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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported: MAY 1, 2000
HYBRID NETWORKS, INC.
(Exact name of registrant as specified in this charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-23289 77-02520931
(Commission File Number) (I.R.S. Employer Identification Number)
6409 GUADALUPE MINES ROAD, SAN JOSE, CA 95120
(Address of principal executive offices) (Zip Code)
(408) 323-6250
(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS.
On May 1, 2000, Hybrid Networks, Inc. and Sprint/United Management
Company, a subsidiary of Sprint Corporation, entered into a Purchase of
Equipment and Services Agreement whereby Hybrid agreed to sell products and
services to support the wireless multi-channel multipoint distribution system
(MMDS) being developed by Sprint for markets in the United States. The
agreement sets forth (i) the terms of orders that Sprint or any Affiliate
(as defined) may place with Hybrid during the term of the agreement and (ii)
the requirements that Hybrid must meet to supply products and services.
In general, the agreement provides that Sprint will furnish Hybrid
with monthly non-binding rolling forecasts of expected orders for equipment
over the next 180 days. Hybrid must accept any orders that do not materially
exceed the forecast or certain manufacturing capacity or lead times. Hybrid
must pay specified damages and other amounts if orders are not shipped by
prescribed dates.
Payment by Sprint for products shipped by Hybrid under the contract
is due within 30 days after shipment, except that, for headend (base station)
equipment incorporated into a new System (as defined), Hybrid will invoice
40% of the purchase price on shipment, 45% after the equipment satisfies
certain substantial completion test procedures (expected to take
approximately 60 days) and the balance (15%) after the equipment satisfies
certain final acceptance test procedures. Prior to deployment of any System
by Sprint, Hybrid and Sprint will perform end-to-end testing of the System in
Phoenix.
Hybrid will to provide installation, technical support,
trouble-shooting and other services, as well as training and manuals. In
general, Hybrid may submit invoices for services monthly.
Sprint agreed that it will pay Hybrid $10 million by December 31,
2000 for equipment and services purchased under the contract (including all
equipment and services purchased by Sprint or certain affiliates after
September 30, 1999), provided that the equipment achieves prescribed
substantial completion milestones. This purchase commitment will be
terminated, however, if Sprint and Hybrid are unable to demonstrate that the
system in Phoenix is operating in accordance with certain specifications and
has satisfied certain substantial test procedures within 45 days after May 1,
2000.
Hybrid has agreed to develop new products and to enhance existing
products according to certain requirements, including prescribed development
schedules, milestones and testing procedures. These developments may require
substantial expenditures. If Sprint pays for any aspect of the development,
Sprint will own the aspect paid for and the related intellectual property.
The agreement provides for certain warranties and indemnities by
Hybrid and for additional remedies in the event of certain manufacturing
defects. Hybrid is required to support the headend equipment it produces
under the agreement for eight years after the last shipment.
Hybrid agreed to provide as soon as possible, but in no event later
than June 30, 2001, an application programming interface and reference
design, and to license the interface and design to certain third parties on
commercially reasonable terms so that they can produce competing routers and
related equipment (but not headends) that interface with Hybrid's headends.
The agreement has a term of five years and is automatically renewable
thereafter for successive one-year periods unless either party gives
appropriate notice to the other party at least 180 days prior to the then
expiration dates. Either party may terminate the agreement upon a material
breach by the other party and after certain cure periods have elapsed. If
the agreement is terminated by Sprint as a result of a material breach by
Hybrid within certain prescribed categories (or if any such breach occurs
after the occurrence of a Hybrid Insolvency, as defined), Sprint will have a
license, and access, to Hybrid's technology for use by Sprint and its
suppliers in connection with the provision of wireless broadband
2
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services to Sprint's and its Affiliates customers, other than broadband
access providers owning wireless frequencies.
The agreement requires Hybrid to give Sprint most-favored-customer
status.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibit is filed herewith:
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
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<S> <C>
10.1 Purchase of Equipment and Services Agreement between
Sprint/United Management Company and the Registrant dated
May 1, 2000
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: May 10, 2000 Hybrid Networks, Inc.
By: /s/ Michael D. Greenbaum
---------------------------
Michael D. Greenbaum,
Chief Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<S> <C>
10.1 Purchase of Equipment and Services Agreement between
Sprint/United Management Company and the Registrant dated
May 1, 2000
</TABLE>
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Exhibit 10.1
[LOGO] SPRINT
PURCHASE OF EQUIPMENT AND SERVICES AGREEMENT
BETWEEN
SPRINT/UNITED MANAGEMENT COMPANY
AND
HYBRID NETWORKS, INCORPORATED
DATED MAY 1, 2000
CONTRACT NUMBER CM000490SBS
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TABLE OF CONTENTS
<TABLE>
<S> <C>
1.0 HEADINGS AND DEFINITIONS ..................................................................................1
2.0 ORDER .....................................................................................................4
2.1 ORDER TERMS .............................................................................................4
2.2 ORDER REQUIREMENTS ......................................................................................4
2.3 BRANDING AND LABELING ...................................................................................4
2.4 PURCHASE REQUIREMENTS ...................................................................................5
2.5 ADDITIONAL OR INCONSISTENT TERMS ........................................................................5
2.6 FORECAST ................................................................................................5
2.7 CPE EQUIPMENT LEAD TIME REDUCTION .......................................................................5
3.0 ACCEPTANCE OF ORDER .......................................................................................5
3.1 ACCEPTANCE ..............................................................................................5
3.2 SHIPMENT DATE ...........................................................................................5
3.3 DAMAGES FOR DELAY .......................................................................................5
3.4 SHIPPING PROCEDURES .....................................................................................6
3.5SHIPPING PRIORITY .............................................................................................6
4.0 MODIFICATION OF ORDERS ....................................................................................6
4.1 CANCELLATION ............................................................................................6
4.2 POSTPONEMENT ............................................................................................6
5.0 DISCONTINUATION ...........................................................................................6
6.0 PREPARATION AND APPROVAL OF THE SPECIFICATIONS FOR THE ENHANCED EQUIPMENT..................................7
6.1 HIGH LEVEL REQUIREMENTS .................................................................................7
6.2 DETAILED REQUIREMENTS DEVELOPMENT .......................................................................7
6.3 ENHANCED EQUIPMENT DEVELOPMENT ..........................................................................7
7.0 TESTING AND ACCEPTANCE ....................................................................................7
7.1 TESTING REQUIREMENTS ....................................................................................7
7.2 ACCEPTANCE PLAN DEVELOPMENT .............................................................................7
7.3 ENGINEERING PRODUCT DEVELOPMENT TEST ....................................................................7
7.4 USER ACCEPTANCE TEST ....................................................................................8
7.5 SPRINT DELAYS ...........................................................................................8
7.6 MILESTONE ACCEPTANCE CERTIFICATES .......................................................................8
8.0 FUTURE ENHANCEMENTS TO THE EQUIPMENT ......................................................................8
8.1 DEVELOPMENT .............................................................................................8
8.2 PRIORITY ................................................................................................9
8.3 EXCLUSIVITY .............................................................................................9
9.0 OWNERSHIP OF INTELLECTUAL PROPERTY ...........................................................................9
9.1 WORK PRODUCT.............................................................................................9
9.2 LICENSE .................................................................................................9
10.0 SCOPE CHANGE ..............................................................................................9
11.0 SYSTEM INTEROPERABILITY; SYSTEM ACCEPTANCE ...............................................................10
11.1 SYSTEM ACCEPTANCE ......................................................................................10
11.2 SUPPLIER ASSISTANCE ....................................................................................10
12.0 TEST-BED LABORATORY ......................................................................................10
13.0 SPARING ..................................................................................................10
14.0 OPERATING AND MAINTENANCE MANUALS ........................................................................10
14.1 CPE EQUIPMENT MANUALS ..................................................................................10
14.2 BASE STATION EQUIPMENT MANUALS .........................................................................10
14.3 STANDARDS FOR MANUALS ..................................................................................11
15.0 THIRD PARTY SUPPLIERS ....................................................................................11
15.1 ALTERNATIVE COMPONENTS .................................................................................11
15.2 THIRD PARTY CONSENTS ...................................................................................11
16.0 SPRINT TRADEMARK, LICENSE AND BRANDING ...................................................................11
16.1 LICENSE GRANT ..........................................................................................11
16.2 NOTICES ................................................................................................11
</TABLE>
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<TABLE>
<S> <C>
16.3 USES ...................................................................................................12
16.4 SUPPLIER ASSISTANCE ....................................................................................12
16.5 UNAUTHORIZED USES ......................................................................................12
17.0 TERM AND TERMINATION .....................................................................................12
17.1 TERM ...................................................................................................12
17.2 TERMINATION ............................................................................................12
17.3 TERMINATION BY SUPPLIER ................................................................................12
17.4 CONSEQUENCES OF TERMINATION ............................................................................13
18.0 AFFILIATE TRANSACTIONS ...................................................................................13
18.1 AFFILIATE ORDERS .......................................................................................13
18.2 AFFILIATES .............................................................................................13
18.3 AFFILIATE RIGHTS .......................................................................................13
19.0 ASSIGNMENT ...............................................................................................14
20.0 TECHNOLOGY ESCROW AND AVAILABILITY .......................................................................14
20.1 FUTURE ASSURANCES ......................................................................................14
20.2 DEPOSIT OF ESCROW TECHNOLOGY ...........................................................................14
20.3 RELEASE OF ESCROW TECHNOLOGY ...........................................................................14
20.4 NON-ESCROW TECHNOLOGY ..................................................................................14
20.5 MAINTENANCE RELEASE OF TECHNOLOGY ......................................................................15
20.6 INSOLVENCY RELEASE OF TECHNOLOGY .......................................................................15
20.7 BANKRUPTCY OF SUPPLIER .................................................................................15
20.8 NO WARRANTY ............................................................................................15
21.0 PRICE AND PRICE WARRANTY .................................................................................15
21.1 PRICING ................................................................................................15
21.2 MOST FAVORED CUSTOMER STATUS ...........................................................................16
22.0 SOFTWARE LICENSE .........................................................................................17
23.0 INVOICING AND PAYMENT ....................................................................................16
23.1 INVOICE REQUIREMENTS ...................................................................................16
23.2 INVOICE ................................................................................................17
24.0 SHIPMENT, TITLE & RISK OF LOSS ...........................................................................17
24.1 SHIPMENT ...............................................................................................17
24.2 EARLY SHIPMENT .........................................................................................17
24.3 FACTORY TESTING ........................................................................................17
25.0 INSPECTION AND REJECTION .................................................................................17
25.1 INSPECTION OF DELIVERABLES .............................................................................17
25.2 DEFECTIVE DELIVERABLES .................................................................................18
25.3 RIGHT TO INSPECT AND TEST ..............................................................................18
26.0 WARRANTIES ...............................................................................................18
26.1 EQUIPMENT WARRANTY .....................................................................................18
26.2 EQUIPMENT WARRANTY TERM ................................................................................18
26.3 PATTERN DEFECTS ........................................................................................18
26.4 BACKWARDS COMPATIBILITY ................................................................................19
26.5 DISCLAIMER .............................................................................................19
27.0 LIABILITY AND INDEMNIFICATION ............................................................................19
27.1 THIRD PARTY CLAIMS .....................................................................................19
27.2 PRODUCT LIABILITY CLAIMS ...............................................................................19
27.3 TAXES AND BENEFITS .....................................................................................20
27.4 INFRINGEMENT ...........................................................................................19
27.5 INDEMNIFICATION PROCEDURES .............................................................................20
28.0 LIMITATION ON LIABILITY ..................................................................................20
28.1 EXCLUSION OF DAMAGES ...................................................................................20
28.2 TOTAL LIABILITY ........................................................................................21
28.3 EXCLUSION OF CLAIMS ....................................................................................21
29.0 INSURANCE ................................................................................................21
29.1 INSURANCE OBLIGATIONS ..................................................................................21
29.2 CERTIFICATE OF INSURANCE ...............................................................................21
29.3 No INSURANCE LIMITATION ................................................................................22
</TABLE>
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<TABLE>
<S> <C>
30.0 DISPUTE RESOLUTION .......................................................................................22
30.1 NEGOTIATION...........................................................................................22
302 WAIVER OF JURY .......................................................................................22
30.3 VENUE ................................................................................................22
31.0 FEDERAL REQUIREMENTS .....................................................................................22
31.1 FEDERAL ACQUISITION REQUIREMENTS .....................................................................22
31.2 GOVERNMENT END USERS .................................................................................22
31.3 SUBCONTRACTING OPPORTUNITIES .........................................................................22
32.0 PRODUCT SAFETY NOTIFICATIONS .............................................................................22
33.0 INTELLECTUAL PROPERTY ....................................................................................22
34.0 PROPRIETARY INFORMATION ..................................................................................23
34.1 SPRINT PROPRIETARY INFORMATION .......................................................................24
34.2 SUPPLIER PROPRIETARY INFORMATION .....................................................................24
34.3 CONFIDENTIALITY OF PROPRIETARY INFORMATION ...........................................................23
34.4 EXCEPTIONS FOR CONFIDENTIALITY .......................................................................23
34.5 INJUNCTIVE RELIEF FOR PROPRIETARY INFORMATION ........................................................24
35.0 INDEPENDENT CONTRACTOR ...................................................................................24
35.1 INDEPENDENT CONTRACTORS ..............................................................................24
35.2 SPRINT'S RESPONSIBILITIES ............................................................................24
35.3 RESPONSIBILITY FOR WAGES AND TAXES ...................................................................24
35.4 REMOVAL OF SUPPLIER PERSONNEL ........................................................................24
35.5 CONTRACTORS' COMPLIANCE ..............................................................................24
36.0 WORK ON SPRINT AND SUPPLIER PREMISES .....................................................................24
37.0 SECURITY .................................................................................................25
37.1 COMPLIANCE WITH SPRINT POLICIES ......................................................................25
37.2 SECURITY FOR SOFTWARE ................................................................................25
38.0 TECHNICAL SUPPORT SERVICE AND FEES .......................................................................25
38.1 SYSTEM SUPPORT SERVICE ...............................................................................25
38.2 INSTALLATION SERVICES ................................................................................25
38.3 ADDITIONAL SERVICE FEES ..............................................................................25
38.4 FEE INCREASES ........................................................................................25
38.5 TECHNICAL SUPPORT PERSON .............................................................................26
39.0 TRAINING SERVICES AND FEES ...............................................................................25
40.0 NOTICES ..................................................................................................26
41.0 GENERAL ..................................................................................................26
41.1 MATERIAL/MECHANIC'S LIEN .............................................................................26
41.2 GOVERNING LAW ........................................................................................26
41.3 WAIVER ...............................................................................................26
41.4 SEVERABILITY .........................................................................................26
41.5 SURVIVAL .............................................................................................26
41.6 THIRD PARTY BENEFICIARIES ............................................................................26
41.7 PUBLICITY ............................................................................................27
41.8 REMEDIES .................................................................................................27
41.9 ETHICS CODE ..............................................................................................27
41.10 LAWS AND REGULATIONS .................................................................................27
41.11 PERMITS AND LICENSES .................................................................................27
41.12 SCHEDULES ...........................................................................................27
41.13 FORCE MAJEURE.........................................................................................28
42.0 ENTIRE AGREEMENT .........................................................................................28
</TABLE>
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6
SPRINT PROPRIETARY INFORMATION - RESTRICTED
PURCHASE OF EQUIPMENT AND SERVICES AGREEMENT
BETWEEN
SPRINT/UNITED MANAGEMENT COMPANY
AND
HYBRID NETWORKS, INCORPORATED
This Purchase of Equipment and Services Agreement ("Agreement") is
effective May 1, 2000 ("Effective Date") between Sprint/United Management
Company, a Kansas corporation, with offices at 2330 Shawnee Mission Parkway,
Westwood, Kansas 66205 ("Sprint"), and Hybrid Networks, Inc., a Delaware
corporation, having its principal place of business at 6409 Guadalupe Mines
Road, San Jose, CA 95120 ("Supplier").
BACKGROUND
A. Supplier designs, develops, manufacturers, distributes, sells, and
licenses equipment and all related documents, reports, and information and
provides installation, training, technical, and maintenance services for the
equipment.
B. Sprint desires the right to purchase the equipment from Supplier
which Sprint will use itself, sell, or lease, to its customers in association
with products and services of Sprint, subject to the terms and conditions of
this Agreement. The parties agree as follows:
1.0 HEADINGS AND DEFINITIONS
All headings used in this Agreement are inserted for convenience only
and are not intended to affect the meaning or interpretation of this Agreement
or any section or clause of this Agreement. References to "third party" or
"third parties" will not mean either party. The meanings given to terms defined
in this Agreement are equally applicable to both the singular and the plural
forms of such terms. Terms used and/or defined in the Schedules attached to this
Agreement that are not otherwise defined in this Agreement, will have the
meanings as set forth in those Schedules for the purposes of those Schedules
only. For purposes of this Agreement, the following definitions apply:
1.1 "Acceptance Date" means the date of issue by Sprint of the
Milestone Acceptance Certificate confirming that the Enhanced Equipment or
Future Enhanced Equipment has passed the User Acceptance Test.
1.2 "Acceptance Test Plan" means a document that sets forth the
detailed roles, responsibilities, procedures, test equipment, test locations,
test cases and criteria to be used during the Engineering Product Development
Test and User Acceptance Test to determine whether or not the Enhanced Equipment
or Future Enhanced Equipment conforms to the applicable Specifications. The
Acceptance Test Plans for the Enhanced Equipment and Future Enhanced Equipment
will be developed by the parties using the procedures set forth in Section 7.0.
The Acceptance Test Plan will consist of both an Engineering Product Development
Test and User Acceptance Test.
1.3 "Additional Affiliates" means those persons designated by Sprint as
Additional Affiliates pursuant to the terms of Section 18.2.
1.4 "Additional Affiliate Agreement" means an agreement between Sprint
and/or any Initial Affiliate and a Person to be designated an Additional
Affiliate under the terms of this Agreement, which agreement will include an
agreement to market communications services under any Sprint Mark.
1.5 "Affiliates" means the collective reference to Initial Affiliates
and Additional Affiliates.
1.6 "Agreement" means this document and all attachments, exhibits,
schedules and supplements hereto (each of which is incorporated by reference) as
these currently exist and as they may be amended from time to time by agreement
of the parties.
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1.7 "Applicable Laws" means, as to any entity, the certificate of
incorporation and by-laws or other organizational or governing documents of such
entity, and all laws, treaties, ordinances, statutes, rules, regulations, orders
and interpretations of any Governmental Entity, applicable to or binding upon
such entity or any of its property or to which such entity or any of its
property is subject.
1.8 "Base Station" is a cable head end as described in the
Specification Letter.
1.9 "Claim" is defined in Section 27.5(a).
1.10 "Commitment" is defined in Section 2.4.
1.11 "CPE" is a modem as described in the Specification Letter.
1.12 "Defect" means a failure to conform to the warranties contained in
Section 26.1.
1.13 "Deliverable(s)" means any Service or Equipment.
1.14 "Effective Date" is defined in the opening paragraph of this
Agreement.
1.15 "Engineering Product Development Test" means the test to be
carried out by Supplier to demonstrate that, following the development of any
modification to the Equipment required to be tested pursuant to Section 7.0, the
Equipment complies with the Specifications.
1.16 "Enhanced Equipment" means Equipment containing the standards,
features, functionality or service capabilities described in the High Level
Requirements Letter.
1.17 "Equipment" means any items or product listed in Schedule 1.16,
whether or not manufactured by Supplier. Equipment includes the Existing
Equipment, Enhanced Equipment and Future Enhanced Equipment.
1.18 "Escrow Technology" means technical information, (including
Supplier's source code, chip designs, schematics, supplier lists, supplier part
numbers, maintenance and support documentation, and to the extent available to
Supplier, specifications and drawings of test fixtures, jigs, test systems and
development systems) necessary or useful to manufacture, improve, maintain and
support the Equipment without the assistance of any other person or reference to
any other material.
1.19 "Existing Equipment" means the Equipment containing only the
standards, features, functionalities and service capabilities set forth in
Specification Letter as it exists on the Effective Date.
1.20 "FAR" is defined in Section 31.1.
1.21 "Final Acceptance" means, as to any System, the successful
completion of the final acceptance test procedures. Sprint will prepare, in
consultation with Supplier, the detailed final acceptance testing procedures.
Sprint will consider all reasonable requests for modifications of the final
acceptance testing procedures, but is required to make modifications only if the
failure to make the modification would result in the tests that do not test
Specifications or that are inconsistent with the outline of the test procedures
contained in Schedule 1.21. If the Acceptance Date for Enhanced Equipment does
not occur by the date set forth in the Milestone Schedule, then no Final
Acceptance of any System will occur until the Acceptance Date for such Enhanced
Equipment; provided, however, the failure to meet an Acceptance Date will have
no impact on any payment milestones for any System for which Final Acceptance
has already occurred.
1.22 "Future Enhanced Equipment" means Equipment containing standards,
features, functionalities or service capabilities in addition to those contained
in Existing Equipment and described in the High Level Requirements Letter.
1.23 "Governmental Entity" means any nation or government, any state,
province or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.
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1.24 "High Level Requirements" means a summary of standards, features,
functionalities service capabilities established by the parties for the Enhanced
Equipment as described in the High Level Requirements disclosure letter from
Supplier to Sprint dated May 1, 2000 (the "High Level Requirements Letter").
1.25 "Indemnitees" means, with respect to a party, that party and its
affiliates and their respective directors and employees. As used in this
definition, the term affiliate means, in the case of Sprint, the Affiliates, and
in the case of Supplier, its subsidiaries.
