EXHIBIT 10.7
GENERAL AGREEMENT
BETWEEN
KMC TELECOM INC.
AND
KMC TELECOM II, INC.
AND
LUCENT TECHNOLOGIES INC.
Contract No.: LNM970313MP
TABLE OF CONTENTS
GENERAL AGREEMENT TERMS AND CONDITIONS
ARTICLE I GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 HEADINGS AND DEFINITIONS:. . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 TERM OF AGREEMENT: . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.3 SCOPE: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.4 PURCHASE AND SALE: . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.5 ORDERS:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.6 CHANGES IN CUSTOMER'S ORDERS:. . . . . . . . . . . . . . . . . . . . . . .4
1.7 PRICES:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.8 INVOICES AND TERMS OF PAYMENT: . . . . . . . . . . . . . . . . . . . . . .4
1.9 SHIPPING AND PACKING:. . . . . . . . . . . . . . . . . . . . . . . . . . .5
1.10 TAXES:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
1.11 TITLE AND RISK OF LOSS: . . . . . . . . . . . . . . . . . . . . . . . . .5
1.12 PURCHASE MONEY SECURITY INTEREST: . . . . . . . . . . . . . . . . . . . .6
1.13 WARRANTY: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
1.14 CHANGES IN PRODUCTS:. . . . . . . . . . . . . . . . . . . . . . . . . . .8
1.15 INFRINGEMENT: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
1.16 CUSTOMER'S REMEDIES:. . . . . . . . . . . . . . . . . . . . . . . . . . .9
1.17 USE OF INFORMATION: . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.18 LICENSE FOR LICENSED MATERIALS: . . . . . . . . . . . . . . . . . . . . 11
1.19 TITLE, RESTRICTIONS, AND CONFIDENTIALITY: . . . . . . . . . . . . . . . 11
1.20 EXPORT CONTROL: . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.21 DOCUMENTATION:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.22 CHANGES IN LICENSED MATERIALS:. . . . . . . . . . . . . . . . . . . . . 12
1.23 OPTIONAL SOFTWARE FEATURES: . . . . . . . . . . . . . . . . . . . . . . 12
1.24 ADDITIONAL PROVISIONS FOR PRODUCT SPECIFIC LICENSED MATERIALS:. . . . . 12
1.25 COMPATIBILITY OF SELLER'S PRODUCTS AND LICENSED MATERIALS:. . . . . . . 12
1.26 PUBLICITY:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.27 PUBLICATION OF AGREEMENT: . . . . . . . . . . . . . . . . . . . . . . . 13
1.28 NOTICES:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.29 CUSTOMER RESPONSIBILITY:. . . . . . . . . . . . . . . . . . . . . . . . 13
1.30 RIGHT OF ACCESS:. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.31 FORCE MAJEURE:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Contract No.: LNM970313MP
1.32 INDEPENDENT CONTRACTOR: . . . . . . . . . . . . . . . . . . . . . . . . 14
1.33 RELEASES VOID:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.34 SEVERABILITY: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.35 SURVIVAL OF OBLIGATIONS:. . . . . . . . . . . . . . . . . . . . . . . . 14
1.36 NON-WAIVER: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.37 ASSIGNMENT: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.38 TERMINATION OF ORDERS FOR CONVENIENCE:. . . . . . . . . . . . . . . . . 15
1.39 TERMINATION FOR BREACH: . . . . . . . . . . . . . . . . . . . . . . . . 16
1.40 APPLICABLE LAW: . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.41 ARBITRATION; NO WORK STOPPAGE:. . . . . . . . . . . . . . . . . . . . . 16
1.42 LIABILITY AND INDEMNIFICATION:. . . . . . . . . . . . . . . . . . . . . 16
1.43 INSURANCE:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.44 COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE II ADDITIONAL PROVISIONS FOR LICENSED MATERIALS . . . . . . . . . . 17
5ESS SWITCH LICENSED MATERIALS . . . . . . . . . . . . . . . . . . . . . . . 18
2.1 ADDITIONAL RIGHTS IN SOFTWARE: . . . . . . . . . . . . . . . . . . . . . 18
2.2 RELATED DOCUMENTATION: . . . . . . . . . . . . . . . . . . . . . . . . . 18
TRANSMISSION SYSTEMS LICENSED MATERIALS. . . . . . . . . . . . . . . . . . . 19
2.3 DEFINITIONS: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.4 ADDITIONAL RIGHTS IN TRANSMISSION SYSTEMS SOFTWARE:. . . . . . . . . . . 19
2.5 INSTALLATION OF TRANSMISSION SYSTEMS SOFTWARE: . . . . . . . . . . . . . 19
ARTICLE III PROVISIONS APPLICABLE TO ENGINEERING, INSTALLATION, AND OTHER
SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.1 CONDITIONS OF INSTALLATION AND OTHER SERVICES PERFORMED ON CUSTOMER'S
SITE:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2 ACCEPTANCE OF INSTALLATION:. . . . . . . . . . . . . . . . . . . . . . . 23
3.3 SITE PREPARATION:. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.4 WORK OR SERVICES PERFORMED BY OTHERS:. . . . . . . . . . . . . . . . . . 24
ARTICLE IV ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . 25
4.1 ENTIRE AGREEMENT:. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Contract No.: LNM970313MP
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
A-1.1 SCOPE OF APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . 26
A-1.2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
A-1.3 CUSTOMER PURCHASE COMMITMENT. . . . . . . . . . . . . . . . . . . . . 27
A-1.4 TERMS OF DISCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . 27
A-1.5 NETWORK STANDARDIZATION . . . . . . . . . . . . . . . . . . . . . . . 27
A-1.6 CUSTOMER FORECASTS. . . . . . . . . . . . . . . . . . . . . . . . . . 28
A-1.7 PRICING PLAN FOR 5ESS-Registered Trademark--2000 PRODUCTS . . . . . . 28
A-1.8 PRICING PLAN FOR 5ESS-Registered Trademark--2000 CDX/VCDX SWITCH SOFTWARE
RELEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
A-1.9 5ESS-Registered Trademark--2000 SWITCH TRAINING INCENTIVE . . . . . . 29
A-1.10 INVENTORY CONTROL PROVISIONS FOR 5ESS-Registered Trademark--2000
SWITCHES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
A-1.11 CUSTOMER SUPPORT . . . . . . . . . . . . . . . . . . . . . . . . . . 30
A-1.12 TECHNICAL SUPPORT OF 5ESS-Registered Trademark--2000 SWITCH
PRODUCTS AND LICENSED MATERIALS. . . . . . . . . . . . . . . . . . . 30
A-1.13 5ESS SWITCH DOCUMENTATION. . . . . . . . . . . . . . . . . . . . . . 30
A-1.14 MAINTENANCE SERVICE FOR 5ESS SWITCH SOFTWARE . . . . . . . . . . . . 30
A-1.15 PRICING PLAN FOR TRANSMISSION SYSTEMS. . . . . . . . . . . . . . . . 31
A-1.15.1 PRICING PLAN FOR DACS IV-2000 SYSTEMS . . . . . . . . . . . . . . . 31
A-1.16 TRANSMISSION TRAINING INCENTIVE. . . . . . . . . . . . . . . . . . . 32
A-1.17 PRICING PLAN FOR POWER PLANT SYSTEMS . . . . . . . . . . . . . . . . 33
A-1.18 CONTINUING PRODUCT SUPPORT -- PARTS AND SERVICES . . . . . . . . . . 33
A-1.19 PRODUCT AVAILABILITY . . . . . . . . . . . . . . . . . . . . . . . . 33
A-1.20 PROMOTIONAL SUPPORT. . . . . . . . . . . . . . . . . . . . . . . . . 33
A-1.21 FUTURE CONSIDERATIONS. . . . . . . . . . . . . . . . . . . . . . . . 34
Schedule 1 MARKETING DEVELOPMENT FUND GUIDLINES 11/1/96. . . . . . . . . . 35
Contract No.: LNM970313MP
GENERAL AGREEMENT TERMS AND CONDITIONS
ARTICLE I
GENERAL PROVISIONS
This General Agreement Number LNM970313MP (hereinafter "General Agreement" or
"Agreement") is made by and between KMC Telecom Inc. and KMC Telecom II, Inc.,
each a Delaware corporation, with offices located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter collectively referred to as "Customer"), and
Lucent Technologies Inc., a Delaware corporation with offices located at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter "Seller").
WHEREAS, Seller is an experienced and reputable company engaging in the business
of designing, manufacturing, selling and installing telecommunications switching
systems for use in local communications networks, including related software and
hardware, and providing related pre- and post-sales service including, without
limitation, the Products, Licensed Materials, and Services (each as defined
below); and
WHEREAS, Customer wishes to engage Seller to provide the Products, Licensed
Materials and Services described herein which Customer will use to deliver
digital local telephone service in designated markets in the United States to be
serviced by Customer; and
WHEREAS, pending negotiation of this General Agreement, for the limited purpose
of implementing the sale and/or licensing, as appropriate, of certain equipment
and software during the period prior to the finalization of this General
Agreement, Customer and Seller entered into a certain interim General Agreement
Number LMN970205RPKMC effective March 6, 1997 ("Interim General Agreement")
whereby Seller agreed to supply and Customer agreed to procure certain products
and services; and
WHEREAS, Customer and Seller desire to enter into this General Agreement to
supersede in its entirety the Interim General Agreement,
NOW THEREFORE, in consideration of the mutual promises hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1.1 HEADINGS AND DEFINITIONS:
All headings used in this Agreement are inserted for convenience only and
are not intended to affect the meaning or interpretation of this Agreement or
any clause. For the purpose of this Agreement, the following definitions will
apply:
(a) "Affiliate" of a corporation means its Subsidiaries, any company of which
it is a Subsidiary, and other Subsidiaries of such company;
(b) "Customer Price List" means Seller's published "Ordering and Price Guides"
or other price notification releases furnished by Seller for the purpose of
communicating Seller's prices or pricing related information to Customer,
however, this does not include firm price quotations;
(c) "Designated Processor" means the Product for which a license to Use
Licensed Materials is granted;
(d) "Firmware" means a combination of (1) hardware and (2) Software represented
by a pattern of bits contained in such hardware;
(f) "Hazardous Materials" means material designated as a "hazardous chemical
substance or mixture" pursuant to Section 6 of the Toxic Substance Control
Act; a "hazardous material" as defined in the Hazardous
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Materials Transportation Act (49 U.S.C. 1801, et seq.); "hazardous
substance" as defined in the Occupational Safety and Health Act Hazard
Communication Standard (29 CFR 1910.1200);
(g) "Licensed Materials" means the Software and Related Documentation for which
licenses are granted by Seller under this Agreement; no Source Code
versions of Software are included in Licensed Materials;
(h) "Product" means systems, equipment, hardware and parts thereof, but the
term does not mean Software whether or not such Software is part of
Firmware;
(i) "Related Documentation" means materials useful in connection with Software
such as, but not limited to, flowcharts, logic diagrams and listings,
program descriptions and Specifications; no Source Code versions of
Software are included in Related Documentation;
(j) "Seller's Manufactured Product" means a Product manufactured by Lucent
Technologies Network Systems Group or purchased by it pursuant to its
procurement specifications (e.g., KS or AT);
(k) "Services" means the performance of work and includes but is not limited
to: (1) engineering services such as preparation of equipment
specifications, preparation and updating office records, and preparation of
a summary of material not specifically itemized in an order; (2)
installation services such as installation, equipment removal, and cable
mining; and (3) other services such as maintenance and repairs, and
Customer personnel training, performed by Seller under this Agreement, but
for the purposes of this Agreement the term "Services" does not include any
services provided by the Professional Services Division of Seller's Network
Systems Group unless otherwise expressly agreed to in writing by the
parties;
(l) "Software" means a computer program consisting of a set of logical
instructions and tables of information which guide the functioning of a
processor; such program may be contained in any medium whatsoever,
including hardware containing a pattern of bits representing such program,
but the term "Software" does not mean or include such medium;
(m) "Source Code" means any version of Software incorporating high-level or
assembly language that generally is not directly executable by a processor;
(n) "Specifications" means Seller's or its vendor's technical specifications
for particular Products or Software furnished hereunder, or customized
specifications Seller has agreed to under the terms of this Agreement to
design for Customer;
(o) "Subsidiary" of a company means a corporation the majority of whose shares
or others securities entitled to vote for election of directors is now or
hereafter owned or controlled by such company either directly or
indirectly; but such corporation shall be deemed to be a Subsidiary of such
company only as long as such ownership or control exists;
(p) "United States" means the United States of America and all of its
territories and possessions, and
(q) "Use" with respect to Licensed Materials means loading the Licensed
Materials, or any portion thereof, into a processor for execution of the
instructions and tables contained in such Licensed Materials.
1.2 TERM OF AGREEMENT:
The term of this General Agreement shall be effective (and relate back to
in all respects) March 6, 1997 (the "Effective Date") which was also the
effective date of the Interim General Agreement and, except as otherwise
provided herein, shall continue in effect hereafter for a period of three (3)
years (hereinafter, the Term). The parties will meet not less than six (6)
months prior to the end of the Term to discuss extending the term hereof. This
General
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Agreement may be terminated at any time by either party, without cause, upon at
least sixty (60) days prior written notice to the other party.
1.3 SCOPE:
This Agreement shall replace and supersede the Interim General Agreement in
its entirety. Upon execution of this Agreement, the Interim General Agreement
shall be of no further force and effect and any transactions between the parties
with respect to the subject matter hereof and thereof shall be governed by this
Agreement. The terms of this General Agreement shall apply to all transactions
in which Seller furnishes Products, Licensed Materials, or Services (excluding
Operations Systems Products and related Licensed Materials) provided by its
Network Systems Group to Customer. Purchase orders placed under this General
Agreement for Seller's 5ESS-Registered Trademark--2000 Switch Products,
Transmission Systems Products, Power Systems Products and related Licensed
Materials shall be governed by the terms set forth in Appendix A attached hereto
and made a part hereof. By virtue of placing orders with Seller or using any
Products, Licensed Materials, or Services provided hereunder, Customer agrees to
be bound to the terms set forth in this General Agreement respecting such
Products, Licensed Materials, or Services. All Products, Licensed Materials, or
Services furnished by Seller to Customer pursuant to this General Agreement
shall be for Customer's own internal use and not for resale unless authorized
representatives of both parties expressly agree in writing that the terms and
conditions of this General Agreement, modified where applicable, shall apply to
resale transactions.
