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PURCHASE AGREEMENT
BETWEEN
AT&T CORP.
AND
BRITE VOICE SYSTEMS, INC.
AND
BRITE VOICE SYSTEMS GROUP, LTD.
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
AT&T PROPRIETARY (RESTRICTED)
SOLELY FOR THOSE PERSONS HAVING A NEED TO KNOW
USE PURSUANT TO COMPANY INSTRUCTIONS
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TABLE OF CONTENTS
ARTICLE 1 -- NATURE OF THE AGREEMENT
1.1 STATEMENT OF PURCHASES
1.2 SUPPLEMENTAL AGREEMENT
1.3 DEFINITIONS
1.4 REPRESENTATIVES
1.5 SURVIVAL OF OBLIGATION
1.6 DURATION
ARTICLE 2 -- ORDERING AND DELIVERY
2.1 FORM OF ORDER
2.2 PACKAGING AND SHIPPING
2.3 TITLE TO MATERIAL; RISK OF LOSS
2.4 CFC PACKAGING
2.5 HEAVY METALS IN PACKAGING
2.6 OZONE DEPLETING SUBSTANCE LABELING
2.7 DELIVERY
2.8 METHOD OF DELIVERY
2.9 TIMELY PERFORMANCE
2.10 MONTHLY SHIPMENT AND INSTALLATION REPORTS
2.11 CHANGES IN SCOPE
2.12 CHANGES TO DELIVERABLES BY SUPPLIER
2.13 THIRD PARTY EQUIPMENT
ARTICLE 3 -- PRICES AND PAYMENT
1. AGREEMENT PRICE
2. SOFTWARE PRICE AND PAYMENT
3. PRODUCT PRICE AND PAYMENT
4. TERMS NO LESS FAVORABLE
3.5 BILLING AND PAYMENT
3.6 TAXES
3.7 RECORDS
ARTICLE 4 -- INTELLECTUAL PROPERTY RIGHTS
4.1 CONFIDENTIAL INFORMATION
4.2 SUPPLIER'S INFORMATION
4.3 INFRINGEMENT
4.4 INVENTIONS
4.5 DEVELOPED INFORMATION
4.6 AUTHORSHIP AND COPYRIGHT
4.7 LICENSES
4.8 EXCLUSIVITY DESIGNATION
4.9 SPEECH DATA AND SPEECH TECHNOLOGY
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
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ARTICLE 5 -- RISK MANAGEMENT
5.1 TERMINATION, RIGHTS AND REMEDIES
5.2 INDEMNITY
5.3 INSURANCE
5.4 NETWORK OUTAGE
5.5 LATE DELIVERY
5.6 SERVICE AVAILABILITY
5.7 LIMITATION ON DAMAGES
ARTICLE 6 -- PURCHASE OF PRODUCT
6.1 PRODUCT ACCEPTANCE
6.2 DOCUMENTATION
6.3 ENVIRONMENTAL/RELIABILITY TESTING
6.4 FCC REGISTRATION
6.5 FLOOR PLAN DATA SHEET
6.6 FUTURE IMPROVEMENTS AND BENEFITS
6.7 ASSURANCE OF SUPPLY
6.8 INSIGNIA
6.9 MARKING
6.10 RADIO FREQUENCY STANDARDS
6.11 SUPPLIER TESTING
6.12 TRAINING
6.13 SPARES
ARTICLE 7 -- WARRANTY, MAINTENANCE AND SUPPORT SERVICES
7.1 WARRANTY
7.2 SOFTWARE/PRODUCT SERVICES
7.3 WARRANTY AND MAINTENANCE SERVICES
7.4 REPAIR AND MAINTENANCE SERVICES WARRANTY
7.5 REPAIR UNDER WARRANTY
7.6 REPAIR NOT UNDER WARRANTY
7.7 REPAIR PROCEDURES
7.8 REPAIR AND REPLACEMENT PARTS/SERVICES-EMERGENCY SERVICE AND DISASTER
RECOVERY
7.9 REPAIR AND REPLACEMENT PARTS/SERVICES - CONTINUING AVAILABILITY
7.10 SUPPORT OF SELF AND THIRD PARTY MAINTENANCE
7.11 TECHNICAL SUPPORT
7.12 DISPOSITION OF RECURRING NO-TROUBLE-FOUND RETURNS
7.13 FAILURE MODE ANALYSIS OF FAILED COMPONENTS
ARTICLE 8 -- SOFTWARE
8.1 STANDARD OF PERFORMANCE AND ACCEPTANCE SOFTWARE
8.2 CANCELLATION
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
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8.3 MEDIA
8.4 LICENSE FEE
8.5 CENTRALIZED MAINTENANCE
8.6 ENHANCEMENTS AND MAINTENANCE
8.7 INTELLECTUAL PROPERTY RIGHTS
8.8 MODIFICATIONS
8.9 REDESIGNATION OR TRANSFER OF DESIGNATED SITE OR COMPUTER
8.10 REMOTE ACCESS
8.11 RISK OF LOSS
8.12 SOFTWARE AND PROGRAMMING AIDS
8.13 SOURCE PROGRAMS AND TECHNICAL DOCUMENTATION
8.14 TRAINING AND TECHNICAL SERVICE
8.15 SOFTWARE LICENSE
8.16 SOFTWARE WARRANTY
ARTICLE 9 -- ENGINEERING & INSTALLATION SUPPORT
9.1 STATEMENT OF WORK
9.2 COMPANY STORED EQUIPMENT AND MATERIAL
9.3 TITLE TO MATERIAL FURNISHED BY COMPANY
9.4 INSPECTION AND REJECTION OF WORK
9.5 SERVICE WARRANTY
9.6 REJECTION AND REPLACEMENT, OR REMOVAL OF WORK AND MATERIAL
9.7 TOOLS AND EQUIPMENT
9.8 BREAKAGE, DISAPPEARANCE, AND CONDITION
9.9 CLAIMS AND LOSSES
9.10 REPORTING DEFECTS
9.11 BUILDING PERMIT, LICENSES, NOTICE
9.12 CONTROL OF WORK
9.13 SERVICE RECORDS
9.14 SUSPENSION OF WORK
9.15 CLEAN UP
9.16 RELATIONSHIP
ARTICLE 10 - MISCELLANEOUS
10.1 PRODUCT EVOLUTION
10.2 ASSIGNMENT
10.3 CAPTIONS
10.4 CHOICE OF LAW
10.5 COMPLIANCE WITH LAW
10.6 EXPORT CONTROL
10.7 FORCE MAJEURE
10.8 GOVERNMENT CONTRACT PROVISIONS
10.9 GOVERNMENT REQUIREMENTS
10.10 HARMONY
10.11 HAZARDOUS MATERIALS
10.12 IDENTIFICATION CREDENTIALS
10.13 IMPLEADER
10.14 ISO 9000
10.15 LABOR RELATIONS
10.16 NON-EXCLUSIVE RIGHTS
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS
10.17 NO LIENS
10.18 OTHER CONTRACTS; COOPERATION
10.19 PUBLICITY; ADVERTISING
10.20 QUALITY SYSTEM AUDIT
10.21 INDEPENDENT CONTRACTOR
10.22 RELEASES VOID
10.23 RIGHT TO ENTRY
10.24 SAFETY OF WORK
10.25 SEVERABILITY
10.26 SUPPLIER'S EMPLOYEES
10.27 SUPPLIER INTERFERENCE
10.28 SUPPLIER'S SUBCONTRACTS
10.29 UTILIZATION OF MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES
10.30 WAIVER
10.31 WORK HEREUNDER
10.32 WRITTEN NOTICE
10.33 AT&T'S SERVICE CONTINUITY
10.34 MEDIATION
10.35 ELECTRONIC DATA INTERCHANGE (EDI)
10.36 ENTIRE AGREEMENT
EXHIBITS:
THESE EXHIBITS MAY BE AMENDED FROM TIME TO TIME BY MUTUAL WRITTEN AGREEMENT OF
THE PARTIES WITHOUT THE NECESSITY OF AMENDING THIS AGREEMENT. THE FOLLOWING
EXHIBITS ARE HEREBY MADE PART OF THIS AGREEMENT:
EXHIBIT A - PRICES AND PAYMENT SCHEDULE FOR THE ******* SERVICE
EXHIBIT B - ******* SERVICE AND CONFIGURATION DESCRIPTION
EXHIBIT C - EXCLUSIVITY DESIGNATION FOR ******* - RELEASE 1.0
EXHIBIT D - RTU LICENSE AND DEVELOPMENT DISCOUNT SCHEDULE
EXHIBIT E - PRICING FOR PREPAID CARD
EXHIBIT F - ENGINEERING & INSTALLATION SUPPORT "GENERAL CONDITIONS"
EXHIBIT G - MINORITY AND WOMEN'S BUSINESS ENTERPRISE (MWBE)
EXHIBIT H - SEVERITY LEVELS
EXHIBIT I - WARRANT AGREEMENT
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
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[LOGO] AT&T
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ACCEPTANCE SHALL BE INDICATED BY
SIGNING AND RETURNING DUPLICATE TO:
Brite Voice Systems AT&T Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇.
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Attn. ▇▇▇ ▇▇▇▇▇▇ Attn. ▇▇▇▇▇▇ ▇▇▇▇▇
WITNESSETH:
That in consideration of the Agreement ("Agreement") addressed herein, AT&T
Corp.(hereafter "Company"/AT&T), having an office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇/▇▇▇, ▇.,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and Brite Voice Systems, Inc. and Brite Voice Systems
Group Ltd. (hereafter "Supplier"), having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ respectively, do hereby agree as follows.
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
ARTICLE 1 -- NATURE OF THE AGREEMENT
1.1 STATEMENT OF PURCHASES. In accordance with the terms and conditions of
this Agreement, Supplier agrees to sell and install Product, develop and/or
license Software and provide Services , as ordered by AT&T and its affiliated
companies during the term of this Agreement as set forth in Clause 1.6 DURATION.
Such Product, Software and Services, (hereafter "Deliverables"), as specified
and described in Orders, Supplemental Agreements or TCLs placed against this
Agreement may be for use by AT&T or its affiliates and subsidiaries. An Order
shall be used for the purpose of procuring Deliverables. Each Order shall
reference this Agreement and any applicable Supplemental Agreement thereby
incorporating the terms and conditions of each and will contain the information
shown in Clause 2.1 FORM OF ORDER. It is understood that the Deliverables
furnished under this Agreement will be on an "as ordered" basis and that this
Agreement represents no minimum obligations upon AT&T or its affiliated
companies to place Orders, Supplemental Agreements or TCLs on Supplier. The
Deliverables shall be furnished to the satisfaction of AT&T.
AT&T forecasts that the value of this Agreement over the next three (3) years
will be between fifty (50) to sixty (60) million dollars, however, AT&T commits
to purchase the amount specified on page one (1) of Exhibit A "Prices and
Payment Schedule for the ******** Service" for the service and configuration
contained in Exhibit B ******** Service and Configuration Description".
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
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In consideration for AT&T entering into this Agreement, on the date hereof, the
Supplier is issuing to AT&T a warrant to purchase up to one million four hundred
thousand (1,400,000) shares of Common Stock, no par value, of the Supplier,
subject to adjustment, pursuant to the Warrant Purchase Agreement, contained in
Exhibit I "Warrant Agreement" attached hereto and made a part hereof, dated as
of the date hereof, by and between AT&T and the Supplier.
1.2 SUPPLEMENTAL AGREEMENT. Company reserves the right to supplement or
modify this Agreement through the use of Supplemental Agreements to be
negotiated in good faith between the parties.
1.3 DEFINITIONS. For the purposes of this Agreement, the following definitions
shall apply:
ACCEPTANCE means that the Company has indicated that the Product and Software
are, to the extent applicable, installed, implemented, and operating according
to specifications, and that associated items, such as documentation and training
if applicable, are included.
BASE FIRMWARE means Supplier's pre-existing firmware. Base Firmware is
independently funded by Supplier and is not exclusive to Company.
COMPANY'S AGREEMENT REPRESENTATIVE means the person designated by Company as
the point of contact regarding correspondence (written, verbal or electronic)
about this Agreement from either Company or Supplier.
COMPANY'S ORDER MANAGEMENT REPRESENTATIVE means the person designated by Company
as the person responsible for the creation, transmittal, tracking, and retention
of Orders, Supplemental Agreements or TCLs under this Agreement.
COMPANY'S SPECIFICATIONS means Company's technical requirements for Product,
Software and/or Services as specified in documents including, but not limited
to, FSDs and interface specifications or acceptance test documents.
COMPANY'S TECHNICAL REPRESENTATIVE means the person designated by Company as the
person responsible for providing technical specifications and answering
questions and providing clarification regarding specifications.
COMPONENTS means the replaceable computer subassemblies contained in the
Product, such as the computer chassis, voice and network cards, disk and tape
drives, racks and switches.
DELIVERABLES means Product, Services, and Software as specified in Orders,
Supplemental Agreements or TCLs placed against this Agreement.
DEVELOPMENT MANAGEMENT means the process of monitoring development by Supplier
to ensure that such development meets specific Company's requirements and needs.
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
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ENHANCEMENTS means all software changes relating to bug fixes, problem
resolutions and improvement of the functionality of any existing Feature,
including new releases, product improvements, system modifications, updates,
upgrades, field modifications and the like, but not including new functionality
associated with any Feature.
FEATURE means Software that implements a communications service and related
Supplier provided technical services (systems engineering, integration planning
& test, technical planning, Software design/evolution, consulting) documented in
a mutually agreed upon writing as a Feature.
FIRMWARE means a combination of (1) hardware and (2) Software represented by a
pattern of bits contained in such hardware.
FOA means First Office Application, which is the first installation of a
Software Feature in Company's test network.
FFA means First Field Application, which is the first installation of a Software
Feature in Company's live network.
FRF means Feature Request Form, which is submitted by Company to Supplier as the
request for delivery of a Feature or package of Features. The FRF number is
utilized by Company and Supplier to track a Feature or packages of Features.
FSD means Feature Specification Document which is created and owned solely by
Company, and which defines one or more specific Feature requirements to be
implemented by Supplier upon mutual agreement.
GENERIC RELEASE means a new Software Release that is the first release of
Platform Feature Software or Service Feature Software or both, or includes
Software which replaces the entire set of Platform Feature Software or Service
Feature Software or both.
INTEROPERABILITY means the ability of year 2000 compliant Software developed
hereunder to operate with other Software used by Company which may deliver
records, receive records, process such received records or interact with such
Software in the course of processing data.
ITN means Company's Integrated Test Network, or other test facility as may be
defined by Company.
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MEDIA means any documents, tapes, discs, semiconductor memories or other
material objects or tangible entities primarily adapted to retain and
communicate software fixed therein and represented by details of such media, the
terms including in their meaning any copies of software.
MODIFICATIONS means Company additions to the Software, deletions from the
Software, or merges of the Software with one or more programs owned or licensed
by Company forming an updated and otherwise modified Software.
NON-GENERIC RELEASE means a new Software Release that replaces some subset of a
Software Feature. Also known as a Software Update (SU).
OPERATING SYSTEM SOFTWARE means Software which controls and coordinates the use
of hardware among various application programs and provides an interface between
an application program and computer hardware.
ORDER means Company's form of order in electronic or written format. Each Order
shall be deemed to incorporate the terms and conditions of this Agreement and
the applicable Supplemental Agreement.
ORDERING COMPANY means AT&T or any of its associated corporations,
partnerships, or ventures, both U.S. and foreign, any of which may order under
this Agreement by issuing an Order, Supplemental Agreement or TCL. An associated
corporation, partnership, or venture is an entity, eight percent (8%) of the
voting stock or ownership interest of which is owned directly or indirectly by
AT&T. Any Order, Supplemental Agreement or TCL issued under this Agreement will
be a contractual relationship between the Ordering Company and Supplier and
Supplier shall look only to the Ordering Company for performance of the
Company's obligations under such Order, Supplemental Agreement, or TCL under
this Agreement.
PRODUCT means systems, equipment and parts thereof, including Operating System
Software and Base Firmware, but the term does not mean Software whether or not
Software is part of Firmware.
PRODUCT ACCEPTANCE means Company's acknowledgment that the Product provided or
installed by Supplier have met Company's Acceptance Test.
Q9, Q5, Q4, Q2 and Q1 means the Company Quality Gates as pertain to Orders,
Supplemental Agreements or TCLs under this Agreement as follows:
Q9 Start Development/Commitment Obtained (i.e., both parties have
executed an Order, Supplemental Agreement or TCL to authorize the
start of development)
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Q5 Start Verification
Q4 Start of Customer Acceptance Testing-(start of FOA or start of
testing in ITN)
Q2 Start FFA
Q1 Ready for Deployment
QUALITY PLAN means a document mutually agreed upon between Company and Supplier
that describes criteria for Development Management and acceptance testing
processes, from commitment to deployment, to ensure that each Feature meets or
exceeds Company's expected level of quality.
RELEASE means a Software delivery package which may contain one or more
Features.
SERVICES means the services provided by Supplier with respect to or independent
from Supplier's Products and Software and the operation of Ordering Company's
business including, but not limited to, any type of: (1) professional services
including architecture planning or design, consulting, program management,
system integration and testing/verification; (2) network engineering services
including preparation of equipment specifications, preparation and updating of
office records, and data creation/management services; (3) installation and
equipment removal; (4) outside plant engineering/construction services and cable
mining; (5) maintenance, repair, exchange/replacement, customer technical
support, help desk, and diagnostic services; (6) software development; (7)
initial site/new start, migration, trials, provisioning, retrofitting and
update/upgrade services; (8) training in any form; (9) logistics
(transportation, warehousing, staging, etc.); and (10) such other services as
Supplier may offer and Ordering Company may purchase from time to time.
SEVERITY LEVEL means the priority assigned by Company to a system problem.
SOFTWARE means a computer program consisting of a set of logical instructions
and tables of information which guide the functioning of a central processing
unit; such program may be contained in any medium whatsoever, including hardware
containing a pattern of bits representing such program, but the term "Software"
does not mean or include such medium. Software does not include Operating
System Software or Base Firmware.
SOFTWARE ACCEPTANCE means an acknowledgment by Company that it agrees that
Software provided by Supplier pursuant to an Order, Supplemental Agreement or
TCL has met all the requirements specified.
SOFTWARE SOURCE MATERIAL means Information consisting of all intangible source
programs, technical documentation and other information required for
maintenance, modification or correction of the most current version of the
Software supplied to Company.
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SPECIFICATIONS means the specifications for the Software as set forth in the
Order, Supplemental Agreement or TCL or if not so set forth, shall mean
Supplier's current published specifications and user documentation for the
Software as of the date of the Order, Supplemental Agreement or TCL. Any
provisions contained in Supplier's Specifications in conflict with the
provisions of this Agreement shall be deemed deleted.
SPEECH ALGORITHM PARAMETERS means a set of variables that are adjusted to
maximize recognition accuracy (including, but not limited to, proper rejection
of non-vocabulary speech, noise, and silence) of the Pattern Matching Algorithm
based on a set of test Speech Data.
SPEECH DATA means recordings of the utterances of customers interacting with
real services, or the utterances of other speakers made for the express purpose
of systematically collecting a range of vocabulary from a range of people needed
to represent vocabulary used in real services, including, but not limited to,
the binary data files representing the audio recordings themselves, the
transcriptions of what was spoken (whether in orthographic or phonetic form),
and other explanatory information about the specific circumstances of recording
and speaker, such as source, noise conditions, gender, age, accent, and speech
endpoint locations within the binary data file. Speech Data does not include
Speech Models, Speech Model Creation Algorithms, Speech Pattern Matching
Algorithms, Speech Algorithm Parameters, or Speech Grammars prepared by or on
behalf of Supplier. Speech Data may be used to train Speech Models or to test
the performance of Speech Models, Pattern Matching Algorithms, Speech Algorithm
Parameters and/or Speech Grammars.
SPEECH GRAMMARS means the set of lists of all possible sequences of words
allowable at different points within the call flow developed for a specific
Service Feature. These lists may be developed in many ways, including, as a
predetermined service requirement, or through an analysis of real customer
Speech Data.
SPEECH MODEL means a statistical average of like sounds or words across many
speakers, condensed into a pattern to distinguish one spoken sound or word from
another.
SPEECH MODEL CREATION ALGORITHM means a training algorithm that uses Speech Data
as input to create Speech Model(s).
SPEECH PATTERN MATCHING ALGORITHM means an algorithm that compares incoming
speech, in a pattern-matching task, to all possible Speech Model(s) to produce a
set of best matches of sub-words, words, or sequences of words compared to a
predetermined set of Speech Grammars.
SPEECH TECHNOLOGY means Speech Models, Speech Model Creation Algorithms, Speech
Pattern Matching Algorithms, Speech Algorithm Parameters, Speech Grammars,
Speech Tools.
SPEECH TOOLS means speech utility programs that allow for speech-related
capabilities including, but not limited to, developing phonetic vocabularies,
modifying vocabulary parameters, specifying Speech Grammars or training phonetic
Speech Models.
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SUPPLEMENTAL AGREEMENT: means a contemporaneous or subsequent agreement between
an Ordering Company and Supplier which incorporates all of the terms of this
Agreement, unless specified otherwise.
SUPPLIER'S AGREEMENT REPRESENTATIVE means the person designated by Supplier as
the point of contact regarding correspondence (written, verbal or electronic)
about this Agreement from either Company or Supplier.
SUPPLIER SPECIFICATIONS means Supplier's published specifications and user
documentation describing Product, Software and/or Services.
TECHNOLOGY COMMITMENT LETTER (TCL) means a formal and binding writing signed by
both parties committing to Feature Deliverables. The TCL shall include, but not
be limited to, the following, where applicable: Feature name, FRF number, list
of FSDs, Q4 date, exclusivity status of the Feature, price and/or expense,
payment schedule, important characteristics of each Feature, and other pertinent
information.
USE means use by any individual having authorized access to the computer on
which the Software is operated.
WARRANTY PERIOD means the period of time specified in this Agreement or any
Order, Supplemental Agreement or TCL during which the Supplier will warranty a
deliverable to the degree specified in agreement(s) between Supplier and
Company.
WORK means the engineering, furnishing and delivery of material and performance
of installation services under Article 9 ENGINEERING & INSTALLATION SUPPORT.
1.4 REPRESENTATIVES. Company's Agreement Representative is ▇▇▇▇▇▇ ▇▇▇▇▇, or
such other persons as may be designated in writing from time to time by AT&T.
Supplier's Agreement Representative is ▇▇▇ ▇▇▇▇▇▇, or such other persons as may
be designated in writing by Supplier from time to time.
Unless otherwise specified in this Agreement, Order, Supplemental Agreement or
TCL whenever approval, authorization, communication or submission is required by
the terms of this Agreement, they shall be in writing and shall be directed to
the Agreement Representatives designated in this Agreement, as amended from time
to time.
1.5 SURVIVAL OF OBLIGATION. The obligations of the parties under this
Agreement, Order, Supplemental Agreement or TCL issued pursuant to this
Agreement, which by their nature would continue beyond the termination,
cancellation or expiration of this Agreement, Order, Supplemental Agreement or
TCL including, by way of illustration only and not limitation, those in the
clauses COMPLIANCE WITH LAW, REPAIR AND REPLACEMENT PARTS - CONTINUING
AVAILABILITY, PUBLICITY; ADVERTISING, IMPLEADER, INFRINGEMENT, RELEASES VOID,
REPAIR NOT UNDER WARRANTY, INTELLECTUAL PROPERTY
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RIGHTS, WARRANTY, INSURANCE and INDEMNITY, SOURCE PROGRAMS AND TECHNICAL
DOCUMENTATION, shall survive termination, cancellation or expiration of this
Agreement, Order, Supplemental Agreement or TCL.
1.6 DURATION. This Agreement shall apply to all Orders, Supplemental
Agreements or TCLs placed by AT&T and Ordering Companies with Supplier during a
period of four (4) years following execution hereof unless this Agreement is
sooner terminated for cause or as mutually agreed upon. The term of this
Agreement shall automatically extend for one (1) year periods upon expiration
unless either party provides the other party sixty (60) days prior written
notice indicative of its desire to permit this Agreement to expire without
further extension of its term, in which event this Agreement shall expire on the
day before this Agreement would otherwise be automatically extended.
The termination of this Agreement shall not affect the rights and obligations of
the parties with respect to Deliverables which have been delivered by Supplier
to Company, including Supplier's obligations of warranty, repair and
replacement, nor shall it affect the rights and obligations of either party
under any outstanding Orders, Supplemental Agreements or TCLs, unless such
Orders, Supplemental Agreements or TCLs are also specifically terminated as set
forth hereafter.
ARTICLE 2 - ORDERING AND DELIVERY
2.1 FORM OF ORDER. Each Order shall be deemed to incorporate the terms and
conditions of this Agreement in such Order. An Order may be in several formats
such as, but not limited to, a Requisition for Purchase (PD001) Form, an AT&T
Corp. (ATT301) Form.
Supplier agrees to accept Orders from Ordering Companies subject to the terms
and conditions of this Agreement. The Ordering Companies shall have all the
rights and obligations of AT&T under this Agreement with respect to particular
Orders thereunder. The terms and conditions of this Agreement shall govern all
purchases by the Ordering Companies notwithstanding the existence of different
or conflicting terms and conditions in the ordering and acknowledging forms of
Supplier and Company provided that conflicting terms in Company's Orders are
governed by the last paragraph of this clause.
