Exhibit 10.2
[**] - CERTAIN INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO
A CONFIDENTIAL TREATMENT REQUEST UNDER RULE 24B-2 OF THE COMMISSION
FIRST AMENDMENT TO AGREEMENT LGC-A65-D
This First Amendment to Agreement LGC-A65-D ("Amendment") is made
effective as of the ___ day of July, 1996 ("Effective Date") by and between
Lucent Technologies Inc., a Delaware corporation, having an address at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Company") and BroadBand
Technologies, Inc., a Delaware corporation, having an address at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Supplier").
W I T N E S S E T H:
WHEREAS, Supplier and Company's predecessor-in-interest, AT&T Corp.,
entered into a certain Agreement LGC-A65-D dated as of November 1, 1995 (the
"Agreement") which sets forth terms and conditions governing the purchase and
sale of Supplier's products and services between the parties; and
WHEREAS, by Notice of Assignment dated February 5, 1996, AT&T Corp. has
assigned to Company all of its right, title and interest in and to the Agreement
effective as of February 1, 1996; and
WHEREAS, Company and ▇▇▇▇ Atlantic Network Services, Inc. ("▇▇▇▇
Atlantic") have entered into a certain FSN Procurement Agreement, BC13760, dated
as of the Effective Date (the "FSN Agreement"), whereby Company agrees to
provide to ▇▇▇▇ Atlantic and its affiliated entities certain products and
services for a switched digital video system to be deployed by ▇▇▇▇ Atlantic;
and
WHEREAS, the products and services to be furnished by Company to
Supplier under the FSN Agreement include, without limitation, certain products
[and services] to be provided by Supplier to Company; and
WHEREAS, the parties desire to modify the Agreement and set forth in
this Amendment terms and conditions under which Supplier shall sell to Company
and Company may purchase from Supplier those products [and services] which are
to be furnished to ▇▇▇▇ Atlantic under the FSN Agreement.
NOW, THEREFORE, in consideration of the mutual promises herein set
forth and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the parties, Supplier and Company agree as
follows:
1. SCOPE OF AMENDMENT
1.1 Except as mutually agreed by the parties in writing, this Amendment
shall apply only to transactions between Supplier and Company for the purchase
and sale of Material (as defined in Section 2 below) and related services to be
provided to ▇▇▇▇ Atlantic or the ▇▇▇▇ Atlantic Affiliates under the FSN
Agreement. Such Material and related services are hereby offered for sale by
Supplier and may be purchased by Company as required for the FSN Agreement in
accordance with the terms, conditions, and specifications of the Agreement, as
modified and amended by this Agreement. In the event of a conflict between the
terms and conditions of the Agreement and the terms and conditions of this
Amendment, the parties agree that the terms and conditions of this Amendment
shall supersede and prevail.
1.2 Except to the extent provided in Article 4, this Amendment is a
non-commitment agreement and Materials shall be furnished by Supplier on an
as-ordered basis. Except as provided in Article 4 of this Amendment, the parties
agree that nothing contained in this Amendment shall be deemed a commitment on
behalf of Company to purchase from supplier any minimum quantities or dollar
value of Materials; it being expressly understood and agreed that any obligation
of Company to purchase Materials under this Agreement shall be contingent upon
the corresponding purchase by ▇▇▇▇ Atlantic of such Materials from Company under
the FSN Agreement.
1.3 Supplier agrees that all Material to be sold to Company under this
Amendment shall comply in all respects with the specifications attached to the
Agreement as Attachment A.
1.4 The parties acknowledge that Company has delivered to Supplier a
full and complete copy of the FSN Agreement. Supplier agrees to treat such copy
in accordance with the confidentiality and non-disclosure provisions of this
Amendment.
2.0 DEFINITIONS
2.1 Except as expressly defined in this Amendment, all capitalized
terms shall have the meaning ascribed to them in the Agreement. For all purposes
of this Amendment, the term "Material" shall mean "MATERIAL" under the
Agreement.
2.2 For purposes of this Amendment, the following definitions shall
apply:
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(a) "Access Subnetwork Equipment" or "ASE" means the SLC(R)-2000 Access
System with FLX* Switched Digital Video to be supplied by Company with the
capability for switched digital video under the FSN Agreement.
(b) "Additional Software" means all Software to be provided under this
Amendment beyond Release 2.1.
(c) "Alternative Performance Payment" means the amount payable by ▇▇▇▇
Atlantic to Company under the FSN Agreement if ▇▇▇▇ Atlantic fails to fulfill
its purchase commitment to Company thereunder or if ▇▇▇▇ Atlantic terminates the
FSN Agreement under certain circumstances.
(d) "▇▇▇▇ Atlantic Affiliate" means an entity that owns, directly or
indirectly, a greater than fifty percent (50%) voting interest in ▇▇▇▇ Atlantic
("Parent"), or any entity in which ▇▇▇▇ Atlantic or its Parent owns, directly or
indirectly, at least a fifty percent (50%) voting interest. The term shall also
include those entities in which ▇▇▇▇ Atlantic or its Parent own, directly or
indirectly, a less than fifty percent (50%) but more than twenty percent (20%)
voting interest ("Minority Owned Affiliates") and that are listed in Appendix J
to the FSN Agreement, as modified and amended from time to time.
(e) "▇▇▇▇ Atlantic Region" means any and all of the areas of New
Jersey, Delaware, Pennsylvania, Maryland, West Virginia, Virginia, and the
District of Columbia in which ▇▇▇▇ Atlantic or any ▇▇▇▇ Atlantic Affiliate
provides service at any time during the Term.
(f) "Beta Test Date" means ▇▇▇▇ Atlantic's initial deployment of
hardware and software under the FSN Agreement to a limited number of subscribers
to test the FSN. The Beta Test Date is targeted for April 1997, although this
date may be postponed by ▇▇▇▇ Atlantic in its sole discretion.
(g) "Circuit Packs" means any or all of the SPQ - 909 Quad POTS Channel
Units, VTR-4 or Extended Range VTR-4 Video Cards, VTR-8 or Extended Range VTR-8
Video Cards, SPQ - 494 Quad ISDN Channel Units, and SPQ - 442 Quad ESPOTS
Channel Units identified in Appendix A of the FSN Agreement.
(h) "Code Corrections" means corrections to Software malfunctions to
bring Software into conformance with its specifications.
(i) "Companion Agreement" means that certain Procurement
Agreement dated as of July 1, 1996 between ▇▇▇▇ Atlantic and Supplier
for the purchase and sale of any DBP 2515 Digital Broadcast
Processors, ANI 2514
-------------------------------------
* FLX is a registered trademark of Supplier.
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ATM Network Interface Quad 3 UNI-Directional and 1 Bi-Directional cards, ANI
2514 ATM Network Interface Quad Uni-Directional cards, VTR-4 2542 Video
Transmitters/Receivers, VTR-8 2542 Video Transmitters/Receivers, VCF 2543 Filler
Cards, and Baluns (and any successor equipment) that ▇▇▇▇ Atlantic the ▇▇▇▇
Atlantic Affiliates may require.
(j) "Designated Processor" means hardware platforms used in the FSN
with which Software is compatible.
(k) "Event" means (i) actual failures or adverse functioning of
products resulting in the disruption of network access and/or the services
provided by an ASE or equivalent system, to customers of ▇▇▇▇ Atlantic, Company,
Supplier, or any other purchaser or user of the products in the United States of
America, for a period of thirty (30) uninterrupted minutes per occurrence; or
(ii) actual defects in design and/or manufacturing of the products which are
known by Company and/or Supplier regardless of whether such actual defects in
design and/or manufacturing have resulted in any actual malfunctions or failures
of the products, and which have the ability of causing the disruption of network
access and/or the services provided by an ASE, or equivalent system, to
customers of ▇▇▇▇ Atlantic, Company, Supplier, or any other purchaser or user of
the products in the United States of America for a minimum period of thirty (30)
uninterrupted minutes per occurrence. For purposes of this definition,
"products" means hardware and software sold by Company and Supplier under the
FSN Agreement and this Amendment, respectively, and other items that are
manufactured and/or sold by Company or Supplier which are the same as, or
functionally or operationally similar to, such hardware and software.
(l) "FSA Date" or "First Service Application Date" means ▇▇▇▇
Atlantic's initial commercial deployment of hardware and software to provide
telephony and/or video services over the FSN. The FSN date is targeted for two
(2) months after the Beta Test Date.
(m) "HDT" means a host digital terminal as diagrammed in Appendix B
of the FSN Agreement.
(n) "Headcount Year" is a measure of services provided by one or more
engineers or programmers that are in the aggregate equivalent to those that
would be provided by a dedicated full-time programmer or engineer working two
hundred twenty (220) days.
(o) "Homes Passed" shall have the meaning set forth in Section 4.5.
(p) "Licensed Materials" means the Software and Related Documentation
for which licensed are granted by Supplier to Company under this Amendment.
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(q) "NYNEX Region" means any and all of the areas of New York,
Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, and Maine.
(r) "ONU" means an optical network unit as diagrammed in Appendix B of
the FSN Agreement.
(s) "Related Documentation" means materials useful in connection with
Software and materials required to engineer, operate, maintain, and install
Software such as, but not limited to, programs, translations and parameters,
listings, user manuals, methods, practices, job aides, flow charts, installation
and other instructions, logic diagrams and listings, program descriptions and
specifications.
(t) "Software" means computer programs, procedures, and rules designed
to make use of and to extend the capabilities of hardware (including, but not
limited to, control programs, operating system programs, processing programs,
diagnostic programs, audit programs, system measurement programs and tools,
special system programs, authoring tools, and documentation used to maintain,
describe and use all such programs) offered for license by Supplier hereunder.
The term shall not include Source Code format unless otherwise specified herein.
The term includes "Additional Software."
(u) "Software Enhancement" means any change in Software that improves
the basic function of the Software.
(v) "Software Upgrade" means improvements in Software that relate to
operating performance but do not change the basic function of the Software.
(w) "Source Code" means any version of Software incorporating high
level or assembly language that generally is not directly executable by a
processor.
(x) "Technical Information" shall include all Source Code, object code,
and Related Documentation for the operating system and any other Software used
in the Material or Parts, and all design drawings, materials/parts lists, and
specifications used in the design and manufacture of Material or Parts, as well
as all corrections, updates, and enhancements to such Software and other
information. "Technical Information" shall also include: (i) manufacturing
drawings and specifications including Circuit Pack schematics; (ii)
manufacturing drawings and specifications covering special tooling and operation
thereof; (iii) a detailed list of all commercially available Parts and
components purchased by Supplier on the open market disclosing the part number,
name and location of the supplier; and (iv) repair specifications and test
procedures, as available.
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(y) "Term" shall have the meaning set forth in Section 3.1.
(z) "Video Equipped HDTs" means that at least one or more of each of
the following has been shipped to ▇▇▇▇ Atlantic by Lucent or BBT for use with an
HDT: DBP 2515 Digital Broadcast Processor, ANI 2514 ATM Network Interface Quad 3
UNI-Directional and 1 Bi-Directional card, ANI 2514 ATM Network Interface Quad
Uni-Directional card and SCP 2521 Shelf Control Processor, or any successor
equipment.