As an independent contractor with overall responsibility as provider under
this Agreement, Seller will design, manufacture, and install and mechanically
test, if applicable, the Product(s) and Licensed Materials ordered hereunder
within the time frames agreed to by the parties for the applicable purchase
order. As each purchase order is agreed upon for one or more Products and/or
Licensed Materials, the parties will agree on a schedule for the delivery and
installation, if applicable, for such Product(s) and/or Licensed Materials.
Seller will provide to Customer a copy of such schedule for each purchase order.
The terms and conditions of this Agreement shall apply to Seller's
provision of the Services defined in clause 1.1 DEFINITIONS of this Agreement.
Upon its execution, the Professional Services Agreement Number LNS970602JC,
between the parties will govern the terms and conditions of the additional
services identified in the Scope of Work of such Agreement, if required by
Customer from Seller.
1.4 PURCHASE AND SALE:
Seller will sell, and Customer will purchase and/or license, as
appropriate, the Products, Licensed Materials and Services set forth in Appendix
A available for purchase under this Agreement at the prices and/or discounts set
forth therein (subject to change in accordance with clause 1.7), and in
accordance with the terms and conditions hereof. All firm price quotes made by
Seller to Customer shall incorporate the terms and conditions of this General
Agreement. Any conflicting terms and conditions of a firm price quote, which
have been duly signed by an authorized representative of each of Seller and
Customer, will supersede the comparable terms of this General Agreement, but
solely with respect to the items subject to such firm price quote.
1.5 ORDERS:
All orders submitted by Customer for Products, Licensed Materials, and
Services shall be deemed to incorporate and be subject to the terms and
conditions of this Agreement. Any order submitted pursuant to a firm price
quotation shall reference and include such firm price quotation number. All
orders shall contain the information regarding the Products, Licensed Materials
and Services reasonably necessary for Seller to fill the order. All schedules
and requested dates are subject to Seller's reasonable concurrence. Upon
agreement by the parties as to a schedule for delivery and installation, if
applicable, Seller will provide a copy of such schedule to Customer. All orders
are subject to acceptance by Seller in accordance with this Agreement. Such
acceptance will not be unreasonably withheld or delayed. Seller reserves the
right to place any order on hold, delay shipment, and/or reject
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any order throughout the occurrence and continuation of any of the following:
(i) Customer being in default of its payment obligations under this Agreement;
(ii) in the event Customer shall not have in place a financing commitment having
available credit equal to the amount of such orders; or (ii) Seller has provided
Customer with a notice of a material breach under this Agreement which remains
uncured after any applicable cure period. In all other cases in which there is
a foreseeable delay, Seller will promptly notify Customer of such delay and its
reason.
1.6 CHANGES IN CUSTOMER'S ORDERS:
Changes by Customer to an accepted order shall be treated as a separate
order unless the parties expressly agree otherwise. If any such change
materially affects Seller's ability to meet its obligations under the original
order, any price (or discount, if applicable), shipment date or Services
completion date quoted by Seller relating to the parts of the original order so
affected is subject to change, and shall be negotiated between the parties to
accommodate the additional work required or inconvenience encountered.
1.7 PRICES:
To the extent Customer's order is subject to a firm price quotation made by
Seller, prices, fees and charges (hereinafter "prices") shall be as set forth in
Seller's firm price quotation. In all other cases, prices shall be as set forth
in Seller's Customer Price Lists. As of the Effective Date of this Agreement,
Customer's prices and/or discounts for Seller's 5ESS-Registered Trademark--2000
Switch Products, Transmission Systems Products, Power Systems Products and
related Licensed Materials shall be as set forth in Appendix A attached hereto.
Engineering, installation and related Services provided under this Agreement
will be quoted by Seller in a firm price quotation on a case by case basis. In
those cases where the price is to be determined from a Customer Price List, the
applicable Price List shall be the issue which is in effect on the date of
Seller's receipt of the order provided that the shipment or Services
commencement date is in accordance with Seller's published shipping or planning
interval or thirty (30) days from the date of order receipt, whichever is
longer. Prices for Products or Services to be shipped or performed beyond the
published shipping interval will be established by determining an effective
order entry date (the date required for order entry by Seller in accordance with
Customer's requested date) and applying the price from the applicable Customer
Price List as of that date. Seller may amend its prices, other than those
subject to firm price quotations, and, except when applicable prices are
adjusted for changes in raw material prices and agrees to provide thirty (30)
days written notice of any increase in prices contained in Seller's Customer
Price Lists. When prices contained in Seller's Customer Price Lists are adjusted
for changes in raw material prices, Seller's new prices will be revised
effective the first day of any given month. The basis for raw material
adjustments will be provided to Customer upon request. Notwithstanding the
foregoing, if Seller is delayed from completion of an order due to any change
requested by Customer or as a result of Customer's delay in furnishing
reasonably necessary information or in performing its material obligations under
this Agreement, prices are subject to change. Unless expressly stated in
writing, Seller's prices are exclusive of charges for transportation and related
Services such as hauling and hoisting, and any sales or other tax or duty which
Seller may be required to collect or pay upon the ordered transaction. Seller,
in accordance with its normal practices, will arrange for prepaid
transportation, if appropriate, and invoice transportation charges back to
Customer. Premium transportation will be used only with Customer's concurrence.
1.8 INVOICES AND TERMS OF PAYMENT:
(a) For Products, Licensed Materials, and Services ordered by Customer on an
engineer, furnish and install (EF&I) basis, Seller shall invoice the total
amount due for Products and Licensed Materials for each such purchase order upon
the main shipment of such Products and Licensed Materials. Seller shall invoice
Customer the full amount due for engineering, installation and other Services
when Seller submits its notice of completion of installation or as soon
thereafter as practicable.
(b) In all other cases (i.e., not subject to subsection (a) above), Products
and/or Licensed Materials (including transportation charges and taxes, if
applicable) will be invoiced by Seller when shipped, or as soon thereafter as
practicable. Engineering for such Products and/or Licensed Materials will be
invoiced upon main shipment of
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Products. Installation and other Services will be invoiced as performed or as
soon thereafter as practical. Payments for all such invoices furnished by Seller
under subsections (a) or (b) of this clause 1.8 shall be made by Customer in
accordance with paragraph (c) below.
(c) Customer shall pay such invoiced amounts, less any disputed items, for
receipt by Seller within thirty (30) days of the invoice date; provided,
however, that with respect to invoices for the Services described in subsection
(a) above, if Customer notifies Seller in writing within the aforesaid thirty
(30) day payment period that the installed Products or Licensed Materials do not
perform as required for acceptance under Article 3.2 and said notice describes
in reasonable detail the nature of such non-performance (a "Deficiency Notice"),
then the thirty (30) day payment period for such invoices shall be extended for
that period of time which elapses between the date of the Deficiency Notice and
Seller's correction of the non-performance specified in the Deficiency Notice.
Delinquent payments are subject to a late payment charge at the rate of one and
one-half percent (1-1/2%) per month, or portion thereof, of the amount due (but
not to exceed the maximum lawful rate). If the claim is not resolved in favor of
Customer, then the item will be due for payment based upon the original invoice
date. Customer shall notify Seller of any disputed invoice within thirty (30)
days from the date of the invoice. Seller may apply any credit which remains
outstanding in favor of Customer to the oldest undisputed invoice which remains
in Customer's portfolio. Customer agrees to pay Seller's reasonable attorneys'
fees and other direct costs incurred by Seller in the collection of any amounts
past due hereunder.
1.9 SHIPPING AND PACKING:
Seller shall, at no additional charge, pack Products in accordance with its
standard practices for domestic shipments. Where, in order to meet Customer's
requests, Seller packs Products in other than its normal manner for domestic
shipment, Customer shall pay Seller's additional charges for such packing. No
packaging shall be returnable unless expressly stated as such to Customer prior
to delivery. Customer shall not be responsible for the state of any returnable
packaging relating to materials to be installed by Seller.
1.10 TAXES:
Customer shall be liable for and shall reimburse Seller for all taxes and
related charges, however designated, (excluding taxes on Seller's net income)
imposed upon or based upon the provision, sale, license or use of Products,
Licensed Materials or Services (if applicable). Such taxes shall be separately
listed on the invoice. Seller shall not collect the otherwise applicable state
sales tax if the front of Customer's order indicates that the purchase or
license is exempt from Seller's collection of such tax and a valid tax exemption
certificate is furnished by Customer to Seller. Seller's failure to collect
taxes in accordance herewith shall not be deemed to be an authorization to
resell Products or Services or sublicense Licensed Materials.
1.11 TITLE AND RISK OF LOSS:
Title (except as provided in the clauses USE OF INFORMATION and TITLE,
RESTRICTIONS, AND CONFIDENTIALITY) and risk of loss to Products and Licensed
Materials shall pass to Customer upon Delivery to the Customer. Customer shall
notify Seller promptly of any claim with respect to loss which occurs while
Seller has the risk of loss and shall cooperate in every reasonable way to
facilitate the settlement of any claim. For purposes of this clause, "Delivery"
shall mean the earliest of the point at which Seller or Seller's supplier or
agent turns over possession of the Product or Licensed Materials to Customer,
Customer's employee, Customer's designated carrier, Customer's warehouse,
Customer's designated site including Seller's staging site, or other Customer's
agent and not necessarily the final destination shown on the order.
1.12 PURCHASE MONEY SECURITY INTEREST:
Seller reserves and Customer agrees that Seller shall have a purchase money
security interest in Products or Licensed Materials furnished under this
Agreement until such time as Seller has been paid in full. Customer shall
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promptly execute and deliver UCC-1 financing statements and such other documents
prepared by Seller so that Seller may perfect its security interest, and Seller
shall prepare, execute and promptly file all UCC-1 financing statements, and the
necessary UCC-3 termination statements upon the effectuation of the applicable
payments. The preparation and filing of all such financing statements shall be
at the expense of Seller. Seller agrees to cooperate with Customer's lending
institutions in order to meet the respective collateral security requirements of
such institutions under the applicable financing documents, provided that no
such security requirements shall subordinate Seller's purchase money security
interest.
1.13 WARRANTY:
Seller warrants to Customer only, that (i) upon shipment Seller's
Manufactured Products (exclusive of Software) will be free from defects in
material and workmanship and will conform to Seller's Specifications for such
Products; (ii) upon shipment Software developed by Seller will be free from
those defects which materially affect performance in accordance with Seller's
Specifications, it being understood from the foregoing that the Software, as
such, will not necessarily run uninterrupted or error free but will have the
basic functionality required for the Products to function for their intended
purposes; and (iii) Services will be performed in a workmanlike manner and in
accordance with good usage and accepted practices in the community in which
Services are provided. With respect to Products or Software or partial assembly
of Products furnished by Seller but neither manufactured by Seller nor purchased
by Seller pursuant to its procurement specifications ("Vendor Items"), Seller
does hereby assign to Customer the warranties given to Seller by its vendor(s)
of such Vendor Items to the fullest extent permitted by such warranties.
SELLER'S MANUFACTURED PRODUCTS ,SOFTWARE AND SERVICES
WARRANTY PERIOD(1)
BASE PERIOD REPAIRED
NEW PRODUCT OR
PRODUCT(2) PART(3)
5ESS-Registered Trademark--2000
Switch Products (hardware only) 24 Months 6 Months
Central Office Power Equipment 24 Months 6 Months
Transmission Systems Products:
- All Transmission Products in the "2000
Product Family" 60 Months 6 Months
- DACS-IV 2000 60 Months 6 Months
- FT-2000 OC-48 60 Months 6 Months
- DDM-2000 OC-3/OC-12 60 Months 6 Months
- DDM-2000 FiberReach 60 Months 6 Months
- SLC 2000 Access System 60 Months 6 Months
- SLC 2000 MSDT 60 Months 6 Months
- SLC 96 Circuit Packs 60 Months 6 Months
- SLC Series 5 Circuit Packs 60 Months 6 Months
- T1 Repeaters 60 Months 6 Months
- DDM-1000 Circuit Packs 60 Months 6 Months
- DACS II Systems (hardware) 24 Months 6 Months
Other Transmission Products (i.e., DDM Plus, Repeater
Cases) 24 Months 6 Months
Processors Other than in Switch Systems 3 Months 2 Months
Network Cable Systems Products 12 Months 3 Months
All Other Products 2 Months 2 Months
5ESS-Registered Trademark--2000 Switch Software 12 Months 6 Months
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SELLER'S MANUFACTURED PRODUCTS ,SOFTWARE AND SERVICES
WARRANTY PERIOD(1)
BASE PERIOD REPAIRED
NEW PRODUCT OR
PRODUCT(2) PART(3)
All Transmission Software in
the "2000 Product Family" 12 Months 6 Months
Transmission Systems Software 12 Months 6 Months
All Other Software 3 Months 1 Month
1 The term "Warranty Period" means the period of time listed above which,
unless otherwise stated, commences two (2) weeks from the date of shipment of
Products or Software, or if installed by Seller, on acceptance by Customer, or
thirty (30) days from the date Seller submits its notice of completion of its
installation, whichever is sooner. With respect to Products and Software
installed by Seller, if Customer delivers to Seller a Deficiency Notice (as such
term is defined in Section 1.8(c) hereof) within thirty (30) days from the date
of Seller's notice of completion of installation, then the Warranty Period for
the non-performing Products and Software specified in the Deficiency Notice
shall commence upon Seller's correction of the non-performance. The Warranty
Period for engineering and installation Services is six (6) months which
commences on the date the Services are completed.
2 The Warranty Period for Products ordered for use in systems is that of the
initial systems or equipment except as may be otherwise noted.
3 The Warranty Period for a Product or part thereof repaired or replaced under
this Warranty is the period listed or the unexpired term of the new Product
Warranty Period, whichever is longer.
If, under normal and proper use, a defect or deficiency appears in Seller's
Manufactured Products or Software during the applicable Warranty Period and
Customer promptly notifies Seller in writing of such defect or deficiency and
follows Seller's reasonable instructions regarding return of defective or
deficient Product or Software, Seller will first attempt to repair, replace or
correct the same without charge at its manufacturing or repair facility and if
such efforts to repair or replace are unsuccessful, Seller shall provide a
refund or credit based on the original purchase price or license fee. With
respect to Seller's efforts to repair or replace in accordance with the
preceding sentence, Seller agrees to commence such efforts promptly and to
proceed diligently to effectuate such repairs and replacements as soon as
practicable. If engineering or installation Services prove not to be performed
as warranted within a six (6) month period commencing on the date of completion
of the Services, Seller will first attempt to correct the defect or non-
conforming Services and if such efforts to correct the defect or Service are
unsuccessful, Seller shall render a full or pro-rated refund or credit based on
the original charges for the Services. With respect to Seller's efforts to
correct a defect or non-conforming Service in accordance with the preceding
sentence, Seller agrees to commence such correction promptly and to proceed
diligently to effectuate such correction as soon as practicable. No Product or
Software will be accepted for repair or replacement without the written
authorization of and in accordance with instructions of Seller. Removal and
reinstallation expenses as well as transportation expenses associated with
returning such Product or Software to Seller shall be borne by Customer. Seller
shall pay the costs of transportation of the repaired or replacing Product or
Software to the destination designated by Customer (within the United States).
