Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
AMENDED AND RESTATED
PROCUREMENT AND SERVICES CONTRACT
between
SPRINT SPECTRUM EQUIPMENT COMPANY, L.P.,
Owner
and
LUCENT TECHNOLOGIES INC.,
Vendor
Dated as of October 9, 1996
AMENDED AND RESTATED PROCUREMENT AND SERVICES CONTRACT
This Amended and Restated Procurement and Services Contract
(the "Contract") is made and is effective as of October 9, 1996 (the "Effective
Date"), by and between Sprint Spectrum Equipment Company, L.P., a Delaware
limited partnership (the "Owner"), and Lucent Technologies Inc., a Delaware
corporation (the "Vendor" and, together with the Owner, the "Parties").
RECITALS:
A. The Federal Communications Commission (the "FCC") granted to
Sprint Spectrum Holding Company L.P. ("Holdings"), a Delaware limited partner-
ship (formerly known as MajorCo L.P.) and certain of its affiliates personal
communications services licenses (the "PCS FCC Licenses") to build and operate
PCS Systems (as defined below) in specified geographic areas in the United
States;
B. Holdings and AT&T Corp. ("AT&T"), a New York corporation by and
through its Network Systems Group entered into a Procurement and Services
Contract dated as of January 31, 1996 (the "Procurement and Services Contract").
Effective as of February 1, 1996, pursuant to subsection 27.22 of the
Procurement and Services Contract and a Notice of Assignment dated as of
February 1, 1996 (the "AT&T Assignment"), AT&T assigned all of its right, title
and interest in and to, and delegated and transferred all of its duties,
obligations and liabilities, under the Procurement and Services Contract to
Lucent Technologies Inc., a Delaware corporation (the "Vendor") and the full
successor to the Network Systems Group of AT&T. Pursuant to the AT&T Assignment,
AT&T was released and discharged from all duties, obligations and liabilities
under the Procurement and Services Contract. Effective as of June 21, 1996,
pursuant to an Assignment, Assumption and Amendment No. 1 dated as of June 21,
1996 ("Amendment No. 1") by and among Holdings, Sprint Spectrum L.P., a Delaware
limited partnership ("Sprint Spectrum"), the Owner and the Vendor, all of
Holdings' right, title and interest in and to the Procurement and Services
Contract was assigned to and all of its duties and obligations under the
Procurement and Services Contract were delegated to Sprint Spectrum and Holdings
was released and discharged from any and all liabilities, obligations or duties
under or in respect of the Procurement and Services Contract. Pursuant to
Amendment No. 1, all of Sprint Spectrum's right (other than certain rights under
the Procurement and Services Contract to exercise remedies under the Procurement
and Services Contract in lieu of any such exercise by the Owner), title and
interest in and to the Procurement and Services Contract was assigned to and all
of its duties and obligations under the Procurement and Services Contract were
delegated to the Owner and further, the Procurement and Services Contract was
amended. Pursuant to Amendment No. 2 to the Procurement and Services Contract
dated as of July 15, 1996 ("Amendment No. 2"), the Procurement and Services
Contract was further amended. For the purposes hereof, the Procurement and
Services Contract as assigned pursuant to the AT&T Assignment and Amendment No.
1 and as amended pursuant to Amendment No. 1 and Amendment No. 2 is hereinafter
referred to as the "Existing Contract";
C. The Owner desires to have the Vendor engineer and construct PCS
Systems and PCS Sub-Systems in the geographic areas specified for such PCS
Systems and PCS Sub-Systems on Schedule 4 (collectively, the "System Areas")
pursuant to the terms of this Contract;
D. The Vendor, itself or through its Subcontractors (as defined
below), desires to provide Products (as defined below) and Services (as defined
below) to the Owner in connection with the engineering and construction of PCS
Systems and PCS Sub-Systems in the System Areas (as certain of such System Areas
may be divided into the certain sub-areas ("System Sub-Areas") set forth on
Schedule 4) including, but not limited to, the Vendor's obligation to engineer,
equip, install, build, test and service and operate PCS Systems and PCS
Sub-Systems in such System Areas and System Sub-Areas in accordance with the
terms and conditions set forth herein; and
E. The Parties desire to amend and restate the Existing Contract
to provide for, among other things, the incorporation of all prior amendments
and the subdivision of certain PCS Systems into certain defined PCS Sub-Systems;
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the Parties hereby agree that the Existing Contract
will be and hereby is amended and restated in its entirety to read herein as
follows:
SECTION 1 DEFINITIONS
1.1 Definitions. In addition to the terms listed below, certain
additional terms are defined in the Exhibits (as defined below), subject to the
provisions of subsection 1.2 hereof. As used in this Contract, the following
terms have the following meanings:
"AAA" means the American Arbitration Association.
"Acceptance Certificates" means the collective reference to the
Factory Test Certificate, the Initial PCS System Certificate, the Substantial
Completion Certificate and the Final Acceptance Completion Certificate.
"Acceptance Tests" means the collective reference to the
performance and reliability demonstrations and tests specified in Exhibits B1,
B2 and B3 to determine whether the Products, the Services, any of the PCS
Systems, PCS Sub-Systems and/or the System meet the Specifications and the terms
and conditions of any applicable order and this Contract.
"Access Manager HLR (AM/HLR)" means Equipment and Software that
provides the call processing logic which comprises the stand-alone HLR service.
The stand-alone service being that service which contains the PCS subscriber's
or group of PCS subscribers' profile data used to provide call completion and
enhanced services as further described in Appendix A.
"Access Manager Specifications ("AM/HLR Specifications")" means the
Access Manager Specifications set forth in Appendix A.
"Actiview" means Vendor's Actiview application software that is
used for provisioning of services features ("SFP") within the Owner's services
operations, including, but not limited to, over-the-air provisioning and
non-over-the-air provisioning and computer desk to functions as defined in the
Actiview Statement of Work.
"Actiview Acceptance Test Period" means the applicable period of
time in days that the Vendor has to test and the Owner has to accept Actiview
Products and Services as specified in the Actiview Statement of Work.
"Actiview Completion Dates" means the dates and milestones set
forth in the Actiview Statement of Work that are required to be met by the
Vendor for the successful and timely completion of the provision of the Actiview
Products and Services.
"Actiview Final Acceptance" means the Owner's final acceptance of
the relevant Actiview Products and Services, and, to the extent applicable, the
installation thereof, pursuant to and in accordance with the Actiview Final
Acceptance Tests set forth in Appendix S; provided that in no event can Actiview
Final Acceptance occur with respect to Actiview Products or Services prior to
thirty (30) days after the completion of Actiview Final Acceptance Testing.
"Actiview Final Acceptance Tests" and "Actiview Final Acceptance
Testing" means the Actiview Products and Services final acceptance testing as
set forth in Appendix S.
"Actiview Functional Acceptance" means the Owner's initial
acceptance of Actiview Products and Services, and, to the extent applicable, the
installation thereof, pursuant to and in accordance with the Actiview Functional
Acceptance Tests set forth in Appendix S.
"Actiview Functional Acceptance Test" and "Actiview Functional
Acceptance Testing" means the initial field tests performed pursuant to and in
accordance with Appendix S during the Actiview Acceptance Test Period to
determine whether the Actiview Products and Services meet the requirements and
specifications set forth in the Actiview Statement of Work.
"Actiview Maintenance and Instruction Manuals" has the meaning
ascribed thereto in subsection 2.22.
"Actiview Operating Manuals" has the meaning ascribed thereto in
subsection 2.20.3.
"Actiview Price" means the aggregate price set forth in Appendix T
for all of the Actiview Products and Actiview Services to be provided under the
Contract and described in the Actiview Statement of Work.
"Actiview Product Warranty Period" has the meaning ascribed thereto
in subsection 17.1.3.
"Actiview Products" means the collective reference to Actiview
Software, Actiview documentation and any other ancillary Actiview items provided
by the Vendor to the Owner.
"Actiview Services" means those services provided by the Vendor to
the Owner as part of the provision, installation and continuing operation and
maintenance of the Actiview Products pursuant to and in accordance with the
Actiview Statement of Work.
"Actiview Software" means the work management Software forming part
of the application Software provided by the Vendor to the Owner pursuant to and
in accordance with the Actiview Statement of Work.
"Actiview Statement of Work" means the requirements, specifications
and milestones set forth in Appendix U.
"Adaptations" means any derivative work based on service package
application licensed Software including (i) any work incorporating any service
package application licensed Software directly, (ii) any work incorporating any
computer program from service package application licensed Software rewritten in
a different computer language or converted to operate on a different type of
CPU, (iii) any work utilizing a method or concept from service package
application licensed Software that the Owner is obligated to keep in confidence
hereunder or (iv) any work otherwise covered by any of the Vendor's intellectual
property rights in service package application licensed Software.
"Additional Affiliate" has the meaning ascribed thereto in subsec-
tion 3.1.
"Additional Affiliate Agreement" has the meaning ascribed thereto
in subsection 3.3.
"Additional Affiliate Arrangement" means a formal arrangement
between the Owner and a Person to be designated an Additional Affiliate under
the terms of this Contract, which arrangement will include, but not be limited
to, agreements on marketing, backhaul, common billing, resale agreements and/or
revenue sharing.
"Affiliates" means the collective reference to the Initial Affil-
iates and the Additional Affiliates.
"Annual Release Maintenance Fees" means those recurring annual fees
of the Vendor, usually invoiced annually in January, the Owner's payment of
which entitles the Owner to receive all Combined Software Releases, Software
Enhancements, and Software Upgrades applicable to PCS Products (but not Optional
Software Features) which will be made available to the Owner when made generally
available to the Vendor's Customers during the period for which the fees were
paid. All Annual Release Maintenance Fees will be as in the Vendor's Customer
Price Guides (subject to Section 26) except as otherwise set forth on Schedule
3. The Annual Release Maintenance Fees applicable to the Owner will for the
period from the Effective Date until the Final Acceptance of the last PCS System
within the Initial System always cover at least those PCS Products included in
the Initial System.
"ANSI" means the American National Standards Institute.
"APC" means American PCS, L.P., a Delaware limited partnership.
"Applicable Laws" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, all United States or foreign laws (including, but not limited to, any
Environmental Laws), treaties, ordinances, judgments, decrees, injunctions,
writs, orders and stipulations of any court, arbitrator or governmental agency
or authority and statutes, rules, regulations, orders and interpretations
thereof of any federal, state, provincial, county, municipal, regional,
environmental or other Governmental Entity, instrumentality, agency, authority,
court or other body (i) applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject or (ii)
having jurisdiction over a or any part of any PCS System, the System or the Work
to be performed pursuant to the terms of this Contract.
"Applicable Permits" means any waiver, exemption, zoning, building,
variance, franchise, permit, authorization, approval, license or similar order
of or from any United States, foreign, federal, state, provincial, county,
municipal, regional, environmental or other governmental body, instrumentality,
agency, authority, court or other body having jurisdiction over all or any part
of any PCS System, the System or the Work to be performed pursuant to the terms
of this Contract.
"Application Software ("AS")" or "AS Software," means the Software
used for operations and maintenance support as part of the Vendor provided AS
Products and Services described in Appendix G.
"AS Acceptance Date" means the date or dates on which the AS
Products successfully complete the AS Functional Acceptance Tests or the AS
Final Acceptance Tests, as the case may be.
"AS Acceptance Test(s)" means the collective reference to the AS
Functional Acceptance Tests and the AS Final Acceptance Tests.
"AS Acceptance Test Period" means the applicable period of time in
days that the Vendor has to test and the Owner has to accept or reject certain
AS Products as specified in the AS Statement of Work.
"AS Completion Dates" means the dates and milestones set forth in
Appendix G that are required to be met by the Vendor for the successful and
timely completion of the AS Statement of Work in accordance with the AS
Statement of Work.
"AS Equipment" means certain third party manufactured or other
Equipment provided to the Owner by the Vendor as necessary for the operation and
integration of the AS Software and the AS Services pursuant to and in accordance
with the AS Statement of Work.
"AS Final Acceptance" means the Owner's final acceptance of the AS
Products and installation thereof, pursuant to and in accordance with the AS
Final Acceptance Tests; provided that in no event can AS Final Acceptance occur
with respect to AS Software and/or AS Services prior to thirty (30) days after
the completion of AS Functional Acceptance Testing.
"AS Final Acceptance Tests" and "AS Final Acceptance Testing" means
the AS Product final acceptance tests set forth in Appendix K.
"AS Functional Acceptance" means the Owner's initial acceptance of
AS Products and Services, and, to the extent applicable, the installation
thereof, pursuant to and in accordance with the AS Functional Acceptance Tests.
"AS Functional Acceptance Test" and "AS Functional Acceptance
Testing" means the initial functional tests performed pursuant to and in
accordance with Appendix K.
"AS/OAM&P Statement of Work" or "AS Statement of Work" means the
scope of work to be performed by the Vendor in accordance with the terms of
Appendix G.
"AS Operating Manuals" has the meaning ascribed thereto in subsec-
tion 2.20.1.
"AS Price" means the aggregate price set forth in Appendix I for
all of the AS Products and AS Services to be provided under the Contract and
described in the AS Statement of Work.
"AS Product Warranty Period" has the meaning ascribed thereto in
subsection 17.1.1.
"AS Products" means the collective reference to AS Software and AS
Equipment.
"AS Services" means those OAM&P Services (including, but not
limited to, Optional AS Services) provided by the Vendor as part of the
provision, installation and continuing operation and maintenance of the AS
Products pursuant to and in accordance with the AS Statement of Work.
"AS/T&M" means the AS Services time and material pricing set forth
in Appendix I describing the quantity of hours involved and material expenses
related to a specific AS Statement of Work requirement which is done in
accordance with and pursuant to the AS Statement of Work; provided that AS/T&M
charges will only be charged (to the extent applicable) by the Vendor for AS
Services (other than Optional AS Services requested by the Owner in accordance
with Appendix G) requested by the Owner for performance by the Vendor of
applicable AS Services at any time after July 15, 1999.
"Backwards Compatibility" or "Backwards Compatible" means that any
referenced prior Software Revision Level or Levels of the applicable Software or
any referenced prior Equipment Revision Level or Levels of the applicable
Equipment, as the case may be, remain fully functional in accordance with and up
to the performance levels to which it was performing immediately prior to any
such enhancement and/or revision after the integration with the succeeding
Software Revision Level or Equipment Revision Level, as the case may be, and
that after such integration such prior Software Revision Level or Equipment
Revision Level loses no functionality and such succeeding Software Revision
Level or Equipment Revision Level interoperates with all such functionalities of
such prior Software Revision Level or Equipment Revision Level.
"Base Station ("BTS")" means the radio subsystem that handles the
Owner's PCS radio traffic in a designated cell. The Base Station includes all
amplification, modulation, synchronization and other circuitry required to
process a radio signal. The inputs to a Base Station are a landline or radio
signal (e.g., T1) and the radio signal that is fed into antenna lines.
"best efforts" means a Party's best efforts under the
circumstances, provided that the use of best efforts will not require the Party
to breach any outstanding contract or to violate any Applicable Law.
"Bolt-down" means for the purposes of each PCS Product all work
that needs to be done by the Vendor in order to permanently and securely place
such PCS Product in its appropriate location within the relevant System Element
Location, provided that Bolt-down will not necessarily constitute installation
of any such PCS Product.
"Build Notice" has the meaning ascribed thereto in subsection
2.7(a).
"Building Ready Date" has the meaning ascribed thereto in subsec-
tion 2.5.
"Business Day" means any day of the year other than a Saturday,
Sunday or a United States national holiday.
"Cable Microcell Integrator ("CMI")" means a form of cable
microcell integrator that provides for transportation of wireless communication
signals over a cable TV distribution plant. The CMI takes certain signals from
the cable TV distribution plant (the "cable PCS band or bands") and suitably
heterodynes, filters and amplifies these signals such that they can be radiated
by a CMI antenna or antennas in the designated PCS band to PCS wireless
handsets. The CMI takes signals received from the PCS wireless handsets from one
or more CMI receiving antennas and suitably heterodynes, filters and amplifies
these signals for transportation by the cable TV distribution plant to a Headend
Interface Converter ("HIC") or Distributive Cable Access Provider ("DCAP") at a
PCS Base Station. Additionally, the CMI unit responds to control signaling and
provides status signals. The CMI is normally collocated with the cable TV
distribution plant and takes power from the cable plant.
"Cable Partner" has the meaning ascribed thereto in subsection
27.23.
"CDMA" means code division multiple access as specified in
ANSI-J-STD-008.
"Change Orders" has the meaning ascribed thereto in subsection 7.2.
"Channels" means the voice channeling units contained in each cell
site.
"Civil Work" means the labor and materials necessary in the
performance of demolition, construction and renovation work (e.g., roads,
grading, fencing and structural improvements, including, but not limited to, any
buildings, towers and antennas) in order to construct a System Element Facility
in accordance with Exhibit E.
"Completion Cure Period" has the meaning ascribed thereto in sub-
section 15.3(a).
"Computer Program" means any Source Code or object-code instruction
or group of such instructions for controlling the operation of a CPU.
"Configuration Engineering" means the engineering required to
establish System Element configuration including, without limitation, preparing
component, inventory (including T1 quantities and configurations) and layout
drawings, Equipment labels, cable tray layout drawings, and "as-built" drawings
and Documentation. Configuration Engineering also includes the design, power
distribution and supply for each of the System Elements.
"Continental" means Continental Cablevision, Inc.
"Contract" has the meaning ascribed thereto in the prefatory
paragraph to this Amended and Restated Contract hereof. "Contract" will in all
instances include all Exhibits, Schedules, Appendices and Specifications and
will, unless specifically stated otherwise, always be deemed to include all
amendments, modifications and supplements to the Contract or any part thereof
(including any Exhibits, Schedules, Appendices or the Specifications) pursuant
to the terms of this Contract.
"Contract Cover Damages" has the meaning ascribed thereto in sub-
section 15.4.
"Contract Price" has the meaning ascribed thereto in subsection
6.1.
"CPU" means a central processing unit.
"Custom Material" has the meaning ascribed thereto in subsection
11.9.1.
"Customer" means any PCS customer of the Vendor doing business in
North America or any PCS customer doing business in North America of any of the
Vendor's affiliates or subsidiaries.
"Customer Price Guide" means the Vendor's published "Network
Wireless Systems Price Reference Guide" or other price notification releases
furnished for the purpose of communicating the Vendor's list pricing or
pricing-related items applicable to PCS Products to Customers intending to
operate PCS systems in the United States, provided that the term does not
necessarily include firm price quotes.
"Customer Service Request ("CSR")" has the meaning ascribed thereto
in subsection 2.26.2.
"Defects and Deficiencies," "Defects or Deficiencies" or
"Defective" means any one or a combination of the following items or other items
of a substantially similar nature:
(a) when used with respect to the performance of labor or service
items of Work (including any work by any Subcontractor), such items that are not
provided in a workmanlike manner and in accordance with the standards and/or
Specifications set forth herein;
(b) when used with respect to structures, materials, Equipment and
Software items of Work (including any Work by any Subcontractor), such items
that are not (i) new and of good quality and free from improper workmanship and
defects in accordance with the standards and/or Specifications set forth herein
or established hereunder and standards of good procurement, manufacturing and
construction standards, or (ii) free from errors and omissions in design or
engineering services in light of such standards; or
(c) in general, (i) Work (including any Work by any Subcontractor)
that does not conform to the Specifications and/or requirements of this
Contract, or (ii) any design, engineering, start-up activities, materials,
Equipment, Software, tools, supplies, Installation or Training that (1) does not
conform to the standards and/or Specifications set forth herein or established
hereunder, (2) has improper or inferior workmanship, (3) would materially and
adversely affect the ability of the System and/or any PCS System and/or any PCS
Sub-System and/or any material part thereof to meet the performance criteria
specified in Exhibit F on a consistent and reliable basis or (4) would
materially and adversely affect the continuous operation of the System and/or
any PCS System and/or any PCS Sub-System or any material part thereof in
accordance with the standards and/or Specifications set forth herein or
established hereunder. Defects and Deficiencies will be deemed to exist when
actually discovered or when they should have been apparent to a Person in the
Vendor's position after reasonable inspection and testing.
"Designated Processor" has the meaning of the AS Product for which
the "RTU" License specified in subsection 11.1 is granted.
"Discontinued Products" has the meaning ascribed thereto in sub-
section 10.1.
"Documentation" means the documentation for the System and/or any
PCS System and/or PCS Sub-System and/or any material part thereof.
"Effective Date" has the meaning ascribed thereto in the prefatory
paragraph to this Contract.
"E1 Emergency Condition ("E1")" has the meaning ascribed thereto in
subsection 2.26.3(b).
"E2 Emergency Condition ("E2")" has the meaning ascribed thereto in
subsection 2.26.3(b).
"Emergency Technical Assistance ("ETA")" means the provision of
emergency technical assistance to the Owner for the purpose of diagnosing and
resolving a problem which adversely affects the System and/or any PCS System
and/or any PCS Sub-System and/or any material part thereof, its operation and/or
its service pursuant to and in connection with subsection 2.26.3.
"Engineer" means the engineer or engineers appointed from time to
time by the Owner to do certain work and/or inspections and reviews on behalf of
the Owner and/or provide advice or information to the Owner in connection with
the System and/or any PCS System and/or any PCS Sub-System and/or any part
thereof.
"Engineering" means all of the engineering required to be done by
the Vendor to complete the System in accordance with the Specifications
including, but not limited to, RF Engineering, Configuration Engineering and
Facilities Engineering done in accordance with the Specifications and the CDMA
standards.
"Environmental Laws" means any and all United States and foreign,
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Entity, or
requirements of law (including, without limitation, common law) relating in any
manner to contamination, pollution, or protection of human health or the
environment, as now or may at any time hereafter be in effect.
"Equipment" means all equipment, hardware and other items of
personal property which are required to be furnished by the Vendor or any
Subcontractor pursuant to and in accordance with the terms and conditions of
this Contract and in connection with the System and/or any PCS System and/or any
PCS Sub-System and/or any part thereof in accordance with the Specifications
including, without limitation, additional equipment required as a result of the
expansion or additional coverage required pursuant to subsection 2.2, or
otherwise pursuant to the terms of this Contract, and the equipment listed on
Exhibit D or on Schedule 7 (parts A and B).
"Equipment Combined Release" has the meaning ascribed thereto in
subsection 13.1(a).
"Equipment Enhancements" means modifications or improvements made
to the PCS Equipment which improve performance or capacity of such Equipment
(sometimes referred to by the Vendor as its "Class B" changes).
"Equipment Revision Level" means each version of an Item of PCS
Equipment that reflects any modification or change from the immediately
preceding version of such Item of Equipment.
"Equipment Upgrade" means a change or modification in any delivered
PCS Equipment which fixes or otherwise corrects faults, design shortcomings or
shortcomings in meeting the Specifications, required to correct defects of a
type that result in inoperative conditions, unsatisfactory operating conditions,
or which is recommended to enhance safety (sometimes referred to by the Vendor
as its "Class A" changes).
"Escrow Agreement" has the meaning ascribed thereto in subsection
11.7.
"ETA" means Emergency Technical Assistance.
"Exchange Act" has the meaning ascribed thereto in subsection
27.22.
"Exhibits" means all of the schedules, exhibits, appendices or
other attachments hereto and made a part of this Contract as any such schedules,
exhibits, appendices and/or attachments may be amended, supplemented or
otherwise modified from time to time in accordance with the terms of this
Contract.
"Existing Contract" has the meaning ascribed thereto in the reci-
tals hereof.
"Expansions" means any additional Products or Services resulting
from a modification by the Owner to the Specifications, the performance criteria
set forth in Exhibit F or the Project Milestones set forth on Exhibit A
resulting in a change to the System and/or any PCS System and/or any PCS
Sub-System and/or any material part thereof, including, but not limited to, the
extension or expansion of the System and/or any PCS System and/or any PCS
Sub-System (i) into geographic areas outside of the System Areas or System
Sub-Areas, as the case may be, covered by the applicable PCS Systems or PCS
Sub-Systems, as the case may be, identified in Schedule 4, or (ii) to increase
capacity and/or performance of the System and/or any PCS System and/or any PCS
Sub-System beyond the performance criteria and/or Specifications originally
contemplated herein. Expansions will not include any additional Products or
Services required to meet the Specifications applicable to the Initial System.
For the purposes of this definition, "Expansions" will specifically not include
the extension of a PCS Sub-System into a geographic area covered or to be
covered by a PCS System of which such PCS Sub-System is a part.
"Extraordinary Transportation" means the Vendor's or its
Subcontractors' transport of Products and/or other materials pursuant to the
terms of this Contract where the circumstances of such transport require the
Vendor to use any one or a combination of the following extraordinary means of
transport and/or extraordinary methods of achieving access to the Owner's
facilities: (i) four-wheel drive vehicle (other than those typically used for
the delivery of Products), (ii) helicopter, (iii) boat, (iv) airplane, (v)
bulldozer, (vi) clear physical obstructions requiring the building of a new road
by the Vendor or its Subcontractors, or (vii) a construction crane.
"Facilities Engineering" means the engineering required to design
each System Element Facility including, without limitation, System Element
Locations and System Element layout, drawings and relevant Specifications for
the construction of the buildings, towers, generators, cable and antennae and
all other items required to make the System Element Facility functional.
Facilities Engineering does not include Configuration Engineering.
"Facilities Preparation Services" means all Facilities Engineering,
Civil Work, Site Plan Architectural Work, Structural Architectural Work, and
Utilities Work, all of which must be performed in accordance with the
Specifications. Pursuant to the definition of Civil Work, Facilities Preparation
Services will (unless otherwise agreed by the Owner) include all Work to
complete the Civil Work in a given System Element Location including, but not
limited to, the supply, building and installation of all buildings, towers and
antennas. Facility Preparation Services does not include Site Acquisition,
Network Interconnection, Microwave Relocation or any of the above referenced
activities for the construction of a Switch Site (except as otherwise provided
in this Contract).
"Facilities Preparation Services Warranty Period" has the meaning
ascribed thereto in subsection 17.2(b).
"Factory Test Certificate" means a document submitted by the Vendor
to the Owner and signed by an authorized representative of the Owner and an
authorized officer of the Vendor stating that in accordance with the
requirements of Exhibit B3 and this Contract the Vendor has successfully
completed all factory tests on the PCS Products (of the type to be installed as
part of the Initial System) in accordance with the requirements of Exhibit B3
and this Contract.
"FCC" has the meaning ascribed thereto in the recitals to this Con-
tract.
"Field Acceptance" means the Owner's initial acceptance of SCP/HLR
Products and the installation thereof, pursuant to and in accordance with the
Field Acceptance Tests set forth in Appendix E.
"Field Acceptance Tests" and "Field Acceptance Testing" means the
SCP/HLR field acceptance testing as set forth in Appendix E.
"Final Acceptance" means, as to any PCS System and/or PCS
Sub-System, the successful completion by the Vendor of all of the final
acceptance tests and requirements applicable to such PCS System and/or PCS
Sub-System set forth in Exhibit B3 in accordance with the requirements of
Exhibit B3 and the terms of this Contract. For the purposes of this Contract for
any PCS System that has been divided into PCS Sub-Systems, the Final Acceptance
of such PCS System will be deemed to have occurred upon the Final Acceptance of
the last PCS Sub-System within such PCS System.
"Final Acceptance Completion Certificate" means, with respect to a
given PCS System or PCS Sub-System, a document submitted by the Vendor to the
Owner and signed by an authorized representative of the Owner and an authorized
officer of the Vendor stating that the Vendor has successfully completed the
Acceptance Tests and requirements applicable to the Final Acceptance of the Work
to be done in such PCS System or PCS Sub-System, as the case may be, in
accordance with the requirements of Exhibit B3.
"Final RF Engineering Plan" has the meaning ascribed thereto in
subsection 2.6(c).
"Final RF Review Period" has the meaning ascribed thereto in sub-
section 2.6(c).
"Final Site Count" has the meaning ascribed thereto in subsection
2.6(c).
"Financing Interim Period" has the meaning ascribed thereto in sub-
section 24.9(a).
"Firmware" means a combination of (i) Equipment and (ii) Software
represented by a pattern of bits contained in such Equipment.
"Force Majeure" means the following:
(a) Acts of God, epidemic, earthquake, landslide,
lightning, fire, explosion, accident, tornado, drought, flood,
hurricane, or extraordinary weather conditions more severe than
those normally and typically experienced in the affected area
constituted by each of the specified System Areas in which the
Vendor is seeking to claim Contract suspension due to Force
Majeure;
(b) Acts of a public enemy, war (declared or undeclared),
blockade, insurrection, riot or civil disturbance, sabotage,
quarantine, or any exercise of the police power by or on behalf of
any public entity;
(c) (i) The valid order, judgment or other act of any
federal, state or local court, administrative agency, Governmental
Entity or authority issued after the Effective Date; (ii) with
respect to the Vendor, the suspension, termination, interruption,
denial or failure of or delay in renewal or issuance of any
Applicable Permit required by this Contract to be obtained by the
Owner; (iii) with respect to the Owner, the suspension,
termination, interruption, denial or failure of or delay in renewal
or issuance of any Applicable Permit required by this Contract to
be obtained by the Vendor; or (iv) a change in Applicable Law
(including the adoption of a new Applicable Law); provided that no
such order, judgment, act, event or change is the result of the
action or inaction of, or breach of this Contract by, the Party
relying thereon;
(d) Strikes, boycotts or lockouts, except for any such
strike, boycott or lockout involving the employees of the Vendor or
the permanent employees (not hired on a contract basis) of a
Subcontractor (for the period from the Effective Date until the
Final Acceptance of the last PCS System within the Initial System
but in no event to exceed three (3) years from the Effective Date);
(e) A partial or entire delay or failure of utilities; or
transportation embargoes; or
(f) The presence of (i) any Hazardous Waste on or at any
System Element Location which materially interferes with the Work
to be done thereon or otherwise materially endangers the safety of
any personnel at such location; (ii) any unknown historical or
archeological sites which are not shown or indicated in the survey
of any System Element Locations and of which the Vendor could not
have reasonably been expected to be aware; or (iii) any mining or
water recovery activities (other than such activities by the Vendor
or its Subcontractors) at or under any System Element Location
after the Effective Date.
Events of Force Majeure include the failure of a Subcontractor to
furnish labor, services, materials, or equipment in accordance with its
contractual obligations, only if such failure is itself due to an event of Force
Majeure. A Force Majeure does not include any delay in performance to the extent
due to the failure of the Vendor or any Subcontractor to provide an adequate
number of engineers or other workmen or to manufacture or procure an adequate
amount of Equipment, Software and/or Services.
"Governmental Entity" means any nation or government, any state,
province or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranteed Substantial Completion Date" means the date which is
defined in Exhibit A1 as "Milestone 8."
"Hazardous Waste" means any and all hazardous or toxic substances,
wastes, materials or chemicals, petroleum (including crude oil or any fraction
thereof) and petroleum products, asbestos and asbestos-containing materials,
pollutants, contaminants, polychlorinated biphenyls and any and all other
materials, substances, regulated pursuant to any Environmental Laws or that
could result in the imposition of liability under any Environmental Laws.
"HCUs" means the High Density Channel Card Units which carry eight
(8) voice Channels per card.
"Headend Interface Converter ("HIC")" means a form of CMI that
provides for transportation of wireless communication signals over a cable TV
distribution plant. The HIC takes signals from the PCS Base Station transmitter
and suitably heterodynes, filters and amplifies these signals for processing by
the PCS Base Station receiver. Additionally, the HIC provides reference and
control signals to the CMI units and receives and processes status signals from
the CMI unit.
"HLR Completion Dates" means the dates and milestones set forth in
Appendix E that are required to be met by the Vendor for the successful and
timely completion of the HLR Statement of Work.
"HLR Designated Switch Sites" means the Switch Sites within the
Nationwide Network in which the Owner requires the installation of AM/HLRs
within the Denver and Kansas City System Areas and the Philadelphia System Area
(as defined in the PhillieCo Contract) and the installation of SCP/HLRs within
the San Francisco, New York, Dallas, Denver and Kansas City System Areas and the
Philadelphia System Area (as defined in the PhillieCo Contract).
"HLR Final Acceptance" means the Owner's final acceptance of
SCP/HLR Products and the installation thereof, pursuant to and in accordance
with the HLR Final Acceptance Tests; provided that in no event can HLR Final
Acceptance occur with respect to any SCP/HLR Product prior to thirty (30) days
after the completion of Field Acceptance Testing for such SCP/HLR Product(s).
"HLR Final Acceptance Tests" and "HLR Final Acceptance Testing"
means the SCP/HLR final acceptance tests set forth in Appendix E.
"HLR Statement of Work" means the statement of work applicable to
the AM/HLRs and the SCP/HLRs set forth in Appendix E.
"In Revenue Service" or "In Revenue" means the commercial operation
of any PCS System and/or PCS Sub-System, or a portion thereof, exclusive of
operation for purposes of conducting Acceptance Tests; provided that In Revenue
Service or In Revenue will not by itself constitute acceptance in accordance
with the terms of this Contract of any such PCS System and/or PCS Sub-System or
any portion thereof.
"Indemnitees" has the meaning ascribed thereto in subsection
20.1(a).
"Independent Auditor" means any of the Persons set forth on
Schedule 15.
"Initial Affiliate Agreement" has the meaning ascribed thereto in
subsection 3.2.
"Initial Affiliates" means the collective reference to each of the
Persons set forth on Schedule 5.
"Initial Commitment" has the meaning ascribed thereto in subsection
7.1.
"Initial PCS System" means the Fresno PCS Sub-System or as
otherwise mutually agreed between the Parties.
"Initial PCS System Certificate" means a document submitted by the
Vendor to the Owner and signed by an authorized representative of the Owner and
an authorized officer of the Vendor stating that the Vendor has successfully
completed the Acceptance Tests applicable to the Initial PCS System in
accordance with the requirements of Exhibit B3.
"Initial System" means the build-out of that portion of the System
Areas and System Sub-Areas shown on Schedule 4 prior to any Expansions or Owner
requests for additional coverage for such System Areas and System Sub-Areas
pursuant to the terms of this Contract.
"Initial Term" has the meaning ascribed thereto in subsection 5.1.
"Inspector" means a qualified Person designated as an authorized
representative of the Owner assigned to make all necessary inspections of the
Work, or of the labor, materials and equipment furnished or being furnished by
the Vendor or any of its Subcontractors at the System Element Locations and the
other sites where the Vendor or any Subcontractor is prosecuting the Work,
subject to appropriate safety, security and confidentiality requirements.
"Installation" or "Installed" means the performance and supervision
by the Vendor of all installation of Products within the System and/or any PCS
System and/or any PCS Sub-System.
"Intellectual Property Rights" has the meaning ascribed thereto in
subsection 14.2(a).
"Interim Delay Penalty" has the meaning ascribed thereto in subsec-
tion 15.2.
"Interim Milestone" has the meaning ascribed thereto in subsection
15.2.
"Interoperability" means (i) the ability of the System and/or any
PCS System and/or any PCS Sub-System and/or any material part thereof to
interconnect and successfully operate with the equipment and software of other
systems and/or PCS systems and/or PCS sub-systems and/or any material part
thereof of the Vendor (including, for purposes of this definition, the PhillieCo
System) and/or the Other Vendors and/or other suppliers whose equipment and
software also meet the relevant ANSI standards and other Specifications
identified in Exhibit D and (ii) the ability of each of the Products to operate
with one another and to operate with and within the System, including, but not
limited to, the ability of the handsets (to be delivered pursuant to subsection
2.3) to operate with and within the System (including, for purposes of this
definition, the PhillieCo System), all in accordance with the Specifications.
Since certain sections of the ANSI standards are currently undefined, and
certain sections are left available for independent development by suppliers,
the potential for such interoperability or incompatibility with properly
designed systems exists, and must be resolved by the Vendor or any Subcontractor
providing PCS Systems or PCS Sub-Systems to the Vendor in accordance with the
terms hereof.
"Item" means any item at any time listed in any of the Vendor's
price lists and it specifically includes, without limitation, all Software
Upgrades, Software Enhancements, Equipment Upgrades, Equipment Enhancements and
modifications, enhancements, updates or other revisions of any kind in any such
item, spare parts with respect to any of the foregoing and any other
PCS/CDMA-related item.
"Late Completion Payment Cap" has the meaning ascribed thereto in
subsection 15.3.
"Late Completion Payments" has the meaning ascribed thereto in sub-
section 15.3.
"Liabilities" has the meaning ascribed thereto in subsection
20.1(a).
"Liquidated Damages" has the meaning ascribed thereto in subsection
15.1.
"Lucent/Nortel License Agreement" means the Interface License
Agreement between the Vendor and Nortel dated as of June 14, 1996 attached
hereto as Appendix D1.
"Lucent/Nortel License Agreement-OAM&P" means the OAM&P Interface
License Agreement between the Vendor and Nortel dated as of July 24, 1996
attached hereto as Appendix D2.
"M5 Forecast" has the meaning ascribed thereto in subsection
2.7(a).
"Maintenance and Instruction Manuals" means the manuals prepared by
the Vendor and delivered to the Owner pursuant to subsection 2.21 containing
detailed procedures and specifications for the ongoing maintenance of the
System.
"Major Portion" of the Work means a segregated portion of the Work
with a cost to the Owner of $10,000,000 or more.
"MFC Certificate" has the meaning ascribed thereto in subsection
26.1(b).
"Microwave Delay Period" has the meaning ascribed thereto in sub-
section 2.38(a).
"Microwave Relocation" means the process by which incumbent
point-to-point microwave users of the 1850 - 1990 Mhz frequency spectrum are
moved to other frequencies or alternate transmission facilities in order to
clear the licensed PCS spectrum for broadband wireless service.
"Microwave Relocation Completion" means, with respect to any given
PCS System or PCS Sub-System, the point at which the Owner will have finished
sufficient Microwave Relocation in such PCS System or PCS Sub-System to permit
the commercially viable and marketable operation of such PCS System or PCS
Sub-System in accordance with the terms of this Contract.
"Minimum Commitment" means sixty percent (60%) of the Initial
Commitment.
"Nationwide Network" means all of the PCS Systems and PCS
Sub-Systems built or to be owned and/or operated by the Owner or its Affiliates
in North America.
"NDAB" means the New Development Advisory Board established
pursuant to the terms of this Contract including subsections 2.11, 2.32 and
2.33.
"Network Interconnection" means the transmission links between Base
Stations and MSCs, between an MSC and another MSC, and between MSCs and PSTNs
but does not include connections between demarcation points of transmission
links and System Elements for which the Vendor will be responsible pursuant to
the terms of this Contract, including its obligations to install and test upon
the Owner's completion of such transmission links.
Typically T1 transmission links are used for connectivity.
"NewTelCo" means NewTelCo. L.P., a Delaware limited partnership.
"Non-Essential Equipment" means a Product, other than a PCS
Product, obtained from a third party supplier and furnished to the Owner as part
of Facilities Preparation Services in accordance with the terms of this
Contract, which Product will be furnished with an assignable warranty from the
such third party supplier of a length and scope determined by the Parties in the
development of the Specifications in accordance with the terms of Exhibit E for
the Product pursuant to the terms of this Contract, including, but not limited
to:
Antennas
Transmission towers
Monopoles
Prefabricated equipment shelters Power transformers
Batteries Rectifiers Uninterrupted power sources.
Non-Essential Equipment does not include normal construction materials
(including, but not limited to pipes, conduits, concrete, fences, lighting and
paving materials) used by the Vendor or its Subcontractors in the performance of
its Facilities Preparation Services.
"Nortel" means Northern Telecom Inc., a Delaware corporation.
"Nortel Contract" means that certain Procurement and Services
Contract between the Owner and Nortel dated as of January 31, 1996.
"North America" means the United States, Canada (including the
Province of Quebec) and Mexico.
"Notice to Proceed" means a written notice given by the Owner to
the Vendor in the form attached hereto as Schedule 9 and in compliance with the
provisions of this Contract, fixing the date on which the Vendor will have the
full right, in accordance with the terms of this Contract, and the full
obligation, subject to the terms of this Contract, to commence the Work to be
performed under this Contract.
"Notice to Proceed Date" means the date on which any Notice to
Proceed is issued by the Owner in accordance with the terms of this Contract.
"OAM&P" means operations administration maintenance and provision-
ing as described in Appendix G.
"OCC" has the meaning ascribed thereto in subsection 2.26.2.
"OM&P" has the meaning ascribed thereto in subsection 2.23(a).
"Operating Manuals" means the manuals to be prepared by the Vendor
and delivered to the Owner pursuant to subsections 2.20, 2.22 and 2.23
containing detailed procedures and specifications for the operation of the
System and/or any part thereof.
"Operative" has the meaning ascribed thereto in subsection 27.26.
"Optional AS Services" means those AS services classified as
optional, as set forth in Appendix G, which are only provided to the Owner upon
the request of the Owner.
"Optional Software Features" means Software features for PCS
Products available to Customers on an optional, separate fee, basis. The initial
fees for such Optional Software Features are not included in Annual Release
Maintenance Fees.
"OTAF" means the collective reference to SPARC/OTAF and SCP/OTAF.
"OTAF Acceptance Test Period" means the applicable period of time
in days that the Vendor has to test and the Owner has to accept certain OTAF
Products and Services (in each case as applicable to the SCP/OTAF Products and
Services and the SPARC/OTAF Products and Services) as specified in the OTAF
Statement of Work.
"OTAF Completion Dates" means the dates and milestones as set forth
in Appendix M that are required to be met by the Vendor for the successful and
timely completion of the OTAF Statement of Work (in each case as applicable to
the SCP/OTAF Products and Services and the SPARC/OTAF Products and Services).
"OTAF Equipment" means the collective reference to the SCP/OTAF
Equipment and the SPARC/OTAF Equipment.
"OTAF Field Acceptance" means the Owner's initial acceptance of
OTAF Products and Services (in each case as applicable to the SCP/OTAF Products
and Services and the SPARC/OTAF Products and Services) and the installation
thereof, pursuant to and in accordance with the OTAF Field Acceptance Tests (in
each case as applicable to the SCP/OTAF Products and Services and the SPARC/OTAF
Products and Services) set forth in Appendix P.
"OTAF Field Acceptance Test" and "OTAF Field Acceptance Testing"
means the initial field tests performed pursuant to and in accordance with
Appendix P during the OTAF Acceptance Test Period to determine whether the OTAF
Products and Services meet the requirements and specifications set forth in the
OTAF Statement of Work (in each case as applicable to the SCP/OTAF Products and
Services and the SPARC/OTAF Products and Services).
"OTAF Final Acceptance" means the Owner's final acceptance of the
relevant OTAF Products and Services (in each case as applicable to the SCP/OTAF
Products and Services and the SPARC/OTAF Products and Services) and installation
thereof, pursuant to and in accordance with the OTAF Final Acceptance Tests set
forth in Appendix P; provided that in no event can OTAF Final Acceptance occur
with respect to any OTAF Products and Services prior to thirty (30) days after
the completion of OTAF Final Acceptance Testing applicable thereto.
"OTAF Final Acceptance Tests" and "OTAF Final Acceptance Testing"
means the OTAF Products and Services final acceptance testing as set forth in
Appendix P (in each case as applicable to the SCP/OTAF Products and Services and
the SPARC/OTAF Products and Services).
"OTAF Maintenance and Instruction Manuals" has the meaning ascribed
thereto in subsection 2.22.
"OTAF Operating Manuals" has the meaning ascribed thereto in sub-
section 2.20.2.
"OTAF Price" means the aggregate price set forth in Appendix O for
all of the SCP/OTAF Products and Services to be provided under the Contract and
described in the OTAF Statement of Work.
"OTAF Product Warranty Period" has the meaning ascribed thereto in
subsection 17.1.2.
"OTAF Products" means the collective reference to SCP/OTAF Products
and SPARC/OTAF Products.
"OTAF Services" means those services provided by the Vendor as part
of the provision, installation and continuing operation and maintenance of the
SPARC/OTAF Products and/or the SCP/OTAF Products, as the case may be, pursuant
to and in accordance with the OTAF Statement of Work.
"OTAF Software" means the collective reference to the SCP/OTAF
Software and the SPARC/OTAF Software.
"OTAF Statement of Work" means the over-the-air provisioning
functionality requirements, specifications and milestones as set forth in
Appendix M.