3.0 TERM OF AMENDMENT AND AGREEMENT
3.1 This term ("Term") of this Amendment shall commence as of the
Effective Date and shall be coterminous with the FSN Agreement, which is
currently in effect until December 31, 2002. For purposes of this Amendment
only, the parties agree that the term of the Agreement as stated in the clause
entitled "Agreement Effective Period" thereof, shall be extended to be
coterminous with the FSN Agreement; it being the intent of the parties that the
Agreement and this Amendment remain in effect for so long as the FSN Agreement
is in effect. To the extent the term of the FSN Agreement is extended beyond
December 31, 2002, this Amendment and the Agreement shall be correspondingly
extended upon the mutual written agreement of the parties; provided, however,
that any such extension of the Agreement shall only be for purposes of the
transactions contemplated in this Amendment.
3.2 Notwithstanding anything contained in Section 3.1 to the contrary,
this Amendment shall terminate (a) upon the expiration or earlier termination of
the FSN Agreement for any cause or reason, or (b) in accordance with the
provisions of Section 6.1 of this Amendment. In the event this Amendment
terminates pursuant to the preceding sentence, the term of Agreement shall be as
originally stated in the clause entitled "Agreement Effective Period" and the
Agreement may remain in effect in accordance with the terms and conditions set
forth therein.
4.0 PURCHASE OBJECTIVES
4.1 Subject to the terms and conditions of the [******] Agreement, ▇▇▇▇
Atlantic has committed to purchase during the Term, through itself and the ▇▇▇▇
Atlantic Affiliates, certain hardware and software that includes Video Equipped
HDTs in sufficient volume to exceed [******************************************]
(as defined in Section 4.5) within the ▇▇▇▇ Atlantic Region. ▇▇▇▇ Atlantic may
also purchase in excess of the foregoing amounts under the [******] Agreement.
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4.2 Subject to the terms and conditions of the FSN Agreement, ▇▇▇▇
Atlantic has agreed that until the earlier of (a) [***************], or (b) the
date on which ▇▇▇▇ Atlantic and the ▇▇▇▇ Atlantic Affiliates have exceeded
[**********************************] within the ▇▇▇▇ Atlantic Region (the
"Requirement Date"), ▇▇▇▇ Atlantic and the ▇▇▇▇ Atlantic Affiliates will
purchase from Company under the FSN Agreement and/or Supplier under the
Companion Agreement all Circuit Packs required by ▇▇▇▇ Atlantic and the ▇▇▇▇
Atlantic Affiliates for deployment of the ASE in the ▇▇▇▇ Atlantic Region.
4.3 Subject to the provisions of Article 6, to the extent (a) the
commitment and agreement of ▇▇▇▇ Atlantic referenced is Sections 4.1 and 4.2
above includes Material, and (b) ▇▇▇▇ Atlantic actually purchases such Material
from Company under the FSN Agreement, Company agrees to purchase all such
Material from Supplier under this Amendment. To the extent ▇▇▇▇ Atlantic or the
▇▇▇▇ Atlantic Affiliates actually purchase Circuit Packs from Company after the
Requirement Date under the FSN Agreement and subject to the provisions of
Article 6, Company also agrees to purchase such Circuit Packs from Supplier
under this Amendment.
4.4 In the event ▇▇▇▇ Atlantic terminates the FSN Agreement and pays to
Company the Alternative Performance Payment required under the FSN Agreement,
Company agrees to pay to Supplier the amount of such Alternative Performance
Payment which is equal to: [**********************] the difference between the
▇▇▇▇ Atlantic commitment set forth in Section 4.1 and Actual Video Purchases (as
defined in the [******] Agreement); and (b) [*****************] the difference
between [******************] and Actual Purchases (as defined in the [******]
Agreement). Such payment to Supplier shall be made by Company within thirty (30)
days after Company's receipt of the Alternative Performance Payment from ▇▇▇▇
Atlantic.
4.5 With respect to purchases of Material, it is understood and agreed
that each HDT is designed to service multiple ONUs, and that each ONU, when
deployed and equipped with the appropriate Circuit Packs, has the capability to
provide telephone, video, telephone and video or other telecommunications
services to living units made up of single family dwellings, single residences
in multi-family dwellings, and single business locations. When Company has
shipped to ▇▇▇▇ Atlantic or any ▇▇▇▇ Atlantic Affiliate an
[*******************************************], ▇▇▇▇ Atlantic shall be deemed to
have passed the number of homes equal to the living unit engineered capacity of
that [******]; provided that a sufficient quantity of [******] has been shipped
for use with such [*******************].
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5.0 LICENSE GRANTS
5.1 Subject to Company's payment of the applicable fees and charges
required under this Amendment, Supplier grants to Company a nonexclusive,
perpetual, fully paid-up, royalty-free license to reproduce and use the Licensed
Materials, and to sub-license and authorize ▇▇▇▇ Atlantic, ▇▇▇▇ Atlantic
Affiliates, other entities purchasing Material under the FSN Agreement, and
their end-users of the Materials to use the Licensed Materials. Software
provided in object code form shall not be modified, decompiled, disassembled,
reverse-engineered. Supplier shall provide with each copy of the Software
specific installation and applications guidelines describing the procedures
necessary to create additional authorized implementations on a new Designated
Processor to increase the capacity of Designated Processors on multi-processor
computer systems. Supplier will exert reasonable efforts to ensure that all
Software provided by Supplier is delivered to Company with an appropriate
proprietary legend so as to assist ▇▇▇▇ Atlantic in the protection of such
Software.
5.2 Notwithstanding anything contained in the Agreement or this
Amendment to the contrary, Supplier, on behalf of itself, its successors, and
assigns, grants to Company, an irrevocable, perpetual, nontransferable, and
nonexclusive:
(a) right to use Technical Information for the design, development,
manufacture, or maintenance of Material and Parts;
(b) license under its copyrights to create derivative works, and to use, copy,
and distribute Technical Information and any derivative works, but only in
connection with the design, development, manufacture, or maintenance of
Material and Parts;
(c) right to grant to any third party rights of the scope granted to Company
under subsections (a) and (b) above, to the extent reasonably necessary to
carryout activities of supplying Company with Material and Parts or
components thereof;
(d) license under its copyrights to copy, use, and distribute object code
versions of Software included in the Material or Parts, but only in
connection with the sale, lease or distribution of such Material or Parts;
and
(e) license under its patents and patent applications to make,
have made, use, offer to sell, sell, and import Material and Parts or
components thereof.
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5.3 The rights granted in Section 5.2 shall apply to Material and Parts
which are to be supplied by Company to ▇▇▇▇ Atlantic pursuant to the FSN
Agreement and/or the Companion Agreement. Company agrees not to exercise the
rights granted in Section 5.2 prior to a material failure by Supplier to supply
Materials or Parts and the expiration of any applicable cure period, and only
for those Materials or Parts which Supplier fails to supply. The rights granted
in Section 5.2 shall terminate five years after Company first ships to a
customer any Materials or Parts manufactured by Company pursuant to Section 5.2,
however, Company shall retain rights under Section 5.2 for as long as necessary
to provide maintenance, replacement or repair parts to customers as required
under the FSN Agreement and the Companion Agreement. In the event that the
Supplier should file a petition under the federal bankruptcy laws, or that an
involuntary petition shall be filed against the Supplier, the parties intend
that Company shall be protected in the continued enjoyment of its rights under
Section 5.2, including, if it so elects, the protection conferred upon licensees
under 11 U.S.C. Section 365(n).
5.4 Within five business days after the Effective Date, the parties
shall execute and deliver an escrow agreement between Supplier and Company for
the delivery of Technical Information used in the development and manufacture of
Materials and Parts, for use by Company in accordance with the rights granted in
Section 5.2.
5.5 In the event Company elects to exercise the rights granted in
Section 5.2, Company shall have no obligation to pay Supplier any additional
compensation for the exercise of such rights prior to or during the six (6)
month period beginning when Company first furnishes Materials or Parts
manufactured pursuant to Section 5.2 under the FSN Agreement or the Companion
Agreement. Thereafter, for a period not to exceed five (5) years from such first
furnishing by Company, Company shall pay to Supplier a royalty fee on each
Material or Part manufactured pursuant to Section 5.2 which Company furnishes
under the FSN Agreement or the Companion Agreement. The royalty fee shall be
[*******************************************************] from the sale of such
Materials and Parts, and shall be payable on [*******************************]
in which such Materials or Parts are shipped.
5.6 In the event Company elects to exercise the rights granted in
Section 5.2 following a failure by Supplier to materially supply Materials and
Parts, and within two (2) years after such failure Supplier again wishes to
supply Materials and Parts to Company, Company agrees to negotiate with Supplier
the terms under which Supplier shall resume such supply. Such negotiations may
include, without limitation, reimbursement by Supplier of Company's costs.
5.7 Within thirty (30) days following the Effective Date, the parties
shall enter into a Second Amendment to Agreement LGC-A65-D restating the
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provisions of Sections 5.2 through and including 5.6 for purposes of any other
agreement under which Company will provide to a customer of Company Materials
and/or Parts.
6.0 DEFAULT AND TERMINATION
6.1 Time is of the essence to this Agreement. In the event either party
is in breach of any of the terms, conditions or covenants of this Amendment or
any orders under this Amendment, the defaulting party shall initiate corrective
action to remedy such breach or default or provide the affected party a schedule
acceptable to the nonbreaching party for correcting such breach or default
within ten (10) days after the giving of written notice to the defaulting party
thereof by the nonbreaching party. In the event the breach or default is not
corrected within thirty (30) days after the giving of written notice to the
defaulting party thereof by the nonbreaching party or within the agreed upon
schedule, whichever is later, then, in addition to its right to pursue all other
rights and remedies at law, equity or otherwise, the nonbreaching party shall
have the right to cancel this Amendment and/or any such orders in whole or in
part without charge, obligation or liability whatsoever, except as to payment
for Material already accepted by ▇▇▇▇ Atlantic prior to such notice pursuant to
the FSN Agreement.
6.2 The parties agree that the clause in the Agreement entitled
"Termination of Purchase Order" shall apply only to purchase orders terminated
by Company for convenience and without cause.
6.3 In the event this Amendment is terminated due to the termination of
the FSN Agreement and the FSN Agreement is terminated for cause or reasons not
attributable to Supplier, Company shall pay to Supplier as its sole liability:
(a) The invoiced amount for any Material ordered and shipped to Company
prior to the date of notice of termination;
(b) The invoiced amount for any [Services] ordered by and performed for
Company prior to the date of notice of termination;
(c) The invoiced amount for the remaining portion of the
[********************************] (as of the date of notice of termination);
and
(d) Amounts required to be paid under Section 4.4.
6.4 Notwithstanding anything contained in Section 6.3 to the contrary,
Company shall not be liable to pay for any Material or Services under Sections
6.3(a), 6.3(b), or 6.3(c) that are not accepted by ▇▇▇▇ Atlantic in accordance
with the acceptance procedures set forth in the FSN Agreement.
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6.5 The parties acknowledge that there are several clauses in the
Agreement which require matters to be referred to the Executive Team for
resolution before a party can exercise rights under such clause. Such clauses
include, by example and not limitation, "Later Delivery/Liquidated Damages and
Cancellations." Notwithstanding anything contained in the Agreement to the
contrary, the parties agree that, except as expressly required in this
Amendment, referral to the Executive Team shall not be required for either party
to exercise any right or remedy set forth in this Amendment; it being the intent
that the only prerequisites to the exercise by either party of any right or
remedy under this Amendment shall be the express notice, cure period, or other
conditions or requirements set forth in this Amendment.