Supplier shall provide to Company an acknowledgment of receipt of each Order in
electronic or written format within twenty four (24) hours after its receipt.
Supplier shall immediately notify Company if at any time it determines it is
unable to fulfill the Order or any of the conditions or requirements of the
Order. Such notification shall be oral followed by written confirmation within
fifteen (15) days. However, such notification by Supplier shall not in any case
affect Company's rights and remedies available under this Agreement or otherwise
for Supplier's failure or inability to comply with any Order.
Each Order so submitted shall include: (a) a description of the Deliverables
being ordered, inclusive of any numerical and/or alphabetical identification
which may be referenced in the price list therein; (b) the delivery date; (c)
the applicable price and step discount price if applicable; (d) the location to
which the Deliverables are to be delivered; (e) the location to which invoices
shall be rendered for payment; (f) payment terms, if different than those
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Page 13 of 1
contained in this Agreement , (g) any additional terms and conditions agreed
upon by both parties (h) scope of work (i) specifications (j) Company Technical
and Order Management Representatives (k) Company's Order number; and (l) this
Agreement number. Failure by Company to include any items in an Order shall not
affect the validity of an Order. Additional terms or terms that conflict with
the provisions of this Agreement, such as a delivery interval shorter than
provided in this Agreement, included by Company in an Order shall be deemed to
be accepted by Supplier unless Supplier provides written notification of its
objection to such term of the Order within fifteen (15) days after its receipt.
Supplier, however, shall have no right to reject any term of any Order which
complies with the terms of this Agreement and the appropriate Supplemental
Agreement.
2.2 PACKAGING AND SHIPPING. Deliverables furnished hereunder shall be
packaged, where applicable, by Supplier at no additional charge in containers
adequate to prevent damage during shipping, handling and storage. Unless
instructed otherwise by Company, Supplier shall (a) ship Orders complete, (b)
ship to the destination designated in the Order, Supplemental Agreement or TCL,
(c) ▇▇▇▇ all subordinate documents with this Agreement number and the Order
number, (d) enclose a packing memorandum with each shipment and when more than
one package is shipped, identify the one containing the memorandum, and (e) ▇▇▇▇
Company's Order number on all packages and shipping papers.
Unless otherwise directed by Company, Supplier shall (a) ship Deliverables,
where applicable, from its nearest facility capable of filling the Order,
Supplemental Agreement or TCL (b) use the lowest published common carrier rates
(rail, truck or freight forwarder), (c) prepay transportation charges, and (d)
add transportation and insurance charges at cost as a separate item on
Supplier's invoice when the cost of transportation and risk of loss is to be
borne by Company. If requested by Company, Supplier agrees to substantiate such
charges by providing Company with the original freight ▇▇▇▇ or a copy thereof.
Shipping and routing instructions may be altered, orally or in writing, as
mutually agreed upon by Supplier and Company.
2.3 TITLE TO MATERIAL; RISK OF LOSS. Unless otherwise specified herein, title
and risk of loss or damage to Product and documentary media and other tangible
"information conveying" media furnished by Supplier hereunder shall, subject to
Company's right to reject or revoke acceptance, remain with Supplier until
Product are accepted for delivery by Company or its agent at the point of
destination specified in the Order, Supplemental Agreement or TCL.
Notwithstanding the above, if in any case Company pays Supplier for any Product
prior to Company's acceptance for delivery of the Product, title to such Product
shall vest in Company upon payment of the applicable invoice, but risk of loss
and damage shall remain with Supplier and shall pass to Company only upon
acceptance for delivery by Company. Acceptance for delivery involves the
acceptance for physical delivery and in no way affects acceptance of the Product
with respect to conformance with the requirements and specifications (including
the Exhibits) of an Order, Supplemental Agreement or TCL. Additionally, if the
Order, Supplemental Agreement or TCL calls for additional services after
delivery, such as unloading or the like, title and risk of loss or damage shall
pass to Company when such additional services have been performed by Supplier or
Supplier's representative.
2.4 CFC PACKAGING. Supplier warrants that all packaging materials furnished
under this Agreement and all packaging associated with material furnished under
this Agreement were not
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Page 14 of 1
manufactured using and do not contain chlorofluorocarbons. "Packaging" means
all bags, wrappings, boxes, cartons and any other packing materials used for
packaging. Supplier shall indemnify and hold Company harmless for any
liability, fine or penalty incurred by Company to any third party or
governmental agency arising out of Company's good faith reliance upon said
warranty.
2.5 HEAVY METALS IN PACKAGING. Supplier warrants to Company that no lead,
cadmium, mercury or hexavalent chromium have been intentionally added to any
packaging or packaging component (as defined under applicable laws) to be
provided to Company under this Agreement. Supplier further warrants to Company
that the sum of the concentration levels of lead, cadmium, mercury and
hexavalent chromium in the package or packaging component provided to Company
under this Agreement does not exceed 100 parts per million. Upon request,
Supplier shall provide to Company Certificates of Compliance certifying that the
packaging and/or packaging components provided under this Agreement are in
compliance with the requirements set forth above in this clause. Supplier shall
indemnify and hold Company harmless for any liability, fine or penalty incurred
by Company to any third party or governmental agency arising out of Company's
good faith reliance upon said warranties or any Certificates of Compliance.
2.6 OZONE DEPLETING SUBSTANCE LABELING. Supplier hereby warrants and certifies
that all products, including packaging and packaging components, provided to
Company under this Agreement have been accurately labeled in accordance with the
requirements of 40 CFR Part 82 entitled "Protection of Stratospheric Ozone,
Subpart E - The Labeling of Products Using Ozone Depleting Substances."
Supplier agrees to indemnify, defend and save harmless Company, its officers,
directors and employees from and against any losses, damages, claims, demands,
suits, liabilities, fines, penalties, and expenses (including reasonable
attorneys' fees) that may be sustained by reason of Supplier's non-compliance
with such applicable law or the terms of this warranty and certification.
2.7 DELIVERY. For Product ordered hereunder, a mutually agreeable delivery
date shall be set in the Order, Supplemental Agreement or TCL prior to the
placement of the Order for such Product.
In the event that Supplier exceeds the delivery date, then in addition to all
other rights and remedies at law or equity or otherwise, and without any
liability or obligation of Company, Company shall have the right to: (a) cancel
such purchase order, or (b) extend such delivery date to a later date, subject,
however, to the right to cancel as in (a) preceding if delivery is not made or
performance is not completed on or before such extended delivery date. If
Company elects to extend such delivery date, Supplier agrees to absorb the
difference between the charges to ship normal transportation and the charges to
ship premium overnight.
Supplier agrees not to deliver Deliverables prior to the agreed upon delivery
date without Company's prior written authorization.
2.8 METHOD OF TRANSPORTATION. Supplier shall at Company's request utilize
Company's contract carriers for the transportation of all equipment under this
Agreement, Order, Supplemental Agreement or TCL. Supplier shall coordinate the
transportation of all equipment
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Page 15 of 1
with Company's carrier and advise Company's carrier that the material is being
transported in accordance with Company and carrier's agreement.
2.9 TIMELY PERFORMANCE. If Supplier has knowledge that anything prevents or
threatens to prevent Supplier's timely performance under this Agreement
including any milestone schedule(s) in any Order(s), Supplemental Agreement(s)
or TCL(s), Supplier shall immediately notify Company's Technical Representative
thereof and include all relevant information concerning the delay or potential
delay.
2.10 MONTHLY SHIPMENT AND INSTALLATION REPORTS. Supplier agrees to render to
Company's Order Management Representative monthly shipment reports on or before
the fifth working day of the succeeding month. Such reports will be submitted
to the designated Company Order Management Representative described in the
Order, Supplemental Agreement or TCL.
2.11 CHANGES IN SCOPE. Company may, at any time, by written notice, advise
Supplier of Company's intent to make changes in, additions to, alterations of,
or deductions from (all hereinafter referred to as "Change"), the work performed
hereunder. Within twenty (20) days after a written request for a Change(s),
Supplier shall promptly so advise and submit to Company, notification specifying
the impact of such change on the price or the time required for performance.
Company shall, either (a) accept the proposal, in which event Company shall
issue a written Order or TCL directing Supplier to perform the Change(s), or
(b) advise Supplier not to perform the Change(s). Thereafter, if Company elects
to make such changes, an equitable adjustment to all appropriate terms and
conditions, including the amount to be paid to Supplier and the time for
performance, shall be made and the Order or TCL shall be modified accordingly
with an amendment executed by both parties.
If the cost of supplies or materials made obsolete or excess as a result of such
change is included in Supplier's claim for adjustment, Company shall have the
right to prescribe the manner of disposition of such supplies or materials. Any
claim for adjustment under this clause must be asserted within thirty (30) days
from the date the change is ordered. However, if Company determines that the
facts justify such action, it may receive, consider and adjust any such claim
asserted at any time prior to the date of final payment. Nothing contained in
this clause shall excuse Supplier from proceeding with the work so changed.
2.12 CHANGES TO DELIVERABLES BY SUPPLIER. Any change that Supplier proposes to
the Deliverables furnished hereunder and the documentation related thereto that
would impact upon (a) reliability, (b) the Deliverable's specifications, or (c)
form, fit, or function requires the approval of Company. Supplier shall forward
such proposed change to the Company Technical Representative, at least sixty
(60) days prior to the proposed effective date except for those cases where an
extremely unsatisfactory condition requires immediate action, in which case
Supplier shall promptly advise Company. Supplier shall at the time of
notification, provide Company with (a) a product change number, (b) a
description of such change, (c) the reason for such change, (d) a classification
of such change in accordance with the change classifications below, (e) a
description of the impact of such change upon (i) reliability, (ii) the
Deliverable's specifications, and (iii) form, fit, or function; (f) proposed
price impact, if any, for Class B changes, and (g) proposed effective date for
such change and recommended implementation schedule therefor.
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Any change in Deliverables shall be classified into one of the following two
classes:
"A" Changes which are needed to correct inoperative electrical or
mechanical conditions, or extremely unsatisfactory operating or
maintenance conditions, or conditions which result in safety
hazards, and which are judged severe enough to have to be made to
all Deliverables in process, stock, or installed. (Any conditional
application criteria to be specified in the change notification
document.)
"B" Changes which are sufficiently important to justify their
application to Deliverables being manufactured (as soon as
reasonably possible), and which are recommended for application to
existing installations in the field. Examples of this class of
change may include, but are not limited to:
(a) Providing new features that directly affect subscriber service;
(b) Providing design improvements which result in better service
capabilities, longer life or improved transmission margins;
(c) Providing changes in design which result in important cost
savings to Company; and
(d) Changes of a mandatory nature, for example, the fulfillment of
federal registration or future compatibility requirements, or
for conditions of sufficient importance to be intended for
universal application (change to be shown as "recommended").
The final classification of any product change proposed by
Supplier will be by mutual agreement between Supplier and
Company.
For Class A changes, Supplier shall, pursuant to the provisions of this
Agreement governing repair or replacement of Deliverables under warranty,
replace or modify, at no charge, all affected Deliverables furnished hereunder
and documentation related thereto. Supplier shall supply relevant documentation
to Company for all Class A changes. Supplier shall propose a schedule for the
application of these changes at all Deliverable locations which shall not exceed
six (6) months from date of change notice. This schedule shall be mutually
agreed upon by Company and Supplier.
For Class B changes, Supplier shall first notify Company of the exact nature of
the change. Details on the proposed implementation procedure for Deliverables
which is being or will be manufactured shall be discussed with Company. Company
shall, at its option, determine if Deliverables previously shipped will be
replaced or modified. Should such replacements or modifications be deemed
necessary, Supplier shall, pursuant to the provisions of this Agreement
governing repair of Deliverables not covered under warranty, make arrangements
for the necessary Deliverables replacement or modification at prices and
schedules to be mutually agreed upon by Company and Supplier prior to
implementation. Documentation related thereto shall be provided by Supplier as
specified for Class A above.
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Page 17 of 1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
In the event that Supplier and Company shall fail to reach agreement on any such
change in Deliverables to be made by Supplier, then in addition to all other
rights and remedies of law or equity or otherwise, AT&T shall, without any
charge, obligation or liability whatsoever, have the right to terminate this
Agreement and Company shall have the right to terminate any or all Orders for
Deliverables affected by such change.
2.13 THIRD PARTY EQUIPMENT. Supplier agrees to advise Company of all third
party products represented in Supplier's Product prior to the placement of an
Order, Supplemental Agreement or TCL. Company shall have the right to obtain
all or part of such third party products directly from the third party
product(s) provider(s) if Company so chooses. Such third party product(s) may
be shipped directly to Company site or Supplier's site as deemed appropriate for
incorporation into equipment. Supplier shall provide Company with third party
product descriptions, part numbers, accessories, options and delivery
requirement dates required for incorporation into Supplier's Product. The
parties shall mutually agree upon integration, service and warranty charges
applicable to any such third party products obtained by Company.
ARTICLE 3 -- PRICES AND PAYMENT
3.1 AGREEMENT PRICE. The Supplier agrees to sell all Deliverables ordered
during the term of this Agreement by Company and its Ordering Companies at
prices mutually agreed upon. Prices stated in Exhibit A, "Prices and Payment
Schedule for the ******* Service" are specifically for the ******* Service.. The
cost of transportation for initial delivery is to be borne by the Supplier
unless specifically provided that the cost of transportation is to be borne by
Company.
For additional Features and project development, Supplier shall offer prices to
Company in an offer on a per product or Feature basis ("Estimated Quote"). The
Estimated Quote from Supplier to Company shall include the (1) proposed price,
(2) proposed date of delivery, (3) and other mutually agreed upon information.
When determining the proposed price, Supplier will include those items described
in Clause 3.2 SOFTWARE PRICE AND PAYMENT, listed under "Firm Price Quote" below.
Provided that the final requirements do not change significantly, when final
requirements are agreed upon, Supplier will provide a firm price ("Firm Price
Quote") that will be no higher than the Estimated Quote.
3.2 SOFTWARE PRICE AND PAYMENT. The Feature Software development price will be
the Firm Price Quote as negotiated between the Parties.
Included in the agreed to Firm Price Quote are:
- license or assignment fee, as appropriate
- development cost
- documentation
- training
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Page 18 of 1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
- Feature integration
- technology trials
- warranty
- software development environment
- project management
- supervision
- management
- uplift and/or extended warranty
- growth and retrofit
- post warranty repair and support
Items to be itemized as part of Software price shall be as follows:
- license or assignment fee, as appropriate
- warranty
Software Payment Schedule:
The payment schedule for Feature Software development shall be according to the
table shown below, but may be amended on a project basis via changes in Mutually
agreed upon in writing.
Payments Milestone
-------- ---------
*** ***
*** ***
*** ***
3.3 PRODUCT PRICE AND PAYMENT. The new project or Product price will be the
Firm Price Quote as negotiated between the Parties.
Included in the agreed to Firm Price Quote are:
- hardware including Operating System Software and Base Firmware
- engineer, furnish and install (EF&I )
- shipping
- installation training
- operation and maintenance training
- warranty
- insurance
Items to be itemized as part of Product price shall be as follows:
- hardware including Operating System Software and Base Firmware
- EF&I
- shipping
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Page 19 of 1
- insurance
The payment schedule for Product shall be per Clause 3.5 BILLING AND PAYMENT
in this Agreement.
For Product, which Company has ordered but wishes to cancel, Company shall pay
to Supplier, Supplier's cost, less the amount received by Supplier for the sale
or return of such Product, as set forth in the next sentence. Supplier shall
make a reasonable attempt to sell such Product to a third party for a reasonable
price or return it to Supplier's source and if such Product is sold or returned
within ninety (90) days of cancellation then the amount received by Supplier
from such sale or return, less any unreimbursed shipping and insurance charges
will be credited against the Company's cancellation charges.
3.4 TERMS NO LESS FAVORABLE. Supplier has assured Company that for all
Deliverables covered by this Agreement, that all prices, terms, warranties and
benefits granted to Company by Supplier under this Agreement are at least equal
to those now offered by Supplier to any of its customers with the same volume of
Deliverables as covered by this Agreement. If, prior to the termination of this
Agreement, Supplier should enter into an arrangement with any other customer
with similar services providing greater benefits or a lower price than
applicable to Company under this Agreement, this Agreement shall thereupon be
deemed to be amended effective immediately as of the date of such lower price or
greater benefit to provide to Company all such greater benefits and lower prices
and Supplier shall adjust (retroactively if necessary) all prices to such lower
prices and provide such greater benefits for all outstanding Orders and any Work
or Services not yet provided or if provided not yet billed. Supplier shall give
Company immediate written notice of any such lower prices or greater benefits
referred to in this clause. With respect to Orders that have been placed, but
the work to fulfill such Orders has not been completed, as of the date of such
lower price or greater benefit, no adjustment shall be made if the reason for
the lower price or greater benefit is because of modifications by third parties
or other reasons not within the control of Supplier.
3.5 BILLING AND PAYMENT. Supplier shall render to Company's Order Management
Representative (a) invoices in duplicate, showing Order number, Agreement
number, serial number or number identifying the Deliverables, and if bills of
lading are not available, through routing and weight, (b) separate invoices for
each shipment or Order, (c) shipping notices and bills of lading containing
Order number and description of Deliverables, and (d) mail or otherwise transmit
invoices, bills of lading and shipping notices to the billing address on the
Order, Supplemental Agreement or TCL.
Supplier shall not render invoices for Product until shipped, Software until the
appropriate Quality Gate has been passed as specified in Clause 3.2 SOFTWARE
PRICE AND PAYMENT or Services until Services are completed, provided that
invoices will not be rendered where Company has rejected the Deliverables for
non-compliance with this Agreement, Order, Supplemental Agreement or TCL, unless
otherwise agreed upon by both parties in writing.
In addition to the above mentioned invoicing procedures, Supplier, when
submitting invoices, shall show Product codes pursuant Clause 6.9 MARKING (c)
against all billable Products.
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Page 20 of 1
Failure to provide Product codes may delay processing of payment until proper
coding is provided by Supplier.
Unless otherwise stated herein, payment shall be rendered net thirty (30) days
from the date of delivery of the Deliverables, completion of Services to
Company, or in accordance with the Order or TCLs milestone payment schedule and
following receipt by Company of an accurate invoice. In the event of shortages
or nonconformities, Company may withhold payment for the portion of the Order or
TCL which is short or nonconforming until the appropriate corrections are made
by Supplier.
3.6 TAXES. Company shall be liable for and shall reimburse Supplier only for
the following tax payments with respect to transactions under this Agreement
unless Company advises Supplier that an exemption applies: state and local
sales and use taxes, as applicable. Taxes payable by Company shall be billed as
separate items on Supplier's invoices and shall not be included in Supplier's
prices. Company shall have the right to have Supplier contest any such taxes
that Company deems improperly levied at Company's expense and subject to its
direction and control.
3.7 RECORDS. Records of all amounts billable to and paid by Company under this
Agreement shall be kept by Supplier on a generally accepted accounting basis and
shall be available to Company or its authorized representatives for audit during
normal business hours until three (3) years after final payment for equipment
has been made. Supplier agrees to provide reasonable supporting documentation
concerning any disputed amount invoiced to Company within thirty (30) days after
Company provides written notification of the dispute to Supplier.
ARTICLE 4 -- INTELLECTUAL PROPERTY RIGHTS
4.1 CONFIDENTIAL INFORMATION. Any specifications, drawings, sketches, models,
samples, data, computer programs, reports, work, work product, documentation, or
other technical or business information ("Information") marked AT&T
"Confidential" or "Proprietary" which are either furnished or disclosed by
Company or developed by Supplier hereunder is the property of and shall be
deemed confidential to Company and shall be returned to Company at the
conclusion of this Agreement, or shall be destroyed if Company shall so direct
in writing. Unless such information was previously known to Supplier free of
any obligation to keep it confidential, or is subsequently made public by
Company or a third party having a legal right to make such disclosure, it shall
be held in confidence by Supplier, shall be used only for purposes hereunder,
and may be used for other purposes only upon such terms and conditions as may be
mutually agreed upon in writing. Supplier shall obligate each of its employees,
agents and subcontractors to keep such Information confidential in accordance
with the foregoing requirements. Such obligations shall be in writing which
shall recite that such Information is the property of Company and is to be held
in confidence, shall refer to this Agreement by number, and shall be signed by
each of Supplier's employees, agents and subcontractors having access to such
Information.
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Page 21 of 1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
4.2 Supplier's Information. No specifications, drawings, sketches, models,
samples, data, tools, computer or other apparatus programs, documentation,
works, work products, or other tangible or intangible technical or business
information, written, oral or otherwise expressed, furnished or disclosed by
Supplier to Company under this Agreement or in contemplation hereof shall be
considered by Supplier to be confidential or proprietary unless otherwise
mutually agreed to between both parties in an executed agreement.
4.3 INFRINGEMENT. The following terms apply to any infringement, or claim of
infringement, of any patent, trademark, copyright, trade secret or other
proprietary interest based on the manufacture, installation, normal use, lease
or sale of any equipment, program, documentation, service, Software, Product or
material ("material") furnished to Company under this Agreement or in
contemplation of this Agreement. Supplier shall indemnify AT&T and its customers
for any loss, damage, expense or liability that may result by reason of such
infringement or claim, except where such infringement or claim arises solely
from Supplier's adherence to AT&T's written instruction or directions which
involve the use of material other than (1) commercial material which is
available on the open market, or is the same as such material, or (2) material
of Suppliers origin, design or election; and AT&T shall so indemnify Supplier in
such excepted cases. In connection with Supplier's obligation under this
clause, and without limiting the generality of this clause, Supplier
specifically agrees to indemnify Company in connection with any claim or
potential claim of infringement of *****************************************
********************************************************************************
********************************************************************************
********************************. Each party shall defend or settle, at its own
expense, any action or suit against the other for which it is responsible under
this clause. Each party shall notify the other promptly of any claim of
infringement for which the other is responsible, and shall cooperate with the
other in every reasonable way to facilitate the defense of any such claim.
Notwithstanding any other provision in this Agreement, Supplier shall indemnify
Company and its customers to the full extent of any damages. If in any action,
any part of, or an entire Deliverable furnished by Supplier under this Agreement
is held, or in Supplier's reasonable opinion is likely to be held to constitute
an infringement of a third party intellectual property right, then Supplier may
at its sole expense, and upon reasonable notice to Company and at Company's
convenience first a) procure for Company the right to continue to use the
Deliverable, or second b) replace or modify the Deliverable with non-infringing
functionally equivalent Deliverable. As a third option if options (a) and (b)
of the preceding sentence are in Supplier's and Company's reasonable opinion, to
be mutually agreed upon in good faith between the parties, not available, then
Company shall cease use of such Deliverable or part thereof and Supplier shall
refund to Company the purchase price or license fee paid by Company for such
infringing part or Deliverable minus a depreciated amount calculated using a
straight line depreciation method over a five year period. If the third option
"c" cannot be agreed upon between the parties and upon thirty days written
notice by Supplier to Company of Supplier's election to proceed under this
sentence, then Company may continue to use such infringing Deliverable or part
thereof and Supplier's obligation to indemnify Company under this clause shall
cease from the date of expiration of such notice forward provided that Supplier
refunds Company the purchase price or license fee for such infringing part of
the Deliverable minus the depreciated amount based on the same
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Page 22 of 1
calculations in the preceding sentence. Supplier agrees that acceptance of a
refund does not preclude Company from pursuing against Supplier any remedies
that Supplier may have at law, in equity or both.
4.4. INVENTIONS. Supplier agrees that if any designs, inventions, discoveries,
or improvements, whether or not patentable, are conceived, first reduced to
practice, made, or developed in anticipation of, in the course of, or as a
result of development work done under this Agreement by Supplier or by one or
more of Supplier's employees, consultants, representatives, or agents
(associates), unless it can be shown that the development work was done solely
or primarily outside the scope of this Agreement, Supplier will assign to
Company Supplier's and Supplier's associates' entire right, title, and interest
in and to such designs, inventions, discoveries and improvements, and any
patents that may be granted thereon in any jurisdiction of the world. Supplier
also agrees that, without charge to Company, Supplier will and will have
Supplier's associates sign all papers and do all acts which may be necessary,
desirable, or convenient to enable Company at Company's expense to file and
prosecute applications for patents on such designs, inventions, discoveries, and
improvements, and to maintain patents granted thereon. Supplier further agrees
to grant and hereby grants to Company and AT&T, under any patent issued in any
jurisdiction of the world for any invention made prior to the completion of the
work done under this Agreement, nonexclusive, royalty-free licenses (to the
extent Supplier has the right to do so) to make, have made, use, lease, sell,
and import any product or facility including or derived from the work done under
this Agreement. The licenses so granted to Company and AT&T include the right
to grant sublicenses to their respective affiliates, associated companies and
customers. Supplier also agrees to acquire from Supplier's associates such
assignments, rights, and covenants as to assure that Company and AT&T shall
receive the rights provided for in this INVENTIONS clause. The parties may
mutually designate in a Supplemental Agreement, TCL or other mutually agreed
writing, that designs, inventions, discoveries or improvements arising in the
course of or as a result of certain development work done under this Agreement
are to be considered to be property of Supplier.