If Seller determines through reasonable investigation that returned Product or
Software is not defective, Customer shall pay Seller's costs of handling,
inspecting, testing and transportation and, if applicable, reasonable and
necessary travel and related expenses. In repairing or replacing any Product,
part of Product, or Software medium under this warranty, Seller may use either
new or remanufactured, reconditioned, refurbished or functionally equivalent
Products or parts which are "equivalent to new". Products or parts returned to
Seller following replacement by Seller shall become Seller's property.
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With respect to Seller's Manufactured Products which Seller has ascertained are
not readily returnable for repair, Seller, at its option, may elect to repair or
replace the Products at Customer's site. Customer, at its expense, shall make
the Products accessible for repair or replacement and restore the site after
Seller has completed its repairs or replacement; provided, however, that Seller
shall be responsible for any damage caused by Seller to the site which was not
expected or necessary to effectuate such repair or replacement.
Seller makes no warranty with respect to defective conditions or
non-conformities resulting solely from the following: Customer's modifications,
misuse, neglect, accident or abuse; improper wiring, repairing, splicing,
alteration, installation, storage or maintenance by Customer or Customer's
employees, agents or contractors; use in a manner not in accordance with
Seller's or its vendor's Specifications, or operating instructions or failure of
Customer to apply previously applicable Seller's modifications or corrections.
In addition, Seller makes no warranty with respect to Products which have had
their serial numbers or month and year of manufacture intentionally removed,
altered and with respect to expendable items, including, without limitation,
fuses, light bulbs, motor brushes and the like. No warranty is made that
Software will run uninterrupted or error free, and in addition Seller makes no
warranty with respect to defects related to Customer's data base errors unless
such errors are the fault of Seller.
THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER EXPRESS AND
IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE. CUSTOMER'S SOLE AND EXCLUSIVE REMEDY SHALL
BE SELLER'S OBLIGATION TO REPAIR, REPLACE, CREDIT, OR REFUND AS SET FORTH ABOVE
IN THIS WARRANTY. THIS EXCLUSIVE REMEDY SHALL NOT LIMIT CUSTOMER'S RIGHT TO
BRING AN ACTION FOR BREACH OF CONTRACT (INCLUDING BREACH OF THIS WARRANTY).
1.14 CHANGES IN PRODUCTS:
Prior to shipment, Seller may at any time make changes in Products or modify
the drawings and Specifications relating thereto or substitute Products of later
design, provided the changes, modifications or substitutions under normal and
proper use do not impact negatively upon quality, form, fit, or function of an
ordered Product as provided in Seller's Specifications. With respect to changes,
modifications, and substitutions which do affect the quality, form, fit, or
function of an ordered Product, Seller shall notify Customer in writing thirty
(30) days prior to their effective dates. In the event any such change is not
desired by Customer, Customer shall notify Seller within thirty (30) days from
the date of notice and Seller shall not furnish any such changed Products to
Customer on any orders in process at the ▇▇▇▇ ▇▇▇▇▇▇ is so notified.
1.15 INFRINGEMENT:
In the event of any claim, action, proceeding or suit by a third party
against Customer alleging an infringement of any United States patent, United
States copyright, or United States trademark, or a violation in the United
States of any trade secret or proprietary rights by reason of the use, in
accordance with this Agreement, of any Product or Licensed Materials furnished
by Seller to Customer under this Agreement, Seller, at its expense, will
indemnify, hold harmless and defend Customer, subject to the conditions and
exceptions stated below. Seller will reimburse Customer for any reasonable cost,
expense or attorneys' fees, incurred by Customer prior to Seller's full active
assumption, with reputable counsel reasonably acceptable to Customer, of the
defense of any such claim, and will indemnify Customer against any liability
assessed against Customer by (a) final judgment by a competent court on account
of such infringement or violation arising out of such use or (b) appealable
judgment by a competent court on account of such infringement or violation
arising out of such use in the event Seller elects not to pursue an appeal.
Following Seller's assumption of any such defense, Customer may participate in
any such defense with counsel of Customer's own choosing and at Customer's
expense provided Customer's counsel does not interfere with such defense.
If Customer's use shall be enjoined or in Seller's reasonable opinion is likely
to be enjoined, Seller will, at its expense and at its option, either (1)
replace the enjoined Product or Licensed Materials furnished pursuant to this
Agreement
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with a suitable substitute free of any infringement; (2) modify it so that it
will be free of the infringement; or (3) procure for Customer a license or other
right to use it. If none of the foregoing options are practical despite the
exercise by Seller of commercially reasonable best efforts to effectuate option
(1), (2), or (3) above, Seller will remove the enjoined Product or Licensed
Materials and refund to Customer any amounts paid to Seller therefor.
Customer shall give Seller prompt written notice of all such claims, actions,
proceedings or suits alleging infringement or violation and Seller shall have
full and complete authority to assume the sole defense thereof, including
appeals, and to settle same, provided that such settlement does not materially
impair Customer's rights to use the Products and Licensed Materials provided
under and in accordance with this Agreement in any respect. Customer shall, upon
Seller's request and at Seller's expense, furnish all information and assistance
available to Customer and cooperate in every reasonable way to facilitate the
defense and/or settlement of any such claim, action, proceeding or suit.
No undertaking of Seller under this clause shall extend to any such alleged
infringement or violation to the extent that it: (1) arises from adherence to
design modifications, specifications, drawings, or written instructions which
Seller is directed by Customer to follow, but only if such alleged infringement
or violation does not reside in corresponding commercial Product or Licensed
Materials of Seller's design or selection; or (2) arises from adherence to
instructions to apply Customer's trademark, trade name or other company
identification; or (3) resides in a product or licensed materials which are not
of Seller's origin and which are furnished by Customer to Seller for use under
this Agreement; or (4) relates to uses of Product or Licensed Materials provided
by Seller in combinations with other Product or Licensed Materials, furnished
either by Seller or others, which combination was not installed, recommended or
otherwise approved by Seller. In the foregoing cases numbered (1) through (4),
Customer will defend and save Seller harmless, subject to the same terms and
conditions and exceptions stated above, with respect to the Seller's rights and
obligations under this clause; provided, however, that Customer's responsibility
hereunder shall be limited to the extent that the infringement or violation is
proven to be attributable to subsections (1), (2), (3), or (4) above.
The liability of Seller and Customer with respect to any and all claims,
actions, proceedings or suits by third parties alleging infringement of patents,
trademarks or copyrights or violation of trade secrets or proprietary rights
because of, or in connection with, any Products or Licensed Materials furnished
pursuant to this Agreement shall be limited to the specific undertakings
contained in this clause (but shall not be subject to any dollar cap) except in
the event of a party's willful or intentional breach of its obligations to the
other party under this clause, in which case no such limitation shall apply.
1.16 CUSTOMER'S REMEDIES:
A. SUBJECT TO SECTION 1.16D BELOW, CUSTOMER'S EXCLUSIVE REMEDIES AND THE
ENTIRE LIABILITY OF SELLER, ITS AFFILIATES AND THEIR EMPLOYEES, AND AGENTS,
AND ITS SUPPLIERS FOR ANY CLAIM, LOSS, DAMAGE OR EXPENSE OF CUSTOMER OR ANY
OTHER ENTITY ARISING OUT OF THIS AGREEMENT, OR THE USE OR PERFORMANCE OF
ANY PRODUCT, LICENSED MATERIALS, OR SERVICES, WHETHER IN AN ACTION FOR OR
ARISING OUT OF BREACH OF CONTRACT, TORT, INCLUDING NEGLIGENCE, INDEMNITY,
OR STRICT LIABILITY, SHALL BE AS FOLLOWS:
1) FOR INFRINGEMENT--THE REMEDY SET FORTH IN THE "INFRINGEMENT" CLAUSE;
2) FOR THE PERFORMANCE OR NONPERFORMANCE OF PRODUCTS, SOFTWARE, AND
SERVICES OR CLAIMS THAT THEY DO NOT CONFORM TO A WARRANTY--THE REMEDY SET
FORTH IN THE APPLICABLE "WARRANTY" CLAUSE;
3) FOR TANGIBLE PROPERTY DAMAGE AND PERSONAL INJURY CAUSED BY SELLER'S
ACTS OR OMISSIONS--THE AMOUNT OF THE AWARDED DAMAGES TOGETHER WITH THE
ACTUAL OUT-OF-POCKET COSTS AND EXPENSES INCURRED BY CUSTOMER IN CONNECTION
WITH DEFENDING ANY CLAIMS OR ACTIONS BROUGHT AGAINST
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CUSTOMER AS A RESULT OF SELLER'S LIABILITY HEREUNDER; PROVIDED, HOWEVER,
THAT SELLER SHALL ALSO BE LIABLE TO CUSTOMER FOR AWARDED PUNITIVE AND
EXEMPLARY DAMAGES WHICH RESULT FROM SELLER'S TORTIOUS CONDUCT;
4) FOR EVERYTHING OTHER THAN AS SET FORTH ABOVE--THE AMOUNT OF THE DIRECT
DAMAGES INCLUDING AWARDED COUNSEL FEES AND COSTS UNDER OR ARISING OUT OF
THIS AGREEMENT SHALL NOT TO EXCEED THE GREATER OF (a) TEN PERCENT (10%) OF
THE TOTAL AMOUNT THEN INVOICED BY SELLER FOR PURCHASES MADE UNDER THIS
AGREEMENT, OR (b) $3,500,000.
B. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, HOWEVER SUBJECT
TO SELLER'S LIABILITY FOR AWARDED PUNITIVE AND EXEMPLARY DAMAGES FOR
TORTIOUS CONDUCT UNDER SECTION 1.16A(3) ABOVE, NEITHER CUSTOMER NOR SELLER,
ITS AFFILIATES AND THEIR EMPLOYEES, AND AGENTS, AND ITS SUPPLIERS SHALL BE
LIABLE FOR ANY INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES OR LOST
PROFITS, REVENUES OR SAVINGS ARISING OUT OF THIS AGREEMENT, OR THE USE OR
PERFORMANCE OF ANY PRODUCT, LICENSED MATERIALS, OR SERVICES, WHETHER IN AN
ACTION FOR OR ARISING OUT OF BREACH OF CONTRACT, TORT, INCLUDING
NEGLIGENCE, OR STRICT LIABILITY. THIS CLAUSE, 1.16(B), SHALL SURVIVE
FAILURE OF AN EXCLUSIVE OR LIMITED REMEDY.
C. EACH PARTY SHALL GIVE THE OTHER PROMPT WRITTEN NOTICE OF ANY CLAIM.
ANY ACTION OR PROCEEDING AGAINST EITHER PARTY MUST BE BROUGHT WITHIN
TWENTY-FOUR (24) MONTHS AFTER THE CAUSE OF ACTION ACCRUES.
D. NOTHING HEREIN SHALL BE CONSTRUED AS LIMITING EITHER PARTY'S RIGHT TO
BRING AN ACTION TO ENFORCE THE EXPRESS PROVISIONS OF THIS AGREEMENT.
1.17 USE OF INFORMATION:
All technical and business information in whatever form recorded which
bears a legend or notice restricting its use, copying, or dissemination or, if
not in tangible form, is described as being proprietary or confidential at the
time of disclosure and is subsequently summarized in a writing so marked and
delivered to the receiving party within thirty (30) days of disclosure to the
receiving party (all hereinafter designated "Information") shall remain the
property of the furnishing party. The furnishing party grants the receiving
party the right to use such Information only as follows: Such Information (1)
shall not be reproduced or copied, in whole or part, except for use as
authorized in this Agreement; and (2) shall, together with any full or partial
copies thereof, be returned or destroyed when no longer needed. Moreover, when
Seller is the receiving party, Seller shall use such Information only for the
purpose of performing under this Agreement, and when Customer is the receiving
party, Customer shall use such Information only (1) to order; (2) to evaluate
Seller's Products, Licensed Materials and Services; or (3) to install, operate
and maintain the particular Products and Licensed Materials for which it was
originally furnished. Unless the furnishing party consents in writing, such
Information, except for that part, if any, which is known to the receiving party
free of any confidential obligation, or which becomes generally known to the
public through acts not attributable to the receiving party, shall be held in
confidence by the receiving party. The receiving party may disclose such
Information to other persons, upon the furnishing party's prior written
authorization, but solely to perform acts which this clause expressly authorizes
the receiving party to perform itself and further provided such other person
agrees in writing (a copy of which writing will be provided to the furnishing
party at its request) to the same conditions respecting use of Information
contained in this clause and to any other reasonable conditions requested by the
furnishing party.
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1.18 LICENSE FOR LICENSED MATERIALS:
Upon delivery of Licensed Materials pursuant to this Agreement and subject
to payment of all amounts required to be paid by Customer for such Licensed
Materials and compliance with the license terms set forth in this Agreement,
Seller grants to Customer an irrevocable, perpetual, nontransferable, and
nonexclusive license to Use Licensed Materials on a Designated Processor for its
own business operations. No license is granted to Customer to sublicense such
Licensed Materials furnished by Seller. Customer shall not decompile or
disassemble Software furnished as object code to generate corresponding Source
Code. Unless otherwise agreed in writing by Seller, Customer shall not modify
Software furnished by Seller under this Agreement. If the Designated Processor
becomes temporarily inoperative, Customer shall have the right to Use the
Licensed Materials temporarily on a backup processor until operable status is
restored and processing on the backup processor is completed.
With respect to all Licensed Materials owned in whole or in party by a
third party manufacturer or licensor that are to be made available to Customer
under this Agreement ("Third Party Software"), Seller represents and warrants
that it now has existing licenses to the Third Party Software, and has the right
to grant to Customer, and hereby grants to Customer a personal, perpetual,
nontransferable, and nonexclusive license to such Software on Customer's
Designated Processor.