6.6 In the event either party shall be in default or breach of this
Amendment, the parties agree that they will cause the Executive Team to attempt,
in good faith, to resolve the situation within a reasonable period of time given
the circumstances (however, in no event to exceed ten (10) calendar days). In
the event the Executive Team is unable to resolve the situation within such
period of time, the parties will retain all legal rights and remedies.
6.7 Nothing in this Article 6 shall entitle Company to manufacture
Material or Parts or to purchase Material or Parts from any source other than
Supplier, except as provided in the Agreement or Article 5 of this Amendment.
7.0 FORECASTS AND DELIVERY INTERVALS
7.1 Company will provide Supplier with forecasts of its requirements
for Material as set forth in the clauses "Forecast of Material" and "Shipping
Interval" in the Agreement, except that: (a) in the event ▇▇▇▇ Atlantic reduces
the amount of its commitment forecast to Company in accordance with Section 3.3
of the FSN Agreement, then Company shall have the right to correspondingly
reduce the amount of its commitment forecast to Supplier under this Amendment;
and (b) Company shall have no obligation to order the quantity of Material under
any commitment forecast delivered to Supplier in the event Supplier shall be in
default or breach of this Amendment in any material respect.
7.2 Notwithstanding anything contained in the Agreement to the
contrary, all furnish only orders placed by Company under this Amendment shall
[***************************************************************] and all
"engineered, furnish, and install" orders shall be delivered within the delivery
interval agreed to by the parties for that order, however, consistent with the
provisions of Appendix A of the FSN Agreement.
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8.0 PREPAYMENTS
8.1 Software Prepayment. Within [*********] days after Company's
receipt of such amount from ▇▇▇▇ Atlantic, Company agrees to provide to Supplier
[*************************************************************************] fees
for Software licensed by Supplier to Company under this Amendment. Supplier
will, for each Home Passed by ▇▇▇▇ Atlantic in the ▇▇▇▇ Atlantic Region, draw
down from this prepayment [***********************************] and apply such
amount to amounts properly invoiced to Company for accepted Software (effective
upon the payment due date prescribed herein), until the total
[**********************************************] is exhausted. In the event this
Amendment terminates and provided that Supplier [**************] to Company any
unused amount of the hardware prepayment pursuant to Section 8.2, the Software
prepayment under this Section 8.1 shall be [************] to Company.
8.2 Hardware Prepayment. The parties acknowledge that ▇▇▇▇ Atlantic is
obligated under the [******] Agreement to pay to Company
[**********************************] as a hardware prepayment in
[**************************************************] each. Within
[**************] after Company's receipt of each such amount from ▇▇▇▇ Atlantic,
Company agrees to provide to Supplier [******************************] as a
prepayment for hardware purchased by Company under this Amendment. Company shall
pay such hardware prepayment to Supplier in
[*********************************************************], payable within
[**************] after Company's receipt of the [*****************************]
payments from ▇▇▇▇ Atlantic. Supplier will, for each
[**************************] in the ▇▇▇▇ Atlantic Region, draw down from this
prepayment and apply such amount to amounts properly invoiced to Company for
accepted Material other than Software (effective upon the payment due date
prescribed herein), until the total [*****************************] prepaid
amount is exhausted. In the event this Amendment terminates for any cause or
reason or expires without the hardware prepayment having been exhausted,
Supplier shall, within [**************] after the date of such termination or
expiration (as applicable), [************] to Company any [****] amount of such
hardware prepayment.
8.3 Letter of Credit. (a) Upon receipt of the [***************]
installment of the hardware prepayment set forth in Section 8.2, Supplier agrees
to secure such [****************************************] through issuance of a
[**********************] in the principal amount of [********], naming Company
as beneficiary. The [**********************] shall be issued by a bank
acceptable to Company in the form provided as Exhibit C to the Amendment. The
term of the [**********************] shall be effective as of the date the
hardware prepayment is delivered to Supplier and shall be automatically
renewable and remain in effect until the date on which ▇▇▇▇ Atlantic purchases
from Company under the [******] Agreement are in sufficient
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quantity to exceed [**********************************].
(b) For each Home Passed after such time as the unused portion (i.e.,
the balance remaining after draw downs) of the hardware prepayment set forth in
Section 8.2 equals [********************************], the parties agree that
the [********************************] principal amount secured through the
[**********************] shall be simultaneously reduced at the rate of
[***********************************]; such that the principal amount of the
[**********************] shall at all times thereafter equal the [****] portion
of the hardware prepayment.
(c) In the event Supplier fails to [*************] to Company the
[**************] of the hardware prepayment in accordance with Section 8.2,
then, in addition to all other rights and remedies available to Company under
law, at equity, and otherwise, Company shall have the right to draw down on and
collect the full principal amount of the
[************************].
9.0 PRICING
9.1 Prices for Material and Services ordered under this Amendment shall
be those set forth in Exhibit B and Supplier agrees that such prices will
[***********************************************************************]. To
the extent required as part of the agreement between ▇▇▇▇ Atlantic and Company
to identify areas where ▇▇▇▇ Atlantic can reduce FSN costs, Supplier agrees to
work in good faith with Company to identify areas
where ▇▇▇▇ Atlantic can reduce FSN costs, including ways to reduce Material and
Services prices after April 1, 1997, and the parties may implement such
reductions.
9.2 In addition to the price modifications described in Article 10 of
this Amendment, the pricing set forth in Exhibit B has been modified to reflect
the following effective immediately:
(a) Applicable only to purchases by Company for resale to ▇▇▇▇
Atlantic, ▇▇▇▇ Atlantic Affiliates, NYNEX, and any other entities entitled to
purchase from Company under the FSN Agreement, Supplier agrees to extend the VAM
Basic Software License for applications from one hundred twenty (120) digital
broadcast channels up to and including one hundred eighty eight (188) digital
broadcast channels,
[******************************].
(b) Applicable only to purchases by Company for resale to ▇▇▇▇
Atlantic, ▇▇▇▇ Atlantic Affiliates, NYNEX, and any other entities entitled to
purchase from Company under the FSN Agreement, Supplier agrees to extend the
Basic Digital Broadcast Software License for applications from one hundred
13
twenty (120) digital broadcast channels up to and including one hundred eighty
eight (188) digital broadcast channels, [******************************].
(c) Applicable only to purchases by Company for resale to ▇▇▇▇
Atlantic, ▇▇▇▇ Atlantic Affiliates, NYNEX, and any other entities entitled to
purchase from Company under the FSN Agreement, Supplier agrees to extend the
Interactive Video Software - Low Penetration License to include applications
from [***********************] up to and including
[**********************************************************************].
9.3 (a) If at any time after three (3) years from the Effective Date,
Company notifies Supplier in writing that ▇▇▇▇ Atlantic has obtained a written
proposal from another vendor offering to sell to ▇▇▇▇ Atlantic systems
functionally equivalent to the ASE which are (a) designed to substantially
similar specifications as those specifications attached to the FSN Agreement,
(b) under substantially similar terms and conditions as are provided in the FSN
Agreement, (c) at substantially similar volumes as those to be purchased by ▇▇▇▇
Atlantic under the FSN Agreement, and (d) for prices lower than the prices set
forth in the FSN Agreement (a "Market Proposal"); then the Executive Team shall
promptly convene to determine whether the parties can mutually agree in writing,
within a period of thirty (30) days following receipt of Company's notice, to
correspondingly reduce the prices available to Company under this Amendment and
the prices available to ▇▇▇▇ Atlantic under the FSN Agreement in such a way to
coincide with the prices in the Market Proposal. If the parties do not agree to
lower their prices to coincide with any Market Proposal and ▇▇▇▇ Atlantic
exercises its right to terminate the FSN Agreement as a result thereof, Company
shall have the right to terminate this Amendment by forwarding written notice
thereof to Supplier. In the event of such termination, Company shall be liable
only for the amounts specified in Section 6.3; and, provided, further that in
such event Supplier shall promptly refund the unused portion of any prepayments
made pursuant to Sections 8.1 and 8.2.
(b) If, at any time after three (3) years from the Effective Date, ▇▇▇▇
Atlantic desires to purchase commercially available products which are
functionally equivalent to the ASE but contain features or enhancements which
are unavailable on the Material then provided by Supplier (a "New Material"),
then Company shall notify Supplier thereof in writing. Said notice shall include
a detailed description of the features or enhancements which are unavailable on
the Material then provided by Supplier but which are otherwise then commercially
available. Upon such notice from Company, the Executive Team shall promptly
convene to determine whether the parties can mutually agree in writing, within a
period of thirty (30) days following receipt of Company's notice, to provide
Company a proposal to make the desired features or enhancements available to
▇▇▇▇ Atlantic. In the event ▇▇▇▇ Atlantic and the parties are unable to mutually
agree upon terms and conditions for Supplier to
14
provide such features and/or enhancements to ▇▇▇▇ Atlantic and ▇▇▇▇ Atlantic
exercises its right to terminate the FSN Agreement as a result thereof, Company
may terminate this Amendment by forwarding written notice thereof to Supplier.
In the event of such termination, Company shall be liable only for the amounts
specified in Section 6.3; and, provided, further that in such event Supplier
shall promptly refund the unused portion of any prepayments made pursuant to
Sections 8.1 and 8.2.
10.0 PRICE MODIFICATION TO ACHIEVE MODEL PRICE PER HOME PASSED
10.1 To achieve the ▇▇▇▇ Atlantic model price level of
[*********************************], with Flexterm, per Home Passed at a
[*****************************************], the prices set forth in Exhibit B
have been reduced by [***************************************************] when
applied to the standard ▇▇▇▇ Atlantic [*******] and shall be effective
immediately.
10.2 To accommodate ▇▇▇▇ Atlantic's FSN model for higher video traffic
requirements (known as Case Y), which results in a model price level of
[*****************************************************], a new item has been
added to Exhibit B which combines three (3) Software licenses into one (1)
license. The three (3) licenses are:
(a) the High Bandwidth Software License (1 Mbps/Drop) R1.0, 1.1, 2.0;
(b) the Extended Digital Broadcast Software License (>188 Channels) R1.0,
1.1, 2.0; and;
(c) the VAM Extended Software License (>188 Channels) R1.0, 1.1, 2.0.
These three (3) licenses are consolidated into one (1) license; the ▇▇▇▇
Atlantic Enhanced Broadcast / Signaling Software R1.0, 1.1, 2.0, and is offered
to Company under this Amendment only. This single license will be sold on a
[*****************], and the price to Company is
[********************************************]. This ▇▇▇▇ Atlantic Enhanced
Broadcast / Signaling Software R1.0, 1.1, 2.0 shall be subject to the
[**********************************] described in Article 11 of this Amendment
and shall also be subject to the [*********************] margin sharing in
accordance with Section 11.3 of this Amendment.