4.5 DEVELOPED INFORMATION. Supplier agrees that Supplier will and, where
applicable, will have Supplier's associates (as defined in Clause 4.4
INVENTIONS), disclose and furnish promptly to Company any and all business and
technical information, computer or other apparatus programs (in both source and
object code format), specifications, drawings, records, documentation, works of
authorship or other creative works, ideas, knowledge, or data, written, oral, or
otherwise expressed ("Information"), originated or developed by Supplier or by
any of Supplier's associates as a result of Supplier's performance under, or in
anticipation of, this Agreement unless it can be shown that such Information was
developed or originated solely or primarily outside the scope of this Agreement.
Supplier further agrees that all such Information shall be Company's property,
shall be kept in confidence by Supplier and Supplier's associates, shall be used
only in the filling of Orders hereunder, and may not be used for other purposes
except upon such terms as may be agreed upon between the parties in writing.
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Page 23 of 1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
If such Information includes materials previously developed or copyrighted by
Supplier and can be shown to have been developed or originated solely or
primarily outside the scope of this Agreement, Supplier agrees to grant and
hereby grants to Company and AT&T a nonexclusive, royalty-free license to use,
have used, and copy for Company's business operations, not covering expansions,
such materials. The licenses so granted to Company and to AT&T include the
right to sub-license or assign, whole or in part, not including expansions, to
the respective affiliates, associated companies and customers.
Supplier also agrees to acquire from Supplier's associates such assignments,
rights, and covenants as to assure that AT&T shall receive the rights provided
for in this DEVELOPED INFORMATION clause.
4.6 AUTHORSHIP AND COPYRIGHT. The entire right, title, and interest, including
copyright, in all original work of authorship fixed in any tangible medium of
expression heretofore or hereafter created under this Agreement by Supplier, or
on Supplier's behalf, for Company or furnished to Company under this Agreement
is hereby transferred to and vested in Company, unless it can be shown that the
work was created solely or primarily outside the scope of this Agreement. The
parties expressly agree to consider as work made for hire those work ordered or
commissioned by Company which qualify as such in accordance with the Copyright
laws. For all such original work, Supplier agrees to provide documentation
satisfactory to Company to assure the conveyance of all such right, title, and
interest, including copyright, to Company.
4.7 LICENSES. Company grants no licenses, express or implied, under any
patents, copyrights, trademarks or other intellectual property rights are
granted by Company to Supplier by virtue of this Agreement.
4.8 EXCLUSIVITY DESIGNATION. In the event that Company has waived its rights,
in writing, under Clause 4.5 DEVELOPED INFORMATION, then Company and Supplier
have agreed to consider certain Features as exclusive or non-exclusive. For
Features designated as non-exclusive, Company agrees that it has waived its
rights, in writing, under Clause 4.5 DEVELOPED INFORMATION. Features designated
as exclusive shall remain exclusive to Company for a period of **************,
unless mutually agreed otherwise. The exclusive status of each Feature will be
indicated in writing in an Order or a separate document. Supplier agrees that it
shall not license to a third party any Feature which is designated as exclusive
to Company without the express written concurrence of Company during the
exclusivity period set forth herein. The exclusive status and period of
exclusivity will be mutually agreed upon in writing and signed by authorized
representatives of both parties. Such writing shall include a description of
each Feature or component addition and the exclusivity period, if any. Such
writing may be in an Order, Supplemental Agreement or TCL so long as it meets
the conditions set forth above.
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The time period for exclusivity shall begin at Q1 or 90 days after Q2, whichever
is earlier. Notwithstanding the foregoing, Supplier agrees that the time period
for exclusivity shall not begin until the Q2 exit criteria set forth in the
Quality Plan (which is incorporated herein by reference) have been met. In the
event that Supplier's Product or Deliverables related to a particular exclusive
Feature does not conform to the aforementioned Q2 exit criteria, Company may
after appropriate notification to Supplier exercise its right to terminate the
development of such Feature pursuant to Clause 8.2 CANCELLATION of this
Agreement.
Supplier agrees that during the Q9 to Q1 period, Supplier will not disclose,
license, market, or sell any Feature designated as exclusive to any third party
without Company's express prior written approval. The parties agree that
Supplier may reuse non-exclusive Features but such reuse shall be limited to
use in other Supplier products, and that Supplier may license any Software or
sell any product containing such non-exclusive Features to customers other than
Company. In no event shall the foregoing provisions of this clause: (a)
restrict Supplier's ability to license such non-exclusive Features to a third
party for the manufacture by such party for products to be licensed or sold
under Supplier's trademark; (b) restrict Supplier's ability to execute license
agreements for non-exclusive Features granting source code rights in the event
of bankruptcy or inability or unwillingness to perform maintenance services.
In the event that Supplier utilizes non-exclusive Features or portions thereof,
developed and funded *************************** or more by Company, and
licenses or sells such Features or portions thereof, to customers other than
Company or an Ordering Company, the parties shall mutually agree on the
financial remuneration or credit to be provided to Company. It is understood by
the parties that the remuneration shall apply only to those Features or portions
thereof used by Supplier, and shall not include any remuneration for incremental
development performed by Supplier to make the Features or portions thereof
salable to other customers. The amount of the remuneration or credit shall be
equal to *************** of the gross margin Supplier receives from each sale or
license of the non-exclusive Feature to a third party, such remuneration shall
in no event exceed the amount paid or payable by Company for such non-exclusive
Features.
Exclusivity Designation for the first commitment described in Exhibit B *******
Service and Configuration Description" is contained in Exhibit C "Exclusivity
Designation for ******* Release 1.0"
4.9 SPEECH DATA AND SPEECH TECHNOLOGY. Supplier agrees with respect to
Features designated as exclusive under Clause 4.8 EXCLUSIVITY DESIGNATION of
this Agreement to hold in confidence all Speech Data assembled from trials,
assembled in the process of developing such Features, and all Speech Data from
the ITN or from the field. Supplier further agrees that all such Speech Data
assembled to test exclusive Features shall be considered AT&T Proprietary
information and, accordingly, shall be held in confidence by Supplier.
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Supplier agrees that Company does not grant to Supplier the right to use such
collected Speech Data for any purpose whatsoever other than to enable Supplier
to perform under this Agreement. Supplier shall provide a copy of all Speech
Data to Company, including transcriptions of what was spoken (whether in
orthographic or phonetic form), and other explanatory information about the
specific circumstances of recording and speaker, such as, but not limited to,
time and date of recording, source, noise conditions, gender, age, accent, and
speech endpoint locations within the binary data file, to the extent that
Supplier needs to make such transcriptions and associate such explanatory
information with the recordings in the course of fulfilling its obligations to
develop, test and support Software under this Agreement.
Company agrees that Supplier has license to or owns all Speech Technology that
either pre-existed this Agreement or was developed or obtained by Supplier
independently of Supplier's work funded by Company under this Agreement,
provided that Supplier has not assigned ownership of such pre-existing or
independently-developed Speech Technology to Company pursuant to one or more
other agreements between Company and Supplier. Company further agrees that such
pre-existing or independently-developed Speech Technology is not exclusive to
Company. Company further agrees that Supplier has license to or owns all Speech
Technology associated with all Features provided by Supplier under this
Agreement. Supplier agrees that each Speech Model, Speech Tools and/or each
Speech Grammar created pursuant to this Agreement to implement any exclusive
Feature shall be exclusive to Company. Supplier further agrees that the
specific combination of Speech Model(s), Speech Model Creation Algorithm(s),
Speech Algorithm Parameters, Speech Pattern Matching Algorithm(s), and Speech
Grammars, that together provide means to implement any exclusive Feature, will
be exclusive to Company. For the purposes of this paragraph, the period for
exclusivity shall begin at Q1 or 90 days after Q2, whichever is earlier, for
each single exclusive Feature and continue for a period of ***************.
ARTICLE 5 -- RISK MANAGEMENT
5.1 TERMINATION, RIGHTS AND REMEDIES. Supplier represents that Deliverables
shall (a) meet or exceed specifications referred to in the technical
specifications, and (b) be delivered, where applicable, within the timeframe(s)
specified in the project schedule of the applicable Order, Supplemental
Agreement or TCL and by the delivery date set forth in the applicable Order,
Supplemental Agreement or TCL.
(A) Termination. In the event Supplier shall be in breach or default of
any of the terms, conditions or covenants of this Agreement, Order, Supplemental
Agreement or TCL placed hereunder and such breach or default shall continue for
a period of thirty (30) days after the giving of written notice to Supplier
thereof by AT&T or Company, as the case may be, then in addition to all other
rights and remedies of law or equity or otherwise, AT&T shall have the right to
terminate this Agreement and Company shall have the right to terminate any such
Orders hereunder without any charge, obligation or liability whatsoever, except
as to the payment for Deliverables and services already received and accepted by
Company.
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Company may at any time terminate any one or more Orders placed hereunder and
AT&T may also terminate this Agreement when, in the exercise of their respective
reasonable discretion AT&T or Company as the case may be, determines that the
state of technology or its business requirements make further purchases of
Deliverables unreasonable. Unless otherwise specified herein, Company's
liability to Supplier with respect to such terminated Agreement, Order,
Supplemental Agreement or TCL shall be limited to ****************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*************************. If requested, Supplier agrees to substantiate such
costs and profits with proof satisfactory to Company.
(B) Exercise of Rights and Remedies. AT&T shall have the right to cancel
this Agreement and Company shall have the right to cancel or reschedule Orders,
Supplemental Agreements or TCLs as referred to above in this clause. In
addition, AT&T or Company as the case may be, shall have all rights and remedies
and Supplier shall have all obligations and liabilities under Clause 7.1
WARRANTY AND MAINTENANCE SERVICES and Clause 7.3 WARRANTY clauses of this
Agreement with respect to the default condition. In the event of any other
breach or default by Supplier of any of the terms, conditions, covenants or
other provisions of this Agreement or any Orders, Supplemental Agreements or
TCLs placed hereunder, AT&T or Company as the case may be, shall be entitled to
every remedy and right provided in this Agreement and available in law or in
equity.
(C) Orders, Supplemental Agreements or TCLs. If (i) Supplier fails to
deliver Deliverables by *********** days after the date in the Order,
Supplemental Agreement or TCL for delivery; or (ii) if any Deliverables fails to
meet the specifications, features and other requirements of an Order,
Supplemental Agreement or TCL or any Deliverables is not accepted by Company
because of a deficiency or deficiencies, and Supplier has not remedied all such
failures and deficiencies within ********************************** after
installation acceptance test, Company shall have the right to cancel the Order,
Supplemental Agreement or TCL. Company will give Supplier written notice if it
discovers failures or deficiencies referred to above. This Section C does not
limit Company's other rights and remedies for such failures or deficiencies or
for failures or deficiencies discovered by Company more than thirty (30) days
after installation acceptance test of Product or Software.
5.2 INDEMNITY. All persons furnished by Supplier shall be considered solely
Supplier's employees or agents, and Supplier shall be responsible for
withholding and payment of all unemployment, social security and other payroll
taxes, including contributions when required by law. Supplier agrees to
indemnify and save harmless AT&T, its affiliates, and its customers and their
officers, directors, employees, successors, and assignees (all hereinafter
referred to in this clause as "AT&T") from and against any losses, damages,
claims, demands, suits, liabilities, and expenses (including reasonable
attorneys' fees) that arise out of or result from: (1) injuries
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or death to persons or damage to property, including theft, in any way arising
out of or occasioned by, caused by or on account of the performance of the work
or services performed by Supplier or persons furnished by Supplier, (2)
assertions under Workers' Compensation or similar acts made by persons furnished
by Supplier or by any subcontractor, or by reason of any injuries to such
persons for which AT&T would be responsible under Workers' Compensation or
similar acts if the persons were employed by AT&T, (3) any failure on the part
of Supplier to satisfy all claims for labor, Deliverables, materials, and other
obligations relating directly or indirectly to the performance of the Services;
or (4) any failure by Supplier to perform Supplier's obligations under this
clause or Clause 5.3 INSURANCE. Supplier agrees to defend AT&T, at AT&T's
request, against any such claim, demand, or suit. AT&T agrees to notify
Supplier within a reasonable time of any written claims or demands against AT&T
for which Supplier is responsible under this clause. Supplier's obligation to
defend AT&T from any claims, demands and suits shall arise upon a third party
alleging a claim, making a demand or filing a suit that is subject to
indemnification under this clause.
5.3 INSURANCE. Supplier shall maintain and cause Supplier's subcontractors to
maintain during the term of this Agreement (a) Workers compensation insurance as
prescribed by the law of the state or nation in which the work is performed, (b)
employer's liability insurance with limits of at least $100,000 for each
occurrence; (c) comprehensive automobile liability insurance if the use of motor
vehicles is required, with limits of at least $1,000,000 combined single limit
for bodily injury and property damage for each occurrence, (d) Commercial
General Liability ("CGL") insurance, including Blanket Contractual Liability and
Broad Form Property damage, with limits of at least $1,000,000 combined single
limit for personal injury and property damage for each occurrence; and (e) if
the furnishing to Company (by sale or otherwise) of products or material is
involved, CGL insurance endorsed to include products liability and completed
operations coverage in the amount of $2,000,000 in the aggregate. All CGL
insurance shall designate AT&T Corp., its affiliates and their officers,
directors, and employees (all hereinafter referred to in this clause as "AT&T")
as an additional insured. All such insurance must be primary and required to
respond and pay prior to any other available coverage.
Supplier agrees that Supplier, Supplier's insurer(s), and anyone claiming by,
through, under, or in Supplier's behalf shall have no claim, right of action, or
right of subrogation against AT&T and its customers based on any loss or
liability insured under the foregoing insurance. Supplier and Supplier's
subcontractors shall furnish prior to the start of work in connection with this
Agreement, certificates or adequate proof of the foregoing insurance including,
if specifically requested by AT&T, copies of the endorsements and insurance
policies. AT&T shall be notified in writing at least thirty (30) days prior to
cancellation of or any change in this policy.
5.4 NETWORK OUTAGES. Supplier acknowledges that a Network Outage (defined as
an FCC Reportable Incident, that is, an incident that causes the blocking of
30,000 or more calls and an outage duration of 30 minutes or more to AT&T's core
network, excluding the isolated failure by the System to receive or deliver
voice messages) will cause damage to Company in an amount impossible to
ascertain. Supplier agrees to pay Company, as liquidated damages and not as a
penalty, ******************* of the total amount of the invoice to Company
during the term of this
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Agreement and no less than ********************************** per occurrence in
the event of a Network Outage caused in substantial part by Supplier in
connection with Deliverables, whether or not by breach of warranty and whether
before, during or after any Warranty Period. With respect to a Network Outage
caused in substantial part by Supplier in connection with Deliverables,
Supplier's total liability for damages for Network Outages, including the
liquidated damages described herein shall be as set forth in this section, not
to exceed the amount of ***** *************************************** for any
calendar year. If Company intends to pursue liquidated damages then Company
agrees to notify Supplier within one (1) year of such Network Outage. At
Company's option, Company may take all or part of the payment as a credit
against any invoice due or to become due to Supplier.
5.5 LATE DELIVERY. Supplier acknowledges that its failure to deliver fully
conforming Product and/or Software within the time specified in an Order,
Supplemental Agreement or TCL, and which causes a delay in the schedule, will
cause serious damage to Company and on account of the great difficulty if not
impossibility of ascertaining and proving the amount of such damage, Supplier
agrees to pay to Company, as liquidated damages sustained by Company resulting
from such delay, and not as a penalty, the sum as specified in the table below:
Week Delay (per full week) Percent of Net Price
-------------------------- --------------------
********** **********
********** **********
********** **********
********** **********
********** **********
The total percentage for liquidated damages for each occurrence of late delivery
shall not exceed **** of net price.
If the delay in schedule is corrected, and the project meets its next major
milestone, and Company has not incurred any extraordinary or additional expense,
then Supplier will not be liable for any liquidated damages for the occurrence
of late delivery. If Company intends to pursue liquidated damages then Company
agrees to notify Supplier within two (2) years of the delay in schedule.
It is further agreed that such sums, without further proof of same, shall be
deemed to represent damages actually sustained by Company by reason of such
delay. Company and Supplier agree to use their best efforts to remain on
schedule.
5.6 SERVICE AVAILABILITY. If during the previous contiguous 12 month period,
Deliverables provided by Supplier pursuant to this Agreement fail to meet the
service availability requirements ( usually an average of such twelve (12) month
period ) as specified in the appropriate Company's Specification document , then
this will cause damage to Company an amount impossible to ascertain. Supplier
agrees to pay Company, as liquidated damages and
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not as a penalty, the sum of ******************************* per occurrence of
failure to meet service availability requirements caused solely by Supplier in
connection with Deliverables, whether or not by breach of warranty and whether
before or during any Warranty Period or during the period of time that Company
has a service agreement with Supplier covering the applicable Deliverables.
Following each occurrence when this clause is exercised, the next 12 month
period shall be counted going forward and not counting the months looking back
following the month in which this clause is exercised. At Company's option,
Company may take all or part of the payment as a credit against any invoice due
or to become due to Supplier.
Company shall have the right to offset amounts owed to it as liquidated damages
under this clause against any amounts owed to Supplier under this Agreement, or
any Orders, Supplemental Agreements or TCLs placed pursuant to this Agreement,
or under any other agreement.
In addition to the payment of liquidated damages for ordered Product, Supplier's
failure to deliver conforming Product within the time specified in this
Agreement or such Order, Supplemental Agreement or TCL shall give Company the
right at any time to cancel this General Agreement, any Orders, Supplemental
Agreements or TCLs placed pursuant to this Agreement, in whole or in part, and
to place no future Orders, Supplemental Agreements or TCLs under this Agreement.
If Company elects to cancel an Order, Supplemental Agreement or TCLs on which
liquidated damages for late delivery are still accruing, such accrual shall
cease on the effective date of the cancellation.
Liquidated damages concerning the service availability requirements are not
intended to be cumulative with other damages, Company may choose to recover
actual damages or liquidated damages. If Company intends to pursue liquidated
damages then Company agrees to notify Supplier within one (1) year after
Supplier's failure to meet service availability requirements.
These provisions concerning late delivery of conforming material are intended to
be and shall be cumulative and in addition to every other remedy now or
hereafter possessed by Company, including but not limited to its rights to
recover damages under the WARRANTY clause in this Agreement.
5.7 LIMITATION ON DAMAGES.
A.) Supplier and Company agree that either party's liability for damages
arising out of any breach of this Agreement shall not exceed
************************** in any one contract year. The limitation on
liability set in the preceding sentence does not apply to either party's
obligations under Clause 4.3 INFRINGEMENT or Supplier's obligations under Clause
10.4 COMPLIANCE WITH LAW.
B.) Supplier and Company agree that either party's total liability for damages
for breach of Clause 4.3 INFRINGEMENT and 10.4 COMPLIANCE WITH LAW shall not
exceed ************ *************** in the aggregate, over the original term of
this Agreement.
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C.) Either party's total liability pursuant to paragraphs A.) and B.) above
this clause shall not exceed *************************** in any contract year.
ARTICLE 6 -- PURCHASE OF PRODUCT
6.1 PRODUCT ACCEPTANCE. For the purposes of these provisions, the Product
Acceptance test period shall conclude thirty (30) days from Supplier's written
notice of installation completion, if Supplier provides installation service.
If Supplier does not provide installation services the Product Acceptance test
period shall conclude thirty (30) days from Supplier's delivery of the Product.
6.2 DOCUMENTATION. Supplier will make available the documentation applicable
to Deliverables furnished hereunder in an on-line readable format accessible
from all Company's field sites, and the ITN, and will reissue said documentation
as appropriate to reflect subsequent and continuing technology releases. On-line
documentation will be updated within fifteen (15) calendar days of delivery of
releases and fixes which affect the documentation. Supplier agrees to grant and
hereby grants to Company a license to use and copy the documentation and the
future updates to such documentation described in this paragraph. Acceptance by
Company of a license to the copyright(s) of a particular document is not an
admission or a concession by Company that Supplier owns the copyright(s) to that
document or that Company does not own the copyright(s) to that document.
For Product and Software procured by Supplier from a vendor, Supplier shall
acquire the necessary rights to any vendor's standard documentation to fulfill
Supplier's obligation under this Agreement to allow Company's personnel to use
such vendor's documentation at all Company field sites. Supplier will provide
Company additional copies of vendor documentation upon Company's request at
Supplier's pass through price. Supplier warrants that it has the rights to
permit Company to use vendor's standard documentation provided by Supplier to
Company.
Supplier shall, with each shipment by Supplier to Company, include all manuals
covering the installation, operation and maintenance of the Product and Software
shipped. All documentation and any subsequent changes or updates shall
reference Supplier's serialized numbers, issue numbers and date of issue.
Supplier agrees to maintain a mailing list of Company's recipients of such
documentation without charge.
6.3 ENVIRONMENTAL/RELIABILITY TESTING. The Components shall meet the
requirements specified by *****************************************************
****************************************************.
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If the Product as a whole fails to meet the requirements specified by
****************************, then Company shall notify Supplier and Supplier
shall use its best efforts to correct such failure. The results of applicable
tests shall be made available to the Company Technical Representative for
evaluation to confirm their compliance with the agreed requirements.
- ******************************
- ******************************
- ******************************
- ******************************
- ******************************
******************************
******************************
******************************
- ******************************
- ******************************
Product shall be subjected to Supplier's production qualification tests.
Supplier agrees to provide all test results to Company. These tests shall be
more comprehensive than the normal production tests and shall include checks of
the functions, protocols and interfaces. In addition, Supplier shall perform
periodic product qualification tests based on statistical analysis of the
parametric data associated with critical parameters taken during production and
failure analysis process. Timing and content of periodic product qualification
(PPQ) will be based on evaluations performed by Supplier's manufacturing
engineering of:
- ******************************
- ******************************
- ******************************
- ******************************
The product qualification tests shall also be performed upon the implementation
of any major design changes requested by Company.
It is the responsibility of Supplier to demonstrate during the term of this
Agreement that the actual reliability of the delivered Product and Software
equals or exceeds the reliability predictions. Supplier shall conduct studies
to measure the replacement/failure of supplied Product and Software under
actual operating conditions or simulated operating conditions in a controlled
laboratory environment. These studies may be (a) factory based (where returns
are compared with shipment figures), (b) conducted at an operational site with a
sufficient population of Product and Software in service to provide reasonable
confidence in observed replacement estimates, (c) an ongoing factory based
(controlled) reliability test of a sufficient sample of Product and Software to
provide a timely assessment of Product and Software reliability; or (d) all of
the above. At Company's request, the results and the analysis of the collected
data shall be provided by Supplier to Company.
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6.4 FCC REGISTRATION. When Components are subject to **********************
*********************************************************, Supplier warrants
that such Product furnished hereunder are registered under and comply with
********************************************************************************
*****************. If the Product, as a whole, is subject to and fails to meet
the requirements of ***********************************************************
*************************************************************, then Company
shall notify Supplier and Supplier shall use its best efforts to correct such
failure.
6.5 FLOOR PLAN DATA SHEETS. Supplier shall, without additional charge and
within thirty (30) days prior to shipment of an order by Supplier, deliver to
AT&T's Order Management Representative, a completed Floor Plan Data (FPD) Sheet
for Products sold hereunder. Such FPD sheets shall be prepared in accordance
with the requirements of *******************************************************
********************************************************************************
*************.
6.6 FUTURE IMPROVEMENTS AND BENEFITS. As Supplier announces Enhancements,
Supplier shall advise Company of their features and advantages. Notwithstanding
Clause 1.1 STATEMENT OF PURCHASES, as to both the Deliverables and Enhancements,
Supplier has assured Company under Clause 3.4, TERMS NO LESS FAVORABLE, that the
overall price granted to Company is at least as favorable as those now granted
by Supplier to any of its similarly situated commercial customers for like
quantities. If, during the term of this Agreement, Supplier should grant lower
prices for like quantities to any similarly situated commercial customers, then
Supplier shall offer the same prices to Company, including all special
requirements imposed on and agreed to by the customer, with no impact on the
terms and conditions contained in this Agreement unless specifically noted by
Supplier and agreed to by Company in writing. Supplier shall not be obligated
to grant Company a lower price if such lower price would be unlawful under any
applicable state or federal law. If Company becomes aware of more favorable
terms, warranties and benefits offered by Supplier to any similarly situated
commercial customer, Supplier shall, upon notification by Company and
verification by Supplier, offer the same terms, warranties and benefits to
Company for the remainder of the Agreement.
6.7 ASSURANCE OF SUPPLY. Supplier must provide written notification to Company
eighteen (18) months in advance of Supplier's intended date to discontinued
availability (DA) the Product purchased by Company or to substitute or replace
such Product if form, fit or function is affected. If Supplier's vendor
terminates production of a Component of the Product, Supplier will use
reasonable efforts to secure sources for such Components; provided however, that
Supplier reserves the right to provide a shorter notice in the event Supplier's
vendor of a critical Component terminates production of such items and no other
sources for such items can be secured. Within six (6) months of notification of
DA, Company will provide written notification to Supplier that it concurs with
Supplier's decision or that it intends to negotiate the terms, conditions and
prices under which availability shall be extended, provided that such Components
are available to Supplier. Unless otherwise agreed to, the framework for that
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agreement is that Supplier will be entitled to recover its costs of providing
continued availability, plus a reasonable profit.
