<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 24, 1996
REGISTRATION NO. 333-2432
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 4
(POST-EFFECTIVE
AMENDMENT NO. 1)
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
WESTERN WIRELESS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
WASHINGTON 4812 91-1638901
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification number)
</TABLE>
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2001 NW SAMMAMISH ROAD
ISSAQUAH, WASHINGTON 98027
(206) 313-5200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------
ALAN R. BENDER, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL
WESTERN WIRELESS CORPORATION
2001 NW SAMMAMISH ROAD
ISSAQUAH, WASHINGTON 98027
(206) 313-5200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
Copies to:
<TABLE>
<S> <C>
G. SCOTT GREENBURG, ESQ. ALISON S. RESSLER, ESQ.
GARY J. KOCHER, ESQ. SULLIVAN & CROMWELL
PRESTON GATES & ELLIS 444 SOUTH FLOWER STREET, SUITE 1200
5000 COLUMBIA CENTER LOS ANGELES, CALIFORNIA 90071
701 FIFTH AVENUE (213) 955-8000
SEATTLE, WASHINGTON 98104-7078
(206) 623-7580
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective
date of this Registration Statement.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the sale of Class A Common Stock being registered (all amounts are
estimated except the SEC Registration Fee, the Nasdaq Listing Fee and the NASD
Filing Fee):
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<S> <C>
SEC Registration Fee.................................... $ 104,690
Nasdaq Listing Fee...................................... 49,125
NASD Filing Fee......................................... 30,500
Blue Sky Qualification Fees and Expenses (including
Legal Fees)........................................... 25,000
Transfer Agent and Registrar Fees....................... 13,000
Legal Fees and Expenses................................. 300,000
Printing Expenses....................................... 250,000
Auditors' Fees and Expenses............................. 165,000
Miscellaneous Expenses.................................. 262,685
-------
TOTAL.............................................. $1,200,000
=======
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 23B.08.510 of the Revised Code of Washington authorizes Washington
corporations to indemnify their officers and directors under certain
circumstances against expenses and liabilities incurred in legal proceedings
involving such persons because of their being or having been an officer or
director. The Company's Articles of Incorporation and Bylaws require
indemnification of the Company's officers and directors to the fullest extent
permitted by Washington law. The Company also maintains directors' and officers'
liability insurance.
The Company's By-laws and Articles of Incorporation provide that the
Company shall, to the full extent permitted by the Washington Business
Corporation Act (the "Washington Business Act") of the State of Washington, as
amended from time to time, indemnify all directors and officers of the Company.
In addition, the Company's Articles of Incorporation contains a provision
eliminating the personal liability of directors to the Company or its
shareholders for monetary damages arising out of a breach of fiduciary duty.
Under Washington law, this provision eliminates the liability of a director for
breach of fiduciary duty but does not eliminate the personal liability of any
director for (i) acts or omissions of a director that involve intentional
misconduct or a knowing violation of law, (ii) conduct in violation of Section
23B.08.310 of the Revised Code of Washington (which section relates to unlawful
distributions) or (iii) any transaction from which a director personally
received a benefit in money, property or services to which the director was not
legally entitled.
The Company intends to enter into separate indemnification agreements with
each of its directors and executive officers, which agreements will supersede
prior indemnification agreements entered into by the Company with each of its
directors and executive officers.
II-1
<PAGE> 3
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The table below sets forth the sales of unregistered securities made by the
registrant or its subsidiaries since July 29, 1994. References to "Common Stock"
below are to the Company's Common Stock, par value $0.001 per share, which, upon
effectiveness of the recapitalization referred to in the Prospectus, will be
converted into shares of Class B Common Stock, no par value. The number of
shares set forth below reflects the 3.1-for-1 split to be effected in the
recapitalization.
<TABLE>
<CAPTION>
NUMBER OF
TITLE AND AMOUNT OF SECURITY DATE OF SALE PURCHASERS(1) EXEMPTION(1)
- -------------------------------------------- ------------------- ------------- ------------
<S> <C> <C> <C>
88,567 shares of Common Stock............... February 1996 1 (2)
515,561 shares of Common Stock.............. February 1996 3 (3)
79,748 shares of Common Stock............... February 1996 2 (4)
3,842,531 shares of Common Stock............ December 1995 1 (5)
217,000 shares of Common Stock.............. December 1995 2 (6)
Exchange Rights exchangeable into 327,882
shares the Common Stock................... November 1995 3 (7)
896,210 shares of Common Stock.............. June 1995 47 (8)
13,241,428 shares of Common Stock........... June 1995 13 (9)
670,475 shares of Common Stock.............. June 1995 23 (10)
38,762 shares of Common Stock............... June-December 1995 6 (11)
45,042,712 shares of Common Stock........... July 1994 74 (12)
</TABLE>
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(1) All sales were made to accredited investors in private transactions not
involving any public offering made in reliance upon the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"). No underwriters were involved. Unless
otherwise indicated, no purchaser was an officer or director of the Company
or holder of more than 5% of any class of the Company's voting securities
(a "5% shareholder"). Please refer to "Certain Transactions" in the
Prospectus for a more detailed description of the transactions in which the
Company's officers, directors and 5% shareholders participated.
(2) Issued to Donald Guthrie in consideration for $999,950.
(3) Issued to the shareholders of Palouse Paging, Inc. ("Palouse"), including
two officers of the Company (one of whom is also a director), in
consideration for all of the issued and outstanding stock of Palouse.
(4) Issued to the shareholders of Sawtooth Paging, Inc. ("Sawtooth"), including
two officers of the Company (one of whom is also a director), other than
the Company, in consideration for the shares of stock of Sawtooth
representing the 55% ownership interest in Sawtooth not held by the
Company.
(5) Issued to GS Capital Partners, L.P. ("GS Capital"), an affiliate of Goldman
Sachs, upon the termination of another Goldman Sachs affiliate, GS Capital
Partners Media Holding I, L.P. (the "Partnership"), which was the
registered owner of 3,842,531 shares of Common Stock that it acquired on
July 29, 1994. Following the distribution of the shares of Common Stock to
the Partnership's partners, GS Capital and GS Capital Partners Media
Holding I, Inc., GS Capital Partners Media Holding I, Inc. merged with and
into the Company and the 2,766,623 shares of Common Stock owned GS Capital
Partners Media Holding I, Inc. were canceled and a like number of shares of
Common Stock were issued to GS Capital. GS Capital reimbursed the Company
for all of the out-of-pocket expenses incurred by the Company in connection
with this transaction. No cash proceeds were received by the Company in
this transaction.
(6) Issued to the shareholders of Deadwood Cellular Telephone Company
("Deadwood"), the unaffiliated owner of the Harding (SD-1) cellular market,
in consideration for all the issued and outstanding stock of Deadwood.
(7) Issued to the general and limited partners of Cook Inlet PV/SS PCS
Partners, L.P., including Providence Media Partners, L.P., the general
partner of Cook Inlet Western Wireless PV/SS PCS, L.P., in which Western
PCS BTA I Corporation, a wholly-owned subsidiary of the Company, is the
sole limited partner.
II-2
<PAGE> 4
(8) Exchanged for 8,963 shares of common stock of GCC with purchasers including
three officers of the Company. A Form D with respect to such sale was filed
with the Securities and Exchange Commission under Regulation D under the
Securities Act.
(9) Issued in exchange for commitments to purchase 4,271,428 shares of Series A
Preferred Stock of Western PCS Corporation by the holders thereof including
the Hellmen Entities, the Goldman Sachs Entities, Providence Ventures,
L.P., and two directors (one of whom is also an officer) and one officer of
the Company. Commitments to purchase shares of Series A Preferred Stock in
the aggregate amount of $149.5 million were received by Western PCS
Corporation in April 1995. A Form D with respect to such sale was filed
with the Securities and Exchange Commission under Regulation D under the
Securities Act.
(10) Issued to certain then-existing shareholders for total proceeds of $7.6
million. A Form D with respect to such sale was filed with the Securities
and Exchange Commission under Regulation D under the Securities Act.
(11) Issued upon exercise of stock options for total proceeds of $78,000.
(12) Issued in connection with the Business Combination. A Form D with respect
to such sale was filed with the Securities and Exchange Commission under
Regulation D under the Securities Act. See "Certain Transactions."
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)Exhibits:
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<S> <C> <C>
1.1 -- U.S. Underwriting Agreement
1.2 -- International Underwriting Agreement
3.1++ -- Amended and Restated Articles of Incorporation of the Registrant
3.2++ -- Bylaws of the Registrant
5.1++ -- Opinion of Preston Gates & Ellis
10.1** -- Loan Agreement between Western PCS II Corporation and Northern Telecom
Inc., dated June 30, 1995
10.2*CE -- PCS 1900 Project and Supply Agreement between Western PCS Corporation and
Northern Telecom Inc., dated June 30, 1995
10.3*CE -- Purchase Agreement between Motorola Nortel Communications Co. and General
Cellular Corporation, dated July 29, 1993
10.4** -- Loan Agreement among Western Wireless Corporation and The Toronto-
Dominion Bank, Barclays Bank, PLC, and Morgan Guaranty Trust Company of
New York, as Managing Agents for the Various Lenders, dated June 30, 1995
10.5++ -- First Amendment to Loan Agreement by and among Western Wireless
Corporation, The Toronto-Dominion Bank, Barclays Bank, PLC, and Morgan
Guaranty Trust Company of New York, as Managing Agents for the Various
Lenders, dated January 11, 1996
10.6*CE -- Supply Contract by and between Western PCS Corporation and Nokia
Telecommunications Inc., dated December 14, 1995
10.7*CE -- Purchase and Sale Agreement, Nokia Mobile Phones, Inc. and Western
Wireless Corporation, dated November 10, 1995
10.8++ -- Western Wireless Corporation, 1994 Management Incentive Stock Option
Plan, approved, as adopted and amended, by Shareholders November 16,
1995, together with form of Stock Option Agreement for offers thereunder
10.9++ -- Stockholders Agreement by and among Western Wireless Corporation and
certain of its shareholders, dated July 29, 1994
10.10++ -- First Amendment to Stockholders Agreement by and among Western Wireless
Corporation and certain of its shareholders, Adding as a Party Western
PCS Corporation, dated November 30, 1994
10.11++ -- Waiver Agreement by and among Western Wireless Corporation, Western PCS
Corporation and certain of Western Wireless Corporation's shareholders,
dated November 30, 1994
</TABLE>
II-3
<PAGE> 5
<TABLE>
<S> <C> <C>
10.12++ -- Waiver Agreement by and among Western Wireless Corporation, Western PCS
Corporation and certain of Western Wireless Corporation's shareholders,
dated February 15, 1996
10.13++ -- Voting Agreement by and among certain shareholders of Western Wireless
Corporation, dated July 29, 1994.
10.14++ -- Voting Agreement by and among Western Wireless Corporation and certain of
its shareholders
10.15++ -- Lease Agreement by and between WWC Holding Co., Inc., successor in
interest to MARKETS Cellular Limited Partnership, and WRC Properties,
Inc., dated May 1, 1994
10.16++ -- Lease Agreement by and between Western Wireless Corporation and
Department of Natural Resources, dated August 25, 1995
10.17++ -- First Amendment to Lease Agreement by and between Western Wireless
Corporation and Department of Natural Resources, dated February 28, 1996
10.18++ -- Form of Cellular One Group License Agreement
10.19++ -- Asset Purchase Agreement between Western PCS III License Corporation as
Buyer and GTE Mobilnet Incorporated as Seller, dated January 16, 1996
10.20++ -- Purchase and Sale Agreement by and between Robert O. Tyler, Esq., as
Trustee, Seller, and GCC License Corporation, Purchaser, dated December
22, 1995
10.21*CE -- Agreement for Purchase and Sale of Autoplex Cellular Equipment, Software
and Services by and among American Telephone and Telegraph Company, WWC
Holding Co., Inc., successor to MARKETS Cellular Limited Partnership and
MCII General Partnership, dated March 17, 1993
10.22++ -- Agreement and Plan of Reorganization by and among Palouse Paging, Inc.,
the Shareholders of 100% of the Stock of Palouse Paging, Inc., Western
Paging I Corporation and Western Wireless Corporation, dated February 5,
1996
10.23++ -- First Amendment to Agreement and Plan of Reorganization by and among
Western Paging I Corporation, the former Shareholders of 100% of the
Stock of Palouse Paging, Inc. and Western Wireless Corporation
10.24++ -- Agreement and Plan of Reorganization by and among Sawtooth Paging, Inc.,
the Shareholders of 52.93% of the Stock of Sawtooth Paging, Inc., Western
Paging II Corporation and Western Wireless Corporation, dated February 5,
1996
10.25++ -- Employment Agreement by and between John W. Stanton and Western Wireless
Corporation, dated March 12, 1996
10.26++ -- Employment Agreement by and between Robert R. Stapleton and Western
Wireless Corporation, dated March 12, 1996
10.27++ -- Employment Agreement by and between Mikal J. Thomsen and Western Wireless
Corporation, dated March 12, 1996
10.28++ -- Employment Agreement by and between Theresa E. Gillespie and Western
Wireless Corporation, dated March 12, 1996
10.29++ -- Employment Agreement by and between Alan R. Bender and Western Wireless
Corporation, dated March 12, 1996
10.30++ -- Employment Agreement by and between Cregg B. Baumbaugh and Western
Wireless Corporation, dated March 12, 1996
10.31++ -- Form of Registrant's Restrictive Covenant and Confidentiality Agreement
10.32++ -- Form of Director and Officer Indemnification Agreement
</TABLE>
II-4
<PAGE> 6
<TABLE>
<S> <C> <C>
10.33++ -- Western PCS Corporation Series A Preferred Stock Purchase Agreement among
Western Wireless Corporation, Western PCS Corporation and the Purchasers
listed therein, dated April 10, 1995
10.34++ -- Second Amendment to Loan Agreement by and among Western Wireless
Corporation, The Toronto-Dominion Bank, Barclays Bank, PLC, and Morgan
Guaranty Trust Company of New York, as Managing Agents for the Various
Lenders, dated
10.35+++ -- Form of Indenture relating to Senior Subordinated Notes due 2006
10.36++ -- Subscription and Put and Call Agreement with respect to shares of Common
Stock of Western Wireless International Corporation, dated as of January
1, 1996
10.37++ -- PCS Block "C" Organization and Financing Agreement by and among Western
PCS BTA I Corporation, Western Wireless Corporation, Cook Inlet PV/SS PCS
Partners, L.P., Cook Inlet Telecommunications, Inc., SS PCS Corporation
and Providence Media Partners L.P. dated as of November 5, 1996
10.38++ -- Limited Partnership Agreement by and between Cook Inlet PV/SS PCS
Partners, L.P. and Western PCS BTA I Corporation dated as of November 5,
1995
10.39++ -- First Amendment to Block "C" Organization and Financing Agreement and
Cook Inlet Western Wireless PV/SS PCS, L.P. Limited Partnership Agreement
by and among Western PCS BTA I Corporation, Western Wireless Corporation,
Cook Inlet PV/SS PCS Partners, L.P., Cook Partners L.P. dated as of April
8, 1996
10.40++ -- Amended and Restated Loan Agreement among Western Wireless Corporation
and The Toronto-Dominion Bank, Barclays Bank, PLC, and Morgan Guaranty
Trust Company of New York, as Managing Agents for the Various Lenders,
dated May 6, 1996
21++ -- List of material subsidiaries
23.1++ -- Consent of Arthur Andersen LLP
23.2++ -- Consent of Preston Gates & Ellis (see Exhibit 5.1)
24++ -- Power of Attorney
</TABLE>
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<TABLE>
<C> <S>
* Portions of this Exhibit have been omitted and filed separately with the Secretary of
the Commission pursuant to the Registrant's Application Requesting Confidential
Treatment under Rule 406 of the Act (the "Confidentiality Request").
** Filed previously with the Company's Registration Statement on Form S-1 (Commission File
No. 333-2432) and portions of this Exhibit were omitted and filed separately with the
Secretary of the Commission pursuant to the Confidentiality Request.
++ Filed previously with the Company's Registration Statement on Form S-1 (Commission File
No. 333-2432)
+++ Incorporated herein by reference to the exhibit filed with the Company's Registration
Statement on Form S-1 (Commission File No. 333-2688).
</TABLE>
(b) Financial Statement Schedule:
Schedule II -- Valuation and Qualifying Accounts and Reserves (see
F-26)
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<PAGE> 7
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreements certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the
adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b), if in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at the time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(5) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized on this 24th day of May,
1996.
WESTERN WIRELESS CORPORATION
By /s/ ALAN R. BENDER
------------------------------------
Alan R. Bender
Senior Vice President, General
Counsel
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed below on May 24, 1996 by the following
persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- --------------------------------------------- ---------------------------------------------
<C> <S>
* Chairman, Chief Executive Officer and
- --------------------------------------------- Director (Principal Executive Officer)
John W. Stanton
/s/ THERESA E. GILLESPIE Chief Financial Officer (Principal Financial
- --------------------------------------------- Officer)
Theresa E. Gillespie
/s/ NASTASHIA S. PRESS Principal Accounting Officer
- ---------------------------------------------
Nastashia S. Press
* Director
- ---------------------------------------------
David A. Bayer
* Director
- ---------------------------------------------
John L. Bunce, Jr.
* Director
- ---------------------------------------------
Mitchell R. Cohen
* Director
- ---------------------------------------------
Jonathan M. Nelson
* Director
- ---------------------------------------------
Terence M. O'Toole
*By /s/ ALAN R. BENDER
- ---------------------------------------------
Alan R. Bender
Attorney-in-Fact
</TABLE>
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<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<S> <C> <C>
1.1 -- U.S. Underwriting Agreement
1.2 -- International Underwriting Agreement
3.1++ -- Amended and Restated Articles of Incorporation of the Registrant
3.2++ -- Bylaws of the Registrant
5.1++ -- Opinion of Preston Gates & Ellis
10.1** -- Loan Agreement between Western PCS II Corporation and Northern Telecom
Inc., dated June 30, 1995
10.2*CE -- PCS 1900 Project and Supply Agreement between Western PCS Corporation and
Northern Telecom Inc., dated June 30, 1995
10.3*CE -- Purchase Agreement between Motorola Nortel Communications Co. and General
Cellular Corporation, dated July 29, 1993
10.4** -- Loan Agreement among Western Wireless Corporation and The Toronto-Dominion
Bank, Barclays Bank, PLC, and Morgan Guaranty Trust Company of New York,
as Managing Agents for the Various Lenders, dated June 30, 1995
10.5++ -- First Amendment to Loan Agreement by and among Western Wireless
Corporation, The Toronto-Dominion Bank, Barclays Bank, PLC, and Morgan
Guaranty Trust Company of New York, as Managing Agents for the Various
Lenders, dated January 11, 1996
10.6*CE -- Supply Contract by and between Western PCS Corporation and Nokia
Telecommunications Inc., dated December 14, 1995
10.7*CE -- Purchase and Sale Agreement, Nokia Mobile Phones, Inc. and Western
Wireless Corporation, dated November 10, 1995
10.8++ -- Western Wireless Corporation, 1994 Management Incentive Stock Option Plan,
approved, as adopted and amended, by Shareholders November 16, 1995,
together with form of Stock Option Agreement for offers thereunder
10.9++ -- Stockholders Agreement by and among Western Wireless Corporation and
certain of its shareholders, dated July 29, 1994
10.10++ -- First Amendment to Stockholders Agreement by and among Western Wireless
Corporation and certain of its shareholders, Adding as a Party Western PCS
Corporation, dated November 30, 1994
10.11++ -- Waiver Agreement by and among Western Wireless Corporation, Western PCS
Corporation and certain of Western Wireless Corporation's shareholders,
dated November 30, 1994
10.12++ -- Waiver Agreement by and among Western Wireless Corporation, Western PCS
Corporation and certain of Western Wireless Corporation's shareholders,
dated February 15, 1996
10.13++ -- Voting Agreement by and among certain shareholders of Western Wireless
Corporation, dated July 29, 1994.
10.14 -- Voting Agreement by and among Western Wireless Corporation and certain of
its shareholders
10.15++ -- Lease Agreement by and between WWC Holding Co., Inc., successor in
interest to MARKETS Cellular Limited Partnership, and WRC Properties,
Inc., dated May 1, 1994
10.16++ -- Lease Agreement by and between Western Wireless Corporation and Department
of Natural Resources, dated August 25, 1995
10.17++ -- First Amendment to Lease Agreement by and between Western Wireless
Corporation and Department of Natural Resources, dated February 28, 1996
10.18++ -- Form of Cellular One Group License Agreement
10.19++ -- Asset Purchase Agreement between Western PCS III License Corporation as
Buyer and GTE Mobilnet Incorporated as Seller, dated January 16, 1996
10.20++ -- Purchase and Sale Agreement by and between Robert O. Tyler, Esq., as
Trustee, Seller, and GCC License Corporation, Purchaser, dated December
22, 1995
</TABLE>
<PAGE> 10
<TABLE>
<S> <C> <C>
10.21*CE -- Agreement for Purchase and Sale of Autoplex Cellular Equipment, Software
and Services by and among American Telephone and Telegraph Company, WWC
Holding Co., Inc., successor to MARKETS Cellular Limited Partnership and
MCII General Partnership, dated March 17, 1993
10.22++ -- Agreement and Plan of Reorganization by and among Palouse Paging, Inc.,
the Shareholders of 100% of the Stock of Palouse Paging, Inc., Western
Paging I Corporation and Western Wireless Corporation, dated February 5,
1996
10.23++ -- First Amendment to Agreement and Plan of Reorganization by and among
Western Paging I Corporation, the former Shareholders of 100% of the Stock
of Palouse Paging, Inc. and Western Wireless Corporation
10.24++ -- Agreement and Plan of Reorganization by and among Sawtooth Paging, Inc.,
the Shareholders of 52.93% of the Stock of Sawtooth Paging, Inc., Western
Paging II Corporation and Western Wireless Corporation, dated February 5,
1996
10.25++ -- Employment Agreement by and between John W. Stanton and Western Wireless
Corporation, dated March 12, 1996
10.26++ -- Employment Agreement by and between Robert R. Stapleton and Western
Wireless Corporation, dated March 12, 1996
10.27++ -- Employment Agreement by and between Mikal J. Thomsen and Western Wireless
Corporation, dated March 12, 1996
10.28++ -- Employment Agreement by and between Theresa E. Gillespie and Western
Wireless Corporation, dated March 12, 1996
10.29++ -- Employment Agreement by and between Alan R. Bender and Western Wireless
Corporation, dated March 12, 1996
10.30++ -- Employment Agreement by and between Cregg B. Baumbaugh and Western
Wireless Corporation, dated March 12, 1996
10.31++ -- Form of Registrant's Restrictive Covenant and Confidentiality Agreement
10.32++ -- Form of Director and Officer Indemnification Agreement
10.33++ -- Western PCS Corporation Series A Preferred Stock Purchase Agreement among
Western Wireless Corporation, Western PCS Corporation and the Purchasers
listed therein, dated April 10, 1995
10.34++ -- Second Amendment to Loan Agreement by and among Western Wireless
Corporation, The Toronto-Dominion Bank, Barclays Bank, PLC, and Morgan
Guaranty Trust Company of New York, as Managing Agents for the Various
Lenders, dated April 16, 1996.
10.35+++ -- Form of Indenture relating to Senior Subordinated Notes due 2006
10.36++ -- Subscription and Put and Call Agreement with respect to shares of Common
Stock of Western Wireless International Corporation, dated as of January
1, 1996
10.37++ -- PCS Block "C" Organization and Financing Agreement by and among Western
PCS BTA I Corporation, Western Wireless Corporation, Cook Inlet PV/SS PCS
Partners, L.P., Cook Inlet Telecommunications, Inc., SSPCS Corporation and
Providence Media Partners L.P. dated as of November 5, 1995
10.38++ -- Limited Partnership Agreement by and between Cook Inlet PV/SS PCS
Partners, L.P. and Western PCS BTA I Corporation dated as of November 5,
1995
10.39++ -- First Amendment to Block "C" Organization and Financing Agreement and Cook
Inlet Western Wireless PV/SS PCS, L.P. Limited Partnership Agreement by
and among Western PCS BTA I Corporation, Western Wireless Corporation,
Cook Inlet PV/SS PCS Partners, L.P., Cook Inlet Telecommunications, Inc.,
SSPCS Corporation, Providence Media Partners L.P. dated as of April 8,
1996
</TABLE>
<PAGE> 11
<TABLE>
<S> <C> <C>
10.40++ -- Amended and Restated Loan Agreement among Western Wireless Corporation and
The Toronto-Dominion Bank, Barclays Bank, PLC, and Morgan Guaranty Trust
Company of New York, as Managing Agents for the Various Lenders, dated May
6, 1996.
21++ -- List of material subsidiaries
23.1++ -- Consent of Arthur Andersen LLP
23.2++ -- Consent of Preston Gates & Ellis (see Exhibit 5.1)
24++ -- Power of Attorney
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Portions of this Exhibit have been omitted and filed separately with the Secretary of
the Commission pursuant to the Registrant's Application Requesting Confidential
Treatment under Rule 406 of the Act (the "Confidentiality Request").
** Filed previously with the Company's Registration Statement on Form S-1 (Commission File
No. 333-2432) and portions of this Exhibit were omitted and filed separately with the
Secretary of the Commission pursuant to the Confidentiality Request.
++ Filed previously with the Company's Registration Statement on Form S-1 (Commission File
No. 333-2432).
+++ Incorporated herein by reference to the exhibit filed with the Company's Registration
Statement on Form S-1 (Commission File No. 333-2688).
</TABLE>
<PAGE> 1
Exhibit 1.1
WESTERN WIRELESS CORPORATION
CLASS A COMMON STOCK, NO PAR VALUE
UNDERWRITING AGREEMENT
(U.S. VERSION)
----------------------------------
May 22, 1996
Goldman, Sachs & Co.,
Donaldson, Lufkin & Jenrette Securities Corporation,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Salomon Brothers Inc,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Western Wireless Corporation, a Washington corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 7,211,840 shares and, at the election of the Underwriters, up to 1,320,000
additional shares of Class A Common Stock, no par value, ("Stock") of the
Company, and the shareholders of the Company named in Schedule II hereto (the
"Selling Shareholders"), propose severally and not jointly, subject to the terms
and conditions stated herein, to sell to the Underwriters an aggregate of
1,588,160 shares of Stock. The aggregate of 8,800,000 shares to be sold by the
Company and the Selling Shareholders is herein called the "Firm Shares" and the
aggregate of 1,320,000 additional shares to be sold by the Company is herein
called the "Optional Shares" (the Firm Shares and the Optional Shares that the
Underwriters elect to purchase pursuant to Section 2 hereof being collectively
called the "Shares").
It is understood and agreed to by all parties that the Company and the
Selling Shareholders are concurrently entering into an agreement (the
"International Underwriting Agreement") providing for the sale by the Company
and the Selling Shareholders of up to a total of 2,530,000 shares of Stock (the
"International Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters outside the United States (the
"International Underwriters"), for whom Goldman Sachs International, Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch International and
Salomon Brothers International Limited are acting as lead managers. Anything
herein or therein to the contrary notwithstanding, the respective closings under
this Agreement and the International Underwriting Agreement are hereby expressly
made conditional on one another. The Underwriters hereunder and the
International Underwriters are simultaneously entering into an Agreement between
U.S. and International Underwriting Syndicates (the "Agreement between
Syndicates") which provides, among other things, for the transfer of shares of
Stock between the two syndicates. Two forms of prospectus are to be used in
connection with the offering and sale of shares of Stock contemplated by the
foregoing, one relating to the Shares hereunder
<PAGE> 2
and the other relating to the International Shares. The latter form of
prospectus will be identical to the former except for certain substitute pages.
Except as used in Sections 2, 4, 5, 10 and 12 herein, and except as the context
may otherwise require, references hereinafter to the Shares shall include all
the shares of Stock which may be sold pursuant to either this Agreement or the
International Underwriting Agreement, references herein to the "U.S. Prospectus"
whether in preliminary or final form, and whether as amended or supplemented,
shall refer to the prospectus relating to the Shares hereunder and references
herein to the "International Prospectus" whether in preliminary or final form,
and whether as amended or supplemented, shall refer to the prospectus relating
to the International Shares. The U.S. Prospectus and the International
Prospectus are hereafter called the "Public Offering Prospectus."
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-2432) (the
"Initial Registration Statement") in respect of the Shares, and as a part
thereof the U.S. Prospectus and the prospectus relating to offers and sales
of Stock by Goldman, Sachs & Co. in secondary transactions, has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto, to
you for each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement,
if any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 6(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared effective, each
as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; and such form of final prospectus
relating to offers and sales of Stock by Goldman, Sachs & Co. in secondary
transactions, in the form first filed pursuant to Rule 424(b) under the
Act, being hereafter called the "Secondary Transactions Prospectus" and
collectively with the U.S. Prospectus in the form first filed pursuant to
Rule 424(b) under the Act, the "Filed Prospectus" and the Filed Prospectus
collectively with the International Prospectus as it exists on the date of
the Filed Prospectus (the "Final International Prospectus"), the
"Prospectus");
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and such Preliminary Prospectus and any
preliminary International Prospectus did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an
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<PAGE> 3
Underwriter through Goldman, Sachs & Co. expressly for use therein or by a
Selling Shareholder expressly for use in the preparation of the answers
therein to Items 7 and 11(l) of Form S-1;
(iii) The Registration Statement (other than the financial statements
contained in the initial filing with the Commission on March 15, 1996),
Amendment No. 1 to the Registration Statement filed on May 3, 1996,
Amendment No. 2 to the Registration Statement filed on May 15, 1996 and
Amendment No. 3 to the Registration Statement filed on May 20, 1996
conform, and the Filed Prospectus and any further amendments or supplements
to the Registration Statement or the Filed Prospectus will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and the Registration Statement and
the Prospectus do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Filed Prospectus and any amendment or
supplement thereto, in the case of the Filed Prospectus, or as of the
applicable date of the Final International Prospectus and any amendment or
supplement thereto, in the case of the Final International Prospectus,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter through Goldman, Sachs & Co. expressly for use therein or
by a Selling Shareholder expressly for use in the preparation of the
answers therein to Items 7 and 11(l) of Form S-1;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock or partnership interests and there has not been any increase in the
short-term debt or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries (a "Material Adverse
Effect"), otherwise than as set forth or contemplated in the Prospectus;
(v) The Company and its subsidiaries have valid title in fee simple to
all real property and valid title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and defects except
those that are described in the Prospectus, those that could not reasonably
be expected to have a Material Adverse Effect and those that do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as could not
reasonably be expected to have a Material Adverse Effect, and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(vi) The Company has been duly incorporated and is validly existing as
a corporation under the laws of the State of Washington, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such qualification, or
is subject to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction; and each subsidiary of the
Company listed on Exhibit 21 to the Initial Registration Statement (the
"Significant Subsidiaries," or the "Significant Subsidiary," as the case
may be) has been duly incorporated and is
3
<PAGE> 4
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(vii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description of the capital stock
contained in the Prospectus; and all of the issued shares of capital stock
or partnership interests of each Significant Subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and
non-assessable and (except for minority interests representing less than
10% of such Significant Subsidiary) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
other than liens granted pursuant to the Loan Agreement, dated as of May 6,
1996, with The Toronto-Dominion Bank, Barclays Bank, PLC, and Morgan
Guaranty Trust Company of New York, as Managing Agents (the "Credit
Facility") or the Loan Agreement, dated June 30, 1995, with Northern
Telecom Inc. (the "NORTEL Facility" and, together with the Credit Facility,
the "Senior Secured Facilities");
(viii) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder and under the International Underwriting Agreement
have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein and in the International
Underwriting Agreement, will be duly and validly issued and fully paid and
non-assessable and will conform to the description of the Stock contained
in the Prospectus;
(ix) The issue and sale of the Shares by the Company hereunder and
under the International Underwriting Agreement and the compliance by the
Company with all of the provisions of this Agreement and the International
Underwriting Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement, shareholders
agreement, registration rights agreement or other material agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the provisions of
the Articles of Incorporation or By-laws of the Company or any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement and the International Underwriting Agreement, except the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state or foreign securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters and the
International Underwriters;
(x) Neither the Company nor any of its Significant Subsidiaries is (a)
in violation of its Articles or Certificate of Incorporation, as the case
may be, or By-laws or (b) in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease, shareholders
agreement, registration rights agreement or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound, except, in the case of this clause (b), for defaults that
individually or in the aggregate would not have a Material Adverse Effect;
(xi) The statements set forth in the Prospectus under the caption
"Description of Capital Stock," insofar as they purport to constitute a
summary of the terms of the Stock and the Class B Common Stock, and under
the captions "Underwriting," "Risk Factors -- Competition,"
"-- Intellectual Property and Branding," "-- Governmental Regulation,"
"Description of Indebtedness," "Business -- Competition" and
"Business -- Governmental Regulation" inso-
4
<PAGE> 5
far as they purport to describe the provisions of the laws and documents to
which the Company or any subsidiary is a party referred to therein are
accurate, complete and fair in all material respects;
(xii) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(xiii) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(xiv) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(xv) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xvi) Except as otherwise disclosed or contemplated by the Prospectus,
the Company and its subsidiaries have such certificates of convenience or
necessity, easements, rights-of-way, operating rights, permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("Permits"), including Permits issued by the Federal Communications
Commission (the "FCC"), as are necessary to own their respective properties
and to conduct their respective businesses substantially in the manner
described in the Prospectus, except for any such Permits the absence of
which could not reasonably be expected to result in a Material Adverse
Effect; the Company and its subsidiaries have fulfilled all their material
obligations with respect to such Permits and no event has occurred which
allows (or after notice or lapse of time would allow) revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such Permit, in each case which could
reasonably be expected to result in a Material Adverse Effect; and, except
as described in the Prospectus, none of such Permits contains any
restriction that is burdensome to the Company or any of its subsidiaries,
except for restrictions that could not reasonably be expected to have a
Material Adverse Effect; and
(xvii) Except as otherwise disclosed or contemplated by the
Prospectus, the Company and its subsidiaries own or possess all trademarks,
trademark registrations, service marks, service mark registrations, trade
names, licenses relating to intellectual property, trade secrets and rights
("Intellectual Property") described in the Prospectus as being owned or
possessed by them or any of them, and the Company is not aware of any claim
to the contrary or any challenge by any other person to the rights of the
Company or any of its subsidiaries with respect to the foregoing, which
claim or challenge could reasonably be expected to have a Material Adverse
Effect.
(b) Each of the Selling Shareholders severally and not jointly represents
and warrants to, and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Shareholder of this Agreement,
the International Underwriting Agreement, the Custody Agreement and Power
of Attorney hereinafter referred to, and for the sale
5
<PAGE> 6
and delivery of the Shares to be sold by such Selling Shareholder hereunder
and under the International Underwriting Agreement, have been obtained; and
such Selling Shareholder has full right, power and authority to enter into
this Agreement, the International Underwriting Agreement, the Custody
Agreement and Power of Attorney and to sell, assign, transfer and deliver
the Shares to be sold by such Selling Shareholder hereunder and under the
International Underwriting Agreement;
(ii) The sale of the Shares to be sold by such Selling Shareholder
hereunder and under the International Underwriting Agreement and the
compliance by such Selling Shareholder with all of the provisions of this
Agreement, the International Underwriting Agreement, the Custody Agreement
and Power of Attorney and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement, shareholders
agreement, registration rights agreement or other material agreement or
instrument to which such Selling Shareholder is a party or by which such
Selling Shareholder is bound, or to which any of the property or assets of
such Selling Shareholder is subject, nor will such action result in any
violation of the provisions of the Articles or Certificate of
Incorporation, as the case may be, or By-laws of such Selling Shareholder
if such Selling Shareholder is a corporation, the Partnership Agreement of
such Selling Shareholder if such Selling Shareholder is a partnership, or
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over such Selling Shareholder or the
property of such Selling Shareholder;
(iii) Such Selling Shareholder has, and immediately prior to each Time
of Delivery (as defined in Section 5 hereof) such Selling Shareholder will
have, valid title to the Shares to be sold by such Selling Shareholder
hereunder and under the International Underwriting Agreement, free and
clear of all liens, encumbrances, equities or claims; and, upon delivery of
such Shares and payment therefor pursuant hereto and thereto, valid title
to such Shares, free and clear of all liens, encumbrances, equities or
claims, will pass to the several Underwriters or the International
Underwriters, as the case may be;
(iv) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder or under the International Underwriting Agreement, any securities
of the Company that are substantially similar to the Shares, including but
not limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock
option plans existing on, or upon the conversion or exchange of convertible
or exchangeable securities outstanding as of, the date of this Agreement),
except (a) as a gift or gifts, provided the donee or donees thereof agree
to be bound by this restriction, or (b) with the prior written consent of
the representatives of the Underwriters;
(v) Such Selling Shareholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by such Selling
Shareholder expressly for use therein, such Preliminary Prospectus and the
Registration Statement did, and the Filed Prospectus and any further
amendments or supplements to the Registration Statement and the Filed
Prospectus, when they become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act and the rules and regulations of the Commission thereunder and,
also with respect to
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<PAGE> 7
any preliminary International Prospectus and the Final International
Prospectus and any further amendments or supplements thereto, will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with resect to the transactions herein
contemplated, such Selling Shareholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed
and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof);
(viii) Certificates in negotiable form representing all of the Shares
to be sold by such Selling Shareholder hereunder and under the
International Underwriting Agreement have been placed in custody under a
Custody Agreement and Power of Attorney, in the form heretofore furnished
to you (the "Custody Agreement and Power of Attorney"), duly executed and
delivered by such Selling Shareholder to Preston Gates & Ellis, as
custodian (the "Custodian"). The persons indicated in Schedule II hereto,
and each of them, have been appointed pursuant to the Custody Agreement and
Power of Attorney as such Selling Shareholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this Agreement
and the International Underwriting Agreement on behalf of such Selling
Shareholder, to determine as provided in the Custody Agreement and Power of
Attorney the purchase price to be paid by the Underwriters and the
International Underwriters to the Selling Shareholders as provided in
Section 2 hereof, to authorize the delivery of the Shares to be sold by
such Selling Shareholder hereunder and otherwise to act on behalf of such
Selling Shareholder in connection with the transactions contemplated by
this Agreement, the International Underwriting Agreement and the Custody
Agreement and Power of Attorney; and
(ix) The Shares represented by the certificates held in custody for
such Selling Shareholder under the Custody Agreement and Power of Attorney
are subject to the interests of the Underwriters hereunder and the
International Underwriters under the International Underwriting Agreement;
the arrangements made by such Selling Shareholder for such custody, and the
appointment by such Selling Shareholder of the Attorneys-in-Fact by the
Custody Agreement and Power of Attorney, to the extent set forth therein
are irrevocable; the obligations of the Selling Shareholders hereunder
shall not be terminated by operation of law, whether by the death or
incapacity of any individual Selling Shareholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or
the termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by
the occurrence of any other event; if any individual Selling Shareholder or
any such executor or trustee should die or become incapacitated, or if any
such estate or trust should be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates representing the
Shares shall be delivered by or on behalf of the Selling Shareholders in
accordance with the terms and conditions of this Agreement, of the
International Underwriting Agreement and of the Custody Agreement and Power
of Attorney; and actions taken by the Attorneys-in-Fact pursuant to the
Custody Agreement and Power of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred,
regardless of whether or not the Custodian, the Attorneys-in-Fact, or any
of them, shall have received notice of such death, incapacity, termination,
dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Shareholders agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and each of the Selling Shareholders,
at a purchase price per share of $22.15, the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate
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<PAGE> 8
number of Firm Shares to be sold by the Company and each Selling Shareholder as
set forth opposite their respective names in Schedule II hereto by a fraction,
the numerator of which is the aggregate number of Firm Shares to be purchased by
such Underwriter as set forth opposite the name of such Underwriter in Schedule
I hereto and the denominator of which is the aggregate number of Firm Shares to
be purchased by all of the Underwriters from the Company and all of the Selling
Shareholders hereunder and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as provided
below, the Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at the purchase price per share set forth in clause (a) of this Section
2, that portion of the number of Optional Shares as to which such election shall
have been exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction, the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 1,320,000 Optional Shares, at the purchase price per share
set forth in clause (a) of this Section 2 for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 5
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. The Company hereby confirms its engagement of Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJ") as, and DLJ hereby confirms its
agreement with the Company to render services as, a "qualified independent
underwriter" within the meaning of Section 2(o) of Schedule E to the By-Laws of
the National Association of Securities Dealers, Inc. (the "NASD") with respect
to the offering and sale of the Shares. DLJ, solely in its capacity as qualified
independent underwriter and not otherwise, is referred to herein as the "QIU."
As compensation for the services of the QIU hereunder, the Company agrees to pay
the QIU $4,000 on the Closing Date. The price at which the Shares will be sold
to the public shall not be higher than the maximum price recommended by DLJ
acting as QIU.
4. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Public Offering Prospectus.
5. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company and the Selling Shareholders, shall be delivered by or on
behalf of the Company and the Selling Shareholders to Goldman, Sachs & Co. for
the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by certified or official bank check
or checks, payable to the order of the Company and each of the Selling
Shareholders in immediately available (same day) funds. The Company will cause
the certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004 (the "Designated Office"). The time and date of
such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m.,
New York City time, on May 29, 1996 or such other time and date as Goldman,
Sachs & Co., the Company and the Selling Shareholders may agree upon in writing,
and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date
specified by you in the written notice given by you of the Underwriters'
election to purchase such Optional Shares, or such
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other time and date as you and the Company may agree upon in writing. Such time
and date for delivery of the Firm Shares is herein called the "First Time of
Delivery," such time and date for delivery of the Optional Shares, if not the
First Time of Delivery, is herein called the "Second Time of Delivery," and each
such time and date for delivery is herein called a "Time of Delivery."
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 8 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 8(m) hereof, will be delivered at the offices of Preston
Gates & Ellis, 701 Fifth Avenue, Seattle, Washington 98104-7078 (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all at
such Time of Delivery. A meeting will be held at the Closing Location at 1:00
p.m., Seattle time, on the New York Business Day next preceding such Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 5, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
6. The Company agrees with each of the Underwriters:
(a) To prepare the Public Offering Prospectus in a form approved by you and
the Secondary Transactions Prospectus in a form approved by Goldman, Sachs & Co.
and to file the Filed Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you, in the case of the Public Offering Prospectus, or
Goldman, Sachs & Co., in the case of the Secondary Transactions Prospectus,
promptly after reasonable notice thereof (in the case of the Secondary
Transactions Prospectus, such approval not to be unreasonably withheld or
delayed); to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective and to advise you, in the case of the Public Offering Prospectus, or
Goldman, Sachs & Co., in the case of the Secondary Transactions Prospectus, when
any supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you, in the case of the Public Offering Prospectus, or Goldman, Sachs &
Co., in the case of the Secondary Transactions Prospectus, with copies thereof;
to cause the Registration Statement to remain in effect as to the Shares for so
long as the Representatives may deem necessary in order to complete the
distribution of the Shares and to cause the Registration Statement (and, if
requested by Goldman, Sachs & Co. in order to register under the Act Shares for
offer and sale in secondary transactions, one or more additional registration
statements under the Act) to remain in effect as to the Shares for so long as
Goldman, Sachs & Co. may deem necessary in order to facilitate secondary
transactions therein (any reference herein to the Registration Statement or the
Prospectus shall be deemed to refer to and include such additional registration
statement or the form of prospectus included therein (in the form first filed
pursuant to Rule 424(b) under the Act)); to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Filed Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale (whether in the underwritten
public offering or in secondary transactions) under the securities laws of such
jurisdictions as you may request and to comply with
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<PAGE> 10
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares or to facilitate secondary transactions in the Shares, provided that
in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Public Offering Prospectus and Goldman, Sachs &
Co. with copies of the Secondary Transactions Prospectus in New York City in
such quantities as you or Goldman, Sachs & Co., as applicable, may reasonably
request, and, if the delivery of a prospectus is required at any time in
connection with the offering or sale of the Shares by the Underwriters (whether
in the underwritten public offering or in secondary transactions) and if at such
time any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Filed Prospectus in order to comply with
the Act, to notify you and upon your request to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as you
may reasonably request of an amendment to the Registration Statement or an
amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the Shares
at any time nine months or more after the time of issue of the Prospectus, upon
your request but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many copies as you may from time to time reasonably request
of such amended Registration Statement or amended Prospectus or supplement;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder and
under the International Underwriting Agreement, any securities of the Company
that are substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent the
right to receive, Stock or any such substantially similar securities (other than
pursuant to employee stock option plans existing on, or upon the conversion or
exchange of convertible or exchangeable securities outstanding as of, the date
of this Agreement), without your prior written consent;
(f) To furnish to its shareholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, shareholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you, and for so long as Goldman, Sachs &
Co. may offer or sell the Shares in secondary transactions to furnish to
Goldman, Sachs & Co., copies of all reports or other communications (financial
or other) furnished to shareholders, and to deliver to you, and for so long as
Goldman, Sachs & Co. may offer or sell the Shares in secondary transactions to
deliver to Goldman, Sachs &
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Co., (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any inter-dealer
quotation system or national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you and, for
so long as Goldman, Sachs & Co. may offer or sell the Shares in secondary
transactions, Goldman, Sachs & Co. may from time to time reasonably request
(such financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in reports
furnished to its shareholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement and the International Underwriting Agreement and from
the concurrent offering of debt securities (the "Concurrent Offering") in the
manner specified in the Public Offering Prospectus under the caption "Use of
Proceeds";
(i) To use its best efforts to list for quotation the Shares on the
National Association of Securities Dealers Automated Quotations National Market
System ("NASDAQ");
(j) To furnish or cause to be furnished to you upon your request, each time
the Registration Statement or the Prospectus shall be amended or supplemented,
written opinions of counsel for the Company specified in Section 8 hereof, a
letter from the independent accountants who have certified the financial
statements included in the Registration Statement as then amended and
certificates of officers of the Company, in each case in form and substance
satisfactory to you, all to the effect specified in subsections (c), (d), (e),
(g) and (m), respectively, of Section 8 hereof (as modified to relate to the
Registration Statement and the Prospectus as then amended or supplemented);
(k) To file with the Commission such reports on Form SR as may be required
by Rule 463 under the Act; and
(l) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act.
7. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, the International Underwriting Agreement, the
Agreement between Syndicates, the Selling Agreement, the Blue Sky Memorandum,
closing documents (including compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Shares; (iii)
all expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 6(b) hereof, including
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on NASDAQ; (v)
the filing fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the NASD of the
terms of the sale of the Shares; (vi) the cost of preparing stock certificates;
(vii) the cost and charges of any transfer agent or registrar; and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
Each Selling Shareholder will pay or cause to be paid all costs and expenses
incident to the performance of such Selling Shareholder's obligations hereunder
which are not otherwise specifically provided for in this Section, including (i)
any fees and
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expense of counsel for such Selling Shareholder and (ii) all expenses and taxes
incident to the sale and delivery of the Shares to be sold by such Selling
Shareholder to the Underwriters hereunder. In connection with clause (ii) of the
preceding sentence, Goldman, Sachs & Co. agrees to pay New York State stock
transfer tax, and the Selling Shareholder agrees to reimburse Goldman, Sachs &
Co. for associated carrying costs if such tax payment is not rebated on the day
of payment and for any portion of such tax payment not rebated. It is
understood, however, that the Company shall bear, and the Selling Shareholders
shall not be required to pay, except as provided in this Section, and Sections
9, 9A and 12 hereof, the cost of any other matters not directly relating to the
sale and purchase of the Shares pursuant to this Agreement and that the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
8. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Shareholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Shareholders shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The U.S. Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 6(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have furnished
to you such opinion or opinions (a draft of each such opinion is attached as
Annex II(a) hereto), dated such Time of Delivery, with respect to the matters
covered in paragraphs (i), (ii), (vi) and (xii) of subsection (c) below as well
as such other related matters as you may reasonably request, and such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters;
(c) Preston Gates & Ellis, counsel for the Company, shall have furnished to
you their written opinion (a draft of such opinion is attached as Annex II(b)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation under the laws of the State of Washington, with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
(including the Shares being delivered at such Time of Delivery) have been
duly and validly authorized and issued and are fully paid and
nonassessable; and the Shares conform to the description of the Stock
contained in the Prospectus;
(iii) The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
jurisdiction in which it owns or leases properties or conducts any business
so as to require such qualification, other than such jurisdictions in which
the failure to be so qualified would not result in a Material Adverse
Effect (such counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of matters of
fact upon certificates of officers of the Company,
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provided that such counsel shall state that they believe that both you and
they are justified in relying upon such opinions and certificates);
(iv) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; and all of the issued
shares of capital stock or partnership interests of each Significant
Subsidiary have been duly and validly authorized and issued, are fully paid
and non-assessable, and (except for minority interests representing less
than 10% of such Significant Subsidiary) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims other than liens granted pursuant to the Senior Secured Facilities
(such counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect to matters of fact
upon certificates of officers of the Company or its Significant
Subsidiaries, provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates);
(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse Effect; and,
to the best of such counsel's knowledge and other than as set forth in the
Prospectus, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) This Agreement and the International Underwriting Agreement have
been duly authorized, executed and delivered by the Company;
(vii) The issue and sale of the Shares being delivered at such Time of
Delivery by the Company and the compliance by the Company with all of the
provisions of this Agreement and the International Underwriting Agreement
and the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, shareholders agreement,
registration rights agreement or other material agreement or instrument
known to such counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of
the provisions of the Articles of Incorporation or By-laws of the Company
or any statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties;
(viii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries and, in the case
of any court, known to such counsel is required for the issue and sale of
the Shares or the consummation by the Company of the transactions
contemplated by this Agreement and the International Underwriting
Agreement, except the registration under the Act of the Shares, and such
consents, approvals, authorizations, registrations or qualifications as may
be required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters and the International Underwriters;
(xi) Neither the Company nor any of its Significant Subsidiaries is
(a) in violation of its Articles or Certificate of Incorporation, as the
case may be, or By-laws or (b) in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement, lease, shareholders
agreement, registration rights agreement or other agreement or instrument,
which such agreement or instrument is known to such counsel, to which it is
a party or by which it or any of
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<PAGE> 14
its properties may be bound, except, in the case of this clause (b), for
defaults that individually or in the aggregate would not have a Material
Adverse Effect;
(x) The statements set forth in the Prospectus under the caption
"Description of Capital Stock," insofar as they purport to constitute a
summary of the terms of the Stock and the Class B Common Stock, and under
the captions "Description of Indebtedness" and "Underwriting," insofar as
they purport to describe the provisions of the laws and documents to which
the Company or a subsidiary of the Company is a party referred to therein
are accurate, complete and fair in all material respects;
(xi) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act; and
(xii) The Registration Statement and the Filed Prospectus and any
further amendments and supplements thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related
schedules or other financial data therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder, although
they do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, except for those referred to in the opinion in subsection (x)
of this Section 8(c).
In addition, such counsel shall state that nothing has come to their
attention that would cause them to believe that, as of its effective date,
the Registration Statement or any further amendment thereto made by the
Company prior to such Time of Delivery (other than the financial statements
and related schedules or other financial data therein, as to which such
counsel need express no belief) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of its
date, the Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules or other financial data therein, as to
which such counsel need express no belief) contained an untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules or other
financial data therein, as to which such counsel need express no belief)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and they do not
know of any amendment to the Registration Statement required to be filed or
of any contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be described in the
Registration Statement or the Filed Prospectus which are not filed or
described as required.
(d) A Senior Vice President of the Company responsible for real estate
matters shall furnish to you a certificate on behalf of the Company, dated such
Time of Delivery, in form and substance satisfactory to you, stating that to the
best of his knowledge and without any independent investigation (i) the Company
and its subsidiaries have valid title in fee simple to all real property owned
by them, in each case free and clear of all liens, encumbrances and defects
except those that are described in the Prospectus and those that could not
reasonably be expected to have a Material Adverse Effect; and (ii) any real
property and buildings held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as could not reasonably be expected to have a Material Adverse Effect;
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(e) Gurman, Blask & Freedman Chartered, regulatory counsel for the Company,
shall have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(c) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) None of the Company or any of its subsidiaries has failed to
obtain any Permit from the FCC which is material to the conduct of the
Company's or such subsidiary's business. The Company and its subsidiaries
have all Permits from the FCC necessary to own their respective properties
and to conduct their respective telecommunications businesses in the manner
described in the Prospectus, which Permits are material to the conduct of
the Company's or such subsidiary's business;
(ii) The compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement and the consummation
of the transactions herein and therein contemplated will not result in any
conflict with or result in a breach or violation of the Communications Act
or the Commission's Rules or any Permit issued to the Company or any of its
subsidiaries, as the case may be, under or pursuant to authority granted
under the Communications Act;
(iii) No consent, approval, authorization, order, registration or
qualification under the Communications Act or the Commission's Rules is
required for the sale of the Shares as described in the Prospectus or the
consummation by the Company of the transactions contemplated by this
Agreement and the International Underwriting Agreement;
(iv) Other than as set forth or contemplated in the Prospectus, such
counsel does not know of any legal or governmental proceedings pending
before the FCC to which the Company or any of its subsidiaries is a party
or of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; and such counsel does not know of any such
proceedings that are threatened or contemplated by the FCC; and
(v) The statements set forth in the Prospectus under the captions
"Risk Factors -- Governmental Regulation," "Business -- Competition" and
"Business -- Governmental Regulation," insofar as they purport to describe
the provisions of the Communications Act and the Commission's Rules and
documents to which the Company or a subsidiary of the Company is a party
referred to therein are accurate, complete and fair in all material
respects;
(f) The respective counsel for each of the Selling Shareholders, as
indicated in Schedule II hereto, each shall have furnished to you their written
opinion with respect to each of the Selling Shareholders for whom they are
acting as counsel, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) A Custody Agreement and Power of Attorney has been duly executed
and delivered by such Selling Shareholder and constitutes a valid and
binding agreement of such Selling Shareholder in accordance with its terms;
(ii) This Agreement and the International Underwriting Agreement have
been duly executed and delivered by or on behalf of such Selling
Shareholder; and the sale of the Shares to be sold by such Selling
Shareholder hereunder and thereunder and the compliance by such Selling
Shareholder with all of the provisions of this Agreement and the
International Underwriting Agreement and the Custody Agreement and Power of
Attorney and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument known to such counsel to which such Selling Shareholder is a
party or by which such Selling Shareholder is bound, or to which any of the
property or assets of such Selling Shareholder is subject, nor will such
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action result in any violation of the provisions of the Articles or
Certificate of Incorporation, as the case may be, or By-laws of such
Selling Shareholder if such Selling Shareholder is a corporation, the
partnership agreement of such Selling Shareholder if such Selling
Shareholder is a partnership or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction
over such Selling Shareholder or the property of such Selling Shareholder;
(iii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the sale of the Shares or the consummation of the transactions
contemplated by this Agreement and the International Underwriting Agreement
in connection with the Shares to be sold by such Selling Shareholder
hereunder or thereunder, except which have been duly obtained and are in
full force and effect, such as have been obtained under the Act and such as
may be required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of such Shares by the
Underwriters and the International Underwriters;
(iv) Immediately prior to such Time of Delivery such Selling
Shareholder had valid title to the Shares to be sold at such Time of
Delivery by such Selling Shareholder under this Agreement and the
International Underwriting Agreement, free and clear of all liens,
encumbrances, equities or claims, and full right, power and authority to
sell, assign, transfer and deliver the Shares to be sold by such Selling
Shareholder hereunder and thereunder; and
(v) Valid title to such Shares, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the
several Underwriters or International Underwriters, as the case may be.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States and in
rendering the opinion in subparagraph (iv) and (v) such counsel may rely
upon a certificate of such Selling Shareholder in respect of matters of
fact as to ownership of, and liens, encumbrances, equities or claims on the
Shares sold by such Selling Shareholder, provided that such counsel shall
state that they believe that both you and they are justified in relying
upon such certificate;
(g) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Arthur Andersen LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(h)(i) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included in the
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capital stock, partnership interests, short-term debt or long-term
debt of the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in Clause (i) or
(ii), is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the
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<PAGE> 17
Shares being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Public Offering Prospectus;
(i) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on NASDAQ; (iii) a
general moratorium on commercial banking activities declared by either Federal
or New York or Washington State authorities; or (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event specified
in this Clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Public Offering Prospectus;
(j) The Shares to be sold at such Time of Delivery shall have been duly
listed for quotation on NASDAQ;
(k) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from each of the shareholders listed on Schedule III
substantially to the effect set forth in Section 6(e) hereof in form and
substance satisfactory to you;
(l) The Company shall have complied with the provisions of Section 6(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(m) The Company and each of the Selling Shareholders shall have furnished
or caused to be furnished to you at such Time of Delivery certificates of
officers of the Company and of the Selling Shareholders, respectively,
satisfactory to you as to the accuracy of the representations and warranties of
the Company and each of the Selling Shareholders, respectively, herein at and as
of such Time of Delivery, as to the performance by the Company and each of the
Selling Shareholders of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery, and as to such other matters as
you may reasonably request, and the Company shall have furnished or caused to be
furnished certificates as to the matters set forth in subsections (a) and (h) of
this Section, and as to such other matters as you may reasonably request.
9. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
International Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary International Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Goldman, Sachs & Co. expressly for use therein.
(b) Each of the Selling Shareholders severally and not jointly will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue
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<PAGE> 18
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary International Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, any preliminary
International Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Selling Shareholder expressly for
use therein; and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that such Selling Shareholder shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary
International Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Goldman, Sachs &
Co. expressly for use therein; provided, further, that the liability of a
Selling Shareholder pursuant to this subsection (b) shall not exceed the product
of the number of Shares sold by such Selling Shareholder and the initial public
offering price of the Shares as set forth in the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Shareholder against any losses, claims, damages or liabilities, joint or
several, to which the Company or such Selling Shareholder may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary International Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, any preliminary
International Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Goldman, Sachs
& Co. expressly for use therein; and will reimburse the Company and each Selling
Shareholder for any legal or other expenses reasonably incurred by the Company
or such Selling Shareholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment
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<PAGE> 19
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 9 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (d) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Shareholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations (including any
material prejudice as a result of any failure to give notice as required by
subsection (d) above). The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Shares purchased under this Agreement (before deducting expenses)
received by the Company and the Selling Shareholders in the underwritten public
offering bear to the total underwriting discounts and commissions received by
the Underwriters with respect to the Shares purchased under this Agreement, in
each case as set forth in the table on the cover page of the Public Offering
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Shareholders on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, each of the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection (e)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (e). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and no Selling Shareholder shall be required to
contribute any amount in excess of the product of the number of Shares sold by
such Selling Shareholder and the initial public offering price of the Shares as
set forth in the Prospectus. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
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<PAGE> 20
(f) The obligations of the Company and the Selling Shareholders under this
Section 9 shall be in addition to any liability which the Company and the
respective Selling Shareholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 9 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company or any Selling Shareholder within the meaning of the Act.
9A. (a) The Company will indemnify and hold harmless the QIU against any
losses, claims, damages or liabilities, joint or several, to which the QIU may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary International
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
QIU for any legal or other expenses reasonably incurred by the QIU in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary
International Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the QIU expressly for use therein.
The Company will also indemnify and hold harmless the QIU from and against
any and all losses, claims, damages, liabilities and judgments incurred as a
result of the QIU's participation as a "qualified independent underwriter"
within the meaning of Schedule E to the By-Laws of the National Association of
Securities Dealers, Inc. in connection with the offering of the Shares;
provided, however, that to the extent that any such loss, claim, damage,
liability or judgment is found in a final judgment by a court of competent
jurisdiction, not subject to further appeal, to have resulted from the willful
misconduct or gross negligence of the QIU, the Company shall not be liable to
that extent.
(b) Each of the Selling Shareholders severally and not jointly will
indemnify and hold harmless the QIU against any losses, claims, damages or
liabilities, joint or several, to which the QIU may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary International Prospectus, the Registration Statement
or the Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, any preliminary International Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Selling Shareholder expressly for use therein; and will
reimburse the QIU for any legal or other expenses reasonably incurred by the QIU
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that such Selling Shareholder shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary International Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in
20
<PAGE> 21
reliance upon and in conformity with written information furnished to the
Company by the QIU expressly for use therein; provided, further, that the
liability of a Selling Shareholder pursuant to this subsection (b) shall not
exceed the product of the number of Shares sold by such Selling Shareholder and
the initial public offering price of the Shares as set forth in the Prospectus.
(c) Promptly after receipt by the QIU under subsections (a) or (b) above of
notice of the commencement of any action, the QIU shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to the QIU otherwise than under such subsection. In
case any such action shall be brought against the QIU and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to the QIU (who shall not, except with the
consent of the QIU, be counsel to the indemnifying party), and, after notice
from the indemnifying party to the QIU of its election so to assume the defense
thereof, the indemnifying party shall not be liable to the QIU under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by the QIU, in connection with the defense
thereof other than reasonable costs of investigation; provided, that, if
indemnity is sought pursuant to the second paragraph of Section 9A(a), then the
indemnifying party shall be liable for the reasonable fees and expenses of not
more than one separate counsel (in addition to any necessary local counsel) for
the QIU in its capacity as a "qualified independent underwriter" if, in the
opinion of counsel to the QIU, there may exist a conflict of interest between
the QIU and the indemnifying or other indemnified parties. In the case of any
such separate counsel for the QIU, such counsel shall be designated in writing
by the QIU. The indemnifying party shall not, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the QIU is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the QIU from all liability arising out of such action or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act, by or on behalf of QIU.
(d) If the indemnification provided for in this Section 9A is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) in respect of any losses, claims, damages, liabilities or judgments referred
to therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities and
judgments (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on the one hand
and the QIU on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, the
Selling Shareholders, the Underwriters and the QIU in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable considerations
(including any material prejudice as a result of any failure to give notice as
required by subsection (c) above). The relative benefits received by the Company
and the Selling Shareholders and the QIU shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Shareholders, as set forth in
the cover page of the Prospectus, and the total fee received by the QIU, as set
forth in Section 3 hereof, bear to the total price to the public of the Shares.
The relative fault of the Company and the Selling Shareholders and the QIU shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact,
relates to information supplied by the Company or the Selling Shareholders and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission
21
<PAGE> 22
and whether the QIU's recommendation, advice or services as QIU pursuant to
Section 3 hereof involved any willful misconduct or gross negligence on the part
of the QIU.
The Company, each of the Selling Shareholders and the QIU agree that it
would not be just and equitable if contribution pursuant to this Section 9A(d)
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages, liabilities or judgments referred to above in
this subsection (d) shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9A, the QIU shall not be required
to contribute any amount in excess of the amount by which its fee received for
acting as QIU exceeds the amount of any damages which the QIU has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission or by reason of alleged willful misconduct or gross
negligence and no Selling Shareholder shall be required to contribute any amount
in excess of the product of the number of Shares sold by such Selling
Shareholder and the initial public offering price of the Shares as set forth in
the Prospectus. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and the Selling Shareholders under this
Section 9A shall be in addition to any liability which the Company and the
Selling Shareholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls the QIU within the meaning
of the Act.
10. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to you to
purchase such Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for the
purchase of such Shares, or the Company notifies you that it has so arranged for
the purchase of such Shares, you or the Company shall have the right to postpone
such Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the
22
<PAGE> 23
aggregate number of such Shares which remains unpurchased exceeds one-eleventh
of the aggregate number of all the Shares to be purchased at such Time of
Delivery, or if the Company shall not exercise the right described in subsection
(b) above to require non-defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then this Agreement (or, with respect to
the Second Time of Delivery, the obligations of the Underwriters to purchase and
of the Company to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Shareholders, except for the expenses to be borne by the Company and the
Selling Shareholders and the Underwriters as provided in Section 7 hereof and
the indemnity and contribution agreements in Sections 9 and 9A hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Shareholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or the QIU or any controlling person of
any Underwriter or the QIU, or the Company, or any of the Selling Shareholders,
or any officer or director or controlling person of the Company, or any
controlling person of any Selling Shareholder, and shall survive delivery of and
payment for the Shares.
Anything herein to the contrary notwithstanding, the indemnity agreements
of the Company in subsection (a) of Sections 9 and 9A hereof, the
representations and warranties in subsections (b) and (c) of Section 1 hereof
and any representation or warranty as to the accuracy of the Registration
Statement or the Prospectus contained in any certificate furnished by the
Company pursuant to Section 8 hereof, insofar as they may constitute a basis for
indemnification for liabilities (other than payment by the Company of expenses
incurred or paid in the successful defense of any action, suit or proceeding)
arising under the Act, shall not extend to the extent of any interest therein of
a controlling person or partner of an Underwriter or the QIU who is a director,
officer or controlling person of the Company when the Registration Statement has
become effective or who, with his or her consent, is named in the Registration
Statement as about to become a director of the Company, except in each case to
the extent that an interest of such character shall have been determined by a
court of appropriate jurisdiction as not against public policy as expressed in
the Act. Unless in the opinion of counsel for the Company the matter has been
settled by controlling precedent, the Company will, if a claim for such
indemnification is asserted, submit to a court of appropriate jurisdiction the
question of whether the extension of the indemnification by the Company to such
interest is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
12. If this Agreement shall be terminated pursuant to Section 10 hereof,
neither the Company nor the Selling Shareholders shall then be under any
liability to any Underwriter or the QIU except as provided in Sections 7, 9 and
9A hereof; but, if for any other reason, any Shares are not delivered by or on
behalf of the Company and the Selling Shareholders as provided herein, the
Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company and
the Selling Shareholders shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Sections 7, 9 and 9A hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives; and in all dealings with any Selling Shareholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Shareholder made or given by any
or all of the Attorneys-in-Fact for such Selling Shareholder.
23
<PAGE> 24
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; if to the QIU shall be delivered or sent by mail, telex or facsimile
transmission to DLJ, 277 Park Avenue, New York, New York 10172, Attention:
Syndicate Department; if to any Selling Shareholder shall be delivered or sent
by mail, telex or facsimile transmission to counsel for such Selling Shareholder
at its address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 9(c) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company or the Selling Shareholders by you upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the QIU, the Company and the Selling Shareholders and, to
the extent provided in Sections 9, 9A and 11 hereof, the officers and directors
of the Company and each person who controls the Company or any Selling
Shareholder or any Underwriter or the QIU, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
24
<PAGE> 25
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and for each of the Representatives plus one
for each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
each of the Selling Shareholders. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters (U.S. Version), the form of
which shall be submitted to the Company and the Selling Shareholders for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
Western Wireless Corporation
By:
--------------------------------------
Name:
Title:
Media/Communications Investors Limited
Partnership
Media/Communications Partners II
Limited
Partnership
M.L. Media Opportunity Partners, L.P.
John C. Rathe Trust
By:
--------------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf
of each of the Selling Shareholders
named in Schedule II to this Agreement
Accepted as of the date hereof:
Goldman, Sachs & Co.
Donaldson, Lufkin & Jenrette
Securities
Corporation
Merrill Lynch, Pierce, Fenner &
Smith
Incorporated
Salomon Brothers Inc
By:
- -----------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the
Underwriters
Donaldson, Lufkin & Jenrette
Securities Corporation
By:
- -----------------------------------
Name:
Title:
25
<PAGE> 26
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF
OPTIONAL SHARES
TOTAL NUMBER TO BE PURCHASED
OF FIRM SHARES IF MAXIMUM
TO BE OPTION
UNDERWRITER PURCHASED EXERCISED
- -------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
Goldman, Sachs & Co........................................... 1,463,000 219,450
Donaldson, Lufkin & Jenrette Securities Corporation........... 1,463,000 219,450
Merrill Lynch, Pierce, Fenner & Smith Incorporated............ 1,463,000 219,450
Salomon Brothers Inc.......................................... 1,463,000 219,450
Bear, Stearns & Co., Inc. .................................... 220,000 33,000
Cowen & Company............................................... 132,000 19,800
Dain Bosworth Incorporated.................................... 132,000 19,800
D.A. Doudson & Co............................................. 132,000 19,800
Dillon, Read & Co., Inc. ..................................... 220,000 33,000
EVEREN Securities, Inc. ...................................... 220,000 33,000
Gerard Klover Mathson & Co., L.L.C. .......................... 132,000 19,800
Hook Securities Corp.......................................... 132,000 19,800
Edward D. Jones & Co. ........................................ 132,000 19,800
Lazard Freres & Co., LLC...................................... 220,000 33,000
Legg Mason Wood Walker Incorporated........................... 132,000 19,800
J.P. Morgan Securities Inc. .................................. 220,000 33,000
Paine Webber Incorporated..................................... 220,000 33,000
Ragen MacKenzie Incorporated.................................. 132,000 19,800
Smith Barney Inc. ............................................ 220,000 33,000
Stephans Inc. ................................................ 132,000 19,800
Wasserskin Perella Securities, Inc. .......................... 220,000 33,000
--------- ---------
Total............................................... 8,800,000 1,320,000
========= =========
</TABLE>
S-1
<PAGE> 27
SCHEDULE II
<TABLE>
<CAPTION>
TOTAL NUMBER
OF FIRM SHARES
TO BE SOLD
--------------
<S> <C>
The Company................................................................... 7,211,840
The Selling Shareholder(s):
Media/Communications Investors Limited Partnership(a)....................... 32,110
Media/Communications Partners II Limited Partnership(a)..................... 678,960
M.L. Media Opportunity Partners, L.P.(b).................................... 872,130
John C. Rathe Trust(c)...................................................... 4,960
-------
Total............................................................... 8,800,000
=======
</TABLE>
- ---------------
(a) This Selling Shareholder is represented by Edwards & Angell and has
appointed John W. Stanton and Alan R. Bender, and each of them, as the
Attorneys-in-Fact for such Selling Shareholder.
(b) This Selling Shareholder is represented by Proskauer Rose Goetz & Mendelsohn
LLP and has appointed John W. Stanton and Alan R. Bender, and each of them,
as the Attorneys-in-Fact for such Selling Shareholder.
(c) This Selling Shareholder is represented by Preston Gates & Ellis and has
appointed John W. Stanton and Alan R. Bender, and each of them, as the
Attorneys-in-Fact for such Selling Shareholder.
S-2
<PAGE> 28
SCHEDULE III
John W. Stanton
Theresa E. Gillespie
Hellman & Friedman Capital Partners II, L.P.
H&F Orchard Partners, L.P.
H&F International Partners, L.P.
Bayer Investment Group
M.L. Media Opportunity Partners L.P.
Media/Communications Partners II Limited Partnership
Media/Communications Investors Limited Partnership
The Goldman Sachs Group, L.P.
GS Capital Partners, L.P.
Bridge Street Fund 1992, L.P.
Stone Street Fund 1992, L.P.
Odyssey Partners, L.P.
Providence Media Partners, L.P.
David A. Bayer
Donald Guthrie
Robert A. Stapleton
Mikal J. Thomsen
Alan R. Bender
Cregg B. Baumbaugh
S-3
<PAGE> 29
ANNEX I
Pursuant to Section 8(g) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included in the
Prospectus or the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the related
published rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim financial
statements, selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as indicated
in their reports thereon, copies of which have been furnished separately to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus as indicated in
their reports thereon copies of which have been separately furnished to the
Representatives and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the Act and the
related published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an examination in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
in the Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) (i) the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
I-1
<PAGE> 30
published rules and regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included in the
Prospectus;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to in
Clause (B) were not determined on a basis substantially consistent with the
basis for the audited consolidated financial statements included in the
Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest financial statements included in the Prospectus)
or any increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
shareholders' equity or other items specified by the Representatives, or
any increases in any items specified by the Representatives, in each case
as compared with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated net revenues or operating profit
or the total or per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any items specified
by the Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for decreases or
increases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and (vi)
above, they have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information specified by
the Representatives, which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus, or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
I-2
<PAGE> 1
Exhibit 1.2
WESTERN WIRELESS CORPORATION
CLASS A COMMON STOCK, NO PAR VALUE
UNDERWRITING AGREEMENT
(INTERNATIONAL VERSION)
----------------------------------
May 22, 1996
Goldman Sachs International,
Donaldson, Lufkin & Jenrette Securities Corporation,
Merrill Lynch International,
Salomon Brothers International Limited,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman Sachs International,
Peterborough Court,
133 Fleet Street,
London EC4A 2BB, England.
Ladies and Gentlemen:
Western Wireless Corporation, a Washington corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 1,802,960 shares and, at the election of the Underwriters, up to additional
330,000 shares of Class A Common Stock, no par value, ("Stock") of the Company,
and the shareholders of the Company named in Schedule II hereto (the "Selling
Shareholders"), propose severally and not jointly, subject to the terms and
conditions stated herein, to sell to the Underwriters an aggregate of 397,040
shares of Stock. The aggregate of 2,200,000 shares to be sold by the Company and
the Selling Shareholders is herein called the "Firm Shares" and the aggregate of
330,000 additional shares to be sold by the Company is herein called the
"Optional Shares" (the Firm Shares and the Optional Shares that the Underwriters
elect to purchase pursuant to Section 2 hereof are herein collectively called
the "Shares").
It is understood and agreed to by all parties that the Company and the
Selling Shareholders are concurrently entering into an agreement, a copy of
which is attached hereto (the "U.S. Underwriting Agreement"), providing for the
sale by the Company and the Selling Shareholders of up to a total of 10,120,000
shares of Stock (the "U.S. Shares"), including the overallotment option
thereunder, through arrangements with certain underwriters in the United States
(the "U.S. Underwriters"), for whom Goldman, Sachs & Co., Donaldson, Lufkin &
Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers Inc are acting as representatives. Anything
herein or therein to the contrary notwithstanding, the respective closings under
this Agreement and the U.S. Underwriting Agreement are hereby expressly made
conditional on one another. The Underwriters hereunder and the U.S. Underwriters
are simultaneously entering into an Agreement between U.S. and International
Underwriting Syndicates (the "Agreement between Syndicates") which provides,
among other things, for the transfer of shares of Stock between the two
syndicates and for consultation by the Lead Managers hereunder with Goldman,
Sachs & Co. prior to exercising the rights of the Underwriters under Section 8
hereof. Two forms of prospectus are to be used in connection with the offering
and sale of shares of Stock contemplated by the foregoing, one relating to the
Shares hereunder and the other relating to the U.S. Shares. The latter form of
prospectus will be identical to the former except for certain substitute pages.
Except as used in Sections 2, 4, 5, 11 and 13 herein, and except as context may
otherwise require, references
<PAGE> 2
hereinafter to the Shares shall include all the shares of Stock which may be
sold pursuant to either this Agreement or the U.S. Underwriting Agreement, and
references herein to the "U.S. Prospectus" whether in preliminary or final form,
and whether as amended or supplemented, shall refer to the prospectus relating
to the Shares hereunder and references herein to the "International Prospectus"
whether in preliminary or final form, and whether as amended or supplemented,
shall refer to the prospectus relating to the International Shares. The U.S.
Prospectus and the International Prospectus are hereafter called the "Public
Offering Prospectus."
In addition, this Agreement incorporates by reference certain provisions
from the U.S. Underwriting Agreement (including the related definitions of
terms, which are also used elsewhere herein) and, for purposes of applying the
same, references (whether in these precise words or their equivalent) in the
incorporated provisions to the "Underwriters" shall be to the Underwriters
hereunder, to the "Shares" shall be to the Shares hereunder as just defined, to
"this Agreement" (meaning therein the U.S. Underwriting Agreement) shall be to
this Agreement (except where this Agreement is already referred to or as the
context may otherwise require) and to the representatives of the Underwriters or
to Goldman, Sachs & Co. shall be to the addressees of this Agreement and to
Goldman Sachs International ("GSI"), and, in general, all such provisions and
defined terms shall be applied mutatis mutandis as if the incorporated
provisions were set forth in full herein having regard to their context in this
Agreement as opposed to the U.S. Underwriting Agreement.
1. The Company and each of the several Selling Shareholders hereby make to
the Underwriters the same respective representations, warranties and agreements
as are set forth in Section 1 of the U.S. Underwriting Agreement, which Section
is incorporated herein by this reference.
2. Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Shareholders agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and each of the Selling Shareholders,
at a purchase price per share of $22.15, the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Firm Shares to be sold by the Company and each of the
Selling Shareholders as set forth opposite their respective names in Schedule II
hereto by a fraction, the numerator of which is the aggregate number of Firm
Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
aggregate number of Firm Shares to be purchased by all the Underwriters from the
Company and all the Selling Shareholders hereunder and (b) in the event and to
the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 330,000 Optional Shares, at the purchase price per share
set forth in clause (a) of this Section 2 for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 5
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
2
<PAGE> 3
3. The Company hereby confirms its engagement of Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJ") as, and DLJ hereby confirms its
agreement with the Company to render services as, a "qualified independent
underwriter" within the meaning of Section 2(o) of Schedule E to the By-Laws of
the National Association of Securities Dealers, Inc. (the "NASD") with respect
to the offering and sale of the Shares. DLJ, solely in its capacity as qualified
independent underwriter and not otherwise, is referred to herein as the "QIU."
As compensation for the services of the QIU hereunder, the Company agrees to pay
the QIU $1,000 on the Closing Date. The price at which the Shares will be sold
to the public shall not be higher than the maximum price recommended by DLJ
acting as QIU.
4. Upon the authorization by GSI of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Public Offering Prospectus and in the forms of
Agreement among Underwriters (International Version) and Selling Agreements,
which have been previously submitted to the Company by you. Each Underwriter
hereby makes to and with the Company and the Selling Shareholders the
representations and agreements of such Underwriter as a member of the selling
group contained in Sections 3(d) and 3(e) of the form of Selling Agreements.
5. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company and the Selling Shareholders, shall be delivered by or on
behalf of the Company and the Selling Shareholders to Goldman, Sachs & Co. for
the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by certified or official bank check
or checks, payable to the order of the Company and each of the Selling
Shareholders in immediately available (same-day) funds. The Company will cause
the certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004 (the "Designated Office"). The time and date of
such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m.,
New York City time, on May 29, 1996 or such other time and date as Goldman,
Sachs & Co., the Company and the Selling Shareholders may agree upon in writing,
and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date
specified by you in the written notice given by you of the Underwriters'
election to purchase such Optional Shares, or such other time and date as you
and the Company may agree upon in writing. Such time and date for delivery of
the Firm Shares is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery."
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 8 of the U.S. Underwriting Agreement,
including the cross-receipt for the Shares and any additional documents
requested by the Underwriters pursuant to Section 8(m) of the U.S. Underwriting
Agreement, will be delivered at the offices of Preston Gates & Ellis, 701 Fifth
Avenue, Seattle, Washington 98104-7078 (the "Closing Location"), and the Shares
will be delivered at the Designated Office, all at such Time of Delivery. A
meeting will be held at the Closing Location at 1:00 p.m., Seattle time, on the
New York Business Day next preceding such Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 5, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
6. The Company hereby makes with the Underwriters the same agreements as
are set forth in Section 6 of the U.S. Underwriting Agreement, which Section is
incorporated herein by this reference.
3
<PAGE> 4
7. The Company, each of the Selling Shareholders, and the Underwriters
hereby agree with respect to certain expenses on the same terms as are set forth
in Section 7 of the U.S. Underwriting Agreement, which Section is incorporated
herein by this reference.
8. Subject to the provisions of the Agreement between Syndicates, the
obligations of the Underwriters hereunder shall be subject, in their discretion,
at each Time of Delivery to the condition that all representations and
warranties and other statements of the Company and of the Selling Shareholders
herein are, at and as of such Time of Delivery, true and correct, the condition
that the Company and the Selling Shareholders shall have performed all of their
respective obligations hereunder theretofore to be performed, and additional
conditions identical to those set forth in Section 8 of the U.S. Underwriting
Agreement, which Section is incorporated herein by this reference.
9. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
International Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary International Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through GSI expressly for use therein.
(b) Each of the Selling Shareholders, severally and not jointly, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary International Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, any preliminary
International Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Selling Shareholder expressly for
use therein; and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that such Selling Shareholder shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Goldman, Sachs & Co. expressly for use therein; provided, further, that
the liability of a Selling Shareholder pursuant to this subsection (b) shall not
exceed the product of the number of Shares sold by such Selling Shareholder and
the initial public offering price of the Shares as set forth in the Prospectus.
4
<PAGE> 5
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Shareholder against any losses, claims, damages or liabilities, joint or
several, to which the Company or such Selling Shareholder may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary International Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, any preliminary
International Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through GSI expressly
for use therein; and will reimburse the Company and each Selling Shareholder for
any legal or other expenses reasonably incurred by the Company or such Selling
Shareholder in connection with investigating or defending any such action or
claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(e) If the indemnification provided for in this Section 9 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (d) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Shareholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant
5
<PAGE> 6
equitable considerations (including any material prejudice as a result of any
failure to give notice as required by subsection (d) above). The relative
benefits received by the Company and the Selling Shareholders on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders in the underwritten public offering bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, in each case as set forth in the table on
the cover page of the Public Offering Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Selling
Shareholders on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, each of the Selling
Shareholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (e). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (e),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission and no
Selling Shareholder shall be required to contribute any amount in excess of the
product of the number of Shares sold by such Selling Shareholder and the initial
public offering price of the Shares as set forth in the Prospectus. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in this
subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Shareholders under this
Section 9 shall be in addition to any liability which the Company and the
respective Selling Shareholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 9 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company or any Selling Shareholder within the meaning of the Act.
9A. (a) The Company will indemnify and hold harmless the QIU against any
losses, claims, damages or liabilities, joint or several, to which the QIU may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary International
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state herein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
QIU for any legal or other expenses reasonably incurred by the QIU in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission
6
<PAGE> 7
made in any Preliminary Prospectus, any preliminary International Prospectus,
the Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by the QIU expressly for use therein.
The Company will also indemnify and hold harmless the QIU from and against
any and all losses, claims, damages, liabilities and judgments incurred as a
result of the QIU's participation as a "qualified independent underwriter"
within the meaning of Schedule E to the By-Laws of the National Association of
Securities Dealers, Inc. in connection with the offering of the Shares;
provided, however, that to the extent that any such loss, claim, damage,
liability or judgment is found in a final judgment by a court of convenient
jurisdiction, not subject to further appeal, to have resulted from the willful
misconduct or gross negligence of the QIU, the Company shall not be liable to
that extent.
(b) Each of the Selling Shareholders severally and not jointly will
indemnify and hold harmless against any losses, claims, damages or liabilities
to which the QIU may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
International Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary International Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Selling
Shareholder expressly for use therein; and will reimburse the QIU for any legal
or other expenses reasonably incurred by the QIU in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that such Selling Shareholder shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, any
preliminary International Prospectus, the Registration Statement or the
Prospectus to any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the QIU
expressly for use therein; provided further, that the liability of a Selling
Shareholder pursuant to this subsection (b) shall not exceed the product of the
number of Shares sold by such Selling Shareholder and the initial public
offering price of the Shares as set forth in the Prospectus.
(c) Promptly after receipt by the QIU under subsection (a) or (b) above of
notice of the commencement of any action, the QIU shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to the QIU otherwise than under such subsection. In
case any such action shall be brought against the QIU and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to the QIU (who shall not, except with the
consent of the QIU, be counsel to the indemnifying party), and, after notice
from the indemnifying party to the QIU of its election so to assume the defense
thereof, the indemnifying party shall not be liable to the QIU under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by the QIU, in connection with the defense
thereof other than reasonable costs of investigation; provided, that, if
indemnity is sought pursuant to the second paragraph of Section 9A(a), then the
indemnifying party shall be liable for the reasonable fees and expenses of not
more than one separate counsel (in addition to any necessary local counsel) for
the QIU in its capacity as a "qualified independent underwriter", if, in the
opinion of counsel to the QIU, there may
7
<PAGE> 8
exist a conflict of interest between the QIU and the indemnifying or other
indemnified parties. In the case of any such separate counsel for the QIU, such
counsel shall be designated in writing by the QIU. The indemnifying party shall
not, without the written consent of the indemnifying party effect the settlement
or compromise of, or consent to the entry of any judgment with respect to any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the QIU is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the QIU form all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
QIU.
(d) If the indemnification provided for in this Section 9A is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) in respect of any losses, claims, damages, liabilities or judgments referred
to therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities and
judgments (i) in such proportion as appropriate to reflect the relative benefits
received by the Company ad the Selling Shareholders on the one hand and the QIU
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, the Selling
Shareholders, the Underwriters and the QIU in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations (including any
material prejudice as a result of any failure to give notice as required by
subsection (c) above). The relative benefits received by the Company and the
Selling Shareholders and the QIU shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company and the Selling Shareholders, as set forth in the cover page of the
Prospectus, and the total fee received by the QIU, as set forth in Section 3
hereof, bear to the total price to the public of the Shares. The relative fault
of the Company and the Selling Shareholders and the QIU shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the Company or the Selling Shareholders or the QIU and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission and whether the QIU's
recommendation, advice or services as QIU pursuant to Section 3 hereof involved
any willful misconduct or gross negligence on the part of the QIU.
The Company, each of the Selling Shareholders and the QIU agree that it
would not be just and equitable if contribution pursuant to this Section 9A(d)
were determined by pro rata allocation or any other method of allocation which
does not take account of the suitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages, liabilities or judgments referred to above in
this subsection (d) shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9A, the QIU shall not be required
to contribute any amount in excess of the amount by which its fee received for
acting as QIU exceeds the amount of any damages which the QIU has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission or by reason of alleged willful misconduct or gross
negligence and no Selling Shareholder shall be required to contribute any amount
in excess of the product of the number of Shares sold by such Selling
Shareholder and the initial public offering price of the Shares as set forth in
the Prospectus. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and the Selling Shareholders under this
Section 9A shall be in addition to any liability which the Company and the
Selling Shareholders may otherwise have
8
<PAGE> 9
and shall extend, upon the same terms and conditions, to each person, if any,
who controls the QIU within the meaning of the Act.
10. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to you to
purchase such Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for the
purchase of such Shares, or the Company notifies you that it has so arranged for
the purchase of such Shares, you or the Company shall have the right to postpone
such Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Shareholders, except
for the expenses to be borne by the Company and the Selling Shareholders and the
Underwriters as provided in Section 7 hereof and the indemnity and contribution
agreements in Sections 9 and 9A hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Shareholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or the QIU or any controlling person of
any Underwriter or the QIU, or the Company, or any of the Selling Shareholders,
or any officer or director or controlling person of the Company, or any
controlling person of any Selling Shareholder, and shall survive delivery of and
payment for the Shares.
Anything herein to the contrary notwithstanding, the indemnity agreements
of the Company in subsection (a) of Sections 9 and 9A hereof, the
representations and warranties in subsections (b)
9
<PAGE> 10
and (c) of Section 1 of the U.S. Underwriting Agreement incorporated by
reference herein and any representation or warranty as to the accuracy of the
Registration Statement or the Prospectus contained in any certificate furnished
by the Company pursuant to Section 8 hereof, insofar as they may constitute a
basis for indemnification for liabilities (other than payment by the Company of
expenses incurred or paid in the successful defense of any action, suit or
proceeding) arising under the Act, shall not extend to the extent of any
interest therein of a controlling person or partner of an Underwriter or the QIU
who is a director, officer or controlling person of the Company when the
Registration Statement has become effective or who, with his or her consent, is
named in the Registration Statement as about to become a director of the
Company, except in each case to the extent that an interest of such character
shall have been determined by a court of appropriate jurisdiction as not against
public policy as expressed in the Act. Unless in the opinion of counsel for the
Company the matter has been settled by controlling precedent, the Company will,
if a claim for such indemnification is asserted, submit to a court of
appropriate jurisdiction the question whether the extension of the
indemnification by the Company to such interest is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
12. If this Agreement shall be terminated pursuant to Section 10 hereof,
neither the Company nor the Selling Shareholders shall then be under any
liability to any Underwriter or the QIU except as provided in Sections 7, 9 and
9A hereof; but, if for any other reason, any Shares are not delivered by or on
behalf of the Company and the Selling Shareholders as provided herein, the
Company will reimburse the Underwriters through GSI for all out-of-pocket
expenses approved in writing by GSI, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company and
the Selling Shareholders shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Sections 7, 9 and 9A hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by GSI on behalf of you as the representatives of the
Underwriters; and in all dealings with any Selling Shareholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Shareholder made or given by any
or all of the Attorneys-in-Fact for such Selling Shareholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the Underwriters in care of GSI, Peterborough Court,
133 Fleet Street, London EC4A 2BB, England, Attention: Equity Capital Markets,
Telex No. 94012165, facsimile transmission No. (071) 774-1550; if to the QIU
shall be delivered or sent by mail, telex or facsimile transmission to DLJ, 277
Park Avenue, New York, New York 10172, Attention: Syndicate Department; if to
any Selling Shareholder shall be delivered or sent by mail, telex or facsimile
transmission to counsel for such Selling Shareholder at its address set forth in
Schedule II hereto; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 9(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company or the Selling
Shareholders by GSI upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the QIU, the Company and the Selling Shareholders and, to
the extent provided in Sections 9, 9A and 11 hereof, the officers and directors
of the Company and each person who controls the Company, any Selling
Shareholder, any Underwriter or the QIU, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any
10
<PAGE> 11
right under or by virtue of this Agreement. No purchaser of any of the Shares
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
15. Time shall be of the essence of this Agreement.
16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and one for each of the Lead Managers or Lead
Managing Underwriters plus one for each counsel and the Custodian, if any,
counterparts hereof, and upon the acceptance hereof by you, on behalf of each of
the Underwriters, this letter and such acceptance hereof shall constitute a
binding agreement among each of the Underwriters, the Company and each of the
Selling Shareholders. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth in a
form of Agreement among Underwriters (International Version), the form of which
shall be furnished to the Company and the Selling Shareholders for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.
11
<PAGE> 12
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Shareholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
Western Wireless Corporation
By:
------------------------------------
Name:
Title:
Media/Communications Investors Limited
Partnership
Media/Communications Partners II
Limited
Partnership
M.L. Media Opportunity Partners, L.P.
John C. Rathe Trust
By:
------------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf
of each
of the Selling Shareholders named in
Schedule II to this Agreement.
Accepted as of the date hereof:
Goldman Sachs International
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch International
Salomon Brothers International Limited
By: Goldman Sachs International
By:
----------------------------------
(Attorney-in-fact)
On behalf of each of the Underwriters
Donaldson, Lufkin & Jenrette
Securities Corporation
By:
--------------------------------------------------------
Name:
Title:
12
<PAGE> 13
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF
OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
- ------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Goldman, Sachs & Co.......................................... 440,000 66,000
Donaldson, Lufkin & Jenrette Securities Corporation.......... 440,000 66,000
Merrill Lynch International.................................. 440,000 66,000
Salomon Brothers International Limited....................... 440,000 66,000
Barclays de Zoete Wedd Limited............................... 110,000 16,500
Morgan Grenfell & Co. Limited................................ 110,000 16,500
Nomura International plc..................................... 110,000 16,500
Societe Generale............................................. 110,000 16,500
--------- -------
Total.............................................. 2,200,000 330,000
========= =======
</TABLE>
S-1
<PAGE> 14
SCHEDULE II
<TABLE>
<CAPTION>
TOTAL NUMBER OF
FIRM SHARES
TO BE SOLD
---------------
<S> <C>
The Company.................................................................. 1,802,960
The Selling Shareholder(s):
Media/Communications Investors Limited Partnership(a)...................... 8,028
Media/Communications Partners II Limited Partnership(a).................... 169,740
M.L. Media Opportunity Partners, L.P.(b)................................... 218,032
John C. Rathe Trust(c)..................................................... 1,240
-------
Total.............................................................. 2,200,000
=======
</TABLE>
- ---------------
(a) This Selling Shareholder is represented by Edwards & Angell and has
appointed John W. Stanton and Alan R. Bender, and each of them, as the
Attorneys-in-Fact for such Selling Shareholder.
(b) This Selling Shareholder is represented by Proskauer Rose Goetz & Mendelsohn
LLP and has appointed John W. Stanton and Alan R. Bender, and each of them,
as the Attorneys-in-Fact for such Selling Shareholder.
(c) This Selling Shareholder is represented by Preston Gates & Ellis and has
appointed John W. Stanton and Alan R. Bender, and each of them, as the
Attorneys-in-Fact for such Selling Shareholder.
S-2
<PAGE> 1
EXHIBIT 10.2
PCS 1900
PROJECT AND SUPPLY AGREEMENT
BETWEEN
WESTERN PCS CORPORATION
AND
NORTHERN TELECOM INC.
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TABLE OF CONTENTS
Page
1. DEFINITIONS.............................................................1
2. SCOPE...................................................................5
3. PURCHASE ORDERS.........................................................6
4. PRICE...................................................................7
5. PAYMENT.................................................................7
6. DELIVERY, RISK OF LOSS, TITLE..........................................12
7. WARRANTIES, REMEDIES AND LIMITATION OF WARRANTIES AND
REMEDIES AND DISCLAIMERS OF WARRANTIES AND LIABILITY...................13
8. FORCE MAJEURE..........................................................17
9. PATENT OR COPYRIGHT INFRINGEMENTS......................................17
10. SOFTWARE LICENSE.......................................................18
11. SOFTWARE UPDATES.......................................................19
12. REMEDIES...............................................................20
13. MICROWAVE RELOCATION...................................................23
14. ACCEPTANCE TESTING.....................................................24
15. COVERAGE, INTERFERENCE AND THIRD-PARTY FACILITIES......................25
16. REGULATORY COMPLIANCE..................................................25
17. CHANGES................................................................26
18. CONDITION OF INSTALLATION SITE(S)......................................27
19. RELEASE OF INFORMATION.................................................28
20. CONFIDENTIALITY........................................................28
21. INTERCONNECTION........................................................29
22. ANNEXES................................................................30
23. GENERAL................................................................31
ANNEXES
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PCS 1900
PROJECT AND SUPPLY AGREEMENT
AGREEMENT dated June 30, 1995, by and between Western PCS Corporation
(hereinafter referred to as "Buyer"), a Delaware corporation with offices
located at 330 120th Avenue, NE, Suite 200, Bellevue, Washington 98005 and
Northern Telecom Inc., a Delaware corporation with offices located at 2435 N.
Central Expressway, Richardson, Texas 75080 (hereinafter referred to as "NTI" or
"Seller").
WITNESSETH:
In consideration of the mutual promises and covenants hereinafter set forth, the
parties hereby agree as follows:
1. DEFINITIONS
As used herein, the following capitalized terms have the following
meanings:
1.1 "ADD-ON EQUIPMENT" shall mean Equipment other than that comprising
a portion of the Initial Network.
1.2 "BASE STATION CONTROLLER ('BSC')" shall mean Equipment providing
radio channel management between the Switch and the BTS.
1.3 "BASE STATION SUBSYSTEM ('BSS')" shall mean Equipment Comprised of
BSCs, BTSs, TRXs, TCUs, OMC-Rs and any other Equipment located at the BSS that
is an integral part of the BSS.
1.4 "BASE TRANSCEIVER STATION ('BTS')" shall mean Equipment, controlled
by the BSC, providing the radio link with mobile subscribers.
1.5 "BTA" shall mean basic trading area as defined by the FCC.
1.6 "COMMISSIONING" shall mean the successful on-site validation of
Equipment performance by Seller in accordance with the standard test procedures
of Seller and/or the applicable OEM Equipment vendor, as such procedures are
more fully described in Section 14.1 and Annex 3 of this Agreement.
1.7 "DOCUMENTATION" shall mean System documentation, whether in written
or electronic form, delivered to Buyer in the medium set forth in Buyer's
Purchase Order, such media being more fully described in Annex 7,
"Documentation." All Documentation delivered to Buyer shall be subject to any
copyright and confidentiality restrictions.
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1.8 "EQUIPMENT" shall mean either singularly or collectively, the
NTI-manufactured Hardware and Software products and components of OEM equipment
which are integrated into the Hardware during the manufacturing process.
"Equipment" includes, without limitation, Add-on Equipment, BSS Equipment,
Expansion Equipment, Merchandise, NSS Equipment and Switch Equipment.
"Equipment" shall also be deemed to apply to OEM Equipment, unless otherwise
expressly excluded in this Agreement and subject to the limitations set forth in
Section 2.1.4 hereof.
1.9 "EXPANSION" shall mean Add-on Equipment which requires Seller
engineering and Installation/Commissioning Services.
1.10 "HARDWARE" shall mean the Seller hardware listed in Annex 1 and
any other Seller hardware sold by Seller to Buyer hereunder, but excludes OEM
Equipment not integrated into the Hardware during the manufacturing process.
1.11 "INITIAL PROJECT SCHEDULE" shall mean the overall schedule for
deployment of the Initial Network, as agreed to by Buyer and Seller and detailed
in Annex 9 hereof.
1.12 "INITIAL NETWORK" shall mean the Equipment and Services initially
being provided hereunder for Buyer's Network consisting of Equipment and
Services as set forth in Section 1.0 of Annex 1.
1.13 "INSTALLATION" shall mean the performance of the complete
installation and Commissioning of Equipment by Seller.
1.14 "INSTALLATION SITE" shall mean the location (in the United States)
specified in Buyer's Purchase Order or Change Order for Installation of
Equipment.
1.15 "INTERWORKING TESTING" shall mean the testing procedures set forth
in Schedule C of Annex 8 which demonstrate the end-to-end functionality of
Initial Network, including Seller's Equipment and Other Vendor equipment.
1.16 "MERCHANDISE" shall mean miscellaneous components of Hardware,
with respect to which no engineering, Installation, or Commissioning are to be
provided by Seller.
1.17 "MTA" shall mean major trading area as defined by the FCC.
1.18 "NETWORK" shall mean a PCS network owned by the Buyer in a given
MTA or BTA market and supplied by Seller which may include Other Vendor
equipment.
1.19 "NETWORK SWITCHING SYSTEM ('NSS')" shall mean Seller Equipment
comprised of MSCs, HLRs, AUCs, EIRs or other ancillary OEM Equipment (integrated
into the Hardware) provided by Seller, and any other Equipment located at the
NSS that is an integral part of the NSS.
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1.20 "OEM EQUIPMENT" shall mean miscellaneous items of non-NTI hardware
or software made available to Buyer by Seller under this Agreement, not
integrated into the Equipment during the manufacturing process.
1.21 "OPEN INTERFACE" shall mean the capability of PCS 1900 equipment
to interface with other PCS 1900 equipment, regardless of the manufacturer, when
each is operating in accordance with a common interface definition which is a
generally agreed upon industry standard or other interface which is available to
all manufacturers of PCS equipment.
1.22 "OPERATIONS SUPPORT SYSTEMS ('OSS')" shall mean Other Vendor
equipment comprising a part of the Initial Network providing support capability
for the Initial Network.
1.23 "OTHER VENDOR EQUIPMENT" shall mean equipment purchased by Buyer
from a third party vendor having Open Interface capability for use in
conjunction with Seller's Equipment.
1.24 "PERSONAL COMMUNICATION SERVICES ('PCS') 1900" shall mean
GSM-based PCS 1900 telecommunications services provided by the NTI System
operational in the 1900 MHz band.
1.25 "PROJECT SCHEDULE" shall mean those delivery, installation and/or
in-service dates, as applicable, proposed by Buyer and accepted by Seller.
1.26 "PROJECT SERVICES" shall mean any combination of Schedules A - D
of Annex 8 for specific Services which Buyer purchases from Seller. No such
Services shall be deemed to be furnished or included in the Price except
pursuant to an appropriate Purchase Order issued by Buyer and accepted by
Seller.
1.27 "PURCHASE ORDER" shall mean any Purchase Order issued by Buyer
hereunder to Seller pursuant to Section 3 of this Agreement.
1.28 "SERVICES" shall mean those services performed by Seller under
this Agreement, including Project Services and other miscellaneous Services
performed by Seller in conjunction with its supply of Equipment (e.g.,
Installation Services).
1.29 "SHIP DATE" shall mean the scheduled date agreed upon by Buyer and
Seller as the date on which the appropriate Equipment shall be shipped.
1.30 "SOFTWARE" shall mean the proprietary and/or third party software
computer programs (consisting of firmware and logic instructions in
machine-readable code residing in, or intended to be loaded in System memories
which provide basic logic, operating instructions and user-related application
instructions, but excluding customer data) as well as associated documentation
used to describe, maintain and use the programs which are integral to any
Hardware furnished to Buyer. Any reference herein to Equipment or Software being
"sold," "purchased" or the like is understood to be a reference in fact to the
program being licensed.
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1.31 "SPECIFICATIONS" shall mean the specifications and performance
standards of the Equipment as set forth in the applicable sections of Northern
Telecorn Practices ("NTPs"), incorporated herein by reference, including
statements in the NTPs as to conformance with specific Standards. Seller shall
have the right, at its sole discretion to modify, change or amend the
Specifications at any time during the term of this Agreement, provided, that
such modifications, changes or amendments shall not adversely affect the
previously delivered Specifications or System performance/functionality.
1.32 "STANDARDS" shall mean interim and/or final version(s) of
technical specifications derived by an ANSI and any other applicable accredited
standards organizations, governing the operational and/or interface standards
for PCS, GSM or AMPs equipment.
1.33 "STANDING TIME" shall mean any interruption in the Initial Project
Schedule or other Project Schedule caused by Buyer's failure to perform its
responsibilities in accordance therewith, other than by reason of force majeure.
1.34 "SWITCH" shall mean Seller engineered Equipment providing
switching functions. Switches provided under this Agreement may include DMS-MSC
and DMS-HLR switch components for PCS 1900.
1.35 "SYSTEM" shall mean the combination of the NSS (excluding OEM
Equipment), and one or more BSSs furnished hereunder requiring Seller
engineering and Installation/Commissioning Services.
1.36 "TERM" shall mean the period commencing on the date first set
forth above (hereinafter "Effective Date") and ending five (5) years therefrom,
unless terminated earlier in accordance with the terms and conditions hereof, or
unless extended by the mutual written consent of the parties hereto.
1.37 "WARRANTY PERIOD" shall mean:
1.37.1 With respect to BSS Hardware (other than BTSs installed by
Buyer), a period of twenty-four (24) months from the date of Commissioning.
1.37.2 With respect to NSS Hardware (excluding OEM Equipment), a
period of twelve (12) months from the date of Commissioning.
1.37.3 With respect to Software, a period of twelve (12)
consecutive months from the date of Installation of the basic operating Software
onto the Hardware, which twelve (12) month period shall commence with
Installation of each new Software release licensed for use by Buyer.
1.37.4 With respect to Merchandise, a period of twelve (12) months
from the shipment date of that Merchandise.
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1.37.5 With respect to BTS(s) installed by Buyer, a period of
twenty-four (24) consecutive months from the date of shipment.
2. SCOPE
2.1 During the Term, in accordance with a Purchase Order for Equipment
and/or Services which has been accepted by Seller, Seller shall:
2.1.1 engineer, deliver, install (or have installed) and
Commission the Equipment for use in the United States;
2.1.2 grant to Buyer a nonexclusive license to use all Software
associated with, and integral to, Hardware purchased by Buyer hereunder, which
license shall continue beyond the Term, in accordance with Annex 6 attached
hereto;
2.1.3 carry out the Installation of Equipment at the applicable
Installation Site substantially in accordance with the applicable Project
Schedule set forth in Annex 2 and in accordance with the relevant Purchase
Orders or Change Orders;
2.1.4 furnish OEM Equipment to Buyer in accordance with such OEM
vendor's then-current terms, conditions and specifications (excluding Prices
which are set forth in Annex 1).
2.1.5 provide the specific Project Services set forth in Schedules
A, B, C or D of Annex 8, if purchased by Buyer.
2.1.6 Deliver NSS and BSS Equipment in accordance with the lead
times and forecasting procedure set forth in Annex 10, "NSS/BSS Equipment
Delivery Intervals."
2.2 During the Term, in accordance with a Purchase Order for Equipment
and/or Services which has been accepted by Seller, Buyer shall:
2.2.1 Purchase Hardware and Services and license use of the
Software in accordance with the terms of this Agreement;
2.2.2 Perform Buyer's duties as set forth in this Agreement,
including by way of example, but not by way of limitation, those duties set
forth in Annex 2 and Annex 8 in accordance with the Initial Project Schedule or
subsequent Project Schedule (as such Schedules may be mutually modified), as
applicable;
2.2.3 As applicable with respect to Buyer's duties as set forth in
Schedule D of Annex 8, "Site Acquisition Services," negotiate in good faith with
landowners, or landlords to acquire/lease sites as well as with other
appropriate parties to provide Seller access to sites for purposes of rendering
Services ordered from Seller;
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2.2.4 Insure that only qualified technicians perform any
maintenance and/or repair to the Equipment during the Warranty Period, which
maintenance and/or repair shall be confined to routine tasks performed in
accordance with Seller provided documentation;
2.2.5 Not unreasonably withhold Final Acceptance, as defined in
Article 14 herein.
2.3 Seller agrees that the electronic and telephone interconnection
components required by the Hardware are compatible with the local Telco's
requirements regarding the interconnection of Hardware components (i.e., those
interconnect methods which are available to customers generally and do not
require customized manufacturing or installation).
3. PURCHASE ORDERS
3.1 Each Purchase Order for Equipment and/or Services issued during
the Term of this .Agreement, or as it may be extended, shall be governed by the
terms and conditions of this Agreement, and shall incorporate these terms and
conditions by reference. Each of Buyer and Seller hereby expressly agrees that
except for non-conflicting administrative terms as provided below, any
additional or preprinted terms or conditions on the applicable Purchase Order,
shall be null, void and of no effect, unless Buyer and Seller acknowledge such
conflicting/additional terms and conditions pursuant to Section 23.3 herein.
Each such Purchase Order shall specify:
3.1.1 The description of the ordered Equipment and/or Services,
including any identification referenced in the price list herein attached as
Annex 1;
3.1.2 Requested place (which may be changed by a Change Order) and
date of delivery consistent with the applicable lead times set forth in Annex
10;
3.1.3 Applicable Price for the ordered Equipment and/or Services
as set forth in Annex I or, if not set forth in Annex 1, as may be separately
quoted by Seller from time to time which in no event shall be greater than
Seller's list prices then in effect, less any applicable discounts set forth in
Article 2 of Annex 1;
3.1.4 Prices for Equipment engineering and Installation to be
quoted by Seller, together with a mutually agreed Installation and Commissioning
schedule;
3.1.5 Installation Site(s) where applicable (which may be changed
by Change Orders);
3.1.6 Other available appropriate information as may be required
by Seller necessary to fill the Purchase Order such as Buyer's floor plan and
frequency plan; and
3.1.7 Location to which the applicable invoice shall be rendered
for payment.
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3.2 Any Purchase Order issued by Buyer and not rejected in writing
within ten (10) business days after receipt by Seller shall be deemed accepted.
Seller shall not reject a Purchase Order that has been submitted in accordance
with the terms of the Agreement.
4. PRICE
4.1 The price ("Price") for any Equipment shall consist of (i) the
Price of the Initial Network Purchase Order or any subsequent Purchase Orders;
(ii) unit list prices for Hardware and Merchandise, as set forth in Annex 1;
(iii) license fees to use the Software associated with such Hardware, as set
forth in Annex 1; (iv) for any PCS 1900 (GSM) Hardware, Merchandise or Software
not listed in Annex 1, Seller's then-current list price less the applicable
discount set forth in Article 2 of Annex 1; and (v) for OEM Equipment and
Services, the Prices as may be quoted by Seller from time to time, unless
otherwise listed in Annex 1.
4.2 Unless otherwise specified, the Prices set forth in Annex 1 are
exclusive of Seller's charges for any Services associated therewith.
4.3 The Prices are exclusive of any taxes, which shall be the
responsibility, of Buyer pursuant to Section 5.5 hereof.
5. PAYMENT
5.1 With respect to payment for any of the Equipment or Services for
any of the MTAs identified in Annex I ("Initial MTA") that comprise the Initial
Network, Seller shall invoice Buyer the Initial MTA Price in accordance with the
following:
5.1.1 With respect to the Hawaii Initial MTA, invoicing shall be
in accordance with the following schedule:
5.1.1.1 * of the Initial MTA Price shall be invoiced and
paid incrementally upon shipment of the Equipment as set forth below:
* of the Initial MTA Price shall be invoiced upon shipment
of * of the total number of BTSs included as part of the Initial MTA.
* of the Initial MTA Price shall be invoiced upon shipment
of * of the total number of BTSs included as part of the Initial MTA.
* of the Initial MTA Price shall be invoiced upon shipment
of * of the total number of BTSs included as part of the Initial MTA.
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* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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* of the Initial MTA Price shall be invoiced upon shipment
of * of the total number of BTSs included as part of the Initial MTA.
* of the Initial MTA Price shall be invoiced upon shipment
of * of the total number of BTSs included as part of the Initial MTA.
5.1.1.2 * of the Initial MTA Price shall be invoiced
Commissioning of Equipment as set forth below:
* of the Initial MTA Price shall be invoiced upon completion
of Commissioning of * of the total number of BTSs included as part of the
Initial MTA.
* of the Initial MTA Price shall be invoiced upon completion
of Commissioning of * of the total number of BTSs included as part of the
Initial MTA.
5.1.1.3 * of the Initial MTA Price shall be invoiced upon
Final Acceptance of the Initial MTA as defined in Article 14 herein.
5.1.2 With respect to the El Paso and Salt Lake City Initial
MTAs, invoicing shall be in accordance with the following schedule:
5.1.2.1 * of the Initial MTA Price shall be invoiced
incrementally upon shipment of the Equipment as set forth below:
* of the Initial MTA Price shall be invoiced upon shipment
of * of the total number of BTSs included as part of the Initial MTA.
* of the Initial MTA Price shall be invoiced upon shipment
of * of the total number of BTSs included as part of the Initial MTA.
* of the Initial MTA Price shall be invoiced upon shipment
of * of the total number of BTSs included as part of the Initial MTA.
* of the Initial MTA Price shall be invoiced upon shipment
of * of the total number of BTSs included as part of the Initial MTA.
* of the Initial MTA Price shall be invoiced upon shipment
of * of the total number of BTSs included as part of the Initial MTA.
5.1.2.2 * of the Initial MTA Price shall be invoiced
incrementally upon Commissioning of Equipment as set forth below:
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* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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* of the Initial MTA Price shall be invoiced upon completion
of Commissioning of * of the total number of BTSs included as part of the
Initial MTA.
* of the Initial MTA Price shall be invoiced upon completion
of Commissioning of * of the total number of BTSs included as part of the
Initial MTA.
5.1.2.3 * of the Initial MTA Price shall be invoiced upon
Final Acceptance of the Initial MTA.
5.1.3 With respect to the Portland Initial MTA, invoicing shall be
in accordance with the following schedule:
5.1.3.1 * of the Initial MTA Price shall be invoiced on
shipment of the major components of the Equipment.
5.1.3.2 * of the Initial MTA Price shall be invoiced on the
date of Commissioning of the Initial MTA.
5.1.3.3 * of the Initial MTA Price shall be invoiced on Final
Acceptance.
5.1.4 With respect to Purchase Orders (for other than the Initial
MTAs) that meet all of the following conditions: (1) include Installation
Services therefor; (2) are being financed by Seller pursuant to Section 5.8, and
(3) are received until the later of September 1, 1996 or such other time as
Seller provides for the general availability of IS-41 Interoperability Software
(Rev. B), and the Enhanced Full Rate ("EFR") Vocoder Equipment, invoicing shall
be in accordance with the following schedule:
5.1.4.1 * of the Purchase Order Price shall be invoiced on
shipment of the major components of the Equipment.
5.1.4.2 * of the Purchase Order Price shall be invoiced on
the date of completion of commissioning.
5.1.4.3 * of the Purchase Order Price shall be invoiced on
Final Acceptance.
5.1.5 Invoicing by Seller in accordance with the above milestones
shall not be delayed if the failure to successfully accomplish activities
leading to completion of such milestones is due to the fault of Buyer, its
agents or subcontractors, provided, however, that Seller is able to demonstrate
its ability or readiness independently to have met such milestone. No payment in
accordance with the above milestones shall be due with respect to Commissioning
until completion of Commissioning unless the failure to achieve Commissioning is
due to (1) Buyer's
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* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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refusal to proceed or (2) delay in achieving Commissioning which is the sole
fault of Buyer and which Buyer could remedy but has not within ten (10) days
after notice from Seller that Seller is ready to proceed with Commissioning.
5.2 With respect to Purchase Orders (other than those covered by
Section 5.1) for Equipment that include Installation Services therefor, Seller
shall invoice Buyer the appropriate Price in accordance with the following
schedule:
5.2.1 * of the Purchase Order Price shall be invoiced by Seller
upon shipment of the Switch in the case of a System Installation or, in the case
of an Expansion Installation, upon shipment of the major components to the
Installation Site.
5.2.2 * of the Purchase Order Price shall be invoiced by Seller
upon the date of completion of Commissioning.
5.2.3 * of the Purchase Order Prices shall be invoiced on Final
Acceptance.