"Other Vendors" means vendors, other than the Vendor, with whom the
Owner has entered, or may enter in the future, into a contract for the provision
of products and services for the engineering and construction of any portion of
the Nationwide Network. Other Vendors does not include any Subcontractors in
connection with the Work to be performed under this Contract in their capacity
as Subcontractors.
"Outage" has the meaning ascribed thereto in subsection 17.4(b).
"Owner" has the meaning ascribed thereto in the prefatory paragraph
to this Contract.
"Owner Loss" means an insured loss incurred by the Owner relating
to the System.
"Owner's Succeeding Entity" has the meaning ascribed thereto in
subsection 27.22.
"Parties" has the meaning ascribed thereto in the prefatory para-
graph to this Contract.
"Patent License" has the meaning ascribed thereto in subsection
14.5.
"P1 Major Condition ("P1")" has the meaning ascribed thereto in
subsection 2.26.3(g).
"P2 Significant Problem ("P2")" has the meaning ascribed thereto in
subsection 2.26.3(g).
"P3 Minor Problem ("P3")" has the meaning ascribed thereto in sub-
section 2.26.3(g).
"Partners" means the collective reference to Sprint Corporation, a
Delaware corporation, Sprint Enterprises, L.P., a Delaware limited partnership
("Sprint"), TeleCommunications Inc., a Delaware corporation, TCI Telephony
Services, Inc., a Colorado corporation ("TCI"), Comcast Corporation, a Delaware
corporation, Comcast Telephony Services, a Delaware general partnership
("Comcast"), ▇▇▇ Communications, Inc., a Delaware corporation and Cox Telephony
Partnership, a Delaware general partnership ("Cox").
"PCS" means personal communication services authorized by the FCC.
"PCS FCC Licenses" has the meaning ascribed thereto in the recitals
of this Contract.
"PCS Products" means the Vendor's PCS Equipment and Software, as
offered from time to time in the Customer Price Guide; provided that for the
purposes of this Contract, PCS Products will always (subject to subsection 10.1)
include at least (i) the SCP/HLRs, (ii) the SCP/HLR Products, (iii) the AM/HLR
(to the extent not already a PCS Product), (iv) SMS, (v) SCE, (vi) the AS
Products, (vii) the OTAF Products (viii) the Actiview Products, (ix) the TCUs
and/or the HCUs as the case may be, and (x) those other Items listed on the
Vendor's Customer Price Guide as of the Effective Date. As the context requires
and notwithstanding the above, the term PCS Products includes all Vendor
manufactured Products provided to the Owner in connection with its obligations
pursuant to the terms of this Contract, but excludes Items furnished solely as
part of Facilities Preparation Services not otherwise integral to the operation
or maintenance of the PCS Items set forth on the Customer Price Guide, including
Non-Essential Equipment.
"PCS Sub-System" means all Products and other equipment, tools and
software, all System Elements Sites and any property located thereat necessary
or desirable to provide PCS in a System Sub-Area.
"PCS Sub-System Percentage" has the meaning ascribed thereto in
subsection 17.4(c).
"PCS Sub-System Specific Outage" has the meaning ascribed thereto
in subsection 17.4(c).
"PCS System" means all Products and other equipment, tools and
software, all System Element Sites and any property located thereat necessary or
desirable to provide PCS in a given specified System Area. Each PCS System is
and will be inclusive of all PCS Sub-Systems, if any, within such PCS Systems.
"Permitted Transaction" has the meaning ascribed thereto in sub-
section 27.23.
"Person" means an individual, partnership, limited partnership,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity of whatever
nature.
"PhillieCo" means PhillieCo L.P., a Delaware limited partnership.
"PhillieCo Contract" means that certain Procurement and Services
Contract between PhillieCo L.P., a Delaware limited partnership and the Vendor,
as the same may be amended, supplemented or otherwise modified from time to
time.
"PhillieCo System" means the System, as defined in the PhillieCo
Contract.
"Preliminary RF Design" means an RF Engineering design which
incorporates as many prequalified System Element Locations (including existing
structures and other sites provided by Site Acquisition that have a high
likelihood of meeting the zoning requirements) as possible without compromising
the quality of the System or System Element Location counts, design grids,
signal level plots and prequalified site map overlays for each of the System
Areas and System Sub-Areas. The Preliminary RF Design must also include those
Items listed on Schedule 1. The Preliminary RF Design must be based upon all
information reasonably available to the Vendor or provided to the Vendor by the
Owner as of the Effective Date including, but not limited to, the information
set forth in this Contract.
"Product Contract Price" means, at the time of determination, the
Contract Price minus the costs applicable to and actually invoiced to such date
by the Owner pursuant to and in accordance with Section 6 for Facilities
Preparation Services and RF Engineering.
"Product Warranty Period" has the meaning ascribed thereto in sub-
section 17.1(a).
"Products" means the collective reference to the PCS Products, the
Equipment and the Software provided by the Vendor or any Subcontractor pursuant
to and in accordance with the terms of this Contract.
"Project Milestones" means the collective reference to the mile-
stone dates and intervals set forth in Exhibits A1 and A2. Each a "Milestone."
"Proprietary Information" has the meaning ascribed thereto in sub-
section 27.19(a).
"Punch List" means that list prepared in conjunction with the
Acceptance Tests and included in any Acceptance Certificate, which contains one
or more immaterial non-service-affecting items (specifying the cost of
completing such items either determined as of the date of the Substantial
Completion of the relevant PCS System or PCS Sub-System or within a reasonable
time thereafter) which have not been fully completed by the Vendor as of the
Substantial Completion of any PCS System or PCS Sub-System; provided that such
incomplete portion of the Work will not, during its completion, materially
impair the normal daily operation of such PCS System or PCS Sub-System in
accordance with the Specifications.
"Reviewers" has the meaning ascribed thereto in subsection 2.14.
"RF" means radio frequency.
"RF Engineering" means radio frequency engineering required in
connection with the architectural design of the System and/or any PCS System
and/or any PCS Sub-System.
"RFP" has the meaning ascribed thereto in subsection 11.9.1(a).
"RTM License" has the meaning ascribed thereto in subsection 11.6.
"RTU License" has the meaning ascribed thereto in subsection 11.1.
"SCE" means the Service Creation Environment Equipment and Software
as further described in Appendix B.
"SCP/HLR" means the Equipment and Software that provide the call
processing logic which comprises the stand-alone HLR service which contains the
PCS subscriber's or group of PCS subscriber's profile data used to provide call
completion and enhanced services and further described in Appendix B.
"SCP/HLR Hardware" means the SCP/HLR Equipment and platform
Software as set forth in Appendix B.
"SCP/HLR Price" means the aggregate price for all of the SCP/HLRs
as set forth on Appendix F.
"SCP/HLR Products" means the collective reference to SCP/HLR
Hardware, and SCP/HLR Software, SMSs, SCEs and RTUs.
"SCP/HLR Services" means those Services provided by the Vendor to
the Owner pursuant to and in accordance with the HLR Statement of Work, the
AM/HLR Specifications and the SCP/HLR Specifications.
"SCP/HLR Specifications" means the SCP/HLR specifications as set
forth in Appendix B and including, but not limited to, the specifications for
the SCE and the SMS.
"SCP/HLR Software" means the SCP/HLR Software as more fully
described in Appendix B.
"SCP/OTAF" means those Service Control Point ("SCP") OTAF Products
and Services provided by the Vendor to the Owner as further detailed in Appendix
M.
"SCP/OTAF Software" means the SCP based software for over-the-air
provisioning functionality provided to the Owner by the Vendor pursuant to and
in accordance with the OTAF Statement of Work.
"SCP/OTAF Equipment" means the equipment and hardware provided to
the Owner by the Vendor as necessary for the operation and integration of the
SCP/OTAF Software and the SCP/OTAF Services pursuant to and in accordance with
the OTAF Statement of Work. "Services" means the collective reference to all of
the services to be conducted by the Vendor as part of the Work pursuant to the
terms of this Contract including, but not limited to, Installation, Facilities
Preparation Services, RF Engineering, System Maintenance Support, System Support
Services and other repair and maintenance services, performed in accordance with
the terms of this Contract including, but not limited to, the Specifications.
Services does not include Site Acquisition, Network Interconnection or Microwave
Relocation.
"Services Warranty Period" has the meaning ascribed thereto in sub-
section 17.2(b).
"Site Acquisition" means the services to be performed by the Owner
and/or its subcontractors necessary for identifying and acquiring sufficient
rights to the System Element Locations within the System Areas and System
Sub-Areas including all requisite zoning approvals and all building approvals
required by any Governmental Entity; provided that Site Acquisition does not
include any of the Site Plan Architectural Work or the Facilities Engineering.
"Site Acquisition Delay Period" has the meaning ascribed thereto in
subsection 2.41.
"Site Acquisition Substantial Completion" means, with respect to
any PCS System or PCS Sub-System, the point at which the Owner will have
acquired, by purchase, lease or otherwise, rights to a sufficient number of
System Element Locations within the specified System Area or System Sub-Area to
be covered by such PCS System or PCS Sub-System such that the performance
criteria specified in Exhibit F applicable to such PCS System or PCS Sub-System
would be substantially satisfied in the reasonable opinion of the Owner subject
to the reasonable acceptance of the Vendor. If the Vendor upon receiving notice
from the Owner that Site Acquisition Substantial Completion has been achieved in
any PCS System or PCS Sub-System disagrees with the Owner's claim, then the
Vendor will have ten (10) Business Days to detail its disagreement in writing to
the Owner and a Third Party Engineer chosen by the Owner and such Third Party
Engineer will have ten (10) Business Days from the receipt of such writing to
make a determination whether or not the Owner's claim of Site Acquisition
Substantial Completion is reasonable. The Third Party Engineer will have no
discretion or authority to provide the Parties with any answer other than
whether in its judgment the Owner's claim is reasonable. Such determination by
the Third Party Engineer will be final and binding upon the Parties.
"Site Acquisition Substantial Completion Date" means with respect
to any PCS System or PCS Sub-System the date on which the Owner will have
achieved Site Acquisition Substantial Completion.
"Site Plan Architectural Work" means the preparation of
architectural and/or engineering drawings, plans and/or specifications necessary
to obtain zoning permits and/or approvals, building permits and/or approvals
and/or conditional use permits for any given System Element Facility.
"SMS" means the service management system equipment and software
described in Appendix B.
"Software" means (a) all computer software furnished hereunder for
use with any Equipment including, but not limited to, computer programs
contained on a magnetic or optical storage medium, in a semiconductor device, or
in another memory device or system memory consisting of (i) hardwired logic
instructions which manipulate data in central processors, control input-output
operations, and error diagnostic and recovery routines, or (ii) instruction
sequences in machine-readable code furnished hereunder that control call
processing, peripheral equipment and administration and maintenance functions,
(b) any Software Enhancements, Software features and Software Upgrades furnished
by the Vendor to the Owner hereunder, and (c) any Documentation furnished
hereunder for use and maintenance of the Software; provided that no Source Code
versions of Software are included in the term Software.
"Software Combined Release" means a Software Upgrade which is at
any time combined with any Software Enhancement.
"Software Enhancements" means modifications or improvements made to
the Software relating to PCS Products which improve performance or capacity of
the Software or which provide additional functions to the Software.
"Software Licenses" means the collective reference to the RTU Li-
cense and the RTM License.
"Software Revision Level" means each version of Software that
reflects any amendment, modification or change from the immediately preceding
version.
"Software Upgrades" means periodic updates to the Software issued
by the Vendor to the Owner under Warranty and Software maintenance obligations
to correct Defects or Deficiencies in the Software relating to PCS Products.
"Sony/Qualcomm Agreement" has the meaning ascribed thereto in sub-
section 2.3(a).
"Source Code" means Software in human-readable form and all
documentation, such as flow charts, schematics and annotations, that comprise
the precoding detailed design specifications (which constitutes the "embodiment
of the intellectual property" of the Software (excluding Third Party Software)
as such concept is referenced in Section 365(n) of the United States Bankruptcy
Code, as amended), which is necessary to enable the Owner to maintain and modify
the Software in accordance with the licenses granted in this Contract.
"SPARC" means certain Sun System workstation equipment.
"SPARC/OTAF" means those SPARC OTAF Products and Services provided
by the Vendor to the Owner as further detailed in Appendix M.
"SPARC/OTAF Equipment" means the equipment and hardware provided to
the Owner by the Vendor as necessary for the operation and integration of the
SPARC/OTAF Software and the OTAF Services pursuant to and in accordance with the
SPARC/OTAF Statement of Work.
"SPARC/OTAF Software" means the SPARC based software for
over-the-air provisioning functionality provided to the Owner by the Vendor
pursuant to and in accordance with the OTAF Statement of Work.
"Specifications" means the collective reference to the
specifications and performance standards of the design, Facilities Preparation
Services, Engineering, Products, Installation and Services contemplated by this
Contract and includes any Expansions, amendments, modifications and/or other
revisions thereto made in accordance with the terms of this Contract and as more
fully set forth in Exhibits C, D, E and F and in the AM/HLR Specifications, the
SCP/HLR Specifications, the HLR Statement of Work, the AS Statement of Work, the
OTAF Statement of Work and the Actiview Statement of Work or as otherwise
determined hereunder pursuant to the terms of the Contract; provided that,
except as otherwise provided in or determined pursuant to the Contract or as
otherwise mutually agreed between the Parties, the applicable Specifications for
an Item will be the Vendor's or other manufacturer's standard technical
specifications for such Item, as applicable, unless the Owner will have
specifically not agreed with such Vendor or other manufacturer specification;
and provided further, that with respect to Facilities Preparation Services,
design, Engineering, Products, Installation and Services for which
specifications and performance standards are not provided and listed in such
Exhibits (such Exhibits including, but not limited to, the AM/HLR
Specifications, SCP/HLR Specifications, the HLR Statement of Work, the AS
Statement of Work, the OTAF Statement of Work and the Actiview Statement of
Work), "Specifications" refers to performance, functionality and fitness for the
intended purpose in which such design, Facilities, Preparation Services,
Engineering, Products, Installation and Services are employed.
"Structural Architectural Work" means the preparation of all
architectural drawings and blueprints relating to the structural specifications
for a System Element Facility.
"Subcontractor" means a contractor, vendor, supplier, licensor or
other Person, having a direct or indirect contract with the Vendor or with any
other Subcontractor of the Vendor who has been hired specifically to assist the
Vendor in certain specified areas of its performance of its obligations under
this Contract including, without limitation, performance of any part of the
Work.
"Substantial Completion" means the point at which the Vendor has
completed a portion of the Work other than specified Items set forth on
applicable Punch Lists such that the geographic areas of any System Area and/or
System Sub-Areas as specified in Schedule 4 all have been covered to the extent
set forth in Schedule 4, in accordance with the Specifications and the System
Standards and as verified to the Owner in accordance with the criteria and
requirements set forth in Exhibit B3.
"Substantial Completion Certificate" means, with respect to a given
PCS System and/or PCS Sub-System, a document submitted by the Vendor to the
Owner and signed by an authorized representative of the Owner and an authorized
officer of the Vendor stating that the Vendor has successfully completed the
Acceptance Tests applicable to the Substantial Completion of the Work to be done
in such PCS System and/or PCS Sub-System, as the case may be, in accordance with
the requirements of Exhibit B3.
"Successor" has the meaning ascribed thereto in subsection 27.22.
"Switch Site" means the System Element Location designated by the
Owner as the site in which it wants the MSC(s) to be Installed in any given PCS
System.
"Switch Site Notice" has the meaning ascribed thereto in subsection
2.6(d).
"Switch Site Notice Date" has the meaning ascribed thereto in sub-
section 2.6(d).
"Switch Site Ready Date" has the meaning ascribed thereto in sub-
section 2.6(d).
"System" means all of the PCS Systems and PCS Sub-Systems built by
the Vendor in the System Areas and System Sub-Areas allocated to the Vendor
pursuant to the terms of this Contract and as set forth on Schedule 4.
"System Areas" has the meaning ascribed thereto in the recitals to
this Contract.
"System Element" means the Equipment and Software required to
perform radio, switching and/or functions for the System and/or any PCS System
and/or any PCS Sub-System (which may include, without limitation, Base Station
("BTS"), Equipment Identity Register ("EIR"), Messaging System ("MXE"), Mobile
Switching Center/Visitor Location Register ("MSC/VLR"), Mobile Service Node
("MSN"), Signal Transfer Point ("STP"), Home Location Register ("HLR"), Service
Control Point ("SCP"), Intelligent Peripheral ("IP") and Access Manager ("AM")).
"System Element Facility" means the structures, improvements,
foundations, towers, and other facilities necessary to house or hold any System
Element and any related Equipment to be located at a particular System Element
Location.
"System Element Location" means the physical location for a System
Element.
"System Element Site" means the collective reference to a
particular System Element, together with the related System Element Location and
System Element Facility.
"System Element Verification" means the Vendor's laboratory level
testing on the Products conducted by the Vendor in accordance with Exhibit B3.
"System Maintenance Support" means those Services offered by the
Vendor for maintenance of any of the Products and/or any System Element or
collection thereof.
"System Managers" means each of the managers designated by the
Owner and the Vendor, respectively, for the purposes of subsection 23.1.
"System Standards" means the collective reference to the industry
standards specified in Exhibits C, D, F, G and H.
"System Sub-Areas" has the meaning ascribed thereto in the recitals
to this Contract.
"System Support Services" means those services offered by the
Vendor relating to System design, enhancement and optimization.
"System Warranty Period" has the meaning ascribed thereto in sub-
section 17.3.
"TCG" means the collective reference to Teleport Communications
Group, Inc. and TCG Partners.
"TCUs" means the Two Channel Card Units which currently carry two
voice paths in the existing cells.
"Technical Documentation" means the documentation identified as
such in the Specifications.
"Term" has the meaning ascribed thereto in subsection 5.2.
"Test-bed Laboratory" has the meaning ascribed thereto in subsec-
tion 2.5.
"Third Party Engineer" means any one of the Persons listed on
Schedule 14.
"Third Party Software" means Software which is independently
developed by a third party, sublicensed to the Owner under this Contract or
otherwise provided with the Products in accordance with the Specifications.
"Training" has the meaning ascribed thereto in subsection 2.23.
"Trouble Report ("TR")" has the meaning ascribed thereto in sub-
section 2.26.2.
"United States" means the fifty states of the United States and the
District of Columbia.
"Utilities Work" means the installation of electric and telephone
utilities at the System Element Locations.
"Vendor" has the meaning ascribed thereto in the prefatory para-
graph to this Contract.
"Vendor-Controlled Location" has the meaning ascribed thereto in
subsection 2.12.
"Vendor Developments" has the meaning ascribed thereto in subsec-
tion 2.11.1.
"Vendor Event of Default" has the meaning ascribed thereto in sub-
section 24.2.
"Vendor Patents" has the meaning ascribed thereto in subsection
14.5.
"Vendor procedural error" has the meaning ascribed thereto in sub-
section 17.4(c).
"Vendor's Succeeding Entity" has the meaning ascribed thereto in
subsection 27.22.
"Warranty Damages" has the meaning ascribed thereto in subsection
17.4(c).
"Warranty Periods" means the collective reference to the Product
Warranty Period, the Services Warranty Period and the System Warranty Period.
"Work" means all phases of this Contract, including, as required by
the terms of this Contract, engineering and design, procurement, manufacture,
construction and erection, installation, training, start-up (including
calibration, inspection and start-up operation), testing and start-up and
testing operation with respect to the System and/or any PCS System and/or any
PCS Sub-System and/or any part thereof to be performed by the Vendor or its
Subcontractors pursuant to this Contract. As required by the terms of this
Contract, Work includes (i) all labor, materials, equipment, services, and any
other items to be used by the Vendor or its Subcontractors in the prosecution of
this Contract, wherever the same are being engineered, designed, procured,
manufactured, delivered, constructed, installed, trained, erected, tested,
started up or operated during start-up and testing and whether the same are on
or are not on any System Element Location or any other site within the System
and/or any PCS System and/or any PCS Sub-System and (ii) all related items which
would be required of a contractor of projects of comparable size and design
which are necessary for the System and/or any PCS System and/or any PCS
Sub-System and/or any part thereof to (x) operate in accordance with all
Applicable Laws and Applicable Permits, and (y) provide the operating personal
communications service systems required pursuant to this Contract. The Vendor
will be responsible for providing in accordance with the terms of this Contract
any and all additional items and services which are not expressly included by
the terms of this Contract and which are reasonably required for construction
and start-up of the System and/or any PCS System and/or any PCS Sub-System.
1.2 Other Definitional Provisions. (a) When used in this Contract,
unless otherwise specified herein, all terms defined in this Contract will have
the defined meanings set forth herein. Terms defined in the Exhibits are deemed
to be terms defined herein; provided that in the case of any terms that are
defined both in this Contract (excluding Exhibits) and/or an Exhibit, the
definitions contained in this Contract will supersede such other definitions for
all purposes of this Contract; provided further, that definitions contained in
any Exhibit will control as to such Exhibit.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Contract refer to this Contract as a whole and
not to any particular provision of this Contract and Section, subsection,
Schedule and Exhibit references are to this Contract unless otherwise specified.
(c) The meanings given to terms defined in this Contract are
equally applicable to both the singular and plural forms of such terms.
(d) Notwithstanding anything to the contrary, the provisions of
subsections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9(b), 2.10, 2.25, 2.38, 2.40, 2.41,
6.4, 6.5, 6.7, 6.8, and 7.1 and Section 4 are not applicable to (i) AS Products
and AS Services and (ii) Actiview Products and Actiview Services.
SECTION 2 SCOPE OF WORK, RESPONSIBILITIES AND PROJECT
2.1 Scope of Work. Upon the terms and conditions herein set forth,
the Vendor will provide all Products and Services to the Owner required for the
establishment of the System including, but not limited to, the Vendor's
obligation to engineer, equip, install, build, test and service the PCS Systems
and the PCS Sub-Systems in the System Areas and System Sub-Areas set forth on
Schedule 4 in accordance with the Specifications and that otherwise satisfies
all conditions of Final Acceptance; provided, that the Vendor will not be
responsible for Site Acquisition (except to the extent certain Facilities
Preparation Services, including Site Plan Architectural Work, are required for
the successful completion of Site Acquisition), Network Interconnection or
Microwave Relocation. The Vendor must complete the Work in accordance with the
Project Milestones set forth in Exhibit A1 and as further specified herein. The
Vendor must furnish all labor, materials, tools, transportation and supplies
required to complete the Work in accordance with the Specifications and the
terms of this Contract. For the purposes of this Contract, it is expressly
understood and agreed between the Parties that certain PCS Systems (the System
Areas of which are set forth on Schedule 4) are divided into PCS Sub-Systems
(the System Sub-Areas of which are set forth on Schedule 4) and that any such
PCS System that is so divided shall not be deemed to work and/or operate in
accordance with the terms of this Contract, including, but not limited to, the
Specifications, until and unless all of the PCS Sub-Systems within such PCS
System work in accordance with the Specifications.
2.2 Additional Coverage. (a) The Owner has the option from time to
time, upon not less than thirty (30) days written notice to the Vendor, to
designate additional geographic areas in the United States, including, but not
limited to, additional System Sub-Areas and/or System Areas, as to which the
Owner may purchase from the Vendor some or all, as determined by the Owner in
its sole discretion, of the Products and Services required for the PCS coverage
of such areas as provided for in this Contract, all on the terms and conditions
set forth in this Contract; provided that the Parties will mutually agree in
good faith on the payment terms (provided that pricing will be as set forth in
this Contract), liquidated damages, Project Milestones and the System
performance criteria applicable to such additional coverage pursuant to this
subsection 2.2; and provided further that any such agreement on (i) such Project
Milestones must be based on substantially the same intervals (including, but not
limited to, the number of days specified in each such interval) as are set forth
in Exhibits A1 and A2, to the extent possible, (ii) such payment terms and
liquidated damages must be based on substantially the same terms as are
otherwise set forth in this Contract, and (iii) such System performance criteria
must be based on substantially the same System performance criteria as are set
forth in Exhibit F, to the extent possible. The Parties agree that this
subsection 2.2(a) will be effective at any time during the Term of this Contract
as to the determination of payment terms (other than pricing) and Project
Milestones applicable to the Vendor's provision of additional coverage pursuant
to this subsection 2.2(a) only if (i) the aggregate price of the Products and
Services to be provided by the Vendor at such time under this subsection 2.2(a)
is at such time at least five million dollars ($5,000,000) and (ii) the Vendor
is at such time providing Installation Services and at least one other Service
provided for under this Contract in connection with such additional coverage
provided by the Vendor at any time during the Term of this Contract pursuant to
this subsection 2.2(a). Unless otherwise mutually agreed among the Parties, the
payment terms for additional Products provided by the Vendor after Final
Acceptance of the last PCS System within the Initial System not otherwise
covered by or otherwise determined pursuant to this subsection 2.2(a) will be
subject to the terms of Section 6.
(b) The Owner has the option from time to time upon not less than
thirty (30) days' prior written notice to the Vendor and in accordance with the
applicable change order provisions of subsection 7.2, to require the Vendor to
increase the level of capacity or coverage of an already allocated PCS System
and/or PCS Sub-System (whether such PCS System or PCS Sub-System has been so
allocated pursuant to Schedule 4 or subsection 2.2(a)), all on the terms and
conditions of this Contract. From time to time prior to the Substantial
Completion of the given PCS System which would be so affected, the Owner will
have the right to, upon thirty (30) days prior written notice to the Vendor,
divide an applicable System Area into separate System Sub-Areas for the
build-out of separate PCS Sub-System(s) not indicated on Schedule 4 as of the
Effective Date; provided that such additional PCS Sub-System will at least meet
the requirements set forth in clauses (i) and (ii) of the second to last
sentence of subsection 2.2(a) above. In such event, such a newly created PCS
Sub-System will, from such point forward, be treated as a PCS Sub-System
pursuant to the terms of this Contract.
(c) Where the Owner wishes to purchase PCS Products or Services for
use and/or application in a country outside the United States but within North
America including any territory of the United States not otherwise covered by
the definition of the "United States" as set forth herein, the Owner and the
Vendor will, in good faith, negotiate a separate agreement for such purchase
upon substantially all of the same terms set forth in this Contract, with only
such modifications as may reasonably be appropriate to reflect the international
nature of such transaction and to assure protection of the Vendor's intellectual
property. The PCS Product and Software prices and price discounts set forth in
this Contract will prevail in any such separate agreement, subject only to
reasonable pricing adjustments which will be in no event ten percent (10%)
higher than the prices set forth in or determined pursuant to this Contract plus
foreign import duties and taxes. Any such agreement may, at the Vendor's option,
be entered into by any of the subsidiaries or other affiliates of the Vendor as
listed on Schedule 13.
2.2.1 AS Products and AS Services Additional Coverage. Where the
Owner wishes to purchase AS Products or AS Services for use and/or application
in a country outside the United States but within North America including any
territory of the United States not otherwise covered by the definition of the
"United States" as set forth herein, the Owner and the Vendor will, in good
faith, negotiate a separate agreement for such purchase upon substantially all
of the same terms set forth in this Contract, with only such modifications as
may reasonably be appropriate to reflect the international nature of such
transaction and to assure protection of the Vendor's intellectual property
applicable to such AS Products and AS Services.
2.3 Handsets. (a) The Vendor must supply the Owner with two
thousand (2,000) subscriber handsets at the prices set forth on Schedule 2 and
substantially meeting the applicable criteria set forth in Exhibit H within
sixty (60) days prior to the Substantial Completion of the Initial PCS System in
accordance with Exhibit B3; provided that the criteria set forth in Exhibit H
will substantially conform to the applicable specifications and/or criteria (but
which will in no event be more than what is required by Exhibit H) agreed
between the Owner and Sony/Qualcomm (the "Sony/Qualcomm Agreement").
(b) The Vendor must supply at the prices set forth on Schedule 2
one hundred (100) handsets per PCS System within the Initial System, acceptable
to the Owner, and the necessary equipment related thereto for testing and
operation of each such PCS System pursuant to, and in accordance with, the terms
of this Contract, Exhibit B3 and substantially in accordance with Exhibit H to
the extent applicable; provided however, with the consent of the Owner, which
consent will not be unreasonably withheld, such handsets will not be required to
be in substantial compliance with the criteria set forth in Exhibit H if they
will otherwise be sufficient to test and accurately demonstrate that the PCS
System meets the Specifications. The one hundred (100) for each PCS System
handsets required to be delivered by the Vendor pursuant to the immediately
preceding sentence will be delivered to the Owner on or before Milestone 7 (as
set forth in Exhibit A1) for the first PCS Sub-System completed in such PCS
System.
(c) Notwithstanding any other provision of this Contract, including
Section 17, the Vendor does not warrant the handsets provided hereunder, but to
the extent that the Vendor is authorized to do so by the terms of any applicable
agreement or agreements with such third party suppliers, the Vendor will assign
or otherwise transfer any warranty received from its supplier(s) of the handsets
to the Owner at no additional cost to the Owner. For the purposes of this
Contract a supplier of handsets to the Vendor will not be deemed a
Subcontractor.
2.4 Initial PCS System. Pursuant to Exhibit B3, the Vendor must
achieve Substantial Completion of the Initial PCS System in accordance with the
requirements of Exhibit B3 prior to, and as a condition of, the Substantial
Completion of any other PCS System and/or PCS Sub-System within the Initial
System. This requirement in no way relieves the Vendor of its obligations prior
to the Substantial Completion of the Initial PCS System to continue with the
Work on all of the PCS Systems and PCS Sub-Systems constituting the Initial
System in accordance with the requirements of this Contract and the Project
Milestones applicable to each such PCS System and/or PCS Sub-System.
2.5 System Element Verification; Test-bed Laboratory. (a) In
accordance with Milestone 4 (as set forth on Exhibit A1) the Vendor must
successfully complete System Element Verification pursuant to the terms of this
Contract including, but not limited to, the Specifications and Exhibit B3 no
later than August 19, 1996.
(b) The Vendor will supply, at no additional cost to the Owner
(except as provided in Exhibit I), the Products and Services necessary for the
establishment of a test-bed laboratory, which laboratory will include the
Products and Services set forth on Exhibit I (the "Test-bed Laboratory"). Such
Products and Services will be subject to the applicable warranty terms of this
Contract. The Vendor will provide all relevant Software Upgrades, Software
Enhancements and Software Combined Releases applicable to the Test-bed
Laboratory. Equipment Upgrades, Equipment Enhancements and Equipment Combined
Releases will be available for the Test-bed Laboratory as provided in this
Contract. The Test-bed Laboratory will be provided by the Vendor in accordance
with Milestone 3 applicable to the Initial PCS System as set forth on Exhibit
A1, but in no event will the Vendor be required to provide the Test-bed
Laboratory earlier than ninety (90) days after the building site for such
laboratory has been made ready by the Owner and the Vendor has received the
Owner's notice thereof, provided that such notice will not be delivered to the
Vendor before April 19, 1996 (the "Building Ready Date"). The Owner expressly
agrees that it will not use the Test-bed Laboratory for In Revenue Service or
any purpose other than testing without the prior written consent of the Vendor,
which consent the Vendor will not unreasonably withhold or delay.
(c) The Vendor will supply (and Exhibit I will be deemed to
include), at no cost to the Owner, (i) one mated pair SCP/HLRs with one SMS,
(ii) one SCE with eight RTUs, (iii) one AM/HLR, (iv) one source code compiler
and (v) one copy of "Execution Environment" all in accordance with and pursuant
to the Specifications for the Test-bed Laboratory no later than the dates
specified in the HLR Statement of Work. All provisions of subsections 2.5(a) and
2.5(b) above will apply similarly to the Products listed in this subsection
2.5(c). Nothing in this subsection 2.5(c) will be deemed to release or
accelerate the Project Milestones and/or delivery requirements set forth in
subsections 2.5(a) and 2.5(b) above.
(d) The Vendor will supply (and Exhibit I will be deemed to
include), at not cost to the Owner (i) a SPARC/OTAF Product platform (consisting
of at least two (2) CPUs) plus accompanying OTAF Software and OTAF Equipment all
in accordance with and pursuant to the Specifications for the Test-bed
Laboratory no later than October 23, 1996 and (ii) SCP/OTAF Software all in
accordance with and pursuant to the Specifications for the Test-bed Laboratory
no later than May 15, 1997. All provisions of subsections 2.5(a) and 2.5(b)
above will apply similarly to the Products listed in clauses (i) and (ii) above
provided by the Vendor pursuant to this subsection 2.5(d). Nothing in this
subsection 2.5(d) will be deemed to release or accelerate the project Milestones
and/or delivery requirements set forth in subsections 2.5 (a) and 2.5 (b) above.
(e) The Vendor will supply (and Exhibit I will be deemed to
include) at no cost to the Owner and simultaneous with each release of Actiview
Software, an installed copy of such Actiview Software for the Test-bed
Laboratory all in accordance with and pursuant to the Specifications. All
provisions of subsections 2.5(a) and 2.5(b) above will apply similarly to the
Products listed in the first sentence of this subsection 2.5(e) provided by the
Vendor pursuant to this subsection 2.5(e). Nothing in this subsection 2.5(e)
will be deemed to release or accelerate the project Milestones and/or delivery
requirements set forth in subsections 2.5 (a) and 2.5 (b) above.
2.6 RF Engineering; Site Acquisition and MSC Installation. (a) In
accordance with Milestone 2 as set forth on Exhibit A1, the Vendor has delivered
to the Owner the Preliminary RF Design for each of the System Areas and System
Sub-Areas in accordance with the requirements and criteria set forth in Exhibit
B1 and Schedule 1. The Vendor has provided the Owner with the applicable search
rings for each PCS Sub-System based upon the Preliminary RF Design. The Owner
and the Vendor agree to cooperate with each other to complete the RF Engineering
and the Site Acquisition. The Owner must notify the Vendor of desired coverage
areas, RF Engineering parameters or other information or restrictions the Owner
wishes to be included in the Final RF Engineering Plan for each PCS System
and/or PCS Sub-System. In accordance with Exhibit B1, the Vendor will do the RF
Engineering in each of the PCS Systems and/or PCS Sub-Systems and in connection
therewith will use the parameters, information and restrictions supplied by the
Owner. As part of the RF Engineering, the Vendor will establish "search rings"
in each of the PCS Systems and/or PCS Sub-Systems that will specify areas in
which the Owner may proceed with Site Acquisition.
(b) In accordance with Exhibit B1 the Vendor, at its request, must
be kept informed of the progress made on ongoing Site Acquisition within each
System Area and System Sub-Area. As the Site Acquisition progresses, the Vendor
agrees to regularly alter the RF Engineering plan to determine a new search ring
or rings to take into account any changes or modifications requested by the
Owner or otherwise requested by the Owner due to the Owner's inability to
acquire sufficient rights to a location which could constitute a System Element
Location in a timely or economic manner. When making changes to the RF
Engineering plan the Vendor must take into account the Site Acquisition already
completed by the Owner.
(c) Milestone 5 (as set forth in Exhibit A1) will be achieved in
each PCS System and PCS Sub-System in accordance with this subsection 2.6(c);
provided that for each PCS System and PCS Sub-System the appropriate MSCs have
been installed by the Vendor in the Owner's relevant Switch Sites within each
such PCS System and PCS Sub-System in accordance with subsection 2.6(d) below.
In accordance with the Project Milestones set forth on Exhibit A1 and the
requirements and criteria set forth in Exhibit B1, within five (5) days of the
Owner achieving Site Acquisition Substantial Completion within any System Area
or System Sub-Area (the "Final RF Review Period"), the Owner and the Vendor will
use their best efforts to agree on a final System Element Location count (the
"Final Site Count") and a final RF Engineering plan (the "Final RF Engineering
Plan") for such System Area or System Sub-Area, as the case may be, upon which
the PCS System for such System Area and/or System Sub-Area, as the case may be,
will be built by the Vendor. Failure of the Owner and the Vendor to reach
satisfactory agreement on a Final Site Count and/or a Final RF Engineering Plan
for any given System Area or System Sub-Area within the Final RF Review Period
will automatically result in the referral of any such disagreement to the most
senior RF engineers of both the Owner and the Vendor for their review and
resolution within five (5) days after the end of any such Final RF Review
Period. If the senior RF engineers fail to resolve any such disagreement within
the extended five (5) day resolution period, the disagreement will automatically
be referred for resolution in accordance with subsection 23.1. It is understood
by the Parties that during the period of any such disagreement and the
resolution thereof in accordance with the Contract, the Work on such PCS System
and/or PCS Sub-System, to the extent possible, will be ongoing and that
Substantial Completion on such PCS System and/or PCS Sub-System shall require
agreement by the Parties on a Final RF Engineering Plan and/or a Final Site
Count for such PCS System and/or System Area and/or PCS Sub-System.
(d) The Vendor will install each of the MSCs in each of the Switch
Sites within sixty (60) days of the Switch Site Ready Date; provided that (i)
the Owner will have provided the Vendor with the MSC configuration engineering
information at least one hundred (100) days prior to the Switch Site Notice
Date, for each such MSC, such that the Vendor may actually perform the Owner's
MSC configuration engineering (other than the Switch Site layout configuration),
(ii) the Owner will have provided the Vendor with the applicable Switch Site
description (in appropriate detail) at least sixty (60) days prior to the Switch
Site Notice Date and (iii) as of such Switch Site Ready Date the applicable
Switch Site will have been made ready by the Owner such that the relevant MSC
can in fact be installed by the Vendor. For the purposes hereof (i) the "Switch
Site Ready Date" means the date specified by the Owner as the date on which the
Switch Site will in fact be ready for MSC installation as communicated to the
Vendor by the Owner in the Owner's Switch Site Notice to the Vendor, (ii) the
"Switch Site Notice Date" will mean, as to any Switch Site Notice, the date on
which such notice was delivered to the Vendor by the Owner and (iii) the "Switch
Site Notice" will mean the notice provided to the Vendor by the Owner in
sufficient detail to describe the Switch Site so that the Vendor may reasonably
engineer the layout of the MSC configuration specifically for such Switch Site.
Nothing contained herein will in any way limit the Vendor's obligation pursuant
to the terms of this Contract to do the MSC engineering and the RF Engineering
in accordance with the terms of this Contract. Pursuant to this subsection
2.6(d) in no event will the Owner provide the Vendor the Switch Site Notice more
than sixty (60) days later than the date the Owner delivers the Vendor the Build
Notice pursuant to subsection 2.7(a).
2.7 Facilities Preparation Services and Installation. (a) For any
PCS System and/or PCS Sub-System within the Initial System prior to Milestone 5
(as set forth on Exhibit A1) for such PCS System or PCS Sub-System, as the case
may be, the Owner (i) may, in its discretion, provide notice to the Vendor when
it has achieved Site Acquisition of at least fifty (50) System Element Locations
in any given PCS System and/or PCS Sub-System, as the case may be, or (ii) in
any event, (if the Owner hasn't already provided notice pursuant to clause (i)
above) will provide such notice to the Vendor when it has achieved Site
Acquisition of at least thirty percent (30%) of the System Element Locations in
such PCS Sub-System, as the case may be (in either event, the "Build Notice").
The Build Notice calculation will be based upon the Owner's reasonable estimate
of System Element Locations within or in connection with the Preliminary RF
Design applicable to the PCS System and/or PCS Sub-System in which such Build
Notice is issued to the Vendor. The Build Notice for each PCS System or PCS
Sub-System will also include the Owner's best forecast based upon information
available at such time (the "M5 Forecast") of when it expects to be able to
declare Site Acquisition Substantial Completion within such PCS System or PCS
Sub-System. The Owner understands that the Vendor will not be required to
commence Facilities Preparation Services and/or Installation in any PCS System
or PCS Sub-System until and unless the Vendor has received the applicable Build
Notice pursuant to and in accordance with this subsection 2.7.
(b) In accordance with the Project Milestones specified in Exhibit
A and the requirements and criteria of Exhibit B2, for each System Area and/or
System Sub-Area the Vendor must complete the Facilities Preparation Services for
all System Element Locations within such PCS System and/or PCS Sub-System, as
applicable, in accordance with the construction criteria set forth in Exhibit E
and the performance criteria set forth in Exhibit F no later than ninety (90)
days from the Owner/Vendor agreement on a Final Site Count and a Final RF
Engineering Plan for such System Area and/or System Sub-Area; provided that upon
the prior written request of the Vendor, the Owner may consent (which consent
will not be unreasonably withheld) to postpone Milestone 6 (as set forth in
Exhibit A1) with respect to any PCS System and/or PCS Sub-System by not more
than an additional sixty (60) days in the event that more than ten percent (10%)
of the System Element Locations in such PCS System and/or PCS Sub-System
estimated as of the date of the Build Notice for such PCS System and/or PCS
Sub-System have not been fully acquired by the Owner immediately prior to the
date on which Milestone 5 (as set forth in Exhibit A1) otherwise occurs in such
PCS System and/or PCS Sub-System. Pursuant to the Project Milestones the Vendor
must complete Installation of the Products for any given PCS System within
thirty-two and one half (32-1/2) days of its completion of the Facilities
Preparation Services in accordance with Milestone 6 (as set forth on Exhibit A1)
for such PCS System pursuant to the requirements and criteria set forth in
Exhibit D and Exhibit F.
2.8 Site Acquisition Modifications. In the event that the Owner
determines that it is unlikely to achieve Site Acquisition Substantial
Completion for any PCS System and/or PCS Sub-System in a timely and
cost-effective manner, the Vendor will modify certain performance criteria set
forth in Exhibit F with respect to such PCS System and/or PCS Sub-System in the
manner and to the degree that the Owner reasonably specifies in writing to the
Vendor in accordance with the terms of Exhibit B3. In the event the Owner
notifies the Vendor of a modification to the System performance criteria for
such PCS System and/or PCS Sub-System pursuant to this subsection 2.8, such
modified criteria, including any such lower number of System Element Locations
that the Owner, in its sole discretion, deems at such time to be satisfactory so
as to constitute Site Acquisition Substantial Completion, will be deemed the
performance criteria and the System Element Location count applicable to such
PCS System for the purposes of Milestone 5 (as set forth on Exhibit A1) and all
other remaining Project Milestones for such PCS System and/or PCS Sub-System
thereafter.
2.9 Design/System Architecture and Engineering; Interoperability.
(a) The Vendor must provide all Engineering and design services necessary for
the completion of the Work and the System in conformity with the Specifications
and the CDMA standards, including, but not limited to, the Engineering and
design necessary to describe and detail the System and the specified PCS Systems
and/or PCS Sub-Systems.
(b) Pursuant to and in accordance with the terms of Exhibits B3 and
G, BTS/BSC-MSC Interoperability must be demonstrated on or before December 1,
1996 (provided that such date will change to reflect the actual delay beyond
December 31, 1995 in the finalization of "Attachment A" to be attached to
Exhibit G); provided that in any event the requirements of this subsection
2.9(b) are a condition to the Vendor's Substantial Completion of the last PCS
System within the Initial System and Substantial Completion of such last PCS
System will not be deemed to have been achieved by the Vendor unless and until
such Interoperability will have been demonstrated in accordance with the
criteria set forth in Exhibit G; provided further that any delay in such
Interoperability which is not due substantially to the fault of the Vendor, in
the reasonable opinion of the Owner, will not be a delay pursuant to the terms
of this subsection 2.9(b).
(c) It is expressly understood and agreed by the Vendor that the
Substantial Completion of any PCS System and/or PCS Sub-System will (in addition
to all other requirements of PCS System (and/or PCS Sub-System) Substantial
Completion set forth in this Contract) be subject to, and conditioned upon, such
PCS System and/or PCS Sub-System, as the case may be, pursuant to and in
accordance with the Specifications, operating and interoperating with any then
operating and/or in service Owner and/or Affiliate PCS Systems and PCS
Sub-Systems (and/or PCS systems and/or PCS sub-systems, as the case may be)
which comply with the relevant ANSI standards and other specifications
identified in Exhibit D.