1.19 TITLE, RESTRICTIONS, AND CONFIDENTIALITY:
Except to the extent otherwise required in connection with the granting of
licensed hereunder, all Licensed Materials (whether or not part of Firmware)
furnished by Seller, and all copies thereof made by Customer, including
translations, compilations, and partial copies are, and shall remain, the
property of Seller. Except for any part of such Licensed Materials which is or
becomes generally known to the public through acts not attributable to Customer,
Customer shall hold such Licensed Materials in confidence, and shall not,
without Seller's prior written consent, disclose, provide, or otherwise make
available, in whole or in part, any Licensed Materials to anyone, except to its
employees having a need-to-know. Customer shall not copy Software embodied in
Firmware. Customer shall not make any copies of any other Licensed Materials
except as necessary in connection with the rights granted hereunder. Customer
shall reproduce and include any Seller copyright and proprietary notice on all
such necessary copies of the Licensed Materials. Customer shall also ▇▇▇▇ all
media containing such copies with a warning that the Licensed Materials are
subject to restrictions contained in an agreement between Seller and Customer
and that such Licensed Materials are the property of Seller. Customer shall
maintain records of the number and location of all copies of the Licensed
Materials. Customer shall take reasonably appropriate action, by instruction,
agreement, or otherwise, with the persons permitted access to the Licensed
Materials so as to enable Customer to satisfy its obligations under this
Agreement. If either (i) Customer's license does not vest for failure to pay
amounts due under Section 1.8 in connection with Licensed Materials, (ii) a
competent court or arbitration under Article 1.41 has determined Customer has
committed a material breach of license terms as to one or more specific
locations, and, as a result thereof, that Seller is entitled to terminate the
license granted hereunder as to any such specific locations, or (iii) the
Licensed Materials are no longer needed by Customer, Customer shall return all
copies of such Licensed Materials in Customer's possession or control to Seller
or follow written disposition instructions provided by Seller.
1.20 EXPORT CONTROL:
The parties acknowledge that any Products, Software, and technical
information (including, but not limited to, Services and training) provided
under this Agreement are subject to U.S. export laws and regulations any use or
transfer of such Products, Software, and technical information must be
authorized under those regulations. Customer agrees that it will not use,
distribute, transfer, or transmit the Products, Software, or technical
information (even if incorporated into other Products) except in compliance with
U.S. export regulations. If requested by Seller, Customer also agrees to sign
written assurances and other export-related documents as may be required for
Seller to comply with U.S. export regulations.
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1.21 DOCUMENTATION:
Seller shall furnish to Customer, at no additional charge, one copy of the
documentation for Products provided hereunder sufficient to operate and maintain
such Products and/or one copy of the Related Documentation for Software
furnished by Seller pursuant to this Agreement. Such documentation will be that
customarily provided by Seller to its Customers at no additional charge. Such
documentation shall be provided either prior to, included with, or shortly after
shipment of Products and/or Software from Seller to Customer. Additional copies
of such documentation are available at prices set forth in Seller's Customer
Price Lists.
1.22 CHANGES IN LICENSED MATERIALS:
Prior to shipment, Seller may at any time modify the Specifications
relating to its Licensed Materials. Seller may substitute modified Licensed
Materials to fill an order, provided the modifications, under normal and proper
Use, do not materially adversely affect the Use, function, or performance of the
ordered Licensed Materials, and Seller shall advise Customer in writing at least
fifteen (15) days prior to implementation of such changes. Unless otherwise
agreed, such substitution shall not result in any additional charges to Customer
with respect to licenses for which Seller has quoted fees to Customer.
1.23 OPTIONAL SOFTWARE FEATURES:
Software provided to Customer under this Agreement may contain optional
features which are separately licensed and priced. Customer agrees that such
optional features will not be activated without written authorization from
Seller and Customer's payment of the appropriate license fees. If, in spite of
Customer's best efforts to comply with this restriction, such features are
activated, Customer agrees to so notify Seller promptly and to pay Seller the
license fees for the activated features.
1.24 ADDITIONAL PROVISIONS FOR PRODUCT SPECIFIC LICENSED MATERIALS:
In addition to the provisions applicable to the furnishing of Licensed
Materials as set forth above in clauses "License for Licensed Materials,"
"Title, Restrictions and Confidentiality," "Documentation," and "Changes in
Licensed Materials," additional provisions regarding the furnishing of Product
specific Licensed Materials are set forth in Article II attached hereto.
1.25 COMPATIBILITY OF SELLER'S PRODUCTS AND LICENSED MATERIALS:
Seller makes no representations or warranties whatsoever that Products or
Licensed Materials will be compatible with any equipment currently or hereafter
owned by Customer or any other entity (all such equipment hereinafter for
purposes of this clause referred to as "Other Equipment"). Custom er shall
be responsible for any and all modifications or additions which may be required
to Other Equipment so that such Other Equipment operates satisfactorily with
Products or Licensed Materials furnished and installed by Seller. If Customer
requests Seller to make any such modifications or additions, Seller, at its
discretion, may elect to do so, and in such case, the modifications and
additions will be made as requested by Customer and shall be billed to and paid
for by Customer at prices determined by Seller as a separate item in addition to
any other amounts due and payable by Customer. Seller shall have no liability to
Customer for any such modifications or additions to Other Equipment except to
the extent Seller fails to follow Customer's instructions. As Customer selects
the various hardware and software components of its network, Customer may
consult with Seller regarding Customer's existing equipment and request Seller's
recommendation relating to such components. Seller will notify Customer if
Seller has actual knowledge that Products or Licensed Materials to be installed
by Seller are incompatible with Other Equipment with which such Products or
Licensed Materials are to be installed.
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1.26 PUBLICITY:
Each party shall submit to the other proposed copy of all advertising
wherein the name, trademark, code, specification or service ▇▇▇▇ of the other
party or its Subsidiaries or Affiliates is mentioned. Neither party shall
publish or use such advertising without the other's prior written approval. Such
approval shall be granted as promptly as possible (usually within ten [10]
days), and may be withheld only for good cause.
1.27 PUBLICATION OF AGREEMENT:
The parties shall keep the provisions of this Agreement and any order
submitted hereunder confidential except as reasonably necessary for performance
hereunder and except to the extent disclosure may be required by applicable laws
or regulations, in which latter case, the party required to make such disclosure
shall promptly inform the other prior to such disclosure in sufficient time to
enable such other party to make known any objections it may have to such
disclosure. The disclosing party shall take all reasonable steps to secure a
protective order or otherwise assure that the Agreement or order will be
withheld from the public record. In addition to the foregoing, Customer shall
have the right to disclose the provisions of this Agreement to Customer's
prospective lenders and investors, each of which shall be required to maintain
the confidentiality of the same in accordance with clause 1.17 of this
Agreement, and Customer shall provide to Seller the names of each party to whom
disclosed.
1.28 NOTICES:
All notices under this Agreement shall be in writing (except where
otherwise stated) and shall be addressed to the addresses set forth at the
beginning of this Agreement or to such other address as either party may
designate by notice pursuant hereto. Such notices shall be deemed to have been
given when received. Further, Seller shall provide a copy of any written notice
of material default which Seller provides to Customer to AT&T Commercial Finance
Corporation at the following address: ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
1.29 CUSTOMER RESPONSIBILITY:
Customer shall, at no charge to Seller, provide Seller with such electrical
and environmental conditions, technical information, data, technical support or
assistance as may reasonably be required by Seller to fulfill its obligations
under this Agreement, any subordinate agreement or order. If Customer fails to
provide the required conditions, technical information, data, support or
assistance, Seller shall be discharged from any such obligation until such time
as such materials or information are made available. If such delay affects
Seller's ability to meet its obligations under this Agreement, any price (or
discount, if applicable), shipment date or Services completion date quoted by
Seller and affected by such delay is subject to change.
1.30 RIGHT OF ACCESS:
Each party shall provide the other access to its facilities reasonably
required in connection with the performance of the respective obligations under
this Agreement. No charge shall be made for such access. Reasonable prior
notification will be given when access is required.
1.31 FORCE MAJEURE:
Neither party shall be held responsible for any delay or failure in
performance to the extent that such delay or failure is caused by a Force
Majeure. Each party shall promptly notify the other party of the occurrence of
a Force Majeure. If any Force Majeure occurs and results in a delay or failure
in performance, the party injured by the other's inability to perform may elect
to: (a) terminate that part of any order affected by the Force Majeure as to
Products or Licensed Materials not already shipped or Services not already
rendered if the Force Majeure continues for a period of forty-five (45) days
after notification; (b) suspend that part of any order affected by the Force
Majeure for the duration of the Force Majeure, buy, sell, obtain, or furnish
elsewhere Products or Licensed Materials to be bought,
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sold, obtained, or furnished hereunder, and deduct from any order commitment the
quantity bought, sold, obtained, or furnished or for which such commitments have
been made elsewhere; or (c) resume performance under such order once the Force
Majeure ceases with an option for the injured party to extend the delivery or
performance date up to the length of time the Force Majeure endured. Unless
written notice is given within thirty (30) days after such injured party is
apprised of the occurrence of a Force Majeure, option (c) shall be deemed
selected. For purposes hereof, Force Majeure means fires, strikes, embargoes,
explosions, earthquakes, floods, wars, water, the elements, labor disputes,
government requirements, civil or military authorities, acts of God or by the
public enemy, inability to secure raw materials or transportation facilities,
acts or omissions of carriers or suppliers, or other causes beyond its control
whether or not similar to the foregoing. Each party shall, with the cooperation
of the other, exercise all reasonable efforts to mitigate the extent of a delay
or failure resulting from a Force Majeure condition.
1.32 INDEPENDENT CONTRACTOR:
All work performed by either party under this Agreement shall be performed
as an independent contractor and not as an agent of the other, and no persons
furnished by the performing party shall be considered the employees or agents of
the other.
1.33 RELEASES VOID:
Neither party shall require releases or waivers of any personal rights from
representatives or employees of the other in connection with visits to its
premises, nor shall such parties plead such releases or waivers in any action or
proceeding.
1.34 SEVERABILITY:
If any provision in this Agreement shall be held to be invalid or
unenforceable, the remaining portions shall remain in effect. In the event such
invalid or unenforceable provision is considered an essential element of this
Agreement, the parties shall promptly negotiate a replacement.
1.35 SURVIVAL OF OBLIGATIONS:
The rights and obligations of the parties which by their nature would
continue beyond the termination, cancellation, or expiration of this Agreement,
shall survive such termination, cancellation or expiration.
1.36 NON-WAIVER:
No waiver of the terms and conditions of this Agreement, or the failure of
either party to strictly enforce any such term or condition on one or more
occasions shall be construed as a waiver of the same or of any other terms or
conditions of this Agreement on any other occasion.
1.37 ASSIGNMENT:
Except as provided below, neither party shall assign this Agreement or any
right or interest under this Agreement, nor delegate any work or obligation to
be performed under this Agreement (an "assignment"), without the other party's
prior written consent. Such consent shall not be unreasonably withheld or
delayed. Any attempted assignment in contravention of this shall be void and
ineffective. Nothing shall preclude a party from employing a subcontractor in
carrying out its obligations under this Agreement. A party's use of such
subcontractor shall not release the party from its obligations under this
Agreement.
Notwithstanding the foregoing, nothing herein shall preclude an assignment
by Customer, without the consent of Seller, to an entity controlling, controlled
by or under common control with, or which acquires or succeeds to ownership of
substantially all of the assets and operations of Customer, or to its financing
parties for collateral
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security purposes (a "Permitted Assignment"); provided, however, that (a) a
Permitted Assignment shall not include an assignment where Customer is in
material breach or default of this Agreement at such time as Customer seeks to
effectuate such assignment and such breach or default will not be cured
immediately upon giving effect to such assignment; and (b) a Permitted
Assignment shall not include an assignment by Customer to any party or entity
who (1) in the reasonable opinion of Seller, does not have sufficient financing
in place or other financial resources sufficient to consummate the purchases
contemplated under this Agreement, or (2) is a manufacturer of
telecommunications products or a provider of related services in competition
with Seller. In no event shall a Permitted Assignment operate to diminish the
rights (including, without limitation, relating to any purchase commitments) or
increase the obligations of Seller under, this Agreement or any existing
agreement between Seller and the assignee for the procurement of Products,
Licensed Materials, or Services available for procurement by Customer under this
Agreement (a "Pre-Existing Agreement") or to supersede any such Pre-Existing
Agreement. In the event of a Permitted Assignment to Customer's financing
parties for collateral security purposes, Seller shall, at no out-of-pocket cost
to Seller, cooperate with such parties in connection with the execution of
collateral assignment documents which are reasonable and customary in connection
with Customer's project financings.
For purposes of this clause, the term "Agreement" includes this Agreement,
any subordinate agreement placed under this Agreement and any order placed under
this Agreement or subordinate agreement.
1.38 TERMINATION OF ORDERS FOR CONVENIENCE:
Customer may, upon written notice to Seller, terminate an order under this
Agreement or a portion thereof except with respect to Products and Licensed
Materials that have already been shipped and Services that have already been
performed. For those Products and Licensed Materials not shipped and considered
stock items, Customer agrees that it will pay Seller an order fee equal to ten
percent (10%) of the price or license fee for such items. For those Products and
Licensed Materials not shipped and considered customized or non-stock items,
Customer agrees to pay a fee based upon Seller's incurred expenses (after
adjustment for recoveries and/or salvage value, if any), including documented,
associated general and administrative expenses plus a profit on actual work
incurred. For Services in process, Customer agrees to pay for all Services
rendered to date, plus Seller's incurred expenses, including a reasonable
profit, for those Services ordered by Customer and subsequently terminated.
Customer may issue "holds" on orders or suspend performance under this
Agreement, in whole or in part, with Seller's prior written consent and upon
terms that will compensate Seller for any loss, damages, or expenses.
1.39 TERMINATION FOR BREACH:
In the event either party is in material breach or default of the terms of
this Agreement and such breach or default continues for a period of forty-five
(45) days after the receipt of written notice, then the party not in breach or
default shall have the right to terminate this Agreement without any charge,
obligation or liability except for Products or Licensed Materials already
delivered and Services already performed. The party not in breach or default
shall provide full cooperation to the other in every reasonable way to
facilitate the remedy of the breach or default hereunder within such forty-five
(45) day period.
1.40 APPLICABLE LAW:
The construction and interpretation of, and the rights and obligations of
the parties pursuant to this Agreement, shall be governed by the laws of the
State of New York without reference to principles of conflicts of law.