5.3 Any additional monies that become due to Seller (including,
without limitation, Merchandise orders, Service orders that are not included as
part of the Purchase Order for the Initial Network, e.g., Project Services, such
items as are described in Section 5.5, Equipment purchases wherein Installation
is not provided by Seller, and OEM Equipment not part of the original System
order) shall be invoiced one hundred percent (100%) upon shipment, or upon
completion of Services performed. During a System or Expansion Installation,
Seller may invoice on a per Installation Site basis upon completion of the
applicable milestone event.
5.4 Payments due under this Agreement shall be paid to Seller within
* (*) days following the date at Seller's invoice therefor, except for payments
that are made from Network Financing (but excluding payments financed by Seller)
shall be paid within * (*) days following the date of Seller's invoice therefor.
All past due amounts (collectively, "Past Due Amounts") shall bear interest at
the rate of one and one-half percent (1 1/2%) per month (or such lesser rate as
may be the maximum permissible rate under applicable law), beginning with the
date on which the applicable Past Due Amount was due and payable.
5.5 Except for any franchise tax or any tax assessed on Seller's
income or gross revenues, Buyer shall pay to Seller the amount of any sales
and/or use tax, fee or similar charges which Seller may be required to pay
because of its performance of this Agreement. Personal property taxes assessable
on the Equipment shall be the responsibility of Buyer. To the extent Seller is
required by law to collect such taxes (state or local), one hundred percent
(100%) thereof shall be added to invoices as separately stated charges and paid
in full by Buyer, unless the Buyer is exempt from such taxes and furnishes
Seller with a certificate of exemption prior to issuance of invoice in a form
reasonably acceptable to Seller. Buyer shall hold Seller harmless from any and
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* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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all subsequent assessments levied by a proper taxing authority for such taxes,
including any interest, penalties or late charges due to Buyer's failure to
perform hereunder.
5.6 Until the total Price for each Purchase Order is paid to Seller,
Seller shall retain and Buyer hereby consents to Seller having a purchase money
security interest in Seller's Equipment. Buyer shall execute any documents
reasonably requested by Seller to evidence same. Seller shall release such
security Interest upon transfer of title to Buyer.
5.7 Prior to payment in full of the Price and all additional monies
due to Seller with respect to Equipment, without written permission of Seller,
Buyer shall not sell or lease such Equipment purchased by it, or assign any
license to use the Software.
5.8 Seller reserves the right to require reasonable assurances of
payment by Buyer. Seller understands that Buyer and Buyer's affiliates (such
affiliates being defined for purposes of this Section 5.8 as Western Wireless
Corporation and Western PCS II Corporation) intend to enter into two (2) credit
facility arrangements contemporaneously with execution of this Agreement with
Seller or Seller's affiliated companies and with Toronto Dominion Bank and
associated lenders with respect to, among other things, financing for Equipment
and Services to be purchased as part of Buyer's Commitment under this Agreement
("Network Financing"), and Seller agrees that such financial institutions or
lenders are acceptable hereunder and, subject to execution of such credit
facility arrangements with such lenders, Seller will not require any additional
assurances under this provision with respect to such lenders and/or financial
institutions for the Network Financing. Seller may, from time to time, evaluate
Buyer's credit standing, and on that basis, establish a credit limit to
accommodate Buyer's issuance of Purchase Orders as herein provided. Buyer shall
provide any reasonable assistance requested by Seller necessary for Seller to
make such evaluation.
5.9 Buyer understands that it has a firm obligation to purchase/
license and take delivery of, or have Buyer's Affiliates purchase, license and
take delivery of, no less than $200 million of Equipment and Services (at net
Prices) from Seller during the Term of this Agreement (the "Commitment"). Buyer
further agrees to purchase (i) one-hundred percent (100%) of Buyer's need for
switching products in the Initial MTA markets and if Buyer deploys GSM in the
Des Moines or Oklahoma City MTAs, Buyer agrees that it will purchase 100% of its
need for switching products from Seller under this Agreement for such MTAs; and,
(ii) fifty percent (50%) of Buyer's aggregate needs for radio frequency products
in the Initial MTAs and in the Des Moines or Oklahoma City MTAs, if Buyer
deploys GSM in such MTAs.
5.9.1 The Initial Network Purchase Order set forth in Annex 1
(which can be changed pursuant to Section 17 herein) makes up a portion of the
Commitment. The remainder of the Commitment shall be satisfied from Purchase
Orders submitted by Buyer pursuant to Article 3 hereof.
5.9.2 Should Buyer, pursuant to its obligations under Section 5.9,
fail to issue such Purchase Orders and take delivery of enough additional
Equipment/ Services to satisfy the Commitment, then Buyer shall pay a
termination charge to Seller in the amount of twenty percent
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(20%) of the portion of the Commitment that remains unfulfilled at the end of
the Term. Such amount(s) shall be due and payable within thirty (30) days
following the date of Seller's invoice therefor.
5.9.3 Seller agrees not to charge Buyer termination charges under
Section 5.9.2 or Section 17 or otherwise, if Buyer fails to obtain a PCS license
to operate the Initial MTAs. In the event that Buyer fails to obtain one (1) or
more licenses to operate the Initial MTAs, the Commitment will then be
proportionately reduced (based on the size (POPS) of the Initial MTA[s] that
Buyer fails to obtain a license for).
6. DELIVERY, RISK OF LOSS, TITLE
6.1 Equipment installed by Seller shall be shipped F.O.B. the
Installation Site, provided, however, that Buyer shall be responsible for any
special handling charges for delivery beyond curbside or unloading dock, e.g.,
cranes, helicopters.
6.1.1 Any BTS Equipment to be installed by Buyer shall be shipped
F.O.B. Buyer's designated delivery location, i.e., a staging center, warehouse
or Installation Site. Buyer shall then be responsible for the coordination of
all delivery arrangements to comply with Project Schedule dates and for freight
and handling charges from such delivery locations to the Installation Sites,
including cost for any special handling or equipment as described in Section 6.1
hereof.
6.1.2 Merchandise shall be shipped F.O.B. the place of shipment,
for which Seller will select the method and common carrier for shipment unless
otherwise specified by Buyer on the Purchase Order, in which case, Buyer will be
responsible for any additional premium freight charges.
6.2 Title to the Equipment shall pass to Buyer at the point and on the
date of final payment for such Equipment. Seller warrants to Buyer that such
title shall be good and clear title, free and clear of all liens and
encumbrances. The foregoing notwithstanding, title to Software shall not pass to
Buyer at any time.
6.2.1 Risk of loss or damage to any Equipment shall pass to Buyer
upon delivery to the facility designated in Buyer's Purchase Order as the
initial point of delivery (e.g., staging shelter, Installation Site or storage
facility).
6.3 Not later than thirty (30) days prior to the earliest Ship Date
relating to any of the items covered by the applicable Purchase Order (Seller
will use all reasonable efforts to comply with Buyer's request up to ten [10]
days prior to the Ship Date) Buyer may notify Seller that Buyer (i) does not
wish to receive shipment of any Equipment on the date set forth in such Purchase
Order, or (ii) that Buyer's facilities are not prepared pursuant to Annex 2
hereof in sufficient time for Seller to make delivery pursuant to the date set
forth in the applicable Purchase Order. In such case Seller shall have the right
to place such Equipment in storage and Buyer shall be liable for all additional
transportation, demurrage, loading, storage, and associated costs
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thereby incurred by Seller. The shipment of Equipment to a storage location as
provided in this Section 6.3 shall be deemed to constitute shipment of the
Equipment for purposes of invoicing, passage of title and risk of loss, and
commencement of the Warranty Period.
7. WARRANTIES, REMEDIES AND LIMITATION OF WARRANTIES AND REMEDIES AND
DISCLAIMERS OF WARRANTIES AND LIABILITY
7.1 Hardware and Services Warranty
7.1.1 Seller warrants that during the Warranty Period, the Hardware
furnished under this Agreement shall be free from defects in material and
workmanship, and shall conform with and perform the functions set forth in the
applicable portions of the Specifications, and that the Services furnished under
this Agreement shall be performed in a professional and workmanlike manner. Any
and all claims for breach of this warranty are conclusively deemed waived unless
made during the Warranty Period. Performance of Seller's obligations hereunder
shall not extend the Warranty Period, except that any Hardware and/or Services
repaired, replaced or corrected during the Warranty Period shall continue to be
warranted for the balance of the Warranty Period, or ninety (.90) calendar days
from the date the repair is effected or the replacement is shipped, whichever is
longer.
7.1.2 Seller's sole obligation and Buyer's exclusive remedy under
this warranty are limited to the replacement or repair, at Seller's option and
expense, of the defective component of the Hardware, or the correction of the
faulty Services. Such replacement Hardware may be new or reconditioned to
perform as new, at Seller's option (replacement Hardware provided prior to the
start of the Warranty Period shall be new). Buyer shall bear the risk of loss
and damage and all transportation costs for defective Hardware shipped to
Seller; and Seller shall bear the risk of loss and damage and all transportation
costs for replacement Hardware shipped to Buyer. Title to defective or
replacement Hardware shall pass .to Seller or Buyer, as appropriate, upon
receipt thereof.
7.1.3 Seller warrants that all Hardware will be new and unused at
the time of delivery to the Installation Site (prior to the start of the
Warranty Period). Buyer's exclusive remedy, in the event of a breach of the
foregoing warranty, shall be to cause Seller to replace noncomplying Hardware
with like Hardware which is in compliance with said warranty.
7.2 Software Warranty
Seller warrants that, provided the Software is not altered by Buyer,
and provided the Software is used in conjunction with the Switch Hardware
purchased under this Agreement and such Hardware has been maintained in
accordance with Seller's recommended maintenance procedures, the Software shall
function during the Warranty Period without defects which materially affect
Buyer's use of the Software in accordance with Seller's Specifications for the
Software, and shall be free from defects in material and workmanship and perform
the functions set forth in the Specifications. In the event the Software is
defective or fails to so perform and Buyer's use of the System is materially
affected by such failure, Seller shall correct such failure or
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defect and Buyer's exclusive remedy under this warranty is to require Seller to
so correct such failure or defect. Such remedy is conditioned upon Seller's
receiving written notice within the Warranty Period (or oral notice promptly
confirmed in writing) of such failure. The correction of any Software failure
shall not extend the Software Warranty Period.
7.3 System Warranty
Seller warrants that the System, when operated as a complete System,
both as a System is initially configured and as such System is expanded or
modified thereafter (whether by the addition of BSS's or otherwise) through the
end of the Term, shall operate as a complete System in accordance with the
Specifications and shall be free from defects which could result in the
inability of the System to process calls and maintain an optimum grade of
service through December 31, 2004. Seller's obligations under this Section 7.3
shall continue through December 31, 2004, and are limited, subject to Article
12, to correction of the cause of any such failure, and are conditioned upon the
Equipment having been maintained by Buyer in accordance with Seller's
Specifications and Sections 11.2 and 11.3. Correction of the cause of any such
failure shall not extend Seller's obligations under this Section 7.3 beyond
December 31, 2004. After expiration of the Warranty Periods specified in Section
1.37, if the breach of the warranty in this Section 7.3 is caused solely by a
piece of Equipment or component thereof having worn out, or deteriorated, or is
defective because of Buyer's failure to maintain same, then (i) repair or
replacement of such Equipment or component thereof shall be at Buyer's expense
and (ii) if not repaired or replaced at Buyer's expense Seller shall be relieved
of its responsibilities under this Section 7.3. Any and all claims for breach of
the warranty set forth in this Section 7.3 are conclusively deemed waived unless
made prior to December 31, 2004.
7.4 Response Services/Time
7.4.1 During the Warranty Period, Seller's technical assistance
service ("TAS") department shall provide reasonable assistance in the
investigation and resolution of service-affecting problems (e.g., El, E2, S1 or
S2 as identified in Annex 5). If such assistance is requested by Buyer, Buyer
agrees to follow Seller's standard policies and procedures related to such TAS
services as set forth in Annex 5, "Seller Warranty Services." The Hardware
Warranty Period shall include TAS only to the extent that any TAS services
provided under the Equipment warranty also apply to Hardware operating in
conjunction with the applicable Equipment. For routine warranty service
situations, Seller shall make all reasonable efforts to ship replacement or
repaired Equipment (or components thereof) within ten (10) days, but not later
than thirty (30) days, of receipt of the defective Equipment (or components
thereof) from Buyer, or if Seller determines that, due to the particular
circumstances, on-site Services are required, Seller shall undertake repair or
replacement services on-site within thirty (30) days of notification of the
warranty defect by Buyer.
7.4.2 For emergency warranty service situations, Seller shall,
during the Warranty Period, and at its own expense, use its reasonable best
efforts to ship replacement Equipment (or components thereof) within twenty-four
(24) hours of notification of the warranty defect by Buyer. If such repair,
replacement or installation of replacement Equipment requires the
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<PAGE> 17
Services of Seller's personnel at Buyer's sites, Seller shall at its own cost
and expense, dispatch such personnel as required to correct such defect within
twenty-four (24) hours of notification of defect. Buyer may request, at the
expense of Buyer, counter-to-counter shipment. Buyer shall pay to Seller the
surcharge set forth in Annex 5, for such expedited shipment of replacement
Equipment. Buyer shall ship the defective Hardware to Seller within thirty (30)
days of receipt of the replacement Hardware. In the event Seller fails to
receive such defective Hardware within such thirty (30) day period, Seller shall
invoice Buyer for the replacement Hardware at the then-current Price in effect
therefor. For the purpose of this Agreement, an emergency shall be deemed to
exist upon the occurrence of a Priority E1 or E2 problem, as defined in Annex 5.
7.5 OEM Equipment
7.5.1 OEM Equipment furnished in conjunction with a Switch, (e.g.,
terminals and printers), shall be warranted in accordance with the Hardware
warranties set forth in Section 7.1 and handled through Seller's Repair and
Return department. With respect to other OEM items ordered by Buyer, Buyer shall
receive the warranties for such OEM Equipment directly from such OEM vendors.
Except for the warranty of title extended in Section 6.2 hereof, the warranties
provided in this Section 7.5 are Buyer's sole and exclusive remedy against
Seller with respect to OEM Equipment provided under this Agreement.
7.5.2 As OEM Equipment vendors are selected for use by Seller to
provide materials under this Agreement, and upon request by Buyer, Seller shall
notify Buyer of the specific warranty period for the item of OEM Equipment being
provided.
7.6 THE WARRANTIES AND REMEDIES SET FORTH ABOVE CONSTITUTE THE ONLY
WARRANTIES WITH RESPECT TO THE EQUIPMENT AND SERVICES PROVIDED, AND BUYER'S
EXCLUSIVE REMEDIES IN THE EVENT SUCH WARRANTIES ARE BREACHED. THEY ARE IN LIEU
OF ALL OTHER WARRANTIES WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION THE WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE, SELLER SHALL NOT BE LIABLE FOR ANY INCIDENTAL,
CONSEQUENTIAL, OR SPECIAL DAMAGES OF ANY NATURE WHATSOEVER.
7.6.1 Seller's obligations under this Article 7 shall not apply to
(i) Equipment or components thereof such as fuses and bulbs that are normally
consumed in operation, or have a normal life inherently shorter than the
Warranty Period; (ii) defects that, due to no fault of Seller, its employees,
subcontractors or agents, are the result of improper storage, installation, use,
maintenance or repair by the Buyer (including, without limitation, operation of
the Equipment outside the environmental parameters defined in the
Specifications); (iii) improper operation of Equipment with other hardware used
by Buyer, including the operation of Equipment with hardware not authorized by
Seller for use with the Equipment, or use of the Equipment with any improperly
operating equipment not supplied by Seller under this Agreement; (iv) Equipment
or components thereof that due to no fault of Seller, its employees, agents or
subcontractors have been subjected to any other kind of misuse or detrimental
exposure or have been involved in an
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<PAGE> 18
accident, fire explosion, Act of God, or any other cause not attributable to
Seller, its employees, agents or subcontractors, or (v) Equipment or
Installation Services altered, repaired, or improperly relocated by any party
other than Seller or Seller's employees, subcontractors or agents.
Notwithstanding the foregoing, if Buyer requests Seller to repair any Equipment
or component thereof which has been damaged as a result of any of the events set
forth in this Section 7.6.1, Seller agrees to use its reasonable efforts to
repair such Equipment or component thereof and cure any such defects.Charges for
such repair Services shall be at Seller's then-current rates.
7.7 Post Warranty Support
No later than ninety (90) days prior to the expiration of the Warranty
Period, and upon request by Buyer, Seller shall offer to Buyer, post warranty
support by means of an extended service plan ("ESP"). Such ESP shall include
Seller's Technical Assistance Service ("TAS") and Emergency TAS ("ETAS"), and
shall be available to Buyer for a period of ten (10) years following the
Effective Date hereof, subject to Section 11.3.
7.7.1 TAS and ETAS shall also be available from Seller without
entering into an ESP, substantially as provided in Annex 5, on a
time-and-material basis, and subject to Section 11.3.
7.8 Except for OEM Equipment, for a period of ten (10) years following
the date of Hardware shipment, Seller shall make available Hardware spare parts
and replacement services for sale to Buyer, at Seller's then-current Prices.
Seller shall also make available for a period of ten (10) years following the
date of Software shipment, Software support through Seller Technical Assistance
Services ("TAS") and Emergency TAS ("ETAS") departments at Seller's then-current
prices, terms and conditions. Such TAS and ETAS services are conditioned upon
Buyer's compliance with Section 11.3 herein.
7.8.1 In the event that Seller shall manufacture-discontinue
Equipment, Seller shall provide to Buyer twelve (12) months prior written notice
of such manufacture-discontinuance to allow Buyer to place Purchase Orders for
such discontinued Equipment (for shipment within twelve [12] months following
Seller's acceptance of such Purchase Order).
7.9 For a period of ten (10) years after the date of sale of any
Equipment hereunder (excluding OEM Equipment), Seller shall provide Class "A"
Equipment changes to Buyer consistent with the procedures for such changes as
set forth in Annex 11, "Class A Changes."
7.10 Buyer may, at any time, acquire from a source other than Seller,
equipment approved by Seller (which approval will not be unreasonably withheld)
as compatible with the System, and such equipment may be installed in and become
part of the System without affecting the warranties contained in this Agreement,
and the System Warranty contained in Section 7.3 shall cover the System
incorporating such equipment, but not the equipment itself. Buyer shall pay all
reasonable direct costs and expenses incurred by Seller for Seller's time and
materials associated with any necessary compatibility testing (other than any
cost or expenses incurred by
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<PAGE> 19
Seller in demonstrating the functionality of the "A" interface with respect to
Seller's Equipment, which cost and expenses shall be the responsibility of
Seller, but which cost shall exclude any cost of any other participating
vendor), and Buyer shall coordinate with the "other source" in arranging such
testing. If Buyer acquires from a source other than Seller and installs in the
System equipment which has not been approved by Seller, the warranties contained
in Section 7.3 shall not cover the System to the extent that such equipment
affects the operation of the System.
7.11 If any Seller Equipment is rendered inoperative as the result of a
natural or other disaster, Seller will make all reasonable efforts to supply or
help locate backup or replacement Equipment for Buyer, by using its best efforts
to waive any delivery schedule priorities (to the extent permitted by law or by
contractual agreements) and to make replacement products available from the
facility then producing such products, or from inventory.
8. FORCE MAJEURE
If the performance of this Agreement, or of any obligation hereunder
except for the obligations set forth in Article 5 is prevented, restricted or
interfered with by reason of fires, breakdown of plant, labor disputes,
embargoes, government ordinances or requirements, civil or military authorities,
acts of God or of the public enemy, acts or omissions of carriers, inability to
obtain necessary materials or services from suppliers, or other causes beyond
the reasonable control of the party whose performance is affected, then the
party affected, upon giving prompt notice to the other party, as set forth in
Section 23.2 shall be excused from such performance on a day-for-day basis to
the extent of such prevention, restriction, or interference (and the other party
shall likewise be excused from performance of its obligations on a day-for-day
basis to the extent such party's obligations relate to the performance so
prevented, restricted or interfered with); provided that the party so affected
shall use reasonable efforts to avoid or remove such causes of non-performance
and both parties shall proceed to perform their obligations with dispatch
whenever such causes are removed or cease.
9. PATENT OR COPYRIGHT INFRINGEMENTS
9.1 Seller agrees to indemnify Buyer with respect to any suit, claim,
or proceeding brought against Buyer alleging that Buyer's use of the Equipment
constitutes an infringement of any United States patent, copyright or
intellectual property right. Seller agrees to defend Buyer against any such
claims and to pay all litigation costs, reasonable attorney's fees, settlement
payments and any damages awarded in any final judgment arising from such suit,
claim or proceeding; provided, however, that Buyer shall promptly advise Seller
of any such suit, claim, or proceeding and shall cooperate with Seller in the
defense or settlement of such suit, claim or proceeding and provided Seller
shall have sole control thereof.
9.2 In the event that an injunction is obtained against Buyer's use of
Equipment arising from such patent, copyright or intellectual property fight
suit, claim or proceeding, in whole or in part, Seller shall, at its option and
sole expense, either: (i) procure for Buyer the right to continue using the
portion of a System enjoined from use; or (ii) replace or modify the same,
without interruption of use during Buyer's peak hours, so that Buyer's use is
not subject to any such
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injunction; provided, that such replacement or modification shall not adversely
impair the System or the Equipment performing in accordance with the
Specifications.
9.3 In the event that Seller cannot perform under Section 9.2, Buyer
shall have the right to return such Equipment or portion thereof to Seller, at
Seller's cost, upon written notice to Seller and in the event of such return,
neither party shall have any further liabilities or obligations under this
Agreement, except that Seller shall refund the full Price of any such System, or
portion thereof, if such an event occurs during the Term, and, commencing upon
the first day after expiration of the Term, Seller shall refund the Price of the
System, or portion thereof, less depreciation of twenty percent (20%) of the
Price, or applicable portion thereof, for each year of use thereof after
expiration of the Term by Buyer at the time of such return. To the extent any
infringing portion of the System materially affects the operation of other
Equipment, Buyer's right to receive a refund shall apply to such other Equipment
as well.
9.4 Seller's indemnity obligations under Section 9.1 shall not apply
to infringement claims (i) arising from any portion of the Equipment that is
manufactured to Buyers design, provided, that Seller notifies Buyer in advance
of such manufacture that indemnification for such design will not be provided by
Seller, and Buyer, notwithstanding such forfeiture of indemnification, agrees to
have Equipment manufactured, or (ii) arising from the use of the Equipment in
combination with any other apparatus or material not supplied by Seller to the
extent that the claims are from such combination usage.
9.5 The foregoing states the entire liability of Seller for patent or
copyright infringement by the Equipment. Seller shall have no liability
whatsoever for any patent or copyright infringement arising from Buyers use of
the OEM Equipment, and Seller makes no warranty with respect thereto.
10. SOFTWARE LICENSE
10.1 With respect to Equipment containing Software acquired under this
Agreement, Buyer is hereby granted a non-exclusive license to use the Software
in accordance with the terms set forth in Annex 6, "Software License." Buyer is
granted no title or ownership rights to the Software, which rights shall remain
in Seller or Seller's suppliers as appropriate. Subject to Sections 1.7.4
through 1.7.4.3 of Annex 1, an initial Software license fee paid by Buyer shall
not cover charges for future Software releases as contemplated in Section 11,
and which fees are set forth in Annex 1.
10.2 Subject to Sections 1.7.4 through 1.7.4.3 of Annex 1, pricing for
Software features offered to Buyer shall be calculated on the basis of
measurable units of usage, as described in Annex 1. The criteria for measurement
may vary from feature to feature, but will consist of units that may be
quantified, such as, by way of example and not limitation, radios (TRXs),
effective traffic channels, subscribers, BSC(s), BTS(s) or Other Vendor
equipment (hereinafter "measurable units").
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10.2.1 A list of Seller's current variable license fee
offerings is included in Annex 1, as amended from time to time. Subject to
Sections 1.7.4 through 1.7.4.3 of Annex 1, Seller shall notify Buyer of any
price increases affecting such features not later than sixty (60) days prior to
the effective date; however, Seller may not increase the Price of any features
unless calculated on a measurable unit basis, once they are listed in Section
2.3 of Annex 1, unless such feature is modified or improved. All such updates to
Annex 1 shall be provided to Buyer under separate cover and shall be deemed to
be incorporated herein by reference. Subject to Sections 1.7.4 through 1.7.4.3,
the fees for all such features shall be subject to a minimum charge as
determined for each individual Software feature.
10.2.2 Buyer hereby gives Seller the right to audit Buyer's
System either remotely or visually, or some combination thereof, for purposes of
determining measurable unit quantities. Seller shall conduct an audit at the
time the applicable Software is loaded onto Buyer's Switch to determine the
initial quantity of measurable units. Thereafter, Seller shall have the right to
audit Buyer's System on an annual basis as set forth herein. Following each
annual audit, Buyer shall be invoiced for any additional measurable units as
compared with the preceding twelve-month period total. Seller's right to audit
and invoice Buyer in accordance with this Section 10.2 hereof for measurable
units added following the expiration of the Agreement shall survive the Term of
the Agreement.
10.3 The obligations of Buyer under this Article 10 and Annex 6 shall
survive the termination of this Agreement, regardless of the cause of
termination.
11. SOFTWARE UPDATES
11.1 The license fees set forth in Annex I for additional Software
releases assume that Buyer's System is operating on Software at the same level
of maintainability as set forth in Section 11.3 hereof. Otherwise, retrofitting
features from a new release onto Buyer's System shall be considered and quoted
by Seller on a case-by-case basis. Additionally, future Hardware purchases may
require the support of a then-current Software load.
11.2 Any such Software release may require the purchase of additional
Hardware by Buyer.
11.3 If Buyer elects to remain on a prior Software release, Seller's
sole obligation hereunder shall be to make available maintenance for the
Software for the previous two consecutive releases from the then-current,
Seller-numbered release (i.e., numbered Software load).
11.4 From time to time, during the ten (10) year period commencing on
the Effective Date hereof, Buyer may request that new Seller Software features
or enhancements be developed (hereinafter "New Features/ Enhancements") in
accordance with the following process:
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11.4.1 Prior to issuing a specific request which would contain
any information which Buyer considers proprietary, Buyer shall first furnish
Seller with a general, nonproprietary description of the proposed New Feature/
Enhancements.
11.4.2 Insofar as Seller is able to determine from Buyer's
general nonproprietary description of the proposed New Feature/Enhancements,
Seller will advise Buyer in writing of whether Seller is planning to develop or
is developing features, modifications or enhancements identical or substantially
similar to the proposed New Feature/Enhancements, and if so, whether Seller
elects to expedite its development or develop the proposed New
Feature/Enhancements, under this Agreement.
11.4.3 Based upon Seller's response pursuant to Section 11.4.2
hereof, Buyer may, if it elects to do so, release a detailed written request to
Seller utilizing Seller's standard Feature Specification Description ("FSD")
form, subject to the understanding set forth below, and Seller shall promptly
evaluate it.
11.4.4 Seller shall review the specifications contained in
Buyer's written request and commence good faith discussions leading to agreement
as to any changes or additional clarification to such FSD that are deemed
appropriate by both parties. Thereafter, within twenty (20) days following such
mutual agreement and completion of the FSD by all signatories, Seller shall
provide a budgetary quote to Buyer having a plus or minus price accuracy of 35%
and an estimated delivery date. If further requested by Buyer, Seller shall
submit a firm proposal to Buyer specifying its proposed price, ownership,
funding, development schedule, delivery schedule, identification of deliverable
items, and general objectives of a test plan. If equipment changes are required,
they shall, to the extent possible also be included in Seller's proposal. Such
proposal shall be provided no later than forty (40) calendar days after
completion of the FSD unless a longer period shall have been agreed to. If Buyer
elects to accept such proposal, Buyer and Seller shall execute an agreement that
includes, but is not limited to, the terms of the proposal and Buyer and Seller
shall then perform the responsibilities thereunder.
11.4.5 Seller shall retain all right, title and ownership to any
New Features/ Enhancements developed by Seller.
12. REMEDIES
Seller shall have the right to suspend its performance under this
Agreement by written notice to the Buyer and forthwith remove and take
possession of any portion of the Equipment that has been delivered if the Buyer,
prior to payment to Seller of the Price, shall become insolvent or bankrupt,
make a general assignment for the benefit of, or enter into any arrangement with
creditors, file a voluntary petition under any bankruptcy, insolvency, or
similar law, or have proceedings under any such laws or proceedings seeking
appointment of a receiver, trustee or liquidator instituted against it which are
not terminated within thirty (30) days of such commencement.
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12.2 In the event of any material breach of this Agreement by either
party which shall continue uncured for thirty (30) or more days after written
notice of such breach (including a reasonably detailed statement of the nature
of such breach) shall have been given to the breaching party by the aggrieved
party, the aggrieved party shall be entitled at its option:
12.2.1 if the aggrieved party is the Buyer, to suspend
performance of all of its obligations under the Agreement, except its
obligations under Article 20 or Annex 6, for so long as the breach continues
uncorrected; provided, however, that if the breach relates to Seller's failures
under Section 12.6 or Section 12.7 and continues uncorrected for an unreasonable
period, Buyer shall have the further right to be wholly relieved of its
obligations to purchase Equipment representing any balance of the Commitment or;
12.2.2 if the aggrieved party is Seller, to suspend performance
of all of its obligations under the Agreement, except for its obligations under
Articles 9 and 20, for so long as the breach continues uncorrected or;
12.2.3 to avail itself of any and all remedies available at law
or equity whether or not it elects to suspend its performance under Section
12.2.1 or 12.2.2 as applicable.
12.3 NOTWITHSTANDING THE PROVISIONS OF SECTION 12.2. OR ANY OTHER
PROVISION OF THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE FOR INCIDENTAL,
INDIRECT, CONSEQUENTIAL, OR SPECIAL DAMAGES OF ANY NATURE WHATSOEVER FOR ANY
ACTION ARISING UNDER THIS AGREEMENT EXCEPT FOR A BREACH BY BUYER OF THE SOFTWARE
LICENSE SET FORTH IN ANNEX 6.
12.4 Any action for breach of this Agreement or to enforce any right
hereunder shall be commenced within two (2) years after the cause of action
accrues or it shall be deemed waived and barred (except that any action for
nonpayment may be brought at any time permitted by applicable law).
12.5 Subject to the provisions of Section 12.8 and 12.9, in the event
that due to the fault or negligence of Seller, Seller fails to Commission
Equipment for any of the Initial MTAs, by those dates that are mutually agreed
upon in writing (under the applicable Project Schedules in Annex 9) between the
parties as such dates are to occur for each such MTA, Seller agrees to pay to
Buyer as liquidated damages, an amount equal to * of the net Price of that
portion of the Initial MTA that Seller fails to complete Commissioning of, for
each day of delay, up to a maximum of * days. After such * period, if Seller
continues to be unable to complete Commissioning of the Initial MTA, Seller
shall pay to Buyer as liquidated damages an amount equal to *of the net Price of
that portion of the Initial MTA that Seller continues to be unable to complete
Commissioning of, for each additional week of delay occurring after such *
period, up to a maximum of * weeks. If, following such * period, Seller
continues to be unable to complete Commissioning of any
- --------
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 24
portion of the Initial MTA, Buyer may elect, upon written notice to Seller, to
terminate that portion of the Agreement relative to such Initial MTA and return
such Initial MTA, or portion thereof, to Seller at Seller's expense. Upon return
of Equipment included as part of the Initial MTA, Seller shall refund Buyer any
amounts paid for such Equipment and Services relative to such Initial MTA, or
portion thereof, pursuant to Section 5.1 hereof. For purposes of this Section
12.5, "Initial MTA" shall mean the greater of (i) initial Purchase Orders for
the MTAs as described in Section 1.0 of Annex 1 (as modified by Change Orders)
or (ii) the initial * of Purchase Orders under the Agreement.
12.5.1 For Purchase Orders other than orders for an Initial MTA
subject to the liquidated damages provisions pursuant to Section 12.5
hereinabove, remedies applicable to late deliveries will apply as follows:
During any quarter throughout the Term, on a quarterly basis, if
Seller shall have delivered less than * of Equipment within the intervals set
forth in Annex 10, based upon a percentage calculated using the Price of
Equipment actually delivered in proportion to (divided by) the Price of the same
Equipment forecasted and ordered, then Buyer shall be wholly relieved of its
obligation to purchase Equipment representing any balance of the Commitment as
set forth in Section 5.9 hereof.
Example: * = *
-----------------------------------------
*
* (Assume a price of * per BTS only for purposes of demonstration.)
Seller has met its obligation per the example.
12.6 Subject to the provisions of Section 12.8 and 12.9 and
Section 1.7.11 of Annex 1, in the event that Seller fails to provide the IS-41
Interoperability Software feature (Rev. B GSM MAP/IS-41) functionality, for
application onto any of Buyer's Systems, by June 1, 1996, for use by Buyer in
commercial service, Seller agrees to pay as liquidated damages and not as a
penalty, an amount equal to * of the net total Price of such Systems for each
day of delay, up to thirty (30) days, that Seller fails to provide the
Interoperability Software feature. After such * period, if Seller continues to
be unable to provide the Interoperability Software feature Seller shall pay to
Buyer as liquidated damages an amount equal to * of the net total Price of such
Systems for each week, up to * weeks, that Seller continues to be unable to
provide the Interoperability Software feature.
12.7 Subject to the provisions of Section 12.8 and 12.9, in the
event that Seller fails to provide Half Rate and Enhanced Full Rate ("EFR")
Vocoder Equipment to Buyer for use by Buyer on any of Buyer's Systems, by *,
then Seller agrees to pay to Buyer liquidated damages in the same manner as set
forth in Section 12.6.
- --------
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 25
12.8 In no event shall the cumulative amount of liquidated damages
payable hereunder for any reason under any or all of the provisions of this
Article 12 for a specific Initial MTA or System exceed * of the net total Price
of such MTA or System. Liquidated damages, if any, as described in Sections
12.5, 12.6 and 12.7 shall not be paid in cash; instead, Buyer shall be issued
credits for use in purchasing Add-on Equipment hereunder, and the use of such
credits shall reduce the Commitment (i.e., if Buyer has purchase credits as the
result of damages incurred by Seller hereunder, when Buyer uses such credits to
purchase Equipment, such credits shall count toward the Commitment). Except for
Buyer's option to return Equipment pursuant to Section 12.5, credit for
liquidated damages shall constitute Seller's sole liability, and Buyer's sole
remedy, for Seller's failure to perform pursuant to Sections 12.5, 12.6 and
12.7.
12.9 It is expressly understood that Seller shall not be responsible
for the payment of liquidated damages as the result of delays that occur by
reason of the failure of Buyer to timely complete its responsibilities as
defined hereunder, Project Services not purchased by Buyer from Seller
hereunder, Microwave Relocation or an event of force majeure as identified under
Article 8.
13. MICROWAVE RELOCATION
13.1 Unless otherwise agreed to between Buyer and Seller under a
separate Schedule to be added to this Agreement, Buyer will have the
responsibility of locating and clearing incumbent microwave links which are
necessary to be relocated in order to comply with FCC guidelines and in a time
frame to facilitate Seller's RF Network planning services as described in
Schedule B to Annex 8 hereof, including, but not limited to, the following
activities:
13.1.1 Buyer will provide to Seller information relative to the
location and technical specifications of existing microwave links within the
Network. At this point, Seller will assist Buyer in identifying possible
solutions for existing microwave interference, including but not limited to, (i)
complete or partial replacement of existing equipment; or (ii) use of fiber link
as alternative means of transmission; or (iii) the offer of channels on Buyer's
microwave link(s) for use by the incumbent microwave owner (hereinafter
"Incumbent").
13.1.2 After the preferred solution is identified, Buyer will
negotiate with the Incumbent to mutually agree upon an alternative means of
transmission and associated costs. If requested by Buyer, Seller shall engineer
and implement the agreed upon solution at an additional cost to be quoted by
Seller.
13.2 As an option available to Buyer, Seller will provide technical
assistance as requested by Buyer in effecting solutions described in Sections
13.1.1 and 13.1.2 hereinabove. However, Seller assumes no liability for Buyer's
failure to secure agreement with the Incumbent on such microwave relocation, nor
will Seller have any responsibility for limitations on Network operations should
Buyer and the Incumbent fail to agree on the means and/or costs of relocation.
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13.3 Buyer understands and agrees that Seller's RF Network design plan
described in Schedule B of Annex 8 is based upon and reliant upon the removal of
all such links and that the failure to so remove could cause a degradation of
Network capacity. Seller understands that Buyer may elect not to remove all
microwave links if removal thereof is not required by FCC guidelines or, in
Buyer's opinion, is not otherwise necessary, and Buyer may request Seller to
provide and/or implement an RF network design plan even though any such
microwave links as are not removed may cause some degradation of Network
capacity and/or performance.
14. ACCEPTANCE TESTING
14.1 On completion of Installation of Equipment furnished and
installed by Seller, Seller shall provide Buyer five (5) days prior written
notification that such Equipment is ready for Commissioning. Following such
notification, Buyer agrees to have a representative present to witness and
acknowledge completion of such testing. Seller or Seller's subcontractor, as
applicable, shall test the Equipment to determine Equipment conformity with the
standards and specifications (hereinafter "Commissioning Criteria") of the
applicable installation documentation as referenced in Annex 3, "Commissioning
Criteria," as may be amended from time to time, provided, that such amendment
shall not result in the degradation of the overall testing of the Equipment.
14.2 Upon completion of Commissioning, Seller shall perform the
Interworking Testing procedures substantially in the form set forth in Schedule
C of Annex 8, "Interworking Testing." Buyer and Seller shall agree upon a final
test plan in the manner described in Schedule C. With respect to Other Vendor
equipment, Seller will coordinate Interworking Testing with Buyer or Buyer's
designated contractor; however, Seller is not responsible for schedule delays
not caused by Seller or the performance of any equipment not supplied by Seller.
If Seller is unable to successfully complete Interworking Testing due to factors
which are not within Seller's responsibility, it shall be the Buyer's
responsibility to promptly correct such factors in a time frame to allow the
milestone events within the Project Schedule to be met.
14.3 Buyer shall conditionally accept the Equipment and associated
Services upon the earlier of (a) successful completion of the tests described in
Sections 14.1 and 14.2 hereof, as applicable, taking into account the Project
Services being provided, or (b) the Equipment (or any portion thereof) being
placed into commercial service ("Conditional Acceptance").
14.3.1 Within thirty (30) days following the date of Conditional
Acceptance, Buyer shall either accept the Equipment in writing as provided in
Schedule B of Annex 8 and Annex 4, "Conditional Acceptance and Final Acceptance
Notices," or notify Seller in writing specifying in reasonable detail those
particulars in which the criteria for Acceptance has not been met
("non-conformity items"). With respect to any such non-conformity items, Seller
shall promptly proceed to take corrective action, and following correction,
Buyer shall accept the Equipment in writing as provided in Annex 4 ("Final
Acceptance").
14.3.2 The failure of Buyer to notify Seller within thirty (30)
days after Conditional Acceptance (or, in the case of correction, thirty [30]
days following such correction)
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of any particulars in which the criteria for Conditional Acceptance have not
been met, shall be deemed to constitute Final Acceptance of such Equipment.
15. COVERAGE, INTERFERENCE AND THIRD-PARTY FACILITIES
15.1 Seller shall have no liability as a result of non-performance,
failures or poor performance of the System caused by, resulting from or
attributable to Buyer-provided designs, specifications or equipment
configuration requirements. Seller may rely upon and utilize any Buyer-provided
designs, studies, specifications or requirements, including but not limited to
microwave path studies, RF propagation studies and tower location and loading
requirements, without liability therefor. If Seller becomes aware of any
apparent deficiencies in any such Buyer-provided designs, studies,
specifications or requirements, Seller shall advise Buyer thereof and shall not
thereafter proceed with any related Network design until any such deficiencies
are resolved or until Buyer and Seller agree to a method to correct such
deficiencies or agree to proceed without regard to such deficiencies and without
liability of Seller therefor.
15.2 Seller shall not be responsible for any failures or inadequacies
of performance resulting from equipment not supplied and installed by Seller or
Seller's agents or subcontractors pursuant to this Agreement. Seller shall not
be responsible for interference or disruption of service caused by operation of
other radio systems, lightning, motor ignition or other similar interference not
reasonably anticipated or over which there is not reasonable control. In the
event Buyer utilizes facilities or services supplied by others such as common
carrier circuits, antennas or towers, Buyer shall have total responsibility for
the availability or adequacy of such services or facilities.
15.3 The parties recognize that operation of BSS Equipment alone or
near other radio transmitters may result in interference to BSS Equipment or to
other stations. Seller shall provide to Buyer, upon its request, reasonable
technical assistance to identify the cause of any such interference. In
connection with any interference problems, if Seller was not responsible for
RF/Network engineering design, Buyer shall contact the design firm or such other
third party vendor or supplier as it deems appropriate to determine whether the
problem is a design or an Equipment problem. To the extent such interference is
caused by malfunction of Equipment, or failure of Equipment to meet the
Specifications (but excluding malfunctions or failure caused by any of the
circumstances in Section 7.6.1), such correction shall be at Seller's sole cost
and expense. If Seller was not responsible for such interference or malfunction
of Equipment, Seller shall be paid for all costs and expenses incurred in
correcting the cause of interference and/or malfunction of Equipment. Any
disputes under this Section 15.3, shall be submitted immediately to arbitration
in accordance with Section 23.13.
16. REGULATORY COMPLIANCE
16.1 Seller shall furnish and install Equipment so that it shall
comply in all material respects with all Federal, State, and local laws and
regulations (including, but not limited to OSHA) in force on the date shipment
of such Equipment of this Agreement, which directly impose obligations upon the
manufacturer, Seller, or installer thereof.
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16.2 The prices set forth for the Equipment described herein are based
on Seller's design, manufacture, and delivery of the Equipment pursuant to its
design criteria and manufacturing processes and procedures in effect on the
Effective Date of this Agreement. If, as a result of the imposition of
requirements by any Federal, State or local government during the Term of this
Agreement there is a change in such criteria, processes or procedure or any
change in the Equipment, the Prices will be adjusted equitably, as mutually
agreed to between the parties, to reflect the added cost and expense of such
change. Any such changes shall include, by way of example and not by way of
limitation, mandatory compliance with Standards.
17. CHANGES
17.1 Up to sixty (60) days prior to the scheduled Ship Date (or such
later time as is acceptable to Seller) and pursuant to Section 17.6, Buyer may
request Equipment addition(s) or deletion(s) to an original Equipment
configuration. All such Equipment reconfigurations or changes to the Statement
of Work, Initial Project Schedule or other Project Schedules ("Changes") shall
be subject to prior written approval of Seller, which shall not be unreasonably
withheld.
17.2 Except as provided in 17.3 below, all Changes shall be documented
in a written change order ("Change Order"), which shall be executed by Buyer and
returned to Seller prior to implementation of the requested Changes. The Change
Order shall detail any adjustments to the Price, Statement of Work, Project
Schedule or Schedules required by Seller for any aspect of its performance under
this Agreement.
17.3 Buyer understands and agrees that the Price is based on Seller's
providing the Services only as herein specified. Should any factors (e.g.,
changed site conditions) cause an increase in the extent of Services to be
provided, then Seller will promptly notify Buyer for authorization to proceed
with performance of the additional Services identified. Upon Buyer's
authorization, such Changes shall be documented in a Change Order. Seller shall
also be granted an equitable extension in the time for performance due to the
occurrence of any such changed conditions or other factors outside Seller's
control.
17.3.1 Upon written request of Buyer for a Change that entails
additional services totaling $10,000, or less, and upon written acceptance
thereof by Seller, Seller will proceed in good faith to implement such Change
prior to receipt of an executed Change Order. Within five (5) days following
Buyer's written request, the parties shall agree upon an appropriate price for
such Changes, all of which will be summarized in a subsequent Change Order and
executed by an authorized representative of Buyer within fifteen (15) days
following the date of the request for Change.
17.4 Calculations for any Equipment reconfigurations prior to the Ship
Date shall be based on Prices set forth in Annex 1, provided that (i) any
additions shall include any necessary engineering, Installation and testing
charges and (ii) any deletions shall include applicable
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discounts, and further provided that the net cumulative amount of Changes shall
not reduce the Price of a Purchase Order by more than twenty percent (20%).
17.5 Buyer understands and agrees that the execution of this Agreement
creates a firm obligation to purchase the Initial Network set forth in Section
1.0 of Annex 1 (as such Initial Network may be changed pursuant to Change
Orders). Except for the Initial Network order, which is non-cancellable (but is
subject to Change Orders), Buyer may elect to cancel, upon prior written
notification to Seller, Purchase Orders prior to shipment of Equipment subject
to the following:
17.5.1 Without charge, Buyer may cancel any Purchase Order no
later than ninety (90) days prior to the earliest scheduled Ship Date; or
17.5.2 If Buyer cancels a Purchase Order less than ninety (90)
days prior to the earliest scheduled Ship Date, Buyer shall pay a cancellation
charge of ten percent (10%) of the Price to Seller; or
17.5.3 If Buyer cancels a Purchase Order less than sixty (60)
days prior to the earliest scheduled Ship Date, Buyer shall pay to Seller a
cancellation charge of fifteen percent (15%) of the Price; or
17.5.4 If Buyer cancels a Purchase Order less than thirty (30)
days prior to the earliest scheduled Ship Date, Buyer shall pay to Seller a
cancellation charge of twenty percent (20%) of the Price.
17.5.5 Buyer may not cancel a Purchase Order subsequent to the
Ship Date. The payment of such charges shall be Seller's sole remedy and Buyer's
sole obligation for such canceled Purchase Order(s).
17.6 Buyer and Seller acknowledge that, as of the Effective Date, the
Network design of the Hawaii, Portland, Salt Lake City and El Paso Initial MTAs
has not been completed and that the completion of such analysis will necessitate
Changes to the Initial MTAs. Any such Change that is desired by Buyer shall be
documented pursuant to the Change Order procedure described in Section 17.2,
shall be exempt from cancellation charges as referred to under Section 17.5, and
shall not be subject to subsection (ii) of Section 17.4.
17.7 Any changes requested by Buyer that involve the return and/or
exchange of OEM Equipment shall be subject to the standard policies of the
applicable OEM vendor.
18. CONDITION OF INSTALLATION SITE(S)
or those Installation Sites where Seller is not responsible for site
acquisition pursuant to Schedule D of Annex 8 hereof, Buyer warrants that to the
best of its knowledge the Installation Site is free from hazardous levels of
friable asbestos or other hazardous contamination. In the event that such
contamination is found to be present at the Installation Site, Seller shall be
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relieved of all of its obligations hereunder with respect to that Site until
such contamination is removed. In the event that Buyer fails or refuses to
remove such contamination, Seller shall have the right to remove the Equipment
or portions thereof if already delivered and relocate the Equipment to an
alternate site provided by Buyer and charge Buyer for (i) any additional
delivery charges to the new Installation Site, (ii) all materials expended at
the site including cabling, permanently affixed equipment, and those items which
cannot reasonably be removed for use elsewhere, (iii) specifically ordered items
requested by Buyer, and (iv) all labor and materials expended at the sites
relating to the relocation using Seller's then current rates.
19. RELEASE OF INFORMATION
19.1 Unless required by law, or as otherwise permitted under this
Agreement, Buyer and Seller agree that the terms and conditions of this
Agreement shall not be disclosed to any other party without the prior written
consent of the other; provided, however, that Seller may release information to
its subcontractor(s) or potential subcontractor(s) for purposes of performance
of this Agreement, and/or to Northern Telecom Ltd., its research and development
affiliates, Bell Northern Research, BNR Inc., and Nortel Matra or any
wholly-owned subsidiaries ("Affiliate") on a need-to-know basis; and, provided
further that Buyer may release information to Buyer Affiliates as such
Affiliates are defined in Section 23.1.1 herein.
19.2 Neither Buyer nor Seller shall publish or use any advertising,
sales promotion, press releases or publicity matters relating to this Agreement
without the prior written approval of the other, which approval shall not be
unreasonably withheld.
20. CONFIDENTIALITY
Buyer, Seller and Seller's Affiliates shall receive in confidence from
each other all technical information, business information, documentation and
expertise which is either (i) stamped or otherwise marked as being confidential
or proprietary whether in written or electronic form, or (ii) if delivered in
oral form, is summarized in a written memorandum and listed as being
confidential ("Confidential Information") and shall not, except as previously
authorized in writing by the other party, publish, disclose or make use of such
information (other than in connection with the operation or maintenance of the
System, or except as required by law and after notice to the other party),
unless and until the Confidential Information shall have ceased to be
proprietary as evidenced by general public knowledge or shall have been legally
acquired by such party free of any confidentiality obligations. This prohibition
against disclosure, publication or use of Confidential Information shall not
restrict either party from developing similar information in the exercise of its
own technical skill, so long as such other information is independently
developed by such party without making use of Confidential Information.
20.1 Nothing herein shall prevent any recipient of Confidential
Information from disclosing such information to lenders as may be necessary in
connection with information that is exchanged between Buyer and lender
concerning this Agreement; provided, however, that the party disclosing any such
Confidential Information shall inform such lenders of the restrictions
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imposed by this Agreement and shall remain responsible for assuring that such
persons maintain the confidentiality of the Confidential Information.
21. INTERCONNECTION
21.1 Buyer understands that Buyer is given the option to purchase
individual units of Equipment hereunder, and that such units of Equipment
purchased hereunder do not necessarily provide Buyer with a complete System. In
some cases, Buyer may intend to interconnect the Equipment to equipment and
facilities for interconnection which may not have been purchased under this
Agreement. In the event that Buyer interconnects Equipment to equipment not
purchased under this Agreement, which may include Other Vendor equipment, it is
understood and agreed that the making and maintaining of all necessary
arrangements (whether commercial, legal or otherwise) with the supplier of such
equipment, including not only arrangements necessary to permit the timely
performance by Seller of its responsibilities under this Agreement, (e.g.,
physical and remote dial-up access for installation and services purposes), but
also any arrangements necessary for the ongoing operation of the equipment in
conjunction with the Equipment, shall be solely the responsibility of Buyer, and
failure by Buyer to timely make or maintain, any necessary arrangements shall
not excuse Buyer from its obligations under this Agreement. Except as provided
in Section 21.4, Seller makes no warranty, and shall have no responsibility
whatsoever under this Agreement, for the proper performance of equipment not
purchased hereunder, including the performance of Other Vendor equipment, except
it is the intention of the parties hereto that any problem, defect or failure in
the Equipment, the System or the Network shall be corrected as promptly as
practicable regardless of fault, and in this regard Seller agrees to use all
reasonable efforts to work and cooperate with Buyer and any other vendor or
contractor to correct any such problem, defect or failure to the extent that
Seller has the capability and/or authorization to do so. Seller shall, at
Buyer's request, assist Buyer in determining the cause of such problem, defect
or failure and recommend the appropriate action. Seller shall upon its receipt
and acceptance of a Purchase Order from Buyer use all reasonable efforts to
correct any problem, defect or failure in the System or the Network (whether or
not such problem, defect or failure is the responsibility of Seller) as promptly
as practicable and bill Buyer for such; provided, however, that Seller shall not
be required to repair or modify any Other Vendor equipment and/or OEM Equipment
unless Seller has the ability and authorization to do so. If Buyer and Seller
disagree as to the cause of the problem, defect or failure, or the action to be
taken, the parties shall thereafter negotiate in good faith to determine whether
such problem, defect or failure was the responsibility of Seller or any other
party and if they are unable to agree such dispute shall be submitted to
arbitration in accordance with Section 23.13 hereof. If determined (whether by
agreement or arbitration) that such problem, defect or failure was not the
responsibility of Seller, Buyer shall promptly reimburse Seller for all costs
and expenses incurred in connection with the correction of such.
21.2 Except as set forth in Section 21.4, Buyer further acknowledges
that Seller makes no warranty that the System or individual units of Equipment
will operate, as specified in Open Interfaces or otherwise, in conjunction with
Other Vendor equipment. If Buyer wishes Seller to conduct compatibility testing
between Seller's Equipment and other equipment not purchased
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from Seller, Buyer and Seller shall reach agreement on the scope of such testing
and charges associated therewith.
21.3 Buyer further acknowledges that the proper operation of the
Equipment and/or the availability of optional Software features, is dependent
upon having the appropriate Software Release Load operating on the Switch.
21.4 Seller agrees, during the Term of this Agreement and for the
initial five (5) year period thereafter, to actively develop products to support
GSM based PCS 1900 technology as such technology may evolve and be defined by
PCS - 1900 Standards adopted by ANSI and other applicable accredited standards
groups. The initial design of Seller BSS Equipment is based upon the TIA Joint
Technical Committee ("JTC") Air Interface standard document P.N. 3389, and the
initial design of Seller NSS Equipment is based upon TIA Committee TR 46 MAP
Interface standard document P.N. 3342, as those Standards are currently drafted.
Seller Equipment will continue to be based upon Standards as they evolve,
subject to the following conditions:
(a) Seller retains the right, in its sole discretion, to decide
whether or not to comply with changes in Standards, either as those Standards
are initially adopted or are later modified, except as such non-compliance shall
1) prevent Buyer PCS 1900 subscribers from roaming among PCS, AMPs or GSM
systems supplied by other equipment vendors, or subscribers from other PCS, AMPs
or GSM systems from roaming on Buyer's PCS 1900 System, or from being able to
use subscriber units supplied by multiple vendors on Buyer's network (to the
extent, and not greater than, subscriber unit functionality is implemented in
Buyer's network), or 2) prevent Buyer from utilizing BSC, MSC or HLR equipment
supplied by other equipment vendors or from being able to interconnect its
network to the PSTN.
(b) If any such changes in Standards result in additional Seller
development/manufacturing costs, Seller reserves the right to reasonably adjust
its Prices to reflect such additional costs.
(c) Subject to Seller's right to assess reasonable additional
charges as specified in (b) above, Seller will retrofit Equipment purchased and
installed under this Agreement so that such Equipment complies with the same
Standards utilized by Seller for new products.
22. ANNEXES
The following Annexes shall form an integral part of this Agreement as though
written out in full in this Agreement:
Annex 1 Equipment/Pricing
Annex 2 Statement of Work/Sample Project Schedule
Annex 3 Commissioning Criteria
Annex 4 Conditional Acceptance and Final Acceptance Notices
Annex 5 Seller Warranty Services
Annex 6 Software License
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Annex 7 Documentation
Annex 8 Project Services
Schedule A - Construction/Civil Works Services, Statement of Work
Schedule B -- Network Engineering and Support Services
Schedule C - Interworking Testing
Schedule D - Site Acquisition Services, Statement of Work
Annex 9 Initial Project Schedule
Annex 10 NSS/BSS Equipment Delivery Intervals
Annex 11 Class A Changes
23. GENERAL
23.1 Buyer may assign this Agreement to a third party with the prior
written consent of Seller, which consent shall not be unreasonably withheld,
provided that such assignee (1) furnishes adequate financial/credit assurances;
(2) is not a direct competitor of Seller who manufactures or sells wireless
communications systems; (3) agrees to abide by the terms of the Software License
set forth in Annex 6; and (4) agrees to such other reasonable terms and
conditions as Seller may request. Upon Seller's consent to such an assignment or
sublicense of or under this Agreement, Buyer shall be relieved of primary
responsibility for performance of Buyer's obligations under this Agreement,
except with respect to any obligations relating to any Confidential Information
or Software which Buyer may still have in its possession. Seller reserves the
right to refuse to honor any assignment or sublicense which, in the opinion of
its legal counsel, would require it to violate any United States export
restriction, other law, or regulation. Seller reserves the right to subcontract
any portion of its obligation under this Agreement, but no such subcontract
shall relieve Seller of primary responsibility for performance of Seller's
obligations under this Agreement.
23.1.1 A "Buyer Affiliate" under this Agreement shall mean an
entity in which Buyer directly owns an equity interest of at least twenty-five
percent (25%). Any Buyer Affiliate may place an order pursuant to the terms of
this Agreement, provided that such Affiliate makes available to Seller, in
sufficient advance time to allow for Seller's processing of the Purchase Order
(no less than thirty [30] days prior to the scheduled Ship Date), information
regarding such Affiliate's financial resources, in order that Seller can be
reasonably assured that the Buyer Affiliate is financially capable of performing
its obligations under the Purchase Order; and, a written acknowledgment by such
Buyer Affiliate that by placing such order, the Buyer Affiliate agrees to be
bound by the terms and conditions of this Agreement, including but not limited
to, confidentiality and Software license provisions. If Seller is not reasonably
satisfied that any such Affiliate is financially capable of performing its
obligations under the Purchase Order, then Seller shall have no obligation to
supply Equipment or Services to such Affiliate under such Purchase Order, unless
Buyer and Seller can mutually agree on an alternative method to assure Seller
that it will receive payment from Buyer's Affiliate.