1.26 "Initial Affiliates" means those Persons listed on Schedule 1.25.
1.27 "Interest" means a rate per year equal to that announced from time
to time by The Wall Street Journal as the "prime rate" in its "Money Rates"
table.
1.28 "Milestone Acceptance Certificate" means a written communication
signed by Sprint confirming that Supplier has satisfied its obligations under
the Engineering Product Development Test or User Acceptance Test.
1.29 "Milestone Schedule" means the timing and sequence of events
agreed between Sprint and Supplier for the development of Enhanced Equipment and
Future Enhanced Equipment. Each Milestone Schedule will be mutually agreed to by
the parties, except that the parties agree the Acceptance Dates for Enhanced
Equipment are contained in the High Level Requirements Letter.
1.30 "MMDS Services" means fixed wireless communication services.
1.31 "Net Price" means the final price paid by any customer after all
discounts, reductions, rebates, or adjustments of any kind are applied.
1.32 "Non-Escrow Technology" means the systems, elements or physical
components, (including Supplier's masks, jigs, test fixtures, test systems,
development systems and similar material), and other physical materials
necessary or useful to allow a reasonably skilled third-party to manufacture,
improve, maintain and support Equipment without the assistance of any other
person or the reference to any other material except Escrow Technology.
1.33 "Order" means any purchase order that Sprint may place with
Supplier for Deliverables under this Agreement.
1.34 "Person" means an individual, partnership, limited partnership,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity of whatever
nature.
1.35 "Services" means any service provided by Supplier to Sprint under
this Agreement.
1.36 "Software" means the computer software products licensed by Hybrid
that is contained in or operating on the Equipment.
1.37 "Specifications" means the detailed standards, features,
functionalities and service capabilities established by the parties for the
Equipment and Services. The Specifications for the Existing Equipment are set
forth in the specification letter from Supplier to Sprint dated May 1, 2000
("Specification Letter"). The Specifications for the Enhanced Equipment and
Future Enhanced Equipment will be developed by the parties using the procedures
Set forth in Section 6.0.
1.38 "Sprint Marks" means the trademarks or trade names owned or
licensed by Sprint.
1.39 "Substantial Completion" means, as to any System, the successful
completion of the substantial completion testing procedures. Sprint will
prepare, in consultation with Supplier, the detailed substantial completion
testing procedures. Sprint will consider all reasonable requests for
modifications of the substantial completion testing procedures, but is required
to make modifications only if the failure to make the modification would result
in the tests that do not test Specifications or that are inconsistent with the
outline of the test procedures contained in Schedule 1.21.
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1.40 "System" means all Equipment, Services, and other equipment,
services, tools and software and any other property necessary or desirable to
provide MMDS Services in an area supported by a single Base Station. A graphical
illustration of a System is set forth as Schedule 1.40.
1.41 "Systems Integrator" means any Person other than Sprint or
Supplier retained by Sprint for the purposes of installing, testing, operating
or maintaining a System, or a Person who resells Equipment to Sprint.
1.42 "System Support Services" is defined in Section 38.1. Supplier
will only provide System Support Services on the portions of the System
contained in the marked areas on Schedule 1.40.
1.43 "User Acceptance Test" means the test to be carried out by Sprint
to demonstrate that, following any modification to the Equipment required to be
tested pursuant to Section 7.0, the Equipment complies with the Specifications.
1.44 "Warranty Period" means the period beginning upon the shipment by
Supplier of the Equipment to Sprint and expiring 18 months thereafter. In the
case of Software, the Warranty Period is 90 days from the date of shipment by
Supplier to Sprint of the Software. In no event will the Warranty Period for
Equipment or Software begin before Substantial Completion of the System in which
it is incorporated.
1.45 "Supplier Insolvency" means (i) the failure of Supplier to pay its
debts to creditors when and as due (ii) under circumstances in which one or more
of such creditors have refused to modify, amend, waive or delay the exercise of
their rights to obtain strict compliance with such obligations and (iii) such
failure and refusal could reasonably be expected to have a material adverse
effect on the ability of Supplier to continue to operate its business without
the protection of federal or state laws governing the rights of creditors.
Supplier Insolvency is not a breach of this Agreement and shall not be a cause
for termination thereof.
2.0 ORDER
2.1 ORDER TERMS.
This Agreement sets forth the terms that apply to any Order that Sprint
or any Affiliate may place with Supplier during the term of this Agreement.
2.2 ORDER REQUIREMENTS.
Sprint will specify the quantity of Deliverables needed, the shipment
date, shipping method, the location to which Deliverables should be shipped, and
any other information reasonably required by Supplier and identified in advance
upon receipt of an Order. Supplier may not ship unauthorized substitute
equipment to Sprint without Sprint's prior written approval. Unless otherwise
specified herein (or accepted by Supplier), all Orders must be placed by Sprint
at least 90 days prior to the proposed shipment date and, upon acceptance of any
such Order by Supplier, will be deemed firm and non-cancelable and
non-changeable, except as specified in Section 4.0. An Order may specify only a
single address for delivery.
2.3 BRANDING AND LABELING.
Supplier will comply with the brand labeling and electronic
asset-tracking requirements and procedures designated by Sprint from
time-to-time. Such asset-tracking requirements and procedures will include, at a
minimum, the labeling of Equipment components with bar-coded serial numbers. Bar
coding shall consist of laser-printed labels to be affixed to the Equipment. Any
special or unique asset tracking equipment required by Sprint shall be provided
by Sprint to the extent the cost of such special or unique asset tracking
equipment that exceeds $5,000.00. Sprint will pay to Supplier $1.00 per brand
label for each label affixed by Supplier to Equipment at Sprint's request.
Supplier may continue to include the brand and proprietary rights
notices (including without limitation copyright, patent or trademark notices) of
Supplier and its suppliers on the Equipment, Supplier may from time to time
modify or change its brand proprietary rights notices provided such notices
appear in substantially the same manner (e.g., size, color) as they are included
on the Effective Date. Sprint will not delete, alter or obscure such brand or
proprietary rights notices. Sprint will evaluate requests by Supplier to be
included in its advertising literature, subject to agreement on the nature,
scope and funding of such marketing efforts.
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2.4 PURCHASE REQUIREMENTS.
Provided that the Equipment shipped by Supplier meets all criteria
required for Substantial Completion, prior to December 31, 2000 Sprint will pay
to Supplier an aggregate minimum amount of $10,000,000 ("Commitment") for the
Equipment achieving the Substantial Completion milestones and any other
Deliverables. Any purchase of Deliverables by Sprint or any Initial Affiliate
after September 30, 1999 will be credited toward fulfilling the Commitment,
including purchases from a Systems Integrator.
2.5 ADDITIONAL OR INCONSISTENT TERMS.
This Agreement shall take precedence over any inconsistent or
additional terms contained in any Order or other form used by Sprint to order
under this Agreement and any acknowledgment or other form used by Supplier. Any
such inconsistent or additional terms shall be deemed stricken, null and void.
This Agreement shall take precedence over any terms in any Schedule attached to
this Agreement that are inconsistent with this Agreement, and such inconsistent
terms will be deemed stricken, null and void, unless the parties mutually agree
in a signed writing to such additional provisions.
2.6 FORECAST.
During the term of this Agreement, Sprint will furnish Supplier, on a
monthly basis, with a non-binding 180-day rolling forecast of its Orders for
Deliverables.
2.7 CPE EQUIPMENT LEAD TIME REDUCTION
In the event Sprint makes a binding commitment to purchase a fixed
amount of CPE Equipment, then commencing 60 days from the date of Sprint's
commitment Supplier will make such CPE Equipment available for shipment to
Sprint within 8 weeks from the date of any Sprint Order for CPE Equipment placed
on or after the 60 days. Supplier will use commercially reasonable efforts to
reduce all CPE Equipment lead times.
3.0 ACCEPTANCE OF ORDER
3.1 ACCEPTANCE.
Supplier must accept any Order issued by Sprint that does not
materially exceed the forecast provided to Supplier pursuant to Section
2.6 or the manufacturing capacity or lead times of Supplier set forth
on Schedule 3.1.
3.2 SHIPMENT DATE.
Supplier will ship the Equipment ordered on the shipment date contained
in any Order accepted by Supplier.
3.3 DAMAGES FOR DELAY.
(A) If shipment from Supplier to Sprint's designated location
is delayed more than 5 consecutive calendar days beyond the designated
shipment date, Supplier agrees to pay liquidated damages calculated as
1/2% of the price of the Order, for each business day of delay after
the initial 5 days, up to a maximum of 15% of the total amount of such
Order to the extent such Order is comprised of CPE Equipment and up to
a maximum of 10% of such Order to the extent such Order is comprised of
Base Station Equipment. Liquidated damages will be calculated only on
the portion of the Order delayed and the portion of the Order Sprint is
unable to use because a portion of the Order is delayed.
(B) Supplier will ship at least 80% of all Orders scheduled
for shipment in a consecutive 3-month period in accordance with the
terms of this Section 3.0 prior to or within 5 business days of the
scheduled shipment date for such Orders (the "Fulfillment Standard").
Supplier's compliance with the Fulfillment Standard will be measured in
each rolling 3-month period. In the event Supplier fails to meet the
Fulfillment Standard, then in the subsequent month Supplier must ship
at least 80% of all Orders scheduled for shipment during that month in
accordance with the terms of this Section 3.0 on or prior to the
scheduled shipment date for such Orders. If Supplier fails to comply
with the foregoing sentence, then in the subsequent month any Order
that is shipped after its scheduled shipment date will be shipped for
next day delivery at Supplier's costs. Supplier's failure to achieve
the Fulfillment Standard during any 4 consecutive measurements will
constitute a material breach of this Agreement, which Supplier has no
further right to cure under Section 17.2, and giving Sprint the
immediate right to terminate.
(C) Supplier will not be responsible for delays caused by the
failure of a carrier designated by Sprint to meet its shipment
schedule.
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3.4 SHIPPING PROCEDURES.
Unless otherwise instructed by Sprint, Supplier must:
(A) Ship all Orders complete;
(B) Ship all Orders via Sprint's designated common
carriers as designated in Schedule 3.4;
(C) Verify that all subordinate documents bear the
correct Order number;
(D) Enclose a packing memorandum with each shipment and,
when more than one package is shipped, identify the
one which contains the memorandum;
(E) Mark the correct Order number on all packages and
shipping papers;
(F) Submit invoices in duplicate or as otherwise
specified by Sprint, showing the correct Order
number;
(G) Render separate invoices for each shipment, whether
or not a complete Order;
(H) Verify that bills of lading match corresponding
shipping invoices; and
(I) Forward applicable bills of lading and shipping
notices with items shipped.
3.5 SHIPPING PRIORITY.
Supplier will provide Sprint with priority over other Supplier
customers, in terms of the availability and shipment of the Deliverables. If
Orders for Deliverables exceed Supplier's capacity for such Deliverables, then
Supplier will completely fill Sprint's Orders for such Deliverables before
filling the order of any other customers for such Deliverables.
4.0 MODIFICATION OF ORDERS
4.1 CANCELLATION.
Sprint may, by written notice, cancel or reduce the quantity of
Deliverables specified in any Order. If the cancellation or reduction occurs
after the lead times required by Supplier (as set forth on Schedule 4.1) to
obtain the Equipment components in order to meet the delivery schedule, then
Sprint will pay to Supplier direct costs specified on Schedule 4.1 reasonably
incurred prior to receipt of such notice to obtain and assemble such components,
with appropriate allowance for salvage value and possible mitigation of damages
by completion and sale to others. Supplier's Equipment component lead times are
contained in Schedule 4.1. Sprint will also pay to Supplier, in addition to such
direct costs, an amount equal to 5% of the purchase price for any portion of an
Order that Sprint cancels within 90 days of the shipment date. Any amount paid
by Sprint under this Section 4.0 does not count toward fulfillment of the
Commitment. The provisions of this Section 4.1 are Supplier's sole and exclusive
remedy for Sprint's cancellation of Orders.
4.2 POSTPONEMENT.
Sprint may, by written notice, postpone one time without penalty the
shipment date for any Order prior to the shipment date established for such
Order for a period not to exceed 45 days from the initial shipment date. In the
event Sprint postpones the shipment date of any Order more than once, then
Sprint will pay Supplier Interest on one-half of the purchase price of such
Order during the period of postponement,
5.0 DISCONTINUATION
Supplier will continue to (i) manufacture the Equipment throughout the
term of this Agreement (ii) support the Base Station Equipment (including,
without limitation, repair, maintenance and support services) for 8 years after
the time such Base Station Equipment was last provided by Supplier to Sprint and
(iii) repair the CPE Equipment for a period of 2 years after the expiration of
the Warranty Period for such CPE Equipment. Supplier agrees to provide Sprint
not less than 180 business days' prior written notice of its intent to
discontinue the manufacture or support of any such Equipment after the
termination of this Agreement. The replacement of Equipment with new Equipment
that is interoperable and equivalent in terms of standards, features,
functionality, service capability and price does not constitute discontinuation.
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6.0 PREPARATION AND APPROVAL OF THE SPECIFICATIONS FOR THE ENHANCED
EQUIPMENT
6.1 HIGH LEVEL REQUIREMENTS.
The High Level Requirements for the Enhanced Equipment are set forth in
the High Level Requirements Letter.
6.2 DETAILED REQUIREMENTS DEVELOPMENT.
A) Supplier will commence preparation of the Specifications for the
Enhanced Equipment in accordance with the Milestone Schedule and consistent with
the High Level Requirements.
B) Upon completion of the Specifications, Supplier will submit the
Specifications to Sprint. Sprint will either approve the Specifications or
propose amendments as it will reasonably judge appropriate. If Sprint fails to
approve the Specifications or propose amendments within the time period set
forth in the Milestone Schedule, Sprint will be notified by Supplier that a
response is due. Sprint will be in breach of this Agreement if it does not
respond within 10 calendar days after being notified that a response is due.
C) Supplier will include all reasonable requests for amendment of the
Specifications received from Sprint and will prepare revised Specifications.
Each party will then signify its approval of the Specifications by signing the
Specifications within the timeframe set forth in the Milestone Schedule. Any
modification to the Specifications following each party's approval will be
governed by the Scope Change procedures set forth in Section 10.0.
6.3 ENHANCED EQUIPMENT DEVELOPMENT.
Supplier will develop, at its cost, the Enhanced Equipment necessary to
ensure that the Equipment conforms to the applicable Specifications and is ready
for approval under the Engineering Product Development Test and User Acceptance
Test in accordance with the time schedule set out in the Milestone Schedule.
7.0 TESTING AND ACCEPTANCE
7.1 TESTING REQUIREMENTS.
Prior to Sprint's acceptance of any Enhanced Equipment or Future
Enhanced Equipment that contains a standard, feature, functionality or service
capability (other than minor maintenance releases) not previously contained in
any Equipment tested pursuant to the terms of this Section 7.0, the parties will
follow the procedures set forth below.
7.2 ACCEPTANCE PLAN DEVELOPMENT.
(A) Supplier will commence, in collaboration with Sprint,
preparation of the Acceptance Test Plan for the Enhanced Equipment and
Future Enhanced Equipment in accordance with a Milestone Schedule
agreed to by both parties. Sprint will provide Supplier all information
and other documents reasonably requested by Supplier for the
preparation of the Acceptance Test Plan.
(B) Upon completion of the Acceptance Test Plan, Supplier will
submit the Acceptance Test Plan to Sprint. Sprint will either approve
the Acceptance Test Plan or propose amendments as it will reasonably
judge appropriate. If Sprint fails to approve the Acceptance Test Plan
or propose amendments within the time period set forth in the Milestone
Schedule, Sprint will be notified by Supplier that a response is due.
Sprint will be in breach of this Agreement if it does not respond
within l0 calendar days after being notified that a response is due.
(C) Supplier will include all reasonable requests for
amendment of the Acceptance Test Plan received from Sprint and will
prepare a revised Acceptance Test Plan. Each party will then signify
its approval of the Acceptance Test Plan by signing the Acceptance Test
Plan within the timeframe set forth in the Milestone Schedule. Any
modification to the Acceptance Test Plan following its approval will be
governed by the Scope Change procedures set forth in Section 10.0.
7.3 ENGINEERING PRODUCT DEVELOPMENT TEST.
(a) Upon approval of the Acceptance Test Plan and in
accordance with the Milestone Schedule, Supplier will proceed with the
Engineering Product Development Test. Sprint has the right to attend
the Engineering
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Product Development Test and Supplier will promptly forward to
Sprint copies of the test readings.
(b) When the Enhanced and Future Enhanced Equipment has passed
the Engineering Product Development Test, Sprint will promptly issue a
Milestone Acceptance Certificate to Supplier.
(c) If the Enhanced and Future Enhanced Equipment fails the
Engineering Product Development Test then Sprint may at its option:
(i) require Supplier to promptly make such further
alterations or modifications to the Enhanced and Future
Enhanced Equipment as reasonably necessary to enable the
Equipment to pass the Engineering Product Development Test; or
(ii) accept the Enhanced and Future Enhanced
Equipment as passing the Engineering Product Development Test,
subject to a list of Defects to be corrected by Supplier
promptly or within a mutually agreeable time period.
7.4 USER ACCEPTANCE TEST.
(A) Sprint will issue details of the proposed test data and
tests for the User Acceptance Test for the Enhanced and Future Enhanced
Equipment to Supplier in accordance with the time schedule set out in
the Milestone Schedule. The User Acceptance Test will test conformance
of such Equipment with the Specifications. The User Acceptance Test
plan will be mutually agreed to by the parties. After the Engineering
Product Development Test is passed in accordance with the provisions of
Section 7.3, Supplier will deliver the Equipment to Sprint for
performance of the User Acceptance Test in accordance with the time
schedule set out in the Milestone Schedule. The location of the test
facilities shall be in a Sprint lab to be designated by Sprint.
Supplier has the right to attend the User Acceptance Test and Sprint
will promptly forward to Supplier copies of the test readings.
(B) When the Equipment has passed the User Acceptance Test,
Sprint will promptly issue a Milestone Acceptance Certificate to
Supplier.
(C) If the Equipment fails to pass the User Acceptance Test,
then Sprint may, at its option:
(i) require Supplier to promptly make such further
alterations or modifications to the Equipment as reasonably
necessary to enable the Equipment to pass the User Acceptance
Test; or
(ii) accept the Equipment subject to a list of
Defects to be corrected by Supplier promptly or within a time
period that Sprint and Supplier will mutually agree to.
7.5 SPRINT DELAYS.
The date set forth in the Milestone Schedule as the Acceptance Date
will be extended one day for each day that Sprint fails to perform any
obligations identified as a Sprint responsibility in the Milestone Schedule that
causes Supplier not to be able to meet the Acceptance Date set forth in the
Milestone Schedule. Prior to incurring any delay caused by Sprint, Supplier will
notify Sprint of Sprint's failure to perform any Sprint obligation within the
time period established in the Milestone Schedule.
7.6 MILESTONE ACCEPTANCE CERTIFICATES.
As soon as the Equipment has passed the Engineering Product Development
Test or User Acceptance Test, Sprint will issue a Milestone Acceptance
Certificate which will state the date of passing the test. Sprint will sign and
issue the certificate within 3 business days of Supplier demonstrating that the
requirements which constitute meeting the Engineering Product Development Test
or User Acceptance Test, as the case may be, have been met. If Sprint accepts
the Equipment subject to a list of faults to be corrected promptly or on a
schedule mutually agreed to by Supplier and Sprint, then such items, together
with the time period for correction will be set out on the Milestone Acceptance
Certificate. Acceptance of the Equipment will occur only in accordance with the
terms of this Agreement.
8.0 FUTURE ENHANCEMENTS TO THE EQUIPMENT
8.1 DEVELOPMENT.
In addition to the enhancements to be contained in the Enhanced
Equipment, Sprint may from time to time request and
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Supplier will provide (to the extent technically possible) Furore Enhanced
Equipment in the form of the removal, modification or addition of standards,
features, functionality, or service capabilities. Sprint and Supplier will
negotiate in good faith a reasonable development budget and time schedule for
the shipment of such enhancements. Supplier will notify Sprint within 30 days of
the date of any Sprint request for an enhancement whether Supplier is willing to
develop the enhancement at its cost, in which case the enhancement will be the
exclusive property of Supplier, or whether Supplier intends to charge Sprint in
accordance with Section 38.2 for the development of the enhancement, in which
case the development of the enhancement will be subject to the provisions of
Section 9.1. Enhancements that would not increase Supplier's cost of performance
will be provided at no charge, the parties will follow the procedures
established in Sections 6.0 and 7.0 for the development and acceptance of
enhancements.
8.2 PRIORITY.
As long as the dollar amount of purchases made by Sprint under this
Agreement exceed the dollar amount of purchases made by each other customer of
Supplier during the prior 6-month period, Supplier will provide Sprint with
development priority over any other Supplier customer. If Sprint believes that
Supplier is not providing Sprint enhancements priority, Sprint will notify
Supplier in writing that Sprint is dissatisfied with Supplier's scheduling
priority. Supplier will respond within l0 days to Sprint's concerns and if
Sprint remains dissatisfied, Supplier will provide Sprint and its auditors the
access to verify that the work of Sprint is being scheduled and performed with
priority over any other Supplier customer. If Sprint is not receiving priority,
then Supplier will modify its development schedule so that Sprint enhancements
are performed first and pay for the cost of the audit.
If Supplier notifies Sprint of any third party request to undertake a
material development effort and Sprint cannot, within 5 business days of
Supplier's notice, identify a development need that would interfere with the
third party's request, then Sprint may not subsequently require development
priority that would interfere with Supplier's contractual obligation to perform
development for such third party. Supplier's notice is required to disclose only
the existence of the request for the development effort, the associated time
schedule, estimated man hours for the development effort, and a statement
notifying Sprint of the consequences for failing to respond within 5 business
days. In no event will Supplier allow a development effort for a third party to
interfere with a development effort for Sprint that was scheduled prior to the
third party's request for development.