1.41 ARBITRATION; NO WORK STOPPAGE:
If a dispute arises out of or relates to this Agreement, or its breach, the
parties agree to submit the dispute to a sole mediator selected by the parties
or, at any time at the option of a party, to mediation by the American
Arbitration Association ("AAA"). If not thus resolved, it shall be referred to
arbitration by the parties within thirty (30) days of the mediation governed by
the United States Arbitration Act, and judgment on the award may be entered in
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any court having jurisdiction. Any such arbitration shall proceed before three
(3) arbitrators. The party invoking arbitration (the "Claimant Party") shall
notify the other party (the "Respondent Party") in writing (i) setting forth its
basic position in the dispute, (ii) requesting the Respondent Party promptly to
appoint its arbitrator and to notify the Claimant Party of such person's
identity. The Respondent Party shall within thirty (30) days thereafter appoint
its own arbitrator and immediately advise the Claimant Party in writing of the
identity of the arbitrator. If the Respondent Party has not notified the
Claimant Party within the thirty (30) days of the identity and appointment of
its arbitrator, such arbitrator shall thereupon, at the request of the Claimant
Party, be promptly appointed in accordance with the rules of the U.S.
Arbitration Act.
The two (2) arbitrators so appointed shall, within fifteen (15) calendar
days after the date as of which they have both been identified, select any
person agreeable to both of them to serve as the third arbitrator and chairman.
If the two (2) arbitrators appointed on behalf of the respective parties fail to
agree, as provided above, such third arbitrator shall promptly be appointed in
accordance with said rules. The arbitrators may determine issues of
arbitrability, but may not award punitive damages or limit, expand or otherwise
modify the terms of this Agreement. The parties, their representatives, other
participants and the mediator and arbitrators shall hold the existence, content
and result of mediation and arbitration in confidence.
Subject to Seller's rights to hold, delay shipment, and/or reject any order
for the specific reasons identified in Article 1.5 of this Agreement, Seller
agrees not to stop work being performed hereunder during the pendency of a good
faith dispute between the parties.
1.42 LIABILITY AND INDEMNIFICATION:
Without limiting Seller's intellectual property indemnity under clause
1.15, both parties agree to indemnify, defend and hold harmless the other party,
any of its affiliated companies, and all of their respective directors,
officers, employees, agents, representatives, servants, successors and assigns
("Indemnitees"), from and against all actions, causes of action, claims,
administrative proceedings, and demands, and all losses, liabilities, judgments,
decrees, fines, penalties, damages, obligations, expenses, amounts paid in
settlement and investigation and costs and charges of any kind, including but
not limited to, attorney's and investigation fees, including such fees incurred
to enforce this clause (collectively, "Claims"), relating in any way whatsoever
to, or arising from the following:
(1) any Claims involving any failure by either party or any of its
affiliates to comply with any law, statute, code, ordinance, regulation, rule or
order of any governmental or quasi-governmental body, in the performance of
either party's responsibility under this Agreement;
(2) any Claims on account of (i) injury to or death of persons or (ii)
damages to or loss of real or tangible personal property arising directly or
indirectly out of either party's acts or omissions under this Agreement;
(3) all taxes and fees, penalties and interest payable thereon, payable by
either party in connection with this Agreement;
(4) all laborers', mechanics' or materialmen's liens upon Customer's
facilities and/or any property of Customer arising out of Services performed by
Seller or by its subcontractors in connection with this Agreement.
1.43 INSURANCE:
Both parties shall maintain during the term of this Agreement the following
insurance coverage as well as all other insurance required by law in the
jurisdictions where the work is performed: (1) Workers' Compensation and
related insurance as required by law; (2) employer's liability insurance with a
limit of at least five hundred thousand ($500,000) dollars for each occurrence;
(3) commercial general liability insurance with a limit of at least one million
($1,000,000) dollars combined single limit for bodily injury and property damage
liability per occurrence; and (4) automobile liability insurance with limit of
at least one million ($1,000,000) dollars combined single limit for bodily
injury
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and property damage for any one occurrence. Each party shall furnish prior to
the start of work, if requested by the other, certificates or adequate proof of
the insurance required by this clause. Each party shall notify the other in
writing at least thirty (30) days prior to cancellation of, or any material
change in the policy. Notwithstanding the above, Seller shall have the option
where permitted by law to self-retain any or all of the forgoing risks.
1.44 COMPLIANCE WITH LAWS
Seller and Customer agree to comply with all applicable laws, statutes,
regulations, and codes of all governmental authorities having jurisdiction in
connection with the performance by the parties of their respective obligations
and duties under this Agreement.
ARTICLE II
ADDITIONAL PROVISIONS FOR LICENSED MATERIALS
GENERAL: The provisions of this Article II also apply to the granting of
licenses by Seller to Customer for 5ESS-Registered Trademark- Switch Licensed
Materials, and Transmission Systems Licensed Materials.
5ESS SWITCH LICENSED MATERIALS
2.1 ADDITIONAL RIGHTS IN SOFTWARE:
(a) TRANSFER OF 5ESS SWITCH SOFTWARE RIGHT-TO-USE: Customer may transfer
its right-to-use 5ESS Switch Software furnished under this Agreement
without the payment of an additional right-to-use fee by transferee,
except where size sensitive units are a factor. Such transfer can be
made to an end user for their own internal use, but not to competitors
of Seller in the business of manufacturing comparable systems and only
under the following conditions:
(i) Such Software shall be Used only within the United States;
however, Seller will not unreasonably withhold its consent to
Use outside the United States provided the proprietary
information associated with the Use can be adequately
protected;
(ii) Except as otherwise provided in the Agreement, the right to
Use such Software may be transferred only together with the
5ESS Switch Product with which Customer has a right to Use
such Software, and such right to Use the Software shall
continue to be limited to Use with such Product;
(iii) Before any such Software shall be transferred, Customer shall
notify Seller of such transfer and the transferee shall have
agreed in writing (a copy of which will be provided to Seller
at its request) to keep such Software in confidence and to
corresponding conditions respecting Use of Licensed Materials
as those imposed on Customer; and
(iv) Within the United States, the transferee shall have the same
right to Software warranty or Software maintenance for such
Software as the transferor, provided the transferee continues
to pay the fees, if any, associated with such Software or
Software maintenance.
(b) RELOCATION OF 5ESS SWITCH SOFTWARE: Upon advance written notice to
Seller, Customer may remove 5ESS Switch Software or optional feature
packages, for which Customer has the right to Use, from one
Customer-owned 5ESS Switch Product and relocate them to another
Customer-owned 5ESS Switch Product within the same company as Customer
(or to an Affiliate or Subsidiary of Customer, with Seller's prior
written consent which shall not be unreasonably withheld or delayed).
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Customer shall not be required to pay additional right-to-use fees as
a result of such relocation, except where size sensitive units are a
factor. Seller may charge Customer for Services requested by Customer
in support of such relocation. Such Software shall not be Used or
transferred to Customer's Affiliate that is a manufacturer of
telecommunication products in direct competition with Seller.
(c) RIGHTS TO SELLER'S 5ESS SWITCH SOFTWARE DEVELOPMENT INFORMATION: If
Seller ceases to maintain a standard, supported version of Software
for the 5ESS Switch Product furnished pursuant to this Agreement, and
these support services are not available from another entity, then
Seller shall furnish Customer, under a suitable confidentiality
agreement, Seller's then existing Software Source Code, Software
development programs, and associated documentation for such standard
version to the extent necessary for Customer to maintain and enhance
for its own use the standard version of that Software for which it has
the right to Use.
2.2 RELATED DOCUMENTATION:
Seller will provide to Customer at no charge one (1) copy each of the most
recent text and drawing CD-ROM or one (1) login to the 5ESS Switch Documentation
Dial-Up Service for each new 5ESS-Registered Trademark--2000 Switch site. No
documentation will be provided to RSMs or ORMs. In addition, Seller will
provide updates at no charge to the host/standalone site for a period of two (2)
years following Switch turnover. After the initial two (2) year update period,
Customer may purchase an update subscription at the standard subscription rate.
TRANSMISSION SYSTEMS LICENSED MATERIALS
2.3 DEFINITIONS:
In addition to the definitions in Article I of this Agreement, the
following terms, for purposes of this Article II, shall have the meanings
indicated below as to Transmission Systems Licensed Materials:
(a) "Delivery Date" means the date by which all deliverables ordered by
Customer are delivered to the site designated by the Customer, and
(b) "Installation Complete Date" means the date on which Transmission Systems
Software is installed by Seller at the site designated by the Customer and
ready for Use by Customer.
2.4 ADDITIONAL RIGHTS IN TRANSMISSION SYSTEMS SOFTWARE:
(a) Upon thirty (30) days advance written notice, Customer may relocate any
Software permanently to a new processor of Customer. This new processor
shall then become the Designated Processor in lieu of the former Designated
Processor.
(b) Customer may retain an archival copy of the Software for as long as such
Software is relevant to Customer's operations.
2.5 INSTALLATION OF TRANSMISSION SYSTEMS SOFTWARE:
(a) Where Customer is responsible for Software installation, Seller's sole
responsibility is to deliver the Software to Customer on or before the
scheduled Delivery Date agreed to by Seller. However, if the order
specifies that Seller is responsible for such installation, Seller shall
deliver the Software to Customer in sufficient time for it to be installed
on or before the scheduled Installation Complete Date agreed to by Seller,
and Seller shall complete its installation and associated testing on or
before such date.
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(b) Where Customer has assumed responsibility for the installation of newly
licensed Software, Seller will, at Customer's request and without charge,
provide for the first such installation a reasonable level of technical
assistance when Customer encounters installation difficulties. For all
subsequent installations of such Software by Customer, Seller reserves the
right to charge Customer for any technical assistance provided in response
to Customer's request for assistance.
ARTICLE III
PROVISIONS APPLICABLE TO ENGINEERING,
INSTALLATION, AND OTHER SERVICES
GENERAL: The provisions of this Article III additionally apply to the
furnishing by Seller of Services to Customer. Such Services include, but are not
limited to, (1) engineering Services such as preparation of equipment
specifications, configuration, preparation and updating of office records, and
preparation of a summary of material not specifically itemized in the order; (2)
installation Services such as installation, testing of the equipment on a
standalone basis, equipment removal, and cable mining; and (3) other Services
such as repairs. Services shall be performed by Seller in accordance with its
standard practices.
3.1 CONDITIONS OF INSTALLATION AND OTHER SERVICES PERFORMED ON CUSTOMER'S SITE:
ITEMS PROVIDED BY CUSTOMER
Customer will be responsible for furnishing the following items (as required by
the conditions of the particular installation or other on-site Service) at no
charge to Seller and these items are not included in Seller's price for the
Services. Should Seller incur expense as a result of Customer's failure to
provide any of these items, additional billing will be rendered to and paid by
Customer.
ACCESS TO BUILDING AND WORK SITE - Allow employees of Seller and its
subcontractors free access to the portion of Customer's premises and facilities
necessary to render Services at all hours during the scheduled Service or at
such other times as are requested by Seller. Customer shall obtain for Seller's
and its subcontractors' employees any necessary identification and clearance
credentials to enable Seller and its subcontractors to have access to the work
site.
ENVIRONMENTAL CONDITIONS - Take such action as may be necessary to insure that
the premises on which the Services will be provided will be dry and free from
dust and Hazardous Materials, including but not limited to asbestos, and in such
condition as not to be injurious to Seller's or its subcontractors' employees or
to the Products to be installed. Prior to commencement of the Services and
during the performance of the Services, Customer shall, if requested by Seller,
provide Seller with sufficient data to assist Seller or its subcontractor in
evaluating the environmental conditions at the work site (including the presence
of Hazardous Materials). The price quoted by Seller for Services does not
include the cost of removal or disposal of the Hazardous Materials from the work
site. Customer is responsible for removing and disposing of the Hazardous
Materials, including but not limited to asbestos, prior to commencement of
Services.
SENSITIVE EQUIPMENT - Prior to commencement of Services, inform Seller of the
presence of any sensitive equipment at the work site (e.g., equipment sensitive
to static electricity or light).
REPAIRS TO BUILDINGS - Prior to Services start date, make such alterations and
repairs as are necessary for proper installation of Products.
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BUILDING READINESS - Prior to Services start date, provide hoisting and hauling
services, furnish suitable openings in buildings to allow Products to be placed
in position, and provide necessary openings and ducts for cable and conductors
in floors and walls as designated on engineering drawings furnished by Seller.
At least twelve (12) weeks prior to the Services start date, Seller shall
provide such drawings to Customer. To the extent required for the performance of
the Services, Customer shall fireproof (with steel covers) all unopened paths
throughout the building.
SURVEYS - Prior to Services start date, furnish surveys (describing the physical
characteristics, legal limitations, and utility locations for the work site) and
a legal description of the site.
ELECTRICAL CURRENT, HEAT, LIGHT, AND WATER - Provide electric current for
charging storage batteries and for any other necessary purposes with suitable
terminals where work is to be performed; provide temperature control and general
illumination (regular and emergency) in rooms in which work is to be performed
or Products stored, equivalent to that ordinarily furnished for similar purposes
in a working office; provide exit lights; provide water and other necessary
utilities for the proper execution of Services.
BUILDING EVACUATION - Prior to Services start date, provide building evacuation
plans in case of a fire or other emergency.
CEILING INSERTS - Provide ceiling inserts as required using Seller's standard
spacing arrangement for ceiling support equipment.
MATERIAL FURNISHED BY CUSTOMER - Unless expressly stated to the contrary,
Seller's prices do not include costs for any Customer furnished material nor
does it include any Seller charges for engineering, installation, modification,
or repair Services to Customer furnished material. New or used material
furnished by Customer shall be in such condition that it requires no repair and
no adjustment or test effort in excess of that normal for new equipment.
Customer assumes all responsibility for the proper functioning of such material.
Customer shall also provide the necessary information for Seller to properly
install such material. Seller upon discovering any problems with the
functioning of any such material or adequacy of such information, will promptly
notify Customer so that Customer can take the appropriate remedial action.
TOILET FACILITIES AND EYEWASH STATION - Provide proper and easily accessible
toilet facilities and supplies, such as towels and soap, in buildings in which
Services are in progress. Where temporary facilities are required, Customer will
provide suitable, portable facilities including supplies and custodial services.
Provide emergency eyewash station in power room near battery stands.
FLOOR SPACE AND STORAGE FACILITIES - Provide, during progress of the Services,
suitable and easily accessible floor space and storage facilities (a) to permit
storing major items of Products and other material closely adjacent to where
they will be used; (b) for administrative and luncheon purposes; (c) for
Seller's and its subcontractors' employees' personal effects; and (d) for tools
and property of Seller and its subcontractors. Where the Services are to be
performed outside of a building or in a building under construction, Customer
shall, in addition to the above requirements, as appropriate, permit or secure
permission for Seller and its subcontractors to maintain at the work site,
storage facilities (such as trailers) for Products, material, tools, and
equipment needed to complete the Services.
EASEMENTS, PERMITS, AND RIGHTS OF WAY - Prior to Services start date, provide
all rights-of-way, easements, licenses to come upon land to perform the
Services; permits and authority for installation of Products and other material;
permits for opening sidewalks, streets, alleys, and highways; and construction
and building permits.