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23.1.2 It is understood that purchases by Buyer Affiliates
under this Agreement shall accrue toward the Commitment.
23.2 Notices and other communications shall be transmitted in
writing by either (1) Certified U.S. Mail, postage prepaid, return receipt
requested, (2) overnight courier, or (3) telecopy, addressed to the parties as
follows:
Northern Telecom Inc.
2435 N. Central Expressway
Richardson, Texas 75080
Attention: Director, Contracts
cc: Program Manager
Telecopy no. (214) 301-2675
Western PCS Corporation
330 120th Avenue, NE
Suite 200
Bellevue, Washington 98005
Attention: Chief Executive Officer and
Legal Department
Telecopy no. (206) 450-7520
With a copy to:
Barry A. Adelman
Rubin, Baum, Levin, Constant & Feldman
30 Rockefeller Plaza
New York, New York 10112
Telecopy no. (212) 698-7825
Any notice given pursuant to this Section 23.2 shall be effective five (5) days
after the day it is mailed or upon receipt as evidenced by the U.S. Postal
Service return receipt card, whichever is earlier, or if by courier upon
receipt, or if by telecopy upon confirmation of receipt.
23.3 This Agreement may not be modified or amended or any rights
of a party to it waived except in a writing signed by duly authorized
representatives of the parties hereto.
23.4 Failure by either party at any time to require performance by
the other party or to claim a breach of any provision of this Agreement shall
not be construed as affecting any subsequent breach or the right to require
performance with respect thereto or to claim a breach with respect thereto.
23.5 Seller will obtain and maintain, during the Term of this
Agreement, at its own cost and expense, all insurance and/or bonds required by
law, including, but not limited to:
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23.5.1 Workers' Compensation insurance in the form and amount
prescribed by law of the state in which the Services are performed;
Employers' liability insurance with limits of at least $1,000,000
for each occurrence;
Comprehensive general liability insurance with a broad form
endorsement which includes, but is not limited to, coverage for products
liability, personal injury, broad form property damage, coverage for completed
operations, and contractual liability, with respect to the liability assumed by
Seller hereunder. Limits will be not less than $2,000,000 combined single limit
for each occurrence;
Comprehensive automobile liability insurance covering the use and
maintenance of owned, non-owned, hired and rented vehicles with limits of not
less than $1,000,000 combined single limit coverage for each occurrence; and
Umbrella liability insurance with limits of at least $5,000,000
for each occurrence.
23.5.2 At Buyer's request, Seller will furnish a certificate or
adequate proof of the foregoing insurance or proof of self-insurance. Buyer will
allow Seller, upon provision of such adequate proof of self-insurance, to
self-insure the insurance requirements contained in this clause.
23.5.3 Seller will require its subcontractors who may enter upon
Buyer's premises to maintain similar insurance.
23.5.4 The certificate furnished by Seller will contain a clause
stating that Buyer will be notified in writing at least sixty (60) calendar days
prior to cancellation of, or any material change in, the policy.
23.6 Each party shall be liable for direct losses incurred by the
other party due to personal injury or damage to tangible property, including the
Hardware, which results from the negligence of that party's employees or agents,
provided, however, that nothing in this Section shall affect or in any way
increase Seller's obligation under this Agreement with respect to the
performance of the Hardware and/or Software. Except for personal injury or
except as set forth in Article 9 or Section 12.8 of this Agreement, the total
liability of either party for all claims of any kind for any loss or damage,
whether in contract, warranty, tort (including negligence), strict liability or
otherwise, arising out of, connected with, or resulting from the performance or
non-performance of this Agreement shall in no case exceed the total Price of all
Purchase Orders for a specific MTA accepted under this Agreement giving rise to
the claim, except for the liability of Buyer with respect to breach of the
Software License.
23.7 The rights and obligations of the parties and all interpretations
and performance of this Agreement shall be governed in all respects by the laws
of the State of Texas except for its rules with respect to the conflict of laws.
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23.8 Article headings are inserted for convenience only and shall not
be used in any way to construe the terms of this Agreement.
23.9 The invalidity in whole or in part, of any provision of this
Agreement shall not affect the validity of the remainder of such provision of
this Agreement.
23.10 This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute one and the same instrument.
23.11 Each party hereto represents and warrants that (i) it has
obtained all necessary approvals, consents and authorizations of third parties
and governmental authorities to enter into this Agreement and to perform and
carry out its obligations hereunder; (ii) the persons executing this agreement
on its behalf have express authority to do so, and, in so doing, to bind the
party thereto; (iii) the execution, delivery, and performance of this Agreement
does not violate any provision of any bylaw, charter, regulation, or any other
governing authority of the party; and (iv) the execution, delivery and
performance of this Agreement has been duly authorized by all necessary
partnership or corporate action and this Agreement is a valid and binding
obligation of such party, enforceable in accordance with its terms.
23.11.1 Seller acknowledges that as of the Effective Date,
Buyer has not received the required licenses from the FCC to operate the Initial
MTAs.
23.12 This Agreement constitutes the entire agreement between
Seller and the Buyer with respect to the subject matter hereof and supersedes
all previous negotiations, proposals, commitments, writings, advertisements,
publications and understandings of any nature whatsoever. No agent, employee or
representative of Seller has any authority to bind Seller to any affirmation,
representation, or warranty concerning the System, except as stated in this
Agreement and unless such affirmation, representation, or warranty is
specifically included within this Agreement, it shall not be enforceable by
Buyer or any assignee or sublicensee of Buyer.
23.13 In the event any dispute arises hereunder between the
parties hereto, the parties agree that the matter shall be referred to the
consideration of an arbitrator mutually agreeable to both parties, or, if no
such arbitrator can be identified, to a panel of three arbitrators appointed as
set forth in Section 23.13.2 herein. Each party to the arbitration shall pay the
compensation, costs, and expenses of the arbitrator appointed in its behalf and
all fees and expenses of its own witnesses, exhibits, and counsel. The
compensation, cost and expenses of the single arbitrator or the additional
arbitrator in the panel of arbitrators shall be paid in equal shares by the
parties.
23.13.1 The arbitration shall be conducted on a
confidential basis, under the U.S. Arbitration Act, if applicable, and the
then-current Commercial Arbitration Rules of the American Arbitration
Association strictly in accordance with the terms of this Agreement and the
substantive law of the State of Texas. Neither party shall institute a
proceeding hereunder unless at least sixty (60) days prior thereto such party
shall have furnished to the other notice of its intent to do so. Neither party
shall be precluded hereby from seeking provisional remedies in the courts
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<PAGE> 37
of any jurisdiction including, but not limited to, temporary restraining orders
and preliminary injunctions, to protect its rights and interests, but such shall
not be sought as a means to avoid or stay arbitration, nor shall either party be
precluded from pursuing any available remedies with respect to protection of its
Software or confidential information.
23.13.2 In the event the parties hereto cannot agree upon a
mutually-acceptable arbitrator pursuant to Section 12.13, each party shall
appoint one arbitrator, and such two arbitrators shall in turn appoint a third
arbitrator, and such three arbitrators shall constitute the panel. The
determination of the arbitrator or arbitrators with respect to claims between
the parties shall be final, binding and conclusive upon the parties, except for
any determination relating to or involving the Software or confidential,
technical or trade secret information of the parties. Should either party fail
to appoint an arbitrator and to notify the other party of such appointment
within thirty (30) days after a demand has been made in writing by the other
party for such appointment, or should either arbitrator so appointed decline to
serve, then the arbitrator duly appointed and willing to serve shall be the sole
arbitrator to consider the dispute.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their representatives being thereunto duly authorized.
WESTERN PCS CORPORATION NORTHERN TELECOM INC.
By: /s/ By: /s/
-------------------------------- --------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
Date: Date:
------------------------------ ------------------------------
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<PAGE> 1
EXHIBIT 10.3
PURCHASE AGREEMENT
BETWEEN
MOTOROLA NORTEL COMMUNICATIONS CO.
AND
GENERAL CELLULAR CORPORATION
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1. SELLER UNDERTAKINGS ........................................... 1
ARTICLE 2. TERM .......................................................... 2
ARTICLE 3. ADD-ON EQUIPMENT/SERVICES/SOFTWARE ............................ 2
ARTICLE 4. PRICE AND TERMS OF PAYMENT .................................... 3
ARTICLE 5. DELIVERY, RISK OF LOSS, TITLE ................................. 5
ARTICLE 6. SUBCONTRACTING ................................................ 6
ARTICLE 7. WARRANTIES, REMEDIES AND LIMITATION OF
WARRANTIES AND REMEDIES AND DISCLAIMERS OF
WARRANTIES AND LIABILITY ...................................... 6
ARTICLE 8. POST WARRANTY SUPPORT ......................................... 9
ARTICLE 9. FORCE MAJEURE ................................................. 10
ARTICLE 10. PATENT AND COPYRIGHT INFRINGEMENTS ............................ 10
ARTICLE 11. SOFTWARE LICENSE .............................................. 11
ARTICLE 12. REMEDIES ...................................................... 11
ARTICLE 13. BUYER'S RESPONSIBILITIES ...................................... 12
ARTICLE 14. TESTING, TURNOVER AND ACCEPTANCE .............................. 13
ARTICLE 15. COVERAGE, INTERFERENCE AND THIRD-PARTY FACILITIES ............. 14
ARTICLE 16. REGULATORY COMPLIANCE ......................................... 14
ARTICLE 17. CHANGES ....................................................... 15
ARTICLE 18. CONFIDENTIALITY ............................................... 16
ARTICLE 19. SOFTWARE UPDATES .............................................. 16
ARTICLE 20. CONDITION OF INSTALLATION SITE(S) ............................. 17
ARTICLE 21. RELEASE OF INFORMATION ........................................ 17
ARTICLE 22. ANNEXES ....................................................... 17
ARTICLE 23. GENERAL ....................................................... 18
</TABLE>
-i-
<PAGE> 3
ANNEXES
ANNEX 1 - SYSTEM PRICING
ANNEX 2 - PAYMENT TERMS
ANNEX 3 - STATEMENT OF WORK/PROJECT SCHEDULE
ANNEX 4 - ACCEPTANCE CRITERIA AND TESTING
ANNEX 5 - TURNOVER NOTICE
ANNEX 6 - ACCEPTANCE NOTICE
ANNEX 7 - ADD-ON PRICING
ANNEX 8 - TECHNICAL ASSISTANCE SERVICES
ANNEX 9 - SOFTWARE LICENSE
ANNEX 10 - ADDITIONAL SELLER COMMITMENTS
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<PAGE> 4
MOTOROLA NORTEL COMMUNICATIONS CO.
DMS-MTX PURCHASE AGREEMENT
MOTOROLA NORTEL Communications Co., a Delaware general partnership,
(hereinafter "MOTOROLA NORTEL" or "Seller"), with offices at 2435 N. Central
Expressway, Richardson, Texas 75080, and General Cellular Corporation for and
on behalf of itself and its Affiliates as set forth in Section 23.1.1 ("Buyer")
a Delaware corporation with offices at 1891 Woolner Avenue, Fairfield,
California 94533, agree as follows:
1. SELLER UNDERTAKINGS
1.1 Seller agrees to:
1.1.1 Engineer, furnish, install and test ("E, F, I and T")
Seller's cellular telecommunications DMS-MTX, 800CM equipment and the
Conversion Equipment (hereinafter "Equipment"), conforming to the applicable
sections of each of (1) the Northern Telecom Practices (hereinafter "NTPs"),
(2) the NovAtel System Performance Specifications, both incorporated herein by
reference (sometimes hereinafter collectively referred to as the
"Specifications") as such Specifications may be modified, changed, or amended
from time to time, provided, however, that such modifications, changes or
amendments shall not adversely affect the System performance/functionality and
will be provided at no charge, and (3) a configuration substantially similar to
the configuration set forth in Annex 1, "Equipment, Software List and
Services," or such other configurations as may be ordered pursuant to Section 3
hereof (which configurations may be changed pursuant to Section 17 herein).
"Conversion Equipment" shall mean Northern Telecom Inc. ("NTI")
transceivers, Common Equipment ("CE") and RF frames identified in Annexes 1 and
7 hereof, converting existing 800CM cell site equipment to allow for operation
as part of an NTI System.
"Equipment" shall also be deemed to include OEM Equipment when ordered
pursuant to a Purchase Order submitted hereunder, subject to the limitations
expressed throughout the Agreement or where product distinctions are noted.
1.1.2 Grant to the Buyer on behalf of its supplier a
non-exclusive, paid-up license to use the proprietary software integral to the
Equipment as defined in Section 11.2 (hereinafter "Software"), the Equipment
and Software sometimes being hereafter collectively referred to as the
"System," with each System including one (1) DMS-MTX cellular switching
component. As used herein, references to a "System" shall mean any one of
those Systems specifically identified in Annex 1 hereof or that may be ordered
pursuant to Section 3 hereof.
1.1.3 Carry out the installation of the System (hereinafter
"Installation") in accordance with the statement of work and Project Schedule,
(hereinafter "Statement of Work"), included as Annex 3, at the location(s)
specified therein, (hereinafter "Installation Site[s]").
<PAGE> 5
Seller's obligation to meet the dates set forth in the Project
Schedule is contingent upon Buyer's timely performance of its obligations, and
any delay by Buyer may result in delays on Seller's part.
1.1.4 Coordinate the delivery and manage the installation
and testing of miscellaneous items of non-NTI equipment ("OEM Equipment"), when
such services are included in the Price pursuant to a Purchase Order submitted
hereunder.
2. TERM
This Agreement shall become effective on the date of execution by the
last party subscribing (hereinafter "Effective Date") and remain in effect
thereafter for a period of three (3) consecutive years and forty-five (45) days
(hereinafter "Term"), subject to the additional periods referred to in Section
3.1 herein. Provisions of this Agreement, that by their sense and context are
intended to survive performance by either or both parties, shall so survive the
completion, expiration, termination or cancellation of this Agreement. This
Agreement may be extended upon the mutual written consent of the parties
hereto.
3. ADD-ON EQUIPMENT/SERVICES/SOFTWARE
3.1 For a period of five (5) years from the Effective Date, Buyer
may order additional Systems, Expansions, Merchandise, or Conversion Equipment
hardware components and Software (hereinafter "Add-on Equipment") at the prices
stated in Annex 7, "Add-on Pricing." For purposes of this Agreement,
"Expansion" shall mean that Add-on Equipment which requires Seller engineering
and installation/commissioning services; "Merchandise" shall mean (with the
exception of Systems) all other Add-on Equipment.
3.2 Unless otherwise stated, Add-on Prices are exclusive of
Seller's charges for any installation services associated therewith, and the
charges for any associated installation service shall be at Seller's then
current charges.
3.3 Purchase orders issued by Buyer to Seller shall refer to and
incorporate by reference the terms and conditions of this Agreement. To the
extent that any terms and conditions contained on Buyer's orders or Seller's
acknowledgments conflict with or are in addition to those terms and conditions
contained herein, such conflicting or additional terms and conditions shall be
null and void and the terms and conditions of this Agreement shall govern,
unless Buyer and Seller acknowledge such conflicting/additional terms and
conditions in writing.
3.4 Seller reserves the right to reject any purchase order that in
Seller's reasonable estimation is not in compliance with the terms of the
Agreement, or if Buyer has not fulfilled its obligations under this Agreement
or is otherwise in default. All obligations of Seller to accept any purchase
order and/or to perform Installation Services pursuant thereto shall be subject
to Seller's capability to so perform given any adverse conditions that may
prevail at the time of receipt of any such purchase order; provided, however,
that Seller shall use reasonable efforts to avoid or
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<PAGE> 6
remove such causes of non-performance and shall proceed to perform its
obligations with dispatch whenever such causes are removed or cease.
Each such purchase order shall specify:
(a) The description of the ordered Equipment and/or Software;
(b) Requested place and date of delivery as previously agreed by
Seller;
(c) The price for the ordered Equipment and/or Software as set
forth in Annex 7 hereof;
(d) Prices for Equipment engineering, Installation and field
testing to be quoted by Seller, together with a mutually agreed Installation
and Turnover schedule;
(e) Installation Site(s) where applicable;
(f) Whether payment for such purchase order shall be made with
funds provided under the Financing Arrangements defined in Section 4.7 hereof.
(g) Other appropriate information as may be required by Seller
necessary to fill the purchase order, e.g., Buyer's floor plan and frequency
plan; and
(h) Location to which the applicable invoice shall be sent for
payment.
4. PRICE AND TERMS OF PAYMENT
4.1 Buyer shall purchase the Equipment and the Installation, and
pay a fee for the license to use the Software for the price (hereinafter
"Price") in accordance with the terms set forth in Annex 2, "Payment Terms."
The terms of this Article 4 shall also apply to Expansion and Merchandise
purchases.
4.2 Upon the occurrence of each event listed in the milestone
payment schedule set forth in Annex 2, the appropriate portion of the Price
shall be invoiced to Buyer by Seller. All sums invoiced shall become due and
payable on the thirtieth (30th) day following the date of the applicable
invoice.
4.3 For additional System and Expansion purchases, the "Effective
Date" will mean Seller's acceptance of the applicable Purchase Order. Any
additional monies that become due to Seller (including, without limitation,
Merchandise orders, such items as are described in Section 4.5 and Expansion
purchases wherein Installation is not provided by Seller) shall be invoiced *
upon shipment, or upon completion of Services performed, and paid to Seller by
Buyer
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 7
within thirty (30) days of Seller's invoicing Buyer therefor. During a System
Installation Seller may invoice on a per site basis upon completion of the
milestone events.
4.4 All amounts past due shall accrue interest from their due
dates at a rate of * per month (or such lesser rate as may be the maximum
permissible rate under applicable law). Seller agrees to waive any interest
charges that accrue prior to September 30, 1993.
4.5 Except for any franchise tax or any tax assessed on Seller's
income, Buyer shall pay to Seller the amount of any sales and/or use tax, duty,
excise tax, fee or similar charges which Seller may be required to pay because
of its performance of this Agreement. Personal property taxes assessable on
the Equipment shall be the responsibility of Buyer. To the extent Seller is
required by law to collect such taxes (state or local), * thereof shall be
added to invoices as separately stated charges and paid in full by Buyer,
unless the Buyer is exempt from such taxes and furnishes Seller with a
certificate of exemption prior to issuance of invoice in a form reasonably
acceptable to Seller. Buyer shall hold Seller harmless from any and all
subsequent assessments levied by a proper taxing authority for such taxes,
including any interest, penalties or late charges due to Buyer's failure to
perform hereunder or to provide Seller with the necessary certificates of
exemption.
4.6 Buyer grants to Seller a purchase money security interest in
the System. Seller may perfect such interest, and Buyer shall assist Seller,
as reasonably necessary, to do so. Seller may retain such interest until title
to the Equipment passes to Buyer. Prior to acquiring title to the Equipment,
Buyer shall not cause nor permit the System, or any portion of it, to be sold,
leased or subjected to a lien or other encumbrance. Seller understands that
Buyer may finance payment for Equipment and Software and any lien or
encumbrance granted to the financing party shall not be a breach of this
provision.
4.7 In the event Seller has not been notified that Buyer has
entered into a credit facility agreement for Buyer's financing of * of
Equipment/Software being purchased/licensed under this Agreement (hereinafter
"Financing Arrangements") with MOTOROLA NORTEL Finance Corporation prior to
September 30, 1993 (unless such date is extended by the mutual written
agreement of the parties), Seller or Buyer may terminate this Agreement by
providing the other party written notification thereof within ninety (90) days
following such date or extension thereof. Buyer's failure to complete
Financing Arrangements shall be either party's sole reason for termination
pursuant to this Section 4.7.
4.7.1 It is understood and agreed by the parties that Buyer
will not be required to make the first milestone payment hereunder until
completion of Financing Arrangements with the applicable financing entity and
that Seller shall have no obligation to perform any obligations under this
Agreement prior to receipt of written notice that the Financing Arrangements
have been entered into; provided, however, that Seller, at its sole discretion,
may commence engineering and/or manufacturing activities for a System. If
Seller elects to commence such
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 8
performance prior to receipt of notification by Buyer and notifies Buyer
thereof, Seller agrees that in the event of a termination under this Section
4.7, Buyer will not be liable to Seller for any engineering or nonrecoverable
costs incurred in connection with this Agreement.
4.7.2 Nothing in this Section 4.7 shall relieve Buyer of
the obligation to purchase * of Equipment/Software from Seller unless financing
is not available at the then-prevailing market terms.
4.8 Buyer understands that it has a firm obligation to
purchase/license no less than * of Equipment/Software from Seller during the
Term of this Agreement (the "Commitment"). The Equipment/Software set forth in
Annex 1 is representative of Buyer's initial System configuration (which can be
changed pursuant to Section 17 herein) and makes up an initial portion of the
Commitment. The remainder of the Commitment shall be satisfied from Purchase
Orders submitted by Buyer pursuant to Section 3 hereof.
4.8.1 Should Buyer, pursuant to its obligations under
Section 4.8, fail to issue such Purchase Orders and take delivery of enough
additional Equipment/Software to satisfy the Commitment, then Buyer shall pay a
termination charge to Seller in the amount of * of the portion of the
Commitment that remains. Such amount(s) shall be due and payable within thirty
(30) days following the date of Seller's invoice therefor.
5. DELIVERY, RISK OF LOSS, TITLE
5.1 Merchandise shall be shipped F.O.B. Seller's manufacturing
facility. Systems and Expansions shall be shipped F.O.B. the appropriate
Installation Site, or staging shelter location, as designated by Buyer. OEM
Equipment shall be shipped F.O.B. the OEM vendor's manufacturing facility.
5.2 Risk of loss or damage to any Equipment to be furnished by
Seller to Buyer in accordance with this Agreement shall pass to Buyer upon
delivery to Buyer's designated facility (i.e., staging shelter, Installation
Site or storage facility), at which time, Buyer shall insure such Equipment for
all monies due Seller.
5.3 Title to the Equipment shall pass to Buyer upon Seller's
receiving Buyer's final payment pursuant to Article 4 and shall be good title,
free and clear of all liens and encumbrances.
5.4 If Buyer notifies Seller less than thirty (30) days prior to
the scheduled shipment date of the System that Buyer does not wish to receive
shipment of the System on the date set forth in Annex 3 (Seller will use all
reasonable efforts to meet any such wish up to ten [10] days prior to the
scheduled ship date) or fails to take delivery of any portion of the System on
arrival at the Installation Site, then Seller shall have the right to place the
System in storage and Buyer shall be liable for all additional transportation,
demurrage, loading, storage, and associated costs
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 9
thereby incurred by Seller. Shipment of the DMS-MTX switch component of the
Equipment to a storage location as provided in this Section 5.4 shall be deemed
to constitute shipment of the Equipment to the Installation Site for purposes
of the Project Schedule and any payment associated therewith, and delivery for
purposes of Section 5.2. In the event that a scheduled or actual Turnover Date
extends beyond three (3) months from the originally scheduled date as a result
of Buyer's deferral under this Section 5.4, Seller may invoice Buyer in
accordance with the payment milestones set forth in Annex 2 and commence the
warranty period.
6. SUBCONTRACTING
6.1 Seller's Prices assumes the right to subcontract such portions
of the (i) Equipment and/or Software manufacture; and/or (ii) Installation,
maintenance, service or other obligations of Seller under this Agreement to
subcontractors of Seller's choice as Seller deems appropriate. Seller shall be
responsible (subject to the provisions of Article 7 hereof) to Buyer for the
work performed by any such subcontractors.
7. WARRANTIES, REMEDIES AND LIMITATION OF WARRANTIES AND REMEDIES AND
DISCLAIMERS OF WARRANTIES AND LIABILITY
7.1 THE WARRANTIES AND REMEDIES SET FORTH BELOW CONSTITUTE THE
ONLY WARRANTIES WITH RESPECT TO THE SYSTEM AND SERVICES PROVIDED BY SELLER AND
BUYER'S EXCLUSIVE REMEDIES IN THE EVENT SUCH WARRANTIES ARE BREACHED. THEY ARE
IN LIEU OF ALL OTHER WARRANTIES WRITTEN OR ORAL, STATUTORY, EXPRESSED OR
IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTY OF MERCHANTABILITY AND THE
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. SELLER SHALL NOT BE ABLE FOR ANY
INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES OF ANY NATURE WHATSOEVER BEFORE
OR AFTER TURNOVER AS DEFINED IN SECTION 14.2 ("TURNOVER").
7.2 Equipment and Services Warranty
7.2.1 For the Equipment listed in Annex 1 and Section 4.0
of Annex 7 (excluding Conversion Equipment), Seller warrants that for a period
of eighteen (18) months from the date of Turnover, as defined in Section 14.2
herein, or for a period of nineteen (19) months from the date of shipment for
cell site Equipment installed by Buyer, (hereinafter referred to as the
"Warranty Period"), such Equipment shall be free from defects in material and
workmanship, and shall conform to the Specifications, and that the Installation
services furnished under this Agreement shall be performed in a professional
and workmanlike manner. Any and all claims for breach of this warranty are
conclusively deemed waived unless made during the Warranty Period. With
respect to that portion of the Equipment specific to Conversion Equipment,
which Conversion Equipment includes the NovAtel recommissioned transceivers and
the NTI Equipment specified in Annex(es) 1 and/or 7 required for it to operate
as a portion of a System, the Warranty Period shall be a period of 13 months
from the date of shipment.
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<PAGE> 10
Performance of Seller's obligations hereunder shall not extend the
Warranty Period, except that any Equipment and/or Installation repaired or
replaced during the Warranty Period shall continue under warranty for the
balance of the Warranty Period or thirty (30) calendar days from the date the
repair is effected or the replacement is shipped, whichever is longer.
7.2.2 During the Warranty Period if any component of the
Equipment or portion of the Installation services fails to meet the foregoing
warranties, Seller's sole obligation and Buyer's exclusive remedy under this
warranty are limited to the replacement or repair, at Seller's option, of the
defective component of the Equipment or the correction of the faulty
Installation. Such replacement Equipment may be new or reconditioned to
perform as new, at Seller's option (replacement Equipment provided prior to the
start of the Warranty Period will be new). Buyer shall bear the risk of loss
and damage and all transportation costs for defective Equipment shipped to
Seller; and Seller shall bear the risk of loss and damage and all
transportation costs for replacement Equipment shipped to Buyer. Title to
defective or replacement Equipment shall pass to Seller or Buyer, as
appropriate, upon receipt thereof.
7.2.3 Seller's obligations under Section 7.2.1 and 7.2.2
above shall not apply to (1) Equipment or components thereof such as fuses and
bulbs that are normally consumed in operation, or have a normal life inherently
shorter than the Warranty Period; (2) defects that are the result of improper
storage, installation, use, maintenance or repair by the Buyer (including,
without limitation, operation of the System outside the environmental
parameters defined in the Specifications); (3) improper operation of the System
with other hardware/software used by Buyer, or use of the Equipment with any
improperly operating equipment not supplied by Seller under this Agreement; (4)
Equipment or components thereof that due to no fault of Seller have been
subjected to any other kind of misuse or detrimental exposure or have been
involved in an accident, fire explosion, Act of God, or any other cause not
attributable to Seller, or (5) Equipment or Installation altered, repaired,
installed or relocated by any party other than Seller or Seller's agents
without the prior written consent of Seller. For purposes of subsection (5),
"install" shall not mean the routine plug-in of components done in accordance
with NTP guidelines.
7.3 Software Warranty
Seller warrants that, provided the Software is not altered by Buyer,
and provided the Software is used in conjunction with the DMS-MTX Equipment
purchased under this Agreement and such Equipment has been adequately
maintained, the Software shall function during the Software Warranty Period, as
hereinafter defined, without defects which materially affect Buyer's use of the
Software in accordance with the Specifications. In the event the Software
fails to so perform and Buyer's use of the System is materially affected by
such failure, Buyer's exclusive remedy under this warranty is to require Seller
to correct such failure and such remedy is conditioned upon Seller's receiving
written notice (or oral notice promptly confirmed in writing) of such failure
within the Warranty Period. For the purpose of this Section 7.3, the "Software
Warranty Period" for Software purchased with a System during the Term shall
have a duration of eighteen (18) consecutive months from the date of Turnover.
The Software Warranty Period
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<PAGE> 11
following the expiration of the Term shall be twelve (12) months from the date
of Turnover. The correction of any Software failure shall not extend the
Software Warranty Period.
Each Batch Change Supplement ("BCS") Software upgrade acquired by
Buyer under this Agreement shall be licensed to Buyer pursuant to the terms of
the Software License set forth in Annex 9 and shall carry a twelve (12) month
warranty.
7.4 System Warranty
Seller warrants that during the Warranty Period the Equipment and
Software furnished hereunder shall operate under normal use and service as a
System that shall perform in accordance with the Specifications. In the case of
a phased installation schedule, the System Warranty Period shall begin upon
Turnover of the switch component and initial cell site(s) and end eighteen (18)
months thereafter. Any and all claims for breach of this warranty are
conclusively deemed waived unless made during the Warranty Period. During the
Warranty Period, if the System fails to operate in accordance with such
Specifications, Seller's sole obligation and Buyer's exclusive remedy under
this warranty shall be Seller's performance of its obligations specified in
Sections 7.2 and 7.3, and shall be subject to the limitations of this Article
7. Performance of those obligations and phased Expansion or Equipment
Installations shall not extend the Warranty Period except as provided under
Section 7.2.1 with respect to warranty of the replacement Equipment. Seller
shall have no obligations under this Section 7.4 arising from improper
operation of the System as a result of any of the circumstances described in
Article 15 herein.
7.5 Response Time/Services
7.5.1 During the Warranty Period, Seller shall provide
Technical Assistance Service (hereinafter "TAS"), more fully described in Annex
8, Technical Assistance Services, when reasonably requested by Buyer. For
routine warranty service situations, Seller shall ship replacement or repaired
Equipment (or components thereof) within thirty (30) days of receipt of the
defective Equipment (or components thereof) from Buyer, or if Seller determines
that, due to the particular circumstances, on-site services are required,
Seller shall undertake repair or replacement services on-site within thirty
(30) days of notification of the warranty defect by Buyer.
7.5.2 For emergency warranty service situations, Seller
shall, during the Warranty Period, use all reasonable efforts to ship
replacement Equipment (or components thereof) within twenty-four (24) hours of
notification of the warranty defect by Buyer. Buyer may request, at his own
expense, counter to counter shipment. Buyer shall pay to Seller the surcharge
set forth in Annex 8 for such expedited shipment of replacement Equipment,
provided, however, that if Buyer maintains the recommended level of spare parts
as detailed in Annex 1 for each System, and if as a result of a spare part
failure is required to expedite the shipment of the corresponding spare part
replacement, Buyer will not be assessed a surcharge. Buyer shall ship the
defective Equipment to Seller within thirty (30) days of receipt of the
replacement Equipment. In the event Seller fails to receive such defective
Equipment within such thirty (30) day period, Seller shall invoice Buyer for
the replacement Equipment at the then-current price in effect
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<PAGE> 12
therefor. For purposes of this Agreement, an "emergency" shall be deemed to
exist upon the occurrence of a Priority E1 or E2 problem, as defined in Annex
8.
7.6 Add-On Equipment Warranty
For purposes of warranty, Equipment and/or Software ordered hereunder
by Buyer and installed in sufficient advance time to be turned over with a
System shall be considered a part of the System. Equipment and Software
installed after System Turnover shall be warranted as either an Expansion or
Merchandise Equipment, except that any Equipment/Software listed in Section 4.0
of Annex 7 shall be warranted in accordance with the terms of Section 7.2,
during the Term of this Agreement.
Expansion and Merchandise Equipment not part of the Equipment listed
in Section 4.0 of Annex 7, and Systems/Expansions/ Merchandise ordered after
the expiration of the Term shall be warranted as follows:
Systems and Expansions shall be warranted in accordance with the terms
of Section 7.2 herein, except that the warranty period shall begin on the date
of the System/Expansion Turnover and end twelve (12) consecutive months
thereafter (Expansion Equipment installed by Buyer will be warranted for a
period of thirteen [13] months from the date of shipment). Merchandise shall
be warranted against defects in Equipment and faulty workmanship in accordance
with the terms of Section 7.2 herein, except that the warranty period shall be
for a period of ninety (90) consecutive days following the date of shipment
thereof or the balance of the System Warranty Period, whichever is greater.
7.7 OEM Equipment
Such warranty for Merchandise and Expansion Equipment shall cover only
the repair or replacement of defective Equipment and shall not include TAS or
other Seller services, except that, if applicable, any TAS services provided
under the balance of a System warranty shall also apply to Expansion and/or
Merchandise Equipment operating in conjunction with the System.
7.7.1 With respect to OEM Equipment furnished under the
initial Purchase Order in conjunction with a System, e.g., terminals and
printers, such OEM Equipment shall be warranted in accordance with the
Equipment warranties set forth in Section 7.2 and handled through Seller's
Repair and Return department. With respect to other OEM items ordered by Buyer
at prices quoted by Seller, Buyer shall receive the warranties for such OEM
Equipment directly from such OEM vendors. Except for the warranty of title
extended in Section 5.3 hereof, the warranties provided in this Section 7.7 are
Buyer's sole and exclusive remedy with respect to OEM Equipment provided under
this Agreement.
8. POST WARRANTY SUPPORT
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<PAGE> 13
No later than ninety (90) days prior to the expiration of the Warranty
Period, Seller shall offer to Buyer, post warranty support by means of an
extended service plan ("ESP") or as otherwise offered by Seller.
9. FORCE MAJEURE
If the performance of this Agreement, or of any obligation hereunder
except for the obligations set forth in Article 4, is prevented, restricted or
interfered with by reason of fires, breakdown of plant, labor disputes,
embargoes, government ordinances or requirements, civil or military
authorities, acts of God or of the public enemy, acts or omissions of carriers,
inability to obtain necessary materials or services from suppliers, or other
causes beyond the reasonable control of the party whose performance is
affected, then the party affected, upon giving prompt notice to the other
party, as set forth in Section 23.2 shall be excused from such performance on a
day-for-day basis to the extent of such prevention, restriction, or
interference (and the other party shall likewise be excused from performance of
its obligations on the day-for-day basis to the extent such party's obligations
relate to the performance so prevented, restricted or interfered with);
provided that the party so affected shall use reasonable efforts to avoid or
remove such causes of non-performance and both parties shall proceed to perform
their obligations with dispatch whenever such causes are removed or cease.
10. PATENT AND COPYRIGHT INFRINGEMENTS
10.1 Seller agrees to indemnify Buyer with respect to any suit,
claim, or proceeding brought against Buyer alleging that Buyer's use of the
System constitutes an infringement of any United States patent or copyright.
Seller agrees to defend Buyer against any such claims and to pay all litigation
costs, reasonable attorney's fees, settlement payments and any damages awarded
in any final judgment arising from such suit, claim or proceeding; provided,
however, that Buyer shall promptly advise Seller of any such suit, claim, or
proceeding and shall cooperate with Seller in the defense or settlement of such
suit, claim or proceeding and provided Seller shall have sole control thereof.
10.2 In the event that an injunction is obtained against Buyer's
use of the System arising from such patent or copyright suit, claim or
proceeding, in whole or in part, Seller shall, at its option, either: (a)
procure for Buyer the right to continue using the portion of a System enjoined
from use; or (b) replace or modify the same, at Seller's cost, so that Buyer's
use is not subject to any such injunction; provided that Buyer's use of the
System is not impaired by such replacement or modification.
10.3 In the event that Seller cannot perform under Section 10.2,
Buyer shall have the right to return such System, or portion thereof, to
Seller, at Seller's cost, upon written notice to Seller and in the event of
such return, neither party shall have any further liabilities or obligations
under this Agreement, except that Seller shall refund the full price of any
such System, or portion thereof, if such an event occurs during the first year
after System Turnover, and thereafter Seller shall refund the Price of a
System, less a reasonable depreciation for each year of use thereof by Buyer at
the time of such return.
-10-
<PAGE> 14
10.4 Seller's indemnity obligations under Section 10.2 shall not
apply to infringement claims (1) arising from any portion of the Equipment and
Software that is manufactured to Buyer's design, or (2) arising from the use of
the Equipment and Software in combination with any other apparatus or material
not supplied by Seller to the extent that the claims arise from such
combination usage.
10.5 The foregoing states the entire liability of Seller for patent
or copyright infringement by the System. Seller shall have no liability
whatsoever for any patent or copyright infringement arising from Buyer's use of
OEM Equipment and Seller makes no warranty with respect thereto.
11. SOFTWARE LICENSE
11.1 In accordance with the terms set forth in Annex 9, "Software
License," Buyer is hereby granted a non-exclusive, paid-up license to use the
Software only in conjunction with the Equipment purchased under this Agreement.
Buyer is granted no title or ownership rights to the Software, which rights
shall remain in Seller or Seller's suppliers as appropriate. The initial
license fee paid by Buyer does not cover charges for future BCS releases
(beyond those provided in Section 19.1.1 ), which are set forth in Annex 7.
11.2 Software licensed under this Agreement is defined as
proprietary and/or third party computer. programs contained on a magnetic tape,
disc, semiconductor device or other memory device or system memory consisting
of (a) hardwired logic instructions which manipulate data in the central
processor and control input-output operations and error diagnostic and recovery
routine, and (b) instruction sequences in machine-readable code that control
call processing, peripheral equipment and administration and maintenance
functions as well as associated documentation used to describe, maintain and
use the programs.
11.3 The obligations of Buyer under this Section 11 and Annex 9
shall survive the termination of this Agreement, regardless of the cause of
termination.
12. REMEDIES
12.1 Seller shall have the right to suspend its performance under
this Agreement by written notice to the Buyer and forthwith remove and take
possession of any portion of the System that has been delivered if the Buyer,
prior to payment to Seller of the Price, shall become insolvent or bankrupt,
make a general assignment for the benefit of, or enter into any arrangement
with creditors, file a voluntary petition under any bankruptcy, insolvency, or
similar law, or have proceedings under any such laws or proceedings seeking
appointment of a receiver, trustee or liquidator instituted against it which
are not terminated within thirty (30) days of such commencement.
12.2 In the event of any material breach of this Agreement by
either party which shall continue for thirty (30) or more days after written
notice of such breach (including a reasonably
-11-
<PAGE> 15
detailed statement of the nature of such breach) shall have been given to the
breaching party by the aggrieved party, the aggrieved party shall be entitled
at its option:
12.2.1 if the aggrieved party is the Buyer, to suspend its
performance under Article 4 of the Agreement for so long as the breach
continues uncorrected or;
12.2.2 if the aggrieved party is Seller, to suspend
performance of all of its obligations under the Agreement for so long as the
breach continues uncorrected or;
12.2.3 to avail itself of any and all remedies available at
law or equity whether or not it elects to suspend its performance under Section
12.2.1 or 12.2.2 as applicable.
12.3 NOTWITHSTANDING THE PROVISIONS OF SECTION 12.2 OR ANY OTHER
PROVISION OF THIS AGREEMENT. SELLER SHALL NOT BE LIABLE FOR INCIDENTAL,
INDIRECT, CONSEQUENTIAL, OR SPECIAL DAMAGES OF ANY NATURE WHATSOEVER FOR ANY
PERFORMANCE OF THIS AGREEMENT.
12.4 Any action for breach of this Agreement or to enforce any
right hereunder shall be commenced within two (2) years after the cause of
action accrues or it shall be deemed waived and barred (except that any action
for nonpayment may be brought at any time permitted by applicable law).
13. BUYER'S RESPONSIBILITIES
13.1 Buyer agrees that certain duties shall be performed by the
Buyer in a timely and proper fashion as a condition precedent to Seller's
obligations hereunder, including, but not by way of limitation, those
responsibilities designated in Annex 3 (Statement of Work) as being the
Buyer's, and the following:
13.2 Buyer shall prepare the Installation Site(s) in accordance
with Seller's requirements for the System as set forth herein and in Annex 3,
no later than by the dates stated in the Project Schedule, as such dates may be
mutually modified and, provided that Seller's inability to perform its
responsibilities under Annex 3 does not restrict Buyer from performing
thereunder.
13.3 Buyer shall provide Seller-designated personnel access to the
Equipment during the times necessary to install, maintain and service the
Equipment. Seller personnel shall comply with Buyer's reasonable site and
security regulations.
13.4 Buyer shall provide reasonable working space and facilities,
including heat, light, ventilation, fire protection, telephones, electrical
current, trash removal and other necessary utilities for use by Seller
designated maintenance personnel, and adequate secure storage space, if
required, for equipment and materials. All such facilities shall be provided
at no charge to Seller. Buyer shall also provide adequate security for the
Equipment at the Installation Site.
-12-
<PAGE> 16
13.5 Buyer shall be responsible for ordering and coordinating with
the local telephone company, the installation of all central office trunks and
test trunks in accordance with the schedule set forth in Annex 3. Buyer shall
provide necessary free air time to Seller personnel for purposes of testing the
System. Buyer shall be responsible for all utility charges including, but not
limited to, charges for such central office trunks and any tie lines.
13.6 Buyer, at its expense, shall obtain all necessary local and
federal government permits applicable to a cellular telecommunications system
installation and operation (excluding any applicable permits required in the
normal course of Seller's doing business). Buyer understands and agrees that
all site engineering (including cell sites) architectural work, civil work and
supervision thereof, site selection engineering, propagation engineering and
rights-of-way are the responsibility of Buyer.
13.7 Buyer, at its expense, shall prepare the Installation Sites
(including the switchroom for the DMS-MTX switch component of the Equipment, as
well as the Installation Sites for the cell site Equipment) in accordance with
Seller's environmental, power and physical space requirements. Site
preparation shall include, without limitation, single point grounding
system(s), room renovation, pre-fab buildings, grading, fencing, towers
(including antenna mounting), cable racks, raceways, borings and cuttings,
trenching and conduit variances.
13.8 Any information which Seller reasonably requests from the
Buyer and which is necessary for Seller to properly install or maintain the
Equipment shall be provided by the Buyer in a timely fashion and in a form
reasonably specified by Seller.
13.9 Buyer shall insure that only qualified technicians shall
perform any maintenance and/or repair to the Equipment during the Warranty
Period, which maintenance and/or repair shall be confined to routine tasks
performed in accordance with Seller- provided specifications.
14. TESTING, TURNOVER AND ACCEPTANCE
14.1 Upon completion of Installation of the System, Seller shall
provide Buyer five (5) days prior written notification that the System is ready
for final commissioning and testing. Following such notification, Buyer agrees
to have a representative present to witness and acknowledge completion of such
testing. Seller shall test the System in accordance with its then-standard
testing procedures to determine System conformity with the standards and
specifications (hereinafter "Acceptance Criteria") of the applicable
Installation Manuals as referenced in Annex 4, "Acceptance Criteria and
Testing."
14.2 On the date that such tests have been successfully completed,
Seller shall turn over the System to Buyer for Buyer's placing the System into
service ("Turnover"). On the date of Turnover, Buyer shall complete and return
to Seller the "Turnover Notice" attached hereto as Annex 5.
14.3 For purposes of this Agreement, the occurrence of any of the
following shall be deemed to constitute "Acceptance" of the System:
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<PAGE> 17
14.3.1 Within fifteen (15) days following Turnover, Buyer
shall either accept the System in writing using the form set forth in Annex 6,
"Acceptance Notice," or notify Seller in writing specifying in reasonable
detail those particulars in which the System does not meet the Acceptance
Criteria. With respect to any such particulars, Seller shall promptly proceed
to take corrective action, and following correction, Buyer shall accept the
System in writing.
14.3.2 The failure of Buyer to notify Seller within thirty
(30) days after Turnover (or, in the case of correction, thirty [30] days
following such correction) of any particulars in which the System does not meet
the Acceptance Criteria, or the use by Buyer of the System or any portion
thereof in revenue-producing service at any time, shall be deemed to constitute
Acceptance of the System except that to the extent any portion of the System is
not placed into operation as the result of it not being operational, Acceptance
will not be deemed to have occurred for such item of Equipment or Software.
With respect to any such Equipment/Software which needs correction, Seller
shall promptly proceed to make such correction, and after correction thereof,
Buyer shall Accept the System, or portion thereof, in writing.
14.4 Acceptance of Equipment not installed by Seller shall be
deemed to occur upon receipt of and inspection by Buyer.
15. COVERAGE, INTERFERENCE AND THIRD-PARTY FACILITIES
15.1 Seller will not be responsible for radio propagation or
coverage distance due to Buyer's design. Seller shall not be responsible for
any failures or inadequacies of performance resulting from equipment not
supplied and installed by Seller or Seller's agents and subcontractors pursuant
to this Agreement. Seller shall not be responsible for interference or
disruption of service caused by operation of other radio systems, lightning,
motor ignition or other similar interference.
15.2 In the event Buyer utilizes facilities or services supplied by
others such as common carrier circuits or towers, Seller shall have no
responsibility for the availability or adequacy of such facilities or services.
16. REGULATORY COMPLIANCE
Seller shall use all reasonable efforts to install the System so that
it shall comply in all material respects with all Federal, State, and local
laws and regulations, known to Seller and in force on the Effective Date of
this Agreement, which directly impose obligations upon the manufacturer,
Seller, or installer of such equipment.
The prices set forth for the Equipment described herein are based on
Seller's design, manufacture, and delivery of the Equipment pursuant to its
design criteria and manufacturing processes and procedures in effect on the
Effective Date of this Agreement. In the event of any material change in such
criteria, processes or procedures or any material change in the Equipment as a
result of the imposition of requirements by any federal, state or local
government, the prices
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<PAGE> 18
will be adjusted equitably as mutually agreed to between the parties to reflect
the added cost and expense of such change.
17. CHANGES
17.1 Up to sixty (60) days prior to the scheduled shipment date (or
such later time as is acceptable to Seller), Buyer may request Equipment and/or
Software addition(s) or deletion(s) to a System or Expansion original
configuration. At any time prior to the start of Acceptance testing, Buyer may
request changes to the Project Schedule and additional services. All such
System reconfigurations and changes to the Statement of Work ("Changes") shall
be subject to prior written approval of Seller, which shall not be unreasonably
withheld.
17.2 Except as provided in 17.3 below, all Changes shall be
documented in a written change order ("Change Order"), which shall be executed
by Buyer and returned to Seller prior to implementation of the requested
Changes. The Change Order shall detail any adjustments to the Pricing set
forth in this Agreement, Statement of Work, or Project Schedule required by
Seller for any aspect of its performance under this Agreement. Changes by
Buyer, including Changes to the Project Schedule, that occasion delays and/or
remobilization of Seller and/or its subcontractor personnel shall cause an
adjustment to the Price in accordance with the rates set forth in Annex 7.
17.3 Upon written request of Buyer for a Change to the Statement of
Work that entails additional services totalling * or less and upon written
acceptance thereof by Seller, Seller will proceed in good faith to implement
such Change prior to receipt of an executed Change Order. Within five (5) days
following Buyer's written request, the parties shall agree upon an appropriate
price for such Changes, all of which will be summarized in a subsequent Change
Order and executed by an authorized representative of Buyer within fifteen (15)
days following the date of the request for Change.
17.4 Calculations for any System reconfigurations prior to Turnover
shall be based on contract Pricing, provided that (i) any additions shall
include any necessary E, F, I and T charges and (ii) any deletions shall
include applicable discounts. In the event of a deletion in the Equipment
which involves the return of Equipment previously delivered to Buyer, Buyer
shall pay the transportation costs and Seller's then-current restocking charge
for the returned Equipment. The contract Price shall be adjusted by
appropriate Change Order amounts, and Buyer shall be invoiced accordingly at
the time of the next scheduled milestone payment event.
17.5 Upon prior written notification to Seller, Buyer may elect to
cancel Purchase Orders prior to shipment subject to the following:
17.5.1 Without charge, Buyer may cancel any Purchase Order
no later than ninety (90) days prior to the earliest scheduled ship date.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
-15-
<PAGE> 19
17.5.2 If Buyer cancels a Purchase Order less than ninety
(90) days prior to the earliest scheduled ship date, Buyer shall pay a
cancellation charge of * of the Price to Seller.
17.5.3 If Buyer cancels a Purchase Order less than sixty
(60) days prior to the earliest scheduled ship date, Buyer shall pay to Seller
a cancellation charge of * of the Price.
17.5.4 If Buyer cancels a Purchase Order less than thirty
(30) days prior to the earliest scheduled ship date, Buyer shall pay to Seller
a cancellation charge of * of the Price.
17.5.5 Buyer may not cancel a Purchase Order subsequent to
the ship date.
17.6 Any change(s) requested by Buyer that involve the return
and/or exchange of OEM Equipment shall be subject to the standard policies of
the applicable original manufacturer.
18. CONFIDENTIALITY
Buyer, Seller and Seller's Affiliates shall receive in confidence from
each other all technical information, documentation and expertise which is
either (1) stamped or otherwise marked as being confidential or proprietary
whether in written or electronic form, or (2) if delivered in oral form, is
summarized in a written memorandum and listed as being confidential
("Confidential Information") and shall not, except as previously authorized in
writing by the other party, publish, disclose or make use of such information
(except as required by law), unless and until the Confidential Information
shall have ceased to be proprietary as evidenced by general public knowledge or
shall have been legally acquired by such party. This prohibition against
disclosure, publication or use of Confidential Information shall not restrict
either party from developing similar information in the exercise of its own
technical skill, so long as such other information is independently developed
by such party without making use of Confidential Information. The obligations
of confidentiality of this Article 18 shall commence with the date of
disclosure and continue for a period of five (5) years therefrom, except as
otherwise provided under this Article 18. For purposes of this Agreement
Seller's "Affiliates" shall be defined as Motorola, Inc. and Northern Telecom
Inc.
19. SOFTWARE UPDATES
19.1 License fees set forth in Annex 7 for BCS Software upgrade(s)
assume that Buyer's System is operating on Software at the same level of
maintainability as set forth in Section 19.1.2 hereof. Otherwise, Buyer's
request(s) for retrofitting new BCS features onto Buyer's System shall be
considered and quoted by Seller on a case-by-case basis. Additionally, future
Equipment purchases may require the support of a then-current BCS Software
Load.
19.1.1 During the Term of this Agreement Buyer shall receive
at no charge the basic Software operating load for new BCS Software releases,
for a combined total of up to seventeen (17) upgrades. BCS Software upgrades
may require the purchase of additional hardware by Buyer.
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<PAGE> 20
19.1.2 If Buyer elects to remain on a prior Software
release, Seller's sole obligation hereunder shall be to make available
maintenance for the Software for the previous two consecutive releases from the
then-current, numbered release (i.e., numbered BCS load).
20. CONDITION OF INSTALLATION SITE(S)
Buyer represents to the best of its knowledge that the Installation
Site is free from friable asbestos or other hazardous contamination. In the
event that such contamination is found to be present at the Installation Site,
Seller shall be relieved of all of its obligations hereunder until such
contamination is removed. In the event that Buyer fails or refuses to remove
such contamination and Seller agrees to relocate the System to another
Installation Site, Seller shall charge Buyer for (1) any additional delivery
charges to the new Installation Site, (2) all materials expended at the initial
site including cabling, permanently affixed equipment, and those items which
cannot reasonably be removed for use elsewhere, (3) specifically ordered items
requested by Buyer, and (4) all additional labor and materials expended at the
sites relating to the relocation using Seller's then current labor rates.
Buyer hereby agrees to indemnify, defend and hold Seller harmless from and
against any and all losses, expenses, damages and claims, including personal
injury and property damage, arising in connection with the presence of such
contamination, its disturbance, decontamination or abatement, irrespective of
when such losses, expenses, damages or claims are asserted. The obligation
created in this paragraph shall survive any termination or cancellation of this
Agreement.
21. RELEASE OF INFORMATION
21.1 Unless required by law, or as otherwise permitted under this
Agreement, Seller and Buyer agree that the terms and conditions of this
Agreement shall not be disclosed to any other party without the prior written
consent of the other; provided, however, that Seller may release information to
its Affiliates on a need-to-know basis.
21.2 Neither Seller nor Buyer shall publish or use any advertising,
sales promotion, press releases or publicity matters relating to this Agreement
without the prior written approval of the other, which approval shall not be
unreasonably withheld.
22. ANNEXES
The following Annexes shall form an integral part of this Agreement as
though written out in full in this Agreement:
Annex 1 - System Pricing
Annex 2 - Payment Terms
Annex 3 - Statement of Work/Project Schedule
Annex 4 - Acceptance Criteria and Testing
Annex 5 - Turnover Notice
Annex 6 - Acceptance Notice
Annex 7 - Add-on Pricing
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<PAGE> 21
Annex 8 - Technical Assistance Services
Annex 9 - Software License
Annex 10 - Additional Seller Commitments
23. GENERAL
23.1 Buyer may assign this Agreement to a third party with the
prior written consent of Seller, which consent shall not be unreasonably
withheld, provided that such assignee (1) furnishes adequate financial/credit
assurances; (2) is not a direct competitor of Seller who manufactures or sells
cellular communications systems; and (3) agrees to abide by the terms of the
Software License set forth in Annex 9. No assignment or sublicense of or under
this Agreement, or of any rights under this Agreement, by Buyer, shall relieve
Buyer of primary responsibility for performance of Buyer's obligations under
this Agreement. Seller reserves the right to refuse to honor any assignment or
sublicense which, in the opinion of its legal counsel, would require it to
violate any United States export restriction, other law, or regulation. Seller
reserves the right to assign its rights under this Agreement to an Affiliate
and to subcontract any portion of its obligation under this Agreement, but no
such subcontract shall relieve Seller of primary responsibility for performance
of Seller's obligations under this Agreement.
23.1.1 The following parties shall be considered
"Affiliates" of Buyer under this Agreement:
Alton CellTelCo
Butte County Cellular License Corporation
GCC Leasing Corporation
GCC South Dakota 9 Corporation
Lawton Cellular License Corporation
Lincoln CellTelCo
Mammoth Cellular, Inc.
Nebraska 2 Cellular Corporation
Nebraska 4 Cellular Corporation
Nebraska 6 Cellular Corporation
Nebraska 7 Cellular Corporation
Nebraska 8 Cellular Corporation
Nevada One Cellular License Corporation
Nevada 2 Cellular Corporation
Nevada 4 Cellular Corporation
Rapid City Cellular Corporation
South Dakota 2 Cellular Corporation
South Dakota 4 Cellular Corporation
23.1.2 Any Affiliate of Buyer may place an order pursuant to
the terms of this Agreement, provided, however, that Buyer shall guarantee the
performance of such Affiliate, including, by way of example and not implied
limitation, all payment and confidentiality obligations hereunder.
-18-
<PAGE> 22
23.1.3 Buyer represents that it has (or will have prior to
the placing of an order pursuant to 23.1.1) the right to sign on behalf of and
bind each of the Affiliates set forth in Section 23.1.1.
23.1.4 Buyer may amend the list of Affiliates set forth in
Section 23.1.1 upon ten (10) days prior written notice to Seller.
23.2 Notices and other communications shall be transmitted in
writing by Certified U.S. Mail, postage prepaid, return receipt requested,
addressed to the parties as follows:
MOTOROLA NORTEL Communications Co.
Cellular Group
2435 N. Central Expressway
Richardson, Texas 75080
Attention: Manager, Contracts
cc: Program Manager
General Cellular Corporation
1891 Woolner Avenue
Fairfield, California 94533
Attention: Legal Department
Any notice given pursuant to this Section 23.2 shall be effective five
(5) days after the day it is mailed or upon receipt as evidenced by the U.S.
Postal Service return receipt card, whichever is earlier. The parties may
change names and functions of personnel to be notified and addresses upon prior
written notification to the other party.
23.3 This Agreement may not be modified or amended or any rights of
a party to it waived except in a writing signed by duly authorized
representatives of the parties hereto.
23.4 Failure by either party at any time to require performance by
the other party or to claim a breach of any provision of this Agreement shall
not be construed as affecting any subsequent breach or the right to require
performance with respect thereto or to claim a breach with respect thereto.
23.5 Each party shall be liable for direct losses incurred by the
other party due to personal injury or damage to tangible property, including
the Equipment, which results from the negligence of that first party's
employees or agents, provided, however, that nothing in this Section shall
affect or in any way increase Seller's obligation under this Agreement with
respect to the performance of the Equipment and/or Software. Except for
personal injury, the total liability of Seller for all claims of any kind for
any loss or damage, whether in contract, warranty, tort (including negligence),
strict liability or otherwise, arising out of, connected with, or resulting
from the performance or non-performance of this Agreement shall in no case
exceed the total Price of this Agreement.
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<PAGE> 23
23.6 The rights and obligations of the parties and all
interpretations and performance of this Agreement shall be governed in all
respects by the laws of the State of Illinois except for its rules with respect
to the conflict of laws.
