acceptable for Tenant's use and Tenant acknowledges that, except as set forth in
the Work Letter, if any, neither Landlord nor any broker or agent has made any
representations or warranties in connection with the physical condition of the
Premises or their fitness for Tenant's use upon which Tenant has relied directly
or indirectly for any purpose. By taking possession of the Premises, Tenant
accepts the Premises "AS-IS" and waives all claims of defect in the Premises,
except as set forth in the Work Letter. Notwithstanding the foregoing, Landlord
warrants and represents that, to Landlord's actual knowledge (which shall mean
the actual knowledge of Don Little, Christopher Peatross, and Randy Simmering)
as of the Commencement Date, (i) the Premises, the Building, and the Project
will comply with all "Applicable Laws" (as defined in Article 11 below), (ii)
the Premises will be in good and clean operating condition and repair, (iii) the
electrical, mechanical, HVAC, plumbing, sewer, elevator and other systems
serving the Premises and the Building will be in good operating condition and
repair, and (iv) the roof of the Building will be in good condition and water
tight; provided, however, such representation shall only relate to the Premises,
the Building and the Project, exclusive of Tenant's, or any other tenant's or
subtenant's, specific use of the Premises, the Building or the Project. As
Tenant's sole remedy with respect to any noncompliance with the foregoing,
Landlord shall, promptly after receipt of notice from Tenant, remedy any such
noncompliance at Landlord's sole cost and expense.
1.2 Common Area. Tenant may, subject to rules made by Landlord, use the
-----------
following areas ("Common Area") in common with Landlord and other tenants of the
Project: refuse facilities, landscaped areas, driveways necessary for access to
the Premises, parking spaces and other common facilities designated by Landlord
from time to time for the common use of all tenants of the Project.
1.3 Reserved Rights. Landlord reserves the right to enter the Premises
---------------
for any reason upon reasonable notice to Tenant (or without notice in case of an
emergency) and/or to undertake the following all without abatement of rent or
liability to Tenant: inspect the Premises and/or the performance by Tenant of
the terms and conditions hereof; make such alterations, repairs, improvements or
additions to the Premises as required or permitted hereunder; change boundary
lines of the Common Areas; install, use, maintain, repair, alter, relocate or
replace any pipes, ducts, conduits, wires, equipment and other facilities in the
Common Area or the Building; grant easements on the Project, dedicate for public
use portions thereof and record covenants, conditions and restrictions ("CC&Rs")
affecting the Project and/or amendments to existing CC&Rs which do not
unreasonably interfere with Tenant's use of the Premises or impose additional
material monetary obligations on Tenant; change the name of the Project; affix
reasonable signs and displays; and, during the last six (6) months of the Term,
place signs for the rental of, and show the Premises to prospective tenants. In
exercising any of the foregoing rights, Landlord shall comply with Tenant's
reasonable security measures and operating procedures and shall use its best
efforts to minimize any disruption to Tenant. Landlord shall not exercise any
such rights in such manner as would unreasonably interfere with Tenant's use of,
<PAGE>
access to, or parking at the Premises or materially increase the obligations or
decrease the rights of Tenant under this Lease.
2. TERM.
----
2.1 Commencement Date. The Term of the Lease shall commence
-----------------
("Commencement Date") on the first day following the date on which Landlord
delivers to Tenant the Premises Substantially Complete (as hereinafter defined),
and the Lease shall continue in full force and effect for the period of time
specified as the Term or until this Lease is terminated as otherwise provided
herein. The Premises shall be deemed to be "Substantially Complete" on the
earliest of the date on which: (1) Landlord files or causes to be filed with
the City in which the Premises are located (if required) and delivers to Tenant
an architect's notice of substantial completion, or similar written notice that
the Premises are substantially complete, (2) Tenant commences business
operations in the Premises, or (3) a certificate of occupancy (or a reasonably
substantial equivalent such as a signoff from a building inspector or a
temporary certificate of occupancy) is issued for the Premises. Landlord shall
arrange for the construction of certain Tenant Improvements (as defined in the
Work Letter), if any, in accordance with and subject to the terms of the Work
Letter attached hereto as Exhibit B. Tenant shall, upon demand after delivery
---------
of the Premises to Tenant, execute and deliver to Landlord a Commencement Date
Memorandum in the form attached hereto as Exhibit C acknowledging (i) the
---------
Commencement Date, (ii) the final square footage of the Premises and (iii)
Tenant's acceptance of the Premises. If the Premises are not Substantially
Complete on the Estimated Commencement Date as extended by Force Majeure events
and Tenant Delays (as defined in the Lease or Work Letter, if any), this Lease
shall remain in effect, Landlord shall not be subject to any liability, and the
Commencement Date shall be delayed until the date the Premises are Substantially
Complete. Notwithstanding the foregoing, the Commencement Date shall not occur
until the later of August 1, 1999, or (unless waived by Tenant in writing) the
date by which all of the following have occurred: (a) Landlord have delivered
possession of the Premises to Tenant; (b) Landlord has in fact substantially
completed construction and installation of the Tenant Improvements; and (c)
Landlord has obtained all approvals and permits from the appropriate
governmental authorities required for the legal occupancy of the Premises for
Tenant's intended use. If the Commencement Date has not occurred for any
reason, other than Tenant Delays, on or before December 1, 1999, then, in
addition to Tenant's other rights and remedies, Tenant may terminate this Lease
by written notice to Landlord, whereupon any monies previously paid by Tenant to
Landlord shall be reimbursed to Tenant and Landlord shall return the Letter of
Credit to Tenant.
2.2 Early Occupancy. Landlord shall regularly keep Tenant advised as to
---------------
the progress of construction and installation of the Tenant Improvements.
Landlord shall grant Tenant and its agents, contractors and representatives
access to and occupancy of the Premises for thirty (30) days prior to the
anticipated Commencement Date so as to allow Tenant to install wiring, cabling,
telephone and telecommunications systems, ESD flooring, and trade fixtures.
Tenant's occupancy of the Premises during such period shall be subject to all of
the terms and conditions of this Lease, except that Tenant shall have no
obligation to pay Rent for such period. In connection with such early
occupancy, Landlord shall not be responsible for theft, damage or
-2-
<PAGE>
destruction to any work or material installed or stored by Tenant or any
contractor or individual involved in the construction of the Tenant
Improvements.
3. RENT.
----
3.1 Rent. Tenant shall pay to Landlord, at Landlord's Address for Payment
----
of Rent designated in the Basic Lease Information, or at such other address as
Landlord may from time to time designate in writing to Tenant for the payment of
Rent, the Base Rent, without notice, demand, offset or deduction, in advance, on
the first day of each calendar month; provided, however, that, notwithstanding
anything set forth in this Lease to the contrary, Base Rent shall be abated for
the first 21 days of the term of this Lease. Landlord shall have no obligation
to notify Tenant of any increase in Rent and Tenant's obligation to pay all Rent
(and any increases) when due shall not be modified or altered by such lack of
notice from Landlord. It is intended that this Lease be a "triple net lease,"
and that the Rent to be paid hereunder by Tenant will be received by Landlord
without any deduction or offset whatsoever by Tenant, foreseeable or
unforeseeable. Except as expressly provided to the contrary in this Lease,
Landlord shall not be required to make any expenditure, incur any obligation, or
incur any liability of any kind whatsoever in connection with this Lease or the
ownership, construction, maintenance, operation or repair of the Premises or the
Project. Upon the execution of this Lease, Tenant shall pay to Landlord the
Base Rent for the fourth through the seventh weeks of the term of this Lease
(based on the fact that the first three weeks Base Rent for the first month of
the term of this Lease has been abated) with the effect being that on the first
day of the second month of the term of this Lease, Tenant's Base Rent payment
shall be $10,678.21, representing Base Rent for the last week of the second
month of the term of this Lease. If the Term commences (or ends) on a date
other than the first (or last) day of a month, Base Rent shall be prorated on
the basis of a thirty (30) day month. All sums other than Base Rent which
Tenant is obligated to pay under this Lease shall be deemed to be additional
rent due hereunder ("Additional Rent"), whether or not such sums are designated
Additional Rent and, together with the Base Rent, shall be due and payable to
Landlord commencing on the Commencement Date; provided, however, that,
notwithstanding anything set forth in this Lease to the contrary, Additional
Rent shall be abated for the first 21 days of this Lease. The term "Rent" means
the Base Rent and all Additional Rent payable hereunder.
3.2 Late Charge and Interest. The late payment of any Rent will cause
------------------------
Landlord to incur additional costs, including administration and collection
costs and processing and accounting expenses and increased debt service
("Delinquency Costs"). If Landlord has not received any installment of Rent
within five (5) days after Tenant has received written notice from Landlord that
such amount is due, Tenant shall pay a late charge of five percent (5%) of the
delinquent amount, which is agreed to represent a reasonable estimate of the
Delinquency Costs incurred by Landlord. In addition, all such delinquent
amounts shall bear interest from the date such amount was due until paid in full
at a rate per annum ("Applicable Interest Rate") equal to the lesser of (a) the
maximum interest rate permitted by law or (b) five percent (5%) above the rate
publicly announced by Bank of America, N.A. (or if Bank of America, N.A. ceases
to exist, the largest bank then headquartered in the State of California)
("Bank") as its "Reference Rate." If the use of the announced Reference Rate is
discontinued by the Bank, then the term Reference
-3-
<PAGE>
Rate shall mean the announced rate charged by the Bank which is, from time to
time, substituted for the Reference Rate. Landlord and Tenant recognize that the
damage which Landlord shall suffer as a result of Tenant's failure to pay such
amounts is difficult to ascertain and said late charge and interest are the best
estimate of the damage which Landlord shall suffer in the event of late payment.
3.3 Security Deposit. Upon the execution of this Lease, Tenant shall pay
----------------
to Landlord the Security Deposit. The Security Deposit shall secure the full
and faithful performance of each provision of this Lease to be performed by
Tenant. Landlord shall not be required to pay interest on the Security Deposit
or to keep the Security Deposit separate from Landlord's own funds. If an Event
of Default shall occur due to Tenant's failure to perform fully and timely all
or any of Tenant's covenants and obligations hereunder, Landlord may, but
without obligation, apply all or any portion of the Security Deposit toward
fulfillment of Tenant's unperformed covenants and/or obligations. If Landlord
does so apply any portion of the Security Deposit, Tenant shall immediately pay
Landlord sufficient cash to restore the Security Deposit to the amount of the
then current Base Rent per month. After Tenant vacates the Premises, upon the
expiration or sooner termination of this Lease, if Tenant is not then in
default, Landlord shall return to Tenant any unapplied balance of the Security
Deposit. Should the Permitted Use be amended (in Landlord's sole and absolute
discretion) to accommodate a change in the business of Tenant or to accommodate
a subtenant or assignee approved by Landlord, Landlord shall have the right to
increase the Security Deposit to the extent necessary, in Landlord's reasonable
judgment, to account for any increased risk to the Premises or increased wear
and tear that the Premises may suffer as a result thereof.
4. UTILITIES. Tenant shall pay all charges for heat, water, gas, electricity,
---------
telephone and any other utilities used on or provided to the Premises. Landlord
shall not be liable to Tenant for interruption in or curtailment of any utility
service, nor shall any such interruption or curtailment constitute constructive
eviction or grounds for rental abatement. In the event the Premises is not
separately metered, Tenant shall have the option, subject to the terms of this
Lease, to cause the Premises to be separately metered at Tenant's cost and
expense. If Tenant does not elect to cause the Premises to be separately
metered, Tenant shall pay a reasonable proration of utilities, as determined by
Landlord. Notwithstanding the foregoing, if there is any interruption, failure,
stoppage or interference of the utilities, services or access to be furnished by
Landlord to the Premises under this Lease or due to the presence of any
Hazardous Material in, on or about the Building or the Project (except to the
extent released or emitted by Tenant), and such interruption continues for seven
(7) consecutive calendar days, then Tenant shall be entitled to an equitable
abatement of Rent to the extent of the interference with Tenant's use of the
Premises occasioned thereby. If the interference persists for more than one
hundred eighty (180) consecutive calendar days, then Tenant shall have the right
to terminate this Lease.
5. TAXES.
-----
5.1 Real Property Taxes. Tenant shall pay to Landlord Tenant's Share of
-------------------
the Real Property Taxes for each full or partial calendar year during the Lease
Term.
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<PAGE>
5.2 Definition of Real Property Taxes. "Real Property Taxes" shall be the
---------------------------------
sum of the following (where such taxes or fees are utilized for local purposes,
i.e., city, county or local agency purposes): all real property taxes,
possessory-interest taxes, business or license taxes or fees, service payments
in lieu of such taxes or fees, annual or periodic license or use fees, excises,
transit and traffic charges, housing fund assessments, open space charges,
childcare fees, school, sewer and parking fees or any other assessments, levies,
fees, exactions or charges, general and special, ordinary and extraordinary,
unforeseen as well as foreseen (including fees "in-lieu" of any such tax or
assessment) which are assessed, levied, charged, conferred or imposed by any
public authority upon the Project (or any real property comprising any portion
thereof) or its operations, together with all taxes, assessments or other fees
imposed by any public authority upon or measured by any Rent or other charges
payable hereunder, including any gross receipts tax or excise tax levied by any
governmental authority with respect to receipt of rental income, together with
any tax imposed in substitution, partially or totally, of any tax previously
included within the aforesaid definition or any additional tax the nature of
which was previously included within the aforesaid definition, together with any
and all costs and expenses (including, without limitation, attorneys,
administrative and expert witness fees and costs) of challenging any of the
foregoing or seeking the reduction in or abatement, redemption or return of any
of the foregoing, but only to the extent of any such reduction, abatement,
redemption or return. All references to Real Property Taxes during a particular
year shall be deemed to refer to taxes accrued during such year, including
supplemental tax bills regardless of when they are actually assessed and without
regard to when such taxes are payable. The obligation of Tenant to pay for
supplemental taxes shall survive the expiration or early termination of this
Lease. In no event shall Tenant or any Tenant Party (as defined in Section
12.1) be entitled to file any property tax assessment appeal. Nothing contained
in this Lease shall require Tenant to pay any franchise, corporate, estate or
inheritance tax of Landlord, or any income, profits or revenue tax or charge
upon the net income of Landlord or any Real Property Taxes in excess of the
amount which would be payable if such tax or assessment expense were paid in
installments over the longest possible term, or resulting from the improvement
of any of the Building or the Project for the sole use of other occupants. Real
Property Taxes for partial years, if any, falling within the Term shall be
prorated. Tenant's obligations for Real Property Taxes for the last full and/or
partial year(s) of the Term shall survive the expiration or early termination of
the Lease.
5.3 Personal Property Taxes. Prior to delinquency, Tenant shall pay all
-----------------------
taxes and assessments levied upon trade fixtures, alterations, additions,
improvements, inventories and other personal property located and/or installed
on the Premises by Tenant; and Tenant shall provide Landlord copies of receipts
for payment of all such taxes and assessments. To the extent any such taxes are
not separately assessed or billed to Tenant, Tenant shall pay the amount thereof
as invoiced by Landlord.
6. OPERATING EXPENSES.
------------------
6.1 Operating Expenses. Tenant shall pay to Landlord Tenant's Share of
------------------
the Operating Expenses and Tenant's Share of Project Operating Expenses in each
calendar year.
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<PAGE>
6.2 Definition of Operating Expenses. "Operating Expenses" shall mean
--------------------------------
collectively the "Building Operating Expenses" and the "Project Operating
Expenses."
6.2.1 Building Operating Expenses. "Building Operating Expenses"
---------------------------
means the total costs and expenses incurred by Landlord in the ownership,
operation, maintenance, repair and management of the Project, the Common Area
and the Building, including, but not limited to, (a) repair, maintenance,
utility costs and landscaping of the Common Area, including, but not limited to,
any and all costs of maintenance, repair and replacement of all parking areas
(including sweeping, striping and slurry coating), common driveways, outdoor
lighting, walkways, landscaping, and other costs which are allocable to the
Project or the real property of which the Premises are a part including any
costs under the terms of any CC&Rs affecting the real property, (b) non-
structural repairs to and maintenance of the roof (and roof membrane), skylights
and exterior walls of the Premises (including painting); (c) insurance
deductibles and the premiums relating to the insurance maintained by Landlord
with respect to the Project; (d) maintenance contracts for, and the repair and
replacement of, the heating, ventilation and air-conditioning (HVAC) systems and
elevators, if any, and maintenance, repair, replacement, monitoring and
operation of the fire/life safety system; (e) trash collection; and (f) capital
improvements made to or capital assets acquired for the Project after the
Commencement Date that are intended to reduce Operating Expenses or are
reasonably necessary for the health and safety of the occupants of the Project
or are required under any governmental law or regulation, which capital costs,
or an allocable portion thereof, shall be amortized over the useful life of the
capital improvement in question, together with interest on the unamortized
balance at the Reference Rate. Operating Expenses shall also include an
administrative fee to Landlord for accounting and project management services
relating to the Project in an amount equal to three percent (3%) of the sum of
the base rents received by Landlord from all of the tenants in the Building.
Operating Expenses shall also include all costs and fees incurred by Landlord in
connection with the management of this Lease and the Premises including the cost
of those services which are customarily performed by a property management
services company, whether performed internally or through an outside management
company. Operating Expenses shall not include (i) replacement of or structural
repairs to the roof or the exterior walls; (ii) repairs to the extent covered by
insurance proceeds, or paid by Tenant or other third parties; (iii) alterations
solely attributable to tenants of the Project other than Tenant; or (iv)
marketing expenses; (v) costs occasioned by the act, omission or violation of
any Applicable Law by Landlord, any other occupant of the Project, or their
respective agents, contractors, or invitees; (vi) costs occasioned by fire, acts
of God or other casualties or by the exercise of the power of eminent domain;
(vii) costs to correct any construction defect in the Premises or the Building
or to comply with any Applicable Law applicable to the Premises, the Building or
the Project on the Commencement Date; (viii) costs of any renovation,
improvement, painting or redecorating of any portion of the Building or the
Project not made available for Tenant's use; (ix) costs resulting from the
violation by Landlord or any other occupant of the Project (other than Tenant)
of the terms or conditions of any lease or other agreement; (x) insurance
premiums with respect to earthquake or flood insurance which are in excess of
commercially reasonable rates and coverages when compared to the rates and
coverages then customarily required and obtained by institutional owners of
comparable projects in the vicinity of the Project, and increases in
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<PAGE>
insurance costs caused by the activities of any other occupant of the Project,
insurance deductibles in excess of $10,000, and co-insurance payments; (xi)
costs incurred in connection with the presence of any Hazardous Material, except
to the extent caused by the release or emission of the Hazardous Material in
question by Tenant or other violation of Tenant under provisions of this Lease
pertaining to Hazardous Materials; (xii) costs in the nature of depreciation or
other expense reserves; (xiii) costs of repair, maintenance and/or replacement
of the structural portions of the Building or of the structural portions of any
other improvements at the Project; (xiv) compensation for any officer of
Landlord or for any employee not stationed at the Project on a full-time basis
or any compensation retained by Landlord or its affiliates for management or
administration of the Project in excess of the greater of the three percent (3%)
fee described above or the reasonable management fee which would be charged by
an unaffiliated professional management service for operation of comparable
projects in the vicinity; (xv) costs arising from the disproportionate use of
any utility or service supplied by Landlord to any other occupant of the Project
or associated with utilities or services of a type not provided to Tenant; and
(xvi) costs which could properly be capitalized under generally accepted
accounting principles, except to the extent that (a) such costs are specifically
included in Section 6.2.2(d) below and (b) monthly amortization payments are due
at the same time as Base Rent until the end of the term over which such costs
were amortized or the earlier expiration of the Lease Term; and (xvii) costs
incurred in connection with any mortgage, deed of trust or ground lease
applicable to any portion of the Project.
6.2.2 Project Operating Expenses. "Project Operating Expenses" shall
--------------------------
include the total costs and expenses incurred by Landlord in the ownership,
operation, maintenance, repair and management of the Project and/or the Common
Area, including, but not limited to, (a) repair, maintenance, utility costs and
landscaping of the Common Area, including, but not limited to, any and all costs
of maintenance, repair and replacement of all parking areas (including sweeping,
striping and slurry coating), loading and unloading areas, trash areas, common
driveways, sidewalks, outdoor lighting, signs, directories, walkways, parkways,
landscaping, irrigation systems, fences and gates and other costs which are
allocable to the real property of which the Premises are a part including any
costs under the terms of any CC&Rs affecting the real property; (b) insurance
deductibles and the premiums relating to the insurance maintained by Landlord
with respect to the Project; (c) trash collection, security services and the
costs of any environmental inspections; (d) capital improvements made to or
capital assets acquired for the Project after the Commencement Date that are
intended to reduce Project Operating Expenses or are reasonably necessary for
the health and safety of the occupants of the Project or are required under any
governmental law or regulation, which capital costs, or an allocable portion
thereof, shall be amortized over the useful life of the capital improvement in
question, together with interest on the unamortized balance at the Reference
Rate; and (e) Real Property Taxes. Operating Expenses shall also include all
costs and fees incurred by Landlord in connection with the management of this
Lease and the Premises including the cost of those services which are
customarily performed by a property management services company. In no event
will Landlord or its property manager be required to keep separate accounting
records for the components of the Operating Expenses or to create any ledgers or
schedules not already in existence.
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<PAGE>
7. ESTIMATED EXPENSES.
------------------
7.1 Payment. "Estimated Expenses" for any particular year shall mean
-------
Landlord's reasonable estimate of Operating Expenses and Real Property Taxes for
a calendar year. Tenant shall pay Tenant's Share of the Estimated Expenses with
installments of Base Rent in monthly installments of one-twelfth (1/12th)
thereof on the first day of each calendar month during such year. If at any
time Landlord determines that Operating Expenses and Real Property Taxes are
projected to vary from the then Estimated Expenses, Landlord may, by notice to
Tenant, revise such Estimated Expenses, and Tenant's monthly installments for
the remainder of such year shall be adjusted so that by the end of such calendar
year Tenant has paid to Landlord Tenant's Share of the revised Estimated
Expenses for such year.
7.2 Adjustment. "Operating Expenses and Real Property Taxes Adjustment"
----------
(or "Adjustment") shall mean the difference between Tenant's Share of Estimated
Expenses and Tenant's Share of Operating Expenses and Real Property Taxes for
any calendar year. After the end of each calendar year, Landlord shall deliver
to Tenant a statement of Tenant's Share of Operating Expenses and Real Property
Taxes for such calendar year, accompanied by a computation of the Adjustment.
If Tenant's payments are less than Tenant's Share, then Tenant shall pay the
difference within thirty (30) days after receipt of such statement. Tenant's
obligation to pay such amount shall survive the expiration or termination of
this Lease. If Tenant's payments exceed Tenant's Share, then Landlord shall
credit such excess amount to installments of Rent next coming due. If Tenant is
in default, Landlord may, but shall not be required to, credit such amount to
Rent arrearages. Within 30 days after Tenant's receipt of Landlord's statement,
Tenant, at Tenant's expense, may audit the tax and expense records for the
Project, the Common Area and the Building upon reasonable prior notice to
Landlord during normal business hours. If such audit is by a public accountant
reasonably acceptable to Landlord then (i) if such audit discloses that Tenant
has overpaid either Real Property Taxes or Operating Expenses, Landlord will
reimburse Tenant for any such excess Operating Expenses or Real Property Taxes
paid by Tenant, and (ii) if such audit discloses that such overpayment was more
than five percent, Landlord will reimburse Tenant for the actual reasonable cost
of the audit. If during any calendar year the Building is not at least 95%
occupied, Operating Expenses for such year that vary based upon occupancy shall
be calculated based on a 95% occupancy rate for the Building.
8. INSURANCE.
---------
8.1 Landlord. Landlord shall maintain insurance through individual or
--------
blanket policies insuring the Building providing "all risk" coverage (including,
if Landlord elects, "all risk" coverage, earthquake/volcanic action, flood
and/or surface water insurance, subject to the limitations on the inclusion of
premiums for earthquake and flood insurance set forth in Section 6.2.1(x) above)
for the full replacement cost of the Building, with deductibles and the form and
endorsements of such coverage as reasonably selected by Landlord, together with
rental abatement insurance against loss of Rent in an amount equal to the amount
of Rent for a period of at least twelve (12) months commencing on the date of
loss. Landlord may also carry such
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other insurance as Landlord may deem prudent or advisable, including, without
limitation, liability insurance in such amounts and on such terms as Landlord
shall determine. Tenant shall pay to Landlord, as a portion of the Operating
Expenses, the premiums for the insurance coverages described herein.
8.2 Tenant. Tenant shall, at Tenant's expense, obtain and keep in force
------
at all times the following insurance:
8.2.1 Commercial General Liability Insurance (Occurrence Form). A
--------------------------------------------------------
policy of commercial general liability insurance (occurrence form) having a
combined single limit of not less than Two Million Dollars ($2,000,000) per
occurrence and Two Million Dollars ($2,000,000) aggregate per location if Tenant
has multiple locations, providing coverage for, among other things, blanket
contractual liability, premises, products/completed operations with an
"Additional Insured-Managers or Lessors of Premises Endorsement" and containing
the "Amendment of the Pollution Exclusion Endorsement" for damage caused by
heat, smoke or fumes from a hostile fire, and personal and advertising injury
coverage, with deletion of (a) the exclusion for operations within fifty (50)
feet of a railroad track (railroad protective liability), if applicable, and (b)
the exclusion for explosion, collapse or underground hazard, if applicable, and,
if necessary, Tenant shall provide for restoration of the aggregate limit, and
provided that the policy shall not contain any intra-insured exclusions as
between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an "insured contract" for the performance
of Tenant's indemnity obligations under this Lease;
8.2.2 Automobile Liability Insurance. Business automobile liability
------------------------------
insurance having a combined single limit of not less than Two Million Dollars
($2,000,000) per occurrence and insuring Tenant against liability for claims
arising out of ownership, maintenance, or use of any owned, hired or non-owned
automobiles;
8.2.3 Workers' Compensation and Employer's Liability Insurance.
--------------------------------------------------------
Workers' compensation insurance having limits not less than those required by
state statute and federal statute, if applicable, and covering all persons
employed by Tenant in the conduct of its operations on the Premises (including
the all states endorsement and, if applicable, the volunteers endorsement),
together with employer's liability insurance coverage in the amount of at least
One Million Dollars ($1,000,000); and
8.2.4 Property Insurance. "All risk" property insurance including
------------------
boiler and machinery comprehensive form, if applicable, covering damage to or
loss of any of Tenant's personal property, fixtures, equipment and alterations,
including electronic data processing equipment (collectively "Tenant's
Property") (and coverage for the full replacement cost thereof including
business interruption of Tenant), together with, if the property of Tenant's
invitees is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitees and located in the Premises; and
8.2.5 Business Interruption. As a matter which may be self-insured
---------------------
by Tenant with full waiver of subrogation being deemed applicable to such self-
insurance, loss of income
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and extra expense insurance in amounts as will reimburse Tenant for direct or
indirect loss of earnings attributable to all peril commonly insured against by
prudent lessees in the business of Tenant or attributable to prevention of
access to the Premises as a result of such perils.
8.3 General.
-------
8.3.1 Insurance Companies. Insurance required to be maintained by
-------------------
Tenant shall be written by companies licensed to do business in the state in
which the Premises are located and having a "General Policyholders Rating" of at
least "A - VIII" (or such higher rating as may be required by a lender having a
lien on the Premises) as set forth in the most current issue of "Best's
Insurance Guide."
8.3.2 Certificates of Insurance. Tenant shall deliver to Landlord
-------------------------
certificates of insurance for all insurance required to be maintained by Tenant
in a form acceptable to Landlord in its sole discretion no later than seven (7)
days prior to the date of possession of the Premises. Tenant shall, at least
ten (10) days prior to expiration of the policy, furnish Landlord with
certificates of renewal or "binders" thereof. Each certificate shall expressly
provide that such policies shall not be cancelable or otherwise subject to
modification except after thirty (30) days prior written notice to the parties
named as additional insureds in this Lease (except in the case of cancellation
for nonpayment of premium in which case cancellation shall not take effect until
at least ten (10) days' notice has been given to Landlord).
8.3.3 Additional Insureds. Landlord, Landlord's lender, if any, and
-------------------
any property management company of Landlord for the Premises shall be named as
additional insureds on a form approved by Landlord under all of the policies
required by Section 8.2.1. The policies required under Section 8.2.1 shall
provide for severability of interest.
8.3.4 Primary Coverage. All insurance to be maintained by Tenant
----------------
shall, except for workers' compensation and employer's liability insurance, be
primary, without right of contribution from insurance of Landlord. Any umbrella
liability policy or excess liability policy (which shall be in "following form")
shall provide that if the underlying aggregate is exhausted, the excess coverage
will drop down as primary insurance. The limits of insurance maintained by
Tenant shall not limit Tenant's liability under this Lease.
8.3.5 Waiver of Subrogation. Notwithstanding anything in this Lease
---------------------
to the contrary, Landlord and Tenant hereby release each other and their
respective agents, employees, successors, assignees and sublessees from all
liability for injury to any person or any damage to any property that is caused
by or results from a risk which is actually insured against, which is required
to be insured against under this Lease, or which would normally be covered by
"all risk" property insurance, without regard to the negligence or willful
misconduct of the person or entity so released. All of Landlord's and Tenant's
repair and indemnity obligations under this Lease shall be subject to the waiver
and release contained in this paragraph. Each party shall cause each insurance
policy it obtains to provide that the insurer thereunder waives all recovery by
way of subrogation as required herein in connection with any injury or damage
covered by such policy.
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8.3.6 Notification of Incidents. Tenant shall notify Landlord within
-------------------------
twenty-four (24) hours after the occurrence of any accidents or incidents in the
Premises, the Building, Common Areas or the Project which could give rise to a
claim under any of the insurance policies required under this Section 8.
8.4 Indemnity. Tenant shall indemnify, protect, defend (by counsel
---------
acceptable to Landlord) and hold harmless Landlord and Landlord's directors,
officers, shareholders, lenders, successors and assigns from and against any and
all claims, judgments, causes of action, damages, penalties, costs, liabilities,
and expenses, including all reasonable costs, attorneys' fees, expenses and
liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon (herein together referred "Liabilities"), arising at
any time during or after the Term as a result (directly or indirectly) of or in
connection with (i) any default in the performance of any obligation on Tenant's
part to be performed under the terms of this Lease, or (ii) Tenant's negligence
or willful misconduct in or about the Premises, the Building, the Common Area or
other portions of the Project, except for claims to the extent caused by
Landlord's negligence or willful misconduct. The obligations of Tenant under
this Section 8.4 shall survive the termination of this Lease with respect to any
claims or Liabilities arising prior to such termination.
8.5 Exemption of Landlord from Liability. Tenant, as a material part of
------------------------------------
the consideration to Landlord, hereby assumes all risk of damage to property
including, but not limited to, Tenant's fixtures, equipment, furniture and
alterations or illness or injury to persons in, upon or about the Premises, the
Building, the Common Area or other portions of the Project arising from any
cause, and Tenant hereby expressly releases Landlord and waives all claims in
respect thereof against Landlord, except as otherwise provided below in this
Section 8.5 in the provisions regarding Landlord's indemnification of Tenant.
Tenant hereby agrees that Landlord shall not be liable for injury to Tenant's
business or any loss of income therefrom or for damage to the property of
Tenant, or injury to or illness or death of Tenant or any Tenant Party or any
other person in or about the Premises, the Building, the Common Area or the
Project, whether such damage, illness or injury is caused by fire, steam,
electricity, gas, water or rain, or from the breakage, leakage or other defects
of sprinklers, wires, appliances, ventilation, plumbing, air conditioning or
lighting fixtures, or from any other cause, and whether said damage, illness or
injury results from conditions arising upon the Premises, upon other portions of
the Building or from other sources or places, and regardless of whether the
cause of such damage, illness or injury or the means of repairing the same is
inaccessible to Tenant, except only damage, illness or injury caused by
Landlord's negligence or willful misconduct. Landlord shall not be liable for
any damages arising from any act or neglect of any contractor or other tenant,
if any, of the Building or the Project or Landlord's failure to enforce the
terms of any agreements with parties other than Tenant. Notwithstanding the
foregoing, Landlord shall not be released or indemnified from, and shall
indemnify, defend (by counsel reasonably acceptable to Tenant) and hold harmless
Tenant and its directors, officers, employees, shareholders, agents,
contractors, and each of their successors and assigns from and against any and
all Liabilities (as defined in Section 8.4 above), arising as a result (directly
or indirectly) of or in connection with, but only to the extent of Landlord's
negligent acts or omissions, willful misconduct or breach of this Lease;
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<PAGE>
provided, however, the foregoing indemnity of Landlord (i) shall in no way limit
or otherwise affect the limitation on Landlord's liability under this Lease
pursuant to Section 19.5 hereof, and (ii) shall be subject to the provisions of
Section 8.3.5 above.
9. REPAIRS AND MAINTENANCE.
-----------------------
9.1 Tenant. Tenant, at Tenant's cost and expense, shall keep and maintain
------
the Premises (interior and exterior, excluding roofing and painting), including,
without limitation, loading docks, roll up doors and ramps, floors, subfloors
and floor coverings, walls and wall coverings, doors, windows, glass, plate
glass, locks, ceilings, skylights, lighting systems, interior plumbing,
electrical and mechanical systems and wiring, appliances and devices using or
containing refrigerants, fixtures and equipment in good repair and in a clean
and safe condition, and repair and/or replace any and all of the foregoing in a
clean and safe condition, in good order, condition and repair; provided,
however, to the extent the necessity for such repair or replacement is caused by
the gross negligence or willful misconduct of Landlord, its agents, employees or
contractors, Landlord shall be responsible for the actual, reasonable costs of
such repair or replacement to the extent such costs are not covered by the
proceeds of insurance required to be maintained by Tenant under this Lease (or
such proceeds as Tenant would have received had Tenant maintained the insurance
required to be maintained by Tenant under this Lease). Without limiting the
foregoing, Tenant shall, at Tenant's sole expense, immediately replace all
broken glass in the Premises with glass equal to or in excess of the
specification and quality of the original glass; and repair any area damaged by
Tenant, Tenant's agents, employees, invitees and visitors, including any damage
caused by any roof penetration, whether or not such roof penetration was
approved by Landlord. All repairs and replacements by Tenant shall be made and
performed: (a) at Tenant's cost and expense and at such time and in a
commercially reasonable manner, (b) by contractors or mechanics reasonably
approved by Landlord, (c) so that same shall be at least equal in quality, value
and utility to the original work or installation, (d) in a manner and using
equipment and materials that will not interfere with or impair the operations,
use or occupation of the Building or any of the mechanical, electrical, plumbing
or other systems in the Building or the Project, and (e) in accordance with the
Rules and Regulations and all Applicable Laws (as defined in Section 11). In
the event that an Event of Default exists due to Tenant's failure to maintain
the Premises in accordance with the obligations under the Lease, Landlord shall
have the right to enter the Premises and perform such maintenance, repairs or
refurbishing at Tenant's sole cost and expense (including a sum for overhead to
Landlord equal to three percent (3%) of the costs of maintenance, repairs or
refurbishing). Tenant shall maintain written records of maintenance and
repairs, as required by any Applicable Law, and shall use certified technicians
to perform such maintenance and repairs, as so required. Tenant shall deliver
full and complete copies of all service or maintenance contracts entered into by
Tenant for the Premises to Landlord within one hundred twenty (120) days after
the Commencement Date. Notwithstanding anything in this Lease to the contrary,
Landlord shall perform and construct, and Tenant shall have no responsibility to
perform or construct (but shall be obligated to pay for its portion of the cost
thereof to the extent allowed as Building Operating Expenses under the
provisions of Section 6.2.1 above), any repair, maintenance or improvements (i)
necessitated by the acts or omissions of Landlord or any other occupant of the
Project or their
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<PAGE>
respective agents, contractors or invitees, (ii) occasioned by fire, acts of God
or other casualty or by the exercise of the power of eminent domain, (iii)
required as a consequence of any violation of Applicable Laws or construction
defects in the Premises, the Building or the Project as of the Commencement
Date, (iv) for which Landlord has received a reimbursement from others, (v)
which could be treated as a capital expenditure under generally accepted
accounting principles, (vi) to the electrical, mechanical, plumbing, water,
sewer and HVAC systems serving the Premises, the Building and the Project, and
(vii) to any portion of the Building or the Project outside the demising walls
of the Premises.
9.2 Landlord. Landlord shall, subject to the following limitations,
--------
repair damage to structural portions of the roof, foundation and load-bearing
portions of walls (excluding wall coverings, painting, glass and doors) of the
Building; provided, if such damage is caused by negligence or willful misconduct
of Tenant, or any Tenant Party, then such repairs shall be at Tenant's sole
expense after the application of any insurance proceeds available under
insurance required to be carried by the parties under this Lease. Landlord
shall not be required to make any repair resulting from (i) any alteration or
modification to the Building or to mechanical equipment within the Building
performed by, for or because of Tenant or to special equipment or systems
installed by, for or because of Tenant, (ii) the installation, use or operation
of Tenant's property, fixtures and equipment, (iii) the moving of Tenant's
property in or out of the Building or in and about the Premises, or (iv)
Tenant's use or occupancy of the Premises in violation of Section 11 of this
Lease. Landlord shall have no obligation to make repairs under this Section 9.2
until a reasonable time after receipt of written notice from Tenant of the need
for such repairs. There shall be no abatement of Rent during the performance of
such work. Landlord shall not be liable to Tenant for injury or damage that may
result from any defect in the construction or condition of the Premises (except
as otherwise expressly provided in this Lease or the Work Letter), nor for any
damage that may result from interruption of Tenant's use of the Premises during
any repairs by Landlord. Tenant waives any right to repair the Premises, the
Building and/or the Common Area at the expense of Landlord under any Applicable
Laws, including, without limitation, Sections 1941 and 1942 of the California
Civil Code.
10. ALTERATIONS.
-----------
10.1 Trade Fixtures; Alterations. Tenant may install trade fixtures,
---------------------------
equipment and furniture in the Premises, provided that such items are installed
and are removable without structural damage to the Premises, the Building, the
Common Area or the Project. Tenant shall not construct, nor allow to be
constructed, any alterations or physical additions in, about or to the Premises
without obtaining the prior written consent of Landlord, which consent shall be
conditioned upon Tenant's compliance with the provisions of Exhibit F but shall
---------
not be unreasonably withheld or delayed. Tenant shall submit plans and
specifications to Landlord with Tenant's request for approval and shall
reimburse Landlord for all reasonable costs which Landlord may incur in
connection with granting approval to Tenant for any such alterations and
additions, including any costs or expenses which Landlord may incur in electing
to have outside architects and engineers review said matters. If Landlord does
not respond to a written request from Tenant within ten (10) business days, then
Landlord shall be deemed to disapprove such
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<PAGE>
request. In the event Tenant makes any alterations to the Premises that trigger
or give rise to a requirement that the Building or the Premises come into
compliance with any governmental laws, ordinances, statutes, orders and/or
regulations (such as ADA requirements), Tenant shall be fully responsible for
complying, at its sole cost and expense, with same. Tenant shall file a notice
of completion after completion of such work and provide Landlord with a copy
thereof. Tenant shall provide Landlord with a set of "as-built" drawings for any
such work. Notwithstanding the foregoing, Tenant shall have the right to
construct non-structural alterations and improvements to the Premises without
Landlord's prior approval, if the cost of any alteration project does not exceed
$25,000; provided that, prior to commencing such "deemed approved" alterations,
Tenant shall provide Landlord with a written description thereof accompanied by
the plans and specifications to be utilized for the work of such alterations,
and, following the completion thereof, Tenant shall provide Landlord with a copy
of the "field-grade as-built" version of such plans and specifications. Upon
Tenant's request from time to time, Landlord shall advise Tenant in writing
whether Landlord will require Tenant to remove any alterations or improvements
upon termination of this Lease. Tenant's trade fixtures, furniture, equipment
and other personal property installed in the Premises shall at all times be
Tenant's property, and Tenant may remove any or all of such property from the
Premises at any time and from time to time prior to the end of the term of this
Lease; provided that Tenant repairs all damage caused by such removal. Landlord
shall have no lien or other interest whatsoever in any item of such property,
and Landlord waives all such liens and interest. Within ten (10) days following
Tenant's request from time to time, Landlord shall execute documents in a
commercially reasonable form to evidence Landlord's waiver of any right, title,
lien or interest in any of such property and giving any lenders holding a
security interest or lien on such property reasonable rights of access to the
Premises to remove such property, provided that such removal occurs not later
than ten (10) business days following the end of the term of the Lease and
provided that such lenders repair all damage caused by such removal within five
(5) business days of such removal.
10.2 Damage; Removal. Tenant shall repair all damage to the Premises, the
---------------
Building, the Common Area or the Project caused by the installation or removal
of Tenant's fixtures, equipment, furniture or alterations. Upon the termination
of this Lease, Tenant shall remove any or all trade fixtures, alterations,
additions, improvements and partitions made or installed by Tenant and restore
the Premises to its condition existing prior to the construction of any such
items; provided, however, Landlord has the absolute right to require Tenant to
have all alterations designated by Landlord to remain on the Premises, in which
event they shall be and become the property of Landlord upon the termination of
this Lease. All such removals and restoration shall be accomplished in a good
and workmanlike manner and so as not to cause any damage to the Premises, the
Building, the Common Area or the Project whatsoever. Notwithstanding the
foregoing, unless Tenant is in default (in which event Civil Code Sections 1980
through 1991 shall control), all articles of personal property and all business
and trade fixtures, machinery and equipment, furniture and movable partitions
owned by Tenant or installed by or on behalf of Tenant in the Premises shall
remain the property of Tenant, and may be removed by Tenant at any time during
the Term of the Lease.
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<PAGE>
10.3 Liens. Tenant shall promptly pay and discharge all claims for labor
-----
performed, supplies furnished and services rendered at the request of Tenant and
shall keep the Premises free of all mechanics' and materialmen's liens in
connection therewith. Tenant shall provide at least ten (10) days prior written
notice to Landlord before any labor is performed, supplies furnished or services
rendered on or at the Premises and Landlord shall have the right to post on the
Premises notices of non-responsibility. If any lien is filed, Tenant shall
cause such lien to be released and removed within ten (10) days after the date
of filing, and if Tenant fails to do so, Landlord may take such action as may be
necessary to remove such lien and Tenant shall pay Landlord such amounts
expended by Landlord together with interest thereon at the Applicable Interest
Rate from the date of expenditure.
10.4 Standard of Work. All work to be performed by or for Tenant pursuant
----------------
hereto shall be performed diligently and in a first class, workmanlike manner,
and in compliance with all Applicable Laws, and/or Tenant and Landlord's
insurance carriers. Landlord shall have the right, but not the obligation, to
inspect periodically the work on the Premises and Landlord may require changes
in the method or quality of the work.
11. USE. The Premises shall be used only for the Permitted Uses set forth in
---
the Basic Lease Information and for no other uses. Tenant's use of the Premises
shall be in compliance with and subject to all applicable laws, statutes, codes,
ordinances, orders, rules, regulations, conditions of approval and requirements
of all federal, state, county, municipal and governmental authorities and all
administrative or judicial orders or decrees and all permits, licenses,
approvals and other entitlements issued by governmental entities, and rules of
common law, relating to or affecting the Project, the Premises or the Building
or the use or operation thereof, whether now existing or hereafter enacted,
including, without limitation, the Americans with Disabilities Act of 1990, 42
USC 12111 et seq. (the "ADA") as the same may be amended from time to time, all
Environmental Laws (as defined in Section 12.1), and any CC&Rs or any supplement
thereto recorded in any official or public records with respect to the Project
or any portion thereof ("Applicable Laws"). Tenant shall be responsible for
obtaining any permit, business license, or other permits or licenses required by
any governmental agency permitting Tenant's use or occupancy of the Premises,
except that the provisions of the Work Letter attached to this Lease as Exhibit
B shall control the obligations of the parties with respect to obtaining
building permits for the construction and installation of the Tenant
Improvements and a certificate of occupancy for the Premises prior to the
Commencement Date. In the event Landlord desires to record CC&Rs against the
Project after the date of full execution of this Lease, Landlord shall, at its
option, either (a) obtain Tenant's consent thereto, which consent shall not be
unreasonably withheld (provided Tenant's material rights and obligations under
the Lease are not impaired but provided that any provisions of such CC&Rs which
require Tenant to pay reasonable assessments such as for common area maintenance
and landscaping shall not be deemed to impair Tenant's material rights and
obligations under this Lease), conditioned or delayed or (b) elect not to obtain
Tenant's consent thereto, in which event the provisions of this Lease shall
prevail over any conflicting provisions of the CC&Rs. In no event shall the
Premises be used for any of the Prohibited Uses set forth on Exhibit D attached
---------
hereto. Tenant shall comply with the rules and regulations attached hereto as
Exhibit E, together with such additional rules and
- ---------
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<PAGE>
regulations as Landlord may from time to time prescribe. Tenant shall not commit
waste, overload the floors or structure of the Building, subject the Premises,
the Building, the Common Area or the Project to any use which would violate any
insurance coverage, permit any unreasonable odors, smoke, dust, gas, substances,
noise or vibrations to emanate from the Premises, take any action which would
constitute a nuisance or would disturb, obstruct or endanger any other tenants,
take any action which would abrogate any warranties, or use or allow the
Premises to be used for any unlawful purpose. Tenant shall have the right in
common with other tenants of Landlord to use the parking facilities of the
Project. Tenant agrees not to overburden the parking facilities and agrees to
cooperate with Landlord and other tenants in the use of parking facilities.
Landlord shall not be responsible for non-compliance by any other tenant or
occupant of the Project with, or Landlord's failure to enforce, any of the rules
or regulations or CC&Rs or any other terms or provisions of such tenant's or
occupant's lease. Tenant shall promptly comply with the reasonable requirements
of any board of fire insurance underwriters or other similar body now or
hereafter constituted. Tenant shall not do any act which shall in any way
encumber the title of Landlord in and to the Premises, the Building or the
Project. Notwithstanding the foregoing, Tenant shall not be required to comply
with or cause the Premises to comply with any Applicable Laws unless such
compliance is necessitated solely due to Tenant's particular use of the
Premises; provided, however, that the foregoing provision of this sentence shall
not relieve Tenant from its obligation to pay for Tenant's Share of Building
Operating Expenses under Section 6.2.1 above. Tenant shall not be required to
comply with any rule or regulation established by Landlord unless the same
applies non-discriminatorily to all occupants of the Project, does not
unreasonably interfere with Tenant's use of, access to, or parking at the
Premises, and does not materially increase the obligations or decrease the
rights of Tenant under this Lease.
12. ENVIRONMENTAL MATTERS.
---------------------
12.1 Hazardous Materials. Tenant shall not cause nor permit, nor allow any
-------------------
of Tenant's employees, agents, customers, visitors, invitees, licensees,
contractors, assignees or subtenants (individually, a "Tenant Party" and
collectively, "Tenant's Parties") to cause or permit, any Hazardous Materials to
be brought upon, stored, manufactured, generated, blended, handled, recycled,
treated, disposed or used on, under or about the Premises, the Building, the
Common Area or the Project, except for routine office and janitorial supplies in
usual and customary quantities and Hazardous Materials lawfully used by Tenant
in the conduct of its business (so long as Landlord has received a written list
of such Hazardous Materials, accompanied by Tenant's business plan for lawfully
handling such Hazardous Materials prior to their use in the Premises) stored,
used and disposed of in accordance with all applicable Environmental Laws. As
used herein, "Hazardous Materials" means any chemical, substance, material,
controlled substance, object, condition, waste, living organism or combination
thereof, whether solid, semi-solid, liquid or gaseous, which is or may be
hazardous to the environment due to its radioactivity, ignitability,
corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity,
phytotoxicity, infectiousness or other harmful or potentially harmful properties
or effects, including, without limitation, petroleum and petroleum products,
asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants (including those
substances defined in the
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<PAGE>
Environmental Protection Agency's "Refrigerant Recycling Rule," as amended from
time to time) and which chemicals, substances, materials, controlled substances,
objects, conditions, wastes, living organisms or combinations thereof now or
become in the future regulated in any manner by any Environmental Law based
upon, directly or indirectly, such properties or effects. As used herein,
"Environmental Laws" means any and all federal, state or local environmental,
laws, regulations, standards, decisions of courts, ordinances, rules, codes,
orders, decrees, directives, guidelines, permits or permit conditions, currently
existing and as amended, enacted, issued or adopted in the future which are or
become applicable to Tenant, the Premises, the Building, the Common Area or the
Project. Tenant and Tenant's Parties shall comply with all Environmental Laws
and promptly notify Landlord in writing of the violation of any Environmental
Law or presence of any Hazardous Materials, other than office and janitorial
supplies and Hazardous Materials as permitted above, in, on, under or about the
Premises or the improvements or the soil or groundwater thereunder. Landlord
shall have the right to enter upon and inspect the Premises and to conduct
tests, monitoring and investigations. If such tests indicate the presence of any
violation of Environmental Laws by Tenant or any Tenant Party, Tenant shall
reimburse Landlord for the cost of conducting such tests. In the event of any
such violation, Tenant shall promptly take any and all steps necessary to
rectify the same to the satisfaction of the applicable agencies. If an Event of
Default exists because Tenant has failed to take such prompt action, Landlord
may take such action on behalf of Tenant, in which event Tenant shall reimburse
Landlord, upon demand, for the cost to Landlord of performing rectifying work.