10.3 For the aggregate levels of Homes Passed by ▇▇▇▇ Atlantic and the
▇▇▇▇ Atlantic Affiliates as indicated in the first column of the table set forth
below, Supplier will apply to purchases under this Amendment the corresponding
discounts set forth in the second column of said table. Said
15
discounts shall be applied against the prices set forth in Exhibit B. All price
and cost reductions will be calculated using the standard ▇▇▇▇ Atlantic FSN
model set forth in Appendix B to the FSN Agreement. Supplier and Company will
mutually determine the specific unit prices to adjust to achieve the required
price levels when calculated according to the ▇▇▇▇ Atlantic FSN Model and
Exhibit B shall be revised accordingly.
-------------------------------------------------------------------
# Homes Passed Supplier $ per
HP Reduction
-------------------------------------------------------------------
[****************] [****]
-------------------------------------------------------------------
[****************] [****]
-------------------------------------------------------------------
[****************] [****]
-------------------------------------------------------------------
[****************] [****]
-------------------------------------------------------------------
[****************] [****]
-------------------------------------------------------------------
[*************] [****]
-------------------------------------------------------------------
10.4 In return for Supplier's agreement to provide the discounts set
forth in Section 10.3, the parties agree that the cost reduction benefits set
forth in the clause "Value Analysis-Engineering and Cost Reduction" of the
Agreement shall not apply to purchases of Material under this Amendment;
provided, however, that Supplier does agree to count any such purchases of
Material by Company under this Amendment, towards the cost reduction volume
thresholds defined in said clause for purposes of determining the cost
reductions available to Company for purchases of Material not made under this
Amendment.
10.5 If during the term of the Agreement, Company is provided more
favorable pricing from Supplier due to cost reduction efforts, or for any other
reason, Supplier acknowledges that Company will receive this pricing for
Material supplied by Company under this Amendment, subject to prior Executive
Team review and approval. However, in the event that the pricing set forth in
this Amendment is the most favorable, Company will not extend this pricing to
any other customer without prior written approval from Supplier.
16
11.0 SOFTWARE INCENTIVE
11.1 In order to motivate Company to maximize the selling price of
Supplier Software, Supplier agrees to provide to Company the sales [*******]
described in Section 11.2 below on all Software licensed by Company under this
Amendment during the Term. This includes all Software currently listed in
Attachment C of the Agreement, and any Additional Software that may be offered
for sale by Supplier to Company over the term of the Agreement, with the limited
exception of that of Supplier's Software which is noted with an asterisk (*) on
Exhibit B to this Amendment.
11.2 For all eligible Software under Section 11.1, the sales [*******]
shall be in the form of a [*********] to Company and shall be calculated at
[***************] of the prices in Exhibit B to this Amendment (as in effect at
the time of the purchase by Company), including any modifications to such
Exhibit B prices that are mutually agreed to by Company and Supplier. Supplier
shall pay the foregoing sales [*******] to Company by the fifteenth (15) day of
the month following the end of each calendar quarter that this incentive is in
effect. Supplier shall then [**************************] to Company for all
shipments made by Supplier to Company during said quarter.
11.3 The [**********************************] provided for in the
Agreement shall be calculated on any [****] resulting from a Company markup over
the Exhibit B prices, without including the Software sales incentive set forth
in Section 11.2 (i.e., prior to the calculation of the Software incentive).
12.0 CUSTOM SOFTWARE
12.1 Mandatory Requests. (a) Supplier acknowledges that ▇▇▇▇ Atlantic
shall be entitled to fund annually up to [**********************] of custom
Software development for access products or applications ("Custom Software") and
that ▇▇▇▇ Atlantic may require Company to develop Custom Software for up to this
limit. Company agrees to immediately provide written notification to Supplier if
any such development work requires the resources of Supplier. ▇▇▇▇ Atlantic,
Company, Supplier and ▇▇▇▇ Atlantic shall mutually agree on the requirements,
Headcount Years, and delivery schedule of such development, with the goal being
to commence such development work within [**************] of ▇▇▇▇ Atlantic's
request. Also depending on the scope and nature of such development work,
Supplier's goal will be to complete such development work within [************]
of ▇▇▇▇ Atlantic's request and shall, in all events, seek to finish
such development work within a commercially reasonably time period.
17
(b) Prior to Supplier commencing to such development work, Company and Supplier
will negotiate in good faith the fees to be paid to Supplier. Such fees shall be
based on the agreed to scope and nature of the required development work and the
desired schedule. In no event, however, shall the fees payable to Supplier for
any such work [**************************************************************]
may be adjusted in December of each calendar year up to the amount of any
change in the Producer Price Index for Telecommunications Systems, Custom
Software Development during the preceding twelve (12) month period.
12.2 Discretionary Requests. Supplier acknowledges that ▇▇▇▇ Atlantic
may also make discretionary requests for Custom Software in addition to the
mandatory development work cited above. Any such development work to be
performed by Supplier to meet ▇▇▇▇ Atlantic discretionary requests shall be
subject to prior negotiation between Company and Supplier regarding the
requirements, delivery schedule, and the fees payable to Supplier for such
development work.
12.3 Reservation of Rights. For mandatory Software development
requests, Company reserves the right to perform the development work itself, or
contract with other third parties to perform such development work, or at its
sole discretion, pass the requirement to Supplier. In addition, Company agrees
that Supplier shall have the right of first refusal prior to Company having any
such development work performed by any third party.
12.4 Ownership of Custom Software. All rights in and title to Custom
Software that is not embedded into existing Software or a derivative of
pre-existing work shall vest in the developing party. Supplier will grant to
Company, ▇▇▇▇ Atlantic and ▇▇▇▇ Atlantic's Affiliates, a perpetual, fully paid,
exclusive license to use such Custom Software with the FSN, unless ▇▇▇▇
Atlantic, in its sole discretion, agrees to allow such Custom Software to be
licensed to others. In the event that any such Custom Software should be
licensed to others, compensation to ▇▇▇▇ Atlantic will be negotiated on a case
by case basis.
13.0 CONTROLLED INTRODUCTION OF SOFTWARE
13.1 Supplier agrees to notify Company prior to placing any Software
Upgrades or Software Enhancements on any Material covered under this
Amendment or accepting any orders for delivery of Software Upgrades or
Software Enhancements for any Material covered under this Amendment.
Supplier will submit to Company, for ▇▇▇▇ Atlantic testing purposes,
one (1) pre-purchase copy of any proposed Software Upgrade or Software
18
Enhancement at least [*************] prior to the proposed general availability
or proposed service date of such Software Upgrade or Software Enhancement. In
the event that ▇▇▇▇ Atlantic notifies Company that any Software Upgrade or
Software Enhancement is unacceptable, Company shall immediately provide written
notification to Supplier of same. Supplier agrees that it will not be providing
any Software Upgrade or Software Enhancement on any of Company's orders during
the evaluation period without prior written approval of Company and ▇▇▇▇
Atlantic. Supplier also agrees that Company it will not furnish any Software
Upgrade or Software Enhancement following ▇▇▇▇ Atlantic's evaluation until
written approval has been received by Company from ▇▇▇▇ Atlantic. Supplier will
not charge Company any fees associated with the Software evaluation copy which
Company submits to ▇▇▇▇ Atlantic and such evaluation shall in no way obligate
Company to subsequent charges or contingencies regardless of the results of the
evaluation.
14.0 SOFTWARE SUPPORT
14.1 During the Software warranty period set forth in the Agreement,
Supplier will promptly provide, at no additional charge, procedures, as
determined by Supplier for particular Software, to keep Software operating
consistently with it specifications. Such procedures shall include diagnostic
service using on-site or remote techniques to analyze a problem and prescribe
remedial action. Further, throughout the Term, Supplier will provide all Code
Corrections at no charge. Supplier may provide such
[*******************************] or included with a Software Upgrade or
Enhancement, on the condition that [******] does not delay prompt release of the
Code Corrections to Company and ▇▇▇▇ Atlantic.
14.2 Unless otherwise agreed to in writing, Supplier shall furnish to
Company, at no additional charge, and on a non-proprietary basis, no less than
one copy of Related Documentation, and any amendments or revisions made by or on
behalf of Supplier during the Term, as is sufficient for Company to plan,
engineer, procure, install, operate and maintain the Material. Such Related
Documentation shall be furnished to Company together with the Material to which
it relates or at such time as any amendments or revisions are made thereto,
whichever is earlier. Company may reproduce and distribute such Related
Documentation to third parties for the purposes described and shall include in
any such reproductions any copyright notices contained in the original of the
items being re produced.
19
15.0 WARRANTY
15.1 Material purchased under this Amendment shall be warranted in
accordance with the clause of the Agreement entitled "Warranty" except that
repaired, modified, and/or serviced Material shall be warranted for the
[*******************************************************].
15.2 For all purposes of this Amendment, the clause "Warranty" in the
Agreement is hereby amended as follows:
(a) The last sentence of the second paragraph is amended to provide,
"If requested by Company, Supplier shall begin on-site repairs within an average
of three (3) days after verbal notification is given Supplier by Company."
(b) Supplier warrants that Supplier has the right to grant to Company
the Software and other licenses granted under this Amendment. Supplier further
warrants to Company that the furnished Software shall be free from defects in
design, that it will conform to the applicable specifications, and that it will
operate satisfactorily in the system environment in which it is initially
installed. Defective Software will be corrected or replaced after notification
is given to Supplier by Company. Supplier, at its option, will undertake to
either correct or replace the defective Software without charge at the location
where it is installed in accordance with corrective action prescribed for the
applicable Severity Code (per Appendix C to the General Purchase Agreement in
effect between ▇▇▇▇ Atlantic and Company), or, at Supplier's option, provide a
refund or credit of the original license fee; provided, however, that Supplier
may elect to provide a credit to Company only where Company reasonably
determines the credit to be of value.
16.0 CHANGE CONTROL PROCESS
16.1 Supplier acknowledges that ▇▇▇▇ Atlantic may submit written
requests to Company to request changes or revisions to hardware and software to
be furnished under the FSN Agreement and, to the extent ▇▇▇▇ Atlantic's request
involves Material, Company shall immediately notify Supplier (a "Change Control
Request"). Change Control Requests requiring [*********************************]
will be handled in the normal change control process. Change Control Requests
[*******************************************************] will be negotiated by
the parties and will be performed under this process provided that the parties
reach mutually satisfactory agreement on requirements, Headcount Years, price
and delivery schedule. Any resulting Software shall be licensed to Company under
the provisions of Article 5 without payment of any additional license fees or
charges other than charges for the development work as provided herein.
20
16.2 Within fifteen (15) days (or a different period if mutually agreed
to by the parties) following receipt of a Change Control Request from Company,
Supplier shall provide a written response to Company specifying: (i) the
specifications for the work to be performed; (ii) the work schedule for the
proposed work; (iii) a firm price quote for the work, and associated new
hardware unit prices (if any) for the new Material, (iv) the number of Headcount
Years required, and (v) the impact, if any, on the delivery date of the Material
to be modified; provided, however, that (x) the fees payable by Company for any
such Change Control Request shall not exceed
[***************************************************************], and (y) the
Headcount Years proposed shall be commercially reasonable.
[*******************************************************] may be adjusted by
Company in December of each calendar year up to the amount of any change in the
Producer Price Index for Telecommunications Systems, [*************************]
during the preceding twelve (12) month period. This limitation shall not,
however, apply to Major Changes.