WATCH SERVICE - Provide normal security necessary to prevent admission of
unauthorized persons to building and other areas where installation Services are
performed and to prevent unauthorized removal of the Products and other
materials. Seller will inform Customer as to which storage facilities at the
work site Seller will keep locked. Such storage facilities will remain closed to
Customer's building surveillance.
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USE OF AVAILABLE TESTING EQUIPMENT - Customer shall make available to Seller the
maintenance test facilities which are embedded in equipment to which the Product
being installed will be connected or added. Seller's use of such test equipment
shall not interfere with Customer's normal equipment maintenance functions.
HAZARDOUS MATERIALS CLEANUP - At the conclusion of the Services, Customer shall
be responsible for the cleanup, removal, and proper disposal of all Hazardous
Materials present at Customer's premises unless such hazardous materials were
brought to the site by Seller, in which case, Seller shall be responsible for
the hazardous materials cleanup, removal, and proper disposal.
ACCESS TO EXISTING FACILITIES - Customer shall permit Seller reasonable use of
such portions of the existing plant or equipment as are necessary for the proper
completion of such tests as require coordination with existing facilities. Such
use shall not interfere with the Customer's normal maintenance of equipment.
GROUNDS - Customer shall provide access to suitable and isolated building ground
as required for Seller's standard grounding of equipment. Where installation is
outside or in a building under construction, Customer shall also furnish
lightning protection ground.
REQUIREMENTS FOR CUSTOMER DESIGNED CIRCUITS - Customer shall furnish information
covering the proper test and readjust requirements for apparatus and
requirements for circuit performance associated with circuits designed by
Customer or standard circuits modified by Customer's drawings.
STANDBY ENGINE/ALTERNATOR FACILITIES - Customer shall provide suitable fuel,
storage, gas, water, antifreeze, sewer, and exhaust facilities as required with
piping terminating within the building and within ten (10) feet of the location
of the engine/alternator to be installed, or terminating within the engine room
if engine/alternator is housed in a separate room. If Seller tests the
engine/alternator outdoors, Customer shall also provide lightning protection
ground.
CROSS-CONNECTING MAIN DISTRIBUTING FRAMES AND INSTALLING HEAT COILS - Customer
shall install such cross-connections and heat coils.
CLEARING EQUIPMENT FOR MODIFICATIONS - Customer shall remove cross-connections,
transfer service on trunks and sundry working equipment, and make other
arrangements required to permit Seller to modify existing plant.
DESIGNATION STRIPS - Customer shall number all ▇▇▇▇ designation strips described
in job requirements.
FIRE PROTECTION APPARATUS - Customer shall install the permanent fire protection
apparatus and furnish such temporary apparatus as may be necessary for the
protection of the Product and other equipment stored prior to installation.
BATTERY ROOM VENTILATION - Customer shall provide the required ventilation for
battery rooms or areas.
HOUSE SERVICE PANEL - Customer shall provide electric power from the Customer's
service panel to the Seller's power board and shall run all leads between said
service panel and power board.
THROUGH TESTS AND TRUNK TESTS - Customer shall make required through tests and
trunk tests to other offices after Seller provides its notice of completion or
notice of advanced turnover.
ITEMS TO BE FURNISHED BY SELLER
The following items will be furnished by Seller (if required by the conditions
of the particular Services) and the price thereof is included in Seller's price
for Services:
PROTECTION OF EQUIPMENT AND BUILDINGS - Seller shall provide adequate protection
for Customer's equipment and buildings during the performance of the Services in
accordance with Seller's standard practices.
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METHOD OF PROCEDURE - Seller shall prepare a detailed Method of Procedure
("MOP") before starting work on live equipment and provide Customer a reasonable
lead time under the circumstances for review and mutual discussion prior to the
intended implementation date. Customer shall review the MOP and any requested
changes shall be negotiated. Customer shall give Seller written acceptance of
the MOP prior to start of this work.
POWER CIRCUIT - Seller shall install power conduit and wire as are necessary to
complete the Service.
FRAME AND AISLE LIGHTING - Seller shall install conduit, wire, fixtures, and
other necessary material for frame and aisle lighting as described in Customer's
job requirements.
FIREPROOFING - Seller shall fireproof (with steel covers) all openings it makes
in the building in the course of providing the Services.
RESTORATION - Where it is necessary in the performance of the Services to open
sidewalks, driveways, curbing, alleys, streets, or other property, Seller shall
restore said property to at least its former condition.
CROSS-CONNECTIONS OTHER THAN TO OUTSIDE CABLE TERMINATIONS - Seller shall run
cross-connections in accordance with the Customer's cross-connection list.
THE FOLLOWING ITEMS MAY BE FURNISHED BY SELLER IF REQUESTED BY CUSTOMER, BUT
CUSTOMER WILL BE BILLED AND SHALL PAY FOR THEM IN ADDITION TO SELLER'S STANDARD
OR FIRM QUOTED PRICE FOR SERVICES:
PROTECTION OF BUILDINGS AND EQUIPMENT - Seller may provide protection of
buildings and equipment in accordance with special practices of Customer
differing from Seller's standard practices.
READJUSTING APPARATUS - Seller may provide readjustment (in excess of that
normally required on new apparatus) of apparatus associated with relocated or
rewired circuits.
RERUNNING CROSS-CONNECTIONS - Seller may rerun permanent cross-connections in
accordance with revised cross-connection lists furnished by Customer.
HANDLING, PACKING, TRANSPORTATION, AND DISPOSITION OF REMOVED AND SURPLUS
CUSTOMER EQUIPMENT - Seller may pack, transport, and dispose of surplus and
removed Customer equipment as agreed by the parties.
PREMIUM TIME ALLOWANCES AND NIGHT SHIFT BONUSES - Seller may have its Services
personnel work premium time and night shifts to the extent that Seller may deem
such to be necessary to effect the required coordination of installing and
testing operations or other Services because of Customer's requirements;
provided, however, that there shall be no additional charge for any overtime
work that is required for Seller to complete the Services in the time frame
agreed to by the parties with respect to any accepted order, unless such
schedule has been affected by acts by or omissions of Customer.
EMERGENCY LIGHTING SYSTEM - Seller may provide new emergency lighting system
(other than the original ceiling mounted stumble lighting) to satisfy
illumination and safety needs of Products of certain heights.
3.2 ACCEPTANCE OF INSTALLATION:
At reasonable times during the course of Seller's installation, Customer,
at its request may, or upon Seller's request shall, inspect completed portions
of such installation. Upon Seller's further request, and upon sufficient notice
to Customer, Customer shall observe Seller's testing of Products and Licensed
Materials being installed to determine that such testing and the test results
are in accordance with Seller's 5ESS-Registered Trademark--2000 Installation &
Test Handbook, if applicable, or such other Installation & Test Handbook of
Seller for the Product or Licensed Materials being installed.
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The job shall be considered complete and ready for acceptance by Customer when
Products and Licensed Materials have been installed and tested prior to
integration into the network by Seller in accordance with its standard
procedures, and Seller represents such Products and Licensed Materials to be in
working order. Customer may observe Seller's such testing of Products and
Software being installed to determine that such testing and the test results are
in accordance with Seller's standard procedures. Upon completion of the
installation, Seller will submit to Customer a notice of completion or, if
Customer has elected advance-turnover of subsystems, a notice of completion of
advance-turnover.
Customer shall promptly make its final inspection of substantial
conformance with the Specifications and shall exercise all reasonable efforts to
expedite acceptance of the job. Seller will promptly correct any defects for
which it is responsible. If Customer discovers that any Product or Software
installed by Seller is not acceptable as a result of its failure to
substantially conform to the Specifications, it shall advise Seller as promptly
as possible (followed up in writing if originally advised orally) of the nature
of the problem. In such event the parties shall cooperate in every reasonable
respect to reach a timely and appropriate solution for Seller to correct the
identified problem. Depending on the circumstances, such solution may include a
requirement that Seller accelerate its activities or deploy additional resources
to correct such deficiency, minimizing to the extent possible adverse impact on
the overall schedule. The cost to be borne to correct such problem shall be the
responsibility of Seller, except as otherwise agreed between the parties. The
job will be considered as fully accepted unless Seller receives notification to
the contrary within thirty (30) days after submitting its notice of completion.
Not withstanding the foregoing, if Customer places the Products and/or Licensed
Materials into commercial service, such action will constitute Customer's
acceptance.
3.3 SITE PREPARATION:
Where Services are to be performed by Seller, Customer shall be responsible
for insuring that the premises where the work is to be performed are accessible
to Seller and ready and suitable for the Services to be performed in accordance
with Seller's site-preparation conditions. Such conditions include, but are not
limited to, (a) site readiness; and (b) access to adequate storage space,
working space, personal facilities, heat, light, ventilation, telephone,
electrical current, and outlets, all provided within a reasonable distance of
the area where the work is to be performed. A reasonable period of time prior to
the commencement of Services Seller and Customer will perform a mutual
inspection and walk-through of Customer's premises to mutually determine the
necessary building repairs and modifications, including fire protection, that
will be necessary to effectuate the Services. Seller's representative shall
have the right to inspect the site prior to Services start date to confirm
compliance of the site to Seller's site-preparation conditions. Such site
inspection may include, without limitation, a full building grounding
inspection, existing power plan, and emergency facilities inspection. The cost
for Seller to conduct one (1) site survey will be included in the Seller's quote
for engineering and installation Services. Seller's representatives will
provide Customer with a site preparation list and recommended solutions to
existing site-related problems and deficiencies discovered by Seller during
Seller's inspection. Should Customer fail to comply with the site-preparation
conditions after Seller provides Customer notice, Seller may perform such work
or furnish such items and charge Customer for them in addition to the prices
otherwise charged by Seller for such Services.
To the extent Customer reasonably requests Seller to deviate from Seller's
then-current specifications or methods for site preparation, site environment,
utilities or installation, Seller may install Seller's 5ESS-Registered
Trademark--2000 Switch Products, Transmission Products and Power Products at
Customer's site provided that Customer agrees to fully indemnify and hold
harmless Seller from and against any losses, damages, claims, demands, suits and
liabilities (including reasonable attorneys' fees) that arise out of, or result
from injuries or death to persons or damage to property or other claims or
demands of any kind (including Workers Compensation claims and warranty) caused
or alleged to be caused by Seller proceeding with installation of such Products.
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3.4 WORK OR SERVICES PERFORMED BY OTHERS:
Work or Services performed at the site by Customer or its other vendors or
contractors shall not unreasonably interfere with Seller's performance of
Services. Seller shall have no responsibility or liability with respect to such
work or Services performed by others. If Customer or its other vendors or
contractors fail to timely complete the site readiness or if Customer's or its
other vendors' or contractors' work interferes with Seller's performance, the
scheduled completion date of Seller's Services under this Agreement shall be
extended as reasonably necessary to compensate for such delay or interference.
ARTICLE IV
ENTIRE AGREEMENT
4.1 ENTIRE AGREEMENT:
The terms and conditions contained in this General Agreement, together with
the Appendices and attachments hereto supersede all prior oral or written
understandings between the parties with respect to the subject matter hereof and
constitute the entire agreement between the parties with respect to such subject
matter. The preprinted terms and conditions on Customer's purchase orders or
Seller's sales forms are deleted. The typed or handwritten provisions of an
order which are consistent with the terms of this General Agreement along with
the terms of this General Agreement shall constitute the entire Agreement
between the parties relating to said order. Terms shall not be modified or
amended except by a writing signed by authorized representative of both parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives on the date(s) indicated.
KMC TELECOM INC. KMC TELECOM II, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------ --------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President Title: President
Date: September 24, 1997 Date: September 24, 1997
LUCENT TECHNOLOGIES INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Sales Director
Date: September 24, 1997
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Contract No.: LNM970313MP
APPENDIX A
A-1.1 SCOPE OF APPENDIX A
This Appendix A (hereinafter "Appendix") shall govern any purchase order placed
by Customer during the Term for Seller's 5ESS-Registered Trademark--2000
Products, Transmission Systems Products, Power System Products and related
Licensed Materials. This Appendix A is issued pursuant to and incorporates the
non-conflicting terms and conditions of the General Agreement. In the event of
any conflict or inconsistency between the terms of this Appendix and the terms
of the General Agreement, the terms of this Appendix shall prevail.
A-1.2 DEFINITIONS
In addition to the definitions in Article I of this Agreement, the following
terms shall have the meanings indicated below as to the Products and Licensed
Materials described herein:
(a) "5ESS-Registered Trademark--2000 Products" means the 5ESS-Registered
Trademark--2000 Switch, Growth and related Licensed Materials including,
without limitation, Base Software.
(b) "5ESS-Registered Trademark--2000 Switch" means any 5ESS-Registered
Trademark--2000 Switch system (including the 5ESS-Registered
Trademark--2000 Compact Digital Exchange ("CDX") and 5ESS-Registered
Trademark--2000 Very Compact Digital Exchange ("VCDX")). With the exception
of the VCDX, a 5ESS-Registered Trademark--2000 Switch contains at a
minimum, an Administrative Module ("AM"), Communications Module ("CM"), and
at least one (1) Switch Module, and any such Switch can act as a host for
Optically Remote Modules ("ORMs"), Remote Switch Modules ("RSMs") and/or
the Extended Switch Modules ("EXMs"). The VCDX contains a Sun Workstation
and one (1) Switch Module.
(c) "Base Software" means the platform upgrade package for the 5ESS-Registered
Trademark--2000 Switch.
(d) "Growth" means any hardware or Software required to support the expansion
of any 5ESS-Registered Trademark--2000 Switch which may include, without
limitation, any ORMs, RSM, or EXMs not purchased with the associated
5ESS-Registered Trademark--2000 Switch.
(e) "Initial Switch" means the first 5ESS-Registered Trademark--2000 Switch
furnished by Seller under this Appendix for deployment in a particular
geographic area (other than an area in which a Seller furnished
5ESS-Registered Trademark--2000 Switch already exists).
(f) "List Price" means Seller's global list price in effect at the time of
order placement.
(g) "Peripherals" means hardware and/or Software extensions added subsequent to
the installation of the Initial Switch or Switch Module.
(h) "Power System Products" means batteries, Cabinetized Power Systems ("CPS"),
Evolutionary Control Systems ("ECS"), power plant products and other
manufactured (FE class) or other purchased (FF class) power Products.
(i) "Product Manufacturing Information" means manufacturing drawings and
specifications of raw materials and components, including part
manufacturing drawings and specifications covering special tooling and the
operation thereof, and a detailed list of all commercially available parts
and components purchased by Seller on the open market disclosing the part
number, name and location of the supplier, and price lists.