23.7 In the event that either Buyer or Seller shall bring suit to
enforce the provisions of this Agreement, the prevailing party in such suit
shall receive upon thirty (30) days prior written notice, all costs and
expenses incurred in connection with the suit, including, but not limited to,
reasonable attorneys' fees as may be allowed under applicable law (which
attorneys' fees shall include any fees incurred in connection with any appeal
of any order or judgment entered in such suit) and all court costs.
23.8 In the event Buyer elects to sell Seller Equipment or Services
to the U.S. Government or a prime contractor selling to the U.S. Government,
Buyer remains solely and exclusively responsible for compliance with all
statutes and regulations governing sales to the U.S. Government. Seller makes
no representations, certifications or warranties whatsoever with respect to the
ability of its goods, services or prices to satisfy any such statute or
regulation.
23.9 Section headings are inserted for convenience only and shall
not be used in any way to construe the terms of this Agreement.
23.10 The invalidity in whole or in part, of any provision of this
Agreement shall not affect the validity of the remainder of such provision or
of this Agreement.
23.11 This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and all of which taken together shall
constitute one and the same instrument.
23.12 This Agreement constitutes the entire agreement between Seller
and the Buyer with respect to the subject matter hereof and supersedes all
previous negotiations, proposals, commitments, writings, advertisements,
publications and understandings of any nature whatsoever. No agent, employee
or representative of Seller has any authority to bind Seller to any
affirmation, representation, or warranty concerning the System, except as
stated in this Agreement and unless such affirmation, representation, or
warranty is specifically included within this Agreement, it shall not be
enforceable by Buyer or any assignee or sublicensee of Buyer.
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<PAGE> 24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their representatives being thereunto duly authorized.
MOTOROLA NORTEL GENERAL CELLULAR CORPORATION
COMMUNICATIONS CO. ("SELLER") ("BUYER")
By /s/ By /s/
---------------------------------- -----------------------------------
Name Douglas McCollan Name Bob Stapleton
------------------------------- ---------------------------------
Title Chief Financial Officer Title President and CEO
------------------------------- --------------------------------
Date 7/29/93 Date 7/29/93
-------------------------------- --------------------------------
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<PAGE> 25
ANNEX 1
SYSTEM PRICING
The Equipment, Services and Software being provided under this Agreement are
subject to the following:
The Typical DMS-MTX Spares, Typical Cell Site Equipment Spares, and Typical RF
Spares Set listings may be changed by Seller in part or in whole during the
life of this Agreement depending on the configuration of said System as
provided to Seller by the Buyer. Any such change/update shall be explained in
writing to the Buyer by Seller within ninety (90) days from the date that the
changes/updates are made. Seller reserves the right, without notice, to make
changes in Equipment design or components as progress in engineering or
manufacturing methods may warrant. However, such changes shall not adversely
affect the System performance.
Unless otherwise specifically stated, installation, testing, and engineering
are not included in the prices listed herein.
1.0 ITEM QUANTITY PRICE/FEE
<TABLE>
<CAPTION>
DESCRIPTION QTY. GCC PRICE EXT. PRICE
- ----------- ---- --------- ----------
<S> <C> <C> <C>
TDMA SYSTEM I
SWITCH EQUIPMENT * *
SNSE 240 PORT 1
ICP PACKFILL 2
MCTMI 2
IS-41 SOFTWARE 1
(Complete list attached)
BASE CELLULAR SOFTWARE 1
(Complete list attached)
SNSE SPARES 1
(Complete list attached)
COAM SOFTWARE 1
COMPASS 1
X.25 CARDS 1
INSTALLATION & COMMISSIONING
SUBTOTAL SWITCH PRICE
LESS SWITCH DISCOUNT
SWITCH POWER Lot
(Complete list attached)
TOTAL SWITCH PRICE
</TABLE>
- --------------
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
<PAGE> 26
<TABLE>
<CAPTION>
DESCRIPTION QTY. GCC PRICE EXT. PRICE
- ----------- ---- --------- ----------
<S> <C> <C> <C>
DIGITAL UPGRADES * *
MDSP (Configured for 4 DRUs) 1
DSP Cards 1
DRU MONITOR (DRUM) 9
TOTAL DIGITAL UPGRADES (INSTALLATION
INCLUDED)
TOTAL DIGITAL DISCOUNT
TOTAL DIGITAL
RF EQUIPMENT (ICRM OMNI)
32 CHANNEL CELL SITE 3
16 CHANNEL CELL SITE 6
CELL SITE/RF SPARES (Complete list attached) 1
DUAL MODE RADIO UNITS (DRU) 150
LOCATE/CONTROL CHANNELS 9
RECEIVE CHANNELS 9
SUBTOTAL RF EQUIPMENT
RF EQUIPMENT DISCOUNT
TOTAL RF PRICE
CONVERSION EQUIPMENT
8 CHANNEL (DIGITAL) 5
16 CHANNEL (DIGITAL) 2
INSTALLATION 7
TRANSCEIVERS (RADIOS) 56
TOTAL CONVERSION EQUIPMENT
ADDITIONAL INSTALLATION
ICP PACKFILL 2
MCTMI 2
TOTAL ADDITIONAL INSTALLATION
TRAINING
COURSE #941 2
COURSE #942 2
COURSE #961 2
COURSE #980 2
COURSE #982 2
TOTAL TRAINING
TOTAL TDMA SYSTEM I PRICE
</TABLE>
- --------------
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
1-4
<PAGE> 27
<TABLE>
<CAPTION>
DESCRIPTION QTY. GCC PRICE EXT. PRICE
- ----------- ---- --------- ----------
<S> <C> <C> <C>
TDMA SYSTEM II
SWITCH EQUIPMENT * *
SNSE 240 PORT 1
ICP PACKFILL 1
MCTMI 1
IS-41 SOFTWARE 1
(Complete list attached)
BASE CELLULAR SOFTWARE 1
(Complete list attached)
SNSE SPARES 1
(Complete list attached)
COAM SOFTWARE 1
COMPASS 1
X.25 CARDS 1
INSTALLATION & COMMISSIONING
SUBTOTAL SWITCH PRICE
LESS SWITCH DISCOUNT
SWITCH POWER
Lot
(Complete list attached)
TOTAL SWITCH PRICE
DIGITAL UPGRADES
MDSP (Configured for 4 DRUs) 1
DSP Cards 2
DRU MONITOR (DRUM) 7
TOTAL DIGITAL UPGRADES (INSTALLATION
INCLUDED)
RF EQUIPMENT (ICRM OMNI)
32 CHANNEL CELL SITE 1
16 CHANNEL CELL SITE 6
CELL SITE/RF SPARES (Complete list attached) 1
DUAL MODE RADIO UNITS (DRU) 120
LOCATE/CONTROL CHANNELS 7
RECEIVE CHANNELS 7
SUBTOTAL RF EQUIPMENT
RF EQUIPMENT DISCOUNT
TOTAL RF PRICE
</TABLE>
- --------------
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
1-5
<PAGE> 28
<TABLE>
<CAPTION>
DESCRIPTION QTY. GCC PRICE EXT. PRICE
- ----------- ---- --------- ----------
<S> <C> <C> <C>
CONVERSION EQUIPMENT * *
8 CHANNEL (ANALOG) 3
16 CHANNEL (ANALOG) 2
8 CHANNEL (DIGITAL) 5
16 CHANNEL (DIGITAL) 2
INSTALLATION 12
TRANSCEIVERS (RADIOS) 100
TOTAL CONVERSION EQUIPMENT
ADDITIONAL INSTALLATION
ICP PACKFILL 1
MCTMI 1
TOTAL ADDITIONAL INSTALLATION
TRAINING
COURSE #941 2
COURSE #942 2
COURSE #961 2
COURSE #980 2
COURSE #982 2
TOTAL TRAINING
SUBTOTAL TDMA SYSTEM II PRICE
TDMA SYSTEM II COOPERATIVE
MARKETING DISCOUNT
TOTAL TDMA SYSTEM II PRICE**
TOTAL TDMA SYSTEMS I AND II***
800 CM PURCHASE ORDERS****
- --------------
</TABLE>
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
** Buyer may postpone accepting the discount for cooperative marketing
and shipment of the digital upgrade Equipment, by notifying Seller at least
sixty (60) days prior to the scheduled TDMA System II shipment date. Such
discount and Equipment will be included in a single additional System purchase
during the Term.
*** Subject to Section 17 of the Agreement, TDMA Systems I and II will be
delivered and installed within one (1) year following the Effective Date.
**** Buyer and Seller agree that the Equipment and Services set forth on
purchase order Nos. 035641, 035642 and 035643 dated 9/28/92, which Equipment
has already been delivered and installation Services already performed, shall
be considered a part of and governed solely by this Agreement, except that the
* shall not be considered part of the Commitment.
1-6
<PAGE> 29
SOFTWARE**
GCC BASE CELLULAR SOFTWARE:
- --------------------------
AUTOMATIC TRUNK TESTING
CDR SEARCH ON DISK
DEDICATED ACCESS LINE (AT CELLS) 5.0
DIRECT INWARD MOBILE ACCESS
ROAM AMERICA/NATION LINK
JOURNAL DUMP FILE
SERVICE ORDERS
SYNCHRONIZATION
TIME OF DAY ROUTING
VERTICAL FEATURES
ACCOUNT CODE BILLING
CALL TRACE
CELLULAR HOTLINE
CREDIT CARD CALLING
DYNAMIC POWER CONTROL
EQUAL ACCESS ORIGINATION
FIXED POWER CONTROL
MOBILE JAMMING DETECTION
NORTH AMERICA DIALING PLAN
REAL TIME BILLING
SERVICE ORDER
SPLIT TICKET BILLING
VERTICAL FEATURES 1, 2, 3
ENHANCED SECURITY PASSWORD W/ ENCRYPTION
2 STAGE DIALING (ROAMER GATEWAY)
TEMPORARY NUMBERS
VOICE MAIL SUPPORT
EXTENDED AREA PAGING
MANUFACTURER ESN FRAUD
MNP MULTI NETWORK PROTOCOL
FOCUSED MAINTENANCE
COAMS
MAINTENANCE MANAGER MORNING REPORT
OM THRESHOLDING AND ALARM
SWITCH PERFORMANCE MONITORING SYSTEM
SWITCH PATH DIAGNOSTIC SOFTWARE
REMOTE CALL FORWARD ACTIVATE/DEACTIVATE
HAND-OFF BY STATION CLASS MARK
______________
** The Software features and services that the Buyer shall have available
at Turnover shall operate substantially as those features are described in the
applicable Specifications. The functional description and manner of
performance of features and services may change from time to time as the result
of corrections and/or improvements.
1-7
<PAGE> 30
ENHANCED ROAMER VALIDATION
PRE-CALL VALIDATION
CALL SHUTDOWN
AUTONOMOUS REGISTRATION
VOICE MAIL NOTIFICATION
REMOTE VOICE MAIL ACCESS TRANSLATION (BCS 36)
CALL FORWARD ACTIVATE/DEACTIVATE
REMOTE CALL WAITING ACTIVATE/DEACTIVATE (BCS 36)
IS-41 REV.A SOFTWARE:***
- --------------------
IS-41 REV A CALL DELIVERY
MTX IS-41 INTERSYSTEM HANDOFF
DMS250/MTX CNS CCITT DATACOMM
MTX INTERSYSTEM HANDOFF
NAILED UP CONNECTIONS
VERTICAL FEATURES I
DMS BASE DATA COMM. CC SOFTWARE
MTX CALL DELIVERY
MTX AUTOMATIC ROAMING
UNIVERSAL NETWORK MESSAGING
NETWORK MESSAGING
MPC X.25 INTERFACE
HIGH SPEED EMPC
1984 X.25 LAYER 3
MULTI-PROTOCOL CONTROLLER
MPC MULTI-LINK MGR.
MPC X.25 INTERFACE
SS7 CARRIAGE
CCS7-MTP/SCCP
SYNCHRONIZATION
DMS-STP BASIC
BILGE
COMMON BASIC
CCS7-MTP/SCCP
NO. 2 SCC INTERFACE
NEW PERIPHERAL MAINTENANCE
STP OPERATIONS
INTEGRATED SSP/STP-SINGLE POINT CODE
LPP ON DMS SN SSP (MASTER PKG)
LMS ON LPP
SUPERNODE ENHANCED MSG.
FBUS-LIU BASE
LIU7 FOR LPP/CCS7
V.35 SUBRATE LINKS
______________
*** Currently available with AT&T, Motorola, Ericsson and 800CM.
1-8
<PAGE> 31
IS-41 REV.B SOFTWARE**** - with optional features (BCS 35)
**** Currently scheduled for general availability with AT&T, Motorola and
Ericcson.
1-9
<PAGE> 32
SWITCH POWER
(For a 720 Port MTX SNSE)
<TABLE>
<CAPTION>
CPC DESCRIPTION QTY
- --- ----------- ---
<S> <C> <C> <C>
B0233921 NT5C91CB MFA500 SEISMIC 1
B0233922 NT5C91CC AUTO LVD 1
A0366306 NT6C25FA CONTROLLER 1
P0727222 CKTBRKRS 15A 10
P0727223 CKTBRKRS 20A 10
P0727227 CKTBRKRS 50A 2
A0376936 CKTBRKRS 100A 4
CIRCUITBRKR BUSBARS
P0726380 POS 25 70 TO 250A 1
P0726378 POS 26 & 28 70 TO 250A 2
P072789863 POS 27 70 TO 250A 1
P0710574 JUMPER BARS "T" CONFIGURATION 2
BLANK PANELS
PO704792 12 2
MPR50 RECTIFIER AND SHELF
A0393435 NT5C07AA MPR50 5
P0736268 RECT ALARM CA 5
A0395370 NT5C12AA PWR SHELF IND AC 2
SPARES
P0734555 FAN ASSY MPR50 1
A0351850 FUSE 3/4 A MPR50 1
LOT MISC EQUP 1
WAA501B 5173-315 INVERTER 500W 1
</TABLE>
BATTERY TYPE: GNB ABSOLYTE +100A23
ENGINEERING AND INSTALLATION
1-10
<PAGE> 33
2.0 DOCUMENTATION FOR THE SYSTEM
System documentation is available through Seller's computer-based information
system ("COMPASS") as described below.
COMPASS CD-ROM: Includes one (1) compact disc and one (1) application program;
CD-ROM reader and interface card are optionally available through Seller for
use on Buyer-supplied DOS personal computer. Updates are available at
additional costs. (Documents not available on compact disc will be provided in
paper format.)
3.0 TRAINING
Seller's current recommended training course for Buyer's technicians are listed
below, which courses and curricula are subject to change at Seller's
discretion. All training is conducted at Seller facilities in Richardson,
Texas. Prices do not include travel, lodging or per diem expenses.
COURSE #941 TUITION DAYS
- ----------- ------- ----
DMS-MTX Overview * 15-20 Buyer's Office
COURSE #942 TUITION DAYS
- ----------- ------- ----
DMS-MTX Basic * 10
Maintenance
COURSE #943 TUITION DAYS
- ----------- ------- ----
DMS-MTX Advanced * 3
Maintenance
COURSE #961 TUITION DAYS
- ----------- ------- ----
Cell Site and Radio * 5
Maintenance
COURSE #980 TUITION DAYS
- ----------- ------- ----
Cellular Translations and * 10
Applications
COURSE #982 TUITION DAYS
- ----------- ------- ----
Cell Site Data Base * 3
On a dollar for dollar basis the Training courses listed in Section 1 of this
Annex 1 may be exchanged for NovAtel Training Courses.
______________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
1-11
<PAGE> 34
MTX SNSE SPARE PARTS
<TABLE>
<CAPTION>
PART NO. DESCRIPTION QTY.
- -------- ----------- ----
<S> <C> <C>
NTBX01AB ISDN SIGNAL PROC. 1
NTDX15AA POWER CONVERTER (+/-5V) 1
NTEX20AA F-BUS TERMINATOR 1
NTEX22BA ENHANCED IDF&F-BUS IF 1
NT0X10AA ALARM SCAN CARD 1
NT0X36AB CONVERTER ALARM 1
NT0X67AA I/O MSG. TERM. 1
NT0X70AC TM PROC CP 1
NT0X91AA ALARM & CONV. DRIVE 1
NT0X91AE ALARM & CONVERTER DRIVE 1
NT1X00AB 102 TEST (MILLIWATT), 0dB 1
NT1X54AA JACK ENDED TRUCK 1
NT1X55DA DISK DRIVE CTLR. 1
NT1X62CA I/O MSG CONT. (S-NODE) 1
NT1X67BC I/O TERM. CONTROLLER 1
NT1X68BC MAG TAPE CTLR 1
NT1X75BA DRA CONTROLLER 1
NT1X77AA DRA MEMORY 1
NT1X78AA POWER CONVERTER 1
NT1X90AA PCM TEST SIG. GEN (TTT) 1
NT2X09AA MULTI OUTPUT POWER CONV. 1
NT2X45AB TRUNK MOD I/F CP 1
NT2X47AD TRANS. TEST SIG. GEN (TTU) 1
NT2X48BA MF RECEIVER (FOR DIAG) 1
NT2X48BB DTMF RECEIVER (FOR DIAG) 1
NT2X53AA TRUNK MOD. CONTROLLER 1
NT2X56AB TRANS. TEST DIG. FLTR (TTU) 1
NT2X57AA ALARM SD CARD 1
NT2X59AA GROUP CODEC 1
NT2X70AE POWER CONVERTER 1
NT2X75AA LOOP AROUND TEST 1
NT2X96AA PCM LEVEL METER (TTT) 1
NT3X67AA 6 PORT CONF. CP 1
NT3X82AB OAU DEAD SYS. COM. AUD. 1
NT3X83AA OAU ALARM TRANSFER 1
NT4X65AB STM CONTROLLER 1
NT5X30AA COMMUNICATIONS TRUNK 1
NT6X41AA SPEECH BUS FORMATTER CP 1
NT6X42AA CHANNEL SUPRV. MSG. CP 1
NT6X44AB TIME SWITCH CP 1
NT6X45BA XPM PROCESSOR 1
NT6X46BB SP PROC. MEMORY 1
</TABLE>
1-12
<PAGE> 35
MTX SNSE SPARE PARTS
<TABLE>
<CAPTION>
PART NO. DESCRIPTION QTY.
- -------- ----------- ----
<S> <C> <C>
NT6X47AC MP PROC. MEMORY CP 1
NT6X50AB DS-1 EFF I/F CP 1
NT6X69AC MSG & TONE I/F CP 1
NT6X92BB UNIVERSAL TONE RECEIVER 1
NT9X12AC CPU PORT CP 1
NT9X13FA CPU 4MB DRAM ENET 1
NT9X13MA 9X13JA CLONE 1
NT9X13NA MS CPU CP 1
NT9X14DB 24 MB MEMORY CP 1
NT9X15AA MAPPER CP 1
NT9X17AD MS 4 PORT CP 1
NT9X17DA MS 64 PORT CP 1
NT9X21AB NPP BUS TERM PB 1
NT9X23AA 4XDS-30 PADDLE BOARD 1
NT9X25BA MS PORT EXPANDER 1
NT9X26AB RTIF (CURRENT LOOP) 1
NT9X30AA POWER CONV. (+5V) 1
NT9X31AA POWER CONV. (-5V) 1
NT9X35FA MS 2K NETWORK CARD 1
NT9X36BA CLK AND MESSAGE CP 1
NT9X40BA DS 512 PB 1
NT9X45BA 3 FIBER COMB 1
NT9X46AA PARALLEL PORT I/F 1
NT9X49CC MS P-BUS TERM CP 1
NT9X52AA MS T-BUS ACCESS CP 1
NT9X53AC CLONED AB+FUNDES MS CLK 1
NT9X54AC MS STRAT 1 EXTERNAL CLK 1
NT9X62AA SUBRATE DS512 I/F PB 1
NT9X62CA SUBSYSTEM CLOCK PB 1
NT9X73BA LMS-FBUS RATE ADAPTER 1
NT9X74CA F-BUS REPEATER CP 1
NT9X76AA STP SIGNAL TERM 1
NT9X78BA STP DSO I/F CP 1
NT9X79BA F-BUS EXTENSION PB 1
NT9X86AA DUAL PORT MESSAGE CONT CP 1
NT9X91AA STORAGE DEVICE POWER CP 1
</TABLE>
1-13
<PAGE> 36
RF EQUIPMENT SPARE PARTS COMPLEMENT
FOR UP TO 10 CELLS OR 100 VOICE CHANNELS
<TABLE>
<CAPTION>
NTPEC DESCRIPTION QTY
- ----- ----------- ---
<S> <C> <C>
NT3P20FA ACU INPUT CARD 1
NT3P20EA ACU OUTPUT CARD 1
NT3P28BA ACU POWER SUPPLY 1
NT3P20JB HIGH STABILITY MASTER OSCILLATOR 1
NT3P28AC POWER AMPLIFIER FAN 1
NT3P20MA CELL SITE MONITOR 1
NT3P20HK RECEIVE MULTICOUPLER 1
CND01427 NTPAD/RCMI POWER SUPPLY 1
NT3P50CA RCMI PORT CARD 1
NT3P50BA RCMI LAPD CARD 1
NT3P21CD DPC POWER AMPLIFIER 1
NT3P21HE P3 TRANSCEIVER 1
</TABLE>
1-14
<PAGE> 37
4.0 SERVICES
4.1 E, F, I and T the System in accordance with Annex 3, "Statement of
Work."
4.2 Equipment Warranty Services
(*, as detailed in Article 7 of Agreement.)
4.3 Software Warranty Services
(*, as detailed in Article 7 of Agreement.)
4.4 Technical Assistance Service
(*, as detailed in Annex 8.)
______________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
1-15
<PAGE> 38
ANNEX 2
PAYMENT TERMS
1.0 The Price for Systems or Expansions purchased under this Agreement
shall be due as follows:
<TABLE>
<CAPTION>
EVENT PERCENTAGE
----- ----------
<S> <C>
1. Upon shipment of the major components of the
Equipment. *
2. On the date of Turnover. *
3. On the date of Acceptance *
</TABLE>
2.0 Invoices shall be transmitted by U.S. Mail to the following address of
Buyer:
General Cellular Corporation
1891 Woolner Avenue
Fairfield, California 94533
Attn: Accounts Payable
______________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
<PAGE> 39
ANNEX 7
ADD-ON PRICING
1.0 The Equipment, Services and Software being provided under this
Agreement are subject to the following:
Seller reserves the right, without notice, to make changes in
Equipment design or components as progress in engineering or manufacturing
methods may warrant. However, such changes shall not adversely affect the
System performance. Any such change/update shall be explained in writing to
the Buyer by Seller within ninety (90) days from the date that the
changes/updates are made. Unless otherwise specifically stated, installation,
testing, and engineering are not included in the Prices listed herein.
2.0 For a period of five (5) years following the Effective Date Buyer may
purchase/license switching, RF Equipment and Software at *.
3.0 The items listed in this Annex will not necessarily function together
with the Equipment and Software listed in Annex 1 as a System. Upon request,
Seller will confirm the operational compatibility of any specific
configuration.
4.0 Any items of Equipment/Software not listed in this Section 4.0 will be
priced in accordance with Sections 2.0(ii) or 6.0.
______________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
<PAGE> 40
<TABLE>
<CAPTION>
DESCRIPTION PRICE DISCOUNT DISCOUNT
----- RATE PRICE
- ----------- ---- -----
<S> <C> <C> <C>
SWITCH EQUIPMENT * * *
MTX SNSE 720 PORT
MTX SNSE 240 PORT
IS-41 SOFTWARE
(Complete list in Annex 1)
BASE CELLULAR SOFTWARE
(Complete list in Annex 1)
SNSE SPARES
MCGM
MCTMI W/ICP PACKFILL
ICP PACKFILL
COAM SOFTWARE
BCS UPGRADES
COAM SOFTWARE
BCS UPGRADES
COMPASS
X.25 CARDS
LPP w/DS-0 (Required for STP)
INTERFACE CIRCUIT PAC
V.35 INTERFACE CIRCUIT PAC
LPP ON SNSE SERVICE SWITCHING
POINT INCLUDED IN
NETWORKING SOFTWARE
SIGNALING TRANSFER POINT
BASE
SIGNALING TRANSFER POINT
OPERATIONS
DIGITAL UPGRADES
MDSP (CONFIGURED FOR 4 DRUS)
DSP CONTROLLER
DSP SHELF
DSP CARDS
DRUM
DIGITAL RF UPGRADES
ICRM KIT
RMRP CARDS (8 P3S)
TCM CARDS (16 DRUS)
- --------------
</TABLE>
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
7-2
<PAGE> 41
<TABLE>
<CAPTION>
DESCRIPTION PRICE DISCOUNT DISCOUNT
----- RATE PRICE
- ----------- ---- -----
<S> <C> <C> <C>
ENGINEERING** * * *
INSTALLATION**
**Current List Price valid through December 31, 1993
RF EQUIPMENT (OMNI)
ICRM OMNI/DRU
08 CHANNEL CELL SITE **
16 CHANNEL CELL SITE **
24 CHANNEL CELL SITE **
32 CHANNEL CELL SITE **
CELL SITE/RF SPARES
08-<16 CHANNEL EXPANSIONS
16-<24 CHANNEL EXPANSIONS
24-<32 CHANNEL EXPANSIONS
DUAL MODE RADIO UNITS (DRU)
LOCATE/CONTROL CHANNELS
RECEIVE CHANNELS
LOCATE P3 TRANSCEIVER (ANALOG)
HIGH SPEED PORT CARDS
</TABLE>
**Combined, Buyer may order up to a total of 50 of these items at this price
______________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
7-3
<PAGE> 42
<TABLE>
<CAPTION>
DESCRIPTION PRICE DISCOUNT DISCOUNT
----- RATE PRICE
- ----------- ---- -----
<S> <C> <C> <C>
RF EQUIPMENT SECTORED
- ---------------------
120 DEGREE STSR * * *
24 CHANNEL 120 STSR (ICRM/DRU)
32 CHANNEL 120 STSR (ICRM/DRU)
40 CHANNEL 120 STSR (ICRM/DRU)
48 CHANNEL 120 STSR (ICRM/DRU)
120 DEGREE OTSR
24 CHANNEL 120 OTSR (ICRM/DRU)
32 CHANNEL 120 OTSR (ICRM/DRU)
40 CHANNEL 120 OTSR (ICRM/DRU)
48 CHANNEL 120 OTSR (ICRM/DRU)
DRU
120 STSR LCR/CCH (DRU/ANALOG)
120 OTSR LCR/CCH (DRU/ANALOG)
120 SECTORED LCR (DRU/DIGITAL)
800CM ANALOG CELL SITES
(Conversion Equipment)
8 Channel
16 Channel
DS
800CM DIGITAL CELL SITES
(Conversion Equipment)
8 CHANNEL
16 CHANNEL
24 CHANNEL
RADIO TRANSCEIVERS (~P2NES)
800 CM INSTALLATION PER CELL SITE
INSTALLATION & COMMISSIONING*
ICP EXPANSION (SWITCH)
MCTMI EXPANSION
LPP INSTALLATION W/O SNSE
LPP INSTALLATION W/ SNSE
08 CHANNEL
16 CHANNEL
24 CHANNEL
32 CHANNEL
08-<16 CHANNEL
16-<24 CHANNEL
24-<32 CHANNEL
</TABLE>
________________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
7-4
<PAGE> 43
<TABLE>
<CAPTION>
DESCRIPTION PRICE DISCOUNT DISCOUNT
----- RATE PRICE
- ----------- ---- -----
<S> <C> <C> <C>
TRAINING * * *
Course #941
Course #942
Course #961
Course #980
Course #982
</TABLE>
______________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
7-5
<PAGE> 44
5.0 SOFTWARE LICENSE FEE
BCS Upgrade (Basic Operating Software) *
(Per Switch - does not include any additional Equipment that may be required.)
6.0 800CM CURRENT LIST PRICING, including, but not limited to the following
items (not subject to discounts):
<TABLE>
<CAPTION>
DESCRIPTION PART LIST PRICE
- ----------- ---- ----------
<S> <C> <C>
Microvax II AC SMC2KMMCIISAAC *
Microvax II DC SMC2KMMCIIADC
Microvax II Integrated Cab3 SMC2KMMCIIINT3
Microvax III AC (SMC2KMMCIIISAAC)
Microvax III DC (SMC2KMMCIIIADC)
Microvax III Integrated Cab3 (SMC2KMMCIIINT3)
MMCI to MMCII Upgrade (SMC2KMMCXAXEAC)
MMCI to MMCII Upgrade (SMC2KMMCVAXEDC)
MMCII Base System (SMC2KMMC2DCNAF)
MMCII Additional Components
Kit DCP (16MHz 1MB 80386)
Kit ADCP (12.5MHz 512KB 80136)
MMC II Level E System Software Options
MMC Retrofit Kit (SMC2KMMCRET)
MMC Expansion (SMC2KMMCE)
8 Megabyte Memory Module
MMC Software License Fee
1-8 User Operating System
1-20 User Micro VMS
Software Options
Positive Roamer Validation
PRV Enhancement #1
PRV Reports
2000 Pre-Authorized Roamers (PAR) Upgrade
3000 Pre-Authorized Roamers (PAR) Upgrade
MMC Level I System Software
Automatic Call Delivery
Follow-Me Roaming
IS-41 Intersystem Hand-off
IS-41 Intersystem Call Delivery
Mail Box Call Forwarding
</TABLE>
______________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
7-6
<PAGE> 45
7.0 RESCHEDULING FEES
Per Diem Rates (per person) *
Remobilization Rates (per person) *
The above rates are for the remobilization event or on-site delay time only and
if implemented, shall be added to the System Price.
8.0 ADDITIONAL PRICING NOTES
8.1 During the Term of this Agreement the Equipment/Software listed in
Section 4.0 of this Annex 7 shall receive the benefit of those Warranty Periods
set forth in Section 7.2.1 of the Agreement. If a quantity limit is specified,
Buyer shall receive the benefit of such Warranty Periods up to the quantity
detailed.
8.2 For Systems 3, 4, 5 and 6 purchased hereunder, Buyer shall receive at
*, the Base Cellular Software and IS-41 Software identified in Annex 1 hereof.
______________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the Securities Act of
1933, as amended.
7-7
<PAGE> 46
ANNEX 8
TECHNICAL ASSISTANCE SERVICES
1.0 SERVICES
1.1 If Buyer experiences operational difficulties, Buyer may
contact Seller's Technical Assistance Service (TAS) Department. Special remote
terminals in the TAS Center are used to communicate with Buyer's System to
diagnose fault conditions and recommend corrective action.
1.2 This function provides three (3) basic classifications of
assistance to a customer.
1.2.1 Emergency Technical Assistance Service
This service is available to customers who require immediate
assistance with operational problems (i.e., loss of call processing, loss of
billing). This service is available 24 hours a day, seven days a week.
Through verbal reports and remote diagnoses of the System, TAS technicians
recommend actions to restore the System to stable operation as quickly as
possible. If in an emergency warranty situation, Seller determines that due to
the particular circumstances, on-site ETAs is necessary, Seller shall use all
reasonable efforts to dispatch emergency service personnel to the Installation
Site within twenty-four (24) hours of notification of the warranty defect by
Buyer.
1.2.2 Routine Technical Assistance Service
This service is available to customers who require problem
isolation/resolution in a Non-Emergency situation. This service is available
during normal business hours (8-5, Monday through Friday) and is primarily used
for analysis of routine technical problems using verbal reports from site
personnel and System-generated information.
1.2.3 Technical Information Service.
This service is available during normal working hours to answer the
variety of questions about specific System functionality, procedures,
operational issues, new features, and other telephony oriented questions.
1.3 Emergency Shipping Service for Replacement Equipment
A. For requests received during Seller regular business hours
8:00 a.m. to 5:00 p.m., Monday through Friday (excluding holidays), the
surcharge shall be * per request.**
B. For requests received outside regular business hours (as
defined above), the surcharge shall be * per request.**
* Information omitted and filed separately with the SEC pursuant to request
for confidential treatment under 406 under the Securities Act of 1933, as
amended.
** Subject to the provisions of Section 7.5.2 of the Agreement.
<PAGE> 47
2.0 SERVICES NOT COVERED BY WARRANTY
2.1 Seller will provide technical assistance free of charge during
the Warranty Period, as defined in the terms and conditions of the Purchase
Agreement. Some situations may arise during this no-charge warranty period
that will result in a service request being considered as billable. (Seller
will notify Buyer at the time of a call if the situation they are discussing is
considered billable.) Such situations include, but are not limited to the
following:
2.1.1 Requests resulting from problems with equipment not
furnished by Seller.
2.1.2 Requests where the problem solution was available via
Seller documentation such as NTPs, Advisory Bulletins, and BCS release
documents.
2.1.3 Requests that result from patches which alter the
design intent of standard software in order to provide customer requested
changes in operations.
2.1.4 Requests for on-site assistance in lieu of remote
testing.
2.1.5 Non-emergency requests outside normal business hours
(8-5, Monday through Friday, Seller Holidays), unless scheduled with
appropriate TAS manager in advance.
2.1.6 Requests for assistance in performing System data
changes or changes to "write restricted" tables.
2.1.7 Requests for assistance in identifying faulty
Hardware or Software for which standard maintenance fault- locating procedures
exists.
3.0 PRIORITY CLASSIFICATION
3.1 The TAS Center offers a single point of contact for customers
who require assistance to resolve problems which affect the technical operation
of their DMS-MTX/CSC equipment.
TAS is available 24 hours a day, 7 days a week; therefore, the
Services Priority Classification System is designed to establish an
interrelationship between the problems and the appropriate level of reaction
and resolution. The system is based upon a problem's direct or potential
effect upon subscriber service.
System problems are assigned one of five priority levels as are set
forth below and as may be revised from time to time, but not to adversely alter
the level of Service being provided. (The E1 and E2 situations are deemed by
Seller to comprise an emergency.)
8-9
<PAGE> 48
3.2 E1 - Degradation and/or Outage
(a) System ceased call processing
(b) Nonusable billing data being collected
(c) Trunk group out of service if no altroute available
(d) 10% of ports, 100 or more subscriber lines out of
service
(e) Inability to recover from initialization
(f) Unscheduled restarts
(g) Consistently slow dial tone (8 second delay or
greater)
(h) ICP out of service on MTX with only 1 CSC or ICP
(i) Operator service ceased call processing, all work
positions fail, both/all file servers fail
3.3 E2 - Potential Degradation and/or Outage
(a) Standby Central Control (CM) out of service
(b) Core equipment diagnostic failures
(c) Central Control Complex (CCC) transient errors
resulting in repeated loss of synchronization
(d) One or more CSC or ICP out of service on MTX with 2
or more CSCs/ICPs
(e) Operator service degradation due to 50% of work
positions failed, one/50% of file servers fail,
primary or secondary gateway fail.
(f) Any Message Switch (MS), Master Clock, Network
Module, Input/Output Controller, Peripheral
Processor, Network Plane, or 50% or more of equipped
Magnetic Tape Units/Disc Drive Units out of service.
3.4 S1 - Service Affecting
(a) Software errors or hardware troubles directly and
continuously affecting any subscriber's service or
Buyer's ability to collect revenue.
8-10
<PAGE> 49
(b) A problem that will seriously affect subscriber
service at in-service (IS) data.
(c) Magnetic Tape Drive (MDU) or Disk Drive Unit (DDU)
problem (excluding maintenance and administration).
(d) Central control complex (CCC) transient errors
resulting in a loss of synchronization (more than
twice a day).
(e) Any peripheral module out of service.
(f) Inoperative internal data port of Message Switch (MS)
communication link.
(g) Core equipment diagnostic failures (two or more per
day).
(h) Follow-up to E1 CSRs.
3.5 S2 - Intermittently Service Affecting
(a) Software or hardware faults that only intermittently
affect service to one or more classes or subscriber.
(b) System related documentation errors which
categorically result in or lead to service impairment.
(c) Problems where the operating company can show
significant impact upon plant and traffic operations
and upon its ability to plan office extensions.
(d) Office Alarm Unit (OAU) out of service.
(e) Core equipment diagnostic failures (less than two per
day).
(f) Central Control Complex (CCC) transient errors
resulting in loss of synchronization (less than two
per day).
(g) Peripheral circuit failures.
3.6 NS - Non-Service Affecting Conditions
(a) Service analysis, recorded announcement, operational
measurements, maintenance program, network management
problems, or system related documentation
inaccuracies, which do not affect call processing or
revenue collection capabilities.
8-11
<PAGE> 50
(b) Non-service affecting software inconsistencies.
(c) Peripheral equipment diagnostic failures, not already
defined above, which cannot be corrected by the
resident engineer.
(d) Test equipment failures for which a backup or manual
alternative can be employed.
(e) Circuit pack testing problems.
(f) Repetitive Central Control Complex (CCC) transient
errors with no loss of synchronization, which cannot
be corrected by resident skills.
(g) Requests to analyze store dump of a single occurrence
initialization.
4.0 CUSTOMER SERVICE REPORT (CSR) PROCEDURES
4.1 Buyer Responsibility
It is recommended that the Buyer arrange to have all Engineering and
Technical Support personnel attend specified training courses in order to
properly utilize existing documentation and diagnostic resources required to
ensure proper day to day operations of its Equipment. Buyer is expected to
understand and determine all engineering parameters and to use all locally
available resources to troubleshoot and isolate system problems prior to
calling Seller TAS for assistance; however, in emergency situations such as
System outages, TAS should be notified immediately.
Whatever the nature of the service call, the more completely the
trouble is described, the more efficiently the problem can be analyzed and
rectified.
When a service call is placed with TAS, the following information must
be provided:
- Indicate if the call is an emergency or not;
- Company name and switch site location;
- Main telephone number;
- Contact name and telephone number;
- Hardware type;
- Detailed problem description.
After a service call is placed, Buyer site personnel must be available
to take direction from TAS to perform on-site activity required to isolate and
resolve the problem.
4.2 TAS Responsibility
a. Seller Normal Business Hours
8-12
<PAGE> 51
Routine or Emergency Service calls are taken during normal business
hours (8-5, Monday through Friday, except Seller Holidays).
The TAS Coordinator (Receptionist) will direct the service call to the
prime TAS representative assigned to the account. If the prime TAS
representative is unavailable, a message may be taken or the call may be
referred to a secondary TAS representative. TAS is committed to a same day
reply to all messages. Emergency calls are responded to immediately by the
first available TAS representative.
The TAS representative taking the service call will request the
required customer information, determine if the problem description requires
that a Customer Service Report (CSR) be opened (general questions which do not
require investigation may not need to be formally documented by a CSR),
determine the appropriate priority classification, and respond according to the
response objective associated with that classification.
The TAS representative responsible for the CSR will prioritize all
assigned CSRs according to priority classification and will resolve and close
the CSR with the Buyer based on classification.
b. Outside Normal Business Hours
Emergency Service Only (E1, E2)
After-hours service calls are taken by an answering service. The
answering service will record the calling party name, company and telephone
number and will activate the emergency pager service to page the designated TAS
representative on-call. If there is no response within five minutes, the
answering service will begin calling home phone numbers and pagers of TAS
Managers and other TAS representatives until contact is made. The responding
Seller representative will contact Buyer immediately and take appropriate
action to resolve the trouble. The service call will be formally documented
the next regular business day.
8-13
<PAGE> 52
ANNEX 10
ADDITIONAL SELLER COMMITMENTS
1. A Seagate 220 MB hard drive will be provided * with each
System purchased under this Agreement.
2. In the event that it is determined by Seller's supplier that a
change is required to correct an inoperative condition essential to the proper
operation of Buyer's System(s), Seller will correct such condition in
accordance with its supplier's then current change procedures.
3. Seller will receive the most current generally available
Software release at the time of System Installations. BCS 35 is currently
scheduled for availability during the third quarter of 1993. All System
Installations performed prior to the release of BCS 35 will be installed with
BCS 34, with an upgrade to BCS 35 whenever generally available, at no charge.
4. Optional features available under BCS Software releases may be
licensed for use at an additional licensing fee. Request for new Software
features, Software feature enhancements or Software patches can be made through
Buyer's Account or Program Manager. Each request is evaluated and placed into
a planning and development cycle. Feature development is dependent on various
circumstances, such as, but not limited to, existing plans for development and
testing. Seller will notify Buyer regarding the status of any such request
within ninety (90) days after the request is received.
5. Seller is providing Buyer will all necessary IS-41 Rev A
Software needed to perform networking on the SNSE over the X.25 protocol to
AT&T, Motorola, and NovAtel. Seller is also providing the Software needed to
network (Rev A) over the SS7 protocol with Ericcson on the SNSE. Additional
equipment may be required.
IS-41 Rev B is currently scheduled for availability in BCS 35.
6. Upon availability in BCS 35 Seller will provide the IS-41+
software feature for any Systems purchased under this Agreement, at no charge.
Additional equipment may be required.
7. Buyer and Seller will mutually agree to the Installation
schedule of all Conversion Equipment. Seller is seeking to schedule such
conversions so as to allow that they occur during a minimized period of time.
Presently (as of March 30, 1993), 500 radios are available for conversion.
__________________________________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under 406 under the Securities Act of
1933, as amended.
<PAGE> 53
8. Budgetary prices for CDMA Supercell are listed below.
(Additional equipment and software will be required, however, budgetary pricing
is unavailable at this time.)
CDMA Transceivers *
18 Channel Cell Site *
24 Channel Cell Site *
Testing of CDMA is scheduled to occur in late 1993 with product
availability currently scheduled for 1994.
9. If requested, Seller will assist Buyer in obtaining a copy of
the Automatic File Transfer Multi Network specification. This specification
will be needed by Buyer in order for it to develop an interface with various
billing vendors for the Multi Network Protocol feature. The COAM Software
feature will allow Buyer to pass billing information between Systems that are
operating on the same BCS load.
Seller currently supports the following billing vendors: Prism, DEC,
EDS, HP and CSI.
10. Presently no SNSEs are using satellite transmission for
communication or maintenance to a remote location.
11. The following personnel positions are assigned to support
Buyer:
Area Sales Manager
Program Manager
Technical Liaison
12. No later than ninety (90) days prior to the expiration of a
System Warranty Period, Seller shall offer to Buyer post warranty support by
means of an Extended Service Plan.
13. Buyer may install cell site equipment provided that Buyer's
qualified technicians have been approved in writing by Seller to perform such
installation(s). Qualified technicians means that Buyer's supervisory level
technicians have successfully completed Seller's required training courses.
The installation of cell site equipment by Buyer's qualified technicians, who
perform the installation in accordance with applicable sections of Northern
Telecom installation manuals and Northern Telecom Practices (NTPs) shall not
invalidate the warranty.
Seller agrees to recognize a limited number of technicians as
"qualified" in advance of the above, provided that they have previously
successfully completed NovAtel RF maintenance courses.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under 406 under the Securities Act of 1933, as amended.
10-2
<PAGE> 54
14. Seller will provide dedicated on site technical support for
four (4) weeks after the Turnover Date of each System purchased during the Term
of this Agreement.
15. Complete "as built" drawings and documentation will be
provided by Seller within 3 months of the date of Acceptance for each System
purchased during the Term of this Agreement.
16. For each System purchased, the following number of people may
attend the training classes listed below*:
941 - Basic DMS-MTX Maintenance
942 - Advanced DMS-DTX Maintenance
** 2 persons - Translation classes
980 - Cellular Translations and Applications
**2 persons - Cell Database classes
982 - Cell Site Databases
**2 persons - Cell Installation & Maintenance classes
961 - Cell Site and Radio Maintenance
**4 persons for TDMA System I
If Buyer is unable to attend training courses on the dates they are
offered, Buyer may request that classes be scheduled to meet its specific
scheduling requirements. Any such class requires a minimum of six (6) students
to be enrolled before it is scheduled.
17. For each System purchased under this Agreement, Seller will
provide at no charge a method for inventory control called Extended Product
Inventory Control (EPIC). This program tracks the site-specific inventory and
revision status of Northern Telecom hardware, comparing the inventory to the
baseline release levels and notifying customers of design changes.
18. Documentation. Seller will provide:
a. Two (2) complete sets of SNSE switch manuals per
switch purchase. Any additional switch manuals are available for * per set.
__________________________________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under 406 under the Securities Act of
1933, as amended.
** 2 persons - SNSE Switch classes
10-3
<PAGE> 55
b. One (1) complete set of cell site manuals per cell
purchase.
c. Upon shipment of TDMA System I, an additional 15 sets
of cell site manuals will be provided at *.
19. Unless otherwise agreed, the standard lead time for shipment
of a System after an order is received, is *.
When forecasted, the current lead time for shipment after an order is
received is:
Standardized Cell Sites * weeks
Cell Site Expansions * weeks
Radios * weeks
Expansion Switching Equipment * weeks
(MDSP, ICP, etc.)
Switch * weeks
20. Respecting a written request from Buyer regarding Seller's
ability to comply with a specific CTIA, EIA or TIA standard, Seller will
respond in writing with an outline explaining either its then-current
compliance, future plans for implementation or inability to comply.
21. In the event that Seller is unable or unwilling to provide
IS-41 Rev 0, A or B, or IS-52, 54, 55 or 56 service (or a revision thereto if
already available) on the MTX-SNSE, Seller will outline in writing, upon
written request from Buyer why it is unable to provide such service(s).
800 CM COMMITMENTS
22. Seller will support the 800CM product line through VO6.
Thereafter, Seller will undertake additional development only as required to
provide basic functionality and mandatory features, as defined by CTIA, to
support 800 analog MHz AMPs cellular service.
23. VO5B is currently scheduled to be generally available in May
of 1993 and will be provided * for Buyer's existing MMC and SMC systems.
Included in VO5B will be the following features:
IS-41 Rev A
Switch Manager (EDS only at this time)
User Adjustable Handoff Parameter
10,000 PARs (SMC-2000)
__________________________________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under 406 under the Securities Act of
1933, as amended.
10-4
<PAGE> 56
SC DataCom Transfer
Restricted Service Areas
R2 Enhancements
Extended Spectrum Support
IS-41 (X.25 Protocol) Software for all MMCs and SMCs will be provided
at no charge.
VO6 is currently planned to be generally available in October, 1993.
24. When requested, Seller will assist Buyer in obtaining the CSO
Billing Summary Reference Guide SM-6000014. This Guide will be needed by Buyer
in order for it to develop an interface with various billing vendors for the
Switch Manager feature. Seller also agrees to provide Buyer and its third
parties a reasonable amount of assistance in the development and testing of the
interface.
25. Software maintenance for Buyer's existing MMC and SMC systems
will be provided * during the Term of this Agreement. Software maintenance
following the expiration of the Term will be at *.
26. An SMC-2000 based, dedicated PAR Server (without MSUs/single
sided) is not planned before late 1993.
27. During the Term of this Agreement application engineering will
be provided for Buyer's 800CM equipment *.
28. 800 CM Training
800 CM training is currently available as follows:
<TABLE>
<CAPTION>
Course Title Current Location Current Price
- ------------ ---------------- -------------
<S> <C> <C>
800CM Operation and Maintenance Calgary *
800CM Combined Installation and Maintenance Calgary *
800CM Management Overview Calgary *
NBS 800DR Operation and Installation Calgary *
NBS 800DR Operational and Maintenance Calgary *
</TABLE>
29. Seller agrees to provide Buyer with an OMC (MMC II) to replace
the existing MMC in Fairfield, California at a charge of *. Charges for
deinstallation of the MMC, installation of the OMC, and freight (delivery of
the OMC, return of the MMC) are the responsibility of Buyer. Scheduling will
be mutually agreed to between Buyer and Seller.
__________________________________
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under 406 under the Securities Act of
1933, as amended.
10-5
<PAGE> 1
EXHIBIT 10.6
SUPPLY CONTRACT
BY AND BETWEEN
WESTERN PCS CORPORATION
AND
NOKIA TELECOMMUNICATIONS INC.
<PAGE> 2
TABLE OF CONTENTS
PAGE
PREAMBLE
ARTICLE 1 DEFINITIONS.....................................................2
ARTICLE 2 PURPOSE OF THE SUPPLY CONTRACT..................................4
ARTICLE 3 SCOPE OF SUPPLY.................................................5
ARTICLE 4 PURCHASER'S OBLIGATIONS.........................................7
ARTICLE 5 PRICE AND PAYMENTS..............................................8
ARTICLE 6 DELIVERY.......................................................10
ARTICLE 7 INSTALLATION...................................................11
ARTICLE 8 INSPECTION, TESTING AND ACCEPTANCE.............................12
ARTICLE 9 WARRANTIES, MAINTENANCE AND TECHNICAL SUPPORT..................14
ARTICLE 10 DELAYS, DAMAGES AND TERMINATION................................18
ARTICLE 11 FORCE MAJEURE..................................................20
ARTICLE 12 GOVERNMENT REGULATIONS.........................................21
ARTICLE 13 CONFIDENTIALITY................................................21
ARTICLE 14 INTELLECTUAL PROPERTY RIGHTS...................................23
ARTICLE 15 EFFECTIVE DATE.................................................24
ARTICLE 16 GENERAL........................................................24
SIGNATURES
-i-
<PAGE> 3
APPENDICES
APPENDIX 1 TIME SCHEDULE
APPENDIX 2 PCS 1900 BTS DESCRIPTION FOR WESTERN PCS
APPENDIX 3 BASE STATION CONTROLLER (BSC) DESCRIPTION FOR WESTERN PCS
APPENDIX 4 TRANSCODER (TCSM) DESCRIPTION FOR WESTERN PCS
APPENDIX 5 NOKIA OMC SYSTEM DESCRIPTION FOR WESTERN PCS
APPENDIX 6 ROLLING FORECAST AND ORDERING PROCEDURE FOR NOKIA BSS EQUIPMENT AND
SERVICES
APPENDIX 7 ENGINEERING SERVICES
APPENDIX 8 PROJECT ORGANIZATIONS AND MEETINGS
APPENDIX 9 INITIAL ORDER
APPENDIX 10 BSS SITE REQUIREMENTS
APPENDIX 11 PRICING - NOKIA BASE STATION SUBSYSTEM
APPENDIX 12 ACCEPTANCE PROCEDURES
APPENDIX 13 DIVISION OF RESPONSIBILITIES BETWEEN SUPPLIER AND PURCHASER
APPENDIX 14 SOFTWARE LICENSE AGREEMENT
APPENDIX 15 SUPPORT SERVICES AGREEMENT
-ii-
<PAGE> 4
THIS SUPPLY CONTRACT, made and entered into this 14th day of December, 1995.
by and between
Western PCS Corporation, a Delaware corporation having its principal
office at 330 120th Avenue N.E., Suite, 200, Bellevue, WA 98005 (hereinafter
referred to as the "Purchaser");
and
Nokia Telecommunications Inc., a Delaware corporation having its
principal office at 7 Village Circle, Suite 100, Westlake, Texas 76262
(hereinafter referred to as the "Supplier").
WITNESSETH THAT
WHEREAS
A The Purchaser has successfully bid for broadband Personal
Communication Services (hereinafter "PCS") licenses in recent auctions conducted
by the Federal Communications Commission (hereinafter "FCC") and has been
awarded 6 MTA licenses by the FCC, namely, Portland, Salt Lake City, Honolulu,
E1 Paso, Des Moines and Oklahoma City, to build and operate PCS networks in
those areas. The Purchaser, its Affiliates (as defined below) or the Purchaser's
Partners (as defined below) may acquire licenses or rights for additional PCS
networks; and
B The Purchaser has decided to deploy PCS 1900 technology
(hereinafter "PCS 1900") for its PCS networks; and
C The Supplier designs, manufactures and sells PCS 1900 Base
Station Sub-System infrastructure equipment and software and performs related
services' (hereinafter "BSS Systems"); and
D The Purchaser has issued a request for quotation (hereinafter
"RFQ") to selected vendors to offer BSS Systems for its PCS networks; and
E The Supplier has submitted an offer (hereinafter "Offer") in
response to the RFQ for the supply of BSS Systems for the Purchaser's PCS
networks; and
F The Parties have conducted good faith negotiations based on
Nokia's Offer whereby the Purchaser has agreed to purchase from the Supplier BSS
Systems and the Supplier has agreed to supply the same.
NOW, THEREFORE, THE PARTIES HERETO HEREBY AGREE AS FOLLOWS:
<PAGE> 5
ARTICLE 1
DEFINITIONS
In all interpretations of this Supply Contract the following definitions shall
govern:
1.1 "Acceptance" shall mean, in respect of each Site, the successful
completion of testing of Equipment and Software at such Site as specified in
Article 8 of this Supply Contract and "Acceptance Date" shall mean the date on
which Acceptance has occurred.
1.2 "Additional Order" shall mean an Order issued by the Purchaser
hereunder for Equipment, Software or Services not within the Total Supply
Contract Price.
1.3 "Affiliate" shall mean another entity which controls a Party
hereto, or is controlled by a Party hereto or which is under common control with
a Party hereto. Control, for the purposes of this Paragraph, shall mean the
direct or indirect ownership of more than 50%, of the shares or interests
entitled to vote for the directors thereof or the equivalent, for so long as
such entitlement exists or equivalent power over management thereof.
1.4 "Certificate of Acceptance" shall mean a document to be issued by
the Supplier and countersigned by the Purchaser upon Acceptance as set forth in
Article 8 below.
1.5 "Consecutive Order" shall mean any Order of the Purchaser
hereunder, other than the Initial Order, for Equipment, Software or Services
within the Total Supply Contract Price.
1.6 "Documentation" shall mean the system description documents,
general instructions, drawings, diagrams and other written material that the
Supplier is required to provide to the Purchaser under this Supply Contract,
other than documents falling within the definition of Equipment. Documentation
includes all documents necessary for the installation, operation and maintenance
of the Equipment and Software.
1.7 "Equipment" shall mean all the telecommunications equipment
(together with the manuals and other equipment-specific documentation separately
itemized in Appendix 11 attached hereto and including - without separate
itemization - such installation materials and consumables that are necessary for
installation at the Sites), but not including the Software. In the event of new
items of equipment to be included into the Supply Contract as Equipment, or
items of existing Equipment to be deleted from the scope of the Supply Contract,
then the Parties shall amend Appendix 11 accordingly. Whenever the Supplier
shall have new equipment to offer to its PCS1900 customers, then the Supplier
shall offer the same to the Purchaser, and such equipment will then be included
as part of Appendix 11.
1.8 "Information" shall mean technical, financial and commercial
information and data relating to a Party's or its Affiliates' or Purchaser's
Partners respective businesses, finances, planning, facilities, products,
techniques and processes and shall include, but is not limited to, discoveries,
ideas, concepts, know-how techniques, designs, specifications, drawings,
blueprints, tracings, diagrams, models, samples, flow charts, data, computer
programs, disks, diskettes,
-2-
<PAGE> 6
tapes, marketing plans, customer names and other technical, financial or
commercial information and intellectual properties, whether in written, oral or
other tangible or intangible forms.
1.9 "Initial Order" shall mean the first Order of the Purchaser
hereunder, attached hereto as Appendix 9. The Initial Order shall comprise of 1
OMC, 2 BSC and 20 BTS. The Equipment and Software under the Initial Order shall
be subject to system acceptance testing as set forth in Appendix 12.
1.10 "Order" shall mean the Initial Order, a Consecutive Order or an
Additional Order.
1.11 "Party" shall mean the Purchaser or the Supplier.
1.12 *
1.13 "Services" shall mean the system design, installation,
commissioning, integration supervision, training, consultancy and technical
assistance services that the Supplier is required to provide to the Purchaser
under this Supply Contract and which are described in Appendix 7. Whenever the
Supplier shall have new services to offer to its PCS1900 customers, then the
Supplier shall offer the same to the Purchaser, and such services will then be
included as part of Appendix 7.
1.14 "Site" shall mean each physical location where Equipment will be
installed.
1.15 "Software" shall have the meaning set forth therefor in the
software license agreement attached hereto as Appendix 14.
1.16 "Specifications" shall mean the technical requirements and
performance standards of the Equipment and Software as set forth in Appendices
2-5 attached hereto. The said Appendices 2-5 shall be updated from time to time
as and when new items are included into the definition of the Equipment.
However, unless otherwise agreed, such future amendments of Appendices 2-5 shall
not reduce, diminish or otherwise adversely impact the previously agreed
Specifications.
1.17 "Sub-System" shall mean all Sites under a single base station
controller (including such base station controller itself).
1.18 "Supply Contract" shall mean this Supply Contract and all its
appendices as well as any amendment or addenda that may subsequently be agreed
upon in writing between the Parties.
1.19 "System" shall mean any PCS radiotelephone system to be operated
by the Purchaser or its Affiliate.
- --------
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
-3-
<PAGE> 7
1.20 "Time Schedule" shall have the meaning set forth in Paragraph 6.3
below.
