EXHIBIT 10.10
NETWORK PRODUCTS PURCHASE AGREEMENT
TABLE OF CONTENTS
I NETWORK PRODUCTS PURCHASE AGREEMENT ("NPPA")
II CARRIER NETWORKS PRODUCT ATTACHMENT
III S/DMS ACCESSNODE PRODUCT ATTACHMENT
IV S/DMS TRANSMISSION PRODUCT ATTACHMENT
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
PAGE 1 OF 18
NETWORK PRODUCTS PURCHASE AGREEMENT
Northern Telecom Inc., a Delaware corporation having offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Nortel") and 21st Century Telecom
Group, Inc., an Illinois corporation, having its principal offices and place of
business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
("Buyer"), acting on behalf of itself and its Affiliates (as defined in Exhibit
A hereto) agree as follows:
1. SCOPE AND TERM
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1.1 Certain terms used in this Agreement shall be defined as set forth in
Exhibit A.
1.2 The terms and conditions of this Agreement shall apply to the purchase by
Buyer and the sale by Nortel of Equipment and Services and the licensing of
Software furnished in connection with such Equipment. The terms and
conditions contained in a Product Attachment hereto shall modify or
supplement the other terms and conditions of this Agreement, only with
respect to the Product Line and Services described in the applicable
Product Attachment.
1.3 All Products and Services obtained by Buyer pursuant to this Agreement
shall be obtained by Buyer solely for initial use by Buyer in its internal
business to provide services available through its networks, and not as
stock in trade or inventory that is intended for resale by Buyer to any
third party as new and unused material. All such Products shall be
installed in the United States. Notwithstanding anything to the contrary
contained in the preceding sentence, nothing in this Section 1.3 shall
prevent Buyer from reselling used Products or, with the permission of
Nortel, making incidental sales of new Equipment purchased hereunder;
provided, however, that Buyer's principal intent for purchasing is not with
a view toward resale.
1.4 This Agreement, including any Product Attachments hereto, shall commence
on the date last signed by the parties and be in effect for a period of
thirty-six (36) months from such date ("Term"). This Agreement or any part
thereof may be terminated in accordance with the express provisions of this
Agreement concerning termination or by written agreement of the parties.
1.5 The termination of this Agreement or any part thereof shall not affect the
obligations of either party thereunder that have not been fully performed
with respect to any accepted Order, unless such Order is expressly
terminated in accordance with this Agreement or by written agreement of the
parties.
1.6 During the Term, as set forth in Section 1.4 herein, Buyer shall purchase
and take delivery of Products and other products manufactured by Nortel and
Services, exclusive of TNS Services, having a minimum cumulative total
value of /***/ ("Purchase
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/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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Commitment"). The Purchase Commitment shall be satisfied by the total
prices and fees paid by Buyer for such Products and Services. The parties
have agreed in the following Product Attachments for the sale of Products
and Services contained therein. Purchase of such Products and Services
shall be referred to herein as "Qualified Products and Services":
Product Attachment for S/DMS Carrier Networks Products
Product Attachment for S/DMS Transmission Products
Product Attachment for S/DMS AccessNode Products
Additional pricing and other terms and conditions for other Nortel
products and services will be mutually agreed upon by the parties and
added as separate Product Attachments.
1.7 In the event Buyer fails to meet the Purchase Commitment by the end of the
Term, Buyer shall pay to Nortel as liquidated damages, and not as a
penalty, /***/ of the difference between the sum of Buyer's cumulative
purchases of Products and Services during the Term and Buyer's Purchase
Commitment. Nortel shall invoice Buyer immediately upon expiration of the
Term for such liquidated damages and such invoice shall be due and payable
within thirty (30) days of the date of such invoice.
1.8 Conditions to Buyer's Obligation to Fulfill the Purchase Commitment.
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1.8.1 Buyer's Purchase Commitment under Section 1.6 is subject to the conditions
set forth below. Should any of these conditions be initially satisfied but
subsequently fail or subsequently occur, Buyer's commitment requirement
shall be adjusted in the manner set forth herein.
1.8.1.1 Buyer Relieved of Purchase Commitment Obligation.
In the event that any of the conditions precedent set forth in
this Section 1.8.1.1 are not met, Buyer shall be relieved in its
entirety of the obligation to satisfy the Purchase Commitment, at
no penalty to Buyer, except as provided under Section 3.2. The
conditions for which Buyer shall be relieved of its Purchase
Commitment obligation are as follows:
(a) Nortel is in material breach of the terms and conditions of
this Agreement; or
(b) The Board of Directors or executive management of the Buyer
changes the business direction of the Buyer such that Buyer is to
exit the industry, discontinue the line of business or make a
formal decision to not grow the line of business such that the
Products and Services to be purchased hereunder are no longer
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/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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needed and are inconsistent with a volume purchase commitment and
Buyer does not buy comparable products from another
telecommunication equipment provider; or
(c) A change in regulatory requirements occurs that makes it
unfeasible for the Buyer to honor its Purchase Commitment in its
entirety; or
(d) The economic well being of the Buyer declines to such a great
extent that honoring its Purchase Commitment is neither practical
nor prudent and Buyer does not buy comparable products from
another telecommunication equipment provider.
1.8.1.2 In the event that Nortel fails to comply with any of the
conditions precedent set forth in this Section 1.8.1.2, Buyer's
Purchase Commitment shall be equitably reduced to reflect the
impact on Buyer of such failure. The conditions precedent that
will result in Buyer's Purchase Commitment being equitably reduced
if not satisfied are as follows:
(a) During any calendar year in the Term, Nortel fails to offer
Products and Services that are reasonably competitive in features,
size, weight, quality, functionality, and price with equipment
available from other suppliers and where Nortel's failure to do so
places Buyer in a competitive disadvantage and has a material
adverse financial impact on Buyer.
(b) If Nortel shall be in default of its obligations to deliver
Products and Services ordered under this Agreement, Buyer's
Purchase Commitment shall be equitably reduced. Such reduction of
Buyer's Purchase Commitment pursuant to this Section 1.8.1.2 shall
be based on the magnitude and duration of such default by Nortel
and the effect upon Buyer's business resulting from Nortel's
inability to deliver Products and Services in a timely manner,
including cost to Buyer's operations and the impact on Buyer's
ability to attract and maintain customers.
2. ORDERING
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2.1 All purchases pursuant to this Agreement shall be made by means of Orders
issued from time to time by Buyer and accepted by Nortel in writing within
fifteen (15) days. Any Order not so accepted shall be deemed rejected and,
therefore, void. Nortel agrees that it shall use reasonable efforts to
accept all such Orders placed by Buyer with respect to Product quantities
and delivery dates requested. In the event Nortel cannot comply with
Buyer's requested delivery date, before rejecting any Order, Nortel shall
propose an alternative delivery date.
2.2 Affiliates of Buyer shall be allowed to place Orders under this Agreement
as long as such Affiliates agree, in writing, to be bound by the terms
herein, and provided that Nortel
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shall be entitled to reject such Order(s) in accordance with Section 2.1.
Nortel agrees that any Order for Qualified Products and Services and other
Nortel products placed by an Affiliate and for which payment is ultimately
received by Nortel shall count toward the Purchase Commitment.
2.3 All Orders shall reference this Agreement and the applicable Product
Attachment and shall be governed solely by the terms and conditions set
forth herein as modified or supplemented pursuant to Section 1.2 by the
terms and conditions of any applicable Product Attachments.
3. ANTICIPATED VOLUME LEVEL, TNS CREDITS AND RECONCILIATION
3.1 Nortel and Buyer acknowledge that the prices established in the applicable
Product Attachment(s) and pricing schedule(s) hereto are quoted and
predicated on Buyer purchasing during the Term of this Agreement no less
than /***/ of any other Nortel products and Services. In addition, Buyer
agrees to provide Nortel with an eighteen (18-month) rolling forecast of
such anticipated purchases.
3.2 In the event Buyer does not purchase or license Product(s) aggregating
/***/ by the expiration or earlier termination of the Term, in addition to
any amount payable under Section 1.7, Nortel shall calculate the difference
between the /***/ and the actual amount of Product(s) purchased or licensed
("Actual Purchases") and Nortel shall invoice Buyer for an amount equal to
/***/ of the Actual Purchases, for each /***/ or part thereof, that the
Actual Purchases fall short of the /***/, but, in no event shall such
percentage exceed /***/.
For example, if Buyer has Actual Purchases of /***/, the sum invoiced by
Nortel would be calculated as follows:
(a) The shortfall is /***/, therefore the multiplier is/***/, ( i.e.
/***/ for each /***/ of shortfall);
(b) The Actual Purchases against which the /***/ multiplier is applied
are /***/;
(c) The forfeited amount to be returned to Nortel would be,
therefore,/***/ , (i.e. /***/ x /***/).
3.3 In partial consideration of Buyer's Purchase Commitment and Nortel's
anticipation that Buyer may make Actual Purchases of /***/, for each /***/
of Product(s) and Services Buyer has purchased and taken delivery of from
Nortel during the Term, Nortel /***/ of the total value of the Qualified
Products and Services actually purchased by Buyer ("TNS Service Credit") up
to the /***/ that may be applied toward the purchase of TNS Services for
any Product line referenced in Section 1.6 herein, provided that prior to
receiving such TNS
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/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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Service Credit(s) Buyer shall have purchased Qualified Products and
Services from all three Product Attachments hereto ("TNS Service Credit
Criteria").
3.4 Nortel agrees that, commencing on the date last signed by the parties
("Execution Date") and until utilized in full, Buyer shall be entitled to
use and apply no more than a maximum credit equal to /***/, (i.e., a
maximum aggregate TNS Service Credit of /***/). In the event that Buyer
reaches such maximum credit level before the end of the Term, Buyer shall
not be entitled to any additional TNS Service Credits.
3.5. Commencing on the Execution Date and for each of the first two years of
the Term, Buyer shall be permitted to apply, in advance, an aggregate TNS
Service Credit equal to /***/ of Buyer's Purchase Commitment level, each
year, provided that Buyer shall apply no more than /***/ of the allotment
for such year during the first quarter. For example, Buyer will be entitled
to take total TNS Service Credits up to /***/ hereunder. Accordingly,
Buyer may apply advance credits of up to /***/ (i.e., /***/ x /***/ x
/***/) in each of the first two years of the Term, provided that no more
than /***/ (i.e., /***/ x /***/) may be used in the first quarter of any
given year of the Term.
3.6 TNS Service Credits may not be redeemed for cash or used for the purchase
of Products. All TNS Service Credits must be taken within twelve (12)
months of the end of the Term or shall be deemed forfeited. Buyer shall not
be entitled to any refund for any TNS Service Credit(s) not used. The use
of any TNS Service Credit shall not reduce the Purchase Commitment and
shall not entitle Buyer to be granted additional TNS Service Credits.
3.7 If, at the end of the Term, Buyer has not made sufficient purchases under
this Agreement to have earned any TNS Service Credits applied in advance,
Nortel shall invoice Buyer, and Buyer agrees to pay, for the actual costs
of such TNS Services applied, but unearned.
3.8 In the event that Buyer exceeds /***/ in purchases during the Term, for
the remainder of the Term, Buyer shall be entitled to a /***/ discount off
net price ("Product Discount") on any subsequent purchases of Hardware and
Software provided hereunder. Notwithstanding anything to the contrary in
the preceding sentence, Nortel agrees that in the event that Buyer's
purchases aggregate /***/ during the Term, Buyer will receive an additional
credit of /***/ to be applied against any purchases during the Term of
Products in excess of /***/; provided, however that such credit may only be
used for up to fifty percent (50%) of the price of Products on any Order.
Buyer agrees that it will not be entitled to receive a cash refund of any
unused credit.
3.9 Unless otherwise provided in one of the Product Attachments herein, during
the Term, provided Buyer has satisfied its obligations under Sections 1.6
and 1.7 with respect to the Purchase Commitment, then Nortel agrees, for
the benefit of Buyer only, /***/. In the
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/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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event that Nortel decides to discontinue the manufacture of any such
Equipment, then Nortel shall give Buyer written notice of such intent at
least twelve (12) months prior to the date of such discontinuance, during
which period Buyer may order as much of such Equipment as it needs at the
prices set forth in the referenced Product Attachments. In the event Nortel
replaces any of the Equipment with equipment that is equivalent with
respect to form, fit and function, then the price for such equipment shall
be the same as the price for the Equipment that said equipment replaced.