8.3 EXCLUSIVITY.
Sprint will have exclusive use of the features ("Feature(s)") set
forth on Schedule 8.3 for a period of 3 months following Sprint's initial
acceptance of the Equipment incorporating such Features in accordance with
Section 7.0. In addition, during each calendar year Sprint may designate up
to 2 Features to be developed during such calendar year as exclusive to
Sprint. Sprint will have exclusive use of such Features for a period of 3
months following Sprint's initial acceptance of such features. Supplier will
not grant to any other Person the exclusive right to use any feature.
9.0 OWNERSHIP OF INTELLECTUAL PROPERTY
9.1 WORK PRODUCT.
Supplier hereby assigns and agrees to assign to Sprint all right,
title, and interest, including without limitation, copyrights, patents, trade
secrets and proprietary rights, in and to those writings, documents, software,
techniques, know-how, patentable ideas, and other materials made by Supplier and
its representatives under this Agreement in connection with the development of
Future Enhanced Equipment that is paid for by Sprint pursuant to Section 38.2
("Work Product"), and such Work Product will be deemed "Work Made for Hire" to
the extent allowed under U.S. Copyright Laws. Supplier will take such further
actions as Sprint reasonably deems appropriate to give full and proper effect to
this assignment at Sprint's expense, including providing reasonable assistance
to secure intellectual property protection, including, but not limited to,
assistance in the preparation and filing of any patent applications, copyright
registrations, and the execution of all applications, assignments or other
instruments for perfection or protection of title in the Work Product. Supplier
represents that it has agreements in place with its employees and
representatives sufficient to convey to Sprint the rights described in this
Section.
9.2 LICENSE.
Sprint hereby grants and agrees to grant to Supplier a non-exclusive,
perpetual, worldwide, fully paid up, royalty-free license to make, use, sell,
offer to sell, import, duplicate, create derivative works based upon and
distribute the Work Product solely for the purpose of providing Equipment to
Sprint.
10.0 SCOPE CHANGE
At any time during the modification of the Equipment or development of
any enhancement, if either party identifies
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the need for a change in the Milestone Schedule or Specifications ("Scope
Change"), the parties will follow the procedures set forth in this Section 10.0.
If a request for a Scope Change is received from Sprint, Supplier will provide a
Scope Change form to Sprint in the form attached as Schedule 11.0. A request for
a Scope Change by Supplier will be submitted to Sprint as a Scope Change form at
the time of such request. Sprint and Supplier will discuss all proposed Scope
Changes; however, the obligations of the parties will not be changed until a
Scope Change form has been executed by both parties. Neither Supplier nor Sprint
will unreasonably withhold its consent to any Scope Change.
11.0 SYSTEM INTEROPERABILITY; SYSTEM ACCEPTANCE
11.1 SYSTEM ACCEPTANCE.
Sprint will conduct a test of each System to confirm that such System
is operating in accordance with the Specifications. Supplier will assist Sprint,
in accordance with Sections 1.39 and 1.21 respectively, in the development and
implementation of the Substantial Completion and Final Acceptance criteria for
each System. Substantial Completion and Final Acceptance will not be withheld if
it is determined that the sole reason Substantial Completion or Final Acceptance
has not occurred is because (i) third party equipment fails to meet its
specifications, (ii) third party equipment fails to intemperate with third party
equipment, or (iii) third party equipment fails to interoperate with Equipment
because the third party equipment failed to comply with the interface protocols
established by Supplier and provided to the third party. In the event
Substantial Completion or Final Acceptance would not occur but for the preceding
sentence, then prior to declaring Substantial Completion or Final Acceptance,
Sprint will have the opportunity to promptly replace the defective equipment and
reinitiate the applicable test, which replacement and testing procedure may not
take more than 15 business days.
11.2 SUPPLIER ASSISTANCE.
Supplier will work with Sprint and its third party suppliers and use
its best efforts to ensure that (i) the Equipment operates and interoperates
with the equipment provided by third parties and the System as a whole and (ii)
the System operates in a manner that it will achieve Substantial Completion and
Final Acceptance.
12.0 TEST-BED LABORATORY
Supplier will supply the Equipment and Services necessary for the
establishment of one System in a test-bed laboratory at a location to be
designated by Sprint (the "Test-Bed Laboratory"). Such Equipment will be subject
to the applicable warranty terms of this Agreement. Supplier will provide all
upgrades and enhancements applicable to the Equipment located in the Test-Bed
Laboratory. Sprint will not use the Equipment located in the Test-Bed Laboratory
for any purpose other than testing without the prior written consent of
Supplier, which consent Supplier will not unreasonably withhold or delay.
13.0 SPARING
Supplier will provide and Sprint will pay for spare parts at each Base
Station System location. Any spare parts used will promptly be replaced by
Supplier. Supplier will invoice Sprint for all spare parts provided to Sprint;
however, Supplier will provide replacement spare parts for any spare parts
returned by Sprint during the Warranty Period at no cost, and will provide a
credit memorandum accompanying such replacement spare parts.
14.0 OPERATING AND MAINTENANCE MANUALS.
14.1 CPE EQUIPMENT MANUALS.
Supplier will provide Sprint one operating manual with each unit of CPE
Equipment shipped to Sprint. Supplier will provide Sprint with CPE Equipment
installation manuals as reasonably requested by Sprint from time to time. The
operating manuals will describe in sufficient detail the procedures for
operating the CPE Equipment. The installation manuals will describe in
sufficient detail the procedures for installing the CPE Equipment. Supplier will
provide Sprint with one copy of each of the operating and installation manuals
in CD-ROM format. Sprint has the right and license to print, copy and distribute
the manuals or portions of the manuals.
14.2 BASE STATION EQUIPMENT MANUALS.
Supplier must provide Sprint one operating manual, one maintenance
manual and one installation manual for each Base Station upon shipment of the
Equipment comprising the Base Station, except that Supplier has until June 30,
2000 to deliver maintenance manuals for any Base Station shipped prior to June
30, 2000, The operating, maintenance and installation manuals will be prepared
in accordance with the relevant Specifications and in sufficient detail to
accurately represent the
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Equipment and all of its material components and will set forth procedures for
operating, maintenance and installing the Base Station Equipment. From time to
time, but in any event at least once a year, Supplier will provide Sprint
reasonable updates to such manuals. Supplier will provide Sprint with one copy
of each of the operating, maintenance and installation manuals in CD-ROM format.
Sprint has the right and license to print, copy and distribute the manuals or
portions of the manuals. The Base Station Equipment manuals are Supplier's
Proprietary Information.
14.3 STANDARDS FOR MANUALS.
All manuals must be:
(A) detailed, comprehensive and prepared in conformance with generally
accepted standards of professional care, skill, diligence and competence
applicable to communications and operation practices for facilities similar to
the System;
(B) consistent with good quality industry operating practices for
operating personal communications service systems of similar size, type and
design; and
(C) sufficient to enable Sprint to operate and maintain the Equipment
and end users to operate the Equipment that is located on their premises.
15.0 THIRD PARTY SUPPLIERS
15.1 ALTERNATIVE COMPONENTS.
Upon Sprint's request, Supplier will promptly identify the manufacturer
of each Equipment component manufactured by a third party. In the event Sprint
requests Supplier to consider using an alternative third party supplier's
component ("Alternative Component"), Supplier will promptly prepare a written
analysis of the differences between the components (including cost and
performance). Following such analysis, Supplier will, at Sprint's request, use
the Alternative Component in the Equipment. To the extent use of an Alternative
Component would cause an increase or decrease in Supplier's cost to provide such
Equipment to Sprint, the price of the Equipment to Sprint will be increased or
decreased by a corresponding amount.
Supplier will provide Sprint with 100 hours of engineering time per
calendar year for the purpose of analyzing Sprint's change requests or for such
other purposes as Sprint may reasonably require. Sprint will bear the cost of
analysis in excess of the engineering time allotted to Sprint. Supplier will
provide Sprint with an estimate of such costs before preparing the analysis,
together with a report indicating the number of engineering hours available to
Sprint at no charge.
15.2 THIRD PARTY CONSENTS.
Supplier warrants that Schedule 15.2.1 contains a complete list of each
Person that is Supplier's sole source of a service or component necessary or
convenient for the manufacturing of Existing Equipment. Supplier will use
commercially reasonable efforts to obtain within 90 days of the Effective Date
the written agreement of each supplier on Schedule 15.2.1, stating that in the
event of an Escrow Termination Event, such supplier will provide to Sprint the
services or equipment it presently provides to Supplier on substantially the
same terms as provided to Supplier on the Effective Date. Each consent will be
substantially in the form as that set forth as Schedule 15.2.2. Supplier will
obtain the foregoing consent from any other supplier that first provides such
services or equipment as a sole source after the Effective Date.
16.0 SPRINT TRADEMARK, LICENSE AND BRANDING
16.1 LICENSE GRANT.
Sprint grants to Supplier a non-exclusive, non-transferable, revocable,
worldwide license, without the right to sublicense, to use the Sprint Marks
solely as designated by Sprint in writing and only as set forth in the Sprint
trademark usage guidelines as provided by Sprint from time to time. Supplier
will not use Sprint Marks without the prior written consent of Sprint.
16.2 NOTICES.
Supplier agrees to include on all materials bearing any of the Sprint
Marks any notice required by Sprint related to Sprint Marks.
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16.3 USES.
All uses of the Sprint Marks by Supplier inure to the benefit
of Sprint. Supplier acquires no rights, title, or interest in the
Sprint Marks or the goodwill associated with them, other than the right
to use the Sprint Marks in accordance with this Agreement. In accepting
this Agreement, Supplier acknowledges Sprint's ownership of the Sprint
Marks, their validity, and the goodwill connected with them. Supplier
will not attack the Sprint Marks, nor assist anyone in attacking them.
Supplier further agrees not to make any application to register the
Sprint Marks, or to knowingly and willfully use any confusing similar
trademark, service mark, trade name, or derivation, during the term or
thereafter.
16.4 SUPPLIER ASSISTANCE.
At Sprint's request, Supplier will execute any papers or
documents reasonably necessary to protect the rights of Sprint in the
Sprint Marks and execute and deliver such other documents as may be
reasonably requested by Sprint.
16.5 UNAUTHORIZED USES.
Supplier will promptly notify Sprint of any unauthorized use
of the Sprint Marks that comes to Supplier's management attention.
Sprint in its sole discretion may take such action as may be required
to prosecute the infringement. In the event that Sprint decides that
action should be taken against such third parties, Sprint may take such
action either in its own name or, alternatively, Sprint may authorize
Supplier to initiate such action in Supplier's name. In either event,
Supplier agrees to cooperate fully with Sprint to whatever extent
necessary to prosecute such action, all expenses being borne by Sprint
and all damages that may be recovered being solely for the account of
Sprint.
17.0 TERM AND TERMINATION
17.1 TERM.
This Agreement is effective as of the Effective Date and will continue
thereafter for a period of 5 years, unless earlier terminated as provided in the
Agreement. Upon expiration of the initial term, this Agreement will
automatically be renewed for successive one-year periods, unless either party
gives the other notice 180 days prior to the expiration of the then current term
of its intent not to renew this Agreement. The terms of this Agreement will
continue to apply to any Order that is outstanding at the time of termination or
expiration of this Agreement. Unless the term of this Agreement will be
extended, Sprint may not provide Supplier with Orders during the final 90 days
of the term of this Agreement.
17.2 TERMINATION.
17.2.1 MATERIAL BREACH
If Sprint believes Supplier is in material breach of this
Agreement, then Sprint may provide a notice to Supplier identifying the
action or inaction that is the basis of the claim of material breach
and stating its intention to terminate this Agreement if the material
breach is not cured. Supplier will act promptly and continuously to
effect a cure as soon as reasonably possible after receiving the
notice. Supplier will have 135 days from the date of Sprint's notice in
which to cure the breach; provided that if the breach cannot by cured
during the 135-day period, but Supplier has taken actions reasonably
likely to effect a cure in the 30 days following the 135-day period,
Supplier will have an additional 30 days in which to cure the breach.
If the breach is not cured during the 135-day period, or if Supplier is
entitled to an additional 30 days period, the breach is not cured
following the expiration of such additional 30-day period, then Sprint
may immediately deliver a termination notice to Supplier. This
Agreement will be terminated on the date specified in the termination
notice, which date will be at least 5 but not more than 30 days from
the date the termination notice is given. Examples of a material breach
include:
(A) Supplier's material failure to correct Defects in the
Equipment,
(B) Supplier's material failure to provide (i) material
enhancements required under the Agreement or (ii) the upgrades
or the other maintenance services required under the
Agreement.
(C) Supplier's repeated and material failure to satisfy
availability, quantity, shipping and pricing, as required
under the Agreement.
17.2.2 [RESERVED]
17.3 TERMINATION BY SUPPLIER.
If Supplier believes Sprint is in material breach of this Agreement,
then Supplier may provide a notice to Sprint
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identifying the action or inaction that is the basis of the claim of material
breach and stating its intention to terminate this Agreement if the material
breach is not cured. Sprint will have 135 days from the date of Supplier's
notice in which to cure the breach; provided that if the breach cannot by cured
during the 135-day period, but Sprint has taken actions reasonably likely to
effect a cure in the 30 days following the-135 day period, Sprint will have an
additional 30 days in which to cure the breach. If the breach is not cured
during the 135-day period, or if Sprint is entitled to an additional 30 days
period, the breach is not cured following the expiration of such additional
30-day period, then Supplier may immediately deliver to Sprint a termination
notice. This Agreement will be terminated on the date specified in the
termination notice, which date will be at least 5 but not more than 30 days from
the date the termination notice is given. Supplier may refuse to ship
Deliverables without penalty if Sprint fails to pay any amount owed Supplier
within 10 days of receipt of notice from Supplier that such payment is past due.
17.4 CONSEQUENCES OF TERMINATION.
(A) If this Agreement is terminated by Sprint pursuant to Section 17.2 then (i)
Sprint will retain possession of and title to all Equipment delivered to Sprint,
in accordance with an Order, as of the termination date and (ii) Supplier will
not be entitled to invoice Sprint any further amounts for such Equipment
(including amounts associated with the subsequent achievement of milestones for
any System that has not achieved Final Acceptance as of the termination date)
other than amounts earned under this Agreement prior to the termination date.
(B) If this Agreement is terminated by Supplier pursuant to Section 17.3 then
(i) Sprint will retain possession of and title to all Equipment delivered to
Sprint, in accordance with an Order, as of the termination date and (ii)
Supplier will be entitled to immediately invoice Sprint for the full purchase
price of such Equipment, regardless of whether or not the payment milestones
associated with achieving Substantial Completion or Final Acceptance have
occurred prior to the termination date.
(C) Upon expiration of the term of this Agreement, for a period of 1 year
thereafter ("Transition Period") Supplier will continue to provide Services and
Equipment of the type previously provided to Sprint in connection with Systems
for which Supplier has previously provided Equipment and Services, but for which
Final Acceptance has not occurred. Supplier will be entitled to invoice Sprint
in accordance with the terms of the Agreement for the delivery of Equipment and
Services and achievement of Substantial Completion or Final Acceptance of any
System during the Transition Period. After the Transition Period, Sprint will
retain possession of and title to all Equipment delivered to Sprint and Supplier
will not be entitled to receive any further amounts for such Equipment
(including amounts associated with the subsequent achievement of milestones for
any System that has not achieved Final Acceptance prior to the expiration of the
Transition Period).
18.0 AFFILIATE TRANSACTIONS
18.1 AFFILIATE ORDERS.
Sprint has the right, but not the obligation, to require Supplier to
fulfill (and Supplier will so fulfill) Orders for Equipment and Services
received from any Affiliate designated by Sprint pursuant to, and in accordance
with, the same prices and the same terms and conditions as set forth in this
Agreement. Each such Order will be governed by, and such Affiliate will be bound
by, the terms and conditions of this Agreement as if such Affiliate were Sprint,
and Supplier will have the right and ability to enforce any rights hereunder
against any such Affiliate.
18.2 AFFILIATES.
On a quarterly basis commencing on the Effective Date, Sprint may, by
written notice to Supplier, designate any Person that is not an Initial
Affiliate as an "Additional Affiliate"; provided, that Supplier will have a 15
business-day period to consent or withhold consent to such designation (such
consent not to be unreasonably withheld) based upon (a) Supplier's reasonable
credit criteria, (b) whether or not such proposed Additional Affiliate has in
the past materially breached prior material agreements with Supplier or its
affiliates or(c) whether or not the proposed Additional Affiliate is, at the
time of such determination, a direct competitor of Supplier or its affiliates;
provided further, that (i) Sprint or any Initial Affiliate has at least a 10%
equity ownership in such Person, (ii) such Person is controlled by, or under the
common control with, Sprint or any Initial Affiliate or (iii) there exists
between Sprint or any Initial Affiliate and such Person an Additional Affiliate
Agreement. A Person that is an Additional Affiliate only because there is an
Additional Affiliate Agreement between such Person and Sprint is entitled to
order Equipment and Services under this Agreement only to the extent such Person
is using this Agreement for purposes related to the marketing of communication
services under any Sprint Mark.
18.3 AFFILIATE RIGHTS.
Only Sprint may designate a Person as an Affiliate in accordance with
the terms of this Section 18.0 and (except for
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Affiliates that have issued Orders pursuant to this Section 18.0) only Sprint
has the right and/or the ability to enforce any rights hereunder against
Supplier. in no event will Sprint have any liability whatsoever for or in
connection with any Affiliate Order.
19.0 ASSIGNMENT
Sprint may transfer or assign this Agreement and any Order(s) hereunder
to any Affiliate, upon written notice to Supplier. Except as expressly set forth
in the preceding sentence, Sprint may not assign this Agreement, in whole or in
part, without the prior written consent of Supplier, and such written consent
will not be unreasonably withheld. Supplier may not assign this Agreement or any
of its rights nor delegate its obligations hereunder without the prior written
consent of Sprint, and such written consent will not be unreasonably withheld.
This Agreement will be binding upon the parties' successors and permitted
assigns. Notwithstanding anything herein to the contrary, this Agreement is
assignable by the Supplier, without Sprint's consent, in connection with any
merger, acquisition, consolidation, change of control, or sale of all or
substantially all of Supplier's assets. The assignor will be released of any
obligations that arise under this Agreement after the date this Agreement is
assigned.
20.0 TECHNOLOGY ESCROW AND AVAILABILITY
20.1 FUTURE ASSURANCES.
Supplier hereby grants to Sprint the perpetual, non-exclusive,
non-assignable, right and license to use, modify and enhance the Escrow
Technology and the Non-Escrow Technology under the restrictions set forth in
this Section 20.0, in connection with the development, enhancement, maintenance,
manufacturing, use, sale and lease of Equipment for the provision of wireless
broadband services to Sprint's and its Affiliates' customers, other than
broadband access providers owning wireless frequencies. Supplier agrees that the
rights and licenses granted to Sprint herein are licenses to rights to
intellectual property within the meaning and for purposes of Title 11, Section
365(n) of the United States code, or any replacement provision thereof. Sprint's
non-exclusive license to the Escrow Technology and the Non-Escrow Technology is
personal. Sprint may sublicense the Technology only as necessary to enable
suppliers to develop, enhance, maintain and manufacture Equipment for the
provision of wireless broadband services to Sprint's and its Affiliates'
customers (other than broadband access providers owning wireless facilities).
Sprint will not exercise its license rights except in the event it obtains
access to the Escrow Technology and Non-Escrow Technology through the procedures
outlined in this Section 20.0.
20.2 DEPOSIT OF ESCROW TECHNOLOGY.
Supplier will, at Supplier's sole expense, deposit the Escrow
Technology that is utilized in each piece of Equipment sold or licensed,
respectively, to Sprint under this Agreement with a mutually acceptable
independent escrow agent pursuant to a written escrow agreement signed by Sprint
and Supplier and consistent with the terms of this Agreement. Additionally,
Supplier will automatically deposit any updates, upgrades, or other revisions of
the Escrow Technology with such escrow agent pursuant to the escrow agreement
between the parties. Supplier will provide updated information to the escrow
agent no later than 30 days after Supplier first sells the Equipment that
incorporates the updated information. The escrow agent will give Sprint written
notice of any deposit by Supplier. Sprint will be entitled to inspect the
deposit or have a third party inspect the deposit on Sprint's behalf. The source
code delivered to the escrow agent will be in a form suitable for reproduction
by Sprint.
20.3 RELEASE OF ESCROW TECHNOLOGY.
The escrow agreement described in this Section 20.0 will provide that upon
the happening of any of the events listed in Sections 3.3(b), or 17.2.1 (a), (b)
or (c) giving rise to Sprint's right to terminate this Agreement, and upon the
effective date of the termination of this Agreement (an "Escrow Termination
Event"), Sprint will give written notice to the escrow agent and Supplier,
specifying the event, and the escrow agent will thereupon deliver to Sprint all
deposited escrowed materials within 10 days not having received an objection
from the Supplier. Any such notice must prominently reference this Agreement and
be entitled: "IMPORTANT COMMUNICATION RE: ESCROW TERMINATION EVENT." Any dispute
regarding the Escrow Termination Event shall be resolved by arbitration in
accordance with Schedule 20.3. In the event that arbitration results in finding
that an Escrow Termination Event has occurred, Supplier will withdraw its
objection to the release of the Escrow Technology.