(d) The Vendor will use its best efforts to work with Nortel in
order to ensure that the AM/HLRs and SCP/HLRs work with the Equipment and
Software (as defined in the Nortel Contract) provided by Nortel so that in a
timely manner the AM/HLR and SCP/HLR Products and Services provide service to
the entire Nationwide Network (including, but not limited to, the Nortel
constructed portion of the Nationwide Network) in accordance with the AM/HLR
Specifications and the SCP/HLR Specifications, as applicable. Notwithstanding
anything stated herein to the contrary, the Vendor will not be liable for the
failure of any of the AM/HLRs and/or the SCP/HLRs to properly operate with the
Nortel System (as such term is defined in the Nortel Agreement) where such
failure was directly caused by Nortel's failure to provide timely and accurate
specifications or to make its Equipment accessible and to operate with the
AM/HLRs and/or SCP/HLRs in accordance with and pursuant to the Lucent/Nortel
License Agreement. The Vendor will also use its best efforts to work with Nortel
in order to ensure that the AS Products work with the Equipment and Software (as
defined in the Nortel Contract) provided by Nortel so that in a timely manner
the AS Products and Services provide service to the entire Nationwide Network
(including, but not limited to, the Nortel constructed portion of the Nationwide
Network) in accordance with the AS Statement of Work, as applicable.
Notwithstanding anything stated herein to the contrary, the Vendor will not be
liable for the failure of any of the AS Products to properly operate with the
Nortel System (as such term is defined in the Nortel Agreement) where such
failure was directly caused by Nortel's failure to provide timely and accurate
specifications or to make its Equipment accessible and to operate with the AS
Products in accordance with and pursuant to the Lucent/Nortel License
Agreement-OAM&P.
(e) Commencing as of July 15, 1996, the Vendor will have and will
continue to regularly update (including the provision of at least monthly
written updates) the Owner as to the Vendor's progress in developing and being
able to timely deliver the AM/HLRs and the SCP/HLRs for both the Test-bed
Laboratory and the Nationwide Network.
(f) Notwithstanding anything to the contrary in the Contract,
Substantial Completion of any PCS System or PCS Sub-System, as the case may be,
within the Initial System, and the testing required therefor, will expressly
require and be conditioned upon the successful integration and interoperation
(in accordance with the AM/HLR Specifications), of the other Products within any
such PCS System and/or PCS Sub-System with the then existing AM/HLRs within the
Nationwide Network.
(g) For each applicable Actiview Software release, the Acceptance
Procedures for such release are to be mutually agreed between the Parties no
later than one (1) week prior to the delivery by the Vendor of any such release.
Failure of the Parties to so mutually agree at such time will in no way modify
the Vendor's obligation to timely deliver any such Actiview Software release
pursuant to and in accordance with the Actiview Statement of Work.
2.10 Certification. The Vendor must coordinate its performance of
the Services described in subsection 2.9 with the Engineering and design efforts
(including, without limitation, any and all RF Engineering and/or Site
Acquisition) of all Subcontractors, the Owner, the Other Vendors, any and all
supply and transportation requirements and all federal, state and local
authorities or agencies. The Vendor will be fully knowledgeable about and will,
after reasonable review thereof, accept all Engineering, including, without
limitation, RF Engineering and design, irrespective of whether the Vendor, the
Other Vendors, the Owner or third parties such as the Subcontractors may furnish
such services. All Engineering requiring certification must be certified by
professional engineers licensed or properly qualified to perform such
Engineering services in all appropriate jurisdictions if such certification is,
in the Owner's opinion, appropriate and reasonable under the circumstances. This
subsection 2.10 will not modify or restrict the Vendor's obligation and/or right
to provide the Services contracted for pursuant to the terms of this Contract.
2.11 Notice of Developments.
2.11.1 Vendor Developments. The Vendor must provide the Owner,
through the NDAB or the Owner's vice president and/or director of product
development, with reasonable prior notice of any PCS Product developments,
innovations and/or technological advances (collectively "Vendor Developments")
relevant to the System prior to giving such notice to any other Customer or
otherwise making any such Vendor Development public within the relevant
marketplace; provided that the Vendor will not be obligated to provide the Owner
such notice before any other Customer if doing so would not be reasonable under
the circumstances and/or otherwise breach any contractual obligation to any
other Customer; provided further that any such notice pursuant to this
subsection 2.11.1 need not include any information originated by another
Customer which is proprietary to such other Customer of the Vendor. For the
purposes of this subsection 2.11.1 the term "Vendor" includes the Vendor and its
affiliates and subsidiaries.
2.11.2 Participation in Testing. The Owner has the right, but not
the obligation, to witness and/or participate in any initial testing and/or
application of any such Vendor Development (other than a Vendor Development
originated by another Customer which includes information which is proprietary
to such other Customer); provided that any such initial testing of Vendor
Developments will be subject to (i) scheduling as reasonably determined by the
Vendor, (ii) the qualification that the Owner's PCS System or PCS Sub-System, as
the case may be, meets the technical requirements for the testing of such Vendor
Development as reasonably determined by the Vendor (or otherwise that the Owner
is willing to update such PCS System or PCS Sub-System, as the case may be, to
meet such requirements), (iii) the Owner's acknowledgement that it will be able
to provide the resources necessary to implement the initial testing for such
Vendor Development, and (iv) the Owner and the Vendor executing a verification
office testing agreement that identifies the scope, terms, pricing,
responsibilities and schedule related to the initial testing of such Vendor
Development. The Vendor must provide the Owner at least thirty (30) days prior
notice of its intent to test any such Vendor Development and upon the Owner's
written request the Vendor will allow the Owner to participate in such testing
upon terms and in a testing environment reasonably acceptable to the Parties at
such time. The Owner will make its Test-bed Laboratory and/or certain of its PCS
Systems and/or PCS Sub-Systems (following Final Acceptance thereof) available to
the Vendor for any such testing in which the Owner has the right, and will have
notified the Vendor of its desire, to participate in pursuant to the terms of
this subsection 2.11.2. Where the Vendor and the Owner have agreed that the
Owner's Test-bed Laboratory or PCS System and/or PCS Sub-System will be used as
a test bed for Vendor Developments, the Owner will not unreasonably refuse the
Vendor's requests for other Customers to observe the tests or to release results
of the tests to other Customers; provided that the Owner will have had
reasonable prior notice that the Vendor would like to have other Customers
observe such testing and that the Vendor will remain liable in all respects
pursuant to the terms of this Contract for the protection of Proprietary
Information in connection with any such testing. The length of the prior notice
period described above may be shortened to under thirty (30) days if necessary
and appropriate under the circumstances, but in no event will any such prior
notice period be less than ten (10) days.
2.12 Safety. To the extent the Vendor is in control of any System
Element Location, or other site within the System or any System Area during the
term of this Contract (a "Vendor-Controlled Location") including, but not
limited to, during the build-out of the Initial System, the Vendor will be
solely responsible for initiating, maintaining, and supervising all safety
precautions and programs in connection with all such Vendor-Controlled
Locations. The Vendor must materially comply with Applicable Laws and Applicable
Permits and the Specifications bearing on safety of persons or property or
protection against injury, damages or loss. The Vendor must provide a written
report to the Owner describing fully all incidents affecting safety on any
Vendor-Controlled Location and must also furnish to the Owner copies of all
MSHA, OSHA and workers' compensation reports. The Vendor acknowledges and agrees
that until Bolt-down of all of the PCS Products to be provided by the Vendor
pursuant to the terms of this Contract on any given System Element Location
(other than the Switch Site or the Test-bed Laboratory) within any given PCS
System and/or PCS Sub-System is achieved the Vendor will be deemed to be in
control of all Products, tools, designs, buildings, structures and/or
Engineering (other than those Products, tools, designs, buildings, structures
and/or Engineering specific to and necessary for Site Acquisition, Network
Interconnection and/or Microwave Relocation) at, in or upon any such System
Element Location within such PCS System and/or PCS Sub-System; provided that in
any event for each such System Element Location the Vendor will always be deemed
to be in control of such System Element Location until the Facilities
Preparation Services for such System Element Location have been completed in
accordance with Exhibit B2.
2.13 Emergencies. In the event of any emergency at a
Vendor-Controlled Location endangering life or property, the Vendor must take
such action as may be reasonable and necessary to prevent, avoid or mitigate
injury, damage or loss and will, as soon as possible, report any such incidents,
including the Vendor's response thereto, to the Owner. Whenever, in the
reasonable opinion of the Owner, the Vendor has failed to take sufficient
precautions for the safety of the public or the protection of the Work or of
structures or property on or adjacent to any Vendor-Controlled Location,
creating, in the reasonable opinion of the Owner, an emergency requiring
immediate action, then the Owner, after having given reasonable prior notice to
the Vendor, may cause such sufficient precautions to be taken or itself provide
such protection. The taking or provision of any such precautions or protection
by the Owner or its agents or representatives will be for the account of the
Vendor and the Vendor must reimburse the Owner for the cost thereof.
2.14 Right of Inspection. The Owner, the parties providing
financing in connection with the build-out of the Nationwide Network and their
duly appointed representatives, including Inspectors (collectively "Reviewers"),
will at all reasonable times have access to the various sites where the Vendor
or its Subcontractors are prosecuting the Engineering, design, procurement,
testing or manufacture of the Work; provided that this subsection 2.14 will not
be presumed to give access to the Vendor's or its Subcontractors' sites to
direct competitors of the Vendor provided that such sites are not otherwise
Owner sites. For these purposes, reasonable access will be given during normal
business hours to the Vendor's and its Subcontractors' plants, premises, storage
and deposit areas, facilities and offices, sources of materials, Equipment being
assembled, already assembled or in operation, Equipment being performance tested
or tested to the Vendor's specifications and to any other places or areas
occupied by the Vendor or its Subcontractors in connection with the Work.
Notwithstanding anything herein to the contrary, any Reviewer's right of access
to the Vendor's and/or the Subcontractors' plants, premises, storage and deposit
areas, facilities and offices, sources of materials, Equipment being assembled,
already assembled or in operation, Equipment being performance tested or tested
to the Vendor's specifications and to any other places or areas occupied by the
Vendor or its Subcontractors in connection with the Work will be subject to the
reasonable confidentiality, safety and security requirements of same and further
subject to such Reviewers' non-interference with the Work and other work being
performed thereon. The Vendor must provide reasonable temporary office space (in
the Vendor's facilities where such space is available) and services for the
Reviewers to the extent necessary.
2.15 Transportation. The Vendor must provide for the transport and
delivery of all the Products to be delivered pursuant to, and in accordance
with, the terms of this Contract. The costs for such transportation will be
borne by the Vendor as part of the Contract Price; provided that the Owner will
reimburse the Vendor for any costs incurred by the Vendor for any Extraordinary
Transportation in such cases where the Vendor, subject to prior notice to the
Owner, found it actually necessary to utilize such Extraordinary Transportation;
provided, further that any amounts due to the Vendor from the Owner pursuant to
the first proviso of this subsection 2.15 will be reduced by the amount of
non-extraordinary transportation costs which otherwise would have been
applicable to the transport of such Products.
2.16 Security. Subject to subsection 2.12, during the course of the
Work, the Vendor will perform the security services necessary to ensure the
safety and security of the System Element Locations, the Products and/or other
materials or designs relevant to the Work.
2.17 Materials and Equipment. Except for materials or Equipment to
be supplied by Subcontractors identified on part B of Schedule 7, whenever
materials or Equipment are specified or described in this Contract (including
the Specifications) by using the name of a proprietary item or the name of a
particular supplier, the naming of the item is intended to establish the type,
function and quality required, and substitute materials or Equipment may
nonetheless be used, provided that such materials or Equipment are equivalent or
equal to that named. If the Vendor wishes to furnish or use a substitute item of
material or Equipment, the Vendor must first certify that the proposed
substitute will perform at least as well the functions and achieve the results
called for by this Contract, will be substantially similar or of equal substance
to that specified and be suited for the same use as that specified. The Owner
may require the Vendor to furnish, at the Vendor's expense, additional data
about the proposed substitute as required to evaluate the substitution. For
Major Portions of the Work, or materials or Equipment listed on part B of
Schedule 7, the Vendor must first receive prior written approval of the Owner
for any substitution. The Owner will be allowed a reasonable time within which
to evaluate each proposed substitute. Notwithstanding the foregoing, with
respect to PCS Products, prior to the shipment of such PCS Products pursuant to
the terms of this Contract, the Vendor may at any time without notice to or
consent of the Owner make changes in a Vendor PCS Product furnished pursuant to
this Contract, or modify the drawings and published specifications relating
thereto, or substitute Products of similar or later design to fulfill its
obligations under this Contract or otherwise fill an order, provided that the
changes, modifications or substitutions will in no way affect or otherwise
impact upon the form, fit, or function of an ordered Product pursuant to and in
accordance with the applicable Specifications. With respect to changes,
modifications and substitutions which do in fact affect the form, fit, or
function of an ordered Product pursuant to and in accordance with the
Specifications, the Vendor must notify the Owner in writing at least thirty (30)
days prior to the effective dates of any such changes, modifications or
substitutions. In the event that any such change, modification or substitution
is not desired by the Owner, the Owner will notify the Vendor within thirty (30)
days from the date of notice and the Vendor will not furnish any such changed
Products to the Owner on any orders in process at the time the Owner is so
notified; provided that nothing contained herein will otherwise modify the
Vendor's obligations under the terms of this Contract.
2.18 Equipment and Data. The Vendor must furnish all drawings,
specifications, specific design data, preliminary arrangements and outline
drawings of the Equipment and all other information as required in accordance
with this Contract in sufficient detail to indicate that the Equipment and
fabricated materials to be supplied under this Contract comply with the
Specifications.
2.19 References to Certain Sources. Reference to standard
specifications, manuals or codes of any technical society, organization or
association or to the laws or regulations of any Governmental Entity, whether
such reference is specific or by implication, by this Contract, means the latest
standard specification, manual, code, laws or regulations in effect at the time
of such reference, except as may be otherwise specifically agreed to by the
Owner. However, no provision of any reference, standard, specification, manual
or code (whether or not specifically incorporated by reference in this Contract)
will be effective to change the duties and responsibilities of the Owner, the
Vendor, the Subcontractors or any of their consultants, agents or employees from
those set forth in this Contract; provided that nothing contained in this
Contract will require the Vendor to violate then existing and enforceable
Applicable Laws.
2.20 Operating Manuals. The Vendor will provide the Owner Operating
Manuals in accordance with this subsection 2.20 as soon as they are reasonably
available but in no event less than thirty (30) days prior to Substantial
Completion of the Initial PCS System, the Vendor will provide the Owner with as
many sets of the Operating Manuals for the entire System as the Owner then
reasonably requires. The Operating Manuals will be prepared in accordance with
the relevant Specifications and in sufficient detail to accurately represent the
System and all of its component System Elements as constructed and will
recommend procedures for operation. Operating Manuals with up to date (but not
"as-built") drawings, specifications and design sheets will be available for the
Training as set forth in subsection 2.23. All other Technical Documentation not
already delivered to the Owner pursuant to the terms of the Contract must be
delivered to the Owner within ten (10) days after the successful achievement of
all Final Acceptance tests in accordance with Exhibit B3. The Owner will not be
required to deliver the Final Acceptance Certificate until all such Technical
Documentation has been so delivered (and Final Acceptance will not be deemed to
have occurred earlier than the date that is ten (10) days prior to the date of
delivery of such Technical Documentation).
2.20.1 AS Products and Services Operating Manuals. The
Vendor will provide the Owner operating and instruction manuals for the AS
Products and AS Services (the "AS Operating Manuals") in accordance with
this subsection as soon as they are reasonably available but in no event later
than the dates and times set forth in Appendix G. The Vendor will provide the
Owner with the quantity of AS Operating Manuals set forth in the AS Statement of
Work. The AS Operating Manuals will be prepared in accordance with the AS
Statement of Work and in sufficient detail to accurately describe the opera-
tions and instructions for the AS Products and all of such AS Products component
parts and will recommend procedures for operation and maintenance.
2.20.2 OTAF Products and Services Operating Manuals. The
Vendor will provide the Owner operating and instruction manuals for the OTAF
Products and OTAF Services (the "OTAF Operating Manuals") in accordance with
this subsection as soon as they are reasonably available but in no event later
than the dates and times as set forth in the OTAF Statement of Work. The
Vendor will provide the Owner with the quantity of OTAF Operating Manuals
set forth in the OTAF Statement of Work. The OTAF Operating Manuals will be
prepared in accordance with the requirements and specifications of the OTAF
Statement of Work and in sufficient detail to accurately describe the OTA
Products and Services (including SPARC/OTAF and SCP/OTAF) and will recommend
procedures for OTAF operation and maintenance.
2.20.3 Actiview Products and Services Operating Manuals.
The Vendor will provide the Owner operating and instruction manuals for the
Actiview Products and Actiview Services (the "Actiview Operating Manuals")
in accordance with this subsection as soon as they are reasonably available
but in no event later than the dates and times set forth in the Actiview State-
ment of Work. The Vendor will provide the Owner with the quantity of Acti-
view Operating Manuals set forth in the Actiview Statement of Work. The
Actiview Operating Manuals will be prepared in accordance with the Actiview
Statement of Work and in sufficient detail to accurately describe the Acti-
view Products (and all of their component parts) and Services and will recommend
procedures for Actiview operation and maintenance.
2.21 Maintenance and Instruction Manuals. The Vendor will provide
the Owner Maintenance and Instruction Manuals in accordance with this subsection
2.21 as soon as they are reasonably available but in no event less than thirty
(30) days prior to Substantial Completion of the Initial PCS System, the Vendor
must provide the Owner with as many sets of the Maintenance and Instruction
Manuals for the entire System as the Owner then reasonably requires. The
Maintenance and Instruction Manuals will be prepared in accordance with the
Specifications and in sufficient detail to accurately represent the System and
all of its component System Elements as constructed and will set forth
procedures for inspection and maintenance. Maintenance and Instruction Manuals
with up to date (but not "as-built") drawings, specifications and design sheets
will be available for the Training set forth in subsection 2.23. The Maintenance
and Instruction Manuals must include the volumes compiled by the Vendor
containing all as-built Subcontractor furnished product data.
2.22 Standards for Manuals. All Operating Manuals and Maintenance
and Instruction Manuals required to be provided by the Vendor pursuant to this
Contract must be:
(a) detailed, comprehensive and prepared in conformance with the
System Standards and generally accepted national standards of professional care,
skill, diligence and competence applicable to telecommunications and operation
practices for facilities similar to the System;
(b) consistent with good quality industry operating practices for
operating personal communications service systems of similar size, type and
design;
(c) sufficient to enable the Owner to operate and maintain each PCS
System and/or PCS Sub-System in each System Area or System Sub-Area, as the case
may be, and the System as a whole on a continuous basis; and
(d) prepared subject to the foregoing standards with the goal of
achieving operation of the System at the capacity, efficiency, reliability,
safety and maintainability levels contemplated by this Contract and the
Specifications and required by all Applicable Laws and Applicable Permits.
In addition to, and without limiting the requirements set forth in
the preceding sentence, the Operating Manuals and the Maintenance and
Instruction Manuals will be submitted to the Owner in CD-ROM format (as soon as
such format is available provided that such availability will be no later than
December 1996) in addition to hard-copy volume format if so requested by the
Owner. In addition to any of the Owner's other rights and remedies, the Owner
will have the right to reject the Operating Manual and the Maintenance and
Instruction Manuals if in its reasonable judgment any of the foregoing does not
meet the standards set forth in this Contract.
In addition to, and without limiting the requirements set forth in
clauses (a) through (d) of this subsection 2.22, the AS Operating Manuals for
the AS Products and Services will be submitted to the Owner in hard-copy volume
format if so requested by the Owner. In addition to any of the Owner's other
rights and remedies, the Owner will have the right to reject such AS Operating
Manuals if in its reasonable judgment any of them do not meet the standards set
forth in this Contract.
In addition to, and without limiting the requirements set forth in
clauses (a) through (d) of this subsection 2.22, the OTAF Operating Manuals and
the OTAF Products and Services maintenance and instruction manuals (the "OTAF
Maintenance and Instruction Manuals") for the OTAF Products and Services, will
be submitted to the Owner in hard-copy volume format if so requested by the
Owner. In addition to any of the Owner's other rights and remedies, the Owner
will have the right to reject the OTAF Operating Manuals and OTAF Maintenance
and Instruction Manuals if in its reasonable judgment any of the foregoing does
not meet the standards set forth in this Contract. Furthermore, the Actiview
Operating Manuals and the Actiview Products and Services maintenance and
instruction manuals (the "Actiview Maintenance and Instruction Manuals") for the
Actiview Products and Services, will be submitted to the Owner in hard-copy
volume format if so requested by the Owner. In addition to any of the Owner's
other rights and remedies, the Owner will have the right to reject such Actiview
Operating Manuals and Actiview Maintenance and Instruction Manuals if in its
reasonable judgment any of the foregoing does not meet the standards set forth
in this Contract.
2.23 Training. As more fully described below, starting at least one
hundred and eighty (180) days prior to the Substantial Completion of the Initial
PCS System, the Vendor must provide to the Owner a practical and participatory
and, where feasible, on-site training program with respect to the System, which
program will include technical education (collectively, the "Training"). The
Vendor will provide, upon the Owner's prior written request and at the time or
times mutually agreed in good faith by the Owner during the Initial Term of this
Contract, (i) not less than a minimum of twelve thousand fifty (12,050) man-days
of Training and Training materials for the Owner's personnel, at no cost to the
Owner plus (ii) an additional one thousand (1,000) man-days of Training at no
cost to the Owner for the SCP/HLRs and/or AM/HLRs. The Vendor will be required
to commence provision of SCP/HLR training no later than October 1, 1996. The
Owner will be responsible for the travel and living expenses of personnel
receiving Training. Such Training must be kept current to encompass the latest
Software and Equipment, or any other Software Revision Level and/or Equipment
Revision Level directed by the Owner pursuant to the terms of this Contract.
Subject to the foregoing, Training course size, content and material will be
designed and agreed to by mutual consent between the Parties. The Vendor will
conduct classes for the subjects described below:
(a) Operations, maintenance and provisioning ("OM&P") Training will
include System Training to technical personnel presumed not qualified or trained
specifically on operating a PCS System and/or PCS Sub-System or the Equipment
and/or Software included therein. The subject matter will include (i) a general
overview of PCS/CDMA technology and the System, (ii) a System overview of the
Equipment, Software initiation and configuration requirements, required
interconnections, troubleshooting and testing requirements, recovery from System
failures, and (iii) any other information necessary to successfully operate,
maintain, or set up the Equipment and the Software to work in accordance with
the System Element performance criteria set forth in Exhibit D, in each case so
that each PCS System successfully operates in accordance with the performance
criteria set forth in Exhibit F within its System Area;
(b) The Vendor must provide PCS/CDMA qualified technical staff and
material to train the Owner's personnel so as to enable them to train other
personnel of the Owner (i.e., train the trainers) on the subject matter topics
listed below. The Owner's personnel trained by the Vendor will be evaluated and
certified by the Vendor upon successful completion of the course as competent to
train other personnel of the Owner. Such content and materials may be tailored
or customized by the Owner for internal use only and include, without
limitation, Training with respect to the following topics:
(i) System Element configuration;
(ii) Communication interfaces and protocols;
(iii) Software operating system (current to the latest
Software Revision Level);
(iv) Database configuration, structure and content;
(v) Database down loading;
(vi) Program function;
(vii) Stand-alone SCP/HLR operations;
(viii) OAM&P and AS Products operations;
(ix) SPARC/OTAF Products and Services and SCP/OTAF Prod-
ucts and Services operations and maintenance;
(x) Actiview operations and maintenance;
(xi) Troubleshooting procedures; and
(xii) Other subject matter which is necessary or
desirable to understand the operation of the
System and maintenance of the System as well as
any enhancements as they are added to the System
and/or any part thereof.
(c) Except for certain plug-in modules and certain Software
delivered under this Contract, the Vendor does not provide, nor does this
Contract require that the Vendor provide, Training, training manuals, Operating
manuals or Maintenance and Instruction Manuals intended to make the Owner
proficient in Installation of any of the Products furnished under this Contract.
In the event that the Vendor should elect to provide training, documentation
and/or test equipment to facilitate self-installation of the Products by a
Customer purchasing PCS Products from the Vendor, the Vendor agrees to make such
items available to the Owner under the Vendor's standard terms and conditions
for such offering as they may exist from time to time subject to the Vendor's
obligations under Section 26; and
(d) Promptly upon execution of this Contract, the Vendor will
establish a training coordinator, whose responsibility will be to work with the
Owner to ensure that the Owner receives the Training set forth above. Such
coordinator (or his or her replacement) will continue in such assignment until
the earlier of (i) the Final Acceptance of the last PCS System within the
Initial System, or (ii) receipt by the Owner of all of the Training required to
be provided at no cost under this subsection.
2.23.1 [INTENTIONALLY OMITTED]
2.23.2 Actiview Training. Any Training for Actiview requested by
the Owner and provided by the Vendor at the prices and terms set forth in the
Actiview Statement of Work will be provided by the Vendor at the Owner's
locations as such locations are designated by the Owner to the Vendor.
2.24 Manuals and Training. The training and the documentation
provided in connection herewith, including, without limitation, all
documentation provided in CD-ROM format, and pursuant to subsections 2.20, 2.21
and 2.23 will be updated pursuant to and in accordance with all Product upgrades
and/or modifications applicable to the System, any PCS System and/or any part
thereof.
2.25 Spare Parts. (a) Prior to the Substantial Completion of the
Initial PCS System the Vendor and the Owner will agree, pursuant to and in
accordance with the terms of this subsection 2.25, as to the type, quantity and
storage location of the spare parts required to continually operate the Initial
System as intended and in accordance with the Specifications. For a period of
two (2) years following Final Acceptance of each PCS Sub-System, the Vendor
will, if requested by the Owner, provide such spare parts at its own expense.
Following the expiration of such two (2) year period, the Vendor will provide
such spare parts pursuant to Schedule 12A and at the prices set forth on
Schedule 12B. After the expiration of such two (2) year period invoices for such
System spare parts will be issued directly to the Owner and will be paid for
directly by the Owner in accordance with the invoice and payment terms of this
Contract. Any PCS spare parts applicable to the System utilized or withdrawn
from any PCS System and/or PCS Sub-System during such two (2) year period will
be promptly replaced by the Vendor at its own cost. With respect to such spare
parts provided at the Vendor's expense, the Owner expressly agrees that (i) the
Owner will not utilize such spare parts for increasing the performance or
capacity of the PCS Sub-Systems and/or PCS Sub-Systems for which they were
provided or otherwise expanding such PCS Sub-Systems and/or PCS Sub-Systems or
any other PCS systems, (ii) until any such spare part is drawn from storage and
utilized as a replacement in a PCS System and/or PCS Sub-System or until the
Owner pays for such spare part, title to such spare part will remain with the
Vendor, (iii) risk of loss of or damage to such a spare part will be with the
Owner from the time of delivery to the Owner, and (iv) the Owner will, at its
expense, return to the Vendor any Item replaced by a spare part delivered to the
Owner pursuant to the terms of this subsection 2.25.
(b) The Owner has the right to withhold from its final payment to
the Vendor with respect to any PCS System and/or PCS Sub-System an amount equal
to the Owner's reasonably estimated cost of any utilized spare parts for such
PCS System and/or PCS Sub-System, as the case may be, not so replaced prior to
Final Acceptance; provided that such withheld funds will be released upon such
satisfactory replacement of such spare parts by the Vendor.
(c) To the extent that System PCS spare parts need to be acquired
from third party suppliers, the Vendor will use its reasonable efforts to obtain
from suppliers a supply of System spare parts at no additional cost as part of
the original Product package. To the extent that the Vendor is able to so obtain
such System spare parts at no additional cost as part of the original Product
package, it will provide such System spare parts to the Owner without cost (and
without any charge for the procurement of such spare parts by the Vendor).
2.26 System Support Services. The Vendor will provide the specified
support services for the operation, maintenance and repair of the System and all
Products to the extent set forth herein below and at the Annual Release
Maintenance Fees.
2.26.1 Vendor Assistance. (a) Upon receipt of a request
for technical assistance from the Owner, the nature of the problem will be iden-
tified by the Owner, and a priority assigned by the Owner (upon discussion
with the Vendor which in no event will require the agreement and/or consent
of the Vendor) as either an emergency or non-emergency condition and resolution
thereof will be expedited in accordance with the severity levels set forth be-
low.
(b) Following attempted corrective actions by the Owner in
accordance with applicable Maintenance and Instruction Manuals provided by the
Vendor, when the Vendor is notified by the Owner that the System, any PCS
System, any PCS Sub-System or any part thereof fails to operate in accordance
with the Specifications, the Vendor will promptly commence and diligently pursue
all reasonable efforts to identify the Defect or Deficiency and, in the event
the Vendor has responsibility therefor, to correct such Defect or Deficiency.
(c) The Vendor's correction of such Defects or Deficiencies in the
System, any PCS System, any PCS Sub-System, or any part thereof, may take the
form of new software codes, new or supplementary operating instructions or
procedures, modifications of the software codes in the Owner's possession, or
any other commonly used method for correcting Defects or Deficiencies in
Software, as the Owner and the Vendor deem appropriate.
(d) When appropriate, the Vendor will provide non-emergency
technical support to the Owner via telephone, facsimile transmission, modem, or
other means acceptable to the Owner during the Owner's normal business hours.
(e) The Vendor will provide emergency technical assistance to the
Owner via an ETA telephone number designated to the Owner in advance by the
Vendor, twenty-four (24) hours per day, three hundred sixty-five (365) days per
year.
(f) The Vendor will provide remote intervention and assistance
capability to the Owner for remotely accessing operating System Elements. Upon
mutual agreement between the Parties, the Vendor may remotely access operating
System Elements for the purpose of ETA.
2.26.2 Trouble Reports. From time to time, failures in,
or degradation of, Products may cause services provided by the System to be ad-
versely affected. It is necessary that immediate assistance be provided by
the Vendor to allow the Owner to restore the affected service. Critical ser-
vice outages that cannot be resolved by the Owner's field technicians or techni-
cal support engineers using procedures described in the Operating Manuals,
Maintenance and Instruction Manuals and Training will be transmitted to
the Vendor as a Trouble Report ("TR"). The Vendor will assign an identi-
fying number to each TR to aid in tracking its resolution. TRs will be imme-
diately addressed by the Vendor through Emergency Technical Assistance under
guidelines set forth in subsection 2.26.3. TRs may not be considered conclud-
ed until the solution is concurred upon by an employee of the Owner within the
Owner's operations control center ("OCC"). The root cause of problems re-
sulting in TRs may be Defects or Deficiencies which must be corrected through
Product or procedure changes. Problems with the System requiring such
changes will be referred to the Vendor for action through a Customer Ser-
vice Request ("CSR"). The Vendor is authorized by the Owner to install and
integrate, at the Vendor's expense, any Software Upgrade or Software Enhancement
pursuant to mutual agreements reached between the Vendor and the Owner.
2.26.3 Emergency Technical Assistance. (a) When a prob-
lem is encountered that adversely affects service or performance with respect
to the Products, any PCS System and/or PCS Sub-System, the System or any part
thereof, in each case provided by the Vendor, an Owner maintenance techni-
cian will attempt to repair or replace any malfunctioning Product adversely
affecting such service or performance using the procedures recommended in the
Maintenance and Instruction Manuals or the Operating Manuals. If unsuccess-
ful, a technical representative of the Owner will consult the Vendor's desig-
nated ETA group at the telephone number provided by the Vendor in subsection
2.26.3(c) below. Following receipt of notification by the ETA group, the ETA
group will utilize all available technical resources and will ensure that a
qualified technical engineer is communicating with the Owner's personnel
regarding the problem on average within fifteen (15) minutes of any such noti-
fication; provided that no single response will exceed thirty (30) minutes.
If necessary and appropriate the Owner's technician will be dispatched to
assist in the normal change-out of replaceable hardware units.
(b) A problem adversely affecting service that has a
severity level defined below either as an "E1 Emergency Condition" or an
"E2 Emergency Condition" is to be addressed under the ETA procedures set
forth below in this subsection 2.26.3 and in subsection 2.26.4.
(i) An E1 Emergency Condition (this roughly corresponds to a
Critical Condition in the Vendor's ISO 9001 documentation)
means a problem resulting from any one or more of the
following events:
- Any system-initiated event or unplanned manual restart (warm, cold,
reload or image) which causes a system loss of all call
processing capability for more than thirty (30) seconds.
Manual restarts with twenty-four (24) hour notice would
be planned.
- Useable billing data not being collected.
- Two (2) or more contiguous BTSs failing causing a loss of coverage.
- Ten percent (10%) or more of the total number of voice trunks (BTS and
switch) are out-of-service.
- Ten percent (10%) or more of the total number of any links (including
IS-41, ISUP, X.25 and SS7 are out of service.
- Total loss of access to one or more specific services because of a
fault condition in the MSC and related Equipment.
- Any BTS having a total failure in excess of thirty (30) minutes after
recovery attempts from the OMP are executed.
The Vendor must clear all E1 Emergency Conditions within
twelve (12) hours of notification of their occurrence.
Work must continue without any cessation until the defect
causing the E1 Emergency Condition is solved or the
severity thereof is reduced to a "P1 Major Condition", as
defined below, or less.
(ii) An E2 Emergency Condition (this roughly corresponds to
Severity 1 Conditions in the Vendor's ISO 9001
documentation) means a problem resulting from any one or
more of the following events:
- Loss of the duplex functionality for any equipment that is duplicated.
- Single BTS failing less than thirty (30) minutes that is not contiguous
with another failed BTS.
- Loss of the master clock.
- Fifty percent (50%) or more of the equipped tape or disk drive units
out-of-service.
- Loss of duplex recording of billing information.
- Inability to dump or initialize an office image (e.g., translations
and/or software).
- Inability to perform critical maintenance procedures.
- Loss of all links within a single link-set.
The Vendor must clear all E2 Emergency Conditions within
twenty-four (24) hours of notification of such E2
Emergency Conditions. Work must continue without any
cessation until the defect causing the E2 Emergency
Condition is solved or the severity is reduced to a P1
Major Condition or less.
(c) In the event that an E1 Emergency Condition or an E2
Emergency Condition should remain unresolved following referral to the Vendor.
by the Owner, the problem causing such condition must be reported to the
levels of management set forth below (with comparable titles, if different)
to ensure all available resources necessary to address the problem will be
committed in accordance with the following:
The following are the reporting levels if an E1 Emergency Condition
or an E2 Emergency Condition is not resolved within the time periods set forth
below, as amended from time to time with the reasonable acceptance of the Owner,
following referral thereof to the Vendor by the Owner:
Vendor Contact Vendor Contact Name Telephone Number
One hour -- Technical Assistance Mgr. to be designated to be designated
Two hours -- Customer Service Director to be designated to be designated
Three hours -- Customer Service AVP ▇.▇. ▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
Four hours -- Vice President ▇.▇. ▇▇▇▇▇▇▇▇▇ to be designated
(d) If the Owner reasonably determines that the Vendor has not provided
sufficient ETA to resolve any E1 Emergency Condition or E2 Emergency Condition
on a timely basis, the Owner will be entitled to withhold all payments with
respect to the affected PCS System and/or PCS Sub-System then due or outstanding
prior to the date of such determination until such time as adequate ETA is
provided to the Owner to resolve such Emergency Condition.
(e) If an E1 Emergency Condition or an E2 Emergency Condition exists in
a PCS System and/or PCS Sub-System prior to Final Acceptance of such PCS System
or PCS Sub-System, as the case may be, the Vendor will use all reasonable
efforts to deliver to the Owner each Software Upgrade and each Equipment Upgrade
developed by or on behalf of the Vendor to resolve any E1 Emergency Condition or
E2 Emergency Condition within forty-eight (48) hours following completion of
development of such Software Upgrades or availability of such Equipment
Upgrades.
(f) The term "Non-Emergency Services" includes providing to the Owner
any requested technical assistance and support, remote monitoring and outage
review consultation and the handling of CSRs.
(g) Technical assistance and support must be provided for the purpose
of resolving non-emergency problems defined below as "P1 Major Condition", "P2
Significant Problem" and "P3 Minor Problem" which are reported to the Vendor.
(i) P1 Major Condition (this roughly corresponds to
Severity 1 Conditions in the Vendor's ISO 9001
documentation) means any non-emergency failure of
specific features or functions of the System, any PCS
System, any PCS Sub-System or any Product that
restricts its operations, but does not render the
System, any PCS System, any PCS Sub-System or any
Product inoperable, impact traffic capacity or coverage
or require significant manual intervention for the
System, any PCS System, any PCS Sub-System or any
Product to operate properly and in accordance with its
applicable Specifications. These events will include
loss of diagnostic capabilities and loss of reporting
functions. The Vendor will use all reasonable efforts
to use by-pass or work-around procedures to alleviate
such P1 Major Condition until it is corrected and, upon
mutual agreement of the Parties, the Vendor will
resolve such P1 Major Condition during the next
available scheduled Software Upgrade or Equipment
Upgrade.
(ii) P2 Significant Problem (this roughly corresponds to
Severity 2 Conditions in the Vendor's ISO 9001
documentation) means any non-emergency, intermittently
occurring problem related to specific primary functions
or features or any inoperable secondary functions that
do not have a significant adverse effect on the overall
performance of the System, any PCS System, any PCS
Sub-System or any Product. The Vendor will undertake
appropriate and reasonable efforts to correct such P2
Significant Problem.
(iii)P3 Minor Problem (this roughly corresponds to Severity
3 Conditions in the Vendor's ISO 9001 documentation)
means any non-emergency problem that does not affect
the performance or functions of the System, any PCS
System, any PCS Sub-System or any Product, and, despite
such problem, the System, any PCS System, any PCS
Sub-System or any Product is fully operable without
restrictions. Such P3 Minor Problems may include
documentation inaccuracies, cosmetics, minor requests
for changes or maintenance requests. The Vendor will
undertake appropriate and reasonable efforts to correct
such P3 Minor Problem.
(h) Should a non-emergency problem remain unresolved for the period or
periods of time set forth below following referral to the Vendor by the Owner,
such problem must be reported to the levels of management set forth below to
ensure all available resources necessary to correct such problem will be
committed to address such problem pursuant to the following:
- ------------------------------------------------------------------------------
REPORTING LEVELS IF NON-EMERGENCY
IS NOT RESOLVED WITHIN
- -------------------- -------------------- -------------------- ---------------
CONDITION 30 DAYS 45 DAYS 60 DAYS
- -------------------- -------------------- -------------------- ---------------
P1 Technical Manager Customer Service Vice President
Major Condition Director
- -------------------- -------------------- -------------------- ---------------
P2 Technical Manager Customer Service
Significant Problem Director
- -------------------- -------------------- -------------------- ---------------
P3 Technical
Minor Problem Manager
- -------------------- -------------------- -------------------- ---------------
Non-emergency problems referred to the Vendor as a CSR will be resolved
based upon the priority assigned to them as determined by the Owner or as
mutually agreed by the Parties and, to the extent reasonably possible, will be
incorporated into the next scheduled Software release.
2.26.4 ETA and CSR. In the event that emergency technical
support provided from the Vendor's technical support center is not sufficient to
resolve an E1 Emergency Condition, the Vendor must send a technically qualified
person or persons to the site of such emergency condition or problem to assist
the Owner's employees in solving such condition or problem. The Vendor's
technically qualified person or persons must be on-site as soon as possible, but
in no event more than twenty-four (24) hours after notification to the Vendor by
the Owner, or at such later time as may be mutually agreed on by the Parties. In
the event that emergency technical support provided from the Vendor's technical
support center is not sufficient to resolve an E2 Emergency Condition, then the
Parties will mutually agree to a desired course of action, which may include
requiring the Vendor to send a technically qualified person or persons to the
site of such emergency.
A CSR may be submitted by the Owner to request a repair or
work-around of an emergency condition or repair of a non-emergency problem, or
to request a Software Upgrade or an Equipment Upgrade or other Software or
Equipment operational enhancement. The Owner's CSRs will define the condition or
problem and state whether the Owner considers the CSR to be for a Software
Upgrade or an Equipment Upgrade or other Software or Equipment operational
enhancement. Changes to the System, any PCS System or any PCS Sub-System
resulting from any CSR must be fully tested and accepted in accordance with the
Specifications. The Vendor must respond to the submission of a CSR by the Owner
within five (5) Business Days, acknowledging receipt of the CSR. Within thirty
(30) days of receipt of the CSR, the Vendor will respond to the CSR summarizing
the Vendor's intended actions to handle the CSR. A CSR may result in System
fixes or enhancements, or in Product modifications reasonably acceptable to the
Owner.
Notwithstanding the above, no event, lack of functionality or
failure of the Test-bed Laboratory will be assigned as an E1 Emergency Condition
or E2 Emergency Condition. Any such event, lack of functionality or failure
applicable to the Test-bed Laboratory, which would otherwise be assigned such a
category in accordance with the definitions above, will be assigned a P1 Major
Condition.
- ------------------------------------------------------------------------------
2.27 Supply of Additional Products. During the Initial Term of this
Contract and for a period of three (3) years thereafter, the Vendor will make
available for purchase by the Owner, on applicable terms and conditions set
forth in this Contract or as otherwise mutually agreed between the Parties, PCS
Products to enable the Owner to expand the System and/or any PCS System and/or
any PCS Sub-System and/or any part thereof, which Products will provide
equivalent functionality for and will be compatible with the System or any such
PCS System or PCS Sub-System at such time. Nothing herein will be deemed to
prohibit the Vendor from designating any specific PCS Products as Discontinued
Products in accordance with Section 10 of this Contract.
- ------------------------------------------------------------------------------
2.28 Review of Contract. The Vendor has examined in detail and
carefully studied and compared the Contract with all other information furnished
by the Owner and has promptly reported to the Owner any material errors,
inconsistencies or omissions so discovered or discovered by any of the
Subcontractors. The Vendor will not prosecute any Major Portion of the Work
knowing that it involves a material error, inconsistency or omission in the
Contract without prior written notice to and approval by the Owner. If for any
reason the Vendor violates this subsection 2.28, the Vendor will, in addition to
being subject to any other remedies of the Owner, assume responsibility for such
violation and, in such case, will be deemed to have waived any claims for an
adjustment in any of the Specifications and/or System Standards which results
directly from any such error, inconsistency or omission. This subsection 2.28
does not, nor will be deemed to, in any manner limit the terms of subsection
2.39.
2.29 Licenses, Permits and Approvals. Except as otherwise provided for
herein with respect to Site Acquisition, Microwave Relocation and Network
Interconnection, any Applicable Permits (in connection with the Vendor's Work)
required by any Government Entity relating to the manufacture, importation,
safety or use of the Products, the System, any PCS System or any PCS Sub-System
throughout the United States or in any state or any political sub-division
thereof will be the sole responsibility of the Vendor. Prior to the commencement
of any Work and/or other activities by the Vendor or any of its Subcontractors
in connection with or pursuant to this Contract, upon request of the Owner the
Vendor will furnish the Owner with evidence that such Applicable Permits have
been obtained and are in full force and effect to the extent that Applicable
Permits are necessary for the commencement or undertaking of such activities,
and from time to time thereafter the Vendor, upon the reasonable request of the
Owner, will provide such further evidence as the Owner will deem reasonably
necessary.
2.30 Eligibility under Applicable Laws and Applicable Permits. The
Vendor will be responsible for ensuring that the Vendor and its Subcontractors
are and remain eligible under all Applicable Laws and Applicable Permits to
perform the Work under this Contract in the various jurisdictions involved.
2.31 Customs Approvals. The Owner agrees to reasonably assist, so long
as such assistance will not involve the incurrence of any costs or expenses by
the Owner, the Vendor to obtain and maintain (i) Applicable Permits for
importation into the Products on a duty and customs free basis and (ii) entry or
work permits, visas or authorizations required for personnel engaged by the
Vendor to perform Work under this Contract.
2.32 Owner Participation. In addition to the right of observation
contained in subsection 9.4 hereof, the Owner will be entitled to participate in
the Vendor's research and development activities (subject to the reasonable
acceptance of the Vendor) and product development and testing activities
pursuant to this Contract (other than research and development activities
originated by another Customer which is proprietary to such other Customer);
provided that such observation and participation will not affect the Vendor's
responsibilities and warranties hereunder and will not otherwise interfere with
the Vendor's research and development activities. Nothing contained in this
subsection 2.32 purports to grant the Owner rights to the Vendor's research and
development other than such rights otherwise granted to the Owner pursuant to
the terms of this Contract or as otherwise mutually agreed by the Parties at
such time.