If, however, Nortel replaces any Equipment with equipment that is
materially different with respect to form, fit or function, then the price
for such equipment shall be no more than Nortel's then standard and current
list price for such equipment. Nothing herein shall be construed to require
Nortel to continue to manufacture any Equipment.
4. PRICES
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4.1 The prices, charges, and fees applicable to Orders shall be set forth in
the appropriate Product Attachments and may be revised in accordance with
the provisions stated therein. Buyer shall pay transportation charges,
including insurance, in accordance with the applicable Product Attachment.
Nortel agrees that all transportation and insurance costs will be charged
to Buyer on a pass through basis and Nortel shall not markup any such
charges prior to invoicing Buyer for same.
4.2 Until the total of all prices, charges and fees for Products and related
Services furnished hereunder shall have been paid to Nortel, Buyer shall
cooperate with Nortel in perfecting Nortel's purchase money security
interest in such Products and Buyer shall promptly execute all documents
and take all actions required by Nortel in connection therewith. Buyer
shall not sell, lease or otherwise transfer such Products or any portion
thereof or allow any liens or encumbrances to attach to such Products or
any portion thereof prior to payment in full to Nortel of the total of all
such prices, charges, and fees.
4.3 Nortel agrees that, if at any time during the Term it implements an across
the board (i.e., to all customers) price reduction to any of the Qualified
Products or Services hereunder, and such price reduction is effective at,
or prior to, shipment of Products to Buyer or performance of Services on
behalf of Buyer, then Buyer shall be charged such reduced prices.
5. TERMS OF PAYMENT
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5.1 The amounts payable for Products and Services may be invoiced by Nortel to
Buyer in accordance with the applicable Product Attachments. All amounts
payable and properly invoiced pursuant to this Agreement shall be paid by
Buyer to Nortel within thirty (30) days from the date of Nortel's invoice
in accordance with the payment instructions contained in such invoice.
Notwithstanding anything to the contrary contained in the preceding
sentence, Nortel agrees that in no event shall it invoice Buyer for
Products or
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AGREEMENT NO. TCC9701N
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Services prior to shipping such Products or performing such Services,
unless mutually agreed upon or as set forth in a Product Attachment hereto.
5.2 Overdue payments, excluding those that are the subject of a good faith
dispute, shall be subject to interest charges, calculated daily commencing
on the 31st day after the date of the invoice, at one and one half percent
(1-1/2%) per month or such lesser rate as may be the maximum permissible
rate under applicable law. Notwithstanding anything to the contrary
contained in the preceding sentence, no such interest charge shall accrue
on any balance or invoice that is disputed by Buyer in good faith.
5.3 Good faith disputes related to charges for Services shall not prevent Buyer
from remitting the full amount invoiced for Products within thirty (30)
days from the date of such invoice.
6. TAXES
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At Nortel's direction, Buyer shall promptly pay to Nortel or pay directly
to the applicable government or taxing authority, if requested by Nortel,
all taxes and charges, including, without limitation, penalties and
interest, that may be imposed by any federal, state, or local governmental
or taxing authority arising hereunder, such as, but not limited to all such
taxes and charges relating to the purchase, license, ownership, possession,
use, operation or relocation of any Equipment, Software, or Services
furnished by Nortel pursuant to this Agreement, excluding, however, all
taxes computed upon the net income of Nortel. Buyer's obligations pursuant
to this Section 6 shall survive any termination of this Agreement.
7. RISK OF LOSS, TITLE
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7.1 In the event that Nortel does not install the Products, risk of loss or
damage to Products shall pass to Buyer upon delivery to the delivery
location specified by Buyer in its Order, and Buyer shall keep such
Products fully insured for the total amount then due Nortel for such
Products. Buyer shall cause its insurers with respect to such Products to
name Nortel as loss payee as Nortel's interests may appear.
7.2 In the event that Nortel installs the Products, risk of loss or damage to
Products shall pass to Buyer upon delivery to the installation site
specified by Buyer in its Order. Nortel and Buyer agree, however, that each
party shall be liable for damages to Products that occur as a result of
negligence or willful misconduct of that party's officers, agents or
employees.
7.3 Good title to Equipment furnished hereunder, shall be free and clear of all
liens and encumbrances, shall vest in Buyer upon full payment by Buyer of
the total prices, charges and fees payable by Buyer for such Equipment and
any related Software or Services furnished by Nortel in connection with
such Equipment.
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7.4 Buyer is hereby granted a license to use Software subject to the terms set
forth in Exhibit B herein.
8. TESTING, TURNOVER AND ACCEPTANCE
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8.1 If Nortel installs any Products furnished hereunder, the rights and
obligations of the parties with respect to testing, turnover and acceptance
of such Products shall be as set forth in the applicable Product
Attachment.
8.2 If Nortel does not install Products furnished hereunder, Nortel shall prior
to delivery of the Products perform such factory tests as Nortel determines
to be appropriate in order to confirm that such Products shall be in
accordance with the applicable Specifications and any mutually agreed upon
test plan as set forth in the applicable Product Attachment(s). Buyer shall
have a period of ten (10) business days after delivery to inspect such
Products and shall notify Nortel immediately of any defects, deficiencies
or shortages. In the event Buyer does not notify Nortel of any such
defects, deficiencies or shortages, Buyer shall be deemed to have accepted
the Products on the eleventh (11th) business day after the delivery date.
8.3 In the event that Buyer places Products into "revenue-generating service",
such Products shall be deemed to have been accepted by Buyer without
limitation or restriction. In no event would the foregoing limit any rights
that Buyer may have under this Agreement as set forth in Exhibit D and the
Warranty Section of each applicable Product Attachment hereto.
8.4 Security Features. Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if Nortel delivers to Buyer a Software update,
Software enhancement or such other version release or upgrade of the
Software without informing Buyer that such Software update, Software
enhancement or such other version release or upgrade omits previously
included security features and that result in the unauthorized or improper
access and use of Buyer's system by third parties, then Nortel shall /***/
Buyer shall use commercially reasonable efforts to detect fraud or other
improper access or use of Buyer's system by third parties and shall
promptly notify Nortel of any incidence of same believed by Buyer to result
from such Software change.
Buyer is responsible for the accuracy and completeness of data transcript
information that it supplies to Nortel. Nortel is responsible for the
accuracy and completeness of data transcript information that it supplies
Buyer or enters into Buyer's system or systems.
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/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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In the event that Buyer believes that it has a claim against Nortel under
this Section 8.4, Buyer shall promptly notify Nortel of such claim and
shall cooperate with Nortel in conducting a joint investigation to identify
the source of the error or omission. Buyer acknowledges and agrees that any
claim to be made under this provision must be made within six (6) months of
receipt and Installation of such Software update, Software enhancement or
other Software release.
Buyer and Nortel agree that once Buyer makes a claim under this Section
8.4, Buyer shall, at its option: (i) require Nortel to /***/ (ii) continue
to operate its system with the new Software that permits such breach of
security of Buyer's system. In the event that Buyer elects to exercise its
option under (i) above, Nortel /***/. In the event that Buyer elects to
exercise its option under (ii) above, Buyer shall bear the risk of loss of
any breach of security of its system occurring subsequent to the date that
Buyer makes its claim under this Section 8.4.
9. DISCLAIMERS OF WARRANTIES AND REMEDIES
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THE WARRANTIES AND REMEDIES SET FORTH IN EXHIBIT D AND IN ANY PRODUCT
ATTACHMENT CONSTITUTE THE ONLY WARRANTIES OF NORTEL WITH RESPECT TO THE
PRODUCTS AND SERVICES AND BUYER'S EXCLUSIVE REMEDIES IN THE EVENT SUCH
WARRANTIES ARE BREACHED. THEY ARE IN LIEU OF ALL OTHER WARRANTIES, WRITTEN
OR ORAL, STATUTORY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NORTEL
SHALL NOT BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY
NATURE WHATSOEVER, BEFORE OR AFTER THE PLACING OF ANY PRODUCT INTO SERVICE.
10. LIABILITY FOR BODILY INJURY, PROPERTY DAMAGE AND PATENT INFRINGEMENT
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10.1 A party hereto shall defend the other party against any suit, claim, or
proceeding brought against the other party for direct damages due to bodily
injuries (including death) or damage to tangible property that allegedly
result from the gross negligence or willful misconduct of the defending
party in the performance of this Agreement. The defending party shall pay
all litigation costs, reasonable attorney's fees, settlement payments and
such direct damages awarded or resulting from any such suit, claim or
proceeding.
10.2 Nortel shall defend Buyer against any suit, claim or proceeding brought
against Buyer alleging that any Products, excluding Vendor Items, furnished
hereunder infringe any United States patent. Nortel shall pay all
litigation costs, reasonable attorney's fees,
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Securities and Exchange Commission.
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settlement payments and any damages awarded or resulting from any such
suit, claim or proceeding. With respect to Vendor Items, Nortel shall
assign any rights with respect to infringement of U.S. patents granted to
Nortel by the supplier of such Vendor Items to the extent of Nortel's right
to do so.
10.3 The party entitled to defense pursuant to Section 10.1 or 10.2 shall
promptly advise the party required to provide such defense of the
applicable suit, claim, or proceeding and shall cooperate with such party
in the defense or settlement thereof. The party required to provide such
defense shall have sole control of the defense of the applicable suit,
claim, or proceeding and of all negotiations for its settlement or
compromise. Notwithstanding anything to the contrary contained elsewhere in
this Section 10.3, the party required to provide such defense shall not
enter into any form of settlement agreement that materially deprives the
party entitled to defense of its indemnification rights under this Section
without first consulting with the party entitled to defense and reaching
mutual agreement on the terms and conditions of such settlement agreement
negatively affecting such indemnification rights.
10.4 Upon providing the Customer with notice of a potential or actual
infringement claim, Nortel may (or in the case of an injunction, shall), at
Nortel's option, either procure a right to use, replace or modify, or
require the return of the affected Product for a refund of its depreciation
cost.
10.5 The obligations of Nortel hereunder with respect to any suit, claim, or
proceeding described in Section 10.2 shall not apply with respect to
Products that are (a)manufactured or supplied by Nortel in accordance with
any design or any special instruction furnished by Buyer, (b)used by Buyer
in a manner or for a purpose not contemplated by this Agreement, (c)located
by Buyer outside the United States, or (d)used by Buyer in combination with
other products not provided by Nortel, including, without limitation, any
software developed solely by Buyer through the permitted use of Products
furnished hereunder, provided the infringement arises from such combination
or the use thereof. Buyer shall indemnify and hold Nortel harmless against
any loss, cost, expense, damage, settlement or other liability, including,
but not limited to, attorneys' fees, that may be incurred by Nortel with
respect to any suit, claim, or proceeding described in this Section 10.5.
10.6 The provisions of Sections 10.2 through 10.5 state the entire liability of
Nortel and its suppliers and the exclusive remedy of Buyer with respect to
any suits, claims, or proceedings of the nature described in Section 10.2.
Nortel's total cumulative liability, pursuant to Sections 10.2 shall for
each infringement claim /***/.
10.7 Each party's respective obligations pursuant to this Section shall survive
any termination of this Agreement.
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Securities and Exchange Commission.
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11. REMEDIES AND LIMITATION OF LIABILITY
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11.1 Nortel shall have the right to suspend its performance by written notice
to Buyer and forthwith remove and take possession of all Products that
shall have been delivered to Buyer, if, prior to payment to Nortel of any
amounts due pursuant to this Agreement with respect to such Products, Buyer
shall (a) become insolvent or bankrupt or cease, be unable, or admit in
writing its inability, to pay all debts as they mature, or make a general
assignment for the benefit of, or enter into any arrangement with,
creditors, (b) authorize, apply for, or consent to the appointment of, a
receiver, trustee, or liquidator of all or a substantial part of its assets
or have proceedings seeking such appointment commenced against it that are
not terminated within ninety (90) days of such commencement, or (c) file a
voluntary petition under any bankruptcy or insolvency law or under the
reorganization or arrangement provisions of the United States Bankruptcy
Code or any similar law of any jurisdiction or have proceedings under any
such law instituted against it that are not terminated within ninety (90)
days of such commencement.
11.2 In the event of any material breach of this Agreement that shall continue
for sixty (60) or more days after written notice of such breach (including
a reasonably detailed statement of the nature of such breach) shall have
been given to the breaching party by the aggrieved party, the aggrieved
party shall be entitled at its option to avail itself of any and all
remedies available at law or equity, except as otherwise provided in this
Agreement, or terminate the Agreement.