6.8 INSIGNIA. Upon Company's written request, certain of Company's trademarks,
trade names, insignia, symbols, decorative designs, or evidences of Company's
inspection (hereafter "Insignia"), will be affixed by Supplier to the
Deliverables furnished hereunder. Such Insignia will not be affixed, used or
otherwise displayed on the Deliverables or in connection therewith without
Company's written approval. The manner in which such Insignia will be affixed
must be approved in writing by Company. Deliverables 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.
6.9 MARKING. All Product furnished hereunder shall be marked*****************
*******************************************************************************
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************.
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*********************************************.
6.10 RADIO FREQUENCY STANDARDS. The Components shall comply, to the extent
applicable, with the requirements of ******************************************
********************************************************************************
********************************************************************************
**************. Should the Product during use generate harmful interference to
radio communications, Supplier shall provide to Company information relating to
methods of suppressing such interference. In the event such interference cannot
reasonably be suppressed, Supplier shall, at the option of Company, accept
return of the Product and refund to Company the price paid for the Product.
Nothing herein shall be deemed to diminish or otherwise limit Supplier's other
warranty obligations under this Agreement.
6.11 SUPPLIER TESTING. In addition to any other tests to be requested by
Company as set forth in this Agreement, Supplier is responsible for the
performance of standard factory production tests. Such tests shall be performed
in accordance with Supplier's normal testing and quality control procedures for
Deliverables of the type purchased hereunder in order to insure that the
Deliverables provided hereunder meets all applicable specifications. At the
request of Company, Supplier shall furnish a copy of its test plans and quality
control procedures to Company prior to initiating any such testing and Company,
at its expense, may witness any of the testing by giving prior notice to
Supplier. Supplier also agrees to maintain detailed records of all such tests
and to provide Company, if requested, with written results of these tests.
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In the event that the Deliverables fails to meet the applicable specifications
and test requirements, Supplier shall make the necessary adjustments or repairs
and repeat the applicable tests. If, in the opinion of Company, the failure
rates experienced during these tests or Company's testing becomes
unsatisfactory, all shipments of like Deliverables to Company shall be suspended
unless otherwise authorized by Company.
If Supplier is unable or unwilling to correct, at Supplier's expense, any
deficiencies found during testing provided hereunder within thirty (30) days of
such discovery or such longer period as may be mutually agreed upon, Company, at
its option, shall be relieved of all responsibilities under this Agreement
except for payment, as specified in this Agreement, for any Deliverables that
has been received by Company and has satisfactorily passed all applicable tests.
6.12 TRAINING.
PILOT TRAINING
Supplier will provide training material, of a pilot training course covering the
operations, administration, maintenance and provisioning for the Product with
each new Generic Release. At Company's request, Supplier will offer additional
training which will be subject to content and pricing agreed to in a separate
purchase order. Supplier agrees to update the training material to reflect
subsequent and continuing technology releases. Training courses on new Non-
Generic releases will be negotiated on a case by case basis.
Following the completion of the pilot training classes, Supplier agrees to
modify training materials, training content and related documentation to
incorporate corrections and improvements identified during the pilot training.
Supplier additionally agrees to modify, prior to rollout training, the
documentation related to training, to incorporate mutually agreed upon
corrections and mutually agreed upon improvements identified during pilot
training.
ROLLOUT TRAINING
After completion of pilot training sessions, training will be offered to Company
personnel covering operations, administration, maintenance and provisioning for
the Product.
6.13 SPARES. Supplier will provide technical documentation including system,
units and circuit pack failure rates based upon field data and/or predictions
required to determine and upgrade required spare kits. Supplier will provide
recommended spares listings to Company.
ARTICLE 7 -- WARRANTY, MAINTENANCE AND SUPPORT SERVICES
7.1 WARRANTY. Supplier warrants that Deliverables furnished under this
Agreement will be free from defects in design and will conform to the
specifications for work performed under this Agreement. The Media conveying the
Software will be free from defects in material and workmanship. The Software
will be compatible with and may be used in conjunction with other Software as
described in the specifications. If an Order, Supplemental Agreement or TCL
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Page 35 of 1
states that the Software is to be used in conjunction with certain Product, the
Software shall be compatible with that Product.
The Warranty Period for Software shall be 12 months from Software Acceptance by
Company. For Products accepted in accordance with the Product Acceptance clause
of this Agreement prior to Software Acceptance, the Warranty Period shall begin
upon Product installation and continue until twelve (12) months from Software
Acceptance provided Supplier installs the Product. If Supplier does not provide
installation service, the Warranty Period shall begin upon delivery and continue
until twelve (12) months after Software Acceptance. For Products accepted in
accordance with the Product Acceptance clause of this Agreement after Software
Acceptance, the Warranty Period shall be twelve (12) months from Product
Acceptance, if Product is installed by Supplier, or twelve (12) months from date
of shipment if Supplier does not install Product.
Supplier will provide a twelve (12) month warranty for each Software Release
licensed or purchased by Company. Supplier will grant a continuous Software
warranty provided that Company continues to license or purchase updated Software
Releases and such updated Software Releases' Q1 date falls within the warranty
period of the prior release.
Supplier agrees to add to the Warranty Period for the prior release the
difference between the original Q4 date and the revised Q4 date for the new
release under the following conditions:
(1) Supplier is primarily responsible for a delay in Q4 and
(2) the Q4 delay causes the new Q1 date for the new release to fall outside the
Warranty Period of the prior release.
Supplier further warrants that all Software developed by Supplier hereunder and
delivered to Company will record, store, process and present calendar dates
falling on or after January 1, 2000, in the same manner and with the same
functionality, as such Software on or before December 31, 1999. Supplier's
Representative will consult with Company's Representative as needed prior to
acceptance to ensure that such Software will lose no functionality with respect
to the introduction of records containing dates falling on or after January 1,
2000.
Supplier also warrants to Company and its customers that any Services will be
performed in a first class, workmanlike manner.
These warranties will survive inspection, acceptance and payment.
Where any Warranty Period under this Agreement is identified as commencing upon
delivery, the specification of delivery to Company to start Warranty Periods is
for purpose of convenience and does not constitute acceptance of any Product or
Software by Company and does not affect Company's right to reject non-conforming
Product or Software.
Supplier also warrants that there are no copy protection or similar mechanisms
within the Software which will, either now or in the future, interfere with the
grants made in this Agreement, Order, Supplemental Agreement or ▇▇▇.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
As to Software for which Supplier does not solely own all intellectual property
rights, Supplier warrants that it has full right, power and authority to license
or assign the Software to Company and its customers as provided in this
Agreement, Order, Supplemental Agreement or TCL.
Supplier further warrants that Company and its customers shall have quiet
enjoyment of the Software.
If the Software, or any portion thereof, is or becomes unusable, totally, or in
any respect during the applicable Warranty Period, or if the work fails to meet
the warranties, Supplier will reperform the work, correct errors, defects and
nonconformities and restore the Software to conforming condition free of
significant errors at no cost to Company or its customers. Corrected Software
shall be warranted as set forth in this clause.
Supplier further warrants that the Software does not contain any malicious code,
program, or other internal component (e.g. computer virus, computer worm,
computer time bomb or similar component), which could damage, destroy or alter
Software, firmware, or hardware or which could, in any manner, reveal, damage,
destroy or alter any data or other information accessed through or processed by
the Software in any manner. Supplier shall immediately advise Company, in
writing, upon reasonable suspicion or actual knowledge that the Software
provided under this Agreement or an Order, Supplemental Agreement or TCL may
result in the harm described above. Supplier shall indemnify and hold Company
and its customers harmless from any damage resulting from the harm described
above.
7.2 SOFTWARE/PRODUCT SUPPORT SERVICES. Software/Product Support Services
(following Acceptance into the ITN through the expiration of the Warranty
Period), shall be available on a ***********************************.
The response time for each Severity Level of system problems is specified in
Exhibit H "Severity Levels" for work performed under this Agreement attached
hereto and made a part hereof.
7.3 WARRANTY AND MAINTENANCE SERVICES. Supplier shall provide Warranty and
Maintenance Services ("Maintenance Services") at no charge during the applicable
Warranty Period. Such services shall be performed to the complete satisfaction
of Company, shall be performed in accordance with generally accepted industry
standards and shall be in accordance with such requirements or restrictions as
may be lawfully imposed by governmental authority. Ongoing technical support
shall be available on a ****************************************************
*****************.
Supplier will keep on file with Company's Technical Representative and Company's
Agreement Representative, a list of specified personnel with current work, fax
and automated pager system numbers who will be available for immediate contact
in emergency or service impairing situations.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
7.4 REPAIR AND MAINTENANCE SERVICES WARRANTY. Supplier warrants to Company and
its customers that replacement and repair parts and components furnished under
this Agreement, Order, Supplemental Agreement or TCL shall be free from defects
in design, material and workmanship and shall conform to and perform in
accordance with the requirements and specifications of each Order, Supplemental
Agreement or TCL and shall function properly. The foregoing warranties for a
repaired part or component shall be for a period of the longer of one (1) year
from the date of delivery of the part or component to Company or the remaining
part of the warranty period of the part or component that was submitted for
repair. The foregoing warranties shall be for a period of one (1) year from the
date of delivery of the part or component in the case of new parts or
components. Supplier further warrants to Company that the Services shall be
performed in a first class, workmanlike manner. In addition, if the parts or
components bear one or more manufacturers' warranties, Supplier hereby assigns
such warranties to Company. All warranties shall survive inspection, acceptance
and payment.
7.5 REPAIR UNDER WARRANTY. Defective or nonconforming Deliverables under
warranty will, at Company's option, either be returned to Supplier for repair
or replacement, or be repaired or replaced by Supplier on-site at Supplier's
expense. Unless otherwise agreed upon by Supplier and Company, Supplier
shall complete repairs and ship the repaired Deliverables within *************
of receipt of defective or nonconforming Deliverables, or at the option of
Company, ship replacement Deliverables within ****************** after verbal
notification is given to Supplier by Company. Supplier shall bear the cost of
transportation charges for all shipments of Deliverables for repair or
replacement under warranty.
If Deliverables returned to Supplier are determined to be beyond repair,
Supplier shall so notify Company, and unless otherwise agreed to by Supplier and
Company, ship replacement Deliverables without charge within ******************
of such notification.
7.6 REPAIR NOT UNDER WARRANTY. In addition to repair and replacement of
Deliverables under warranty, Supplier agrees to provide repair service on all
Deliverables ordered hereunder for a period of **************** after the last
installation and acceptance, where applicable, of the Deliverables ordered under
this Agreement by Company. Deliverables to be repaired which are not under
warranty will be returned to a location designated by Supplier, and unless
otherwise agreed upon by Supplier and Company, Supplier shall ship the repaired
Deliverables within *************************** of receipt of the Deliverables
by Supplier. With the concurrence and scheduling of Company, repairs may be
made by Supplier on-site.
If Deliverables are returned to Supplier for repair as provided for in this
clause, and are determined by Supplier to be beyond repair, or repair costs are
expected to exceed (50%) fifty percent of the cost of a replacement, Supplier
shall so notify Company prior to proceeding with the repair. If requested by
Company, Supplier will sell to Company a replacement at the current Agreement
price or, if no such Agreement price exists, at a price agreed upon by Supplier
and Company. Further, if requested by Company, Supplier shall take the
necessary steps to dispose of the unrepairable Deliverables, consistent with
sound commercial practices, and pay to Company the salvage value, if any.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
This Agreement does not grant Supplier an exclusive privilege to repair any or
all of the Deliverables purchased hereunder for which Company may require
repair. Supplier also agrees to support Company in obtaining out-of-warranty
repairs by assuring the availability of the necessary technical documentation,
spare parts and training at charges to be agreed upon by Company and Supplier.
Company shall bear the cost of transportation charges for all shipments of
Deliverables for repair or replacement not under warranty.
7.7 REPAIR PROCEDURES. Company may contact Supplier's repair representative
with any questions that may arise concerning repair, and if required, specify
any special packaging of Deliverables which might be necessary to provide
adequate in-transit protection from transportation damage.
Company shall furnish the following information with Deliverables returned to
Supplier for repair: (a) return material authorization (RMA) number, (b)
Company's name and complete address; (c) name(s) and telephone number(s) of
Company's employee(s) to contact in case of questions about the Deliverables to
be repaired; (d) ship-to address for return of repaired Deliverables if
different than (b); (e) a complete list of Deliverables returned; (f) the nature
of the defect or failure, if known; and (g) whether or not returned Deliverables
are under warranty.
Deliverables repaired by Supplier shall have the repair completion date
stenciled or otherwise identified in a permanent manner at a readily visible
location on the Deliverables and the repaired Deliverables shall be returned
with a tag or other papers describing the repairs which have been made.
All invoices originated by Supplier for repair services must be clearly
identified as such, and must contain in addition to the itemized listing of
parts and labor charges and information required by other provisions of this
Agreement, (a) part number, (b) description of repair service performed, (c)
date part received by Supplier, (d) Order quantity, (e) completion date for
repair, (f) actual ship date, (g) actual ship quantity, and (h) junked quantity.
7.8 REPAIR AND REPLACEMENT PARTS/SERVICES - EMERGENCY SERVICE AND DISASTER
RECOVERY. In addition to the warranty and out-of-warranty Deliverables repair
and replacement provisions of this Agreement, Supplier agrees to provide
emergency repair and replacement service for a period of **************** after
the last installation and acceptance of the Deliverables ordered under this
Agreement by Company. Whenever an emergency out-of-service condition is caused
by Deliverables furnished hereunder, Supplier shall use best efforts to ship
replacement Deliverables within *********************** of notification by
Company of such emergency.
In order to schedule shipment of replacement Deliverables, Company may call
Supplier's Repair Representative. This service will be available *************
*******************************.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
Company shall assign a Severity Level which is based on the potential impact on
the performance or reliability of the system and the required resolution time
frame. The Severity Levels shall be defined in Exhibit H, "Severity Levels"
attached hereto and made a part hereof.
7.9 REPAIR AND REPLACEMENT PARTS/SERVICES - CONTINUING AVAILABILITY. Supplier
agrees to offer parts for maintenance, replacement, and repair of Product for
sale to Company, for a period of **************** after the last installation
and acceptance of the Product ordered under this Agreement by Company, which
parts will be compatible with and functionally equivalent to those provided
under this Agreement. Prices or charges will be in accordance with this
Agreement, the respective Order, Supplemental Agreement, TCL or its exhibits,
and in all events all prices and charges must be reasonable and are subject to
Clause 3.4 TERMS NO LESS FAVORABLE.
In the event Supplier fails to supply such parts or Supplier is unable to obtain
another source of supply for Company, then such inability shall be considered
noncompliance with this clause and, in addition to whatever other rights and
remedies Company may have at law or in equity, Company may require Supplier,
without obligation or charge to Company, to provide Company with the technical
information and any other rights required so that Company can manufacture, have
manufactured or obtain such parts from other sources.
The technical information shall include, for example, (a) manufacturing drawings
and specifications of raw materials and components comprising such parts, (b)
manufacturing drawings and specifications covering special tooling and the
operation thereof, (c) 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 price lists for the purchase thereof, and
(d) one complete copy of the then related current source code and associated
licenses, if such source code is licensed by Supplier to Company, used in the
preparation of any software licensed or otherwise acquired by Company from
Supplier hereunder, to the extent necessary for Company to meet its business
operations.
7.10 SUPPORT OF SELF AND THIRD PARTY MAINTENANCE. Supplier agrees to provide
Company or its third party contractors the materials and services upon the terms
and conditions of this Agreement and upon such further terms and conditions as
may be mutually agreed upon to support Company's self-maintenance or third party
maintenance of the Deliverables and Software furnished hereunder. Supplier
agrees to negotiate in good faith and agrees not to impose unrealistic or
excessive conditions upon Company in an attempt to preclude Company's self
maintenance or its desire to have third party maintenance performed.
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Page 40 of 1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
7.11 Technical Support. Supplier agrees to offer ongoing technical support,
including field service and assistance, to Company, for a period of
************** after the installation and acceptance of the Product and Software
by Company. There shall be no charge during the applicable warranty periods;
charges after such Warranty Periods shall be as set forth in each Order,
Supplemental Agreement or TCL, or if not specified therein, then at prices to be
mutually agreed upon, subject in all cases to the Clause 3.4- TERMS NO LESS
FAVORABLE. The availability or performance of this technical support service,
however, shall not be construed as altering or affecting any of Supplier's other
obligations set forth in this Agreement.
Ongoing technical support which does not include dispatch or field service shall
be available to Company by telephone from Supplier at no charge; this telephone
service at no charge is not intended to be used in excess but is to provide
availability of Supplier subject matter expertise to Company by telephone for
advice and consultation.
7.12 DISPOSITION OF RECURRING NO-TROUBLE-FOUND RETURNS. The same Deliverables
element/component shall not be returned by Supplier to Company with the notation
no-trouble-found (NTF) on more than one (1) occasion. On the second occasion
that the same Deliverables element/component has been classified by Supplier as
NTF, the Deliverables element/component shall be scrapped by Supplier and
Supplier shall ship a new rather than reconditioned replacement to Company for
the scrapped Deliverables element/component at no charge for that Deliverables
under warranty. For out of warranty Deliverables, Supplier shall invoice
Company for the new Deliverables element/component at Supplier's cost for the
Deliverables element/component.
7.13 FAILURE MODE ANALYSIS OF FAILED COMPONENTS. Supplier shall perform
Failure Mode Analysis on components with a persistent history of failure and NTF
components to determine the specific cause of the component failure. The
results of this analysis and planned corrective action shall be provided to
Company within fourteen (14) calendar days of the completion of the analysis.
Root Cause Analysis:
Failure mode and root cause analyses - Supplier or one of its subcontractors
shall analyze all failures, uncovered during testing, or while the network
element is operating in the field, to a sufficient depth so as to determine to
the satisfaction of Company, which Company shall acknowledge in writing,
Supplier or its subcontractor has determined:
- the precise failure mode
- root cause of the failure, and
- one or more potential corrective actions, including the time and cost to
implement each.
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Page 41 of 1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
Supplier shall implement those corrective actions which Company shall deem to be
necessary. Company shall use best efforts to suggest reasonable corrective
actions. Supplier or subcontractor shall complete all failure analyses on a
unit, including root cause analysis and recommended corrective actions, within
30 days after receiving the unit. If Supplier or its subcontractor requires
additional time to complete the analyses, the rationale for the extension shall
be presented to Company in writing.
Supplier shall notify Company with a detailed description in writing if the
actual failure rate of a circuit pack type exceeds the expected failure rate for
that circuit pack type.
ARTICLE 8 -- SOFTWARE
8.1 STANDARD OF PERFORMANCE AND ACCEPTANCE OF SOFTWARE. The intent of this
clause is to establish Company's standard of performance which must be met
before the Software is accepted by Company.
Company's Software Acceptance criteria will be contained in the mutually agreed
upon Quality Plan. Software Acceptance only occurs when the exit criteria for
Q2, as defined in the Quality Plan, has been met. If, according to Company's
determination, Supplier fails to meet the exit criteria for Q2, Company will
notify Supplier within thirty (30) days. If the exit criteria for Q2 is met and
thereby acceptance by Company occurs, Suppler will be notified within thirty
(30) days. Company shall have the right to accept portions of the Software.
If Software is rejected by Company, Supplier shall use its best efforts to
correct each error leading to the rejection in accordance with the Quality Plan.
If the corrected Software passes the acceptance tests, Supplier shall
incorporate the correction(s) in the Software according to Company's
requirements.
For Software that has not been accepted by Company in accordance with the
criteria specified in the Quality Plan within **************************** after
the scheduled delivery date, Company shall have the right, at its option:
(i) to retain the Software at an equitable adjustment in the license
fees as may be agreed to by the parties, in which case the Software
shall be deemed accepted;
(ii) to afford Supplier one (1) or more correction extensions for a
period or periods to be specified by Company without prejudice to
Company's rights to thereafter exercise its option under either
section (i) or (iii) of this paragraph without further notice to
Supplier, if the errors have not been corrected; or
(iii) to be entitled to a prompt and full refund of all monies previously
paid under the Order, Supplemental Agreement or TCL.
If option (iii) is exercised, Company shall have no further obligation to
Supplier under the Order, Supplemental Agreement or TCL for the Software and may
elect to terminate the such at any time by written notice to Supplier.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
In addition, if Company has not accepted that Software as set forth above in the
previous paragraph, then Company may also return
(i) any Supplier provided Product that cannot be applied to another
use by Company purchased for the specific Software Release, in the
form in which it may have been assembled, and
(ii) any associated Software that it is mutually agreed cannot
be applied to another use by Company, to Supplier for, at
Company's option, either refund or credit to Company against
future purchases.
Included in such credit or refund will be any fees paid for such Software and/or
Product together with any associated taxes, shipping, installation and other
expenses paid by Company to Supplier in connection with such Software and/or
Product.
8.2 CANCELLATION. In the event that Company de-commits a Feature, Company
shall pay to Supplier cancellation fees calculated as follows:
(a)*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
(b)*****************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*******************************************************************************:
(i) **************************************************************
**************************************************************************
**************************************************************************
***********************************************************************.
(ii) **************************************************************
**************************************************************************
**************************************************************************
***********************************************************************.
******************************
******************************
******************************
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Page 43 of 1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
(iii) *************************************************************
**************************************************************************
**************************************************************************
***********************************************************************.
8.3 MEDIA. Upon delivery to Company, all Media shall become the property of
Company except that fixed in Product, title to which shall pass to Company upon
acceptance of the Product.
8.4 LICENSE FEE. Fees for the license of the Software and the maintenance of
the Software are listed in Exhibit A "Pricing and Payment Schedule for the
******* Service". Once a year only, Supplier may change the fees for recurring
charges if (1) such change is part of a change to Supplier's published price
list, and (2) if ninety (90) days prior written notice is given to Company. Any
provisions included in Supplier's published price list other than those relating
to price and description of items to which prices apply shall be deemed deleted.
Fee(s) changes shall not become effective until Supplier receives Company's
written consent to the specific fee(s) changes (or until ninety (90) days from
Supplier's notice with no reply from Company). Supplier agrees that any
increase in fees will be no more than ***************** of the fees in effect at
the time of the written notice of such change.
8.5 CENTRALIZED MAINTENANCE. Company may specify in an Order, Supplemental
Agreement or TCL that, for centralized maintenance purposes, all Software
changes, including Enhancements, provided by Supplier shall be provided only to
the Company's centralized support organization. Supplier will, in that event,
be responsive to maintenance requests which the Company's centralized support
organization issues. This organization will be responsible for Software
application, initial acceptance testing and distribution of the Software to all
licensed sites.
Supplier grants Company the right to transmit the Software by means of data
links from Company's centralized support organization to each licensed site.
Supplier grants to Company, at no additional fee, a license to Use a copy of the
Software for centralized maintenance purposes only. Supplier shall provide this
maintenance copy of the Software in response to an Order, Supplemental Agreement
or TCL requesting same. The maintenance copy provided to Company's centralized
support organization will be used only to perform systems or application support
functions for Company's application programmers, except as provided hereinafter.
If the maintenance copy of the Software provided pursuant to this clause or a
copy thereof is later incorporated by Company's centralized support organization
into a Company system or application support Software, Company shall notify
Supplier and shall pay Supplier the current applicable rate paid by Company for
use of the Software.
8.6 ENHANCEMENTS AND MAINTENANCE. Supplier shall promptly furnish to Company
during the duration of the Order, Supplemental Agreement or TCL at an agreed
upon charge, if any, all Software Enhancements, made available by Supplier to
any of its customers and shall promptly
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Page 44 of 1
provide to Company any revisions to the basic Software items defined in the
Software and Programming Aids clause to reflect the Enhancements.
All Enhancements shall be considered Software subject to the provisions of this
Agreement, any Order, Supplemental Agreement or TCL. Company may incorporate
the Enhancements into the Software or continue using previous versions of the
Software, at Company's option. Company may, at any time and at its discretion,
discontinue maintenance of the Software. Supplier shall not charge Company for
Enhancements or any other maintenance during the warranty period
8.7 INTELLECTUAL PROPERTY RIGHTS. Subject to provisions in Clauses 4.5 and
4.6, title to the Software and to intellectual property rights therein shall
remain in Supplier or Supplier's licensor, as applicable. Company shall have
the right to make a reasonable number of copies of the Software for use as
authorized in the Order, Supplemental Agreement, TCL or elsewhere in this
Agreement. Company however, shall not knowingly reproduce copies of the
Software for the purpose of supplying it to others except individuals authorized
herein.
8.8 MODIFICATIONS. Company may make Modifications to the Software if Company
has obtained appropriate licenses or rights. Company shall have all right,
title and interest to any Modifications and resulting derivative works and the
intellectual property rights in such Modifications or works. Moreover, nothing
contained in this Agreement, or any Order, Supplemental Agreement or TCL shall
limit Company's right to reproduce and use the modified Software in as many
copies as Company, in its sole discretion, deems appropriate. However, any
portion or aspect of the modified Software which is licensed from Supplier under
this Agreement or any Order, Supplemental Agreement or TCL shall continue to be
subject to all the provisions of this Agreement and any Order, Supplemental
Agreement or TCL and nothing contained herein grants to Company any rights to
Use the Software other than as recited in this Agreement or any Order,
Supplemental Agreement or TCL.