The reimbursement shall be paid to Landlord in advance of Landlord's performing
such work, based upon Landlord's reasonable estimate of the cost thereof; and
upon completion of such work by Landlord, Tenant shall pay to Landlord any
shortfall promptly after receipt of Landlord's bills therefor or Landlord shall
promptly refund to Tenant any excess deposit, as the case may be.
12.2 Indemnification. Tenant shall indemnify, protect, defend (by counsel
---------------
acceptable to Landlord) and hold harmless Landlord and Landlord's affiliated
entities, and each of their respective members, managers, partners, directors,
officers, employees, shareholders, lenders, agents, contractors, successors and
assigns (individually and collectively, "Indemnitees") from and against any and
all claims, judgments, causes of action, damages, penalties, fines, taxes,
costs, liabilities, losses and expenses arising at any time during or after the
Term as a result (directly or indirectly) of or in connection with (a) Tenant
and/or any Tenant Party's breach of this Section 12, or (b) the release or
emission of Hazardous Materials on, under or about the Premises or other
property as a result (directly or indirectly) of Tenant's and/or any Tenant
Party's activities, or failure to act, in connection with the Premises. This
indemnity shall include, without limitation, the cost of any required repair,
cleanup or detoxification, and the preparation and implementation of any
closure, monitoring or other required plans, whether such action is required or
necessary prior to or following the termination of this Lease. The written
consent by Landlord to the presence of Hazardous Materials on, under or about
the Premises shall not excuse Tenant from Tenant's obligation of indemnification
pursuant hereto. Tenant's obligations pursuant to the foregoing indemnity shall
survive the expiration or termination of this Lease.
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12.3 Landlord Obligations. To Landlord's "actual knowledge" (as defined in
--------------------
Section 1.1 above), (a) no Hazardous Material is present in the Building or at
the Project or the soil, surface water, or groundwater thereof, (b) no
underground storage tanks are present at the Project, and (c) no action,
proceeding or claim is pending or threatened regarding the Building or the
Project concerning any Hazardous Material or pursuant to any Environmental Law.
Notwithstanding the foregoing provisions of this Article 12, under no
circumstance shall Tenant be liable for, and Landlord shall promptly remediate,
at Landlord's sole cost and expense, pursuant to the requirements of Applicable
Laws, the presence of any Hazardous Material in, on or about the Building, the
Project or the soil, air, improvements, groundwater or surface water thereof, or
the violation of any Environmental Law, except to the extent that any of the
foregoing actually results from the release or emission of Hazardous Material by
Tenant or Tenant Parties in violation of Environmental Laws.
13. DAMAGE AND DESTRUCTION.
----------------------
13.1 Casualty. If the Premises or Building should be damaged or destroyed
--------
by fire or other casualty, Tenant shall give immediate written notice to
Landlord. Within thirty (30) days after receipt from Tenant of such written
notice, Landlord's "general contractor in charge of construction" (which shall
mean in this Article 13 a general contractor with a substantial experience in
acting as a general contractor with respect to the construction of improvements
similar to the Building in size, specification and quality of construction in
the "Bay Area" of Northern California for a continuous period of at least ten
(10) years prior to the date of such damage or destruction) shall certify to the
parties as to whether the necessary repairs can reasonably be made: (a) in less
than one hundred eighty (180) days; or (b) in more than one hundred eighty (180)
days, in each case after the date of the issuance of permits for the necessary
repair or reconstruction of the portion of the Building or Premises which was
damaged or destroyed.
13.1.1 Less Than 180 Days. If the Premises or Building should be
------------------
damaged, and, if Landlord's general contractor in charge of construction
certifies to Landlord and Tenant that the Premises can reasonably be fully
restored by Landlord to their prior condition within one hundred eighty (180)
days after the issuance of permits for the necessary repair or reconstruction of
the portion of the Building or Premises which was damaged or destroyed, this
Lease shall not terminate and Landlord shall repair the Premises, except that
Landlord shall not be required to rebuild, repair or replace Tenant's Property
which may have been placed in, on or about the Premises by or for the benefit of
Tenant. Rent payable hereunder shall be abated equitably following any such
damage based upon the extent to which Tenant is prohibited from the beneficial
use and enjoyment of the Premises, from the date the Premises were damaged
through the date that the affected portion of the Premises is restored to its
prior condition.
13.1.2 Greater Than 180 Days. If the Premises or Building should be
---------------------
damaged and, if Landlord's general contractor in charge of construction
certifies to Landlord and Tenant that the Premises cannot reasonably be fully
restored by Landlord to their prior condition within one hundred eighty (180)
days after the issuance of permits for the necessary repair or
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<PAGE>
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, either Landlord or Tenant may terminate this Lease by giving written
notice within ten (10) days after notice from Landlord specifying such time
period of repair; and this Lease shall terminate and the Rent shall be abated as
hereinbelow provided from the date of such damage. In the event that neither
party elects to terminate this Lease, Landlord shall promptly commence and
diligently prosecute to completion the repairs to the Building or Premises
(except that Landlord shall not be required to rebuild, repair or replace
Tenant's Property which may have been placed in, on or about the Premises by or
for the benefit of Tenant). Rent payable hereunder shall be abated equitably
following any such damage based upon the extent to which Tenant is prohibited
from the beneficial use and enjoyment of the Premises, from the date the
Premises were damaged through the date that the affected portion of the Premises
is restored to its prior condition.
13.1.3 Casualty During the Last Year of the Lease Term.
-----------------------------------------------
Notwithstanding any other provisions hereof, if the Premises or the Building
shall be damaged within the last year of the Lease Term to the extent that
Tenant is required to relocate its business operations from the Premises, then,
unless Tenant then exercises any right that Tenant has to extend the Lease Term,
Landlord and Tenant shall each have the right to terminate the Lease effective
upon the occurrence of such damage, in which event the Rent shall be abated from
the date Tenant vacates the Premises. The foregoing right shall be in addition
to any other right and option of Landlord under this Section 13.
13.2 Tenant Termination Right. Notwithstanding anything in this Lease to
------------------------
the contrary, if the Premises or any portion of the Building is damaged by any
casualty whatsoever, and, as a result thereof, Tenant is, in Tenant's reasonable
business judgment, unable to conduct its business operations in the Premises at
a level acceptable to Tenant under its then current business plan, then Tenant
shall have the option to terminate this Lease if Landlord's general contractor
in charge of construction certifies to Landlord and Tenant that the Premises
cannot reasonably be fully restored by Landlord to their prior condition within
one hundred eighty (180) days after the date of such damage.
13.3 Uninsured Casualty. Tenant shall be responsible for and shall pay to
------------------
Landlord Tenant's Share of any commercially reasonable deductible or retention
amount (not to exceed $10,000) payable under the property insurance for the
Building. In the event that the Premises or any portion of the Building is
damaged to the extent Tenant is unable to use the Premises and such damage is
not covered by insurance required to be maintained by Landlord, then Landlord
shall have the right at Landlord's option either (i) to repair such damage as
soon as reasonably possible at Landlord's expense, or (ii) to give written
notice to Tenant within thirty (30) days after the date of the occurrence of
such damage of Landlord's intention to terminate this Lease as of the date of
the occurrence of such damage. In the event Landlord elects to terminate this
Lease, Tenant shall have the right within ten (10) days after receipt of such
notice to give written notice to Landlord of Tenant's commitment to pay the cost
of repair of such damage, in which event this Lease shall continue in full force
and effect, and Landlord shall make such repairs as soon as reasonably possible
subject to the following conditions: Tenant shall deposit with Landlord
Landlord's estimated cost of such repairs not later than ten (10) days prior to
Landlord's
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<PAGE>
commencement of the repair work. If the cost of such repairs exceeds the amount
deposited, Tenant shall reimburse Landlord for such excess cost within fifteen
(15) days after receipt of an invoice from Landlord. Any amount deposited by
Tenant in excess of the cost of such repairs shall be refunded within thirty
(30) days of Landlord's final payment to Landlord's contractor. If Tenant does
not give such notice within the ten (10) day period, or fails to make such
deposit as required, this Lease shall terminate automatically as of the date of
the occurrence of the damage. If Landlord does not elect to terminate this
Lease, or is not entitled to terminate this Lease following any damage described
in this Section 13.3, then Landlord shall repair such damage as soon as
reasonably possible at Landlord's expense. Notwithstanding the foregoing,
Landlord shall not have the right to terminate this Lease if the damage to the
Premises or the Building is relatively minor (e.g., repair or restoration would
cost less than five percent (5%) of the replacement cost of the Building).
13.4 Waiver. With respect to any damage or destruction which Landlord is
------
obligated to repair or may elect to repair, Tenant waives all rights to
terminate this Lease pursuant to rights otherwise presently or hereafter
accorded by law, including without limitation any rights granted under Section
1932, subdivision 2, and Section 1933 of the California Civil Code.
14. EMINENT DOMAIN.
--------------
14.1 Total Condemnation. If all of the Premises is condemned by eminent
------------------
domain, inversely condemned or sold under threat of condemnation for any public
or quasi-public use or purpose ("Condemned"), this Lease shall terminate as of
the earlier of the date the condemning authority takes title to or possession of
the Premises, and Rent shall be adjusted to the date of termination.
14.2 Partial Condemnation. If any portion of the Premises or the Building
--------------------
is Condemned and such partial condemnation materially impairs Tenant's ability
to use the Premises for Tenant's business, Tenant shall have the option of
terminating this Lease as of the earlier of the date title vests in the
condemning authority or as of the date an order of immediate possession is
issued and Rent shall be adjusted to the date of termination. If such partial
condemnation does not materially impair Tenant's ability to use the Premises for
the business of Tenant, Landlord shall promptly restore the Premises to the
extent of any condemnation proceeds recovered by Landlord, excluding the portion
thereof lost in such condemnation, and this Lease shall continue in full force
and effect except that after the date of such title vesting or order of
immediate possession Rent shall be adjusted as reasonably determined by
Landlord.
14.3 Award. If the Premises are wholly or partially Condemned, Landlord
-----
shall be entitled to the entire award paid for such condemnation, and Tenant
waives any claim to any part of the award from Landlord or the condemning
authority; provided, however, Tenant shall have the right to recover from the
condemning authority costs in removing Tenant's merchandise, furniture,
fixtures, leasehold improvements and equipment to a new location, the
unamortized value of any alterations or improvements made to the Premises at
Tenant's expense, and, to be consistent with the division of "Transfer
Premiums," as defined in Section 16.4 below, one-half
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<PAGE>
of the "bonus value" of this Lease (i.e., the difference between Rent payable
hereunder and the then fair market rental value of the Premises) for the balance
of the Lease Term. No condemnation of any kind shall be construed to constitute
an actual or constructive eviction of Tenant or a breach of any express or
implied covenant of quiet enjoyment. Tenant hereby waives the effect of Sections
1265.120 and 1265.130 of the California Code of Civil Procedure and any
successor statutes.
14.4 Temporary Condemnation. In the event of a temporary condemnation not
----------------------
extending beyond the Term, this Lease shall remain in effect, Tenant shall
continue to pay Rent and Tenant shall receive any award made for such
condemnation except damages to any of Landlord's property. If a temporary
condemnation is for a period which extends beyond the Term, this Lease shall
terminate as of the date of initial occupancy by the condemning authority and
any such award shall be distributed in accordance with the preceding section.
If a temporary condemnation remains in effect at the expiration or earlier
termination of this Lease, Tenant shall pay Landlord the reasonable cost of
performing any obligations required of Tenant with respect to the surrender of
the Premises.
15. DEFAULT.
-------
15.1 Events of Defaults. The occurrence of any of the following events
------------------
shall, at Landlord's option, constitute an "Event of Default":
15.1.1 Vacation or abandonment of the Premises, as "abandonment" is
defined in California Civil Code Section 1951.3; provided, however, that
vacation of the Premises shall not constitute an Event of Default provided that
Tenant at all times is otherwise in compliance with the provisions of this Lease
and maintains sufficient security personnel on site or otherwise complies with
the security requirements of Landlord's insurance carrier, to protect the
Premises from vandalism or other damage;
15.1.2 Failure to pay Base Rent (or any other rental owing under this
Lease, the date for payment of which has been identified in writing to Tenant
for at least thirty (30) days prior to the date that it is due) on the date when
due and the failure continuing for a period of five (5) days after Tenant has
received written notice from Landlord that such payment is due;
15.1.3 Failure to perform Tenant's covenants and obligations
hereunder (except default in the payment of Base Rent or any other rental as to
which Tenant is in default under Section 15.1.2 above) where such failure
continues for a period of thirty (30) days after written notice from Landlord;
provided, however, if the nature of the default is such that more than thirty
(30) days are reasonably required for its cure, Tenant shall not be deemed to be
in default if Tenant commences the cure within ten (10) days after written
notice from Landlord and diligently and continuously prosecutes such cure to
completion;
15.1.4 The making of a general assignment by Tenant for the benefit
of creditors; the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation or reorganization of Tenant under any
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<PAGE>
law relating to bankruptcy, insolvency or other relief of debtors and, in the
case of an involuntary action, the failure to remove or discharge the same
within sixty (60) days of such filing; the appointment of a receiver or other
custodian to take possession of substantially all of Tenant's assets or this
leasehold; Tenant's insolvency or inability to pay Tenant's debts or failure
generally to pay Tenant's debts when due; any court entering a decree or order
directing the winding up or liquidation of Tenant or of substantially all of
Tenant's assets; Tenant taking any action toward the dissolution or winding up
of Tenant's affairs; or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets or this leasehold;
15.1.5 The intentional making of any material misrepresentation or
omission by Tenant or any successor in interest of Tenant in any materials
delivered by or on behalf of Tenant to Landlord or Landlord's lender pursuant to
this Lease which misrepresentation or omission has had a material adverse effect
upon Tenant's ability to pay or perform its obligations under this Lease.
15.2 Remedies.
--------
15.2.1 Termination. In the event of the occurrence and during the
-----------
continuance of any Event of Default, Landlord shall have the right to give a
written termination notice to Tenant (which notice may be the notice given under
Section 15.1 above, if applicable) and, on the date specified in such notice,
this Lease shall terminate unless on or before such date all arrears of Rent and
all other sums payable by Tenant under this Lease and all costs and expenses
incurred by or on behalf of Landlord hereunder shall have been paid by Tenant
and all other Events of Default at the time existing shall have been fully
remedied to the satisfaction of Landlord.
15.2.1.1 Repossession. Following termination, without
prejudice to other remedies Landlord may have, Landlord may (i) peaceably re-
enter the Premises upon voluntary surrender by Tenant or remove Tenant therefrom
and any other persons occupying the Premises, using such legal proceedings as
may be available; (ii) repossess the Premises or relet the Premises or any part
thereof for such term (which may be for a term extending beyond the Term), at
such rental and upon such other terms and conditions as Landlord in Landlord's
sole discretion shall determine, with the right to make reasonable alterations
and repairs to the Premises; and (iii) remove all personal property therefrom.
15.2.1.2 Unpaid Rent. Landlord shall have all the rights and
-----------
remedies of a landlord provided by Applicable Law, including the right to
recover from Tenant: (a) the worth, at the time of award, of the unpaid Rent
that had been earned at the time of termination, (b) the worth, at the time of
award, of the amount by which the unpaid Rent that would have been earned after
the date of termination until the time of award exceeds the amount of loss of
rent that Tenant proves could have been reasonably avoided, (c) the worth, at
the time of award, of the amount by which the unpaid Rent for the balance of the
Term after the time of award exceeds the amount of the loss of rent that Tenant
proves could have been reasonably avoided, and (d) any other amount, and court
costs, necessary to compensate Landlord for all detriment proximately caused by
Tenant's default. The phrase "worth, at the time of award," as used in (a)
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<PAGE>
and (b) above, shall be computed at the Applicable Interest Rate, and as used in
(c) above, shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
15.2.2 Continuation. Even though an Event of Default may have
------------
occurred, this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession; and Landlord may enforce all of
Landlord's rights and remedies under this Lease, including the remedy described
in California Civil Code Section 1951.4 ("lessor" may continue the Lease in
effect after "lessee's" breach and abandonment and recover Rent as it becomes
due, if "lessee" has the right to sublet or assign, subject only to reasonable
limitations) to recover Rent as it becomes due. To the extent permitted under
said California Civil Code Section 1951.4, Landlord, without terminating this
Lease, may, during the period during which an Event of Default by Tenant exists,
attempt to relet the same, or any portion thereof, to third parties for Tenant's
account and Tenant shall be liable to Landlord for all reasonable costs Landlord
incurs in attempting to relet the Premises. Tenant shall continue to pay the
Rent on the date the same is due. No act by Landlord hereunder, including acts
of maintenance, preservation or efforts to lease the Premises or the appointment
of a receiver upon application of Landlord to protect Landlord's interest under
this Lease, shall terminate this Lease unless Landlord notifies Tenant that
Landlord elects to terminate this Lease. So long as this Lease is not
terminated, Landlord shall have the right to remedy any default of Tenant, to
maintain or improve the Premises, to cause a receiver to be appointed to
administer the Premises and new or existing subleases and to add to the Rent
payable hereunder all of Landlord's reasonable costs in so doing, with interest
at the Applicable Interest Rate from the date of such expenditure.
15.3 Cumulative. Each right and remedy of Landlord provided for herein or
----------
now or hereafter existing at law, in equity, by statute or otherwise shall be
cumulative and shall not preclude Landlord from exercising any other rights or
remedies provided for in this Lease or now or hereafter existing at law or in
equity, by statute or otherwise. No payment by Tenant of a lesser amount than
the Rent nor any endorsement on any check or letter accompanying any check or
payment as Rent shall be deemed an accord and satisfaction of full payment of
Rent; and Landlord may accept such payment without prejudice to Landlord's right
to recover the balance of such Rent or to pursue other remedies.
16. ASSIGNMENT AND SUBLETTING.
-------------------------
16.1 Consent. Tenant shall not assign, sublet or otherwise transfer,
-------
whether voluntarily or involuntarily or by operation of law, the Premises or any
part thereof without Landlord's prior written approval, which shall not be
unreasonably withheld, conditioned or delayed; provided, however, Tenant agrees
it shall be reasonable for Landlord to disapprove of a requested sublease or
assignment, if the proposed subtenant or assignee does not have a tangible net
worth (as determined in accordance with generally accepted accounting principles
consistently applied) equal to or greater than that of Tenant as of the date of
the Lease as shown in the financial information provided to Landlord, or if such
proposed subtenant or assignee is in the process of negotiation with Landlord to
lease other space owned or managed by Landlord.
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<PAGE>
16.2 Mergers and Asset Acquisitions. The merger of Tenant with any other
------------------------------
entity or the transfer of any controlling or managing ownership or beneficial
interest in Tenant, or the assignment of substantially all of the assets of
Tenant, whether or not located at the Premises, shall constitute an assignment
hereunder; provided, however, that if, following such merger or asset assignment
or transfer of an ownership interest, the financial condition of the Tenant
shall be equal to or shall exceed the financial condition of the Tenant as of
the date of this Lease, then such merger or acquisition shall constitute a
permitted assignment hereunder, subject to all of the terms and conditions of
this Lease such as, by way of illustration, the use provision.
16.3 Transfer Notice. If Tenant desires to assign this Lease or sublet any
---------------
or all of the Premises, Tenant shall give Landlord written notice (the "Transfer
Notice") thereof with copies of all related documents and agreements associated
with the assignment or sublease, including without limitation, the financial
statements of any proposed assignee or subtenant, thirty (30) days prior to the
anticipated effective date of the assignment or sublease. The space which
Tenant describes in the Transfer Notice as the space which Tenant proposes to
assign or sublease shall be referred to herein as the "Subject Space." Tenant
shall pay Landlord's reasonable attorneys' fees incurred in the review of such
documentation plus an administrative fee of Five Hundred Dollars ($500.00) for
each proposed transfer. Landlord shall have a period of fifteen (15) days
following receipt of such notice and all related documents and agreements to
notify Tenant in writing of Landlord's approval or disapproval of the proposed
assignment or sublease. If Landlord fails to notify Tenant in writing of such
election, Landlord shall be deemed to have approved such assignment or
subletting. This Lease may not be assigned by operation of law. Any purported
assignment or subletting contrary to the provisions hereof shall be void and
shall constitute an Event of Default hereunder.
16.4 Transfer Premiums. If Tenant receives rent or other consideration for
-----------------
any such transfer in excess of the Rent, or in case of the sublease of a portion
of the Premises, in excess of such Rent that is fairly allocable to such
portion, after appropriate adjustments to assure that all other payments
required hereunder are appropriately taken into account and after deducting
brokerage commissions and tenant improvement costs payable by Tenant in
connection with such transfer and the unamortized value of any alterations or
improvements in the Subject Space paid for by Tenant ("Transfer Premiums"),
Tenant shall pay Landlord fifty percent (50%) of the Transfer Premium within
thirty (30) days of receipt thereof.
16.5 Direct Collection. Landlord may, without waiving any rights or
-----------------
remedies, collect rent from the assignee, subtenant or occupant and apply the
net amount collected to the Rent herein reserved and apportion any excess rent
so collected in accordance with the terms of the preceding sentence. Such
acceptance of Rent shall in no event be deemed to imply that Landlord is
approving a subtenant or assignee which Landlord has not approved in writing
pursuant to the requirements of this Section 16.
16.6 Additional Conditions. Tenant shall continue to be liable as a
---------------------
principal and not as a guarantor or surety to the same extent as though no
assignment or subletting had been made. Landlord may not consent to subsequent
assignments or subletting of this Lease or amendments
-24-
<PAGE>
or modifications to the Lease by assignees of Tenant without notifying Tenant or
any successor of Tenant and without obtaining their consent. No permitted
transfer shall be effective until there has been delivered to Landlord a
counterpart of the transfer instrument in which the transferee agrees to be and
remain jointly and severally liable with Tenant for the payment of Rent
pertaining to the Premises and for the performance of all the terms and
provisions of this Lease relating thereto arising on or after the date of the
transfer.
16.7 Related Entities. Notwithstanding the foregoing, Tenant may, without
----------------
Landlord's prior consent and without payment of any amount to Landlord, sublet
any of the Premises or assign this Lease to (a) a subsidiary, affiliate,
division or corporation controlling, controlled by, or under common control with
Tenant, (b) a successor corporation related to Tenant by merger (subject to the
limitations regarding merger described above), consolidation, non-bankruptcy
reorganization or government action, or (c) a purchaser of substantially all of
Tenant's assets located at the Premises (subject to the limitations regarding
asset acquisition described above). Neither the sale or transfer of Tenant's
capital stock, including without limitation, a transfer in connection with the
merger (subject to the limitations regarding merger described above),
consolidation or non-bankruptcy reorganization of Tenant and any sale through
any private or public offering, nor the pledge or grant of a security interest
in any of Tenant's capital stock shall be deemed an assignment, subletting or
other transfer of this Lease or the Premises. Tenant shall notify Landlord in
writing of the occurrence of an assignment or subletting as outlined above, and
such assignment or subletting shall not become effective until Tenant has
provided Landlord with such corporate resolutions and corporate documentation
evidencing the existence of, the authority of and the assumption of lease
obligations by such assignee or subtenant and financial statements verifying the
financial condition of the transferee, if required under this Lease.
16.8 Occupancy By Others. On a temporary basis, Tenant may allow any
-------------------
person or company which is a client or customer of Tenant or which is providing
service to Tenant or one of Tenant's clients to occupy certain portions of the
Premises (not to exceed twenty percent (20%) of the area thereof) without such
occupancy being deemed an assignment or subleasing as long as no new demising
walls are constructed to accomplish such occupancy and as long as such
relationship was not created as a subterfuge to avoid the obligations set forth
in this Section 16.
16.9 Recapture. Notwithstanding anything to the contrary contained in this
---------
Section 16, Landlord shall have the option, by giving written notice to Tenant
within thirty (30) days after receipt of any Transfer Notice other than a
Transfer Notice issued with respect to the provisions of Sections 16.2, 16.7 and
16.8 above, which Landlord has approval rights under this Section 16, to
recapture the Subject Space, so long as such Transfer Notice is with respect to
an assignment of all of Tenant's right, title and interest in and to this Lease,
or is with respect to a portion of the Premises which is being physically
demised, with separate identity and with secured entrances, for the balance of
the term of the Lease. Such recapture notice shall cancel and terminate this
Lease with respect to such Subject Space as of the date stated in the Transfer
Notice as the effective date of the proposed assignment or sublease until the
last day of the proposed term of the assignment or sublease as set forth in the
Transfer Notice. If this Lease shall be canceled with respect to less than the
entire Premises, the Rent reserved herein shall be prorated on the
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<PAGE>
basis of the number of rentable square feet retained by Tenant in proportion to
the number of rentable square feet contained in the Premises, and this Lease as
so amended shall continue thereafter in full force and effect, and upon request
of either party, the parties shall execute written confirmation of the same. If
Landlord declines, or fails to elect in a timely manner to recapture such
Subject Space under this Section 16.9, then, provided Landlord has consented to
the proposed assignment or sublease, Tenant shall be entitled to proceed to
transfer such Subject Space to the proposed assignee or sublessee named in the
Transfer Notice upon all of the terms set forth in the Transfer Notice.
17. ESTOPPEL, ATTORNMENT AND SUBORDINATION.
--------------------------------------
17.1 Estoppel. Within ten (10) business days after written request by
--------
Landlord, Tenant shall deliver an estoppel certificate duly executed (and
acknowledged if required by any lender), in the form attached hereto as Exhibit
-------
G, or in such other commercially reasonable form as may be acceptable to the
- -
lender, which form may include some or all of the provisions contained in
Exhibit G, to any proposed mortgagee, purchaser or Landlord. Tenant's failure to
- ---------
deliver said statement in such time period shall be conclusive upon Tenant that
(a) this Lease is in full force and effect, without modification except as may
be represented by Landlord; (b) there are no uncured defaults in Landlord's
performance and Tenant has no right of offset, counterclaim or deduction against
Rent hereunder; and (c) no more than one month's Base Rent has been paid in
advance other than the security deposit and the Letter of Credit. If any
financier should require that this Lease be amended, and such amendment shall in
no respect impact Tenant negatively from an economic perspective or from the
standpoint of the beneficial use and occupancy of the Premises (e.g., as an
illustration, but not a limitation, of the foregoing, other than in the
description of the Premises, the Term, the Permitted Use, or the Rent), Landlord
shall give written notice thereof to Tenant, which notice shall be accompanied
by a Lease supplement embodying such amendments. Tenant shall, within ten (10)
days after the receipt of Landlord's notice, execute and deliver to Landlord the
tendered Lease supplement.
17.2 Subordination. This Lease shall be subject and subordinate to all
-------------
ground leases, master leases and the lien of all mortgages and deeds of trust
which now or hereafter affect the Premises or the Project or Landlord's interest
therein, and all amendments thereto, all without the necessity of Tenant's
executing further instruments to effect such subordination. If requested,
Tenant shall execute and deliver to Landlord within ten (10) business days after
Landlord's request whatever documentation that may reasonably be required to
further effect the provisions of this paragraph including a Subordination,
Nondisturbance and Attornment Agreement in the commercially reasonable form
required by the applicable lender, ground Lessor and/or master lessor.
Notwithstanding the foregoing, the subordination of Tenant's rights and
interests under this Lease to any mortgage or deed of trust shall be contingent
upon Tenant's having received from any such mortgagee or beneficiary of any deed
of trust a written recognition agreement in such commercially reasonable form
providing that Tenant's rights and interest shall not be disturbed in the event
of any foreclosure of any such mortgage or deed of trust and confirming that
Tenant shall receive all of the rights and services provided for under this
Lease. Prior to the Commencement Date, Landlord shall obtain and deliver to
Tenant such a recognition and non-
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<PAGE>
disturbance agreement in a form reasonably acceptable to Tenant from each
mortgagee or beneficiary of any deed of trust then encumbering the Building.
17.3 Attornment. Tenant hereby agrees that Tenant will recognize as its
----------
landlord under this Lease and shall attorn to any person succeeding to the
interest of Landlord in respect of the land and the buildings governed by this
Lease upon any foreclosure of any mortgage upon such land or buildings or upon
the execution of any deed in lieu of foreclosure in respect to such deed of
trust. If requested, Tenant shall execute and deliver an instrument or
instruments confirming its attornment as provided for herein; provided, however,
that no such beneficiary or successor-in-interest shall be bound by any payment
of Base Rent for more than one (1) month in advance other than the security
deposit and the Letter of Credit, or any amendment or modification of this Lease
made without the express written consent of such beneficiary where such consent
is required under applicable loan documents.
18. INTENTIONALLY DELETED.
19. MISCELLANEOUS.
-------------
19.1 General.
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19.1.1 Entire Agreement. This Lease sets forth all the agreements
----------------
between Landlord and Tenant concerning the Premises; and there are no agreements
either oral or written other than as set forth herein.
19.1.2 Time of Essence. Time is of the essence of this Lease.
---------------
19.1.3 Attorneys' Fees. In any action or proceeding which either
---------------
party brings against the other to enforce its rights hereunder, the
nonprevailing party shall pay all costs incurred by the prevailing party,
including reasonable attorneys' fees, which amounts shall be a part of the
judgment in said action or proceeding.
19.1.4 Severability. If any provision of this Lease or the
------------
application of any such provision shall be held by a court of competent
jurisdiction to be invalid, void or unenforceable to any extent, the remaining
provisions of this Lease and the application thereof shall remain in full force
and effect and shall not be affected, impaired or invalidated.
19.1.5 Law. This Lease shall be construed and enforced in accordance
---
with the laws of the state in which the Premises are located.
19.1.6 No Option. Submission of this Lease to Tenant for examination
---------
or negotiation does not constitute an option to lease, offer to lease or a
reservation of, or option for, the Premises; and this document shall become
effective and binding only upon the execution and delivery hereof by Landlord
and Tenant.
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<PAGE>
19.1.7 Successors and Assigns. This Lease shall be binding upon and
----------------------
inure to the benefit of the successors and assigns of Landlord and, subject to
compliance with the terms of Section 16, Tenant.
19.1.8 Third Party Beneficiaries. Nothing herein is intended to
-------------------------
create any third party benefit.
19.1.9 Memorandum of Lease. Tenant shall not record this Lease or a
-------------------
short form memorandum hereof without Landlord's prior written consent which
Landlord may withhold in its sole discretion.
19.1.10 Agency, Partnership or Joint Venture. Nothing contained
------------------------------------
herein nor any acts of the parties hereto shall be deemed or construed by the
parties hereto, nor by any third party, as creating the relationship of
principal and agent or of partnership or of joint venture by the parties hereto
or any relationship other than the relationship of landlord and tenant.
19.1.11 Merger. The voluntary or other surrender of this Lease by
------
Tenant or a mutual cancellation thereof or a termination by Landlord shall not
work a merger and shall, at the option of Landlord, terminate all or any
existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies.
19.1.12 Headings. Section headings have been inserted solely as a
--------
matter of convenience and are not intended to define or limit the scope of any
of the provisions contained therein.
19.1.13 Security Measures. Tenant hereby acknowledges that Landlord
-----------------
shall have no obligation to provide a guard service or other security measures
whatsoever. Tenant assumes all responsibility for the protection of the
Premises, Tenant, its agents and invitees and their property from the acts of
third parties.
19.2 Signs. All signs and graphics of every kind visible in or from public
-----
view or corridors, the Common Areas or the exterior of the Premises (whether
located inside or outside of the Premises) shall be subject to Landlord's prior
written approval and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's signage program.
Tenant shall remove all such signs and graphics prior to the termination of this
Lease. Such installations and removals shall be made in such manner as to avoid
injury or defacement of the Premises; and Tenant shall repair any injury or
defacement, including without limitation, discoloration caused by such
installation or removal. Landlord shall not unreasonably withhold, condition or
delay its approval of any Tenant signage. Tenant shall have the right to a
portion of the signage surface area, on a non-discriminatory basis, of all
monument and building signage associated with the Building which has been
provided by Landlord or at Landlord's expense within the Project.
19.3 Waiver. No waiver of any default or breach hereunder shall be implied
------
from any omission to take action on account thereof, notwithstanding any custom
and practice or course of
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<PAGE>
dealing. No waiver by either party of any provision under this Lease shall be
effective unless in writing and signed by such party. No waiver shall affect any
default other than the default specified in the waiver and then such waiver
shall be operative only for the time and to the extent therein stated. Waivers
of any covenant shall not be construed as a waiver of any subsequent breach of
the same.
19.4 Financial Statements. Tenant shall provide to any lender, purchaser
--------------------
or Landlord, within ten (10) business days after request, a current, accurate
financial statement for Tenant and Tenant's business prepared under generally
accepted accounting principles consistently applied. Landlord shall keep all
such financial statements and other information regarding Tenant's business
strictly confidential subject to Landlord's right to provide copies thereof to
Landlord's attorneys, accountants, lenders or prospective lenders and purchasers
or prospective purchasers of the Building, on a "need to know" basis.
19.5 Limitation of Liability. The obligations of Landlord under this Lease
-----------------------
are not personal obligations of the individual partners, members, managers,
directors, officers, shareholders, agents or employees of Landlord; and Tenant
shall look solely to the Project for satisfaction of any liability of Landlord
and shall not look to other assets of Landlord nor seek recourse against the
assets of the individual partners, directors, officers, shareholders, agents or
employees of Landlord. Whenever Landlord transfers its interest, Landlord shall
be automatically released from further performance under this Lease and from all
further liabilities and expenses hereunder first accruing after the date of such
transfer and the transferee of Landlord's interest shall assume all liabilities
and obligations of Landlord hereunder from the date of such transfer.
19.6 Notices. All notices to be given hereunder shall be in writing and
-------
mailed postage prepaid by certified or registered mail, return receipt
requested, or delivered by personal or courier delivery, or sent by facsimile,
electronically confirmed, (immediately followed by one of the preceding
methods), to Landlord's Address and Tenant's Address, or to such other place as
Landlord or Tenant may designate in a written notice given to the other party.
Notices shall be deemed served upon the first attempted delivery by the U.S.
Postal Service, the courier or a recognized overnight delivery service, or upon
receipt of the facsimile prior to 5 p.m. on any business day, or, if after 5
p.m., on the next business day.
19.7 Brokerage Commission. Landlord shall pay a brokerage commission to
--------------------
Landlord's Broker specified in the Basic Lease Information in accordance with a
separate agreement between Landlord and Landlord's Broker. Landlord shall have
no further or separate obligation for payment of any commissions or fees to any
other broker or finder. Tenant warrants to Landlord that Tenant's sole contact
with Landlord or with the Premises in connection with this transaction has been
directly with Landlord, Landlord's Broker and Tenant's Broker specified in the
Basic Lease Information, and that no other broker or finder can properly claim a
right to a commission or a finder's fee based upon contacts between the claimant
and Tenant. Any commissions or fees payable to Tenant's Broker with respect to
this transaction shall be paid by Landlord's Broker or Tenant, and Landlord
shall have no obligation with respect thereto.
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Subject to the foregoing, Tenant agrees to indemnify and hold Landlord harmless
from any claims or liability, including reasonable attorneys' fees, in
connection with a claim by any person for a real estate broker's commission,
finder's fee or other compensation based upon any statement, representation or
agreement of Tenant, and Landlord agrees to indemnify and hold Tenant harmless
from any such claims or liability, including reasonable attorneys' fees, based
upon any statement, representation or agreement of Landlord.
19.8 Authorization. Tenant represents and warrants that each individual
-------------
executing this Lease on behalf of Tenant is duly authorized to execute and
deliver this Lease on behalf of Tenant and that such execution is binding upon
Tenant.
19.9 Holding Over; Surrender
-----------------------
19.9.1 Holding Over. If Tenant holds over the Premises or any part
------------
thereof after expiration of the Term, such holding over shall, at Landlord's
option, constitute a month-to-month tenancy, at a rent equal to one hundred
fifty percent (150%) for the first 60 days (as may be extended to the extent
that such holding over is caused by an event of Force Majeure affecting Tenant's
new premises) and two hundred percent (200%) thereafter, of the Base Rent in
effect immediately prior to such holding over and shall otherwise be on all the
other terms and conditions of this Lease. This paragraph shall not be construed
as Landlord's permission for Tenant to hold over. Acceptance of Rent by
Landlord following expiration or termination shall not constitute a renewal of
this Lease or extension of the Term except as specifically set forth above. If
Tenant fails to surrender the Premises upon expiration or earlier termination of
this Lease, Tenant shall indemnify and hold Landlord harmless from and against
all loss or liability resulting from or arising out of Tenant's failure to
surrender the Premises, including, but not limited to, any amounts required to
be paid to any tenant or prospective tenant who was to have occupied the
Premises after the expiration or earlier termination of this Lease and any
related attorneys' fees and brokerage commissions.
19.9.2 Surrender. Upon the termination of this Lease or Tenant's
---------
right to possession of the Premises, Tenant will surrender the Premises broom
clean, together with all keys, in good condition and repair, reasonable wear and
tear, acts of God, casualties, condemnation, Hazardous Materials (other than
those as to which Tenant bears responsibility for remediation under the terms of
this Lease), and alterations and improvements which Tenant is not required to
remove at the termination of this Lease excepted. Tenant shall patch and fill
all holes within the Premises and all penetrations of the roof shall be resealed
to a watertight condition. In no event may Tenant remove from the Premises any
mechanical or electrical systems or any wiring within the Premises. Conditions
existing because of Tenant's failure to perform maintenance, repairs or
replacements shall not be deemed "reasonable wear and tear."
19.10 Joint and Several. If Tenant consists of more than one person, the
-----------------
obligation of all such persons shall be joint and several.
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<PAGE>
19.12 Auctions. Tenant shall not conduct, nor permit to be conducted, any
--------
auction upon the Premises without Landlord's prior written consent. Landlord
shall not be obligated to exercise any standard of reasonableness in determining
whether to permit an auction.
19.13 Consents. Except as otherwise provided elsewhere in this Lease,
--------
Landlord's actual reasonable costs and expenses (including, but not limited to,
architects', attorneys', engineers' and other consultants' fees) incurred in the
consideration of, or response to, a request by Tenant for any Landlord consent,
including but not limited to, consents to an assignment, a subletting or the
presence or use of a Hazardous Material, shall be paid by Tenant upon receipt of
an invoice and supporting documentation therefor. Landlord's consent to any
act, assignment or subletting shall not constitute an acknowledgment that no
Event of Default or breach by Tenant of this Lease exists, nor shall such
consent be deemed a waiver of any then existing Event of Default or breach,
except as may be otherwise specifically stated in writing by Landlord at the
time of such consent. Except as otherwise set forth herein, the failure to
specify herein any particular condition to Landlord's consent shall not preclude
the imposition by Landlord at the time of consent of such further or other
conditions as are then reasonable with reference to the particular matter for
which consent is being given. Whenever this Lease requires the approval,
consent, designation, determination, selection or judgment by either Landlord or
Tenant, such approval, consent, designation, determination, selection or
judgment and conditions imposed thereby shall be reasonable and shall not be
unreasonably withheld or delayed and, in exercising any right or remedy
hereunder, each party shall at all times act reasonably and in good faith.
19.14 Force Majeure. "Force Majeure" as used herein means delays
-------------
resulting from causes beyond the reasonable control of the other party,
including, without limitation, any delay caused by any action, inaction, order,
ruling, moratorium, regulation, statute, condition or other decision of any
private party or governmental agency having jurisdiction over any portion of the
Project, over the construction anticipated to occur thereon or over any uses
thereof, or by delays in inspections or in issuing approvals by private parties
or permits by governmental agencies, or by fire, flood, inclement weather,
strikes, lockouts or other labor or industrial disturbance (whether or not on
the part of agents or employees of either party hereto engaged in the
construction of the Premises, but specifically excluding disputes between
Landlord and any contractor, subcontractor, supplier or vendor providing goods
or services to the Project), civil disturbance, order of any government, court
or regulatory body claiming jurisdiction or otherwise, act of public enemy, war,
riot, sabotage, blockage, embargo, failure or inability to secure materials,
supplies or labor through ordinary sources by reason of shortages or priority,
earthquake, or other natural disaster, delays caused by any dispute resolution
process, or any cause whatsoever beyond the reasonable control (excluding
financial inability) of the party whose performance is required, or any of its
contractors or other representatives, whether or not similar to any of the
causes hereinabove stated.
19.15 Mortgagee Protection. Tenant agrees to give any holder of any
--------------------
mortgage or deed of trust secured by the Real Property, by registered or
certified mail or nationally recognized overnight delivery service, a copy of
any notice of default served upon the Landlord by Tenant, provided that, prior
to such notice, Tenant has been notified in writing (by way of service on
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<PAGE>
Tenant of a copy of assignment of rents and leases or otherwise) of the address
of such holder of a mortgage or deed of trust. Tenant further agrees that if
Landlord shall have failed to cure such default within thirty (30) days after
such notice to Landlord (or if such default cannot be cured or corrected within
that time, then such additional time as may be necessary if Landlord has
commenced within such thirty (30) day period and is diligently pursuing the
remedies or steps necessary to cure or correct such default), then the holder of
any mortgage or deed of trust shall have an additional thirty (30) days within
which to cure or correct such default. Notwithstanding the foregoing, in no
event shall any holder of any mortgage or deed of trust have any obligation to
cure any default of the Landlord.
19.17 Hazardous Substance Disclosure. California law requires landlords to
------------------------------
disclose to tenants the existence of certain Hazardous Materials. Accordingly,
the existence of gasoline and other automotive fluids, asbestos containing
materials, maintenance fluids, copying fluids and other office supplies and
equipment, certain construction and finish materials, tobacco smoke, cosmetics
and other personal items must be disclosed. Gasoline and other automotive
fluids are found in the garage and parking areas of the Project. Cleaning,
lubricating and hydraulic fluids used in the operation and maintenance of the
Building are found in the utility areas of the Building not generally accessible
to Building occupants or the public. Many Building occupants use copy machines
and printers with associated fluids and toners, and pens, markers, inks, and
office equipment that may contain Hazardous Materials. Certain adhesives,
paints and other construction materials and finishes used in portions of the
Building may contain Hazardous Materials. The Building may from time to time be
exposed to tobacco smoke. Building occupants and other persons entering the
Building from time to time may use or carry prescription and non-prescription
drugs, perfumes, cosmetics and other toiletries, and foods and beverages, some
of which may contain Hazardous Materials. By its execution of this Lease,
Tenant acknowledges that the notice set forth hereinabove shall constitute the
notice required under California Health and Safety Code Section 25915.5.
19.18 Intentionally Deleted.
19.19 Reasonable Expenditures. Any expenditure by a party permitted or
-----------------------
required under this Lease, for which such party is entitled to demand and does
demand reimbursement from the other party, shall be limited to the fair market
value of the goods and services involved, shall be reasonably incurred, and
shall be substantiated by documentary evidence available for inspection and
review by the other party or its representatives during normal business hours.
19.20 Parking. Tenant shall have the right to the non-exclusive use of
-------
its pro-rata share (which shall be equal to Tenant's Share of Building Expenses
and which shall include not less than 150 parking spaces) of the parking spaces
located in the Common Area. Landlord shall use its good-faith, commercially
reasonable effort to assure that parking is not oversubscribed at the Project.
20. LETTER OF CREDIT. In addition to the Security Deposit required to be paid
by Tenant to Landlord pursuant to this Lease, Tenant shall deliver to Landlord a
letter of credit in the
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<PAGE>
amount of Two Hundred Twenty Thousand Dollars ($220,000.00) (the "Letter of
Credit Amount") upon the full execution of this Lease in accordance with the
terms and conditions of this Section 20.
20.1 Delivery. Concurrently with Tenant's execution of the Lease,
--------
Tenant shall deliver to Landlord, as collateral for the full and faithful
performance by Tenant of all of its obligations under the Lease and for all
losses and damages Landlord may suffer as a result of any default by Tenant
under the Lease, an irrevocable and unconditional negotiable letter of credit
(the "Letter of Credit"), in the form and containing the terms required herein,
payable in the County of San Francisco, California, running in favor of Landlord
issued by Silicon Valley National Bank or by one of the three largest national
banking associations with banking offices in San Francisco, California, in the
amount of the Letter of Credit Amount (as such term is defined above). The
Letter of Credit shall be (i) at sight and irrevocable, (ii) subject to the
terms of this Section 20, maintained in effect, for the period from Tenant's
execution of the Lease and continuing until that date which is twenty-five (25)
months after the Commencement Date (the "LC Expiration Date"), (iii) subject to
the Uniform Customs and Practices for Documentary Credits (1993-Rev)
International Chamber of Commerce Publication #500, (iv) fully assignable by
Landlord but only in connection with a transfer of Landlord's interest in the
Lease, including a transfer of Landlord's interest in the Lease by foreclosure
or deed in lieu of foreclosure, and (v) permit partial draws. In addition to
the foregoing, the form and terms of the Letter of Credit (and the bank issuing
the same) shall be acceptable to Landlord, in Landlord's reasonable discretion,
and shall provide, among other things, in effect that: (A) Landlord, or its then
managing agent, shall have the right to draw down an amount up to the face
amount of the Letter of Credit upon the presentation to the issuing bank of
Landlord's (or Landlord's then managing agent's) written statement that such
amount is due to Landlord under the terms and conditions of the Lease,
including, without limitation, this Section 20, it being understood that if
Landlord or its managing agent be a corporation, partnership or other entity,
then such statement shall be signed by an officer (if a corporation), a general
partner (if a partnership), or any authorized party (if another entity); (B) the
Letter of Credit will be honored by the issuing bank without inquiry as to the
accuracy thereof and regardless of whether the Tenant disputes the content of
such statement; and (C) in the event of a transfer of Landlord's interest in the
Building, Landlord shall transfer the Letter of Credit, in whole or in part (or
cause a substitute letter of credit to be delivered, as applicable) to the
transferee and thereupon Landlord shall, without any further agreement between
the parties, be released by Tenant from all liability therefor, and it is agreed
that the provisions hereof shall apply to every transfer or assignment of the
whole or any portion of said Letter of Credit to a new Landlord. If, as result
of any application or use by Landlord of all or any part of the Letter of Credit
(or any "Cash Collateral," as that term is defined, below), the amount of the
Letter of Credit and Cash Collateral shall collectively be less than the Letter
of Credit Amount, Tenant shall, within ten (10) business days thereafter,
provide Landlord with either (1) cash (the "Cash Collateral") to be held and
applied by Landlord as collateral in the same manner as if Landlord held such
amount as part of the Letter of Credit, or (2) additional letter(s) of credit in
an amount equal to the deficiency (or a replacement letter of credit in the
total Letter of Credit Amount), and any such additional (or replacement) letter
of credit shall comply with all of the provisions of this Section 20. Tenant
further covenants and warrants that
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<PAGE>
it will neither assign nor encumber the Letter of Credit or Cash Collateral, as
the case may be, or any part thereof and that neither Landlord nor its
successors or assigns will be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance. Without limiting the generality
of the foregoing, if the Letter of Credit expires earlier than the LC Expiration
Date, Landlord will accept Cash Collateral, a renewal letter of credit or
substitute letter of credit (such renewal or substitute letter of credit or Cash
Collateral to be in effect and delivered to Landlord, as applicable, not later
than thirty (30) days prior to the expiration of the Letter of Credit), which
with respect to any letter of credit shall be irrevocable and automatically
renewable as above provided through the LC Expiration Date upon the same terms
as the expiring Letter of Credit or such other terms as may be acceptable to
Landlord in its reasonable discretion. However, if the Cash Collateral is not
timely delivered or the Letter of Credit is not timely renewed or a substitute
letter of credit is not timely received, or if Tenant fails to maintain the
Letter of Credit and/or the Cash Collateral in the amount and in accordance with
the terms set forth in this Section 20, Landlord shall have the right to present
the Letter of Credit to the bank in accordance with the terms of this Section
20, and the entire sum evidenced thereby shall be paid to and held by Landlord
as Cash Collateral for performance of all of Tenant's obligations under the
Lease and for all losses and damages Landlord may suffer as a result of any
default by Tenant under the Lease. If there shall exist an Event of Default by
Tenant under the Lease, including, without limitation, the Work Letter attached
to the Lease as Exhibit B, Landlord may, but without obligation to do so, draw
upon the Letter of Credit and/or utilize the Cash Collateral, in part or in
whole, to cure any default of Tenant and/or to compensate Landlord for any and
all damages of any kind or nature sustained or which may be sustained by
Landlord resulting from Tenant's default. Tenant agrees not to interfere in any
way with payment to Landlord of the proceeds of the Letter of Credit, either
prior to or following a "draw" by Landlord of any portion of the Letter of
Credit, regardless of whether any dispute exists between Tenant and Landlord as
to Landlord's right to draw from the Letter of Credit. No condition or term of
the Lease shall be deemed to render the Letter of Credit conditional to justify
the issuer of the Letter of Credit in failing to honor a drawing upon such
Letter of Credit in a timely manner.