20.4 NON-ESCROW TECHNOLOGY
Supplier shall grant Sprint access to the Non-Escrow Technology if an
arbitrator finds that an Escrow Termination Event has occurred, but such access
to the Non-Escrow Technology ("Non-Escrow Technology Access") shall not
interfere with Supplier's use of the Non-Escrow Technology necessary to support
contractual relationships.
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20.5 MAINTENANCE RELEASE OF TECHNOLOGY
Notwithstanding Sections 20.3 and 20.4, the escrow agent will
immediately release the Escrow Technology to Sprint and Supplier will
immediately provide Non-Escrow Technology Access to Sprint upon receipt of
notice from Sprint specifying the termination of this Agreement arising out of
an Escrow Termination Event set forth in Sections 17.2.1 (a) or (b)(ii) and in
spite of any objection from Supplier. If the arbitrator subsequently determines
that Sprint was not entitled to the Escrow Technology and Non-Escrow Technology
Access, then Sprint will promptly (i) return such materials to Supplier, (ii)
certify to Supplier the destruction of any copies, (iii) pay Supplier's out of
pocket costs incurred in connection with the removal and replacement of the
Escrow Technology, and (iv) reimburse Supplier for any maintenance fee revenue
avoided by Sprint as a result of the release, subject to Sprint's right to
damages for any Supplier breach of its obligations under this Agreement. Sprint
agrees that, in the event it obtains access to the Technology pursuant to this
Section 20.5, Sprint will use the Technology solely for the purpose of
maintaining the Equipment.
20.6 INSOLVENCY RELEASE OF TECHNOLOGY
Immediately upon the occurrence of a Supplier Insolvency, Supplier
shall promptly give notice to Sprint that the Supplier Insolvency exists. Any
such notice must prominently reference this Agreement and be entitled:
"IMPORTANT COMMUNICATION RE: SUPPLIER INSOLVENCY." If, upon or following such
notice, and while the Supplier Insolvency persists, (i) Supplier commits an act
constituting breach under Section 17.2.1 (a), (b) or (c), and (ii) Sprint gives
notice to Supplier and the escrow agent that such a breach occurred during a
Supplier Insolvency, then, and in spite of any objection from Supplier, (A) the
escrow agent will immediately release the Escrow Technology to Sprint and
Supplier will immediately provide Non-Escrow Technology access to Sprint (the
"Insolvency Release") and (B) Sprint may then exercise its rights under the
license of Section 20.1, but such exercise may continue only for so long as the
Supplier Insolvency persists. However, if the Supplier Insolvency persists for
more than 90 days following the Insolvency Release, then Sprint's right to use
the Escrow Technology and Non-Escrow Technology under the license of Section
20.1 shall become perpetual.
Any dispute regarding the occurrence of the Supplier Insolvency, an
Insolvency Release and/or Splint's right to gain access to the Technology
pursuant to this Section 20.6 shall be resolved by arbitration in accordance
with Schedule 20.3.
20.7 BANKRUPTCY OF SUPPLIER
If Supplier or its successors or representatives, including any
bankruptcy trustee, rejects or terminates this Agreement under Title 11, Section
365 of the United States Code, or any replacement provision therefor, Sprint
shall have the right to retain all or any portion of its rights under this
Agreement and any agreement supplementary hereto including, but not limited to,
the escrow agreement. Sprint's rights include, but are not limited to, all
rights to continue to use and have access to the Escrow Technology and the
Non-Escrow Technology including, upon written request by Sprint, the right to
obtain the Escrow Technology from Supplier (or its trustee in bankruptcy) and
have Supplier (or its trustee in bankruptcy) provide Non-Escrow Technology
Access from Supplier, and the right to obtain the Escrow Technology from the
escrow agent immediately upon such rejection or termination.
If Supplier or its successors files a, or becomes the subject of an
involuntary, petition in bankruptcy, then unless and until Supplier (or its
trustee in bankruptcy, if one has been appointed) rejects this Agreement,
Supplier (or its trustee in bankruptcy) shall (i) perform all obligations of
Supplier under this Agreement and the escrow agreement and (ii) not interfere
with the proper release of the Escrow Technology by the escrow agent to Sprint
in accordance with the terms of the Agreement.
20.8 NO WARRANTY
THE ESCROW TECHNOLOGY AND NON-ESCROW TECHNOLOGY, IF AND WHEN PROVIDED
TO SPRINT, ARE PROVIDED TO SPRINT "AS IS." OTHER THAN A WARRANTY OF
COMPLETENESS, SUPPLIER MAKES NO OTHER WARRANTIES ON THE ESCROW TECHNOLOGY AND
NON-ESCROW TECHNOLOGY.
21.0 PRICE AND PRICE WARRANTY
21.1 PRICING.
Pricing will be in accordance with the pricing disclosure letter from
Supplier to Sprint dated May 1, 2000 (the "Pricing Letter"). Any customs duties,
freight, sales, use, excise or similar taxes with respect to the Deliverables
will be detailed as a separate line item on each applicable invoice. The prices
in the Pricing Letter do not include applicable customs duties, taxes, shipping,
and special packaging and labeling.
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21.2 MOST FAVORED CUSTOMER STATUS.
Sprint will be Supplier's most favored customer. Accordingly, Supplier's
pricing to Sprint will be equal to or better than that charged to each other
customer of Supplier for the same or comparable Equipment or Services after all
reductions, rebates, volume discounts or adjustments are applied.
(A) In the event that the Net Price charged to any of Supplier's other
customers for any Deliverables is lower than the Net Price previously charged to
Sprint for such Deliverables, Sprint is entitled to receive the benefit of such
lower Net Price with respect to any Deliverables invoiced to Sprint from the
date of which such lower Net Price was invoiced to such Supplier's other
customers. In addition, such lower Net Price will be applied to all subsequent
Orders of such Deliverables by Sprint during the remainder of the term of this
Agreement, subject to future reductions under this Agreement.
(B) All invoices to Sprint for Deliverables to which a lower Net Price
is applicable under this Section 21.0, will be reissued by Supplier within 30
days after it is determined that Sprint is entitled to receive the benefit of a
lower Net Price. The reissued invoice must indicate the difference between the
Net Price originally invoiced to Sprint and the reduced Net Price, together with
all applicable sales or other tax reductions attributable to the price
reduction. The reduction in Net Price made in accordance with this Section 21.0
will be reflected on all future invoices issued by Supplier to Sprint (subject
to future reductions under this Section 21.0).
(C) On an annual basis throughout the term of this Agreement commencing
on January 1, 2001, Supplier will be required to audit its pricing of all
Deliverables provided to all of its customers in the preceding calendar year and
deliver to Sprint a certification (the "MFC Certificate") signed by an
authorized officer of Supplier, certifying that this Section 21.0 has been
adhered to and identifying what, if any, Net Prices charged to Sprint have been
decreased as a result of compliance with this Section 21.0. The MFC Certificate
will be provided to Sprint within 60 days after the close of each calendar year.
Sprint has the right to have Supplier's compliance with this Section 21.0
verified annually. Such verification shall be performed by an independent,
reputable and nationwide public accounting firm chosen by Sprint and reasonably
acceptable to Supplier. Since the conduct of the audit may expose the accounting
firm to Supplier's Proprietary Information, such accounting firm, prior to
conducting the audit, will enter into a non-disclosure agreement reasonable
acceptable to Supplier. In addition to any other terms reasonably required by
Supplier, such non-disclosure agreement shall provide that the accounting firm
will provide to Sprint only the minimum amount of information necessary for
Sprint to verify Supplier's compliance with this Section 21.0.
22.0 SOFTWARE LICENSE
Upon payment of the applicable license fee, Supplier hereby grants to
Sprint a perpetual, fully paid up, worldwide, non-exclusive right to install and
have others install, sell, and use the Software on the following terms:
(a) The Software is licensed in object code format only;
(b) The license to the Software may be transferred only in
connection with a transfer of the Equipment on which the
Software is contained or operating;
(c) Sprint and its transferees will not decompile or reverse
engineer the Software and Sprint will obtain agreements
binding the transferees of such Software to the terms of this
Section 22.0.
23.0 INVOICING AND PAYMENT
23.1 INVOICE REQUIREMENTS.
Invoices must be sent to the following address and include:
Sprint
Supplier Disbursements
6860 West 115th Street
Overland Park, KS 66211
MailStop: KSOPKD0101
(a) the Agreement number and Order number; and
(b) the date shipment was made and the shipping point;
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The line item on the Order must match the line item on the invoice,
including the price and description. Sprint may specify additional reasonable
invoicing instructions on the Order.
23.2 INVOICE.
(A) All payments required under this Agreement are due 30 days
from the date of shipment of the invoice.
(B) Prior to Final Acceptance of a System, Supplier will invoice
Sprint for Base Station Equipment incorporated into such
System as follows:
(i) 40% of the purchase price upon the date the Equipment
is shipped,
(ii) 45% of the purchase price upon Substantial Completion
of the System. Sprint shall cause the Equipment,
together with all third-party equipment to be
installed and configured and shall perform
Substantial Completion testing (including retesting)
of the System within 60 days after the date Equipment
is shipped to Sprint in accordance with the
applicable Order, and
(iii) 15% of the purchase price upon Final Acceptance of
the System.
(C) Following Final Acceptance of a System, Supplier may invoice Sprint
for 100% of the purchase price of additional Base Station Equipment incorporated
into such System upon the date the Base Station Equipment is shipped.
(D) Supplier may invoice Sprint for 100% of the purchase price of CPE
Equipment upon the date the CPE Equipment is shipped.
(E) Supplier may invoice Sprint for System Support Services on the
first day of the month in which the System Support Services will be provided.
Supplier's invoices for System Support Services will be for all System Support
Services that will be provided during the following three months.
(F) Supplier may invoice Sprint for Installation Services upon
completion of the Installation Services.
(G) Supplier may invoice Sprint for Consulting Services, including
training, performed during the month preceding the month in which the invoice is
shipped.
24.0 SHIPMENT, TITLE & RISK OF LOSS
24.1 SHIPMENT.
Shipment of the Deliverables will be F.O.B. origin. Title and risk of
loss will pass to Sprint upon delivery to Sprint's designated carrier.
24.2 EARLY SHIPMENT.
Supplier may not ship Deliverables prior to the shipment date specified
in an Order without Splint's consent. Sprint may place any Deliverables shipped
early in storage at Supplier's expense until the specified shipment date.
24.3 FACTORY TESTING.
Prior to the shipment of any Order, Supplier will test the Equipment
contained in such Order for conformance to the Specifications. Supplier will not
ship any Equipment that does not conform to the Specifications. Sprint may
attend Supplier's factory tests.
25.0 INSPECTION AND REJECTION
25.1 INSPECTION OF DELIVERABLES.
Deliverables may be inspected and tested by Sprint prior to shipment by
Supplier. At Sprint's request and expense, and subject to Supplier's reasonable
resource limitations, Supplier may provide reasonable assistance for inspections
and tests.
25.2 DEFECTIVE DELIVERABLES.
If any Deliverables are found to be defective upon inspection or not in
conformity to the Order, Sprint may:
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(a) cancel the Order as to those Deliverables and accept a
corresponding reduction in the Commitment;
(b) accept the Deliverables, at an equitable reduction in price;
(c) reject the Deliverables and return to Supplier at Supplier's
expense and require shipment of replacements which meets the
specifications set forth in this Agreement.
25.3 RIGHT TO INSPECT AND TEST.
Splint's right to inspect and test does not relieve Supplier from its
testing, inspection and quality control obligations.
26.0 WARRANTIES
26.1 EQUIPMENT WARRANTY.
Supplier warrants that the Equipment will be new and throughout the
Warranty Period:
(a) will conform to the Specifications;
(b) will be free from defects in materials and workmanship;
(c) will be free from liens and encumbrances.
26.2 EQUIPMENT WARRANTY TERM.
Supplier will promptly repair or replace the non-conforming Equipment,
at Supplier's discretion and expense. Sprint will return any such non-conforming
Equipment to Supplier in accordance with the procedures set forth on Schedule
26.2. Equipment corrected or replaced is warranted under this Section for the
remaining portion of the original Warranty Period.
26.3 PATTERN DEFECTS.
(A) In the event that more than 12% of any lot, batch or other
separately distinguishable manufacturing run of Base Station Equipment (or 10%
of any lot, batch or other separately distinguishable manufacturing run of
receiver cards forming a part of Base Station Equipment) or 6% of any lot, batch
or other separately distinguishable manufacturing run of CPE Equipment (each a
"Batch") shipped to Sprint is found to be defective with the same or similar
Defects occurring during the first 5 years after shipment of any part of such
Batch (whether or not occurring all at the same time) (a "Pattern Defect"),
Sprint may notify Supplier of the Pattern Defect. Upon receipt of such
notification, Supplier will have 30 days in which to determine the cause of such
Pattern Defect and 90 days to remedy such Pattern Defect (the "Pattern Defect
Cure Period"). Pursuant to such remediation, Supplier will promptly repair or
replace any and all Equipment that was part of the Batch subject to the Pattern
Defect, whether in Sprint's or any Affiliate's inventory or in Sprint's or any
Affiliate's distribution channels, including Equipment held by end-users.
Supplier will reimburse Sprint for any removal and reinstallation costs
associated with the repair or replacement of the Batch. For purposes of this
Section 26.3, a Defect will be considered the same or similar to another Defect
if (i) both Defects involve the failure of the Equipment to achieve the same or
similar Equipment specification (ii) both Defects arise out of the manner in
which the Equipment is assembled or (iii) both Defects arise out of the manner
in which the Equipment is designed.
(B) In the event that a Pattern Defect is not remedied within the
Pattern Defect Cure Period, Sprint will have the right to terminate this
Agreement and/or any then outstanding Order(s) and/or to resell to Supplier for
cash payment (at Sprint's original cost) any and all Equipment in Sprint's and
any Affiliate's inventory or distribution channel(s) and that are subject to any
such Pattern Defect(s), provided that if Supplier is diligently pursuing a cure,
Sprint will allow Supplier an additional 30 days to remedy such Pattern Defect
prior to taking such actions. In the event that such Pattern Defect is not
remedied, Supplier agrees to remove, at its cost, and repurchase (at Splint's
and any Affiliate's original cost therefor) from Sprint any Equipment
repurchased or otherwise recalled by Sprint due to Supplier's failure to remedy
any such Pattern Defect. Sprint will not recall any Equipment without reasonable
prior written notification to (but not the consent of) Supplier.
(C) Notwithstanding anything contained in this Agreement to the
contrary, in the event that, with respect to any Equipment, a recall or similar
demand, request or suggestions is issued by the Consumer Product Safety
Commission or other Governmental Authority, Supplier will immediately remove,
repurchase and recall (at its own cost and expense) any such Equipment whether
then held by Sprint, any Affiliate, or end-user.
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26.4 BACKWARDS COMPATIBILITY.
Enhanced Equipment will be backwards compatible with Existing
Equipment. Future Enhanced Equipment will be backwards compatible with two prior
generations of Equipment. Backwards compatible means the previous version of the
Equipment will remain fully functional up to the performance levels to which it
was performing immediately prior to the introduction of an Equipment
enhancement.
26.5 DISCLAIMER.
ALL OF THE WARRANTIES SET FORTH IN THIS SECTION 26.0 ARE IN LIEU OF, AND
SUPPLIER DISCLAIMS, ALL OTHER WARRANTIES OR REPRESENTATIONS, EXPRESS AND
IMPLIED, ORAL OR WRITTEN, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF NONINFRINGEMENT. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, SUPPLIER MAKES NO WARRANTY THAT THE
OPERATION OR PERFORMANCE OF ANY DELIVERABLE WILL BE UNINTERUPTED OR ERROR-FREE
OR WILL MEET SPRINT'S REQUIREMENTS.
27.0 LIABILITY AND INDEMNIFICATION
27.1 THIRD PARTY CLAIMS.
Each party agrees to defend, pay all third party judgments,
settlements, expenses, and costs (including reasonable attorney fees) and
indemnify, and hold the other party and its Indemnitees harmless from any suit,
claim or proceeding brought against the other party and its Indemnitees by any
third party (excluding affiliates of the indemnified party, but including any
personnel of Sprint or Supplier) for personal injury (including death), or
damage to property, to the extent the loss, destruction, injury or death is
caused by a negligent act or omission or willful misconduct by the indemnifying
party or its Indemnitees, subcontractors or agents. Any infringement of an
intellectual property right shall not be covered under this subsection, but is
covered in subsection 27.4.
27.2 PRODUCT LIABILITY CLAIMS.
Supplier will defend, pay all third party judgments, settlements,
expenses and costs (including reasonable attorney fees) and indemnify and hold
the Sprint Indemnitees harmless against any claim brought against the Sprint
Indemnitees for personal injury (including death) to the extent the claim is
based upon an allegation that any Deliverable is defective or dangerous or any
warning associated with such Deliverable is lacking or inadequate.
27.3 TAXES AND BENEFITS.
Supplier will indemnify, hold harmless and defend the Sprint
Indemnitees from all claims by any employees, subcontractors, or agents utilized
by Supplier for the performance of this Agreement, or any government or
governmental agency, relating to payment of employment taxes and employee
benefits, including without limitation, any penalties and interest which may be
assessed against the Sprint Indemnitees with respect to such taxes and benefits.
Supplier will similarly indemnify and defend the Sprint Indemnitees from all
claims by any person or governmental agency which arise directly or indirectly
from any failure by Supplier to comply with applicable workers' compensation
coverage on Supplier's employees, subcontractors and agents.
27.4 INFRINGEMENT.
(A) Supplier Indemnity. Supplier agrees to defend, indemnify the Sprint
Indemnitees for any damages incurred by the Sprint Indemnitees and hold the
Sprint Indemnitees harmless from all third party claims brought against the
Sprint Indemnitees based on any third party claim that the Deliverables as
shipped by Supplier to Sprint pursuant to this Agreement, or any use or sale or
offer to sell or importation of the Deliverables in a manner intended by
Supplier or permitted sale by the Sprint Indemnitees of such Deliverables,
constitutes an infringement of a U.S. patent, a copyright infringement, or
misappropriates a trade secret.
Supplier will have no liability, however, for any claim of infringement
to the extent caused by: (i) modification of any Deliverable other than
modifications made by or with the approval of Supplier; (ii) the use or sale or
offer to sell or importation of a Deliverable in connection with another product
(including software) or service (the combination of which causes the
infringement) not provided by Supplier unless the use was intended by Supplier;
or (iii) Supplier's compliance with Sprint's specific instructions.
If, as a result of a claim of infringement for which Supplier has an
indemnity obligation, the sale or use of Deliverables is enjoined, or the Sprint
Indemnitees must cease use based on a claim of infringement, Supplier will, at
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Supplier's option and expense, either (i) procure for the Sprint Indemnitees the
right to use the applicable Deliverables, (ii) modify the Deliverables so they
become non-infringing within a time frame reasonably acceptable to Sprint, or
(iii) replace the Deliverables with substantially equivalent non-infringing
Deliverables. In the event Supplier, using commercially reasonable efforts, is
unable to do either (i), (ii) or (iii), the Sprint Indemnitees will cease using
the Deliverables and return the same to Supplier. Supplier will then refund to
the Sprint Indemnitees the amount paid by Sprint for such infringing
Deliverables.
(B) Sprint Indemnity. Sprint agrees to indemnify and hold the Supplier
Indemnitees harmless from all third party claims brought against the Supplier
Indemnitees or its permitted assigns based upon any claim that any Deliverable
or Supplier's manufacture, use, sale or offer for sale thereof infringes any
U.S. patent, constitutes a copyright infringement, or misappropriates a trade
secret, if such infringement or alleged infringement would not have occurred or
be alleged to have occurred but for Supplier's compliance with Sprint's
specifications or instructions.
(C) SOLE REMEDY. THE PROVISIONS OF THIS SECTION 27.4 SET FORTH EACH
PARTY'S SOLE AND EXCLUSIVE OBLIGATIONS, AND THE OTHER PARTY'S SOLE AND EXCLUSIVE
REMEDIES, WITH RESPECT TO INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL
PROPERTY RIGHTS OF ANY KIND.
27.5 INDEMNIFICATION PROCEDURES.
(A) Notice of Claims. Promptly upon becoming aware of any matter which
is subject to the provisions of Sections 27.1, 27.2, 27.3 or 27.4 (a "Claim"),
the party seeking indemnification (the "Indemnified Party") must give written
notice of such Claim to the other party (the "Indemnifying Party"), accompanied
by copies of any written documentation regarding the Claim received by the
Indemnified Party.
(B) Defense of Claims. The Indemnifying Party will retain the right at
its option, to compromise or defend at its own expense and with its own counsel,
any such Claim. The Indemnified Party will have the right, at its option, to
participate in the settlement or defense of any such Claim, with its own counsel
and at its own expense; but the Indemnifying Party will have the right to
control such settlement or defense; provided, however, that the Indemnifying
Party will not enter into any settlement that imposes any liability or
obligation on the Indemnified Party without the Indemnified Party's prior
written consent. The parties agree to cooperate in any such settlement or
defense and to give each other full access to all relevant information, subject
to the execution of appropriate and reasonable confidentiality agreements. In
the event that the Indemnifying Party fails to notify the Indemnified Party of
the Indemnifying Party's intent to take any action within 15 days after receipt
of notice of a Claim or fails to proceed thereafter in good faith with the
prompt resolution of the Claim, the Indemnified Party (without waiving any
rights to indemnification hereunder) may defend such Claim and may enter into
any good faith settlement without the prior written consent of the Indemnifying
Party, and the Indemnifying Party will reimburse the Indemnified Party on demand
for all reasonable costs and expenses incurred by the Indemnified Party in
defending and settling such Claim. The Indemnified Party will notify the
Indemnifying Party prior to taking any such action.