1.21 "Total Supply Contract Price" shall mean the aggregate price
amounting, at minimum, to * (inclusive of the credit set forth in Paragraph 5.10
below) during a period of * years from the date hereof, exclusive of any sales
or similar taxes, payable by the Purchaser to the Supplier for the Equipment,
Software and Services provided under the Initial and Consecutive Orders
hereunder. The Purchaser has the option to extend this commitment up to * during
a period of * years by placing Additional Orders.
ARTICLE 2
PURPOSE OF THE SUPPLY CONTRACT
2.1 By entering into this Supply Contract, the Purchaser and the
Supplier agree on all the terms and conditions applicable to their respective
rights and obligations regarding the supply of Equipment, Software or Services
by the Supplier to the Purchaser.
2.2 In addition to this Supply Contract document, the following
documents are hereby expressly incorporated herein by reference and made part of
this Supply Contract:
APPENDIX 1 TIME SCHEDULE
APPENDIX 2 PCS 1900 BTS DESCRIPTION FOR WESTERN PCS
APPENDIX 3 BASE STATION CONTROLLER (BSC) DESCRIPTION FOR WESTERN PCS
APPENDIX 4 TRANSCODER (TCSM) DESCRIPTION FOR WESTERN PCS
APPENDIX 5 NOKIA OMC SYSTEM DESCRIPTION FOR WESTERN PCS
APPENDIX 6 ROLLING FORECAST AND ORDERING PROCEDURE FOR NOKIA BSS
EQUIPMENT AND SERVICES
APPENDIX 7 ENGINEERING SERVICES
APPENDIX 8 PROJECT ORGANIZATIONS AND MEETINGS
APPENDIX 9 INITIAL ORDER
APPENDIX 10 BSS SITE REQUIREMENTS
APPENDIX 11 PRICING - NOKIA BASE STATION SUBSYSTEM
APPENDIX 12 ACCEPTANCE PROCEDURES
APPENDIX 13 DIVISION OF RESPONSIBILITIES BETWEEN SUPPLIER AND PURCHASER
APPENDIX 14 SOFTWARE LICENSE AGREEMENT
APPENDIX 15 SUPPORT SERVICES AGREEMENT
- --------
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
-4-
<PAGE> 8
In case of any discrepancies among the above documents, the text of
this Supply Contract shall always prevail over any of the Appendices and the
Appendices shall apply in the order set forth above. Each Appendix shall prevail
over the documents referenced in said Appendix. Later made addenda and
amendments alter the contents of this Supply Contract only to the extent
expressly agreed upon between the Parties; all other conditions shall always
remain unchanged.
2.3 The Supplier hereby grants the Purchaser's Partner(s) right to
purchase Equipment, Software and Services under the same prices (excluding the
discounts set forth in Paragraphs 5.10 and 5.11) as set forth in this Supply
Contract, provided, however, that (i) the Supplier and the Purchaser's
Partner(s) enter into a separate agreement(s) governing such purchase, unless
the Purchaser chooses to act as the buyer towards the Supplier (in which case
the discounts set forth in Paragraphs 5.10 and 5.11 shall apply); and (ii) the
Supplier is reasonably satisfied of the creditworthiness of the Purchaser's
Partner(s) at all times. The Supplier hereby warrants that it is willing to
enter into such agreement(s) based on substantially the same terms and
conditions as set forth in this Supply Contract.
It is further agreed that the payment term under any such agreement(s)
shall be * days from the issuance of the invoice subject to the same invoice
milestones as set forth in this Supply Contract.
ARTICLE 3
SCOPE OF SUPPLY
3.1 The Supplier shall supply to the Purchaser, pursuant to the Initial
Order and the Consecutive Orders issued by the Purchaser in accordance with
Paragraph 4.2 below, the Equipment, Software, Services, spare parts, training,
Documentation and the special tools and instruments which are ordered by the
Purchaser from time to time.
3.2 A technical description of the BSS System is contained in
Appendices 2-5.
3.3 Appendices 2-5 attached hereto define the technical limits within
which the Equipment and Software are limited as well as the requirements of the
environment, infrastructure and interworking equipment necessary to achieve
properly functioning Equipment and Software. The conditions and procedures for
interface arrangement are also specified in said Appendices 2-5. The Supplier
shall, if so requested by the Purchaser, take project management responsibility
for the implementation of interworking verification between the Equipment and
NSS equipment provided by a third party vendor on terms and conditions to be
mutually agreed upon by the three parties involved. The Supplier further
warrants that the Equipment and Software shall, at all times, conform to the
A-Interface specifications as provided by the applicable standard, as the same
shall change from time to time. The Supplier's cooperation with the third party
NSS equipment vendor shall include trouble shooting, interoperability testing,
and good faith effort to
- --------
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 9
cooperate with such third party to meet the Purchaser's requirements. It is
however expressly agreed that the Supplier shall not be liable in any way for
the functionality of any equipment or software provided by a third party, or for
any acts or omissions of such third party. The Purchaser shall use all
reasonable efforts to enter into a similar undertaking with the third party to
ensure the third party's cooperation with the Supplier to facilitate the
objectives described herein.
3.4 The Specifications to which the Equipment and Software shall be
required to conform are set forth in Appendices 2-5 attached hereto. The
Supplier shall obtain any necessary type approvals to the extent not heretofore
obtained.
3.5 The Supplier may use reliable subsuppliers and subcontractors in
the performance of its obligations hereunder and the Supplier shall be fully
responsible towards the Purchaser for the performance of such subsuppliers and
subcontractors. The Parties hereby acknowledge that the following Affiliates of
the Supplier may be involved in the manufacture and delivery under this Supply
Contract:
Nokia Telecommunications Oy
Nokia Telecommunications Ltd.
It is agreed that the Purchaser shall have the right to approve the
engagement of major subcontractors or subsuppliers, such approval not to be
unreasonably withheld.
3.6 Additions, deletions and other changes to this Supply Contract
require a written amendment of this Supply Contract. All such Supply Contract
amendments, which will be numbered consecutively, shall be duly signed and
delivered by authorized representatives of both Parties prior to effecting any
of the changes therein contained. In the case of the changes being necessary to
the timing and quantifies of deliveries of the Equipment, the change order
procedure specified in Appendix 6 shall apply. This Paragraph 3.6 shall be
without prejudice to the purchase commitment of the Purchaser contained in
Paragraph 4.2 below.
3.7 The Supplier shall within a reasonable time of receiving a
reasonable request for a change issued by the Purchaser provide a written offer
to the Purchaser.
3.8 Notwithstanding the foregoing provisions, the Supplier may make
minor modifications to the Equipment or Software or provide new versions or
models of individual items of Equipment or Software, provided that such
modifications and/or new versions (i) fully meet the requirements of this Supply
Contract (including the Specifications) and (ii) are fully compatible with
respect to form, fit and function with any and all Equipment and Software, of
the same generation, earlier delivered under this Supply Contract.
3.9 The Supplier hereby grants to the Purchaser options to order
additional quantities of Equipment, Software and Services beyond that covered by
the Total Supply Contract Price. Unless otherwise mutually agreed, all the terms
and conditions of this Supply Contract shall apply to the deliveries of the
additional quantities of Equipment and Software and to the performance of the
additional, Services. An Additional Order consistent with the foregoing shall be
duly issued
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by the Purchaser and accepted by the Supplier, in the event that the Purchaser
elects to exercise these options.
3.10 The project organizations of the Supplier and of the Purchaser are
as specified in Appendix 8 attached hereto. There shall at all times during the
performance of this Supply Contract be a responsible Project Manager or his
authorized deputy present at the designated Project Office of each Party,
authorized to receive all notices that may be given under this Supply Contract
and to take all day-to-day decisions required for the implementation of Supply
Contract work. The Supplier shall provide progress reports to the Purchaser and
attend progress meetings at Portland, Oregon (unless other venue is agreed upon)
as specified in Appendix 8.
ARTICLE 4
PURCHASER'S OBLIGATIONS
4.1 The Purchaser shall pay the price of the Equipment, Software and
Services provided by the Supplier in accordance with Article 5 hereunder.
4.2 The Initial Order of the Purchaser is attached hereto as Appendix
9. The Purchaser shall provide the Supplier with a * of the Purchaser's
requirements of the Equipment, Software and Services on a monthly basis in
accordance with the forecast procedures specified in Appendix 6. The first such
forecast shall be provided on or about 1 January 1996. The Purchaser agrees to
issue Consecutive Orders in addition to the Initial Order together aggregating
the Total Supply Contract Price ("Commitment"). The lead times for ordering the
Equipment, Software and Services included in the said forecasting procedure are
set forth in Appendix 6.
4.3 The Purchaser shall provide to the Supplier all the information, in
Purchaser's possession, that the Supplier may reasonably request from time to
time and that is necessary for the proper performance of Supplier's obligations
hereunder, promptly upon request.
4.4 The Purchaser shall obtain all the construction, zoning and
building consents, permits and approvals and operating licenses necessary for
the timely delivery, installation, testing, commissioning and operation of the
System. The Supplier shall be responsible for obtaining the necessary type
approvals in the United States for the operation of the Equipment as part of the
System. The Supplier shall manufacture, package, deliver and install all
Equipment and Software and perform all Services in compliance with all federal,
state and local laws and regulations (including, without limitation, OSHA) in
force on the date of shipment of such Equipment or Software or provision of such
Services. In addition, Supplier warrants that all Equipment, Software and
Services shall comply with all industry and other applicable standards,
including, without limitation, the following standards: UL, National Electric
Code and Universal Building Code.
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* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 11
4.5 The Purchaser shall make available all the required Sites meeting
the Site requirements specified in Appendix 10 attached hereto, as well as the
transmission routes and other facilities outside the technical limits and the
Supplier's respective obligations defined for the Equipment, in sufficient time
to allow for the timely delivery, installation, testing, commissioning and
operation of the Equipment and Software. Use of the Sites and all such
facilities by the Supplier for the performance of its obligations hereunder
shall be free of charge to the Supplier. The Supplier shall have reasonable
access to all Sites at all reasonable times (including using reasonable efforts
to provide access during overtime hours, Saturdays, Sundays and holidays).
ARTICLE 5
PRICE AND PAYMENTS
5.1 Appendix 11 contains an itemized breakdown of prices of individual
units of Equipment, Software and Services as well as the provisions concerning
validity of the prices over time. In the event of new items of Equipment,
Software and Services, the Supplier shall make a price quotation to the
Purchaser of the same.
5.2 The Initial Order shall be invoiced as follows:
(a) *
(b) *
(c) *
(d) *
5.3 The prices for the items of Equipment and Software in Consecutive
Orders and in Additional Orders shall be invoiced as follows:
*
5.4 The prices for any Services shall be invoiced monthly based on the
work completed.
5.5 All invoices for Equipment and Software under the Initial and
Consecutive Orders shall be paid within *
5.6 Those additional Services that become necessary because of reasons
due primarily to the Supplier, such as additional installation personnel to make
up for time lost or to rectify the Supplier's errors or omissions in Supply
Contract work, shall be * to the Purchaser.
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* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 12
5.7 All prices are expressed exclusive of any US federal, state or
local sales, transfer and similar taxes levied on account of sales hereunder.
Such taxes and charges shall be invoiced in addition to the price, if
applicable.
5.8 In the event of any delay in payments, the Purchaser shall pay
interest on the amount delayed at the rate of the lesser of (a) eighteen percent
(18%) per annum for each day elapsed from the due date to the date of actual
payment, calculated on the basis of a 360-day year and (b) the maximum rate
allowed by applicable law. Any partial payments received shall first be applied
to cover accrued interest, if any, and thereafter credited to cover the
principal amount outstanding.
5.9 It is expressly agreed that the aggregate value of Equipment and
Software delivered and/or Services performed, but not yet paid in full, shall
not, at any given time, exceed *. In the event that this limit is exceeded, then
the Purchaser shall either (i) make payment of the Equipment and Software
delivered and/or Services performed although not yet due so that the Supplier's
exposure is decreased below the said limit, or (ii) provide a payment security
reasonably acceptable to the Supplier. It is however agreed that in the event
that the said limit is exceeded, the Supplier shall continue the performance of
the agreed Services but not the delivery of new items of Equipment and Software,
provided however, that no invoices that have become due are outstanding in which
case the Supplier may discontinue the performance of the Supply Contract.
5.10 *
(a) *
(b) *
5.11 *
(a) *
(b) *
(c) *
(d) *
(e) *
(f) *
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* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 13
(g) *
(h) *
(i) *
(j) *
(k) *
ARTICLE 6
DELIVERY
6.1 All deliveries shall be effected F.O.B. (as defined in the Uniform
Commercial Code) at the intermediate storage location designated by the
Purchaser at least 30 (thirty) days in advance of the scheduled delivery date
therefor. The risk of loss in the Equipment and Software shall transfer to the
Purchaser upon Acceptance thereof. The title in the Equipment shall transfer to
the Purchaser upon full payment thereof. The title in the Software shall always
remain with the Supplier and/or its licensors.
6.2 In the event that the Supplier shall not be responsible for the
performance of the implementation Services as set forth in Paragraph 7.3 below,
then the Purchaser shall inspect the deliveries effected within * of their
arrival to ascertain correct quantities and to record visible transport damage,
if any. In the event of any transport damage being discovered, the Supplier
shall effect replacement delivery as soon as reasonably possible. In the absence
of manifest error or a written notice of the Purchaser to the contrary within *
of the arrival of each delivery, correct quantities of Equipment and no visible
transport damage shall be deemed to have been effected in accordance with the
documentation issued by the Supplier. Minor missing items and shortfalls which
do not prevent the erection and installation of the Equipment concerned shall
not render the delivery concerned incomplete for the purposes of this Supply
Contract on condition that the Supplier makes good such missing items in
sufficient time for the proper installation and testing of the Equipment at the
relevant Site by the Purchaser.
6.3 The overall Time Schedule of the Initial Order is in Appendix 1
indicating the relevant time periods and dates for the manufacture, shipment,
installation, testing and commissioning of the various Sites of the Initial
Order. The time periods applicable to Consecutive and Additional Orders shall be
specified in each such Order, in accordance with the order lead times specified
in Appendix 6 and shall, upon the confirmation of the Supplier, become
incorporated into the Time Schedule which will be updated from time to time.
Both Parties expressly agree to adhere to said Time Schedule. Each Party shall,
however, be obliged to give due consideration to any reasonable proposal of the
other Party regarding changes of the Time
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* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 14
Schedule which, if agreed upon, shall be recorded in an amendment of this Supply
Contract in accordance with the provisions of Paragraph 3.6 above. The Parties
contemplate that Appendix 1 will be amended shortly after execution of this
Agreement.
ARTICLE 7
INSTALLATION
7.1 The Purchaser shall, not later than * prior to the scheduled date
of starting the installation of Equipment and Software at each Site, notify the
Supplier in writing of the readiness of the Site(s) concerned. The Supplier
shall then transport the Equipment and Software to such Site(s) from the
intermediate storage location, the costs thereof to be reimbursed by the
Purchaser. The representatives of both Parties shall then inspect each Site
within * of the date specified in Purchaser's notice to ascertain the readiness
of such Site(s) for installation. The Supplier may, in respect of multiple
Sites, waive such inspection of one or more Sites. The results of such Site
inspection shall be certified in writing by the representatives of both Parties.
Minor discrepancies which do not affect the proper installation, testing and
commissioning of the Equipment and Software shall not prevent the performance of
the same.
7.2 In the event that a given Site is not ready for installation and/or
testing and commissioning in accordance with the Time Schedule, appropriate
measures shall be agreed upon (without prejudice to the right of the Supplier to
receive payment which otherwise would have been due hereunder and to be
compensated for any additional reasonable costs incurred as a result thereof)
between the Parties to minimize the resulting additional cost and delay, if any.
It is however expressly agreed that the Supplier shall not be entitled to any
compensation on such delays, provided, that sufficient prior notice of the
delay, which period shall not be less than *, is given to the Supplier. It is
further expressly agreed that the Supplier shall have the right, if deemed
appropriate by the Supplier, to deploy its resources elsewhere during the period
when such delay exists, and, that resuming the performance, and the timing
thereof, shall be subject to mutual agreement. The Supplier shall use reasonable
efforts to mitigate any additional costs associated with such delay and shall
resume performance as soon as reasonably practicable.
7.3 Installation, commissioning, integration and acceptance testing of
the Equipment and Software shall be performed by or on behalf of the Supplier
with respect to the first * Sites under the Supply Contract. If the Purchaser
desires to retain the Supplier to render these Services beyond the completion of
the first * Sites, then the performance of such Services is subject to a * lead
time. The Purchaser may discontinue the performance of such further services, if
ordered, subject to a * prior written notice. In case the Purchaser undertakes
the performance of the implementation services (installation, commissioning,
integration and acceptance testing), then the following terms and conditions
shall apply:
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* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 15
(i) Notwithstanding Paragraph 10.1, the liquidated
damages set forth in the said Paragraph 10.1, shall be payable in the event that
the agreed delivery date to the Purchaser's premises is delayed; and
(ii) Acceptance shall occur at the earlier of *
(iii) Notwithstanding Paragraph 9.1, *
(iv) Risk of loss in the Equipment and Software shall
transfer to the Purchaser upon delivery to the Purchaser's premises.
It is further agreed that the Supplier shall provide project management
Services to the Purchaser for a period starting from the date hereof and ending
1 July 1996. If the Purchaser desires to continue such Services it shall give
the Supplier at least * notice, and subsequently if the Purchaser desires to
cancel such Services it shall give the Supplier at least * notice. It is further
agreed that the Purchaser shall commence payment of the * fee for the project
management from 1 January 1996 onwards, *, until discontinuation of such
Services as aforesaid, unless it is agreed that the Supplier shall continue the
performance of these Services after the said date.
7.4 Upon completion of the preparation of each Site, a certificate to
that effect shall be signed by the representatives of both Parties. On that
certificate there shall be recorded such minor discrepancies observed (if any)
that do not prevent the testing and commissioning of the Equipment and Software
in accordance with the requirements of this Supply Contract.
7.5 Should the Equipment and Software, once the electrical and
mechanical installation is substantially complete, not be capable of being
tested and commissioned, the Parties shall record the substantial completion of
the installation as well as the reasons (and the measures to be undertaken by
the responsible Party) of such circumstances.
ARTICLE 8
INSPECTION, TESTING AND ACCEPTANCE
8.1 The testing and quality assurance procedures of the Supplier at the
factory for the Equipment are described in Appendix 12. The Purchaser shall have
the right to be represented at the factory testing of Equipment. All travel and
accommodation costs of the Purchaser's personnel during such inspection visits
shall be at the cost of the Purchaser. The Supplier shall provide results of the
factory tests of Equipment to the Purchaser.
8.2 After completion of installation of each Site by the Supplier, the
Equipment and Software thereat shall be tested by the Supplier. The Supplier
shall notify the Purchaser in writing
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* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 16
not less than * prior to the commencement of such tests. The Purchaser may, in
respect of repeat deliveries of Equipment and Software identical to items
earlier delivered, waive the performance of these tests in which case such
Equipment and Software shall become accepted, upon putting into commercial
service or, in the absence of written notice of rejection given prior to the
time limits hereinafter specified, * after completion of installation or * after
delivery, whichever occurs first.
8.3 The program of tests to be conducted in respect of each type of
Equipment is specified in Appendix 12 attached hereto.
8.4 The tests shall be carried out within the periods specified in
Appendix 12 from the date specified in the Supplier's notice referred to in
Paragraph 8.2 above. Upon achieving satisfactory results of such tests, the
Parties shall issue a Certificate of Acceptance * of the completion of the tests
in respect of the Site concerned. In the event that the Purchaser's
representative is not present at such tests, the Certificate of Acceptance shall
be issued by the Supplier on the basis of the Supplier's test report. Minor
deficiencies or discrepancies which do not either prevent satisfactory
commercial operation of the Equipment and Software or result in an absence of
functionality materially affecting (a) service quality, (b) service
functionality, or (c) operations and/or maintenance, shall not prevent the
issuance of the Certificate of Acceptance. Such deficiencies and discrepancies
shall be recorded in a separate document attached to the Certificate of
Acceptance, together with the corrective action (and timeframes applicable to
such action, which normally shall not exceed *) to be taken by the Supplier. The
Supplier shall use its diligent efforts to cure all of the deficiencies and
discrepancies so recorded.
8.5 In the event that the Equipment and Software at the Site concerned
does not satisfactorily pass the tests, the Supplier shall rectify the defects
as promptly as practicable and the procedure referred to above in this Article
shall be repeated as many times as is necessary.
8.6 If the Equipment and Software cannot be fully tested because of
reasons not primarily attributable to the Supplier, all those tests that may be
performed shall be carried out, complemented by such alternative tests (such as
simulated transmission loops) as are possible in the circumstances. Unless
defects that are sufficient grounds for rejection of Acceptance are discovered,
the Equipment and Software concerned shall be accepted and a Certificate of
Acceptance shall be issued on condition that the missing tests, if any, shall be
carried out at a later date and the defects that may then be discovered shall be
subject to the Suppliers warranties to the extent provided in Article 9 below.
8.7 Acceptance of Equipment and Software that is put to commercial use
shall be deemed to have occurred regardless of whether such Equipment and
Software has become tested in accordance with the foregoing provisions or not
and regardless of the results of any such tests. Commercial use shall be deemed
to have occurred for these purposes when the Purchaser's
- --------
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 17
customers are being serviced (except for testing purposes) or are being charged
for service which utilizes the Equipment. A Certificate of Acceptance shall, in
these cases and in any cases where the Purchaser has failed to do so in
accordance with the foregoing provisions, be issued accordingly by the Supplier
without prejudice to the Supplier's obligation to remedy defects under warranty
or to complete agreed testing at a later date.
ARTICLE 9
WARRANTIES, MAINTENANCE AND TECHNICAL SUPPORT
9.1 The Supplier warrants that the Equipment will be new, unused
(except for testing required under this Supply Contract) when delivered and,
subject to the provisions of this Article 9, will be free from defects in
materials and workmanship and will substantially conform with and perform the
functions set forth in the Specifications during the warranty period of * .
Repaired or replaced units and subassemblies shall have a new Warranty Period of
*. The Supplier further warrants that all Services furnished under this Supply
Contract shall be performed in a professional and workmanlike manner and shall
be free from defects in materials and workmanship during the Warranty Period. If
defects in material or workmanship or nonconformity with Specifications appear
within the Warranty Period, then the Supplier shall as promptly as practicable,
at its own expense, repair or replace, at Supplier's own option, any such
defective Equipment or redo such faulty Services. Subject to the terms of this
Supply Contract, the warranties shall equally apply in the event that the
installation of the Equipment is performed or on behalf of, the Purchaser.
9.2 In the event of latent defects, * from the Acceptance of the
Equipment, preventing satisfactory commercial operation of the System or
resulting in an absence of functionality materially affecting (a) service
quality, (b) service functionality, or (c) operations and/or maintenance, then
the Parties shall negotiate in good faith on the appropriate action to be
undertaken by the Supplier to rectify the situation. The Supplier shall use high
priority to rectify any such defects.
9.3 The Purchaser shall carry out the necessary work to identify and
locate the defect. The Supplier agrees to provide reasonable technical
assistance for such fault-finding work upon request.
9.4 The Purchaser shall arrange, at its own cost, the return shipment
of the defective part, subassembly or unit (if applicable) to the facility
therefor designated by the Supplier, together with the appropriate documentation
required for such shipment and return shipment thereof. The Supplier shall bear
the costs of shipment of the repaired or replaced unit to the Purchaser. The
re-installation of the repaired or replacement part, subassembly or unit shall
be performed by the Purchaser.
- --------
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 18
9.5 The Purchaser shall notify the Supplier in writing of each defect
discovered in the Equipment promptly upon its occurrence but in any event not
later than * after it has been discovered. The Purchaser shall provide the
following information in each notice:
(a) identification of the location of the Equipment;
(b) identification of the Equipment (type, serial number, date of
delivery and commissioning);
(c) description of the defect;
(d) identification, if known, of the source of the defects; and
(e) identification, if known, of the defective subassembly, if
applicable.
The Purchaser shall promptly provide any additional information known
to Purchaser concerning the defect and its occurrence that the Supplier may
reasonably request.
9.6 The warranties of the Supplier under this Article 9 are valid only
on condition that:
(a) the Purchaser has acted substantially in conformity with these
warranty terms;
(b) the Equipment has not been modified or repaired by any
unauthorized party or using any unauthorized parts, subassemblies or software
without the prior written consent of the Supplier, which consent shall not be
unreasonably withheld.
9.7 The warranties of the Supplier under this Article 9 do not cover:
(a) components which are normally consumable or perishable in
operation such as lamps, fuses etc.;
(b) any defects arising out of or in connection with any improper
handling or use, due to no fault of the Supplier, its employees,
representatives, agents or subcontractors, or by external reasons, such as (but
not limited to) excessive physical force, water or humidity and other
detrimental environmental or operating conditions beyond the limits specified
for each item of Equipment in the Specifications;
(c) electromagnetic interference beyond the limits set forth in
the technical appendices or malfunctions of interconnected equipment;
(d) damage to property or equipment other than the Equipment
itself; or
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<PAGE> 19
(e) damage due to the Equipment not having been transported,
stored, installed and operated, by a party other than the Supplier, its
employees, representatives, agents or subcontractors, substantially in
accordance with the instructions and specifications of the Supplier.
9.7A Notwithstanding the foregoing, if the Purchaser requests the
Supplier to repair any Equipment or component thereof which has been damaged as
a result of any of the events set forth in Paragraphs 9.6 and 9.7 above, then
the Supplier agrees to use its reasonable efforts to repair or replace such
Equipment or component thereof and cure such defects and shall charge the
Purchaser the Supplier's standard rates for such services.
9.8 The Parties acknowledge that all warranties with respect to
Software included within this Supply Contract shall be as set forth in a
separate software license agreement to be entered into between the Purchaser and
the Supplier in the form of Appendix 14.
9.9 Each Party hereto shall hold harmless and indemnify the other
Party for any and all liability arising from any accident or injury to any
person or property of any third party occurring in connection with the errors,
omissions and other actions of that Party or its employees, servants and agents
and those of its subcontractors engaged in the activities connected with this
Supply Contract, provided that the Party claiming such indemnity shall
immediately notify the other Party and afford the other Party with every
possibility (at such other Party's option and expense) to defend against or
otherwise dispose of or settle in its discretion any claim thereof (with respect
to which the Party claiming indemnity shall give the other Party all reasonable
assistance and will not by any act or omission do anything which may directly or
indirectly prejudice such other Party in connection therewith). The Supplier
hereby confirms that its potential liability under this Paragraph is
sufficiently covered by insurance. The Purchaser shall take all reasonable
measures, whether or not proscribed by applicable law, to prevent access of
unauthorized persons to the Sites where Equipment is installed and operated and
to install proper warning signs outside such Sites until the title is
transferred to the Purchaser.
9.10 The aforesaid warranties are expressly in lieu of all other
conditions and warranties, express, implied, or statutory, including without
limitation ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS, each of
which are hereby disclaimed.
9.11 The Supplier covenants that it is willing to provide maintenance
and support services to the Purchaser for the Equipment and Software
incorporated in the System for a period of 10 (ten) years from the date hereof.
Such services shall be subject to concluding a separate contract between the
Parties in the form of Appendix 15.
9.12 The Supplier covenants that spare parts or functionally
equivalent replacement or expansion parts, within the limits of the
Specifications, shall be available to the Purchaser, at prices and other
conditions generally offered by the Supplier and its Affiliates, for a period of
10 (ten) years from the date hereof.
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<PAGE> 20
The Supplier may, at any time, cease production or purchase, as the
case may be, of any part of the Equipment; provided, however, that the Supplier
shall maintain a sufficient inventory of such discontinued Equipment to meet the
Supplier's obligations under this Paragraph 9.12. The Supplier shall notify the
Purchaser of Supplier's intent to discontinue production or purchase, as the
case may be, specifying the approximate number of such parts the Supplier then
has in inventory, twelve (12) months in advance of the final production run or
purchase to allow the Purchaser to purchase any additional parts it may desire
for inclusion in said final production run or purchase.
In the event that the Supplier ceases production of such parts, and in
the absence of any compatible alternative solution provided by the Supplier, the
Supplier shall, upon Purchaser's written request, deliver to the Purchaser such
drawings, specifications, special tooling and information as may be necessary to
manufacture or cause to be manufactured any part of the Equipment as to which
the Supplier has notified the Purchaser of cessation of manufacture, provided
however, that such information is reasonably available to the Supplier and
transferable to the Purchaser without restrictions from third parties, together
with a non-exclusive, non-transferable (except in the event that this Supply
Contract is transferred to a third party pursuant to Paragraph 16.4),
royalty-free license to make, use, or have made, any such part or Equipment
exclusively for the purpose of operating and maintaining any System of the
Purchaser, its Affiliate or Purchaser's Partner, and not for any other purpose,
to the extent the Supplier is able to grant such a license. Any such information
furnished hereunder shall be subject to the restrictions set forth in Article
13.
9.13 In addition to the warranties set forth herein, if Supplier
purchases or subcontracts for the manufacture of any part of the Equipment or
the performance of any of the Services to be provided hereunder from any other
person, the warranties given to the Supplier by such other person shall inure to
the benefit of Purchaser, and Purchaser shall have the fight to enforce such
warranties through Supplier. Such warranties, when available, shall be in
addition to and not in lieu of any warranties given by the Supplier under this
Agreement.
9.14 It is the intention of the Parties hereto that any problem, defect
or failure in the System (including, without limitation, those relating to
interference) which detrimentally prevents satisfactory commercial operation of
the System or results in an absence of functionality materially affecting (a)
service quality, (b) service functionality, or (c) operations and/or maintenance
("Emergency") shall be corrected as promptly as practicable and reasonable in
the circumstances regardless of fault and in this regard the Supplier agrees to
use all reasonable efforts to work with and cooperate with the Purchaser and any
other vendor or contractor to Purchaser to correct any such problem, defect or
failure. If the Purchaser and the Supplier disagree as to the cause of the
problem, defect or failure, or the action to be taken, at Purchaser's request,
the Supplier shall nevertheless correct any problem, defect or failure in the
System (whether or not such problem, defect or failure is the responsibility of
the Supplier) as promptly as practicable and bill the Purchaser for such;
provided, however, that the Supplier shall not be required to repair or modify
any equipment purchased by the Purchaser from a third party. The Parties shall
thereafter negotiate in good faith to determine whether such problem, defect or
failure was the responsibility of the Supplier or any other party. If determined
that such problem,
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<PAGE> 21
defect or failure was not the responsibility of the Supplier, the Supplier shall
charge the Purchaser the Supplier's standard rates for such service.
9.15 The Supplier shall, at its sole cost and expense, cause to be
maintained at all times during the term of this Supply Contract the following
insurance:
(a) Worker's Compensation insurance in the form and amount
prescribed by law of the state in which Services are performed; and
(b) Employer's liability insurance with limits of at least
$1,000,000 (one million dollars) for each occurrence; and
(c) Comprehensive general liability insurance with a broad form
endorsement which includes, but is not limited to, coverage for products
liability, personal injury, broad form property damage, coverage for completed
operations, and contractual liability, with respect to the liability assumed by
the Supplier hereunder. Limits will not be less than $2,000,000 (two million
dollars)combined single limit for each occurrence; and
(d) Umbrella liability insurance with limits of at least
$5,000,000 (five million dollars) for each occurrence.
ARTICLE 10
DELAYS, DAMAGES AND TERM/NATION
10.1 In the event that the Acceptance of a piece of Equipment (i.e. one
network element, i.e. BTS, BSC, or OMC) is delayed beyond the dates specified in
the Order therefor for reasons primarily attributable to the Supplier or its
employees, representatives agents or subcontractors, then the Supplier shall pay
to the Purchaser liquidated damages for such delay, calculated on the basis of
the price of the Equipment at the rate of * .
Notwithstanding the beforesaid, in the event that Acceptance of
Equipment in at least * of the Sites under the Initial Order has been delayed
for reasons primarily attributable to the Supplier, and provided that, the delay
of Acceptance of Equipment under all these Sites has exceeded *, then additional
liquidated damages may be claimed at the same rates as aforesaid but calculated
on the basis of the price of all the other Equipment under the Initial Order
(i.e. *) and such liquidated damages will be in addition to the maximum amount
of liquidated damages already claimed but will not be assessed retroactively on
the Equipment already subject to the payment of liquidated damages. Such
liquidated damages shall be calculated from the date that the right to claim
such damages has occurred for as long as the delay on the * of the Sites as a
whole persists.
- --------
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 22
It is however expressly agreed, that the maximum amount of liquidated damages
shall in no case exceed * of the price of the Equipment under the Initial Order.
The Parties mutually acknowledge that the aforesaid amounts are
reasonable in light of the anticipated actual harm which might be caused by any
delay in Acceptance and the difficulty of ascertaining damages. Such liquidated
damages shall be payable, at the Supplier's option, as an offset against the
Purchaser's final or other payments due with respect to the Equipment so
delayed. The Purchaser shall not have the right to terminate this Supply
Contract or any orders pursuant hereto on account of delays attributable to the
Supplier unless and until the delay amounts to twice the period required for the
maximum amount of liquidated damages as set forth in this Paragraph 10.1, in
which case the Purchaser may terminate the order pursuant to this Agreement only
to the extent of the Equipment so delayed and receive full refund of all moneys
theretofore paid. The Supplier shall have no other liability for delays other
than as specified in this Paragraph 10.1.
10.2 In the event that the Supply Contract work is prevented or impeded
by reasons not attributable to the Supplier, its employees, agents,
representatives or subcontractors, then the applicable time periods contained in
the Time Schedule shall be extended (without prejudice to other possible
consequences under this Supply Contract) correspondingly.
10.3 Except as set forth in Paragraph 10.1 above and notwithstanding
any other provision of this Supply Contract, NEITHER PARTY (NOR ITS AFFILIATES)
SHALL UNDER ANY CIRCUMSTANCES BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL
OR INCIDENTAL DAMAGES OR LOST PROFITS, LOST OPPORTUNITIES, LOST REVENUES OR
DAMAGES ARISING FROM LOSS OF USE howsoever arising under or in connection with
this Supply Contract and that the Supplier's (and its Affiliates') liability for
breach of warranty or otherwise hereunder shall be strictly limited to, in the
Supplier's discretion, repair or replacement of the non-conforming goods or
parts thereof or the repayment of amounts theretofore paid with respect thereto.
10.4 In the event that a Party is in default of a material obligation
under this Supply Contract (other than a payment obligation) and fails to remedy
(or, as applicable, to take sufficient action to remedy) such default within a
reasonable time fixed by the non-defaulting Party (which period shall not be
less than *) in a written notice drawing the attention of the defaulting Party
to the default and requiring the same to be remedied, then the non-defaulting
Party. shall have the right to terminate this Supply Contract within * of the
expiry of the period fixed, provided that the period during which the defaulting
Party shall have the right to cure such a default shall be extended as long as
the defaulting Party is diligently and promptly taking all reasonable actions to
cure such a default. In the event that a Party is in default of a payment
obligation, the terms of the preceding sentence shall apply except that the
reasonable time period to be fixed by the non-
- --------
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 23
defaulting Party shall not be less than * . In the event of bankruptcy,
receivership or comparable procedure under applicable law of a Party hereto or
in case the default is not capable of being remedied, then the non-defaulting
Party may terminate this Supply Contract forthwith. Termination shall apply to
such part of the Supply Contract as remains unperformed unless it would be
manifestly unreasonable to require the terminating Party to retain the part
performed by the defaulting Party.
10.5 In the event that the Purchaser's license to operate any market
which is being deployed with the Supplier's Equipment, Software or Services is
subsequently revoked, then the Purchaser may terminate this Supply Contract with
respect to that market, but not with respect to any other market being deployed
at the time, if applicable. In such case the Purchaser shall compensate the
Supplier for all Equipment and Software delivered and Services performed and for
all the Equipment ordered prior to the date of notice to terminate the Supply
Contract, provided however that the Supplier has commenced the manufacture of
the same, and provided further that the Supplier can not reasonably dispose of
the same with other customers. In any such case the Purchaser's commitment with
respect to the Total Supply Contract Price shall be proportionately reduced
based on the value of the markets being deployed and canceled.
ARTICLE 11
FORCE MAJEURE
11.1 Neither Party shall be liable to the other for any delay or
non-performance of its obligations hereunder in the event and to the extent that
such delay or non-performance is due to an event of Force Majeure (as
hereinafter defined).
11.2 The following events shall be recognized as events of Force
Majeure:
War, civil unrest, strikes, lock-outs and other general
labor disputes, acts of government, natural disasters, exceptional
weather conditions, breakdown or general unavailability of
transport facilities, accidents, fire, explosions, and general
shortages of energy, materials and components, and other similar
events, in each case which are beyond the control of the Party and
which occur after the date of signing of this Supply Contract and
which were not reasonably foreseeable at the time of signing of
this Supply Contract and whose effects are not capable of being
overcome without unreasonable expense and/or loss of time to the
Party concerned.
11.3 Each Party shall inform the other Party of the occurrence of any
event, of Force Majeure, its expected duration and cessation, respectively
without delay.
- --------
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 24
11.4 In the event that performance of Supply Contract work becomes
substantially suspended as the result of an event of Force Majeure for a
continuous period exceeding six (6) months, then the other Party has the fight
to cancel the Supply Contract in respect of the unperformed part of the Supply
Contract. The Party whose performance is affected by Force Majeure shall not
incur any liability to the other Party as a result of cancellation pursuant to
this Paragraph 11.4. For the sake of clarity it is recorded here that the Party
whose performance is so affected by Force Majeure shall not have the right to
cancel this Supply Contract due to such Force Majeure.
11.5 Delay or non-performance arising in the performance by a
subcontractor of a Party hereto shall be excusable only if the subcontractor
itself would be excused under the foregoing provisions if said subcontractor had
contracted directly with the Purchaser.
ARTICLE 12
GOVERNMENT REGULATIONS
12.1 Each Party hereto shall be solely responsible for complying with
the applicable legislation or regulations when performing its activities under
or in connection with this Supply Contract.
12.2 Each Party hereto agrees not to export or re-export, as the case
may be, any Equipment or information to any country without obtaining any
licenses and permits that may be required under any applicable legislation or
regulations.
12.3 Without limiting the generality of the foregoing, each Party shall
be responsible for compliance with the applicable tax, social security and
similar regulations applicable to its activities hereunder.
ARTICLE 13
CONFIDENTIALITY
13.1 Each Party (hereinafter the "Receiving Party,") shall keep all
Information received from the other Party (hereinafter the "Disclosing Party")
in whatever form as strictly confidential and shall not disclose it to third
parties without the prior written consent of the Disclosing Party. Information
shall not be used by the Receiving Party for any purpose other than in
connection with the purposes of this Supply Contract or the operation of the
System. The foregoing obligations shall not apply to any Information which:
(a) is in the public domain at the time of disclosure or later
becomes, part of the public domain through no fault of the Receiving Party;
(b) was known to the Receiving Party prior to disclosure by the
Disclosing Party as proven by the contemporaneous written records of the
Receiving Party;
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<PAGE> 25
(c) is disclosed to the Receiving Party by a third party who did
not obtain such Information, directly or indirectly, from the Disclosing Party
subject to any confidentiality obligation;
(d) is at any time independently developed by the Receiving
Party as proven by its contemporaneous written records;
(e) is expressly authorized in writing by the Disclosing Party;
or
(f) is required by law, court order or a governmental agency to
be disclosed (in which ease the Receiving Party will give the Disclosing Party
as much notice thereof as reasonably practicable and which will be done subject
to confidentiality protection to the extent reasonably available).
13.2 The Parties recognize that each of them is part of an
organization of multiple legal entities in several jurisdictions and that it may
be necessary or appropriate for each Party to provide Information to its
Affiliates. For this purpose, each Party agrees (both as the Disclosing Party
and as the Receiving Party hereunder) that:
(a) the Receiving Party may disclose Information to an Affiliate
but only to the extent that such Affiliate has a need to know such Information
in order to carry out the purpose described herein. The Purchaser may disclose
Information to a Purchaser's Partner only subject to prior consent of the
Supplier which consent shall not be unreasonably withheld;
(b) disclosure by or to an Affiliate of a Party hereto shall be
deemed to be a disclosure by or to that Party, as applicable; and
(c) each Party guarantees the observance and proper performance
by all of its Affiliates of the terms and conditions of this provision.
13.3 Information shall be deemed the property of the Disclosing
Party, and the Receiving Party will, upon receipt of a written request from the
Disclosing Party, return all Information received in tangible form to the
Disclosing Party or destroy all such Information and all copies thereof or
documents containing Information (except that a single copy may be retained by
counsel for record purposes, to be used only if a dispute arises which relates
to the Information). It is however , agreed that the Purchaser shall have the
right to retain Information necessary for the proper installation, expansion,
operation and maintenance of the System.
13.4 Each Party shall limit access to Information to those of its
employees, representatives, contractors or advisors to whom such access is
reasonably necessary or appropriate for the proper performance of Supply
Contract work or installation, expansion, operation or maintenance of the
System.
13.5 Notwithstanding the foregoing, neither Party shall be liable to
the other for any unauthorized disclosure of Information if it can be
established that it has exercised the same
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<PAGE> 26
degree of care in protecting the Information from such disclosure as it
exercises, in respect of its own confidential information and business secrets.
13.6 The provisions of this Article 13 shall bind the Parties for a
period of 5 (five) years from the date of signing of this Supply Contract or, in
respect of every item of Information later disclosed hereunder, a period of 3
(three) years from disclosure, whichever period is longer regardless of any
earlier termination, cancellation or completion of this Supply Contract.
ARTICLE 14
INTELLECTUAL PROPERTY RIGHTS
14.1 Ownership of the copyright in all drawings, specifications,
manuals, documents, and data, provided by one Party hereto to the Other under
this Supply Contract shall remain with the Party first referred to above but the
receiving Party shall be deemed to have a non-exclusive royalty-free license
(subject to any fees therefor set forth in Appendix 11) to use such copyright
for the performance of the Supply Contract work as well as for the operation and
maintenance of the System in the United States. Such license shall not include
any right to grant sublicenses except as set forth in Paragraph 16.4 below.
Unauthorized copying shall be strictly prohibited.
14.2 Subject to the conditions and limitations set forth below, the
Supplier undertakes to defend, at its own expense, and to indemnify the
Purchaser for any cost, loss or damage arising out of infringement of United
States patents, copyrights or registered designs or other intellectual property
rights of third parties by use of the Equipment or Software for their intended
purposes in the System, and the Supplier shall pay all sums, including without
limitation, attorneys fees and other costs which, by final judgment or degree,
or in settlement of any such suit or claim, may be assessed against the
Purchaser on account of such infringement, provided that:
(a) in case of any claim of infringement, the Purchaser shall
promptly notify the Supplier and afford the Supplier with every possibility to,
at Supplier's option, but with an obligation to find a solution which will
enable the operation of the System, (and at no cost to the Purchaser) to modify
the Equipment or Software so as to make it non-infringing, provided that such
modified Equipment or Software substantially conforms to the Specifications and
any work to be performed in conjunction therewith shall, to the extent possible,
be performed during off-hours or otherwise with minimum interruption of service,
to obtain a license from the owner of the right that is alleged to be infringed
by Equipment or Software and/or to defend against or otherwise dispose of or
settle in its discretion, but with the obligation to find a solution that will
enable the operation of the System, the claim of infringement (with respect to
which the Purchaser shall give the Supplier all reasonable assistance and will
not by any act or omission do anything which may directly or indirectly
prejudice the Supplier in connection therewith); and
(b) the foregoing shall not apply in cases where (and to the
extent that) the claim for infringement is based on any unauthorized
modification of the Equipment or Software, use of Equipment or Software for
purposes other than that they were designed for or if the infringement results
from compliance by the Supplier with any part of the specification that is a
requirement which is designed by the Purchaser and which is not reasonably
capable of being
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<PAGE> 27
complied with without infringement of the intellectual property right on which
the third party has based its claim; and
(c) to the extent that a third party makes a claim of
infringement against the Supplier or its Affiliates engaged in Supply Contract
work based on the exceptions specified in the foregoing subparagraph (b) above,
the Purchaser shall indemnify the Supplier in respect of any cost, loss or
damage arising out of such action, subject to the same conditions (mutatis
mutandis) as are specified in subparagraph (a) above.
14.3 The use of any Software within the Equipment shall be subject to
a separate license agreement in the form of Appendix 14.
ARTICLE 15
EFFECTIVE DATE
15.1 This Supply Contract becomes effective on the date when this
Supply Contract has been signed by the duly authorized representatives of both
Parties and delivered by each Party to the other Party.
15.2 This Supply Contract shall remain valid for a period of ten (10)
years from, the date of signature hereof, unless earlier terminated pursuant to
Paragraph 10.4, 10.5 or 11.4.
ARTICLE 16
GENERAL
16.1 Any and all disputes that may arise between the Parties (and any
claim by a Party against an Affiliate of the other Party) under or in connection
with this Supply Contract shall be finally settled (together with any
counterclaims and any disputes under or in connection with the Support Services
Agreement or the Software License Agreement) in arbitration by a single
arbitrator, or if no such arbitrator can be identified, by a panel of three (3)
arbitrators, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect unless otherwise agreed by the Parties.
The Parties agree to seek to mutually designate an independent technical expert
in the field to act as the arbitrator of any dispute with respect to technical
issues. In the event that the Parties hereto cannot agree upon a mutually
acceptable arbitrator, then each Party shall appoint one (l) arbitrator, and
such two (2) arbitrators shall in turn appoint a third arbitrator, and such
three (3) arbitrators shall constitute the panel. In the event that the two (2)
arbitrators appointed by the Parties are unable to agree on the third
arbitrator, then such third arbitrator shall be appointed by the American
Arbitration Association. Should either Party fall to appoint an arbitrator and
to notify the other Party of such appointment within thirty (30) days after a
demand has been made in writing by the other party for such appointment, or
should either arbitrator so appointed decline to serve and no replacement is
appointed within thirty (30) days thereof, then the arbitrator duly appointed
and willing to serve shall be the sole arbitrator to consider the dispute. The
compensation, cost and expense of single arbitrator, technical expert, or the
panel of the three (3) arbitrators, as applicable, shall be paid by the Party
found to be at fault, as stated in the arbitration award, unless otherwise
determined by
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<PAGE> 28
the arbitrators to be reasonable in the circumstances. The arbitration shall be
conducted on a confidential basis in New York, New York in the English language.
The award shall be final and binding on the Parties and enforceable in any court
of competent jurisdiction. Neither Party shall institute a proceeding hereunder
unless at least sixty (60) days prior thereto such Party shall have furnished to
the other notice of its intent to do so. Neither Party shall be precluded hereby
from seeking provisional remedies in the courts of any jurisdiction, including,
but not limited to, temporary restraining orders and preliminary injunctions, to
protect its rights and interests, but such shall not be sought as a means to
avoid or stay arbitration, nor shall either Party be precluded from pursuing any
available remedies with respect to protection of its Software or Information.
16.2 No failure or delay of either Party in exercising its rights
hereunder (including but not limited to the right to require performance of any
provision of this Supply Contract) shall be deemed to be a waiver of such rights
unless expressly made in writing by the Party waiving its rights. This Supply
Contract may not be terminated, modified, amended or waived orally but only
through a writing signed by an authorized representative of the Party against
whom it is sought to be enforced. There are no representations or warranties
except as expressly stated herein.
16.3 Any notice given by one Party to the other shall be deemed
properly given if specifically acknowledged by the receiving Party in writing or
when delivered to the recipient by certified or registered mail, return receipt
requested, or by confirmed telecopier or telex transmission to the following
addresses:
(a) if to the Purchaser, to:
Western PCS Corporation
330 120th Ave. N.E. #200
Bellevue, WA 98005
Attention: Director of Legal Affairs and with a copy to
Director of Engineering
with a copy to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, NY 10112
Attention: Mr. Barry A. Adelman
(b) if to the Supplier, to:
Nokia Telecommunications Inc.
7 Village Circle, Suite 100
Westlake, Texas 76262
Attention: Vice President, Marketing and Sales
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<PAGE> 29
with a copy to:
Nokia Telecommunications Oy
Upseerinkatu 1
FIN-02600 Espoo
Finland
Attention: General Counsel
or to such other address or addresses as a Party shall designate by notice given
in such manner to the other Party.
16.4 Neither Party shall assign or transfer to any third party, without
the prior written consent of the other Party, this Supply Contract or any of its
share or interest therein. Such consent shall not be unreasonably withheld in
case of assignment to an Affiliate of the assigning Party, on condition that the
assigning Party shall remain fully responsible towards the other Party for the
proper fulfillment of this Supply Contract.
Notwithstanding the beforesaid, in the event that the Purchaser
transfers its assets in any market which deploys the Supplier's Equipment to
another entity which shall take over the ownership and operation of that market,
then the Purchaser shall be entitled to assign the Purchaser's rights under this
Supply Contract to such party with respect to such market, provided however,
that the party in question agrees in writing to be bound by the terms and
conditions of this Supply Contract, and that the Supplier is reasonably
satisfied of the creditworthiness of such party and its ability to fulfill the
terms and conditions of this Supply Contract. It is however expressly agreed
that such assignment shall not extend to any indebtedness of the Purchaser.
Any assignment in violation of the foregoing shall be null and void.
16.5 The relationship between the Supplier and the Purchaser during the
term hereof shall be solely that of vendor and vendee, the Purchaser, its
agents, employees, representatives or Affiliates shall under no circumstances be
deemed agents or representatives of the Supplier or its Affiliates, and nor
shall the Supplier, its agents, employees, representatives or Affiliates under
any circumstances be deemed agents or representatives of the Purchaser or its
Affiliates, and the Purchaser and its agents, employees, representatives or
Affiliates shall have no right to enter into any contracts or commitments in the
name of or on behalf of the Supplier and its Affiliates, or to bind the Supplier
and its Affiliates, in any respect whatsoever, nor shall Supplier and its
agents, employees, representatives or Affiliates have any right to enter into
any contracts or commitments in the name of or on behalf of the Purchaser and
its Affiliates, or to bind the Purchaser and its Affiliates, in any respect
whatsoever.
16.6 This Supply Contract contains the entire understanding between the
Parties in respect of the subject matter and all previous correspondence,
memoranda, minutes of meetings, offers, enquiries, leaflets, brochures and other
documents exchanged between the Parties prior to the date of this Supply
Contract shall be canceled and superseded by this Supply Contract unless, in
respect of any particular document, expressly incorporated herein by reference
or as an
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<PAGE> 30
attachment hereto. No waiver of any term or condition shall be deemed a waiver
of any such term or condition in the future, unless such change, amendment,
modification or waiver shall be in writing and signed by authorized
representatives. Without limitation on the foregoing, neither the warranties or
the limitations thereto nor any other term or condition set forth in this Supply
Contract may be changed, amended, modified or waived as a result of any purchase
Order submitted by the Purchaser nor by the acceptance of any such purchase
Order or by any acknowledgment thereof submitted by the Supplier. In the event
of any conflict or inconsistency between the terms of any purchase Order or
acknowledgment, the terms and conditions of this Supply Contract shall control.
16.7 This Supply Contract may be executed in any number of
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall be considered one document.
16.8 This Supply Contract is governed and interpreted in accordance
with the laws of the state of New York, without regard to its conflict of laws
principles, as if wholly performed therein. The Parties hereby exclude the
application hereto of the United Nations Convention on Contracts for the Sale of
Goods.
16.9 If any provision of this Supply Contract is declared by a court of
competent jurisdiction to be invalid, illegal or unenforceable, (a) the
validity, legality and the enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, (b) such provision
shall be substituted by a valid and enforceable provision as similar as possible
to the provision at issue, which substituted provision shall be effective in the
jurisdiction in which the initial provision was declared to be invalid, illegal
or unenforceable, and (c) such invalid, illegal or unenforceable provision shall
remain in full force and effect in any jurisdiction in which it is not held to
be invalid, illegal or unenforceable.
IN WITNESS WHEREOF this Supply Contract has been signed by the duly
authorized representatives of each Party hereto.
/s/ /s/
- ------------------------------- -----------------------------
Western PCS Corporation Nokia Telecommunications Inc.
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<PAGE> 1
Exhibit 10.7
PURCHASE AND SALE AGREEMENT
NOKIA MOBILE PHONES, INC.
AND
WESTERN WIRELESS CORPORATION
<PAGE> 2
CONFIDENTIAL "DRAFT"
AGREEMENT
THIS AGREEMENT is hereby made on this _____ day of __________,199___,
by and between Nokia Mobile Phones, Inc. (hereinafter called "NOKIA"), having
its principal place of business at 6200 Courtney Campbell Causeway, Suite 900,
Tampa, Florida 33630-3730; and Western Wireless Corporation (hereinafter called
"CARRIER"), having its principal place of business at 330 120th Avenue NE,
Suite 200, Bellevue, Washington 98005.
1. PRODUCTS
1.1 NOKIA hereby agrees to sell, and CARRIER hereby agrees to
purchase, those certain Nokia 2190 model wireless communication terminals the
configuration of which is described in ATTACHMENT "1" attached hereto and made
a part hereof ("2190 Terminals").
1.2 NOKIA hereby agrees to sell and CARRIER agrees to purchase a
new DCS 1900 terminal to be developed by NOKIA, the basic configuration of
which is described in ATTACHMENT "2" attached hereto and made a part hereof
("New Terminals"). According to a mutually-agreed-upon project schedule, NOKIA
will from time to time notify CARRIER of the specifications applicable to the
New Terminals. NOKIA agrees that the New Terminals shall be available
beginning * .
1.3 NOKIA hereby agrees to sell, and CARRIER hereby agrees to
purchase, those certain dual mode (DCS 1900 and Amps) modules which are
described in ATTACHMENT "3" attached hereto and made a part hereof ("Dual Mode
Modules"). According to a mutually-agreed-upon project schedule, NOKIA will
from time to time notify CARRIER of the specifications applicable to the Dual
Mode Module. NOKIA agrees that the Dual Mode Module will be available
commercial quantities no later than *.
1.4 The 2190 Terminals, New Terminals, and Dual Mode Modules may
be collectively referred to herein as ("Products").
1.5 The parties contemplate that the Products shall be tested in
accord with the testing milestones set forth in Section 11.2. NOKIA shall not
be liable for delays in the shipment of Products to CARRIER which are
occasioned by failure or delays in the successful verification of the Products
as the network unless such failures or delays are caused in whole or in
substantial part by NOKIA.
2. PRICES
2.1 The price for the * units of the 2190 Terminals shall be *
per unit. The price for the next twenty thousand units of the 2190 Terminals
shall be * per unit.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request
for confidential treatment under Rule 406 under the Securities Act of 1933,
as amended.
<PAGE> 3
CONFIDENTIAL "DRAFT"
2.2 The price applicable to quantities of 2190 Terminals purchased
in excess of * units shall be as the parties mutually agree by an amendment to
be incorporated into this Agreement. The parties agree that said amendment
will include a provision binding CARRIER to purchase from NOKIA no less than *
of its requirements for terminals (both single mode and dual mode) on an
ongoing basis during the term hereof. In the absence of the parties execution
of such an amendment, the price shall be * per unit for units purchased (if
any) in excess of *.
2.3 *
2.4 NOKIA shall notify CARRIER of the price for the New Terminals
no later than * prior to commercial introduction of the New Terminals. In no
event shall the price applicable to the New Terminals exceed *.
2.5 *
2.6 NOKIA shall notify CARRIER of the price for the Dual Mode
Modules no later than * prior to commercial introduction of the Dual Mode
Modules. In no event shall the price exceed *.
2.7 *
2.8 NOKIA grants CARRIER's Affiliates the rights to purchase
Products under the terms of this Agreement. For the purposes of this
Agreement, the term "Affiliate" means any entity which CARRIER controls, or
which are controlled by CARRIER, or which are under common control with
CARRIER. The foregoing definition of Affiliate shall also specifically include
those entities with whom CARRIER has entered into an agreement to purchase all,
or substantially all, of the business of such entity and any entity in which
CARRIER *.