20.2 Expiration. Notwithstanding anything to the contrary set forth
----------
in this Section 20, if as of the last day of the twenty-fourth (24th) month of
the Term of the Lease no Event of Default by Tenant exists under the Lease,
including without limitation, the Work Letter, which twenty-four-month term
shall be extended on a day-for-day basis by any number of days during which
Tenant was in the state of an uncured Event of Default following the expiration
of any applicable cure periods, Landlord shall return the Letter of Credit to
Tenant.
21. OPTION TO EXTEND.
21.1 Terms of Option. Provided that Tenant is not, as of the date of
---------------
exercise the option set forth herein, in a condition of an uncured Event of
Default, Tenant shall have the option to renew this Lease for an additional
period of sixty (60) months ("Extension Term"). The Extension Term shall be on
all the terms and conditions of this Lease, except that Landlord shall have no
additional obligation for free rent, leasing commissions, leasehold improvements
or for any other tenant inducements for the Extension Term. Base Rent shall be
adjusted to the then
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current fair market rental rate ("Market Rent") as set forth below. There shall
be no additional extension terms beyond the Extension Term set forth herein.
Tenant must exercise its option to extend this Lease by giving Landlord written
notice of its election to do so no later than one hundred eighty (180) nor
earlier than three hundred sixty-five (365) days prior to the end of the initial
Term. Any notice not given in a timely manner shall be void, and Tenant shall be
deemed to have waived its extension rights.
21.2 Determination of Base Rent During Extension Term.
------------------------------------------------
21.2.1 Agreement on Base Rent. Landlord and Tenant shall have thirty (30)
----------------------
days after Landlord receives the exercise notice in which to agree on the Base
Rent during the Extension Term.
21.2.2 Appraisal. If Landlord and Tenant are unable to agree upon the
---------
fair market rental rate for Base Rent for the Extension Term within such thirty
(30) day period, then within fifteen (15) days after the expiration of the
thirty (30) day period, each party, by giving notice to the other party together
with such party's proposed Market Rent, shall appoint a real estate appraiser
who is a current member of the American Institute of Real Estate Appraisers,
with at least five (5) years of experience appraising building space comparable
to the Premises in the vicinity of the Building to determine whether Landlord's
Market Rent submittal or Tenant's Market Rent submittal is closest to the Market
Rent that would have been proposed by such appraiser. Market Rent shall mean
the monthly amount per rentable square foot in the Premises that a willing, non-
equity new tenant would pay and a willing landlord would accept at arm's length
for space in a comparable building or buildings (considering age, quality of
construction, size, location and level of interior improvements other than those
interior improvements which have been paid for by Tenant other than through the
amortization of the cost of Tenant Improvements through the payment of rent to
Landlord), in a comparable location, giving appropriate consideration to the
then current monthly rental rates per rentable square foot, the presence or
absence of rent escalation clauses such as operating expense and tax pass-
throughs, length of lease term, size and location of premises being leased and
other generally applicable terms and conditions of tenancy for a similar
building or buildings. If the two (2) appraisers are unable to agree on whether
to use Landlord's or Tenant's submittal of the Market Rent for the Extension
Term within twenty (20) days, they shall select a third appraiser meeting the
qualifications stated in this Article within five (5) days after the last day
the two (2) appraisers are given to select either Landlord's or Tenant's
submitted Market Rent for the Extension Term. The third appraiser, however
selected, shall be a person who has not previously acted in any capacity for
either party. As it is the purpose of this "baseball arbitration" provision to
discourage the time, cost and expense of retaining arbitrators to determine
Market Rent and, rather, to cause the parties to meet in good faith and agree
upon the appropriate Market Rent through the advice and counsel of their
respective brokers, as was the case when the Base Rent for the initial term of
this Lease was determined without the use of such third party appraisers, the
nonprevailing party shall be responsible for the costs, charges and fees of all
of the appraisers retained pursuant to the provisions of this Article 21.
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21.2.3 Amendment of Lease. Immediately after the Base Rent is determined
------------------
pursuant to this Article 21, Landlord and Tenant shall execute an amendment to
this Lease stating the new Base Rent in effect.
IN WITNESS WHEREOF, the parties have executed this Lease as of the
date set forth above.
"Landlord" "Tenant"
CATELLUS DEVELOPMENT GODIGITAL TELECOMMUNICATIONS,
CORPORATION, a Delaware corporation INC., a California corporation
By: /s/ Don D. Little By: /s/ Frank I. Akers
Name: Don D. Little Name: Frank I. Akers
Its: Senior Vice President, Its: President & CEO
Northwest Industrial Development
Date: 6/1/99 Date: 5/20/99
By: /s/ T. Olin Nichols
Name: T. Olin Nichols
Its: CFO
Date: 6/8/99
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<PAGE>
EXHIBIT A
---------
PREMISES
[Includes an architectural schematic of the premises]
EXHIBIT A
Page 1
<PAGE>
EXHIBIT B
---------
WORK LETTER
THIS WORK LETTER ("Work Letter") is entered into as of this 20th day
of May, 1999, by and between CATELLUS DEVELOPMENT CORPORATION, a Delaware
corporation ("Landlord"), and GODIGITAL TELECOMMUNICATIONS, INC., a California
corporation ("Tenant").
R E C I T A L S :
----------------
A. Landlord and Tenant have entered into that certain Multi-Tenant
Industrial Triple Net Lease (the "Lease") dated as of the date hereof, covering
certain premises (the "Premises") more particularly described in the Lease.
This Work Letter is attached to the Lease as Exhibit B. The Lease is hereby
incorporated into this Work Letter by this reference. Capitalized terms not
defined in this Work Letter shall have the meanings given to such terms in the
Lease.
B. In consideration of the mutual covenants contained in the Lease
and this Work Letter, Landlord and Tenant hereby agree as follows:
A G R E E M E N T :
------------------
1. Definitions. As used in this Work Letter and in the Lease, the
-----------
term "Shell" shall mean that certain concrete, multi-tenant tilt up office and
light industrial building which contains approximately 102,656 Rentable Square
Feet (the "Building"). The term "Shell" shall include, without limitation, (i)
the foundation system and slab, walls, structural and finished roof, exterior
glazing, entry doors, and all improvements necessary for the Building to comply
with Applicable Laws; (ii) all parking areas (including striping and required
signage), driveways, curbs, sidewalks, utility installations, exterior lighting,
landscaping and related irrigation systems; and (iii) all on-site and off-site
improvements required by any governmental authority as a condition of its
issuance of any approval for construction of the Shell (including road widening,
re-surfacing and striping, signalization, sidewalks, curbs, lighting and other
improvements). As used in this Work Letter and in the Lease, the term "Tenant
Improvements" shall mean those improvements set forth on the "Final Tenant
Plans" (defined in Section 5(a) of this Work Letter).
2. Completion of Tenant Improvements. Subject to the terms of the
---------------------------------
Lease and this Work Letter and any "Tenant Delay" or "Force Majeure Delay" as
provided herein, Landlord shall complete the construction and installation of
the Tenant Improvements in accordance with the preliminary plans (the
"Preliminary Plans") attached hereto as Schedule 1 and in accordance with the
----------
terms of this Work Letter.
EXHIBIT B
Page 1
<PAGE>
3. Designation of Representatives. With respect to the planning,
------------------------------
design and construction of the Tenant Improvements, Landlord hereby designates
Randy Simmering as "Landlord's Representative" and Tenant hereby designates
David Tjon as "Tenant's Representative." Tenant hereby confirms that Tenant's
Representative has full authority to act on behalf of and to bind Tenant with
respect to all matters pertaining to the planning, design and construction of
the Tenant Improvements. Landlord hereby confirms that Landlord's
Representative has full authority to act on behalf of Landlord with respect to
matters pertaining to the planning, design and construction of the Tenant
Improvements. Either party may change its designated representative upon five
(5) days prior written notice to the other party.
4. Architect. The architectural firm of Ware & Malcomb
---------
("Architect") which is serving as the architect for the design and construction
of the Shell shall also act as the architect with respect to the design and
construction of the Tenant Improvements. Landlord shall retain such Architect
for the Tenant Improvement services by entering into a separate contract with
the Architect or an amendment to the contract for the design and construction of
the Shell (the "Architect Contract"). The parties acknowledge and agree that
the Architect Contract entered into with the Architect will obligate the
Architect to issue to both Landlord and Tenant an architect's certificate
("Architect's Certificate") upon Substantial Completion (as hereinafter defined)
of the Tenant Improvements certifying the Substantial Completion of the Tenant
Improvements in accordance with the Final Tenant Plans (as hereinafter defined).
For purposes of this Agreement, and notwithstanding Article 2.1 of the Lease,
"Substantial Completion" of the Tenant Improvements shall mean that (i) all
necessary governmental approval for occupancy of the Premises for Tenant's
intended use have been obtained (including a final "sign-off" and, if
applicable, a certificate of occupancy); (ii) Tenant has had the period
described in Section 15 of this Agreement for the purposes described therein;
(iii) all utilities are hooked up and available for use; (iv) the Architect has
certified that the Tenant Improvements have been constructed in accordance with
the Final Tenant Plans; (v) all incomplete or defective construction which
interferes with Tenant's use of the Premises has been remedied and repaired; and
(vi) Landlord has delivered possession of the Premises to Tenant.
5. Tenant Improvement Plans.
------------------------
(a) Final Tenant Plans. Within thirty (30) days after the full
------------------
execution and delivery of the Lease, Landlord shall cause to be prepared and
delivered to Tenant final plans, specifications and working drawings for the
Tenant Improvements (the "Final Tenant Plans"), all of which shall conform to
and represent logical evolutions of the Preliminary Plans. Included in the
Final Tenant Plans shall be the civil, architectural and structural plans for
the Tenant Improvements. Within ten (10) business days after receipt of the
Final Tenant Plans, Tenant shall have the right either to approve the Final
Tenant Plans or to deliver to Landlord the specific written changes to such
plans that are necessary, in Tenant's opinion, to conform such plans to the
Preliminary Plans or to reduce costs. If Tenant desires changes, Landlord shall
not unreasonably withhold its approval of such changes and the parties shall
confer and negotiate in good faith to reach agreement on modifications to the
Final Tenant Plans and the Work Cost Estimate described below as a consequence
of such change. To the extent that the process of
EXHIBIT B
Page 2
<PAGE>
approval of the Final Tenant Plans exceeds ten (10) business days after receipt
by Tenant of the Final Tenant Plans initially generated by Landlord as extended
by that number of days resulting from Landlord taking more than two (2) business
days to respond to Tenant's requests for revisions to the Final Tenant Plans and
as extended by that number of days of delay caused by Landlord's failure to
generate Final Tenant Plans which are logical evolutions of the Preliminary
Plans, such additional time period shall be deemed to be a Tenant Delay. After
the Final Tenant Plans have been mutually approved by Landlord and Tenant,
Architect shall submit the Final Tenant Plans to the appropriate governmental
agency for plan checking and the issuance of a building permit for the Tenant
Improvements.
(b) Work Cost Estimate. Within thirty (30) days after the full
------------------
execution and delivery of the Lease, Landlord shall submit to Tenant a written
estimate of the cost to complete the Tenant Improvements, which written estimate
will be based upon the Final Tenant Plans taking into account any modifications
which may be required to reflect changes in the Final Tenant Plans agreed to by
Landlord and Tenant (the "Work Cost Estimate"). Upon Tenant's approval of the
Work Cost Estimate (the "Work Cost Statement"), Landlord will have the right to
purchase materials and to commence the construction of the items included in the
Work Cost Statement. If the total costs reflected in the Work Cost Statement
exceed the Allowance (as defined in Section 8(a) below) and, to the extent
Tenant elects to take same, the Additional Allowance (as defined in Section 8(b)
below), Tenant shall pay such excess to Landlord in cash or by wire transfer of
funds, in three (3) equal installments as follows: (i) the first installment
shall be paid within five (5) days after Tenant's approval of the Work Cost
Statement; (ii) the second installment shall be paid within five (5) days after
notice from Landlord to Tenant that the Tenant Improvements are fifty percent
(50%) complete; and (iii) the third installment shall be paid within five (5)
days following Substantial Completion of the Tenant Improvements.
(c) No Representations Concerning Tenant Improvement Plans.
------------------------------------------------------
Notwithstanding anything to the contrary contained in the Lease or herein,
Landlord's participation in the preparation of the Final Tenant Plans and the
Work Cost Statement and the construction of the Tenant Improvements shall not
constitute any representation or warranty, express or implied, that the Tenant
Improvements, if built in accordance with the Final Tenant Plans, will be
suitable for Tenant's intended purpose. Tenant acknowledges and agrees that the
Tenant Improvements are intended for use by Tenant and the specifications and
design requirements for such Tenant Improvements are not within the special
knowledge or experience of Landlord. Landlord's sole obligation shall be to
arrange the construction of the Tenant Improvements in accordance with the
requirements of the Final Tenant Plans; and any additional costs or expense
required for the modification thereof to more adequately meet Tenant's use,
whether during or after Landlord's construction thereof, shall be borne entirely
by Tenant except as otherwise provided in this Work Letter. Notwithstanding the
foregoing, Landlord agrees to assign to Tenant the benefit of all construction
warranties pertaining to the Tenant Improvements (and, on a nonexclusive basis,
the Shell) to the extent that they do not relate to structural or other portions
of the Tenant Improvements that Landlord is required to maintain and repair
under the Lease.
EXHIBIT B
Page 3
<PAGE>
6. Change Orders. After the parties approve the Final Tenant Plans,
-------------
any changes to the Final Tenant Plans shall require the prior written approval
of Tenant and Landlord (not to be unreasonably withheld or delayed). In
particular, Tenant shall not unreasonably withhold or delay its consent to
changes proposed by Landlord which do not increase the TI Costs or delay
construction. Landlord shall not unreasonably withhold or delay its consent to
changes proposed by Tenant provided that Tenant agrees to pay the reasonable
increase (if any) in Landlord's TI Costs to make such changes. If Tenant
desires any change in the Final Tenant Plans relative to the Tenant
Improvements, such changes may only be requested by the delivery to Landlord by
Tenant of a proposed written "Change Order" specifically setting forth the
requested change. Landlord shall have five (5) business days from the receipt
of the proposed Change Order to provide Tenant with the Architect's disapproval
of the proposed change stating the reason(s) for such disapproval, or if the
Architect approves the proposed change, the following items: (i) a summary of
any increase in the cost caused by such change (the "Change Order Cost"), (ii) a
statement of the number of days of any delay caused by such proposed change (the
"Change Order Delay"), and (iii) a statement of the cost of the Change Order
Delay (the "Change Order Delay Expense"), which Change Order Delay Expense shall
be the product of the number of days of delay multiplied by the estimated daily
Base Rent rate. Tenant shall then have three (3) business days to approve the
Change Order Cost, the Change Order Delay and the Change Order Delay Expense.
If Tenant approves these items, Landlord shall promptly execute the Change Order
and cause the appropriate changes to the Final Tenant Plans to be made. If
Tenant fails to respond to Landlord within said three (3) business day period,
the Change Order Cost, the Change Order Delay and the Change Order Delay Expense
shall be deemed disapproved by Tenant and Landlord shall have no further
obligation to perform any Work set forth in the proposed Change Order. The
Change Order Cost shall include all costs associated with the Change Order,
including, without limitation, architectural fees, engineering fees and
construction costs, as reasonably determined by the Architect and the Contractor
(defined in Section 7), respectively. The Change Order Delay shall include all
delays caused by the Change Order, including, without limitation, all design and
construction delays, as reasonably determined by the Architect and the
Contractor, respectively.
7. Contractor. The contractor (the "Contractor") which shall
----------
construct the Tenant Improvements shall be selected and retained by Landlord,
subject to Tenant's reasonable approval. Landlord shall cause at least three
(3) licensed general contractors to bid for construction of the Tenant
Improvements. If Tenant so desires, Tenant may also select a licensed general
contractor, reasonably acceptable to Landlord, to bid the work. All bids shall
be opened simultaneously. Notwithstanding Tenant's right to approve the
Contractor, the Contractor shall be the contractor only of Landlord, and Tenant
shall have no liability to the Contractor under any construction contract or
otherwise with respect to the Tenant Improvements.
8. Payment for the Cost of the Tenant Improvements.
-----------------------------------------------
(a) Allowance. Landlord hereby grants to Tenant a tenant
---------
improvement allowance to assist Tenant to pay for the work described on the
Final Tenant Plans in the amount of Four Hundred Sixty-Two Thousand Two Hundred
Sixty-Six Dollars
EXHIBIT B
Page 4
<PAGE>
($462,266) which has been calculated on the basis of $10.00 per rentable square
foot of the Premises (the "Allowance"). The Allowance is to be used only for the
following costs ("TI Costs"):
(i) Payment of the cost of preparing the Final Tenant Plans,
including mechanical, electrical, plumbing and structural drawings and of all
other aspects necessary to complete the Final Tenant Plans.
(ii) The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements.
(iii) Construction of the Tenant Improvements as provided in the
Final Tenant Plans, including without limitation, the following:
(aa) Installation within the Premises of all partitioning,
doors, demising walls, floor coverings, ceilings, wall coverings and painting
and similar items;
(bb) All electrical wiring, lighting fixtures, outlets and
switches, and other electrical work necessary for the Premises;
(cc) The furnishing and installation of all HVAC units, duct
work, terminal boxes, diffusers and accessories necessary for the heating,
ventilation and air conditioning systems within the office portions of the
Premises;
(dd) Any additional improvements to the Premises required for
Tenant's use of the Premises including, but not limited to, odor control,
special heating, ventilation and air conditioning, noise or vibration control or
other special systems or improvements;
(ee) All fire and life safety control systems such as fire
walls, sprinklers, halon, fire alarms, including piping, wiring and accessories,
necessary for the Premises;
(ff) All plumbing, fixtures, pipes and accessories necessary
for the Premises;
(gg) Testing and inspection costs; and
(hh) Reasonable fees for the Contractor including, but not
limited to, fees and costs attributable to general conditions associated with
the construction of the Tenant Improvements.
(iv) An administrative and coordination fee charged by Landlord
against the Allowance equal to five percent (5%) of the "hard" TI Costs
(exclusive of the costs of paint, wall covering or floor covering), including,
without limitation, Change Orders.
EXHIBIT B
Page 5
<PAGE>
In no event will the Allowance be used to pay for Tenant's moving expenses or
for furniture, artifacts, equipment, telephone systems or any other item of
personal property which is not affixed to the Premises. In no event shall TI
Costs include or shall Landlord apply any of the Allowance or the Additional
Allowance toward (i) any of the foregoing costs to the extent applicable to, or
based on the value of, the Shell; (ii) charges and expenses for changes to the
Final Tenant Plans which have not been approved by Tenant; (iii) wages, labor
and overhead for overtime and premium time; (iv) principal, interest and fees
for construction and permanent financing; (v) off-site management or other
general overhead costs incurred by Landlord; (vi) bond premiums; (vii) costs for
which Landlord has a right of reimbursement from others (including, without
limitation, insurers and warrantors); (viii) the cost to bring the Building and
the Premises into compliance with Applicable Laws; (ix) restoration costs in
excess of insurance proceeds as a consequence of casualties; (x) penalties and
late charges attributable to Landlord's failure to pay other TI Costs; (xi)
attorneys', experts' and other fees and costs in connection with contracts and
disputes; (xii) costs attributable to improvements made outside the demising
walls of the Premises; and (xiii) costs incurred as a consequence of delay
(other than Tenant Delays), construction defects, or default by a contractor or
subcontractor.
(b) Costs in Excess of Allowance. The costs referenced in Section 8(a)
----------------------------
above shall be charged against the Allowance. If the TI Costs exceed the
Allowance, such costs shall be paid for by Tenant in accordance with Paragraph
5(b) above. Notwithstanding anything to the contrary set forth in this Work
Letter, if the TI Costs reflected in the Work Cost Statement exceed the
Allowance, to assist Tenant to pay for the cost of the Tenant Improvements which
exceed the Allowance, Landlord shall make available to Tenant, at Tenant's sole
option, an "Additional Allowance" in the amount of up to, but not exceeding, Two
Hundred Thirty-One Thousand One Hundred Thirty-Three Dollars ($231,133) which
has been calculated on the basis of Five Dollars ($5.00) per rentable square
foot of the Premises to help Tenant pay for such excess costs. Tenant shall
notify Landlord of Tenant's election to receive the Additional Allowance prior
to Landlord's commencement of construction of the Tenant Improvements. If
Tenant elects to receive all or any portion of the Additional Allowance, then
Tenant shall, during the initial Term of the Lease, pay to Landlord the
"Amortization Rent", which shall be that amount which will fully amortize, over
the sixty (60) months of the Term of the Lease (commencing as of the
Commencement Date), together with interest at the rate of ten percent (10%) per
annum, the portion of the Additional Allowance utilized by Tenant to pay for the
TI Costs which exceeds the Allowance. Each such monthly payment of the
Amortization Rent shall be paid by Tenant to Landlord, at Landlord's Address for
Payment of Rent designated in the Basic Lease Information or such other place as
Landlord may from time to time designate in writing, in lawful money of the
United States of America, without notice or demand, on the first day of each
month during the Term of the Lease. In addition, notwithstanding any of the
provisions of the Lease to the contrary, including Articles 13 and 14 of the
Lease, in no event shall the Amortization Rent be abated or offset for any
reason whatsoever; provided, however, that Landlord shall offset and credit
against Amortization Rent all insurance proceeds and condemnation awards
recoverable by Landlord to the extent reasonably allocable to the Tenant
Improvements.
EXHIBIT B
Page 6
<PAGE>
(c) Unused Allowance Amounts. Any unused portion of the Allowance
------------------------
upon completion of the Tenant Improvements will not be refunded to Tenant or
monies to which Tenant is entitled, but shall be available for Change Order
Costs.
(d) When the Premises are Substantially Completed, Landlord shall
submit to Tenant a final and detailed accounting of all TI Costs paid by
Landlord, certified to be true and correct by Landlord's financial officers.
Tenant may audit the books, records and supporting documents of Landlord and the
general contractor, at the respective offices of Landlord and the general
contractor, to the extent necessary to determine the accuracy of such accounting
during normal business hours after giving Landlord at least twenty-four (24)
hours written notice. Tenant shall retain for the purpose of such audit a
nationally or regionally recognized certified public accounting firm. Tenant
shall bear the cost of such audit, unless such audit discloses that Landlord has
overstated the total costs by more than four percent (4%) of the actual amount
of such costs, in which event Landlord shall pay the cost of Tenant's audit.
Landlord shall promptly refund any overpayments to Tenant, and Tenant shall
promptly pay to Landlord any underpayments by Tenant, all as revealed by such
audit.
9. Substantial Completion; Target Completion Date. The parties
----------------------------------------------
estimate that Substantial Completion will be achieved on or before August 1,
1999 (the "Target Completion Date"). Landlord agrees to use its commercially
reasonable efforts to cause the Tenant Improvements to be substantially
completed on or before the Target Completion Date.
10. Tenant Delays; Force Majeure Delays. As used herein, "Tenant
-----------------------------------
Delays" means any actual delay, calculated on a "net critical path" basis, in
the completion of the Tenant Improvements resulting from any or all of the
following: (1) Tenant's failure to timely perform any of its obligations
pursuant to this Work Letter, including any failure to complete, on or before
the due date therefor, any action item which is Tenant's responsibility pursuant
to this Work Letter, including Tenant's failure to grant approvals within the
time frames described herein; (2) Tenant-initiated Change Orders; (3) Tenant's
request for materials, finishes, or installations which are not readily
available, so long (a) as such fact was disclosed to Tenant by Landlord at the
time of approval of the Final Tenant Plans, (b) Landlord at such time proposed
the substitution of alternate materials, finishes or installations which in
Landlord's reasonable judgment would be substantially equivalent to Tenant's
requested materials, finishes or installations and would minimize the delay of
the substantial completion of the Tenant Improvements, and (c) Tenant
nonetheless continued to request the same (provided that such Tenant Delay shall
be limited to the number of days projected by Landlord at the time of such
approval to be required to receive the delivery and installation of such
requested materials, finishes or installations in excess of the number of days
which would have been required to receive delivery and installation of the
alternate materials, finishes or installations recommended by Landlord), (4) any
delay in any way whatsoever arising from Tenant's right to conduct "Inspections"
under Section 11 below, (5) Change Order Delays, or (6) any other act or failure
to act by Tenant, Tenant's Representative, Tenant's employees, agents,
independent contractors, consultants and/or any other person performing or
required to perform services on behalf of Tenant, including interference with
Landlord, or its contractors, during Tenant's early entry under
EXHIBIT B
Page 7
<PAGE>
Section 2.3 of the Lease; provided, however that (A) Tenant Delays shall only
exist under clause (6) of this Paragraph 10 if Landlord notifies Tenant of such
event of delay and provides Tenant with one business day to elect to take
remedial action in order to eliminate or mitigate such event of delay. Landlord
shall, and shall cause the Architect and the Contractor to, use reasonable
efforts to minimize the effect of any Tenant Delays, and (B) Tenant Delays shall
only include the period of time that Substantial Completion is actually delayed
solely as a result of the actions or inactions described in clauses (1) through
(6) above. "Force Majeure Delays" as used herein means delays resulting from
causes beyond the reasonable control of Landlord or the Contractor, including,
without limitation, any delay caused by any action, inaction, order, ruling,
moratorium, regulation, statute, condition or other decision of governmental
agency having jurisdiction over any portion of the project, over the
construction of the Tenant Improvements or over any uses thereof, or by delays
in inspections or in issuing approvals or permits by governmental agencies, or
by fire, flood, strikes, lockouts or other labor or industrial disturbance
(whether or not on the part of agents or employees of either party hereto
engaged in the construction of the Tenant Improvements, but specifically
excluding disputes between Landlord and any contractor, subcontractor, supplier
or vendor in connection with the Tenant Improvements), civil disturbance, order
of any government, court or regulatory body claiming jurisdiction or otherwise,
act of public enemy, war, riot, sabotage, blockage, embargo, failure or
inability to secure materials, supplies or labor through ordinary sources by
reason of shortages or priority, earthquake, or other natural disaster, delays
caused by any dispute resolution process, or any cause whatsoever beyond the
reasonable control (excluding financial inability) of the party whose
performance is required, or any of its contractors or other representatives,
whether or not similar to any of the causes hereinabove stated.
11. Tenant's Inspection Rights. Landlord shall schedule and attend
--------------------------
weekly progress meetings, walk-throughs and any other meetings with the
Architect, the Contractor and Tenant to discuss the progress of the construction
of the Tenant Improvements ("Meetings"). Landlord shall give Tenant at least
twenty-four (24) hours prior notice (written or telephonic) of all such
Meetings. Tenant shall designate in writing the person or persons appointed by
Tenant to attend the Meetings and such designated party shall be entitled to be
present at and to participate in the discussions during all Meetings; but
Landlord may conduct the Meetings even if Tenant's appointees are not present.
In addition to the foregoing and to Tenant's early entry rights as provided in
Section 2.2 of the Lease, Tenant or its agents shall have the right at any and
all reasonable times to conduct inspections, tests, surveys and reports of work
in progress ("Inspections") for the purpose of reviewing whether the Tenant
Improvements are being constructed in accordance with the Final Tenant Plans, as
amended by any approved Change Orders or other agreed upon changes.
12. Walk-Through and Punch List. Upon Substantial Completion of the
---------------------------
Tenant Improvements, Tenant, Landlord and the Architect shall jointly conduct a
walk-through of the Tenant Improvements and shall jointly prepare a punch list
("Punch List") of items needing additional work ("Punch List Items"); provided,
however, the Punch List shall be limited to items which are required by the
Construction Contract, the Final Tenant Plans, Change Orders and any other
changes agreed to by the parties. Landlord shall diligently prosecute to
completion
EXHIBIT B
Page 8
<PAGE>
all Punch List Items at Landlord's sole cost within thirty (30) days after
Substantial Completion of the Tenant Improvements.
13. Miscellaneous Construction Covenants.
------------------------------------
(a) Coordination with Lease. Nothing herein contained shall be
-----------------------
construed as (i) constituting Tenant as Landlord's agent for any purpose
whatsoever, or (ii) a waiver by Landlord or Tenant of any of the terms or
provisions of the Lease. Any default by either party with respect to any
portion of this Work Letter shall be deemed a breach of the Lease for which
Landlord and Tenant shall have all the rights and remedies as in the case of a
breach of the Lease by the other party.
(b) Cooperation. Landlord and Tenant agree to cooperate with
-----------
one another and to cause their respective employees, agents and contractors to
cooperate with one another to avoid unnecessary interference and delays with the
completion of the Work.
14. No Representations. Subject to the provisions of Article 1.1 of
------------------
the Lease, and, other than as specifically set forth in this Section 14,
Landlord does not warrant that the Building or any component thereof will be
free of latent defects or that it will not require maintenance and/or repair
within any particular period of time, except as expressly provided herein.
Tenant acknowledges and agrees that it shall rely solely on the warranty or
guaranty, if any, from Landlord's Contractor, Tenant's Architect or other
material and/or service providers relative to the proper design and construction
of the Tenant Improvements, the Shell or any component thereof and, to the
extent that they do not relate to structural or other portions of the Tenant
Improvements that Landlord is required to maintain and repair under the Lease,
Landlord agrees to assign to Tenant, on a nonexclusive basis, the benefit of any
such warranties or guaranties. Notwithstanding the foregoing, effective upon
delivery of possession of the Premises to Tenant, and, for a period of one year
following the Commencement Date, Landlord warrants (i) that the Shell and the
Tenant Improvements were constructed in a good and workmanlike manner in
compliance with all Applicable Laws and the Final Tenant Plans, and (ii) that
all material and equipment installed in or otherwise serving the Premises was
new and of good quality and was installed in accordance with all vendors' and
manufacturers' specifications, instructions and requirements. As Tenant's sole
remedy for any violations of the foregoing warranty, Landlord shall promptly
undertake the required repairs at Landlord's sole cost and expense.
15. Tenant's Entry Into the Premises Prior to Substantial Completion.
----------------------------------------------------------------
Subject to the provisions of Section 2.2 of the Lease, and provided that Tenant
and its agents do not interfere with, or delay, Contractor's work in the
Building and the Premises, Contractor shall allow Tenant access to the Premises
thirty (30) days prior to the Target Completion Date to permit Tenant to set up
operations and install ESD flooring. In addition, provided that Tenant and its
agents do not interfere with, or delay, Contractor's work in the Building and
the Premises, Contractor shall allow Tenant access to the Premises fourteen (14)
days prior to the Target Completion Date for the purpose of Tenant installing
equipment or fixtures (including Tenant's data and telephone equipment) in the
Premises. Prior to Tenant's entry into the Premises as
EXHIBIT B
Page 9
<PAGE>
permitted by the terms of this Section 15, Tenant shall submit a schedule to
Landlord and Contractor, for their approval, which schedule shall detail the
timing and purpose of Tenant's entry. Tenant shall hold Landlord harmless from
and indemnify, protect and defend Landlord against any physical loss or damage
to the Building or Premises and against injury to any persons caused by Tenant's
actions pursuant to this Section 15.
IN WITNESS WHEREOF, this Work Letter is executed as of the date first
written above.
"Landlord" "Tenant"
CATELLUS DEVELOPMENT GODIGITAL TELECOMMUNICATIONS,
CORPORATION, INC., a California corporation
a Delaware corporation
By: /s/ Don D. Little By: /s/ Frank I. Akers
Name: Don D. Little Name: Frank I. Akers
Its: Senior Vice President, Title: President & CEO
Northwest Industrial Development
By: /s/ T. Olin Nichols
Name: T. Olin Nichols
Date: 6/1/99 Title: CFO
EXHIBIT B
Page 10
<PAGE>
EXHIBIT C
---------
COMMENCEMENT DATE MEMORANDUM
With respect to that certain lease ("Lease") dated ____________, 19__,
between _________________________, a _____________________ ("Tenant"), and
Catellus Development Corporation, a Delaware corporation ("Landlord"), whereby
Landlord leased to Tenant and Tenant leased from Landlord approximately _______
rentable square feet of the building located at __________________________
("Premises"), Tenant hereby acknowledges and certifies to Landlord as follows:
(1) Landlord delivered possession of the Premises to Tenant
Substantially Complete on _____________________ ("Possession Date");
(2) The Lease commenced on _______________________ ("Commencement
Date");
(3) The Premises contain _________ square feet of space; and
(4) Tenant has accepted and is currently in possession of the
Premises.
IN WITNESS WHEREOF, this Commencement Date Memorandum is executed this
___ day of ______________________.
"Tenant"
___________________________________________
a__________________________________________
By:________________________________________
Its:____________________________________
By:________________________________________
Its:____________________________________
EXHIBIT C
Page 1
<PAGE>
EXHIBIT D
---------
PROHIBITED USES
The following types of operations and activities are expressly
prohibited on the Premises:
1. automobile/truck maintenance, repair or fueling;
2. battery manufacturing or reclamation;
3. ceramics and jewelry manufacturing or finishing;
4. chemical (organic or inorganic) storage, use or manufacturing;
5. drum recycling;
6. dry cleaning;
7. electronic components manufacturing;
8. electroplating and metal finishing;
9. explosives manufacturing, use or storage;
10. hazardous waste treatment, storage, or disposal;
11. leather production, tanning or finishing;
12. machinery and tool manufacturing;
13. medical equipment manufacturing and hospitals;
14. metal shredding, recycling or reclamation;
15. metal smelting and refining;
16. mining;
17. paint, pigment and coating operations;
18. petroleum refining;
19. plastic and synthetic materials manufacturing;
20. solvent reclamation;
21. tire and rubber manufacturing;
EXHIBIT D
Page 1
<PAGE>
22. above- and/or underground storage tanks; and
23. residential use or occupancy.
EXHIBIT D
Page 2
<PAGE>
EXHIBIT E
---------
RULES AND REGULATIONS
1. No automobile, recreational vehicle or any other type of vehicle or
equipment shall remain upon the Common Area longer than 24 hours and no
vehicle or equipment of any kind shall be dismantled or repaired or
serviced on the Common Area. All vehicle parking shall be restricted to
areas designated and marked for vehicle parking. The foregoing
restrictions shall not be deemed to prevent temporary parking for loading
or unloading of vehicles in designated areas.
2. Signs will conform to sign standards and criteria established from time to
time by Landlord. No other signs, placards, pictures, advertisements,
names or notices shall be inscribed, displayed or printed or affixed on or
to any part of the outside or inside of the building without the written
consent of Landlord and Landlord shall have the right to remove any such
non-conforming signs, placards, pictures, advertisements, names or notices
without notice to and at the expense of Tenant.
3. No antenna, aerial, discs, dishes or other such device shall be erected on
the roof or exterior walls of the Premises, or on the grounds, without the
written consent of the Landlord in each instance. Any device so installed
without such written consent shall be subject to removal without notice at
any time.
4. No loud speakers, televisions, phonographs, radios or other devices shall
be used in a manner so as to be heard or seen outside of the Premises
without the prior written consent of the Landlord.
5. The outside areas immediately adjoining the Premises shall be kept clean
and free from dirt and rubbish by the Tenant to the satisfaction of
Landlord and Tenant shall not place or permit any obstruction or materials
in such areas or permit any work to be performed outside the Premises.
6. No open storage shall be permitted in the Project.
7. All garbage and refuse shall be placed in containers placed at the location
designated for refuse collection, in the manner specified by Landlord.
8. No vending machine or machines of any description shall be installed,
maintained or operated upon the Common Area.
9. Tenant shall not disturb, solicit, or canvass any occupant of the building
and shall cooperate to prevent same.
10. No noxious or offensive trade or activity shall be carried on upon any
units or any part of the Common Area nor shall anything be done thereon
which would in any way interfere with the quiet enjoyment of each of the
other tenants of the Project or which would
EXHIBIT E
Page 1
<PAGE>
increase the rate of insurance or overburden utility facilities from time
to time existing in the Project.
11. Landlord reserves the right to make such amendments to these rules and
regulations from time to time as are nondiscriminatory and not inconsistent
with the Lease.
EXHIBIT E
Page 2
<PAGE>
EXHIBIT F
---------
REQUIREMENTS FOR IMPROVEMENTS OR ALTERATIONS BY TENANT
If Landlord shall permit Tenant to construct any initial tenant
improvements in the Premises or to have any work performed in the Premises at
any time prior to or during the Lease term by a contractor retained by Tenant
("Tenant's Work"), then Tenant shall comply with the requirements set forth
herein. If Tenant's Work has been properly authorized, Tenant will receive
written approval and consent for alterations to the Premises.
1. SUBMITTAL OF PLANS. Prior to commencing any work in the Premises,
Tenant shall submit to Landlord for approval its proposed plans for the work.
Without limiting the foregoing, Tenant shall provide:
(a) A separate scale drawing denoting all proposed construction and/or
demolition, if necessary.
(b) A separate drawing for each trade proposing structural,
electrical, mechanical, civil or landscaping modifications.
(c) Specify all dimensions and complete references to all work to be
performed in the affected areas.
(d) If adding extra electrical or mechanical equipment, provide
complete operating and maintenance specifications for each item.
2. CHECKLIST. With respect to each project, Landlord will provide Tenant
with a checklist listing the items required to be furnished to Landlord in
connection with the proposed work. Tenant shall furnish to Landlord prior to,
during, or upon completion of Tenant's Work, as applicable, each of the items
specified in the checklist attached hereto as Attachment 1.
3. CONTRACTORS PROVIDING TENANT IMPROVEMENT SERVICES.
(a) The contractor employed by Tenant and any subcontractors shall be
(i) duly licensed in the state in which the Premises are located, and (ii)
subject to Landlord's prior written approval, which approval shall not be
unreasonably withheld. If more than one trade is employed on a single job,
state law requires the services of a general contractor in addition to
contractors for specialty work being performed.
(b) Each contractor shall provide proof of licensing as a general or
specialty contractor in accordance with state law. Additionally, each
contractor shall furnish proof of licensing in the city or municipality in which
the construction related activity is to take place.
EXHIBIT F
Page 1
<PAGE>
(c) Tenant and Tenant's contractors shall comply with all Applicable
Laws pertaining to the performance of Tenant's Work and the completed
improvements and all applicable safety regulations established by Landlord or
the general contractor.
(d) Prior to commencement of any work in the Premises, Tenant and
Tenant's contractors (and any subcontractors) shall obtain and provide Landlord
with certificates evidencing Workers' Compensation, public liability and
property damage insurance in amounts and forms and with companies reasonably
satisfactory to Landlord. Each general contractor (and any subcontractor)
employed on the Premises shall provide Landlord with a current certificate of
insurance in effect for that contractor with a thirty day notice of cancellation
or revocation clause. Insurance requirements are as follows:
(i) Comprehensive General Liability with a $2,000,000 Combined
Single Limit covering the liability of Landlord and contractor for bodily injury
and property damage arising as a result of the construction of the improvements
and the services performed thereunder. Landlord shall be named as an additional
insured.
(ii) Comprehensive Automobile Liability with a $2,000,000
Combined Single Limit covering Landlord and vehicles used by contractor (and any
subcontractor) in connection with the construction of the improvements.
(iii) Workers' Compensation and Employer's Liability as required
by law, for employees of the contractor (and any subcontractors) performing work
on the Premises.
(e) The following requirements shall be incorporated as "Special
Conditions" into the contract between Tenant and its contractors and a copy of
the contract shall be furnished to Landlord prior to the commencement of
Tenant's Work:
(i) Prior to start of Tenant's Work, Tenant's contractor shall
provide Landlord with a construction schedule in "bar graph" form indicating the
completion dates of all phases of Tenant's Work.
(ii) Tenant's contractor shall be responsible for the repair,
replacement or clean-up of any damage done by it to other contractors' work
which specifically includes accessways to the Premises which may be concurrently
used by others.
(iii) Tenant's contractor shall accept the Premises prior to
starting any trenching operations. Any rework of sub-base or compaction
required after the contractor's initial acceptance of the Premises shall be done
by Tenant's contractor, which shall include the removal from the Project of any
excess dirt or debris.
(iv) Tenant's contractor shall contain its storage of materials
and its operations within the Premises and such other space as it may be
assigned by Landlord or Landlord's contractor. Should Tenant's contractor be
assigned space outside the Premises, it shall
EXHIBIT F
Page 2
<PAGE>
move to such other space as Landlord or Landlord's contractor shall direct from
time to time to avoid interference or delays with other work.
(v) Tenant's contractor shall clean up the construction area and
surrounding exterior areas daily. All trash, demolition materials and surplus
construction materials shall be stored within the Premises and promptly removed
from the Premises and the Project and disposed of in an approved sanitation
site.
(vi) Tenant's contractor shall provide temporary utilities, portable
toilet facilities, and potable drinking water as required for its work within
the Premises and shall pay to Landlord's contractor the cost of any temporary
utilities and facilities provided by Landlord's contractor at Tenant's
contractor's request.
(vii) Tenant's contractor shall notify Landlord or Landlord's
project manager of any planned work to be done on weekends or other than normal
job hours.
(viii) Tenant's contractor or subcontractors shall not post signs on
any part of the Project or on the Premises.
4. COSTS.
(a) Tenant shall promptly pay any and all costs and expenses in
connection with or arising out of the performance of Tenant's Work (including
the costs of permits therefor) and shall furnish to Landlord evidence of such
payment upon request.
(b) Tenant shall pay Landlord an amount equal to three percent (3%)
of the total hard costs of construction and installation of Tenant's Work
(excluding the cost of paint, wall coverings and floor coverings) as
compensation to Landlord for review of plans, use of facilities and other
miscellaneous costs of Landlord incurred as a result of such work.
5. CONTRACTOR'S BONDS. Prior to the commencement of construction, if the
estimated cost of such Tenant's Work exceeds $50,000, Tenant shall obtain or
cause its contractor to obtain and deliver evidence thereof to Landlord payment
and performance bonds covering the faithful performance of the contract for the
construction of the Tenant's Work and the payment of all obligations arising
thereunder. In the alternative, and at Tenant's option, Tenant may appoint
Landlord as its contractor, and in so doing, Tenant shall deposit with the
Landlord a sum of money equal to the entire amount of the estimated construction
cost, as is required for the installation of the Tenant improvements on the
Premises. If Tenant deposits with Landlord monies for construction costs, it is
agreed that Landlord will not be placed in a fiduciary capacity as a trustee, or
any other fiduciary title, for the sums of monies in Landlord's possession.
Tenant agrees to hold Landlord harmless from any and all claims, for workmanship
and installation of improvements, and for merchantability and quality of goods
used for the installation of Tenant's improvements, as are requested by Tenant;
provided, however, that the foregoing shall not apply if Landlord acts as
Tenant's contractor for such Tenant's Work. Any
EXHIBIT F
Page 3
<PAGE>
bonds obtained pursuant hereto shall be for the mutual benefit of both Landlord
and Tenant as obligees and beneficiaries.
6. MECHANIC'S LIENS.
(a) Tenant shall not suffer or permit to be enforced against the
Premises or any part of the Project any mechanic's, materialman's, contractor's
or subcontractor's lien arising out of any work of improvement, however it may
arise.
(b) Tenant shall notify Landlord at least ten (10) days prior to the
commencement of construction of any Tenant's Work and Landlord shall have the
right to post and record a notice of nonresponsibility in conformity with
applicable law. Within ten (10) days following completion of Tenant's Work,
Tenant shall file a Notice of Completion and deliver to Landlord an
unconditional release and waiver of lien executed by each contractor,
subcontractor and materialman involved in Tenant's Work.
(c) In the event any lien is filed against the Project or any portion
thereof or against Tenant's leasehold interest therein, Tenant shall obtain the
release and/or discharge of said lien, within ten (10) days after the filing
thereof. In the event Tenant fails to do so, Landlord may obtain the release
and/or discharge of said lien and Tenant shall indemnify Landlord for the costs
thereof, including reasonable attorney's fees, together with interest at the
Applicable Interest Rate from the date of demand. Nothing herein shall prohibit
Tenant from contesting the validity of any such asserted claim, provided Tenant
has furnished to Landlord a lien release bond freeing the Premises from the
effect of the lien claim.
7. INDEMNITY. Tenant shall indemnify, defend (with counsel satisfactory
to Landlord) and hold Landlord harmless from and against any and all suits,
claims, actions, loss, cost or expense (including claims for workers'
compensation, attorney's fees and costs) based on personal injury or property
damage, or otherwise (including, without limitation, contract and breach of
warranty claims) arising from the performance of Tenant's Work; provided,
however, that the foregoing shall not apply if Landlord acts as Tenant's
contractor for such Tenant's Work. Tenant shall repair or replace (or, at
Landlord's election, reimburse Landlord for the cost of repairing or replacing)
any portion of the Building or item of Landlord's equipment or any of Landlord's
real or personal property damaged, lost or destroyed in the performance of
Tenant's Work.
8. BUILDING STANDARDS. All work shall conform to Landlord's established
building standards and specifications. Tenant is required to make these
standards part of the construction documents.
9. ROOF PENETRATIONS. If improvements penetrate the roof membrane, the
penetrations will be sealed per Landlord/IRC roofing specifications and
inspected by IRC to maintain roof warranty. The cost of inspection and all
corrective work shall be borne by Tenant. Tenant shall use Landlord's original
roofing contractor.
EXHIBIT F
Page 4
<PAGE>
10. BUILDING MODIFICATIONS. Work will only be approved within the
confines of a given space. Tenant will not be allowed to modify building
exterior or mechanical and electrical service as provided to the building in
common with other tenants.
11. ELECTRICAL WORK. All electrical work shall be approved from the unit
space electrical panel only. Additional service requirements shall be secured
only by direction of Landlord. Tenant shall use Landlord's original electrical
contractor.
12. SCHEDULE OF WORK. Tenant may be required to provide a schedule of all
work to be performed, subject to Landlord approval. All costs to produce such
schedule shall be borne solely by Tenant.
13. CLEAN UP AND DISPOSAL OF CONSTRUCTION DEBRIS. Building trash
containers are provided for office generated trash only and are not to be used
for disposal of construction-related materials and debris. Unapproved usage
will result in a penalty assessment to the Tenant equal to the cost of an extra
pick-up service as provided under the current rate schedule of regular trash
removal service.