(C) Conditions. Neither party will have an obligation to indemnify the
other if the Indemnified Party fails to notify the Indemnifying Party of a Claim
promptly and to provide reasonable cooperation, information, assistance, and
sole control for the handling and defense of the Claim, and such failure
materially prejudices the Indemnifying Party.
28.0 LIMITATION ON LIABILITY
28.1 EXCLUSION OF DAMAGES.
IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSSES, INCLUDING LOST PROFITS,
REVENUE, OR SAVINGS, OR LOSS OF USE ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR THE USE OR PERFORMANCE OR OPERATION OF ANY DELIVERABLE, WHETHER
SUCH LIABILITY ARISES FROM ANY CLAIM BASED ON CONTRACT, WARRANTY, TORT
(INCLUDING NEGLIGENCE), PRODUCT LIABILITY OR OTHERWISE, AND WHETHER OR NOT
SUPPLIER HAS BEEN ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES OR LOSS.
28.2 TOTAL LIABILITY.
IN NO EVENT WILL EITHER PARTY'S TOTAL LIABILITY TO THE OTHER UNDER THIS
AGREEMENT, REGARDLESS OF THE FORM OF CLAIM OR ACTION, EXCEED THE GREATER OF $10
MILLION OR 3 TIMES THE FEES PAID BY SPRINT TO SUPPLIER DURING THE 12-MONTH
PERIOD PRECEDING THE EVENT THAT GAVE RISE TO THE CLAIM.
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28.3 EXCLUSION OF CLAIMS.
THE PROVISIONS OF SECTION 28.2 DO NOT APPLY TO ANY CLAIMS FOR WHICH A
PARTY HAS AN OBLIGATION OF INDEMNITY UNDER SECTION 27.0 OF THIS AGREEMENT. THE
PROVISIONS OF THE SECTION 28.l DO NOT APPLY TO ANY CLAIMS FOR WHICH A PARTY HAS
AN OBLIGATION OF INDEMNITY UNDER SECTIONS 27.1, 27.2 OR 27.3 OF THIS AGREEMENT.
29.0 INSURANCE
29.1 INSURANCE OBLIGATIONS.
During the term of this Agreement, Supplier must obtain and maintain at
Supplier's expense, with financially reputable insurers licensed to conduct
business in all jurisdictions where work is performed and that are reasonably
acceptable to Sprint, not less than the following insurance:
(a) Workers' Compensation as required under any Workers'
Compensation or similar law in the jurisdiction where work is performed,
with an Employer's Liability limit of not less than $500,000 per accident;
(b) Commercial General Liability, including coverage for
Contractual Liability and Products/Completed Operations Liability, with a
primary limit of not less than $1,000,000 combined single limit per
occurrence for bodily injury, personal injury and property damage
liability, together with umbrella or excess coverage not less than
$10,000,000 naming Sprint as an additional insured.
(c) Business Auto insurance covering Supplier's maintenance or use
of any owned, non-owned or hired automobile with a limit of not less than
$1,000,000 combined single limit per accident for bodily injury, including
death and property damage liability, naming Sprint as an additional
insured;
(d) "All Risk" Property insurance covering not less than the full
replacement cost of Supplier's, if any, personal property while on Sprint
premises. Supplier will ensure that subcontractors, if any, also have
adequate "All Risk" property insurance.
29.2 CERTIFICATE OF INSURANCE.
Supplier must, as a material condition of this Agreement, prior to
commencement of any work and prior to any renewal of insurance, deliver to
Sprint a certificate of insurance, satisfactory in form and content to Sprint,
evidencing that the above insurance is in force and will not be canceled or
materially altered without first giving Sprint 30 days' prior written notice.
29.3 NO INSURANCE LIMITATION.
Nothing contained in this Section 29.0 limits Supplier's liability to
Sprint to the limits of insurance certified or carried.
30.0 DISPUTE RESOLUTION
30.1 NEGOTIATION.
The parties may, but are not obligated to, attempt in good faith to
resolve any issue, dispute, or controversy arising out of or relating to this
Agreement, including but not limited to any Section of this Agreement that
requires mutual agreement of the parties, promptly by negotiation between the
parties' representatives who have authority to settle any issue, dispute, or
controversy. In the event the parties agree to comply with this Section 30.1,
any party may give the other party written notice of any dispute not resolved in
the normal course of business. Within 10 days after delivery of such notice,
representatives of both parties will meet at a mutually acceptable time and
place, according to the following schedule, to exchange relevant information and
to attempt to resolve the dispute:
(A) Within l0 days following notice, managers from Sprint
and Supplier will meet for a period not to exceed 2
business days, unless otherwise agreed.
(B) Within 20 days following notice, directors from
Sprint and Supplier will meet for a period not to
exceed 2 business days, unless otherwise agreed.
(C) Within 30 days following notice, Assistant Vice
Presidents or Vice Presidents from Sprint and
Supplier will meet for a period not to exceed 1
business day, unless otherwise agreed.
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If a negotiator intends to be accompanied at a meeting by an attorney,
the other negotiator will be given at least 2 business days' notice of such
intention and may also be accompanied by an attorney. All negotiations pursuant
to this provision are confidential and will be treated as compromise and
settlement negotiations for purposes of the Federal Rules of Evidence and State
Rules of Evidence.
30.2 WAIVER OF JURY.
EACH PARTY AGREES TO WAIVE, AND HEREBY DOES WAIVE, ITS RIGHTS TO A JURY
WITH RESPECT TO ANY LITIGATION BETWEEN THE PARTIES ARISING OUT OF THIS
AGREEMENT.
30.3 VENUE.
Any court proceeding brought by Supplier must be brought, as
appropriate, in Kansas District Court located in Johnson County, Kansas, or in
the United States District Court for the District of Kansas in Kansas City,
Kansas. Any court proceeding brought by Sprint must be brought in a California
State Court located in Santa Clara County, CA or in the United States Federal
District Court in Santa Clara County, CA.
31.0 FEDERAL REQUIREMENTS
31.1 FEDERAL ACQUISITION REQUIREMENTS.
If Sprint or the federal government determines that this Agreement
supports specific requirements included in a Sprint contract or subcontract with
the federal government, Supplier will be subject to certain federal acquisitions
regulations ("FARs") contained in Sprint's contract or subcontract. Supplier
will be subject only to FARs that must be included in all subcontracts as a
matter of law. The applicable FAR will be attached to the affected Order.
31.2 GOVERNMENT END USERS.
If Sprint is acquiring the Equipment on behalf of any unit or agency of
the United States Government, the following provisions apply. The Hybridware
Software constitute a "commercial item", as that term is defined at Federal
Acquisition Regulation (FAR) 2.101 (Oct. 1995), consisting of "commercial
computer software" and "commercial computer software documentation", as such
terms are used in FAR 12.212 (Sept. 1995), and is provided to the U.S.
Government only as commercial software (with "Restricted Rights," if
applicable). Use, duplication, or disclosure by the U.S. Government is subject
to restrictions set forth in this license agreement and as provided in DFARS
227.7202-l(a) and 227.7202-3(a) (1995), DFARS 252.227-7013-C-(1)(iI) (OCT 1988),
FAR 12.212(a) (1995), FAR 52.227-19, or FAR 52.227-14 (ALT III), as applicable.
31.3 SUBCONTRACTING OPPORTUNITIES.
Should Sprint become subject to federal government reporting
requirements as a prime contractor or subcontractor, Supplier agrees to make an
accounting, upon request, of dollars that are subcontracted to firms that are
Small Businesses, Small Disadvantaged Businesses, or Women-Owned Businesses
under Small Business Administration regulations. These dollars will be reported
in writing to the following address:
Sprint
Attention: Director, Supplier Diversity
903 E. 104th Street
Kansas City, MO 64131
32.0 PRODUCT SAFETY NOTIFICATIONS
Supplier will promptly notify Sprint by telephone (followed by written
confirmation within 24 hours) if the Equipment 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 Sprint for
its intended purpose.
33.0 INTELLECTUAL PROPERTY
As soon as possible, but in no event later than June 30, 2001, Supplier
will complete an application programming interface and a reference design,
including without limitation, the schematic, bill of material, source code and
object code for the CPE operating system (collectively, the "Interface").
Supplier will license the Interface to third parties designated by Sprint to
allow such third parties to develop, make, have made, use, sell and import an
alternative to the CPE solely to interface with
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Hybrid Base Station Equipment and no other third party base station equipment.
Supplier shall license the Interface to such third parties on commercially
reasonable terms acceptable to Supplier. The terms of such license shall be
consistent with the practice in the telecommunications services industry for the
license of comparable technology, equipment and the intellectual property
actually licensed by Supplier (such terms shall not be deemed to be commercially
reasonable if they prohibit such third party from developing, manufacturing and
selling an alternative to the CPE on market competitive terms and conditions).
Any dispute regarding the terms of such license shall be resolved by arbitration
in accordance with Schedule 20.3. The Interface shall include all
specifications, schematics, bill of material, source and object code or other
technical information and rights, necessary or useful to allow a third party to
manufacture an alternative to the CPE which interfaces with the Hybrid Base
Station Equipment consistent with the Specifications. Supplier is not required
to license third parties to make, use, or sell Base Station equipment of any
type. Supplier retains the right to refuse to license a third party against whom
it has given notice that such third party is infringing upon its intellectual
property rights, is actively in discussions or negotiations with such third
party concerning the infringement, or is otherwise actively enforcing its
intellectual property rights against such third party.
34.0 PROPRIETARY INFORMATION
34.1 SPRINT PROPRIETARY INFORMATION.
Supplier acknowledges that while performing this Agreement it may have
access to Sprint-owned trade secrets, including, but not limited to, products or
planned products, service or planned service, vendors, customers, prospective
customers, data, financial information, computer software, processes, methods,
knowledge, inventions, ideas, marketing promotions, discoveries, current or
planned activities, research, development or other information relating to
Sprint's business activities or operations or those of its customers or vendors
("Sprint Proprietary Information").
34.2 SUPPLIER PROPRIETARY INFORMATION.
Sprint acknowledges that while performing this Agreement it may have
access to Supplier-owned trade secrets, including, but not limited to, products
or planned products, service or planned service, vendors, customers, prospective
customers, data, financial information, Software, processes, methods, knowledge,
inventions, ideas, marketing promotions, discoveries, current or planned
activities, research, development or other information relating to Supplier's
business activities or operations or those of its customers or vendors, and
Supplier's source code and Escrow Technology and Non-Escrow Technology
("Supplier Proprietary Information").
34.3 CONFIDENTIALITY OF PROPRIETARY INFORMATION.
This Agreement creates a confidential relationship between Sprint and
Supplier. The parties will keep each other's Proprietary Information
confidential, and except as authorized by the owner of the Proprietary
Information in writing, the non-owner of Proprietary Information may not
disclose, and may only use, the Proprietary Information to perform this
Agreement, and may only make copies necessary for performing this Agreement. The
parties will make a good faith effort to label all Proprietary Information as
proprietary to the owner of Proprietary Information. Upon cessation of work, or
upon the owner of Proprietary Information's request, the non-owner of
Proprietary Information will immediately return to the owner of Proprietary
Information all documents and other materials in the non-owner of Proprietary
Information's control that contain or relate to Proprietary Information. The
parties may disclose Proprietary Information of the other to their affiliates,
subcontractors and representatives (collectively, "Representatives") who have a
need to know the information for purposes of carrying out the transactions
contemplated by this Agreement and, in the case of Sprint, for installing or
maintaining the Equipment; provided such Representatives are bound by the terms
of a confidentiality agreement. In any event, each party will be responsible for
the disclosures of their Representatives. Any customers of Sprint receiving any
Proprietary Information shall also be bound by the terms of this section 34.3.
34.4 EXCEPTIONS FOR CONFIDENTIALITY.
The confidentiality obligations for the Proprietary Information does
not include information that the non-owner of Proprietary Information can
demonstrate:
(A) is rightfully known to the non-owner of Proprietary
Information prior to first receiving such information from the owner of the
Proprietary Information; or
(B) is independently developed by the non-owner of Proprietary
Information without any reliance on any of the owner's Proprietary
Information; or
(C) is or later becomes part of the public domain through no
fault of the non-owner of the Proprietary
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Information; or
(D) is lawfully obtained by the non-owner of Proprietary
Information from a third party, and such third party is not under any
confidentiality obligation to the owner of Proprietary Information.
34.5 INJUNCTIVE RELIEF FOR PROPRIETARY INFORMATION.
The non-owner of Proprietary Information acknowledges that its wrongful
use or disclosure of any of the owner's Proprietary Information will cause
irreparable injury to the owner of the Proprietary Information, that is
inadequately compensable in monetary damages. Accordingly, the owner of
Proprietary Information may seek injunctive relief in any court of competent
jurisdiction for the breach or threatened breach of this Section, in addition to
any other remedies in law or equity.
35.0 INDEPENDENT CONTRACTOR
35.1 INDEPENDENT CONTRACTORS.
Supplier, its subcontractors, employees or agents are independent
contractors for all purposes and at all times. Supplier has the responsibility
for, and control over, the means and details of providing the Deliverables and
performing the Services, subject to Sprint's inspection. Supplier will provide
all training, hiring, supervising, hours of work, work policies and procedures,
work rules, compensation, payment for expenses and discipline and termination of
its employees.
35.2 SPRINT'S RESPONSIBILITIES.
Sprint will incur no responsibility or obligation to employees, agents,
subcontractors or other parties utilized by Supplier to perform this Agreement.
Such person or parties will, at all times, remain employees, agents or
subcontractors (whichever is applicable) of Supplier.
35.3 RESPONSIBILITY FOR WAGES AND TAXES.
Supplier is solely responsible for payment of wages, salaries, fringe
benefits and other compensation of, or claimed by, Supplier's employees
including, without limitation, contributions to any employee benefit, medical or
savings plan and is responsible for all payroll taxes including, without
limitation, the withholding and payment of all federal, state and local income
taxes, FICA, unemployment taxes and all other payroll taxes.
35.4 REMOVAL OF SUPPLIER PERSONNEL.
If Sprint determines that a Supplier-provided employee, agent or
subcontractor is not providing satisfactory service, Sprint will advise Supplier
and may require Supplier to remove that individual or subcontractor. Sprint will
only pay for work actually performed by the removed individual or subcontractor
prior to Sprint's notice for removal and not for transportation or per diem
costs associated with replacing the individual.
35.5 CONTRACTORS' COMPLIANCE.
Supplier and Sprint will require their respective employees, agents and
subcontractors to comply with the terms and conditions of this Agreement.
36.0 WORK ON SPRINT AND SUPPLIER PREMISES
If Supplier's or Sprint's performance of this Agreement involves
performance on Sprint's or Supplier's premises, respectively, Supplier and
Sprint will take necessary precautions to prevent injury to persons or property
during the work and adhere to the security procedures of the other party.
Supplier's and Sprint's employees, agents and contractors are prohibited from
carrying weapons or ammunition onto the other parties' premises or using or
carrying weapons while performing work on Sprint's behalf or attending
Sprint-sponsored or Supplier-sponsored activities. Supplier and Sprint further
agrees to comply with any postings or notices located on each other's premises
regarding safety, security or weapons.
37.0 SECURITY
37.1 COMPLIANCE WITH SPRINT POLICIES.
Security access rights to each party's premises will be designated by
that party. Each party will abide by the other's procedures and policies
applicable to that party's premises access rights and ensure compliance by its
employees, agents and subcontractors.
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37.2 SECURITY FOR SOFTWARE.
Software security will be followed by Supplier and Sprint for any
application used by the other party. Sprint will designate the required Sprint
software access to Supplier's employees and will make the request to Supplier
for Supplier software access for Sprint employees.
38.0 TECHNICAL SUPPORT SERVICE AND FEES
38.1 SYSTEM SUPPORT SERVICES.
Upon Sprint's request, Supplier will perform the System support
services ("System Support Services") in accordance with the requirements set
forth in Schedule 38.1. Sprint or its System Integrator will obtain either Tier
II or Tier III System Support Services from Supplier for each System for a
period of at least one year from Substantial Completion of such System. Sprint
will provide Supplier written notice of Sprint's intent to continue or
discontinue System Support Services. Such notice shall be provided 30 days in
advance of the requested date of termination of the System Support Services.
Sprint will designate in its request whether Sprint is requesting Tier II or
Tier III System Support Services. If Sprint is requesting Tier II System Support
Services, Supplier will follow the procedures in Schedule 38.1. If Sprint is
requesting Tier III System Support Services, Supplier will follow the procedures
in Schedule 38.1 only after Sprint's System Integrator has used reasonable
efforts to identify the nature of the problem, and using commercially reasonable
efforts, has or will be unable to provide a resolution.
Supplier will provide for each System, at no additional cost to Sprint,
System Support Services for a period of 90 days following Substantial Completion
of such System.
38.2 INSTALLATION SERVICES.
Upon Sprint's request, Supplier will provide one support engineer that
will provide technical assistance to Sprint during the installation by Sprint of
Base Station Equipment. Such support engineer will be provided to Sprint at the
rates set forth in the Pricing Letter, except that the support engineer will be
provided for one day at no charge. Sprint will pay the reasonable out of pocket
travel expenses of Supplier's personnel incurred in connection with performing
installation services for Sprint. When traveling at Splint's expense, Supplier
will adhere to Splint's travel policy.
38.3 ADDITIONAL SERVICE FEES.
Supplier will provide other System related services (not included
within the Services performed by Supplier pursuant to Section 38.1 or 38.2) to
Sprint upon reasonable notice ("Consulting Services").
38.4 FEE INCREASES.
Supplier may increase its fees for Services on January 1 of each year
by an amount not to exceed the change in the cost of living index for San Jose,
CA as published by the U.S. Bureau of Labor Statistics between January 1 of the
prior year and the January 1 of the change.
38.5 ON SITE TECHNICAL SUPPORT PERSON.
Supplier will provide potential candidates to Sprint for mutually
agreed upon selection of a candidate to be an on-site technical support person
("Technical Support Person"). The Technical Support Person will work at a site
designated by Sprint three weeks per month, and at Supplier's location one week
per month for one year after Supplier receives payment from Sprint (the "Support
Term"). Sprint will pay to Supplier the rate for the Technical Support Person as
designated in the Pricing Letter. Sprint will also pay for all travel and living
expenses for the Technical Support Person for the Support Term. If Sprint wants
to retain the services of the Technical Support Person after the expiration of
the Support Term, Sprint must request such retention thirty days prior to the
expiration of the Support Term. The actual Supplier employee fulfilling the role
of the Technical Support Person may change during the Support Term; however, any
replacement employee shall be selected in accordance with the terms of this
Section 38.5.
39.0 TRAINING SERVICES AND FEES
Supplier will provide a trainer at a site designated by Sprint three
weeks per month, and at Supplier's location one week per month for preparing and
upgrading documentation. Sprint will provide all training hardware and Supplier
will provide one copy of the training documentation. Supplier will use Sprint's
travel policy when traveling at Sprint's expense.
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40.0 NOTICES
Communications relating to this Agreement must be identified to this
Agreement and the applicable Order number and sent by certified mail, return
receipt requested, telex, facsimile or overnight mail to the following addresses
or as may be later designated by written notice of the other party'
Sprint: Sprint Corporation
Senior Director, Business Development
Broadband Wireless Group
6450 Sprint Parkway
Overland Park, Kansas 66251
Fax: (913) 315-9264
Sprint Corporation
Assistant Vice President, Supply Chain Management
903 E. 104th Street
Kansas City, MO 64131
Fax: (815) 854-2280
Supplier: Ms. Thara Edson
Vice President and Chief Financial Officer
Hybrid Networks, Inc.
6409 Guadalupe Mines Road,
San Jose, CA 95120
Fax: 408-323-6470
41.0 GENERAL
41.1 MATERIAL/MECHANIC'S LIEN.
Supplier will promptly pay for all services, materials, equipment,
and/or labor used under this Agreement, and will hold Sprint harmless from all
losses, expenses, and liabilities connected with Supplier's failure to promptly
pay for services, materials equipment and/or labor and will keep Sprint premises
free of claims or liens. Supplier will furnish Sprint with a list of all its
subcontractors before Services are performed on premises by subcontractors.
Supplier will furnish Sprint with lien waivers from all subcontractors.
41.2 GOVERNING LAW.
This Agreement and any claims arising out of this Agreement are
governed by and construed in accordance with the laws of the State of Kansas
without regard to any conflict of laws provision.
41.3 WAIVER.
The waiver of a breach of any term of this Agreement will not
constitute the waiver of any other breach of the same or any other term.
41.4 SEVERABILITY.
If certain provisions of this Agreement are held to be unenforceable,
the remaining provisions will remain in effect, to be construed as if the
unenforceable provisions were originally deleted.
41.5 SURVIVAL.
Numbered provisions 5.0, 9.0, 16.0, 17.4, 20.0 (excluding 20.2), 26.0,
27.0, 28.0, 30.0, 34.0, 41.2 and 41.7 will survive the termination or expiration
of this Agreement, in addition to any other provisions that by their content are
intended to survive the termination or expiration of this Agreement.
41.6 THIRD PARTY BENEFICIARIES.
Supplier will make available to Sprint's third party System Integrators
comparable terms that are at least as favorable to such third party System
Integrators as provisions 3.3, 3.5, (Section 3.5 is subject to Sprint priority)
21.0, 23.2, 26.1, 26.2,
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26.3, 38.1 and 38.2 of this Agreement, but only to the extent the third party
System Integrators are relying on such terms for the purposes of supplying goods
and services to Sprint.