2.9 Any entity which is then an Affiliate of a CARRIER may order
Products from NOKIA for delivery to such Affiliate upon the terms and
conditions set forth in this Agreement with respect to orders by CARRIER,
except that any purchase order submitted to NOKIA by an Affiliate pursuant to
this Agreement shall incorporate this Agreement by reference and include a
statement that the Affiliate acknowledges and agrees to be bound by the terms
and conditions of this Agreement. Although NOKIA and the Affiliate executing
the purchase order shall be primarily liable for the obligations incurred under
such purchase order, the CARRIER shall also remain liable hereunder as a
primary obligor for all such purchases by its Affiliate; provided, however,
that the CARRIER shall be entitled to cure any breach by any of its Affiliates
under this Agreement in accordance with its terms. Purchases for the benefit
of Affiliate may also be accomplished by CARRIER directly rendering a purchase
order to NOKIA and then CARRIER making an inter-company transfer to the
Affiliate.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 4
CONFIDENTIAL "DRAFT"
3. QUANTITY.
3.1 During (i) * ; and (ii) *, CARRIER agrees to purchase * of the
2190 Terminals.
3.2 CARRIER agrees to purchase a minimum of * units of the New
Terminals during the period commencing with * and extending for * thereafter.
3.3 CARRIER agrees to purchase a minimum of * units of the Dual
Mode Module during the period commencing * and extending * thereafter.
Notwithstanding the foregoing, after CARRIER shall have purchased * units of
the Dual Mode Modules, CARRIER may fulfill the balance of its minimum quantity
commitment by purchasing either Dual Mode Modules or by purchasing additional
quantities of the New Terminals or any combination thereof. By way of example,
after CARRIER purchases * units of the Dual Mode Modules, CARRIER may purchase
* more units of the Dual Mode Modules and * New Terminals, or * New Terminals.
4. FORECAST AND PURCHASE ORDERS.
4.1 Each month during the term of this Agreement, CARRIER shall
provide NOKIA, a Forecast to assist NOKIA in maintaining an orderly production
flow for the purpose of meeting CARRIER's delivery requirements. "Forecast"
means a forecast of CARRIER's anticipated requirements of Products provided by
CARRIER to NOKIA on a monthly basis, for the subsequent * period. The Forecast
for the nearest * shall be fixed and CARRIER shall place orders in accord with
that Forecast. The Forecast for * are CARRIER's good faith estimates of its
requirements and may be varied up until the month it becomes fixed.
4.2 Notwithstanding the foregoing, firm orders for the first * of
shipments of Dual Mode Modules shall be placed by CARRIER at least * in advance
of the anticipated first month of shipments of the Dual Mode Modules.
4.3 All orders for Products must be accompanied by a purchase
order from CARRIER transmitted by facsimile or delivered to NOKIA. The
purchase order shall conform to the requirements set forth herein and be
consistent with the quantities, prices, payment terms, and lead times provided
herein. NOKIA shall have no right to reject any purchase order: (i) conforming
to the requirements of this Agreement; (ii) for a quantity of units less than
or equal to the fixed forecast for that month; and, (iii) requesting delivery
thirty (30) days or more in advance. NOKIA shall use reasonable efforts to
fulfill CARRIER's purchase orders which are for quantities of Products in
excess of the quantities indicated on CARRIER's fixed Forecasts.
4.4 *
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 5
CONFIDENTIAL "DRAFT"
5. SHIPMENT, LIQUIDATED DAMAGES.
5.1 All shipments will be F.O.B. NOKIA's distribution center in
the continental U.S.
5.2 If CARRIER requests that any of the Products be drop-shipped
to additional locations, such instructions and authorization must be submitted
to NOKIA in writing. The number of drop-ship locations specified by CARRIER
may not exceed * BTA plus five (5) additional locations chosen by CARRIER. Any
excess shipping and insurance costs related to drop-shipments shall be borne by
CARRIER.
5.3 Any discrepancies concerning the quantity of Products shipped
to CARRIER or drop-shipped for CARRIER must be reported to NOKIA within
fourteen (14) days of delivery.
5.4 NOKIA will be liable for liquidated damages to CARRIER in the
event of late shipment of Dual Mode Modules in the amount of * of the value of
the order per week [not to exceed a total of *]. Payment of the foregoing
liquidated damages by NOKIA to CARRIER shall be CARRIER's sole and exclusive
remedy for NOKIA's delay in supplying Dual Mode Modules.
5.5 Section 5.4 above shall not apply to NOKIA's complete failure
to develop and supply Dual Mode Modules in which event CARRIER may avail itself
of all its normal contract remedies under this Agreement subject to the
limitation set forth in Section 1.1 below.
6. PAYMENT.
6.1 The terms of payment shall be *. NOKIA shall invoice CARRIER
for the Products at the time of shipment and transmit the invoice by facsimile
transmission to CARRIER's designated facsimile number along with one (1)
confirmation copy mailed to CARRIER via U.S. mail.
6.2 CARRIER shall be responsible for all taxes, fees or other
charges imposed by any governmental entity arising with respect to the sales of
Products and accessories to CARRIER. All amounts due NOKIA hereunder shall be
net of any such charges, except any taxes that may be based on NOKIA's net
income.
7. *
7.1 *
8. *
8.1 *
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 6
CONFIDENTIAL "DRAFT"
8.2 *
8.3 *
8.3.1 *
8.3.2 *
8.3.3 *
8.3.4 *
8.4 *
8.4.1 *
8.4.2 Upon verification of the contents of the report,
NOKIA will issue an Open Credit Memo to CARRIER for the approved dollar amount.
Such Open Credit Memo shall be issued not later than thirty (30) days after
NOKIA's receipt of the report.
9. TERRITORY AND TRANSSHIPMENT.
9.1 CARRIER shall be appointed as a non-exclusive distributor of
the Products in those certain MSAs, RSAs, BTAs and MTAs in which CARRIER is a
system owner or operator. The foregoing area shall be referred to as the
"Territory". The Territory shall also include any MSAs, RSAs, BTAs and MTAs in
which: (i) CARRIER has entered into an agreement to purchase all, or a
substantial part, of the business of a system operator; and (ii) any MSAs,
RSAs, BTAs or MTAs *.
9.2 During the term of this Agreement, CARRIER shall not
transship, sell, or otherwise transfer the Products outside the Territory.
Further, CARRIER shall not knowingly sell, or continue to sell, the Products to
any other person or entity who intends to distribute the Products outside the
Territory.
9.3 If during the term of this Agreement CARRIER acquires the
system operator's license for any MSAs, RSAs, BTAs or MTAs which were not part
of CARRIER's wireless footprint at the time of execution of this Agreement;
and, if the entity from whom CARRIER acquired such system operator's license
was a contracted customer of NOKIA, then CARRIER's purchase of Products from
NOKIA for those new MSAs, RSAs, BTAs or MTAs shall not *.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 7
CONFIDENTIAL "DRAFT"
10. WARRANTY, RETURNS, SERVICE.
10.1 NOKIA warrants the Products according to the applicable
limited warranty documents that accompanies the Products as set forth in
ATTACHMENT "5" attached hereto and incorporated herein.
10.2 NOKIA agrees to make available to CARRIER its FAST service
program in accord with the terms and conditions of such program as set forth in
ATTACHMENT "6" attached hereto and made a part hereof which terms and
conditions are subject to reasonable changes from time to time upon notice from
NOKIA to CARRIER.
10.3 Other returns (outside the FAST program and warranty repairs)
shall be subject to NOKIA's standard repair and return policies in effect from
time to time.
10.4 CARRIER shall comply with NOKIA's reasonable procedures
related to the tracking of in-bound returned Products and accessories.
10.5 NOKIA additionally warrants the Products against "Latent
Defects". Any Latent Defects which cause material degradation of the
functionality of the Products will be corrected at NOKIA's sole cost and
expense according to reasonable procedures adopted by NOKIA. Latent Defects
which do not materially degrade the functionality of the Products will be
corrected with "on-the-run" changes. For the purposes of this Section, "Latent
Defects" are defined as the systematic and continual failures of any of the
Products (taken as a whole) to meet one of the material functionality
requirements set forth in the applicable specifications, provided that the
ability to test such element of functionality was resident on the
infrastructure system prior to the conclusion of network verification. For the
purposes of this Section, "on-the-run" changes shall mean correction of
problems in subsequent shipments of the Products without recalling, or
otherwise altering, the Products previously shipped.
10.6 NOKIA agrees to offer for sale to CARRIER functionally
equivalent replacement and repair parts until the later of: (i) five (5) years
after the last delivery of Products and/or accessories hereunder; or (ii) the
period of time required by applicable law.
11. LIMITATION OF LIABILITY.
11.1 WHETHER OR NOT CAUSED BY NEGLIGENCE, NEITHER PARTY SHALL BE
LIABLE FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES, HOW EVER
CAUSED.
12. FORCE MAJEURE.
12.1 Neither party shall be liable or deemed to be in default for
any delay or failure in performance under this Agreement or interruption of
service resulting directly or indirectly from acts of God, civil or military
authority, acts of public enemy, war, accidents, fires, explosions,
earthquakes, floods, the elements, epidemics, strikes, labor disputes,
shortages of fuel, power, or
-6-
<PAGE> 8
CONFIDENTIAL "DRAFT"
any cause beyond the reasonable control of such party. In the above instances
time for performance shall be extended for the period of the delay caused;
provided however, that either party may cancel in writing the undelivered
portion of the order if the delay exceeds sixty (60) days from the required
shipment date.
13. TERM AND TERMINATION.
13.1 Unless sooner terminated in accordance with the provisions of
this Agreement, the initial term of this Agreement shall commence *.
13.2 Either party shall have the right to terminate this Agreement
if the other party rejects or fails to perform or observe any of its
obligations hereunder, and such condition is not remedied within thirty (30)
days after written notice is given to the defaulting party.
13.3 Either party shall have the right to terminate this Agreement,
if the other party assigns this Agreement or any of its rights hereunder,
except for assignments specifically allowed under Section 20.6 herein.
13.4 Termination of this Agreement, howsoever caused, shall not
terminate CARRIER's liability to pay for any Products and/or accessories
previously shipped to CARRIER.
13.5 The parties agree that if the context of any provision
indicates an intent that it shall survive the term of this Agreement, then it
shall survive.
13.6 CARRIER may elect to terminate this Agreement in the event
CARRIER's PCS-A-BLOCK licenses are revoked by the FCC or in the event the FCC
publishes notice of its intent to re-auction CARRIER's PCS-A-Block licenses,
provided CARRIER gives NOKIA written notice of such election within sixty (60)
days of the date of such revocation or within sixty (60) days of the date the
FCC publishes notices of re-auction.
14. INDEMNITY FOR PRODUCT LIABILITY, COMPLIANCE WITH LAWS.
14.1 NOKIA agrees to defend and indemnify CARRIER, its Affiliates,
customers, officers, agents, employees, assigns and successors from and against
any losses, damages, claims, demands, suits, liabilities and expenses
(including reasonable attorney's fees) that arise out of or result from *
provided that: (i) CARRIER notifies NOKIA in writing within thirty (30) days
of the claim; (ii) NOKIA has sole control of the defense and all related
settlement negotiations; and, (iii) CARRIER provides NOKIA with the assistance,
information and authority necessary for NOKIA to perform its obligations under
this Section 14.1; provided always that CARRIER will not admit liability under
any circumstances. Reasonable out-of-pocket expenses incurred by CARRIER in
providing such assistance will be reimbursed by NOKIA.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 9
CONFIDENTIAL "DRAFT"
14.2 NOKIA agrees that at the time NOKIA ships any Products to
CARRIER hereunder, the Products so shipped shall comply with all applicable
laws and governmental regulations. NOKIA agrees to defend and indemnify
CARRIER, its Affiliates, customers, officers, agent, employees, assigns and
successors from and against any losses, damages, claims, demands, suits,
liabilities and expenses (including reasonable attorney's fees) that arise out
of, or result from, NOKIA's failure to comply with the foregoing sentence
provided that: (i) CARRIER notifies NOKIA in writing within thirty (30) days
of the claim; (ii) NOKIA has sole control of the defense and all related
settlement negotiations; and, (iii) CARRIER provides NOKIA with the assistance,
information and authority necessary for NOKIA to perform its obligations under
this Section 14.2; provided always that CARRIER will not admit liability under
any circumstances. Reasonable out-of-pocket expenses incurred by CARRIER in
providing such assistance will be reimbursed by NOKIA. Further, if at anytime
the Products do not conform with applicable laws or governmental regulations,
CARRIER may cancel its orders of the affected Products with any such canceled
orders reducing in a corresponding fashion CARRIER's minimum purchase
obligations for those Products. If NOKIA does not bring the affected Products
into legal compliance within one hundred twenty (120) days, CARRIER may
terminate any further obligations to purchase the affected Products from NOKIA.
15. INDEMNITY FOR INFRINGEMENT, INJUNCTION.
15.1 NOKIA agrees to defend and indemnify CARRIER against any claim
that the Products and/or accessories sold by NOKIA hereunder infringe the
intellectual property rights of third parties provided that: (i) Products
and/or accessories are not modified by CARRIER or by any other party at the
direction of CARRIER; (ii) CARRIER notifies NOKIA in writing within thirty (30)
days of the claim; (iii) NOKIA has sole control of the defense and all related
settlement and licensing negotiations; and, (iv) CARRIER provides NOKIA with
the assistance, information and authority necessary to perform NOKIA's
obligations under this Section 15.1; provided always that CARRIER shall not
admit liability under any circumstances. Reasonable out-of-pocket expenses
incurred by CARRIER in providing such assistance will be reimbursed by NOKIA.
15.2 If the use or sale of any Products and/or accessories
furnished hereunder is enjoined as a result of any suit, NOKIA at its option
and at no expense to CARRIER shall: (i) obtain for CARRIER the right to use,
sell or re-sell said items or shall (ii) substitute an equivalent product
acceptable to CARRIER and extend this indemnity thereto, or if (i) or (ii)
cannot be reasonably attained, NOKIA shall accept the return of the Products
and/or accessories and reimburse CARRIER the purchase price thereof. Under no
circumstances shall CARRIER be required to continue to purchase any Products
hereunder the sale or use of which has been enjoined.
-8-
<PAGE> 10
CONFIDENTIAL "DRAFT"
16. GOVERNING LAW, ATTORNEY'S FEES.
16.1 This Agreement shall be governed by, and construed and
enforced in accordance with the laws of the state of * .
16.2 In the event either party shall at any time institute any
legal action or proceedings of any nature for the enforcement of this
Agreement, or any of the terms and provisions hereof, the prevailing party in
such action or proceeding shall be entitled to recover all costs, including
attorney's fees incurred in connection therewith, or in connection with
appellate proceedings if said party shall prevail upon appeal.
17. CONFIDENTIALITY.
17.1 Each party shall keep confidential and shall not without the
prior consent in writing of the disclosing party, copy or disclose to any third
party the content of any documents or information, which is identified as being
confidential and which is acquired from the other party in connection with this
Agreement or the Products. Each party shall copy and use the same solely for
the purpose of this Agreement and the normal use of the Products.
17.2 The obligations imposed upon either party under Section 17.1
above shall not apply to information whether or not designated as
"Confidential": (i) which is made public by the disclosing party; (ii) which
the receiving party can reasonably demonstrate is already in the possession of
the receiving party and not subject to an existing agreement of confidence;
(iii) which is received from a third party without restriction and without
breach of this Agreement; (iv) which is independently developed by the
receiving party as evidenced by its records; (v) which the receiving party is
required to disclose pursuant to a valid order of a court or other governmental
body or any political subdivision thereof; provided, however, that the
recipient of the information shall first have given notice to the disclosing
party and made a reasonable effort to obtain a protective order requiring that
the information and/or documents so disclosed be used only for the purposes for
which the order was issued.
17.3 The parties agree that this Agreement (including all
ATTACHMENTS attached hereto) is confidential and shall not be disclosed to any
third, party.
17.4 The obligations in this Section shall survive termination of
this Agreement for two (2) years.
17.5 *
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 11
CONFIDENTIAL "DRAFT"
18. PUBLICITY.
18.1 CARRIER and NOKIA agree to submit to each other for approval
all publicity matters whenever the other's name is used in connection with
matters pertaining to the relationship. established by this Agreement.*
19. TRADEMARKS.
19.1 It is expressly agreed and understood that trademarks, trade
names, insignia, etc. (herein "Marks") involving the words "Nokia" or
"VoiceStream" are and shall remain the exclusive property of NOKIA or CARRIER
(as applicable) and that the other party has and shall have no right to such
trademarks and trade names. All use of Marks involving the words "Nokia" or
"VoiceStream" (as applicable) in the promotion and sale of goods in the
Territory shall be deemed to be inure only for the benefit of the owner of such
Marks. Neither party without the express written consent of the other shall
have the right to use any Marks in the sale, lease or advertising of any
products or on any product container, component part, sales, advertising or
promotional materials. Any approved use of the Marks shall be in accord with
such party's policies governing the size, typeface and other usage
requirements.
19.2 The parties agree that all Products to be sold hereunder shall
be co-branded with the "Nokia" and "VoiceStream" brands. The location of the
brands on the Products, and their approximate size shall be as indicated in
ATTACHMENT "7" attached hereto and incorporated herein. The costs of such
branding shall be the responsibility of NOKIA. If CARRIER requests NOKIA to
change CARRIER's designated brand, such change shall be subject to NOKIA's
approval which shall not be unreasonably withheld or delayed. NOKIA shall not
be required to ship any Products bearing the new brand sooner than ninety (90)
days after NOKIA first received CARRIER's written request for the change. If
as a result of CARRIER's brand change, NOKIA has excess quantities of Products
bearing CARRIER's prior brand, CARRIER shall reimburse NOKIA the reasonable
costs and expense of removing and discarding (or sending to CARRIER at
CARRIER's discretion) the old faceplate and affixing a new faceplate bearing
CARRIER's new brand. CARRIER shall indemnify and save NOKIA harmless from any
liability, judgments, decrees, costs and expenses, including reasonable
attorney fees incurred by NOKIA resulting from suits or claims by any party
against NOKIA related to the affixing of CARRIER's designated brands, logos or
trademarks on the Products.
19.3 Products not purchased by CARRIER under this Agreement which
contain CARRIER's trademarks or trade names shall have all such trademarks or
trade names removed prior to any sale, use or disposition thereof. NOKIA
agrees to indemnify and hold CARRIER harmless from any actual damage and
expense arising out of NOKIA's failure to do so. This provision shall apply
equally with respect to all other registered trademarks and trade names of
CARRIER.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
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<PAGE> 12
CONFIDENTIAL "DRAFT"
20. GENERAL.
20.1 This Agreement expresses the entire understanding and
agreement of the parties with reference to the sale of NOKIA Products and other
items to CARRIER, and is a complete and exclusive statement of the terms of
this Agreement, and no representations, amendments, or agreements modifying or
supplementing the terms of this Agreement, shall be valid unless in writing,
signed by persons authorized to sign agreements on behalf of both parties.
20.2 During the term of this Agreement, CARRIER's purchase of
Products, or any accessories for the Products, from NOKIA, shall be deemed to
be purchased under the terms and conditions of this Agreement. The terms and
conditions of CARRIER's purchase orders, NOKIA's acknowledgments or any other
writings by either party which differ from the terms and conditions hereunder
shall not be effective unless specifically accepted in writing by amendment to
this Agreement made separate and apart from said terms and conditions. All
orders are subject to acceptance at NOKIA's home office in Tampa, Florida. No
person shall have the authority to accept any order on behalf of NOKIA outside
of NOKIA's Tampa, Florida office.
20.3 No waiver by NOKIA or CARRIER of any of the terms, conditions,
covenants or agreements of this Agreement shall be binding unless in writing
and signed by the party to be charged, and no such waiver shall be deemed or
taken as a waiver at any time thereafter of the same or any other term,
condition, covenant or agreement herein contained, nor of the strict and prompt
performance thereof. A waiver by course of performance to any of the terms and
provisions hereunder on one occasion shall not be construed as a waiver for any
other occasion.
20.4 If any provision in this Agreement shall be found or held to
be invalid or unenforceable in any jurisdiction in which this Agreement is
being performed, then the meaning of said provision shall be construed, to the
extent feasible, so as to render the provision enforceable, and if no feasible
interpretation would save such provision, it shall be severed from the
remainder of this Agreement which shall remain in full force and effect. In
such event, the parties shall negotiate, in good faith, a substitute, valid and
enforceable provision which most nearly effects the parties' intent in entering
into this Agreement.
20.5 Notwithstanding the price terms herein, CARRIER may elect to
join into a joint buying group with other carriers. If NOKIA shall enter into
an agreement with such buying group and provided CARRIER's membership therein
is disclosed in advance of the execution thereof, then the prices and quantity
commitments negotiated by any such buying group shall supersede the prices
stated in this Agreement, provided, however, that the timing and quantity
commitments set forth herein shall remain intact.
20.6 CARRIER may assign this Agreement to any entity which is its
successor in interest or any entity which acquires substantially all of the
assets of CARRIER. CARRIER may also make one (1) or more partial assignments
of this Agreement to any entity which purchases from CARRIER the system
operator's license in any of CARRIER's MSAs, RSAs, BTAs or MTAs, provided such
partial assignee agrees to be bound by the terms hereof exclusive of the
minimum purchase obligations and any other terms which by their very nature
would apply only to
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<PAGE> 13
CONFIDENTIAL "DRAFT"
CARRIER and not to the partial assignee. In which case: (i) CARRIER shall
remain liable for the assignee's performance of its obligations under this
Agreement; and (ii) the assignee's purchase of Products relative to the MSAs,
RSAs, BTAs or MTAs so purchased from CARRIER shall count towards CARRIER's
minimum purchase obligations hereunder. NOKIA may assign this Agreement to any
wholly- owned subsidiary of Nokia Corporation. Other than the assignments
permitted in this Section 20.6, neither party shall assign this Agreement
without the written consent of the other party, which consent may be withheld
for any reason.
20.7 The status of CARRIER shall be that of independent contractor
only, not under any circumstances is this Agreement intended to be a
partnership or joint venture.
20.8 The parties mutually agree that the headings and captions
contained in this Agreement are inserted for convenience or reference only, and
are not to be deemed part of, or to be used in construing, this Agreement.
IN WITNESS WHEREOF, this Agreement was entered into as of the day and
year first written above.
ATTACHMENTS 2190 TERMINALS (ATTACHMENT 1)
NEW TERMINALS (ATTACHMENT 2)
DUAL MODE MODULES (ATTACHMENT 3)
TESTING MILESTONES (ATTACHMENT 4)
LIMITED WARRANTY (ATTACHMENT 5)
FAST SERVICE PROGRAM (ATTACHMENT 6)
BRANDING (ATTACHMENT 7)
ACCEPTED: ACCEPTED:
WESTERN WIRELESS CORPORATION NOKIA MOBILE PHONES, INC.
By /s/ By /s/
----------------------------------- ------------------------------------
Title C.O.O. Title Director
-------------------------------- ---------------------------------
Date 11/8/95 Date 11/10/95
--------------------------------- ----------------------------------
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<PAGE> 1
EXHIBIT 10.21
AGREEMENT FOR PURCHASE AND SALE OF
AUTOPLEX CELLULAR EQUIPMENT,
SOFTWARE AND SERVICES
This is an Agreement by and among American Telephone and Telegraph
Company, a New York corporation having an office at Guilford Center, P.O. Box
28000, Greensboro, North Carolina 27420 ("Seller"), Markets Cellular Limited
Partnership, a Delaware limited partnership ("MCLP"), and MCII General
Partnership ("MCII"; MCLP and MCII each individually a "Buyer" and collectively
"Buyers"), a Delaware general partnership, doing business as Pacific Northwest
Cellular, both Buyers having offices at 11400 Southeast Eighth Street, Suite
445, Bellevue, Washington 98004, for and on behalf of themselves and the Buyer
Companies as defined in Attachment A hereto.
WHEREAS, Buyers and the Buyer Companies have been or may hereafter be
formed for providing cellular telecommunications services and holding the
franchises from the Federal Communications Commission to provide such service
in various cellular markets;
WHEREAS, Buyers have been formed for the purpose of purchasing, owning
and operating cellular systems directly and through the Buyer Companies, and in
connection therewith purchasing cellular equipment and associated software
licenses and services for resale to, or as an agent for, the Buyer Companies;
NOW, THEREFORE, the parties agree as follows:
1. 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 clause. For the purpose of this Agreement, the following definitions
will apply:
(a) "Acceptance Date" means the date on which a Product, Licensed
Material or Service is accepted or, as provided in this
Agreement, is deemed to have been accepted by Customer;
(b) "Acceptance Test" means the test which may be performed under
the terms of this Agreement during the Acceptance Test Period
to determine whether a Product, Licensed Material or Service
substantially conforms to all applicable specifications;
(c) "Acceptance Test Period" means the period of time in days
agreed to by the parties and specified in the applicable order
or, if not so specified, the period specified in this
Agreement, allowed for Customer to perform an Acceptance Test;
(d) "Advertising" means all advertising, sales promotion, press
releases, and other publicity matters relating to performance
under this Agreement;
<PAGE> 2
(e) "Affiliate" of a corporation means its Subsidiaries, any
company of which it is a Subsidiary, and other Subsidiaries of
such company;
(f) "Cell Site" means a system of radio transceivers and radio
control, antenna and other miscellaneous equipment used to
send to and receive from mobile telephones and other wireless
terminals the radio signals necessary to the provision of
wireless telecommunications service. Cell Sites are
interconnected with MTSO equipment through transmission
facilities which normally are obtained from local telephone
companies, and, in any case, unless expressly provided herein,
are not offered under this Agreement;
(g) "Customer Price List" means Seller's published "NETWORK
WIRELESS SYSTEMS Price Reference Guide" or other price
notification releases furnished by Seller generally to its
customers for the purpose of communicating Seller's prices or
pricing related information to customers; however, this does
not include firm price quotations;
(h) "Designated Processor" means the Product for which the
licenses to use Licensed Materials are initially granted;
(i) "DCS" means Seller's Autoplex digital cellular switch;
(j) "Firmware" means a combination of (i) hardware and (ii)
Software represented by a pattern of bits contained in such
hardware;
(k) "Form" means physical shape;
(1) "Fit" means physical size or mounting arrangement (e.g.,
electrical or mechanical connections);
(m) "Franchise Area" means an area for which the Federal
Communications Commission has granted a permit to construct or
license to operate a cellular mobile telecommunications
system;
(n) "Function" means product features;
(o) "Force Majeure" means fires, riots, embargoes, explosions,
earthquakes, floods, wars, the elements, strikes or other
serious labor disputes, government requirements, acts of civil
or military authorities, acts of God or by the public enemy,
inability to secure raw materials as a result of industry wide
shortages, or other causes beyond a party's control whether or
not similar to the foregoing;
(p) "Hazardous Materials" means material designated as a
"hazardous chemical substance or mixture" by the
Administrator, pursuant to Section 6 of the Toxic Substance
Control Act, a "hazardous material" as defined in the
Hazardous
-2-
<PAGE> 3
Materials Transportation Act (49 U.S.C. 1801, et seq.), or a
"hazardous substance" as defined in the Occupational Safety
and Health Act Hazard Communication Standard (29 CFR
1910.1200);
(q) "In Revenue Service" means use of a Product or Software or any
part thereof for commercial service, whether or not revenue is
actually being generated;
(r) "Information" means all documentation and technical and
business information in whatever form recorded, which a party
may furnish under, or has furnished in contemplation of, this
Agreement;
(s) "Initial Operations Date" means, as to a system, the agreed
upon date by which Seller shall complete its delivery and
installation of such system;
(t) "Initial Systems" means the multiple cellular mobile telephone
systems consisting of an MTSO (together with remote switching
capability) and cell sites described in Attachment B;
(u) "Installation Complete Date" means the date on which Seller
has completed installation of a Product or Software and has,
if required under this Agreement, provided written notice
thereof to Customer;
(v) "Licensed Materials" means the Software and Related
Documentation for which licenses are granted by Seller under
this Agreement; no Source Code versions of Software are
included in Licensed Materials;
(w) "MCLP" means Markets Cellular Limited Partnership, a Delaware
limited partnership, which is the general partner of MCII;
(x) "MTSO" means a central mobile telephone switching office;
(y) "PNCI" means PN Cellular, Inc., a Washington corporation,
which is the general partner of PNCLP;
(z) "PNCLP" means PN Cellular Limited Partnership, a Delaware
limited partnership, which is the general partner of MCLP;
(aa) "Product" means systems, equipment, and parts thereof, other
than Turnkey Items, but the term does not mean Software
whether or not such Software is part of Firmware;
(ab) "Product Manufacturing Information" means manufacturing
drawings and specifications of raw materials and components,
including part manufacturing drawings and specifications
covering special tooling and the operation thereof, and a
detailed list of all commercially available parts and
components purchased by
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<PAGE> 4
Seller on the open market disclosing the part number, name and
location of the supplier, and price lists;
(ac) "Quality Management Tools" means Seller-furnished Software not
necessary for operation of Products furnished under this
Agreement but useful in the management of a wireless
telecommunications system. Unless otherwise specifically
agreed by the parties, Seller does not furnish under this
Agreement such Software or the computer processor necessary
for Use of the Software;
(ad) "Related Documentation" means materials useful in connection
with Software, such as, but not limited to, flow charts, logic
diagrams, program descriptions, and specifications. No Source
Code versions of Software are included in Related
Documentation;
(ae) "Related Operator" means an entity (other than Customer)
offering wireless telecommunications services to the public
and which, for purposes of furnishing such services, has an
agreement with Customer pursuant to which Customer resells or
shares with such operator capacity on a Network Wireless
System, as for example, when the Related Operator's Cell Site
or DCS equipment is interconnected with Customer's MTSO
Products; or when Customer's Cell Site equipment is
interconnected with a Related Operator's MTSO Products;
(af) "Repair Parts" means new, remanufactured, reconditioned,
refurbished, or functionally equivalent parts for the
maintenance, replacement, and repair of Products sold pursuant
to this Agreement;
(ag) "Seller's Manufactured Product" means a Product manufactured
by Seller or purchased by it pursuant to its procurement
specifications (e.g., KS or AT), including all components of
such Products, which components are purchased by Seller and
become an integral part of such Products;
(ah) "Services" means the performance of work for the Customer and
includes but is not limited to: (1) engineering Services such
as preparation of equipment specifications, preparation and
updating of office records, and preparation of a summary of
material not specifically itemized in the order, (2)
installation Services such as installation, equipment removal,
and cable mining; and (3) other Services such as maintenance
and repair. Services do not include Turnkey Services;
(ai) "Software" means a computer program consisting of a set of
logical instructions and tables of information which guide the
functioning of a processor, such program may be contained in
any medium whatsoever, including hardware containing a pattern
of bits representing such program, but the term "Software"
does not mean or include such medium;
-4-
<PAGE> 5
(aj) "Software Update" means a reissued version or partial update
of an existing Software generic release (e.g., Release 3.1
following Release 3.0), containing one or more of the
following, in any combination, (l) infrastructure changes,
(ii) improvements in basic call processing capabilities, as
well as basic system operation and maintenance, and (iii)
changes to maintain compatibility between a new system release
and features existing in a prior system release (when
initially introduced, a new system release may not always be
fully compatible with features available immediately prior to
such release), (iv) a platform for optional Software features,
and (v) consolidations of periodic fixes and overwrites;
(ak) "Source Code" means any version of Software incorporating
high-level or assembly language that generally is not directly
executable by a processor. Except as may be expressly
provided, this Agreement does not require Seller to furnish
any Source Code;
(al) "Specifications" means the specifications and performance
standards of the System as set forth in the current Autoplex
System 1000 Technical Specifications;
(am) "Standard Charges" means Seller's applicable rates and charges
for labor and/or materials as determined from Seller's
Customer Price List or other pricing information provided to
Customer, less any discounts applicable thereto;
(an) "Start Date" means, as to a system installation project, the
date upon which Seller has received Customer's written notice
that Customer has performed all Customer responsibilities and
furnished all necessary items required prior to Seller's
commencement of installation of the system;
(ao) "Subsidiary" of a company means a corporation the majority of
whose shares or other securities entitled to vote for election
of directors is now or hereafter owned or controlled by such
company either directly or indirectly; but any such
corporation shall be deemed to be a Subsidiary of such company
only as long as such ownership or control exists;
(ap) "Territory" means the 50 states of the United States plus the
District of Columbia;
(aq) "Turnkey Item" means a good or product or a partial assembly
of goods or products furnished and, perhaps, installed by
Seller as part of a Turnkey Service but not furnished by
Seller pursuant to this Agreement. A Turnkey Item is not a
Vendor Item or a Product as described in this Agreement;
(ar) "Turnkey Services" means items and activities normally the
responsibility of the Customer under this Agreement, which may
include, but shall not be limited to, project management,
field coordination, construction and system testing. Turnkey
Services do not include, and are separate from, Seller's
normal engineering and installation Services;
-5-
<PAGE> 6
(as) "Use" with respect to Licensed Materials means loading the
Licensed Materials, or any portion thereof, into a processor
for execution of the instructions and tables contained in such
Licensed Materials;
(at) "Vendor Item" means a Product or partial assembly of Products
furnished by Seller but neither manufactured by Seller nor
purchased by Seller pursuant to its procurement
specifications. A Vendor Item is not a Turnkey Item; and
(av) "Warranty Period" means the period of time listed in the
respective WARRANTY clauses which, unless otherwise stated,
for Products and Licensed Materials, commences on the date of
shipment, or if installed by Seller on Acceptance by Customer
or thirty (30) days from the date Seller submits its notice of
completion of its installation whichever-is-sooner, and for
Services, commences on the date the Service is completed.
2. TERM OF AGREEMENT:
This Agreement shall be effective, on the date of execution by the
last of the parties to execute this document, retroactively to October 1, 1992,
and except as otherwise provided herein, shall continue in effect for receipt
of orders through December 31, 1997. The modification or termination of this
Agreement shall not affect the rights or obligations of either party under any
order accepted by Seller before the effective date of the modification or
termination.
3. SCOPE:
During the term of this Agreement, Seller agrees to sell (or license)
to Buyers for the use and benefit of either Buyer and/or Buyer Companies,
Products (with associated Software licenses) and associated Services, as and to
the extent ordered by Buyers and accepted by Seller hereunder. Accordingly,
with respect to orders received from the effective date of this Agreement, the
Agreement for Purchase and Sale of AUTOPLEX (R) Cellular Equipment, Software
and Services between PNC-ID, Inc. (the "PNC-ID Agreement"), and Seller shall
be deemed terminated, except as to provisions which by their nature are
intended to survive termination, including but not limited to, provisions
relating to warranty of items purchased and confidential information received
under such agreement.
The terms and conditions of this Agreement shall apply to all such
orders for Products and Licensed Materials and Services listed in Seller's
published "NETWORK WIRELESS SYSTEMS Price Reference Guide" and for related
Services placed by Buyers, except for Quality Management Tools. Unless
otherwise specifically agreed in writing by Seller, Seller's provision of such
Quality Management Tools or any other item, product or service not listed in
such guide, including Turnkey Service, is not subject to the terms and
conditions of this Agreement, but to separate written agreement of the parties
or, if none, to Seller's standard terms and conditions for such item, product
or service. Seller agrees that Seller will maintain and from time to time
furnish to Buyers a copy of such guide, which shall contain all of Seller's
currently available commercial
-6-
<PAGE> 7
offerings of Seller's cellular and cellular-like telecommunications systems and
related services, including Products, Licensed Materials and Services, and
including Seller's offerings, if any, of personal communications network
systems.
The Buyer Company which is the end user of the Equipment, Software or
Services furnished hereunder shall be considered the "Customer" for all
purposes under this Agreement except placing the order and payment. Buyers
shall be considered the "Customer" for purposes of placing the order and
payment. (Either Buyer alone may place such an order, but the parties
expressly herein agree that any order so placed shall be deemed the joint and
several obligation of both Buyers.) In addition, Buyers shall be considered
the "Customer" for purposes of passage of title and risk of loss with regard to
Products and Licensed Materials which are delivered to Buyers. Seller agrees
to look first to Buyers for all payments which become due hereunder for
purchase prices, interest on late payment and cancellation charges, but PNCLP
and PNCI, as general partners of MCLP and PNCLP, respectively, and the Buyer
Company, if any, having received the Products, Licensed Materials and/or
Services to which particular payments relate, shall be jointly and severally
liable therefor. The entity which is the end user of the Products, Licensed
Materials or Services furnished hereunder shall have and may enforce against
Seller all of the rights, benefits and obligations contained herein (including,
without limitation, warranty claims), and all rights, claims (except claims for
payment) or defenses Seller has or may acquire against such entity shall be
asserted solely against such entity which has received such Products, Licensed
Materials or Services; provided, however, that in the event of a disputed claim
for payment hereunder, Buyers will (i) do whatever is reasonably necessary to
help resolve such a claim and (ii) make the disputed payments to Seller
(including any interest on late payments with respect thereto) if and when such
claim is ultimately resolved in favor of Seller. Buyers shall have the right
to enforce or assert on behalf of themselves or the Buyer Company for whose
benefit the order was placed any right, claim or defense available to it or to
such Buyer Company hereunder, in its sole discretion.
Products and Licensed Materials furnished to Customers under this
Agreement are furnished for use in connection with a Customer's wireless
telecommunications business in the Franchise Areas in which the Buyer Companies
are authorized to provide wireless telecommunications services to the public.
In addition, Products and Licensed Materials may be purchased under this
Agreement for use in providing a Related Operator's wireless telecommunications
services to the public, whether or not such services will be provided in one of
such Franchise Areas licensed to a Buyer Company, provided that such purchased
items will be interconnected with a Seller-furnished system in one of such
Franchise Areas licensed to a Buyer Company. Unless otherwise agreed by Seller
in writing, the Buyers shall be deemed the Customer under this Agreement with
respect to all such purchases for the benefit of a Related Operator, and as
such shall have all rights and obligations of Customer, including the
obligation to pay for all such purchased items.
Except as expressly authorized herein for resale to Buyer Companies,
items furnished under this Agreement are not furnished for resale. However,
Customer may resell Equipment after internal use and make incidental sales of
surplus unused Products. Licensed Materials, whether or not integral to the
operation of or embodied in Equipment, may be transferred if and
-7-
<PAGE> 8
only to the extent expressly provided in the Software-specific provisions of
this Agreement. Nothing in this Paragraph shall be deemed to bar arrangements
between Customers and Related Operators in which capacity on the systems of
either or both are shared, so long as such arrangements do not involve
prohibited resale, sublicenses or other transfers of the Products and/or
licenses of Licensed Materials.
4. PURCHASE COMMITMENTS.
Seller agrees to engineer, furnish and install and Customers shall
purchase the Initial Systems. In addition, on or before December 31, 1997,
Customers shall purchase an additional fifty (50) Cell Sites, for a total of
eighty (80) Cell Sites, in each case for use in one of the Franchise Areas for
the Initial System or in one of the Franchise areas known as Colorado 7,
Colorado 8, Colorado 9 or Idaho 2 (collectively, the "Commitment Franchise
Areas"). Failure of Customers to meet either or both of these obligations
shall constitute a material default of this Agreement.
Such purchases shall be in accordance with the terms and conditions
contained in this Agreement. The Initial Systems will consist generally of the
Products set forth in Attachment B to this Agreement (together with associated
Licensed Materials and engineering and installation Services). Customers
acknowledge that the Initial Systems have been configured to handle sixty-nine
(69) Cell Sites and that additional equipment may be necessary in the event of
increased end user subscriptions and/or traffic loads. The Initial Systems may
be modified prior to acceptance by Customer by written agreement of Customer
and Seller.
5. ADDITIONAL PURCHASES:
During the term of this Agreement all orders received from the Buyers
for additional Products, Licensed Materials and Services for the Buyers and/or
Buyer Companies to expand the coverage of or add features to the Initial
Systems or to provide new systems shall be received and accepted subject to the
terms and conditions hereof.
6. SELLER'S INCENTIVES:
In consideration of the other parties' execution of this Agreement,
Seller shall provide the additional benefits set forth in this Paragraph 6.
However, Seller's obligations under this clause are contingent upon Customers'
continuing to meet their commitments as set out in the Paragraph entitled
PURCHASE COMMITMENTS. In the event that Customers fail to meet any of such
commitments, Seller may withdraw any or all of such additional benefits
remaining unused immediately upon notice to Buyers. Seller shall be entitled
to true up with respect to any of such benefits received prior to the date of
such withdrawal as expressly provided in this clause.
(a) Discounts
With respect to purchases of Products under this Agreement,
commencing with Products ordered after Effective Date, but before
January 1, 1998, and scheduled for
-8-
<PAGE> 9
shipment on or before the end of March 1998, Customers shall be
entitled to the following discounts off of the list price in Seller's
Customer Price List:
<TABLE>
<CAPTION>
Item Percent Discount
---- ----------------
<S> <C>
MTSO Equipment *
Inside Call Site Equipment *
</TABLE>
* For purposes hereof, "Inside Cell Site Equipment" means the control
equipment, radio equipment and filter equipment offered by Seller
under this Agreement for use in a Cell Site.
For clarification, these discounts do not apply to fees or other
charges for Software or any other Licensed Materials. Further, these discounts
shall not be applicable to prices, fees or other charges for purchases of used
or refurbished equipment, which shall normally be the subject of special
quotation.
(b) Volume Credits:
With respect to cumulative purchases of Small Configuration
Cell Sites (as defined in subclause (c) immediately following) and/or
larger Cell Sites, Seller shall rebate to Customers the amount set
forth below; provided that such Cell Sites are purchased for use and
in fact are used or held for use in the Commitment Franchise Areas.
Rebates shall be in the form of credits available against subsequent
purchases of Cell Sites under this Agreement for the Commitment
Franchise Areas, which such credits shall be subject to the sole
administration of Buyers. Credits shall accrue only after completion
of the purchases of the respective qualifying number of Cell Sites.
<TABLE>
<CAPTION>
Cell Sites Purchased Incremental Allowed Credit
-------------------- --------------------------
<S> <C>
First 40 *
Next 14 *
Next 14 *
Next 6 *
</TABLE>
In no event shall the amount of credits accruing under this
clause exceed*. All credits earned but not utilized by placement of
orders prior to December 31, 1997, shall be forfeited.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request
for confidential treatment under Rule 406 under the Securities Act of 1933,
as amended.
-9-
<PAGE> 10
Notwithstanding the foregoing, upon request of both Buyers,
Seller agrees to assume that Customers will earn first Incremental
Allowed Credit of * and will permit such credit to be applied to
invoices rendered by Seller in connection with Customers' obligation
to pay for the Initial Systems. In the event that Customers shall
have not in fact by December 31, 1993, purchased a sufficient volume
of Small Configuration Cell Sites and/or larger Cell Sites to earn
such additional credit, Customers shall promptly upon receipt of
Seller's invoice pay to Seller such previously applied credit. If
Customers subsequently purchase sufficient volumes to earn such
credit, such credit shall be available for application against
invoices for subsequent purchases as aforesaid.
In addition, notwithstanding the foregoing, upon request of
both Buyers, once Customers have begun to purchase Cell Sites that
count in determining Customers' eligibility for the next Incremental
Allowed Credit *, Seller agrees to assume that Customers will earn
such credit and permit such credit to be applied-to invoices rendered
by Seller in connection with Customers' obligation to pay for the Cell
Sites counting in such determination. Upon request of both Buyers,
the third and fourth Incremental Allowed Credits* shall be treated
similarly. In the event of such election, credits shall be applied on
a per Cell Site basis* per cell, with respect to the second, third and
fourth Incremental Allowed Credits, respectively).
In the event that Customers fail to purchase the Initial
Systems (including thirty (30) Cell Sites) as required by the Paragraph
entitled PURCHASE COMMITMENTS, Seller shall have the right to withdraw
the volume credit program set forth above, and Seller shall be entitled
to return of all such credits as may have been applied in Seller's
favor under such program. In the event that Customers meet such
commitment, but fail to purchase eighty (80) Cell Sites as required by
such Paragraph, Seller shall be entitled to return of all such credits
as may have been applied in Customers' favor under such program, except
as to credits fully earned and by then applied. (In clarification of
the preceding sentence, the parties expressly agree that if Customers
purchase 56 Cell Sites and credits in the amount of *have been applied,
the amount subject to return shall be *, the advanced, but unearned,
third Incremental Allowed Credits.) Customers shall promptly upon
receipt of Seller's invoice pay any such return amounts to which Seller
is entitled.
(c) MTSO Pricing:
Seller agrees to invoice and Customers agree to pay more than
the sum of * for the MTSO Products that Seller will furnish for
completion of the Initial Systems by the Initial Operations Date,
which for the-purposes hereof, the parties agree shall include the one
executive cellular processor and the six (6) DCSs identified in
Attachment B, as specified in more detail in Appendix 1 to Attachment
B. Such lump sun price prevails over the itemized prices set out in
Appendix 1. Notwithstanding the content of Appendix 1, the parties
hereby expressly agree that such maximum price is inclusive of prices
for (i) the
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
-10-
<PAGE> 11
Products necessary in the six (6) DCSs to support seven (7)
simultaneous surveillance on each DCS (i.e., for each DCS, Tie Trunk
Interface Packs and related cabling), (ii) Products necessary for
Seller's Interprocess Message Switch ("IMS") to implement the
signaling system known as "SS7" on the Initial Systems (i.e., 2 3rd
Link Nodes each with SS7) and related cabling, hardware and
miscellaneous equipment, (iii) the Products necessary in such IMS to
support up to six (6) DCSs and sixty-nine (69) Cell Sites; and (iv)
Seller's standard initial system one-time Software charge. The
parties further agree that such maximum price is exclusive of
engineering, installation, power Products, Transmission Products,
transportation and related charges, and all applicable sales and use
taxes.
(d) Software Pricing:
Seller's Software Pricing Plan for 1993 for system Software is
set forth in Attachment H to this Agreement.
Seller shall, with the MTSO equipment for the Initial Systems,
provide the Seller's standard system Software, as well as the optional
Software features listed in Attachment E to this Agreement.
Notwithstanding the Seller's list charge for such system Software as
set out in Attachment H, the MTSO pricing set forth in Subparagraph
(c) of this Paragraph includes the charge for such system Software.
Notwithstanding Seller's published list prices for such optional
Software features, and the pricing plan set out in Attachment H, the
total initial fees to Customers for possession and Use of such
optional features on the Initial systems shall be*. Seller shall
allow reasonable substitutions against those features listed in
Attachment E, without increase in such amount, which such
substitutions shall be mutually agreed and reflected by issued and
accepted orders.
In addition to the optional Software features identified
above, and without payment over the total fees identified above,
Seller shall, with the MTSO equipment for the Initial Systems, furnish
the Software capability known as "SS7" and the optional Software
feature known as "IS41".
(e) Small Configuration Pricing:
Customers have expressed their desire for and Seller is
willing to furnish custom Cell Sites configured as described in
Attachment C to this Agreement ("Small Configuration Cell Sites").
For each Small Configuration Cell Site ordered prior to January 1,
1996, with scheduled delivery before the end of March 1996, Seller
agrees to hold the list price to *. After December 31, 1995, Seller
may amend its price for the Small Configuration Cell Sites, provided,
however, in each of the calendar years 1996 and 1997, Seller agrees
that such price shall not increase by more than * and *, respectively,
over the list price applicable in the immediately preceding year.
Such price shall be subject to
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
-11-
<PAGE> 12
discount as provided in subclause (a) of this Paragraph 6. Nothing
herein shall be deemed to bar Buyers from ordering additional Product
components for a Small Configuration Cell Site at applicable standard
pricing as determined by this Agreement. The parties agree that, in
the event that Small Configuration Cell Sites are subsequently
outfitted with digital radios, and if Seller shall then have
established optional Software feature pricing for Software to be
loaded on MTSO equipment to permit such digita1 operation, Seller
shall be to render an invoice for additional Software right to use
fees in the amount not to exceed the lesser of list price or * per
Cell Site.
(f) Engineering Pricing:
Customers and Seller have agreed on two standard cell site
configurations for which Seller agrees to charge a reduced engineering
services price of * . Such reduced fee shall apply only with respect
to Cell Sites which are equipped with sixteen (16) or fewer channels.
Customers acknowledge that such reduced fee is based on the fact that
due to the agreed configurations only very limited field engineering,
if any, will be required.
Seller further agrees to provide in respect of the Initial
Systems telephonic engineering consultation at a charge of * per
hour.
The aforesaid price shall be held firm through calendar year
1993. Thereafter, Seller may amend such prices, provided, however, in
calendar year 1994, Seller agrees that such prices shall not increase
by more than *, and in each of the calendar years 1995, 1996 and 1997,
Seller agrees that such prices shall not increase by more than *, over
the list prices applicable in the immediately preceding year.
(g) Installation Pricing/Transportation:
For the Initial Systems, Seller agrees to install Cell Sites
at the fixed rate of * per Cell Site. The installation Services which
Seller shall perform for such lump sum amount are set out in
Attachment I to this Agreement.
For clarification of the parties understandings concerning
transportation, the parties agree with respect to the establishment of
the Initial Systems that Customers' payment of Seller's standard
transportation charges, together with applicable installation charges,
shall constitute full payment for delivery of the Products to their
installation sites, except in the case where delivery cannot be
accomplished with standard 4 wheel drive vehicles. In such excepted
cases, Customers shall be responsible for all incremental expenses
(e.g., snow removal, rental of snowcat) incurred by Seller to effect
delivery. In addition, Customers shall be responsible for all
hoisting that shall be required at the installation sites.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
-12-
<PAGE> 13
(h) Takeback of Series I Cell Sites:
Seller agrees to takeback Customer's six existing Series I
Cell Sites when they are replaced with Series II Cell Sites (other
than microcells) purchased under this Agreement. As each Series II
Cell Site (other than a microcell) is purchased under this Agreement
in replacement of an existing Series I Cell Site, Customer shall be
entitled to require Seller to accept possession of and title to the
replaced Series I Call Site. Customer shall provide to Seller with
each Series I Call Site all relevant spare circuit packs and other
Series I related equipment (but not including power and transmission
equipment).
Except as provided below, or as otherwise agreed by Seller,
Customer shall deliver possession to AT&T of each Series I Call Site
it elects to sell to AT&T promptly after it has been replaced by a
Series II Call Site. Prior to delivery of such Series II Call Site,
Customer shall issue its order for Seller to de-install and pack the
Series I Cell Site. Seller shall invoice Customer at Seller's
standard rates for such Services. Seller shall bear the expense of
transporting the Series I Call Site from Customer's location to
Seller's location of choice. Title and risk of loss of or damage to
the Series I Cell Site shall remain which Customer until commencement
of de-installation by Seller. If requested by Seller, Customer shall
issue its evidence of such transfer of title. Seller shall be
required to accept such equipment on an "as is" basis when possession
is delivered, except that Seller shall not be required to accept any
of such equipment that is so badly damaged that it is not capable of
refurbishment at reasonable expense or as to which parts are missing.
(If Seller determines that any Series Cell Site is not acceptable for
takeback, Seller shall specifically set forth in writing the basis of
that determination.) Further, Seller shall not be required to
takeback any Series I Call Site the possession of which is not made
available to Seller prior to January l, 1995.
For each Series I Cell Site Seller takes back under the
provisions of this subclause, Seller shall issue a credit invoice in
the amount of *, which Customer shall use against the purchase of the
Series II Cell Sites replacing such Series I Cell Site.
(i) Refurbished Call Sites:
Seller acknowledges that it currently does not offer a high
power extended frame Cell Site. Prior to the execution of this
Agreement, Buyers identified a company, named Coastcom, which has
worked with other manufacturers of cellular Cell Site equipment to
remedy this situation. Seller has commenced discussions with
Coastcom. Seller hereby expressly agrees that it will work in good
faith, and expend all reasonable efforts, to identify and implement a
similar, feasible, and price competitive solution for Seller's Cell
Site Products.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
-13-
<PAGE> 14
Until Seller offers such solution, whether or not such
solution is the result of efforts of Sellers and Coastcom, Seller
agrees, subject to availability, to lease to Customers for locations
that Customers would otherwise use such solution up to twenty (20)
refurbished Series I Call Sites (configured with up to eight analog
radios) at an annual lease rate of * per Cell Sites. Any such lease
shall be on reasonable terms and conditions to be mutually agreed and,
at request of Customer, may include an option to purchase the leased
Cell Site. Customers shall bear the expenses of engineering,
transporting and installing leased Cell Sites. In the event that any
Customer elects to replace a leased Cell Site with a high power
extended frame Cell Site purchased from Seller, Seller and Customer
shall bear equally the expenses of de- installing and transporting the
leased Cell Sites and the expenses of engineering, transporting and
installing the replacing high power extended frame Cell Site. In all
other cases in which the term of any such lease is terminated or
expires, Customers shall bear all such expenses. Customers
acknowledge that such refurbished Cell Sites shall not be migratable
to digital radio service. Seller and Buyers shall jointly establish a
forecast of Customers' needs for refurbished Cell Sites to assist
Seller in having stock to meet such needs.
(J) Quality Management Tools:
Notwithstanding any other provision of this Agreement, this
Agreement includes Customers' licensing of Seller's Quality Management
Tools, as provided in Attachment F to this Agreement. Quality
Management Tools are subject to maintenance as provided in Attachment
G to this Agreement.
(k) High Power Upgrade:
Seller's current Series II Call Site equipment is equipped
with linear amplification with maximum power output of 240 watts.
Seller has under consideration new linear amplification equipment with
output of 320 watts. In the event that during the term of this
Agreement Seller makes generally available such equipment with higher
power, Seller agrees that it will offer to Customers the same upgrade
program Seller offers to other of Seller's customers in the same
circumstances.
In addition, Seller shall establish on its books in the name
of Buyers a credit in the amount of * . Such credit shall be
applicable against invoices for Seller's charges for upgrading
existing equipment to higher power, provided such charges relate to
orders received or before December 31, 1997, with scheduled shipment
by the end of March 1998.
__________________________________
* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.
-14-
<PAGE> 15
(1) Technical Consultants:
(i) Project Manager - Seller agrees that, at no
additional charge to Customers, it will assign a full
time project manager until thirty (30) days after
completion of installation of the Initial Systems
(herein, the "project"), who shall be Seller's
interface with Customers for all aspects of the
project. The project manager's responsibilities
shall include the scheduling of deliveries,
installations and turnovers of equipment, general
Seller/Customer coordination, and other
responsibilities as mutually agreed.
(ii) RF Consultant - Seller agrees that, at no additional
charge to Customers, it will until August 1, 1993
provide radio frequency consulting Service with
respect to the Initial Systems and any growth Cell
Sites that Customers elect to add to such systems.
Such Service shall be performed by a qualified radio
frequency engineer, and shall include assistance to
Customers regarding radio propagation, frequency
coordination and planning, and drive testing.
Although Seller agrees to provide such Service on an
"as needed" basis, Customers understand that Seller
does not hereby commit to dedicate to such Service a
person for such period, and, accordingly, that
Seller's commitment hereunder shall be to go to
Customer's location (if required) and perform such
Service after receipt of a request therefor as
promptly as the circumstances reasonably permit.
(iii) Network Consultant - Seller agrees that, at no
additional charge to Customers, it will until August
1, 1993, provide consulting Service with respect to
the Initial Systems. Such Service may be performed
by one or more qualified engineers and shall include
assistance to Customers regarding network planning,
traffic analyses, public switched telecommunications
network interconnections, national cellular network
interconnections and related MTSO issues. Although
Seller agrees to provide such Service on an "as
needed" basis, Customers understand that Seller does
not hereby commit to dedicate to such Service any
person or persons for such period, and, accordingly,
that Seller's commitment hereunder shall be to
perform such Service after receipt of a request
therefor as promptly as the circumstances reasonably
permit.
(iv) Switch Consultant - Seller agrees that, at no
additional charge to Customers (except as provided
below), it will provide a competent MTSO technician
to assist Customers in the maintenance and
administration of the MTSO equipment comprising the
Initial Systems. Such technician shall be available
to Customers on-site at the location of the executive
cellular processor for the Initial Systems in
Billings, Montana, on a full- time (normal 5 day work
week) basis, starting on the Installation Complete
Date, for so long as the assistance of such person is
reasonably necessary, but in no case beyond ninety
(90) days following such date. The cost of.
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<PAGE> 16
travel and reasonable living expenses to other
locations of the Initial Systems (other than
locations local to Billings) shall be for the account
of Customers.
7. ORDERS:
All orders submitted by Customers shall be deemed incorporate and be
subject to the terms and conditions of this Agreement unless otherwise agreed
in writing. Seller agrees to deliver and install Products and perform Services
(i) in accordance with the orders placed pursuant to this Agreement for Initial
Systems and, (ii) for orders of Products and Services in addition to those
placed for Initial Systems, in accordance Seller's standard delivery and
installation schedules being quoted at the time such orders are placed to other
purchasers under comparable conditions.
All orders, including electronic orders, shall contain the information
necessary for Seller to fulfill the order.
All schedules and requested dates are subject to Seller's concurrence,
which concurrence shall not be unreasonably withheld or delayed.
No provision or data on any order or contained in any documents
attached to or referenced in any order, any subordinate document (such as
shipping releases), shall be binding, except data necessary for Seller to fill
the order. All such other data and provisions are hereby rejected. Electronic
orders shall be binding on Customer notwithstanding the absence of a signature.