14. INSPECTION BY LANDLORD. Landlord reserves the following rights: (i)
the right of inspection prior to, during and at completion of all construction
and/or demolition, (ii) the right to post and record a notice of
nonresponsibility in conformity with California law, and (iii) the right to
order a total stop to all improvements underway for non-compliance with any of
the requirements hereof.
15. GENERAL PROVISIONS.
(a) All materials, work, installations and decorations of any nature
whatsoever brought on or installed in the Premises before the commencement of
the Term or throughout the Term shall be at Tenant's risk, and neither Landlord
nor any party acting on Landlord's behalf shall be responsible for any damage
thereto or loss or destruction thereof due to any reason or cause whatsoever.
(b) Nothing contained herein shall make or constitute Tenant as the
agent of Landlord.
(c) In the event of any conflict between this Exhibit F and the Work
Letter attached to the Lease as Exhibit B, the terms and conditions of the Work
Letter shall control.
EXHIBIT F
Page 5
<PAGE>
ATTACHMENT 1 TO EXHIBIT F
-------------------------
ITEMS TO BE FURNISHED TO LANDLORD FOR EACH WORK OF IMPROVEMENT
1. Plan of Alterations for Landlord Approval.
2. Contractor(s), Address, Telephone Number, Contact Person.
3. Copy of Contractor's State and City Business License.
4. Copy of Building Permit.
5. Copy of Final Inspection and Signed Building Permit Cards.
6. Copy of Certificate of Insurance Naming Catellus Development Corporation as
Additional Insured. Insurance to include Comprehensive General Liability,
Comprehensive Auto, Workers' Compensation and Employer's Liability.
7. Signed Unconditional Lien Waiver in favor of Catellus Development
Corporation.
8. Schedule of Work.
9. Copy of Completion and Payment Bond.
10. Architect's License and Expiration.
11. Tenant and Architect Agreement.
12. Tenant and Contractor Agreement.
13. Copy of Permit Plans.
14. Copy of As-Builts.
15. Copy of Recorded Notice of Completion.
16. Certificate of Occupancy.
17. Evidence of Insurance for All-Risk/Builder's Risk Insurance to the Amount
of Improvements.
ATTACHMENT 1 TO EXHIBIT F
Page 1
<PAGE>
EXHIBIT G
---------
TENANT ESTOPPEL CERTIFICATE
To: [Insert name of party to rely on document] ("Relying Party")
_______________________
_______________________
_______________________
Attn:__________________
Re: Lease Dated: _______________________
Current Landlord: _______________________
Current Tenant: _______________________
Square Feet: Approximately__________
Floor(s): _______________________
Located at: _______________________
________________ ("Tenant") hereby certifies that as of __________,
199__:
1. Tenant is the present owner and holder of the tenant's interest
under the lease described above, as it may be amended to date (the "Lease") with
_______________ as Landlord (who is called "Landlord" for the purposes of this
Certificate). (USE THE NEXT SENTENCE IF THE LANDLORD OR TENANT NAMED IN THE
------------------------------------------------------------
LEASE IS A PREDECESSOR TO THE CURRENT LANDLORD OR TENANT.) [The original
- --------------------------------------------------------
landlord under the Lease was _______________, and the original tenant under the
Lease was _______________.] The Lease covers the premises commonly known as
_______________ (the "Premises") in the building (the "Building") at the address
set forth above.
(CHOOSE ONE OF THE FOLLOWING SECTION 2(a)s BELOW)
-----------------------------------------------
[2. (a) A true, correct and complete copy of the Lease (including
all modifications, amendments, supplements, side letters, addenda and riders of
and to it) is attached to this Certificate as Exhibit A.]
[2. (a) The attached Exhibit A accurately identifies the Lease and
---------
all modifications, amendments, supplements, side letters and riders of and to
it.]
(b) (IF APPLICABLE) [The Lease provides that in addition to the
-------------
Premises, Tenant has the right to use or rent __________ [assigned/unassigned]
parking spaces near the Building or in the garage portion of the building during
the term of the Lease.]
(c) The term of the Lease commenced on __________, 199__ and
will expire on ____________, _____, including any presently exercised option or
renewal term.
<PAGE>
(CHOOSE ONE OF THE FOLLOWING TWO SENTENCES.) [Tenant has no option or right to
-----------------------------------------
renew, extend or cancel the Lease, or to lease additional space in the Premises
or Building, or to use any parking (IF APPLICABLE) [other than that specified
-------------
in Section 2(b) above].] [Except as specified in Article(s) __________ of the
Lease (copy attached), Tenant has no option or right to renew, extend or cancel
the Lease, or to lease additional space in the Premises or Building, or to use
any parking (IF APPLICABLE) [other than that specified in Section 2(b) above].]
-------------
(CHOOSE ONE OF THE FOLLOWING SECTION 2(d)s)
[(d) Tenant has no option or preferential right to purchase all or any
part of the Premises (or the land of which the Premises are a part). Tenant has
no right or interest with respect to the Premises or the Building other than as
Tenant under the Lease.]
[(d) Except as specified in Article(s) __________ of the Lease (copy
attached), Tenant has no option or preferential right to purchase all or any
part of the Premises (or the land of which the Premises are a part). Except for
the foregoing, Tenant has no right or interest with respect to the Premises or
the Building other than as Tenant under the Lease.]
(e) The annual minimum rent currently payable under the Lease is
$__________ and such rent has been paid through __________, 199__. (IF
--
APPLICABLE) [The annual percentage rent currently payable under the Lease is at
- ----------
the rate of __________ and such rent has been paid through ___________, 199__.]
(f) (IF APPLICABLE) [Additional rent is payable under the Lease for
-------------
(i) operating, maintenance or repair expenses, or (ii) property taxes. Such
additional rent has been paid in accordance with Landlord's rendered bills
through __________, 199__. The base year amounts for additional rental items
are as follows: (1) operating, maintenance or repair expenses $__________, and
(2) property taxes $__________.]
(g) Tenant has made no agreement with Landlord or any agent,
representative or employee of Landlord concerning free rent, partial rent,
rebate of rental payments or any other similar rent concession (IF APPLICABLE)
-------------
[except as expressly set forth in Article(s) ______ of the Lease (copy
attached)].
(h) Landlord currently holds a security deposit in the amount of
$__________ and a letter of credit in the amount of $__________ which is to be
applied by Landlord or returned to Tenant in accordance with Article(s) _____ of
the Lease. Tenant acknowledges and agrees that Relying Party shall have no
responsibility or liability for any security deposit, except to the extent that
any security deposit shall have been actually received by Relying Party.
3. (a) The Lease constitutes the entire agreement between Tenant
and Landlord with respect to the Premises, has not been modified changed,
altered or amended and is
EXHIBIT G
Page 2
<PAGE>
in full force and effect in the form (CHOOSE ONE) [attached as/described in]
----------
Exhibit A. There are no other agreements, written or oral, which affect Tenant's
occupancy of the Premises.
(b) All insurance required of Tenant under the Lease has been
provided by Tenant and all premiums have been paid.
(c) To the best knowledge of Tenant, no party is in default under
the Lease. To the current actual knowledge of Tenant, no event has occurred
which, with the giving of notice or passage of time, or both, would constitute
such a default.
(d) To Tenant's current actual knowledge, the interest of Tenant
in the Lease has not been assigned or encumbered. To Tenant's current actual
knowledge, Tenant is not entitled to any credit against any rent or other charge
or rent concession under the Lease except as set forth in the Lease. No rental
payments have been made more than one month in advance.
4. To Tenant's current actual knowledge, all contributions required
to be paid by Landlord to date for improvements to the Premises have been paid
in full and all of Landlord's obligations with respect to tenant improvements
have been fully performed. Tenant has accepted the Premises, subject to no
conditions other than those set forth in the Lease.
5. To Tenant's current actual knowledge, Tenant is not the subject
of any bankruptcy or other voluntary or involuntary proceeding, in or out of
court, for the adjustment of debtor-creditor relationships.
6. (a) As used here, "Hazardous Substance" means any substance,
material or waste (including petroleum and petroleum products) which is
designated, classified or regulated as being "toxic" or "hazardous" or a
"pollutant" or which is similarly designated, classified or regulated, under any
federal, state or local law, regulation or ordinance.
(b) Tenant represents and warrants that it has not used,
generated, released, discharged, stored or disposed of any Hazardous Substances
on, under, in or about the Building or the land on which the Building is located
(IF APPLICABLE) [, other than Hazardous Substances used in the ordinary and
-------------
commercially reasonable course of Tenant's business in compliance with all
applicable laws]. (IF APPLICABLE) [Except for such commercially reasonable use
-------------
by Tenant,] Tenant has no actual knowledge that any Hazardous Substance is
present, or has been used, generated, released, discharged, stored or disposed
of by any party, on, under, in or about the Premises.
7. Tenant hereby acknowledges that Landlord intends to [discuss
action to be taken vis-a-vis Relying Party]. Tenant acknowledges the right of
Landlord, Relying Party and any and all of Landlord's present and future lenders
and their successors and assigns to rely upon the statements and representations
of Tenant contained in this Certificate and further acknowledges that any action
taken by such parties will be made and entered into in material reliance on this
Certificate.
EXHIBIT G
Page 3
<PAGE>
8. Tenant hereby agrees to furnish Relying Party with such other and
further estoppel as Relying Party may reasonably request.
9. Notwithstanding anything contained in this Certificate, nothing
contained in this Certificate shall constitute or be deemed to constitute an
amendment, modification or waiver of any term or condition of the Lease or any
right or remedy of Tenant thereunder. In the event of any conflict between the
Lease and this Certificate, the Lease shall control.
__________________________________
By:_______________________________
Name:_____________________________
Title:____________________________
EXHIBIT G
Page 4
<PAGE>
EXHIBIT 10.8
Agreement No. C981105PC001
PRODUCT PURCHASE AGREEMENT
BETWEEN
GTE COMMUNICATION SYSTEMS CORPORATION
AND
GODIGITAL TELECOMMUNICATIONS INC.
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. PARTIES.............................................................. 1
2. TERM................................................................. 1
3. DEFINITIONS.......................................................... 1
4. SCOPE................................................................ 2
5. CUSTOMER'S OPTIONS UNDER THE AGREEMENT............................... 2
6. SOFTWARE LICENSE..................................................... 3
7. PRICE AND PRICE REVISIONS............................................ 3
8. PURCHASE ORDERS; CANCELLATION OF PURCHASE ORDERS;
REVOCATION OF ACKNOWLEDGEMENT........................................ 4
9. PAYMENT TERMS, BILLING............................................... 5
10. RECORDS AND REPORTS.................................................. 5
11. PRECEDENCE OF DOCUMENTS.............................................. 6
12. DELIVERY............................................................. 6
13. INSPECTION AND ACCEPTANCE............................................ 7
14. PRODUCT WARRANTIES, SERVICES AND SUPPORT............................. 8
15. INFRINGEMENT......................................................... 8
16. CONFIDENTIAL INFORMATION............................................. 9
17. PUBLICITY AND DISCLOSURE............................................. 11
18. COMPLIANCE WITH LAWS................................................. 11
19. FORCE MAJEURE........................................................ 12
20. ASSIGNMENT........................................................... 12
21. TAXES................................................................ 13
</TABLE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
22. PLANT AND WORK RULES AND RIGHT OF ACCESS............................... 13
23. INDEMNIFICATION AND INSURANCE.......................................... 14
24. RELATIONSHIP OF PARTIES................................................ 15
25. TERMINATION............................................................ 16
26. DISPUTE RESOLUTION..................................................... 16
27. NOTICES................................................................ 18
28. PRODUCT SAFETY NOTIFICATIONS/TOXIC SUBSTANCES.......................... 18
29. PRODUCT CHANGE/DISCONTINUANCE.......................................... 19
30. INVENTORY RETURN....................................................... 19
31. GOVERNMENT CONTRACT PROVISIONS......................................... 20
32. CENTURY COMPLIANCE..................................................... 20
33. STANDARDIZATION POLICIES, PROCEDURES AND TERMS......................... 20
34. NONWAIVER.............................................................. 20
35. SEVERABILITY........................................................... 20
36. SECTION HEADINGS....................................................... 20
37. SURVIVAL OF OBLIGATIONS................................................ 20
38. CHOICE OF LAW AND JURISDICTION......................................... 20
39. ENTIRE AGREEMENT....................................................... 21
SIGNATURES............................................................. 21
EXHIBIT A: GTE AFFILIATED ENTITIES
EXHIBIT B: PRODUCT AND SERVICE PRICES
EXHIBIT C: PURCHASE FOR INTERNAL USE
</TABLE>
-iii-
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
EXHIBIT D: PURCHASE FOR RESALE
EXHIBIT E: SIGNATURE PAGE FOR ATTACHMENTS
ATTACHMENT 1 - EDI
ATTACHMENT 2 - TRAINING
EXHIBIT F: SUPPLIER WBE/MBE/SDV EXPENDITURES REPORT
EXHIBIT G: SHIPPING AND CARRIER ROUTING INSTRUCTION
EXHIBIT H: PRODUCT DELIVERY INTERVAL
EXHIBIT I: CENTURY COMPLIANCE
EXHIBIT J: STANDARDIZATION POLICIES, PROCEDURES AND TERMS
</TABLE>
-iv-
<PAGE>
PRODUCT PURCHASE AGREEMENT
1. PARTIES
(a) This Product Purchase Agreement (Agreement) is made between GoDigital
Telecommunications Inc., a California corporation, with offices at
41305 Albrae Street, Fremont, CA 94538 (Seller) and GTE Communication
Systems Corporation (Customer), a Delaware corporation, acting through
its GTE Supply Division, with offices at 700 Hidden Ridge, Irving,
Texas 75038, for the benefit of itself and GTE affiliated entities
listed at Exhibit A (Affiliates), which may be changed by GTE Supply
upon written notice to Seller.
(b) An Affiliate that issues an Order hereunder shall also be a Customer
and may enforce the terms and conditions of this Agreement with
respect to any Product or Service purchased by such Affiliate as
though it were a direct signatory to the Agreement.
2. TERM
This Agreement shall be effective on March 1, 1998 and shall continue in
effect until March 1, 2002 unless earlier terminated or extended. This
Agreement shall be automatically terminated unless renewed by the mutual
written agreement of the parties prior to the expiration of the term.
3. DEFINITIONS
The terms defined in this Section shall have the meanings set forth below
whenever they appear in this Agreement, unless the context in which they
are used clearly requires a different meaning or a different definition is
described for a particular Section or provision:
(a) "Order" means a purchase order, or other written communication and/or
electronic transmission that Customer may deliver to Seller for the
purchase of Product and/or Service.
(b) "Product" means all goods, supplies, materials, parts, components,
assemblies, and associated Software and documentation described in
Exhibit B.
(c) "Service" means the Product-related work to be performed by Seller
under this Agreement, including installation, maintenance, repair, and
other related services.
(d) "Software" means any programs, in object form, including operating
programs in machine readable form and feature descriptions or
firmware, and documentation described in Exhibit B or identified in an
Order. Throughout this Agreement the term Software, as defined above,
is included in the term Product. "Software" does not include source
code unless specifically stated in this Agreement, an Order, or other
document.
(e) "Use" as it relates to Software shall mean: (i) the reading by
authorized users into or out of hardware memory of the Software and
the execution of the Software whether in whole or in part by any
individual having authorized access to any Product on
<PAGE>
which the Software is operated and shall include employees of
Customer, its agents, or contractors and/or in the cases of Customer
providing services to third parties or for resale, the third parties'
employees, agents, or contractors; (ii) to transfer into, and store
in, equipment selected by the Customer all or any portion of the
Software; (iii) and to process and execute instructions, statements
and data included in, or input to, the Software.
(f) "Specifications" shall mean specifications for the Product or Service
as set forth in an Order, as well as Seller's then current published
specifications and user documentation.
4. SCOPE
(a) This Agreement is for the benefit of all U.S. and foreign Affiliates
of Customer. Customer may purchase for its own use, to provide
services to third parties, for resale to end users, or for
distribution, Seller's Product (except that for Software, Customer
purchases a license as to the Software) and Service.
(b) This Agreement is nonexclusive and shall not be construed to require
Customer to purchase any specific amount of Product or Service from
Seller or to require Customer to sell any, all or a portion of Product
or Service it orders, or restrict the purchase, resale and/or
distribution of Product and/or Service to any geographic area.
(c) This Agreement does not by itself order any Product or Service.
Customer shall order Product or Service by submitting an Order
referencing this Agreement by number, and Seller shall fulfill the
Order as specified in Section 8, for (i) Product or Service listed in
Exhibit B at the prices specified and (ii) other Product or Service
for which Seller accepts an Order at the price as quoted to Customer
in writing.
(d) In order to facilitate international purchases of Products, the
parties may find it convenient to enter into separate agreements
between Seller and Customer and/or their respective affiliates
authorized to conduct, or to negotiate for the right to conduct,
business in foreign countries. The parties agree to use their best
commercially reasonable efforts, to assure that the terms and
conditions of any such agreements are consistent with the terms and
conditions of this Agreement, subject to applicable requirements of
local law and business practice.
(e) Under no circumstances shall any Seller shrink-wrap license be given
any force or effect in connection with any Software delivered to
Customer pursuant to this Agreement, except as specifically set forth
herein.
5. CUSTOMER'S OPTIONS UNDER THE AGREEMENT
(a) If Customer orders Product and/or Service for internal use, then the
provisions of Exhibit C, PURCHASE FOR INTERNAL USE, shall apply.
Internal use includes use by Customer, its Affiliates, employees,
agents and subcontractors, and use whereby Customer provides services
to third parties in the normal course of its business.
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(b) If Customer orders Product and/or Service for resale or distribution,
then the provisions of Exhibit D, PURCHASE FOR RESALE, shall apply.
(c) Those provisions (EDI Trading Agreement, Bar Code Program, Training)
of Exhibit E, SIGNATURE PAGE FOR ATTACHMENTS, initialed by the parties
on the signature page thereof are incorporated in this Agreement.
6. SOFTWARE LICENSE
(a) Operating System Software License - For Product that includes Software
---------------------------------
(operating program in machine readable form and feature descriptions
or firmware) furnished with or embedded in Product (Operating System
Software), for the life of purchased Product, or during the term
Product is leased, as applicable, Seller grants to Customer and any
subsequent purchaser, assignee, or lessee of said Product a
nonexclusive license to use said Operating System Software in
connection with Product with which it is delivered. Customer and any
subsequent purchaser, assignee, or lessee may copy the Operating
System Software for use on such, Product with which it was originally
delivered for archival purposes on an alternate Product for disaster
recovery purposes, as applicable, but shall not otherwise knowingly
reproduce the original Operating System Software or make copies of the
Operating System Software for distribution to others. Title to such
Software shall remain with Seller.
(b) The license for Software other than Operating System Software and
additional terms and conditions applicable to the license of Operating
System Software are set forth in Exhibit C for internal use and
Exhibit D for resale and distribution.
7. PRICE AND PRICE REVISIONS
(a) If Seller offers more favorable prices, terms, conditions, warranties,
or other benefits to any other commercial Customer, for like terms and
conditions, volumes and quantities, during the term of this Agreement,
then, at the option of Customer, this Agreement and any Order affected
thereby will be modified to include such more favorable prices, terms,
conditions, warranties or benefits. There is no minimum order quantity
or volume required from Customer when ordering Product and Service,
unless specified otherwise in an Exhibit.
(b) The net prices for all Product or Service ordered by Customer are
those prices specified in Seller's current U.S. or International Price
List, less Customer's applicable discounts and are set forth in
Exhibit B, unless Section 7.(a) applies.
(c) The Product and Service prices specified in Seller's price lists,
referenced above, shall not increase for the first twelve (12) months
of the Agreement term. Subject to Section 7.(a), Seller may then
propose price increases once in each subsequent twelve (12) month
period of the Agreement by giving written notice to Customer at least
ninety (90) days prior to the proposed effective date of the new
pricing. Such price increases shall not exceed [*] of the previous
price, unless specified otherwise in an Exhibit. Seller shall honor
all net prices for Product and
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Service for which Orders have been issued prior to the effective date
of such increase.
(d) Any price decrease or discount increase shall be effective immediately
upon announcement by Seller and shall apply to all Orders that have
not been processed by Customer for payment to Seller.
(e) Under special circumstances, Customer may purchase Product and Service
pursuant to the terms of this Agreement at prices and discounts quoted
by Seller that are more favorable than those prices and discounts.
Such special circumstances include, but are not limited to, (1)
competitive allowances; (2) purchases that provide Seller with
additional sales or manufacturing efficiencies; and (3) Seller
promotional offers.
(f) Quotations provided by Seller shall be valid for ninety (90) days from
their date unless otherwise mutually agreed, and if there is a price
increase, the price contained on the quotation will be honored until
its expiration.
8. PURCHASE ORDERS; CANCELLATION OF PURCHASE ORDERS; REVOCATION OF
ACKNOWLEDGEMENT
(a) An Order may be mailed, sent by facsimile transmission or electronic
data interchange (EDI). Prior to initiating an EDI transaction, the
parties will execute an EDI Trading Agreement which will set forth the
terms and conditions of EDI transactions.
(b) Seller shall be obligated to acknowledge Orders within ten (10) days
of receipt, without conditioning such acknowledgement on the
acceptance by Customer of any terms inconsistent with or in addition
to those set forth in this Agreement. Upon acknowledgement, the Order
and related acknowledgement shall constitute a binding contract for
the purchase and sale of the applicable Product and/or Service
governed by the provisions of this Agreement, as such provisions may
be modified as provided herein.
(c) Seller may enforce each Order only against the Affiliate that has
submitted the Order. Default by an Affiliate shall not affect any
other Affiliate party to this Agreement.
(d) If an Affiliate shall be in material breach or default of this
Agreement, including, but not limited to, timely payment for Product
purchased and such breach shall continue for a period of thirty (30)
days after receipt of Seller's written notice, then, in addition to
all other rights and remedies of law or equity or otherwise, Seller
shall have the right to suspend delivery of Product on outstanding
Orders or revoke existing acknowledgements only with respect to the
Affiliate.
(e) If Seller shall be in material breach or default of this Agreement,
and such breach shall continue for a period of thirty (30) days after
Seller's receipt of Customer's written notice thereof, then, in
addition to all other rights and remedies of law or equity or
otherwise, Customer shall have the right to immediately cancel all
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applicable Orders without any obligation or liability to Seller for
said cancellation. However, if Seller fails to tender delivery of
Product or render Service on the respective date agreed upon or as set
forth in Seller's acknowledgement, then Customer shall have the right
to immediately cancel all applicable Orders without further obligation
or liability to Seller for said cancellation or any obligation to
provide Seller a time period to cure said breach.
(f) Unless specified otherwise in an Exhibit, Customer may cancel or
reschedule Orders for convenience, in whole or in part, without
obligation or liability, by providing written notice to Seller at
least ten (10) days before scheduled ship date of Product or date
Service is to be rendered.
9. PAYMENT TERMS, BILLING
(a) Payment for Product shall be due thirty (30) days from date of receipt
of goods, or receipt of an undisputed invoice, whichever occurs later,
unless payment terms more favorable to Customer are stated on Seller's
invoice and Customer elects to pay on such terms. Payment for related
Service, unless specified otherwise in an Exhibit, shall be due thirty
(30) days after receipt of an undisputed invoice, provided all
obligations of Seller have been performed. However, payment shall not
indicate acceptance of any Product or Service performed.
(b) Invoices for charges specified in an Order shall be submitted by
Seller to the address specified in the Order. Invoices shall include,
but not be limited to, (i) Order number; (ii) Order line number; (iii)
Product identification number; (iv) ship to address; (v) quantity
shipped and billed or quantity of service units performed and billed;
(vi) net unit cost; and (vii) net invoice amount.
10. RECORDS AND REPORTS
(a) Seller shall maintain complete and accurate records of all invoices,
all amounts billable to and payments made by Customer, in accordance
with generally accepted accounting practices. Seller shall retain and
make available upon request such records for a period of three (3)
years from the date of final shipment of Product or rendering of
services covered by this Agreement.
(b) When requested by GTE Supply, Seller shall, for all Orders placed
directly with Seller, provide GTE Supply a monthly purchase report by
ordering location, listing Product and Service purchased under this
Agreement, including description, part number, quantities shipped, and
associated list and net prices.
When requested by Seller, Customer shall for resale purchase orders
shipped from GTE Supply's inventory, provide Seller, a monthly report
(point of sale) by customer, listing Product shipped, part number,
description, quantities shipped, and associated net prices.
(c) Seller must make an accounting of dollars that are subcontracted to or
whereby Seller's Product contains content from firms that are Small
Businesses, Women Owned Businesses, Minority Owned Businesses, or
Service Disabled Veteran
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Owned Businesses under the Small Business Administration and/or other
government regulations. These dollars shall be reported in writing, on
a quarterly basis, utilizing the instructions and form set forth in
Exhibit F, to the following address:
Group Manager-Supplier Diversity & Administration
HQA06R01
GTE Supply
5615 High Point Drive
Irving, TX 75038
11. PRECEDENCE OF DOCUMENTS
(a) All quotations, Orders, acknowledgements, and invoices issued pursuant
to this Agreement shall be subject to the provisions contained in this
Agreement. The terms and conditions of this Agreement will control
over any conflicting or inconsistent terms contained in any quotation,
Order, acknowledgement or invoice.
(b) No additional terms contained in any quotation, Order, acknowledgement
or invoice shall be valid for a specific transaction, unless agreed in
writing by authorized representatives of the parties.
12. DELIVERY
(a) Unless otherwise specified in an applicable Order, title to a Product
sold pursuant to this Agreement shall pass at the time of shipment by
Seller as described in Section 12.(b). Any loss or damage to a Product
prior to the passing of title shall be for the account and risk of
Seller and after the passing of title shall be for the account and
risk of Customer.
(b) Shipments of Product shall be made FOB Origin, freight collect or as
otherwise specified on individual Order. When Customer requests Seller
to arrange the transportation of the Product, Seller shall ship
Product freight collect in accordance with the GTE Shipping and
Carrier Routing Instruction, Exhibit G (which Customer may revise and
provide to Seller), unless otherwise specified on Customer's Order. If
Seller is instructed by Customer to ship prepaid and added to the
invoice, Seller shall select a carrier based on the best rate as
negotiated by Seller, and Customer shall only pay Seller's net
transportation costs, that include, but are not limited to, all
applicable discounts, allowances and refunds.
(c) Failure of Seller to ship Product in accordance with Customer's
freight routing instructions may result in charge-backs to Seller for
excess freight charges.
(d) Unless instructed otherwise by Customer. Seller shall, for Orders
placed, (i) see that all subordinate documents bear Customer's Order
number; (ii) enclose a packing list with each shipment and when more
than one package is shipped, identify the one containing the packing
list; (iii) mark Customer's Order number on all packages and shipping
papers; (iv) render invoices showing Customer's Order number; (v)
render separate invoices for each shipment or Order; (vi) forward
shipping notices with
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invoices; (vii) invoice Customer by mailing or otherwise transmitting
invoices, bills, and notices to the billing address on the Order; and
(viii) make available a bill of lading upon request.
(e) Standard delivery intervals for Product shall be specified in Exhibit
H and may be amended only by a written document signed by both
parties. Standard delivery intervals begin from the date of Seller's
receipt of Customer's Order.
(f) Seller shall ship Product to Customer within (i) the delivery
intervals specified in Exhibit H (which do not include in-transit
interval), or (ii) as otherwise provided by Seller to Customer in a
firm price quotation, purchase order acknowledgement or other written
means (provided that such time period is not longer than the time
period specified in Exhibit H without Customer's written request or
agreement). If Seller fails to meet a delivery date, Customer may
require an expedited delivery, with any additional costs to be borne
by Seller, or Customer may cancel all or part of the Order in
accordance with Section 8. If Product is delivered ahead of the
delivery date, Customer may withhold payment for Product until after
the specified delivery date or place Product in storage, at Seller's
expense, until the specified delivery date.
(g) Product shall be packaged for shipment, at no additional charge, in
commercially suitable containers, consistent with all applicable laws,
that provide protection against damage during the shipment, handling
and storage of the Product in reasonably dry, unheated quarters.
13. INSPECTION AND ACCEPTANCE
(a) All Products shall be subject to inspection by Customer after delivery
to determine conformity with Customer's Order and Seller's advertised
or published specifications. Unless otherwise mutually agreed,
Customer shall have a period of sixty (60) days following arrival of
Product at the delivery destination specified by Customer within which
to inspect the Product for conformity with Customer's Order and
Seller's advertised and published specifications and to provide Seller
with written notice of any discrepancy or rejection. If the Product is
to be installed by Customer, Customer shall have the longer of thirty
(30) days following such installation or following completion of any
Seller authorized testing period within which to complete such
inspection, provided that installation shall occur not more than
thirty (30) days from delivery. Following notification by Customer, if
Seller is unable to repair or replace Product that does not conform,
in whole or in part, within five (5) business days or such lesser time
as is determined by Customer to be reasonable, then Customer may
return Product to Seller, at Seller's risk and expense, and receive a
refund of all amounts paid with respect to the returned Product. For
such Product returns, Customer shall notify Seller and arrange for the
return of Product.
(b) Inspection or failure to inspect on any occasion shall not affect
Customer's rights under the "WARRANTY" provisions of this Agreement or
any other rights or remedies available to Customer, under this
Agreement.
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(c) If Seller is to perform installation of Product, Customer's acceptance
of Product will be required. Product shall be accepted after
successful conclusion of Seller's standard test procedures (or other
mutually agreed upon evaluation and test procedures), and Customer's
written concurrence that Product has successfully completed such test
procedures, provided that such test procedures verify Product
performance in accordance with Seller's advertised or published
specifications or other mutually agreed upon specifications for such
Product. If Product fails to meet acceptance criteria, Seller shall
have thirty (30) days to correct all deficiencies, unless otherwise
mutually agreed. If, after the cure period, Product still fails to
perform, Customer shall have the right to reject Product and return
Product to Seller at Seller's expense. Any amounts paid to Seller by
Customer shall be refunded to Customer within thirty (30) days after
return of Product. The purchase price for such Product shall also be
credited against any volumes under this Agreement.
(d) Customer's right to inspect and test does not relieve Seller from its
testing, inspection and quality control obligations.
14. PRODUCT WARRANTIES, SERVICES AND SUPPORT
Seller shall provide warranties and Product services and support as set
forth in Exhibits C and D.
15. INFRINGEMENT
(a) Seller shall indemnify, defend and hold harmless Customer and its
affiliates, shareholders, directors, officers, employees, contractors,
and agents from all claims, suits, demands, damages, liabilities,
expenses (including reasonable fees and disbursements of counsel)
judgments, settlements and penalties of every kind ("Claims") arising
from or relating to any actual or alleged infringement or
misappropriation of any patent, trademark, copyright, trade secret or
any actual or alleged violation of any other intellectual property
rights arising from or in connection with the Products provided or the
Services performed under this Agreement. Notwithstanding anything to
the contrary contained in this Agreement (including, but not limited
to, Section 23, INDEMNIFICATION AND INSURANCE), the provisions of this
Section 15.(a) shall govern the rights of Customer and its affiliates,
shareholders, directors, officers, employees, contractors, and agents
to indemnification for Claims of infringement, misappropriation or
violation of intellectual property rights.
(b) The procedures set forth in Section 23(b) shall apply in the case of
any claims of infringement, misappropriation or violation of
intellectual property rights for which indemnification will be sought.
(c) Without limitation of 15(a), if the sale or use of the Products or
Services is enjoined, Seller shall, at Customer's option and Seller's
expense, either:
(1) Procure for Customer the right to use the Products or Services;
(2) Replace the Products or Services with equivalent, noninfringing
Products or Services;
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(3) Modify the Products or Services so they become noninfringing; or
(4) Remove the Products or Services and refund the purchase price,
including transportation, installation, removal and other
incidental charges.
16. CONFIDENTIAL INFORMATION
(a) In order for the parties to perform their respective obligations under
this Agreement, it may be necessary for either party to disclose to
the other technical, Customer, personnel and/or business information
in written, graphic, electronic, oral or other tangible or intangible
forms including, but not limited to, specifications, records, data,
computer programs, drawings, schematics, know-how, notes, models,
reports and samples. Such information may contain proprietary or
confidential material, or material subject to applicable laws
regarding secrecy of communications or trade secrets (Confidential
Information).
(b) Each party acknowledges and agrees:
(1) That all Confidential Information acquired by either party from
the other shall be and shall remain the exclusive property of the
disclosing party;
(2) To identify in writing as confidential or proprietary, or mark as
confidential or proprietary, any information that either party
deems to be Confidential Information;
(3) That information that is disclosed orally shall not be considered
Confidential Information unless it is reduced to writing or to a
written summary that identifies the orally-disclosed topics to be
considered as Confidential Information and such writing is
provided to the recipient at the time of disclosure or within
thirty (30) days thereafter;
(4) To receive in confidence any Confidential Information; to limit
access to such Confidential Information to authorized employees,
agents and contractors (covered by obligations at least as
restrictive as those set forth in this Section 16) who have a
need to know the Confidential Information in order for the party
to perform its obligations under this Agreement and who have been
informed of the confidential and proprietary nature; not to
disclose, reveal or divulge any Confidential Information or
authorize any other person to do so except (i) as specifically
approved in writing by the disclosing party or (ii) as required
in connection with the due and proper performance by the
receiving party of its obligations under this Agreement (which
shall not be deemed to include disclosure to consultants,
advisors or other third parties which are not full-time, regular
employees of the receiving party);
(5) To use such Confidential Information only for the purposes of
performing their obligations under this Agreement and for such
other purposes as may be agreed upon between the parties in
writing;
(6) If a receiving party receives a request to disclose any
Confidential Information (whether pursuant to a valid and
effective subpoena, an order issued by a
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court or other governmental authority of competent jurisdiction
or otherwise) on advice of legal counsel that disclosure is
required under applicable law, such party agrees that, prior to
disclosing any Confidential Information, it shall (i) notify the
disclosing party of the existence and terms of such request or
advice, (ii) cooperate with the disclosing party in taking
legally available steps to resist or narrow any such request or
to otherwise eliminate the need for such disclosure, if requested
to do so by the disclosing party, and (iii) if disclosure is
required, use its best efforts to obtain a protective order or
other reliable assurance that confidential treatment will be
afforded to such portion of the Confidential Information as is
required to be disclosed;
(7) Upon request of the disclosing party, to return all Confidential
Information to such party, or to destroy any documents, computer
media or records, in written, graphic, or other tangible form,
that contain any Confidential Information;
(8) That the obligations with respect to Confidential Information
shall extend for a period of five (5) years following the date of
initial disclosure of that Confidential Information, and such
obligations shall extend beyond completion of the term of this
Agreement; and
(9) That nothing contained in this Section 16 shall be construed as a
license or permission to make, use, or sell the Confidential
Information or Products derived therefrom.
(c) The obligations contained in this Section 16 do not apply to
Confidential Information that:
(1) As shown by reasonably documented proof, was in the receiving
party's possession prior to receipt thereof from the disclosing
party;
(2) As shown by reasonably documented proof, was received by one
party in good faith from a third party not subject to a
confidential obligation to the other party;
(3) Now is or later becomes publicly known through no breach of
confidential obligation by the receiving party;
(4) Is disclosed pursuant to a requirement imposed by a governmental
agency or is otherwise required to be disclosed by operation of
law, provided that the party receiving the request for the
information has fully complied with its obligations under Section
16(b)(6);
(5) Was developed by the receiving party without the developing
persons having access to any of the Confidential Information
received from the other party;
(6) Is authorized in writing by the disclosing party to be released
or is designated in writing by the source as no longer being
confidential or proprietary.
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(d) It is agreed that a violation of any of the provisions of this Section
16 will cause irreparable harm and injury to the disclosing party and
that party shall be entitled, in addition to any other rights and
remedies it may have at law or in equity, to seek an injunction
enjoining and restraining the receiving party from doing or continuing
to do any such act and any other violations or threatened violations
of this Section 16.
17. PUBLICITY AND DISCLOSURE
Each party agrees not to provide copies of this Agreement, or otherwise
disclose the terms of this Agreement, to any third party without the prior
written consent of the other party; provided, however, that either party
may, without obtaining the other's consent, provide copies or make
disclosures to prospective purchasers of the business of such party or of
any affiliate of such party; or for the purpose of obtaining third party
financing; and any regulatory or judicial body requesting such information.
The parties further agree to submit to one another, for written approval,
all advertising, sales promotion, press releases and other publicity
matters relating to the Product furnished or the Service performed pursuant
to this Agreement, when its respective name or mark is mentioned or
language from which the connection of said name or mark may be inferred or
implied. Any approval required under this Section shall not be unreasonably
withheld or delayed by either party.
18. COMPLIANCE WITH LAWS
(a) Seller shall comply with the provisions of all applicable federal,
state, county and local laws, ordinances, regulations and codes
(including procurement of required permits or certificates) in
manufacturing, assembling, selling and providing Product and in
performing its other obligations under this Agreement, including, but
not limited to, the standards promulgated under the Occupational
Safety and Health Act, Executive Order 11246, as amended, Section 503
of the Vocational Rehabilitation Act of 1973, as amended, the Vietnam
Era Veterans Readjustment Assistance Act of 1974, the Immigration
Reform and Control Act of 1986, the Civil Rights Acts of 1964 and
1991, the Americans with Disabilities Act, the Age Discrimination in
Employment Act, and all rules and regulations relative to these Acts
and other applicable equal employment opportunity laws, rules and
regulations, which are expressly incorporated herein by reference.
Irrespective of whether a specification is furnished, if Product or
containers furnished are required to be constructed, packaged,
labeled, or registered in a prescribed manner, Seller shall comply
with applicable federal, state or local laws. Seller shall indemnify
Customer against all claims, loss or damage sustained because of its
noncompliance.
(b) If any persons furnished under the Agreement by Seller have a
disability as defined in the Americans with Disabilities Act, 42
U.S.C.A. 12101 et seq. (the ADA), Seller shall, where required by
Title I of the ADA and at its sole expense, provide "reasonable
accommodations" that may be required under Title I of the ADA
including, but not limited to, "auxiliary aids and services" to make
aural, visual materials or interpreters available to individuals
furnished by Seller with impairments so that such individuals are able
to perform the essential functions of the job they are contracted to
perform. Seller further agrees to indemnify and defend Customer for
any losses, fines, reasonable attorney fees, or other penalties that
may be incurred
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or assessed upon Customer due to Seller's failure to comply with the
provisions of the Title I of the ADA with respect to the persons
furnished by Seller.
(c) Product furnished shall comply, to the extent applicable, with the
requirements of the Federal Communications Commission's Rules and
Regulations, as may be amended, including those sections concerning
the labeling of such Product and the suppression of radiation to
specified levels. If the Product generates interference harmful to
radio communications, and such Product was installed in accordance
with such Rules and Regulations, then Seller shall provide to Customer
methods for suppressing the interference. If the interference cannot
be reasonably suppressed, Seller shall accept return of the Product,
refund to Customer the price paid for the Product and bear all
expenses for removal and shipment of such Product. Nothing herein
shall be deemed to diminish or otherwise limit Seller's obligations
under the "WARRANTY" provisions of this Agreement herein or any other
rights or remedies available to Customer, whether at law or in equity.
19. FORCE MAJEURE
(a) Neither party shall be responsible for any delay or failure in
performance of any part of this Agreement to the extent that such
delay or failure is caused by fire, flood, explosion, war, embargo,
government requirement, civil or military authority, acts of God,
strikes, slowdowns, picketing, boycotts, or any other circumstances
beyond its reasonable control and not involving any fault or
negligence of the party affected (Condition). If any such Condition
occurs, the party delayed or unable to perform ("delayed party") shall
promptly give written notice to the other party. If such Condition
remains at the end of thirty (30) days, the party affected by the
other's delay or inability to perform ("affected party") may elect to
(i) terminate such purchase order or part thereof, or (ii) suspend
such purchase order for the duration of the Condition, and if Customer
is the suspending party, buy elsewhere comparable material to that to
be sold under such purchase order, and apply to any commitment the
purchase price of such purchase, and require the delayed party to
resume performance of such purchase order once the Condition ceases,
with an option in the affected party to extend the period of this
Agreement up to the length of time the Condition endured.
(b) Unless written notice is otherwise given to the delayed party by the
affected party within sixty (60) days after the affected party is
notified of the Condition, (a)(ii) above shall be deemed selected.
20. ASSIGNMENT
(a) The rights and obligations of the parties shall neither be assigned
nor delegated without the prior written consent of the other party.
Such consent shall not be unreasonably withheld or delayed. However,
any party may assign or delegate its respective rights and
obligations, in whole or in part, to any parent, subsidiary or
affiliate of that party that was such a parent, subsidiary or
affiliate at the time of execution of this Agreement; provided that
the assigning party gives the other thirty (30) days' prior written
notice and the assignee agrees to be bound by the terms of this
Agreement.
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(b) The limitation on assignment does not apply to an assignment confined
solely to monies due or to become due under this Agreement, provided
the party is given thirty (30) days' prior written notice of such
assignment. An assignment of monies shall be void to the extent that
it attempts to impose upon the party obligations to the assignee in
addition to the payment of such monies, or to preclude the party from
dealing solely and directly with the other in all matters, including
negotiation of amendments or settlement of amounts due, or it gives
rise to any additional rights or defenses available to the assignee
that were not available to the other party.
(c) If Customer sells, exchanges or otherwise disposes of all or a portion
of the assets of, or Customer's interest in, any business unit in
which Product are used, then Customer shall have the right, upon
written notice to Seller, to assign to such third party all applicable
licenses, warranties, maintenance schedules and rights granted under
this Agreement with respect to such Product; provided that the third
party agrees to be bound by all obligations of Customer to Seller that
pertain to the Product.
(d) Customer may assign to a leasing company Customer's right to purchase
Product under the terms and conditions of this Agreement for
Customer's internal use.
21. TAXES
Customer shall be liable for and shall reimburse Seller for payments of
Federal Manufacturers' and Retailers' Excise Taxes and State and local
sales and use taxes, as applicable, with respect to transactions under this
Agreement. Taxes payable by Customer shall be separately stated in
Seller's invoices and shall not be included in Seller's prices. Customer
shall not be liable for any tax for which a valid exemption certificate
acceptable to the applicable state or local taxing authorities is furnished
by Customer to Seller. Customer's purchase order may provide Seller
additional tax instruction as allowed by law including, but not limited to,
Customer's accrual and payment of taxes and/or special jurisdictional
exemptions.
22. PLANT AND WORK RULES AND RIGHT OF ACCESS
(a) The respective agents and employees of the parties, while on the
premises of the other, shall comply with all plant rules, regulations
and reasonable company standards for security, including (when
required by U.S. government regulations) submission of satisfactory
clearance from U.S. Department of Defense and other federal
authorities concerned.
(b) Each party shall permit reasonable access during normal working hours
to its facilities in connection with the work. Reasonable prior
notice shall be given when access is required.
(c) If Seller is given access, whether on-site or through remote
facilities, to any Customer computer or electronic data storage system
in order for Seller to accomplish the work called for in this
Agreement, Seller shall limit such access and use solely to perform
work within the scope of this Agreement and shall not access or
attempt to access any computer system, electronic file, software or
other
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electronic services other than those specifically required to
accomplish the work required under this Agreement. Seller shall limit
such access to those of its employees who are qualified and required,
subject to Customer requiring written authorization, to have such
access in connection with this Agreement, and shall strictly follow
all Customer's security rules and procedures for use of Customer's
electronic resources. All user identification numbers and passwords
disclosed to Seller and any information obtained by Seller as a result
of Seller's access to and use of Customer's computer and electronic
data storage systems shall be deemed to be, and shall be treated as,
Customer Confidential Information under applicable provisions of this
Agreement. Seller agrees to cooperate with Customer in the
investigation of any apparent unauthorized access by Seller to
Customer's computer or electronic data storage systems or unauthorized
release of Confidential Information by Seller.
23. INDEMNIFICATION AND INSURANCE
(a) Seller shall indemnify, defend, and hold harmless Customer and its
affiliates, shareholders, directors, officers, employees, contractors,
and agents from all claims, suits, demands, damages, liabilities,
expenses (including reasonable fees and disbursements of counsel),
judgments, settlements and penalties of every kind ("Claims") based on
(i) personal injury, death, or property damage to the extent any of
the foregoing is proximately caused by either any defective Product
provided by Seller, its officers, employees, subcontractors or agents,
or by the negligent or willful acts or omissions of Seller, its
officers, employees, contractors or agents, or by strict liability in
tort or products liability of any other kind in connection with any
Product or Services provided by Seller, its officers, employees,
contractors or agents or the use, resale or distribution of any such
Product or Services by Customer. The foregoing indemnity shall not
apply in the case of Claims which solely arise from the negligence,
misconduct or other fault of Customer. It shall apply, however, if a
Claim is the result of the joint negligence, joint misconduct, or
joint fault of Seller and Customer, but in such a case the amount of
the Claim for which Customer is entitled to indemnification shall be
limited to that portion of such Claim attributable to the negligence,
misconduct or other fault of Seller. The obligations of this
provision are in addition to Seller obligation to provide insurance
and shall not be limited by any limitation on the amount or type of
damages, compensation or benefits payable by Seller under the Worker's
Compensation Acts, Longshoremen and Harborworker's Act, Disability
Benefits Act or any other employee benefit act.
(b) Customer shall promptly notify Seller in writing of any suits, claims
or demands covered by this indemnity. Promptly after receipt of such
notice, Seller shall assume the defense of such suits, claims, or
demands. If Customer in its sole discretion so elects, Customer may
also participate in the defense thereof by employing counsel at
Customer's expense, without waiving Seller's obligations to indemnify,
defend, and hold harmless. Seller shall not settle or compromise any
claims, suits, demands, or consent to the entry of any judgment
thereon without the prior written consent of Customer, not to be
unreasonably withheld, and without an unconditional release of all
liability by each claimant or plaintiff to Customer.
14
<PAGE>
(c) Seller agrees to maintain during the term all insurance or bonds
required by law or this Agreement, including, but not limited to (i)
Workers Compensation and related insurance as prescribed by the law of
the state in which Seller's services are per-formed or Product are
delivered; (ii) employer's liability insurance with limits of at least
one million dollars ($1,000,000) for each occurrence, and (iii)
comprehensive general liability insurance including products
liability, and, if the use of motor vehicles is required,
comprehensive motor vehicle liability insurance, each with limits of
at least two million dollars ($2,000,000) for combined single limit
for bodily injury, including death, and/or property damage. Seller
shall cause Customer to be included as an additional insured under
said policies (as "GTE Corporation and its affiliates and
subsidiaries") and Customer's coverage under such policies shall be
primary. Seller shall waive its rights of subrogation against
Customer for Workers' Compensation claims. Seller shall, prior to
rendering such services, furnish to the address specified in Section
10(c), certificates or evidence of the foregoing insurance indicating
the amount and nature of such coverage, the expiration date of each
policy, and stating that no material change or cancellation of any
such policy shall be effective unless thirty (30) days' prior written
notice is given to Customer. Seller shall have the option, when
permitted by law, to self-insure any or all of the foregoing risks.
(d) Should Seller elect to self-insure, in lieu of Certificates of
Insurance as stipulated in Section 23(c), Seller shall provide to
Customer: (i) the self-insurance registration identification number
assigned by each state in which Seller desires to provide services to
Customer or manufactures Product; (ii) a letter of certification from
Seller's insurance carrier or self insurance administrator that Seller
is self-insured for the coverage's and amounts as stipulated in 23(c),
including that Customer is an additional insured and shall be
indemnified and saved harmless from all claims, suits, and liabilities
as set forth within this Agreement; and (iii) a notification of the
states in which Seller is provided coverage under its self-insurance.