16.3 If Supplier's response is approved in writing, Supplier will
proceed with the work. Supplier shall not be obligated to perform any requested
changes or revision to Material in advance of written approval from Company. In
the event that Supplier commits resources to the implementation of a Change
Control Request without prior written authorization, Company shall not be
charged for such work and such work shall not relieve Supplier of its
obligations to meet previously agreed upon schedules. For purposes of this
Amendment, each Change Control Request response approved in writing by Company
shall constitute a formal change to this Amendment modifying the prices,
functionality and/or schedules as addressed therein, and any hardware or
Software developed pursuant to such a request shall fall within the definition
of the term "Material."
16.5 Supplier agrees to pay to Company as a Software [*******] Fee,
[***************] of the amount of fees provided by Company to Supplier under
this Section 16.5 for changes to Software, only. The Software [*******] Fee due
to Company under this Section 16.5, will be made by Supplier within
[**************] of the payment of the fees for the Software changes made by
Company to Supplier under this Section 16.5.
17.0 ADDITIONAL SOFTWARE
17.1 The parties enter into this Amendment with the mutual
understanding that it is Company's intention to continue feature and function
development beyond Release 2.1. As Supplier develops Additional Software,
21
Supplier will seek and utilize input from ▇▇▇▇ Atlantic and Company other
customers.
17.2 Supplier will make available to Company any generally available
Additional Software upon mutually agreeable prices and terms and conditions.
[******************************************************************************
******************************************************************************].
17.3 Additional Software shall be licensed to Company at fees no less
favorable than those extended to any other Supplier customer, under comparable
terms and conditions (i.e., comparable scope of license and usage rights).
18.0 LATE DELIVERY
18.1 Supplier acknowledges that ▇▇▇▇ Atlantic may assess [*****] to
Company under the [******] Agreement for [*************] if products and
services are not delivered within [***************] of the delivery date set
forth in the applicable order. In addition to any other rights and remedies
available to it at law, in equity, or under the [******] Agreement, ▇▇▇▇
Atlantic may recover from Company [****************] for the portion of the
order that is late in the following cumulative amounts:
[******************************************************************************
*******************************************************************************
*******************************************************************************
*************] that the shipment remains past due until the earlier of the
effective date of cancellation (if ▇▇▇▇ Atlantic exercises its right to cancel
the applicable order) or the date delivery is made. Company's
[*****************] per order, shall not exceed the price of products and/or
services not delivered.
18.2 Company and Supplier acknowledge that as a result of the means by
which the parties will be working together to deliver products to ▇▇▇▇ Atlantic,
that it may be extremely difficult to determine which party is at fault for late
deliveries to ▇▇▇▇ Atlantic prior to general availability of hardware and
software. Accordingly, if ▇▇▇▇ Atlantic notifies Company of its assessment of
[****************] for late delivery, Company shall promptly notify Supplier
thereof.
22
Supplier agrees to share with Company any [*********************] by
▇▇▇▇ Atlantic for late deliveries under the FSN Agreement as follows: (a) if
Company is [*********************] for late delivery for any hardware and/or
software (whether or not such hardware or software includes Material to be
furnished by Supplier hereunder) and the agreed upon delivery date is prior to
the general availability date of such hardware and/or software,
[***************************] will be paid by Supplier and
[**************************] will be paid by Company, regardless of which party
caused the late delivery; (b) if Company is [*****************] as a result of
late delivery of Material by Supplier hereunder and the agreed upon delivery
date for such Material is after the general availability date of such Material,
all such [**************] shall be borne solely by Supplier and Supplier agrees
to pay to Company any and all such [*************]. After the general
availability date of Material, Supplier shall not be held accountable for
[*************] assessed by ▇▇▇▇ Atlantic to Company if Supplier has delivered
the Material on or before the agreed upon delivery date for the applicable
Company purchase order.
18.3 Company shall invoice Supplier for [*************] due and owed by
Supplier under Section 18.2 within a commercially reasonable period of time and
Supplier agrees to pay all such invoices in full within thirty (30) days from
the date of such invoices. At Company's option, Company may withhold against any
Supplier invoices then outstanding payment in an amount equal to any accrued and
due but unpaid [**************] under Section 18.2, until such time as said
[**************] are paid by Supplier.
18.4 ▇▇▇▇ Atlantic may cancel any purchase order, in whole or in part,
at any time after [************************************] set forth in the
applicable order. In the event that ▇▇▇▇ Atlantic cancels any or all of such
purchase orders, Company may cancel any related purchase orders placed under
this Amendment. Upon such cancellation, Supplier shall pay Company any
[****************] accrued under Section 18.2 but unpaid as of the date of
cancellation. The amount of any canceled purchase orders shall be credited
against any unfulfilled commitment forecasts or other committed purchases of
Supplier under this Amendment.
18.5 In the event ▇▇▇▇ Atlantic exercises its rights under the FSN
Agreement to defer or cancel delivery of all or any portion of a purchase order
for failure to obtain required regulatory approvals, Company shall have the
corresponding right to defer or cancel delivery of all or any portion of related
purchase orders for Material upon notice to Supplier. Upon such notice, Supplier
will not ship any Material covered by such orders until Company is authorized by
▇▇▇▇ Atlantic and Company instructs Supplier to do so. Supplier shall have no
liability under Section 18.2 for shipments delayed under this Section 18.5.
23
18.6 The foregoing provisions of this Article 18 shall supersede and be
in lieu of the clause [**************************************************] in
the Agreement.
19.0 NONCONFORMANCE FEES
19.1 Company and Supplier acknowledge that ▇▇▇▇ Atlantic may assess
[*******************************] under the FSN Agreement for any Software
release set forth in Exhibit D to this Amendment which is not delivered with the
required features and/or in conformance with ▇▇▇▇ Atlantic's requirements by
[********************************************************] set forth in Exhibit
D ("Nonconformance"). In the event ▇▇▇▇ Atlantic notifies Company of any
Nonconformance ("Notice of Nonconformance"), Company shall promptly provide
notice thereof to Supplier. If a Nonconformance is not remedied within the
[*****************************] set forth in Exhibit D ("Event of
Nonconformance"), Company is [********************] to ▇▇▇▇ Atlantic for such
delay for each Event of Nonconformance in accordance with Exhibit D for each day
of Nonconformance following the Notice of Nonconformance.
19.2 Supplier and Company agree to jointly work all aspects of
development and deployment to deliver conforming Software releases to ▇▇▇▇
Atlantic on a timely basis. Supplier agrees to share with Company any
[*****************] assessed by ▇▇▇▇ Atlantic under the FSN Agreement as
follows: (a) [********************************] shall be paid by Company; and
(b) [*****************************] shall be paid by Supplier.
19.3 Company shall invoice Supplier for [**************] due and owed
by Supplier under Section 19.2 within a commercially reasonable period of time
and Supplier agrees to pay all such invoices in full within thirty (30) days
from the date of such invoices. At Company's option, Company may withhold
against any Supplier invoices then outstanding payment in an amount equal to any
accrued and due but unpaid [***************] under Section 19.2, until such time
as said [*************] are paid by Supplier.
19.4 In addition to its right to recover [*****************], ▇▇▇▇
Atlantic may terminate the FSN Agreement for default if (a) either [*********]
specified in Exhibit D or a [************************] which ▇▇▇▇ Atlantic
believes to be material to the functioning of the ASE is subject to an Event of
Nonconformance; and (b) such Nonconformance continues for ninety (90) days or
more. If ▇▇▇▇ Atlantic exercises its right to terminate the FSN Agreement in
accordance with the preceding sentence,
24
Company may terminate this Amendment. Upon such termination, Supplier shall pay
Company any Performance Fees accrued under Section 19.2 but unpaid as of the
date of termination and Supplier will allow Company to adjust any commitment
forecasts and purchase order commitments accordingly.
20.0 DISCLOSURE OF DEFECTS
20.1 Supplier acknowledges that in addition to all other rights and
remedies available to ▇▇▇▇ Atlantic at law, in equity or under the FSN
Agreement, ▇▇▇▇ Atlantic may assess against Company under the FSN Agreement
[******************************************]: (a) that results in the disruption
of ▇▇▇▇ Atlantic's network access and/or the services provided by an ASE, or
equivalent system, to customer of ▇▇▇▇ Atlantic for a period of thirty (30)
uninterrupted minutes per occurrence, and (b) for which Company does not fulfill
its notification obligations under the FSN Agreement which include notifying
▇▇▇▇ Atlantic of the occurrence of an Event within [********************] of
Company's first knowledge of the same and, within [********************]
thereafter, providing a detailed written description of the following: (i)
activities which led up to or preceded the Event, (ii) the cause or causes of,
including any and all known contributing factors to, the Event, (iii) any and
all actions taken by Company, its agents, and contractors, and by the owner or
user of the products which are subject to the Event, to correct it, (iv) the
date the Event will be resolved, and (v) any and all measures which can be
reasonably taken to avoid the occurrence of the Event in ▇▇▇▇ Atlantic's
products. Company is further obligated to continue to provide these written
descriptions to ▇▇▇▇ Atlantic every [********************] until such time as
the Event has been successfully resolved or until Company and ▇▇▇▇ Atlantic
agree on their discontinuance. For purposes of this Section, "products" means
hardware and software sold by Company and Supplier under the FSN Agreement and
this Amendment, respectively, and other items that are manufactured and/or sold
by Company or Supplier which are the same as, or functionally or operationally
similar to, such hardware and software.
20.2 Supplier agrees to cooperate with Company and to provide to
Company under this Amendment the notifications and other information required
under Section 20.1(b) above with respect to the Material and other items that
are manufactured and/or sold by Supplier which are the same as, or functionally
or operationally similar to, such Material. In the event that ▇▇▇▇ Atlantic
assesses [****************] against Company as described in Section 20.1 above,
Company shall promptly provide written notification to Supplier of same.
Supplier agrees to share with Company any such [**************] assessed by ▇▇▇▇
Atlantic as follows: (a) [**********************] shall be paid by Supplier; and
(b) [***********************************] shall be paid by Company.
25
20.3 Company shall invoice Supplier for any [****************] due and owed by
Supplier under Section 20.2 within a commercially reasonable period of time and
Supplier agrees to pay all such invoices in full within thirty (30) days from
the date of such invoices. At Company's option, Company may withhold against any
Supplier invoices then outstanding payment in an amount equal to any accrued and
due but unpaid [****************] under Section 20.2, until such time as said
[****************] are paid by Supplier.
21.0 LIMITATION OF NONCONFORMANCE [*********************]
21.1 Supplier's total liability for
[****************************************] under Article 18 - Late Delivery,
Article 19 - Nonperformance Fees, and Article 20 - Disclosure of Defects, shall
be limited as follows.
(a) Supplier's total liability resulting from the cumulative impact of
the above [****************] shall be capped at [***************] under this
Amendment and the Companion Agreement.
(b) Payment to Company by Supplier of Nonperformance
[***************************] under these [*******] Articles shall occur only
upon the assessment of such [**********************] by ▇▇▇▇ Atlantic to
Company.
(c) Payment to Company by Supplier of Nonperformance
[*******************************] under these [*******] Articles shall not
exceed one million dollars ($1,000,000) during each of the 1996 and 1997
calendar years. For each of the calendar years 1998 through 2002, Supplier's
payment to Company of [**********************************] under these [*******]
Articles shall not exceed [*********************************] of the total
amount of Company's purchases from Supplier under this Amendment during the
immediately preceding calendar year, whichever is lower.