2.33 New Development Advisory Board. In order to accommodate the
Owner's participation pursuant to this Contract, including, without limitation,
pursuant to subsections 2.11 and 2.32, the Owner and the Vendor will establish
an NDAB within sixty (60) days of the Effective Date. The purpose of the NDAB
will be to review the development requirements and high level development
milestones, to ensure that the Vendor understands the Owner's requirements for
each PCS System, each PCS Sub-System the System, and/or any extensions thereto,
including, without limitation, any subsequent Products and/or enhancements. The
NDAB will provide an executive forum to discuss product ideas, Owner
requirements and its recommended development prioritization for improved
infrastructure-based subscriber features and System features, functions and
capabilities. The focus of the NDAB will be on System features and services, new
PCS Products, System enhancements, critical operational issues, future
developments beyond CDMA cellular without the need for System additions and on
such other matters as the Parties mutually agree upon from time to time.
2.34 Market Development Manager. The Vendor will provide a market
development manager to coordinate the efforts of the Vendor in meeting its
obligations relating to the NDAB who will specifically focus on new Products,
CDMA services and features. Such market development manager must be
knowledgeable in CDMA technology and the Owner's System and must work closely,
and on a regularly scheduled basis, with the Owner's senior engineering and
marketing personnel on feature development, feature roll-out, future road maps
for PCS Products, and any other marketing aspect of providing PCS that the Owner
believes is beneficial to the System and/or any PCS System and/or any PCS
Sub-System at such time. The Vendor's market development manager and the
manager's staff will serve as the Owner's direct liaison with the Vendor to
ensure that the Vendor's product development teams are focusing on the Owner's
priorities as described to the Vendor by the Owner from time to time either
through the NDAB or by any other means acceptable to the Parties. Nothing
contained in this subsection 2.34 will in any way limit and/or modify the
Owner's ability to enforce its rights under this Contract or to otherwise
maintain contacts with the Vendor in any other way it sees fit.
2.35 Further Assurances. The Vendor will execute and deliver all
further instruments and documents, and take all further action, including, but
not limited to, assisting the Owner in filing notices of completion with the
appropriate state and local lien recording offices, that may be necessary or
that the Owner may reasonably request in order to enable the Vendor to complete
performance of the Work or to effectuate the purposes or intent of this
Contract.
2.36 Liens and Other Encumbrances. (a) In consideration of the mut-
ual undertakings herein and other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the Vendor:
(i) covenants and agrees to protect and keep free the System
and/or any PCS System and/or any PCS Sub-System and any and all
interests and estates therein, and all improvements and materials now
or hereafter placed thereon under the terms of this Contract, from any
and all claims, liens, charges or encumbrances of the nature of
mechanics, labor or materialmen liens or otherwise arising out of or in
connection with performance by any Subcontractor, including services or
furnishing of any materials hereunder, and to promptly have any such
lien released by bond or otherwise;
(ii) will give notice of this subsection 2.36 to each
Subcontractor before such Subcontractor furnishes any labor or
materials for the System and/or any PCS System and/or any PCS
Sub-System; and
(iii) will make any and all filings reasonably requested by the
Owner in order that the Owner may take advantage of the relevant local
mechanics' lien waiver procedures with respect to mechanics' liens of
any such Subcontractor.
(b) If any laborers', materialmen's, mechanics', or other similar lien
or claim thereof is filed by any Subcontractor, the Vendor will cause such lien
to be satisfied or otherwise discharged, or will file a bond in form and
substance satisfactory to the Owner in lieu thereof within ten (10) days of the
Vendor's receipt of notice of such filing. If any such lien is filed or
otherwise imposed, and the Vendor does not cause such lien to be released and
discharged forthwith, or file a bond in lieu thereof, then, without limiting the
Owner's other available remedies, the Owner has the right, but not the
obligation, to pay all sums necessary to obtain such release and discharge or
otherwise cause the lien to be removed or bonded to the Owner's satisfaction
from funds retained from any payment then due or thereafter to become due to the
Vendor.
(c) The Owner reserves the right to post or place within the System
and/or any PCS System and/or any PCS Sub-System notices of non-responsibility or
to do any other act required by Applicable Law, to exempt the Owner and the
System from any liability to third parties by reason of any work or improvements
to be performed or furnished hereunder; provided that failure by the Owner to do
so will not release or discharge the Vendor from any of its obligations
hereunder.
2.37 Forecasting and Ordering. Throughout the Term of this Contract, on
a monthly basis commencing on the Effective Date, the Owner will provide the
Vendor with rolling twelve-month forecasts of its ongoing Product and Service
requirements. Such forecasts will, to the extent applicable, include, but not be
limited to, the Owner's Site Acquisition, Switch Site Ready Date, Network
Interconnection and Microwave Relocation progress to such date. Upon the review
and reasonable acceptance of such forecasts by the Vendor pursuant to the terms
of this Contract, the Owner will have the right, but not the obligation, to
confirm to the Vendor its orders for the Products and Services set forth in such
forecasts pursuant to the Owner's delivery to the Vendor of formal written
orders specifying the Products and/or Services to be purchased in connection
with the terms of this Contract. The Vendor's obligation to deliver in
accordance with accepted forecasts will be subject to receipt of the Owner's
orders in accordance with the applicable ordering procedures. If the Owner fails
to deliver any forecast pursuant to this subsection 2.37 for any reason, the
Vendor will be responsible for asking the Owner to actually deliver such
forecast to the extent it requires such forecast at such time.
2.38 Microwave Relocation; Network Interconnection. (a) The Vendor will
not be responsible for Microwave Relocation within the System. Unless otherwise
waived by the Owner, however, completion of Microwave Relocation in any given
System Area or System Sub-Area will be a prerequisite to the commencement of the
Substantial Completion testing to be performed by the Vendor in accordance with
Exhibit B3 in such System Area or System Sub-Area. The Owner may at its option
choose instead to modify the System performance criteria as set forth in Exhibit
F by way of a Change Order in order to account for the failure to fully and/or
satisfactorily complete Microwave Relocation in any such System Area or System
Sub-Area such that Substantial Completion testing in accordance with the
requirements of Exhibit B3 may proceed. Notwithstanding anything stated herein
to the contrary (other than clause (b) below), the Owner's failure and/or
inability to fully complete Microwave Relocation in any such System Area or
System Sub-Area within twelve (12) months of Milestone 6 (as set forth in
Exhibit A1) (the "Microwave Delay Period") will entitle the Vendor to otherwise
commence Substantial Completion testing (as deemed applicable and appropriate
pursuant to good faith mutual agreement between the Parties at such time) for
the PCS System or PCS Sub-System in such System Area or System Sub-Area, as the
case may be, in accordance with Exhibit B3. Pursuant to the requirements of
Exhibits A1, B1 and B3 with respect to any PCS System or any PCS Sub-System
within the System the Owner may, upon the prior written request of the Vendor,
consent (such consent not to be unreasonably withheld) to extend the scheduling
of the Vendor's Substantial Completion testing by not more than an additional
sixty (60) days pursuant to Milestone 8 in the event that more than ten percent
(10%) of the System Element Sites in such PCS System or PCS Sub-System as set
forth in the Final Site Count for such PCS System or PCS Sub-System require
Vendor optimization pursuant to Exhibit B1 that was otherwise delayed due to
incomplete Microwave Relocation in such PCS System or PCS Sub-System immediately
prior to the date scheduled for Substantial Completion testing pursuant to
Milestone 8 (as set forth on Exhibit A1).
(b) The Vendor will not be responsible for Network Interconnection
within the System. In any given System Area or System Sub-Area, completion of
Network Interconnection in such System Area or System Sub-Area at least sixty
(60) days (or as otherwise mutually agreed between the Parties at such time)
prior to Milestone 7 (as set forth on Exhibit A1) will be a prerequisite to the
Vendor's obligation pursuant to the terms of this Contract to successfully
achieve Milestone 7 (as set forth in Exhibit A1) in such System Area or System
Sub-Area.
2.39 Vendor To Inform Itself Fully; Waiver of Defense. (a) The Vendor
will be deemed to have notice of and to have fully examined and approved the
Specifications and all other documents referred to herein, and all drawings,
specifications, schedules, terms and conditions of this Contract, regulations
and other information in relation to this Contract and/or any amendments,
modifications or supplements thereto at any time on or after the Effective Date
and to have fully examined, understood and satisfied itself as to all
information of which the Vendor is aware or should have been aware and which is
relevant as to the risks, contingencies and other circumstances which could
affect this Contract and in particular the installation of the System, any PCS
System, any PCS Sub-System or any part thereof. The Owner, its directors,
officers, employees and agents and all of them have no liability in law or
equity or in contract or in tort with respect to any such specifications,
drawings, information, risks, contingencies or other circumstances.
(b) The fact that the Owner may have prepared or taken part in the
preparation of Specifications, documents, drawings, Engineering, designs,
specifications, schedules, terms or conditions, or may have designated
particular types of Products and/or Services to be furnished hereunder or
designated particular manufacturers or suppliers of Products or Services, or may
have taken part in the designation of any particular Subcontractor(s) or
subcontractor(s), or given vetoes or approvals with respect to the Work, or
otherwise become involved in the Work, will not give rise to any claim by the
Vendor or any Subcontractor or any defense to any warranty or other claims
asserted against the Vendor or any Subcontractor to the extent that any such
claim or defense arises out of any specifications, drawings, documents, or other
information, which the Vendor is deemed to have had notice of pursuant to
subsection 2.39(a) above and with respect to any such information arising after
the Effective Date which the Vendor had a reasonable opportunity to review.
2.40 CMI/HIC. From time to time throughout the Term of this Contract
the Parties may mutually agree as to the incorporation and integration of
CMI/HIC into the System in accordance with Exhibit D.
2.41 Site Acquisition Delay Testing. In any given System Area or System
Sub-Area within the Initial System, in the event Site Acquisition Substantial
Completion is delayed more than one hundred and fifty (150) days beyond the
forecasted date for Site Acquisition Substantial Completion as set forth in the
M5 Forecast (the "Site Acquisition Delay Period") provided to the Vendor with
the Build Notice applicable to such System Area or System Sub-Area, as the case
may be, due solely to the Owner's inability to achieve sufficient Site
Acquisition in such System Area and/or System Sub-Area, as the case may be, the
Vendor will have the right, but not the obligation, to commence Substantial
Completion testing (as deemed applicable and appropriate pursuant to good faith
mutual agreement between the Parties at such time but in any event to be
completed within thirty (30) days of such commencement) for that portion of the
otherwise incomplete PCS System or PCS Sub-System, as the case may be, in which
the Vendor has (i) completed all applicable Facilities Preparation Services and
(ii) fully Installed, to the extent possible at such time, all such Products to
be Installed by the Vendor or its Subcontractors on otherwise fully constructed
System Element Locations within such PCS System or PCS Sub-System. Subject to
Section 6, in the event the Vendor successfully completes such modified
Substantial Completion testing for such Installed portion of such otherwise
incomplete PCS System or PCS Sub-System, as the case may be, pursuant to and in
accordance with this subsection 2.41 and Exhibit B3, the Vendor will be entitled
to such portion of the payments that otherwise would be made by the Owner
pursuant to subsection 6.3(b) as applicable only to those Services and Products
actually provided by the Vendor pursuant to and in accordance with the terms of
this Contract in such portion of the otherwise incomplete PCS System and/or PCS
Sub-System, as the case may be, that was subject to testing pursuant to this
subsection 2.41. Nothing contained herein to the contrary will in any way modify
the Vendor's obligations as to the completion and testing of the remaining
portion of such PCS System pursuant to and in accordance with the terms of this
Contract, including but not limited to the Project Milestones set forth in
Exhibit A1. Nothing contained herein to the contrary will in any way require the
Owner to pay the Vendor amounts already paid or otherwise provided for pursuant
to any other provision of this Contract.
SECTION 3 AFFILIATES
3.1 Additional Affiliates. On a quarterly basis commencing on the
Effective Date and during the term of this Contract, the Owner may, upon fifteen
(15) days' prior written notice to the Vendor, designate any Person who has been
licensed or has access to or rights to use licenses for PCS in the United States
which is not an Initial Affiliate as an "Additional Affiliate"; provided that
the Vendor will have a reasonable opportunity to review and approve such
designation, such approval not to be unreasonably withheld, based upon (i)
reasonable credit criteria within the context of the PCS industry, (ii) the fact
that such proposed Additional Affiliate has not in the past materially breached
prior material agreements with the Vendor, (iii) the fact that the proposed
Additional Affiliate is not, at the time of such determination, a direct
competitor to the Vendor in the wireless telecommunications business and (iv)
the fact that the proposed Additional Affiliate is not, at the time of such
determination, otherwise engaged with the Vendor in a material agreement for the
purchase and/or supply of PCS CDMA wireless technology; and provided, further,
that (x) the Owner, any Partner or any Initial Affiliate has at least a ten
percent (10%) equity ownership in such Person, (y) such Person is controlled by
or under the common control with the Owner, any Partner or any Initial Affiliate
or (z) there exists between the Owner and such Person an Additional Affiliate
Arrangement.
3.2 Agreements with Initial Affiliates. During the term of this
Contract, the Owner will have the right, but not the obligation, to require that
the Vendor enter into separate agreements with any Initial Affiliate designated
by the Owner (each, an "Initial Affiliate Agreement") for the supply of Products
and Services on similar terms and conditions as those set forth herein that
relate to the initial build-out of the Initial System as set forth on Schedule
4; provided that the Vendor will not be required to include in any Initial
Affiliate Agreement any provisions substantially similar to those set forth in
subsections 2.3(a), 2.5, 2.23 (but only to the extent of the specific amounts
set forth in such subsection 2.23), 3.1, 3.3, 11.7, 15.1, 21.1, 24.1 and 27.5;
and provided further that after the date on which Final Acceptance of the last
PCS System to reach Final Acceptance has occurred, Initial Affiliate Agreements
(whether or not executed prior to such date) need not contain or retain
substantially the same terms and conditions as those set forth herein, except
for those terms and conditions related to pricing and warranties as are then
available to the Owner pursuant to this Contract. Any Initial Affiliate that
enters into an Initial Affiliate Agreement with the Vendor will have the right
to choose among the Products and Services offered to the Owner under this
Contract solely for use within the Nationwide Network.
3.3 Agreements with Additional Affiliates. During the term of this
Contract, the Owner will have the right, but not the obligation, to require that
the Vendor enter into separate agreements with any Additional Affiliate
designated by the Owner (each, an "Additional Affiliate Agreement") for the
supply of Products and Services at similar price and warranty terms as are then
available to the Owner pursuant to the terms of this Contract. The Vendor must
enter into good faith negotiations for the establishment of such Additional
Affiliate Agreements with any such Additional Affiliate promptly upon the
designation of such Additional Affiliate by the Owner and upon notice to the
Vendor that such Additional Affiliate desires to enter into an Additional
Affiliate Agreement. Any Additional Affiliate that enters into an Additional
Affiliate Agreement with the Vendor will have the right to choose among the
Products and Services offered to the Owner under this Contract solely for use
within the Nationwide Network.
3.4 Affiliate Rights. Notwithstanding anything herein contained to the
contrary, Affiliates will not be deemed third party beneficiaries to this
Contract or otherwise have any rights hereunder. Only the Owner may designate a
Person as an Affiliate in accordance with the terms of this Section 3 and only
the Owner has the right and/or the ability to enforce any rights hereunder
against the Vendor.
SECTION 4 SUBCONTRACTORS
4.1 Subcontractors. The Vendor will select Subcontractors in connection
with the performance of the Work such that all Products and Services provided by
any such Subcontractors meet the System Standards and reliability and
performance requirements set forth in this Contract. Regardless of whether or
not the Vendor obtains approval from the Owner of a Subcontractor or whether the
Vendor uses a Subcontractor recommended by the Owner, use by the Vendor of a
Subcontractor will not, under any circumstances: (i) give rise to any claim by
the Vendor against the Owner if such Subcontractor breaches its subcontract or
contract with the Vendor; (ii) give rise to any claim by such Subcontractor
against the Owner; (iii) create any contractual obligation by the Owner to the
Subcontractor; (iv) give rise to a waiver by the Owner of its rights to reject
any Defects or Deficiencies or Defective Work; or (v) in any way release the
Vendor from being solely responsible to the Owner for the Work to be performed
under this Contract.
4.2 The Vendor's Liability. The Vendor is the general contractor for
the Work and remains responsible for all of its obligations under this Contract,
including the Work, regardless of whether a subcontract or supply agreement is
made or whether the Vendor relies upon any Subcontractor to any extent. The
Vendor's use of Subcontractors for any of the Work will in no way increase the
Vendor's rights or diminish the Vendor's liabilities to the Owner with respect
to this Contract, and in all events, except as otherwise expressly provided for
herein, the Vendor's rights and liabilities hereunder with respect to the Owner
will be as though the Vendor had itself performed such Work. The Vendor will be
liable for any delays caused by any Subcontractor as if such delays were caused
by the Vendor.
4.3 No Effect of Inconsistent Terms in Subcontracts. The terms of this
Contract will in all events be binding upon the Vendor regardless of and without
regard to the existence of any inconsistent terms in any agreement between the
Vendor and any Subcontractor whether or not and without regard to the fact that
the Owner may have directly and/or indirectly had notice of any such
inconsistent term.
4.4 Assignability of Subcontracts to Owner. Each agreement between the
Vendor and a Subcontractor must contain a provision stating that, in the event
that the Vendor is terminated for cause, convenience, abandonment of this
Contract or otherwise, (i) each Subcontractor will continue its portion of the
Work as may be requested by the Owner and (ii) such agreement permits assignment
thereof without penalty to the Owner and, in order to create security interests,
to the Other Vendors, in either case at the option of the Owner and for the same
price and under the same terms and conditions as originally specified in such
Subcontractor's agreement with the Vendor.
4.5 Removal of Subcontractor or Subcontractor's Personnel. The Owner
has the right at any time to require removal of a Subcontractor and/or any of a
Subcontractor's personnel from Work on the System upon reasonable grounds and
reasonable prior notice to the Vendor. The exercise of such right by the Owner
will have no effect on the provisions of subsections 4.1 and 4.2.
4.6 Subcontractor Insurance. The Vendor must require its Subcontractors
to obtain, maintain and keep in force during the time they are engaged in
providing Products and Services hereunder adequate insurance coverage consistent
with Section 18 and Schedule 6 (provided that the maintenance of any such
Subcontractor insurance will not relieve the Vendor of its other obligations
pursuant to Section 18 and Schedule 6). The Vendor will, upon the Owner's
request, furnish the Owner with evidence of such insurance in form and substance
reasonably satisfactory to the Owner. All such insurance will be subject to the
Owner's approval. All Subcontractors must be of bondable financial condition.
Nothing herein will be deemed to bar the Vendor or any Subcontractor from
obtaining such insurance on a project basis for each of the Subcontractors
participating in such project.
4.7 Review and Approval not Relief of Vendor Liability. Any inspection,
review or approval by the Owner permitted under this Contract of any portion of
the Work by the Vendor or any Subcontractor will not relieve the Vendor of any
duties, liabilities or obligations under this Contract, but nothing contained in
this subsection 4.7 will be deemed a bar of any waiver given by the Owner to the
Vendor pursuant to and in accordance with the terms of this Contract.
4.8 Vendor Warranties. Except as otherwise expressly provided in
Section 17, the warranties of the Vendor pursuant to Section 17 will be deemed
to apply to all Work performed by any Subcontractor as though the Vendor had
itself performed such Work. Except as otherwise specifically provided in Section
17, the Parties agree that such warranties will not be enforceable merely on a
"pass-through" basis. The Owner may, but will not be obligated to, enforce such
warranties of any Subcontractor to the extent that the Owner determines that the
Vendor is not paying and/or performing its warranties; provided that any such
election by the Owner will not relieve the Vendor from any obligations or
liability with respect to any such warranty.
4.9 Payment of Subcontractors. The Vendor must make all payments to all
Subcontractors (except in the case of legitimate disputes between the Vendor and
any such Subcontractor arising out of the agreement between the Vendor and such
Subcontractor) in accordance with the respective agreements between the Vendor
and its Subcontractors such that Subcontractors will not be in a position to
enforce liens and/or other rights against the Owner, the System or any part
thereof.
SECTION 5 TERM OF CONTRACT
5.1 Initial Term. The initial term of this Contract (the "Initial
Term") is ten (10) years from the Effective Date, subject to the terms and
conditions of this Contract including, without limitation, the termination
provisions set forth in Section 24.
5.2 Renewal. This Contract is subject to renewal for one year periods
(all such periods plus the Initial Term, the "Term") following the expiration of
the Initial Term, on the same terms and conditions contained herein, unless
either Party gives notice to each other Party of its intention not to renew this
Contract within ninety (90) days prior to the expiration of the then current
Term.
SECTION 6 PRICES AND PAYMENT
6.1 Prices. The prices for the Work to be performed pursuant to this
Contract (collectively, the "Contract Price") are as set forth on Schedules 2
and 3, subject to the price variation provisions contained on Schedule 2.
Notwithstanding the prices set forth on Schedules 2 and 3 and the Contract
Price, the Vendor will provide the Owner credits in aggregate value not to
exceed [ ] dollars ($[ ]) to purchase any Products in the following System Areas
(and any and all System Sub-Areas included therein) and in the following amounts
per such System Areas:
System Area Credit Amount
Detroit $[ ]
Milwaukee $[ ]
Denver $[ ]
Salt Lake $[ ]
Spokane $[ ]
The Owner is also entitled to additional purchase credits of up to [_________]
dollars ($[__________]) to be applied in the Owner's discretion to the purchase
of any Products in any or all of the above listed System Areas (and any and all
System Sub-Areas included therein). At any time during the Term of this Contract
that the Owner wishes to apply the purchase credits referenced in this
subsection 6.1 to any of its Product purchases for the System Areas listed
immediately above, the Owner must notify the Vendor of its intent to do so and
it will be the Vendor's sole responsibility, throughout the Term of this
Contract, to keep account of the remaining purchase credits available to the
Owner. Prices for the Work not otherwise set forth on Schedules 2 or 3, if not
otherwise set forth in this Contract, will be no greater than the Vendor's best
list prices then in effect at the time of ordering by the Owner (as established
by the Vendor's then applicable Customer Price Guide for sales in the United
States) and at discounts otherwise provided to the Owner pursuant to the terms
of this Contract. Notwithstanding the foregoing, the aforesaid credits may not
be applied to the purchase of any OTAF Products or Services and/or any Actiview
Products or Services.
6.2 Price Reduction. The Contract Price will be reduced by all amounts
saved as a result of Engineering changes suggested by the Owner which are
incorporated into the Specifications by the Vendor provided that the Vendor
reasonably believes that such changes will not make it impossible or
impracticable to comply with any of its obligations under this Contract,
including, without limitation, those Vendor obligations relating to the
performance criteria applicable to the System. Any reduction in Contract Price
pursuant to the preceding sentence will be agreed upon promptly by the Owner and
the Vendor. Failure of the Parties to mutually agree to such price reductions
within ten (10) days from the date the Owner delivered written notice to the
Vendor of the need for such price reduction due to incorporated Engineering
changes will result in the automatic reference of such matter to dispute
resolution in accordance with subsection 23.1. During the pendency of any such
dispute resolution prices payable pursuant to subsection 6.1 will be payable by
the Owner to the Vendor at the reduced level pursuant to this subsection 6.2. If
in accordance with subsection 23.1 such dispute resolution results in a finding
that such price reduction was not in fact justified then the Owner will
reimburse the Vendor the amounts that would otherwise have been payable to the
Vendor during the pendency of such dispute resolution.
6.2.1 TCU Payments. Notwithstanding anything contained in this
Section 6 to the contrary, the Owner will purchase and the Vendor will provide
the first eleven thousand one hundred (11,100) TCUs at a price of two thousand
three hundred fifteen dollars ($2,315.00) each. Any additional TCUs purchased by
the Owner in excess of eleven thousand one hundred (11,100) TCUs will be sold by
the Vendor to the Owner for one thousand five hundred five dollars ($1,505.00)
each. From July 15, 1997 through December 31, 1997, the Vendor will provide one
(1) HCU free of charge for every four (4) TCUs purchased by the Owner at the one
thousand five hundred five dollars ($1,505.00) price per unit. At any time after
December 31, 1997, any TCUs or HCUs purchased by the owner will be provided at
the prices otherwise set forth in Schedules 2 and 3 to the Contract.
6.2.2 Additional Cabinet Payments. Notwithstanding anything
contained in this Section 6 to the contrary, the Vendor shall supply to the
Owner at the Vendor's sole cost and expense any and all equipment (including any
and all power supplies, cables, cabinets, T-1 facilities and any other ancillary
equipment), labor, materials and services, including installation and
de-installation, in connection with the supply of additional cabinets to the
Owner where a requirement for more than twenty four (24) Channels already exists
or such a requirement arises before the later of (i) July 15, 1997 and (ii) the
first general availability of any HCU(s) by the Vendor to the Owner. On or
before November 15, 1997, the Owner will advise the Vendor of its requirements
concerning disposition of the TCUs purchased for one thousand five hundred five
dollars ($1,505.00) each and any additional cabinets provided by the Vendor to
accommodate TCUs in excess of the first eleven thousand one hundred (11,100)
TCUs. If the Owner elects to redeploy or retain any such additional TCUs and/or
cabinets, the Vendor may invoice the Owner for such additional Equipment based
upon the applicable prices set forth in Schedules 2 and 3 to the Contract. The
Vendor will be responsible for any and all costs arising out of or in connection
with deinstallation and/or removal of any such additional Equipment.
6.3 Payments. Except with respect to Facilities Preparation Services,
RF Engineering, SCP/HLR Products, AS Products and Services, OTAF Products and
Services and Actiview Products and Services as set forth below, an invoice may
be submitted to the Owner only after shipment of a Product or performance of a
Service. Invoices for Products delivered and Services performed for any given
PCS System or PCS Sub-System on or prior to Final Acceptance of the PCS System
and/or PCS Sub-System to which such invoices relate are payable in the following
manner:
(a) [__________] percent of the amount of each invoice will be paid
within [__________] days from receipt of the invoice by the Owner;
(b) [__________] percent of the amount of such invoice will be paid
within [_________] days from the later of (i) Substantial Completion of the PCS
System or PCS Sub-System to which such invoice relates and (ii) receipt of the
invoice by the Owner;
(c) subject to subsection 6.3(d) below, [__________]percent of the
amount of the invoice will be paid within [__________] days from the later of
(i) Final Acceptance of a PCS System to which such invoice relates and (ii)
receipt of the invoice by the Owner. The Owner will not be obligated to make any
such Final Acceptance payment pursuant to this subsection 6.3(c) to the Vendor
for any PCS System or PCS Sub-System within the Initial System, until and unless
the SCP/HLRs to be delivered and installed in accordance with the SCP/HLR
Specifications are so delivered and installed and operating in accordance with
such SCP/HLR Specifications;
(d) Notwithstanding anything stated in this subsection 6.3 to the
contrary, upon the Final Acceptance of any PCS Sub-System, the Owner will only
be required to pay to the Vendor [__________]percent of the amount of the
invoice applicable to such PCS Sub-System within thirty (30) days from the later
of (i) Final Acceptance of such PCS Sub-System and (ii) receipt of the invoice
applicable to such PCS Sub-System by the Owner. The Owner will pay the remaining
[__________] percent of the amount of the invoice applicable to such PCS
Sub-System upon the earlier of (i) ninety (90) days after the date of Final
Acceptance of such PCS Sub-System and (ii) the Final Acceptance of the next
succeeding PCS Sub-System within such PCS System; and
(e) Pursuant to subsection 2.6(d) and provided that any MSCs sought to
be covered hereby have in fact been installed by the Vendor in accordance with
subsection 2.6(d), the Owner will pay to the Vendor [__________] percent of the
price invoiced to the Owner for any MSC within any PCS System within the Initial
System upon the Vendor's successful achievement of Milestone 5 (as set forth in
Exhibit A1) in such PCS System and an additional [__________] percent of the
price invoiced to the Owner for any such MSC upon the Vendor's successful
achievement of Milestone 8 (as set forth in Exhibit A1) in such PCS System. All
other amounts payable by the Owner to the Vendor for MSCs within any PCS System
within the Initial System will be otherwise payable in accordance with the terms
of this Contract provided that the Owner will not be obligated to make any
payments to the Vendor for MSCs pursuant to subsection 6.3(b) to the extent it
made any payments for any such MSCs pursuant to this subsection 6.3(d).
Notwithstanding the foregoing, (i) invoices for RF Engineering for each
PCS System and/or PCS Sub-System will be payable in accordance with subsection
6.4(b) below and (ii) invoices for Facilities Preparation Services within any
PCS System may be submitted by the Vendor in accordance with the terms of
Exhibit B2 and will be payable by the Owner with respect to each System Element
Facility within thirty (30) days after the date of acceptance by the Owner of
such System Element Facility in accordance with the terms of Exhibit B2.
Payments for third party manufactured Products (other than any PCS Products or
any Products integral to construction (e.g., concrete, nuts, bolts and other
customary building supplies)) purchased by the Vendor or its Subcontractors for
installation on the Owner's System Element Locations during the course of and as
part of Facilities Preparation Services may be made by the Owner on a current
basis (but in no event more often than monthly during the course of such
Facilities Preparation Services) as mutually agreed by the Parties.
6.3.1 Additional Products not in Initial System or Otherwise
Provided for in Section 2.2. Any invoice for Products delivered and installed by
the Vendor and Services performed by the Vendor not otherwise provided for under
this subsection 6.3.1, subsection 2.2(a), subsection 2.2(b), subsection 2.2(c)
or as otherwise specifically set forth in this Contract will be payable as
follows: [__________] percent of the amount of the invoice will be payable
within thirty (30) days following receipt of such Products by the Owner or the
full performance of the Services by the Vendor and the outstanding balance will
be payable upon final acceptance by the Owner of the Products or Services to
which such invoice relates. Any invoice (not otherwise provided for under this
subsection 6.3) for Products delivered by the Vendor but not installed by the
Vendor to which such invoice relates will be payable by the Owner at the level
of [__________] percent of the amount of such invoice within thirty (30) days
from the date of delivery of such invoice to the Owner. For any Services not
otherwise covered by the last paragraph of subsection 6.3 above, including,
without limitation, repair services, Engineering and Installation Services not
performed pursuant to a combined furnish and install order, and maintenance fees
(including Annual Release Maintenance Fees), an invoice will be payable by the
Owner at the level of [__________] percent of the amount of such invoice within
thirty (30) days from the date of delivery of such invoice to the Owner or as
otherwise mutually agreed in good faith between the Parties. For the purposes of
this last paragraph of this subsection 6.3 any acceptance or "final acceptance"
relevant to the Owner's obligation to pay will be deemed to occur on the
earliest of (i) the Owner's In Revenue use of such Products and/or Services,
(ii) the Owner's notification of acceptance of such Products and/or Services and
(iii) thirty (30) days following, as applicable, the Owner's completion of
Installation of the Products (where the Vendor is not performing Installation
Services), without the Owner's having given notice of non-acceptance of such
Products and/or Services.
6.3.2 SCP/HLR Payments. Notwithstanding anything contained in
this Section 6 to the contrary, any invoice for SCP/HLR Products delivered
and/or installed by the Vendor will be payable as follows: (a) (i) [__________]
percent of the amount of any invoice for SCP/HLR Hardware will be payable within
[________] days following the installation by the Vendor of such SCP/HLR
Hardware at the appropriate HLR Designated Switch Sites, (ii) [__________]
percent of the amount of any invoice for SCP/HLR Hardware will be payable within
[_______] days following the Owner's Field Acceptance of such installed SCP/HLR
Hardware in accordance with the SCP/HLR Specifications and (iii) the remaining
[__________] percent of the amount of any invoice for SCP/HLR Hardware will be
payable within [_________] days of the Owner's Final Acceptance of such
installed SCP/HLR Hardware in accordance with the SCP/HLR Specifications; and
(b) (i) [__________] percent of the amount of any invoice for SCP/HLR Software
will be payable within [________] days of the Owner's Field Acceptance in
accordance with the SCP/HLR Specifications and (ii) the remaining [__________]
percent of the amount of any invoice for SCP/HLR Software will be payable within
[________] days of the Owner's HLR Final Acceptance in accordance with the
SCP/HLR Specifications.
6.3.3. AS Products Payments. (a) Notwithstanding anything
contained in this Section 6 to the contrary, any invoice for AS Software
delivered and/or installed by the Vendor will be payable by the Owner as
follows: (i) [__________] percent of the total price for any AS Software order
for such AS Software will be payable within [_________] days of the order
placement for such AS Software by the Owner, (ii) [__________] percent of the
amount of any invoice for ordered AS Software will be payable within
[__________] days of the time of delivery by the Vendor of such AS Software,
(iii) [__________] percent of the amount of any invoice for ordered AS Software
will be payable within [__________] days of AS Functional Acceptance of such AS
Software, and (iv) the remaining [__________] percent of the amount of any
invoice for ordered AS Software will be payable within [__________] days of AS
Final Acceptance of such AS Software.
(b) The Vendor may invoice the Owner for [_________]
percent of the passed-through cost (without ▇▇▇▇-ups, add-ons or charges of
any kind (except as explicitly provided in Appendix I)) of any third party man-
ufactured AS Equipment supplied by the Vendor for the AS Software for the AS
Software System in accordance with the AS Statement of Work and the Owner will.
be required to pay any such invoice for third-party AS Equipment within [______]
days of the Owner's receipt and reasonable acceptance thereof. The Vendor may
invoice the Owner for AS Services (if applicable) pursuant to the first sen-
tence of subsection 6.3.1 above. AS Software Annual Maintenance Services
will be provided by the Vendor in accordance with the Annual Application
Software Maintenance Services Fees set forth on Appendix I and such fees will
be invoiced to the Owner with the Annual Software Release Maintenance Fees.
6.3.4 OTAF Payments. Any and all SPARC/OTAF Products and
Services provided by the Vendor to the Owner pursuant to the OTAF Statement of
Work will be provided, installed and tested at the Vendor's sole cost and
expense. Any such SPARC/OTAF Products may be retained by the Owner, to the
extent it so chooses in its sole and absolute discretion, upon the provision and
installation of SCP/OTAF Products. The Vendor will be solely responsible for any
and all costs associated with the deinstallation and/or removal of any
SPARC/OTAF Products upon the availability and provision of SCP/OTAF Products
pursuant to the OTAF Statement of Work. Notwithstanding anything contained in
this Section 6 to the contrary, any invoice for SCP/OTAF Products delivered
and/or installed by the Vendor will be payable as follows: (i) [__________]
percent of the amount of any invoice for SCP/OTAF Products will be payable
within [__________] days following the installation by the Vendor of the
SPARC/OTAF Products in the Test-bed Laboratory in accordance with the OTAF
Statement of Work, (ii) [__________] percent of the amount of any invoice for
SCP/OTAF Products will be payable within [__________] days following the Owner's
OTAF Field Acceptance of installed SPARC/OTAF Products in accordance with the
OTAF Statement of Work, (iii) [__________] percent of the amount of any invoice
for SCP/OTAF Products will be payable within [__________] days following the
delivery of OTAF Software to the Test-bed Laboratory, (iv) [__________] percent
of the amount of any invoice for SCP/OTAF Products will be payable within
[__________] days following the Owner's OTAF Field Acceptance of installed
SCP/OTAF Products in accordance with the OTAF Statement of Work, and (v) the
remaining [__________] percent of the amount of any invoice for SCP/OTAF
Products will be payable within [__________] days of the Owner's Final
Acceptance of such installed SCP/OTAF Products in accordance with the OTAF
Statement of Work.
6.3.5 Actiview Payments. (a) Notwithstanding anything
contained in this Section 6 to the contrary, any invoice for Actiview Software
delivered and/or installed by the Vendor will be payable by the Owner as
follows: (i) [__________] percent of the total price for any Actiview Software
order for such Actiview Software will be payable within [__________] days of the
order placement for such Actiview Software by the Owner, (ii) [__________]
percent of the amount of any invoice for ordered Actiview Software will be
payable within [__________] days of the time of delivery by the Vendor of such
Actiview Software, (iii) [__________] percent of the amount of any invoice for
ordered Actiview Software will be payable within [__________] days of Actiview
Functional Acceptance of such Actiview Software, and (iv) the remaining
[__________] percent of the amount of any invoice for ordered Actiview Software
will be payable within [__________] days of Actiview Final Acceptance of such
Actiview Software.
(b) The Vendor may invoice the Owner for Actiview
Services (if applicable) pursuant to the first sentence of subsection 6.3.1
above. Actiview Software Annual Maintenance Services will be provided by
the Vendor pursuant to the Annual Application Software Maintenance Ser-
vices Fees as set forth on Appendix T and such fees will be invoiced to the
Owner with the Annual Software Release Maintenance Fees.
6.4 Payments for Facilities Preparation Services. (a) Upon receipt of
payment from the Owner for Facilities Preparation Services the Vendor will
promptly pay each Subcontractor for Facilities Preparation Services the amount
to which each Subcontractor is entitled pursuant to such Subcontractor's
agreement with the Vendor, based on each Subcontractor's portion of such Work.
By appropriate agreement in each Subcontractor's agreement with the Vendor, the
Vendor will require such Subcontractor to make payments to sub-Subcontractors
and materialmen in a similar manner. The Owner has no duty or obligation to
insure the payment of money to a Subcontractor, sub-Subcontractor, materialman
or any other third party, any such payment being the obligation of the Vendor.
Subcontractors, sub-Subcontractors, materialmen and any other third parties will
not be deemed third party beneficiaries of the Owner's obligations to pay the
Vendor. On or before the Owner's acceptance of the Facilities Preparation
Services of any System Element Facility within any given PCS System in
accordance with the terms of Exhibit B2, the Owner will have received details
(in a form reasonably satisfactory to the Owner) of all invoices and charges for
such Facilities Preparation Services incurred by the Vendor in connection with
the Facilities Preparation Services for such System Element Facility.
(b) The Owner will make payment to the Vendor for RF Engineering
Services performed by the Vendor within any given System Area pursuant to the
terms of this Contract based upon the following: (i) [__________] percent of the
"RF Engineering Services price" within the applicable System Area will be
payable by the Owner within [__________] days after receiving the Preliminary RF
Design for such System Area pursuant to Milestone 2 for such System Area as set
forth on Exhibit A1; (ii) [__________] percent of the RF Engineering Services
price within the applicable PCS System will be payable by the Owner within
[__________] days after the determination of the Final Site Count and delivery
of the Final RF Design for such PCS System in accordance with subsection 2.6 and
Milestone 5 for such System Area as set forth on Exhibit A1; and (iii)
[__________] percent of the RF Engineering Services price will be payable by the
Owner within the applicable PCS System within [__________] days of the Vendor's
Installation of the Products for such PCS System in accordance with the terms of
the Contract and Milestone 7 for such System Area as set forth on Exhibit A1.
For the purposes of this subsection 6.4(b) the term "RF Engineering Services
price" will mean the number of System Element Facilities within the applicable
PCS System pursuant to the build-out of the Initial System multiplied by the
Vendor's System Element Facility RF Engineering price as set forth on Schedule
3. In any given PCS System and/or System Area the RF Engineering Services price
will be readjusted (and any amounts owed to either Party will be reimbursed) at
the point in time that payment would be made for such RF Engineering pursuant to
clause (iii) of this subsection 6.4(b) in accordance with the determination of
the actual Final Site Count and delivery of Final RF Design applicable to such
PCS System.
6.5 Monthly Forecasts. Commencing on the Effective Date, the Vendor
will provide the Owner with monthly forecasts of the costs of RF Engineering and
Facilities Preparation Services in each PCS System and PCS Sub-System in which
such Services are being provided by the Vendor and/or any of its Subcontractors
throughout the period that any such Services are being provided during the Term
of this Contract. The forecasts provided by the Vendor pursuant to this
subsection 6.5 must be in sufficient detail to reasonably inform the Owner of
the nature of the costs to be incurred for each of RF Engineering and Facilities
Preparation Services in each of the PCS Systems and/or any PCS Sub-Systems in
which such Services are being provided by the Vendor and/or any of its
Subcontractors pursuant to the terms of this Contract.
6.6 No Payment in Event of Material Breach. Notwithstanding any other
provision to the contrary contained herein, the Owner will have no obligation to
make any payment with respect to the affected PCS System and/or PCS Sub-System
in addition to amounts previously paid to the Vendor at any time the Vendor is
in material breach of this Contract with respect to such PCS System and/or PCS
Sub-System, as the case may be, until and unless such breach is cured or waived
by the Owner in accordance with the terms of this Contract.
6.7 Microwave Relocation Delay Partial Payments. In the event the
Vendor has achieved Milestone 7 (as set forth on Exhibit A1) within any given
PCS System and/or PCS Sub-System, as the case may be, but there is a delay in
the Owner's completion of Microwave Relocation in such PCS System and/or PCS
Sub-System, as the case may be, pursuant to and in accordance with subsection
2.38, then during the Microwave Delay Period within such PCS System and/or PCS
Sub-System, as the case may be, the Owner agrees to pay to the Vendor (i)
[__________] percent of the amounts otherwise due to the Vendor under subsection
6.3(b) on or before [_________] of such Microwave Delay Period, (ii) an
additional [__________] percent of the amounts otherwise due to the Vendor under
subsection 6.3(b) on or before [_____________] of such Microwave Delay Period,
(iii) an additional [__________] percent of the amounts otherwise due to the
Vendor under subsection 6.3(b) on or before [______________] of such Microwave
Delay Period, and (iv) any remaining amounts still outstanding pursuant to
subsection 6.3(b) on the last day of such Microwave Delay Period provided that
Substantial Completion (as deemed applicable and appropriate pursuant to good
faith mutual agreement between the Parties at such time) of such PCS System
and/or PCS Sub-System, as the case may be, will have been achieved by the Vendor
in accordance with the terms of this Contract and Exhibit B3. Nothing contained
herein to the contrary will in any way release the Vendor from its obligations
or otherwise modify the Vendor's obligations as to the completion of testing in
accordance with Exhibit B3 once Microwave Relocation in such affected PCS
System, PCS Sub-System or affected portion of a PCS System and/or PCS Sub-System
has been successfully achieved by the Owner. Nothing contained herein to the
contrary will in any way require the Owner to pay the Vendor amounts already
paid or otherwise provided for pursuant to any other provision of this Contract.
6.8 In Revenue Payments. At any time during the Site Acquisition Delay
Period or the Microwave Delay Period, as the case may be, the Owner may, in its
sole discretion, decide to place the PCS System or PCS Sub-System, as the case
may be, or any portion thereof which is subject to such delay into In Revenue
Service. In the event the Owner does in fact decide, in its sole discretion, to
place any PCS System or PCS Sub-System, as the case may be, or any portion of a
PCS System or PCS Sub-System, as the case may be, into In Revenue Service during
any such Site Acquisition Delay Period or Microwave Delay Period, as the case
may be, the Owner will be obligated to pay to the Vendor the amounts it would
have otherwise paid to the Vendor upon the Substantial Completion of such In
Revenue PCS System or In Revenue portion of such PCS System, as the case may be,
and the Vendor will be entitled to commence Substantial Completion testing for
such In Revenue PCS System or In Revenue portion of such PCS System; provided
that the Owner understands that the Vendor can only do such Substantial
Completion testing as set forth in Exhibit B3 as is at such time applicable and
appropriate (pursuant to the good faith mutual agreement of the Parties at such
time) to such In Revenue PCS System or PCS Sub-System or In Revenue portion of
such PCS System or PCS Sub-System. The Parties expressly understand and agree
that this subsection 6.8 will only be effective in the event that the Owner
chooses, in its sole discretion, to place a PCS System, PCS Sub-System or a
portion thereof In Revenue during a Microwave Delay Period or Site Acquisition
Delay Period, as applicable to such In Revenue PCS System or In Revenue portion
of such PCS System or PCS Sub-System, as the case may be. Nothing contained
herein to the contrary will in any way modify the Vendor's obligations as to the
completion and testing of the remaining incomplete non-In Revenue portion of any
such PCS System or PCS Sub-System, as the case may be, which is otherwise
partially In Revenue pursuant to and in accordance with the terms of this
Contract, including but not limited to the Project Milestones set forth on
Exhibit A1. Nothing contained herein to the contrary will in any way require the
Owner to pay the Vendor amounts already paid or otherwise provided for pursuant
to any other provision of this Contract.