24. RELATIONSHIP OF PARTIES
In providing any Services under this Agreement, Seller is acting solely as
an independent contractor and not as an agent of any other party. Persons
furnished by the respective par-ties shall be solely the employees or
agents of such parties, respectively, and shall be under the sole and
exclusive direction and control of such parties. They shall not be
considered employees of the other party for any purpose. Each party shall
be responsible for compliance with all laws, rules and regulations
involving its respective employees or agents, including (but not limited
to) employment of labor, hours of labor, health and safety, working
conditions and payment of wages. Each party shall also be responsible,
respectively, for payment of taxes, including federal, state, and municipal
taxes, chargeable or assessed with respect to its employees or agents, such
as social security, unemployment, worker's compensation, disability
insurance and federal and state income tax withholding. Neither party
undertakes by this Agreement or otherwise to perform or discharge any
liability or obligation of the other party, whether regulatory or
contractual, or to assume any responsibility whatsoever for the conduct of
the business or operations of the other party. Nothing contained in this
Agreement is intended to give rise to a partnership or joint venture
between the parties or to impose upon the parties any of the duties or
responsibilities of partners or joint ventures.
15
<PAGE>
25. TERMINATION
(a) Customer may terminate this Agreement without cause, effective after
thirty (30) days written notice to Seller. Termination shall not
affect any purchase order placed, any subordinate agreement executed
prior to the date of termination, or any fully paid up license granted
to Customer. Upon termination of this Agreement without cause,
Customer shall not be liable to Seller, either for compensation or for
damages of any kind or character whatsoever, whether on account of the
loss by Seller of present or prospective profits on sales or
anticipated sales, or expenditures, investments or commitments made in
connection with the establishment, development or maintenance of
Seller's business, or on account of any other cause or thing
whatsoever. The termination shall not prejudice the rights or
liabilities of the parties with respect to Product sold, or any
indebtedness then owing by either party to the other.
(b) Either party may terminate this Agreement, effective immediately,
without liability for said termination, upon written notice to the
other party, if any of the following events occur:
(1) The other files a voluntary petition in bankruptcy;
(2) The other is adjudged bankrupt;
(3) A court assumes jurisdiction of the assets of the other
under a federal reorganization act;
(4) A trustee or receiver is appointed by a court for all or a
substantial portion of the assets of the other;
(5) The other becomes insolvent or suspends its business;
(6) The other makes an assignment of its assets for the benefit
of its creditors, except as required in the ordinary course
of business; or
(7) The identity of the other's business is materially changed
by sale of its business, transfer of control of its
outstanding stock, merger or otherwise.
(c) Either party may terminate this Agreement for a material breach or
default of any of the terms, conditions or covenants of this Agreement
by the other, provided that such termination may be made only
following the expiration of a thirty (30) day period during which the
other party has failed to cure such breach after having been given
written notice of such breach. This subsection shall not apply to
Customer's cancellations or Seller's revocations under Section 8,
PURCHASE ORDERS; CANCELLATION OF PURCHASE ORDERS; REVOCATION OF
ACKNOWLEDGEMENT.
26. DISPUTE RESOLUTION
(a) The parties desire to resolve certain disputes, controversies and
claims arising out of this Agreement without litigation. Accordingly,
except in the case of (i) a dispute,
16
<PAGE>
controversy or claim relating to a breach or alleged breach on the
part of either party of the provisions of Section 16, CONFIDENTIAL
INFORMATION, (ii) a suit, action or proceeding to compel Seller to
comply with its obligations to indemnify Customer pursuant to this
Agreement or (iii) a suit, action or proceeding to compel either party
to comply with the dispute resolution procedures set forth in this
Section 26, the parties agree to use the following alternative
procedure as their sole remedy with respect to any dispute,
controversy or claim arising out of or relating to this Agreement or
its breach. The term "Arbitrable Dispute" means any dispute,
controversy or claim to be resolved in accordance with the dispute
resolution procedure specified in this Section 26.
(b) At the written request of a party, each party shall appoint a
knowledgeable, responsible representative to meet and negotiate in
good faith to resolve any Arbitrable Dispute arising under this
Agreement. The parties intend that these negotiations be conducted by
nonlawyer, business representatives. The discussions shall be left to
the discretion of the representatives. Upon agreement, the
representatives may utilize other alternative dispute resolution
procedures such as mediation to assist in the negotiations.
Discussions and correspondence among the representatives for purposes
of these negotiations shall be treated as confidential information
developed for purposes of settlement, shall be exempt from discovery
and production, and shall not be admissible in the arbitration
described below or in any lawsuit without the concurrence of all
parties. Documents identified in or provided with such
communications, which are not prepared for purposes of the
negotiations, are not so exempted and may, if otherwise admissible, be
admitted in evidence in the arbitration or lawsuit.
(c) If the negotiations do not resolve the Arbitrable Dispute within sixty
(60) days of the initial written request, the Arbitrable Dispute shall
be submitted to binding arbitration by a single arbitrator pursuant to
the Commercial Arbitration Rules of the American Arbitration
Association. A party may demand such arbitration in accordance with
the procedures set out in those rules. Discovery shall be controlled
by the arbitrator and shall be permitted to the extent set out in this
Section. Each party may submit in writing to a party, and that party
shall so respond, to a Maximum of any combination of thirty-five (35)
(none of which may have subparts) of the following: interrogatories,
demands to produce documents and requests for admission. Each party
is also entitled to take the oral deposition of one (1) individual of
another party. Additional discovery may be permitted upon mutual
agreement of the parties. The arbitration hearing shall be commenced
within sixty (60) days of the demand for arbitration and the
arbitration shall be held in Dallas, Texas. The arbitrator shall
control the scheduling so as to process the matter expeditiously. The
parties may submit written briefs. The arbitrator shall rule on the
Arbitrable Dispute by issuing a written opinion within thirty (30)
days after the close of hearings. The arbitrator shall have no power
or authority to make awards or issue orders of any kind except as
permitted by this Agreement and substantive law, and in no event shall
the arbitrator have the authority to make any award that provides for
punitive or exemplary damages. The arbitrator's decision shall follow
the plain meaning of this Agreement and the relevant documents. The
times specified in this Section may be extended upon mutual agreement
of the parties or by the arbitrator upon a showing of good cause.
17
<PAGE>
Judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction.
(d) Each party shall bear its own cost of these procedures. A party
seeking discovery shall reimburse the responding party the cost of
production of documents (to include search time and reproduction time
costs). The parties shall equally share the fees of the arbitration
and the arbitrator.
27. NOTICES
(a) Any written notice either party may give the other concerning the
subject matter of this Agreement shall be in writing and given or made
by means of telegram, facsimile transmission, certified or registered
mail, express mail or other overnight delivery service, or hand
delivery, proper postage or other charges paid and addressed or
directed to the respective parties as follows:
To Seller: At Seller's address shown on the first page of this
Agreement.
To Customer: GTE Supply
700 Hidden Ridge
Irving, Texas 75038
Attention: Manager-Contract Management
(HQW03N75)
and
GTE Supply
5615 High Point Drive
PO Box 169001
Irving, Texas 75016-9001
Attention: Manager - Purchasing
(HQA09122)
and to the Affiliate that placed the Order if different than GTE
Supply.
(b) Written notices for change in ownership, change in name of firm, or
change in mailing address must be given by Seller by mailing to
Customer within thirty (30) days of such change. Notices for change
in ownership must include the names of all new owners or officers,
registered agent for service of process and state of incorporation or
organization.
28. PRODUCT SAFETY NOTIFICATIONS/TOXIC SUBSTANCES
(a) Seller will immediately notify Customer by telephone (followed by
written confirmation within twenty-four hours) if Product purchased or
materials used fail to comply with applicable safety rules or
standards of the United States Consumer Product Safety Commission or
the Environmental Protection Agency or contain a defect that presents
a substantial risk to the public health or injury to the public or the
environment, whether by itself or when used by Customer for its
intended purpose.
18
<PAGE>
(b) Seller represents that each Product furnished by Seller is safe for
normal use, is nontoxic, presents no abnormal hazards to persons or
the environment, and may be disposed of as normal refuse.
29. PRODUCT CHANGE/DISCONTINUANCE
(a) Seller is required to give Customer advance written notice within one
hundred twenty (120) days, or as soon as Seller has official release,
of any technological or specification change, software/firmware
revision, Product deletion or manufacturer discontinuance that would
significantly impact Product operation, interchangeability with
existing Product, appearance, warranty, life cycle or GTE
engineering/quality approvals of any Product. Seller shall, at the
time of notification, provide Customer with (i) a Product change
number; (ii) a description of such change; (iii) the reason for
change; (iv) a description of the impact of such change upon
reliability, Product specifications, or form, fit or function; (v)
proposed price impact (if any); and (vi) proposed effective date for
such change and recommended implementation schedule.
(b) If the parties fail to reach agreement on any such change in Product
to be made by Seller, then, in addition to all other rights and
remedies at law or in equity or otherwise, Customer shall, at no cost
or liability, have the right to terminate all pending purchase orders
for Product affected by such change.
(c) Seller may discontinue the availability of Product at any time, but
shall accept Orders for discontinued Product for a period of at least
ninety (90) days after the effective date of discontinuation. Orders
for discontinued Product shall only be accepted if delivery is
requested within one hundred and eighty (180) days of the effective
date of discontinuation.
(d) Seller agrees that if the required one hundred twenty (120) days'
prior written notice is not provided, Seller shall accept, at
Customer's option, a Product exchange or return for all Product in
Customer's inventory on the effective date of the change. Any Product
returned must be unused, undamaged and in the original carton and may
be returned, at Customer's option, for one hundred percent (100%)
credit of the price paid or an equal dollar value exchange for any
other Product offered under this Agreement.
30. INVENTORY RETURN
At no cost to Customer, Customer may return for refund or exchange, FOB
Customer's warehouse, Product of its selection with a total dollar value of
all returned or exchanged Product not to exceed [*] of the total purchase
price for all Product purchased by Customer from Seller for the previous
twelve (12) months excluding applicable taxes and freight charges. If
Product shipped in exchange is less in dollar value than the returned
Product, Seller shall issue Customer a credit for the difference in value
between Product returned and the exchanged Product. Dollar value of
returned or exchanged Product and overall purchases shall be calculated on
the basis of actual purchase prices charged by Seller to Customer. Customer
agrees to ship the returned Product and accept delivery of the exchanged
Product within thirty (30) days of the Seller's acknowledgement of
19
<PAGE>
Customer's intent to exchange Product hereunder. Seller agrees to issue
credit for returned Product within thirty (30) days of receipt equal to the
actual purchase price of the returned Product. Product returned must be in
the original carton and condition.
31. GOVERNMENT CONTRACT PROVISIONS
If an Order contains a notation that Product or Service is intended for use
under a government contract, it shall be subject to the then current
government contract provisions printed on or attached to such Order.
32. CENTURY COMPLIANCE
Seller agrees to comply with the provisions set forth in Exhibit I, CENTURY
COMPLIANCE.
33. STANDARDIZATION POLICIES, PROCEDURES AND TERMS
Seller agrees to comply with Customer's standardization policies,
procedures and terms set forth in Exhibit J.
34. NONWAIVER
Either party's failure to enforce any of the provisions of this Agreement
or any purchase order, or to exercise any option, shall not be construed as
a waiver of such provisions, rights, or options, or affect the validity of
this Agreement or any purchase order.
35. SEVERABILITY
If any of the provisions of this Agreement shall be invalid or
unenforceable, then such invalidity or unenforceability shall not
invalidate or render unenforceable the entire Agreement. The entire
Agreement shall be construed as if not containing the particular invalid or
unenforceable provision or provisions, and the rights and obligations of
Seller and Customer shall be construed and enforced accordingly.
36. SECTION HEADINGS
The headings of the sections are inserted for convenience only and are not
intended to affect the meaning or interpretation of this Agreement.
37. SURVIVAL OF OBLIGATIONS
The respective obligations of the parties under this Agreement that by
their nature would continue beyond the termination, cancellation or
expiration, shall survive any termination, cancellation or expiration,
including, but not limited to, obligations to indemnify, insure and
maintain confidentiality, and continued availability of Product support.
38. CHOICE OF LAW AND JURISDICTION
The construction, interpretation and performance of this Agreement shall be
governed by and construed in accordance with the laws of the state of Texas
without regard to any conflicts of law principles that would require the
application of the laws of any other
20
<PAGE>
jurisdiction and subject to the exclusive jurisdiction of its federal or
state courts in Dallas County, Texas. The application of the U.N.
Convention on Contracts for the International Sale of Goods is specifically
excluded from this Agreement.
39. ENTIRE AGREEMENT
This Agreement together with its exhibits constitutes the entire agreement
between the parties and cancels all contemporaneous or prior agreements,
whether written or oral, with respect to the subject matter of this
Agreement. Except as provided in Sections 11, PRECEDENCE OF DOCUMENTS, and
Section 8, PURCHASE ORDERS; CANCELLATION OF PURCHASE ORDERS; REVOCATION OF
ACKNOWLEDGEMENT, no modifications shall be made to this Agreement unless in
writing and signed by authorized representatives of the parties.
Each party represents that it has executed this Agreement through its authorized
representative:
GODIGITAL TELECOMMUNICATIONS GTE COMMUNICATION SYSTEMS
INC. CORPORATION
By: /s/ Frank I. Akers By: /s/ Rich E. Potter
Name: Frank I. Akers Name: Rich Potter
Title: President & CEO Title: Group Manager - Contract Management
Date: 16 April, 1998 Date: 4/23/98
21
<PAGE>
EXHIBIT A
GTE AFFILIATED ENTITIES
<PAGE>
EXHIBIT A
GTE AFFILIATED ENTITIES
[*]
A-1
<PAGE>
EXHIBIT B
PRODUCT AND SERVICE PRICES
<PAGE>
GoDigital Telecommunications Inc.
Exhibit B - GoDigital System Domestic Price List
Effective Date 11/23/97 (Revised to add new parts)
Section A: Product Prices
<TABLE>
<CAPTION>
-----------------------------------------------------
Unit List Suggested Contract Price per Volume (1)
- -------------------------------------------------------------------------------------------------
Note Item P/N Price [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Universal Configuration
- -------------------------------------------------------------------------------------------------
23" GDSL Shelf 990001 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
19" GDSL Shelf 990021 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new 19" GDSL-8 Shelf 990071 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
Alarm Card 990002 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new Alarm and Test Card 990072 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL2 CTU 990003 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL+ CTU 990053 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL+ ER CTU 990068 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL+ EC CTU 990053 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL2+ CTU 990004 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL-8 CTU 990073 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Integrated Configurations
- -------------------------------------------------------------------------------------------------
T1 LIU 990007 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL-6 ICU Card 990008 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Remote Terminals and Repairs
- -------------------------------------------------------------------------------------------------
GDSL2 RTU, Outdoor 990005 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL2 RTU, Door Unit 990009 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL2 RTU, Indoor 990013 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL+ RTU, Outdoor 990054 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL+ RTU, Door Unit 990055 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL+ RTU Indoor 990056 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL+ ER RTU Outdoor 990069 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL+ EC RTU Outdoor 990054 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL2+ RTU, Outdoor 990006 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL2+ RTU, Door Unit 990010 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL2+RTU, Indoor 990014 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL6 RTU, Outdoor 990020 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL6 RTU, Indoor 990016 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL-6 Doubler, Plugin 990062 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL-6 Doubler, Encap 990063 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL-8 RTU, w/stub 990075 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL-8 RTU, w/Terminal 990076 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL-8 Rptr, STR 990064 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL-8 Rptr, STR Encap 990065 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
new GDSL-8 Rptr, ADR2, stub 990067 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
GDSL-384 RTU, Outdoor 990019 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
GDSL-384 RTU, Indoor 990015 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
GDSL-24 RT Housing 990060 [*] [*] [*] [*] [*]
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Volume is a single order or a supply contract with scheduled releases.
28
<PAGE>
EXHIBIT C
PURCHASE FOR INTERNAL USE
1. SCOPE
If Customer issues an Order to Seller for Product or related Service for
its internal use, including use whereby Customer provides services to third
parties in the normal course of its business, then the terms of this
Exhibit apply.
2. LICENSE
The terms of this license, other than subsection (a) apply to all Software,
including Operating System Software.
(a) Grant of (other than Operating System) Software License - For Software
-------------------------------------------------------
other than Operating System Software, Seller grants to Customer, and
to its employees, agents, and contractors, a nonexclusive,
nontransferable (except as set forth in this Agreement), perpetual,
worldwide, fully-paid up license to Use the Software and all updates
and/or enhancements, including all media on which it may be recorded
or stored. Customer shall have the right to modify the Software and
shall have the right, title and interest in and to any such
modifications. Customer shall have all right to use any program or
Software derived from the Software and shall have the right to use the
Software in connection with such derived program or Software.
(b) Customer shall have the right, at no additional charge, to use the
Software by means of remote electronic access at locations other than
the locations at which the Software is stored.
(c) The term of the licenses granted shall be effective from the date of
delivery of the Software or as otherwise mutually agreed by the
parties and shall remain in effect until the Use of the Software, as
it may have been updated or enhanced by Seller from time to time, is
permanently discontinued by Customer, unless terminated as provided
herein or under the terms of an Order.
(d) If an Order specifies that Customer's Use of the Software is limited
to a designated site or a designated processor, this provision shall
apply. For purposes of this provision, the term "site" shall include
the term "processor," as applicable to the Order. Customer may
redesignate the site at which the Software will be used, and shall
notify Seller of the redesignated site and the effective date of the
redesignation. Customer shall have the right to concurrently Use
Software at a second site without payment of an additional amount to
Seller for a period not to exceed three (3) months for the purpose of
redesignating the assigned using site. For a license granted under
this Agreement that limits Use to a designated site, such designated
site may be transferred: (i) to a backup site if the processor at the
designated site is inoperative due to malfunction, to performance of
preventative maintenance, to engineering changes or to changes in
features or model, until such processor is restored to operative
status and processing of the data already entered in the processor at
the backup site has been completed or (ii) to one other site for
assembly or compilation of the Software if the specifications of the
processor at the
C-1
<PAGE>
designated site are such that the Software cannot be assembled or
compiled on such processor.
(e) The type of license (standalone, concurrent, site, enterprise, etc.)
subject to the grant hereunder shall be specified in an Order or
schedule to this Agreement, including the applicable fee.
3. WARRANTY - PRODUCT HARDWARE
(a) Seller warrants to Customer that upon delivery of the Product to
Customer all right, title and interest in Product Hardware will pass
to Customer free of all liens, imperfections in title, claims,
charges, restrictions, or other encumbrances. Seller warrants the
Product Hardware except operating systems Software furnished shall be
new, merchantable, free from defects in material and workmanship, fit
for the ordinary purpose for which the Product Hardware is used, shall
not infringe on any U.S. patent, and for the period of two (2) years
from the date of shipment by Seller to Customer or to Customer's
customer, shall conform to Seller's advertised and published
specifications in effect at the time the warranty began. Should
Seller's Product not conform to the foregoing warranties, Seller shall
repair or replace the defective or nonconforming Product Hardware and
reimburse Customer for all direct expenses incurred by Customer
because the Product is defective or nonconforming. All warranties
shall survive inspection, acceptance and payment.
(b) During the warranty period, defective Product shall be either repaired
on-site by Seller or returned to Seller for repair or replacement at
no charge or cost to Customer Unless otherwise agreed by Seller and
Customer, for Product that are returned to Seller for repair, Seller
shall complete repairs and return repaired Product, or ship
replacement Product, within twenty (20) days of receipt of defective
Product at Seller's designated repair location. Customer shall bear
the risk of loss or damage until Product is placed in the possession
of the carrier. Customer shall bear the cost of transportation
charges for shipment to Seller of Product to be repaired or replaced.
For return shipments from Seller to Customer, Seller shall bear the
risk of loss or damage during transit and shall prepay and bear the
cost of transportation charges for shipment of Product that has been
repaired or replaced. If Product returned is not defective, Seller
shall promptly advise Customer in writing of this determination; in
such cases, Seller shall return Product to Customer at Customer's
expense and risk in its "as received" condition. If Product returned
is not in warranty, Seller shall promptly advise Customer in writing
of this determination; in such cases, Seller shall repair Product if
so instructed by Customer in writing and charge Customer for labor,
parts and shipping in accordance with Section 6, REPAIRS NOT COVERED
UNDER WARRANTY, of this Exhibit.
(c) During the warranty period, if Customer's technical personnel attempt
to determine whether or not Seller's Product is the cause of service
interruption and cannot identify and resolve the problem causing the
interruption after communicating with Seller's technical personnel via
telephone or other suitable means, and the service interruption still
exists, then Customer may request, and Seller shall begin on-site
repairs as soon as possible, but in no event later than one (1)
business day after receiving Customer's request. Such on-site repairs
by Seller shall be at no charge
C-2
<PAGE>
to Customer. Seller shall have the option to replace Product rather
than to perform on-site repair.
(d) During the warranty period, if the service interruption still exists
after compliance with (c) above, and the service interruption is
caused by either Seller's defective Product and/or Seller's Product
that does not conform to Seller's written specifications, and Seller
has been given a reasonable time frame, as determined by Customer, to
correct the service interruption, Customer may return Product to
Seller and receive a refund or credit, at Customer's option, for the
total purchase price.
(e) Any replacement, repair, modification, installation or other service
performed by Seller shall be warranted, commencing with the date upon
which repaired Product is returned to Customer, for the remainder of
the unexpired period of the warranty or ninety (90) days whichever is
greater.
(f) The warranties do not extend to Product to the extent that such
Product has been subjected to misuse, neglect or abuse not caused by
Seller or been used in violation of the approved written instructions
furnished to Customer prior to the delivery of the Product, and such
action is the cause of the damage or malfunction.
4. WARRANTY - SOFTWARE
(a) Seller warrants that Customer shall have quiet enjoyment of the
Software and that the Software and Customer's Use, shall be free from
claims of infringement, misuse or misappropriation of any intellectual
property right during the term of Customer's license to Use the
Software. As to Software which Seller does not have title, Seller
warrants that it has rights in the Software sufficient to permit the
license of the Software to Customer and that Seller has full right,
power and authority to license the Software and other rights granted
hereunder to Customer.
(b) Seller also warrants that the media containing the Software will be
free from defects in material and workmanship and that all related
services provided by Seller shall be rendered by qualified personnel
who will perform the tasks assigned consistent with good professional
practice and the state of the art involved.
(c) Seller also warrants that there are no copy protection or similar
mechanisms within the Software which will, either now or in the
future, interfere with the grants made in this Agreement.
(d) Where Software is intended to be used in transaction processing or in
the public switched network, Seller represents that nothing in the
Software precludes Customer from integrating a network management
solution (including transaction processing and network monitoring)
with the Software.
(e) For the period of two (2) years, beginning with the effective date of
license of the Software, Seller warrants that the Software will
perform in accordance with the Specifications for the Software,
provided the Software is operated in accordance with the terms of this
Agreement, including any Order. Seller assumes no product liability
for the Software if it is installed on a platform not supported by
Seller. If within ninety (90) days subsequent to the expiration of the
warranty period Seller
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has not repaired the Software to perform in accordance with the
Specifications for any exception communicated in writing by Customer
to Seller during the warranty period, Customer may terminate this
Agreement or Order and Seller shall refund to Customer the amount paid
to it for the nonconforming Software.
(f) After the first year, Seller warrants that if any portion of the
Software is or becomes unusable, totally or in any respect, Seller
will correct errors, defects and nonconformities and restore the
Software to error-free conforming condition without additional charge
to Customer.
5. CONTINUING AVAILABILITY OF SERVICE AND PARTS
(a) Seller shall, if requested by Customer, provide Customer with
maintenance service, repair service and parts for Product Hardware and
Software, for a period of five (5) years after Product Hardware and
Software have been discontinued by the manufacturer. If Seller is
unable to supply such services and/or parts or Seller is unable to
obtain an alternative source to provide such services and/or parts for
Customer, then such inability shall be considered noncompliance with
this clause and Seller shall, without obligation or charge to
Customer, provide Customer with drawings or other documents required
to either manufacture or buy such parts and the technical information
or any other rights necessary for Customer to manufacture or obtain
such parts from other sources, together with a nonexclusive license to
manufacture or purchase such parts for the purpose of supporting
Customer's customer base.
(b) The technical information shall include, by example and not by way of
limitation:
(1) Manufacturing drawings and specifications of materials and parts
comprising the replacement and repair parts and components;
(2) Manufacturing drawings and specifications covering special
tooling and operation;
(3) A detailed list of all commercially available parts and
components purchased by Seller on the open market, disclosing the
part number, name and location of the supplier and price lists
for the purchase; and
(4) One complete copy of the source code used in the preparation of
any software licensed or otherwise acquired by Customer from
Seller, provided however, that such source code shall remain the
property of Seller and shall be separately licensed to Customer
for Customer's possession and use exclusively for maintenance of
Customer's and Customer's customers' Product.
(c) Notwithstanding the above, Seller shall not be under any obligation to
provide source codes for any licensed program for which Seller either
(i) does not own the source code or (ii) does not have rights to
disclose such source code. In either event, Seller shall disclose its
licensor or owner of said source code.
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(d) Certain Product application software is subject to a licensing
agreement and is sublicensed to Customer or end users. In the event
of the inability to provide updates or continuing support of the
application software at a reasonable cost, Seller shall assist
Customer in locating an alternative source.
6. REPAIRS NOT COVERED UNDER WARRANTY
(a) Repair charges for Product Hardware out of warranty shall be as
specified in Attachment A and shall not be changed by Seller without
written notice to Customer thirty (30) days in advance of such change,
which must be mutually agreed upon by both parties.
(b) Defective Product Hardware out of warranty may be returned to Seller
for repair or replacement. Unless otherwise agreed by Seller and
Customer, Seller shall complete repairs and ship repaired Product
Hardware, or at Customer's option, replacement Product, within twenty
(20) days of receipt of defective Product Hardware at Seller's
designated repair location. Customer shall bear the risk of loss or
damage of Product and shall prepay and bear the cost of transportation
charges for shipment to Seller of Product to be repaired or replaced.
For return shipments from Seller to Customer, Seller shall bear the
risk of loss or damage during transit and shall prepay and bear the
cost of transportation charges for shipment of Product that has been
repaired or replaced. If Seller determines Product returned is not
defective, Seller shall promptly advise Customer in writing of this
determination; in such cases, Seller shall return Product to Customer
in its "as received" condition. If Seller determines that a returned
Product is irreparable, Seller shall promptly notify Customer.
(c) Any replacement, repair, modification, installation or other service
performed by Seller shall be warranted, commencing with the date upon
which repaired Product is returned to Customer, for a period of ninety
(90) days.
7. PRODUCT REPAIR RETURN
(a) Customer will contact Seller to receive a Return Material
Authorization (RMA) number, and may provide to Seller an Equipment
Repair Order (ERO) number and/or a purchase order pack list number
when returning Product Hardware to Seller for repair.
(b) Customer shall furnish the following information with Product returned
to Seller for repairs:
(1) Customer's name and complete address;
(2) Name(s) and telephone number(s) of Customer's employee(s) to
contact if there are questions about Product to be repaired;
(3) "Ship to" address for return of repaired Product, if different
from (1);
(4) A complete list of Product returned;
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(5) The nature of the defect or failure, if known; and
(6) Product warranty status.
(7) All Product shipped to Seller for repair must be returned in the
original shipping packaging or the equivalent in order to avoid
damage during shipping.
(c) All Product shipped to Seller for repair shall have repair tags
attached that are supplied by Seller free of charge or by Customer,
which shall contain the above stated information.
(d) Product repaired by Seller shall have the repair completion date
stenciled or otherwise identified in a permanent manner in a readily
visible location on Product and the repaired Product shall be returned
with a tag or other papers describing the repairs that have been made.
If Seller maintains statistical records for repaired Product, the
information shall be made available to Customer upon request.
8. EMERGENCY REPLACEMENT SERVICE
(a) If a failure that causes a customer service impairment to Customer,
which failure is caused by Product or Software furnished under this
Agreement, Seller agrees to ship replacement Product or Software by
the most expedient means available, within twenty-four (24) hours of
written notification by Customer. The charge for this expedite
service shall be as follows:
(1) If the defective Product or Software is in warranty or is covered
under a maintenance agreement, Seller shall ship new replacement
Product at no charge. If the defective Product or Software is not
returned to Seller within sixty (60) days from the date of
shipment of the new replacement Product or Software, Seller may
invoice Customer for such new replacement Product or Software at
Seller's then current price listed in Exhibit B.
(2) If the defective Product or Software is out of warranty and is
not covered under a maintenance agreement, Seller shall ship new
replacement Product or Software and may invoice Customer at
Seller's current price listed in Exhibit B.
(b) In order to schedule shipment of replacement Product, Customer may
telephone Seller. This service shall be available from Seller seven
(7) days a week, twenty-four (24) hours a day. As specified in
Attachment B, Customer may contact Seller at the telephone numbers
listed during normal working hours and after normal working hours.
9. TECHNICAL SUPPORT FOR PRODUCT
(a) Seller shall make available to Customer telephone technical support
twenty-four (24) hours a day, seven (7) days a week. There shall be
no charge for such technical support during the warranty period or if
Product is covered by Seller's maintenance plan. Technical support
and services shall include, but not be limited to, the provision of
the following services:
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(1) Distribution of a master Seller's escalation matrix and ongoing
updates. This matrix must include names, titles and telephone
numbers of individuals within Seller's technical support
organization for problem response escalation by Customer.
(2) Distribution, to personnel designated by Customer, of a monthly
activity summary report listing the number of times Customer's
personnel contacted Seller's technical support throughout the
month, with the date and time of contact, disposition of the call
and the source of any identified problems.
(3) Assistance in the diagnosis and resolution of hardware and
software problems and in the analysis of maintenance indices.
Also assistance in expediting priority replacement parts or
systems required on an emergency basis.
(4) Assistance in the support of the initial implementation of newly
developed Product and during installation of significant Product
updates and/or changes.
(5) Support in the preparation and analysis of failure and
discrepancy reports, as required.
(6) Cooperation in providing guidelines and documentation to ensure
the necessary tracking and resolution of engineering,
installation and service complaints.
(b) When Customer contacts Seller for technical support, Seller must
provide caller with a control number if resolution cannot be completed
over the telephone. Seller shall provide the caller a verbal status,
disposition or resolution of the reported problem within two (2) hours
of notification. At the discretion of Customer, the problem may be
escalated in accordance with Seller's escalation matrix.
(c) Seller's technical support shall use best efforts to meet the
following emergency resolution intervals:
(1) Total Outage - 2 Hours
Product has stopped
performing the function for
which it was purchased
(providing no service).
(2) Safety Hazard - 2 Hours
Product has a defect
that may pose a safety hazard
to employees or customers.
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(3) Partial Outage - 4 Hours
Product is providing
limited service for which it
was purchased.
(4) Loss of Redundancy - 24 Hours
Any redundant part of the
Product is operating
in a simplex mode.
(5) Customer-Affecting Trouble - 72 Hours
Product is providing
the service for which it was
purchased; however, at times
that service deteriorates.
10. ON-SITE ASSISTANCE
(a) Prior to any on-site assistance, the solution to specific problems
shall be discussed and resolved, whenever possible, by telephone, as
outlined in Section 10, TECHNICAL SUPPORT FOR PRODUCT, of this
Exhibit. If requested by Customer, Seller agrees to furnish on-site
assistance in a time frame as mutually agreed by the parties and in
accordance with Seller's prevailing rates, a current copy of which is
included as Attachment C. If Product deficiency is the fault of
Seller, than on-site assistance shall be at no charge.
(b) In cases of out-of service emergencies, Customer-affecting failures
and/or when other critical factors apply, Seller agrees to provide on-
site assistance within four (4) hours of Customer request, within the
limits of available transportation.
(c) When requested, Seller shall provide a qualified individual familiar
with Product, at no expense, for a period of one (1) day at the first
installation in each Customer site of newly developed Product or
Product enhancement, updates or changes. Total period shall not to
exceed thirty (30) days per year.
(d) Seller shall provide, at no additional charge: (i) such assistance and
advice, as may be reasonably requested by Customer necessary to assist
in the use of the Product and (ii) such training as it normally
provides without charge to users of the Product.
11. PRODUCT DOCUMENTATION
(a) During the term of this Agreement, Seller shall support Product by
maintaining and providing, at no charge, documentation, preferably in
a machine readable format, on the following:
(1) Administration;
(2) Features and technical specifications;
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(3) Installation and testing;
(4) Operations, provisioning and translations;
(5) Test and acceptance;
(6) Maintenance and diagnostics;
(7) Other mutually agreed to documentation deemed necessary by
Customer to support the maintenance and operation of Product.
(b) Seller shall maintain a record of Product documentation that has been
distributed among Customer's personnel and provide updates, at no
charge, in accordance with that record.
(c) Seller hereby grants to Customer a fully paid license, at no
additional charge, for the term of this Agreement, to copy or
otherwise reproduce all or portions of Seller's Product documentation.
Such reproduction shall be for Customer's own use and Customer shall
protect the confidentiality of such information.
12. SOURCE CODE
In the event that Seller becomes insolvent, ceases to carry on business on
a regular basis or fails to perform its obligations hereunder, and during a
period of thirty (30) days thereafter Seller (or some other financially and
technically responsible successor in interest acceptable to Customer which
assumes in writing Seller's obligations hereunder) does not continue to
perform such obligations, then (i) Seller or others acting on behalf of
Seller, shall furnish to Customer all source programs, technical
documentation and other information (SOFTWARE Source Materials) required
for maintenance, modification or correction of the most current version of
the SOFTWARE provided to Customer and (ii) Seller will be deemed to have
granted to Customer a perpetual right to use the SOFTWARE and the SOFTWARE
Source Materials under the terms and conditions of this Agreement or Order.
Should Customer's Use of the SOFTWARE Source Materials involve use or
copying of copyrighted material or the practice of any invention covered by
a patent, Seller shall not assert such copyright or patent against
Customer.
13. SUBCONTRACTING
Customer reserves the right to enlist contractors for engineering,
installation or maintenance services with respect to Seller's Product.
C-9
<PAGE>
ATTACHMENT A
REPAIR CHARGES
Out Of Warranty Repair [*] plus parts.
No Trouble Found For "In Warranty Repairs" [*].
C-10
<PAGE>
ATTACHMENT B
SELLER'S HOURS/TELEPHONE CONTACT
8:00 am to 6:00 pm Pacific Time (With voice mail backup and next morning
response)
Telephone 800-297-2424 or 510-226-8289
Fax 510-226-8785
Internet: www.goditigal.com
C-11
<PAGE>
ATTACHMENT C
ON-SITE ASSISTANCE RATE
Technical Support
Field Support [*] plus travel and lodging
C-12
<PAGE>
EXHIBIT D
PURCHASE FOR RESALE
1. SCOPE
If Customer issues an Order for Product or related Service for resale to
other customers, the terms and conditions of this Exhibit apply.
2. SOFTWARE LICENSE
Seller shall license to Customer's customers under the following terms:
(a) Except for Operating System Software, Seller shall grant to Customer's
customers, and for its employees, agents, and contractors, a
nonexclusive, perpetual, fully paid-up license to Use the Software and
all updates and/or enhancements, including all media on which it may
be recorded or stored. Customer's customers may be required to execute
a separate software license agreement furnished by the software
provider. If so, the terms and conditions of said separate agreement
take precedence over the terms and conditions of this software
section.
(b) The price set forth in an Order under this Agreement or in Exhibit B
includes the fee for the Software furnished and the license obtained
for Customer's customers.
3. PRODUCT WARRANTIES AND CLAIMS
(a) Seller warrants that it has or will pass title, free of all liens and
encumbrances, to all Product that are sold or leased to Customer and
to Customer's customers.
(b) Seller will provide a one (1) year warranty to Customer customers from
the time of customer's acceptance. Such warranty will be consistent
with Exhibit C, Section 3 and Section 4.
4. TRADEMARK LICENSE
Seller grants to Customer the nonexclusive right to use Seller's trade
names and trademarks in marketing Seller's Product. If Seller's trade
names and trademarks are registered in the United States, Customer agrees
to designate the Product properly and depict the marks accurately.
5. PRODUCT LITERATURE
(a) Seller agrees to provide Customer with reasonable amounts of Product
literature, at no additional charge, to properly support Seller's
Product.
(b) Seller hereby grants to Customer a fully paid license, at no
additional charge, for the term of this Agreement, to copy or
otherwise reproduce all or portions of Seller's Product brochures, or
to incorporate portions of Seller copyrighted material in Product
brochures or advertising material composed by Customer,
D-1
<PAGE>
provided that Customer shall submit such material composed by Customer
that incorporates such Seller copyrighted material for Seller's prior
approval, which approval shall not be unreasonably withheld. Such
reproduction shall not apply to proprietary and/or confidential
information and shall be subject to all applicable copyright laws.
6. COOPERATIVE ADVERTISING
During the term of this Agreement, Seller shall work in good faith with
Customer to develop a mutually agreed upon program of cooperative
advertising and/or joint promotion.
7. SUPPORT SERVICES
(a) If Customer itself provides warranty and post warranty support
Services to its customers, then Seller shall continue to provide at
least those Product support Services described in Sections 3., 4., 5.,
6., 7., 8., 9., and 12 of Exhibit C, Purchase for Internal Use, with
respect to resale products. Such Services of Seller shall be in
addition to any warranty related Services available to Customer's
customers directly from Seller under Section 3(b) of this Exhibit, and
shall facilitate Customer's ability to provide support to its
customers. Seller's obligation to provide such Services, as
distinguished from its service obligation under the warranty provided
for in Section 3(b), shall extend only to Customer.
(b) If such an end user warranty is not provided by Seller, such Seller
support Services described in Exhibit C, Purchase for Internal Use,
shall, nevertheless, be provided to Customer to facilitate Customer's
ability to provide customer support.
(c) Such warranty and post warranty support Services may include, but is
not limited to, the following:
(1) Telephone technical support/help desk for Product;
(2) Product repair (to include parts);
(3) Coordination of warranty related Product returns to Seller;
(4) Providing extended support beyond Product discontinuance; and
(5) Product installation
(d) Any charges to Customer's customers for support or other Services sold
by Customer to Customer's customers shall be determined by Customer in
its sole discretion.
D-2
<PAGE>
EXHIBIT E
SIGNATURE PAGE FOR ATTACHMENTS
The following Attachments listed below contain additional provisions which if
selected (by each party initialing the appropriate space) shall be made a part
of this Agreement.
XX EDI TRADING AGREEMENT
- ------
______ BAR CODE PROGRAM
XX TRAINING
- ------
By signing below, the parties agree to incorporate into this Agreement the
selected Attachments.
GODIGITAL TELECOMMUNICATIONS GTE COMMUNICATION SYSTEMS
INC. CORPORATION
By: /s/ Frank I. Akers By: /s/ Rich E. Potter
Name: Frank I. Akers Name: Rich Potter
Title: President & CEO Title: Group Manager -
Contract Management
Date: 16 April, 1998 Date: 4/23/98
<PAGE>
ATTACHMENT 1
EDI TRADING AGREEMENT
1. At CUSTOMER's option, the parties agree to develop an Electronic Data
Interchange (EDI) for the electronic communication of purchase orders,
acknowledgements, subsequent invoicing or other data (DOCUMENTS). All
exchanged DOCUMENTS shall be channeled through one or more Third Party
Networks (TPNs) by one party to the other. Each party will arrange and pay
its own expenses for the transmission of electronic DOCUMENTS. Either
party may change its TPNs with thirty (30) days' prior written notice to
the other. Each party agrees to provide the other access codes necessary
to establish connections. Each party shall adopt reasonable security
procedures to ensure that (i) DOCUMENTS transmitted electronically are
authorized; (ii) its business records and data are protected from improper
use; and (iii) the security of access codes and electronic identification
codes is maintained. Prior to the performance of any new transmission of
DOCUMENTS under this Agreement, SELLER agrees to review and then perform,
to the best of its capabilities, in accordance with the instructions
provided in CUSTOMER's Implementation Guidelines. As determined by
CUSTOMER and SELLER, there may be a period during which the parties test
and resolve any operational issues.
2. At the option of the sending party and if the sending party has the
capacity to receive acknowledgements electronically, then, upon receipt of
a DOCUMENT, the receiving party shall promptly issue an acknowledgement to
the sending party solely for the purpose of acknowledging receipt of the
DOCUMENT. Otherwise, the receiving party shall provide written
acknowledgements to the sending party. If any transmitted DOCUMENT is
received in an unintelligible or garbled form, the receiving party shall
promptly notify the sending party (if identifiable from the received
DOCUMENT) in a reasonable manner. In the absence of such notice, the
sending party's records of contents of such DOCUMENT shall control.
3. For Electronic Funds Transfer (EFT), CUSTOMER agrees to electronically
transfer funds, as appropriate, to the financial institution and bank
account number shown in Attachment A to this Exhibit D, as the same may be
modified from time to time by SELLER upon notice to CUSTOMER within
fourteen (14) days of the effective date of such modification. CUSTOMER
will make payments in accordance with the National Automated Clearing House
Associations (NACHA) Corporation Trading Rules. CUSTOMER's process is
governed by and in accordance with Article 4A of the Uniform Commercial
Code. CUSTOMER will not be responsible for any loss that may arise by
reason of error, mistake or fraud regarding SELLER's information provided
in Attachment A. Further, CUSTOMER will be responsible for loss of data
only when it is due to the sole negligence of CUSTOMER or its originating
bank.
X-1
<PAGE>
4. The parties agree that a DOCUMENT properly transmitted electronically,
including a party's identification, shall be the same as a signed writing,
created in the ordinary course of the sending party's business, at or near
the time of the events recorded, and transmitted by a person with knowledge
of the events. When the DOCUMENT is printed from the electronic records,
the DOCUMENT shall be considered an original document. Neither party shall
contest the validity of the DOCUMENT on the grounds that it fails to meet
the common law statute of frauds or the statute of frauds found in Section
2-201 of the Uniform Commercial Code, that it fails to meet the business
records exception to the hearsay rule or that it fails the best evidence
rule because it is not an original document.
5. For matters pertaining to the technical administration of EDI transactions,
the parties shall contact the individuals listed below:
CUSTOMER: SELLER:
GTE Supply
5615 High Point Drive
P. O. Box 169001
Irving, Texas 75016-9001
Attention: Section Manager-
Application Development-Information Technology
HQA03P03
X-2
<PAGE>
ATTACHMENT A
EFT INFORMATION
SELLER'S COMPANY
----------------
Name: GoDigital Telecommunications Inc.
---------------------------------
Address: 41305 Albrae Street
---------------------
Fremont, CA 94538
---------------------
_____________________
_____________________
_____________________
EFT Contact Name: Gary Lewis
---------------------
EFT Contact Telephone No: 510-226-8289
---------------------
EFT Payments extended by: Five (5) days
(EFT payment days will be added to existing payment due dates to neutralize
check float.)
Remittance Method (Please check one of the following):
___ EDI ANSI 820 sent to SELLER'S bank with payment
___ EDI ANSI 820 sent to SELLER'S company's EDI mailbox
___ Fax remittance to (___) ____-_______
X Paper remittance sent to existing remittance address
---
SELLER'S FINANCIAL INSTITUTION
------------------------------
Bank Name: Silicon Valley Bank
-----------------------
Address: 3003 Tasman Drive
-----------------------
Santa Clara, CA 95054
-----------------------
_______________________
_______________________
Bank Calling Office: _______________________
Bank Contact Telephone No: 408-654-7380
-----------------------
Bank Transit Routing No: 121140399
-----------------------
<PAGE>
EFT INFORMATION
SELLER's EFT Bank Account No
to Receive Payments: 3300018536
-----------------------------
Bank Account Name: GPDigitall Telecommunications
-----------------------------
ACH Format SELLER's Bank
Accepts (CTX or CCD+): CCD+
-----------------------------
Combine EFT Remittance
with ACH: Yes
---------------------(Yes/No)
SELLER's Financial Institution should be consulted since EFT transmission
formats are influenced by SELLER's bank capability to receive electronic
payments.
The above EFT payment instructions are authorized, and the terms and condition
stated in this Agreement (Number C981105PC00I) are accepted by:
------------
/s/ Gary Lewis 4/16/98
------------------------- -------------------------
Signature Date
Gary Lewis Corporate Controller
------------------------- -------------------------
Printed Name Company Title
<PAGE>
ATTACHMENT 2
TRAINING TERMS AND STANDARDS
1. SELLER shall provide qualified instructors and the necessary instruction
material, as mutually agreed upon, to train CUSTOMER's personnel in the
marketing, installation, database preparation and administration,
operation, and maintenance of PRODUCT furnished in a cost effective manner.
2. SELLER shall also establish and/or maintain curricula to include, but not
limited to, the following:
1. PRODUCT overview and introduction (e.g., features, functions,
benefits, nomenclature, architecture);
2. Engineering, installation and maintenance;
3. Basic operation and administration;
4. Sizing, configuration and PRODUCT ordering;
5. Planning and budgetary guidelines; and
6. Other subjects deemed necessary by CUSTOMER to support the PRODUCT.
3. SELLER shall change, modify, update and/or add training programs as new
PRODUCT features/releases are made available.
4. SELLER shall maintain a technical training facility and provide CUSTOMER a
course listing of all training courses available to CUSTOMER, notify
CUSTOMER of any curriculum changes and identify those courses that are
critical in the support of the PRODUCT. Training shall be offered on a
regular basis and SELLER shall attempt to meet any reasonable request for
additional or unscheduled training required by CUSTOMER. Additional courses
may be scheduled with sixty (60) days prior written notice.
5. SELLER shall offer to CUSTOMER one (1) training class at no additional
cost, for every [*] purchased/licensed by CUSTOMER from SELLER during each
year of this Agreement. CUSTOMER shall bear the cost of transportation,
meals, lodging or any other incidental expenses of CUSTOMER personnel to,
from and during training. All charges for training, over and above that
offered at no charge, shall be as shown in Attachment I. Prices shall not
be changed by SELLER without written notice to CUSTOMER sixty (60) days in
advance of such change, and must be mutually agreed upon by both parties.
<PAGE>
6. SELLER agrees to extend an additional [*] discount on SELLER'S PRODUCT
purchased by CUSTOMER for the sole purpose of training CUSTOMER employees
on the use of the PRODUCT.
7. SELLER shall, at no charge to CUSTOMER, provide copies of all training
materials to the CUSTOMER's training department for review of quality and
applicability to CUSTOMER's training requirements. SELLER shall provide a
plan for the correction of deficiencies identified in such review.
8. If requested by CUSTOMER, SELLER shall, at a mutually agreeable cost,
conduct "Train the Trainer" classes on sales, installation, maintenance,
and engineering of SELLER's PRODUCT for CUSTOMER instructors, at a mutually
agreed upon location.
9. SELLER shall provide, upon CUSTOMER request, one master (camera ready) copy
of any sales, installation, maintenance, and engineering courseware
required for CUSTOMER's instructors to train on SELLER's PRODUCT. The
courseware shall contain an instructor guide, student materials and any
additional aides required to present the course. These master copy
materials shall be provided at no cost. SELLER shall provide CUSTOMER with
reproduction rights for these materials. These materials shall not be
distributed to any non CUSTOMER organization.
10. CUSTOMER may audit SELLER conducted training to ascertain if the materials
are presented in a quality manner. The costs of such audits shall be at no
charge. Any recommendations offered by CUSTOMER shall be incorporated for
future training classes in a timely manner.
11. SELLER certified CUSTOMER instructors shall be afforded the same
consideration as SELLER's instructors in regard to course modifications and
updates. SELLER shall assure that CUSTOMER's instructors have the same
updated material as SELLER's instructors.
12. SELLER shall provide CUSTOMER's instructors, at no cost,
technical/operational support in the form of reasonable telephone
consulting assistance relating to the content of courseware.
13. SELLER shall provide, at the actual cost of reproduction, copies of all
training materials required to support CUSTOMER's embedded base of PRODUCT
that SELLER may have declared as discontinued or obsolete.
$100.00 per hour plus travel and lodging
<PAGE>
ATTACHMENT I
TRAINING RATES
[*] plus travel and lodging
<PAGE>
EXHIBIT F
SUPPLIER WBE/MBE/SDV EXPENDITURES REPORT
Instructions
1. Please read the instructions below thoroughly and then provide all
information requested. All dollar values should be reported in thousands
of dollars ($000). Should you have any questions, please call 972/751-4473
(Bernadette Threets).
Refer to Attachment F-1 to identify the fields in these instructions.