8. ORDER ACCEPTANCE:
All orders are subject to acceptance by Seller, which acceptance shall
not be unreasonably withheld or delayed. Seller shall acknowledge the date of
order receipt either in writing or electronic data interface format. The
acknowledged date of order receipt is the price-effective date for purposes of
this Agreement.
Orders submitted for Products, Licensed Materials, or Services in
accordance with the terms and conditions of this Agreement shall be deemed
accepted by Seller in accordance with the following:
(a) If listed in a Customer Price List, upon receipt unless Seller
notifies Customer to the contrary within ten (10) days of
order receipt;
(b) If the order is for Products, Licensed Materials or Services
not listed in a Customer Price List or requires engineering,
upon receipt unless Seller notifies Customer to the contrary
within thirty (30) days of order receipt.
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<PAGE> 17
If Customer submits an order requesting a delivery or completion
interval less than the standard interval, Seller will accept such order only
for its standard interval. Seller will, however, attempt to meet Customer's
requested interval and provide confirmation or denial of the requested
shortened interval within twenty-one (21) days. Additional charges may be
applicable. Provided that Customer submits its orders for the Initial Systems
within a reasonable period following the execution of this Agreement, nothing
in this paragraph shall be deemed to change the Initial Operations Date for the
Initial Systems as set out in the Paragraph entitled DELIVERY AND INSTALLATION
SCHEDULE FOR THE SYSTEMS.
While it is Seller's objective to provide Customer with an
acknowledgment of each order received, it is Customer's responsibility to
advise Seller of any missing or late notifications to insure that the order has
not been lost. No order is to be considered "accepted" by Seller unless its
receipt has been acknowledged.
9. CHANGES IN CUSTOMER'S ORDERS:
Changes made by Customer to an accepted order shall be treated as a
separate order unless the parties expressly agree otherwise. If any such
change affects Seller's ability to meet its obligations under the original
order, any price, shipment date, or completion date quoted by Seller with
respect to such original order is subject to change. However, Seller expressly
agrees to use all reasonable efforts to minimize any delayed shipment or
completion date occasioned by such changes. Moreover, Seller acknowledges the
importance Customers attach to the Initial Operations Date for the Initial
Systems and agrees-that it will not impose deferral thereof hereunder, except
in the event of a change that materially affects Seller's ability to meet such
date. Any change in the orders for the Initial Systems resulting from late or
incorrect engineering of the system by Seller shall not be deemed changes
subject to the provisions of this clause.
10. PRICES:
Except as set forth in the Paragraph entitled SELLER'S INCENTIVES,
prices, fees, and charges (hereinafter "prices" ) shall be as set forth in
Seller's Customer Price Lists, firm price quotations, specific agreements, or
other prices submitted by Seller to Customer.
In those cases where the price is to be determined from a Customer
Price List, the applicable Customer Price List shall be the issue which is in
effect on the date of Seller's receipt of the order provided that the requested
shipment or service- commencement date is in accordance with Seller's published
shipping or planning interval or thirty (30) days from the date of order
receipt, whichever is longer. Prices for Products, Licensed Materials or
Services to be shipped or performed beyond such period will be established by
determining an effective order-entry date (the date required for order entry by
Seller in accordance with Customer's requested date) and applying the price
from applicable Customer Price List as of that date.
In those cases where the price is not to be determined from a Customer
Price List, a firm price quotation, or specific agreement, the applicable price
will be Seller's price in effect on the
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<PAGE> 18
date of Seller's receipt of the order and such price will be communicated to
Customer as soon as practicable thereafter.
Seller may amend its prices, other than those subject to firm price
quotations or other agreements between the parties, but such changes shall only
be applicable to orders received after such change. However, Seller agrees
that, in each of the calendar years starting 1993 and ending December 31, 1997,
its list prices for Products (not including Software and Products in limited or
discontinued availability status) for comparable Cell Site configurations,
other than the Small Configuration Cell Site (the price for which is subject to
special terms set forth in Clause 6(c) of this Agreement), shall not, in the
aggregate, increase by more than five percent (5%) over the list prices
applicable in the immediately preceding calendar year. Nothing herein shall
deemed a constraint on Seller's introduction of new Cell Products at whatever
list price Seller deems appropriate.
Notwithstanding the foregoing, if Seller is delayed from completion of
an order due to any change requested by Customer or as a result of Customer's
delay in furnishing information or in performing its obligations, any price
agreed to by Seller is subject to reasonable change.
Unless expressly stated in writing or as otherwise provided herein,
Seller's prices are exclusive of charges for transportation and other related
services, and any sales or other tax or duty which Seller may be required to
collect or pay upon the ordered transaction.
11. INVOICES AND TERMS OF PAYMENT:
Invoices shall be rendered (i) for Products and Licensed Materials,
upon shipment from Seller's factory or normal shipping location, (ii) for
engineering Services, upon completion, (iii) for installation and other
Services, monthly as performed, in which case, if a lump sum price is
applicable to the total Services to be performed, such recurring billing will
be based upon the proportion of the price for the total Services represented by
such Services performed, and, notwithstanding the above, (iv) for engineering,
Licensed Materials, Products and installation Services performed hereunder in
respect of the Initial Systems, upon Installation Complete Date or the In
Revenue Service Date, whichever occurs first, or, in each of the above cases,
as soon thereafter as practicable. With respect to cases subject to (i) and
(iv) above, if the scheduled date for delivery or installation completion, as
applicable, is deferred at a Customer's request or due to a Customer's fault,
Seller reserves the right to render billing for engineering Services, if any,
Licensed Materials and Products on the later of the initially scheduled ship
date or Seller's readiness to ship, and for installation services, in
accordance with (iii).
Customer shall pay invoiced amounts within thirty (30) days from the
date of Seller's invoice. Delinquent payments are subject to a late payment
charge at the rate of one and one-half percent (1-1/2%) per month, or portion
thereof, of the amount due (but not to exceed the maximum lawful rate).
Customer shall notify Seller of any disputed invoice amounts within three (3)
months from the date of the invoice and late charges shall not apply to any
amount disputed in good faith. If an invoice is disputed, Customer shall
nonetheless pay so much of the invoiced amounts as are not in dispute.
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<PAGE> 19
12. DELIVERY AND INSTALLATION SCHEDULE FOR THE SYSTEMS:
On or before their respective agreed Start Dates, Customer shall
notify Seller that the MTSO site(s) and/or Cell Site locations for the Initial
Systems (or any subsequent system that Seller will install under the terms of
this Agreement) are ready for installation and that Customer's responsibilities
relating to such places as set forth in Attachment D have been :performed or
furnished. Seller shall have access to such places on and from the date of
Seller's receipt of such notifications.
Seller agrees that it will thereafter install all of the parts of the
Initial Systems (or any such subsequent system) completely or in stages as
agreed and submit notices of completion to Customer on or before the agreed
Initial Operations Date(s).
The Initial Operations Date for the Initial Systems is April 1, 1993.
The Start Dates to support such Initial Operations Date shall be as mutually
agreed by Seller and both Buyers.
13. TRANSPORTATION:
Seller's prices for Products and Licensed Materials do not include
freight charges or related transportation Services or charges therefor, unless
expressly provided otherwise in this Agreement or stated in writing by Seller
to the contrary. Seller, in accordance with its normal practices, will arrange
for transportation for such items, will prepay transportation, if appropriate,
and invoice transportation charges.
If Customer elects to route Products and/or Licensed Materials or to
arrange for transportation, Seller will provide related services subject to a
separate fee.
Premium transportation will only be used with Customer's concurrence.
14. PACKING, MARKING, AND SHIPPING:
Seller shall, at no additional charge, pack and mark shipping
containers in accordance with its standard practices for domestic shipments.
Where in order to meet Customer's requests, Seller packs and/or is required to
mark shipping cartons in accordance with Customer's specifications, Seller
shall invoice Customer reasonable additional charges for such packing and/or
marking.
Seller shall:
(a) Enclose a packing memorandum with each shipment and, if the
shipment contains more than one package, identify the package
containing the memorandum; and
(b) Mark Products as practicable for identification in accordance
with Seller's marking specifications (e.g., model/serial
number and month and year of manufacture).
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<PAGE> 20
Partial shipments under an order may be made by Seller and
separately invoiced.
15. CANCELLATION FOR BREACH:
In the event Seller or Customer is in material breach or default of
this Agreement or any order placed hereunder and such breach or default
continues for a period of forty-five (45) days after the receipt of written
notice (and such additional time as may be agreed upon by the parties), then
Seller or Customer shall have the right to cancel that part of any order
affected by the breach or default without any charge, obligation or liability,
except for those items already fully discharged. Notwithstanding anything in
the foregoing to the contrary, in the event that Customer shall cancel an order
in part for failure of Seller to deliver items in accordance with such order,
Customer shall be entitled to return additional items furnished under such
order to the extent they are unusable without such items as are subject to such
cancellation. Both parties shall cooperate in every reasonable way to
facilitate the remedy of a breach or default hereunder within such forty-five
(45) day period.
16. INSTALLER'S WORKING SURPLUSES
In accordance with its standard practices, Seller may from time to
time, in order to expedite installation work, ship additional Products. Such
products will not be billed to Customer and any surpluses resulting from such
procedure will be returned to Seller's factories by Seller's installer at
Seller's expense.
17. PRODUCT CHANGES:
Seller may at any time make changes in a Product, or modify the
drawings and specifications relating thereto or substitute a Product of later
design to 'fill an order, provided the changes, modifications or substitutions
under normal and proper use do not impact upon Product Form,. Fit or Function
and do not adversely impact the ability of the Product or system as a whole to
operate in accordance with the Specifications.
Seller shall notify Customer of all changes to Products which, in
Seller's determination, are required to remedy a nonconformance to Seller's
applicable Specifications to correct design defects that are of type that
result in inoperative electrical or mechanical conditions or an extremely
unsatisfactory operating condition, or which are recommended to enhance safety.
If Seller has furnished and installed a Product which is subject to such a
change, Seller will implement such change, at its expense, if it is announced
within fifteen (15) years from the date of shipment of that Product, by, at its
option, either (1) modifying the Product at Customer's site; (2) modifying the
Product which Customer has returned to seller in accordance with Seller's
instructions; or (3) replacing the Product requiring change with a replacement
Product for which such change has already been implemented. However, if Seller
has not engineered the original Product application and, accordingly, office
records are not readily available to Seller, Seller will provide generic
exchange information and associated parts for Customer's use in applying such
change. If Seller has not installed such Product, Seller, will, at its
expense, furnish the parts and documentation necessary to implement such change
if it is announced within fifteen (15) years
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<PAGE> 21
from the date of shipment of that Product. Customer may notify Seller of by
problems which it considers fall within the categories described above. If
Customer does not make or permit Seller to make the change as .stated above
within one (1) year from the date of change notification, subsequent repairs or
replacements under this Paragraph and under the Paragraph WARRANTY may, at
Seller's option, be billed to Customer.
18. INDEPENDENT CONTRACTOR:
All work performed under this Agreement by one party shall be
performed as an independent contractor and not as an agent of the other party.
No persons furnished by either party shall be considered the other party's
employees or agents, and each party shall be responsible for its and its
employees' and contractors' compliance with all laws, rules regulations
involving employment of labor, hours of labor, working conditions, payment of
wages, and payment of taxes, such as unemployment, social security and other
payroll taxes, including applicable contributions from such persons when
required by law.
19. TAXES, LEGISLATION AND GOVERNMENT REGULATIONS:
(a) Any tax or related charge resulting from this
Agreement or any activities hereunder, exclusive of
any tax based on or measured by net income or gross
receipts or any franchise or similar tax, which
Seller shall be required to pay or to collect for any
government shall be paid by Customer in cash, unless
a valid exemption certification is furnished by
Customer to Seller.
(b) If, following the execution of this Agreement,
Seller's costs of Products, Software and Services
should be directly increased as a result of federal,
state or local legislation, or orders or regulations
of any federal, state or local government agency,
including any subdivision thereof, or any agency or
authority regularly constituted for administering
supervising or promoting the provisions of any code
of fair competition, the prices for anything to be
furnished hereunder so affected may be increased
correspondingly, at the option of Seller.
(c) All obligations hereunder shall be subject to
legislation and to government agency orders and
regulations, including, if any, such as affect or
limit prices, production, purchases, sales, use or
inventory of the Products or Software.
20. TITLE AND RISK OF LOSS:
Title (except as provided in the USE OF THE INFORMATION and SOFTWARE
LICENSE Paragraphs of this Agreement) and risk of loss to a Product, Licensed
Material, or other item furnished to Customer under this Agreement shall pass
to Customer upon Installation Complete Date if Seller is installing the item.
If Seller is not installing the item, title and risk of loss to a Product,
Licensed Material or other item shall pass upon delivery to the final
destination
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<PAGE> 22
established by Customer's order for the item or other agreement of the parties.
Delivery of an item to its final destination by Seller shall be deemed complete
at such time as all transportation, interim warehousing, hauling and hoisting
required to be .performed by Seller or its agents under the order for the item
have been completed. Notwithstanding the above, if sooner, title and risk of
loss to the item shall pass to Customer at the point at which Seller or
Seller's supplier or agent turns over possession of the item to Customer,
Customer's employee, Customer's designated carrier, warehouse or hoister, or
other Customer's agent. For the purpose of this clause, receipt of an item by
a carrier arranged for by Seller in performance of Turnkey Service provided
under separate agreement of the parties shall be deemed receipt by Customer's
designated carrier.
Customer shall notify Seller promptly of any claim with respect to
loss which occurs while Seller has the risk of loss and shall cooperate in
every reasonable way to facilitate the settlement of any claim.
Nothing herein shall, during the period a party has the risk of loss
to an item, relieve the other party of responsibility for loss to the item
resulting from the acts or omissions of such other party, its employees or its
agents.
21. DUTIES OF GOOD FAITH:
Seller acknowledges that Customer, in entering into this Agreement,
has relied on the good will and trust that Seller has assured Customer that
Seller deserves. Customer acknowledges that Seller, in entering into this
Agreement, has relied on the good will and trust that Customer has assured
Seller that Customer deserves. Customer and .Seller accordingly agree to
discharge all of their obligations and exercise all judgments and action
hereunder in utmost good faith and in such a fashion as will minimize costs and
losses to Customer or Seller.
22. DEPARTURE FROM SCHEDULE DATES:
Customer will notify Seller and Seller will notify Customer whenever
any condition arises which may require any departure from a scheduled date, but
this shall not relieve any party of its responsibilities under this Agreement.
23. ACCEPTANCE OF INSTALLATION:
At reasonable times during the course of Seller's installation,
Customer, at its request may, or upon Seller's request shall, inspect completed
portions of such installation. Upon Seller's further request, and upon
sufficient notice to Customer, Customer shall observe Seller's testing of the
Product being installed to determine that such testing and the test results are
in accordance with Seller's acceptance standards or acceptance procedures.
This job shall be considered complete and ready for acceptance by Customer when
the Product has been installed and tested by Seller in accordance with its
standard procedures, and Seller represents such Product to be in working order
and meets the Specifications. Upon completion of the installation, Seller will
submit to Customer a notice of completion. Where Seller's installation relates
to the Initial
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<PAGE> 23
Systems, or any subsequent system, separate notices of completion shall be
issued for (i) the MTSO, (ii) each Cell Site, and (iii) the project as a whole.
Customer shall promptly make final inspection of substantial
conformance with Seller's specifications and do everything reasonably necessary
to expedite acceptance of the job. Seller will promptly correct any defects
for which it is responsible. The job will be considered as fully accepted
unless Seller receives notification to the contrary within thirty (30) days
after Installation Complete Date.
24. CORRECTION OF DEFICIENCIES:
If the Products, Software or an Initial System (or any subsequent
system furnished hereunder) as a whole, fails to fulfill the requirements of
the Acceptance Tests, Seller shall, at its own expense, promptly correct any
defects.
25. IN REVENUE SERVICE:
Notwithstanding the Acceptance procedures set forth above, Customer's
use of any part of the Initial Systems (or any subsequent system furnished
hereunder) In Revenue Service shall constitute Acceptance of such part of the
system, and the date Customer first uses any Product or Software In Revenue
Service shall be the date of Acceptance for purposes of billing and (if prior
to the Notice of Completion) the determination of Warranty and technical
service Periods, but not for purposes of passing of Acceptance Tests. To the
extent that billing for any Cell Site is based upon it having been placed In
Revenue Service, payment shall be based upon the price of the Cell Site
(including charges for engineering, transportation, installation and similar
charges), the price of the MTSO (including such additional charges) supporting
the operation of such Cell Sites, plus the fees for the Software necessary for
the operation of such Cell Sites.
26. USE IN TRAINING:
Customer's use of any part of the Initial Systems (or any subsequent
system furnished hereunder) to provide training or hands-on experience to
Customer's personnel prior to Acceptance shall constitute Acceptance of such
part of the system and the date Customer first so uses any such part shall be
the date of Acceptance for purposes of billing and (if prior to the Notice of
Completion) the determination of Warranty and Technical Service Periods, but
not for purposes of passing the Acceptance Tests. This provision shall not
apply to training provided or overseen by Seller nor to the extent that
Customer's personnel merely familiarize themselves with the system without
actual operations of the Products.
27. WARRANTY:
(a) Seller warrants to Customer that during the Warranty Period
(i) Seller's Manufactured Products will be free from defects in material and
workmanship and will conform to and in accordance with applicable
specifications; (ii) Software developed by Seller or developed in accordance
with Seller's Specifications will be free from those defects which materially
affect
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<PAGE> 24
performance in accordance with applicable Specifications for such Software,
(iii) Services will have been performed in a workmanlike manner and in
accordance with good usage and accepted practices in the community in which the
Services are performed.
(b) The Warranty Periods listed below are applicable to Seller's
Manufactured Products furnished pursuant to this Agreement, unless otherwise
stated:
<TABLE>
<CAPTION>
Warranty Period
---------------
Item New Product Repairs*
---- ----------- --------
<S> <C> <C>
Cellular Radio Telecommunications 24 months 6 months
Cell Sites, including furnished Software*
Cellular Radio MTSO, including 24 months 6 months
furnished Software**
Cellular Radio Software Updates** 24 months 6 months
Power Products, including furnished Software 24 months 6 months
Transmission Products, including 24 months 6 months
furnished Software
Services 6 months
</TABLE>
*The Warranty Period for a repaired Product or part thereof,
or for a replacement Product or part thereof furnished in lieu of
repair, is the period listed or the unexpired term of the new Product
Warranty Period, whichever is longer.
**So long as Seller continues to offer annual Software Update
Service, the Warranty Period for Cellular Radio Software shall extend
twenty-four (24) months from the later of the date of payment by
Customer of Seller's annual Software Update fee or the implementation
of a Software Update furnished pursuant to such fee, so long as
Customer continues promptly to implement each such Software Update so
furnished. If Customer fails to promptly implement any Software
Update furnished by Seller, the twenty-four (24) month Warranty Period
for the Software shall continue to run from the later of the date of
payment of the last consecutive annual Software Update fee or the last
consecutive Software Update implemented by Customer and shall
terminate at the end of such period.
(c) If under normal and proper use, a defect or nonconformity
appears in an item of Product or Software during the applicable Warranty Period
and Customer promptly notifies Seller and confirms such notice in writing of
such defect or nonconformity and follows Seller's instructions regarding return
of the defective or non-conforming item, Seller, at its option, will either
repair or replace the same without charge at its manufacturing or repair
facility or provide a
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<PAGE> 25
refund or credit based on the original purchase price; provided, however, that
Seller's option to provide a refund or credit shall not apply to those defects
which materially affect (l) the System's ability to deliver a service to the
end users or (ii) the billing, administration or maintenance capabilities of
such System. If a defect or non-conformity is in a Seller's Manufactured
Product or in Software developed by Seller or purchased by Seller pursuant to
Seller's procurement specifications and installed by Seller and Seller
ascertains in its reasonable judgment that the Products or Software is
repairable but not readily returnable for repair, the repairs or replacements
shall be made at Customer's site. No Products or Software will be accepted for
repair or without the written authorization of and in accordance with
instructions of Seller. Transportation expenses associated with returns to
Seller shall be borne by Customer. Seller shall pay the costs of
transportation of the repaired or replacing item to the destination designated
by Customer (within the conterminous forty-eight United States). If Seller
determines that a returned item is not defective, Customer shall pay Seller all
costs of handling, inspecting, testing and transportation. In repairing or
replacing any Product, part of a Product, or Software medium under this
warranty, Seller may use reconditioned or refurbished parts. Replaced Products
or parts shall became Seller's property.
(d) If Services prove not to be performed as warranted, Seller, at
its option, either will correct any defects and deficiencies for which it is
responsible or render a full or pro-rated refund or credit based on the
original charge for Service.
(e) If Customer and Seller have a disagreement under Paragraph (c)
as to whether or not a problem is a defect or non- conformity covered by this
warranty, Seller agrees to correct the problem and bill Customer for the
corrective action under the Paragraph entitled INVOICES AND TERMS OF PAYMENT.
Seller will segregate such bills. Such disputed warranty claims will be
subject to resolution by the Intercompany Review Board in accordance with the
Paragraph entitled RESOLUTION OF DISPUTES, and if resolved in Customer's favor,
Seller agrees to credit Customer for the costs of corrective action covered by
warranty.
(f) With respect to Vendor Items and Software not developed by
Seller, Seller, to the extent permitted, does hereby assign Customer the
warranties given to Seller by its vendor of such Vendor Items and supplier of
such Software. Such assignment will be effective on the date of shipment of
such Vendor Items. With respect to Vendor Items recommended by Seller in its
Specifications for which the vendor's warranty cannot be assigned to Customer,
or if assigned, less than sixty (60) days remain of the vendor's warranty at
the time of assignment, Seller warrants for sixty (60) days from the date of
shipment or, if installed by Seller, on Acceptance Date or thirty (30) days
from the Installation Complete Date, whichever is sooner, that such Vendor's
Items will be free from defects in material and workmanship.
(g) Seller makes no warranty with respect to defective conditions
or non-conformities caused by Products or Software being (i) subjected to
misuse, neglect, accident or abuse by anyone other than Seller or its
subcontractors, employees or agents; (ii) improperly wired, repaired or altered
by anyone other than Seller or its subcontractors, employees or agents; (iii)
improperly installed, scored or maintained by anyone other than Seller or its
subcontractors, employees or agents; or (iv) used in a manner not in accordance
with Specifications or operating
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<PAGE> 26
instructions. In addition Seller makes no warranty with respect to System
Software Updates unless all previous Software Updates are purchased and
properly implemented.
(h) If as a result of a defect or non-conformity covered by this
warranty, Customer is not able to offer services to its subscribers or the
billing, administration or maintenance capabilities of a System, are not in
accordance with the Specifications, Seller shall at its sole cost and expense
repair or correct the problem or replace the defective Product or Software and
ship any required replacement Products (or components thereof) or replacement
Software to Customer as promptly possible. If such repair, replacement, or
installation of replacement Products or Software requires the services of
Seller's service personnel at Customer's sites, Seller shall, at its sole cost
and expense, dispatch such service personnel as are required to correct such
problem immediately upon being notified thereof by Customer.
(i) THE WARRANTIES PROVIDED IN THIS AGREEMENT ARE EXCLUSIVE AND
ARE IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
CUSTOMER'S SOLE AND EXCLUSIVE REMEDY SHALL BE SELLER'S OBLIGATION TO .REPAIR,
REPLACE, MAKE CORRECTIONS, CREDIT OR REFUND AS SET FORTH ABOVE.
28. PROCEDURE FOR CORRECTION OF PROBLEMS:
Notwithstanding anything to the contrary contained in Agreement,
Seller shall, at Customer's request, make changes or corrections to the
Products or Software to cure any problems experienced by Customer. Such
changes or corrections shall be made at Seller's expense if (i) such change is
within the categories described in the Paragraph entitled PRODUCT CHANGES and
is within the fifteen-year period referred to therein or (ii) if such or
correction is required due to a failure to comply with any warranty contained
in the Paragraph entitled WARRANTY and is within the Warranty Period set forth
in the Paragraph WARRANTY. Otherwise, such changes or corrections shall be at
Customer's expense at Seller's then standard rates. Any dispute between
Customer and Seller as to which party is to bear the expense of such change or
correction shall be subject to the Paragraph entitled INTERCOMPANY REVIEW
BOARD. Any such dispute shall not relieve Seller from its obligation to make
such changes or corrections, or any future changes or corrections, in
accordance with this Paragraph, in accordance with the Paragraph entitled
WARRANTY or in accordance with the Paragraph entitled PRODUCT CHANGES, nor
shall such dispute be deemed a default under, or relieve any party from any
obligation under this Agreement; provided, however, that, in the case of such a
dispute, unless and until customer has paid Seller's charges for making such
changes or corrections billed to it in accordance with the terms of this
Agreement, Seller shall be relieved of its future obligations (but not the
obligation which gave rise to the dispute) to make such changes or corrections.
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<PAGE> 27
29. SOFTWARE LICENSE
(a) Upon transfer of title to a Product, Seller grants to Customer
a personal, non-transferable and non-exclusive license use the Software
associated with such Products for its own cellular business operations in the
Franchise Area and in any non-designated areas contiguous to the Franchise area
in connection with the Products with or for which the Software (the "Designated
Processor") or with Seller's equipment owned by a Related Operator. If the
Product becomes temporarily inoperative, Customer shall have the right to use
the Software on a back-up product until operable status is restored and
processing on the back- up product is completed.
(b) The provisions of this Paragraph are in addition to and
supplement the provisions of the Paragraph entitled USE OF INFORMATION.
(c) All Licensed Materials furnished by Seller and all copies
thereof made by Customer, including translations, compilations and partial
copies are the property of Seller.
(d) Except for any part of such Licensed Materials which is now
available to the general public or which later becomes available to the general
public by acts not attributable to Customer, Customer shall hold such Licensed
Materials in confidence, and shall not, without Seller's prior written consent,
disclose, provide or otherwise make available, in whole, or in part, any
Licensed Materials to anyone, except to its employees having a need-to-know.
Customer shall not make any copies of any Licensed Materials except as
necessary in connection with the rights granted hereunder, and shall reproduce
and include any copyright and proprietary notice of Seller on all such
necessary copies with warning that the Licensed Materials are subject to
restrictions contained in an agreement between Seller and Customer and that
such materials are the property of Seller. Customer shall maintain records of
the number and location of all copies of the Licensed Materials. Customer
shall take appropriate action, by instruction, agreement or otherwise with the
persons permitted access to the Licensed Materials so as to enable Customer to
satisfy its obligations under this Agreement.
(e) When the Licensed Materials are no longer needed by Customer,
Customer shall return all copies of such materials to Seller or ensure that all
copies of documentation are destroyed and Software is erased from all media.
Upon Seller's request, Customer shall certify on a form to be provided by
Seller that such destruction or erasure has taken place.
(f) Limited Transferability:
(i) Where Customer elects to transfer Cellular Radio
Telecommunications Cell Sites and MTSO Products and
related Power and Transmission Products furnished
under this Agreement to a third party, and where such
Products will remain in place and operational for the
purpose of continuing to provide wireless
telecommunications service in the area for which such
Products were installed, or where Customer elects to
transfer Products to an Affiliate for reuse within
the Territory, Customer may transfer its right to use
the Licensed Materials, including Software, furnished
under this
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Agreement for Use with such Products without the
payment of any additional Software right-to-use
fee(s) by the transferee, except where feature or
size sensitive units are a factor, but only under the
following conditions:
(1) The right to use such Licensed Materials may
be transferred only together with the
Products with which Customer has a right to
use such Licensed Materials, and such right
to use the Licensed Materials shall continue
to be limited to Use with such Products;
(2) Before any such Licensed Materials shall be
transferred, Customer shall notify Seller of
such transfer and the transferee shall have
agreed in writing (a copy of which will be
provided to Seller) to keep the Licensed
Materials in confidence and to corresponding
conditions respecting use of Licensed
Materials as those imposed on Customer in
this Agreement; and
(3) The transferee shall have the same right to
Software warranty and Software maintenance
for such software as the transferor, provided
the transferee continues to pay the fees,
including recurring Software Update fees, if
any, associated with such Licensed Materials
or maintenance.
(ii) Except as provided in Subsection (a) immediately
preceding, and except as may otherwise in this
Agreement be provided expressly, Customer shall have
no right to transfer Licensed Materials furnished by
Seller under this Agreement without consent of
Seller. If Customer elects to transfer a Product
purchased under this Agreement for which it does not
under this Agreement have the right to transfer the
related Licensed Materials, Seller agrees that upon
written request of the transferee of such Product, or
of Customer, Seller shall not without reasonable
cause fail to grant the transferee a license to use
such Licensed Materials with the Products upon
Seller's then standard license terms and conditions,
including license fees.
30. SOFTWARE MODIFICATION REQUESTS:
Seller will evaluate any request by Customer that the Software
provided under this Agreement be modified or enhanced. At the conclusion of
such evaluation, Seller will advise Customer as to the feasibility of
developing the requested modification or enhancement. Should the request be
feasible and if Seller has resources available to commit to the development,
Seller will provide Customer with a price estimate, availability date, and
other pertinent information. Other terms and conditions for any such
modification or enhancement shall be agreed upon prior to the commencement of
work on the modification or enhancement, it being understood that Seller will
offer its then standard terms and conditions, if any, being offered to its
other customers.
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31. AVAILABILITY AND SUPPORT OF SOFTWARE FEATURES/UPDATES:
Seller agrees to make available to Customer, at Seller's Standard
Charges therefore, those additional Software features applicable to the Initial
Systems and other Products purchased under this Agreement which are developed
by Seller, has a right to and has elected to license to others and which Seller
has licensed to another cellular mobile carrier.
To the extent that Seller continues to provide an annual Software
Update Service for Cellular Radio Software furnished under this Agreement,
Seller shall offer to Customer at Seller's prices quoted in the then current
Autoplex Cellular Price Reference Guide, such annual Software Update service,
which when purchased, shall entitle Customer (i) to any and all Software
Updates (excluding those updates priced separately as Optional Features) for
Software furnished hereunder and (ii) to the warranty coverage for System
Software Updates described in the paragraph entitled WARRANTY. At the
effective date of this Agreement Seller is operating under a pricing policy
pursuant to which Customer's payment of Seller's fees for Software Updates
entitles Customer to receive, without payment of additional fees, new software
generic releases as they are issued from time to time. Nothing herein shall be
deemed to require Seller to continue this policy or to continue to offer an
annual Software Update service and, subject to any applicable rules concerning
general price increases, Seller shall be entitled to establish and administer
separate fees for such generic Software, but, in no such case where annual
Software Update Service is terminated shall Seller be relieved of any
obligation to repair, replace or refund for any warranty defect in Software or
Software Updates furnished to Customer, as provided in the Paragraph entitled
WARRANTY.
Seller agrees to maintain a standard, supported, generic version of
Software necessary for operation of Products furnished by Seller pursuant to
this Agreement for a period of not less than ten (10) years from the effective
date of this Agreement.
If Seller ceases to maintain a standard, supported, generic version of
any Software developed and furnished by Seller pursuant to this Agreement, and
such maintenance is not available from another entity, then Seller shall
furnish Customer, under a suitable confidentiality agreement, Seller's then
existing Software Source Code, Software development programs, and associated
documentation for such standard version to the extent necessary for customer to
maintain and enhance for its own Use the standard version of that Software for
which it has the right to Use.
32. PATENT INDEMNITY:
(a) Seller will defend all suits against customer alleging that
any Products, Software or Service furnished hereunder infringes any United
States patent, trademark, copyright, trade secret or other intellectual
property right and will indemnify and hold Customer harmless against all
damages and costs which by final judgments, settlement or award of arbitration
may be assessed against Customer on account of such-infringement; provided that
Seller (i) shall have prompt written notice of all claims of such infringement
and suits and full opportunity and authority to
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assume the sole defense of and to settle such suits, and (ii) shall be
furnished upon Seller's request all information and assistance available to
Customer for such defense. If said item is in any such suit held to constitute
infringement and the use of said item is enjoined, Seller will, at its sole
cost and expense, without adversely affecting the ability of the System to
perform in accordance with the Specifications, including, without limitation
those respecting service received by subscribers, billing, administration and
maintenance, at its option, either procure for Customer the right to continue
using said item; or replace it with a suitable non-infringing item; or modify
it so it becomes non-infringing; or, with consent of Customer, remove the item
and refund the purchase prices less a reasonable allowance for use, damage and
obsolescence, provided, however, that if the removal of the enjoined item
renders the System inoperable, or adversely affects the ability of the System
to perform in accordance with the Specifications, including, without
limitation, those respecting services received by subscribers, billing,
administration and maintenance, Seller shall also remove the System and refund
to Customer the amount paid therefor less a reasonable amount for use, damage
and obsolescence. Customer agrees to indemnify and save harmless Seller and
its suppliers and associated companies from all costs, expenses, liabilities
and claims for (i) infringement arising from adherence to specifications or
drawings which Seller is directed by Customer to follow and (ii) infringement
relating to use of said item in combination with another item not furnished by
Seller.
In exercising any of its options under this Paragraph 32 Seller shall
minimize disruption of Customer's use of the System.
(b) If Seller elects not to assume the sole defense of any such
claim, Seller shall reimburse Customer for its costs in defending such claim,
including reasonable attorney's fees.
(c) The liability of Seller and Customer with respect to any and
all infringements or claims of infringement shall be limited to the specific
undertakings contained in this Paragraph 32 and shall not be governed by the
Paragraph entitled CUSTOMER'S REMEDIES.
33. USE OF INFORMATION:
Information in whatever form recorded, which Seller may furnish
hereunder, or has furnished in contemplation of Agreement, and which bears a
legend restricting its use or dissemination, shall remain the property of
Seller. Seller grants Customers only the right to use such Information subject
to the following conditions. Unless Seller consents in writing, such
Information, except for any part thereof which is known to Customer free of any
obligation to keep in confidence, or which is made public through acts not
attributable to Customers, (a) shall be Created in confidence by Customers and
used by Customers only to install, operate and maintain the Products and
Software supplied hereunder, (b) shall not be reproduced or copied, in whole or
in part, except as necessary for use as authorized herein and (c) shall,
together with any copies thereof, be returned or destroyed when no longer
needed, or may, if in the form of Software recorded on an erasable storage
medium, be erased. Such Information may be disclosed to others solely for the
purpose of installing, operating and maintaining the material supplied
hereunder, provided such other person or entity agrees in writing (a copy of
which will be
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provided to Seller at its request) to the same conditions respecting use of
Information contained in this paragraph.
34. CUSTOMER'S REMEDIES:
(a) CUSTOMER'S EXCLUSIVE REMEDIES AND THE ENTIRE
LIABILITY OF SELLER AND ITS AFFILIATES AND THEIR
EMPLOYEES AND AGENTS FOR ANY CLAIM, LOSS, DAMAGE, OR
EXPENSE OF CUSTOMER OR ANY OTHER ENTITY ARISING OUT
OF THIS AGREEMENT, OR THE USE OR PERFORMANCE OF ANY
PRODUCT, LICENSED MATERIAL, OTHER ITEM, OR SERVICE,
WHETHER IN AN ACTION FOR OR ARISING OUT OF BREACH OF
CONTRACT, TORT, INCLUDING NEGLIGENCE INDEMNITY, OR
STRICT LIABILITY SHALL BE AS FOLLOWS:
(1) FOR DELAY IN THE COMPLETION OF INSTALLATION
OF SYSTEMS -- THE REMEDY SET FORTH IN THE
PARAGRAPH ENTITLED LIQUIDATED DAMAGES;
(2) FOR INFRINGEMENT -- THE REMEDY SET FORTH IN
THE PARAGRAPH ENTITLED PATENT INDEMNITY;
(3) FOR THE PERFORMANCE OF PRODUCTS, OTHER ITEMS,
SOFTWARE AND SERVICES, OR CLAIMS THAT THEY DO
NOT CONFORM TO A WARRANTY -- THE REMEDY SET
FORTH IN THE PARAGRAPH ENTITLED WARRANTY;
(4) FOR TANGIBLE PROPERTY DAMAGE AND PERSONAL
INJURY CAUSED BY SELLER'S NEGLIGENCE -- THE
AMOUNT OF DIRECT DAMAGE;
(5) FOR EVERYTHING OTHER THAN AS SET FORTH ABOVE
-- THE AMOUNT OF DAMAGES NOT TO EXCEED
$2,000,000 PER CLAIM.
(b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT
(OTHER THAN SUBSECTION (a) IMMEDIATELY PRECEDING AND
ANY OTHER EXPRESS REMEDY SET FORTH IN THE AGREEMENT),
NEITHER PARTY NOR ITS AFFILIATES OR THEIR EMPLOYEES
OR AGENTS SHALL BE LIABLE FOR ANY INCIDENTAL,
INDIRECT, OR CONSEQUENTIAL DAMAGE OR LOST PROFITS,
REVENUES OR SAVINGS ARISING OUT OF THIS AGREEMENT, OR
THE USE OR PERFORMANCE OF ANY PRODUCT, LICENSED
MATERIALS, OTHER ITEMS, OR SERVICES, WHETHER IN AN
ACTION FOR OR ARISING OUT OF
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BREACH OF CONTRACT, TORT, INCLUDING NEGLIGENCE, OR
STRICT LIABILITY. THIS SUBSECTION (b) SHALL SURVIVE
FAILURE OF AN EXCLUSIVE OR LIMITED REMEDY.
(b) Customer shall give Seller prompt notice of any
claim. Any action or proceeding against Seller must
be brought within the earlier of twenty-four (24)
months after Customer has knowledge of the existence
of a cause of applicable period for limitation of
actions.
35. RELEASES VOID:
Neither party shall require waivers or releases of any personal rights
from representatives of the other in connection with visits to its premises and
both parties agree that no such release or waivers shall be pleaded by them or
third persons in any action or proceeding.
36. NON-WAIVER:
No course of dealing or failure of either party to strictly enforce
any term, right or condition of this Agreement shall be construed as a waiver
of such term, right or condition.
37. TERMINATION FOR CONVENIENCE:
Customer may, upon written notice to Seller, terminate any order or
portion thereof, except with respect (i) to the Initial System, or (ii) to
Products or Licensed Materials that have already been shipped and Services that
have already been performed.
For those Products and Licensed Materials not shipped but considered
stock items, Customer agrees that it will pay Seller an order termination fee
equal to one percent (1%) of the price or license fee for such items.
For those Products and Licensed Materials not shipped and considered
customized or non-stock items, customer agrees to pay a termination fee based
upon Seller's incurred expenses (after adjustment for recoveries and/or salvage
value, if any) including associated general and administrative .expenses.
Customer may issue "holds" on orders or suspend performance under this
Agreement, in whole or in part, with Seller's prior written consent and upon
terms that will compensate Seller for any loss, damages, or expenses actually
incurred.
38. NOTICES AND OTHER COMMUNICATIONS:
Any notice or other communication hereunder shall be in writing and
shall be deemed to have been sufficiently given or made when sent by United
States mail, first class postage return receipt requested, by hand delivery, by
overnight delivery service, or by express mail service, to Seller and the
Customer at the addresses set forth at the beginning of the Agreement or at
such
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changed address as either of them shall have specified by written notice to the
other, with a copy in the case of Customer or Buyers to Rubin Baum Levin
Constant & Friedman, 30 Rockefeller Plaza, New York, New York 10112, Attn.
Barry A. Adelman, Esq., and William W. Hague, Esq., Markets Cellular Limited
Partnership, 11400 Southeast Eighth Street, Suite 445, Bellevue, Washington,
98004. In the case of the parties other than Seller, notice to MCLP or MCII
shall serve as notice to all such parties.
39. ASSIGNMENT:
Neither any Buyer nor any Customer shall assign any right or interest
under this Agreement or delegate any work or other obligations to be performed
or owed by such party under this Agreement without the prior written consent of
Seller, which consent shall not be unreasonably withheld or delayed. Any
attempted assignment or delegation in contravention of the above provisions
shall be void and ineffective. Customer agrees that its sole remedy in any
challenge to withholding of consent by Seller shall be an injunction requiring
Seller to grant such permission.
Seller shall have the right to assign this Agreement and to assign its
rights and delegate its duties under this Agreement either in whole or in part
at any time and without Customer's consent to any present or future Affiliate
(as defined under the federal securities laws) of Seller, or any combination of
the foregoing. Seller shall provide written notice of any such assignment.
Any assignment by Seller pursuant to this Clause 39 shall not relieve
Seller from any obligations or duties under this Agreement unless Customer,
upon being assured as to the financial viability of Seller's assignee, consents
to Seller being released and discharged, such consent not to be unreasonably
withheld by Customer.
Upon the acceptance by Seller of any assignment by Customer under this
clause and assumption of the duties under this Agreement by the assignee and
the payment in full of all amounts due and owing under this Agreement or any
related Credit Agreement between Customer and an Affiliate of Seller, the
assignor shall be released and discharged, to the extent of the assignment,
from all further duties under this Agreement.
40. TRAINING:
Seller will make available Seller's standard training for Customer's
personnel in the planning for, operation and maintenance of Products and
Software furnished hereunder in accordance with Seller's Standard Charges and
other standard terms and conditions at Seller's training locations or as
mutually agreed.
Seller shall appoint a single point of contact for Customer to make
arrangements for training and shall make every reasonable effort to accommodate
Customer's personnel in classes as requested. In the event that selected
classes are full or have been canceled, Seller agrees to provide classes for
Customer's personnel only at times to be mutually agreed, provided that
Customer commits that at least six (6) persons will attend each such special
class.
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41. FORCE MAJEURE
Except with respect to Customer's obligation to make timely payments
hereunder neither party shall be held responsible for any delay or failure in
performance to the extent that such delay or failure is caused by Force
Majeure.
42. CONTINUING PRODUCT SUPPORT-REPAIR PARTS AND SERVICES:
Seller shall notify customer, usually at least one (1) year, before
Seller discontinues accepting orders for a Seller's Manufactured Product sold
under this Agreement. Upon receipt of such notice with respect to a Product,
Customers shall have the opportunity to place orders for its reasonably
anticipated future needs for such Product. Where Seller offers a functionally
equivalent Product for sale, the notification period may vary.
In addition to repairs provided for under Product Warranty, Seller
agrees to offer repair Services and Repair Parts in accordance with Seller's
repair Services and Repair Parts practices and terms and conditions then in
effect, for Seller's Manufactured Products furnished pursuant to this
Agreement. Such repair Services and Repair Parts shall be available while
Seller is manufacturing or stocking such Products or Repair Parts, but in no
event less than five (5) years after such Product's discontinued availability
date. Seller may use either new, remanufactured, reconditioned, refurbished,
or functionally equivalent Products, Repair Parts or parts in the furnishing of
repairs or replacements under this Agreement.
Seller will give Customer reasonable notice of its intention to
discontinue manufacture of such Repair Parts so that Customer may order
additional parts for inclusion in its inventory, provided that nothing in this
sentence shall limit Seller's obligation under the first two paragraphs above.
In addition, when Seller ceases to supply such parts and a functional
equivalent has not been designated, it will attempt to locate another source of
supply for customer. If no other source of supply is available, then Seller
shall provide Customer with non-exclusive royalty-free, perpetual licenses to
use intellectual property, to the extent Seller can grant such licenses, so
that Customer will have sufficient information to obtain functionally
equivalent parts from other sources.
43 . EQUIPMENT COMPLIANCES:
(a) Seller represents that Products furnished hereunder shall
comply, to the extent required, with applicable federal and state laws, rules
and regulations pertaining to the Products, including without limitation, the
requirements of part 22 of the Federal Communications Commission's Rules and
Regulations pertaining to cellular radio, in effect upon delivery of such
Products. In addition, Seller represents that the Products furnished hereunder
shall comply, to the extent required, with requirements of Subpart J of part 15
of the Federal Communications Commission's Rules and Regulations, in effect
upon delivery of such Products, including those sections concerning the
labeling of such Products and the suppression of radio frequency and
electromagnetic radiation to specified levels. No undertaking of Seller
related to this Paragraph
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shall apply with respect to harmful interference caused by (1) installation,
repair, modification or change of Products or Software other than in accordance
with Seller's specifications by other than Seller or Seller's agents, employees
or subcontractors; (2) Products being subjected to misuse, neglect, accident or
abuse by other Seller or Seller's agents, employees or subcontractors; or (3)
Products or Software being used in a manner not in accordance operating
instructions or in an unsuitable installation environment.
(b) Seller assumes no responsibility under this Section for items
designated or supplied by Customer, including but not limited to antennas,
power equipment and batteries. The acceptance or certification of such items
shall be the sole responsibility of Customer.
44. SYSTEM DOCUMENTATION:
Seller will make one set of documentation available to Customer (e.g.,
one set of ECP documentation for each ECP site, one set of DCS documentation
for each DCS site, and one set of Cell Site documentation for each Cell Site)
which documentation shall be sufficient to acquaint Customer's personnel with
the Initial Systems and any further systems Seller may provide under this
Agreement, and will provide information sufficient to specify, order, operate,
and maintain such systems. In addition, Seller will make available to MCLP or
MCII one additional copy of the ECP documentation and one additional copy of
the DCS documentation, which the recipient Buyer shall be free to maintain at a
location of its choosing. Additional copies of the documentation shall be
available at Seller's Standard Charges.
45. PUBLICITY:
Each party shall submit to the other proposed copy of all Advertising
wherein the name, trademark, code, specification or service mark of the other
party or its Affiliates is mentioned; and neither party shall publish or use
such Advertising without the other's prior written approval. Such approval
shall be granted as promptly as possible (usually within ten (10) days), and
may be withheld only for good cause. The parties acknowledge that the
obtaining of prior approval for each such use may be an administrative burden.
At the request of either party, Customer and Seller will establish mutually
acceptable guidelines that will constitute pre-authorization for the uses
specified therein. Such guidelines shall be subject to change from time to
time at the reasonable request of either party.
46. CHOICE OF LAW:
Except as provided in the Paragraph entitled RESOLUTION OF DISPUTES,
the construction, interpretation, and performance of, and all transactions
under, this Agreement shall be governed by the law of the State of New York
except for the rules of Conflicts of Law.
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47. SURVIVAL OF OBLIGATIONS AND REPRESENTATIONS:
The respective obligations and representations of Customer and Seller
under this Agreement which by their nature would continue beyond the
termination, cancellation, or expiration hereof, shall survive termination,
cancellation or expiration hereof.
48. PRODUCT IMPROVEMENTS:
Seller agrees to use reasonable efforts to continue to improve its
Products and to continue to create new cellular products and services
consistent with state-of-the-art technology and customer needs, including those
of Customer.
49. TECHNICAL SERVICE:
During the term of this Agreement Seller shall offer to Customer, at
Seller's Standard charges, access to emergency technical diagnostic assistance
Service, twenty-four (24) hours per day. Such Service is currently provided at
no cost to the Customer. Seller agrees that during the term of this Agreement
that it shall not commence to charge Customers for such Service unless and
until it generally commences to charge other of Seller's customers in
comparable circumstances. Special, unusual or customized services may be
billable, depending on the nature of the request.
50. INSURANCE:
Seller agrees to maintain, until the Initial Systems or other
Products, Software and Services being furnished by Seller on a furnish and
install basis have been Accepted by Customer, the following insurance coverage
as well as all other insurance required by law in the jurisdiction where the
work is performed: (1) Worker's Compensation and related insurance as required
by law; (2) Employer's liability insurance with a limit of at least $1,000,000
for each occurrence; (3) comprehensive general liability insurance, including
contractual liability and products and completed operations coverage with a
limit of at least $5,000,000 per occurrence, and comprehensive motor vehicle
liability insurance with a limit of at least $1,000,000 for bodily injury,
including, death, to any one person, $1,000,000 for each occurrence of property
damage and $1,000,000 for any one occurrence. Seller shall have the option
where permitted by law to self-retain any or all of the foregoing insurance.
51. SEVERABILITY:
If any Paragraph, or clause thereof, in this Agreement shall be held
to be invalid or unenforceable in any jurisdiction in which this Agreement is
being performed, then the-meaning of such Paragraph or clause shall be
construed so as to render it enforceable, to the extent feasible; and if no
feasible interpretation would save such Paragraph or clause, it shall be
severed from this Agreement and the remainder shall remain in full force and
effect. However, in the event such Paragraph or clause is considered an
essential element of this Agreement, the parties shall promptly negotiate a
replacement thereof.
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52. LIQUIDATED DAMAGES:
(a) Inasmuch as Seller's failure to deliver and install any of the
six (6) Initial Systems (referred to individually herein as a "System") and
submit a notice of completion for the System as defined- in the Paragraph
entitled ACCEPTANCE OF INSTALLATION within the time specified in the Paragraph
entitled DELIVERY AND INSTALLATION SCHEDULE FOR THE SYSTEMS will cause damage
to Customer, which damage will be difficult if not impossible to ascertain and
prove, the Customer and Seller agree that Seller shall pay and the Customer
shall be entitled to receive as liquidated damages and not as a penalty the
amounts set forth below.
(b) The amount of liquidated damages for complete inoperability of
a System shall be an amount equal to four- thirteenths of one percent (4/13%)
of the contract price for the System for each full week of delay up to a
maximum of eight percent (8.0%) of such price. For purposes of this paragraph,
complete inoperability shall mean the inability to utilize all of the Cell
Sites agreed by the parties to be installed as part of such System. For
purposes of applying this paragraph to an Initial System, only one-sixth (1/6)
of the contract price for the executive cellular processor and the IMS serving
such system shall be included in such contract price.
The amount of liquidated damages for partial inoperability of a System
shall be an amount equal to four-thirteenths of one percent (4/13%) of the
contract price of the inoperable part, for each full week of delay up to a
maximum of eight percent (8.0%) of the price of such inoperable part; provided,
however, no liquidated damages shall be due under this paragraph if at least
the number of Cell Sites listed in Attachment B for such System are operable
and accepted. For purposes of this paragraph, partial inoperability of a
System shall mean the inability to utilize individual Cell Sites contained in
the System configuration.
If Seller shall fail to deliver and install a System and submit a
notice of completion within the time specified in this Agreement, or any
extension thereof, and if Customer shall notify Seller in writing after the
specified time of its intent to assess liquidated damages, and if Seller fails
to cure such condition by completing delivery and installation within thirty
(30) days of receipt of such notice, Seller shall pay to Customer liquidated
damages for any loss or damage sustained by Customer, the amount of which shall
be determined as set forth above.
(c) Seller shall not be liable or responsible hereunder for any
delay to the extent it is caused by (1) Customer changes, revisions or
modifications or special requirements of Customer not communicated to Seller,
with respect to the Initial Systems, prior to signing this contract or, with
respect to subsequent purchases under this Agreement, prior to Seller's
acceptance of the order(s) related thereto; (2) Customer changes in scheduled
dates; (3) failure of Customer to meet its responsibilities under the Paragraph
entitled DELIVERY AND INSTALLATION SCHEDULE FOR SYSTEMS; (4) action of Customer
or its employees or agents; or (5) reasons of Force Majeure.
(d) This provision for liquidated damages is intended to be and
shall be in lieu of any other remedy and any other claims for damages to which
Customer might otherwise be entitled
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for Seller's failure to timely deliver and install the Initial Systems (or any
System thereof), provided, however, nothing herein shall bar-Customer from
canceling its order for a System in the case of complete inoperability or the
involved Cell Sites in the case of partial inoperability, as the case may be,
in the event that under subclause (b) of this paragraph, Seller's delay exceeds
the period which will result in the maximum amount of liquidated damages.
(e) In the event that Seller shall accept an order under this
Agreement for the provision of Products to be used by Customer to provide
wireless telecommunications services in one or more Franchise Areas in which
Seller's Products are not then being so used, then, whether or not such
Products are interconnected with the Initial Systems, all Cell Site Products
and, if any, DCS Products being installed to serve the same Franchise Area
(together with all Cell Sites Products installed and interconnected with any
such DCS for the purpose of serving other areas), together with the executive
cellular processor (or allocable piece thereof), if any, contemporaneously
installed to serve such DCS and/or Cell Site Products, shall comprise a System
for purposes of the application of the foregoing provisions of this Paragraph
52.
53. RESOLUTION OF DISPUTES:
Any dispute regarding any right, obligation, duty or liability arising
out of the provisions of this Agreement, shall be referred upon written demand
by either party or Seller within sixty (60) days, to the Intercompany Review
Board.
The Intercompany Review Board shall be a standing committee composed
of two members each from Seller and Customer. Each party shall notify the
other of the name, title and-address of its representatives appointed to the
Intercompany Review Board.
Upon resignation or retirement of any member from the Board, or
replacement of any member of the Board, the party which placed the member on
the Board shall immediately notify the other of the name, title and address of
that member's replacement. Any reference herein to the Board, or members of
the Board, shall include the above designee of the members.
Upon referral of any dispute to the Board, the members of the Board
may meet in person or by telephone, or confer by any other means to resolve the
dispute. A formal resolution from the Board must be in writing and signed by
all four members.
If a controversy referred to the Board is not resolved within sixty
(60) days of such referral, either party may request initiation of mediation of
the controversy under the Commercial Mediation Rules of the American
Arbitration Association. A party receiving such request shall not be required
to consent to mediation, but each party hereby represents that it will be its
policy to act in good faith and genuinely to consider mediation.
If the controversy has not been resolved within sixty (60) days of the
initiation of mediation, or if the notified party is not willing to engage in
mediation, which may be inferred by the notifying party if the notified party's
written concurrence is not received within thirty (30) days, such controversy
shall be resolved by arbitration pursuant to this Paragraph and the then
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current rules and supervision of the American Arbitration Association. The
duty to arbitrate shall extend to any officer, employee, agent, Affiliate or
Subsidiary making or defending any claim which would otherwise be arbitrable
hereunder. The arbitration shall be held in New York City before a single
arbitrator who is knowledgeable in commercial business transactions and
cellular technology and who is acceptable to both parties. The arbitrator's
decision and award shall be final and binding and may be entered in any court
having jurisdiction thereof. The arbitrator shall not have the power to award
punitive or exemplary damages. Issues or arbitrability shall be determined in
accordance with the federal substantive and procedural laws.
Each party shall bear its own attorney's fees associated with any
mediation or arbitration instituted hereunder and other costs shall be borne as
provided by the applicable rules of the American Arbitration Association;
provided, however, if court proceedings to stay litigation or compel
arbitration are necessary, the party who unsuccessfully opposes such
proceedings shall pay all associated costs, expenses and attorney's fees which
are reasonably incurred by the other party.
The procedures specified in this Paragraph shall be the sole and
exclusive procedures for the resolution of disputes between the parties arising
out of or relating to this Agreement; provided, however, nothing herein shall
be deemed to require arbitration of matters deemed not arbitrable under federal
law, or to prohibit a party from seeking a preliminary injunction or other
preliminary judicial relief if in such party's judgment such action is
necessary to avoid irreparable damage. Despite any such action, the parties
will continue to participate in good faith in the procedures specified herein.
All applicable statutes of limitation shall be tolled while the procedures
specified .in this clause are pending, and nothing herein shall be deemed to
bar any party from taking such action as may be required to effectuate such
tolling.
Except as provided expressly in this Paragraph, nothing in this
Agreement shall in any way affect or limit the rights of the parties to pursue
remedies at law or in equity.
54. EXECUTION IN COUNTERPARTS:
This Agreement may be executed in counterparts each of which when so
executed and delivered shall be an original, but all such counterparts shall
constitute one and the same instrument.
55. ENTIRE AGREEMENT:
The terms and conditions contained in this Agreement, any subordinate
agreements, and orders accepted pursuant to this Agreement or any subordinate
agreements supersede all prior oral or written understandings between the
parties with respect to the subject matter thereof and
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<PAGE> 40
constitute the entire agreement of the parties with respect to such subject
matter. Such terms and conditions shall not be modified or amended except by a
writing signed by authorized representatives of both parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives.
AMERICAN TELEPHONE AND
TELEGRAPH COMPANY
Dated:
--------------------
By: /s/
----------------------------------
Title: Chairman and CEO
MCII GENERAL PARTNERSHIP
Dated: March 17, 1993
By: MARKETS CELLULAR LIMITED
PARTNERSHIP,
General Partner
By: PN CELLULAR LIMITED
PARTNERSHIP, General Partner
By: PN CELLULAR, INC.,
General Partner
By: /s/
-----------------------------------
Title: Chairman and CEO
MARKETS CELLULAR LIMITED
PARTNERSHIP
Dated: March 17, 1993
By: PN CELLULAR LIMITED PARTNERSHIP,
General Partner
By: PN CELLULAR, INC.,
General Partner
By: /s/
-----------------------------------
Title: Chairman and CEO
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