SECTION 7 ORDERS AND SCHEDULING
7.1 Initial Commitment. Subject to subsection 7.2 and to subsection 2.6
and the determination of the Final Site Count and the delivery of the Final RF
Engineering Plan for each PCS System and PCS Sub-System, the Parties understand
that the quantities of Products and Services identified on Schedules 2 and 3
which are necessary for the build-out by the Vendor of the Initial System
pursuant to the terms and conditions of this Contract constitute the Owner's
initial purchase commitment under this Contract (the "Initial Commitment").
7.2 Change Orders. The Owner has the right by way of written orders
("Change Orders") to request Expansions, other revisions and/or modifications in
the Work, including but not limited to the Specifications, the manner of
performance of the Work or the timing of the completion of the Work; provided
that specific Change Orders will be submitted to the Vendor and the Vendor
(subject to the Owner's agreement) will be entitled to make reasonable price
and/or Project Milestone adjustments to the Contract Price in the case of
material modifications. The Vendor must promptly notify the Owner of any such
requested change or changes to Products which may materially affect the
operation and/or maintenance of the System, any PCS System, any PCS Sub-System
or any part thereof. The Parties agree that within fifteen (15) Business Days
after the Owner's initial request for a Change Order pursuant to this subsection
7.2 they will mutually agree to all aspects of such Change Order which agreement
will be evidenced by a writing executed by an authorized representative of each
of the Parties. In the event the Vendor refuses to agree to any such Change
Order within such fifteen (15) day period then the Vendor will provide a written
notice to the Owner detailing its reasons for such refusal and if the Owner, at
such time, disagrees with the reasons set forth in such Vendor notice the matter
will then be referred to dispute resolution pursuant to Section 23. Nothing
contained in this subsection 7.2 is intended to limit the Vendor's right, from
time to time, to make suggestions for modifications to the Work or the
Specifications pursuant to and in accordance with this subsection 7.2 and the
terms of this Contract, provided that in any such event the Owner, in its sole
and absolute discretion pursuant to the terms of this Contract may refuse to
make any such modification or otherwise agree to issue a Change Order
incorporating any such Vendor suggestion.
7.3 Cancellation. During the term of this Contract, and subject to
Section 24, the Owner will have the right, but not the obligation, at any time
to cancel, in whole or in part, any order made pursuant to the terms of this
Contract upon advance written notice to the Vendor. In the event of a
cancellation permitted hereunder, the Owner will pay to the Vendor order
cancellation charges in accordance with, and pursuant to, the terms of Schedule
11.
SECTION 8 INSTALLATION
8.1 Installation. The Vendor will furnish and install the Products
pursuant to the Project Milestones set forth on Exhibit A and in accordance with
the requirements and criteria set forth in Exhibit D. In accordance with and
subject to the Project Milestones set forth on Exhibit A (and the intervals set
forth therein and herein), the Vendor will complete all Product Installation in
any given PCS System and/or PCS Sub-System in conformance with the requirements
and criteria set forth in Exhibit D within thirty-two and one-half (32-1/2) days
of completion of the Facilities Preparation Services pursuant to Milestone 6 (as
set forth in Exhibit A1) in such PCS System and/or PCS Sub-System.
8.2 No Interference. The Vendor will install the Products and build
each of the PCS Systems and PCS Sub-Systems so as to cause no unauthorized
interference with or obstruction to lands and thoroughfares or rights of way on
or near which the Installation work may be performed. The Vendor must exercise
every reasonable safeguard to avoid damage to existing facilities, and if
repairs or new construction are required in order to replace facilities damaged
by the Vendor due to its carelessness, negligence or willful misconduct, such
repairs or new construction will be at the Vendor's sole cost and expense.
SECTION 9 ACCEPTANCE TESTING AND ACCEPTANCE
9.1 Acceptance Testing. The Vendor must carry out the Acceptance Tests
on the Products, the PCS Systems and the PCS Sub-Systems as specified in Exhibit
B3 and each PCS System and PCS Sub-System must successfully achieve acceptance
(including Substantial Completion and Final Acceptance) in accordance with the
terms of Exhibit B3.
9.2 Costs and Expenses. The costs and expenses of such Acceptance Tests
will be borne by the Vendor, and the Owner will not be charged or billed for
such costs and expenses, except to the extent that such charges or expenses are
not included in the Contract Price pursuant to and in accordance with the terms
of this Contract. If the Acceptance Tests performed by the Vendor are not
satisfied in accordance with the relevant requirements of Exhibit B3 or are
otherwise inconclusive in the reasonable judgment of the Owner, the Owner will
have the right to order further Acceptance Tests at the sole cost and expense of
the Vendor.
9.3 Notification. The Vendor will notify the Owner at least ten (10)
days prior to the performance of any Acceptance Tests. Prior to or at the first
practicable date after such notification, the Vendor and the Owner will each
agree upon and approve any test forms to be used as part of the particular
Acceptance Test being conducted.
9.4 Presence at Acceptance Tests. The Owner and its representatives
will be permitted to witness and have unrestricted access to the Vendor's and
its Subcontractors' Acceptance Tests, provided that no such access will
materially interfere with or cause undue delay of the Vendor's Work. Nothing
herein will be deemed to require the Vendor to reimburse the Owner for any costs
incurred by the Owner in the Owner's participation in or observation of
Acceptance Tests or other tests performed by the Vendor pursuant to and in
accordance with the terms of this Section 9.
9.5 Correction of Defects. (a) If any Acceptance Test is not satisfied,
the Vendor will, at its sole cost and expense, (i) in writing, notify the Owner
of such failure, and (ii) promptly correct whatever Defects or Deficiencies
caused such Acceptance Test not to be satisfied. After such correction, the
Vendor must (i) repeat at its sole cost and expense the failed Acceptance Tests
and as many other Acceptance Tests as are necessary to ensure in the reasonable
opinion of the Owner that such correction made by the Vendor would not have
affected the outcome of such other Acceptance Tests, and (ii) in writing, notify
the Owner as to what correction was made and what Acceptance Tests were
repeated.
(b) If Final Acceptance of a PCS System and/or PCS Sub-System, as the
case may be, cannot be achieved after Substantial Completion of such PCS System
or PCS Sub-System (provided that the Vendor will have fully built-out the Final
RF Engineering Plan in accordance with the Final Site Count in accordance with
the terms of this Contract) because such PCS System or PCS Sub-System, as the
case may be, fails to meet applicable performance criteria as set forth in
Exhibit F, but would do so with only the implementation and installation of
additional Base Stations at additional System Element Locations over and above
the Final Site Count for such PCS System or PCS Sub-System, as the case may be,
the Owner will have the right, in its sole and absolute discretion, to (i)
finally accept such PCS System and/or PCS Sub-System, as the case may be, in
which case the Parties will mutually agree in good faith on revised performance
criteria for such PCS System or PCS Sub-System, as the case may be, or (ii)
require the Vendor to continue to work (in which case Final Acceptance of such
PCS System or PCS Sub-System, as the case may be, will be delayed until
completion of the work and testing contemplated herein and in Exhibit B3) to
cause such PCS System or PCS Sub-System, as the case may be, to perform at the
applicable levels of the then existing performance criteria as set forth in
Exhibit F, in which case, the required additional Base Stations and additional
System Element Locations will be treated as provided for in subsections 17.5(c)
and 17.10. Any additional Base Station(s) paid for by the Owner pursuant to this
subsection 9.5(b) (which would only have to be paid for (including any costs
associated with the installation thereof) by the Owner upon the subsequent
achievement of Final Acceptance by the Vendor in accordance with Exhibit B3
which such payment will be made with the payments otherwise made on Final
Acceptance pursuant to Section 6) will be offset against the number of new Base
Stations that may subsequently be for the account of the Owner pursuant to the
terms of subsection 17.5(c). If the Parties are unable to agree upon revised
performance criteria as provided in clause (i) above, the matter will be
resolved in accordance with the provisions of subsection 23.3.
9.6 Acceptance Certificate. Upon the successful completion of the
Acceptance Tests for a PCS System, and/or a PCS Sub-System or any part thereof
conducted by the Vendor, the Vendor must submit to the Owner an Acceptance
Certificate certifying that (i) such Acceptance Tests have been successfully
completed, (ii) the Work so tested has been completed in accordance with the
terms of this Contract, and (iii) if applicable, that the remainder of the Work
is continuing in accordance with the Project Milestones set forth on Exhibit A.
Upon its reasonable satisfaction that such Acceptance Certificate is correct and
complete, the Owner will acknowledge such certification by signing the
Acceptance Certificate. In the event of any dispute as to the results of any
Acceptance Tests, such dispute will be resolved pursuant to the dispute
resolution mechanisms set forth in Section 23 including, but not limited to, the
Third Party Engineer review mechanism set forth in subsection 23.3.
9.7 AS Acceptance Testing and Acceptance. (a) After installation of the
AS Software, or any part thereof as set forth in Appendix K, the Owner will
carry out Functional Acceptance Tests in accordance with the provisions of
Appendix K, testing the compliance of the AS Software with the AS Statement of
Work. The Owner will start the AS Functional Acceptance Tests no later than
seven (7) days after installation of such AS Software and complete the AS
Functional Acceptance Tests no later than fourteen (14) days after installation
of such AS Software.
(b) After such AS Software has successfully passed the Functional
Acceptance Tests, the Owner will commence the AS Final Acceptance Test in
accordance with the provisions of Appendix K. The duration of the AS Final
Acceptance Test shall be thirty (30) days after successful completion of the AS
Functional Acceptance Test.
(c) If the Owner fails to conduct either the AS Functional Acceptance
Tests or the Final Acceptance Test within the time periods set forth in
subsections 9.7(a) and 9.7(b), the AS Software shall be deemed to have met the
Acceptance Test criteria on the last day of the time period allotted for the
applicable AS Acceptance Test.
(d) The costs and expenses of the AS Acceptance Tests will be borne by
the Owner. Upon request of the Owner, the Vendor will provide reasonable support
to the Owner during the AS Functional Acceptance Tests and the AS Final
Acceptance Tests.
(e) If the AS Acceptance Tests show that the AS Software complies with
the AS Statement of Work, such AS Software will be accepted by the Owner by
confirming the results in a written report.
(f) If any AS Acceptance Test is not satisfied, the Owner will (i) in
writing, notify the Vendor of such failure, and (ii) the Vendor will promptly
correct whatever Defects or Deficiencies caused such AS Acceptance Test not to
be satisfied. After such correction, the Vendor must (i) repeat at its sole cost
and expense the failed AS Acceptance Tests and as many other AS Acceptance Tests
as are necessary to ensure in the reasonable opinion of the Owner that such
correction made by the Vendor would not have affected the outcome of such other
AS Acceptance Tests, and (ii) in writing, notify the Owner as to what correction
was made and what AS Acceptance Tests were repeated. Nothing stated herein to
the contrary will in any way limit the Owner's right to liquidated damages
pursuant to subsection 15.8 or other remedies under this Contract in the event
the Vendor fails to deliver AS Products in accordance with the requirements of
Appendix G on the dates originally scheduled for such deliveries.
(g) Minor Defects and shortcomings not affecting the operational use of
any part of the AS Software shall not give rise to withholding the acceptance
provided that the Vendor undertakes to remedy such Defects and shortcomings as
soon as reasonably possible, pursuant to the procedures described in Appendix K.
9.8 Actiview Acceptance Testing and Acceptance. (a) After installation
of Actiview Software as set forth in Appendix S, the Owner will carry out
Actiview Functional Acceptance Tests in accordance with the provisions of
Appendix S, testing the compliance of the Actiview Software with the Actiview
Statement of Work. The Owner will start the Actiview Functional Acceptance Tests
no later than thirty (30) days after installation of such Actiview Software and
complete the Actiview Functional Acceptance Tests no later than sixty (60) days
after installation of such Actiview Software.
(b) After the Actiview Software has successfully passed the Actiview
Functional Acceptance Tests, the Owner will commence the Actiview Final
Acceptance Test in accordance with the provisions of Appendix S. The Actiview
Final Acceptance Test shall be thirty (30) days after successful completion of
the Actiview Functional Acceptance Test.
(c) If the Owner fails to conduct either the Actiview Functional
Acceptance Tests or the Actiview Final Acceptance Tests within the time periods
set forth in subsections 9.8(a) and 9.8(b), the Actiview Software will be deemed
to have met the Actiview Acceptance Test criteria on the last day of the time
period allotted for the applicable Actiview Acceptance Test unless any such
delay is caused by or due to an act or omission of the Vendor and/or a Defect in
the Actiview Software.
(d) The Owner will be responsible for the costs and expenses of the
Actiview Acceptance Tests. The Vendor will provide the support services to the
Owner set forth in the Actiview Statement of Work.
(e) If the Actiview Acceptance Tests show that any of the Actiview
Software complies with the Actiview Statement of Work, such Actiview Software
will be accepted by the Owner by confirming the results in a written report.
(f) If any Actiview Acceptance Test is not satisfied, the Owner will
(i) in writing, notify the Vendor of such failure, and (ii) the Vendor will
promptly correct whatever Defects or Deficiencies caused such Actiview
Acceptance Test not to be satisfied. After such correction, the Vendor must (i)
repeat at its sole cost and expense the failed Actiview Acceptance Tests and as
many other Actiview Acceptance Tests as are necessary to ensure in the
reasonable opinion of the Owner that such correction made by the Vendor would
not have affected the outcome of such other Actiview Acceptance Tests, and (ii)
in writing, notify the Owner as to what correction was made and what Actiview
Acceptance Tests were repeated. Nothing stated herein to the contrary will in
any way limit the Owner's right to liquidated damages pursuant to subsection
15.10 or other remedies under the Contract in the event the Vendor fails to
deliver Actiview Products in accordance with the requirements of Appendix U on
the dates originally scheduled for such deliveries.
(g) Minor Defects and shortcomings not affecting the operational use of
any part of the Actiview Software shall not give rise to withholding the
acceptance provided that the Vendor undertakes to remedy such Defects and
shortcomings as soon as reasonably possible, pursuant to the procedures
described in Appendix S.
SECTION 10 DISCONTINUED PRODUCTS
10.1 Notice of Discontinuation. During the Term of this Contract the
Vendor agrees to provide the Owner, or the respective Affiliates as the case may
be, except under extraordinary circumstances not less than one (1) year notice
before the Vendor discontinues accepting orders for a PCS Product ("Discontinued
Products") sold under this Contract. Where the Vendor offers a product for sale
that is equivalent in form, fit and function in accordance with and pursuant to
the Specifications, the notification period may vary but in no event will be
less than the applicable notice period set forth in subsection 2.17.
Notwithstanding the foregoing, the Vendor will not discontinue accepting orders
for any PCS Product applicable to or otherwise used in the System or any portion
thereof until and unless the Vendor and the Owner have agreed upon a mutually
acceptable transition plan that takes into account the Owner's and its
Affiliates' existing investment in the Item scheduled for discontinuance subject
to the minimum terms and conditions set forth in subsections 10.2 and 10.3
below. The Parties' failure to reach agreement within sixty (60) days or such
other reasonable time as they may mutually establish will, upon the request of
either Party, be referred for resolution pursuant to Section 23. In the event of
the foregoing, the Vendor must continue to furnish PCS Products fully compatible
with the System Elements within the System at such time during the Term of the
Contract; provided that nothing herein will bar the Vendor from discontinuing
individual Items of PCS Products as provided in and pursuant to this subsection
10.1.
10.2 Discontinuation During Warranty Period. If, during the Warranty
Period applicable to the relevant Discontinued Product pursuant to Section 17,
the Vendor does not make such Discontinued Products available to the Owner, the
price of any Products provided as a replacement for the Discontinued Product by
the Vendor and required to be purchased by the Owner during such Warranty Period
to replace existing Discontinued Products delivered to the Owner in order to
maintain performance and functionality equivalent to that previously provided by
the Discontinued Products will be discounted by an amount equal to fifty percent
(50%) of the price previously paid for such Discontinued Products.
10.3 Discontinuation After Warranty Period. In the event that the
Vendor discontinues the manufacture of a Product following the expiration of the
applicable Warranty Period and the Owner is required to replace an existing
Discontinued Product with a new Product in order to maintain performance and
functionality, the Owner will receive a credit in an amount equal to the
percentage set forth below multiplied by the purchase price paid for such
original Product, which credit will be applied against the Vendor's then-current
list price for a replacement for such Discontinued Product; provided that the
credit will not exceed the Vendor's then-current best list price (as determined
by the Customer Price Guide) for such replacement Product subject to the
discounts available to the Owner pursuant to Section 26 and the other terms of
this Contract:
(i) up to and including one year following expiration of the
applicable Warranty Period: 40%;
(ii) more than one year and up to and including two years following
expiration of the applicable Warranty Period: 30%; and
(iii)more than two years and up to and including three years following
expiration of the applicable Warranty Period: 20%.
SECTION 11 SOFTWARE; CONFIDENTIAL INFORMATION
11.1 RTU License. The Owner is hereby granted a perpetual,
non-exclusive, non-transferable (except as set forth in subsections 11.4 and
27.4), fully paid-up, multi-site (capability to have deployed Software in any
number of sites) right to use license for the Software ("RTU License"), to
operate the Products provided in each of the PCS Systems and/or PCS Sub-Systems,
as the case may be, and the System as a whole, subject to payment of any license
fees in accordance with the terms of this Contract. Except as otherwise provided
herein, the Owner is granted no title or ownership rights to the Software. Such
rights will remain with the Vendor, its Subcontractors or suppliers, as
appropriate. The RTU License granted hereunder includes and is deemed to cover
any Affiliate of the Owner to the extent such Affiliate is (i) developing,
constructing and/or operating a PCS system and (ii) seeking to access and/or use
the Products and Services available on or as a part of the Owner's System.
11.2 Owner's Obligations. The Owner agrees that the Software, whether
or not modified, will be treated as proprietary to the Vendor, its Subcontrac-
tors or its suppliers, as appropriate and the Owner will:
(a) Utilize the Software solely in conjunction with the System and/or
any PCS System or any PCS Sub-System; provided that the Vendor acknowledges that
the Software will be integrated across interfaces with systems, equipment and
software provided by other suppliers and customers including, but not limited
to, the Other Vendors;
(b) Ensure that all copies of the Software will, upon any reproduction
by the Owner authorized by the Vendor and whether or not in the same form or
format as such Software, contain the same proprietary, confidentiality and
copyright notices or legends which appear on the Software provided pursuant
hereto; and
(c) Hold secret and not disclose the Software (or, subject to
subsection 27.19, interfaces to or with such Software) to any person, except to
(i) such of its employees, contractors, agents or Affiliates that are involved
in the operation or management of the System and/or any PCS System or any PCS
Sub-System and need to have access thereto to fulfill their duties in such
capacity, or (ii) other Persons who need to use such Software to permit
integration of the System and/or any PCS System and/or any PCS Sub-System with
systems and software of other suppliers and customers including, but not limited
to, the Other Vendors; provided that such Persons agree, or are otherwise
obligated, to hold secret and not disclose the Software to the same extent as if
they were subject to this Contract.
(d) When and if the Owner determines that it no longer needs the
Software or if the Owner's license is canceled or terminated pursuant to the
terms of this Contract, return all copies of such Software to the Vendor or
follow reasonable written disposition instructions provided by the Vendor. If
the Vendor authorizes disposition by erasure or destruction, the Owner will
remove from the medium on which Software resides all electronic evidence of the
Software, both original and derived, in such manner that prevents subsequent
recovery of such original or derived Software.
11.3 Backwards Compatibility. (a) In addition to the warranties
contained in Section 17 of this Contract, the Vendor represents and warrants
that each Software Revision Level during the Term of this Contract will be
Backwards Compatible with all existing in-service Equipment provided by the
Vendor and the immediately preceding Software Revision Level of such Software
made available to Customers by the Vendor.
(b) In the event that Software supplied by the Vendor at any System
Element Site at any time does not provide Backwards Compatibility as required by
this subsection 11.3, then the Vendor will provide, without charge to the Owner,
the most current Software Updates of the Software to each such System Element
Location, and otherwise take such steps as may be necessary to achieve Backwards
Compatibility.
11.4 Transfer and Relocation. (a) Except as provided in subsection
27.4, where the Owner or any successor to the Owner's title in the Products (i)
elects to transfer a Product to a third party, and where such Product will
remain in place and operational for the purpose of continuing to provide PCS in
the franchise area in which such Product is installed, or (ii) elects to
transfer Products to an Affiliate for reuse within the United States, the Owner
may transfer its RTU License for the Software furnished under this Contract for
use with such Product, without the payment of any additional Software
right-to-use fees by the transferee, but only under the following conditions:
(A) The right to use such Software may be transferred
only together with the Products with which the Owner
has a right to use such Software, and such right to
use the Software will continue to be limited to use
with such Products;
(B) Before any such Software is transferred, the Owner
will notify the Vendor of such transfer and the
transferee will have agreed in writing (a copy of
which will be provided to the Vendor) to keep the
Software in confidence and to corresponding
conditions respecting possession and use of Software
as those imposed on the Owner in this Contract; and
(C) The transferee will have the same right to Software
warranty and Software maintenance for such Software
as the transferor, provided the transferee continues
to pay the fees, including recurring fees, such as
Annual Release Maintenance Fees, if any, associated
with such Software warranty or maintenance.
(b) Except as provided in subsection 11.4(a) or subsection 27.4, and
except as may otherwise in this Contract be provided expressly, the Owner or any
successor to the Owner's title in the Products will have no right to transfer
Software furnished by the Vendor under this Contract without the consent of the
Vendor. If the Owner or such successor elects to transfer a Product purchased
under this Contract for which it does not under this Contract have the right to
transfer related Software, the Vendor agrees that upon written request of the
transferee of such Product, or of the Owner or such successor, the Vendor will
not without reasonable cause fail to grant to the transferee a license to use
such Software with the Products, whether to be located within the United States
or elsewhere, upon payment of a relicensing fee to the Vendor in an amount equal
to fifty percent (50%) of the license fee for the Software originally paid by
the Owner to the Vendor at the time of the original purchase of the Software
from the Vendor; provided that such relicensing fee will in no event exceed
fifteen percent (15%) of the price paid by the transferee to the Owner for the
Product with respect to which such Software is used.
11.5 Survival. The obligations of the Owner under the Software Licenses
will survive the termination of this Contract, regardless of the cause of
termination.
11.6 Access to Source Codes. The Vendor grants the Owner a right to
access the Source Code and to modify the Software (the "RTM License") for the
maintenance, enhancement and support of those Products purchased from the Vendor
and owned or operated by the Owner under the following circumstances which will
be set forth in the Escrow Agreement:
(a) If the Vendor becomes insolvent, makes a general assignment for the
benefit of creditors, files a voluntary petition in bankruptcy or an involuntary
petition in bankruptcy is filed against the Vendor which is not dismissed within
sixty (60) days, or suffers or permits the appointment of a receiver for its
business, or its assets become subject to any proceeding under a bankruptcy or
insolvency law, domestic or foreign, or has liquidated its business, or the
Vendor, or a business unit of the Vendor that is responsible for maintenance of
the Software, ceases doing business without providing for a successor, and the
Owner has reasonable cause to believe that any such event will cause the Vendor
to be unable to meet its warranty service or support requirements hereunder; or
(b) If it is determined, pursuant to the dispute resolution mechanisms
set forth in subsection 23.1, that the Vendor, its assignee or designee has
failed, or is unable, to provide the warranty service or support of the System
and/or any PCS System and/or any PCS Sub-System contemplated by this Contract.
11.7 Escrow Agreement. The Vendor agrees, at the Owner's request, to
become party to a Source Code escrow agreement (the "Escrow Agreement") which
will allow the Owner to obtain access to the applicable Source Codes in the
circumstances set forth in subsection 11.6 and such Escrow Agreement. The Owner
will pay all costs, including the Vendor's reasonable costs incurred in
gathering, organizing and delivering such Source Code, associated with such
Escrow Agreement. The Vendor represents, warrants and agrees that (i) the Source
Codes delivered into escrow in accordance with the Escrow Agreement will
comprise the full Source Code language statement of the Software as used, or
required to be used, by the Vendor to maintain or modify the System and/or any
PCS System and/or any PCS Sub-System without the help of any other Person or
reference to any other material, (ii) such Source Codes will include all
versions thereof from the date of initial creation, and (iii) such Source Codes
must be kept up to date, including all updates needed to maintain compliance
with the Specifications and the System Standards. In addition, all parts of the
Source Codes from the date of creation thereof, and all updates thereto
(including, without limitation, those that are necessary to maintain compliance
with the Specifications) must be delivered into escrow in accordance with the
Escrow Agreement; provided that the Vendor will not be required to update and/or
deliver into escrow any updates of any Owner Software modifications made
pursuant to subsections 12.5, 12.6 or 12.7.
11.8 Software Maintenance. The Vendor represents and warrants that the
Software delivered to the escrow agent pursuant to subsection 11.7 for
redelivery to the Owner pursuant to the Escrow Agreement will be in a form
suitable for reproduction by the Owner and will include the full Source Code
language statement of the Software as used by the Vendor sufficient to allow
maintenance and modification.
11.9 Custom Development.
11.9.1 Request for Custom Material. (a) From time to time, the
Owner may have requirements for custom Software (including, but not limited to,
development of identified features or modifications to Software or Software
Enhancements) or custom development of Equipment (including, but not limited to,
development of identified features or modifications to Equipment or Equipment
Enhancements) to be provided by the Vendor under this Contract (the "Custom
Material"). If the Owner has a requirement for Custom Material that is a
specific enhancement or modification of a previously licensed feature or of
previously purchased Products, the Owner will identify to the Vendor in writing
a summary of any such proposed development of Custom Material. Such summary will
provide a description of any proposed Custom Material sufficient to enable the
Vendor to determine the general demand for, and its plans, if any, to develop
the same or similar Products. The Vendor will respond to such summary within
thirty (30) days after receipt thereof and indicate if it has the ability to
fulfill a subsequent Request for Proposal ("RFP") from the Owner for such
development of Custom Material. The Owner acknowledges that the Vendor will have
no obligation to develop any proprietary materials for Owner.
(b) If the Vendor decides that it does not have the technical ability
or the capacity to fulfill a subsequent RFP for such Custom Material
development, the Vendor's response pursuant to subsection 11.9.1(a) will (i)
provide the Owner an explanation of why it cannot fulfill such RFP and (ii) use
reasonable diligence to work with the Owner to identify an alternative source
for such development reasonably acceptable to the Owner. In determining whether
the Vendor has the technical ability or the capacity to fulfill the RFP, the
Vendor may consider factors including, but not limited to, (1) the Vendor's
likelihood of recovering its costs for performing such development, (2) the
impact of such development on the Vendor's actual outstanding commitments to
perform work for other Customers and to pursue strategic development activities;
and (3) whether the Vendor can perform the work utilizing existing software
development staff without stopping work underway.
(c) If the Vendor fails to agree to a request for Custom Material
development pursuant to the terms of this subsection 11.9 then the matter may,
at the Owner's option, be referred to dispute resolution pursuant to Section 23.
11.9.2 Vendor Response. After reviewing an RFP issued for such
Custom Material, the Vendor will respond to the Owner within thirty (30) days,
unless otherwise agreed by the Parties, stating the terms and conditions upon
which the Vendor would be willing to undertake such development, including, but
not limited to, a listing of specifications, custom development charges, planned
license fees and a proposed delivery schedule.
11.9.3 Ownership of Intellectual Property. The Vendor will own
all forms of intellectual property rights (including, but not limited to,
patent, trade secret, copyright and mask rights) pertaining to Products, and
will have the right to file for or otherwise secure and protect such rights. The
foregoing notwithstanding, the Parties understand and agree that from time to
time the Owner may devise, develop or otherwise create ideas or other concepts
for services or new products which are patentable or otherwise capable of
receiving protection from duplication. In such event, the Owner will have the
right to patent or otherwise protect such ideas or concepts for its own use and
benefit.
SECTION 12 SOFTWARE CHANGES
12.1 Annual Release Maintenance Fees. So long as the Owner pays the
applicable Annual Release Maintenance Fees in accordance with the terms of this
Contract during the Term (including at any time after the Term so long as the
Owner at such time continues to pay the Annual Release Maintenance Fees), the
Vendor will provide to the Owner, at such times as they become generally
available to the Vendor's Customers, all Software Upgrades, all Software
Enhancements and all Combined Releases (but not Optional Software Features,
unless otherwise mutually agreed between the Parties) applicable to Software for
PCS Products for which the Owner has obtained an RTU License pursuant to the
terms of this Contract.
12.2 Notice. The Vendor must give the Owner not less than ninety (90)
days prior written notice of the introduction of any Software Enhancement
release or any Software Combined Release or any Optional Software Features
release. In addition, in each February and August of each year during the Term
of this Contract, the Vendor must provide the Owner with a forecast of future
Software Enhancement releases or Software Combined Releases or any Optional
Software Features release, as the case may be, then currently being developed by
or on behalf of the Vendor.
12.3 Installation, Testing and Maintenance. The installation and
testing of the Software by the Vendor and the acceptance thereof by the Owner
will be performed in accordance with the criteria set forth in Exhibit B3.
12.4 Software Fixes. In the event that any Software Upgrade, Software
Enhancement or Software Combined Release supplied by the Vendor during the Term
of this Contract has the effect of preventing the System and/or any PCS System
and/or any PCS Sub-System, as the case may be, or any part thereof from
satisfying, or performing in accordance with the Specifications, the System
Standards and/or Exhibit F or otherwise adversely affects the functionality or
features of the System, any PCS System, any PCS Sub-System or any part thereof,
then the Vendor will promptly retrofit or take such other corrective action as
may be necessary to assure that the System, any such PCS System or any PCS
Sub-System or any such affected part, as modified to include each such Software
Upgrade, Software Enhancement or Software Combined Release, will satisfy, and
perform in accordance with, the Specifications, the System Standards and/or
Exhibit F and restore all pre-existing functionality and features as well as
provide any new features and functionality provided by any of the foregoing
modifications, in each case without any charge to the Owner (other than payment
of the applicable Annual Release Maintenance Fees pursuant to the terms of this
Contract).
12.5 Right to Modify SCP/HLR Software. The Vendor grants to the Owner a
personal, non-transferable, non-exclusive and royalty-free license to modify the
following component layers of the SCP/HLR Software provided herein to run on the
SCP/HLR Hardware, solely for use by the Owner in its business of providing
telecommunications services (the names for the component layers set forth below
being used in conformity with the conventions displayed on the graphic element
of Appendix B):
(i) Service Customization Layer
(ii) Application Oriented Layer
(iii) Capability Creation Layer
(iv) Platform Enhancement Layer
Such right to modify includes the right for the Owner, its
employees, and agents to modify and copy the Source Code of the above named
component layers (including, but not limited to, access to the "SCP Action
Execution Library" (including IS41 Rev. B and IS41 Rev. C)) of the SCP/HLR
Software provided solely for the purposes of maintaining and enhancing or
supplementing the object code versions of such provided Software. The Owner
agrees to use the modifications to Licensed Software made in the exercise of the
license granted in this subsection 12.5 in accordance with its licensed rights
in the SCP/HLR Software hereunder, except as otherwise provided in this
subsection 12.5. The license to modify set forth in this subsection 12.5 will be
royalty-free and without fee with respect to code implementing features or
capabilities provided within the above-enumerated layers of releases or versions
of the Software which are provided by the Vendor in accordance with or pursuant
to the Annual Release Maintenance Fees.
Intellectual property rights in modifications to the SCP/HLR
Software by the Owner, its employees or agents for hire in the exercise of a
right of modification granted in this subsection 12.5 will vest in the Owner,
subject to the Vendor's intellectual property rights in the Vendor's proprietary
"SLL" programming language and compiler and in the Vendor's unmodified SCP/HLR
Licensed Software. The unmodified Computer Programs provided by the Vendor,
including, but not limited to, the SCP/HLR Software, will remain the
intellectual property of the Vendor; and nothing in this subsection 12.5 will be
deemed to confer upon the Owner ownership in any aspect of the unmodified
SCP/HLR Software. Except as provided in subsection 11.4, nothing contained
herein will be deemed to confer upon the Owner any right to license or
sublicense use of the unmodified SCP/HLR Software, or any part thereof, to third
persons. The Vendor will be entitled to license any right to use and to
sublicense modifications made by or for the Owner on terms mutually agreed
between the Owner and the Vendor, unless the Owner unilaterally designates, in
writing, a specific modification or modifications to be restricted from such
licensing for a specific period of time.
The Vendor agrees to provide the Owner Software tools,
documentation, services and training requested by the Owner which are reasonably
necessary to the exercise of the Owner's rights of modification granted in this
subsection 12.5, upon mutually agreed prices, terms and conditions. The Vendor
will endeavor in subsequent Software Upgrades, Software Enhancements, Combined
Releases and other versions of its SCP/HLR Software to accommodate the Owner's
need to preserve compatibility between the Owner's modifications and such
Vendor-provided programs.
Nothing contained in this subsection 12.5 to the contrary
authorizes the Owner to engage any entity or person as an agent for hire to
modify the Vendor's SCP/HLR Software which entity or person (i) is substantially
and directly engaged in competition with the Vendor in manufacturing or
developing PCS systems; or (ii) does not agree in writing to recognize and
respect the Vendor's intellectual property rights in such Licensed Software
(including, but not limited to, the Vendor's rights stated herein) and to
maintain the secrecy of information proprietary to the Vendor regarding the
structure and contents of the Vendor's computer programs upon terms comparable
to the Owner's undertakings to maintain the confidentiality of the Vendor's
Proprietary Information.
12.6 Right to Modify AS Software and Actiview Software. The Owner may
add to, delete from, or modify AS Software modules or menus, if available from
the Vendor. Such changes or modifications, however extensive shall not affect
the Vendor's title to the AS Software. The Owner may add to, delete from, or
modify Actiview Software modules or menus, if available from the Vendor. Such
changes or modifications, however extensive, shall not affect the Vendor's title
to the Actiview Software.
12.7 Right to Modify OTAF Software. The Vendor grants to the Owner a
personal, non-transferable, non-exclusive and royalty-free license to modify the
operations environment of the OTAF Software provided under the Contract to run
on the OTAF Equipment, solely for use by the Owner in its business of providing
telecommunications services.
Such right to modify includes the right for the Owner, its
employees and agents to modify and copy the Source Code for the operations
environment of the OTAF Software (including, but not limited to, access to the
"SCP Action Execution Library" (including IS41 Rev. B and IS41 Rev. C) of the
SCP/OTAF Software provided solely for the purposes of maintaining and enhancing
or supplementing the object code versions of such provided Software. The Owner
agrees to use the modifications to Software made in the exercise of the license
granted in this subsection 12.7 in accordance with its licensed rights in the
OTAF Software hereunder, except as otherwise provided in this subsection 12.7.
The license to modify set forth in this subsection 12.7 will be royalty-free and
without fee with respect to code implementing features or capabilities provided
within the OTAF operating environments of releases or versions of the Software
which are provided by the Vendor in accordance with or pursuant to the Annual
Release Maintenance Fees.
Intellectual property rights in modifications to the OTAF
Software by the Owner, its employers or agents for hire in the exercise of a
right of modification granted in this subsection 12.7 will vest in the Owner,
subject to the Vendor's intellectual property rights in the Vendor's proprietary
"SLL" programming language and compiler and in the Vendor's unmodified OTAF
Software. The unmodified Computer Programs provided by the Vendor, including,
but not limited to, the OTAF Software, will remain the intellectual property of
the Vendor; and nothing in this subsection 12.7 will be deemed to confer upon
the Owner ownership in any aspect of the unmodified OTAF Software. Nor will
anything herein be deemed to confer upon the Owner any right to license or
sublicense use of the unmodified OTAF Software, or any part thereof, to third
persons. The Vendor will be entitled to license any right to use and to
sublicense modifications made by or for the Owner on terms mutually agreed
between the Owner and the Vendor, unless the Owner unilaterally designates, in
writing, a specific modification or modifications to be restricted from such
licensing for a specific period of time.
The Vendor agrees to provide the Owner Software tools,
documentation, services and training requested by the Owner which is reasonably
necessary to the exercise of the Owner's rights of modification granted in this
subsection 12.7, upon mutually agreed prices, terms and conditions. The Vendor
will endeavor in subsequent Software Upgrades, Software Enhancements, Combined
Releases and other versions of its OTAF Software to accommodate the Owner's need
to preserve compatibility between the Owner's modifications and such
Vendor-provided programs.
Nothing contained in this subsection 12.7 to the contrary
authorizes the Owner to engage any entity or person as an agent for hire to
modify the Vendor's OTAF Software which entity or person (i) is substantially
and directly engaged in competition with the Vendor in manufacturing or
developing PCS systems; or (ii) does not agree in writing to recognize and
respect the Vendor's intellectual property rights in such Licensed Software
(including, but not limited to, the Vendor's rights stated herein) and to
maintain the secrecy of information proprietary to the Vendor regarding the
structure and contents of the Vendor's computer programs upon terms comparable
to the Owner's undertakings to maintain the confidentiality of the Vendor's
Proprietary Information. The right to modify OTAF Software shall not apply to
any third party manufactured or provided OTAF Software unless the Vendor owns
the rights to such third party OTAF Software. The list of third party OTAF
Software excluded from the right to modify set forth in this subsection 12.7
consists of "NewNet SS-7", "ESI-BACE", "ESIE Background", "BACE Background",
"Rogueware Tools H++", and "FairCom c-tree".
SECTION 13 EQUIPMENT CHANGES
13.1 Equipment Upgrades. (a) Equipment Upgrades will be provided to the
Owner by the Vendor at no charge to the Owner as provided in subsection 13.1(b)
below. Equipment Enhancements must be provided to the Owner by the Vendor, if
requested by the Owner, and the Owner is obligated to make payment therefor in
an amount that is no higher than that payable by any Customer other than the
Owner, which amount of payment will be adjusted as set forth in subsections 6.2,
7.2 and 27.16 Section 26. If the Vendor at any time issues an Equipment Upgrade
which is combined with any Equipment Enhancement (collectively, the "Equipment
Combined Release") to such Equipment, the Equipment Combined Release will be
provided at no charge to the Owner unless and until the Owner elects to use any
of the feature enhancement or enhancements included within the Equipment
Combined Release and has accepted such Equipment Combined Release.
(b) (i) After a PCS Product has been shipped to the Owner, if the
Vendor issues an Equipment Upgrade ("Class A change") or Equipment Enhancement
("Class B change"), or where a modification to correct an error in field
documentation is to be introduced, the Vendor will promptly notify the Owner of
such change through the Vendor's design change management system or another
Vendor notification procedure. Each change notification, whether or not it bears
a restrictive legend, will be subject to subsection 27.19, except that such
information may be reproduced by the Owner for the Owner's use as required
within the System. If the Vendor has engineered, furnished, and installed a
Product which is subject to an Equipment Upgrade, the Vendor will implement such
change, at its sole cost and expense, if it is announced within fifteen (15)
years from the date of shipment of that Product, by, at its option (subject to
the reasonable review and acceptance of the Owner at such times as the Owner
reasonably determines that it needs to review such Vendor decision), either (A)
modifying the Product at the Owner's site; (B) modifying the Product which the
Owner has returned to the Vendor in accordance with the Vendor's reasonable
instructions pursuant to and in accordance with the terms of this Contract; or
(C) replacing the Product requiring the change with a replacement Product for
which such change has already been implemented. If the Vendor has not engineered
the original Product application and accordingly office records are not
available to the Vendor, the Vendor will provide the generic change information
and associated parts for the Owner's use in implementing such change.
(ii) In any of the instances described in clause (i) above,
if the Vendor and the Owner agree that a Product or
part thereof subject to such change is readily
returnable, the Owner, at its expense, will remove and
return such Product or part to the Vendor's designated
facility within the United States and the Vendor, at
its sole expense, will implement such change (or
replace it with a Product or part for which such change
has already been implemented) at its facility and
return such changed (or replacement) Product or part at
its sole cost and expense to the Owner's designated
location within the United States. Any such
reinstallation will be performed by the Owner at its
sole expense. At any such time that the Owner's spares
or plug-in stocks are not available to implement a
rotational program for an Equipment Upgrade, the Vendor
will provide a seed stock, where feasible and
necessary.
(iii)If the Owner does not make or permit the Vendor to
make an Equipment Upgrade as stated above within one
(1) year from the date of change notification or such
other period as the Vendor may agree, subsequent
changes, repairs or replacements affected by the
failure to make such change may, at the Vendor's
option, be invoiced to the Owner whether or not such
subsequent change, repair or replacement is covered
under the warranty provided in this Contract for such
Product. If requested by the Owner, Equipment Upgrades
announced more than fifteen (15) years from the date of
shipment will be implemented at the Owner's expense.
(iv) If the Vendor issues an Equipment Enhancement after a
PCS Product has been shipped to the Owner, the Vendor
will promptly notify the Owner of such change if it is
being offered to any of the Vendor's Customers. Except
as otherwise set forth above in subsection 13.1(a),
when an Equipment Enhancement is requested by the
Owner, the pricing set for such Equipment Enhancements
will be at the Vendor's standard charges subject to the
applicable discounts set forth in this Contract and
Section 26.
(v) All change notifications for Equipment Upgrades and
Equipment Enhancements provided by the Vendor to the
Owner pursuant to the terms of this Contract must
contain the following information: (i) a detailed
description of the change; (ii) the reason for the
change; (iii) the effective date of the change; and
(iv) the implementation schedule for such change, if
appropriate.
13.2 Notice. The Vendor will give the Owner not less than ninety (90)
days prior written notice of the introduction of any Equipment Enhancement or
any Equipment Combined Release. In addition, in February and August of each year
during the Term of this Contract, the Vendor will provide the Owner with a
forecast of future Equipment Enhancements to the Equipment or Equipment Combined
Releases then currently being developed by or on behalf of the Vendor.
13.3 Installation, Testing and Acceptance. The Installation and testing
of the Equipment by the Vendor and the acceptance thereof by the Owner must be
performed in accordance with Exhibit B3 pursuant to the Project Milestones in
Exhibit A.
13.4 Equipment Fixes. In the event that any Equipment Upgrade or
Equipment Enhancement supplied by the Vendor during the Term of this Contract
has the effect of preventing the System and/or any PCS System and/or any PCS
Sub-System or any part thereof from satisfying, or performing in accordance
with, the Specifications, the System Standards and/or Exhibit F or otherwise
adversely affects the functionality, interoperability or features of the System,
any such PCS System or PCS Sub-System or any part thereof, then the Vendor will
without any charge to the Owner promptly retrofit or take such other corrective
action as may be necessary to assure that the System, any such PCS System or PCS
Sub-System or any such affected part, as modified to include each such Equipment
Upgrade and Equipment Enhancement, will satisfy, and perform in accordance with,
the Specifications, the System Standards and/or Exhibit F and restore all
pre-existing functionality and features as well as provide any features and
functionality provided by any of the foregoing modifications.
SECTION 14 INTELLECTUAL PROPERTY
14.1 Intellectual Property. The Vendor grants the Owner rights to state
that it is using the Vendor's Products or Services in the Owner's marketing,
advertising or promotion of the System, any PCS System, any PCS Sub-System or
any part thereof. The Owner has the right to use for such marketing, advertising
or promotion the Vendor's advertising and marketing materials (including
pamphlets and brochures) provided to the Owner by the Vendor describing the
System, any PCS System, any PCS Sub-System or any part thereof, or any Product.
Other than as set forth in this subsection 14.1, the Owner has the right to use
the trademarks and service marks of the Vendor or its assignee in the Owner's
marketing, advertising and promotion of the System, any PCS System, any PCS
Sub-System or any part thereof only with the written consent of the Vendor not
to be unreasonably withheld subject to and in accordance with the terms of
subsection 27.13.