8.9 REDESIGNATION OR TRANSFER OF DESIGNATED SITE OR COMPUTER. If Company
specifies that Company's use of the Software is limited to a designated site or
a designated computer, the provisions of this clause shall apply. For purposes
of this clause, site shall include computer, as applicable to the Order,
Supplemental Agreement or TCL. A redesignation shall refer to a change of site
and shall include the movement of Software to upgraded Product. A transfer
shall refer to a temporary change of site of the Software.
Without an additional charge or fee or any requirement for any additional
license, Company may:
(A) Redesignate the site at which the Software will be used and shall
notify Supplier of the new site and the effective date of the redesignation; and
(B) Concurrently operate the Software at another site for a period not to
exceed three (3) months for the purpose of redesignating the assigned using
site.
The license granted under the Order, Supplemental Agreement or TCL for a
designated site may be transferred without notice to Supplier and at no
additional charge or fee to Company:
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Page 45 of 1
(a) to a backup site if the computer at the designated site is inoperative due
to malfunction, due to performance of preventive or remedial maintenance, due to
engineering changes or due to changes in features or model, until the computer
is restored to operative status and processing of the data already entered in
the computer at the backup site has been completed or (b) to one other site for
assembly or compilation of the Software if the specifications of the computer at
the designated site are such that the Software cannot be assembled or compiled
on the computer.
8.10 REMOTE ACCESS. Company shall have the right, at no additional charge or
fee, to have the Software used at any other location by means of remote
electronic access.
8.11 RISK OF LOSS. If any Software fixed in Media is lost, damaged or made
invalid during shipment, Supplier will promptly replace the Software and Media
therefore at no additional charge to Company. If any Software is lost or
damaged while in the possession of Company, Supplier will promptly replace the
Software at the established charge for the associated Media unless such is
provided by Company.
8.12 SOFTWARE AND PROGRAMMING AIDS. On the delivery date, Supplier shall
furnish to Company, at no additional charge or fee, at least the following basic
items:
(A) Object program (the fully compiled or assembled series of
instructions, written in machine language, ready to be loaded into the
computer, that guides the operation of the computer) stored in a Medium
compatible with the Product described in the Order, Supplemental
Agreement or TCL;
(B) Program implementation and user instructions and required procedures;
(C) The Supplier's Specifications associated with Software, as well as
the required machine configuration;
(D) Sample data output, such as printouts or typical screen displays, and
any other programs, routines, subroutines, utility or service programs,
flow charts, logic diagrams and listings, descriptive Supplier
Specifications and acceptance Supplier Specifications or related material
Supplier may have which is necessary or useful for the full implementation
and Use of the Software and which Supplier normally furnishes to users of
the Software without additional charge or fee.
(E) Source Program (the computer program expressed in a source language)
if licensed by Supplier as part of the Software ordered hereunder.
8.13 SOURCE PROGRAMS AND TECHNICAL DOCUMENTATION. Supplier shall, at Company's
request, enter into an Escrow Agreement to safeguard Supplier's Software
Specifications and source code as long as Supplier has obligations to Company
per this Agreement relevant to said Software. Both parties shall negotiate in
good faith such Escrow Agreement to be agreed upon by March 15, 1998.
If the parties have not entered into an Escrow Agreement then the following
clause shall apply:
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If Supplier, among other things, becomes insolvent, ceases to carry on business
on a regular basis or fails to perform its obligations under the Order,
Supplemental Agreement or TCL, and during a period of thirty (30) days
thereafter Supplier (or some other financially and technically responsible
successor in interest acceptable to Company which assumes in writing Supplier's
obligations under the Order, Supplemental Agreement or TCL) does not continue to
perform those obligations, then (a) Supplier, or others acting on behalf of
Supplier, shall furnish to Company all Software source materials and (b)
Supplier will be deemed to have granted to Company a perpetual non-exclusive
royalty-free right to Use the Software and the Software Source Materials under
the provisions of the Order, Supplemental Agreement or TCL. If Company's use of
the Software source materials involves use or copying of copyrighted material or
the practice of any invention covered by a patent, Supplier shall not assert the
copyright or patent against Company.
8.14 TRAINING AND TECHNICAL SERVICE. Supplier shall provide, at no additional
charge or fee: (a) assistance and advice, as may be reasonably requested by
Company necessary to assist in the Use of the Software and (b) any training as
it normally provides without charge to users of the Software.
8.15 SOFTWARE LICENSE. Subject to the provisions in Clauses 4.5, 4.6 and 4.8,
Supplier agrees to grant and hereby grants to Company an exclusive license to:
1) use the Software that is delivered by Supplier to Company for all
Features designated as exclusive under Clause 4.8 EXCLUSIVITY DESIGNATION
of this Agreement for Company's business operations and any other purpose
and on the equipment set forth in the Order, Supplemental Agreement or
TCL.
2) copy the Software that is delivered by Supplier to Company for all
Features designated as exclusive in Clause 4.8 EXCLUSIVIITY DESIGNATION of
this Agreement, for Company's own business operations, not including
expansions.
Notwithstanding the provisions of the exclusive license for the Software that is
delivered by Supplier to Company, for all Features designated as exclusive in
the Exclusivity Designation clause of this Agreement, Company may at its sole
discretion give its written approval for Supplier to license to a third party
some or all of the exclusive Features upon receiving a written request from
Supplier. Under no circumstances shall Supplier license the exclusive Features
to a third party without the written approval of Company for the agreed upon
exclusivity time period outlined within this Agreement only.
Subject to the provisions in Clauses 4.5, 4.6 and 4.8, Supplier agrees to grant
and hereby grants to Company a license to
1) use the Software developed for all non-exclusive Features Company's
business operations and any other purpose and on the equipment set forth
in the Order, Supplemental Agreement or TCL.
2) copy the Software developed for all non-exclusive Features for
Company's own business operations, not including expansions.
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All Software (whether or not part of Firmware) furnished by Supplier, and all
copies thereof made by Company, if allowed hereunder, including translations,
compilations and partial copies thereof, are solely the property of Supplier.
Company shall not sublicense such Software except to Ordering Companies. No
additional fee shall be payable by Company to Supplier for sublicensing such
Software to Ordering Companies.
Company shall not modify, decompile, or disassemble such Software furnished as
object code for the purpose of generating corresponding source code, unless
otherwise agreed in writing.
The foregoing license extends to any use of any program or software derived from
the Software.
8.16 SOFTWARE WARRANTY. Refer to Article 7, Clause 7.1 "WARRANTY"
ARTICLE 9 -- ENGINEERING & INSTALLATION SUPPORT
9.1 STATEMENT OF WORK. Subject to the terms and conditions of this Agreement,
Supplier agrees to engineer, furnish and deliver material, and perform
installation services (hereinafter collectively "Work") as may be specified on
Orders, Supplemental Agreements or TCLs which may be placed by Company.
Supplier shall furnish and transport all the tools, supplies and labor necessary
to perform all the Work
The Work shall be performed in accordance with Exhibit F, "General Conditions,"
attached hereto and made a part hereof, and any additional Specifications
included in Orders, Supplemental Agreements or TCLs. It is understood that
certain documentation referred to in Exhibit F "General Conditions", such as but
not limited to, premise detail drawings, network equipment layout, attachment
details, cable penetration locations, physical design or other premise specific
requirements will be reflected in an Order, Supplemental Agreement or TCL and in
the associated documents submitted to Supplier by Company. In the event of any
conflict between the General Conditions, the Specifications, related documents
and drawings, or an Order, Supplemental Agreement or TCL the true construction
and meaning thereof shall be determined by Company's Technical Representative as
identified on the Order, Supplemental Agreement or TCL and such determination
shall be final.
The Work shall be performed with promptness and diligence and to the
satisfaction of Company and shall be performed in accordance with such
requirements or restrictions as may be lawfully imposed by governmental
authority. Supplier shall complete such Work within the time allowed in this
Agreement and shall meet all deadlines as specified in an Order, Supplemental
Agreement or TCL.
TIME SHALL BE OF THE ESSENCE in the performance of this Agreement or any Order,
Supplemental Agreement or TCL by Supplier. Whenever Supplier has knowledge that
any actual or potential labor dispute or any other event may delay or threaten
to delay the timely performance of any Order, Supplemental Agreement or TCL
issued hereunder, Supplier shall immediately give notice thereof, including all
relevant information with respect thereto, to Company's Representative as
identified on the Order, Supplemental Agreement or ▇▇▇.
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Supplier agrees to use its best efforts to provide scheduling information,
including any changes that occur due to revisions made by Company to the work
plan or as the work progresses at a particular premise. Supplier acknowledges
that schedule changes may occur from time to time and agrees to comply with
reasonable schedule changes without additional compensation. Supplier shall use
its best efforts to coordinate its work with Company and/or other suppliers on
each project so as not to delay or damage anyone's performance, work or the
overall project.
9.2 COMPANY STORED EQUIPMENT AND MATERIAL. All material and equipment which is
owned by Company and is stored by Supplier will be marked conspicuously as
AT&T's property, and safely stored by Supplier separately from any other
material stocks, without charge to Company and shall be shipped out as ordered
by Company. Supplier assumes responsibility for any loss or damage to such
equipment and material while stored by Supplier or shipped to Supplier's
subcontractors.
9.3 TITLE TO MATERIAL FURNISHED BY COMPANY. Title to material furnished by
Company under this Agreement shall at all times be in Company. If Supplier
orders material as an authorized ordering agent of Company, such material shall
be considered material furnished by Company. In lieu of any common law or
statutory lien which could be asserted by Supplier, which common law and
statutory liens are hereby waived by Supplier, Company hereby grants to Supplier
a security interest in material furnished by Company to secure the value of
materials and labor furnished by Supplier. Supplier shall, within ten (10) days
of receipt of Company's material, notify Company in writing of any claims for
quantity variation or quality problems in the material furnished to Supplier.
Supplier assumes responsibility for any loss or damage to such material and
shall be liable for the full actual value of the material; provided, however,
that with regard to loss or damage caused by risks insured against under
Supplier's All Risk Property Insurance policy (including flood and earthquake
coverage), Supplier shall have risk of loss or damage and be liable for the full
actual value of the material up to a limit of $2,000,000 per occurrence with
Company bearing such risk of loss or damage above $2,000,000.
Supplier shall store the same safely, indoors in protected areas approved by
Company. In case of removal of all or any part of it from one building to
another, Supplier's responsibility for loss or damage shall continue and
Supplier shall give Company at least ten (10) days advance notice in writing of
the removal, except when the removal is required during Supplier's manufacturing
process.
Company may inspect and inventory the material furnished under this Agreement
during Supplier's normal business hours. Supplier shall provide Company access
to the premises wherein all such material is located. The obligations assumed
by Supplier with respect to material furnished under this Agreement are for the
protection of Company's property. Should Supplier fail to comply in any
respect, in addition to any other right or remedy Company may have, at no cost
to Company and upon ten days written notice to Supplier, AT&T or Company may
terminate the applicable Agreement or any Order, Supplemental Agreement or TCL
in whole or in part or withdraw all or any part of the material furnished or
both. Supplier shall, at Company's option, return to Company, or hold for
Company's disposition, any or all of such material, including any scrap produced
as a by-product remaining in Supplier's possession at the completion of the
Order, Supplemental Agreement or TCL upon termination of this Agreement, or the
withdrawal of material furnished.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
Supplier shall maintain and cause Supplier's subcontractors to maintain during
the term of this Agreement and during the period of time Supplier or its
subcontractors have the care, custody and control of material owned or furnished
by Company an All Risk Property Insurance policy, as described in Clause 5.3
INSURANCE clause of this Agreement.
9.4 INSPECTION AND REJECTION OF WORK. At any time during the progress of the
Work, or within ********* after final acceptance of the Work by Company, Company
may condemn or reject any or all of the Work if, in its opinion, the same is not
in accordance with the Orders, Supplemental Agreements or TCLs and any
specifications and drawings included therein, or not in accordance with the
warranty set forth in the SERVICE WARRANTY clause of this Agreement. Supplier,
at Supplier's own expense, shall repair or replace any of the Work condemned or
rejected within **************************** after receiving written notice from
Company's Representative as identified on the Order, Supplemental Agreement or
TCL of said condemnation or rejection if notice is given during the progress of
the Work. If the notice is given at any time following completion of the Work,
Supplier shall repair or replace any Work condemned or rejected within
****************** after receiving written notice; provided however, that if
Company notifies Supplier that any Work condemned or rejected is of a critical
nature, Supplier shall repair or replace the Work within **********************
after receiving written notice from Company's Representative. If Supplier
fails to complete promptly the repair or replacement of the Work, Company may
recover from Supplier the cost of making the same and the damage, if any,
resulting therefrom; or Company may deduct the cost of making the same and the
damage, if any resulting therefrom from any amount due or to become due under
this Agreement. Nothing in this Article shall relieve Supplier from inspecting
all of the Work under this Agreement. Company's rights are in addition to those
stated in the SERVICE WARRANTY clause. The contract completion date shall not
be extended because of any delay caused by Supplier's poor or defective
workmanship or failure to supply materials which conform to the specifications.
9.5 SERVICE WARRANTY. Supplier warrants to Company and its customers that the
Services will be performed with promptness and diligence and shall be executed
in accordance with the highest workmanship standards in the particular trades
involved and to Company's full and complete satisfaction. Supplier also
warrants to Company and its customers that the Services rendered and all
material furnished will be new, merchantable, free from defects in design,
material and workmanship, and will conform to and perform in accordance with the
General Conditions set forth in Exhibit F "General Conditions" attached hereto
and made a part hereof and the related Order, Supplemental Agreement or TCL
requirements for a period of three (3) years from date of acceptance by Company.
In addition, if material furnished contains one or more manufacturer's or
supplier's warranties, Supplier hereby assigns such warranties to Company and
its customers. All services performed and material furnished shall be free from
all claims, liens, and charges whatsoever, including, but not limited to,
claims, liens, or charges in the nature of mechanics' liens or materialmen's
liens, and Supplier shall indemnify and hold Company harmless from any such
claims, liens, and charges. All warranties shall survive inspection,
acceptance, and payment. Services or material not meeting the warranties, or
any damage to other work or to Company's property caused by work or material not
meeting the
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
warranties, will be, at Company's option, returned for refund, repaired, or re-
performed by Supplier at no cost to Company or its customers with transportation
costs and risk of loss and damage in transit borne by Supplier. Prior to final
acceptance of the Work, Supplier shall deliver to Company copies of all
guarantees and warranties on materials furnished by all manufacturers and
suppliers to Supplier and all its subcontractors. Supplier shall bind said
copies of the warranties together in single volume, grouped by trade and
properly indexed.
9.6 REJECTION AND REPLACEMENT, OR REMOVAL OF WORK AND MATERIAL. Supplier
shall, within *********************** after receiving a written order from
Company's on site representative to that effect, proceed to remove from
Company's premises, all defective or non-conforming materials whether worked or
unworked and to take down all portions of the Work which are unsound or improper
or which shall be determined by Company's on site representative to in any way
fail to comply with the Specifications, and to promptly replace them with sound
and proper material in a good and workmanlike manner to the satisfaction of
Company's on site representative. Nothing in this Agreement shall be construed
as relieving Supplier of Supplier's continuing duty to inspect the Work and
detect and correct any such defective or non-conforming work or material.
9.7 TOOLS AND EQUIPMENT. Unless otherwise specifically provided in this
Agreement, Supplier shall provide all labor, tools and equipment (the "tools")
for performance of this Agreement or any Order, Supplemental Agreement or TCL.
Should Supplier actually use any tools owned or rented by Company, Supplier
acknowledges that Supplier accepts the tools "as is, where is," that Company has
no responsibility for the condition or state of repair of the tools and that
Supplier shall have risk of loss and damage to such tools. Supplier agrees not
to remove the tools from Company's premises and to return the tools to Company
upon completion of use, or at such earlier time as Company may request, in the
same condition as when received by Supplier, reasonable wear and tear excepted.
9.8 BREAKAGE, DISAPPEARANCE, AND CONDITION. Supplier shall take whatever
precautions Supplier deems necessary or desirable (which do not violate
Company's plant rules or cause inconvenience or delay to Company) regarding
tools, equipment, materials, and supplies whether or not owned by Supplier,
which Supplier causes to be brought to Company's premises. Company shall have
no responsibility for their care, safekeeping, or operating condition. Company
shall not bear any cost associated with their breakage or disappearance.
9.9 CLAIMS AND LOSSES. Supplier assumes full responsibility for any damage or
loss to Company's property that may be caused by or result from any tortious act
or omission of Supplier or any person employed by or under contract with
Supplier. In the event of such damage, Company may elect to have repairs made
by Supplier, by Company personnel, or by other suppliers. In the event Company
shall elect to have Supplier repair the damage, Supplier shall promptly do so,
at its own expense and to Company's satisfaction. In the event Company shall
elect to have the damage repaired by its own personnel or other suppliers,
Supplier shall reimburse Company for the cost to it of such repairs.
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9.10 REPORTING DEFECTS. If any of Supplier's Work depends, for its proper
execution or results, upon the Work of any other supplier or suppliers, Supplier
shall inspect and promptly report in writing to Company's On Site Representative
as identified on the Order, Supplemental Agreement or TCL any defects in the
work that render it unsuitable for the proper execution or results, and Supplier
shall not proceed with that phase of the Work until so authorized by Company's
Order Management Representative.
9.11 BUILDING PERMIT, LICENSES, NOTICE. Any necessary building permits will be
obtained, filed and paid for by Supplier. All other necessary permits, licenses
and certificates, municipal or otherwise, required in connection with the Work,
will be obtained and paid for by Supplier who shall deliver copies of all such
permits or certificates to Company. Supplier shall give all requisite notices
relative to the Work to the proper authorities and have all necessary
inspections made at a time so as not to delay the Work.
9.12 CONTROL OF WORK. Supplier shall have full control and direction over the
mode and manner of doing the Work and of its personnel employed on or about the
Work.
9.13 SERVICE RECORDS. Supplier shall maintain complete records including, but
not limited to, all labor by trade and employee name and type of equipment by
hours, material purchased, and work subcontracted to other parties in connection
with all unit rate and cost plus fee work. Supplier shall also provide a one
line diagram of work completed pursuant to the individual Work Orders. The
records shall be maintained in accordance with recognized commercial accounting
practices and in such a manner that they may be readily audited. The records,
including all supporting documents, shall be available at all reasonable times
for audit by Company both during the contract period and for three years
following the date of final payment or until all disputes, if any, between
Supplier and Company have been finally resolved, whichever is later. Supplier
shall also maintain daily sheets, prepared in duplicate, showing all labor by
trade and employee name and type of equipment employed and material received.
Supplier shall require all subcontractors performing other than fixed price work
to maintain the same form and type of records as Supplier is required to
maintain and to make the records available to Company for inspection and audit.
9.14 SUSPENSION OF WORK. Company may suspend all or any portion of the Work at
any time. Where the period of such suspension is unreasonable and Supplier
incurs additional expense thereby, a reasonable adjustment shall be made in the
contract price and the time for completion of the Work, but no adjustment shall
be made unless a claim therefor is submitted in writing to Company within 48
hours of the occurrence of the suspension.
9.15 CLEAN UP. Supplier at all times, and at its expense, shall keep Company's
premises free from accumulation of waste materials or rubbish caused by
Supplier's operations. Upon completion of the Work, Supplier shall, at its
expense, remove promptly from the premise all of Supplier's implements,
equipment, tools, machines, surplus and waste materials and debris. If Supplier
fails to clean up as provided herein, Company may do so and charge the cost
thereof to Supplier or deduct same from Company's payment to Supplier.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
9.16 RELATIONSHIP. Supplier shall exercise full control and direction over the
employees of Supplier performing the Work covered by this Agreement. Any
changes in personnel that may be reasonably requested by Company through its
authorized representative, whether relating to the number of employees assigned
to the Work or the acceptability of particular employees, shall be made as soon
as reasonably possible.
Neither Supplier nor its employees or agents shall be deemed to be Company
employees or agents. It is understood that Supplier is an independent
contractor for all purposes and at all times. Supplier is wholly responsible
for withholding and payment of all federal, state and local income and other
payroll taxes with respect to its employees, including contributions from them
as required by law.
ARTICLE 10 - MISCELLANEOUS
10.1 PRODUCT EVOLUTION. Supplier will prepare an evolution plan for the
purpose of *********************************************************************
********************************************************************************
********************************************************************************
************************. The evolution plan will address the scope of work,
price/performance data, and estimated timeline to implement the ************.
Supplier will provide the completed evolution plan to AT&T for its review.
Following approval by AT&T, Brite will *****************************************
********************************************************************************
***********************************.
10.2 ASSIGNMENT. Supplier shall not assign any right or interest under this
Agreement, including monies due or to become due, or delegate or subcontract any
work or other obligation to be performed or owed under this Agreement without
the prior written consent of AT&T. Any attempted assignment or delegation in
contravention of the above provisions shall be void and ineffective.
10.3 CAPTIONS. The captions in this Agreement are included for convenience
only and shall not be construed to define or limit any of the provisions
contained herein.
10.4 CHOICE OF LAW. The construction, interpretation and performance of this
Agreement and all transactions under it shall be governed by the laws of the
State of New Jersey excluding its choice of laws rules and excluding the
Convention for the International Sale of Goods. The parties agree that the
provisions of Article 2 "Sales" of the New Jersey Uniform Commercial Code apply
to this Agreement and all transactions under it, including agreements and
transactions relating to the furnishing of services, the lease, sale or rental
of Deliverables or material, and the license of Software. Supplier agrees to
submit to the jurisdiction of any court wherein an action is commenced against
Company based on a claim for which Supplier has agreed to indemnify Company
under this Agreement.
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10.5 COMPLIANCE WITH LAW. Supplier shall comply, at its own expense, with the
provisions of all applicable state and municipal requirements and with all state
and federal laws and regulations applicable to the Deliverables and to Supplier,
as an employer of labor or otherwise.
10.6 EXPORT CONTROL. Each party hereto ("Receiving Party") assures the other
party hereto ("Furnishing Party") that it does not intend to and will not
knowingly, without the prior written consent, if required, of the Office of
Export Licensing of the United States Department of Commerce, ▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, transmit directly or indirectly:
(A) Any technical data (including software) originated in or communicated
into the United States of America and furnished to Receiving Party by the
Furnishing Party;
(B) Any immediate product (including processes, materials, and service)
produced directly by the use of such technical data furnished by the Furnishing
Party; or
(C) Any commodity produced by such immediate product if the immediate
product of such technical data furnished by the Furnishing Party is a plant
capable of producing a commodity or is a major component of such plant;
to: (i) Iraq, the People's Republic of China or to any Group Q, S,
W, Y or Z country specified in Supplement No. 1 to Part 770 of the
Export Administration Regulations issued by the U.S. Department of
Commerce; or (ii) any citizen or resident of any of the
aforementioned countries.
10.7 FORCE MAJEURE. Neither party shall be held responsible for any delay or
failure in performance of any part of this Agreement any Order, Supplemental
Agreement or TCL to the extent such delay or failure is caused by fire, flood,
explosion, war, strike, embargo, government requirement, civil or military
authority, act of God, or act or omission of carriers or other similar causes
beyond its control and without the fault or negligence of the delayed or
nonperforming party or its subcontractors ("force majeure conditions").
Notwithstanding the foregoing, Supplier's liability for loss or damage to
Company's Product, Software, or third party equipment under Clause 2.13 THIRD
PARTY EQUIPMENT in Supplier's possession or control shall not be modified by
this clause. If any force majeure condition occurs, the party delayed or unable
to perform shall give immediate notice to the other party, stating the nature of
the force majeure condition and any action being taken to avoid or minimize its
effect, and the party affected by the other's delay or inability to perform may
elect to: (a) suspend this Agreement or the affected Order, Supplemental
Agreement or TCL for the duration of the force majeure condition and (i) at its
option, buy, sell, obtain or furnish elsewhere Work to be bought, sold, obtained
or furnished under this Agreement any Order, Supplemental Agreement or TCL and
(ii) once the force majeure condition ceases, resume performance under this
Agreement, any Order, Supplemental Agreement or TCL with an option in the
affected party to extend the period of this Agreement or the affected Order,
Supplemental Agreement or TCL up to the length of time the force majeure
condition endured; and/or (b) when the delay or non-performance continues for a
period of at least thirty (30) days, terminate, at no charge, this Agreement any
Order, Supplemental Agreement or TCL or the part of it relating to Product or
Software not already shipped or Services not already performed. Unless written
notice is given
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Page 54 of 1
within forty-five (45) days after the affected party is notified of the force
majeure condition, (a) shall be deemed selected.
10.8 GOVERNMENT CONTRACT PROVISIONS. Any Order, Supplemental Agreement or TCL
placed under this Agreement containing a notation that the material is intended
for use under Government contracts shall be subject to the then current
Government Provisions printed on the Order, Supplemental Agreement or TCL or in
attachments thereto.
10.9 GOVERNMENT REQUIREMENTS. Supplier agrees not to discriminate against any
employee or applicant for employment because of race, color, religion, sex, age,
national origin or handicap, and shall during the performance of this Agreement
comply with all applicable Executive Orders and Federal Regulations.
10.10 HARMONY. Supplier shall be responsible for the harmonious relations of
its employees and agents with other contractors or consultants working for
Company.