(j) "Remote Switch Module ("RSM")" means either an RSM (metallic connection),
an ORM or an EXM located away from the host site.
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Contract No.: LNM970313MP
(k) "Repair Parts" means new, remanufactured, reconditioned, refurbished, or
functionally equivalent parts for the maintenance, replacement, and repair
of Products sold pursuant to this Agreement.
(l) "Switch Module" means a Module Control/Time Slot Interchange Unit along
with a number of Peripheral units and related Software added to an embedded
5ESS-Registered Trademark--2000 Switch, 5ESS-Registered Trademark--2000 CDX
Switch or to an existing Remote Switch Module site.
(m) "Total Paid Purchases" means Customer's purchases of Seller's Products and
related Licensed Materials only, for which Seller has received payment.
(n) "Transmission Systems" means the Seller's SONET Transmission Systems
Products, such as DDM-2000 OC-1 Fiber Reach Multiplexer, DDM-2000 OC3
Multiplexer, DDM-2000 OC-12 Multiplexer, or FT-2000 OC-48 Lightwave; Access
Systems, such as SLC-Registered Trademark--2000 Access System,
SLC-Registered Trademark--2000 MSDT, or SLC-Registered Trademark--Series 5
Carrier System; and DACS II and DACS IV-2000 Systems.
A-1.3 CUSTOMER PURCHASE COMMITMENT
In consideration for the discounts, allowances, and incentives set forth herein,
Customer agrees to procure directly from Seller a minimum of eighty-eight
million ($88,000,000) dollars of Seller's Products and related Licensed
Materials during the Term.
At the end of the first twelve (12) months of the Term, Seller will evaluate
Customer's actual Total Paid Purchases procured through the time of evaluation.
If Customer's Total Paid Purchases is less than thirty million ($30,000,000)
dollars during the first twelve (12) months of the Term, or less than sixty
million ($60,000,000) dollars during the first twenty-four (24) month period of
the Term, Seller reserves the right to discontinue or adjust accordingly all
discounts, allowances and/or incentives set forth herein for all subsequent
orders placed by Customer.
A-1.4 TERMS OF DISCOUNT
Any purchase orders placed pursuant to this Appendix shall reference Contract
Number LNM970313MP to qualify for the discounts incorporated herein. During the
Term, all discounts shown in this Appendix are applicable to Seller's Products
and related Licensed Materials listed herein only and are not applicable to
related Services such as engineering and installation. Such discounts shall be
applied to Seller's List Price in effect at the time of order receipt and will
be held firm for three (3) years after the Effective Date of this Agreement.
Discounts set forth in this Appendix will apply to all purchase orders requiring
Seller's then-current standard delivery interval. For the Products and related
Licensed Materials specified herein, Seller agrees to hold its List Price firm
for eighteen (18) months after the Effective Date of this Agreement.
A-1.5 NETWORK STANDARDIZATION
Customer agrees to standardize its switch network exclusively on Seller's
5ESS-Registered Trademark--2000 Switch Systems Products and Transmission Systems
Products during the Term, such that in the event Customer requires any equipment
and/or software which is functionally comparable to Seller's Products and
related Licensed Materials available for purchase under this Appendix, then
Customer agrees to purchase all of its requirements for such equipment and
software from Seller. Notwithstanding the foregoing, the requirements of this
Section A-1.5 shall not apply to any entity acquired by or merged with Customer
after the effective date if and only to the extent such acquired or merged
entity is bound by a pre-existing contract with a third party vendor which
prohibits such entity from procuring from Seller as set forth above.
If Customer procures functionally comparable equipment and/or software from
another supplier during the Term in breach of the provisions of this Section
A-1.5, Seller may, in addition to all other rights and remedies available to
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Contract No.: LNM970313MP
Seller under law, equity, or otherwise, discontinue any and all discounts herein
and may enter into negotiations with Customer on a new pricing discount
structure.
A-1.6 CUSTOMER FORECASTS
Beginning thirty (30) days from the Effective Date, Customer will submit written
forecasts of its planned purchases. Such forecasts shall include type(s),
quantities and location(s) of planned purchases, and such other information as
may be agreed upon by the parties. The forecast will be updated monthly, and
shall provide a twelve (12) month rolling view of prospective monthly purchases
of Products, Licensed Materials and Services. Customer shall submit such
forecasts to Seller's account executive at the address listed below, or such
other address as is hereinafter specified by Seller:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Account Executive
Lucent Technologies Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Customer will designate upon execution of this General Agreement an authorized
representative to coordinate the ordering and distribution of Products and
related Licensed Materials and to interface with Seller's account executive as
needed.
A-1.7 PRICING PLAN FOR 5ESS-Registered Trademark--2000 PRODUCTS
In consideration for Customer's purchase commitment as set forth in Section
A-1.3, "Customer Purchase Commitment," Seller will provide the following
discounts off the List Price for all purchases of the following products made by
Customer during the Term.
DISCOUNT SCHEDULE FOR 5ESS-Registered Trademark--2000 SWITCH PRODUCTS
PRODUCT TYPE INITIAL SWITCH SWITCH MODULE PERIPHERAL GROWTH
DISCOUNTS GROWTH DISCOUNTS DISCOUNTS
5ESS-Registered Trademark--2000 Switch 75% 55% 25%
5ESS-Registered Trademark--2000 CDX Switch 75% 55% 25%
5ESS-Registered Trademark--2000 VCDX Switch 75% N/A 25%
RSM/ORM/EXM 65% 55% 25%
For the first 5ESS-Registered Trademark--2000 Switch or first Remote Switch
Module purchased at each new site, the initial discount shall apply. For
subsequent Growth of such 5ESS-Registered Trademark--2000 Switch, Customer may
designate two (2) six (6) month periods after such Switch turnover during which
the initial discount specified above shall also apply. For Switch Modules
and/or Peripherals ordered outside of such periods, the applicable Switch Module
and/or Peripheral discount shall apply.
A-1.8 PRICING PLAN FOR 5ESS-Registered Trademark--2000 CDX/VCDX SWITCH
SOFTWARE RELEASES
For purposes of this Section, the fees for Base Software releases shall mean the
Software Right-to-Use ("RTU") and Office Data Administration ("ODA") fees. The
purchase by Customer of a 5ESS-Registered Trademark--2000 Switch during the Term
will include, at no additional charge to Customer, a license (subject to the
licensing provisions of the General Agreement) to use the then-current Base
Software release. Additional Base Software releases licensed by
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Contract No.: LNM970313MP
Customer will be priced at eighty thousand dollars ($80,000) per release for
each 5ESS-Registered Trademark--2000 Switch host, fifty five thousand dollars
($55,000) per release for each CDX host Switch and thirty five thousand dollars
($35,000) per release for each VCDX host Switch. These license fees do not
include any additional hardware or installation. Customer will be responsible
for all engineering charges associated with each Base Software release furnished
by Seller under this Appendix.
Base Software releases shall be available to Customer in accordance with
Seller's published announcement stating when customers can order Base Software
subject, however, to Seller's then-current availability process and Seller's
standard order intervals.
A-1.9 5ESS-Registered Trademark--2000 SWITCH TRAINING INCENTIVE
For the first 5ESS-Registered Trademark--2000 Switch purchased, Seller will make
available to Customer up to one hundred (100) tuition-free training days to be
used by Customer within two (2) years of order receipt. For each subsequent
5ESS-Registered Trademark--2000 Switch purchased thereafter by Customer during
the Term, Seller will provide an additional fifteen (15) tuition-free training
days. For each Remote Switch Module (EXM, ORM, RSM) purchased by Customer
during the Term, Seller will provide an additional six (6) tuition-free training
days. Training days earned by Customer for each 5ESS-Registered Trademark--2000
Switch shall be used within twelve (12) months after the turnover date for such
5ESS-Registered Trademark--2000 Switch. Customer is responsible for all
associated travel and living expenses for Customer personnel. Seller, at its
option, shall offer training regionally at the Dublin or Hickory Ridge Training
Centers. In those cases in which Seller suitcases a course to a Customer site,
Customer shall be responsible for all associated travel and living expenses for
the instructor. While Seller recommends core courses from its Customer Training
Catalog, Customer may choose from any of Seller's 5ESS-Registered
Trademark--2000 Switch related courses.
A-1.10 INVENTORY CONTROL PROVISIONS FOR 5ESS-Registered Trademark--2000
SWITCHES
Seller will offer the Spares Exchange Service for 5ESS-Registered
Trademark--2000 Switches ("SES-5") to address Customer's 5ESS-Registered
Trademark--2000 Switch system inventory control requirements. SES-5 will
enhance equipment maintenance by facilitating the exchange of defective circuit
packs for new or remanufactured devices in a timely manner. This service
operates on a twenty-four-hour, seven-day-week basis, under the following
delivery services options:
1. Normal Delivery Interval (2 to 7 days) $35 per plug-in
2. Emergency Delivery Interval (24 hours) $70 per plug-in
3. Critical Delivery Interval (less than 24 hours) $120 per plug-in
(minimum $480 per order)
SES-5 will exchange Seller-manufactured material usually required to support a
5ESS-Registered Trademark--2000 Switch and the embedded 3B21 Computer for
"readily returnable" material (e.g., circuit packs and plug-ins, but not disk or
tape drives). Customer shall not be charged for the "readily returnable"
material provided by Seller through SES-5 if the material for which it is
exchanged is determined by Seller to be under warranty. If Seller determines
such exchanged material to be out of warranty, Customer will be billed and shall
pay for the material furnished by Seller through SES-5 based on the current
SES-5 catalog price.
A-1.11 CUSTOMER SUPPORT
In consideration for the purchase commitment set forth in Section A-1.3,
"Customer Purchase Commitment," Seller will provide, only to the extent deemed
reasonable by Seller, pre-sale engineering Services to Customer at no charge
throughout the Term. Such Services shall include technical consultation and
quote preparation for the purpose of supporting Customer's network questions and
5ESS-Registered Trademark--2000 System feature description questions. Seller's
technical consultant support group will also provide engineering Services with
respect to the integration of Seller's Products and related Licensed Materials
into Customer's network locations subject to the prior written agreement of the
parties on the price and terms for such Services.
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A-1.12 TECHNICAL SUPPORT OF 5ESS-Registered Trademark--2000 SWITCH
PRODUCTS AND LICENSED MATERIALS
During the Term, warranty assistance shall be available to Customer by calling
Seller's Regional Technical Assistance Center (RTACs) on ▇-▇▇▇-▇▇▇-▇▇▇▇
(▇-▇▇▇-▇▇▇-▇▇▇▇). Seller shall monitor this number on a twenty-four (24) hours
a day, seven days a week basis. During regular business hours (8:00 a.m. to
5:00 p.m. central time), calls will be answered by the closest geographically
located RTAC. Outside of regular business hours , all calls will be answered at
a centralized assistance center. Service-affecting problems will be expedited
to the local RTAC.
Seller will, in addition to its obligations under the "Warranty" clause of the
General Agreement, make available for purchase by Customer post-warranty
technical support. Such post-warranty technical support shall be provided under
mutually agreed upon, separate post-warranty service contracts entered into by
the parties or on a per-problem basis during the Term at Seller's prevailing
rates. Separately from such warranty or post-warranty services, Seller may
offer Services designed to enhance the operating capabilities of Customer 's
network or system on a billable basis. In addition to its obligations under
Warranty, Seller shall also make available to Customer additional technical
support. Such additional technical support shall be provided at Seller's
prevailing rates and terms.
A-1.13 5ESS SWITCH DOCUMENTATION
As part of the first Initial Switch purchase by Customer under this Agreement,
Seller will provide to Customer, at no charge, two (2) sets of product
documentation (each of the most recent text and drawing on CD-ROM). For each
subsequent 5ESS-Registered Trademark--2000 Switch purchase, Seller will provide,
at Customer's option, one (1) set of product documentation or a login to the
5ESS-Registered Trademark--2000 Switch Documentation Dial-Up Service.
Additionally, for each Switch site, Seller will provide to Customer a condensed
copy of the Translation Guide (TG5) document. No documentation will be provided
to the RSM, EXM, or ORM sites.
In addition, at no additional charge to Customer, Seller will provide to
Customer during the two (2) year period following the turnover of each
5ESS-Registered Trademark--2000 Switch purchased by Customer hereunder, those
updates to the Related Documentation which Seller makes generally available to
its other customers during such time period. After the initial two (2) year
update period described above, Customer may purchase an update subscription at
Seller's standard subscription rate.
A-1.14 MAINTENANCE SERVICE FOR 5ESS SWITCH SOFTWARE
5ESS-Registered Trademark--2000 Switch maintenance service for Software will be
offered by Seller at fixed price for term service and/or time and materials
service. This will be provided under a separate professional services
agreement. However, unless otherwise agreed to by Seller in writing,
maintenance service shall only be available for the current generic Base
Software release and the two (2) immediately preceding generic releases. If
Customer desires 5ESS-Registered Trademark--2000 Switch Base Software
maintenance service for a release which is older than the preceding (2) generic
releases, Seller and Customer must mutually agree to the scope, price and terms
and conditions of such maintenance agreement.
A-1.15 PRICING PLAN FOR TRANSMISSION SYSTEMS
In consideration for the Customer purchase commitment set forth in Section
A-1.3, "Customer Purchase Commitment", Seller will provide the discounts set
forth below for all purchases of the Transmission Systems Products described
therein which are made by Customer during the Term:
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TRANSMISSION SYSTEMS PRODUCTS DISCOUNT SCHEDULE
TRANSMISSION SYSTEMS PRODUCTS* DISCOUNT
DDM PLUS 27%
DDM-2000 FiberReach OC-1 25%
DDM-2000 OC-3 35%
DDM-2000 OC-12 35%
FT-2000 OC-48 Lightwave System 30%
SLC-Registered Trademark--2000 Multi Services Distant Terminals (MSDT) 35%
SLC-Registered Trademark--2000 Access System - Common Units 40%
SLC-Registered Trademark--2000 Access System - POTS/SPOTS Units 35%
SLC-Registered Trademark--2000 Access System - Special Service Units 40%
SLC-Registered Trademark--2000 Access System - Software 00%
SLC-Registered Trademark--SERIES 5 Carrier System - Common Units 35%
SLC-Registered Trademark--SERIES 5 Carrier System - POTS/SPOTS Units 35%
SLC-Registered Trademark--SERIES 5 Carrier System - Special
Service Units 35%
DACS IV 2000 Systems see 1.15.1 below
DACS II Systems (hardware and Software) 27%
* The above Products do not include Network Cable Systems equipment or power
equipment. Unless otherwise specified, the discounts shown above apply to
Transmission Systems Products (hardware) only. The discount for the cables used
in the systems set forth above shall be twenty percent (20%) off the List Price.