11.3 Nothing contained in Section 11.2 or elsewhere in this Agreement shall
make Nortel liable for any incidental, indirect, consequential or special
damages of any nature whatsoever for any breach of this Agreement whether
the claims for such damages arise in tort, contract, or otherwise, or shall
increase the liability of Nortel under Section 9 or 10 or Exhibit D beyond
that prescribed therein.
11.4 Nortel shall not be liable for any additional costs, expenses, losses or
damages resulting from errors, acts or omissions of Buyer, including, but
not limited to, inaccuracy, incompleteness or untimeliness in the provision
of information by Buyer to Nortel or fulfillment by Buyer of any of its
obligations under this Agreement. Buyer shall pay Nortel the amount of any
such costs, expenses, losses or damage incurred by Nortel.
11.6 The limitations on Nortel's liability and other obligations set forth in
Sections 9, 10, and 11 shall survive any termination of this Agreement.
12. FORCE MAJEURE
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12.1 If the performance by a party of any of its obligations under this
Agreement shall be interfered with by reason of any circumstances beyond
the reasonable control of that party, including without limitation,
unavailability of supplies or sources of energy, power failure, breakdown
of machinery, or labor difficulties, including without limitation,
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strikes, slowdowns, picketing or boycotts, then that party shall be excused
from such performance for a period equal to the delay resulting from the
applicable circumstances and such additional period as may be reasonably
necessary to allow that party to resume its performance. With respect to
labor difficulties as described above, a party shall not be obligated to
accede to any demands being made by employees or other personnel.
12.2 Notwithstanding anything to the contrary contained in this Section 12, if
a non-performing party's condition of force majeure shall remain in effect
for a period of ninety (90) days or longer, then the other party shall, at
its election, be entitled to terminate this Agreement.
13. CONFIDENTIAL INFORMATION
------------------------
13.1 Each party that receives the other party's Confidential Information shall
use reasonable care to hold such Confidential Information in confidence and
not disclose such Confidential Information to anyone other than to its
employees and employees of its Affiliates on a need to know basis. A party
that receives the other party's Confidential Information shall not
reproduce such Confidential Information, except to the extent reasonably
required for the performance of its obligations pursuant to this Agreement
and in connection with any permitted use of such Confidential Information.
13.2 Buyer shall take reasonable care to use Nortel's Confidential Information
only for study, operating, or maintenance purposes in connection with
Buyer's use of Products furnished by Nortel pursuant to this Agreement.
13.3 Nortel shall take reasonable care to use Buyer's Confidential Information
only to perform Nortel's obligations to provide Products and Services to
Buyer, provided Nortel may use any of Buyer's Confidential Information for
the development, manufacture, marketing and maintenance of new products and
services and changes or modifications to the existing Products and
Services, that Nortel may, in either case, provide to third parties without
restriction.
13.4 The obligations of either party pursuant to this Section 13 shall not
extend to any Confidential Information that: (i) recipient can demonstrate
through written documentation was already known to the recipient prior to
its disclosure to the recipient; (ii) was known or generally available to
the public at the time of disclosure to the recipient; (iii) becomes known
or generally available to the public (other than by act of the recipient)
subsequent to its disclosure to the recipient; (iv) is disclosed or made
available in writing to the recipient by a third party having a bona fide
right to do so, or, (v) is required to be disclosed by process of law,
provided that the recipient shall notify the disclosing party promptly upon
any request or demand for such disclosure.
13.5 The parties' obligations pursuant to this Section 13 shall survive the
termination of this Agreement.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
PAGE 13 OF 18
14. BUYER'S RESPONSIBILITIES
------------------------
14.1 All sites to which the Products shall be delivered or installed shall be
prepared by Buyer in accordance with Nortel's standards, including, without
limitation, environmental requirements.
14.2 Buyer shall provide Nortel-designated personnel access to the Products
during the times deemed necessary by Nortel to install, maintain and
service the Products in accordance with Nortel's obligations. Nortel
personnel shall comply with Buyer's reasonable site and security
regulations, provided Nortel receives written notice of any such
regulations reasonably in advance of the arrival of Nortel's personnel at
the site.
14.3 Buyer shall provide reasonable working space and facilities, including
heat, light, ventilation, telephones, electrical current, trash removal and
other necessary utilities for use by Nortel-designated maintenance
personnel, and adequate secure storage space, if required by Nortel, for
Products and materials. Buyer shall also provide adequate security for the
Products while on Buyer's site.
14.4 Buyer shall obtain all necessary governmental permits applicable to Buyer
in connection with the installation, operation, and maintenance of Products
furnished hereunder, excluding any applicable permits required in the
normal course of Nortel's doing business. If requested in writing by
Buyer, Nortel, for a nominal fee, will assist Buyer in identifying and
obtaining such necessary government permits that may be applicable to
Buyer.
14.5 Any information that Nortel reasonably requests from Buyer and that is
necessary for Nortel to properly install or maintain the Products shall be
provided by Buyer to Nortel in a timely fashion and in a form reasonably
specified by Nortel.
15. HAZARDOUS MATERIALS
-------------------
15.1 Prior to issuing any Order for Services to be performed at Buyer's
facilities, Buyer shall identify and notify Nortel in writing of the
existence of all Hazardous Materials of which Buyer is aware and that
Nortel may encounter during the performance of such Services, including,
without limitation, any Hazardous Materials contained within any equipment
to be removed by Nortel.
15.2 If Buyer breaches its obligations pursuant to Section 15.1, (a)Nortel may
discontinue the performance of the appropriate Services until all the
applicable Hazardous Materials have been removed or abated to Nortel's
satisfaction by Buyer at Buyer's sole expense, and (b)Buyer shall defend,
indemnify and hold Nortel harmless from any and all damages, claims,
losses, liabilities and expenses, including, without limitation, attorneys'
fees, that
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
PAGE 14 OF 18
arise out of Buyer's breach of such obligations. Buyer's obligations
pursuant to this Section 15.2 shall survive any termination of this
Agreement.
16. SUBCONTRACTING
--------------
Nortel may subcontract any of its obligations under this Agreement, but no
such subcontract shall relieve Nortel of primary responsibility for
performance of its obligations. Additionally, Nortel shall warrant to Buyer
the quality of any such subcontracted Services as set forth in Exhibit D
and the Warranty Section of each applicable Product Attachment hereto.
17. REGULATORY COMPLIANCE
---------------------
In the event of any change in the Specifications or Nortel's manufacturing
or delivery processes for any Products as a result of the imposition of
requirements by any government, Nortel may upon notice to Buyer, increase
its prices, charges and fees to cover the added costs and expenses directly
and indirectly incurred by Nortel as a result of such change.
18. GENERAL
-------
18.1 If any of the provisions of this Agreement shall be invalid or
unenforceable under applicable law and a party deems such provisions to be
material, that party may terminate this Agreement upon notice to the other
party. Otherwise, such invalidity or unenforceability shall not invalidate
or render this Agreement unenforceable, but this Agreement shall be
construed as if not containing the particular invalid or unenforceable
provision and the rights and obligations of the parties shall be construed
and enforced accordingly.
18.2 A party shall not release, without the prior written approval of the other
party, any advertising or other publicity relating to this Agreement
wherein such other party may reasonably be identified. In addition each
party shall take reasonable precautions to keep the existence and the
contents of this Agreement confidential so long as this Agreement remains
in effect and for a period of three (3) years thereafter, except as may be
reasonably required to enforce this Agreement or by law.
18.3 The construction, interpretation and performance of this Agreement shall be
governed by the laws of the State of Illinois.
18.4 Neither party may assign or transfer this Agreement or any of its rights or
obligations hereunder without the prior written consent of the other party,
such consent not to be unreasonably withheld, except Buyer's consent shall
not be required for any assignment or transfer by Nortel (a)to any
Affiliate of all or any part of this Agreement or of Nortel's
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
PAGE 15 OF 18
rights hereunder, or (b)to any third party of Nortel's right to receive any
monies that may become due to Nortel pursuant to this Agreement.
18.5 Notices and other communications shall be transmitted in writing by
certified United States Mail, postage prepaid, return receipt requested, by
guaranteed overnight delivery, or by facsimile addressed to the parties as
follows:
To Buyer: 21st Century Telecom Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇ ▇▇▇▇▇▇▇, Chief Technical Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: Piper & Marbury L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Director of Purchasing and Contracts
21st Century Telecom Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To Nortel: Northern Telecom Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice-President, Carrier Networks
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to Nortel: Northern Telecom Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
In addition, notices submitted by Buyer to Nortel specific to any Product
Attachment shall be delivered to the address stated in the applicable
Product Attachment along with a copy submitted to Nortel at the address
stated above.
Any notice or communication sent under this Agreement shall be deemed given
upon receipt, as evidenced by the United States Postal Service return
receipt Mail if given by certified United States Mail, on the following
business day if sent by guaranteed
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
PAGE 16 OF 18
overnight delivery, or on the transmission date if given by facsimile
during the receiving party's normal business hours.
The address information listed for a party in this Section or any Product
Attachment may be changed from time to time by that party by giving notice
to the other as provided above.
18.6 In the event of a conflict between the provisions of this Agreement that
are not contained in a Product Attachment and the provisions of a Product
Attachment, the provisions of the Product Attachment shall prevail with
respect to the Product Line and Services described in that Product
Attachment.
18.7 All headings used herein are for index and reference purposes only, and
shall not be given any substantive effect. This Agreement has been created
jointly by the parties, and no rule of construction requiring
interpretation against the drafter of this Agreement shall apply in its
interpretation.
18.8 Buyer shall not export any technical data received from Nortel pursuant to
this Agreement, or release any such technical data with the knowledge or
intent that such technical data will be exported or transmitted to any
country or to foreign nationals of any country, except in accordance with
applicable U.S. law concerning the exporting of such technical data. Buyer
shall obtain all authorizations from the U.S. government in accordance
with applicable law prior to exporting or transmitting any such technical
data as described above.
18.9 Any changes to this Agreement may only be effected if agreed upon in
writing by duly authorized representatives of the parties hereto. No
agency, partnership, joint venture, or other similar business relationship
shall be or is created by this Agreement.
18.10 This Agreement may be executed in two counterparts, each of which shall be
deemed an original and both of which, when taken together, shall
constitute one and the same instrument.
18.11 The Product Attachments, exhibits and schedules attached hereto, are
hereby incorporated by reference herein, and made a part of this Agreement
with the same force and effect as though set forth in their entirety
herein. Such documents together with this Agreement are herein referred to
as the "Agreement".
18.12 In the event of any conflict or inconsistency among the provisions of this
Agreement and the documents attached and incorporated herein, such
conflict shall be resolved by giving precedence to this Agreement.
Notwithstanding anything to the contrary contained in the preceding
sentence, any Product Attachment shall supersede with respect to that
particular Product.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
PAGE 17 OF 18
18.13 If Buyer notifies Nortel prior to the scheduled shipment date of Products
that Buyer does not wish to receive such Products on the date agreed by
the parties, or the installation site or other delivery location is not
prepared in sufficient time for Nortel to make delivery in accordance with
such date, or Buyer fails to take delivery of any portion of such
Products, Nortel may place the applicable Products in storage. In that
event Buyer shall be liable for all additional costs thereby incurred by
Nortel; provided, however, that Buyer shall only be liable for Nortel's
actual out-of-pocket expenses, with no additional ▇▇▇▇-up thereon.
Delivery by Nortel of any Products to a storage location as provided above
shall be deemed to constitute delivery of the Products to Buyer for
purposes of this Agreement, including, without limitation, provisions for
payment, invoicing, passage of risk of loss, and commencement of the
Warranty Period.
18.14 Nortel shall support Buyer with joint press announcements, as mutually
agreed upon, related to the execution of this Agreement. Further, Nortel
shall periodically support Buyer with application brief collaterals, as
mutually agreed upon, describing Buyer's key applications and uses of the
Products purchased hereunder. Any requests for use of the Nortel logo must
be submitted in advance and approved in writing by Nortel.
19. ENTIRE AGREEMENT
----------------
This Agreement, including all Product Attachments, Exhibits and Schedules
constitutes the entire agreement of the parties with respect to the
subject matter hereof, and save as expressly provided herein, may not be
altered or amended, except in writing, expressly intending such alteration
or amendment and signed by authorized representatives of each party
hereto.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
PAGE 18 OF 18
NORTHERN TELECOM INC. 21ST CENTURY TELECOM GROUP, INC.