10.11 HAZARDOUS MATERIALS. Supplier hereby warrants that, except as may be
otherwise expressly provided herein, all Product, Software and materials
furnished by Supplier are safe for their normal use, are non toxic, present no
abnormal hazards to persons or the environment, and may be disposed of as normal
refuse without special precautions.
Supplier agrees to reimburse Company for any expense that AT&T may incur by
reason of recall or prohibition against continued use or disposal of Product,
Software or materials furnished by Supplier, whether such recall or prohibition
against use or disposal is directed by Supplier or under compulsion of law.
10.12 IDENTIFICATION CREDENTIALS. Company may, at its discretion, require
Supplier's employees to exhibit identification credentials, which Company may
issue, in order to gain access to Company's premises for the performance of work
under this Agreement. If, for any reason, any of Supplier's employees are no
longer performing work in connection with this Agreement, Supplier shall
immediately inform Company's Order Management Representative in the speediest
manner possible. Notification shall be followed by the prompt delivery to
Company's Order Management Representative of the identification credentials
involved or a written statement of the reasons why the identification
credentials cannot be returned. Supplier shall be liable for any damage or loss
sustained by Company if such identification credentials are not returned to
Company.
10.13 IMPLEADER. Supplier shall not implead or bring an action against Company
or Company's customers or the employees of either based on any claim by any
person for personal injury or death to an employee of Company or Company's
customers occurring in the course or scope of employment and that arises out of
material or services furnished under this Agreement.
10.14 ISO 9000. Supplier shall have the portion of Supplier's quality system
that applies to work covered under this Agreement registered to the ISO 9001:
1994 standards guideline. Supplier shall use its best efforts to maintain ISO
certification, during the term of this Agreement, and shall provide evidence of
such certification to Company upon Company's
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request.. Such registration must be made by a third party registrar(s)
accredited in the United States. Supplier shall, prior to or upon execution of
this Agreement, provide Company's Agreement Representative a copy of the
appropriate certificate(s) of registration issued by such third party accredited
registrar(s). Supplier shall also maintain such certificate(s) of registration
through appropriate assessments by such third party accredited registrar(s) and
provide to Company's Agreement Representative any applicable updated
certificate(s) or notifications of failure to pass a surveillance or full
registration audit. If Supplier fails, for any reason, to obtain or maintain or
provide to Company such certificate(s) of registration as set forth above, AT&T
shall have the right, and without any cost to or liability or obligation of
AT&T, to terminate this Agreement and any or all outstanding Orders or TCLs
placed under this Agreement.
10.15 LABOR RELATIONS. Supplier shall be responsible for its own labor
relations with any trade or union represented among its employees and shall
negotiate and be responsible for adjusting all disputes between itself and its
employees or any union representing such employees. Supplier shall immediately
notify Company if Supplier has knowledge of any actual or potential labor
dispute which is delaying or could delay the timely performance under this
Agreement or any Order, Supplemental Agreement or TCL. If any dispute, work
stoppage or strike should occur, Supplier agrees to make all reasonable efforts
and take all reasonable action necessary to immediately settle the matter.
10.16 NON-EXCLUSIVE RIGHTS. This Agreement does not grant Supplier an
exclusive privilege to provide all the Deliverables and services which Company
may require, and Company may contract with other suppliers for the procurement
of the same or comparable Deliverables.
10.17 NO LIENS. All material shall be provided free from all claims, liens and
charges whatsoever. Company reserves the right to require, before making
payment, proof that all parties furnishing labor and material have been paid.
10.18 OTHER CONTRACTS; COOPERATION. Company reserves the right to solicit bids
from, and to award contracts to, other suppliers for additional work in
connection with work performed by Supplier under this Agreement. Supplier shall
cooperate with all other suppliers, including, but not limited to, the
reasonable opportunity for storage of material on the work site. Supplier shall
schedule and proceed with his work so as to work around points of delay in its
work or work of others.
10.19 PUBLICITY; ADVERTISING. Supplier agrees not to advertise, promote or
publicize matters relating to the Deliverables furnished by Supplier under this
Agreement or any Order, Supplemental Agreement or TCL or to mention or imply any
relationship or connection with AT&T or Company in such advertising, promotions
or publicity without the prior written consent of AT&T or Company, as the case
may be.
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 56 of 1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
Supplier shall make no use of any identification of AT&T or Company in any
advertising or promotional efforts. The term "identification" includes any
tradename, trademark, service ▇▇▇▇, insignia, symbol, or any simulation thereof,
and any code, drawing, specification, or evidence of Company's inspection.
Supplier agrees to remove any such identification prior to any sale, use or
disposition of material or Product or Software rejected or not purchased by
Company, and shall indemnify Company, AT&T and their associated companies
against any claim arising out of Supplier's failure to do so.
10.20 QUALITY SYSTEM AUDIT. If requested, Supplier agrees to permit Company or
its agent to conduct an initial and any subsequently required on-site quality
system audit(s) (QSA) of Supplier's quality system at Company's expense. Such
an audit shall assess the effectiveness and documentation of the various
elements that comprise a functioning quality system which shall include, but not
be limited to the following elements:
GENERAL:
1. ******************************
2. ******************************
3 ******************************
4. ******************************
5. ******************************
6. ******************************
7. ******************************
8. ******************************
9. ******************************
10. ******************************
11. ******************************
12. ******************************
13. ******************************
14. ******************************
15. ******************************
16. ******************************
17. ******************************
SOFTWARE:
18. ******************************
19. ******************************
20. ******************************
21. ******************************
22. ******************************
23. ******************************
24. ******************************
25. ******************************
26. ******************************
27. ******************************
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 57 of 1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISION. ASTERISKS DENOTE SUCH OMISSIONS.
28. ******************************
29. ******************************
30. ******************************
Supplier further agrees that any material deficiencies that could affect the
quality or reliability of Product or Software in Deliverables, discovered in
Supplier's quality system as a result of the audit(s), shall be remedied by
Supplier at Supplier's expense. Company shall use its best efforts to suggest
reasonable corrective actions. The necessary remedies shall have been completed
to the satisfaction of Company prior to the initiation of production of Product
or Software required by this Agreement unless otherwise agreed to in writing by
Company.
10.21 INDEPENDENT CONTRACTOR. Neither Supplier nor its employees or agents
shall be deemed to be AT&T's employees or agents. It is understood that
Supplier is an independent contractor for all purposes and at all times.
10.22 RELEASES VOID. Neither party shall require waivers or releases of any
personal rights from representatives of the other in connection with visits to
Supplier's and Company's respective premises and no such releases or waivers
shall be pleaded by Supplier or Company or third persons under their control in
any action or proceeding.
10.23 RIGHT TO ENTRY. Each party shall have the right to enter the premises of
the other party during normal business hours with respect to the performance of
this Agreement subject to all applicable plant rules and regulations, company
security regulations and procedures and governmental security laws and
regulations, if applicable.
10.24 SAFETY OF WORK. Supplier shall be responsible for the safety of the
Deliverables. In discharging that responsibility, it shall comply with the
requirements of the Occupational Safety and Health Act of 1970, as amended, and
any other federal, state or local act or other requirement of law affecting
safety and health.
10.25 SEVERABILITY. In the event that any one or more of the provisions
contained herein shall for any reason be held to be unenforceable in any respect
under the law of any state or of the United States of America, such
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall then be construed as if such unenforceable provision or
provisions had never been contained herein.
10.26 SUPPLIER'S EMPLOYEES. For the purpose of this Agreement, the term
Supplier Employee means anyone performing any Work or service under this
Agreement by or on behalf of Supplier or rendering Services under this Agreement
or furnished by Supplier under this Agreement, including (but not limited to)
partners, employees, consultants, representatives, agents and subcontractors of
Supplier and of any affiliate of Supplier or Supplier's parent company.
Supplier shall obtain an appropriate agreement with its employees, or others
whose services Supplier may require, sufficient to enable it to comply with all
provisions of this Agreement.
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 58 of 1
It is agreed that all persons provided by Supplier to perform Services or other
work are for all purposes employees of Supplier and not employees or agents of
Company, and while Company personnel may function as team leaders or managers
Company shall not exercise any direct control of supervision over Supplier
Employees. Company's project manager(s) will be available for consultation.
Supplier shall be responsible for its own labor relations with any trade or
union which represents its employees and shall be responsible for negotiating
and adjusting all disputes. Supplier shall be the sole entity responsible for
receiving complaints from Supplier Employees regarding their assignments and for
notifying Supplier Employees of the termination or change of their assignments.
Supplier further agrees that any of Supplier Employees, who is or becomes a
"leased employee" (as defined in Section 414 (n) of the Internal Revenue Code)
of Company during the term of this Agreement, shall not be covered by, and shall
be excluded from participation in, any employee benefit plan maintained by AT&T
or its affiliated companies.
Supplier shall indemnify and save AT&T and Company harmless from and against any
losses, damages, claims, demands, suits and liabilities that arise out of, or
result from, any failure by Supplier to perform its obligations under this
clause. Supplier shall also indemnify and save AT&T and Company harmless from
any entitlement, assertion or claim, which any of Supplier's Employees might
have or might make relative to rights or privileges in any AT&T or Company
employee benefit plan and which arises, in whole or in part, out of Services
rendered under this Agreement or work performed in connection with this
Agreement.
10.27 SUPPLIER INTERFERENCE. Supplier shall perform all operations in a manner
so as not to cause interference with other suppliers. If it becomes necessary
during Supplier's course of operations to cause such interference, Supplier
shall immediately notify Company's Order Management Representative in writing of
the anticipated interference and shall not proceed further with that phase of
the work without the prior written approval of Company's Order Management
Representative.
10.28 SUPPLIER'S SUBCONTRACTS. Supplier may not subcontract with others to
provide services or for the fulfillment of its obligations under this Agreement
or any Order, Supplemental Agreement or TCL without AT&T's prior written
consent. Supplier shall indemnify AT&T and Company against all loss, cost,
expense, or liability incurred by AT&T or Company on account of any
subcontractors. Any written consent to subcontract does not relieve Supplier of
Supplier's responsibilities for performing this Agreement or any Order,
Supplemental Agreement or TCL, and Supplier shall remain liable for compliance
by the subcontractor with all appropriate provisions of this Agreement or any
Order, Supplemental Agreement or TCL, such as, but not limited to clauses
PUBLICITY/ADVERTISING, WARRANTY, CONFIDENTIAL INFORMATION, and INFRINGEMENT. In
any event, all work or Services performed by subcontractors shall be deemed work
or Services performed by Supplier.
10.29 UTILIZATION OF MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES. It is
Company's policy that Minority and Women-Owned Business Enterprise (MWBEs) as
defined in ▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 59 of 1
"Definition of MWBEs", attached hereto and made a part hereof, shall have the
maximum practicable opportunity to participate in the performance of contracts.
Supplier agrees to use its good faith efforts to award subcontracts to carry out
this policy in the award of subcontracts to the fullest extent consistent with
the efficient performance of this Agreement. Supplier agrees to conduct a
program which will enable MWBEs to be considered fairly as subcontractors and
suppliers under this Agreement. Supplier shall submit to Company periodic
reports of subcontracting with known MWBEs in the form of Exhibit G, "AT&T MWBE
Second Tier Contracts Reporting Form", attached hereto and made a part hereof,
in such a manner and at such a time (not more than quarterly) as Company's
representative may prescribe. Such periodic reports shall state separately for
Minority and Women-Owned Businesses the subcontracted work which is attributable
to Company. In instances where direct correlation cannot be determined, such
MWBE payments may be established by Supplier comparing Company's payments to
Supplier, in that period, to total payments to Supplier from all of its
customers, in that period, and them arriving at Company's apportionment of such
MWBE payments. Supplier further agrees to insert, in any subcontract under this
Agreement, provisions which conform substantially to this clause UTILIZATION OF
MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES. Nothing in this clause shall
affect or diminish the Supplier's obligation as set forth in the assignment and
subcontracting provisions or any other provision of this Agreement. If Supplier
complies with the provisions of this clause, that will be a factor Company will
consider favorable in making procurement decisions about future business with
Supplier.
10.30 WAIVER. The failure of either party at any time to enforce any right or
remedy available to it under this Agreement or otherwise with respect to any
breach or failure by the other party shall not be construed to be a waiver of
such right or remedy with respect to any other breach or failure by the other
party.
10.31 WORK HEREUNDER. It is understood that visits by Supplier's
representatives or Supplier's suppliers' representatives for inspection,
adjustment or other similar purposes in connection with Deliverables purchased
hereunder shall for all purposes be deemed " work hereunder" and shall be at no
charge to Company unless otherwise agreed in writing by Company.
10.32 WRITTEN NOTICE. Unless otherwise provided herein, whenever notice or
consent is required to be given by the terms of this Agreement, it shall be in
writing and shall be given to and by the Agreement Representatives designated
under this Agreement. Notice shall be deemed to be given when delivered to the
party requiring notice, or three (3) days after being sent by registered mail,
return receipt requested, postage pre-paid.
10.33 COMPANY'S SERVICE CONTINUITY. The continuity of Company's service is of
paramount importance and Supplier shall at all times exercise the greatest care
to prevent damage to Company's equipment and shall not use any material or
methods which, in the reasonable judgment of Company, might endanger or
interfere with its service.
10.34 MEDIATION. If a dispute arises out of or relates to this Agreement, or
its breach, and the parties have not been successful in resolving such dispute
though negotiation, the parties agree to attempt to resolve the dispute through
mediation by submitting the dispute, to mediation by the American Arbitration
Association ("AAA"). Each party shall bear its own expenses and an
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 60 of 1
equal share of the expenses of the mediator and the fees of the AAA. The
parties, their representatives, other participants and the mediator shall hold
the existence, content and result of the mediation in confidence. If such
dispute is not resolved by such mediation, the parties shall have the right to
resort to any remedies permitted by law. All defenses based on passage of time
shall be tolled pending the termination of the mediation. Nothing in this
clause shall be construed to preclude any party from seeking injunctive relief
in order to protect its rights pending mediation. A request by a party to a
court for such injunctive relief shall not be deemed a waiver of the obligation
to mediate.
10.35 ELECTRONIC DATA INTERCHANGE (EDI). Supplier and Company agree that they
will, where feasible, utilize electronic means of issuing purchase orders,
acknowledgments, purchase order changes, ship notices, or such other purchasing
communications as may be agreed upon by Supplier and Company for transactions
under this Agreement ("Electronic Data Interchange" or "EDI"). Such EDI shall
be effective on mutually agreed upon date. In order to implement and operate
such EDI, Supplier shall, not later than mutually agreed upon date, at its sole
expense obtain, make fully operational and maintain all equipment, software and
other materials set forth in Company's EDI Planning Guide (a copy of which
Company will provide Supplier). Supplier shall also execute an Electronic
Purchasing Agreement with Company at the time of execution of this Agreement.
10.36 ENTIRE AGREEMENT. This Agreement shall incorporate the typed or written
provisions on Company's Orders issued pursuant to this Agreement and shall
constitute the entire Agreement between the parties with respect to the subject
matter of this Agreement and the Order(s), Supplemental Agreement(s) or TCL(s)
and shall not be modified or rescinded, except by a writing signed by Supplier
and AT&T. All references in these terms and conditions to this Agreement or to
Work, Services, material, Deliverables, Products, Software or information
furnished under, in performance of, pursuant to, or in contemplation of, this
Agreement shall also apply to any Orders, Supplemental Agreement or TCL, issued
pursuant to this Agreement. Printed provisions on the reverse side of Company's
Orders and all provisions on Supplier's forms shall be deemed deleted.
Additional or different terms inserted in this Agreement by Supplier, or
deletions thereto, whether by alterations, addenda, or otherwise, shall be of no
force and effect, unless expressly consented to by AT&T in writing. Estimates
or forecasts furnished by Company shall not constitute commitments. The
provisions of this Agreement supersede all contemporaneous oral agreements and
all prior oral and written quotations, communications, agreements and
understandings of the parties with respect to the subject matter of this
Agreement.
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 61 of 1
IN WITNESS WHEREOF, the Supplier and Company have executed this Contract in
duplicate as of the dates set forth below.
BRITE VOICE SYSTEMS, INC. BRITE VOICE SYSTEMS GROUP, LTD.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ -------------------------------
Signature Signature
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ -------------------------------
Name - typed or printed Name - typed or printed
C.E.O. Director
------------------------------ -------------------------------
Title - typed or printed Title - typed or printed
12/17/97 12/17/97
------------------------------ -------------------------------
Date Date
AT&T CORP.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Signature
▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name - typed or printed
V.P. and Gen. Manager
------------------------------
Title - typed or printed
12/12/97
------------------------------
Date
EXHIBIT A ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 1 of 8
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
-----------------------------------------------------------------------------------------------------------------------------------
INITIAL COMMITMENT FOR THE ******* SERVICE
(Itemized Ordering Attachment For FRF 6672 & FRF 6776)
-----------------------------------------------------------------------------------------------------------------------------------
RTU &
DESCRIPTION Quantity Capital Development Warranty TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
Brite ESP Platform Live Nodes **** **** ****
-----------------------------------------------------------------------------------------------------------------------------------
-- Active Nodes ****
-----------------------------------------------------------------------------------------------------------------------------------
-- Disaster Recovery Nodes ****
-----------------------------------------------------------------------------------------------------------------------------------
******* Feature Development
-----------------------------------------------------------------------------------------------------------------------------------
-- Basic Features & OAM&P **** **** ****
-----------------------------------------------------------------------------------------------------------------------------------
-- SS7/TCAP for ******* **** **** **** ****
-----------------------------------------------------------------------------------------------------------------------------------
RTU Licences (for **** live nodes) **** **** ****
-----------------------------------------------------------------------------------------------------------------------------------
**** Warranty for 1 Year (for **** live nodes) **** **** ****
-----------------------------------------------------------------------------------------------------------------------------------
Brite ESP Platform Spares Kits (for **** live nodes) **** **** ****
-----------------------------------------------------------------------------------------------------------------------------------
Brite ESP Platform ITN Test Node (including warranty) **** **** ****
-----------------------------------------------------------------------------------------------------------------------------------
Brite ESP Platform Development Lab Node (including warranty) **** **** ****
-----------------------------------------------------------------------------------------------------------------------------------
EF&I **** **** ****
-----------------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL FOR ******* **** **** **** $25,028,278
-----------------------------------------------------------------------------------------------------------------------------------
Company and Supplier agree to negotiate in good faith a Supplemental Agreement
to be agreed upon by February 16, 1998 for the ******* Service. At that time,
Exhibits A, B and C will be removed from this Agreement and will be made part
of the Supplemental Agreement for the ******* Service.
As per Clause 6.13, SPARES, of this Agreement, when Company receives failure
rate predictions of Components of the Product, Company reserves the right to
modify this initial commitment as it relates to the total number of spares
kits purchased.
EXHIBIT A, PAGES 2 THROUGH 8, CONTAINS CONFIDENTIAL MATERIAL WHICH HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
EXHIBIT B ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 1 of 2
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
1.0 ******* SERVICE DESCRIPTION
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
***********************.
2.0 PRODUCT CONFIGURATION
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
****.
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
************************************.
____________________
********
********
********
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
EXHIBIT B ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 2 of 2
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
BRITE ESP PLATFORM NODE CABINET CONFIGURATION
TO SUPPORT THE ******* SERVICE
**************
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
EXHIBIT ▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 1 of 1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Exclusivity Designation For The ******* Service (FRF 6672 & FRF 6776)
-----------------------------------------------------------------------------------------------------------------------------------
FEATURE NAME Q4 DATE FRF# COMPANY SPECIFICATION DOCUMENT DEVELOPMENT EXCLUSIVITY / UNLIMITED
+ RTU EXCLUSIVITY REPLICATION
LICENSE FEE PERIOD RIGHTS
-----------------------------------------------------------------------------------------------------------------------------------
******* - Release 1.0 TBD [+] 6672 ******* - Release 1.0: ************************** *********** No / N/A No
-----------------------------------------------------------------------------------------------------------------------------------
******* - Release 1.0 TBD [+] 6776 ******* - Release 1.0: ****************** No / N/A No
-----------------------------------------------------------------------------------------------------------------------------------
[+] APPLICATION SOFTWARE DELIVERY DATE: Supplier's Q4 date, which will be no
later than ********, will be mutually negotiated and agreed to prior to the
completion of the Supplemental Agreement for the ******* Service.
[++] This total includes the cost for FRF 6672 and FRF 6776.
Company and Supplier agree that all Features in the initial commitment for
******* Service-Release 1.0 are included in FRF 6672 & FRF 6776 and no such
features are considered to be exclusive, developed information or an original
work of authorship and no such Features shall be considered to be inventions
owned by the Company. Company and Supplier further agree that Company shall
solely own all intellectual property rights, including, without limitation,
patent rights and trade secret rights that are associated with the following
concept: The combination of the following elements, an account number that can
be used as a dialable number to receive telecommunication services from a
particular carrier and operating as a billing mechanism to which such
communication services and communication services from other carriers can be
charged.
Once the above referenced documents are baselined, they may be updated from time
to time in accordance with the provisions of Clause 2.11, Changes in Scope, of
this Agreement.
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
Contract No.GA0023D
Page 1 of 1
EXHIBIT D
RIGHT TO USE (RTU) LICENSE DISCOUNT SCHEDULE
(Purchases of complete Brite ESP Platform Systems
beyond the initial purchase in Exhibit A)
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
---------------------------------------------------------------
RTU EXPENSE DISCOUNT SCHEDULE ORIGINAL REVISED
---------------------------------------------------------------
Application license ********** ****** ******
---------------------------------------------------------------
Application license ********** ****** ******
---------------------------------------------------------------
Application license ********** ******
---------------------------------------------------------------
Application license ********** ******
---------------------------------------------------------------
Application license ********** ******
---------------------------------------------------------------
Application license ********** ******
---------------------------------------------------------------
The above table details the discount schedule as applied to the purchase price
of RTU Licenses that are part of future purchases and managed services where
applicable (beyond initial purchase as described in Exhibit A) of complete Brite
ESP Platform Systems (Brite ESP Platform Systems similar in configuration and
function as described in Exhibit B). For calculation purposes, all purchased
application RTU's are cumulative.
The Company may, at its option, choose one of the following:
1. Apply the applicable "Revised" discount percentage available to the then
current purchase price for RTU's (included in the purchase of a complete
Brite ESP Platform System); or
2. Apply the applicable "Original" discount percentage available to the then
current purchase price for RTU's (included in the purchase of a complete
Brite ESP Platform System ). Apply the resulting dollar amount difference
between the applicable "Revised" discount percentage available and the
applicable "Original" discount percentage available in the form of a credit
to the purchase price of development services.
Dollar discounts in the form of a credit are available to Company for a period
of 12 months following receipt of a valid Order, Supplemental Agreement or TCL
for the Brite ESP Platform System from which the dollar discount credit is
calculated. Dollar discount credits may be applied to development services upon
receipt of a valid Order, Supplemental Agreement or TCL for that development
service.
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
EXHIBIT ▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 1 of 1
EXHIBIT E CONTAINS CONFIDENTIAL MATERIAL WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 1 of 6
ENGINEERING AND INSTALLATION SUPPORT
EXHIBIT F
"GENERAL CONDITIONS"
EXHIBIT F, PAGES 1 THROUGH 6, CONTAINS MATERIAL WHICH HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISION
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 1 of 3
MINORITY AND WOMEN'S BUSINESS ENTERPRISE (MWBE)
EXHIBIT G
AT&T SUPPLIER DIVERSITY PROGRAM
▇▇ ▇▇ ▇▇▇▇▇
GUILFORD CENTER 1
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
System will only accept legible forms. Incomplete or illegible forms will not
be processed.
Legal Name of Business
---------------------------------------------------------
Main Address
--------------------------------------------------------------------
State Zip
------------------------------------- -------- -----------
Contact Person Title
---------------------------------- ------------------------
Owner's Name Title
------------------------------------ ------------------------
Phone ( ) Fax ( ) Gross Sales
------------------ ------------------------- -------------
Is the Owner an American Citizen? Is the Owner a California Legal Immigrant?
--- --
Number of Employees Federal Tax ID or Sole Proprietorship #
--------- ----------
Type of Business: Manufacturer Distributor Contractor
--- --- ---
Service Provider Retail Dealer Other (please explain):
--- --- --- ---------------
Business Classification: Large Small Non Profit Year Business Started:
--- --- --- ----
Service Area: Local, Regional or National (please specify):
--------------------
Our Company is presently verified by (CHECK THOSE WHICH APPLY AND PLEASE PROVIDE
A COPY OF YOUR VERIFICATION):
8a NMSDC/Regional Purchasing Council California Clearinghouse
---- ---- ----
Women Business Owners Corporation (WBOC)
----
Are you currently doing business with AT&T? Yes No If yes: %
--- --- ---
Give a brief (50 words or less) description of what your company does as you
wish it to appear in the database.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DEFINITIONS:
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 2 of 3
A Minority or Women's Business Enterprise is defined as a business which is
owned, controlled and operated by minority or women group members. Minority or
women's ownership exists in a business which is at least 51% owned by minority
or women group members, or in the case of a publicly held company, a firm in
which at least 51% of the stock is owned by minority or women group members.
Operate is defined as being actively involved in the day-to-day management.
Control is defined as exercising the power to make policy decisions.
MWBE companies must be located within the United States, its territories or
possessions. Owners must be American citizens (in California only, legal
immigrants with permanent resident status in the United States are also
eligible).