A-1.15.1 PRICING PLAN FOR DACS IV-2000 SYSTEMS
INITIAL SYSTEMS - In consideration for Customer's purchase commitment as set
forth in Sections A-1.3, "Customer Purchase Commitment" and A-1.5, "Network
Standardization", Seller will provide special model pricing on initial DACS
IV-2000 System purchases. The initial DACS IV-2000 configuration will consist
of one (1) DACS IV-2000 256 System equipped with twelve (12) STS-1s and four (4)
DS3s and twenty-eight (28) DS1s, and will have a special initial price of two
hundred eleven thousand five hundred eighty three dollars ($211,583) per system,
excluding spares. This price will be held firm for a period of twelve (12)
months from Seller's receipt of the initial DACS IV-2000 order. Following this
period, the DACS IV-2000 will be priced at forty-five percent (45%) off List
Price.
GROWTH - In consideration of the special initial price outlined above, an
upgrade price of one hundred sixty thousand dollars ($160,000) will be charged
once the DACS IV-2000 System exceeds one hundred twenty eight (128) equivalent
STS-1s. All DACS IV-2000 growth will receive a forty-five percent (45%)
discount off List Price. This growth discount will be held firm for three (3)
years after the Effective Date of this Agreement. DACS IV-2000 List Prices will
be held firm for a period of eighteen (18) months from the Effective Date of
this Agreement. Customer's special DACS IV-2000 price plan is summarized below.
PRODUCT TYPE INITIAL MODEL PRICE GROWTH DISCOUNT UPGRADE FEE BEYOND 128
EQUIVALENT STS-1S *
DACS IV-2000 $211,583 45% $160,000
* For the purposes of this Section Equivalent STS-1s represents the total
number of DS3s, STS-1s and increments of twenty-eight (28) DS1s equipped on the
DACS IV-2000 System.
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A-1.16 TRANSMISSION TRAINING INCENTIVE
In consideration for each Central Office purchased by Customer under this
Agreement which meets the minimum Transmission equipment requirements shown in
Table 1 below, Seller will provide up to fifty (50) tuition-free days of
training to Customer on Seller's Transmission Systems Products. These fifty (50)
training days correspond to two (2) complete Operations, Maintenance and
Administration classes on each of the recommended Transmission Product Training
classes shown in Table 2 below. Such tuition-free training days may be used
within the six (6) months prior to turnover date of the Central Office
deployment or no later than twelve (12) months after turnover date of such
System.
TABLE 1: MINIMUM TRANSMISSION SYSTEM REQUIREMENTS PER SITE
PRODUCT MINIMUM NUMBER OF SYSTEMS
DEPLOYED
DDM-2000 OC-3 6
DDM-2000 OC-12 6
DDM-2000 FiberReach WBS 4
DACS IV-2000 1
SLC-Registered Trademark--2000 Access System 2
DDM-2000 FiberReach NBS 4
DACS II 1
TABLE 2: TRANSMISSION OAM&P TRAINING CLASSES
PRODUCT COURSE # DAYS/CLASS TOTAL STUDENT DAYS
DDM-2000 OC-3 LW2608 2 4
LW2603 4 8
DDM-2000 OC-12 LW2612 5 10
DDM-2000 FiberReach WBS LW2611 1 2
DACS IV-2000 TR3542 4 8
SLC-Registered Trademark--2000
Access System TR4610 4 8
DACS II TR3521 5 10
TOTAL TUITION DAYS 50
Customer is responsible for all associated travel and living expenses for
Customer personnel. Seller, at its option, shall offer training regionally at
the Dublin or Hickory Ridge Training Centers. In those cases in which Seller
suitcases a course to a Customer site, Customer shall be responsible for all
associated travel and living expenses for the instructor. While Seller
recommends core courses from its Customer Training Catalog, any Transmission
System related courses may be taken at Customer's discretion. The tuition-free
seats may be used for standard course offerings associated with purchased
Transmission Systems. A minimum of eight (8) students are required for
suitcased classes.
A-1.17 PRICING PLAN FOR POWER PLANT SYSTEMS
In consideration for Customer's purchase commitment set forth in Section A-1.3,
"Customer Purchase Commitment", Seller will provide discounts set forth below
for all purchases of the Power Systems Products described therein which are made
by Customer during the Term.
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PRODUCT DESCRIPTION* DISCOUNT
UNIGY BATTERIES 20%
IR BATTERIES 20%
CPS/ECS POWER PLANT PRODUCT 35%
OTHER MANUFACTURED (FE class) 30%
OTHER PURCHASED (FF class) 15%
A-1.18 CONTINUING PRODUCT SUPPORT -- PARTS AND SERVICES
In addition to repairs provided for under the Warranty clause of this Agreement,
Seller offers repair Services and Repair Parts in accordance with Seller's
repair and Repair Parts practices and terms and conditions then in effect, for
Seller's Manufactured Products furnished pursuant to this Agreement. Such repair
Services and Repair Parts shall be available while Seller is manufacturing or
stocking such Products or Repair Parts, but in no event more than five (5) years
after such Product's discontinued availability effective date. Seller may use
either new, remanufactured, reconditioned, refurbished, or functionally
equivalent Products or parts in the furnishing of repairs or replacements under
this Agreement.
If during the agreed to support period Seller is unable to provide Repair
Part(s) and/or Repair Service(s) and a functionally equivalent replacement has
not been designated, Seller shall advise Customer, by written notice prior to
such discontinuance to allow Customer to plan appropriately, and if Seller is
unable to identify another source of supply for such Repair Part(s) and/or
Repair Service(s), Seller shall provide Customer, upon written request, with
nonexclusive licenses for Product Manufacturing Information to the extent Seller
can grant such licenses, so that Customer will have sufficient information to
have manufactured, or obtain such Service or parts from other sources. License
terms, for such Product Manufacturing Information, including charges, will be in
accordance with Seller's licensing procedures then in effect.
A-1.19 PRODUCT AVAILABILITY
Seller shall notify Customer, usually at least one (1) year, before Seller
discontinues accepting orders for a Seller's Manufactured Product sold under
this Agreement. Where Seller offers a functionally equivalent Product for sale,
the notification period may vary.
A-1.20 PROMOTIONAL SUPPORT
Seller agrees to allocate to the Marketing Development Fund ("MDF") described in
Schedule 1 attached hereto to this Appendix, ten thousand dollars ($10,000) per
5ESS-Registered Trademark--2000 Switch site purchased by Customer during the
Term of this Agreement. Any amounts allocated to the Marketing Development Fund
hereunder shall be subject in all respects to and may be utilized by Customer
only in accordance with MDF Guidelines.
A-1.21 FUTURE CONSIDERATIONS
Upon completion of Customer's high yield debt and equity offering, Customer
shall pay Lucent a non-refundable down payment of five million dollars
($5,000,000) for dedication of Lucent's factory capacity to support Customer's
construction project in the second set of eighteen (18) cities. When Customer's
total purchases of 5ESS-Registered Trademark--2000 Switch Products and related
Software (excluding Services) exceeds thirty-five million dollars ($35,000,000),
Seller shall, in addition to the applicable discount specified in Section A-1.7
above, apply a 42.7% credit to all subsequent Switch Product and related
Software orders (excluding Services) until the total dollar amount of such
credits equals five million dollars ($5,000,000).
Lucent Technologies Proprietary
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Contract No.: LNM970313MP
Schedule 1 MARKETING DEVELOPMENT FUND GUIDLINES 11/1/96
MARKETING DEVELOPMENT FUND
The Marketing Development Fund (MDF) is a cooperative approach to marketing and
promotion. The program provides assistance for pre-approved market development
and promotional activities executed by authorized Lucent Technologies Global
Commercial Markets (GCM) customers to stimulate switched services sales
activity.
MDF FUNDING
- Funding is based on the year's purchases of Lucent Technologies Network
Systems 5ESS-Registered Trademark-, Transmission, Transmission and OS
products only. Network Systems products are used to calculate the amount
of MDF funds. NOTE: Network Cable Systems products are not eligible for
rebate reimbursement calculations under this plan.
- For customers to be eligible for MDF, a written marketing plan must be
jointly approved by the Lucent Technologies GCM Marketing Administrator and
sales organization and the customer's marketing and sales organization
prior to submission of any MDF reimbursement claims.
- Proper MDF forms are submitted by the customer along with supporting
documentation for pre-approval. After approval, copies of original paid
invoices are submitted. MDF reimbursements are issued as credits to be
applied to current or future Lucent Technologies invoices.
- Funding is based on a percentage of the year's total paid direct purchases.
- MDF reimbursements apply to marketing activity within the approved plan
only.
IT'S A FIVE STEP PROCESS
1. Jointly prepare a Marketing Development Business Plan. This plan must at a
minimum include:
- Marketing opportunities or projects designed to stimulate
switched services sales activities
- Forecasts of new revenues produced with corresponding cost
summaries, and
- Specific "measurements of success."
2. Submit a completed MDF Submittal Form for pre-approval.
3. When the project is completed, the approved MDF Submittal Form will be
returned to Lucent Technologies along with PAID invoices and substantiating
documents.
4. The MDF program administrator will process the reimbursement claim, verify
that funding is available, and, if so, forward the approval documentation
to the customer with a reimbursement certificate.
5. When submitted by the customer, the amount of the reimbursement certificate
will be credited to the customer's account.
ANSWERS TO YOUR QUESTIONS . . .
Your primary MDF contact with Lucent Technologies is your Account
Representative. Your Representative can provide whatever assistance you may
need in providing direction and planning marketing strategies.
Lucent Technologies has appointed a Marketing Development Fund Administrator who
handles day-to-day details of tracking and coordinating reimbursement claims
within Lucent Technologies. You may contact the Administrator at the following
address: ▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
Lucent Technologies Proprietary
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Contract No.: LNM970313MP
ACTIVITIES ELIGIBLE FOR MDF REIMBURSEMENT
DIRECT MARKETING
Direct marketing may include advertising, e.g. print ads and radio spots,
collateral salesware, catalogs, trade show fees, Lucent Technologies product
displays, direct mail and telemarketing programs and other pre-approved
activities. MDF funds may be utilized to assist with individual company
customization of direct marketing materials, including development, printing,
and one-time production costs on authorized mailings.
EVENTS
MDF allowances may be used to off-set Lucent Technologies sponsorship of events
such as technology forums, conferences, seminars, trade shows or other business
related activities.
Pre-approval requests must clearly demonstrate goals and objectives of the
event. Reimbursement claims must include a list of any other co-sponsers, a
copy of guest invitations to the event, detailed event cost estimates, and a
full description of the participation, involvement, and activity by the Lucent
Technologies Representative who would attend or support the event.
DATABASE ACQUISITION
MDF can be utilized to fund a variety of pre-approved database tools such as
market-based automated pricing tools (which could include basic Centrex rates,
standard features, and ISDN rates and features), and Marketing Information
Databases (such as MKIS) for client prospecting, lead generation and
infrastructure modeling.
SALES INCENTIVE PROGRAMS
Incentive programs to stimulate switched services sales are designed and
administered by the customer. A jointly established target for service activity
penetration must be in effect and tracked for the duration of the program.
Proposed incentive programs must conform to the following guidelines:
- An outline of procedures to administer, track and audit the program is
provided.
- Estimated program costs, award descriptions and values are identified.
- A complete program activity description with specific time-frames is
established.
- A list of participating Account Executives and Sales Managers and their
incentive program objectives is submitted to Lucent Technologies.
TRAINING
Lucent Technologies offers a wide range of educational opportunities, and
encourages Lucent Technologies sponsored customers to increase product knowledge
and marketing and sales skills. Lucent Technologies training courses are
delivered at Lucent Technologies training locations or suitcased to remote
locations.
MDF PERSONNEL
Under the MDF program, the Lucent Technologies customer may fund technical
consultants and/or marketing sales consultant personnel to implement marketing
and sales programs to stimulate switched services sales activity. All
pre-approved personnel funded by MDF must be dedicated 100% to stimulating
Lucent Technologies switched services sales. All expenses must conform to
standard Lucent Technologies voucher guidelines. All expenses require
pre-approval and must include: overall project concept, opportunity
identification, program cost, and a detailed action plan with measurable
milestones and start-stop dates. MDF payments for personnel are made quarterly.
Lucent Technologies Proprietary
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Contract No.: LNM970313MP
AMENDMENT NUMBER ONE
TO THE GENERAL AGREEMENT
BETWEEN
KMC TELECOM INC., KMC TELECOM II, INC.
AND
LUCENT TECHNOLOGIES INC.
This Amendment (Contract Number LNM970922MP) (hereinafter "Amendment") is made
effective October 15, 1997, ("Effective Date") by and between KMC Telecom Inc.
and KMC Telecom II, Inc., each a Delaware corporation, with offices located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
collectively referred to as "Customer"), and Lucent Technologies, Inc., a
Delaware corporation, acting through its Network Systems Group, with offices
located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
"Seller").
WHEREAS, Customer and Seller have, effective March 6, 1997, entered into a
General Agreement (Contract Number LNM970313MP) (hereinafter "General
Agreement") setting forth the terms and conditions pursuant to which Seller
agreed to supply and Customer agreed to procure certain Lucent Products,
Licensed Materials and Services (as such terms are defined therein); and
WHEREAS, Customer and Seller desire to amend the General Agreement as set forh
herein,
NOW THEREFORE, in consideration of the mutual promises hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. SCOPE OF AMENDMENT
The definition of "Customer" contained in the General Agreement is hereby
amended to additionally include KMC Telecom Leasing I, LLC and KMC Telecom
Leasing II, LLC; it being the intent and understanding among the parties that
KMC Telecom Leasing I, LLC and KMC Telecom Leasing II, LLC shall be authorized
to procure Products, Licensed Materials and Services from Seller under and
pursuant to the terms and conditions of the General Agreement.
2. ENTIRE AGREEMENT
Except as specifically modified, amended or supplemented herein, all terms and
conditions of the General Agreement shall remain in full fore and effect.
Lucent Technologies - Proprietary
Contract No.: LNM970313MP
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their duly authorized representatives on the date(s) indicated.
KMC TELECOM INC. KMC TELECOM II, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------- ---------------------------
Typed Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Typed Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President Title: President
Date: October 20, 1997 Date: October 20, 1997
LUCENT TECHNOLOGIES INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Typed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Sales Director
Date: October 28, 1997
Lucent Technologies - Proprietary