By:____________________________ By:______________________________
(Signature) (Signature)
Name:__________________________ Name:____________________________
(Print) (Print)
Title:_________________________ Title:___________________________
Date:__________________________ Date:____________________________
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
EXHIBIT A
PAGE 1 OF 2
EXHIBIT A
DEFINITIONS
-----------
As used in the Agreement (as defined below), the following initially
capitalized terms shall have the following meanings:
"Affiliate" shall mean any entity, as mutually agreed upon and set forth in
Exhibit E herein, that is a parent corporation of Nortel or Buyer, or a
corporation that Nortel, Buyer or such parent, directly or indirectly, owns
or controls 50% of the shares or other securities in such corporation.
"Agreement" shall mean the Networks Products Purchase Agreement to which
this Exhibit, and all other Exhibits and Product Attachments, are attached.
"Confidential Information" shall mean all information, including, without
limitation, specifications, drawings, documentation, know-how, pricing
information, and business plans, of every kind or description that may be
disclosed by either party or an Affiliate to the other party in connection
with this Agreement, provided the disclosing party shall clearly ▇▇▇▇ any
such information that is disclosed in writing as the confidential property
of the disclosing party and the disclosing party shall identify the
confidential nature of any such information that it orally discloses at the
time of such disclosure and shall provide a written summary of the orally
disclosed information to the recipient within fifteen (15) days of such
disclosure.
"Equipment" shall mean the hardware listed or otherwise identified in, or
pursuant to, any Product Attachment.
"Exhibits" shall mean Exhibits A, B, C, D, and E attached hereto, and any
additional Exhibits that Nortel and Buyer subsequently agree in writing
shall be incorporated into, and made a part of the Agreement by reference.
"Hazardous Materials" shall mean any pollutants or dangerous, toxic or
hazardous substances (including, without limitation, asbestos) as defined
in, or pursuant to, the OSHA Hazard Communication Standard (29 CFR Part
1910, Subpart Z), the Resource Conservation and Recovery Act of 1976 (42
USC Section 6901, et seq.), the Toxic Substances Control Act (15 USC
Section 2601, et seq.), the Comprehensive Environmental Response
Compensation and Liability Act (42 USC Section 9601, et seq.), and any
other federal, state or local environmental law, ordinance, rule or
regulation.
"Order" shall mean a written purchase order issued by Buyer to Nortel. Each
Order shall specify on the face of the Order the types and quantities of
Products or Services to be furnished by Nortel pursuant to the Order, the
applicable prices, charges or fees with
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
EXHIBIT A
PAGE 2 OF 2
respect to such Products or Services, Buyer's facility to which the
Products are to be delivered, the delivery or completion schedule, and any
other information that may be required to be included in an Order in
accordance with the provisions of this Agreement.
"Product Attachments" shall mean any Product Attachments that the parties
agree in writing shall be incorporated into, and made a part of, this
Agreement.
"Product Attachment Term" shall mean the period set forth in Section 1.4
herein.
"Product Line" shall mean the Products described in and that may be
furnished pursuant to a specific Product Attachment.
"Products" shall mean any Equipment or Software that may be provided under
this Agreement.
"Services" shall mean all installation, engineering, training, and support
services, exclusive of TNS Services, listed or otherwise identified in, or
pursuant to, any Product Attachment that may be purchased from or provided
by Nortel and that are associated with the Product Line described in that
Product Attachment.
"Software" shall mean (a)programs in machine-readable code or firmware that
(i) are owned by, or licensed to, Nortel or any of its Affiliates, (ii)
reside in Equipment memories, tapes, disks or other media, and (iii)provide
basic logic operating instructions and user-related application
instructions, and (b)documentation associated with any such programs that
may be furnished by Nortel to Buyer from time to time.
"Specifications" shall mean, with respect to any Product Line, the
specifications identified in the applicable Product Attachment, provided
Nortel shall have the right at its sole discretion to modify or amend such
specifications at any time.
"Third Party Software Vendor" shall mean any supplier of programs contained
in the Software that is not an Affiliate.
"TNS Services" shall mean Total Network Solution Services as set forth in
Exhibit C herein.
"Vendor Items" shall mean, with respect to a Product Line, those portions
of the Product that are identified in the applicable Product Attachment as
Vendor Items.
"Warranty Period" shall mean, with respect to a Product Line, the Warranty
Period specified in the applicable Product Attachment.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
EXHIBIT B
PAGE 1 OF 2
EXHIBIT B
SOFTWARE LICENSE
----------------
1. Buyer acknowledges that the Software may contain programs that have been
supplied by, and are proprietary to, Third Party Software Vendors. In
addition to the terms and conditions herein, Buyer shall abide by any
additional terms and conditions provided by Nortel to Buyer with respect to
any Software provided by any Third Party Software Vendor.
2. Upon Buyer's payment to Nortel of the applicable fees with respect to any
Software furnished to Buyer pursuant to this Agreement, Buyer shall be
granted a personal, non-exclusive, paid-up license to use the version of
the Software furnished to Buyer only in conjunction with Buyer's use of the
Equipment with respect to which such Software was furnished for the life of
that Equipment as it may be repaired or modified. Buyer shall be granted no
title or ownership rights to the Software, which rights shall remain in
Nortel or its suppliers.
3. As a condition precedent to this license and to the supply of Software by
Nortel pursuant to the Agreement, Nortel requires Buyer to give proper
assurances to Nortel for the protection of the Software. Accordingly, all
Software supplied by Nortel under or in implementation of the Agreement
shall be treated by Buyer as the exclusive property, and as proprietary and
a TRADE SECRET, of Nortel or its suppliers, as appropriate, and Buyer
shall: a) hold the Software, including, without limitation, any methods or
concepts utilized therein in confidence for the benefit of Nortel or its
suppliers, as appropriate; b)not provide or make the Software available to
any person except to its employees on a 'need to know' basis; c)not
reproduce, copy, or modify the Software in whole or in part except as
authorized by Nortel; d)not attempt to decompile, reverse engineer,
disassemble, reverse translate, or in any other manner decode the Software;
e)issue adequate instructions to all persons, and take all actions
reasonably necessary to satisfy Buyer's obligations under this license; and
f)forthwith return to Nortel, or with Nortel's consent destroy, any
magnetic tape, disc, semiconductor device or other memory device or system
or documentation or other material, including, but not limited to all
printed material furnished by Nortel to Buyer that shall be replaced,
modified or updated.
4. The obligations of Buyer hereunder shall not extend to any information or
data relating to the Software that is now available to the general public
or becomes available by reason of acts or failures to act not attributable
to Buyer.
5. Buyer shall not assign this license or sublicense any rights herein granted
to any other party without Nortel's prior written consent.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
EXHIBIT B
PAGE 2 OF 2
6. Buyer shall indemnify and hold Nortel and its suppliers, as appropriate,
harmless from any loss or damage resulting from a breach of this Exhibit B.
The obligations of Buyer under this Exhibit B shall survive the termination
of the Agreement and shall continue if the Software is removed from
service.
7. Nortel warrants that it has the right to sublicense any applicable third
party software provided under this Agreement.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
EXHIBIT C
EXHIBIT C
TOTAL NETWORK SOLUTIONS SERVICES
--------------------------------
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
EXHIBIT D
PAGE 1 OF 3
EXHIBIT D
LIMITED WARRANTIES AND REMEDIES
-------------------------------
1. Nortel warrants that the Equipment supplied hereunder will under normal use
and service be free from defective material and faulty workmanship and will
conform to the applicable Specifications for the Warranty Period specified
in the Product Attachment with respect to such Equipment. The foregoing
warranty shall not apply to items normally consumed in operation, such as,
but not limited to, lamps and fuses or to Vendor Items. Any installation
Services performed by Nortel with respect to such Equipment shall be free
from defects in workmanship for the Warranty Period set forth in the
applicable Product Attachment.
2. Nortel's sole obligation and Buyer's exclusive remedy under the warranty
set forth in Section 1 above shall be limited to the replacement or repair,
at Nortel's option and expense, of the defective Equipment, or correction
of the defective installation Services. Replacement Equipment may be new
or reconditioned at Nortel's option.
3. Nortel warrants that any Software licensed by Nortel to Buyer under this
Agreement shall function during the Warranty Period of the Equipment with
respect to which such Software is furnished without any material, service-
affecting nonconformance to the applicable Specifications, provided that
Buyer shall have paid all undisputed Software support fees specified in the
applicable Product Attachment. If the Software fails to so function,
Buyer's sole remedy and Nortel's sole obligation under this warranty is for
Nortel to correct such failure through, at Nortel's option, the replacement
or modification of the Software or such other actions as Nortel reasonably
determines to be appropriate, and Nortel shall do so in a manner as
expeditiously as commercially reasonably practicable.
Nortel further warrants that both before and after January 1, 2000, any
Software licensed by Nortel to Buyer under this Agreement shall function
during the Term of the Agreement without any material, service-affecting
nonconformance to the applicable Specifications. If the Software fails to
so function, Buyer's sole remedy and Nortel's sole obligation under this
warranty is for Nortel to correct such failure through, at Nortel's option,
the replacement or modification of the Software or such other actions as
Nortel reasonably determines to be appropriate.
4. Unless otherwise stated in a Product Attachment, (a) Nortel's warranties in
Section 3 above shall only apply to the portion of the Software actually
developed by Nortel or its Affiliates, (b) all other Software shall be
provided by Nortel "AS IS", (c) Nortel shall assign to Buyer on a
nonexclusive basis any warranty on such other Software provided to Nortel
by the developer of such other Software to the extent of Nortel's legal
right to do so.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
EXHIBIT D
PAGE 2 OF 3
5. The obligations and remedies set forth in Sections 1, 2, and 3 above shall
be conditional upon: the Equipment not having been altered or repaired,
the Software not having been modified, and the Products not having been
installed outside the United States; any defect or nonconformance not being
the result of mishandling, abuse, misuse, improper storage, improper
performance of installation, other services, maintenance or operation by
other than Nortel (including use in conjunction with any product that is
incompatible with the applicable Equipment or Software or of inferior
performance), or any error, act, or omission of Buyer described in Section
11.4; the Product not having been damaged by fire, explosion, power
failure, power surge, or other power irregularity, lightning, failure to
comply with all applicable environmental requirements for the Products
specified by Nortel or any other applicable supplier, such as but not
limited to temperature or humidity ranges, or any act of God, nature or
public enemy; and written notice of the defect having been given to Nortel
within the applicable Warranty Period.
6. The performance by Nortel of any of its obligations described in Section 2
or 3 of this Exhibit D shall not extend the applicable Warranty Period
except to the extent specified in the applicable Product Attachment.
7. Upon expiration of the applicable Warranty Period for Equipment furnished
hereunder, repair and replacement Service for such Equipment shall be
available to Buyer from Nortel in accordance with Nortel's then-current
terms, conditions and prices. Such repair and replacement Service and
notice of any discontinuance of such repair and replacement Service shall
be available for a minimum period set forth in the Product Attachment
applicable to such Equipment. This provision shall survive the expiration
of this Agreement.
8. Unless Nortel elects to repair or replace defective Equipment at Buyer's
facility, all Equipment to be repaired or replaced, whether in or out of
warranty, shall be packed by Buyer in accordance with Nortel's instructions
stated in the applicable Product Attachment and shipped at Buyer's expense
and risk of loss to a location designated by Nortel. Replacement Equipment
shall be returned to Buyer at Nortel's expense and risk of loss. Buyer
shall ship the defective Equipment to Nortel within thirty (30) days of
receipt of the replacement Equipment. In the event Nortel fails to receive
such defective Equipment within such thirty-(30) day period, Nortel shall
invoice Buyer for the replacement Equipment at the then-current price in
effect therefor.
9. With respect to any Vendor Item furnished by Nortel to Buyer pursuant to
this Agreement, Nortel shall assign to Buyer on a nonexclusive basis any
warranty granted by the party that supplied such Vendor Item to Nortel to
the extent of Nortel's right to do so.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
EXHIBIT D
PAGE 3 OF 3
10. Neither Nortel nor Nortel's suppliers, as appropriate, shall have any
responsibility for warranties offered by Buyer to any of its customers.
Buyer shall indemnify Nortel and Nortel's suppliers, as appropriate, with
respect thereto.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
EXHIBIT E
PAGE 1 OF 1
EXHIBIT E
AFFILIATES
Northern Telecom Inc. 21st Century Telecom Group, Inc.