Supplier's failure to comply with its obligations under such provisions
to Sprint's System integrators will be deemed to be a breach of the
corresponding provision of this Agreement by Supplier and entitle Sprint to the
remedies available to Sprint under this Agreement. For example, if Supplier
fails to meet the Fulfillment Standard described in Section 3.3 on Orders
submitted by Sprint's System integrators in connection with the supply of goods
and services to Sprint, then Sprint will have the rights described in Section
3.3 of this Agreement.
41.7 PUBLICITY.
Neither Sprint nor Supplier will, without the other's prior written
consent:
(A) make any news release, public announcement, denial or
confirmation of this Agreement or its subject matter;
or
(B) in any manner advertise or publish the fact of this
Agreement.
41.8 REMEDIES.
All remedies available to either party under this Agreement are
cumulative and may be exercised concurrently or separately. The exercise of one
remedy will not be an election of that remedy to the exclusion of other
remedies.
41.9 ETHICS CODE.
Both parties agree to comply with Sprint's Principles of Business
Conduct, where applicable, a copy of which has been provided to Supplier.
41.10 LAWS AND REGULATIONS.
Each party must comply with all Applicable Law in the performance of
this Agreement.
41.11 PERMITS AND LICENSES.
Supplier must obtain and keep current at Supplier's expense all
governmental permits, certificates and licenses necessary for Supplier to
perform under this Agreement.
41.12 SCHEDULES.
The following exhibits are attached to and incorporated by this
Agreement:
Schedule 1.16 List of Equipment
Schedule 1.21 Master Test Plans
Schedule 1.25 Initial Affiliates
Schedule 1.40 System Illustration
Schedule 3.1 Manufacturing Capacity and Lead Times
Schedule 3.4 Shipping Procedures
Schedule 4.1 Raw Material Lead Times
Schedule 8.3 Exclusivity Features
Schedule 11.0 Scope Change Form
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Schedule 15.2.1 Sole Source Suppliers
Schedule 15.2.2 Form of Supplier's Consent
Schedule 20.3 Arbitration Procedures
Schedule 26.2 Return Procedures
Schedule 38.1 Maintenance and Support Terms
41.13 FORCE MAJEURE.
If either party's ability to perform its obligations under this Agreement
is interfered with by reason of any strikes, riots, insurrection, fires, flood,
storm, explosions, acts of God, war, governmental action, labor conditions,
earthquakes, or similar causes beyond the reasonable control of such party, then
such party will be excused from such performance on a day-for-day basis to the
extent of such interference (and the other party will likewise be excused from
performance on a day-for-day basis to the extent such party's obligations relate
to the performance so interfered with); provided, that the party so affected
will use its best efforts under the circumstances to remove such causes of
nonperformance. In the event that a force majeure claimed by either party lasts
in excess of 90 days from the commencement of any such claim, the party not so
claiming force majeure hereunder will have the right, but not the obligation, to
terminate this Agreement.
42.0 ENTIRE AGREEMENT
This Agreement together with its exhibits, constitutes the entire agreement
between the parties with respect to the subject matter contained and supersedes
all prior or contemporaneous agreements, understandings or communications,
written or oral, concerning such subject matter. This Agreement may not be
amended or modified without specific written amendment, signed by duly
authorized representatives of both parties.
SPRINT/UNITED MANAGEMENT COMPANY HYBRID NETWORKS, INCORPORATED
Signed: /S/ DAVID XXX Signed:
------------------------ -------------------------------
By: By:
---------------------------- -----------------------------------
Title: Title:
------------------------- --------------------------------
Date: May 1, 2000 Date:
-------------------------- ---------------------------------
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Schedule 20.3 Arbitration Procedures
Schedule 26.2 Return Procedures
Schedule 38.1 Maintenance and Support Terms
41.13 FORCE MAJEURE.
If either party's ability to perform its obligations under this Agreement
is interfered with by reason of any strikes, riots, insurrection, fires, flood,
storm, explosions, acts of God, war, governmental action, labor conditions,
earthquakes, or similar causes beyond the reasonable control of such party, then
such party will be excused from such performance on a day-for-day basis to the
extent of such interference (and the other party will likewise be excused from
performance on a day-for-day basis to the extent such party's obligations relate
to the performance so interfered with); provided, that the party so affected
will use its best efforts under the circumstances to remove such causes of
nonperformance. In the event that a force majeure claimed by either party lasts
in excess of 90 days from the commencement of any such claim, the party not so
claiming force majeure hereunder will have the right, but not the obligation, to
terminate this Agreement.
42.0 ENTIRE AGREEMENT
This Agreement together with its exhibits, constitutes the entire agreement
between the parties with respect to the subject matter contained and supersedes
all prior or contemporaneous agreements, understandings or communications,
written or oral, concerning such subject matter. This Agreement may not be
amended or modified without specific written amendment, signed by duly
authorized representatives of both parties.
SPRINT/UNITED MANAGEMENT COMPANY HYBRID NETWORKS, INCORPORATED
Signed: Signed: /S/ THARA M. EDSON
--------------------------- -------------------------
By: By: THARA M. EDSON
------------------------------- -----------------------------
Title: Title: VP OF FINANCE & CFO
---------------------------- --------------------------
Date: Date: 5/1/2000
----------------------------- ---------------------------
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Schedule 15.2.1 Sole Source Suppliers
Schedule 15.2.2 Form of Supplier's Consent
Schedule 20.3 Arbitration Procedures
Schedule 26.2 Return Procedures
Schedule 38.1 Maintenance and Support Terms
41.13 FORCE MAJEURE.
If either party's ability to perform its obligations under this Agreement
is interfered with by reason of any strikes, riots, insurrection, fires, flood,
storm, explosions, acts of God, war, governmental action, labor conditions,
earthquakes, or similar causes beyond the reasonable control of such party, then
such party will be excused from such performance on a day-for-day basis to the
extent of such interference (and the other party will likewise be excused from
performance on a day-for-day basis to the extent such party's obligations relate
to the performance so interfered with); provided, that the party so affected
will use its best efforts under the circumstances to remove such causes of
nonperformance. In the event that a force majeure claimed by either party lasts
in excess of 90 days from the commencement of any such claim, the party not so
claiming force majeure hereunder will have the right, but not the obligation, to
terminate this Agreement.
42.0 ENTIRE AGREEMENT
This Agreement together with its exhibits, constitutes the entire agreement
between the parties with respect to the subject matter contained and supersedes
all prior or contemporaneous agreements, understandings or communications,
written or oral, concerning such subject matter. This Agreement may not be
amended or modified without specific written amendment, signed by duly
authorized representatives of both parties.
SPRINT/UNITED MANAGEMENT COMPANY HYBRID NETWORKS, INCORPORATED
Signed: /S/ DAVID XXX Signed: MICHAEL D. GREENBAUM
--------------------------- ------------------------
By: By:
------------------------------- ---------------------------
Title: Title: PRESIDENT & CEO
---------------------------- -------------------------
Date: May 1, 2000 Date: May 6, 2000
---------------------------- -------------------------
29
<PAGE>
SCHEDULE L.16
EQUIPMENT LIST
SECTION 1: PoP Equipment
<TABLE>
<CAPTION>
Part number Description List Price
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
CMG.2000-SP CYBERMNGR 2000+ SW FOR 20,000 SUBS. NEW SPARC 5 $109,091
- ------------------------------------------------------------------------------------------------------
CMG-2000-SPB CYBERMNGR 2000+SW FOR 20,000 SUBS. REFURBISHED SPARC 5 $109,091
- ------------------------------------------------------------------------------------------------------
CMD-2000B CM DOWNSTREAM ROUTER + SW, PLUG-IN REDUNDANT P/S $22,000
- ------------------------------------------------------------------------------------------------------
SQC-200-3 SIF (QAM) CARD, 3-CHANNEL (EACH 10 MBPS) $6,423
- ------------------------------------------------------------------------------------------------------
QMC-200-3FC 64 QAM MODULATOR CARD W/COMBINER AND FILTER, 3 CHANNEL $7,185
- ------------------------------------------------------------------------------------------------------
QMC-200-3 64 QAM MODULATOR CARD W/COMBINER, 3 CHANNEL $6,825
- ------------------------------------------------------------------------------------------------------
HEM-2204-B ENCODER BASEBAND (64 QAM) $3,685
- ------------------------------------------------------------------------------------------------------
HEM-2204-1 MODULATOR-IF (64 QAM) $4,820
- ------------------------------------------------------------------------------------------------------
CMU-2000-14CB CM UPSTREAM ROUTER + SW, PLUG-IN REDUNDANT P/S $29,000
- ------------------------------------------------------------------------------------------------------
QDC-030-2 QPSK DEMODULATOR RECEIVER CARD, 2 PORTS PER CARD $4,500
- ------------------------------------------------------------------------------------------------------
</TABLE>
SECTION 2: Commercial PoP Equipment.
<TABLE>
<CAPTION>
Part number Description List Price
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
DKT-030 MONITOR AND KEYBOARD (BOTH RACKMOUNT FOR CMD AND CMU) $925
- ------------------------------------------------------------------------------------------------------
</TABLE>
SECTION 3: Spare Part
<TABLE>
<CAPTION>
Part number Description List Price
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
LAC-010 10/100 BASE T LAN INTERFACE CARD $170
- ------------------------------------------------------------------------------------------------------
QDM-030-2 MASTER QPSK DEMODULATOR RECEIVER CARD) $5,500
- ------------------------------------------------------------------------------------------------------
SUG-2000 CYBERMANAGER HARD DRIVE WITH FACTORY SOFTWARE LOADED $2,200
- ------------------------------------------------------------------------------------------------------
087-00022-XX CMD HARD DRIVE WITH FACTORY SOFTWARE LOADED $450
- ------------------------------------------------------------------------------------------------------
087-00023-XX CMU HARD DRIVE WITH FACTORY SOFTWARE LOADED $450
- ------------------------------------------------------------------------------------------------------
</TABLE>
* See attached for Spare Part assumptions
SECTION 4: Hybrid Modem Pricing
<TABLE>
<CAPTION>
Part number Description
<S> <C>
- ------------------------------------------------------------------------------------------------------
WBR-60-231 ROUTER, (60 USER), QPSK RETURN RS232 - PRIOR TO 12/1/00
- ------------------------------------------------------------------------------------------------------
WBR-60-231B ROUTER, (60 USER), QPSK RETURN RS232 - PRIOR TO 12/1/00
- ------------------------------------------------------------------------------------------------------
WBR-60-231 ROUTER, (60 USER), QPSK RETURN RS232 - AFTER 12/1/00
- ------------------------------------------------------------------------------------------------------
WBR-60-231B ROUTER, (60 USER), QPSK RETURN RS232 - AFTER 12/1/00
- ------------------------------------------------------------------------------------------------------
</TABLE>
SECTION 5: Consulting
<TABLE>
<CAPTION>
Part number Description
<S> <C>
- ------------------------------------------------------------------------------------------------------
CON-SP-100 ARCHITECTURAL CONSULTING
- ------------------------------------------------------------------------------------------------------
CON-SP-200 SOFTWARE CONSULTING
- ------------------------------------------------------------------------------------------------------
CON-SP-300 HARDWARE CONSULTING
- ------------------------------------------------------------------------------------------------------
CON-SP-400 SUPPORT ENGINEERING
- ------------------------------------------------------------------------------------------------------
</TABLE>
SECTION 6: Support Contract
<TABLE>
<CAPTION>
Part number Description
- ------------------------------------------------------------------------------------------------------
<S> <C>
SSP-SP2 LEVEL II (PER YEAR)
- ------------------------------------------------------------------------------------------------------
SSP-SP3 LEVEL ILL(PER YEAR)
- ------------------------------------------------------------------------------------------------------
SSP-SP-OS FULL-TIME ON SITE TECHNICAL SUPPORT AT SPRINT-DESIGNATED LOCATION
- ------------------------------------------------------------------------------------------------------
</TABLE>
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
SECTION 7: Training On Site
<TABLE>
<CAPTION>
Part number Description
<S> <C>
- ---------------------------------------------------------------------------------------
TRN-250-OS FULL TIME ON-SITE TRAINING AT SPRINT LOCATION.
- ---------------------------------------------------------------------------------------
TRN-SP-100 ON SITE TRAINING AT SPRINT LOCATION
- ---------------------------------------------------------------------------------------
</TABLE>
SECTION 8: New Software Releases
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------
SWM-SP-100 SOFTWARE ENHANCEMENTS
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
SPRINT PROPRIETARY INFORMATION - RESTRICTED
2
<PAGE>
SCHEDULE 1.21
MASTER TEST PLANS
1.0 INITIAL SYSTEM VERIFICATION
Sprint and the Supplier will perform end-to-end System verification prior to
deployment of any System hereunder on Supplier's System deployed and operating
in Phoenix. Sprint will provide access to its System in Phoenix and each party
will provide resources required to satisfy the initial System verification as
promptly as possible. Initial System verification will test all functional and
performance capabilities of the System against the Specifications and will
include those tests contemplated for Substantial Completion. In the event the
parties are unable to demonstrate that the System in Phoenix is operating in
accordance with its Specifications and has satisfied the Substantial Completion
testing procedures within 45 days from the Effective Date, the Commitment will
be terminated.
2.0 SUBSTANTIAL COMPLETION TESTING
The purpose of Substantial Completion Testing is to confirm the operational
capability in accordance with the Specifications of the System in a "real world"
environment. The test plan will clearly identify tests to be run, procedures to
monitor and measure system performance, equipment necessary to undertake tests,
and expected results and roles and responsibilities.
The test will simulate real world environmental conditions to the extent
possible, including, performance under load, reasonable interference, and other
environmental conditions. To accomplish this, Sprint will provision at least
eight customers (or test sites) per sector in each System. All users in MDS-1
sectors shall broadcast on a common RF channel and all users in MDS-2 sectors
shall broadcast on a common RF channel. Test will be performed for various
upstream channel widths. The tests must test for all minimums, maximums and
operational. All test results must be valid and based on objective criteria.
These tests will include, but will not be limited to, the following types of
tests:
A. FIELD INSTALLATION AND INTEGRATION ACCEPTANCE TESTS
- - Power Up Procedures
- - Transmit tests (Repeated for each CMD and CMD channel)
- - Diagnostic Testing
- - Alarm Testing (monitor system shall be tested to ensure that cyber
manager alarm message logs are created and passed to network)
- - Software Installation (including, but not limited to functionality,
interoperability and performance testing of the software.)
- - Initialization
- - Call Processing Testing
- - Remote Unit Installation and Test
- - Routing Tests
- - Equipment, including third party equipment and all functional elements
thereof, shall be tested (including RF, Hybrid (and IP infrastructure
elements)
- - Interoperability Testing, (including, but not limited to
interoperability to various vendor platforms, routers, etc.)
- - Provisioning interface test (ensure correct operation of customer and
network provisioning capabilities)
- - Network management interface test (ensure correct operation of the
network management capabilities).
- - Cold-start. (To ensure the system is recoverable, in the event of loss
of system power or system maintenance, a cold-start of all components
will be performed. After reactivation, basic regression testing of the
above tests will be performed to ensure continued proper operation.)
B. SYSTEM PERFORMANCE TESTS
- - Super - Cell Capacity. For a representative sample of downstream
channels and a representative sample of upstream channels, throughput
testing will be performed to ensure deployed capacity is within design
margins.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
3
<PAGE>
- - Delay. For a representative sample of downstream channels and a
representative sample of upstream channels, latency testing will
be performed to ensure the System is within design margins.
- - R.F Coverage. Each downstream RF channel and each upstream RF channel,
testing will be performed to ensure the link budget (including fade
margin) is within design margins, assuming the input/output
specifications of 3rd party RF components are met.
- - Bit Error Rate. Each downstream channel and each upstream channel,
testing will be performed to ensure system BER (with FEC) is within
design margins.
3.0 FINAL ACCEPTANCE TEST CRITERIA
For each market, Final Acceptance will occur if, all (but not less than all) of
the following are true:
- - Operational requirements set forth in Section 1.0, subsection A above
shall be retested and complied with as part of Final Acceptance
testing.
- - In total, in each market, there are no more than "X" Performance Events
during the relevant "Burn-In Period". For the purposes hereof "X
Performance Events" means (i) 10 E l events in the first 2 markets to
achieve Substantial Completion; (ii) 8 El events in the next 2 markets
to achieve Substantial Completion; iii) 4 E 1 events in any additional
such Systems thereafter to achieve Substantial Completion and (iv) 4 E
1 events in any System for which the applicable Burn In Period has been
reinstated.
For the purposes hereof "Burn-In Period" means: (i) in the first 2 markets to
reach Substantial Completion, 140 days; (ii) in the next 2 markets, the later
of(x) 120 days or (y) Final Acceptance of the first 2 markets to achieve
Substantial Completion, and (iii) in any additional Systems thereafter to reach
Substantial Completion, the later of (x) 60 days or (y) Final Acceptance of the
first 2 markets to achieve Substantial Completion.
- - No continuing El event.
- - No more than 2 E1 event in the last 60 days
If one of the above conditions is not met, then the Burn In Period shall be
reinstated for the greater of (i) the time remaining in the original Burn In
Period or (ii) sixty (60) days.
Outages caused by power failures that are in excess of the duration of the
backup power supply or outages caused by personnel of Sprint not following
maintenance procedures or outages caused by 3 party equipment or outages caused
by acts of nature (i.e., sector antenna struck by lightning or falling off
tower) or outages caused by personnel of Sprint using incorrect installation
practices or personnel of Sprint not following specifications of any Equipment
are not counted as E 1 events for the purpose of Final Acceptance.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
4
<PAGE>
SCHEDULE 1.25
INITIAL AFFILIATES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME ADDRESS TELEPHONE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SPRINT CORPORATION 2330 Shawnee Mission Parkway, Westwood, Kansas 66205 (913) 624-3000
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINT/UNITED MANAGEMENT COMPANY 2330 Shawnee Mission Parkway, Westwood, Kansas 66205 (913) 624-3000
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINT COMMUNICATIONS COMPANY L.P. 8140 Ward Parkway, Kansas City, Missouri 64114'-8417 (816) 276-6000
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone Company of Kansas 2330 Shawnee Mission Parkway, Westwood, Kansas 66205 (913) 624-3000
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINT GLOBAL VENTURE, INC. 12490 Sunrise Valley Drive, Reston, Virginia 22096 (703) 689-6000
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint International of Canada, Inc. 12490 Sunrise Valley Drive, Reston, Virginia 22096 (703) 689-6000
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint International Mexico S.A. de C.V. 12490 Sunrise Valley Drive, Reston, Virginia 22096 (703) 689-6000
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINT MID-ATLANTIC TELECOM, INC. 14111 Capital Blvd., Wake Forest, North Carolina 27587-5900 (919) 554-7900
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint/Carolina Telephone 720 Western Blvd., Tarboro, North Carolina 27886 (919) 641-3768
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint/Centel -North Carolina 320 First Avenue N.W., Hickory, North Carolina 28601-6123 (704) 328-0222
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint/Centel - Virginia 2211 Hydraulic Rd., P.O. Box 6788, Charlottesville, VA 22906 (804) 971-2144
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint/United Telephone - Southeast 112 Sixth Street, Bristol, Tennessee 37620 (615) 968-812
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINT NORTH SUPPLY 600 New Century Parkway, New Century, Kansas 66031 (913) 791-700
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINT PARANET, INC. 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINT PUBLISHING & ADVERTISING 6666 West 110th, Overland Park, Kansas 66211 (913) 491-7000
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINT SPECTRUM HOLDING COMPANY L.P. 4717 Grand Avenue, Kansas city, MO 64112 (816) 559-1000
- ------------------------------------------------------------------------------------------------------------------------------------
American PCS, L.P. 4717 Grand Avenue, Kansas City, MO 64112 (816) 559-1000
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint Spectrum L.P. 4717 Grand Avenue, Kansas City, MO 64112 (816) 559-1000
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint Spectrum Equipment Company, L.P. 4717 Grand Avenue, Kansas City, MO 64112 (816) 559-100
- ------------------------------------------------------------------------------------------------------------------------------------
Phillie Co., L.P. 4717 Grand Avenue, Kansas City, MO 64112 (816) 559-1000
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINTCOM, INC. 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINTCOM EQUIPMENT COMPANY LP. 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINT eBUSINESS, INC. 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN TELECASTING INC. 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
CALL-NET ENTERPRISES, INC. 2550 Victoria Park Avenue, North York, Ontario M2JSA9
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint Canada Inc. 2550 Victoria Park Avenue, North York, Ontario M2JSA9
- ------------------------------------------------------------------------------------------------------------------------------------
CENTRAL TELEPHONE COMPANY 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
Central Telephone - Illinois 8725 Higgins Road, Chicago, Illinois 60631 (312) 399-2500
- ------------------------------------------------------------------------------------------------------------------------------------
Central Telephone - Nevada 330 S. Valley View, Las Vegas, Nevada 89152 (800) 877-7077
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint Florida, Incorporated 555 Lake Border Drive, Apopka, Florida 32703 (407) 889-6000
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone Communications Systems, 555 Lake Border Drive, Apopka, Florida 32703 (407) 889-6000
- ------------------------------------------------------------------------------------------------------------------------------------
Incorporated
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone Long Distance, Inc. 555 Lake Border Drive, Apopka, Florida 32703 (407) 889-6000
- ------------------------------------------------------------------------------------------------------------------------------------
The Winter Park Telephone Company 555 Lake Border Drive, Apopka, Florida 32703 (407) 889-6000
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
EARTHLINK NETWORK, INC. 2330 Shawnee Mission, Westwood, Kansas 66205 (913) 624-3000
- ------------------------------------------------------------------------------------------------------------------------------------
HYBRID NETWORKS, INC. 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
PEOPLE'S CHOICE TV CORPORATION 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
TELMEX/SPRINT COMMUNICATIONS, L.L.C. 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
TDI ACQUISITION CORPORATION 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED TELEPHONE COMPANY OF KANSAS 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint/United Midwest Management Services Company 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED TELEPHONE COMPANY OF EASTERN KANSAS 2330 Shawnee Mission Parkway, Westwood, KS 66205 (816) 624-6000
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED TELEPHONE COMPANY OF FLORIDA 555 Lake Border Drive, Apopka, Florida 32703 (407) 889-6090
- ------------------------------------------------------------------------------------------------------------------------------------
Vista-United Telecommunications 555 Lake Border Drive, Apopka, Florida 32703 (407) 889-6000
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED TELEPHONE - MID ATLANTIC 1201 Walnut Bottom Road, Carlisle, Pennsylvania 17013-0905 (7i7) 245-6312
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - New Jersey 1201 Walnut Bottom Road, Carlisle, Pennsylvania 17013-0905 (7i7) 245-6312
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - Pennsylvania 1201 Walnut Bottom Road, Carlisle, Pennsylvania 17013-0905 (717) 245-6312
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED TELEPHONE WESTERN 5454 West 110th, Overland Park, Kansas 6621 i (913) 345-7600
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - Kansas 123 North Eisenhower, Junction City, Kansas 66441 (913) 762-3232
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - So. Central Kansas 5454 West 100n Street, Overland Park, Kansas 66211 (913) 345-6000
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - Minnesota 105 Peavey Road, Chaska, Minnesota 55318 (612) 448-8200
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - Missouri (East) 319 Madison Street, P.O. Box 689, Jefferson City, Missouri 65102(314) 634-0555
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - Missouri (West) 210 East Market, P.O. Box 87, Warrensburg, Missouri 64093 (816) 429-7119
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - Nebraska 2806 Avenue D, Scottsbluff, Nebraska 69361 (308) 635-8201
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - Oregon 902 Wasco Street, Hood River, Oregon 97031
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - Texas 1005 Congress Avenue, Suite 400, Austin, Texas 78701 (512) 472-1597
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED TELEPHONE - NORTH CENTRAL 665 Lexington Avenue, Mansfield, Ohio 44907 (419) 755-8011
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - Indiana P.O. Box 391 2000 W. William Avenue, Warsaw, Indiana 46580 (219) 267-6161
- ------------------------------------------------------------------------------------------------------------------------------------
United Telephone - Ohio P.O. Box 3555, 839 W. Lonsview Road, Mansfield, Ohio 44907 (419) 755-8011
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SPRINT PROPRIETARY INFORMATION - RESTRICTED
2
<PAGE>
SCHEDULE 3.1
MANUFACTURING CAPACITY AND LEAD-TIME
SYSTEM COMPONENTS
<TABLE>
<CAPTION>
- ------------------------ --------------------------------------------------------- ----------------------------
Part Number Description Maximum
Production per
Month
<S> <C> <C>
- ------------------------ --------------------------------------------------------- ----------------------------
CMG-2000-SP CyberMngr 2000 w\HybridWare 20
+ SW License for 20,000. Subs.