2. Supplier Information (Header)
(a) Provide a complete supplier name and address for your company.
(b) Provide the general type of products/services provided by your company
and/or, if applicable, the particular division.
(c) Provide the name and phone number of the person within your company
responsible for the reporting information who may be contacted should
there be questions about the information.
3. State Reported
(a) Identify each state to which product is shipped or services are
performed. A separate form should be used for each state. If the
information cannot be provided by state, so indicate by placing "All"
in the blank provided.
4. Service/Product Type
(a) The general categories being reported include the following:
(1) "Construction" outside plant/cellular site construction and
maintenance general building
construction/civil work/engineering
architectural services/installation.
(2) "Commodities" cable/wire/fiber optics tools outside plant
material/equipment special needs (i.e., TDD)
telecommunications equipment/products
radio/transmission equipment/products power
equipment/products test equipment building
materials & hardware computer
hardware/software vehicle/transportation
products non-telecommunication
equipment/products office supplies/equipment
(i.e., paper, paper products, ink & printing
supplies) promotional items/signs.
F-1
<PAGE>
(3) "Other Services" equipment rehab or assembly equipment
repair/maintenance/installation
computer/office equipment maintenance
equipment leasing & rental vehicle
services general building maintenance
printing and graphics services telephone
booth installation & maintenance
transportation-ground/sea/rail/air.
(4) "Services Professional" advertising/marketing
architectural/interior design
catering/vending events collection
agencies/centers consulting services
temporary labor services legal services
other professional services
training/lectures/education engineering
services health care ravel services
(5) "Major Equipment" switching/central office
telecommunications network equipment
radio/cellular network
(6) "Other" Any product/service that do not fall
into the categories identified above.
For each general category above, provide "MBE/WBE/SDV expenditures"
for each ethnic classification.
Provide a brief description of the "Other" product/service category.
Refer to Attachment F-2; As with Attachment F-1, please use a separate form for
each state. The information provided on this sheet should match the information
provided for the corresponding state on Attachment F-1.
F-2
<PAGE>
ATTACHMENT F-1
Supplier WBE/MBE/SDV Expenditures Report
For Goods/Services Purchased by GTE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Supplier: Division/Product:
- -------------------------------------------------------------------------------------------------------------------------------
Address: Contact Name:
- -------------------------------------------------------------------------------------------------------------------------------
City, State, Zip Code: Contact Phone #:
===============================================================================================================================
STATE REPORTED Construction Commodities Other Services Professional Major Equipment Other** Totals
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
African American Male
- -------------------------------------------------------------------------------------------------------------------------------
African American Female
- -------------------------------------------------------------------------------------------------------------------------------
Asian American Male
- -------------------------------------------------------------------------------------------------------------------------------
Asian American Female
- -------------------------------------------------------------------------------------------------------------------------------
Hispanic American Male
- -------------------------------------------------------------------------------------------------------------------------------
Hispanic American Female
- -------------------------------------------------------------------------------------------------------------------------------
Native American Male
- -------------------------------------------------------------------------------------------------------------------------------
Native American Female
- -------------------------------------------------------------------------------------------------------------------------------
Non-Minority Female (WBE)
- -------------------------------------------------------------------------------------------------------------------------------
Service Disabled Veteran
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL
===============================================================================================================================
</TABLE>
Quarter and Year Reported:______________________________
WBE/MBE/SDV Expenditures Report should be completed on a quarterly basis and
returned to GTE as indicated below:
1/st/ Qtr due May 15/th/ 3/rd/ Qtr due Oct 15/th/
2/nd/ Qtr due July 15/th/ 4/th/ Qtr due Jan 15/th/
Reports should be returned on or before the due date to the following
address: GTE Supply
PO Box 169001
Irving, TX 75016-9001
MC: HQA06R01
* Each state should be reported on a separate form. Please provide specific
subcontractor information on Attachment F-2.
** Describe "Other":____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The information provided above is based solely on WBE/MBE/SDV goods and/or
services specifically purchased by GTE.
_______________________________________________
(Signature of Authorized Company Representative)
ATTACHMENT F-2
Supplier WBE/MBE/SDV Expenditure Report
F-3
<PAGE>
Supplier Name:_____________________________________
State Reported:___________________________
Qtr. & Yr. Reported:______________________
Instructions:
Please provide information detailing the name, address, & contact of the
minority firms reported on Attachment F-1. List the *ethnic categories (African
American Male, Asian American Female, etc.) & the **type of service provided
(Construction, Commodities, Equipment, etc.) If additional space is needed,
please copy this form for multiple page use or call 972/751-4473 for extra
copies.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
1 Subcontract's Company Name City & State Contact Name Telephone $
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------
* Ethnicity & Gender ** Type of Service Provided $$ Paid this Quarter Cumulative $$ YTD
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2 Subcontract's Company Name City & State Contact Name Telephone $
- --------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
* Ethnicity & Gender ** Type of Service Provided $$ Paid this Quarter Cumulative $$ YTD
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3 Subcontract's Company Name City & State Contact Name Telephone $
- --------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
* Ethnicity & Gender ** Type of Service Provided $$ Paid this Quarter Cumulative $$ YTD
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4 Subcontract's Company Name City & State Contact Name Telephone $
- --------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
* Ethnicity & Gender ** Type of Service Provided $$ Paid this Quarter Cumulative $$ YTD
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5 Subcontract's Company Name City & State Contact Name Telephone $
- --------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
* Ethnicity & Gender ** Type of Service Provided $$ Paid this Quarter Cumulative $$ YTD
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
</TABLE>
F-4
<PAGE>
EXHIBIT G
SHIPPING AND CARRIER ROUTING INSTRUCTION
<PAGE>
EXHIBIT G
GTE SHIPPING AND CARRIER ROUTING INSTRUCTION
(APRIL, 1997)
<PAGE>
EXHIBIT G
GTE SHIPPING AND CARRIER ROUTING INSTRUCTION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
1. PURPOSE 1
2. NOTICE 1
3. BILL OF LADING 1
4. PALLETIZATION 2
5. PACKING LIST 2
6. PACKAGE LABELING/INSTRUCTION 3
7. EXTERNAL PACKAGING 3
8. FREIGHT TERMS 3
9. CARRIER ROUTING INSTRUCTION UTILIZING CALIBER 4
10. CARRIER ROUTING INSTRUCTION WHEN NOT UTILIZING CALIBER 5
11. AUTHORIZED CARRIERS 8
ATTACHMENT A: 42 X 42 INCH PALLET
ATTACHMENT B: GTE REGIONAL ROUTINGS
</TABLE>
57
<PAGE>
EXHIBIT G
GTE SHIPPING AND CARRIER ROUTING INSTRUCTION
As directed by purchase order a more specific set of instructions may be
provided for some shipments.
The following instructions will reduce cost, save time in receiving and assure
timely payment of invoices.
1. PURPOSE
The purpose of these instructions is to provide information and guidelines
for shipments to CUSTOMER. Use of these instructions will assist CUSTOMER
to meet its goals and complete shipments on-time, damage free at the lowest
cost.
These instructions are meant to aid both CUSTOMER and SELLER. If SELLER
has recommendations for improvements, SELLER should contact CUSTOMER.
2. NOTICE
SELLER is responsible for complying with these instructions. Deviation
from these instructions requires prior authorization from CUSTOMER or be
reflected on the purchase order. CUSTOMER reserves the right to refuse or
reduce reimbursement for freight charges or charge back to SELLER excess
freight charges incurred due to noncompliance with these instructions.
SELLER may also be responsible for any freight claims arising from
noncompliance with these instructions.
3. BILL OF LADING
SELLER will consolidate all purchase orders on one bill of lading, shipping
to any one individual CUSTOMER's receiving location on the same day, or as
directed by a GTE transportation department, its agent or a GTE purchasing
department.
EXCEPTION: Separate bills of lading are to be completed for separate GTE
entities (e.g. GTE SUPPLY, GTE TELEPHONE OPERATING COMPANIES entity, GTECC,
GTEL) shipping to the same address on the same day.
In preparing the bill of lading for the carrier, record the total piece
count, the number of pallets and total weight per bill of lading. Example:
If shipping 578 pieces on 10 pallets weighing 25,000 pounds, the bill of
lading should read: 578 pieces on 10 pallets - 25,000 pounds.
Purchase order numbers and other CUSTOMER reference information, such as
work order/project number, must be entered in the appropriate space on the
bill of lading. If specific reference space is not provided, the type of
reference and reference information should be included as the last item in
the "ship to" area and again in the body of the bill of lading.
<PAGE>
NOTE: For collect (or third party collect as with GTE Mobilnet purchase
orders) shipping to GTE Supply, GTE Telephone Operating
Companies, and GTE Mobilnet, CUSTOMER reference information
contained in the body of the bill of lading must also include the
Transaction Verification Number (TV number) obtained from Caliber
Logistics, Inc. (CALIBER) at: 1-800/483-0015. (Reference Section
9 for details)
Any information to be transposed by the carrier to the delivery receipt
must be included on the bill of lading.
SELLER's reference number should be included in the appropriate space of
the bill of lading or in the body of the bill of lading.
Bills of lading for all truckload shipments must be marked "notify
consignee 24 hours prior to expected delivery" and include CUSTOMER's
receiving location (consignee) telephone number if available. If not
marked appropriately, shipment may be delayed in unloading and measured
delivery intervals may not be met. Caliber can provide SELLER with GTE
consignee telephone number if SELLER does not have it.
Material must be described per the appropriate National Motor Freight
Classification (NMFC) description and when rates are dependent on shipment
value, the shipment value giving the lowest charges should be used.
Material Safety Data Sheet (MSDS) document provides pertinent information
about the nature of a particular chemical substance or mixture. The MSDS
is developed by the manufacturer or formulator of the hazardous substance
or mixture and must be marked and described appropriately, indicating all
special handling and safety instructions. Hazardous materials that are
regulated by the Department Of Transportation (DOT) must comply with all
DOT shipping regulations.
4. PALLETIZATION
The standard pallet size that must be used for shipments to CUSTOMER by
SELLER is 42 X 42 inches (see Attachment A). The pallet should be two way
entry only and the maximum height including the pallet should be no greater
than 50 inches. A maximum one inch overhang is allowed.
NOTE: For GTE Supply, GTE Telephone Operating Companies, and GTE
Mobilnet shipments, there will be no exceptions to utilizing a
standard 42 X 42 inch pallet. If a standard 42 X 42 inch pallet
cannot be used, then SELLER must contact GTE Supply's Packaging
Administrator at 972/751-4413.
5. PACKING LIST
Purchase order numbers and other CUSTOMER reference information such as
work order/project number must be entered in the appropriate space on the
packing list.
2
<PAGE>
The packing list should include the total number of cartons shipped and
CUSTOMER's part number/ item ID as shown on purchase order. The packing
list should be visible from the front of the pallet and not buried in the
shipment.
SELLER's resulting invoice must reflect the same packing list quantities
and items or payment may be delayed.
On a palletized load as part of a truckload, place the packing list in an
envelope marked "Packing list Enclosed" and place it on the last pallet
loaded.
On less than a truckload shipment, number the pallets and place the packing
list on pallet number one.
On a carton only shipment, number the cartons and place the packing list on
the outside of carton number one.
6. PACKAGE LABELING INSTRUCTION
All pieces in the shipment should be labeled with SELLER's name, address,
reference number and the destination name and address with CUSTOMER
reference information such as purchase order number as required by Section
15(d) and if applicable, work order/project number.
When shipping more than one carton to one location, strap the cartons
together and ship as one unit, to the extent allowed by the carrier
utilized. Palletize where the quantity of cartons justifies palletization.
This ensures all cartons have a better chance of arriving intact and on
time.
Cartons containing more than one item should be labeled as to part numbers
contained inside such cartons. All cartons must be labeled with purchase
order numbers contained therein. If a master container (a.k.a. gaylord) is
practical for transporting multiple cartons, the master container must be
labeled to show all purchase order numbers contained inside. "Multi-
Order/Mixed Load" must be written on the master container.
If you are shipping materials that normally are packaged in more than one
carton ("kit"), pack and ship all cartons together so that all items reach
the destination as a unit. The packing list should indicate that a kit is
being shipped containing multiple items.
7. EXTERNAL PACKAGING
Pallet loads should have corner posts and should be stretch wrapped to
insure minimum damage during transit and to allow pallets to be stacked in
warehouse facilities. Stretch wrap should be at least 80 gauge.
Cartons or items may be strapped to the pallet utilizing 0.018 X 3/4 inch
steel strapping or a vinyl strapping of equal strength. When using
strapping, corner caps should be attached to protect the items from the
strapping during transit.
3
<PAGE>
8. FREIGHT TERMS
The preferred freight terms for SELLER's shipments, consigned to a GTE
address, are FOB origin freight collect in which case CUSTOMER (or its
agent) will be responsible for selecting a carrier, arranging insurance and
paying the carrier for freight costs. No freight cost will appear on
SELLER's invoice, "Reference Section 9, CARRIER ROUTING INSTRUCTION
UTILIZING CALIBER"
In some cases, purchase order instructions may be:
. "Freight Prepaid and Add" used only with approval of the buyer of
record, and when advantageous to GTE, in which case the carrier will
send the freight invoice to SELLER, SELLER pays the freight and adds
reasonable freight cost to CUSTOMER's invoice as a separate line item.
SELLER bears all risk for materials during transportation and assumes
all authority for selecting a carrier.
. "Freight Collect with Third Party Billing" in which case the carrier
will send the freight invoice to the CUSTOMER's third party and not
CUSTOMER's receiving location, and the third party will be responsible
for paying the invoice. These purchase orders should specify the use
of CALIBER for carrier selection, if GTE is the responsible freight
payor. Carrier selection in this case remains with CUSTOMER or its
agent. (reference Section 9)
. "Freight Prepaid and/or Allow" In which case SELLER may include
freight in the cost of goods; in no event will a freight cost line
item appear on SELLER's invoice. Carrier selection in this case is
SELLER's responsibility.
9. CARRIER ROUTING INSTRUCTION UTILIZING CALIBER LOGISTICS, INC.
For FOB Origin /Freight Collect (or third party collect) shipments, under
150 pounds, to GTE Supply, GTE Telephone Operating Companies, or GTE
Mobilnet.
If the SELLER is on UPS Consignee Billing, and UPS ground can meet the
purchase order's required delivery date:
. Do not call CALIBER LOGISTICS
. Ship via UPS consignee billing Collect ground.
If the SELLER is NOT on Consignee Billing, and UPS ground can meet the
purchase order's required delivery date, ship via UPS ground:
. Do not call CALIBER LOGISTICS
. Ship via UPS ground Prepaid and Add
SELLER must make arrangements with UPS to initiate Consignee Billing, if
not already done.
If SELLER can not meet the required delivery date of purchase order via UPS
ground (regardless of weight), SELLER will contact CALIBER for routing.
4
<PAGE>
SELLER is to contact CALIBER LOGISTICS, Inc. (CALIBER) at:
1-800/483-0015.
The information that CALIBER will require from SELLER to economically route
freight to GTE Supply, GTE Telephone Operating Companies, and GTE Mobilnet
or other GTE customer locations as stated on purchase order includes:
Required Delivery Date (RDD) or ship date, only if required delivery
date is not on purchase order
Material Availability Date (from supplier's location)
Purchase Order number
Number of pieces (boxes, crates, pallets)
Total shipment weight
Origin
Hazardous Material handling instructions
Destination
Part number(s) that is/are being shipped
Upon SELLER's furnishing of the information identified above to CALIBER,
CALIBER will provide SELLER a TV number, which must be included in the body
of the bill of lading.
Failure to comply with these requirements will result in any excess freight
charges being billed back to SELLER. Any administrative and processing
costs to initiate charge backs may be added to such charges to SELLER.
Questions concerning these instructions or problems arising from the use of
CALIBER or UPS Consignee billing should be referred to:
Section Supervisor-Transportation
GTE Supply MC: HQA07H04
5615 High Point Drive
Irving, TX 75016
972/751-4768 or 972/751-5601
10. CARRIER ROUTING INSTRUCTION FOR GTE COMPANIES THAT DO NOT CURRENTLY UTILIZE
CALIBER LOGISTICS, INC.
For shipments from SELLER to GTE Affiliates who do not use CALIBER and with
any of the following freight terms:
5
<PAGE>
. FOB Origin, Freight Collect;
. FOB Origin, Freight Collect with Third Party Billing
If CUSTOMER is the payor of the carrier freight invoice for either collect or
third party, the following instructions MUST be used in selecting a carrier:
Contact buyer of record on purchase order for expedited or premium freight
authorization.
Step 1: To determine if routine transit time or expedited or "premium"
transportation is required:
SHIPMENTS UNDER 150 POUNDS:
If the SELLER is on UPS Consignee Billing, and UPS ground can meet the
purchase order's Required Delivery Date, ship via UPS ground.
. Ship via UPS Consignee Billing Collect ground.
If the SELLER is NOT on Consignee Billing, and UPS ground can
meet the purchase order's Required Delivery Date, ship via UPS ground.
. Ship via UPS Prepaid and Add.
If SELLER is not set up on Consignee Billing, SELLER must contact
UPS to initiate Consignee Billing.
If the surface transit time is not adequate, expedited or premium
transportation must be authorized by CUSTOMER (or its agent) prior to
shipment. Refer to "Premium Transportation" instructions in Step 2
below and in Section 11, Authorized Carriers.
SHIPMENTS OVER 150 POUNDS (non premium)
150 - 18,000 pounds: (reference ATTACHMENT B)
. Less than 200 miles, transport via GTE contract carrier (regional
LTL)
. 200-500 miles, transport via GTE contract LTL regional carrier or
GTE contract LTL long haul carrier
. 500+ miles, transport via GTE contract LTL long haul carrier
SHIPMENTS OVER 18,000 POUNDS:
. Contact the buyer of record on purchase order
For collect shipments under 150 pounds, SELLER must use UPS Consignee
Billing whenever purchase order delivery date allows. Multiple cartons
should
6
<PAGE>
be banded together, and total weight cannot exceed 150 pounds. Do not
ship more than ten cartons to one address at one time via UPS ground.
Step 2: Expedited/Premium Transportation - use only GTE contract carriers
for ground or air freight transport, as listed in Section 11,
Authorized Carriers:
Less than 150 pounds:
. Less than 200 miles, transport via UPS ground for one-day
service.
. Over 200 miles, transport via air express/air freight, with
approval of the buyer of record on purchase order
151 - 1000 pounds: (reference ATTACHMENT B)
. Less than 200 miles, transport via expedited truck
. 200 - 500 miles, transport regional LTL or expedited truck
. 500+ miles, transport via air freight or other premium ground
service - Requires approval from buyer of record on purchase
order
Over 1000 pounds:
. Contact the buyer of record on purchase order
Shipments requiring air ride capability (electronic van), contact GTE
Section Supervisor Transportation at: 972/751-4768 or 972/751-5601.
Step 3: If SELLER's shipping location and CUSTOMER's receiving location are in
different regions, reference ATTACHMENT B "GTE REGIONAL ROUTING", use
either regional LTL or long haul LTL carrier if direct service is
provided between origin and destination. For service within a region
and service is equal, regional carriers should be used. Select the
carrier based on best service provided by the carrier between the
origin and destination points and has the ability to meet the required
delivery date on purchase order.
Step 4: Contact the carrier to verify service availability and arrange pickup.
Most GTE national account carriers provide toll free national customer
service telephone numbers that can be used to verify service and
arrange for pickup. Refer to Section 11 "Authorized Carriers".
Step 5: For tracing and requesting proof of delivery contact the carrier's
customer service point listed under Section 11 "Authorized Carriers".
If CUSTOMER is not the payor of the carrier freight invoice for either
collect or third party, SELLER will be responsible for selecting a
carrier that provides the required service at the lowest cost. In all
cases, SELLER is responsible
7
<PAGE>
for verification that the selected carrier can be expected to provide
the service required.
11. AUTHORIZED CARRIERS FOR SHIPMENTS TO GTE ENTITIES NOT CURRENTLY UNDER
CALIBER LOGISTICS, INC. PROCESSES
LTL long haul (generally interstate/500+ miles including Hawaii, Alaska and
Puerto Rico from/to the continental United States and Canada):
CF Motorfreight 800/543-9942
Yellow Freight Systems 800/610-6500
LTL region (generally less than 500 miles within regions and between
regions and adjoining states):
GTE Regional Routings (Reference Attachment B)
Air or premium shipment:
. Air express service authorized carriers (under 40 pounds):
Airborne Express 800/247-2676
Federal Express 800/238-5355
DHL Worldwide (International only) 800/225-5345
. DOMESTIC air freight authorized carriers (over 40 pounds):
Airborne Express 800/247-2676
Amertranz 800/274-4763
Burlington Air Express 800/225-5229
Emery Worldwide 800/443-6379
Pilot 800/851-8112
. INTERNATIONAL air freight forwarders/customs documentation:
Circle Freight 708/616-7013
DHL Worldwide 800/225-5345
Emery Worldwide 800/443-6379
Fritz Companies 214/621-2222
Note: Purchase orders with an "INTERNATIONAL" ship to address require
special handling, the SELLER must follow the shipping instructions on
the purchase order. If SELLER ships without following these
instructions freight could be held in either U.S. Customs or foreign
customs and/or returned to origin. Any cost involved in a SELLER not
following shipping instructions will be at the expense of the SELLER
and not passed on to GTE Supply (CUSTOMER).
8
<PAGE>
ATTACHMENT A
42 X 42 INCH PALLET
<PAGE>
ATTACHMENT A
42 X 42 INCH PALLET
Deck boards to be equally spaced
[DIAGRAM OF 42 X 42 INCH PALLET]
Material List:
(1) 3 PCS 1-3/8" X 3-5/8" X 42"
(2) 7 PCS 1/2" X 3" X 42"
(3) 3 PCS 1/2" X 3" X 42"
Material: To be Group III and IV hardwoods, cleanly cut.
Grade: To be good sound material, free of knots, with an average
diameter no greater than 1/3 the width of the piece or other
defects of a more serious nature.
Moisture content: Green and/or dry.
Nailing: Nail item #2 and #3 to items #1 with two (2) 4d, 1-1/2"
drive screw nails at each nailing joint. Nails to be
staggered and well driven.
<PAGE>
ATTACHMENT B
GTE REGIONAL ROUTINGS
<PAGE>
ATTACHMENT B
GTE REGIONAL ROUTINGS
<TABLE>
<CAPTION>
Regional Interstate LTL Transportation Services:
Carrier National Customer Service
------- -------------------------
<S> <C> <C>
Mid-west American Freightways 800/443-3786
Central Transport 800/221-0749
Hyman Freightways 800/445-2142
Preston Trucking 800/551-7737
Viking 800/845-4647
Northeast American Freightways (MD,DL) 800/443-3786
Central Transport 800/221-0749
Preston Trucking 800/551-7737
Viking 800/845-4647
Southern AAA Cooper 800/633-7571
American Freightways 800/443-3786
Atlanta Motorlines 800/729-2939
Averitt Express 800/225-9794
Central Transport 800/221-0749
Conway Southern 800/852-5990
Southeastern Freightways 800/637-7335
Viking 800/845-4647
Western Conway Western 800/852-5990
Oak Harbor 800/285-6254
Silver Eagle 503/252-9165
Viking 800/845-4647
Long Haul LTL Interstate Transportation Services:
CF Motorfreight 800/543-9942
Yellow Freight Systems 800/610-6500
Intrastate LTL Transportation Services:
Do not use between states within a region, for use within the states as listed in the attached matrix.
- ----------
Conway Central 800/852-5990
Merchants 800/527-4118
Overnite 800/333-7400
TNT Red Star 201/344-7700
Wilson Trucking 800/494-5766
Crescent 510/471-8900
</TABLE>
<PAGE>
Canada LTL Transportation Services:
Shipments between Canada and the United States.
All areas CF Motorfreight 800/543-9942
Yellow Freight Systems 800/610-6500
Western Silver Eagle 503/252-9165
Eastern Central Transport 800/221-0749
Preston Trucking 800/551-7737
Air Transportation Services
Do not use next day or second day air freight within the state or between states
- ----------
within a region, and less than 500 miles, as the previously listed regional
carriers can provide the same level of service via surface at a significant
reduction in cost.
Air Express (Under 40 lbs.)
----------- ---------------
Airborne Express 800/247-2676
Federal Express 800/238-5355
Domestic Air Freight (Over 40 lbs.)
--------------------- --------------
Airborne Express 800/247-2676
Amertranz Worldwide 800/274-4763
Burlington Air Express 800/225-5229
Emery Worldwide 800/443-6379
Pilot Air Freight 800/851-8112
<PAGE>
LTL REGIONAL MAP
[MAP OF U.S. AND LOWER CANADA
BROKEN INTO THE FOLLOWING REGIONS:
Eastern Canada, Western Canada, Northeast, Midwest, South & West]
<PAGE>
EXHIBIT H
PRODUCT DELIVERY INTERVAL
Eight (8) Weeks ARO
<PAGE>
EXHIBIT I
CENTURY COMPLIANCE
I-1
<PAGE>
CENTURY COMPLIANCE
1. CENTURY COMPLIANCE
(a) When used in this Exhibit with initial capital letters, the following
terms have the respective meanings given below.
(1) "Procured System" means the software products (including
firmware), computerized hardware products (whether general or
special purpose), documentation, data, and other similar or
related items of the automated and/or computerized system(s)
that are provided by or through SELLER pursuant to this
Agreement, or any component part thereof, and any services
provided by or through SELLER in connection therewith.
(2) "Calendar-Related" refers to date values based on the Gregorian
calendar (the calendar in use throughout most of the world), as
further defined in Encyclopedia Britannica, 15th edition, 1993,
page 476), and to all uses in any manner of those date values,
including without limitation manipulations, calculations,
conversions, comparisons, and presentations.
(3) "Date Data" means any Calendar-Related data in the inclusive
range January 1, 1900, through December 31, 2050, which the
Procured System uses in any manner.
(4) "System Date" means the Date Data value which the Procured
System shall be able to use as its current date while
operating.
(5) "Century Compliant" means that the Procured System satisfies
the requirements set forth in Sections 1.(b), 1.(c), and 1.(d)
below.
(6) "Century Noncompliance" means any failure of the Procured
System to be Century Compliant.
(b) SELLER represents that, in connection with Calendar-Related data and
Calendar-Related processing of Date Data or of any System Date, the
Procured System will not malfunction, will not cease to function, will
not generate incorrect data, and will not produce incorrect results.
(c) SELLER further represents that, in connection with providing Calendar-
Related data to and accepting Calendar-Related data from other
automated and/or computerized systems and users via user interfaces,
electronic interfaces, and data storage, the Procured System
represents dates without ambiguity as to century, provided such other
automated and/or computerized systems also represent dates without
ambiguity.
<PAGE>
(d) SELLER further represents that SELLER has verified through testing
that the Procured System is Century Compliant and that testing
included, without limitation, each of the following specific dates and
the transition between those of such dates that are successive:
December 31, 1998; January 1, 1999; September 9, 1999; September 10,
1999, December 31, 1999; January 1, 2000; February 28, 2000; February
29, 2000; March 1, 2000 December 31, 2000; and January 1, 2001.
(e) These representations survive the expiration or earlier termination of
this Agreement.
2. INTERFACING
The Procured System shall have the present capability, which can be readily
utilized by CUSTOMER, of providing Calendar-Related data to and accepting
Calendar-Related data from other automated and/or computerized systems and
users in a format such as, but not limited to, four-digit CCYY format,
where CC are the two digits expressing the century and YY are the two digit
expressing the year with that century (e.g., 1996, 2003 and 2027). SELLER
shall provide CUSTOMER with all necessary interfacing information
describing the format utilized by the Procured System, if different than
CCYY format.
3. CENTURY NONCOMPLIANCE REMEDY
In the event the Procured System is Century Noncompliant in any respect,
SELLER shall, at no cost to CUSTOMER, correct the Century Noncompliance and
provide the corrected Century Compliant Procured System to CUSTOMER no
later than ten (10) days after a Noncompliance has been identified, unless
otherwise agreed by CUSTOMER in writing.
4. NONCOMPLIANCE NOTICE
In the event SELLER becomes aware of a possible or an actual Century
Noncompliance in the Procured System, SELLER shall promptly inform CUSTOMER
of all relevant information (and timely provide CUSTOMER updates to such
information) with respect to Seller's knowledge. SELLER shall respond
promptly and fully to inquiries by CUSTOMER (and timely provide updates to
any responses provided to CUSTOMER) with respect to any possible Century
Noncompliance in the Procured System. In the foregoing, the use of
"timely" means promptly after the relevant information becomes known to or
is developed by or for SELLER.
<PAGE>
EXHIBIT J
STANDARDIZATION POLICIES, PROCEDURES AND TERMS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
1. STANDARDIZATION POLICY............................................... 1
2. PRODUCT EVALUATION TYPES AND FUNDING................................. 1
3. PRODUCT STANDARDIZATION AND ACCEPTANCE............................... 2
4. TECHNOLOGICAL OR SPECIFICATION CHANGE/PRODUCT
DELETION/SUBSTITUTION................................................ 3
5. UNSATISFACTORY CONDITION SITUATIONS.................................. 3
6. PRODUCT CHANGES...................................................... 4
7. QUALITY ASSURANCE REPORTING.......................................... 6
8. CUSTOMER'S REMEDY FOR NONCOMPLIANCE.................................. 6
</TABLE>
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EXHIBIT J
STANDARDIZATION POLICIES, PROCEDURES AND TERMS
1. STANDARDIZATION POLICY
The GTE standardization process exists to manage the introduction and
evaluation of new or enhanced product and the life-cycle management of
installed or resold Product. Customer/Seller interactions will proceed
smoothly if Seller directs presentation efforts for new or enhanced product
offerings to Customer's Standardization organization(s) to ensure timely
evaluation and consideration as GTE Standard for system wide procurement
and application. The GTE standardization process also complements normal
Customer/Seller interaction required to support existing applications and
in-place enhancements of the Seller's Product and technology.
2. PRODUCT EVALUATION TYPES AND FUNDING
GTE's Standardization organization is responsible to determine the extent
and level of evaluation necessary to designate a Seller's Product as GTE
Standard. The evaluation may include a paper evaluation, customer survey,
certification, laboratory specification testing, field trial inter-
operability and/or functional evaluations and first customer trials. The
evaluations are required to assess the quality, functionality, reliability
and safety of such new or enhanced product prior to possible approval,
purchase, and deployment within GTE.
(a) In order for the parties to agree to pursue GTE standardization of new
or enhanced product in accordance with Customer's standardization
and/or testing policies and procedures, funding for field trial and/or
market trial tests will need to be determined by mutual consent. This
agreement will minimally include equipment, installation, testing
personnel, support, removal, shipping and termination conditions.
(b) If laboratory testing is necessary, the purpose is to verify
compliance to Seller's, GTE and/or other relevant specifications. The
specifications will be identified or provided to the Seller in writing
prior to the testing. If the parties agree to pursue GTE
Standardization and laboratory testing, the Seller agrees to bear all
Costs associated with required laboratory testing. If the Seller owns
or controls a laboratory facility that has current certification by
the GTE standardization organization(s), then Seller's testing results
may be accepted. Otherwise, the Seller will be provided with a list of
GTE certified independent laboratories, whose results will be
accepted. If Seller has previous laboratory testing results that
verify compliance to GTE and/or industry standards, then Customer
agrees to consider such test results. Laboratory testing conducted at
Seller's expense does not guarantee Product acceptance by Customer
and, if Seller's Product is not standardized by Customer's
standardization organization(s) for any reason, Customer shall not be
liable for any cost incurred by Seller for any such laboratory testing
for any reason.
(c) Based on Product changes made by Seller, Customer may determine, in
its sole discretion, that a reevaluation of Product is necessary to
remain GTE Standard. Additionally, there may be instances where UCR
problem resolution can only be verified with laboratory testing. The
purpose of this testing is to ensure continued quality of Product
purchased and deployed by Customer. In
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such cases, Seller shall, with its consent, bear any costs associated
with laboratory testing, in accordance with conditions identified in
paragraph 2.b. Laboratory tests conducted at Seller's expense do not
assure that Product will remain GTE Standard and, if Seller's Product
does not pass reevaluation for any reason, Customer shall not be
liable for any costs incurred by Seller for such laboratory testing
for any reason.
3. PRODUCT STANDARDIZATION AND ACCEPTANCE
The Evaluation Exception Report (EER) is used by the Customer to identify
Product discrepancies that are discovered during an evaluation and require
attention prior to approval and designation as GTE Standard.
(a) Customer classifies EER discrepancies into one of four (4) levels of
priority (Priority Levels 1, 2, 3, and 4).
(b) A priority one (1) EER identifies a critical feature, service,
operations, maintenance or documentation problem. As the most serious
category of Product discrepancy, Seller must immediately pursue
corrective action to continue Product evaluation. Evaluation of the
Product may continue at the discretion of the Customer or may be
suspended until a Seller correction is provided to Customer. A
satisfactory resolution is required to be verified prior to a
standardization decision and prior to placing the Product in a revenue
producing, live customer or on-line testing environment.
(c) A priority two (2) EER identifies a major failure, service,
operational, maintenance or documentation problem. Evaluation of the
Product will usually be continued, although testing may be suspended
at the discretion of the Customer, generally when the Product has
multiple priority one (1) or two (2) EERs unresolved against the
Product. A satisfactory resolution is required to be verified prior to
a standardization decision and prior to placing the Product in a
revenue producing, live customer, environment.
(d) A priority three (3) EER identifies a minor feature, service,
operational, maintenance or documentation problem. Priority three (3)
EERs do not interrupt the evaluation effort. A satisfactory
resolution or identification of a resolution along with a resolution
implementation time line is required prior to a standardization
decision. An open EER will be converted to an Unsatisfactory
Condition Request (UCR) of the same priority at the time of a positive
standardization decision. An open Priority 3 EER/UCR may require the
disposition of Product use and application limitations until resolved.
(e) A priority four (4) EER identifies a possible feature, service,
operational, maintenance or documentation enhancement. The evaluation
effort will not be suspended unless Customer believes that the
enhancement is necessary to the Viability of Product deployed by GTE.
Seller agrees to consider the enhancement under Section 6.(e) PRODUCT
CHANGE. At the completion of the evaluation, these EERs will be
withdrawn or converted to a design request.
(f) Customer reserves the right to terminate or suspend any evaluation
based on unresolved EERs.
(g) During an evaluation, Seller shall provide telephone support from
Seller's Technical Service Center. Such telephone support shall be
available twenty-
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four (24) hours a day, seven (7) days a week, without any additional
charge to Customer.
(h) In the event Seller's Product fails evaluation, Customer reserves the
right to return to Seller any affected Product that was purchased
during the evaluation period and Seller shall refund to Customer any
amounts paid with respect to such Product. Any Product returned must
be unused, undamaged, and in its original carton.
4. TECHNOLOGICAL OR SPECIFICATION CHANGE/PRODUCT
DELETION/SUBSTITUTION
(a) Seller is required to give Customer advance written notice within one
hundred twenty (120) days, or as soon as Seller has official release,
of any technological or specification change, software/firmware
revision, Product deletion or manufacturer discontinuance that would
significantly impact Product operation, interchangeability with
existing Product, appearance, warranty, life cycle or GTE
engineering/quality approvals of any Product. Seller shall, at the
time of notification, provide Customer with (i) a Product change
number; (ii) a description of such change; (iii) the reason for
change; (iv) a description of the impact of such change upon
reliability, Product specifications, or form, fit or function; (v)
proposed price impact (if any); and (vi) proposed effective date for
such change and recommended implementation schedule.
(b) If the parties fail to reach agreement on any such change in Product
to be made by Seller, then, in addition to all other rights and
remedies at law or in equity or otherwise, Customer shall, at no cost
or liability, have the right to terminate all pending purchase orders
for Product affected by such change.
(c) Seller may discontinue the availability of Product at any time, but
shall accept Orders for discontinued Product for a period of at least
ninety (90) days after the effective date of discontinuation. Orders
for discontinued Product shall only be accepted if delivery is
requested within one hundred and eighty (180) days of the effective
date of discontinuation.
(d) Seller agrees that if the required one hundred twenty (120) days'
prior written notice is not provided, Seller shall accept, at
Customer's option, a Product exchange or return for all Product in
Customer's inventory on the effective date of the change. Any Product
returned must be unused, undamaged and in the original carton and may
be returned, at Customer's option, for one hundred percent (100%)
credit of the price paid or an equal dollar value exchange for any
other Product offered under this Agreement.
5. UNSATISFACTORY CONDITION SITUATIONS
If at any time during normal operation Customer encounters an
unsatisfactory condition in the Product, Seller agrees to meet the
following time frames for resolving the condition. An Unsatisfactory
Condition Report (UCR) is the vehicle to formally document a condition in
writing. The UCR is also used to track, report and verify the condition.
(a) A priority one (1) UCR reflects a condition which endangers public or
employee safety; degrades the ability to track, collect, or produce
revenue; causes major degradation of service; or degrades the basic
functionality of telecommunication service or its support systems by
degrading Customer's ability to provide day-
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to-day services to its customers. Within fifteen (15) days of receipt
of written notification from Customer of a priority one (1) UCR,
Seller shall acknowledge receipt thereof in writing and confirm or
deny in writing the existence of the conditions stated in the UCR.
Seller must provide a permanent resolution within thirty (30) days of
such written notification from Customer.
(b) A priority two (2) UCR reflects a condition that potentially degrades
the ability to track, collect, or produce revenue; could potentially
result in a major degradation of service; could degrade the basic
functionality of telecommunication service or its support systems by
degrading Customer's capability to provide day-to-day services to its
customers. Within fifteen (15) days of receipt of written
notification from Customer of a priority two (2) UCR, Seller shall
acknowledge receipt thereof in writing and confirm or deny in writing
the existence of the conditions stated in the UCR. Seller must
provide a permanent resolution within ninety (90) days of
notification.
(c) A priority three (3) UCR reflects a condition that could adversely
affect normal maintenance and/or administration of service; could
adversely degrade the basic functionality of telecommunication service
or its support systems by Customer's capability to provide day-to-day
services to its customers. Within fifteen (15) days of receipt of
written notification from Customer of a priority three (3) UCR, Seller
shall acknowledge receipt thereof in writing and confirm or deny in
writing the existence of the conditions stated in the UCR. Seller
must provide a permanent resolution within one hundred eighty (180)
days of notification.
(d) The term "permanent resolution" shall mean a correction to an
unsatisfactory condition in the form of a new or revised hardware or
software module, hardware modification kit, software patch and/or
revised operating or maintenance procedures that are acceptable to
Customer. Corrections that are temporary in nature, such as work-
around procedures, certain types of hardware modifications or software
patches, shall require (i) a final version of the correction to be
included in the next formal version/ modification/ release of Product
provided to Customer or (ii) written Customer acceptance of an
alternative. In either (i) or (ii), Seller will provide a schedule
for implementation of the final version of the correction, upgrade, or
change, as applicable. On an exception basis, Customer may agree to
an extension of the time frames specified in paragraph a, b or c, the
Seller is bound by the newly agreed upon date.
(e) The Seller has the option to discuss the UCR condition statement with
the Customer (e.g., whether condition exists within stated performance
specifications verses a design change) or query a priority level
assignment. However, the time lines are in no way affected by this
query or discussion, unless the priority is eventually modified by
Customer or the UCR is withdrawn.
6. PRODUCT CHANGES
(a) If, after Product has been shipped to Customer, Seller issues changes
affecting Product and such change is identified as necessary for the
Product to continue to meet Seller's published specifications or
design criteria (Mandatory Engineering Change), including an
identified correction of a deficiency as a result of a UCR (refer to
Section 4, UNSATISFACTORY CONDITION SITUATIONS, above), Seller shall
provide prompt notification of required changes to Customer's
standardization and/or testing organization(s) at the
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address provided to Seller for such purpose. Seller shall, at Seller's
expense, be responsible for costs for all Mandatory Engineering
Changes and installation of such changes whether implemented by Seller
or Customer for a period of five (5) years beyond the Product warranty
period, provided Product has been maintained during this period at
current revision levels.
(b) If Customer and Seller ascertain that Product, or a part thereof,
subject to such a change is readily returnable, Customer or Customer's
agent or contractor shall remove, at Seller's expense, and return such
Product or part to Seller's designated repair or manufacturing
facility and Seller, at Seller's expense, shall implement such changes
and return such changed Product or part to Customer's designated
location. If removal of Product to be returned to Seller for
modification would create an out-of-service condition, Seller shall
make suitable arrangements to provide replacement Product to prevent
an out-of-service condition from occurring.
(c) Any Product maintained in Customer's inventory subject to such a
change shall be returned to Seller's designated repair or
manufacturing facility to implement changes and shall be returned to
Customer's stocking location at Seller's expense. If such changes
create an adverse impact on the Product warranty or Customer's ability
to sell the Product as new, then Seller shall accept at Customer's
option, a Product exchange or return for all unchanged Product in
Customer's inventory.
(d) All change notifications provided by Seller to Customer shall contain
the following information:
(1) Description of change;
(2) Reason for change;
(3) Impact on customer service (i.e., outages, system downtime);
(4) Price impact, if known;
(5) Effective date of changes; and
(6) Implementation schedule of change.
(e) Customer may request the Seller to make changes to or enhance the
Product. Upon Seller's receipt of a written document describing in
detail the changes requested by Customer, Seller shall respond in
writing to Customer within thirty (30) days. If Seller agrees to
undertake such modifications for Customer, the response shall identify
a date for the proposed implementation schedule and cost for such
changes to Product will be provided the Seller. Acceptance and/or
further definition will require a separate mutual agreement.
7. QUALITY ASSURANCE REPORTING
Seller certifies that Seller is ISO 9001 registered. If not ISO 9001
registered at the time of execution of this Agreement, Seller shall obtain
ISO 9001 certification within one year of the date of execution. If Seller
loses ISO 9001 registration or fails to obtain registration within the one
year time limit, thereafter Seller shall implement a field reliability and
delivery performance tracking system, acceptable to Customer, within thirty
(30) days of such loss or failure, unless otherwise agreed. The tracking
system
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shall provide timely internal data collection enabling Seller to arrive at
solutions to delivery, quality and reliability problems related to Product,
and if applicable, to assembly, subassembly or other repairable module
deficiencies as measured against Customer requirements. Seller agrees to
share relevant data with Customer upon request. Seller may elect to protect
such data under the provisions of Section 16. CONFIDENTIAL INFORMATION, of
this Agreement.
8. CUSTOMER'S REMEDY FOR NONCOMPLIANCE
In the event Seller fails to comply with the provisions above, Customer may
destandardize Seller's Product without further notice. This Exhibit,
however, shall not operate in derogation of or limit any rights or remedies
otherwise available to Customer under this Agreement. In addition.
Customer reserves the right to destandardize any Seller Product at any time
for its convenience.
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EXHIBIT 10.9
AGREEMENT FOR PRODUCTS
This Agreement is made by and between the U S WEST Company(ies) identified
herein ("Customer"), and E/O Networks, with offices for transaction of business
located at 3911 Trust Way, Hayward, California 94545 ("Supplier").
In consideration of the promises, mutual covenants and agreements contained
herein, the receipt and sufficiency of which are hereby acknowledged, Customer
and Supplier agree as follows:
1. DEFINITIONS: The terms defined in this Article shall have the meanings set
forth below whenever they appear in this Agreement, unless (a) the context
in which they are used clearly requires a different meaning; or (b) a
different definition is described for a particular Article or provision:
1.1. "Agreement" means this written contract between Customer and Supplier
covering the Purchases together with attached exhibits, any Order(s),
and amendments to this Agreement issued in accordance with the Article
entitled "Amendments."
1.2. "Customer" means U S WEST Communications, Inc.
1.3. "Order(s)" means a written or electronic offer by Customer for
Product(s) which shall be deemed to incorporate all provisions of this
Agreement.
1.4. "Product(s)" means those goods, supplies, materials, articles, items,
parts, components, assemblies, software and related services described
herein.
1.5. "Product Schedule(s)" means a written instrument made part of this
Agreement by this reference describing, among other things, the
Product(s) and its (their) purchase price, specifications, warranty
terms and related shipping and delivery instructions.
2. TERM: This Agreement shall commence on August 1, 1996, and expire on August
1, 1998. The parties may extend the term or any subsequent term, by
executing a separate written agreement of extension prior to the expiration
of the term.
3. TERMINATION FOR CONVENIENCE:
3.1. Customer 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 thirty (30) 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.
3.2. 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 any 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.
3.3. 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) accepted
prior to the date of termination less any amounts previously prepaid.
Supplier agrees that a termination under this Article shall not
constitute a breach of or
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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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.
3.4. 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.
3.5. Except as set forth above. termination shall not affect either
Customer's or Supplier's pre-termination obligations hereunder and
shall be without prejudice to enforcement of any undischarged
obligations existing at the time of termination.
4. CANCELLATION OF AGREEMENT FOR DEFAULT:
4.1. Should either party at any time (1) become insolvent or unable to pay
debts as they mature, become the subject of bankruptcy proceedings not
terminated within thirty days of any filing, make a general assignment
for the benefit of creditors, or make or permit the appointment of a
receiver for all or substantially all of its property; or (2)
materially fail or refuse to prosecute its obligations hereunder
diligently or perform any other requirement of this Agreement and/or
any Order(s), which failure or refusal is not capable of cure, or if
it can be cured, if the defaulting party does not cure such failure or
refusal within thirty days after written notice thereof from the non-
defaulting party; or (3) materially fail or refuse to prosecute its
obligations hereunder diligently or perform any other requirement of
this Agreement and/or any Order(s) at least two times within any four-
month period (even if such failures or refusals are cured), then the
non-defaulting party shall have the right, at its election and without
prejudice to any other rights or remedies, to cancel this Agreement
and/or any Order(s), in whole or in part.
4.2. If Customer cancels this Agreement or any Order(s) it may recover from
Supplier all loss, damage, and expense incurred by Customer as a
direct result of Supplier's default, or deduct the amount thereof from
any monies due or to become due to Supplier, Supplier being obligated
for the payment of any deficiency that may remain after such
deduction.
4.3. If Supplier cancels this Agreement or any Order(s) it may recover from
Customer reasonable expenses incurred by Supplier as a direct result
of Customer's default. Customer shall not be liable for incidental,
consequential or indirect damages, including but not limited to lost
profits.
5. DESCRIPTION OF PRODUCT(S): The Product(s) Customer agrees to purchase and
Supplier agrees to sell are described in this Agreement including the
attached Product Schedule(s). The purchase of Product shall be upon such
terms as set forth in the Product Schedule(s) and this Agreement.
6. INVOICES AND PAYMENTS:
6.1. Supplier shall issue invoices in the format required by Customer
within thirty (30) days following the delivery of Product(s) to the
address stated on any Order(s).
6.2. Invoices for Product(s) shall be paid within forty-five (45) days
following Customer's receipt of a correct invoice. Customer is not
required to pay invoiced amounts in dispute until such dispute is
resolved. Once the dispute is resolved the invoice shall be paid
within thirty (30) days following such resolution.
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6.3. Customer reserves the right, before making payments, to require
Supplier to furnish sufficient evidence 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. 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
any such claims, liens, and causes of action has been furnished.
7. ORDER(S): Any attempted acknowledgment of any Order(s) by Supplier
containing terms and conditions inconsistent with or in addition to the
terms and conditions of this Agreement or of any Order(s) are hereby
objected to by Customer and shall not be binding upon Customer. This
Article shall not be waived, modified or amended except by a writing in
accordance with the Article entitled "Amendments."
8. WARRANTY:
8.1. Supplier warrants that all Product(s) will conform to all
descriptions, specifications, requirements, drawings, statement of
work, and other requirements set forth in this Agreement including the
Product Schedule(s), will be free from defects in materials and
workmanship, and, except for any Product(s) manufactured in accordance
with a detailed design furnished by Customer, shall be free from
defects in design.
8.2. Supplier's warranty shall commence upon acceptance of Product(s) and
shall continue thereafter for a period of three (3) years, except as
otherwise specified in a Product Schedule. The warranty period for any
Product(s) repaired or replaced shall begin anew from the date
Customer receives such repaired or replaced Product(s).