Northern Telecom Ltd.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 1 OF 11
PRODUCT ATTACHMENT
CARRIER NETWORKS PRODUCTS
Northern Telecom Inc. ("Nortel") and 21st Century Telecom Group, Inc. ("Buyer")
agree as follows:
1. INCORPORATION BY REFERENCE
--------------------------
This Product Attachment shall be incorporated into and made a part of
Network Products Purchase Agreement No. TCC9701N ("NPPA") between Nortel
and Buyer.
2. DEFINITIONS
-----------
For purposes of this Product Attachment:
"Acceptance Criteria" shall mean, with respect to any Products installed by
Nortel hereunder, the standards and specifications contained in the Nortel
Installation Manuals that are applicable to such Products.
"Equipment" shall mean the equipment listed in Schedule A.
"Extension" shall mean Equipment and Software that Nortel engineer, install
and that is added to an Initial System after the Turnover Date of the
Initial System.
"Initial System" shall mean the Equipment and Software that is included in
any configuration identified in Schedule A as an "Initial System."
"Installation Site" shall mean Buyer's facility identified in an Order to
which the applicable Products identified in such Order shall be delivered
or at which the applicable Services, if any, are to be performed,
respectively.
"Merchandise" shall mean any Equipment that is not part of a System and
with respect to which no engineering or installation Services shall be
provided by Nortel.
"Product Attachment Term" shall mean the period set forth in Section 1.4 of
the NPPA.
"Services" shall mean the services described in Schedule B.
"Software" shall mean the software listed in Schedule A.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 2 OF 11
"Specifications" shall mean with respect to any Products furnished
hereunder, the specifications published by Nortel which Nortel identifies
as its standard performance specifications for such Products as of the date
of Buyer's Order for such Products.
"System" shall mean any Initial System or Extension.
"Turnover Date" shall mean, with respect to any Products installed by
Nortel hereunder, the date on which Nortel provides the Turnover Notice to
Buyer pursuant to Section 8.a. of this Product Attachment.
"Warranty Period" shall mean, with respect to:
(a) Any Equipment included in any System, the period which shall commence
/***/. With respect to Software included in any System, the warranty
period shall be /***/.
(b) Merchandise, the period which shall commence /***/ with respect to
such Merchandise by Nortel to Buyer and /***/,
(c) Installation Services involving any System, the period that shall
commence upon the Turnover Date with respect to such System and shall
expire twelve (12) months thereafter,
(d) Equipment that is repaired or replaced pursuant to Nortel's
obligations under Exhibit D to the NPPA, the period commencing /***/
after (i) shipment of the replacement Equipment to Buyer or (ii)
completion of the repair at the Installation Site of the applicable
Equipment and that shall expire on /***/ or replaced, and
(e) Software that was corrected pursuant to Nortel's obligations under
Exhibit D to the NPPA, the period commencing /***/ of the corrected
Software by Nortel to Buyer and expiring on /***/.
3. SCOPE
-----
3.1 During the Term as defined in Section 2 herein, Buyer shall order and
license, as applicable, and take delivery of Equipment and Software
listed in Schedule A of this Product Attachment in partial
satisfaction of its obligations with respect to the Purchase
Commitment set forth in Section
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 3 OF 11
1.6 and the /***/ of anticipated purchases as set forth in Section 3
of the NPPA.
3.3 Pursuant to Sections 3.3, 3.4, 3.5, 3.6 and 3.7 of the NPPA, Buyer may
use the TNS Service Credits to apply toward the purchase of TNS
Services listed in Exhibit C of the NPPA. The TNS Services exclude
engineering and installation of Initial Systems and Extensions.
4. SCHEDULES
---------
The following Schedules, which are attached hereto, are an integral part of
the Product Attachment and are incorporated herein by reference:
Schedule A - Products, Prices, and Fees
Schedule B - Services and Charges
Schedule C - Delivery
Schedule D - Documentation
Schedule E - Local Number Portability Compliance
5. ORDERING
--------
With respect to Section 2, ORDERING of the NPPA the following additional
terms shall apply:
a. Buyer shall identify in each Order for Products whether the Products
constitute an Initial System, Extension, or Merchandise. All Orders for
Extensions, Merchandise, or any Services other than engineering and
installation Services provided by Nortel in connection with an Order for an
Initial System shall be subject to written agreement of Buyer and Nortel on
the applicable prices, charges and fees with respect thereto as required
pursuant to Section 6, PRICING, of this Product Attachment. Nortel must
receive Orders for any Initial System at least sixty (60) days prior to the
scheduled delivery date of the Initial System ordered.
b. Notwithstanding anything contained in Exhibit C to the NPPA to the
contrary, Buyer may by written notice to Nortel cancel without charge any
Order for Products or Services prior to the delivery date of the applicable
Products set forth in such Order or the agreed date for the commencement by
Nortel of the applicable Services ("Service Commencement Date"), except
that if Buyer cancels such Order within six (6) weeks or less of any such
date, a cancellation fee of /***/ of the aggregate price of all Products or
Services included in such cancelled Order shall be payable by Buyer. Nortel
may invoice such amount upon receipt of Buyer's notice of cancellation of
the Order.
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 4 OF 11
c. Notwithstanding anything contained in Exhibit C to the NPPA to the
contrary, Buyer may by written notice to Nortel not less than six (6) weeks
prior to the delivery date of any Products set forth in an Order or the
Service Commencement Date of the applicable Services, delay the delivery
date of such Products or the Service Commencement Date of such Services for
a period that shall not exceed ninety (90) days from the date such Products
were originally scheduled to be delivered or ninety (90) days from the
Service Commencement Date, subject to the availability from Nortel of the
applicable Products or Services after such period of delay.
d. Except as set forth in Sections 5.b. and 5.c. of this Product Attachment,
any change to an Order after Nortel's acceptance of such Order shall
require written agreement of Nortel and Buyer upon a written change to the
Order ("Change Order"), which shall reference the original Order and be
executed by the parties. No such changes shall be implemented until the
applicable Change Order has been executed by the parties.
e. With respect to each Order for Products that is accepted by Nortel, Buyer
may make a written request at least ninety (90) days prior to the scheduled
shipment date of such Products for a change ("Change") consisting of
certain addition(s) or deletion(s) to such Products. After receipt of such
request, Nortel shall submit a Job Change Order ("JCO") to Buyer for
Buyer's approval with respect to the requested Change, except that Nortel
shall be under no obligation to submit such JCO to Buyer if Nortel
determines that the Price applicable to such Order would be reduced by more
than ten percent (10%) as a result of the implementation of the Change.
Each JCO shall state whether the requested Change shall increase or
decrease the Price and/or time required by Nortel for any aspect of its
performance under the NPPA with respect to such Order. Buyer shall accept
or reject the JCO in writing within ten (10) days of receipt thereof.
Failure of the Buyer to accept or reject the JCO in writing as described
above shall be deemed a rejection of the JCO by Buyer. In the event an
accepted JCO involves the return to Nortel of any Equipment which shall
have been previously delivered to Buyer, Nortel may invoice and Buyer shall
pay the transportation costs and Nortel's then-current restocking charge
for the returned Equipment.
f. Any increase or decrease in the Price with respect to an Order hereunder
which is occasioned by an accepted JCO shall be added to or subtracted
from, as applicable, the amount of the last payment due pursuant to Section
6 with respect to such Order.
g. If Buyer rejects a proposed JCO, then the rights and obligations of the
parties with respect to the applicable Order shall not be subject to
Buyer's requested Changes, provided that Buyer shall promptly pay to Nortel
all of Nortel's additional costs and expenses incurred hereunder in
accordance with Buyer's requested Changes and Nortel's additional costs and
expenses subsequently incurred in order that Nortel may
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 5 OF 11
be able to perform Nortel's obligations without modification by the
requested Changes, and Nortel shall be entitled to an extension of the
dates for performance of its obligations with respect to the applicable
Order as a result of any delays in such performance which result from the
foregoing.
6. PRICING
-------
With respect to Section 4, PRICES of the NPPA, the following additional
terms shall apply:
a. The prices listed in Schedule A shall apply to any Order for an Initial
System listed in Schedule A which shall be received by Nortel prior to the
effective date of any change in such prices as permitted by this Section,
provided that delivery date for such Initial System as set forth in the
applicable Order shall be not more than /***/ after Nortel's acceptance of
such Orders.
b. The prices for Equipment and the fees for the right to use the Software
included in any Extension not listed in Schedule A, prices for any
Merchandise, and charges for any Services, other than engineering and
installation Services provided with any Initial System shall be as
subsequently agreed in writing by Nortel and Buyer.
c. All transportation charges associated with the shipment of the Products to
Buyer shall be payable by Buyer. Buyer shall promptly reimburse Nortel for
any such charges which may be incurred by Nortel.
7. TERMS OF PAYMENT
----------------
With respect to Section 5, TERMS OF PAYMENT of the NPPA, the following
additional terms shall apply:
a. With respect to each Initial System furnished hereunder by Nortel to Buyer
the price listed in Schedule A shall be invoiced by Nortel in accordance
with the following schedule:
(i) /***/ of such price may be invoiced upon Nortel's acceptance of the
Order for such Initial System,
(ii) /***/ of such price may be invoiced on the date of shipment by Nortel
to Buyer of the switch component of such Initial System,
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 6 OF 11
(iii) /***/ of such price may be invoiced on the Turnover Date of such
Initial System, and
(iv) /***/ of such price may be invoiced on the date of Acceptance of such
Initial System.
b. With respect to each Extension furnished hereunder by Nortel to Buyer, the
applicable price determined in accordance with Section 6.b. of this Product
Attachment shall be invoiced by Nortel in accordance with the following
schedule:
(i) /***/ of such price may be invoiced upon Nortel's acceptance of the
Order for such Extension,
(ii) /***/ of such price may be invoiced on the date of shipment by Nortel
to Buyer of the Equipment included in such Extension,
(iii) /***/ of such price may be invoiced on the Turnover Date with
respect to such Extension, and
(iv) /***/ of such price may be invoiced on the date of Acceptance of such
Extension.
c. Except as may be otherwise agreed in writing by the parties Nortel's prices
for Merchandise and charges for any Services determined in accordance with
Section 6.b. above may be respectively invoiced upon delivery of such
Merchandise and upon performance of such Services by Nortel.
8. TESTING, TURNOVER, AND ACCEPTANCE
---------------------------------
Pursuant to Section 8.1 of the NPPA, the rights and obligations of the
parties with respect to testing, turnover and acceptance of any Products
furnished hereunder and installed by Nortel shall be as follows:
a. Nortel shall provide Buyer with five (5) days written notice prior to
commencing final commissioning and testing of any Products installed by
Nortel. Buyer shall cause an authorized representative of Buyer to be
present at the applicable Installation Site to witness such final
commissioning and testing, provided that in the event such representative
fails to be present for any reason, Nortel shall not be required to delay
performance of such final commissioning and testing. In connection with the
final commissioning and testing of such Products, Nortel shall test the
Products for conformity with the applicable Acceptance Criteria. When such
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 7 OF 11
tests have been successfully completed, Nortel shall provide Buyer with
written notice ("Turnover Notice") that the applicable Products meet such
Acceptance Criteria and are ready for Buyer's testing for compliance with
such Acceptance Criteria. Buyer shall promptly complete and return to
Nortel Buyer's acknowledgment of receipt of such Turnover Notice.
b. Following the Turnover Date, Buyer may test the applicable Products for
compliance with the Acceptance Criteria using the tests and test procedures
contained in Nortel's Installation Manuals with respect to such Products.