14.2 Infringement. (a) The Vendor agrees that it will defend, at its
own expense, all suits and claims against the Owner for infringement or
violation (whether by use, sale or otherwise) in the United States of any
patent, trademark, copyright, trade secret or other intellectual property rights
of any third party (collectively, "Intellectual Property Rights"), covering, or
alleged to cover, the Equipment, Software, the System and/or any PCS System, any
PCS Sub-System or any component thereof for its intended use, in the form
furnished or as subsequently modified by the Vendor or as otherwise modified by
the Owner pursuant to the direction or approval of the Vendor. The Vendor agrees
that it will pay all sums, including, without limitation, attorneys' fees and
other costs, which, by final judgment or decree, or in settlement of any suit or
claim to which the Vendor agrees, may be assessed against the Owner on account
of such infringement or violation, provided that:
(i) the Vendor will be given prompt written
notice of all claims of any such infringement or
violation and of any suits or claims brought or
threatened against the Owner or the Vendor of which
the Owner has actual knowledge;
(ii) the Vendor will be given full authority
to assume control of the defense (including appeals)
thereof through its own counsel at its sole expense
and will have the sole right to settle any suits or
claims without the consent of the Owner; provided
that the Vendor will have no right to agree to
injunctive relief against the Owner; provided further
that the Vendor will notify the Owner of any proposed
settlement condition prior to the Vendor's acceptance
of such settlement; and
(iii) the Owner will cooperate fully with
the Vendor in the defense of such suit or claims and
provide the Vendor, at the Vendor's expense, such
assistance as the Vendor may reasonably require in
connection therewith.
(b) The Vendor's obligation under this subsection 14.2 will not extend
to alleged infringements or violations that arise because the Products provided
by the Vendor are used in combination with other products furnished by third
parties and where any such combination was not installed, recommended, approved,
explicitly or by implication, by the Vendor.
14.3 Vendor's Obligation to Cure. If in any such suit so defended, all
or any part of the Equipment, Software, the System, any PCS System, any PCS
Sub-System or any component thereof is held to constitute an infringement or
violation of Intellectual Property Rights and its use is enjoined, or if in
respect of any claim of infringement or violation the Vendor deems it advisable
to do so, the Vendor will at its sole cost, expense and option take one or more
of the following actions: (i) procure the right to continue the use of the same
without interruption for the Owner; (ii) subject to the terms of subsection 2.17
replace the same with noninfringing Equipment or Software that meets the
Specifications; or (iii) modify said Equipment, Software, the System, any PCS
System, any PCS Sub-System or any component thereof so as to be noninfringing,
provided that the Equipment, Software, the System, any PCS System, any PCS
Sub-System or any component thereof as modified meets all of the Specifications.
In the event that the Vendor is not able to cure the infringement pursuant to
clause (i), (ii) or (iii) in the immediately preceding sentence, the Vendor will
refund to the Owner the full purchase price paid by the Owner for such
infringing Product or feature, and the Owner will be under no obligation to
return to the Vendor such infringing Product or feature regardless of whether,
or by what means, the Owner, on its own or otherwise, subsequently cures such
infringement.
14.4 Vendor's Obligations. The Vendor's obligations under this Section
14 will not apply to any infringement or violation of Intellectual Property
Rights to the extent caused by modification of the Equipment, Software, the
System, any PCS System, any PCS Sub-System or any component thereof by the
Owner, or any infringement caused solely by the Owner's use and maintenance of
the Products other than in accordance with the Specifications and the purposes
contemplated by this Contract, except as expressly authorized or permitted by
the Vendor. The Owner will indemnify the Vendor against all liabilities and
costs, including reasonable attorneys' fees, for defense and settlement of any
and all claims against the Vendor for infringements or violations based upon
this subsection 14.4.
14.5 License to Use Vendor Patents. (a) The Vendor grants to the Owner
and its Affiliates, under patents which the Vendor owns or has a right to
license ("Vendor Patents"), a worldwide, royalty-free, nonexclusive license (the
"Patent License") to use any Product furnished by the Vendor under this Contract
(including any combination of products and services, whether or not furnished at
the same time or as part of a larger combination) for provision of
telecommunications services; provided, however, that no rights are conveyed to
the Owner and its Affiliates with respect to any invention which is directed to
(i) a combination of a Product or Products furnished with any other Item which
the Vendor does not furnish to the Owner under this Contract wholly or in part
for such use, or (ii) a method or process which is other than an inherent use of
the Products furnished. As used in this subsection 14.5, the term "inherent use"
means a use that can be completely performed by a Product furnished by the
Vendor (or a combination of Products furnished by the Vendor), without the need
for any additional product, service, development modification or programming by
the Owner and its Affiliates or by a third party.
(b) The Owner and any successor to the Owner's title in the Products
has the right (subject to written approval of the Vendor, which approval will
not be unreasonably withheld), to assign the Patent Licenses to any other Person
who acquires legal title to the Products including, but not limited to, any
Person or Persons taking part in the financing of any part of the Nationwide
Network, provided that no such assignment to Persons taking part in the
financing of any part of the Nationwide Network will be permitted except in
accordance with the provisions of subsection 27.4 of this Contract. Nothing
contained in this subsection 14.5 is intended to, and shall not, limit any
rights or privileges that the Owner has under this Contract or otherwise under
Applicable Law.
SECTION 15 DELAY
15.1 Liquidated Damages. The Parties agree that damages for delay are
difficult to calculate accurately and, therefore, agree that liquidated damages
(the "Liquidated Damages") will be paid for non-performance or late performance
of the Vendor's obligations under this Contract pursuant to the terms hereof.
15.2 Interim Delay. (a) Failure of the Vendor to complete the Work
necessary to achieve each of the Project Milestones applicable to any PCS System
and/or any PCS Sub-System, as the case may be (other than Milestone 3 (as set
forth on Exhibit A1)), on or before the date applicable to such Milestone for
such PCS System or PCS Sub-System, as the case may be, that is required to be
achieved by the Vendor prior to the Guaranteed Substantial Completion Date for
such PCS System or PCS Sub-System (each an "Interim Milestone") will result in
the Vendor being liable to pay to the Owner an amount equal to [__________];
provided that no such Interim Delay Penalty will be due if the delay is directly
and expressly attributable solely to (i) an event constituting a Force Majeure
pursuant to the terms of this Contract or (ii) an act or omission of the Owner.
Interim Delay Penalties accrued pursuant to this subsection 15.2(a) will be
offset against the payment to be made by the Owner to the Vendor upon
Substantial Completion of the PCS System or PCS Sub-System to which such interim
delay relates. The Interim Delay Penalty applicable to Milestone 4 (as set forth
on Exhibit A1) will be [__________]. This subsection 15.2 will not be applicable
to Milestone 3 (as set forth on Exhibit A1) for either the System or any PCS
System or any PCS Sub-System.
(b) To the extent that the Vendor is responsible for Interim Delay
Penalties pursuant to subsection 15.2(a) such penalties will be credited back to
the Vendor by the Owner to the extent that (i) the Vendor successfully achieves
the Interim Milestone subject to delay within thirty (30) days of the date
scheduled therefore pursuant to the terms hereof and Exhibit A and (ii) such
interim delay does not otherwise materially adversely affect the Owner, such PCS
System or PCS Sub-System and/or the System as a whole. Any such reimbursement
will be credited back to the Vendor such that the Interim Delay Penalty
otherwise offset against the relevant Substantial Completion payment in
accordance with subsection 15.2(a) above will be added back to such Substantial
Completion payment to be made to the Vendor by the Owner.
15.3 Completion Delay. (a) For each day that any PCS System and/or any
PCS Sub-System, as the case may be, fails to [__________], the Vendor will pay,
subject to the limitations otherwise set forth in this subsection 15.3, an
amount equal to [_____________] percent of the Product Contract Price applicable
to such PCS System or PCS Sub-System, as the case may be, [_________]. In no
event will the Late Completion Payments payable by the Vendor with respect to
any PCS System or such PCS Sub-System, as the case may be, exceed [___________].
(b) If any PCS System or any PCS Sub-System does not achieve
Substantial Completion by the Guaranteed Substantial Completion Date applicable
thereto but the Owner nonetheless chooses (in its sole discretion) to commence
In Revenue Service in such incomplete PCS System or incomplete PCS Sub-System,
as the case may be (such action in no way constituting the Owner's acceptance,
express or implied, of the System or such PCS System or such PCS Sub-System or
any part thereof), then the Vendor will be required to pay, on a daily basis,
only that percentage of the daily Late Completion Payment equal to that
percentage of the geographic area to be otherwise covered by such PCS System or
PCS Sub-System, as the case may be, not otherwise placed In Revenue Service by
the Owner.
(c) In the event of a change in the Product Contract Price pursuant to
subsections 6.2, 7.2 or 27.16 or Section 26 during the Term of this Contract
from the amount originally set forth in this Contract pursuant to Section 6 the
per diem amount of Late Completion Payments set forth above will be increased or
decreased, as appropriate, by an amount equal to the increase or decrease in the
Owner's per diem interest payment obligation resulting from any change in the
amount of debt incurred or to be incurred by the Owner related to such change in
the Product Contract Price.
(d) Late Completion Payments, including any portions of such payments
payable in accordance with paragraphs (a) and (b) above, will be accrued during
the Completion Cure Period and offset against payments otherwise due to the
Vendor upon the achievement of Substantial Completion pursuant to the terms of
subsection 6.3. If the Vendor fails to achieve Substantial Completion within
sixty (60) days of the Guaranteed Substantial Completion Date for any reason
other than primarily because of (i) a Force Majeure event pursuant to Section 16
or (ii) the direct and explicit act or omission of the Owner, then the Owner
will have the option to terminate this Contract with respect to the PCS System
and/or the PCS Sub-System, as the case may be, affected by any such delay
without any penalty or payment obligation (other than payment obligations under
this Contract outstanding as of the date of any such termination; provided that
any such amounts payable by the Owner will not include any amounts that would
have been payable to the Vendor only upon Substantial Completion or Final
Acceptance); provided further that in the event the Vendor fails to achieve
Substantial Completion within such sixty (60) day period in any combination of
two (2) PCS Systems and/or PCS Sub-Systems within the Initial System over any
period of time (regardless of whether such events are concurrent or whether the
first such event was subsequently cured) the Owner will have the right, but not
the obligation, to terminate this Contract in its entirety.
15.4 SCP/HLR Delay. (a) Failure of the Vendor to properly deliver,
install and test any of the SCP/HLR Products at the then existing HLR Designated
Switch Sites in accordance with the SCP/HLR Specifications and the milestones
set forth therein applicable to SCP/HLR Products by the HLR Completion Dates
will result in the Vendor being liable to pay to the Owner contract cover
damages (the "Contract Cover Damages") equal to any and all reasonable and
actual increased costs and expenses including, but not limited to, increased
costs and expenses associated with network modifications, extra equipment,
software or training or re-engineering incurred by the Owner due to the Vendor's
failure to deliver, install and test the SCP/HLR Products by the HLR Completion
Dates in accordance with SCP/HLR Specifications and the HLR Statement of Work.
15.5 AM/HLR Interim Solution. In order to meet the Owner's projected
service date the Vendor will provide to the Owner, [_____________], and at the
Owner's then existing HLR Designated Switch Sites, AM/HLRs pursuant to and in
accordance with the AM/HLR Specifications and the HLR Statement of Work as an
interim solution so that the Nationwide Network may operate in accordance with
the Specifications; provided that the Vendor will continue to use its best
efforts, [______________] (but with all reasonable cooperation from the Owner),
to replace such interim AM/HLR solution with a comprehensive SCP/HLR system in
accordance with the SCP/HLR Specifications and the HLR Statement of Work.
15.6 AM/HLR Redeployment. After acceptance of the SCP/HLRs, the Owner
will, at the Owner's sole discretion, have the Vendor redeploy the AM/HLRs as
Access Managers to other sites within the System at the Vendor's sole cost and
expense for any and all costs associated with such redeployment, including
removal, transportation, and delivery but not installation or the cost of such
Access Manager; provided that if the Access Manager is not moved to another
location but redeployed in the same location in a separate function or for a
separate MSC, the Owner will only be liable for the cost of the Access Manager
and the Vendor will be responsible for all other costs. All payments, if any,
for redeployed AM/HLRs will be made by the Owner pursuant to subsections
6.3(a)-(d); provided that in the event that any such redeployment is to a PCS
System which has already achieved Substantial Completion then the payment terms
of subsection 6.3.1 will apply.
15.7 SCP/HLR Delay Termination. If after thirty (30) days after the HLR
Completion Dates the Vendor is still unable to satisfactorily complete the Final
Acceptance Tests applicable to the SCP/HLRs and/or any of the SCP/HLR Products
to be delivered in accordance with the terms of this Contract (including, but
not limited to, the SCP/HLR Specifications) the Owner will have the right (in
addition to any rights under subsection 15.4 above), but not the obligation, to
terminate the Contract only with respect to the SCP/HLR Products and will have
the right to seek from the Vendor reimbursement for any of its reasonable and
actual increased costs associated with acquiring reasonable replacement SCP/HLR
Products from a third-party supplier. The remedies set forth in subsections
15.4, 15.5 and 15.7 will be the Owner's sole and exclusive remedies in the event
the Owner chooses to terminate the delivery of SCP/HLR Products pursuant to the
terms of this subsection 15.7.
15.8 AS Software Delay. With respect to the AS Products and Services,
in the event the Vendor fails to deliver any such AS Statement of Work compliant
AS Products and/or AS Services within seven (7) days (except as provided below,
the "AS ▇▇▇▇▇ ▇▇▇▇▇ Period") of the applicable dates for delivery set forth in
Appendix G, the Vendor will (to the extent the Owner will not have cancelled the
applicable order therefor pursuant to the terms of the Contract) credit to the
Owner (in the form of purchase credits for any Vendor Products including, but
not limited to, AS Products) as liquidated damages for such late performance for
each of the first thirty (30) days beyond such AS ▇▇▇▇▇ ▇▇▇▇▇ Period, an amount
equal to [____________] percent per day (for such [________] day period) of the
total price of such undelivered or unsatisfactory AS Products or AS Services;
provided that upon the timely AS Functional Acceptance (on the dates originally
scheduled for such AS Functional Acceptance) of any such AS Products and/or AS
Services, any delay penalties accrued therefor shall be forgiven; and provided
further for AS Software "release 0.1" (as defined in Appendix G) the AS ▇▇▇▇▇
▇▇▇▇▇ Period will be [________] days from the delivery dates set forth in
Appendix G for the delivery of such AS Software release 0.1.
15.9 OTAF and/or Actiview Delay Termination. If after thirty (30) days
after the OTAF Completion Dates the Vendor is still unable to satisfactorily
complete the OTAF Final Acceptance Tests and/or any of the OTAF Products and/or
Services to be delivered in accordance with the terms of this Contract
(including, but not limited to, the OTAF Statement of Work) the Owner will have
the right, but not the obligation, to terminate the Contract only with respect
to the OTAF Products and/or Services and will have the right to seek from the
Vendor reimbursement for any of its reasonable and actual increased costs
associated with acquiring reasonable replacement OTAF Products and/or Services
from a third-party supplier. If after thirty (30) days after the Actiview
Completion Dates the Vendor is still unable to satisfactorily complete the
Actiview Final Acceptance Tests and/or any of the Actiview Products and/or
Services to be delivered in accordance with the terms of this Contract
(including, but not limited to, the Actiview Statement of Work) the Owner will
have the right, but not the obligation, to terminate the Contract only with
respect to the Actiview Products and/or Services and will have the right to seek
from the Vendor reimbursement for any of its reasonable and actual increased
costs associated with acquiring reasonable replacement Actiview Products and/or
Services from a third-party supplier. Pursuant to and in accordance with the
Actiview Statement of Work, the Owner will be responsible for the timely
furnishing of the Actiview operations environment, which includes delivery,
installation and testing of third party equipment and third party software
applicable and necessary for the operation of the Actiview Software. The Parties
understand and agree that the dates set forth in Section 12 of Appendix M for
the delivery of SCP/OTAF Products and Services are subject to modification
pursuant to the mutual good faith agreement between the Parties on or before
October 14, 1996; provided, that, the Vendor agrees that the delivery dates for
SCP/OTAF Products and Services will in no event be modified to be more than
forty-five (45) days beyond the dates for such deliveries set forth in Section
12 of Appendix M as of the Effective Date.
15.10 OTAF and/or Actiview Delay. (a) (i) With respect to the
SPARC/OTAF Products (other than any OTAF Maintenance and Instruction Manuals or
OTAF Operating Manuals) and SPARC/OTAF Services, in the event the Vendor fails
to deliver any such OTAF Statement of Work compliant SPARC/OTAF Products and/or
Services within seven (7) days (the "OTAF ▇▇▇▇▇ ▇▇▇▇▇ Period") of the applicable
dates for delivery set forth in the OTAF Statement of Work, the Vendor will (to
the extent the Owner will not have cancelled the applicable order therefor
pursuant to the terms of the Contract) credit to the Owner (in the form of
purchase credits for any Vendor Products including, but not limited to, OTAF
Products) as liquidated damages for such late performance for each of the first
[________] days beyond such OTAF ▇▇▇▇▇ ▇▇▇▇▇ Period, an amount equal to
[__________] percent per day (for such [_________] day period) of the OTAF
Price; provided that upon the timely SPARC/OTAF Field Acceptance (on the dates
originally scheduled for such SPARC/OTAF Field Acceptance) of any such
SPARC/OTAF Products and/or SPARC/OTAF Services, any delay penalties accrued
therefor shall be forgiven. (ii) With respect to the SCP/OTAF Products (other
than any OTAF Maintenance and Instruction Manuals or OTAF Operating Manuals) and
Services, in the event the Vendor fails to deliver any such OTAF Statement of
Work compliant SCP/OTAF Products (other than any OTAF Maintenance and
Instruction Manuals or OTAF Operating Manuals) or Services within seven (7) days
of the applicable dates for delivery set forth in the OTAF Statement of Work,
the Vendor will (to the extent the Owner will not have cancelled the applicable
order therefor pursuant to the terms of the Contract) credit to the Owner (in
the form of purchase credits for any Vendor Products including, but not limited
to, OTAF Products) as liquidated damages for such late performance for each of
the first [_________] days beyond such OTAF ▇▇▇▇▇ ▇▇▇▇▇ Period, an amount equal
to [___________] percent per day (for such [_________] day period) of the OTAF
Price; provided that upon the timely SCP/OTAF Field Acceptance (on the dates
originally scheduled for such SCP/OTAF Field Acceptance) of any such SCP/OTAF
Products and/or SCP/OTAF Services, any delay penalties accrued therefor shall be
forgiven.
Furthermore and in addition to any and all damages and/or
remedies available to the Owner pursuant to this Section 15, with respect to a
delay in the Specification compliant availability and installation of SCP/OTAF
Products and Services in accordance with the dates and requirements of the OTAF
Statement of Work that is in excess of thirty (30) days beyond the dates
originally scheduled for any such SCP/OTAF Products and Services availability
and installation, the Owner will be entitled to and the Vendor will provide for
the Owner's Nationwide Network, SPARC/OTAF Products and Services that are equal
in features and functionality to the SCP/OTAF Products and Services that would
have been available and installed pursuant to the OTAF Statement of Work but for
such delay in the availability and/or installation of Specification compliant
SCP/OTAF Products or Services.
(b) With respect to the Actiview Products and Actiview Services, in the
event the Vendor fails to deliver any such Actiview Statement of Work compliant
Actiview Products and/or Services within seven (7) days (the "Actiview ▇▇▇▇▇
▇▇▇▇▇ Period") of the applicable dates for delivery set forth in the Actiview
Statement of Work, the Vendor will (to the extent the Owner will not have
cancelled the applicable order therefor pursuant to the terms of the Contract)
credit to the Owner (in the form of purchase credits for any Vendor Products
including, but not limited to, Actiview Products) as liquidated damages for such
late performance for each of the first [______] days beyond such Actiview ▇▇▇▇▇
▇▇▇▇▇ Period, an amount equal to [__________] percent per day (for such
[________] day period) of the total price of such undelivered or unsatisfactory
Actiview Products or Actiview Services; provided that upon the timely Actiview
Functional Acceptance (on the dates originally scheduled for such Actiview
Functional Acceptance) of any such Actiview Products and Actiview Services, any
delay penalties accrued therefor shall be forgiven.
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
16.1 Force Majeure. (a) Either Party may make a claim for excusable
failure or delay with respect to any obligation of such Party under this
Contract, except any obligation to make payments when due. Excusable failure or
delay will be allowed only in the event of an event of Force Majeure that is
beyond the reasonable control of the affected Person. Notwithstanding the
foregoing, the Vendor will not be entitled to relief under this Section 16 to
the extent that any event otherwise constituting an event of Force Majeure
results from the negligence or fault of the Vendor or any Subcontractor, and the
Owner will not be entitled to relief under this Section 16 to the extent any
event otherwise constituting an event of Force Majeure results from the
negligence or fault of the Owner.
(b) The Party claiming the benefit of excusable delay hereunder must
(i) promptly notify the other Party of the circumstances creating the failure or
delay and provide a statement of the impact of such Party failure or delay and
(ii) use reasonable efforts to avoid or remove such causes of nonperformance,
excusable failure or delay. If an event of Force Majeure prevents the Vendor
from performing its obligations under this Contract for a period exceeding sixty
(60) days, the Owner may, upon prior written notice to the Vendor, terminate
this Contract.
(c) The Party not claiming the benefit of excusable delay hereunder
will likewise be excused from performance of its obligations hereunder on a
day-for-day basis to the extent such Party's obligations are affected due to the
other Party's delayed performance.
(d) In the event of a Force Majeure which the Party claiming relief for
such event has used all best efforts to resolve in accordance with the terms of
this Contract, upon the written request of either Party, the other Party will in
good faith negotiate modifications, to the extent reasonable and necessary, in
scheduling and performance criteria in order to reasonably address the impact of
such Force Majeure.
SECTION 17 WARRANTIES
17.1 Product Warranty. (a) The Vendor warrants that, for a period of
two (2) years from the date of Final Acceptance of any PCS System and/or PCS
Sub-System, as the case may be (the "Product Warranty Period"), all Products and
all of the Installation and the Configuration Engineering thereof within such
PCS System and/or PCS Sub-System, as the case may be, will materially conform
with and perform the functions set forth in the Specifications and the relevant
performance criteria set forth in Exhibit D, to the extent applicable, and will
be free from Defects and Deficiencies in material or workmanship which impair
service to subscribers, System performance, billing, administration and/or
maintenance. In the case of Software, the Product Warranty Period applicable to
any such Software will be automatically extended upon, and simultaneous with,
any Software Upgrade issued pursuant to the terms of Section 12. The Vendor will
assign to the Owner all outstanding Subcontractor warranties attributable to
Non-Essential Equipment at such time that the Vendor's warranty on such
Non-Essential Equipment pursuant to this subsection 17.1 expires pursuant to and
in accordance with the Product Warranty Period applicable to such Item of
Non-Essential Equipment. The Warranty Period for a PCS Product or part thereof
repaired or provided as a replacement under this Product warranty is six (6)
months or the unexpired term of the new Product Warranty Period applicable to
the repaired or replaced PCS Product or part, whichever is longer.
(b) To the extent the Owner orders additional Products from the Vendor
in accordance with the terms of this Contract including, but not limited to,
subsections 2.2 and/or 7.2, any such Products so ordered by the Owner and
delivered and installed by the Vendor or its Subcontractors will be warranted to
the same extent as set forth in clause (a) above for a period of not less than
twenty four (24) months from the earlier of (i) the date the Owner puts such
additional Products into In Revenue Service, (ii) the date of the Owner's
acceptance and (iii) thirty (30) days after the Vendor completes the
installation of such additional Products. If in the event, pursuant to the
Owner's order for such additional Products the Vendor is not required to install
such additional Products, the warranty on such additional products will run
twenty-four (24) months from the date the Vendor shipped such products to the
Owner.
17.1.1 AS Products Warranty. Notwithstanding anything stated
herein to the contrary, for the AS Products provided hereunder, the Vendor
warrants that, from the date of AS Final Acceptance of the installation and
Engineering thereof, the AS Products will materially conform with and perform
the functions set forth in the AS Statement of Work, to the extent applicable,
and will be free from Defects and Deficiencies for a warranty period (each as
applicable, an "AS Product Warranty Period") of (i) in the case of AS Software,
ninety (90) days and (ii) in the case of AS Equipment, one (1) year. In the case
of AS Software, the AS Product Warranty Period applicable to any such AS
Software will be automatically extended for a new ninety (90) day period
commencing on the date of the completion of any applicable Software Upgrade
and/or Software Enhancement upon, and simultaneous with, any Software Upgrade
and/or Software Enhancement issued pursuant to the terms of Section 12. To the
extent the Owner orders additional AS Products not otherwise covered pursuant to
Appendix G from the Vendor in accordance with the terms of this Contract, any
such AS Products so ordered by the Owner and delivered and installed by the
Vendor or its Subcontractors will be warranted to the same extent as set forth
above, from the earlier of (i) the date the Owner puts such additional AS
Products into In Revenue Service, (ii) the date of the Owner's acceptance of
such additional AS Products and (iii) thirty (30) days after the Vendor
completes the installation of such additional AS Products.
17.1.2 OTAF Products Warranty. Notwithstanding anything stated
herein to the contrary, for the OTAF Products provided hereunder, the Vendor
warrants that, from the date of OTAF Final Acceptance, the OTAF Products will
materially conform with and perform the functions set forth in the OTAF
Statement of Work, to the extent applicable, and will be free from Defects and
Deficiencies in material or workmanship which impair service to subscribers
and/or System performance, administration and/or maintenance for a warranty
period (each as applicable, an "OTAF Product Warranty Period") of (c) in the
case of OTAF Software, ninety (90) days and (d) in the case of OTAF Equipment,
one (1) year. In the case of OTAF Software, the OTAF Product Warranty Period
applicable to any such OTAF Software will be automatically extended for a new
ninety (90) day period commencing on the date of the completion of any
applicable Software Upgrade and/or Software Enhancement applicable to such OTAF
Software upon, and simultaneous with, any Software Upgrade and/or Software
Enhancement applicable to such OTAF Software issued pursuant to the terms of
Section 12.
17.1.3 Actiview Products Warranty. Notwithstanding anything
stated herein to the contrary, for the Actiview Products provided hereunder, the
Vendor warrants that, from the date of Actiview Final Acceptance, the Actiview
Products will materially conform with and perform the functions set forth in the
Actiview Statement of Work, to the extent applicable, and will be free from
Defects and Deficiencies in material or workmanship which impair service to
subscribers and/or System performance, administration and/or maintenance for a
warranty period (each as applicable, an "Actiview Product Warranty Period") of
ninety (90) days from the date of such Actiview Final Acceptance. The Actiview
Product Warranty Period applicable to Actiview Software will be automatically
extended for a new ninety (90) day period commencing on the date of the
completion of any applicable Software Upgrade and/or Software Enhancement
applicable to such Actiview Software upon, and simultaneous with, any Software
Upgrade and/or Software Enhancement applicable to such Actiview Software issued
pursuant to the terms of Section 12. To the extent the Owner orders additional
Actiview Software not otherwise covered pursuant to Appendix U from the Vendor
in accordance with the terms of this Contract, any such additional Actiview
Software so ordered by the Owner and delivered and installed by the Vendor or
its Subcontractors will be warranted to the same extent as set forth above, from
the earlier of (i) the date of the Owner puts such additional Actiview Software
into In Revenue Service, (ii) the date of the Owner's acceptance of such
additional Actiview Software and (iii) thirty (30) days after the Vendor
completes the installation of such additional Actiview Software.
17.2 Services Warranty (a) The Vendor warrants that, for a period of
not less than three (3) years from the date of completion of RF Engineering done
by the Vendor or its Subcontractors (but in no event earlier than the
achievement of Milestone 5 in such PCS System or PCS Sub-System) in any given
PCS System or PCS Sub-System, as the case may be (the "RF Services Warranty
Period"), the Final Site Count within and the Final RF Design applicable to such
PCS System or PCS Sub-System, as the case may be, will be accurate based upon
the environmental circumstances in such PCS System or PCS Sub-System, as the
case may be, as they existed at the time of the Final Acceptance of such PCS
System or PCS Sub-System, as the case may be, provided that the projections of
subscriber growth, traffic and other predictive data, including all applicable
standards as identified in Exhibits B1, D and H, upon which the Final Site Count
and Final RF Design have been determined, have not been materially exceeded or
the applicable and relevant industry standards have not materially changed; and
provided further that in no event will the RF Engineering warranty pursuant to
this subsection 17.2(a) cover or warrant items or performance otherwise covered
or warranted pursuant to subsection 17.3 below.
(b) The Vendor warrants that, for a period of not less than two (2)
years from the date of completion of Facilities Preparation Services within any
PCS System or PCS Sub-System, as the case may be, but in no event later than the
achievement of Milestone 8 pursuant to Exhibit A1 in such PCS System or PCS
Sub-System, as the case may be (provided that in the event of a Microwave Delay
Period in such PCS System or PCS Sub-System, as the case may be, pursuant to
subsection 2.38, the commencement of the Facilities Preparation Services
Warranty Period will not be later than three (3) months from the date the Vendor
would have otherwise been able to commence Substantial Completion testing in
such PCS System or PCS Sub-System, as the case may be, in accordance with
Exhibit B3 and Milestone 8 as set forth on Exhibit A1 but for the existence of
such Microwave Delay Period) (the "Facilities Preparation Services Warranty
Period" and collectively with the RF Services Warranty Period, the "Services
Warranty Periods"), such Facilities Preparation Services will be (i) operational
in accordance with the Specifications, (ii) in compliance with all material
Applicable Laws and material Applicable Permits in effect at the time of the
completion of such Facilities Preparation Services in such PCS System or PCS
Sub-System, as the case may be, and (iii) free from Defects or Deficiencies.
(c) The Vendor warrants that, for a period of six (6) months from the
date of completion, with respect to other Services performed by the Vendor and
not otherwise covered elsewhere in this Section 17, including, but not limited
to, repair Services, such other Service(s) will be free from Defects or
Deficiencies for which the Vendor is responsible pursuant to the terms of this
Contract.
17.3 System Warranty. The Vendor warrants that, for a period ending
three (3) years from the Final Acceptance of the last PCS System within the
Initial System (the "System Warranty Period"), the ongoing performance of each
PCS System together with all other PCS Systems and PCS Sub-Systems within the
System will conform with and perform to the performance criteria set forth on
Exhibit F as of the date of the Final Acceptance of such PCS System based on the
circumstances within such PCS System on such date. The System warranty pursuant
to this subsection 17.3 will be limited to the extent that the projections of
subscriber growth, traffic and other predictive data, including all applicable
standards as identified in Exhibits B1, D and H, upon which the Final Site Count
and Final RF Design have been determined, have not been materially exceeded or
the applicable and relevant industry standards have not materially changed.
17.4 Breach of Warranties. (a) In the event of any breach of any of the
Warranties during any of the applicable Warranty Periods set forth in
subsections 17.1(a), 17.2(a), 17.2(b), 17.2(c) and 17.3, the Vendor will, in
accordance with the terms of this Section 17, promptly repair or replace the
defective or nonconforming Product or otherwise cure any Defects and
Deficiencies so that each PCS Sub-System and each PCS System and the System as a
whole will perform in accordance with the Specifications and Exhibit F. If the
Vendor fails to promptly repair, replace and/or cure such defect, the Owner may,
in addition to exercising any other remedies available to it, itself cause such
repair, replacement and/or cure, at its option and at the sole cost and expense
of the Vendor.
(b) The Vendor recognizes that the Owner may suffer injury and may be
damaged in an amount which will be difficult to determine with certainty as a
result of Outages resulting from causes attributable to the failure of the
Vendor's Products and/or Services to perform in accordance with the
Specifications. As used herein, "Outage" means an unscheduled loss of
functionality of the System, any PCS System or any PCS Sub-System due to the
failures of PCS Products or any combination thereof defined as the loss of the
capability to originate or terminate [___________] percent or more of the active
voice channels then in service within the System or such PCS System and/or PCS
Sub-System for a period of time exceeding [_____] minutes.
(c) During the System Warranty Period, the Vendor will be liable to the
Owner for damages (the "Warranty Damages") for Outages (for other than in the
Test-bed Laboratory) that result from (i) the failure of the Vendor's Equipment
and/or Software to perform in accordance with the Specifications, (ii) the
failure of the Vendor to provide Services in accordance with the Specifications
applicable thereto, (iii) a Vendor procedural error or (iv) inaccurate Technical
Documentation, excluding marketing bulletins, sales literature or other
promotional materials provided by the Vendor to the Owner. As used herein,
"Vendor procedural error" means an error or improper deviation from the Vendor's
or its Subcontractors' procedures by, or attributable to, the Vendor's
personnel. Warranty Damages will be calculated based upon
[______________]dollars for each Outage occurring in any given PCS System to the
extent such Outage exceeds [__________] from the time the Owner notified the
Vendor of such Outage (not including such [__________]), plus [___________]
dollars per minute for [___________] the duration of the Outage exceeds
[___________] from the time the Owner notifies the Vendor of such Outage (not
including such [__________]). In the event any Outage is specific only to a PCS
Sub-System and not any other portion of the PCS System of which such PCS
Sub-System is a part (each a "PCS Sub-System Specific Outage"), then the amount
of the Warranty Damages payable to the Owner for any such PCS Sub-System Outage
pursuant to the terms of this subsection 17.4(c) will be calculated by
multiplying the applicable amounts set forth in this subsection 17.4(c) by the
percentage equal to the Contract Price for such PCS Sub-System divided by the
Contract Price for the entire PCS System of which such PCS Sub-System is a part
(for each PCS Sub-System, the "PCS Sub-System Percentage"). [______________].
(d) In no event will the Vendor's liability for Warranty Damages
pursuant to this subsection 17.4 exceed [___________] dollars with respect to
each Outage in any given PCS System; provided that the Warranty Damages cap
applicable to each PCS Sub-System Specific Outage will be [___________] dollars
multiplied by the applicable PCS Sub-System Percentage. In addition, the
Vendor's total liability for Warranty Damages pursuant to this subsection 17.4
will not exceed [___________] dollars per calendar year during the Term of this
Contract with respect to Outages in any given PCS System per calendar year;
provided that the annual Warranty Damages cap applicable to each PCS Sub-System
for all PCS Sub-System Specific Outages in each such PCS Sub-System will not
exceed [___________] dollars multiplied by the applicable PCS Sub-System
Percentage.
(e) Notwithstanding the foregoing, the Vendor will have no liability
pursuant to this subsection 17.4 for:
(i) Outages caused by a Force Majeure event
as described in Section 16 other than to the extent
that any of the Vendor's Products and/or Services
resulting in such Outages should, in accordance with
the Specifications be able to withstand any such
Force Majeure event;
(ii) Outages resulting from a scheduled
activity, including, but not limited to, System
maintenance or loading of Software or Equipment
Upgrades, Enhancements or Combined Releases, unless
said Outage (without fault of the Owner) extends
beyond the expected downtime, as provided in the
Specifications applicable thereto, associated with
such Equipment or Software maintenance Upgrades,
Enhancements or Combined Releases;
(iii) alterations by the Owner and/or the
Vendor at the Owner's request or otherwise pursuant
to the terms of this Contract to the System and/or
any PCS System and/or any PCS Sub-System, excluding
normal maintenance or parameter changes as prescribed
by the applicable Technical Documentation;
(iv) Outages resulting from the Owner's, its
subcontractors' or any third party's (if such third
party is employed by the Owner) failure to follow the
Technical Documentation;
(v) Outages resulting from the negligence,
gross negligence or willful misconduct of the Owner,
or any of its employees, agents or contractors or any
other third party (other than any Subcontractor or
any employees, representatives or agents of the
Vendor); or
(vi) Outages resulting from failure of
equipment or software not supplied by the Vendor or
any Subcontractors or from the performance of
services not performed by the Vendor or any
Subcontractors; or
(vii) Outages caused by the Owner's
deactivation of the System or any portion thereof,
unless the deactivation is undertaken in avoidance of
an unplanned outage; or
(viii) Outages caused by the failure of the
Network Interconnection facilities.
(f) On or before the beginning of each quarter of each calendar year
during the Term of this Contract, the Owner will provide the Vendor a written
report summarizing any Outages occurring during the previous calendar quarter.
The amount of any Warranty Damages will be determined by the Owner as of the end
of the fourth quarter of each calendar year during the Term, for the preceding
four quarterly reporting periods during such Term. The Owner will notify the
Vendor of any such Warranty Damages in writing. Such Damages will be payable in
credits on future purchases under this Contract or otherwise if this Contract is
terminated for any reason within thirty (30) days of the occurrence. Any
disputes regarding the determination of the cause of an Outage or the amount of
any such Warranty Damages will be resolved in accordance with the provisions of
Section 23.
17.5 Repair and Return. (a) If the Owner claims a breach of warranty
under subsections 17.1, 17.2 or 17.3, it must notify the Vendor of the claimed
breach within a reasonable time after its determination that a breach has in
fact occurred. The Owner will allow the Vendor to inspect the Products, the
Services or the System, as the case may be, on-site, or, upon the Vendor's
reasonable request and, subject to subsection 17.5(d) below, at the Vendor's
sole expense: (i) with respect to Products, return such Products to any of the
Vendor's repair facilities located in the United States and listed on Schedule
8, or (ii) with respect to Non-Essential Equipment, return such Non-Essential
Equipment to the Vendor (or to the third party manufacturer if previously
requested by the Vendor) for further return to the applicable third party
manufacturer. The Vendor or such third party manufacturer may use either new,
remanufactured, reconditioned, refurbished, or functionally equivalent Products
or parts pursuant to the terms of this Contract, including, but not limited to,
the Specifications, in the furnishing of warranty repairs or replacements under
this Contract.
(b) The Vendor agrees to commence work on all such Products,
Non-Essential Equipment, Services or any System Defect, as the case may be, or
Installation defects as soon as practicable, but the Vendor will use reasonable
efforts to commence such Work in no event later than twenty-four (24) hours
after notification of such defect, and, subject to subsections 17.5(e) and
17.5(f), the Vendor will cure such defect as promptly as practicable. During the
Product Warranty Period electronic circuit board components of Equipment or
Non-Essential Equipment, as the case may be, will be repaired or replaced by the
Vendor.
(c) Failure of the System to function to the level of the performance
warranty as set forth in subsection 17.3 will result in the obligation of the
Vendor to promptly make whatever repairs, modifications, alterations, expansions
or to take any other action of any kind, including but not limited to the
provision of additional Products and/or Services, necessary to satisfactorily
fix that portion of the System causing any failure for which the Vendor is
responsible. In the event of a breach of the warranties in Section 17 which will
be cured with the installation of additional PCS Products, the Vendor will
provide such PCS Products, together with related transportation, Installation
and optimization Services, as are reasonably required to remedy the shortfall,
at no charge to the Owner, provided that, if in order to remedy the shortfall,
the number of additional Base Stations required to cure the Vendor's breach
under these warranties is not in excess of five percent (5%) of the total number
of Base Stations in the relevant PCS System (as such "total number" is as set
forth in the Final RF Engineering Plan), the Vendor will not be obligated to pay
for the Base Stations and the installation and transportation related thereto
required to cure such breach, provided further that the Vendor will be obligated
to provide and pay for any Base Stations and the installation and transportation
related thereto in excess of any such five percent (5%) shortfall.
(d) All costs associated with (i) removing or disconnecting the
Products or the Non-Essential Equipment subject to the warranty claim pursuant
to the terms of this Section 17 from any other Products, the respective PCS
System or PCS Sub-System or any part thereof or from other equipment, any other
PCS system or any part thereof to which they are attached or connected, or (ii)
dismantling surrounding Products, the respective PCS System or PCS Sub-System or
any part thereof or any other equipment or other PCS system or any part thereof
in order to so remove or disconnect the Products or Non-Essential Equipment
subject to such warranty claim will be borne by the Vendor throughout the
applicable Warranty Period unless such Products are readily returnable to the
Vendor in which case the Owner will bear all such costs. All packaging, shipping
and freight charges incurred in connection with the return of Items to the
Vendor will be borne by the Owner. The Vendor will be responsible for packing,
shipping and freight charges for return of repaired or replacement Items to the
Owner, unless the Products or Non-Essential Equipment, as the case may be,
returned are not Defective or otherwise not covered by the Vendor's warranty
pursuant to subsection 17.1, in which case the Owner will pay for all such
charges between the Owner's point of origin and the Vendor's applicable repair
facility in the United States.
(e) For routine warranty service, the Vendor will, during the
respective Warranty Period, ship replacement or repaired Products or
Non-Essential Equipment (or components thereof) within thirty (30) days of
receipt of the Defective Equipment or Non-Essential Equipment (or components
thereof) from the Owner. In the event such replacement or repaired Products or
Non-Essential Equipment cannot be shipped within such time period, or if the
Vendor determines that due to the particular circumstances, on-site repairs or
services are required, the Vendor will undertake such repairs or replacement
services on-site within thirty (30) days of notification of the warranty Defect
by the Owner. In the event that the Vendor fails to repair or replace Defective
Products and/or Non-Essential Equipment within thirty (30) days from the Owner's
notice to the Vendor, then the Vendor will be deemed to be in breach of its
obligations pursuant to this Contract and the Owner will be entitled to receive
a refund of all amounts previously paid to the Vendor for the Defective Products
or Non-Essential Equipment, and will have no further obligation to pay
additional amounts in connection with the Defective Products or Non-Essential
Equipment. The Owner will return such Defective Products and Non-Essential
Equipment to the Vendor at the Vendor's sole cost and expense.
(f) For emergency warranty service situations, the Vendor will, during
the applicable Warranty Periods, use its best efforts to ship replacement
Products or Non-Essential Equipment (or components thereof) no later than twelve
(12) hours after notification of the warranty Defect by the Owner. The Owner
will ship the Defective Products or Non-Essential Equipment to the Vendor within
thirty (30) days of receipt of the replacement Products or Non-Essential
Equipment, as the case may be. In the event the Vendor fails to receive such
Defective Products or Non-Essential Equipment within such thirty (30) day
period, the Vendor will invoice the Owner for the replacement Products or
Non-Essential Equipment at the then-current price in effect therefor pursuant to
the terms of this Contract. If in an emergency warranty service situation, the
Owner and/or the Vendor determines that due to the particular circumstances,
on-site technical assistance is necessary, the Vendor will dispatch emergency
service personnel to the site in accordance with the terms of subsection 2.26.
For the purpose of this subsection 17.5, an emergency warranty service situation
will be deemed to exist upon the occurrence of any E1 Emergency Condition or E2
Emergency Condition. The Vendor agrees to commence work on all Equipment,
Non-Essential Equipment, Facilities Preparation Services or any System defect,
as the case may be, or Installation defects materially impairing service to
subscribers, System performance, billing, administration and/or maintenance as
soon as practicable, but in no event later than twenty-four (24) hours after
notification of such defect, and the Vendor will cure such defect as promptly as
practicable.
17.6 Technical Assistance Center. The Vendor must maintain a technical
assistance center in the United States, and during the Warranty Periods
established pursuant to subsections 17.1(a), 17.1(b), 17.2 and 17.3,
respectively, will make such support center available to the Owner twenty-four
(24) hours per day free of any additional charge to the Owner (other than
applicable Annual Release Maintenance Fees).
17.7 Scope of Warranties. Unless otherwise stated herein, the Vendor's
warranties under this Section 17 will not apply to:
17.7.1 damage or defects resulting from the negligence, gross
negligence or willful misconduct of the Owner, or any of its employees, agents
or contractors;
17.7.2 any Equipment or Software damaged by accident or
disaster, including without limitation, fire, flood, wind, water, lightning or
power failure other than to the extent that any such Equipment or Software
should in accordance with the Specifications and/or the Vendor's representations
be able to withstand any such events; or
17.7.3 non-integral items (other than any Non-Essential
Equipment otherwise covered by subsection 17.1) normally consumed in operation
or which has a normal life inherently shorter than the Warranty Periods (e.g.,
fuses, lamps, magnetic tape); or
17.7.4 damages or defects resulting directly from Other
Vendor's equipment provided that this will in no event limit the Vendor's
obligations as to Interoperability pursuant to the terms of this Contract;
17.7.5 Products which have had their serial numbers or months
and year of manufacture removed or obliterated by the Owner;
17.7.6 failures or deficiencies in BTS performance resulting
solely from changed environmental conditions, including, but not limited to, the
growth of trees and other foliage, the erection of buildings, and interference
from third party radio transmissions not otherwise engineered for by the Vendor;
or
17.7.7 Owner modifications to (i) SCP/HLR Software (including
the Platform Software in SCP/HLR Hardware) done pursuant to subsection 12.5,
(ii) Owner modifications to AS Software and/or Actiview Software done pursuant
to subsection 12.6 or (iii) Owner modifications to OTAF Software done pursuant
to subsection 12.7.
except when any such damage or defects are made, done or caused by the Vendor or
any of its Subcontractors.