- ------------------------ --------------------------------------------------------- ----------------------------
CMG-2000-SPB CyberMngr 2000 w\HybridWare 20
+ SW License for 20,000 Subs.
- ------------------------ --------------------------------------------------------- ----------------------------
CMD-2000B CM Downstream Router + SW for 20,000 20
- ------------------------ --------------------------------------------------------- ----------------------------
SQC-200-3 SIF (QAM) Card, 3-channel (each 10 Mbps) 20
- ------------------------ --------------------------------------------------------- ----------------------------
QMC-200-3 64 QAM Modulator Card 20
w/Combiner, 3 channel
- ------------------------ --------------------------------------------------------- ----------------------------
QMC-200-3FC 64 QAM Modulator Card 20
w/Combiner and filter, 3 channel
- ------------------------ --------------------------------------------------------- ----------------------------
HEM-2204-B Encoder Baseband (64 QAM) 20
- ------------------------ --------------------------------------------------------- ----------------------------
HEM-2204-I Modulator-IF (64 QAM) 20
- ------------------------ --------------------------------------------------------- ----------------------------
CMU-2000-14CB CM Upstream Router with HybridWare 20 w/two QPSK
Demodulator Receiver Cards.
- ------------------------ --------------------------------------------------------- ----------------------------
QDC-030-2 QDC-030-2 QPSK Demodulator Cards. 250
2 ports per card
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
COMMERCIAL PoP EQUIPMENT
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
DKT-30 Monitor and Keyboard 50
(both rackmount for CMD and CMU)
- ------------------------ --------------------------------------------------------- ----------------------------
- ------------------------ --------------------------------------------------------- ----------------------------
SPARE PARTS
- ------------------------ --------------------------------------------------------- ----------------------------
LAC-010 10/100 Baser LAN Interface Card 50
- ------------------------ --------------------------------------------------------- ----------------------------
QDM-030-2 Master QPSK Demoulator Receiver Card. 20
- ------------------------ --------------------------------------------------------- ----------------------------
SUG-2000 Cybermanager Hard Drive with factory S/W 80
- ------------------------ --------------------------------------------------------- ----------------------------
HDD-XX CMD Hard Drive with factory software 80
- ------------------------ --------------------------------------------------------- ----------------------------
HDU-XX CMU Hard Drive with factory software 80
- ------------------------ --------------------------------------------------------- ----------------------------
CMP--400 CMD or CMU Power Supply 50
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
*MAXIMUM PRODUCTION RATE REQUIRES A 180 DAY ROLLING FORECAST.
WIRELESS BROADBAND ROUTERS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Part Number Description Maximum
Production per
Month*
<S> <C> <C>
- ------------------------ --------------------------------------------------------- ----------------------------
WBR-60-231 Wireless Broadband Router 60 User. 10,000
- ------------------------ --------------------------------------------------------- ----------------------------
WBR-60-231B Wireless Broadband Router 60 User 50,000
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
*MAXIMUM PRODUCTION RATE REQUIRES A 180-DAY ROLLING
FORECAST.
MANUFACTURING LEAD TIMES
HEADEND
SYSTEM COMPONENTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Part Number Description Standard Lead
Times
(calendar days)*
- ------------------------ --------------------------------------------------------- ----------------------------
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
CMG-2000-SP CyberMngr 2000 w\HybridWare 60
- ---------------------------------------------------------------------------------------------------------
CMG-2000-SPB + SW License for 20,000 Subs. 60
CyberMngr 2000 w\HybridWare
- ---------------------------------------------------------------------------------------------------------
CMD-2000B + SW License for 20,000 Subs. 60
CM Downstream Router + SW for 20,000
- ---------------------------------------------------------------------------------------------------------
SQC-200-3 SIF (QAM) Card, 3-channel (each l0 Mbps) 90
- ---------------------------------------------------------------------------------------------------------
QMC-200-3 64 QAM Modulator Card w/Combiner,3 channel 120
- ---------------------------------------------------------------------------------------------------------
QMC-200-3FC 64 QAM Modulator Card 120
w/Combiner and filter, 3 channel
- ---------------------------------------------------------------------------------------------------------
HEM-2204-B Encoder Baseband (64 QAM) 90
- ---------------------------------------------------------------------------------------------------------
HEM-2204-I Modulator-IF (64 QAM) 90
- ---------------------------------------------------------------------------------------------------------
CMU-2000-14CB CMU-2000-14CB 120
w/two QPSK Demodulator Receiver Cards.
- ---------------------------------------------------------------------------------------------------------
QDC-030-2 QDC-030-2 QPSK Demodulator Cards. 120
2 ports per card
- ---------------------------------------------------------------------------------------------------------
</TABLE>
COMMERCIAL PoP EQUIPMENT
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
DKT-30 Monitor and Keyboard 45
(both rackmount for CMD and CMU
- ---------------------------------------------------------------------------------------------------------
</TABLE>
SPARE PARTS
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
LAC-0 l0 10/100 BaseT LAN Interface Card 45
- ---------------------------------------------------------------------------------------------------------
QDM-030-2 Master, QPSK Demoulator Receiver Card. 120
SUG-2000 Cybermanager Hard Drive with factory S/W
- ---------------------------------------------------------------------------------------------------------
HDD-XX CMD Hard Drive with factory software 30
- ---------------------------------------------------------------------------------------------------------
HDU-XX CMU Hard Drive with factory software 30
- ---------------------------------------------------------------------------------------------------------
CMP-400 CMD or CMU Power Supply 45
- ---------------------------------------------------------------------------------------------------------
</TABLE>
*THE LEAD-TIME FOR THIS EQUIPMENT IS AS SHOWN PROVIDED HYBRID IS SUPPLIED WITH A
ROLLING 80 DAY FORECAST.
WIRELESS BROADBAND ROUTERS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Part Number Description Standard Lead
Times
(calendar days)*
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
WBR-60-231 Wireless Broadband Router 60 User 90
- ---------------------------------------------------------------------------------------------------------
WBR-60-23 IB Wireless Broadband Router 60 User 90
- ---------------------------------------------------------------------------------------------------------
</TABLE>
*THE LEAD-TIME FOR THIS EQUIPMENT IS AS SHOWN PROVIDED HYBRID IS SUPPLIED WITH A
ROLLING 180 DAY FORECAST.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
3
<PAGE>
SCHEDULE 3.4
SHIPPING PROCEDURES
TRANSPORTATION ROUTING GUIDE
ROUTING: The carriers listed below shall be used for the inbound and outbound
movement of materials to, from, and between Sprint locations and suppliers.
BILLING: All freight charges which are directly, or indirectly, the
responsibility of Sprint should be billed third party to Sprint Accounts
Payable, P.O. Box 5409, Kansas City, MO 64131. Purchase of insurance coverage
from transportation carriers is NOT authorized.
DOCUMENTATION: All shipping documents should reference Purchase Order, Work
Order, or Cost Center number. International paperwork should be verified by
Sprint's Transportation Department prior to shipment.
COMPLIANCE: Failure to comply with Sprint's Transportation Routing Guide
instructions will result in excess freight chargebacks to your company.
Shipments routed by means other than the guidelines within will be charged back
to the supplier unless previously agreed to by both Parties.
SPRINT TRANSPORTATION: Please refer any questions to Sprint's Transportation
Department to the following Transportation Specialist:
Tom Conrow, Domestic Ground & Air Shipments 913/791-7394
Zoe Morgan, International Shipments 913/791-7395
Ginger Farrell, International Shipments 703/904-2784
Small package surface shipments should be routed via United Parcel Service or
Roadway Package System. These would be shipments weighing under 150 pounds in
total weight and meeting carrier size and weight restrictions as follows:
- - 150 pounds maximum weight per package
- - 130 inches combined length and girth
- - 108 inches maximum length
The freight charges should be billed to Sprint using our UPS third party
account/shipper number - 35E 2E4. Contact Sprint Transportation Services for
more information regarding third party billing.
Surface shipments weighing over 150 pounds should be routed with the appropriate
LTL carrier as shown on page 2 of the Routing Guide.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
TRANSPORTATION ROUTING GUIDE
LTL SURFACE ROUTING OVER 150 LBS. TOTAL
(INCLUDING TO AND FROM CANADA - REGION MAP BELOW)
Shipments above 10,000 lbs. require authorization by Sprint's
Transportation Department prior to shipment
NATIONWIDE LONG HAUL LTL CARRIERS: Consolidated Freightways, Yellow Freight
System
REGIONAL SHORT HAUL LTL CARRIERS:
<TABLE>
<CAPTION>
NORTHWEST MIDWEST NORTHEAST
<S> <C> <C>
Con-way Western American Freightways Howard Express
Con-Way Central USF Red Star
WEST SOUTHWEST SOUTHEAST
American Freightways AAA Cooper
Con-Way Western Con-Way Southern Express Southeastern Freightways
Con-Way Southern Express
</TABLE>
Regional LTL (Less-than-truckload) shipments are defined as short haul
interstate LTL movements, normally under 500 miles which occur either within a
region, or between a region and the bordering states of a neighboring region or
bordering Canadian Provinces.
DEFINED REGIONS FOR LTL FREIGHT
[MAP]
ELECTRONIC (PADDED) VAN SHIPMENTS
BEKINS VAN LINES (ALL POINTS) 816/763-6300 800/767- 1120
NORTH AMERICAN VAN LINES (BELTMANN) 913/888-9105 800/869-6114
UNITED VAN LINES (FRY-WAGNER) 913/541-0020 800/829-0049
DOMESTIC AIR EXPRESS AND AIR FREIGHT ROUTING
(SEE GEOGRAPHIC ROUTING EXCEPTION FOR CANADA, ALASKA, HAWAII, PUERTO RICO AND
INTERNATIONAL SHIPMENTS)
Shipments above 1,000 lbs. require authorization by Sprint Transportation prior
to shipment
SPRINT PROPRIETARY INFORMATION - RESTRICTED
2
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
WEIGHT SAME DAY NEXT DAY 2ND DAY 3-5 DAYS INTERNATIONAL
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
QUICK
COURIER
| AIRBORNE EXPRESS*
LTR - 50 | FEDERAL EXPRESS UPS GROUND
| RPS GROUND AIRBORNE EXPRESS
----------------------
V
- ------------------ ---------------------------------
EMERY EMERY DHL WORLDWIDE*
51 - 70 WORLDWIDE WORLDWIDE
- ------------------ -------------- ------------------------------------------
CALL TRANSPORTATION
BAX GLOBAL FOR INTERNATIONAL
71 + BAX GLOBAL PILOT AIR FREIGHT ROUTING GUIDE
AND INSTRUCTIONS
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Air routing is only authorized when expedited service is requested by Corporate
Procurement to meet specific delivery requirements. Packages shipped via air,
without authorization from Corporate Procurement, by the supplier will result in
a 50% chargeback, to that supplier, of the total transportation cost.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
GEOGRAPHIC EXCEPTIONS (AIR & SURFACE)
(INBOUND AND OUTBOUND)
- ---------------------------------------------------------------------------------------------------------------------
WEIGHT CANADA CANADA ALASKA & PUERTO
(Air) (Surface) HAWAII RICO
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LETTER AIRBORNE
DHL WORLDWIDE AIRBORNE EXPRESS*
- FEDERAL UPS GROUND FEDERAL EXPRESS
70 EXPRESS
- ---------------------------------------------------------------------------------------------------------------------
EMERY CONSOLIDATED
71+ WORLDWIDE FREIGHTWAYS BAX GLOBAL BAX GLOBAL
BAX GLOBAL YELLOW FREIGHT SYSTEM
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
CONTACT INFORMATION
<TABLE>
<CAPTION>
CARRIER CUSTOMER SERVICE CONTACT
<S> <C>
Airborne Express* 800/24%2676
Bekins Van Lines 800/767-1120 or 816/763-6300, Customer Service
BAX Global (formerly Burlington) Contact local station
DHL Worldwide Express* 800/345-3601 -Natalie Lechuga
Emery Worldwide 800/443-6379
Federal Express 800/238-5355
LTL Carriers Contact local terminal - customer service/dispatch
North American Van Lines 800/869-6114 or 913/888-9105, Deanna Cox
Pilot Air Freight 800/447-.4568 or local station
Quick International Courier 800/4884400, extension 475
Sprint Transportation Dept. 913/791-7394 - Tom Conrow (Domestic Air & Ground)
913/791-7395 - Zoe Morgan (International)
913/791-2182 - Department Fax Number for Tom and Zoe
United Van Lines 800/829-0049 - Fry-Wagner - Mike Wagner
- ---------------------------------------------------------------------------------------------
</TABLE>
*PREFERRED CARRIER FOR SPECIFIC SERVICE REQUIREMENT
SPRINT PROPRIETARY INFORMATION - RESTRICTED
3
<PAGE>
SCHEDULE 4.1
RAW MATERIAL LEAD TIMES
MODEM (WBR-60-23 1B)
TUNER 18 WEEKS $12
LIBIT 20 WEEKS $23
SAW FILTER 12 WEEKS $3
TANTALUM CAPS 26 WEEKS $5
RF INDUCTORS 12 WEEKS $1
LEDS 12 WEEKS $1
TRANSISTERS 12 WEEKS $1
TRANSFORMERS 14 WEEKS $3
MAXIM TRANSMITTER 12 WEEKS $6
MAXIM RS232 16 WEEKS $2
DRAM 12 WEEKS $8
HITACHI PROCESSOR 12 WEEKS $12
TRANSCEIVER 12 WEEKS $6
VIDEO AMP 12 WEEKS $1
SONIC T 16 WEEKS $29
ENCLOSURE 16 WEEKS $6
POWER SUPPLY 12 WEEKS $5
$124
CMU (CMU-2000-14CB)
CABLES 12 WEEKS $80
STEL CARDS 16 WEEKS $1990
ALTERA FPGA 16 WEEKS $600
CPU CARD 26 WEEKS $900
$3570
QPSK DEMODULATOR CARDS (QDC-030-2)
CABLES 12 WEEKS $40
STEL CARDS 16 WEEKS $995
ALTERA FPGA 16 WEEKS $600
$1635
CMD (CMD-2000B)
CPU CARD 26 WEEKS $900
$900
64 QAM MODULATOR (QMC-200-3)
CABLES 12 WEEKS $120
CRYSTALS 26 WEEKS $50
BROADCOM 12 WEEKS $220
ALTERA FPGA 12 WEEKS $30
XILINX FPGA 12 WEEKS $327
DIGITAL CONVERTER 26 WEEKS $210
$957
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
SCHEDULE 8.3
EXCLUSIVITY FEATURES
- NONE -
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
SCHEDULE 11.0
SCOPE CHANGE FORM
Date:
------------
REFERENCE:
1. Title of Scope Change
2. Date of Scope Change
3. Originator of Scope Change
4. Reason for the Scope Change
5. Details of the Scope Change
6. Type of Scope Change [CHECK ONE]
[] Clarify Specifications [] Misinterpreted Specifications
[] Add Specifications [] Remove Specifications
[] Change Approach [] Process Changes
[] Architecture Changes [] Other
7. The impact, if any, of the Scope Change on other aspects of the project such
as:
a) Specifications
b) Budget
c) Milestone Schedule
8. Other Comments
Purchase of Equipment and Services Agreement between Sprint/United Management
Company and Hybrid Networks, Inc.
This Scope Change Form is hereby approved, and incorporated into the Purchase of
Equipment and Services Agreement between Sprint/United Management Company and
Hybid Networks, Inc.
HYBRID NETWORKS, INC. SPRINT/UNITED MANAGEMENTCOMPANY
By: By:
------------------------- ----------------------------
Name: Name:
----------------------- ----------------------------
Title: Title:
---------------------- ----------------------------
Date: Date:
----------------------- ----------------------------
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
SCHEDULE 15.2.1
SOLE SOURCE SUPPLIERS
<TABLE>
<CAPTION>
VENDOR HYBRID PART NO. HYBRID PART DESCRIPTION WHERE USED
<S> <C> <C> <C>
INTEL 003-000023-01 S/ASY QPSK STEL CARD W/RF CONNECTOR QDC-030-2
ICS 095-00062-01 S/ASY ICS 6PC1/111SA 400W RNDNT P/S CMD CMD-2000B
ICS 095-00063-01 S/ASY ICS 2PCI/151SA 400W RNDNT P/S CMU-2000-14CB
BROADCOM 110-O3023-01 IC BCM3023 QFP-52 QAM MOD QMC-030-2
XILINX 110-04013-01 IC XC4013E-4 PQFP-240 QMC-030-3
TI 110-04030-01 IC LBT4030 64/256-QAM DEMOD&QPSK/16 QAM WBR-60-231B
SUN 095-00001-03 CYBERMANAGER 2000 + SW FOR 20,000 SUBS CMG-2000-SP
NATIONAL 110-83936-01 IC DP83936 PQFPI60 33MHZ SONIC W/TP WBR-60-231B
SIEMANS 337-00017-01 FILTER SAW X6940 2MHZ/BW SMD/SIP5K PKG WBR-60-231B
ALTERA 110-01030-01 EPFIOF30EQC208-3 RQFP-208 WBR-60-231B
HITACHI 110-O7708-01 IC HD7708 PQFPI44 60MHZ 3V CPU WBR-60-231B
</TABLE>
SPRINT PROPRIETARY INFORMATION - RESTRICTED
2
<PAGE>
SCHEDULE 15.2.1
FORM OF SUPPLIER'S CONSENT
[SUPPLIER'S LETTERHEAD]
Sprint/United Management Company
[ADDRESS TO COME]
[Date]
Ladies and Gentlemen:
We understand that Sprint/United Management Company (together with its
affiliates, "Sprint") is a party to an equipment purchase agreement (the
"Purchase Agreement") with Hybrid Networks, Inc. ("Hybrid"). The Purchase
Agreement provides that in the event Hybrid is unable to satisfy its material
obligations to Sprint, Sprint is entitled to obtain the technology and
manufacturing capabilities of Hybrid for purposes of continuing to manufacture,
maintain and sell equipment previously manufactured and maintained by Hybrid.
As a key supplier of Hybrid, Sprint has our assurances that in the event Sprint
exercises its manufacturing and maintenance rights under the Purchase Agreement,
we will continue to act as a supplier to Sprint in substantially the same manner
as we have previously served Hybrid.
Very Truly Yours
[Supplier Name]
By:
----------------------------
Its:
----------------------------
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
SCHEDULE 20.3
ARBITRATION PROCEDURES
(i) All arbitration proceedings will be held in Denver, Colorado.
(ii) The choice of law provisions of this Agreement apply.