Within fifteen (15) days following the Turnover Date of the applicable
Products, Buyer shall notify Nortel either that Buyer has accepted such
Products in writing using Nortel's standard Acceptance Notice form or that
Buyer has not accepted such Products in which case Buyer shall also provide
Nortel with a written notice ("Notice of Deficiency") which shall provide
in reasonable detail the manner in which Buyer asserts that the Products
failed to meet the Acceptance Criteria. With respect to any such details
with which Nortel agrees, Nortel shall promptly proceed to take appropriate
corrective action and following correction, Buyer may retest the Products
in accordance with this Section. Buyer shall accept the Products in writing
without delay when the tests pursuant to this Section indicate that the
Products comply with the Acceptance Criteria.
c. With respect to any points of disagreement between Nortel and Buyer
concerning any Notice of Deficiency that are not resolved by Nortel and
Buyer within ten (10) days after the effective date of the Notice of
Deficiency, Buyer, at its option, may waive any rights it may have on
account of any such points of disagreement, or require that the disputed
points be resolved by arbitration.
d. Buyer shall notify Nortel in writing of its election pursuant to Section
8.c. not later than ten (10) days after the effective date of the Notice of
Deficiency, if any, given to Nortel by Buyer. Upon expiration of such ten
(10) day period unless Buyer has notified Nortel to the contrary, Buyer
shall be deemed to have elected to waive its right with respect to any
points of disagreement then existing between it and Nortel with respect to
such Notice of Deficiency.
e. If Buyer makes timely election to require arbitration of such disputed
points, the arbitrator shall be chosen by mutual agreement. If the parties
cannot agree upon an arbitrator within three (3) days of Buyer's election
to arbitrate, each party shall within three (3) days thereafter select an
independent and an unaffiliated person to be an arbitrator. These two (2)
persons selected shall select a third person, independent and unaffiliated
with either party, as a third arbitrator. The arbitration shall be
conducted in accordance with the Rules of the American Arbitration
Association, provided, however that the Arbitrator(s) shall be empowered to
reduce the Prices of Products only to the extent that the Arbitrator(s)
find that the benefit of Buyer's
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 8 OF 11
bargain has been reduced. The Arbitrator(s) shall not have any authority to
grant partial or total rescission unless the Arbitrator(s) determine that
(i) Buyer has not substantially received the benefit of its bargain; and
(ii) money damages will not provide an adequate remedy. Judgment upon the
award rendered by the Arbitrator(s) may be entered in any Court of
competent jurisdiction.
f. For purposes of this Product Attachment, "Acceptance" of the applicable
Products shall occur upon the earliest of the following and Buyer shall
upon request sign Nortel's Acceptance Notice confirming such Acceptance
without any conditions, restrictions, or limitations of any nature
whatsoever:
(i) The date on which Buyer accepts such Products pursuant to Section
8.b. of this Product Attachment;
(ii) The failure of Buyer to provide Nortel with any notice required by
Section 8.b. of this Product Attachment, with respect to such
Products;
(iii) Use by Buyer of such Products or any portion thereof in revenue-
producing service at any time; or
(iv) Waiver by Buyer of its rights pursuant to Section 8.c. or 8.d.
g. Acceptance by Buyer of such Products pursuant to Section 8.f. of this
Product Attachment above shall not be withheld or postponed due to:
(i) Deficiencies of such Products resulting from causes not attributable
to Nortel, such as, but not limited to (A) inaccuracy of information
provided by Buyer, (B) inadequacy or deficiencies of any materials,
facilities or services provided directly or indirectly by Buyer and
tested in conjunction with the applicable Products, (C) other
conditions external to the Products which are beyond the limits
specified by Nortel in the Specifications for the Products and which
are used by Nortel in performance calculations with respect to the
Acceptance Criteria, or (D) spurious outputs from adjacent material;
or
(ii) Minor deficiencies or shortages with respect to such Products which
are attributable to Nortel, but of a nature that do not prevent full
and efficient operation of the Products.
h. With respect to any deficiencies of the type described in Section 8.g.(i),
Nortel shall at Buyer's request and expense assist Buyer in the elimination
or minimization of any such deficiencies. With respect to any deficiencies
or shortages as described in the Section 8.g.(ii), Nortel shall, at
Nortel's expense, take prompt and effective action to correct any such
deficiencies or shortages.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 9 OF 11
i. In the event Buyer's Acceptance of any Products is withheld or postponed
due to any deficiencies of the type described in Section 8.g.(i), Nortel
shall invoice and Buyer shall pay Nortel's charges and reasonable expenses
incurred by Nortel associated with Nortel's investigation of the reasons
for Buyer's withholding or postponement of such Acceptance.
9. WARRANTIES AND REMEDIES
-----------------------
With respect to Exhibit D to the NPPA, LIMITED WARRANTIES AND REMEDIES, the
following additional terms shall apply:
a. Except as set forth in Section 9.b. below, Nortel shall in performance of
its obligations under Section 2 of Exhibit D to the NPPA, (i) ship
replacement Equipment or complete the repair within thirty (30) days of
Nortel's receipt of the Equipment to be replaced or repaired, and (ii)
commence the correction of the applicable installation Services within
thirty (30) days of receipt of notice from Buyer pursuant to Section 5 of
Exhibit D to the NPPA.
b. For emergency warranty service situations involving the Equipment, Nortel
shall during the applicable Warranty Period use all reasonable efforts to
ship replacement Equipment within twenty-four (24) hours of notification of
the applicable warranty defect by Buyer pursuant to Section 5 of Exhibit D
to the NPPA, provided that Buyer shall have requested such emergency
service. Nortel may invoice Buyer and Buyer shall pay Nortel's surcharge
for emergency warranty services. If Nortel determines that due to the
particular circumstances, onsite technical assistance is necessary, Nortel
shall use all reasonable efforts to dispatch emergency service personnel to
the applicable Installation Site within twenty-four (24) hours of receipt
of notice from Buyer as described above.
c. All Products to be repaired or replaced, both within and outside of the
applicable Warranty Period, shall be packed by Buyer in accordance with
Nortel's then-current instructions.
d. No later than ninety (90) days prior to the expiration of the Warranty
Period with respect to any Initial System, Nortel shall offer to Buyer
post-warranty support by means of an extended service plan or other terms,
provided that neither party shall have any obligation with respect thereto
except as may be agreed upon in writing by the parties.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 10 OF 11
10. NOTICES
-------
Pursuant to Section 18.5 of the NPPA, any notices by Buyer to Nortel which
are specific to this Product Attachment shall be delivered to the following
address:
Northern Telecom Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Senior Manager, Contracts Management & Negotiations
11. ADDITIONAL TERMS
----------------
The following additional terms shall apply to the NPPA:
(a) With respect to Section 14, BUYER'S RESPONSIBILITIES, the following
additional terms shall apply:
(i) Buyer shall be responsible for ordering and coordinating with each
applicable local telephone company the installation of all central
office trunks and test trunks and Buyer shall be responsible for all
utility charges associated with the installation, testing, operation
and maintenance of Products furnished hereunder, including, but not
limited to, all applicable charges for such central office trunks,
test trunks and any tie lines.
(b) Nortel shall provide documentation with respect to the Products in
accordance with Schedule D to this Product Attachment.
(c) If Nortel has made /***/ Software Release generally available to its other
customers prior to shipment of the DMS-500 Initial System ordered
hereunder, Nortel will furnish the DMS-500 Initial System with such /***/
Software Release. In the event /***/ Software Release is not generally
available at the time of Turnover of the DMS-500 Initial System, Nortel
will furnish the DMS-500 Initial System with /***/ Software Release.
However, Nortel will /***/. Such /***/ Software Release Level may require
the purchase of additional Equipment, which purchase shall remain Buyer's
responsibility.
(d) The matrix shown in Schedule E sets forth Nortel's DMS-500 Local Number
Portability compliance to Illinois Communication Committee ("ICC") Generic
Switching and Signaling Requirements for the NCS07 and NCS08 Software
Releases.
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
CARRIER NETWORKS PRODUCT ATTACHMENT
PAGE 11 OF 11
(e) During the Product Attachment Term, Nortel shall make available to Buyer
for a license fee not to exceed /***/ per Software release for each DMS-500
Initial System ordered hereunder, a standard feature DMS-500 Initial System
Software Upgrade ("DMS-500 Standard Feature Upgrade") which Nortel may
make generally available to its other customers. The /***/ license fee
does not include associated engineering and labor, Equipment or optional
Software packages.
NORTHERN TELECOM INC. 21ST CENTURY TELECOM GROUP, INC.
By:_______________________________ By:__________________________________
(Signature) (Signature)
Name:_____________________________ Name:________________________________
(Print) (Print)
Title:____________________________ Title:_______________________________
Date:_____________________________ Date:________________________________
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
SCHEDULE A
PAGE 1 OF 1
SCHEDULE A
----------
PRODUCTS, PRICES AND FEES
-------------------------
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
SCHEDULE B
PAGE 1 OF 2
SCHEDULE B
----------
SERVICES AND CHARGES
--------------------
ENGINEERING
-----------
1. Nortel shall engineer each System furnished hereunder in accordance with
Nortel's engineering practices applicable to such Initial System at the
time such engineering is performed.
2. Nortel's charges for engineering each Initial System are included in the
prices and fees for the Initial System set forth in Schedule A.
3. The provision of any other engineering by Nortel and the charges associated
therewith shall be as subsequently agreed in writing by Nortel and Buyer.
INSTALLATION
------------
1. Nortel shall install each Initial System furnished hereunder at the
applicable Installation Site in accordance with Nortel's installation
practices applicable to such Initial System at the time such installation
is performed.
2. Nortel's charges for performance of such installation are included in the
prices and fees for the Initial System set forth in Schedule A.
3. The provision of any other installation by Nortel and the charges
associated therewith shall be as subsequently agreed in writing by Nortel
and Buyer.
TRAINING
--------
1. With each Initial System furnished hereunder, Nortel shall provide to Buyer
/***/ of training at Nortel's Training Center currently located in Raleigh,
North Carolina. Such training shall be in any of the courses scheduled to
be provided at that Training Center as set forth in Nortel's applicable
Technical Training Course catalog with respect to the Products described in
Schedule A to this Product Attachment.
2. Buyer shall be responsible for the payment of all travel and living
expenses of its employees whom Buyer sends to receive such training.
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
SCHEDULE B
PAGE 2 OF 2
3. Additional Training in such courses shall be provided by Nortel to Buyer
subject to availability and scheduling of such courses. Nortel may change
the schedule of such courses at any time. Such additional training shall be
provided at Nortel's then-current charges.
4. All training provided by Nortel shall consist of such materials and cover
such subject as Nortel in its sole discretion determines to be appropriate.
Nortel makes no representation concerning the ability of anyone to
satisfactorily complete any training.
5. Nortel may add to, or delete from, the subject matter and or medium of any
of the training courses which Nortel provides. In addition, Nortel may
reschedule such courses as Nortel determines to be appropriate.
6. The availability of any training to Buyer as set forth above shall be
subject to any prerequisites identified by Nortel in its training catalog
or other documentation with respect to such training.
ADDITIONAL SERVICES
-------------------
1. All other services to be furnished hereunder shall be subject to written
agreement of the parties which shall set forth the terms and conditions
applicable to the provision of such services and a description of such
services and the charges for such services.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
SCHEDULE C
PAGE 1 OF 1
SCHEDULE C
----------
DELIVERY
--------
Intentionally Left Blank
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
SCHEDULE D
PAGE 1 OF 3
SCHEDULE D
----------
DOCUMENTATION
-------------
Certain documentation with respect to the Products may be made available to
Buyer on CD-ROM pursuant to the terms and conditions set forth below.
In addition, Nortel may furnish to Buyer such other documentation with respect
to the Products as Nortel deems appropriate.
CD-ROM TERMS AND CONDITIONS
1. DEFINITIONS
"CD-ROM" shall mean a compact disk with read-only memory.
"CD-ROM Documentation" shall mean the documentation that Nortel makes available
to its customers on CD-ROM with respect to DMS-250, DMS-300, and/or DMS-STP
Systems.
" CD-ROM Software" shall mean the computer programs that provide basic logic,
operating instructions or user-related application instructions with respect to
the storage and/or retrieval of any CD-ROM Documentation residing on the CD-ROM,
along with the documentation used to describe, maintain and use such computer
programs.
2. SCOPE
With the delivery of each Initial System ordered by Buyer, Nortel shall deliver
a CD-ROM on which the appropriate CD-ROM Documentation is contained and a user
manual which shall set forth the procedures by which Buyer may use the CD-ROM
Software to access to the CD-ROM Documentation.
Buyer shall be solely responsible for obtaining, at its cost and expense, any
computer or other equipment and software required to use the CD-ROM, CD-ROM
Software or CD-ROM Documentation.
Buyer may order additional CD-ROMs from Nortel at Nortel's then current fees
therefor, and any such additional CD-ROMs shall be subject to these terms and
conditions.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
SCHEDULE D
PAGE 2 OF 3
3. LICENSE
Upon delivery of the CD-ROM, Nortel shall grant to Buyer a non-exclusive, non-
transferable and non-assignable license, subject to these terms and conditions:
(a) to use CD-ROM Software solely to access to the CD-ROM Documentation; and
(b) to use the CD-ROM Documentation solely to operate and maintain the Initial
System with which it was delivered.