Non-Minority American means all non-minority women not covered by the definition
of American minority groups below.
For the purpose of identification, minority group members are defined as:
Native American means American Indians, Eskimos, Aleuts, and native Hawaiians.
Asian Pacific American means all persons having origins in Japan, China,
Vietnam, Korea, Samoa, Guam, the US Trust Territory of the Pacific Islands
(Republic of Palau), the Northern Mariana Islands, Laos, Kampuchea (Cambodia),
Taiwan, Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Republic of the
▇▇▇▇▇▇▇▇ Islands, or the Federated States of Micronesia.
Asian Indian American means all persons having origins in India, Pakistan,
Bangladesh, Sri Lanka, Bhutan, or Nepal.
African American means all persons having origin in any of the Black racial
groups.
Hispanic American means all persons having origins in Mexico, Puerto Rico, Cuba,
Central, Latin or South America, or other Spanish culture or origins.
Filipino American means all persons having origins in the Philippine Islands.
A Disabled American Veteran Owned business concern is a company that is 100%
owned, controlled and operated by one or more American Veterans who were
disabled during their active military service and is verified by the State of
California's Office of Small and Minority Business (OSMB).
When filling out our Supplier Self-Certification form, please take care to
properly designate the ownership status of your company. A California statute
makes its a crime in the state of California for any person or corporation to
falsely represent their business as a minority or woman-owned business which is
punishable by a fine of not more than $5,000, or by imprisonment in the county
jail for not to exceed one year or in the state prison for not to exceed five
years of its directors, officers or agents responsible for the false statements
or both the fine and imprisonment.
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 3 of 3
This company is owned, controlled, and operated by (please indicate percentage
ownership below):
ETHNIC DESCRIPTION MALE FEMALE
-----------------------------------------
Non-Minority American % %
----- -----
Native American % %
----- -----
Asian Pacific American % %
----- -----
Asian Indian American % %
----- -----
African American % %
----- -----
Hispanic American % %
----- -----
Filipino American % %
----- -----
Service Disabled Veteran (California only) % %
----- -----
NY/NJ Hasidic Jew % %
----- -----
The signer agrees to notify AT&T immediately if there is a change in the
ownership status of the signer's company and recognizes AT&T's right to
decertify the signer's company if the signer's company no longer qualifies to be
considered an MWBE or California Service Disabled firm.
The signer represents The signer represents
that the enterprise IS a that the enterprise IS
Minority, Women-Owned or NOT a Minority, Women-
California Service Owned or California
Disabled Business and Service Disabled Business
recognizes that this form and recognizes that this
will be relied upon form will be relied upon
fulfilling legal in fulfilling legal
requirements. requirements.
Signature of Authorized Signature of Authorized
Representative Representative
------------------------------- ---------------------------
Print Title
Name
------------------------ ----------------------------
Date
------------------------
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 1 of 2
SEVERITY LEVEL
EXHIBIT H
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
RESPONSE TIME ON TROUBLE SEVERITY RANKINGS
- Level 1/Emergency: Emergency conditions require immediate and continuous
action regardless of time of day until the emergency situation is
alleviated. Supplier will use the full resources available to it to
investigate the condition. Development of an action plan shall immediately
and Supplier shall use its best efforts to provide a fix or work around in
*************************.
Examples - Not intended to be the only situation of an emergency priority
- Total site outage (customer affecting)
- Customer unable to complete any call
- Duplex equipment failure
- Continuous final handling codes (call failures)
- Any Condition putting call processing in jeopardy
- Level 2/High: High priority conditions shall be investigated immediately
by Supplier. An action plan shall be provided in
************************** and a fix or work around shall be provided in
************************.
Examples - Not intended to be the only situation of high priority
- Partial site outage
- Intermittent customer call failure
- Equipment failure
- Excessive systems faults ( database errors, billing,
customer records)
- Excessive final handling code (call failures)
- Any software update generated problems
- Level 3/Medium: Medium priority conditions require resolution within
**************** *****.
Examples - Not intended to be the only situation of a medium priority
- Intermittent systems faults (asserts, audits)
- Intermittent final handling codes (call failures)
- Invalid traffic reports
- Diagnostic failures on equipment that can be restored
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
Page 2 of 2
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
- Documentation errors that can generate customer implacting
problems
- Level4/Low: Low priority conditions require resolution within
************************** ************.
Examples - Not intended to be the only situation of a low priority
- Documentation problems ( non-customer affecting)
- Problems that can be deferred based upon customer/user Input
- Reports, input message and output message format problems.
AT&T Proprietary (Restricted)
Solely for Those Persons Having a Need to Know
Use Pursuant to Company Instructions
EXHIBIT I
WARRANT PURCHASE AGREEMENT
DATED AS OF DECEMBER 12, 1997
BY AND BETWEEN
AT&T CORP.
AND
BRITE VOICE SYSTEMS, INC.
This WARRANT PURCHASE AGREEMENT (the "Agreement"), is dated as of December 12,
1997, by and between AT&T Corp., a New York corporation (the "Holder"), and
Brite Voice Systems, Inc., a Kansas corporation (the "Company").
In consideration of the mutual promises and covenants set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS
"Affiliate" shall mean any Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or under common control with a
specified Person.
"Board" shall mean the Company's Board of Directors.
"Claims" means actions, causes of action, suits, claims, complaints, demands,
litigations or legal, administrative or arbitral proceedings or investigations.
"Closing" shall have the meaning set forth in Section 3.1.
"Closing Date" shall mean the date on which the Closing occurs.
"Common Stock" shall mean the Company's common stock, no par value.
"Exercise Date" shall mean each date on which AT&T exercises, in whole or in
part, the Warrant.
"Material Adverse Effect" means a material adverse effect in the business,
prospects, assets, results of operations or condition, financial or otherwise,
of the Company and its subsidiaries, taken as a whole.
"Person" shall mean an individual, a partnership, a limited liability company, a
joint venture, a corporation, an association, a trust or any other entity or
organization, including a government or any department or agency thereof.
"SEC" means the Securities Exchange Commission.
"SEC Document" shall have the meaning set forth in Section 4.7.
2. ISSUANCE OF WARRANT
In consideration for the Holder entering into the Purchase Agreement, dated
the date hereof, between the Holder and the Company (the "Purchase
Agreement"), the Company shall issue a warrant at the Closing to purchase
up to 1,400,000 shares of Common Stock at an exercise price of $11 per
share, subject to adjustment, in the form attached hereto as Exhibit A (
the "Warrant").
3. CLOSING OF ISSUE AND PURCHASE
3.1. CLOSING
2
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place on the date hereof at the Company, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, or at such other
date, time or place as the parties hereto shall mutually agree upon
in writing.
3.2. TRANSACTIONS AT CLOSING
Subject in each case to the terms and conditions contained in this
Agreement, the Company shall deliver or cause to be delivered to the
Holder the following documents prior to or concurrently with the
Closing, except as otherwise expressly stated herein:
3.2.1. resolutions of the Board in full force and effect pursuant
to which (i) the issuance of the Warrant to the Holder is
authorized and (ii) the execution, delivery and performance
of this Agreement is authorized; and
3.2.2. a validly executed Warrant issued in the name of the Holder.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Holder the following to
be true and correct as at the Closing Date and each Exercise Date and
acknowledges that the Holder is entering into this Agreement in reliance
thereon:
4.1. ORGANIZATION
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Kansas and has full
corporate power and authority to conduct its business as presently
conducted and as proposed to be conducted by it and to enter into and
perform this Agreement and to carry out the transactions contemplated
by this Agreement. The Company is duly qualified to do business as a
foreign corporation in every jurisdiction in which the failure to so
qualify would have a Material Adverse Effect.
4.2. SHARE CAPITAL
4.2.1. The SEC Documents set forth the Company's authorized capital
stock and the issued and outstanding shares as of the date
thereof. All of the issued and outstanding shares have been
duly authorized and validly issued and are fully paid and
non-assessable. The Company is not subject to any
obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock.
4.2.2. Except as set forth in the SEC Documents, there are no share
capital, preemptive rights, convertible securities,
outstanding warrants, options or other rights to subscribe
for, purchase or acquire from the Company any share capital
of the Company and there are no contracts or binding
commitments providing for the issuance of, or the granting
of rights to acquire, any share capital of the Company or
under which the Company is, or may become, obligated to
issue any of its securities.
4.2.3. Upon exercise of the Warrant, the shares of Common Stock,
when issued and paid for in accordance with this Agreement,
will be duly authorized, validly issued, fully paid, and
non-
3
assessable, will have the rights, preferences, privileges,
and restrictions set forth in the Company's Certificate of
Incorporation and will be free and clear of any liens,
claims, charges, attachments, encumbrances, adverse claims,
interests or any third party rights or claims of any kind
created by the Company and will be duly registered in the
Holder's name in the Company's share transfer register.
4.3. ISSUANCE OF THE WARRANT
The issuance of the Warrant in accordance with this Agreement has
been duly authorized by all necessary corporate action on the part of
the Company, and all shares of Common Stock issuable upon issuance of
the Warrant have been duly reserved for issuance.
4.4. AUTHORITY FOR AGREEMENT
The execution, delivery and performance by the Company of this
Agreement and the Warrant and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action. This Agreement and the
Warrant have been duly executed and delivered by the Company and
constitute valid and binding obligations of the Company enforceable
in accordance with their respective terms. The execution of this
Agreement and performance of the transactions contemplated by this
Agreement and the Warrant and compliance with the provisions hereof
and thereof by the Company will not violate any provision of law and
will not conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, or
require a consent or waiver under, the Company's Certificate of
Incorporation or By-Laws or any indenture, lease, agreement or other
instrument to which the Company is a party or by which it or any of
its properties is bound, or any decree, judgment, order, statute,
rule or regulation applicable to the Company.
4.5. GOVERNMENTAL CONSENTS
Except for filings of pre-merger notification and report forms under
the HSR Act, if any, no consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing
with, any governmental authority is required on the part of the
Company in connection with the execution and delivery of this
Agreement and the issuance and delivery of the Warrant and the shares
underlying the Warrant upon exercise thereof. Based in part on the
representations made by the Holder in Section 5 hereof, the issuance
and delivery of the Warrant and the shares underlying the Warrant
upon exercise thereof to the Holder is in compliance with applicable
Federal and state securities laws.
4.6. LITIGATION
Except as set forth in the SEC Documents, there are no Claims, which
individually or in the aggregate, could have a Material Adverse
Effect, pending or threatened against the Company, before any court,
arbitration board or tribunal or administrative or governmental
agency, nor is the Company aware of any fact which would result in
any such Claims. The Company is not a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any
court or governmental agency or instrumentality, which individually
or in the aggregate, could have a Material Adverse Effect.
4.7 SEC DOCUMENTS; UNDISCLOSED LIABILITIES
4
The Company has filed all required reports, schedules, forms,
statements and other documents with the SEC since January 1, 1994
(collectively, and in each case including all exhibits and schedules
thereto and documents incorporated by references therein, and as
amended, the "SEC Documents"). As of their respective dates, the SEC
Documents complied in all material respects with the requirements of
the Securities Act, or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to
such SEC Documents, and none of the SEC Documents (including any and
all financial statements included therein) as of such dates contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. The consolidated financial
statements of the Company included in all SEC Documents comply as to
form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited consolidated
quarterly statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved, except as may be
indicated in the notes thereto) and fairly present the consolidated
financial position of the Company and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the
case of unaudited quarterly statements, to normal year-end audit
adjustments). Except as set forth in the SEC Documents, at the date
of the most recent audited financial statements of the Company
included in the SEC Documents, neither the Company nor any of its
subsidiaries had, and since such date neither the Company nor any of
such subsidiaries has incurred, any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) which,
individually or in the aggregate, would be required to be disclosed
in a balance sheet prepared in accordance with generally accepted
accounting principles and would reasonably be expected to have a
Material Adverse Effect.
4.8. ABSENCE OF CERTAIN CHANGES OR EVENTS
Except as disclosed in the SEC Documents, since the date of the most
recent audited financial statements included in such SEC Documents,
the Company has conducted its business only in the ordinary course
consistent with past practice, and there is not and has not been:
(a) any change in the Company or any condition, event or occurrence
which, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect; or (b) any condition, event or
occurrence which would reasonably be expected to prevent, hinder or
materially delay the ability of the Company to consummate the
transactions contemplated by this Agreement.
4.9. FULL DISCLOSURE
The representations and warranties of the Company contained in this
Agreement do not contain any untrue statement of material fact with
respect to the subject matter hereof or omit to state any material
fact necessary to make the statements contained herein, in light of
the circumstances under which they were made, not misleading.
5
5. REPRESENTATIONS AND WARRANTIES OF THE HOLDER
The Holder hereby represents and warrants to the Company the following to
be true and correct as at the Closing Date and each Exercise Date and
acknowledges that the Company is entering into this Agreement in reliance
thereon:
5.1. ENFORCEABILITY
This Agreement when executed and delivered by the Holder, shall
constitute the valid and legally binding obligation of the Holder,
enforceable against it accordance with its terms.
5.2. AUTHORIZATION
All corporate actions on the part of the Holder necessary for the
authorization, execution, delivery, and performance of all its
obligations under this Agreement have been (or will have been) taken
prior to the Closing.
5.3. APPROVALS
Except for filings of pre-merger notification and report forms under
the HSR Act, if any, no consent, approval, order, license, permit,
action by, or authorization of or designation, or declaration, from
any Person or filing with any governmental authority on the part of
the Holder is required to be obtained in connection with the valid
execution, delivery and performance of this Agreement.
5.4. INVESTMENT
The Holder represents and warrants that it is purchasing the Warrant
and any shares issuable upon exercise of the Warrant for its own
account and not with a view toward resale. The Holder understands
that the Warrant and any shares issuable upon exercise of the Warrant
have not been registered under the securities laws of any
jurisdiction, and therefore, the Warrant and any shares issuable upon
exercise of the Warrant will not be publicly tradable unless they are
subsequently registered under applicable securities laws or an
exemption from such registration is available. The Holder
acknowledges that unless there is an effective registration statement
under the Securities Act and applicable state securities laws
covering the sale of the Warrant or any shares issuable upon exercise
of the Warrant, the Warrant and the shares issuable upon exercise of
the Warrant may not be sold unless the Company receives an opinion of
legal counsel reasonably satisfactory to the Company stating that
such transaction is exempt from registration. The Holder also
acknowledges that in making its investment decision it did not rely
on any information provided to it by the Company except as set forth
in this Agreement, any schedules, exhibits or documents contemplated
hereby and publicly available information.
5.5. ACCREDITED INVESTOR
The Holder is an "accredited investor" as defined in Rule 501 of the
regulations promulgated under the Securities Act of 1933, as amended.
6. REGISTRATION RIGHTS
6
6.1 PIGGY BACK REGISTRATION
If the Company at any time proposes to register any shares of Common
Stock under the Securities Act on a form and in a manner that would
permit registration of Warrant Shares for sale to the public under the
Securities Act, it will each such time give prompt written notice to
AT&T of its intention to do so, describing such securities and
specifying the form and manner and the other relevant facts involved
in such proposed registration (including, without limitation, whether
or not such registration will be in connection with an underwritten
offering of its Common Stock and, if so, the identity of the managing
underwriter and whether such offering will be pursuant to a "best
efforts" or "firm commitment" underwriting). Upon the written request
of AT&T delivered to the Company within 20 days after such notice
shall have been given (which request shall specify the number of
Registrable Shares, excluding any Warrant Shares not yet exercisable
under the Warrant, intended to be disposed of and the intended method
of disposition), the Company will use its best efforts to effect the
registration under the Securities Act, as expeditiously as is
reasonable, of all Registrable Shares that the Company has been so
requested to register, to the extent requisite to permit the
disposition (in accordance with the intended methods thereof) of the
Registrable Shares so to be registered under the procedures set forth
in this Section 6; PROVIDED, that if the registration so proposed by
the Company involved an underwritten offering of the securities so to
be registered, the Company shall use its best efforts to cause the
managing underwriter to permit the Registrable Shares requested to be
registered to be included on the same terms and conditions as the
other shares in the offering; PROVIDED, HOWEVER, that if the managing
underwriter of such underwritten offering selected by the Company
shall advise the Company in writing that, in its judgment, the number
of securities proposed to be included in such offering by the Company
(the "Company Securities") and the number of shares of Registrable
Shares proposed to be included in such offering should be limited due
to marketing conditions, then the Company will promptly advise AT&T
and may require, by written notice to AT&T, that, to the extent
necessary to meet such limitation, Registrable Shares be excluded from
such offering until after the completion of the distribution of such
securities by such underwriters; and PROVIDED, FURTHER, that the
Company shall have the right to postpone or withdraw any registration
without obligation to AT&T. For purposes of this Agreement,
"Registrable Securities" means 2/3 of the Warrant Shares issuable upon
exercise of the Warrants, taking into account any adjustments, less
any Warrant Shares that have been sold to the public pursuant to a
registration statement or Rule 144 under the Securities Act or, in the
opinion of counsel to the Company reasonably satisfactory to the
Holder, any Warrant Shares that may be sold by such Holder under Rule
144(k) under the Securities Act. Notwithstanding the foregoing, if an
Acceleration Event occurs, "Registrable Shares" means all Warrant
Shares.
6.2 REGISTRATION PROCEDURES
If the Company is required by the provisions of this Agreement to use
its best efforts to effect the registration of the Registrable Shares
under the Securities Act, the Company, subject to the provisions
hereof, shall:
(a) file with the SEC a Registration Statement with respect to the
Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective until the earlier of (i) the
time all Registrable Shares have been sold pursuant thereto or
otherwise; (ii) the time all Registrable Shares could be sold by AT&T
within a three-month period without a registration statement under
Rule 144 or otherwise; or (iii) 45 days from the date that such
Registration Statement is declared effective by the SEC;
7
(b) as expeditiously as possible prepare and file with the SEC any
amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary
to keep the Registration Statement effective;
(c) as expeditiously as possible furnish to AT&T such reasonable
numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act,
and such other documents as AT&T may reasonably request in order to
facilitate the public sale or other disposition of the Registrable
Shares; and
(d) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement
under the securities or "Blue Sky" laws of such states as AT&T shall
reasonably request, and do any and all other acts and things that may
be necessary or desirable to enable AT&T to consummate the public sale
or other disposition in such states of the Registrable Shares.
If the Company has delivered preliminary or final prospectuses to AT&T
and after having done so the prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify
AT&T and, if requested, AT&T shall immediately cease making offers of
Registrable Shares and return all prospectuses to the Company. The
Company shall promptly provide AT&T with revised prospectuses and,
following receipt of the revised prospectuses, AT&T shall be free to
resume making offers of the Registrable Shares.
6.3 PROSPECTUS DELIVERY REQUIREMENTS
AT&T shall not make any sales of Registrable Shares without causing
the prospectus delivery requirements under the Securities Act to be
satisfied and AT&T shall promptly advise the Company of any changes in
the information concerning AT&T contained in any prospectus included
in any Registration Statement. AT&T acknowledges that occasionally
there may be times when the Company must suspend the use of the
prospectus forming a part of a Registration Statement until such time
as an amendment to such Registration Statement has been filed by the
Company and declared effective by the SEC, or until such time as the
Company has filed an appropriate report with the SEC pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Without limiting the generality of the foregoing, the Company shall be
entitled to suspend the use of the prospectus forming a part of such
Registration Statement in any period during which the Company is
engaged in any activity or transaction or preparations or negotiations
for any activity or transaction ("Company Activity") that the Company
desires to keep confidential for business reasons, if the Company
determines in good faith that the public disclosure requirements
imposed on the Company under the Securities Act in connection with the
Registration Statement would require disclosure of the Company
Activity. AT&T hereby covenants that it will not offer or sell any
Registrable Shares pursuant to any prospectus during the period
commencing at the time at which the Company gives it notice of the
suspension of the use of said prospectus and ending at the time the
Company gives it notice that AT&T may thereafter effect sales pursuant
to said prospectus.
6.4 ALLOCATION OF EXPENSES
The Company shall pay all Registration Expenses of any registration
under this Section 6. The term "Registration Expenses" shall mean all
expenses incurred in complying with the registration provisions of
this Section 6, including without limitation all registration and
filing fees, exchange
8
listing fees, printing expenses, fees and expenses of counsel and
state "Blue Sky" fees and expenses, but excluding underwriting
discounts, selling commissions and the payment of the exercise price
to purchase the Warrant Shares pursuant to the Warrant.
6.5 INDEMNIFICATION.
6.5.1 In the event of registration of the Registrable Shares under
the Securities Act pursuant to this Agreement, the Company
will indemnify and hold harmless AT&T, each underwriter of
such Registrable Shares, and each other Person, if any, who
controls AT&T or such underwriter within the meaning of the
Securities Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which
AT&T or such underwriter or controlling person may become
subject under the Securities Act, the Exchange Act, state
securities or "Blue Sky" laws or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in
the Registration Statement, or any amendment or supplement
to such Registration Statement, or arise out of or are based
upon the omission or alleged omission to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will
reimburse AT&T and such underwriter and each such
controlling person for any legal or any other expenses
reasonably incurred by AT&T and such underwriter or
controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company will not be liable in
any such case to the extent that any such loss, claim,
damage or liability arises out of is based upon any untrue
statement or omission made in such Registration Statement,
preliminary prospectus or final prospectus, or any such
amendment or supplement, in reliance upon and in conformity
with information furnished to the Company, in writing, by or
on behalf of AT&T or such underwriter or controlling person
specifically for use in the preparation thereof.
6.5.2 In the event of registration of the Registrable Shares under
the Securities Act pursuant to this Agreement, AT&T will
indemnify and hold harmless the Company, each of its
directors and officers and each underwriter (if any) and
each Person, if any, who controls the Company or any such
underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which the Company, such
directors and officers, underwriter or controlling person
may become subject under the Securities Act, Exchange Act,
state securities or "Blue Sky" laws or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in
the Registration Statement, or any amendment or supplement
to the Registration Statement, or arise out of or are based
upon any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, if the statement or
omission was made in reliance upon and in conformity with
information relating to AT&T and furnished in writing to the
Company by or on behalf of AT&T specifically for use in
connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; PROVIDED,
HOWEVER, that the obligations of AT&T hereunder shall be
limited to
9
an amount equal to the proceeds to AT&T of the Registrable
Shares sold in connection with such registration.
6.5.3 Each party entitled to indemnification under this Section
6.5 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting
therefrom; PROVIDED, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld); and
PROVIDED, FURTHER, that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this
Section 6.5. The Indemnified Party may participate in such
defense at such party's expense; PROVIDED, HOWEVER, that the
Indemnifying Party shall pay such expense if representation
of such Indemnifying Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or
potential differing interests between the Indemnified Party
and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of any
such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no
Indemnified Party shall consent to entry of any judgment or
settle such claim or litigation without the prior written
consent of the Indemnifying Party.
6.6 INFORMATION BY AT&T
AT&T shall furnish to the Company such information regarding AT&T and
the distribution proposed by AT&T as the Company may reasonably
request in connection with, and otherwise cooperate with the Company
in the filing of, any registration, qualification or compliance
referred to in this Agreement.
6.7 ADDITIONAL PROVISIONS
If the aggregate number of Registrable Shares and other shares of
Common Stock held by stockholders of the Company with registration
rights that are proposed to be included in an offering (collectively,
"Total Registrable Shares") is limited by the managing underwriter due
to marketing factors, then AT&T and the other holders of Total
Registrable Shares who have requested registration shall participate
in the registration pro rata based upon each holder's ownership of
shares of Common Stock and securities convertible into Common Stock
(treating any convertible securities on an as converted basis, whether
or not presently convertible) divided by all of the holders' ownership
of shares of Common Stock and securities convertible into Common Stock
(treating any convertible securities on an as converted basis, whether
or not presently convertible). If any holder (including AT&T) would
thus be entitled to include more securities than such holder requested
to be registered, the excess shall be allocated among other requesting
holders (including AT&T) pro rata in the manner described in the
preceding sentence.
6.8 RULE 144 INFORMATION
10
The Company will maintain "adequate current public information"
regarding the Company within the meaning of paragraph (c) of Rule 144.
7. ▇▇▇▇ ▇▇▇▇▇
To the extent required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended, and the federal regulations promulgated thereunder
(the "HSR Act"), the parties hereto will file as soon as reasonably
practicable with the United States Federal Trade Commission and the
Antitrust Division of the United States Department of Justice notification
and report forms with respect to the transactions contemplated hereby,
pursuant to the HSR Act. Such notification and report forms will comply as
to form, in all material respects, with all requirements applicable thereto
and all of the data and information reported in such forms shall be true,
correct and complete in all material respects. The parties hereto shall
request early termination of the waiting period under the HSR Act and the
rules promulgated thereunder and shall comply as promptly as practicable
with all requests, if any, for additional information and documentary
materials unless, in the reasonable opinion of outside counsel, such
information or documentation, as the case may be, is not required to be
produced under applicable law. Such additional information and
documentation will comply as to form, in all material respects, with all
requirements applicable thereto and will be true, correct and complete in
all material respects and the parties shall use their best efforts to
deliver such additional information as soon as reasonably practicable.