17.8 Expenses. Except as otherwise provided in this Section 17, the
Owner will reimburse the Vendor for the Vendor's out-of-pocket expenses incurred
at the Owner's request in responding to and/or remedying Products, Non-Essential
Equipment, Services or any System defect, or service Deficiencies not covered by
the warranties set forth herein or otherwise covered under a separate System
maintenance agreement (subject, however, to the terms and conditions of any such
agreement) between the Vendor and the Owner.
17.9 Third Party Warranties. If the Vendor purchases or subcontracts
for the manufacture of any part of the System or the performance of any of the
Services to be provided hereunder from a third party, the warranties given to
the Vendor by such third party will inure, to the extent assigned to the Owner
pursuant to this Section 17 or permitted by law, to the benefit of the Owner,
and the Owner will have the right, at its sole discretion, to enforce such
warranties directly and/or through the Vendor. The warranties of such third
parties will be in addition to and will not, unless otherwise expressly stated
herein, be in lieu of any warranties given by the Vendor under this Contract.
17.10 Additional System Element Locations. In the event that under the
remedy provisions of this Section 17 the Vendor is required to provide
additional MSC and/or Base Stations requiring additional System Element
Locations, the Owner will be responsible for all Site Acquisition and Facilities
Preparation Services costs (other than any construction management costs or fees
which will be borne by the Vendor).
17.11 EXCLUSIVE REMEDIES. THE FOREGOING PRODUCT, SERVICES AND SYSTEM
WARRANTIES AND REMEDIES ARE EXCLUSIVE FOR THE PURPOSES OF ANY BREACH BY THE
VENDOR OF ANY SUCH WARRANTY AND ARE IN LIEU OF ALL OTHER EXPRESS AND IMPLIED
WARRANTIES, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
SECTION 18 INSURANCE
18.1 Insurance. The Vendor will maintain insurance in accordance with
the provisions set forth in Schedule 6.
SECTION 19 TAXES
19.1 Taxes. The amounts to be paid by the Owner under this Contract do
not include any state, provincial or local sales and use taxes, however
designated, which may be levied or assessed on the System, any PCS System, any
PCS Sub-System or any component thereof, including, but not limited to, the
Services. With respect to such taxes, the Owner will either furnish the Vendor
with an appropriate exemption certificate applicable thereto or pay to the
Vendor, upon presentation of invoices therefor, such amounts thereof as the
Vendor may by law be required to collect or pay; provided, however, that the
Vendor will use its best efforts to minimize the amount of any such taxes. The
Owner has no obligation to the Vendor with respect to other taxes, including,
but not limited to, those relating to franchise, net or gross income or revenue,
license, occupation, other real or personal property, and fees relating to
importation of the Products in the United States.
SECTION 20 INDEMNIFICATION AND LIMITATION OF LIABILITY
20.1 Vendor Indemnity. (a) The Vendor will indemnify and hold the Owner
and its Affiliates, partners, directors, officers, agents and employees (the
"Indemnitees") harmless from and against all third party claims, demands suits,
proceedings, damages, costs, expenses, liabilities (including, without
limitation, reasonable legal fees) or causes of action (collectively,
"Liabilities") brought against or incurred by any Indemnitee for (i) injury to
persons (including physical or mental injury, libel, slander and death), or (ii)
loss or damage to any property, or (iii) violations of Applicable Laws,
Applicable Permits, codes, ordinances or regulations by the Vendor, or (iv) any
patent or trademark claims arising out of the Vendor's obligation subject to
subsection 14.2 or (v) any other liability, resulting from the acts or
omissions, negligence, error, willful misconduct or strict liability, of the
Vendor, its officers, agents, employees, or Subcontractors in the performance of
this Contract. If the Vendor and the Owner jointly cause such Liabilities, the
Parties will share the liability in proportion to their respective degree of
causal responsibility.
(b) The Vendor's obligation to indemnify under subsection 20.1(a) with
respect to any Liability will not arise unless the Owner or the Indemnitee (i)
notifies the Vendor in writing of such potential Liability, in the case of the
Owner, within a reasonable time after the Owner will receive written notice of
such Liability; provided that the lack of such notice will not affect the
Vendor's obligation hereunder (A) if the Vendor otherwise has knowledge of such
Liability and (B) unless such lack of notice is the cause of the Vendor being
unable to adequately and reasonably defend such Liability, (ii) gives the Vendor
the opportunity and authority to assume the defense of and settle such
Liability, subject to the provisions of the next two sentences, and (iii)
furnishes to the Vendor all such reasonable information and assistance available
to the Owner (or other Indemnitees) as may be reasonably requested by the Vendor
and necessary for the defense against such Liability. The Vendor will assume on
behalf of the Indemnitee and conduct with due diligence and in good faith the
defense of such Liability with counsel (including in-house counsel) reasonably
satisfactory to the Indemnitee; provided that the Indemnitee will have the right
to be represented therein by advisory counsel of its own selection and at its
own expense. If the Indemnitee will have reasonably concluded that there may be
legal defenses available to it which are different from or additional to, or
inconsistent with, those available to the Vendor, the Indemnitee will have the
right to select separate counsel reasonably satisfactory to the Vendor to
participate in the defense of such action on its own behalf at the Vendor's
expense. In the event the Vendor fails to defend any Liability as to which an
indemnity might be provided herein, then the Indemnitee may, at the Vendor's
expense, contest or settle such matter without the Vendor's consent. All
payments, losses, damages and reasonable costs and expenses incurred in
connection with such contest, payment or settlement will be to the Vendor's
account and may be deducted from any amounts due to the Vendor. The Vendor will
not settle any such Liability without consent of the Indemnitee, which consent
will not be unreasonably withheld. This indemnity is in lieu of all other
obligations of the Vendor, expressed or implied, in law or in equity, to
indemnify the Indemnitees (except pursuant to Section 14 or any other Vendor
indemnitees set forth in this Contract).
20.2 LIMITATION ON LIABILITY. EXCEPT AS PROVIDED IN SUBSECTIONS 14.2,
15.2, 15.3, 15.4, 15.5, 15.6, 15.7, 15.8, 15.9, 15.10, 17.4, 20.1, AND 20.3
HEREOF, IN NO EVENT, AS A RESULT OF BREACH OF CONTRACT OR BREACH OF WARRANTY,
WILL EITHER PARTY HERETO BE LIABLE UNDER THIS CONTRACT TO THE OTHER PARTY FOR
ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES, INCLUDING LOST PROFITS OR REVENUES OF
SUCH PARTY, BEFORE OR AFTER ACCEPTANCE, WHETHER OR NOT SUCH DAMAGES ARE
FORESEEABLE.
20.3 Damages for Fraud or Willful Misconduct (a) The Vendor will be
responsible for all damages, including without limitation, indirect, incidental
and consequential damages, incurred by the Owner as a result of any damage or
injury caused by or resulting from the fraud or willful misconduct of the
Vendor.
(-)
(b) The Vendor will be responsible for all damages, but excluding
indirect, incidental and consequential damages, incurred by the Owner as a
result of any damages or injury caused by or resulting from the fraud, gross
negligence or willful misconduct of any of the Subcontractors related to the
performance of the Work, to the extent the Vendor would have liability therefor
under this Contract if the Vendor had engaged in such conduct.
SECTION 21 REPRESENTATIONS AND WARRANTIES
21.1 Representations and Warranties of the Vendor. The Vendor hereby
represents and warrants to the Owner as follows:
21.1.1 Due Organization of the Vendor. The Vendor is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of New York and has all requisite corporate power and
authority to own and operate its business and properties and to carry on its
business as such business is now being conducted and is duly qualified to do
business in all jurisdictions in which the transaction of its business in
connection with the performance of its obligations under this Contract makes
such qualification necessary or required.
21.1.2 Due Authorization of the Vendor; Binding Obligation.
The Vendor has full corporate power and authority to execute and deliver this
Contract and to perform its obligations hereunder, and the execution, delivery
and performance of this Contract by the Vendor have been duly authorized by all
necessary corporate action on the part of the Vendor; this Contract has been
duly executed and delivered by the Vendor and is the valid and binding
obligation of the Vendor enforceable in accordance with its terms, except as
enforcement thereof may be limited by or with respect to the following: (i)
applicable insolvency, moratorium, bankruptcy, fraudulent conveyance and other
similar laws of general application relating to or affecting the rights and
remedies of creditors; (ii) application of equitable principles (whether
enforcement is sought in proceedings in equity or at law); and (iii) provided
the remedy of specific enforcement or of injunctive relief is subject to the
discretion of the court before which any proceeding therefore may be brought.
21.1.3 Non-Contravention. The execution, delivery and
performance of this Contract by the Vendor and the consummation of the
transactions contemplated hereby do not and will not contravene the certificate
of incorporation or by-laws of the Vendor and do not and will not conflict with
or result in (i) a breach of or default under any indenture, mortgage, lease,
agreement, instrument, judgment, decree, order or ruling to which the Vendor is
a Party or by which it or any of its properties is bound or affected, or (ii) a
breach of any Applicable Law.
21.1.4 Regulatory Approvals. All authorizations by, approvals
or orders by, consents of, notices to, filings with or other acts by or in
respect of any Governmental Entity or any other Person required in connection
with the execution, delivery and performance of this Contract by the Vendor have
been obtained or will be obtained in due course.
21.1.5 Non-Infringement. The Vendor represents and warrants to
the best of its knowledge based on reasonable diligence under the circumstances
that as of the Effective Date there are no actual claims or threatened or actual
suits in connection with patents and other intellectual property matters that
would materially adversely affect the Vendor's ability to perform its
obligations under this Contract.
21.1.6 Scope. The representations and warranties of the Vendor
pursuant to this subsection 21.1 will be deemed to apply to all of the Work
performed by any Subcontractor employed by the Vendor as though the Vendor had
itself performed such Work.
21.1.7 Requisite Knowledge. The Vendor represents and warrants
that it has all requisite knowledge, know-how, skill, expertise and experience
to perform the Work in accordance with the terms of this Contract.
21.1.8 Financial Capacity. The Vendor represents and
warrants the financial, management and manufacturing capacity and capabilities
to do the Work in a timely manner in accordance with the terms of this
Contract.
21.2 Representations and Warranties of the Owner. The Owner hereby .
represents and warrants to the Vendor as follows:
21.2.1 Due Organization of the Owner. The Owner is a limited
partnership, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to own and operate its
business and properties and to carry on its business as such business is now
being conducted and is duly qualified to do business in Delaware and in any
other jurisdiction in which the transaction of its business makes such
qualification necessary.
21.2.2 Due Authorization of the Owner; Binding Obligation. The
Owner has full power and authority to execute and deliver this Contract and to
perform its obligations hereunder, and the execution, delivery and performance
of this Contract by the Owner have been duly authorized by all necessary
partnership action on the part of the Owner; this Contract has been duly
executed and delivered by the Owner and is the valid and binding obligation of
the Owner enforceable in accordance with its terms, except as enforcement
thereof may be limited by or with respect to the following: (i) applicable
insolvency, moratorium, bankruptcy, fraudulent conveyance and other similar laws
of general application relating to or affecting the rights and remedies of
creditors; (ii) application of equitable principles (whether enforcement is
sought in proceedings in equity or at law); and (iii) provided the remedy of
specific enforcement or of injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
21.2.3 Non-Contravention. The execution, delivery and
performance of this Contract by the Owner and the consummation of the
transactions contemplated hereby do not and will not contravene the partnership
arrangements governing the conduct of the partners in the Owner and do not and
will not conflict with or result in (i) a breach of or default under any
indenture, mortgage, lease, agreement, instrument, judgment, decree, order or
ruling to which the Owner is a Party or by which it or any of its properties is
bound or affected, or (ii) a breach of any Applicable Law.
SECTION 22 TITLE AND RISK OF LOSS
22.1 Title. Title to each Item of Equipment (but in no case Software)
will pass to the Owner upon delivery thereof by the Vendor to the System Element
Location to which each such Item belongs or such other location specifically
requested by the Owner or as otherwise mutually agreed to by the Parties. Prior
to acquiring title to the Equipment, the Owner will not cause or permit the
Equipment to be sold, leased or subjected to a lien or other encumbrance.
22.2 Risk of Loss. Risk of loss of any Products furnished to the Owner
in connection with this Contract will pass from the Vendor to the Owner upon the
completion of the Bolt-down by the Vendor of any PCS Product or at the
completion of installation of any other Product each at the appropriate System
Element Location within the given PCS System and/or PCS Sub-System provided that
the risk of loss of any such PCS System or PCS Sub-System within the System will
not pass to the Owner until such time as the Vendor is fully prepared to
commence testing for the Substantial Completion of such PCS System or PCS
Sub-System in accordance with and pursuant to Exhibit B3 and Exhibit A1;
provided, however, that the Owner will assume the risk of loss prior to such
Substantial Completion by the Vendor for any such Products damaged due to the
gross negligence or willful misconduct of the Owner (provided that the Owner
will also assume the risk of loss for its own negligence at any time after
Milestone 6 (as set forth in Exhibit A1) in each PCS System and/or PCS
Sub-System within the System). With respect to Products delivered by the Vendor
but not otherwise installed by the Vendor pursuant to and in accordance with the
terms of this Contract, risk of loss will pass to the Owner upon delivery by the
Vendor to the Owner's designated site. Until such time as risk passes to the
Owner, the Vendor will, at its sole cost and expense, remedy, repair and replace
all physical damage, loss or injury to such property; provided that, prior to
the passing of risk of loss to the Owner, any actual proceeds of its applicable
insurance payable with respect to such physical damage at such time, loss or
injury are paid to the Vendor as necessary to achieve such remedy, repair or
replacement.
22.3 AS Products Risk of Loss. Notwithstanding anything contained in
this Section 22 to the contrary, risk of loss as to AS Products will pass to the
Owner upon the delivery to the Owner's designated location.
22.4 OTAF and Actiview Products Risk of Loss. Notwithstanding anything
contained in this Section 22 to the contrary, risk of loss as to OTAF and/or
Actiview Products (as appropriate) will pass to the Owner upon delivery (and
installation to the extent applicable) thereof to the Owner's designated
location.
SECTION 23 DISPUTE RESOLUTION
23.1 Dispute Resolution. Subject to subsection 23.4 and subsection
24.3, in the event any controversy, claim, dispute, difference or
misunderstanding arises out of or relates to this Contract, any term or
condition hereof, any of the Work to be performed hereunder or in connection
herewith, the respective System Managers of the Owner and the Vendor will meet
and negotiate in good faith in an attempt to amicably resolve such controversy,
claim, dispute, difference or misunderstanding in writing. Such System Managers
must meet for this purpose within ten (10) Business Days, or such other time
period mutually agreed to by the Parties, after such controversy, claim,
dispute, difference or misunderstanding arises. If the Parties are unable to
resolve the controversy, claim, dispute, difference or misunderstanding through
good faith negotiations within such ten (10) business day period, each Party
will, within five (5) Business Days after the expiration of such ten (10)
business day period, prepare a written position statement which summarizes the
unresolved issues and such Party's proposed resolution. Such position statement
must be delivered by the Vendor to the Owner's Vice President of Engineering or
Operations and by the Owner to the Vendor's corresponding officer or
representative for resolution within (5) Business Days, or such other time
period mutually agreed to by the Parties.
If the Parties continue to be unable to resolve the controversy, claim,
dispute, difference or misunderstanding, either Party may initiate arbitration
in accordance with the provisions of subsection 23.2 below; provided, however,
that with respect to any controversy, claim, dispute, difference or
misunderstanding arising out of or relating to this Contract by which either
Party seeks to obtain from the other monetary damages in excess of twenty-five
million dollars ($25,000,000), either Party, in such case, may commence an
action in any state or federal court in accordance with subsection 27.7 to
resolve such matter in lieu of proceeding with an arbitration pursuant to and in
accordance with subsection 23.2. The arbitrators hired or otherwise chosen
pursuant to and in accordance with the terms of this Contract will determine
issues of arbitrability pursuant to the terms of this Contract but may not in
any way limit, expand or otherwise modify the terms of this Contract nor will
they have any authority to award punitive or other damages in excess of
compensatory damages (other than as specifically set forth in this Contract) and
each Party irrevocably waives any such claim thereto when invoking the
arbitration provisions of subsection 23.2.
23.2 Arbitration. An arbitration proceeding initiated by either Party
under this Contract with respect to any controversy, claim, dispute, difference
or misunderstanding will be conducted in Kansas City, Missouri in accordance
with the Commercial Arbitration rules of the AAA, except that, at the request of
either Party, a stenographic transcript of the testimony and proceedings will be
taken and the arbitrators will base their decision upon the records and briefs
of the Parties.
Such arbitration will be initiated by either Party by notifying the
other Party in writing and will be settled before three (3) impartial
arbitrators, one of whom will be named by the Owner, one by the Vendor and the
third by the two arbitrators appointed by the Owner and the Vendor,
respectively. All of the named arbitrators will have significant experience in
the wireless telecommunications industry. If either the Owner or the Vendor
fails to select an arbitrator within ten (10) days after notice has been given
of the initiation of the arbitration, the officer in charge of the Kansas City,
Missouri office of the AAA will have the right to appoint the other arbitrator,
and the two arbitrators thus chosen will then select the third arbitrator.
Except as the Parties may otherwise mutually agree, the arbitration
hearings will commence within fifteen (15) Business Days after a Party's
initiation of the arbitration. The Federal Rules of Evidence will apply and
reasonable discovery, including depositions, will be permitted. Discovery issues
will be decided by the arbitrators and post-hearing briefs will be permitted.
The arbitrators will render a decision within ten (10) days after the
conclusion of the hearing(s) and submission of post-hearing briefs and a written
opinion setting forth findings of fact and conclusions of law will be made
available to the Parties within that time period. The decision of the majority
of the arbitrators regarding the matter submitted will be final and binding upon
the Parties. Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
Each Party will pay for the services and expenses of the arbitrator
appointed by it, its witnesses and attorneys, and all other costs incurred in
connection with the arbitration (including, without limitation, the cost of the
services and expenses of the arbitrator appointed by the two arbitrators
appointed by the Parties) will be paid in equal part by the Parties, unless the
award will specify a different division of the costs. Unless otherwise
specifically stated in this Contract, during the pendency of any arbitration
proceedings, the Parties agree to continue to perform their obligations
hereunder in the same manner as prior to the institution of arbitration
proceedings.
23.3 Third Party Engineer. Disputes arising under subsections 2.6, 2.7,
9.5(b), 9.6, 10.1 and 17.4 of this Contract, or as otherwise specifically
provided elsewhere in this Contract, or as otherwise mutually agreed by the
Parties, are to be resolved by the Third Party Engineer in the manner provided
in this subsection 23.3. The Vendor and the Buyer will first attempt to resolve
the dispute through consultation and negotiation in good faith and in a spirit
of mutual cooperation as provided in subsection 23.1 above. If those attempts
fail, then either Party may submit its written notice to the other Party
requesting that the dispute be resolved by the Third Party Engineer, in
accordance with the merits of the dispute. If, within ten (10) Business Days
after the receipt of such notice by the notified Party, the dispute is not
resolved, the Owner will select one of the Third Party Engineers listed on
Schedule 14 to render decision in the dispute. The Third Party Engineer will
issue a written decision containing an explanation of how and why the decision
was reached. The Third Party Engineer's decision will be final and binding,
except with respect to any opinion that over the Term of the Contract will
impact the losing Party in the amount of one million dollars ($1,000,000) or
more. If within ten (10) Business Days following the issuance of any such
opinion the Parties have not agreed to implement the terms of any such opinion
that is not final, either Party may seek arbitration pursuant to the provisions
of subsection 23.2 above. In such arbitration, either Party may introduce into
evidence the opinion of the Third Party Engineer, but the arbitrator(s) must
rule on all issues of the dispute on a de novo basis, except as to any facts or
other matters set forth in the opinion and stipulated by both of the Parties. If
none of the listed Third Party Engineers is available or if none accepts the
assignment and the Parties cannot otherwise mutually agree to another Third
Party Engineer, an experienced and reputable engineer (who is not employed by
either Party or any of their Affiliates or affiliates) will be chosen by the
then President of the Institute of Electrical and Electronic Engineers (or the
Vice President, if the President is a present or former employee of any such
entities) to serve as the Third Party Engineer for the purposes of resolving the
dispute. Unless otherwise mutually agreed by the Parties, any Person who is an
officer or employee, agent, Subcontractor or subcontractor of, or a technical
consultant to, either Party will be automatically ineligible to be the Third
Party Engineer. The costs of utilizing a Third Party Engineer to resolve
disputes under this subsection 23.3 will be shared equally by both Parties.
23.4 Other Remedies. Notwithstanding anything to the contrary herein
contained, each Party will be entitled to pursue any equitable rights and
remedies that are available at law or in equity without complying with
subsection 23.2 or 23.3.
23.5 Tolling. All applicable statutes of limitation will be tolled to
the extent permitted by Applicable Law while the dispute resolution procedures
specified in this Section 23 are pending, and nothing herein will be deemed to
bar any Party from taking such action as the Party may reasonably deem to be
required to effectuate such tolling.
SECTION 24 TERMINATION AND EVENTS OF DEFAULT
24.1 Termination Without Cause. (a) The Owner may, at its sole option,
terminate this Contract, in its entirety, for convenience upon ninety (90) days'
prior written notice at any time; provided that prior to any such termination
pursuant to this subsection 24.1 the Minimum Commitment will have been fulfilled
by the Owner in accordance with the terms of this Contract.
(b) Any orders for Vendor Work within any PCS System and/or PCS
Sub-System within the System made by the Owner pursuant to and in accordance
with the terms of this Contract and the program management procedures of the
Owner prior to any such termination described in clause (a) above, other than
the Initial Commitment, will remain in effect and will be fulfilled to the
extent that such orders are outstanding as of the date of such termination. For
the purposes of this subsection 24.1(b) an "order" will not include the Initial
Commitment or any order for a full PCS System or PCS Sub-System within the
Initial System or the System.
24.2 Termination for Cause. The Owner also has the right to terminate
this Contract in its entirety (except as otherwise set forth in clause (l)
below) without any penalty or payment obligation upon the occurrence of any
Vendor event of default (each a "Vendor Event of Default") as set forth below.
The occurrence of any of the following will constitute a Vendor Event of
Default:
(a) the Vendor (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed within
forty-five (45) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it, (iii) is adjudged
bankrupt, or (iv) makes a general assignment for the benefit of its creditors,
or if a receiver is appointed for all or a substantial portion of its assets and
is not discharged within sixty (60) days after his appointment; or
(b) the Vendor commences any proceeding for relief from its creditors
in any court under any state insolvency statutes; or
(c) the Vendor materially disregards or materially violates material
Applicable Laws or material Applicable Permits; or
(d) the Vendor persistently and materially allows Defects and Defi-
ciencies to exist; or
(e) the Vendor fails to fulfill its obligations with respect to the
satisfaction, discharge or bonding of liens as set forth in subsection 2.36
hereof; or
(f) the Vendor abandons or ceases for a period in excess of thirty (30)
days its performance of the Work (except as a result of a casualty which is
fully covered by insurance or as to which other provisions reasonably acceptable
to the Owner are being diligently pursued) or fails to begin the Work within
thirty (30) days after the Notice to Proceed Date; or
(g) the Vendor assigns or subcontracts Work other than as provided for
in this Contract; or
(h) the Vendor fails to materially comply with any Change Order; or
(i) the Vendor fails to perform this Contract (including, without
limitation, any action the Vendor may take on any Vendor-Controlled Site) and
thereby prejudices in any way deemed material by the parties providing financing
in connection with the build-out of the Nationwide Network and/or the Owner in
their reasonable opinion the Owner's efforts to obtain financing for the System
and/or the Nationwide System; or
(j) the Vendor fails to pay to the Owner any material amount due to
the Owner by the date required for such payment; or
(k) the Vendor fails to comply with subsection 27.22;
(l) the Vendor misses any Interim Milestone within any given PCS System
or PCS Sub-System by a period in excess of thirty (30) days and such failure to
achieve such Interim Milestone was not caused by (i) a Force Majeure event
and/or (ii) any act or omission of the Owner; provided that in such case the
Owner will have the right, but not the obligation, to terminate this Contract
with respect to only that PCS System or PCS Sub-System in which such interim
delay occurred unless such interim delay relates to Milestone 4 (as set forth on
Exhibit A1) in which case the Owner will have the right, but not the obligation,
to terminate this Contract in its entirety as otherwise set forth in this
subsection 24.2; or
(m) the Vendor otherwise materially breaches any provision of this
Contract.
24.3 Remedies. (a) If any of the Vendor Events of Default exists, the
Owner may, without prejudice to any other rights or remedies of the Owner in
this Contract or at law or in equity, terminate this Contract upon written
notice to the Vendor; provided, however, that the Owner will have first provided
to the Vendor the following periods of notice and opportunity to cure:
(i) in the case of an Event of Default specified in the
foregoing clauses (e) and (k), the Owner will have provided seven (7)
days' prior written notice to the Vendor, and the Vendor will have
failed to remedy such breach entirely by the end of such seven (7) day
period;
(ii) in the case of an Event of Default specified in the
foregoing clauses (a) or (b), no notice or opportunity to cure will be
required from the Owner; and
(iii) in the case of any other Event of Default by the Vendor,
the Owner will have provided forty-five (45) days' prior written
notice, and the Vendor will have failed (i) to commence to cure the
default within five (5) days of delivery of such notice, and (ii) to
diligently pursue such cure and remedy the breach entirely by the end
of said forty-five (45) day notice period.
(b) If the Owner elects to terminate this Contract, the Owner may,
without prejudice to any other rights or remedies of the Owner in this Contract
or of law or in equity, do one or more of the following:
(i) Take possession of all Engineering and design data,
procurement data, manufacturing data, construction and erection data,
start-up and testing data, materials, and Products that will become
part of the System and/or the specified PCS Systems and/or the
specified PCS Sub-Systems, or the Work, whether any of the same is in a
partial state of completion or completed condition, and title to any of
said items vests in the Owner (if not already vested by the provisions
of this Contract);
(ii) Take temporary possession and control of all of the
Vendor's installation equipment, machinery, and the Vendor's materials,
supplies, Software and any and all tools (including, but not limited
to, any and all RF Engineering tools and/or software) at any project
site, including but not limited to any System Element Location, within
the System and/or the specified PCS Systems and/or the specified PCS
Sub-Systems which in the Owner's opinion are necessary to finish the
Work;
(iii) Direct that the Vendor assign its Subcontractor
agreements to the Owner without any change of price or conditions
therein or penalty or payment therefor; or
(iv) Take over and finish the Work by whatever reasonable
methods the Owner may deem expedient;
provided, that, nothing contained in paragraphs (a) through (d) above will
require the Vendor to relinquish to the Owner any of its manufacturing
facilities, specific Product designs (other than such designs previously
provided to the Owner pursuant to the terms of this Contract), Software Source
Codes, trade secrets or proprietary information not previously provided or made
available to the Owner, the System or any part thereof or any materials,
supplies, inventories, tools, software, engineering and/or designs that are not
integral or relevant to the completion of the Work.
24.4 Discontinuance of Work. Upon such notification of termination, the
Vendor must immediately discontinue all of the Work (unless such notice of
termination directs otherwise), and, as more fully set forth in subsection
24.3(b) clauses (i) through (iv), deliver to the Owner copies of all data,
drawings, specifications, reports, estimates, summaries, and such other
information, and materials as may have been accumulated by the Vendor in
performing the Work, whether completed or in process. Furthermore, the Vendor
must assign, assemble and deliver to the Owner all purchase orders and
Subcontractor agreements requested by the Owner.
24.5 Payments. When the Owner terminates this Contract for cause
pursuant to subsection 24.2, the Vendor will not be entitled to receive further
payment other than payments due and payable under this Contract and not subject
to dispute prior to such termination (provided that any such disputed amounts
will be paid by the Owner when and if such dispute is in fact resolved).
Notwithstanding anything herein to the contrary, the Owner may withhold
payments, if any, to the Vendor for the purposes of offset of amounts owed to
the Owner pursuant to the terms of this Contract until such time as the exact
amount of damages due the Owner from the Vendor is fully determined.
24.6 Costs. In the event of a termination due to a Vendor Event of
Default, the Owner will be entitled to the costs in connection with finishing
the Work (exclusive of any Liquidated Damages already paid and/or owing to the
Owner upon termination of this Contract), and if such costs exceed the unpaid
balance of the Contract Price, the Vendor will be liable to pay such excess to
the Owner. The amount to be paid by the Vendor pursuant to this subsection 24.6
will survive termination of this Contract and will be subject to the limitations
of liability in this Contract.
24.7 Continuing Obligations. Termination of this Contract for any
reason (i) will not relieve either Party of its obligations with respect to the
confidentiality of the Proprietary Information as set forth in subsection 27.19,
(ii) will not relieve either Party of any obligation which applies to it and
which expressly or by implication survives termination, and (iii) except as
otherwise provided in any provision of this Contract expressly limiting the
liability of either Party, will not relieve either Party of any obligations or
liabilities for loss or damage to the other Party arising out of or caused by
acts or omissions of such Party prior to the effectiveness of such termination
or arising out of its obligations as to portions of the Work already performed
or of obligations assumed by the Vendor prior to the date of such termination.
24.8 Vendor's Right to Terminate. The Vendor will have the option to
terminate this Contract without any penalty or payment obligations, other than
undisputed payment obligations outstanding as of the date of any such
termination pursuant to the terms of this Contract if:
(a) the Owner (i) files a voluntary petition in bankruptcy or has an
involuntary petition in bankruptcy filed against it that is not dismissed within
forty-five (45) days of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it, (iii) is adjudged
bankrupt, or (iv) makes a general assignment for the benefit of its creditors,
or if a receiver is appointed for all or a substantial portion of its assets and
is not discharged within sixty (60) days after his appointment, and any such
filing, proceeding, adjudication or assignment as described herein above will
otherwise materially impair the Owner's ability to perform its obligations under
this Contract;
(b) the Owner commences any proceeding for relief in any court under
any state insolvency statutes;
(c) the Owner fails to make payments of undisputed amounts due to the
Vendor pursuant to the terms of this Contract which are more than sixty (60)
days overdue, provided that such failure has continued for at least thirty (30)
days after the Vendor has notified the Owner of its right and intent to so
terminate on account of such overdue amount;
(d) the Owner persistently and materially breaches subsection 11.1 or
subsection 27.19 notwithstanding the fact that the Vendor will have provided the
Owner with prior written notice describing the alleged material breaches and
will have given the Owner a reasonable time (not less than thirty (30) days) to
cure any such breaches; or
(e) except as otherwise provided in subsection 24.1 the Owner fails to
fulfill its Initial Commitment within five (5) years of the Effective Date for
whatever reason other than (i) any act or omission of the Vendor, (ii) failure
or inability to successfully complete Microwave Relocation in any PCS System
and/or PCS Sub-System, (iii) failure or inability to successfully attain Site
Acquisition Substantial Completion in any given PCS System and/or PCS Sub-System
or (iv) any event otherwise constituting a Force Majeure hereunder.
24.9 Special Termination Events. (a) In the event that financing for
the Owner's build-out of the initial phase of the Nationwide Network has not
been finalized with the Vendor and the Other Vendors on terms and conditions
reasonably satisfactory to the Owner, on or before one hundred and eighty (180)
days after January 31, 1996, the Owner will have the right, but not the
obligation, to terminate this Contract in its entirety without charge or penalty
of any kind. In the event of a termination of this Contract pursuant to this
subsection 24.9(a) the Owner will remain liable for amounts due to the Vendor
for all Work performed or Products delivered by the Vendor or any of its
Subcontractors pursuant to the specific terms of this Contract which had been
directly delivered to or performed for the Owner and/or any of its facilities or
sites in accordance with the terms of this Contract including, but not limited
to, the Project Milestones. Any amounts owed by the Owner for Work done or
Products delivered by the Vendor during such interim one hundred and eighty
(180) day period (the "Financing Interim Period") not otherwise invoiced to the
Owner by the Vendor prior to the termination of such Financing Interim Period,
will be invoiced to the Owner by the Vendor within thirty (30) days (but failure
to so invoice will not excuse the Owner's obligation to otherwise pay the Vendor
pursuant to the terms of this subsection 24.9(a)) of such termination pursuant
to this subsection 24.9(a) and will be payable to the extent not otherwise in
dispute by the Owner within thirty (30) days of receipt of such invoice;
provided that in no event will the Owner be liable to the Vendor due to a
termination of this Contract pursuant to this subsection 24.9(a) for any of the
Vendor's direct or indirect costs or expenses incurred in connection with any
supplies or equipment ordered by the Vendor or agreements entered into by the
Vendor in order to enable it to fulfill its obligations hereunder or in
connection with the establishment of and/or upgrade to its manufacturing,
personnel, engineering, administrative or other capacities and/or resources in
contemplation of or pursuant to its performance in accordance with the terms of
this Contract and any amounts due to the Vendor pursuant to this subsection
24.9(a) will be limited in all cases to Work actually done or Products or
Services actually delivered to the Owner, its sites or its facilities.
(b) If at any time after the Effective Date any material change will
have occurred in any Applicable Law or in the interpretation thereof by any
Governmental Entity, or there will be rendered any decision in any judicial or
administrative case, in either case which, in the reasonable opinion of the
Owner, would make the Owner's use of any part of any PCS System illegal or would
subject the Owner or any of its Affiliates to any material penalty, other
material liability or onerous condition or to any burdensome regulation by any
Governmental Entity or otherwise render the use of such PCS System and/or PCS
Sub-System economically nonviable, then, with respect to such PCS System and/or
PCS Sub-System, or affected part thereof, or with respect to the entire System
if so affected, the Owner may terminate this Contract without charge or penalty
of any kind; provided that (i) the Owner gives the Vendor prior written notice
of any such change or decision; (ii) that the Owner uses its reasonable efforts
for a reasonable time to reverse or ameliorate such change or decision to the
extent possible or practical prior to declaring such termination and (iii) the
Owner, at the Vendor's request, gives the Vendor a legal opinion from a
reputable law firm with experience in the area confirming the Owner's reasonable
opinion as set forth above. In the event of a termination pursuant to this
subsection 24.9(b), payment obligations incurred by the Owner for Work actually
done or Products or Services actually delivered by the Vendor prior to such
termination pursuant to this Contract will be payable by the Owner to the Vendor
on the same terms and subject to the limitations set forth in subsection 24.9(a)
above.
SECTION 25 SUSPENSION
25.1 Owner's Right to Suspend Work. The Owner may, at any time and upon
reasonable notice to the Vendor, order the Vendor, in writing, to suspend all or
any part of the Work for such reasonable period of time as the Owner may
reasonably determine to be appropriate for its convenience. Any request by the
Vendor for a change in the Specifications caused by the Owner's suspension of
the Work pursuant to this subsection 25.1 will be subject to the review and
reasonable acceptance of the Owner. No modification to the Specifications will
be made to the extent that performance is, was or would have been suspended,
delayed or interrupted for any other cause due to the Vendor's fault or if the
suspension had no effect on agreed upon performance deadlines and/or Project
Milestones set forth in this Contract. In the event of any such suspension, the
Vendor will be compensated for any actual and reasonable loss, actual and
reasonable damages or actual and reasonable expenses arising directly from such
delay, including but not limited to payments contractually required under any
Subcontractor agreements and reimbursement of reasonable expenses associated
with the necessary re-deployment of the Vendor's resources; provided that the
Vendor will in such event use reasonable efforts to estimate and report to the
Owner any such costs or expenses prior to the commencement of any such Owner
suspension pursuant to this subsection 25.1.
SECTION 26 MOST FAVORED CUSTOMER
26.1 Most Favored Customer Status. (a) With respect to the deployment
of the Initial System (including any Expansions or additions to the Initial
System within the context of the Initial System pursuant to the terms of this
Contract), the Owner will be deemed one of the Vendor's most important and
favored Customers and will always receive priority in terms of availability and
quantity of Products, Engineering and Services no less favorable than any other
Customer of the Vendor and in any event always in accordance with the terms of
this Contract, including, but not limited to, Exhibit A2. At any time during the
Term, the Owner will receive PCS Products, Engineering and Services at prices
and on payment terms and all other contract terms, including financing terms, no
less favorable to the Owner (when viewed collectively) than those offered or
available to any other Customer (other than Initial Affiliates and/or Additional
Affiliates pursuant to the terms of this Contract) of the Vendor for use of such
Items within the United States who are involved in transactions and/or
arrangements of similar or lesser volumes (for the purposes hereof, the Owner's
volume will always be deemed to be at least the level of the Initial Commitment
plus any more PCS Products, Services and/or Engineering ordered at such time
during the Term of this Contract).
(b) On an annual basis throughout the Term of this Contract commencing
on the Effective Date the Vendor will be required to audit its offering of all
CDMA PCS Products, engineering and services provided to the then-existing ten
(10) largest of its Customers (other than Initial Affiliates and/or Additional
Affiliates pursuant to the terms of this Contract) (based on volume purchased or
to be purchased) in the preceding calendar year and certify to the Owner in a
certificate executed by a duly authorized officer of the Vendor (the "MFC
Certificate") that the Owner has in fact received the prices, payment and other
contract terms, availability and quantity of and on Products, Engineering and
Services in accordance with the terms of clause (a) above.
(c) To the extent the Owner determines pursuant to clause (b) above, or
otherwise, that the Vendor has not in fact complied with the terms of clause (a)
above the Owner will have thirty (30) Business Days from receipt of the MFC
Certificate to provide the Vendor with a written claim for Product and/or
Engineering and/or Service pricing rebates on future purchases under this
Contract based upon the Owner's reasonable calculation of the impact on the
Owner of the Vendor's failure to comply with clause (a) of this subsection 26.1.
The Owner's written claim will specify the reasoning underlying its claim. To
the extent the Vendor disagrees with any such claim for such pricing rebates
made by the Owner pursuant to this clause (c) the Vendor will have the right
within ten (10) Business Days of receiving the Owner's written rebate claim to
request management escalation of the matter as provided in subsection 23.1. In
the event that the Parties have not resolved the matter within ten (10) Business
Days after commencement of such escalation, either Party will have the right to
submit the Owner's claim and the Vendor's written response thereto to an
Independent Auditor who will have the authority only to determine whether the
Vendor is in non-compliance with the terms of clause (a) above and whether the
Owner's calculation of the claimed pricing rebate is fair and reasonable in
light of the Vendor's non-compliance with the terms of clause (a) above. Any
such independent determination will be made upon specific procedures and a set
of factors mutually agreed by the Parties. The Vendor will provide to the
Independent Auditor records and summaries of its agreements with such ten (10)
largest Customers pursuant to and in accordance with the terms of this
subsection 26.1. The Independent Auditor's determination must be made and
delivered to both the Vendor and the Owner within ten (10) Business Days of
receiving the request from the Vendor. The report of the Independent Auditor
will not be determinative of the Owner's right to pricing rebates under this
clause, and any dispute between the Vendor and the Owner as to such matter after
the Independent Auditor has rendered its opinion may be referred to arbitration
as provided in subsection 23.2; provided that the report of such Independent
Auditor will be admissible as evidence in any such arbitration. The Party
requesting a determination by an Independent Auditor will bear the cost of the
auditor, provided that, if the other Party's position is not supported by the
Independent Auditor, such other Party will bear any such cost.
SECTION 27 MISCELLANEOUS
27.1 Amendments. The terms and conditions of this Contract, including
the provisions of Exhibits and Schedules hereto, may only be amended by mutually
agreed contract amendments. Each amendment must be in writing and will identify
the provisions to be changed and the changes to be made. Contract amendments
must be signed by duly authorized representatives of each of the Vendor and the
Owner.
27.2 Owner Liabilities. The Parties understand and agree that none of
the Partners, nor any of their Affiliates, will guarantee or otherwise be in any
way liable with respect to any obligations or liabilities of the Owner or any of
its subsidiaries pursuant to this Contract. The Parties further understand and
agree that neither the Owner nor any of its subsidiaries will guarantee or
otherwise be in any way liable for any obligations or liabilities of any of the
Partners or any Affiliate of the Owner pursuant to this Contract unless, and
only to the extent, (i) the Owner or any one of its subsidiaries in accordance
with the Owner's direction expressly agrees in writing to guarantee or otherwise
be liable for such liability, or (ii) in the case of an Affiliate, such
Affiliate orders Products and/or Services through the Owner pursuant to the
terms of this Contact.
27.3 Offset. The Vendor hereby waives any right of offset of amounts
owed by the Owner to the Vendor pursuant to the terms of this Contract.
27.4 Assignment. Except as otherwise permitted herein, neither this
Contract nor any portion hereof may be assigned by either Party without the
express prior written consent of the other Party provided that such consent will
not otherwise be unreasonably withheld (provided further that the Owner's
reasonable concern about an assignee's ability to perform the obligations and/or
the Work of the Vendor pursuant to and in accordance with the terms of this
Contract will be deemed to be reasonable grounds for the Owner withholding any
such consent). The Owner may, without the consent of the Vendor, collaterally
assign its rights hereunder (including, but not limited to, all licenses with
respect to the Software) to any or all parties providing financing for any part
of the Nationwide Network under a collateral trust for the benefit of the Vendor
and one or more other entities providing financing for any part of the
Nationwide Network or similar arrangement for the benefit of the Vendor and one
or more other entities providing for the financing for any part of the
Nationwide Network, in either case, which collateral trust or similar
arrangement, as the case may be, is reasonably acceptable to the Vendor in
accordance with the terms of the financing documents. If requested by the Owner,
the Vendor will within seven (7) days of such request provide a written consent
to any such assignment; provided that such consent will permit reassignment if
the financing parties exercise their remedies under the documents for such
financing subject to reasonable standards as to (i) the creditworthiness of the
assignee and (ii) the fact that the assignee is not at such time a competitor of
the Vendor. The foregoing rights and obligations are in addition to those set
forth in subsection 27.21. Any attempted assignment in violation of the terms of
this Contract will be null and void.
27.5 Enforcement. The Parties agree that either Party may enforce the
provisions of subsections 11.4 and 27.4 regarding assignment by an action for
injunction or other equitable remedies.
27.6 Notices. Any notice, request, consent, waiver or other
communication required or permitted hereunder will be effective only if it is in
writing and personally delivered by hand or by overnight courier or sent by
certified or registered mail, postage prepaid, return receipt requested,
addressed as follows:
If to the Owner:
Sprint Spectrum Equipment Company, L.P.
c/o Sprint Spectrum L.P.
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director, Program Management
If to the Vendor:
Lucent Technologies Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to;
Lucent Technologies Inc.
Law Department
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Written notice given pursuant to this subsection 27.6 will be delivered in
accordance with this subsection 27.6 in writing and when so delivered will be
deemed to have been fully served and delivered. By written notice provided
pursuant to this subsection 27.6, either Party may change its designated
addressee for purposes of giving notices under this Contract.