21.2 In the event that Supplier's payment of Nonperformance
[*************************************] reach the annual cap set forth in
Section 21.1(c) for any calendar year during the Term, Supplier shall notify
Company of such, and further payments to Company shall not be required in that
calendar year, but shall continue to accrue and shall be payable in the next
following calendar year. Following the close of each calendar year, Supplier and
Company agree to conduct an annual reconciliation of the Nonperformance
[**************************] paid by Supplier to Company for each preceding year
and to determine the amount of
26
Nonperformance [*************************************], if any, to be carried
over into the current calendar year, as described herein.
By way of example: Supplier's share of [************************] under
owed to Company in 1997 total [**********************************]. Supplier
pays Company [********************] as a result of applying the [********].
Supplier shall then pay to Company the remaining
[******************************]. If Supplier is assessed
[************************************] under in 1998 of
[*************************], Supplier would first pay Company the
[****************************] carried over from 1997, and would then pay to
Company [*****************************] of the 1998
[*************************************], bringing the total payable by Supplier
during 1998 within the annual [************]. Company will carry the remaining
[****************************] of 1998
[**********************************************] forward into 1999.
[****************************] owed to Company will continue to be carried
forward in this manner, for [************************************************].
21.3 At the expiration or earlier termination of this Amendment,
Company and Supplier will perform a final
[*******************************************] payable by Supplier under Articles
18, 19, and 20 of this Amendment and, subject to the
[****************************************] provided in Section 21.1(a), any and
all outstanding amounts will be paid by Supplier to Company within thirty (30)
days after the date of such expiration or termination, as applicable. Upon such
payment, if any, Supplier shall have no further liability for Nonperformance
[*************************************] under said Articles.
22.0 MANUFACTURING CAPACITY
22.1 Supplier warrants that it has established and covenants that it
will maintain during the Term, sufficient manufacturing capacity for Material to
ensure that ▇▇▇▇ Atlantic's Beta Test Date, its FSA Date, and any commercial FSN
deployment will not be jeopardized due to Supplier delivery delays.
23.0 JOINT COST REDUCTION COMMITMENT
23.1 This Section 23.1 is included as explanation of the Company and
Supplier cost reduction commitments, and should not be viewed as further
reductions to the price modifications as defined in the Article 17, Price
Modification to Achieve Model Price Per Home Passed, of this Amendment.
27
23.2 Supplier agrees to work with Company to jointly achieve the required cost
reduction that will support a price reduction to ▇▇▇▇ Atlantic of
[********************************************************], when using the
standard ▇▇▇▇ Atlantic FSN model. This required cost reduction will entail a
commitment by both Supplier and Company to enter into joint design work to
achieve this cost reduction, regardless of the volume level projections. It is
the goal of the cost reduction efforts that this cost reduction will be achieved
by January 1998.
23.3 Both Company and Supplier agree to a baseline view of the cost
reduction impact on price. This view, using the ▇▇▇▇ Atlantic FSN model,
supports the following reductions in price / HP as the baseline:
(a) HDT Integration - [********] (Company Responsibility)
(b) New Integrated ONU - [********] (Shared Responsibility:
Company - [********]; Supplier - [********])
The ONU cost reduction and resultant price impact baseline view is
allocated between Company and Supplier proportional to each parties share of
components in the current ONU, evaluated with the current ONU pricing. Both
Company and Supplier agree to update this baseline view and the contribution
required from each party as the joint design work progresses and becomes better
defined.
23.4 The new Integrated ONU will require both Company and Supplier to
commit resources to a single design. To accomplish this goal, both Company and
Supplier accept the concept of an integrated joint design team. This effort will
lead to some circuit packs and other equipment having design contributions from
both parties. Both Company and Supplier commit their commercially reasonable
best efforts to establish and complete appropriate commercial arrangements in
support of this mutual effort within three (3) months from the Effective Date of
this Amendment. Company and Supplier acknowledge that the level of integration
required to meet these cost reduction targets integrates intellectual property
and manufacturing rights of both parties and it is the intent of Company and
Supplier to assign such rights prior to the commencement of development
activities. Any disputes arising from this integration will be resolved by the
Executive Team prior to any assignment of such rights.
24.0 [INTENTIONALLY DELETED]
28
25.0 TRAINING/LAB MATERIAL
25.1 Supplier acknowledges that ▇▇▇▇ Atlantic requires the delivery and
installation of [*******************************] by the dates set forth in
Exhibit D to this Amendment. Company agrees to provide Supplier with a forecast
and purchase orders for Material required for such systems, and Supplier agrees
to accept such purchase orders and ship such Material in sufficient time to
enable Company to deliver and install the laboratory test systems on time.
25.2 Supplier will provide to Company [*********************] as
described as "Lab System 1" in Appendix D to the FSN Agreement, free of charge,
which Company shall supply to ▇▇▇▇ Atlantic, at Company's sole discretion, for
either training or laboratory testing purposes. The configuration of the system
shall be mutually agreed to by all the parties and shall be sufficient to meet
the requirements of ▇▇▇▇ Atlantic. Supplier agrees to upgrade this system and
will provide new features and functionalities as each becomes available up
through Release 2.1.
[******************************************************************************.
26.0 PUBLIC INTERFACES
26.1 Supplier agrees to provide Company and ▇▇▇▇ Atlantic with any
public interface specification documentation and reasonable amounts of support
to resolve any questions Company or ▇▇▇▇ Atlantic may have regarding these
interface specifications as they pertain to ▇▇▇▇ Atlantic's FSN deployment or
the ASE.
27.0 TESTING AND QUALITY
27.1 Supplier will perform a factory systems test in accordance with the
following criteria:
(a) The term "system" is meant to describe a complete ASE transport
system including all standard subsystems. For normal production, it is
acceptable to test subsystems in a "system configuration" test environment
consisting of a captive test bed to which the specific subsystem under test is
connected. These arrangements are acceptable if the periodic qualification
testing is used to revalidate such test configurations. This can be accomplished
by first testing a defined system in the production manner followed by
qualification testing of the same system (using a full system environment).
29
(b) Correction of any production testing program deficiencies
identified will be made immediately. System configuration testing will be
conducted on Materials to demonstrate the ability to achieve stable, fault free
operation for a reasonable period of time while running operational exercises
and diagnostic routines at [********************]. The testing duration will be
such that adherence to reliability requirements can be demonstrated.
Manufacturing testing burn-in intervals will be of sufficient duration, so that
when coupled with normal installation and turnover intervals, early-life
reliability performance at cut over will be at or below
[**************************] the steady-state reliability level. That is, the
instantaneous failure rate at cut over shall be less than or equal to
[**************************] the expected steady-state instantaneous failure
rate.
(c) Periodically, an entire system will be subjected to qualification
testing to assure that product and manufacturing processes continue to
demonstrate conformance to design intent. All Material shipped loose and not in
a complete system configuration, such as spares and additions for growth, shall
receive testing to demonstrate functionality and quality levels at least
equivalent to Material embedded in systems. Manufacturing testing and burn-in
intervals will be of sufficient duration so that infant mortality failure rate
of Material shipped is no greater than [**************************] the
predicted steady-state failure rate.
(d) Testing performed will provide verification of operability as
completely as possible with current manufacturing test capabilities. This will
include verification of performance over ranges of design limits to assure
operation in all possible field applications. Testing in a simulated use
environment (test bed) will normally be included as one of the test steps. ▇▇▇▇
Atlantic owned circuit packs returned for repair must be tested in a simulated
use environment as part of the repair process. Returned circuit packs which are
found to be operational upon their receipt will be tested under [***********] to
identify thermostatic devices which may have been the cause for return. Return
and repair results data shall be made available to ▇▇▇▇ Atlantic or ▇▇▇▇
Atlantic's agent. The effectiveness of simulated use environments or the manner
of subsystem testing employed must have been verified as consistent with a full
level system test. This verification must have been conducted initially and at
periodic intervals as part of the periodic qualification discussed above. When
internal machine diagnostics are used in the testing of systems, subsystems or
Material shipped loose, the effectiveness of those diagnostics in the
identification of defective Material must be verified initially and again as
part of the periodic product qualification test.
27.2 Unless Company gives Supplier written notice to the contrary,
Supplier shall notify Company when each installment of Material is ready for
inspection and Company and ▇▇▇▇ Atlantic (or its agent) shall be given
30
reasonable opportunity to inspect the Material at any time prior to shipment
under agreed upon Quality Program Specifications listed in Appendix I to the FSN
Agreement, as may be changed from time to time with Supplier's written
concurrence. Inspection or failure to inspect on any occasion shall not affect
Company's rights under warranty or other provisions of this Amendment. Supplier
shall make available at no additional cost to Company, such production testing
facilities, labor, data, specifications, procedures and such other documents,
and assistance as necessary for Company and ▇▇▇▇ Atlantic or ▇▇▇▇ Atlantic's
agent to perform the inspection. In addition, Supplier shall make available to
Company and ▇▇▇▇ Atlantic or ▇▇▇▇ Atlantic's agent, at no additional charge,
data obtained through Supplier's normal routines which show results of
Supplier's inspection, tests and audits of Material as specified in the agreed
upon Quality Program Specifications. Such data shall be sufficient to
demonstrate that the Material meets all quality and reliability requirements.
27.3 Commitment to quality is a primary requirement of this Amendment
and as used herein shall mean conformance to the terms, conditions and
specifications of this Amendment. Supplier will ensure continued quality
improvement in the Materials covered in this Amendment. Supplier will
demonstrate commitment to a "Quality Improvement Process" by providing (i) a
published statement of its quality policy signed by an officer of the company;
(ii) an established means of measuring and reporting customer satisfaction;
(iii) a quality training and awareness program; (iv) a continuous Quality
Improvement Process; (v) an established means of monitoring conformance to
requirements for Material and/or Services; and (vi) an established in-coming
"Material Quality Inspection Program." Further, Supplier shall implement and
document a quality system(s) that meets the requirements in ISO 9000 and
Bellcore documents, GR-1252-CORE, "Quality System Generic Requirements for
Hardware," and TR-NWT-000179, "Quality System Generic Requirements for
Software." Upon Company's written request, Supplier agrees to allow Company and
▇▇▇▇ Atlantic or ▇▇▇▇ Atlantic's agent to conduct on-site reviews at the
Supplier's hardware manufacturing and software development facility(s) to verify
compliance with requirements. Supplier also agrees to develop corrective action
plans for any quality system deficiencies that may be detected during these
periodic on-site reviews, and submit these to the Company and ▇▇▇▇ Atlantic or
▇▇▇▇ Atlantic's agent within thirty (30) days after the review. Further,
Supplier agrees to use its commercially reasonable best efforts to implement
these corrective action plans within six (6) months after the review.
27.4 Supplier agrees to abide by and meet all applicable provisions of
the Quality and Reliability Specifications in Appendix I to the FSN Agreement.
Any existing or anticipated noncompliance by Supplier with such Specifications
will be disclosed by Supplier to Company in writing on or before July 26, 1996
to enable Company to notify ▇▇▇▇ Atlantic thereof pursuant to the FSN Agreement.