8. SURVIVAL; INDEMNITY
8.1 SURVIVAL
Notwithstanding any right of the parties to investigate fully the
affairs of the other parties and notwithstanding any knowledge of
facts determined or determinable by the parties pursuant to such
investigation, the parties have the right to rely fully upon the
representations, warranties, covenants and agreements of the other
parties contained in this Agreement and the documents delivered
pursuant to this Agreement. All such representations, warranties,
covenants and agreements shall survive execution and delivery of this
Agreement and the Closing and terminate, with respect to any Claim, on
the date upon which such Claim is barred by all applicable statutes of
limitations unless the Holder has commenced such Claim prior to that
date.
8.2 INDEMNIFICATION
Each party agrees to indemnify, defend and hold harmless the other
party (and its directors, officers, employees, Affiliates, successors
and assigns) from and against all Claims, losses, liabilities damages,
deficiencies, judgments, assessments, fines, settlements, costs and
expenses (including interest, penalties and fees, expenses and
disbursements of attorneys, experts, personnel and consultants
incurred by the indemnitee in any action or proceeding between the
indemnitee and the indemnitor or between the indemnitee and any third
party, or otherwise) based upon, arising out of or otherwise in
respect of any inaccuracy in or any breach of any representation,
warranty, covenant or agreement of such party contained in this
Agreement or in any document delivered pursuant to this Agreement.
8.3 INDEMNITY PROCEDURE
11
Promptly after receipt by a party hereto of notice of the commencement
of any action, proceeding, or investigation in respect of which
indemnity may be sought as provided above, such party (and its
directors, officers, employees, Affiliates, successors and assigns)
(the "Indemnitee") shall notify the party from whom indemnification is
claimed (the "Indemnitor"). The Indemnitor shall promptly assume the
defense of the Indemnitee with counsel reasonably satisfactory to such
Indemnitee, and the fees and expenses of such counsel shall be at the
sole cost and expense of the Indemnitor. The Indemnitee will
cooperate with the Indemnitor in the defense of any action,
proceeding, or investigation for which the Indemnitor assumes the
defense, provided, however, that if the defendants in any action
include both the Indemnitee and the Indemnitor and there is a conflict
of interests which would prevent counsel for the Indemnitor from also
representing the Indemnitee, the Indemnitee shall have the right to
select one separate counsel to participate in the defense of such
action on behalf of such Indemnitee. The Indemnitor shall not be
liable for the settlement by the Indemnitee of any action, proceeding,
or investigation effected without its consent, which consent shall not
be unreasonably withheld. The Indemnitor shall not enter into any
settlement in any action, suit, or proceeding to which the Indemnitee
is a party, unless such settlement includes a general and
unconditional release of the Indemnitee from all claims with no
payment by the Indemnitee of consideration nor incurrence of any
obligation.
8.4. REMEDIES
The provisions of this Section 8 shall not limit or impair any right
or remedy arising from any breach of this Agreement. In addition to
any other remedy provided by law or equity, injunctive relief may be
obtained to enjoin the breach, or threatened breach, of any provision
of this Agreement and each party shall be entitled to the specific
performance by the other of its obligations hereunder and thereunder.
All remedies, either under this Agreement, or by law or as may
otherwise be afforded to any of the parties hereto as the case may
be, shall be cumulative.
9. MISCELLANEOUS
9.1. FURTHER ACTIONS
Each of the parties hereto shall, upon the request of the other party
hereto and at the expense of such requesting party, duly execute,
acknowledge and deliver or cause to be duly executed, acknowledged
and delivered, all such further instruments and documents reasonably
requested by the other party to further effectuate the intent and
purposes of this Agreement
9.2. GOVERNING LAW
The validity, performance, construction and effect of this Agreement
shall be governed by the substantive laws of the State of New York,
without regard to the provisions for choice of law thereunder.
9.3. ARBITRATION
Any dispute arising between the parties in connection with this
Agreement shall be, settled in the first instance between the
parties. If amicable settlement cannot be reached, then any dispute
arising out of or relating to this Agreement, including with respect
to its arbitrability, will be finally and exclusively settled by
arbitration in accordance with the rules of the American Arbitration
Association (the "Rules"). The arbitration will be governed by the
United States Arbitration Act, 9
12
U.S.C. Sec. 1, et seq., and judgment upon the award rendered by the
arbitrators may be entered by any court with competent jurisdiction.
The arbitration will be held in New York City. The arbitration shall
be conducted by a sole arbitrator to be appointed in accordance with
the Rules. The parties agree to exclude any right of application or
appear to any courts in connection with any question of law or fact
arising in the course of the arbitration or with respect to any award
made, except for purposes of enforcing the award or enforcing the
obligation to arbitrate.
9.4. JURISDICTION
Subject to the arbitration proceedings set forth in Section 9.3, each
of the parties hereto irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New
York State Court or Federal Court sitting in New York, New York, and
any court having jurisdiction over appeals of matters heard in such
courts, in any action or proceeding arising out of, connected with,
related to or incidental to the relationship established between them
in connection with this Agreement, whether arising in contract, tort,
equity or otherwise, or for recognition or enforcement of any
judgment, and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such action
or proceeding may be heard and determined in such state court or, to
the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law. Each of the parties hereto waives in all disputes any
objection that it may have to the location of the court considering
the dispute.
9.5. SERVICE OF PROCESS
Each of the parties hereto irrevocably consents to the service of
process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to their respective notice addresses
specified herein. Such service to become effective five (5) days
after such mailing. Each of the parties hereto irrevocably waives
any objection (including, without limitation, any objection of the
laying of venue or based on the grounds of FORUM NON CONVENIENS)
which it may now or hereafter have to the bringing of any such action
or proceeding with respect to this Agreement in any jurisdiction set
forth above. Nothing herein shall affect the right to serve process
in any other manner permitted by law or shall limit the right of
either party to bring proceedings against the other in the courts of
any other jurisdiction.
9.6. SUCCESSORS AND ASSIGNS; ASSIGNMENT
Except as otherwise expressly limited herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors,
permitted assigns, heirs, executors, and administrators of the
parties hereto.
9.7. ENTIRE AGREEMENT; AMENDMENT AND WAIVER; CONTRADICTION
This Agreement, together with the Warrants and the Purchase
Agreement, set forth the entire agreement of the parties with respect
to the subject matter hereof and supersedes all prior agreements,
contracts promises, representations, warranties, statements,
arrangements and understandings, if any, among the parties hereto or
their representatives. No waiver, modification or amendment of any
provision, term or condition hereof shall be valid unless in writing
and signed by the party to be charged therewith, and any such waiver,
modification or amendment shall be valid only to the extent therein
set forth. In case of any direct contradiction between the
provisions of this
13
Agreement and the By-laws which results from a change in the By-laws
at any time following the date hereof, the provisions of this
Agreement shall prevail in the relationship of the parties hereto.
9.8. NOTICES
All notices or other communications hereunder including claims shall
be in writing and shall be given in person, by registered mail
(registered air mail if mailed internationally), by an overnight
courier service which obtains a receipt to evidence delivery, or by
facsimile transmission (provided that written confirmation or receipt
is provided), addressed to each party in accordance with this
provision:
if to the Holder AT&T Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: AT&T Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President Law
and Secretary
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
if to the Company: Brite Voice Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
or such other address with respect to a party as such party shall
notify each other Party in writing as above provided. Any notice
sent in accordance with this Section shall be effective (i) if
mailed, five (5) business days after MAILING, (ii) if sent by
messenger, upon delivery, and (iii) if sent via telecopier, upon,
transmission and electronic confirmation of receipt or (if
transmitted and received on a non-business day) on the first business
day following transmission and electronic confirmation of receipt.
9.9. EXPENSES
Each party shall bear its own expenses in connection with the
preparation, execution, and delivery of this Agreement and the
negotiations leading thereto, and any other documents relating to the
transactions contemplated by the Agreement. The Company shall be
solely responsible for the payment of any taxes imposed on the
Company. In the event that the transaction does not close for any
reason, each party shall be responsible for its own legal costs.
14
9.10 INDEMNIFICATION OF BROKERAGE
The Company represents and warrants to the Holder that no broker,
finder, agent or similar intermediary (a "Broker") has acted on
behalf of the Company, any of its subsidiaries in connection with
this Agreement or the transactions contemplated hereby, and that
there are no brokerage commissions, finder's fees or similar fees or
commissions payable in connection therewith based on any agreement,
arrangement or understanding with the Company or any of its
subsidiaries or any action taken by the Company or any of its
subsidiaries. The Company agrees to indemnify and hold harmless the
Holder from any claim or demand for commission or other compensation
by any Broker claiming to have been employed by or on behalf of the
Company or any of its subsidiaries and to bear the cost of legal
expenses incurred in defending against any such Claim. The Holder
represents and warrants to the Company that no Broker has acted on
behalf of the Holder in connection with this Agreement or the
transactions contemplated hereby and that there are no brokerage
commissions, finders' fees or similar fees or commissions payable in
connection therewith based on any agreement, arrangement or
understanding with the Holder, or any action taken by the Holder.
The Holder agrees to indemnify and hold harmless the Company from
any Claim or demand for commission or other compensation by any
Broker claiming to have been employed by or on behalf of the Holder,
and to bear the cost of legal expenses incurred in defending against
any such Claim.
9.11. PRESS RELEASE
Any press releases relating to the terms and conditions of this
Agreement shall be approved in advance in writing by all parties
hereto.
9.12. DELAYS OR OMISSIONS
No delay or omission to exercise any right, power, or remedy
accruing to any party upon any breach or default under this
Agreement shall be deemed a waiver of any other breach or default
theretofore, or thereafter occurring. Any waiver, permit, consent,
or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of
any party of any provisions or conditions of this Agreement, or any
waiver on the part of any party of any provisions or conditions of
this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies,
either under this Agreement or by law or otherwise afforded to any
of the parties, shall be cumulative and not alternative.
9.13. SEVERABILITY
If any provision of this Agreement is held by a competent court to
be invalid or unenforceable under applicable law, then such
provision shall be excluded from this Agreement and the remainder of
this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms;
provided, however, that in such event this Agreement shall be
interpreted so as to give effect, to the greatest extent consistent
with and permitted by applicable law, to the meaning and intention
of the excluded provision as determined by such court of competent
jurisdiction.
9.14. HEADINGS
15
All section headings herein are inserted for convenience only and
shall not modify or affect the construction or interpretation of any
provision of this Agreement.
9.15. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and enforceable against the
parties actually executing such counterpart, and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
AT&T CORP.
By:______________________
Name:
Title:
BRITE VOICE SYSTEMS, INC.
By:______________________
Name:
Title:
16
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS EXERCISE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION
FROM REGISTRATION, UNDER SAID ACT.
Number of Shares: 1,400,000 shares (subject to
adjustment as provided herein)
Date of Issuance: December 12, 1997
Issuer: Brite Voice Systems, Inc., a
Kansas corporation
COMMON STOCK PURCHASE WARRANT
Brite Voice Systems, Inc., a Kansas corporation (the "Company"), for value
received, hereby certifies that AT&T Corp., a New York corporation ("AT&T"), is
entitled, upon the terms and subject to the conditions set forth below, to
purchase from the Company, at any time or from time to time during the periods
specified herein, 1,400,000 shares of common stock, no par value, of the Company
(the "Common Stock"), at a purchase price of $11 per share, as may be adjusted
pursuant to the terms hereof.
The shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter referred to as the "Warrant Shares" and the
"Purchase Price," respectively. Capitalized terms used herein but not otherwise
defined shall have the meaning given them in Section 12.
1. EXERCISE.
(a) This Warrant shall become exercisable, in full or in part, pursuant to
the provisions of Section 1(b), (i) immediately as to 466,666 Warrant Shares,
(ii) on the first anniversary of the date hereof as to 466,667 Warrant Shares
and (iii) on the second anniversary of the date hereof as to
466,667 Warrant Shares (each as may be adjusted from time to time).
Notwithstanding the foregoing, if at an earlier date an Acceleration Event
occurs, then this Warrant shall become immediately exercisable, in full or in
part, pursuant to the provisions of Section 1(b) as to all Warrant Shares. This
Warrant shall remain exercisable as to particular Warrant Shares for a period of
three years after such Warrant Shares first become exercisable, and no longer,
and shall expire as to such Warrant Shares if not exercised prior to the end of
such three year period.
(b) The exercise of this Warrant shall be effected by surrender of this
Warrant, together with the purchase form appended hereto as Exhibit A duly
executed by AT&T, at the principal office of the Company, accompanied by payment
in full, by wire transfer, bank check, cancellation of a portion of this Warrant
pursuant to Section 1(c) or other method acceptable to the Company, of the
Purchase Price payable in respect of the number of Warrant Shares purchased upon
such exercise.
(c) AT&T may, at its option, elect to pay some or all of the Purchase
Price payable upon an exercise of this Warrant by canceling a portion of this
Warrant (to the extent then exercisable) with respect to such number of Warrant
Shares as is determined by dividing (i) the total Purchase Price payable in
respect of the number of Warrant Shares being purchased upon such exercise by
(ii) the excess of the Fair Market Value per share of Common Stock as of the
effective date of exercise (the "Exercise Date"), over the Purchase Price per
share.
(d) The exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company and paid for as provided in Section
1(b) hereof. At such time, AT&T shall be deemed to have become the holder of
record of the Warrant Shares issuable upon such exercise.
(e) As soon as practicable after the exercise of this Warrant, in full or
in part, the Company, at its expense (including without limitation the payment
of any applicable stamp taxes), will cause to be issued in the name of, and
delivered to, AT&T:
(i) a certificate for the number of full Warrant Shares to which AT&T
shall be entitled upon such exercise plus, in lieu of any fractional shares to
which AT&T would
- 2 -
otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof; and
(ii) in case such exercise is in part only, a new warrant (dated the
date hereof) of like tenor, calling on the face thereof for the number of
Warrant Shares equal to the number of such shares called for on the face of this
Warrant(as adjusted pursuant to the provisions of Section 2 hereof) minus the
sum of (A) the number of Warrant Shares purchased by AT&T upon such exercise
plus (B) the number of Warrant Shares, if any, covered by the portion of this
Warrant canceled in payment of the Purchase Price payable upon exercise pursuant
to Section 1(c).
2. ADJUSTMENTS.
(a) If outstanding shares of the Common Stock shall be subdivided into a
greater number of shares or a dividend in Common Stock shall be paid in respect
of Common Stock, the Purchase Price in effect immediately prior to such
subdivision or at the record date of such dividend shall simultaneously, with
the effectiveness of such subdivision or immediately after the record date of
such dividend, be proportionately reduced. If outstanding shares of Common
Stock shall be combined into a smaller number of shares, the Purchase Price in
effect immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased. When any
adjustment is required to be made in the Purchase Price, the number of Warrant
Shares purchasable upon the exercise of this Warrant shall be changed to the
number determined by dividing (i) an amount equal to the number of shares
issuable upon the exercise of this Warrant immediately prior to such adjustment,
multiplied by the Purchase Price in effect immediately prior to such adjustment,
by (ii) the Purchase Price in effect immediately after such adjustment.
(b) If there shall occur any capital reorganization or reclassification of
the Common Stock (other than a change in par value or a subdivision or
combination as provided for in Section 2(a) hereof), or any consolidation or
merger of the Company with or into another company, or a transfer of all or
substantially all of the assets of the Company, then, as part of any such
reorganization, reclassification, consolidation, merger or sale, as the case may
be, lawful provision shall be made so that AT&T shall have the right thereafter
to receive upon the exercise hereof the kind and amount of shares of stock or
other securities or property which AT&T would have been entitled to receive if,
- 3 -
immediately prior to any such reorganization, reclassification, consolidation,
merger or sale, as the case may be, AT&T had held the number of shares of Common
Stock called for on the face of this Warrant (as adjusted pursuant to the
provisions of this Section 2). In any such case, appropriate adjustment shall
be made in the application of the provisions set forth herein with respect to
the rights and interests thereafter of AT&T, such that the provisions set forth
in this Section 2 (including provisions with respect to adjustment of the
Purchase Price) shall thereafter be applicable, as nearly as is reasonably
practicable, in relation to any shares of stock or other securities or property
thereafter deliverable upon the exercise of this Warrant.
(c) If a dividend or other distribution shall be paid in respect of Common
Stock (other than a dividend as provided for in Section 2(a) hereof), the
Purchase Price in effect immediately prior to the record date of such dividend
or other distribution shall immediately after the record date of such dividend
or other distribution be reduced by the fair market value as of the record date
of such dividend or other distribution per share of Common Stock (as determined
in good faith by the Board of Directors). When any adjustment is required to be
made in the Purchase Price, the number of Warrant Shares purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing
(i) an amount equal to the number of shares issuable upon the exercise of this
Warrant immediately prior to such adjustment, multiplied by the Purchase Price
in effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment.
(d) If the Company proposes to issue shares of Common Stock or securities
convertible into Common Stock, at a price per share (including any payment to
convert securities into Common Stock) less than the Fair Market Value per share
of the Common Stock, other than (i) to its employees and directors pursuant to
the Company's 1984 Incentive Stock Option Plan, Non-employee Director Stock
Option Plan, 1994 Stock Option Plan, 1994 Employee Stock Purchase Plan and any
other stock option or stock purchase plan adopted by the Company's Board of
Directors and approved by the Company's stockholders pursuant to which shares of
the Company's Common Stock may be issued to employees and/or directors of the
Company and (ii) to any sellers as all or part of the consideration for the
acquisition by the Company of a business (as defined in Rule 3-05 of S-X of the
U.S. securities laws), the Purchase Price shall be adjusted to
- 4 -
equal the Purchase Price in effect immediately prior to the new issuance
multiplied by the following fraction:
NS x NSPP
---------
OS + FMV
----------------------
OS + NS
where
OS = the number of outstanding shares on a fully diluted basis prior to the
new issuance
NS = the number of shares issued on a fully diluted basis in the new
issuance
NSPP = the price per share of the shares issued in the new issuance
(including any payment to convert securities into Common Stock)
FMV = the Fair Market Value per share of the Common Stock immediately prior
to the new issuance.
(e) When any adjustment is required to be made in the Purchase Price or
number of shares, the Company shall mail to AT&T, within 5 days of such
adjustment, an officers' certificate setting forth the Purchase Price and number
of shares after such adjustment and setting forth a brief statement of the facts
requiring such adjustment, including in the case of Section 2(c), the basis of
the Board of Directors determination of the fair market value. Such certificate
shall also set forth the kind and amount of stock or other securities or
property into which this Warrant shall be exercisable following the occurrence
of any of the events specified above. If more than one adjustment is required
to be made pursuant to this Section 2, the adjustments shall be made
successively whenever any event listed above shall occur.
3. FRACTIONAL SHARES.
The Company shall not be required upon the exercise of this Warrant to
issue any fractional shares, but shall make an adjustment therefor in cash on
the basis of the Fair Market Value per share of Common Stock.
4. TRANSFER RESTRICTIONS.
This Warrant, and upon exercise of this Warrant, the Warrant Shares,
may not, without the prior written consent of the Company, be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of, whether voluntarily
or by operation of law, to any Person other than pursuant to registration under
the Securities Act or an exemption thereof, accompanied by an opinion of counsel
in
- 5 -
form and substance reasonably satisfactory to the Company to that effect. The
Holder acknowledges that any certificate evidencing the Warrant Shares shall
bear a legend to reflect the foregoing restriction to the extent such Warrant
Shares are subject to such restrictions.
5. NO IMPAIRMENT.
The Company will not, by amendment of its articles or certificate of
incorporation or other governance documents or through reorganization,
consolidation, merger, dissolution, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of AT&T against impairment.
6. RESERVATION OF SHARES.
The Company will at all times reserve and keep available, solely for
issuance and delivery upon the exercise of this Warrant, such number of Warrant
Shares and other stock, securities and property, as from time to time shall be
issuable upon the exercise of this Warrant.
7. REPLACEMENT OF WARRANT.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, the Company will issue,
in lieu therefor, a new Warrant of like tenor.
8. MAILING OF NOTICES.
All notices and other communications in connection herewith from the
Company to AT&T shall be mailed by first-class certified or registered mail,
postage prepaid, to the address furnished to the Company in writing by AT&T.
All notices and other communications from AT&T in connection herewith to the
Company shall be mailed by first-class certified or registered mail, postage
prepaid, to the address furnished to AT&T in writing by the Company.
9. NO RIGHTS AS STOCKHOLDER.
Until the exercise of this Warrant, AT&T shall not have or exercise any
rights by virtue hereof as a stockholder of the Company.
- 6 -
10. CHANGE OR WAIVER.
Any term of this Warrant may be changed or waived only by an instrument in
writing signed by the party against which enforcement of the change or waiver is
sought.
11. HEADINGS.
The headings in this Warrant are for purposes of reference only and shall
not limit or otherwise affect the meaning of any provision of this Warrant.
12. DEFINITION.
As used in this Warrant, the following terms shall have the meanings
indicated below:
(a) "Acceleration Event" means (i) the direct or indirect, sale, lease,
exchange or other transfer of at least one-half of the assets of the Company to
any Person or group of Persons acting in concert as a partnership or other group
(a "Group of Persons") other than a subsidiary of the Company, (ii) the merger
or consolidation of the Company with or into another company with the effect
that the then existing stockholders of the Company hold less than 50% of the
combined voting power of the then outstanding securities of the surviving
company of such merger or the company resulting from such consolidation
ordinarily (and apart from rights arising under special circumstances) having
the right to vote in the election of directors, (iii) the replacement of a
majority of the Board of Directors of the Company, over a two-year period, from
the directors who constituted the Board of Directors at the beginning of such
period (together with any new directors whose election has been approved by 2/3
of the directors still in office who either were directors at the beginning of
such period or whose election was previously so approved), (iv) a Person or
Group of Persons shall, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, have become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company representing 30% or more of the combined voting power
of the then outstanding securities of the Company ordinarily (and apart from
rights accruing under special circumstances) having the right to vote in the
election of directors, or (v) an investment in the Company in excess of $5
million made by a material competitor of AT&T other than pursuant to open-market
purchases.
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(b) "Closing Bid Price" per share of Common Stock on each business day
means: (i) if the Common Stock is listed or admitted for trading on any
securities exchange, the closing price, regular way, on such day on the
principal exchange on which such security is traded, or if no sale takes place
on such day, the average of the closing bid and asked prices on such day, (ii)
if the Common Stock is not then listed or admitted to trading on any securities
exchange, the last reported sale price on such day, or if there is no such last
reported sale price on such day, the average of the closing bid and the asked
prices on such day, as reported by a reputable quotation source designated by
the Company or (iii) if neither clause (i) nor (ii) is applicable, the average
of the reported high bid and low asked prices on such day, as reported by a
reputable quotation service, or a newspaper of general circulation in the
Borough of Manhattan, City of New York, customarily published on each business
day, designated by the Company. If there are no such prices on a business day,
then the market price shall not be determinable for such business day.
(c) "Fair Market Value" per share of Common Stock at any date shall mean:
(i) if the Common Stock is listed on a national securities exchange, the NASDAQ
National Market or another nationally recognized exchange or trading system, the
Fair Market Value per share of Common Stock shall be deemed to be the average of
the daily Closing Bid Prices for each business day during the period commencing
15 business days before such date and ending on the date one day prior to such
date or, if the Common Stock has been registered under the Exchange Act for less
than 15 consecutive business days before such date, then the average of the
daily closing bid prices for all of the business days before such date for which
daily closing bid prices are available. If the closing bid price is not
determinable for at least 10 business days in such period, the Current Market
Value of the Common Stock shall be determined as if the Common Stock was not
listed on a nationally recognized securities exchange, the NASDAQ National
Market or another nationally recognized exchange or trading system, (ii) if the
Common Stock is not listed on a national securities exchange, the NASDAQ
National Market or another nationally recognized exchange or trading system, the
Fair Market Value per share of Common Stock shall be deemed to be the amount
determined in good faith by the Board of Directors to represent the fair market
value per share of the Common Stock (including, without limitation, a
determination for purposes of granting Common Stock options or issuing Common
Stock under an employee benefit plan of the Company), unless AT&T requests
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that the Company obtain an opinion of an internationally recognized investment
banking firm chosen by the Company (who shall bear the expense) and reasonably
acceptable to AT&T, in which event Fair Market Value shall be determined by such
investment banking firm.
(d) "Person" means an individual, a partnership, a limited liability
company, a joint venture, a corporation, an association, a trust or any other
entity or organization, including a government or any department or agency
thereof.
13. GOVERNING LAW.
This Warrant will be governed by and construed in accordance with the laws
of the State of Kansas, without regard to the principles of conflicts of laws
thereof.
BRITE VOICE SYSTEMS, INC.
By:
-------------------------------
Name:
Title:
Agreed and Accepted:
AT&T CORP.
By:
---------------------------
Name:
Title:
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EXHIBIT A
PURCHASE FORM
To: BRITE VOICE SYSTEMS, INC. Dated:_____________
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby irrevocably elects to purchase ____________ shares of the Common
Stock covered by such Warrant. The undersigned herewith makes payment of
$_______________, representing the full purchase price for such shares at the
price per share provided for in such Warrant. Such payment takes the form of
(check applicable box or boxes):
/ / $_______ by wire transfer, bank check or other method acceptable
to Brite Voice Systems, Inc., and/or
/ / the cancellation of such portion of the attached Warrant as is
exercisable for a total of _______ Warrant Shares (using a Fair
Market Value of $_______ per share for purposes of this
calculation).
AT&T CORP.
By:
---------------------------
Name:
Title
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