27.7 GOVERNING LAW AND FORUMS. THIS CONTRACT IS GOVERNED BY THE LAWS
AND STATUTES OF THE STATE OF NEW YORK, EXCLUSIVE OF NEW YORK'S CONFLICT OF LAWS
RULES. THIS CONTRACT AND THE WORK WILL BE DEEMED TO BE MADE, EXECUTED AND
PERFORMED IN THE STATE OF NEW YORK. IF ONE PARTY COMMENCES A LAWSUIT IN RELATION
TO THIS CONTRACT AGAINST THE OTHER PARTY, SUCH LAWSUIT CAN ONLY BE BROUGHT IN
THE STATE OF MISSOURI OR DELAWARE. THE PARTIES HEREBY WAIVE A TRIAL BY JURY IN
ANY SUCH LAWSUIT. THE VENDOR AND THE OWNER EACH HEREBY IRREVOCABLY (A) AGREES
THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS CONTRACT WILL BE BROUGHT IN THE FEDERAL DISTRICT COURT FOR THE WESTERN
DISTRICT OF MISSOURI, OR IN THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF
DELAWARE, WHICH COURTS WILL HAVE EXCLUSIVE JURISDICTION OVER ANY CONTROVERSY
ARISING OUT OF THIS CONTRACT, (B) CONSENTS TO THE JURISDICTION OF SUCH COURTS IN
ANY SUCH SUIT, ACTION OR PROCEEDING AND (C) WAIVES ANY OBJECTION WHICH IT MAY
HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN SUCH
COURTS AND CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING MAY BE
MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE OWNER OR THE VENDOR,
AS THE CASE MAY BE, AT THE ADDRESSES INDICATED IN SUBSECTION 27.6 HEREOF AND IN
THE MANNER SET FORTH IN SUCH SUBSECTION 27.6. NOTHING IN THIS SUBSECTION 27.7
WILL AFFECT THE RIGHT OF THE OWNER OR THE VENDOR TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
27.8 Compliance with Law. The Owner and the Vendor will (a) comply with
all Applicable Laws in the performance of this Contract, including, without
limitation, the laws and regulations of the United States Department of Commerce
and State Department and any other applicable agency or department of the United
States regarding the import, re-import, export or re-export of products or
technology; and (b) indemnify each other for any loss, liability or expense
incurred as the result of breach of this subsection 27.8.
27.9 Independent Contractor. All work performed by any Party under this
Contract will be performed as an independent contractor and not as an agent of
the other and no Persons furnished by the performing Party will be considered
the employees or agents of the other. The performing Party will be responsible
for its employees' compliance with all laws, rules, and regulations while
performing all work under this Contract.
27.10 Headings. The headings given to the Sections and subsections
herein are inserted only for convenience and are in no way to be construed as
part of this Contract or as a limitation of the scope of the particular Section
or subsection to which the title refers.
27.11 Severability. Whenever possible, each provision of this Contract
will be interpreted in such a manner as to be effective and valid under such
applicable law, but, if any provision of this Contract will be held to be
prohibited or invalid in any jurisdiction, the remaining provisions of this
Contract will remain in full force and effect and such prohibited or invalid
provision will remain in effect in any jurisdiction in which it is not
prohibited or invalid.
27.12 Waiver. Unless otherwise specifically provided by the terms of
this Contract, no delay or failure to exercise a right resulting from any breach
of this Contract will impair such right or will be construed to be a waiver
thereof, but such right may be exercised from time to time as may be deemed
expedient. If any representation, warranty or covenant contained in this
Contract is breached by either Party and thereafter waived by the other Party,
such waiver will be limited to the particular breach so waived and not be deemed
to waive any other breach under this Contract.
27.13 Public Statements and Advertising. (a) Neither Party nor its
Subcontractors will issue any public statement (or any private statement unless
required in the performance of the Work), except as stated below, relating to or
in any way disclosing any aspect of the Work, the System, any PCS System or any
PCS Sub-System including the scope, the specific terms of this Contract, extent
or value of the Work and/or the System or any PCS System or any PCS Sub-System.
Express written consent of the other Party is required prior to the invitation
of or permission to any reporter or journalist to enter upon the System or any
part thereof. The Vendor agrees not to use for publicity purposes any
photographs, drawings and/or materials describing the System, any PCS System or
any PCS Sub-System without obtaining the prior written consent of the Owner,
which consent will not be unreasonably withheld. This subsection 27.13(a) is not
intended to exclude the provision of necessary information to prospective
Subcontractors and the Vendor's or the Owner's personnel, agents or consultants.
All other such public disclosures by a Party require the written consent of the
other Party. The obligations of the Parties under this subsection 27.13(a) are
in addition to their respective obligations pursuant to subsection 27.19. This
subsection 27.13(a) will in no way limit either Party from responding to
customary press inquiries or otherwise making public or private statements not
otherwise disclosing Proprietary Information or the specific terms of this
Contract in the normal course of its business and/or in connection with the Work
hereunder.
(b) Subject to the last sentence of subsection 27.13(a), each Party
will submit to the other proposed copies of all advertising (other than public
statements or press releases) wherein the name, trademark or service ▇▇▇▇ of the
other Party or its Affiliates or affiliates is mentioned; and neither Party will
publish or use such advertising without the other Party's prior written
approval. Such approval will be granted as promptly as possible and will not be
unreasonably withheld. The Parties acknowledge that the obtaining of prior
written approval for each such use pursuant to this subsection 27.13(b) may be
an administrative burden. At the request of either Party, the Owner and the
Vendor will establish mutually acceptable guidelines that will constitute
pre-authorization for the uses specified therein. Such guidelines will be
subject to change from time to time at the reasonable request of either Party.
27.14 Records and Communications. To the extent not already
established, promptly after the Work begins, procedures for keeping and
distributing orderly and complete records of the Work and its progress will be
established. The procedures so established will be followed throughout the
course of the Work unless the Owner and the Vendor mutually agree in advance in
writing to revise the procedures. Furthermore, immediately after the Notice to
Proceed is issued, complete procedures for communications among the Owner and
the Vendor will be established. The procedures so established will be followed
throughout the course of the Work unless the Owner and the Vendor mutually agree
in advance and in writing to revise such procedure.
27.15 Ownership of Specifications. Neither the Vendor nor any
Subcontractor, nor any other Person performing or furnishing the Work, whether
or not under a direct or indirect contract with the Owner, will have or acquire
any title to or ownership rights in any of the Specifications, or in any other
part or portion of this Contract (or copies of any of the Specifications or this
Contract); and no such Person will reuse any of the Specifications on and/or
with respect to any other project without the prior written consent of the
Owner. The Specifications and this Contract (and any and all copies thereof),
are owned by and title resides in the Owner, unless otherwise agreed between the
Owner and any other Person. Notwithstanding anything contained herein to the
contrary, the Owner will not acquire any patent, copyright or trade secret
rights as a result of this Contract, except with respect to copyright and trade
secret rights pursuant to licenses and other approvals provided in connection
with the performance of the Work and except to the extent that a non-exclusive
license of any of the Vendor's copyright or trade secret rights is required to
perform the Work.
27.16 Financing Parties Requirements. The Vendor acknowledges that the
Owner represents that attainment of financing for construction of the Nationwide
Network may be subject to conditions that are customary and appropriate for the
providers of such financing. Therefore, the Vendor agrees to execute promptly
any reasonable amendment to or modification or assignment of this Contract
required by such providers (including, without limitation, any pertinent
industrial development authority or other similar governmental agency issuing
bonds for financing of the System) which do not materially modify the scope of
the Vendor's Work in order to obtain such financing. In the event that any such
amendment or modification materially increases the Vendor's risk or costs
hereunder, the Owner and the Vendor will negotiate in good faith to adjust the
Contract Price, and to equitably adjust such other provisions of this Contract,
if any, which may be affected thereby, to the extent necessary to reflect such
increased risk or costs. In no event will the Vendor be required to accept any
modification or amendment pursuant to this subsection 27.16 which places
material increased risk on the Vendor or otherwise materially modifies the scope
of the Vendor's Work, if, in the Vendor's reasonable opinion, such materially
increased risk or material modification in the Work is not otherwise adequately
addressed by the Owner or otherwise. The Vendor will be responsible for and pay
all costs as a result of the Vendor's unreasonable refusal to promptly comply
with the request for any such modification or amendment made by any provider of
financing described in this subsection 27.16.
27.17 Owner Review, Comment and Approval. To the extent that various
provisions of this Contract provide for the Owner's review, comment, inspection,
evaluation, recommendation or approval, the Owner may at its option do so in
conjunction and/or consultation with the Vendor. To the extent that this
Contract requires the Owner to submit, furnish, provide or deliver to the Vendor
any report, notice, Change Order, request or other items, the Owner may at its
option and upon written notice to the Vendor designate the Engineer to submit,
furnish, provide or deliver such items as the Owner's agent therefor. To the
extent that various provisions of this Contract provide that the Owner may
order, direct or make requests with respect to performance of the Work or is
provided access to the System sites or any other site, the Owner may at its
option and upon written notice to the Vendor authorize the Engineer to act as
the Owner's agent therefor. Upon receipt of such notice, the Vendor will be
entitled to rely upon such authorization until a superseding written notice from
the Owner is received by the Vendor.
27.18 Specifications. The Owner acknowledges that parts of the
Specifications are comprised of Specifications prepared by the Vendor and that
the Vendor contributed significantly to many other portions thereof. The Owner
also acknowledges that, during the normal design, evolution and development
process, portions of the Specifications may appear in design and procurement
documents prepared by the Vendor in its normal course of business; provided,
however, that the Owner will have no liability for any third party infringement
claims arising from such Specifications prepared by the Vendor and the Vendor
will hold the Owner harmless from any such third party claims as provided in
subsection 14.2.
27.19 Confidentiality. (a) All information, including without
limitation all oral and written information (including, but not limited to,
determinations or reports by arbitrators or the Third Party Engineer pursuant to
the terms of this Contract), disclosed to the other Party is deemed to be
confidential, restricted and proprietary to the disclosing Party (hereinafter
referred to as "Proprietary Information"). Each Party agrees to use the
Proprietary Information received from the other Party only for the purpose of
this Contract. Except as specified in this Contract, no other rights, and
particularly licenses, to trademarks, inventions, copyrights, patents, or any
other intellectual property rights are implied or granted under this Contract or
by the conveying of Proprietary Information between the Parties. Proprietary
Information supplied is not to be reproduced in any form except as required to
accomplish the intent of, and in accordance with the terms of, this Contract.
The receiving Party must provide the same care to avoid disclosure or
unauthorized use of Proprietary Information as it provides to protect its own
similar proprietary information but in no event will the receiving Party fail to
use reasonable care under the circumstances to avoid disclosure or unauthorized
use of Proprietary Information. All Proprietary Information must be retained by
the receiving Party in a secure place with access limited to only such of the
receiving Party's employees, subcontractors or agents who need to know such
information for purposes of this Contract and to such third parties as the
disclosing Party has consented to by prior written approval. All Proprietary
Information, unless otherwise specified in writing (i) remains the property of
the disclosing Party, (ii) must be used by the receiving Party only for the
purpose for which it was intended, and (iii) such Proprietary Information,
including all copies of such information, must be returned to the disclosing
Party or destroyed after the receiving Party's need for it has expired or upon
request of the disclosing Party, and, in any event, upon termination of this
Contract. At the request of the disclosing Party, the receiving Party will
furnish a certificate of an officer of the receiving Party certifying that
Proprietary Information not returned to disclosing Party has been destroyed. For
the purposes hereof, Proprietary Information does not include information which:
(i) is published or is otherwise in the
public domain through no fault of the receiving Party
at the time of any claimed disclosure or unauthorized
use by the receiving Party;
(ii) prior to disclosure pursuant to this
Contract is properly within the legitimate possession
of the receiving Party as evidenced by reasonable
documentation to the extent applicable;
(iii) subsequent to disclosure pursuant to
this Contract is lawfully received from a third party
having rights in the information without restriction
of the third party's right to disseminate the
information and without notice of any restriction
against its further disclosure;
(iv) is independently developed by the
receiving Party or is otherwise received through
parties who have not had, either directly or
indirectly, access to or knowledge of such
Proprietary Information;
(v) is transmitted to the receiving Party
after the disclosing Party has received written
notice from the receiving Party after termination or
expiration of this Contract that it does not desire
to receive further Proprietary Information;
(vi) is obligated to be produced under order
of a court of competent jurisdiction or other similar
requirement of a Governmental Entity, so long as the
Party required to disclose the information provides
the other Party with prior notice of such order or
requirement and its cooperation to the extent
reasonable in preserving its confidentiality; or
(vii) the disclosing Party agrees in writ-
ing is free of such restrictions.
(b) Because damages may be difficult to ascertain, the Parties agree,
without limiting any other rights and remedies specified herein, an injunction
may be sought against the Party who has breached or threatened to breach this
subsection 27.19. Each Party represents and warrants that it has the right to
disclose all Proprietary Information which it has disclosed to the other Party
pursuant to this Contract, and each Party agrees to indemnify and hold harmless
the other from all claims by a third party related to the wrongful disclosure of
such third party's proprietary information. Otherwise, neither Party makes any
representation or warranty, express or implied, with respect to any Proprietary
Information.
27.20 Entirety of Contract; No Oral Change. This Contract and the
Exhibits and Schedules referenced herein constitute the entire contract between
the Parties with respect to the subject matter hereof, and supersede all
proposals, oral or written, all previous negotiations, and all other
communications between the Parties with respect to the subject matter hereof. No
modifications, alterations or waivers of any provisions herein contained will be
binding on the Parties hereto unless evidenced in writing signed by duly
authorized representatives of both Parties as set forth in subsection 27.1. Any
representations by the Vendor in any RFP response and/or any documentation
otherwise provided to the Owner in connection with the Vendor's solicitation of
the business granted pursuant hereto prior to the execution hereof will also be
deemed to be incorporated into and otherwise made a part of this Contract;
provided that any such information will in no way be deemed to modify the
Specifications unless otherwise specifically mutually agreed by the Parties.
27.21 Successors and Assigns. This Contract will bind and inure to the
benefit of the Parties to this Contract, their successors and permitted assigns.
27.22 Change of Control of the Vendor. The Vendor will not consolidate
with or merge into any other Person or convey, transfer or lease all or
substantially all of its assets to any Person, nor will any Person or group (as
such term is defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) own or acquire fifty percent (50%) of the value of the Vendor's
equity where such Person or group did not own as of the Effective Date in excess
of ten percent (10%) of such equity (any such Person or group will be referred
to as the "Vendor's Succeeding Entity"), unless:
(i) the Vendor's Succeeding Entity will
agree to assume the obligations of the Vendor under
this Contract; and
(ii) the Owner will have approved the
transaction, based solely on (i) the creditworthiness
of the Vendor's Succeeding Entity, (ii) whether the
Vendor's Succeeding Entity is a competitor of the
Owner and (iii) whether in the Owner's reasonable
judgment the Vendor's Succeeding Entity will be able
to fulfill the obligations for present and future
orders under this Contract.
27.23 Change of Control of the Owner. Except as otherwise (i) provided
below, (ii) permitted under the documents relating to the financing of the
Nationwide Network or (iii) pursuant to internal reorganizations of the Owner,
the Owner will not consolidate with or merge into any other business entity or
convey, transfer or lease all or substantially all of its assets to any Person,
nor will any Person or group (as such term is defined in the Exchange Act) own
or acquire fifty percent (50%) of the value of the Owner's limited partnership
interests or general partnership interests where such Person or group did not
own as of the Effective Date in excess of ten percent (10%) of either of such
partnership interests (any such Person or group will be referred to as the
"Owner's Succeeding Entity"), unless:
(a) the Owner's Succeeding Entity will agree to assume the obligations
of the Owner under this Contract; and
(b) the Vendor will have approved the transaction, based solely on (i)
the creditworthiness of the Owner's Succeeding Entity and (ii) whether the
Owner's Succeeding Entity is a competitor of the Vendor.
Notwithstanding anything stated in this subsection 27.23 to the
contrary a "Permitted Transaction" or a series of Permitted Transactions by any
Partner or Partners (or any affiliate, parent or subsidiary thereof) will not be
subject to or in any way in violation of this subsection 27.23. For the purposes
hereof, a "Permitted Transaction" means with respect to any Partner (or
affiliate, parent or subsidiary thereof) a transaction or series of related
transactions in which (i) such Partner ceases to be a subsidiary of its parent
or such parent transfers its interests in such Partner to a Person that is not
an affiliate of such Partner and (ii) the new parent of such Partner (or such
Partner if it is its own parent) or the parent of the transferee of such
interests after giving effect to such transaction, or the last transaction in a
series of related transactions, owns, directly and indirectly through its
affiliates, all or a "Substantial Portion" of the cable television system assets
(in the case of a Partner in the cable business (a "Cable Partner")) or long
distance telecommunications business assets (in the case of Sprint) owned by the
parent of such Partners, directly and indirectly through its affiliates,
immediately prior to the commencement of such transaction or series of
transactions. As used herein, "Substantial Portion" means (x) in the case of a
Cable Partner, cable television systems serving seventy five percent (75%) or
more of the aggregate number of basic subscribers served by cable television
systems in the United States (including its territories and possessions other
than Puerto Rico) owned by the parent of such Cable Partner, directly and
indirectly through its affiliates, and (y) in the case of Sprint, long distance
telecommunications business assets serving seventy five percent (75%) or more of
the aggregate number of customers served by the long distance telecommunications
business in the United States (including its territories and possessions other
than Puerto Rico) owned by Sprint and/or its parent, directly and indirectly
through its affiliates.
27.24 Relationship of the Parties. Pursuant to subsection 27.9, nothing
in this Contract will be deemed to constitute either Party a partner, agent or
legal representative of the other Party, or to create any fiduciary relationship
between the Parties. The Vendor is and will remain an independent contractor in
the performance of this Contract, maintaining complete control of its personnel,
workers, Subcontractors and operations required for performance of the Work.
This Contract will not be construed to create any relationship, contractual or
otherwise, between the Owner and any Subcontractor.
27.25 Discretion. Notwithstanding anything contained herein to the
contrary, to the extent that various provisions of this Contract call for an
exercise of discretion in making decisions or granting approvals or consents,
the Parties will be required to exercise such discretion, decision or approvals
in accordance with accepted PCS industry practices and in good faith.
27.26 Non-Recourse. No past, present or future limited or general
partner in or of the Owner, no parent or other affiliate of any company
comprising the Owner, and no officer, employee, servant, executive, director,
agent or authorized representative of any of them (each, an "Operative") will be
liable by virtue of the direct or indirect ownership interest of such Operative
in the Owner for payments due under this Contract or for the performance of any
obligation, or breach of any representation or warranty made by the Owner
hereunder. The sole recourse of the Vendor for satisfaction of the obligations
of the Owner under this Contract will be against the Owner and the Owner's
assets and not against any Operative or any assets or property of any such
Operative. In the event that a default occurs in connection with such
obligations, no action will be brought against any such Operative by virtue of
its direct or indirect ownership interest in the Owner. The foregoing provisions
of this subsection 27.26 will not in any way limit or restrict any right or
remedy of the Vendor with respect to, and the Operatives will remain fully
liable for, any fraud perpetuated by such Operatives.
27.27 Improvements, Inventions and Innovations. All rights in any
improvements, inventions, and innovations made by the Owner will vest in the
Owner, and the Owner and its affiliates will have the right to exploit such
improvements, inventions, and innovations. All rights in any improvements,
inventions and innovations made by the Vendor will vest in the Vendor, and the
Vendor and its affiliates will have the right to exploit such improvements,
inventions and innovations; provided, however, that subject to and in accordance
with subsection 11.9 the Owner and its affiliates may be granted certain rights
to improvements, inventions or innovations made in connection with the System
pursuant to subsection 11.9 by the Vendor (but not by any Subcontractor) in the
course and as a result of performing the Work and in which the Vendor owns or
possesses any proprietary interest (provided that the immediately preceding
proviso of this last sentence of this subsection 27.27 is not subject to
subsection 23.2).
27.28 Attachments and Incorporations. All Schedules and Exhibits
attached hereto, are hereby incorporated by reference herein and made a part of
this Contract with the same force and effect as though set forth in their
entirety herein.
27.29 Conflicts. In the event of any conflict or inconsistency among
the provisions of this Contract and the documents attached hereto and
incorporated herein, such conflict or inconsistency will be resolved by giving
precedence to this Contract and thereafter to the Exhibits, Schedules and
Specifications.
27.30 Counterparts. This Contract may be executed by one or more of the
Parties to this Contract on any number of separate counterparts, and all of said
counterparts taken together will be deemed to constitute one and the same
instrument.
* * *
THE OWNER AND THE VENDOR HAVE READ THIS CONTRACT INCLUDING ALL
SCHEDULES, EXHIBITS AND APPENDICES HERETO AND AGREE TO BE BOUND BY ALL THE TERMS
AND CONDITIONS HEREOF AND THEREOF.
IN WITNESS WHEREOF, the Parties have executed this Contract as
of the date first above written.
SPRINT SPECTRUM EQUIPMENT
COMPANY, L.P., as the Owner
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CEO
LUCENT TECHNOLOGIES INC., as the
Vendor
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Sprint Spectrum Account
Schedule 1
Preliminary RF Design
The preliminary RF Design will also be based on the following items as listed in
the Contract:
1) Design grid of all coverage areas
2) Signal level plot(s) including:
- Plot scales appropriate to review complete system and site-
to-site interaction.
- Latitude, longitude, radiation center, omni/sector and power
of each site as set forth in tabular form.
- Cell count by land classifications:
- Within the applicable arbitron area;
- For the entire System Area; and
- For launch (if different from the Arbitron count).
- System performance criteria as specified in Exhibit F.
3) Prequalified site overlay.
4) Estimated number of voice channels (4.7% penetration, 260 min-
utes of use/month/per sub).
5) Average tower heights by land classification based on FAA in-
formation and preliminary site zoning information.
Schedule 2
Product Prices
[12 pages were omitted pursuant to the Registrant's request for
confidential treatment.]
Schedule 3
Services Prices
[1 page was omitted pursuant to the Registrant's request for confidential
treatment.]
Schedule 4
Allocated System Areas and Allocated System Sub-Areas
PCS SYSTEM AND PCS SUBSYSTEMS
REGION PCS SYSTEM AND PCS SUBSYSTEMS
East Albany
Boston/South
Buffalo
Hartford
New Hampshire/Maine
New York City (including Manhattan, Brooklyn, Queens,
Bronx, Staten Island)
New York - Metro Area
Pittsburgh
Providence
Rochester
Syracuse
Central Detroit
Toledo
Milwaukee
West Denver
Fresno
Phoenix - Metro
Phoenix - Tucson
Portland
Salt Lake City
Sacramento
S.F. North/Oakland
S.F. South
Seattle
Spokane
[15 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
Schedule 5
Initial Affiliates
1. Each of the Partners and their operating subsidiaries.
2. APC and its operating subsidiaries.
3. PhillieCo and its operating subsidiaries.
4. Continental and its operating subsidiaries.
5. TCG and its operating subsidiaries.
6. NewTelCo. and its operating subsidiaries.
Schedule 6
Insurance
The Vendor will procure and maintain, during the Term of this Contract,
insurance with financially sound and reputable insurance companies in not less
than the following amounts:
(a) Workers' compensation insurance in accordance with the provisions
of the applicable Worker's Compensation or similar law of each state or other
political subdivision with jurisdiction applicable to the Vendor's personnel;
(b) Commercial general liability, including contractual liability
insurance with a coverage limit of not less than five million dollars
($5,000,000) combined single limit per occurrence of bodily injury or property
damage liability. To the extent reasonably requested by the Owner and not unduly
burdensome to the Vendor and to the extent otherwise applicable, such policy or
policies will name the Owner as an additional insured and will contain a
provision waiving the insurer's right of subrogation against the Owner and its
employees, agents, officers and directors; and
(c) If the use of any vehicle is required by the Vendor or any employee
of the Vendor in the performance of this Contract, the Vendor will also obtain
and maintain business vehicle liability insurance for the operation of all
owned, non-owned and hired vehicles with a coverage limit of not less than one
million dollars ($1,000,000) per accident for bodily injury and not less than
three hundred thousand dollars ($300,000) per accident for property damage
liability.
The Vendor reserves the right to self-retain any or all coverage
described above in this Schedule 6 and upon the Effective Date, does retain some
of such coverage. The Vendor upon the written request of the Owner will deliver
to the Owner certificates of commercial insurance satisfactory in form and
content to the Owner evidencing that all of the insurance required by this
Contract is in force, and that no policy may be canceled or materially altered
without first giving the Owner at least thirty (30) days' written notice.
Nothing herein is intended to imply that the Vendor's liability to the
Owner is limited to the amount of insurance carried.
Schedule 7
Products
See Schedules 2 and 3 for a list of the Vendor's Products.
Schedule 8
Vendor's Repair Facilities
Lucent Technologies
Repair Services & Returns Org.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇-▇▇▇-▇▇▇-▇▇▇▇
Schedule 9
[Form of Notice to Proceed]
NOTICE TO PROCEED
____________ ___, 199__
[Name of Contractor]
[Address]
Attention: [Contractor Representative]
Re: Sprint Spectrum L.P.
Lucent Technologies Inc.
Vendor Procurement Contract
Dear Sirs:
This Notice to Proceed is hereby delivered to you pursuant to the
Procurement and Services Contract for Sprint Spectrum L.P., dated as of
_________, 1996 (the "Contract"), between Sprint Spectrum Equipment Company,
L.P. (the "Owner") and Lucent Technologies Inc. (the "Vendor"). The Owner hereby
instructs the Vendor to commence performance of the Work under the Contract as
of the date hereof.
Sincerely,
SPRINT SPECTRUM EQUIPMENT COMPANY, L.P.
By:__________________________
Name:
Title:
Schedule 10
[Intentionally Omitted]
Schedule 11
Order Cancellation Charges
Without charge and/or penalty, the Owner may cancel any Order for Products no
later than ninety (90) days prior to the earliest date scheduled for shipment of
such Product; or
If the Owner cancels an Order less than ninety (90) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of ten percent (10%) of the price for such Product as
determined pursuant to the Contract; or
If the Owner cancels an Order less than sixty (60) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of fifteen percent (15%) of the price for such Product as
determined pursuant to the Contract; or
If the Owner cancels an Order less than thirty (30) days prior to the earliest
date scheduled for shipment of such Product, the Owner will pay to the Vendor a
cancellation charge of twenty percent (20%) of the price for such Product as
determined pursuant to the Contract.
The Owner may not cancel an Order after the applicable date scheduled for
shipment of such Product. The payment of such charges will be the Vendor's sole
remedy and the Owner's sole obligation for such canceled Order. Any changes
requested by the Owner that involve the return or exchange of Non-Essential
Equipment will be subject to the standard policies of the applicable
Non-Essential Equipment supplier unless such policies are otherwise set out in
the applicable agreement between such Non-Essential Equipment supplier and the
Vendor, in which case the Owner will be entitled to cancel any such Order for
Non-Essential Equipment in accordance with the terms of such agreement. For the
purposes of this Schedule 11, the term "Order" will not include the Minimum
Commitment or the Initial Commitment.
Nothing herein will be deemed to bar the Vendor's right to invoice the Owner for
all Services actually performed prior to the date of such performance by the
Vendor in respect of such Products in accordance with the provisions of this
Contract.
Schedules 12 A and 12B
Base Station Spares
[2 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
Schedule 13
Foreign Affiliates
Each entity referred to in subsection 2.2(c) is the Vendor's primary
subsidiary offering PCS Products and Services in the country or territory
involved on the Effective Date, or its successor. As of the Effective Date,
these entities are for Canada, AT&T Canada Inc., and for Mexico, AT&T de Mexico
SA de CV. This list includes any other foreign or other Vendor affiliate
otherwise designated.
Schedule 14
Third Party Engineers
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
LCC L.L.C.
Mobile System International, Inc.
Schedule 15
Independent Auditors
Ernst & Young LLP
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. LLP
Price Waterhouse LLP
Deloitte & Touche LLP
KPMG Peat Marwick LLP
This list will at all times throughout the Term of this Contract specifically
exclude the then current auditor of either the Vendor and the Owner.
Exhibit A1
Project Milestones
[1 page was omitted pursuant to the Registrant's request for confidential treat-
ment.]
Exhibit A2
2) PCS Product Availability 1996
1Q 2Q 3Q 4Q
BTS [
MSCs ]
1) BTS availability is based on current ordering expectations. Above quantities
require a 12 week order interval. Additional quantities up to [ ] could be
ordered with additional lead time.
2) MSCs are assumed available on regular order interval. Additional capacity
could be provided with longer intervals.
EXHIBIT B1 (A)
AT&T RF Design and Acceptance Process
[32 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
EXHIBIT C (A)
Owner Required Wireless Features and Functions
[11 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
EXHIBIT D
AT&T System Elements
[66 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
EXHIBIT E (A)
Construction Management Criteria
[12 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
EXHIBIT F (A)
RF Performance Criteria
[6 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
EXHIBIT G (A)
AT&T BTS/BSC - MSC Interoperability
[3 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
EXHIBIT H (A)
Handsets
[46 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
EXHIBIT I (A)
Technology Integration Laboratory Requirements
[1 page was omitted pursuant to the Registrant's request for confidential treat-
ment.]
APPENDIX A
AM/HLR Description and Specifications
[53 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX B
SCP/HLR Description and Specifications
[27 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX C
[Intentionally Omitted]
APPENDIX D1
Lucent/Nortel License Agreement - HLR
[8 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX D2
Lucent/Nortel License Agreement - OAM&P
[9 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX E
HLR Statement of Work
[37 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX F
SCP/HLR Prices
[5 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX G
AS/OAM&P Statement of Work
[79 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX H
[Intentionally Omitted]
APPENDIX I
AS/OAM&P Prices
[7 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX J
[Intentionally Omitted]
APPENDIX K
Application Software Products Acceptance Procedures and Criteria
APPLICATION SOFTWARE ACCEPTANCE:
To be delivered pursuant to mutual agreement of the Parties pursuant to
the terms of Amendment No. 2.
APPENDIX L
Application Software Products Maintenance and Support Services
[11 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX M
OTAF Statement of Work
[38 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX N
[Intentionally Omitted]
APPENDIX O
OTAF Prices
[1 page was omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX P
OTAF Acceptance Procedures and Criteria
To be mutually agreed by the Parties no later than October 23, 1996.
APPENDIX Q
[Intentionally Omitted]
APPENDIX R
[Intentionally Omitted]
APPENDIX S
Actiview Acceptance Procedures and Criteria
For each applicable Actiview Software release, the Acceptance Procedures for
such release are to be mutually agreed between the Parties no later than one (1)
week prior to the delivery by the Vendor of any such release. Failure of the
Parties to so mutually agree at such time will in no way modify the Vendor's
obligation to timely deliver any such Actiview Software release pursuant to and
in accordance with the Actiview Statement of Work.
APPENDIX T
Actiview Prices
[5 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
APPENDIX U
Actiview Statement of Work
[24 pages were omitted pursuant to the Registrant's request for confidential
treatment.]
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS
1.1 Definitions................................................ 2
1.2 Other Definitional Provisions.............................. 32
SECTION 2 SCOPE OF WORK, RESPONSIBILITIES AND PROJECT
MILESTONES
2.1 Scope of Work.............................................. 32
2.2 Additional Coverage........................................ 33
2.2.1 AS Products and AS Services Additional Coverage............ 34
2.3 Handsets................................................... 34
2.4 Initial PCS System......................................... 35
2.5 System Element Verification; Test-bed Laboratory........... 35
2.6 RF Engineering; Site Acquisition and MSC Installation...... 36
2.7 Facilities Preparation Services and Installation........... 38
2.8 Site Acquisition Modifications............................. 39
2.9 Design/System Architecture and Engineering................. 39
2.10 Certification.............................................. 41
2.11 Notice of Developments..................................... 41
2.11.1 Vendor Developments........................................ 41
2.11.2 Participation in Testing................................... 41
2.12 Safety..................................................... 42
2.13 Emergencies................................................ 42
2.14 Right of Inspection........................................ 43
2.15 Transportation............................................. 43
2.16 Security................................................... 44
2.17 Materials and Equipment.................................... 44
2.18 Equipment and Data......................................... 44
2.19 References to Certain Sources.............................. 45
2.20 Operating Manuals.......................................... 45
2.20.1 AS Products and Services Operating Manuals................. 45
2.20.2 OTAF Products and Services Operating Manuals............... 45
2.20.3 Actiview Products and Services Operating Manuals........... 46
2.21 Maintenance and Instruction Manuals........................ 46
2.22 Standards for Manuals...................................... 46
2.23 Training................................................... 47
2.23.1 [INTENTIONALLY OMITTED].................................... 49
2.23.2 Actiview Training.......................................... 49
2.24 Manuals and Training....................................... 49
2.25 Spare Parts................................................ 50
2.26 System Support Services.................................... 50
2.26.1 Vendor Assistance.......................................... 50
2.26.2 Trouble Reports............................................ 51
2.26.3 Emergency Technical Assistance............................. 52
2.26.4 ETA and CSR................................................ 56
2.27 Supply of Additional Products.............................. 57
2.28 Review of Contract......................................... 57
2.29 Licenses, Permits and Approvals............................ 57
2.30 Eligibility under Applicable Laws and Applicable Permits... 57
2.31 Customs Approvals.......................................... 58
2.32 Owner Participation........................................ 58
2.33 New Development Advisory Board............................. 58
2.34 Market Development Manager................................. 58
2.35 Further Assurances......................................... 59
2.36 Liens and Other Encumbrances............................... 59
2.37 Forecasting and Ordering................................... 60
2.38 Microwave Relocation; Network Interconnection.............. 60
2.39 Vendor To Inform Itself Fully; Waiver of Defense........... 61
2.40 CMI/HIC.................................................... 61
2.41 Site Acquisition Delay Testing............................. 61
SECTION 3 AFFILIATES
3.1 Additional Affiliates...................................... 62
3.2 Agreements with Initial Affiliates......................... 63
3.3 Agreements with Additional Affiliates...................... 63
3.4 Affiliate Rights........................................... 63
SECTION 4 SUBCONTRACTORS
4.1 Subcontractors............................................. 64
4.2 The Vendor's Liability..................................... 64
4.3 No Effect of Inconsistent Terms in Subcontracts............ 64
4.4 Assignability of Subcontracts to Owner..................... 64
4.5 Removal of Subcontractor or Subcontractor's Personnel...... 64
4.6 Subcontractor Insurance.................................... 65
4.7 Review and Approval not Relief of Vendor Liability......... 65
4.8 Vendor Warranties.......................................... 65
4.9 Payment of Subcontractors.................................. 65
SECTION 5 TERM OF CONTRACT
5.1 Initial Term............................................... 66
5.2 Renewal.................................................... 66
SECTION 6 PRICES AND PAYMENT
6.1 Prices..................................................... 66
6.2 Price Reduction............................................ 67
6.2.1 TCU Payments............................................... 67
6.3 Payments................................................... 68
6.3.1 Additional Products not in Initial System or Otherwise
Provided for in Section 2.2.............................. 69
6.3.2 SCP/HLR Payments........................................... 70
6.3.3. AS Products Payments....................................... 70
6.3.4 OTAF Payments.............................................. 70
6.3.5 Actiview Payments.......................................... 71
6.4 Payments for Facilities Preparation Services............... 71
6.5 Monthly Forecasts.......................................... 72
6.6 No Payment in Event of Material Breach..................... 73
6.7 Microwave Relocation Delay Partial Payments................ 73
6.8 In Revenue Payments........................................ 73
SECTION 7 ORDERS AND SCHEDULING
7.1 Initial Commitment......................................... 74
7.2 Change Orders.............................................. 74
7.3 Cancellation............................................... 75
SECTION 8 INSTALLATION
8.1 Installation............................................... 75
8.2 No Interference............................................ 75
SECTION 9 ACCEPTANCE TESTING AND ACCEPTANCE
9.1 Acceptance Testing......................................... 76
9.2 Costs and Expenses......................................... 76
9.3 Notification............................................... 76
9.4 Presence at Acceptance Tests............................... 76
9.5 Correction of Defects...................................... 76
9.6 Acceptance Certificate..................................... 77
9.7 AS Acceptance Testing and Acceptance....................... 77
9.8 Actiview Acceptance Testing and Acceptance................. 78
SECTION 10 DISCONTINUED PRODUCTS
10.1 Notice of Discontinuation.................................. 79
10.2 Discontinuation During Warranty Period..................... 80
10.3 Discontinuation After Warranty Period...................... 80
SECTION 11 SOFTWARE; CONFIDENTIAL INFORMATION
11.1 RTU License................................................ 81
11.2 Owner's Obligations........................................ 81
11.3 Backwards Compatibility.................................... 82
11.4 Transfer and Relocation.................................... 82
11.5 Survival................................................... 83
11.6 Access to Source Codes..................................... 83
11.7 Escrow Agreement........................................... 83
11.8 Software Maintenance....................................... 84
11.9 Custom Development......................................... 84
11.9.1 Request for Custom Material................................ 84
11.9.2 Vendor Response............................................ 85
11.9.3 Ownership of Intellectual Property......................... 85
SECTION 12 SOFTWARE CHANGES
12.1 Annual Release Maintenance Fees............................ 85
12.2 Notice..................................................... 85
12.3 Installation, Testing and Maintenance...................... 85
12.4 Software Fixes............................................. 86
12.5 Right to Modify SCP/HLR Software........................... 86
12.6 Right to Modify AS Software and Actiview Software.......... 87
12.7 Right to Modify OTAF Software.............................. 87
SECTION 13 EQUIPMENT CHANGES
13.1 Equipment Upgrades......................................... 89
13.2 Notice..................................................... 90
13.3 Installation, Testing and Acceptance....................... 91
13.4 Equipment Fixes............................................ 91
SECTION 14 INTELLECTUAL PROPERTY
14.1 Intellectual Property...................................... 91
14.2 Infringement............................................... 91
14.3 Vendor's Obligation to Cure................................ 92
14.4 Vendor's Obligations....................................... 93
14.5 License to Use Vendor Patents.............................. 93
SECTION 15 DELAY
15.1 Liquidated Damages......................................... 94
15.2 Interim Delay.............................................. 94
15.3 Completion Delay........................................... 94
15.4 SCP/HLR Delay.............................................. 96
15.5 AM/HLR Interim Solution.................................... 96
15.6 AM/HLR Redeployment........................................ 96
15.7 SCP/HLR Delay Termination.................................. 96
15.8 AS Software Delay.......................................... 97
15.9 OTAF and/or Actiview Delay Termination..................... 97
15.10 OTAF and/or Actiview Delay................................. 98
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
16.1 Force Majeure.............................................. 99
SECTION 17 WARRANTIES
17.1 Product Warranty...........................................100
17.1.1 AS Products Warranty.......................................100
17.1.2 OTAF Products Warranty.....................................101
17.1.3 Actiview Products Warranty.................................101
17.2 Services Warranty..........................................102
17.3 System Warranty............................................102
17.4 Breach of Warranties.......................................103
17.5 Repair and Return..........................................105
17.6 Technical Assistance Center................................107
17.7 Scope of Warranties........................................108
17.8 Expenses...................................................108
17.9 Third Party Warranties.....................................109
17.10 Additional System Element Locations........................109
17.11 EXCLUSIVE REMEDIES.........................................109
SECTION 18 INSURANCE
18.1 Insurance..................................................109
SECTION 19 TAXES
19.1 Taxes......................................................109
SECTION 20 INDEMNIFICATION AND LIMITATION OF LIABILITY
20.1 Vendor Indemnity...........................................110
20.2 LIMITATION ON LIABILITY....................................111
20.3 Damages for Fraud or Willful Misconduct....................111
SECTION 21 REPRESENTATIONS AND WARRANTIES
21.1 Representations and Warranties of the Vendor...............111
21.1.1 Due Organization of the Vendor.............................111
21.1.2 Due Authorization of the Vendor; Binding Obligation........111
21.1.3 Non-Contravention..........................................112
21.1.4 Regulatory Approvals.......................................112
21.1.5 Non-Infringement...........................................112
21.1.6 Scope 112
21.1.7 Requisite Knowledge........................................112
21.1.8 Financial Capacity.........................................112
21.2 Representations and Warranties of the Owner................112
21.2.1 Due Organization of the Owner..............................112
21.2.2 Due Authorization of the Owner; Binding Obligation.........113
21.2.3 Non-Contravention..........................................113
SECTION 22 TITLE AND RISK OF LOSS
22.1 Title......................................................113
22.2 Risk of Loss...............................................113
22.3 AS Products Risk of Loss...................................114
22.4 OTAF and Actiview Products Risk of Loss....................114
SECTION 23 DISPUTE RESOLUTION
23.1 Dispute Resolution.........................................114
23.2 Arbitration................................................115
23.3 Third Party Engineer.......................................116
23.4 Other Remedies.............................................116
23.5 Tolling....................................................116
SECTION 24 TERMINATION AND EVENTS OF DEFAULT
24.1 Termination Without Cause .................................117
24.2 Termination for Cause......................................117
24.3 Remedies...................................................118
24.4 Discontinuance of Work.....................................119
24.5 Payments...................................................120
24.6 Costs......................................................120
24.7 Continuing Obligations.....................................120
24.8 Vendor's Right to Terminate................................120
24.9 Special Termination Events.................................121
SECTION 25 SUSPENSION
25.1 Owner's Right to Suspend Work..............................122
SECTION 26 MOST FAVORED CUSTOMER
26.1 Most Favored Customer Status...............................123
SECTION 27 MISCELLANEOUS
27.1 Amendments.................................................124
27.2 Owner Liabilities..........................................124
27.3 Offset.....................................................124
27.4 Assignment.................................................125
27.5 Enforcement................................................125
27.6 Notices....................................................125
27.7 GOVERNING LAW AND FORUMS...................................126
27.8 Compliance with Law........................................127
27.9 Independent Contractor.....................................127
27.10 Headings...................................................127
27.11 Severability...............................................127
27.12 Waiver.....................................................127
27.13 Public Statements and Advertising..........................127
27.14 Records and Communications.................................128
27.15 Ownership of Specifications................................128
27.16 Financing Parties Requirements.............................129
27.17 Owner Review, Comment and Approval.........................129
27.18 Specifications.............................................129
27.19 Confidentiality............................................130
27.20 Entirety of Contract; No Oral Change.......................131
27.21 Successors and Assigns.....................................132
27.22 Change of Control of the Vendor............................132
27.23 Change of Control of the Owner.............................132
27.24 Relationship of the Parties................................133
27.25 Discretion.................................................133
27.26 Non-Recourse...............................................133
27.27 Improvements, Inventions and Innovations...................134
27.28 Attachments and Incorporations.............................134
27.29 Conflicts..................................................134
27.30 Counterparts...............................................134
EXHIBITS
Exhibit A1 - Project Milestones
Exhibit A2 - PCS Product Availability
Exhibit B1 - RF Design and Acceptance Process
Exhibit B2 - Acceptance Process for Completion of System Element
Facilities
Exhibit B3 - Validation and Acceptance Testing
Exhibit C - Owner Required Wireless Features and Functions
Exhibit D - System Elements
Exhibit E - Construction Management Criteria
Exhibit F - RF Performance Criteria
Exhibit G - BTS/BSC - MSC Interoperability
Exhibit H - Handsets
Exhibit I - Technology Integration Laboratory Requirements
SCHEDULES
Schedule 1 - Preliminary RF Design
Schedule 2 - Product Prices
Schedule 3 - Services Prices
Schedule 4 - Allocated System Areas and System Sub-Areas
Schedule 5 - Initial Affiliates
Schedule 6 - Insurance Provisions
Schedule 7 - Products
Schedule 8 - Vendor's Repair Facilities
Schedule 9 - Form of Notice to Proceed
Schedule 10 - [Intentionally Omitted]
Schedule 11 - Order Cancellation Charges
Schedule 12A - Spare Parts Requirements
Schedule 12B - Spare Parts Prices
Schedule 13 - Foreign Subsidiaries and Affiliates
Schedule 14 - Third Party Engineers
Schedule 15 - Independent Auditors
APPENDICES
Appendix A - AM/HLR Description and Specifications
Appendix B - SCP/HLR Description and Specifications
Appendix C - [Intentionally Omitted]
Appendix D1 - Lucent/Nortel License Agreement - HLR
Appendix D2 - Lucent/Nortel License Agreement - OAM&P
Appendix E - HLR Statement of Work
Appendix F - SCP/HLR Prices
Appendix G - AS/OAM&P Statement of Work
Appendix H - [Intentionally Omitted]
Appendix I - AS/OAM&P Prices
Appendix J - [Intentionally Omitted]
Appendix K - Application Software Products Acceptance Procedures and
Criteria
Appendix L - Application Software Products Maintenance and Support
Services
Appendix M - OTAF Statement of Work
Appendix N - [Intentionally Omitted]
Appendix O - OTAF Prices
Appendix P - OTAF Acceptance Procedures and Criteria
Appendix Q - [Intentionally Omitted]
Appendix R - [Intentionally Omitted]
Appendix S - Actiview Acceptance Procedures and Criteria
Appendix T - Actiview Prices
Appendix U - Actiview Statement of Work