(iii) The arbitration will be governed by JAMS/Endispute comprehensive
Arbitration Rules in existence on the commencement date of the
arbitration ("Rules"), except that in the event of an inconsistency
between the Rules and this Schedule 20.3 the terms of this Schedule
20.3 will control.
(iv) The parties will select one arbitrator that will be either a retired
judge or a lawyer with at least 5 years experience as an arbitrator.
(v) In the event the parties are unable to agree upon an arbitrator within
10 days of the date of the notice delivered under Section 20.3 then
each party will have 5 additional days to select their own arbitrator
meeting the qualifications of paragraph (iv) above. Such arbitrators
will then within 5 days of their appointment select a sole arbitrator
to govern the arbitration proceedings.
(vi) All discovery will be completed within 75 days after the appointment of
the arbitrator. Each party may submit no more than 10 interrogatories,
20 requests for production of documents and take no more than 4
depositions lasting not more than 4 hours each.
(vii) All responses to discovery requests are due within 20 days of the
request.
(viii) All discovery disputes will be resolved by the arbitrator within 10
days of notice of the discovery dispute. (ix) There will be a hearing
on the issue being arbitrated within 14 days of the completion of
discovery. (x) Each side will have one 8-hour day to present its case.
Each side will be allotted one-half day of summary arguments following
the presentation of each side's case. (xi) The arbitrator will make its
decision in writing within 3 days of the conclusion of the case. (xii)
Each party will bear its own costs and expenses and an equal share of
the arbitrators' and administrative fees of the arbitration.
(xiii) The arbitrator has the power to award sanctions for delay in or
obstruction of the arbitration proceeding or for raising of frivolous
claims or defenses.
(xiv) All notices must be hand delivered or delivered by overnight mail.
(xv) The arbitrator shall have the power, upon good cause shown and with due
regard for the parties' expressed desire to expedite the proceedings,
to extend or continue the deadlines set forth in paragraphs (vi)
through (xi) above.
(xvi) The failure of the either of the parties or of the arbitrator to meet
the deadlines set forth in paragraphs (vi) through (xi) shall not
divest the arbitrator of the jurisdiction to act further in respect of
the arbitration.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
SCHEDULE 26.2
RETURN/REPAIR WARRANTY, PROCEDURES
I. EQUIPMENT RETURNS OR RMA (RETURNED MATERIAL AUTHORIZATION)
A. General Guidelines for RMA
Sprint will contact Supplier for a Return Material Authorization (RMA) number
prior to returning Equipment for any reason. The telephone number to obtain an
RMA number and the address to ship defective Equipment is as follows:
Hybrid Networks, Inc.
6409 Guadalupe Mines Road San Jose, CA 95120-5000
(Tel.) 800-516-9316
(Tel.) 408-323-6299
If Sprint returns Equipment without identifying the RMA number on the outside of
the shipping container, Supplier may refuse the shipment and return the
Equipment to Sprint. Except as described in Section IV below, Sprint is
responsible for removal and reinstallation of Equipment, as well as shipping
charges to return Equipment to Supplier at the address designated above.
Supplier will return, at its cost, Equipment to Sprint via UPS ground or an
equivalent method. Additional costs associated with requests by Sprint for
expedited delivery will be charged to Sprint. Out of Box Failures will be return
shipped by overnight mail at no cost to Sprint.
B. Out of Box Failures
Equipment which fails within the first 90 days of installation ("Out of
Box Failures"), will be replaced as follows: If Supplier receives notice
of an Equipment failure prior to 12:00 p.m. P.S.T., Supplier will ship
replacement Equipment on the same business day by the fastest suitable
method for shipping the Equipment. If Supplier receives notice of an
Equipment failure after 12:00 P.S.T., Supplier will ship replacement
Equipment within the following business day by the fastest suitable method
for shipping the Equipment. Notice of Equipment failure shall be provided
by telephone to the number set forth in Section I.A and via a confirmatory
fax transmitted to (408)3236470. The advance replacement procedures
described in Section III below will be followed.
C. In-Warranty Repair
Supplier will use its best efforts to repair or replace defective Equipment
other than Out of the Box Failures within 15 business days. The 15-day
Equipment repair turnaround commitment is measured from the date the
defective Equipment arrives at Supplier's repair facility to the date the
repaired Equipment is reshipped to Sprint.
II. OUT OF WARRANTY REPAIR
A. Headend
Out of warranty repairs for headend equipment will be provided on a time and
material basis at the rates in the Pricing Letter. Sprint will obtain an RMA to
return the Equipment to Supplier. Supplier will diagnose the returned Equipment
and provide a quotation for repair. Supplier will repair Equipment after
receiving a purchase order from Sprint. Supplier will use its best efforts to
repair Equipment within 15 business days from the date the defective Equipment
arrives at Supplier's repair facility to the date the repaired Equipment is
reshipped to Sprint. Equipment will be labeled after repair to indicate a new
warranty period of one year from the reshipment date.
B. Wireless Broadband Routers
Out of warranty repairs for wireless broadband routers are done on a flat fee
basis. Sprint will obtain an RMA to return such Equipment to Supplier. Supplier
will repair the Equipment after receiving a purchase order from
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
Sprint and reship the Equipment to Sprint. Equipment will be labeled after
repair to indicate a new warranty period of one year from the reshipment date.
Ordering Information: Equipment Repair is ordered on a per unit basis.
<TABLE>
<CAPTION>
- --------------------------- --------------------------------------- ----------------------- -----------------
Product Code Description Requirements Price
<S> <C> <C> <C>
- --------------------------- --------------------------------------- ----------------------- -----------------
EWR-365-01 Repair and one year warranty Each Unit $75
- --------------------------- --------------------------------------- ----------------------- -----------------
</TABLE>
III. ADVANCE REPLACEMENT
Supplier will ship replacement Equipment to Sprint immediately upon Sprint's
request if Sprint has issued a purchase order to cover Equipment being replaced.
After replacement, the failed Equipment is to be shipped back to Supplier. An
invoice will be generated at the time of shipment of the replacement Equipment.
The invoice will be credited when the failed Equipment is received complete by
Supplier. The invoice will be sent to Sprint if the defective Equipment is not
returned complete within 60 days of invoice generation.
IV. ANNUALIZED FIELD FAILURE RATES
Sprint will be responsible for the cost of removing/reinstalling Equipment,
except to the extent the Annualized Field Failure Rate ("AFFR") exceeds the
thresholds set forth in the table below. Supplier will reimburse Sprint for
Equipment removal/reinstallation costs associated with Defects to the extent the
AFFR exceeds the thresholds set forth in the table below. In no event will
Supplier be charged more than $60 for any removal/reinstallation cycle. The AFFR
will be calculated separately for each category of Equipment.
(i) The AFFR threshold for Base Station Equipment where the cumulative
shipments for that Equipment type exceed 500 is:
<TABLE>
<CAPTION>
3-MONTH PERIOD(S) FOLLOWING EFFECTIVE DATE ANNUALIZED FIELD FAILURE RATE THRESHOLD
<S> <C>
1st Less than and equal to 3%
2nd Less than and equal to 2%
3rd and each one-month period thereafter Less than and equal to 1%
</TABLE>
(ii) The AFFR threshold for Base Station Equipment where cumulative
shipments are less than 500 is:
UNITS SHIPPED AFFR THRESHOLD
I to 100 units 2 units
100 to 300 units 4 units
300 to 500 units 6 units
(iii) The AFFR threshold for CPE Equipment is as follows:
UNITS SHIPPED AFFR THRESHOLD
I to 500 units 20 units
501 to 1000 units 40 units
1001 units 5%
The Annualized Field Failure Rate will be first calculated at the end of the
first full month following the Effective Date and each month thereafter
throughout the term of the Agreement.
The Annualized Field Failure Rate is the number, expressed as a percentage,
obtained by multiplying:
(a) the quotient of:
DEFECTIVE EQUIPMENT UNDER WARRANTY RETURNED BY SPRINT DURING THE MONTH BEING
MEASURED
- --------------------------------------------------------------------------------
Average Equipment under Warranty
(b) by the number 12.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
2
<PAGE>
"Average Equipment Under Warranty" means (i) the sum of the number of units of
Equipment in service and under warranty on the first and last days of the month
being measured divided by (ii) the number 2.
V. TESTING
Supplier will provide Sprint with software for use by each CPE Equipment
installation/repair technician that will enable such technician to test each
unit of CPE Equipment to see that it is operating properly. Sprint will test
each unit using such software and any reasonable testing procedures provided by
Supplier prior to returning it to Supplier for repair or replacement. At
Supplier's request, Sprint will certify compliance with this paragraph. In the
event Sprint fails to comply with this paragraph and the unit is returned and
confirmed not to be defective, Sprint will pay Supplier $60 for the cost of
testing such unit.
VI. REPORTING
Supplier will provide monthly, quarterly and annual reports identifying the
number, type and cause of Defects occurring during the period covered by the
report. Supplier will provide to Sprint by the end of each month a report
calculating the Annualized Field Failure Rate for the prior month.
VII. DOA
DOA GOALS
1 to 100 units less than 2 failures
100 to 300 units less than 3 failures
301 to 500 units less than 5 failures
For Equipment where the shipment is greater than 500 units the DOA shall be less
than 1%.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
3
<PAGE>
SCHEDULE 38.1
SYSTEM SUPPORT SERVICES
1. SUPPLIER ASSISTANCE.
(a) Upon receipt of a request for technical assistance from
Sprint, the nature of the problem will be identified by Sprint, and a priority
assigned by Sprint (upon discussion with Supplier which in no event will require
the agreement and/or consent of Supplier).
(b) Following attempted corrective actions by Sprint in accordance
with applicable operating and maintenance manuals provided by Supplier, when
Supplier is notified by Sprint that the System or any part thereof fails to
operate in accordance with the Specifications, Supplier will promptly commence
and diligently pursue all reasonable efforts to correct the Defect.
(c) Supplier's correction of Defects in the System may take the
form of new software codes, new or supplementary operating instructions or
procedures, modifications of the software codes in Sprint's possession, or any
other commonly used method for correcting software Defects, as Sprint and
Supplier deem appropriate.
(d) When appropriate, Supplier will provide non-emergency
technical support to Sprint via telephone, facsimile transmission, modem, or
other acceptable means during Sprint's normal business hours.
(e) Supplier will provide emergency technical assistance to Sprint
via a telephone number designated to Sprint in advance by Supplier, 24 hours per
day, 365 days per year.
(f) Supplier will provide remote intervention and assistance
capability to Sprint for remotely accessing operating Systems. Upon mutual
agreement between the Parties, Supplier may remotely access operating Systems
for the purpose of technical assistance.
2. TROUBLE REPORTS.
From time to time, failures in or degradation of Equipment may cause
services provided by the System to be adversely affected. It is necessary that
immediate assistance be provided by Supplier to allow Sprint to restore the
affected service. Critical service outages which cannot be resolved by Sprint's
field technicians or technical support engineers using procedures described in
Supplier's operating maintenance manuals will be transmitted to Supplier as a
trouble report ("TR"). Supplier will assign an identifying number to each TR to
aid in tracking its disposition. TRs will be immediately addressed by Supplier
through emergency technical assistance. TRs may not be considered concluded
until the solution is concurred upon by a Sprint employee within Sprint's
network operations center ("NOC"). Supplier is authorized by Sprint to install
and integrate, at Supplier's expense, any software upgrade or software
enhancement pursuant to mutual agreements reached between the parties.
3. EMERGENCY TECHNICAL ASSISTANCE.
(a) When a problem is encountered that adversely affects service
and/or performance with respect to a System, a Sprint maintenance technician
will attempt to repair or replace any malfunctioning Equipment adversely
affecting such service and/or performance using the procedures recommended in
the operating and maintenance manuals. If unsuccessful, a Sprint technical
representative will consult Supplier's designated ETA group at the telephone
number provided by Supplier in subsection 4(c) below. Following receipt of
notification by the ETA group, the ETA group will utilize all available
technical resources and will ensure that a qualified technical engineer is
communicating with Sprint's personnel regarding the problem within t 5 minutes
of any such notification.
(b) A problem adversely affecting service that has a severity
level defined below either as an "El Emergency Condition" or an "E2 Emergency
Condition" is to be addressed under the ETA procedures set forth below in this
subsection 4 and in subsection 5.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
<PAGE>
(i) An E 1 Emergency Condition means a problem resulting
from any one or more of the following events:
- An event including loss of origination and
termination capability in all terminations in a
sector for a period longer than 30 seconds.
- Any System-initiated or unplanned manual restart
(warm, cold, reload, or image) which causes a System
loss of data forwarding capacity of a sector for more
than 30 seconds. Manual restarts with 24-hour notice
would be planned.
- Usable subscriber and network performance statistics
not being collected.
- Ten percent (10%) or more of the total data
forwarding capacity of a sector are out-of-service,
where the disrupted traffic demand exceeds the
alternate routing capability.
- Total loss of access to a specific service, total
loss of access to one or more specific services
because of a fault condition in the System and
related Equipment (not to include
non-System-impacting failure of individual CPE).
- Any single unit of Equipment having a hard failure in
excess of 30 minutes, whether or not it recovers from
such failure (not to include non-System-impacting
failure of individual CPE).
- Any memory leakage, buffer utilization congestion or
configuration parameter loss (not to include
non-System-impacting failure of individual CPE).
- (i) the loss of 10% or more of the capacity of any
sector for a period in excess of 10 seconds, (ii)
more than 10% of the users experience a BER of less
than 10-6 for more than 10 seconds, (iii) more than
10% of users experience latency in excess of design
parameters for a period of more than I0 seconds, or
(iv) the ratio of signal to interference + noise
falls below design parameters for a period of more
than 10 seconds affecting more than 10% of users in a
sector.
- Any outage, other than non-System-impacting failure
of individual CPE.
Supplier must allocate sufficient ETA that could reasonably be
expected to clear all E1 Emergency Conditions within 12 hours of
notification of their occurrence. Work must continue without any
cessation until the defect causing the E 1 Emergency Condition is
solved or the severity thereof is reduced to a "PI Major
Condition", as defined below, or less.
(ii) An E2 Emergency Condition means a problem resulting
from any one or more of the following events:
- Loss of the redundant functionality for any Equipment
that is duplicated.
- Loss of the master clock.
- 50% or more of the equipped tape or disk drive units
out-of-service.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
2
<PAGE>
- Inability to dump or initialize an element image.
- Inability to perform critical maintenance procedures.
Supplier must allocate sufficient ETA that could reasonably be
expected to clear all E2 Emergency Conditions within 24 hours of
notification of such E2 Emergency Conditions. Work must continue
without any cessation until the Defect causing the E2 Emergency
Condition is solved or the severity is reduced to a P 1 Major
Condition or less.
(c) In the event that an E 1 Emergency Condition or an E2
Emergency Condition should remain unresolved following referral to Supplier by
Sprint, the problem causing such condition must be reported to the levels of
management set forth below (with comparable titles, if different) to ensure all
available resources necessary to address the problem will be committed in
accordance with the following:
The following are the reporting levels if an E 1 Emergency Condition or
an E2 Emergency Condition is not resolved within the time periods set forth
below as amended from time to time following referral thereof to Supplier by
Sprint:
<TABLE>
<CAPTION>
SUPPLIER CONTACT SUPPLIER CONTACT NAME TELEPHONE NUMBER
<S> <C> <C>
One hour Operations Engineering Mgr. [to be designated] [to be designated]
Two hours-- BWG NOC Ron Fordon (214) 684-2999
Three hours -- BWG AVP John Montross (913) 315-9340
Four hours -- Vice President Jim Harman (913) 315-9423
</TABLE>
(d) If Sprint reasonably determines that Supplier has not provided
sufficient ETA to resolve any E1 Emergency Condition or E2 Emergency Condition
on a timely basis, Sprint will be entitled to withhold all payments with respect
to the affected System then due or outstanding prior to the date of such
determination until such time as adequate ETA is provided to Sprint to resolve
such Emergency Condition.
(e) If an E 1 Emergency Condition or an E2 Emergency Condition
exists in a System prior to Final Acceptance of such System, Supplier must
deliver to Sprint each Software upgrade and each Equipment upgrade developed by
or on behalf of Supplier to resolve any E 1 Emergency Condition or E2 Emergency
Condition promptly following completion of development of such Software upgrades
or promptly following availability of such Equipment upgrades.
(f) The term Non-Emergency Services includes providing to Sprint
any requested technical assistance and support for the purpose of resolving
non-emergency problems as defined below, remote monitoring and outage review
consultation and the handling of CSRs.
(g) Technical assistance and support must be provided for the
purpose of resolving non-emergency problems defined below as "P 1 Major
Condition", "P2 Significant Problem" and "P3 Minor Problem" which are reported
to Supplier.
(i) P1 Major Condition means any non-emergency failure of
specific features or functions of any Equipment that restricts its
operations, but does not render the Equipment inoperable, impact
traffic capacity or coverage or require significant manual intervention
for the Equipment to operate properly and in accordance with its
Specifications. These events will include loss of diagnostic
capabilities and/or loss of reporting functions. Work must continue
without cessation during Supplier's normal business hours until the
Defect causing the P 1 Major Condition is corrected.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
3
<PAGE>
(ii) P2 Significant Problem means any non-emergency
intermittently occurring problem related to specific primary functions
or features and/or any inoperable secondary functions, which does not
have a significant adverse effect on the overall performance of any
Equipment. By-pass or work around procedures must be used to alleviate
such P2 Significant Problem until it is corrected.
(iii) P3 Minor Problem means any non-emergency problem
that does not affect the performance or functions of any Equipment,
and, despite such problem, the Equipment is fully operable without
restrictions. Such P3 Minor Problems may include documentation
inaccuracies, cosmetics, minor requests for changes or maintenance
requests. Supplier will resolve such P3 Minor Problems during the next
available scheduled Software Upgrade or Equipment Upgrade.
(h) Should a non-emergency problem remain unresolved for the
period or periods of time set forth below following referral to Supplier by
Sprint, such problem must be reported to the levels of management set forth
below to ensure all available resources necessary to correct such problem will
be committed to address such problem pursuant to the following:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
REPORTING LEVELS IF NON-EMERGENCY
IS NOT RESOLVED WITHIN
- ----------------------------------------------------------------------------------------------
CONDITION 1 DAY 2 DAYS 7 DAYS 30 DAYS
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Technical Technical
P1 Assistance Assistance BWG BWG AVP
Major Condition Manager Senior Manager Director
- ----------------------------------------------------------------------------------------------
P2 Technical Technical
Significant Assistance Assistance BWG Director
Condition Manager Senior Manager
- ----------------------------------------------------------------------------------------------
Technical
P3 Assistance BWG Director
Minor Condition Manager
- ----------------------------------------------------------------------------------------------
</TABLE>
Non-emergency problems referred to Supplier as a CSR will be resolved
based upon the priority assigned to them as determined by Sprint, and to the
extent possible will be incorporated into the next scheduled Software Upgrade or
Equipment Upgrade.
4. ETA AND CSR.
In the event that emergency or non-emergency technical support provided
from Supplier's technical support center is not sufficient to resolve an El
Emergency Condition or an E2 Emergency Condition, a P 1 Major Condition or a P2
Significant Problem, Supplier must send a technically qualified person or
persons to the site of such emergency condition or problem to assist Sprint's
employees in solving such condition or problem. Supplier's technically qualified
person or persons must be on-site as soon as practicable after the mutual
determination that the support provided by Supplier's technical assistance
center is not sufficient to resolve the condition, but in no event more than 24
hours after such determination, or at such later time as may be determined by
Sprint. A CSR will be submitted by Sprint to request a repair of the emergency
condition or the non-emergency problem, or to request the addition of a Software
or Equipment Upgrade or other Software or Equipment Enhancement. Sprint's CSRs
will define the condition or problem and state whether Sprint considers the CSR
to be for a Software/Equipment Upgrade or Software/Equipment Enhancement.
Changes to the System resulting from CSRs must be fully tested and accepted in
accordance with the Specifications. Supplier must respond to the submission of a
CSR by Sprint within five (5) business days, acknowledging receipt of the CSR,
confirming or denying agreement with Sprint's assessment of whether the CSR may
be considered a Software or Equipment Upgrade or a Software or Equipment
Enhancement and summarizing Supplier's intended actions to handle the CSR. A CSR
may result in System fixes, or enhancements, resulting in Equipment
modifications reasonably acceptable to Sprint.
SPRINT PROPRIETARY INFORMATION - RESTRICTED
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5. UPGRADES AND ENHANCEMENTS.
Supplier will provide and install Software Upgrades, and Equipment
Upgrades at no additional charge.
Upon payment of the applicable license fee described in the Pricing
Letter, Supplier will provide and install Software Enhancements in Systems
designated by Sprint. Supplier will provide Sprint a rolling six-month forecast
of its planned release dates of Software Enhancements. Supplier represents that
the functionality and features described in the High Level Requirements will be
incorporated into one of Supplier's next two Software Enhancements.
6. DEFINITIONS.
For purposes of this Schedule, the following definitions apply:
l) "Equipment Upgrade" means a change or modification in any Equipment
which fixes or otherwise corrects faults, design shortcomings or
shortcomings in meeting the Specifications, or failure rates, or in any
such case, that is necessary to enable performance in accordance with the
Specifications for the most current version of the Equipment.
2) "Software Enhancements" means major modifications or improvements made
to the Software which improve performance or capacity of the Software or
which provide additional functions to the Software and which will be
identified by a change to the first digit to the right of the decimal point
of the number identifying the version of the Software.
3) "Software Upgrades" means periodic updates to the Software issued by
Supplier under Warranty and Software maintenance obligations to: (i)
correct Defects in the Software and (ii) provide minor enhancements.
Upgrades may be designated by a change to the second digit to the right of
the decimal point of the number identifying the version of the Software.
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