8.3. If any Product(s) fail to comply with Supplier's warranty and written
notice is given to Supplier, Customer shall be entitled, at its option
to (1) return the Product(s) and require Supplier to repair and
redeliver them all at Supplier's risk and expense; (2) repair the
Product(s) itself or have the Product(s) repaired by a third party
and, in either case, recover the reasonable cost of repair from
Supplier; (3) require Supplier to deliver replacement Product(s) at
Supplier's risk and expense, or replace the Product(s) itself or
procure replacement Product(s) from a third party, and in either case,
recover the reasonable cost of replacement from Supplier; (4) reject
the Product(s) and recover the purchase price in lieu of repair or
replacement; or (5) retain the Product(s) at a mutually acceptable
reduced purchase price in lieu of repair or replacement. In all cases,
Customer shall be entitled to recover from Supplier all reasonable
costs incurred in inspection, receipt, transportation, and care and
custody of the Product(s) and any other damages resulting from the
failure of the Product(s) to comply with Supplier's warranty.
8.4. Approval or acceptance of Supplier's designs or inspection or
acceptance of the Product(s) shall not prejudice Customer's rights
under this Article.
8.5. Customer's rights under this Article shall also be enforceable by
Customer's customers, and shall be assignable to them.
8.6. Customer's rights under this Article are not exclusive and any other
rights provided in this Agreement, the Product Schedule(s), and any
other referenced attachment, or by law are reserved.
8.7. When a need arises for Product(s) to be covered under this warranty,
Customer shall contact E/O Networks, Manager, Customer Service, at 510
-264-3800.
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9. INSPECTION; ACCEPTANCE OF PRODUCT(S): Customer may, but is not required to,
inspect Product(s) at any reasonable time. All Product(s) shall be received
subject to Customer's right of inspection and rejection. Product(s) not
conforming to specifications or the requirements of any Order(s) will be
held for Supplier's instruction at Supplier's risk; all returns will be at
Supplier's expense. If inspection discloses that any part of the Product(s)
received do not conform to specifications or the requirements of any
Order(s), Customer shall have the right to cancel any unshipped portion of
any Order(s). Payment for Product(s) prior to inspection shall not
constitute acceptance thereof and is without prejudice to any claims that
Customer may have against Supplier.
10. TITLE; RISK OF LOSS: Title to Product(s) shall vest in Customer when
Product(s) has (have) been delivered. Supplier shall bear risk of loss
until title passes. This Article shall not be deemed to limit the liability
of Supplier.
11. FURNISHING OF LABOR, TOOLS, EQUIPMENT, AND MATERIAL: Supplier shall
furnish, at its own cost and expense, all labor, supervision, machinery,
tools, equipment, fuel, power, materials, expendable supplies,
transportation, licenses, permits, bonds, and all other items that may be
required or appropriate in the procurement of Product(s) except items which
Customer specifically agrees to furnish. All materials, supplies, and other
items purchased by Supplier shall be in Supplier's own name and account.
Supplier shall be responsible for all freight and delivery, costs of
materials, supplies, equipment, and other items on the work site and shall
be responsible for in- transit loss or damage.
12. OCCUPATIONAL SAFETY AND HEALTH ACT:
12.1. Supplier shall be responsible for its safety, the safety of its
employees, its subcontractors, and the worksite in general, and shall
comply with all applicable provisions of local, state, and federal
laws, regulations and orders affecting safety and health, including
but not limited to the Occupational Safety and Health Act of 1970
(hereinafter collectively referred to as "the OSH Act"). All
Product(s) and deliverables under this Agreement shall be such that
when received and/or used by Customer, they are in compliance with the
OSH Act and other laws, regulations, rules and standards relating to
safety. Supplier shall be solely responsible for any violation of the
OSH Act by it or its subcontractors, shall immediately remedy any
conditions giving rise to such violations, and shall defend and hold
Customer harmless from any penalty, fine, or liability in connection
therewith. Supplier is expressly authorized to correct any violations
of the OSH Act that come to its attention where said violations are
within the scope of Supplier's work. Upon request of Customer,
Supplier shall provide Customer with written assurances that Supplier
and its subcontractors have a written safety plan in effect and the
OSH Act training appropriate for the work has been conducted for
Supplier and its subcontractors. Supplier shall be responsible for
coordinating its safety plan with its subcontractors, other
contractors and Customer, where appropriate. This clause shall appear
in all of Supplier's subcontracts.
12.2. While working on Customer's premises, Supplier agrees that it and its
subcontractors shall give access to the authorized representatives of
the Secretary of Labor or any state or local official for the purpose
of inspecting, investigating, or carrying out any duties under the OSH
Act at Customer's premises or facilities and Supplier shall
immediately notify Customer prior to allowing access to Customer
premises or facilities.
13. HAZARDOUS MATERIALS AND SAFETY:
13.1. "Hazardous Materials" means any hazardous, radioactive, or toxic
substance, material, or waste defined or regulated as such in or under
any environmental, health or safety law including without limitation
asbestos, and those hazardous materials, substances, and wastes
defined by the United States Department of Transportation ("DOT"),
Occupational Safety and Health Administration ("OSHA"), Environmental
Protection Agency ("EPA") or the
4
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Nuclear Regulatory Commission ("NRC") through their enabling statutes,
or regulations, orders or rules.
13.2. In connection with its activities under this Agreement and all
Product(s) provided under this Agreement, Supplier shall comply with
all applicable provisions of The Hazardous Materials Transportation
Act (49 USC 1801, et seq.), the Resource Conservation and Recovery
Act (42 USC 6901, et seq.), the Toxic Substances Control Act of 1976
(15 USC 2601, et seq.), the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 USC 9601 et seq.), the
Occupational Safety and Health Act of 1970, and any other applicable
federal, state, and local laws and regulations governing Hazardous
Materials or safety, including but not limited to state and federal
motor carrier safety regulations, the DOT Hazardous Materials
regulations and any regulations governing conveyance, packaging,
marking, identification, storage, handling and/or disposition of
Hazardous Materials, or governing any accidents or incidents in
connection with such activities involving Hazardous Materials, all as
they may be amended or supplemented from time to time.
13.3. To the extent applicable, Supplier shall furnish Customer with
Material Safety Data Sheets that comply with the requirements of the
OSHA Hazard Communication Standard (29 CFR 1910.1200), as the same
may be amended or supplemented from time to time.
13.4. Supplier shall indemnify and hold Customer harmless in accordance
with the Article entitled "Indemnity" for any claims, liabilities and
damages, including but not limited to attorneys' fees, costs of
defense, clean-up costs, response costs, costs of corrective action,
costs of financial assurance, and/or natural resource damages, that
may arise, be imposed on, be incurred by, be asserted against or be
sustained by Customer, by reason of Supplier's failure to comply with
the terms of this Article.
13.5. All provisions of this Article shall also apply to all
subcontractors, and substantially identical terms shall be stated in
all contracts between Supplier and subcontractors.
14. SHIPPING CONTAINERS AND PACKAGING:
14.1. All containers shipped by Supplier must utilize the specifications
described in the Electronics Industries Association specification EIA
-556A, Outer Shipping Container Bar Code Label Standard, with the
------------------------------------------------
exception of references made to mixed loads. Customer does not wish
to receive mixed load shipments.
14.2. All circuit pack packages shipped to Customer by Supplier must comply
with the requirements of Bellcore Generic Requirements GR-1421-CORE,
Issue 1, dated June, 1994. Customer's exceptions to the publication
are noted below:
14.2.1. If Supplier's package is transparent it must meet the
external CLEI Code labeling requirements of Bellcore Document
TR-STS-000485. An over pack is permissible to provide
protection during shipping and handling.
14.2.2. Packaging flammability requirements per Section 4.6 of
Bellcore Generic Requirements GR-1421-core, Issue 1, dated
June, 1994 are acceptable but not required.
14.2.3. Supplier's package should handle only one circuit pack at a
time, but be capable of handling a variety of different sized
circuit packs.
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14.2.4. Supplier's package must be capable of carrying documentation
per Section 4.10.4 of Bellcore Generic Requirements GR-1421-
CORE, Issue 1, dated June, 1994.
15. CONFIDENTIAL INFORMATION:
15.1. As used herein, "Confidential Information" shall mean any and all
technical or business information, including third party information,
furnished in connection with this Agreement, in whatever tangible
form or medium, or disclosed by one party to the other (including,
but not limited to, product/service specifications, prototypes,
computer programs, models, drawings, marketing plans, financial data
and personnel statistics), which is marked as confidential or
proprietary; or for information which is orally disclosed, the
disclosing party indicates to the other at the time of disclosure the
confidential or proprietary nature of the information and reduces
orally disclosed Confidential Information to writing and provides it
to the receiving party within twenty days after such disclosure which
is also marked as confidential.
15.2. Customer does not wish to receive the Confidential Information of
Supplier, and Supplier agrees that it will first provide or disclose
information which is not confidential. Only to the extent that
Customer requests Confidential Information from Supplier will
Supplier furnish or disclose Confidential Information.
15.3. Notwithstanding the termination, expiration or cancellation of this
Agreement, each party agrees to treat such Confidential Information
as confidential for a period of three years from the date of receipt
of same unless otherwise agreed to in writing by both parties, and
that during such period each party will use same solely for the
purposes of this Agreement unless otherwise allowed herein or by
written permission of the disclosing party. In handling the
Confidential Information, each party agrees: (1) not to copy such
Confidential Information of the other unless specifically authorized;
(2) not to make disclosure of any such Confidential Information to
anyone except employees and independent contractors and
subcontractors of such party to whom disclosure is necessary for the
purposes set forth above; (3) to appropriately notify such employees
and independent contractors and subcontractors that the disclosure is
made in confidence and shall be kept in confidence in accordance with
this Agreement; and (4) to make requests for Confidential Information
of the other only if necessary to accomplish the purposes set forth
in this Agreement. The obligations set forth herein shall be
satisfied by each party through the exercise of at least the same
degree of care used to restrict disclosure of its own information of
like importance but not less than a reasonable degree of care.
Notwithstanding any other provisions of this Clause, Confidential
Information may be disclosed as may be required by law, regulation or
court or agency order or demand, after prompt prior notification to
the other party of such required disclosure.
15.4. Each party agrees that in the event permission is granted by the
other to copy Confidential Information, or that copying is otherwise
permitted hereunder, each such copy shall contain and state the same
confidential or proprietary notices or legends, if any, which appear
on the original. Nothing herein shall be construed as granting to
either party any right or license under any copyrights, inventions,
or patents now or hereafter owned or controlled by the other party.
Upon termination, cancellation or expiration of this Agreement for
any reason or upon request of the disclosing party, all Confidential
Information, together with any copies of same as may be authorized
herein, shall be returned to the disclosing party or certified
destroyed by the receiving party.
15.5. The obligations imposed in this Clause shall not apply to any
information that: (1) is already in the possession of, is known to,
or is independently developed by the receiving
6
<PAGE>
party; or (2) is or becomes publicly available through no fault of
the receiving party; or (3) is obtained by the receiving party from a
third person without breach by such third person of an obligation of
confidence with respect to the Confidential Information disclosed; or
(4) is disclosed without restriction by the disclosing party; or (5)
is required to be disclosed pursuant to the lawful order of a
government agency or disclosure is required by operation of the law.
15.6. The requirements of use and confidentiality set forth herein shall
survive the expiration, termination or cancellation of this
Agreement.
16. COMPATIBILITY INFORMATION; LICENSING TECHNOLOGY:
16.1. Upon request by Customer during the term of this Agreement or within
three years following its termination, cancellation or expiration,
Supplier shall provide Customer with interface specifications
describing the electrical, functional, physical and software
interfaces of Product(s). Upon Customer's request, Supplier shall
provide such data and information to other suppliers with whose
products Customer requires Supplier's Product(s) to interface.
16.2. Compatibility information which is proprietary and confidential shall
be treated in accordance with the Article entitled "Confidential
Information."
16.3. In the event that any Product(s) provided under this Agreement
contain, provide or involve a protocol which will be present at a
Customer network interface, and which technology is proprietary to
Supplier, Supplier is required to provide to Customer assurance that:
(1) A license will be made available without compensation to
applicants desiring to utilize the technology for the purpose of
constructing and selling Customer terminal equipment using the
technology; or (2) A license of the technology will be made available
to applicants under reasonable terms and conditions that are
demonstrably free of any unfair discrimination.
17. RECORDS:
17.1. 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 final payment
for Product(s) covered hereby. Supplier agrees to provide reasonable
supporting documentation concerning any disputed amount of an invoice
to Customer within thirty (30) days after Customer provides written
notification of the dispute to Supplier.
17.2. 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.
18. INDEPENDENT CONTRACTOR: Supplier hereby declares and agrees that it Is
engaged in an independent business and will perform its obligations under
this Agreement as an independent contractor and not as the agent or
employee of Customer, that the persons performing services hereunder are
not agents or employees of Customer; that Supplier has and hereby retains
the right to exercise full control of and supervision over the performance
of Supplier's obligations hereunder and full control over the employment,
direction, compensation and discharge of all employees assisting in the
performance of such obligations; that Supplier will be solely responsible
for all matters relating to payment of such 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; and that Supplier will be
responsible for Supplier's own acts and those of Supplier's agents,
employees and subcontractors during the performance of Supplier's
obligations under this Agreement. Supplier and its employees are not
7
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entitled to unemployment insurance benefits as a result of performing under
this Agreement. Supplier is responsible for and shall pay all assessable
federal and state income tax on amounts paid under this Agreement.
19. INDEMNITY:
19.1. To the extent of the negligence, gross negligence or willfulness of
Supplier or any party under the direction or control of Supplier, or
to the extent any Product(s) is (are) defective or unreasonably
dangerous, or to the extent of Supplier's breach of any of the terms
and conditions of this Agreement, Supplier shall indemnify and hold
harmless Customer, its owners, parents, subsidiaries, agents,
directors and employees from and against all judgments, orders,
awards, claims, damages, losses, liabilities, costs and expenses,
including, but not limited to, court costs and reasonable attorneys'
fees ("Liabilities") arising from providing and/or using Products(s)
or the acts or omissions of Supplier, its agents and employees and
others under its direction or control. Such Liabilities shall
include, but not be limited to, those which are attributable to
personal injury, sickness, disease or death; and/or result from
injury to or destruction of real or personal property including loss
of use thereof, theft, misuse or misappropriation.
19.2. To the extent of the negligence, gross negligence or willfulness of
Customer or any party under the direction or control of Customer,
or to the extent of Customer's breach of any of the terms and
conditions of this Agreement, Customer shall indemnify and hold
harmless Supplier, its parent, affiliates, subsidiaries, agents,
directors and employees from and against all Liabilities arising from
the acts or omissions of Customer, its agents and employees and
others under its direction or control. Such Liabilities shall
include, but are not limited to, those which are attributable to
personal injury, sickness, disease or death; and/or result from
injury to or destruction of real or personal property including loss
of use thereof, theft, misuse or misappropriation.
19.3. Supplier shall indemnify and hold harmless Customer, its owners,
parents, subsidiaries, agents, directors and employees from and
against all Liabilities arising out of or resulting from assertions
under workers' compensation or similar employee benefit acts made by
Supplier or any of Supplier's employees, agents, subcontractors, or
subcontractors' employees or agents
20. PATENT, TRADEMARK, COPYRIGHT OR TRADE SECRET INDEMNIFICATION:
20.1. Supplier shall indemnify and hold harmless Customer, its owners,
parents, subsidiaries, agents, directors and employees from and
against all Liabilities that may result by reason of any infringement
or claim of infringement of any patent, trademark, copyright, trade
secret or other proprietary right relating to Product(s) and/or the
use thereof. Supplier will defend and/or settle at its own expense
any action brought against Customer to the extent that it is based on
a claim that Product(s) and/or the use thereof, infringe any patent,
trademark, copyright, trade secret or other proprietary right.
20.2. If a preliminary or final judgement shall be obtained against
Customer's use of any Product(s) or any part thereof by reason of
alleged infringement, or if in Supplier's opinion, such Product(s) or
any part thereof, and/or the use thereof are likely to become subject
to a claim for infringement, Supplier shall, at its expense and
option and without any effect or waiver of any right Customer may
posses at either law or equity, either: (1) procure for Customer the
right to continue using such Product(s); or (2) replace or modify
Product(s) so that it becomes non-infringing but only if the
modification or replacement does not adversely affect the Customer's
rights or ability to use same as specified herein. If neither of
those options is reasonably possible, Supplier shall refund to
Customer an appropriate pro rata portion of
8
<PAGE>
amounts paid pursuant to this Agreement and reimburse Customer for
reasonable expenses of removal and replacement.
21. INSURANCE:
21.1. 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.
21.1.1. Workers' Compensation Insurance with statutory limits as
required in the state(s) of operation and Employers'
Liability or "Stop Gap" insurance with limits of not less
than $100,000 each accident.
21.1.2. Commercial General Liability insurance covering claims for
bodily injury, death, personal injury or property damage
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 $1,000,000
General Aggregate Limit $2,000,000
Products-Completed Operations Limit $1,000,000
Personal and Advertising Injury Limit $1,000,000
21.1.3. Should performance of this Agreement involve any use of
automobiles, comprehensive automobile liability insurance
covering the ownership. operation and maintenance of all
owned, non-owned and hired motor vehicles with limits of not
less than $1,000,000 per occurrence for bodily injury and
property damage.
21.2. The insurance limits required in 21.1 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) the Customer (and its participating subsidiaries) be
named as an additional insured(s) as their interest may appear with
respect this Agreement under insurance required in 21.1.2; (2) thirty
(30) days prior written notice of cancellation of, material change or
exclusions in the policy to which certificate(s) relate shall be
given to the Customer; (3) coverage is primary and not excess of, or
contributory with, any other valid and collectible insurance
purchased or maintained by the Customer. Supplier shall not commence
any work hereunder until the obligations of Supplier with respect to
insurance have been fulfilled. The fulfillment of such obligations,
however, shall not otherwise relieve Supplier of any liability
assumed hereunder or in any way modify the Supplier's obligations to
indemnify the Customer.
21.3. Supplier shall require its subcontractors who may enter upon
Customer's premises to maintain insurance as described above.
22. SUBCONTRACTORS: Supplier shall obtain Customer's written consent prior to
subcontracting any obligations hereunder. Such requirement shall not apply
to purchases of incidental, standard commercial supplies or raw materials.
9
<PAGE>
23. ADVERTISING; PUBLICITY: No references to Customer or to Customer's names,
marks, codes, drawings or specifications will be used in any of Supplier's
advertising, promotional efforts or any publicity of any kind without
Customer's prior written permission.
24. PLANT AND WORK RULES: Supplier and Customer, 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.
25. SETOFF: All claims for money due or to become due from Customer shall be
subject to deduction or setoff by Customer by reason of any counterclaim
arising out of this or any other transaction with Supplier.
26. TIME IS OF ESSENCE: Time of performance is of the essence in this Agreement
and a substantial and material term hereof.
27. ASSIGNMENT:
27.1. Any assignment or delegation of the rights or obligations hereunder,
in whole or in part, or any other interest hereunder, without
Customer's written consent, shall be void; except that an assignment
confined solely to money due or to become due shall be void only to
the extent that it attempts to impose upon Customer obligations to
the assignee additional to the payment of such monies, or to preclude
Customer from dealing solely and directly with Supplier in all
matters pertaining hereto, including the negotiation of amendments or
settlements of amounts due. Customer reserves the right to assign
this Agreement to any parent, subsidiary of parent, subsidiary,
successor or related company of Customer.
27.2. The parties acknowledge that Customer may select at any time a "Prime
Contractor" to provide and/or manage the type of Products generally
covered under this Agreement. For and in consideration of the mutual
covenants contained in this Agreement, the parties hereby expressly
agree that the Products, 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 which will effect a novation of this
Agreement. The Prime Contractor will take the place of Customer as a
result of the Novation; 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 as a party to this Agreement. Upon the Novation, the Agreement
between Prime Contractor and Supplier will supersede the Agreement
between Customer and Supplier and Customer will be released from all
further obligations and liabilities arising thereafter under the
Agreement. Customer agrees to provide Supplier reasonable prior
written notice of such Novation.
28. FORCE MAJEURE: Neither party shall be liable for failure to perform when
such failure is caused by unforeseeable force majeure circumstances. If
such circumstances occur, the party injured by the other's inability to
perform may elect to (1) terminate this Agreement and/or any Order(s)
immediately, and/or (2) suspend this Agreement and/or any Order(s) for the
duration of the force majeure circumstances, and then resume performance
under this Agreement and/or any Order(s). 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
Products.
29. WAIVER: Either party's failure to insist on performance of any of the terms
or conditions herein or to exercise any right or privilege, or either
party's waiver of any breach hereunder shall not be construed to be a
waiver, or waive any other terms, conditions, or privileges, whether of the
same or similar type.
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30. COMPLIANCE WITH LAWS:
30.1. This Agreement and the parties' actions under this Agreement shall
comply with all applicable federal, state, and local laws, rules,
regulations, court orders, and governmental or regulatory agency
orders including the Telecommunications Act of 1996, Pub. L. No. 104-
104, 110 Stat. 56, and any and all rules and regulations issued
thereunder.
30.2. Unless exempt under the rules and regulations of the Secretary of
Labor or other proper authority, this Agreement is subject to
applicable laws and orders relating to equal opportunity and
nondiscrimination in employment as shown in the attached Exhibit A,
entitled "Nondiscrimination and Compliance Agreement."
30.3. Supplier shall obtain and maintain at its own expense all permits and
licenses required by law with respect to any Product(s), and shall
give all notices, pay all fees and comply with all laws, ordinances,
rules and regulations relating to its performance obligations
specified herein.
30.4. Supplier shall be solely responsible for the payment of all payroll
and other taxes applicable to it. Customer will pay only applicable
sales or use taxes on personal property furnished in accordance with
this Agreement. All such taxes shall be separately stated on
Supplier's invoice.
30.5. Both parties shall adhere to the U.S. Export Administration Laws and
Regulations and shall not export or re-export any Confidential
Information, technical data, Products or software received from the
other party, or any direct product of such Confidential Information,
technical data, Products or software; to any person or company who is
a legal resident of or is controlled by a legal resident of any
proscribed country listed in Section 779.4(f) of the U.S. Export
Administration Regulations (as the same may be amended from time to
time), unless properly authorized by the U.S. Government. This
requirement shall survive the expiration, termination or cancellation
of this Agreement.
31. SEVERABILITY: In the event that a court or a governmental or regulatory
agency with proper jurisdiction determines that this Agreement or a
provision of this Agreement is unlawful respectively, this Agreement, or
that provision of this Agreement, to the extent it is unlawful, shall
terminate. If a provision of this Agreement is terminated but the parties
can continue legally, commercially and practicably without the terminated
provision, the remainder of this Agreement shall continue in effect. No
additional liability shall attach to either party as a result of any such
termination.
32. DISPUTE RESOLUTION:
32.1. If any claim, controversy or dispute of any kind or nature whatsoever
arises between the parties, their agents, employees, officers or
directors ("Dispute") and such Dispute cannot be settled through
negotiation, the parties agree to attempt to settle the Dispute
through nonbinding mediation under the Commercial Mediation Rules of
the American Arbitration Association ("AAA"). If the parties cannot
settle the matter through mediation, then any Dispute shall be
resolved by arbitration as provided in this Article. Federal law
shall govern the arbitrability of all claims. 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.
32.2. 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 then
current rules of the AAA, unless otherwise provided herein. The
arbitrator shall be selected in accordance with AAA procedures from a
list of qualified people maintained by
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the AAA. The arbitration shall be conducted in Denver, Colorado OR in
the regional AAA office closest to where the claim arose OR at a
location mutually agreed upon by the parties, and all expedited
procedures prescribed by the AAA rules shall apply. The laws of
Colorado shall govern the construction and interpretation of this
Agreement.
32.3. 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.
32.4. Each party shall bear its own costs and attorneys' fees, and the
parties shall share equally the fees and expenses of the arbitrator.
The arbitrator's decision and award shall be final and binding, and
judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof.
32.5. 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 incurred in seeking such stay and/or compelling
arbitration, including reasonable attorneys' fees.
33. SEVERAL LIABILITY: 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, any
and all applicable discounts and/or credits shall be based upon the
combined forecasts and/or purchases made by all Customers under this
Agreement.
34. 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 products. Customer makes no guarantee or commitment for any
minimum or maximum amount of Product(s) to be purchased hereunder.
35. REMEDIES CUMULATIVE: The remedies provided herein shall be cumulative and
in addition to any other remedies provided by law or equity.
36. AMENDMENTS: No change or modifications of any terms or conditions herein
shall be valid or binding on either party unless made in writing and signed
by U S WEST Business Resources, Inc. and an authorized representative of
Supplier.
37. LIMITED LIABILITY OF U S WEST BUSINESS RESOURCES, INC.: U S WEST Business
Resources, Inc. is acting as agent in the negotiation, execution and
administration of this Agreement, but U S WEST Business Resources, Inc.
shall not in any event be liable for the performance or nonperformance of
this Agreement or any Order(s) by Customer, except to the extent that U S
WEST Business Resources, Inc. is Customer.
38. 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 or any Order(s).
39. BUSINESS CONDUCT: Customer has adopted and follows a Code of Business
Ethics and Conduct which imposes on itself and its employees an obligation
to deal with all suppliers and contractors in a fair and open manner in
accordance with the highest standards of integrity. Supplier represents and
warrants that it shall perform to the highest level of business and
professional ethics, and that it has not made or received and shall not
make or receive any payments, gifts, favors, entertainment, secret
commissions or hidden gratuities for the purpose of securing preferential
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treatment or action from or to any party in connection with this Agreement
or the Product(s). Any breach or failure with respect to this
representation and warranty shall constitute a material breach of this
Agreement.
40. NOTICES: Where written notices, demands, or other communications are
required under this Agreement to be made in writing, they shall be deemed
duly given when made in writing and delivered in hand, or upon receipt when
properly addressed return-receipt-requested and delivered by United States
Postal Service or other delivery service to the following addresses:
Customer:
U S WEST Business Resources, Inc.
------------------------------------------------
Attn: Michael S. Perkins
------------------------------------------------
188 Inverness Drive, West, 2nd Floor
------------------------------------------------
Englewood, Colorado 80112
------------------------------------------------
PH: 303-397-8839
------------------------------------------------
Supplier:
E/O Networks
------------------------------------------------
Attn: Vice President, Domestic Sales and Service
------------------------------------------------
3911 Trust Way
------------------------------------------------
Hayward, California 94545
------------------------------------------------
PH: 510-264-3800
------------------------------------------------
Addresses may be changed by written notice to the parties.
41. M/WBE SUBCONTRACTING PLAN:
41.1. Support of Minority and Women Businesses is part of Customer's
ongoing business strategy. To effectively carry out policy
objectives in this area, Customer has instituted the Minority and
Women Business Enterprise (M/WBE) Subcontracting Plan.
41.2. In compliance with such plan, Supplier agrees and commits to
subcontract in accordance with the subcontracting plan components
and requirements attached to and made part of this Agreement as
Exhibit B. Supplier's specific subcontracting plan shall be attached
to and made part of this Agreement as an attachment to the same
Exhibit B identified above.
42. ENTIRE AGREEMENT: This Agreement, together with all referenced attachments
shall constitute the entire Agreement between the parties with respect to
the subject matter of this Agreement. This Agreement supersedes all prior
oral and written communications, agreements and understandings of the
parties with respect to the subject of this Agreement.
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The parties intending to be legally bound have caused this Agreement to be
executed by their duly authorized representatives as of the last date set forth
below.
U S WEST Business Resources, Inc., E/O Networks
as agent for U S WEST Communications, Inc.
/s/ Michael S. Perkins /s/ William Fielding
- ------------------------------------------ -----------------------------------
(Authorized Signature) (Authorized Signature)
Michael S. Perkins William Fielding
- ------------------------------------------ -----------------------------------
(Print or Type Name of Signatory) (Print or Type Name of Signatory)
Corporate Contract Specialist VP Domestic Sales
- ------------------------------------------ -----------------------------------
(Title) (Title)
September 26, 1996 September 26, 1996
- ------------------------------------------ -----------------------------------
(Execution Date) (Execution Date)
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PRODUCT SCHEDULE NO. 1
TO AGREEMENT FOR PRODUCTS
This Product Schedule is attached to and made part of that certain Agreement for
Products No. 9600050412, dated August 1, 1996 ("Agreement"), by and between the
U S WEST Company(ies) defined in the Agreement ("Customer") and E/O Networks
("Supplier").
1 PRODUCT DESCRIPTION AND PURCHASE PRICE:
1.1 Supplier agrees to sell to Customer the products specified in Exhibit
A to this Product Schedule No. 1, hereby incorporated by this
reference.
1.2 Prices for products specified in Product Schedule, Exhibit A, shall
remain firm for a two (2) year period.
2 PRODUCT SPECIFICATIONS AND REQUIREMENTS:
2.1 Customer's product specifications and requirements stated in Request
for Proposal No. R100210 (RFP) and Supplier's responses to this RFP
including Supplier's letter dated February 8, 1996 are hereby
incorporated by this reference. Any conflicting terms and conditions
between the RFP responses and this Agreement shall be governed by this
Agreement.
2.2 Supplier shall provide products according to Customer's Configurations
specified in Exhibit D hereby incorporated into this Agreement by this
reference.
3 WARRANTY TERM:
3.1 All products described in Exhibit A to this Product Schedule 1 shall
have a three (3) year warranty to begin upon product ship date.
Transportation charges shall be paid by Supplier for all work
performed under warranty. Unless otherwise agreed, Supplier shall ship
repaired or replacement Products within fifteen (15) days of receipt.
3.2 Repaired or replaced Products shall be warranted for the remainder of
the original warranty period or for six (6) months from the date of
shipment of the repaired or replaced Product, whichever is the longer.
4 SHIPPING AND DELIVERY:
4.1 The delivery interval is thirty (30) days after receipt of Order. All
products procured under this Agreement shall be shipped FOB, Origin
Freight Collect. Supplier shall contact Customer's National Traffic
Center at 1-800-431-9900 to arrange shipment of customer orders and to
address any questions regarding procedures.
4.2 Orders placed by Customer after the first six (6) month term of this
Agreement where Customer does not allow Supplier a thirty (30) day
lead time shall include an eighteen percent (18%) additional charge.
5 TRAINING
5.1 Supplier shall provide on-site training to Customer, at Customer's
request, at no additional charge, to include the following:
<PAGE>
Operations Personnel
Maintenance Personnel
Installation Personnel
Network Administration Centers
Training Centers
Courses to be provided include FDS-1 Overview, Installation, Operation and
Maintenance and Train the Trainer.
5.2 Customer agrees to purchase FDS-1 Training equipment required for in-
house training for [*] when necessary.
5.3 Customer agrees to reimburse Supplier for only those reasonable and
necessary expenses authorized in writing. Only those reasonable and
necessary expenses stated below will be considered:
5.3.1 Reasonable lodging expenses;
5.3.2 Airline fares at lowest rate available, not to exceed coach;
5.3.3 Car rentals, when necessary for the performance of Services;
5.3.4 Meals, not to exceed Thirty-Five Dollars ($35.00) per day, per
person; and
5.3.5 Telephone calls, when necessary for performance of Services.
Personal calls are not reimbursable.
5.3.6 In all cases, receipts must accompany invoices requesting
reimbursement for expenses over Fifteen Dollars ($15.00).
6 FINANCIAL INFORMATION
In the event this Supplier's products are deployed outside of Wyoming, Supplier
agrees to provide Customer with a quarterly update of any additional business
generated by Supplier throughout the term of this Agreement. This information
shall include the dollar amount of additional business, the name of Supplier's
customer, and the time frame in which products will be purchased by Supplier's
customer.
7 FORECAST
Customer shall prepare and submit to Supplier a one-year rolling, non-binding
forecast, which shall be updated upon the beginning of each calendar quarter.
Supplier understands and agrees that Customer's forecast shall not impose any
obligation upon Customer to purchase any specific volume of Products.
8 ORDERS AND ACKNOWLEDGEMENT
Products ordered under this Agreement, whether in electronic form or otherwise,
shall contain as a minimum:
8.1 The Agreement number;
8.2 model and/or part number or CLEI code;
8.3 and shipping and billing addresses for the products being ordered.
9 SERVICES INCIDENTAL TO PRODUCTS:
2
<PAGE>
9.1 Repair Services
Supplier agrees to perform repair services, if requested by Customer,
after warranty period, at a rate of [*] of unit cost. Customer shall
pay transportation charges.
3
<PAGE>
Exhibit A
---------
FDS-1 US WEST PRICE LIST
July 12, 1996
Page 1 of 7
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
LIST US WEST
MODEL DESCRIPTION PRICE PRICE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------
US West U0001-01 HDT BAY, ASSEMBLED, 7 FT na [*]
-------------------------------------------------------------------------------------------
Special Includes:
-------------------------------------------------------------------------------------------
Configs. qty 1, 7 ft rack, Handry 02043-01
-------------------------------------------------------------------------------------------
and qty 1, fuse and alarm panel, Ascom 23DFP20/10
-------------------------------------------------------------------------------------------
Bundles qty 3, M192-03 HDT Shelf
-------------------------------------------------------------------------------------------
qty 3, M100-01 mounting ears for 23" rack
-------------------------------------------------------------------------------------------
Assemble and pack
-------------------------------------------------------------------------------------------
No VF cables included
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
U0002-01 HDT BAY, ASSEMBLED, 9 FT na [*]
-------------------------------------------------------------------------------------------
Includes:
-------------------------------------------------------------------------------------------
qty 1, 9 ft rack, Handry 02043-04
-------------------------------------------------------------------------------------------
qty 1, fuse and alarm panel, Ascom 23DFP20/10
-------------------------------------------------------------------------------------------
qty 3, M192-03 HDT Shelf
-------------------------------------------------------------------------------------------
qty 3, M100-01 mounting ears for 23" rack
-------------------------------------------------------------------------------------------
Assemble and pack
-------------------------------------------------------------------------------------------
No VF cables included
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
U0003-01 HDT BAY, ASSEMBLED, 11.5 FT na [*]
-------------------------------------------------------------------------------------------
Includes:
-------------------------------------------------------------------------------------------
qty 1, 11.5 ft rack, Handry 02043-05
-------------------------------------------------------------------------------------------
qty 1, fuse and alarm panel, Ascom 23DFP20/10
-------------------------------------------------------------------------------------------
qty 3, M192-03 HDT Shelf
-------------------------------------------------------------------------------------------
qty 3, M100-01 mounting ears for 23" rack
-------------------------------------------------------------------------------------------
Assemble and pack
-------------------------------------------------------------------------------------------
No VF cables included
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
U0004-01 HDT COMMON CARDS, FIBER na [*]
-------------------------------------------------------------------------------------------
Includes:
-------------------------------------------------------------------------------------------
qty 2, P100-01 HDT Shelf Power Card
-------------------------------------------------------------------------------------------
qty 1, P120-03 HDT System Monitor Card
-------------------------------------------------------------------------------------------
qty 2, P130-02 Mux Card
-------------------------------------------------------------------------------------------
qty 2, P145-03 HDT Fiber Optic Interface Card
-------------------------------------------------------------------------------------------
qty 1, P159-01 Composite Clock Interface
-------------------------------------------------------------------------------------------
qty 1, P180-02 HDT Channel Access Card
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
</TABLE>
PRICES ARE SUBJECT TO CHANGE WITHOUT NOTICE
<PAGE>
Exhibit A
---------
FDS-1 US WEST PRICE LIST July 12, 1996
Page 2 of 7
<TABLE>
<CAPTION>
LIST US WEST
MODEL DESCRIPTION PRICE PRICE
==========================================================================================================================
<S> <C> <C> <C> <C>
US West U0005-01 HDT COMMON CARDS AND CABLE, EXPANSION na [*]
Special -----------------------------------------------------------------------------------------------------------
Configs. Includes:
and -----------------------------------------------------------------------------------------------------------
Bundles qty 2, P100-01 HDT Shelf Power Card
cont. -----------------------------------------------------------------------------------------------------------
qty 1, P120-03 HDT System Monitor Card
-----------------------------------------------------------------------------------------------------------
qty 2, P130-02 Mux Card
-----------------------------------------------------------------------------------------------------------
qty 2, P125-01 HDT Expansion Card
-----------------------------------------------------------------------------------------------------------
qty 1, P159-01 Composite Clock Interface
-----------------------------------------------------------------------------------------------------------
qty 1, P190-02 HDT Channel Access Card
-----------------------------------------------------------------------------------------------------------
qty 1, C102-09 HDT Expansion Shelf Cable
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
U0006-01 HDT COMMON CARDS, SPARES na [*]
------------------------------------------------------------------------------------------------------------
Includes:
------------------------------------------------------------------------------------------------------------
qty 2, P100-01 HDT Shelf Power Card
------------------------------------------------------------------------------------------------------------
qty 1, P120-03 HDT System Monitor Card
------------------------------------------------------------------------------------------------------------
qty 2, P130-02 Mux Card
------------------------------------------------------------------------------------------------------------
qty 2, P145-03 HDT Fiber Optic Interface Card
------------------------------------------------------------------------------------------------------------
qty 1, P190-02 HDT Channel Access Card
------------------------------------------------------------------------------------------------------------
qty 2, P125-01 HDT Expansion Card
------------------------------------------------------------------------------------------------------------
qty 1, P159-01 Composite Clock Interface
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
U0007-01 ONU COMMON CARDS, DC na [*]
------------------------------------------------------------------------------------------------------------
Includes:
------------------------------------------------------------------------------------------------------------
qty 2, P305-01 ONU Power/Ring Card
------------------------------------------------------------------------------------------------------------
qty 2, P345-02 ONU Fiber Optic Interface Card
------------------------------------------------------------------------------------------------------------
qty 1, P391-01 ONU Channel Access Card
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
U0008-01 ONU COMMON CARDS, AC na [*]
------------------------------------------------------------------------------------------------------------
Includes:
------------------------------------------------------------------------------------------------------------
qty 2, P300-01 ONU Power/Ring Card
------------------------------------------------------------------------------------------------------------
qty 2, P345-02 ONU Fiber Optic Interface Card
------------------------------------------------------------------------------------------------------------
qty 1, P391-01 ONU Channel Access Card
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
U0009-01 ONU COMMON CARDS, AC SPARES na [*]
------------------------------------------------------------------------------------------------------------
Includes:
------------------------------------------------------------------------------------------------------------
qty 2, P300-01 ONU Power/Ring Card
------------------------------------------------------------------------------------------------------------
qty 2, P345-02 ONU Fiber Optic Interface Card
------------------------------------------------------------------------------------------------------------
qty 4, P319-01 ONU Battery Charger
------------------------------------------------------------------------------------------------------------
qty 4, M319-02 ONU Charger Interconnect Board
------------------------------------------------------------------------------------------------------------
qty 1, P391-01 ONU Channel Access Card
------------------------------------------------------------------------------------------------------------
===========================================================================================================================
</TABLE>
<PAGE>
Exhibit A
---------
FDS-1 US WEST PRICE LIST July 12, 1996
Page 3 of 7
<TABLE>
<CAPTION>
US WEST
MODEL DESCRIPTION LIST PRICE PRICE
==========================================================================================================================
<S> <C> <C> <C> <C>
US West U0010-01 ONU, 32 LINE, DC na [*]
Special -----------------------------------------------------------------------------------------------------------
Configs. Includes:
and -----------------------------------------------------------------------------------------------------------
Bundles qty 1, R032-08 32 Line ONU, Network Power
cont. -----------------------------------------------------------------------------------------------------------
qty 4, B301-01 ONU Surge Protectors (40 total)
-----------------------------------------------------------------------------------------------------------
qty 1, F310- 25 Fiber Optic Stub, 25 meter
-----------------------------------------------------------------------------------------------------------
qty 1, M311-01 ONU Cable Port Assembly, 1"
-----------------------------------------------------------------------------------------------------------
qty 1, M311-02 ONU Cable Port Assembly, 2"
-----------------------------------------------------------------------------------------------------------
U0011-01 ONU, 32 LINE, AC na [*]
-----------------------------------------------------------------------------------------------------------
Includes:
-----------------------------------------------------------------------------------------------------------
qty 1, UR032-07 32 Line US West ONU, AC w/dual chargers
-----------------------------------------------------------------------------------------------------------
qty 4, B301-01 ONU Surge Protectors (40 total)
-----------------------------------------------------------------------------------------------------------
qty 1, F310-25 Fiber Optic Stub, 25 meter
-----------------------------------------------------------------------------------------------------------
qty 1, M311-02 ONU Cable Port Assembly, 2"
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
U0012-01 ONU, 98 LINE, AC na [*]
-----------------------------------------------------------------------------------------------------------
Includes:
-----------------------------------------------------------------------------------------------------------
qty 1, UR096-07 96 line US West ONU, AC w/dual chargers
-----------------------------------------------------------------------------------------------------------
qty 10, B301-01 ONU Surge Protectors (100 total)
-----------------------------------------------------------------------------------------------------------
qty 1, F310-25 Fiber Optic Stub, 25 meter
-----------------------------------------------------------------------------------------------------------
qty 1, M311-02 ONU Cable Port Assembly, 2"
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
U0013-01 ONU, 96 LINE, DC na [*]
-----------------------------------------------------------------------------------------------------------
Includes:
-----------------------------------------------------------------------------------------------------------
qty 1, R096-09 96 Line ONU, Network Power
-----------------------------------------------------------------------------------------------------------
qty 10, B301-01 ONU Surge Protectors (100 total)
-----------------------------------------------------------------------------------------------------------
qty 1, F310-25 Fiber Optic Stub, 25 meter
-----------------------------------------------------------------------------------------------------------
qty 1, M311-01 ONU Cable Port Assembly, 1"
-----------------------------------------------------------------------------------------------------------
qty 1, M311-02 ONU Cable Port Assembly, 2"
-----------------------------------------------------------------------------------------------------------
==========================================================================================================================
</TABLE>
<PAGE>
Exhibit A
---------
FDS-1 US WEST PRICE LIST July 12, 1996
Page 4 of 7
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
MODEL DESCRIPTION LIST US WEST
PRICE PRICE
==========================================================================================================================
<S> <C> <C> <C> <C>
ONU R000-01 CNU EXPANSION CABINET [*] [*]
---------------------------------------------------------------------------------------------------------
Cabinets R032-05 32 LINE ONU, NETWORK POWER [*] [*]
---------------------------------------------------------------------------------------------------------
R032-06 32 LINE ONU, NETWORK POWER W/MS2 CONN [*] [*]
---------------------------------------------------------------------------------------------------------
R032-07 32 LINE ONU, AC POWER [*] [*]
---------------------------------------------------------------------------------------------------------
R032-08 32 LINE ONU, AC POWER W/MS2 CONN [*] [*]
---------------------------------------------------------------------------------------------------------
R032-09 32 LINE ONU, AC POWER W/HUBBLE CONN [*] [*]
---------------------------------------------------------------------------------------------------------
R032-10 32 LINE ONU, AC POWER W/MS2 & HUBBLE CONN [*] [*]
---------------------------------------------------------------------------------------------------------
R096-05 96 LINE ONU, AC POWER W/HUBBLE CONN [*] [*]
---------------------------------------------------------------------------------------------------------
R096-06 96 LINE ONU, AC POWER W/MS2 & HUBBLE CONN [*] [*]
---------------------------------------------------------------------------------------------------------
R096-07 96 LINE ONU, AC POWER [*] [*]
---------------------------------------------------------------------------------------------------------
R096-08 96 LINE ONU, AC POWER W/MS2 CONN [*] [*]
---------------------------------------------------------------------------------------------------------
R096-09 96 LINE ONU, NETWORK POWER [*] [*]
---------------------------------------------------------------------------------------------------------
R096-10 96 LINE ONU, NETWORK POWER W/MS2 CONN [*] [*]
---------------------------------------------------------------------------------------------------------
==========================================================================================================================
ONU M300-01 ONU MOUNTING EARS FOR 19" BAY [*] [*]
---------------------------------------------------------------------------------------------------------
Shelf M300-02 ONU MOUNTING EARS FOR 23" BAY [*] [*]
---------------------------------------------------------------------------------------------------------
and M301-01 ONU POLE MOUNT BRACKET KIT [*] [*]
---------------------------------------------------------------------------------------------------------
Mech. M301-02 ONU H-FRAME MOUNTING KIT [*] [*]
---------------------------------------------------------------------------------------------------------
Access. M302-01 ONU BASE MOUNT KIT [*] [*]
---------------------------------------------------------------------------------------------------------
M332-05 32 LINE SHELF [*] [*]
---------------------------------------------------------------------------------------------------------
M332-06 32 LINE SHELF WITH HARNESS & MS2 [*] [*]
---------------------------------------------------------------------------------------------------------
M332-07 32 LINE SHELF W/HARNESS & VF STUB [*] [*]
---------------------------------------------------------------------------------------------------------
M364-05 64 LINE EXPANSION SHELF [*] [*]
---------------------------------------------------------------------------------------------------------
M364-06 64 LINE EXPANSION SHELF W/HARNESS & MS2 [*] [*]
---------------------------------------------------------------------------------------------------------
M364-07 64 LINE EXPAND SHELF W/HARNESS & VF STUB [*] [*]
---------------------------------------------------------------------------------------------------------
==========================================================================================================================
ONU B340-01 BATTERY, 40 AH, 12 VOLT, GEL CELL [*] [*]
---------------------------------------------------------------------------------------------------------
AC M319-01 ONU CHARGER INTERCONNECT BOARD [*] [*]
---------------------------------------------------------------------------------------------------------
Power M329-01 ONU AC UPGRADE KIT [*] [*]
---------------------------------------------------------------------------------------------------------
M345-01 BATTERY HEATER PAD [*] [*]
---------------------------------------------------------------------------------------------------------
P300-01 ONU POWER/RING CARD (-48 VDC IN) [*] [*]
---------------------------------------------------------------------------------------------------------
P305-01 ONU POWER/RING CARD (+/-140 VDC IN) [*] [*]
---------------------------------------------------------------------------------------------------------
P310-01 DUAL POWER CARD (+/- 140 VDC OUT)DUAL [*] [*]
---------------------------------------------------------------------------------------------------------
P319-01 ONU BATTERY CHARGER [*] [*]
---------------------------------------------------------------------------------------------------------
==========================================================================================================================
ONU B301-01 ONU SURGE PROTECTOR FOR VF SUBSCRIBER [*] [*]
---------------------------------------------------------------------------------------------------------
Cables B360-01 PLASTIC HANDHOLE LID (UNASSEMBLED) [*] [*]
---------------------------------------------------------------------------------------------------------
and B401-01 ONU SURGE PROTECTOR FOR POWER PAIR [*] [*]
---------------------------------------------------------------------------------------------------------
Misc. B405-01 VF INSERTION TOOL [*] [*]
---------------------------------------------------------------------------------------------------------
Access. C311-10 VF STUB, 50PR, 10 MTR [*] [*]
---------------------------------------------------------------------------------------------------------
C312-10 VF STUB, 50 PR, W/MS2 CONN, 10 MTR [*] [*]
---------------------------------------------------------------------------------------------------------
C321-10 VF STUB 100 PR, 10 MTR [*] [*]
---------------------------------------------------------------------------------------------------------
==========================================================================================================================
</TABLE>
PRICES ARE SUBJECT TO CHANGE WITHOUT NOTICE
<PAGE>
Exhibit A
---------
FDS-1 US WEST PRICE LIST July 12, 1996
Page 5 of 7
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
MODEL DESCRIPTION LIST PRICE US WEST
PRICE
==========================================================================================================================
<S> <C> <C> <C> <C>
ONU C322-10 VF STUB 100PR, W/MS2 CONN, 10 MTR [*] [*]
----------------------------------------------------------------------------------------------------------
Cables F300-02 FIBER PIGTAIL KIT W/FC CONNECTOR, 2MTR [*] [*]
----------------------------------------------------------------------------------------------------------
and F310-25 FIBER OPTIC STUB, 4FC4 SPARE, FBR, 25 MTR [*] [*]
----------------------------------------------------------------------------------------------------------
Misc. F311-25 FIBER OPTIC STUB, 4FC, 1SC, 25MTR-TWIN PACK [*] [*]
----------------------------------------------------------------------------------------------------------
Access. M305-02 ONU SPARES KIT, MISC [*] [*]
----------------------------------------------------------------------------------------------------------
cont. M310-01 ONU FIBER SPLICE TRAY [*] [*]
----------------------------------------------------------------------------------------------------------
M311-01 ONU CABLE PORT ASSEMBLY 1" [*] [*]
----------------------------------------------------------------------------------------------------------
M311-02 ONU CABLE PORT ASSEMBLY 2" [*] [*]
----------------------------------------------------------------------------------------------------------
M340-01 ONU T1 SURGE PROTECTOR [*] [*]
----------------------------------------------------------------------------------------------------------
==========================================================================================================================
HDT B110-01 BOLTED ALUMINUM RACK [*] [*]
----------------------------------------------------------------------------------------------------------
and CO B112-01 FIBER TERMINATIN PANEL [*] [*]
----------------------------------------------------------------------------------------------------------
Shelves, B170-01 FUSE & ALARM PANEL [*] [*]
----------------------------------------------------------------------------------------------------------
Power, C100-30 VF CABLE, 100PR, 30M LONG, RIGHT FROM BP [*] [*]
----------------------------------------------------------------------------------------------------------
Cables, C101-30 VF CABLE, 100PR, 30M LONG, LEFT FROM BP [*] [*]
----------------------------------------------------------------------------------------------------------
and C102-07 HDT EXPANSION SHELF CABLE, 7 FT [*] [*]
----------------------------------------------------------------------------------------------------------
Access. C102-09 HDT EXPANSION SHELF CABLE, 9 FT [*] [*]
----------------------------------------------------------------------------------------------------------
C102-25 HDT EXPANSION SHELF CABLE, 25 FT [*] [*]
----------------------------------------------------------------------------------------------------------
F100-03 FIBER JUMPER KIT, 4EA W/FC CONN, 3M LONG [*] [*]
----------------------------------------------------------------------------------------------------------
F100-10 FIBER JUMPER KIT, 4EA W/FC CONN, 10M LONG [*] [*]
----------------------------------------------------------------------------------------------------------
M100-01 HOT MOUNTING EARS FOR 23" BAY [*] [*]
----------------------------------------------------------------------------------------------------------
M101-01 MOUNTING EARS FOR 23" RACK (POWER) [*] [*]
----------------------------------------------------------------------------------------------------------
M105-01 HOT SPARES KIT, MISC [*] [*]
----------------------------------------------------------------------------------------------------------
M120-01 NETWORK POWER SHELF [*] [*]
----------------------------------------------------------------------------------------------------------
M192-02 192 LINE HDT SHELF [*] [*]
----------------------------------------------------------------------------------------------------------
M192-03 192 LINE HDT SHELF, W/FRONT FIBER CHANNEL [*] [*]
----------------------------------------------------------------------------------------------------------
P100-01 HDT SHELF POWER CARD [*] [*]
----------------------------------------------------------------------------------------------------------
==========================================================================================================================
Transport P125-01 HDT EXPANSION CARD FOR 384 LINE SYSTEM [*] [*]
---------------------------------------------------------------------------------------------------------
and P130-02 HDT MUX CARD [*] [*]
---------------------------------------------------------------------------------------------------------
Timing P140-01 HDT TI TRANSPORT - SINGLE [*] [*]
---------------------------------------------------------------------------------------------------------
P145-02 HDT FIBER OPTIC INTFC CARD W/R&B-FC CONN [*] [*]
----------------------------------------------------------------------------------------------------------
P145-03 HDT FIBER OPTIC INTFC CARD W/FRONT FC CONN [*] [*]
----------------------------------------------------------------------------------------------------------
P146-01 HDT COPPER TRANSMIT TIMING CARD [*] [*]
----------------------------------------------------------------------------------------------------------
P159-01 COMPOSITE CLOCK INTERFACE [*] [*]
----------------------------------------------------------------------------------------------------------
P340-01 ONU T1 TRANSPORT - DUAL [*] [*]
----------------------------------------------------------------------------------------------------------
P159-01 COMPOSITE CLOCK INTERFACE [*] [*]
----------------------------------------------------------------------------------------------------------
P340-01 ONU T1 TRANSPORT - DUAL [*] [*]
----------------------------------------------------------------------------------------------------------
P345-02 ONU FIBER OPTIC INTFC CARD W/R&B-FC CONN [*] [*]
----------------------------------------------------------------------------------------------------------
==========================================================================================================================
</TABLE>
PRICES ARE SUBJECT TO CHANGE WITHOUT NOTICE
<PAGE>
Exhibit A
---------
FDS-1 US WEST PRICE LIST July 12, 1996
Page 6 of 7
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
LIST US WEST
MODEL DESCRIPTION PRICE PRICE
==========================================================================================================================
<S> <C> <C> <C> <C>
POTS P182-01 HDT LINE CARD, US POTS-4 LINES [*] [*]
----------------------------------------------------------------------------------------------------------
Line P382-01 ONU LINE CARD, US POTS-4 LINES [*] [*]
----------------------------------------------------------------------------------------------------------
Cards P184-01 HDT LINE CARD, LS/GS-4 LINES [*] [*]
----------------------------------------------------------------------------------------------------------
P384-01 ONU LINE CARD, LS/GS-4 LINES [*] [*]
==========================================================================================================================
Special P150-01 HDT LINE CARD, DS1 SERVICE-SINGLE [*] [*]
----------------------------------------------------------------------------------------------------------
Services P152-01 HDT LINE CARD, DS1 SERVICE-DUAL [*] [*]
----------------------------------------------------------------------------------------------------------
Line P350-01 ONU LINE CARD, DS1 SERVICE-SINGLE [*] [*]
----------------------------------------------------------------------------------------------------------
Cards P350-02 ONU LINE CARD, DS1 SERVICE-SINGLE, W/SPAN PWR [*] [*]
----------------------------------------------------------------------------------------------------------
M350-01 ONU DS1 CONNECTOR BOARD [*] [*]
----------------------------------------------------------------------------------------------------------
P160-01 HDT LINE CARD, 2WIRE FXB/FXO [*] [*]
----------------------------------------------------------------------------------------------------------
P360-01 ONU LINE CARD, 2WIRE FXB/FXO [*] [*]
----------------------------------------------------------------------------------------------------------
P170-01 HDT LINE CARD, COIN-DUAL [*] [*]
----------------------------------------------------------------------------------------------------------
P370-01 ONU LINE CARD, COIN-DUAL [*] [*]
----------------------------------------------------------------------------------------------------------
P172-01 HDT LINE CARD, 4WIRE TO-DUAL [*] [*]
----------------------------------------------------------------------------------------------------------
P372-01 ONU LINE CARD, 4WIRE TO-DUAL [*] [*]
----------------------------------------------------------------------------------------------------------
P176-01 HDT LINE CARD, 4WIRE E&M [*] [*]
----------------------------------------------------------------------------------------------------------
P376-01 ONU LINE CARD, 4WIRE E&M [*] [*]
----------------------------------------------------------------------------------------------------------
P180-01 HDT LINE CARD, ISON+POTS [*] [*]
----------------------------------------------------------------------------------------------------------
P380-01 ONU LINE CARD, ISON+POTS [*] [*]
----------------------------------------------------------------------------------------------------------
P180-02 HDT LINE CARD, ISON [*] [*]
----------------------------------------------------------------------------------------------------------
P380-02 ONU LINE CARD, ISON [*] [*]
----------------------------------------------------------------------------------------------------------
P185-01 HDT LINE CARD, ALL RATE DDS+DUAL POTS [*] [*]
----------------------------------------------------------------------------------------------------------
P385-01 ONU LINE CARD, ALL RATE DDS+DUAL POTS [*] [*]
----------------------------------------------------------------------------------------------------------
P185-02 HDT LINE CARD, ALL RATE DDS [*] [*]
----------------------------------------------------------------------------------------------------------
P385-02 ONU LINE CARD, ALL RATE DDS [*] [*]
----------------------------------------------------------------------------------------------------------
P186-01 HDT LINE CARD, P-PHONE-4 LINES [*] [*]
----------------------------------------------------------------------------------------------------------
P386-01 ONU LINE CARD, P-PHONE-4 LINES [*] [*]
----------------------------------------------------------------------------------------------------------
P188-01 HDT LINE CARD, NX54 KENT [*] [*]
----------------------------------------------------------------------------------------------------------
P388-01 ONU LINE CARD, NX64 KENT V.35 [*] [*]
==========================================================================================================================
Test P120-02 HDT SYSTEM MONITOR CARD [*] [*]
----------------------------------------------------------------------------------------------------------
and P120-03 HDT SYSTEM MONITOR CARD [*] [*]
----------------------------------------------------------------------------------------------------------
Monitor P190-01 HDT CHANNEL ACCESS CARD [*] [*]
----------------------------------------------------------------------------------------------------------
P190-02 HDT CHANNEL ACCESS CARD [*] [*]
----------------------------------------------------------------------------------------------------------
P191-01 HDT SUBSCRIBER DROP TEST CARD [*] [*]
----------------------------------------------------------------------------------------------------------
P198-01 TEST TIMING SOURCE [*] [*]
----------------------------------------------------------------------------------------------------------
P390-01 ONU CHANNEL ACCESS CARD [*] [*]
----------------------------------------------------------------------------------------------------------
P391-01 ONU SUBSCRIBER DROP TEST CARD [*] [*]
==========================================================================================================================
</TABLE>
PRICES ARE SUBJECT TO CHANGE WITHOUT NOTICE
<PAGE>
Exhibit A
---------
FDS-1 US WEST PRICE LIST July 12, 1996
Page 7 of 7
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
LIST US WEST
MODEL DESCRIPTION PRICE PRICE
==========================================================================================================================
<S> <C> <C> <C> <C>
SAT S100-02 SAT SYSTEM SOFTWARE [*] [*]
----------------------------------------------------------------------------------------------------------
S100-03 SAT SYSTEM SOFTWARE [*] [*]
----------------------------------------------------------------------------------------------------------
S300-01 SAT ACCESSORIES KIT [*] [*]
==========================================================================================================================
Video BACL-3 AMP CLAMP [*] [*]
----------------------------------------------------------------------------------------------------------
BLPI100 POWER INSERTER [*] [*]
----------------------------------------------------------------------------------------------------------
CPS4000 VIDEO CONTROLLER AND POWER SUPPLY [*] [*]
----------------------------------------------------------------------------------------------------------
HLP4000WD/P DFB TRANSMITTER CHASSIS [*] [*]
----------------------------------------------------------------------------------------------------------
HLR3700RM RECEIVER, 750MHz, 30dBm NOMINAL OUTPUT [*] [*]
----------------------------------------------------------------------------------------------------------
HPA4710-4 RF AMPLIFIER, 4 OP, 10dB GAIN, 750MHz [*] [*]
----------------------------------------------------------------------------------------------------------
PWL4708 DFB XMTR, FC/APC, 750MHz, 8dB [*] [*]
----------------------------------------------------------------------------------------------------------
PWL4709 DFB XMTR, FC/APC, 750MHz, 9dB [*] [*]
----------------------------------------------------------------------------------------------------------
PWL4710 DFB XMTR, FC/APC, 750MHz, 10dB [*] [*]
----------------------------------------------------------------------------------------------------------
PWL4711 DFB XMTR, FC/APC, 750MHz, 11dB [*] [*]
----------------------------------------------------------------------------------------------------------
PWL4712 DFB XMTR, FC/APC, 750MHz, 12dB [*] [*]
----------------------------------------------------------------------------------------------------------
PWL4713 DFB XMTR, FC/APC, 750MHz, 13dB [*] [*]
----------------------------------------------------------------------------------------------------------
V300-01 VIDEO RECEIVER, 19 dBmV [*] [*]
----------------------------------------------------------------------------------------------------------
V310-01 VIDEO RECEIVER, 37 dBmV [*] [*]
----------------------------------------------------------------------------------------------------------
V405-01 OPTICAL COUPLER 5.95 [*] [*]
----------------------------------------------------------------------------------------------------------
V410-01 OPTICAL COUPLER 10.90 [*] [*]
----------------------------------------------------------------------------------------------------------
V415-01 OPTICAL COUPLER 15.85 [*] [*]
----------------------------------------------------------------------------------------------------------
V420-01 OPTICAL COUPLER 20.80 [*] [*]
----------------------------------------------------------------------------------------------------------
V425-01 OPTICAL COUPLER 25.75 [*] [*]
----------------------------------------------------------------------------------------------------------
V450-01 OPTICAL COUPLER 50.50 [*] [*]
----------------------------------------------------------------------------------------------------------
V7-ORT-WB1 RETURN TRANSMITTER FOR USE W/V300 OR V310 [*] [*]
==========================================================================================================================
</TABLE>
PRICES ARE SUBJECT TO CHANGE WITHOUT NOTICE
<PAGE>
AMENDMENT NO. ONE (1)
This Amendment No. One (1) is made and entered by and between U S West Business
Resources, Inc. with offices for transaction of business located at 188
Inverness Drive West, Englewood, Colorado, 80112 individually and as agent for
U S West Communications, Inc. ("Customer"), and E/O Networks., with offices for
transaction of business located at 3988 Trust Way, Haward, California 94545
("Supplier").