Such notice from Supplier shall include a written schedule
31
pursuant to which Supplier shall cure such instances of noncompliance. To the
extent ▇▇▇▇ Atlantic waives any obligation of Company to comply with such
Specifications for a stated period of time under this FSN Agreement, Company
agrees to waive such obligation for Supplier to comply under this Amendment for
the corresponding period of time. The parties acknowledge that ▇▇▇▇ Atlantic's
acquiescence in or agreement to a schedule under which Supplier or Company shall
cure any noncompliance shall not constitute a waiver by ▇▇▇▇ Atlantic.
28.0 TROUBLE REPORTS
28.1 Supplier acknowledges that ▇▇▇▇ Atlantic must reduce its Access
Subnetwork Trouble Report Rate by at
[*****************************************************]. Supplier's Material, as
part of ▇▇▇▇ Atlantic's FSN, will contribute to meeting this Objective. Supplier
agrees to assist Company in supporting ▇▇▇▇ Atlantic's Overall Objective by
providing reliability and other information, including but not limited to
Failures in Time (FIT) Rates for Material, and will provide additional support
and expertise which may contribute to the specification and achievement of ▇▇▇▇
Atlantic's objectives if requested by Company, at no cost to Company.
29.0 GENERAL FSN SUPPORT
29.1 The parties acknowledge that the FSN Agreement and concomitant
Appendices contain performance obligations which are intended to be performed by
Company and Supplier individually and, in some instances, Company and Supplier
together. With respect to those obligations of the FSN Agreement and Appendices
related to content and/or Material to be provided by Supplier, Supplier agrees
to provide the same in a timely manner and to cooperate with and support Company
generally in the provision to ▇▇▇▇ Atlantic and the ▇▇▇▇ Atlantic Affiliates of
the FSN.
30.0 COOPERATIVE PROJECT DEVELOPMENT MANAGEMENT
30.1 Supplier agrees to participate with Company and ▇▇▇▇ Atlantic
throughout the product life cycle to assure that all Material and services are
delivered on time, and that they meet all requirements, including functionality,
maintainability, quality and reliability. Supplier also agrees to assist Company
with [********] and testing work associated with the ASE to the extent required
to make the ASE function with other vendor's equipment. Within thirty (30) days
after execution of this Amendment, a core management team(s) comprised of
representatives of Company, Supplier and ▇▇▇▇ Atlantic will be established. This
core management team will review, assess and take corrective action, where
appropriate, in the areas of project management, risk
32
management and quality assurance. Supplier agrees it will actively participate
on this team and share information with the team as required.
31.0 CATACLYSMIC MARKETPLACE EVENT
31.1 Except as otherwise expressly agreed by the parties in writing,
the parties agree that nothing contained in the clause "Cataclysmic Marketplace
Event" in the Agreement shall affect or limit the rights and obligations of
either party under this Amendment.
32.0 OTHER TERMS AND CONDITIONS
32.1 When not inconsistent with the clause "Engineering Changes" in the
Agreement, Company shall issue EC/CAR in writing to notify Supplier of
unsatisfactory conditions or performance of Material which Company believes
requires a change in the design, manufacturing process or installation and
engineering instructions. Supplier shall provide a written acknowledgment to
Company within ten (10) working days stating that Supplier has received and will
act on the EC/CAR. Supplier shall provide a written final report to each EC/CAR
within ninety (90) days or for design related conditions within 120 days of
receipt of such EC/CAR. This report shall include a plan for resolving the
EC/CAR and an estimated schedule for implementing the plan. To the extent not
inconsistent with this Amendment, Supplier agrees to administer EC/CAR in
accordance with Bellcore Technical Reference ▇▇-▇▇▇-▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ for
Engineering Complaints and Operational Trouble Reports. Nothing herein shall
limit Supplier's obligations under the clauses entitled "Engineering Changes"
and "Warranty" of the Agreement, as modified by this Amendment.
32.2 The clause "Insignia" in the Agreement is amended to add the
following, "Material rejected or not purchased by Company which utilized such
Insignia shall have all such Insignia removed prior to any sale, use or
disposition thereof. Supplier agrees to indemnify and hold Company harmless from
any claim, loss or damage arising out of Supplier's failure to do so."
32.3 Subsection (c) of the clause "Marking" in the Agreement is amended
as follows, "(c) markings in accordance with the requirements outlined in
Technical Reference 52001, dated October 1985 and Bellcore Documents
#TR-STS-000485, TR-STS-000383, TR-ISD-000325, TR-TSY-000081, and KS-23490, as
amended from time to time."
32.4 The clause "Packing" in the Agreement is hereby amended to insert
in the first line [****************] after the word "Supplier" and to insert the
following two (2) sentences after the first sentence: [**********************]
33
[********************************************************************].
Electrostatic Shielded Packaging is defined herein as packaging that meets the
applicable requirements for "ELECTROSTATIC SHIELDING TYPE" packaging as
prescribed in Electronic Industries Association (EIA) Interim Standard IS-5-A
("Packaging Material Standards for ESD Sensitive Items")."
32.5 The first paragraph of Appendix F is hereby amended to state:
Supplier agrees to perform and administer all "Product Changes" in accordance
with ▇▇▇▇ Communications Research Technical Reference No.
TR-EOP-000209, Issue 5, titled "Guideline for Product Change Notices",
which is incorporated herein by reference, except as stated in (a) and
(b) below:
(a) The last sentence under 3.01 is changed to read, "Suppliers
are obligated to announce such Product Changes to their
Products throughout the life of the Product."
(b) The third and fourth sentences under 8.01 are changed to read,
"In most cases the PIC stock should be used for the rotational
seed stock. In unusual situations, the Supplier may provide a
seed stock."
32.6 The second sentence in the first paragraph of the clause "Repairs
Not Covered Under Warranty" in the Agreement is amended as follows:
Material to be repaired under this clause will be returned to a location
designated by Supplier, and unless otherwise agreed upon by Supplier
and Company, Supplier shall ship the repaired Material which meets the
specifications within an average of [***************] days of receipt
of the defective or non-conforming Material or replace such Material
within and average of [****************], with shipment and risk of
loss to Supplier.
32.7 The clause "Storage of Paid for Stock" in the Agreement is hereby
amended as follows:
(a) the first sentence shall state, "All Material invoiced to Company
in accordance with the INVOICING FOR STOCK clause shall be marked conspicuously
as Company's property, and safely stored by Supplier separately from other
material stocks, without charge to Company for a period of [*************], and
shall be shipped out as ordered by Company, except as provided in Section 18.5."
34
(b) the third sentence shall state, "Beyond the [*************],
charges to Company shall be mutually agreed to."
32.8 The last sentence of the second paragraph of the clause "Technical
Support" in the Agreement is amended as follows, "After the
[*********************] period, and for a period of [*************************]
after the expiration of this Agreement, charges for field service technical
support via telephone or on site, will be as shown in Attachment G." The
following paragraph shall be added to this clause "Technical Support":
If requested, Supplier agrees to provide on-site support [**********] to
Company (i) for the Beta Test and first service application of Material
in geographic areas defined by Company, and (ii) for the first service
application of each new release. Otherwise, technical support shall be
billable at Supplier's then current rates.
32.9 The last sentence of the clause "Title and Risk of Loss" in the
Agreement is amended to delete, "....and risk of loss and damages shall pass to
Company."
32.10 Notwithstanding anything contained in the clause "Bar Code
Shipping and Receiving Labels" in the Agreement to the contrary, Supplier agrees
to abide by and meet the requirements of the "Telecommunications Industry Forum
(TCIF)" and ▇▇▇▇ Atlantic's "Packaging, Packing, Palletization and Marking
Requirements" specifications as defined below. If requested by Company, Supplier
further agrees to meet with Company quarterly, at Company's warehouse locations,
to review all non-compliance issues and to agree upon a written schedule to cure
such instances of non-compliance.
(a) The following Telecommunications Industry Forum (TCIF)
specifications:
1. Shipping and Receiving Transaction Bar Code Label
specification, BC/93-001;
2. Implementation Guideline to Package Labeling, BC/93-002;
3. Product Package Label Specification, BC/89-003;
4. Guideline for Identification and Bar Code labeling of Cable
Reels (8/91), if applicable; and
(b) ▇▇▇▇ Atlantic specification: Packaging, Packing, Palletization and
Marking Requirements, specification SR-NWT-002759.
35
32.11 The following provision shall apply to transaction conducted under this
Amendment in lieu of the clause "Force Majuere" in the Agreement:
Neither of the parties shall be held responsible for any delay or failure in
performance hereunder caused by fires, strikes, embargoes, requirements
imposed by Government regulation, civil or military authorities, acts
of God or by the public enemy or other similar causes beyond such
party's control. However, Supplier's delay or failure to perform shall
not be excused by a default of any of its subcontractors or suppliers
unless such default arises out of causes beyond the control of both the
Supplier and its subcontractor or supplier and without the fault or
negligence of either of them, and unless the supplies or services to be
furnished by such subcontractor or supplier are not obtainable from
other sources. If such contingency occurs, the party injured by the
other's inability to perform may elect to: (a) terminate this Amendment
or part thereof as to Material or Services not already received; (b)
suspend this Amendment for the duration of the delaying cause, buy or
sell elsewhere Material and/or Services to be bought or sold hereunder,
and deduct from any commitment the quantity bought or sold for which
commitments have been made elsewhere; or (c) resume performance
hereunder once the delaying cause ceases with an option in the injured
party to extend the period, hereunder up to the length of time the
contingency endured. Unless written notice is given within thirty (30)
days after such injured party is apprised of the contingency, (c) shall
be deemed selected.
32.12 (a) Supplier represents and warrants that, where applicable, all
products and Materials provided hereunder will be packaged, labeled, handled and
shipped in accordance with all applicable federal, state, county and local laws,
rules, regulations, orders and other lawfully mandated requirements. This
obligation shall include but not be limited to compliance with the following:
(i) all product labeling and other requirements imposed by the New
Jersey Worker and Community Right-to-Know Act, N.J.S.A. 34:5A-1, et. seq., and
all regulations adopted pursuant thereto;
(ii) all product labeling and other requirements imposed by the
Occupational Safety and Health Act of 1970 (OSHA), as amended, and all
regulations adopted pursuant thereto, including the Hazard Communication
Standard regulations;
36
(iii) all requirements of the Hazardous Material Transportation Act,
the Toxic Substance Control Act, as amended, the Federal Insecticide, Fungicide
and Rodenticide Act (FIFRA) and the New Jersey Pesticide Control Code (N.J.A.C.
7:30).
(b) All unit packages or other substances which must be disclosed under
applicable law must bear a label indicating the following:
(i) name of the product;
(ii) chemical name and Chemical Abstracts Service (CAS)
number of the five (5) most predominant substances in a
container, whether they are hazardous or nonhazardous;
(iii) chemical name and CAS number for all hazardous
substances constituting greater than one percent (1%) of the
product (or greater than 0.1% for carcinogens, mutagens, and
teratogens);
(iv) appropriate hazard warnings; and,
(v) the name and address of the manufacturer, importer,
or other responsible party.
(c) The label must be a sign, emblem or sticker of durable nature
affixed to or stenciled onto a container. Labels must be in English, easy to
read, not obscured, and prominently displayed on the unit package.