Buyer acknowledges that, as between Nortel and Buyer, Nortel retains title to
and all other rights and interest in the CD-ROM Software and CD-ROM
Documentation. Buyer shall not modify, translate or copy the CD-ROM Software or
CD-ROM Documentation without Nortel's prior written consent. Buyer shall hold
secret and not disclose to any person, except Buyer's employees with a need to
know, any of the CD-ROM Software or CD-ROM Documentation.
Buyer shall not sell, license, reproduce or otherwise convey or directly or
indirectly allow access to the CD-ROM Software or CD-ROM Documentation to any
other person, firm, corporation or other entity.
Except to the extent expressly set forth in this Schedule D, Nortel shall have
no obligations of any nature whatsoever with respect to the CD-ROM Software or
the CD-ROM Documentation.
4. DISCLAIMER OF WARRANTY AND LIABILITY
NORTEL MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY NATURE WHATSOEVER WITH
RESPECT TO THE CD-ROM, CD-ROM SOFTWARE, CD-ROM DOCUMENTATION OR ANY INFORMATION
CONTAINED ON ANY OF THE FOREGOING OR ANY RESULTS OR CONCLUSIONS REACHED BY BUYER
AS A RESULT OF ACCESS TO OR USE THEREOF, OR WITH RESPECT TO ANY OTHER MATTER OR
SERVICE PROVIDED BY NORTEL, WHETHER STATUTORY, EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR AGAINST INFRINGEMENT. NORTEL SHALL NOT BE LIABLE FOR ANY DIRECT,
SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER
INCLUDING ANY SUCH DAMAGES WHICH MAY ARISE OUT OF THE USE OF OR INABILITY TO USE
OR ACCESS THE CD-ROM, THE CD-ROM SOFTWARE, THE CD-ROM DOCUMENTATION, AND FURTHER
INCLUDING LOSS OF USE, REVENUE, PROFITS OR ANTICIPATED SAVINGS REGARDLESS OF HOW
SUCH DAMAGES MAY HAVE BEEN CAUSED.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
SCHEDULE D
PAGE 3 OF 3
5. GENERAL
Nothing contained in this Schedule D shall limit, in any manner, Nortel's right
to change the CD-ROM Software or CD-ROM Documentation or the design or
characteristics of Nortel's Products at any time without notice and without
liability.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
SCHEDULE E
PAGE 1 OF 1
SCHEDULE E
----------
NORTEL'S DMS-500 LOCAL NUMBER PORTABILITY COMPLIANCE
----------------------------------------------------
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
ACCESS NODE ATTACHMENT
PAGE 1 OF 6
PRODUCT ATTACHMENT
S/DMS ACCESSNODE PRODUCTS
Northern Telecom Inc. ("Nortel") and 21st Century Telecom Group, Inc. ("Buyer")
agree as follows:
NOW, THEREFORE Buyer and Nortel agree as follows:
1. INCORPORATION BY REFERENCE
--------------------------
This Product Attachment shall be incorporated into and made a part of
Network Products Purchase Agreement No. TCC9701N ("NPPA") between Nortel
and Buyer.
2. DEFINITIONS
-----------
For purposes of this Product Attachment:
"Equipment" shall mean the equipment listed in Schedule A.
"Product Attachment Term" shall mean the period set forth in Section 1.4 of
the NPPA.
"Services" shall mean the services described in Schedule B.
"Software" shall mean the software listed in Schedule A.
"Specifications" shall mean Nortel's standard published performance
specifications for the Products.
"Warranty Period" shall mean /***/ from the date of shipment stamped on the
Equipment or, if the date of shipment is not marked on the Equipment, /***/
from the date of manufacture. In the event Nortel performs installation
Services, the Equipment warranty shall be /***/. With respect to Software
provided hereunder, the warranty period shall be /***/ of such Software.
3. SCOPE
-----
3.1 During the Product Attachment Term, as defined in Section 2 herein, Buyer
shall purchase and take delivery of Products listed in schedule A of this
Product Attachment in partial satisfaction of its obligations with respect
to the Purchase Commitment set forth in Section 1.6 and the /***/ of
anticipated purchases as set forth in Section 3 of the NPPA.
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
ACCESS NODE ATTACHMENT
PAGE 2 OF 6
3.2 Pursuant to Sections 3.3, 3.4, 3.5, 3.6, and 3.7 of the NPPA, Buyer may use
the TNS Service Credits to apply toward the purchase of TNS Services listed
in Exhibit C of the NPPA.
4. SCHEDULES
---------
The following Schedules which are attached hereto are an integral part of
the Product Attachment and are incorporated herein by reference:
Schedule A - Products, Prices, and Fees
Schedule B - Services and Charges
Schedule C - Delivery Intervals
5. ORDERING
--------
All Orders shall specify the Products required and the Services, Nortel is
to perform, if any.
Any change to the original Order initiated by Buyer after Nortel's
acceptance of the Order and any resulting adjustments to prices, schedule
and/or other requirements of the Order shall be negotiated, mutually agreed
upon and subsequently detailed in a written change to the Order ("Change
Order"), referencing the original Order and executed by authorized
representatives of Buyer and Nortel. The adjustment of the Order prices
for Equipment and charges for any Services, as applicable, in a Change
Order shall be established on the basis of Nortel's then current
merchandise prices for such Equipment and/or charges for Services. In the
event that the Change Order affects work already performed, the adjustment
of the Order price shall include reasonable charges incurred by Nortel
related to such work. No such changes shall be performed until a Change
Order has been executed by Nortel and Buyer as described above.
6. PRICING AND TERMS OF PAYMENT
----------------------------
6.1 Pricing for Equipment and Software shall be as set forth in Schedule
A, Section 1. Pricing for Engineered Systems and/or Merchandise
Orders shall be as set forth in Schedule A, Section 2.
6.2 In the event that Buyer has not met the AccessNode Minimum, the
pricing for Line Cards listed in Schedule A shall increase by /***/
per Line Card ("New Line Card Price") for all such Line Cards
purchased during the Product Attachment Term. For any such Line Cards
previously purchased during the Product Attachment Term, Nortel shall
invoice Buyer for the /***/. Such invoice shall be payable as set
forth in Section 6.7 herein.
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
ACCESS NODE ATTACHMENT
PAGE 3 OF 6
6.3 The prices for engineering, installation and/or system line-up and
testing ("SLAT") Services performed by Nortel with respect to an
accepted Order shall be as quoted by Nortel and agreed to by Buyer
prior to issuance of the applicable Order.
6.4 Nortel will prepay freight charges and the cost of any insurance
requested by Buyer and invoice Buyer for these items at Nortel's
actual cost. These charges will appear as separate line items on
Nortel's invoice.
6.5 Nortel's prices set forth in Schedule A may be revised by Nortel, from
time to time, by means of /***/ prior written notice given to Buyer.
Such notice shall specify the effective date of the price change and
shall apply to Orders received by Nortel on or after the effective
date of the price change. Additions and/or deletions of products to
these price lists may occur as the Product evolves.
6.6 Nortel shall invoice Buyer for the price of the Products upon shipment
of the Products. Any Services provided hereunder shall be invoiced to
Buyer upon Nortel's completion of such Services.
6.7 Payment of the purchase price of the Equipment as well as any prepaid
freight and insurance charges shall be due within thirty (30) days
from the date of Nortel's invoice for such Equipment. Nortel's
charges, as applicable, for installation and/or other services
performed during each calendar month shall be paid by Buyer on a
monthly basis within thirty (30) days after receipt of Nortel's
invoice for such Services.
7. TESTING, TURNOVER, AND ACCEPTANCE
---------------------------------
7.1 If installation is being purchased pursuant to this contract, Buyer
shall be responsible for having the installation sites ready on time
and in accordance with Nortel's requirements and shall reimburse
Nortel for any additional expense incurred by Nortel as a result of
Buyers failure in this respect. Any installation purchased pursuant to
this contract shall be performed in accordance with Nortel's standard
installation procedures and manuals. Upon completion of installation,
Nortel shall perform its standard test procedures in accordance with
applicable Nortel Specifications and any mutually agreed upon test
plan, and shall certify to Buyer that the Equipment (and Software, if
applicable) is ready to be placed in service and same shall be
conclusively deemed to have been accepted by Buyer. Acceptance shall
not be postponed due to any deficiencies of Equipment or Services
supplied by Buyer and tested in conjunction with the Equipment. In the
event that installation is not purchased pursuant to this contract,
any Equipment
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
ACCESS NODE ATTACHMENT
PAGE 4 OF 6
and Software delivered hereunder shall be conclusively deemed to have
been accepted upon delivery of same to purchaser at the Shipping
Point.
7.2 When Nortel installs the Products, Buyer's acceptance of the Products
and Services shall take place, or be deemed to have taken place, upon
completion by Nortel of installation and SLAT Services in accordance
with Nortel's standard procedures and practices, as evidenced by the
acceptance test results showing that the Products meet and perform in
accordance with the applicable Specifications. Upon such acceptance,
Nortel shall provide Buyer with a turnover notice to be acknowledged
in writing by Buyer. By providing the turnover notice, Nortel
certifies that the Products meet and perform in accordance with the
applicable Specifications. Acceptance of Products shall not be
withheld or postponed due to:
a) deficiencies of the Products or any other product with which such
Products are used or operated, resulting from causes not
attributable to Nortel, such as but not limited to (i) inaccuracy
of information provided by Buyer, (ii) inadequacy or deficiencies
of product, facilities or services provided by Buyer or a third
party and tested in conjunction with the Products, or (iii) other
conditions, external to the Products provided by Nortel, which
are beyond limits specified herein and are used by Nortel in
performance calculations and spurious outputs from adjacent
product. Nortel shall, however, at Buyer's expense, assist Buyer
in the elimination or minimization of such deficiencies; or
b) minor deficiencies or shortages, attributable to Nortel, of a
nature that do not prevent full and efficient commercial
operation of the Products. Nortel shall, however, at its expense,
take prompt and effective action to correct any such deficiencies
or shortages.
7.3 The effort associated with Nortel's investigation of any deficiencies
not attributable to Nortel shall be billed to Buyer.
8. WARRANTIES AND REMEDIES
-----------------------
8.1 The repair or replacement of Equipment and the correction of defective
installation Services shall be warranted for a period of /***/ days or
the remainder of the original Warranty Period whichever is longer.
8.2 Nortel shall provide Buyer with repair and replacement service for a
minimum period of /***/ from the commencement date of this Product
Attachment. Nortel shall provide Buyer with a /***/ prior written
notice of any discontinuance so as to enable Buyer to place an order
for its requirements or to enter into any other
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
ACCESS NODE ATTACHMENT
PAGE 5 OF 6
mutually satisfactory agreement with Nortel prior to such
discontinuance. This provision shall survive the expiration of this
Product Attachment.
9. NOTICES
-------
Pursuant to Paragraph 18.5 of the NPPA, any notices by Buyer to Nortel
which are specific to this Product Attachment shall be delivered to the
following address:
Northern Telecom Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Vice President, Carrier Networks
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Northern Telecom Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10. ADDITIONAL TERMS
----------------
10.1 Nortel may, from time to time, issue updates to the Software and, upon
Buyer's payment of applicable Right to Use Fees or Software License
Fees, if any, shall license these updates to Buyer. Nortel shall
classify such updates as either: 1) /***/ ("ISU's"), /***/, 2) /***/
("Enhancements"), or 3) /***/ ("Generics"). Updates to Software
classified, as ISU's by Nortel will be provided at /***/ to Buyer.
Notwithstanding the foregoing, ISU's and Enhancements shall not
include the cost of /***/ that may be required to update such ISU's.
Updates classified as Generics, which will be used by Buyer in its
operations shall be made available to Buyer on a /***/ basis. In the
event that Nortel determines that the update includes both ISU's and
Generics which will be used by Buyer in its operations, such update
shall be made available to Buyer. If Buyer elects to receive the
update(s) during the Term of the Agreement, Nortel shall invoice Buyer
/***/.
10.2 Standard delivery intervals for Unforecasted Product shall be as set
forth in Schedule C. If Buyer desires to maintain the shorter
delivery schedules set forth in Schedule C, Buyer agrees to issue
quarterly forecasts in a time frame and format mutually agreed to by
the parties. Nortel's only obligation regarding such delivery
intervals shall be to meet delivery dates set forth in an accepted
Order. If Nortel, prior to acceptance of an Order, advises Buyer that
it cannot meet a delivery date shown in an Order, both parties will
negotiate a revised date prior to acceptance of the Order by Nortel.