RECITALS
Customer and Supplier entered into that certain Agreement for Products No.
9600050412, dated September 26, 1996 (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. Product Schedule No. One (1) is hereby modified to add Article No. 10
as follows:
Supplier shall, at Customer's discretion, provide products and services as
described in Agreement No. 9600050412 at Customer's locations to include
Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico,
North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.
2. EFFECTIVE DATE
This Amendment No. One (1) shall be deemed effective October 15, 1996.
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. One
(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. One
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.
U S WEST Business Resources, Inc., E/O Networks
Individually and as agent for U S
WEST Communications, Inc.
/s/ Michael S. Perkins /s/ William Fielding
- ---------------------------------- -----------------------------------
(Authorized Signature) (Authorized Signature)
Michael S. Perkins William Fielding
- ---------------------------------- -----------------------------------
(Print or Type Name of Signatory) (Print or Type Name of Signatory)
Corporate Contract Specialist Vice President Sales
- ---------------------------------- -----------------------------------
(Title) (Title)
November 1, 1996 November 1, 1996
- ---------------------------------- -----------------------------------
(Execution Date) (Execution Date)
<PAGE>
AMENDMENT NO. 2
This Amendment No. 2 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, Colorado 80120 as agent for U S WEST Communications,
Inc., ("Customer"), and E/O Networks, with offices for transaction of business
located at 4010 Point Eden Way, Hayward, California 94545 ("Supplier").
RECITALS
Customer and Supplier entered into that certain Agreement for Products No.
9600050412, dated August 1, 1996, as amended by Amendment No. 1 dated October
15, 1996 (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 term of the Agreement (Article 2., "Term") as extended by Letters
of Extension dated July 31, 1998, September 24, 1998, and October 15,
1998, which are attached hereto and made a part of hereof, will expire
on December 1, 1998. The parties hereby agree that the Agreement shall
not expire on the Expiration Date, but shall renew for an additional
period of time commencing on December 2, 1998 and will expire on July
31, 1999.
1.2. Article 3., "Termination for Convenience" is changed to read as
follows:
1.2.1 Paragraph 3.1 - Change line three from, "thirty (30) days" to
read, "seventy-five (75) days."
1.2.2 Paragraph 3.3 - Change line three from, "Product(s) accepted
--------
prior to the date of termination. . ." to read, "delivered to
U S WEST's designated delivery site prior to the date of
termination. . ."
1.2.3 Paragraph 3.4 - Delete line four as it reads, "or any other
losses or claims whatsoever on account of or arising out of
termination."
1.3. Article 4., "Cancellation of Agreement for Default" is changed to read
as follows: Change paragraph 4.2 to add after the last sentence,
"Supplier shall not be liable for incidental, consequential or
indirect damages, including but not limited to lost profits."
1.4. Article 8., "Warranty" is changed to read as follows:
1.4.1 Change paragraph 8.2, the last sentence to read, "Repaired or
replaced Products shall be warranted for the remainder of the
original warranty period or for six (6) months from the date of
shipment of the repaired or replaced Product to Customer,
whichever is longer."
1.4.2 Paragraph 8.3 - replace with, "Customer's remedy and the entire
liability of Supplier and its suppliers under this limited
warranty will be: at Customer's option, repair or replacement,
at Supplier's expense. Defective Products shall be returned to
Supplier, postage prepaid, and shall be repaired or replaced
with a new or functionally equivalent Product at Supplier's
option, and returned to Customer, postage prepaid. Unless
otherwise agreed, Supplier shall ship repaired or replacement
Products within fifteen (15) days of receipt.
<PAGE>
"Notwithstanding 8.1 and 8.2 above, Supplier makes no other
warranties than those shown above with respect to any products
and disclaims any other warranties, including warranties of
merchantability and fitness for a particular purpose.
"Advanced replacement (24/48 hour emergency replacement
service) is available at no charge plus the applicable repair
charge if out of warranty."
1.4.3 Paragraph 8.6 - delete this paragraph and renumber paragraph
8.7 to read 8.6, now.
1.5. Article 10., "Title; Risk of Loss" is changed to read, "Title to
Product(s) shall pass to Customer at shipment/Origin and Risk of Loss
shall pass to Customer upon delivery to Customer. Transfer of title
shall in no way impact Customer's ability to accept or reject
equipment," in lieu of the first sentence. The second sentence of this
article shall remain as stated in the Agreement.
1.6. Article 16., "Compatibility Information; Licensing Technology" is
changed as follows:
1.6.1. Change paragraph 16.1 to add the following to the end of the
last sentence, "provided such other suppliers are not in direct
competition with Supplier in the design, manufacture, or sales
of equivalent products, subject to mutual review of such
suppliers and mutual agreement prior to disclosure."
1.6.2. Paragraph 16.3 - delete Option (1) and "; or (2)" of the
paragraph.
1.7. Article 19., "Indemnity," all of it is replaced by the following
paragraphs:
"19.1 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
liability claims relating to any Purchases; and/or (3) failure
by Supplier, its officers, employees, agents, subcontractors
and/or representatives to comply with Article 30., "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.
"19.2 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 4., "Cancellation of
Agreement for Default.""
1.8. Article 20., "Patent, Trademark, Copyright or Trade Secret
Indemnification" is changed as follows in paragraph 20.1:
1.8.1 line two, between "all" and "Liabilities" insert, "judgments,
orders, awards ('IP," and after "Liabilities" add "')."
1.8.2 line three, between "any" and "patent", insert, "duly issued
U.S."
1.8.3 line six, between "any" and "patent" insert "duly issued U.S."
1.9. Article 25., "Setoff" - delete this article and renumber the remaining
articles correspondingly.
2
<PAGE>
1.10. Article 27, (now Article 26.), "Assignment" is changed in paragraph
27.1 as follows: Delete and replace with, "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 Customer from dealing solely and directly with Supplier in
all matters under this Agreement.
1.11. Article 37, (now Article 36.), "Limited Liability of U S WEST
Business Resources, Inc." is changed to add the following,
"Notwithstanding the above, U S WEST Business Resources, Inc. hereby
represents and warrants that it is empowered to enter into this
agreement on behalf of Customer(s), and to bind such Customer(s) to
the terms and conditions of this Agreement."
1.12. New Article 43., "Limitation of Supplier's Liability" is added to
read, "Notwithstanding anything in this agreement or otherwise,
Supplier will not be liable with respect any contract, negligence,
strict liability or other legal or equitable theory for: (A) Any
amounts in excess in or the aggregate of the amounts pair to
supplier under the agreement, nor for: (B) Costs of procurement of
substitute goods, technologies, or services; except to the extent
such damages are included in a judgment or settlement against
Customer resulting from a claim against which Customer is
indemnified under Article 19., "Indemnity" or Article 20., "Patent,
Trademark, Copyright or Trade Secret Indemnity."
1.13. New Article 44., "Waiver of Consequential Damages" is added to read,
"In no event shall Supplier or its suppliers be liable for any lost
profits, or indirect, special, incidental, or consequential damages
of any kind regardless of the form or action, whether in contract,
tort (including negligence), strict liability, or otherwise, even if
Supplier or its suppliers have been advised of the possibility of
such damages."
1.14. Product Schedule No. 1 -
1.14.1. Article 4., "Shipping and Delivery" - Change the delivery
interval from thirty days ARO to read, "seven (7) days
after receipt of Order."
1.14.2. Exhibit C, PDS-1 U S WEST Price List, dated October 18,
1996, ten pages, is replaced by the new PDS-1 U S WEST
Price List dated October 1998, eight pages, provided as
Exhibit A to this Amendment.
2. EFFECTIVE DATE
This Amendment No. 2 shall be deemed effective August 2, 1998, through the
new Expiration Date.
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. 2 may
be further amended or altered except by written instrument executed by an
authorized representative of both parties.
3
<PAGE>
The parties intending to be legally bound have executed this Amendment No. 2 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.
US WEST BUSINESS RESOURCES, INC., E/O NETWORKS
as agent for U S WEST
COMMUNICATIONS, INC.
/s/ Joyce Becker /s/ John T. Sines
- ---------------------------------- ----------------------------------------
(Authorized Signature) (Authorized Signature)
Joyce Becker John T. Sines
- ---------------------------------- ----------------------------------------
(Print or Type Name of Signatory) (Print or Type Name of Signatory)
Supplier Manager CFO
- ---------------------------------- ----------------------------------------
(Title) (Title)
November 12, 1998 November 14, 1998
- ---------------------------------- ----------------------------------------
(Execution Date) (Execution Date)
4
<PAGE>
Exhibit A
----------
FDS-1 US WEST PRICE LIST
<TABLE>
<CAPTION>
TYPE MODEL DESCRIPTION N. AM. LIST US WEST
PRICE PRICE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ONU CABINETS
-------------------------------------------------------------------------------------
R000-01 ONU STANDARD CABINET [*] [*]
-------------------------------------------------------------------------------------
R001-01 ONU 19" EXPANDED CABINET [*] [*]
-------------------------------------------------------------------------------------
R032-05 32 LINE ONU, NETWORK POWER [*] [*]
-------------------------------------------------------------------------------------
R032-06 32 LINE ONU, NETWORK POWER W/MS2 CONN [*] [*]
-------------------------------------------------------------------------------------
R032-07 32 LINE ONU, AC POWER [*] [*]
-------------------------------------------------------------------------------------
R032-08 32 LINE ONU, AC POWER W/MS2 CONN [*] [*]
-------------------------------------------------------------------------------------
R032-09 32 LINE ONU, AC POWER W/HUBBLE CONN [*] [*]
-------------------------------------------------------------------------------------
R032-10 32 LINE ONU, AC POWER W/MS2 &HUBBLE [*] [*]
CONN
-------------------------------------------------------------------------------------
R032-11 32 LINE ONU, AC POWER W/DUAL [*] [*]
CHARGERS
-------------------------------------------------------------------------------------
R032-12 32 LINE ONU, AC POWER W/HUBBLE & [*] [*]
DUAL CHARGERS
-------------------------------------------------------------------------------------
R096-05 96 LINE ONU, AC POWER W/HUBBLE CONN [*] [*]
-------------------------------------------------------------------------------------
R096-06 96 LINE ONU, AC POWER W/MS2 &HUBBLE [*] [*]
CONN
-------------------------------------------------------------------------------------
R096-07 96 LINE ONU, AC POWER [*] [*]
-------------------------------------------------------------------------------------
R096-08 96 LINE ONU, AC POWER W/MS2 CONN [*] [*]
-------------------------------------------------------------------------------------
R096-09 96 LINE ONU, NETWORK POWER [*] [*]
-------------------------------------------------------------------------------------
R096-10 96 LINE ONU, NETWORK POWER W/MS2 CONN [*] [*]
-------------------------------------------------------------------------------------
R096-11 96 LINE ONU, AC POWER W/DUAL [*] [*]
CHARGERS
-------------------------------------------------------------------------------------
R096-12 96 LINE ONU, AC POWER W/HUBBLE & [*] [*]
DUAL CHARGERS
-------------------------------------------------------------------------------------
W024-01 24 LINE REMOTE TERMINAL, INDOOR [*] [*]
-------------------------------------------------------------------------------------
W024-02 24 LINE REMOTE TERMINAL, OUTDOOR [*] [*]
=====================================================================--------------==============
ONU SHELVES AND MECHANICAL ACCESSORIES
-------------------------------------------------------------------------------------
M301-01 ONU POLE MOUNT BRACKET KIT [*] [*]
-------------------------------------------------------------------------------------
M301-02 ONU H-FRAME MOUNTING KIT [*] [*]
-------------------------------------------------------------------------------------
M301-11 ONU POLE MOUNT BRACKET KIT, EXTENDED [*] [*]
(mounts away from pole)
-------------------------------------------------------------------------------------
M302-01 ONU BASE MOUNT KIT, 10" HIGH [*] [*]
-------------------------------------------------------------------------------------
M302-11 ONU BASE MT KIT, 2" HIGH [*] [*]
-------------------------------------------------------------------------------------
M303-01 ONU BASE MT FOR 19" CABINET, 10" HIGH [*] [*]
-------------------------------------------------------------------------------------
M304-01 ONU POLE MT FOR 19" CABINET [*] [*]
-------------------------------------------------------------------------------------
M306-01 RT POLE MOUNT KIT [*] [*]
-------------------------------------------------------------------------------------
M307-01 ONU CARDBOARD MOUNTING TEMPLATE [*] [*]
-------------------------------------------------------------------------------------
M312-01 ONU DOOR ALARM KIT [*] [*]
-------------------------------------------------------------------------------------
M332-05 32 LINE SHELF [*] [*]
-------------------------------------------------------------------------------------
M332-06 32 LINE SHELF WITH HARNESS & MS2 [*] [*]
-------------------------------------------------------------------------------------
M332-07 32 LINE SHELF W/HARNESS & VF STUB [*] [*]
-------------------------------------------------------------------------------------
M364-05 64 LINE EXPANSION SHELF [*] [*]
-------------------------------------------------------------------------------------
M364-06 64 LINE EXPANSION SHELF W/HARNESS & [*] [*]
MS2
-------------------------------------------------------------------------------------
M364-07 64 LINE EXPAND SHELF W/HARNESS & VF [*] [*]
STUB
=====================================================================--------------==============
ONU AC POWER
-------------------------------------------------------------------------------------
B340-01 BATTERY, 40 AH, 12 VOLT, GEL CELL [*] [*]
-------------------------------------------------------------------------------------
{{M319-01 ONU SINGLE CHARGER INTERCONNECT [*] [*]
BOARD (used with P319-01)
-------------------------------------------------------------------------------------
M319-02 ONU DUAL CHARGER INTERCONNECT BOARD [*] [*]
-------------------------------------------------------------------------------------
M319-03 ONU SINGLE CHARGER INTERCONNECT [*] [*]
BOARD (used with P319-02)
-------------------------------------------------------------------------------------
M328-01 ONU FAN UPGRADE KIT (use with [*] [*]
M319-01)
-------------------------------------------------------------------------------------
M328-11 ONU FAN KIT (use with M319-03) [*] [*]
-------------------------------------------------------------------------------------
M345-01 BATTERY HEATER PAD [*] [*]
-------------------------------------------------------------------------------------
P300-02 ONU POWER/RING CARD (-48 VDC IN) [*] [*]
-------------------------------------------------------------------------------------
P305-01 ONU POWER/RING CARD, FIBER(+/- 140 [*] [*]
VDC IN)
-------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit A
----------
FDS-1 US WEST PRICE LIST
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
P305-02 POWER/RING CARD, T1/HDSL (+/-140 VDC [*] [*]
IN)
-------------------------------------------------------------------------------------
P310-01 DUAL POWER CARD (+/- 140 VDC OUT)DUAL [*] [*]
-------------------------------------------------------------------------------------
{{P319-01 ONU BATTERY CHARGER [*] [*]
-------------------------------------------------------------------------------------
P319-02 ONU BATTERY CHARGER [*] [*]
=====================================================================--------------==============
ONU CABLES AND ACCESSORIES
-------------------------------------------------------------------------------------
B301-01 ONU SURGE PROTECTORS (QTY 10) [*] [*]
-------------------------------------------------------------------------------------
B302-01 ONU SURGE PROTECTORS (QTY 10) - RUS [*] [*]
-------------------------------------------------------------------------------------
B360-01 PLASTIC HANDHOLE LID (UNASSEMBLED) [*] [*]
-------------------------------------------------------------------------------------
B405-01 VF INSERTION TOOL [*] [*]
-------------------------------------------------------------------------------------
C311-10 VF STUB, 50PR, 10 MTR [*] [*]
-------------------------------------------------------------------------------------
C312-10 VF STUB, 50PR, W/MS2 CONN, 10 MTR [*] [*]
-------------------------------------------------------------------------------------
C313-10 VF STUB, RT, 50PR, 10 MTR (outdoor [*] [*]
cable, already included in W024-02)
-------------------------------------------------------------------------------------
C321-10 VF STUB 100 PR, 10 MTR [*] [*]
-------------------------------------------------------------------------------------
C322-10 VF STUB 100PR, W/MS2 CONN, 10 MTR [*] [*]
-------------------------------------------------------------------------------------
F300-02 FIBER PIGTAIL KIT W/FC CONNECTOR, [*] [*]
2MTR
-------------------------------------------------------------------------------------
F310-25 FIBER OPTIC STUB,4FC/4 SPARE FBR, 25 [*] [*]
MTR
-------------------------------------------------------------------------------------
F311-25 FIBER OPTIC STUB, 4FC,1SC, [*] [*]
25MTR-TWIN PACK
-------------------------------------------------------------------------------------
M305-02 ONU SPARES KIT, MISC [*] [*]
-------------------------------------------------------------------------------------
M310-01 ONU FIBER SPLICE TRAY [*] [*]
-------------------------------------------------------------------------------------
M311-01 ONU CABLE PORT ASSEMBLY 1" [*] [*]
-------------------------------------------------------------------------------------
M311-02 ONU CABLE PORT ASSEMBLY 2" [*] [*]
-------------------------------------------------------------------------------------
M324-01 PROTECTOR BOARD FOR RT (already [*] [*]
included in W024-02)
=====================================================================--------------==============
RACK MOUNT ONU MECHANICAL ASSEMBLIES
-------------------------------------------------------------------------------------
M224-01 24 LINE REMOTE TERMINAL SHELF [*] [*]
-------------------------------------------------------------------------------------
M232-01 32 LINE ONU BASE SHELF [*] [*]
-------------------------------------------------------------------------------------
M264-01 64 LINE ONU EXPANSION SHELF [*] [*]
-------------------------------------------------------------------------------------
M221-01 AC POWER ASSEMBLY, SINGLE CHARGER [*] [*]
-------------------------------------------------------------------------------------
M222-01 AC POWER ASSEMBLY, DUAL CHARGER [*] [*]
-------------------------------------------------------------------------------------
M223-01 AC POWER ASSEMBLY, TWO SINGLE [*] [*]
CHARGERS
-------------------------------------------------------------------------------------
M201-01 ONU MOUNTING EARS, 19" RACK [*] [*]
-------------------------------------------------------------------------------------
M202-01 ONU MOUNTING EARS, 23" RACK [*] [*]
-------------------------------------------------------------------------------------
M203-01 ONU FIBER GUARD ASSEMBLY [*] [*]
-------------------------------------------------------------------------------------
M204-01 ONU REAR COVER ASSEMBLY [*] [*]
-------------------------------------------------------------------------------------
M205-01 ONU REAR COVER ASSEMBLY, EXTEND [*] [*]
-------------------------------------------------------------------------------------
M206-01 RT MOUNTING EARS, 19" RACK [*] [*]
-------------------------------------------------------------------------------------
M207-01 RT MOUNTING EARS, 23" RACK [*] [*]
-------------------------------------------------------------------------------------
B201-01 SHORTING PLUGS (QTY 10) [*] [*]
-------------------------------------------------------------------------------------
B241-01 BATTERY MOUNTING TRAY, 19" [*] [*]
-------------------------------------------------------------------------------------
B242-01 BATTERY MOUNTING TRAY, 23" [*] [*]
-------------------------------------------------------------------------------------
C213-05 VF CABLE STUB, HDSL RT, 50 PR, 5 MTR [*] [*]
-------------------------------------------------------------------------------------
C213-20 VF CABLE STUB, HDSL RT, 50 PR, 20 MTR [*] [*]
-------------------------------------------------------------------------------------
C221-04 VF CABLE STUB, ONU 100 PR, 4 MTR [*] [*]
-------------------------------------------------------------------------------------
C221-30 VF CABLE STUB, ONU 100 PR, 30 MTR [*] [*]
=====================================================================--------------==============
HDT AND CO SHELVES, POWER, CABLES AND ACCESSORIES
-------------------------------------------------------------------------------------
B110-01 BOLTED ALUMINUM RACK [*] [*]
-------------------------------------------------------------------------------------
B112-01 FIBER TERMINATION PANEL [*] [*]
-------------------------------------------------------------------------------------
B170-01 FUSE & ALARM PANEL [*] [*]
-------------------------------------------------------------------------------------
C100-30 VF CABLE, 100PR, 30M LONG, RIGHT [*] [*]
FROM BP
-------------------------------------------------------------------------------------
C101-30 VF CABLE, 100PR, 30 M LONG, LEFT [*] [*]
FROM BP
-------------------------------------------------------------------------------------
C102-07 HDT EXPANSION SHELF CABLE, 7 Ft. [*] [*]
(2.13M) (used when connecting
M192-04 to M192-04)
</TABLE>
<PAGE>
Exhibit A
----------
FDS-1 US WEST PRICE LIST
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
C102-09 HDT EXPANSION SHELF CABLE, 9 Ft. [*] [*]
(2.74M) (used when connecting
M192-04 to M192-04)
-------------------------------------------------------------------------------------
C102-25 HDT EXPANSION SHELF CABLE, 25 Ft. [*] [*]
(7.62M) (used when connecting
M192-04 to M192-04)
-------------------------------------------------------------------------------------
F100-03 FIBER JUMPER KIT, 4EA W/FC CONN, 3M [*] [*]
LONG
-------------------------------------------------------------------------------------
F100-10 FIBER JUMPER KIT, 4EA W/FC CONN, 10M [*] [*]
LONG
-------------------------------------------------------------------------------------
M101-01 MOUNTING EARS FOR 23" RACK (POWER) [*] [*]
-------------------------------------------------------------------------------------
M105-01 HDT SPARES KIT, MISC [*] [*]
-------------------------------------------------------------------------------------
M110-01 RS232 ADAPTER BOARD [*] [*]
-------------------------------------------------------------------------------------
M111-01 HDT MODEM MODULE [*] [*]
-------------------------------------------------------------------------------------
M120-01 NETWORK POWER SHELF [*] [*]
-------------------------------------------------------------------------------------
M192-04 192 LINE HDT SHELF [*] [*]
-------------------------------------------------------------------------------------
P100-01 HDT SHELF POWER CARD [*] [*]
=====================================================================--------------==============
TRANSPORT AND TIMING MODULES
-------------------------------------------------------------------------------------
M340-01 ONU T1 SURGE PROTECTOR [*] [*]
-------------------------------------------------------------------------------------
P125-02 HDT EXPANSION CARD FOR 384 LINE [*] [*]
SYSTEM
-------------------------------------------------------------------------------------
P130-02 HDT MUX CARD [*] [*]
-------------------------------------------------------------------------------------
P140-02 HDT T1 TRANSPORT - SINGLE [*] [*]
-------------------------------------------------------------------------------------
P141-01 HDT T1 HDSL TRANSPORT, W/PWR (A) [*] [*]
-------------------------------------------------------------------------------------
P141-11 HDT TI HDSL TRANSPORT, W/O PWR (A) [*] [*]
-------------------------------------------------------------------------------------
P141-21 HDT T1 HDSL TRANSPORT W/PWR (P) [*] [*]
-------------------------------------------------------------------------------------
P141-31 HDT T1 HDSL TRANSPORT W/O PWR (P) [*] [*]
-------------------------------------------------------------------------------------
P145-02 HDT FIBER OPTIC INTFC CARD -FC CONN [*] [*]
-------------------------------------------------------------------------------------
P146-01 HDT COPPER TRANSMIT TIMING CARD (for [*] [*]
M192-04 shelf and earlier)
-------------------------------------------------------------------------------------
P159-01 COMPOSITE CLOCK INTERFACE [*] [*]
-------------------------------------------------------------------------------------
P340-02 ONU TI TRANSPORT - DUAL [*] [*]
-------------------------------------------------------------------------------------
P341-01 RT T1 HDSL TRANSPORT (A) [*] [*]
-------------------------------------------------------------------------------------
P341-21 RT T1 HDSL TRANSPORT (P) [*] [*]
-------------------------------------------------------------------------------------
P345-02 ONU FIBER OPTIC INTFC CARD -FC CONN [*] [*]
=====================================================================--------------==============
POTS CARDS
-------------------------------------------------------------------------------------
P182-02 HDT LINE CARD, US POTS -4 LINES [*] [*]
-------------------------------------------------------------------------------------
P382-02 ONU LINE CARD, US POTS-4 LINES [*] [*]
-------------------------------------------------------------------------------------
P184-02 HDT LINE CARD, LS/GS-4 LINES [*] [*]
-------------------------------------------------------------------------------------
P384-02 ONU LINE CARD, LS/GS-4LINES [*] [*]
=====================================================================--------------==============
SPECIAL SERVICES LINE CARDS
-------------------------------------------------------------------------------------
P150-01 HDT LINE CARD, DS1 SERVICE-SINGLE [*] [*]
-------------------------------------------------------------------------------------
P152-01 HDT LINE CARD, DS1 SERVICE-DUAL [*] [*]
-------------------------------------------------------------------------------------
P350-01 ONU LINE CARD, DS1 SERVICE-SINGLE [*] [*]
-------------------------------------------------------------------------------------
P350-02 ONU LINE CARD, DS1 SERVICE-SINGLE, [*] [*]
W/ SPAN PWR
-------------------------------------------------------------------------------------
M350-01 ONU DS1 CONNECTOR BOARD [*] [*]
-------------------------------------------------------------------------------------
P170-01 HDT LINE CARD, COIN-DUAL [*] [*]
-------------------------------------------------------------------------------------
P170-02 HDT LINE CARD, COIN-DUAL ( supports [*] [*]
floating battery switches, MLT/PGTC
& copper based drop testing)
-------------------------------------------------------------------------------------
P370-02 ONU LINE CARD, COIN-DUAL [*] [*]
-------------------------------------------------------------------------------------
P172-01 HDT LINE CARD, 4WIRE TO-DUAL [*] [*]
-------------------------------------------------------------------------------------
P372-01 ONU LINE CARD, 4WIRE TO-DUAL [*] [*]
-------------------------------------------------------------------------------------
P176-01 HDT LINE CARD, 4WIRE E&M TYPES 1 & 5 [*] [*]
-------------------------------------------------------------------------------------
P376-01 ONU LINE CARD, 4WIRE E&M TYPES 1 & 5 [*] [*]
-------------------------------------------------------------------------------------
P180-01 HDT LINE CARD, ISDN+POTS [*] [*]
-------------------------------------------------------------------------------------
P380-01 ONU LINE CARD, ISDN+POTS [*] [*]
-------------------------------------------------------------------------------------
P180-02 HDT LINE CARD, ISDN [*] [*]
-------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit A
----------
FDS-1 US WEST PRICE LIST
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
P380-02 ONU LINE CARD, ISDN [*] [*]
-------------------------------------------------------------------------------------
P185-01 HDT LINE CARD, ALL RATE DDS+DUAL POTS [*] [*]
-------------------------------------------------------------------------------------
P385-01 ONU LINE CARD, ALL RATE DDS+DUAL POTS [*] [*]
-------------------------------------------------------------------------------------
P185-02 HDT LINE CARD, ALL RATE DDS [*] [*]
-------------------------------------------------------------------------------------
P385-02 ONU LINE CARD, ALL RATE DDS [*] [*]
-------------------------------------------------------------------------------------
P186-01 HDT LINE CARD, P-PHONE-4 LINES [*] [*]
-------------------------------------------------------------------------------------
P386-01 ONU LINE CARD, P-PHONE-4 LINES [*] [*]
-------------------------------------------------------------------------------------
P188-01 HDT DSX1 GROOMER CARD [*] [*]
=====================================================================--------------==============
TEST AND MONITOR
-------------------------------------------------------------------------------------
M191-01 MLT/PGTC INTERFACE SHELF [*] [*]
-------------------------------------------------------------------------------------
<P120-03/3.4> HDT SYSTEM MONITOR CARD, V3.4FW [*] [*]
-------------------------------------------------------------------------------------
P120-03/3.5 HDT SYSTEM MONITOR CARD, V3.5FW [*] [*]
(adds support for copper based SAT
drop testing)
-------------------------------------------------------------------------------------
P190-02 HDT CHANNEL ACCESS CARD [*] [*]
-------------------------------------------------------------------------------------
P191-02 HDT SUBSCRIBER DROP TEST CARD [*] [*]
-------------------------------------------------------------------------------------
P198-01 TEST TIMING SOURCE [*] [*]
-------------------------------------------------------------------------------------
P390-01 ONU CHANNEL ACCESS CARD [*] [*]
-------------------------------------------------------------------------------------
P391-02 ONU SUBSCRIBER DROP TEST CARD [*] [*]
-------------------------------------------------------------------------------------
S902-01/3.5 P120 SYSTEM MONTIOR FW 3.5 UPGRADE [*] [*]
KIT (upgrade existing P120 to v 3.5)
=====================================================================--------------==============
SAT
-------------------------------------------------------------------------------------
S100-03/3.1 SAT SYSTEM SOFTWARE [*] [*]
-------------------------------------------------------------------------------------
S300-01 SAT ACCESSORIES KIT [*] [*]
-------------------------------------------------------------------------------------
S901-01/3.1 SAT SOFTWARE UPGRADE KIT (upgrade [*] [*]
existing SAT license holders to rev
3.1)
=====================================================================--------------==============
TECHNICAL GUIDES
-------------------------------------------------------------------------------------
D100-01 FDS-1 TECHNICAL GUIDES, BINDER [*] [*]
(covers FDS-1 FiberLean and
CoperLean, does not include HiLink)
-------------------------------------------------------------------------------------
D101-01 FDS-1 TECHNICAL GUIDES, CD ROM [*] [*]
(covers FDS-1, FiberLean, and
CopperLean, does not include HiLink.
CD ROM version does not include unit
descriptions.)
-------------------------------------------------------------------------------------
Note: HDT models (M192-0X) include the
FDS-1 System Description,
Installation Guide and Maintenance
Guide.
RT models (W024-0X) include the
HDSL Feature Supplement.
Other models include Unit
Descriptions
-------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 10.10
ASSIGNMENT, ASSUMPTION AND ACCEPTANCE
OF AGREEMENT FOR PRODUCTS
This Assignment, Assumption and Acceptance of Agreement for Products dated as of
this 14 day of July, 1999 ("Assignment") is made by and between U S WEST
Communications, Inc., with offices for transaction of business located at 700
West Mineral Avenue, Littleton, Colorado 80120 ("Customer"), E/O Networks,
Chapter 11 Debtor-in Possession, with offices for transaction of business
located at 4010 Point Eden Way, Hayward, California 94545 ("Assignor"), and
GoDigital Telecommunications Inc., with offices for transaction of business
located at 41305 Albrae Street, Fremont, California 94538 ("Assignee").
Customer, Assignor and Assignee are collectively referred to herein as the
"Parties." This Assignment shall be effective as of, and conditioned upon, the
closing of the transaction contemplated by the Asset Purchase Agreement
(hereinafter defined) (the "Effective Date"), and shall have no effect
whatsoever in the event that the transactions contemplated by the Asset Purchase
Agreement do not close.
RECITALS
1. Assignor and Assignee are parties to an Asset Purchase Agreement dated
June 2, 1999 pursuant to which Assignor agreed to sell, transfer, and
assign to Assignee certain of its assets and liabilities as set forth
more fully therein (the "Asset Purchase Agreement").
2. In conjunction with the Asset Purchase Agreement, Assignor and
Assignee desire to effectuate the assignment to and assumption by
Assignee of the Agreement for Products 9600050412 between Assignor and
Customer dated September 26, 1996, as amended (the "Agreement"). Upon
the Effective Date, Assignee and Assignor will be fully empowered to
take such actions as are necessary to effectuate such assignment and
assumption by entering into this Assignment.
3. Customer desires to consent to the assignment of the Agreement, as
required by Section 27 thereof.
4. Assignee and Customer desire to extend the Agreement for five months
for the purpose of providing Assignee and Customer time to negotiate a
new contract between the Customer and the Assignee and Assignor is
willing to accommodate Assignee and Customer in this regard.
AGREEMENT
In consideration of the mutual representations, promises, covenants and
agreements contained herein, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows.
1. The foregoing Recitals are true and correct as stated.
2. Effective as of the Effective Date, Assignor hereby assigns to
Assignee, and Assignee hereby assumes from Assignor, all of the rights
and obligations of Assignor in and to the Agreement. On the Effective
Date, Assignor shall automatically be released and relieved of and
from any further liability or obligation under the Agreement (as
extended hereby) in the manner provided in Section 365 of the United
States Bankruptcy Code. Notwithstanding the foregoing, as between
Assignor and Assignee, nothing in this Agreement shall in any way
affect the rights and obligations of Assignor and Assignee under
Section 1.2(a) of the Asset Purchase Agreement.
3. Unless otherwise notified, all payments should be made to the address
provided on the invoice. Invoices will originate from E/O Networks
prior to the Effective Date, and from GoDigital Telecommunications
after the Effective Date.
4. Assignor and Customer hereby represent and warrant that the documents
attached hereto as Exhibit A constitute a complete and correct copy of
the Agreement and the Agreement has not been modified in any respect
except as set forth on Exhibit A. Customer hereby represents and
warrants to Assignor and Assignee that as of the date of this
Assignment, there are no defaults on Assignor's part under the
Agreement. Assignor represents and warrants to Assignee and Customer
that, to the actual knowledge
<PAGE>
of Assignor's executive staff as of the date of this Assignment, there
are no defaults on Customer's part under the Agreement.
5. Customer hereby (a) consents to this Assignment and the assignment and
assumption contemplated hereby, provided however, that this consent
shall only apply to the assignment of the Agreement to GoDigital
Telecommunications, Inc. and, in the event that the closing of the
transaction contemplated by the Asset Purchase Agreement does not
occur, this consent shall be withdrawn and shall not apply to the
assignment of the Agreement to any other party and (b) agrees that
upon the Effective Date, the Agreement shall be and continue to remain
in full force and effect and Customer waives any right it may have to
terminate the Agreement based upon or arising out of any defaults
existing prior to the Effective Date (including any right to terminate
the Agreement based upon or arising out of the bankruptcy of
Assignor).
6. As of the Effective Date the Term of the Agreement is hereby extended
to December 31, 1999.
7. This Agreement shall not confer any rights or remedies upon any person
other than the parties hereto. This Agreement constitutes the entire
agreement between the parties and supersedes any prior understandings,
agreements, or representations by or between the parties, written or
oral, that may have related in any way to the subject matter hereof.
This Agreement shall be binding upon and inure to the benefit of the
parties named herein and their respective successors and permitted
assigns. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. All notices, requests,
demands, claims, and other communications hereunder shall be in
writing made as set fort in Section 40 of the Agreement, except that
notices to Supplier shall be addressed to Assignee at the address set
forth above, attention Frank Akers.
[Signatures to follow.]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of
the date first written above
CUSTOMER:
U S WEST Communications, Inc.
/s/ Gary Patterson
By: ------------------------------
Supplier Manager
Its: ------------------------------
7-19-99
Date: ------------------------------
ASSIGNOR:
E/O Networks
Chapter 11 Debtor and
Debtor-in Possession
By: /s/ L. Hutchinson
------------------------------
Its: President & CEO
------------------------------
Date: 7/14/99
------------------------------
ASSIGNEE:
GoDigital Telecommunications, Inc.
By: /s/ Frank I. Akers
------------------------------
Its: President and CEO
------------------------------
Date: July 14, 1999
------------------------------
[Signature page to Assignment, Assumption and Acceptance of Agreement for
Products]
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