(d) In addition, Supplier agrees to furnish Company on or before the
date of delivery of Material, and thereafter upon request of Company, a copy of
the applicable Material Safety Data Sheet(s) (MSDS) for all Material provided
hereunder, in accordance with the OSHA requirements cited above. In the event of
any change in the composition of the Material during the course of the
Agreement, Supplier shall provide Company an updated MSDS and Supplier must
update the product label accordingly.
(e) Supplier agrees to defend, indemnify and hold harmless Company for
any loss, damage, penalty, fine or liability (including any costs and attorney's
fees) sustained because of Supplier's noncompliance with the provisions of this
Section 32.12.
32.13 The clause "Infringement" of the Agreement is hereby amended to
add the following paragraph:
If the use and/or sale of such Material is enjoined, Supplier
shall, at its own expense and option, procure for Company the
37
right to continue using or reselling Material, or replace the
infringing Material or part thereof with substantially equivalent
Material or parts free of infringement, or modify the Material or parts
thereof so that they will be free of infringement, or remove infringing
Material in its entirety and refund to Company the full Material
purchase price and the costs associated with removal and transportation
of such Material.
32.14 If requested by Company, Supplier will to the best of its ability
provide information and assistance required in the planning, conduct and
research associated with regulatory matters in connection with the Material to
be furnished hereunder.
32.15 "Interconnect Information" is that non-proprietary technical
information necessary to comply with those FCC requirements designed to provide
Company's customers a functional interface with the Material supplied by
Supplier hereunder. For a period of ten (10) years after providing such
Material, Supplier shall, upon request, provide to Company Interconnect
Information.
33.0 CONFIDENTIALITY AND NON-DISCLOSURE
33.1 The parties hereby reaffirm the validity of the Non-Disclosure
Agreement dated July 25, 1995 between Supplier and Company's
predecessor-in-interest, AT&T Corp. (the "Non-Disclosure Agreement"). For
purposes of this Amendment, the term "INFORMATION" (as defined in the
Non-Disclosure Agreement) shall also include the FSN Agreement (including,
without limitation, the General Purchase Agreement between ▇▇▇▇ Atlantic and
Company) and any other information provided to Supplier, in any form or medium,
which is the confidential and/or proprietary information of Company or ▇▇▇▇
Atlantic. Notwithstanding anything contained in Paragraph 1 of the
Non-Disclosure Agreement to the contrary, Supplier agrees to hold the FSN
Agreement in confidence, shall use the FSN Agreement only for the purpose of
performing Supplier's obligations and duties under this Amendment and shall not
disclose the FSN Agreement to any third party without prior written approval of
the Company and ▇▇▇▇ Atlantic, except to the extent that Supplier is required to
disclose the [******] Agreement to any governmental agency under applicable
laws, rules, and regulations and, in such instance, the parties shall work
together to [********************] of those provisions of the [******] Agreement
which ▇▇▇▇ Atlantic or Company determines to contain
[********************************]. All other terms and conditions of the
Non-Disclosure Agreement shall remain in full force and effect.
38
34.0 COUNTERPARTS
34.1 This Amendment may be executed in two or more counterparts, and by
each party on the same or different counterparts, but all of such counterparts
shall together constitute one and the same instrument and agreement of the
parties hereto.
IN WITNESS WHEREOF, Company and Supplier have executed this Amendment
by their authorized representatives.
BROADBAND TECHNOLOGIES, INC. LUCENT TECHNOLOGIES INC.
By: /s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name (Print): ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ Name (Print): ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & CEO Title: President, North American
Region
Date: July 16, 1996 Date: July 16, 1996
39
EXHIBIT A
ESCROW AGREEMENT
["INTENTIONALLY DELETED"]
40
EXHIBIT B
PRICING
See Attached.
41
[zz]
EXHIBIT B
BBT PRICING FOR ▇▇▇▇ ATLANTIC FSN
------------------------------------------------------------------------------------------------------------------------------------
AT&T BBT BBT PRODUCTION DESCRIPTION UNIT OF MEASURE UNIT
COMCODE PRODUCT PRICE
NUMBER
------------------------------------------------------------------------------------------------------------------------------------
[************]
▇▇▇ ▇▇▇ [****************************************] [*************] [*********]
▇▇▇ ▇▇▇ [***********************************************] [*************] [*********]
▇▇▇ ▇▇▇ [******************************************************************************] [*************] [*********]
▇▇▇ ▇▇▇ [*******************************************************************] [*************] [*********]
▇▇▇ ▇▇▇ [***********************************************************************] [*************] [*********]
▇▇▇ ▇▇▇ [*****************************************************************] [*************] [*********]
▇▇▇ ▇▇▇ [****************************************************] [*************] [*********]
[************************]
▇▇▇ ▇▇▇ [**************************************************************] [*************] [*********]
▇▇▇ ▇▇▇ [****************************] [****************] [*********]
[******************]
▇▇▇ ▇▇▇ [*****] [****] [******]
▇▇▇ ▇▇▇ [********************] [****] [*******]
▇▇▇ ▇▇▇ [********************] [****] [*******]
------------------------------------------------------------------------------------------------------------------------------------
[******************************************]
EXHIBIT B
BBT PRICING FOR ▇▇▇▇ ATLANTIC FSN
----------------------------------------------------------------------------------------------------------------------------
AT&T BBT BBT PRODUCTION DESCRIPTION UNIT OF MEASURE UNIT
COMCODE PRODUCT PRICE
NUMBER
----------------------------------------------------------------------------------------------------------------------------
[************]
[***********] [*********] [****************] [*************] [*****]
[***********] [************] [******************] [*************] [*********]
[************************]
[***] [***] [****************************] [**********]
[***********] [************] [*************************] [***************] [*********]
[***********] [************] [***************************] [***************] [*********]
[***********] [*********] [*************] [*************] [*****]
----------------------------------------------------------------------------------------------------------------------------
42
*Base items not subject to 10% commission.
EXHIBIT B
BBT PRICING FOR ▇▇▇▇ ATLANTIC FSN
----------------------------------------------------------------------------------------------------------------------------------
AT&T BBT BBT PRODUCTION DESCRIPTION UNIT OF MEASURE UNIT
COMCODE PRODUCT PRICE
NUMBER
----------------------------------------------------------------------------------------------------------------------------------
[*********************]
[**********] [********] [*******************] [****] [*********]
[***********] [********] [****************************] [****] [*******]
[***********] [********] [**********************] [****] [*******]
[***********] [********] [**********************] [****] [*******]
[***********] [********] [****************************] [****] [******]
[***********] [********] [*********************] [****] [******]
[***********] [********] [*********************] [****] [******]
[***********] [********] [*******************************] [****] [******]
[***********] [********] [*******************************] [****] [******]
[******************]
[***********] [********] [***************************] [****] [*********]
[***********] [********] [************************************] [****] [*********]
[***********] [********] [*****************************] [****] [*********]
[***********] [********] [********************************] [****] [*********]
[***] [********] [********************************] [****] [*********]
[***********] [********] [***********************************] [****] [*********]
[***********] [********] [*********************************] [****] [*********]
[***********] [********] [*********************************] [****] [*********]
[***********] [********] [******************************] [****] [*********]
----------------------------------------------------------------------------------------------------------------------------------
[******************]
[***********] [********] [*****************************] [****] [******]
[***********] [********] [*****************************] [****] [*******]
[***********] [********] [***********************************] [****] [*******]
[***********] [********] [***********************************] [****] [*******]
[***********] [********] [******************************] [****] [*******]
[***********] [********] [******************************] [****] [*******]
[***********] [********] [*************************] [****] [******]
[***********] [********] [*****************************] [****] [******]
[***********] [********] [*****************************] [****] [******]
--------------------------------------------------------------------------------------------------------------------------------
*Base items not subject to 10% commission.
43
EXHIBIT C
[******************************]
See Attached.
44
[**************************************] ________
1996
[*******************************************]
[*********************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*********************************************************]
[*********************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*************]
[*********************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************]
[*********************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*************************************************************
45
*******************************************************************************
*******************************************************************************
****]
[*********************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************]
[*********************************************************************
*******************************************************************************
****************************************************************]
[*************]
[******************]
[************************]
[****]
[*****]
[************]
[***************]
[************************]
[****]
[*****]
46
EXHIBIT D
Nonconformance Provisions
See Attached.
47
EXHIBIT D
DELIVERY [*********** [***** [***********
DATE ********] ***] *******]
[**********] [****] [******************************] [***] [***] [***]
[*************************************************************************]
[***********] [****] [*******] [********] [*******] [**********]
[****] [*******] [********] [*******] [**********]
[*******************************]
[*************] [****] [********] [********] [******] [**********]
[****] [********] [*******] [******] [**********]
[***] [********] [*******] [******] [**********]
[**********************************]
[**************] [***] [****************] [********] [*******] [**********]
[***********] [***] [*******] [********] [*******] [**********]
[***********] [*************] [****************************] [***]
[****] [*********************] [*******] [*******] [**********]
[*****] [***************************] [*******] [*******] [**********]
[****] [*******] [*******] [*******] [**********]
[***] [*******] [*******] [*******] [**********]
[****************************************************************************]
[***********] [****] [*******] [*******] [*******] [**********]
[*****] [*******] [*******] [*******] [**********]
[****] [*******] [*******] [*******] [**********]
[***] [*******] [*******] [*******] [**********]
[*****************************************************************************************]
[**************] [****] [*******] [*******] [*******] [**********]
[****] [*******] [********] [*******] [**********]
[***] [*******] [********] [*******] [**********]
48
DELIVERY [*********** [***** [***********
DATE ********] ***] *******]
[**********************************]
[***********] [****] [*******] [********] [*******] [**********]
[****] [********] [*******] [*******] [**********]
[***] [********] [*******] [*******] [**********]
[*****************************************************************************************************]
[************] [****] [********] [*******] [*******] [**********]
[****] [********] [*******] [*******] [**********]
[***] [********] [*******] [*******] [**********]
[*********************************************************]
49
NOTES:
[*] [*******************************************************************************]
[**] [****************************************************************]
[****************************************************************************]
[**********************************************]
[***************************************]
[*******************************]
[*******************************]
[********************************************************************]
[**] [******************************************************************************************************************]
[**] [*******************************************************************************************************************
********************************************************************************************************************
*****************************]
[**] [******************************************************************************************************************]
[**] [*************************]
[****] [**********************************************************************************************************
******************************************************************]
[***********************************************]
[***] [**********************************************************************************************************
***********************************************************************************************************
************************************]
[**] [*********************************************************************************************]
[**] [*************************************************************]
[*********************************************************]
[**] [***********************************************************************************]
[***********************************]
[**********************************************************************]
[******************************************************]
[***********************************************************************************************]
[***********************************************************]
[*****************************************************]
[**************************************************]
[*******************************************************************************************************************
********************************************************************************************************************
********************************************************************************************************************
********************************************************************************************************************
********************************************************************************************************************
********************************************************************************************************************
**********************************************************************************************]
[******************************************************************************]
[**********************************************************************************************
***********************************************************************************************
***********************************************
[**] [*************************************************************************************
**************************************************************************************
**********************************************************]
[**] [*************************************************************************************
**************************************************************************************
**************************************************************************************
***********************]
[**] [*************************************************************************************
**************************************************************************************
**************************************************************************************
**************************************************************************************
**************************]
50
[**] [*************************************************************************************
**************************************************************************************
************************************************************]
51