The installation and SLAT intervals
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
ACCESS NODE ATTACHMENT
PAGE 6 OF 6
applicable to an Order will be quoted by Nortel and agreed to by Buyer
and Nortel prior to issuance of such Order.
10.3 INSTALLATION SITES
If Nortel is providing Buyer with installation Services, Buyer shall
be responsible for having all installation sites ready on time and in
accordance with Nortel's requirements. Buyer shall be responsible for
any expense incurred by Nortel as a result of Buyer's failure to meet
the foregoing obligations.
NORTHERN TELECOM INC. 21ST CENTURY TELECOM GROUP, INC.
By:______________________________ By:______________________________
(Signature) (Signature)
Name:____________________________ Name:____________________________
(Print) (Print)
Title:___________________________ Title:___________________________
Date:____________________________ Date:____________________________
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
TRANSMISSION PRODUCT ATTACHMENT
PAGE 1 OF 6
PRODUCT ATTACHMENT
S/DMS TRANSMISSION PRODUCTS
Northern Telecom Inc. ("Nortel") and 21st Century Telecom Group, Inc. ("Buyer")
agree as follows:
NOW, THEREFORE, Nortel and Buyer agree as follows:
1. INCORPORATION BY REFERENCE
--------------------------
This Product Attachment shall be incorporated into and made a part of
Network Products Purchase Agreement No. TCC9701N ("NPPA") between Nortel
and Buyer.
2. DEFINITIONS
-----------
For purposes of this Product Attachment:
"Equipment" shall mean the equipment listed in Schedule A.
"Product Attachment Term" shall mean the period set forth in Section 1.4 of
the NPPA.
"Services" shall mean the services described in Schedule B.
"Software" shall mean the software listed in Schedule A.
"Specifications" shall mean Nortel's standard published performance
specifications for the Products.
"Vendor Items" shall mean the equipment marked with an asterisk (*) in
Schedule A.
"Warranty Period" shall mean /***/ from the date of shipment stamped on the
Equipment or, if the date of shipment is not marked on the Equipment, /***/
months from the date of manufacture. In the event Nortel performs
installation Services, the Equipment warranty shall be /***/ from the
/***/. With respect to Software provided hereunder, the warranty period
shall be /***/ of such Software.
3. SCOPE
-----
3.1 During the Product Attachment Term, as defined in Section 2 herein, Buyer
shall purchase and take delivery of Products listed in Schedule A of this
Product Attachment in partial satisfaction of its obligations with respect
to the Purchase Commitment set forth in Section 1.6 and the /***/ of
anticipated purchases as set forth in Section 3 of the NPPA.
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
TRANSMISSION PRODUCT ATTACHMENT
PAGE 2 OF 6
3.2 Pursuant to Sections 3.3, 3.4, 3.5, 3.6, and 3.7 of the NPPA, Buyer may use
the Service Credits to apply toward the purchase of Services listed in
Schedule A of this Product Attachment.
4. SCHEDULES
---------
The following Schedules which are attached hereto are an integral part of
the Product Attachment and are incorporated herein by reference:
Schedule A - Products, Prices, and Fees
Schedule B - Services and Charges
Schedule C - Delivery Intervals
Schedule D - Forecast
5. ORDERS AND CANCELLATIONS
------------------------
5.1 Delivery of Products and Services will be in accordance with Nortel's
accepted Order. All Orders issued by Buyer shall include the following
information:
(a) an Order number and a reference to the Agreement and this Product
Attachment;
(b) the detailed description, quantity and price of the Products and
Services to be performed by Nortel, if any;
(c) requested delivery date(s);
(d) shipping destination(s) for Products;
(e) mailing address for Nortel invoice(s);
5.2 Orders submitted by Buyer for Products to be supplied furnish only ("FO")
shall be acknowledged by Nortel in a timely fashion. Orders submitted by
Buyer for Products engineered, furnished and installed ("EFI") shall be
acknowledged by Nortel as received in a timely fashion. Nortel shall
provide one copy of the order acknowledgment to Buyer for each Order
received.
5.3 In the event of total or partial cancellation of an Order by Buyer within
ten (10) business days prior to scheduled ship date, Buyer shall pay to
Nortel charges calculated in accordance with the following based upon the
percentage of the total Order or affected portion thereof:
Notification prior to Cancellation Penalty
scheduled ship date paid by Buyer
--------------------- ---------------------
5 to 6 Weeks /***/
Less than 4 Weeks /***/
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
TRANSMISSION PRODUCT ATTACHMENT
PAGE 3 OF 6
5.4 During any calendar year period during the Term, Buyer may request, one (1)
time only that an Order be rescheduled without penalty upon giving at least
two (2) weeks written notice to Nortel prior to the scheduled ship date.
The new ship date shall be no more than /***/ later than the original ship
date. Any request by Buyer for rescheduling ship dates shall be subject to
mutual agreement.
5.5 All Orders for Products set forth in Schedule A and all Orders for
engineered Products canceled by Buyer after delivery to Buyer, shall be
subject to cancellation penalties of /***/ of the value of the affected
Order.
5.6 Any change to the original Order initiated by Buyer after Nortel's
acceptance of the Order and any resulting adjustments to prices, schedule
or other requirements of the Order shall be negotiated, mutually agreed
upon and subsequently detailed in a written change to the Order ("Change
Order"), referencing the original Order and executed by authorized
representatives of Buyer and Nortel. The adjustment of the Order prices
for Products and charges for any Services, as applicable, in a Change Order
shall be established on the basis of Nortel's then current merchandise
prices for such Products or charges for Services. In the event that the
Change Order affects work already performed, the adjustment of the Order
price shall include reasonable charges incurred by Nortel related to such
work. No such changes shall be performed until a Change Order has been
executed by Nortel and Buyer as described above.
6. PRICING AND TERMS OF PAYMENT
----------------------------
6.1 Pricing for Equipment and Software shall be as set forth in Schedule A,
Section 1 subject to any discounts, if applicable, set forth in Schedule A,
Section 2.
6.2 The prices for engineering, installation and system line-up and testing
("SLAT") Services performed by Nortel with respect to an accepted Order
shall be as quoted by Nortel and agreed to by Buyer prior to issuance of
the applicable Order.
6.3 Nortel will prepay freight charges and the cost of any insurance requested
by Buyer and invoice Buyer for these items at Nortel's actual cost. These
charges will appear as separate line items on Nortel's invoice.
6.4 Nortel's prices set forth in Schedule A may be revised by Nortel, from time
to time, by means of /***/ days prior written notice given to Buyer. Such
notice shall specify the effective date of the price change and shall apply
to Orders received by Nortel on or after the effective date of the price
change.
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
TRANSMISSION PRODUCT ATTACHMENT
PAGE 4 OF 6
6.5 Nortel shall invoice Buyer for the price of the Products as well as any
prepaid freight and insurance charges upon shipment of the Products. Any
Services provided hereunder shall be invoiced to Buyer upon Nortel's
completion of such Services.
7. TESTING, TURNOVER, AND ACCEPTANCE
---------------------------------
7.1 When Nortel installs the Products, Buyer's acceptance of the Products and
Services shall take place, or be deemed to have taken place, upon
completion by Nortel of installation and SLAT Services in accordance with
Nortel's standard procedures and practices, as evidenced by the acceptance
test results showing that the Products meet and perform in accordance with
the applicable Specifications and any mutually agreed upon test plan. Upon
such acceptance, Nortel shall provide Buyer with a turnover notice to be
acknowledged in writing by Buyer. By providing the turnover notice, Nortel
certifies that the Products meet and perform in accordance with the
applicable Specifications. Acceptance of the Products shall not be withheld
or postponed due to:
a) deficiencies of the Products or any other product with which such
Products are used or operated, resulting from causes not attributable
to Nortel, such as but not limited to (i) inaccuracy of information
provided by Buyer, (ii) inadequacy or deficiencies of product,
facilities or services provided by Buyer or a third party and tested in
conjunction with the Products, or (iii) other conditions, external to
the Products provided by Nortel, which are beyond limits specified
herein and are used by Nortel in performance calculations and spurious
outputs from adjacent product. Nortel shall, however, at Buyer's
expense, assist Buyer in the elimination or minimization of such
deficiencies; or
b) minor deficiencies or shortages, attributable to Nortel, of a nature
that do not prevent full and efficient commercial operation of the
Products. Nortel shall, however, at its expense, take prompt and
effective action to correct any such deficiencies or shortages.
7.2 The effort associated with Nortel's investigation of any deficiencies not
attributable to Nortel shall be billed to Buyer.
8. WARRANTIES AND REMEDIES
-----------------------
8.1 The repair or replacement of Equipment and the correction of defective
installation Services shall be warranted for a period of /***/ or the
remainder of the original Warranty Period whichever is longer.
8.2 Nortel shall provide Buyer with repair and replacement service for a
minimum period of /***/ from the commencement date of this Product
Attachment, subject to the condition that should Nortel discontinue
manufacture of the Product or portions thereof prior to the
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
TRANSMISSION PRODUCT ATTACHMENT
PAGE 5 OF 6
expiration of such /***/ period (such right of discontinuance being
expressly reserved by Nortel), Nortel shall provide Buyer with a /***/
prior written notice of any discontinuance so as to enable Buyer to place
an order for its requirements or to enter into any other mutually
satisfactory agreement with Nortel prior to such discontinuance. This
provision shall survive the expiration of this Product Attachment.
9. NOTICES
-------
Pursuant to Section 18.5 of the NPPA, any notices by Buyer to Nortel that
are specific to this Product Attachment shall be delivered to the following
address:
Northern Telecom Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Vice President, Carrier Networks
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Northern Telecom Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10. ADDITIONAL TERMS
----------------
10.1 Nortel may, from time to time, issue updates to the Software and, upon
Buyer's payment of applicable Right to Use Fees or Software License Fees,
if any, shall license these updates to Buyer. Nortel shall classify such
updates as either: 1) /***/ ("ISUs"), /***/ or 2) /***/ ("Enhancements").
Updates to Software, classified as ISUs by Nortel, will be provided at no
cost to Buyer. Notwithstanding the foregoing, ISUs and Enhancements shall
not include the cost of /***/ that may be required to update such ISUs.
Updates classified as Enhancements, which will be used by Buyer in its
operations shall be made available to Buyer on a /***/ basis. In the
event Nortel determines that the update includes both ISUs and Enhancements
which will be used by Buyer in its operations, such update shall be made
available to Buyer. If Buyer elects to receive the update, Nortel shall
invoice Buyer only for the amount determined by Nortel to be attributed to
the Enhancements contained in such update.
10.2 In order to allow Nortel to meet its delivery requirements, Buyer shall
issue a forecast showing the specific types and quantities of Products to
be released and the dates such Products will be released throughout the
Product Attachment Term. Buyer shall update such forecasts quarterly with
each forecast stating the specific types of Products and quantities of
Products to be released during the next quarter. The initial forecast
shall be
----------------------
/***/ Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
NORTEL PROPRIETARY INFORMATION
AGREEMENT NO. TCC9701N
TRANSMISSION PRODUCT ATTACHMENT
PAGE 6 OF 6
as set forth in Schedule D. In the event Buyer does not meet its obligation
to update its forecast quarterly, then Nortel shall not be obligated to
meet its forecasted delivery intervals as stated in Schedule C. Nortel's
only obligation regarding such delivery intervals shall be to meet delivery
dates set forth in an accepted Order. If Nortel, prior to acceptance of an
Order, advises Buyer that it cannot meet a delivery date shown in an Order,
both parties will negotiate a revised date prior to acceptance of the Order
by Nortel. The installation and SLAT intervals applicable to an Order will
be quoted by Nortel and agreed to by Buyer and Nortel prior to issuance of
such Order.
10.3 If Nortel is providing Buyer with installation Services, Buyer shall be
responsible for having all installation sites ready on time and in
accordance with Nortel's requirements. Buyer shall be responsible for any
expense incurred by Nortel as a result of Buyer's failure to meet the
foregoing obligations.
NORTHERN TELECOM INC. 21st CENTURY TELECOM GROUP, INC.
By:______________________________ By:______________________________
(Signature) (Signature)
Name:____________________________ Name:____________________________
(Print) (Print)
Title:___________________________ Title:___________________________
Date:____________________________ Date:____________________________
NORTEL PROPRIETARY INFORMATION
